A Critical Report On Bitcoin Mining And Its Carbon Footprint

Finally, FACTS That Counter The FUD

Cryptocurrency is more popular than ever as the mainstream populace realizes its potential as a new monetary system, especially in light of hyperinflation in our legacy financial system. The control that the “powers that be” already have over our sovereignty and the introduction of Central Bank CBDCs will only result in a more oppressive regime for sovereign citizens. 

There are factions of people intent on discrediting crypto to minimize adoption, particularly Bitcoin or any Proof of Work protocol that relies on mining. Their primary focus is on damage to the climate due to fossil fuel emissions, even though the statistics for their claims have been negligible and inconclusive at best. 

China’s recent ban of all crypto-mining is purported to be for the concern of excess carbon emissions. Arguably, the real reason for the ban was to push the Yuan CBDC already in circulation. Central Bank Digital Currencies are not a cryptocurrency but a financial system to exercise total control of its people. This ties in with China’s Social Credit System and publicized scoreboard pictured below.

Image Source: Reddit 

 

Bitcoin Mining Report To End All FUD

The highly reputable firm, Coinshares, has published a recent report to counter this argument of concern ramped up last year, under the guise of ESG. The report illustrates how much of an effect Bitcoin mining has on the climate relative to other industries, including printing fiat currency, and what it means for Bitcoin. 

Bitcoin Mining report begins with a brief history of the concerns about the energy used by Bitcoin mining. This includes a famous response from Bitcoin creator Satoshi Nakamoto, who already dealt with energy critics way back in 2010.

“The utility of the exchanges made possible by Bitcoin will far exceed the cost of electricity used, therefore not having Bitcoin would be the net waste.”

The authors of the report agree with Satoshi because the economic incentive to spend caused by the constant inflation of fiat is wasting a lot more energy than Bitcoin mining and destroying the environment. 

The report also points out that concerns about Bitcoin mining are recurring subjects that tend to get resurrected in full force with each successive market cycle. In other words, when Bitcoin is on the rise and sensationalist commentators have not been shy about offering their (often poorly supported) opinions. However, many Bitcoin-fluent commentators have conveyed retorts to the contrary. 

The authors also mentioned that they would be open-sourcing the model and the data they used. So that crypto critics and supporters alike can play around to see what it says about Bitcoin mining. 

The second part of the Bitcoin mining report lays out the methodology the authors used to measure the carbon emissions created by Bitcoin mining. They start by making an essential point that “Bitcoin, like electric cars, is as green as the electricity you feed it, meaning that in a 100% renewable energy environment, Bitcoin would be 100% renewables driven.” 

The report then breaks down the three components in their methodology. These are; calculating network efficiency, carbon emissions, and a variety of assumptions in terms of network efficiency.

The authors then estimated the total energy use by looking at the total Bitcoin Blockchain hash rate. When calculating carbon emissions, they looked at the different regions where Bitcoin miners are based and how those regions get their power logically. If a territory is getting 100% of its power from fossil fuels, it's safe to assume that any Bitcoin mining operations in that region use those same energy sources. 

One of the most important results is Bitcoin's total energy use, a highly sought-after statistic by interest on both sides of the debate. It quotes that

“The Bitcoin mining Network uses approximately 0.05% of the total energy consumed globally. This strikes us as a small cost for a global monetary system, and on the global energy balance sheet, it amounts to a rounding error.”

The report unpacks how Bitcoins energy use is distributed across different regions, with the United States leading in crypto mining, since the China ban. Currently, it accounts for the most significant slice of the energy pie at around 42%. Kazakhstan comes in second place at 22%, and Canada is third with 11.5%. After crunching the numbers, the authors also found that China currently generates about 7% of Bitcoin’s hash rate, despite the country's crypto ban. 

 

Source: Cryptonews.com

Carbon Emissions

Another set of results relates to the carbon emissions associated with Bitcoin mining, and it starts with the statistic that made crypto news headlines. According to the author's analysis, the carbon emissions related to Bitcoin mining account for “less than 0.08% or less than 1/1000th of the global total.”  

To put things into context, this is only around 4X more than the carbon emitted to just create fiat currencies. It's less than a third of the carbon emitted by the gold industry, almost less than a third of the carbon emitted by the global banking system, and slightly less than the carbon emissions of dryers each year. 

Source: CoinShares Research (Jan 2022)

Now, these comparisons are in stark contrast to the comparisons you see in clickbait headlines about crypto mining and the climate. Coin Bureau explains the FUD and false claims that crypto is bad for the environment in the video below. 

 

Carbon Emissions On The Decline

The report indicates the decline in carbon emissions will be more aggressive in the Bitcoin mining industry due to the mobility of miners and their incentive to seek out the cheapest energy sources, which are almost always renewable. It allows miners to take advantage of cheap, newly constructed renewable energy generation faster than other industries.

“As of December 2021, we estimate the relative contributions of coal, gas, hydro, nuclear, and wind at 35%, 24%, 21%, 11%, and 4%, respectively. The remaining generation of 5% is a mixture of small amounts of oil, solar and other renewables, mainly geothermal.” 

This means that more than 1/3 of Bitcoin's energy comes from renewable energy sources. 

Image Source: FreePik

 

The US currently dominates the global Bitcoin hashrate, and in places like North Dakota, mining is solving flare gas emissions. In Wyoming, they focus on wind farms as an abundant renewable energy source. Solar panels are a prolific innovation to homes that reward homeowners and supplement veterans’ incomes.

As cited in the Bitcoin Mining Report, they expect Bitcoin miners to start consuming large amounts of wasted flare gas. If this becomes a large enough share of the mining energy input, the mining network could become carbon negative.

The authors point out that the best way to minimize Bitcoin mining emissions is for western governments to create a policy that attracts them to regions that use more renewable energy. Outright banning Bitcoin mining, punitive taxation, or oppressive regulation would just result in mining operations relocating to areas that use fossil fuels as their primary energy source. 

The only reason why Bitcoin miners are in those regions right now is that the governments provide massive subsidies to fossil fuel companies, which makes dirty energy artificially cheaper than clean energy. While western countries are not entirely free from fossil-fuel subsidies, they are much smaller than in countries such as China, Kazakhstan, and Iran, where coal, oil, and gas are all heavily subsidized by the state.

 

Image Source: TextileLearner.net

Carbon Credits For Bitcoin??

The authors then pivot to an interesting possibility of whether it would be financially feasible to offset bitcoin’s existing carbon emissions through the purchase of carbon credits. Carbon credits are essentially certificates given to companies by government authorities when they do something green, such as adding a solar panel to their facilities. 

Furthermore, the holders of the carbon credits can be traded. They're often purchased by companies that produce emissions to avoid emission sanctions, as one carbon credit gives its holder the right to emit one ton of carbon dioxide. Interestingly, Tesla makes most of its money from selling carbon credits it receives. 

Ironically, Tesla banned Bitcoin from being used to purchase its cars for being classed as environmentally unfriendly by erroneous sources, which up till now was speculative and arguably fear-mongering and profiteering. Think Al Gore.

Carbon credits are an interesting idea; however, the authors calculated and determined that the carbon output of Bitcoin mining could be offset at the cost of USD 200 per BTC. This works out to less than ½% of Bitcoin mining revenue, assuming an average price of $42K per Bitcoin. 

As stated in the report, 

Another interesting takeaway from the emissions figures is that they can be used to calculate the carbon offsetting cost of holding one bitcoin for one year. Assuming the cost of emissions is shared equally among all holders of bitcoin, at 18.9 million bitcoin outstanding, each bitcoin would require offsetting 2.2 tonnes of CO2 per year, or roughly the same as one return flight on Business class between New York to Tokyo.

 

Image Source: CoinShares.com

 

Report Wrap Up

The authors of The Bitcoin Mining Report conclude by emphatically stating,

In the grand scheme of things, the carbon emissions emitted by electricity providers supplying the Bitcoin mining network are inconsequential. At 0.08 % of global CO2e emissions, removing the entire mining network from global demand—and thereby depriving hundreds of millions of people of their only hope for a fair and accessible form of money—would not amount to anything more than a rounding error. 

They say that to provide its combined services of open peer-to-peer, objective, censorship-resistant, and trust minimized participation in a global monetary network, Bitcoin strictly requires a non-zero amount of input energy in perpetuity. The future magnitude of this requirement is unknown. In other words, the authors acknowledge that the energy needed to maintain the Bitcoin blockchain will continue to increase indefinitely until the last Bitcoin is mined. 

The authors also note that Bitcoin’s future energy use is irrelevant because almost every other industry will require more energy in the future as well. What's important is that this energy use doesn't involve any fossil fuels, to which the authors say, “Bitcoin will be 100% renewable, as soon as our electricity generation is 100% renewable.”

