Raoul Pal: The Inconvenient Truth About Crypto

Published on: January 27th, 2021

This article is the accumulation of Raoul’s thinking around the Digital Asset space as he has become more deeply involved and begun to understand the different assets and narratives that drive them. His feeling is that the narratives in the space are behind the times, and stem from the world of 2017 when the adoption of bitcoin was just taking hold and every other digital asset was a threat. After 2017, we saw the crypto winter, where the entire space fell nearly 90%. People are scarred by those events. Many people made a lot of money and many people lost a lot of money in 2018 and 2019. In this article, Raoul tries to bring the narrative forward and bring some clarity on how to address the space that is based less on tribalism and emotion and more on a pragmatic approach to the entire subject.


  • JS
    Jaysonraj S.
    27 January 2021 @ 15:04
  • QE
    Qusay E.
    27 January 2021 @ 15:23
  • Gl
    Gian l.
    27 January 2021 @ 15:28
    Thank you Raoul!Se passi da Roma hai una cena speciale offerta.
    • FL
      First L.
      27 January 2021 @ 20:16
      Bunga bunga?
    • RP
      Raoul P. | Founder
      27 January 2021 @ 15:42
  • AK
    Abdel K.
    27 January 2021 @ 15:29
    Much appreciated for the content and effort put in it 🙏 Thanks 🙂👍🏼
  • SK
    Shane K.
    27 January 2021 @ 15:30
    Your a good man... And we THANK YOU! This is excellently written! and remenber GET LONG, BE LONG, STAY LONG... In size!
  • PS
    Peter S.
    27 January 2021 @ 15:32
    Excellent content, well thought out and easy for the layman to understand. Appreciate the work you do.
  • RJ
    Radek J.
    27 January 2021 @ 15:44
    Great content.Thanks for sharing and educating the masses.🙏🙏🙏
  • AD
    ANIL D.
    27 January 2021 @ 15:49
    Thank You Raoul, I am trying very hard in covering up for my illiteracy on crypto, and you are helping a lot. I appreciate it until now and looking forward to more in the future.
  • NC
    Nosa C.
    27 January 2021 @ 16:03
    As always, great content from you Raoul. Thanks a million.
  • ND
    Neraldo D.
    27 January 2021 @ 16:23
    Thank you Raoul You my friend are a very well rounded guy !! I APPRECHIATE ALL YOU DO FOR US!!
  • RM
    Ronney M.
    27 January 2021 @ 16:32
    Thanks this is very generous of you!
  • jl
    john l.
    27 January 2021 @ 16:33
    An informative article tying together the multiple narratives driving investing in digital asset space. I love Raoul's genius ability to explain the complex fluid ecologies of human behavior. In summation just follow the mob.
  • RF
    Roger F.
    27 January 2021 @ 16:35
    Thanks Raoul Bhai! Samudaay ke lie aap jo kuchh bhee karate hain, usake lie dhanyavaad
  • MV
    Michael V.
    27 January 2021 @ 16:35
    Great content - Thank you
  • GT
    Gerald T.
    27 January 2021 @ 16:38
    Wow, without by far the best, most detailed analysis I have seen. Thank you.
  • MW
    Mike W.
    27 January 2021 @ 16:41
    Thanks Raoul ..... fantastic article. Though frankly my head hurts .... think I need to read it all again ... and then again. Such an exciting space. Thanks again for all your input ... REALLY appreciated :)
  • JO
    J O.
    27 January 2021 @ 16:42
    Great update on your thinking, Raoul. Thanks as always..
  • TP
    Timothy P.
    27 January 2021 @ 16:44
    Raoul starts out with a bang, using Vitalik Buterin's slur for Bitcoiners -- "Bitcoin Maximalists". Not Bitcoin enthusiasts, not simply "Bitcoiners", but that particular phrase that is meant as a derogatory term for those that support the Bitcoin ecosystem. Real Vision has a problem with this, they use the term freely and often with nary a thought about its origins or why it might annoy those that are just trying to help Bitcoin succeed. The idea that Bitcoin is the victor in a world full of knock-offs isn't so outlandish. After all, even when former no-coiners like Raoul thought Bitcoin was "dead" 350+ some times, its managed to survive despite the most vicious attacks, both technical and social. Raoul also affirms that he "gets it" -- but his opener clearly indicates he does not. In fact, by stating "This is why I don't belong to this TRIBE" is clear indication of someone who is used to a neatly compartmentalized world, not the reality of merging views and functionality emerging from the largest financial network the world has ever seen. Indeed, if he did Raoul would understand that whatever innovation comes along, there's a good chance that if it has any promise Bitcoin would absorb it. We're in the process of doing just that with "privacy" tokens, Schnorr Signature code has been merged and the timing for the final activation is all that's left to obviate a whole raft of duplicated effort elsewhere. But Raoul doesn't comment on that -- because it would undermine his "tribalism" 2020's buzzword analysis. This piece is infused with his hurt at being a crypto newbie and like many others, coming up with the same naive thoughts and being rebuked -- and taking it personally. Money doesn't have feelings. If you need a friend in finance, get a dog. This is a competitive arena, not a bonfire on the beach with the bros. There's a reason Raoul was pushed back on -- his ideas were lacking. Twitter certainly doesn't care about people's feelings, its where ideas multiply or they die. And frankly after personally reading some of his twitter threads, I understand why the internet hive mind took one look and collectively said "go on... come back when you have something original". Raoul is the worst kind of crypto newbie -- too much money and not enough crypto experience. He's going to make substantial mistakes because he views crypto assets like he does everything else he trades, which is a very big mistake. These aren't shares, bonds, futures (in most cases) or contracts-for-difference. Coming at crypto with the baggage of the legacy financial system and expecting it to conform to your ideas is just sheer folly. Again, you see the anchoring in the legacy system when Raoul says -- "Our world doesn't work like that." Sorry Raoul, but in crypto you have maybe the top three (and those other two could easily slide into oblivion) and the rest are on a long tail of failure, not quite "dead" but languishing in perpetuity. Crypto is a hyper-competitive. It takes the notion of conventional cycles and chews them up for breakfast, ascending the S-Curve of adoption at a furious rate. Again later in the piece we're back to "tribalism", and some exposition on Metcalfe's Law. Nice, there are some benefits to looking at this law in relation to crypto. Raoul then gets into an exchange with XRP promoter Velez - who if you'll recall was all rosy about that particular token before it crashed and burned due to the SEC lawsuit - naturally Raoul finds agreement and assent in this particular "expert". Velez goes on a hyperbolic rant with formulas and such to "disprove" the stock-to-flow model of Bitcoin, even though "Plan B" has said before in other interviews that it only seems Bitcoin follows this model, not the other tokens such as Ethereum or Litecoin. Velez essentially is making the case for where proof-of-work isn't necesssary (how convenient, XRP is a corp-coin premined mess with zero mining) and how whatever token aligns with his view (XRP) is indeed wonderful because of all the "value" its captured. The piece then devolves to the usual "fractal" cut-and-paste comparison of prior movement to intuit future moves -- which honestly is pretty basic and not something I'd rely on in a strict trading sense -- but all it shows is Bitcoin grows, and it does so in spurts and fits before settling down into a consolidation phase. Most crypto traders know this, it isn't a startling revelation. We then move to Ethereum, where Raoul says this -- "When we look at it in terms of market cap, the virality of ETH is far superior to BTC" Excuse me? MARKET CAP? The one metric that is utterly and completely useless when comparing crypto assets? That one? I've been pushing Real Vision to update their indicator sets, and they're still using "marketcap" like a first-year junior analyst. Crypto isn't securities. Coins can be made in an instant, pre-issued in the Billions (or Trillions), and listed on a backwater exchange, trade at 1 USD and have instant "marketcap". This doesn't show their utility or "virality", Raoul. For eff's sake. At least he's putting his money where his mouth is - upping his ETH stake to 35%. I'm a great believer in the market teaching lessons, so I'm pleased he's increasing his exposure. My fundamental argument isn't the token price, but rather the underlying "pivot" to proof-of-stake running into problems. That is where Raoul's love for ETH may suffer, I'm afraid. The rest is how XRP will take over the banking world if their lawsuit doesn't take them down, and a bit more on "DeFi" and risk cycles. Really, this whole piece is how Raoul got called out on crypto-twitter, and his reasons that he's perfectly right and who are they to tell him otherwise. Probably explains his "Bitcoin Maximalist" obsession as well.
