Episode 19: CEL and TRX

Episode 19: CEL and TRX

By SirGerardThe1st | Tokenomics | 16 Mar 2021


Since 2011 when I was introduced to Bitcoin, I have received ominous alerts and messages that this is a scam, that I am going to lose all my money, that the bubbles blah blah blah. And they always sing the same songs, the one about tulips and the one about subprime mortgages. Guys, this is math. It has nothing to do with nature and flowers, or with the bubbles purposely set up by a gang of criminals who call themselves "banks." If you don't know, then study a little, because if you don’t, you will look like an idiot.

Whatever it is, a person, a group of people, or a collective entity emerged from the unconscious of the networks, Satoshi Nakamoto interrupted the equilibrium.

None of the technologies that blockchain uses is novel, however, the way in which they were combined caused the cryptocurrency uproar and the collective installation of the discussion and analysis of decentralization as the guiding and anarchic model of society. Brilliant minds have found that using this protocol, a huge virtual machine can be designed to develop applications that until now were only implemented on a centralized basis by proprietary corporations or individual computers.

The blockchain is much more than coins. It is a new way of understanding human behavior, and the emergence of a new society. It is impossible to anticipate the processes that will be unleashed from a decentralized society through the massive application of blockchain technology, as it was impossible to imagine the current large internet corporations in the 90s or the internet itself in the 80s.

Most people believe that money is the stamped paper called bills, which bears the faces of dead heroes. People buy meat and milk (medium of exchange), at different relative prices (unit of account), with money saved in their bank account (store of value). The notion of “fiat” money (money that exists by government decree) is a relatively new concept, and not only has it not yet stood the test of time, but it has also demonstrated an enormous propensity towards mismanagement and corruption.

After Germany left the gold standard at the end of World War I, for example, it took less than a decade for hyperinflation and the total collapse of its economy. Zimbabwe and Argentina are examples of spectacular fiat money failures. The rich can buy bubble-proof company stocks, real estate, and commodities like gold. The poor see their purchasing power deteriorating day by day.

Moral: the cause of the rich getting richer is directly attributable to inflationary monetary policies.

Who is inflation good for?

If you do not have money, but there is money available and they offer it to you (banks, cards, mortgages, loans) you can consider taking it, to buy goods that you know will cost more tomorrow. Those who create money create inflation. Inflation generates more spending, fewer savings, and eternal debt. And this is an absolutely "legal" system.

What other forms of money have been successful for long periods of time? Gold, snail shells, stones. They all have some characteristics in common: difficult to be lost or stolen, rare, difficult to be counterfeited, easily measurable, divisible. This is what is called "intrinsic desirable features."

Modern monetary theory, MMT, directly contradicts the fundamental notion that money has value for its desired intrinsic features. According to the MMT, money is "a creation of law" and derives its value from the state. Fiat money is the result of acceptance, the most horrible form of acceptance, agreeing to pay the government. When you buy groceries, you go into debt in the fiat amount transferred. The currency acts as a promissory note. The grocer receives a debt paper that can be exchanged for other goods. This suggests that money has no intrinsic value, directly confronting the above "intrinsic desirable features."

So, the Market IS NOT a place where goods and services are exchanged, but a vulgar “clearinghouse” to match debits with credits.

MMT maintains that we "have evolved" from snail shells to gold coins and finally to "fiat" as a result of seeking more efficient ways to manage debt. Here's the key: the MMT is a concrete statement that the issuance of money is a debt.

This is the big difference, Bitcoin is not a debt, it is an asset, as is a shell, a stone or gold.

The notion of a currency backed by an asset is a nightmare for the government because it takes away the ability to control the issuance of money. With MMT, a government does not need to balance its budget, and then, the expenditure can be much higher than the income from tax collection, since the difference can be covered by the issuance of more money, that is, more debt.

Proponents of MMT believe that governments can create as much debt as they want, as long as there is sufficient demand for foreign exchange for state-imposed obligations. In theory, governments can finance themselves strictly by issuing money, until inflation rises to a point where more taxes need to be levied to increase the demand side of money and thus match it with supply. In other words, this is having fun humiliating the herd.

The fundamentals of the MMT are not new, but recently there has been a great resurgence on both sides of the political spectrum. It is a pleasure to be a politician and to be able to control the herd through the creation of money. The current belief is that the government can live with a perpetual deficit to wage wars, roads, and hospitals because if something goes wrong and you are in danger of default, you can simply print more money!

