Flap flap flap. Splat.
8 bit wonder.
The so-called flippening might be a red herring.
- Bitcoin has a maximum limit of 21 million coins – Ether does not have a limit (yet!)
- Huge congestion in the size of the blockchain of Ethereum
- Ethereum is hosting lots of new altcoins, ICO, almost weekly – this will result in their blockchain size growing at gargantuan rates
- Vitalik himself declared that Ether is not currency nor money – he did warn everybody very clearly
- The goal of Ethereum is to create a super massive decentralized virtual machine – compare this with those MMORPG that has other MMORPG living within it – such as a Simcity Game – and within a home of a Sim, that Sim family could be playing a MMORPG game of Warcraft within their home!
- It’s akin to the movie “13th Floor” A world within a world. Or the movie “Existenz” – a game within a game within another game.
- Several ICOs are launching within Ethereum then disappeared with the Ether – with no product/services. Such as some defunct crowdfunding stories you have heard in Kickstarter
- Many small PR companies now are putting their hand into creating a quick ICO to simply raise money (ether! a misnomer!) then becomes ether – literally. This is like the dot com bust. Many companies (or so called companies) just have a dot com website, with a few fancy believable pages created by PR companies, then rush to do an IPO, raised millions, with no product selling, no services, no revenues, and of course no profit to investors except supernormal profit from raising the funds.
- Imagine now many startups are desperately trying to seek funding – yet proving difficult – dealing with VCs, and these startups are bright, smart people. Sooner or later, a hundred, a thousand startups will turn into the ICO play to seek funding. This will jam up the Ethereum system and when a few holders from the ICO starts to cash out their Ether into fiat or Bitcoins, the system will see a complete takeover by greed and fear – a catastrophic collapse or a catastrophic black hole – meaning suddenly everybody in the Valley wants to get inside the Ethereum ecosystem, putting their system, services, inside Ethereum. This will drive up the price of Ether, drive up the size of the block, more congestions, and a big reduction in “mundane world” services.
- At the same time, a dozen or two, would start moving out of Ether since they need raw currency to pay for staff, for food, electricity, and usually that starts with moving into Bitcoins, then selling into currencies.
- Finally proof of stake. This implementation will literally stop the production of new Ether. Rewards will be lopsided that only someone with more Ether (stake) can mine and be rewarded! And the reward is gas not Ether. Gas is not tradeable (yet) in the open. Gas is used to power the smart contracts. Gas costs a tiny fraction of an Ether. When that happens, things could go sideways, left ways. Big miners would have huge stake to continue mining or perhaps not. They could just stop mining, since there is no more direct monetary incentives. Since there is not a maximum amount of Ether being declared, it is a dicy situation.
What does Flippening entails then? Nothing. When bitcoin started, it is virtually and by virtue, 100% market cap. Even if it was worth 0.0002 cents. It’s a $10 market cap. So if the market cap is now sadly down to 50%, yet worth 40 billion USD, it doesn’t mean or translate to mean a sad state of affair, does it? Bitcoin market cap could be 20% and yet worth 1 trillion USD. So on and so forth.