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I am ready to get downvoted to hell, and maybe for this post to be removed. Why nano is in my opinion The best coin out there.
Obviously I was being sarcastic. So let's test the integrity of this sub moderators, in this post, I'm going to explain why I believe NANO is a shitcoin and why I believe there are paid shills trying to convince you to buy-in it. And I'm a bit scared moderators will remove this post, but let's see. Why it has no value: - As the white paper sais it does not use blockchain, it uses block-lattice (?) - To transfer the coins between wallets it uses a very basic and common technology, called UDP. What is UDP? UDP, os User Data Protocol, is a communication protocol commonly used across the internet. You play multiplayer games online? you transfer data using UDP, you call someone using WhatsApp? UDP, you stream videos online? UDP In fact, UDP is used on all those communications on the internet that need fast communications at the price of reliability, basically, it does not care if it misses a bit or two, it just wants to send the information to you. That is why sometimes you see artifacts when streaming a video. - Its network costs 0 to run, this means there are no "economies" around this coin, no investments possibly going on apart from buying and holding hoping for a miracle. - You can not build anything on top of it What does this mean for nano? Let's see how nano works. Basically the nano ledger is only the aggregation of all accounts, where every account has its own transaction chain. This means that when you send a transaction, only yours and the receiver "blockchain" are updated, in fact, nano chain is an asynchronous chain. This is how you get free transactions. So do you remember our friend UDP? When you send nano you are basically sending a UDP packet, the receiver will then send back another UDP packet, telling your wallet it has received the transaction. This is it, it basically uses a simple commonly used, free, internet protocol and the communication is instant because there is no update in the block-lattice (lol) until a later time. Nano value has only been going down in Bitcoin terms Not much to say here, have a look at the chart, it is a blood bath. It was one of the worst-performing coins during the bear market, it is still one of the worst-performing coins even now during this newborn bull market. Basically holding nano you lost the most during the bear market, and you are making the least during this alt season. Nice, lol. If I add to those rap songs, post underlining the amazing tech behind this coin, incredible upvotes for all those praising it and downvotes for all those that criticize it, I start to believe that it is a true shitcoin with people paid to promote it.
I applied price discovery algorithms to 5 Min OHLCV data from Bitmex and CME contracts and Bitstamp, Coinbase, HitBTC, Kraken, Poloniex, Binance, and OkEx BTCUSD/BTCUSDT markets from March 2016 to May 2020. Some exciting results I got was:
Before the 2017/18 bull run, Bitfinex dominated the price discovery process. They started the run. But as the price increased, trades on other exchanges, Binance and Bitstamp played a more dominant role in leading the price up.
Since then, CME Contracts and Bitmex contracts have had an increasing role in price discovery. Today Bitmex and CME Contracts play the most substantial role in determining the direction of Bitcoin price.
In 2020, market dominance by Bitmex has been negatively correlated with price. Dominance by Bitfinex, Huobi and OkCoin has had high positive correlation with price.
Price discovery is the overall process of setting the price of an asset. Price discovery algorithms identify the leader exchanges whose traders define the price. Two approaches are most famous for use in Price Discovery. Gonzalo and Granger (1995) and Hasbrouck (1995). But they assume random walk, and a common efficient price. I do not feel comfortable assuming random walk and common efficient price in Bitcoin Markets. So I used this little know method by De Blasis (2019) for this analysis. This work assumes that "the fastest price to reflect new information releases a price signal to the other slower price series." I thought this was valid in our market. It uses Markov Chains to measure Price Discovery. Without going into the mathematical details the summary steps used was:
Data is first grouped into a daily interval. Then inside each daily interval's 5-minute candles, the change in prices between the current time t and previous time t-1 is calculated. The difference across the same time t across all exchanges in a given day is juxtaposed to create an initial matrix.
The initial matrix is used to create a Transition Matrix, which measures the probability of price changing to something else at time t+1 for its state at t.
Then other Markov Chain based algorithms are used to measure the influence an exchange at time t had over all other exchanges' price movement at time t+1 individually.
Reduction and normalization is done to this data. In the end, each exchange receives a single number that sums to 1 for a given day.
De Blasis (2019) names this number Price Leadership Share (PLS). High PLS indicates a large role in price discovery. As the sum of the numbers is 1, they can be looked at as a percentage contribution. I recommend reading the original paper if you are interested to know more about the mathematical detail.
Andersen (2000) argues that 5 Minute window provides the best trade-off between getting enough data and avoiding noise. In one of the first work on Bitcoin's Price Discovery, Brandvold et al. 2015 had used 5M window. So I obtained 5M OHLCV data using the following sources:
Poloniex, Bitfinex, Binance and HitBTC: Exchange's API through CCXT.
CME: Okay, this was was supposed to be tricky and expensive. I broke a TOS and scraped the data for free, removing the expensive part from the equation. I will not go into detail about where I scraped this data.
Futures data are different from other data because multiple futures contract trades at the same time. I formed a single data from the multiple time series by selecting the nearest contract until it was three days from expiration. I used the next contract when the contract was three days from expiration. This approach was advocated by Booth et al ( 1999 )
I can't embed the chart on reddit so open this https://warproxxx.github.io/static/price_discovery.html In the figure above, each colored line shows the total influence the exchange had towards the discovery of Bitcoin Price on that day. Its axis is on the left. The black line shows a moving average of the bitcoin price at the close in Bitfinex for comparison. The chart was created by plotting the EMA of price and dominance with a smoothing factor of 0.1. This was done to eliminate the noise. Let's start looking from the beginning. We start with a slight Bitfinex dominance at the start. When the price starts going up, Bitfinex's influence does too. This was the time large Tether printing was attributed to the rise of price by many individuals. But Bitfinex's influence wanes down as the price starts rising (remember that the chart is an exponential moving average. Its a lagging indicator). Afterward, exchanges like Binance and Bitstamp increase their role, and there isn't any single leader in the run. So although Bitfinex may have been responsible for the initial pump trades on other exchanges were responsible for the later rally. CME contracts were added to our analysis in February 2018. Initially, they don't have much influence. On a similar work Alexandar and Heck (2019) noted that initially CBOE contracts had more influence. CBOE later delisted Bitcoin futures so I couldn't get that data. Overall, Bitmex and CME contracts have been averaging around 50% of the role in price discovery. To make the dominance clear, look at this chart where I add Bitmex Futures and Perp contract's dominance figure to create a single dominance index. There bitmex leads 936 of the total 1334 days (Bitfinex leads 298 days and coinbase and binance get 64 and 6 days). That is a lot. One possible reason for this might be Bitmex's low trading fee. Bitmex has a very generous -0.025% maker fee and price discovery tend to occur primarily in the market with smaller trading costs (Booth et al, 1999). It may also be because our market is mature. In mature markets, futures lead the price discovery.
Table 1: Days Lead
Out of 1334 days in the analysis, Bitmex futures leads the discovery in 571 days or nearly 43% of the duration. Bitfinex leads for 501 days. Bitfinex's high number is due to its extreme dominance in the early days.
Table 2: Correlation between the close price and Exchange's dominance index
Binance, Huobi, CME, and OkCoin had the most significant correlation with the close price. Bitmex, Coinbase, Bitfinex, and Bitstamp's dominance were negatively correlated. This was very interesting. To know more, I captured a yearwise correlation.
Table 3: Yearwise Correlation between the close price and Exchange's dominance index Price movement is pretty complicated. If one factor, like a dominant exchange, could explain it, everyone would be making money trading. With this disclaimer out of the way, let us try to make some conclusions. This year Bitfinex, Huobi, and OkEx, Tether based exchanges, discovery power have shown a high correlation with the close price. This means that when the traders there become successful, price rises. When the traders there are failing, Bitmex traders dominate and then the price is falling. I found this interesting as I have been seeing the OkEx whale who has been preceding price rises in this sub. I leave the interpretation of other past years to the reader.
My analysis does not include market data for other derivative exchanges like Huobi, OkEx, Binance, and Deribit. So, all future market's influence may be going to Bitmex. I did not add their data because they started having an impact recently. A more fair assessment may be to conclude this as the new power of derivative markets instead of attributing it as the power of Bitmex. But Bitmex has dominated futures volume most of the time (until recently). And they brought the concept of perpetual swaps.
There is a lot in this data. If you are making a trading algo think there is some edge here. Someday I will backtest some trading logic based on this data. Then I will have more info and might write more. But, this analysis was enough for to shift my focus from a Bitfinex based trading algorithm to a Bitmex based one. It has been giving me good results. If you have any good ideas that you want me to write about or discuss further please comment. If there is enough interest in this measurement, I can setup a live interface that provides the live value.
Decred Foundations - an hour of updates at Consensus Distributed - Tuesday May 12 - 1330 EST
Decred has an hour-long slot (along with many other projects) at Consensus Distributed, 1330-1430 NYC time on Tuesday May 12th. Event link: https://next.brella.io/events/consensusdistributed/schedule/118434 To attend the event and watch live it seems (unfortunately) necessary to register on brella.io, even to read the event description. I am pasting it below. Videos will be available on the coindesk website afterwards, and an extended edition of Checkmate's segment will be made available on Youtube. Construct - Building the Decred Ecosystem In this segment, Richard Red checks in with the developers who are leading on some of Decred's most exciting sub-projects. Luke Powell will give an update on Politeia, which is the basis for the Decred proposals site and contractor management system. Matheus Degiovanni will give us the latest on the Decred Lightning Network, catching up with Bitcoin’s lnd development and scoping out the areas where Decred’s LN can go that Bitcoin’s cannot. We'll be catching up with Jon Chappelow (chappjc) and Brian Stafford (buck) who lead development on dcrdex and dcrdata. dcrdex is software for an atomic swap based decentralized exchange with no trading fees and no token that anyone can set up and run a server for, and in this session, the lead developers explain what that’s all about, and give an update on progress ahead of the imminent pre-alpha test. dcrdata is a block explorer that provides incredible depth of information about the Decred chain, including a variety of specialized overviews and charts related to Decred’s voting systems. Dcrdata has been expanding to cover additional data sources, integrating market data, and adding features like an attack cost estimator which allows configuration of PoW and PoS parameters to model the likelihood of success in real-time. Buck will also give an update on TinyDecred, the python toolset that was his personal project until it was adopted by the Decred stakeholders last year. Trade Secrets - Decred On-chain Analytics with Checkmate Checkmate gives a whistle-stop tour of 5 key indicators for monitoring the health of the Decred ecosystem and conviction of stakeholders. The presentation covers the history of the Decred chain through the lens of:
realized value and its relation to market valuation
rolling USD sum of ticket value
block subsidy valuation models (miners put the bottom in)
demand for transaction capacity and block space
treasury flows and voting power per ticket
Changelog - 365 Decred Days Decred co-founder and lead project organizer Jake Yocom-Piatt will deliver a presentation covering the highlights of the last year. Jake will review the consensus rules changes that have been approved and activated by Decred stakeholders over the last year, which have served to better support the Lightning Network and Simplified Payment Verification. The presentation will also cover the adoption of these improvements in the Decrediton GUI wallet and mobile wallets, bringing new levels of security and privacy to the latter. The initial privacy tooling release and its uptake will also be considered. There will also be a review of the year's Treasury spending, efforts to develop the consensus changes to decentralize Treasury spending, and the integration of the Contractor Management System (CMS) with the Politeia proposals platform. The presentation will also look ahead to the future, with the DCR DEX coming online soon and some more consensus rule change proposals in the pipeline. Following the 15 minute presentation, there will be a live 10 minute Q&A session with Lucas Nuzzi of Coinmetrics
MKR Holder DAI-gest: Week 17, 2020: Action Required: The State of the Peg
Action Required: The State of the Peg
MKR Holder DAI-gest: Week 17, 2020
Governance Recap April 23, 2020
![Imgur](https://i.imgur.com/Jg3loyp.gifv) MKR Holder DAI-gest is a weekly Maker governance recap that is written by the community for the community. The best source of Maker Community information is through active participation and engagement. This supplemental publication strives to present all relevant facts and remain free of editorial opinion (Big 3 takeaway excepted). The statements made herein are not the opinions or statements of the Maker Foundation. DAI-gest is Now Available on Amazon Alexa as a Skill. You can enable it at https://skills-store.amazon.com/deeplink/dp/B087NH82D1?deviceType=app&share&refSuffix=ss_copy for all of your Alexa compatible devices. Then say, "Alexa, Open Maker Governance Digest" and you'll hear the latest issue. Coming soon to Itunes. Subscribe to MKR Holder's DAI-gest on Substack - Free Corrections / Comments / Suggestions / Other: @adrianhacker-pdx in the Official Maker Forums or [email protected]
Big 3 Take-Aways for the Week:
Understanding the MIPS framework that is being proposed right now is essential. It is a lot of information to sort through, so take it in small pieces if that will help you to focus and retain the information. Here is a link to an indexed list of all the MIPS (outside the forum). It is the entire framework of an introductory governance framework and collateral on-boarding procedures. You will find the MIP number, title, and sentence summary with a link to the forum discussion. See below for two additional sub-proposals added to MIPS 0 through 12.