The decentralized nature of Bitcoin indicates that even if the State wants to destroy it, it would have to get into an incredibly difficult and very expensive project. This new form of money can exist in total freedom in the jungle, and it is the most serious competitor of the "fiat" money that the human being invented until now.

Bitcoin has built a robust social contract with its users, with the following clauses:

  • Only the owner of a coin can generate the signature to spend it (Resistance to confiscation)
  • Anyone can trade and save value in bitcoins without asking anyone's permission (Resistance to censorship)
  • Only 21 million bitcoins will be issued, with an established schedule (Resistance to inflation)
  • All users can review and verify the rules of Bitcoin (Resistance to counterfeiting)

If the fundamental premise on which an argument is built is challenged, then the argument is destroyed. MMT says that money is worthless because of its intrinsic desirable features, and bitcoin has shown that it is capable of creating value just because of them. If people begin to value money for its intrinsic desirable features, in the medium-term money that can be printed according to the whims of a handful of politicians will lose value forever.

The most important legacy of Bitcoin is the separation of money and state.

Governments perpetrate two types of theft against citizens: by forcing them to pay taxes and by stealing quietly through inflation. The MMT designed by the oligarchy penalizes the common citizen. The State has been committing acts of robbery with ordinary people for centuries. In most countries of the world, everyone who has a job is obliged to contribute to the government with a part of their income. Governments created a monetary system to enrich congressmen and representatives, and also their close friends. Using a currency like bitcoin, people are not obligated to contribute to anyone.

If we leave our money in the hands of criminals, the responsibility is ours. How do we explain it to our family? 

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Image by bgs_digital_creator from Pixabay 

The crypto-sphere offers a monetary system without intermediaries to "trust", without financial advisers, without the State, without corporate entities such as commercial banks, putting obstacles in the way of trading freely in a decentralized network. Instead of using promissory notes inserted by force and regulatory violence, individuals and companies can voluntarily choose to use a transparent, permissionless, uncensored, reliable, fast, and corruption-free monetary system, as it relies on pre-established mathematical rules that everyone can watch and control.

Anyone in the world can control the operation of the system. Cryptocurrencies are very portable and offer great protection against the collecting agent who wants to keep the fruit of our work. With a currency like bitcoin, funds can be sent immediately anywhere in the world without having to ask permission from any bank, or from any government, or fill out the countless forms that sick control entities ask for, and then wait weeks of approvals and parasitic and useless procedures to credit the money.

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Image by garywalker from Pixabay

Hiding a million dollars in gold is very difficult. But hiding a small piece of steel or paper engraved with a phrase that is the private key to access a million dollars in cryptocurrency is extremely simple, and you can go even further by memorizing the phrase. 

Cryptocurrencies empower the population while MMT empowers a group of oligarchs sitting on top of the hill. Anarchists, libertarians, and agorists do not care about all the control systems that commercial banks, central banks, governments, and their associated parasitic entities are trying to establish, nor do they dream of some congressman approving of the decentralized money system. In reality, they worry about the separation of the monetary system from the violent monopoly that the state has to rob society every day. It is not a battle between businessmen and the government. It is a battle between the centralized empires of the planet and a decentralized rebel alliance of ordinary people. An eternal battle.

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Image by Colin Behrens from Pixabay

 

With that said, let's move on to today's two tokens.

 

 

CEL

Rank Coingecko #48

https://celsius.network/

Most people do not know or do not have access to the tools to make their money work for them. The money you have in the bank should pay you interest because this is how the bank makes money. They lend your money, earn interest, and keep it. They do it with impunity in your own face, and periodically they increase maintenance, transfer, and ATM fees and charge you absolutely everything, after having worked with your money and having made fortunes.

Celsius is a cryptocurrency lending platform. Someone lends their crypto in exchange for interest, and someone takes that loan by leaving collateral and paying that interest.

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Like other loan platforms, Celsius offers an interest to leave the money deposited on its platform and allow it to be used for loans.

Payments can be received in 2 ways:

  • In the same crypto, for example, we leave bitcoin and they pay us interest in bitcoin.
  • In CEL Token, for example, we leave bitcoin and they pay us interest in CEL Token.

Also, Celsius allows you to take loans. We have the money instantly just by leaving the collateral. That is, they lend us the money in exchange for the guarantee we leave. They give us up to 50% of the value of what we leave as collateral and with that, we go at the highest rate. We can guarantee the same cryptos that are used to generate income.

We receive the money instantly and it can be:

  • Cash.
  • In CEL Tokens.

