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Putting $400M of Bitcoin on your company balance sheet
Also posted on my blog as usual. Read it there if you can, there are footnotes and inlined plots. A couple of months ago, MicroStrategy (MSTR) had a spare $400M of cash which it decided to shift to Bitcoin (BTC). Today we'll discuss in excrutiating detail why this is not a good idea. When a company has a pile of spare money it doesn't know what to do with, it'll normally do buybacks or start paying dividends. That gives the money back to the shareholders, and from an economic perspective the money can get better invested in other more promising companies. If you have a huge pile of of cash, you probably should be doing other things than leave it in a bank account to gather dust. However, this statement from MicroStrategy CEO Michael Saylor exists to make it clear he's buying into BTC for all the wrong reasons:
“This is not a speculation, nor is it a hedge. This was a deliberate corporate strategy to adopt a bitcoin standard.”
Let's unpack it and jump into the economics Bitcoin:
Is Bitcoin money?
No. Or rather BTC doesn't act as money and there's no serious future path for BTC to become a form of money. Let's go back to basics. There are 3 main economic problems money solves: 1. Medium of Exchange. Before money we had to barter, which led to the double coincidence of wants problem. When everyone accepts the same money you can buy something from someone even if they don't like the stuff you own. As a medium of exchange, BTC is not good. There are significant transaction fees and transaction waiting times built-in to BTC and these worsen the more popular BTC get. You can test BTC's usefulness as a medium of exchange for yourself right now: try to order a pizza or to buy a random item with BTC. How many additional hurdles do you have to go through? How many fewer options do you have than if you used a regular currency? How much overhead (time, fees) is there? 2. Unit of Account. A unit of account is what you compare the value of objects against. We denominate BTC in terms of how many USD they're worth, so BTC is a unit of account presently. We can say it's because of lack of adoption, but really it's also because the market value of BTC is so volatile. If I buy a $1000 table today or in 2017, it's roughly a $1000 table. We can't say that a 0.4BTC table was a 0.4BTC table in 2017. We'll expand on this in the next point: 3. Store of Value. When you create economic value, you don't want to be forced to use up the value you created right away. For instance, if I fix your washing machine and you pay me in avocados, I'd be annoyed. I'd have to consume my payment before it becomes brown, squishy and disgusting. Avocado fruit is not good money because avocadoes loses value very fast. On the other hand, well-run currencies like the USD, GBP, CAD, EUR, etc. all lose their value at a low and most importantly fairly predictible rate. Let's look at the chart of the USD against BTC While the dollar loses value at a predictible rate, BTC is all over the place, which is bad. One important use money is to write loan contracts. Loans are great. They let people spend now against their future potential earnings, so they can buy houses or start businesses without first saving up for a decade. Loans are good for the economy. If you want to sign something that says "I owe you this much for that much time" then you need to be able to roughly predict the value of the debt in at the point in time where it's due. Otherwise you'll have a hard time pricing the risk of the loan effectively. This means that you need to charge higher interests. The risk of making a loan in BTC needs to be priced into the interest of a BTC-denominated loan, which means much higher interest rates. High interests on loans are bad, because buying houses and starting businesses are good things.
BTC has a fixed supply, so these problems are built in
Some people think that going back to a standard where our money was denominated by a stock of gold (the Gold Standard) would solve economic problems. This is nonsense. Having control over supply of your currency is a good thing, as long as it's well run. See here Remember that what is desirable is low variance in the value, not the value itself. When there are wild fluctuations in value, it's hard for money to do its job well. Since the 1970s, the USD has been a fiat money with no intrinsic value. This means we control the supply of money. Let's look at a classic poorly drawn econ101 graph The market price for USD is where supply meets demand. The problem with a currency based on an item whose supply is fixed is that the price will necessarily fluctuate in response to changes in demand. Imagine, if you will, that a pandemic strikes and that the demand for currency takes a sharp drop. The US imports less, people don't buy anything anymore, etc. If you can't print money, you get deflation, which is worsens everything. On the other hand, if you can make the money printers go brrrr you can stabilize the price Having your currency be based on a fixed supply isn't just bad because in/deflation is hard to control. It's also a national security risk... The story of the guy who crashed gold prices in North Africa In the 1200s, Mansa Munsa, the emperor of the Mali, was rich and a devout Muslim and wanted everyone to know it. So he embarked on a pilgrimage to make it rain all the way to Mecca. He in fact made it rain so hard he increased the overall supply of gold and unintentionally crashed gold prices in Cairo by 20%, wreaking an economic havoc in North Africa that lasted a decade. This story is fun, the larger point that having your inflation be at the mercy of foreign nations is an undesirable attribute in any currency. The US likes to call some countries currency manipulators, but this problem would be serious under a gold standard.
Currencies are based on trust
Since the USD is based on nothing except the US government's word, how can we trust USD not to be mismanaged? The answer is that you can probably trust the fed until political stooges get put in place. Currently, the US's central bank managing the USD, the Federal Reserve (the Fed for friends & family), has administrative authority. The fed can say "no" to dumb requests from the president. People who have no idea what the fed does like to chant "audit the fed", but the fed is already one of the best audited US federal entities. The transcripts of all their meetings are out in the open. As is their balance sheet, what they plan to do and why. If the US should audit anything it's the Department of Defense which operates without any accounting at all. It's easy to see when a central bank will go rogue: it's when political yes-men are elected to the board. For example, before printing themselves into hyperinflation, the Venezuelan president appointed a sociologist who publicly stated “Inflation does not exist in real life” and instead is a made up capitalist lie. Note what happened mere months after his gaining control over the Venezuelan currency This is a key policy. One paper I really like, Sargent (1984) "The end of 4 big inflations" states:
The essential measures that ended hyperinflation in each of Germany,Austria, Hungary, and Poland were, first, the creation of an independentcentral bank that was legally committed to refuse the government'sdemand or additional unsecured credit and, second, a simultaneousalteration in the fiscal policy regime.
In english: *hyperinflation stops when the central bank can say "no" to the government." The US Fed, like other well good central banks, is run by a bunch of nerds. When it prints money, even as aggressively as it has it does so for good reasons. You can see why they started printing on March 15th as the COVID lockdowns started:
The Federal Reserve is prepared to use its full range of tools to support the flow of credit to households and businesses and thereby promote its maximum employment and price stability goals.
In english: We're going to keep printing and lowering rates until jobs are back and inflation is under control. If we print until the sun is blotted out, we'll print in the shade.
BTC is not gold
Gold is a good asset for doomsday-preppers. If society crashes, gold will still have value. How do we know that? Gold has held value throughout multiple historic catastrophes over thousands of years. It had value before and after the Bronze Age Collapse, the Fall of the Western Roman Empire and Gengis Khan being Gengis Khan. Even if you erased humanity and started over, the new humans would still find gold to be economically valuable. When Europeans d̶i̶s̶c̶o̶v̶e̶r̶e̶d̶ c̶o̶n̶q̶u̶e̶r̶e̶d̶ g̶e̶n̶o̶c̶i̶d̶e̶d̶ went to America, they found gold to be an important item over there too. This is about equivalent to finding humans on Alpha-Centauri and learning that they think gold is a good store of value as well. Some people are puzzled at this: we don't even use gold for much! But it has great properties: First, gold is hard to fake and impossible to manufacture. This makes it good to ascertain payment. Second, gold doesnt react to oxygen, so it doesn't rust or tarnish. So it keeps value over time unlike most other materials. Last, gold is pretty. This might sound frivolous, and you may not like it, but jewelry has actual value to humans. It's no coincidence if you look at a list of the wealthiest families, a large number of them trade in luxury goods. To paraphrase Veblen humans have a profound desire to signal social status, for the same reason peacocks have unwieldy tails. Gold is a great way to achieve that. On the other hand, BTC lacks all these attributes. Its value is largely based on common perception of value. There are a few fundamental drivers of demand:
Means of Exchange: if people seriously start using BTC to buy pizzas, then this creates a real demand for the currency to accomplish the short-term exchanges. As we saw previously, I'm not personally sold on this one and it's currently a negligible fraction of overall demand.
Criminal uses: Probably the largest inbuilt advantage of BTC is that it's anonymous, and so a great way to launder money. Hacker gangs use BTC to demand ransom on cryptolocker type attacks because it's a shared way for an honest company to pay and for the criminals to receive money without going to jail.
Apart from these, it's hard to argue that BTC will retain value throughout some sort of economic catastrophe.
BTC is really risky
One last statement from Michael Saylor I take offense to is this:
“We feel pretty confident that Bitcoin is less risky than holding cash, less risky than holding gold,” MicroStrategy CEO said in an interview
"BTC is less risky than holding cash or gold long term" is nonsense. We saw before that BTC is more volatile on face value, and that as long as the Fed isn't run by spider monkeys stacked in a trench coat, the inflation is likely to be within reasonable bounds. But on top of this, BTC has Abrupt downside risks that normal currencies don't. Let's imagine a few:
A critical software vulnerability is found in the BTC codebase, leading to a possible exploitation.
Xi Jinping decides he's had enough of rich people in China hiding their assets from him and bans BTC.
Some form of bank run takes hold for whatever reason. Because BTC wallets are uninsured, unlike regular banks, this compounds into a Black Tuesday style crash.
Blockchain solutions are fundamentally inefficient
Blockchain was a genius idea. I still marvel at the initial white paper which is a great mix of economics and computer science. That said, blockchain solutions make large tradeoffs in design because they assume almost no trust between parties. This leads to intentionally wasteful designs on a massive scale. The main problem is that all transactions have to be validated by expensive computational operations and double checked by multiple parties. This means waste:
BTC was estimated to use as much electricity as Belgium in 2019. It's hard to trace where the BTC mining comes from, but we can assume it has a huge carbon footprint.
A single transactions is necessarily expensive. A single transaction takes as much electricity as 800,000 VISA transactions, or watching 50,000 hours of youtube videos.
There is a large necessary tax on the transaction, since those checking the transaction extract a few BTC from it to be incentivized to do the work of checking it.
Many design problems can be mitigated by various improvements over BTC, but it remains that a simple database always works better than a blockchain if you can trust the parties to the transaction.
