The Chief Communication Officer of the Sweden-based cryptocurrency exchange, Bitrefill, John Carvalho, previously asserted that digital assets would play a more significant role in the global payment infrastructure after leveraging Bitcoin and its second layer scalability solution, Lightning Network.
But the recent usage of the word “Abacus”, by Bitcoin Unlimited’s Peter Rizun, to define the LN’s structure, drew its own share of criticism.
Many in the crypto community called Rizun’s idea of the Lightning network to be “oversimplified and misleading”. In a recent talk session held by “The Bitcoin Game“, Carvalho was asked if he liked Rizun’s metaphor.
In response, the BTC proponent admitted that it’s appealing at first, but said that there was a need to understand the concept of how liquidity and Lightning work. Comparing it to the ledger, Carvalho said that “Abacus” was limited. He stated,
“In abacus, things move from the one end to other, you know it’s just one bar. But the problem is that it actually an array of abaci. And its abaci of abaci. So everybody is keeping track of who controls what.”
The CCO further asserted that he would rather call the Bitcoin scalability layer 2 solution as a “serialized mempool” and added that it is almost like an “organized mempool”.
According to Carvalho, it is extremely “redundant” for Bitcoin to be “cheap and free” when it is so secure and added that solutions like layers and side chains will eventually play a more significant role in the future.
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Bitcoin’s on-chain/off-chain valuation indicators the key point of focus as coin heads to $13,000
With the rise in Bitcoin’s price, the rest of the cryptocurrency market has followed suit by displaying a green trend across the board. In a recent series of tweets by popular cryptocurrency analyst Adam Tache, users were informed about the top Bitcoin on-chain and off-chain valuation indicators, derived from on-chain valuation models.
The analysis touched on the Mayer Multiple created by dividing the price by the all-important – 200 day moving average. The current average Mayer Multiple stands at a figure of 1.39, which may climb higher. Looking at previous figures, the normal Mayer Multiple figures stated that if the value shoots up to 2.4, then Bitcoin eventually retraces back to a comfortable 1.5. The Mayer Multiple is usually considered as the original indicator used to clock the valuation of Bitcoin.
Another major indicator discussed in the thread was the NVT Ratio invented by Willy Woo, Partner at Adaptive Fund. The indicator is used to calculate Bitcoin’s prominence or value in the cryptocurrency space by evaluating the amount transacted on the blockchain as a “proxy for investment flow and bear and bull market cycles.”
At the moment, the NVT ratio for Bitcoin is in an abnormal region compared to the start of previous bullish patterns. The NVT ratio was above the “bear market” separator, which meant that the cryptocurrency was overbought. When Bitcoin is overbought, it usually means that the buying pressure is much higher than the selling pressure. Adam Tache opined,
“NVT signaling overbought is likely due to a number of factors — namely the proliferation of exchange-based, purely off-chain txs driving short-term price action.”
The analysis also pointed out the liveliness of the Bitcoin indicator created by Tamas Blummer. The indicator showed the inverse count of lost or ‘HODLed’ Bitcoin, while stating that when the ratio increases, long-terms holders of the cryptocurrency decrease their positions. The indicator conveyed accumulation of Bitcoin when the ratio decreased.
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