If you put $1,000 in bitcoin 5 years ago, here's what you ...
If you put $1,000 in bitcoin 5 years ago, here's what you ...
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P2P Bitcoin Derivative Trading Through the Blockchain: Equities, Bonds, Forex & Commodities
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You can find GMcoin at crex24 and soon at other exchanges. Today its value reached $ 0.01 usd c/GM This year our goal is to reach $ 1 usd https://gmholding.info/ #blockchain #community #bitcoin #transparency #success #gold #confidence #creation #alliance #trading #economy #innovation #collaborative
Traded in my worthless currency (fiat) into more peer to peer money (Bitcoin Cash) today. Feels good man, feels really good. I don't like losing value of my money every year due to central banks printing and inflating the money supply or banks/governments freezing/stealing my money. Feels good man!
12-30 09:12 - 'Bitcoin fall in value only makes it perfect for a new investment. Im still making so much bitcoins through crypto trading using my unique strategy. Invest with me today. Contact whatsapp at +15186286937' by /u/michael11195 removed from /r/Bitcoin within 11-21min
Traded in my worthless currency (fiat) into more peer to peer money (Bitcoin Cash) today. Feels good man, feels really good. I don't like losing value of my money every year due to central banks printing and inflating the money supply or banks/governments freezing/stealing my money. Feels good man!
In September, this decentralized exchange (DEX) overtook Coinbase in trading volume:
A) UniswapB) AaveC) CompoundD) Both A and B Scroll down for the answer.
Ranking and September Winners and Losers
2020 Top 10 Rank Lots of movement this month: six out of the Top Ten changed positions in September. BCH climbed one from #6 to #5 and BNB made a big move from #10 to #6. Going the opposite direction were BSV, EOS, and Tezos, dropping one, two, and four places respectively. The big story though, at least for anyone who’s been watching crypto for a while, was the ejection of Litecoin from the Top Ten. In just 30 days, LTC fell five places from #7 to #12. For some context, Litecoin’s absence from the Top Ten is a Top Ten Experiment first. It is also the first time since CoinMarketCap has tracked crypto rankings that Litecoin has not has not held a spot in the Top Ten. Drop outs: after nine months of the experiment, 30% of the cryptos that started 2020 in the Top Ten have dropped out. LTC, EOS, and Tezos have been replaced by ADA,LINK, and most recently, DOT. September Winners – Winner, singular: BNB was the only crypto to finish in the green, finished up +25% for the month, and gained four places in the rankings. A very good month for Binance Coin. September Losers – Tezos was the worst performing crypto of the 2020 Top Ten portfolio, losing nearly a third of its value, down -31% for the month. LTC also had a bad month, losing -24% and dropping out of the Top Ten. Since COVID-19 has hammered the sporting world, let’s be overly competitive and pit these cryptos against each other, shall we? Here’s a table showing which cryptos have the most monthly wins and losses nine months into the 2020 Top Ten Crypto Index Fund Experiment: Wins/Losses ETH is in the lead three monthly Ws, followed by Tether and Tezos with two wins each. Even though it is up +79% since January 1st, 2020, BSV has the most monthly losses: it has been the worst performing crypto of the group four out of the first nine months in 2020.
Overall update – ETH maintains strong lead, followed by BNB. 100% of Top Ten are in positive territory.
Ethereum remains firmly in the lead, up +187% on the year. Thanks to a strong month for BNB and a weak month for Tezos,Binance Coin has overtaken XTZ for second place, and is now up +109% in 2020. Discounting Tether (no offense Big-T), EOS (+4%) is the worst performing cryptocurrency of the 2020 Top Ten Portfolio. 100% of the cryptos in this group are in positive territory.
Total Market Cap for the cryptocurrency sector:
The overall crypto market lost about $35B in September, ending the month up +85% since the beginning of this year’s experiment in January 2020. Despite a rough month, this is the second highest month-end level since the 2020 Top Ten Experiment started nine months ago.
Monthly BitDom - 2020 BitDom ticked up slightly this month, but is still lower than it has been for most of the year. As always, a low BitDom reflects a greater appetite for altcoins. For context, the BitDom range since the beginning of the experiment in January 2020 has been roughly between 57% and 68%.
Overall return on investment since January 1st, 2020:
After an initial $1000 investment on January 1st, the 2020 Top Ten Portfolio is now worth $1,536, up +56%. This is the best performing of the three Top Ten Crypto Index Fund Portfolios, but not by much: the 2019 Top Ten came in at +54% in September. Here’s the month by month ROI of the 2020 Top Ten Experiment, hopefully helpful to maintain perspective and provide an overview as we go along: Monthly ROI - 2020 Top Ten Even during the zombie apocalypse blip in March, the 2020 Top Ten has managed to end every month so far in the green (for a mirror image, check out the all red table you’ll find in the 2018 experiment). The range of monthly ROI for the 2020 Top Ten has been between a low of +7% in March and high of +83% in August. So, how does the 2020 Top Ten Experiment compare to the parallel projects?
Taken together, here’s the bottom bottom bottom line for the three portfolios: After a $3000 investment in the 2018, 2019, and 2020 Top Ten Cryptocurrencies, the combined portfolios are worth $3,340 ($238+ $1,538 +$1,564). That’s up about +11% for the three combined portfolios, compared to +31% last month. Here’s a table to help visualize the progress of the combined portfolios: Combined ROI - UP +11% That’s a +11% gain by buying $1k of the cryptos that happened to be in the Top Ten on January 1st, 2018, 2019, and 2020. But what if I’d gone all in on only one Top Ten crypto for the past three years? While many have come and gone over the life of the experiment, five cryptos have started in Top Ten for all three years: BTC, ETH, XRP, BCH, and LTC (Big L, no pressure, but if you don’t claw yourself back in the Top Ten by January 2021, you’re out of the club). Let’s take a look: Three Year Club At this point in the Experiments, Ethereum (+104%) would have easily returned the most, followed by BTC (+77%). On the other hand, following this approach with XRP, I would have been down nearly a third at -31%. So that’s the Top Ten Crypto Index Fund Experiments snapshot. Let’s take a look at how traditional markets are doing.
Comparison to S&P 500
I’m also tracking the S&P 500 as part of my experiment to have a comparison point to traditional markets. The S&P slipped a bit from an all time high in August and is now up just +5% in 2020. Over the same time period, the 2020 Top Ten Crypto Portfolio is returning about +56%. The initial $1k investment in crypto is now worth about $1,563. That same $1k I put into crypto in January 2020 would be worth $1050 had it been redirected to the S&P 500 instead. That’s a $513 difference on a $1k investment, one of the largest gaps in favor of crypto all year. But that’s just 2020. What about in the longer term? What if I invested in the S&P 500 the same way I did during the first three years of the Top Ten Crypto Index Fund Experiments? What I like to call the world’s slowest dollar cost averaging method? Here are the figures:
$1000 investment in S&P 500 on January 1st, 2018 = $1260 today
$1000 investment in S&P 500 on January 1st, 2019 = $1350 today
$1000 investment in S&P 500 on January 1st, 2020 = $1050 today
So, taken together, here’s the bottom bottom bottom line for a similar approach with the S&P: After three $1,000 investments into an S&P 500 index fund in January 2018, 2019, and 2020, my portfolio would be worth $3,660. That $3,660 is up +22%since January 2018, compared to a +11% gain of the combined Top Ten Crypto Experiment Portfolios over the same period of time. That’s an 11% swing in favor of the S&P 500 and breaks a two month mini-streak of wins from the Top Ten crypto portfolios. For those keeping track or unable to see the table above: that’s seven monthly victories for the S&P vs. two monthly victories for crypto. The largest gap so far was a 22% difference in favor of the S&P back in June.
September saw losses for both traditional and crypto markets, but crypto got hit harder. What can we expect for the rest of 2020? The Neverending Year is entering the final quarter and is not finished with us yet: a lot can and will happen in the remaining months. More volatility is no doubt to come as we enter the final stretch of a truly unpredictable and exhausting year. Buckle up. Stay healthy and take care of yourselves out there. Thanks for reading and for supporting the experiment. I hope you’ve found it helpful. I continue to be committed to seeing this process through and reporting along the way. Feel free to reach out with any questions and stay tuned for progress reports. Keep an eye out for the original 2018 Top Ten Crypto Index Fund Experiment and the 2019 Top Ten Experiment follow up experiment.
Putting $400M of Bitcoin on your company balance sheet
Also posted on my blog as usual. Read it there if you can, there are footnotes and inlined plots. A couple of months ago, MicroStrategy (MSTR) had a spare $400M of cash which it decided to shift to Bitcoin (BTC). Today we'll discuss in excrutiating detail why this is not a good idea. When a company has a pile of spare money it doesn't know what to do with, it'll normally do buybacks or start paying dividends. That gives the money back to the shareholders, and from an economic perspective the money can get better invested in other more promising companies. If you have a huge pile of of cash, you probably should be doing other things than leave it in a bank account to gather dust. However, this statement from MicroStrategy CEO Michael Saylor exists to make it clear he's buying into BTC for all the wrong reasons:
“This is not a speculation, nor is it a hedge. This was a deliberate corporate strategy to adopt a bitcoin standard.”
Let's unpack it and jump into the economics Bitcoin:
Is Bitcoin money?
No. Or rather BTC doesn't act as money and there's no serious future path for BTC to become a form of money. Let's go back to basics. There are 3 main economic problems money solves: 1. Medium of Exchange. Before money we had to barter, which led to the double coincidence of wants problem. When everyone accepts the same money you can buy something from someone even if they don't like the stuff you own. As a medium of exchange, BTC is not good. There are significant transaction fees and transaction waiting times built-in to BTC and these worsen the more popular BTC get. You can test BTC's usefulness as a medium of exchange for yourself right now: try to order a pizza or to buy a random item with BTC. How many additional hurdles do you have to go through? How many fewer options do you have than if you used a regular currency? How much overhead (time, fees) is there? 2. Unit of Account. A unit of account is what you compare the value of objects against. We denominate BTC in terms of how many USD they're worth, so BTC is a unit of account presently. We can say it's because of lack of adoption, but really it's also because the market value of BTC is so volatile. If I buy a $1000 table today or in 2017, it's roughly a $1000 table. We can't say that a 0.4BTC table was a 0.4BTC table in 2017. We'll expand on this in the next point: 3. Store of Value. When you create economic value, you don't want to be forced to use up the value you created right away. For instance, if I fix your washing machine and you pay me in avocados, I'd be annoyed. I'd have to consume my payment before it becomes brown, squishy and disgusting. Avocado fruit is not good money because avocadoes loses value very fast. On the other hand, well-run currencies like the USD, GBP, CAD, EUR, etc. all lose their value at a low and most importantly fairly predictible rate. Let's look at the chart of the USD against BTC While the dollar loses value at a predictible rate, BTC is all over the place, which is bad. One important use money is to write loan contracts. Loans are great. They let people spend now against their future potential earnings, so they can buy houses or start businesses without first saving up for a decade. Loans are good for the economy. If you want to sign something that says "I owe you this much for that much time" then you need to be able to roughly predict the value of the debt in at the point in time where it's due. Otherwise you'll have a hard time pricing the risk of the loan effectively. This means that you need to charge higher interests. The risk of making a loan in BTC needs to be priced into the interest of a BTC-denominated loan, which means much higher interest rates. High interests on loans are bad, because buying houses and starting businesses are good things.
