Ultimate glossary of crypto currency terms, acronyms and abbreviations
I lost it all (this my old rogerver bcashy troll account btw) I don’t even know how to start but as of yesterday I’m officially broke, I ruined my life and future. I’m a 23yrs guy, my journey with Bitcoin started in 2014. I bought it to actually use it not sure if people do that nowadays? but The HODL journey didn’t start until the beginning of 2017 as I notice the $ value in my blockchain wallet steadily increasing didn’t even know how or why it was increasing I thought it was a glitch making me free money for this reason I decided to go ALL IN I dumped my life saving into Bitcoin. price was around 1-2K $ and I was able to get 11 BTC in total. Unfortunately before the Bullrun start I lost around 4 coin due to ICO"s scams and just buying shitcooins in poloniex with zero trading knowledge(had a great time with the trollbox). After my loss I took my coins out of the exchange and held in a cold wallet, Fast forwards September 2017 the price kept going up I couldn’t even believe it specially after it broke past 10k I was so euphoric matter fact I was chilling in here, in this subreddit celebrating with everyone posting memes etc.. When BTC hit 20k my greedy asss still didnt wanna sell I didn’t have a price target I though it will keep going up forever. It was going so quick I couldn’t even process what was happening I told my siblings I was rich they told me to sell this bubble but I said "HELL NO! I was part of the moonboy gang we don’t sell we HOODL" I was 19 at the time. seeing this type of money was unreal I had more than 6 fucking figures in my wallet. Eventually we topped out at 20k I didn’t sell although the price kept going down and down and Depression started to hit after we dropped below 10k specially when it went down more near the 3k level I started to regret everything kicking my self for not listening to my siblings when they told me sell. Nonetheless I still had faith in Bitcoin and knew one day we will recover but I needed to accepted the fact that it might take months maybe years to get back to ath. for this reason I disconnected from the crypto community I had to forget about Bitcoin so I shifted my focus somewhere else luckily I stumbled across this popular game called “Fortnite” it took all my time and distraction away from my crypto for a good year or two I barely even noticed the peak of 2019. Anyways mid-late 2019 I got heavy in the stock market I started to see all these guru make insane amount of money just day trading. I was more of an investor type guy but I consumed so much information about day trading and how the psychological aspect is so important, I guess I mastered a bit of that by holding Bitcoin throughout the bear market. Anyways recently in August during the Bitcoin rally I though I had enough skills and decided it was finally time for me to trade Bitcoin specially because it was tradable 24/7 I wanted to start increasing my money and stop sitting on my coins I've had enough of the bear market I thought it was gonna be another P&D episode specially after I started to get deeper in the Crypto community and understood how price moves. I used to be Bitcoin maximalist but then I started to notice the suspicious activity around bitcoin, I came to realize that bitcoin was not the same as it was before, these toxic unregulated entities have turned bitcoin into a giant ponzi playground with everyone being brainwashed by these crypto twitter advocates who are nothing but CZ binance acting puppets. I know it sound crazy but it’s true, the receipt it out to the public, the price is manipulated by Tetther Mafia and these scam exchange. I don’t believe in conspiracy but neither do I believe in coincidence, I witnessed this fraud my own eyes, Whale-alert notified me every time Tetther printed new money and sent it to exchanges and next thing you the price went up. Ever since they added derivative I assume they manipulate the price in spot to liquidate future traders. This whole rally was propt by Tetther mafia using the overall condition in the market as an excuse to attempt artificial FOMO and bring real liquidity in this fake liquidity pool. As the fraud was getting more obvious I started to despise Bitcoin and traded the ponzi based off emotions I neglected the technicals I didn’t have risk management and eventually got liquidated. This is my 3yr+ journey went from 11 btc to 0.. I feel horrible,sad, hopeless and disappointed this was my whole networth vanished in 1-2month. I deprived myself from so many things these last few years hoping my investment grows enough to fund my future. My family still think I’m holding Bitcoins I feel so bad I let them down not sure I'll be able to recover from this. Ps: for those saying Tetther is an old conspiracy trust me this time is different and incomparable to the previous years, the fraud is fully transparent now. Their activity has been very suspicious and concerning lately I’m sensing a major exit-scam. this will impact the whole crypto space because this unbacked counterfeit USD holds most if not all the order book liquidity.
Usually, bull markets attract a lot of new investors - although speculators should be the right word here - and as usual, a lot of them are going to be crushed a way or another. First, before putting a single dollar, euro or whatever in the market, you should read a lot to know exactly what you're looking for. Are you here for the tech and/or the cypherpunk ethos ? Great, there's lot of resources out there (my links are cleaned but as always, do your due diligence) :
The Bitcoin Whitepaper, the one and only : bitcoin.org/bitcoin.pdf Since I'm linking to bitcoin.org, friendly reminder to avoid bitcoin.com, owned by a former supporter now con-artist Roger Ver.
Andreas Antonopoulos website : https://aantonop.com Andreas is one of best guys able to educate on bitcoin and its properties, for free, which helps.
Jameson Lopp website : lopp.net Jameson is a member of Bitcoin Core, cypherpunk, also able to educate a lot. His website is full of free resources and other links. You'll have a lot to read.
Hal Finney : he's unfortunately dead but I would advise to read about Hal Finney, the first to receive bitcoin Satoshi. A great cryptographer, the inventor of the first reusable PoW and one of the first bitcoin supporters. You'll be able to find his messages on this old forum Bitcoin Talk, by the way you'll be able to find the first chats about bitcoin on this forum bitcointalk.org
Monero website : getmonero.org Yep, I know it's gonna be controversial to post an altcoin link but personally, I think that Monero (aka XMR) is the only other coin with a big cypherpunk community, decentralized, and able to help newcomers with a great sense of responsibility, since the ethos here is to save privacy.
What Bitcoin Did : of course, Peter is controversial but I love him and I find his former blog and his podcasts very needed because he doesn't oversell himself. Pete knows that he's not a tech guy (like many of us) and just wants to spread the word, I think he does a good job with this.
Now, you've read and you want to put some skin in the game. Several exchanges are acceptable, a lot of aren't, be careful and assume that none really are (know that I won't post any ref links) :
to me, the best, although it's UI is quite old : Kraken €/$/pound/swiss franc on-off ramp
Coinbase and Coinbase Pro Difficult not to mention Coinbase, although I can't stand Brian Armstrong and the way they are doing their best to support scams currently. You should rather use Coinbase Pro if you have to since the fees are much lower.
Binance Binance came later than the previous ones but has managed to take most of the market. Now, you should remember what I said about being careful.
Huobi The biggest chinese exchange and they work closely with chinese official. Again, careful.
Bittrex Once at the top, now somewhere in the limbs.
A lot of new comers came recently like btse, ftx, feel free to try them while always keeping in mind that once your money is on exchanges, it's not yours anymore.
This was for centralized exchanges aka CEX. Talking about custodial, you'll need wallets to store your (bit)coins. Always try to use non-custodial wallets, which means wallets that give you your private keys. This way, if the software goes down, you can always retreive your money. Now, I won't link to all the existing wallets but will advise you to buy hardware wallets (trezor or ledger but there are others) or to create (on off-gap computers) paper wallets you're able to store safely (against all risks, not only robbery but housefire). You also could use your memory with brain wallets but, my gosh, I wouldn't trust myself. For Bitcoin (or even Litecoin), Electrum software can do a good job (but save your keys). AGAIN, DON'T KEEP YOUR SAVINGS ON AN EXCHANGE Now, about trading : it's been repeated and repeated but don't chase pumps and altcoins. Yep, it's probably the fastest way to make money. It's also the fastest to lose it. I won't lie : I made good money during the 2017-bullrun and I took profits but I also forgot to sell some shitcoins thinking it would keep going up, now I'm still holding these bags (although I don't really care). I know that a lot forgot to take profits. Take profits, always take profits, whatever your strategy is. Don't fall for people trying to sell you their bags, for ICOs trying to sell you a product which isn't released yet and obviously, don't fall for people asking for your private key. Also, know that there's two endgames : accumulating bitcoin or fiat. I'm rather in the first team but whatever your strategy is, take profits. (Yes, I know, some will say accumulating ethereum or something else). It's true that a lot of ethereum holders made a lot of money during the last bullrun (ethereum helped me make money too) but I'm really biased in favor of bitcoin (and monero). So, pick your coin but again, do your due diligence. A lot of people here or there will talk about the best tech, the fact that bitcoin is old and slow. I would need another post to go further on this point but know that a lof of air flight systems are old too but reliable. Trustless and reliable is the point here. This is the post from someone who bought bitcoin seven or six years ago, who lost part of them, who spent part of them (but don't regret this at all), who is still learning and I hope it will help others, although it would need a book to be complete.
What is the best cryptocurrency to invest in right now?
What is the best cryptocurrency to invest in right now?
Traders worry every day about which cryptocurrency to invest in. The crypto market, however, is still difficult to predict. There is no simple answer as to which coins will win the race in 2020. The guarantee: Bitcoin Bitcoin will always be a good investment. Satoshi Nakamoto’s invention continues to lead in terms of market capitalization and trade volume. Almost every crypto exchange can trade Bitcoin and it is the cryptocurrency that is used the most. If you can or just want to invest in a single cryptocurrency, Bitcoin is always a good choice. The first true peer-to-peer currency is still the number 1 cryptocurrencies. So far, there is no indication that Bitcoin will be thrown from the throne in the foreseeable future. The next Bitcoin Halving will also take place in 2020. This means that fewer coins are distributed during mining. The available amount grows more slowly, so that every single coin becomes more valuable as soon as the demand increases. Many investors expect price increases after halving. It is not guaranteed that Bitcoin will experience the biggest growth in 2020. But it’s the most stable cryptocurrency to invest so far. Advantages: – Strongest market dominance, largest trading volume – The most widely used cryptocurrency worldwide – Secure facility Bitcoin alternatives Bitcoin clones could also be a safe investment: cryptocurrencies such as Bitcoin Cash (BCH), Bitcoin Gold (BTG), Litecoin (LTC) or Bitcoin SV (BSV). These cryptocurrencies are mostly faster and more technically advanced than Bitcoin, but will not be able to break its market dominance in the foreseeable future. They have the same purpose: digital means of payment for the Internet. Your prices often move parallel to the Bitcoin price, but can also rise or fall with a time delay. Some of them have the potential to grow faster than their template, but it is not guaranteed. – Good alternative to diversification – Potential for big price gains Binance Coin (BNB) The Binance Coin (BNB) is the cryptocurrency of the largest exchange in the world: Binance. The Exchange has expanded considerably in recent years and plans to continue doing so in 2020. An investment in the Binance Coin is equivalent to an investment in the Exchange. The Binance Coin can be used to trade on the cryptocurrency exchange. If you buy cryptocurrencies with her, you get discounts on your purchases. Binance coins therefore have a benefit for every trader. Binance will soon start a decentralized exchange called Binance DEX, on which in turn the in-house cryptocurrency can be used as a means of payment. That makes the Binance Coin extremely liquid. Shortly after the start of the cryptocurrency, it was able to get a permanent place in the top 10 largest cryptocurrencies on CoinMarketCap. In 2019, the BNB price tripled. – Extremely liquid cryptocurrency – Currency on the largest exchange: Binance – Could already gain good prices Tron (TRX) Tron is a blockchain platform from Justin Sun, an important figure in the crypto scene. An independent ecosystem for the entertainment industry is to be created on the platform. Every user should be able to upload their own videos, pictures, music, texts etc. without being dependent on companies like YouTube. Basically, it’s a smart contract platform, similar to Ethereum (which is also a good investment). Users can upload data, make it available to other users and write their own smart contracts. Tron now attracts a large number of investors. There is a lot of potential in the project. In 2017, Tron’s price rose from EUR 0.0018 to EUR 0.045. In 2018 and 2019, the cryptocurrency gained more and more ground in the crypto world and is now among the top 15 in terms of market capitalization.
