Bitcoin’s Sunset Grin’s Sunrise
Under the heading of Evolution of Money, this article will show you the secret information you have never heard of in the background of State currencies, Bitcoin and Grin coin’s monetary policies, and give you radical possibilities of what might happen in the future.
“The river digs itself “ Omer Asım Aksoy
Evolution of Money
Ever since the first day of civilization, people have always been inclined to give something when they get something, in accordance with the principle of reciprocity. Although the needs of this principle has been met with very simple tools in the past, today’s technology and knowledge have led us to use “money” which is an easier method.
The concept of money in general is formed by the nominal currencies of states, further expanded by the structure of legally affiliated banks and credit card institutions and it has evolved to Bitcoin and Crypto coins, which are opposite to the nominal money of states.
The state money we use in almost every area of our lives and all of the banks. Credit card institutions that are connected to them become a tool that we can use in every trade with legal regulations. At first glance, it is a very good way for people to trade easily, some of the features they have on these coins are one of the biggest reasons of the economic ruin that we have today.
This system has major disadvantages, mainly due to the unrestricted and uncertain emission of monetary policies in government currencies and the fact that it has the so-called interest system that enslaves human beings. Another issue is that the state money is quite central, which mean that it seemingly gives confidence to people who has the idea of MMT, but in fact it is not so.
This is because ;as a result of this powerful central structure, people do not own state money, they are only their users. Let me explain this to you with 2 examples.
1. Since Greece has been unable to repay its imf debt for a long time, it sometimes prevents its citizens from withdrawing their money in banks.
2. The United States established a fixed gold rate with a law that lasted from April 5, 1933 to 1975, forcing its citizens to sell their gold to the state and selling the gold they bought cheaply for a higher price and earning unjust profits.
As can be seen, even two real examples show that the strong central structure in state money, people are not the owners of the state money but only their users. Therefore, it is important to note that the similarities of these two situations may always occur in other countries, and it is necessary to know that the citizens of that country, at the time of their occurrence, have no other choice but to accept it. Today to a stranger, tomorrow to a friend or relative, then to you.
Satoshi Nakamoto, the inventor of Bitcoin, quite dissatisfied with the features of the nominal currencies of the central structures we have shown above, created Bitcoin to change the concept of money in the world.
When we check Satoshi Nakamoto’s profile on the p2p foundation site, we see that the date of birth is set to April 5, 1975.
Is this really Satoshi Nakamoto’s date of birth, or does it show us the history of the fixed gold rate law, in which America’s citizens are making unfair profits on their backs?
Detail; April 5, 1933, This is the beginning date of the law that American citizens are forced to sell their gold to the state at a low price. In 1975, the date the law was abolished. The date of Satoshi Nakamoto’s birth date includes April 5 and 1975, the date when this law began and when it ended. Therefore, with this information, it is not difficult to understand why Satoshi actually created Bitcoin.
Bitcoin’s Monetary Policy
After understanding Satoshi’s vision, when we look at Bitcoin’s monetary policy, we see that this vision is fully reflected in the monetary policy. In this monetary policy, the total supply (21 million units) and the specific emission (which will be cut in half every 4 years) are determined as the opposite of the state currencies. In addition, other features of this monetary policy are in contrast to the nominal money of the states. These features are:
- With Bitcoin, the interest system that enslaves people has completely disappeared.
- Nobody is capable of seizing anyone’s Bitcoin.
- Since the rules of monetary policy are clearly defined in advance, it is not possible to create injustice.
- Bitcoin has no central managers.
Because of all these features, Bitcoin has had a positive impact on most people, especially the cypherpunks who have discovered it since its inception. In this positive effect becomes Bitcoin’s price has increased by unpredictable dimensions, making it popular. However, the effect of one thing on this issue is much greater than the others. That is the limited supply and half of the monetary policy. Because;
- Limited supply encourages people to get a share of the total Bitcoin amount.
- Halving periods are the most important factors supporting price outflow.
These two brief information, with the psychological effect it creates on humans, create a great manipulation effect on the whole market and often encourage people to buy Bitcoin. For example;
- The total amount of Bitcoin is 21 million and now 17 million units are produced. It will exhausted after 4 million.
