Cryptocurrency Drama (Part 3)

Behold, the penultimate instalment in my first and only play! It’s brilliant so far, isn’t it?

In case you missed part’s 1 and 2, you’d better catch up here: (or else you will be totally lost!)

Enjoy!

See you tomorrow for the thrilling conclusion to this drama!

Scene 2

The is a knock on the door. The Director of Automated Networks opens it to reveal Bit Brain standing in the doorway.

DIRECTOR of AUTOMATED NETWORKS
Please, step inside and have a seat Mr Brain!

BB enters and shakes the extended hand of the DAN. They both take a seat.

DIRECTOR of AUTOMATED NETWORKS
Ernie tells me that you wish to discuss something with me?

BB
Thank you Mr Director. Yes, I would.

DAN
I’m guessing that this has to do with your insufficient CPU preventing you from carrying out transactions on our shopping network?

You do realise that this is just temporary right? A month from now the REX lending contracts will expire and things will probably return to normal. Probably. Until then we get to demonstrate how much traffic our network can handle from the EIDOS box; it’s a good thing. Also our franchise will soon upgrade to our optimised “Version 2.0”, that will make us even more efficient!

BB
Well, I suppose that the CPU issue inspired me to be here, but that’s not really why I asked to see you.

DAN
Then I am curious Mr Brain, why are you here?

BB
I am here because I’m concerned Mr Director. I’m concerned because your store is experiencing a rather severe issue, and all anybody says about it is that “it’s a good thing”. Mr Director, I am concerned because you and your supporters are in denial! I haven’t seen this much denial since that German guy said he was going to open a bar that specialises in selling carrot juice; I still can’t believe that so many of the Carrot Bar’s investors were in denial about that scam!

Mr Director, thousands of shoppers can’t shop here at the moment, and you just don’t seem to care because the richest ones still can!  Don’t you see how bad that looks?

DAN
Mr Brain, I think you’re blowing this out of proportion. Anyone who puts enough money into our CPU can still use the system, I don’t see the problem.

BB
I can appreciate that. Can you appreciate that many users can’t afford that? Do you have any idea what it’s like to be in there shoes? My memory is a little fuzzy on this point, remind me again just how much investment capital you attracted when you started up this business?

DAN
Yes, yes, we broke records when we started this business, but that’s not my money, that money belongs to the business.

BB
Yet the board of directors controls it. You get to say how and when it is used. You would never know what it is like to be stuck with only a single unit of credit on your CPU card, because that isn’t a reality that any of you have ever had to experience. But that is a reality that thousands of us customers experience right now, and Mr Director, we can not use your shopping network!

DAN
But can’t you see? The system is working as it should. That is what decentralisation is all about! He who puts the most into the scheme, gets the most benefit from the scheme.

BB
That’s fine, I think we can all accept that. But many of us were led to believe that we had already put sufficient money into the scheme, only to now be told that we will have to invest far more if we want to enjoy predictable, regular access to it! That’s not fair Mr Director! You need to address the problem of EIDOS denying resources to the majority of the network. You need to address the exploitation of your system!

DAN
We don’t see it that way. This is a good thing. There is no problem here.

BB
Damn it Mr Director! Can’t you see that I’m trying to help you guys? Can’t you see that having a whole lot of people who can’t access your network, despite having CPUs, is a big problem? Don’t you appreciate that people don’t want to wait a month to be able to make a transaction? Can’t you understand that nobody wants to create a start-up business as part of your franchise if their customers won’t be able to access their services?

Yesterday I ran into a new guy in town, he says he is the newly appointed District Apothecary. He wants to move into one of the abandoned buildings and start his own District Apothecary service – his DApp,
but he is afraid of the start-up costs. In the past I may have sent him here, to you guys, but now I would never do that to him. Instead I am going to suggest that he joins Ned from across the road and becomes part of his
franchise.

You see Mr Director, your mentality is becoming dangerously elitist, your store no longer cares about serving the man on the street, as long as it can serve a rich happy few, or those who are willing to exploit the system. That’s not right Mr Director, that’s not why we moved out here to the frontier! We are supposed to be moving away from systems like that, we are supposed to be creating fair systems for all! Sure the rich can enjoy benefits, but don’t shut the poor out of the network altogether!

DAN
That’s not our objective Mr Brain, we are neither anti-poor, nor pro-rich, we’re just decentralised.

BB
Don’t you worry about your franchisees? Don’t you worry that they will lose business after having placed their faith in you?

DAN
Our franchisees can create systems whereby they loan their own CPU to their customers, allowing them to continue to use our network of services.

BB
But surely some customers will exploit that to the detriment of others? That sounds like quite a complex undertaking for a start-up business to have to deal with; one which will require a potentially complex solution.

DAN
That’s true. But give it time.

BB
That could be more time and money than what people trying to create a DApp or something similar can afford…

Mr Director, as long as you can’t even admit that there is a problem, you can’t begin to address the problem. You know as well as I do that your franchise is hardly decentralised, the majority of resources and control sits right up at the top here with you! That’s fine, but then use it wisely! You need to address this issue! If you do not, then it will have repercussions for your business! Please just admit that there is a problem so that the problem can be tackled! The frontier is a new place, people accept that mistakes are being made, but in order to retain their confidence and respect you need to be honest with the people! Being realistic, open and honest attracts community support, that’s much better than sitting with disillusioned customers!

DAN
I’m sorry you see it that way Mr Brain. We see no issue. I tell you again, this is a good thing.

BB
Well I’m sorry too Mr Director. I tried to show you an impartial reality, but there are none so blind as those who will not see.

