March 11, 2019
The crypto lending platform BlockFi is going live with their interest accounts for Bitcoin and Ethereum. BTC or ETH loaned BlockFi will generate a 6.2% APR, with the collateral being custodied by the Wikelvoss owned and NY-State regulated Gemini exchange. The BlockFi interest account is available worldwide and interest is paid in crypto.
This offer looks to be a great example for the innovative products available for crypto-assets. It’s a very much needed first-step towards making crypto the new normal. While interest is only available for a minimum collateral of 1 BTC or 25 ETH an interest paying saving account is what will drive adoption in the real world. While bank accounts in Germany charge negative interest for savings great than, savers around the world are looking for opportunities to lock their cash and secure against central bank inflation targets of 2-5%.
While BlockFi delivers a seemingly great product there are many questions left regarding the security of the collateral. BlockFi after all is a start-up operating in a high risk market (crypto & lending). It has yet to be made clear, what happens to the collateral if BlockFi’s loan business goes bad or the volatility of Bitcoin outmatches BlockFi’s risk management systems and the collateral is used for a margin call. Lastly, as Gemini is the custodian of the Bitcoin you’re exposed to the exchange risk, where a hack of Gemini will leave you without your private keys but empty wallets.
Having said that the risk are not entirely clear yet, I applaud BlockFi for bringing interest bearing crypto accounts to market. Whether or not they deserve the name of savings accounts is a question to be explored. Invest wisely!
March 4, 2019
The are roughly 15 months left until the next halving of the Bitcoin block reward. With the current development I think those few months will be huge:
- The weekly transaction volume on localbitcoins.com for Bitcoin has leveled-out around 50 Million USD per week, after a sharp increase and subsequent drop from the all-time high in 2017
Localbitcoins.com Transaction Volume in USD
With developing and emerging economies leading the charge, Bitcoin finds usefulness where its most immediate. Hyper-inflated Venezuela is leading the charge, where citizens flee into Bitcoin as a store of value. The worlds leading economy transacts at least 5 Million USD worth of Bitcoin on localbitcoins alone. The transaction volume on localbitcoins is an important metric because it is the largest over-the-counter exchange for local currencies for bitcoin worldwide and by definiton of person to person trading offers more privacy and security through its escrow system. It is the simplest and most accessible entry into the digital age of currency and offers plebs around the world an alternative to government regulated money without intrinsic value.
JP Morgan Chase, the largest bank in the U.S., is creating a blockchain based coin. Previously JP Morgan CEO touted that Bitcoin had no value and a terrible investment. Now JP Morgan is leveraging similar technology to try and print their own currency. While JP Morgans choice for doing so is probably a nefarious one, it goes to show that there is utility and value in Bitcoin if a multi-billion company like JP Morgan tries to copy its playbook for its own riches.
Facebook, the biggest social network in the world, who also owns the leading media platforms WhatsApp and Instagram, is going to issue its own token in 2019. Whatever the #zuckcoin is supposed to be, it’s another endorsement and free marketing for the No.1 cryptocurrency, according to market cap and clout, Bitcoin. This endorsement will reach 2.7 billion people across the messenger app, WhatsApp and Instagram. There are other social networks trying to roll-out their coins this year as highlighted in a recent New York times piece, and will add fuel to the fire started and lit by Bitcoin.
Twitter is where the news networks get their news, and by extension of its CEO Jack Dorsey his other company Square, its betting on Bitcoin and the Lightning network for the longterm. Square is already selling Bitcoins to its US-customers, and Dorsey has hinted at the integration of the lightning fast Bitcoin transactions directly integrated into Bitcoin.
The moment Bitcoin becomes an integral part of Twitter, newsmaker and -breaker all over the world will be exposed to a new economic model in their pockets, enabling them to monetize themselves and their news privately and independently. Think of free speech money at an order of magnitude.
The guy who arguably built the most successful electric car company of our times, has ‘privately’ sent rockets to the ISS and smokes weed live on camera also owns Bitcoin and thinks it will be the native currency of the internet. The internet is already in everyones hands and makes it way into everything around us. If Bitcoin is the native currency of everything, its going to be the worlds reserve currency.
If 2018 wasn’t already the year of financial institutions getting into Bitcoin, they will definitely take positions in 2019. Fidelity (USD 2.5 Trillion AUM), Intercontinental Exchange, the parent company of the NYSE, Chicago Mercantile Exchange, Deutsche Boerse, pension funds (USD 20 Trillion AUM worldwide) are all getting or are already on-board with Bitcoin. Plus, we will most likely see the first Bitcoin ETF launch this year, bringing easy custody solutions to investors.
