Blockchain is known for its immediate settlement of transactions. The fact that the technology does not require lengthy verifications, reconciliations and clearance make it a viable option for the replacement of the current technology.
One of the reasons that blockchain enjoys this feature is the single shared version of agreed-upon data, otherwise known as a decentralized ledger. Blockchain technology is such that no third party or clearing houses are required. Thus that’s why using blockchain is way cheaper because the overhead fees applied to third parties and clearing houses are eliminated.
A Noisy Market
Cryptocurrencies are still in their early stages of development and are already making waves between the old and the young. Different age and social class groups from the inexperienced day traders seeking to maximize their profits to the new and established advisors and influencers seeking to increase their influence of social media. And then there are long established financial institutions, opportunists, governments, celebrities, crooks, and investors. There is a space for every one of them in the crypto space.
Currently, there are over 2000 crypto coins and projects in the crypto space, each aiming to change the world. Amongst the sincere, are well-packaged scams, each one of them weighs on a burgeoning market and that which depends on the sentiment, regulatory uncertainty, and mass media.
The asset trading market, with a market cap of only about USD 100-200 billion, is one of the highly volatile markets where a single buying or selling at a large amount can rock the market. It affects the entire market often due to high correlation.
According to Metcalfe’s law. Network’s value grows exponentially over time in proportion to increasing participants. When it comes to bitcoin; however, the cost is reflected in the market price.
If we experience an increasing adoption rate, coupled by the development of underlying technology to support the same, enough media presence and opportunistic trading, we could witness a model similar to viral infection of bacterial growth.
Forecasts have ranged from high moon prices to Lambo resulting gains and doomsday crashes. (They have announced bitcoin’s imminent death a prominent 355 times) The sad news is that popular media channels sometimes pushed negative press. The impact has apparent effects on mass opinions and general sentiments.
According to the latest research statistics, the number of google searches and tweets changes before even the prices do. Thus it’s safe to assume that the number of tweets and their sentiments could influence prices in a growing, small, and highly volatile market.
USD 250k Bitcoin
Market participants need to realize bitcoin’s convenience, censorship resistance, and the inability to exert market power. When the advancements over physical constraints of gold are also recognized, then more people will buy and hold bitcoin.
Bitcoin will then become more valuable. Demand and hash rate will also be set to increase, thus more holders and developers being attracted. The result will be higher liquidity, and this will reinforce the bitcoin network effect and promote price appreciation
The market power of digital networks through permission, less character will lead to a substantial increase in the network’s efficiency and thus unlock the high strength of the potential economic value.