Bitcoin's Price Doesn't Reflect Its Value - The Case For ...

Where is Bitcoin Going and When?

Where is Bitcoin Going and When?

The Federal Reserve and the United States government are pumping extreme amounts of money into the economy, already totaling over $484 billion. They are doing so because it already had a goal to inflate the United States Dollar (USD) so that the market can continue to all-time highs. It has always had this goal. They do not care how much inflation goes up by now as we are going into a depression with the potential to totally crash the US economy forever. They believe the only way to save the market from going to zero or negative values is to inflate it so much that it cannot possibly crash that low. Even if the market does not dip that low, inflation serves the interest of powerful people.
The impending crash of the stock market has ramifications for Bitcoin, as, though there is no direct ongoing-correlation between the two, major movements in traditional markets will necessarily affect Bitcoin. According to the Blockchain Center’s Cryptocurrency Correlation Tool, Bitcoin is not correlated with the stock market. However, when major market movements occur, they send ripples throughout the financial ecosystem which necessary affect even ordinarily uncorrelated assets.
Therefore, Bitcoin will reach X price on X date after crashing to a price of X by X date.

Stock Market Crash

The Federal Reserve has caused some serious consternation with their release of ridiculous amounts of money in an attempt to buoy the economy. At face value, it does not seem to have any rationale or logic behind it other than keeping the economy afloat long enough for individuals to profit financially and politically. However, there is an underlying basis to what is going on which is important to understand in order to profit financially.
All markets are functionally price probing systems. They constantly undergo a price-discovery process. In a fiat system, money is an illusory and a fundamentally synthetic instrument with no intrinsic value – similar to Bitcoin. The primary difference between Bitcoin is the underlying technology which provides a slew of benefits that fiat does not. Fiat, however, has an advantage in being able to have the support of powerful nation-states which can use their might to insure the currency’s prosperity.
Traditional stock markets are composed of indices (pl. of index). Indices are non-trading market instruments which are essentially summaries of business values which comprise them. They are continuously recalculated throughout a trading day, and sometimes reflected through tradable instruments such as Exchange Traded Funds or Futures. Indices are weighted by market capitalizations of various businesses.
Price theory essentially states that when a market fails to take out a new low in a given range, it will have an objective to take out the high. When a market fails to take out a new high, it has an objective to make a new low. This is why price-time charts go up and down, as it does this on a second-by-second, minute-by-minute, day-by-day, and even century-by-century basis. Therefore, market indices will always return to some type of bull market as, once a true low is formed, the market will have a price objective to take out a new high outside of its’ given range – which is an all-time high. Instruments can only functionally fall to zero, whereas they can grow infinitely.
So, why inflate the economy so much?
Deflation is disastrous for central banks and markets as it raises the possibility of producing an overall price objective of zero or negative values. Therefore, under a fractional reserve system with a fiat currency managed by a central bank – the goal of the central bank is to depreciate the currency. The dollar is manipulated constantly with the intention of depreciating its’ value.
Central banks have a goal of continued inflated fiat values. They tend to ordinarily contain it at less than ten percent (10%) per annum in order for the psyche of the general populace to slowly adjust price increases. As such, the markets are divorced from any other logic. Economic policy is the maintenance of human egos, not catering to fundamental analysis. Gross Domestic Product (GDP) growth is well-known not to be a measure of actual growth or output. It is a measure of increase in dollars processed. Banks seek to produce raising numbers which make society feel like it is growing economically, making people optimistic. To do so, the currency is inflated, though inflation itself does not actually increase growth. When society is optimistic, it spends and engages in business – resulting in actual growth. It also encourages people to take on credit and debts, creating more fictional fiat.
Inflation is necessary for markets to continue to reach new heights, generating positive emotional responses from the populace, encouraging spending, encouraging debt intake, further inflating the currency, and increasing the sale of government bonds. The fiat system only survives by generating more imaginary money on a regular basis.
Bitcoin investors may profit from this by realizing that stock investors as a whole always stand to profit from the market so long as it is managed by a central bank and does not collapse entirely. If those elements are filled, it has an unending price objective to raise to new heights. It also allows us to realize that this response indicates that the higher-ups believe that the economy could crash in entirety, and it may be wise for investors to have multiple well-thought-out exit strategies.

Economic Analysis of Bitcoin

The reason why the Fed is so aggressively inflating the economy is due to fears that it will collapse forever or never rebound. As such, coupled with a global depression, a huge demand will appear for a reserve currency which is fundamentally different than the previous system. Bitcoin, though a currency or asset, is also a market. It also undergoes a constant price-probing process. Unlike traditional markets, Bitcoin has the exact opposite goal. Bitcoin seeks to appreciate in value and not depreciate. This has a quite different affect in that Bitcoin could potentially become worthless and have a price objective of zero.
Bitcoin was created in 2008 by a now famous mysterious figure known as Satoshi Nakamoto and its’ open source code was released in 2009. It was the first decentralized cryptocurrency to utilize a novel protocol known as the blockchain. Up to one megabyte of data may be sent with each transaction. It is decentralized, anonymous, transparent, easy to set-up, and provides myriad other benefits. Bitcoin is not backed up by anything other than its’ own technology.
Bitcoin is can never be expected to collapse as a framework, even were it to become worthless. The stock market has the potential to collapse in entirety, whereas, as long as the internet exists, Bitcoin will be a functional system with a self-authenticating framework. That capacity to persist regardless of the actual price of Bitcoin and the deflationary nature of Bitcoin means that it has something which fiat does not – inherent value.
Bitcoin is based on a distributed database known as the “blockchain.” Blockchains are essentially decentralized virtual ledger books, replete with pages known as “blocks.” Each page in a ledger is composed of paragraph entries, which are the actual transactions in the block.
Blockchains store information in the form of numerical transactions, which are just numbers. We can consider these numbers digital assets, such as Bitcoin. The data in a blockchain is immutable and recorded only by consensus-based algorithms. Bitcoin is cryptographic and all transactions are direct, without intermediary, peer-to-peer.
Bitcoin does not require trust in a central bank. It requires trust on the technology behind it, which is open-source and may be evaluated by anyone at any time. Furthermore, it is impossible to manipulate as doing so would require all of the nodes in the network to be hacked at once – unlike the stock market which is manipulated by the government and “Market Makers”. Bitcoin is also private in that, though the ledge is openly distributed, it is encrypted. Bitcoin’s blockchain has one of the greatest redundancy and information disaster recovery systems ever developed.
Bitcoin has a distributed governance model in that it is controlled by its’ users. There is no need to trust a payment processor or bank, or even to pay fees to such entities. There are also no third-party fees for transaction processing. As the ledge is immutable and transparent it is never possible to change it – the data on the blockchain is permanent. The system is not easily susceptible to attacks as it is widely distributed. Furthermore, as users of Bitcoin have their private keys assigned to their transactions, they are virtually impossible to fake. No lengthy verification, reconciliation, nor clearing process exists with Bitcoin.
Bitcoin is based on a proof-of-work algorithm. Every transaction on the network has an associated mathetical “puzzle”. Computers known as miners compete to solve the complex cryptographic hash algorithm that comprises that puzzle. The solution is proof that the miner engaged in sufficient work. The puzzle is known as a nonce, a number used only once. There is only one major nonce at a time and it issues 12.5 Bitcoin. Once it is solved, the fact that the nonce has been solved is made public.
A block is mined on average of once every ten minutes. However, the blockchain checks every 2,016,000 minutes (approximately four years) if 201,600 blocks were mined. If it was faster, it increases difficulty by half, thereby deflating Bitcoin. If it was slower, it decreases, thereby inflating Bitcoin. It will continue to do this until zero Bitcoin are issued, projected at the year 2140. On the twelfth of May, 2020, the blockchain will halve the amount of Bitcoin issued when each nonce is guessed. When Bitcoin was first created, fifty were issued per block as a reward to miners. 6.25 BTC will be issued from that point on once each nonce is solved.
Unlike fiat, Bitcoin is a deflationary currency. As BTC becomes scarcer, demand for it will increase, also raising the price. In this, BTC is similar to gold. It is predictable in its’ output, unlike the USD, as it is based on a programmed supply. We can predict BTC’s deflation and inflation almost exactly, if not exactly. Only 21 million BTC will ever be produced, unless the entire network concedes to change the protocol – which is highly unlikely.
Some of the drawbacks to BTC include congestion. At peak congestion, it may take an entire day to process a Bitcoin transaction as only three to five transactions may be processed per second. Receiving priority on a payment may cost up to the equivalent of twenty dollars ($20). Bitcoin mining consumes enough energy in one day to power a single-family home for an entire week.

Trading or Investing?

The fundamental divide in trading revolves around the question of market structure. Many feel that the market operates totally randomly and its’ behavior cannot be predicted. For the purposes of this article, we will assume that the market has a structure, but that that structure is not perfect. That market structure naturally generates chart patterns as the market records prices in time. In order to determine when the stock market will crash, causing a major decline in BTC price, we will analyze an instrument, an exchange traded fund, which represents an index, as opposed to a particular stock. The price patterns of the various stocks in an index are effectively smoothed out. In doing so, a more technical picture arises. Perhaps the most popular of these is the SPDR S&P Standard and Poor 500 Exchange Traded Fund ($SPY).
In trading, little to no concern is given about value of underlying asset. We are concerned primarily about liquidity and trading ranges, which are the amount of value fluctuating on a short-term basis, as measured by volatility-implied trading ranges. Fundamental analysis plays a role, however markets often do not react to real-world factors in a logical fashion. Therefore, fundamental analysis is more appropriate for long-term investing.
The fundamental derivatives of a chart are time (x-axis) and price (y-axis). The primary technical indicator is price, as everything else is lagging in the past. Price represents current asking price and incorrectly implementing positions based on price is one of the biggest trading errors.
Markets and currencies ordinarily have noise, their tendency to back-and-fill, which must be filtered out for true pattern recognition. That noise does have a utility, however, in allowing traders second chances to enter favorable positions at slightly less favorable entry points. When you have any market with enough liquidity for historical data to record a pattern, then a structure can be divined. The market probes prices as part of an ongoing price-discovery process. Market technicians must sometimes look outside of the technical realm and use visual inspection to ascertain the relevance of certain patterns, using a qualitative eye that recognizes the underlying quantitative nature
Markets and instruments rise slower than they correct, however they rise much more than they fall. In the same vein, instruments can only fall to having no worth, whereas they could theoretically grow infinitely and have continued to grow over time. Money in a fiat system is illusory. It is a fundamentally synthetic instrument which has no intrinsic value. Hence, the recent seemingly illogical fluctuations in the market.
According to trade theory, the unending purpose of a market or instrument is to create and break price ranges according to the laws of supply and demand. We must determine when to trade based on each market inflection point as defined in price and in time as opposed to abandoning the trend (as the contrarian trading in this sub often does). Time and Price symmetry must be used to be in accordance with the trend. When coupled with a favorable risk to reward ratio, the ability to stay in the market for most of the defined time period, and adherence to risk management rules; the trader has a solid methodology for achieving considerable gains.
We will engage in a longer term market-oriented analysis to avoid any time-focused pressure. The Bitcoin market is open twenty-four-hours a day, so trading may be done when the individual is ready, without any pressing need to be constantly alert. Let alone, we can safely project months in advance with relatively high accuracy. Bitcoin is an asset which an individual can both trade and invest, however this article will be focused on trading due to the wide volatility in BTC prices over the short-term.

Technical Indicator Analysis of Bitcoin

Technical indicators are often considered self-fulfilling prophecies due to mass-market psychology gravitating towards certain common numbers yielded from them. They are also often discounted when it comes to BTC. That means a trader must be especially aware of these numbers as they can prognosticate market movements. Often, they are meaningless in the larger picture of things.
  • Volume – derived from the market itself, it is mostly irrelevant. The major problem with volume for stocks is that the US market open causes tremendous volume surges eradicating any intrinsic volume analysis. This does not occur with BTC, as it is open twenty-four-seven. At major highs and lows, the market is typically anemic. Most traders are not active at terminal discretes (peaks and troughs) because of levels of fear. Volume allows us confidence in time and price symmetry market inflection points, if we observe low volume at a foretold range of values. We can rationalize that an absolute discrete is usually only discovered and anticipated by very few traders. As the general market realizes it, a herd mentality will push the market in the direction favorable to defending it. Volume is also useful for swing trading, as chances for swing’s validity increases if an increase in volume is seen on and after the swing’s activation. Volume is steadily decreasing. Lows and highs are reached when volume is lower.
Therefore, due to the relatively high volume on the 12th of March, we can safely determine that a low for BTC was not reached.
  • VIX – Volatility Index, this technical indicator indicates level of fear by the amount of options-based “insurance” in portfolios. A low VIX environment, less than 20 for the S&P index, indicates a stable market with a possible uptrend. A high VIX, over 20, indicates a possible downtrend. VIX is essentially useless for BTC as BTC-based options do not exist. It allows us to predict the market low for $SPY, which will have an indirect impact on BTC in the short term, likely leading to the yearly low. However, it is equally important to see how VIX is changing over time, if it is decreasing or increasing, as that indicates increasing or decreasing fear. Low volatility allows high leverage without risk or rest. Occasionally, markets do rise with high VIX.
As VIX is unusually high, in the forties, we can be confident that a downtrend for the S&P 500 is imminent.
  • RSI (Relative Strength Index): The most important technical indicator, useful for determining highs and lows when time symmetry is not availing itself. Sometimes analysis of RSI can conflict in different time frames, easiest way to use it is when it is at extremes – either under 30 or over 70. Extremes can be used for filtering highs or lows based on time-and-price window calculations. Highly instructive as to major corrective clues and indicative of continued directional movement. Must determine if longer-term RSI values find support at same values as before. It is currently at 73.56.
  • Secondly, RSI may be used as a high or low filter, to observe the level that short-term RSI reaches in counter-trend corrections. Repetitions based on market movements based on RSI determine how long a trade should be held onto. Once a short term RSI reaches an extreme and stay there, the other RSI’s should gradually reach the same extremes. Once all RSI’s are at extreme highs, a trend confirmation should occur and RSI’s should drop to their midpoint.

Trend Definition Analysis of Bitcoin

Trend definition is highly powerful, cannot be understated. Knowledge of trend logic is enough to be a profitable trader, yet defining a trend is an arduous process. Multiple trends coexist across multiple time frames and across multiple market sectors. Like time structure, it makes the underlying price of the instrument irrelevant. Trend definitions cannot determine the validity of newly formed discretes. Trend becomes apparent when trades based in counter-trend inflection points continue to fail.
Downtrends are defined as an instrument making lower lows and lower highs that are recurrent, additive, qualified swing setups. Downtrends for all instruments are similar, except forex. They are fast and complete much quicker than uptrends. An average downtrend is 18 months, something which we will return to. An uptrend inception occurs when an instrument reaches a point where it fails to make a new low, then that low will be tested. After that, the instrument will either have a deep range retracement or it may take out the low slightly, resulting in a double-bottom. A swing must eventually form.
A simple way to roughly determine trend is to attempt to draw a line from three tops going upwards (uptrend) or a line from three bottoms going downwards (downtrend). It is not possible to correctly draw a downtrend line on the BTC chart, but it is possible to correctly draw an uptrend – indicating that the overall trend is downwards. The only mitigating factor is the impending stock market crash.

