Market cap of bitcoin compared to broad money (M2 money ...
Market cap of bitcoin compared to broad money (M2 money ...
Bitcoin Has a Market Cap Greater Than the Physical Money ...
Country Market Capitalizations FiatMarketCap
Countries With A Smaller GDP Than Total Bitcoin Market Cap
Bitcoin markets are constantly facing various types of ...
Market cap of bitcoin compared to broad money (M2 money supply) of countries: bitcoin is now a larger force in market than fiat money of 67 percent of countries in the world
By November 23, 2016, the market capitalization of bitcoins in circulation was $11,908,463,816 (nearly 12 billion dollars), and the 24-hour transaction volume was equivalent to $224.9 M as per https://coinmarketcap.com/ Measured in terms of (M2) money supply, that meant that the total market cap of bitcoins was at that time actually a more significant force in the market than was the total money supply of Estonia, Costa Rica, or Iceland at that time, as examples. By May 20, 2017, the bitcoin market cap was at $33,971,006,369 (nearly 34 billion dollars), which was a larger force in the market at that time than the total money supply of Kuwait or Peru. In other words: In late May, 2017, bitcoin became bigger than Kuwait's money supply and in terms of market cap, was nearly in the top 50 as compared to countries' money supplies. I predicted at that time that bitcoin would soon be a more powerful market force than the money of Colombia or Israel. As of June 7, 2017, when comparing the market cap of bitcoin ($44,090,135,378 USD, over 44 billion dollars at that time) to broad money (M2 money supply) of countries, it was clear that bitcoin was at that time a larger force in market than fiat money of Cuba, Cyprus, Oman, or Bahrain. bitcoin was then poised to overtake Jordan by this same comparison (Jordan was on June 7, 2017, number 69 in terms of country rankings by stock of (M2) broad money), and bitcoin was anticipated to soon become (by this same comparison) be "in the top 50." A non-state system directly was then outcompeting most state currency systems (even in light of the current capacity issues which existed at that time, prior to Segwit / BIP141 activation). bitcoin (which is not money...) was displacing (in terms of influence) many monetary systems. Today, August 7, 2017, the market cap of bitcoin is $56,618,238,142 -- if bitcoin were a country (or if comparing it to M2 money supply of countries), it would be 65th in the world at this time (per World Factbook - Stock of Broad Money), a larger force in the world market than the M2 money supply of Lebanon, Jordan, and in fact it is now a larger force in the market than the total fiat money of any one of the 67 percent of countries in the world that have a M2 money supply that is less than bitcoin's current market cap -- and soon, bitcoin will be a larger force than the fiat money of Slovakia and Macau. Since late November 2016, bitcoin has grown in market cap by $44,709,774,326 (nearly 45 billion dollars). It will continue to grow and knock fiat systems out of contention.
Market cap of bitcoin compared to broad money (M2 money supply) of countries: bitcoin is now a larger force in market than fiat money of Cuba, Cyprus, Oman, or Bahrain.
By November 23, 2016, the market capitalization of bitcoins in circulation was $11,908,463,816 (nearly 12 billion dollars), and the 24-hour transaction volume was equivalent to $224.9 M as per https://coinmarketcap.com/ Measured in terms of (M2) money supply, that meant that the total market cap of bitcoins was at that time actually a more significant force in the market than was the total money supply of Estonia, Costa Rica, or Iceland at that time, as examples. Just seventeen days ago, the bitcoin market cap was at $33,971,006,369 (nearly 34 billion dollars), which was a larger force in the market at that time than the total money supply of Kuwait or Peru. In other words: Just shy of twenty days ago, bitcoin became bigger than Kuwait's money supply and in terms of market cap, was nearly in the top 50 as compared to countries' money supplies. I predicted at that time that bitcoin would soon be a more powerful market force than the money of Colombia or Israel. As of the date of this post (June 7, 2017), when comparing the market cap of bitcoin ($44,090,135,378 USD, over 44 billion dollars) to broad money (M2 money supply) of countries, it is clear that bitcoin is now a larger force in market than fiat money of Cuba, Cyprus, Oman, or Bahrain. bitcoin is now poised to overtake Jordan by this same comparison (Jordan is currently number 69 in terms of country rankings by stock of (M2) broad money), and bitcoin will soon (by this same comparison) be "in the top 50." A non-state system directly is outcompeting most state currency systems (even in light of the current capacity issue). bitcoin (which is not money...) is displacing (in terms of influence) many monetary systems. edit: In case you are wondering, because I was, Saudi Arabia is number 23 in the ranking system mentioned above. Its monetary system, too, will be knocked out of contention by bitcoin, most likely by sometime in late 2018 or early 2019.
I'm kinda ok with MCO -> CRO Swap; a indepth personal view
EDIT: this post https://www.reddit.com/Crypto_com/comments/i2yhuz/open_letter_to_kris_from_one_of_cdcs_biggest/ from u/CryptoMines expresses my sentiments and concerns better than I could ever put into words myself. I'd say read his/her post instead. Very long post ahead, but TL;DR, I actually see this swap as a positive change, despite fearing for what it may do to my portofolio, and having mixed feelings about its consequences on CDC reputation.Before I start, for the sake of context and bias, here's my personal situation as a CDC user:
I'm just a average Joe, with a 500 MCO Jade card. I bough 50 MCO at 5,22€ in September 2019 and staked for Ruby, then bough 440 MCO at 2.47€ in March 2020 and upgraded to Jade. The total amount of MCO I own is currently 515, and everything above the 500 stake is cashback rewards.
I bought MCO exclusively for the card and bonus Earn interest benefits, and had no plans to unstake my MCO. Now with the swap, definetly won't unstake.
The MCO -> CRO conversion rates increased the fiat value of my MCO in about 1000€.
I own a decent amount of CRO, wich I bought at ~0,031€ in March 2020.
The country where I live is crypto friendly and completely crypto-tax free; I only have to pay income tax if I deposit a certain threshold of fiat in my bank.
Take all these factors into account as possible (if not major) influencers or bias on my opinions; both the emotional and economical ones. Call me a fool or a devil's advocate if you want, but keep your torches and pitchforks down. As we say here on Reddit: "Remember the human".----------------------------------------------------------------------------------------------------------------------------------------------------- Like all of you, I woke up to find this anouncement, wich came right the #[email protected] out of nowere, and gives you little to no options. Good or bad, this announcement arrived as basicly a "comply or die" choice. Emotionally, this came as both terrifying and disgusting; but rationally, I cannot blame CDC for it. Because wether we like it or not, CDC is a centralized company, and the MCO tokens were never a stock or legally binding contract; something wich pretty much every crypto company or ICO warns in their T&C and risk warnings. Not to mention the mostly unregulated status of the cryptocurrency and. I'll call this "dishonest" any day, but I cannot see it as a "scammy" since I can't see how they broke any rules or terms. A scammer would take your money/assets away, but CDC is offering you to swap it for another asset wich you can sell right away if you want. And at current price, it is still worth more or less as much fiat as MCO cost at the 5 $/€ wich was more or less the comunity standard used for calculating the card prices. And by that, I mean that the fiat value of 50/500/5000 MCO (as CRO) is actually not far from the 250/2500/25'000 $/€ that the comunity commonly used as standard when calculating the ROI and (under)valuation of MCO. So CDC is at least trying to give us the option to get (some) our money back, and not at a unfair rate. If you happened to buy MCO at a price higher than this, I can't see how that's CDC's fault, just as I don't see anyone blaming Bitcoin or Altcoins for getting them stuck at the top of the 2017 bubble burst. I read many posts in this reddit calling this a "backstab" and "betrayal" of early investors and for the people who "believed in MCO". Emotionally, I share your sentiment.But after thinking it for a while, I'd say this was actually very rewarding for early investors and long term MCO supporters. As CDC clearly sates in the swap rules; nobody is going to lose their card tier or MCO stake benefits (at least not yet), and your stake DOES NOT unstake automatically after 180 days. Actually, so far they never did unstake automatically, you had to manually unstake yourself. With this in mind, everyone who already got their cards, or at least staked MCO to reserve one, basicly got them 3-5 times cheaper than future users; and IMHO, now the $/€ price of cards feels more fair and sustainable compared to their benefits.So in a sense, everyone who supported and believed on the MCO for its utility (i.e. the card and app benefits) has been greatly rewarded with perks that they get to keep, but are now out of reach for a lot of people.Likewise, the people who believed and invested in CRO (for whatever reason), have also been rewarded, as their CRO tokens now have more utility. So either the price of CRO crashes down to around 0.05 $/€, or the people who bought MCO/CRO early or cheap are now massively benefited. But then again, so is everyone who bought or mined Bitcoin in its early days, or invested in Bitcoin at crucial points of its history... how is that unfair? Some people bought Ethereum at 1'400 $ on a mix of hopes/promises that it would continue to rise; it didn't. And even today with DeFi and ETH 2.0 ever closer, it is still far from that price. And I know what some of you are thinking: "The cards aren't avaiable in my country yet, that's why I didn't buy/stake."Well, they weren't avaiable in my country either when I staked 50 MCO. Heck, the cards weren't avaiable in anyones country when MCO started, but many people still bought it and staked it. That's exacly what "early adopter", "long supporter" and "believing in MCO" means. On the other hand, the people who invested on MCO as a speculative asset and decided to HODL and hoard MCO, hoping for its price to moon and then sell MCO at big profit, had their dreams mercilessly crushed by this swap... and good lord, I feel their pain.But this is also where I'll commit the sin of being judgemental, because IMHO, speculating on MCO never made any sense to me; MCO was a utility token, not a value token, so it should not (and could not) ever be worth more than the value of its utility. That's basicly how stablecoins and PAXG are able to stay stable; because nobody will pay more/less than the value of the asset/service they represent. Tough now that I'm looking at the new card stake tiers in CRO, I have to give credit to the MCO hodlers I just now criticised; maybe you were right all along. Unless the price of CRO crashes or corrects, I wich case, I un-rest my case. One thing I'll agree with everyone tough, is that I fell that CDC just suckerpunched it's comunity. Because even if we have no vote on its decisions (wich again, we aren't necessarily entitled to, since they are a privante and centralized business) they should/could have warned that this was in their plans well in advance; if anything to allow those who wouldn't like it to exit this train calmly. Also the CRO stake duration reset. The mandatory reset of your CRO stake for taking advantage of the early swap bonus feels like another gut-punch. ----------------------------------------------------------------------------------------------------------------------------------------------------- Now that we got emotional feelings out of the way, here's my sentiment about how this will affect the overall CDC ecossystem. One common criticism of the sustainability of MCO was that its supply cap could never allow a large number of cards to be issued, and how could CDC keep paying the cashbacks and rebates. On the oposite corner, one of the major criticisms of the sustainability of CRO, was it's ridiculously huge supply cap and inflation caused by the gradual un-freezing and release of more CRO into the system. But now that MCO and CRO became one, it might just have made both issues more sustainable. Now the huge supply cap of CRO makes more sense, as it allows a much larger number of future users to stake for cards (at higher costs, but still). And because most card cashback is small parcels, this large supply also ensures that CDC can keep paying said cashbacks for a long time; especially since it can be semi-renewable trough the trading fees we pay in CRO. Before this, the MCO you got as cashback had no use, other than selling it for fiat or speculate on its price. But CRO can be used, at the very least, to receive a discount on trading fees. And everytime you pay trading fees in CRO or spend CRO on a Syndicate event, some of that CRO goes back to CDC, wich they can use to keep paying the cahsback/rebates. And keep in mind, the technicalities of CRO can be changed, as well as the perks and utilities it can be used for. So even if this current model doesn't fix everything (wich it probably doesn't) it can still be changed to patch problems or expand its use. Another obvious potentially positive outcome of this, is that now CDC only has to focus on 1 token, so it makes it easier to manage and drive its value. People complained that CDC was neglecting MCO over promoting CRO, but now they can focus on both services (cards/exchange) at the same time. Sure, this might not bring much advantage to the common customer, but its probably a major resource saver and optimizer at corporate levels; wich in the long term ultimately benefits its customers. Much like Ethereum is undergoing major changes to ensure its scalability, the crypto companies themselves also have to change to acommodate the growing number of users, especially as the cryptomarket and DeFi are growing and becoming more competitive. Business strategies that were once successfull became obsolete, and exchanges that once held near-monopolies had to adjust to rising competitors. There is no reason why CDC shouldn't keep up with this, or at least try to. Point is, the financial markets, crypto or otherwise, are not a status quo haven. And when something is wrong, something has to be changed, even if it costs. The very rise of cryptocurrencies and blockchain, wich is why we are here in the first place, is a perfect example of this, as it experiments and provides alternatives to legacy/traditional products and technologies. Was this the best solution to its current problems? Is this what will protect us as customers from a potentially unsustainable business model? I have no idea. This change ripped me too from my previous more or less relaxed status quo (the safety of the value of the CRO I bough for cheap), along with CRO late investors wich now probably fear for the devaluation of their CRO. To say nothing of the blow this represents for my trust (and I believe everyone elses trust) on CDC and its public relations. It's not what CDC did, it's how they did it. ------------------------------------------------------------------------------------------------------------------------------------------------ Wether you actually bothered to read all I wrote or just skip everything (can't blame you), I'm eager to hear your opinions and whatever criticisms on my opinions you may have. If you just want to vent at me, you are welcome too; now you can raise your pitchforks and torches.