Exit Bit Brain

Two Minute Crypto – Deciphering China’s Blockchain Play – Part 1 of 5

Please click the link below to listen to the 62nd episode of my weekly crypto podcast ‘Two Minute Crypto.’ These are intended to be short, single-topic ramblings on some aspect of the cryptosphere. Consider dropping a like and or a review on iTunes or Podbean if you enjoy the podcast. Comments and critiques welcome.



External Podcast Links

https://podcasts.apple.com/au/podcast/two-minute-crypto-deciphering-chinas-blockchain-play/id1441492450?i=1000456679512

or

https://www.podbean.com/eu/pb-nethg-c74668


Transcript

Deciphering
China’s Blockchain Play – Part 1 of 5

The real division is not between conservatives and revolutionaries but between authoritarians and libertarians.

― George Orwell

Welcome to Two Minute Crypto. This instalment sees the
start of a 5-part series examining China’s recent shift in its public stance towards
blockchain.

  • Part 1 Focuses on the rationale
    driving this apparent change.
  • Part 2 Outlines why, in particular,
    this is good for Bitcoin.
  • Part 3 Examines the long-term outlook
    for China-based blockchain projects.
  • Part 4 Discusses the wider
    implications of China’s involvement in blockchain development and
    implementation.
  • Part 5 Outlines the opportunities and
    risks that now present themselves to crypto investors.

Why blockchain and Why now?

On October 25TH President Xi publicly
stated China’s desire to lead the world in both blockchain development and
implementation. His endorsement was both broad and enthusiastic. In the following
days and weeks, local authorities and media cemented this embrace of blockchain
with the release of instructional blockchain materials, further endorsement by
central bank officials, the suppression of anti-blockchain threads on social
media, and the removal of crypto mining from the list of activities the ruling
party would like to see eliminated.

In one sense, the move to portraying blockchain in a
more positive light is very easily explained. The Central Bank of China (CBC)
have long announced their plans to roll-out a state-controlled cryptocurrency.
Clearly cleaning up the image of blockchain is an important prerequisite before
introducing this system.

However, at a deeper level, China’s embrace of
blockchain can be understood and summed up with one word – control. Ruling
since 1949 the Communist Party of China (CPC) has but one core principle –
continued hegemony over the Chinese nation. Each and every policy is driven by
this directive. Blockchain is no exception. Indeed, blockchain is a godsend to
this authoritarian regime that already exhibits great control over most aspects
of society whether that be political, financial or social.

A centralized blockchain or series of blockchains will
facilitate the parties’ expansion ever deeper in the lives of its citizens. The
marriage of money to surveillance as facilitated by a unified blockchain
database of transactions will serve to substantially deepen its level of
control over the actions of the Chinese people. A state-issued cryptocurrency
will be monitored and permissioned – dissent already difficult will both be easier
to root out and of course, suppress.

Any domestically derived economic benefits of blockchain
are simply added value – it is first and foremost a tool of control. Doubtless,
China’s pending rollout of its Social Credit System will be intimately
integrated with blockchain. Rewards and penalties will be easy to track, administer
and iterate on. Granular control is the goal of every authoritarian regime and
time and again the CCP has demonstrated its enduring focus on remaining both in
power and in ever greater realized control. China’s homegrown and eminently
successful companies all tow the line. Data is not in any sense private and the
rights of the citizens are entirely subsumed by the ‘needs’ of the party.
We-Chat, Weibo, Tencent and so on serve to prop up the regime as they routinely
hand-over their customer’s data. It’s hard to overstate the extent to which
this data mining has aided the CPC in retaining its reins on power.

Public announcements of economic growth and pushing
the horizon for the sake of science are mere window-dressing to the
identifiable purpose of blockchain in the Chinese context -control and ever
more of it.

An understanding of the core philosophy that drives
the Chinese Communist Party (CPC) removes much of the mystery behind its stance
towards blockchain. Is it really any surprise at all the Bitcoin hasn’t been
similarly embraced and endorsed?

Next week will examine this clear Chinese government distinction
between blockchain and Bitcoin, highlighting the long-term positive this
provides for the distributed, decentralized network this is Bitcoin.

Thanks for listening.

XEM technical analysis

XEM seen from the temporality of 1W we can observe as the structure of candles is within range zone, which I have delimited by the light blue rectangle, the price has correctly tested the zone of demand in 1W located in the 0.00000437 forming a double floor pattern as a signal of reversal of trend, so we could find in the short term an upward impulse towards our first target of gain located in the 0.00000675, which is our first key zone to take into account for the next movement, if this happens we could find resistance in that zone and correct by means of a test of the high range located in the 0.00000555 to later continue to rise by our second objective of gains located within the range of the price of the 0.00000675 – 0.00000882.

XEM seen from the temporality of 1D we can observe more closely the current movement of candles where we see how the offer was accepted in the 0.00000555 after the escape of the minor figure that we see in the graph above indicated by the two diagonals dark blue color, this has caused the price to retreat into the area of demand where the structure has formed this double floor that should be a strong signal for the bulls to go for an upward movement towards our target located at 0.00000675, for this to happen we need the price in 1D to hold HL and find a strong impulse to buy into the high range of the rectangle, otherwise, the price could be oscillating even longer within this zone.

In conclusion, XEM shows an excellent chart with high bullish probabilities that has not yet been exploited within the bullish price flight in the BTC pairs that we have seen in other currencies during these days, therefore, in the short term we could see the price of this currency have a strong momentum, the current conditions are conducive to it, we just need the volume to see this possible scenario, otherwise, the price could continue to accumulate longer, therefore, I recommend to be very attentive to the action of the price in 1D to choose the best buy position and always remember to place their stop loss to avoid possible invalidations during the movement.

