The Dream of Passive Income - What Are The Options?
There is this overall dream that probably everybody has: earning money while they sleep. By now everybody who is reading this will probably know that I am talking about the holy grail of investing: passive income! In this article I want to talk about what I understand under passive income and present a few ways that it is apparently possible to earn passive income. I will also try and rate these ways and will let you know what my opinion about this is.
How I Define Passive Income
Like I mentioned in the introduction, a lot of people think of passive income as money which flows into their wallets without doing anything aka sleeping. I have a slightly different approach to this. My definition can be divided into two different ways. Both ways have a similar outcome which is generating positive cashflow into your own pocket.
Now the first way to generate this income is to invest some of your time. There is this fallacy around that by creating content on YouTube or writing blogs you can create easily passive income. I see it more like investing your time now to get eventually paid later. Here you are trading your time which you could use to watch TV or spend time with friends but instead you are creating content for other people. This content can get paid in the future; hence you are trading your time versus a potential future reward. And yes, this future reward can be earned while sleeping but only because you already put the work in before. Some of these examples I will present further down this article. The most important thing to keep in mind while doing this method is that you should probably choose something that you could do anyways in your free time, something like a hobby so to speak. That way you don’t get the feeling of wasting your time and you are more likely to stick with it.
The second method involves far less effort. But where there is a gain there is also a price that has to be paid. One of the most important rules in life, whether it is engineering, finance, or relationships: nothing is for free. The price that has to be paid in this method is literally money. If you can invest your money right, then you could guarantee yourself some nice rewards down the line. The problem is that nobody will give you easily free money, that is why a good chunk of money is needed to make decent returns, but this depends on what you aim is. Some good examples will be introduced later on. In this method it is important to always think about the risk- reward ratio. There is a common strategy to only invest what you can afford to lose, especially in the riskier assets. But now let’s get into some specific examples.
Method 1: Examples
Lets start with the obvious once. Become a content creator, preferably on Youtube, Twitch or TikTok. I think this example is very well known and is being suggested to death by every finance YouTuber or Blog. Well, I have to declare myself guilty of doing that myself. I spare you with the details, but in my opinion this is not a great way anymore because this niece is very saturated. In my opinion it is very hard to come up with very original content but if creating content on these platforms is something that you are passionate about, give it at least a try. You will never know, maybe you can be the next Internet sensation.
While the next example is related to the first one in some ways, I do think it is kind of different. Becoming an affiliate marketer can be done without being a big influencer. The problem with this is that you will need the reach to get to the people to buy the stuff that you want to get a commission on. But what about all these Internet courses that promise you to teach the secrets of that and make you rich you might ask. I would say: Forget about them! These are literally scams to make money of you and if these courses are free don’t forget what I mentioned in the beginning! Nothing is for free, so if the course does not cost anything, you are the product! But I am shifting into another direction here. To close this example: Yes, it is very much possible to be a good affiliate marketer without being an influencer, but it will make it much easier.
The third and final example for the first method is to create an online shop with a product idea or even an own brand. This is something that I always wanted to try out but never had the time to really invest into it. The idea is simple, build up a system where you can use the print on demand features by several service providers like pinterest. Then you could start selling your stuff on Amazon or Etsy by paying a small commission. This works very good with some all-day products like cups or T-Shirts. If you are very talented in artworks you can even create your own brand or directly sell your art without having such a shop. Either way you would make money for a one time work and will be able to scale your income up if you are successful.
Method 2: Examples
Lets continue with the second method. We remember, this is the method where we use our hard earned money and try to invest it so that the money can work for us. So what are our options? I like to differentiate between different price classes, so lets begin with the lower price class.
In this price class we can find the traditional and well known assets. Something like a S&P 500 ETF with low fees. Just by putting in money into it in a period amount of time you would be able to grow your wealth. There is a statistic that says that since the existence of this Index the index never went negative over any 20 year period. This means that this way is probably a passive income for the future but thanks to compound interest you could make your money work for you. Also I want to mention that this is not limited to people with small amount of money but it is a way to start of.
Another way in the lower price class would be crypto. Here we have several different ways of earning passive income. One of them I covered in one of my previous articles and this would be liquidity pool farming. While I really like the idea of the amazing yields people are able to get it is always very important to mention that the riskier the project is the higher is the yield. That means that if you want a 100% return on your investment there is a good chance that you might lose everything. A similar but in my opinion more safe way is the lending feature on many exchanges. Here, you have also the option of whether you want to lend it over a centralized or decentralized exchange. Both have their pros and cons but the principle is more or less the same. Give away your funds for a certain amount of time and get more of it later. In my opinion it is a good way to earn passive income if you just hold your asset and want to earn some additional rewards. While I know that staking is something completely different on the technical level, the result could be considered the same on the cash flow level, that is why I will not go into further detail for this one but just mention that this is also a very valid method if you are believing in the blockchain.
Last but not least, the holy grail of the holy grail: Real Estate! Who doesn’t want to have several houses or an appartement complex and live of other people’s rent. While in recent times this market was little bit crazy I must admit that it is still everyone’s dream, or at least it is mine. So why do I say dream? Well, because I would consider this an example reserved for people that are in the upper price class. To be able to buy a house and rent it out, you need to have a solid amount of money to be able to invest. But there is a small loop hole which is REIT. This stands for Real Estate Investment Trust and can be considered a company that pays you dividends while you are holding their shares. These shares are like very small properties and the rent can be considered a very small rent. With the money of the share holders these companies are buying Real Estate and Renting it out. A portion of the rent that they are earning is getting paid to the shareholders as dividends.
onclusion
To close this article, I wanted to mention that there are probably way more ways of earning this dream of a passive income. Just know that there is no easy way to wealth and everything in life that is worth having needs to be earned. With that being said, I really look forward to see what other ways of passive income you have in mind and whether you could inspire other people to new ideas!
Published by ga38jem on
LeoFinance|read.cash
On 15th December 2021
Is Bitcoin Digital Property ?
It seems like the downtrend in the crypto market cooled all the hype around cryptocurrencies down a bit. During this time, I like to reflect why we started investing into this amazing space and why I am certain that it will survive any future economic crash. In this article I want to talk about Bitcoin once again. I want to lay out the different use cases of it and how people could interpret it as. With this being said, lets get started.
Store of Value
The most known use case of Bitcoin is its purpose of storing value. This is one of the biggest arguments towards bitcoin in recent times. With growing inflation and at the same time very low interest rates this means that people are craving something to put their money in so that it can obtain its value. Over the history there were a lot of things that humanity tried to store their value in. Most of the time it was valuable resources like gold, oil or copper because they were considered finite and would run out at some point. The funny thing is that a finite resource as we define it, does not exist so far in the history of humanity. History suggests that whenever the demand for something rises, the production of this good or resource also rises. So far it is a fallacy to believe that the higher a production of a good the less resources there is left on the world. In fact, pretty much the opposite is the case. Whenever more oil was needed, somehow more oil was produced.
The more humans the are on earth the more resources are being used, but somehow the supply also increased over the year. There was also this famous bet a time, where one very famous economists bet another one for 10k to name one resource that would be produced less 10 years from the beginning of the bet. The other person named nickel and other precious metals as he was sure that they will run out. So what happened? You guested it! The production increased and the supply increased. So what are we missing here? That means that humans are the resource. This sounds a little bit crazy but hear me out for a second. It is very obvious that humas are a race that is very technology driven. With the technology getting better, humans are getting better of gathering those “scarce resources” more efficient. This means that there are more resources available. The only finite element here is the human time on earth which makes the human basically the resource because it is necessary to have humans to invent and develop new technologies.
Now that I outlined a little bit the whole resource theory and that we understand that these “scarce resources” are not the perfect store of value, we can now look at Bitcoin. Bitcoin has this amazing perk that it is hard coded to a maximum amount of 21 million. This means that it is not changeable and makes it the second finite element on planet earth so far. With it being a real store of value people can get the incentive to store their money in it and with this incentive they are able to buy the future cheaper.
Digital Property
Another use case is very much linked with the first one. It is Bitcoin as Digital Property. Now there is a good example to describe it. If you want to store your money into thigs you can select a various of option. There is just holding it and loosing constantly value. The next one would be buying stocks and trying to get a good return on your money. The last one would be buying a house which is a stable investment but in recent times also varying in values. The thing with housing is that it is an analog property. You can rent it out or you can sell it or you can even take loans on it, but you can not move it around or sell a portion of it. This is what makes Bitcoin a digital property! It has the same attributes of the house in regard to the economic perspective. You can do all of the things with it but you can also have it in different places and you can divide it in many more pieces.
This is just the next step in the evolution. There is this great example of maps. A few years ago there were only analog maps. They were costing a lot of money and were not changeable. You had a book full of maps and you could only read it. With the maps getting digital, you know can see how traffic is, it is much easier and cheaper to transport and it brings a lot more functunality with it. This technological development can be transferred towards the property sector with Bitcoin. While I am aware that the comparison between house and BTC is a little vague, you can see the similarities in the economic perspective. And the most beautiful thing about that is, that if people will move their money towards BTC, the stuff like housing or oil will get cheaper and more affordable for people again.
Personal Sovereignty
The last purpose of Bitcoin I want to cover in this article is the fact that people could gain back their personal sovereignty. Bitcoin is a thing that is not easily controlled by the government. It will be not easy for the government to collect taxes without offering a good service of some kind. There will be less incentive to finance violent and unnecessary actions by the government. BTC has a policy of defense. It is by a large margin more difficult and more expensive to be offensive and steal stuff because the network is very secure. It will be very difficult in a society run by hard money for governments to make anything that people do not want. Government’s impositions that are not very economically productive are unlikely to survive for very long. That is because there would be very little incentive to continue financing them! This would basically give every citizen back the power which a true democracy should be all about: That the people living in this society have the control of what happens in this society.
Conclusion
To summarize this article, I hope that my points were understandable as I found it a little bit hard to formulate every thought that I had in a short manner. All in all, I think that BTC is a very big chance for humanity to make the next step in evolution. I think that with Bitcoin we will be able to progress faster and maybe even discover new forms of governments as we move further. In my opinion there should be always one goal and that is to make the human’s and society life better. Thank you for reading!
Published by ga38jem on
LeoFinance|Steemit|read.cash
On 11th December 2021
Things I Wish I Knew Sooner - Crypto Edition
Thinking back to the time when I first started investing into crypto made me want to write an article about all the stuff that I wish I knew back then when I started. This might have saved me some sleepless nights and a lot of bad mood days. That is why in this article I will talk about stuff that I learned so far and that you can adopt in your crypto experience as well.
Stuff That I Wish I Knew Before
Like many of you, I myself, got into crypto because of Bitcoin. In the beginning I started carefully in investing just in Bitcoin and tried to ignore all the other coins since I did not understand them fully and had no trust in them at all. Oh boy was I wrong. While many BTC maximalists think that BTC is the true and only, I have the opinion that a future with multiple crypto projects is the way to go. That is why I started to look into projects like Cosmos who are trying to connect all of the different blockchains together and try to make them interoperable. Of course there is also the big player like Ethereum which already proofed itself by being the biggest used blockchain. And lets not forget blockchains like Hive where you can play amazing P2E games like Splinterlands or earn blogging rewards!
Another important point I wish I knew back then, is the risk vs reward ratio that you can take. When I first started I tried to invest very carefully and only buy the dips. That left me very unhappy because I was checking the market every hour just to time it perfectly. After a while I started dumping more money into the market but unfortunately for me, all at once. After that I discovered for me the Dollar cost Average method. With this method I set up a routine on which I invest and forget about the market movement. Of course, I am trying to benefit from the big crashes like the recent one, but in general I have a weekly amount that I am spending regularly. It is important for me to stress that everybody should only invest money that he or she is willing and able to afford to lose.
Speaking of investing. The more time I spent in the market and researching projects, the more I understood one of the most basic problems in crypto currency. The famous trilemma is a trade off of three major components in the crypto space: security, scalability and decentralization. While a lot of projects manage to be extraordinarily good in two of the three parameters, the third one always lacks. That is why no project is perfect and needs to have further research before investing more into them. While investing in these projects, I wish I knew in the beginning how to evaluate the projects. It took me a lot of time to understand the basic factors like market capitalization, the vesting schedule and the overall supply and demand. The perfect example is Ethereum. Because it has so many applications and because it is used to pay fees on the network the demand for Ethereum is very high. Additionally, the supply was cut so that Ethereum can be on some days a deflationary asset and that is why its price was rising in the past few months.
One of the most important points I want to mention are the scams. In recent times the scams became more and even a lot of influencing personalities got into promoting scam projects. This should be a warning for all investors because it means that you should always do your research on the developing team and the core parameters. I wrote an article about how to discover such scams in the following ARTICLE. https://read.cash/@ga38jem/how-to-avoid-the-next-scam-9e1b6e0a
Last but not least I wanted to talk about all the other ways of earning in the crypto space. In the beginning I was just holding the Bitcoin as an asset and was happy with myself. Thinking back, I wish I could slap myself and get into DeFi and some P2E games earlier. With some DeFi processes like liquidity pools or the lending options it is extremely beneficial to earn a good amount of passive income. Of course, there is always risk of losing money because the asset is depreciating but this risk is in every asset. Furthermore, there are a lot of fun opportunities to earn money just by playing games. One of these games is Splinterlands and while I was very skeptical at first, I am really enjoying playing this game and am able to earn some amount as additional rewards. Here I also want to stress that this only works if you don’t expect to become a millionaire overnight. To set up and find the correct processes is a matter of time and trial and error. That is why I recommend to never give up even if something frustrating happened.
Conclusion
To summarize this article, I wanted to say that the crypto space thought me already some lessons that are helping me every day. And yes, some of these lessons were hard but they are currently paying off and I hope that this journey will continue to go upwards. I really hope that maybe I could inspire some people to stick in the crypto market and maybe even reach some new people to try it out. Speaking for myself this journey is a lot of fun and very rewarding from a certain point on!
Published by ga38jem on
LeoFinance|Steemit|read.cash
On 9th December 2021
Splinterlands - Chaos Legion - Thoughts & Purchases!
It is finally here! The long awaited Chaos Legion Expansion. In this article I want to talk about what I managed to pick up on the market. Furthermore, I managed to fight some battles already and wanted to share with you want the most common builds seem to be. While I know the strategies will develop over time, we can take a look what strategies are very common in the lower division. On this topic I will make some separate articles over the course of the next week. Last but not least I want to round this article up with some thoughts about the new expansion!
What I Picked Up
That sounds like a story from a night out, but it is actually about the new Splinterlands Expansion. I know this pun was bad, but I needed a introduction. Right when the cards hit the market I was sourcing the market a little to snipe some nice deals. Looking back it was only partially successful but maybe it will pay off over the next months. After the initial overwhelmed reaction on the market, I decided to focus on the summoners. Because I am thinking that magic is still a very effective way to play this game, especially in the lower leagues I focused first on the Earth summoner Obsidian. Currently going for about 18 dollars a card I was able to pick up 5 of them for an average price of 10 dollars per card. I think that this card will be very well used in the future, that’s why I already converted this card to a level 2.
Staying at the Earth Splinter for a little bit longer, I tried to built a team beforehand. That is why I also purchased a level 2 Goblin Psychic in expectation of using him as healer and powerful damage dealer card. Additionally to him, I picked up a Level 2 Mycelic Slipspawn to act as a taunt so that all of my other magic cards can deal enough damage to the opponent. I must admit that this strategy only worked partially so far, because people already found a pretty good counter against this comp. But this is the beauty of this game in my opinion. If there would be just one strategy in this game, everybody would buy these cards and all of the others would not be used which would be a shame.
Because I was enjoying playing the Life Splinter recently, I also focused on the new Life Summoner General Sloan. Him, I also managed to pick up 5 cards for the average price of about 8 dollars a piece. In my opinion a very nice return. Especially with the new range monsters this summoner can make the difference in tight games. Additionally to this summoner, I also picked up a Prismologist. With its blast ability it will deal an additional 2 damage to the next minion which I find very impressive. In the games that I already played with this card it managed to secure me some wins. Unfortunately it eats up a lot of mana, that’s why this card is only usable in high cost mana battles.