- If everyone buys 1 bitcoin, 21 million supplies will not be enough for the world population. So even a person with 1 Bitcoin can be rich.
- Halving is coming. Miners will raise prices. We need to get Bitcoin now.
You can see quite a lot of such discourses in the market because, as we said, the limited supply and halving of the monetary policy of Bitcoin encourages people to this psychological thinking.
Let’s see this information technically on the graph.
As shown in the graph, the price of Bitcoin increased in the near of the block award halving in 2012 and 2016. This is the proof that the psychological impact of the market is reflected in prices.
What we have described so far shows most things positive for Bitcoin. Now, however, we will share with you the details not seen by many.
Unnoticed Hazards in Bitcoin’s Monetary Policy
In fact, limited supply and halving emissions, although the more fair structure as opposed to state monetary policies, but there are two major gaps in this monetary policy.
- The first is that Bitcoin cannot be decentralized. Let us explain this to you with examples. We know that Bitcoin has a limited supply of 21 million. Have you ever thought about the possibility that a person or a community could have 11 million Bitcoins? Although we address Bitcoin as a decentralized crypto currency, it is necessary to know that, with its limited supply, a person will become a central owner of Bitcoin without ever doing anything after having 51% supply. For this reason, when we check the current wallets at Bitcoin, we see that an average of 2,000 people, except stock exchanges, account for nearly 38% of the total Bitcoin. We see that 57,5% of the total 16,500 people have shares. When we consider that the world population is 7.53 billion, we see that 38% of Bitcoin is in the hands of only 0.000000263% of the world population. We draw your attention, this is less than 1%, 3,800,280 times lower. We see that 57% of Bitcoin is in the hands only 0.00000219% of the world population. Again, we draw your attention that this rate is 456,600 times lower than 1%. You also need to know this. 99% of the world’s money is in the hands of 1%(link). Bitcoin is no different from that. In summary; The fact that more than half of Bitcoin today is in the hands of others at hundreds of thousands of times less than 1% of the society shows us the problem of decentralization in this monetary policy. Link; https://bitinfocharts.com/top-100-richest-bitcoin-addresses.html
- The second major deficit in this monetary policy is the 51% attack that will occur after the end of the limited supply, or after the block rewards have decreased considerably, as the network compensates itself for hashrate. Let us explain in detail.
The Bitcoin block awards has a structure that halves every 4 years as it appears on the left. And as this structure triggers the price outflow, there is a great danger that many people do not notice. Now it’s time for math.
When we check today’s data for Bitcoin, 12.5 bitcoin is released to the market every 10 minutes for now. This means that 1800 bitcoins are emerging per day. Mining power today is 80 million terra hashrate. With a small calculation, it currently mine 22.5 bitcoins per day at 1 million th/s. When we refer to the price of Bitcoin as $ 10,000, it is $ 225,000 in 1 day. Note; Of course, this is not net profit, electricity and equipment costs should be briefly stated.
When we take the year to 2032, the block rewards will drop to 0.78 bitcoins every 10 minutes. This means 112 bitcoins per day. The mining power will have increased at least 2–3 times in that period. Therefore, when we calculate the mining power as 200 million terra hashrate, 1 million th/s will mine 0.56 bitcoins per day. As such, Bitcoin’s price must be at least $ 400,000 in order to generate $ 225,000 in revenue. After 4 years, in 2036, the Bitcoin price must be $ 800,000 to earn the same income. In 2040 it also needed to be $ 1.6 million. Now let’s explain all this information in more detail. Bitcoin’s hashrate increased by 8 times, even in the 2018–2019 Bear period. As most people expect, assuming that in the future once again will be ATH (the highest price), the rate of hashrate calculated as 200 th/s by 2030 will be a very optimistic figure. But even that optimistic figure is enough to prepare for the end of Bitcoin. Because if the block rewards fal lor if the prices cannot rise to the huge numbers mentioned above or cannot hold after the increase, the probability of 51% attack will arise when the hashrate rate in the network starts to compensate itself. Because, people who bought dozens of devices to make money and mining pools that cannot afford server costs will be more likely to resort to this method with the higher hashrate they have with decreasing hashrate. And if this happens, that is, once Bitcoin is attacked with a 51% attack, it will likely stain his reputation and begin to lose serious investors forever.