The next XVG? Microcap 100x potential actually supported by fundamentals!
What’s up team? I have a hot one for you. XVG returned 12 million percent in 2017 and this one reminds me a lot of it. Here’s why: Mimblewimble is like Blu-Ray compared to CD-ROM in terms of its ability to compress data on a blockchain. The current BTC chain is 277gb and its capacity is limited because every time you spend a coin, each node needs to validate its history back to when it was mined (this is how double spending is prevented). Mimblewimble is different - all transactions in a block are aggregated and netted out in one giant CoinJoin, and only the current spending needs to be verified. This means that dramatically more transactions can fit into a smaller space, increasing throughput and lowering fees while still retaining the full proof of work game theory of Bitcoin. These blockchains are small enough to run a full node on a cheap smartphone, which enhances the decentralization and censorship resistance of the network. The biggest benefit, though, is that all transactions are private - the blockchain doesn’t reveal amounts or addresses except to the actual wallet owner. Unlike earlier decoy-based approaches that bloat the chain and can still be data mined (XMR), Mimblewimble leaves no trace in the blockchain, instead storing only the present state of coin ownership. The first two Mimblewimble coins, Grin and Beam, launched to great fanfare in 2019, quickly reaching over $100m in market cap (since settled down to $22m and $26m respectively). They are good projects but grin has infinite supply and huge never-decreasing emission, and Beam is a corporate moneygrab whose founding investors are counting on you buying for their ROI. ZEC is valued at $568m today, despite the facts that only 1% of transactions are actually shielded, it has a trusted setup, and generating a confidential transaction takes ~60 seconds on a powerful PC. XMR is a great project but it’s valued at $1.2b (so no 100x) and it uses CryptoNote, which is 2014 tech that relies on a decoy-based approach that could be vulnerable to more powerful computers in the future. Mimblewimble is just a better way to approach privacy because there is simply no data recorded in the blockchain for companies to surveil. Privacy is not just for darknet markets, porn, money launderers and terrorists. In many countries it’s dangerous to be wealthy, and there are all kinds of problems with having your spending data be out there publicly and permanently for all to see. Namely, companies like Amazon are patenting approaches to identify people with their crypto addresses, “for law enforcement” but also so that, just like credit cards, your spending data can be used to target ads. (A) Coinbase is selling user data to the DEA, IRS, FBI, Secret Service, and who knows who else? (B) What about insurance companies raising your premiums or canceling your policy because they see you buying (legal) cannabis? If your business operates using transparent cryptocurrency, competitors can data mine your customer and supply chain data, and employees can see how much everyone else gets paid. I could go on, but the idea of “I have nothing to hide, so what do I care about privacy?” will increasingly ring hollow as people realize that this money printing will have to be paid by massive tax increases AND that those taxes will be directly debited from their “Central Bank Digital Currency” wallets. 100% privacy for all transactions also eliminates one HUGE problem that people aren’t aware of yet, but they will be: fungibility. Fungibility means that each coin is indistinguishable from any other, just like paper cash. Why is this important? Because of the ever-expanding reach of AML/KYC/KYT (Anti-Money Laundering / Know Your Customer / Know Your Transaction) as regulators cramp down on crypto and banks take over, increasingly coins become “tainted” in various ways. For example, if you withdraw coins to a mixing service like Wasabi or Samourai, you may find your account blocked. (C) The next obvious step is that if you receive coins that these chainalysis services don’t like for whatever reason, you will be completely innocent yet forced to prove that you didn’t know that the coins you bought were up to no good in a past life. 3 days ago, $100k of USDC was frozen. (D) Even smaller coins like LTC now have this problem, because “Chinese Drug Kingpins” used them. (E) I believe that censorable money that can be blocked/frozen isn’t really “your money”. Epic Cash is a 100% volunteer community project (like XVG and XMR) that had a fair launch in September last year with no ICO and no premine. There are very few projects like this, and it’s a key ingredient in Verge’s success (still at $110m market cap today despite being down 97% since the bubble peak) and why it’s still around. It has a small but super passionate community of “Freemen” who are united by a belief in the sound money economics of Bitcoin Standard emission (21m supply limit and ever-decreasing inflation) and the importance of privacy. I am super bullish on this coin for the following reasons:
Only $400k market cap
Supply started at zero, so there are no VC’s and team to dump on you into the pumps - all coins are mined into existence, just like Bitcoin.
It just had its first halving, reducing emission from 16 to 8 per block. Between now and 2028 there are FOUR (!) more halvings, from 4 to 2 to 1 and then finally 0.15 (I guess that would be an 85%-ing :p) and at this point the supply is the same as BTC and stays in sync forever until the last coin is mined in 2140. This simple supply curve is already accepted by the market as a winner, so why mess with success? (I)
Meets Andreas Antonopolous’ 5 pillars of open blockchains test: Public, Open, Borderless, Neutral, and Censorship Resistant. (How many coins can say this?)
Unlike Bitcoin, Epic created a multi-algorithm approach that enables people to mine on ordinary computers - 60% for CPU on RandomX, 38% for GPU on ProgPow, and 2% for ASIC’s on Cuckoo31+. The algorithms don’t compete with one another. This is essential for leveling the playing field and preventing massive farms from dominating. These percentages can change over time and new algorithms can be easily dropped in. You can mine today using an old laptop and in 5 years you will still be able to. Incidentally, there is nothing standing in the way of adding mobile phone-based mining, which ETN showed there’s a huge demand for.
Based off the excellent Grin codebase, which means they continue to pull in ongoing core code enhancements and focus on ease of use and market penetration instead. (Smart!)
Litecoin’s Charlie Lee is out there daily talking about their move to Mimblewimble, which provides free publicity. What people don’t realize is that you can’t just bolt on Mimblewimble to a legacy blockchain, that’s like putting a Ferrari engine into a school bus - it’s still a school bus, not a race car! LTC is doing it as an optional soft fork via “extension blocks” which will not be supported by all wallets and exchanges. Also, anyone using “optional” privacy features is declaring themselves to be suspicious, which kind of defeats the point for people who care about privacy.
The community is friendly and welcoming to new people coming in, with lots of helpful (independently created) tutorials and guides. (F)
It’s already a global phenomenon, with the whitepaper in 20+ languages (G) and (not bot-infested) active local-language communities on not only Telegram but also Wechat, LINE, QQ and other messenger platforms.
It’s only on two random little exchanges currently, Citex and Vitex. Vitex is actually a pretty good DEX with no KYC and a great mobile wallet.
They are very creative - since centralized exchanges want huge money to list, they created a non-inflationary ERC20 tracker token that’s exchangeable 1:1 for coins so that Uniswap trading is possible (H)
Because it doesn’t have a huge marketing budget in a sea of VC-funded shitcoins, it is as-yet undiscovered, which is why it’s so cheap. There are only 4 Mimblewimble-based currencies on the market: MWC at $162m, BEAM at $26m, GRIN at $22m, and EPIC at $0.4m. This is not financial advice and as always, do your own research, but I’ve been buying this gem for months and will continue to. This one ticks all the boxes for me, the only real problem is that it’s hard to buy much without causing a huge green candle. Alt season is coming, and coins like this are how your neighbor Chad got his Lambo back in 2017. For 2021, McLaren is a better choice and be sure to pay cash so that it doesn’t get repossessed like Chad!
Here is how to play the altcoin game - for newbies & champs
I have been here for many previous altcoin seasons (2013,2017 etc) and wanted to share knowedle. It's a LOOONG article. The evaluation of altcoins (i.e not Bitcoin) is one of the most difficult and profitable exercises. Here I will outline my methodology and thinking but we have to take some things as a given. The first is that the whole market is going up or down with forces that we can't predict or control. Bitcoin is correlated with economic environments, money supply increases, safe havens such as Gold, hype and country regulations. This is an impossible mix to analyze and almost everyone fails at it. That's why you see people valuing Bitcoin from $100 to $500k frequently. Although I am bullish on the prospects of Bitcoin and decentralization and smart contract platforms, this is not the game I will be describing. I am talking about a game where you try to maximize your BTC holdings by investing in altcoins. We win this game even if we are at a loss in fiat currency value. To put it another way:
If you are not bullish in general on cryptocurrencies you have no place in investing or trading cryptocurrencies since it's always a losing proposition to trade in bubbles, a scientifically proven fact. If on the other hand you are then your goal is to grow your portfolio more than you would if holding BTC/ETH for example.
Bitcoin is the big boy
How the market works is not easily identifiable if you haven't graduated from the 2017 crypto university. When there is a bull market everything seems amazingly profitable and things keep going up outgrowing Bitcoin by orders of magnitude and you are a genius. The problem with this is that it only works while Bitcoin is going up a little bit or trades sideways. When it decides to move big then altcoins lose value both on the way up and on the way down. The second part is obvious and proven since all altcoins from 2017 are at a fraction of their BTC value (usually in the range of 80% or more down). Also, when BTC is making a big move upwards everyone exits altcoins to ride the wave. It is possible that the altcoin market behaves as an inversed leveraged ETF with leakage where in a certain period while Bitcoin starts at 10k and ends at 10k for example, altcoins have lost a lot of value because of the above things happening.
We are doing it anyway champ!
OK so we understand the risks and just wanna gambol with our money right? I get it. Why do that? Because finding the ideal scenario and period can be extremely profitable. In 2017 several altcoins went up 40x more than BTC. But again, if you don't chose wisely many of them have gone back to zero (the author has first hand experience in this!), they have been delisted and nobody remembers them. The actual mentality to have is very important and resembles poker and other speculative games: A certain altcoin can go up in value indefinitely but can only lose it's starting investment. Think about it. You either lose 1 metric or gain many many more. Now that sounds amazing but firstly as we said we have the goal to outperform our benchmark (BTC) and secondly that going up in value a lot means that the probability is quite low. There is this notion of Expected Value (EV) that poker players apply in these kind of situations and it goes like that. If you think that a certain coin has a probability let's say 10% to go up 10X and 90% probability it goes to zero it's an even bet. If you think that probability is 11% then it's a good bet, a profitable bet and you should take it. You get the point right? It's not that it can only go 10X or 0X, there is a whole range of probability outcomes that are too mathematical to explain here and it doesn't help so much because nobody can do such analysis with altcoins. See below on how we can approximate it.
How to evaluate altcoins
A range of different things to take into account outlined below will form our decision making. Not a single one of them should dictate 100% of our strategy.
It's all about market cap. Repeat after me. The price of a coin doesn't mean anything. Say it 10 times until you believe it. I can't remember how many times I had conversations with people that were comparing coins using their coin price instead of their market cap. To make this easy to get.