Complementing these purchases, I managed to pick up some of the new Fire Summoner and one of the Death Summoner. This was maybe a mistake because I was not expecting that the dev team will add all of these summoners to the starter cards. That is why it was very unnecessary to just buy one of these summoners each. But I will keep holding on to them because they might appreciate in value over time. Furthermore, I think it is sad that they removed some of the older Expansion cards, because it really messed up some of my strategy. But I guess I just have to buy these cards now to be able to use them in the battles.
Common Played Comps
Moving on I wanted to also share with you what I experienced so far and what teams the people are apparently playing. Firstly, I have to say that I expected a lot more Earth-Obsidian Teams but it seems like people are already shifting towards other teams because it looks like people found several ways to counter the Earth-Magic Combination. The first possibility is by playing a Water Team with Bortus as the summoner. This takes away any Magic advantage that you might get by using Obsidian. Furthermore, those people play very health-heavy cards in combination with some magic cards. This way they make sure they deal enough damage while still having their big tanks in front. Another, still very common build is an Earth Build with Failed Summoner and Mustang Unicorn. I guess this is just the number one counter against any magic Team.
Another very common build that I saw so far is the Death-Life-Leech Build. With Life Sapper and Venari Bonesmith these cards can get extremely healthy over the course of a battle. With Cursed Windeku as tank which also has Taunt enough time, and damage dealing is guaranteed. I was very surprised when I first encountered this build but it seems like a very good alternative to all the other builds.
Last but not least, there is the classic Fire Built. I think for Fire not much changed with this expantion. The new summoner just highlights the already existing strengths of Fire which is Damage Dealing with Melee. That is why this kind of build everybody knows and does not need much explanation. Like I mentioned in the intro, I will make more detailed articles over the course of the next weeks and will explain these teams in more detail and what I think people can play to counter them.
Conclusion
To sum it all up, I really like the new expansion. I am extremely overwhelmed by all of these new information and new cards to explore. Furthermore, I really like the artwork, I think that whoever is responsible for that deserved a raise (if anybody of the developers or their executives is reading that :D). I am really looking forward to phase 3 of the pack sale, because their I can finally join the pack openings! I think that this will be a very good time to stock up your decks with cards that you think are doing super well because this is when most of the cards will join the game. And by the laws of economy: if the supply gets higher, the prices have to go lower.
With that being said, I really hope I could give you a good overview of my experience of the first day of Chaos Legion and I hope that I have many to go!
If you haven’t joined this game yet, feel free to join it with my affiliate link:
https://splinterlands.com?ref=ga38jem
Published by ga38jem on
LeoFinance|Steemit|read.cash
On 8th December 2021
BTC Backed Loans? - Crypto Future
In today’s article I want to talk about the further adoption of BTC and the recent news that banks might soon allow Bitcoin backed loans. I want to discuss what this means for the future development and how this could affect the crypto market. Furthermore, I want to talk about some potential concerns that should not be forgotten.
BTC Backed Loans
With some of the big banks and institutional players of the world, like Goldman Sachs, considering a Bitcoin backed loan, the future of crypto might be very bright. With the recent adoption, this news is just the next step towards the arrival of crypto in the main stream. At the moment there are a lot of pro arguments towards these Bitcoin-Backed Loans. Firstly, BTC is currently seen as a very strong inflation hedge. This means that the big banks are only waiting to offer these kind of assets for their richest of rich clients. Furthermore, it looks like Bitcoin is proving itself to be a very good alternative to the fiat currencies around the world as seen in El Savador. Bitcoin is able to be used as digital cash, especially with the help of the Lightning network. Other people, like Michael Saylor, CEO of Micro-Strategies, are seeing Bitcoin as digital property or digital energy. I will make a separate article about that in the near future, so stay tuned for that. All of these points are major pro arguments towards such an idea. Especially if the bank will be able to trade fiat money versus BTC.
Concerns
But with all of the great news, there might be also some concerns. The first one being, the most obvious one. Bitcoin is still in a phase where its price is very volatile. As seen by the recent “flash crash” the price of BTC can fall over 10% in just a few hours. This is caused by the second concern, the major over leverage that is happening in the whole crypto market. With drops like the recent one, it causes mass liquidation which causes the price to even fall further. This means that people might default on their loan very quickly and left with a lot of problems. This is why in my opinion this method has its pros and cons.
Conclusion & Current Situation
To pick a side, I would still think that the idea is a very good one. I would rather take a loan against BTC and pay less interest rate while BTC grows in value rather than just take a loan with high interest rates and see all the opportunity money flow into the monthly rates rather than into BTC. On the other hand, there must be a very good risk calculation before doing that.
To summarize the article, I also wanted to take a look at the future of the crypto market. I think a lot of people panicked in the recent days because of the flash crash. To calm the people down, this might have happened for several reasons. The most obvious ones are the uncertainty about the new COVID variant and even the recent labor numbers from the FED. A lot of people might take this as bad news. Furthermore, it is end of the year and a good opportunity to offset your tax losses by realizing some BTC losses. Another possibility might be a manipulation method that is used by big whales who are holding a decent amount of BTC. By selling a big amount of BTC they can drag the price down, forcing people to sell so they can buy the asset for a better price. This means that you should hold on to your asset and if you have the chance to buy even more. In my opinion this is just a small dent before it will going up because with the news we just talked about and a potential physical backed ETF the mass adoption of BTC is really not that far away from us.
Published by ga38jem on
LeoFinance|Steemit|read.cash
On 8th December 2021
How To Avoid The Next Scam
The longer people are in the crypto space the more scams and shit coins they are discovering. The same goes for me. With time I find more and more scams and I have to admit that I myself fell for some of them. But the more you look into it the more experienced people can get with these kind of “projects” and see whether they are scams or not. In this article I want to talk about some Scam or Shit Coin indicators that I am trying to look out for.
What is a Scam or Shit Coin?
Lets start of by defining what a Scam Coin or Shit Coin actually is. In my opinion it is a “get rich quick Scheme” that benefits its founders and nobody else. You could say it is a modern Ponzi Scheme so to speak. Most of the time it is based on an Altcoin. Altcoins are alternative coins to the already established coins like Bitcoin or Ethereum. Most of the time these Shit Coins are not even Coins but Tokens because they don run on an own blockchain but are built on one of the popular ones. Very often it is an easy pump and dump mechanism that brings a lot of people into the coin by using FOMO, followed by a quick dump where the main founders of this coin benefit. One of the latest examples for that was the “Squid Game Token”.
Core Indicators
So with that out of the way, what are some indicators to recognize such scams? It is important to notice that not every coin that is fulfilling some of these categories is a shit coin, but there is a very high chance of it being a scam. The first indicator, could always be the market cap. It is very easy to research. Just go on to coinmarketcap and you will see that this information is one of the most important ones. If the market cap is very low, it means that not a lot of money is invested in this coin. Now, some of you might say that newer projects might have a much lower market cap then the established ones and I agree on this point. But, if a project is really worth something the market cap will have around 100 million dollars of market cap to begin with because some early accredited investors might already invested into this project before the initial Coin offering.
Another important indicator is the community size. If the coin has a big market cap but no community it can either mean that there are just a few whales that are holding the majority of this token and just waiting to dump it to the clueless people. Or it could mean that there is some market manipulation going on some exchanges where not al lot of people are trading. Either way, a small community of a coin means also that the coin is not being used and that is why I would stay away from these kind of investments.
Going hand in hand with the previous two indicators is the third one. That is the listing on big and reputable exchanges like Coinbase or Kraken. Usually, these big exchanges are researching a coin before they are listing it on their exchange. This means that some of work already has been done for you. This means also that you probably already a little bit late to the game. But how is the saying? High Risk equals to high rewards, right? Anyhow, it is important to stress that even if the coin is listed on a big exchange it can still be a scam, so do your own research before investing in any kind of crypto project!
Whitepaper and Purpose
While you are doing your research, you might stumble upon a whitepaper. First of all, if a project does not have any kind of explanation of what this project is aiming to do, it can be immediately seen as a red flag! But even if there is a whitepaper, it is important to read it. Most of the time, if the whitepaper is too long or overly complicated you can assume the project is trying to hide something and there fore is a scam. Furthermore, if a whitepaper is not done carefully and has a lot of mistakes and inconsistencies it is also very bad. You have to keep in mind that a whitepaper should draw attention to the project and accumulate new investors. And to do so you should explain what your project is aiming to achieve in a short and illustrative manner. If the whitepaper does not do that you can assume that the person who is in charge just wants the quick buck.
Speaking about the people who are in charge. If the founder is not very enthusiastic and his interviews don’t seem to impress you, stay away from this project! If a person truly believes in his projects he will do anything in his power to make a good impression on you. Furthermore, you should look out for previous experience of the owner and the team. If you don’t find anything on LinkedIn or in the Internet at all it is also a red flag since their careers could be just made up. Additionally, if there are no people in charge listed and want to stay unrecognized it is immediately a red flag for me, for obvious reasons.
The last point I want to mention is the purpose of a project. If the purpose or Use case of a project is just to make an existing project better, it can be seen as a scam. If additionally to that, there is no roadmap which explains the further steps and goals, stay away from this token completely. Furthermore, the transparency of a project plays a big role. If the source code of the project is not open source, you could assume that something shady is going on since the normal procedure in the industry is to have everything transparent.
Conclusion
To finish up this article I want to mention that these are certainly not all indicators for scams and I want also to stress that not every projects that fulfills every one of those indicators is a scam. I just want to talk about my experience so far and wanted to share my opinion with you guys. I hope I could help some of you for your next research. If you have other indicators that you are looking out, let me know in the comments!
Published by ga38jem on
LeoFinance|Steemit|read.cash
On 5th December 2021
Splinterlands - Life Splinter Strategy
Recently I came across some articles about how the Life Splinter is the least favorite Splinter and how people find it very hard to finish the Life Daily Quest. I must admit that I was one of these people for a long time. But just recently I discovered a very effective way to make my life easier. This is what I want to show you in this article. Bear in mind though that I am very new to this game and that I am playing most of the time in the Bronze Leagues. That is why this article is for the newer players as well, but I am always open for feedback from any player, no matter the experience!
My Strategy
When I first started out, I never appreciated the value of a Taunt Tank. I was aware that it had advantages, but I thought to myself that they would come out in the late game of this game when people are playing in the Gold or Diamond Leagues. Oh boy was I wrong! The first element to this build is the Shieldbearer. He is a 8 mana cost card which has the Taunt ability. Additionally he has some decent attack and a lot of Hit Points. His main purpose is that he protects all of the minions in the back line so that they can deal the damage to the opponent or just fulfill their purpose in the own backline. Furthermore, his attack is pretty decent so that he can deal damage by himself.
The next two cards fulfill the same purpose and it was just with both of these cards played when my Life Game really accelerated. The cards are Divine Healer and Venari Crystalsmith. Both of these Cards have the Tank Heal ability. Now, why do you need both of these cards you might ask. Well, most of the times the enemy is doing between 5 and 7 damage per round, distributed over all of their monsters. With both of these cards I am guaranteed to restore 6 health on my tank that is taking these 5-7 damage. This means that this total 9 health might get reduced by one HP. Sometimes the opponent won’t even make it through the Shieldbearer with this strategy. This allows me to continuously deal damage to the opponent’s monsters without basically losing any of my own.
To finish this build of there are several possibilities. Either you choose some backline Snipers or Sneak ability monsters. I prefer to take the Silvershield Knight because he allows me to add an additional attack to the Shieldbearer. If the mana rules allowed it I add a Feral Spirit to the line up just to get through the opponent’s back line quicker. I would put the Knight into the second position just to make sure that you have something to come after your tank might die. But this should not happen very often.
Conclusion
A possible battle could be seen in the following link. Here, out team clearly won against another Life team who did not utilize the heal and taunt abilities of his splinter.
https://splinterlands.com?p=battle&id=sl_27b58aaf4d9c04fe1272be828357e076&ref=ga38jem
I hope I could give you some new advice and maybe even a new inspiration for another strategy! Like I mentioned before, I think that this strategy is more for the beginning levels of this game but maybe some higher level players can utilize the ideas that I introduced! 😊
If you haven’t joined this game yet, feel free to join it with my affiliate link:
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Published by ga38jem on
LeoFinance|Steemit|read.cash
On 5th December 2021
Is Bitcoin The Next Worldcurrency?
Over the past week I was reading some articles and watched a video about the possibility of Bitcoin being the next world currency. This motivated me to write an article how money developed over the years and what we should look out for in a currency. Furthermore, I will discuss whether Bitcoin can be this promised world currency or whether people should look out for other projects.
History of Money
Before humanity and the civilization had invented money, people just traded with their goods. They traded 10 eggs for a pig and 200 apples for a cow. The problem was that not everybody had a cow or did not want to have 200 apples but just one. To do this you would need to divide your cow into 200 pieces and pay with one. Obviously, the cow would lose its value by doing this and it would have been madness. This is how people came to money. It is essentially a store of value that everybody agrees on and makes trading easier.
In the first stages the value was saved in tokens like sea shells, beats or rare stones. They had the advantage of being dividable and people could easier adjust their prices. The only problem with that was that it worked within one small economy where these kind of tokens could not be easily produced. In history there is this example with the glass beats that an African economy used. During the time when only this African economy used these beats the economy was heathy and developing. The citizens and traders were producing goods and were trading it with the help of these beats which were a rare asset so to speak. When European traders discovered this economy, this economy was destroyed very quickly. So what happened? The Europeans had a way to produce these beats in a very cheap way. This means that those beats were worthless to the Europeans but they could trade those worthless beats against worthful goods from this economy. This way the Europeans took all of the good stuff from this economy and left them with a overfloated market of these beats which now became worthless. This is a good example how an issuer of a currency can benefit from such trades and by having the power and control over the monetary system.
Because humanity is an evolving species it was clear that these stores of value should not be that easy to produce. That is why people chose the precious metals as the next generation of money. Especially gold is a very good example because over the years many alchemists and chemistrists tried to reproduce the molecular structure of gold and always failed. That’s why gold was only obtainable by mining it which also means that it is finite to some degree which also means that it should keep its value to a certain degree. Furthermore, it was possible to divide this metal into smaller pieces. Both of these attributes, scarcity and divisibility, are attributes for a sound money. In a previous article of mine I already mentioned that during the era of gold the economies were evolving at its finest and humanity got the most influential inventions at that time.
With the World Wars and invention of printers the governments started to exchange the gold for paper money. In the beginning each paper was worth a certain amount of gold and it was pegged. This allowed the people to trade easier because gold was heavier than paper and therefore it was not possible to transport a lot of it at the same time. The only problem was that the governments soon began to unpeg the paper from the gold. That means that they started to print more money and hence devaluing the existing paper money. We are now in the fiat money state. There could be analogies drawn to the story about the beats economy where whoever controls the source of money will get all the worthful goods while everybody who gets the currency will be left destroyed and basically robbed. This could be compared to todays time. And while I don’t think that it is the only governments intention to make the people poorer it is certain a development that can be observed.
Current Transactions with Money
Like I mentioned before, we are now in the present and we have the fiat currency. Here, we have essentially two types of transaction types that we can use to pay for the wanted goods and services. First, there is the standard peer to peer transaction. This is our classical microtransaction where you just pay with cash or coins. It is easy and safe and does not involve any trust, because this money we are paying with is government issued. The second type is the digital transfer, for example with a credit card. Because this way is digital it involves a third party, like VISA. This third party is mainly there to provide the service and to make sure that nothing sketchy is going on. Generally speaking, everything digital can be multiplied. That means that this third-party company has to make sure that this money is not duplicated and so on. For this service the third-party company receives a commission fee. And while the second option involves us paying a little bit more it is the more used transaction because it is very convenient and it is possible to transfer money globally without being present. Like I mentioned before, the drawback is that it requires the third-party company.
Bitcoin as Savior
Now what if I tell you we could have something that combines the advantages of the previous two transactions and has additionally attributes of a sound money system. Yes, I am talking about Bitcoin. The advantages a very clearly. Using Bitcoin, it is possible to operate globally without a third party system because the network consisting of the miners are securing it and providing the necessary trust. Without going into much detail, to validate a transaction the Proof of Work consensus mechanisms is used. In another article of mine I already explained how this mechanism works. It incentives the miners to validate only valid transaction because if the whole network would become corrupt BTC would immediately become worthless. Furthermore, it is easy dividable and there is a hard maximum amount of 21 million which makes it the perfect example of a sound money system.