Time Symmetry Analysis of Bitcoin

Time is the movement from the past through the present into the future. It is a measurement in quantified intervals. In many ways, our perception of it is a human construct. It is more powerful than price as time may be utilized for a trade regardless of the market inflection point’s price. Were it possible to perfectly understand time, price would be totally irrelevant due to the predictive certainty time affords. Time structure is easier to learn than price, but much more difficult to apply with any accuracy. It is the hardest aspect of trading to learn, but also the most rewarding.
Humans do not have the ability to recognize every time window, however the ability to define market inflection points in terms of time is the single most powerful trading edge. Regardless, price should not be abandoned for time alone. Time structure analysis It is inherently flawed, as such the markets have a fail-safe, which is Price Structure. Even though Time is much more powerful, Price Structure should never be completely ignored. Time is the qualifier for Price and vice versa. Time can fail by tricking traders into counter-trend trading.
Time is a predestined trade quantifier, a filter to slow trades down, as it allows a trader to specifically focus on specific time windows and rest at others. It allows for quantitative measurements to reach deterministic values and is the primary qualifier for trends. Time structure should be utilized before price structure, and it is the primary trade criterion which requires support from price. We can see price structure on a chart, as areas of mathematical support or resistance, but we cannot see time structure.
Time may be used to tell us an exact point in the future where the market will inflect, after Price Theory has been fulfilled. In the present, price objectives based on price theory added to possible future times for market inflection points give us the exact time of market inflection points and price.
Time Structure is repetitions of time or inherent cycles of time, occurring in a methodical way to provide time windows which may be utilized for inflection points. They are not easily recognized and not easily defined by a price chart as measuring and observing time is very exact. Time structure is not a science, yet it does require precise measurements. Nothing is certain or definite. The critical question must be if a particular approach to time structure is currently lucrative or not.
We will measure it in intervals of 180 bars. Our goal is to determine time windows, when the market will react and when we should pay the most attention. By using time repetitions, the fact that market inflection points occurred at some point in the past and should, therefore, reoccur at some point in the future, we should obtain confidence as to when SPY will reach a market inflection point. Time repetitions are essentially the market’s memory. However, simply measuring the time between two points then trying to extrapolate into the future does not work. Measuring time is not the same as defining time repetitions. We will evaluate past sessions for market inflection points, whether discretes, qualified swings, or intra-range. Then records the times that the market has made highs or lows in a comparable time period to the future one seeks to trade in.
What follows is a time Histogram – A grouping of times which appear close together, then segregated based on that closeness. Time is aligned into combined histogram of repetitions and cycles, however cycles are irrelevant on a daily basis. If trading on an hourly basis, do not use hours.
  • Yearly Lows (last seven years): 1/1/13, 4/10/14, 1/15/15, 1/17/16, 1/1/17, 12/15/18, 2/6/19
  • Monthly Mode: 1, 1, 1, 1, 2, 4, 12
  • Daily Mode: 1, 1, 6, 10, 15, 15, 17
  • Monthly Lows (for the last year): 3/12/20 (10:00pm), 2/28/20 (7:09am), 1/2/20 (8:09pm), 12/18/19 (8:00am), 11/25/19 (1:00am), 10/24/19 (2:59am), 9/30/19 (2:59am), 8/29,19 (4:00am), 7/17/19 (7:59am), 6/4/19 (5:59pm), 5/1/19 (12:00am), 4/1/19 (12:00am)
  • Daily Lows Mode for those Months: 1, 1, 2, 4, 12, 17, 18, 24, 25, 28, 29, 30
  • Hourly Lows Mode for those Months (Military time): 0100, 0200, 0200, 0400, 0700, 0700, 0800, 1200, 1200, 1700, 2000, 2200
  • Minute Lows Mode for those Months: 00, 00, 00, 00, 00, 00, 09, 09, 59, 59, 59, 59
  • Day of the Week Lows (last twenty-six weeks):
Weighted Times are repetitions which appears multiple times within the same list, observed and accentuated once divided into relevant sections of the histogram. They are important in the presently defined trading time period and are similar to a mathematical mode with respect to a series. Phased times are essentially periodical patterns in histograms, though they do not guarantee inflection points
Evaluating the yearly lows, we see that BTC tends to have its lows primarily at the beginning of every year, with a possibility of it being at the end of the year. Following the same methodology, we get the middle of the month as the likeliest day. However, evaluating the monthly lows for the past year, the beginning and end of the month are more likely for lows.
Therefore, we have two primary dates from our histogram.
1/1/21, 1/15/21, and 1/29/21
2:00am, 8:00am, 12:00pm, or 10:00pm
In fact, the high for this year was February the 14th, only thirty days off from our histogram calculations.
The 8.6-Year Armstrong-Princeton Global Economic Confidence model states that 2.15 year intervals occur between corrections, relevant highs and lows. 2.15 years from the all-time peak discrete is February 9, 2020 – a reasonably accurate depiction of the low for this year (which was on 3/12/20). (Taking only the Armstrong model into account, the next high should be Saturday, April 23, 2022). Therefore, the Armstrong model indicates that we have actually bottomed out for the year!
Bear markets cannot exist in perpetuity whereas bull markets can. Bear markets will eventually have price objectives of zero, whereas bull markets can increase to infinity. It can occur for individual market instruments, but not markets as a whole. Since bull markets are defined by low volatility, they also last longer. Once a bull market is indicated, the trader can remain in a long position until a new high is reached, then switch to shorts. The average bear market is eighteen months long, giving us a date of August 19th, 2021 for the end of this bear market – roughly speaking. They cannot be shorter than fifteen months for a central-bank controlled market, which does not apply to Bitcoin. (Otherwise, it would continue until Sunday, September 12, 2021.) However, we should expect Bitcoin to experience its’ exponential growth after the stock market re-enters a bull market.
Terry Laundy’s T-Theory implemented by measuring the time of an indicator from peak to trough, then using that to define a future time window. It is similar to an head-and-shoulders pattern in that it is the process of forming the right side from a synthetic technical indicator. If the indicator is making continued lows, then time is recalculated for defining the right side of the T. The date of the market inflection point may be a price or indicator inflection date, so it is not always exactly useful. It is better to make us aware of possible market inflection points, clustered with other data. It gives us an RSI low of May, 9th 2020.
The Bradley Cycle is coupled with volatility allows start dates for campaigns or put options as insurance in portfolios for stocks. However, it is also useful for predicting market moves instead of terminal dates for discretes. Using dates which correspond to discretes, we can see how those dates correspond with changes in VIX.
Therefore, our timeline looks like:
  • 2/14/20 – yearly high ($10372 USD)
  • 3/12/20 – yearly low thus far ($3858 USD)
  • 5/9/20 – T-Theory true yearly low (BTC between 4863 and 3569)
  • 5/26/20 – hashrate difficulty halvening
  • 11/14/20 – stock market low
  • 1/15/21 – yearly low for BTC, around $8528
  • 8/19/21 – end of stock bear market
  • 11/26/21 – eighteen months from halvening, average peak from halvenings (BTC begins rising from $3000 area to above $23,312)
  • 4/23/22 – all-time high
Taken from my blog: http://aliamin.info/2020/
submitted by aibnsamin1 to Bitcoin [link] [comments]

Just some ideas I've had kicking around I want to share

Forgive formatting on mobile for life
Let me know what you think
1) a gym in the hideout, weights maybe a rowing machine. Trade food and drink for skill points and time.
2) a map that has high value loot time restricted. I'd like to see a map that theQ good stuff is locked away so that you actually have to fight for it rather than whoever gets best spawn and rushes.
3) a map that is challenging enough that it fosters cooperation. Currently I feel the only reasons to bring a squad is to bully, I'd like to see a map that requires cooperation and team work and if successful a fatty loot horde at the end.
4) a few more voice lines so that we might be able to take advantage of the scav exfils, maybe some broken english or something so that we might communicate our intentions better than a wiggle.
5) a better reason not to murder all scavs on sight as a player scav.
6) I'd like killa to have a group of body guards in track suits. They would have AI similar to rashala. As long as Killa is alive they will engage, buy if he goes down they fuck off. But if you kill all Killas boys he goes apeshit. I think it would be cool if they have the stuff like gold chains and labs cards and killa has the gun armor and helmet.
7) progressive scav difficulty as the raid gets closer to the end. Sure the raids starts with the same scavs, shotguns, mosins, sks etc, but by the 5 minutes remaining the scav respawns are bringing armor and real guns
8) this one is bonkers so mostly ignore it, I love playing the flea market. When I notice someone messed up and sells something for under the cost that a trader buys it my heart sings. Tangentially I think it would be really cool if there were some sort of black market stock market, a specialized market where specialized items trade and prices fluctuate based on some other factors, like a bitcoin market or something.
8.5) idk maybe let me open a shop or something. Maybe let people with a certain trader value set up a storefront but they have to maintain certain levels of inventory and it has to be FIR
9) something for end game that isnt just collecting money or a grind quest for a bigger special container. I know we are still in beta but after you get your Kappa all that is left to do is get more money. And maintain your hideout I think this is at the heart of the problem of the RMT. "winning" I need something to spend my rubles doing that isnt just getting gear to go and bully dudes who havent finished the Kappa Grind
submitted by lornstar7 to EscapefromTarkov [link] [comments]

Decred is insanely undervalued - A Confluence of Blockchain mechanics and Raw Scarcity

Decred is insanely undervalued - A Confluence of Blockchain mechanics and Raw Scarcity
Decred has caught a burst of long overdue wind today.
Below is my thesis on recent price action drivers and why I think Decred is insanely undervalued right now from an on-chain/blockchain mechanics perspective.
This is an expansion on a tweet I put out here https://twitter.com/_Checkmatey_/status/1190349477120552961
Fundamentally, the project is one of the most undervalued assets in the market and I believe the largest information asymmetry next to Bitcoin. The smart money know this. They have been accumulating. Looking at the volume of DCR moving on-chain, we can see a significant amount of DCR moving in 2019 at the current support range. We know that DCR is always on the move due to tickets so when we see high volume nodes like this, it supports the notion of actual accumulation in addition to the usual transaction flow. We have seen similar growth in the median and mean transaction sizes throughout 2019. Larger wallets, larger DCR purchases.
Update: Note how the 2019 volume node, if just looking at USD chart could be attributed to Dec-Apr period or the recent drawdown. However looking against the BTC chart confirms that the dominant accumulation has occurred during the recent period as the BTC price probes the lows. This is what I consider a high volume zone of support characterised by a large transfer of coins (miners selling, accumulating buyers).
On-chain DCR volume profile plotted against price for BTC (black) and USD (blue)
The recent price action drawdown in my opinion is a result of Miners going too hard to fast. ASICs were introduced in early 2018 and we see an explosion in PoW Difficulty. Mining is a leveraged play for DCR and in this case is unlike what occurred for BTC in that it was almost four years until ASICs were on the scene for Bitcoin. This means that Bitcoins naturally high early inflation had time to disperse before ASICs and serious hardware investment came online. ASICs are capital intensive, not hobbyist grade meaning coins mined must necessarily become coins sold.
We can compare the insane growth in Decred mining since Jan 2018 against the market to see this on a relative scale. Mind you, this is a bullish signal. Miners are committing heavy capital to the Decred chain security. They have done their due diligence and have high conviction. That is not something to ignore.
Full tweet on this here https://twitter.com/_Checkmatey_/status/1177650799050133504
Normalised difficulty growth (left) since Jan 2018 and (right) 2019 Year to Date
As miners over-extend without support of price appreciation, they must sell more coins to pay bills. Eventually the weak miners have to capitulate and difficulty ribbon squeezes as mining equipment is switched off. We have seen this play out for Bitcoin where squeezing of the difficulty ribbon indicates a valuable period for accumulation. Willy Woo talks about this here https://woobull.com/introducing-the-difficulty-ribbon-the-best-times-to-buy-bitcoin/.
What happens next is that the strong miners gain an increasing share of the hashrate. Their energy is thus rewarded with more DCR and so they can sell less of their income and Hodl more. This effectively begins to constrain supply rather than the oversaturation during capitulation. Over time this leads to a reversal in price action which further perpetuates the effect.
Price of a scarce asset must appreciate with reduced circulating supply assuming demand relatively remains stable or increases.
Decred total cumulative block subsidy paid (price x block reward DCR) and Difficulty ribbon
This is actually very healthy for Decred. Coins are being distributed by miners en-mass right now, nullifying the risk of miners holding too high of a supply within the staking system leading to centralisation. I would argue that this distribution of coins is one of the most important and bullish signals long term. We know that miners stake as well and thus they are able to generate income on Hodled coins. I expect this to actually soften the degree of miner capitulation as they can turn off power whilst still generating income.
For this reason, I do not suspect we will see photos of mountains of Decred ASICs being thrown out as we saw for Bitcoin in 2018. The machines are simply put on hold until price reverses to justify power consumption. This is a valuable business feasibility case for miners and a feature of long term sustainability in the chain security.
Decred Resilience
This is where the elegance of Decred resilience steps in.
As miners slow, supply saturates, price drops.
DCR Tickets become cheaper.
Stakeholders step in and accumulation begins.
The Ticket Price hit an ATH of 140+ DCR as Stakeholders begin accumulating and commit capital to secure the chain. The Hybrid PoW/PoS system works as a counter balance. When price is in a strong uptrend, stakeholders are provided an exit to capitalise on gains as miners have a strong case for expanding their operations (PoW dominant security). During price drawdowns, miners drop out and the cheap DCR stimulates Hodlers buying and locking capital which locks down available supply from attackers. An attack would thus drive price higher and the cycle repeats.
As above, showing the total DCR locked in tickets hits an ATH as price drops due to miner capitulation
PermabullNino made the observation that Decred functions as an elegant yet robust accounting system. His discussion on block subsidies are shown in the charts above and linked here https://medium.com/@permabullnino/decred-on-chain-a-look-at-block-subsidies-6f5180932c9b.Decred has a has past, present and future cash flows distributed to those who support it most. This puts Decred security in good hands- Miners 60%- Stakeholders 30%- Builders 10%
Price is currently hovering around the PoW total subsidy paid (red line) and means miners are indeed feeling the squeeze as this is the cost basis of all DCR paid to date. Once you factor in overheads and capital costs, it makes sense we are seeing DCR supply distribution. The last time we saw price dip to this line was early in Decreds history and was followed by a rapid repricing.
We now have three mechanisms at play which will act to constrain supply
  • Miners are distributing heavily but eventually will switch to hodling as the strong miners hash share grows.
  • Stakeholder are absorbing supply en mass and locking in tickets due to relatively cheap prices
  • Inflation rate is in a state of constant reduction
Scarcity
My recent work looking at the Decred stock-to-flow model (which does exist and is convincing, contrary to what the Bitcoin maxi community may want to believe), suggests that DCR is in the oversold range. It has deviated by 1.5 standard deviations from the S2F model mean which is near identical to Bitcoin at 50% supply mined. Historically for Bitcoin and Decred, this has been an opportune period for accumulation. More on this discussion in my tweet here https://twitter.com/_Checkmatey_/status/1184159137564889089
Note that Decred, likely due to the smooth issuance and difference in market awareness, is less volatile than Bitcoin. The significant undervaluation of Bitcoin at 50% mined was due to the first 2012 halving where it was a very different and far smaller market. I would expect DCR to be repriced sooner rather than later as the smart money steps in having now developed Bitcoin hindsight.
Standard deviations of DCR and BTC price from the respective stock-to-flow linear regression models
As a final note, if we look at Decred and Bitcoin market valuations plotted against ratio of 21M coins issued, which normalises for coin age, we see a fascinating similarity in these coins trajectory. Bitcoin was worth $127M at 50% coins mined and Decred was worth $180M. Considering we are in a log scale market, this is practically the same. Decred has achieved this value both benefiting from market awareness and size, but also in the face of heavy (albeit generally ill-equipped) alt-coin competition, quite remarkable.
Decred and Bitcoin Market and Realised Caps and S2F models plotted against ratio of 21M coins mined
Given that Decred has such insanely strong fundamentals, has developed a convincing monetary premium in it's short life and traverses the same stock-to-flow path as Bitcoin, I believe there is immense value flying under the markets radar.
The recent price action drawdown can reasonably be attributed to miners over-extending. However based on both prior Decred behaviour and drawing comparisons to Bitcoin history, there is a strong argument to be made that supply will soon be constrained on multiple fronts and the current value is both highly undervalued and being absorbed by the smart money.
Feedback, counter-points and discussions welcome.
Cheers,
CM.
submitted by __checkmatey__ to decred [link] [comments]

How did you get into trading?