The Lightning Network is growing at ‘lightning speed’. Bitcoins solution for fast and cost-efficient transactions is growing by +15% in capacity each month. There are now around 7,000 Lightning Nodes with a capacity of 750 BTC. Lightning is the fastest growing ‘dAPP’ in the cryptosphere and will enable commercial adoption of Bitcoin and on-boarding of the next wave of HODLers.
Periphery products like ABRA and even an improved Ethereum with its popular decentralized-financial solutions will introduce people to the powers of cryptocurrencies and increase adoption of Bitcoin as a store-of-value.
February 15, 2019
The Buttcoin Standard: the problem with Bitcoin
A critical opinion piece on Bitcoin by the author of the book “Attack of the 50 foot blockchain”, (David Gerard)[https://twitter.com/davidgerard] published on the very fine Block Crypto.
Facebook makes first Blockchain Aquisition with Chainspace
Facebooks blockchain team is expanded through a acqui-hire of the blockchain startup Chainspace. I’m sure Zuck’ is going to mess up his expansion into the space of peer-to-peer, digital cash by NOT building on Bitcoin.
ABRA wallet introduces Bitcoin investment option for stocks & ETFs
I wrote about this news here.
Zcash bug could have been used to create tokens
While Bitcoins slogan is “Don’t Trust. Verify.”, the centralized token Zcash will now have to ask it’s users to “Please Trust Us. ’Cause We Can’t Verify.”
How Zcoin’s privacy technology compares to the competition
While researching more on the security of so-called privacy coins, I found this great overview on the Zcoin website.
Bitcoin’s taproot privacy tech is ready
Bitcoin’s development is not noisy, but the Bitcoin core devs are also hard at work on privacy features.
Saving fee markets with second-price auctions
One of the biggest remaining questions with Bitcoin, as the BIS has pointed out, is the fee market for transactions once block-rewards are halved to insignificance. The Block reports some possible solutions.
The Block’s list of crypto research tools and researches
A good list of tools to bookmark for yourself when diving deeper down the crypto rabbit hole.
Bitcoin is a hedge against the cashless society
This article doesn’t present a great case for Bitcoin, due to it’s transparent forever-storage of transactional data, but it highlights why (digital) cash will persist in the information age. On a side note, living in China, I find the nightmarish scenarios on Chinese surveillance exaggerated and not well documented. There’s more hearsay about Chinese policies than sources.
The case for electronic cash
This article by the great Hasu drives home the point why Bitcoin is your digital cash of the future.
The state of Ethereum 2.0
Some interesting insights into the inner-workings of Ethereum.
Circle Research 2018 Crypto Retrospective report
Quickly get up to speed or recap the state of crypto with this easy to read presentation.
February 14, 2019
Yesterday MARC released their MVP which left my rather unimpressed and led me to reduce take profits and reduce my position by 80%.
I jumped on to MARC while the coin was dumped from its initial ICO price to 4.000 Satoshis and had a coin emission of 1.200% APR in mid-December. Since my purchase the coin has seen a daily peak at 15.000 Satoshi, during which time I had been able to reinvest my masternode dividends and increase my stake from 1 masternode to 5 masternodes with 1.000 coins collateral each. I’ve taking some profits since the positive price trend reversed while I was waiting for the major roadmap goals to materialize.
The MVP of the arbitraging platform yesterday is disappointing in two ways.
The platform UI is bad and won’t drive utility/demand for MARC.
Minimum investment is 1.000 MARC with profits of 72% APR paid out in MARC.
While my second point sounds not too bad at first glance, simply holding a MARC masternode currently still yields MARC coins at 640% APR. It’s simply irrational to invest via the MARC arbitraging platform at this time with coin emissions exceeding the profits multi-fold. Plus, the coin emission continues to pressure the price for MARC coins on the exchanges.
Lastly, the MVP is so unimpressive that I doubt there is real arbitrage trading going on in the background. I suspect the minimum investment is simply used to start up a MARC masternode in the background, fill the pockets of the developers with their own coins, and pay a meager dividend to the investors.
Thus, yesterday I’ve sold 4 of my 5 masternodes at market price of around 6.000 Satoshi. I’m keeping 1 masternode shared with an investor of mine to account for a possible upside of the coin. For the time being, I will compound my dividends from this masternode, instead of selling them daily, unless a major price dip of more than 35% daily should occur.
More difficult at this time is to find a promising investment opportunity, but I have my eyes set on some dividend yielding masternode coins like Trittium, Altbet, SafeInsure, Polis and Blacer. At the same time I’m evaluating an entry into the coins mentioned on my coin radar 1 & 2.
