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2022 Prediction #1: L1 Scalability

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I start this series just to express my opinions about what crypto may evolve in 2022. Maybe it will not but my hope is they can do better.

With more and more users joining the crypto universe, scalability is a challenge for Layer 1 platforms such as Ethereum and many others. Scalability was a problem that had been identified in 2015. However, blockchain technology was not able to resolve and the issue has been persistent on many platforms.

TL;DR

There is no single solution to the scalability problem in blockchain technology. 2022 will be another year of continually seeking and researching the optimal solutions for future blockchain usage.

Here is a 1 min summary of the article if you want to skip the reading.

Why Scalability

Blockchain provides an ecosystem for users to interact. Unlike the Internet of Things (IoT) in which users share their data with each other, blockchain provides an additional layer of verification for each data to be validated and broadcast to the public. Scalability in blockchain then becomes more costly and slow processes.

Challenge of Scalability

Cost is one of the challenges each blockchain will be faced. To be able to validate each block of information, you require either more validators to work in a more efficient way (or input more energy) so that each data can be processed. The more data to be processed, the costly each validation process and the longer time it will take to process each data.

Solutions of Scalability

One of the currently existing solutions is the Proof of Stake consensus algorithm. With additional two features, Tower BFT (Byzantine Fault Tolerant consensus) and Proof of History from Solana, the blockchain resolves scalability issues temporarily. Both features are technology to determine honest members or nodes in a short time and dedicate them to process validation, a guaranteed way to agree on the timing and order of a set of transactions. Such a consensus algorithm is also being used in Hedera, a project that completely opposes Proof of Work. However, Solana has sacrificed its decentralization feature to reach scalability optimization.

Blockchain Trilemma

There is a trilemma on the blockchain that will continue debating along with the progress of the development. Scalability, security, and decentralization. One can not be solely optimized without sacrificing the other two. 

If you sacrifice decentralization to become centralization, then you have scalability and security. Think about credit companies like Visa who control all user’s data as securely as possible and transact payment at lightning speed.

If you sacrifice scalability, you have security and decentralization like Bitcoin. Bitcoin is the most secure cryptocurrency and it is decentralized with many participants working together to improve. But when Bitcoin starts to pursue scalability through Lightning Network, it has to sacrifice its security and only broadcast output of the final transaction while keeping all other intermediate transactions in the black box. It is prone to have security issues during intermediate transactions that no one may be able to discover until later.

If you sacrifice security, then you get scalability and decentralization like Defi projects Uniswap. Then your bank account is open to every hacker to try to test their ability to breach into and eventually lose millions of dollars investors contribute.

Check out my other article: Airdrop?! Not So Lucky Anymore!

2022 Is Scalability Testing Year

Scalability is an ongoing problem in blockchain and many researchers will continue working on it. Ethereum is slowly phasing out Proof of Work into Proof of Stake and many layer 1 solutions that resolve scalability problems have already been implemented by Proof Stake such as Solana. There will be a better way to resolve scalability issues. However, we shall see how others play out.

In Conclusion

Scalability is a problem but it is also an opportunity to introduce better layer 1 solutions. Every competition can help another platform to evolve and become a better version of the cryptocurrency for everyone to participate in.

Stay tuned for the 2022 Prediction #2: L2 Bridges


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The Federal Reserve Is Expected to Implement Tactics That Could Help BTC

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The Federal Reserve Is Expected to Implement Tactics That Could Help BTC


The price of bitcoin has shot up in recent weeks and is now trading for over $17K. There is high anticipation that another bull run could be heading our way given that Jerome Powell – the head of the Federal Reserve – is slated to make a speech in the coming days about what the agency’s plans for inflation are.

Could the Federal Reserve Aid BTC for Once?

It is believed that Powell will announce soft inflation tactics, meaning his organization will be able to incorporate methods of fighting further price hikes without running the economy any more than they already have. If this happens, bitcoin could well be on its way to another high point. Danni Hewson – financial analyst at broker AJ Bell – explained in a statement:

The latest U.S. jobs data had something of a ‘Goldilocks’ quality about it, with jobs growth robust enough to hint that the miraculous ‘soft landing’ might still be a possibility for the U.S. economy, while still delivering a slowdown in wage growth which should placate a twitchy Fed.