If I decide because the sky is blue to make my coin supply 100 Trillion FoolCoins with a price of $0.001 and there is another WiseCoin with a supply of 100 Million and price of $1 then FoolCoins are more expensive. - Alex Fin's Cap Law
This is done usually in the stock world and it means that each company has some fundamental value that includes it's assets, customers, growth prospects, sector prospects and leadership competence but mostly centered in financial measures such as P/E ratios etc. Valuation is a proper economic discipline by itself taught in universities. OK, now throw everything out of the window!. This kind of analysis is impossible in vague concepts and innovations that are currently cryptocurrencies. Ethereum was frequently priced at the fictional price of gas when all financial systems on earth run on the platform after decades (a bit of exaggeration here). No project is currently profitable enough to justify a valuation multiple that is usually equal to P/E in the thousands or more. As such we need to take other things into account. What I do is included in the list below:
Check Github. You need to make sure there is active development for the platform and it's a very bad sign if the project is either keeping the code closed source or even worse there is simply no development. No projects are "complete".
Check Website. If the website is written in bad English the Chinese google translate type it means that they are not serious enough to produce an unbreakable decentralized project. If you can't write English you can't change the world, period. That's a deal breaker.
Check Team's Linkedin. Numerous projects have either fake Linkedin accounts or the team is comprised mainly by unexperienced employees that are even shown to be working in other companies currently.
Check backers. Projects that have Binance, Coinbase or Silicon Valley VC funds backing them are way more legit but way more overpriced too!
One of my favorite ways to value altcoins that is based on the same principle in the stock market is to look at peers and decide what is the maximum cap it can grow to. As an example you take a second layer Ethereum solution that has an ICO and you want to decide if you will enter or not. You can take a look at other coins that are in the same business and compare their market caps. Thinking that your coin will outperform by a lot the top coins currently is overly optimistic so I usually take a lower valuation as a target price. If the initial offering is directly implying a valuation that is more than that then there is no room to grow according to my analysis and I skip it. Many times this has proven me wrong because it's a game theory problem where if many people think irrationally in a market it becomes a self-fulfilling prophecy. But since there is opportunity cost involved, in the long run, getting in initial offerings that have a lot of room to grow will pay off as a strategy.
In 2017 the sexiest sector was platforms and then coins including privacy ones. Platforms are obviously still a highly rated sector because everything is being built on them, but privacy is not as hot as it used to be. In 2018 DEXes were all they hype but still people are massively using centralized exchanges. In 2020 Defi is the hottest sector and it includes platforms, oracles and Defi projects. What I am saying is that a project gets extra points if it's a Defi one in 2020 and minus points if it's a payment system that will conquer the world as it was in 2017 because that's old news. This is closely related to the next section.
Needless to say that the crypto market is a worse FOMO type of inexperienced trigger happy yolo investors , much worse than the Robinhood crowd that drove a bankrupt company's stock 1200% after they declared bankruptcy. The result is that there are numerous projects that are basically either vaporware or just so overhyped that their valuation has no connection to reality. Should we avoid those kind of projects? No and I will explain why. There are many very good technically projects that had zero hype potential due to incompetent marketing departments that made them tank. An example (without shilling because I sold out a while back) is Quantum Resistant Ledger. This project has amazing quantum resistant blockchain, the only one running now, has a platform that people can build tokens and messaging systems and other magnificent stuff. Just check how they fared up to now and you will get the point. A project *needs* to have a hype factor because you cannot judge it as normal stocks that you can do value investing like Warren Buffet does where a company will inevitable post sales and profitability numbers and investors will get dividends. Actually the last sentence is the most important: No dividends. Even projects that give you tokens or coins as dividends are not real dividends because if the coin tanks the value of the dividend tanks. This is NOT the case with company stocks where you get dollars even if the company stock tanks. All that being said, I would advice against betting on projects that have a lot of hype but little substance (but that should be obvious!).
How to construct your portfolio
My strategy and philosophy in investing is that risk should be proportional to investment capital. That means that if you are investing 100K in the crypto market your portfolio should be very different than someone investing 1K because 10% annual gains are nothing in the latter while they are very significant in the former. Starting from this principle each individual needs to construct a portfolio according to how much risk he wants to take. I will emphasize two important concepts that play well with what I said. In the first instance of a big portfolio you should concentrate on this mantra: "Diversification is the only free meal in finance". In the case of a small portfolio then this mantra is more important: "Concentrate to create wealth, diversify to maintain wealth". Usually in a big portfolio you would want to hold some big coins such as BTC and ETH to weather the ups and downs explained in previous paragraphs while generating profits and keep progressively smaller parts of your portfolio for riskier investments. Maybe 50% of this portfolio could be big caps and 10% very risky initial offerings. Adapting risk progressively to smaller portfolios makes sense but I think it would be irrational to keep more than 30% of a portfolio no matter what tied to one coin due to the very high risk of bankruptcy.
The altseason is supposedly coming every 3 months. Truth is that nobody can predict it but altcoins can be profitable no matter what. Forget about maximalists who are stuck in their dogmas. Altcoins deliver different value propositions and it makes sense because we are very far from a situation where some project offers everything like Amazon and we wouldn't even want that in the first place since we are talking about decentralization and not a winner takes all and becomes a monster kind of scenario! Some last minute advice:
Stay out of paid telegram/discord pump groups. They are deadly for your wallet.
Avoid jumping on overhyped coins that have pumped massively during the last days without any very important news.
Don't keep coins in obscure exchanges for too long or you will get burned with certainty.
Stop thinking that your coin will 1000x and overtake Bitcoin!
P.S If you find value in reading this and want more weekly consider subscribing to my newsletterhere
Hey all, I've been researching coins since 2017 and have gone through 100s of them in the last 3 years. I got introduced to blockchain via Bitcoin of course, analyzed Ethereum thereafter and from that moment I have a keen interest in smart contact platforms. I’m passionate about Ethereum but I find Zilliqa to have a better risk-reward ratio. Especially because Zilliqa has found an elegant balance between being secure, decentralized and scalable in my opinion.
Below I post my analysis of why from all the coins I went through I’m most bullish on Zilliqa (yes I went through Tezos, EOS, NEO, VeChain, Harmony, Algorand, Cardano etc.). Note that this is not investment advice and although it's a thorough analysis there is obviously some bias involved. Looking forward to what you all think!
Fun fact: the name Zilliqa is a play on ‘silica’ silicon dioxide which means “Silicon for the high-throughput consensus computer.”
This post is divided into (i) Technology, (ii) Business & Partnerships, and (iii) Marketing & Community. I’ve tried to make the technology part readable for a broad audience. If you’ve ever tried understanding the inner workings of Bitcoin and Ethereum you should be able to grasp most parts. Otherwise, just skim through and once you are zoning out head to the next part.
Technology and some more:
The technology is one of the main reasons why I’m so bullish on Zilliqa. First thing you see on their website is: “Zilliqa is a high-performance, high-security blockchain platform for enterprises and next-generation applications.” These are some bold statements.
Before we deep dive into the technology let’s take a step back in time first as they have quite the history. The initial research paper from which Zilliqa originated dates back to August 2016: Elastico: A Secure Sharding Protocol For Open Blockchains where Loi Luu (Kyber Network) is one of the co-authors. Other ideas that led to the development of what Zilliqa has become today are: Bitcoin-NG, collective signing CoSi, ByzCoin and Omniledger.
The technical white paper was made public in August 2017 and since then they have achieved everything stated in the white paper and also created their own open source intermediate level smart contract language called Scilla (functional programming language similar to OCaml) too.
Mainnet is live since the end of January 2019 with daily transaction rates growing continuously. About a week ago mainnet reached 5 million transactions, 500.000+ addresses in total along with 2400 nodes keeping the network decentralized and secure. Circulating supply is nearing 11 billion and currently only mining rewards are left. The maximum supply is 21 billion with annual inflation being 7.13% currently and will only decrease with time.
Zilliqa realized early on that the usage of public cryptocurrencies and smart contracts were increasing but decentralized, secure, and scalable alternatives were lacking in the crypto space. They proposed to apply sharding onto a public smart contract blockchain where the transaction rate increases almost linear with the increase in the amount of nodes. More nodes = higher transaction throughput and increased decentralization. Sharding comes in many forms and Zilliqa uses network-, transaction- and computational sharding. Network sharding opens up the possibility of using transaction- and computational sharding on top. Zilliqa does not use state sharding for now. We’ll come back to this later.
Before we continue dissecting how Zilliqa achieves such from a technological standpoint it’s good to keep in mind that a blockchain being decentralised and secure and scalable is still one of the main hurdles in allowing widespread usage of decentralised networks. In my opinion this needs to be solved first before blockchains can get to the point where they can create and add large scale value. So I invite you to read the next section to grasp the underlying fundamentals. Because after all these premises need to be true otherwise there isn’t a fundamental case to be bullish on Zilliqa, right?
Down the rabbit hole
How have they achieved this? Let’s define the basics first: key players on Zilliqa are the users and the miners. A user is anybody who uses the blockchain to transfer funds or run smart contracts. Miners are the (shard) nodes in the network who run the consensus protocol and get rewarded for their service in Zillings (ZIL). The mining network is divided into several smaller networks called shards, which is also referred to as ‘network sharding’. Miners subsequently are randomly assigned to a shard by another set of miners called DS (Directory Service) nodes. The regular shards process transactions and the outputs of these shards are eventually combined by the DS shard as they reach consensus on the final state. More on how these DS shards reach consensus (via pBFT) will be explained later on.
The Zilliqa network produces two types of blocks: DS blocks and Tx blocks. One DS Block consists of 100 Tx Blocks. And as previously mentioned there are two types of nodes concerned with reaching consensus: shard nodes and DS nodes. Becoming a shard node or DS node is being defined by the result of a PoW cycle (Ethash) at the beginning of the DS Block. All candidate mining nodes compete with each other and run the PoW (Proof-of-Work) cycle for 60 seconds and the submissions achieving the highest difficulty will be allowed on the network. And to put it in perspective: the average difficulty for one DS node is ~ 2 Th/s equaling 2.000.000 Mh/s or 55 thousand+ GeForce GTX 1070 / 8 GB GPUs at 35.4 Mh/s. Each DS Block 10 new DS nodes are allowed. And a shard node needs to provide around 8.53 GH/s currently (around 240 GTX 1070s). Dual mining ETH/ETC and ZIL is possible and can be done via mining software such as Phoenix and Claymore. There are pools and if you have large amounts of hashing power (Ethash) available you could mine solo.
The PoW cycle of 60 seconds is a peak performance and acts as an entry ticket to the network. The entry ticket is called a sybil resistance mechanism and makes it incredibly hard for adversaries to spawn lots of identities and manipulate the network with these identities. And after every 100 Tx Blocks which corresponds to roughly 1,5 hour this PoW process repeats. In between these 1,5 hour, no PoW needs to be done meaning Zilliqa’s energy consumption to keep the network secure is low. For more detailed information on how mining works click here. Okay, hats off to you. You have made it this far. Before we go any deeper down the rabbit hole we first must understand why Zilliqa goes through all of the above technicalities and understand a bit more what a blockchain on a more fundamental level is. Because the core of Zilliqa’s consensus protocol relies on the usage of pBFT (practical Byzantine Fault Tolerance) we need to know more about state machines and their function. Navigate to Viewblock, a Zilliqa block explorer, and just come back to this article. We will use this site to navigate through a few concepts.
We have established that Zilliqa is a public and distributed blockchain. Meaning that everyone with an internet connection can send ZILs, trigger smart contracts, etc. and there is no central authority who fully controls the network. Zilliqa and other public and distributed blockchains (like Bitcoin and Ethereum) can also be defined as state machines.
Taking the liberty of paraphrasing examples and definitions given by Samuel Brooks’ medium article, he describes the definition of a blockchain (like Zilliqa) as: “A peer-to-peer, append-only datastore that uses consensus to synchronize cryptographically-secure data”.
Next, he states that: "blockchains are fundamentally systems for managing valid state transitions”. For some more context, I recommend reading the whole medium article to get a better grasp of the definitions and understanding of state machines. Nevertheless, let’s try to simplify and compile it into a single paragraph. Take traffic lights as an example: all its states (red, amber, and green) are predefined, all possible outcomes are known and it doesn’t matter if you encounter the traffic light today or tomorrow. It will still behave the same. Managing the states of a traffic light can be done by triggering a sensor on the road or pushing a button resulting in one traffic lights’ state going from green to red (via amber) and another light from red to green.