Reviewing the top 50 cryptos as of 09/15/2020 revealed some interesting items to note. Of the 50, only 7 have negative ROI. Algorand has the second highest only to be bested by ZCash. Bitcoin ROI 7,877.04% Ethereum ROI 9000% Tether ROI 0.08% XRP ROI 4,069.93% Polkadot ROI 87.20% Bitcoin Cash ROI -57.41% Binance Coin ROI 9000% Chainlink ROI 7,138.70% Crypto.com Coin ROI 753.54% Litecoin ROI 1,038.67% Bitcoin SV ROI 86.21% Cardano ROI 335.74% EOS ROI 163.89% TRON ROI 1,282.96% USD Coin ROI -0.33% Tezos ROI 440.90% Stellar ROI 2,560.94% Stellar ROI 2,560.94% Monero ROI 3,532.85% Neo ROI 9000% UNUS SED LEO ROI 9.44% yearn.finance ROI 3,411.23% NEM ROI 9000% Huobi Token ROI 221.13% Cosmos ROI -22.64% UMA ROI 1,023.37% VeChain ROI -14.13% Aave ROI 3,941.56% IOTA ROI 9000% Dash ROI 9000% Dai ROI 2.57% Wrapped Bitcoin ROI 208.08% Ethereum Classic ROI 593.27% Zcash ROI -98.60% Ontology ROI -68.73% OMG Network ROI 568.78% TrueUSD ROI 0.12% Maker ROI 1,982.73% THETA ROI 242.81% Synthetix Network Token ROI 942.33% Compound ROI 55.26% Algorand ROI -89.10% OKB ROI 288.81% FTX Token ROI 284.56% Basic Attention Token ROI 46.2% Dogecoin ROI 403.98% Kusama ROI 2,271.36% BitTorrent ROI 181.38% 0x ROI 300.37% Celo ROI 211.42% NXM ROI 515.36% What does this say? To me, it says that this coin was not only overhyped, it was and is completely overvalued as of this date. It has a near -90% ROI. In my opinion, that means early investors didn’t get what they were expecting, the pre-ICO team was way off base, and the valuation was done by persons inexperienced with the crypto space. It’s hard to see how the miss could have been so far off. 77% (approx.) of eligible buyers took advantage of the early refund process. This says a lot about confidence of returns. The auction schedule has changed which now favors early backers/relay nodes in a questionable manner. And there is no information as to the next auction which leaves relay nodes as one of the few mechanisms by which large amounts of coins are introduced into the market. Billions of coins still need to enter the market and the process is to hold off on auctions and allow relay nodes and founders to stabilize the price via timing of the introduction of coins. In short, managed demand for a product that does not have the retail demand to move the price to near introduction price. Wrapped Bitcoin had a 6 month head start and an almost 300% difference in ROI. as far as Zcash, we won’t go there. But it is interesting to note that it uses some of Micali’s work and Zooko Wilcox-O’Hearn did reference prior works by Micali re: the Goldwasser-Micali-Rivest Signature Scheme. I may have to amend my prediction of ETH displacement by several years since it’s very unclear now as to when all coins will be in the market. Think about it, would you invest in a 401k that had a ROI of near -90% ? This isn’t FUD. Where most coins provided a reasonable valuation, Algorand for some odd reason had this ridiculous valuation which exposes the inexperience relative to the crypto space. “Let’s hire some folks, tell them what we FEEL it’s worth, and get some people to market it. Oops looks like we seriously overvalued this thing.” Schedule the auctions back to the original timeline. Let the price be dictated by the market as it needs to be. This will generate the needed demand and the price/valuation will be corrected by market forces and not a select group. Sure some will lose, but some will gain in the sell off. There is no way to moon if a select group regulates the influx of coins without a competing mechanism. This is not financial advice. Do your own research. This post is for entertainment purposes only.
https://preview.redd.it/8ual3ajbcey51.png?width=1000&format=png&auto=webp&s=4101b150f171882152e58bff7a2fb6665f083312 The cryptocurrency market is heating up again in 2020 and the options available for New Zealand Bitcoin traders for where to trade at are more diverse than ever before. Now as well as local platforms, there are a number of international platforms that have been breaking into the New Zealand crypto market for the past few years . We're taking a look at the best Bitcoin platforms for New Zealand traders in 2020, starting with a look at the state of the New Zealand market, before moving on to looking at the international market and its impact this year, and then finished off with a look at the best Bitcoin platforms for New Zealand traders. What is the State of the New Zealand Market? Following the last bull run that ended in December 2017, global crypto markets went through a devastating 2-year bear market that saw prices crash throughout that period. As with the rest of the world, the New Zealand market was no different and also saw large numbers of traders and investors leave the market as they suffered huge losses. However in 2020 there has been renewed hope that there is a new bull run forming globally, with this seeing the New Zealand market expand rapidly throughout the first half of this year. New Zealand Using International Platforms More Often in 2020 One trend that has been seen this year is that New Zealand traders and investors are turning towards international trading platforms that are offering higher trade volumes and more opportunities in comparison to the local counterparts. This is something that has been seen globally and not just within New Zealand, where international trading platforms are moving into many different markets around the world and are growing rapidly as a result. 2020 certainly has been a year for international trading platforms to make a lot of headway into the New Zealand market, with many cryptocurrency users turning towards them this year. New Zealand Positioned to Become a Global Hub for Cryptocurrency Something that has become clear over the last year or two is that New Zealand is now positioning itself as becoming one of the new global hubs in cryptocurrency. In 2020, there are more traders and investors within New Zealand than ever before, with this being largely as a result of the greater exposure of cryptocurrency this year in comparison to others. As trade volumes and the number of users in New Zealand grow, we are seeing more international platforms turn their attention towards New Zealand and the opportunity that presents. What are the Best Bitcoin Platforms for New Zealand Traders?
https://preview.redd.it/ydkcghbdcey51.png?width=1000&format=png&auto=webp&s=3386dba81a45a8aca4315cc56bedbfbfdd47021e PrimeXBT is the world's largest multi-asset margin trading platform and has grown rapidly over the past few years since it's launch in 2018 to today managing up to $3.6 billion worth of global trade each and every day. PrimeXBT provides advanced security features such as hardware security modules with rating of FIPS PUB 140-2 Level 3 or higher and cloudflare to mitigate potential distributed denial-of-service (“DDoS”) attacks, with this ensuring that the platform has never been hacked or breached by hackers. PrimeXBT also offers the lowest fees of any major cryptocurrency trading platform on the market with a low flat rate of just 0.05% applied to all trades, irrespective of the assets being traded or of the size of the trade.
https://preview.redd.it/9x21cyjecey51.png?width=460&format=png&auto=webp&s=fda9e744ae932c2ac093ca74f42ee41d9eab0d99 Binance is another platform that has grown rapidly in the past few years since its launch, with this being as a result of Binance offering a wide range of cryptoassets to trade. Binance provides an intuitive platform to use in order to interact with global cryptocurrency markets, and also provides a range of powerful tools and features as well. Binance does charge significantly higher fees than many other trading platforms, and for example, Binance charges anywhere up to 5 times as much as PrimeXBT in order to trade, with this being an important consideration to take into account. In Summary In 2020, we have seen New Zealand traders and investors moving towards using international trading platforms as they become more prevalent and as the services that they provide become significantly more advanced than other platforms. Two good examples of this are the growth of PrimeXBT and Binance within the New Zealand market, with this growth being mirrored in many different areas of the world in 2020 as well. To learn more about PrimeXBT and Binance, the features and tools they both provide, and the advantages of using these top-tier international platforms in the Bitcoin and cryptocurrency markets, check out PrimeXBT and Binance.
Porsche turns to Circularise’s blockchain to track plastics used in its vehicles.
Binance Uganda is shutting down, following the fate of its Jersey operation.
Hong Kong plans to ban retail investors from buying crypto.
Other notable events include: - Over 4 million transactions totaling more than 2 billion yuan ($299 million) have been conducted using China’s digital yuan - The U.S. government is suing for the forfeiture of thousands of bitcoins, totaling more than $1 billion, that it seized on Tuesday. Also, be sure to check out top altcoin gainers and losers of the week! Digital transfers Over 4 million transactions totaling more than 2 billion yuan ($299 million) have been conducted using China’s digital yuan, Yi Gang, governor of the People’s Bank of China, said. Speaking at the Hong Kong Fintech Week conference on Monday, Yi said the COVID-19 crisis has also accelerated the need for contactless banking, creating challenges for central banks looking to balance consumer needs and safety. That said, the central banker also played down the prospect of an imminent launch, saying the digital yuan project is still in the early stages. $1B BTC forfeiture The U.S. government is suing for the forfeiture of thousands of bitcoins, totaling more than $1 billion, that it seized on Tuesday. These bitcoins are said by the U.S. Department of Justice to be connected with the Silk Road marketplace. The address holding the bitcoins has been dormant since 2015, when the coins were transferred to now defunct crypto exchange BTC-e. According to Bloomberg, authorities seized the funds from an unknown hacker who had gained access to the address. The BTC are now likely to be auctioned, reintroducing them to the market supply. Near equivalent amounts of bitcoin gold, bitcoin sv and bitcoin cash were also recovered from the address. https://preview.redd.it/vwttlvoqi8y51.jpg?width=1200&format=pjpg&auto=webp&s=a04b790175ac9cafb09876d58af02b6fc082e98f
How are bitcoin and cryptocurrency markets responding to Biden’s new government?