The state of the peg has caused concern within and without the MakerDAO community. Some of the larger Maker holders stepped forward and posted their concerns around the state of the peg directly in the Maker forum. This spurred a lot of momentum in the platform, discussed further in this issue.
Intention to implementation. The DAO is getting very busy, and thought needs to be given to determining the feasibility of proposals, getting buy-in, and recruiting the appropriate skill sets in the community. Timing is key. The DAO is in need of a project management framework that is effortless and easily integrated into the current systems.
Dispositioned Governance Agenda
LongForWisdom is proposed, second governance facilitator. He said "Yes!".
Wrapped BTC has been proposed for collateral on-boarding.
USDC Risk parameter adjustment and on-boarding additional stable coins such as PAX and TUSD.
On-boarding LINK as a new collateral type.
Self-sustaining DAO: MIPS 0 - 12 - Ratification timeline and two additional sub-proposals have been shared in the forum.
Urgent - State of the Peg - Getting DAI back on soft-peg to a Dollar after it has been trading high following black Thursday.
SCD shutdown going to Executive Vote on April 24, 2020, three-week delay to follow for a final shutdown date of May 12, 2020.
Zero bid auction post mortem data evaluation - Maker Man currently completing the data analytics from black Thursday. This part is moving behind the scenes. A report is forthcoming in the next several weeks.
Public relations consortium - Communication team to create consistent and representative communications on behalf of the DAO and to report meaningful ecosystem sentiment back to the governance community. The team has been having weekly meetings, a first report is due by the end of the month.
Governance vote cadence - the timing for which executive voting happened for certain parameters. This may be overridden by the MIPS governance cycle.
Compensating Zero Bid Vault Owners. The poll was affirmative to compensate vault holders. Currently waiting on data analytics from Maker Man before restarting in another thread.
DeFi Emergency shutdown consortium
Dark fix - "
Flip / Flop auction usability
Maker token authority
Precedent for on-chain polling. Signaling started to determine the governance community's feelings about having foundation member proposals require on-chain polling. The forum thread seems to have died.
GSM delay - raise the delay from 4 hours to 12 hours for enacting Executive Votes, as a safety precaution.- Ratified
MKR Debt Auctions - Completed successfully
Deep dive into collateral on-boarding - Presentation to community completed, see forum for the movement
Governance cycle: MIPS 3 Presented in G and R Call - Presentation completed, see forum for the movement
Since the Black Thursday event of March 12, 2020, DAI has consistently been trading above the one Dollar price soft-peg it is supposed to maintain. Sometimes grossly over peg by over ten cents. In recent weeks it has been slowly trending back to a Dollar but has not quite gotten there. Confidence has not yet fully returned regarding the recent market volatility. Also, people are holding on to stable coins due to market fears. This has caused a serious lack of DAI liquidity, creating high demand, and affecting the peg. Prices this last week ranged from one to two cents above peg. Paraficapital, a larger corporate Maker holder in the governance community posted their concerns in the forum and related the sentiment of worry in the ecosystem regarding DAI being off the peg. This brought about immediate discussion and action regarding monetary policy and collateral on-boarding. The most recent passed Executive Vote contains monetary policy to make minting DAI more lucrative from USDC. Also, some exciting new collateral types are being considered for use in the MakerDAO platform. More on that next...
WBTC as a new collateral type?
WBTC also is known as wrapped Bitcoin is currently being evaluated by the Maker governance community to be on-boarded as approved vault collateral. Wrapped Bitcoin is Bitcoin that is held by the WBTC DAO and then tokenized 1:1 on the Ethereum (ERC-20) blockchain. Bitcoin on the Ethereum blockchain you ask!? It's already here, you can trade it on the https://Oasis.app . Many players in the DeFi ecosystem are excited about this step. Bitcoin is the most popular and most valuable cryptocurrency. While there is a small amount of WBTC use on current DeFi platforms, it was stated that people have been waiting for Maker to adopt WBTC as a collateral type. It was also said that using WBTC as ERC-20 collateral is the primary use case for ERC-20 Bitcoin. Forum links are listed below for this subject.
Other Collateral Considerations
In addition to WBTC, LINK is being considered for on-boarding as approved vault collateral as well as additional stable coins such as PAX and TUSD. All of these collateral options are hoped to help bring back sufficient DAI liquidity and help return the DAI price peg to exactly one Dollar. Again, see below for the forum links regarding these new collateral types.
MIPS 0 - 12 Due for Initial Polling; if Passed Moving on to Executive Vote
MIPS 0 through 12 has been a high focus subject in the governance community for the last few weeks. These are the first documents that spell out a governance and collateral on-boarding framework for a self-sufficient DAO. This is the beginning of the two to three-year process of handing full control of MakerDAO to the governance community and dissolving the foundation. The very nice flow chart below shows the two possible scenarios for approval or rejection of these MIPS in the Timing Governance Poll. Forum links can be found below for further information. ![MIP Implementation Timeline](https://i.imgur.com/sny6rOf.png)
Single Collateral DAI shutdown is very close. An Executive Vote for shutting down SCD is supposed to be posted on or shortly after April 24, 2020. There will then be a 3-week delay for shutting down. This will give time for people to close out their vaults, and hopefully drain the migration contract. Stability fees are going to be set to zero to incentivize the closing of vaults. If you are still holding SAI as of the time it shuts down, you should be able to redeem your SAI for ETH via the migration portal at https://migrate.makerdao.com
Here is a guide from MakerDAO about becoming involved in Governance. The meeting is held every Thursday, 17:00 UTC. During the postmortem and corrective action phase of the recent crypto market prices and resulting fiasco there has been a daily call. This is expected to drop to two calls over the next week. Please check the forums for information related to ad-hoc governance and risk calls that may be happening. Governance and Risk Meeting Community Guide * Understand the issues that are discussed and governance themes that get explored to build a healthy, secure, Maker Platform. * Get info on how to connect by phone or webcam. * Explore meeting archives.
Weekly Update: Parachute Townhall, Welcome $GET to ParJar, Uptrennd reaches 50k members, Fantom on IncognitoChain... – 6 Dec - 12 Dec'19
Hi Parachuters! As part of 2 of 3 from today's rapid catch up series of pending updates, here’s your week at Parachute + partners (6 Dec - 12 Dec'19): As mentioned last week, Cap and Ice hosted a townhall to talk about where we are at and where we are heading along with ample feedback and Q&A from the community. We covered a lot of ground: "value hypothesis for ParJar, Product Market fit, and our growth approach for 2020...performance of two key PAR utility metrics, staking and gas, and how we see growth for each in 2020...questions from the community and reviewed upcoming community initiatives". Click here to catch up on all that happened. GET Protocol’s $GET token was added to ParJar this week. Belated Birthday wishes to Doc Vic from Cuba. Jason lost a 5k $PAR wager with Cap on Victor’s age. Haha. Congratulations to Martha for winning this week’s Parena. As per the latest Fantasy Premier League (#FPL) update shared by LordHades this week, he is still ruling the charts at the top with NovelCloud and Alexis hot on his heels. From next week, "You can now view your first opponent in the 2019/20 FPL Cup on the My Team page - under Leagues". While you slay those miles with the Parachute Running Club (which has done 44 miles so far BTW), here’s a podcast to listen to. Cap’s recommendation: "It's geared towards people building products - but super super useful to think about any products you use. Skip to like 9 minutes in to skip through all the advertiesments ". Yes, I know. Cap wouldn’t be Cap without typos. Typos FTW! Parachute townhall Parachute-themed shirts designed by Doc Vic and Alejandro on Doc’s birthday. These are sick! If you want to see yourself on the Parachute world map, make sure to enter your location here. The entries are anonymous. In this week's Parachute Fantasy Football League update, Hang is in the first position followed by Clinton and Andy. Connor made it to the playoffs and is now in 4th position. So it means farewell to Nilz, Ken, Kamo and Cap from this season. CoD mobile players, don't forget to join the Parachute WarZone hosted by Doc Vic from Cuba. I hear there's $PAR and $AMGO to be won! The TTR Hat Contest ended this week with some solid entries running in the lead. Epic creation Wendell! In this week’s creative prompt by Jason, Parachuters had to “do 3 nice things for a total stranger”. Basically, be a true blue Parachuter 😊. For this week's Two-for-Tuesday, Gian made it free-for-all. No theme. Post music as you wish and win 500 $PAR. Cool! Benjamin and Charlotte hosted trivias in TTR this week. Those were loads of fun! Andy announced the start of a College Football Bowl Game Pickem contest in Parachute. 100k $PAR prize pool. Doc Vic hosted another round of Champions League wager this week in TTR. So much epicness in one picture. Jose, you are a genius! Andy's Advent Calendar journey continues Catch up on the latest aXpire update and 20k AXPR burn here and here respectively. As you would already know, instead of pitting both startups against each other, XIO decided to accept both Opacity and Uptrennd into the incubator program and opened up staking for them. This marks the official launch of the XIO Blockchain Incubator and it’s been a roaring start with USD 7k worth of tokens locked up in one hour and Opacity portal getting oversubscribed in no time. Video instructions for staking can be found here. Read up on the startups here. In three days, the total staking crossed 1M XIO levels. Insane! That is a great metric to measure performance. How does the $XIO token play a role in all this? The crew explained in this tweet thread. And with that a series of related discussions got off starting with the possibility of self-nomination for startups. Have a sub-100 CMC project that you think should be part of the incubator? Don’t forget to tag them. Plus, a cool 25k $XIO giveaway was launched. Remember, meaningful conversation is always welcome at the incubator and more often than not, they get rewarded. Check out the latest update on the Birdchain App SMS feature along with an expanded list of supported countries. Silent Notary reduced the $LAW token requirement for running a Masternode from 100M to 20M this week. Russian research company sudexpa.ru also gave its vote of confidence to Silent Notary in terms of its immutability. Wibson Marketing Manager Fi Scantamburlo attended the Latin American Bitcoin Conference Uruguay to speak on Data privacy, monetisation and how Wibson helps achieve these. Opacity now allows shared file preview for uploaded docs. Shared File Preview on Opacity Fantom's foray into the Afghan Ministry of Health's efforts to fight counterfeit drugs and other public health initiatives were covered by Forbes this week. Last week, we shared that Sikoba's e-voting platform, Itugen, which is based on Fantom’s Lachesis consensus was released. This week, they published its technical whitepaper. With so many moving parts in the project and so much happening all around, a recap is always a welcome refresher to catch up. $FTM got listed on South Korea’s Coinone with a $KRW pairing. It was also integrated with the IncognitoChain project’s pDEX with a $pUSDT pairing (remember, Harmony was added to the same platform a few days back?). IncognitoChain allows cryptos to be transacted privately using sidechains including those coins/tokens which are not privacy-oriented. Fantom also