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๐Ÿ“ˆ Altseason, when? | 13-02-2021

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cryptospa
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Hello, dear members of LeoFinance!

So, today => no charts! No TA! Just a short explanation of my view on the market. (To be honest, I don't like to write a lot, I have a mathematical mindset, for me is easier to work with numbers, data, do programming, etc.)

Ok, let me share my point of view on the potential Altseason.

So, let me start with the price chart of Bitcoin Cash (BCH). (ok, I know some people don't like BCH, but, in the financial world, people are successful if are objective, unbiased - this is my point of view based on personal observations). So, this is the current daily chart of BCH/USD: As can be seen from the chat Bitcoin Cash is trying to surpass the previous local high that took place in January (at the level of approximately $650). So, from a technical point of view, BCH/USD is trying to break through the resistance of the previous local high and start to increase in price.

Now, let's have a look at the fundamentals ... You know? Actually, I started to work as a fundamental analyst in 2006 for a hedge fund investing in stocks, bonds, and REITs. So, I have always been a fundamental analyst. But, of course, I also learned technical analysis theories, candlestick analysis, and so on. In the last 7 years, I started to apply more TA in front of the audience (but behind the scenes, I am a fundamentalist, hehehe). I worked with many clients in the hedge fund, and later in an FX brokerage company. So I have realized that most people don't like long explanations, logical reasoning, etc. They prefer to see 'One/two charts with some strange indicators (oscillators, MAs, and so on; ) and a few words about them'. That's why I've been a kind of TA analysis. Just, because most people prefer to see TA. If I write a long post including fundamental analysis then nobody is going to read it. Anyway! Back to Bitcoin Cash. So, in the last few days, the number of daily transactions on the blockchain of Bitcoin Cash has surpassed the number of transactions on the blockchain of Bitcoin: Source: BitInfoCharts.com

So, most of us, who are on LeoFinance are familiar with all those cryptos, and blockchain and know what is going on... Just, the Scalability issue of Bitcoin. With the block size of 1MB Bitcoin handles on average 5-7 transactions a second or 350'000-400'000 transactions a day. (Even with the SegWit it is up to 500'000). That's almost nothing! PayPal handles 200-250 tx per second, VISA handles 4000 tx per second and has a capacity of 50K per second. So, the old bad unsolved problem of Bitcoin, which Bitcoin faced back in the second half of 2016 and many times before. For example, in 2010, in 2013 . All these periods were accompanied by the invention/ appearance of Altcoins and a subsequent Altseson. Even Litecoin was a child of the scalability issue of Bitcoin. Nice Altcoin! Nice crypto!

So, let's get back, if the scalability of Bitcoin is not solved we all know what this means for the users - high transaction fees, congestions (Mempool size). Awful experience. You know ... in January I conducted a few BTC transactions. Man, 10$-15$ per transaction. That's too much! Now it is even higher: Source: Blockchain.com

Ok, let me tell you about the last transaction I did (also in January) - it was even worse. I paid high tx fees and on top of this, my transaction waited for 2-3 hours in the Mempol. Awful! Just an Awful experience.

This is how the Mempool size looks like now: Source: Blockchain.com

Yeah, we are still not there, where it was in 2017 during the hype. However, I remember very well back in 2017 we (I and my colleagues in the FX/Crypto brokerage company) were trying to make transactions, but we had to wait sometimes for 2-3 days. Very unpleasant experience! Those days Bitcoin was dancing like crazy between $20K - $12K and our money was stuck in the Mempoll ... No thank you! I don't need this anymore.

So, the situation now is on the way to reach something similar, in the near future (probably later this year, could be sooner, could be later => follow the charts and be updated). No doubt, that more and more people will come to cryptocurrency this year. Sooner or later the average people will start to buy crypto ... and then we will have a lot of congestions on the blockchain of Bitcoin. And nobody is going to like it. Yeah, nowadays, the big guys are buying (Tesla, Microstrategy, etc.). But they just buy and then hodl. They don't transact with their Bitcoins. That's why we still don't have a huge problem. There is a solid influx of money pumping the market (it is going to continue since more institutional investors are entering the market), but they don't transact with their crypto. Actually, they don't use it. But, once, the average people start to buy bitcoin with their fiat salary we will stumble upon a situation similar to the one in 2017. And nobody is going to like it ...