Today, the US stock markets are reopening for the first time after the election results have become known. Some still question the election results, but American media and the Associated Press have definitively named Joe Biden as the new president. It is now up to the market and analysts to determine what a Biden presidency could mean for cryptocurrency. Most analysts seem to prefer a president who says nothing about crypto to a president who belittles bitcoin on twitter. Trump and Mnuchin negative on bitcoin Qiao Wang, the big man at the DeFi Alliance decentralized financing project, applauded Trump’s loss, noting that the president had tweeted negatively about bitcoin and libra in the past: https://twitter.com/chris_sun/status/1325265604220121088 Meanwhile, Galaxy Digital investor Mike Novogratz said a democratic government would be good for crypto, saying an ongoing stimulus program would bolster bitcoin’s anti-inflationary narrative: https://twitter.com/novogratz/status/1323973781619134465 The prices of bitcoin and other cryptocurrency’s depend very much on the strength / weakness of the US dollar. So it is interesting to follow what Biden’s plans are for additional stimulus measures, due to the economic damage caused by the coronavirus. There is also speculation about the upcoming government’s plans and opinions on cryptocurrency. Compound’s Jake Chervinsky noted that the opinion of the puppets that Biden puts in key positions is more important than the opinion of Biden himself. https://twitter.com/jchervinsky/status/1325152892324519936 Gary Gensler is such a “puppet.” He is the former chairman of the CFTC and then appointed by Obama. He is expected to be part of Biden’s transition team. Gensler has spoken positively about bitcoin in the past, and is known for his tough enforcement of Wall Street regulations in the wake of the 2008 financial crisis. Another candidate is economist Lael Brainard. He has done extensive work for the US Central Bank (FED) and, together with MIT, led an investigation of CBDCs. Brainard is expected on the deposition of the Minister of Finance. We still have to wait for an initial response, the stock markets open today at 2:30 PM. A fierce initial reaction could have its aftermath in the crypto markets.
$1,000 invested in Top 10 Cryptos of 2019 now worth $1,260 (UP +26%)
EXPERIMENT - Tracking Top 10 Cryptos of 2019 - Month Eighteen - UP +26% See the full blog post with all the tableshere. tl;dr - Tether (as it's designed to do) holds its ground, all others finish the month in negative territory. Tron finishes June in second place, down -2%. BSV loses nearly 25% of value in June. Overall, since January 2019, BTC in lead, ETH takes over second place, XRP still worst performing. The 2019 Top 10 is up +26% almost equal to the the gains of the S&P 500 over the same time period (+24%).
According to a June article citing unnamed sources, which two FinTech companies are planning to allow their users to buy and sell crypto directly?
A) Paypal and Venmo B) Square and Cashapp C) Robinhood and Revolut D) Sofi and Coinbase Scroll down for the answer.
Ranking and June Winners and Losers
XRP and Stellar slipped one place each in the rankings in June, now at #4 and #14 respectively. EOS fell two spots to #11 and joins Stellar and Tron as the only three cryptos to have dropped out of the 2019 Top Ten since January 1st, 2019. They have been replaced by Binance Coin, Cardano, and newcomer CRO. Tether was the only crypto to move up in rank in June. Not a good sign when Tether is the only crypto to move up. Not a good sign when Tether enters the Top 3. June Winners – Tether. Second comes Tron, which basically held its ground at -2%. June Losers – BSV lost -23% of its value in June making it the worst performing of the 2019 Top Ten portfolio. EOS had a rough month as well, down -17%, dropping two spots in the rankings, and falling out of the Top Ten. If you’re keeping score, here is tally of which coins have the most monthly wins and loses during the first 18 months of the 2019 Top Ten Experiment: Tether is still in the lead with six monthly victories followed by BSV in second place with three. BSV also holds the most monthly losses, finishing last in seven out of eighteen months. The only crypto not to win a month so far? XRP. (In fairness, XRP has also not lost any month yet).
Overall update – BTC in lead, ETH takes over second place, XRP still worst performing
BTC is out front for the second straight month and ETH has taken over second place from BSV. Ahead until April, BSV has simply not keep up with the pack over the last two months. Bitcoin is up +144% since January 2019. The initial $100 investment in BTC is currently worth $249. Eighteen months in, 50% of the 2019 Top Ten cryptos are in the green since the beginning of the experiment. The other five cryptos are either flat or in negative territory, including last place XRP (down -50% since January 2019).
Total Market Cap for the entire cryptocurrency sector:
The crypto market as a whole is down about $20B in June, but still up +106% since January 2019.
BitDom finally wobbled in June, but not by much – it’s been in a very familiar zone for months now, indicating a lack of excitement (or at least a low risk tolerance) for altcoins. Taking a wider view, the Bitcoin Dominance range since the beginning of the experiment in January 2019 has ranged between 50%-70%.
Overall return on investment since January 1st, 2019:
The 2019 Top Ten Portfolio lost almost $175 in June. After the initial $1000 investment, the 2019 group of Top Ten cryptos is worth $1,259. That’s up about +26%. Here’s a look at the ROI over the life of the first 18 months of the 2019 Top Ten Index Fund experiment, month by month: 18 months of ROI, mostly green Unlike the completely red table you’ll see in the 2018 Top Ten Experiment, the 2019 crypto table is almost all green. The first month was the lowest point (-9%), and the highest point (+114%) was May 2019. How does the 2019 Top Ten Index Fund Portfolio compare to the parallel projects?
Taking the three portfolios together, here’s the bottom bottom bottom line: After a $3000 investment in the 2018, 2019, and 2020 Top Ten Cryptocurrencies, the combined portfolios are worth $2,710. That’s down about -10% for the three combined portfolios. Last month that figure was +4%. 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. Here’s a new table to help visualize the progress of the combined portfolios: ROI of all three combined portfolios - not exactly inspiring How do crypto returns compare to traditional markets?
Comparison to S&P 500:
Good thing I’m tracking the S&P 500 as part of my experiment to have a comparison point with other popular investments options. Even with unemployment, protests, and COVID, the US market continued to rebound in June. It’s now up +24% in the last 18 months. The initial $1k investment I put into crypto would be worth $1,240 had it been redirected to the S&P 500 in January 2019. As a reminder (or just scroll up) the 2019 Top Ten portfolio is returning +26% over last 18 months, just about equal to the return of the S&P 500 over the same time period. Just last month the ROI of the 2019 Top Ten crypto portfolio was nearly double the S&P 500 since January 1st, 2019. But what if I took the same world’s-slowest-dollar-cost-averaging/$1,000-per-year-in-January approach with the S&P 500? It would yield the following:
$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 that compares the ROI of the combined crypto portfolios to a hypothetical similar approach with the S&P 500: We see in June 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.
Since January 2019, the crypto market as a whole has gained +106% compared to the 2019 Top Ten Crypto Portfolio which has gained +26%. That’s an 80% gap. At this point in the 2019 Experiment, an investor would have done much better picking different cryptos or investing in the entire market instead of focusing only on the 2019 Top Ten. Over the course of the first 18 months of tracking the 2019 Top Ten, there have been instances this was a winning strategy, but the cases have been few and far between. The 2018 Top Ten portfolio, on the other hand, has never outperformed the overall market, at least not in the first thirty months of that Experiment. And for the most recent 2020 Top Ten group? The opposite had been true: the 2020 Top Ten had easily outperformed the overall market 100% of the time…up until the last two months.
As the world continues to battle COVID, traditional markets seem to be recovering. Will crypto make a significant move in the second half of 2020? Final word: Stay safe and take care of each other. 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 recently launched 2020 Top Ten Experiment.
And the Answer is…
A) Paypal and Venmo According to a Coindesk report in June, three sources familiar with the matter say that Paypal and Paypal-owned Venmo are planning to allow their users to buy and sell crypto. Paypal has declined to comment.
Can we talk about the bots pumping articles out right now
Just browse 'New' of either this sub or bitcoin Its apparent that hundreds of bots are up voting and spreading positive news articles about bitcoin and other coins, Yes ill make money BUT aren't we in crypto for the long haul? im more interested in making money over the long term then to watch these artificial pumps and dumps Like most investors are holing tezo until atleast September 9th when the binance deal goes public But thats a natural pump, more people are going to be buying it because alot of people only use binance. Not because some whale and his army of bots want to make a quick buck.
Summary: Everyone knows that when you give your assets to someone else, they always keep them safe. If this is true for individuals, it is certainly true for businesses. Custodians always tell the truth and manage funds properly. They won't have any interest in taking the assets as an exchange operator would. Auditors tell the truth and can't be misled. That's because organizations that are regulated are incapable of lying and don't make mistakes. First, some background. Here is a summary of how custodians make us more secure: Previously, we might give Alice our crypto assets to hold. There were risks:
Alice might take the assets and disappear.
Alice might spend the assets and pretend that she still has them (fractional model).
Alice might store the assets insecurely and they'll get stolen.
Alice might give the assets to someone else by mistake or by force.
Alice might lose access to the assets.
But "no worries", Alice has a custodian named Bob. Bob is dressed in a nice suit. He knows some politicians. And he drives a Porsche. "So you have nothing to worry about!". And look at all the benefits we get:
Alice can't take the assets and disappear (unless she asks Bob or never gives them to Bob).
Alice can't spend the assets and pretend that she still has them. (Unless she didn't give them to Bob or asks him for them.)
Alice can't store the assets insecurely so they get stolen. (After all - she doesn't have any control over the withdrawal process from any of Bob's systems, right?)
Alice can't give the assets to someone else by mistake or by force. (Bob will stop her, right Bob?)
Alice can't lose access to the funds. (She'll always be present, sane, and remember all secrets, right?)
See - all problems are solved! All we have to worry about now is:
Bob might take the assets and disappear.
Bob might spend the assets and pretend that he still has them (fractional model).
Bob might store the assets insecurely and they'll get stolen.
Bob might give the assets to someone else by mistake or by force.
Bob might lose access to the assets.