This is wonderful because although the rate is much higher in cash, it is a quick option to get money. If we accept CEL tokens it is much better because the rate drops drastically. You can repay the loan in 6, 12, 24, and up to 36 installments.

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Source https://celsius.network/

Token lenders are those who have cryptocurrencies and lend them to other users of the network and get an interest. Token borrowers get credit much easier than with a bank thanks to a cryptocurrency guarantee and with lower interests than a traditional bank. Celsius is an algorithm-based system that executes trade orders in various currencies, whether crypto or fiat. Today, Celsius relies on the Chainlink oracle as the foundation for its decentralization and contributes to the more secure and reliable pricing of the DeFi environment.

In addition, you can also increase your savings by staking even without having to make a new deposit and without minimums. Currently, the average interest is 21.49% per year and depends on each specific token.

What do you think if you take the fiat money that you have in your bank account that is producing juicy dividends to the bank without giving you anything in return, and you pass them to a cryptographic representation of the dollar, a stable currency, such as USDC, USDT, GUST, etc., and then you deposit them in your Celsius Network wallet and you will earn 10% per year?

There are no blocking periods, you can withdraw your money at any time and there are no commissions of any kind.

Where does Celsius's interest come from? Celsius Network pays interest to its depositors each week using 80% of their income from the previous week.

What sets Celsius Network apart from any other project is that their mission is to use only 20% of their income to pay for everything they need to run the business. Despite returning 80% of its revenue, Celsius Network is a profitable company. What you have to understand then is how Celsius Networks makes money. Basically, its income comes from its crypto loan operations. When you deposit your cryptocurrency with Celsius, it goes directly to a group of the same asset. They lend that money to financial institutions and charge them interest. This is how Celsius revenue is generated. Once they receive payment from these institutions, they enter the market and use 80% of what they earned to buy the equivalent of each cryptocurrency deposited in the Celsius Network application and distribute it to their depositors as interest.

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Source https://celsius.network/

Whenever a business lends money, its greatest risk comes from the borrower's ability to repay the loan. Unlike banks, the Celsius Network only issues over secured loans. This means that for each amount borrowed by Celsius, the borrower provides collateral as a guarantee that he/she will repay the loan. Through an ingenious algorithm that handles cryptocurrency deposits and reserve requirements, even in the unlikely scenario that all users want to withdraw all their money and that all institutions want to repay all their loans, as soon as Celsius can rebalance the TLV of its loans if the price of the borrowed cryptocurrency fluctuates, it is not in a bad situation, because it can liquidate its asset very quickly to meet all the needs of its customers.

A very interesting feature is the payment feature called “CEL Pay”. It is a system to send and receive money at no cost, and in an extremely fast way, very similar to a wallet.

As said, the CEL token is the native currency of the Celsius network. It is an ERC-20 that has a very good reputation in the market at the time of writing.

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Celsius was created in mid-2017 by Alex Mashinsky and S. Daniel Leon. In March 2018, they had already completed their initial offering and made their new token available to the general public. Three months later, they launched the Celsius Network app, and by December they had exceeded $ 50 million in community assets.

Celsius announced in early 2021 that it has validated over $ 10,426,308,071.50 worth of cryptocurrency assets using third-party validation tools. In December 2020, Celsius conducted its first-ever asset verification report using the same method of validation to confirm over $ 3.3 billion in digital assets based on net transactions as of November 2020 accounting for total customer assets since Celsius's launch in June 2018.

 

 

Conclusion. The interesting thing about Celsius is that it is the most important attempt at the moment to lower the huge spread with which traditional finance takes for itself when making a trade. Conventional financial institutions share a very small fraction of their profits with their clients. One of the great things about decentralization is the reduction of greed and confiscation through insane fees characteristic of traditional financial institutions.

Celsius is the most popular cryptocurrency lending platform of all, competing with MakerDAO, Blockfi, or Compound Finance. Traditional banks and traditional financial institutions are designed to demand the highest amount possible from their lenders and provide low returns to their borrowers. On the other hand, Celsius Network charges low interest, and immediate credits without verifying history if you request a loan since you can use your cryptocurrencies as collateral. Transactions are free. Withdrawals and deposits are completely free.

Celsius is a really promising project. His contributions to the democratization of financial benefits appear to be having good reception. In fact, the number of users has increased rapidly around the world. The total value of assets has also grown. This banking-style operation, but with much higher returns, is the first step to include a lot of people who cannot access traditional loans because they have neither history nor net-worth. This only promises to be the beginning of a colossal market, which can change the lives of many and eliminate “vampire entities” from the system once and for all.

