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Hex would like to become the standard digital payment. In this review, I discuss what are the forces that will push Hex in this direction and what are the other forces that will push against.
It is more likely for Hex to do a 10x than for Bitcoin to do a 10x.
Speculators own Bitcoin because they want to get rich quick. Bitcoin has a market cap of 167 billion. If speculators are in for quick wins, they might no longer find them in Bitcoin. For Bitcoin to do a 10x it needs to move from $167 billion to $1.6 trillion. That is very difficult, the economic mass to achieve that is enormous.
Hex will also be used by speculators who definitely have a higher risk appetite than those using Bitcoin. It is more likely for Hex to do either a 10x or a 10x down than for Bitcoin to move in that direction. This is because Hex market cap will be smaller so it will take much less economic energy to move it.
Bitcoin mining is centralized, which threatens censorship Resistance. Hex’s is not.
Bitcoin can only function with miners. These miners buy specialised hardware, then find a place with cheap labour and cheap electricity to run them. These can be found in China and so most miners are based in China.
China has shifted back and forth on blockchain, it banned it at times and praised it others. These miners approve transactions and can collectively decide to drop a transaction or censoring it. If these mining pools surpass 50% of the hashrate can theoretically roll back a Bitcoin transaction.
Ethereum mining is less centralized because no specific mining hardware is needed, any computer can mine Ethereum.
Learn more: Bitcoin Mining options
Hex is more environmentally friendly than Bitcoin
The mining system of Bitcoin consumes as much electricity as the whole of Switzerland.
Millennials are more environmentally aware and conscious of these factors. Think Greta Thunberg. Millennials are the next generation of Bitcoin holders and they need to embrace all of it in order to adopt it.
The fact that Bitcoin is a great polluter, may shift them to other environmentally friendly cryptocurrencies. Hex works on top of Ethereum, which is moving to an environmentally friendly mining scheme called Proof of Stake, rather than proof of work. This makes Hex more environmentally friendly than Bitcoin, which could attract environmentally friendly crypto investors.
Bitcoin Miners have to dump Bitcoin to maintain cashflow Hex Stakers have an incentive to hold Hex and not dump it.
Bitcoin miners have to constantly dump Bitcoin in order to maintain cash flow. Miners have expenses and their only source of income is Bitcoin, which comes from mining Bitcoin blocks. The people who secure the network are also providing selling pressure. Hex, on the other hand, has no miners of its own. It piggybacks on the Ethereum miners. Even they do not get any Hex when they mine a block.
In the Hex ecosystem, there are no actors which have conflicting priorities. Bitcoin’s inflation is given to those who want to sell it rather than those who want to keep it.
The Bitcoin community can agree to increase the limit of 21 million Bitcoins. Hex inflation rate cannot be changed.
Bitcoin Miner’s incentives are not aligned with those of the Bitcoin holders and Bitcoin developers. Proof of this is the fork of Bitcoin into Bitcoin Cash and Bitcoin SV. This happened because the developers wanted to make transactions scalable but also to be able to take a share of that transaction fee. Bitcoin miners were of course not in favour of this.
Bitcoin has a limit fo 21 million coins and more coins are generated when a Bitcoin block is mined. This block reward shrinks the more blocks are mined. This means that miners have a harder job to keep up the profitability.
Bitcoin mining’s profitability depends on the number of coins mined multiplied by the price of coins. There is a non-negligible risk that the miners might propose to increase the limit in order to maintain profitability. This risk is small and if it ever happened there would be another Bitcoin fork, each time this happens the hash rate drops and this reduces the networks’ security. Go here to: Claim your Hex
Bitcoin has global brand awareness and a huge user base. Hex does not.
To piggyback on Bitcoin’s user base, Hex will offer free Hex to all Bitcoin hodlers. This kickstarts the Hex ecosystem. It does not mean that Hex will have the same user base as Bitcoin does, but it creates users. Some more willing than others.