launched a developer portal and technical documentation ahead of the XAR Network mainnet release. The interoperability bridge is out as well. This allows both ERC20 and BEP2 token holders to move their tokens to the XAR Network. The wallet allows both staking and delegation. For the guide to joining XAR Network as a validator node, click here. A simple guide to staking on XAR Network can be found here. The team also sat down for an AMA with COTI this week. Blockchain Magazine’s interview of Michael was published. Continuing with Uptrennd’s 24 Days of Celebrations started last week, this week they hosted an Escape Room contest and Photo contest. The latest $1UP tokenomics update can be seen here. After 11 months, the platform now has 50k users across 177 countries. Wowza! And wicked stats on the engagement metrics as well. Jeff’s interview with Crypto Beadles came out this week. A few entries for the Uptrennd Photo Contest Click here and here for the latest District Weekly and Dev Update from District0x. In case you missed this week’s Dapp Digest, you can watch it here. Aragon fans will be in for a treat since it features Aragon Co-Founder Luis Cuende as a special guest. Remember, we had discussed last week that the Shuffle Monster Raffle had crossed a 10k $SHUF pool. Turns out it got to 13k+. Wow! The latest Hydro developer update is a comprehensive roundup from the entire ecosystem. VCC Exchange listed $HYDRO with a $BTC pairing. Hydro’s security tokenisation protocol, Hail, moved to mainnet this week. The team travelled to Boston for MassChallenge Fintech. Hydro will be hosting a Banking-as-a-Service happy hour next week to talk on how they are building solutions in the BaaS space. For starters, don’t forget to read their article on blockchain applications in finance. The team appeared for an AMA with Apache Traders which also featured a 45k $HYDRO giveaway. Digital payments platform VoPay is now partnered with Hydro for end-to-end payment solutions using Hydrogen API and other Hydro tools. Hydro’s smart contract was audited by Callisto and passed their test with flying colours except for one "low severity" issue. The result: "The contract can be deployed". CTO Tim Allard was interviewed by Ethereum Network Nigeria as part of their Ethereum personality chat series. For the latest update on the community explorer Frost, click here. In Pynk’s first guest blog post, community member (or, Pynkster) Alistaire Wallace talks about what the coming year could hold for Pynk and its community of predictors. Check out the transcript of Sentivate’s AMA with tehMoonwalkeR here. Sentivate’s new office in PA is shaping up quite well This week at OST was all about the Pepo app: from angel investor Kartik to Rocket NFT’s Alex Masmej joining the platform, accelerator The Fledge using Pepo Conversations to power community-sourced improvements to businesses, Home for the Holidays Challenge to explain crypto/blockchain to relatives (with a total USD 2k in Pepo coins in prizes) and a “best lifehack” bounty posted by Jason on the app. If you’ve missed all SelfKey news from the past month, you can catch up from the November progress report. Also, did you know that the group Legion of Doom which was once considered to be the most capable hacking group in the world was in a long drawn feud with Masters of Deception in what is now known as the Great Hacker War? Learn more info like this from SelfKey’s latest article on hacking groups. Constellation CEO Ben Jorgensen will be speaking at the Crypto 2020 Summit. If you’re attending, make sure to say Hi. Arena Match announced a trading competition on DDEX with 4M $AMGO tokens to be won. Lucky Bluff Poker will be sponsoring next week’s Arena Match Raffle. The latest Harmony update compilation from the whole team can be found here. In the latest Pangea statistics (Harmony’s experimental staking game to test the limits of its tech), the average staking position is 1.8M $ONE with 75% of participants operate nodes themselves while the rest use delegates. Plus, check out the newest upgrades here. Honest Mining announced mainnet support for the native $ONE token swap. $ONE is also in consideration for listing on Binance US. The token was listed on Pionex this week. The Intellishare website registration and login functions will be down next week for a scheduled upgrade. Also, $INE traders make sure to keep a note of WBFex temporarily disabling the $ETH trading pair. Jobchain’s $JOB token got listed on Bilaxy exchange, P2PB2B exchange, SWFT Blockchain wallet and SWOP.SPACE exchange. The project was also given an A+ score by Xangle. Congrats! And with that, it’s a wrap. See you again soon with another weekly update. Bye!
Note, bitcoin by its nature is poorly compressible, as it contains a lot of incompressible data, such as public keys, addresses, and signatures. However, there's also a lot of redundant information in there, e.g. the transaction version, and it's usually the same opcodes, locktime, sequence number etc. over and over again. I was curious and thought, how much could we actually compress the blockchain? This is actually very relevant: As I established in my previous post about the costs of a 1GB full node, the storage and bandwidth costs seem to be one of the biggest bottlenecks, and that CPU computation costs are actually the cheapest part, as were able almost to get away with ten year old CPUs. Let's have a quick look at the transaction format and see what we can do. I'll have a TL;DR at the end if you don't care about how I came up with those numbers. Before we just in, don't forget that I'll be streaming today again building a SPV node, as I've already posted about here. Last time we made some big progress, I think! Check it out here https://dlive.tv/TobiOnTheRoad. It'll start at around 15:00 UTC!
Version (32 bits)
There's currently two transaction types. Unless we add new ones, we can compress it to 1 bit (0 = version 1; and 1 = version 2).
Input/output count (8 to 72 bits)
This is the number of inputs the transaction has (see section 9 of the whitepaper). If the number of inputs is below 253, it will take 1 byte, and otherwise 2 to 8 bytes. This nice chart shows that, currently, 90% of Bitcoin transactions only have 2 inputs, sometimes 3. A byte can represent 256 different numbers. Having this as the lowest granularity for input count seems quite wasteful! Also, 0 inputs is never allowed in Bitcoin Cash. If we represent one input with 00₂, two inputs with 01₂, three inputs with 10₂ and everything else with 11₂ + current format, we get away with only 2 bits more than 90% of the time. Outputs are slightly higher, 3 or less 90% of the time, but the same encoding works fine.
Input (>320 bits)
There can be multiple of those. It has the following format:
Previous output (288 bits): This specifies which output is being spent by this input. It's the transaction hash (32 bytes), plus the output index within that transaction (4 bytes).The transaction hash is usually a random number. How can we compress that? Well, we already know this transaction and its hash. If it's part of the blockchain, we can uniquely identify it by its block (via blockheight) and its position in that block. We'll list all transaction outputs of the block by whatever order is present for that block (TTOCTOR), and then encode the position of the output in that list. For the blockheight, we can use 4 bytes, which will allow 4 billion blocks (83,781 years) and for the transaction output we can either use 4 bytes (max. 430GB big blocks) or more, but we can use 1 bit as a flag once blocks get really large.So in total, this will be 8 bytes, or 64 bits. If transactions aren't in the blockchain yet but in the mempool, we can use something similar Xthinner uses by encoding only the prefix required to uniquely identify the transaction. But I haven't thought that through yet.
Signature script (≥ 8 bits): As most scripts have a standardized format, we don't have to put the whole script into the input every time. Say there's seven standard formats, then we'd use 3 bits for the format. If all bits are set, the transaction will continue to be serialized in a standard way. The most common transaction type is Pay-To-Public-Key-Hash, which requires a signature and a public key. The signature currently uses the DER format, which can currently be up to 73 bytes, but just actually stores two 32 byte numbers, which can actually be represented with 512 bits. The public key can be compressed to 257 bits, plus 1 to specify if it's compressed in the original transaction. Makes 258 bits.
Sequence (32 bits): For almost all programs, this is FF FF FF FF. We can use 1 bit to determine if it's that number (0), and encode the sequence number ordinarily if not (1).
So in total that 838 bits per P2PKH input, or about 105 bytes.
Output (≥72 bits)
There can be multiple of those. They have the following format:
Value in satoshis (64 bits): Currently, the first 13 bits of this amount will always be 0 (as there's a maximum of 21M BCH), but there's efforts to allow sub-satoshi values in Bitcoin, so we can't rely on that. Also, most of the time, transactions will send much less than 21,000,000 BCH, or even 21 BCH. Therefore, if we encode the sent value separately, we can use integer compression schemes, as outlined in this paper, which achieves between 6 and 16 bits per 32 bit integer (see Table 4, p. 21). I think it's save to assume we can get away with 16 bits if we implement that scheme here.
Public key script (≥8 bits): Here, we can use the same trick as with the input, by having 3 bits for the format. For Pay-To-Public-Hash transactions, we only need 20 bytes or 160 bits for the address.
So in total that is 179 bits per P2PKH output.
Lock time (32 bits)
This is FF FF FF FF most of the time and only occasionally transactions will be time-locked, and only change the meaning if a sequence number for an input is not FF FF FF FF. We can do the same trick as with the sequence number, such that most of the time, this will be just 1 bit.
Interestingly, if we take a compression of 69%, if we were to compress the 165 GB blockchain, we'd get 113.8GB. Which is (almost) exactly the amount which 7zip was able to give us given ultra compression! I think there's not a lot we can do to compress the transaction further, even if we only transmit public keys, signatures and addresses, we'd at minimum have 930 bits, which would still only be at 61% compression ratio (and missing outpoint and value). 7zip is probably also able to utilize re-using of addresses/public keys if someone sends to/from the same address multiple times, which we haven't explored here; but it's generally discouraged to send to the same address multiple times anyway so I didn't explore that. We'd still have signatures clocking in at 512 bits. Note that the compression scheme I outlined here operates on a per transaction or per block basis (if we compress transacted satoshis per block), unlike 7zip, which compresses per blockchain. I hope this was an interesting read. I expected the compression ratio to be higher, but still, if it takes 3 weeks to sync uncompressed, it'll take just 2 weeks compressed. Which can mean a lot for a business, actually.
I'll be streaming again today!
As I've already posted about here, I will stream about building an SPV node in Python again. It'll start at 15:00 UTC. Last time we made some big progress, I think! We were able to connect to my Bitcoin ABC node and send/receive our first version message. I'll do a nice recap of what we've done in that time, as there haven't been many present last time. And then we'll receive our first headers and then transactions! Check it out here: https://dlive.tv/TobiOnTheRoad.
Your Guide to Monero, and Why It Has Great Potential
/////Your Guide to Monero, and Why It Has Great Potential/////
Marketing. It's a dirty word for most members of the Monero community. It is also one of the most divisive words in the Monero community. Yet, the lack of marketing is one of the most frustrating things for many newcomers. This is what makes this an unusual post from a member of the Monero community. This post is an unabashed and unsolicited analyzation of why I believe Monero to have great potential. Below I have attempted to outline different reasons why Monero has great potential, beginning with upcoming developments and use cases, to broader economic motives, speculation, and key issues for it to overcome. I encourage you to discuss and criticise my musings, commenting below if you feel necessary to do so.
