Macro Analyst Expects "US Dollar Bear Market" to Boost ...
BTC/USDT Binance Live Price Chart - Coinalyze
01-27 20:03 - 'Binance Tools, Trading Assistant. Track multiple markets at once with real time percentage profit/loss with live news based on your favourites!' (binancetools.com) by /u/couplescorner17 removed from /r/Bitcoin within 20-30min
I lost it all (this my old rogerver bcashy troll account btw) I don’t even know how to start but as of yesterday I’m officially broke, I ruined my life and future. I’m a 23yrs guy, my journey with Bitcoin started in 2014. I bought it to actually use it not sure if people do that nowadays? but The HODL journey didn’t start until the beginning of 2017 as I notice the $ value in my blockchain wallet steadily increasing didn’t even know how or why it was increasing I thought it was a glitch making me free money for this reason I decided to go ALL IN I dumped my life saving into Bitcoin. price was around 1-2K $ and I was able to get 11 BTC in total. Unfortunately before the Bullrun start I lost around 4 coin due to ICO"s scams and just buying shitcooins in poloniex with zero trading knowledge(had a great time with the trollbox). After my loss I took my coins out of the exchange and held in a cold wallet, Fast forwards September 2017 the price kept going up I couldn’t even believe it specially after it broke past 10k I was so euphoric matter fact I was chilling in here, in this subreddit celebrating with everyone posting memes etc.. When BTC hit 20k my greedy asss still didnt wanna sell I didn’t have a price target I though it will keep going up forever. It was going so quick I couldn’t even process what was happening I told my siblings I was rich they told me to sell this bubble but I said "HELL NO! I was part of the moonboy gang we don’t sell we HOODL" I was 19 at the time. seeing this type of money was unreal I had more than 6 fucking figures in my wallet. Eventually we topped out at 20k I didn’t sell although the price kept going down and down and Depression started to hit after we dropped below 10k specially when it went down more near the 3k level I started to regret everything kicking my self for not listening to my siblings when they told me sell. Nonetheless I still had faith in Bitcoin and knew one day we will recover but I needed to accepted the fact that it might take months maybe years to get back to ath. for this reason I disconnected from the crypto community I had to forget about Bitcoin so I shifted my focus somewhere else luckily I stumbled across this popular game called “Fortnite” it took all my time and distraction away from my crypto for a good year or two I barely even noticed the peak of 2019. Anyways mid-late 2019 I got heavy in the stock market I started to see all these guru make insane amount of money just day trading. I was more of an investor type guy but I consumed so much information about day trading and how the psychological aspect is so important, I guess I mastered a bit of that by holding Bitcoin throughout the bear market. Anyways recently in August during the Bitcoin rally I though I had enough skills and decided it was finally time for me to trade Bitcoin specially because it was tradable 24/7 I wanted to start increasing my money and stop sitting on my coins I've had enough of the bear market I thought it was gonna be another P&D episode specially after I started to get deeper in the Crypto community and understood how price moves. I used to be Bitcoin maximalist but then I started to notice the suspicious activity around bitcoin, I came to realize that bitcoin was not the same as it was before, these toxic unregulated entities have turned bitcoin into a giant ponzi playground with everyone being brainwashed by these crypto twitter advocates who are nothing but CZ binance acting puppets. I know it sound crazy but it’s true, the receipt it out to the public, the price is manipulated by Tetther Mafia and these scam exchange. I don’t believe in conspiracy but neither do I believe in coincidence, I witnessed this fraud my own eyes, Whale-alert notified me every time Tetther printed new money and sent it to exchanges and next thing you the price went up. Ever since they added derivative I assume they manipulate the price in spot to liquidate future traders. This whole rally was propt by Tetther mafia using the overall condition in the market as an excuse to attempt artificial FOMO and bring real liquidity in this fake liquidity pool. As the fraud was getting more obvious I started to despise Bitcoin and traded the ponzi based off emotions I neglected the technicals I didn’t have risk management and eventually got liquidated. This is my 3yr+ journey went from 11 btc to 0.. I feel horrible,sad, hopeless and disappointed this was my whole networth vanished in 1-2month. I deprived myself from so many things these last few years hoping my investment grows enough to fund my future. My family still think I’m holding Bitcoins I feel so bad I let them down not sure I'll be able to recover from this. Ps: for those saying Tetther is an old conspiracy trust me this time is different and incomparable to the previous years, the fraud is fully transparent now. Their activity has been very suspicious and concerning lately I’m sensing a major exit-scam. this will impact the whole crypto space because this unbacked counterfeit USD holds most if not all the order book liquidity.
https://preview.redd.it/hst7htjbn4x51.jpg?width=1280&format=pjpg&auto=webp&s=4bd1c3374be47429ff1fe60abf46046dd845c493 At Swipe, the team always makes sure to listen to the voices of our users. In October, the team has announced various Swipe Improvement Proposals (SIP), product upgrades and migration, additional coin listings, and partnerships to make your cryptocurrency experience as easy as possible. Swipe Verified Pages Swipe’s Instagram, Facebook, and Telegram accounts are now officially verified. Make sure to follow only the official pages of Swipe to get the latest offers, news, product developments, and updates. Also, please be reminded that Swipe has only two official channels: T.me/SwipeWallet(verified) T.me/Swipe(Announcement Channel) Swipe Discord Channel The team has officially opened a Discord channel to connect with users who have Discord accounts. Swipe gave away a total of $1,000 in Swipe Token (SXP) to 10 random winners who joined the Discord channel and followed Swipe’s official Twitter account. The ten winners were announced last October 6 on Swipe’s Discord channel. Updates on Swipe Cards & Migration The Swipe Slate card is now upgraded to 8% cashback with $30,000 referral rewards activated immediately, same rebates, and on-chain staking rewards with governance. The monthly spending limit for Swipe Slate is also now upgraded to 50,000 Euros. Other Swipe cards such as Saffron, Sky, and Steel will be migrated to the Binance card platform. Users of these cards will be able to use it and SXP lockups via their Binance account, including the migration of benefits and rebates. SXP lock-up card tiers for Binance cards and Swipe cards ordered on Binance.com will be released soon to match up to existing benefits, perks, and rebates. Swipe Slate will remain on the Swipe Wallet platform for SXP Elite users. This move shows Swipe’s commitment to push the Swipe Issuing platform products to businesses, like Binance, which will help the SXP deflationary ecosystem. Swipe Improvement Proposals Last of October, the Swipe team announced on its official channel the voting procedures for the Swipe Improvement Proposals (SIP) on Swipe Governance. On October 5, Swipe announced the voting procedure for the Swipe Improvement Proposal 1 (SIP-1). Those who staked SXP can vote to upgrade the staking contract to add a reward claim period controlled by SXP holders. On October 8, the team announced that the SIP-1 has now passed with 3,456,709 $SXP staked for YES while 0 SXP for No. SIP-3 was then made available on Swipe Governance last October 22. Staked $SXP can vote on upgrading the staking contract to add an unstake period for $SXP collateral. This proposed unstake contract upgrade enables a dynamic period in which new stakers have to wait to be able to remove their collateral from the network via a decentralized trustless system. On October 25, SIP-3 has been passed, with 5,283,856 $SXP staked for YES while 119,080 $SXP for NO. This was followed by the announcement of the voting procedures for the SIP-4. Those who staked $SXP can vote in favor of, as well as against, the increase in the daily staking rewards for on-chain $SXP users securing the Swipe Network. However, SIP-4 had an issue in execution due to inadvertently adding a “space” in the proposal parameter, which throws a smart contract error. This was tested before deploying, and when it was copied, the space was accidentally added in. The team re-proposes SIP-4 via SIP-5, which is now available on Swipe Governance. This proposal corrects the parameter with SIP-4. View the details of the Swipe Governance Proposals here:https://app.swipe.org/dashboard Coin Listings Swipe has added several coin listings on its platform. Adding to its list of supported cryptocurrencies are Venus Protocol ($XVS), Near Protocol ($NEAR), Kusama ($KSM), Ocean Protocol ($OCEAN), Filecoin ($FIL), and $AAVE. Swipe users can now buy and sell these cryptocurrencies with credit/debit cards, instant exchange, and trading, and spend it using Swipe Visa cards. Swipe Visa Fund Sources Swipe Visa Cardholders can now select $BUSD and $USDT funding sources in the “Card” tab on Swipe Wallet mobile application. Use Swipe card and convert fiat in real-time and earn up to 8% cashback and top brand rebates. Swipe Visa Cards in US Swipe Visa Cards are now available in the United States (excluding New York) with invites already rolled out last October 9. Virtual Cards will be issued with Apple Pay, Google Pay, and Samsung Pay enabled. Physical cards will be shipped soon. Users can now finish their Social Security Number (SSN) verification to receive the Virtual Card. Physical cards will be linked and will activate your Digital Checking account. The team also announced its plans to launch and an enhanced cashback program in the region soon. Swipe Visa card US users can earn up to 20% additional cashback (on top of the up to 8% Bitcoin cashback offer) at participating top and local retailers. SXP Wrapped in BSC $SXP wrapped on BSC is coming. The team will enable fee-free wraps and launch cross-chain staking when this deploys. This will save users high fees and latency currently faced on Ethereum. Swipe Slate Staking Rewards Swipe has distributed the first week and second week of Swipe Slate on-chain staking rewards to Slate cardholders last October 13 and 20. Swipe Slate cards can be ordered with a 30,000 $SXP stake lock up, which includes 8% Cashback in BTC, top brand rebates, and on-chain staking rewards. Find out all the details:swipe.io/cards New Executive Appointments Swipe announced this month its new executive appointments. Henry Niduaza is appointed as the new Chief Technology Officer, Michael Belisario as Chief Information Security Officer, and Caroline Santos as Chief Marketing Officer. The new appointments are another important step in Swipe’s growth strategy. Chief Executive Officer (CEO) Joselito Lizarondo believes that this new corporate structure affirms Swipe’s commitment to strengthening and growth to best serve its clients at all stages of their cryptocurrency journey. SXP/INR Trading Swipe and Wazirx, a trusted Indian Crypto Exchange platform announced on October 20 that Wazirx traders can now buy, sell and trade $SXP in the Indian Rupee (INR) market of Wazirx. Start trading today: https://wazirx.com/exchange/SXP-INR SXP on SYRUP Pool PancakeSwap is planning for SXP farming (100,000 SXP) for SYRUP stakers. It is the fifth Syrup pool project to be announced by PancakeSwap. The SXP staking campaign will run for 200,000 BSC blocks from block 1582740 to 1782740 (approximately 6.5 days with a block time of 3 seconds), which means that there will be 0.5 SXP given out to SYRUP holders in each block. BEP20 SXP will also be circulating and transferable on BSC when PancakeSwap starts the SYRUP pool, so users will be able to harvest your SXP tokens and trade on PancakeSwap at any time. Also, earn $CAKE by being a liquidity provider for $SXP-BNB on Binance Smart Chain with double rewards for approximately seven days followed by 1x on-going. To wrap your $SXP from ERC20 to BEP20, just deposit $SXP into your Binance Account and withdraw via the Binance Smart Chain option. The Swipe Wallet app now supports BEP20 BSC deposits for all supported coins. Simply use the same address you normally use to deposit ERC20 based supported cryptocurrencies to deposit Binance Smart Chain BEP20 based ones such as $SXP, ETH, etc. Spend Fiat Using Swipe Visa Cards On October 23, Swipe announced that Swipe Visa card holders can directly use fiat currency as their funding source. This three-month pilot program lets users spend USD, GBP and EUR while earning up to eight percent cashback in BTC, SXP or BNB. 