    • SV
      Santiago V. | Contributor
      8 February 2021 @ 16:55
      I've missed you Timothy! I sat down at my keyboard with the intentions of refuting all your points and then I just decided I would concede and admit absolute failure in light of how insightful your thread was. I stand in awe of the clarity and yield nothing but infinite praise for lighting the way for the rest of mankind. Thank you! Thank you! Thank you! I'm such a loser.
    • LS
      Lemony S.
      28 January 2021 @ 18:39
      I'm behind Timothy P. here, his input is very valuable. Asking for credentials is lame. Pointing out why RP may be dead wrong here, and then outing Velez for XRP hawking (which I will have to confirm myself) is SUPER valuable because he is providing all sorts of debunk, not just claims and emotion. My comment above, very basically and fundamentally challenging Santiago on a few points, also teases these things out. There are a lot of things he says that make sense, but some of the details aren't well founded, as I point out. And as Timothy points out also, details are CRUCIAL in this "space" (God I hate that word).
    • TP
      Timothy P.
      28 January 2021 @ 17:49
      To All The Rest - the armchair analysts of my psyche, to the self-made millionaires that implore me to "please be like I am". Hilarious. You don't like it, or want to read it? Then downvote, and move on. I had great hopes for the "crypto" section of Real Vision, but honestly its just been one head-nodding interview after another, where softball questions and lack of precise inquiry to fundamental problems remain overlooked. (Who can forget the XRP pumper interview prior to their massive crash? How many newbies got burned in that conflagration because RV wasn't willing to press with the hard questions about liability?) To those stuck in the rut that "happytalk is the best talk", I suggest you expand your mindset to accept that not everyone thinks like you do - and if we did, the world would be a supremely boring place.
    • SW
      Stanley W.
      28 January 2021 @ 13:15
      @Timothy P. could you expand on what indicators are most appropriate to evaluate crypto assets?
    • SB
      Scott B.
      28 January 2021 @ 03:12
      Let's make this simple: Raoul has skin in the game in the positions (through live positions and RV equity) he is taking and then expounds on why. He is not shouting from the bleachers. He is on the court whether right or wrong. That's it. Do what you will with it. Your opinions "mean" nothing, sir, especially where you come from. Your claim of experience is irrelevant and not very useful when you come from the place/vibe you have chosen, IMO. The best part of your missive, again, in my unimportant opinion, is where you acknowledge he has skin in the game. Bravo AND why insist on being a dick about it? The community may value you focusing on that powerful attribute and employing positive, creative energy to educate from an alternative stance, and frame if from a place of graciousness for his effort. Otherwise, you may consider fucking off, unsubscribing from this free service then walking outside in the middle of the night and telling the moon what you think...see if anything comes back. Lastly, I have a little fuck you money myself and find this affords me the space to be more self aware than so many that are suffering. I was super lucky and take little credit for my good fortune. Raoul was THE catalyst from me making millions in the last six months. Many on this service may not be in that place, would like to be and missives like yours only add to the anxiety from the place you have chosen to opine. As RV Pro member and a community advocate I hope you chose a different tact and use your talent to create and not attempt to destroy. Cheers! :)
    • NH
      Neil H.
      27 January 2021 @ 21:17
      I have PTSD and can see from an insider's viewpoint signs in your writing of severe emotional disregulation. While life stresses can temporily exaggerate emotional responses to an extreme level, venting your vituperative thoughts here, which includes gaslighting readers with belittling views about somebody else, is toxic. You need to stick to your own arguments. This is a comments thread, but reading your hatchet job was a stressful experience. I learned nothing from you except how not to behave in public.
    • TZ
      Toomas Z.
      27 January 2021 @ 19:50
      Timothy P., the beauty of markets is that there is a resolution to this argument, and price along with adoption over time will determine who is right. While I have my own reservation about ETH itself, you have to admit it has gotten pretty good adoption in comparison to everything else. BTC may have the SoV narrative, but literally nothing is being built on top of it and L2 solutions aren't getting much attention apart from some evangelical BTC enthusiasts, with many failures in solutions like lightning; how many BTC has been lost due to nodes going offline? Haven't checked in a while, but last it was in the news it was an unnerving amount in comparison with total volume. Personally, I'm also quite worried about what policies the democrats/EU/UK may adopt in their newfound obsession about a green new deal, and anyone who thinks this risk is irrelevant is probably not looking at this from an unbiased perspective. This isn't just a problem for BTC, but most other PoW networks. Even if all that energy was provided by green sources, I believe these policies are about overall energy efficiency, as such providing a potential problem depending on how new low carbon regulations will be established in the developed countries. In the end, if you are right with your BTC bet you will become extremely wealthy and people in alts will suffer as value moves over to BTC, but things could also go vice versa. We live in interesting times.
    • RF
      Roger F.
      27 January 2021 @ 19:47
      @ Timothy P - Clearly, you have the knowledge and the mileage to prove it. How can you contribute to aid all our learning, better question is: Will you contribute to aid all our learning? Think about it...
    • TP
      Timothy P.
      27 January 2021 @ 18:36
      Since RV's reply functionality is limited, I'll just bang these out in one message: @John C - I have 10+ years experience in this space, 10+ more years in actual finance trading futures, options, forex and securities. My prior focus was in IT, specifically development and a stint in network engineering. Honestly it shouldn't matter if I was a carpenter, plumber or HVAC technician -- debate the ideas, I say. I feel strongly because I've made my "fuck you" money from being consistent, which allowed me to spend even more time in my crypto career. @Roger F - oooh sayings -- my favorite is "A poor carpenter blames his tools." @0x514 - Go back to reddit, they're missing a shitposter.
    • 09
      0x51434F6502b6167ABEC 9.
      27 January 2021 @ 17:50
      obvious bitcoin maximalist is obvious
    • RF
      Roger F.
      27 January 2021 @ 17:24
      An old Indian adage "If you don't have anything nice to say, then don't say anything at all".
    • JC
      John C.
      27 January 2021 @ 17:10
      Timothy P. Not a knock on your commentary nor have I even read the article yet, but I'm curious what your credentials are in this space that allow you to feel as strongly as you do about the article?
  • JA
    Jonathan A.
    27 January 2021 @ 16:53
    That... was... brilliant.
  • CG
    Callum G.
    27 January 2021 @ 17:04
  • SR
    Steve R.
    27 January 2021 @ 17:41
    Thanks Raoul, First class as always!
  • GM
    27 January 2021 @ 17:42
    Well presented and well said. Informative, insightful, and actionable. Thanks Raoul!
  • LC
    Laurence C.
    27 January 2021 @ 18:03
    You're an absolute gent, big thanks and it's much appreciated from us 'normal' investors
  • NT
    Nigel T.
    27 January 2021 @ 18:40
    Thank you Mr R!!!!! Excellent deep dive which I appreciate and I know will make a difference on my future investments. Thank you again.
  • AS
    Arjan S.
    27 January 2021 @ 18:53
    Thanks Raoul! Very informative piece that even i can understand!
  • KK
    Kenneth K.
    27 January 2021 @ 18:54
    It's great to read someone's view of the entire landscape we're in. I guess that's MACRO. Thanks to Raoul.
  • MC
    Mark C.
    27 January 2021 @ 19:07
    Great work. Thanks for sharing!
  • FH
    Frank H.
    27 January 2021 @ 19:14
    Excellent reading. Thank you very much Raoul for sharing your knowledge and educating us.
