Digital Assets Chronicle #26 The concept of Economic energy and how to store it

Hey there everyone! 👋 This is Shivam. I bring to you the 26th weekly edition of Digital Assets Chronicle. This is an effort through which I try to share my thoughts on the Digital Assets Industry and Business Models in the space. Your 0 to 1 guide for Digital Assets Industry

Read time - 4 mins

In this edition, the article I explore is titled "The concept of Economic energy and how to store it" Hope you enjoy it.

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

Your wealth is "Economic energy" stored in some form or the other

1} We work hard to make money

Money is eventually a way to compensate us for spending our time and energy and can be reconciled as economic energy or wealth

->We pay taxes giving away our economic energy

->We store it in assets to save our energy

->We invest to help it grow

There aren't many ways to grow or store economic energy. Why is that the case. Let’s look at Dollar for instance

Dollar is collapsing against consumer goods. The dollar has lost 95% of its value, means consumer goods are 20 times more expensive today than 100 years ago

Now consumer goods are manufactured items, so these are not scarce

Let's look at something that is more scarce. "Gold is a bit scarce"

And so the dollars dropped 99% against gold in that same hundred years, not 95%. Also, gold is not completely scarce. We keep creating more gold. We get better at it. But at the end of the day, it's a bit more scarce than consumer goods that can be manufactured

Let's talk about something that's even more scarce.

The 500 most valuable companies in the S&P. The US dollar has lost 99.8% against S&P

Which means that, "If I measure inflation against a yardstick that is more fixed or scarce, then you see the true measure of inflation"

On top of that, "Foreign currencies" are collapsing against the dollar.

1. Argentine peso against the dollar

2. The Indian Rupee. It's lost 90% of its value against the dollar

Well, in theory, money is a way for you to store your economic energy and not have it stolen from you by the government

If there was "Perfect money" it would be the solution to all your problems

2} Why you can't make more of Bitcoin?

Because, its in the code. Bitcoin energy difficulty is a way to make it difficult to make more money

The only way to build wealth is to use it buy assets that help store its value or grow

#bitcoin does that

State of Crypto affairs - A quick look at the market 

The global cryptocurrency market cap today: $1.10 Trillion

Weekly change: 2.80% | Yearly change: -26.59%

Bitcoin (BTC) is the largest cryptocurrency with a market cap of $514 Billion.

Weekly change: -5.06% | YTD change: 55.06%

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: 46.32% | Last year (June 2022): 43.69%

Greed and fear index 

The market sentiment has been a bit neutral now post Bitcoin dumping in the last week. The beginning of a crab market it seems. However, with an agreement on Debt ceiling can send the Bitcoin soaring to new heights in the short term

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.

The significance of the charts - understand how the supply of Ethereum is decreasing post the merge, which means “deflationary economics” for the Blockchain

Supply change since merge POS -282,204 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: 

The $11M NFT Auction and Snoop Dogg’s Evolving Collection Rapper Snoop Dogg's new NFTs will change as he tours this summer, while Sotheby’s concluded a successful second 3AC NFT auction.

Fed pauses interest rates, but Bitcoin options data still points to BTC price downside Fed Chair Jerome Powell announced a pause in interest rates, but Bitcoin options data still warns that a BTC price drop to $25,000 is possible.

What Winter? Institutions’ Crypto View Rosier Than You Think Nomura’s global survey shows that commitment to digital assets remains strong outside the U.S., offering a way forward for the sector, says Michael Casey.

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 researchM