It's pretty simple. Before we had to trust Alice. Now we only have to trust Alice, Bob, and all the ways in which they communicate. Just think of how much more secure we are! "On top of that", Bob assures us, "we're using a special wallet structure". Bob shows Alice a diagram. "We've broken the balance up and store it in lots of smaller wallets. That way", he assures her, "a thief can't take it all at once". And he points to a historic case where a large sum was taken "because it was stored in a single wallet... how stupid". "Very early on, we used to have all the crypto in one wallet", he said, "and then one Christmas a hacker came and took it all. We call him the Grinch. Now we individually wrap each crypto and stick it under a binary search tree. The Grinch has never been back since." "As well", Bob continues, "even if someone were to get in, we've got insurance. It covers all thefts and even coercion, collusion, and misplaced keys - only subject to the policy terms and conditions." And with that, he pulls out a phone-book sized contract and slams it on the desk with a thud. "Yep", he continues, "we're paying top dollar for one of the best policies in the country!" "Can I read it?' Alice asks. "Sure," Bob says, "just as soon as our legal team is done with it. They're almost through the first chapter." He pauses, then continues. "And can you believe that sales guy Mike? He has the same year Porsche as me. I mean, what are the odds?" "Do you use multi-sig?", Alice asks. "Absolutely!" Bob replies. "All our engineers are fully trained in multi-sig. Whenever we want to set up a new wallet, we generate 2 separate keys in an air-gapped process and store them in this proprietary system here. Look, it even requires the biometric signature from one of our team members to initiate any withdrawal." He demonstrates by pressing his thumb into the display. "We use a third-party cloud validation API to match the thumbprint and authorize each withdrawal. The keys are also backed up daily to an off-site third-party." "Wow that's really impressive," Alice says, "but what if we need access for a withdrawal outside of office hours?" "Well that's no issue", Bob says, "just send us an email, call, or text message and we always have someone on staff to help out. Just another part of our strong commitment to all our customers!" "What about Proof of Reserve?", Alice asks. "Of course", Bob replies, "though rather than publish any blockchain addresses or signed transaction, for privacy we just do a SHA256 refactoring of the inverse hash modulus for each UTXO nonce and combine the smart contract coefficient consensus in our hyperledger lightning node. But it's really simple to use." He pushes a button and a large green checkmark appears on a screen. "See - the algorithm ran through and reserves are proven." "Wow", Alice says, "you really know your stuff! And that is easy to use! What about fiat balances?" "Yeah, we have an auditor too", Bob replies, "Been using him for a long time so we have quite a strong relationship going! We have special books we give him every year and he's very efficient! Checks the fiat, crypto, and everything all at once!" "We used to have a nice offline multi-sig setup we've been using without issue for the past 5 years, but I think we'll move all our funds over to your facility," Alice says. "Awesome", Bob replies, "Thanks so much! This is perfect timing too - my Porsche got a dent on it this morning. We have the paperwork right over here." "Great!", Alice replies. And with that, Alice gets out her pen and Bob gets the contract. "Don't worry", he says, "you can take your crypto-assets back anytime you like - just subject to our cancellation policy. Our annual management fees are also super low and we don't adjust them often". How many holes have to exist for your funds to get stolen? Just one. Why are we taking a powerful offline multi-sig setup, widely used globally in hundreds of different/lacking regulatory environments with 0 breaches to date, and circumventing it by a demonstrably weak third party layer? And paying a great expense to do so? If you go through the list of breaches in the past 2 years to highly credible organizations, you go through the list of major corporate frauds (only the ones we know about), you go through the list of all the times platforms have lost funds, you go through the list of times and ways that people have lost their crypto from identity theft, hot wallet exploits, extortion, etc... and then you go through this custodian with a fine-tooth comb and truly believe they have value to add far beyond what you could, sticking your funds in a wallet (or set of wallets) they control exclusively is the absolute worst possible way to take advantage of that security. The best way to add security for crypto-assets is to make a stronger multi-sig. With one custodian, what you are doing is giving them your cryptocurrency and hoping they're honest, competent, and flawlessly secure. It's no different than storing it on a really secure exchange. Maybe the insurance will cover you. Didn't work for Bitpay in 2015. Didn't work for Yapizon in 2017. Insurance has never paid a claim in the entire history of cryptocurrency. But maybe you'll get lucky. Maybe your exact scenario will buck the trend and be what they're willing to cover. After the large deductible and hopefully without a long and expensive court battle. And you want to advertise this increase in risk, the lapse of judgement, an accident waiting to happen, as though it's some kind of benefit to customers ("Free institutional-grade storage for your digital assets.")? And then some people are writing to the OSC that custodians should be mandatory for all funds on every exchange platform? That this somehow will make Canadians as a whole more secure or better protected compared with standard air-gapped multi-sig? On what planet? Most of the problems in Canada stemmed from one thing - a lack of transparency. If Canadians had known what a joke Quadriga was - it wouldn't have grown to lose $400m from hard-working Canadians from coast to coast to coast. And Gerald Cotten would be in jail, not wherever he is now (at best, rotting peacefully). EZ-BTC and mister Dave Smilie would have been a tiny little scam to his friends, not a multi-million dollar fraud. Einstein would have got their act together or been shut down BEFORE losing millions and millions more in people's funds generously donated to criminals. MapleChange wouldn't have even been a thing. And maybe we'd know a little more about CoinTradeNewNote - like how much was lost in there. Almost all of the major losses with cryptocurrency exchanges involve deception with unbacked funds. So it's great to see transparency reports from BitBuy and ShakePay where someone independently verified the backing. The only thing we don't have is:
ANY CERTAINTY BALANCES WEREN'T EXCLUDED. Quadriga's largest account was $70m. 80% of funds are in 20% of accounts (Pareto principle). All it takes is excluding a few really large accounts - and nobody's the wiser. A fractional platform can easily pass any audit this way.
ANY VISIBILITY WHATSOEVER INTO THE CUSTODIANS. BitBuy put out their report before moving all the funds to their custodian and ShakePay apparently can't even tell us who the custodian is. That's pretty important considering that basically all of the funds are now stored there.
ANY IDEA ABOUT THE OTHER EXCHANGES. In order for this to be effective, it has to be the norm. It needs to be "unusual" not to know. If obscurity is the norm, then it's super easy for people like Gerald Cotten and Dave Smilie to blend right in.
It's not complicated to validate cryptocurrency assets. They need to exist, they need to be spendable, and they need to cover the total balances. There are plenty of credible people and firms across the country that have the capacity to reasonably perform this validation. Having more frequent checks by different, independent, parties who publish transparent reports is far more valuable than an annual check by a single "more credible/official" party who does the exact same basic checks and may or may not publish anything. Here's an example set of requirements that could be mandated:
First report within 1 month of launching, another within 3 months, and further reports at minimum every 6 months thereafter.
No auditor can be repeated within a 12 month period.
All reports must be public, identifying the auditor and the full methodology used.
All auditors must be independent of the firm being audited with no conflict of interest.
Reports must include the percentage of each asset backed, and how it's backed.
The auditor publishes a hash list, which lists a hash of each customer's information and balances that were included. Hash is one-way encryption so privacy is fully preserved. Every customer can use this to have 100% confidence they were included.
If we want more extensive requirements on audits, these should scale upward based on the total assets at risk on the platform, and whether the platform has loaned their assets out.
There are ways to structure audits such that neither crypto assets nor customer information are ever put at risk, and both can still be properly validated and publicly verifiable. There are also ways to structure audits such that they are completely reasonable for small platforms and don't inhibit innovation in any way. By making the process as reasonable as possible, we can completely eliminate any reason/excuse that an honest platform would have for not being audited. That is arguable far more important than any incremental improvement we might get from mandating "the best of the best" accountants. Right now we have nothing mandated and tons of Canadians using offshore exchanges with no oversight whatsoever. Transparency does not prove crypto assets are safe. CoinTradeNewNote, Flexcoin ($600k), and Canadian Bitcoins ($100k) are examples where crypto-assets were breached from platforms in Canada. All of them were online wallets and used no multi-sig as far as any records show. This is consistent with what we see globally - air-gapped multi-sig wallets have an impeccable record, while other schemes tend to suffer breach after breach. We don't actually know how much CoinTrader lost because there was no visibility. Rather than publishing details of what happened, the co-founder of CoinTrader silently moved on to found another platform - the "most trusted way to buy and sell crypto" - a site that has no information whatsoever (that I could find) on the storage practices and a FAQ advising that “[t]rading cryptocurrency is completely safe” and that having your own wallet is “entirely up to you! You can certainly keep cryptocurrency, or fiat, or both, on the app.” Doesn't sound like much was learned here, which is really sad to see. It's not that complicated or unreasonable to set up a proper hardware wallet. Multi-sig can be learned in a single course. Something the equivalent complexity of a driver's license test could prevent all the cold storage exploits we've seen to date - even globally. Platform operators have a key advantage in detecting and preventing fraud - they know their customers far better than any custodian ever would. The best job that custodians can do is to find high integrity individuals and train them to form even better wallet signatories. Rather than mandating that all platforms expose themselves to arbitrary third party risks, regulations should center around ensuring that all signatories are background-checked, properly trained, and using proper procedures. We also need to make sure that signatories are empowered with rights and responsibilities to reject and report fraud. They need to know that they can safely challenge and delay a transaction - even if it turns out they made a mistake. We need to have an environment where mistakes are brought to the surface and dealt with. Not one where firms and people feel the need to hide what happened. In addition to a knowledge-based test, an auditor can privately interview each signatory to make sure they're not in coercive situations, and we should make sure they can freely and anonymously report any issues without threat of retaliation. A proper multi-sig has each signature held by a separate person and is governed by policies and mutual decisions instead of a hierarchy. It includes at least one redundant signature. For best results, 3of4, 3of5, 3of6, 4of5, 4of6, 4of7, 5of6, or 5of7. History has demonstrated over and over again the risk of hot wallets even to highly credible organizations. Nonetheless, many platforms have hot wallets for convenience. While such losses are generally compensated by platforms without issue (for example Poloniex, Bitstamp, Bitfinex, Gatecoin, Coincheck, Bithumb, Zaif, CoinBene, Binance, Bitrue, Bitpoint, Upbit, VinDAX, and now KuCoin), the public tends to focus more on cases that didn't end well. Regardless of what systems are employed, there is always some level of risk. For that reason, most members of the public would prefer to see third party insurance. Rather than trying to convince third party profit-seekers to provide comprehensive insurance and then relying on an expensive and slow legal system to enforce against whatever legal loopholes they manage to find each and every time something goes wrong, insurance could be run through multiple exchange operators and regulators, with the shared interest of having a reputable industry, keeping costs down, and taking care of Canadians. For example, a 4 of 7 multi-sig insurance fund held between 5 independent exchange operators and 2 regulatory bodies. All Canadian exchanges could pay premiums at a set rate based on their needed coverage, with a higher price paid for hot wallet coverage (anything not an air-gapped multi-sig cold