Currently, the vast majority of energy is used for mining new coins, but mining is programmatically preset to decay to zero over the next 100 years geometrically. Already by the decade of 2040, more than 99% of all bitcoins will have been mined. Once mining is effectively over, the vast majority of the energy requirement will result directly from market demand for Bitcoin transaction settlement through transaction fees offered to miners by consumers. 

They then conclude the report with,

“Our focus should be on building out renewable power generation, not on stifling the development of monetary technology. When analyzed over the long term and in the proper context, we believe that the emission costs of Bitcoin are dwarfed by its benefits. ” 

 

Image Source: Markethive.com

 

The True Nature Of Bitcoin

Bitcoin is more than a cryptocurrency. It's decentralized and the most secure payment network. Its security is made possible by the proof of work (POW) consensus mechanism. Also, it’s the most battle-tested Blockchain and considered the digital gold or store of value in which all cryptocurrencies are based, so Bitcoin is the ideal currency to hold. 

The Bitcoin Blockchain has its share of performance issues compared to the emerging Proof of Stake (POS) protocols, like Elrond and Cardano Blockchain Networks. However, going forward, some crypto projects such as Stacks are building a Smart Contract compatible layer for the Bitcoin Blockchain, and others like the Lightning Network are building seriously scalable payment systems. 

As it happens, institutional investors value security more than anything else. And one of the only things standing in the way of them and BTC are their environmental concerns, which will hopefully subdue as this groundbreaking report circulates.

There are decentralized ecosystems emerging in the cryptocurrency space in various industries including the social media and marketing spectrum that rely on credible, infallible Blockchain systems, be it POW or POS. As technologies advance, both protocols will offer an alternative financial system delivering financial freedom and sovereignty at minimal cost to the climate and surrounding environments. 

 

Source: Coinshares.com, Coinbureau.com

 

 

 

MARKETHIVE THE FUTURE OF ALL MEDIA

Innovations that will change the way we work and interact online. 

The Markethive Social Market Broadcasting Network becomes more prominent daily as the blockchain-driven ecosystem for entrepreneurs with a non-adversarial, bi-partisan free speech ethic and the collaborative culture we rarely see on social media platforms today. Even the newer acclaimed, free speech platforms are partisan to the left or right and deal with deplatforming and boycotts from payment providers.

It’s widely notorious that the actions of the tech giants have divided nations and are the source of countless societal harms, including rampant censorship, promoting violent extremism, spreading false information, and unfairly stamping out its competition. 

Instead of improving the user experience to one that users would welcome, legacy big tech is somewhat distracted by its self-induced problems. It’s now under scrutiny by government policymakers with the overall consensus that something should be done to reign in the centralized power or structurally break up the technocracy. 

Facebook is focused on updating the internet with new regulations to appease critics and leverage its Oversight Board to circumvent this. At the same time, Twitter grapples with the idea of integrating a more decentralized approach to the platform, explicitly giving users an algorithmic choice by opening up its news feed to third-party algorithms selected by its users. This could undoubtedly customize the user experience but still be under a central authority. 

 Markethive Goes Next Level

Known for its evolutionary and innovative ethos, Markethive continues to expand its decentralized “all-in-one” platform with the development of a unique news feed interface that completely embodies the user experience (UX) in the framework of “don’t make me think.” A concept brought to light by author Steve Krug, a usability expert, cites that usability is fundamentally about human psychology. 

The book “Don’t Make Me Think” was first written in 2000 and revised in 2013. Since the turn of the century, technology has changed rapidly, but the principles are the same as before. Something is only usable if an average person can figure out how to use it to achieve an outcome. Krug breaks this down into three laws:

 

Image Source: Reading Graphics

Key Quote

“Usability is about people and how they understand and use things, not about technology.

…while technology often changes quickly, people change very slowly.”

Once it is understood how the human brain works, these same insights can continue to be applied even as technology and landscapes evolve. So usability is not just about technology; it’s about understanding how people think and behave to build better things, giving the user a more seamless and more straightforward experience when navigating.

Unlike the social media giants, which only have one primary news feed algorithmically set by the central authorities, Markethive is integrating four news feeds to accommodate the multi-functional platform within the Markethive ecosystem. 

The individual feeds are General, Video, Blogging, and Content Curation, and they are all accessible from the main page and can be algorithmically set by the individual user. The scope that Markethive has is enormous as it integrates all the vertical systems of the other platforms under one roof. 

 

Social + Video + Blogging + Marketing + Curation + Broadcasting + Affiliate + Gamification + Cottage Businesses = Markethive: A Powerful Blockchain-driven Ecosystem 

There is nothing out there like Markethive. We are an Inbound Marketing (automated marketing platform) like Marketo, Paragon, and even the wannabee MLM Onpassive platform. We are like Youtube, Instagram, LinkedIn, Twitter, etc., but will be superior to these legacy Web 2 media when we release all the aspects and layout of Markethive 2.0. 

We have a dynamic social media interface and growing community with a strong collaborative ethos, with SaaS and broadcasting capabilities already operational. We are not waiting for the launch to access the services; they are already there for you to use to help you facilitate your business and increase your reach and following. 

Markethive is enhancing and bringing the platform into the future internet with our new technology and interfaces, but still in keeping with the human touch. The latest updates and integrations are explained in this article.

So What Else Is Coming? 

We will also be a search engine like DuckDuckGo, allowing you to determine your own algorithms to control the outcome. Our new Hosting and Domain Registry coming this year will enable your business to be sovereign as it’s hosted within the Markethive system, along with the opportunity to generate affiliate income.

The Markethive Hosting and Domain Website (NOT LIVE YET)

 

We will have a curation system like Scoop.it (https://www.scoop.it/topic/markethive), as well as a superior conference room like Google Meets (this is in the works) https://meet.google.com/mow-hwei-jsr, plus our own advertising services that you can sell for profit, and to make Markethive a complete ecosystem, we have our own coin, (HiveCoin) wallet, and exchange.

Scoop.it examples of Curation

 

Technology has advanced with Blockchain, and Crypto is becoming ubiquitous, giving rise to the decentralized, privacy, and autonomy components of social media. Something that the established dinosaurs would find near impossible to integrate at its highest level.  

Markethive has not only enjoyed longevity, but it can also integrate cutting-edge and unique systems. It is next-level, delivering every function and aspect available, fitting for the entrepreneur, business, and corporation. A clean design, not cluttered, intuitive for easy navigation, and simple to carry out tasks for all users on every level is crucial for website stickiness and the overall success of our entrepreneurial users.
 
 As quoted by CEO and Founder of Markethive, Thomas Prendergast,

“We are making major changes right now to the entire layout and aspects of the system. It’s a new look, with better navigation and an improved alert system. We are rebuilding the page-making system to be intuitive, inspired by Leadpages, all in preparation for the Wallet. 

All accounts (free and paid) will receive an email and a WordPress site integrated into the Markethive Page Making system. The domain for this will be hive.garden and all members will be assigned their username@hive.garden for POP email and username.hive.garden for your default website where you will have the option to have WordPress or a Markethive capture page assigned.

Understand this major uplifting has been in the works for several months, and we are close to its completion. We have already launched The Boost and The Wheel Of Fortune. The Premium Upgrade will launch once the wallet is integrated and the ability to upgrade to Entrepreneur One will not be available.”

 

The current Entrepreneur One members will continue to enjoy the benefits of the upgrade, including receiving a 1/10th ILP for every year their subscription is active for up to ten years. The benefits are explained further in this article.  https://markethive.com/group/marketingdept/blog/theentrepreneuroneilpspecial

 The New Main Page Interface Explained

The following images are a basic mockup or draft, subject to enhancements, to give you an idea of how the new main page will look with the various news feeds and menus. It is definitely something to look forward to upon its integration. 

Example of Main Page Interface 

 

The format is horizontal, not vertical, like many other websites making it more readable and less time-consuming in terms of navigation. The vertical side menus will be removed, along with the busy text in the blue bar. 

At the top of the main page are the Super Banners. This is prime real estate and specifically for Markethive, the company. Anyone else inside or outside of Markethive wanting to place a banner there will pay top dollar. The real estate below the blue bar is for the markethive community and placement of their banners.

Multiple Pulldown Menus 

Multiple pull-down menus will be replacing the side menus on the main news feed page and the profile page. These are now accessible on one page on the blue bar under Settings, Shopping Cart, and the Notifications bell icon also named Alerts Control. This allows you to configure the blue alerts bar and provides a click menu navigation. In other words, you choose what icons you would like to display. 

All the settings displayed that could only be accessed on the left of the profile page are now accessed on the main interface, including general profile page settings, payments, Vault, ILP purchases, login account, social accounts, and hive ranking. This makes it a lot easier to navigate and is much more intuitive. 

There is also a pull-down menu under Shopping Cart that displays the status of your cart (whether it’s empty or has items pending in it). 

