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Understanding the short and long-term consequences of the fork that started two days ago creating Bitcoin Private is vital for everyone to understand. We will discuss what this fork is and why it is important to pay very close attention to it on a weekly basis.
I was not planning a post on this coin for some time, but after seeing not much coverage about it and also coverage that lacks much information beyond what you will find through Google.
My goal for Steemit posts was to avoid a lot of coverage on these kinds of non-utility coins. In chess a royal fork is when a single piece attacks the opponents king and queen at the same time or the most important pieces in the game.
The BTCP fork is much like a royal fork in chess as it has the power to attack multiple important coins at the same time. There are not many articles taking into consideration many factors that make this different than Bitcoin Cash or the Bitcoin Gold fork.
This post is not meant to tell you to buy at this price and sell at another, but instead help you understand the project and think about the potential impacts that this coin could have. For those of you completely unaware the ZCL price jump from a few dollars to over two hundred dollars was heavily caused by the announcement of the BTCP fork which required holding ZCL to receive the new currency. You will get older and there will always be younger more hungry people right behind you waiting for you to slow down.
Rhett is still young, but understands the importance of bringing in people from many areas. When you look at the team carefully you can see that it is full of very bright people with diverse backgrounds.
I know that for some of them there is no way to verify this, but the team as a whole is unlike any other I have seen before. Rhett is a very rare breed of immense technical expertise combined with an already finely tuned business acumen. He also seems to be highly adaptable like an Elon Musk where he can pick up new things at a rate which would make most of us feel mentally challenged.
While at MIT he created Snipe Swipe in the early days of Ebay which automatically bid on auctioned items seconds before they would end. While studying he gained more experience than most would in the business world 5 years after they finished school. He has a long history of being involved in crypto and blockchain development, from providing contributions to the development of Bitcoin and working on things like clearing and settlement for U.
Rhett is already very well known to those within the crypto world, but even those people may not appreciate that his is a person capable of making crypto mainstream while hurdling regulatory minefields. I know there are others mentioned which should be here, but there is no point in going into each and every one of them.
You can see the team yourself on https: I am a huge fan of the technology and I do not think the world has scratched the surface of how zero knowledge security layer can be applied for other utility coins. You would never need to see the supporting information or double check its answer. Do not think about it simply from a technological standpoint, but a general operational point of view. There are things you do throughout your day where you need to verify something at some point on a daily basis.
When playing poker you need to factor in potential for hand improvement for yourself and your opponents. How many other people are assisting behind the scenes that we do not know about? This is more on the level of Rhett or other team members knowing other really smart people who see them as a bright people and are happy to help them or allow them to bounce ideas off of them. Part of this question comes down to figuring out if BTCP could rally other zero knowledge proof crypto projects into a single combined effort.
The power of ZSL to automate things efficiently across different platforms is huge. We are only beginning to look at cross chain technology, therefore we do not really understand how this will change the network effects of two separate token networks when they are able to interact with each other with ZSL.
The point here is the ZSL cryptocurrencies have yet to see this exponential growth. So again, ask yourself who is not involved or interested in the project that you have not thought about. When a large company like BMW wants to incorporate all the new technology Bitcoin inspired like ZSL, what team of people will they talk to? This is not like the Bitcoin Gold or Bitcoin Cash fork. The Bitcoin Cash fork was the result of infighting amongst the bitcoin community.
Other forks like Bitcoin gold were created to coexist with Bitcoin leveraging the same technology. Most importantly the other forks have been built off of the same underlying technology for the most part. Bitcoin Private is built on Zero Knowledge Security Layer with which is a completely different technology. Unlike Bitcoin, Bitcoin Private can be completely anonymous.
This fork is the zero knowledge community bringing their better tech and trying to leverage control of the Bitcoin brand value. Many of the scaling problems Bitcoin suffers from is much better handled by the underlying technology for Bitcoin Private.
I really do not worry about what exchanges will list a coin and which will not. In the long run where you can buy and sell a coin will not have as great of an impact on a coin as most people think if the coin is useful. In this case though, it is clear the Bitcoin Private team have gone to great lengths to make sure this coin is available on many exchanges.
Again, look at the team and the developers capable of helping exchanges get this added, look at the care they took legally to not announce exchanges at the start, this project obviously wants this listed everywhere it can be within reason. It just makes it more easily accessible and more decentralized which are important things when growing a token network in the long run.