wallet). Such a model would be much cheaper to manage, offer better coverage, and be much more reliable to payout when needed. The kind of coverage you could have under this model is unheard of. You could even create something like the CDIC to protect Canadians who get their trading accounts hacked if they can sufficiently prove the loss is legitimate. In cases of fraud, gross negligence, or insolvency, the fund can be used to pay affected users directly (utilizing the last transparent balance report in the worst case), something which private insurance would never touch. While it's recommended to have official policies for coverage, a model where members vote would fully cover edge cases. (Could be similar to the Supreme Court where justices vote based on case law.) Such a model could fully protect all Canadians across all platforms. You can have a fiat coverage governed by legal agreements, and crypto-asset coverage governed by both multi-sig and legal agreements. It could be practical, affordable, and inclusive. Now, we are at a crossroads. We can happily give up our freedom, our innovation, and our money. We can pay hefty expenses to auditors, lawyers, and regulators year after year (and make no mistake - this cost will grow to many millions or even billions as the industry grows - and it will be borne by all Canadians on every platform because platforms are not going to eat up these costs at a loss). We can make it nearly impossible for any new platform to enter the marketplace, forcing Canadians to use the same stagnant platforms year after year. We can centralize and consolidate the entire industry into 2 or 3 big players and have everyone else fail (possibly to heavy losses of users of those platforms). And when a flawed security model doesn't work and gets breached, we can make it even more complicated with even more people in suits making big money doing the job that blockchain was supposed to do in the first place. We can build a system which is so intertwined and dependent on big government, traditional finance, and central bankers that it's future depends entirely on that of the fiat system, of fractional banking, and of government bail-outs. If we choose this path, as history has shown us over and over again, we can not go back, save for revolution. Our children and grandchildren will still be paying the consequences of what we decided today. Or, we can find solutions that work. We can maintain an open and innovative environment while making the adjustments we need to make to fully protect Canadian investors and cryptocurrency users, giving easy and affordable access to cryptocurrency for all Canadians on the platform of their choice, and creating an environment in which entrepreneurs and problem solvers can bring those solutions forward easily. None of the above precludes innovation in any way, or adds any unreasonable cost - and these three policies would demonstrably eliminate or resolve all 109 historic cases as studied here - that's every single case researched so far going back to 2011. It includes every loss that was studied so far not just in Canada but globally as well. Unfortunately, finding answers is the least challenging part. Far more challenging is to get platform operators and regulators to agree on anything. My last post got no response whatsoever, and while the OSC has told me they're happy for industry feedback, I believe my opinion alone is fairly meaningless. This takes the whole community working together to solve. So please let me know your thoughts. Please take the time to upvote and share this with people. Please - let's get this solved and not leave it up to other people to do. Facts/background/sources (skip if you like):
The inspiration for the paragraph about splitting wallets was an actual quote from a Canadian company providing custodial services in response to the OSC consultation paper: "We believe that it will be in the in best interests of investors to prohibit pooled crypto assets or ‘floats’. Most Platforms pool assets, citing reasons of practicality and expense. The recent hack of the world’s largest Platform – Binance – demonstrates the vulnerability of participants’ assets when such concessions are made. In this instance, the Platform’s entire hot wallet of Bitcoins, worth over $40 million, was stolen, facilitated in part by the pooling of client crypto assets." "the maintenance of participants (and Platform) crypto assets across multiple wallets distributes the related risk and responsibility of security - reducing the amount of insurance coverage required and making insurance coverage more readily obtainable". For the record, their reply also said nothing whatsoever about multi-sig or offline storage.
In addition to the fact that the $40m hack represented only one "hot wallet" of Binance, and they actually had the vast majority of assets in other wallets (including mostly cold wallets), multiple real cases have clearly demonstrated that risk is still present with multiple wallets. Bitfinex, VinDAX, Bithumb, Altsbit, BitPoint, Cryptopia, and just recently KuCoin all had multiple wallets breached all at the same time, and may represent a significantly larger impact on customers than the Binance breach which was fully covered by Binance. To represent that simply having multiple separate wallets under the same security scheme is a comprehensive way to reduce risk is just not true.
Private insurance has historically never covered a single loss in the cryptocurrency space (at least, not one that I was able to find), and there are notable cases where massive losses were not covered by insurance. Bitpay in 2015 and Yapizon in 2017 both had insurance policies that didn't pay out during the breach, even after a lengthly court process. The same insurance that ShakePay is presently using (and announced to much fanfare) was describe by their CEO himself as covering “physical theft of the media where the private keys are held,” which is something that has never historically happened. As was said with regard to the same policy in 2018 - “I don’t find it surprising that Lloyd’s is in this space,” said Johnson, adding that to his mind the challenge for everybody is figuring out how to structure these policies so that they are actually protective. “You can create an insurance policy that protects no one – you know there are so many caveats to the policy that it’s not super protective.”
The most profitable policy for a private insurance company is one with the most expensive premiums that they never have to pay a claim on. They have no inherent incentive to take care of people who lost funds. It's "cheaper" to take the reputational hit and fight the claim in court. The more money at stake, the more the insurance provider is incentivized to avoid payout. They're not going to insure the assets unless they have reasonable certainty to make a profit by doing so, and they're not going to pay out a massive sum unless it's legally forced. Private insurance is always structured to be maximally profitable to the insurance provider.
The circumvention of multi-sig was a key factor in the massive Bitfinex hack of over $60m of bitcoin, which today still sits being slowly used and is worth over $3b. While Bitfinex used a qualified custodian Bitgo, which was and still is active and one of the industry leaders of custodians, and they set up 2 of 3 multi-sig wallets, the entire system was routed through Bitfinex, such that Bitfinex customers could initiate the withdrawals in a "hot" fashion. This feature was also a hit with the hacker. The multi-sig was fully circumvented.
Bitpay in 2015 was another example of a breach that stole 5,000 bitcoins. This happened not through the exploit of any system in Bitpay, but because the CEO of a company they worked with got their computer hacked and the hackers were able to request multiple bitcoin purchases, which Bitpay honoured because they came from the customer's computer legitimately. Impersonation is a very common tactic used by fraudsters, and methods get more extreme all the time.
A notable case in Canada was the Canadian Bitcoins exploit. Funds were stored on a server in a Rogers Data Center, and the attendee was successfully convinced to reboot the server "in safe mode" with a simple phone call, thus bypassing the extensive security and enabling the theft.
The very nature of custodians circumvents multi-sig. This is because custodians are not just having to secure the assets against some sort of physical breach but against any form of social engineering, modification of orders, fraudulent withdrawal attempts, etc... If the security practices of signatories in a multi-sig arrangement are such that the breach risk of one signatory is 1 in 100, the requirement of 3 independent signatures makes the risk of theft 1 in 1,000,000. Since hackers tend to exploit the weakest link, a comparable custodian has to make the entry and exit points of their platform 10,000 times more secure than one of those signatories to provide equivalent protection. And if the signatories beef up their security by only 10x, the risk is now 1 in 1,000,000,000. The custodian has to be 1,000,000 times more secure. The larger and more complex a system is, the more potential vulnerabilities exist in it, and the fewer people can understand how the system works when performing upgrades. Even if a system is completely secure today, one has to also consider how that system might evolve over time or work with different members.
By contrast, offline multi-signature solutions have an extremely solid record, and in the entire history of cryptocurrency exchange incidents which I've studied (listed here), there has only been one incident (796 exchange in 2015) involving an offline multi-signature wallet. It happened because the customer's bitcoin address was modified by hackers, and the amount that was stolen ($230k) was immediately covered by the exchange operators. Basically, the platform operators were tricked into sending a legitimate withdrawal request to the wrong address because hackers exploited their platform to change that address. Such an issue would not be prevented in any way by the use of a custodian, as that custodian has no oversight whatsoever to the exchange platform. It's practical for all exchange operators to test large withdrawal transactions as a general policy, regardless of what model is used, and general best practice is to diagnose and fix such an exploit as soon as it occurs.
False promises on the backing of funds played a huge role in the downfall of Quadriga, and it's been exposed over and over again (MyCoin, PlusToken, Bitsane, Bitmarket, EZBTC, IDAX). Even today, customers have extremely limited certainty on whether their funds in exchanges are actually being backed or how they're being backed. While this issue is not unique to cryptocurrency exchanges, the complexity of the technology and the lack of any regulation or standards makes problems more widespread, and there is no "central bank" to come to the rescue as in the 2008 financial crisis or during the great depression when "9,000 banks failed".
In addition to fraudulent operations, the industry is full of cases where operators have suffered breaches and not reported them. Most recently, Einstein was the largest case in Canada, where ongoing breaches and fraud were perpetrated against the platform for multiple years and nobody found out until the platform collapsed completely. While fraud and breaches suck to deal with, they suck even more when not dealt with. Lack of visibility played a role in the largest downfalls of Mt. Gox, Cryptsy, and Bitgrail. In some cases, platforms are alleged to have suffered a hack and keep operating without admitting it at all, such as CoinBene.
It surprises some to learn that a cryptographic solution has already existed since 2013, and gained widespread support in 2014 after Mt. Gox. Proof of Reserves is a full cryptographic proof that allows any customer using an exchange to have complete certainty that their crypto-assets are fully backed by the platform in real-time. This is accomplished by proving that assets exist on the blockchain, are spendable, and fully cover customer deposits. It does not prove safety of assets or backing of fiat assets.
If we didn't care about privacy at all, a platform could publish their wallet addresses, sign a partial transaction, and put the full list of customer information and balances out publicly. Customers can each check that they are on the list, that the balances are accurate, that the total adds up, and that it's backed and spendable on the blockchain. Platforms who exclude any customer take a risk because that customer can easily check and see they were excluded. So together with all customers checking, this forms a full proof of backing of all crypto assets.
However, obviously customers care about their private information being published. Therefore, a hash of the information can be provided instead. Hash is one-way encryption. The hash allows the customer to validate inclusion (by hashing their own known information), while anyone looking at the list of hashes cannot determine the private information of any other user. All other parts of the scheme remain fully intact. A model like this is in use on the exchange CoinFloor in the UK.
A Merkle tree can provide even greater privacy. Instead of a list of balances, the balances are arranged into a binary tree. A customer starts from their node, and works their way to the top of the tree. For example, they know they have 5 BTC, they plus 1 other customer hold 7 BTC, they plus 2-3 other customers hold 17 BTC, etc... until they reach the root where all the BTC are represented. Thus, there is no way to find the balances of other individual customers aside from one unidentified customer in this case.