With public blockchains like Zilliqa, this isn’t so straightforward and simple. It started with block #1 almost 1,5 years ago and every 45 seconds or so a new block linked to the previous block is being added. Resulting in a chain of blocks with transactions in it that everyone can verify from block #1 to the current #647.000+ block. The state is ever changing and the states it can find itself in are infinite. And while the traffic light might work together in tandem with various other traffic lights, it’s rather insignificant comparing it to a public blockchain. Because Zilliqa consists of 2400 nodes who need to work together to achieve consensus on what the latest valid state is while some of these nodes may have latency or broadcast issues, drop offline or are deliberately trying to attack the network, etc.
Now go back to the Viewblock page take a look at the amount of transaction, addresses, block and DS height and then hit refresh. Obviously as expected you see new incremented values on one or all parameters. And how did the Zilliqa blockchain manage to transition from a previous valid state to the latest valid state? By using pBFT to reach consensus on the latest valid state.
After having obtained the entry ticket, miners execute pBFT to reach consensus on the ever-changing state of the blockchain. pBFT requires a series of network communication between nodes, and as such there is no GPU involved (but CPU). Resulting in the total energy consumed to keep the blockchain secure, decentralized and scalable being low.
pBFT stands for practical Byzantine Fault Tolerance and is an optimization on the Byzantine Fault Tolerant algorithm. To quote Blockonomi: “In the context of distributed systems, Byzantine Fault Tolerance is the ability of a distributed computer network to function as desired and correctly reach a sufficient consensus despite malicious components (nodes) of the system failing or propagating incorrect information to other peers.” Zilliqa is such a distributed computer network and depends on the honesty of the nodes (shard and DS) to reach consensus and to continuously update the state with the latest block. If pBFT is a new term for you I can highly recommend the Blockonomi article.
The idea of pBFT was introduced in 1999 - one of the authors even won a Turing award for it - and it is well researched and applied in various blockchains and distributed systems nowadays. If you want more advanced information than the Blockonomi link provides click here. And if you’re in between Blockonomi and the University of Singapore read the Zilliqa Design Story Part 2 dating from October 2017. Quoting from the Zilliqa tech whitepaper: “pBFT relies upon a correct leader (which is randomly selected) to begin each phase and proceed when the sufficient majority exists. In case the leader is byzantine it can stall the entire consensus protocol. To address this challenge, pBFT offers a view change protocol to replace the byzantine leader with another one.”
pBFT can tolerate ⅓ of the nodes being dishonest (offline counts as Byzantine = dishonest) and the consensus protocol will function without stalling or hiccups. Once there are more than ⅓ of dishonest nodes but no more than ⅔ the network will be stalled and a view change will be triggered to elect a new DS leader. Only when more than ⅔ of the nodes are dishonest (66%) double-spend attacks become possible.
If the network stalls no transactions can be processed and one has to wait until a new honest leader has been elected. When the mainnet was just launched and in its early phases, view changes happened regularly. As of today the last stalling of the network - and view change being triggered - was at the end of October 2019.
Another benefit of using pBFT for consensus besides low energy is the immediate finality it provides. Once your transaction is included in a block and the block is added to the chain it’s done. Lastly, take a look at this article where three types of finality are being defined: probabilistic, absolute and economic finality. Zilliqa falls under the absolute finality (just like Tendermint for example). Although lengthy already we skipped through some of the inner workings from Zilliqa’s consensus: read the Zilliqa Design Story Part 3 and you will be close to having a complete picture on it. Enough about PoW, sybil resistance mechanism, pBFT, etc. Another thing we haven’t looked at yet is the amount of decentralization.
Currently, there are four shards, each one of them consisting of 600 nodes. 1 shard with 600 so-called DS nodes (Directory Service - they need to achieve a higher difficulty than shard nodes) and 1800 shard nodes of which 250 are shard guards (centralized nodes controlled by the team). The amount of shard guards has been steadily declining from 1200 in January 2019 to 250 as of May 2020. On the Viewblock statistics, you can see that many of the nodes are being located in the US but those are only the (CPU parts of the) shard nodes who perform pBFT. There is no data from where the PoW sources are coming. And when the Zilliqa blockchain starts reaching its transaction capacity limit, a network upgrade needs to be executed to lift the current cap of maximum 2400 nodes to allow more nodes and formation of more shards which will allow to network to keep on scaling according to demand. Besides shard nodes there are also seed nodes. The main role of seed nodes is to serve as direct access points (for end-users and clients) to the core Zilliqa network that validates transactions. Seed nodes consolidate transaction requests and forward these to the lookup nodes (another type of nodes) for distribution to the shards in the network. Seed nodes also maintain the entire transaction history and the global state of the blockchain which is needed to provide services such as block explorers. Seed nodes in the Zilliqa network are comparable to Infura on Ethereum.
The seed nodes were first only operated by Zilliqa themselves, exchanges and Viewblock. Operators of seed nodes like exchanges had no incentive to open them for the greater public. They were centralised at first. Decentralisation at the seed nodes level has been steadily rolled out since March 2020 ( Zilliqa Improvement Proposal 3 ). Currently the amount of seed nodes is being increased, they are public-facing and at the same time PoS is applied to incentivize seed node operators and make it possible for ZIL holders to stake and earn passive yields. Important distinction: seed nodes are not involved with consensus! That is still PoW as entry ticket and pBFT for the actual consensus.
5% of the block rewards are being assigned to seed nodes (from the beginning in 2019) and those are being used to pay out ZIL stakers. The 5% block rewards with an annual yield of 10.03% translate to roughly 610 MM ZILs in total that can be staked. Exchanges use the custodial variant of staking and wallets like Moonlet will use the non-custodial version (starting in Q3 2020). Staking is being done by sending ZILs to a smart contract created by Zilliqa and audited by Quantstamp.
With a high amount of DS; shard nodes and seed nodes becoming more decentralized too, Zilliqa qualifies for the label of decentralized in my opinion.
Generalized: programming languages can be divided into being ‘object-oriented’ or ‘functional’. Here is an ELI5 given by software development academy: * “all programs have two basic components, data – what the program knows – and behavior – what the program can do with that data. So object-oriented programming states that combining data and related behaviors in one place, is called “object”, which makes it easier to understand how a particular program works. On the other hand, functional programming argues that data and behavior are different things and should be separated to ensure their clarity.” *
Scilla is on the functional side and shares similarities with OCaml: OCaml is a general-purpose programming language with an emphasis on expressiveness and safety. It has an advanced type system that helps catch your mistakes without getting in your way. It's used in environments where a single mistake can cost millions and speed matters, is supported by an active community, and has a rich set of libraries and development tools. For all its power, OCaml is also pretty simple, which is one reason it's often used as a teaching language.
Scilla is blockchain agnostic, can be implemented onto other blockchains as well, is recognized by academics and won a so-called Distinguished Artifact Award award at the end of last year.
One of the reasons why the Zilliqa team decided to create their own programming language focused on preventing smart contract vulnerabilities is that adding logic on a blockchain, programming, means that you cannot afford to make mistakes. Otherwise, it could cost you. It’s all great and fun blockchains being immutable but updating your code because you found a bug isn’t the same as with a regular web application for example. And with smart contracts, it inherently involves cryptocurrencies in some form thus value.
Another difference with programming languages on a blockchain is gas. Every transaction you do on a smart contract platform like Zilliqa or Ethereum costs gas. With gas you basically pay for computational costs. Sending a ZIL from address A to address B costs 0.001 ZIL currently. Smart contracts are more complex, often involve various functions and require more gas (if gas is a new concept click here ).
So with Scilla, similar to Solidity, you need to make sure that “every function in your smart contract will run as expected without hitting gas limits. An improper resource analysis may lead to situations where funds may get stuck simply because a part of the smart contract code cannot be executed due to gas limits. Such constraints are not present in traditional software systems”.Scilla design story part 1
Some examples of smart contract issues you’d want to avoid are: leaking funds, ‘unexpected changes to critical state variables’ (example: someone other than you setting his or her address as the owner of the smart contract after creation) or simply killing a contract.
Scilla also allows for formal verification. Wikipedia to the rescue: In the context of hardware and software systems, formal verification is the act of proving or disproving the correctness of intended algorithms underlying a system with respect to a certain formal specification or property, using formal methods of mathematics.
Formal verification can be helpful in proving the correctness of systems such as: cryptographic protocols, combinational circuits, digital circuits with internal memory, and software expressed as source code.
“Scilla is being developed hand-in-hand with formalization of its semantics and its embedding into the Coq proof assistant — a state-of-the art tool for mechanized proofs about properties of programs.”
Simply put, with Scilla and accompanying tooling developers can be mathematically sure and proof that the smart contract they’ve written does what he or she intends it to do.
Smart contract on a sharded environment and state sharding
There is one more topic I’d like to touch on: smart contract execution in a sharded environment (and what is the effect of state sharding). This is a complex topic. I’m not able to explain it any easier than what is posted here. But I will try to compress the post into something easy to digest.
Earlier on we have established that Zilliqa can process transactions in parallel due to network sharding. This is where the linear scalability comes from. We can define simple transactions: a transaction from address A to B (Category 1), a transaction where a user interacts with one smart contract (Category 2) and the most complex ones where triggering a transaction results in multiple smart contracts being involved (Category 3). The shards are able to process transactions on their own without interference of the other shards. With Category 1 transactions that is doable, with Category 2 transactions sometimes if that address is in the same shard as the smart contract but with Category 3 you definitely need communication between the shards. Solving that requires to make a set of communication rules the protocol needs to follow in order to process all transactions in a generalised fashion.
There is no strict defined roadmap but here are topics being worked on. And via the Zilliqa website there is also more information on the projects they are working on.
Business & Partnerships
It’s not only technology in which Zilliqa seems to be excelling as their ecosystem has been expanding and starting to grow rapidly. The project is on a mission to provide OpenFinance (OpFi) to the world and Singapore is the right place to be due to its progressive regulations and futuristic thinking. Singapore has taken a proactive approach towards cryptocurrencies by introducing the Payment Services Act 2019 (PS Act). Among other things, the PS Act will regulate intermediaries dealing with certain cryptocurrencies, with a particular focus on consumer protection and anti-money laundering. It will also provide a stable regulatory licensing and operating framework for cryptocurrency entities, effectively covering all crypto businesses and exchanges based in Singapore. According to PWC 82% of the surveyed executives in Singapore reported blockchain initiatives underway and 13% of them have already brought the initiatives live to the market. There is also an increasing list of organizations that are starting to provide digital payment services. Moreover, Singaporean blockchain developers Building Cities Beyond has recently created an innovation $15 million grant to encourage development on its ecosystem. This all suggests that Singapore tries to position itself as (one of) the leading blockchain hubs in the world.
Zilliqa seems to already take advantage of this and recently helped launch Hg Exchange on their platform, together with financial institutions PhillipCapital, PrimePartners and Fundnel. Hg Exchange, which is now approved by the Monetary Authority of Singapore (MAS), uses smart contracts to represent digital assets. Through Hg Exchange financial institutions worldwide can use Zilliqa's safe-by-design smart contracts to enable the trading of private equities. For example, think of companies such as Grab, Airbnb, SpaceX that are not available for public trading right now. Hg Exchange will allow investors to buy shares of private companies & unicorns and capture their value before an IPO. Anquan, the main company behind Zilliqa, has also recently announced that they became a partner and shareholder in TEN31 Bank, which is a fully regulated bank allowing for tokenization of assets and is aiming to bridge the gap between conventional banking and the blockchain world. If STOs, the tokenization of assets, and equity trading will continue to increase, then Zilliqa’s public blockchain would be the ideal candidate due to its strategic positioning, partnerships, regulatory compliance and the technology that is being built on top of it.
