Since its inception, Bitcoin has experienced incredible growth, soaring from a few dollars to tens of thousands of dollars 🚀. This explosive growth has made Bitcoin a high-profile digital asset💰.
How much BTC and ETH can you afford now?
Compared with traditional stored-value assets such as gold 🪙 and silver ⚪, Bitcoin exhibits different characteristics. Bitcoin’s price volatility is higher and the return on investment is more significant 📈.
But this high return comes with high risk ⚠️.
Bitcoin, Gold and Silver: The Best Asset Allocation for Everyman
The Bitcoin market is affected by a variety of factors, including global economic conditions 🌍, policies and regulations 📜, technological innovation 💡, and market demand and sentiment 📊.
As traditional store-of-value assets, gold and silver still play an important role in investment portfolios, although their growth rate is slower than that of Bitcoin.
As a safe-haven asset, gold performs well during times of market turmoil and rising inflation expectations🏦. Silver has more industrial uses🏭, and its price is affected by supply and demand factors and economic activity💼.
But in the future, Bitcoin and Ethereum may not have much to do with most ordinary people. This is because of the following four reasons, which I will explain and hope to bring you some inspiration.
More than ten years ago, almost no one could have predicted that a document of only 9 pages and a piece of software with a size of only 14MB could trigger such a huge change. The creation process of Bitcoin is like a mythical get-rich-quick story in the eyes of many people, and some people still can’t believe it, but it all really happened.
Today, Bitcoin has grown from an unknown virtual asset to one of the important forces in the global financial field, which is daunting.
Looking to the future, most ordinary people may become increasingly distant from Bitcoin and Ethereum.
It can be said that there are not many opportunities to get on the bus. As Michael Saylor, a well-known figure in the cryptocurrency world mentioned earlier, said: everyone should hold at least 0.1 Bitcoin.
01
In the next step, the number of large institutions holding chips will continue to increase, and the supply and demand relationship will become tense in the future.
We can see that among the known Bitcoin whales, in addition to the encryption industry, there are already many traditional financial giants. Despite the bear market cycle of crypto assets, traditional financial giants are still resolute in their deployment. In recent years, BlackRock, Fidelity, Invesco and other institutions have submitted Bitcoin and Ethereum spot trading fund (ETF) applications to the U.S. Securities and Exchange Commission (SEC). The scale of these applications exceeds trillions of dollars. Crypto-assets such as Bitcoin and Ethereum have grown into "alternative assets" that global investors cannot ignore. It is an integral part of their global diversified asset allocation strategy.
Of course, the application for crypto asset spot ETFs in the U.S. stock market has also attracted the attention of the crypto industry, and it is also of great significance to the crypto market.
More and more institutions, such as listed companies, private companies, and asset management giants, are entering the market to hold chips. In short, the interest in crypto-assets from the large clients who provide funds behind them has only increased. However, the total amount of Bitcoin is limited, and the supply of Ethereum has entered a deflationary stage. The future supply and demand relationship is clear at a glance.
The rules are changing, and the right to speak in the market will gradually shift to the hands of giant whales. When giant whales are fighting in the market, the existence of ordinary people becomes increasingly small.
02
随着未来Web3的大规模采用，细额支付、游戏、元宇宙、社交等高频场景可能导致比特币和以太坊主链面临拥堵。过去，普通用户在细额交易、社交互动、游戏等活动中所需支付的链上手续费已经相当昂贵。
At the same time, more and more upper-layer public chains such as Layer2, Layer3, and Layer4 will appear in the future, and fierce competition will begin among them. Ordinary users' daily interactions or most on-chain operations may only be achieved by entering lower-cost and relatively secure Layer 2 and higher layers. Finally, these upper-layer public chains or some large-scale Web3 applications will perform expensive settlements on the Bitcoin and Ethereum mainnets in a batch packaging manner, thereby indirectly sharing the cost of on-chain for ordinary people.
Of course, Layer 2 and Web 3 applications may not necessarily charge Bitcoin and Ethereum native assets as handling fees. They can charge their own tokens or USDT, or even directly accept legal tender to provide services to ordinary users. Therefore, ordinary users do not necessarily need to hold Bitcoin and Ethereum, nor do they need to bear the risk of price fluctuations.
03
公链节点门槛不断提高。
The computing power of the entire Bitcoin network continues to hit new highs, leading to an increasingly high threshold for becoming a block producer. Bitcoin mining has triggered a chip technology war, and competition in computing power has also promoted the development of chip technology to a certain extent.
In addition, energy is also one of the resources with fierce competition. Bitcoin’s energy consumption is already equivalent to the energy consumption of some countries. On the Ethereum side, despite converting the consensus mechanism to a PoS (Proof of Stake) mechanism with lower energy consumption, the threshold for nodes has not actually been lowered.
以太坊开发者讨论了将验证者抵押上限调整为2048ETH的提议，主要原因如下：
1）验证者规模的膨胀对以太坊网络产生了负面影响，尤其是在最终性方面的效率。
2）降低大型节点运营商的负担，如Lido、Coinbase等需要同时管理数万个节点。
To put it simply, Ethereum's PoS validators can reduce costs by increasing the amount of collateral. If the validators with low mortgage amounts have low input and output, they will work hard to increase the amount of collateral, thus raising the threshold.
Unlike Bitcoin, which continues to raise the threshold by indirectly increasing computing power and updating chips, Ethereum's PoS verifiers also increase the threshold by directly increasing the amount of funds invested, making it difficult for ordinary people to obtain a complete rate of return.
04
For most ordinary people, crypto wallets with high operating thresholds are not necessary for mass adoption in the Web3 era.
In order to solve the problem of user threshold, the encryption community has proposed the concept of account abstraction in recent years. In the future, Web3 and Metaverse applications will directly contact users. These applications can simplify complex operations such as chaining and interaction through application protocols and encryption algorithms, and can be completed by Web3 applications with one click.
At the same time, encryption technology is used to protect users’ assets, private data and other rights from infringement. In this way, most ordinary people do not even need to understand the underlying blockchain technology, they only need to know that the service is guaranteed.
05
To sum up, with the entry of more and more giants, the rules of the game in the encryption market are changing.
Public chains with huge ecosystems such as Bitcoin and Ethereum have increasingly higher barriers to participation. In addition to the node costs mentioned above, the cost of using the chain is also increasing. It is also very difficult for developers to compete in ecological projects. .
As the large-scale underlying public infrastructure of Web3, major native encrypted assets such as Bitcoin and Ethereum will also be competed by the "rich" like special resources such as gold and oil, and may be out of reach for most ordinary people. #BTC🔥🔥