BTC has a fixed supply, so these problems are built in
Some people think that going back to a standard where our money was denominated by a stock of gold (the Gold Standard) would solve economic problems. This is nonsense. Having control over supply of your currency is a good thing, as long as it's well run. See here Remember that what is desirable is low variance in the value, not the value itself. When there are wild fluctuations in value, it's hard for money to do its job well. Since the 1970s, the USD has been a fiat money with no intrinsic value. This means we control the supply of money. Let's look at a classic poorly drawn econ101 graph The market price for USD is where supply meets demand. The problem with a currency based on an item whose supply is fixed is that the price will necessarily fluctuate in response to changes in demand. Imagine, if you will, that a pandemic strikes and that the demand for currency takes a sharp drop. The US imports less, people don't buy anything anymore, etc. If you can't print money, you get deflation, which is worsens everything. On the other hand, if you can make the money printers go brrrr you can stabilize the price Having your currency be based on a fixed supply isn't just bad because in/deflation is hard to control. It's also a national security risk... The story of the guy who crashed gold prices in North Africa In the 1200s, Mansa Munsa, the emperor of the Mali, was rich and a devout Muslim and wanted everyone to know it. So he embarked on a pilgrimage to make it rain all the way to Mecca. He in fact made it rain so hard he increased the overall supply of gold and unintentionally crashed gold prices in Cairo by 20%, wreaking an economic havoc in North Africa that lasted a decade. This story is fun, the larger point that having your inflation be at the mercy of foreign nations is an undesirable attribute in any currency. The US likes to call some countries currency manipulators, but this problem would be serious under a gold standard.
Currencies are based on trust
Since the USD is based on nothing except the US government's word, how can we trust USD not to be mismanaged? The answer is that you can probably trust the fed until political stooges get put in place. Currently, the US's central bank managing the USD, the Federal Reserve (the Fed for friends & family), has administrative authority. The fed can say "no" to dumb requests from the president. People who have no idea what the fed does like to chant "audit the fed", but the fed is already one of the best audited US federal entities. The transcripts of all their meetings are out in the open. As is their balance sheet, what they plan to do and why. If the US should audit anything it's the Department of Defense which operates without any accounting at all. It's easy to see when a central bank will go rogue: it's when political yes-men are elected to the board. For example, before printing themselves into hyperinflation, the Venezuelan president appointed a sociologist who publicly stated “Inflation does not exist in real life” and instead is a made up capitalist lie. Note what happened mere months after his gaining control over the Venezuelan currency This is a key policy. One paper I really like, Sargent (1984) "The end of 4 big inflations" states:
The essential measures that ended hyperinflation in each of Germany,Austria, Hungary, and Poland were, first, the creation of an independentcentral bank that was legally committed to refuse the government'sdemand or additional unsecured credit and, second, a simultaneousalteration in the fiscal policy regime.
In english: *hyperinflation stops when the central bank can say "no" to the government." The US Fed, like other well good central banks, is run by a bunch of nerds. When it prints money, even as aggressively as it has it does so for good reasons. You can see why they started printing on March 15th as the COVID lockdowns started:
The Federal Reserve is prepared to use its full range of tools to support the flow of credit to households and businesses and thereby promote its maximum employment and price stability goals.
In english: We're going to keep printing and lowering rates until jobs are back and inflation is under control. If we print until the sun is blotted out, we'll print in the shade.
BTC is not gold
Gold is a good asset for doomsday-preppers. If society crashes, gold will still have value. How do we know that? Gold has held value throughout multiple historic catastrophes over thousands of years. It had value before and after the Bronze Age Collapse, the Fall of the Western Roman Empire and Gengis Khan being Gengis Khan. Even if you erased humanity and started over, the new humans would still find gold to be economically valuable. When Europeans d̶i̶s̶c̶o̶v̶e̶r̶e̶d̶ c̶o̶n̶q̶u̶e̶r̶e̶d̶ g̶e̶n̶o̶c̶i̶d̶e̶d̶ went to America, they found gold to be an important item over there too. This is about equivalent to finding humans on Alpha-Centauri and learning that they think gold is a good store of value as well. Some people are puzzled at this: we don't even use gold for much! But it has great properties: First, gold is hard to fake and impossible to manufacture. This makes it good to ascertain payment. Second, gold doesnt react to oxygen, so it doesn't rust or tarnish. So it keeps value over time unlike most other materials. Last, gold is pretty. This might sound frivolous, and you may not like it, but jewelry has actual value to humans. It's no coincidence if you look at a list of the wealthiest families, a large number of them trade in luxury goods. To paraphrase Veblen humans have a profound desire to signal social status, for the same reason peacocks have unwieldy tails. Gold is a great way to achieve that. On the other hand, BTC lacks all these attributes. Its value is largely based on common perception of value. There are a few fundamental drivers of demand:
Means of Exchange: if people seriously start using BTC to buy pizzas, then this creates a real demand for the currency to accomplish the short-term exchanges. As we saw previously, I'm not personally sold on this one and it's currently a negligible fraction of overall demand.
Criminal uses: Probably the largest inbuilt advantage of BTC is that it's anonymous, and so a great way to launder money. Hacker gangs use BTC to demand ransom on cryptolocker type attacks because it's a shared way for an honest company to pay and for the criminals to receive money without going to jail.
Apart from these, it's hard to argue that BTC will retain value throughout some sort of economic catastrophe.
BTC is really risky
One last statement from Michael Saylor I take offense to is this:
“We feel pretty confident that Bitcoin is less risky than holding cash, less risky than holding gold,” MicroStrategy CEO said in an interview
"BTC is less risky than holding cash or gold long term" is nonsense. We saw before that BTC is more volatile on face value, and that as long as the Fed isn't run by spider monkeys stacked in a trench coat, the inflation is likely to be within reasonable bounds. But on top of this, BTC has Abrupt downside risks that normal currencies don't. Let's imagine a few:
A critical software vulnerability is found in the BTC codebase, leading to a possible exploitation.
Xi Jinping decides he's had enough of rich people in China hiding their assets from him and bans BTC.
Some form of bank run takes hold for whatever reason. Because BTC wallets are uninsured, unlike regular banks, this compounds into a Black Tuesday style crash.
Blockchain solutions are fundamentally inefficient
Blockchain was a genius idea. I still marvel at the initial white paper which is a great mix of economics and computer science. That said, blockchain solutions make large tradeoffs in design because they assume almost no trust between parties. This leads to intentionally wasteful designs on a massive scale. The main problem is that all transactions have to be validated by expensive computational operations and double checked by multiple parties. This means waste:
BTC was estimated to use as much electricity as Belgium in 2019. It's hard to trace where the BTC mining comes from, but we can assume it has a huge carbon footprint.
A single transactions is necessarily expensive. A single transaction takes as much electricity as 800,000 VISA transactions, or watching 50,000 hours of youtube videos.
There is a large necessary tax on the transaction, since those checking the transaction extract a few BTC from it to be incentivized to do the work of checking it.
Many design problems can be mitigated by various improvements over BTC, but it remains that a simple database always works better than a blockchain if you can trust the parties to the transaction.
Carney highlighted the dollar’s use in international securities issuance, its use as the primary settlement currency for international trades and the fact that companies use dollars as examples of its dominance. However, “developments in the U.S. economy, by affecting the dollar exchange rate, can have large spillover effects to the rest of the world.”
In an article published by ID2020 in 2018, vaccines are the perfect way to introduce digital identity to the world – especially infants. This identity would also be used to grant access to basic rights and services.
Your new digital ID will then be matched with your new digital currency issued by your central bank. They will have the absolute, uncontested right to decide whether you can have access to basic rights and services, or not. It will only take a click on the mouse to deny your access to basic rights and services. And you won't know the reason. It could be for wrong thinking, it could be to pursue another political agenda to eliminate whichever community they decided they need to eliminate. We have seen plenty of evidence this year about the strong political bias that big social media platforms have. Now, with the constant monitoring and analyzing of our data, they can easily tell what are our political opinions. And therefore have your access to basic rights and services denied with a click, if you have the 'wrong' political opinions. And I don't see why they would not do that. In a very close future, you could end up in a situation where you have to choose between being allowed to eat, or vote for the candidate you don't like, but that the system endorses. It's literally the end of democracy, and freedom, and there is no going back once we have switched to this new system. All the above is not even a conspiracy. It's merely about connecting the dots, and understanding the implications. edit: here is a video of Accenture, one of the founding partners of id2020, explaining about the digital dollar I think covid was a catalyst to bring all these changes. Who else than the international financial system has the ability to have all countries on the planet to comply with such severe restriction rules that send their respective economies and societies down the toilet ?