The shopping cart menu takes you to the Markethive store and the Advertising services strictly for the Markethive Press Release program, the Boost, social network broadcasting, digital banner advertising, and video advertising. You will find these services in this pull-down menu as they are introduced. 

A series of upgrades will also be displayed under the shopping cart. Currently, there is the E1 upgrade and upcoming Premium Upgrade to be integrated upon the launch of our internal wallet. There will ultimately be multiple levels of premium upgrades which will all be located in the shopping cart pull-down menu. 

For the purpose of this article, the image below displays all pull-down menus opened and can be accessed by clicking on their respective icon. 

 
Image: Example of Pull-Down Menus

 
Combined News Feed – The New Innovation

Now for the pièce de résistance and Markethive’s claim to fame. The combined news feed interface is a first in the social media environment. It includes the four primary feeds being the general Newsfeed, Blog, Video, and Curation feed. 

So what’s the big deal about a news feed?

The news feed is the heart and lungs of Markethive, and everything around it is the bones or structure of Markethive. It all starts at the center, being the newsfeeds and works outwards and is the dashboard or control center, where every aspect of Markethive is easily accessible. 

The combined pulldown menu also includes the Groups feed, Campaigns, Games, Store, and Email feed, which you can set algorithmically. You choose what and who you want to see in your combined news feed. 

You can choose only to see what you’ve posted, select by geo-location, friends, Tube feed, Blog feed, Group feed, etc. You can access these configuration tools in the tray just above the HTML editor, housing the stats tools, tracking devices, posting tools, sorting and filtering tools, editing, and upload tools.  

Image: Example of Combined News Feed Menu

 
Upgraded associates will be able to post in a news feed with the ability to stylize text (bold, italics, text size, font type, hyperlinks) add embed videos and images, similar to the current blog editor. This will make your posts more dynamic and exciting.

Whatever task you do, you will access it from the combined feed pull-down menu. For example, if you want to upload a video in the Tube Feed, it will open up the tool page for you to upload it. 

You do not leave the main page for any task you perform. This is where you access all your interfaces. E.g., The video upload interface, the blogging platform, the curation control panel, etc. You will be able to add, edit and monitor everything you do right from the main page. 

Whatever you choose to see in your combined feed will be displayed: Videos from the Tube Feed, Blogs, Capture Pages, Groups feed, General postings, everything will be displayed on the page.  
 

Image: Example of Rich Text Editor and Combined Feed Interface
 
 

The Beauty Of Markethive 

Everything is at your fingertips on this one page, making it very intuitive and mobile-friendly. The dynamics will change completely, and you won’t have to navigate individual pages within the Markethive system. All configuration, filtering, and searching are done from the combined news feed interface. 

The new interface will be instantaneous and straightforward to post any content remotely, whether blogs, videos, or general newsfeed posts. Markethive will be infiltrating every corner of the internet universe and become a household name.  

The whole interface is streamlined and purposely created horizontally with minimal to no advertising, so it is not overwhelming for the average and new user. So many websites, blogs, and digital media articles are cluttered with vertical side columns and advertisements, making it annoying and virtually impossible to read or comment on the site. 

Markethive has always been a pioneer and ahead of the curve, initiating a social network before social media became a thing, starting with Veretekk in the nineties. It is a Divine inspiration, a vision that is coming to light. It’s one of integrity and can command authority with its clean, polished new look and navigation.  

So what we have here is an outline of what’s coming in Markethive. There’s more to this unprecedented, monolithic concept and project. All updates and orchestrations are discussed at the Markethive meetings every Sunday at 10 am Mountain Time. (MST)  

You can keep yourself up to date with the latest news and developments of Markethive as they happen. To access the meeting room, go to the Calendar and click on the link provided. See you there! 

So what time is it in your part of the world? Go here to find out. The doors to the meeting room are closed 5 minutes after commencement, and latecomers are denied access, so get there early. 

 

 
 

Thank you to the Founders Thomas and Annette for their insights, inspiration, and dedication to bring the next generation social market broadcasting platform far removed from the chaos of the legacy tech giants.

Our appreciation and gratitude to the team of engineers at Markethive working tirelessly to deliver a completely decentralized ecosystem, impervious to the oppressive forces that have subjugated humanity.  

Thomas affirms that we are building an orchestra consisting of many moving parts that will harmonize, catering to everything we do online and facilitating bringing in the next 100 million people into Markethive this year.  

Our system is based on Ethics, Gospel, and the Holy Spirit and operates differently from other media platforms because it runs on a heavenly frequency. Welcome aboard to all, and be ready for an exciting transition and transformation of Markethive. 
 

 

Also published @ Before It’s News https://beforeitsnews.com/2022/02/markethive-the-future-of-all-media-3022.html

 

From ARPANET To INTERNET & BEYOND

Markethive Leading The Way In Web 3 Social & Market Media

The term Web 3.0 with the benefits of its 3rd generation technology is widely considered to be the future of the internet and to break away from the centralized status quo. However, there have been heated debates of late with some claiming it will still be controlled by the venture capitalists and whales. They argue that the tech is still relatively centralized, slow, and unable to reach mass adoption. 

One of the few is the dubious Jack Dorsey, CEO of Twitter. You have to wonder what his motivation was for tweeting his opinion… 

Image source: Twitter

Dorsey’s tweet received a lot of attention, positive and negative. A lot of people in the Etherium and Defi communities bashed him for it because they viewed it as criticism aimed at Ethereum. Some also pointed out that Twitter's centralization and censorship are exactly why they're so bullish on Web 3. There are also a lot of VCS, Founders, and other crypto personalities who took issue with Jack’s statement.

In actuality, Web 3 is our best hope of breaking free from the centralized status quo and overlords. A reality where our data is harvested for profit by companies that willingly pull our access at a moment’s notice. Let’s revisit some of the histories of how the internet came to be and where we are today.

In The Beginning, The Internet Was Decentralized. 
Let’s go back in time to put it in perspective. The original internet plan was not to be centralized. In 1969, ARPANET was a project by the US Department of Defense to establish a computer data communications network that could withstand unforeseen events and disasters. Therefore, it must be decentralized so that if one part of the system fails, the rest can still function. It must be able to communicate using peer-to-peer interconnectivity without relying on a single computer. 

Initially, ARPANET benefited not just the military but also research institutes, so it had its origins in the academic community though it was a military project. The system slowly evolved, so it was not immediately adopted for commercial use. Instead, in the early 1980s, it was adopted by universities aimed at promoting research and education and was called the NSFNET project. 

The best way to do this was to use an interconnected network of computers that can provide a way to collaborate and share information. So the internet services were built on open protocols controlled by the internet community. There was no central authority, and every computer was independent of the other. If one server is not working, users can always dial up another server. 

By today’s standards, the organization of this protocol could be viewed as chaotic and inconvenient however it was decentralized. It was primarily unchartered and empty until the 1990s, before the technology pioneered by the ARPANET project became the backbone of the internet. A new galaxy of communication is ready to be explored and populated. 

Eventually, ARPANET and NSFNET would be decommissioned, thus paving the way for the commercialization of the internet. Notably, the term “Internet” was brought about by a blend of the words “interconnected” and “network” and thereby called the Internet ever since. 

Image source Hackernoon

 

From The ARPANET To The Internet. Web 1.0
In the ‘90s, Sir Tim Berners-Lee is credited with developing a linked system that became the World Wide Web with HTML and access to resources called websites. This allowed for the retrieval of all that information across the web. Web 1.0 is also called the static web and did have its limitations. It wasn’t user-friendly and was a one-way information highway. 

No algorithms could dynamically serve pages, and the web pages themselves were also elementary.

The functions that served the most purpose were email or real-time retrieval of news and the like. Users could not interact with the web pages, and applications were unheard of, so it was a Read-only internet. 

 

Web 2.0 – The Social And Centralized Internet
Around 2005 came the concept of Web 2. We saw a paradigm shift in how we used websites during this period through advancements in web technologies such as JavaScript, CSS, and HTML5. Interactive and rich websites started to increase. These web platforms would allow the user to generate their own content and be a much larger part of these websites as a whole. 

If Web 1 was a Read-only web, then Web 2 can be thought of as a Read-Write, where the users on these platforms were also fundamental to the content. As commercial interests grew along with internet use, many platforms emerged that became known as social media, and it was driven by innovations in technology, such as mobile phone apps. 

The emergence of cloud computing was also a virtual collection of servers that provided services to users. Companies that have flourished in the Web 2 environment include Facebook, now Meta, Google, YouTube, Twitter, Uber, etc.

These companies have generated trillions of dollars of value for their shareholders by effectively leveraging user data from billions of people worldwide. They've transformed the way we live our lives, from the way we order food to the way we hail rides, from the way we keep in touch to the way we pay online.