As I always say, you have to be aware of the movement, invalidations can occur, there is no 100% reliable analysis, take your own precautions when trading.

You can follow me on Twitter: https://twitter.com/armijogarcia

The Sunday Crypto Recap – Down the Rabbit Hole 54


Probably not a week that saw your portfolio increase in value. Bearish short-term outlook seems confirmed but the reasons to hold crypto remain as strong as ever. Having said that should the markets in general drop steeply (in the short to medium term) crypto will follow – better to be aware of this ‘reality’ and plan accordingly. It bears repeating – this is a long-term play – the cryptos that survive and eventually thrive will bring great reward to ‘early’ investors but this is over a multi-year horizon (closer to 2030 than 2020). If it’s life-changing wealth you pursue – only a realistic time frame will get you there.


Picks of the Week

Twitter this week was a literal treasure trove of crypto themes, narratives, analysis and discussions. Just a few examples being – Bitcoin as a religious journey, a critique of the stock to flow model, Altcoins as Oscillators or Degenerators, and a brief analysis of BTC where price equals difficulty.

In addition, this by Crypto Daily is essential viewing for those looking to understand the current ‘context’ of the cryptosphere.


Twitter

Nic Carter predicts looming regulatory clampdown – I tend to agree:
https://twitter.com/nic__carter/status/1105991062089142272

How to stifle BTC:
https://twitter.com/american_hodl/status/1188842258939793408

A brief rebuttal of the stock to flow model:
https://twitter.com/krugermacro/status/1191901268740132864

On Altcoins as ‘Oscillators or Degenerators’ (highly recommended):
https://twitter.com/woonomic/status/1192316072533229568

BTC price = difficulty?:
https://twitter.com/SGBarbour/status/1189416790419337216

Bitcoin as akin to a religious experience (highly recommended):
https://twitter.com/dergigi/status/1189608467029516289

On Binance and its current market advantage relative to newcomers:
https://twitter.com/gautamchhugani/status/1189513757736587264

1971 was a sea-change year:
https://twitter.com/HectorRosekrans/status/1189646706780098560

On crypto conferences:
https://twitter.com/MrMichaelNye/status/1192342577141276672


Articles

A comparative analysis of exchange token valuations (highly recommended):
https://cryptobriefing.com/comparative-price-analysis-exchange-tokens/

Refuting the theory that 2017’s price bubble was caused by a single player:
https://cointelegraph.com/news/3-reasons-why-one-trader-didnt-manipulate-bitcoin-price-to-20k

The ever-interesting Bit Brain on the onlook for Altcoins:
https://trybe.one/perspective-on-altcoins

Ray Dalio on why the present financial system has lost its way (highly recommended):
https://www.linkedin.com/pulse/world-has-gone-mad-system-broken-ray-dalio/

The origin of money by Nick Szabo (highly recommended):
https://nakamotoinstitute.org/shelling-out/


Podcast

A return to the stock to flow model of PlanB – even if are skeptical of the model there’s a wealth of pertinent material here(highly recommended):

https://podcasts.apple.com/au/podcast/slp122-planb-responses-to-the-s2f-model/id1415720320?i=1000455882683


YouTube

Undoubtedly Crypto Daily’s finest work to date -despite the light-hearted delivery this is a must-watch for folks with a long-term interest in crypto (highly recommended):


Discussing BTC’s supply/fee model (recommended):


A BTC prediction for 2020:


Colin continues his stellar work on EOS governance reform:


The Crypto Lark discusses Ray Dalio’s assessment of the current state of the financial system:


Infographics

Folks are still buying BTC:

https://twitter.com/matt_odell/status/1192205598793895940/photo/1


CME institutional futures have turned markedly bullish:

https://twitter.com/skewdotcom/status/1190722446334349313/photo/1


Website / Utility

Weeks of high-quality content here for the crypto enthusiast who wishes to look under the hood (highly recommended):

https://aantonop.com/videos/

While price may have disappointed – the space as an environment I which to learn certainly did not! As always, looking forward to your comments and suggestions.


Note on Sources:

Twitter & Reddit (cryptos current meta-brains) / Medium / Trybe / Hackernoon / Whaleshares / TIMM and so on/ YouTube / various podcasts and whatever else I stumble upon. The aim is a useful weekly aggregator of ideas rather than news. Though I try to keep the sources current – I’ll reference these articles and podcasts etc. as I encounter them – they may have been published just a couple of days ago or in some cases quite a bit earlier.


ONE technical analysis

ONE seen from the temporality of 1W we can observe how the price has realized a correct retest of the monthly support located in the 0.00511 where the price has found bullish impulse for the testing of the high range located in the 0.00610, we see how the price has formed within the smaller figure an upward triangle indicated in the chart above by the dark blue diagonal, if the price achieves the close above the weekly bid, the probabilities of a much larger bullish move are very high, our first profit target is located within the price range of 0.00814 – 0.00935, this target could be easily achievable once the price achieves the close above the resistance.

ONE seen from the temporality of 1D we can observe more closely the current movement of candles where we see a marked pattern of double floor as a signal of reversal of trend, as I mentioned in previous analysis, this is a pattern that many other USDT pairs are forming as a bullish signal of the last movement of BTC, in the chart above we can see the test that the price has made in the high range located at 0.00642, the price should find the necessary push for a continuation bullish within the zone of demand in 1D located within the price range of 0.00539 – 0.00580, indicated in the chart above by the light blue rectangle, for now we have a closing of the diagonal drop in 1D that we can observe through the diagonal dark blue, the price still does not make the test, so we must be very attentive in 4H.

