2nd September 2021 > > MATIC.

tl;dr

Coinbase's adoption of MATIC could be an interesting development.

Market Snap

Market Wrap

This is nice – we look to be gearing up for another assault on $50k. One of these days, BTC will go through that very important psychological level for the very last time. We won’t know that of course, until months or years down the line, but it is an inevitability.

Occasional Series – China

One of the state supported media outlets (is there any other kind?) has stated that the genocidal rulers of China (is there any other kind?) have promised to “cut out the tumours” of capitalism and return to socialism.

Putting aside the fact that I absolutely know that the process of cutting out tumours has nothing to do with one’s political philosophy, I also know that the billions of people who will suffer from this decision matter not one jot to Xi and his billionaire cronies.

Curious Cryptos’ Commentary – BTC price prediction

Shall we have a bullish one for a change?

Analyst and co-founder of Northstar & Badcharts – Kevin Wadsworth - predicts a $100k price towards the end of this year, and $1mm around 2025 (go Kevin!)

He claims that his firm’s analysis has a 90-95% success rate. Nice if true (*).

Unfortunately, it is hard to give much credence to this prediction, based as it is on technical analysis. Kevin gives the game away when he says that the $100k target will not be achieved if BTC does not go above $51k.

Well Kevin, that is one of the basic laws of maths last time I checked.

Putting my natural scepticism aside, I won’t grumble when Kevin turns out to be spot on about $100k this year.

Curious Cryptos’ Commentary – Layer 2 scaling solutions

One of the very frequent criticisms of cryptos is the restrictions placed upon the amount of data that can be processed. As a demonstration in very stark terms just compare transactions per second (TPS) of BTC at 3-7 TPS with Visa at 20,000 TPS.

This is a critical problem which manifests itself in both slow processing times and high fees per transaction. A spike in activity on the Ethereum blockchain caused by DeFi, or the latest NFT, has sometimes resulted in transaction costs of several hundred dollars.

This is clearly not a sustainable situation. The Ethereum foundation is attempting to rectify it with the move to ETH 2.0 incorporating sharding and proof-of-stake consensus. We have discussed these issues on several occasions, but back copies of the CCC are always available on demand, if you were somewhat negligent and failed to read my missive on those days.

It is unlikely we will see ETH 2.0 before the back end of next year. Meanwhile there are multiple attempts to build what are known as Layer 2 solutions to address these problems without compromising the core concept of decentralisation.

In essence, Layer 2 solutions take data from the underlying blockchain, usually ETH but also BTC, to process transactions off-that-chain onto-another-chain, usually in the form of smart contracts. These smart contracts often utilise the concepts in zero knowledge proofs (ZKP).

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ZKP itself is a fascinating idea based upon the concept that one party can prove they know a value x without revealing anything other than that they know what x is.

That is just weird right?

If you want to know more (and I do think you should, but it is your life), three examples are discussed here:

https://en.wikipedia.org/wiki/Zero-knowledge_proof

Forget the maths at the end. It is just too complicated for mere mortals like us.

However, if you really want to dig further into the technical stuff, I do admire your persistence.

In that case, here to help is our very own Curious Cryptos’ Head of Data Analytics and Coding, Ms. Robin Timmis, who will be able to take you through those equations step by (very difficult) step.

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Until now, most Layer 2 solutions have remained on the side-lines, waiting for mass adoption. That might be about to change.

Coinbase have announced plans to integrate Polygon, powered by its native token MATIC, into their exchange platform, increasing the speed of deposits and withdrawals, and reducing the costs of doing so. If successful all other exchanges will be forced to follow suit.

This global development can only be positive for the price of MATIC which has already rallied from thrupence at the end of January 2021 to as much as £1.89 on May 18th. Having since retraced to just under a quid right now, more announcements like this could prove to be very interesting (NOT investment advice).

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(*) If true, why sell your incredibly accurate predictive abilities? Just trade it yourself in size I say.