Charles Hoskinson on the Rough Days - [Text Version]
https://preview.redd.it/h49t3t6u9pl51.png?width=1221&format=png&auto=webp&s=fde73f432fd15d2b361f4e1621e67785bc27e30e We as AzureADA SPO watch all the videos by Charles Hoskinson. These videos are not only great news on Cardano development and ecosystem, but very often a source of inspiration. The video with the name “Rough Days” streamed live on September 4, 2020 is really a historical speech, that’s why we decided to transcribe for everyone who prefers to read rather than to watch and listen. The video you can watch here: https://www.youtube.com/watch?v=qM192wAV4LA And here is the text version. Hi everybody Charles Hoskinson here live from warm sunny Colorado. Always warm, always sunny, sometimes Colorado. And I got my Massey Ferguson hat on. Take that off, see my hair's all messed up. One of these days and we'll lose all that hair. It’s a rough day today and that markets are terrible. down 20 percent for most people. And every now and then I talk about price, I rarely do, but in general, let's talk about the macro. Crypto is a unique phenomenon, it's a unique thing and these are crazy times. I remember just a few months back when coronavirus first came out and we saw basically everything just bottom out, everybody went crazy they went to cash all asset classes just went to hell in a handbasket. And I did a video and I said: «Guys, our best days are ahead of us as an ecosystem and as an industry. And what happened? Everything got better over time. People started getting more optimistic. You know, the reality is that we are seeing an old industry die right now, the legacy financial system. I just read Biden's tax plan. He wants to treat capital gains as ordinary income and put another 12,5% on top of that. And at the end of the day, all these new taxes amount to a trillion or so extra dollars, I think, per year in income. Takes six years from the make back what they printed out of thin air for coronavirus and are willing to print again. Which begs the question why do we even pay taxes anymore if we can just print money out of thin air. And we have a whole movement of people, the AOC crowd, wake up every day and they say: «Modern monetary theory: the actual supply doesn't matter. All that matters is how much can we print and get away with it." This is where we're at as an economy right now. And globally speaking, a lot of other nations agree with this. So given that the whole world, the leadership of the world is talking about negative interest rates, they’re talking about predatory financial systems hyperinflation, just print money modern monetary theory, just print as much cash as you want. And we look to the cryptocurrency industry and, God, we got a lot of problems. I think this collapse is probably because one of the most prominent exchanges in South Korea got hit. They got shut down by the South Korean government. They, at one time, were responsible for a big part of the kimchi premium. And you know what? Korean government might shut down a few more Korean exchanges. And usually the market base these things in. We got crazy yield farming weird stuff going on in the DeFi space. All these other local events and their blips, they don't really matter that much. Just like corona in the long term won’t matter too much. In terms of the markets what matters is the trend and where are we going. I had a meeting with some people this morning and we talked about revolutionizing the healthcare industry and getting things better in terms of supply chains. I had another meeting with a soon-to-be former Wyoming state representative about how we're going to get governments to adopt blockchain technology. I talk every day to governors, heads of states congressmen, senators, mayors, some cities, sometimes very large cities with millions of people. They all say the same thing: «We need help, we need solutions, we’re damn tired of the way that the old system is running». And you know what? If we don't solve it - a lot of people are going to get hurt or continue to be hurt. The common theme that we all have is - no one's happy. Look at the black lives matters protests. Taking their philosophy of the organization aside the ranking file people are there not because they love marxism they're there because they're unhappy with the way society is. And why shouldn't they be? When my grandfather got his first job on my mom's side out of the Korean war, he was a lineman. And he made enough money from that job to have seven kids and have his wife stay at home. No college degree fresh out of high school, fresh out of marine demolitions and alignment five boys and two girls. And he could take care of that family and save money every month, have a car and a house and that was his standard of living. How many people in the middle-class today in the United States or Europe for that matter have the ability on a single person’s salary to raise seven children and have the wife or the husband stay at home? How many people? Not many. Why? Because our monetary system has failed us. The inflationary policy has created a situation where the Jeff Bezos can have 200 billion dollars and make windfall profits every year regardless of how bad the economy is and the everyday people they don't get a pay increase, so a lot of cases they don't get keep their job and their money deteriorates in value a lot more than three 3% per year. Our industry has principles in that we worship the math and the protocols and the stable monetary policy, these types of things. And as corrupt as some of the exchanges can be and some of the bad actors are: all movements suffer from these warts. And they're finite and temporary. You run out of them at some point. Self-regulation kicks in or standards kick in and these bad actors flush out. And what's left behind is a crucible that contains the truth of the matter, which is: we're going to win as an industry. There's just no doubt in my mind. You have bad days in the market, you have damn good days in the market. You get addicted to the good ones and you hate the bad ones but at the end of the day, it's only going in one direction which is: crypto is going to eat the world. Every voting system, every property registration system, every monetary system the next 25 to 50 years is going to be running on the tech we build and others build. And running with the principles of power to the edges. This is the great challenge of our time: to do it in a way that it's fair, transparent, open, and doesn't allow a government to co-opt it. It's gonna be a lot of fights here the least of our concerns and matters are a red day. And every now and then I like making these videos to remind people why I’m here and why you should be here too. As toxic as the trolls could be and these other people can be - none of them really matter. Markets don’t really matter. What matters are the principles and the purpose behind what we do. And you have to ask yourself: - Are you happy with the way that society is? Are you happy with the money in your pocket? Are you happy with the political leadership representing your nations? Are you happy with your future and do you honestly believe if we keep doing the things that we did and continue to do that the future is going to be better? Or do you think it's going to be worse or stagnant? I think too many people have woken up and they realize that if we continue doing the things that we do, the future is going to be a bad place. And they don't want that to happen. And so we're voting with our wallets, we’re voting with our feet and we as a collective industry are waking up and figuring out how to build something better. And there's some good days and bad days along the way. Today's a bad one, but there are going to be good days tomorrow. Just like I told you back when corona made everything go into free fall. And I told you before. And I warned you about with ICO mania. We're in a DeFi bubble right now. There’s no doubt in my mind about that. I saw it in 2017 with ICO mania, I see it here. And there's probably going to be worse days ahead in that respect. But the trend is always the same and never forget that. And never forget that real people are actually adopting these systems and using them. And every day we see more and more and every day that movement grows. What's so humbling is that I know a lot of you are here with me. It used to be pretty lonely space to be in a few years back. You know, the conferences, they didn't have many people. My first bitcoin meetup group in 2011 in Colorado is at the gypsy house cafe, I think I was 13th in Pearl over Capitol hill in Denver. And I registered for the event, I showed up. Two people registered: myself and another guy. And the other guy didn't show up so I had coffee with myself. Compare that with the Shelley summit that we had in July of 2020: 10 000 attendees. Ten thousands from all across the world. Compare that to where we are at today just nine years later. Pretty amazing if you think about how fast things have grown and how many fertile beautiful ideas exist in this industry and what this industry is doing for the world as a whole. And that is why we're going to win. Because at the end of the day who can argue against freedom? Who can argue against liberty? Who can argue against putting people in control? The only way you can is when you believe people are stupid, people are evil, people are incapable. And I suppose that's a philosophical difference between those who currently lead and the people who want to replace them. The people in charge right now of the world, the big banks, the Fortune 500 companies, the media, Hollywood, these things - they're very cynical people who believe in the worst in us. They look at everyday people with sustain and disgust and say: «These people if left to their own devices will be chaos. These people if left to govern themselves will burn everything to the ground and destroy everything.». And every single time I have ever seen a bad event happen, what the news doesn’t show you and what those people don't talk about is how we come together and help each other out. Someone gets injured in the streets more often than not people show up and help them. People need a helping hand someone always shows up more often than not. And this is no different. I don't believe the political process is effective anymore in any modern democracy. They've all been co-opted, perhaps they always were. But what I do believe is that we can come together and change things economically, which is what we're doing. And it's messy. Building our own money is messy, building our own industry is messy. We make a lot of mistakes along the way, we lose a lot along the way. We collect some scars too while we're at it. But progress every year keeps being made. The technology every year keeps getting better. Today, right here, right now provably secure proof of stake protocols are in circulation. They were a fantasy five years ago, now they're a fact of life. Today, right here, right now snarks have evolved by an order of magnitude in every category from validation time to efficiency to proof size. In all favorable ways which opens up all kinds of new applications and scalability and privacy. Today, right here, right now layer 2 protocols are more advanced than they have ever been in our industry's history. giving us the ability to build payment systems that scale to billions of people. Today, right here, right now we are seeing massive innovations in governance and a fertile environment for things like approval voting, threshold voting, preference voting, quadratic voting that will enable us to build all kinds of new treasuries and governance systems that eventually will scale to nation-states. As the politicians of today argue whether the post office can properly count paper ballots that people mail, we are building voting systems with state-of-the-art cryptography living on phones where you can vote with just a tap of a button and enjoy more security than we have ever imagined before. That is the future. This movement is enabling humanity. Money flowing at the speed of thought and the speed of thought making new money. How can you compete with that? You can’t, unless you bring people down with cynicism and disdain. And ultimately what competing vision do they offer? That you all should be in chains. That we should just be wage slaves. We should just accept that every year our money deteriorates in value. That we should just accept that the rich will get richer the poor get poorer. And every now and then they throw us table scraps. And when we get real angry - they usurp the movements and then install their own leadership to basically take those movements from us. As we've seen so many times before and we will see it again. I'm sorry that's not a road I want to walk down. And I'm willing to ride rocky waters, crazy markets crazy people in unlimited flood and trolling. But I will never apologize for believing in the best in people. And I will never apologize for believing that if only we give everyone around us the tools to save themselves and society that they can do it. They don't need great leaders and charisma. No one needs someone to tell them what to do. We all know what to do. We all know how to make the world a better place. We just have to be trusted enough to do it ourselves. You know what? For the first time ever we did with Bitcoin. And then we did it again with Ethereum. And now we're doing it again with Cardano. And we, as a movement, will continue to do it. So I believe our best days are ahead of us and every day I wake up and there's more people marching with me in that respect. And one day it'll be millions. And one day it'll be billions. And one day all those cynics will be gone. Replaced with optimists who once again believe that tomorrow is going to be better than today. and that we're going to leave the world just a little bit better than the way we found it. So every now and then on a tough day I like making a little message and letting you guys all know it's going to be better and you know what it will be. Just have to have faith that it will be. So hold the line, hold strong, and have faith in each other and go do something. Build something. Start something. Got a lot of podcasts on the way. A lot of things coming down the pipe for the DC fund. A lot of opportunities to actually innovate. Multi-assets are coming soon. Plutus is coming soon. Guys are going to be able to build a lot. Start thinking today what's the business plan. What would you like to change? Small or large. You don't complain about voting - change voting! Your own organization. Maybe you belong to a club - do a blockchain-based voting system. Maybe you have some political influence. Have a primary democrat or republican or your local primary in your country for selecting candidates done with blockchain-based voting. Maybe you want to build a new financial product. Think about it! Figure it out! There's so much there! It’s all there! It's ready to go, it's for you to take and build and innovate with. Every day I wake up I try to make the platforms better. I try to push the technology a little further along. I try to hire great people and bring them into our industry. Cardano brought the Haskell industry into the cryptocurrency space. Cardano brought a lot of academics, who had never thought about cryptocurrencies, into the cryptocurrency space and we made our problems their problems and as a consequence, they started solving them in ways we could have never done before. But most importantly Cardano brought a lot of YOU into the cryptocurrency space and you never thought you'd have this level of control and freedom over the fabric of society in the direction of the human race. Don't let that slip through your fingers. Figure out what you want to do with that superpower. Might be small, might be big. I dreamed big. You can dream big too. Even if you want to just dream small: every person counts every action counts. Up to the hill. Y'all matter. To me and to each other and we're all in this together. Never forget that. So, hard day, rough day. Tomorrow will be a better one. The day after will even be better. See you guys soon Take care!
The Next Crypto Wave: The Rise of Stablecoins and its Entry to the U.S. Dollar Market
Author: Christian Hsieh, CEO of Tokenomy This paper examines some explanations for the continual global market demand for the U.S. dollar, the rise of stablecoins, and the utility and opportunities that crypto dollars can offer to both the cryptocurrency and traditional markets. The U.S. dollar, dominant in world trade since the establishment of the 1944 Bretton Woods System, is unequivocally the world’s most demanded reserve currency. Today, more than 61% of foreign bank reserves and nearly 40% of the entire world’s debt is denominated in U.S. dollars1. However, there is a massive supply and demand imbalance in the U.S. dollar market. On the supply side, central banks throughout the world have implemented more than a decade-long accommodative monetary policy since the 2008 global financial crisis. The COVID-19 pandemic further exacerbated the need for central banks to provide necessary liquidity and keep staggering economies moving. While the Federal Reserve leads the effort of “money printing” and stimulus programs, the current money supply still cannot meet the constant high demand for the U.S. dollar2. Let us review some of the reasons for this constant dollar demand from a few economic fundamentals.
Demand for U.S. Dollars
Firstly, most of the world’s trade is denominated in U.S. dollars. Chief Economist of the IMF, Gita Gopinath, has compiled data reflecting that the U.S. dollar’s share of invoicing was 4.7 times larger than America’s share of the value of imports, and 3.1 times its share of world exports3. The U.S. dollar is the dominant “invoicing currency” in most developing countries4. https://preview.redd.it/d4xalwdyz8p51.png?width=535&format=png&auto=webp&s=9f0556c6aa6b29016c9b135f3279e8337dfee2a6 https://preview.redd.it/wucg40kzz8p51.png?width=653&format=png&auto=webp&s=71257fec29b43e0fc0df1bf04363717e3b52478f This U.S. dollar preference also directly impacts the world’s debt. According to the Bank of International Settlements, there is over $67 trillion in U.S. dollar denominated debt globally, and borrowing outside of the U.S. accounted for $12.5 trillion in Q1 20205. There is an immense demand for U.S. dollars every year just to service these dollar debts. The annual U.S. dollar buying demand is easily over $1 trillion assuming the borrowing cost is at 1.5% (1 year LIBOR + 1%) per year, a conservative estimate. https://preview.redd.it/6956j6f109p51.png?width=487&format=png&auto=webp&s=ccea257a4e9524c11df25737cac961308b542b69 Secondly, since the U.S. has a much stronger economy compared to its global peers, a higher return on investments draws U.S. dollar demand from everywhere in the world, to invest in companies both in the public and private markets. The U.S. hosts the largest stock markets in the world with more than $33 trillion in public market capitalization (combined both NYSE and NASDAQ)6. For the private market, North America’s total share is well over 60% of the $6.5 trillion global assets under management across private equity, real assets, and private debt investments7. The demand for higher quality investments extends to the fixed income market as well. As countries like Japan and Switzerland currently have negative-yielding interest rates8, fixed income investors’ quest for yield in the developed economies leads them back to the U.S. debt market. As of July 2020, there are $15 trillion worth of negative-yielding debt securities globally (see chart). In comparison, the positive, low-yielding U.S. debt remains a sound fixed income strategy for conservative investors in uncertain market conditions. Source: Bloomberg Last, but not least, there are many developing economies experiencing failing monetary policies, where hyperinflation has become a real national disaster. A classic example is Venezuela, where the currency Bolivar became practically worthless as the inflation rate skyrocketed to 10,000,000% in 20199. The recent Beirut port explosion in Lebanon caused a sudden economic meltdown and compounded its already troubled financial market, where inflation has soared to over 112% year on year10. For citizens living in unstable regions such as these, the only reliable store of value is the U.S. dollar. According to the Chainalysis 2020 Geography of Cryptocurrency Report, Venezuela has become one of the most active cryptocurrency trading countries11. The demand for cryptocurrency surges as a flight to safety mentality drives Venezuelans to acquire U.S. dollars to preserve savings that they might otherwise lose. The growth for cryptocurrency activities in those regions is fueled by these desperate citizens using cryptocurrencies as rails to access the U.S. dollar, on top of acquiring actual Bitcoin or other underlying crypto assets.