Unfortunately, society, by and large, has become overly dependent on these platforms, and when they move from “attract” to “extract,” their users, both individuals or businesses, suffer through lack of privacy and autonomy or platform risk, meaning, the platform has the power to destroy your business running on it. This conglomerate is predominantly a trillion-dollar digital advertising business, with ‘we the users’ as the product that fuels this machine. 

Essentially, Web 2 is owned by these companies, and they control the platforms and are the gatekeepers of all information. It is inherently centralized with these companies creating walled gardens of value that we can't participate in, and this is where Web 3 comes in.

Image source Hackernoon

 

So, How Centralized Is Web 2?
In order to best understand why Web 3 has so much potential, we have first to appreciate just how centralized Web 2 actually is. Currently, the web functions on what is called the client-server model. More specifically, when you want to visit a website, open a mobile app, or watch a video, you'll be requesting information from one centralized source. This is a server, and these are usually controlled by the company whose service you're using or the website you're visiting. 

This Server also contains all of the required data to make the website or service run. Data that is often comprised of our data and a centralized server controls even the process of finding that server. These are DNS or domain name service servers that act as the backbone for domain routing on the internet. Essentially, when you type a domain into your browser, the request is sent to a DNS server that will then tell your computer exactly where this information can be found. 

These DNS servers are usually controlled by another centralized group of companies including the likes of Google, AWS, Cloudflare, etc. What this means is that the internet is inherently centralized; everything that you do online, can effectively be limited by those who control those services. 

There are problems associated with this because it has a centralized point of failure; Centralized servers can go down, sometimes for extended periods of time. And in those times people can't access that data. There's not really much that you can do, given that these centralized servers contain all that user data and contain the code, which interacts with user clients, and those servers are incredibly lucrative to hack. Data theft is big business in cybercrime circles. 

You need to trust companies like Amazon that have your personal data to keep it safe. It’s a “trusted” system. There is also the risk that the data being sent to your devices could be compromised through software supply chain hacks. Hackers gain access to the provider’s server upstream of the software supply chain and insert malicious code. That's then passed down along the chain because the other participants trust that the software is safe. 

Then when it comes to the issue around the permissioned nature of Web 2, it's become a real issue when you're using services like Facebook, Instagram, Twitter, YouTube, PayPal, etc. You're only allowed to use them because they let you. 

They can restrict your use, or boot you off the platform at a moment's notice, without any explanation. De platforming has been going on for years now and there is very little that can be done by the user. 
 
The Web 2 social media and many Fortune 500 companies have developed their entire business models around monetizing our data. This value is not shared unless you're a shareholder. This centralization of control and value is the reason why people are dying for an alternative. 

 

Enter Web 3.0
Web 3.0 is the next generation of the internet which people envision will be more decentralized and permissionless. One that's built on decentralized protocols, where users help with content creation and the governance of the web itself. They also have the ability to own a part of the network, so you can think of it as a Read-Write-Own Internet. 

There are already several technologies that could serve as the backbone for a Web 3 world. Most point to blockchains like Elrond, Cardano, or Ethereum, for example, but other distributed technologies like  IPFS can also be used to decentralize networks. 

Thousands of dApps (decentralized applications) are already being built in the Web 3 environment. These often include native tokens to add value to the application to those who hold the tokens. These native crypto assets allow those who participate in the network to share in the value generated from it. 

Web 3 promises a decentralized alternative where we are all users, owners, and developers. This quote from Fabric Ventures sums it up beautifully, 

“Web 3.0 enables a future where distributed users and machines are able to interact with data, value, and other counterparties via a substrate of peer-to-peer networks without the need for third parties—the result: a composable human-centric & privacy-preserving computing fabric for the next wave of the web.”

 

Web 2 Verses Web 3
The main difference between Web 3 and the Web 2 era is that in Web 3, there are no centralized databases where you store the application state. In the case of blockchains, it's stored on a decentralized ledger where distributed nodes all agree on the state of the network. This article explains the architecture of Web 3 in more depth. 

The takeaway from Web 3 architecture is that the back-end infrastructure is inherently decentralized across nodes with the singular purpose of maintaining the network. If one of these nodes goes down, the network still runs. If one of these nodes is hacked, it doesn't affect the state or security of the broader network. 

Moreover, a distributed network is cryptographically secure. There is no way someone can underhandedly alter a smart contract code unless they have the keys. Any updates to the smart contract are time-stamped and immutably stored on the blockchain forever. 

The cryptographically secure nature of a decentralized blockchain means that you don't have to trust anyone with your data. You don't have to trust that they keep their service safe and that their apps won't have malicious components. The code is fully open-source and auditable for everyone to see. 

Furthermore, there is the ability to build on top and evolve to something better, as it is all open-source, with no need for third-party developer API access. What gets people so passionate about Web 3 is that you can shape the direction of these applications, and you can share in their success. Economically, Web 3 allows a system to flourish where participants can work together towards a common goal – network growth and token appreciation. 

There are pros and cons to a centralized Internet. The pros are that it has allowed the internet to expand due to the services provided by the ISP’s and also the popularity of social media platforms, convenience, and usability. 

Web 2 has transformed the way we view the world, but the cons are that it’s also enslaved us to a system that enriches a chosen few. Since it has been centralized, there is not much choice for users. A user’s access to the internet is at the mercy of their provider and the platform. This is a point of failure, not something the original internet was designed for.

 

Addressing Venture Capitalist Concerns. 
Let’s alleviate Jack Dorsey's concerns about VC money. The most reputable projects will have some reasonably strong vesting schedules for these tokens to make sure that these early-stage investors don't just dump the tokens on the open market. It serves neither the project nor the VC's purposes to trash the reputation of one of their investments by dumping on retail. 

And then, even when these tokens are unlocked, and these VCs can vote on protocol governance, they tend to have the same long-term goals as the retail investors who invest in the tokens and protocols. They want a long-term appreciation of the value of the tokens, and if they push through controversial proposals that drive down the adoption and value of the protocol, this will damage their long-term interests. 

The beauty is that everyone can share in the incentives, not just venture capitalists or shareholders. Decentralized technologies will trump the centralized status quo, whether in the case of finance with crypto or the entire internet with web 3, including social media and market networks. When a community comes together to build something that they all benefit from, it's destined to succeed.

 

Who Is Genuinely Challenging The Status Quo?
Markethive, the blockchain-driven ecosystem for entrepreneurs, has already successfully bypassed the centralized web services, like AWS and Microsoft, and operates on its own cloud system. The new login system Markethive has developed relinquished the need for 3rd party APIs that are potential vulnerabilities in Web 2 and threaten our freedoms. 

Currently, Markethive is expanding its cloud system, called Mining Hives, worldwide. This means all data about Markethive and its users will not be stored on servers owned and controlled by a centralized entity. 

Instead, it is a distributed database on the Markethive Blockchain with no single point of failure and no internet disruption or censoring by dictatorial authorities who may decide to shut off the internet. 

Web 3 gives us a better chance at building a more inclusive internet that respects all who use it. Decentralized networks can win the third era of the internet for the same reason they won the first era: by winning the hearts and minds of entrepreneurs and developers.

Web 3 is an opportunity to distribute the wealth amongst the rest of us generally paid only to shareholders. Markethive stands tall and is dedicated to delivering the emerging environment of Web 3 to its community; one of self and financial sovereignty.

Instead of acquiring a few significant venture capital investments, Markethive has made it possible for the community to obtain a stake in the company. Known as a convertible note, a small loan called an ILP is executed as a smart contract and acquired by upgrading to the early adopters' loyalty program, Entrepreneur One, for as little as $100 per month. 

For a limited time, there is a lucrative advantage to supporting Markethive with the E1 Upgrade, explained further in this blog by the CEO of Markethive. 

Markethive and Markethive Media is an international company that represents everyone and will play a prominent role in the re-invention of the social media and marketing space to preserve and nurture the entrepreneurial spirit. It’s empowering the community by integrating Blockchain and cryptocurrency in a decentralized environment. Markethive has no agenda, and its heart and soul are freedom, liberty, financial sovereignty, and entrepreneurialism. 

 

 

 

Felix Crisan – Head Of Research For The Elrond Network And Renegade Thinker For Technical Solutions

IT Expert, Architect, Entrepreneur, Educator, with a Renegade Mindset  

 

Elrond's Head Of Research, Felix Crisan, is another feather in the cap of the evolving Romania-based Blockchain company. He is an integral part of a specialized team of hard-core engineers, entrepreneurs, and researchers, who have successfully redesigned the Blockchain infrastructure. 

Collectively, the team, including Co-founders, CIO, Lucian Mincu, and COO, Lucian Todea, has significant technical experience at Microsoft, Google, Intel, NTT DATA, 2 PhDs in CS & AI, multiple math, CS and AI, Olympiad champions, and blockchain backgrounds, with the CEO of Elrond, Beniamin Mincu previously involved with the NEM core team. In this article, Felix Crisan is center stage.