In conclusion, ONE presents an excellent bullish movement after having found support at 0.00511, this has motivated the formation of a bullish pattern that should conclude with a continuation of the movement towards our first profit target located within the price range of 0.00814 – 0.00935, our second profit target is located within the price range of 0.01124 – 0.01212, for this to happen we need a weekly closing candle above 0.00610, therefore, I recommend to be very attentive to the price action in 1D to choose the best position and always remember to place your stop loss to avoid possible invalidations during the movement.

As I always say, you have to be aware of the movement, invalidations can occur, there is no 100% reliable analysis, take your own precautions when trading.

You can follow me on Twitter: https://twitter.com/armijogarcia

Two Minute Crypto – Not Your Keys, Not Your Crypto

Please click the link to listen to the 61st episode of my weekly crypto podcast ‘Two Minute Crypto.’ These are intended to be short, single-topic ramblings on some aspect of the cryptosphere. Consider dropping a like and or a review on iTunes or Podbean if you enjoy the podcast. Comments and critiques welcome.



https://podcasts.apple.com/au/podcast/two-minute-crypto-not-your-keys-not-your-crypto/id1441492450?i=1000456049632

or

https://www.podbean.com/eu/pb-ch4kh-c632f0


Transcript

Not Your Keys, Not Your Crypto

Welcome to Two Minute Crypto. This week’s episode examines the key concept of ownership or possession (the same thing) in the cryptocurrency space.

If you’ve spent any time at all focused on cryptocurrencies then you’ve very likely encountered the statement, ‘Not Your Keys, Not Your Crypto.’ However, this truth bears repeating, reflection and if necessary, action.

A Few Caveats

If you only have a small position in crypto amounting to less than 1% of your liquid net worth then parking it on an exchange doesn’t really matter.

In addition, if you are a frequent trader a certain percentage of your assets are inevitably going to be locked up in orders and open positions. Of course, if that’s more than roughly 10-15% of your trading account -you’re exposing yourself to unnecessary counter-party risk.

Also, if you are not currently tech-savvy enough to move your funds off an exchange – take some time, seek some help and move your crypto as soon as you are comfortable doing so (the sooner the better).

‘Not Your Keys, Not Your Crypto.’

Getting your hands on crypto is rarely easy, it is a friction-rich experience. There are many steps to take before you can even claim to own any cryptocurrency. Research, signing up to an exchange, going through KYC, learning to navigate an order book, setting up a wallet, backing up that wallet, sending your first transaction, trying not to freak out when you see the words ‘unconfirmed’ and on and on it goes.

Many people seem to make it only as far as an exchange. They buy but don’t take possession. While this takes some of the friction out of the user experience, it also critically undermines the whole appeal of crypto.
To be absolutely clear – the cryptocurrency on an exchange is not under your control – it is simply an IOU by a third party. The balances you see are entirely under their jurisdiction. Indeed, your very access to those balances is something they may choose to cut off if, and when, the exchange deems it in their own interest to do so.

At any time, their circumstances may change – they may go out of business, be hacked, simply exit scam you, or be shut-down by some regulatory authority. Were any of these to occur you are likely out of luck. Sure, large exchanges such as Binance and Coinbase are more robust than their lesser peers but the fundamental reality of the IOU nature of their relationship with their customers remains the same.

This helplessness is highly ironic given the incredible freedom possession of an asset like Bitcoin imparts. You are essentially forfeiting the trustless, uncensorable quality of BTC for what exactly….oh yeah the false comfort of a third party holding your asset for you…like a bank might do…except crypto exchanges are much more unstable than even their banking counterparts…here today, gone tomorrow.

Not your keys, Not your crypto. Not simply a slogan but a fact.

Thanks for listening.

Perspective on Altcoins

Today I would like to do a fun little exercise. Well, I think it’s fun because I’m a crypto lover. If you don’t like crypto, then you should probably stay well clear of my blog!

I spoke about the silliness of altcoin bashing last week, so I’m not going to delve into that again. Suffice to say: I believe in the cyclic nature of markets, and that altcoins will rise again. There ARE signs that that rise has started (meaning that altcoins have bottomed), but that has yet to be confirmed.

For today’s exercise I’m going to look at the following hypothetical situation:

Say I put $100 into the top 20 altcoins. What would they all be worth if they then got back to their All Time Highs?

I will be using the CoinGecko top 20. I know that most people prefer CMC, but I like the added functionality that CoinGecko offers. For example: with CoinGecko I can easily see how far each coin is from its All Time High (ATH).

From https://www.coingecko.com/en?view=all_time_high

Below is a table which I constructed to display those figures. Remember, in each case we are investing $100 at current prices, and then seeing what will happen if that coin gets back to its ATH.

1 BTC $214,59
2 ETH $800,00
3 XRP $1 162,79
4 BCH $1 315,79
5 USDT $132,28
6 LTC $613,50
7 EOS $694,44
8 BNB $194,17
9 BSV $199,20
10 XLM $1 265,82
11 ADA $2 857,14
12 TRX $1 219,51
13 XMR $862,07
14 LEO $200,80
15 OKB $168,07
16 LINK $168,92
17 HT $156,99
18 ATOM $206,19
19 NEO $1 785,71
20 IOTA $1 960,78

It’s true that one shouldn’t read too much into this: the playing field is not entirely level (for reasons such as some coins only being launched after the peak of the bull market). But what it does serve as is a semi-standardised benchmark indicator of potential ROI.