The Rise of Crypto Dollars
Due to the highly volatile nature of cryptocurrencies, USD stablecoin, a crypto-powered blockchain token that pegs its value to the U.S. dollar, was introduced to provide stable dollar exposure in the crypto trading sphere. Tether is the first of its kind. Issued in 2014 on the bitcoin blockchain (Omni layer protocol), under the token symbol USDT, it attempts to provide crypto traders with a stable settlement currency while they trade in and out of various crypto assets. The reason behind the stablecoin creation was to address the inefficient and burdensome aspects of having to move fiat U.S. dollars between the legacy banking system and crypto exchanges. Because one USDT is theoretically backed by one U.S. dollar, traders can use USDT to trade and settle to fiat dollars. It was not until 2017 that the majority of traders seemed to realize Tether’s intended utility and started using it widely. As of April 2019, USDT trading volume started exceeding the trading volume of bitcoina12, and it now dominates the crypto trading sphere with over $50 billion average daily trading volume13. https://preview.redd.it/3vq7v1jg09p51.png?width=700&format=png&auto=webp&s=46f11b5f5245a8c335ccc60432873e9bad2eb1e1 An interesting aspect of USDT is that although the claimed 1:1 backing with U.S. dollar collateral is in question, and the Tether company is in reality running fractional reserves through a loose offshore corporate structure, Tether’s trading volume and adoption continues to grow rapidly14. Perhaps in comparison to fiat U.S. dollars, which is not really backed by anything, Tether still has cash equivalents in reserves and crypto traders favor its liquidity and convenience over its lack of legitimacy. For those who are concerned about Tether’s solvency, they can now purchase credit default swaps for downside protection15. On the other hand, USDC, the more compliant contender, takes a distant second spot with total coin circulation of $1.8 billion, versus USDT at $14.5 billion (at the time of publication). It is still too early to tell who is the ultimate leader in the stablecoin arena, as more and more stablecoins are launching to offer various functions and supporting mechanisms. There are three main categories of stablecoin: fiat-backed, crypto-collateralized, and non-collateralized algorithm based stablecoins. Most of these are still at an experimental phase, and readers can learn more about them here. With the continuous innovation of stablecoin development, the utility stablecoins provide in the overall crypto market will become more apparent.
In addition to trade settlement, stablecoins can be applied in many other areas. Cross-border payments and remittances is an inefficient market that desperately needs innovation. In 2020, the average cost of sending money across the world is around 7%16, and it takes days to settle. The World Bank aims to reduce remittance fees to 3% by 2030. With the implementation of blockchain technology, this cost could be further reduced close to zero. J.P. Morgan, the largest bank in the U.S., has created an Interbank Information Network (IIN) with 416 global Institutions to transform the speed of payment flows through its own JPM Coin, another type of crypto dollar17. Although people argue that JPM Coin is not considered a cryptocurrency as it cannot trade openly on a public blockchain, it is by far the largest scale experiment with all the institutional participants trading within the “permissioned” blockchain. It might be more accurate to refer to it as the use of distributed ledger technology (DLT) instead of “blockchain” in this context. Nevertheless, we should keep in mind that as J.P. Morgan currently moves $6 trillion U.S. dollars per day18, the scale of this experiment would create a considerable impact in the international payment and remittance market if it were successful. Potentially the day will come when regulated crypto exchanges become participants of IIN, and the link between public and private crypto assets can be instantly connected, unlocking greater possibilities in blockchain applications. Many central banks are also in talks about developing their own central bank digital currency (CBDC). Although this idea was not new, the discussion was brought to the forefront due to Facebook’s aggressive Libra project announcement in June 2019 and the public attention that followed. As of July 2020, at least 36 central banks have published some sort of CBDC framework. While each nation has a slightly different motivation behind its currency digitization initiative, ranging from payment safety, transaction efficiency, easy monetary implementation, or financial inclusion, these central banks are committed to deploying a new digital payment infrastructure. When it comes to the technical architectures, research from BIS indicates that most of the current proofs-of-concept tend to be based upon distributed ledger technology (permissioned blockchain)19. https://preview.redd.it/lgb1f2rw19p51.png?width=700&format=png&auto=webp&s=040bb0deed0499df6bf08a072fd7c4a442a826a0 These institutional experiments are laying an essential foundation for an improved global payment infrastructure, where instant and frictionless cross-border settlements can take place with minimal costs. Of course, the interoperability of private DLT tokens and public blockchain stablecoins has yet to be explored, but the innovation with both public and private blockchain efforts could eventually merge. This was highlighted recently by the Governor of the Bank of England who stated that “stablecoins and CBDC could sit alongside each other20”. One thing for certain is that crypto dollars (or other fiat-linked digital currencies) are going to play a significant role in our future economy.
There is never a dull moment in the crypto sector. The industry narratives constantly shift as innovation continues to evolve. Twelve years since its inception, Bitcoin has evolved from an abstract subject to a familiar concept. Its role as a secured, scarce, decentralized digital store of value has continued to gain acceptance, and it is well on its way to becoming an investable asset class as a portfolio hedge against asset price inflation and fiat currency depreciation.Stablecoins have proven to be useful as proxy dollars in the crypto world, similar to how dollars are essential in the traditional world. It is only a matter of time before stablecoins or private digital tokens dominate the cross-border payments and global remittances industry. There are no shortages of hypes and experiments that draw new participants into the crypto space, such as smart contracts, new blockchains, ICOs, tokenization of things, or the most recent trends on DeFi tokens. These projects highlight the possibilities for a much more robust digital future, but the market also needs time to test and adopt. A reliable digital payment infrastructure must be built first in order to allow these experiments to flourish. In this paper we examined the historical background and economic reasons for the U.S. dollar’s dominance in the world, and the probable conclusion is that the demand for U.S. dollars will likely continue, especially in the middle of a global pandemic, accompanied by a worldwide economic slowdown. The current monetary system is far from perfect, but there are no better alternatives for replacement at least in the near term. Incremental improvements are being made in both the public and private sectors, and stablecoins have a definite role to play in both the traditional and the new crypto world. Thank you. Reference:  How the US dollar became the world’s reserve currency, Investopedia  The dollar is in high demand, prone to dangerous appreciation, The Economist  Dollar dominance in trade and finance, Gita Gopinath  Global trades dependence on dollars, The Economist & IMF working papers  Total credit to non-bank borrowers by currency of denomination, BIS  Biggest stock exchanges in the world, Business Insider  McKinsey Global Private Market Review 2020, McKinsey & Company  Central banks current interest rates, Global Rates  Venezuela hyperinflation hits 10 million percent, CNBC  Lebanon inflation crisis, Reuters  Venezuela cryptocurrency market, Chainalysis  The most used cryptocurrency isn’t Bitcoin, Bloomberg  Trading volume of all crypto assets, coinmarketcap.com  Tether US dollar peg is no longer credible, Forbes  New crypto derivatives let you bet on (or against) Tether’s solvency, Coindesk  Remittance Price Worldwide, The World Bank  Interbank Information Network, J.P. Morgan  Jamie Dimon interview, CBS News  Rise of the central bank digital currency, BIS  Speech by Andrew Bailey, 3 September 2020, Bank of England
Over the past 100 days, Grayscale has bought every third bitcoin
Over the past 100 days, Grayscale has bought every third bitcoin The Grayscale Investments cryptocurrency investment fund acquired every third bitcoin mined in the last 100 days. And in April, the fund bought 50% of all ETH mined. At the same time, despite the financial crisis and the fall of the cryptocurrency market in March, shares of Grayscale crypto funds in the first quarter of 2020 attracted record investments, which indicates a growing interest of institutional investors in the crypto industry. Why does the company need so many coins, what is its current position regarding the crypto market and what role does it play on it?
Aggressive Grayscale crypto purchases have recently been spotted with respect to ether. So, by April 24, the company had bought about 756 539 ETNs (accurate data are not publicly available) for its Ethereum Trust fund. This is about 48.4% of all 1.5 million coins mined since the beginning of this year. As a result, the company already owns 1% of all coins in circulation and only increases the pace of purchases. The first user to notice this was Reddit under the nickname u/nootropicat. According to the latest quarterly report by Grayscale, the flow of investments in ETN reached a record level for the first three months of 2020 — $110 million. This is a very sharp increase, given that total investments in ETN for the previous two years amounted to $95.8 million. The total demand for the Ethereum fund grew over the quarter is almost 2.5 times compared with the fourth quarter of 2019. From the beginning of the year until the end of April, the company issued 5.23 million shares of the fund at 0.09427052 ETN apiece. At the same time, shares are traded with a premium of 420% relative to the current price of the coin — $92 against $17.70. That is, investors are willing to pay extra pretty much not to deal with cryptocurrency on their own. Most likely, the increase in the rate of purchase of the coin is associated with the upcoming upgrade of the network to the state of Ethereum 2.0. It can take place at the end of July, but, most likely, it will happen not earlier than the end of the year. After the upgrade, the network will become more scalable and there will be the possibility of staking — validators will be able to receive passive income for providing their funds to confirm the blocks. The crypto market, by the way, is also preparing for the transition of the ecosystem to a new stage. ETH has grown 55% since the crash in March, from $110 to $202 on the day of publication. At the end of April, CoinDesk drew attention to the increase in the number of long positions in ETH futures — this indicates expectations for further growth of the coin.
Last quarter — the most successful in the history of the company
In May, Grayscale released a report on the results of the first quarter of this year. “Despite the decline in risky assets this quarter, Grayscale’s assets continue to approach record highs, as does our share of the digital asset market,” the document says. And this despite the coronavirus pandemic, the global recession and the traditional cryptocurrency market volatility. A record $503.7 million investment was raised in the first quarter. This is almost twice the previous quarterly maximum of $254 million in the third quarter of last year and accounts for 83% of the total capital of $1.07 billion raised for the entire 2019. New investors accounted for $160 million of raised funds. The main products of Grayscale Bitcoin Trust and Grayscale Ethereum Trust raised $388.9 million and $110 million, respectively. It is noteworthy that the company reduced the premium on stocks of funds relative to the price of assets. 88% of investments came from institutional investors, among which hedge funds prevail; 5% — from accredited individuals, 4% — from pension accounts (yes, pension funds are extremely conservative in nature, but also invest in bitcoin against the background of a decrease in the profitability of other assets); 3% came from family offices, and 38% of customers invested in several products at once. It is noteworthy that two years ago the share of institutional investors was about 50% — it is obvious that they no longer consider bitcoin as something criminal. “Many of our investors see digital assets as medium and long-term investment opportunities and the main component of their investment portfolios. Quarterly inflows doubled to $ 503.7 million, demonstrating that demand is reaching new peak levels even in conditions of “risk reduction”, the document says. Today, more than 46.5% of the inflow of funds was attracted from multi-strategic investors. Crypto investors accounted for only 11.2% of the inflow, according to the report. Grayscale currently operates ten cryptocurrency investment products targeted at institutional investors. They cover PTS, ETN, ETS, BCH, ZEC, XRP, LTC, ZEN, XLM. The value of the assets under his management is more than $3.8 billion. GBTC is the most demanded product, most investors invest in it and it takes about 1.7% of the total volume of circulating bitcoins. Aggregate quarterly flow of funds to different Grayscale products. Pay attention to the growing share of investors diversifying portfolios with products tied to altcoins. Since January of this year, the Grayscale Bitcoin Trust has been registered with the US Securities and Exchange Commission (SEC). According to it, the company provides quarterly and annual reports in the form of 10-K. The status makes it possible to sell shares of a trust in the secondary market after 6 months, rather than 12, as before, and also increases the confidence of conservative investors. Other products comply with OTCQX reporting standards in the OTC market and are approved by the US Financial Services Regulatory Authority (FINRA) for public offering. Amount of assets managed by Grayscale as of May 20, 2020. It is noteworthy that the news about the success of Grayscale comes amid news of how panicky investors in traditional assets are fleeing from market turmoil. So, the largest fund managers — BlackRock, Vanguard and State Street Global Advisors — lost several trillion in capitalization of their assets, and BlackRock in the first quarter for the first time in five years saw a net outflow of funds from its long-term investment products.
Bitcoin is the best asset for hedging portfolios in crisis
At the end of April, Grayscale also released a separate report on the analysis of the impact of regulators during a pandemic and the crisis caused by it and how it affected the bitcoin and cryptocurrency market as a whole. The document said fiat currencies are at risk of devaluation as central banks print more and more money. Even the US dollar, which is the world’s reserve currency, risks being devalued if the US Federal Reserve continues to print the currency in trillions. A decrease in interest rates to zero and negative values deprives government bonds of the status of “safe haven” during the crisis. Therefore, investors are trying to diversify their portfolios with alternative instruments. Cryptocurrencies are the best choice for this, according to the authors of the report. The text emphasizes the historical significance of gold as a global standard, but it is noted that in the modern digital world it is becoming increasingly burdensome for investors — it has complex logistics. Bitcoin seems resistant to the problems that other assets face. Therefore, in times of economic uncertainty, the first cryptocurrency is one of the best assets that investors can use to hedge their portfolios. The coin performs better than any other asset, including fiat currencies, government bonds, and traditional commodities like gold. The authors of the report emphasize that Bitcoin has already begun to show signs of becoming a protective asset. At the same time, the company believes that bitcoin is an excellent asset not only in times of crisis. So, in December 2019, Managing Director of Grayscale Investments Michael Sonnenshine said that the company expects an influx of investments in bitcoin after the transfer of $68 trillion of savings between generations in the next 25 years. Today, this capital is invested in traditional assets, but a significant part of these wealth millennials will invest in cryptocurrencies. Already, according to him, investments in GBTC are among the five most popular among young people, ahead of, for example, investments in Microsoft and Netflix.