Elrond is setting new standards for performance in the Blockchain space with an innovative network scaling technology called Sharding, but with a difference. Sharding is a well-known concept for horizontal partitioning of databases which several companies are applying it to public Blockchains to increase their throughput capacity.

Elrond has gone one better by developing a cutting-edge form of state sharding named Adaptive State Sharding. It enables the network to rival centralized cloud networks without sacrificing blockchains' security and decentralization advantages. This, along with their Secure Proof of Stake consensus, makes Elrond a leader in the next generation of high-throughput Smart Contract platforms flourishing in the Blockchain ecosystem. 

 

About Felix Crisan 

Romanian-born Felix Crisan has a working experience of 20 years; all spent in Information Technology areas. Felix has been involved in many industries and in just as many roles, initially starting with being a researcher in quantitative aspects of social sciences. 

He was also a developer for "off the shelf" software and later games, then a solution consultant for major projects in big banks and telecom groups. He is an architect, supervising development and operations for the services he co-founded as an entrepreneur. These services ended up being market leaders in the territories where they are operated. 

 

Background And Career 

Felix attended the University of Bucharest, majoring in Computer Science and Mathematics in 1992, for five years. He went on to become a Computer Analyst and Chief Developer in 1997 at Cybersoft for three years.

In the next few years, he devoted his time to IBM as a Technical Solution Architect and Hewlett-Packard as a Telecom Industry Consultant. He found his entrepreneurial prowess in 2003 when he saw an opportunity to build an online and offline payment system and co-founded Netopia Payments, which operates the most prominent digital payment platform in Romania and the most extensive SMS aggregating service – web2sms.

The intersection of payments, big data, and distributed systems led him to Bitcoin and the Blockchain industry, where he Co-founded BTKO in 2015, Romania's first Bitcoin exchange platform. 

In his spare time, he teaches various topics, from fundamental web development techniques to big data concepts and technologies, including machine learning and artificial intelligence algorithms. Felix is also a Bitcoin Lightning Network contributor and organizer of Blockchain BigData meetups in Bucharest. 

 

Image source: Virtual Blockchain Summit. 

 

Felix Has Many Strings To His Bow

Apart from being Head of Research for Elrond, Felix is also currently the Co-founder and CTO of Netopia, mobilPay. Since April 2021, he has been co-founder and CTO of Ronin, a Bucharest-based Blockchain crowdfunding platform officially launched in December 2021 and accessible to small investors in Europe. The company's end goal is to be bureaucracy-free. 

In all of Felix's undertakings, it's clear that his solution-oriented concepts and input are designed with a humanitarian approach. He is passionate about new and innovative technologies and how they can enhance the lives of individuals and companies alike. 

With his fiery tweets regarding burning issues and aversion to the status quo, bankers and governments, he is doing his bit to help educate and improve the current state of the world. His Twitter feed indeed reveals that, tweeting:

So much double standards around CBDC initiatives: with "the others" it can be used to "…monitor users and exert control over global currency". When "our guys" are doing it, it's a fine piece of non-intrusive, democratic tech.

“The root and source of all monetary evil is the government’s monopoly on money,” said no banker ever. But Hayek did.

Who is Hayek? Hayek was a prominent social theorist and political philosopher of the 20th century, devoted to the free market. Friedrich Hayek believed that the prosperity of society was driven by creativity, entrepreneurship, and innovation, which were possible only in a society with free markets. In his view, markets create price signals and incentives to adapt and align the economy efficiently.

Image source: Twitter 

 

To understand more about what Felix Crisan is passionate about, watch this video where he discusses a wide range of topics, including adoption in Romania, custodial services and their disadvantages, the impact crypto will have on employment and value transfer, and China's crackdown on miners, the CBDC Yuan, regulatory burdens for Romanian crypto startups and more. 

 

Elrond Initiates Web3 Payment Revolution

Elrond's latest partnership with Utrust (a leading payment services provider) is another indication of their commitment and passion for leading in the digital transformation curve and easing the burden of businesses and existing payment methods. 

Dubbed "Merchant Yield," the power comes from its simplicity – accept crypto, and get paid in fiat. Any business can become a Web 3 Merchant and benefit as this will transform payment processing services from a cost for merchants into an income stream.

Image source: Twitter 

 

A Blessing For Humanity

With Elrond's consistent activity and the team's unwavering dedication, we can be assured they are in it for the long game and for the right reasons. A few benevolent companies are rising up and will not be intimidated by the elite corporations so desperately trying to control everything and everyone. 

Markethive aligns itself very closely with the ethos of Elrond. They are two separate entities working in synergy and independent of evil forces that have plagued the lives of the individuals, entrepreneurs, and companies that are locked into them. 

Elrond takes care of the decentralized Internet-scale Blockchain and financial operating system, the gateway for all businesses and citizens to reclaim their sovereignty and financial independence. 

Elrond is a complete rethinking of public blockchain infrastructure, specifically designed to be secure, efficient, scalable, and interoperable. Elrond's main contribution rests on two cornerstone building blocks that ensure long-term security and distributed fairness.

 

 

Markethive takes care of the decentralized social media, marketing, broadcasting network, and community. It is a place where privacy, freedom of speech, and autonomy are paramount. There is no agenda, no divisiveness, just acceptance. 

Markethive is a place where entrepreneurs can thrive, and individuals can feel a sense of belonging. It is a platform with the inbuilt opportunity for financial sovereignty, all without fear of being deplatformed, censored, or ridiculed.

We pay homage to the architects and engineers of these humanitarian projects that stand up in the face of tyranny and make it possible for every soul to have a haven and faith for a better, more sovereign future. 

It's not enough these days to be a critical thinker – one must be a renegade thinker to resist and rise above this unconscionable world, be true to oneself and be instrumental in the success of others.

As Felix Crisan states in his tweet,
"Everyone's afraid of the World War 3, but few noticed the War Web 3." 

 

 

References:
Elrond
Twitter
LinkedIn
Virtual Blockchain Summit 

 

 

 

FIRST IN 100% DECENTRALIZED SOCIAL MARKET MEDIA – GIANT BLOCKCHAIN CRYPTO PROJECT 

HVC is poised to triumph in the crypto economy.

Cryptocurrencies have many use cases. Some act as a store of value, others power blockchain to make it possible to create trustless digital contracts and permissionless decentralized applications. Some cryptocurrencies are pegged to fiat currency allowing for stable transfers of value, and some underpin protocols that offer decentralized data storage and video streaming. 

Each of these use cases requires a particular set of blockchain attributes and economic incentives. Many say that there is no single cryptocurrency project that can do it all; however, there is one that comes very close in a field that has been, for the most part, put in the too-hard basket by the majority. 

Who Dares Wins 

Markethive is a monolithic blockchain project currently operating as a social network, an entire inbound marketing platform with email, blogging, and digital media capabilities that broadcast to the vast internet. It’s a complete Market Network and the first of its kind. 

Markethive is predominantly a free system where users can access a platform that can cost more than $2,500 offered by other marketing platforms. There are, of course, upgrades that open up more tools and monetization opportunities, the first being the Entrepreneur One Loyalty Program, and coming soon is the Premium Upgrade. 

The many domains Markethive has and its autonomous cloud systems that ensure its sovereignty and longevity make it untouchable and immune from the tech giants’ rule and biased agender. But can still remotely infiltrate the social media platforms and reach the multitudes either locked in or looking for an alternative meritocratic medium.

In other words, wherever you go, Markethive is there, anywhere and everywhere, delivering its message via its community of entrepreneurs to a far-reaching audience. This next-generation social market media is poised in the wings, and when the time is right, it will emerge as a shining light to lift people up and bring financial sovereignty and hope in this gloomy and uncertain world.  

The video platform, conference rooms, the unique four specific news feeds currently in development, and many other projects and incentives add to the credibility and need for an ecosystem in the social media and digital marketing space. 

In 2018, Markethive released its coin, with the ticker symbol of MHV that enabled the distribution of the coin to the members within the Markethive system by way of infinity airdrops and subsequently a micropayment faucet. The coin is currently in the process of being labeled with a new name, HiveCoin, with the ticker symbol HVC. 

Now in the final stages of BETA, Markethive will officially launch with the release of its first wallet developed from scratch to service the community’s needs. This is Markethive’s internal web wallet, with the end goal of a wallet app accessible from your smartphone (external wallet) that includes built-in messaging, news feeds, e-commerce, conference rooms, etc., with the highest security measures. 

Meanwhile, the growing user base is accumulating their native coins, Hivecoin (HVC), in anticipation of the release when they transact using HVC within the Markethive system and externally.

What Sets The Markethive Coin (HVC) Apart?