BTCP could crash if all of the people with large Bitcoin holdings sell it off to buy more Bitcoin or something else. The price could get pumped up by a large group of people, then dumped. I plan to buy in and HODL this coin every time it dips for a long-term investment.
There are dangers of this coin being listed on many exchanges for those newer to cryptocurrency because it can be easier for people to try and manipulate the prices. For most of you, if you plan to invest do it for a long-term hold.
This has the potential to dethrone Bitcoin in the long run, and therefore it could be a rare chance to buy something with close to Bitcoin like potential when it cost only a few hundred dollars. A major piece of a token network that is secured through mining are the miners. The more miners the better it is as long as they are spread out among different mining pools.
This way a single pool does not become too powerful. That aspect has clearly been planned very well with most the large mining pools having listed BTCP prior to the launch and having run test nets in preparation. That is not something you see often if your new to crypto. Can you tell where the fork occurred on the network hash rate chart above? Basically, the network hash rate shows how many mining machines are on the network.
The more machines on the network the higher the hash rate. Based on the fact that most miners will mine a coin based on its current market price, mining ZCL at low profitability with the idea of holding it could be a very smart idea.
Many of the pools that they have reached out to are the major ZSL cryptocurrency mining pools. This project clearly has a wide array of support amongst the mining community as a whole which is very important for its long term potential. While there are some unique things they are legitimately trying to do. The secure messenger utility is added to most whitepapers or marketing materials to fluff it up. Reading about coins unfortunately is not always enough to evaluate their future or impact on other coins.
The same could be said for the other ZCash forks. There seems to be a consolidation of resources starting to occur amongst these coins to work together. As a result there is a good chance that one of them could explode in the near future. When one does take off it will probably bring other coins with it. I am not going to go over all of them, but one of the problems is especially concerning.
If that piece of information is not destroyed after it is started, the person who has that information can mint new coins without mining them. They can also do this without being detected. While having the secret piece of information does not change the privacy features of the coin, it can be used for pump and dump scams. When creating ZCash there was a special ceremony where the piece of information used to get zk-SNARKs implemented was split up amongst many people. Each of them entered their part which no one else knew and then destroyed it.
This means only 1 person had to be honest and destroy their piece of the information and the network would be secure. To compromise this method every single person involved would need to work together and not destroy their piece of information. The ZCash team is working on a secure way to implement zk-SNARKs without having to enter that piece of information or have a level of randomness that cannot be compromised.
What does this mean? The creator could just be sitting back minting themselves coins and selling them without anyone knowing. With that in mind the only two projects with the smallest risk of this being a problem would be ZCash and Bitcoin Private. The team seems to understand the importance of building a brand the way McDonalds would and the cycle of updating that will come a long with it. This is a major factor for me when looking at coins.
I respect them for that. As an example, I feel that BTCP will be more like Stellar Lumen when it comes to not spamming news of new partnerships that are meaningless in the grand scheme of things. Whereas something like Ripple does it all the time. I get this feeling it will be run like a Rockstar Wharton graduate is in charge, as opposed to the slimy Wall Street and Forex types creating the marketing you see from many other big projects.
Understanding the network effects at play in any cryptocurrency will come down to being able to predict if the token network will be able to reach a critical mass where enough users adopt and use the technology. There are only a handful of cryptocurrencies currently that have reached what might be a critical mass where the network is able to grow exponentially because it is big enough with enough transactions utilizing the cryptocurrency or token.
I personally do not think anything in the cryptocurrency space has hit that critical mass, not even Bitcoin. Keep in mind that high price or market cap does not mean critical mass has been reached. If the token network effects are not allowing the cycle to repeat, it hasn't reached that tipping point. For all practical purposes Bitcoin has turned into an investment and lost its purpose of being able move money around some time ago. While I have been involved in cryptocurrency for a long time, there has never been a project that has excited me outside of my own.
Though as a whole there are some problems I do not agree with Ethereum about. Bitcoin Private is by no means perfect either, for example by airdropping tokens to all the Bitcoin users there could be unforeseen consequences down the road with a small percentage of people controlling the majority of the circulating supply of a coin.
Many of the current Bitcoin whales know who the other Bitcoin whales are and that problem has been transferred to BTCP also.