The unprecedented financial measures taken by the US Federal Reserve, as well as the worsening recession, are forcing even the most conservative investors to rethink their current strategies and portfolio composition. Many of them are increasingly beginning to appreciate the fixed emission and non-correlation of Bitcoin — it is becoming a tool for risk diversification. Growing institutional interest is driving the acceleration of coin prices. Subscribe to our Telegram channel
Elaborating on Datadash's 50k BTC Prediction: Why We Endorse the Call
As originally published via CoinLive I am the Co-Founder at CoinLive. Prior to founding Coinlive.io, my area of expertise was inter-market analysis. I came across Datadash 50k BTC prediction this week, and I must take my hats off to what I believe is an excellent interpretation of the inter-connectivity of various markets. At your own convenience, you can find a sample of Intermarket analysis I've written in the past before immersing myself into cryptos full-time. Gold inter-market: 'Out of sync' with VIX, takes lead from USD/JPY USD/JPY inter-market: Watch divergence US-Japan yield spread EUUSD intermarket: US yields collapse amid supply environment Inter-market analysis: Risk back in vogue, but for how long? USD/JPY intermarket: Bulls need higher adj in 10-y US-JP spread The purpose of this article is to dive deeper into the factors Datadash presents in his video and how they can help us draw certain conclusions about the potential flows of capital into crypto markets and the need that will exist for a BTC ETF. Before I do so, as a brief explainer, let's touch on what exactly Intermarket analysis refers to: Intermarket analysis is the global interconnectivity between equities, bonds, currencies, commodities, and any other asset class; Global markets are an ever-evolving discounting and constant valuation mechanism and by studying their interconnectivity, we are much better positioned to explain and elaborate on why certain moves occur, future directions and gain insights on potential misalignments that the market may not have picked up on yet or might be ignoring/manipulating. While such interconnectivity has proven to be quite limiting when it comes to the value one can extract from analyzing traditional financial assets and the crypto market, Datadash has eloquently been able to build a hypothesis, which as an Intermarket analyst, I consider very valid, and that matches up my own views. Nicolas Merten constructs a scenario which leads him to believe that a Bitcoin ETF is coming. Let's explore this hypothesis. I will attempt to summarize and provide further clarity on why the current events in traditional asset classes, as described by Datadash, will inevitably result in a Bitcoin ETF. Make no mistake, Datadash's call for Bitcoin at 50k by the end of 2018 will be well justified once a BTC ETF is approved. While the timing is the most challenging part t get right, the end result won't vary. If one wishes to learn more about my personal views on why a BTC ETF is such a big deal, I encourage you to read my article from late March this year. Don't Be Misled by Low Liquidity/Volume - Fundamentals Never Stronger The first point Nicholas Merten makes is that despite depressed volume levels, the fundamentals are very sound. That, I must say, is a point I couldn't agree more. In fact, I recently wrote an article titled TheParadox: Bitcoin Keeps Selling as Intrinsic Value Set to Explode where I state "the latest developments in Bitcoin's technology makes it paradoxically an ever increasingly interesting investment proposition the cheaper it gets." However, no article better defines where we stand in terms of fundamentals than the one I wrote back on May 15th titled Find Out Why Institutions Will Flood the Bitcoin Market, where I look at the ever-growing list of evidence that shows why a new type of investors, the institutional ones, looks set to enter the market in mass. Nicholas believes that based on the supply of Bitcoin, the market capitalization can reach about $800b. He makes a case that with the fundamentals in bitcoin much stronger, it wouldn't be that hard to envision the market cap more than double from its most recent all-time high of more than $300b. Interest Rates Set to Rise Further First of all, one of the most immediate implications of higher rates is the increased difficulty to bear the costs by borrowers, which leads Nicholas to believe that banks the likes of Deutsche Bank will face a tough environment going forward. The CEO of the giant German lender has actually warned that second-quarter results would reflect a “revenue environment [that] remains challenging." Nicholas refers to the historical chart of Eurodollar LIBOR rates as illustrated below to strengthen the case that interest rates are set to follow an upward trajectory in the years to come as Central Banks continue to normalize monetary policies after a decade since the global financial crisis. I'd say, that is a correct assumption, although one must take into account the Italian crisis to be aware that a delay in higher European rates is a real possibility now. !(https://coinlive.io/ckeditor_assets/pictures/947/content_2018-05-30_1100.png) Let's look at the following combinations: Fed Fund Rate Contract (green), German 2-year bond yields (black) and Italy's 10-year bond yield (blue) to help us clarify what's the outlook for interest rates both in Europe and the United States in the foreseeable future. The chart suggests that while the Federal Reserve remains on track to keep increasing interest rates at a gradual pace, there has been a sudden change in the outlook for European rates in the short-end of the curve. While the European Central Bank is no longer endorsing proactive policies as part of its long-standing QE narrative, President Mario Draghi is still not ready to communicate an exit strategy to its unconventional stimulus program due to protectionism threats in the euro-area, with Italy the latest nightmare episode. Until such major step is taken in the form of a formal QE conclusion, interest rates in the European Union will remain depressed; the latest drastic spike in Italy's benchmark bond yield to default levels is pre-emptive of lower rates for longer, an environment that on one hand may benefit the likes of Deutsche Bank on lower borrowing costs, but on the other hand, sets in motion a bigger headache as risk aversion is set to dominate financial markets, which leads to worse financial consequences such as loss of confidence and hence in equity valuations. !(https://coinlive.io/ckeditor_assets/pictures/948/content_2018-05-30_1113.png) Deutsche Bank - End of the Road? Nicholas argues that as part of the re-restructuring process in Deutsche Bank, they will be facing a much more challenging environment as lending becomes more difficult on higher interest rates. At CoinLive, we still believe this to be a logical scenario to expect, even if a delay happens as the ECB tries to deal with the Italian political crisis which once again raises the question of whether or not Italy should be part of the EU. Reference to an article by Zerohedge is given, where it states: "One day after the WSJ reported that the biggest German bank is set to "decimate" its workforce, firing 10,000 workers or one in ten, this morning Deutsche Bank confirmed plans to cut thousands of jobs as part of new CEO Christian Sewing's restructuring and cost-cutting effort. The German bank said its headcount would fall “well below” 90,000, from just over 97,000. But the biggest gut punch to employee morale is that the bank would reduce headcount in its equities sales and trading business by about 25%." There is an undeniably ongoing phenomenon of a migration in job positions from traditional financial markets into blockchain, which as we have reported in the past, it appears to be a logical and rational step to be taken, especially in light of the new revenue streams the blockchain sector has to offer. Proof of that is the fact that Binance, a crypto exchange with around 200 employees and less than 1 year of operations has overcome Deutsche Bank, in total profits. What this communicates is that the opportunities to grow an institution’s revenue stream are formidable once they decide to integrate cryptocurrencies into their business models. One can find an illustration of Deutsche Bank's free-fall in prices below: !(https://coinlive.io/ckeditor_assets/pictures/946/content_2018-05-30_1052.png) Nicholas takes notes of a chart in which one can clearly notice a worrying trend for Italian debt. "Just about every other major investor type has become a net seller (to the ECB) or a non-buyer of BTPs over the last couple of years. Said differently, for well over a year, the only marginal buyer of Italian bonds has been the ECB!", the team of Economists at Citi explained. One can find the article via ZeroHedge here. !(https://coinlive.io/ckeditor_assets/pictures/953/content_2018-05-30_1451.png) Equities & Housing to Suffer the Consequences Nicholas notes that trillions of dollars need to exit these artificially-inflated equity markets. He even mentions a legendary investor such as George Soros, who has recently warned that the world could be on the brink of another devastating financial crisis, on lingering debt concerns in Europe and a strengthening US dollar, as a destabilizing factor for both the US's emerging- and developed-market rivals. Ray Dalio, another legend in the investing world and Founder of Bridgewater Associates, the world’s largest hedge fund, "has ramped up its short positions in European equities in recent weeks, bringing their total value to an estimated $22 billion", MarketWatch reports. Nicholas extracts a chart by John Del Vecchio at lmtr.com where it illustrates the ratio between stocks and commodities at the lowest in over 50 years. As the author states: "I like to look for extremes in the markets. Extremes often pinpoint areas where returns can be higher and risk lower than in other time periods. Take the relationship between commodities and stocks. The chart below shows that commoditieshavennot been cheaper than stocks in a generation. We often hear this time it is different” to justify what’s going on in the world. But, one thing that never changes is human nature. People push markets to extremes. Then they revert. " !(https://coinlive.io/ckeditor_assets/pictures/954/content_2018-05-30_1459.png) Bitcoin ETF the Holy Grail for a Cyclical Multi-Year Bull Run It is precisely from this last chart above that leads Nicholas to believe we are on the verge of a resurgence in commodity prices. Not only that but amid the need of all this capital to exit stocks and to a certain extent risky bonds (Italian), a new commodity-based digital currency ETF based on Bitcoin will emerge in 2018. The author of Datadash highlights the consideration to launching a Bitcoin ETF by the SEC. At CoinLive, our reporting of the subject can be found below: "Back in April, it was reported that the US Securities and Exchange Commission (SEC) has put back on the table two Bitcoin ETF proposals, according to public documents. The agency is under formal proceedings to approve a rule change that would allow NYSE Arca to list two exchange-traded funds (ETFs) proposed by fund provider ProShares. The introduction of an ETF would make Bitcoin available to a much wider share of market participants, with the ability to directly buy the asset at the click of a button, essentially simplifying the current complexity that involves having to deal with all the cumbersome steps currently in place." Nicholas refers to the support the Bitcoin ETF has been receiving by the Cboe president Chris Concannon, which is a major positive development. CoinLive reported on the story back in late March, noting that "a Bitcoin ETF will without a doubt open the floodgates to an enormous tsunami of fresh capital entering the space, which based on the latest hints by Concannon, the willingness to keep pushing for it remains unabated as the evolution of digital assets keeps its course." It has been for quite some time CoinLive's conviction, now supported by no other than Nicholas Merten from Datadash, that over the next 6 months, markets will start factoring in the event of the year, that is, the approval of a Bitcoin ETF that will serve as a alternative vehicle to accommodate the massive flows of capital leaving some of the traditional asset classes. As Nicholas suggests, the SEC will have little choice but to provide alternative investments. Bitcoin as a Hedge to Lower Portfolios' Volatility Last but not least, crypto assets such as Bitcoin and the likes have an almost non-existent correlation to other traditional assets such as stocks, bonds, and commodities, which makes for a very attractive and broadly-applicable diversification strategy for the professional money as it reduces one’s portfolio volatility. The moment a Bitcoin ETF is confirmed, expect the non-correlation element of Bitcoin as a major driving force to attract further capital. Anyone Can BeWrongDatadash, But You Won't be Wrong Alone Having analyzed the hypothesis by Nicholas Merten, at CoinLive we believe that the conclusion reached, that is, the creation of a Bitcoin ETF that will provide shelter to a tsunami of capital motivated by the diversification and store of value appeal of Bitcoin, is the next logical step. As per the timing of it, we also anticipate, as Nicholas notes, that it will most likely be subject to the price action in traditional assets. Should equities and credit markets hold steady, it may result in a potential delay, whereas disruption in the capital market may see the need for a BTC ETF accelerate. Either scenario, we will conclude with a quote we wrote back in March. "It appears as though an ETF on Bitcoin is moving from a state of "If" to "When." Datadash is certainly not alone on his 50k call. BitMEX CEO Arthur Hayes appears to think along the same line. On behalf of the CoinLive Team, we want to thank Nicholas Merten at Datadash for such enlightening insights.
Consensus 2018 Report (Continuous Updates Through May 17th)
Happy Wednesday! We are live! Consensus Short Statistics
8,500+ attendees representing 100 countries and 2000 companies.
50% of attendees came from outside the U.S.
5 stages, with more rooms for tech demos and conference tables.
