🌴⛓ Chainletter - National Level BTC Adoption & the Harvard Conference
🌴⛓ Chainletter
Our weekly newsletter covers Chainforest - a recap of our latest happenings, our members’ accomplishments, the conversations in our Discord, and an in-depth dive on a project or issue our community is focused on.
Chainforest is always searching for passionate, inquisitive individuals to welcome into the fold. Don’t hesitate to apply here.
Further, we are looking for writers to extend our newsletter and media branch. If that’s you, DM us on Twitter @chainforest_DAO.
TLDR;
A discussion in the Bitcoin channel sparked debate about the future price of BTC, why countries use Bitcoin instead of other cryptocurrencies, and the classic gold vs. BTC debate.
Soul-bound NFTs promise a new use case for NFTs, storing personal data on the blockchain, but are they compromising on privacy?
The Chainforest community grew stronger with two IRL events happening on opposite sides of the country.
In the past week, 16 new Rainmakers have joined the forest.
The top three channels were: 🎙│general, 🎨│nfts-general, and 🌎│terra.
Are Soulbound NFTs a Compromise on Privacy?
By Elijah Keaton @bigshot_Bigsby
Recently Vitalik Buterin has proposed the idea of Soul-bound NFTs in his post found here. Soul-bound NFTs, modeled after the World of Warcraft feature, prevents an item from being traded or sold to another user. Essentially, this proves that the owner of the NFT has accomplished a task, or created that information, not purchased it off an open market.
Vitalik mentions that POAPs would be more useful as Soul-bound NFTs, since it would prove that you actually attended said event. Other uses of Soul-bound NFTs could be personal information, as pointed out by Amit:
I see a lot of use cases for holding vital information about a person - your academic transcript, healthcare records, etc.
However, Rainmaker Autologic disagrees with having information like this on-chain and could be accomplished with on-chain history:
“In our view many of those things shouldn’t really be on chain things in the first place (eg. medical records etc.), second of all, it can be handled entirely on the display side of the fence (eg. if someone transfers the diploma NFT to another wallet they can’t attest to owning, its displayed with FRAUD in big red letters overlaid). You don’t need this added complexity of non transferability. On chain history is proof enough.
Expanding on that point, Autologic mentions that ETH, SOL, BTC are all surveillance chains and smart analysis could infer who a certain person is based off when they switch providers, what illnesses they have, etc. Bad players in crypto could easily use this information to run scams, hack you, etc.
Ultimately it comes down to privacy. Our phones listen to everything we say and have the ability to send us targeted ads that are pretty damn effective (from personal experience). Do we really want to give our medical information, identification numbers, and other private data to a blockchain that can be viewed by anyone with a computer?
Why are Countries Adopting Bitcoin?
By Elijah Keaton @bigshot_Bigsby
Conversation in the Bitcoin channel sparked after Amit posted the following illustration predicting the future price of BTC:
Predicting a $1.3 million dollar price point by the year 2030, Chainforest member Eric - @epochso broke down his method for calculating Bitcoin’s total addressable market:
The way I look at BTC’s TAM is some multiple of non-jewelry gold + some percentage of non-gold central bank reserve assets.
For reference:
1x non-jewelry gold = 205238 above ground tonnes * 32150.7 troy ounces per tonne * 54% that is non-jewelry * 1924 current price per ounce = ~6.8 trillion or 326k per fully diluted BTC.
Contrasting the $1.3 million dollar price point, Eric’s method predicts a $326K per BTC total addressable market. This formula factors in Bitcoin’s utility as a store of value, but as Bryan - @bryan_linton brings up, what about the value from businesses adding BTC to their balance sheet, or countries adopting BTC as their national currency?
In my opinion the news that Honduras is expected to declare Bitcoin legal tender in the country is one reason predicting the price of Bitcoin is extremely hard to predict. It feels like a game of tug-of-war between the traditional USD dominated fiat system and the emerging technology of Bitcoin. Set BTC free without the regulatory bodies of major governments and the technology would likely flourish. However, so much of the United States’ world power comes from having USD as the world’s reserve currency. China and Russia fear that cryptocurrency would enable capital outflow and economic freedom from its citizens. Naturally, major world powers have incentive to prevent the growth of cryptocurrency, especially Bitcoin.
But why would countries adopt Bitcoin?
In the case of El Salvador one thing to consider is that they were already a dollarized economy and thus had no control over their currency so having no control over Bitcoin is not necessarily a downside. It’s just replacing a foreign authority with no authority at all.
As for why Bitcoin and not other currencies, it has the widest network, deepest liquidity and longest history of operation” - Knifefight
The theme here is that countries don’t want to be reliant on the US dollar, and Bitcoin has several advantages that gold does not have. One such advantage is speed. While not typically thought of for its transaction speed, Knifefight mentions that Bitcoin is a settlement layer, and therefore evaluation of speed should be placed on finality, not payment speed. A credit card payment may be instant, but those payments can be reversed weeks into the future, a BTC transaction is final after approximately ten minutes.
Bitcoin is also unpredictable, something emphasized by both Eric and Knifefight. This is not an attractive quality for a currency. A currency should be stable, to prevent wild gains and losses while holding the currency. This is why the US dollar has been so successful. However, connecting back to recent events, the US dollar has lost some of its stability, with the US showing their ability to declare nations’ reserves held in the US dollar worthless (Russia lost over $600 million over sanctions). Couple that with the highest inflation seen in years and the US dollar is not the reliable currency it once was.
Where does that leave Bitcoin and its future price? It’s tough to say, Bitcoin could become many countries’ national currency, be on the balance sheets of most fortune 500 countries, and used as a medium of exchange by millions. In this case a $1 million dollar/BTC price point seems more than reasonable. On the other hand, if world powers do everything they can to shoot down crypto growth, we could see a relatively modest price increase between now and 2030.
For those interested in reading the full conversation, it can be found starting
Around the Fire: Community Updates
There was no community meeting this week, however a couple of IRL events happened this week to help grow the Chainforest community:
At the Harvard Blockchain conference, over 20 Chainforest members met. Amit also represented Chainforest on a panel.
At the Game Developer’s Conference in San Francisco, ten Chainforest members met for dinner prior to heading to events hosted by Axie Infinity and FTX/Solana.
The Chainletter is written to promote the projects and discussions within this community. Do you have a topic or a project you find interesting? Reach out to David (David C R Feld#4743) or Elijah (Ric_Astley (∞)#4612) on Discord.
In order to unsubscribe, click here.
If you were forwarded this newsletter and you like it, you can subscribe here.
Created with Revue by Twitter.