I like Square as a company and see a lot of people are bullish about it. However, a few things stop me from investing. Be interested to hear thoughts but at the moment I am a Square bear. Management Jack Dorsey is a visionary. I don’t think this is controversial. However, his track record at Twitter is worrying for shareholders. Be it daily active user growth, ambition with acquisitions but ultimately failure to monetise a fantastic platform where you have big corporations, celebrities and even the President reaching out to 200m daily active users for free. With Square, the closed loop business model of businesses and consumers is again a fantastic concept that could break the power of Visa/Mastercard. Execution remains to be seen, of course. Competition Square operate in a highly competitive field for consumers and businesses. Let’s take consumers based on Square’s fast-growing Cash App. It offers things a normal bank does like deposits, ATM access, money transfer. If it becomes a fully-fledged bank offering loans, credit; it is competing against the likes of big incumbents (e.g. JP Morgan, Bank of America). Granted they’re dinosaur firms but they already have a huge customer base that are older and, therefore, have more money and deposits. This means it is much easier for them to monetise their customers resulting in high ARPU. Why would these lucrative customers, en-masse, want to uproot their finances to Square when their existing providers will be providing the same service by copying Square, as JP Morgan have done this week? Link For businesses, Square’s provides software offering (invoicing, PoS, online store) but face strong competition from the likes of Shopify who are taking a fully integrated service approach to SMEs which allows them to take their business online but also manage all their backend processes, including payments. This is a highly convenient service for entrepreneurs. Shopify already has 6% share of the online retail market. Square also provides hardware products which make it easy for SMEs, in particular, to take payments. However, there is evidence that retail is facing a more permanent shift in the US vs. the rest of the world with 60% less footfall today than a year ago Link. 58% of Square’s GPV is from food/drink, retail and professional services. Square may have good market share but it is a shrinking industry. And as a final piece, competitors in both spaces are generally in very healthy financial shape: Paypal, Shopify, Global Payments, Western Union and big banks are well-capitalised. Valuation Perhaps you can get over the above with the fact that Square has strong network effects and are able to win customers cheaply. However, in my opinion, Square is priced for perfection. Simply looking at a price/sales metric, it is trading 13x LTM. This is high but maybe relatively reasonable for a fast-growing business. However, 25% of Square’s revenue is accounted by Bitcoin “revenue”. This brings little value to Square (2% gross profit) and even Square themselves discount this revenue in their KPIs because it is “out of their control and not reflective of Square’s performance”. Now onto profits. It is not fair to be too hard on Square’s profitability. After all, it is in high growth phase and its marketing costs were its highest opex line item at roughly 35% for YTD. However, a cursory look at it is Enterprise Value / EBITDA (forward look to Dec2020), it is 242x. If we give credit for Square’s business plan for a further two years, today’s Enterprise Value over broker consensus forecast EBITDA for 2022, it is still a heady 77x. This is when Square is supposed to have EBITDA of $1bn which is three times more than it is forecast for Dec 2020. Priced to perfection. If you compare it to Paypal, it is trading at 39x and 27x EV / EBITDA for Dec 2020 and 2022. Conclusion Square has formidable backers like Ark Invest. I am also not a great believer in “dumb retail” overvaluing a stock for a prolonged period of time. But for reasons above, I am cautious with Square and yet it keeps climbing so please tell me what I am missing…
EDIT : Thanks to everybody for pointing out the few mistakes/improvements that can be made in this new-player level guide. For the sake of summarizing here : - Intel documents are NOT worth 250k. I didn't check them on the flea before writing this and for some reason I always remembered them at 250k. Game is in maintenance so I can't check the real price. That being said, it's still profitable to craft USB into Intel, it's just not x2 profitable. - Scav case : moonshine / intel docs, some people seem to say they've never been profitable. I personally *did not* measure those, I eyeballed it. I'm working on so much shit that I didn't bother. On average I think that I'm in a net positive, but it's as believable as people saying they're not : without proof we can't really say for sure. That bein said, it's certainly more profitable to run lower-tier scav runs that are *faster* when you're online, and to run a moonshine or intel when you log off. It's more efficient to get a lot of runs while you can re-start them every time. - Crafting moonshine : It's not profitable to spam it ; I was under the assumption that the average player who will read this will usually not play for 4-5 hours straight and will end up collecting yesterday's moonshine, craft a new one, and that's it. If that's you're rythm then yes, spam it. If you intend to play more than one craft worth's of time, then you will craft moonshine faster than you can spend it, and it's not really worth to sell it on the flea except to up your market reputation for a small loss (about 10k). So in short : craft moonshine to be able to start a moonshine run for when you log off, but you don't *need* more than that.
Check this out
Here is some actual data on the lavatory !! Hey everybody ! I know it can be a struggle to get a stable economy in this game, especially when you die a lot. Today I'm gonna try and give a few guidelines on how to make money safely, efficiently, fast, or in any other way we can think of. If you're struggling to stay above the 15-20 million rouble treshold, this guide is definitely for you. Very often I'll hear newer players say "Damn I can't seem to make money, I keep loosing. Every time I take gear I die instantly". There is some truth in that. Today I'll help you improve your survival rate, but most importantly I'll unbalance the other side of the equation. When you complain about losing a lot of money, I will help you spend less by a significant margin, as well as earn more. You'll also get rid of gear fera naturally. Remember this throughout this very, very long read : It all depends on how you want to play, and how much. Some of these tips will not fit how you want to play the game, and like Nikita always says : this game is supposed to be fun before anything else.
Safety Score : 100% Reward : Moderate but very stable. Maxing your hideout should be one of your top priorities, probably before telling your mom how much you love her every now and then. If you're not doing either of those, the big gamer in you knows what to do. Early wipe, save your fuel for when you're online and playing. If you're playing, your generator should definitely be running and all your stations should be crafting something. Once you have Medstation 1, Workbench 1 and Lavatory 2, you really have no reason to turn your generator off when you're playing. Once you have the bitcoin farm, you should never turn off the generator. Medstation : Craft salewas and/or IFAKs permanently. They cost 8k and sell for 15k. That's a net profit of about 25k / hour for salewas, as well as never having to buy any. Lavatory : Always be crafting Bleach. If you have 2 empty blue fuel, use those empty cans to craft a Magazine case. You can then keep the magazine cases until you've enough for your liking and sell those for a good profit. The bleach you will use to buy the 6B47 helmets which are better than the SSh-68 helmets. Buying from 2x bleach barter at ragman level 1 means you get the helmet for 18k (instead of 33k on the market). This helmet has better head coverage, less slow/negative effects, less weight, has a slot for a mount, has +11 ergonomics AND is cheaper than the 22k SSh-68. That being said, it has a slight noise reduction that the Ssh does not have. If you wear headphones I'd say this is negligible but debatable. I prefer to have the extra protection and ergonomics for sure, considering it's slightly cheaper. You can also barter for that helmet and instantly sell it back for a profit (five times) and level up ragman money requirements. Bleach can also be traded for the Blackjack backpack at level 4, as well as the TTV rig at level 2. You should definitely do it. Sell excess bleach on the flea market when the prices are around 10.5k or more. (around midnight Central European Time). Workbench : You can buy Power Cords and craft Wires forever and always make a profit. Buy in the morning and sell in the evening for better profits (CET timezone). For even more profit, you can craft gunpowders and ammo which tend to also be ridiculously pricy at night. Buying grenades from Peacekeeper and crafting green (Eagle) gunpowder is a good way to make a lot of money and level up Peacekeeper. Intel Center : You main objective is to get this one to level 3 for reduced fees and better quest rewards, but also access to the bitcoin farm at level 2. If you need FiR for quests, craft that. When you're done craft Intel Documents at all times (buy the USB), and use it for scav case or sell for a x2 profit. ( 3x40 for USB = 120, documents sell for 250) Bitcoin Farm : Once you have it, spend all your money on GPU until its maxxed, then level it up even more. The BTC farm is definitely worth it. At 50GPU you need to connect every 15 hours to clic. If you can't, keep it level 2 and connect every 24 hours to clic. Even at level 1 its worth. But its much, much faster at higher levels. From 0 to 50 GPUs it takes about 30 days to pay for itself. GPUs should not be sold until you maxxed it. Water Collector : Must be running at all times. Buy the components if you don't have them. Booze Generator : Must be running at all times. Buy the components if you don't have them. Scav Case : Always have it running on moonshine, and use intel documents once you're done crafting one. Nutrition Unit : It's not really worth crafting sugar to put in the Booze gen, as the price for chocolate is pretty much = the price of sugar. So buy the sugar instead and craft something else. I tend to craft Hot Rods when the prices are good (morning) and then use them to barter 5.45 BS Ammo with Prapor or sell for a profit. If you do all that, you should have about 150k an hour fairly easily. Don't forget to check it between every raid.
Safety Score : 100% Reward : Quite good. Once your mom has received all the love she deserves and your hideout is taken care of, you should have max traders (traders are a requirement for most of the hideout anyway). Traders level 4 will net you much better prices on most mods and open very good barter trades. Buy as much as you can from barter trades. You can buy almost everything from it, and it's usually at least 25% cheaper to buy the requirements and then do the barter. Ragman4 has the CPC Armored Rig which is level 5 armor, you'll get it for about 200k instead of 250k on the flea. The Slick is also much cheaper. The Blackjack backpack is literally half priced. You can also NOT use what you barter and just sell it back to a dealer (sometimes the same from which you bartered) for a profit as well as having 2 times the loyalty money increase (from bartering then from selling). Another good example is buying a Recbat 14k from the market, getting an ADAR for skier, selling it to Mechanic and winning 8k just like that. You can find every single barter that nets a profit yourself and just buy-resell and you'll probably make another 100k every reset, if you really are struggling and have the patience. I personally advise to just use the equipment for yourself unless you're levelling traders, but I wouldn't go as far as buying all profitable items every reset. Every trader at every level has good barters. You can make a full decent kit at level 1 traders for about 40k roubles on barter, instead of 90 if you buy it all. (Paca for masks, helmet for bleach, ADAR for recbatt, salewa from craft, backpack, etc. all barters) Bleach is beautiful and is coveted in the real world for its ability to cure diseases.
Safety Score : 100% Reward : Very profitable. Don't mod out of your reach. Don't mod Meta. If money is an issue for you, having +1 ergo won't change your life. For example, Priced at 10k roubles Priced at 45k Roubles See where I'm going with this? If you have money, sure, go for the Shift. If you wanna have fun and try, sure, go for it as well. But if you're struggling, buy 4 cobras and mod 4 guns for the price of 1% recoil which will not make you a gamer god anyway. Also, do NOT buy mods from the flea market when you see you can buy them from traders. Look at the top of the market, if the mod is greyed out, look at the price. It means you don't have access (yet). If the price is too inflated for you, find another mod. There are always other mods. You can make 2 AKMs that have a difference of 2% recoil and 4 Ergonomics and have a 150k price difference. It's up to you. When money is the issue, this was the answer. Note : Some guns are inherently much more expensive. Guns shooting 5.56 or 5.45 tend to be more expensive than 7.62. AKMs are VERY good budget guns. They're a bit harder to handle, but you can get a fully modded AK for 150-200k, where as you will have an entry level M4 for that price. 7.62 PS ammo is also incredibly cheap while being decent. Play 7.62 if you're struggling with money. It's not meta, but it's far more than enough, trust me. You'll rarely lose fights exclusively because you had PS ammo in an AKM. Rarely.
How much you usually extract with, on average, per map
How much you usually go in raid with, on average, per map
These will help us measure how much you fuck up or not. Lets make it simple. If you have a 500k loadout and you usually extract with 100k, at 10% survival rate, that means you will spend 500k x 10 = 5.000.000 roubles over 10 raids on average, die 9 times, and earn 100k once. This very obvious example shows the loss. Basically we're gonna try and balance that equation so that you never lose money on average. You'll have ups and downs obviously, but over a week or two, it'll smooth things out for you, like math always does in a pleasant conversation with a girl. So what can you do to improve that equation ?
4.1 Improve survival rate
Seems simple enough, DIE LESS. You do not need to be good, smart, or special to die less. If you die a lot, do something different. If you die less, try more of that. Explore statistical advantages through different gameplay. What can you do to die less practically? Here is a list of checkboxes you can tick depending on your money, skill, mood, or any other factor like the map and sheer luck:
Fight from a bigger distance. People miss more from far (so will you, but killing less is irrelevant when you want to die less)
Fight with better gear (supressed, better armor, better ammo, etc.). Its expensive, but it technically helps
Don't fight at all. Avoid fights, run away from gunshots. 99.3% of people who didn't get shot survive a raid.
Wait more, play slowly. If you go with the flow of players, you'll be with the players. Avoid that "wave" and stay behind it. When you come across players trying to extract to where you spawned, hide.