State of Blockchain Don Tapscott -"We are entering a new era of trust" -Generally remarked on the benefits of blockchain. Identified the 7 types of crypto assets (Currencies, Collectibles, Stablecoins, Natural Asset Tokens [Representing minerals, water], Utility Tokens, and Security Tokens.) FedEx As I remarked in my comment earlier, FedEx is incredibly bullish on blockchain technology generally, but specifically in it's applications for cross-border shipping and asset-tracking. As I learned, the definition of what constitutes a "coffee cup" differs from place to place. Using blockchain, Smith says, FedEx can protect against unforeseen obstacles at customs. "Information about the package is as important as the package itself," he claims, further adding that the risk of experimenting with cryptocurrency is "de minimis" when compared to its alternative. During the session, FedEx unveiled "Trons", bluetooth-enabled sensors integrated with blockchain first announced in 2016. Jim Bullard, St. Louis Fed Fantastic, informational lecture regarding the history of currency and how civilizations have reacted to various implementations. Generally, Bullard notes, humans want a uniform currency. He compared cryptos with state/provincial bank notes, citing the problems faced with exchange, regulation, and value verification. We haven't yet realized this problem with cryptocurrencies since the market cap is relatively small. Insightful statistics about and charts comparing GDP to the inflation/exchange rates of the DollaYen. Surprisingly, the volatility charts look worse than Bitcoin. Catch all of these when the videos are released later this week. Summarizing, Bullard claimed that there will be a plurality of coins sharing the ecosystem, each providing a specific use. The Federal Reserve will likely mint a fiat/cryptocurrency that represents a stable stock of U.S. dollars sometime in the mid term future. Jed McCaleb I spoke with Jed of the Stellar Foundation. This is a Bitcoin subreddit, so I'll skip this part. You can find the full transcript of his thoughts here. Charlie Lee and David Schwarz Both spoke on a panel about interoperability between Bitcoin, Litecoin, Ripple, etc. Developers better understand that most cryptocurrencies can interface as long as they use the same "hooks". Schwartz compared this ideal system akin to TCP-IP; a minimal framework making as few technological demands as necessary. An ecosystem with multiple coins utilizing different security protocols and consensus mechanisms is "good for Bitcoin". In a theoretical world where power becomes abundant, what happens to PoW? We want the ability to migrate to a new protocol without upending the entire financial system. In a world where security is compromised, redundancy is critical. Lee sees UI as the next significant hurdle. Not for speculators, but for mom-and-pop investors without much tech savvy. TxTenna -Hardware to expand and facilitate mesh networks. -Even if you own Bitcoin, transfer can be censored/inhibited through the network communicating the transaction to the blockchain. -Using mesh networks, we bypass many of these constraints dealing directly with sovereign ISP's. -This is fantastic for Bitcoin users in 3rd world countries/those with oppressive regimes. I will leave this to your imagination. RSK
-Smart contract platform on top of the Bitcoin protocol. -Ecosystem challenges (Tx costs, security, scalability) -Tx cost is $0.035 - +10% hashing power -Up to 100 tps. -Next -Payment channels (Lumino) -Predicability (Fiat-based fees) -Decentralization (BTC and RSK full-node rewards) -Interoperability (inter-blockchain integration)
I'm sorry if you find this post lacking/off topic. Attempted to refine down to only what might be relevant to a Bitcoin trader. Even if Bitcoin isn't specifically mentioned, many of these innovations/philosophies will apply to the crypto space generally and, thus, to Bitcoin. It's already the end of Day 2 and I'm finishing the write-up for D1. I'll compile D2 and D3 for brevity's sake. Most of this news is now relatively (a day) old. Thanks for your attention and help supporting the crypto revolution. P.S. "Where is my Consensus boost!? I thought BTC should be $10k by now!" Historically, the Consensus Boost happens several weeks after the event, likely as news disseminates. OH FUCK I FORGOT Joseph Lubin bets BlockChain Capital's Jimmy Song, "any amount of Bitcoin" that blockchain will have widespread enterprise adoption within 5 years Day 2 Will try an update. Sitting through, eToro will be opening business in the United States, launching a wallet shortly after. Users can view successful traders' profiles and subscribe to their trades, copying them second-by-second. Circle announces a USD stablecoin and crypto wallet. HTC announces a crypto phone. Deloitte releases preview of cryptocurrency report, shows majority of companies pursuing blockchain. -"But this is just blockchain". Yes, and a rising tide lifts all ships. The Magical Crypto Friends Live From Consensus. Warning, shitty audio. -Founders of several currencies (Litecoin, Monero) discuss Buffett, Bitcoin, and other BS. 56 minute duration. For the hardcore. Day 3 Alright! Ledger -Announcing a consortium for investors/institutions who manage multiple accounts. Today, Ledger Nano S is really only useful to the individual owner. -Called, "Komino"? (Japanese Script). -Isn't this compromising the dream of Satoshi? Speaker thinks no. The dream is that everyone can use Bitcoin as they see fit. Large companies can have positions in Bitcoin without changing the life of crypto maximalists who can still use cryptocurrencies. -Bankers have the right to "Go full Moon and lambos". Polymath -The next big wave in crypto are Security Tokens. -Real estate, equity in companies. -Amongst crypto VC founders, Security Tokens will comprise 50-90% of the crypto market in the coming years. Currently, the share is approximately 1%. -You can create a security token right now. Log on here and try the demo. -First blockchain telegram to reach 50,000 users. -Integrating with tZero. All new securities should have liquidity out of the box. -ST-20. A security token standard designed to ameliorate many of the issues with fragmented ICO's. -Launching a ST Venture Fund, "Polymath Capital". -New CoinMarketCap competitor. "Tokens.com". Perhaps they'll finally force some innovation on the CMC side. -Polymath 2.0 TestNet now live. BlockStack -Internet 3.0 is here. Mesh networks, decentralized data, crypto assets. We are not storing data with companies anymore, we are personally responsible. One day, we will have a universal ID that removes the need for a rolodex of passwords, usernames, and security questions. -BlockStack members advise on Silicon Valley. Fun fact. -Infrastructure and speculative investment grew from less than $100B in January, to $100B in May, and, finally, over $600B by November. -Sounds like a dApp talk. They're making iTunes for dApps. I'll come back when he says, "Bitcoin". Jack Dorsey and Elizabeth Stark -Jack first heard of Bitcoin in St. Louis via a group of Cypherpunks. -Appreciated the complexity of code, but didn't realize the potential just yet. -Met some engineers who wanted to build a Bitcoin solution for Square. Buyers/sellers could accept Bitcoin without knowing they were using Bitcoin. -Community "felt like Usenet" as it developed between 2014 and 2017. "Felt electric". -Claimed Square's strengths are speed and simplicity. Credit cards are complex and often emotional. Talking about the Cash app, the goal is to revisit the coffee purchase of old and make it feasible using Bitcoin. -"We have evidence to show people are using this as their primary spending account, their primary bank account, and, in some cases, their only bank account." -"We have people that have been blocked from entering the financial industry." Even merchants had problems accepting payments. "Reaching the underserved, reaching the unbanked", he says, feels good. -On Square adopting Bitcoin. "It was certainly contentious within our company." "I guess we always take the mindset that we can't wait for things to happen to us...If we want responsible uses...then we have to make that happen, we have to do the work to educate regulators, educate the SEC, show that we can provide more access to more people...give people a chance to participate in the economy...still a lot of disagreements and fights, but that's where the magic happens. We really push through, and this tested us. There was certainly a spotlight on us because of that fact, but there are a lot of unknowns. We ran towards them." -On the future, the potential of Bitcoin. "The internet deserves a native currency. It will have a native currency. I don't know if it will be Bitcoin or not, but I hope it will be. I appreciate the technology so much; the principles behind it. Using the guide that the Internet will have a global currency...it's going to happen. As a company, as individuals, we need to learn how to make that happen. The biggest thing I worry about as a company is there is so much openness within the community, I hope nothing corporate will come in and threaten it." Protecting the open-source nature of the work. "This is a discussion I have a lot with Mike and the team. No one company or corporation should own this. This is the main question of everyone I meet in the community. We have a completely open mindset to ensure this remains a completely open platform. Let's not wait for it to happen. Let's do our part to encourage it to be used in healthy ways and ensure that everyone has access to it. If we ever go astray call us out. We can't do any of this without the technology being strong and available to everyone." -"Obviously we are a centralized organization that benefits from decentralization. It's a theme of conversation within our organization and we're looking to decentralize our workforce. Cash is an interesting application in our company." Going to Australia next week to check in with the local team there. They are agnostic on what locale partners decide to nest in. -Large corporate HQ's like Twitter and Square, "are a thing of the past". People will be able to work from wherever they please. -"Nobody is going to a bank for a $6,000 loan. They're going to friends and family." They can all be served with this technology. -Hesitates to make articulated 5-10 year predictions, prefers patience and iterating as each year develops. "We want to go back to the original idea of being able to purchase a coffee with it. That's why we're working with you. Whatever it takes to get there, we're going to try and make it happen." Encouraging more access to the financial space is the primary objective of the Square organization. -"Over the past two years since we've really pushed our way into this, I've felt that electricity" -Elizabeth Stark feels like she's living through the mid-90's again, "In a positive way". -Stark is an optimist. "Really seeing the value behind the means of transacting without a middle party." It wasn't until Satoshi's whitepaper did we have the means to build a solution to this problem. -"Our goal with Lightning is to enable an application layer like the Internet". -Stark -On potential, compelling apps built on Bitcoin. "As I said, there's just so much to trust, to identity, to decentralizing almost everything we use today in a centralized way. We get the power of the crowd, the ability to see so many amazing perspectives and opinions to make our answers much better. I don't think about that as much as I think about what we need to focus on." -On what they need to focus on. "There's a desire for more. There's definitely an incentive to hold the technology and encourage a mindset of saving rather than spending. But making it easier to spend, easier to transact, easier to do the everyday is what we need to focus on. We aren't necessarily going to be the company that comes up with the right frameworks or technologies, but I'm confident we'll be part of facilitating the process." -The ultimate relationship with a regulator is that of education, Dorsey claims. -On becomng a global company. "If we were ever able to use it as a payment mechanism today, we could release it all over the world opposed to the 5 markets we're in today. With each market, we have to find a banking partner, work through the regulatory." Only way to accept credit cards in Japan involved a 15-minute interview with an official. There is a large amount of legacy legislation that hampers adoption. -On the next steps of democratizing finance. "Hardest part is continuing this conversation...certainly the regulatory bodies around the world, the banks..." Slowly but surely, Square is converting Goldman Sach's-types, showing them the reasons behind the movement. Having, "healthy discussions at the board level." -On advice getting started in the industry. "Follow the conversation on Twitter, first and foremost. (laughter) And not just follow." When he first followed the industry, he felt like he had nothing to contribute. Join the conversation, express a point of view. "So many people fear expressing an opinion...instead of treating it like a conversation". "While you follow these conversations--jump in. People are going to think you're weird, they'll disagree with you, but you'll sharpen your opinions...find where they resonate." Pursue success from there. BCash I visited the BCash table and asked the representative to respond to claims that the company was causing label confusion amongst BTC and BCH. She locked up, asked if I was press, and, "was not at liberty to discuss the topic". Scam. Scam. Scam. Did I say scam? That's it for Bitcoin! Thanks for playing Consensus 2018! I have tons of photos to upload, which I'll share in the Daily General Discussion as they come online.
Log of AMA with SALTLENDING - @caleb_salt (Caleb), @shawnsalt (Shawn), @gregg_salt (Gregg), @blake_salt (Blake), and @ben_salt (Ben) - shortened from slack chat
boldninjaLet us all give a warm welcome to @caleb_salt (Caleb), @shawnsalt (Shawn), @gregg_salt (Gregg), @blake_salt (Blake), and @ben_salt (Ben) from SALTLending.com . AMA can begin so please feel free to ask them questions, but give them some time to respond. dengson Hello is the team still planning on the $10 ico price ? blake_salt Our discounted membership sale will have several tiers, leading up to our initial $10 retail price. dr10 How would you - shortly & in easy words - sum-up the advantages of Salt to magazines and non-crypto people? caleb_salt @dr10 The advantage is that instead of selling your assets, you can leverage as collateral. This means you get money to spend but don’t trigger capital gains tax, don’t pay exchange fees, and get to benefit from the future appreciation of your asset. The reason you would want to leverage your blockchain assets instead of selling is similar to why you would want to take a home equity loan instead of selling your house. crypt0whale If membership price is $10, and at this moment in time you can still buy at $1.50 , what happens when the exchanges trade SALT below $10 or above $10? shawnsalt We will be actively looking to to buy back assess tokens that we can then resell. If the market sells low we will be looking to buy them back. dr10 What are the references of you and your team members? On what projects did you all work before? ben_salt @dr10 All our bios can be found here: https://saltlending.com/about dengson Do you think it's risky to not perform credit checks ? blake_salt @dengson the loans will be fully collateralized, along with full AML/KYC cannabanana where are you going to be headquartered at? blake_salt @cannabanana We are located in Denver, Colorado, buthave subsidiaries in several other countries. dr10 What gives SALT its value? What can I do with it? ben_salt @dr10 SALT Membership Tokens or SALT Platform? They have different but interrelated use cases tranzer What will be the rates to get some loans? What if you are not able to pay it back does your crypto get liquidated and at what rate (when you got out the loan or when you can't pay anymore? ) gregg_salt @tranzer Rates are determined by our lenders in a competitive market environment, based on the available pool of liquidity. As is the case in all credit markets, rates change and are subject to terms, conditions and SALT suitability, as well as KYC and AML screening. If a borrower is unable to repay their loan, then their collateral is partially liquidated to repay the lender. The price of liquidation is based on the market at that time. crowseye Can you tell us how much of the 120 mil SALT percentage wise will be in circulation on the market after the sales are complete? shawnsalt It is difficult to say exactly but we are retaining 45,500 for retail sales later. We plan to allow for SALT to be leveraged for loans as an asset and have a rewards program that will lock up a larger amount into contracts. I would be speculating if I said how many will be on the market after distribution, but we will be focused on signing up as many loans and allowing for as many SALT to be spend off the market as possible to drive the demand up. tranzer Are you going to stop accepting BTC now cause of segwit and all and just accept ETH for few days before and after 1st of August? How long will whole ICO campaign last? blake_salt @tranzer We have suspended BTC but will be accepting ETH. The discounted sale will run through all tiers leading to the $10 level. looperstar You have Erik as board director, is there any plans to connect salt with prism? caleb_salt @looperstar we’ve built our platform to leverage any blockchain asset. while we have a close relationship with the shapeshift team and are actively pursuing partnership opportunities. toons How will you review security of your solidity contracts ? Will they be publicly available ? (edited blake_salt @toons We will have both internal audits as well as external performed by Spirenet. randomtask Say I get a $10,000 loan.. The collateral I put up in Crypto begins to