  • TC
    Theresa C.
    27 January 2021 @ 19:34
    Thank you. What a great piece.
  • AP
    A. P.
    27 January 2021 @ 19:54
    Excellent analysis and ready read.
  • BW
    Blanco W.
    27 January 2021 @ 20:00
    Sagacious analysis and commentary - much appreciated! I'm new to cryptocurrency investing and only own Bitcoin, but I am NOT a maximalist or a tribalist. I am purely a pragmatist like Raoul. I also own a copious amount of gold which I intend to hold on to for years to come (just like with my Bitcoin). I own fewer dollars with each passing year, as my confidence in fiat currency fades with the increasingly imbecilic behavior of central banks.
  • PM
    Paul M.
    27 January 2021 @ 20:08
    Great information, very well put.
  • Us
    Umer s.
    27 January 2021 @ 20:45
    Great peace, very educational, thank you!
  • AH
    Alli H.
    27 January 2021 @ 21:08
    amazing analysis. easy to follow. thank you.
  • JS
    Justin S.
    27 January 2021 @ 21:14
    Thanks Raoul, impressive reach and articulate as ever. Always interesting to read counter-views by the likes of Timothy P, particularly when less "ad hominem" in nature. Your work is much appreciated :)
  • NH
    Neil H.
    27 January 2021 @ 21:21
    Great article as ever and food for thought. It has convinced me for the need for deeper research and look at adoption curve - related data for some of the other large caps which are bringing 'convenience of utility' into the space early, such as Aave and Celsius.
  • JR
    Jake R.
    27 January 2021 @ 21:34
    Amazing content, Raoul. A true leader in the crypto space along with other areas of life and investing. I know you are probably too busy, but if you colud squeeze a 5 minute phone call in, I would love to hear you further discuss these topics and any advice you have for a young man like myself. Keep up the great work, sincerely, Jake Rose
  • RH
    Razvan H.
    27 January 2021 @ 21:44
    I am very new to this world, but reading this I understood that I am here for the long run. Thank you.
  • aK
    ac K.
    27 January 2021 @ 22:02
    Raoul. It's amazing that the bitcoin price today is fitting even better than its previous post-halving 2013 price and that ethereum is mirroring bitcoin when compared at similar 'ages' - maybe even better with the same price at the same point in time relative to the adoption cycle (addresses). Apparently, it's all about adoption! Thank you Raoul. I appreciate that you do not love money; rather, you look at it only as a life-style token. #legit
  • JD
    John D.
    27 January 2021 @ 22:04
    The S - curve is more like "The Markets Can Remain Irrational Longer Than You Can Remain Solvent" There is place for at most 5 use cases for censorship resistant blockchains. And the other uses apart from money are tiny in comparison. Most things don't need censorship resistant blockchain because they can't be censorship resistant because of the connection to the real world. e.g. real estate trading, stock trading, any security can't be censorship resistant because in the "meat space" "men with gun" decide who owns what no matter what the blockchain says.
  • JY
    J Y.
    27 January 2021 @ 22:21
    TY, Raoul & Team Real Vision.
  • LM
    Lawrence M.
    27 January 2021 @ 22:21
    Hi Raoul, Thank you so much for offering this report to "the little guy". I have been in crypto for 4 years and now help other small retail investors to get started in the space. This report is the single most valuable resource I have come across to date. Your wisdom, clarity, and vision are awesome. May the Universe continue to bless you in all ways! Best, Lawrence
  • MD
    Miroslav D.
    27 January 2021 @ 22:33
    Thank you.
  • GB
    Guillermo B.
    27 January 2021 @ 22:37
    Nice work! Thanks a lot...
  • JF
    Jason F.
    27 January 2021 @ 22:50
    Nice one Mr Pal, great read as always. Gracias.
  • JC
    Jose C.
    27 January 2021 @ 23:19
    The network effect was always the value, but your analysis and charts have strengthened my conviction. See you on the moon!
  • AS
    Andre S.
    27 January 2021 @ 23:29
    Brilliant! Great data use to make the graphs!
  • JG
    Jonnie G.
    28 January 2021 @ 00:00
    Absolutely brilliant. Thanks. So many questions tho
  • AH
    Azman H.
    28 January 2021 @ 00:08
    This article is gold!
    • RP
      Raoul P. | Founder
      28 January 2021 @ 00:27
      Bad phrasing... ;-)
  • JR
    Jaime R.
    28 January 2021 @ 00:15
    Excelent work thank you very much, let me ask you, do you think we will be having an 85% drop and a bear market again?
  • CA
    Cameron A.
    28 January 2021 @ 00:18
    Thanks for the free insights!
  • RB
    Ryan B.
    28 January 2021 @ 01:00
    King Raoul
  • GN
    Garry N.
    28 January 2021 @ 01:20
    Very in depth report, I love your perspective.
  • GG
    Gary G.
    28 January 2021 @ 01:44
    Thanks Raoul for sharing yours and Santiago's work with us peons in the Plus tier.
  • MD
    Mike D.
    28 January 2021 @ 02:23
    Great article, although there are some other points to consider, which also raise some interesting questions. I am not a Bitcoin maximalist, I am a crypto ecosystem maximalist. In my view, Bitcoin has already won, it not only has the first mover advantage, but it is the (foreign) exchange mechanism for cryptos, and this can't be understated. One of the features of Bitcoin that is little talked about, is that it can be used to buy/sell other cryptos, and to value them, and as such, has cemented it's place in the crypto ecosystem, regardless of it's market cap. Often we see BTC dominance reduce, or visa versa, as value transfers into alts, in an alt bull market, or into fiat, or stablecoins in a bear market. I believe most asset classes will eventually become tokens (tokenization), in a huge crypto/digital asset market. For example say you buy stocks, you get to hold those stocks, say after T3, that is 3 days after purchase, via an outdated clearing house system. Blockchain changes all of this, it is faster, cheaper, immutable, and more transparent. Raoul says that more regulation is required, and as we are in a development stage(the wild west), there is an absence of regulation, however i argue that centralized regulators will only bastardize decentralized systems. Central regulators paid in USD$(or insert any flavour of CBDC), could by decree say that the FEDcoin, is the exchange mechanism for cryptocurrencies, how would the cypherpunk crypto tribes respond, will they agree to chuck out the Bitcoin exchange mechanism, in favour of FEDcoin, I would think not. It could promote the XMR exchange mechanism, as they collectively reply FU FEDcoin This could be the showdown at sundown. If BTC is not the exchange mechanism (for crypto), and a new Brenton Woods agreement (monetary exchange mechanism, and or reserve asset) is based on a basket of currencies/assets, it is hard not to see Bitcoin included in it (if it was fair) I have not seen any logical arguments for how "centralized regulation can regulate decentralized P2P networks" ( no CEO, no physical address, nobody to threaten), is it an oxymoron? Christine Lagarde, and Janet Yellen, are trying to save us from the evils of money laundering, and terrorism via blockchain, and cryptocurrencies, obviously the larger fiat currencies have a bigger and longer history of doing this, so they are hypocritical at best, and only trying to place roadblocks in front of a peer to peer systems that don't require banks. Permissionless, is also a key feature of crypto, and one of the core values, are we prepared to give this up, in contrast, how did asking permission from the US senate for Libra work out for Mark Zukerberg? DeFi, or open finance (as it is all inclusive, including the bankless) developers are looking to standardize the legos, the very open source building blocks of DeFi, to avoid failures, including hacks, and the loss of investors funds. This is self regulation. DAO's and other protocols, are increasingly adopting governance tokens, which give their token holders voting rights on the future of that project, will their communities vote for increased centralized governance? I believe that there will be increasing levels of self governance, to bring stability to the ecosystem, take DeFi for example, there has been many hacks in the millions of dollars, and as code is better developed, and audited, these hacks are being reduced, I won't say eliminated. So do we think that the white hats will come to save us from the existing political system, and it's regulatory arm? Will they write equitable code for us? When we say trustless, that is because we trust the code to perform without being biased, can we replace our trust in code with the trust of centralized regulators? Will Janet Yellen, or Jay Powell be the new sheriff over cryptoland?
