Understanding Crypto PART 4
Apologies for the slight Delay in getting this Typed up. I have been making the most of my 2 Weeks off Work. This has Included Late Nights and lots of Time with the Family.
My First point i would like to make is just me throwing my 2 pennies worth in regards to the Forum.
I would like to draw a little Attention to is in Regards to the Forum Itself. I have seen more and more People making a point about the Mods/Admins flexing their Administrative Muscles.
Before Screaming “CENSORSHIP” or Complaining about Certain Users/Posts being Removed I would like to take a minute to draw your Attention to why this Forum is Different to the likes of Reddit, Telegram etc.
Please remember that this Forum is Hosted/Provided and Paid for by Electroneum ltd. This means that it “Belongs to them” and as such they have an Corporate Responsibility to make sure that it doesn’t have anything within it that could cause Legal Issues between them and any Person/Company who could raise Issue with any Post(s) made by the Community.
This is why Accusations made against other Corporates/Companies will Instantly be taken down. This is to Avoid the other Company taking action against Electroneum which will have a huge Legal Cost in Defending. It is my Opinion that nobody (Individual) should be able to cause Damage to Electroneum ltd (Financially and Reputationaly) and thus we should support the Mod’s and Admins Decisive Action when or if it is Required.
As talked about in Part 2/3. Electroneum has “Base/Trading Pairings” This means that you can Exchange ETN with/for Another Currency. Having a BTC Pairing means that you can buy/sell ETN for BTC.
Since we all know that Every Exchange uses BTC as the Default Pairing for Everything. This of course means that you have to already Own Crypto in order to Buy ETN. This is sometimes a Hindrance when looking for New People to enter the space. Not Everyone has the Know-how to buy BitCoin on Coinbase (for example) and then transfer it to a Foreign Exchange and then sell the BTC for ETN.
This is why FIAT Pairings are a Very Important thing to have. FIAT Pairings such as US $, EURO, GBP £ etc are great entry points for new adopters. These FIAT Pairings allow people to Deposit Euro’s into an Exchange and buy ETN Directly with Euro’s without the need to buy BTC, ETH, LTC first.
However since the FIAT Pairings Order Books are very thin (not much coins for sale/on order) if someone dumps $1000 into one of our FIAT Pairings and buys ETN at Current Market Price, that $1000 will cause the FIAT Pairing price to Spike on that Exchange. This also means that the Buyer who owns the $1000 wont get as much Coins for his $1000 as he/she would have if they used a Pairing that has more Liquidity (higher trade Volume & higher Coins for buy/sale on the Order Books) So sometimes the FIAT Pairings are not the best way for Active CC Users to buy Coins, but they Certainly serve an Important purpose such as making it easier for New Buyers to enter the space.
While on the Subject of Pairings, i would like to make it very clear to newer users that Buying BTC and transferring it to an Exchange to buy ETN is a very slow way of doing things.
The time it will take for your BTC to Transfer to a different Exchange from the one you bought it on is probably somewhere in the region of aprox 2hrs before it Arrives at it’s Destination.
However if you use a Different Pairing such as ETN/ETH (Electroenum to/from Etherium) Instead of buying BTC and sending it to for Example KuCoin… Buy ETH Etherium and send that Instead, the Transfer will take approx 15mins instead of 2hrs. LTC Litecoin is quick also.
Even if The Exchange you are looking to Buy ETN does NOT have an ETH/ETN Pairing you can still use ETH Etherium to do the Transfer as long as the Exchange trades BTC/ETH To do this you send your super fast ETH to the Exchange and then click on BTC/ETH and sell the ETH for BTC. Once you have done this you now have your $1000 of BTC on your Destination Exchange but did NOT have to wait on the Transfer time of BTC (2hrs+/-) and now all you have to do is go to BTC/ENT Pairing and buy your ETN with your BTC.
This will cut down your FIAT-ETN Time down massively from a Couple of Hours to under 15mins.
Circulating Supply / Max Supply / Decimal Places
I have been asked to do a write up of ETN’s Supply by a member of the Community. The numbers involved are absolute Fact. However all of what follows the Numbers should be deemed opened to Interperatation and somewhat based on my own Opinion.
Electroneum has a MAX Supply of 21 Billion. Compared to Bitcoin’s 21 Million. This means there is 1000x more ETN than there is BTC. This Large Supply will always mean that ETN is more readily Available than the likes of Bitcoin. This lack of “Digital Scarcity” may Initially slow things down Exchange wise because of the abundance of Coins “out there” but you must remember that Electroneum are not targeting the current amount of people in the Cryptosphere. They are targeting the other 99% who know little/nothing about Crypto meaning we will need more Coins than Bitcoin has in order for there to be enough to go round the potential 100m Users they hope to attract.