Bitcoin as World Currency?
While the adoption currently is not very high it is accelerating. And yes the price is volatile bus as more people and institutions adopt it, it should get more stable. There are a few concerns out there that should be addressed though. Bitcoin is considered as a very slow blockchain. It can only process around seven transactions per second. This is wide below the current necessary rate. This is why a lot of other crypto projects like Solana are trying to solve this scalability problem. The only problem with these kind of projects is that they are not decentralized. In the worst case scenario these projects can be seen as companies who hide behind a crypto currency and are controlling the supply of this currency. This is not the case for BTC. Furthermore, there is a scalability solution for BTC that is already in use. I am talking here about the Lightning network which is also in use in El Savador.
Generally speaking, El Savador can be taken as an example of how BTC could get adopted more. It will be very interesting to see how the economy in El Savador will change and how the people there will accept it after time. It is too early to tell but it looks like people are getting more used to it.
I think Bitcoin has the potential of becoming a part of the world’s currency system. And while I don’t think it will happen any time soon, I do think that Bitcoin is an inevitable asset which can not be ignored any longer. I also think that other crypto projects will be essential in the future but for them to survive they have to bring a big ecosystem and a lot of utilities. A good example for that is Ethereum. I think that the world is currently on the edge to the next era and it is very exciting to be part of this!
Thank you for reading!
Published by ga38jem on
LeoFinance|Steemit|read.cash
On 4th December 2021
Splinterlands - Water-Magic Counter For Beginners
In this article I want to show you what my favorite counter against the Water Magic Comp is. Because I am in the lower Leagues in the range from Bronze 2 to Silver 3 and because I just started out with this game I think that a lot of people wont be interested and probably already know this counter. But for those people like me who just started out and just can’t find a way to beat those Water Magic teams consistently here is your solution! :)
The Problem
In my divisions I often encounter teams that are build as follows. They select the water Summoner Alric Stormbringer which gives every Monster on his team a +1 Mana boost. Additionally to that they select as many magic Monsters as possible. The real deal breaker is when they also have the Venari Wavesmith on their team. This means that every monster gets an additional 2 armor and is pretty much undestroyable in the first round. In my opinion this is a very strong combo, especially in the beginning stages of the game. Essentially, this is a standard comb that you can encounter. It has a very solid tank with 8 health and 5 magic monsters which are all protected by additional armor.
The Counter
So, how do we battle this kind of enemy. Well, I learned very quickly that if an opponent played a lot Water-Splinter in his recent battles, the chance is big that he will do it again since selecting this team in the lower leagues very often secures the win. This means that whenever I see my opponent playing a lot of Water I automatically pick my counter. And before I get into my strategy, I want to acknowledge that there are several ways of countering this combination and it is also probably not the best build for the lower leagues, but in my experience so far I always struggled to win against these kinds of enemies.
My counter includes picking the Earth Splinter and with that the summoner Lyanna Natura which gives each of your monsters a plus one Health boost. This is very important in my opinion because it determines how much damage you can make in the first round of the battle. Furthermore, there are two very essential elements to this build. The first and probably most important one is the Unicorn Mustang. With its void ability and its 10 health it basically can take 10 Magic hits which would result in at least two rounds of battle when we look at the opponents team from above. The second essential part is the Failed Summoner. In the beginning stages of my playtime I often overlooked this monster because it had no attack and I considered it worthless at this stage of the game. But then I learned about its ability: Magic Reflect. This opened my eyes to this beast of a card! What this ability essentially does is to reflect the magic damage that it took and deal a portion of it back to the firing enemy. And because this is considered Magic damage as well it ignores the armor of the enemies.
Additionally, due to the extra one health it will take 3 hits and not just two which results in one extra reflect and therefore one extra damage! This means that with a little bit of luck we can take out both of the fairies out because they only have one health each. After this happens the Mustang will only have to take Magic damage from 3 other Magic Monsters which will be slowly assassinated by both of my sneak attackers. Here, I want to point out the Goblin Sorcerer which is basically the third ingredient to choose for this team. Because he is also a magic card he will ignore the armor of the opponents monsters which is basically the death sentence for the opponent’s build. It will slowly but surely eliminate every other magic monster left while the Unicorn Mustang brushes off every single Magic Attack.
Conclusion
The result of this battle is obvious now that I explained my strategy behind it. The Earth Splinter wins and the battle can be seen in the following link:
https://splinterlands.com?p=battle&id=sl_fc1173d3fff840dda07c5abc66593184&ref=ga38jem
With this being said, I hope I didn’t bore any experienced player here with and really hope that I could help any new players around! If you know any better strategy against this Water Magic Combination I am always eager to hear your tips and tricks!
If you haven’t joined this game yet, feel free to join it with my affiliate link:
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Published by ga38jem on
LeoFinance|Steemit|read.cash
On 2nd December 2021
True Winners Get Back Up
This article will probably be a little bit different to my other ones. It will still cover the Finance/ Investing/ Crypto Sector. But this time from a slightly different angle and can be also applied on other sectors of life. This time I want to talk about the psychology and how to behave during losses. I will divide this article in a few parts. The beginning will cover the state of the loss and how it feels like followed by the part what people should do about it. With this being said, keep in mind that I am far away of being a psychologist or a finance expert so everything that I am saying is purely out of my own experience.
The Feeling of Loss
I am very certain that everybody already felt this feeling. Whether it has been a failed test, a failed interview for a job or just a lost sports game or even a stock or crypto that is not performing the way you imagined. The feeling of losing or failing can be very down pulling. For me it is this feeling that makes you numb and puts you basically down to earth. Self-doubt and emptiness are going through the mind and you wonder why you failed.
For me there are a few phases which I go through when I am feeling this way. I think these phases are very well known but I feel like I should still mention them. The first one is always Denial. In this phase you can not believe what you are seeing and try to change the outcome. In soccer games it is bargaining with the referee and in the markets it is reloading the screen because you just can not believe it. The second stage is anger. Very commonly people are starting to get angry, whether it is at his own performance or at a third party. I always tent to search for the mistakes in my own actions but I often catch myself asking whether the third party could have done something better or different. After this anger and analysis phase, I tend to be often very sad. This is called the stage of depression. Depending on the case and the person this stage can take a long time. As for me it is also very different but most of the time it is at the longer spectrum. After this phase is done the phase of acceptance comes in. This is the most important stage because this is where you set yourself up for success or failure.
Stand Up Again
I like to say that everybody should stand up again. It is a very common thing for people to just stay on the ground and never recover from a Loss or a Failure. This should not be the case. True winners are always getting up and are stronger now because trough this failure they gained experience. If people are hesitating to continue doing something it is also very bad because if you don’t shoot for something you will always miss and never achieve the goal.
With this being said, translated onto the finance sector: If I chose a stock a crypto project thar turned out to be a scam, I like to reevaluate my actions in the last stage of Acceptance. I always write down, what I think went wrong and how I felt. One example would be: I felt FOMO and this was the reason buying a scam coin. This is a very common mistake and I think almost everybody did this mistake. I think that everybody is allowed to do this mistake. With this in mind, this mistake should not be repeated multiple times afterwards. Furthermore, I like to make myself a plan for my upcoming events or projects that I am interested in and include my now newly gained experience into these next projects. Am I feeling the same FOMO as before? Am I sure I checked the indicators correctly this time? All of these new questions should always be evaluated once you jump into the next projects.
Conclusion
To conclude this article, I want to say that I am writing this after experiencing one of the mentioned losses. I must say that this feeling I described in the first section is not nice and I really don’t wish anybody to feel this way. Unfortunately, humans are not perfect and tend to make mistakes of any kind. But this is why I am saying that, I will try to not make the same mistake again and learn from this past experience. It makes us more certain in the things that we are doing. To close this article I really want to repeat myself: “True Winners Always Get Up Again”.
Published by ga38jem on
LeoFinance|Steemit|read.cash
On 1st December 2021
Splinterlands - Season 3 Rewards & Chaos Legion Strategy
As the next season ends in Splinterlands, I want to give an update about how my account is doing and what rewards I managed to get. Furthermore, I will talk about the progress during this season and what my plans are for the upcoming weeks and the Chaos Legion Release. All in all, I must say that my third season in Splinterlands had again its ups and downs but more on that in the article!
Season 3 Progress & Season Rewards
My Season started of very slowly. At the beginning of the season, I still had the 1000 CP that were delegated to me and a couple CP from my reward cards. I managed to promote myself pretty quickly into Bronze 2 so that I could earn some DEC battle rewards. I find this very important because without these rewards people can lose motivation rather quickly. I started grinding every day and accumulating some nice amount of DEC. By the end of the season, I managed to have around 220 DEC, which is not much by any means but for just the third season I think this is a amount that is respectable.
During this season my highest amount of rating points was around 1200 so I would have qualified for Silver 3, which would have given me more reward chests by the end of the season. Unfortunately, I was not able to rent any cards which made me stay in Bronze 3 territory. Along side the rewards which I will talk about a little later I managed to pick up two epic reward cards from by daily Quests which kept my motivation very high! It also gave me more opportunities to play different strategies. One of my favorite ones was to play Djinn Chawala because of her Thorns ability. Along side with the Lava Launcher this was a win in the majority of the battles. Furthermore, I discovered some counter strategies against Water & Magic which I think is very important in the early Bronze Leagues because a lot of people are playing this combo.
Like I mentioned before, I finished this season again in Bronze 2. I was very looking forward towards the rewards because of my good luck during the season. I was somehow hoping for a legendary. Looking back, very foolish from me because the disappointment was big! After revealing the first chest, I was very happy about the reward card. Even though I already have this card this means that my CP can grow and I could make progress towards the next League. But after this it all went downhill. Unfortunately, I got two Legendary Potions and a total of 25 credits. While this is a disappointing result I should not cry too much about it because the one reward card is better than none and I hope to use the Potions to open some Chaos Legion Packs.
Plan For Upcoming Weeks and Goals
Speaking of the Chaos Legion Packs. These are supposed to arrive on the 8th of December. I am very looking forward to it. In my opinion Phase 2 of the Pack distribution will be done very quickly and Phase 3 will arrive within few hours. In this Phase 3 the Packs will cost only 4$ worth of Credits, DEC or SPS and players are not required to own any Vouchers. Because I am a relatively new player and my SPS Airdrop is not that high, I was not able to obtain any vouchers. This means that I have to rely on Phase 3. Currently I am hoping to get 200$ worth of packs, that would mean 50 packs. Depending on how the sale will go I might stock up a bit but generally speaking investing 200$ should be alright. For the packs I am planning to open at least 10, maybe 15 for myself and use up all of the potions that I was able to accumulate. In this pack opening I am hoping to get enough CP to comfortably stay in Bronze 2. For the rest of the packs I am planning to hold them for a bit so that I can sell them once the demand for packs rises more. I think this is a very common strategy and we will see what It does to the pack value.
I am planning to rent out every card that I do not need and that will not put me under 1000 CP. This way I am hoping to generate some additional DEC to purchase a few more cards. With this strategy I am planning to work myself up to 5000 CP. When I arrive at this stage, I will do the same but with 5000 CP as the ground. In my opinion this is a slow but steady strategy which involves playing the game and involving myself into the community. I think that this is the way the developers meant the game to be played. If you have some better strategies, please let me know in the comments because I am really open for any advice!
Conclusion
To summarize my article, I can say that I am really enjoying playing this game. While my win rate is now slightly above 50 % I find myself learning more and more about this amazing game. I really hope that it stays that way and that I will be able to achieve my goals as quickly as possible. While I can see the earning potential in this game, I currently just try to enjoy the feeling that I get discovering new strategies and ways of playing this game. Like I mentioned before, I am really happy to read about any tips or strategies from you guys!
If you haven’t joined this game yet, feel free to join it with my affiliate link:
https://splinterlands.com?ref=ga38jem
Published by ga38jem on
LeoFinance|Steemit|read.cash
On 30th November 2021
Cardano Drop - Reasons & Outlook
With the recent crypto dip, a lot of coins dumped. Some more than others. One coin that got hit very hard was Cardano. In this article we will talk about why ADA was hit so hard and whether it is understandable. Furthermore, we will take a look at the future of this project.
Crypto Crash & ADA Crash
A few days ago the crypto market saw another dip. The reason for that was the news that India is set to ban cryptocurrencies. It is important to notice that this ban is supposed to affect retail investors and that institutions are still being allowed to hold crypto. As far as I understood it, this bill has yet to pass and is not in it formalized form yet (at the time of writing). Furthermore, it seems like it will not be an immediate ban, but one that slowly comes into play. Regardless the details of this new law, the market reacted very bearish and some coins saw double digits drops.
One coin that was hit very hard was Cardano. ADA dropped to as low as 1.4 $ and did not seem to recover as well as the other coins. A reason for that could be the announcement by E-Toro of delisting the ADA coin for all US-Users in the foreseeable future and a full removal by the end of the first quarter of 2022. The reason for this action is an “evolving regulatory environment” as described by E-Toro. With this being said, it is not specified which exact US regulation ADA is supposed to violate. It could be speculated that the SEC might classify ADA as a security, which should not be the case because it can pass the “Howey Test” (a test with which the SEC determines whether an asset is a security or not). Another possible reason could be the distribution of ADA. Given the fact that the founder of Cardano is holding a very large portion of it could be seen as a red flag. But this should mean that a Coin like Doge should be delisted as well since one wallet is holding more than 20% of the Doge circulating. With this being said, Doge is not delisted from this exchange.
Conclusion & Outlook
In my opinion there is really no reason to delist ADA with all the information that I have available. This also means that it is a good opportunity to get into ADA or refill your positions on ADA. I know that a lot of people do not like ADA for appropriate reasons, but I like to believe in this project and its big community. I really think that Cardano will have a place in the bright future of crypto and that it has the potential to grow even bigger. Maybe this will not happen in this current crypto cycle but I really like to believe that it will happen rather sooner than later!
Published by ga38jem on
LeoFinance|Steemit|read.cash
On 30th November 2021
Sources:
https://cointelegraph.com/news/etoro-to-delist-cardano-by-2022-for-us-users-due-to-regulatory-concerns
https://www.bloomberg.com/news/articles/2021-11-28/is-india-banning-cryptocurrency-how-can-it-do-that-quicktake
Liquidity Pools - My Experience
DeFi offers some amazing return if you put your crypto to work. On some decentralized exchanges you can see APYs of over 100% an sometimes even up to 500%. One of the way to utilize these DEXs is by using a Liquidity Pool. In this article I want to talk about Liquidity Pools, how they general work, what some risks it might involve and what my experience with these Liquidity Pools are.
How Do Liquidity Pools Work?
In general, Liquidity Pools (LP) allow users to trade certain coin pairs on decentralized exchanges. For each coin pair that people can swap there is a LP and people can select the coin pairs that they want to swap. These LPs can be found on sites like Uniswap or Pancakeswap. There, you can find pairs like BNB and CAKE. For simplicity reasons we will stick with the coin pair BNB-CAKE on the Binance Smart Chain but you could also use Ethereum and USDT as an example. So, if a user wants to swap his BNB into CAKE or vice versa, he just goes on one of these decentralized exchanges and swaps the amount he wants to swap. To do this he also needs to pay a small fee to make this transaction happen. This fee is given to the person who provides this LP.
So how can people like you and me make money with this? It is possible for us to provide the liquidity for these pools and earn the fee that people are using to swap the tokens! In order to provide liquidity to a pool it is necessary to provide the same worth amount of coins. That means that if you have a thousand dollars worth of BNB and zero dollars worth of CAKE, it wont work. To provide liquidity you have to have 500$ worth of BNB and 500$ worth of CAKE. After you provided the Coins to the pool, you get an LP Token. This is basically your receipt that you provided a certain amount of a token pair. Now, usually you would be able to get a certain percentage of the LP’s fees as reward because you are providing the liquidity. Additionally, you can now stake the LP Token in a farm and earn additional rewards.
Impermanent Loss And Rug Pulls
This sounds pretty amazing and can be utilized to make some great return. So where is the problem with this method and why is not everybody using it? Well with great rewards, comes great risk as Uncle Ben said to Spiderman once. There are a few risks that have to be kept in mind when using those tools. First, there is the overall risk of volatility of crypto. If you put in 1000$ in total into such a LP and the market crashes then you would lose some of your funds. But this would happen even if you would have just hold the coins.