I thought it would be interesting - and fitting for the random discussion thread - for willing contributors to share the story about how they got into trading. We all obviously share a passion for making money but I am sure that we each have a different story about how we found this path. I’ll go first!
I have always had a fascination/ obsession with trading. The idea of being able to trade up - starting with something small and snowballing it into something larger, bigger, better has always attractive to me.

My first opening bell

Trading for me started in childhood. I have had the opportunity to have moved around a lot as a child due to my father’s career. We moved to Milan as a family when I was 8. This was my first time living in a non-english speaking country.
When the bell rang at the beginning of recess on my first day at my new school, all of the school children flooded into the playground and huddled around each other in groups. I peered over shoulders to see that everyone was swapping decks of football (soccer) stickers, assessing each other’s inventory and segregating all the cards that they wanted to trade for.
“Ce l’ho, ce l’ho”. These were the first words of my italian vocabulary and the only words that the kids would say as they rifled through each others desks. “I have it, I have it.” Once the rejects had been discarded, negotiations could begin.
The next day, the 10:20 bell marked the beginning of recess; market open! Trading football stickers was the only thing that mattered those days and my best way to start making new friends. Unfortunately I had none but the boy who shared my desk in class was kind enough to give me his worst cards - a couple duplicates of the goalkeeper from Chievo, a team that consistently places at the bottom of the Serie A league. Everyday the market would open at 10:20 sharp for a 20 minute session and would open again at 12:45 - 2pm. At the end of the year I had hundreds of stickers - and I never spent a cent.
At that age, we all lived for this! The football stickers eventually fell out of fashion as interest shifted to pokemon cards, then magic cards and even yugioh. Nevertheless, these playground interactions were my formational experiences in trading.
After school, I also started playing online games like Runescape and socialising on Habbo hotel - a virtual world chat room where people would hang out in rooms they designed and filled with furniture that would be bought with ‘real world’ currency. Without paying for membership - I was able to collect hundreds of HC sofas - the currency by which every other piece of furniture in the game was valued. Trading up.
While at the time I am sure that my parents thought I was wasting my time on the computer I personally feel that these online games, which were each centred on a system of exchange, were an amazing way to learn the fundamental dynamics and features of markets. I am also convinced that business in the real world is nothing more than a more bureaucratic evolution of these playground/ online games.

2008 - let’s get rich

After several years in Milan, we moved again to Paris. New school, new friends. As teenagers there were no trading cards to facilitate the transition. I had been playing Runescape but was not interested in the game anymore and started to look into ways of converting the virtual in-game currency I had amassed into real money to ‘cash out’. I came across forums where people were selling leveled up accounts for good old American Dollars. I came to the fateful realisation that my countless hours of toil in the virtual world did not amount to much in ‘real life’ - I could not catch a bid - so I started to look to other ventures and pursuits that would allow me to earn money.
I have a twin brother and both of us have always had an artistic/ creative bent and excellent drawing skills etc. Now at age 13, we decided to leverage this talent to make some money. This was in 2007, which marked the emergence of the gig economy just before its true expansion post-2008. The beginning of my quest began with a google search: “how to use photoshop to make money”. Clicking through the initial results, I stumbled upon a very low traffic forum where users would initiate logo competitions for their small businesses and submissions would be made with image links in replies. I then found Sitepoint - the precursor to 99designs - and my brother and I started to make logos there under the pseudonym - Pixelsoldier.
We were able to win one of our first competitions within a month - $250 in the bank. We would come home from school, finish homework and then scan through the available competitions and start to sketch out ideas for logos. Within a couple more months we had made $2000. Age 13. The internet can be a marvelous thing. The organisers of the 2008 Singapore Property Awards (who would use the same logo for the next 7 years on highly publicised events) certainly did not know that the ‘design professionals’ they were working were teenagers.
Having won that first $2000 we decided to open a Scottrade account to trade in stocks. Our only guide was “Stock trading for dummies” which I bought but never read. The answers to all of our questions lay with ‘Omnitron2000’ on a yahoo stock chat room. So, following tips from some random dude on the internet, we decided to make our first stock purchase in RDN which returned $250 within 10 minutes. Oh, this is easy! We are going to make it to the cover of Forbes in no time!
The first hit is free. Our next trades were not so inspiring. The next ticker we traded - on a “tip” - was TMA, which soon became THMR and then THMRQ. As per the google description, “Thornburg Mortgage was a United States real estate investment trust that originated, acquired and managed mortgages, with a specific focus on jumbo and super jumbo adjustable rate mortgages.” Was being the operative word. This was 2008. I knew nothing.

The rebirth

I lost interest in trading after our swift blow-up. Nevertheless, my brother and I continued to try to make some money on the side by designing logos throughout high school.
A couple years later, when it came to selecting university courses I decided to study Architecture although at the time I wouldn’t have been able to give you a good reason why other than the typical “it is a good mix between the sciences and the arts”. I had never had difficulty at school and was always at the top of my class; a classic “insecure overachiever” - the kind that corporate employers love to target as they always strive to please. My brother instead choose to study civil engineering.
I completed my undergraduate Architecture degree with a 4.0 GPA and gained entry for my Masters although I decided to defer a year because I was not convinced that it was what I wanted to do.
After working for a couple of years in various Architecture practices both in the US and Europe I was able to confirm my doubts: Architecture was not my passion. If anything, what I enjoyed about Architecture was the creative problem solving but not the actual profession.
During one stint of working at a practice in LA, I had had to find accommodation through Craigslist. My roommate there had been talking to me about bitcoin (late 2016 and before crypto investor was an instagram profession) as well as other investments he had made. He was somewhat of a fashionista and had actually sold his last 2 bitcoins to at around $800 to fund his distorted tastes. In any case, he introduced me to options in an extremely cursory manner - simply saying “I’ve had some success with options”.
My brother had also graduated and while waiting to start a well-paying job in consulting was tutoring by the hour and earning some cash while living at home, which he poured entirely into a trading account to play around with ‘FDs’. I moved to a new architecture practice and continued to have serious doubts about Architecture. Not having found any alternative, I then started my Master program. Around this time, my brother started his job and put his signing bonus into the trading account for me to take over when I was not studying. Around November of 2017 I started to focus most of my attention on trading SPX options and really neglected my architecture work. The workload in architecture is immense, particularly at Postgraduate level. With divided focus and a much stronger interest in trading than in my degree, I quit after the first semester. That was a year ago.
I took a leap of faith and broke away from the path I did not want - without much of a parachute.
Here I am today. To be frank, it has been a year of learning. Negative YTD. But as they say there is a price for education. The account is small but I still have dreams. I am at somewhat of a crossroads. There is a lot of pressure on me to quit but I feel that beyond trading, I have little idea what I want to do.
To that end, I am curious to know how each of you came onto trading and how it factors into your life. When did you open your first brokerage account. Do you work to be able to trade or is trading something that features in addition to your career?
submitted by Worldbuild3r to thewallstreet [link] [comments]

Understanding Crypto Mining | And perhaps a way to mitigate its impact on the PC gaming ecosystem

EDIT: Per the moderation staff, I'm adding in to the header what I'm using to make it easier for prospective miners.
  1. Go to https://www.nicehash.com/
  2. Create a login
  3. Download their software and run it (this used to be "????")
  4. Profit
Once you reach 0.002 BTC (about 7-10 days on my GTX 1060 + i7-7700k), you can transfer your earnings to Coinbase for free, and cash out. CB does have fees for conversion to Fiat (cash) and your percentage goes down with higher amounts. So don't cash out just because you can. Cash out when you have enough to buy something.
Also a note on taxes. I'm going to keep this simple.
Hi folks. I just want to thank those of you in advance who trudge through this post. It's going to be long. I will try to have a TLDR at the end, so just scroll down for the bolded text if you want Cliff's Notes.
Disclaimer: I'm a miner, sort of. I casually mine when I sleep/work, using my existing PC. It doesn't make much. I don't buy hardware for mining. But, I still wanted to post this disclaimer in the interest of fairness.
As we all know, cryptocurrency mining has had a devastating impact on the PC gaming ecosystem. The demand for GPUs for mining has lead to scarce availability and sky high prices for relevant hardware. But even hardware that is less desirable for mining relative to their peers (GTX 1050ti, 1080) has been impacted. Why? Because when gamers can't get the 1060 or 1070 that they desire, they gravitate en masse towards something that their finances will allow them to settle for.
But for all that we know about mining, there's still a LOT of myth and misinformation out there. And I blame this on the bigger miners themselves. They have a few tactics they're using to discourage competition. Now, why would they do this? Simply put, the more coins are mined, the harder the algorithms get. That means the same hardware mines a lower rate of cryptocurrency over time. If the mining rates were to get too low before new hardware (Volta/Navi) could be released, it would cause a massive depression in the cryptocurrency market. Most hardware would become unprofitable, and used GPUs would flood the market. Miners want to retain profitability on current hardware until the next generation hardware is out.
So, what tactics are they engaging in? Silence and manipulation. On the former, the bigger miners don't usually participate and contribute to the community (there are exceptions, and they are greatly appreciated). They're sponges, taking whatever the community provides without returning much to the community. On the latter, they post here, in this very sub occasionally. And they continue to push certain types of myth/misinformation to discourage other users from mining.
And why, of all people, would you discourage gamers from mining? It's because of the competition point mentioned above. If a massive number of gamers entered the cryptocurrency mining market, it could trigger a mining apocalypse. There's an estimated 3-4 million current-gen GPUs being used in 24/7 mining operations by dedicated miners. Now, how many current-gen GPUs are used by gamers? I'd bet at least an equal amount. But what about Maxwell and Kepler? Or all those GCN-based GPUs up through Fiji? Bottom line is that when you factor in all available profitable GPUs, gamers drastically outnumber dedicated miners (yes, Kepler and GCN 1.0 are still profitable, barely). And if a large number of those users started casually mining as I am, the following would occur:
  • difficulty would increase, lower output (profitability) for everyone involved
  • Coin creation would initially accelerate, and with no massive change to the market cap, that means per-coin value drops
  • when you factor in slower coin generation for individual miners, coupled with lower coin value, you get...
  • ROI length increase on GPUs, depressing their values, which would lead to lower prices and higher availability
Oh dear, someone just spilled the beans...
So naturally, misinformation needs to be spread. If dedicated miners can keep the uninformed, well, uninformed, they're less likely to join in. And I've seen variations of the following misinformation spread. Here's the common tropes, and my rebuttal.
Mining on your GPU will cause it to die prematurely.
I really wish we had a Blackblaze-equivalent for GPUs used in data centers. NOTHING punishes a GPU like full-time use in a data center. Not mining, not gaming, and not prosumer usage. And these companies pay thousands per GPU. Clearly, they're getting solid ROI for their use.
But let's talk about mining specifically. For my GTX 1060, I limit power to 80% (96W). Fan speed is at a constant 40% (that's in the same ballpark as your blower-style GPU in desktop usage). Temperature is a constant 75°C. That's gentle. Gaming hurts it more (start/stop on the fan, varying temps, quick rise at the start and fall at the end, varying loads, etc.).
And if GPUs did prematurely die from mining? One miner insisted that I'd never see an ROI on my 1060 (which cost me $240) because it would die before I could earn that amount. Yea, GPUs routinely die before hitting their ROI. That's why miners are buying $200 GPUs today for $500, or $400 GPUs today for $900. Because they don't generate enough to cover their MSRP, let alone their current gouged prices. /s
Common sense would dictate that miners are profitable, or they wouldn't mine. Therefore, GPUs are not dying prematurely. So, don't fall for this one. And yes, I've seen those photos of the 20-card Sapphire RMA. Mining data centers have THOUSANDS of cards. Just do an image search for a GPU mining farm. This is well within typical acceptable defect rates.
Power costs are too high for mining to be profitable.
Warning! Danger Will Robinson! Math ahead!
Where I live, electricity ranges from 9.5 cents per kilowatt hour (kw/hr), to 10.1 cents per kw/hr. Let's round to 10 cents. Power measured at the wall from my surge protector, while mining, shows just under 200W. (That's includes my tower, monitor, speakers, a dedicated NAS, a router, and PSU inefficiency). That also includes mining on both CPU and GPU.
At 200W per hour, that's 5 hours to hit 1kw/hr. That's 5kw/hr per 25 hours, so let's call it 5kw/hr per day. That is $0.50 per day total from that outlet (and most of this stuff would be running anyway). That's not even "over my existing costs," that's just out the door.
Bottom line is that electricity is cheap in many areas. The USA national average is currently ~12 cents per kw/hr (RIP Hawaii, at 33 cents). For most of the developed world, power costs are not prohibitive. Don't fall for this. If unsure, check your rates on your bill, and ask someone who can do math if you can't.
Casually mining isn't profitable
There's a big difference between "profit" and "getting rich." I have no expectations of the latter happening from what I'm doing. But "profit" is very much real. It's not power costs that derail profitability. It's all of the hidden fees. Many mining programs take a cut of your output. And then a cut to transfer to a wallet. And then there's a fee to transfer to an exchange. Oh, did you want to then convert to cash? We can...for a fee!
The trick is in finding outlets that allow you to minimize fees. I give up 2% of my output, transfer to my wallet for free, can transfer to an exchange for free, and don't plan to cash out every time I meet the minimum threshold (higher fees!). I instead plan to cash out at extended set intervals to minimize those fees.
NOTE: I am deliberately not listing the provider(s) that I use, because I don't want to be accused of being associated with them and/or driving business to them. I want this post to be about the big picture. But I will answer questions in the comments, provided the moderation staff here has no objections.
Bottom line is that with a mid-range GPU like mine, and without the benefit of CPU mining (it's just not worth it without a modern Core i7, or Ryzen 5/7), my GPU alone could make me ~$60-$75/mo in profit at current rates. Think of how many months/years you go between upgrades. Now, do the math. Needless to say, I'm now regretting not going bigger up front :)
It's too complicated for a casual miner, so don't bother
The old "go big or go home" saying, and it sort of piggy backs off the last one. And there is some truth in this. If you're going to be a big-time miner, you need mining programs (often dedicated to each algorithm and/or currency), multiple wallets, access to multiple exchanges, etc. It's daunting.
But for the casual, you don't need that. There are multiple providers who offer you a one-stop-shop. I have one login right now. That login gives me my mining software, which switches between multiple algorithms/coins, gives me a wallet, and lets me transfer to an outside wallet/exchange. My second login will be the exchange (something that lets me convert my currency to local cash) when my balance justifies it. Given the recent Robin Hood announcement, I'm biding my time to see what happens. This space is getting competitive (lower fees).
Bottom line, it's easier now than it ever was before. As I told someone else, "Once I finally started, I wanted to kick my own ass for waiting so long."
New GPUs are expensive, but if you just wait, there will be a buttload of cheap, used GPUs for you!
Miners learned from the last crash. There were two types of miners in that crash: those who sold their GPUs at a loss, and those who kept mining and made out like bandits on the upswing. Turns out, cryptocurrency really does mimic the stock market (for now).
We're going to look at Bitcoin (BTC) to explain this. No, miners don't mine BTC. But, BTC is commonly what most coins are exchanged for (it makes up roughly one third of the entire cryptocurrency market). And it's the easiest currency to convert to cash. So, when BTC rises or falls in price, the rest of the market goes with it. That includes all of the coins that GPU miners are actually mining.
In January 2017, when the current mining push started, BTC was worth roughly $900 per coin. It's now worth roughly (as of this post) $12,000 per coin, down from a December high of over $20,000 per coin. So yea, the market "crashed." It's also more than 12x the value it was a year ago, when miners dove in. You think they're going to bail at 12x the value? Son, I've got news for you. This market needs to truly crash and burn for them to bail (and that's where you come in!).
So, there's not going to be a flood of used GPUs from a sudden market crash. Again, they've learned from that mistake. Used GPUs will enter the market when they are no longer profitable for mining, and not before. Dedicated miners have lots of room for expansion. When Volta comes out, they're not selling their Pascal GPUs. They're building new Volta mining rigs alongside the Pascal ones, making money off each of them.
Conclusion/TLDR:
  • Mining is subject to diminishing returns. It gets harder over time on the same hardware.
  • PC gamers joining the market en masse could trigger an apocalypse in terms of difficulty
  • Due to this, it benefits pro miners to spread misinformation to discourage gamers from entering the mining game
  • Casually mining on your existing system is safe, easy, could help you pay for your next upgrade(s), and could also hurt the mining market in general (better availability/pricing on GPUs)
  • No, there's no flood of used Pascal/Polaris/Vega GPUs around the corner, as those are HIGHLY profitable even in a depressed market
Second Conclusion - Why do I (jaykresge) personally care?
Simply put, I'm disgusted by this. I was excited about flipping a few friends from consoles to PC gaming. I'm now seeing a reverse trend. One friend is gaming on an RX 560 waiting for prices to hit sanity. He's running out of patience. Others have bailed.
I view our dormant GPUs as the best weapon against cryptocurrency mining. Destroy it from the inside. It's win-win for most of us. Either we earn enough for more upgrades, or we depress pricing. Something's got to give.
In other words, y'all f*ckers better start mining, because I want Volta to be reasonably priced when it launches so I can get an EVGA x80 Hybrid to go with a G-Sync monitor. And if this doesn't happen, I'm going to be cranky!
Seriously though, thanks for reading. Bear with me as I go over this a few more times for typing/grammar. And I look forward to your comments.
submitted by jaykresge to hardware [link] [comments]