Each Hex claimant will have 10% of the Hex available and the other 90% will be auto staked. This is interesting because all those who claim will be able to dump only 10% of the coins on the market.
They will have to wait for the first auto stake to end. It could be that by the time that arrives, Hex goes up in price which could make them think twice about dumping their whole Hex bag.
Hex has an unbeatable unique selling proposition to get it going: free money.
Hex is not a security nor an airdrop not a fork (according to Richard Heart)
If Hex is classified as a security it has a myriad of challenges, to deal with.
The Hex FAQ states “No. There is no money paid to a common pool with the expectation of profit from the work of others.” Hex is not an airdrop because claims are mined when a claim is done.
This is more like mining Bitcoin. If this is the case, then Hex does not have to look forward to any dealings with the SEC. There is still a lot to be learnt on this, and everything is fluid, so take this with a few pinches of salt.
Passive income from Bitcoin is not profitable and very risky. Passive income from Hex is more concrete.
To earn passive income from Bitcoin you can lend it. To do this you need to deposit Bitcoin with companies like BlockFI or CoinLoan. There are risks when doing this because these companies can be hacked. Your deposits can be stolen. If this happens they would not be able to give you your deposits back. These companies have through security to make sure this does not happen, but once you give up your Bitcoin’s you do not own it anymore. Your asset are now an IOU.
The second way to make a passive income from Bitcoin is through mining. The challenges to mining are that you need to buy competitive hardware and use it with competitive electricity rates.
A new miner will make 50% of its profit in the first few weeks, so if it arrives late the profitability is gone. Secondly, online mining companies have a tendency to crash and burn, losing all investors money. Genesis Mining has been around for a while, but still when Bitcoin fell from 20k to 7k many indefinite mining contracts were closed down.
Passive income from Hex is as straightforward as a term deposit Deposit account. There are a few additional bonuses that make it more existing though. The thing to keep in mind that a bank CD is on the basis of a FIAT currency. These currencies have a central bank behind them which tries to keep their purchasing power stable.
On the other hand Hex demand and supply are governed by the free market. There is zero guarantees that staking with Hex will create a profit in your base currency, it only guarantees that your bag of Hex will only increase.
For example, you could invest $100 in Hex and get 1,000 Hex. then stake the Hex for three years and end up with 2,000 Hex. However, the price of Hex in USD is down 90%, in this case, you would make a loss in Us Dollar Terms.
Satoshi the founder of Bitcoin is probably dead. Richard Heart the founder of Hex is alive.
Although Bitcoin has many well-known evangelists, its founder is nowhere to be seen. Satoshi is not writing Bitcoin Improvement Proposals or BIPs. Satoshi is not there to defend the Bitcoin ticker. Satoshi is either cowardly or dead. Satoshi owns 1 million Bitcoins, if someone inherits this much Bitcoins from Satoshi, there is a risk that these coins are dumped on the market.
The minute those coins move, the BTC market will go berserk. The risk of this happening, probably decreases every day this does not happen. Every day Satoshi does not show up increases the chance that his coins are lost forever.
Hex’s founder Richard Heart is alive, he is out there promoting Hex. Some people love him, others hate him. His passion for the project, at least up to now, is unquestionable. The advantage of having Mr Heart at the helm is that he has a long string of successful businesses, which means he is very results-oriented.
Hex is probably not a scam, but the actions of the originator account will have an impact on the Hex price.
You can find an analysis on this here: Is Hex a scam? In a nutshell, the originator account will receive a share of the bonuses and penalties within the system. The originator account will probably be the biggest holder of HEX. He can either dump it, keep it or stake it. If he wants to he can sell parts of it and then use the proceeds to promote Hex. Mr Heart has made it very clear that the originator account has made zero promises and has zero obligations. This risk is not trivial and it is up to each investor to evaluate it.
Hex is not the only cryptocurrency with the aspirations to become the standard in digital payments.
