Tuesday, November 21, 2017

Calling it the "Tether Top"

3 hours 20 minutes after my warning about Tether this morning, this happened:

Reddit version here.

Which led to this:

Though this announcement isn't exactly the level of implosion I was expecting, it smells and reeks of a cover up. A "hack" is very reminiscent of the Mt Gox story. As a reminder, Bitfinex got "hacked" in August 2016 and lost 120,000 BTCs. That was valued at $72m back then, but it's worth a whooping $960m now.

I was hoping for something bigger. Like Bitfinex freezing all BTC withdrawals and halting all USDT pairs, or something of that level. Would be nice if Bitconnect can implode together too, drain the swamp in 1 shot. But I guess that's another fantasy for another day.

Anyway the days are long and crypto days pass by even faster. I can totally see the situation getting worse in the near term.

As per my previous post, I advise the following:

1. Do not use Bitfinex.
2. Do not hold any Tethers. If you do, exchange them for something else.
3. Do not keep ANY funds on any exchanges that has USDT parings - they may suffer collateral damage.
4. Familiarize yourself with escape routes - cashing out / stable coins.

Although this doesn't prove that Tethers are worthless, I would say the red flags are everywhere. Proceed with extreme caution.

The BIGGEST risk in cryptos right now

It's not government regulations. (China failed)

It's not a mining revolt. (BCH and B2X failed)

It's not for being called a ponzi, fraud or a scam. (DBS CIO whateva his name is, Dimon, Buffet, etc etc etc)

It is the $600M USD giant white elephant in the middle of the entire freaking room named Tether.

Tether is a crypto representation of 1 USD stored in a Taiwanese bank account. Supposedly. There has been no audit on their assets.

Tether is NOT claimable for actual USD. Their website does not allow you to exchange Tethers for USD.

Tether started out 2017 as a $10M problem. It is now a $674M problem, and growing.

If you do want to know more about this whole Tether conspiracy (it's looking more and more like the obvious reality though), check out this Twitter account and all of his tweets to learn more.

How are Tethers created? Beats me.
How are Tethers redeemed? I have never come across anyone that has actually redeemed it.
Have people tried to redeem Tethers? Yes, many, but no one has successfully done so.

It is extremely likely that these supposedly backed and redeemable coins are actually, in fact, NOT backed by USD and also NOT redeemable for USD.

Whether Bitfinex and Tether blow up today or tomorrow or never, it's anyone's guess.

If crypto has a stablecoin that has enough cross pairs for people to trade into BEFORE the blow-up, I think crypto world will not be rocked so hard.

If crypto does not have a stablecoin, I think we can see a pretty nasty bear market til the death count can be accurately accounted for.

Stablecoin projects like Maker's Sai / Dai and DigixDAO's DGX cannot be needed any sooner.

What am I doing to mitigate the risks?
- No more usage of Bitfinex
- Avoid Tethers like the plague
- Quick trades and cleans sweep of exchange accounts with USDT pairs
- Familiarize and set-up myself to be ready to make use of crypto stablecoins when they launch

I have no idea how it ends, but I think the evidence is clearly pointing that a blow up is inevitable.

Sunday, November 19, 2017

19 Nov 2017 Crypto Thoughts

Just gonna plop out some mental crap that has been clogging up my brain's mempool for a while. Hope anyone picking my thoughts can pick up something interesting.

Bitcoin is a trustless, uncenorable way to transfer payment information and balances.
Ethereum is a trustless, uncenorable way to transfer all types of information, INCLUDING payment information and balances.

Monero is what normal people think Bitcoin is.
Monero is what shady people that use Bitcoin need to actually use instead.

Banning cryptocurrencies because it can be used for money laundering is like banning the internet because terrorists can send each other emails.

People used horses for thousands of years, until the car.
People used paper money for hundreds of years, until cryptocurrency.

Tokens that are securities are one of the easiest and best use cases of blockchain.
Securities (shares, bonds, etc) WILL be tokenized and will be legal.

Token holders may NOT have any legal recourse NOW, but that WILL change with the tokenization and securitization of everything.

Classifying all different types of tokens as the same thing is like classifying all modes of transport as the same thing. Cars and donkeys are different, much like many types of tokens are different from each other.

Once there are clear legal frameworks for tokenized securities, the majority of tokens will be clear-cut, straight-up crypto versions of shares trading on stock markets now. (profit sharing + voting)

Project Ubin mentioned blockchaining bonds and settling payments - clear and straight forward use case.

95% of all crypto will end up being *close to* worthless. Blockchains don't die easily, but their value and usage do.

Market cap is a very very fragile metric. Give me a few thousand dollars and I can move the market cap of some coins by several million dollars.

