“Satoshi Nakamoto” once again fails to solve Grin’s deflation curse

Text | Hoho

Editor | Wen Dao

On November 12, the Grin team received an unnamed donation of 50 BTC. After checking the wallet address, it was found that the last transfer to the address was in December 2010. In May of this year, Grin also received the same amount of BTC donations, and that coin also came from an address that had not been moved since November 2010.

Obviously, the owners of these coins are old Bitcoin players. After analyzing the address, Litecoin founder Charlie Lee believes that the person who donated a large amount to Grin is Satoshi Nakamoto. Speculations are spreading in the market. For cryptocurrency investors, Satoshi Nakamoto is a mysterious and popular name.

As a result, the news of the BTC donation worth $435,000 gave the Grin market a shot in the arm, and it rose by more than 50% in two days. Prior to this, Grin, the new favorite of anonymous coins, had been unpopular for half a year.

Every time news of anonymous donations comes out, the price of Grin will "revive". People who love, hold and invest in Grin also know that news is not a long-term solution to support Grin's appreciation.

In the one year since the mainnet was launched, Grin's overall market has been on a downward trend, and the "curse" of inflation has accompanied it since its birth: the total amount of Grin is unlimited, and the more coins are mined, the less valuable they may be.

If we calculate according to the time, Satoshi Nakamoto was still "visible online" until April 2011, when he wrote in a personal email to Gavin Andresen, an early Bitcoin developer, "I'm going to do other things, Gavin and others will take over the Bitcoin project very well." He then stopped contacting the outside world.

Based on these untenable evidences, people believed that the donation came from Satoshi Nakamoto. David Burkett also laughed and said that he really hoped it was Satoshi Nakamoto, but there was no evidence to prove it.

This is the second time this year that the Grin team has received donations from early BTC players. In May this year, five months after its birth, Grin also received a one-time donation of the same amount of BTC. Judging from the address, this money was also a coin that had been "dormant" after being transferred from the Coinbase exchange nine years ago.

Regardless of whether the money was donated by Satoshi Nakamoto, it is true that the price of Grin has risen. From November 12 to 14, Grin rose from $1.152 to $1.77, an increase of more than 50% in 2 days.

After the last large donation, Grin continued to rise within 2 months, with the price climbing from nearly $2 to $6, doubling.

But in this market where "hype" is the mainstream value, speculators are still crazy about this new anonymous currency project. From the first day of the Grin mainnet launch, a bubble was born.

On January 15 this year, the first day when the Grin mainnet was officially launched, nine exchanges including Bifu, Gate, and MXC took the initiative to launch Grin's trading pairs.

Retail investors flocked in with graphics cards and mining machines. Mining pools such as Shenyu and Bixin added Grin's mining business. Individual players began to spread mining tutorials on WeChat Moments and Weibo.

Someone found that on a small exchange, the price of Grin even soared to the same level as BTC. Later, it gradually fell back to a rational stage and remained at around $10.

The enthusiasm lasted only one day.

According to Gate Exchange data, the price of Grin fell from $10 to $7.2352 on the second day of its launch, a single-day drop of more than 20%. Since then, the price of the currency has never recovered.

On September 29, Grin was quoted at $1.385. At that time, Grin's former core developer Gery Yu did some calculations. Taking a typical Nvidia GTX-1060 graphics card as a reference, and based on an average electricity cost of 4 cents, the unit cost of Grin mining is now $1.2. If calculated at $1.4, the miner's gross profit margin is only 16.7%. "Grin's market price is close to or below the mining cost, and it is basically a loss."

At press time, Grin is trading at $1.522, a slight increase of 8.7% compared to its price three months ago.

Grin community member UseR attributed the rise in coin prices to the reappearance of the “mysterious donor.” Some coin holders, including him, are worried about how long Grin’s current coin price can be maintained after the hype has passed.

This uncontrolled inflation design is considered a "bizarre" in the cryptocurrency world. Common sense in currency tells us that excessive inflation will lead to currency depreciation. In principle, this is the fate of Grin's continuous decline. Some users have been worried about Grin's inflation rate.

Michael Cordner, one of Grin’s core developers, once explained the reason for the inflation design. They hope to make Grin a money rather than a value storage tool. “If the value of Grin is unlikely to change, people will be more willing to use it rather than hoard it speculatively.”

No hype, no speculation, let cryptocurrencies have the payment attributes of daily life. The vision of the Grin team seems unpopular in the current cryptocurrency circle where the price of coins fluctuates significantly, but it is precisely because of this that it is highly sought after by libertarians.

There are also people who are persistently pessimistic about Grin. Jiang Zhuoer, CEO of Litecoin Mining Pool, does not deny that Grin is a "good coin". "The technology is cool, the community is cool, the only thing that is not cool is the price. " He believes that Grin's monetary policy of not halving the output and unlimited total volume is wrong and absurd.

Without price incentives, it is not conducive to Grin being known by more people in the cryptocurrency market. Of course, users and investors are not the same group. If you search for Grin's usage scenarios, you will find that there is not much progress.

On January 18 this year, three days after Grin's mainnet was launched, the cryptocurrency forum BitcoinTalk supported Grin payments. And then, nothing happened. In the dark web transactions where anonymous coins are most popular, Grin is still a "little brother" compared to cryptocurrencies such as Bitcoin and Monero that also protect privacy.

If the price is not “cool”, no one will pay attention to it; if the price is “cool”, it will not be conducive to payment. Therefore, Grin’s inflation “curse” has put it in the current embarrassing situation.