    • CB
      Caroline B.
      24 March 2021 @ 15:35
      Nailed it nicely there IMO!
    • JS
      Justin S.
      28 January 2021 @ 09:39
      Thanks for this Mike, can you flesh out what a showdown at sunset would look like in practical terms, as this is key to gaining the understanding we require - as Raoul says, many of us are not tribal and simply want to think about how things might play out rather than how the "should". Great insight, thanks
  • MB
    Mario B.
    28 January 2021 @ 02:33
    Thank you for sharing your experience and gift to bring knowledge to all. From the complicated and beautiful country where I write, decentralization is full freedom, and many take for granted the freedom that others await with unwavering faith. I take advantage of each of your opinions and analysis. Thank you again for sharing your gift with all people. Gracias Señor Pal.
  • PP
    Patrick P.
    28 January 2021 @ 02:44
    Excellent piece Raoul! Good job to you and your team. Appreciate the graphs to put things into perspective. I’ll be altering my portfolio allocation to increase reward probability. Must risk it to get the biscuit.
  • LB
    Laura B.
    28 January 2021 @ 02:56
    I so appreciate you, Raoul. This article is pure BITCOIN! I'm holding onto both.
  • VA
    Victor A.
    28 January 2021 @ 03:17
    Great Stuff!
  • CW
    Clare W.
    28 January 2021 @ 03:22
    Thank you for sharing your brilliant ideas!
  • MR
    Michelle R.
    28 January 2021 @ 03:35
    It's rare that you get something this good for free. Thanks Raoul.
  • Bp
    Brent p.
    28 January 2021 @ 03:45
    Loved the graphs. Shared your findings and hunches with my friends. Thank you!
  • MG
    Miguel G.
    28 January 2021 @ 04:25
    You are my role model. Great read. Loved the take on 'if someone hates it or thinks it's a scam, there's opportunity there'. It's only people who don't do their research or look into it that miss out...If you're late to the party look into it quick because you can still enter into it in the 2nd inning instead of the 8th. Thanks again for your insight. Top quality financial insight.
  • AH
    Anthony H.
    28 January 2021 @ 04:32
    THANK YOU FOR SHARING THIS RAOUL. I absolutely love this content. A man of the people you are.
  • TR
    Timothy R.
    28 January 2021 @ 05:08
    Reflexivity and the value of the bitcoin eco-system has more to do with price than stock to flow imo. It's an artificial-scarcity cash cow. You only have to look at the valuations of bitcoin exchanges in 2018 to realize it was never going to go under $3000. On the upside these phases of more people trying to get back in than new sellers selling is self-reinforcing. The faster the change in price, the less people sell, the more people have to get back in. People get out at 17k to get back in at 21k, those out at 21k are back in at 24k, so on and so fourth. Scarcity and leverage. This isn't to say that stock to flow doesn't correlate, but looking at the cup patterns and blow off patterns since it was $1 explains not only explains the upside but also the reflexive downside and why it forms these deep cups after blow off.
  • BP
    Bhavesh P.
    28 January 2021 @ 05:47
    Wow, what an article. Goes so deep, invigorating and stimulating. Thank you so much
  • DD
    Dyutiman D.
    28 January 2021 @ 06:07
    I came across this paragraph "But in cryptocurrencies, the owners of the currencies are the ones that get rich in a distributed system. The owners and the network effects are one whereas in Facebook, they are two sets of players – the users and the shareholders" So why are the owners of the currencies the shareholders? Is this because the currencies are the tokens that you have to pay to use the network?
    • BE
      Bart E.
      29 January 2021 @ 09:42
      because no one owns the blockchain. you can see the cryptocurrencies as the use case and the shares all at once
  • DK
    Danny K.
    28 January 2021 @ 06:12
    Never thought I could warm to a suit but you'll do for me Raoul. I can't thank you enough. You have no idea what difference this money could make to my family, you really don't. That BTC/ETH chart is a thing of beauty.
  • ns
    nigel s.
    28 January 2021 @ 06:54
    Inter-relationships between networks? i.e. Would there be an ETH without BTC?, and I guess I very high proportion of people are users of both networks.
  • JM
    Jesse M.
    28 January 2021 @ 07:23
    The great thing is that I'd imagine that you've made your fortune and therefore you don't have to hodl this research to yourself and sell it to large clients. It's amazing that you are able to share it with the world, essentially supporting main street. I hope that one day i get to the point where I've also made my fortune and i can also give back to main street. Metcalfe’s Law meet Maslow's Hierarchy.
  • DB
    Deon B.
    28 January 2021 @ 07:50
    Im 70% the way through and its a brilliant piece - thank you for sharing this with the little people.
  • AV
    Adriaan V.
    28 January 2021 @ 08:28
    Thank you Raoul, much appreciated.
  • VP
    Vitor P.
    28 January 2021 @ 09:56
    Nice read! Lots of food for thought! Thanks
  • mw
    mark w.
    28 January 2021 @ 11:43
    Thank you for your time and effort, give me hope the little guy can have some wins :)
  • PS
    Peter S.
    28 January 2021 @ 11:56
    Thank you for bringing your logical and analytical approach to the world of crypto. I love being part of the Real Vision community and always look forward to your videos, information and thoughts. Really appreciate you making your views and thoughts available to us small investors.
  • GR
    Guido R.
    28 January 2021 @ 12:03
    Definitely wrote about Maxi's tribalism after talking with Pomp lol, Raoul: "It can't be a free transaction, there's market spread if you send BTC to USD" Pomp: "No bruh that's false, i sent 20$ u receive 20$ u wrong" Raoul: *Ok I'm not wasting my time trying to teach him*
  • AV
    Andre V.
    28 January 2021 @ 12:23
    From South Africa.......Thank you !!
  • SB
    Smile B.
    28 January 2021 @ 12:40
    Grazie gracias. Absolutely brilliant. Extremely well explained. I particularly appreciated the last few pages about XRP. In my opinion, the upside potential of XRP can be limitless especially if you consider that the community could reach consensus in forcing Ripple the Company, to burn some of their reserves. Why would they do that? To improve even further the deflationary aspect of the entire project, that has very intelligently been built it, from day one. Consider also that from the ecological, utility and transparency perspective, show me another project that comes close to what XRP has achieved. The XRPL is mature and battle tested. How does it get any better than that? Have a wonderful day. Smile :-)
    • SP
      Simon P.
      28 January 2021 @ 15:35
      Agreed. I'm irresponsibly long on BTC, have a little exposure to ETH but I'd completely written off XRP. Raul made a good point and I'll probably put a tiny amount in with the view it could turn into a house deposit for the kids if it does moon and if it doesn't it will be the equivalent of foregoing a few sats.
  • LA
    Lars A.
    28 January 2021 @ 13:10
    Thanks Raoul for your in depth report about crypto. It gave me a more helicopter perspective of the subject Crypto.
  • RB
    Robin B.
    28 January 2021 @ 13:40
    Much appreciated, thank you. Think there is a lot of valuable information in here for everyone
  • GC
    Gregg C.
    28 January 2021 @ 14:04
    Very readable. I only got lost when the formulas were introduced but got back on track once Raoul explained it. Thanks again.
    • SV
      Santiago V. | Contributor
      8 February 2021 @ 16:47
      Sorry about that, my fault!
  • JC
    Joshua C.
    28 January 2021 @ 17:28
    At some point, the network effect will be tempered by transaction fees. Because the block size is limited, the transaction rates of both BTC & ETH are limited and is a bottleneck on adoption. Another way to express this is that the number of interactions scales slower than Metcalfe's Law because people are prevented from performing interactions they want to do because of high transaction fees imposed by the hard limit on the transaction rate. However, it is unclear at what scale of adoption the limiting effect of transaction rate will start to be significant.