Bulletproofs - A Reduction in Transaction Sizes and Fees Since the introduction of Ring Confidential Transactions (Ring CT), transaction amounts have been hidden in Monero, albeit at the cost of increased transaction fees and sizes. In order to mitigate this issue, Bulletproofs will soon be added to reduce both fees and transaction size by 80% to 90%. This is great news for those transacting smaller USD amounts as people commonly complained Monero's fees were too high! Not any longer though! More information can be found here. Bulletproofs are already working on the Monero testnet, and developers were aiming to introduce them in March 2018, however it could be delayed in order to ensure everything is tried and tested. Multisig Multisig has recently been merged! Mulitsig, also called multisignature, is the requirement for a transaction to have two or more signatures before it can be executed. Multisig transactions and addresses are indistinguishable from normal transactions and addresses in Monero, and provide more security than single-signature transactions. It is believed this will lead to additional marketplaces and exchanges to supporting Monero. Kovri Kovri is an implementation of the Invisible Internet Project (I2P) network. Kovri uses both garlic encryption and garlic routing to create a private, protected overlay-network across the internet. This overlay-network provides users with the ability to effectively hide their geographical location and internet IP address. The good news is Kovri is under heavy development and will be available soon. Unlike other coins' false privacy claims, Kovri is a game changer as it will further elevate Monero as the king of privacy. Mobile Wallets There is already a working Android Wallet called Monerujo available in the Google Play Store. X Wallet is an IOS mobile wallet. One of the X Wallet developers recently announced they are very, very close to being listed in the Apple App Store, however are having some issues with getting it approved. The official Monero IOS and Android wallets, along with the MyMonero IOS and Android wallets, are also almost ready to be released, and can be expected very soon. Hardware Wallets Hardware wallets are currently being developed and nearing completion. Because Monero is based on the CryptoNote protocol, it means it requires unique development in order to allow hardware wallet integration. The Ledger Nano S will be adding Monero support by the end of Q1 2018. There is a recent update here too. Even better, for the first time ever in cryptocurrency history, the Monero community banded together to fund the development of an exclusive Monero Hardware Wallet, and will be available in Q2 2018, costing only about $20! In addition, the CEO of Trezor has offered a 10BTC bounty to whoever can provide the software to allow Monero integration. Someone can be seen to already be working on that here. TAILS Operating System Integration Monero is in the progress of being packaged in order for it to be integrated into TAILS and ready to use upon install. TAILS is the operating system popularised by Edward Snowden and is commonly used by those requiring privacy such as journalists wanting to protect themselves and sources, human-right defenders organizing in repressive contexts, citizens facing national emergencies, domestic violence survivors escaping from their abusers, and consequently, darknet market users. In the meantime, for those users who wish to use TAILS with Monero, u/Electric_sheep01 has provided Sheep's Noob guide to Monero GUI in Tails 3.2, which is a step-by-step guide with screenshots explaining how to setup Monero in TAILS, and is very easy to follow. Mandatory Hardforks Unlike other coins, Monero receives a protocol upgrade every 6 months in March and September. Think of it as a Consensus Protocol Update. Monero's hard forks ensure quality development takes place, while preventing political or ideological issues from hindering progress. When a hardfork occurs, you simply download and use the new daemon version, and your existing wallet files and copy of the blockchain remain compatible. This reddit post provides more information. Dynamic fees Many cryptocurrencies have an arbitrary block size limit. Although Monero has a limit, it is adaptive based on the past 100 blocks. Similarly, fees change based on transaction volume. As more transactions are processed on the Monero network, the block size limit slowly increases and the fees slowly decrease. The opposite effect also holds true. This means that the more transactions that take place, the cheaper the fees! Tail Emission and Inflation There will be around 18.4 million Monero mined at the end of May 2022. However, tail emission will kick in after that which is 0.6 XMR, so it has no fixed limit. Gundamlancer explains that Monero's "main emission curve will issue about 18.4 million coins to be mined in approximately 8 years. (more precisely 18.132 Million coins by ca. end of May 2022) After that, a constant "tail emission" of 0.6 XMR per 2-minutes block (modified from initially equivalent 0.3 XMR per 1-minute block) will create a sub-1% perpetual inflatio starting with 0.87% yearly inflation around May 2022) to prevent the lack of incentives for miners once a currency is not mineable anymore. Monero Research Lab Monero has a group of anonymous/pseudo-anonymous university academics actively researching, developing, and publishing academic papers in order to improve Monero. See here and here. The Monero Research Lab are acquainted with other members of cryptocurrency academic community to ensure when new research or technology is uncovered, it can be reviewed and decided upon whether it would be beneficial to Monero. This ensures Monero will always remain a leading cryptocurrency. A recent end of 2017 update from a MRL researcher can be found here.
///Monero's Technology - Rising Above The Rest///
Monero Has Already Proven Itself To Be Private, Secure, Untraceable, and Trustless Monero is the only private, untraceable, trustless, secure and fungible cryptocurrency. Bitcoin and other cryptocurrencies are TRACEABLE through the use of blockchain analytics, and has lead to the prosecution of numerous individuals, such as the alleged Alphabay administrator Alexandre Cazes. In the Forfeiture Complaint which detailed the asset seizure of Alexandre Cazes, the anonymity capabilities of Monero were self-demonstrated by the following statement of the officials after the AlphaBay shutdown: "In total, from CAZES' wallets and computer agents took control of approximately $8,800,000 in Bitcoin, Ethereum, Monero and Zcash, broken down as follows: 1,605.0503851 Bitcoin, 8,309.271639 Ethereum, 3,691.98 Zcash, and an unknown amount of Monero". Privacy CANNOT BE OPTIONAL and must be at a PROTOCOL LEVEL. With Monero, privacy is mandatory, so that everyone gets the benefits of privacy without any transactions standing out as suspicious. This is the reason Darknet Market places are moving to Monero, and will never use Verge, Zcash, Dash, Pivx, Sumo, Spectre, Hush or any other coins that lack good privacy. Peter Todd (who was involved in the Zcash trusted setup ceremony) recently reiterated his concerns of optional privacy after Jeffrey Quesnelle published his recent paper stating 31.5% of Zcash transactions may be traceable, and that only ~1% of the transactions are pure privacy transactions (i.e., z -> z transactions). When the attempted private transactions stand out like a sore thumb there is no privacy, hence why privacy cannot be optional. In addition, in order for a cryptocurrency to truly be private, it must not be controlled by a centralised body, such as a company or organisation, because it opens it up to government control and restrictions. This is no joke, but Zcash is supported by DARPA and the Israeli government!. Monero provides a stark contrast compared to other supposed privacy coins, in that Monero does not have a rich list! With all other coins, you can view wallet balances on the blockexplorers. You can view Monero's non-existent rich list here to see for yourself. I will reiterate here that Monero is TRUSTLESS. You don't need to rely on anyone else to protect your privacy, or worry about others colluding to learn more about you. No one can censor your transaction or decide to intervene. Monero is immutable, unlike Zcash, in which the lead developer Zooko publicly tweeted the possibility of providing a backdoor for authorities to trace transactions. To Zcash's demise, Zooko famously tweeted:
" And by the way, I think we can successfully make Zcash too traceable for criminals like WannaCry, but still completely private & fungible. …"
Ethereum's track record of immutability is also poor. Ethereum was supposed to be an immutable blockchain ledger, however after the DAO hack this proved to not be the case. A 2016 article on Saintly Law summarised the problematic nature of Ethereum's leadership and blockchain intervention:
" Many ethereum and blockchain advocates believe that the intervention was the wrong move to make in this situation. Smart contracts are meant to be self-executing, immutable and free from disturbance by organisations and intermediaries. Yet the building block of all smart contracts, the code, is inherently imperfect. This means that the technology is vulnerable to the same malicious hackers that are targeting businesses and governments. It is also clear that the large scale intervention after the DAO hack could not and would not likely be taken in smaller transactions, as they greatly undermine the viability of the cryptocurrency and the technology."
Monero provides Fungibility and Privacy in a Cashless World As outlined on GetMonero.org, fungibility is the property of a currency whereby two units can be substituted in place of one another. Fungibility means that two units of a currency can be mutually substituted and the substituted currency is equal to another unit of the same size. For example, two $10 bills can be exchanged and they are functionally identical to any other $10 bill in circulation (although $10 bills have unique ID numbers and are therefore not completely fungible). Gold is probably a closer example of true fungibility, where any 1 oz. of gold of the same grade is worth the same as another 1 oz. of gold. Monero is fungible due to the nature of the currency which provides no way to link transactions together nor trace the history of any particular XMR. 1 XMR is functionally identical to any other 1 XMR. Fungibility is an advantage Monero has over Bitcoin and almost every other cryptocurrency, due to the privacy inherent in the Monero blockchain and the permanently traceable nature of the Bitcoin blockchain. With Bitcoin, any BTC can be tracked by anyone back to its creation coinbase transaction. Therefore, if a coin has been used for an illegal purpose in the past, this history will be contained in the blockchain in perpetuity. A great example of Bitcoin's lack of fungibility was reposted by u/ViolentlyPeaceful:
"Imagine you sell cupcakes and receive Bitcoin as payment. It turns out that someone who owned that Bitcoin before you was involved in criminal activity. Now you are worried that you have become a suspect in a criminal case, because the movement of funds to you is a matter of public record. You are also worried that certain Bitcoins that you thought you owned will be considered ‘tainted’ and that others will refuse to accept them as payment."
This lack of fungibility means that certain businesses will be obligated to avoid accepting BTC that have been previously used for purposes which are illegal, or simply run afoul of their Terms of Service. Currently some large Bitcoin companies are blocking, suspending, or closing accounts that have received Bitcoin used in online gambling or other purposes deemed unsavory by said companies. Monero has been built specifically to address the problem of traceability and non-fungibility inherent in other cryptocurrencies. By having completely private transactions Monero is truly fungible and there can be no blacklisting of certain XMR, while at the same time providing all the benefits of a secure, decentralized, permanent blockchain. The world is moving cashless. Fact. The ramifications of this are enormous as we move into a cashless world in which transactions will be tracked and there is a potential for data to be used by third parties for adverse purposes. While most new cryptocurrency investors speculate upon vaporware ICO tokens in the hope of generating wealth, Monero provides salvation for those in which financial privacy is paramount. Too often people equate Monero's features with criminal endeavors. Privacy is not a crime, and is necessary for good money. Transparency in Monero is possible OFF-CHAIN, which offers greater transparency and flexibility. For example, a Monero user may share their Private View Key with their accountant for tax purposes. Monero aims to be adopted by more than just those with nefarious use cases. For example, if you lived in an oppressive religious regime and wanted to buy a certain item, using Monero would allow you to exchange value privately and across borders if needed. Another example is that if everybody can see how much cryptocurrency you have in your wallet, then a certain service might decide to charge you more, and bad actors could even use knowledge of your wallet balance to target you for extortion purposes. For example, a Russian cryptocurrency blogger was recently beaten and robbed of $425k. This is why FUNGIBILITY IS ESSENTIAL. To summarise this in a nutshell:
"A lack of fungibility means that when sending or receiving funds, if the other person personally knows you during a transaction, or can get any sort of information on you, or if you provide a residential address for shipping etc. – you could quite potentially have them use this against you for personal gain"
Major Investors And Crypto Figureheads Are Interested Ari Paul is the co-founder and CIO of BlockTower Capital. He was previously a portfolio manager for the University of Chicago's $8 billion endowment, and a derivatives market maker and proprietary trader for Susquehanna International Group. Paul was interviewed on CNBC on the 26th of December and when asked what was his favourite coin was, he stated "One that has real fundamental value besides from Bitcoin is Monero" and said it has "very strong engineering". In addition, when he was asked if that was the one used by criminals, he replied "Everything is used by criminals including the US dollar and the Euro". Paul later supported these claims on Twitter, recommending only Bitcoin and Monero as long-term investments. There are reports that "Roger Ver, earlier known as 'Bitcoin Jesus' for his evangelical support of the Bitcoin during its early years, said his investment in Monero is 'substantial' and his biggest in any virtual currency since Bitcoin. Charlie Lee, the creator of Litecoin, has publicly stated his appreciation of Monero. In a September 2017 tweet directed to Edward Snowden explaining why Monero is superior to Zcash, Charlie Lee tweeted:
All private transactions, More tested privacy tech, No tax on miners to pay investors, No high inflation... better investment.
John McAfee, arguably cryptocurrency's most controversial character at the moment, has publicly supported Monero numerous times over the last twelve months(before he started shilling ICOs), and has even claimed it will overtake Bitcoin. Playboy instagram celebrity Dan Bilzerian is a Monero investor, with 15% of his portfolio made up of Monero. Finally, while he may not be considered a major investor or figurehead, Erik Finman, a young early Bitcoin investor and multimillionaire, recently appeared in a CNBC Crypto video interview, explaining why he isn't entirely sold on Bitcoin anymore, and expresses his interest in Monero, stating:
"Monero is a really good one. Monero is an incredible currency, it's completely private."