lose value.. What happens next? Is the amount put up for collateral adjusted? Does liquidation occur at some point? gregg_salt @randomtask A borrower has options. They can pay down the loan, post additional collateral or do nothing and a portion of their collateral is liquidated to repay the lender and the loan continues. dr10 As I have read on your Website, I can register with 1 Salt and have access to 10.000$ for 3-24 months. If I lock in enough crypto-money and get out I can take a loan of maximum 10.000 Dollars. If I repay these 10.000 Dollars within the first 6 months – Do I still have access to 10.000 Dollars in the remaining 18 months? Or does the access too 10.000$ gets reduce each time? When do I need to register with another 1 SALT? ben_salt @dr10 the SALT Tokens give users access to different sizes of loans within the platform and can be used to pay down a portion of the interest on a particular loan. crypt0whale Is there a sneak peak to the actual platform or portal itself? Everything sounds great about SALT, but is there something we can see? caleb_salt @crypt0whale we will be releasing screen shots of the UI soon. tranzer Will SALT token holders be able to lend their SALT tokens and receive % of loaning rates as well? blake_salt @tranzer Our first product is BTC backed US Dollar loans, but it is possible that in the future one will be able to lend or borrow against SALT. dr10 What are the references of you and your team members? On what projects did you all work before? shawnsalt I have been involved with Bitcoin since 2010. I operated the fist restaurant/ bar brick and mortar to accept Bitcoin for purchases since 2012 in Colorado. I help run the monthly Bitcoin/crypto meetups here in Denver since 2012. I was originally working on consulting and entertaining several projects before ultimately going full time to start SALT. My background is in business ownership and management with a passion for technology and finance. dengson For tier 3 and above what will be the amount of capital to be targeted until the $10 range ? shawnsalt Basically its cost of capital of $10 per $10,000 needed. There are scales of economy that change with very large capital needs such as additional security and risk mitigation attention along with a higher tier of customer support. Ultimately we will be valuing the cost of running the lending network in terms of access in SALT. The model is designed to simplify our revenue model. crypt0whale If I have $500,000 in my bank account and I come to SALT to put it up as collateral do I determine what margin I get on my cash ? shawnsalt Currently we are not using Cash as collateral although we do plan on this in future versions. You can either use the cash as a lender to loan out, or you can access borrowing. thadstrike Hi. It seems that Salt Lending would be just as great an idea without needing to mint a new SALT Membership Token. Why not just charge an annual membership fee for access to Salt Lending that is payable in an existing digital asset? Thank you. ben_salt @thadstrike The Membership Token allows for unprecedented levels of transparency, audit ability and transferability. Using an existing asset does not allow us to do many of the things we are developing. tranzer Are you in the talks with any of the exchanges to list SALT on? WIll you convert BTC holdings you get in your token sale to FIAT? Are you going to put any buy walls at some marketprice so it won't dip below that (for instance at $2) gregg_salt @tranzer We can not comment on exchanges. arkvader What is your upper limit on the amount you will lend? blake_salt Ultimately there will be no limit. deedle But when SALT ultimately accepts SALT as collateral, you could buy $500k in SALT and use that SALT as your collateral as a loan, right? caleb_salt Correct, as long as the asset is on a blockchain it can be leveraged- there are exceptions for assets that lack the needed liquidity or market cap. dengson How many salts were released in tier shawnsalt We are not exactly sure and are currently working on an audit by a third party. This tier was very fast and short at $0.25 designed for the first testers to help us build the site before we had a user interface. The discount has been designed all along to compensate for people who have helped us work through all bugs and issues as fans. The closer we get to releasing the MVP for use this year the less we will discount. tranzer can price for salt membership change? Like what if salt token gets to $50 per token? blake_salt Yes the price can change. SALT will always be available directly from us at or slightly above whatever the market price is. blake_salt Providing that we have available inventory. dr10 Can I take 50x20 Dollar loans? With each membership paying 1 Salt. caleb_salt you could take multiple loans, but you would only need one membership so long as the total value of all the loans doesn’t exceed $10k. For more than $10k, you would need more memberships. deedle That's correct. But when the market price is $10 or greater, people will buy directly from SALT for simplicity. And it will be sold slightly higher than $10 on SALT Lending's site. @crypt0whale shawnsalt Exchanges will list how they want to. We become just one more buyer and seller except that we will always sell above market and have an incentive to by if prices drop below ours. bessa why the name salt? gregg_salt @bessa The SALT name is meaningful to us because it hearkens back to the time in history when table salt gained use as a store of value, becoming one of humanity's first monies. By utilizing salt as a medium of exchange for food, clothing, and other general provisions, it was salt which broke the mold of what a currency could be - there was no longer need for intrinsic value, now value was just an abstraction. SALT is also the name given to our programmed loan smart contracts as an acronym for Secured Automated Lending Technology (SALT). shawnsalt Secured. Automated Lending Technology is our tech company. Also, because salt tastes good. And it was the first historically used money that was a commodity money, store of value, and used good. It's granular nature and mold breaking historical reference was analogous to Bitcoin at the time with how hard it was for us to get lawyers to understand it. dr10 So if there are investors with interest rates, how does Salt maximize their gains? Do you focus on 'taking a small part of the interest rates' or in raising the price of 1 Salt Membership Token? gregg_salt @dr10 if you want to exceed the 10k minimum, you would need to redeem 30 salt and move to the next membership tier. tranzer Will SALT tokens be burned (those used for membership or anything else)? caleb_salt no, redeemed SALT Memberships will be held and resold. bessa Why do you guys do a sale divided in 3 tiers? shawnsalt Three tiers is an easy way to describe a low, medium, and high use case. Ultimately it is much more granular. bessa Why do you guys do a sale divided in 3 tiers? shawnsalt Three tiers is an easy way to describe a low, medium, and high use case. Ultimately it is much more granular. blake_salt We have had several tiers to incentivize the community to help us build this thing. The closer we get to launch, the less we need to discount our product. dr10 So if there are investors with interest rates, how does Salt maximize their gains? Do you focus on 'taking a small part of the interest rates' or in raising the price of 1 Salt Membership Token? gregg_salt @dr10 SALT Lending is not a lender. We do not take economic interest in the loans underwritten via the platform. A separate funding entity may participate along side other lenders. djselery to bad the btc is frozen right now. i dont trust eth shawnsalt We have Shape Shift integrated also so you can convert. we plan to have BTC back soon when the network looks to be over the forking conversation. dr10 @gregg_salt so you only focus on gaining money by having high prices on membership tokens or any other possible incomes? gregg_salt @dr10 Typically, conventional loans are accompanied by a myriad of itemized fees such as upfront origination fees, which can exceed 5% of the loan balance, and monthly servicing fees that are paid by the borrower on top of the monthly payments to the lender. SALT has opted for a simple model where fees charged to borrowers are rolled into an annual Membership to promote transparency and fairness. dr10 If I have official qualifications for credit institutes (in germany called SCHUFA), that I am highly relyable in paying back my loans, does this effect the interest rates or anything else in my Salt Loans? Can I have even better lending terms? caleb_salt It doesn’t effect your interest rates- our platform is for asset backed lending, not credit based. Because blockchain assets are fungible, a borrower’s credit doesn’t have an impact on the loan’s collateralization. bessa Does SALT hire new people for their team? gregg_salt @bessa yes. we are actively looking for talented people. deedle in #trading_altcoins Is there a chance the public sale will have one standard rate? That might make the most sense as those that try and enter the public sale and get pushed out of the first tier rate are likely to be very upset and have potential to smear the brand. blake_salt We will have several tiers and there are bound to be individuals who are disappointed to have missed a given tier. However, our main focus is providing our customers with an outstanding product and excellent service. crypt0whale I understand you guys are not allowed to talk much about the exchanges, but have you guys made efforts to present SALT to any exchanges yet and is there any positive feedback that any exchanges are interested in your token? shawnsalt We have had many exchanges and people related talk to us. to be very specific, the reason we are not talking about exchanges is two fold. 1. This is advised against from legal counsel as SALT is a consumptive use case and should not be sold as an investment. 2. it is not our business to talk about what other businesses are doing. What I can tell you is that we have confirmation of being integrated into the Exodus wallet, and the Jaxx wallet. These are both partnered with Shape Shift. I hope that helps. kisil when will you release the whitepaper ? shawnsalt As soon as it is back to us from legal counsel review. Currently we are waiting for review. Anything that will be discussed here will be for general information and will all be covered in the white paper. kisil will the public ico take place before end of august ? caleb_salt We are hopeful that the public will be completed before the end of august. dr10 If I alway pay back my Loans just-in-time. Will there be a feature in the future, that I get better interest rates, because I am a good boy? shawnsalt Yes. we have a rewards program for all SALT holders that incentives a number of positive behaviors. This would we one of those good behaviors. eongaban What is the SALT hardware wallet and what assets will it be able to hold? blake_salt The list of tokens will be constantly growing. If the collateral loses value, a margin call will be made or a portion of the collateral will be liquidated to maintain the LTV. The hardware wallets are Keepkey and Ledger, and will be able to hold SALT and 2fa tranzer So salt tokens will be issused on the ethereum blockchain correct? shawnsalt Yes. we would like to migrate to Root Stock if their project is successful but for the time being it will be ethereum. dr10 What are your marketing approaches. How do you want to get known and conquer crypto-space? caleb_salt We have an ambitious marketing strategy that will incorporate referrals, paid advertisements, community engagement, and multi-media productions (including a video from you :) kisil trezor will also work right ? shawnsalt Yes, but we have not partnered or worked with them yet. We would like to integrate with all respectable Hardware wallet providers. leongaban How are funds released to the user, direct deposit into Bank account? shawnsalt Yes. through linked bank accounts. demtri In which countries will Salt loans be available to? blake_salt We are working on making our platform available to borrowers and lenders worldwide. dr10 Can you give a short list of future-features that the Salt Platform will or want to provide? caleb_salt I can mention one. We will be adding the ability to leverage crypto to spend another crypto. thrice.pi Realistically what happens if enough fish dont bite SALTS line for a long period of time.. How will you be able to buy up coins for extended periods of time and fund your network. Is there a back up solution in case of this worst case scenario? shawnsalt We are not going to be selling any of the BTC or ETH collected. We are instead going to be borrowing against it as collateral to prove our model. This gives us a major advantage as we only need a few Million dollars at any point in time for build out. Also, on top of borrowing cash to grow the business, we are going to be raising money in an equity raise and will stay well capitalized. We have many more products coming down the pipe line to build that will cost cash and add value to the network. tranzer What will be the minimum requirement for other cryptos to be leveraged? Will you add ark in your platform? gregg_salt @tranzer New asset on boarding is based on demand. dr10 Will you use Ark as a platform aswell? It hasn't bad performances as Ethereum. Just saying. :minglee: shawnsalt Willing to look into this for sure. leongaban For the 100k plan, currently it's 30 SALT, which at $10 will be $300, if SALT goes up to $30, will the amount of SALT needed to reach Premier be reduced? blake_salt Ultimately we will achieve an equilibrium in terms of the cost of membership. kisil can i leverage my rare pepes ? gregg_salt @kisil if they are recorded on a blockchain. mward when will the ico resume? shawnsalt No. we are waiting until we have fully verified the security audit of our Ethereum architecture. We will blast out to all of our channels before it goes back online so everyone will be prepared. donkeydick Will it be a certain amount a month? shawnsalt There is no program that we will commit to on this. There is a separate entity in our organization that is positioned to buy these back when it makes sense for us. Mostly as a price stabilize and for us to retain for later. dr10 Ok, a direct question here. If someone says that having 1000 SALT is unneccessary because you can easily borrow 10.000$ for 1 Salt. How do you respond to that. Why is it still a good investment? blake_salt SALT is not an investment. It afford access to our platform. dr10 yeah but people will participate in your Crowdsale. Why should they not just wait for a later time? (edited) leongaban You could resell em blake_salt Anyone planning on taking a loan will not have an opportunity to purchase membership at a cheaper rate than right now. blake_salt One can also use SALT to lower their interest rate. tranzer If someone is holding for say 10,000 SALT on your platform (maybe "locked") will he get any rewards for it for not selling on exchanges? shawnsalt This is a program that we are focused on but have not put out any official details about. I love the idea as a hybrid form of staking on the platform. crypt0whale If SALT is not an investment and it simply offers access to your platform what are your top 3-5 reasons to explain that there will truly be a demand to be someone to own SALT outside of putting up your crypto as collateral for a loan? ben_salt The reason that people want to own SALT is tied to the fact that they can lower their cost of borrowing over the long term. Think of our membership in terms of a loan origination fee, one that early adopters are paying in advance. thadstrike @blake_salt said earlier that the SALT Membership Tokens are "primarily used to access our platform" presumably only as a "member." If I plan on becoming a "Premier" member for 30 SALT Membership Tokens per year, what value would there be in purchasing more than 30 or 60 tokens (1 or 2 years worth of membership) during the crowdsale apart from just getting a discounted future membership and helping Salt Lending raise money? If an ever-increasing membership fee is the only thing adding value to the SALT Membership Tokens (i.e. 1 token = at least USD10), the membership fee cannot increase beyond the price members are willing to pay? How does a membership token have more than USD10 worth of value over time, especially with up to 120 million (?) tokens minted? Thank you. blake_salt We believe that the value of SALT will reflect the demand for leverage in the market. Because we do not charge origination fees, we expect that the price of SALT could reflect that. The initial $10 is very low. shawnsalt Hey SALT fans, thank you so much for taking the time to chat with us and get a better understanding of the project. We greatly appreciate your support and feedback helping us grow and strengthen the business. gregg_salt Disclaimer: All communication within this Slack channel is provided for informational purposes only, and is subject to change. It is not an offer or a solicitation to buy or sell any securities or other financial instruments. The SALT Token is a consumptive use product permitting access to the services provided by the SALT Lending Platform, as detailed above. Terms and conditions apply. Subject to suitability, KYC, and AML screening. For more information, please visit SaltLending.com. dr10 Will you work with "real-world"-financial sectoinstitutions? shawnsalt Yes. we are building SALT to be licenses by financial institutions. samj What if ones value or wallet decreases below the borrowed value? Is there any insurance to cover that loss? caleb_salt our tech doesn’t allow the value of the collateral to drop below the value of the principal. It maintains the calibration of the loan to value ratio through maintenance calls and, if needed, liquidation of a portion of the collateral to protect the lender’s investment.