The real risk comes with impermanent loss. In general, this happens when a price of one token changes drastically to the other token in the token pair LP. Without going into to much detail, the following graph explains impermanent loss very good. If the price of one token starts to rise the total liquidity value of your pool falls and if the price drops the value of your pool falls as well. That means that if one token would start going to the moon, you would have been better of just holding this token rather than providing it to the liquidity pool.
The other risk involved with such LPs, are rug pulls. In general, rug pulls can happen everywhere in the crypto space but if a coin goes to zero in a liquidity pool this would mean that you would lose automatically the other half of your legit coin as well. This is because your legit coin would be trading against the scam coin and if somebody has the decision between a coin that is worth zero or a legit coin he would rather choose the legit coin and so he would trade it trough your LP. That means that if you are not sure whether a coin is legit or not, do not provide liquidity towards it as it would harm you and the community. Of course, it is not always easy to recognize a scam but sometimes there are already some reddit posts or some other indicators that would suggest so.
Everybody who wants a more detailed explanation of the risks and how this whole process works in general, I recommend watching following video, as it describes things very accurate and easily:
https://www.youtube.com/watch?v=dVJzcFDo498
My Own Experience And Conclusion
I also tried the experience of a LP. I provided some of my funds in BNB and CAKE. That is why I chose this Token pair as example in this article. In the beginning I saw some really nice rewards and payouts. I was paid in CAKE and this CAKE I could then also stake on Pancakeswap which gave me additional rewards. After some time, I noticed that the BNB coin kept gaining in value, while the CAKE Token stayed or even lost in its value. This was the first time I experienced a minor Impermanent Loss. As this was just a experiment I also tried some other LPs with higher APYs. But after some time I started feeling anxious about some of these coins because they did not seem legit to me. One example was the Duelist King Coin (DKT). With this experience in mind I closed all my positions and turned everything into BTC as it is a more “safe” investment in the crypto space.
I know that it was maybe unwise of me to not take some risk but I really did not like the idea of losing money to a scam coin. With this being said, the BNB-CAKE Pool is a legit Pool and it offers around 40% APY so in the future I will think about reopening my position in this sector. All in all, I must say that for me it was maybe a bit too early but definitely worth an experience. It is very interesting to see how the DeFi space is developing and I can totally see myself going back to this method!
Published by ga38jem on
LeoFinance|Steemit|read.cash
On 29th November 2021
Sources:
https://finematics.com/impermanent-loss-explained/
https://www.gemini.com/cryptopedia/what-is-a-liquidity-pool-crypto-market-liquidity
Upcoming Bear Market - How To Prepare?
Sooner or later, we will be heading into a crypto bear market. There is even some debate whether we are approaching one right now. In this article we will talk about a possible crypto bear market, the different market cycles and most importantly want people should do to prepare for it.
Short-Term Cycle
Every single asset has its own market cycle of booms and busts. While each market cycle tends to vary in length and volatility, all of them follow a similar pattern. The fundamental reason why the price of an asset goes up and down in the short term has to do with human psychology. More specifically, emotions like fear and greed. This makes some markets more volatile than others. The reason why crypto currencies are so volatile is because nobody knows for sure what they actually worth. These emotions are the basics of most of the technical analysis trading methods. This concludes the chapter of a short-term cycle.
Long-Term Cycle
Besides the human emotions, there are also some macro factors at play which influence the asset market long term with higher impact. One of the most important macro market factor is called the debt cycle. This cycle is broken down into two phases. Short debt cycle which lasts around 7 years and ends in a recession and a long term debt cycle which last between 75 and 100 years. The latter ends in a depression. What this basically mean is: Borrowing money creates economic growth in the short erm. Individuals typically use borrowed money to buy more stuff. This creates a bull market for most assets classes. Eventually, this debt piles up and all these individuals need to start paying off some of that. This requires a reduction in spending which means that the individuals buy less stuff. This creates a bear market for most asset classes and a sustained long term downtrend in price. These debt cycles could be seen very clearly in indexes like the S&P 500. From 1997 to 2002, from 2002 till 2009, from 2009 to 2016 and from 2016 until now. These cycles can be also transferred to the crypto market as its behavior is very similar to the global stock market. This is because we live in a globalized world and everything is somehow connected. Why does this matter? Because we will probably see a bear market in crypto around the same type when we will see a bear market in the stock market.
Crypto Market Cycles
As everybody knows by know, the crypto market is following a four-year cycle that seems to be caused by the bitcoin halving which occurs about every four years. This halving reduces the BTC supply by 50% and this reduction coupled with a gradual increase in demand means BTC goes up in price. Because almost every other cryptocurrency is related to BTC, the whole crypto market responds in kind. After the top arrives it takes about one year to hit the bottom of the current cycle. A lot of people suggest that the start of the decline will start in early 2022 and the bottom will be reached in fall 2022.
There are two things that are worth pointing out. First, there is a chance that the current bull market will continue indefinitely into the future as all the cryptocurrency replace the current financial system. Very unlikely but worth mentioning. This event is called the crypto super cycle and like I said it is not very plausible because it is logistically not possible to achieve something like that in such a short period of time. The second point to mention is that crypto might continue its bull trend due to the endless money printing of the governments. Although it looks like this is coming to an end as inflation starts to rise, the bull market gets definitely extended because of that.
If the bull market can get extended this also means that the bear market can get extended as well. As mentioned earlier, the long-term debt cycle can last between 75 and 100 years. Assuming this model is correct a depression could be around the corner. This is because the last depression took place in the 1930s which was around 90 years ago. Some economists are suggesting that we are already in a depression due to the pandemic. Others suggest that the depression should have happened in 2008 but was just kicked down the road because the governments kept printing money. The problem is that if a depression is happening it could last as long as a decade. These are all hypothetical scenarios but should always be in accounted in planning in my opinion.
Regular Bear Market
So how could we prepare for these scenarios? In the following we will discuss three different scenarios. Regular bear market, the hyperinflation scenario and the depression scenario. Regarding the regular bear market, it is probably for the best to just HODL what you have and adding to the existing position on a regular basis. This is called Dollar-Cost-Averaging and is statistically the most successful method if you are planning long-term. If you want to ride the waves it is much harder to hit the actual bottom. This is why many people suggest to really wait for an uptrend to happen. In my position I would just use DCA because it is the less stressful method and like I said before the most successful.
Hyperinflation Scenario
This is not always the case with the other two Scenarios. In a hyperinflation bear market the crypto prices will probably go through the roof but their purchasing power will decrease. This sounds surprising because it is often said that assets like BTC or Gold would thrive under these conditions. Unfortunately, this is not always true. This could be explained by the Gresham’s Law which basically says that people tend to use the least valuable form of money that they have. This means that assets like gold and BTC would be hoarded and not used which would result in the following. Whenever somebody sells gold this would mean that they would nothing left to sell. The person that is buying this asset would therefore offer a much lower price than what this asset is really worth because the seller is desperate. This would mean that the value of this asset would be crushed.
What this whole scenario means is, that if we enter this scenario the last thing you want to do is to buy or to sell your crypto currencies based on their fiat value. Instead you will have to do your best to estimate how much value your cryptocurrencies have relative to other assets that you actually need or want, like housing, tools or food. By this point I assume all of us will have bigger concerns than cryptocurrency. Which is probably also the case with the third scenario.
Depression Scenario
If the next bear market ends up being part of a global depression, it will make for an amazing DCA opportunity, assuming you have the funds to spare. The problem with spotting depression is that you don’t know you are in one until much later. Typically, they start off like a regular recession, which means a big crash and lots of lost jobs. Although the crypto market has not gone trough a depression before history suggests that it wont hold up too well and the price could continue to drop for years. This is because people tend to buy two types of things during depressions: Things that they need to survive and things that secure safety. Cryptocurrency does not fall into either of these categories. Things that do fall into these categories are shelter, energy, clothing, food or entertainment. The only crypto currencies that might survive this, might be cryptos that provide a virtual world or the metaverse.
Conclusion
Writing this article and just the thought of a depression makes me worry a lot. On the other side, bear markets are a normal and necessary part of every asset development. This is of course easy to forget if you just joined the crypto or investing space after the pandemic started. I think it is important not to gamble with your money and only invest the funds that you absolutely can afford to lose. With that being said, lets hope that the upcoming bear market will not hit to hard and that the crypto space will continue to thrive like it did in the past year. Stay save and healthy!
Published by ga38jem on
Publish0x|LeoFinance|Steemit|read.cash
On 22nd November 2021
Sources:
https://www.cryptoglobe.com/latest/2020/05/wall-street-cheat-sheet-understanding-market-cycles/
https://www.lookintobitcoin.com/charts/stock-to-flow-model/
https://www.nasdaq.com/articles/bitcoins-correlation-to-markets-hits-a-record-in-2020-2021-02-13
https://www.greedyrates.ca/blog/are-we-in-a-bitcoin-supercycle/
https://money.howstuffworks.com/10-recession-proof-businesses.htm
https://www.finanzen.net/index/s&p_500
Crypto Adoption Gets Pushed!
In the past few weeks, a lot happened in the direction of crypto adoption. The following news just show that crypto is here to stay and it will take a lot of effort to make it go away, if that is ever anybody’s intention. In this article we will take a look at AMC’s latest announcement, Twitter’s Crypto Team, an interesting partnership between Brave and Solana and some more bullish crypto adoptions.
AMC and More Accept Crypto
Starting off with AMC where the CEO of AMC announced that customers can officially pay for entertainment online using BTC, ETH, Bitcoin Cash and Litecoin. It is important to notice that it is only possible using Paypal as the intermediary. In my opinion this kind of defeats the whole purpose of crypto payments. Furthermore, Doge and Shiba Inu are in the planning and here no intermediary is planned.
AMC is not the only company that started to accept crypto payments in recent months, and this has many wondering when big global players like Apple will follow the example of AMC. There have been speculations since May that Apple will accept crypto as a payment method after the company announced that it was looking for an alternative payment specialist with crypto experience. This speculation is at an all-time high after Apple CEO Tim Cook revealed that he personally holds some cryptocurrency.
Twitter’s Crypto Team
Moving on with some more great news. Apple is not the only tech giant who is looking for crypto talents these days. Twitter has announced the formation of a dedicated cryptocurrency team and is looking for people to fill its positions. This team is supposed to focus on the development of decentralized applications, marketplaces, community crypto funding and even digital identity. This intense crypto push has inspired other social media companies to follow along. Among the followers is Discord or rather was. So, what happened?
After a suggestion by the CEO to integrate cryptocurrency into the Discord App, some of its users had concerns about the money laundering happening with NFTs as well as the bad effects on the environment by the Proof-of-Work mechanism. In my opinion, these concerns are very little reasoned because there is very little evidence for money laundering in the NFT space. Furthermore, miners are seeking for the cheapest possible option to mine the crypto. One of the cheapest options right now is renewable energy which makes the mining greener than ever.
Brave & Solana
Speaking about crypto integrations, Brave has announced that it will be integrating Solana into its privacy focused browser. For those who don’t know, Brave is a fork of Google Chrome. Brave basically has everything that Chrome has except that it blocks all ads and trackers by default meaning you don’t have to install any buggy ad-blocker. Brave also has various crypto features built into the browser itself including a crypto wallet which will soon support the Solana Blockchain! This integration is scheduled to occur in the first half of 2022 and it will allow Brave’s users to access Solana DApps from within the Browser. This will help the adoption of Solana and its corresponding price growth. In exchange Solana will encourage developers to promote BAT on DApps built on Solana and on the Solana network in general.
Crypto Adoption Accelerates
With all these exciting developments, it should come as no surprise that crypto adoption continues to rise. So much so that even some cities are getting their own cryptocurrency. Miami was the first city to get its own cryptocurrency called Miami-Coin back in August. Now, New York City has its own Cryptocurrency called NYC Coin. In general, city coins are built on Bitcoin using stacks, which is a crypto project that essentially acts as a smart contract enabled layer 2 for Bitcoin. These city coins are created by the crypto community, and they offer a way for cities to get additional funding. For example, the city of Miami has raised over 20 million dollars from Miami Coin so far. So far NYC did not announce how they want to use their crypto profits, but I am sure they will use it correctly.
Conclusion
All in all, it will be very interesting to see how the last months of this bull market develop. Many people see March 2022 as the peak of the bull market and when we will enter a bear market. This could be a very good time to start buying in again. Nevertheless, it looks like crypto has reached a adoption level that is hard to beat and I can see it only getting bigger.
What do you think about these developments? Can we see some big companies adopting crypto payments soon?
Published by ga38jem on
Publish0x|LeoFinance|Steemit|read.cash
On 21st November 2021
Sources:
https://t3n.de/news/amc-entertainment-akzeptiert-1427506/
https://cointelegraph.com/news/twitter-crypto-the-dedicated-team-aimed-at-exploring-dapps-and-more
https://brave.com/solana-partnership/
https://cointelegraph.com/news/miami-will-hand-out-free-bitcoin-to-residents-from-profits-on-city-coin
Are We Already Living In The Metaverse?
In the past weeks the idea of a Metaverse was hyped extremely. A lot of people wrote articles and made videos about it. What it would mean for the future and which crypto coins to invest in to get the maximum amount of profit of the current rally. In this article I want to approach a different direction. I want to talk about what the Metaverse actually is from a more scientific point of view. With that being said, I am not a professional scientist nor am I an expert in the Metaverse space so I might be wrong in a few facts or assumptions.
What is the Metaverse?
With this out of the way let’s get started by understanding what the Metaverse actually is. Everyone is expecting the Metaverse to be a virtual place where people can meet up and do digital things. The closest idea to a Metaverse that everybody has is the movie “Ready Player One”. Essentially, a digital world where everything is possible, and everybody can do whatever they want. But what if the Metaverse is not a place? What if the Metaverse is a timestamp in the evolution of humanity? A moment in human history where “the singularity” takes place and the Artificial Intelligence that we are using gets smarter than the humans. I know it sounds like the next Terminator movie or something but stay with me here.
Over the past few years every aspect of our lives has become digitalized. Whether it is connecting with friends over Facebook or work that we can do from home with tools like Microsoft Teams. Everything develops in the digital direction. Another example would be Instagram where we create the perfect version of ourselves that would live on in the digital world when we would die. Even the assets we buy have become digital. NFTs are replacing art, Bitcoin is replacing gold and Bored Apes are the new Rolexes. This is because most of the people already are spending most of their times in the digital world and so the flexes have to be digital as well. That would lead us inevitably to a point where the digital self will be more important than the real-life self.
Just think about it: Since we discovered/ invented (however you want to look at this) the Internet, we are constantly developing and merging into the Metaverse. We started off with big PC which had potato graphics and we developed into a portable version of a computer (=smartphone). With smartphones we can do whatever we want on the Internet. While this is basically given in the modern world, about 15 years ago nobody would have expected this amount of progress. This means that we could argue about whether the Metaverse is already here or not.
This goes into one theory about the Kardashev scale. On this scale there are three civilizations. Right now, we are evolving from a type 0 to a type 1 planetary civilization. This is a moment in time where we get most of our energy from our closest recourse: the sun. In this civilization, the Internet is a type 1 communication system and the metaverse is a type 1 interface for all of it and what we are interfacing is a world in the future.
To go a little bit deeper, lets also take the theory on the human identity by John Locke into consideration. Here, there are three concepts: Life, Liberty and Property. In this theory, in order to balance the role and the power of government there has to be a social contract by the government to protect those three basic concepts. Now if we look at our current governments: they protect life, sure. But to what extend? In some cases they even take lives so this is currently not fully given which indicates that the government has too much power in this regard. Furthermore, the governments should protect our liberty (I can already hear the U.S. government screaming at the horizon :P). This basically means the freedom of the people, but we all know that this could also be easily taken away with a few of regulations or laws. The last concept would be the people`s property. Here, it is very clear that we do not have control over our property and it could be taken away at any point with a non-satisfactionary reason. An easy example would be: Even if you own a house, if you do not pay property taxes it could be easily taken away which is sort of an illusion of ownership. This means that the current system is somewhat porous.
