Mythbusting: Running a Bitcoin node is "expensive" if block size is bigger
One of the strongest arguments small blockers would use against increasing the block size is that it would become very expensive to run their own node at home and cause "centralization" of Bitcoin
The basic premise being that bandwidth costs will take the control away from an individual user (node)
This argument keeps coming up again and again, but its premise is incorrect as the view comes from people living in North America where Bandwidth costs are astronomical (2.5X) compared to a developing country like India
I believe this is one of the most destructive myths which stunted Bitcoin's growth and created a civil war with the creation of Bitcoin Cash and its very simple to burst this myth.
Most nodes for BTC and its supporters (Maximalists) are from the North American region. The bandwidth costs are expensive there because of a monopoly of ISPs, they don't have a lot of competition and they demand such higher charges and people don't really have a choice but to pay the cartel.
1 Gigabyte internet connection costs $85 in my city with 1TB download limit, these maximalists are just out of touch from the reality
**Bandwidth costs in a developed country like the US are 2.5X for the same speed**
Its ironical that the very people who are fighting for Bitcoin to be available for home nodes so that it is government resistant are too ignorant to realize that the same govt and its favoring corporate monopolies is keeping them from fully realizing the potential of Bitcoin unleashed from the shackles of 1MB block.
*Trying to keep Bitcoin decentralized while living under a centralized regime of ISPs*
No wonder they are willing to pay 5x higher fees to transact in their version of Bitcoin (BTC) as they are used to paying 3x the internet costs as a home user in a 3rd world country
What is a fact (high prices) for a Bitcoiner staying in USA is just a myth for a Bitcoiner like me staying in India
The world doesn't wait for those who try hard to maintain the status quo, people now have a choice through Bitcoin Cash
Myth:Small blocks enable more nodes to be run on Bitcoin to keep it Decentralized
I will address this myth quickly, this is a much touted argument by the maximalists to showcase the superior decentralization and popularity of Bitcoin (BTC)
However, this myth was burst by the same maximalists when the CVE-2018–17144 bug which can inflate the bitcoin supply was found
The above article was posted by a well known BTC maximalist Jimmy Song, others urged for the immediate up-gradation of all the nodes and expressed grave concern when very few upgraded
But it was no use, nodes were indeed useless
Even after 5 months, only 30% nodes cared enough to upgrade, if this doesn't burst the myth of node being important for BTC to be decentralized, i don't know what will
Mythbusting: Bitcoin must have internet and a smartphone to work
"Bitcoin can't work without internet" is a common argument used by people outside the Crypto community as a reason why Bitcoin will fail, even if it is unreasonable that someone will shut down internet
and then there are "leaders" like Samson Mow who said
When Satoshi gave Bitcoin to the world, he meant it as an alternative to the traditional payment systems which relied on a trusted 3rd party. Of course, he meant for Bitcoin to be used by everyone and not just for the western countries like the United States.
But its not surprising that another "renowned" Developer and maximalist, Jameson Lopp supported the above tweet and mocked at Vinny for differing with Samson's opinion
These Bitcoin "leaders" celebrate the lack of progress on Bitcoin protocol and actively advocate for the status quo expecting the world to acknowledge and adjust to Bitcoin (BTC) as it is
Arrogance limits your vision and he was proved wrong when Bitcoin evolved in the form of Bitcoin Cash and enabled creators to develop their own vision
Cointext
Vin Armani another early adopter and a Bitcoin developer proved the maximalists wrong by creating Cointext https://cointext.io/en/
*CoinText enables instant transactions without Internet, apps, accounts or passwords by providing an SMS gateway to the blockchain*
This tool is exactly what is needed for many 3rd world countries where millions still use a feature phone (not a smartphone) and don't have continuous access to the Internet.