Offisium Network Decentralised barter exchange platform May 24, 2018 Introduction to the Offisium Barter Exchange Project: Offisium is building the first decentralized barter exchange, a supply system of liquidity, and asset backed blockchain hub. It’s a cryptocurrency developed to replace the traditional “trade dollars” in the barter trade system. An open distributed system of liquidators which upholds barter trade conduct of all members of the network. It uses a mechanism of a protocol token to make a delegated proof-of-stake blockchain dApp to regulate the barter activities amongst participants. The decentralised barter platform hub allows businesses and individuals to trade their goods and services, for other member’s goods and services. Participants can buy and sell their goods or services as part of a global network. The network will help businesses gain access to a huge potential customer base, which is not accessible to typical competitors who do not use the network or hold and Offisium private key. This also works for businesses in guaranteeing to bring new customers allowing them to grow or to use spare or underutilised cash/goods capacity. It will provide one of the world’s most innovative blockchain business models by making the barter trade process simple to manage. Unlike all other traditional barter exchange platforms, Offisium also allows for decentralised barter of other blockchains and between multiple blockchains directly without a trusted gateway barter currency. This is achieved using EOS smart contracts, protocol tokens to uphold correct market behaviour of matching transactions and invoices, exchange data for use with EOS smart contracts. Offisium is a London based Blockchain Startup. A decentralised exchange where goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money. The modern trade and barter industry includes four major sectors; retail barter exchange platforms (mutual peer-to-peer credit clearing systems), corporate barter systems (who perform larger company barter transactions), counter-trade (usually between sovereign governments and targeted on import & export of commodities), and complementary currency systems (local/community currencies).
1.Traditional Barter Exchanges (Problem) vs Offisium (Solution)
Offisium is the result of a close study of the current economic affairs. Nowadays we have a fiat money that is used to buy a certain labour (service). If I'm a plumber, I must work a certain amount of time per day and get paid at a rate. For my time, not the value of my work or my labour. Because people have put a price on the value of what they do. If a doctor is saving lives, the value of his work will surely be bigger than the value of a carpenter who makes tables. So eventually, when we talk about hourly rates, for doctors, plumbers or attorneys, we are not valuing their time, we are valuing their work. And we use the time to derive how valuable their time is. Offisium tokens value comes from the value of labour. The value of what is produced, whether it is a service, or a product. This means that fundamentally, the tokens are not only acquired through purchasing them on an exchange, or buying them through an ICO, but also through using them to exchange service value between individuals and businesses. They are acquired by using your time and the value of that time at your work. To pay for another service or good, using your own service or good. If a doctor needs a tutor to teach his child, instead of paying him with dollars from his bank account (cash). He pays him with his service as a doctor. Provided they are both members of the Offisium Network and both hold Offisium Wallets. The network here serves as a middle man to facilitate the bartering of these goods and services. The exchange rates between the doctor’s service and the tutor’s service, will vary. A doctor's one hour may be higher in value than a tutor's one hour of work. For this to work, Offisium debits the doctor’s wallet and credits the tutor’s wallet with tokens that they both agreed to, to sell their goods and services for. This is the core concept of a barter system for exchanging value between individuals and businesses. Offisium is aiming to use interest-free token lines of credits which will allow direct swaps between private key holders. Members may then earn token credits by exchanging goods and services among themselves. Which they can then spend again on the same network. The transactions are recorded in the decentralised ledger which is open to all members. Token credits are issued by the Offisium network members, for their own benefit and therefore considered mutual credits. The only difference this time, the transactions are open and transparent, and decentralised. The real question however is, how can a barter economy be a better economy? We first must agree that; “Any economy is a barter economy” One thing is traded for another, each party to the trade valuing what he gets more than what he gives. Always a win-win transaction, regardless of the items involved. But simple barter without a monetary system is like comparing the performance of a roller skate to that of a Ferrari. And an economy whose marketplace is not entirely free, but whose prices are distorted by forced transactions via government interference, regulation, "protection" etc., is like a Ferrari with a flat tire and misfiring cylinders. Money is simply the most widely acceptable trade commodity in a "division-of-labor" economy. For some 5000 years that has been silver and gold, especially in coin form, which were arrived at because of their physical properties giving them the functional attributes of sound money: uniformity, ** divisibility*, **durability, and **scarcity (limited quantity) *. Paper "money" (currency), fulfils well all of these functions except the last. When more "money" can easily be produced without significant cost--as printing press products, or even worse, digits in a computer--those who control its production (and make monopoly laws forcing its acceptance in trade to the exclusion of other media) inevitably fall victim to the all-too-human temptation to produce it to their own advantage and to the disadvantage of everyone further down the distribution line. The only purpose of legal tender laws is to force people to use something they would otherwise not choose for money if left free to decide. No one must be forced at gunpoint to accept good sound money in trade, at least not until they're brainwashed to the point of believing that paper, not gold, is real money. Money, like every commodity in the marketplace, has a price. For the money, its price is the inverse of the price of any commodity. This is particularly easy to understand in the international money market where currencies trade against each other. The supply-demand-price curve teaches us that with increasing quantity, the price will decrease at constant demand, or demand will decrease at a constant price. Flooding the marketplace with intrinsically worthless scraps of paper is not the road to riches. Except for those who do the flooding, spending their zero-cost fun coupons at the price preceding the fall in purchasing power when the market adjusts to the new quantity. This is why prices continuously increases in a fiat currency system. Only when the market distortions resulting from the easy money misallocation of scarce resources causes the economy to crash so we see actual deflation as cash-strapped borrowers default on loans, banks go belly up, and goods are sold by desperate merchants for whatever they will bring in something a bit closer to a free market. To sum up, a money-less basic barter economy is incredibly inefficient and paper fiat currency used as a money substitute in the marketplace is either just plain dishonest or rife for abuse by the bankers who control it. A free market economy based on honest commodity money has proved itself the best system imaginable to date to provide a steadily increasing quality of life for the most people. Therefore, we introduced Offisium as a solution to both problems. A network of money-less exchange of value, using the most efficient, immutable, transparent and decentralised ledger. The blockchain. It is possible to argue that a system is not considered barter if there is a unit-of-account. (OFFS Tokens). However, that is an archaic and incomplete definition of the word barter as defined in modern usage. A system of barter implies organised barter, rather than a one-off. Perhaps it is a misnomer for the word to be applied to modern barter networks, but it is generally accepted. Governments totally appreciate organised barter networks. If the economy is slow and the GDP is down XX% from peak, tax revenues are down XX% from peak too. That is the minimum that can be made up through cashless trading. There is always excess capacity stagnating in the marketplace for a need of national casino chips. Trade monetises spare capacity and creates taxable commerce. Governments embrace the corporate barter industry, and in some cases even use them. Some key dimensions that determine whether money or barter is better are: · The separability of money transactions from the enjoyment of the good or service in question, so that financial transactions don't mess up the creation of value. · The credibility/stability of the money being used. · The complexity of the economy -- the degree to which workers are specialised and goods are differentiated, making it unlikely that the producer of what you want is a consumer of what you make. Cash Trade vs Offisium (decentralised barter)Trade: Sometimes, money transactions surrounding a good or service affect its consumption value. An easy, yet interesting example of this, is sex: its value to those involved changes drastically if it's paid for. When something has this property, we say that its value to the consumer is not separable from money transactions. For goods like this, the classic arguments suggesting that trade with money yields more efficient outcomes fail, and barter is likely to be better. Less racy examples include personal letters, a friendly conversation on the phone, birthday parties, etc. These goods and services are more efficiently provided through a mechanism of trading favours and informal mental accounting, and in fact, that's what we see in the world. The more one's “use value” of something is negatively affected by the knowledge that there is an explicit, monetary quid pro quo, the more we would expect it to be bartered rather than bought and sold. Effective trade with money also requires a stable currency. Whether it is something natural (like gold) that's used as a currency or something printed by a government (like dollar bills), the people involved need to have beliefs that rationalise accepting it in exchange for things of real value, like effort, work, labour, danger etc. They should believe that they'll be able to buy things of value with it in the future. That, in turn, means they should believe that many others will have similar beliefs. When there is uncertainty about these things, the uncertainty reduces the value of money and introduces a friction into monetary transactions. The uncertainty can come from not trusting the people who print the money: if I think they'll print a ton of it later and devalue the bills I'm currently getting; a dollar is not very valuable to me. In the case of gold, it can come from not believing that the people I'll trade with in the future (perhaps different people from the ones I'm trading with today) will regard it as valuable. And the same can be said about Bitcoin. A functioning currency requires a social setting that is cohesive and stable in certain ways, and when that's absent, barter offers a clearer path to efficient transactions. Of course, money has one main, vast advantage over barter: it overcomes the problem of the double coincidence of wants. Suppose Ann can do a favour for Bob every day; Bob can do a favour for Charlie every day, and Charlie can do a favour for Ann every day, and nobody can do anything for anyone else. There is no scope for bilateral barter in this situation. But if a favour costs a dollar, then Ann can buy a favour from Charlie for a dollar; Charlie can use the dollar to buy a favour from Bob, and Bob can use the dollar to buy a favour from Ann. Nobody needs to worry about whether everyone in the cycle is doing their jobs -- they just trade a favour for money in their bilateral relationships. Favour flow around the cycle efficiently with a minimum of explicit coordination. Note that in this example, nobody values money in itself -- it is just paper: people only value favour. But money is the instrument that enables us to coordinate the flow of favour around the cycle. Thus, in a complex economy, it is very rare that the person you want to get stuff from wants whatever you produce. (For example, the people who make burritos at Chipotle have little immediate use for the algorithms or economic analyses that some of us produce.) Indeed, the kinds of cycles that are present in the real economy are very long. This is intensified when people become more specialised in their work, and as goods become more differentiated. Thus, assuming that we don't have the non-separability and currency stability problems outlined above, money beats barter by a long shot for the trade of specialised goods and services among a large number of diverse agents. This brings us to question the difference between cash payments and a barter exchange of value. The answer is in what we call "Value”. Nobel Laureate Al Roth published an article titled "Repugnance as a Constraint on Markets"2 where he explored the notion of associating cash Payments with Repugnance. “One often-noted regularity is that some transactions that are not repugnant as gifts and in-kind exchanges become repugnant when money is added. The historical repugnance to charging interest for loans seems to fall into this class too, as do prohibitions on paying birth mothers of children put up for adoption, and perhaps prostitution. That is, loans themselves, and adoption, and love are widely regarded as good things when given freely, even when their commercial counterparts are regarded in a negative way. Similarly, in Massachusetts and California, it is legal to sell human eggs for fertilization but illegal to sell them for research purposes, although it is legal to donate them for research. And widespread outrage in Britain greeted the decision to allow sailors recently released from captivity in Iran to sell their stories to news media: after two sailors had done so, the remaining sailors were no longer allowed to receive money for interviews offering money is often regarded as inappropriate even when not repugnant. Concerns about the monetization of transactions fall into three principal classes. One concern is objectification: that is, the fear that putting a price on certain things and buying or selling them might move them into a class of impersonal objects to which they should not belong. The sociology literature has shown a longstanding interest in how the introduction of money changes many kinds of social relationships and their meanings. A second concern is that offering substantial monetary payments might be coercive, in the sense that it might leave some people, particularly the poor, open to exploitation from which they deserve protection. A third, the concern, sometimes less clearly articulated, is that monetising certain transactions that might not themselves be objectionable may cause society to slide down a slippery slope to genuinely repugnant transactions. Experience suggests that ideas about the inappropriateness of certain kinds of transaction, even when this inappropriateness falls short of outright repugnance, can constrain market design.
Offisium’s Decentralised Barter Exchange:
The barter system itself doesn’t have more specific weaknesses than any other human-driven system. Wherever humans are involved, there is an opportunity for scammers and cheats who are looking to take advantage of the system. This is true for business and every other interaction between people. You can create official smart contracts and smart transaction receipts for bartering in the same way you do for business deals on the blockchain decentralised ledgers. It merely involves an alternate form of payment (transaction). One might say that a weakness is how much more creativity and effort is needed, compared to walking into a store and exchanging cash for what you want. However, we see this as a bonus because it forces you to network more effectively, build stronger relationships, and opens more opportunities for a decentralised transparent and trustworthy future. Being connected adds that much more value to the barter, over simply paying a cashier and walking away.
How is an Offisium Transaction Invoiced?