Understanding Crypto Mining | And perhaps a way to mitigate its impact on the PC gaming ecosystem

This is a crosspost from /hardware, but I will be editing this independently based on community feedback and guidelines. Prior to posting here, I reached out to your local mod staff to ensure that I wasn't stepping on any toes, given the nature of its content. I hope you find this useful.
Hi folks. I just want to thank those of you in advance who trudge through this post. It's going to be long. I will try to have a TLDR at the end, so just scroll down for the bolded text if you want Cliff's Notes.
Disclaimer: I'm a miner, sort of. I casually mine when I sleep/work, using my existing PC. It doesn't make much. I don't buy hardware for mining. But, I still wanted to post this disclaimer in the interest of fairness.
As we all know, cryptocurrency mining has had a devastating impact on the PC gaming ecosystem. The demand for GPUs for mining has lead to scarce availability and sky high prices for relevant hardware. But even hardware that is less desirable for mining relative to their peers (GTX 1050ti, 1080) has been impacted. Why? Because when gamers can't get the 1060 or 1070 that they desire, they gravitate en masse towards something that their finances will allow them to settle for.
But for all that we know about mining, there's still a LOT of myth and misinformation out there. And I blame this on the bigger miners themselves. They have a few tactics they're using to discourage competition. Now, why would they do this? Simply put, the more coins are mined, the harder the algorithms get. That means the same hardware mines a lower rate of cryptocurrency over time. If the mining rates were to get too low before new hardware (Volta/Navi) could be released, it would cause a massive depression in the cryptocurrency market. Most hardware would become unprofitable, and used GPUs would flood the market. Miners want to retain profitability on current hardware until the next generation hardware is out.
So, what tactics are they engaging in? Silence and manipulation. On the former, the bigger miners don't usually participate and contribute to the community (there are exceptions, and they are greatly appreciated). They're sponges, taking whatever the community provides without returning much to the community. On the latter, they post here, in this very sub occasionally. And they continue to push certain types of myth/misinformation to discourage other users from mining.
And why, of all people, would you discourage gamers from mining? It's because of the competition point mentioned above. If a massive number of gamers entered the cryptocurrency mining market, it could trigger a mining apocalypse. There's an estimated 3-4 million current-gen GPUs being used in 24/7 mining operations by dedicated miners. Now, how many current-gen GPUs are used by gamers? I'd bet at least an equal amount. But what about Maxwell and Kepler? Or all those GCN-based GPUs up through Fiji? Bottom line is that when you factor in all available profitable GPUs, gamers drastically outnumber dedicated miners (yes, Kepler and GCN 1.0 are still profitable, barely). And if a large number of those users started casually mining as I am, the following would occur:
  • difficulty would increase, lower output (profitability) for everyone involved
  • Coin creation would initially accelerate, and with no massive change to the market cap, that means per-coin value drops
  • when you factor in slower coin generation for individual miners, coupled with lower coin value, you get...
  • ROI length increase on GPUs, depressing their values, which would lead to lower prices and higher availability
Oh dear, someone just spilled the beans...
So naturally, misinformation needs to be spread. If dedicated miners can keep the uninformed, well, uninformed, they're less likely to join in. And I've seen variations of the following misinformation spread. Here's the common tropes, and my rebuttal.
Mining on your GPU will cause it to die prematurely.
I really wish we had a Blackblaze-equivalent for GPUs used in data centers. NOTHING punishes a GPU like full-time use in a data center. Not mining, not gaming, and not prosumer usage. And these companies pay thousands per GPU. Clearly, they're getting solid ROI for their use.
But let's talk about mining specifically. For my GTX 1060, I limit power to 80% (96W). Fan speed is at a constant 40% (that's in the same ballpark as your blower-style GPU in desktop usage). Temperature is a constant 75°C. That's gentle. Gaming hurts it more (start/stop on the fan, varying temps, quick rise at the start and fall at the end, varying loads, etc.).
And if GPUs did prematurely die from mining? One miner insisted that I'd never see an ROI on my 1060 (which cost me $240) because it would die before I could earn that amount. Yea, GPUs routinely die before hitting their ROI. That's why miners are buying $200 GPUs today for $500, or $400 GPUs today for $900. Because they don't generate enough to cover their MSRP, let alone their current gouged prices. /s
Common sense would dictate that miners are profitable, or they wouldn't mine. Therefore, GPUs are not dying prematurely. So, don't fall for this one. And yes, I've seen those photos of the 20-card Sapphire RMA. Mining data centers have THOUSANDS of cards. Just do an image search for a GPU mining farm. This is well within typical acceptable defect rates.
Power costs are too high for mining to be profitable.
Warning! Danger Will Robinson! Math ahead!
Where I live, electricity ranges from 9.5 cents per kilowatt hour (kw/hr), to 10.1 cents per kw/hr. Let's round to 10 cents. Power measured at the wall from my surge protector, while mining, shows just under 200W. (That's includes my tower, monitor, speakers, a dedicated NAS, a router, and PSU inefficiency). That also includes mining on both CPU and GPU.
At 200W per hour, that's 5 hours to hit 1kw/hr. That's 5kw/hr per 25 hours, so let's call it 5kw/hr per day. That is $0.50 per day total from that outlet (and most of this stuff would be running anyway). That's not even "over my existing costs," that's just out the door.
Bottom line is that electricity is cheap in many areas. The USA national average is currently ~12 cents per kw/hr (RIP Hawaii, at 33 cents). For most of the developed world, power costs are not prohibitive. Don't fall for this. If unsure, check your rates on your bill, and ask someone who can do math if you can't.
Casually mining isn't profitable
There's a big difference between "profit" and "getting rich." I have no expectations of the latter happening from what I'm doing. But "profit" is very much real. It's not power costs that derail profitability. It's all of the hidden fees. Many mining programs take a cut of your output. And then a cut to transfer to a wallet. And then there's a fee to transfer to an exchange. Oh, did you want to then convert to cash? We can...for a fee!
The trick is in finding outlets that allow you to minimize fees. I give up 2% of my output, transfer to my wallet for free, can transfer to an exchange for free, and don't plan to cash out every time I meet the minimum threshold (higher fees!). I instead plan to cash out at extended set intervals to minimize those fees.
NOTE: I am deliberately not listing the provider(s) that I use, because I don't want to be accused of being associated with them and/or driving business to them. I want this post to be about the big picture. But I will answer questions in the comments, provided the moderation staff here has no objections.
Bottom line is that with a mid-range GPU like mine, and without the benefit of CPU mining (it's just not worth it without a modern Core i7, or Ryzen 5/7), my GPU alone could make me ~$60-$75/mo in profit at current rates. Think of how many months/years you go between upgrades. Now, do the math. Needless to say, I'm now regretting not going bigger up front :)
It's too complicated for a casual miner, so don't bother
The old "go big or go home" saying, and it sort of piggy backs off the last one. And there is some truth in this. If you're going to be a big-time miner, you need mining programs (often dedicated to each algorithm and/or currency), multiple wallets, access to multiple exchanges, etc. It's daunting.
But for the casual, you don't need that. There are multiple providers who offer you a one-stop-shop. I have one login right now. That login gives me my mining software, which switches between multiple algorithms/coins, gives me a wallet, and lets me transfer to an outside wallet/exchange. My second login will be the exchange (something that lets me convert my currency to local cash) when my balance justifies it. Given the recent Robin Hood announcement, I'm biding my time to see what happens. This space is getting competitive (lower fees).
Bottom line, it's easier now than it ever was before. As I told someone else, "Once I finally started, I wanted to kick my own ass for waiting so long."
New GPUs are expensive, but if you just wait, there will be a buttload of cheap, used GPUs for you!
Miners learned from the last crash. There were two types of miners in that crash: those who sold their GPUs at a loss, and those who kept mining and made out like bandits on the upswing. Turns out, cryptocurrency really does mimic the stock market (for now).
We're going to look at Bitcoin (BTC) to explain this. No, miners don't mine BTC. But, BTC is commonly what most coins are exchanged for (it makes up roughly one third of the entire cryptocurrency market). And it's the easiest currency to convert to cash. So, when BTC rises or falls in price, the rest of the market goes with it. That includes all of the coins that GPU miners are actually mining.
In January 2017, when the current mining push started, BTC was worth roughly $900 per coin. It's now worth roughly (as of this post) $12,000 per coin, down from a December high of over $20,000 per coin. So yea, the market "crashed." It's also more than 12x the value it was a year ago, when miners dove in. You think they're going to bail at 12x the value? Son, I've got news for you. This market needs to truly crash and burn for them to bail (and that's where you come in!).
So, there's not going to be a flood of used GPUs from a sudden market crash. Again, they've learned from that mistake. Used GPUs will enter the market when they are no longer profitable for mining, and not before. Dedicated miners have lots of room for expansion. When Volta comes out, they're not selling their Pascal GPUs. They're building new Volta mining rigs alongside the Pascal ones, making money off each of them.
Conclusion/TLDR:
  • Mining is subject to diminishing returns. It gets harder over time on the same hardware.
  • PC gamers joining the market en masse could trigger an apocalypse in terms of difficulty
  • Due to this, it benefits pro miners to spread misinformation to discourage gamers from entering the mining game
  • Casually mining on your existing system is safe, easy, could help you pay for your next upgrade(s), and could also hurt the mining market in general (better availability/pricing on GPUs)
  • No, there's no flood of used Pascal/Polaris/Vega GPUs around the corner, as those are HIGHLY profitable even in a depressed market
Second Conclusion - Why do I (jaykresge) personally care?
Simply put, I'm disgusted by this. I was excited about flipping a few friends from consoles to PC gaming. I'm now seeing a reverse trend. One friend is gaming on an RX 560 waiting for prices to hit sanity. He's running out of patience. Others have bailed.
I view our dormant GPUs as the best weapon against cryptocurrency mining. Destroy it from the inside. It's win-win for most of us. Either we earn enough for more upgrades, or we depress pricing. Something's got to give.
In other words, y'all f*ckers better start mining, because I want Volta to be reasonably priced when it launches so I can get an EVGA x80 Hybrid to go with a G-Sync monitor. And if this doesn't happen, I'm going to be cranky!
Seriously though, thanks for reading.
submitted by jaykresge to pcgaming [link] [comments]

Centralized and decentralized exchanges explained

TOKENS TEAM | JULY 8, 2019 | 5 min read
Centralized and decentralized exchanges explained
Cryptocurrencies are digital assets designed to work as a medium of exchange using cryptography and distributed ledger technology without physical form. When managing cryptocurrencies, everyone comes across a transaction. This can happen on different occasions, but most commonly you exchange one good for another. In this instance of buying or selling, picking the right platform is crucial.
In the 10 years since Bitcoin’s public announcement, exchanging has advanced from person-to-person transactions to more complex P2P trading platforms. An online exchange is the most straightforward way to do a transaction of a cryptocurrency, but it is not limited to this medium. You can exchange cryptocurrencies over-the-counter (OTC), at a local exchange, at crypto ATMs, via brokers, and more. Picking the right system for your exchanging is dependent on your skillset, your buying or selling style, and your preference.
An online cryptocurrency trading platform has functions similar to those of a traditional brokerage or stock market; it’s just that it is online. An online exchange is a website that provides you the platform for trading. They can range from beginner-friendly to pro user, can be either fiat-crypto exchange or crypto-to-crypto (C2C) exchange according to the currency used, and can differ from one to another by its basic architecture. Each platform has its own characteristics and advantages and not all are created equal.
When choosing the most suitable online cryptocurrency exchange you have to consider a few basic characteristics. Of great importance is the security level of an exchange, its reputation, the fees they charge (deposit, withdrawal, trading fee), what exchange rate they have (not all exchanges have the same exchange rate), which payment methods can be used, any geographical restrictions, identity verification requirements, and the requirements with KYC/AML procedures.
DYOR – do your own research
DYOR – do your own research. Always. We are here to provide you with information, but this is one of the main rules in crypto, so do not neglect it.
We are a centralized crypto-to-crypto exchange (CCE). We emphasize security, reliability and user experience. Try Tokens.net platform. Our counterpart is a decentralized exchange (DEX) and the main differences are summed up in the following features:
The first and most evident difference is regarding AUTHORITY. A CCE is owned by a formal entity registered at a jurisdiction and DEX is a non-regulated platform provider, serving as a matching and routing layer for trade orders. For easier representation, the equivalent in the physical world would be a supermarket for formal exchange and a flea marketplace that’s non-regulated by jurisdiction.

