20 Okt

A new Bretton Woods to save the dollar against the Covid? Bitcoin rubs its hands

Who will save the world economy? – The world economy has still not recovered from the 2008 crisis. It has been faltering since then and has only remained standing with a great deal of “monetary easing” (in other words, printing presses ). The new crisis due to the coronavirus is likely to drive the point home, and the question of a major monetary reset à la Bretton Woods arises.

A pivotal moment for the global economy

The Bretton Woods agreements were concluded in July 1944, when the world and its economy had just chained the First and Second World Wars in a few decades , with the Great Depression of the 1930s between the two.

The old gold standard (or gold standard) was then backed by the US dollar , which then began to become the world reference currency . The fixed parity was 35 dollars for an ounce of gold (31.1 g). These agreements also saw the creation of the International Monetary Fund (IMF).

IMF-report

It was IMF Managing Director Kristalina Georgieva who called on world leaders to gather around a table to discuss a major new economic agreement:

“How can we seize this situation similar to that of Bretton Woods to move forward towards a better world after the pandemic? (…) We are faced with 2 major tasks: fighting the crisis today and building a better future. “

A real question, but a bad solution in prospect?

Unfortunately, the director of the IMF does not even consider the end of fiat currencies based on the sole confidence in their issuing states. No return to a healthy currency therefore, as in the old gold standard , where the precious metal was not printable at will , just like Bitcoin (BTC) today, with its fixed quantity of units – 21 million and not one more.

For Kristalina Georgieva, it is above all a question of ever more economic stimuli and investments in various fields. We just wonder where all this magic money is coming from .

Obviously, if high inflation ends up being triggered because of all these monetary impressions, it will have a significant impact on assets perceived as safe havens .

7 Okt

Dash CMO: „Dash should not be perceived as a data protection cryptocurrency“

Dash originally advertised with a focus on data protection.

Dash ( DASH ) has long been perceived as one of the best anonymity-specialized cryptocurrencies in the industry, but this reading now seems to be history, because the Dash Core Group, the operator and developer behind the project, no longer wants to be a „privacy asset“ or Privacy cryptocurrency are classified.

Dash Core Group CMO Fernando Gutierrez said in an interview with Cointelegraph when asked whether Dash is a data protection cryptocurrency:

„No, Dash is a payment cryptocurrency that focuses on its practical usability, i.e. on criteria such as speed, cost efficiency, user-friendliness and user security through optional data protection.“
Dash was originally founded in 2014 as a fork of Bitcoin, the project initially being known as XCoin, before the name was changed to Darkcoin and finally to Dash. The cryptocurrency advertised with its special focus on data protection . „Dash is a data protection-oriented cryptocurrency based on the work of Bitcoin founder Satoshi Nakamoto,“ as it was called in the project draft at the time .

In addition to Dash, Monero (XMR) and Zcash (ZEC) were added in 2014 and 2016, two more “anonymity cryptos”

As can be seen from Gutierrez’s words, Dash apparently no longer wants to specialize in data protection. Nevertheless, the PrivateSend function is still available to users of the cryptocurrency, which ensures increased data protection. “The technology Dash uses for the PrivateSend function is CoinJoin. This is a method of obfuscating transactions until they become so complex that they can hardly be analyzed ”, as the CMO explains in this context.

CoinJoin established itself in the industry in 2013. With this process, Bitcoin users can summarize and mix their transactions so that they are much more difficult to understand. Dash has more or less adopted this approach, with a built-in feature making the process much easier to use.

In the past few days, data protection cryptocurrencies have been increasingly targeted by government agencies, as can be seen, for example, in the recent contract award by the American tax office, which offered a reward for cracking Monero. „The Dash Core Group does not take a position on the award of contracts by the US tax office,“ said Gutierrez when asked about this message. To this end, he adds:

“This does not affect or threaten Dash in any way, because Dash is a public blockchain. Dash doesn’t need to be cracked, because Dash creates privacy through probabilities, not encryption. This is actually no different from the Bitcoin blockchain. “
The crypto analysis firms Chainalysis and Integra FEC recently received the bid for the US tax authorities‘ tender for 625,000 US dollars .

2 Okt

Inflation has cost Bitcoin hodlers 20% in the last decade

Since 2010, inflation turned USD 1 into 84 cents, while USD 1 invested in Bitcoin would be worth USD 274,000.

Bad news, the increase in the price of Bitcoin (BTC) over the last decade may have been exaggerated due to the accompanying fiduciary inflation. Since Bitcoin is typically denominated in U.S. dollars, it’s not immune to devaluation.

Why might the decline in Bitcoin futures volume signal the beginning of a new upward trend?

The price of Bitcoin against the inflation-adjusted price of Bitcoin.

In the decade following the economic crisis, the United States enjoyed one of the lowest inflation rates in history, hovering around 2% per year. However, during the decade, this added up to almost 20%. So if we use the 2010 dollar as a base and apply its subsequent devaluation to the Bitcoin price, then the current price of $10,466 becomes $8,770. While this may be a great lesson for some hodlers in the long run, it doesn’t mean that Bitcoin has been a bad investment or that it’s not a good store of value.

Investing in a business or in Bitcoin, which is better?

USD 1 invested in US dollars in 2010 against Bitcoin.

On the contrary, if we compare Bitcoin’s performance and the USD in the last decade (again adjusting for inflation), then there’s no comparison. A dollar invested in USD would have become 84 cents, while a dollar invested in Bitcoin would be worth USD 274,000. Cryptomoney has clearly done a better job of preserving its value.

Why isn’t a strong dollar good for Bitcoin?

Bitcoin inflation.

Bitcoin isn’t immune to inflation, but that could complicate the story a bit. As long as the rate of trust inflation remains low and Bitcoin continues to increase its value at a rapid pace as it has until not long ago, the effect of trust inflation can be negligible for most investors. The only way to escape completely would be to stop calling Bitcoin in fiat. Then, perhaps, 10 years from now, we’d be discussing how many Satoshis we hope to buy with one dollar.