The invoice is raised just like any other transaction on the blockchain and is reflected in the open ledger. The outstanding is squared off by making purchases from the same account and booking invoices for the purchases made. If it is a direct (10M) transaction, it is advisable to make the transaction back to back, so the outstanding does not stand there for too long. In case of buying and selling through an exchange, there are multiple transactions and outstanding is taken care of time to time. Business owners love bartering because it saves them cash; It moves excess stock or idle inventory and fills up their downtime or spare capacity. Chances are you have conducted a one-to-one barter deal in the past and the outcome was a win-win. However, while these direct barter deals can be effective, they lack flexibility, which limits how often they may occur. The challenge with a direct one-on-one barter is you might want something that one business has but they may not want what you have. By creating a Crypto Currency of traded Offisium tokens, you can barter-trade conveniently with up to millions of Offisium network wallet holders worldwide. Offisium creates a flexible, secure and fully accountable way for businesses to barter their goods and services with businesses all around the world. This makes it one of the largest B2B, B2C, C2C, C2B and B2C networks with Millions of participants who hold an Offisium Wallet and who will be effectively using barter to Gain new customers, who generate increased sales income. Move excess stock. Free up cash and Increase profits from the introduction of new business. Trading Offisium Tokens for the goods and services you sell and this value is recorded electronically on the blockchain and in your wallet.(Just like you do with a bank account). You then spend your credit balance (or draw on your interest-free line of token credit) on goods or services from any other Officium Network member. This offers completely flexible trading because the purchase can be from the same business that purchases from you. You spend with anyone locally, nationally and internationally. You can sell now and buy later or buy now and sell later. You can use the interest-free line of token credit as working capital, even before making a sale. Officium Network brings a solution to the current issues of Cash/Liquidity problems within a certain business. Most businesses if not all of them like to keep cash flow. And most startups fail due to cash flow issues. Being an Offisium member and having a line of interest free token credit, not only will allow you to start your project. But also pay for it back using the value of what you do. You could pay the network back by selling us your products too. This is also an opportunity for blockchain developers who have spare work time who could pay back the network by choosing to work for the network and help it grow in their own spare time. Offisium transactions are similar to a credit/debit card transaction. There are several Point of Sale tools available to process transactions, including the back-office of our website (which is a bit like online banking), A smartphone app (Offisium app) as well as traditional methods. Offisium’s website provides real-time statements so you can reconcile all transactions. Offisium is a 100% trading system exchange. Every client agrees to buy and sell at 100% full Offisium barter using our tokens. There are practical exceptions to this rule such as property purchases, or £100,000+ capital equipment purchases with a minimum 20% barter component through Offisium. Offisium will be hosting local, national and eventually international networking functions every month and regional Trade Shows. Our users are encouraged to participate in these functions in order to meet other business owners and promote their own companies. It is a great way to build up your business contact base. Offisium token is called “OFFS” and is the trading currency that Offisium clients use to transact with each other. Barter transactions on the network are accounted for the same way as your cash transaction, therefore you claim Tax back on purchases, just as you do now. The tokens will be used as utility tokens. To be continued...Offisium is awaiting the full public disclosure of its Whitepaper and Roadmap. [[email protected]](mailto:[email protected])
Market Sentiment #7 (+ BCH v. BTC battle, summarized)
Ok. What a week! So much happened! Bitcoin v. Bitcoin Cash I had predicted something big happening with Bitcoin Cash on multiple occasions. But I would have never been able to guess the sheer scale of what happened. Let's summarize what happened (I'll update this later with links so that you don't have to take my word on any of this):
Bitcoin Cash has been steadily developing a strong fanbase - this includes mostly those who are disillusioned by the crazy transaction costs, and in some parts the high levels of censorship on /Bitcoin
Bitcoin and Bitcoin Cash proponents have been at loggerheads at each other - for some reason, either camp believes that they will be successful only if they reduce the other coin's value to zero (!)
Figureheads for either side are demonized in the opposing camps. Bitcoin hates Roger Ver and Jihan Wu, and Bitcoin Cash hates Blockstream, Theymos, and the initial core developers.
While all the political shit-throwing was going on, users were facing issues with transferring BTC due high fees and long wait-times. There was, and still is, an immediate need for scaling
Cancellation of the Segwit2X fork was the last straw for many, because that simply meant that the scaling issue would continue for a significantly longer duration
The market was thus divided, between those who wanted scalability today, and those who were content with considering it as simply a store of value until solutions were developed (I personally find the store of value argument b.s., as I had mentioned to another user here)
This division resulted in a mass-exodus of funds from Bitcoin to Bitcoin Cash. Was the market manipulated? Sure it was, that's how the whales make their money. But that doesn't change the underlying fact that the insane spike in price (resulting from billions flowing into BCH) showed how frustrated a larger portion of the market was with BTC.
Because of the flow of value from BTC to BCH, BCH started becoming highly profitable to mine. Thus, miners switched camps from BTC to BCH, resulting in even more unconfirmed BTC transactions.
The flow of value would have likely continued, if not for the inexplicable crash of bithumb, a Korean exchange that was processing a significant majority of the trade volume. Was this an intentional DDoS attack? I think so.
Things have settled down quite a bit now, with BTC going back up to early 7k's, and BCH finding stability at 4x the price it was 2 weeks ago. So is the whole "Flippening" drama over? Hell No.
If you look at the hash rate and profitability statistics here, you'll notice that BCH is far more profitable to mine than it was a few days ago. This means that miners are a lot more inclined to shift to mining BCH. If I were a scheming whale mastermind, I'd say that this coming weekend would be the perfect time for another BTC pump. Of course, that could go the other way, resulting in a BCH dump as well. This is why I'm extremely cautious in the markets these days, always moving everything into fiat before I sleep/go to work.
So, my thoughts? I don't think BTC is going anywhere. It's the poster child, and there's no way it can be traded into oblivion overnight. But I also think that BCH addresses a key need of the hour - scalability. Irrespective of the approach, scaling is something we badly need right now. So BCH will grow. It will end up becoming a major force in the crypto sphere because of how easy it is to transact. There's more than enough space at the top for all the cryptos to co-exist! Market Sentiment For the coming week, I daresay we can expect atleast 1-2 BTC bull-runs, but there is the small chance of the aforementioned BCH pump over the weekend. Overall, a good time for trading alts:
ARK has shown some signs of life after what felt like forever under the 3 dollar-mark. $3.02 is providing strong support right now, so I'd put buy orders as soon as it bounces successfully. This coin has very good long-term potential.
IOTA - Over the past few days, I purchased a significant amount of MIOTA to add to my portfolio. This coin is extremely bullish for December, so I'd advise you to scoop some up whenever the prices seem reasonable to you.
Vertcoin - If you look at the 15-minute interval VTC historical graph over at TradingView, you'll very-quickly notice a pattern. A sudden spike, followed by a short period of consolidation/dip, then another sudden spike. I daresay the time has come for VTC to set its sight on 75,000 Satoshis
A few low-market cap coins that are being hyped a lot these days are Request, ChainLink, and Modum. Modum, specifically, has caught my attention as being quite undervalued. I'd suggest researching into these coins, and potentially adding it to your portfolios if they seem like good investments to you.
For me personally, market uncertainty will last until a couple days after the next difficulty adjustment for BTC (~15 days), whence mining is estimated to become 30% more profitable. But hey - I'm overly cautious. Don't let my cautiousness stop you from trusting your gut.
If nothing unexpected occurs to bring down the entire market, I think we will start an amazing bull-run by the end of Novembestart of December.
Something else that I noticed was how resilient (and profitable, even!) coins like ETH, XMR and OMG have been through everything that has been going on. Conditions seem ideal for ETH to finally get out of the cursed #300Zone, and go back to previous all-time highs. These markets are ideal for short-term trades and swing trades. Keep compounding your investments by 1-2%. Do it enough times and you'll be a millionaire! This post was delayed due to a frantic week both at work and in the crypto-sphere! Table of Contents
Could AT Follow the path of BTC? A Professional Analysis.
Platform Token adopts Bitcoin Mining Model. But Can AT copy Bitcoin Success? If given a chance to travel back to 2009 and mine Bitcoin, what would you have done? As the first decentralized cryptocurrency, Bitcoin is the first and also the most successful one so far. It plays an important role in the cryptocurrency world as gold in fiat world. An increasing number of people speak positively about the value of Bitcoin. Now 80% of Bitcoin has been mined, the release of which declines by half every 4 years. Scarcity results in an increase in demand, which drives the value of Bitcoin. ABCC Exchange Platform Token: AT Over a week ago, crypto exchange ABCC announced the issuance of ABCC Token (AT). The total supply of AT will be 210 million, 40% of which will be released through Trade-to-Mine mechanism, 10% for historical users as a reward, and the remaining 50% distributed to the platform, the team and investors. All AT holders are eligible to share 80% of the daily transaction fee. Besides, the mining mechanism is similar to Bitcoin model - the periodical mining difficulty increases by 50% with a fixed total supply. Today ABCC revealed the details of its ToM mechanism. hat AT mining would bring token holders high return as Bitcoin did. Is it simply bragging? Or might it be the next Bitcoin? Let stats talk. Reasonable Total Supply It’s not uncommon that the total supply of a token is over a few billion or even more. The table shows:
In comparison, Bitcoin is limited to a maximum 210 million total supply. Today, the current circulation of Bitcoin suggests that scarcity causes a huge gap between supply and demand, as more people participate.
English name: BTC
Supply: 21 million
Circulation rate: 81.5%
Listing exchanges: 163
Initial price: $0.06
Current price: $40,018
Issuance time: Jan 2009
Consensus Protocol: POW
The total supply of AT is 210 million, which is the same as Bitcoin total supply. It balances the supply and demand in market by assuring the scarcity of the token. It also takes circulation into account. Common Trans-Mining Mechanism VS. Bitcoin Mining Model On January 3rd, 2009, Nakamoto released the first version of the open source Bitcoin for clients and announced the birth of Bitcoin. At the same time, he mined 50 Bitcoins, creating the initial block of the first Bitcoins. His Bitcoin design principle is to release 50 BTC every 10 minutes, and reaches 210k blocks every four years, then the rewards decline by 50%, from 50 to 25 and then to 12.5. The total supply cap will be hit in 2140 with an estimated market value of over 10 trillion dollars. BTC are easy to mine in the early days while the price was relatively low. Later on, mining difficulty has increased geometrically, and the BTC price has soared. There is still more than 6,000 times increase given the current bear market. Compared to Bitcoin model, some cryptocurrencies such as FT (damn, the price keeps dropping!) adopt a mechanism of “mining while trading”. There’s no limit in the amount of tokens to be mined. The more people participate in the revenue distribution, the more quickly the supply of tokens increases. The token supply outnumbered the growth of the platform revenue, so that trading contribution each user gets decreases. Stuck in such a passive circle, the currency price is doomed to fall. That is what’s happening to some platform token. Its price has shrunk by 80%. ABCC adopts Bitcoin’s model. During the first 120 days, it will release a total of 700k ATs within four blocks every day. The total amount of minable tokens declines by half every 120 days. That is 350k ATs to be mined every day from the 121st day and 175k from the 241st day. When it gets harder to mine ATs, benefits of the platform gets better. That drives the revenue of each AT higher. In the long run, the price of AT will despite that there might be some fluctuation in the short term. I predict that the price at least doubles every four months and jump 8 folds in a year. Therefore, minimum 16 times in two years. Take the increase in trading volume to consideration, the cost to buy ATs may skyrocket by more than 100 times. Trade Fee Becomes a Stronger Driving Force The rise in Bitcoin’s price relies on consensus and scarcity. Moreover, the revenue is the another driving force. I simply predicted the revenue growth curve of ABCC exchange, did analysis combining the growth curve with AT distribution model. Growing at a rate of 30% every 60 days, income growth will be higher than the growth of AT circulation in the later stage. Accordingly, the daily revenue will go up, thus, increase the token price via P/E ratio leverage. According to the growth rate of 30% in 2 months, with reference to the circulation of the platform coins, and completely excluding the short-term supply and demand factors, AT’s price will rise to 5.6 dollars within 2 years, 17.7 times of the initial price based on the 3 times price-earnings ratio. Can AT copy BTC success? When Bitcoin inventor Nakamoto launched the Bitcoin protocol to the public, he made it clear that Bitcoin is a virtual currency with limited supply. The total supply is capped at 21 million with no future offering. Surveys have shown that, currently, Bitcoin has more than one million participating nodes. Trading users are estimated to be more than 20 million, locating in more than 200 countries and regions in the world. That is the root of the skyrocketing value of Bitcoin. Per analysis above, it makes sense that AT is following the path of Bitcoin. Trading volume and liquidity are crucial. ABCC created a Trade-to-Mine concept, where trading volume plays a more important role in directly determining the token price, and the increasing AT mining difficulty will also gradually drive the price up. Investors who process AT can expect growth in the token value on a daily basis and earn income distribution. The obvious interest involved drives the vibe, while the value of AT expects to grow. Summary AT has a long way to evolve and mature. However, once it’s proved success, the first AT holders could enjoy high financial returns, which Bitcoin once brought to its holders. Same question: What would you do if you were given a chance to travel back to 2009 to mine Bitcoin? This might be your next chance. ABCC is recruiting its Genesis Platform Token Miners to enjoy the exclusive rights to mine the first few blocks, when AT is issued. Click to register: https://docs.google.com/forms/d/e/1FAIpQLSfQ11kaTG6MCwYmmz0kxUJvmeBi1Q6B_PqYlLsGR0FTi9l0zg/viewform Invite your friends to sign up and earn extra AT. Learn more: https://abcc.com/platform\_currency/
Bitcoin price today is $13,157.97 USD with a 24-hour trading volume of $23,730,036,740 USD. Bitcoin is up 1.33% in the last 24 hours. The current CoinMarketCap ranking is #1, with a market cap of $243,779,373,909 USD. It has a circulating supply of 18,527,131 BTC coins and a max. supply of 21,000,000 BTC coins. You can find the top exchanges to trade Bitcoin listed on our Historical Rates; About Us; Home » Bitcoin » to Canadian Dollar . Today; Graph; Historical; Send Money; Bitcoin to Canadian Dollar - BTC/CAD Invert. B = C$ 1 Bitcoin = 17024 Canadian Dollar updated 03:30:00(PDT) 23/10/2020 Get Rate. Currency Conversion Tables. Bitcoin: CA Dollar: B 1: C$ 17024: B 3: C$ 51072: B 5: C$ 85119: B 10: C$ 170239: B 50: C$ 851193: B 100: C$ 1702385: B 200: C ... New Liberty Standard opens a service to buy and sell bitcoin, with an initial exchange rate of 1,309.03 BTC to one U.S. Dollar, or about eight hundredths of a cent per bitcoin. The rate is derived from the cost of electricity used by a computer to generate, or “mine” the currency. A Bitcoin wallet can be a lot safer than a bank account. Cypriots learnt this the hard way when their savings were confiscated in early 2013. This event was reported as causing a price surge, as savers rethought the relative risks of banks versus Bitcoin.. The next domino to fall was Greece, where strict capital controls were imposed in 2015. February 9th Bitcoin reaches parity with the US dollar (the exchange rate was one BTC to the USD). February 10th After bitcoin is mentioned on Slashdot and Hacker News, Bitcoin.org struggles with surge of new users, many coming from Twitter. February 14th An Austrian user puts an old Porsche on sale on a bitcoin exchange for 3000 BTC.
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