🇺🇸 🇬🇧 🇪🇺 residents can order now 👉 sw.pe/Cards $20K Weekly Buy Limit Swipe Wallet verified app users can now enjoy double the weekly limits at $20,000 per week for Visa and MasterCard credit and debit card purchases that support 3D-Secure (3DS). SwipeX SwipeX is now ready and part one of SwipeX will be announced within this week. SwipeX will build the foundation for what it states will be a drive to crypto finance forward. More details on SwipeX and part one to be announced. $SXP SXP --- Stay up-to-date with all the latest news from Swipe Website: https://swipe.io Twitter: https://twitter.com/SwipeWallet Facebook: https://facebook.com/Swipe Instagram: https://instagram.com/Swipe Medium: https://medium.com/Swipe Telegram: https://t.me/SwipeWallet & https://t.me/Swipe LinkedIn: https://www.linkedin.com/company/swipewallet YouTube: https://youtube.com/SwipeWallet
Creating a 0%-fee crypto exchange cause trading cryptos in UAE is a joke
Now, if anyone has tried buying Bitcoin or cryptos in the UAE you’d be well aware that the crypto infrastructure here is less than ideal (really trying to be polite here). I’m from Singapore and I can buy Bitcoin in literally 5 minutes (as in bank transfer to my SG crypto exchange takes 4 mins and pressing the buy details take 1 min) easily, with low fees and fast. But being based here recently and trying to trade crypto is a real pain. Why? - Bitoasis, the leading crypto exchange in UAE, has stopped wire/bank transfers so the only way to buy crypto is thru debit/credit card which incurs a 4.5% fee! Buying crypto thru card is crazy expensive (wire deposit is FREE) and I’d rather use the saved fee amount to buy me some karak & chai - Localbitcoins is not safe or secure given that you can be easily mugged. And the prices there are EXPENSIVE related to the market price, given that there is some kind of premium added to the price. This has put me off buying cryptos in UAE, and I’m pretty sure everyone else feels the same. I’ve been in the crypto/blockchain space for quite a bit of time and I strongly believe that crypto adoption should be fast, simple and secure. That’s why me and my team have spent the last 6 months trying to create a 0%-fee crypto exchange in the Gulf to decentralize access to a burgeoning asset class. We are in the midst of completing the development of the exchange and we’re launching a private beta soon for interested users to start trying out the exchange. The reason why we’re doing this beta launch is to listen to user feedback and perfect the exchange for the public launch. Do sign up here to be updated on our launch: https://fasset.exchange/ Do spread the word and please, AMA! P.S. We’re backed by Binance so rest assured that the price you’ll be getting in our exchange is as close to the market price as possible.
Brief Comments on Goguen: Q4 2020, Q1 2021, utility, Marlowe, DSL, Glow, Plutus, IELE, smart contracts, thanksgiving to you, sidechains and Hydra, Goguen rollout and additions to product update
Stakenet (XSN) - A DEX with interchain capabilities (BTC-ETH), Huge Potential [Full Writeup]
Preface Full disclosure here; I am heavily invested in this. I have picked up some real gems from here and was only in the position to buy so much of this because of you guys so I thought it was time to give back. I only invest in Utility Coins. These are coins that actually DO something, and provide new/build upon the crypto infrastructure to work towards the end goal that Bitcoin itself set out to achieve(financial independence from the fiat banking system). This way, I avoid 99% of the scams in crypto that are functionless vapourware, and if you only invest in things that have strong fundamentals in the long term you are much more likely to make money. Introduction
Stakenet is a Lightning Network-ready open-source platform for decentralized applications with its native cryptocurrency – XSN. It is powered by a Proof of Stake blockchain with trustless cold staking and Masternodes. Its use case is to provide a highly secure cross-chain infrastructure for these decentralized applications, where individuals can easily operate with any blockchain simply by using Stakenet and its native currency XSN.
Ok... but what does it actually do and solve? The moonshot here is the DEX (Decentralised Exchange) that they are building. This is a lightning-network DEX with interchain capabilities. That means you could trade BTC directly for ETH; securely, instantly, cheaply and privately. Right now, most crypto is traded to and from Centralised Exchanges like Binance. To buy and sell on these exchanges, you have to send your crypto wallets on that exchange. That means the exchanges have your private keys, and they have control over your funds. When you use a centralised exchange, you are no longer in control of your assets, and depend on the trustworthiness of middlemen. We have in the past of course seen infamous exit scams by centralised exchanges like Mt. Gox. The alternative? Decentralised Exchanges. DEX's have no central authority and most importantly, your private keys(your crypto) never leavesYOUR possession and are never in anyone else's possession. So you can trade peer-to-peer without any of the drawbacks of Centralised Exchanges. The problem is that this technology has not been perfected yet, and the DEX's that we have available to us now are not providing cheap, private, quick trading on a decentralised medium because of their technological inadequacies. Take Uniswap for example. This DEX accounts for over 60% of all DEX volume and facilitates trading of ERC-20 tokens, over the Ethereum blockchain. The problem? Because of the huge amount of transaction that are occurring over the Ethereum network, this has lead to congestion(too many transaction for the network to handle at one time) so the fees have increased dramatically. Another big problem? It's only for Ethereum. You cant for example, Buy LINK with BTC. You must use ETH. The solution? Layer 2 protocols. These are layers built ON TOP of existing blockchains, that are designed to solve the transaction and scaling difficulties that crypto as a whole is facing today(and ultimately stopping mass adoption) The developers at Stakenet have seen the big picture, and have decided to implement the lightning network(a layer 2 protocol) into its DEX from the ground up. This will facilitate the functionalities of a DEX without any of the drawbacks of the CEX's and the DEX's we have today. Heres someone much more qualified than me, Andreas Antonopoulos, to explain this https://streamable.com/kzpimj 'Once we have efficient, well designed DEX's on layer 2, there wont even be any DEX's on layer 1' Progress The Stakenet team were the first to envision this grand solution and have been working on it since its conception in June 2019. They have been making steady progress ever since and right now, the DEX is in an open beta stage where rigorous testing is constant by themselves and the public. For a project of this scale, stress testing is paramount. If the product were to launch with any bugs/errors that would result in the loss of a users funds, this would obviously be very damaging to Stakenet's reputation. So I believe that the developers conservative approach is wise. As of now the only pairs tradeable on the DEX are XSN/BTC and LTC/BTC. The DEX has only just launched as a public beta and is not in its full public release stage yet. As development moves forward more lightning network and atomic swap compatible coins will be added to the DEX, and of course, the team are hard at work on Raiden Integration - this will allow ETH and tokens on the Ethereum blockchain to be traded on the DEX between separate blockchains(instantly, cheaply, privately) This is where Stakenet enters top 50 territory on CMC if successful and is the true value here. Raiden Integration is well underway is being tested in a closed public group on Linux. The full public DEX with Raiden Integration is expected to release by the end of the year. Given the state of development so far and the rate of progress, this seems realistic. Tokenomics 2.6 Metrics overview (from whitepaper)
Ticker: XSN. Currency type: Coin.
Consensus: Minting Proof of Stake, Trustless Proof of Stake.
XSN is slightly inflationary, much like ETH as this is necessary for the economy to be adopted and work in the long term. There is however a deflationary mechanism in place - all trading fees on the DEX get converted to XSN and 10% of these fees are burned. This puts constant buying pressure on XSN and acts as a deflationary mechanism. XSN has inherent value because it makes up the infrastructure that the DEX will run off and as such Masternode operators and Stakers will see the fee's from the DEX. Conclusion We can clearly see that a layer 2 DEX is the future of crypto currency trading. It will facilitate secure, cheap, instant and private trading across all coins with lightning capabilities, thus solving the scaling and transaction issues that are holding back crypto today. I dont need to tell you the implications of this, and what it means for crypto as a whole. If Stakenet can launch a layer 2 DEX with Raiden Integration, It will become the primary DEX in terms of volume. Stakenet DEX will most likely be the first layer 2 DEX(first mover advantage) and its blockchain is the infrastructure that will host this DEX and subsequently receive it's trading fee's. It is not difficult to envision a time in the next year when Stakenet DEX is functional and hosting hundreds of millions of dollars worth of trading every single day. At $30 million market cap, I cant see any other potential investment right now with this much potential upside. This post has merely served as in introduction and a heads up for this project, there is MUCH more to cover like vortex liquidity, masternodes, TOR integration... for now, here is some additional reading. Resources
Summary: Everyone knows that when you give your assets to someone else, they always keep them safe. If this is true for individuals, it is certainly true for businesses. Custodians always tell the truth and manage funds properly. They won't have any interest in taking the assets as an exchange operator would. Auditors tell the truth and can't be misled. That's because organizations that are regulated are incapable of lying and don't make mistakes. First, some background. Here is a summary of how custodians make us more secure: Previously, we might give Alice our crypto assets to hold. There were risks:
Alice might take the assets and disappear.
Alice might spend the assets and pretend that she still has them (fractional model).
Alice might store the assets insecurely and they'll get stolen.
Alice might give the assets to someone else by mistake or by force.
Alice might lose access to the assets.
