Prominent on-chain analyst Will Clemente is weighing in on the strength of Bitcoin’s rally as the leading cryptocurrency soars above $47,000.

In a new issue of Clemente’s newsletter, the on-chain analyst says that crypto whales, or entities holding over 1,000 BTC, have massively accumulated over $5 billion worth of Bitcoin (BTC) in the last few weeks.

 

“One of the most interesting developments over the last 1-2 weeks has been the increase in the holdings of entities (forensically clustered addresses) with over 1,000 BTC (aka whales)… Since July 27th whales have added 107,150 BTC to their holdings.”

Clemente is also looking at the activities of long-term holders in an effort to determine whether Bitcoin’s rally above $47,000 is a bull trap or a dead cat bounce.

According to the on-chain analyst, the investor cohort is not showing behaviors similar to the December 2017-January 2018 bounce when Bitcoin printed a lower high at $17,000.

“During the 2017 dead cat (the scenario many seem to be basing this framework on), there was massive sell-off from market participants that hadn’t moved their coins in at least 6 months. They took exit liquidity on the first opportunity that they were given.

We are not in fact seeing that same behavior currently, invalidating the dead cat bounce narrative from an on-chain perspective thus far. Long-term holders are currently sitting tight and holding strong.”

The on-chain analyst is also looking at funding rates and the leverage ratio to potentially determine whether or not traders are heavily speculating on Bitcoin derivatives and futures markets.

According to Clemente, the funding rates and the leverage ratio are currently low, suggesting that the rally is possibly being driven by organic buying and selling in spot markets.

“The fact that funding is so low compared to where it was at the same price levels in February shows that this rally is much healthier, and spot-driven rather than derivatives. Leverage is also relatively low compared to when BTC was at the same price levels in February. Again showing this rally has been healthy.”

The sports and cryptocurrency worlds are discovering a somewhat expected synergy. These days the link between football and crypto is becoming more prominent, especially in Italy, but not only. 

The news that Leo Messi received $PSG fan tokens in his welcome package is a point of no return for football. And considering that Socios (which issues the fan tokens) is partnered with around twenty teams, it is to be expected that other clubs may do what PSG did with star Messi. 

But it is in Italy that the relationship between football and cryptocurrencies is becoming very close. One wonders what Cristiano Ronaldo would think if part of his salary was paid with the $JUV fan token. 

After all, Juventus was one of the forerunners, using the fan token to vote for songs to be played at the stadium, and even to choose the jersey. 

Juve was soon joined by AC Milan, Roma and Inter Milan, partners of Socios and therefore with their own fan tokens. 

But the story doesn’t end there. 

While on the one hand there is Socios with its fan tokens, on the other, there is Sorare with blockchain fantasy football. 

Well before the NFT hype, Sorare had started partnering with football teams to turn players into NFTs that could be exchanged on the Ethereum blockchain. Of course, Sorare has not limited itself to Italy: Paris Saint Germain, Real Madrid, Zenit St Petersburg, and many other teams have turned their players into NFTs, replacing the classic sticker album. 

Sponsorships consecrate the relationship between football and cryptocurrencies in Italy

Then there are the sponsorships. Italy is leading the way here. Last May, Crypto.com sponsored the Italian Cup final.

At the moment, there are three teams with cryptocurrency companies as sponsors. 

In the beginning, it was AS Roma with DigitalBits. Then followed Inter with Socios. In these cases, we talk about the main sponsor, which is the brand that appears on the front of the players’ uniforms. Then came Milan, with BitMEX as sleeve sponsor, with the logo clearly visible on the sleeve of the uniforms. 

This turn of events is no coincidence: football clubs have suffered not only from the lockdown, but a whole year of closed stadiums, which has led to reduced revenues. Sponsorships with crypto companies take advantage of an up-and-coming sector with lots of cash and create a new relationship with fans, who have been pushed out of the stands.

There is every reason for this relationship to grow stronger. And given the popularity of football in Italy and around the world, it cannot be ruled out that this could lead to an increase in cryptocurrency adoption. 

 

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Will Solana be the one? The race to be the prime smart-contract-enabled blockchain is heating up. Many projects are chasing Ethereum’s tail, offering faster and cheaper transactions plus technological innovations. What does Solana offer? An internal clock. An incredibly higher number of transactions. Fees so low that are almost non-existent. The possibility to scale to global adoption in their layer 1. 

Related Reading | Solana to Launch Stake Pools, This Is How It Will Enable Rewards For SOL Holders

Will this be enough to capture the market? Is Solana the mythical Ethereum-killer that everyone is looking for? Keep reading and get enough info to make your own mind. We’ll summarize the good, the bad, and the ugly in digestible bullet points and short text.

What Is Proof Of History And How Does It Work? 

Contrary to what the name suggests, proof of history is not a consensus mechanism. Solana uses Proof-Of-Stake to validate its blocks. “The core Solana innovation is Proof of History (POH), a globally-available, permissionless source of time in the network that works before consensus,” says the following video’s information box. 

