This week in crypto: IOTA hits 1,200 TPS while Grayscale buys up 2% of the entire Bitcoin supply

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It seems like this week we reached some kind of tipping point with general interest in crypto, which has culminated in Bloomberg saying Bitcoin will reach $20,000 this year.

But price talk isn’t the only thing that’s been happening. There have been some big developments, too. Namely…

IOTA 1.5 launching in July with 1,200 transactions per second

This week IOTA ran a stress-test of its new network software named “Hornet”, which reached 1,200 transactions per second (TPS) and 620 confirmed transactions per second.

Source: Twitter

Hornet is part of a much bigger upgrade to the IOTA network called chrysalis, which, according to IOTA, will bring:

  • Simple transition to Coordicide: With Coordicide making significant progress and the Alphanet launch coming soon, we want to ensure that all developers and companies building on Chrysalis will not see any major breaking changes with the later transition to Coordicide.
  • Substantial performance improvements: With the changes introduced by Chrysalis, we will see a substantial improvement in the scalability and reliability of the IOTA Mainnet. The mainnet will be able to handle several hundred TPS.
  • Improved developer experience: The new protocol features, new libraries, new modules and new wallet will make IOTA one of the best platforms to build on, removing the friction which developers experience today.
  • Accelerated adoption: Chrysalis will make IOTA enterprise-ready, with stable and reliable technologies that will enable Startups, Corporations and Governments to develop and launch products powered by IOTA.

The first phase of chrysalis is coming next month (July), which will bring with it those massive TPS increases, making IOTA one of the fastest cryptos out there.

To put IOTA’s soon-to-be 1,200 TPS into perspective…

  • Bitcoin manages around 3.5 TPS.[i]
  • Ethereum can support 15 TPS in its current state.[ii]
  • VISA averages around 1,700 TPS, but can handle up to 65,000.[iii]

News of the Hornet test led to a 24% jump in IOTA’s price this week (at time of writing, on Friday morning).

That is a significant price rise by any measure. So if the chrysalis upgrade goes well next month, we could be in for some very big gains.

Then in October, phase two of chrysalis is set to bring, among other major improvements, reusable addresses and coloured coins.

Reusable addresses will make IOTA much easier to use for everyone.

One of the main criticisms levelled at IOTA is the fact you have to use a new address every time you make a transaction. So this will be a very welcome upgrade.

But it’s coloured coins that will really change things up.

Basically coloured coins can be used to tokenize assets, like Tezos and Ethereum do.

So a property developer could use coloured coins to tokenize a commercial property using IOTA.

Or an event could use coloured coins to represent tickets.

Or a company could use coloured coins to issue shares using IOTA.

Or a country could use coloured coins to digitise its currency using IOTA.

The possibilities are… endless.

If you want to know more about what tokenizing assets will mean for the world, you can read my feature on it here: How Security Token Offerings (STOs) will forever change global finance

Coloured coins have been around for a while on other blockchains. But reason this is such a big deal for IOTA is that IOTA is feeless.

So if a country moved its currency onto IOTA, no one would have to pay for any of the transactions. Or if a company moved its shares onto IOTA, transferring them would be free.

And all this is coming before IOTA even fully implements coordicide. This is all just in chrysalis.

I honestly can’t get my head around how IOTA is currently only the 24th biggest crypto by market cap. It should easily be in the top 10, even in its current state.

And unless something major happens I expect it could even make it to the top five if coordicide goes well.

Even at today’s depressed market size, a top five position would mean a 583% price rise for IOTA.

But given our next story, it seems the crypto market could be on the verge of getting a whole lot bigger.

Bloomberg predicts Bitcoin will hit $20,000 this year

Anyone and everyone can and does make wild price predictions about Bitcoin.

These predictions usually range from a hater’s $0 to a maximalist’s $1 million.

But it’s unusual for Bloomberg to make Bitcoin predictions, and even more unusual for it to say: “Bitcoin will approach the record high of about $20,000 this year, in our view, if it follows 2016’s trend.”

The statement comes from a report it released a few days ago called Bloomberg Crypto Outlook, which you can read here.

In the same report it also stated “Something Needs to Go Really Wrong for Bitcoin to Not Appreciate.”

So a very bullish prediction from the biggest analyst in the business (at least in terms of creating the platform that everyone uses).

Is this another magazine cover indicator, or could Bloomberg have got it right?

Either way, it’s just the latest in a scrum of mainstream interest in Bitcoin and other cryptos since the start of the coronapocalypse.

And speaking of mainstream interest…

Grayscale now owns almost 2% of all the Bitcoin that will ever exist

A few weeks ago I reported on Grayscale’s massive Ethereum and Bitcoin buys recently.

But things have gotten even crazier this week.

As you can see from the tweet below (which was retweeted by Grayscale’s owner, Barry Silbert) Grayscale is now buying up Bitcoin at a much faster rate than it is being created.

Source: Twitter

But what’s even more significant is when we look at how much Bitcoin Grayscale owns against Bitcoin’s total supply.

By multiplying Grayscale’s outstanding shares by its Bitcoin per share we can see they’re holding around 365,748 Bitcoin.[iv]

Given that there will only ever be 21 million bitcoin created, we can work out that Grayscale already owns 1.74% of all the Bitcoin that will ever exist.

And it is still accumulating at massive speed.

What happens if in a few years we have another 10-20 funds like Grayscale, providing crypto investment funds to the masses?

We could easily end up with 20%-50% of Bitcoin’s total supply locked up by these kinds of institutions… which I would imagine would lead to much higher prices due to supply and demand.

Of course, there’s nothing to say Grayscale and others won’t sell some if their supply down the line.

But another interesting thing about the Grayscale fund is it makes its investors lock up their holdings for a 12-month period before they are allowed to sell any.

So it’s effectively forcing people to have strong hands, no matter what’s happening in the market or the wider world.

Clearly the “Institutional” money everyone was clamouring for back in 2018 has finally arrived.

What effect it will have on crypto still remains to be seen, but if the last couple of months are anything to go by, Bloomberg’s $20,000 Bitcoin prediction could be on the money.

Okay that’s all for this week.

If you thought this article was worth a pot of tea, you can buy me one here.

Thanks for reading.

Harry

PS If you want to know the fastest, safest and cheapest way to buy Bitcoin, IOTA and other cryptos, you can read my free guide here.


[i] https://www.blockchain.com/charts/transactions-per-second

[ii] https://www.coindesk.com/learn/ethereum-101/will-ethereum-scale

[iii] https://www.visa.co.uk/dam/VCOM/download/corporate/media/visanet-technology/aboutvisafactsheet.pdf

[iv] Outstanding shares: 377,529,400

Bitcoin per share: 0.00096112

377,529,400 x  0.00096112 = 362,851

Then if we add this to their Digital Large Cap Fund holdings:

Outstanding shares: 6,029,000

Bitcoin per share: 0.00048053

6,029,000 x 0.00048053 = 2,897

2,897 + 362,851 = 365,748 Bitcoin

(source for data: https://grayscale.co/)

About the author

Harry Hamburg

This is all just like, my opinion, man.

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