But "no worries", Alice has a custodian named Bob. Bob is dressed in a nice suit. He knows some politicians. And he drives a Porsche. "So you have nothing to worry about!". And look at all the benefits we get:
Alice can't take the assets and disappear (unless she asks Bob or never gives them to Bob).
Alice can't spend the assets and pretend that she still has them. (Unless she didn't give them to Bob or asks him for them.)
Alice can't store the assets insecurely so they get stolen. (After all - she doesn't have any control over the withdrawal process from any of Bob's systems, right?)
Alice can't give the assets to someone else by mistake or by force. (Bob will stop her, right Bob?)
Alice can't lose access to the funds. (She'll always be present, sane, and remember all secrets, right?)
See - all problems are solved! All we have to worry about now is:
Bob might take the assets and disappear.
Bob might spend the assets and pretend that he still has them (fractional model).
Bob might store the assets insecurely and they'll get stolen.
Bob might give the assets to someone else by mistake or by force.
Bob might lose access to the assets.
It's pretty simple. Before we had to trust Alice. Now we only have to trust Alice, Bob, and all the ways in which they communicate. Just think of how much more secure we are! "On top of that", Bob assures us, "we're using a special wallet structure". Bob shows Alice a diagram. "We've broken the balance up and store it in lots of smaller wallets. That way", he assures her, "a thief can't take it all at once". And he points to a historic case where a large sum was taken "because it was stored in a single wallet... how stupid". "Very early on, we used to have all the crypto in one wallet", he said, "and then one Christmas a hacker came and took it all. We call him the Grinch. Now we individually wrap each crypto and stick it under a binary search tree. The Grinch has never been back since." "As well", Bob continues, "even if someone were to get in, we've got insurance. It covers all thefts and even coercion, collusion, and misplaced keys - only subject to the policy terms and conditions." And with that, he pulls out a phone-book sized contract and slams it on the desk with a thud. "Yep", he continues, "we're paying top dollar for one of the best policies in the country!" "Can I read it?' Alice asks. "Sure," Bob says, "just as soon as our legal team is done with it. They're almost through the first chapter." He pauses, then continues. "And can you believe that sales guy Mike? He has the same year Porsche as me. I mean, what are the odds?" "Do you use multi-sig?", Alice asks. "Absolutely!" Bob replies. "All our engineers are fully trained in multi-sig. Whenever we want to set up a new wallet, we generate 2 separate keys in an air-gapped process and store them in this proprietary system here. Look, it even requires the biometric signature from one of our team members to initiate any withdrawal." He demonstrates by pressing his thumb into the display. "We use a third-party cloud validation API to match the thumbprint and authorize each withdrawal. The keys are also backed up daily to an off-site third-party." "Wow that's really impressive," Alice says, "but what if we need access for a withdrawal outside of office hours?" "Well that's no issue", Bob says, "just send us an email, call, or text message and we always have someone on staff to help out. Just another part of our strong commitment to all our customers!" "What about Proof of Reserve?", Alice asks. "Of course", Bob replies, "though rather than publish any blockchain addresses or signed transaction, for privacy we just do a SHA256 refactoring of the inverse hash modulus for each UTXO nonce and combine the smart contract coefficient consensus in our hyperledger lightning node. But it's really simple to use." He pushes a button and a large green checkmark appears on a screen. "See - the algorithm ran through and reserves are proven." "Wow", Alice says, "you really know your stuff! And that is easy to use! What about fiat balances?" "Yeah, we have an auditor too", Bob replies, "Been using him for a long time so we have quite a strong relationship going! We have special books we give him every year and he's very efficient! Checks the fiat, crypto, and everything all at once!" "We used to have a nice offline multi-sig setup we've been using without issue for the past 5 years, but I think we'll move all our funds over to your facility," Alice says. "Awesome", Bob replies, "Thanks so much! This is perfect timing too - my Porsche got a dent on it this morning. We have the paperwork right over here." "Great!", Alice replies. And with that, Alice gets out her pen and Bob gets the contract. "Don't worry", he says, "you can take your crypto-assets back anytime you like - just subject to our cancellation policy. Our annual management fees are also super low and we don't adjust them often". How many holes have to exist for your funds to get stolen? Just one. Why are we taking a powerful offline multi-sig setup, widely used globally in hundreds of different/lacking regulatory environments with 0 breaches to date, and circumventing it by a demonstrably weak third party layer? And paying a great expense to do so? If you go through the list of breaches in the past 2 years to highly credible organizations, you go through the list of major corporate frauds (only the ones we know about), you go through the list of all the times platforms have lost funds, you go through the list of times and ways that people have lost their crypto from identity theft, hot wallet exploits, extortion, etc... and then you go through this custodian with a fine-tooth comb and truly believe they have value to add far beyond what you could, sticking your funds in a wallet (or set of wallets) they control exclusively is the absolute worst possible way to take advantage of that security. The best way to add security for crypto-assets is to make a stronger multi-sig. With one custodian, what you are doing is giving them your cryptocurrency and hoping they're honest, competent, and flawlessly secure. It's no different than storing it on a really secure exchange. Maybe the insurance will cover you. Didn't work for Bitpay in 2015. Didn't work for Yapizon in 2017. Insurance has never paid a claim in the entire history of cryptocurrency. But maybe you'll get lucky. Maybe your exact scenario will buck the trend and be what they're willing to cover. After the large deductible and hopefully without a long and expensive court battle. And you want to advertise this increase in risk, the lapse of judgement, an accident waiting to happen, as though it's some kind of benefit to customers ("Free institutional-grade storage for your digital assets.")? And then some people are writing to the OSC that custodians should be mandatory for all funds on every exchange platform? That this somehow will make Canadians as a whole more secure or better protected compared with standard air-gapped multi-sig? On what planet? Most of the problems in Canada stemmed from one thing - a lack of transparency. If Canadians had known what a joke Quadriga was - it wouldn't have grown to lose $400m from hard-working Canadians from coast to coast to coast. And Gerald Cotten would be in jail, not wherever he is now (at best, rotting peacefully). EZ-BTC and mister Dave Smilie would have been a tiny little scam to his friends, not a multi-million dollar fraud. Einstein would have got their act together or been shut down BEFORE losing millions and millions more in people's funds generously donated to criminals. MapleChange wouldn't have even been a thing. And maybe we'd know a little more about CoinTradeNewNote - like how much was lost in there. Almost all of the major losses with cryptocurrency exchanges involve deception with unbacked funds. So it's great to see transparency reports from BitBuy and ShakePay where someone independently verified the backing. The only thing we don't have is:
ANY CERTAINTY BALANCES WEREN'T EXCLUDED. Quadriga's largest account was $70m. 80% of funds are in 20% of accounts (Pareto principle). All it takes is excluding a few really large accounts - and nobody's the wiser. A fractional platform can easily pass any audit this way.
ANY VISIBILITY WHATSOEVER INTO THE CUSTODIANS. BitBuy put out their report before moving all the funds to their custodian and ShakePay apparently can't even tell us who the custodian is. That's pretty important considering that basically all of the funds are now stored there.
ANY IDEA ABOUT THE OTHER EXCHANGES. In order for this to be effective, it has to be the norm. It needs to be "unusual" not to know. If obscurity is the norm, then it's super easy for people like Gerald Cotten and Dave Smilie to blend right in.
It's not complicated to validate cryptocurrency assets. They need to exist, they need to be spendable, and they need to cover the total balances. There are plenty of credible people and firms across the country that have the capacity to reasonably perform this validation. Having more frequent checks by different, independent, parties who publish transparent reports is far more valuable than an annual check by a single "more credible/official" party who does the exact same basic checks and may or may not publish anything. Here's an example set of requirements that could be mandated:
First report within 1 month of launching, another within 3 months, and further reports at minimum every 6 months thereafter.
No auditor can be repeated within a 12 month period.
All reports must be public, identifying the auditor and the full methodology used.
All auditors must be independent of the firm being audited with no conflict of interest.
Reports must include the percentage of each asset backed, and how it's backed.
The auditor publishes a hash list, which lists a hash of each customer's information and balances that were included. Hash is one-way encryption so privacy is fully preserved. Every customer can use this to have 100% confidence they were included.
If we want more extensive requirements on audits, these should scale upward based on the total assets at risk on the platform, and whether the platform has loaned their assets out.