With that being said, the Metaverse would be a reinvention of our control of the three mentioned concepts. Here, liberty would be something like the interpretation of who we want to be. It gives us the freedom to reinterpret ourselves in any way we want and it would not be bound by physical law. Furthermore, we would have a reinvention of property. A good example would be, like I mentioned before, NFTs or Bitcoin. Here we have the total control over these assets and these values can not be devalued by the printing of money or similar things.
Conclusion
So to close of this article I want to mention that this article was more on the philosophical side. I think it is sometimes interesting to thing about these things and while I am not always one hundred percent sure whether everything was correct, I still wanted to share my thoughts. I think that we already have some kind of metaverse going around but I can see that in the future it will just have an even bigger part of our lives and maybe even generate jobs and function as a target where the world wants to develop itself. With the current rate of new inventions it would not surprise me to see a more sophisticated world in my lifetime but I guess we just have to see.
What do you think? Do you agree with my point of view? Are we already living in the metaverse?
Published by ga38jem on
Publish0x|LeoFinance|Steemit|read.cash
On 19th November 2021
Sources:
https://twitter.com/shaanvp/status/1454151237650112512
https://roboheartbeat.com/2012/09/10/michio-kaku-on-the-science-fiction-in-video-games/
https://en.wikipedia.org/wiki/Kardashev_scale#:~:text=Current%20status%20of%20human%20civilization,-Total%20World%2C%20Annual&text=Physicist%20and%20futurist%20Michio%20Kaku,100%2C000%20to%20a%20million%20years.
https://en.wikipedia.org/wiki/Personal_identity#:~:text=John%20Locke%20considered%20personal%20identity,the%20soul%20or%20the%20body.&text=According%20to%20Locke%2C%20personal%20identity,substance%22%20nor%20on%20the%20soul.
Dogecoin To The Moon! - Literally
If you think that you heard it all and the world can not get weirder, then you should look again. What can be weirder than a Metaverse around the corner or a Meme Coin that has over a billion in market cap. A meme coin funding a space mission. Yes, you read it right: A MEME COIN IS FUNDING A SPACE MISSION. In this article we will take a look at this news and discuss what it could mean for the future of this meme coin.
SpaceX Mission to Moon
To stop keep you waiting which meme coin I am talking about: it is of course Doge Coin. SpaceX is planning on launching a rocket into space in early 2022 which will contain a payload that was paid for using Doge. The payload in question is a small satellite called the Doge1 that will orbit the earth from the same distance as the moon and collect information about what is out there. Amazingly enough, it looks like Doge 1 will be one of the first small satellites that will orbit the earth from such a long distance. This will turn a meme into a historical space exploration. What a time to be alive :D.
These plans were first revealed back in May and a SpaceX employee noted at the time that the mission “set the foundation for interplanetary commerce”. The cost of sending this satellite into space is estimated to be around 250 million USD which works out around 1 billion Doge at today`s prices. The question here is, whether it will have an influence of Doge because there is a lot of buying pressure. But maybe this already happened, and we just did not notice because it had literally no effect on the price.
Conclusion
The hype around this launch could be enough to shoot Doge to new all-time highs, which would mean an incredible market cap of Doge. It is also worth pointing out that the tentative date of March 2022 for the launch of Doge 1 coincides with the top of the current crypto bull market. This could mean that after the launch we could see a moderate downfall for all crypto prices and the beginning of a bear market. I personally thing it is a cool idea that such movements as it is Doge make it into the scientific and engineering world. This means that people can change anything if they just want it, although it is a very funny origin. Maybe it just shows that nothing has to be taken seriously but I could be wrong here.
Published by ga38jem on
Publish0x|LeoFinance|Steemit|read.cash
On 18th November 2021
Sources:
https://cointelegraph.com/news/doge-1-moon-mission-set-for-launch-with-spacex-in-early-202
https://www.space.com/spacex-dogecoin-moon-mission
https://www.bbc.com/news/business-57052811
Can ETH Reach 8k and Beyond?
Can Ethereum double or triple its price from the current position? I am sure that a lot of people are asking this question. In this article, we take a look at the current situation of Ethereum as well as what the main advantages of Ethereum are. Furthermore, we will discuss some the upcoming demand.
Fees and Demand
Let’s begin with one of the most annoying, and in my opinion worst things, about Ethereum: the transaction fees. The main drawback of Ethereum at the moment are the exorbitant fees people have to pay for a transaction. This is one of the biggest reasons why people are looking for competing alternatives like Solana or Binance Smart Chain. The more important question that needs to be asked though is why are those fees so high? The main reason why these fees are so high is the intense competition for block space that is going on right now. Because Ethereum has one of the biggest eco systems there are several different applications running on this blockchain. This means that demand is naturally very high and has to be paid with gas. On the other hand, this can also be seen as a good thing because despite the high gas fees Ethereum is the most popular blockchain around.
Advantages
If we look at Ethereum from the pure utility point of view, Ethereum seems to be unrivaled. This is due to two major things going on right now. Namely: DeFi and NFTs. DeFi demand for ETH is at record highs. According to defillama.com, the total value locked in smart contracts on Ethereum is at an all time high. There are thousands of Dapps that are being built on the ETH blockchain that are meant on being used in the DeFi space.
DeFi is not the only use case that is competing for that ETH block space. Let’s not forget the demand for stable coin settlement. While Stable coins like Tether and USDC are issuing on other blockchains as well, the bulk of their supply has been issued on the ETH blockchain. With those two out of the way, the thing that is taking the most space in the Ethereum blockchain are of course our beloved NFTs. This craze is upon us and it is not showing any signs of slowing down yet. The reason for that is because they are bringing a whole new class of users to Ethereum that otherwise would not be interested in crypto. Among these are people who are: music fans, collectors, sports fans or gamers. You just have to take a look at the statistics of OpenSea to understand the madness that is going on. For those who don’t know, OpenSea is the biggest platform for NFT trading right now.
Supply & Upcoming Events
So far, we just looked at the current demand side of Ethereum. Now we have to cover the supply side as well. One of the biggest updates so far was the EIP-1559 update which happened back in August. One of the main things that was introduced was the fee burn mechanism. Basically, every single fee that is paid for transactions has a base fee that is burned from supply. Essentially, those fees reduce the inflation rate of ETH. The problem with that is what happened a few weeks after the upgrade was released. The burn rate exceeded the emissions which made Ethereum on certain days a deflationary asset. What this basically shows is that Eth has not only high demand but also becomes a rarer asset.
With all of this out of the way, the most interesting thing is what will be happening when the high anticipated proof-of-stake merge will happen. In this event ETH`s Proof-of-Work main chain and Proof-of-Stake beacon chain will merge. This is one step in the roadmap towards ETH 2.0. It will officially see the ETH blockchain transition to a PoS blockchain which will bring all the benefits the users have been waiting for: Scalability, Speed, Decentralization and most importantly low fees. This will not only make Ethereum a lot more usable, but it will also ease some of the criticisms that are often leveled at it.
Not only that, but the impact it will have on the supply might be bigger than expected. After the merge the blockchain will go through a phase called the Triple Halving. Here the block rewards will be cut by a factor of around eight. In other words, this could be compared to an equivalent of three halving events. Now think about the hype that is attached to a Bitcoin halving and consider what will happen if it is three times that. If the supply gets dropped by this rate and the fee burns stay the way they are right now, the deflation could get supercharged.
Future Demand
Sounds very bullish right? So are the big investors thinking as well. The investor demand in the future seems to start rising. Whereas utility demand is driven by people who want to use the network investment demand is coming from those who want to HODL ETH for long term gains. It is no secret right now that institutions are now actively allocating parts of their portfolios towards ETH. This is also mainly to some ESG concerns that are making BTC and other Proof of Work blockchains land on a black list for investors. Because PoS blockchains are considered more environmental friendly this could mean that with the transition to PoS, Ethereum can become the most dominant cryptocurrency around the world.
Conclusion
With all of these indicators around us the future of ETH seems to be as bright as ever. I think we could see a big price jump in ETH even this year. With all of the positive things said, let me also stress some negative sides. Of course nobody can look into the future so nothing is certain. Maybe there will come a very hard winter or some harder regulations that nobody could foresee. Additionally, it is important to mention that the mentioned merge was planned for earlier this year which means that there might be also some delays in this regard as well. Nevertheless, I think that ETH is very close to a insane rally.
What do you think about that? Could we see an ETH worth 8k in this year? It would not surprise me.
Published by ga38jem on
Publish0x|LeoFinance|Steemit|read.cash
On 17th November 2021
Sources:
https://coinmetrics.io/the-ethereum-gas-report/
https://ultrasound.money/
https://blog.ethereum.org/2021/03/24/finalized-no-24/
https://defillama.com/chain/Ethereum
https://dappradar.com/ethereum/marketplaces/opensea
https://www.coindesk.com/business/2021/09/23/institutional-investors-preferring-ether-over-bitcoin-now-jpmorgan/
https://markets.businessinsider.com/news/currencies/ethereum-ether-bitcoin-crypto-defi-nfts-interest-rates-gold-jpmorgan-2021-11
https://markets.businessinsider.com/news/currencies/ethereum-price-outlook-rally-inflation-goldman-sachs-crypto-investing-2021-11
Stable Coin Crackdown Coming?
Stable coins were in the scope for quite some time. Now, U.S. regulators have finally released their report on Stable Coins and the recommendations it contains could crush certain Stable Coins if they these recommendations are put in place. In this article we will look at what the report says, which stable coins are at risk and what it could mean for the crypto space.
The Report’s Recommendations
I don’t want to bore y’all with the specifics and details of this report and come straight to the recommendations because this is what would interest me the most. First and foremost, the recommendations presented in this report are focused on the prudential risks which are identified in the area of payment stable coins. In terms of specifics the report says: “[…] legislation should limit stablecoin issuance, and related activities of redemption and maintenance of reserve assets, to entities that are insured depository institutions.” Currently, the only federal insured Stable Coin issuer is PAXOS and Circle will soon be following. On the other hand Tether will not be able to meet this requirement.
Furthermore, the reports says that “Insured depository institutions include both state and federally charted banks and savings associations, the deposits of which are covered, subject legal limits, by deposit insurance, and which have access to emergency liquidity and Federal Reserve services.” Additionally, all of these issuers will be “subject to supervision and regulation”. This all sounds like the Federal Reserve will work closely with Stable Coin issuers, something that Circle explicitly mentioned that it intends to do as part of its plan to become a bank. Some people even think that USDC is preparing to become a CBDC.
What is especially concerning is “Congress should provide the federal supervisor of a stablecoin issuer with the authority to require any entity that performs activities critical to the functioning of the stablecoin arrangement to meet appropriate risk-management standards […]”. This is a problem because crypto currency blockchains and cryptocurrency wallets arguably play a critical role in the function of stablecoins. In my opinion this shows that the government is all about control and that it is one of the biggest concerns they have about crypto. To be honest, I think that with these measurements a lot of scams could be shut down so it would not be the worst in the world. On the other hand, crypto would lose some of its advantages.
Conclusion
So what could be the effects on the crypto market if these regulations come into play? Firstly, it is important to mention that in the work group that made this report were a lot of pro crypto participants. This is the main reason why these regulations don’t seem as harsh as expected. This leads me to believe that these stablecoin regulations will not be so bad when everything is said and done. However, this assumes that politicians in the congress will act in a timely manner because otherwise the Financial Stability Oversight Council may step in and this could result in more heavy handed regulation.
Furthermore, the project that is at most risk is Tether and on paper a crackdown of Tether would crash the crypto market. In practice though we could see a migration to more robust stable coins and there would be some arguments and indicators that this has already begun. This could mean that the crypto space could possibly absorb a shock of an all-out attack and maybe not crash towards zero like in everybody’s nightmares. The biggest drawback of this report is actually the possible KYC that might be implemented. Like I mentioned before it would take away some advantages that crypto has. Looking on it from the other side this would give crypto a better adoption and acceptance rate.
Published by ga38jem on
Publish0x|LeoFinance|Steemit|read.cash
On 16th November 2021
Sources:
https://www.washingtonpost.com/wp-srv/business/longterm/blackm/plunge.htm
https://home.treasury.gov/news/press-releases/jy0454
https://home.treasury.gov/system/files/136/StableCoinReport_Nov1_508.pdf
Splinterlands - Amazing Season Rewards
Another Season passed by and so I wanted to share my thoughts and experiences with the Splinterlands community and everybody who wants to join this cool card game. In this article we will take a look at my season rewards as well as my progress in the game and what happened during the season.
Rewards & Recap of the Season
After my last post I was very motivated to borrow some cards so I can get into Bronze 2 at least. For those of you who don’t know: Each Division requires to have a certain amount of Card Power (CP). This CP you can get by owning cards and by borrowing cards. Because right now the cards are just incredibly expensive, people are better off borrowing the required cards. With this being said, I was very motivated and put together a solid deck that I could have borrowed. It was around 4-5 DEC a day and it required me to get out of Bronze 3 as quickly as possible so I would be eligible to earn some DEC rewards on my battles.
Well, what should I say. I did not take into account the cost of resources on the Hive blockchain. To explain: each transaction a player makes, whether it is a purchase or renting a card, the player loses some of his Hive resources. So every time you make a transaction the yellow bar in the picture goes down. When you are reaching close to zero this means that you can not do any transactions anymore. So what happened was: I had my deck and I went on to Peakmonsters.com to borrow some cards. I also found some pretty amazing deals. The only problem with that is, that if you are not fast enough somebody else gets the deal. The thing is, I thought if the transactions goes trough that means that I successfully get the card so I did not check any further.
After “renting” my whole deck I went to make my way up to Bronze 2. But to my surprise the borrowed cards weren’t available in the first battle. So I checked what the problem was and I quickly found out that the cards I had borrowed didn’t go through. So I borrowed the cards that I wanted again, making sure that this time they would be in my deck. After I successfully was able to borrow the first 3-4 cards I quickly got the Error notification that I did not have enough resources to make any transactions anymore. That is how I learned the hard way, that I can not take infinite amount of tries to borrow a card.
Because of this experience I was not able to rent my way up, I was close to giving up. But in my last days I got a delegation which allowed me to get 1k CP. I was quickly able to move into Bronze 2 and earn some DEC rewards. I must say that currently my most favorite Splinter is the water splinter. I like that the Magic Attacks go through the armor. But I also learned that it is pretty easy to counter if you know that your opponent plays this comb. This is why it is important to be able to play different Splinters.
As far as my rewards for this season, I got finally some cool reward cards from my daily quests. I was about to lose hope on getting one, but the waiting finally paid off! I know it is not much but for me it was a very happy moment. I received a Venari Heatsmith and I could not be any happier. This is so far the only rewards card that I was bale to obtain and I hope that I will be able to obtain more over the coming season.
As far as my season rewards go, I think I got extremely lucky! Not only did I not get any of the potion that are completely useless to me right now. But I also got three rewards cards with one of them being rare. Furthermore, this reward card is very powerful in bronze and it was on my wish list anyways.
Next Steps Moving Forward
As for my next steps, I came to the conclusion that buying the cards would be more sustainable to be able to play consistently a few divisions higher. That is why I decided to wait until the new update comes around. I expect the prices of the new cards being a little lower so that new players are able to accumulate more cards and therefore more Card Power. I am trying to save up all of my credits and maybe even putting some funds into the game so I can proceed. But for now I decided for myself that I don’t want to rent whole decks anymore because I need my Hive Recources to post my everyday articles which you can check out! (I know, that was a shameless plug :D)
If you haven’t joined this game yet, feel free to join it with my affiliate link:
https://splinterlands.com?ref=ga38jem
Published by ga38jem on
Publish0x|LeoFinance|Steemit|read.cash
On 15th November 2021
Sources:
https://splinterlands.com/?p=battle_history
https://peakmonsters.com/rentals
Illuvium - Release Strategy
In today’s article I want to talk about the upcoming game that makes me really excited. The game I am talking about is Illuvium and some of you probably already heard about this game. But for those of you who didn’t, it is essentially the next generation Pokemon game that will probably define the future of gaming. It is supposed to be the first AAA crypto game and is planned to be a Free-2-Play game. Its release date is not certain but it is planned to come out in Q1 2022. This probably depends on how well the closed beta will go which is starting somewhere in the next weeks. In this article I want to talk about how I understand the game will work, what ways there will be to earn profits and what my strategy will be going forward.