If BTC has a MAX of 21m Coins, and although this number isn’t going to reached anytime in our lifetime, and there is approx 10m people Currently in the Cryptosphere, this is an average amount of 2 Coins per User. Which is why BTC’s Price is so Volatile.
If ETN gets 100m Users and at that time we are 16b Coins in Circulation that is an average amount of 160 Coins per User. This Increase in Readily Available Coins should establish more Stability than what BTC currently demonstrates (long term)
Add to this the Coins needed for the Mobile Mining Experience and you should quickly be able to realise why ETN needs such a large Supply of Coins when Compared to BTC.
It is also worth mentioning that the way i see the MM is that it is Richards very clever way of not just banking, the unbanked. It is a very Clever way of Sprinkling a tiny amount of ETN all around the World into the Hands of people who would never have had any Interest in Cryptocurrency. Almost like a free Sample of your Product. Again Large Supply is Essensial for this.
I was asked to make a comment on the fact that ETN has only 2 Decimal Places by another Member of the Community and state that this Cancels out the fact that our Supply is higer than Bitcoins due to BTC having 8 Decimals.
I dissagree on the above Interpretation. I think this is the wrong angle to look at things, Let me Explain why…
Richard wanted to keep ETN Simple for People who are used to Conventional Money Systems where a Pound or Dollar has only 2 Decimals. So each ETN Coin would be divisible in the same way as our FIAT Currency. This means that unlike Bitcoin you won’t ever have someone sending 0.00045789 ETN. The Minimum would be 0.01 ETN. I don’t believe that this cancels out the effect of us having 1000x More Supply, I do however thing that it makes it absolutely necessary to have a higher Supply so that Richard can use the MM issuing Coins Daily/Weekly as Whole Coins and not 0.00004588 ETN Daily/Weekly. This makes more sense to pay someone 10 ETN than 0.00004588 ETN if we had a smaller Supply.
My Opinion is that 21 Billion ETN is not a lot when you consider how many people are going to own some via the MM. Electroneum have some 8 Billion put aside for the Mobile Miner alone! These Coins are going to be spread among the Many and this means that each person will only own a small amount, and such low quantity’s are unlikely to make it to the Exchanges and more likely to be rolling around in the proposed Eco-System. This effectively locks them up similar to what HODL’ers do. The more Coins not Actively hitting the Exchanges… the greater the Supply Vs Demand Argument can take effect.
Storing your ETN Coins
To make sure what i am about to say is in Compliance with the Forum Rules: The following is Advice and I am in now way Accusing any Exchange or any Wrong Doing.
The Last Financial Crisis around 2009 was Caused by Banks. This is why Satoshi Nakamoto created Bitcoin. In his Ideal Vision, he wanted to create something that would rid the need for people to rely on them for everyday Transactional needs.
I would like to encourage you all to spend 10-15 mins googling/researching “Fractional Reserve Banking” I think it very beneficial for you understand how Banks don’t need to necessarily have in their hands the FULL amount of what their Customers Savings add up to.
It is no Secret that if every single Customer of a bank went in and wanted to Withdraw all their Savings at the same time, the bank would not have enough money to give a large % of them their Money.
It is claimed that Exchanges are doing the same thing although there is absolutely no proof of this! You have probably heard of the fall of the infamous Mt Gox. I cannot stress enough to you that you should NEVER have your Coins sitting on an Exchange! Get them off there as soon as you buy them. There are ample ways of Storing them. The Safest by far is a Paper Wallet, Followed by the Electroneum Web Wallet. NEVER leave them sitting on an Exchange!
If they are sat on an Exchange they dont belong to you! If the Exchange disappears…so do your Coins. If an Exchange is running on Fractional Reserve Storage then unbeknown to you, your coins may not be there in 5yrs when you decide to Withdraw them.
Exchanges holding onto everyone’s Coins gives them the power (if they wish) to have an Influence on the price of a Coin. Take that power away from them by Never letting your Coins be in their Possetion.
Please take a look at this very well written post from Hodor from the XRP Community Reddit for a much more Detailed Insight into the matter. https://xrpcommunity.blog/own-your-xrp/
I will draw a line under this, because i don’t want to go beyond the fine line that i detailed at the top of this post. But please take this serious!!!
Apologies for this Part not being as well structured as previous ones. A lot of what is detailed above was by Request of other Community Members and so Interrupted my Flow on Intended Direction of the Post.
PART 5 Will be about : Where i see Electroneum going in the next 5 years, and another little Segment on Exchanges (Getting Listed.)