Play with friends if you have any. If not, your mom loves you and so do I. I do coaching so do a lot of other decent players, look it up.
Whenever you die, look at what killed you. Did you take a risk ? Did you lack skill ? Were you out of position ? Were you unlucky ? Try to be as OBJECTIVE as possible even in the frustration. It's pretty much always your fault if you died, avoid toxicity and learn something from that instead. If you took a fight with good gear and ammo and just lost, its probably skill/positioning. It's fine. Learn the game, fight differently, and with time it'll get better. If you were in the open, don't go in the open. If you were sprinting in the middle of interchange and got ambushed, well. Don't do that. Learn.
Do all that, it'll give you a LOT of data to actually improve by just doing something different without really being fastestronger, just smarter. And I repeat : you can do some of it, all of it, it depends on what you like, what you're comfortable with, and the time/investment you're putting in the game. It's okay to play at your own pace.
4.2 Reduce gear cost
The second part of our "profit equation" above is how much gear you take with you. Using previous tips, reduce that cost. Barters, cheaper mods, etc.
4.3 Increase extracted value
This one is not as tricky as it sounds. Basically there are two ways to extract with more money in the backpack :
Know what/where to loot
Have a bigger backpack.
The goal is to pay for the gear you will loose when you die while making a profit on top. That one time you extract if you have a MBSS backpack, you'll need items worth like 50k per slot to break even. If you take a tri-zip, suddenly it's only 30k per slot. If you take a blackjack and blackrock from good old ragman, suddenly it's 10k per slot. So you can break even by looting crickents and DVD players almost. See where I'm going ? Always take a tri-zip or bigger unless you're doing something special. That way you can afford to loot shitty areas, take less risk, and survive more while having a little less value. We'll cover that in a minute, but there are ways to loot high value items, moderate value and low value. Those have also different risk/reward. All of those are also map specific. In woods I'll often go with a 6B3TM armored rig for 40k, no helmet, 20k headphones and a sniper rifle. Rest is pouched so does not count. That's less than 100k investment. All players tend to have low value gear so I never extract with a lot either so it balances out. But on Woods, my survival rate is 20% instead of my overall 40%. So I know it's not a map I can reliably make money on, because I measured that accurately over time. This example is very common and should make sense to you. Same goes for interchange where I have more about 50% survival but will tend to go in with 600k worth of gear, but will also often extract with over 500k quite regularly. Different ratios, different values, different purposes. You can measure your own data if you're willing to do so, or you can eyeball it. Eyeballing it is much faster but very inaccurate because you will tend to include emotions in the mix when you die. You'll remember losses ~2x more than your wins (that's somewhat scientifically proven), and if you're eyeballing your loadout you might think you have 600k but really you might have only 450k. I would advise to go hardcore and measure it all for price, initial loadout, losses and earnings, for each map.
5. Money runs
Now money runs are vast and numerous. All include different levels of risk and reward. It's up to you once again to find what you're willing to do for the time it takes, the fun it will give you and how much it will actually help you. You can always try them all for ~50 raids the sake of trying something different and see how your data is impacted. it doesn't have to be 50 in a row if you don't want to. As long as you keep track of it it can be over a whole wipe. You'd have your data ready for the next wipe :) Faster is better though.
5.1 Hatchling runs
Safety Score : 100% Reward : Very Variable. Mentally exhausting. Those are incredibly money efficient. You're investing a gear of 0 value, so whatever you extract with is 100% win, so you cannot possibly lose money that way. Is it fun? Is it rewarding? I don't care, to each is own. Statistcally speaking, hatchling runs are an efficient way to make money. They do however require a little bit of knowledge, but not skill. You'll be much more efficient at doing these kind of runs if you know where to go, what to look for, and how to get there depending on your spawn. That being said, such knoweldge is easily found ; it's nothing complex, it just takes time to learn. Once again, depends on how much you're willing to invest (if not roubles, time).
5.2 Scav runs
Safety Score : 100% Reward : Low-ish Scav runs are also incredibly efficient for the same reason as hatchlings. Except those have a cooldown. Statisticall speaking I have noticed you should always run your scavs as fast as possible on the map where you extract both the fastest and most frequently. The explanation is simple, lets make it simpler : The scav is a button that makes you earn free money. When you press it the button becomes unpressable for some time, when you release the button you earn money (sometimes). That means you want to release the button as often as possible. And for that, you need to release it as fast as possible. It's that simple. So make scavs incredibly fast. I'm talking "Run through" fast. Unless you're looking for FiR items or doing something specific like annoying a streamer, you should literally run straight to the extract every single time, and loot what you have that doesn't make you go out of your way too much. Usually I suggest factory, go in, kill a random scav, loot it, get out. Two weapons is at LEAST 50k, 100 if they have a scope. There you go. That's 100k every 20 minutes (or less with intel center). That's MUCH BETTER than going up to 150-200k but taking 30 minutes to extract, and taking more risk by spending more time in the map. Every second you're in someone can shoot. Nobody can shoot you in the hideout. The exception to that rule is Scavs with a pilgrim which you can take on your favourite loot-run map, probably interchange or reserve. There you should just fill everything you can and extract once you're full, no matter what you have. 30 crickents and an extra gun is fine.
5.3 Stash runs
Safety Score : Very Reward : Okay Those are very very safe and can be done with a pistol and a backpack only. Very cheap, quite unchalleneged, for a moderate reward. Just go on a map that you like and run around and loot all stashes until you're full, then get out. You can vary the map/route depending on the traffic of players. Interchange and shoreline are good contenders for that. It'll net you easy money. Not great money, but definitely safe.
5.4 Loot Runs
Safety Score : Moderate Reward : Quite alright Once you have better knowledge/skill you can start having a specific route in a specific map, depending on a specific spawn. So it'll take time to learn. Usually very similar than a hatchling run except this time you bring moderate gear and go for moderate loots. For example, instead of going for fast techlight, in-and-out interchange, you can decide "alright I'll loot 100% of Oli and the computers in the back", it'll take time, but it'll make good loot. More money than stashes, definitely will see scavs to kill, and most probably some more pvp. More risk. If you win that PvP you have even more loot as well. But overall good reward. Loot runs need to be "scheduled" and thought of after several tries, so you know how much you can take per person depending on backpack size. For example you can't say "lets loot oli" if you have a 5-man with blackjacks, you'll all be empty. Adapt.
Safety Score : Insane Reward : Unreliably moderate This one is pretty obvious. Very risky, unpredictable rewards. Usually better than loot runs when you survive. I won't elaborate on this, because if you're reading this far you're probably struggling in PvP. And the rest of this guide already covers a fair bit.
Safety Score : "Meh" Reward : Very profitable. Now this is very, very important. Always insure your gear. Always. If you die you will get stuff back, pretty much for free. If you're really struggling people won't loot your "trash", so you WILL get it back. If you play in a group it's very likely that people will hide your stuff too. And most importantly : you can insurance fraud. This is the best way to balance the equation we talked about earlier. If you find a decent-ish gun, replace yours. You drop your initial investment by a significant margin, you will definitely get it back, and if you extract it's a flat profit. Weapons don't take inventory slot, so if you have two weapons that are not yours initially they will usually pay for your whole gear. I have quite often left my super-mega-modded HK just for an average M4 or other weapon that I can fight with, just so I can reduce my investment by 350k and up my reward by like 200k instantly. Replace your headphones all the time too, that's an easy -30+30k, same with helmets. even if it's a bit broken or slightly worse. If you're struggling with money, try to leave every raid with at least 3-4 pars of your equipment that aren't yours initially. But value the risk behind this. I won't leave my slick for a Paca at the third minute of a raid just to have that extra 28k. I won't leave my meta-modded HK for a naked mosin. But if it seems decent/doable, do it. It will pay off. Because even if you die, you still get your shit back, and gun is usually the most expensive part of the gear.
7. Final notes
It's all about balance. Find what works *for you* and try shit out. Really, try. You'll die, you'll learn, you'll adapt with data to back that up. I find it crazy that people will die and not try to learn from it. That's how you will improve as a player. First you gotta get smarter, then you'll get better. And with time, skill, mechanics, gamesense, all that will improve on the side. Earning more will snowball in your favour. And if you know you're statistically okay, you will have a much smaller gear fear and enjoy the game more. Sorry for the wall of text, you guys should be used to it with me by now :D I made these guides in video but not in english, so here I am typing it all for you guys. Enjoy :)
A common sentiment is brewing online; a shared desire for the internet that might have been. After decades of corporate encroachment, you don't need to be a power user to realize that something has gone very wrong. In the early days of the internet, the future was bright. In that future, when you sent an instant message, it traveled directly to the recipient. When you needed to pay a friend, you announced a transfer of value to their public key. When an app was missing a feature you wanted, you opened up the source code and implemented it. When you took a picture on your phone, it was immediately encrypted and backed up to storage that you controlled. In that future, people would laugh at the idea of having to authenticate themselves to some corporation before doing these things. What did we get instead? Rather than a network of human-sized communities, we have a handful of enormous commons, each controlled by a faceless corporate entity. Hey user, want to send a message? You can, but we'll store a copy of it indefinitely, unencrypted, for our preference-learning algorithms to pore over; how else could we slap targeted ads on every piece of content you see? Want to pay a friend? You can—in our Monopoly money. Want a new feature? Submit a request to our Support Center and we'll totally maybe think about it. Want to backup a photo? You can—inside our walled garden, which only we (and the NSA, of course) can access. Just be careful what you share, because merely locking you out of your account and deleting all your data is far from the worst thing we could do. You rationalize this: "MEGACORP would never do such a thing; it would be bad for business." But we all know, at some level, that this state of affairs, this inversion of power, is not merely "unfortunate" or "suboptimal" – No. It is degrading. Even if MEGACORP were purely benevolent, it is degrading that we must ask its permission to talk to our friends; that we must rely on it to safeguard our treasured memories; that our digital lives are completely beholden to those who seek only to extract value from us. At the root of this issue is the centralization of data. MEGACORP can surveil you—because your emails and video chats flow through their servers. And MEGACORP can control you—because they hold your data hostage. But centralization is a solution to a technical problem: How can we make the user's data accessible from anywhere in the world, on any device? For a long time, no alternative solution to this problem was forthcoming. Today, thanks to a confluence of established techniques and recent innovations, we have solved the accessibility problem without resorting to centralization. Hashing, encryption, and erasure encoding got us most of the way, but one barrier remained: incentives. How do you incentivize an anonymous stranger to store your data? Earlier protocols like BitTorrent worked around this limitation by relying on altruism, tit-for-tat requirements, or "points" – in other words, nothing you could pay your electric bill with. Finally, in 2009, a solution appeared: Bitcoin. Not long after, Sia was born. Cryptography has unleashed the latent power of the internet by enabling interactions between mutually-distrustful parties. Sia harnesses this power to turn the cloud storage market into a proper marketplace, where buyers and sellers can transact directly, with no intermediaries, anywhere in the world. No more silos or walled gardens: your data is encrypted, so it can't be spied on, and it's stored on many servers, so no single entity can hold it hostage. Thanks to projects like Sia, the internet is being re-decentralized. Sia began its life as a startup, which means it has always been subjected to two competing forces: the ideals of its founders, and the profit motive inherent to all businesses. Its founders have taken great pains to never compromise on the former, but this often threatened the company's financial viability. With the establishment of the Sia Foundation, this tension is resolved. The Foundation, freed of the obligation to generate profit, is a pure embodiment of the ideals from which Sia originally sprung. The goals and responsibilities of the Foundation are numerous: to maintain core Sia protocols and consensus code; to support developers building on top of Sia and its protocols; to promote Sia and facilitate partnerships in other spheres and communities; to ensure that users can easily acquire and safely store siacoins; to develop network scalability solutions; to implement hardforks and lead the community through them; and much more. In a broader sense, its mission is to commoditize data storage, making it cheap, ubiquitous, and accessible to all, without compromising privacy or performance. Sia is a perfect example of how we can achieve better living through cryptography. We now begin a new chapter in Sia's history. May our stewardship lead it into a bright future.