There is a common belief that most of the money in cryptocurrency is still chasing the quick pump and dumps, however as the market matures, more money will flow into legitimate projects such as Monero. Monero's organic growth in price is evidence smart money is aware of Monero and gradually filtering in. The Bitcoin Flaw A relatively unknown blogger named CryptoIzzy posted three poignant pieces regarding Monero and its place in the world. The Bitcoin Flaw: Monero Rising provides an intellectual comparison of Monero to other cryptocurrencies, and Valuing Cryptocurrencies: An Approach outlines methods of valuing different coins. CryptoIzzy's most recent blog published only yesterday titled Monero Valuation - Update and Refocus is a highly recommended read. It touches on why Monero is much more than just a coin for the Darknet Markets, and provides a calculated future price of Monero. CryptoIzzy also published The Power of Money: A Case for Bitcoin, which is an exploration of our monetary system, and the impact decentralised cryptocurrencies such as Bitcoin and Monero will have on the world. In the epilogue the author also provides a positive and detailed future valuation based on empirical evidence. CryptoIzzy predicts Monero to easily progress well into the four figure range. Monero Has a Relatively Small Marketcap Recently we have witnessed many newcomers to cryptocurrency neglecting to take into account coins' marketcap and circulating supply, blindly throwing money at coins under $5 with inflated marketcaps and large circulating supplies, and then believing it's possible for them to reach $100 because someone posted about it on Facebook or Reddit. Compared to other cryptocurrencies, Monero still has a low marketcap, which means there is great potential for the price to multiply. At the time of writing, according to CoinMarketCap, Monero's marketcap is only a little over $5 billion, with a circulating supply of 15.6 million Monero, at a price of $322 per coin. For this reason, I would argue that this is evidence Monero is grossly undervalued. Just a few billion dollars of new money invested in Monero can cause significant price increases. Monero's marketcap only needs to increase to ~$16 billion and the price will triple to over $1000. If Monero's marketcap simply reached ~$35 billion (just over half of Ripple's $55 billion marketcap), Monero's price will increase 600% to over $2000 per coin. Another way of looking at this is Monero's marketcap only requires ~$30 billion of new investor money to see the price per Monero reach $2000, while for Ethereum to reach $2000, Ethereum's marketcap requires a whopping ~$100 billion of new investor money. Technical Analysis There are numerous Monero technical analysts, however none more eerily on point than the crowd-pleasing Ero23. Ero23's charts and analysis can be found on Trading View. Ero23 gained notoriety for his long-term Bitcoin bull chart published in February, which is still in play today. Head over to his Trading View page to see his chart: Monero's dwindling supply. $10k in 2019 scenario, in which Ero23 predicts Monero to reach $10,000 in 2019. There is also this chart which appears to be freakishly accurate and is tracking along perfectly today. Coinbase Rumours Over the past 12 months there have been ongoing rumours that Monero will be one of the next cryptocurrencies to be added to Coinbase. In January 2017, Monero Core team member Riccardo 'Fluffypony' Spagni presented a talk at Coinbase HQ. In addition, in November 2017 GDAX announced the GDAX Digit Asset Framework outlining specific parameters cryptocurrencies must meet in order to be added to the exchange. There is speculation that when Monero has numerous mobile and hardware wallets available, and multisig is working, then it will be added. This would enable public accessibility to Monero to increase dramatically as Coinbase had in excess of 13 million users as of December, and is only going to grow as demand for cryptocurrencies increases. Many users argue that due to KYC/AML regulations, Coinbase will never be able to add Monero, however the Kraken exchange already operates in the US and has XMfiat pairs, so this is unlikely to be the reason Coinbase is yet to implement XMfiat trading. Monero Is Not an ICO Scam It is likely most of the ICOs which newcomers invest in, hoping to get rich quick, won't even be in the Top 100 cryptocurrencies next year. A large portion are most likely to be pumps and dumps, and we have already seen numerous instances of ICO exit scams. Once an ICO raises millions of dollars, the developers or CEO of the company have little incentive to bother rolling out their product or service when they can just cash out and leave. The majority of people who create a company to provide a service or product, do so in order to generate wealth. Unless these developers and CEOs are committed and believed in their product or service, it's likely that the funds raised during the ICO will far exceed any revenue generated from real world use cases. Monero is a Working Currency, Today Monero is a working currency, here today. The majority of so called cryptocurrencies that exist today are not true currencies, and do not aim to be. They are a token of exchange. They are like a share in a start-up company hoping to use blockchain technology to succeed in business. A crypto-assest is a more accurate name for coins such as Ethereum, Neo, Cardano, Vechain, etc. Monero isn't just a vaporware ICO token that promises to provide a blockchain service in the future. It is not a platform for apps. It is not a pump and dump coin. Monero is the only coin with all the necessary properties to be called true money. Monero is private internet money. Some even describe Monero as an online Swiss Bank Account or Bitcoin 2.0, and it is here to continue on from Bitcoin's legacy. Monero is alleviating the public from the grips of banks, and protests the monetary system forced upon us. Monero only achieved this because it is the heart and soul, and blood, sweat, and tears of the contributors to this project. Monero supporters are passionate, and Monero has gotten to where it is today thanks to its contributors and users.
///Key Issues for Monero to Overcome///
Scalability While Bulletproofs are soon to be implemented in order to improve Monero's transaction sizes and fees, scalability is an issue for Monero that is continuously being assessed by Monero's researchers and developers to find the most appropriate solution. Ricardo 'Fluffypony' Spagni recently appeared on CNBC's Crypto Trader, and when asked whether Monero is scalable as it stands today, Spagni stated that presently, Monero's on-chain scaling is horrible and transactions are larger than Bitcoin's (because of Monero's privacy features), so side-chain scaling may be more efficient. Spagni elaborated that the Monero team is, and will always be, looking for solutions to an array of different on-chain and off-chain scaling options, such as developing a Mimblewimble side-chain, exploring the possibility of Lightning Network so atomic swaps can be performed, and Tumblebit. In a post on the Monero subreddit from roughly a month ago, monero moderator u/dEBRUYNE_1 supports Spagni's statements. dEBRUYNE_1 clarifies the issue of scalability:
"In Bitcoin, the main chain is constrained and fees are ludicrous. This results in users being pushed to second layer stuff (e.g. sidechains, lightning network). Users do not have optionality in Bitcoin. In Monero, the goal is to make the main-chain accessible to everyone by keeping fees reasonable. We want users to have optionality, i.e., let them choose whether they'd like to use the main chain or second layer stuff. We don't want to take that optionality away from them."
"Monero has all the mechanisms it needs to find the balance between transaction load, and offsetting the costs of miner infrastructure/profits, while making sure the network is useful for users. But like the interviewer said, the question is directed at "right now", and Fluffys right to a certain extent, Monero's transactions are huge, and compromises in blockchain security will help facilitate less burdensome transactional activity in the future. But to compare Monero to Bitcoin's transaction sizes is somewhat silly as Bitcoin is nowhere near as useful as monero, and utility will facilitate infrastructure building that may eventually utterly dwarf Bitcoin. And to equate scaling based on a node being run on a desktop being the only option for what classifies as "scalable" is also an incredibly narrow interpretation of the network being able to scale, or not. Given the extremely narrow definition of scaling people love to (incorrectly) use, I consider that a pretty crap question to put to Fluffy in the first place, but... ¯_(ツ)_/¯"
u/xmrusher also contributed to the discussion, comparing Bitcoin to Monero using this analogous description:
"While John is much heavier than Henry, he's still able to run faster, because, unlike Henry, he didn't chop off his own legs just so the local wheelchair manufacturer can make money. While Morono has much larger transactions then Bitcoin, it still scales better, because, unlike Bitcoin, it hasn't limited itself to a cripplingly tiny blocksize just to allow Blockstream to make money."
Setting up a wallet can still be time consuming It's time consuming and can be somewhat difficult for new cryptocurrency users to set up their own wallet using the GUI wallet or the Command Line Wallet. In order to strengthen and further decentralize the Monero network, users are encouraged to run a full node for their wallet, however this can be an issue because it can take up to 24-48 hours for some users depending on their hard-drive and internet speeds. To mitigate this issue, users can run a remote node, meaning they can remotely connect their wallet to another node in order to perform transactions, and in the meantime continue to sync the daemon so in the future they can then use their own node. For users that do run into wallet setup issues, or any other problems for that matter, there is an extremely helpful troubleshooting thread on the Monero subreddit which can be found here. And not only that, unlike some other cryptocurrency subreddits, if you ask a question, there is always a friendly community member who will happily assist you. Monero.how is a fantastic resource too! Despite still being difficult to use, the user-base and price may increase dramatically once it is easier to use. In addition, others believe that when hardware wallets are available more users will shift to Monero.
I actually still feel a little shameful for promoting Monero here, but feel a sense of duty to do so. Monero is transitioning into an unstoppable altruistic beast. This year offers the implementation of many great developments, accompanied by the likelihood of a dramatic increase in price. I request you discuss this post, point out any errors I have made, or any information I may have neglected to include. Also, if you believe in the Monero project, I encourage you to join your local Facebook or Reddit cryptocurrency group and spread the word of Monero. You could even link this post there to bring awareness to new cryptocurrency users and investors. I will leave you with an old on-going joke within the Monero community - Don't buy Monero - unless you have a use case for it of course :-) Just think to yourself though - Do I have a use case for Monero in our unpredictable Huxleyan society? Hint: The answer is ? Edit: Added in the Tail Emission section, and noted Dan Bilzerian as a Monero investor. Also added information regarding the XMR.TO payment service. Added info about hardfork
U.S. stock futures were pointing to a higher open ahead of the Monday session, as investors look ahead to a two-day Fed meeting that begins tomorrow. The Dow, S&P 500, and Nasdaq were lower in three of the past four sessions, yet they all posted two consecutive weeks of gains. Halfway through the month, June remains on track to be the best month for the Dow this year. (CNBC)
When Federal Reserve officials meet this week they are expected to clear the way for a July interest rate cut by downgrading their economic forecast, tweaking the language in their statement and reducing their interest rate forecasts. (CNBC)
The Fed won't cut rates at its June meeting. Here's why (CNBC)
Bitcoin continued to rise this morning, after leaping across the $9,000 mark Sunday, boosted by reports that Facebook (FB) is soon set to launch its own cryptocurrency. Bitcoin is up 140% since the start of the year. But it's still more than 50% lower than its all-time high near $20,000 in December 2017. (CNBC)
On today's U.S. economic calendar, the New York Fed's Empire State manufacturing Index is out at 8:30 a.m. ET. The National Association of Home Builders is out with its June sentiment index at 10 a.m. ET. There are no companies reporting quarterly earnings today. (CNBC)
Shares of Array BioPharma (ARRY) were surging about 60% in premarket trading, after Pfizer (PFE) agreed to buy the cancer-fighting biotechnology company for about $11.4 billion. The boards of directors of both companies have approved the transaction. (CNBC)
Democratic presidential candidates approach their first televised debates in a scramble for the 2020 nomination, with former Vice President Joe Biden a vulnerable front-runner, a new NBC News/Wall Street Journal poll shows.
President Donald Trump is ready to proceed with tariffs on the remaining $300 billion in Chinese goods in the absence of a trade deal, Commerce Secretary Wilbur Ross told CNBC today. "We will eventually make a deal, but if we don't, the president is perfectly happy with continuing the tariff movements."