There are ways to structure audits such that neither crypto assets nor customer information are ever put at risk, and both can still be properly validated and publicly verifiable. There are also ways to structure audits such that they are completely reasonable for small platforms and don't inhibit innovation in any way. By making the process as reasonable as possible, we can completely eliminate any reason/excuse that an honest platform would have for not being audited. That is arguable far more important than any incremental improvement we might get from mandating "the best of the best" accountants. Right now we have nothing mandated and tons of Canadians using offshore exchanges with no oversight whatsoever. Transparency does not prove crypto assets are safe. CoinTradeNewNote, Flexcoin ($600k), and Canadian Bitcoins ($100k) are examples where crypto-assets were breached from platforms in Canada. All of them were online wallets and used no multi-sig as far as any records show. This is consistent with what we see globally - air-gapped multi-sig wallets have an impeccable record, while other schemes tend to suffer breach after breach. We don't actually know how much CoinTrader lost because there was no visibility. Rather than publishing details of what happened, the co-founder of CoinTrader silently moved on to found another platform - the "most trusted way to buy and sell crypto" - a site that has no information whatsoever (that I could find) on the storage practices and a FAQ advising that “[t]rading cryptocurrency is completely safe” and that having your own wallet is “entirely up to you! You can certainly keep cryptocurrency, or fiat, or both, on the app.” Doesn't sound like much was learned here, which is really sad to see. It's not that complicated or unreasonable to set up a proper hardware wallet. Multi-sig can be learned in a single course. Something the equivalent complexity of a driver's license test could prevent all the cold storage exploits we've seen to date - even globally. Platform operators have a key advantage in detecting and preventing fraud - they know their customers far better than any custodian ever would. The best job that custodians can do is to find high integrity individuals and train them to form even better wallet signatories. Rather than mandating that all platforms expose themselves to arbitrary third party risks, regulations should center around ensuring that all signatories are background-checked, properly trained, and using proper procedures. We also need to make sure that signatories are empowered with rights and responsibilities to reject and report fraud. They need to know that they can safely challenge and delay a transaction - even if it turns out they made a mistake. We need to have an environment where mistakes are brought to the surface and dealt with. Not one where firms and people feel the need to hide what happened. In addition to a knowledge-based test, an auditor can privately interview each signatory to make sure they're not in coercive situations, and we should make sure they can freely and anonymously report any issues without threat of retaliation. A proper multi-sig has each signature held by a separate person and is governed by policies and mutual decisions instead of a hierarchy. It includes at least one redundant signature. For best results, 3of4, 3of5, 3of6, 4of5, 4of6, 4of7, 5of6, or 5of7. History has demonstrated over and over again the risk of hot wallets even to highly credible organizations. Nonetheless, many platforms have hot wallets for convenience. While such losses are generally compensated by platforms without issue (for example Poloniex, Bitstamp, Bitfinex, Gatecoin, Coincheck, Bithumb, Zaif, CoinBene, Binance, Bitrue, Bitpoint, Upbit, VinDAX, and now KuCoin), the public tends to focus more on cases that didn't end well. Regardless of what systems are employed, there is always some level of risk. For that reason, most members of the public would prefer to see third party insurance. Rather than trying to convince third party profit-seekers to provide comprehensive insurance and then relying on an expensive and slow legal system to enforce against whatever legal loopholes they manage to find each and every time something goes wrong, insurance could be run through multiple exchange operators and regulators, with the shared interest of having a reputable industry, keeping costs down, and taking care of Canadians. For example, a 4 of 7 multi-sig insurance fund held between 5 independent exchange operators and 2 regulatory bodies. All Canadian exchanges could pay premiums at a set rate based on their needed coverage, with a higher price paid for hot wallet coverage (anything not an air-gapped multi-sig cold wallet). Such a model would be much cheaper to manage, offer better coverage, and be much more reliable to payout when needed. The kind of coverage you could have under this model is unheard of. You could even create something like the CDIC to protect Canadians who get their trading accounts hacked if they can sufficiently prove the loss is legitimate. In cases of fraud, gross negligence, or insolvency, the fund can be used to pay affected users directly (utilizing the last transparent balance report in the worst case), something which private insurance would never touch. While it's recommended to have official policies for coverage, a model where members vote would fully cover edge cases. (Could be similar to the Supreme Court where justices vote based on case law.) Such a model could fully protect all Canadians across all platforms. You can have a fiat coverage governed by legal agreements, and crypto-asset coverage governed by both multi-sig and legal agreements. It could be practical, affordable, and inclusive. Now, we are at a crossroads. We can happily give up our freedom, our innovation, and our money. We can pay hefty expenses to auditors, lawyers, and regulators year after year (and make no mistake - this cost will grow to many millions or even billions as the industry grows - and it will be borne by all Canadians on every platform because platforms are not going to eat up these costs at a loss). We can make it nearly impossible for any new platform to enter the marketplace, forcing Canadians to use the same stagnant platforms year after year. We can centralize and consolidate the entire industry into 2 or 3 big players and have everyone else fail (possibly to heavy losses of users of those platforms). And when a flawed security model doesn't work and gets breached, we can make it even more complicated with even more people in suits making big money doing the job that blockchain was supposed to do in the first place. We can build a system which is so intertwined and dependent on big government, traditional finance, and central bankers that it's future depends entirely on that of the fiat system, of fractional banking, and of government bail-outs. If we choose this path, as history has shown us over and over again, we can not go back, save for revolution. Our children and grandchildren will still be paying the consequences of what we decided today. Or, we can find solutions that work. We can maintain an open and innovative environment while making the adjustments we need to make to fully protect Canadian investors and cryptocurrency users, giving easy and affordable access to cryptocurrency for all Canadians on the platform of their choice, and creating an environment in which entrepreneurs and problem solvers can bring those solutions forward easily. None of the above precludes innovation in any way, or adds any unreasonable cost - and these three policies would demonstrably eliminate or resolve all 109 historic cases as studied here - that's every single case researched so far going back to 2011. It includes every loss that was studied so far not just in Canada but globally as well. Unfortunately, finding answers is the least challenging part. Far more challenging is to get platform operators and regulators to agree on anything. My last post got no response whatsoever, and while the OSC has told me they're happy for industry feedback, I believe my opinion alone is fairly meaningless. This takes the whole community working together to solve. So please let me know your thoughts. Please take the time to upvote and share this with people. Please - let's get this solved and not leave it up to other people to do. Facts/background/sources (skip if you like):
The inspiration for the paragraph about splitting wallets was an actual quote from a Canadian company providing custodial services in response to the OSC consultation paper: "We believe that it will be in the in best interests of investors to prohibit pooled crypto assets or ‘floats’. Most Platforms pool assets, citing reasons of practicality and expense. The recent hack of the world’s largest Platform – Binance – demonstrates the vulnerability of participants’ assets when such concessions are made. In this instance, the Platform’s entire hot wallet of Bitcoins, worth over $40 million, was stolen, facilitated in part by the pooling of client crypto assets." "the maintenance of participants (and Platform) crypto assets across multiple wallets distributes the related risk and responsibility of security - reducing the amount of insurance coverage required and making insurance coverage more readily obtainable". For the record, their reply also said nothing whatsoever about multi-sig or offline storage.
In addition to the fact that the $40m hack represented only one "hot wallet" of Binance, and they actually had the vast majority of assets in other wallets (including mostly cold wallets), multiple real cases have clearly demonstrated that risk is still present with multiple wallets. Bitfinex, VinDAX, Bithumb, Altsbit, BitPoint, Cryptopia, and just recently KuCoin all had multiple wallets breached all at the same time, and may represent a significantly larger impact on customers than the Binance breach which was fully covered by Binance. To represent that simply having multiple separate wallets under the same security scheme is a comprehensive way to reduce risk is just not true.
Private insurance has historically never covered a single loss in the cryptocurrency space (at least, not one that I was able to find), and there are notable cases where massive losses were not covered by insurance. Bitpay in 2015 and Yapizon in 2017 both had insurance policies that didn't pay out during the breach, even after a lengthly court process. The same insurance that ShakePay is presently using (and announced to much fanfare) was describe by their CEO himself as covering “physical theft of the media where the private keys are held,” which is something that has never historically happened. As was said with regard to the same policy in 2018 - “I don’t find it surprising that Lloyd’s is in this space,” said Johnson, adding that to his mind the challenge for everybody is figuring out how to structure these policies so that they are actually protective. “You can create an insurance policy that protects no one – you know there are so many caveats to the policy that it’s not super protective.”
The most profitable policy for a private insurance company is one with the most expensive premiums that they never have to pay a claim on. They have no inherent incentive to take care of people who lost funds. It's "cheaper" to take the reputational hit and fight the claim in court. The more money at stake, the more the insurance provider is incentivized to avoid payout. They're not going to insure the assets unless they have reasonable certainty to make a profit by doing so, and they're not going to pay out a massive sum unless it's legally forced. Private insurance is always structured to be maximally profitable to the insurance provider.
The circumvention of multi-sig was a key factor in the massive Bitfinex hack of over $60m of bitcoin, which today still sits being slowly used and is worth over $3b. While Bitfinex used a qualified custodian Bitgo, which was and still is active and one of the industry leaders of custodians, and they set up 2 of 3 multi-sig wallets, the entire system was routed through Bitfinex, such that Bitfinex customers could initiate the withdrawals in a "hot" fashion. This feature was also a hit with the hacker. The multi-sig was fully circumvented.
Bitpay in 2015 was another example of a breach that stole 5,000 bitcoins. This happened not through the exploit of any system in Bitpay, but because the CEO of a company they worked with got their computer hacked and the hackers were able to request multiple bitcoin purchases, which Bitpay honoured because they came from the customer's computer legitimately. Impersonation is a very common tactic used by fraudsters, and methods get more extreme all the time.
A notable case in Canada was the Canadian Bitcoins exploit. Funds were stored on a server in a Rogers Data Center, and the attendee was successfully convinced to reboot the server "in safe mode" with a simple phone call, thus bypassing the extensive security and enabling the theft.
The very nature of custodians circumvents multi-sig. This is because custodians are not just having to secure the assets against some sort of physical breach but against any form of social engineering, modification of orders, fraudulent withdrawal attempts, etc... If the security practices of signatories in a multi-sig arrangement are such that the breach risk of one signatory is 1 in 100, the requirement of 3 independent signatures makes the risk of theft 1 in 1,000,000. Since hackers tend to exploit the weakest link, a comparable custodian has to make the entry and exit points of their platform 10,000 times more secure than one of those signatories to provide equivalent protection. And if the signatories beef up their security by only 10x, the risk is now 1 in 1,000,000,000. The custodian has to be 1,000,000 times more secure. The larger and more complex a system is, the more potential vulnerabilities exist in it, and the fewer people can understand how the system works when performing upgrades. Even if a system is completely secure today, one has to also consider how that system might evolve over time or work with different members.
By contrast, offline multi-signature solutions have an extremely solid record, and in the entire history of cryptocurrency exchange incidents which I've studied (listed here), there has only been one incident (796 exchange in 2015) involving an offline multi-signature wallet. It happened because the customer's bitcoin address was modified by hackers, and the amount that was stolen ($230k) was immediately covered by the exchange operators. Basically, the platform operators were tricked into sending a legitimate withdrawal request to the wrong address because hackers exploited their platform to change that address. Such an issue would not be prevented in any way by the use of a custodian, as that custodian has no oversight whatsoever to the exchange platform. It's practical for all exchange operators to test large withdrawal transactions as a general policy, regardless of what model is used, and general best practice is to diagnose and fix such an exploit as soon as it occurs.
False promises on the backing of funds played a huge role in the downfall of Quadriga, and it's been exposed over and over again (MyCoin, PlusToken, Bitsane, Bitmarket, EZBTC, IDAX). Even today, customers have extremely limited certainty on whether their funds in exchanges are actually being backed or how they're being backed. While this issue is not unique to cryptocurrency exchanges, the complexity of the technology and the lack of any regulation or standards makes problems more widespread, and there is no "central bank" to come to the rescue as in the 2008 financial crisis or during the great depression when "9,000 banks failed".
In addition to fraudulent operations, the industry is full of cases where operators have suffered breaches and not reported them. Most recently, Einstein was the largest case in Canada, where ongoing breaches and fraud were perpetrated against the platform for multiple years and nobody found out until the platform collapsed completely. While fraud and breaches suck to deal with, they suck even more when not dealt with. Lack of visibility played a role in the largest downfalls of Mt. Gox, Cryptsy, and Bitgrail. In some cases, platforms are alleged to have suffered a hack and keep operating without admitting it at all, such as CoinBene.