The Markethive platform enables the users to earn HiveCoin cryptocurrency with everything they do and are paid for their loyalty. The Vault is an innovative concept that allows Markethive members to stake their coins, similar to a bank account. The more coins held in your vault, the higher the micropayments received, and then there’s the monthly interest paid to you based on the number of coins in your coin clip.

The company issues these micropayments, incentives, and rewards, not just the users, which is commonplace and the only form of payment in other crypto-based platforms. However, Markethive has a tipping protocol the people can utilize and substitutes the like button. 

It isn’t only a social media network or inbound marketing platform; it lends itself to the cottage industry concept allowing members to monetize the various initiatives Markethive is developing, starting the Banner Impressions Exchange. It’s also where entrepreneurs can facilitate and promote their personal businesses to a built-in audience as well as a springboard to the far regions of the internet. 

In Markethive’s all-encompassing ecosystem, the objective of the Markethive coin (HVC) is to be utilized as a form of payment rather than just selling it (pump and dump scenario). This gives a purpose and actual use case for HVC, equalizing the velocity and increasing coin value. 

Bitcoin has established itself as a store of value that affects the value of most other altcoins, albeit positively or negatively at any given time. However, if a coin or project’s use case and utility are credible, it can result in a parabolic shift, increasing in price, without riding on Bitcoin’s coattails. 

 

The Markethive Blockchain 

Markethive is currently situated on the Ethereum Blockchain while in BETA. However, Markethive aims to utilize a 3rd generation Blockchain developed by Cardano and Elrond. These Blockchain protocols have the advanced capabilities to produce the distributed database system Markethive requires. 

This ensures that all data that the extensive user base inherently creates in a social media environment is decentralized and safely integrated and stored on the blockchain, including all forms of content, videos, images, etc.

It is considered a  mammoth task for a blockchain and not conducive for an established social media platform like Facebook with its trillions upon trillions of data already in its system. Markethive conceived and initiated this blockchain protocol, making it easier to integrate. We just had to wait for the right technology to surface.  

Thanks to technology evolution, the Markethive social market network’s ability to build a massive database management blockchain can only be done on a 3rd generation blockchain platform like Cardano or Elrond. The Markethive blockchain will be forked off the 3rd generation blockchain, with HVC being a native token, a fungible multi-asset token. 

Native tokens represent value and act as an accounting unit, which can be used for payments and transactions and sent to an exchange address. Native means that these tokens are supported by the main chain’s accounting ledger without the need for additional smart contracts, as the ledger features built-in support to track ownership and transfer of more than one type of asset.

Ethereum blockchain issues tokens through a custom coded smart contract, which issues a non-native token. This token won't have all the advantages of Ethereum, and you have to pay for smart contract execution every time you move your token. This is why people complain about Ethereum fees being so high. It's not very efficient, leaving the door open for human error when coding smart contracts.

The low cost in transactional fees and the increased throughput into the thousands make the Cardano and Elrond blockchains a favorite in future generation blockchains. A sustainable, scalable financial operating system is becoming a reality. 

 

HiveCoin And ILP Smart Contracts – The Markethive Ecosystem

The Markethive  ILP smart contracts that the entrepreneurs have recognized as valuable and acquired will work seamlessly in the background on the Markethive blockchain forked off a 3rd generation blockchain. At the same time, the HiveCoin (HVC) will be used as a medium of exchange and will continually be circulating, earned, and accumulated by users within the Markethive economy.

It allows us to be completely decentralized financially with complete autonomy and protection of our intellectual property, ascertaining a viable and comprehensive ecosystem. This bodes exceptionally well for the Markethive ecosystem and benefits all participating in it. 

Essentially the Markethive ecosystem will have its own financial operating system within the new global financial operating system or future of internet money envisioned by the architects of the emerging technology, strides ahead of the initial technology of Bitcoin and Ethereum.  

Markethive – Staunch And Benevolent Vision

Markethive’s vision is a fully decentralized social network inbound marketing platform integrated and operated on a massively distributed database system, the internal giant blockchain, controlled by a smaller external blockchain Markethive’s Dapp wallet will utilize. 

This is a very advanced technology Markethive is integrating at which no other platform is doing or will attempt to do. It is a vast undertaking and needs to be done right so security is not compromised, on all levels, hence the methodical and time-consuming approach. Markethive is incomparable to any other media platform and, although touted it that couldn’t be done, is 90% done. 

It’s about looking after the community, the products and projects, the use, and the utility. Getting it right, being clever and evolutionary will pay huge dividends in the mid to long term for everyone in the ecosystem. Markethive is always focused on where we are going and why we are going there in the mission, giving economic sovereignty and identity to all, especially those that don’t have it. 

I know it’s hard to get your head around. Most people don’t comprehend what we have in our midst with Markethive but rest assured, this gigantic all-in-one platform current flying under the radar will be a life-changing positive force of how we work, earn, and socialize online. 

Come to our Sunday meetings at 10 am MST as we approach massive major upgrades and be the first to know about it. See and hear explanations, ask questions, and witness the ever-evolving technology and concepts of Markethive as we stay one step ahead of tyrannical technocrats.  The link to the meeting room is located in the Markethive Calendar. See ya there.

 

 

 

 

Inequality? Or Just A Fact Of Life?

How Do The Rich Get Even Richer? 

I think most of us have heard the saying, “the rich get richer, while the poor get poorer.” And the rich keep getting richer mainly because many are paying little in the way of taxes, if anything at all. How is this possible? What are the brazen loopholes and tricks that the 1% use to stay ahead and continue to gain wealth?   

Over the years, there has been much discussion, studies, and headlines around a billionaires tax and what it means for us non-billionaires. So why is there all this talk about billionaires and taxes in the US once again? 

Well, that's for two key reasons. Firstly, the policymakers in Washington are trying to go after this class of people with new tax proposals to help fund the American Families Plan.

The other fundamental reason it’s back in the spotlight is the amount of wealth accumulated over the last decade by specific individuals. And their wealth has been taxed at extraordinarily low rates. 

Image Source: Lisa Larson-Walker/ProPublica. 

Thanks to the Secret IRS files, the data was recently brought to light, essentially a leak of tax information that ProPublica covered in June. The leak contained vast troves of IRS data on the tax returns of thousands of the nation's wealthiest people covering more than 15 years. 

The Secret IRS Files

This report uncovered some of the most Illuminating stats of people like Mark Zuckerberg, Elon Musk, Jeff Bezos, Warren Buffett, etc. From 2014 to 2018, the 25 richest Americans increased their wealth by a collective $401 billion.

However, they only paid taxes of $13.6 billion during that period, equating to an effective rate of about 3.4%. Crazy, right? And if we were to drill down into some of the richest of this rich list, the numbers get even crazier. 

The illustration below shows the taxes paid on wealth growth for Buffett, Bezos, Bloomberg, and Musk. Buffett only paid an effective rate of 0.10%. Paying such low tax rates, it's no wonder that Buffett has become one of the biggest proponents of raising rates on the uber-wealthy like himself. 

Image Source: ProPublica

Now, you can see the effect of rates is 0.98%. 1.30% and 3.27% for Bezos, Bloomberg, and Musk, respectively. 

Another interesting graphic from this report is the one below.  It compares wealth growth and taxes paid by Bezos and the average American family. That noticeable dip on the household graph is that during the 2008 recession, many families lost their homes, where the bulk of their assets were. Bezos mostly owned stock, so he escaped any foreclosure. 

Image Source: ProPublica

The point here is not to shame these billionaires, as they have built successful companies, and capitalism rewards risk-takers. Moreover, it's also worth pointing out that all these folks have been paying what is legally owed. 

They've been doing what any rational person would be, using the tax code to their advantage. But this report highlights that the burden of proportional tax is borne much harder by those less well-off. And the reason for that is because of that same tax code.

 

The Enigmatic Codes

So let's take a closer look into these complex codes. Before we can delve into the specific tactics used by the rich, we have to understand precisely how most of them make their money. That's because the way that they make money will impact the type of taxes they'll pay. 

Most people will pay an income tax on their income which is mostly your primary source of income. In the case of most of society, this is their salary or wage. This income is taxed at different rates and goes up to 37%  at the US Federal level for the highest tax bracket. 

The examples used are from US taxes. Although the practice is broadly the same in other countries, This income tax is usually hard to avoid, as it's taxed when it's earned, and in many cases, taken out of your paycheck. 

However, when it comes to the uber-rich, they own assets that are taxed as a capital gain only when they appreciate. Notably, long-term capital gains tax for assets held for more than a year is much lower than income tax. 

For example, the top tax rate for capital gains in the US is 23.8%, which is much lower than the maximum rate on ordinary income. Based on the raw percentage, that would be the same rate of tax paid by someone who earns between $86k and $164k. So, you can now see why so many of these billionaire founders of companies choose to take token salaries.