Yes, we all know that BTC is safer than altcoins, but I personally believe in chasing some higher potential ROI at the expense of a little more risk, and even a little bit of extreme ROI at the expense of massive risk. Note: being the top 20 coins, this table does not represent the “massive risk” section of the market – well….. that’s debatable, we’ll get back to that shortly.

Those are the numbers, the raw stats. Let’s now dig into them a little deeper:

At a mere $214.59 return on a $100 investment, BTC looks positively pedestrian when compared to the average – and it is. This is the entire point of investing in altcoins instead of in BTC, that and helping many small projects to become part of our everyday lives – thereby greatly enhancing them.

However, and this applies to all the coins, these returns are only to get back to ATH. They do not include further market growth beyond that point! Only the staunchest bears would believe that BTC has already reached its ultimate ATH. Another term for such people is “idiots who should be ignored”. As the ultimate crypto store of value, I believe that every portfolio should have BTC in it. I would consider 10-20% to be a good figure, though that is largely down to personal taste (and my own percentage is way outside that bracket at the moment!)

Moving lower down the table we see ETH returning $800. Wow, that’s really not a bad potential investment! Ethereum remains the biggest and most popular crypto platform by far, and it is really the only one with many high quality DApps already running on it. No, your 100 casino DApps on your favourite chain are not “high quality”. Even NEO – and you all know how much I love NEO – can boast only a small handful of good DApps at this stage. But Ethereum has hundreds of them, even if it is also packed full of trash coins which should, and probably will, die. The ETH team is also still very active and the platform continues to be developed, albeit that it misses target dates almost as badly as Cardano does! 😄 In summary, Ether is a fairly secure investment with possibly much higher returns than what BTC can offer.

You all know my feelings on Ripple. I mean XRP. I mean Ripple. Apparently XRP is Ripple when Ripple does good things such as forming major partnerships; but XRP is not Ripple when Ripple is criticised for e.g. being centralised or being a company full of ex-bankers. Oh how I hate Ripple and everything it stands for! BUT: like most dodgy investments, Ripple still has a LOT of support. I do not doubt that Ripple will once again see very good returns when the market runs. However, I could never condone investing in such centralised, anti-Satoshi rubbish – so if you want to hold Ripple, then you will be doing so without my support! The returns you may get on Ripple are better than those of ETH, but I would chose to put my money on ETH instead!

BCH and LTC remain viable alternatives to BTC, especially for smaller transactions. I believe that there is a strong future for such coins, a future in which BTC is the store of value, and such coins (you can add DASH, NANO etc to the mix) become the de facto mediums of exchange. It is interesting that BCH offers far higher returns than LTC when looking at their respective ATHs. I surmise that this may be because people once perceived BCH as possible legitimate competition for BTC, whereas LTC was only ever a coin that worked alongside BTC. The two coins are pretty even in my eyes.

Note Tether sitting between BCH and LTC, with a possible return of $132.28! I find that rather amusing! 😆

At $694.44 EOS is not looking as good as ETH. This should serve as a mild warning to EOS investors. I have long said that EOS is good, but over-hyped. I stand by that statement.

At $194.17, BNB is deceptive. As far as exchanges go, Binance is by far the most well known. Crucially, its ROI to ATH is less than that of BTC, which on its own should make the decision to buy BTC instead of BNB a simple one. But BNB is a special case, and I caution against writing it off. While my favourite exchange is KuCoin (and its KCS token), I can not ignore the fact that Binance is also launching programs, projects and platforms left, right and centre. It’s very popular and I have great faith in its CEO. CZ has a brilliant mind and a comprehensive understanding of blockchain technology, business principles, international affairs and also a general sense of what a powerful agent of positive change cryptocurrencies can become.

I assess that if any blockchain company can become the next “Amazon”, “Google” or “Microsoft”, then Binance has the best chance of being that company. It is even possible that as other cryptocurrencies grow, so Binance may one day pass even BTC in terms of market cap! Don’t laugh, just think about it…

BSV is a joke, as is Mr I-did-not-pay-now-I’m-back-in-court Faketoshi. It is sad that such people even exist, they are an ugly scar on the beautiful face of crypto. ‘Nuff said.

Of the top 10 coins, XLM offers the second best potential returns (after BCH) on its climb back to ATH. Personally I consider it a little over-valued, but I far prefer it to its greatly overvalued and far more dodgy cousin XRP.

With the best potential returns of the lot (an incredible $2857.14 for a $100 investment) ADA does look like a prime choice! However, I urge you to remember what I have often said: that US investors are too fixated on US crypto in general, and also that ADA is way behind where it should be: many promises, no deliveries. Other platform coins have since moved far past it, even if market cap has yet to catch up to that fact.

At $1219.51 for $100, TRX is looking strong! It’s not that high up that you would expect it to fall down the market cap ladder, the potential returns look good and Tron is a good product. True, like most of the platforms, it also lacks a large number of good DApps – but those will probably come with time. Justin Sun is a dynamic young entrepreneur with enviable levels of charisma, I think there is a high chance that he will lead Tron to success.

XMR has been quiet lately, which is not always a good sign. But I still see Riccardo Spagni on every episode of “Magical Crypto Friends” and he still seems enthusiastic. While they still have issues to iron out, Monero remains the biggest name in privacy coins, and that is NOT something to ignore! A potential return of $862,07 to ATH is only slightly better than that of ETH, but one could argue strongly in favour of privacy coins, based on the way that crypto regulations are going. With exchanges blocking ZCash (which I no longer endorse), it is clear that privacy coins are a threat to the financial centres of the world. If they do succeed, then XMR may well be the most successful of them all.