That's why the number of transactions on the blockchain of Bitcoin Cash is starting to grow now. BCH has the same PoW protocol, same SHA256, but with a higher block size than Bitcoin. Theoretically and practically a kind of solution to the scalability issue of Bitcoin. The same Bitcoin but works better than BTC: cheaper transactions, no congestions. Also, Bitcoin Satoshi Vision - the same Bitcoin but with almost limitless block size. Practically, the Bitcoin that used to be in its early days. So, BSV is also a kind of solution to the scalability issue of Bitcoin.

  • About the block size controversy (an issue since 2010) you can find out more here. It's been a hot discussion since 2010 in which participated Satoshi Nakamoto, Hall Finey, and many more after that. Just a never-ending story!

So, Bitcoin is going to face this problem sooner or later. We are the beginning of this problem. That's why some altcoins are starting to increase. These are the ones providing, or, to be more precise, trying to provide an alternative solution to the scalability issue of Bitcoin. For example, IOTA. Why IOTA? Yeah, let me tell you. It is developed by people who were part of the Bitcoin community back then but 'forked' from the Bitcoin community because they said Bitcoin cannot scale, and they developed IOTA. Just research it. I don't want to write a book (a long post).

Look, also what is going on out there? Ethereum has faced the same problem - high transaction fees, congestions ... Nobody likes it. That's why the alternatives to Ethereum have started to increase a lot recently: ADA, Polkadot, Binance Coin, Avalanche, etc. They are benefiting from the scalability problem of Ethereum, hence their prices are pumping.

Yeah, Ethereum is working on solving its scalability by smoothly transitioning to PoS ... but it is a slow process and to some extent with an unclear outcome. However, at least they are working on it. How about Bitcoin? What kind of a solution they have? The Bitcoin maximalists have solutions like these: 'Bitcoin is a store of value, it does not need to scale, let the tx fee increase ...' Do you like this solution? It is up to you. To be honest, I don't like it. From an economic point of view, this is even ridiculous. The next one: "The Lightning Network". Hmm, to be honest, when I was a kind of Bitcoin maximalists back then I did believe that it may turn out to be the solution ... Actually, that has been an idea to have a side-chain for the scalability of Bitcoin since 2010 up until now ... But, if we make transactions with Bitcoin on a side-chain ... why do we need Bitcoin? We can use anything ... Also, why should we use the LN for Bitcoin? We can just wrap Bitcoin everywhere nowadays, on Ethereum, on Binance, on HIVE as well, etc., and transact with it. That's why, in my view, => there is no need for the LN.

So, what I want to say is that Bitcoin, right now, entering a period when many people are starting to join the crypto world, sooner or later, the scalability problem will start to intensify. The Bitcoin community has no solution on the table ... That's why the beginning of the solid Altseason is just a matter of time ... Follow the charts illustrating the fundamentals of Bitcoin and you will find out when the solid Altseason will start.

Now, about me. Let me tell you what my approach is: Diversification. I just have an objective approach. I don't know who will solve the scalability issue of Bitcoin: Bitcoin itself, or Bitcoin Cash, or Bitcoin Satoshi Vision, or another cryptocurrency. That's why I am diversifying! I will continue to eat popcorn, follow all those communities with different maximalists, and analyze the market on a regular basis to be able to react if necessary. And, also, I am not against this rivalry among the different crypto communities. I find it even as a healthy competition that affects positively the development of the crypto world. Let me remind one old saying: FIGHT NOT WITH GUNS BUT WITH THE MIND.. So the most beautiful minds from all over the world are 'fighting' in the crypto area in a peaceful and intelligent way. NO GUNS! === the way in which the centralized financial world fights.

Ah, in addition, I will continue to write posts for LeoFinance and enjoy the HIVE blockchain!

So, LeoFinance ON! HIVE to the Moon!

To be continued ...

A few words about me:

Just to let you know: I've been working professionally as a currency analyst for the last 14,5 years, and as a cryptocurrency analyst for the last 3,5 years.

Important!

Keep in mind, that thoughts expressed here are my own, and they should not be regarded as recommendations for any cryptocurrency/commodity trades, investments and etc.

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