Wilbur Ross: It's 'complicated to negotiate with the European Union' (CNBC)
Huawei will reduce its production capacity, which could hit revenue growth, the CEO of the Chinese tech giant said today, as he revealed his plans to deal with the continued pressure from the U.S. "Our revenue will be down by about $30 billion dollars compared to forecasts, so our sales revenue due this year and next will be about $100 billion." (CNBC)
China's state news agency Xinhua said the country's investigation into FedEx (FDX) should not be seen as retaliation for trade tensions between the U.S. and China. China launched a probe over parcels intended for telecom giant Huawei delivered to the wrong address. (CNBC)
Iran said today it will surpass the internationally agreed levels of its low-enriched uranium levels in 10 days. The country would increase enrichment levels to 20%, significantly closer to bomb-grade material, for use in local reactors. (CNBC)
Iran's elite defense force finds new funding sources as tension rises with U.S.(WSJ)
Raytheon International (RTN) CEO John Harris told CNBC today the Trump administration should not worry about the company's merger with United Technologies (UTX). "The combination has little to no overlap," Harris said. Last week, the president told CNBC he's a "little concerned" about how the deal could harm competition. (CNBC)
Boeing CEO Dennis Muilenburg believes the safe return of its best-selling plane, the 737 Max, is the company's most important objective. "This is a different show for us, it is not about orders," Muilenburg told CNBC. The 737 Max was grounded in mid-March after two fatal crashes involving those jets.
Target (TGT) said its registers are back online after outages over the weekend that prevented shoppers from making purchases on Saturday, and some from using credit cards on Sunday. The retailer said neither problem was caused by a cyberattack. (CNBC)
Apple (AAPL) CEO Tim Cook warned that Silicon Valley companies needed to take responsibility for the "chaos" they create, in a speech at Stanford University. He mentioned no companies by name, but made a reference to disgraced startup Theranos. (CNBC)
Pfizer – The drugmaker is buying Array Biopharma for $48 per share in cash, or $11.4 billion, including debt. That’s a 62% premium over Array’s Friday close. Array specializes in treatments for diseases where there is a large unmet need, as well as cancer drugs.
Boeing – Boeing CEO Dennis Muilenburg told reporters at the Paris Air Show that it will take time to win back the confidence of its customers following the two fatal crashes involving the 737 Max jet. He also said the company had failed to communicate properly with regulators and customers about problems with a cockpit warning system.
Lockheed Martin – Lockheed executive Greg Ulmer said he is not concerned that the proposed merger of Raytheon and United Technologies would affect the F-35 program or put pressure on its profit margins. Ulmer is program manager for the F-35.
Deutsche Bank – Deutsche Bank plans to create a so-called “bad bank” to hold billions in non-core assets, according to Reuters. The move is said to be in conjunction with an overhaul of the bank’s trading operations.
Alibaba – Alibaba is proposing an eight-for-one stock split, in a move designed to increase flexibility in capital raising. The proposal will be brought up at the China e-commerce giant’s July 15 annual meeting.
Goldman Sachs – Goldman will combine four of its units that invest in private companies into one new operation, according to The Wall Street Journal. The paper said the newly created unit would be nearly as big as KKR and about one third the size of Blackstone.
Target – Target said its registers are back online after outages over the weekend that prevented shoppers from making purchases on Saturday, and some from using credit cards on Sunday. The retailer said neither incident was caused by a cyberattack.
FedEx – China’s state news agency Xinhua said the country’s investigation into FedEx should not be seen as retaliation for trade tensions between the U.S. and China. China launched a probe over parcels intended for telecom giant Huawei delivered to the wrong address.
A quick note to investors that believe the intrinsic value of bitcoin is 0 because they can't do a DCF on it: this isn't the place to argue with me about it. I suggest you read a bit more about what it actually is (hint: not a currency). I've defended its value in plenty of other posts on this sub. It's a $40+ billion market, so at least a few people agree with me. I welcome you to short the crypto of your choice if you think it's worth nothing. This is a post for folks that believe that cryptocurrencies have at least some discernible value and are considering investing in them.
If we have a strength, it is in recognizing when we are operating well within our circle of competence and when we are approaching the perimeter. – Warren Buffett
Given the tripling of the cryptocurrency market cap in the last few months and the 3- to 10-fold increases in virtually every major altcoin, cryptocurrencies like Ethereum and of course Bitcoin have been getting a stunning amount of attention in the press and on this subreddit recently. If you follow the cryptocurrency world closely, you know that there have been a huge amount of dubious ICOs (initial coin offerings) on the market recently. It's an explosive time in crypto. It's also a frustrating time for many long term bitcoiners and crypto fans, because we're faced with a barrage of questions from outsiders who see the returns and want to buy in to the "next big thing" and make a quick buck. This is a warning to those people. Everyone is a genius is a rising market. It's hard to go wrong these days in crypto. Even coins of dubious merit like Ripple, Dogecoin, Stellar, NEM were pumped 5 times without any fundamental change. Speculators/investors have thrown money at crypto indiscriminately and efficient markets have 100% broken down. The altcoin pump right now is roughly comparable to the Dot Com crisis of the early 2000s.
New tech promises to change the world
Investors jump in on hype and promises
A surge of IPOs (ICOs) occurs to capitalize on this
"Greater fool" traders pile in, thinking they can make money even if the underlying is unsound
Analysts claim "this time is different" while seasoned old hands refuse to participate
Tech is proven not to be as developed as everyone thinks, market tanks
Select few decent companies survive, all the trash is destroyed
Tech eventually fulfills expectations, 10 years later, but none of the investors from the early days make money on it
However, canny (and skeptical) investors can still make money on crypto, as cryptocurrencies are inevitable, and will continue to expand and proliferate, even when the altcoin crash comes. Something to realize first of all is that the crypto market is heterogeneous. It has straightforward cryptocurrencies (bitcoin, litecoin, dash, monero), smart-contract cryptos (ethereum, ethereum classic) and a whole bunch of crypto tokens that follow dedicated platforms (golem, augur, steem). Not mentioned are ripple and stellar because they aren't really cryptocurrencies at all. The investing theses for all of these categories is radically different. The measure of success for a currency or store of value is adoption, merchant use, low volatility, a large network, and real world acceptance as something worth owning. Bitcoin has this right now, which is why it's more than 50% of the ecosystem, and none of its competitors are even close. Monero, Zcash, and Dash are a special case in that they try and make transactions anonymous and privacy, allowing for use cases on the darknet markets, for instance. The tech underlying bitcoin is essentially sound, although it is having a scalability crisis, which you should read about. It can't right now serve as a currency which will buy you a cup of coffee - the transaction fees are too high. However if you want to send $200,000 from Mexico to Indonesia or China to the Philippines, you can do it within 20 minutes, and with fees of a few dollars. And if you want to store your wealth in a vault that is totally secure, and cannot be debased by a central bank, bitcoin is a good bet. This is highly relevant to folks in India that just had cash abolished, to Venezuelans, to Argentines, to Cypriots, to Nigerians, anywhere local currencies are weak and volatile. The potential value of a competing cryptocurrency lies in whether it can improve materially on bitcoin, whether it means incorporating off-chain scaling (segwit with litecoin), making it more private and fungible (monero), automating governance (decred), and so on. Then there are cryptoassets that incorporate smart contracts. These – ethereum and its derivatives – exploded when the SEC denied the Bitcoin ETF back in march and bitcoiners got worried and started diversifying. This is the market segment that is highly risky, even by crypto standards, in my opinion. Ethereum is a protocol that allows contracts to self-enforce. Programming power to run the contracts is paid for with ethereum. Two parties agree to a contract, and it then self-executes. It's secured by a decentralized computing network of ethereum miners, so the contracts cannot be shut down by a government or corporation. It's pretty clever. Last year, a $150+ million contract was drawn up with ethereum, which would act like a venture capital fund, picking good investments just based on the votes of the token holders. This was called a Decentralized Autonomous Organization, and it was hacked before it could do anything. Well, it was exploited based on the code and so the exploit was totally "fair" given that the contract was meant to be inevitable, once agreed to. However, the creators of Ethereum didn't like the idea of losing $50 million, so they decided to collectively agree to amend the rules of the protocol itself (violating "Code is Law"), and jump onto a new one, which they would also call Ethereum, although it was really Ethereum 2.0. Some people got upset by this, because they thought that immutability and not arbitrarily rolling back the code was more important than some investors losing money because of poorly written code. They created Ethereum Classic, which is the original Ethereum chain. This wasn't what the Ethereum 2.0 folks thought would happen, but it did happen, so there are two competing Ethereum chains now. Eventually, lots of decentralized apps were funded, via tokensales. A development team would say: "we're going to use ethereum to create a decentralized cloud computing/AI/prediction/gambling/timestamping/social media network." And then investors would buy the tokens, expecting that eventually the dev team would deliver, and the tokens would be in demand, since they would be required to use the network. It's a bit like buying in-game-currency when the game is announced, anticipating that the game would be wildly popular and you'd be able to sell it on later at a profit or acquire it cheaply to buy in-game items later on. However, many of us think that the promises are a bit extravagant, and that investors in these ICOs are probably going to lose money. The incentives aren't well aligned. Founders can just not deliver and run off with the money, and there's no regulatory body to enforce that. And for Ethereum more broadly, many people are worried that the turing-completeness of the language will mean it will face serious threats and unforeseeable hacks, like with the DAO. Finally, Ethereum has increased from around $20 to $90 in a matter of months, which raises the question of whether a) the market realized its true value or b) it was pumped on speculation. There's a huge set of unknowns with a smart contract currency, and virtually none of the promised dapps are up and running right now, and the ones that are haven't really attracted large userbases or delivered. This is because the tech is in its infancy, and the developers are still learning how to use it properly. So we won't know if these sorts of decentralized networks are even possible to create on the timelines that investors are expecting. Therefore, ethereum investors buying it on the promise of the realization of this tech in the near future are almost guaranteed to be disappointed. Additionally, ethereum is making the switch to the largely untested Proof of Stake algorithm, which will change incentives that secure the network. This brings me to my key point: Stay within your circle of competence. You can grow your circle – slowly. Cryptoassets are almost impossibly complex to grasp with just a cursory look. Investing in them requires weeks of reading and a very skeptical view. The above was an introduction to cryptocurrencies, the different ones on offer, and why investing in ethereum is not the slam dunk everyone thinks it is. This portion of the post will tell you about the kind of due diligence you need to do if you want to invest, rather than speculate, in crypto. The first thing to mention is that passive investing in crypto has historically been a terrible strategy. Just buying bitcoin almost always outperformed. This was due to the poor set of altcoins, and the size of bitcoin's almost insurmountable network effect. This sort of changed in March and April when bitcoin's dominance went from 80% to ~50%, and it remains to be seen if this will persist or not. But the point is, buying the index is usually an awful strategy in crypto, particularly because there are so many truly awful projects out there. So what does it take to invest responsibly in cryptocurrencies? It requires at least a basic understanding of three disciplines: public-private key cryptography; programming, and how open-source projects function; and economics, particularly game theory and the quantity theory of money. This is why is is so difficult to apprehend easily: because very few people actually boast a sincere understanding of these three topics. I certainly don't. You need to be able to determine whether the tech is actually going anywhere, and whether the task the developers have set themselves is possible or realistic. You need to know how open source networks are governed, and which models strike the best balance between efficiency of decision-making and fair consensus. You need to be able to measure the inflation schedule of the cryptocurrency, and see whether your coins are going to inflated away. You need to be able to make plausible guesses about the potential market for the crypto and estimate future values. Note that the payoff structure is not equity-like. It's more like early stage venture capital, or buying loss-making biotech companies. Here's my checklist of questions to answer, ordered by importance:
Does the project offer a significant improvement over its nearest competitor, or a reasonable chance of success in its stated aim? Is there a demand for this project? Does it have a concise and reasonable goal? (Narrower goal: higher likelihood of success).
Is the development team competent? Are they committed to the coin? What's their track record? Is is an active dev team? Do they have a roadmap for the future? Are they transparent about goals?