To drive the point home, let’s also quote Techcrunch:

Enter Yakovenko’s big idea, which he calls “proof of history,” wherein the Solana blockchain has developed a kind of synchronized clock that, in essence, assigns a timestamp for each transaction and disables the ability for miners and bots to decide the order of which transactions get recorded onto the blockchain. Yakovenko says doing so allows for greater security and “censorship resistance.”

Solana’s creator is Anatoly Yakovenko, a San Francisco resident “who spent more than a dozen years as an engineer working on wireless protocols at Qualcomm.” He wasn’t interested in cryptocurrencies until he figured out a way to improve the system. In traditional blockchains, the blocks don’t carry a timestamp and that leads to inefficiencies. Yakovenko figured out a way to include it in the SHA-256 (Secure Hashing Algorithm 256) hash function, and the rest is history… proof of history.

Other Innovations That The Solana Blockchain Offers

This section will be the only technical part of the article, we promise. To start, we’re going to quote EVALUAPE’s analysis. They’re “a platform for demonstration and evaluation of blockchain projects.”

VDF, Verifiable Delay Function:

A function used to generate PoH. It is a collision resistant hash function. In short, this is a function that takes a bunch of data inputs and spits out an output in fixed size. The main advantage of the function is its security.

Avalanche Communication: 

Simply speaking, since the hash value in every timestamp is calculated by the previous hash value, a long range of hash value can be broke into small partitions to be verified separately by the nodes. Each node only needs to verify a partition of hash value, and then concatenate and restore to a long hash value. 

And for the next batch, we’ll quote Decrypt’s analysis of the Solana platform.

Tower Consensus, a variant of Proof-Of-Stake that:

Enables distributed networks to reach consensus despite attacks from malicious nodes, known as Practical Byzantine Fault Tolerance (PBFT).

Solana’s implementation of PBFT enforces a global source of time across the blockchain through a second novel protocol known as Proof of History (PoH).

Sealevel:

This allows for a parallel smart contracts runtime that optimizes resources and ensures that Solana can scale horizontally across GPUs and SSDs, which should help the platform scale to meet demands.

Gulf Stream:

Solana also completely nixes the mempool system used by other platforms, and instead forwards transactions to validators even before the previous batch of transactions is finalized. This helps to maximize confirmation speed and boost the number of transactions that can be handled both concurrently and in parallel. 

Key Characteristics Of The Solana Blockchain

• Technically, it’s still in beta. Their MainNet is up and running, though.
• Low barrier of entry to become a validator. There’s no minimum stake to start validating, but the possibility of being selected is directly tied to the size of your stake.
• It’s even faster than legacy financial systems AND centralized cryptocurrency exchanges. 
• Over 100 projects were building on Solana by the end of 2020. Now, there are more than 250. The growth is exponential.
• At the time of writing, their official stats report 905 validators and 1331 nodes. The Avg. fee per transaction is $0.00025.
• They currently report 1,375 transactions per second.
• The project supports smart contracts in any programing language.

Powerful Allies And Co-Signs

• It’s the “official chain” for USDC. And USDC is the second-largest stablecoin in the world.
• Sam Bankman-Fried’s FTX and Alameda Research. Their Serum DEX runs on Solana, as well as their projects Maps.me and Oxygen, a borrowing/lending DeFi protocol.

Related Reading | Why Solana and Polkadot Have Been The Least Impacted By The Crypto Crash

Solana, Criticism And Scandals 

• Even though they have ample documentation freely available, the project doesn’t have a clearly defined roadmap.
• Their official tokenomics clearly say “Subject to change.”
• There’s not enough information about the functions of the Solana Foundation. And they hold more than 10% of the SOL token. And manage a community reserve of a whopping 38%.
• Someone detected a mysterious wallet with 11,365,067 SOL. They ended up being an undisclosed loan from the Solana Foundation to a market-making firm that provided liquidity on Binance. Those tokens were eventually burned, but wow.
• In December, for six hours, “Solana’s Mainnet Beta network halted new block confirmations, which resulted in a temporary outage.” The reason was “A validator booted up two instances of their machine and it started transmitting multiple different blocks for the same slot, eventually creating 3 different unconfirmed minority partitions of the network. ” Their excuse was that Solana is still in beta, which is fair.

SOL price chart for 08/15/2021 on FTX | Source: SOL/USD on TradingView.com

A Quote To Close This

About Solana’s objectives, Anatoly Yakovenko told Techcrunch:

“Everything that we do to make this thing faster and faster results in this better censorship resistance and therefore better markets,” he said yesterday. “And price discovery is what I imagine is the killer use case for decentralized public networks. Can we be the world’s price discovery engine? That’s an interesting question to ask.”

Featured Image by Zack Dowdy on Unsplash - Charts by TradingView