It surprises some to learn that a cryptographic solution has already existed since 2013, and gained widespread support in 2014 after Mt. Gox. Proof of Reserves is a full cryptographic proof that allows any customer using an exchange to have complete certainty that their crypto-assets are fully backed by the platform in real-time. This is accomplished by proving that assets exist on the blockchain, are spendable, and fully cover customer deposits. It does not prove safety of assets or backing of fiat assets.
If we didn't care about privacy at all, a platform could publish their wallet addresses, sign a partial transaction, and put the full list of customer information and balances out publicly. Customers can each check that they are on the list, that the balances are accurate, that the total adds up, and that it's backed and spendable on the blockchain. Platforms who exclude any customer take a risk because that customer can easily check and see they were excluded. So together with all customers checking, this forms a full proof of backing of all crypto assets.
However, obviously customers care about their private information being published. Therefore, a hash of the information can be provided instead. Hash is one-way encryption. The hash allows the customer to validate inclusion (by hashing their own known information), while anyone looking at the list of hashes cannot determine the private information of any other user. All other parts of the scheme remain fully intact. A model like this is in use on the exchange CoinFloor in the UK.
A Merkle tree can provide even greater privacy. Instead of a list of balances, the balances are arranged into a binary tree. A customer starts from their node, and works their way to the top of the tree. For example, they know they have 5 BTC, they plus 1 other customer hold 7 BTC, they plus 2-3 other customers hold 17 BTC, etc... until they reach the root where all the BTC are represented. Thus, there is no way to find the balances of other individual customers aside from one unidentified customer in this case.
Proposals such as this had the backing of leaders in the community including Nic Carter, Greg Maxwell, and Zak Wilcox. Substantial and significant effort started back in 2013, with massive popularity in 2014. But what became of that effort? Very little. Exchange operators continue to refuse to give visibility. Despite the fact this information can often be obtained through trivial blockchain analysis, no Canadian platform has ever provided any wallet addresses publicly. As described by the CEO of Newton "For us to implement some kind of realtime Proof of Reserves solution, which I'm not opposed to, it would have to ... Preserve our users' privacy, as well as our own. Some kind of zero-knowledge proof". Kraken describes here in more detail why they haven't implemented such a scheme. According to professor Eli Ben-Sasson, when he spoke with exchanges, none were interested in implementing Proof of Reserves.
And yet, Kraken's places their reasoning on a page called "Proof of Reserves". More recently, both BitBuy and ShakePay have released reports titled "Proof of Reserves and Security Audit". Both reports contain disclaimers against being audits. Both reports trust the customer list provided by the platform, leaving the open possibility that multiple large accounts could have been excluded from the process. Proof of Reserves is a blockchain validation where customers see the wallets on the blockchain. The report from Kraken is 5 years old, but they leave it described as though it was just done a few weeks ago. And look at what they expect customers to do for validation. When firms represent something being "Proof of Reserve" when it's not, this is like a farmer growing fruit with pesticides and selling it in a farmers market as organic produce - except that these are people's hard-earned life savings at risk here. Platforms are misrepresenting the level of visibility in place and deceiving the public by their misuse of this term. They haven't proven anything.
Fraud isn't a problem that is unique to cryptocurrency. Fraud happens all the time. Enron, WorldCom, Nortel, Bear Stearns, Wells Fargo, Moser Baer, Wirecard, Bre-X, and Nicola are just some of the cases where frauds became large enough to become a big deal (and there are so many countless others). These all happened on 100% reversible assets despite regulations being in place. In many of these cases, the problems happened due to the over-complexity of the financial instruments. For example, Enron had "complex financial statements [which] were confusing to shareholders and analysts", creating "off-balance-sheet vehicles, complex financing structures, and deals so bewildering that few people could understand them". In cryptocurrency, we are often combining complex financial products with complex technologies and verification processes. We are naïve if we think problems like this won't happen. It is awkward and uncomfortable for many people to admit that they don't know how something works. If we want "money of the people" to work, the solutions have to be simple enough that "the people" can understand them, not so confusing that financial professionals and technology experts struggle to use or understand them.
For those who question the extent to which an organization can fool their way into a security consultancy role, HB Gary should be a great example to look at. Prior to trying to out anonymous, HB Gary was being actively hired by multiple US government agencies and others in the private sector (with glowing testimonials). The published articles and hosted professional security conferences. One should also look at this list of data breaches from the past 2 years. Many of them are large corporations, government entities, and technology companies. These are the ones we know about. Undoubtedly, there are many more that we do not know about. If HB Gary hadn't been "outted" by anonymous, would we have known they were insecure? If the same breach had happened outside of the public spotlight, would it even have been reported? Or would HB Gary have just deleted the Twitter posts, brought their site back up, done a couple patches, and kept on operating as though nothing had happened?
In the case of Quadriga, the facts are clear. Despite past experience with platforms such as MapleChange in Canada and others around the world, no guidance or even the most basic of a framework was put in place by regulators. By not clarifying any sort of legal framework, regulators enabled a situation where a platform could be run by former criminal Mike Dhanini/Omar Patryn, and where funds could be held fully unchecked by one person. At the same time, the lack of regulation deterred legitimate entities from running competing platforms and Quadriga was granted a money services business license for multiple years of operation, which gave the firm the appearance of legitimacy. Regulators did little to protect Canadians despite Quadriga failing to file taxes from 2016 onward. The entire administrative team had resigned and this was public knowledge. Many people had suspicions of what was going on, including Ryan Mueller, who forwarded complaints to the authorities. These were ignored, giving Gerald Cotten the opportunity to escape without justice.
There are multiple issues with the SOC II model including the prohibitive cost (you have to find a third party accounting firm and the prices are not even listed publicly on any sites), the requirement of operating for a year (impossible for new platforms), and lack of any public visibility (SOC II are private reports that aren't shared outside the people in suits).
Securities frameworks are expensive. Sarbanes-Oxley is estimated to cost $5.1 million USD/yr for the average Fortune 500 company in the United States. Since "Fortune 500" represents the top 500 companies, that means well over $2.55 billion USD (~$3.4 billion CAD) is going to people in suits. Isn't the problem of trust and verification the exact problem that the blockchain is supposed to solve?
To use Quadriga as justification for why custodians or SOC II or other advanced schemes are needed for platforms is rather silly, when any framework or visibility at all, or even the most basic of storage policies, would have prevented the whole thing. It's just an embarrassment.
We are now seeing regulators take strong action. CoinSquare in Canada with multi-million dollar fines. BitMex from the US, criminal charges and arrests. OkEx, with full disregard of withdrawals and no communication. Who's next?
We have a unique window today where we can solve these problems, and not permanently destroy innovation with unreasonable expectations, but we need to act quickly. This is a unique historic time that will never come again.
Bitcoin Detailed Analysis-What If The Price Breaks $ 16000 or What If It Does Not?
Bitcoin is running at full speed now. Especially yesterday, in just 24 hours, the world’s largest cryptocurrency rose by nearly $ 1,500. How come things suddenly go so fast? And what is the ceiling of this run? You look at the daily chart below. Since May, bitcoin has been moving in an upward channel, between two upward trend lines. The price has scraped against the top of this channel in recent days, and a correction was therefore expected. It never came, on the contrary. Bitcoin shot through the top trendline with a lot of violence yesterday. https://preview.redd.it/sbweuedwlsx51.jpg?width=753&format=pjpg&auto=webp&s=d989250cd71129ae90ff0068cb9b8f4e162a0d57 But the daily chart doesn’t give you the full picture. To understand why things are going so fast now, we look at the monthly chart. The last strong resistance was USD 13,853, the green line. This was the highest monthly closing price ever, the first red arrow. In 2019 it was not possible to break this level. You can see that by the second red arrow. And the third arrow indicates that bitcoin just failed to close the month above this resistance. https://preview.redd.it/8ox3zfoxlsx51.jpg?width=804&format=pjpg&auto=webp&s=2ac67cf45bab75ec836da32b8f4f928b4cf1ad41 Final hurdle towards all-time high Where is the next resistance for bitcoin? For this, we switch to the weekly chart. The next resistance can be found around 16,170 dollars, the lower green line on the graph. On the chart you can see that this price has been a significant resistance at the beginning of 2018. And above that? There we come very close to the highest value of bitcoin ever. So, around $ 16,000, bitcoin finds the last real resistance towards the top. https://preview.redd.it/3vfnviizlsx51.jpg?width=759&format=pjpg&auto=webp&s=ffe375f92e8f278c89a7d9618c3d752b01761b46 The market is overly optimistic. But before we talk bitcoin towards $ 25,000, it is good to take a step back and look at the market sentiment. According to the Alternative’s Fear & Greed Index, there is extreme greed right now. This figure has not been this high since June 2019. https://preview.redd.it/x8w3lfk0msx51.jpg?width=652&format=pjpg&auto=webp&s=a8ae228cf919ca0fd014b9316d918d669e8a8640 The Fear & Greed Index is an index between 0 and 100 and gives you information about the market sentiment. The figure is a weighted average of all kinds of factors in the market, such as volatility of the price, trading volume, sentiment on social media, and bitcoin’s market dominance. Currently, the counter is at 90, which means that there is massive greed in the market. This is often a sign that the market needs to cool down a bit. Before we make another move up, the price must correct or move sideways for a while. What can we expect from bitcoin? Back to the daily bitcoin chart. The price is gaining momentum. All scenarios are still on the table. To prepare you for everything, we outline two scenarios: bullish (positive) and bearish (negative). Bullish Will bitcoin take it one step further in the coming days? We find the first resistance at USD 16,170, which corresponds to the weekly closing price of January 2018. After that, USD 18,964 is in sight, the highest ever weekly closing price of bitcoin. Bearish In recent days, bitcoin has risen sharply in value. A correction is, therefore, also a possible scenario. The first support is the top of the channel, around $ 14,600. If there is a massive correction, bitcoin can drop back to 12,000 dollars. As long as the price finds support at the bottom of the rising channel, the upward trend will remain intact.