Catching Illuvials
The main aim of the game is to catch Illuvials and make a good performing team out of them. Like I mentioned in a few of my previous articles there are different Tiers, types and trait. The Tiers go from 0 to 5 and the higher a tier an illuvial has the stronger it is and the harder it is to catch. Types are essentially water, fire, earth etc. You all know them and this is not different to any other game there is out there. The trait category includes things like Slayer or Rogue which will define the Illvuials and make them a little bit more unique. Each Illuvial has three Evoultion steps and in order to get to the next one the player has to have three Illuvials of the same type. This will make it very interesting in the long run.
In order to catch those Illuvials the player has to find them first. This is done by traveling to an environment of the players choice. There will be around 7 to 9 different sectors where the player can travel to. They differentiate each other in Tiers and also in types. For example, in a fire type environment the player will be more likely to find fire type illuvials and so on. The travel to Tier 0 environments is supposed to be free and for the new player to get to learn the game. After that each teleport to another environment will cost a small fee in ETH. Now for those of you who are afraid of the big Ethereum gas fees: These fees will not be that high because the dev-Team uses a Layer 2 solution to keep the transaction fees as low as possible. After the player arrives in the area of his choice, he will have a certain amount of “Energy” (I call it that way, maybe it will be called different once the game is out). Each action the player makes from this point on will cost him energy and when the energy is zero the player will return to his base or original spot where he came from.
Now why is this important? The player will have a choice between scanning the environment first and pick the Illuvials he wants to battle in order to find them or he just goes blindly into the world and just runs into battles. The first option will cost more energy but it also gives the chance to encounter those Illuvials which the player is looking for. With the second option the player will have the opportunity to catch more Illuvials. Furthermore, it is important to mention that you have to defeat the Illuvials in order to catch them. That means that you shouldn’t go into a Tier5 environment with a few Tier 0 Illuvials. Additionally, it is important to have a balanced and homogenous team that complements each other so that it can play out its strengths. It is probably not the smartest thing to go into a water environment with just fire Illuvials. Another interesting fact is that the more Illuvials had been caught the harder it will be to catch the same Illuvial. That means that after a certain time it will get harder to catch those Illuvials.
The best part is, that those Illuvials are NFTs. That means that the player has full ownership over the Illuvials that he caught in the game. It is also possible to trade those Illuvials for Ethereum. What is even more interesting is that each Illvuvial will have a Gold and a Shiny/ Holo version. These versions will be more rare and will be wanted by collectors. Their in game stats will not be affected. Which brings me to the next portion of this article.
P2E Aspect
Crypto Games are known for their Play to Earn Aspects. And one of the possibilities to earn profits of this game is to sell your Illuvials since they are NFTs. Further possibilities will be, according to the Discord Channel:
- Sell farmed materials: which can also be found in the environments. Those materials will probably be used to craft some potions or steroids for a particular time.
- Sell Crafted items: Very similar to the previous point. The player can probably sell crafted items like armor or weapons because they will be also treated as NFTs. These weapons and armor is important because the player’s avatar is also participating in the battles which will give you a better chance of winning the stronger you avatar is.
- Play the market place: If you are a trader then you can try to play the market place. I am pretty sure there will be plenty of opportunities to buy items for cheaper and then sell them for a profit.
- Wager on battles: Here comes the PvP aspect into play. Players can either wage ETH against each others or even bet on going battles. This part is personally nothing that I want to participate in but it sounds like an interesting part of the game where a lot of money can be made.
- Tournament rewards: There are also Tournaments planned where players can participate in. This is similar to the previous point but I think it is more “official” and organized than just “street battles” against friend.
My Strategy
As I mentioned in my intro, I am very excited for this game. With this being said, I am not a person who likes to spend a lot of money on games like these. This is why my approach to this game is more casual than others. I am planning to start this game in a more grindy way. I will start like everyone else in Tier 0 and try to understand the game more. After I understood it I would continue to grind Tier 0 Illuvials more effectively until I have a good team and I feel certain to move to the next levels. At this point I would be ready to invest some money into the game. It is being said that to participate in the in game economy an initial investment of 50$ is needed which is fair from my point of view. At the end, if you want a normal AAA game people are also paying around 70$ just to play it. After I understand the higher Tiers I would feel comfortable to invest a little more just to proceed in the game but I am not planning on throwing out my money for this game. I think to have a fun experience and participate in the cool stuff an investment of about 100$ should be enough.
What about you? Have you already heard of this game and if yes what strategy will you be using to start your journey in this upcoming game?
Published by ga38jem on
Publish0x|LeoFinance|Steemit|read.cash
On 14th November 2021
Sources:
https://www.illuvium.io/
https://discord.com/channels/760344898200666112/796853287273758730
Fix The Money - Fix The World
In recent times it becomes clearer that our economic system is poisoned. It is poisoned by the greed of politicians and big institutions who can not get enough of money and power. It looks like the whole system is going towards uncertain times. In this article we will take a look at the current situation of the economy and how it affects society and what the obvious solution could be.
Current Situation
One and a half years ago the world was struck by the COVID-19 pandemic. With this pandemic many big issues were accelerated. Things like world hunger or climate change were put aside and ignored just to overcome the pandemic. Furthermore, we can see now how poisoned and unstable our economic foundations are. With the governments printing endless money the economy was temporary secured. With all the money printing inflation is on its way to a concerning high which seems to lead us into the next crisis.
How did we get into this economic situation? I think the analogy to drug abuse is pretty accurate. A normal person gets his first high by trying out a drug. In this case the drug is money printing. The person realizes that it makes him feel better and puts him into a temporary state of joy. That’s what we saw when the money printing started during the pandemic. The economy got better and all of the stock and crypto market saw consistent all-time highs. Now, what happens after a while? This state of feelings goes down and because it felt so good the person takes another shot of this drug to regain this state of joy. Well, we all know that this is not going to last as the previous state of joy. So what happens next? The, now, drug addict starts to increase his dose. Same goes with the amount of money that is being printed. It is going up. While this helps, again, temporary it does not look like it is sustainable.
There are only two outcomes from this scenario. First: The drug addict will not stop and will increase its dose. This will lead inevitably to the death of the person. In our little analogy this would bring the economy to a collapse and hyperinflation. Not only would it destroy the economy but also bring terrifying times into the world. Imagine the world economy collapses. All social structure would collapse with it and we can end up in an apocalyptic state of the world. Nobody would care about the environment or world hunger. Everybody would start to care for themselves. I know this is a very dark view on the future and very exaggerated but there is a real possibility that this might happen.
The second outcome is not quite as dark, but this requires a lot of strength. The second option could be to do a rehab and starting to live a more sustainable lifestyle without the drug. This would lead the person to crash down, but he is alive and can take things into its own hand again! Comparing this to the economy: We would see a market crash. It could be as big as 90%. Although I doubt it would be that big, a crash will happen. The economy has to change its view on money and start using healthy and sound money instead of printing endless dollars. This would help the economy to stay alive and get on track for the old golden times.
Golden Times
I say the old golden times, because we weren’t always in this junky state of printing money. Before that we had a gold standard. In this time the primary currency was gold, a scarce resource that could not be replicated as many as the government wants. Jumping back in history: the introduction of the gold standard made the poorest people live a higher quality of live than the richest people just a few decades before that. The reason for that is mostly because this fundamental sound money lead technology to rise. In the time of the gold standard things like transportation, communication or electricity made their break troughs! Things like the light bulb, automotive vehicles or telephones were invented which mark the first step in our current society.
But what about the internet and all the amazing things that were invented after the gold standard and World War 2? All of those things are based on the first steps that were created in the gold standard epoch. And I think everybody agrees that the first step is always the hardest. Once you understand a certain technology it is easier to develop novel methods and to improve the current method than just invent something from the bottom up. You would not have had the Internet without the previous inventions like electricity or the communication systems. You would not have any autonomous self-driving vehicles without having the old Mercedes cars which max speed was 10 miles per hour and was only able to drive for 30 minutes.
With that being said, during and after World War 1 & 2, the governments of the world needed to get the drug of money printing to get through hard times and win the wars. After that they realized that it is a very nice tool to get the economy going. And so, they went down this spiral without realizing that it is not very sustainable and actually going downwards. I think many economists would disagree with me but right now this is the point of view I have on the world.
Light at the End of the Tunnel
All of the previous execution leads me to this. With Bitcoin the world now has another chance to get back on track and fix the money problem. We could go back to a sound money system because Bitcoin is scarce (21 Million) and it can be divided into very small parts (Satoshis). My hope is that with Bitcoin we can enter a new era of economy which could bring back Golden times and lead to further steps in technology and inventions. The used technology of Blockchain could be a big part of it and we can see how many interesting projects start to come out of it. In my opinion this is the chance of a lifetime for our world to make the next step.
Not only would it revolutionaries the payment methods but it also has to change politics. I think this could be one of the reason why so many countries are fighting against it. With novel governance methods it could make governments how we know them today obsolete. This new methods would also take away power from big institutions like the Central Banks. This is another reason why the adoption of crypto is being slowed down by regulators and regulations. I think the big players will not go without a fight, but how history suggests no big changes happened without a big fight.
Conclusion
Now don’t get me wrong here. I am aware that our time where we are living in, is one of the best ones to live in. But I am suggesting to give it away because big institutions were too greedy. I also think that not all regulations towards crypto are bad and that some portions of crypto have to get regulated, for example the stable Coin sector. All in all, I think that crypto and Bitcoin have a future in this world and if used correctly it can bring us to the next step of technology and evolution.
Published by ga38jem on
Publish0x|LeoFinance|Steemit|read.cash
On 13th November 2021
Sources/ Inspirations:
https://leo-mattes.com/was-bedeutet-fix-the-money-fix-the-world/
https://www.youtube.com/watch?v=8QqreUTIZbM
https://pomp.substack.com/p/fix-the-money-fix-the-world
Comparison: Proof of Work - Proof of Stake
Cryptocurrencies owe their successes to the financial incentives which underlie their various consensus mechanisms. Most of these fall under the categories Proof of Work (PoW) or Proof of Stake (PoS). There has been a lot of debate about the efficiency, security and sustainability of those two mechanisms. Both of these mechanisms has their own advantages and drawbacks. In this article we will take a look at both of these mechanisms so at the end you can chose your own view on these two mechanisms.
Consensus
Before we jump into both of these mechanisms we should define the word “consensus”. Consensus in crypto is not that different form consensus in the real world. Lets illustrate this with a simple example: You and your nine other friends want to decide whether to watch a football game (FG) or go out and drink some beers (DB). In this case you have to ask the question: How do we reach consensus on what to do?
There are different approaches to do this. For example, you can use a simple majority rule where 6 out of 10 have to vote for one thing for the whole group to do this thing. Alternatively, there is the possibility where 9/10 people have to vote for one activity so it is certain that most of the people will have a good time. To be absolutely sure, we can add a security step where the people have to vote 30 minutes later to ensure that they still want to do this activity.
In cryptocurrency it is the same thing. But instead of the group of friends, computers have to come to a consensus whether a transaction is valid or not. The primary difference is that crypto consensus mechanisms have built in financial incentives to make sure valid transactions are confirmed. Why is this so important? Lets assume our friend group came to a consensus that they want to watch the football game. But this one friend just does not like football that much. Realizing that he is going to lose the majority vote, they come up with a clever idea: They invite a certain amount of people who also don’t like to watch football to this friend group. With these three people the vote would wing towards going to drink beer.
This same manipulation is present on the cryptocurrency blockchain. The difference is that the participants on the blockchain are deciding whether to approve millions of dollars of transactions. This creates a huge incentive to connect additional computers to a cryptocurrency blockchain to manipulate these transactions to their benefit. While in the friend group this issue could be easily solved by disallowing the addition of further participants, on the crypto blockchains you want to connect as many computer as possible because the more computers are connected to a network the more secure it is. With this being outlined: PoW and PoS are achieving the goal of having a secure network and bringing everybody together.
Proof of Work
Starting with PoW: It has its roots in a mechanism that was invented in 1993 to combat email spam. In 2008 Satochi Nagamoto this mechanism was used to ensure the security of a distributed digital payments network. So here is how it works: Any computer that process a transaction on a PoW blockchain like BTC needs to make a correct guess of an extremely random number to earn the right to do so. This costs time and energy to do.
In the example of the friend group this would be as follows. Every member gets a quiz to solve and whoever solves it first gets to vote on the activity that everybody has to do. The probability of a computer solving this quiz is depending on his hashing power which can be seen as the intelligence quotient of the people in the friend group. The smarter you are the higher the chance of solving this quiz. To incentivize people to join such a PoW blockchain, they earn fees from transactions in each block plus a block reward in that native coin. Every single time a block/ quiz is solved a new block/ quiz comes around to get solved. To ensure that some supercomputer does not guess the random number before everyone else, Bitcoin adjusts its network difficulty based on how much computing power is connected to it. This is similar to increasing the hardness of the quiz to ensure that not always the same friend gets the vote. Since not everyone is able to afford this amount of computers or not everyone in the friend group is super smart, they can work together and make a pool. Therefore the rewards would be split between the contributing parties solving the block.
This makes the PoW blockchain very safe, because it would mean that somebody if manipulative intentions would have to buy a lot of supercomputers to even have a chance to manipulate something. Not only would they have to buy a lot of computing power but they also have to continue to produce faulty blocks. This is because as soon as someone produces conflicting blocks on a PoW blockchain the blockchain temporary forks and all the other computers continue building on the longest chain. This longest chain is hard to maintain for an entity that is manipulating the network. This would be very hard to maintain and therefore makes the network very secure.
Proof of Stake
PoS seeks to do the same with much less hassle. Instead of using large amount of computing power to guess a random number and process transactions a cryptocurrency coin is staked/ locked on the blockchain to earn the right to do so. Logically, the more amount you stake the more likely you are to process transactions and create a block. This would be similar to saying: The friend who puts the most cash into a jar has the highest chance to get a vote. This alone would not be very safe, which is why this mechanism adds a random variable in which gives each participant the chance of getting the block. This would mean that each participant has to throw a pair of dice and the highest number would be eligible to process the block. The more coins you are stacking the more tries to throw the dies you have.
Another nice feature in this mechanism is called slashing. This basically meant that if one friend/ computer is trying to something manipulative or shady he is getting slashed. This means that a certain amount of his staked coins would be deleted or burnt and therefore would be a punishment. Several blockchains have different slashing percentages. Some are only slashing 5% while others are very drastic and are slashing 100% of the staked coins.
Conclusion and Comparison
This bring us to the comparison between those two mechanisms. In theory, everyone can connect their computer to a PoW network and earn cryptocurrency as a reward. Although this is possible, to be able to mine a Bitcoin successfully is very difficult and very cost intensive since the hardware and energy consumption is very expensive and you are not guaranteed to process the block. This led to some mining pools where several individuals put their computing power together. This led to a centralization of the network because there are only a certain amount of pools on the world. Furthermore, the PoW network can not implement any improvements for the blockchain if even at all, because this needs the consensus of every miner around the world. What is even worse is that if newer and more performable computers come on the market, the previous generation is being thrown away causing a significant amount of electro trash. Here the long term success depends on the computers resistance and environmental friendliness of the energy consumption.
On the other hand PoS networks are not perfect either. Since a lot of the coins are pre mined in these kind of networks, it makes them also pretty centralized. This means that if somebody would own the majority of these coins he would have effectively control over the whole network. The main advantages are that they do not require as much computing power and are generally way faster than PoW networks. Here the long term success depends on an equitable distribution of supply and the ability to store their massive transaction histories in a decentralized way.
Published by ga38jem on
Publish0x|LeoFinance|Steemit|read.cash
On 11th November 2021
Sources:
https://academy.binance.com/en/articles/proof-of-work-explained
https://academy.binance.com/en/articles/proof-of-stake-explained
https://www.danheld.com/blog/2019/1/5/pow-is-efficent
https://vitalik.ca/general/2020/11/06/pos2020.html
Metaverse Adoption - News & Plans
With Facebook’s announcement to change their name to Meta and with their future plans a lot of Metaverse Coins like SAND or MANA went trough the roof. In this article we will discuss what other news regarding Metaverse happened in the past weeks and what it could mean for us in the future.
