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VOLATILE CRYPTO NEWS CENTERED AROUND EL SALVADOR. One of the biggest crypto stories over the past two weeks was another run and bust of Bitcoin Ether and other cryptos, all tied around September 6th.
That was the day El Salvador officially rolled out its acceptance of Bitcoin as legal tender.
After wallowing for several months in the 32 to 37 thousand range, Bitcoin broke in August above 40, and then past 45 thousand. Ethereum, meanwhile, climbed from the low two-thousand range back above three thousand, then 35 hundred.
MSM business outlets jumped with glee on the news of El Salvador’s bumpy rollout, seeming relieved not to have to talk about Bidenflation for at least a day or two.
The Associated Press reported that the deployment encountered glitches in the early hours, with President Nayib Bukele acknowledging that the digital wallet used for transactions was down.
Bukele communicated about the progress of the rollout via his Twitter account, which has more than 2.8 million followers. The official national digital wallet, Chivo, had been unplugged while server capacity was upgraded.
The risks are not small for El Salvador.
Two of three Salvadorans disapprove of the government spending taxpayers’ money to create the digital currency system and more than 80 percent have little or no confidence in Bitcoin, according to polls conducted this month by the country’s Universidad Centroamerica José Simeón Cañas.
Bukele has been a leading advocate for having his nation use Bitcoin, which has a huge worldwide decentralized node network, has proven impervious to network hacking and crypto key cracking, though not to scams and user loss of wallet crypto keys and other problems.
It’s also designed to never inflate beyond a hard cap of 21 million bitcoin.
Some people unfamiliar with cryptos aren’t aware that “coins” like Bitcoin are fractionable. They can be purchased and accrued in partial-coin increments. For example, 100 U.S. dollars can currently buy about 0.002195 Bitcoin (at Bitcoin est. price of $45,500), on exchanges like Coinbase or Kraken.
In one day, Bitcoin crashed ten thousand, from it’s multi-month high of 52 thousand. By the end of the day, it was back in the mid 40’s, but the initial plunge was enough to pour on El Salavador’s parade.
Despite the tons of negative news, the pioneering Central American nation, once known primarily as a hotbed of Soviet assisted communist fervor, continues its implementation of bitcoin.
Notably, it purchased some 200 bitcoin on the dip.
Late last week, Banco Agrícola, the country’s largest bank, announced that it will accept bitcoin as payment for loans and credit card payments. Citizens can now use the cryptocurrency to buy products and services from businesses that accept payments via the bank’s gateway.
According to crypto reporting outlet The Block, Banco Agrícola has also partnered with Flexa, a New York-based payment network, to allow bitcoin payments via its mobile app.
Customers will be able to pay U.S. dollar-denominated loans and credit card balances with bitcoin at “the exact fair market rate, without any additional fee or spread,” according to the bank’s statement. The option is intended to operate with any Lightning Network-compatible wallet, including El Salvador’s official wallet, Chivo.
Flexa CEO Tyler Spalding said his firm is also aiming to offer interoperability with additional payment gateways, and to leverage its technology to make taking bitcoin-based payments at physical locations easier.
GENERAL TREND OF BIG SWINGS. Many other cryptos benefited from the general spiral, perhaps most notably Solana, which has gone from a two dollar buy in January to the 200 dollar range in recent weeks, before drifting somewhat lower.
The Solana network boasts 2nd gen features speeding transactions and allowing smart contracts, which are used in Defi and NFTs.
Cardano, another advanced crypto network, more than doubled in price, to 3 dollars at one point.
Binance token, and Avalanche (AVAX), a DeFi token, saw increases, as did many tokens whose networks currently power decentralized finance and non-fungible token (NFT) projects and exchanges. Some of the benefitting tokens included Polkadot, Uniswap and Tezos.
Other innovators like Quant (QNT), which facilitates connections between distributed blockchain ledgers, also improved.
Perhaps the general takeaway has been that more money, and a larger portion of total crypto investing is undeniably flowing toward so-called “altcoins”, which is basically a blanket term for every other crypto besides Bitcoin.
Though Bitcoin is still the undisputed king, with a current overall share of 43 percent of total crypto investments, that’s down from 47 percent just a few months ago.
The Trends Journal has been alerting readers to opportunities and features of altcoins and innovations like DeFi in many articles, including:
- “BEYOND BITCOIN: OTHER CRYPTOS MIGHT BE FUN IN ‘21” (16 Mar 2021)
- “CRYPTOS: DOWN BUT NOT OUT” (25 May 2021)
- “A DEFI PRIMER” (27 Jul, 2021)
- “GOING LONG ON BLOCKCHAIN TECHNOLOGY” (17 Aug 2021)
- “SOLANA TRENDING AFTER CROSS ETHEREUM UPGRADE FEATURES” (17 Aug 2021)
BITCOIN RECORDS MILESTONE. In October 2019 Bitcoin recorded its 600 thousandth written block. It’s price at the time was eight thousand dollars.
Flash forward. Bitcoin has now reached the 700 thousand block mark, with a price currently trading in the mid 40 thousand range.
As the pace of written database blocks show, the use of the Bitcoin network is continuing to grow, and observers marking the milestone expressed optimism at the increasing adoption of the crypto.
Some on Twitter in celebrating the milestone, posted a memorable quote from the late computer scientist Hal Finney. Finney holds a place in history for being the recipient of the first bitcoin transaction from bitcoin’s creator Satoshi Nakamoto. He once observed the resilience of the world’s first proven cryptocurrency:
“Every day that goes by and #Bitcoin hasn’t collapsed due to legal or technical problems, that brings new information to the market. It increases the chance of #Bitcoin’s eventual success and justifies a higher price.”
Others noted that close to 90 percent of all Bitcoin that can ever be mined has now been produced. Though the very last bitcoins probably won’t be mined until 2140, the vast majority of the crypto will be created by 2025.
Bitcoin production will dramatically decrease due to it’s code design, which includes an implementation of “halving.”
Bitcoin halving refers to the gradual release of bitcoins into circulation over time. Halving is designed to reduce the amount of bitcoin generated with each block by half, every four years.
From 2009 until 2012, each 10-minute block yielded 50 bitcoins. From 2012 until 2016, each 10-minute block yielded 25 bitcoins.
Halving was designed to maintain a constant and exact level of bitcoin inflation and depreciation.
Though mining will produce dramatically less bitcoin in coming years, network node operators will still receive fractional bitcoin compensation for verifying transactions.