Today, we are proposing the creation of the Sia Foundation: a new non-profit entity that builds and supports distributed cloud storage infrastructure, with a specific focus on the Sia storage platform. What follows is an informal overview of the Sia Foundation, covering two major topics: how the Foundation will be funded, and what its funds will be used for.
The Sia Foundation will be structured as a non-profit entity incorporated in the United States, likely a 501(c)(3) organization or similar. The actions of the Foundation will be constrained by its charter, which formalizes the specific obligations and overall mission outlined in this document. The charter will be updated on an annual basis to reflect the current goals of the Sia community. The organization will be operated by a board of directors, initially comprising Luke Champine as President and Eddie Wang as Chairman. Luke Champine will be leaving his position at Nebulous to work at the Foundation full-time, and will seek to divest his shares of Nebulous stock along with other potential conflicts of interest. Neither Luke nor Eddie personally own any siafunds or significant quantities of siacoin.
The primary source of funding for the Foundation will come from a new block subsidy. Following a hardfork, 30 KS per block will be allocated to the "Foundation Fund," continuing in perpetuity. The existing 30 KS per block miner reward is not affected. Additionally, one year's worth of block subsidies (approximately 1.57 GS) will be allocated to the Fund immediately upon activation of the hardfork. As detailed below, the Foundation will provably burn any coins that it cannot meaningfully spend. As such, the 30 KS subsidy should be viewed as a maximum. This allows the Foundation to grow alongside Sia without requiring additional hardforks. The Foundation will not be funded to any degree by the possession or sale of siafunds. Siafunds were originally introduced as a means of incentivizing growth, and we still believe in their effectiveness: a siafund holder wants to increase the amount of storage on Sia as much as possible. While the Foundation obviously wants Sia to succeed, its driving force should be its charter. Deriving significant revenue from siafunds would jeopardize the Foundation's impartiality and focus. Ultimately, we want the Foundation to act in the best interests of Sia, not in growing its own budget.
The Foundation inherits a great number of responsibilities from Nebulous. Each quarter, the Foundation will publish the progress it has made over the past quarter, and list the responsibilities it intends to prioritize over the coming quarter. This will be accompanied by a financial report, detailing each area of expenditure over the past quarter, and forecasting expenditures for the coming quarter. Below, we summarize some of the myriad responsibilities towards which the Foundation is expected to allocate its resources.
Maintain and enhance core Sia software
Arguably, this is the most important responsibility of the Foundation. At the heart of Sia is its consensus algorithm: regardless of other differences, all Sia software must agree upon the content and rules of the blockchain. It is therefore crucial that the algorithm be stewarded by an entity that is accountable to the community, transparent in its decision-making, and has no profit motive or other conflicts of interest. Accordingly, Sia’s consensus functionality will no longer be directly maintained by Nebulous. Instead, the Foundation will release and maintain an implementation of a "minimal Sia full node," comprising the Sia consensus algorithm and P2P networking code. The source code will be available in a public repository, and signed binaries will be published for each release. Other parties may use this code to provide alternative full node software. For example, Nebulous may extend the minimal full node with wallet, renter, and host functionality. The source code of any such implementation may be submitted to the Foundation for review. If the code passes review, the Foundation will provide "endorsement signatures" for the commit hash used and for binaries compiled internally by the Foundation. Specifically, these signatures assert that the Foundation believes the software contains no consensus-breaking changes or other modifications to imported Foundation code. Endorsement signatures and Foundation-compiled binaries may be displayed and distributed by the receiving party, along with an appropriate disclaimer. A minimal full node is not terribly useful on its own; the wallet, renter, host, and other extensions are what make Sia a proper developer platform. Currently, the only implementations of these extensions are maintained by Nebulous. The Foundation will contract Nebulous to ensure that these extensions continue to receive updates and enhancements. Later on, the Foundation intends to develop its own implementations of these extensions and others. As with the minimal node software, these extensions will be open source and available in public repositories for use by any Sia node software. With the consensus code now managed by the Foundation, the task of implementing and orchestrating hardforks becomes its responsibility as well. When the Foundation determines that a hardfork is necessary (whether through internal discussion or via community petition), a formal proposal will be drafted and submitted for public review, during which arguments for and against the proposal may be submitted to a public repository. During this time, the hardfork code will be implemented, either by Foundation employees or by external contributors working closely with the Foundation. Once the implementation is finished, final arguments will be heard. The Foundation board will then vote whether to accept or reject the proposal, and announce their decision along with appropriate justification. Assuming the proposal was accepted, the Foundation will announce the block height at which the hardfork will activate, and will subsequently release source code and signed binaries that incorporate the hardfork code. Regardless of the Foundation's decision, it is the community that ultimately determines whether a fork is accepted or rejected – nothing can change that. Foundation node software will never automatically update, so all forks must be explicitly adopted by users. Furthermore, the Foundation will provide replay and wipeout protection for its hard forks, protecting other chains from unintended or malicious reorgs. Similarly, the Foundation will ensure that any file contracts formed prior to a fork activation will continue to be honored on both chains until they expire. Finally, the Foundation also intends to pursue scalability solutions for the Sia blockchain. In particular, work has already begun on an implementation of Utreexo, which will greatly reduce the space requirements of fully-validating nodes (allowing a full node to be run on a smartphone) while increasing throughput and decreasing initial sync time. A hardfork implementing Utreexo will be submitted to the community as per the process detailed above. As this is the most important responsibility of the Foundation, it will receive a significant portion of the Foundation’s budget, primarily in the form of developer salaries and contracting agreements.
Support community services
We intend to allocate 25% of the Foundation Fund towards the community. This allocation will be held and disbursed in the form of siacoins, and will pay for grants, bounties, hackathons, and other community-driven endeavours. Any community-run service, such as a Skynet portal, explorer or web wallet, may apply to have its costs covered by the Foundation. Upon approval, the Foundation will reimburse expenses incurred by the service, subject to the exact terms agreed to. The intent of these grants is not to provide a source of income, but rather to make such services "break even" for their operators, so that members of the community can enrich the Sia ecosystem without worrying about the impact on their own finances.
Ensure easy acquisition and storage of siacoins
Most users will acquire their siacoins via an exchange. The Foundation will provide support to Sia-compatible exchanges, and pursue relevant integrations at its discretion, such as Coinbase's new Rosetta standard. The Foundation may also release DEX software that enables trading cryptocurrencies without the need for a third party. (The Foundation itself will never operate as a money transmitter.) Increasingly, users are storing their cryptocurrency on hardware wallets. The Foundation will maintain the existing Ledger Nano S integration, and pursue further integrations at its discretion. Of course, all hardware wallets must be paired with software running on a computer or smartphone, so the Foundation will also develop and/or maintain client-side wallet software, including both full-node wallets and "lite" wallets. Community-operated wallet services, i.e. web wallets, may be funded via grants. Like core software maintenance, this responsibility will be funded in the form of developer salaries and contracting agreements.
Protect the ecosystem
When it comes to cryptocurrency security, patching software vulnerabilities is table stakes; there are significant legal and social threats that we must be mindful of as well. As such, the Foundation will earmark a portion of its fund to defend the community from legal action. The Foundation will also safeguard the network from 51% attacks and other threats to network security by implementing softforks and/or hardforks where necessary. The Foundation also intends to assist in the development of a new FOSS software license, and to solicit legal memos on various Sia-related matters, such as hosting in the United States and the EU. In a broader sense, the establishment of the Foundation makes the ecosystem more robust by transferring core development to a more neutral entity. Thanks to its funding structure, the Foundation will be immune to various forms of pressure that for-profit companies are susceptible to.
Drive adoption of Sia
Although the overriding goal of the Foundation is to make Sia the best platform it can be, all that work will be in vain if no one uses the platform. There are a number of ways the Foundation can promote Sia and get it into the hands of potential users and developers. In-person conferences are understandably far less popular now, but the Foundation can sponsor and/or participate in virtual conferences. (In-person conferences may be held in the future, permitting circumstances.) Similarly, the Foundation will provide prizes for hackathons, which may be organized by community members, Nebulous, or the Foundation itself. Lastly, partnerships with other companies in the cryptocurrency space—or the cloud storage space—are a great way to increase awareness of Sia. To handle these responsibilities, one of the early priorities of the Foundation will be to hire a marketing director.
The Foundation Fund will be controlled by a multisig address. Each member of the Foundation's board will control one of the signing keys, with the signature threshold to be determined once the final composition of the board is known. (This threshold may also be increased or decreased if the number of board members changes.) Additionally, one timelocked signing key will be controlled by David Vorick. This key will act as a “dead man’s switch,” to be used in the event of an emergency that prevents Foundation board members from reaching the signature threshold. The timelock ensures that this key cannot be used unless the Foundation fails to sign a transaction for several months. On the 1st of each month, the Foundation will use its keys to transfer all siacoins in the Fund to two new addresses. The first address will be controlled by a high-security hot wallet, and will receive approximately one month's worth of Foundation expenditures. The second address, receiving the remaining siacoins, will be a modified version of the source address: specifically, it will increase the timelock on David Vorick's signing key by one month. Any other changes to the set of signing keys, such as the arrival or departure of board members, will be incorporated into this address as well. The Foundation Fund is allocated in SC, but many of the Foundation's expenditures must be paid in USD or other fiat currency. Accordingly, the Foundation will convert, at its discretion, a portion of its monthly withdrawals to fiat currency. We expect this conversion to be primarily facilitated by private "OTC" sales to accredited investors. The Foundation currently has no plans to speculate in cryptocurrency or other assets. Finally, it is important that the Foundation adds value to the Sia platform well in excess of the inflation introduced by the block subsidy. For this reason, the Foundation intends to provably burn, on a quarterly basis, any coins that it cannot allocate towards any justifiable expense. In other words, coins will be burned whenever doing so provides greater value to the platform than any other use. Furthermore, the Foundation will cap its SC treasury at 5% of the total supply, and will cap its USD treasury at 4 years’ worth of predicted expenses. Addendum: Hardfork Timeline We would like to see this proposal finalized and accepted by the community no later than September 30th. A new version of siad, implementing the hardfork, will be released no later than October 15th. The hardfork will activate at block 293220, which is expected to occur around 12pm EST on January 1st, 2021.