What is also very encouraging is their focus on banking the un(der)banked. They are launching a stablecoin basket starting with XSGD. As many of you know, stablecoins are currently mostly used for trading. However, Zilliqa is actively trying to broaden the use case of stablecoins. I recommend everybody to read this text that Amrit Kumar wrote (one of the co-founders). These stablecoins will be integrated in the traditional markets and bridge the gap between the crypto world and the traditional world. This could potentially revolutionize and legitimise the crypto space if retailers and companies will for example start to use stablecoins for payments or remittances, instead of it solely being used for trading.
Zilliqa also released their DeFi strategic roadmap (dating November 2019) which seems to be aligning well with their OpFi strategy. A non-custodial DEX is coming to Zilliqa made by Switcheo which allows cross-chain trading (atomic swaps) between ETH, EOS and ZIL based tokens. They also signed a Memorandum of Understanding for a (soon to be announced) USD stablecoin. And as Zilliqa is all about regulations and being compliant, I’m speculating on it to be a regulated USD stablecoin. Furthermore, XSGD is already created and visible on block explorer and XIDR (Indonesian Stablecoin) is also coming soon via StraitsX. Here also an overview of the Tech Stack for Financial Applications from September 2019. Further quoting Amrit Kumar on this:
There are two basic building blocks in DeFi/OpFi though: 1) stablecoins as you need a non-volatile currency to get access to this market and 2) a dex to be able to trade all these financial assets. The rest are built on top of these blocks.
So far, together with our partners and community, we have worked on developing these building blocks with XSGD as a stablecoin. We are working on bringing a USD-backed stablecoin as well. We will soon have a decentralised exchange developed by Switcheo. And with HGX going live, we are also venturing into the tokenization space. More to come in the future.”
Additionally, they also have this ZILHive initiative that injects capital into projects. There have been already 6 waves of various teams working on infrastructure, innovation and research, and they are not from ASEAN or Singapore only but global: see Grantees breakdown by country. Over 60 project teams from over 20 countries have contributed to Zilliqa's ecosystem. This includes individuals and teams developing wallets, explorers, developer toolkits, smart contract testing frameworks, dapps, etc. As some of you may know, Unstoppable Domains (UD) blew up when they launched on Zilliqa. UD aims to replace cryptocurrency addresses with a human-readable name and allows for uncensorable websites. Zilliqa will probably be the only one able to handle all these transactions onchain due to ability to scale and its resulting low fees which is why the UD team launched this on Zilliqa in the first place. Furthermore, Zilliqa also has a strong emphasis on security, compliance, and privacy, which is why they partnered with companies like Elliptic, ChainSecurity (part of PwC Switzerland), and Incognito. Their sister company Aqilliz (Zilliqa spelled backwards) focuses on revolutionizing the digital advertising space and is doing interesting things like using Zilliqa to track outdoor digital ads with companies like Foodpanda.
Zilliqa is listed on nearly all major exchanges, having several different fiat-gateways and recently have been added to Binance’s margin trading and futures trading with really good volume. They also have a very impressive team with good credentials and experience. They don't just have “tech people”. They have a mix of tech people, business people, marketeers, scientists, and more. Naturally, it's good to have a mix of people with different skill sets if you work in the crypto space.
Marketing & Community
Zilliqa has a very strong community. If you just follow their Twitter their engagement is much higher for a coin that has approximately 80k followers. They also have been ‘coin of the day’ by LunarCrush many times. LunarCrush tracks real-time cryptocurrency value and social data. According to their data, it seems Zilliqa has a more fundamental and deeper understanding of marketing and community engagement than almost all other coins. While almost all coins have been a bit frozen in the last months, Zilliqa seems to be on its own bull run. It was somewhere in the 100s a few months ago and is currently ranked #46 on CoinGecko. Their official Telegram also has over 20k people and is very active, and their community channel which is over 7k now is more active and larger than many other official channels. Their local communities also seem to be growing.
Moreover, their community started ‘Zillacracy’ together with the Zilliqa core team ( see www.zillacracy.com ). It’s a community-run initiative where people from all over the world are now helping with marketing and development on Zilliqa. Since its launch in February 2020 they have been doing a lot and will also run their own non-custodial seed node for staking. This seed node will also allow them to start generating revenue for them to become a self sustaining entity that could potentially scale up to become a decentralized company working in parallel with the Zilliqa core team. Comparing it to all the other smart contract platforms (e.g. Cardano, EOS, Tezos etc.) they don't seem to have started a similar initiative (correct me if I’m wrong though). This suggests in my opinion that these other smart contract platforms do not fully understand how to utilize the ‘power of the community’. This is something you cannot ‘buy with money’ and gives many projects in the space a disadvantage.
Zilliqa also released two social products called SocialPay and Zeeves. SocialPay allows users to earn ZILs while tweeting with a specific hashtag. They have recently used it in partnership with the Singapore Red Cross for a marketing campaign after their initial pilot program. It seems like a very valuable social product with a good use case. I can see a lot of traditional companies entering the space through this product, which they seem to suggest will happen. Tokenizing hashtags with smart contracts to get network effect is a very smart and innovative idea.
Regarding Zeeves, this is a tipping bot for Telegram. They already have 1000s of signups and they plan to keep upgrading it for more and more people to use it (e.g. they recently have added a quiz features). They also use it during AMAs to reward people in real-time. It’s a very smart approach to grow their communities and get familiar with ZIL. I can see this becoming very big on Telegram. This tool suggests, again, that the Zilliqa team has a deeper understanding of what the crypto space and community needs and is good at finding the right innovative tools to grow and scale.
To be honest, I haven’t covered everything (i’m also reaching the character limited haha). So many updates happening lately that it's hard to keep up, such as the International Monetary Fund mentioning Zilliqa in their report, custodial and non-custodial Staking, Binance Margin, Futures, Widget, entering the Indian market, and more. The Head of Marketing Colin Miles has also released this as an overview of what is coming next. And last but not least, Vitalik Buterin has been mentioning Zilliqa lately acknowledging Zilliqa and mentioning that both projects have a lot of room to grow. There is much more info of course and a good part of it has been served to you on a silver platter. I invite you to continue researching by yourself :-) And if you have any comments or questions please post here!
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
This was a back-and-forth I had on a message board few months back it must have been a kid I hope, it's easy to look at the history/chart Bitcoin sub-500 then Puff💥 hits 20K For many impossible hold with price volatility of 20%-30% swings ¯(°_o)/¯ such a long hold years in the making with no guarantee of a prize at the end. YouTube experts been under fire fact is there's a lot of different theories and expectations on price which is ironic cuz I don't like YouTube experts but one allowed me to buy the 2018 bottom who's actually a financial advisor expert which is his profession I'm soooo very grateful for. I have almost a religious cult like belief of the potential in Bitcoin at the right price there's a cushion which makes me findorff volatility much better than most good luck if your investing now. If you were to make it big you would have earned your money I'm earning my money if this hits 200k the market cap on bitcoin I don't know what it is currently but it's over 170 billion a drop in the bucket compared to Fortune 500 companies I believe this will hit 1 trillion market cap So much growth, potential I took me a while to grasp Bitcoin and what it actually is it's a currency not tied down to any country impossible to counterfeit it's all in the blockchain technology which is fascinating. I believe we're a year or less away from Bitcoin hitting the 2018 previous high but I do my best not to have any hard expectations on price this is why I suggest you do not watch to much or to many YouTube experts predicting price also technology advances an acceptance at stores don't always equate to price action I've learned that much🤦 I'm a big believer the number we're looking for bitcoin to hit $19,498.63 maybe not exactly lol but it's 2018 previous high till then I expect a lot of volatility when BTC hits the previous watch out a parabolic move very possible. GL SORRY IN ADVANCE FOR ANY TYPOS MANY ON HERE HAVE MORE KNOWLEDGE ON THE TECHNOLOGY AND A LONGER HISTORY WITH BITCOIN THEN ME I RESPECT THAT I READ MANY OTHERS POSTS AND ARTICLES ON HERE.
$1k invested in Top 10 Cryptos on Jan. 1, 2020 now worth $1,264 (UP +26%)
EXPERIMENT - Tracking Top 10 Cryptos of 2020 - Month Six - UP +26% See the full blog post with all the tableshere. Not sure what this is all about? Here is the history and ground rules of these experiments. tl;dr - This snapshot was taken on July 1st, 2020. By the slimmest of margins, the 2020 Top Ten is still the best performing of the three experiments. In June: Tether holds its ground, as a stablecoin should, all others finish the month in negative territory. BSV loses nearly a quarter of its value in June and is worst performing for the second straight month. Overall, since January 2020, it is Tezos in lead (+88%) followed by second place ETH (+79%). The 2020 Top 10 is up +26% compared to the -4% loss of the S&P 500 since 01.01.2020.
Month Six – UP 26%
Lots of red this month While technically still the best performing of the Top Ten “Index Fund” Experiments for the fifth straight month, this month the 2020 Top Ten cut it close. Very close. How close? The 2020 Top Ten is up +26.6% compared to the 2019 Top Ten’s +25.9%. Watch your back, 2020 Top Ten.
Question of the month:
Which country trialed Bitcoin payments for passports in June?
A) Costa Rica B) Venezuela C) Mongolia D) Eritrea Scroll down for the answer.
Ranking and June Winners and Losers
Movement in rank After a very strange zero movement May, we saw some ups and down with the 2020 Top Ten in June. Okay, mostly downs: XRP fell one, dropping it’s long-held #3 slot. Both EOS and Tezos struggled in June: both lost two places in the rankings and both dropped out of the Top Ten. Tether is the only crypto to make a positive move in June, never a good sign. June Winners – Just Tether. The rest of the field struggled in June. ETH finished in second place, ending the month down -7%. June Losers – BSV under-performed its peers for the second straight month, losing almost a quarter of its value (-23%) in June. Tezos also struggled, down -18% since the beginning of June. For those keeping score, I also keep a tally of which coins have the most monthly wins and losses. Tether and Tezos have won two months each. BSV has finished in last place three out of the first six months of the 2020 Top Ten Experiment.
Overall update – Tezos in lead, ETH takes second place from BSV, and 80% of Top Ten are in positive territory.
Despite a bad month, Tezos (+88% since January 2020) maintained its lead. Ethereum (+79%) isn’t far behind in second place and has overtaken third place BSV (+59%). Not counting Tether, the worst performing crypto is XRP, down -7% on the year.
Total Market Cap for the cryptocurrency sector:
The overall crypto market lost over $20B in June but is still up +38% since the beginning this year’s experiment in January 2020.
Bitcoin dominance fell a tiny bit, but hasn’t really made a significant move all year.
Overall return on investment since January 1st, 2020:
After an initial $1000 investment, the 2020 Top Ten Portfolio is now worth $1,264, up +26.4%. It is the best performing of the three Top Ten Crypto Index Fund Portfolio, but just barely: the 2019 group came in at +25.9% in June. Here’s the month by month ROI of the 2020 Top Ten Experiment, hopefully helpful to maintain perspective and provide an overview as we go along: All green first half of 2020 Besides the zombie apocalypse blip in March, so far so good: all green is good to see and a nice change from the all red table you’ll see in the 2018 experiment. The range of monthly ROI for the 2020 Top Ten has been between +7% and +55%. So, how does the 2020 Top Ten Experiment compare to the parallel projects?
Taken together, here’s the bottom bottom bottom line: After a $3000 investment in the 2018, 2019, and 2020 Top Ten Cryptocurrencies, my combined portfolios are worth $2,710. That’s down about -10% for the three combined portfolios. That’s compared to about +4% last month. Better than a few months ago (aka the zombie apocalypse) where it was down -24%, but not yet back at January (+13%) or February (+6%) levels. Lost in the numbers? Here’s a new table to help visualize the progress of the combined portfolios: So that’s the Top Ten Crypto Index Fund Experiments snapshot. Let’s take a look at how traditional markets are doing.