BitOffer Asset Custody BUIDL, Customized for Whales and Cryptocurrency Enthusiasts
https://preview.redd.it/j7qbnuuu08w51.png?width=3201&format=png&auto=webp&s=b2f3e4d22e22363dd0329804fbfdb536a4f430b9 The year 2020 is unusual as the COVID-19 attacked, the economic growth slowed down while the international business was gloomy and the financial market became much more volatile. Under the situation above, panic has been the main emotion when people are calling for a stable investment with high returns urgently to grow their asset value gradually. After fully understanding this demand, BitOffer and Goldman Sachs Asian team launched the first cryptocurrency guaranteed fund. With 2-year preparation in strategic layout, BitOffer will build a luxurious asset custody ecosystem to provide customized wealth management products for whales and cryptocurrency enthusiasts. Though most exchanges were focusing on spot trading and futures trading, BitOffer anticipated that the market of derivatives still had a huge blank to fill. Thus, the first Bitcoin American Options, Bitcoin Ups & Downs, Dual-currency, etc. were launched by BitOffer. As 2 years gone by, BitOffer has become the most renowned Bitcoin Options provider with 100 million USD trading volume that is created by 100 thousand worldwide members. Even though, those data never stops being refreshed. Finally, most exchanges started noticing that the cryptocurrency derivative market still has a huge blank. However, the team of BitOffer saw something others never noticed again. As the economy developed, people’s net worth improved. Since then, the demand for asset management has been desired to a much more expected extent. Asset Custody will be destined in the future. Though, the annualized yield of the products which are provided by the banking, financial institutions, and cryptocurrency exchanges is normally low and floating. The demand for human beings cannot be satisfied. Overall, on Oct 23rd, BitOffer and Goldman Sachs Asian team launch the first cryptocurrency guaranteed fund which gives a 20% annualized yield. As it guarantees investors’ original investment, it means the 20% APY can be made with 0 risks. The main strategies of the fund are Quantitative Arbitrage, Quantitative Hedge and High-frequency trading, etc. Compared with other Competitive Products: Asset Servicing on Huobi Global: 7% Annualized Yield (Non-guaranteed), Binance Earn: About 6% Annualized Yield (Non-guaranteed), COBO: 5% Annualized Yield (Non-guaranteed) BitOffer Quantitative Fund: 20% Annualized Yield (Capital & Interest Guaranteed) After a simple comparison, we can see the return of the BitOffer Quantitative Fund is 3 times higher than that of others. Moreover, to guarantee investors’ original investment and interests, BitOffer Quantitative team shall do great in Quantitative and Arbitrage. Lucian, the Chief Analyst of BitOffer, said “QA Fund is the first step to the field of asset custody. BitOffer owns a leading R&D and risk-control team. When BitOffer just launched, we have set up the blueprint for future development. In addition, BitOffer does not offer OTC trading, which means that BitOffer will never trigger any regulatory issues in any country. At the same time, BitOffer uses multiple wallets which separated into Cold Wallet and Hot Wallet, which can efficiently protect users’ assets from any risk. BitOffer is one of the safest Bitcoin exchanges.”. Until now, BitOffer has served 4,000 institutions and more than 100 thousand users with their professional asset custody. Besides, BitOffer also provided customized Bitcoin wealth management products for Bitcoin Holders. The Dual-Currency provided by BitOffer offers the highest APY (which reaches 1,000%) than that of the same product on other exchanges. Recently, BitOffer even cooperated with Goldman Sachs and launched BitOffer Quantitative Fund which guarantees investors’ funds and interest. In 2 years, BitOffer will keep building the most innovative asset custody ecosystem. To seize the initiative, BitOffer will keep developing and improving its own technique and service. In the near future, BitOffer will also provide a One-stop STO service: users will be able to trade or complete asset custody on truly their own wallets. It would be the trend to obey the regulation policy, and also the trend of the cryptocurrency financial ecosystem. The STO market would be pegged with real assets, it shall be a potential market of which value cannot be estimated. On the occasion, BitOffer will become the leader of the whole cryptocurrency derivatives market.
Aryacoin is a new cryptocurrency, which allows for decentralized, peer to peer transactions of electronic cash. It is like Bitcoin and Litecoin, but the trading of the coin occurs on sales platforms that have no restriction to use. Further, it was created with the goal of addressing the double spend issues of Bitcoin and does so using a timestamp server to verify transactions. It works by taking the hash of a block of items to be timestamped and widely publishing the hash. The timestamp proves that the data must have existed at the time in order to get the hash. Each timestamp then includes the previous timestamp in its hash, forming a chain. The Aryacoin team is continuously developing new use cases for the coin, including exchanges where users can exchange the coins without any fees or restrictions, and offline options where the coins can be bought and sold for cash. The coins can also be used on the company’s other platform, mrdigicoin.io. Along with the coin, there is a digital wallet that can be created and controlled by the user entirely, with no control being retained by the Aryacoin team.
The concept of Blockchain first came to fame in October 2008, as part of a proposal for Bitcoin, with the aim to create P2P money without banks. Bitcoin introduced a novel solution to the age-old human problem of trust. The underlying blockchain technology allows us to trust the outputs of the system without trusting any actor within it. People and institutions who do not know or trust each other, reside in different countries, are subject to different jurisdictions, and who have no legally binding agreements with each other, can now interact over the Internet without the need for trusted third parties like banks, Internet platforms, or other types of clearing institutions. When bitcoin was launched it was revolutionary allowing people to transfer money to anytime and anywhere with very low transaction fees . It was decentralized and their is no third party involved in the transaction , only the sender and receiver were involved. This paper provide a solution to the double-spending problem using a peer-to-peer distributed timestamp server to generate computational proof of the chronological order of transactions.The system is secure as long as honest nodes collectively control more CPU power than any cooperating group of attacker nodes. Bitcoin was made so that it would not be controlled or regulated but now exchanges and governments are regulating bitcoin and other cryptocurrencies at every step. Aryacoin was developed to overcome these restrictions on a free currency. Aryacoin is a new age cryptocurrency, which withholds the original principle on which the concept of cryptocurrency was established. Combining the best in blockchain technology since the time of its creation, Aryacoin strives to deliver the highest trading and mining standards for its community.
1.1 OVERVIEW ABOUT ARYACOIN
Aryacoin is a new age cryptocurrency, which withholds the original principle on which the concept of cryptocurrency was established. Combining the best in blockchain technology since the time of its creation, Aryacoin strives to deliver the highest trading and mining standards for its community. Aryacoin is a blockchain based project that allows users to access their wallet on the web and mobile browsers, using their login details. Aryacoin can be mined; it also can be exchanged by other digital currencies in several world-famous exchanges such as Hitbtc, CoinEx, P2pb2b, WhiteBit, Changelly and is also listed in reputable wallets such as Coinomi and Guarda. Aryacoin is a coin, which can be used by anyone looking to use cryptocurrency which allows them to keep their privacy even when buying/selling the coin along with while using the coin during transactions. Proof of work and cryptographic hashes allows transactions to verified. Stable Fee Per AYA is a unique feature of Aryacoin, so by increasing the amount or volume of the transaction, there is no change in the fee within the network, which means that the fee for sending an amount less than 1 AYA is equal to several hundred million AYA. Another unique feature of Aryacoin is the undetectability of transactions in Explorer, such as the DASH and Monero, of course, this operation is unique to Aryacoin. Using Aryacoin digital currency, like other currencies, international transactions can be done very quickly and there are no limitations in this area as the creators claim. Aryacoin aims to allow users to access the Aryacoin wallet via the web and mobile browsers using their login details. Aryacoin is a peer-to-peer electronic cash system that enables users to send and receive payments directly from one party to another, and allow them to transfer funds across borders with no restriction or third party involvement. The blockchain-based system embraces the digital signature, which prevents double spending and low transfer fees, which enables users to transfer huge amounts with very low fees. The proof-of-work consensus mechanism allows each transaction to be verified and confirmed, while anonymity enables users to use the coin anywhere at any time. According to the website of the operation, each wallet is divided into 2 or more AYA wallet addresses for each transaction, and depending on the volume of the transaction block, the origin, and destination of transactions in the network can not be traced and displayed to the public. In fact, each wallet in Aryacoin consists of a total of several wallets. The number of these wallets increases per transaction to increase both security and privacy. Aryacoin also uses the dPoW protocol. In the dPoW protocol, a second layer is added to the network to verify transactions, which makes “51% attack” impossible even with more than half of the network hash, and blocks whose Blockchain uses this second layer of security never run the risk of 51% attacks. AYA has been listed on a number of crypto exchanges, unlike other main cryptocurrencies, it cannot be directly purchased with fiats money. However, You can still easily buy this coin by first buying Bitcoin from any large exchanges and then transfer to the exchange that offers to trade this coin.
1.1.1 ARYACOIN HISTORY
Aryacoin (AYA) is a new cryptocurrency, which has been created by a group of Iranian developers, is an altcoin which allows for decentralised, peer to peer transactions of electronic cash without any fees whatsoever. Along with the coin, there is a digital wallet that can be created and managed by the user entirely, with no control being retained by the Aryacoin team. Aryacoin’s founder, Kiumars Parsa, has been a fan of alternative currencies and particularly Bitcoin. “We see people from all around the world using Blockchain technology and the great benefits that came with it and it then that I decided to solve this puzzle for find a way of bringing the last missing piece to the jigsaw. The idea for Aryacoin was born.” Parsa said. Parsa and his team of Iranian ex-pats not only persevered but expedited the project and just a year later, in the summer of 2019, the first version of Aryacoin was released. In 2020, Aryacoin is the first and only Iranian coin listed on CMC. Parsa goes on to state that it is now the strength of the community that has invested in the coin that will ultimately drive its success, alongside its robust technology and appealing 0% network fees. “We have thousands of voices behind Aryacoin. People for the people make this coin. It is a massive shout out for democracy. This had made us base the whole team strategy on the benefits for both our users and our traders.” “One key example is that the network fee on AYA Blockchain is 0%. Yes, absolutely nothing, which which differentiates us from other networks. What also differentiates us from other coins is that we have AYAPAY which is the first cryptocurrency Gateway in the world which does not save funds on third party storage with all funds being forwarded directly to any wallet address that the Gateway owner requests”. “So for the first time ever, and unlike other gateways, incoming funds will be saved on the users account with submitted withdrawal requests then made on the Gateway host website. In AYAPAY which has also been developed by the Aryacoin team, all funds without extra fees or extra costs will directly forwarded to users wallets. We have named this technology as CloudWithdrawal.” “We are continuously challenging ourselves as it is a crowded marketplace. We are striving to have a safer Blockchain against 51% attacks, faster confirmations speeds of transactions, cheaper network fee, growing the market by cooperation with Top tier Exchangers.”