Addendum: Inflation specifics The total supply of siacoins as of January 1st, 2021 will be approximately 45.243 GS. The initial subsidy of 1.57 GS thus increases the supply by 3.47%, and the total annual inflation in 2021 will be at most 10.4% (if zero coins are burned). In 2022, total annual inflation will be at most 6.28%, and will steadily decrease in subsequent years.
We see the establishment of the Foundation as an important step in the maturation of the Sia project. It provides the ecosystem with a sustainable source of funding that can be exclusively directed towards achieving Sia's ambitious goals. Compared to other projects with far deeper pockets, Sia has always punched above its weight; once we're on equal footing, there's no telling what we'll be able to achieve. Nevertheless, we do not propose this change lightly, and have taken pains to ensure that the Foundation will act in accordance with the ideals that this community shares. It will operate transparently, keep inflation to a minimum, and respect the user's fundamental role in decentralized systems. We hope that everyone in the community will consider this proposal carefully, and look forward to a productive discussion.
DITO rockets up 20%, drops 30%, then finishes flat... the Aristocrats! (Wednesday, Oct 7)
Happy Wednesday, Barkada --
The PSE closed down 28 points to 5911 ▼0.5%.
Good news! I have a couple of people who are potentially interested in sponsoring MB, so I'm excited to explore those opportunities. My goal has always been to simply be revenue neutral, and to keep MB free for everyone to enjoy. (inb4 "RAID Shadow Legends" ad) Shout-out to Christine for her suggestion to try and improve the bottom-line of MB by moving from Mailchimp to SendFox. It's something I'm going to look into, but I'm very careful about making changes. I'll have to investigate. Thanks also to Jack_ol_lantern for suggesting ways to leverage my domain to try a "roll your own" alternative, and to nikohd for suggesting I offer a bitcoin donation address. I've got lots to study this weekend! No complaints here, though. Exciting times in MB town.
[UPDATE] ABS-CBN [ABS 9.00 ▼14.93%] confirms distribution deal with Zoe TV’s rebranded “A2Z Channel”... this is just confirmation of the fire that caused the ceiling-play smoke a couple of days ago that saw the ABS stock price rise 50% intraday. According to this press release, ABS-CBN and Zoe Broadcasting Network Inc have made a deal to show “some entertainment shows and movies of ABS-CBN” on A2Z Channel 11, a newly re-branded Zoe Broadcasting Network channel that will broadcast on analog TV in Metro Manila and surrounding provinces. ABS content will start appearing on this new A2Z channel starting October 10.
MB:No details yet on what content, exactly, will be shown, but the wording of the press release is interesting. It mentions “entertainment and movies” specifically, but leaves out politically-adjacent topics like news or analysis/interview shows. The Inquirer is reporting a rumor that “It’s Showtime” and “ASAP Natin ‘To” will be part of the content to make its way to A2Z Channel 11, but that has not been confirmed. Investors will want to watch this closely to see how well ABS is able to monetize this agreement with advertising, and to see how the government reacts as more ABS content moves into this pipeline.
[UPDATE] Wild DITO CME [DITO 6.81 unch], NOW Communications [NOW 4.98 ▲13.44%], and Chelsea Logistics [C 5.90 ▼4.07%] price action in yesterday’s session... the NOW and DITO pump has been massive and constant. But this last week was especially spicy, with yesterday’s session just an absolute gong-show that caused brokerage meltdowns. DITO opened the day at P7/share, up 3% on the previous day’s close, and steadily gained to a high-water mark of P8.02/share (+18%) at around 11:45am. At 11:45am, DITO had a marketcap of P22.5bn. In the next 27 minutes, DITO would lose P7.4bn in marketcap as the price imploded to P5.38/share, swinging from an 18% gain on the day to a 21% loss. Then, over the next 30 minutes, completely erasing that loss and ending the day right where it started, at P6.81/share. 2.09 billion shares changed hands on the PSE yesterday; DITO accounted for 16% of the day’s total volume (355 million shares). The three companies combined accounted for over 28% of all shares traded.
MB:MB: The amount of market uncertainty here is incredible. Traders love it, investors hate it. DITO doesn’t even own DITO Telecommunity, or anything else of material value for that matter, NOW just diluted shareholders with a bearish low-price sweetheart deal, and Chelsea is a company of tugboats and passenger ferries that happens to own a sliver of Dennis Uy’s enigmatic telecom. NOW has a long history of playing the “press release pump and dump” game, and I can only imagine that it’s happy just to be along for the ride, fluffing feathers before a potential IPO by way of introduction. Everyone in the Philippines can sense that connectivity is a bull market, whether that be mobile data (C, GLO, TEL.... then NOW) or broadband (GLO, TEL, CNVRG)...so money just keeps pouring into telco-related stocks. And it makes sense, too, given how few options there are right now on the PSE for anything that looks both pandemic-resilient and secularly profitable. But some of these things are not like the others. Some of these things will crush it, and some will not. Be careful trading telcos that you remember whether you’re being a trader (short term) or an investor (long term). Don’t start out as a trader, forget to place stops, then wind up as an investor with an investment that’s underwater. BE CAREFUL. EDIT: Also, COL Financial, get your act together. You blew AREIT and MM, and you blew yesterday's Telecommotion. At this point, traders/investors should not make plans in reliance on COL Financial's execution of a buy or sell trade.
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Cosmos is a heterogeneous network of many independent parallel blockchains, each powered by classical BFT consensus algorithms like Tendermint. Developers can easily build custom application specific blockchains, called Zones, through the Cosmos SDK framework. These Zones connect to Hubs, which are specifically designed to connect zones together. The vision of Cosmos is to have thousands of Zones and Hubs that are Interoperable through the Inter-Blockchain Communication Protocol (IBC). Cosmos can also connect to other systems through peg zones, which are specifically designed zones that each are custom made to interact with another ecosystem such as Ethereum and Bitcoin. Cosmos does not use Sharding with each Zone and Hub being sovereign with their own validator set. For a more in-depth look at Cosmos and provide more reference to points made in this article, please see my three part series — Part One, Part Two, Part Three (There's a youtube video with a quick video overview of Cosmos on the medium article - https://medium.com/ava-hub/comparison-between-avalanche-cosmos-and-polkadot-a2a98f46c03b)
Polkadot is a heterogeneous blockchain protocol that connects multiple specialised blockchains into one unified network. It achieves scalability through a sharding infrastructure with multiple blockchains running in parallel, called parachains, that connect to a central chain called the Relay Chain. Developers can easily build custom application specific parachains through the Substrate development framework. The relay chain validates the state transition of connected parachains, providing shared state across the entire ecosystem. If the Relay Chain must revert for any reason, then all of the parachains would also revert. This is to ensure that the validity of the entire system can persist, and no individual part is corruptible. The shared state makes it so that the trust assumptions when using parachains are only those of the Relay Chain validator set, and no other. Interoperability is enabled between parachains through Cross-Chain Message Passing (XCMP) protocol and is also possible to connect to other systems through bridges, which are specifically designed parachains or parathreads that each are custom made to interact with another ecosystem such as Ethereum and Bitcoin. The hope is to have 100 parachains connect to the relay chain. For a more in-depth look at Polkadot and provide more reference to points made in this article, please see my three part series — Part One, Part Two, Part Three (There's a youtube video with a quick video overview of Polkadot on the medium article - https://medium.com/ava-hub/comparison-between-avalanche-cosmos-and-polkadot-a2a98f46c03b)
Avalanche is a platform of platforms, ultimately consisting of thousands of subnets to form a heterogeneous interoperable network of many blockchains, that takes advantage of the revolutionary Avalanche Consensus protocols to provide a secure, globally distributed, interoperable and trustless framework offering unprecedented decentralisation whilst being able to comply with regulatory requirements. Avalanche allows anyone to create their own tailor-made application specific blockchains, supporting multiple custom virtual machines such as EVM and WASM and written in popular languages like Go (with others coming in the future) rather than lightly used, poorly-understood languages like Solidity. This virtual machine can then be deployed on a custom blockchain network, called a subnet, which consist of a dynamic set of validators working together to achieve consensus on the state of a set of many blockchains where complex rulesets can be configured to meet regulatory compliance. Avalanche was built with serving financial markets in mind. It has native support for easily creating and trading digital smart assets with complex custom rule sets that define how the asset is handled and traded to ensure regulatory compliance can be met. Interoperability is enabled between blockchains within a subnet as well as between subnets. Like Cosmos and Polkadot, Avalanche is also able to connect to other systems through bridges, through custom virtual machines made to interact with another ecosystem such as Ethereum and Bitcoin. For a more in-depth look at Avalanche and provide more reference to points made in this article, please see here and here (There's a youtube video with a quick video overview of Avalanche on the medium article - https://medium.com/ava-hub/comparison-between-avalanche-cosmos-and-polkadot-a2a98f46c03b)
Comparison between Cosmos, Polkadot and Avalanche
A frequent question I see being asked is how Cosmos, Polkadot and Avalanche compare? Whilst there are similarities there are also a lot of differences. This article is not intended to be an extensive in-depth list, but rather an overview based on some of the criteria that I feel are most important. For a more in-depth view I recommend reading the articles for each of the projects linked above and coming to your own conclusions. I want to stress that it’s not a case of one platform being the killer of all other platforms, far from it. There won’t be one platform to rule them all, and too often the tribalism has plagued this space. Blockchains are going to completely revolutionise most industries and have a profound effect on the world we know today. It’s still very early in this space with most adoption limited to speculation and trading mainly due to the limitations of Blockchain and current iteration of Ethereum, which all three of these platforms hope to address. For those who just want a quick summary see the image at the bottom of the article. With that said let’s have a look
Each Zone and Hub in Cosmos is capable of up to around 1000 transactions per second with bandwidth being the bottleneck in consensus. Cosmos aims to have thousands of Zones and Hubs all connected through IBC. There is no limit on the number of Zones / Hubs that can be created
Parachains in Polkadot are also capable of up to around 1500 transactions per second. A portion of the parachain slots on the Relay Chain will be designated as part of the parathread pool, the performance of a parachain is split between many parathreads offering lower performance and compete amongst themselves in a per-block auction to have their transactions included in the next relay chain block. The number of parachains is limited by the number of validators on the relay chain, they hope to be able to achieve 100 parachains.