There are many cryptocurrency projects competing with Hex and Bitcoin. They all want to become the defacto digital money standard. They all have some unique selling proposition. Bitcoin has brand name and hash rate, Dash has a treasury, Monero is the preferred currency for dark markets, Bitcoin Cash has big blocks, Tether is a stable coin tied to the USD, Decred has a unique governance and vote staking model, SmartCash has taken a foothold in Brazil, Hex has built-in CDs and an economic systems focused on holding rather than selling.
All of the above systems have an important lead on Hex. They already have a following and a headstart in the race competing to become the next internet money. Hex is a latecomer to this game, and that is a very significant disability. The first mover and the head of the pack is clearly Bitcoin, unseating the king is never an easy feat.
The interest in Hex needs to be sustained by those holding it. The motivation for a project is fatigued after the initial fuzz, which might lead to a drop in demand and prices.
Bitcoin has a lower inflation rate than Hex.
In 2020 Bitcoin’s inflation rate will drop below 2%, Hex will have constant inflation of 3.69%.
Bitcoin miners need to sell their coins to maintain operations, Hex stakers do not need to do so.
The difference is that Bitcoin’s inflation is probably dumped on the market and Hex’s inflation is less likely to be dumped.
Bitcoin is accepted by 15,000 merchants, Hex is accepted by zero merchants at launch.
According to the internet, there are some 15,000 merchants that accept Bitcoin and this number keeps growing. This gives Bitcoin utility. Bitcoin regularly has over 300,000 daily transactions. Hex has not launched yet so it has zero transactions and is not accepted anywhere.
Storing wealth in either Bitcoin or Hex is a risk.
Those who buy Bitcoin do so because they believe they can sell it to someone else at the some price or higher. There is a faith element in Bitcoin just like there is in any FIAT currency. Those who have it, believe they can exchange it between each other for goods, services or other forms of money.
The mass movement of people who believe in Bitcoin do so because of its history and track record.
Bitcoin was created in 2009, Hex in 2019. Bitcoin has a 10-year head start. Millions of people know about Bitcoin and the internet is flooded with information about it. The recognition brings with it liquidity, as all crypto exchanges list Bitcoin and this reduces the cost of the spread.
Hex, on the other hand, has no history or track record, which makes it hard for people to believe in it blindly.
In time this may change. This is why the earliest speculators have the most risk and the most reward and loss potential because they are the first to take that risk.
Learn more: Bitcoin vs Hex a comparison
Unfortunately, illegal Dark markets use Bitcoin. Hex could also be adopted by dark markets though.
To some extent, Bitcoin is used to trade illegal drugs, illegal pron and those using in dark markets.
If Hex becomes widely recognised, it could also be used in illegal transactions, which can harm Hex.
It is very negative for either Bitcoin or Hex to be used in illegal activity and this “growth” will ultimately backfire through increased regulation and negative public opinion.
Hex governance system is non-existent.
Governance is a messy subject. When there are people with conflicting agendas it always gets messy. Hex has chosen the path of zero governance.
Once the system is launched it cannot be changed.
Even if the community wanted to, they cannot. The community can fork Hex, but the original Hex will keep existing as long as Ethereum does.
Looking at the issues in governance in other cryptos, such as, EOS BP vote buying, the delays in Dash Evolution and the many Bitcoin forks, one might start to think that maybe no Governance is the best governance.
Hex game theory system is superior to Bitcoin.
This is where Hex outshines all other cryptos. Hex was designed for Hex coins to be more in demand than in supply. Learn more: HEX FAQ
Hex is another project trying to become a currency. It has a unique system emphasising the holding of coins rather than the selling of coins.
It has a steady inflation of 3.69% and as long as coins are staked this will not erode the value of the currency.
Hex still needs to be listed on an exchange. It needs to become more popular at first in the crypto community and then beyond. There are too many variables to know if an investment in Hex will be profitable! Very high risks = potential of high returns and high losses!