1.1.2 ARYACOIN’S MAIN GOAL
Aryacoin’s main goal is to educate people and give them the freedom to use cryptocurrency in any way they want. Aryacoin empowers the users to transfer, pay, trade cryptocurrency from any country around the globe. Platforms that have been created by Aryacoin Team, as well as those that will go live in future, operate on the same principle and exclude absolutely no one.
1.1.3 PROBLEM ARYACOIN SEEKS TO SOLVE
Aryacoin aims to provide a long-term solution to the problem of double spending, which is still common in the crypto market. The developers of the system have created a peer-to-peer distributed timestamp server that generates computational proof of the transactions as they occur. Besides, the system remains secure provided honest nodes control more CPU power than any cooperating group of attacker nodes. While Bitcoin was designed not to be regulated or controlled, many exchanges and governments have put regulatory measures on the pioneer cryptocurrency at every step. Aryacoin aims to overcome these restrictions as a free digital currency.
1.1.4 BENEFITS OF USING ARYACOIN
Aryacoin solution offers the following benefits:
Real-time update: whether you’re going on a holiday or a business trip, no problem. You can access your coins all over the world.
Instant operations: Aryacoin makes it quite easy for you to use your digital wallet and perform various operations with it.
Safe and secure: all your data is stored encrypted and can only be decrypted with your private key, seed, or password.
Strong security: The system has no control over your wallet. You are 100% in charge of your wallet and funds.
1.1.5 ARYACOIN FEATURES
1. Anonymity The coin provides decent level of anonymity for all its users. The users can send their transactions to any of the public nodes to be broadcasted , the transaction sent to the nodes should be signed by the private key of the sender address . This allows the users to use the coin anywhere any time , sending transactions directly to the node allows users from any place and country . 2. Real Life Usage aryacoin’s team is continuously developing new and innovative ways to use the coins , they are currently developing exchanges where the users can exchange the coins without any fees and any restrictions . They also are currently developing other innovative technologies, which would allow users to spend our coins everywhere and anywhere. 3. Offline Exchanges They are also working with different offline vendors which would enable them to buy and sell the coins directly to our users on a fixed/variable price this would allow easy buy/sell directly using cash . This would allow the coins to be accessible to users without any restrictions which most of the online exchanges have, also increase the value and number of users along with new ways to spend the coin. This would increase anonymity level of the coin. In addition, introduce new users into the cryptomarket and technology. Creating a revolution, which educates people about crypto and introduce them to the crypto world, which introduces a completely new group of people into crypto and a move towards a Decentralized future! 4. Transactions When it comes to transactions, Aryacoin embraces a chain of digital signatures, where each owner simply transfers the coin to the next person by digitally signing a hash of the previous transaction and the public key of the next owner. The recipient can then verify the signatures to confirm the chain of ownership. Importantly, Aryacoin comes with a trusted central authority that checks every transaction for double spending. 5. Business Partner with Simplex Aryacoin is the first and only Iranian digital currency that managed to obtain a trading license in other countries. In collaboration with the foundation and financial giant Simplex, a major cryptocurrency company that has large companies such as Binance, P2P, Changelly, etc. Aryacoin has been licensed to enter the world’s major exchanges, as well as the possibility of purchasing AYA through Credit Cards, which will begin in the second half of 2020. Also, the possibility of purchasing Aryacoin through Visa and MasterCard credit cards will be activated simultaneously inside the Aryacoin site. plus, in less than a year, AYA will be placed next to big names such as CoinCapMarket, Coinomi, P2P, Coinpayments and many other world-class brands today.
1.1.6 WHY CHOOSE ARYACOIN?
If you want to use a cryptocurrency that allows you to keep your privacy online even when buying and selling the coins, the Aryacoin team claims that AYA is the way to go. Aryacoin is putting in the work: with more ways to buy and sell, and fixing the issues that were present in the original Bitcoin, plus pushing the boundaries with innovative solutions in cryptocurrencies. You can get started using Aryacoin (AYA) payments simply by having a CoinPayments account!
1.1.7 ARYANA CENTRALIZED EXCHANGE
Aryana, the first Iranian exchange is a unique platform with the following features:
The first real international Persian exchange that obtains international licenses and is listed in CoinMarketCap.
The first Iranian exchange that has been cooperating with a legal and European exchange for 3 years.
The possibility of trading in Tomans (available currency in Iran) at the user’s desired price and getting rid of the transaction prices imposed by domestic sites inside Iran.
There is an internal fee payment plan by Iranian domestic banks for depositing and withdrawing Tomans for Aryacoin holders in Aryana Exchange.
The number that you see on the monitor and in your account will be equal to the number that is transferred to your bank account without a difference of one Rial.
The last but not least, noting the fact that there is a trading in Tomans possibility in Aryana exchange.
Aryana Exchange is using the most powerful, fastest, and most expensive server in the world, Google Cloud Platform (GCP), which is currently the highest quality server for an Iranian site, so that professional traders do not lag behind the market even for a second. The feature of Smart Trading Robots is one of the most powerful features for digital currency traders. Digital cryptocurrency traders are well aware of how much they will benefit from smart trading robots. In the Aryana exchange, it is possible to connect exchange user accounts to intelligent trading bots and trade even when they are offline. The injection of $ 1 million a day in liquidity by the WhiteBite exchange to maintain and support the price of Tether and eliminate the Tether fluctuations with Bitcoin instabilities used by profiteers to become a matter of course.
1.1.8 HOW DOES ARYACOIN WORK?
Aryacoin (AYA) tries to ensure a high level of security and privacy. The team has made sure to eliminate any trading restrictions for the network users: no verification is required to carry out transactions on AYA, making the project truly anonymous, decentralized, and giving it a real use in day-to-day life. The Delayed-Proof-of-Work (dPoW) algorithm makes the Aryacoin blockchain immune to any attempts of a 51% attack. AYA defines a coin as a chain of digital signatures — each owner transfers the coin to the next owner by digitally signing the hash of the previous transaction and the public key of the next owner, and the receiver verifies the signatures and the chain of ownership.
2. ARYACOIN TECHNOLOGY
They use a proof-of-work system similar to Adam Back’s Hashcash to implement a distributed timestamp server on a peer-to-peer basis, rather than newspaper or Usenet publications. The proof-of-work involves scanning for a value that when hashed, such as with SHA-256, the hash begins with a number of zero bits. The average work required is exponential in the number of zero bits required and can be verified by executing a single hash. For their timestamp network, they implement the proof-of-work by incrementing a nonce in the block until a value is found that gives the block’s hash the required zero bits. Once the CPU effort has been expended to make it satisfy the proof-of-work, the block cannot be changed without redoing the work. As later blocks are chained after it, the work to change the block would include redoing all the blocks after it. The proof-of-work also solves the problem of determining representation in majority decision making. If the majority were based on one-IP-address-one-vote, it could be subverted by anyone able to allocate many IPs. Proof-of-work is essentially one-CPU-one-vote. The majority decision is represented by the longest chain, which has the greatest proof-of-work effort invested in it. If honest nodes control a majority of CPU power, the honest chain will grow the fastest and outpace any competing chains. To modify a past block, an attacker would have to redo the proof-of-work of the block and all blocks after it, then catch up with, and surpass the work of the honest nodes.
The steps to run the network are as follows:
New transactions are broadcast to all nodes.
Each node collects new transactions into a block.
Each node works on finding a difficult proof-of-work for its block.
When a node finds a proof-of-work, it broadcasts the block to all nodes.
Nodes accept the block only if all transactions in it are valid and not already spent.
This is a very simple system that makes the network fast and scalable, while also providing a decent level of anonymity for all users. Users can send their transactions to any of the public nodes to be broadcast, and the private key of the sender’s address should sign any transaction sent to the nodes. This way, all transaction info remains strictly confidential. It also allows users to send transactions directly to the node from any place at any time and allows the transferring of huge amounts with very low fees.
2.3 AYAPAY PAYMENT SERVICES GATEWAY:
According to creators Aryacoin, the development team has succeeded in inventing a new blockchain technology for the first time in the world, which is undoubtedly a big step and great news for all digital currency enthusiasts around the world. This new technology has been implemented on the Aryacoin AYAPAY platform and was unveiled on October 2. AYAPAY payment platform is the only payment gateway in the world that does not save money in users’ accounts and transfers incoming coins directly to any wallet address requested by the gateway owner without any additional transaction or fee. In other similar systems or even systems such as PayPal, money is stored in the user account.
2.4 CONSENSUS ALGORITHM IN ARYACOIN
The devs introduced the Delayed-Proof-of-Work (dPoW) algorithm, which represents a hybrid consensus method that allows one blockchain to take advantage of the security provided by the hashing power of another blockchain. The AYA blockchain works on dPoW and can use such consensus methods as Proof-of-Work (PoW) or Proof-of-Stake (PoS) and join to any desired PoW blockchain. The main purpose of this is to allow the blockchain to continue operating without notary nodes on the basis of its original consensus method. In this situation, additional security will no longer be provided through the attached blockchain, but this is not a particularly significant problem. dPoW can improve the security level and reduce energy consumption for any blockchain.
2.5 DOUBLE-SPEND PROBLEM AND SOLUTION
One of the main problems in the blockchain world is that a receiver is unable to verify whether or not one of the senders did not double-spend. Aryacoin provides the solution, and has established a trusted central authority, or mint, that checks every transaction for double-spending. Only the mint can issue a new coin and all the coins issued directly from the mint are trusted and cannot be double-spent. However, such a system cannot therefore be fully decentralized because it depends on the company running the mint, similar to a bank. Aryacoin implements a scheme where the receiver knows that the previous owners did not sign any earlier transactions. The mint is aware of all transactions including which of them arrived first. The developers used an interesting solution called the Timestamp Server, which works by taking a hash of a block of items to be ‘timestamped’ and publishing the hash. Each timestamp includes the previous timestamp in its hash, forming a chain. To modify a block, an attacker would have to redo the proof-of-work of all previous blocks, then catch up with, and surpass the work of the honest nodes. This is almost impossible, and makes the network processes more secure. The proof-of-work difficulty varies according to circumstances. Such an approach ensures reliability and high throughput.