LEO has a relatively low potential return (very similar to that of BTC), easily explained because it is so new. However, it is the coin of BitFinex, and I have no love for that exchange. I’m still waiting for the whole dodgy BitFinex/Tether monster to come tumbling down. I’m happy to have closed my account there a long time ago, and I have no intention of having anything further to do with that exchange. I suggest avoiding it.

OKB is the coin of another big exchange, though honestly it isn’t one of my favourites and there are other exchange coins which I would much rather hold. There’s nothing inherently wrong with it though, and like LEO, its price is not reflective of it’s potential, because it was only launched after the demise of the 2017/18 bull run.

To an impartial outside observer, the LINK figure of $168.92 should be very troubling! I keep saying that LINK is way too hyped at the moment. It’s possibly the most over-hyped cryptocurrency of all (at the moment). LINK is not a new coin and it’s not even a special coin in any way. Investors should be very worried that it is hovering so close to its ATH figure. I like LINK, but I would NOT buy it now!

HT is almost identical to OKB for the purpose of this post. I wouldn’t put money there.

ATOM has low returns back up to ATH. But Cosmos has been around since 2014 so it… wait. What’s that you say? Cosmos is a new coin? Oh yes, you’re right. Cosmos is a 2019 coin which (to me) looks remarkably similar to Blocknet (BLOCK) – a coin which has been around since 2014. Why is that relevant? Because BLOCK has a market cap that is more than 130 times smaller than that of very similar Cosmos. What does that mean? It means that ATOM is all new coin hype. No thanks.

NEO’s looking solid with a potential return of $1785.71 for its $100. It’s well known how much I love NEO, and with the current blockchain developments in China (which I have been predicting since the China FUD in 2017), I love it more than ever.

IOTA is a dark (and largely forgotten) horse, sitting at the bottom of the list, but with a figure of $1960.78 per $100 should it make it back to ATH. That’s the second highest in the table, and should not be ignored. I know there have been some criticisms of it, but I honestly haven’t looked deep enough into IOTA lately to know if they are valid or not. As with everything in crypto – you should do your own research.

Conclusion

I believe that good altcoins (note: GOOD altcoins) stand to provide much better returns than Bitcoin will in the near future. Of course with the chance of greater returns comes greater risk. How much risk you are willing to expose yourself to will depend largely on your investing style and current financial situation – I recommend being safe rather than sorry. Having said that, the mere fact that somebody chooses to invest in crypto indicates that they probably have a pioneering spirit (it’s still early days for crypto) and personally I already see BTC as a minor “risk”. If BTC works, then it’s logical that altcoins should work too, thus I invest a decent amount of money in them. As of yesterday, 43.2% of my crypto portfolio is in Bitcoin, which is actually almost the highest percentage it has ever been, a consequence of me holding my alts through the bear market.

I continue to invest slowly and carefully, some in BTC, some in altcoins (though I also keep missing the dips!). In the long-term I believe that altcoin investors will be richly rewarded, and I will continue to invest accordingly. Remember that the table above only deals with the top 20, there are many more coins out there. I suggest that people do their best to make decisions based on facts as opposed to emotional attachment. Crypto is often a sentiment game, but sentiment can’t keep a coin going indefinitely.

Yours in crypto

Bit Brain

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

Bit Brain recommends:

Crypto Exchanges:




The Sunday Crypto Recap – Down the Rabbit Hole 53


Last week’s price action was a bit of a tease though trading volumes have remained somewhat elevated. Price lacks direction but sentiment has shifted bullish. All that’s required is another catalyst. Whether that transpires or not in the near term is, of course, impossible to know. However, China’s apparent embrace of blockchain has certainly ignited the crypto space with many a competing narrative hashing it out on Twitter and beyond.

My own take – this is all good for Bitcoin as centralized blockchain(s) can only ever be good for the real thing. It’s likely bearish for Chinese projects that aspire to be decentralized though bullish in the short-term for most China-based crypto. In the long term (a few years out), bearish for local projects barring the select few who ultimately receive government backing.

As to China’s intent – this is never in doubt – control and more of it – political, financial and social.

Investment potential and authoritarian intent are quite separate considerations…..and BTC could care less what any individual state actor desires.


Picks of the Week

Bitcoin as freedom in the making and outlining a new position between Alt-coiner and BTC Maximalist. This roundup of pending developments for Ethereum is another highlight.


Twitter

A somewhat casual dismissal of the China pump thesis:
https://twitter.com/nic__carter/status/1188111623782830081

A local’s perspective on their role in blockchain – bias very clear:
https://twitter.com/PatrickXDai/status/1188689901392252928

A perhaps more nuanced perspective on the same topic:
https://twitter.com/zhusu/status/1188204407529148416

Chinese media seems to have joined the blockchain party:
https://twitter.com/DoveyWan/status/1188654013215993856

Important Chinese figures are now ‘talking’ blockchain:
https://twitter.com/mg0314a/status/1188846745268015104

The Federal Reserve and its mandate (highly recommended):
https://twitter.com/ObiWanKenoBit/status/1118191700805963776

On Libra and Bitcoin:
https://twitter.com/CryptoEcon_Li/status/1189038718033768448


Articles

BTC transaction fees just hit a milestone:
https://www.coindesk.com/bitcoin-just-hit-1-billion-in-all-time-transaction-fees

Bitcoin as freedom ‘Hidden in plain Sight’ (highly recommended):
https://rhythmofbitcoin.substack.com/p/blockchain-is-the-censored-word-for