Proposals such as this had the backing of leaders in the community including Nic Carter, Greg Maxwell, and Zak Wilcox. Substantial and significant effort started back in 2013, with massive popularity in 2014. But what became of that effort? Very little. Exchange operators continue to refuse to give visibility. Despite the fact this information can often be obtained through trivial blockchain analysis, no Canadian platform has ever provided any wallet addresses publicly. As described by the CEO of Newton "For us to implement some kind of realtime Proof of Reserves solution, which I'm not opposed to, it would have to ... Preserve our users' privacy, as well as our own. Some kind of zero-knowledge proof". Kraken describes here in more detail why they haven't implemented such a scheme. According to professor Eli Ben-Sasson, when he spoke with exchanges, none were interested in implementing Proof of Reserves.
And yet, Kraken's places their reasoning on a page called "Proof of Reserves". More recently, both BitBuy and ShakePay have released reports titled "Proof of Reserves and Security Audit". Both reports contain disclaimers against being audits. Both reports trust the customer list provided by the platform, leaving the open possibility that multiple large accounts could have been excluded from the process. Proof of Reserves is a blockchain validation where customers see the wallets on the blockchain. The report from Kraken is 5 years old, but they leave it described as though it was just done a few weeks ago. And look at what they expect customers to do for validation. When firms represent something being "Proof of Reserve" when it's not, this is like a farmer growing fruit with pesticides and selling it in a farmers market as organic produce - except that these are people's hard-earned life savings at risk here. Platforms are misrepresenting the level of visibility in place and deceiving the public by their misuse of this term. They haven't proven anything.
Fraud isn't a problem that is unique to cryptocurrency. Fraud happens all the time. Enron, WorldCom, Nortel, Bear Stearns, Wells Fargo, Moser Baer, Wirecard, Bre-X, and Nicola are just some of the cases where frauds became large enough to become a big deal (and there are so many countless others). These all happened on 100% reversible assets despite regulations being in place. In many of these cases, the problems happened due to the over-complexity of the financial instruments. For example, Enron had "complex financial statements [which] were confusing to shareholders and analysts", creating "off-balance-sheet vehicles, complex financing structures, and deals so bewildering that few people could understand them". In cryptocurrency, we are often combining complex financial products with complex technologies and verification processes. We are naïve if we think problems like this won't happen. It is awkward and uncomfortable for many people to admit that they don't know how something works. If we want "money of the people" to work, the solutions have to be simple enough that "the people" can understand them, not so confusing that financial professionals and technology experts struggle to use or understand them.
For those who question the extent to which an organization can fool their way into a security consultancy role, HB Gary should be a great example to look at. Prior to trying to out anonymous, HB Gary was being actively hired by multiple US government agencies and others in the private sector (with glowing testimonials). The published articles and hosted professional security conferences. One should also look at this list of data breaches from the past 2 years. Many of them are large corporations, government entities, and technology companies. These are the ones we know about. Undoubtedly, there are many more that we do not know about. If HB Gary hadn't been "outted" by anonymous, would we have known they were insecure? If the same breach had happened outside of the public spotlight, would it even have been reported? Or would HB Gary have just deleted the Twitter posts, brought their site back up, done a couple patches, and kept on operating as though nothing had happened?
In the case of Quadriga, the facts are clear. Despite past experience with platforms such as MapleChange in Canada and others around the world, no guidance or even the most basic of a framework was put in place by regulators. By not clarifying any sort of legal framework, regulators enabled a situation where a platform could be run by former criminal Mike Dhanini/Omar Patryn, and where funds could be held fully unchecked by one person. At the same time, the lack of regulation deterred legitimate entities from running competing platforms and Quadriga was granted a money services business license for multiple years of operation, which gave the firm the appearance of legitimacy. Regulators did little to protect Canadians despite Quadriga failing to file taxes from 2016 onward. The entire administrative team had resigned and this was public knowledge. Many people had suspicions of what was going on, including Ryan Mueller, who forwarded complaints to the authorities. These were ignored, giving Gerald Cotten the opportunity to escape without justice.
There are multiple issues with the SOC II model including the prohibitive cost (you have to find a third party accounting firm and the prices are not even listed publicly on any sites), the requirement of operating for a year (impossible for new platforms), and lack of any public visibility (SOC II are private reports that aren't shared outside the people in suits).
Securities frameworks are expensive. Sarbanes-Oxley is estimated to cost $5.1 million USD/yr for the average Fortune 500 company in the United States. Since "Fortune 500" represents the top 500 companies, that means well over $2.55 billion USD (~$3.4 billion CAD) is going to people in suits. Isn't the problem of trust and verification the exact problem that the blockchain is supposed to solve?
To use Quadriga as justification for why custodians or SOC II or other advanced schemes are needed for platforms is rather silly, when any framework or visibility at all, or even the most basic of storage policies, would have prevented the whole thing. It's just an embarrassment.
We are now seeing regulators take strong action. CoinSquare in Canada with multi-million dollar fines. BitMex from the US, criminal charges and arrests. OkEx, with full disregard of withdrawals and no communication. Who's next?
We have a unique window today where we can solve these problems, and not permanently destroy innovation with unreasonable expectations, but we need to act quickly. This is a unique historic time that will never come again.
Bitcoin is worth more than $ 15,600, Why Suddenly The Price Is Increasing?
Bitcoin is worth more than $ 15,600, the highest level since January 2018. https://preview.redd.it/ix9k84b46lx51.png?width=398&format=png&auto=webp&s=863080fefca01dbd91023c14b7f052910aa69a5e The price of cryptocurrency bitcoin has skyrocketed in recent days to the highest level since January 2018. The absence of the US presidential election result may play a role, but that is not the only reason. In recent days, the price of the BTC rose from roughly $ 13,350 on November 3 to $ 15,700 today, according to data from CoinMarketCap. That is more than 12 percent increase. The price increase was more or less synchronized with the vote count in the United States and the ever-increasing tension in the country. "Uncertainty always encourages people to buy gold, for example. But I don't know if that is positive for bitcoin," analyzes Durk Veenstra, RTL Z stock market commentator. "Everything is going up," he adds another comment on the price increase. Investors are thus responding to the Bank of England's decision to pump 166 billion euros extra into financial markets and expect the US Fed to take additional measures to support the economy. Another reason for bitcoin's price revival is the US Public Prosecutor's plan to seize more than $ 1 billion in bitcoin. It concerns bitcoin that has been earned through the criminal online marketplace Silk Road, Bloomberg news agency reports. Highest price since January 2018 The price of bitcoin was last this high in January 2018, after the highest ever price of 19,783 dollars was reached in December 2017. On Sunday, January 7, the price peaked again to more than $ 17,500, after which the price dropped sharply. This year, the exchange rate recovered somewhat, peaking at $ 12,600 in October. This was due to the decision of the payment service Paypal to make payments in cryptocurrency possible. This Paypal move is also a reason in the upward price movement of Bitcoin. And now the price is stablizing between 15k to 16k.
11-05 20:58 - 'Is Bitcoin Safe and Legal?' (self.Bitcoin) by /u/koinalio removed from /r/Bitcoin within 2-12min
''' Buying, selling, or trading bitcoin is a private transaction in every part of the world. It is a lawful activity in most western and advanced countries, including the US, Canada, and the U.K. Some large economies have restrictions on Bitcoin, including China (ownership discouraged although not a criminal violation) and India ( banks banned from engaging in Bitcoin). Governments everywhere have concerns with the anonymous movement of funds; they wish to prevent the use of money for illegal purposes. Koinal understands the importance of anti-corruption laws and maintains legal standards for all sales and purchases. The best advice is to consult the laws of the country where one lives and intends to do business with Bitcoin. Koinal operates within the bounds of all applicable laws and meets legal requirements for transactions in every state in which it does business.
Is Bitcoin Safe?
The safety of Bitcoin also has some variables. Like all cryptocurrencies, there is no physical note or document. Owners must safely keep their digital currency and access codes because if lost or misused, there may be no recourse. An elaborate security system surrounds Bitcoin. The digital currency exists in a blockchain that cannot be altered by any government or central authority. Every Bitcoin transaction is transparent and watched by a global network. Unlike some other types of transactions, once the Bitcoin moves, there is no reversal mechanism. When you sell or buy, the transfer cannot be undone or canceled. Bitcoin is the oldest of the major currencies that include Ethereum, Lite, and Ripple. Bitcoin, by far, has the highest value, and many investors prefer Bitcoin for investment potential. Bitcoin is among the small group of cryptocurrencies that bring high levels of interest from mainstream financial companies and banks. Relative to other cryptocurrencies, Bitcoin enjoys a high level of interest. It is the most well-known cryptocurrency.
People can buy cryptocurrencies in many ways. The blockchain ledgers keep track of Bitcoin’s existence and ownership, and owners can transfer it on a peer-to-peer basis. Peer to peer transactions does not require any action by a government, bank, or any central authority. A safer and more widely used method is to perform transactions on Bitcoin exchanges. [Koinal works with Binance]1 and other leading currency exchanges. Koinal provides a simple and effective way to purchase Bitcoin using regular bank credit cards and debit cards.
Taxes and Virtual Currency
Bitcoin transactions can result in taxation when used to pay for goods, services, and wages. While it is not a recognized form of currency under U.S. tax law, it does have value. In some instances, the tax code assesses Bitcoin by its fair market value at the time of purchase. The U.S. government’s Internal Revenue Service has noticed Bitcoin and digital currency. It issued an advisory in 2014 and a new item on the tax return for 2020. The IRS named Bitcoin as one of many virtual currencies. The IRS advises that Bitcoin may represent income under tax laws and maybe a taxable asset when held as property. When treated as property under a national tax code, Bitcoin may get treated like other assets that grow in value, such as the U.S. capital gains tax. Investors, buyers, and sellers should consult legal and tax advisors for advice on their situations. At Koinal, we do not offer tax advice. We simply point out that each investor must examine the tax implications of Bitcoin or other virtual currency transactions.
Keeping Within the Law and Regulations
Koinal takes all required steps to keep its transactions within the bounds of national laws and regulations. Koinal requires identification and personal information needed to comply with anti-corruption and know-your-customer rules(KYC). Bitcoin transactions are not anonymous under current rules and regulations. Koinal offers a seamless purchasing experiencing for Bitcoin that can use a bank credit card or debit card. Our system provides quick and reliable delivery to the coordinates of your choice. Bitcoin offers exciting potential for usage as a currency, medium of exchange, and as an investment. When you are ready to purchase, visit our Koinal.io website to buy bitcoin instantly with your credit card. ''' Is Bitcoin Safe and Legal? Go1dfish undelete link unreddit undelete link Author: koinalio 1: **w**o*nal.io/blog*bin*nce-to-j*in-e*fo*ts*with-koin*** Unknown links are censored to prevent spreading illicit content.
David Marcus from Facebook and Libra wants to know more about Defi outside of UniSwap, Compound, and Maker.
Since the summer, Defi on Ethereum has been getting a lot of attention from investors. Available capital is growing day by day as many investors want to take advantage of the yield and have a little FOMO. The number of Defi users has risen from a few thousand at the start of the year to somewhere in the neighborhood of a few hundred thousand now. https://preview.redd.it/e3wfl72ty6x51.jpg?width=640&format=pjpg&auto=webp&s=e0b67acae00b71e486148af03b71af3ea974ca76 Defi is becoming more and more famous. Investors who are already familiar with crypto can no longer ignore Defi, and more and more people outside the crypto world are starting to learn about it. David Marcus, the co-founder of Libra, even brought it up on Twitter. David Marcus is a well-known figure in crypto and fintech. In the past, he was a director at PayPal and led the Messenger team on Facebook. Now he helps run Libra, Facebook's digital currency project. Due to all the commotion from banks and a political angle, the Libra project has been delayed a lot. Interesting projects But Marcus recently asked about Defi, as he started to read about the topic. He asked his followers: "What are the most interesting Defi projects outside of Uniswap, Maker, and Compound that I should know about?" Dozens of individuals responded with the projects that Marcus could look at. Even Vitalik Buterin couldn't help but respond. https://twitter.com/davidmarcus/status/1323294916865261568 It is unclear why Marcus asks about Defi and whether this has to do with Libra. In any case, he is an outspoken fan of Bitcoin, Ethereum, and other decentralized networks and new financial technologies. Defi is defying Marcus is far from the only prominent Silicon Valley investor or innovator devoted to Defi. Naval Ravikant is the co-founder of AngelList. He is an angel investor and has spent in higher than 100 businesses, including many mega successes such as Twitter, Uber, Notion, Opendoor, Postmates, and Wish. He recently spoke to Tim Ferris about Defi in a podcast. "They're building a decentralized Wall Street. They call it Defi, D-E-F-I, for decentralized funding. But I think it's more like DEFY, defy the government, DEFY. And so I think we see a whole new casino that's better than Wall Street. "
https://preview.redd.it/f13t8gy0c3w51.png?width=640&format=png&auto=webp&s=cfd61579208acfa14248c3e79908631db6590a6d The price of Bitcoin (BTC) made another attempt to gain momentum above $ 13,400 against the US Dollar and managed to break above the 13,500 level. At the time of this writing, BTC was trading at $ 13,835. Bitcoin experienced a pullback the day before, dropping below $ 13,000. The leading cryptocurrency found support at close to $ 12,800. The price is currently above the $ 13,800 zone. BTC had to gain traction above $ 13,200 to hit $ 13,500. In fact, this happened. The upward momentum that the bitcoin (BTC) price has experienced recently has spread, as it usually does, to the rest of the cryptocurrencies in the market. However, while the major altcoins have risen in value against the dollar, the story has been different when compared to BTC now you can have the latest news and blog posts about crypto and blockchain delivered to your mobile phone download the app Mickael Mosse”. In its most recent weekly report, published on Monday, the firm Glassnode highlights how the bull market has given a greater boost to bitcoin than to other major cryptocurrencies: ether (ETH) from Ethereum, bitcoin cash (BCH), chainlink (LINK ), polkadot (DOT), ripple (XRP) and binance coin (BNB). The price of BTC can be seriously corrected According to top cryptocurrency analyst, around the corner is a 'candle from hell' that will crush the recent cryptocurrency rally and potentially spark a change. According to cryptocurrency analyst and trader, Bitcoin may fall. Garner shared a chart with an indicator warning traders. Garner points to two previous examples, both of which occurred after the first cryptocurrency recovered a significant resistance level as support. The first candle that Garner mentioned took place just before the cryptocurrency halving event in May 2020. The bullish event is considered the change in supply that caused valuations to skyrocket. The second candle came in early August, a month that sent altcoins into extreme acceleration. Bitcoin continued to cut back, and then fell to $ 10,000 where a new critical test was conducted. The bullish confirmation was what helped Bitcoin climb to $ 12,000 and to current levels in the middle of $ 13,000. Garner says that if we go one "step" further, the price of bitcoin is likely to fall, at least in the very near term. The third candle may upset crypto investors who, despite many difficulties, are excited after such an incredible rally. Analysts make different comments Analysts make different statements about what will be next for the leading cryptocurrency. While many are confident that Bitcoin remains in a long-term uptrend, there are indications that a short-term pullback is possible. Bitcoin rose to $ 13,800 in a flow of buying volume. This brings the cryptocurrency to its highest level of the year. The highest level in the last 2 years is $ 13,950. The techniques state that withdrawal or at least a consolidation is possible. An analyst recently shared the chart below, noting that Bitcoin's two-day Sequential is currently at the '9 sell' candle. This indicates that the cryptocurrency will peak in the short term. A startup account with many followers on Twitter, Magic said that if the price of BTC increases to $ 14,000, it will force $ 20,000. If BTC exceeds $ 20,000 in mid-2021, the price could rise to a region between $ 65,000 and $ 80,000.
BitOffer Asset Custody BUIDL, Customized for Whales and Cryptocurrency Enthusiasts
https://preview.redd.it/j7qbnuuu08w51.png?width=3201&format=png&auto=webp&s=b2f3e4d22e22363dd0329804fbfdb536a4f430b9 The year 2020 is unusual as the COVID-19 attacked, the economic growth slowed down while the international business was gloomy and the financial market became much more volatile. Under the situation above, panic has been the main emotion when people are calling for a stable investment with high returns urgently to grow their asset value gradually. After fully understanding this demand, BitOffer and Goldman Sachs Asian team launched the first cryptocurrency guaranteed fund. With 2-year preparation in strategic layout, BitOffer will build a luxurious asset custody ecosystem to provide customized wealth management products for whales and cryptocurrency enthusiasts. Though most exchanges were focusing on spot trading and futures trading, BitOffer anticipated that the market of derivatives still had a huge blank to fill. Thus, the first Bitcoin American Options, Bitcoin Ups & Downs, Dual-currency, etc. were launched by BitOffer. As 2 years gone by, BitOffer has become the most renowned Bitcoin Options provider with 100 million USD trading volume that is created by 100 thousand worldwide members. Even though, those data never stops being refreshed. Finally, most exchanges started noticing that the cryptocurrency derivative market still has a huge blank. However, the team of BitOffer saw something others never noticed again. As the economy developed, people’s net worth improved. Since then, the demand for asset management has been desired to a much more expected extent. Asset Custody will be destined in the future. Though, the annualized yield of the products which are provided by the banking, financial institutions, and cryptocurrency exchanges is normally low and floating. The demand for human beings cannot be satisfied. Overall, on Oct 23rd, BitOffer and Goldman Sachs Asian team launch the first cryptocurrency guaranteed fund which gives a 20% annualized yield. As it guarantees investors’ original investment, it means the 20% APY can be made with 0 risks. The main strategies of the fund are Quantitative Arbitrage, Quantitative Hedge and High-frequency trading, etc. Compared with other Competitive Products: Asset Servicing on Huobi Global: 7% Annualized Yield (Non-guaranteed), Binance Earn: About 6% Annualized Yield (Non-guaranteed), COBO: 5% Annualized Yield (Non-guaranteed) BitOffer Quantitative Fund: 20% Annualized Yield (Capital & Interest Guaranteed) After a simple comparison, we can see the return of the BitOffer Quantitative Fund is 3 times higher than that of others. Moreover, to guarantee investors’ original investment and interests, BitOffer Quantitative team shall do great in Quantitative and Arbitrage. Lucian, the Chief Analyst of BitOffer, said “QA Fund is the first step to the field of asset custody. BitOffer owns a leading R&D and risk-control team. When BitOffer just launched, we have set up the blueprint for future development. In addition, BitOffer does not offer OTC trading, which means that BitOffer will never trigger any regulatory issues in any country. At the same time, BitOffer uses multiple wallets which separated into Cold Wallet and Hot Wallet, which can efficiently protect users’ assets from any risk. BitOffer is one of the safest Bitcoin exchanges.”. Until now, BitOffer has served 4,000 institutions and more than 100 thousand users with their professional asset custody. Besides, BitOffer also provided customized Bitcoin wealth management products for Bitcoin Holders. The Dual-Currency provided by BitOffer offers the highest APY (which reaches 1,000%) than that of the same product on other exchanges. Recently, BitOffer even cooperated with Goldman Sachs and launched BitOffer Quantitative Fund which guarantees investors’ funds and interest. In 2 years, BitOffer will keep building the most innovative asset custody ecosystem. To seize the initiative, BitOffer will keep developing and improving its own technique and service. In the near future, BitOffer will also provide a One-stop STO service: users will be able to trade or complete asset custody on truly their own wallets. It would be the trend to obey the regulation policy, and also the trend of the cryptocurrency financial ecosystem. The STO market would be pegged with real assets, it shall be a potential market of which value cannot be estimated. On the occasion, BitOffer will become the leader of the whole cryptocurrency derivatives market.
How DAO users can truly control their voting rights
https://blockchaintopbuzz.medium.com/how-dao-users-can-truly-control-their-voting-rights-f945c9c6b65e Aelf proposed a solution that gives the control of the voting rights back to users by classifying token permissions. As of today, there are still few complete businesses. In addition to mining and building trading platforms, it is difficult to create a complete business model. Moreover, various trading platforms have gradually grown into enterprises with comprehensive products in the blockchain industry, including wallets, nodes, lending, mining pools, etc. At the same time, cloud services can reduce the cost of building small exchanges, but they can also lead to big trading platforms monopolizing data. For example, some Internet companies provide free cloud services in order to collect more valuable data. Currently, Ethereum, which has the richest DeFi ecosystem, is gradually upgrading to V2.0, and its consensus protocol will also be upgraded to PoS. Governance voting can be regarded as the most important feature in the PoS ecosystem. This year, Yearn.Finance rose to sudden prominence. But due to the governance problem, its community members initiated a hard fork, resulting in YFII. Another DeFi project, YAM, had a unfixable rebase function error. The founding team apologized for the error and announced a ‘Migration Plan’, which will turn the project over to the community. For a while, governance voting became all the rage. However, the increasingly bigger trading platforms have been criticized by users in governance voting. Is there a proper solution to handling the relationship between the trading platform and governance voting?
What will we lose when trading platforms monopolize the blockchain industry?
In June 2018, during the BP node election before the EOS mainnet launch, node voting began to have a crisis of confidence between token holders and the trading platform. it is widely believed that the top 20 holders of trading platform wallets held about 40% of all the EOS in circulation. Since then, many trading platforms have enabled the “User Authorization” interface. EOS holders can authorize the token voting rights to the trading platform, who will vote on behalf of the users. The rule caused a backlash from users, forcing these trading platforms to change the rule immediately so that EOS holders could vote on their preferred BP nodes. After the EOS BP node votes, whether the trading platform has the token voting right has been occasionally discussed, but fewhave noticed it. Two years later, Justin Sun, founder of TRON, made a commercial acquisition of Steemit, a decentralized social networking platform. After the acquisition was announced, the Steemit community launched a soft fork to resist the project being controlled by TRON. However, Justin Sun voted with the support of trading platforms such as Binance, Huobi and Poloniex to prevent a soft fork. After being questioned by users, Binance and Huobi said that they would no longer interfere in the voting of the Steemit community. However, hkdev 404 of the Steem community again reveived votes from Huobi accounts. It is said that nearly 40 million votes were cast during the incident, accounting for about 10% of the total circulation of STEEM tokens. There is no doubt that when the trading platform monopolizes the industry, we will lose our voting right. How do we defend our voting rights The fact that the ownership of the tokens belongs to the holders is indisputable, but what about the voting rights of the tokens deposited on the trading platform? How can we defend our voting rights after trading platforms have monopolized the industry?
Trading Platform Model
Traditional centralized trading platforms will assign to each user a separate deposit address. After depositing, the depositedamount will be added into the cold wallet and hot wallet. When users want to withdraw their tokens, the trading platform will transfer the tokens out of the hot wallet. If there is insufficient balance in the hot wallet, then the tokens will be transferred from the cold wallet to the hot wallet, and then be withdrawn. Under the traditional centralized trading platform model, once users transfer their tokens into a trading platform, it means thetoken ownership (including voting rights) is also transferred to that trading platform. The aelf solution: classify token permissions and claim back voting rights For the issue of “voting rights” between token holders and centralized trading platforms, aelf, a decentralized cloud computing blockchain network, has proposed a solution: to establish an aelf Centre Asset Management Contract on the chain. The contract can limit the funds entering the exchange and define different permissions to control the assets. The main feature of the aelf Centre Asset Management Contract is to create the “Main Virtual Address of the Trading Platform”. Each exchange has a main virtual address, which can only be used for transfer operation, but not for voting, trading and other operations. As a result, the exchange cannot misappropriate users’ assets for voting. At the same time, the assets of the primary virtual address are publicly available on the chain, which makes it more difficult for the exchange to misappropriate assets. At the same time, the aelf Centre Asset Management Contract also has the function of “address definition”. The exchange can open different permissions to different addresses, such as opening different permissions according to the amount, transactions exceeding a certain amount can only be given the greenlight by using multiple signatures, and the assets can be frozen through the contract when the assets of the trading platform are stolen, etc. For the users of the trading platform, the access of the trading platform to the aelf Center Asset Management Contract function will not undermine user experience. The virtual system address of the aelf Center Asset Management Contract will assign a virtual address to each user, which offers the same user experience as the traditional mode. For the trading platform, each deposit address constructed by the virtual address system is generated by the algorithm and does not need to be carried out on the blockchain. This means that the trading platform does not need to manage a large number of private keys, and there is no risk that the private keys will be lost. On the most important “voting rights” issue, the aelf Center Asset Management Contract will assign to each user a separate virtual address for voting: Voting address = Hash (Exchange Main Address + Token + “VOTE”) Voting process: the tokens are transferred from the main virtual address of the exchange to the special “voting address” for voting, and are then voted. After voting, the tokens are withdrawn from the voting address back to the main virtual address. We can see that the aelf Centre Asset Management Contract proposed by aelf can improve the efficiency of the trading platform without affecting user experience. In addition, it solves the problem that users would lose their voting rights. According to the data on Crypto Mode, the market value of PoS tokens has exceeded $33 billion without counting Ethereum. In the field of crypto, it is the biggest ecosystem next to Bitcoin. The most important function of PoS is vote staking. faced with bigtrading platforms, if the status quo continues, retail investors will gradually lose their “voting rights” that belong to them. Comparison of Market Value of PoS tokens (Source: Crypto Mode) The emergence of DAO offers an alternative to trading platforms who misappropriate users’ tokens, but it still can not change this situation. Of course, DAO will not die out. Small communities will still use DAO for community governance. The idea behind the design of aelf is to start from the underlying trading platform and solve this issue at the source. Whether the solution can work still takes time. However, as a member of the crypto industry, we should understand the importance of “voting rights”, and cannot allow the exchange to seize our rights at will. Recently, aelf has also announced its DeFi plan, which includes a new blockchain 3.0 project with a large number of new technical features, such as cross chain function, virtual address and cloud services. Aelf also proposed a set of interoperability solutions with ERC-20 tokens. It can directly access the ETH ecosystem, allow ETH-based applications and wallets to directly access it, and maintain the interoperability with ETH. And aelf will provide a high-performance smart contract operation platform and cloud services that can support cross chain interaction. Users on major cloud servers can easily run aelf’s services and adjust the scale of cloud according to their own business needs. The implementation of a slew of tools, cloud services and interoperability solutions developed by aelf means that centralized transactions can be directly connected to the aelf network, realizing one-click adaptation to the DeFi ecosystem. With aelf, CeFi and DeFi are able to learn from and complement each other.
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
Crypto Market Volatility Surges, Sending Trading Volume on Binance to an All-Time High. Bitcoin and the entire crypto market saw intense bull-favoring volatility this morning that came about when BTC pushed from lows of $7,700 to highs of nearly $9,000, at which point it met some resistance that led it to decline slightly.. In the time since making this massive movement, the market has entered ... Here are the top five Binance investors earning overall this week. Bitcoin price was at the level of $ 11,400 at the beginning of this week. Bitcoin, which is currently being traded at $ 12,900, has earned spot investors 14 percent throughout the week. In this process, the crypto money market, which had a value of 365 billion dollars on Monday, reached almost 400 billion dollars later in the ... Many investors expect Bitcoin’s upsurge to positively impact altcoins as well. However, this has not happened. We have seen it time and time again, cryptocurrencies react in several different ways to Bitcoin's price movement. Bitcoin’s Dominance Surged. In recent days, Bitcoin's dominance has marked a new three-month high after hitting a low of 55%. This indicator represents Bitcoin's ... Some investors view Bitcoin as a store of value. Because it’s scarce and difficult to produce, it has been likened to precious metals like gold or silver. Holders believe that these traits – combined with global availability and high liquidity – make it an ideal medium for storing wealth in for long periods. They believe that Bitcoin’s value will continue to appreciate over time ... Find out how to invest in Binance without purchasing stock in this article. Trusted by over 100,000 blockchain investors. Menu. Blockchain Investing. Blockchain Investing 101; Blockchain Believers Portfolio; Blockchain Stocks Portfolio; Blockchain Bonds; Blockchain IRAs; Tokenized Real Estate; Crypto Collectibles; Bitcoin Auto-Investing Apps; Exchange-Traded Digital Asset Investments; Bitcoin ... Binance listed the factors that could raise the Bitcoin price in a blog post. According to Binance, the US dollar, which fell due to the coronavirus epidemic, the contraction in the economy and the uncertainty of the US economy stimulus package, was the main factor that directed investors to Bitcoin. Binance CEO Denies 'Tai Chi' Bitcoin Regulation Evasion Scheme A leaked document purportedly from Binance senior executives outlines a plan to use a US subsidiary to evade regulators. By Jeff Benson. 4 min read. Oct 29, 2020 Oct 30, 2020. Binance is one of the largest cryptocurrency exchanges in the world (Image: Shutterstock) In brief. Forbes has reported that Binance had a secret plan to ... Bitcoin Primed to Rally as Binance Futures Go Negative. Bitcoin’s strong drop lower has scared many investors that were previously exuberant. According to data from ByBt, which tracks crypto-asset derivatives markets, the BTC funding rate on Binance briefly breached negative territory, printing -0.013%/eight hours. Nearly 90% of cryptocurrency investors worry about what will happen to their assets after they die, but few plan appropriately. Younger investors are Nearly 90% of cryptocurrency investors worry ... Binance, it’s worth noting, was sued by Japanese cryptocurrency exchange operator Fisco for allegedly facilitating the laundering of $9 million in bitcoin. In a 33-page complaint, Fisco argued Binance’s “lax” know-your-customer protocols “do not measure up to industry standards.”
HOW TO GET FREE BITCOIN on Binance - NO CATCH, NO INVESTMENT NECESSARY
Learn the basics of Bitcoin Trading in Philippines for beginners. In this video I will show how to Buy and Sell or Trade btc to other altcoins. I will also s... I lost $8133 in the Crypto Market with Bitcoin Investing on Binance. This video is about my crypto investing journey, starting with an initial $10,000 investment to a approximately $2000 portfolio ... Find out How To Buy Bitcoin On Binance With Debit Card Fast? 🔶 Binance: http://theappsworld.com/link/binance (5% discount on fees!) Subscribe: https://www.yo... Bitcoin is a volatile instrument and can move quickly in any direction. Crypto Oracle is not responsible for any trading loss incurred by following this advice Category Buying Bitcoin or other cryptocurrencies like Ethereum and Binance Coin can sometimes be tough. Binance.sg is one of the new Fiat-Crypto exchange launched in Singapore. With it, people are able to ... - Binance CEO CZ tweets Binance will open exchange in Argentina - Over 80 Percent of Total ETH Supply is Held by 7,572 Addresses: Research #Bitcoin #Ethereum #Crypto Kostenlos bei Binance registrieren http://bit.ly/Binance-Start In diesem Video zeige ich Schritt für Schritt wie ihr auf euer Bitcoin Wallet bei Binance ei... #bitcoin #blockchain #crypto - NON OF THIS CONTENT IS FINANCIAL ADVICE- STRICTLY FOR EDUCATION AND BANTER ONLY - Looking to Buy or sell BTC in OTC Deals, Sign up here with Caleb and Brown for the ... In deze video leg ik uit hoe je Bitcoin of andere cryptovaluta (gratis) kunt versturen van Bitvavo naar de Binance exchange. ⇩ Gratis Bitcoin Cryptocurrency Cursus ⇩ https://coingids.nl/gratis ... This video is for entertainment and should NOT be used for and is not intended to be investment advice or consulting, this is news and my opinions. Photo Credit: binance.com blog