Bezos earns a measly $80k, and Steve Jobs famously took a one-dollar salary. Mark Zuckerberg and Larry Ellison have followed suit. By doing this, they're avoiding having to pay any income taxes at all. They are taking stock and options on a stock that will only be taxed at the capital gains rate, over 13% lower than they would have paid, should they have opted to take income. 

But the critical point is this capital gains tax is only due to being paid once the gain is realized, in other words, sold. They are not obligated to make this sale in any way, shape, or form. They can hold on to these assets for a lifetime and never pay tax on them, and that is precisely what most of them do. 

So, how can these guys afford to live without realizing those gains? There’s a common misconception that wealthy people try to avoid debt, and it’s actually quite the opposite. They are among the most prolific users, and they do it in ingenious and efficient ways. One of these is borrowing against their assets and living off borrowed money. They're using their vast assets as collateral to take out debt. 

Buy Borrow Die Tactic

They’re doing this because they don't have to sell those assets and realize that gain, so they can avoid paying any taxes on the rapid appreciation in their wealth and still live like kings. This self-explanatory tactic is called, Buy, Borrow, Die. 

In a nutshell, they accumulate valuable assets that can be used as collateral assets such as stocks, bonds, real estate, art, etc. Then once they have these assets, they move on to the next step, looking to borrow cash using the assets as collateral. Then, of course, the inevitable happens, and they leave their fortune to their heirs. 

The first two steps may sound similar to a home equity line of credit, but it's much more favorable than that. We usually have pretty onerous terms when we apply to get credit and use our house as collateral. We have higher interest rates, and the amount of credit we get on our homes is limited. 

However, if you offer a bank highly liquid securities as collateral, you can get an absolute bargain. According to this piece in the Wall Street Journal, some of these lenders don't even need credit reports. Goldman Sachs’s private bank has even offered securities-based loans on anything from $75k to $25 million, with no personal financial statements, tax returns, or paper applications. 

In terms of interest rates, Merrill Lynch quotes 3.2% for those with assets of over $1 million and a low 0.87% for those with assets of over $100 million. Those are rates of interest and terms that we could only dream about. Then once they have this cash, they can do whatever they want with it. 

Yes, they have to pay interest, but it's trivial. Moreover, the value of their assets usually appreciates more than the interest rate. This is termed Positive Carry, where they end up better off than before. 

But the real kicker is that interest on loans is tax-deductible. These interest payments can be used to offset their already low tax bill. And, of course, they don't really ever have to pay this off. The banks are okay with rolling it over into perpetuity. 

You get to live your best life and still retain the upside on all those assets. You see, it benefits the banks to have such high-value collateral. It's easy to liquidate, unlike houses, and the bank itself can earn high returns on those assets. It’s the rehypothecation process, and most of the nearly 1000 wealthiest Americans use this tactic. 

For example, Elon Musk, and cable billionaire, John Malone have pledged $150 billion of their stock for loans. There is the risk that the stock collateral falls in price and that these billionaires will get a margin call. Still, these assets generally appreciate, especially with all that money printing going on at the FED. 

Image Source: Tenor. Funarg

Now, there's a lot of accumulated capital gains sitting out there, and by some estimates, it's as large as $5 trillion. This wealth has never been taxed and never will be taxed in some cases. That's because of the final step required of these billionaires, which is to die. 

When these billionaires with so much wealth eventually die, they leave that wealth to their heirs. They may have outstanding loans that these heirs then pay off; however, they keep the assets. These assets may incur an estate tax, but several strategies around gifting, donations, and charitable foundations lessen the burden, but that's irrelevant when considering that these heirs won't have to pay those accumulated unrealized capital gains. 

It is all thanks to something called the Step-Up in Basis. Essentially, when people die and their heirs inherit their fortune, the “cost” of the investment in the eyes of the IRS is the value of the asset that they received. That makes the asset free from any capital gains tax. If or when the asset appreciates again in value, the tax payable is only the difference, not the original price.

This is how some family dynasties have held onto their wealth for generations. They can pay legions of estate planners and accountants to structure the most sophisticated of vehicles that are beyond the reach of us mere mortals. 

 

The Ongoing Debate

Many progressive politicians looked upon these tax strategies for the elite rich with some indignation. They are now at the forefront of a debate around billionaire taxes in the US. A proposal by the Biden Administration plans to come after the unrealized gains of assets held by wealthy individuals to help fund the massive social spending and climate bill. 

Irrespective of what the bill will finally contain, it's clear that part of the effort to pay for it involves taxing wealthy individuals. For example, back in May, the initial target of the bill was the Capital Gains Tax rate. 

As they were aware of the fact that CGT was much lower than income taxes, the Democrats proposed increasing the top rate for CGT to 39.6%. If you include the Medicare surtax, it will be 43.4%, with some state taxes increasing those numbers. 

This proposal was a tough sell as it applied to anyone with over $1million in income, which is a much larger subset of people than just billionaires, so that was overturned. The Biden White House returned with the proposal to tax the unrealized capital gains of some of the wealthiest Americans, a much smaller subset of around a thousand people.  

That didn’t go down too well either, as it sounded like a wealth tax, and in fact, that’s how it was marketed to some progressives. Janet Yellen explained that it was “merely a capital gains tax on liquid assets held by extremely wealthy individual billionaires. I wouldn't call it a wealth tax.”  

 

The Terminology Not The Real Issue

Whatever they want to call it, it is clearly a tax designed to go after the wealthy for their unrealized gains, a tax that many legal Scholars said may even be unconstitutional. But it's not the terminology that was controversial; it’s the whole concept itself. Who would determine whether an asset was sufficiently liquid? Where do you draw the line?

And if you do draw the line, would this discriminate against some billionaires in favor of others? Would those billionaires who have most of their wealth in stock have to pay that unrealized gain tax, while others who own land don't?

What if these billionaires have to pay that tax in one year on a Gain, but the following year, there's a loss? Shouldn’t they be entitled to a tax refund on the back of that loss? Will the IRS pay that out? 

What if some of the most ultra-wealthy have to sell their holdings to pay these taxes? What impact could that have on the broader market? Assuming someone like Elon Musk or Jeff Bezos had to sell tens of billions worth of stock in the companies they own, would that not harm the stock market? The same stock market that millions of middle-class Americans are invested in with their 401ks. All of that, for a mere potential tax benefit of $250 billion. 

In response to the above questions, the answer lies in the evidence of how these wealth taxes have worked previously in Europe. In 1990, twelve European countries had a wealth tax, and however, there is only four today. One of the most recent casualties of the wealth tax was France which scrapped it in 2017.

This has provided a practical case study to analyze the real effects of these wealth taxes. In France’s case, since the 1980s, it has had an annual wealth tax on all those individuals who had over 1.3 million euros in assets. 

The first and most obvious impact of this wealth tax was that it drove the billionaires out. There was an exodus of wealthy people from France when it was in place, and because billionaires are the people who have the most means to move their tax domicile, they can easily move to more friendly regimes. By the prime minister's estimate, some 60,000 people with 35 billion euros worth of assets left between 2000 and 2016. 

Furthermore, the wealth tax was tough to enforce and costly. According to French Economist Eric Pichet, the cost of administering the tax was twice as much as was brought in. The country's fiscal budget was not only worse off than if it hadn't gone after this tax, but it now had even fewer billionaires to tax in the first place. 

Source: The Economic Consequences of the French Wealth Tax

Many other countries in Europe came to the same conclusion – the administrative burden just didn't make much sense. There were so many exemptions and loopholes that the rich could almost wholly avoid it. Then, of course, there was the impact this had on general Investments. 

Despite what most people tend to think about billionaires, their Investments do help to fuel innovation and economic growth. This was precisely the reason given by the Austrian government when it eliminated its tax, and it placed an “economic burden on Austrian Enterprises.” Switzerland also illustrates the potential drawbacks of a wealth tax in this article. 

Consequently,  Europe got a real-life practical example of the Laffer Curve. This well-known economic theory shows the decreasing marginal returns of taxes, and you get to a point where increasing taxes brings in even less revenue. 

Image Source: Fee.org.The Laffer Curve

 

Closing Thoughts

Now we’re faced with the pandemic that destroyed our economies and pushed millions into unemployment, but the rich got even richer during this time. Not only that, but they managed to accumulate most of that wealth without having to pay their fair share of tax on it. 

Naturally, this has led to a backlash from the populace. It feels just so inherently wrong that Warren Buffett pays 0.10% on his taxes, while his secretary pays over 37%. But to Warren's credit, he has been the one to point out this disparity. 

However, having said all of that, the alternatives don't sound too appealing either. Taxing unrealized gains is a recipe for potential disaster that could bog the IRS down for years. A proposal that the rich would fight tooth and nail and which could be proven to be unconstitutional. 