Comparison to S&P 500
I’m also tracking the S&P 500 as part of my experiment to have a comparison point with other popular investments options. Even with COVID and protests in the US, stocks continued to tick up. The S&P is now down just -4% since the beginning of the year. Over the same time period, the 2020 Top Ten Crypto Portfolio is returning about +26%. The initial $1k investment now worth about $1,264. The money I put into crypto in January 2020 would be worth $960 had it been redirected to the S&P 500. That’s a $304 difference on a $1k investment. Not bad, but not as impressive as last month’s $517 swing. And what if I invested in the S&P 500 the same way I did during the first three years of the Top Ten Crypto Index Fund Experiments? You know, the world’s slowest dollar cost averaging/$1k on January 1st approach? Here are the figures:
$1000 investment in S&P 500 on January 1st, 2018: +$170
$1000 investment in S&P 500 on January 1st, 2019: +$240
$1000 investment in S&P 500 on January 1st, 2020: -$40
Taken together, here’s the bottom bottom bottom line for a similar approach with the S&P: After three $1,000 investments into an S&P 500 index fund in January 2018, 2019, and 2020, my portfolio would be worth $3,370. That $3,370 is up over+12%since January 2018, compared to the $2,710 value (-10%) of the combined Top Ten Crypto Experiment Portfolios. Here’s another new table to help visualize the difference in ROI of the combined crypto portfolios vs. a hypothetical identical approach with the S&P 500: The new table makes it easy to see that crypto and the markets went in opposite directions in June. This has produced the largest difference in favor of the S&P since the beginning of 2020: a 22% gap. Compare that February, when there was only a 1% difference in ROI.
The crypto market as a whole is up +38% since the beginning of the year compared to the 2020 Top Ten cryptos which have gained +26%. For the second month in a row, and the only two times since the Top Ten 2020 began, the cryptos in this group have under-performed the overall market. Up until the last two months, focusing on the 2020 Top Ten has been a solid approach, but it has not worked so well in the other experiment years. Although there are a few examples of the Top Ten strategy outperforming the overall market in the 2019 Top Ten Experiment, it’s interesting to note at no point in the first thirty months of the Top Ten 2018 Experiment has the approach of focusing on the Top Ten cryptos outperformed the overall market. Not even once.
The world continues to struggle with a global pandemic and traditional markets have nearly bounced back. Although up since the beginning of the year, Crypto did not keep pace with US stocks in June. Will crypto reassert itself in the second half of the year? Final word: Please take care of yourselves and your neighbors. FYI – everyone is your neighbor. Thanks for reading and for supporting the experiment. I hope you’ve found it helpful. I continue to be committed to seeing this process through and reporting along the way. Feel free to reach out with any questions and stay tuned for progress reports. Keep an eye out for the original 2018 Top Ten Crypto Index Fund Experiment and the 2019 Top Ten Experiment follow up experiment.
And the Answer is…
B) Venezuela According to multiple sources, a Bitcoin payment option was available when paying online for passport services in Venezuela. It didn’t last long though: just hours later, the option disappeared, according to user reports.
CDCs business model explained - And how this benefits you
wanted to make this post a long time ago but never found the time around it. Right now I feel it justifies a simplified version where I think people can do their own calculations and assumptions. Please put your own opinion on it. But I hope this explains a bit why CDCs decision was good (for them) but not for us.
Their original idea turned a flop. Why? The Cashbacks. I loved the cashbacks but from a business perspective they made no sense: - Other companies cap the cashbacks because they are loss making. - CDC had to share creditcard revenue with AND visa AND wirecard. - Cashbacks are used for crosselling (get a bank account, insurance, loan for your house etc). The lifetime value of a customer makes it viable. - A big chunck of their customers (EU) live in an area where creditcard companies’ shares on purchases are capped at lower rate than the cashbacks. I think this point needs almost no further explanation as the increases costs to get a card clearly show CDC understand this as well.
Industry standard rates, but unsustainable. If you take someones money for interest that means you earn a higher interest rate on that money than you give back. Might be possible with crypto on the short term but very risky. Arguments that you can get these rates on for example SGD are invalid as SGD is not pegged to BTC. Some rates such as the rate for CRO is indeed sustainable for CDC. Don’t want to go too far in it as other people will be more knowledgable in this than me, but: something about interest rate & inflation.
Only use of this is to use it for leverage trading. If you need a loan you wont lock 100% to receive 50%.
Their mastermove, and with a domain like crypto.com the ability to get very big. Google how much Binance made and you know the possibilities. On top of this they created their own monopoly on CRO. Making sure all tokens held by customers are effectively locked. This means they will earn money twice: - On the trading fee; and - On selling you the crypto used to pay the trading fee.
I suspect the four elements described above are all loss-making as of now. But who cares? CDC managed to do what every company dreams of: providing their own financing by printing money. Best of it: 1) they control the price, 2) no need to pay it back, and 3) no need to pay interest. Not even triple A countries with negative interest rates get this good of a deal as they won’t be able to refinance those bonds into perpetuity.
We do not own shares, we own tokens. To make this a valuable investment you want your tokens to go up in value. I know as of now both are up in value but looking longer term here. The value of your tokens can be drilled down to the following: supply and demand. MCO: First of all, I am in favour of CDC using a fractional reserve, or capital requirement to reinvest your money. Ofcourse with checks on their risk profile but how else are they gonna make money from your stakes. It cant be only giving cashbacks and free cards. With or without a reserve the value of MCO would go up eventually. - locking cards causes buying pressure - card cashbacks cause buying pressure (assuming not resold immediately) - Dynamic pricing of cards would cause selling pressure (when CDC is out of MCO it is up to you to sell, some people are happy to sell for $10, keeping the same card and basically freeing an extra card (or 5 - fractional reserve) for someone else. Others want to do it later. Significant gains on your MCO might take long with this process and is based on adoption but would come. CRO:
Trading fees cause demand
Syndicates cause demand (less sustainable as rewards are quite limited with the current oversubscription.
The problem here is the absence of the long term incentive for CRO holders. Right now CRO made very good gains. Personally I don’t understand why but also I cant complain about what it gave me. But in the long term CDC controls the supply. You will never get the good deal you wanted because there is such an absolute whale on the market. See how a bitcoin whale can influence the price of a token and compare their small share to the massive amount of CRO held by CDC. This will not be viable until the market controls the token - which is far, far in the future. Just my thoughts. Do with it as you please. You may not agree, which is your good right. But I hope it makes you think critically about what you are investing in and about the implications of a swap. As in my opinion the upside potential of MCO gets moved from the token investor to CDC. A smart move from their side, one that I totally understand. But there are clearly some losers here (me, us).
https://federationofglobalmerchants.com/2020/08/14/gold-and-silver-where-do-they-go-from-here/ Investors know by now that one of the leading indicators of an unstable and unpredictable stock market is a surge in the price of precious metals like gold and silver. In February, amidst the COVID-19 pandemic, the markets officially entered a recession, even though just months later several of the major indices have reached all-time highs. It was a brief dip into recessionary territory, but this sort of volatility is what gives investors hesitation in putting their money into the stock market, rather than something that is perceived to be more stable. Gold future contracts are selling well above $2000 per ounce for the rest of 2020 and well into 2021 as well showing that investors are confident that gold will continue to rise in price. Silver is also surging reaching new all-time highs on a daily basis. So investors may be curious as to how to get into this red-hot market, especially as the markets continue to fluctuate. Gold: For centuries now gold has been literally the ‘gold-standard’ of currency and wealth. Dating back all the way to around 40,000 B.C. in Spanish caves, gold is a naturally occurring element that has both fascinated and lured people for as long as barter systems and wealth has been recorded. Currently, gold is enjoying its highest valuations in history as investors flock to the stability of the precious metal through various streams. So what is the allure of gold and why is it so stable? Warren Buffett once said, “Gold is a way of going long on fear.” That is quite a statement from perhaps the greatest investment mind of our generation. But what does this mean for the novice investor? Even the most successful blue-chip stocks can crash. Obviously the more prominent and profitable companies with mega market caps will not crash as easily as smaller companies, but given the volatility of the pandemic, we can see anything happen. But as stock markets fluctuate on a daily basis, the price of gold remains mostly stoic. Not as manipulatable as stock prices, gold is as steady as it gets for investors. What makes gold so stable? It is a combination of factors, first and foremost, it is a physical and tangible element which makes it possible for people to store and stockpile. It does not corrode or wear down over time, making it durable and ensuring that the value remains. There is also a finite supply of it in the world. This reinforces that it will always keep a certain level of valuation as the supply is kept in check. Today, as the Federal Reserve tries desperately to pump money into the American economy to stave off a global recession and keep companies afloat. Printing more American dollars helps in the interim, but it is a temporary band-aid for the bigger problem. As more of the dollar gets created the more it gets devalued as a form of currency. This is another reason why gold is skyrocketing. The two valuations always work inversely to each other, so as the greenback continues to plummet, the price of gold will continue to surge which makes perfect sense if one thinks about it. The value of gold is priced in American dollars per ounce, so if the value of an American dollar retreats, the cost of gold will rise in response. So how can investors take advantage of the current state of gold? In the age of internet investing, there are plenty of ways to invest in gold or anything in that matter. Most American platforms give inventors the ability to buy fractional shares of companies. While this comes in handy for expensive stocks like Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL), or Tesla (NASDAQ:TSLA), it also allows investors to diversify their funds across multiple companies to form a basket approach to an industry. There are also plenty of ETFs or Exchange Traded Funds, available for investors to consider. These funds have the diversification of a mutual fund or index fund, but trade like individual stocks. Here’s a few of the better gold ETFs to consider if you are looking to get into the industry:
IAU – iShares Gold Trust: One of the better known gold ETFs out there, iSHARES is a reputable brand with great overall market performance. The fund has returned over 17% to inventors already this year, and with the price of gold projected to continue to rise, this fund should keep delivering for investors into next year.
DGL – Invesco DB Gold Fund: Another well known and reputable ETF, the Invesco Gold Fund has slightly higher fees than iSHARES but has also had a slightly better return so far this year.
IAUF – iShares Gold Strategy ETF: Another iSHARES ETF, this one has parts of IAU, as well as gold futures contracts, to get a long term forecast of the price of gold so the investor gets exposure to a wider range of gold options.
There are dozens of other ETFs available for investors that cover everything from miners to the finished products. Mining company stocks are another great way to get exposure. As the demand for gold increases, these mining companies should see a rise in their revenues and eventually, their profits as well. These changes will be reflected in their stock prices and we have already seen some of this already this year.
ABX – Barrick Gold: One of the largest gold mining companies in the world, this Canadian company has seen healthy gains in their stock price so far in 2020. Over the last 52 weeks, Barrick investors have enjoyed a 131% increase in stock price. With mining projects ongoing in Canada, America, Australia, South America, and Africa, Barrick has already announced that it is on track to achieve guidance this year despite closures from COVID-19.
FNV – Franco-Nevada Gold: This stock price rose almost 15% in July alone. Franco-Nevada operates as a funding company to gold mining companies, rather than actually doing the mining themselves. Sustainalytics, a guidance and analysis company, rated Franco-Nevada number one amongst 104 precious metal companies.
NEM – Newmont Goldcorp: The largest gold stock by market-cap and the only stock to trade on the S&P 500, Newmont is probably the safest company for gold investors to invest in. On top of steady returns and low volatility in the stock price, the company pays a fairly healthy dividend as well.