How is the development team funded? Is the currency corporate-backed? Is the funding transparent? Was the coin significantly premined? (Usually bad) Are developers paid via iterative community project crowdfunding? (Usually good).
What is the governance structure of the currency? Who holds ultimate control over decisionmaking? How are decisions made? Are they transparent? Are mining/developer incentives aligned?
Does the asset have acceptance and use today? Does it have a functioning use case? If it doesn't, does it have a decent chance of being accepted?
Has the asset's "market cap" tripled or quintupled in the last few months? Was this based on any fundamental changes (new software releases, etc) or just speculation?
What are the transaction volumes like? (Hint: divide market cap by monthly averaged daily on-chain tx volume to find a consistent ratio) What's the ratio of on-chain transaction versus exchange speculation? Has price gone up independent of transaction volumes?
How long has the asset been around? Think of the Lindy effect. Older is usually better.
What's the community like? Is there censorship? Does it have an active subreddit? Do the developers answer questions? Are they accessible? How big is the github community? (Hint: you can divide market cap by github commits to find a comparable ratio).
Are you psychologically able to hold this coin in a 90% downturn? Is this a high conviction thesis or are you betting on being able to sell it to a greater fool?
How long did it take you to learn about investing in equities? Reading balance sheets, running DCF and DRI models, figuring out how to value a stock based on comparables? Years? How many mistakes did you make before you figured out how to be responsible? Cryptos are an asset class that is both radically different from anything that has existed before. They are also incredibly heterogeneous, as I argued above. It also leads to cultism – so bitcoiners generally take a dim view of ethereum, and vice versa. Monero fans generally don't like dash, and so on. You have to keep your mind open to understand new opportunities as they arise, and to stop yourself becoming too mentally invested in your project of choice. The vast majority of projects will fail within 5 years, so becoming overly certain of the success of one will probably devastate you. If you can stay balanced, stay honest about your crypto's chances of success and adoption, not get tunnel vision, and not take overly risky positions, you have a good chance of not losing everything. Remember the payoff structure. Heavily rightward skewed. A ton of cryptos earn no return and a select few earn an absurd (1,000-10,000x) return. None of this is necessary if you just want to invest randomly in one of the top ten cryptos. That's the strategy of 95% of investors today. Pick a coin and go. If it's not bitcoin, I can pretty much guarantee you'll lose money. The newer, the worse. I've not made an effort to convince you that cryptos have intrinsic value. If you've made it this far, you probably think they're worth something at least. However, they're probably not worth as much as the market is pricing them at right now. Especially not those in the ethereum family. I'm not going to tell you what to invest in, because that would defeat the purpose of this post. I'm telling you to do your due diligence before blindly buying a crypto. And that due diligence on ethereum is as complex and difficult as Tesla or Amazon DD. And that your skills in equity valuation are pretty much useless in this asset class. My circle of competence doesn't extend to options or lean pork futures, so I don't touch those. I suggest that until you really feel comfortable in crypto, you don't buy randomly. Summative thoughts:
Investing in crypto is hard
90% of people that invest at market peaks will lose money
You have to extremely skeptical and invest in high-conviction positions
Cryptos are exhibiting bubbly behavior right now, it's a pretty bad time to pick one out
Cryptos are nothing like equities but they do have real value
Cryptos are the future, but almost none of these coins will survive 10 years
The older the better
Governance is key
These are speculative positions, only invest what you can tolerate losing
You can make money investing in cryptos
Passively investing in cryptos doesn't work
It's a winner takes most market, there won't be 1 crypto that wins. There will be different cryptos for different use cases.
edit: deleted chart with probabilities of success because of subjectivity and oversimplification. edit2: I've been overwhelmed with PMs so bear with me. also, please forgive any spelling errors on this post. I wrote it in one frenzied sitting. edit3: I knew I would get a fair amount of resistance from ethereum investors (even though I attempted to keep my post as balanced as possible) but I was unprepared from the breathtaking volume of spam and diversity of attacks. One particular user has made 30 comments in this thread. I don't have a stake in ETC, period. The post is 3000 words long and most of it is about how to properly do your due diligence in a crypto. if ethereum fares poorly by standard due diligence metrics, then perhaps your issue is deeper than one post on /investing. final edit: there have been some broken-hearted ethereum fans very busy organizing brigades against this post, and attacking me personally, and so on. It's all very incovenient. I can tell that I struck a nerve. This post isn't really about ethereum - it's about how to do research in crypto, and why you can't expect to profit handsomely without that due diligence. I mentioned ethereum because there are 3 or 4 breathless posts on here a day about its stunning gains and whether it's worth investing in. My answer: read about it first, from a diverse set of sources. A final note: I do not own any ethereum classic, I have never owned ethereum classic. I brought it up because it is part of the ethereum story, and an example of what happens when you have a contested hard fork. I do hope that ethereum succeeds, I am just cautioning against over exuberance.
Need help figuring out if a dom is trying to scam me
I apologize if this is super long winded. I am completely new to the BDSM world. A few weeks ago I started talking to a Dom through a site called AdultFreindFinder(she contacted me) and i'm now pretty sure its a scam but I would like a few others opinions to see if my hunch is correct. I am going to post the transcripts of our email exchange and hopefully someone with more experience can shed light on this for me. on AFF chat: Her: I'm new here and the website sent me your profile and says you are my new match, I don't know if you got my profile as well. After checking your profile out and seeing our compatibility chart is very high, I guess we might be a match after all. So this what I am looking for, am looking for a submissive pussy licking sex slave who is interested in BDSM/Kinky play, the key word here being SUBMISSIVE and BDSM/KINKY play. I know this is not for everyone, but if this something you want or dream about we can fulfill your fantasies together do check out my profile and send me a message ASAP. Mistress Ann. P:S This is going to be a soft BDSM sex slave, very mild bondage, this will be exploring more of pleasure than pain. Disregard this message if you don't have any submissive tendencies at all. Me: This is intriguing and I am interested in learning more about you and the domain of submission. I will be honest and say that I have very little experience in the kinky play area but I consider myself very open to experience. Her: Perfect let's continue this conversation in a more private environment. What I seek is a smart, intelligent, obedient and eager to serve sub and I think that might be you. Reply this message with your email address so I can contact you and set in motion the process to make you my submissive slut just because I don't get on here as much as I would like and I wouldn't want to leave you in limbo about making you my sex slave... Mistress Ann. Me: At this point I give her a throw away email address Chat moves to email: Her: I'm very pleased to be contacting you via regular email, the little exchanges we have had so far shows that our interest is aligned. This is the first step into making you all that you can become in serving and making me happy and in the process satisfying you as well and you need to be dominated by such a beautiful lady as myself in a real-life scenario. This is not a trail for you to know and discover if you are submissive or not. For this, to work you have to know you are submissive and ready to stay submissive. If at this point you are unsure, I'll advise you to stop reading this email now, ignore it and not reply so no more time is wasted cause this is going nowhere if you are not truly submissive. If you have kept on reading and sure you are submissive then we can move forward and proceed. I expect you to always be honest with me to be my slave, respecting me goes without saying slave you must always remember that you are the slave always in this relationship, therefore, I make all the decisions in this dynamic and you must always refer to me as MISTRESS. Like I previously pointed out and am sure by now you know that for this to work on any level you have to be submissive not playing at it. You will be dominated and toyed with by me for both our pleasures and the full spectrum of BDSM which may include, ass worship, anal penetration (mine), physical humiliation, psychical punishment (yours), forced masturbation, as long as its within your boundaries,you will be punished accordingly if you fail to attain my goals of you pleasing me. I will have variations of cute names that I will call you such as slut pie, sex slut you will answer to these names when I call you. Anything public is of limits for me slave, I value my privacy very much, this means that all our plays will only be behind closed doors to assure maximum discretion, at no point will I send you any nude pictures of me via any medium even after our sessions have started. I hope you are insatiable as I am and ready to go on for long hours to please me, slave. During our plays protection will be paramount until such a time that you can show me that you are clean, safe and disease free as I am. For now, you are under a period of evaluation that will help me to determine if you are suitable to be my slave in the long term cause that's my ultimate goal. Since we have established that you are indeed submissive I don't envisage any problems with making you my slave and that process can start after you have replied this email. Your Mistress Ann. Me: Yes Mistress. Her: Excellent my slave, I'll like to start with knowing your name. Mistress Ann. Me: I give her my nickname Her: I am a mature and sexy 36-year-old woman, divorced and originally from Germany. I came over here 5 years ago back when I was still married to my husband. I was married for 4 years and divorced for 2.My whole life is here now a slave and am looking forward to making you a part of it. I don't know the caliber of women you have come across in your life but there is none in my class. I have been an active player in this lifestyle for a while and know what am doing, of course, you are welcomed to make your thoughts known if you think they are contrary to mine but with respect, remember you are the slave always. I am a bisexual domme with experience of unparalleled domination and alluring control. I want to make you my slave with my understanding of the Psychological and Physical aspects of this lifestyle. I am strict when the occasions call for it and sensual and provocative when I choose to be. I am quite generous and you have to be as well to be my slave. Like I emphasized in my previous email we are moving ahead because I am sure by now you know for sure that you are submissive that this is definitely for you, so you won't have any problems relinquishing control to me slave? I can be free early in the day or late in the evening depending on my workload, I can work around your availability as well, let me know what times you think are best for you my slave. I want to start spending time with you ASAP slave, am ready to meet and start training you, you do however have to satisfy all of my criteria to be my acceptable slave slut and this you will know in due time my slut, its a short process that you must go through. At least we should be able to have at least a session together within a 2 week period, we will be able to manage this more effectively after a couple of sessions together. Training will be at my place for straight up sessions, we met on a sex site we both know that our aim is sexual gratification, so there will be no wining and dining just making our fantasies and desires a reality. My fantasies and desires are more "BD" and very much less of "SM".So there will be no sadistic intentions towards you my slave. There will be more of role-playing and playing with sensual toys and accessories my slave, am familiar with almost every scenario of role-playing my slut, just keep in mind my slut whatever role we are playing Sexy professor and student, Sexy nurse, and patient whatever it is am always in control. I am a mistress with little limits, dominant very strict and caring, I have been a mistress for a pretty long time, as a lifestyle choice and I have experienced almost every fetish, either with slaves that I have owned myself or at fetish parties with my other dommes friends. However, I would love to know your limits so it can help me in molding you to be my perfect slave. I live in Oakland, so planning for our sessions with being easier and less stressful. We live in close proximity to each other we can have short sessions of about 2-3 hours at regular intervals. I have further instructions for you.I'm dead serious about being the ONLY mistress you can have other filings(non-dominant girlfriend/wife) but I must be your only mistress, when you are with me, I want your full attention if you are going to be the slave for me I hope you are, if by now you still have others(dominant women), I want you to get rid of them and that is my first order to you and it requires your maximum obedience. Your second task is to send decent pictures of yourself to me in your next email no dick pics slave, I want to see what you look like and reply with more details about you using my email as a source of inspiration. Your Mistress Ann. (she sent me pictures of herself in lingerie as well at this point) Me: Mistress, I am ready to submit and be your slave. I am a 29 year old single man, never married and no significant women in my life currently. I am 5'8" tall and have a fit/athletic build. I have never had a mistress before and I look forward to being your slave. I trust you and only you to be my mistress. I think its admirable that you are so true to yourself and know who you are and what you want. I am happy to serve you and be a part of that vision. My schedule shifts from week to week, there are times when I am very busy or out of town and other times when I am free. Later in the evening/night can work for me more consistently, however morning may also be open depending on the day. If I am in town weekends are generally open and available. This we can work out on a session to session basis and I will do my utmost best to conform to your preference. I would also like to start ASAP. I am