A Game Theory Comparison: Rising Coin vs Bitcoin
Rising Coin is designed to be the ultimate hedge against inflation and bear markets. With its unique game theory, it has the potential to be the safe harbor of investment vehicles. In this article, I want to compare Rising Coin’s game theory to Bitcoin and clarify its potential.
Bitcoin
Bitcoin, being the first and largest market-cap cryptocurrency, has a well defined behavior influencing its price to increase: the halving (Also called halvening). The halving is the event where the block reward is decreased to half of its value every 210,000 blocks, roughly 4 years. By this design, Bitcoin has a programmed scarcity system which is a major reason it is called the digital gold. As the flow is halved every 4 years, scarcity of Bitcoin increases. Today Bitcoin has similar scarcity to Gold. With the next halving, when Bitcoin reaches about double the scarcity of Gold, it is quite likely that it will overthrow Gold’s kingdom of being the inflationary hedge.
So far, halving events had very strong effects on the markets. Whenever a halving occurred, Bitcoin market price started rising, got out of control as new investors FOMOed in, created a bubble and when the bubble burst, a prolonged bear market followed.
Bitcoin acts as the index of the cryptocurrency industry, similar to FAANG stocks working as an index of the technology sector. Whenever Bitcoin experiences a bull run, the whole crypto industry rises. Whenever Bitcoin’s bubble bursts and it enters a bear market, the whole crypto industry follows and every single coin loses value. This erratic market behavior makes it almost impossible to value crypto projects properly.
Our motivation behind Rising Coin is to de-correlate from Bitcoin, break away from its 4 year cycle and become a proper anchor for the crypto industry valuation.
Rising Coin
Rising Coin has similarities and differences in its game theory with even more aggressive targets than Bitcoin.
Rising Coin acts as a virtual commodity whose production cost increases 1% every day. While all commodities have their production costs acting as price bottoms, Rising Coin’s production cost acts as a price top. Production/Flow is only a result of high demand; it happens only when buyers are willing to buy from ATH (All Time High).
When demand isn’t very strong, flow drops to zero and a natural scarcity is created. Apart from market forces, there are two major factors effecting price:
Conclusion
Instead of a halving event every 4 years, which creates a surge and then a heavy drop in prices, Rising Coin uses a very small daily event to push its price up. The theory behind Rising Coin is that a smooth but permanent force will replace long term bull and bear market cycles with a continuous price rise.
If Bitcoin behaves similar to its first three boom-bust cycles, we will see a market top within 2021 and the whole cryptocurrency industry will go through a 2.5 year long bear market. Rising Coin, with its unique game theory, is the only crypto asset which has a strong potential to defend its value and keep reaching ATHs through the bear market.