The Federal Reserve has long been at the center of bitcoin’s ongoing (and horrendous) plight. The currency has been falling into oblivion for about 12 months, the main reason being that the Federal Reserve has been adamant about ongoing rate hikes. These hikes are put in place as a means of fighting inflation, but the fact remains that they haven’t done much when it comes to curbing the prices of food items and gasoline.

By contrast, all they’ve really done is make it so that nobody can afford a car or a house. In addition, crypto prices have been beaten to a bloody pulp and are only starting to show signs of coming back.

Some are not so sure that the Federal Reserve will be able to make such a move just yet. In December, a report emerged showing that job growth had significantly slowed down during the final months of 2022, more proof that the economy was still in an unstable position.

However, Richard Carter – head of fixed interest research at Quilter Cheviot – commented that it was, by contrast, a testament to how far things have come. He stated that despite jobs dying in recent weeks, the country is in a relatively stable position. He commented:

The latest U.S. jobs data is another reminder that the world’s largest economy remains largely intact despite what inflation did in 2022. Attention now turns back to the inflation data to get a better steer on how long the Fed’s hawkish behavior will last.

Soft Tactics May Be Arriving

Susannah Streeter – senior investment and markets analyst at Hargreaves Lansdown – further explained:

Expectations have risen that aggressive moves by the Federal Reserve are finally bruising the resilient labor market and wounding a wage spiral.

Tags: bitcoin, federal reserve, Inflation



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Binance Coin Reaches Bullish Exhaustion and Faces Rejection at $320

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Binance Coin Reaches Bullish Exhaustion and Faces Rejection at $320


Jan 30, 2023 at 16:30 // Price

The price of Binance Coin (BNB) has been moving in the zone of uptrend since the beginning of the rise on January 14. After reaching a high of $314, the cryptocurrency’s price started to fluctuate below the barrier again.

Binance Coin price long term forecast: bullish


The digital asset is currently in a downtrend after retesting the $320 barrier. However, the uptrend will resume if the recent retracement remains above the 21-day line SMA. If BNB breaks above the $320 resistance, it will continue to rise and retest the overhead resistance at $359. On the other hand, if BNB falls below the moving average lines, it will return to its previous low at $249. At the time of writing, the altcoin is currently trading at $307.90.


Binance Coin indicator display


BNB is declining and is currently at level 59 on the Relative Strength Index for period 14. Since BNB is in the positive trend zone, it is set to rise. The fact that the price bars are higher than the moving average lines suggests that the price of the cryptocurrency will continue to rise. Above level 25 of the daily stochastics, the altcoin is in a bullish momentum.


BNBUSD(Daily Chart) - January 30.23.jpg


Technical indicators:


Key resistance levels – $600, $650, $700



Key support levels – $300, $250, $200


What is the next direction for BNB/USD?


BNB has dipped below the moving average lines on the 4-hour chart, but has risen above the 50-day line SMA. The altcoin is currently between the moving average lines. If it crosses SMA on the 21-day line, the cryptocurrency will gain value. In the meantime, if buyers fail to break the resistance level, the sideways movement could continue.


BNBUSD( 4 Hour Chart) - January 30.23.jpg


Disclaimer. This analysis and forecast are the personal opinions of the author and are not a recommendation to buy or sell cryptocurrency and should not be viewed as an endorsement by CoinIdol. Readers should do their research before investing in funds.



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Will Madeira Become Bitcoin Paradise? – Bitcoin Magazine

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Will Madeira Become Bitcoin Paradise? - Bitcoin Magazine


This is an opinion editorial by Joe Nakamoto, a pseudonymous Bitcoin traveler and reporter who helped create a recent documentary on Madeira’s Bitcoin adoption.

What is a Madeira? Why do Bitcoiners keep talking about it? Does it come with fries? And why did Pleb Music (aka, Max DeMarco) shoot a Bitcoin documentary on this tiny island?



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