    • mc
      mark c.
      31 May 2021 @ 20:58
      joshua great point, santiago wrote a better reply than i could i think that corporate coins will have a large future
    • SV
      Santiago V. | Contributor
      8 February 2021 @ 16:46
      Joshua, you nailed it. Network effects can be either deflationary (MySpace) or inflationary (Facebook). One of my main concerns are PoW systems that have fee escalation. This makes it incredibly difficult to construct a long term business when you can't anticipate operational costs denominated in either $'s or the native digital asset. In addition, as the fees become an increasing fraction of wallet balances those wallets become DEAD NODES! I define a dead node on a network as something that is incapable of expressing value because of the operational structure of the network. If this escalation is not ameliorated the network deflates until an equilibrium is reached. That would be fine if there were no other networks, but there are!
    • AJ
      Aaron J.
      28 January 2021 @ 23:58
      That's a very good point. As someone who grew up creating things on the internet, without pre packaged software (or for example ready made online templates today). I agree the transaction fee issue will not actually be one eventually. It was the reason banks "batched" transactions originally instead of instant payments (due to bottle neck issues and concerns) but those days are long past and from a front end user you only notice your finds are instantly send to another account now unlike years before. Such was the internet when it was deciding if 'flash' was the best design instrument, or if java could manage the demand that people were looking for. Today it's all packaged nearly under the hood and someone can use any device and view anything. The compatibility issues are gone thanks to layers and cross code. GL to you and everyone in 2021👍
    • JC
      Joshua C.
      28 January 2021 @ 17:38
      For a store-of-value use case where transactions don't need to happen frequently, a cryptocurrency is less susceptible to the limiting effect of transaction rate than other use cases involving higher transaction rate, e.g. day-to-day payments for goods and services or asset trading, simply because for the store-of-value use case the demand for transaction rate is lower. E.g. someone who invests in gold for long term value or hedging does not need to do as many transactions as for payment for goods and services. Level-2 solutions like the Lightning Network will probably help alleviate the transaction rate problem but they are very complicated and without greater adoption it is still unclear how effective they will be or what hidden risks they bring.
  • VM
    Victor M.
    28 January 2021 @ 17:53
    Thanks for this, glad to see you think this way. Ever so satisfied with the work at Real vision.
  • LS
    Lemony S.
    28 January 2021 @ 18:16
    This is a good article, I liked it. I think RP is just too worried about twitter/internet/more of the same stuff ... that's the way of the world now and egos (including his) overestimate the reality of the social media world, which is called viral in many ways for a reason. Santiago states, "It’s particularly problematic for Bitcoin because the switching costs between going from fiat to Bitcoin are high, but once those costs are justified, the costs from going to Bitcoin to other digital assets is very, very low." He then states "The resistance to change is one of its greatest properties but also one of the reasons why from a network effect perspective it remains deeply vulnerable." The first issue is only a superficial view of costs that is not applied equally, ie the cost of BTC to other DA is not necessarily very low at all, it is low on the "relative to fiat" cost scale. This is proven by his resistance to change property I quoted next, which is why the switching costs are in fact great. Why else would facebook have been so easily capturing, and maintaining its network? Because the costs apparently were in fact high to switch to google+ or any other offered service which was seemingly "easy" from a purely operational point of view. Ethereum is a good example, but it's a ride the BTC wave phenomenon more than anything still, I believe, and the challenge to that is "Will institutions buy ETH?" The ultimate question for me, and I don't doubt for the short to medium term ETH could outperform BTC as RP states here, is what will ETH end up at or as when DAs have their settling point? I see many DAs as being speculative, like stocks, and you can definitely make money on all of these. I just wonder how many, and at what value the altcoins will be at when BTC is finally stable at its position as the Lion of the jungle.
    • SV
      Santiago V. | Contributor
      8 February 2021 @ 16:42
      At the moment, the main switching costs are not the unit prices of the digital assets, but the learning curve and fear of leaving a fiat denominated world into an asset class mired by drama and controversy. Once those upfront issues are dealt with, users have a natural inclination to explore alternative and it is at that precise point that the switching costs from Bitcoin to anything else are near zero. Literally clicks of a mouse or taps of a phone screen. With regards to "resistance to change" I am referring specifically to development around the Bitcoin protocol in regards to enacting any changes that would impact miners / holders in any way that impacts their operational costs. By this I mean block size, throughput, total supply, etc. The features that make bitcoin, well Bitcoin, are the community consensus that is ossifying around the narrative of a Store of Value. That is fine if remains a sufficiently compelling narrative forever. Nothing is forever and other communities to continue to solve problems and create utility for their participants, in the face of near zero switching costs, will see inflows from both fiat and Bitcoin. There are relational networks, not isolated systems. With regards to Facebook, the reason leaving Facebook is so difficult is precisely because it's a walled garden in which the nodes of the network (friends / family) would have to leave with you! You have to convince everyone to come along. That is not true with value networks. Exchanges make them interoperable and value is fungible, thus your analogy fails on observation. To answer your question, will institutions buy ETH? I think whole heartedly yes. In fact, today a futures market was launched on CME, a necessary precursor. With regards to your last point, Lions are King of the Jungle, but die quickly in oceans or winters. These are adaptive organic systems that exist in the face of environmental pressures, not hierarchal children's stories.
    • AJ
      Aaron J.
      28 January 2021 @ 23:50
      Great reply! I think you make some excellent points! I'm in the "bulk" Btc camp. But i also see a day where the space begins to eat into legacy infastructure beyond the financial sphere. (Just like the internet did). This will eventually give rise to people accepting Crypto as a platform with many layers. I believe bitcoin will dominate for decades to come though. Let's be honest it's really hard to beat an asset with no sales team, front door, or even someone at the helm directing a vision - it's a collective mindset doing the work. And it's in the financial sector which is a huge market! But eventually car manufacturers, delivery trucks and all sorts of area's we can't conceive, I think will be impacted by projects and blockchains. But because money is such a large sector, I also stick to bitcoin being the obvious gorilla on the room that everything else jumps when it sneezes... 👍
  • RH
    Robert H.
    28 January 2021 @ 19:50
    Outstanding article. Well thought out. It provided sufficient depth of the subject without losing the reader. It has certainly prepared me for the coming year. Thank you and good luck to all.
  • AJ
    Aaron J.