With gold at all-time highs, we can begin to question how high the precious metal may go. With a second wave of the coronavirus making its way around some parts of the world, and America, still making its way through their initial wave, the uncertainty that exists in today’s markets may continue into 2021. Some Wall Street analysts have forecast gold to rise as high as $10,000 per ounce, but that seems like a little ambitious. Gold has just recently hit all-time highs at $2000 per ounce and to imagine that it can run up another 500% in the next few years seems far-fetched at this point in time. That would require the markets to enter an extended bear-market, which of course is possible after a decade of a bullish run, but it would also require the American dollar to continue to be further devalued. Gold is pegged to continue to rise for the rest of this year though and well into 2021. That means investors and analysts are foreseeing a further devaluation of the American greenback as well as continued volatility in the markets and economy. Is gold a safe haven? Some people believe it is, but if you are an investor that enjoys high returns over long periods of time, investing in precious metals may not be for you. Investors love the stability of gold but the returns are never astronomical, with the last few months being an exception. It helps to have a portion of your portfolio dedicated to precious metals to diversify and protect you from any sudden market corrections, but investors should not be looking at gold as a short-term way to get wealthy. Silver: The other precious metal that has been flying sky-high of recent months is silver, the eternal younger brother to gold. Mined from silver-ore, it is a highly malleable metal that was once valued higher than gold by the Ancient Egyptians. Today, it is relatively low in price per ounce compared to gold, reaching all-time highs recently of just under $30 per ounce. Silver is another stable alternative to gold, and at lower prices, it may be a little more affordable for the novice investor to jump into. Like with gold, silver has an inverse relationship to the American dollar, and to all currencies in general. Again, this is another reason why silver is hitting all-time highs right now, with silver future contracts predicting a steady rise to mirror gold, well into 2021. There is also something that Wall Street calls the gold silver ratio, which is exactly what it sounds like: the ratio of the price of gold per ounce to the price of silver per ounce. This ratio has historically moved together, which makes logical sense if both precious metals are independently moving inverse to paper currencies. Historically, the gold and silver prices do move together though as the general ratio has been in the range of 17:1 to 20:1. Silver also has numerous ways for investors to get involved in, including silver mining and production companies, as well as the ever popular silver ETFs. These Exchange Traded Funds have gained popularity amongst retail investors in recent years as a way of purchasing a diversified product as a single equity with low costs, and no trading fees if your platform allows it. Here are a few of the better performing silver ETFs that investors can look into adding to their portfolios if they are interested in the precious metal:
SLV – iShares Silver Trust: Probably one of the better known silver ETFs, this is fully backed by silver bullion and coins held in a vault. While usually fairly steady, this ETF has enjoyed a 52-week increase of 152% with much of that coming in the last few months.
SIVR – Aberdeen Standard Physical Silver Shares ETF: Very similar to SLV but with lower fees, this is an ideal fund for novice and experienced investors to get into as they start to diversify their portfolios.
DBS – Invesco DB Silver Fund: Again another stable ETF for investors to get into, and another good performing one as well. Just as with their gold ETF, Invsco focuses on silver futures contracts for this fund, so it is a nice long-term play if investors are bullish on silver.
Just as with gold, investors can get a slice of the silver pie by buying shares of silver mining companies as well. Here are a few of the top silver mining company stocks that investors can look into adding to their portfolios.
PAAS – Pan American Silver Corp.: This Canada based miner is focussed on the exploration, development, extraction, refining, processing, and reclamation of silver. They operate mines in Peru, Mexico, Bolivia, and are developing more as well for the future.
WPM – Wheaton Precious Metals: Another Canadian based company that deals with miners of gold, silver, palladium, and cobalt. Wheaton is not a direct miner, rather they purchase these precious metals from other mining companies.
AG – First Majestic Silver Corp.: Canadian companies seem to be dominating the silver industry, and First Majestic is another of those. This company focuses mainly in Mexico for gold and silver.
Silver may never be as popular as gold for investors to keep track of but the two precious metals move in a synchronized fashion, and both are looked upon by investors as safe havens for their money when the market is in flux. The rest of 2020 seems like a wildcard right now, with many analysts expecting a further correction to the markets at any point. There seems to be an inevitability to a market crash of some sort, whether it is as big as the one that happened back in February and March, remains to be seen. Investors are looking at the precious metal industry to hold their funds to wait out any sort of correction or crash. If this does happen, we may expect a pullback in precious metals too as investors selloff to get back into some stocks at their low levels. Such is the ebb and flow of the economy during turbulent times like the current one we are in. At the same time, what if a market correction does not happen? Will the uncertainty continue or will investors feel relatively secure in the way the markets are progressing? This could cause a reduction in the demand for silver and gold, culminating in lower prices in the future. Of course this also depends on the Federal Reserve diminishing their rate of printing paper currency to bailout the economy, which does not seem like a reality in the short-term at least. Another point of contention for investors is the ongoing economical and political tensions between China and America. The two world powers have been feuding for the past couple of months over various things, but it escalated as China social media app Tik Tok gained popularity in North America. It was alleged that TikTok was sending data and information from mobile phones back to China, though nobody is sure of their intended use of this data. Regardless, the markets have stumbled several times lately because of this. Both sides have threatened economic sanctions and the banning of certain product use in each country. The prices of silver and gold have shot up as the tensions have escalated between the two governments, as investors flock to the precious metals. Many of the biggest companies on the major stock indices rely on China for materials or production, so any sort of breakdown in supply chains could cause an enormous change to their stock prices. An example of this is a sudden 5% correction in the price of Apple (NASDAQ:AAPL), as it was thought that iPhone sales would decline if China’s chat platform WeChat was banned in America. There are other factors that may have an effect on gold and silver prices as well. In this modern economy, many of the retail investors have trended towards younger adults with a sudden influx of income. Popular platforms such as Robinhood combined with increased time at home during the quarantine, have caused retail investor usage to skyrocket during the pandemic. Many of these investors are more lured in by the shiny new objects of cryptocurrencies like Bitcoin. Perhaps we will start thinking of these cryptocurrencies as a modern day version of precious metals one day, as many investors and some analysts, believe that Bitcoin may be a safe haven in the future. Already, the price of Bitcoin has risen above $12,000 in August, mirroring the highs of gold and silver. If the demand for Bitcoin rises higher than the demand for precious metals, we may see an investor migration to cryptocurrencies rather than tangible metals. Conclusion: Gold and silver are staples of our global economy, and will continue to be so as long as the demand for precious metals exists. In times of uncertainty, gold and silver are viewed as safe relative to the volatility of the stock market. Sure, their prices can vary as well, but because they are tied to a less dynamic valuation that is based on an inverse relation to paper currency, their prices will not and can not fluctuate as much as the liquidity of individual stocks. As long as the world remains in flux, there will be a general feeling of instability, especially for global markets. A second wave of COVID-19 in the third or fourth quarter of 2020 could prove to be enough to push the markets over the edge and into another recession. The bull market has been rallying for over a decade now, with astronomical gains over the last few years, especially for sectors like the big tech FAANG stocks. Another factor to consider is what a Biden government could bring to the world if he is elected over President Donald Trump in October. A new government could ease some of the tensions with China, as well as within America itself. These are all big what ifs, and could all have potential impacts on the economy and the world. As long as all of these factors are up in the air, investors will be looking to gold and silver as ways of stabilizing their portfolios and protecting their finances from a potential market crash in the future.
Author: Gamals Ahmed, CoinEx Business Ambassador https://preview.redd.it/5bqakdqgl3g51.jpg?width=865&format=pjpg&auto=webp&s=b709794863977eb6554e3919b9e00ca750e3e704 A decentralized storage network that transforms cloud storage into an account market. Miners obtain the integrity of the original protocol by providing data storage and / or retrieval. On the contrary, customers pay miners to store or distribute data and retrieve it. Filecoin announced, that there will be more delays before its main network is officially launched. Filecoin developers postponed the release date of their main network to late July to late August 2020. As mentioned in a recent announcement, the Filecoin team said that the initiative completed the first round of the internal protocol security audit. Platform developers claim that the results of the review showed that they need to make several changes to the protocol’s code base before performing the second stage of the software testing process. Created by Protocol Labs, Filecoin was developed using File System (IPFS), which is a peer-to-peer data storage network. Filecoin will allow users to trade storage space in an open and decentralized market. Filecoin developers implemented one of the largest cryptocurrency sales in 2017. They have privately obtained over $ 200 million from professional or accredited investors, including many institutional investors. The main network was slated to launch last month, but in February 2020, the Philly Queen development team delayed the release of the main network between July 15 and July 17, 2020. They claimed that the outbreak of the Coronavirus (COVID-19) in China was the main cause of the delay. The developers now say that they need more time to solve the problems found during a recent codecase audit. The Filecoin team noted the following: “We have drafted a number of protocol changes to ensure that building our major network launch is safe and economically sound.” The project developers will add them to two different implementations of Filecoin (Lotus and go-filecoin) in the coming weeks. Filecoin developers conducted a survey to allow platform community members to cast their votes on three different launch dates for Testnet Phase 2 and mainnet. The team reported that the community gave their votes. Based on the vote results, the Filecoin team announced a “conservative” estimate that the second phase of the network test should begin by May 11, 2020. The main Filecoin network may be launched sometime between July 20 and August 21, 2020. The updates to the project can be found on the Filecoin Road Map. Filecoin developers stated: “This option will make us get the most important protocol changes first, and then implement the rest as protocol updates during testnet.” Filecoin is back down from the final test stage. Another filecoin decentralized storage network provider launched its catalytic test network, the final stage of the storage network test that supports the blockchain. In a blog post on her website, Filecoin said she will postpone the last test round until August. The company also announced a calibration period from July 20 to August 3 to allow miners to test their mining settings and get an idea of how competition conditions affected their rewards. Filecoin had announced earlier last month that the catalytic testnet test would precede its flagship launch. The delay in the final test also means that the company has returned the main launch window between August 31 and September 21. Despite the lack of clear incentives for miners and multiple delays, Filecoin has succeeded in attracting huge interest, especially in China. Investors remained highly speculating on the network’s mining hardware and its premium price. Mining in Filecoin In most blockchain protocols, “miners” are network participants who do the work necessary to promote and maintain the blockchain. To provide these services, miners are compensated in the original cryptocurrency. Mining in Filecoin works completely differently — instead of contributing to computational power, miners contribute storage capacity to use for dealing with customers looking to store data. Filecoin will contain several types of miners: Storage miners responsible for storing files and data on the network. Miners retrieval, responsible for providing quick tubes for file recovery. Miners repair to be carried out. Storage miners are the heart of the network. They earn Filecoin by storing data for clients, and computerizing cipher directories to check storage over time. The probability of earning the reward reward and transaction fees is proportional to the amount of storage that the Miner contributes to the Filecoin network, not the hash power. Retriever miners are the veins of the network. They earn Filecoin by winning bids and mining fees for a specific file, which is determined by the market value of the said file size. Miners bandwidth and recovery / initial transaction response time will determine its ability to close recovery deals on the network. The maximum bandwidth of the recovery miners will determine the total amount of deals that it can enter into. In the current implementation, the focus is mostly on storage miners, who sell storage capacity for FIL.
The current system specifications recommended for running the miner are:
NVIDIA-manufactured GPU (to be expanded).
SSD drive designated as large buffer (512GB +).