The second feature of exchange, equally important, is exchanges’ LIQUIDITY, which refers to the ability of digital assets to be converted into cash, coins or tokens easily. Liquidity is an indicator of how many market makers could pull in a significant number of takers. CCE normally has higher liquidity than DEX because it has more users willing to trade, it is faster due to doing transactions in the backend instead of doing transactions directly on the blockchain network, and it has higher trading volume.
TRADE VOLUME refers to the amount of coins being traded on an exchange in the past 24 hours. The volume reflects the market’s activity of an asset, where higher volume indicates higher demand for exchanging. Trade volume influences liquidity; more users > more volume > more liquidity. Centralized exchanges have higher trade volume and you can sell/buy larger amounts of the desired cryptocurrency, while DEX, because of its difficulty to use and limited functionality, has fewer users and consequently lower trade volume and lower liquidity.
TRADING OPTIONS are greater on centralized exchanges. Decentralized exchange offers only one type of trading. The trader sets the price and quantity in the order book and if somebody finds this deal acceptable, the transaction will be executed. Centralized exchanges have more functionalities. At Tokens.net platform, this includes click trade, limit order, and under limit order, take profit.
Of great importance is SAFETY. No exchange is immune to hacks, but in this area DEX is typically less risky because of its distribution of nodes. However, as safety also applies to users handling their assets, a CCE offers a greater safety net for its users, and it is not exceptional that users use CCE also as a wallet. For this reason, it is riskier for a beginner than for a pro user to use a DEX.

EASE OF USE: Less-skilled users are safer when exchanging on a centralized exchange. CCE is easier to use due to its nature of being a business and having a support team answering unresolved questions, while the use of decentralized exchange requires a technically advanced trader. Having to use your private wallet and link it to the exchange poses a greater risk for safety, mentioned above.
EXCHANGES AVAILABILITY: CCE is potentially more prone to downtime due to maintenance, even if we are setting the bar very high.
When choosing the right platform, consider your trading style and technical skills. They will probably be the determining factor for your choice.
The disadvantage of using a centralized exchange is that a user does not have access to private keys. The exchange is owned by a company and so are crypto wallets’ private keys. An exchange nonetheless has a liability towards the user and this is regulated by law. Normally a user would want to access the private key but for active trading this does not prove to be of high importance.
In comparison, a decentralized exchange that demands a higher technical knowledge from the user does not operate on a base of deposits and withdrawals and the user uses their private wallet. There is no company and no company’s wallet. But this trade-off brings other challenges.
Decentralized exchange does not provide customer support when the user has a question or is unsure of exchanging events.
In conclusion, make the decision regarding which type of exchange you are going to use according to your needs and trust.
CCEs currently dominate the cryptocurrency exchange world despite blockchain’s decentralized architecture because of their ease of use, bigger selection of trading types, higher speed and higher liquidity. In contrast, decentralized exchanges are harder to use. While you have control over your assets, they have lower trading volume and lower liquidity, so selling and buying large amount of cryptocurrency is harder. In addition, transactions are dependent on the network and can take time. Worldwide centralized exchanges are much more popular and used more often than decentralized exchanges due to their security, support, and the reassurance of using actual financial services. At Tokens.net we wish to provide excellent exchange tools at the highest level of security.
Author: Tokens Team
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submitted by tokensExchange to TokensExchange [link] [comments]

Elaborating on Datadash's 50k BTC Prediction: Why We Endorse the Call

As originally published via CoinLive
I am the Co-Founder at CoinLive. Prior to founding Coinlive.io, my area of expertise was inter-market analysis. I came across Datadash 50k BTC prediction this week, and I must take my hats off to what I believe is an excellent interpretation of the inter-connectivity of various markets.
At your own convenience, you can find a sample of Intermarket analysis I've written in the past before immersing myself into cryptos full-time.
Gold inter-market: 'Out of sync' with VIX, takes lead from USD/JPY
USD/JPY inter-market: Watch divergence US-Japan yield spread
EUUSD intermarket: US yields collapse amid supply environment
Inter-market analysis: Risk back in vogue, but for how long?
USD/JPY intermarket: Bulls need higher adj in 10-y US-JP spread
The purpose of this article is to dive deeper into the factors Datadash presents in his video and how they can help us draw certain conclusions about the potential flows of capital into crypto markets and the need that will exist for a BTC ETF.
Before I do so, as a brief explainer, let's touch on what exactly Intermarket analysis refers to:
Intermarket analysis is the global interconnectivity between equities, bonds, currencies, commodities, and any other asset class; Global markets are an ever-evolving discounting and constant valuation mechanism and by studying their interconnectivity, we are much better positioned to explain and elaborate on why certain moves occur, future directions and gain insights on potential misalignments that the market may not have picked up on yet or might be ignoring/manipulating.
While such interconnectivity has proven to be quite limiting when it comes to the value one can extract from analyzing traditional financial assets and the crypto market, Datadash has eloquently been able to build a hypothesis, which as an Intermarket analyst, I consider very valid, and that matches up my own views. Nicolas Merten constructs a scenario which leads him to believe that a Bitcoin ETF is coming. Let's explore this hypothesis.
I will attempt to summarize and provide further clarity on why the current events in traditional asset classes, as described by Datadash, will inevitably result in a Bitcoin ETF. Make no mistake, Datadash's call for Bitcoin at 50k by the end of 2018 will be well justified once a BTC ETF is approved. While the timing is the most challenging part t get right, the end result won't vary.
If one wishes to learn more about my personal views on why a BTC ETF is such a big deal, I encourage you to read my article from late March this year.
Don't Be Misled by Low Liquidity/Volume - Fundamentals Never Stronger
The first point Nicholas Merten makes is that despite depressed volume levels, the fundamentals are very sound. That, I must say, is a point I couldn't agree more. In fact, I recently wrote an article titled The Paradox: Bitcoin Keeps Selling as Intrinsic Value Set to Explode where I state "the latest developments in Bitcoin's technology makes it paradoxically an ever increasingly interesting investment proposition the cheaper it gets."
However, no article better defines where we stand in terms of fundamentals than the one I wrote back on May 15th titled Find Out Why Institutions Will Flood the Bitcoin Market, where I look at the ever-growing list of evidence that shows why a new type of investors, the institutional ones, looks set to enter the market in mass.
Nicholas believes that based on the supply of Bitcoin, the market capitalization can reach about $800b. He makes a case that with the fundamentals in bitcoin much stronger, it wouldn't be that hard to envision the market cap more than double from its most recent all-time high of more than $300b.
Interest Rates Set to Rise Further
First of all, one of the most immediate implications of higher rates is the increased difficulty to bear the costs by borrowers, which leads Nicholas to believe that banks the likes of Deutsche Bank will face a tough environment going forward. The CEO of the giant German lender has actually warned that second-quarter results would reflect a “revenue environment [that] remains challenging."
Nicholas refers to the historical chart of Eurodollar LIBOR rates as illustrated below to strengthen the case that interest rates are set to follow an upward trajectory in the years to come as Central Banks continue to normalize monetary policies after a decade since the global financial crisis. I'd say, that is a correct assumption, although one must take into account the Italian crisis to be aware that a delay in higher European rates is a real possibility now.
![](https://coinlive.io/ckeditor_assets/pictures/947/content_2018-05-30_1100.png)
Let's look at the following combinations: Fed Fund Rate Contract (green), German 2-year bond yields (black) and Italy's 10-year bond yield (blue) to help us clarify what's the outlook for interest rates both in Europe and the United States in the foreseeable future. The chart suggests that while the Federal Reserve remains on track to keep increasing interest rates at a gradual pace, there has been a sudden change in the outlook for European rates in the short-end of the curve.
While the European Central Bank is no longer endorsing proactive policies as part of its long-standing QE narrative, President Mario Draghi is still not ready to communicate an exit strategy to its unconventional stimulus program due to protectionism threats in the euro-area, with Italy the latest nightmare episode.
Until such major step is taken in the form of a formal QE conclusion, interest rates in the European Union will remain depressed; the latest drastic spike in Italy's benchmark bond yield to default levels is pre-emptive of lower rates for longer, an environment that on one hand may benefit the likes of Deutsche Bank on lower borrowing costs, but on the other hand, sets in motion a bigger headache as risk aversion is set to dominate financial markets, which leads to worse financial consequences such as loss of confidence and hence in equity valuations.
![](https://coinlive.io/ckeditor_assets/pictures/948/content_2018-05-30_1113.png)
Deutsche Bank - End of the Road?
Nicholas argues that as part of the re-restructuring process in Deutsche Bank, they will be facing a much more challenging environment as lending becomes more difficult on higher interest rates. At CoinLive, we still believe this to be a logical scenario to expect, even if a delay happens as the ECB tries to deal with the Italian political crisis which once again raises the question of whether or not Italy should be part of the EU. Reference to an article by Zerohedge is given, where it states:
"One day after the WSJ reported that the biggest German bank is set to "decimate" its workforce, firing 10,000 workers or one in ten, this morning Deutsche Bank confirmed plans to cut thousands of jobs as part of new CEO Christian Sewing's restructuring and cost-cutting effort. The German bank said its headcount would fall “well below” 90,000, from just over 97,000. But the biggest gut punch to employee morale is that the bank would reduce headcount in its equities sales and trading business by about 25%."
There is an undeniably ongoing phenomenon of a migration in job positions from traditional financial markets into blockchain, which as we have reported in the past, it appears to be a logical and rational step to be taken, especially in light of the new revenue streams the blockchain sector has to offer. Proof of that is the fact that Binance, a crypto exchange with around 200 employees and less than 1 year of operations has overcome Deutsche Bank, in total profits. What this communicates is that the opportunities to grow an institution’s revenue stream are formidable once they decide to integrate cryptocurrencies into their business models.
One can find an illustration of Deutsche Bank's free-fall in prices below:
![](https://coinlive.io/ckeditor_assets/pictures/946/content_2018-05-30_1052.png)
Nicholas takes notes of a chart in which one can clearly notice a worrying trend for Italian debt. "Just about every other major investor type has become a net seller (to the ECB) or a non-buyer of BTPs over the last couple of years. Said differently, for well over a year, the only marginal buyer of Italian bonds has been the ECB!", the team of Economists at Citi explained. One can find the article via ZeroHedge here.
![](https://coinlive.io/ckeditor_assets/pictures/953/content_2018-05-30_1451.png)
Equities & Housing to Suffer the Consequences
Nicholas notes that trillions of dollars need to exit these artificially-inflated equity markets. He even mentions a legendary investor such as George Soros, who has recently warned that the world could be on the brink of another devastating financial crisis, on lingering debt concerns in Europe and a strengthening US dollar, as a destabilizing factor for both the US's emerging- and developed-market rivals.
Ray Dalio, another legend in the investing world and Founder of Bridgewater Associates, the world’s largest hedge fund, "has ramped up its short positions in European equities in recent weeks, bringing their total value to an estimated $22 billion", MarketWatch reports.
Nicholas extracts a chart by John Del Vecchio at lmtr.com where it illustrates the ratio between stocks and commodities at the lowest in over 50 years.
As the author states:
"I like to look for extremes in the markets. Extremes often pinpoint areas where returns can be higher and risk lower than in other time periods. Take the relationship between commodities and stocks. The chart below shows that commodities haven not been cheaper than stocks in a generation. We often hear this time it is different” to justify what’s going on in the world. But, one thing that never changes is human nature. People push markets to extremes. Then they revert. "
![](https://coinlive.io/ckeditor_assets/pictures/954/content_2018-05-30_1459.png)
Bitcoin ETF the Holy Grail for a Cyclical Multi-Year Bull Run
It is precisely from this last chart above that leads Nicholas to believe we are on the verge of a resurgence in commodity prices. Not only that but amid the need of all this capital to exit stocks and to a certain extent risky bonds (Italian), a new commodity-based digital currency ETF based on Bitcoin will emerge in 2018.
The author of Datadash highlights the consideration to launching a Bitcoin ETF by the SEC. At CoinLive, our reporting of the subject can be found below:
"Back in April, it was reported that the US Securities and Exchange Commission (SEC) has put back on the table two Bitcoin ETF proposals, according to public documents. The agency is under formal proceedings to approve a rule change that would allow NYSE Arca to list two exchange-traded funds (ETFs) proposed by fund provider ProShares. The introduction of an ETF would make Bitcoin available to a much wider share of market participants, with the ability to directly buy the asset at the click of a button, essentially simplifying the current complexity that involves having to deal with all the cumbersome steps currently in place."
Nicholas refers to the support the Bitcoin ETF has been receiving by the Cboe president Chris Concannon, which is a major positive development. CoinLive reported on the story back in late March, noting that "a Bitcoin ETF will without a doubt open the floodgates to an enormous tsunami of fresh capital entering the space, which based on the latest hints by Concannon, the willingness to keep pushing for it remains unabated as the evolution of digital assets keeps its course."
It has been for quite some time CoinLive's conviction, now supported by no other than Nicholas Merten from Datadash, that over the next 6 months, markets will start factoring in the event of the year, that is, the approval of a Bitcoin ETF that will serve as a alternative vehicle to accommodate the massive flows of capital leaving some of the traditional asset classes. As Nicholas suggests, the SEC will have little choice but to provide alternative investments.
Bitcoin as a Hedge to Lower Portfolios' Volatility
Last but not least, crypto assets such as Bitcoin and the likes have an almost non-existent correlation to other traditional assets such as stocks, bonds, and commodities, which makes for a very attractive and broadly-applicable diversification strategy for the professional money as it reduces one’s portfolio volatility. The moment a Bitcoin ETF is confirmed, expect the non-correlation element of Bitcoin as a major driving force to attract further capital.
Anyone Can Be Wrong Datadash, But You Won't be Wrong Alone
Having analyzed the hypothesis by Nicholas Merten, at CoinLive we believe that the conclusion reached, that is, the creation of a Bitcoin ETF that will provide shelter to a tsunami of capital motivated by the diversification and store of value appeal of Bitcoin, is the next logical step. As per the timing of it, we also anticipate, as Nicholas notes, that it will most likely be subject to the price action in traditional assets. Should equities and credit markets hold steady, it may result in a potential delay, whereas disruption in the capital market may see the need for a BTC ETF accelerate. Either scenario, we will conclude with a quote we wrote back in March.
"It appears as though an ETF on Bitcoin is moving from a state of "If" to "When."
Datadash is certainly not alone on his 50k call. BitMEX CEO Arthur Hayes appears to think along the same line.
On behalf of the CoinLive Team, we want to thank Nicholas Merten at Datadash for such enlightening insights.
submitted by Ivo333 to BitcoinMarkets [link] [comments]