    28 January 2021 @ 23:34
    Firstly great read! Thank you for putting in the time. My personal experience (probably being the poorest OG in the world - 2012/2013 and still slogging along as I love it!). For me I'm hardly a maximalist but DO put most of my financial backing behind bitcoin and a bit into eth and a dabble into anything interesting. The reason for this is I have been down the alts road and find bitcoin (as you mention) a much "safer risk" by comparison, I do still dabble long term in alts (mostly ETH and ETH related as mentioned above). What actually scared me the most (and MANY WONT REMEMBER this) is that ETH actually *wound back* the blocks (which caused ETH classic). This was a very sobering and scary realisation when you realise Decentralized doesn't always equate *immutable* storage. This was a HUGE concern for many. And of course then came the bitcoin (forks) alts in droves just to pile on the shit and FUD, I mean we even got a bitcoin platinum and diamond! (Have these changed any code or use case?) **This is where I believe tribalism began.** Would a wind-back happen today? Or a hark fork due to disagreements? EXTREMELY UNLIKELY (perhaps on some centralised projects sure) it's already a much more mature market than in that time period. But my point is for a great deal of the early stakeholders (private whales today if they are not out) it was enough to have many shy away from projects with a real face and owner, because this meant thier investment was still at the whims of a 3rd party to decide if it was yours, not the network. And the space was born out of a pride of being your own bank, or able to hold your own asset with just a node and keys you knew only 4 or 5 people on earth needed the same mindset and it was solid, immutable and Decentralized... I also believe this is why (perhaps), Charlie Lee sold all of his litecoin and chose to let that project run its own course, as it lowered any expectations on him, but meant the market would decide it's direction. (Back then it was silver to bitcoins gold). Today we are already far further down the road than that original concept of bitcoin. And proving everyday new use cases for all sorts of chains. Ironically it looks like Facebook, Twitter and the various platforms censoring people are experiencing this same problem ETH had in its wind-back, today with their social networks. A stigma that will take years to undo. People are realising their data can be removed without warning, and what they considered a safe space for discussion (even with trolls) was not at all. Hence the herd are moving on to new pastures. ** So jumping back into today's Crypto sphere I can certainly understand why some ARE maximalists, but I agree it's not the best long term play. ** Additionally I have found it extremely hard to discuss opinions on virtually any ALT with people on traditional platforms because the tribalism is EXTREME! Far more than the bitcoin community imho. Ask about XRP you get the XRP army saying "stay poor". Ask about ADA you get the Hoskinson homies telling you ETH has had its day. Or the LINK army who tell you it's going to $100 and going to flip everything including bitcoin. So from a personal perspective I have found THIS IS SIMPLY HUMAN NATURE and I feel will be part of the Crypto journey until the investors in the space fully appreciate the diversity. A great example is I ALWAYS get asked by newbies into the space what to buy. I usually suggest they start with Bitcon and learn what it's all about and then look at others they understand the basics. But how many do you think take the 2nd step of learning? Taking the time to figure out what they are holding? Most don't, they just make money, tell their friends how great bitcoin is, throw more at it, and then fall into the maximalist camp. Sadly I don't this this is something that can be avoided UNTIL the lightbulb goes off and the AVERAGE INVESTOR starts to see this space is not as much about changing money as it is about changing the entire structure of industries (the internet and financial space included). But it's already changing logistics, supply deployment and manufacturing tracing among many others. When this understanding hits a critical volume, people will begin to accept all sorts of blockchains and ideas and begin to look at the space as something competing with legacy systems in all sorts of industries. So not against each other even though many of them will overlap. Or as Ivan says, "Evey coke needs a Pepsi in the market" That's my take. So again, thanks so much for the article it was a great read and the analysis was outstanding. But perhaps the bitcoin maximalists sound the loudest because it's simply the largest crowd? *Apologies this isn't structured too well, I just wrote it off the cuff. GL to everyone and I hope 2021 is the year that changes lives for many people!
    • MM
      MARTIN M.
      30 January 2021 @ 22:26
      Excellent piece. Thanks for sharing your thoughts.
    • SC
      Sterling C.
      29 January 2021 @ 07:10
      Tezos = No Hard Forks. Built from scratch. LPoS. Formal verification. On-Chain governance. Inflation Funding. Zero Dilution with real return baking/staking. Cheap. Fast. Scalable. Secure. FA1.2 + FA 2.0. Multi-Asset Shielded Pools, Decentralized. $232M raised. DeFi, DEXs, NFTs, DAOs, privacy (Edo: Sapling) + more all coming in 2021. Ideal for CBDCs. Added by Grayscale... It learns from the pitfalls of both Bitcoin and Ethereum. You're welcome. Ivan is a good guy many follow on YT, but he's lost his way imo.
  • SS
    Stephen S.
    29 January 2021 @ 02:12
    Wonder if there’s a way to display this in a bit more phone friendly way. I’m consider Printing the is out to read it.
  • F1
    Fire 1.
    29 January 2021 @ 05:23
    Questions that I was hoping to see addressed: 1. Is the primary driver of Bitcoin value Metcalfe's law, and NOT stock to flow / halving cycle? 2. Would halving get priced in to upcoming Bitcoin cycles? It seems like halving cycle was not priced in to Bitcoin over the first several cycles, even though the halving schedule is known in advance, unlike gold mining where mining and production is not known and can go through periods of underinvestment in bear markets. 3. What is the potential for Bitcoin to be THE winner based on Lightning and other Bitcoin overlays vs potential for Etherum and other altcoins? 4. Does higher electricity cost for Bitcoin often cited by bears create significant risks, for example, (a) by Bitcoin to be less competitve vs altcoins or (b) by over-concentration of miners in jurisdictions with cheap electricity? 5. The current pricing correction in Bitcoin seems to be happening despite significant institutional adoption. Is this just a "normal" 30% volatility, or is there something more going on here? 6. Is there a wave of institutional adoption of Ethereum and other altcoins also coming in 2021, or are there real hurdles for institutional adoption beyond Bitcoin? I'd be grateful if others could point me to relevant resources, as clearly there are many experienced persons in crypto here, and I am still learning.
    • SV
      Santiago V. | Contributor
      8 February 2021 @ 16:31
      1. In my personal opinion the primary driver of price for decentralized systems with a native digital asset are the network effects driving ownership of said asset. Now, what creates the desire to participate in a network? Narrative. What is the main narrative for Bitcoin? SoV. Why? Because SoV is the inelastic issuance of BTC over a halving schedule that is reflected by the Stock to Flow ratio. The properties of the network monetary policy drive the compelling narrative which drives inflows to the network. 2. Halving is phenomenon that is priced it by anyone in the market with the technical knowledge of what the halving means to STF, but more importantly to value density. If the price is a balance between supply and demand, and the supply is on a predictable schedule, then you can make a reasonable estimation that the network effect (assuming it's rising) will mean increased demand in the face of a controlled supply, hence the value density will rise and the asset itself will be worth more in relation to the fiat network (i.e. $'s). 3. The "WINNER" is an anachronistic term that is convenient because we like to have category leaders. This is also like saying we'll all be using Facebook in 200 years. What matters is which networks are growing fastest in relation to all the other networks. There is no stopping or settling in to anything forever so it's not really like a horse race, it's more like an evolutionary process of multiple organism in constant competition with one another in the face of environmental pressures. The environment is always changing, technology accelerates this change, and with it the appropriate mindset is to identify those inputs most likely to affect the network effects in light of near zero switching costs. 4. Higher electricity costs on creates a risk if global energy costs are fixed and coupled, which they are not yet. There are plenty of arbitrage opportunities for miners for the foreseeable futures. I would be more concerned with governments starting to price in externalities for energy consumption writ large than the absolute price itself. 5. Current pricing is an illusion. If anything the price is sometimes above sometimes below what the network would suggest is appropriate. Buy when it is below, sell when it's significantly above because you know a regression to the network value will occur. Simple, the rest is risk tolerance and timing. 6. Yes. The main hurdles for institutional adoption (which I take you mean holding on balance sheets) is a proper derivatives market for hedging risk and sufficient liquidity for positioning. Ethereum is behind Bitcoin in lifecycle adoption (network effects) therefore it may be a little premature to declare 2021, but now that the dam has broke anything is possible. From a technological perspective, Ethereum's main problem is security via Proof of Work, which by definition does not scale. The main focus in the community is migration to a scalable / secure methodology. We'll see if that improves or detracts from the inflows to the network effect.
    • SC
      Sterling C.
      29 January 2021 @ 07:14
      I wouldn't frame it as Ethereum vs Bitcoin. They solve for different problems. When others answer your questions, you'll forget quickly. When you answer them, they'll stick with you longer.
  • CC
    Christopher C.
    29 January 2021 @ 06:07
    As an engineer, I've watched network effects play out in action. They really are difficult to surmount by competitors once they truly become dominant. As an example, Microsoft poured billions of dollars into Windows Phone development, developed a massive ad campaign, bought (and subsequently spun out) Nokia, and even directly funded app developers to build apps for their platform in an attempt to overcome the network effect that the iPhone and Android had already achieved. Ultimately, it was all too little too late. Even though the Windows Phone launched in 2010, just 3 years after iPhone and maybe 1-2 years after Android, they had already missed the mark. All the app developers had poured their resources into learning iOS dev and Android dev, and the U.S. market had already half saturated with smart phones by then. They were stuck with a chicken and egg problem to bootstrap their ecosystem (need apps to get users, need users to get app devs) and no amount of billions could save them from that problem. When I look at ETH, I see this same iOS-like foothold that I just do not see being seriously challenged by any existing crypto platform. The apps being built on top of ETH are attracting more app developers which is fueling this massive DeFi growth we are seeing in the past year. There's huge network effects with issuing your token as an ERC20 token (that is, an Ethereum standard token) because it is instantly available to trade on any Ethereum wallet or app. Their main risk factor is failing to scale at this point. If they pull off the ETH2 transition in a smooth way over the next year or two, ETH will probably be unstoppable and will suck up all the capital and developer resources (even more than it already does). That's not to take away from Bitcoin, which I believe has the digital gold narrative on lock. But you know, there's more and bigger markets than gold, and if ETH is able to host them, I just don't see the limit to its growth potential in that circumstance.