With Cointext you can "*Begin texting money to your friend's phone numbers or pay for anything where BCH is accepted*"
**How it works?**
Cointext is a platform that enables users to transfer cryptocurrency using simple text messages. The mobile wallet service allows anyone with a basic mobile device to send funds via SMS to other phone numbers or bitcoin cash (BCH) addresses. https://cointext.io/ https://markets.bitcoin.com/crypto/BCH
On the receiving side, people don’t need to download a wallet, install an app, set up an account or even have access to the internet. Users can set up new accounts just by sending ‘START’ to the Cointext access number in their region, with other actions similarly ordered by simply texting commands
- news.bitcoin.com https://news.bitcoin.com/how-to-send-bitcoin-cash-via-text-messages-to-anyone-with-a-mobile-phone/
**It is so good, even BTC maximalists use it to on-board newbies**
**Best on-boarding tool for newbies**
As shown in the above practical case, this is one of the easiest ways to onboard people to Bitcoin Cash. They don't need to download a wallet app, or send you their BCH address or show a QR code. Heck, they don't even need internet
If you know their phone number, anyone can just text them money and who objects to getting money without doing anything?
Its so easy, maximalists are sending Bitcoin to their Grandma!
**The world needs an option like Cointext and Bitcoin Cash**
The Indian govt has cut off internet access for the state of Kashmir for the last 4 months and as a result all modes of digital payment options are down making everyday life really hard. https://twitter.com/the_hindu/status/1202805124818784256
Services like Cointext can play a real role in those kind of situations and combining it with the power of Bitcoin Cash as an instant P2P Digital Cash with low fees, the people get closer to economic freedom
Bitcoin is an experiment and was supposed to stay that way so different people can develop it into a state-of-the-art P2P digital cash. Bitcoin Cash is now carrying on that legacy by providing a stable middle ground and encouraging developers and entrepreneurs to create solutions to change the world for the better
**Bitcoin Cash and services like Cointext prove that impossible can be made possible, and accepted facts (status quo) are just myths waiting to be broken**
Ethereum can drop to $15!
Elliott Waves are derived from human psychology of Greed/Fear. In a simple description, the uptrend/Bull cycle consists of 5 impulsive waves labeled 1-5 and the ensuing downtrend/correction consists of 3 corrective waves labeled ABC
After the correction (C wave), the cycle repeats. Note that impulsive waves have 5 subwaves and corrective waves have 3 subwaves
Secular Bear Market - 2018 to TBD
My entire premise for this article is that the bear market did not end on Dec 2018, it was only the 1st leg (A wave) of the correction, the early 2019 rally was a corrective rally aka Bull Trap (B wave)
A typical bull cycle lasts 8-10 years followed by 3-5 year bear market. There will be smaller bull/bear periods within. For example: Silver had a 10 year bull market followed by 4.5 year old bear market.
I believe Bitcoin (8 years) and other early majors like ETH/XRP are done with their bull markets from 2009-2017 and we are now in a secular bear market.
I tweeted about this and posted a chart forecasting the 2019 rally (till 8.5k) and it possibly being a fakeout as early as April when BTC was still $4.9k https://twitter.com/imkeshav/status/1113614803480633344
Subsequently, I was able to call out the top in July based on this major assumption https://twitter.com/imkeshav/status/1148783354071752704
Ethereum Bull Run - 1 million percent
Following this major but troubling discovery (In April) that Bitcoin is done with its 1st Cycle (2009-2017), I started look for other clues and in Aug, the full chart history for ETH came to my notice, until then I was using the chart from Bitfinex which did not have the early price history
Opening the chart (in Aug), it instantly appeared to be a perfect 5 wave completed and also the 2019 rally appeared to be a 3-wave corrective rally, a likely B wave https://user-images.githubusercontent.com/22295217/70555272-beecd500-1ba4-11ea-902c-f142f8f6dbc2.PNG
The weekly chart (below) looks like ETH is done with its impulsive 5 waves bull rally starting from Aug 2015 and ending in Jan 2018, with 2017 being parabolic which is congruent with an extended 5th wave
**Here is why I think this is a perfect textbook style 1st cycle of 5 waves**
We can see clear 5 waves (in green)
Wave 2 is deep (0.618), wave 4 is shallow/sideways to almost 0.382
The entire structure is divided at 0.618 near wave 4 bottom, which indicates again this is an extended 5th (also clear 5 subwavs in blue)
After every 5 wave bull cycle, there is a deeper ABC correction that goes up to 50% reracement or 0.618. Extended 5th wave cycles also correct sharp & deep, the textbook **guideline says till subwave2** (here blue) of the 5th wave (green)
Also, entire drop to $75 was less than 0.382Fib of the bull run (2015-2017), which is too shallow after a 5 wave bull cycle
So, ABC correction started at 2018 Jan ($1600)
A wave = $1600 - $75 (End Dec 2018)
B Wave = $75 - $380 (End June 2019)
C Wave = $380 - ? ($15) (End in June2020?)