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Imagen de OpenClipart-Vectors en Pixabay 




TRX

Rank Coingecko #28

https://tron.network/

Yet another project that competes with Ethereum in terms of creating a pervasive decentralized infrastructure with smart contracts, offering high throughput, high scalability, and high availability for developers to program their applications in the TRON ecosystem. In this case, the network has a native utility token called Tronix (TRX). It is designed to be compatible with the Ethereum EVM, so it has the ability to be a virtual Turing complete machine.

The TRON project is not just another project, thanks to the fact that it was launched and is directed by a very particular character, a kind of Vitalik Buterin Chinese version, mixed with Steve Jobs and Diego Maradona, called Justin Sun. I must confess that I have mixed emotions with Justin Sun. He sometimes strikes me as a genius, and at times he strikes me as a desert merchant. Now, I must admit that he is very clever and has the qualities of a visionary.

In 2017, Sun founded a Singapore-based non-profit organization under the name TRON Foundation. In June 2018 the TRON mainnet was launched. The organization is currently led by Sun as CEO.

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The controversial boy

Justin Sun is a 27-year-old Chinese citizen educated at the Chinese University of Hong Kong, also with a Bachelor's degree from Peking University and a Master's degree from the University of Pennsylvania. He was personally invited by Jack Ma (founder and CEO of Alibaba Group) to participate in his Hupan faculty, focused on entrepreneurship. Justin Sun at his young age is already one of the great entrepreneurs of China. He is ranked among the 30 most successful businessmen up to 30 years of age in Asia. He is the creator of the Peiwo application, a kind of voice Snapchat widely used in China, with more than 50 million users. He has also worked for Ripple as the chief representative of China. Sun was previously the director of international operations for WeChat, one of the most successful applications ever in China. WeChat has more than 1 billion records and 700 million active users, the majority located in China.

In other words, we are talking about an out of series, a singularity.

During the ICO, TRON sold about 40% of the entire total supply of tokens (about 40 billion), which earned him a collection of about $ 70 million in Ethereum and Bitcoin.

The remainder of the offering was retained by the team for future distributions and to fund future marketing and project development efforts. With this initial funding, the project started what would be one of the most ambitious blockchain development projects yet. The objective was to stand up and make direct competition against large blockchains such as Ethereum, Cardano, and NEO.

In June 2018, TRON entered blockchain history with the creation of the Genesis block. And a short time later in the same year, it would be news again after the acquisition of the company behind the development of BitTorrent and its popular P2P protocol.

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Source https://www.bittorrent.com/

By October 2018, TRON launched the TRON Virtual Machine (TVM), a comprehensive suite of developer tools. Shortly afterward Sun presented the Atlas Project, with which TRON would unite the power of the blockchain together with the power and expansion of the BitTorrent network. The goal was clear: to create the world's largest network of content creators and users.

TRON's technology ensures unsurpassed decentralization. It is an architecture designed for modularity, with well-defined and separate layers and functionalities. In total, TRON is divided into three layers that are:

  • First Layer: Application Layer. TRON's official support includes Java, Python, C ++, Scala, and Go. All this means that it targets a very large universe of programmers. Thanks to this, TRON has been able to experience an unprecedented expansion in the blockchain world.
  • Second Layer: Storage Layer. For the development of this layer, they chose the LevelDB software, a solution designed by Google. LevelDB is designed from start to finish to offer distributed storage capabilities with a high level of integration.
  • Third Layer: Core Layer. A series of advanced features powered by its TVM (TRON Virtual Machine). In addition to this, it has an advanced DPoS (Delegated Proof of Participation) consensus protocol. With this, TRON guarantees an unprecedented level of scalability that places it above 2,000 transactions per second.

The programming language used for TVM and the management of smart contracts is Solidity. This is to facilitate the transition of DApps from Ethereum to TRON. The first DApps on the blockchain were thanks to Ethereum, its smart contracts, and the ERC-20 token. But TRON also has this capacity and has even improved many of the aspects that Ethereum has had at the time, surpassing it for the moment in certain cases, especially in the ability to process transactions and the flexibility of the token. The TRON team relied on the ERC-20 token for their work, and they improved it. From these improvements came the TRC-20 token, which is fully compatible with ERC-20. The improvements introduced in TRC-20 are mainly aimed at making its handling more flexible within a blockchain designed to use the DPoS consensus protocol. Thanks to this protocol, TRON achieves high levels of performance and scalability.

