Cryptospace is shit, but Grin is bliss (probably not)

Looking today at coinmarketcap.com it really hit me. Wtf has happened? How did we get here?
3 of the 6 top coins i would not even call cryptocurrencies since they are not decentralized. But what the fuck do i know. Dogecoin, a small fun project the main dev sold all his coins years ago to buy a car and no one has worked on for years, - because, why should they? - has suddenly a Marketcap of a Double-digit billion range. A billionaire who don’t pays taxes shilling Doge can apparently move mountains in this space.

Bitcoin’s fabled decentralization: 65% of mining comes from China and other human rights-committed flagship states like Russia (6.9%) , Kazakhstan (6%) and Iran (3%)

Only regeneratively generated green electricity is used for sure, because these countries are at the forefront of the environmental movement as we all know.

This year i paid 84€ in fees for 3 transactions (1x BTC, 2x ETH). This is literally 1/4 of my past rent when i was at university. Welcome to the future, this must just be the inflation Bitcoin is saving me from, i guess.

NFTs…I will not even begin to talk about this %§$%&.

If youre interested in cryptocurrenies, coming here must be like vacation at a really nice resort. Unfortunately i have the impression it is getting more and more quiet. I don’t mind that, but please keep on doing your Grin-thing because i believe Grin has its place in the crypto-space.
It outshines every other crypto-project i am aware of and being rank ~500 in a shithole that the cryptospace apparently is, such low ranking is really nothing but honorable. In cryptospace it seems to be like in real life: Shit floats on top. So i enjoy staying low with you.

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That’s mainly because of the ultra slow emission. No other coin has only emitted 2% of its soft total supply after 2 years. Hell, many emit all their coins on day 1 :frowning:
So being in the top 500 with barely any emission is pretty laudable…
Let’s see where Grin stands in 2050 (hoping I make it that far), for a slightly fairer comparison.

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And then (wash?) trade only a tiny fraction of that on exchanges, which somehow defines the price that is used to calculate the marketcap - token price x supply, even if the founders hold 90% of the supply. If they’d dump them, it would put a lot of pressure on the price.
Marketcap rankings are a flawed metric to begin with. If we would look at actual usage / marketcap, it would look very different, I think.

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I think the main reason for this is not inflation.
In 2017, many cryptocurrencies with high inflation were in the top100 and they rised very hard.
You can take a look at Stellar in the table below and check out Stellar’s 2017 rise.
Cryptocurrency Inflation Rates - Christian Ott.

Grin is like a volcano. It takes a long time to develop and does not reveal itself in the mountain. Therefore, it proceeds fairly and far from all spam and ad groups. However, this will not be the case when the volcano erupts.

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There’s a big difference in Bitcoin having the first 4 years the same inflation rate and Grin because of the halvings. This is why the coins pumped, because they don’t have a linear emission so it is very profitable to get a big stack early on. Those that had linear emission back then, like Ethereum, had such a large premine that it did not matter.

Dogecoin has a linear emission schedule (5 billion coins each year).

It’s affine though, with 100 billion coins in the first year.

In my head there are 3 important points to do:

  1. Make an asic miner similar to the G1 mini but with the same hashrate. Is it possible for everyone to mine with the same hasrate or let’s say there is a maximum limit in one machine and also a maximum hashrate limit that can be submitted? Of course, big money will be able to buy 100 thousand more of these machine, but that’s okay, month by month I can set aside funds to increase the number of machine. Low barrier cost to entry. Same limited hashrate for all.
  1. Special exchange for grin, yesterday I saw a review on voskcoin about specter coin gateway https://youtu.be/Nu7AscpV3T4 which has a lot to do, so dreaming of exchanging grin with usdt or usdc or local fiat on a network with cheap withdrawal fees was achieved

  2. The demand for Grin must be increased. Most of the 2 wallets like Grin ++ and Ironbelly just need to polish the UX to make it easier to use.

I’m just a supporter, so all I can do is buy Grin as savings and use it to buy goods. If a cheap miner is available complete with the nodes, I will also buy it for network support, as long as it is of high quality.

B-b-but higher supply means lower price! Market cap will be the same!1!!1!!

Nothing new. The crypto scene is largely hyped and brainless.
Those people who do not understand the fundamentals come with each major bull-run and go afterwards when the price drops. What remains are the people who do understand and do care about the content of a project.
I separated for myself those coins I ‘care about’, like Grin and those coins which I only use to earn money such as Dogecoin, betting on Elon Musk’s star performances. It is sometimes sad that only a relatively small part of the cryptocurrency owners is looking long-term and at fundamentals. But the way I see it, the Grin community is rich in interesting community members, capable developers, and sufficient funding to achieve its long-term objectives.
I count myself lucky. I can enjoy watching Grin’s “rise as phoenix” from the ashes of the multitude of useless projects in the crypto-space that will eventually crash and burn.

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Brilliant analysis, But I’m biased because I completely agree :joy:

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I personally believe that when the time comes for governments to create or make public their own cryptocurrency projects that will be much easier and faster to use, the majority of cryptocurrencies that flood the “crypto space” will face serious problems or elimination. Non-treatable cryptocurrencies by governments will be those that provide privacy/anonymity by default. If the last decade was marked by the explosion of cryptocurrencies, the coming will be the clearing of what is worth and what will go to the bottom of history. Grin already shines and in the near future will shine even more :slight_smile: :grinning:

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I disagree with this narrative.

Sure, a high inflation rate reduces speculation, however, If Grin was the most popular currency on the Darkweb/ or it had another unique use case- Like being an In-game currency for a popular video game. Then there could be much more demand than supply, thus it’s market cap could be much higher. It doesn’t matter how high a coin’s “inflation” rate is: you could have a high inflation coin with lots of demand and it’s value goes up, or you could have low inflation with less demand and its value goes down. Price is a function of supply & demand not a function of emission rate.

Case in point, Bomb token. Which is a deflationary experiment, where 1% of each transaction gets burnt. The current price is $4, ATH $12, but it traded down to 0.30 without any inflation. Obviously, there are 100s of low inflation coins with bad price performance, however, thought i’d highlight Bomb since it seems like quite a cool experiment: https://bombtoken.com/

I also don’t like this narrative that Grin’s price could be higher in x years because of a lower inflation rate. Especially in a PoW coin where inflation = Secuity and when you don’t know how many coins effectivity need to be absorbed by the market on a daily basis.

A coin’s effective inflation rate could be much less than its actual inflation rate. Especially when you have a few entities controlling the majority of hash, with the majority coming from ASICs that were sold too cheap and have already ROI’d. There’s less pressure to immediately sell( unless it’s to cover electricity/ overheads) and more incentive to hold. It’s not always going to be like this, however, there’s going to be stages throughout a coin’s life where there’s essentially a liquidity trap; with miners holding much more than they sell. Grin’s effective inflation rate today could be less than it’s inflation rate in x years time. In x years time miners might not be in the same position they’re in now and could have more incentive to sell, thus there could be less demand required today to push the price up than there will be in x years time.

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High inflation rate means you’re losing money (or rather the ratio between your coins and all grin coins) quickly by holding grin, so it makes sense to sell it, that’s why it seems reasonable to me that the price is falling in the first years. Sure some might hold it, but it only makes sense (to me) to hold it if you speculate it might go up or if you like the coin and don’t care about the money. There certainly are people which fall in those 2 groups, but for majority it’s too risky to buy grin atm. I fail to see how it financially makes sense to hold grin (except for the 2 given cases). Imo security shouldn’t drop when the inflation rate drops because the price should go up (since more people would be willing to speculate by holding it)

For example; just because the Fed( or some central bank) increases a money supply by eg 100% in a year, does not mean you’re purchasing power halves. Your purchasing power could remain the same or it could even increase. A high inflation(emission) rate doesn’t necessarily mean you’re losing money(purchasing power), you’re only losing money if there isn’t enough demand to absorb the supply.

People don’t just buy a currency because it has a low inflation rate and they think it’s value will go up, they buy it because they think they’ll have the ability to spend it in the future( the real attraction of a privacy coin is having the ability(freedom) to spend it without anyone knowing/ trying to control what you spend it on). Price speculation( although a factor) is ultimately not the biggest demand factor for a currency.

I think there are far more dynamics at play when it comes to the inflation rate of a PoW coin. Miners are the ones controlling the effective inflation rate. In a coin like Grin where the mining is very much centralized( on hardware that’s already ROI’d on it’s cost), an entity or a group of entities might not just be speculating on the price going up, but on the notion of them being able to reduce the effective inflation rate by holding coins, thus reducing the demand required to increase the price…Perhaps a catalyst for Grin’s recent price surge.

That’s one of the primary reasons why we have a constant emission rate. So we don’t have to rely solely on a fee-based market, it’s a hedge against any fixed supply coin. Even if Bitcoin can provide enough security from fees alone, it doesn’t mean other coins can. If the inflation rate drops it means nothing if demand drops equally with it. Sure, Grin’s monetary policy is off-putting for speculators- It’s reasonable and rational to assume the price would fall in the first years( as the price has done with all major fair launch coins) so investors should discount accordingly. However, price is often neither reasonable nor rational. Adoption via actual usage is going to be a bigger demand factor than Grin’s inflation rate.

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Grin having an ultra slow emission is a fact; not a narrative.
Since mktcap = supply * price, a low supply yields a low mktcap.

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I agree with many of @Neo thoughts.
Firstly, the majority of people who are currently mining Grin are people who know Grin and trust it. Therefore, these people may choose to save Grin instead of selling it. This shows that we have a different inflation rate than the inflation rate on paper.
Secondly, the majority of the market now has centralized and false monetary policies. I think this situation is preparing the end of cryptocurrencies. Because, the 50-100x increases realized with policies such as decreasing inflation, halving, money burning are actually far from justice. After a while, these can be prevented. Grin, on the other hand, is one of the coins that can live the longest with its privacy, justice, scalability and monetary policy. Hence, when the crypto market starts to suffer one day (from goverments, laws) then Grin can still live.

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Demand is often also a function of the supply function. If the supply function is exponentially lower emission, then the demand will naturally be bigger because the long term investment may make sense at the start of the supply curve for investors that take exponential lowering into account. Such an investment makes much less sense when you have a linear function.
Buying early and hodling is one of the biggest strategies today in the crypto space, so emission functions play a big role in the demand.
I’m not an economist, so I may be very wrong on this one.

My guess would be that that’s only true short-term because the market is too big to adapt quickly (not in terms of marketcap but in terms of how many entities participate in the market), as time passes it should converge to prices being 2x higher for everything imo (with some slight variations probably, but we can ignore that)

I think 99% of cryptocurrency investors are the ones who don’t care about privacy etc, they just invest with the goal of making them richer (nothing against that, seems like a smart thing to do). So currently price speculation is imo by far the biggest reason people invest in cryptocurrencies today. I expect that to change with time though (decades)

That’s a good point. I believe most people who think about buying a coin would still look at the coin’s on-paper inflation rate when deciding to buy or not which means the miners would need to buy the coins to increase the price which sounds risky to me but maybe it’s still profitable for the miners

I always thought that’s a wrong way to look at it since grin should still reach the same problems. It’s true that miners won’t get money only from the fees but also from fixed block rewards, but from where they get the money from doesn’t really matter, it matters how much they get in proportion to the current total supply, and that’s where you still get a very low ratio with time - 60/current_total_supply goes towards 0 with time, so it’s basically like there are no rewards (although it takes way more time to reach these problems with grin than with btc). I just don’t think you can ignore the number of coins that currently exist although i do like linear emission more than the other models - seems more fair. The buying power of 60 grin in year X (X years since grin launched) should be imo around twice as big as in year 2*X

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Yes, most demand for crypto projects at this stage comes from speculation, which Grin’s emission rate discourages. However, it doesn’t completely eliminate it. Grin needs to create demand from other means.

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