okay with the frequency of at least 1 session every 2 weeks, however I am open to increasing this as you train me to be your slave. This can start as soon as tomorrow(Sunday 5/5). I will be unavailable from 5/8-5/13 as I will be out of town. In terms of my limits, I am fairly open to most things on the "BD" side of things. I feel as you train me and our relationship as mistress and slave grows that my hard and soft limits will become more clear as I gain understanding of how I will be serving you and what types of things we will be doing. One hard limit I have currently is not overextending my right shoulder backwards as I recently injured it and it is in the later stages of healing. This should not be a problem after a few more weeks. In terms of the "SM" side of things, you have already mentioned that this will be limited given your desires for me as your slave. That being said I am not comfortable with severe physical abuse resulting in excessive bleeding and scarring especially on commonly exposed areas of the body such as the face. As I mentioned earlier these limits will evolve as we journey down this path. I have attached pictures of myself for you. I recently decided to get rid of my hair and have included pictures of me both with and without. I don't take many pictures of myself. Please let me know if you would like more. I am ready to relinquish control to you and give you my undivided attention. Your slave Her: I Wore Up Thinking About Using You My Sex Slave You arrived as instructed at your Goddess home for training to commence. You knock on the door and wait. I open the door and using my finger signal for you to enter. I point to the floor, you remove your clothing and fold it neatly and place them in the corner, you turn around and then get down onto your knees and lower your head, and place your hands behind your back. I place a collar on your neck, then I secure your hands behind your back. I then instruct you to look at me, as you raise your head I start to remove my clothes. I notice you becoming extremely hard and excited from seeing your Goddess remove her clothes, standing there with only her bra and panties on, I instruct you to remove my already soaked panties being so wet expecting you since using your teeth. You come closer to me on your knees and gently get your teeth on the waistband of my panties and slowly work them down, moving around me and focusing on the waistband of my panties. As you finally remove my panties, I have already removed my leash and now I look down on you attaching the leash to your collar and say," slut, if you are very good in your training today you will be rewarded very generously" you reply, yes Mistress." I then lead you to the side of the bed with you leash like my little slut bitch that you are... I take the bonds of your hands and tell you to get on the bed, no on the bed I tie your hands to the headboard and your legs to the foot of the bed and then I start smothering you with my pussy while I popped your cock and balls with my crop (gently). I'm grinding my pussy in your face wiping my nectar all over you, and the sweet smell of juicy wet pussy and the stinging from my crop made your sissy cock so hard. Soon I'll cum in your face and force you to eat all of it. Then I take some clamps and placed them on each of your nipples. You grit your teeth as the sharp pinching sensations running through your body. Your mistress pops your cock and balls again with her crop turning your throbbing cock harder and harder. She pauses and then gently strokes it with her hand and spits on it. Mistress leans down and takes your cock in her mouth. She strokes up and down giving you firm bites along with your cock head and shaft as she goes. Then your mistress climbs on top of you and allows you to feel her pussy slide down on your cock while she tugs on the chain attached to the nipple clamps. You grimace in the sweet pain that makes you thrust up deep inside her. You so want to grab her and grind inside her, but she has you tied, and you are at my mercy as I tease you by pulling my pussy off of you and pulling on your nipples again. She uses her crop to spank your cock once again. I continue this cycle repeatedly training your cock to be obedient to my pussy until finally your Mistress mounts you for the final time and bounces up and down and back and forth on your grinding her clit down on you till you can hold it no longer. At that moment, Mistress gives a gentle yank on the nipple clamps and I cum so hard and intense feeling the sweet pain run down your body and through your cock as you erupt inside me. Your Very Horny Mistress Ann. Me: I want nothing more than to please you mistress. Your desires are one with my desires. Please use me. Her: My Sex Slave, I am very happy getting to know you better and glad I choose you to be my fucktoy bitch slave. Your words portray respect, readiness, and willingness to serve as my worthy sub. I am going to do everything to make you my perfect slave, through light and erotic assignments, teasing and other activities that will bring your true submissive nature out to the surface my fucktoy slut. Been a lifestyle domme my slut, am not in a mistress mode all the time, when our relationship takes off there will be some flirting, kissing and touching that might be considered vanilla a scenario where we just enjoy each other and not necessarily in a Mistress/slave setting. However, keep in mind that our relation stems from a Mistress and slave dynamic and you must remember you are the slave always. I do a little volunteer work when I can and am a registered member of the red cross. I work as an interior designer and decorator, it can be quite a tasking job with deadlines and perfectionist clients but I like to push myself as much as I can and I enjoy it. I am excited and looking forward to the memorable times we'll share together as Mistress and slave. This is my evaluation so far my fucktoy bitch slave ***, through our communication, you have opened up to me my slave and with a little training, you can become my perfect male slut. Your response to my erotic email very enthusiastic my slave and it showed me that indeed you are ready to become a fucktoy bitch slave. We'll proceed with starting our session. I'll get back to you on the dates and times we can begin. Reply ASAP. Love Your Mistress Ann. Me: Mistress, The more I learn about you, the more I feel like I have to learn from you. I am ready to begin this new relationship with you as your slave. I hold volunteer service in a high respect and am turned on by the fact that you do work for the greater good. I am eager to begin training with you. Nothing would make me happier than to be the slave you want me to be even in those times where you are not in mistress mode, I am your slave. I have actually recently become interested in interior design of small intentional spaces for the purpose of creating the most ideal environments to support mind, body and soul. I would love to learn from you in that way as well. My anticipation to serve you grows by the minute, I look forward to hearing back from you. Your humble slave Her: My pussy licking cum slavetoy I want you to grab my ass in ecstasy while I ride your face with my juicy wet pussy. I want our bodies to connect on a spiritual level with our hands, fingers, breathe and everything else sensually entwined. I have a very wild imagination and I would love to help you reach your highest point of pleasure as you serve me, I want to take you on a journey (long term) if you prove worthy of my SUPREMACY. Your cock is mine to do with as I please my fucktoy bitch slave, this means you can only cum with my permission slave, from now on, no jerking off with my permission slave. I will teach you to make me squirt uncontrollably, I'll convert you into a fully automated pussy licking, ass worshiping slave puppy. My panties are soaked thinking about using you my fucktoy slut love ***, we can have our sessions on the 15th and 17th and we can start in the morning around 11 am or evening around 5 pm on these dates. Let me know my fucktoy bitch slave if this timeline works for you. If we proceed from this point my slave there will be some financial commitments for both of us. I have different approaches I used in training my slaves in the past my slave, I will study you my slave and determine what specific technique to use in teaching you all the different ways to please me. I have had 3 long term subs in the past my slave, one before I was married, another briefly about a year ago and I currently own a female slave that I play with from time to time,she is an air hostess so don't get to play with her as much as I would like which prompted my search for a male slave,I've been looking for a male slut for a little time now and I think I have found the perfect slave in you my slut. Looking forward to putting my collar of possession on you my slave and attach your leash and walk you around in your true submissive nature, you must not disobey my direct orders and wish slave, to please me you must always follow my instructions when it pertains to our mistress slave relationship. Respond ASAP Your Mistress Ann. (she sent me regular clothes pictures in this email(same woman from previous as per pictures) Me: The way you convey your desire through words is unparalleled. You paint a picture in my imagination that only makes me want to serve you more mistress. My primary purpose is to serve you and fulfill your deepest desires, anything above that is a mere bonus. My pleasure is secondary to your will and I will do anything to please you. I cant wait to be trained to be everything you want me to be. I can already feel the tension and its growing. You are now in control of my sexual impulses. The journey has already begun. I will worship you as the goddess you are. Lead and I will follow. The 15th and the 17th works for me, I am not entirely sure of my work schedule yet. Lets tentatively meet in the morning on the Wednesday the 15th and in the evening on Friday the 17th. I am open to the financial commitments. I'm curious about what this will entail? I know that from the moment I lay eyes on you, I will be lost in your ocean. Unable to do anything but surrender. Your humble slave Her: My fucktoy bitch slave, we'll begin our session on the evening of the 15th my fucktoy bitch slave ***. I am sure you know any form of relationship at some point will involve some financial decisions (dinner, the occasional gift and such).In a relationship like this, the financial decisions come early on in bondage clothing, bondage tools, and toys my fucktoy bitch slave to augment our experience. I enjoy been dominant so am Mistress, not a Dominatrix so I don't do this for money and I don't expect you to pay for sessions or anything like that my slave, however for our fantasies to become a reality and sessions reach its sexual satisfying peak there are tools needed to augment that experience my slave. Your Mistress Ann. Me: Yea I expected all of that. Is there anything you would like me to get prior to our first session mistress? I want to be as ready as possible so that I may be able to serve you to the best of my ability. Your slave Her: My Fucktoy Bitch Slave, Your darkest passions still lie dormant inside you my fucktoy slut, I haven't even begun to tap in your full total submissiveness, my slave. These desires are waiting, sweltering and pulsing with every breath waiting for your Goddess to awaken them with just a single touch and mold and stimulate you into perfection. I will be hosting our training session at my home in Oakland my fucktoy bitch slave. I will like to spend at least spend up to 3 hours with you my fucktoy bitch during our first session, our first time together is going to be quite exciting, you and I are going to discuss at length what's about to happen in our session together and both decide on a safe word if one as to be chosen. Like I mentioned my slave we at the point where a financial commitment is required. There are a few tools and equipment that have to be available before our sessions begin my slave. I don't use bondage tools that have shared with the previous slave, these are going to be new and exclusive for you and me my fucktoy bitch slave. I have discreet supplier my fucktoy bitch slave and a list of which includes but not limited to Deluxe SS/Leather Collar,Locking Men‘s Chrome Collar w/ Ring,KinkLab Double-Lock Police-Style Handcuffs,Nylon Rope, 25-ft,Adjustable Wrist,Corinthian Corset Dress,leather chastity Briefs With Penis Hole,Nipple Clamps and Cock Ring Set,Pjur Back Door Glide,Envy Five Rechargeable Silicone Vibrator. So am ready and willing to make a commitment to making you my slave by paying at least half of this cost of the toys right now, I presume that you are willing, ready and able to do the same before our training begins my fucktoy bitch slave. If you are unable to make this commitment at least 2 days before the date your training starts now my slave, we will have to reschedule for another time. This is a one time only payment and these are the tools we will continue to use as long as you are my fucktoy bitch ***. Your quota my slave will be $800 and you will make payment to the toys' supplier my fucktoy bitch in readiness for our session to begin. This will show me that you are indeed ready and willing to be committed to being my sissy fucktoy bitch. I will be waiting for your response Love Your Forever Mistress Ann. Me: Yes mistress, I am out of town. I apologize for the delayed responsiveness, I am away from my computer and phone most of the time while I am here. I will be back in town on Monday night or Tuesday morning. Please advise me of further details about the next steps and I will do my best to proceed within the given time frames that you provided. My fire to serve you grows every day. Your slave Her: My fucktoy bitch slave ***, I hope you are having a great time at the festival, my slave. I'm super excited as well my fucktoy bitch slave, can't stop thinking of using you my slut. Planning on getting a collar with maybe your name on it my fucktoy bitch slave what do you think. Like I alluded to my slave you'll be making payment for your share of the bondage gear directly to my supplier. She is a mistress as well very versed in the lifestyle, reliable and I always get my bondage tools from her. The method of payment will be bitcoin, my slave. Are you familiar with bitcoin? Love Your Mistress Ann. Me: Mistress, Forgive me for my lack of responsiveness, I did not get back from my trip until yesterday and had work straight away until 8pm. I am not too familiar with bitcoin. That being said, I dont quite understand why all this discretion needs to take place in the acquisition of simple items for our sessions. It seems a bit much given that we haven't met yet. Her: Ok, slave ***, first you don't reply to my emails on time and now you are the expert on what as to happen before we begin our sessions? Thats where we've left off so far and im not sure if I should continue conversing with her or if I should just call it quits. It seems sketch that the acquisition of these toys/items will be done through her friend and that its paid for using bitcoin. This feels like a textbook toys scam to me but a very well played one. That being said if it isn't I can only imagine the things that will ensue....
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