Bakkt is expanding its range of crypto products:
https://medium.com/bakkt-blog/unlocking-the-value-of-digital-assets-bdda43214720
https://www.wired.com/story/whats-blockchain-good-for-not-much/

Crypto in 2025 a very brief speculative tour:
https://www.cryptoglobe.com/latest/2019/10/cryptocurrency-in-2025-what-does-the-future-hold-for-digital-money/

Atomic swaps unpacked:
https://www.binance.vision/blockchain/atomic-swaps-explained

EOS may be comparatively user-friendly but work remains to be done:
https://medium.com/@bensig/eos-accounts-are-the-user-friendliest-accounts-on-any-blockchain-but-still-not-friendly-enough-9e1b5865010e

Yet another reason – Bitcoin:
https://www.theblockcrypto.com/linked/45009/argentina-further-imposes-capital-controls-sharply-cuts-usd-buying-limits-to-200-a-month?utm_source=cryptopanic&utm_medium=rss


Podcast

Outlining a new position between Alt-coiner and BTC Maximalist:

https://podcasts.apple.com/au/podcast/two-minute-crypto-altcoiner-or-bitcoin-maximalist/id1441492450?i=1000454379627


YouTube

On China and blockchain (recommended):

https://www.pscp.tv/w/1YqKDnjQPaEJV


Calling out folks for flipping on China simply because ‘Number go up’:


Alessio Rastani on BTC’S Bounce (recommended):


An excellent roundup of pending developments on Ethereum (highly recommended):


A brief guide to dollar-cost averaging:


Demystifying Forex:


Infographics

Visualizing and explaining BTC node propagation:

https://twitter.com/BlackHoleKeys/status/1189170849955237888/photo/1


That’s a hell of an ecosystem. A city clearly not sleeping on previous success:

https://fintechnews.sg/wp-content/uploads/2019/10/Blockchain-Ecosystem-Singapore-IMDA.png


A fascinating and challenging week. Lots to look forward to in the coming week/months/years. As always, looking forward to your comments and suggestions.


Note on Sources:

Twitter & Reddit (cryptos current meta-brains) / Medium / Trybe / Hackernoon / Whaleshares / TIMM and so on/ YouTube / various podcasts and whatever else I stumble upon. The aim is a useful weekly aggregator of ideas rather than news. Though I try to keep the sources current – I’ll reference these articles and podcasts etc. as I encounter them – they may have been published just a couple of days ago or in some cases quite a bit earlier.



Two Minute Crypto- Where’s Ma Sick Gainz?

Please click the link below to listen to the 60th episode of my weekly crypto podcast ‘Two Minute Crypto.’ These are intended to be short, single-topic ramblings on some aspect of the cryptosphere. Consider dropping a like and or a review on iTunes or Podbean if you enjoy the podcast. Comments and critiques welcome.



https://podcasts.apple.com/au/podcast/two-minute-crypto-wheres-ma-sick-gainz/id1441492450?i=1000455542736

or

https://www.podbean.com/eu/pb-ch639-c56142


Transcript

Where’s Ma Sick Gainz?

Welcome to Two Minute Crypto, today’s episode addresses the financial elephant in the crypto room – gains. Let’s be blunt – 90% of people who first come to crypto do so because of the lure of monetary gain. Sure, some folks find their way to the space because of a prior interest in Libertarianism, financial systems, tech or the nebulas intersection of all three. This path, however, is the exception to the ‘looking for sick gainz’ entry point.

Blockchain has become popular precisely because it has been proven to offer spectacular returns on investment over time or more accurately investment in Bitcoin has offered stupendous returns over the long-term. Year after year it has printed higher highs and higher lows. A popular meme for BTC is ‘Number go up.’ Number go up is powerful juju. Naturally, investors have been attracted by the allure of huge gains.

Those profits remain a possibility but anyone who has spent more than a few months engaged with crypto can attest to the very real downsides that prevail throughout the crypto market. If your approach to the space is to seek out hidden gems and the like, in truth, you are much more likely to lose money than make it. Unfortunately, far too many investors glance at the current price of Bitcoin and come to the entirely mistaken conclusion that value can only be found elsewhere leading to a focus on Alts in all their shiny glory. In fact, BTC has out-performed all other cryptos through time if you measure their performance over a multi-year horizon. A belief that BTC has topped out is simply a reflection of a very surface understanding of the disruptive potential of Bitcoin.

The likelihood of losing money also applies to the large-cap projects – unless you are willing to hold for years.

And this is the key point – there are no reliably sick gainz in crypto unless you are willing to weather the storm of crypto volatility and hold for the long-term. Long term means many years – not one, two or even five but closer to a decade and beyond. This market is plagued by short-term perspectives, hyperbole, and flat-out lies. It’s all going to take time and a lot of it. Sure, you might be lucky and pick a winner that increases 800% in two weeks but you can pursue such luck just as efficiently at a casino or the racecourse. If you are serious about building wealth through crypto investing -shed the rose-tinted glasses -take your time, do your research, make your investments and let them play out for a decade or so.

Thanks for listening.

Cryptocurrencies – Recent Highlights and the Road Ahead

Well it’s been quite a week for crypto! After too many months of no significant action, things are (finally) starting to come to a head. I’ll briefly discuss the highlights by fitting them in under the simple headings of “Bitcoin” and “Altcoins”.

Bitcoin

The recent Bitcoin price dip to below $7500 was not a surprise. I, like many other analysts, both expected it and welcomed it as a buying opportunity. Most of us (myself included) expected it to dip further. Indeed, I had yet to have a buy order fill (silly me). What we didn’t expect was a rapid BTC rise. Twice.