General wealth taxes have also been highly ineffective when implemented in European countries. Their impact has made governments and citizens poorer, while the rich simply migrate to other more favorable jurisdictions and enjoy their wealth there instead.

Some argue that we shouldn't be taxing success. If you disincentivize someone enough, then they will reduce their economic output. (That's the Laffer Curve.) I’m sure many would not be happy if the government wanted to tax all the gains on the cryptocurrency they’re hodling that has not been sold or has any intention to sell.  

I’m sure that many homeowners feel the same about their houses or apartments. Does this mean that the billionaires who own stock cannot feel similarly angered by the proposal? It's a complex and sensitive predicament for sure. 

The fact remains, though, as pointed out by the likes of Joseph Stiglitz and many others, that inequality is a blight on our society; tackling inequality would make life better for billions of people and supercharge the world economy yet, it's easier said than done. 

Perhaps instead of targeting the wealthy individuals at the top of the pyramid. It would be better and fairer to go after the corporations that have made them rich in the first place. The corporations with billion-dollar profits and tiny tax bills. The corporations that offshore their income and treat their workers appallingly in many cases. 

Individual enterprise should be allowed to flourish, but corporate greed is a much more insidious and damaging force in the world. So, maybe they should go after that instead. What are your thoughts? 

 

 

Resources: Coin Bureau, ProPublica

 

ELROND – Taking Blockchain And Crypto To The Next Level

A Technology Ecosystem For The New Internet

Cryptocurrencies have many use cases. Some act as a store of value, others power blockchains that make it possible to create trustless digital contracts and permissionless, decentralized applications. Some cryptocurrencies are pegged to Fiat currencies to allow for stable transfers of value, and a few even underpin protocols that offer decentralized data, storage, and video streaming. 

Each of these use cases requires a particular set of blockchain attributes and economic incentives. This is why it's often said that there is no single cryptocurrency project that can do it all. That may well be true, but there is one that comes close. 

 

What Is Elrond? 

Elrond has combined the scarcity of Bitcoin, the programmability of Ethereum, and the speed of next-generation cryptos, like Solana, to create a cryptocurrency network unlike any other. Elrond is a platform built for internet-scale and capable of processing thousands of transactions per second at $0.001 per transaction, and able to scale to hundreds of thousands with demand.

Elrond’s distinction is being a project with a soul. One that has united forces of an incredibly vibrant community of 190,000 people, spanning 18 languages and in almost 30 countries. Elrond aims to create the backbone for high bandwidth, transparent financial system, and extending universal access to anyone, anywhere.

Elrond’s egold (EGLD) native token has exploded in value over the last year and seems to be poised for more gains. The Blockchain project has been considered under the radar and received very little crypto media exposure until now. 

Image source: Elrond · Growth

Historically, Elrond was founded in 2017 by Benjamin Mincu, Lucien Mincu, and Lucien Todea. The Elrond white paper was released in November 2018, and the elrond main net went live in late July 2020. Like Cardano and Polkadot, Elrond is a competitor to Ethereum and seeks to be the foundation for the “new internet economy.”

 

Growth At All Costs

Unlike many smart contract cryptos, Elrond has a “growth at all costs” approach and has wasted no time onboarding individuals and institutions. It seems to be a perpetual process as Elrond has announced so many partnerships and integrations almost daily that it’s too many to mention here, so I’ll touch on some highlights. 

Coin98Analytics produced this graphic to demonstrate the enormity of the Elrond ecosystem.

 

The Ledger hardware wallet enabled support for egold in November 2020 and partnered with the Poly Network to make it possible to use Bitcoin, Ethereum, and dozens of other cryptocurrencies on Elrond as wrapped ESDT tokens.  

Elrond's documentation explains that they will be native to the Elrond chain, like e-gold. This means that they won't require a smart contract to issue and send like ERC 20 tokens on Ethereum. This protocol is very similar to Cardano’s Native assets, which have almost the same properties as ESDT Tokens. 

In December 2020, Elrond announced that it had partnered with Bitgo, which is one of the largest cryptocurrency Custodians. Also, Binance joined Elond as a staking provider. In October 2021, Elrond commenced collaboration with Ardana Stablecoin Hub on Cardano Blockchain to make egold (EGLD) one of the first native assets to collateralize stablecoins issued on the Cardano network. 

In the long-term, this collaboration will make it possible to bridge assets, such as the Cardano-native ADA token or other tokens issued on the two blockchains. This will allow their value to be leveraged in DeFi opportunities available on both networks.  

Beniamin Mincu, Elrond Network CEO says,

“This creative exploration of collateralizing a stable coin on one chain with the native coin of another can be a good starting point for interoperability between two progressive global ecosystems that are anchored in performance and innovation.”  

At the beginning of this year, Elrond began its initiative of onboarding the next billion people called 100 days of Hypergrowth. In addition to onboarding as many projects and users as possible, Elrond has launched its fully community-owned defy ecosystem, the Maiar DEX DeFi platform. The project describes itself as a technology ecosystem for the new internet. It includes fintech, decentralized finance, and the Internet of Things.

“By distributing Maiar DEX ownership to the next billion users, we lay the foundation for a truly global financial system that is accessible to everyone, everywhere,” said Beniamin Mincu, Elrond Network CEO.

 

What Makes Elrond Blockchain Different?

The Elrond blockchain uses Adaptive Stake Sharding to achieve incredible throughput features a robust consensus mechanism called Secured Proof of Stake and is smart contract compatible thanks to Arwen Virtual Machine.

In layman's terms, sharding involves breaking up a blockchain into multiple pieces called shards. This increases transaction speed because you can divide the transactions between different clusters of validator nodes running shards on the blockchain and process them in parallel. This is in contrast to regular blockchains, which require all the validators or miners to process one transaction at a time.

Sharding in the Elrond network was designed from the ground up to address the complexity of combining network sharding, transaction sharding, and state sharding. Elrond’s adaptive stake sharding takes this idea to the next level by dividing transactions, validators, and even the record of transactions between shards. The result is a cohesive protocol design, which not only achieves full sharding but attains the following goals as well:

1. Scalability without affecting availability requires increasing or decreasing the number of shards to only affect a negligibly small vicinity of nodes without causing downtimes or minimizing them while updating states.
2. Fast dispatching and instant traceability require that computing the destination shard of a transaction must be deterministic and trivial to calculate, eliminating the need for communication rounds.
3. Efficiency and adaptability require that the shards should be as balanced as possible at any given time.

A trivial step-by-step example of how it works is depicted in the animation below:

Image Source: Elrond Network

 

Secure Proof of Stake (SPoS) ensures that no single shard is corrupted by randomly selecting a set of 61 validators from each shard and choosing one to produce a block based on its stake and reputation. This unique setup makes it possible for Elrond to process over 5,000 transactions per second per shard.

Image Source: Elrond Network

 

The best part is that the Arwen Virtual Machine gives smart contract transactions about the same speed, which is quite rare. More importantly, the Arwen VM can operate between shards, a development hurdle many other sharded blockchains are struggling to overcome.

Elrond is a complete redesign of blockchain architecture to achieve global scalability and near-instant transaction speed. The underlying technology beyond the current state-of-the-art concept is better explained in the video below by our mate Guy from Coin Bureau. 

 

Wrapping It All Up

Elrond is a next-level project, and it managed to combine the best features of many leading cryptocurrencies in the space and even improve them. Elrond's adaptive state sharding is like the sharding Ethereum is working on in its 2.0 version, but better. Elrond’s secured Proof of Stake is like Harmony’s Effective Proof of Stake (EPoS) but better. Elrond’s Arwen Virtual Machine is like Cosmos’s Cosm Wasm Virtual Machine, but better. 

When you combine these three features, you get a blockchain that is theoretically capable of handling more transactions per second than every other smart contract Blockchain combined. Elrond’s development has been exponential since its main net launched last year, and the growth is well deserved with much more on the horizon.

Furthermore, with its highly regarded team, Elrond started out with very few proclamations but a lot of activity and consistent growth over time. Contrary to what often happens today, where the launch of new projects is preceded by too much spam, sensational announcements on social networks, millionaire ICOs to raise substantial funds before any commencement of technical work on the project. 

Conversely, Elrond’s development started out quietly and self-assuredly, without asking anyone for money, at least initially, and then managed to gain investors’ trust with a whole series of steps and transformations that have evolved over the recent years.  

I believe we will be hearing a lot more about Elrond in the future as momentum builds and the need for this unparalleled technology becomes paramount to enable universal access and transcend the global economy. Elrond will be the wave that will lift all boats, taking this massive opportunity from a niche group of people and extending it to everyone in the world. Elrond is set to open the flood gates to create a new market.

Disclaimer:  This content is provided for informational purposes only and should not be relied upon as legal, business, investment, or tax advice. Furthermore, this content is not directed at nor intended for use by any investors or prospective investors and may not under any circumstances be relied upon when deciding to invest.