Large amount of RAM for data replication account (128GB +)
Compared to the hardware requirements for running a validity checker, these standards are much higher — although they definitely deserve it. Since these will not increase in the presumed future, the money spent on Filecoin mining hardware will provide users with many years of reliable service, and they pay themselves many times. Think of investing as a small business for cloud storage. To launch a model on the current data hosting model, it will cost millions of dollars in infrastructure and logistics to get started. With Filecoin, you can do the same for a few thousand dollars. Proceed to mining Deals are the primary function of the Filecoin network, and it represents an agreement between a client and miners for a “storage” contract. Once the customer decides to have a miner to store based on the available capacity, duration and price required, he secures sufficient funds in a linked portfolio to cover the total cost of the deal. The deal is then published once the mine accepts the storage agreement. By default, all Filecoin miners are set to automatically accept any deal that meets their criteria, although this can be disabled for miners who prefer to organize their deals manually. After the deal is published, the customer prepares the data for storage and then transfers it to the miner. Upon receiving all the data, the miner fills in the data in a sector, closes it, and begins to provide proofs to the chain. Once the first confirmation is obtained, the customer can make sure the data is stored correctly, and the deal has officially started. Throughout the deal, the miner provides continuous proofs to the chain. Clients gradually pay with money they previously closed. If there is missing or late evidence, the miner is punished. More information about this can be found in the Runtime, Cut and Penalties section of this page. At Filecoin, miners earn two different types of rewards for their efforts: storage fees and reward prevention. Storage fees are the fees that customers pay regularly after reaching a deal, in exchange for storing data. This fee is automatically deposited into the withdrawal portfolio associated with miners while they continue to perform their duties over time, and is locked for a short period upon receipt. Block rewards are large sums given to miners calculated on a new block. Unlike storage fees, these rewards do not come from a linked customer; Instead, the new FIL “prints” the network as an inflationary and incentive measure for miners to develop the chain. All active miners on the network have a chance to get a block bonus, their chance to be directly proportional to the amount of storage space that is currently being contributed to the network. Duration of operation, cutting and penalties “Slashing” is a feature found in most blockchain protocols, and is used to punish miners who fail to provide reliable uptime or act maliciously against the network. In Filecoin, miners are susceptible to two different types of cut: storage error cut, unanimously reduce error. Storage Error Reduction is a term used to include a wider range of penalties, including error fees, sector penalties, and termination fees. Miners must pay these penalties if they fail to provide reliability of the sector or decide to leave the network voluntarily. An error fee is a penalty that a miner incurs for each non-working day. Sector punishment: A penalty incurred by a miner of a disrupted sector for which no error was reported before the WindowPoSt inspection. The sector will pay an error fee after the penalty of the sector once the error is discovered. Termination Fee: A penalty that a miner incurs when a sector is voluntary or involuntarily terminated and removed from the network. Cutting consensus error is the penalty that a miner incurs for committing consensus errors. This punishment applies to miners who have acted maliciously against the network consensus function. Filecoin miners Eight of the top 10 Felticoin miners are Chinese investors or companies, according to the blockchain explorer, while more companies are selling cloud mining contracts and distributed file sharing system hardware. CoinDesk’s Wolfe Chao wrote: “China’s craze for Filecoin may have been largely related to the long-standing popularity of crypto mining in the country overall, which is home to about 65% of the computing power on Bitcoin at discretion.” With Filecoin approaching the launch of the mainnet blocknet — after several delays since the $ 200 million increase in 2017 — Chinese investors are once again speculating strongly about network mining devices and their premium prices. Since Protocol Labs, the company behind Filecoin, released its “Test Incentives” program on June 9 that was scheduled to start in a week’s time, more than a dozen Chinese companies have started selling cloud mining contracts and hardware — despite important details such as economics Mining incentives on the main network are still endless. Sales volumes to date for each of these companies can range from half a million to tens of millions of dollars, according to self-reported data on these platforms that CoinDesk has watched and interviews with several mining hardware manufacturers. Filecoin’s goal is to build a distributed storage network with token rewards to spur storage hosting as a way to drive wider adoption. Protocol Labs launched a test network in December 2019. But the tokens mined in the testing environment so far are not representative of the true silicon coin that can be traded when the main network is turned on. Moreover, the mining incentive economics on testnet do not represent how final block rewards will be available on the main network. However, data from Blockecoin’s blocknetin testnet explorers show that eight out of 10 miners with the most effective mining force on testnet are currently Chinese miners. These eight miners have about 15 petabytes (PB) of effective storage mining power, accounting for more than 85% of the total test of 17.9 petable. For the context, 1 petabyte of hard disk storage = 1000 terabytes (terabytes) = 1 million gigabytes (GB). Filecoin craze in China may be closely related to the long-standing popularity of crypt mining in the country overall, which is home to about 65% of the computing power on Bitcoin by estimation. In addition, there has been a lot of hype in China about foreign exchange mining since 2018, as companies promote all types of devices when the network is still in development. “Encryption mining has always been popular in China,” said Andy Tien, co-founder of 1475, one of several mining hardware manufacturers in Philquin supported by prominent Chinese video indicators such as Fenbushi and Hashkey Capital. “Even though the Velikoyen mining process is more technologically sophisticated, the idea of mining using hard drives instead of specialized machines like Bitcoin ASIC may be a lot easier for retailers to understand,” he said. Meanwhile, according to Feixiaohao, a Chinese service comparable to CoinMarketCap, nearly 50 Chinese crypto exchanges are often somewhat unknown with some of the more well-known exchanges including Gate.io and Biki — have listed trading pairs for Filecoin currency contracts for USDT. In bitcoin mining, at the current difficulty level, one segment per second (TH / s) fragmentation rate is expected to generate around 0.000008 BTC within 24 hours. The higher the number of TH / s, the greater the number of bitcoins it should be able to produce proportionately. But in Filecoin, the efficient mining force of miners depends on the amount of data stamped on the hard drive, not the total size of the hard drive. To close data in the hard drive, the Filecoin miner still needs processing power, i.e. CPU or GPU as well as RAM. More powerful processors with improved software can confine data to the hard drive more quickly, so miners can combine more efficient mining energy faster on a given day. As of this stage, there appears to be no transparent way at the network level for retail investors to see how much of the purchased hard disk drive was purchased which actually represents an effective mining force. The U.S.-based Labs Protocol was behind Filecoin’s initial coin offer for 2017, which raised an astonishing $ 200 million. This was in addition to a $ 50 million increase in private investment supported by notable venture capital projects including Sequoia, Anderson Horowitz and Union Square Ventures. CoinDk’s parent company, CoinDk, has also invested in Protocol Labs. After rounds of delay, Protocol Protocols said in September 2019 that a testnet launch would be available around December 2019 and the main network would be rolled out in the first quarter of 2020. The test started as promised, but the main network has been delayed again and is now expected to launch in August 2020. What is Filecoin mining process? Filecoin mainly consists of three parts: the storage market (the chain), the blockecin Filecoin, and the search market (under the chain). Storage and research market in series and series respectively for security and efficiency. For users, the storage frequency is relatively low, and the security requirements are relatively high, so the storage process is placed on the chain. The retrieval frequency is much higher than the storage frequency when there is a certain amount of data. Given the performance problem in processing data on the chain, the retrieval process under the chain is performed. In order to solve the security issue of payment in the retrieval process, Filecoin adopts the micro-payment strategy. In simple terms, the process is to split the document into several copies, and every time the user gets a portion of the data, the corresponding fee is paid. Types of mines corresponding to Filecoin’s two major markets are miners and warehousers, among whom miners are primarily responsible for storing data and block packages, while miners are primarily responsible for data query. After the stable operation of the major Filecoin network in the future, the mining operator will be introduced, who is the main responsible for data maintenance. In the initial release of Filecoin, the request matching mechanism was not implemented in the storage market and retrieval market, but the takeover mechanism was adopted. The three main parts of Filecoin correspond to three processes, namely the stored procedure, retrieval process, packaging and reward process. The following figure shows the simplified process and the income of the miners: The Filecoin mining process is much more complicated, and the important factor in determining the previous mining profit is efficient storage. Effective storage is a key feature that distinguishes Filecoin from other decentralized storage projects. In Filecoin’s EC consensus, effective storage is similar to interest in PoS, which determines the likelihood that a miner will get the right to fill, that is, the proportion of miners effectively stored in the entire network is proportional to final mining revenue. It is also possible to obtain higher effective storage under the same hardware conditions by improving the mining algorithm. However, the current increase in the number of benefits that can be achieved by improving the algorithm is still unknown. It seeks to promote mining using Filecoin Discover Filecoin announced Filecoin Discover — a step to encourage miners to join the Filecoin network. According to the company, Filecoin Discover is “an ever-growing catalog of numerous petabytes of public data covering literature, science, art, and history.” Miners interested in sharing can choose which data sets they want to store, and receive that data on a drive at a cost. In exchange for storing this verified data, miners will earn additional Filecoin above the regular block rewards for storing data. Includes the current catalog of open source data sets; ENCODE, 1000 Genomes, Project Gutenberg, Berkley Self-driving data, more projects, and datasets are added every day. Ian Darrow, Head of Operations at Filecoin, commented on the announcement: “Over 2.5 quintillion bytes of data are created every day. This data includes 294 billion emails, 500 million tweets and 64 billion messages on social media. But it is also climatology reports, disease tracking maps, connected vehicle coordinates and much more. It is extremely important that we maintain data that will serve as the backbone for future research and discovery”. Miners who choose to participate in Filecoin Discover may receive hard drives pre-loaded with verified data, as well as setup and maintenance instructions, depending on the company. The Filecoin team will also host the Slack (fil-Discover-support) channel where miners can learn more. Filecoin got its fair share of obstacles along the way. Last month Filecoin announced a further delay before its main network was officially launched — after years of raising funds. In late July QEBR (OTC: QEBR) announced that it had ceded ownership of two subsidiaries in order to focus all of the company’s resources on building blockchain-based mining operations. The QEBR technology team previously announced that it has proven its system as a Filecoin node valid with CPU, GPU, bandwidth and storage compatibility that meets all IPFS guidelines. The QEBR test system is connected to the main Filecoin blockchain and the already mined filecoin coin has already been tested. “The disclosure of Sheen Boom and Jihye will allow our team to focus only on the upcoming global launch of Filecoin. QEBR branch, Shenzhen DZD Digital Technology Ltd. (“ DZD “), has a strong background in blockchain development, extraction Data, data acquisition, data processing, data technology research. We strongly believe Filecoin has the potential to be a leading blockchain-based cryptocurrency and will make every effort to make QEBR an important player when Mainecoin mainnet will be launched soon”. IPFS and Filecoin Filecoin and IPFS are complementary protocols for storing and sharing data in a decentralized network. While users are not required to use Filecoin and IPFS together, the two combined are working to resolve major failures in the current web infrastructure. IPFS It is an open source protocol that allows users to store and transmit verifiable data with each other. IPFS users insist on data on the network by installing it on their own device, to a third-party cloud service (known as Pinning Services), or through community-oriented systems where a group of individual IPFS users share resources to ensure the content stays live. The lack of an integrated catalytic mechanism is the challenge Filecoin hopes to solve by allowing users to catalyze long-term distributed storage at competitive prices through the storage contract market, while maintaining the efficiency and flexibility that the IPFS network provides. Using IPFS In IPFS, the data is hosted by the required data installation nodes. For data to persist while the user node is offline, users must either rely on their other peers to install their data voluntarily or use a central install service to store data. Peer-to-peer reliance caching data may be a good thing as one or multiple organizations share common files on an internal network, or where strong social contracts can be used to ensure continued hosting and preservation of content in the long run. Most users in an IPFS network use an installation service. Using Filecoin The last option is to install your data in a decentralized storage market, such as Filecoin. In Filecoin’s structure, customers make regular small payments to store data when a certain availability, while miners earn those payments by constantly checking the integrity of this data, storing it, and ensuring its quick recovery. This allows users to motivate Filecoin miners to ensure that their content will be live when it is needed, a distinct advantage of relying only on other network users as required using IPFS alone. Filecoin, powered by IPFS It is important to know that Filecoin is built on top of IPFS. Filecoin aims to be a very integrated and seamless storage market that takes advantage of the basic functions provided by IPFS, they are connected to each other, but can be implemented completely independently of each other. Users do not need to interact with Filecoin in order to use IPFS. Some advantages of sharing Filecoin with IPFS:
Filecoin and IPFS CIDs share hash specifications.
Use libp2p by Filecoin nodes to create secure connections with each other.
Messaging between nodes and cluster propagation is facilitated in Filecoin by libp2p pubsub.
IPLD use for blockchain data structures.
Use Graphsync to transfer data between nodes.
Of all the decentralized storage projects, Filecoin is undoubtedly the most interested, and IPFS has been running stably for two years, fully demonstrating the strength of its core protocol. Filecoin’s ability to obtain market share from traditional central storage depends on end-user experience and storage price. Currently, most Filecoin nodes are posted in the IDC room. Actual deployment and operation costs are not reduced compared to traditional central cloud storage, and the storage process is more complicated. PoRep and PoSt, which has a large number of proofs of unknown operation, are required to cause the actual storage cost to be so, in the early days of the release of Filecoin. The actual cost of storing data may be higher than the cost of central cloud storage, but the initial storage node may reduce the storage price in order to obtain block rewards, which may result in the actual storage price lower than traditional central cloud storage. In the long term, Filecoin still needs to take full advantage of its P2P storage, convert storage devices from specialization to civil use, and improve its algorithms to reduce storage costs without affecting user experience. The storage problem is an important problem to be solved in the blockchain field, so a large number of storage projects were presented at the 19th Web3 Summit. IPFS is an important part of Web3 visibility. Its development will affect the development of Web3 to some extent. Likewise, Web3 development somewhat determines the future of IPFS. Filecoin is an IPFS-based storage class project initiated by IPFS. There is no doubt that he is highly expected. Resources :
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