Is an old relationship resuming as crypto traders get tired of bitcoin's passiveness?
Back in 2017, which is ancient history in the crypto calendar, there were some common informal relationships between bitcoin and alternative cryptoassets. In summary, these trends went as follows: 'bitcoin up, alts down; bitcoin down, alts down; bitcoin sideways, alts up'. These relationships were however, losing steam by the end of the year. Bitcoin has been stuck in the same boat for the majority of the past 6 days, and is still 6% down since 30 days ago. Conversely, it seems some major alts are slowly rising.
Let's draw some comparisons for ourselvesusing this OnChainFX table. Even Verge, at least before yesterday's anti-climatic announcement, which caused a 27% decline - is up 140% since last month. It's mysteriously 69% below it's all-time high. For reference, EOS is 54% down, monero is 58%, bitcoin 60%, and ether 65% respectively. However, could Verge's past months' success be derived from a tweet by John McAffee, or it's most recent partnership with an adult industry veteran?
Now that the U.S. tax day is finally over, what can happen? The majority of citizens waited until last minute to file their taxes, crashing the IRS website, which means there's one extra day for everyone. In addition, extensions can still be submitted. If a boost were to come in the following days, it should be derived from a different catalyst, despite what CNBC tries to claim. As long as some bitcoin whales keep unloading their holdings - as they did yesterday - the reversal won't come soon.
Previously we shared a controversial article, which tried to argue that ‘blockchain is not only crappy technology but a bad vision for the future’ and promised a rebuttal for it. Following, we discussed this indirect response in MIT’s Technology Review. It's time to write about Kai Stinchcombe’s irrationally bearish ideas – especially after the Financial Times’ Alphaville blog decided to play along the same tune, lauding the original piece like its ideas were fresh.
Unsurprisingly, they weren’t. The same narrative is repeated to exhaustion as new cynics become familiar with blockchain. These more crypto-educated folks believe an idea can be attacked at its weakest point – i.e. the fact some more newbie enthusiasts believe blockchain can solve more problems than it’s technically, and conceptually, able to. Yet, any honest discussion must strive to attack an opposing position at its strongest. Subsequently, we will be dissecting Kai’s article.
Let's start with a brief reply to Kai's two central arguments: 1) Failure to achieve adoption until date means blockchain is doomed, and 2) Blockchain is not a trustless technology as you have to trust the software and the code and - most worryingly - the people behind it.
The first argument claims that people trust more centralised solutions than decentralised ones. Currently popular centralised solutions (e.g. Amazon, Visa, Paypal, Venmo, or even governments) have incentives to ensure they don't break their customers’ trust. What's missing here is that indeed, such organisations have those incentives in place, but only in perfect democracies and markets. What about monopolies? What about corruption? What about gerrymandering and media manipulation?
The second argument claims that in centralised organisations, people can revert to software or code in case it's necessary to ensure justice. Well, what Kai is missing here is that decentralised organisations are also made of people. Maybe he had never heard of the DAO fork, or the EIP867? Briefly, they all represent instances in which decentralised communities decided software code is like legal code – it needs to be adapted to the evolution of times. Kai is correct in the sense that some members of the blockchain community enjoy blind allegiance to code. Yesterday, a vocal Twitter personality attacked Ethereum as per the examples above, claiming that such changes are bad. However, such changes reflect the market-based mechanisms of a decentralised community - consensus is achieved by discussion, not by abiding to old laws for the sake of tradition. Tomorrow we'll further delve into the comparative between centralised vs. decentralised organisations. We'll discuss why we can trust blockchain technology even though the people contributing to it might make mistakes.
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