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Analysis

Perhaps Proof-of-Stake Can Work Long Term

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Some of the largest Potcoin wallets are exchange wallets, and they’re not staking. In order to keep funds liquid in a proof-of-stake coin like Potcoin, you can’t stake, because your coins will occasionally not be available for sending. Here is an example of a long-term staking wallet that the author came across. As you can see, they’ve staked 30,000 coins in a couple of years, making no actual outward transactions in all this time. At present time, their stake represents around .63545778 BTC or $2,927, over a period of a couple of years. The price of the coin has fluctuated greatly in all this time, sometimes spiking, but whoever owns this address has felt sufficiently incentivized to continue holding. Currently they receive several small rewards per day, it’s almost like interest on a bank account, paid with high frequency. Certainly the price of Bitcoin has influenced their actual return.

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Here is the thing, however, that makes it less harmful to their economy: the holder keeps holding. So while long-term the value of the Potcoin network will be in a constant state of dilution, with new coins continually being generated, two things are true of this supply situation: 1) many coins are not staking or contributing to the stated inflation because they live on exchanges instead of staking wallets and 2) many of the staked coins do not immediately enter the economy, and certainly therefore don’t exit via the exchanges in a quick fashion. Their emission seems small enough that the delay is almost built in.

Eventually, Ethereum will go proof-of-stake. The author notices that the eBay and other markets are beginning to be flooded with older model GPUs, and reckons it’s just a matter of time before Ethereum miners sell off their GPUs and go to proof-of-stake. Unlike Potcoin, Ethereum routinely experiences double-digit percentage changes in price in its fiat pair – many dollars in change. This lessens, in the author’s opinion, the potential incentive to hold the coins, with people instead wanting to capitalize on spikes and buy back lows. This could lead to greater volatility, which isn’t the worst thing for traders.

While many people would simply hold for the stake in the Ethereum proof-of-stake model, many more still would simply sell the stake when price rose enough, creating some new inherent ceiling on price that might continually rise nevertheless. Perhaps a different approach would have been to cap the amount of Ethereum and make the stake rewards happen in a new base network token similar to NEO GAS. This might have in effect forced the long-term value of Ethereum, while still incentivizing people to stake the currency. One could argue that the new token would have no inherent value, but it could be required for sending transactions, or something. That would create a new paradigm, but it doesn’t seem to be what’s on the cards for Ethereum.

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We still think Ethereum’s value will long-term be floated by demand for money to invest into the many, many tokenized systems built on its impressive blockchain. While the author and others look forward to the influx of cheaper GPUs with which to mine Monero and other up and coming chains, the proof-of-stake change in Ethereum is bound to have some effect. In Potcoin, over time, the effect has been neutral at worst, and we can only hope for a similar or better result in Ethereum. The demand for Ethereum will likely rise without regard to the way in which new Ethereum enter the economy, and as such, the value is likely to continue its rise as well.

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Analysis

Technical Analysis: Litecoin and NEO Jump as Bitcoin Trades near $8000

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The cryptocurrency segment continued its bullish run, as the total value of the coins climbed above $230 billion for the first time ever, while Bitcoin also posted marginal new highs. The most valuable currency is still overbought regarding the long-term picture, and we continue to expect a deeper correction in the coming period, despite the recent strong rally. Support levels are still found $7700, $7000, and $6700 while the $8000 level is ahead as a major obstacle.

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BTC/USD, 4-Hour Chart Analysis

Litecoin has been the most active major besides Bitcoin, as it rallied strongly after breaking out above the key $64 resistance and it breached the next target at $75 before heading below $70 again. The coin remains in bullish long- and short-term patterns, and we expect a move above the major resistance zone ahead with the next target found at $82.50.

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Litecoin/USD, 4-Hour Chart Analysis

NEO is showing strength in the second half of the session, while Monero is recovering well from a short-term dip, similarly to IOTA and Ethereum Classic. Ethereum continues to represent stability in the segment, while Ripple failed to build up momentum so far after yesterdays spike higher. With still most of the altcoins being in bullish setups, let’s see the short-term charts.

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Analysis

XRP Looking to Make a Significant Rally

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The XRP/USD pair went into a deep correction after hitting 0.29490 a month ago. It nosedived to the major support level of 0.19052. The pair consolidated for a few weeks which gave the market the legs to test resistance at 0.22924.

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Technical indicators show that the pair was ready to breach its immediate resistance, which it did this morning. Now that resistance has broke at 0.22924, it’s time to buy. This successful breakout will take the pair to 0.23997 first and 0.26563 next before hitting the target of 0.26796 which is coincidentally a major resistance level.

Technical indicators hint that the market would most likely be overbought by the time it hits 0.26796. Should it respect the major resistance level, the likelihood of the market turning extremely bearish increases. Therefore, it is recommended to closely watch your trail stops to preserve your gains.  

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Summary of Strategy

Buy: As close to 0.22924

Support: 0.22224 and 0.20081

Target: 0.26796

Stop: If the market breaches 0.20081 as next reliable support is 0.19052

 

Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

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Analysis

Technical Analysis: Ripple Breaks Out as Bitcoin Tests Highs

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Cryptocurrencies are having another bullish session as the total value of the market surged to a new all-time high near $225 billion, with the help of the rally in BTC and Ripple, and despite the drop in the value of Bitcoin Cash. The most valuable coin its record high yet again after the brief but steep weekend correction, despite the still overbought long-term picture. We still urge traders and investors to wait for a deeper correction before entering new positions here, with support levels found at $7000, $6700, and $6000.

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BTC/USD, 4-Hour Chart Analysis

Ripple has been the other main mover of the day so far, as the coin skyrocketed on huge volume and breached the $0.26 level before turning lower and stabilizing near $0.23. The coin triggered a short-term buy signal by moving above $0.2250 and it remains bullish on both time-frames, despite the pull-back, with another major target level ahead at $0.30.

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Ripple/USD, 4-Hour Chart Analysis

The other majors are little changed expect IOTA, which further added to yesterday’s gains and reached overbought readings, while Ethereum Classic and Dash continue to drift lower in short-term correction patterns. Let’s see the detailed analysis of the short-term charts.

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