3. ARYACOIN ROADMAP
April 2019: The launch of Aryacoin; AYA ICO, resulting in over 30BTC collected December 2019: The launch of AYA Pay April 2020: The successful Hamedan Hardfork, supported by all AYA exchanges, aimed at integrating the dPoW algorithm, improving the security of the AYA blockchain. June 2020: Aryana Exchange goes live, opening more trading opportunities globally July 2020: The enabling of our Coin Exchanger November 2020: The implementation of Smart Contracts into the Aryacoin Ecosystem Q1 2021: Alef B goes live (more details coming soon)
Aryacoin (AYA) is a new age cryptocurrency that combines the best of the blockchain technology and strives to deliver high trading and mining standards, enabling users to make peer-to-peer decentralized transactions of electronic cash. Aryacoin is part of an ecosystem that includes payment gateway Ayapay and the Ayabank. AYA has a partnership with the Microsoft Azure cloud platform, which provides the ability to develop applications and store data on servers located in distributed data centers. The network fee for the AYA Blockchain is 0%. In Ayapay service, which has been developed by the Aryacoin team, all funds without extra fees or costs are directly forwarded to users’ wallets with technology called CloudWithdrawal. The devs team is introducing new use cases including exchanges where users will exchange AYA without any restrictions. You can buy AYA on an exchange of your choice, create an Aryacoin wallet, and store it in Guarda.
Here is how to play the altcoin game - for newbies & champs
I have been here for many previous altcoin seasons (2013,2017 etc) and wanted to share knowedle. It's a LOOONG article. The evaluation of altcoins (i.e not Bitcoin) is one of the most difficult and profitable exercises. Here I will outline my methodology and thinking but we have to take some things as a given. The first is that the whole market is going up or down with forces that we can't predict or control. Bitcoin is correlated with economic environments, money supply increases, safe havens such as Gold, hype and country regulations. This is an impossible mix to analyze and almost everyone fails at it. That's why you see people valuing Bitcoin from $100 to $500k frequently. Although I am bullish on the prospects of Bitcoin and decentralization and smart contract platforms, this is not the game I will be describing. I am talking about a game where you try to maximize your BTC holdings by investing in altcoins. We win this game even if we are at a loss in fiat currency value. To put it another way:
If you are not bullish in general on cryptocurrencies you have no place in investing or trading cryptocurrencies since it's always a losing proposition to trade in bubbles, a scientifically proven fact. If on the other hand you are then your goal is to grow your portfolio more than you would if holding BTC/ETH for example.
Bitcoin is the big boy
How the market works is not easily identifiable if you haven't graduated from the 2017 crypto university. When there is a bull market everything seems amazingly profitable and things keep going up outgrowing Bitcoin by orders of magnitude and you are a genius. The problem with this is that it only works while Bitcoin is going up a little bit or trades sideways. When it decides to move big then altcoins lose value both on the way up and on the way down. The second part is obvious and proven since all altcoins from 2017 are at a fraction of their BTC value (usually in the range of 80% or more down). Also, when BTC is making a big move upwards everyone exits altcoins to ride the wave. It is possible that the altcoin market behaves as an inversed leveraged ETF with leakage where in a certain period while Bitcoin starts at 10k and ends at 10k for example, altcoins have lost a lot of value because of the above things happening.
We are doing it anyway champ!
OK so we understand the risks and just wanna gambol with our money right? I get it. Why do that? Because finding the ideal scenario and period can be extremely profitable. In 2017 several altcoins went up 40x more than BTC. But again, if you don't chose wisely many of them have gone back to zero (the author has first hand experience in this!), they have been delisted and nobody remembers them. The actual mentality to have is very important and resembles poker and other speculative games: A certain altcoin can go up in value indefinitely but can only lose it's starting investment. Think about it. You either lose 1 metric or gain many many more. Now that sounds amazing but firstly as we said we have the goal to outperform our benchmark (BTC) and secondly that going up in value a lot means that the probability is quite low. There is this notion of Expected Value (EV) that poker players apply in these kind of situations and it goes like that. If you think that a certain coin has a probability let's say 10% to go up 10X and 90% probability it goes to zero it's an even bet. If you think that probability is 11% then it's a good bet, a profitable bet and you should take it. You get the point right? It's not that it can only go 10X or 0X, there is a whole range of probability outcomes that are too mathematical to explain here and it doesn't help so much because nobody can do such analysis with altcoins. See below on how we can approximate it.
How to evaluate altcoins
A range of different things to take into account outlined below will form our decision making. Not a single one of them should dictate 100% of our strategy.
It's all about market cap. Repeat after me. The price of a coin doesn't mean anything. Say it 10 times until you believe it. I can't remember how many times I had conversations with people that were comparing coins using their coin price instead of their market cap. To make this easy to get.
If I decide because the sky is blue to make my coin supply 100 Trillion FoolCoins with a price of $0.001 and there is another WiseCoin with a supply of 100 Million and price of $1 then FoolCoins are more expensive. - Alex Fin's Cap Law
This is done usually in the stock world and it means that each company has some fundamental value that includes it's assets, customers, growth prospects, sector prospects and leadership competence but mostly centered in financial measures such as P/E ratios etc. Valuation is a proper economic discipline by itself taught in universities. OK, now throw everything out of the window!. This kind of analysis is impossible in vague concepts and innovations that are currently cryptocurrencies. Ethereum was frequently priced at the fictional price of gas when all financial systems on earth run on the platform after decades (a bit of exaggeration here). No project is currently profitable enough to justify a valuation multiple that is usually equal to P/E in the thousands or more. As such we need to take other things into account. What I do is included in the list below:
Check Github. You need to make sure there is active development for the platform and it's a very bad sign if the project is either keeping the code closed source or even worse there is simply no development. No projects are "complete".
Check Website. If the website is written in bad English the Chinese google translate type it means that they are not serious enough to produce an unbreakable decentralized project. If you can't write English you can't change the world, period. That's a deal breaker.
Check Team's Linkedin. Numerous projects have either fake Linkedin accounts or the team is comprised mainly by unexperienced employees that are even shown to be working in other companies currently.
Check backers. Projects that have Binance, Coinbase or Silicon Valley VC funds backing them are way more legit but way more overpriced too!
One of my favorite ways to value altcoins that is based on the same principle in the stock market is to look at peers and decide what is the maximum cap it can grow to. As an example you take a second layer Ethereum solution that has an ICO and you want to decide if you will enter or not. You can take a look at other coins that are in the same business and compare their market caps. Thinking that your coin will outperform by a lot the top coins currently is overly optimistic so I usually take a lower valuation as a target price. If the initial offering is directly implying a valuation that is more than that then there is no room to grow according to my analysis and I skip it. Many times this has proven me wrong because it's a game theory problem where if many people think irrationally in a market it becomes a self-fulfilling prophecy. But since there is opportunity cost involved, in the long run, getting in initial offerings that have a lot of room to grow will pay off as a strategy.
In 2017 the sexiest sector was platforms and then coins including privacy ones. Platforms are obviously still a highly rated sector because everything is being built on them, but privacy is not as hot as it used to be. In 2018 DEXes were all they hype but still people are massively using centralized exchanges. In 2020 Defi is the hottest sector and it includes platforms, oracles and Defi projects. What I am saying is that a project gets extra points if it's a Defi one in 2020 and minus points if it's a payment system that will conquer the world as it was in 2017 because that's old news. This is closely related to the next section.
Needless to say that the crypto market is a worse FOMO type of inexperienced trigger happy yolo investors , much worse than the Robinhood crowd that drove a bankrupt company's stock 1200% after they declared bankruptcy. The result is that there are numerous projects that are basically either vaporware or just so overhyped that their valuation has no connection to reality. Should we avoid those kind of projects? No and I will explain why. There are many very good technically projects that had zero hype potential due to incompetent marketing departments that made them tank. An example (without shilling because I sold out a while back) is Quantum Resistant Ledger. This project has amazing quantum resistant blockchain, the only one running now, has a platform that people can build tokens and messaging systems and other magnificent stuff. Just check how they fared up to now and you will get the point. A project *needs* to have a hype factor because you cannot judge it as normal stocks that you can do value investing like Warren Buffet does where a company will inevitable post sales and profitability numbers and investors will get dividends. Actually the last sentence is the most important: No dividends. Even projects that give you tokens or coins as dividends are not real dividends because if the coin tanks the value of the dividend tanks. This is NOT the case with company stocks where you get dollars even if the company stock tanks. All that being said, I would advice against betting on projects that have a lot of hype but little substance (but that should be obvious!).
How to construct your portfolio
My strategy and philosophy in investing is that risk should be proportional to investment capital. That means that if you are investing 100K in the crypto market your portfolio should be very different than someone investing 1K because 10% annual gains are nothing in the latter while they are very significant in the former. Starting from this principle each individual needs to construct a portfolio according to how much risk he wants to take. I will emphasize two important concepts that play well with what I said. In the first instance of a big portfolio you should concentrate on this mantra: "Diversification is the only free meal in finance". In the case of a small portfolio then this mantra is more important: "Concentrate to create wealth, diversify to maintain wealth". Usually in a big portfolio you would want to hold some big coins such as BTC and ETH to weather the ups and downs explained in previous paragraphs while generating profits and keep progressively smaller parts of your portfolio for riskier investments. Maybe 50% of this portfolio could be big caps and 10% very risky initial offerings. Adapting risk progressively to smaller portfolios makes sense but I think it would be irrational to keep more than 30% of a portfolio no matter what tied to one coin due to the very high risk of bankruptcy.
The altseason is supposedly coming every 3 months. Truth is that nobody can predict it but altcoins can be profitable no matter what. Forget about maximalists who are stuck in their dogmas. Altcoins deliver different value propositions and it makes sense because we are very far from a situation where some project offers everything like Amazon and we wouldn't even want that in the first place since we are talking about decentralization and not a winner takes all and becomes a monster kind of scenario! Some last minute advice:
Stay out of paid telegram/discord pump groups. They are deadly for your wallet.
Avoid jumping on overhyped coins that have pumped massively during the last days without any very important news.
Don't keep coins in obscure exchanges for too long or you will get burned with certainty.
Stop thinking that your coin will 1000x and overtake Bitcoin!
P.S If you find value in reading this and want more weekly consider subscribing to my newsletterhere
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Binance Coin (BNB) makes new all-time high against Bitcoin
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