The Massive Value Prop of SUMOkoin: a Corporate Lawyer's Analysis

Can you guys help us all out and upvote those posts?
Trying to do my part to spread the word.
MERRY CHRISTMAS TEAM! (SKIP TO END FOR TLDR :)
[Note: this post was originally drafted on Christmas Day and subsequently edited]
[Disclaimer: I am posting this in triplicate on cryptocurrency cryptomarkets monero for visibility]

***Intro*** 
This is my first try at one of these. I am going to make a case for SUMOkoin (SUMO on Cryptopia) from a pure VALUE perspective. I’ve been researching privacy coins deeply and feel I’ve reached a sufficient conclusion to merit sharing SUMO.
SUMOkoin is a fork of MONERO (XMR). In my opinion, XMR is hands down the most undervalued coin in the top 15. Once people figure out how to value privacy into the value of a coin, XMR, along with the other privacy coins like SUMO, will skyrocket.
I am not here to argue SUMO is superior to XMR. That’s not what this post is about. I don’t find debating the merits of SUMO vs. XMR interesting as investing in SUMO has nothing to do with SUMO overtaking XMR. If anything, I’d argue that the merits of XMR underline the value of SUMO. What I do find interesting is return on investment (“ROI”). If you do want to argue about XMR vs. SUMO, I can point you to this infographic: https://i.redd.it/0eqfkg1hq2501.jpg

***Background*** 
I’m a corporate lawyer in Silicon Valley. my practice focuses on venture capital financing (“VC)”) and mergers & acquisitions (“M&A”). basically I spend all day every fucking day reviewing and revising cap tables, stock purchase agreements and merger agreements.
I started using BTC in 2014 in conjunction with silk road and TOR. I had a minor conniption when I recently calculated how much BTC I handled in 2014. My 2017 has been good with IOTA at sub $0.30, POWR at $0.12, ENJIN at $0.02, REQ at $0.05, ENIGMA, and PHORE.
My crypto investing philosophy is based on betting long odds. As Warren Buffet said, consolidate to get rich, diversify to stay rich. That said I strongly recommend you have an IRA and/or 401(k) in place prior to venturing into crypto. But when it comes to crypto, I’d happily strike out several times to have a chance at hitting a 100x. This is probably born out of working with VCs who do the same only with companies, not coins. I view myself as a mini-VC in the cryptosphere.
__
The Number 1 thing I've taken away from corporate law is that it pays to get in EARLY
Did you know that the typical founder buys their shares for $0.00001 per share? So if a founder owns 5 million shares, they bought those shares for $50 total. The typical IPO goes out the door at $10-20 per share. My iPhone calculator says ERROR when it tries to divide $10/0.00001 because it runs out of screen space.
At the time of this writing, SUMO has a Marketcap of $5 million. Given it’s market cap and its XMR-likeness, I am positive SUMO is the best value investment in the Privacy Coin arena at this time. PHR is another competitor, but at $50m market cap, I feel it has lost its mega potential for you and me.

***Merits of SUMO*** 
So what’s so good about SUMOkoin? Didn’t you say it was just a Monero knock-off?
1) Well, sort of. SUMO is based on CryptoNote and was conceived from a fork of Monero, with a little bit of extra privacy thrown in. It would not be wrong to think SUMO is to Litecoin as XMR is to Bitcoin.
2) Increased Privacy. Which brings us to point 2. SUMO is doing a couple things to increase privacy and nimbleness simultaneously. Monero currently does many of these too — though at the fork MONERO could not. Don’t forget Monero is also 5.5 billion market cap to SUMO’s 5 million.
a) RingCT. All transactions are RingCT (ring confidential transactions) and the minimum “mixin” transactions is 13 (12 plus the original transaction) which gives passes the threshold to resist blockchain attacks. No transactions made on the SUMO blockchain can ever be traced to the actual participants. Nifty huh?
b) Sub-addresses. The wallet deploys disposable sub-addresses to conceal your real sumo wallet address even from senders (who typically would need to know your actual address to send currency). Monero also does this.
3) Fungibility aka “Digital Cash”. This term gets thrown about a bunch, but basically, it means ‘how close is this coin to cash in terms of usage?’ Well, Sumokoin is one of a few cryptos that can boast true fungibility — SUMO can act just like physical cash i.e. no other people can find where the money comes from and how many have been transferred.
5) Mining Made Easy Mode. Seeing as SUMO was a fork, and not an ICO, they didn’t have to rewrite the wheel. Instead they focused on putting together some solid fundamentals like a great wallet and a dedicated mining application that lets you start mining with your current CPU. Check out the “Sumojoin Easy Minder” - simply run and start mining.
6) Intuitive and Secure Wallet. This shouldn’t come as a surprise, yet in this day and age, apparently it is not a prereq. They already have a GUI wallet, litewallet, plus those unlimited sub-addresses to boot that I mentioned above.
7) Decentralization. SUMO is botnet-proof, and therefore botnet mining resistant. When a botnet joins a mining pool, it adjusts the mining difficulty, thereby balancing the difficulty level of mining.
8) Dev Team // Locked Coins // Future Development Funds. There are lots of things that make this coin a ‘go.’ but perhaps the most overlooked in crypto is that the devs have done an excellent job delivering ahead of schedule. If you’re an engineer or have managed projects, you know how difficult hitting projected deadlines can be. These guys update github very frequently and there is a high degree of visibility. The devs have also time-locked their pre-mine in a publicly view-able wallet for years so they aren't bailing out with a pump and dump. The dev team is based in Japan.
9) Broad Appeal. If marketed properly, SUMO has the ability to appeal to older individuals venturing into crypto due to the fungibility / similarities to cash. This is not different than XMR, and I expect it will be exploited in 2018 by all privacy coins. It could breed familiarity with new money, and new money is the future of crypto.
10) Marketing. Which brings me to my final point - and it happens to be a weakness. SUMO needs a community effort to distribute information to the masses. A good example is Vert Coin. Their team is very good at disseminating information. I’m not talking about hyping a coin; I’m talking about how effectively can you spread facts about your product to the masses.
To get mainstream SUMO needs something like this VertCoin post: https://www.reddit.com/vertcoin/comments/7ixkbf/vertbase_a_vertcoin_to_usd_exchange/

***Market Cap Discussion*** 
For a coin with using Monero’s tech, 5 million is minuscule. For any coin, 5 mil is nothing. Some MC comparisons [as of December 25th, 2017]:

Let's talk about market cap ("MC") for a minute.
It gets tossed around a lot, but I don’t think people appreciate how important getting in early can be. Say you buy into SUMO at 5 million MC. Things go well and 20 million new money gets poured into SUMO. Now the MC is 25 million. Your gains are 4x (you invested $1,000 and now you have 5,000, netting 4,000).
Now let’s says say you bought at 10 million instead of 5 million. $15 mill gets poured in until the MC again reaches 25 mil. Your gains are 1.5x (you put in $1,000, you now have 2,500, netting 1,500)
Remember: investing at 5 mil MC vs. 10 mil MC represents an EXTREMELY subtle shift in time of investment (“TOI”). But the difference in net profit is dramatic. the biggest factor is that your ROI multiplier is locked in at your TOI — meaning every 25 million that gets added to the MC pot, you 4X you're returns.
Example MC = 100
I strongly believe SUMO can and will 20x in Q1 2018 and 100x by end of Q4 2018 reach $500,000 MC. There is ample room for a tricked out Monero clone at 500 MC. That’s 100x.
Guess how many coins have 500 mil market caps? 48 as of this writing. 48! Have many of these coins with about ~500 mil MC have you heard of?
MaidSafeCoin?
Status?
Decred?
Veritaseum?
SUMO has potential to surpass those.

***The Importance of Privacy*** 
I want to close with a brief discussion of privacy as it relates to fundamental rights and as to crypto. 2018 will be remembered as the Year of Privacy Coins. Privacy has always been at the core of crypto. This is no coincidence. “Privacy” is the word we have attached to the concept of possessing the freedom to do as you please within the law without explaining yourself to the government or financial institution.
Discussing privacy from a financial perspective is difficult because it has very deep political significance. But that is precisely why it is so valuable.
Privacy is the right of billions of people not to be surveilled. We live in a world where every single transaction you do through the majority financial system is recorded, analyzed and sold — and yet where the money goes is completely opaque. Our transactions are visible from the top, but we can’t see up. Privacy coins turn that upside down.
Privacy is a human right. It is the guarantor of American constitutional freedom. It is the cornerstone of freedoms of expression, association, political speech and all our other freedoms for that matter. And privacy coins are at the root of that freedom. What the internet did for freedom of information, privacy coins will do for freedom of financial transactions.

***TL;DR:*** 
2018 = Year of Privacy Coins // Monero is legit aka is the most undervalued coin in the Top 15 // SUMO is low MC clone meaning great ROI opportunity // ROI is everything // did I mention ROI is everything? // Consolidate to get rich; diversify to stay rich // extra strong code foundation + strong dev team + SUMO team financial incentives locked in multi-year vesting schedule // un-limited sub-addresses associated with Wallet & Litewallet means complete anonynimity // RingCT w/ 12+1 minimum mixins means complete confidentiality // legit Fungibility (like cash) means MARKET VALUE of privacy is baked into the currency // Mining Made Easy for those interested/able // is Botnet mining resistant // has unique market appeal to UNSOPHISTICATED DEEP pockets due to similarity to cash.

Legal Disclaimer
THIS POST AND ANY SUBSEQUENT STATEMENTS BY THE AUTHOR DO NOT CONSTITUTE LEGAL OR FINANCIAL ADVICE AND IS NOT INTENDED TO BE LEGAL OR FINANCIAL ADVICE OR RELIED UPON. NO REFERENCES TO THIS POST SHALL BE CONSTRUED AS LEGAL OR FINANCIAL ADVICE. THIS POST REPRESENTS THE LONE OPINION OF A NON-SOPHISTICATED INVESTOR.
submitted by UCBerzerkeley to sumokoin [link] [comments]

The Massive Value Prop of SUMOkoin: a Corporate Lawyer's Analysis

https://coinmarketcap.com/currencies/sumokoin/
MERRY CHRISTMAS TEAM! (SKIP TO END FOR TLDR :)
[Note: this post was originally drafted on Christmas Day and subsequently edited]
[Disclaimer: I am posting this in triplicate on cryptocurrency cryptomarkets monero for visibility]

***Intro*** 
This is my first try at one of these. I am going to make a case for SUMOkoin (SUMO on Cryptopia) from a pure VALUE perspective. I’ve been researching privacy coins deeply and feel I’ve reached a sufficient conclusion to merit sharing SUMO.
SUMOkoin is a fork of MONERO (XMR). In my opinion, XMR is hands down the most undervalued coin in the top 15. Once people figure out how to value privacy into the value of a coin, XMR, along with the other privacy coins like SUMO, will skyrocket.
I am not here to argue SUMO is superior to XMR. That’s not what this post is about. I don’t find debating the merits of SUMO vs. XMR interesting as investing in SUMO has nothing to do with SUMO overtaking XMR. If anything, I’d argue that the merits of XMR underline the value of SUMO. What I do find interesting is return on investment (“ROI”). If you do want to argue about XMR vs. SUMO, I can point you to this infographic: https://i.redd.it/0eqfkg1hq2501.jpg

***Background*** 
I’m a corporate lawyer in Silicon Valley. my practice focuses on venture capital financing (“VC)”) and mergers & acquisitions (“M&A”). basically I spend all day every fucking day reviewing and revising cap tables, stock purchase agreements and merger agreements.
I started using BTC in 2014 in conjunction with silk road and TOR. I had a minor conniption when I recently calculated how much BTC I handled in 2014. My 2017 has been good with IOTA at sub $0.30, POWR at $0.12, ENJIN at $0.02, REQ at $0.05, ENIGMA, and PHORE.
My crypto investing philosophy is based on betting long odds. As Warren Buffet said, consolidate to get rich, diversify to stay rich. That said I strongly recommend you have an IRA and/or 401(k) in place prior to venturing into crypto. But when it comes to crypto, I’d happily strike out several times to have a chance at hitting a 100x. This is probably born out of working with VCs who do the same only with companies, not coins. I view myself as a mini-VC in the cryptosphere.
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The Number 1 thing I've taken away from corporate law is that it pays to get in EARLY
Did you know that the typical founder buys their shares for $0.00001 per share? So if a founder owns 5 million shares, they bought those shares for $50 total. The typical IPO goes out the door at $10-20 per share. My iPhone calculator says ERROR when it tries to divide $10/0.00001 because it runs out of screen space.
At the time of this writing, SUMO has a Marketcap of $5 million. Given it’s market cap and its XMR-likeness, I am positive SUMO is the best value investment in the Privacy Coin arena at this time. PHR is another competitor, but at $50m market cap, I feel it has lost its mega potential for you and me.