Tron's currency is TRX (Tronix), initially, it was an ERC-20 token until in June 2018 they launched their own blockchain. So all the tokens supplied to date migrated to the native TRX coin in a 1: 1 ratio.

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The total supply established by the TRON foundation is 100,000,000,000 TRX.

There are many companies investing in TRON, such as BITMAIN, the largest company in the mining industry and the main manufacturer of hardware for miners.

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Source https://www.bitmain.com/

TRON is statutory in Singapore and appears to be getting a lot of support from governments as well. Justin Sun announced on his Twitter in January 2018 that he was closing an alliance with some space company. Maybe they are planning to launch some satellite with a TRON server or something related.

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Image by Alexandra ❤️A life without animals is not worth living❤️ from Pixabay

In February 2020 a remarkable event occurred: it was reported that Justin Sun had acquired Steemit Inc along with the platform founder's reward of 20% of the total supply of STEEM tokens. In response to the alleged acquisition, the Steem community moved to initiate a fork to freeze the bounty.

After the purchase of the platform, some Steem and Steemit users began to warn that the CEO of TRON would not respect the verbal agreements that were made with the community. Furthermore, users claimed that in their announcements, Sun spoke of Steem as if the blockchain had been part of the sale. According to users, Steem is a decentralized blockchain that cannot be sold or acquired by a single entity.

Then Sun made an announcement that inflamed the steemers. He claimed that the Steem tokens would be moved to the TRON platform. The Steemit purchase earned Sun 64 million STEEM from the founders' funds. According to Steem's governance model, users with the highest number of tokens can exercise a vote and have a greater influence over the network.

Steem users viewed Sun's sayings as a "malicious attack" on the blockchain. Therefore, they decided to implement a soft fork that blocked Sun's funds. Thus, they tried to prevent the CEO of TRON from exerting influence on the Steem blockchain.

At that time, Sun took a countermeasure and claimed that "hackers" were trying to take his funds. Cryptocurrency exchanges that had user funds from Steem, Binance, Huobi, and Poloniex were contacted by the TRON team to take their clients' funds and cast their vote to unlock Sun's funds. According to Changpeng Zhao, he was not aware of all the details and thought that he was voting for a "regular update".

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Justin Sun Responded To Binance CEO: “We Have No Intention To Take Over Any Blockchain”

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Vitalik spoke about the alleged take-over, with the word “watershed”.

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The Steemit community ended the battle with Justin Sun by removing him from power. If the entire community moved to the HIVE hard fork, Sun's STEEM tokens would effectively be worthless if this were to happen.

In the statement, Hive is explained as a "community-driven fork" that will be a direct copy of the Steem blockchain. The STEEM tokens will be the same as HIVE's, but will effectively remove Justin Sun's control of the network entirely.

Together, the Steemit community has agreed on one thing that is clear: they want nothing to do with Justin Sun.

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Source https://cointelegraph.com/news/hive-hard-fork-is-successful-steem-crashes-back-to-earth

So far, HIVE has proven to be a very successful blockchain, achieving its mission of not being dependent on Sun at all. In the interests of decentralization, it made it clear that no network can be "bought" by a single entity.

 

Conclusion. China is moving fast on its way to becoming the world's greatest power, overtaking the US. This is due to its free-market policies and the enthusiasm that its population and its government have in using national products. Both China and the rest of Asia receive little influence from the Western world, preferring its culture and business over American imperialism. It is important to focus on that point, because TRON competes directly with other platforms such as Ethereum, Cardano, and NEO. Even if one of them gained a lot of popularity and a great acceptance compared to the others, TRON is almost certain to be successful. China and other Asian countries will always choose it. It is a powerful market and it is taking notice. There are 4.436 million people in Asia, three-fifths of the world's population. TRON is destined to be Asia's Ethereum platform, and it can hardly be dethroned with a Western platform. A huge market will depend on the dApps that the Chinese develop for Asia as a whole, and surely, all these dApps will run on TRON. I believe that it is a good idea to have some TRX in my portfolio.

 

 

As usual, none of the things written in this post are financial advice and are not intended to replace personal research.

 

 

Thank you for reading!

 

If you have any questions or comments, please feel free to leave them down below

 

You can also contact me at gerardo.saporosi@gmail.com

Twitter https://twitter.com/SirGerardThe1st

LinkedIn https://www.linkedin.com/in/gerardosaporosi/

 

 

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SirGerardThe1st
SirGerardThe1st

Franchise veteran, Dapps developer, DeFi evangelizer, Bitcoin and Ether since a long time


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