People betting on alts hoping for it to become the "next Ethereum" are smoking some crazy shit.
Same as the people betting on alts hoping for it to become the "next Bitcoin".
Bitcoin and Ethereum already exists, why do you need the "next" one?
(For clarification, I am referring to overall development and community, not price speculation. There is obviously more profit percentage-wise to be made gambling on small alts.)

Many traders are looking only at upsides and ignore the downsides.

Many traders have never even used or sent crypto on its blockchain - they have only traded it on centralized exchanges

Many traders are going to end up holding extremely heavy bags of quickly becoming worthless alts, using Noble logic - "it has dropped so low, it can't possibly get any lower, can it?".

Many utility-only tokens will end up being worthless.

Many of those projects MUST screw over their token investors and choose to accept ETH as payment in order to survive.

Or else they must partner up with someone that can offer services along the likes of Kyber to instantly accept ETH from users and get it converted to their utility tokens to be used natively. Either way, the value of those utility tokens will be very much muted due to there being no intrinsic value of holding the tokens, since it would be preferable to just purchase the required tokens on the spot, as per demand and usage dictates.

Proof of Stake will likely be the new "proof" model of the future.

That said, Proof of Work will not die easily.

It makes much more sense in 95% of scenarios to just buy the coin instead of mining the coin.

Ethereum's success will be determined by how it reacts to new and objectively more technologically advanced blockchains, and retain and incentivize developer talents, and general adoption of its blockchain (both public and private).

If Ethereum can manage to fend of newer blockchains until sharding goes live successfully, they would have won the decentralized application race for the foreseeable short term future.

Proof of Stake + Sharding will create MASSIVE global FOMO of "investing" in crypto-currencies and could be one of the things that fuels real, mainstream adoption and gets widespread usage.

Cryptocurrencies will spark a "renaissance", where the new generation questions the need, trust, reliability of all 3rd party institutions and roles in both commerce and society. Corruption will be highly scrutinized.

Adoption of crypto will also spark the general public demanding that central banks and government run monetary policy better as parallels with unlimited fiat money vs deflationary cryptos are drawn and understood.

Mass adoption is still extremely far away.
Most people have only heard of Bitcoin. Almost none can name more than 3 other cryptos.
Of those that own cryptos, many are only lightly invested, "testing" out the market.
Of those that own and trade cryptos, many don't even know what their crypto is used for, other than speculation on price.
Institutional money has almost no legitimate way to get exposure into this new "asset class".
General public understanding of crypto is close to zero.
General public WANTING to understand crypto is even closer to zero.

We are STILL in the early adoption phase.
Prices WILL flop around like a fish on land.
People who are now owning the 5% of crypto that survives the next several years of culling, will be the new class of wealthy.

These are just my views on cryptos at this point of time. Lots of things can change on a dime, and I am learning new things every single day.

Crypto life, best life.

Thursday, November 16, 2017

Project Ubin Phase 2: MAS and 11 Banks working on Crypto, I shit you not

There will always be disbelievers, but I am not fazed.

Here is the MAS media release regarding open sourcing the Project Ubin Phase 2 findings, and here is the full PDF report.

MAS even has a page for Project Ubin.

Anyway, here are 2 screenshots of things I wanted to point out:

Page 52: "Future phases of Proj Ubin could focus on a decentralized bonds payments system, which could be supported by MAS and the participant banks with execution driven by SGX. This could delivery a more efficient fixed income securities trading and settlement cycle through DLT."

Didn't I say that securities are one of the lowest hanging fruits, along with value transfers?

Questions? What is DLT? Answered here, along with why a national currency will never be issued on a public blockchain, but more likely on a private blockchain compatible with public chain communication.

What's the price of Ethereum today? $328 USD
Last week? $310 USD
Ooo, 1 week 6% gains.

Anyway, I'm already in. I don't need to be sold.

I'm just fanning the flames of FOMO for everyone else.

But sure, continue thinking it's a fraud and a bubble. I don't make any money convincing people to read and learn more about all of this.

Monday, November 13, 2017

Warning: Browser Mining Experimentation

Dear all,

I would like to announce that I am experimenting with browser mining.

What is browser mining?

Well, when you surf around my blog, a "miner" will use up a fraction of your computer's computing power to help calculate some operations.

No worries, I have limited the mining to only 2 threads and only 30%, so if you're running a decent computer, you shouldn't even notice it!

Our course, I am mining cryptocurrency.

For those curious, I am mining Monero (XMR), which is one of the few cryptocurrencies that can still be mined using regular computers, without a huge handicap compared to specialized mining machines or expensive graphic cards. Monero is one of the few cryptocurrencies which I am very bullish about.

It's just a fun experiment for me to try out.

Leave me comments if you notice that the site is laggy when you are browsing and I'll try and tweak some settings.