***Merits of SUMO*** 
So what’s so good about SUMOkoin? Didn’t you say it was just a Monero knock-off?
1) Well, sort of. SUMO is based on CryptoNote and was conceived from a fork of Monero, with a little bit of extra privacy thrown in. It would not be wrong to think SUMO is to Litecoin as XMR is to Bitcoin.
2) Increased Privacy. Which brings us to point 2. SUMO is doing a couple things to increase privacy and nimbleness simultaneously. Monero currently does many of these too — though at the fork MONERO could not. Don’t forget Monero is also 5.5 billion market cap to SUMO’s 5 million.
a) RingCT. All transactions are RingCT (ring confidential transactions) and the minimum “mixin” transactions is 13 (12 plus the original transaction) which gives passes the threshold to resist blockchain attacks. No transactions made on the SUMO blockchain can ever be traced to the actual participants. Nifty huh?
b) Sub-addresses. The wallet deploys disposable sub-addresses to conceal your real sumo wallet address even from senders (who typically would need to know your actual address to send currency). Monero also does this.
3) Fungibility aka “Digital Cash”. This term gets thrown about a bunch, but basically, it means ‘how close is this coin to cash in terms of usage?’ Well, Sumokoin is one of a few cryptos that can boast true fungibility — SUMO can act just like physical cash i.e. no other people can find where the money comes from and how many have been transferred.
5) Mining Made Easy Mode. Seeing as SUMO was a fork, and not an ICO, they didn’t have to rewrite the wheel. Instead they focused on putting together some solid fundamentals like a great wallet and a dedicated mining application that lets you start mining with your current CPU. Check out the “Sumojoin Easy Minder” - simply run and start mining.
6) Intuitive and Secure Wallet. This shouldn’t come as a surprise, yet in this day and age, apparently it is not a prereq. They already have a GUI wallet, litewallet, plus those unlimited sub-addresses to boot that I mentioned above.
7) Decentralization. SUMO is botnet-proof, and therefore botnet mining resistant. When a botnet joins a mining pool, it adjusts the mining difficulty, thereby balancing the difficulty level of mining.
8) Dev Team // Locked Coins // Future Development Funds. There are lots of things that make this coin a ‘go.’ but perhaps the most overlooked in crypto is that the devs have done an excellent job delivering ahead of schedule. If you’re an engineer or have managed projects, you know how difficult hitting projected deadlines can be. These guys update github very frequently and there is a high degree of visibility. The devs have also time-locked their pre-mine in a publicly view-able wallet for years so they aren't bailing out with a pump and dump. The dev team is based in Japan.
9) Broad Appeal. If marketed properly, SUMO has the ability to appeal to older individuals venturing into crypto due to the fungibility / similarities to cash. This is not different than XMR, and I expect it will be exploited in 2018 by all privacy coins. It could breed familiarity with new money, and new money is the future of crypto.
10) Marketing. Which brings me to my final point - and it happens to be a weakness. SUMO needs a community effort to distribute information to the masses. A good example is Vert Coin. Their team is very good at disseminating information. I’m not talking about hyping a coin; I’m talking about how effectively can you spread facts about your product to the masses.
To get mainstream SUMO needs something like this VertCoin post: https://www.reddit.com/vertcoin/comments/7ixkbf/vertbase_a_vertcoin_to_usd_exchange/

***Market Cap Discussion*** 
For a coin with using Monero’s tech, 5 million is minuscule. For any coin, 5 mil is nothing. Some MC comparisons [as of December 25th, 2017]:

Let's talk about market cap ("MC") for a minute.
It gets tossed around a lot, but I don’t think people appreciate how important getting in early can be. Say you buy into SUMO at 5 million MC. Things go well and 20 million new money gets poured into SUMO. Now the MC is 25 million. Your gains are 4x (you invested $1,000 and now you have 5,000, netting 4,000).
Now let’s says say you bought at 10 million instead of 5 million. $15 mill gets poured in until the MC again reaches 25 mil. Your gains are 1.5x (you put in $1,000, you now have 2,500, netting 1,500)
Remember: investing at 5 mil MC vs. 10 mil MC represents an EXTREMELY subtle shift in time of investment (“TOI”). But the difference in net profit is dramatic. the biggest factor is that your ROI multiplier is locked in at your TOI — meaning every 25 million that gets added to the MC pot, you 4X you're returns.
Example MC = 100
I strongly believe SUMO can and will 20x in Q1 2018 and 100x by end of Q4 2018 reach $500,000 MC. There is ample room for a tricked out Monero clone at 500 MC. That’s 100x.
Guess how many coins have 500 mil market caps? 48 as of this writing. 48! Have many of these coins with about ~500 mil MC have you heard of?
MaidSafeCoin?
Status?
Decred?
Veritaseum?
SUMO has potential to surpass those.

***The Importance of Privacy*** 
I want to close with a brief discussion of privacy as it relates to fundamental rights and as to crypto. 2018 will be remembered as the Year of Privacy Coins. Privacy has always been at the core of crypto. This is no coincidence. “Privacy” is the word we have attached to the concept of possessing the freedom to do as you please within the law without explaining yourself to the government or financial institution.
Discussing privacy from a financial perspective is difficult because it has very deep political significance. But that is precisely why it is so valuable.
Privacy is the right of billions of people not to be surveilled. We live in a world where every single transaction you do through the majority financial system is recorded, analyzed and sold — and yet where the money goes is completely opaque. Our transactions are visible from the top, but we can’t see up. Privacy coins turn that upside down.
Privacy is a human right. It is the guarantor of American constitutional freedom. It is the cornerstone of freedoms of expression, association, political speech and all our other freedoms for that matter. And privacy coins are at the root of that freedom. What the internet did for freedom of information, privacy coins will do for freedom of financial transactions.

***TL;DR:*** 
2018 = Year of Privacy Coins // Monero is legit aka is the most undervalued coin in the Top 15 // SUMO is low MC clone meaning great ROI opportunity // ROI is everything // did I mention ROI is everything? // Consolidate to get rich; diversify to stay rich // extra strong code foundation + strong dev team + SUMO team financial incentives locked in multi-year vesting schedule // un-limited sub-addresses associated with Wallet & Litewallet means complete anonynimity // RingCT w/ 12+1 minimum mixins means complete confidentiality // legit Fungibility (like cash) means MARKET VALUE of privacy is baked into the currency // Mining Made Easy for those interested/able // is Botnet mining resistant // has unique market appeal to UNSOPHISTICATED DEEP pockets due to similarity to cash.

Legal Disclaimer
THIS POST AND ANY SUBSEQUENT STATEMENTS BY THE AUTHOR DO NOT CONSTITUTE LEGAL OR FINANCIAL ADVICE AND IS NOT INTENDED TO BE LEGAL OR FINANCIAL ADVICE OR RELIED UPON. NO REFERENCES TO THIS POST SHALL BE CONSTRUED AS LEGAL OR FINANCIAL ADVICE. THIS POST REPRESENTS THE LONE OPINION OF A NON-SOPHISTICATED INVESTOR.
submitted by UCBerzerkeley to CryptoCurrency [link] [comments]

Debunked: "Bitcoin needs to become a store of value before it can be used as a medium of exchange."

Savings and consumption go hand in hand. One is quite useless without the other and if you try to base your money solely on store of value or rapid deflation — basically for sake of seeing a number on a screen appreciate — then you are running a pump scheme desperately looking for others to provide you with the real justification for the exceedingly higher price and you are just as much against sound money as anyone instead preferring to see it depreciate.
This is the case even if you think that you will necessarily have the use value in commerce of that same number created increase in relation to other goods or necessarily keep the same price tag on the global market later when you finally decide to reconfigure it's attributes. The market will not treat your coin the same way once you give it an actual use case besides speculation and there can be no guarantees as to its price once you stop those actions that made it rise in price so far.

Central planning or manipulation of the price system through the introduction of artificial shortages do not make sound money, no matter your intentions or the direction price takes in order to compensate for your shenanigans.

Bubbles form in environments where for one reason or another demand becomes artificially great in relation to supply considering somethings non-speculative use case. What is done to the price of an asset by systematically forcing rapid deflation is the private equivalent of what the central banks of the world do to all other assets when they are devaluing their locally prescribed fiat currency. It may sound better for savers, but is just as unsustainable and in fact erodes the point of regularly increasing ones savings in the first place.
Without having a monopoly, trade in the actual underlying asset thus historically tends to be replaced with much more risky promissary notes used off the record (off chain) and diminish overall in favor off any and all comparable alternatives that provide better liquidity. Trade in the underlying asset may never stop entirely, but it's connection to the rest of the productive economy has significantly worsened and made it's use increasingly unproductive except where absolutely needed.
To quote Objectivist philosopher Ayn Rand, a big proponent of money as a store of value,
Money is a tool of exchange; it represents wealth only so long as it can be traded for material goods and services. Wealth does not grow in nature; it has to be produced by men. . .
. . When people refuse to consider the source of wealth, what they refuse to recognize is the fact that wealth is the product of man’s intellect, of his creative ability, fully as much as is art, science, philosophy or any other human value.
Source: The Objectivist Forum
and
So you think that money is the root of all evil? . . . Have you ever asked what is the root of money? Money is a tool of exchange, which can’t exist unless there are goods produced and men able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value. Money is not the tool of the moochers, who claim your product by tears, or of the looters, who take it from you by force. Money is made possible only by the men who produce. Is this what you consider evil?
Source: For the New Intellectual
As per Satoshis design — now arguably better implemented in the form of Bitcoin Cash — bitcoins were always a store of value, because they represented the fungible results of hours of precious computing power that had been consciously expended in order to create them.
They clearly had value to the creator and they also clearly were fungible enough to be divisible into very small pieces and easily passed on to another wallet held by Satoshi himself or by one of his earliest friends to join him in running the network.
The Bitcoin design had been created as the productive response to issues of the past that all stemmed from the problem of having to trust in the reliability of a third party as mediator in any money transactions. It mitigated abusive banking policies and it used competitive market principles rather than a mint or other overseer to keep the network available to any user and drive down the cost of each transaction to the point where it could be free or mostly go completely unnoticed, which would make it usable as cash payment in e-commerce or in person.
There were no "moochers", no arbitrary price manipulation, no central entity that could not be replaced and no price tags preventing small and casual cash-like transactions of any kind.
Any high but limited amount of inflation pressure at the time would have been mitigated by Satoshis own valuation of the importance of these attributes even before he had anyone to trade his coins with and also later when he potentially had, which is exactly how the so called "subjective theory of value" describes prices on a free market.
Economist Ludvig Von Mises, representing the Austrian School of economics and arguably the foremost influence on Rand in this area of thought, had the following to say about money in this regard
In the case of money, subjective use-value and subjective exchange-value coincide.
He also explicitly reminds us that,
Both are derived from objective exchange-value, for money has no utility other than that arising from the possibility of obtaining other economic goods in exchange for it.
Source: The Theory of Money and Credit
But as both Mises and here below Rand are quick to point out, since this means that money is not merely meant to be passed around carelessly (at any rate, slow or fast, cheaply or expensively), the most important function of money is retaining value until it is time to do so, including of course the very moment of the exchange itself. When exactly that time is, can not be allowed to be decided by another human being or by a government-like entity that might be tempted for reasons of controlling such behavior to introduce a tax or a special fee of some kind. Money — the default method of exchange within a network of people, or a community — must still be liquid enough to allow it to be spent cheaply and easily at all times.
Money is the tool of men who have reached a high level of productivity and a long-range control over their lives. Money is not merely a tool of exchange: much more importantly, it is a tool of saving, which permits delayed consumption and buys time for future production. To fulfill this requirement, money has to be some material commodity which is imperishable, rare, homogeneous, easily stored, not subject to wide fluctuations of value, and always in demand among those you trade with.
This leads you to the decision to use gold as money. Gold money is a tangible value in itself and a token of wealth actually produced. When you accept a gold coin in payment for your goods, you actually deliver the goods to the buyer; the transaction is as safe as simple barter. When you store your savings in the form of gold coins, they represent the goods which you have actually produced and which have gone to buy time for other producers, who will keep the productive process going, so that you’ll be able to trade your coins for goods any time you wish.
Source: Philosophy: Who Needs It
Bitcoin fits perfectly into the formula so far described and we may conclude that when it comes to its basic function as money, there is not much more to say in terms of Bitcoin qua the design described in the final edition of Satoshis paper; Bitcoin: A Peer-to-Peer Electronic Cash System.

But the story did not end there (a brief but still long overview of the breakdown of the Bitcoin community around Bitcoin Core)

As Bitcoin was already making mainstream appearances time and time again (which it had already started to do while Satoshi was still openly in the community and working on the project), it turned out that many of the remaining developers, as well as those that would arrive later, would completely reject Satoshis views and the design he had proposed. While they likely still keep convincing themselves that they are developing Bitcoin and that their actions have been in the best interest of the project as they see it, they had and still have radically different priorities and the community that formed around them naively competed to rationalize the basis for these priorities among each other and to any newcomers. This resulted in what must carefully be described as a "cult like" atmosphere and lead to a number of debilitating changes in the networks protocol.
Everything started to change. New ideas that went completely against the Bitcoin design started to be made part of the general concerns and everything from scaling, network topology, acceptable fee levels and even transaction speed and reliability were made to perform worse than they used to because of the deep ideological differences that allowed this. The economic understanding of the gradually reduced block rewards for the miners was only one of the many casualties within the community.
According to design, as the tokens of CPU cycles started to spread across the world, the inflation would start to taper off and ultimately at some point in the still distant future ensure that no actively inflating parties were allowed on the network anymore; Thereby safeguarding the limit of 21 million coins and that any price being gradually established during the time of initial distribution would meet up with objective exchange value as per the users in the community and from there remain relatively stable. Then, the plan always was, fees and interest in running the network itself would be the remaining incentive already built into the system to keep it going.
However soon, long before the final stage of the coin distribution which even today still has a really long way to go, developers working on the official reference software implementation that had been named "Bitcoin Core" no longer all expected that this would happen. In fact, not everyone agreed that the system should perform as "cash" at all, but instead perhaps as a "digital gold" or "store of value" that could then still be traded easily, only through other presumably still decentralized means.
That's how it was decided and eventually why increasing the amount of transactions on the network through a simple and safe change of a single parameter was not only considered a potentially unsustainable path to continue down in the long run, but also actually not as high a priority as other factors much less relevant to the systems function as "cash".
Instead of upgrading per the only plan consisted with the original design and as suggested by Satoshi, his successor Gavin Andresen and countless others that eventually would become isolated and for various reasons themselves decide to or be forced to have their role in Bitcoin development further reduced, the block space available for such transactions was kept so low that it eventually got full. This in turn triggered an event in the self-stabilizing transaction fee parameter, the price of which would normally trend as low as it could over time by virtue of being priced in the designs own deflationary native currency and nodes choosing to keep their fees low for sake of internal competition. Now the market in fees traded steadily higher, spiking several times, and with the introduction of features that would let the users more easily increase their fees to have higher chance of being one of the lucky to transact on time, got more and more extreme. At one point it had Greg Maxwell — prominent developer of technologies that would eventually enable "solutions" to this problem, such as the Lightning Network to be deployed as a side chain to what at least ought to be the main chain — supposedly celebrating the event, which he and other developers had already made known was the intent all along.
Personally, I’m pulling out the champaign that market behaviour is indeed producing activity levels that can pay for security without inflation, and also producing fee paying backlogs needed to stabilize consensus progress as the subsidy declines
Source
This in turn, not only priced out all casual and cash type transactions, but also generated a lock-in effect as users could no longer sell what supposedly was still "currency" without loosing a significant portion of their balance or perhaps do anything at all, until the price of the "coins" had trended high enough to compensate for any fees. The now known risks and fees, had spread throughout the system in various ways. For example had fees to and from exchanges increased and the newly developer introduced RBF function also pushed (the one that would allow a user to increase fees, and that was wrongly argued on various occasions to have been part of the original design) made users have to wait for hours or days before their transactions were considered safe. In other words, the system was no longer the one described in the paper and behaved at best more like a typical bank.
But while Bitcoin use for casual and outward facing commerce transactions stagnated, this didn't stop the price rallies that were increasingly driven on by this fee based lack of "liquidity" for recent buyers waiting to sell and fears of missing out on a good investment. It can also be speculated, that not only the lock in-effect for traders looking to ride the price but the high fees on users themselves contributing to a rapid concentration in wealth amongst miners and exchanges, thereby replacing the deflation already brought on by increased difficulty and reduced block rewards with a state of hyperdeflation.
While this may sound good for every bag holder on the onset, it was not so good for the small users looking to spend their coins. Their money store of value had now become more like a time locked interest paying account with a really large withdraw fee.
For those users that did not have much or enough money to even pay the fee in the first place, a single necessary transaction could trigger an event to them comparable to what happened in Cyprus during the height of the financial crisis, as the government had a large portion of savings confiscated as an "emergency tax" directly out of ordinary people's savings accounts. In fact it might be far worse for them than what happened back then, as the sum needed to be paid in fees could be a far greater percentage of their savings and constitute a small fortune depending on where in the world the user had earned and were planning to spend it.
It also did not help at all in the long run that the bull market may draw in more speculating "adopters", since this deflationary mode is only a temporary benefit to traders and doesn't itself necessarily bring any reliable value or relatively stable price at higher levels at all. It can just as well collapse again at any moment and lead to countless losses or by worsening simply rob users of their money by not making it usable on the network anymore.
Instead of viewing this economic policy as merely "testing" the system or "preparing it" for a future without block rewards, you would do better to compare it to "pumping" pretty much any currency, stock or commodity, as the goal even when assuming "good faith" is to centrally plan a restriction on blockspace to below market demand and "happily accept" the result that it manipulates the internal price per byte that is sent upwards. This in combination with already existing speculative interest from the public also almost inevitably leads to significant price moves and in turn even more of the public buying into the bull run before the developers themselves have actually provided anything that should logically attract such increased investment or use interest in the first place.
After the initial pumps it may also be anticipated that corrections in the form of bear markets will tend to set in, as the nodes mempools (the recorded transactions now having to wait in a long que to be timestamped) eventually clears are expected to clear. Because this marks the eventual return to normal fee levels and thus also a temporary stop to increasing deflation. The perceived inflation in turn created by increased liquidity in the underlying asset (on chain) may then set in fast or slow in the markets as some users are finally able to sell for a more reliable asset.
(As soon as speculators have become accustomed to the new prices in the underlying asset itself, its related IOUs and fees relating to both, markets will have stabilized enough that bullish speculation either alone or with the help of the very same processes can start over, yet again and with renewed enthusiasm.)
In the end, the market response will be what the market response will be and you have no control over it. Now that there is Bitcoin Cash, the same is true for it. No guarantees exist or can be made that either of the two chains will remain the more successful one as compared to the other, but the market will be the ultimate arbitrator in the long run.
TLDR: Savings and consumption go hand in hand. Bitcoins were a store of value ever since inception, even when only Satoshi were mining them. All market prices must emerge and be entertained in the market place without top down manipulation through the introduction of artificial scarcity. Pumping prices or letting the various parts of the design malfunction/be fundamentally changed to go against the rest is not sustainable and will only break the incentives model. In the long run the market is the ultimate arbitrator in all matters of money prices.
submitted by fruitsofknowledge to btc [link] [comments]