    • mc
      mark c.
      31 May 2021 @ 20:38
      nice drill down to the root of success
    • SW
      Serge W.
      8 May 2021 @ 21:22
      Christopher, I completely agree, and would go further to say that I believe ETH will out perform Bitcoin over the long run because of Network effects. Since, your original post it has gone from $1600 ash to now over $3800 in value. It has been fascinating to watch.
    • SC
      Sterling C.
      29 January 2021 @ 06:43
      Tezos has had 5 seamless upgrades in the last 2.5 years including some very substantial ones. Meanwhile Ethereum will take 8 years to complete one. Governance will eat network effect. When we're talking critical infrastructure, you build on something built to last. That something is Tezos. Time will tell.
    • CC
      Christopher C.
      29 January 2021 @ 06:11
      There's something else I want to add to this...Are we so sure that the historical sell offs that happened in the crypto markets in the past will happen in this ongoing rally? Do we expect the -80% retraces once crypto begins to achieve broad adoption, as it is currently starting to? I wonder about that myself, I just feel like as the market caps grow, those retraces will shrink.
  • SC
    Sterling C.
    29 January 2021 @ 06:49
    $BTC : Programmed money $ETH : Programmable money $XTZ : Self evolving programmable money
  • SC
    Sterling C.
    29 January 2021 @ 06:52
    In Bitcoin, you don't have a voice. In Ethereum, you don't have a voice. In Tezos, you have a voice. The decision isn't hard.
    • JK
      Jp K.
      30 January 2021 @ 22:49
      What can you do with the voice?
  • JS
    Jamie S.
    29 January 2021 @ 07:22
    Thanks RP. Great read. I'm fascinated by Metcalfe's Law. Like many, I haven't had the inclination to dive into a lot of the Alts & will likely stick with the herd - bitcoin & ETH. This is a fascinating time in finance all around. I worry somewhat that the WSB movement turning up en masse in crypto will drive it to crazy prices that may make my hair blow back ! Still, I've had a glass of wine now and feeling more optimistic.
  • jL
    jean-marie L.
    29 January 2021 @ 07:47
    Bitcoin's goal is far more important than all other coins. It's trying to end the exorbitant privilege of the Global monetary reserve that allow a country to dominate the world. All the rest is futile.
  • dd
    dave d.
    29 January 2021 @ 22:14
    Soo Good, Great fundamentals and deconstructed just enough for the layman to understand.
  • JM
    Jeff M.
    30 January 2021 @ 05:12
    I Love You Raoul!
  • JH
    Joe H.
    30 January 2021 @ 19:13
    Thanks Raoul for sharing this article. Very informative. As newbies like myself continue to understand the Crypto market anything we watch, or read can be goof or bad information, though with your site we know the narrative is to inform us with good information. Thanks - Joe Hendrickson
  • MT
    Marian T.
    30 January 2021 @ 23:12
    Thank you Raoul and Team
  • NS
    Nazim S.
    31 January 2021 @ 09:19
    Thanks Real Vision
  • IF
    Ilias F.
    1 February 2021 @ 08:51
    Thank you!
  • JA
    JAK A.
    1 February 2021 @ 20:02
    Thank you for such a great report. The thing that scares me most are regulations.I am afraid they are not gonna help this industry.
  • JL
    Jeremy L.
    1 February 2021 @ 22:11
    great analysis and insight, but can you dig deeper into transactions? Santiago says the value of a digital asset has to trade above the underlying compute costs (OpEx +CapEx) - true, but - in Bitcoin's case this means mining rewards and transaction fees have to exceed mining costs; as mining BTC rewards halve every four years, transaction fees need to take the strain over time - but what are the scenarios? more transactions (but constrained by the protocol at ~7 tps), much higher per txn fees (but constrained by economics) or much lower costs (but constrained by the hash rate which has to remain high for the network to be secure)? - no transactions, no network utility, no value, so there has to be transaction growth is the answer massive volumes of off-chain transactions (eg the Lightning network) at virtually zero cost, but settled in aggregate periodically on-chain at a high fee? in which case, does this solidify the investment case for BTC as a SoV, or weaken it?
    • SV
      Santiago V. | Contributor
      7 February 2021 @ 20:59
      Specifically this statement is only true for PoW digital assets. If the underlying costs are greater than the market price of the digital asset for a sustained period of time miners will first burn through reserves and then capitulate. The end result is that the cost of hash will commensurately drop (ASICs flood the market) and the network difficulty will adjust accordingly to maintain the desired block time. Ultimately this means an opportunity for large miners to consolidate operations meaning concentration in the hashing power. The only thing that combats this is a non-linear appreciation in the digital asset from network effects. The virtuous cycle of price appreciation that improves the security model can also become a death spiral under the wrong circumstances. This is the long term security trilemma. Off chain transactions from a security standpoint are no different than just using an exchange or other layer 2 compromise, at the end of the day Layer 1 needs to stand on the merits of it's own tokenomics otherwise why do we need a layer 1 at all and we're right back to were we started using trusted counterparties.
  • VB
    Vernon B.
    3 February 2021 @ 05:48
    Thank you very much for providing this analysis. Great work Real Vision!
  • VB
    Vernon B.
    3 February 2021 @ 05:48
    Thank you very much for providing this analysis. Great work Real Vision!
  • VB
    Vernon B.
    3 February 2021 @ 05:48
    Thank you very much for providing this analysis. Great work Real Vision!
  • VB
    Vernon B.
    3 February 2021 @ 05:48
    Thank you very much for providing this analysis. Great work Real Vision!
  • VB
    Vernon B.
    3 February 2021 @ 05:48
    Thank you very much for providing this analysis. Great work Real Vision!
  • VB
    Vernon B.
    3 February 2021 @ 05:48
    Thank you very much for providing this analysis. Great work Real Vision!
  • VB
    Vernon B.
    3 February 2021 @ 05:48
    Thank you very much for providing this analysis. Great work Real Vision!
  • VB
    Vernon B.
    3 February 2021 @ 05:48
    Thank you very much for providing this analysis. Great work Real Vision!
  • VB
    Vernon B.
    3 February 2021 @ 05:48
    Thank you very much for providing this analysis. Great work Real Vision!
  • VB
    Vernon B.
    3 February 2021 @ 05:48
    Thank you very much for providing this analysis. Great work Real Vision!
  • GT
    Gerald T.
    11 February 2021 @ 15:44
    The download button is not working for me.
  • tb
    tevado b.
    12 February 2021 @ 06:49
    well written as well as great exposure for people like myself still new and trying understand macroeconomics and just economics in general.
  • SD
    Shayne D.
    21 February 2021 @ 04:23
    To extend the bubble of bubbles talk, what would be the value of a network of networks? Basically, the value of the interoperability between the bitcoin network, the ethereum network and any other networks that rise this cycle.
  • Vf
    Vince f.