February 13, 2019
For the first time people around the world, including countries like China, Venezuela and Russia, will be able to hold a Swiss bank account in their pockets. With this account they will be able to access global stock and indice markets. They will be able to micro-invest in NASDAQ listed Apple stocks, buy the EURO STOXX 50 ETF and expose themselves to China and buy Moutai Kweichow stocks from the Shanghai Composite exchange. Anyone can also hedge their local hyper-inflated currency against the USD or EUR without asking their government or bank for permission.
All of the above is enabled via Bitcoin, or more precisely BTC collateralized debt. The solution provided by ABRA is similar to a contract-for-differences CFD stored and executed on the Bitcoin ledger. All assets on ABRA are synthetic assets, simulating the return of the actual investment, by means of options and securities, rather than a single conventional investment purchase. The underlying security for these CFDs is always Bitcoin. Thus, all differences in the assets value over time will be settled automatically via smart-contracts and in cash. Here, cash meaning digital and permissionless Bitcoin.
ABRA and Bitcoin will effectively enable:
- Open access to conventionally hard to reach markets
- Level access to investment opportunities for everyone with access to a internet-enabled smartphone.
- Exposure to Bitcoin with a hedge.
- Private and unregulated control over your capital without ABRA or the asset issuer even knowing who you are.
- Security of your capital locked in Bitcoin smart contracts that nobody can touch until you decide to settle it.
Currencies, Stocks and ETFs via Bitcoin on ABRA offer ultimate privacy and ultimate control. For me, this is the future of personal banking. Building on Bitcoin means that no government is able to stop ABRA from delivering the bank in your pocket, effectively leveling investment opportunities on a global scale. In the same way that the internet leveled access to information, ABRA levels access to monies. A global digital financial infrastructure that, for people who don’t understand Bitcoin, is the best gateway into collateralized digital securities, without the risk of actually holding Bitcoin. With ABRA, all of the users effectively become Bitcoin hodlers, even though they’re only exposed to the price fluctuations of the specific assets held in their ABRA portfolios.
For Bitcoin hodlers this is good news too. If ABRA is succesful and collateralizes every single asset on the global stock markets, there won’t be enough Bitcoin to underly all these investments with Bitcoin. The price of Bitcoin would have to go up consequently. The total value of all of the assets held by ABRA users through the app becomes part of Bitcoin’s overall market cap.
For the future, ABRA is even planning to turn the ABRA app on your phone into a lightning network node, ensuring the transaction fees occurring when settling in Bitcoin remain economically.
The biggest caveat to all this financial revolution is that an element of trust is required in the meantime. Investors have to trust that ABRA effectively hedges their risk exposure. ABRA has a sound track record of this so far, settling close to a billion dollars in transaction volume in over 100 countries during last year’s Bitcoin decline of 85%. “We didn’t break a sweat.” said former Netscape founder and CEO of ABRA Bill Barhydt in an interview on the What Bitcoin Did podcast.
February 12, 2019
Over the weekend the price of my MARC coins dropped from 10.000 Satoshi by about 35% to 6.500 Satoshi. As I was on Chinese New Year’s holiday I didn’t take note of the dump, until it had already happened. Back in the office I looked at what happened to the price and could be the reason.
An attentive trader mentioned on Discord that the price was being manipulated by trading bots, exploiting the the average Joe’s laziness of looking into the exchanges order book and selling right into the bots bids and asks.
“Looking at the MARC market on Crypto-Bridge via the bitshares explorer, two bots (cryptobridge-marketmaker and kaldera56) are really driving the price down. Legitimate sellers are dumping into their buy orders. The bot immediately puts a sell order on the coins it just bought and puts in another buy order lower than the one before. […] Look at all of cryptobridge-marketmaker orders on both sides of the order book.”
cryptobridge orderbook via bitshares explorer
Naturally I went and looked at the orderbook myself and saw the pattern unfolding in front of me, and tried to fight the machines. As the bots were only dealing with minuscule amounts of 0.3 MARC, roughly $ 0.06, per order it was a fight which didn’t involve too much financial risk. I bought all the tiny sell-orders up and bought into the next limit order sell-wall so that the market price shown on the exchange would jump up. I didn’t never sold into the bots sales orders. Well, at least not until I had driven the bid price up again by roughly 20% or 1.200 Satoshi per coin.
To reward myself for bringing up the price the nicely I finally rewarded myself by selling of around 600 MARC at a mean price of 7.000 Satoshi. While I’m not keen on selling my position in MARC I was excited by my ability to move the market. After roughly 4 hours of pereptually clicking and buying tiny amounts of MARC from the bots I made about $200. Had I been selling my coins at the market price 4 hours earlier I would have made roughly $50 dollars less. While this approach is not necessary worth my time, it was fun and I am definitely going to look out for greater opportunities to move the market and profit from it.