In summary, we can conclude that;
This monetary policy, which triggers Bitcoin’s price increases and causes huge increases, has the potential to turn into a disadvantage for Bitcoin after a while and cause Bitcoin to disappear. This danger will increase with the 0-digit block rewards in the near 2030s, when Bitcoin’s block rewards will be reduced. One chance, even if we assume that the year 2030 has been passed, one day this may surely happen because block rewards will eventually drop to exact 0 and with the commissions from btc transfers, the network will not be able to maintain its hashrate.
Footnote; No open crypto currency, including Bitcoin, can no block 51% attacks at 100% ratio.,
Why Satoshi Chose This Monetary Policy
After this article, someone who thinks about Bitcoin’s future will first question how a clever person like Satoshi doesn’t think of all this.
- Firstly; When Satoshi Nakamoto released Bitcoin, he knew that there could be a 51% attack, and he made many statements on the whitepaper. One of the explanations summarizes the whole subject; “Bitcoin can be attacked at a rate of 51%, but the person who will do so must be aware that this action will destroy the price of Bitcoin. Therefore, the cost of the attack will cause worthless Bitcoins to remain in their hands and will be harmful.” Satoshi has called on everyone to earn fair money and he says that unfair money does not make any profit. But, when we look at the history of crypto coins, we know that many of them, including the popular ethereum classic, bitcoingold, zencash, monacoin, suffered 51% attacks. So perhaps, the only vulnerability in the system are using for abuse from people.
- Another issue is why Satoshi chose that monetary policy knowing in the future this policy could get a 51% attack from people. Satoshi was probably aware of that but It is necessary to know that Satoshi had to choose this monetary policy to increase Bitcoin’s price and therefore its popularity. Because it is not difficult to predict that if a structure that could create an ecosystem like Bitcoin from scratch alone had an unlimited supply at the beginning, it probably would not have reached its current position. If you remember the psychological effects that we have shown above, people who do not know Blockchain’s B, Bitcoin’s technological infrastructure, and T’s have made it so much in demand to Bitcoin and made it popular today.
In short, Satoshi has created Bitcoin from the very beginning, aware of what might happen in the future, and may be aware that this system cannot be a structure that will work forever. But he may still have created Bitcoin for this reasons because he wanted to place the idea of decentralization and freedom in people, he wanted to take a big step against the states, and he wanted to create an ecosystem like coinmarketcap. When we look at these goals, we see that all of them are realized.
As the author, “Ömer Asım Aksoy” said and as i commented; the river digs itself, but the pit it digs brings it back to the ground.
10 years after Bitcoin, Grin coin was created in a very different structure from all the crypto coins by the developer under the pseudonym Ignotus Peverell, as Satoshi Nakamoto was. With its unique network of blockchains and monetary policy, Grin became the second coin to receive support from the cypherpunks community, as experienced in Bitcoin.
In addition, it received a lot of support from the first Bitcoin miners in 2010, mining pools and programs, major stock exchanges in the industry (Binance, Poloniex), Litecoin founder Charlie Lee, and even Beam coin. Detail of 50+50 Btc Donation From Coinbase(click)
In 1534 crypto currencies in a short period of 7 months, it entered the top10 in github and became the 6th most followed by the developers.
So how did all this happen?
Grin coin technically, provided solutions from Bitcoin to all the issues it wanted to create but could not fully create. These are:
- By building Bitcoin’s purpose of being more advanced than random wallet addresses, it has created a completely confidential and secure structure and while building this confidentiality, it kept its scalability.
- It carried forward to scalability and fungibility that Bitcoin and many crypto currencies had in a different way (eliminating old transactions) rather than keeping the block sizes big or dividing the network with solutions like sharding, and created a scalable and lightweight blockchain network.
- And finally, Grin has taken the monetary policy of all crypto currencies one step further. This statement will be explained below in detail.
Grin’s Monetary Policy
We have stated that government money has unlimited supply and uncertain emissions. In Bitcoin, we also stated that, contrary to government money, it has limited supply and certain emissions. Unlike both, Grin has an unlimited supply and certain emission policy.