    27 February 2021 @ 19:30
    Excellent research report Raoul. 3 comments. 1) On Twitter: Take it with a big grain of salt. Too many anonymous Twitter-ppl out there, who just tweet w/o really thinking things through. I am very selective with people I follow, practically ignore 95% of all accounts/comments from anonymous accounts. It's in a way a weird place: one can post the most outrageous/silly/insulting/snide comments&content, without being held accountable (How would that work in real-life? NOT). Also increasingly much spamming from bots, scams being posted -- Twitter should really improve their surveillance. Either way, I digress :-) 2) On ETH: I believe you maybe wrong. I figured out over the past few months that something is off. I followed your narrative for a while. Yes it's the no.2 crypto, yes it has practically a monopoly, benefits from network effects etc. Nevertheless, I realised more and more that techies had difficulty with "high gas fees", were not happy with the way ETH is governed etc. I looked what Dapps were really running on ETH and was disappointed on the lack of depth&substance (sushiswap, seriously ?!). Development activity started to lag compared to developments for/on other chains. Vitalik controversy. A bit like a ship without a captain, like a Wikipedia, hoping contributions will all be constructive and things get better. I couldn't quite put my finger on it, but I felt I was on to something. I couldn't be bothered to really get to the bottom of it. So I just parked it for a couple of weeks. 3) Rather than focus on the negative ("what's wrong with ETH"?), I thought: let's focus my analytics & brainpower elsewhere. Mid-December I had 4 other tribes in the running - I had invested sizeable-yet-bearable-loss amounts in XRP, DOT, ADA and LINK. When Ripple got sued (Christmas), within a week I sold (no ifs and bits) with a small loss. That tribe got busted :-) I paid a small price, but learned a valuable lesson. It was then down to 3 tribes only: DOT, ADA and LINK. LINK is also important tribe but I see/expect no fireworks there yet. Kind of the hardworking horse. DOT I haven't looked into sufficiently. The more research I did, the more I liked what I saw in the ADA tribe, in random order my 5 Why's for Cardano: 1️⃣ Bold vision on the future of finance (not just cheaper/faster transactions/Dapps) 2️⃣ Impressive developer community, "scientists with a purpose" 3️⃣ Founder (track record, persistence, more than data skills) : a mathematician who's been in the crypto industry for over a decade. The guy has humour, is open, sometimes makes a mistake. A genius with a well-rounded skill profile (unlike a Vitalik IMO). 4️⃣ Scientific approach (monetary engineering/mathematics) : they take their time for development, roadmaps, roll-outs etc, which is a good thing! 5️⃣ Staking rewards: these approx 5% rewards (paid out in ADA's) reduce volatility: staked ADA's take a week or so before the holder can sell them. About 70% is staked. Clever as these stakings create more loyalty of holders to Cardano. The rewards get paid out steadily, I believe the first time after a 2 week waiting period (also clever!) Bitcoin as a tribe I'd summarize as: big ego, brash, alpha-male, "get-rich-quick", "fuck-all", Scaramucci/Tony Soprano/Max Keiser --> force is the dominant trait, like a Gorilla/Godzilla; Cardano as tribe is more like: humble, "I have your back" --> intellect/humbleness/social as opposed to "me, myself and " are the dominant traits I see, in animal terms more like a dolphin or elephant.
    • AA
      Abubakar A.
      6 May 2021 @ 21:34
      This is awesome
    • SR
      Sean R.
      27 March 2021 @ 11:29
      Don't mistake SushiSwap for a joke it's a service and it works amazingly well
    • WL
      Wei L.
      15 March 2021 @ 04:51
      Hey Vincent, those were great observations you made about ETH compared to ADA, which I agree with entirely. Have you managed to look into DOT a bit more since your comment? From what I gathered, there seems to be a subtle but distinct difference in the way ADA and DOT handles its 'interoperability' aspect of itself. My personal opinion is that Charles Hoskinson, in making ADA, served to create a complete and top-down infrastructure, whilst Gavin Wood, in making DOT, went with a completely opposite approach of introducing a sort of 'Layer 0' interoperability protocol. I like to think of the two as such: Charles in making ADA is creating a conglomerate blockchain for developers with its infrastructure, whilst Gavin in making DOT is integrating itself as an extension into a blockchain. An analogy would be ADA is the tree hoping to grow the biggest and absorb most of the other trees into its growth and influence as a (hopefully) cooperative ecosystem, whilst DOT is hoping to be the fertilizer which helps grow any tree, acting as an extension instead. Its interesting to me that Vitalik's dream of a 'world computer' had rubbed off of Charles and Gavin to create their own versions of 'world integration with blockchain'. I personally hold a sum in both ADA, DOT and of course ETH, and I trust all three founders in their pursuit, however different their approach and development is, whether it be subtle or drastic. Vitalik Buterin spawned a whole generation of bright blockchain visionaries who dare to push the boundary and create a world of Web 3.0. Charles Hoskinson is a brilliant mathematician who managed to use his experiences and lessons from failure to spawn one of the most ambitious projects in the blockchain space, not to mention its been going extremely well. Gavin Wood whom was the (previous) CTO of Ethereum's development holds a PhD in CompSci and used his technical genius to see things in a more creative aspect and created an interoperable extension to the blockchain space which I never expected could be done.
  • mr
    matteo r.
    7 March 2021 @ 16:56
    Raoul Pal my I suggest to look at the theory of Theory of Evolutionary Risoning. It new and in contrast to some aspect to Darwinism, but it still apply here.
  • DJ
    D J.
    27 March 2021 @ 14:15
    Several issues and assumptions are made and not accounted for in this analysis. 1) the friction and barrier to entry for bitcoin to become a stable currency with nominal velocity is not adressed. Stock to flow has great weakness in that it compares flow, which is currently retail and volatile with a decreasing stock - not representative of a currency characteristics. 2) the transaction value for bitcoin to prosess a payment has risen exponencially (not decreased as promised), and curiously lett out of the presentation. 3) most of the miners (the professional ones) be affected by the CO2 quitas which will raise their cost of capital. 4) there is currently debated increased VAT on electricity for miners and this has been put inplace in scandi. 5) also goverment and etc, I can go on but dont want to spoil the mood. But hey ... lets all go buy bitcoin.
  • DS
    Dean S.
    11 April 2021 @ 02:26
    Thank you Raoul for another very informative and thought-provoking piece! I work in the fertilizer industry and just yesterday I saw in an industry trade publication that a $270 M Intra-African Fertilizer deal was completed using blockchain. I've never seen this before. The transaction was managed through Singapore using dtledgers blockchain technology. When viewing dtledgers website it appears the deals are settled using XRP. The deal is between OCP of Morocco and Ethiopia. Blockchain allows the deal to be completed in under two hours versus the 3 weeks to complete a normal transaction. International fertilizer exports are worth > $57 Billion USD a year. The chief exporters are places like Russia, the Gulf States, Egypt, Morocco, China, Iran, Nigeria etc. Places that may not want to use USD, which is the way most transactions are priced. This is part of OCP's digitization strategy with the aim to "reduce the trade finance gap in Africa and boost trade between African countries particularly the fertilizer sector". I thought it was a groundbreaking example of the use of blockchain and crypto.
  • KV
    Keld V.
    20 April 2021 @ 10:50
    Great report. I do wonder sometimes though when you seem so interested in other cryptocurrencies: Does it not bother you that they are not decentralized? For me this is a core tenet - a requirement that can not be compromised on. 99,9% of the other cryptocurrencies do not fulfill this requirement. Either they have a company and a CEO behind them, or they have all nodes centralized in a datacenter (ETH), or there are too few nodes, or the node operators are colluding (EOS). Or they are using POS which means the richest people control the protocol. I just keep asking myself, what's the point if it's not decentralized? Then why use a blockchain - which is the slowest database in existence - it only makes sense to use this tech if fulfills the core requirement of decentralization imho.
    • FM
      Francois M.
      4 September 2021 @ 12:49
      That's a key point. The best decentralization is obviously something to strive for but more centralized solutions can still add value. Think of high speed low value transactions that can happen at low cost on Solana. That could be useful for example for games that have intricate economies. Not all applications require the best network security. The whole ecosystem will grow with different chains adapted to different needs.
  • HC
    Hugh C.
    17 May 2021 @ 09:52
    Great report thanks Raoul.