After Facebook, Microsoft has announced its plans to create a metaverse of its own. They will start with the popular Microsoft Teams Office communication platform. This project is titled MESH and it is supposed to feature avatars that can meet in office type settings to do office type things. How exciting, said no one ever! I am just imagine how many people will modify their characters into a big Oger just to troll their Co-workers. Honestly, I don’t think this is very exciting. Anyways, MESH is expected to roll out in 2022.
What is more exciting is the next news. Microsoft is planning to announce also a informal X-Box metaverse. Unfortunately, there are not many details about that but comments by a Microsoft CEO suggests that X-Box is looking to make existing games such as Minecraft more immersive by introducing elements of virtual reality. This sounds more like fun and I could imagine this having a big potential. They just have to look at the Sandbox metaverse which looks very similar to Minecraft.
Clothing brands like Nike want to go in the same direction. Apparently, Nike is looking to hire two people to help bring the Nike brand to the Metaverse worlds. The plan is to sell virtual clothing as part of its metaverse push. This step could be due to the lost profits that were caused trough the pandemic. But this is also just speculations. Anyways, it would be very cool to see a Nike store in sandbox where you can shop, just like in the world. Or imagine the potential for a big mall where several stores like Nike, Adidas and Under Armor can buy plots of land to sell their new virtual clothing line. This way they could test new designs without producing them and then bring them out into the real world. Pretty amazing if you ask me.
Conclusion
All of these news seem to pump up all of the prices of the Metaverse projects. Investors see the opportunity of a crossover between these projects and real world industries like the clothing industry. Maybe we could even see brands like BMW or Ford joining this trend but I guess this wont happen any time soon. It would be pretty fun though being able to purchase a new BMW M4 and drive around with it in the Metaverse. Furthermore, the next step would also be to develop a projects which aims to connect all of the metaverse projects. This could lead to an amazing experience!
Published by ga38jem on
Publish0x|LeoFinance|Steemit|read.cash
On 8th November 2021
Sources:
https://cointelegraph.com/news/microsoft-muscles-into-the-metaverse-with-teams-updates-and-xbox-upgrades
https://mixed.de/halo-minecraft-flugsimulator-microsoft-chef-verspricht-3d-metaversen/
https://www.btc-echo.de/news/nike-geht-ins-metaverse-cryptokicks-auch-am-start-128861/
https://www.cnbc.com/2021/11/02/nike-is-quietly-preparing-for-the-metaverse-.html
https://enjin.io/blog/100m-efinity-metaverse-fund
The Market Crash Countdown
Currently, everybody is talking about this bull run what price Bitcoin and Ethereum can hit next. I am also one of the people who like to speculate about that and it brings me joy to see the prices of these assets go up. But there is this feeling, like somebody is watching us from a mile away, like Michael Mayers just to hit us in a time where nobody is expecting it to happen. In this article we will discuss this event and how it might be inevitable.
The Inevitable Event
Since the pandemic started trillions of dollars were flooded into the markets. Not only the crypto market but also the stock market and the housing market saw a big uptrend over the past 1.5 years. It almost seems like we are untouchable right now. Not even the infrastructure bill influenced the prices. It even gave BTC a boost upwards. But when greed is at its highest and you get hints from every single TikToker about the next ShibaInu you should know that something is not right.
It looks like the one thing that could crash all the markets now is the Federal Reserve. Last week it announced that it will be reducing its purchases of government bonds. For those who don’t know: Interest rates for saving and borrowing are determined in large part by the demand for government bonds. If demand for government bonds is high interest rates are low. And if demand for government bonds is low interest rates are high.
With this explained, the Federal Reserve has been buying 120Billion dollars worth of government bonds every month almost since the pandemic began. This helped to keep demand for bonds high and interest rates low. This helped the economy and the overall markets because low interest rates incentivized individuals and institutions to borrow and spend. The big problem now is, that the borrowed money to invest is at an all-time high. Now that the Federal Reserve has begun tapering, which means reducing the purchases of government bonds, the interest rates should be increasing. This means that all those who have borrowed money and hold assets in overleveraged positions might have to sell all their assets to be able to afford those higher interest rates and cover their monthly debt payments.
The individuals would sell all the risky assets first and that woold mean that crypto assets like BTC and ETH would be the first to go. This would lead to a panic sell off which would drop the crypto market for sure. More importantly, the reason why the Federal Reserve is rising the interest rates is because of runaway inflation. This could turn into hyperinflation if nobody changes anything. This means that if inflation would be get under control, the inflation hedges like Bitcoin would become obsolete which would be another reason to sell BTC.
Conclusion
This whole scenario sounds pretty scary and it could lead to a massive panic sell off in the markets. Especially, with news around that there would be taxation on unrealized capital gains which would lead to individuals like Elon Musk selling 10% of their shareholder position just to cover the tax expense. On the other hand, history suggests that these kind of taperings don’t last long. This is because after massive corrections in the stock market the Federal Reserve turn the money printer back on and buy government bonds again. With this in mind, I would suggest that the upcoming crash will be a hard and short one. This would be an excellent opportunity to restock the positions in the projects that you really believe in and hold them as assets.
What do you think? Will the crash happen this year or will there be no crash at all?
Published by ga38jem on
Publish0x|LeoFinance|Steemit|read.cash
On 9th November 2021
Sources:
https://thehill.com/policy/finance/economy/579879-federal-reserve-announces-tapering-of-bond-purchases
https://cointelegraph.com/news/house-passes-1t-infrastructure-bill-with-crypto-tax-for-biden-s-approval
https://www.theguardian.com/technology/2021/nov/08/will-elon-musk-abide-by-twitter-poll-and-sell-10-of-his-tesla-shares#:~:text=Why%20did%20he%20do%20it,on%20%E2%80%9Cunrealised%20capital%20gains%E2%80%9D.
Polkadot About to Explode?
I read a lot lately about the crypto cycle and that were are about to enter an Altcoin cycle. With this being said, one of the most interesting projects out there is Polkadot and I am pretty sure everyone of you has heard of it. In this article we will take a look at Polkadot and what it makes it so popular. Furthermore, we will take a look at one close up event that could change the whole crypto space.
How It Works
Lets start with some basics. Polkadot uses a novel proof of stake consensus mechanism called “nominated proof of stake”. The short version of this mechanism is that DOT holders nominate validators by delegating their DOT to them. These validators secure the relay chain which is the central blockchain. The relay chain is not smart contract compatible and only supports DOT transactions related to DOT transfers, staking, governance and parachain slot auctions.
Parachains are blockchains that plug in to the relay chain. In contrast to the relay chain, the plugged in parachains are smart contract compatible and host all of Polkadot’s DApps. The relay chain is limited to 100 parachain solts. Due to the fact that a lot of projects are built on the Polkadot Chain, an auction gets to decide which projects gets a Parachain slot. These auctions involve bonding DOT to the relay chain. A snapshot is taken before the auction ends and the winner gets one of these wanted slots.
Here, DOT holders can loan their DOT to the projects that are participating in these parachain slot auctions in exchange for their tokens. This is a mechanism called “parachain loan offering” (PLO). In contrast to an initial coin offering any loaned DOT are not sold or even given to the project. Loaned DOTs are simply bodned to the relay chain for the duration of the prachain’s lease. At the end of that lease period all bonded and loaned DOT are returned.
Next Events
So what is the event, that I was talking about in the intro. Well, it is the upcoming parachain slot auctions. According to their website the first auction is supposed to take place on November 11th, so this Thursday. So what can we expect from these slot auctions?
Luckily, Kusama held some slot auctions already. Kusama is the test blockchain of Polkadot. That means that everything that is arriving on Polkadot is basically first tested on Kusama including those Parachain slot auctions. The winners of Kusama’s first round of auctions were: Karura, Moonriver, Shiden, Bifrost and Khala. These projects are planning on participating on the Polkadot parachain auction as Acala, Moonbeam, Astar Network, Bifrost and Phala. It is very likely that these projects will be the winners of Polkadots’s first round of auctions.
While these auctions were going on KSM, the native Coin of Kusama, had very high volatility due to all the bonded coins in the auction. This could mean that DOT’s prize will be spiking during these auctions because so many DOTs will be locked away. It is important to mention that if those DOT is used for the auction it will be locked up for 2 years, because that is how long the project will get its slot for. In my opinion, this could shoot the price for DOT very high, and it could break its all-time high.
Besides these auctions there are two mor events to mention. The first one would be its parachain interoperability which is planned to be achieved by XCM. If anybody wants to educate himself on this topic feel free to check out this article: https://polkadot.network/blog/xcm-the-cross-consensus-message-format/ .
The second upcoming milestone is the introduction of parathreads. These are essentially “pay-as-you-go” parachains. These parathreads could open the door to institutional adoption for Polkadot and a few of its projects have already had some traction on that end.
Concerns
With all of these bullish news lets not forget to look at some concerns that might come up for this project. Currently, Polkadot is very centralized because all of the changes that are made is happening by one organization. This would make Polkadot an easy target for regulators. Another problem for Polkadot could be that most of its promising projects were Chinese projects. Now that China has officially banned crypto, it is very difficult for Chinese developers to access to their projects which takes away a lot of Polkadots ecosystem.
Conclusion
Lately it was very calm around Polkadot, but I think this will change soon. I think that with the starting auctions DOT’s price will start to pump and we could see new all-time highs! This makes me very excited for the upcoming weeks and I am preparing my exit strategy and so should you if you have some DOTs in your wallets. I think that it will be a very good opportunity to realize some gains and reinvest it in BTC.
What dou you guys think about this project and the upcoming auctions? Do you think DOT’s price will pump?
Published by ga38jem on
Publish0x|LeoFinance|Steemit|read.cash
On 8th November 2021
Sources:
https://parachains.info/auctions
https://polkadot.network/launch-roadmap/
https://polkadot.network/blog/making-history-an-overview-of-the-first-five-parachain-slot-auctions-on-kusama/
https://polkaproject.com/#/
https://polkadot.network/blog/xcm-the-cross-consensus-message-format/
Market Manipulation 101 - Wyckoff Method
During the last crypto crash many investors experienced a big dump in their portfolio. Some people sold while some people hold on to their investment. It became a meme of “buy high and sell low”. But then at the lowest of points the market suddenly turned around and it began the next bull market. It sounds like a normal crypto cycle but is there something behind it, maybe manipulation? This sounds like a crazy conspiracy theory but what if I told you that this can be a real possibility? In this article we will take a look at the Wyckoff method and try to understand what happened back in May.
Some Basics
To understand this method we need to be familiar with some basics of the technical analysis trading. A Red candle means that the price goes down and the green ones means that the price went up. The wicks on each candle show the highest and lowest traded during a time period according to the time frame. As a rule of thumb, a long wick at the of a candle means a lot of people sold and a long wick at the bottom of a candle means, a lot of people bought the dip. The body of the candle shows where most of the trading happened during that time frame.
Some price patterns are reoccurring because these patterns reflect the human emotion, namely fear and greed. While there are hundreds of these patterns some of the most common are Triangles, Wedges and Flags. Almost all of these patterns are drawn by using support lines. These lines are drawn by using one of two ways. First is to use the highest and lowest prices across a certain time period or by looking at where price is clustered in the past. If the graph drops below a support line, this line becomes a new line of resistance and vice versa.
For this article we need some further indicators. These are the trading volume and the moving averages. The first one is used by traders to confirm whether a price pump or drop is legit or not and like price the size of each candle stick tells you how much volume was traded during that time period. Moving average indicators show us the average price of that crypto over three different time periods. You can think of these moving averages as more mathematical versions of support and resistance lines.
The Wyckoff Method and Patterns
Now that we have a rough overview over some basics, lets ask the question: What happens if every trader is relying on the same patterns and indicators? The short answer would be that it makes it very profitable for someone to come in and disrupt the market by pushing the price above or below where most people expect it to go. This was already done over 100 years ago on Wall Street where big institutions used their “whale power” to scare investors out of their stocks and commodities. While this is a pretty big accusation it can be said that big institutions just playing the game with the set amount of rules. If they see that a certain stock is overleveraged it is easy to bring the price back down so that they can buy it up for a discount. It can also go the other way which is called shot squeeze and we saw this happening with the Gamestop stock in the summer.
Because it requires a big amount of money to manipulate the market in this way it can be very easy to detect in the price charts. They could be found in every tradable market since this method was defined about 100 years ago. These are accumulation, distribution, re-accumulation and re-distribution. All of them are playing a role in the Wyckoff price cycle.
Starting with Accumulation, we have a preliminary support in Phase A. You can think of this as being a pit stop on an otherwise aggressive price drop. At the bottom of that downtrend you will usually see a selling climax. Here, the price often goes so low that it scares a lot of people into selling. The SC is often far below a key zone of price support. Because the selling climax is caused by very strong short-term price manipulation the re-bound from this SC zone is often strong and results in an Automatic Rally (AR). Given that the average investor is still fearful, it is very common that the price will drop again for a Secondary Test (ST).
In Phase B of the Accumulation Pattern, prices tend to move sideways within the trading range defined by the automatic rally and secondary test. Since this is where the institutions are buying the asset the price will sometimes bounce outside of this trading range to keep retail investors uncertain about re-entering the market.
In Phase C, it is common to see a down trend ending with a Spring. This is a massive manipulated dip that scoops up any retail assets the institutions did not get earlier. In Phase D, the price finally starts to rebounce and will sometimes correct in a Last Point of Support (LPS). The difference between LPS and ST is that, LPS will have a much lower sell volume which proves that the selling is not serious. Before exiting the Accumulation pattern in Phase E there will be a sign of Strength (SOS). This serves as confirmation that the price is likely to keep moving up. Here the SOS will have much more buying volume than any Automatic Rally which is confirming that the move upwards is genuine. The whole purpose of this Pattern is for institutions to buy as much as possible of the asset in a zone where the average investor is paralyzed with fear.
The next pattern is the Distribution Pattern. This pattern is as complex as the previous one but it is just as simple when you break it down step by step. Usually, Phase A begins at the tail end of Phase E of the previous pattern. The first peak is the Preliminary Supply (PSY). Here, some retail traders start to sell. This PSY point is marked by relatively low selling volume. Around this time inexperienced investors start to come in and this causes the buying climax (BC) shortly after. This is where the institutions starting to sell their assets to the new comers which results in the Automatic Reaction (AR).
Phase B starts of with the Secondary Test (ST) which is usually below the BC. Here the institutions are gradually selling off their assets to new and existing retail investors. As with Phase B of the previous pattern, institutions will occasionally push up the price to keep retail interest and confidence high while they secretly sell.
In Phase C we see the Uptrust after Distribution (UTAD). This is supposed to bring as many retail investors into the market as possible through the FOMO Causes. Institutions start to aggressively sell to these investors causing the price to fall. This price collapse continues into Phase D. Phase E then goes into Phase A of the next accumulation cycle.
Conclusion
In my opinion we could see these cycles play out over the past year. Back in May when everything crashed we could see the beginning of the Accumulation Phase. And recently we are probably seeing the Distribution Phase which brought a lot of Retail Investors back into Crypto. The real question now is: Will we see the next cycle soon? With regulators around the world making it possible for big institutions to accumulate BTC it could be a possibility that we soon will see another Accumulation Phase which would drop BTC again. In this phase it will be very important not to be paralyzed by the institutions but to buy more in and use the manipulation to our advantage. Like we saw in this article this phase will follow by the distribution phase and this will shoot up BTC to next price level.
What do you think? Are we about to see the next phase in the Wyckoff Cycle or is this just a regular Bull-Run?
Published by ga38jem on
Publish0x|LeoFinance|Steemit|read.cash
On 7th November 2021
Sources:
https://school.stockcharts.com/doku.php?id=market_analysis%3Athe_wyckoff_method
https://academy.binance.com/en/articles/the-wyckoff-method-explained
https://stockcharts.com/articles/wyckoff/2018/01/reaccumulation-review.html
Helium - The Future of Internet
Decentralization is one of the most important advantages of cryptocurrency. But this is also not something that every Crypto project currently has. This is because the networks we use to interact are owned and operated by centralized service providers. An example would be the BNB which is operated by Binance. In this article we will take a look at the project Helium which is creating decentralized peer-to-peer networks. This could be a very important project for the future of crypto.
