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Crypto for Normies

This series of posts is geared towards people who are new to crypto and want to figure out the best way to start trading. The most logical place to start is trading different coins and analyzing the differences between them. This will naturally lead us to discussions on the current trends in the overall ecosystem. If there is a topic that you would like to explore please feel free to leave a comment.

I think it is safe to assume that if you took the time to follow this link you are somewhat familiar with Bitcoin. In case this assumption is wrong here are a few highlights.

  • Reached new all time highs continuously for the past month
  • Current value: $52K
  • Increasing institutional adoption
  • Posseses many of the same monetary qualities as gold but without the overhead (storage, security and transmission)
  • Use cases: scarcity and a hedge against fiat currency debasement
    People can argue about valuation of Bitcoin but the purpose of Bitcoin is pretty straightforward. It is a store wealth of a hedge against inflation.

Bitcoin is the first crypto currency and also has the most liquidity. Every major exchange supports Bitcoin and has the most exposure in the media. Most newcomers to the space will almost certainly start trading with Bitcoin. As most major exchanges also support many other tokens many investors will quickly avert their attention to these alternatives. Making sense of these alternatives is quite challenging. There is a debate between the fundamental analysis and technical analysis camps in crypto, but I feel both have a place. The best method of trading really depends on the timelines of your trades.

The next currency most people look at is Ethereum. Bitcoin is very limited in what it can do. For the sake of this discussion Bitcoin can really only transfer coins between parties. This alone is immensely valuable to a lot of people as evidenced by its price. Ethereum took the Bitcoin idea and made it programmable. With Ethereum, instead of just simple transfers of value, programmers can write custom programs. If Bitcoin was a calculator then Ethereum would be a PC. I realize that this is still very abstract but hopefully over the course of this and the following posts the difference will become clear.

Both Bitcoin and Ethereum are networks. It is important to note that these networks cannot communicate with each other. There are mechanisms that enable cross chain communication but this will be discussed in future posts. Bitcoin, being a single purpose network only has one currency, Bitcoin. The Ethereum network being programmable supports any number currencies (or tokens) based on one of several token standards. The most common Ethereum token standard is ERC20. The core token of the Ethereum network is ETH. ETH is used to buy access to the compute resources of the network.

While Ethereum was the first programmable blockchain, many others have followed and are currently in the pipeline. Each new programmable blockchain can host any number of tokens. As explained earlier, blockchain networks cannot communicate with one another. The makes it extremely difficult to analyse a token as you need to research not only the token but also the base layer (eg. Ethereum). On the centralized exchanges alone, there are at least a dozen base layer coins mixed in with programmed tokens. While all of this may seem overwhelming most of the future potential will be in these new chains and their associated tokens.

In the next post we will look more closely at the Ethereum network as a trade as well as what it is being used for.

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“What is internet anyway?”

Watch this:

Now, watch this:

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Bitcoin

Nigerian Senators grapple with how to respond to Bitcoin

For the first time — as far as I’m aware — we are watching a sovereign nation grapple with the implications of Bitcoin in live time. Senators convened in Nigeria today to discuss a variety of topics, including cryptocurrency, and openly opined about how to respond to the worldwide decentralized currency…

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The media still doesn’t understand what it means to own Bitcoin

A story has been making the rounds today about a criminal in Germany that held over $60 million in Bitcoin before being arrested. Incredibly, the media still doesn’t understand what it means to “own” Bitcoin, claiming that the government “confiscated” the funds but “can’t unlock” them…

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DeFi is Freedom

DeFi tokens are continuing to rally even as ETH is hitting all time highs and Bitcoin is also showing signs of life again. Sushi and 1inch are up more than 100% in the past 7 days. DeFi shows no signs of stopping and with the shenanigans of the traditional markets in the spotlight I expect interest will continue to grow.

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Live Blog: Here’s everything Elon Musk says about Bitcoin on Clubhouse

Last week, Tesla CEO Elon Musk put #bitcoin in his Twitter profile, for the first time signaling something of an endorsement for the decentralized, peer-to-peer cryptoasset. Tonight, Elon is stepping into a Clubhouse room for the first time, and chances are he’s going to chat a bit about Bitcoin. Follow along for our live coverage of the Clubhouse chat and everything Elon says.

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Bitcoin

Mark Cuban finds some footing on Bitcoin and digital assets

Mark Cuban, like many other tech magnates, has a bit of a history when it comes to his take on Bitcoin. It’s fluctuated from near total dimissal to excited embrace to… what now seems to be something of a coherent thought published on his own blog.

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The world’s richest man puts #bitcoin in his Twitter bio

After years of teasing his stance on crypto — everything from his ownership of half a bitcoin to declaring himself the ‘former CEO of Dogecoin’ — Elon Musk has finally capitulated on Bitcoin. He added it to his Twitter bio in what seems to be an endorsement.

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Bitcoin could soon become less volatile than US stocks, gold, real estate

Since the beginning, one of the biggest criticisms of Bitcoin — and indeed, the entire cryptocurrency space — has been its great volatility. But an interesting trend has emerged in recent years: Bitcoin’s volatility is decreasing while that of other traditional assets is increasing…

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Ray Dalio coming around on Bitcoin, but sees gov’t regulation as its primary threat

Ray Dalio, longtime holdout on Bitcoin, seems to be coming around. Just a few months ago he raised a few criticisms about the technology but was ‘open to being corrected’. Now he has posted a full screed outlining his thoughts…