There are very important reasons why Grin chose this monetary policy. These;
- In this way, Grin has the most fair monetary policy ever made. Because it prevents an investor who owns 51% of Grin today to become a central owner of Grin forever. Thus, Grin has the title of being the rare crypto currency that can be referred to as decentralized crypto currency.
- Grin will not be in danger of being destroyed, as will happen with Bitcoin and many crypto currencies. Because miners have a constant emission rate, they will be affected from price ups and downs at the lowest rate compared to other crypto currencies. Thus, the 51% attack probability will be very low and they will have miners who will protect the Grin network forever.
- Grin will be the most universal currency. Because the emission is constant and forever, Grin can be obtained by everyone, not just whales.
Grin, with its blockchain infrastructure and the features of monetary policy, has a structure that is valuable enough to form its own ecosystem rather than being an altcoin, it could be one of the domino stone of the existing ecosystem.
Will Grin be Evaluated in the Future?
Grin’s blockchain features and monetary policy, although perfectly structured, are not interested in this small investor is just questioning the rise in price. In this case, with lack of halving and unlimited supply on Grin, little investors think that it won’t be valued. However, we know that this is not the case. Now let’s get this little investor technically informed.
Technical Perspective on Monetary Policy
The most important factor that increases the value of money is supply and demand. Because of its technological features and fairness, Grin will never lack demand. When it comes to the effect of supply on price, inflation and deflation are more likely to be determined than the total amount of money. As the inflation rate increases, the value of money decreases, on the contrary, as the deflation rate increases, the value of money increases. It’s a known rule. The main feature of Grin’s monetary policy is that inflation is decreasing day by day. So Grin has disinflation structure just like Bitcoin and Gold.
The money to be produced in Grin has a structure that will decrease continuously compared to the supply in the market. This will be enough reason to raise the price of Grin even if the demand remains the same. For example; first year will generate 31 million Grin, the second year will generate 31 million and it will be as it first year. Third year will generate 31 million but it will be %50 of total supply for first 2 year. Fourth year will generate 31 million but it will be %33 of total supply. What we want to show here, the effect of reducing the price of the new Grins to be produced will decrease over time and inflation will decrease with time. In short, with the unlimited supply of Grin, even if the emission rate remains constant, inflation is falling fairly and there is no reason to hinder the price increase.
When we look at the monetary inflation rate on a logorithmic scale, we see that Bitcoin is not at all similar to Gold, which it is so often compared to. Grin, on the other hand, has almost the same inflation rate as gold. This is one of Grin’s main goals in choosing this monetary policy. Because Bitcoin is a very volatility currency with its total supply and halving. However, when we look at gold, thanks to the inflation rate it has, it increased logoritmic in 12 years without much volatility in prices.
That’s exactly what Grin wants to do. It wants to show real demand value, less than volatilete.
Now let’s do a btc analysis on this year’s price chart.
After Grin started to publish its main network, inflation pressure began to fall back from 100% on an annual basis. First 6 month, the inflation pressure started to decrease by 100% to 50% on an annual basis and It fell at an angle of 52%(first blue arrow). After that reaction rise began. Then new decrease period started and the drop stiffness is almost halved. This time the angle decreased to 28%(second blue arrow). This means that as inflation pressure decreases, the price drop may decrease and the continuation of bullish period may follow after horizontal movement. Just like what happened with Gold.
Let’s compare it to Bitcoin. For the first 4 years, the emission rate of Grin is the same as for Bitcoin. After continuing four years, Bitcoin’s emissions are halved. The difference in the emission rate between Grin’s constant emissions for 8 years and Bitcoin, which has halved in the 4th year, is only 33% for the first 8 years. This difference is also quite low for Grin to affect the price increase.
Although it seems impossible for the small investor, Grin can do it so with all the features it has, all it needs is some time. As inflation pressure declines, high price increase may be inevitable.
Bitcoin’s 0.block was created on January 3, 2009 and waited for first block for 6 days. The first block was created on January 9, 2009. Satoshi did this in reference to the world being created in six days. Grin was created on January 15, 2019. 10 years and 6 days later from Bitcoin. Maybe the second main blockchain structure was created with Grin.
Also, if you are wondering who the founder of Grin, Ignotus Peverell, you can browse these two contents.
Also you can watch Grin’s development process. Know that it’s hard to watch, and imagine it being done.