That the reason for those rises is still open to debate, indicates that (as usual) nobody REALLY knows the real reason behind them. Bullish sentiment appears to be partly from short squeezes, but mainly from FOMO about pro-blockchain comments made by Chinese president Xi Jinping. No doubt the full story is more complex than that, but FOMO never bothers with getting all the facts.

Despite the rapid rise, a little messing around on my charts reveals that BTC MAY still be in a descending channel.

I emphasise that this is just a theory, but I wouldn’t rule it out. My gut feel (which is often wrong when it comes to crypto) suggests that prices may yet again dip lower in the channel. I still believe that BTC has to reach the vicinity of its long-term trendline (approximate position indicated below) before it can begin to climb properly. Granted: the exact position of that trendline is hardly cast in stone.

The massive volume increase which followed the Bitcoin price rise is indicative of just how much (dumb) money is just waiting in the wings – waiting for some sort of confirmation that bitcoin is not going
to crash to zero before it decides to invest.

Altcoins

I have never been impressed by the altcoin bashing that has been so prevalent ever since the Bitcoin Maximalists greatly and suddenly multiplied in number starting in mid-2018. I consider altcoin bashing to be rather immature and short-sighted. As sure as my name is Bit Brain, most of the altcoin bashers will flip and become some of the biggest pro-altcoin campaigners when altcoin season returns.

Altcoin season has threatened to return on several occasions, though we have no positive confirmation of that happening yet. Of course there will always be isolated instances, such as Chainlink which is doing
very well at the moment. I can only shake my head in dismay as I see the Chainlink supporters declare their coin to be bulletproof and capable of decimating all the others. Guys – Chainlink is good, but it REALLY isn’t
anything super-special!

Before I get too far off-topic, I think that altcoin season WILL return very shortly, and I strongly suggest (as I have been doing for over a year now!) that investors stock up on all the ridiculously, laughably, insanely, insert-superlative-herely cheap altcoins that are currently available.

This last year has given us considerable new insight into the possible long-term nature of BTC dominance (seen below). It appears that BTC dominance will probably cease to increase now, freeing up a lot of money to be invested in altcoins.

From https://www.coingecko.com/en/global_charts; modified by Bit Brain

The SHITPERP Index (that’s a real thing, I promise) which tracks the performance of selected altcoins is indicating the same thing. It’s chart shows a double-bottom, indicative of a transition from losing value to gaining value.

President Xi Jinping’s comments (referenced earlier) seem to be having a direct effect on Chinese coins. I have noticed my beloved NEO doing exceptionally well ever since BTC took-off this weekend. The same applies to some of my other Chinese coins such as Ontology (ONT) and THEKEY (TKY). I have been saying for a LONG time that Chinese altcoins is where the smart crypto money should be. I’m sticking to that.

China definitely seems to be looking more blockchain friendly than both the US and the EU at the moment. Combined with their rise to global economic and military dominance (sorry USA, that is happening), I’m feeling VERY good about my Chinese altcoin investments.

BUT:

Note that Xi Jinping is talking about BLOCKCHAINS, not cryptocurrencies! I honestly think that the Chinese crypto hype is premature. Sure, it’s a GREAT idea to get in very early at ultra-low prices, but I don’t think that the current FOMO wave is thinking along those lines; they’re just thinking “China” = “pro-crypto” = “Chinese crypto to the Moon”; which is not necessarily the case. Chinese authorities appear to want blockchain tech that they can control, that’s NOT crypto!

It is however true that Xi Jinping is a visionary and that he knows the importance of not getting left behind in the blockchain race. In the long-run I believe that China will come around to the realisation that decentralised blockchains are the ones that work best and that centralised ones (like many reserve banks are currently investigating, or like Zuckerberg’s shitcoin extraordinaire) are doomed to fail thanks to the transparency and forced accountability that blockchains offer. It’s worth remembering that the Chinese government has been trialling THEKEY for several months already. I also remind you that Da Hongfei got WAY ahead of the game and helped China develop Chinese blockchain regulations about two years ago – regulations he built NEO (and by extension, Ontology too) around…

Looking to the future of alts, my crypto investing suggestions remain unchanged:

1) Good Chinese coins (NEO is still by far the best example, but others (e.g. VeChain) – are also worthy of consideration)

2) Good Exchange coins (My best bets are: Binance (BNB), KuCoin (KCS) and Nash Exchange (NEX) – all of which I have referral links to in my signature block)

3) Good Platform coins (you guessed it: NEO again! Other coins that I would recommend in this category are EOS, Ether (ETH), Ontology (ONT), Tron (TRX) and Holochain (HOT).

4) Other coins which have good use cases, especially the neglected ones which have survived the extremely harsh altcoin winter. Yes, I STILL love CargoX (CXO) (check them out at www.cargox.io and tell me what’s NOT to like!), but there are many others such as Kyber (KNC), Enjin coin (ENJ), UTrust (UTK), TenX (PAY), Worldwide Asset Exchange (WAX), OmiseGo (OMG) – too many to list. Just remember: “Favourite” does not equal “Good”!

Final Word

To my fellow NEO investors, it’s good to see NEO getting some LONG overdue attention, but be prepared for the FOMO-turns-to-FUD price drops which are sure to come. Like most good investments, NEO’s strength will lie in its long-term performance.

Yours in crypto

Bit Brain

Featured image in the public domain. Sourced from https://knowyourmeme.com/memes/its-over-9000

All uncaptioned charts made by Bit Brain with TradingView

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

Bit Brain recommends:

Crypto Exchanges: