Vitalik Buterin was one of the people who started the Ethereum network (ETH). He has said that “endless expansion” shouldn’t be a factor in making sure cryptocurrency projects are safe. Buterin says it doesn’t matter that some people say the fiat world works the same way code. If you are planning to invest in bitcoin trading then you must check the trading app bitcoin code.
Buterin said in a blog post that the above argument is “inadmissible” because the fiat world is not trying to give returns that are much higher than the normal economy. He also talked about the collapse of Terra (LUNA) and so-called algorithmic stable coins in general. This was Buterin’s response to the claim that the fiat world doesn’t try to give rewards that grow much faster than the regular economy.
He also said that fake promises of a lot of money happen “occasionally,” and when they do, “they should be fought with the same force.”
Buterin thinks that developers in the cryptocurrency ecosystem should “hope for growth” but should also look at the security of a system in both its “steady state” and “pessimistic condition.” The number of users grows over time in an optimistic state. In contrast, the number of users stays the same in the stable state.
By doing these experiments, you can find out how systems would work in more difficult situations and, in the end, “if they can safely wind down” when there are no more users. He wrote the book.
He said that just because a system passes this kind of test doesn’t mean it’s not vulnerable for other reasons, like not having enough collateral, having bugs in the software, or having problems with how it works. This is because passing this test isn’t enough to tell if a system is still unstable for other reasons.
Vitalik Buterin, who helped make Ethereum, said that when starting a new cryptocurrency project, “steady-state and extreme-case soundness” should always be one of the most important things to think about.
How investors act will have a big effect on how cryptocurrencies develop in the future. People are already freaking out and feeling trapped, and some are starting to say that this disaster is like an old-fashioned “run on the banks.” During a bank run, customers are more likely to worry that they won’t be able to get their money out than that it’s worth less.
A better example is when the stock market goes down and investors worry that the stocks and shares they already own might soon not be worth anything. So far, how people have responded to this crisis in the crypto market shows that a lot of crypto investors have the same view on their holdings.
Even though prices have changed in the past, investors often act as if there is a basic assumption: that the price of the asset will continue to go up. The investor does not want to miss this chance. When the value of an asset goes up, people think it’s a “sure thing” and invest in it.
When a first investment pays off, investors are often told to put in more money. People keep investing because they don’t want to miss out on “inevitable” gains and because social media makes them want to.
In other words, most of the people who bought cryptocurrency did so because they thought it would help them make more money. It has been shown that this idea is not true.
But you could also put your money into cryptocurrencies if you think they will change the way the world economy works. This is a reference to the idea that traditional ways of exchanging money will one day be replaced by cryptocurrencies.
When the price of a cryptocurrency goes up, these investors think it shows that traditional currencies are losing their ability to compete with bitcoin as a way to pay. On the other hand, a big drop in the price of bitcoin isn’t just a loss of money; it’s also a loss of ideas.
But investors who think this way are much less likely to sell if the price goes down a lot. And this group may still give hope to the rest of the industry.
In reality, we will understand the situation better if we think of people who invest in cryptocurrencies as different groups with their own goals. If investors knew that the worst of this crisis might be over and that better times might be on the way, they might feel better. But any financial expert will tell you that, just like in any other market, nothing is certain in the bitcoin market.