How It Works & Blockchain
Lets start of and try to understand how Helium works. It essentially contains of three things: hotspots, console and the blockchain. Hotspots can be imagined as the routers that we are using for WiFi. The difference is that helium hotspots don’t transmit a WiFi signal but a long-Fi signal which is similar to radio. This gives Helium a range of hundreds of kilometers compared to the range of normal WiFi routers. This feature makes it easy to transmit small packets of data to and from any supported wireless devices which fall within the range of this helium hotspot. Furthermore, the long signal frequency used by these hotspots also means that they use almost no energy. And the best thing about it is that the instructions to make a helium hotspot are open source which means that anybody can make their own helium hotspot from scratch. Due to the fact that these hotspots are connected to the Internet it is possible for developers to request data from any compatible device which falls within the aforementioned range of the network. Furthermore, organization and individuals could deploy their own helium-compatible devices to do things like supply-chain management or do a more fun application like the tracking of electric scooters in the city. All of this data would me allowed to be requested and managed using a helium console which can be integrated with platforms like Google-Drive.
In order to get this data, it will cost you or the companies crypto currency and this is exactly where the Helium blockchain comes into play. It was built from the ground up and uses a consensus mechanism based on the honey badger BFT which is especially designed to support nodes with a spotty connection. This is needed because not all Helium hotspots are always online. It is furthermore possible that a hotspot which is part of the consensus group could go offline in the middle of validating a block.
Additionally to the Honeybadger consensus mechanism, Helium runs a secondary consensus mechanism which is called “Proof of Coverage” which is also Helium’s primary incentive structure. As the name suggests this mechanism involves checking whether a helium hotspot is broadcasting a Long-Fi signal or not. This check is done by a randomly selected Helium hotspot which is in the range of the hotspot which we are checking. This should encourage network participants to set up their hotspots in a range where it would overlap with other hotspots. When the hotspot passes this challenge, both the challenger and the challengee earn a portion of the block rewards.
Additionally to the helium hotspots, there are further two network participants that are earning block rewards. One of these is Helium’s validators. They were brought in because the rapid growth of the network was making it harder for hotspots to effectively participate in the first consensus that I mentioned above. Those validators must stake exactly 10 thousand HNT. Staking more or less then 10k HNT is not allowed and unfortunately delegation is not possible. The other participant in the network that earn helium block rewards are Helium investors and Helium Inc which brings us to the next part of this article: Tokenomics.
Tokenomics
HNT is the native cryptocurrency of the blockchain. It has a maximum supply of 223 Million and there was no pre-mine and no ICO. This means that the supply started from zero and in the first years of being around over 100 million were minted. Every two years the emission will be cut in half until the maximum amount is reached which should take about 50 years.
Which is very interesting is that HNT is technically not used to pay for the network fees. All transactions are paid in data credits including fetching data from devices connected to the helium hotspots. These are created by burning HNT. Furthermore, these credits are pegged to the U.S. dollar at a ratio of 100 thousand to one. Unfortunately, this credits can not be transferred back into HNT which makes HNT a deflationary cryptocurrency. So what would happen if the last HNT is mined? For this scenario, the HNT community passed a proposal to enable net emissions. This involves taking a small portion of data credits and converting them back into HNT.
Roadmap
This brings me to the next portion: the roadmap where we take a look at potential developments for the future. One of them is “HIP 24: Reward Splitting”. This wants to introduce, as the name suggests, the reward splitting which would make it possible for helium hotspots to send their HNT rewards to multiple wallets instead of one. Another HIP would be HIP 31 which wants Helium to introduce on-chain governance via HNT Token. Further proposals are being made and you can all read them on: https://github.com/helium/HIP
Concerns
One thing that seems to be missing is a proposal for a scaling solution for the Helium blockchain which will be required if the network continues to grow the way it does right now. This brings us to the penultimate part of this article: the concerns. Unfortunately, Helium has a lot of competition from legacy network providers. Big companies like Amazon and SpaceX are big competitors in this sense and it will be very interesting to see which will play out in the future. The fact that Helium is open source does not help if you are competing with big tech giants like these.
Another concern would be the regulation part. It is most likely to be considered as a security by the SEC. This could mean that HNT wont be listed on any U.S. exchanges anytime soon and this is where most traders and investors are located including the ones that are invested into Helium Inc.
The last concern that I see is a potential privacy risk that people could face by installing hotspot devices. Although all of the data that is being transmitted over the helium network is encrypted it seems like this is not the case for all third party hotspots.
Conclusion
I really think this could be one of the biggest projects in crypto if the market stays bullish like the past few months. Furthermore, I believe that such a project would bring us further to the vision of a decentralized society and maybe even closer to the next evolution step in technology. Unfortunately, it has to overcome a lot of issues and it is not clear if everybody in the world would be ready to use such a network for personal usage. Nevertheless, I think that this idea is very cool and I will continue tracking this project in the future.
Published by ga38jem on
Publish0x|LeoFinance|Steemit|read.cash
On 6th November 2021
Sources:
https://www.helium.com/mine
https://explorer.helium.com/
https://docs.helium.com/blockchain/helium-token/
https://www.forbes.com/sites/aarontilley/2016/04/25/google-leads-20-million-invesment-in-smart-sensor-startup-helium/?sh=3b76c7423ee8
https://freedomfi.com/helium5g/
https://ichi.pro/de/helium-coverage-map-internet-der-dinge-247399134808431
https://medium.com/poa-network/poa-network-how-honey-badger-bft-consensus-works-4b16c0f1ff94
https://blockbuild.africa/review-what-you-need-to-know-about-helium-crypto/
How To Invest Like The Top 10%
With the governments printing more and more money, the common sense would be that everybody should have enough money, right? Wrong, somehow the rich are becoming richer. In this article we will take a look at how the top 1% is investing their money. After this you can either hate the rich or try to do the same. I would say: if you can not beat them, join them.
**The Rich Approach**
In an interview Morgan Stanley explained that most of his customers are borrowing money. If you are familiar with the name Morgan Stanley, then you know that his clients are very rich people. This brings us to the question: Why are rich people borrowing money?
The answer to this question is very interesting. By taking up a loan it allows them to still control their wealth and assets and still accumulate new assets. They are doing this by borrowing against their assets which allows them to borrow the money they need. This way they are not selling their underlying assets and they can invest into new assets! Pretty clever if you ask me.
If we think about traditional investing there is buying stocks crypto or real estate. Mortal people like you and me think of them as things that we can hold for a few years and when the time is right we will sell them to make a nice chunk of profit. That is the traditional path to wealth that I thought was the way to be wealthy. But now that I am starting to educate myself (and I am not even close to be away from the beginner’s level), I am learning that this is not the way to manage and control wealth.
Buy Borrow Die
Let’s look at the technique that the rich are using in a little bit more detail. Their approach goes a little bit like this: Buy, Borrow, Die. In traditional finance the buy phase is often called the accumulation phase. I assume that everybody reading this is some sort of in this phase and this is also the phase where most of the people will spend their lives in. In this phase people are meant to go to school, educate themselves, get a degree or/ and a high paying career (or/and because I think it is not necessary to have a degree to get a high paying career). With this earned money people are supposed to buy up assets.
With this being said, there are different asset classes that exists, and I think we should talk about them as well. I like to differentiate into 3 to 4 asset classes. These are Stocks, Real Estate, Crypto and the fourth one would be Businesses. But because Businesses are a little bit vague for me we keep it with the three aforementioned ones. Furthermore, there are several other asset classes but to keep it simple we will focus on these three. Each of these assets represent a different benefit to the strategy we are about to investigate.
Starting with Real Estate, the advantages of it are pretty clear. It is a stable asset that can generate you a fixed cashflow (if you rent it out), it preserves its value most of the times and it can be used as a tax write off. The most important thing is though, that people can borrow money against it. The same goes for stocks. If you are investing a certain amount of money each month into your portfolio, at some point your portfolio will be worth a certain amount. This amount can be used to borrow money without actually selling your stocks in the portfolio. Of course, same goes with crypto. The takeaway from this step is that the rich never sell, they accumulate.
So why is this so interesting? This brings us to the next step: Borrow. Instead of selling these assets and getting hit with capital gains taxes, the rich just borrow money. This is done by a securities backed line of credit. This allows the asset holder to borrow something between 50-100% of the asset’s cash value at a very special interest rate. The special interest rate is most of the time lower than the interest rate that normal people would pay because this loan is already backed by the underlying asset! This means that if the borrower can not pay back the rates, the bank can take the asset and is therefore, secured. Whereas if a normal person would take a loan, the bank takes a higher risk and therefore demands more money in the form of higher interest rates. This way the rich can borrow money at a very low interest rate and invest it into something where the return can beat the interest rate over time. That is essentially how the rich are able to become richer each year.
The last step in this strategy is: What are you doing with all of this wealth when you are dead? I know this should not be a big concern because you wouldn’t be alive anymore but if you want to pass your wealth on to your family, this step should be very important. Here, the rich don’t sell their assets and just give the money to their families. What happens is, the rich put all their accumulated assets into a trust which is then inherited by the family at a “stepped up cost basis”. This allows the family to keep those assets without paying too many taxes and just continue the cycle of this strategy.
Risks
As usual, there are some risks with this strategy. The biggest risk is when the underlying asset loses its value. The problem then will be that the bank has nothing to fall back on. That means that if the underlying asset will drop below a certain value, the investor will be forced to sell this underlying asset and therefore loose this asset. Now imagine, the investor would be over leveraged to an insane degree. This would mean that he would have to sell everything and at the end would have nothing left. In my opinion this should be one of the most important things to consider and only use assets as collateral that are very stable in value.
Conclusion
For me it was very interesting learning about this method because until then I really thought that I have to sell my portfolio at some point. This also puts another perspective on the rich. While I am pretty certain that not every rich person is the finest one and got their wealth on a legal way, I do think that this strategy explains why the rich are getting richer. What do you think? Are you willing to try out this method if you have some underlying assets?
Published by ga38jem on
Publish0x|LeoFinance|Steemit|read.cash
On 5th November 2021
Sources:
https://www.forbes.com/sites/jackkelly/2020/07/22/the-rich-are-getting-richer-during-the-pandemic/
https://www.wsj.com/articles/buy-borrow-die-how-rich-americans-live-off-their-paper-wealth-11625909583
https://www.investopedia.com/terms/s/stepupinbasis.asp
https://www.valueresearchonline.com/stories/49587/buy-borrow-die/
Has ESG Influence on Bitcoin?
Do you know what caused the crypto market crash back in May? Most of us would think, China’s crackdown on crypto mining. If you are an institutional crypto investor, your answer would be different. In this article we will talk about the ESG concerns, and we will try to understand why this little word has the power to make or break several different industries.
What is ESG?
Let’s start with the definition of ESG. It has its origins in a letter sent to the CEOs of the world’s largest financial institutions back in 2004. These institutions, the United Nations World Bank and the Swiss government produced a report called “Who Cares Wins” in 2005. This first coined the term ESG. In 2006 this coalition formed a global network of investors called PRI (Principles for Responsible Investors). ESG is essentially a series of criteria which creators believe financial institutions have to examine before making an investment into any company, country or individual.
These criteria fall into three categories: Environmental, Social and Governance, hence ESG. These terms are self-explanatory: Environmental contains includes topics like how much carbon dioxide the company produces or how much green energy does it use. Social criteria include topics like how employees are treated, how much they are paid or topics like gender equality. The governance criteria include stuff like the structures of the companies, how transparent they are or how much influence shareholders have over companies.
With this being said, companies that are on the “naughty-list” of ESG include industries like alcohol, tobacco, gambling, adult entertainment or weapons. One of the biggest companies that are leading this ESG rating is MSCI (Morgan Stanley Capital International). It gives corporations an ESG in the rang of Triple A to Triple C using 37 criteria.
For a long time this score was not taken seriously amongst institutional investors. This changed in January 2020 when Blackrock CEO Larry Fink wrote a letter to the CEOs of all the companies Blackrock is invested in. Why is this so important? Because BlackRock is only the largest asset manager in the world and is invested in just about every major cooperation in every economic sector. This letter continued the wish that all corporations BlackRock is invested in should operate in accordance to these ESG criteria. After this happened, companies got together and standardized these ESG criteria.
Ever since then the ESG criteria have expanded. In a recent interview of “What Bitcoin did” the host spent an hour talking about ESG with Kevin O’Leary. Kevin revealed that almost every single asset manager in the world has an ESG committee of some kind and these take these criteria very seriously. In other words, institutional ESG committees do not care if the company is about to cure cancer. If these companies are using excessive fossil fuels (one of the criteria), they wont get a singly cent from the institutions. According to Kevin the letters have changed the attitude of all the companies which make up the S&P 500 and reshaped the global economy. This is because every CEO that ignores those directives in those letters will also not get a single cent. A good example of BlackRock’s power is the energy sector which is being crushed according to Kevin O’Leary.
Interview:
https://www.youtube.com/watch?v=N-TwVLIK7UM
As for the crypto crash in May, Kevin pins that to the ESG as well. He believes that Tesla dropped BTC payments not because it would affect its allocation of carbon credits from environmental regulators but because institutional ESG investors threatened to pull the plug on Tesla.
Crypto’s ESG Breakdown
Being aware of how much influence ESG has had on Bitcoin and the rest of the crypto market you might be wondering what ESG inclined institutions are thinking of crypto now that the prices seem to sky rocket again. Starting with the Environmental criteria, it looks like it is starting to get better. This is primarily because of proof of work cryptocurrencies is becoming greener as miners shift to use renewable energy. China’s crackdown on mining has also helped Bitcoin and other POW cryptocurrencies with their ESG scores since oversight of renewable energy us is much easier to do in countries like the U.S. where many mining operations have moved recently. The only real concern left on the environmental side of things is the electronic waste. The computers that are used to mine BTC are only used for this particular purpose and if a new model comes out it is being replaced rather quickly.
Moving further to the second criteria: the social department. What we see here seems like a lot of fun too. Over the past months, there has been a lot of news of cryptocurrency in illicit activity like money laundering. While this might be a great point for anti-crypto politicians, the institutions are not buying it. That is because the institutions have the numbers.
As far as social metrics go, institutions seem to be much more concerned about the volatility risks associated with crypto. Furthermore, there is the concern that a lot of people don’t know what they are investing in. The only other social factor that the ESG is focused on relates to transaction disputes. Like we all know, all crypto transactions are final and can not be reversed. This is something that institutions are not used to. This can be ruled out by third party transactions like the Lightning network.
This brings us to the third and final ESG category: Governance. Obviously BTC has no CEO or board of directors. This wouldn’t be so decentralized, would it? BTC is governed by miners, developers and BTC holders. This structure is a part of the reason what makes BTC so secure because there is no single third party than can be pressured to implement whatever bug or feature you desire. The main governance issue is the lack of regulations around cryptocurrency. Although this is improving, what the institutions are asking for is quite excessive. An example for that is the connection of your crypto wallets to your real-world identity using KYC and automatically track every transaction above a certain amount.
Conclusion
It will be very interesting to see how this ESG rating will change over time for crypto. In fact, there are plans by BlackRock to start influencing the Bitcoin environment by investing in their own BTC mining infrastructure. I am interested to see how this will affect the value of BTC. One thing should be clear now, BTC is the future and it seems like it will not go anywhere any time soon.
Published by ga38jem on
Publish0x|LeoFinance|Steemit|read.cash
On 4th November 2021
Sources:
https://www.forbes.com/sites/georgkell/2018/07/11/the-remarkable-rise-of-esg/?sh=1af59c991695
https://www.forbes.com/sites/betsyatkins/2020/06/08/demystifying-esgits-history--current-status/?sh=d55a4f22cdd3
https://www.wsj.com/articles/energy-crisis-fossil-fuel-investment-renewables-gas-oil-prices-coal-wind-solar-hydro-power-grid-11634497531
https://www.msci.com/documents/1296102/25589897/Our+Only+Cryptocurrency+Episode.pdf
https://www.msci.com/www/blog-posts/creeping-crypto-cryptocurrency/02793697305
https://www.msci.com/our-solutions/esg-investing/esg-fund-ratings
https://www.blackrock.com/us/individual/larry-fink-ceo-letter
@ga38jem