**Here is the confluence for $15 correction**
1. Major assumption: 5 wave are done, so next ABC correction is always deep
2. Correction is 3 waves (red ABC)
3. A textbook ABC correction is length of A:C = 1:1 (target area = blue box)
4. ABC corrections are usually confined within a channel, the current C wave will likely end at the bottom of the channel
5. The same target area, $15 also happens to be end of subwave2 (blue) of the 5th wave (green)
6. $15 is 0.5 Fib of the entire cycle, so 50% retracement
An **optimistic target can be $50** which is 0.618 of (A), see blue line in below chart. It is also 0.382 Fib of the entire rally from 2015 - 2017. This target could be achieved by June 2020
**RSI evidence**
RSI on the weekly appears to be in a downward channel and keeps getting rejected at the channel, recently in 2019 runup, it made a double top and dropped below. I consider RSI below 50 as bearish , and after a 2nd attempt to breakthrough it failed again (red arrows)
**2019 Rally was the perfect Bull Trap**
As per my major assumption we are in an ABC correction, where A downtrend was completed by Dec 2018 ($75), and the subsequent rally was actually the B wave ($360)
Unlike an impulsive wave, a B wave is a corrective wave which has 3 subwaves (seen above) and usually confined within a channel
Reasons to think its a **B wave**
1. Entire price of 2019 rally is within the blue channel
2. It looks like a 3 wave structure, similar to the red ABC
3. Red C was 1.618 Fib ext of Red A, also green C was 1.618 Fib ext of green A
4. Red B rallied to 50% of A (0.5 Fib), the entire 2019 rally was to 50% (0.5 Fib) of the entire 2018 drop
**Wave Psychology**
Elliott Wave is based of human psychology of Greed and Fear. So the top of the 5th wave is extreme greed and bottom of C wave is fear. So the 5th wave (blue) of the 5th wave (green) is euphoria, this happens to be after Oct 2017 (circled in red)- remember that time? everyone was making money including thinking it was the end to all our money problems https://www.tradingview.com/ideas/elliottwaves/
*"Even if a fifth wave extends, the fifth of the fifth will lack the dynamism that preceded it. During advancing fifth waves, optimism runs* *****extremely high***** *despite a narrowing of breadth"*
Section 2.4 from the book - Elliott wave Principles (https://www.elliottwave.com/Book/Elliott-Wave-Principle)
You know the textbook description of the ****B wave (Bull trap)?****
*Narrow emotional advance, technically weak (just 3 waves), selective. Results in non-confirmations.* ***Aggressive euphoria an denial***
**Other assets for similarities?**
Looking at silver chart, its also an extended 5th wave (0.618 divides at 4th wave) where the correction dropped till 50% (0.5 Fib), see green line above
Most (all?) EW analysts are unable to see that 5 waves are done, the simple count of 5 waves should be obvious instead of trying to fit a bullish bias. This is the reason the 2019 rally is expected (by them) to be the beginning of new 5-wave bull cycle, this will be proved wrong ONLY if we make a lower low
I believe EW analysts who run paid group are unknowingly (or knowingly) biased towards a bullish count for 2019 rally. Because otherwise, my chart means the market is going to die (almost) and so will their businesses. I've seen how this clouds their judgement.
But if you see charts of DASH or ETC, we already made a lower low recently which busts the myth that the early 2019 Alt coin rally was impulsive. https://twitter.com/imkeshav/status/1159375770004799489
Alternate Bullish possibility for ETH
Here is an alternate scenario, where we make one more rally by taking support at the 0.618Fib area to targets T1/T2, after which we will resume the downtrend
The main chart & future updates will be posted in Trading View and in Twitter under @imkeshav https://www.tradingview.com/chart/ETHUSD/KanglDmD-ETH-Reality-can-be-as-low-as-15/
*Featured image from Shutterstock*
@imkeshav