Avalanche is capable of around 4500 transactions per second per subnet, this is based on modest hardware requirements to ensure maximum decentralisation of just 2 CPU cores and 4 GB of Memory and with a validator size of over 2,000 nodes. Performance is CPU-bound and if higher performance is required then more specialised subnets can be created with higher minimum requirements to be able to achieve 10,000 tps+ in a subnet. Avalanche aims to have thousands of subnets (each with multiple virtual machines / blockchains) all interoperable with each other. There is no limit on the number of Subnets that can be created.
All three platforms offer vastly superior performance to the likes of Bitcoin and Ethereum 1.0. Avalanche with its higher transactions per second, no limit on the number of subnets / blockchains that can be created and the consensus can scale to potentially millions of validators all participating in consensus scores ✅✅✅. Polkadot claims to offer more tps than cosmos, but is limited to the number of parachains (around 100) whereas with Cosmos there is no limit on the number of hubs / zones that can be created. Cosmos is limited to a fairly small validator size of around 200 before performance degrades whereas Polkadot hopes to be able to reach 1000 validators in the relay chain (albeit only a small number of validators are assigned to each parachain). Thus Cosmos and Polkadot scores ✅✅ https://preview.redd.it/2o0brllyvpq51.png?width=1000&format=png&auto=webp&s=8f62bb696ecaafcf6184da005d5fe0129d504518
Tendermint consensus is limited to around 200 validators before performance starts to degrade. Whilst there is the Cosmos Hub it is one of many hubs in the network and there is no central hub or limit on the number of zones / hubs that can be created.
Polkadot has 1000 validators in the relay chain and these are split up into a small number that validate each parachain (minimum of 14). The relay chain is a central point of failure as all parachains connect to it and the number of parachains is limited depending on the number of validators (they hope to achieve 100 parachains). Due to the limited number of parachain slots available, significant sums of DOT will need to be purchased to win an auction to lease the slot for up to 24 months at a time. Thus likely to lead to only those with enough funds to secure a parachain slot. Parathreads are however an alternative for those that require less and more varied performance for those that can’t secure a parachain slot.
Avalanche consensus scan scale to tens of thousands of validators, even potentially millions of validators all participating in consensus through repeated sub-sampling. The more validators, the faster the network becomes as the load is split between them. There are modest hardware requirements so anyone can run a node and there is no limit on the number of subnets / virtual machines that can be created.
Avalanche offers unparalleled decentralisation using its revolutionary consensus protocols that can scale to millions of validators all participating in consensus at the same time. There is no limit to the number of subnets and virtual machines that can be created, and they can be created by anyone for a small fee, it scores ✅✅✅. Cosmos is limited to 200 validators but no limit on the number of zones / hubs that can be created, which anyone can create and scores ✅✅. Polkadot hopes to accommodate 1000 validators in the relay chain (albeit these are split amongst each of the parachains). The number of parachains is limited and maybe cost prohibitive for many and the relay chain is a ultimately a single point of failure. Whilst definitely not saying it’s centralised and it is more decentralised than many others, just in comparison between the three, it scores ✅ https://preview.redd.it/ckfamee0wpq51.png?width=1000&format=png&auto=webp&s=c4355f145d821fabf7785e238dbc96a5f5ce2846
Tendermint consensus used in Cosmos reaches finality within 6 seconds. Cosmos consists of many Zones and Hubs that connect to each other. Communication between 2 zones could pass through many hubs along the way, thus also can contribute to latency times depending on the path taken as explained in part two of the articles on Cosmos. It doesn’t need to wait for an extended period of time with risk of rollbacks.
Polkadot provides a Hybrid consensus protocol consisting of Block producing protocol, BABE, and then a finality gadget called GRANDPA that works to agree on a chain, out of many possible forks, by following some simpler fork choice rule. Rather than voting on every block, instead it reaches agreements on chains. As soon as more than 2/3 of validators attest to a chain containing a certain block, all blocks leading up to that one are finalized at once. If an invalid block is detected after it has been finalised then the relay chain would need to be reverted along with every parachain. This is particularly important when connecting to external blockchains as those don’t share the state of the relay chain and thus can’t be rolled back. The longer the time period, the more secure the network is, as there is more time for additional checks to be performed and reported but at the expense of finality. Finality is reached within 60 seconds between parachains but for external ecosystems like Ethereum their state obviously can’t be rolled back like a parachain and so finality will need to be much longer (60 minutes was suggested in the whitepaper) and discussed in more detail in part three
Avalanche consensus achieves finality within 3 seconds, with most happening sub 1 second, immutable and completely irreversible. Any subnet can connect directly to another without having to go through multiple hops and any VM can talk to another VM within the same subnet as well as external subnets. It doesn’t need to wait for an extended period of time with risk of rollbacks.
With regards to performance far too much emphasis is just put on tps as a metric, the other equally important metric, if not more important with regards to finance is latency. Throughput measures the amount of data at any given time that it can handle whereas latency is the amount of time it takes to perform an action. It’s pointless saying you can process more transactions per second than VISA when it takes 60 seconds for a transaction to complete. Low latency also greatly increases general usability and customer satisfaction, nowadays everyone expects card payments, online payments to happen instantly. Avalanche achieves the best results scoring ✅✅✅, Cosmos with comes in second with 6 second finality ✅✅ and Polkadot with 60 second finality (which may be 60 minutes for external blockchains) scores ✅ https://preview.redd.it/kzup5x42wpq51.png?width=1000&format=png&auto=webp&s=320eb4c25dc4fc0f443a7a2f7ff09567871648cd
Every Zone and Hub in Cosmos has their own validator set and different trust assumptions. Cosmos are researching a shared security model where a Hub can validate the state of connected zones for a fee but not released yet. Once available this will make shared security optional rather than mandatory.
Shared Security is mandatory with Polkadot which uses a Shared State infrastructure between the Relay Chain and all of the connected parachains. If the Relay Chain must revert for any reason, then all of the parachains would also revert. Every parachain makes the same trust assumptions, and as such the relay chain validates state transition and enables seamless interoperability between them. In return for this benefit, they have to purchase DOT and win an auction for one of the available parachain slots. However, parachains can’t just rely on the relay chain for their security, they will also need to implement censorship resistance measures and utilise proof of work / proof of stake for each parachain as well as discussed in part three, thus parachains can’t just rely on the security of the relay chain, they need to ensure sybil resistance mechanisms using POW and POS are implemented on the parachain as well.
A subnet in Avalanche consists of a dynamic set of validators working together to achieve consensus on the state of a set of many blockchains where complex rulesets can be configured to meet regulatory compliance. So unlike in Cosmos where each zone / hub has their own validators, A subnet can validate a single or many virtual machines / blockchains with a single validator set. Shared security is optional
Shared security is mandatory in polkadot and a key design decision in its infrastructure. The relay chain validates the state transition of all connected parachains and thus scores ✅✅✅. Subnets in Avalanche can validate state of either a single or many virtual machines. Each subnet can have their own token and shares a validator set, where complex rulesets can be configured to meet regulatory compliance. It scores ✅ ✅. Every Zone and Hub in cosmos has their own validator set / token but research is underway to have the hub validate the state transition of connected zones, but as this is still early in the research phase scores ✅ for now. https://preview.redd.it/pbgyk3o3wpq51.png?width=1000&format=png&auto=webp&s=61c18e12932a250f5633c40633810d0f64520575
The Cosmos project started in 2016 with an ICO held in April 2017. There are currently around 50 projects building on the Cosmos SDK with a full list can be seen here and filtering for Cosmos SDK . Not all of the projects will necessarily connect using native cosmos sdk and IBC and some have forked parts of the Cosmos SDK and utilise the tendermint consensus such as Binance Chain but have said they will connect in the future.
The Polkadot project started in 2016 with an ICO held in October 2017. There are currently around 70 projects building on Substrate and a full list can be seen here and filtering for Substrate Based. Like with Cosmos not all projects built using substrate will necessarily connect to Polkadot and parachains or parathreads aren’t currently implemented in either the Live or Test network (Kusama) as of the time of this writing.
Avalanche in comparison started much later with Ava Labs being founded in 2018. Avalanche held it’s ICO in July 2020. Due to lot shorter time it has been in development, the number of projects confirmed are smaller with around 14 projects currently building on Avalanche. Due to the customisability of the platform though, many virtual machines can be used within a subnet making the process incredibly easy to port projects over. As an example, it will launch with the Ethereum Virtual Machine which enables byte for byte compatibility and all the tooling like Metamask, Truffle etc. will work, so projects can easily move over to benefit from the performance, decentralisation and low gas fees offered. In the future Cosmos and Substrate virtual machines could be implemented on Avalanche.
Whilst it’s still early for all 3 projects (and the entire blockchain space as a whole), there is currently more projects confirmed to be building on Cosmos and Polkadot, mostly due to their longer time in development. Whilst Cosmos has fewer projects, zones are implemented compared to Polkadot which doesn’t currently have parachains. IBC to connect zones and hubs together is due to launch Q2 2021, thus both score ✅✅✅. Avalanche has been in development for a lot shorter time period, but is launching with an impressive feature set right from the start with ability to create subnets, VMs, assets, NFTs, permissioned and permissionless blockchains, cross chain atomic swaps within a subnet, smart contracts, bridge to Ethereum etc. Applications can easily port over from other platforms and use all the existing tooling such as Metamask / Truffle etc but benefit from the performance, decentralisation and low gas fees offered. Currently though just based on the number of projects in comparison it scores ✅. https://preview.redd.it/4zpi6s85wpq51.png?width=1000&format=png&auto=webp&s=e91ade1a86a5d50f4976f3b23a46e9287b08e373
Cosmos enables permissioned and permissionless zones which can connect to each other with the ability to have full control over who validates the blockchain. For permissionless zones each zone / hub can have their own token and they are in control who validates.
With polkadot the state transition is performed by a small randomly selected assigned group of validators from the relay chain plus with the possibility that state is rolled back if an invalid transaction of any of the other parachains is found. This may pose a problem for enterprises that need complete control over who performs validation for regulatory reasons. In addition due to the limited number of parachain slots available Enterprises would have to acquire and lock up large amounts of a highly volatile asset (DOT) and have the possibility that they are outbid in future auctions and find they no longer can have their parachain validated and parathreads don’t provide the guaranteed performance requirements for the application to function.
Avalanche enables permissioned and permissionless subnets and complex rulesets can be configured to meet regulatory compliance. For example a subnet can be created where its mandatory that all validators are from a certain legal jurisdiction, or they hold a specific license and regulated by the SEC etc. Subnets are also able to scale to tens of thousands of validators, and even potentially millions of nodes, all participating in consensus so every enterprise can run their own node rather than only a small amount. Enterprises don’t have to hold large amounts of a highly volatile asset, but instead pay a fee in AVAX for the creation of the subnets and blockchains which is burnt.
