Crypto Beans #17 Bitcoin has a cause, its a hope for leading a change

Hey there everyone! 👋 This is Shivam. I bring to you the 16th weekly edition of Crypto Beans. This is an effort through which I try to share my thoughts on the crypto space and help you stay updated. Your 0 to 1 guide in crypto.

Read time - 4 mins

In this edition, the article I explore is titled "Bitcoin has a cause, its a hope for leading a change" Hope you enjoy it.

Spill the beans (Explain to me like a 5 year old) 

Bitcoin is a rebel with a cause! It rejects the notion that government authority strengthens money. Why?

1} Governments control currencies right now

If the government controls the currency, they can manipulate it by printing more of it, thus diluting the purchasing power of those who already hold it. And, governments love nothing more than a quick fix to their problems by creating more money out of thin air.

Nowadays, it's even easier for the Central bank to just change some numbers in their computer and voila! More money created out of thin air! But it's not just about government control.

When anyone has authority over money, it becomes unpredictable and unreliable. They can change the rules at any time.

2} Lets take a case in point: The Roman Empire

Let's dive into the fascinating world of ancient Rome's currency system. Back in the day, trade was everything to the Romans - it generated vast wealth for the empire's citizens. And the major silver coin used for over 200 years was the denarius - worth approximately a day's wages for skilled laborers and craftsmen, and of high purity during the first days of the Empire.

However, the city of Rome itself had only 1 million people, and costs kept rising as the empire became larger. With a finite supply of silver and gold entering the empire, Roman spending was limited by the amount of denarii that could be minted.

This made financing the pet-projects of emperors challenging. How was the newest war, palace, or circus to be paid for?

Roman officials found a way to work around this. By decreasing the purity of their coinage, they were able to make more “silver” coins with the same face value. With more coins in circulation, the government could spend more. And so, the content of silver dropped over the years.

3} What happened then?

The real effects of debasement took time to materialize. Adding more coins of poorer quality into circulation did not help increase prosperity – it just transferred wealth away from the people, and it meant that more coins were needed to pay for goods and services. By 265 AD, when there was only 0.5% silver left in a denarius, prices skyrocketed 1,000% across the Roman Empire.

Hyperinflation, soaring taxes, and worthless money created a trifecta that dissolved much of Rome’s trade. The economy was paralyzed.

4} This begs the question, What could be the characteristics of Ideal money?

From the point-of-view of everyday savers, the best money would

Have a hard-capped supply, Have no authority in control, Have no ability to change the rules, Be protected by the universal laws of math, Incentivize savers to hold onto their money (via supply dynamics that cause the money to appreciate in purchasing power over time)

This is not some radical idea if you think about it hard and.....

Exactly what Bitcoin does!

State of Crypto affairs - A quick look at the market 

The global cryptocurrency market cap today: $1.33 Trillion

Weekly change: 7.86% | Yearly change: -32.88% 

Bitcoin (BTC) is the largest cryptocurrency with a market cap of $587 Billion.

Weekly change: 8.25% | YTD change: 82.48%

Another important metric is Bitcoin dominance which can be used as a rough indicator of the relative strength of Bitcoin versus other cryptocurrencies. A high Bitcoin dominance means that Bitcoin has a large market share and is potentially more influential in the overall cryptocurrency market and vice-versa.

Bitcoin dominance: Current Year: 46.41% | Last year (April 2022): 40.77%

Greed and fear index 

The market sentiment has been turning, now the market seems to be getting more cautious with the news around layoffs and looming recession.

Note: The data used is based on metrics like Volatility, Surveys, Bitcoin Dominance, Social and Google Trends. Source: Coinstats

Is ETH ultrasound money? 

Let's have a look at Ethereum supply changes post its merge to a PoS blockchain from PoW, as there is a shift in the narrative for Ethereum to become a store of value due to the expected reduction in ETH emissions.

Supply change since merge POS -87,458 ETH

The graph highlights POS vs POW issuance since the merge. Impressive numbers, look super bullish for ETH long term given the supply of ETH is not growing as before

What's brewing today? Bringing fresh beans to you: 

Bitcoin Is the 'Boring, Old Grandpa' Right Now Compared to Ether: Dexterity Capital Manager Partner: “Bitcoin’s going to be the boring old grandpa right now in the room,” Safai told CoinDesk TV’s “First Mover” on Friday referring to why, during these uncertain economic times, bitcoin’s rally may be due to its simple, more familiar story.

a16z State of Crypto Report 2023: A yearly must-read. By a16z

Elon Musk reportedly plans AI startup to rival ChatGPT-maker OpenAI: While Musk left the board of OpenAI in 2018, the launch of the new AI startup will place Musk among other tech giants, such as Google and Microsoft, to build next-gen AI.

Whats meme-ing? Better make sure this is fun

And now the funny part,

What did you think of today's edition?  

Reach out to me on Twitter or Linkedin for any feedback :)

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.