I’ve been researching privacy coins deeply and feel I’ve reached a sufficient findings to merit sharing my stance re SUMO.

By Taylor Margot. Everyone should read this!
THE BASICS
SUMOkoin is a fork of MONERO (XMR). XMR is a fork of Bytecoin. In my opinion, XMR is hands down the most undervalued coin in the top 15. Its hurdle is that people do not know how to price in privacy to the price of a coin yet. Once people figure out how to accurately assess the value privacy into the value of a coin, XMR, along with other privacy coins like SUMOkoin, will go parabolic.
Let’s be clear about something. I am not here to argue SUMOkoin is superior to XMR. That’s not what this article is about and frankly is missing the point. I don’t find the SUMOkoin vs. XMR debate interesting. From where I stand, investing in SUMOkoin has nothing to do with SUMOkoin overtaking XMR or who has superior tech. If anything, I think the merits of XMR underline the value of SUMOkoin. What I do find interesting is return on investment (“ROI”).
Imagine SUMO was an upcoming ICO. But you knew ahead of time that they had a proven product-market fit and an awesome, blue chip code base. That’s basically what you have in SUMO. Most good ICOs raise over 20mil (meaning their starting market cap is $20 mil) but after that, it’s a crapshoot. Investing in SUMO is akin to getting ICO prices but with the amount of information associated with more established coins.
Let me make one more thing clear. Investing is all about information. Specifically it’s about the information imbalance between current value and the quality of your information. SUMO is highly imbalanced.
The fact of the matter is that if you are interested in getting the vision and product/market fit of a $6 billion market cap coin for $20 mil, you should keep reading.
If you are interested in arguing about XMR vs. SUMOkoin, I point you to this infographic
Background
I’m a corporate tech & IP lawyer in Silicon Valley. My practice focuses on venture capital (“VC)”) and mergers & acquisitions (“M&A”). Recently I have begun doing more IP strategy. Basically I spend all day every day reviewing cap tables, stock purchase agreements, merger agreements and patent portfolios. I’m also the CEO of a startup (Scry Chat) and have a team of three full-time engineers.
I started using BTC in 2014 in conjunction with Silk Road and TOR. I recently had a minor conniption when I discovered how much BTC I handled in 2014. My 2017 has been good with IOTA at sub $0.30, POWR at $0.12, ENJIN at $0.02, REQ at $0.05, ENIGMA at $0.50, ITC (IoT Chain) and SUMO.
My crypto investing philosophy is based on betting long odds. In the words of Warren Buffet, consolidate to get rich, diversify to stay rich. Or as I like to say, nobody ever got rich diversifying.
That being said I STRONGLY recommend you have an IRA and/or 401(k) in place prior to venturing into crypto. But when it comes to crypto, I’d rather strike out dozens of times to have a chance at hitting a 100x home run. This approach is probably born out of working with VCs in Silicon Valley who do the same only with companies, not coins. I view myself as an aggressive VC in the cryptosphere.
The Number 1 thing I’ve taken away from venture law is that it pays to get in EARLY.
Did you know that the typical founder buys their shares for $0.00001 per share? So if a founder owns 5 million shares, they bought those shares for $50 total. The typical IPO goes out the door at $10-20 per share. My iPhone calculator says ERROR when it tries to divide $10/0.00001 because it runs out of screen real estate.
At the time of this writing, SUMO has a Marketcap of $18 million. That is 3/10,000th or 1/3333th. Let that sink in for a minute. BCH is a fork of BTC and it has the fourth largest market cap of all cryptos. Given it’s market cap, I am positive SUMO is the best value proposition in the Privacy Coin arena at the time of this writing. *
ROI MERITS OF SUMOkoin
So what’s so good about SUMOkoin? Didn’t you say it was just a Monero knock-off?
1) Well, sort of. SUMO is based on CryptoNote and was conceived from a fork of Monero, with a little bit of extra privacy thrown in. It would not be wrong to think SUMO is to Litecoin as XMR is to Bitcoin.
2) Increased Privacy. Which brings us to point 2. SUMO is doing several things to increase privacy (see below). If Monero is the King of Privacy Coins, then SUMO is the Standard Bearer fighting on the front lines. Note: Monero does many of these too (though at the time of fork XMR could not). Don’t forget Monero is also 5.8 billion market cap to SUMO’s 18 million.
a) RingCT. All transactions since genesis are RingCT (ring confidential transactions) and the minimum “mixin” transactions is 13 (12 plus the original transaction). This passes the threshold to statistically resist blockchain attacks. No transactions made on the SUMO blockchain can ever be traced to the actual participants. Nifty huh? Monero (3+1 mixins) is considering a community-wide fork to increase their minimum transactions to 6, 9, or 12. Not a bad market signal if you’re SUMOkoin eh?
b) Sub-addresses. The wallet deploys disposable sub-addresses to conceal your real sumo wallet address even from senders (who typically would need to know your actual address to send currency). Monero also does this.
3) Fungibility aka “Digital Cash” aka Broad Use Case. “Fungibility” gets thrown about a bunch but basically it means ‘how close is this coin to cash in terms of usage?’ SUMO is one of a few cryptos that can boast true fungibility — it acts just like physical cash i.e. other people can never trace where the money came from or how many coins were transferred. MONERO will never be able to boast this because it did not start as fungible.
4) Mining Made Easy Mode. Seeing as SUMO was a fork, and not an ICO, they didn’t have to rewrite the wheel. Instead they focused on product by putting together solid fundamentals like a great wallet and a dedicated mining app. Basically anyone can mine with the most intuitive GUI mining app out there. Google “Sumo Easy Miner” – run and mine.
5) Intuitive and Secure Wallet. This shouldn’t come as a surprise, yet in this day and age, apparently it is not a prereq. They have a GUI wallet plus those unlimited sub-addresses I mentioned above. Here’s the github if you’d like to review: https://github.com/sumoprojects/SumoGUIWallet The wallet really is one of the best I have seen (ENJIN’s will be better). Clear, intuitive, idiot proof (as possible).
6) Decentralization. SUMO is botnet-proof, and therefore botnet mining resistant. When a botnet joins a mining pool, it adjusts the mining difficulty, thereby balancing the difficulty level of mining.
7) Coin Emission Scheme. SUMO’s block reward changes every 6-months as the following “Camel” distribution schema (inspired by real-world mining production like of crude oil, coal, etc. that is often slow at first, then accelerated in before decline and depletion). MONERO lacks this schema and it is significant. Camel ensures that Sumokoin won’t be a short-lived phenomena. Specifically, since Sumo is proof-of-work, not all SUMO can be mined. If it were all mined, miners would no longer be properly incentivized to contribute to the network (unless transaction fees were raised, which is how Bitcoin plans on handling when all 21 million coins have been mined, which will go poorly given that people already complain about fees). A good emission scheme is vital to viability. Compare Camel and Monero’s scheme if you must: https://github.com/sumoprojects/sumokoin/blob/mastescripts/sumokoin_camel_emission_cal.cpp vs. https://monero.stackexchange.com/questions/242/how-was-the-monero-emission-curve-chosen/247.
8) Dev Team // Locked Coins // Future Development Funds. There are lots of things that make this coin a ‘go.’ but perhaps the most overlooked in crypto is that the devs have delivered ahead of schedule. If you’re an engineer or have managed CS projects, you know how difficult hitting projected deadlines can be. These guys update github very frequently and there is a high degree of visibility. The devs have also time-locked their pre-mine in a publicly view-able wallet for years so they aren’t bailing out with a pump and dump. The dev team is based in Japan.
9) Broad Appeal. If marketed properly, SUMO has the ability to appeal to older individuals venturing into crypto due to the fungibility / similarities to cash. This is not different than XMR, and I expect it will be exploited in 2018 by all privacy coins. It could breed familiarity with new money, and new money is the future of crypto.
10) Absent from Major Exchanges. Thank god. ALL of my best investments have happened off Binance, Bittrex, Polo, GDAX, etc. Why? Because by the time a coin hits a major exchange you’re already too late. Your TOI is fucked. You’re no longer a savant. SUMO is on Cryptopia, the best jenky exchange.
11) Marketing. Which brings me to my final point – and it happens to be a weakness. SUMO has not focused on marketing. They’ve instead gathered together tech speaks for itself (or rather doesn’t). So what SUMO needs a community effort to distribute facts about SUMO’s value prop to the masses. A good example is Vert Coin. Their team is very good at disseminating information. I’m not talking about hyping a coin; I’m talking about how effectively can you spread facts about your product to the masses.
To get mainstream SUMO needs something like this VertCoin post: https://np.reddit.com/vertcoin/comments/7ixkbf/vertbase_a_vertcoin_to_usd_exchange/
MARKET CAP DISCUSSION
For a coin with using Monero’s tech, 20 million is minuscule. For any coin 20 mil is nothing. Some MC comparisons [as of Jan 2, 2017]:
Let’s talk about market cap (“MC”) for a minute.
It gets tossed around a lot but I don’t think people appreciate how important getting in as early as possible can be. Say you buy $1000 of SUMO at 20 mil MC. Things go well and 40 million new money gets poured into SUMO. Now the MC = 60 million. Your ROI is 200% (you invested $1,000 and now you have 3,000, netting 2,000).
Now let’s says say you bought at 40 million instead of 20 million. $20 mill gets poured in until the MC again reaches 60 mil. Your ROI is 50% (you put in $1,000, you now have 1,500, netting 500).
Remember: investing at 20 mil MC vs. 40 mil MC represents an EXTREMELY subtle shift in time of investment (“TOI”). But the difference in net profit is dramatic. the biggest factor is that your ROI multiplier is locked in at your TOI — look at the difference in the above example. 200% ROI vs. 50% ROI. That’s huge. But the difference was only 20 mil — that’s 12 hours in the crypto world.
I strongly believe SUMO can and will 25x in Q1 2018 (400m MC) and 50x by Q4 2018 reach. There is ample room for a tricked out Monero clone at 1 bil MC. That’s 50x.
Guess how many coins have 500 mil market caps? 58 as of this writing. 58! Have many of these coins with about ~500 mil MC have you heard of?
MaidSafeCoin?
Status?
Decred?
Veritaseum?
DRAGONCHAIN ARE YOU KIDDING ME
THE ROLE OF PRIVACY
I want to close with a brief discussion of privacy as it relates to fundamental rights and as to crypto. 2018 will be remembered as the Year of Privacy Coins. Privacy has always been at the core of crypto. This is no coincidence. “Privacy” is the word we have attached to the concept of possessing the freedom to do as you please within the law without explaining yourself to the government or financial institution.
Discussing privacy from a financial perspective is difficult because it has very deep political significance. But that is precisely why it is so valuable.
Privacy is the right of billions of people not to be surveilled. We live in a world where every single transaction you do through the majority financial system is recorded, analyzed and sold — and yet where the money goes is completely opaque. Our transactions are visible from the top, but we can’t see up. Privacy coins turn that upside down.
Privacy is a human right. It is the guarantor of American constitutional freedom. It is the cornerstone of freedoms of expression, association, political speech and all our other freedoms for that matter. And privacy coins are at the root of that freedom. What the internet did for freedom of information, privacy coins will do for freedom of financial transactions.
POST SCRIPT: AN ENGINEER’S PERSPECTIVE
Recently a well respected engineer reached out to me and had this to say about SUMO. I thought I’d share.
"I’m messaging you because I came at this from a different perspective. For reference, I started investing in Sumo back when it was around $0.5 per coin. My background is in CS and Computer Engineering. I currently research in CS.
When I was looking for a coin to invest in, I approached it in a completely different way from what you described in your post, I first made a list of coins with market caps < 20m, and then I removed all the coins that didn’t have active communities.
Next, because of my background, I read through the code for each of the remaining coins, and picked the coins which had both frequent commits to GitHub (proving dev activity), and while more subjective, code that was well written. Sumo had both active devs, and (very) well written code.
I could tell that the people behind this knew what they were doing, and so I invested.
I say all of this, because I find it interesting how we seem to have very different strategies for selecting ‘winners’ but yet we both ended up finding Sumo."

Legal Disclaimer:
THIS POST AND ANY SUBSEQUENT STATEMENTS BY THE AUTHOR DO NOT CONSTITUTE LEGAL OR FINANCIAL ADVICE AND IS NOT INTENDED TO BE LEGAL OR FINANCIAL ADVICE OR RELIED UPON. NO REFERENCES TO THIS POST SHALL BE CONSTRUED AS LEGAL OR FINANCIAL ADVICE. THIS POST REPRESENTS THE LONE OPINION OF A NON-SOPHISTICATED INVESTOR.
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how to bitcoin with cloud mining by khoa hoc

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