Avalanche provides the customisability to run private permissioned blockchains as well as permissionless where the enterprise is in control over who validates the blockchain, with the ability to use complex rulesets to meet regulatory compliance, thus scores ✅✅✅. Cosmos is also able to run permissioned and permissionless zones / hubs so enterprises have full control over who validates a blockchain and scores ✅✅. Polkadot requires locking up large amounts of a highly volatile asset with the possibility of being outbid by competitors and being unable to run the application if the guaranteed performance is required and having to migrate away. The relay chain validates the state transition and can roll back the parachain should an invalid block be detected on another parachain, thus scores ✅. https://preview.redd.it/li5jy6u6wpq51.png?width=1000&format=png&auto=webp&s=e2a95f1f88e5efbcf9e23c789ae0f002c8eb73fc
Cosmos will connect Hubs and Zones together through its IBC protocol (due to release in Q1 2020). Connecting to blockchains outside of the Cosmos ecosystem would either require the connected blockchain to fork their code to implement IBC or more likely a custom “Peg Zone” will be created specific to work with a particular blockchain it’s trying to bridge to such as Ethereum etc. Each Zone and Hub has different trust levels and connectivity between 2 zones can have different trust depending on which path it takes (this is discussed more in this article). Finality time is low at 6 seconds, but depending on the number of hops, this can increase significantly.
Polkadot’s shared state means each parachain that connects shares the same trust assumptions, of the relay chain validators and that if one blockchain needs to be reverted, all of them will need to be reverted. Interoperability is enabled between parachains through Cross-Chain Message Passing (XCMP) protocol and is also possible to connect to other systems through bridges, which are specifically designed parachains or parathreads that each are custom made to interact with another ecosystem such as Ethereum and Bitcoin. Finality time between parachains is around 60 seconds, but longer will be needed (initial figures of 60 minutes in the whitepaper) for connecting to external blockchains. Thus limiting the appeal of connecting two external ecosystems together through Polkadot. Polkadot is also limited in the number of Parachain slots available, thus limiting the amount of blockchains that can be bridged. Parathreads could be used for lower performance bridges, but the speed of future blockchains is only going to increase.
A subnet can validate multiple virtual machines / blockchains and all blockchains within a subnet share the same trust assumptions / validator set, enabling cross chain interoperability. Interoperability is also possible between any other subnet, with the hope Avalanche will consist of thousands of subnets. Each subnet may have a different trust level, but as the primary network consists of all validators then this can be used as a source of trust if required. As Avalanche supports many virtual machines, bridges to other ecosystems are created by running the connected virtual machine. There will be an Ethereum bridge using the EVM shortly after mainnet. Finality time is much faster at sub 3 seconds (with most happening under 1 second) with no chance of rolling back so more appealing when connecting to external blockchains.
All 3 systems are able to perform interoperability within their ecosystem and transfer assets as well as data, as well as use bridges to connect to external blockchains. Cosmos has different trust levels between its zones and hubs and can create issues depending on which path it takes and additional latency added. Polkadot provides the same trust assumptions for all connected parachains but has long finality and limited number of parachain slots available. Avalanche provides the same trust assumptions for all blockchains within a subnet, and different trust levels between subnets. However due to the primary network consisting of all validators it can be used for trust. Avalanche also has a much faster finality time with no limitation on the number of blockchains / subnets / bridges that can be created. Overall all three blockchains excel with interoperability within their ecosystem and each score ✅✅. https://preview.redd.it/ai0bkbq8wpq51.png?width=1000&format=png&auto=webp&s=3e85ee6a3c4670f388ccea00b0c906c3fb51e415
The ATOM token is the native token for the Cosmos Hub. It is commonly mistaken by people that think it’s the token used throughout the cosmos ecosystem, whereas it’s just used for one of many hubs in Cosmos, each with their own token. Currently ATOM has little utility as IBC isn’t released and has no connections to other zones / hubs. Once IBC is released zones may prefer to connect to a different hub instead and so ATOM is not used. ATOM isn’t a fixed capped supply token and supply will continuously increase with a yearly inflation of around 10% depending on the % staked. The current market cap for ATOM as of the time of this writing is $1 Billion with 203 million circulating supply. Rewards can be earnt through staking to offset the dilution caused by inflation. Delegators can also get slashed and lose a portion of their ATOM should the validator misbehave.
Polkadot’s native token is DOT and it’s used to secure the Relay Chain. Each parachain needs to acquire sufficient DOT to win an auction on an available parachain lease period of up to 24 months at a time. Parathreads have a fixed fee for registration that would realistically be much lower than the cost of acquiring a parachain slot and compete with other parathreads in a per-block auction to have their transactions included in the next relay chain block. DOT isn’t a fixed capped supply token and supply will continuously increase with a yearly inflation of around 10% depending on the % staked. The current market cap for DOT as of the time of this writing is $4.4 Billion with 852 million circulating supply. Delegators can also get slashed and lose their DOT (potentially 100% of their DOT for serious attacks) should the validator misbehave.
AVAX is the native token for the primary network in Avalanche. Every validator of any subnet also has to validate the primary network and stake a minimum of 2000 AVAX. There is no limit to the number of validators like other consensus methods then this can cater for tens of thousands even potentially millions of validators. As every validator validates the primary network, this can be a source of trust for interoperability between subnets as well as connecting to other ecosystems, thus increasing amount of transaction fees of AVAX. There is no slashing in Avalanche, so there is no risk to lose your AVAX when selecting a validator, instead rewards earnt for staking can be slashed should the validator misbehave. Because Avalanche doesn’t have direct slashing, it is technically possible for someone to both stake AND deliver tokens for something like a flash loan, under the invariant that all tokens that are staked are returned, thus being able to make profit with staked tokens outside of staking itself. There will also be a separate subnet for Athereum which is a ‘spoon,’ or friendly fork, of Ethereum, which benefits from the Avalanche consensus protocol and applications in the Ethereum ecosystem. It’s native token ATH will be airdropped to ETH holders as well as potentially AVAX holders as well. This can be done for other blockchains as well. Transaction fees on the primary network for all 3 of the blockchains as well as subscription fees for creating a subnet and blockchain are paid in AVAX and are burnt, creating deflationary pressure. AVAX is a fixed capped supply of 720 million tokens, creating scarcity rather than an unlimited supply which continuously increase of tokens at a compounded rate each year like others. Initially there will be 360 tokens minted at Mainnet with vesting periods between 1 and 10 years, with tokens gradually unlocking each quarter. The Circulating supply is 24.5 million AVAX with tokens gradually released each quater. The current market cap of AVAX is around $100 million.
Intro: This post will have a bit of everything. My general thoughts on the sector and its future, a bit of brief DD, and my gameplan.! I would not advise making any financial decisions based on my comments without doing your own research. Mods, in addition to the penny stocks, I also discuss an ETF and two funds that I've invested in that are not penny stocks. I felt that they were worth detailing though to explain my approach. I hope that's kosher. I'm still getting familiar with the sector so I'd love to get some feedback if anyone more familiar can lend some insight. If anyone is aware of some other stocks similar to the ones I selected below that I may have overlooked or if you think I was wrong to toss out any that I mentioned, definitely let me know! My thesis is this: Cryptocurrencies have had some runs in the past but it appears to me that they are gaining traction as a financial instrument on Wall Street. Investments by big companies such as OSTK and SQ, regulatory discussions, and the emergence of blockchain are a few catalysts. This and the general sentiment in the big financial I'm seeing leads me to believe that this sector could see some big money pouring in imminently. Several sectors this year have seen their valuations multiply by 5-10 fold in the course of months. Vaccine biotechs, then EVs, and most recently solar to name a few. It seems like this could easily be next. I could see this move being something akin to the EV movement with a strong initial short term movement and with continued momentum for months or longer. My stock selection strategy is this: Some penny stocks like MARA, RIOT, BTBT, EQOS, EBON, and HVBTF have had big runs recently but when you dig into their financials, they are either abysmal or not easily available (i.e. on Seeking Alpha or the OTC site depending on their exchange). As more legitimate companies start to invest money, the low quality pump and dumps will lose traction and more legit companies with a good future will emerge. I eventually came across CAN and BRPHF(OTC), the brief highlights of which are as follows. Both of these focus on supplying the actual infrastructure components such as bitcoin miners and ancillary equipment. This means that regardless of how financially healthy any sketchy companies doing the mining are, as interest picks up, these guys are making money. Both have implemented share buyback programs recently. While they may have some debt or be loss-making currently (as many legit growth companies are), they have healthy balance sheets and optimism from management. CAN is coming off of recent lows which it has held well, so downside is relatively low right now. BRPHF is at recent highs but momentum has been good in getting there and I believe it has lots of room to grow. My gameplan is this: I invested in both companies above this morning when both were around 5-10% change for the day. They both went to 15-20% later in the day and settled in to close around 15%. I'm feeling good about them so far but will be keeping a close eye on them. I also wanted additional exposure to the sector with a more direct reflection of its movement as a whole. To achieve this I took the following three additional positions, each a bit larger than the two above. First was the blockchain ETF BLOK. There are other blockchain ETFs out there, but I believe this has the most potential moving forward and is the most pure play of them. The other two are pseudo trades of bitcoin and ethereum itself. Right now to trade the currencies without taking any risks associated with owning a cryptocurrency is via a set of funds from Grayscale for various cryptocurrencies. The funds are essentially a trust with a fixed amount of the cryptocurrency, and shares of the funds are traded like stocks. As such, the share price is not a 1:1 correlation with the currency's exchange rate since speculation and the effects of supply and demand factor in. As a matter of fact, there are often large differences in how the share price and exchange rate behave. Because of this, these funds also trade at a premium. For example, you could actually buy significantly more Ethereum directly for a given amount of dollars than the amount of ethereum represented by the amount of shares you could buy with the same amount of dollars. So if people start deciding to buy the cryptocurrency directly, the share price could take a significant hit. I'm not too worried about that in the near term, but I will be monitoring that situation closely. I may actually switch to that strategy myself in the medium term if things go well. The two funds that I took positions in are ETCG for ethereum and GBTC for bitcoin. GBTC has been around for a while and has stabilized so that its price has a pretty good correlation to the bitcoin exchange rate. It finished today up about 7% compared to about 6% for the bitcoin exchange rate. ETCG is pretty new and is much more effected by supply and demand. For reference, it finished today up 25%. Right now its shares are coming off all time lows but as recently as July it was trading at 2-3 times the current value, and at one point in 2019, it was almost 10x. The risk is higher with this one but the upside is massive. In summary: I believe that digital currencies will see great things in the near future and have created a somewhat diversified strategy to give myself exposure, including the two penny stocks listed above.
First one to find the three hidden cultural references gets some moons.
What's this all about? I purchased $100 of each of Top Ten Cryptos in Jan. 2018, haven't sold or traded. Did the same in 2019 and 2020. Learn more about the history and rules of the Experimentshere.
September - BTC, although -8%, outperforms the field this month.
Overall since Jan. 2018 - Bitcoin miles ahead of the pack, and only one close-ish to break even point.
Combining all three three years, Top Ten cryptos underperforming S&P if I'd taken a similar approach.
Month Thirty Three – Down 76%
2018 Top Ten Summary for September After a rough start to September, crypto spent the month trying in vain to claw back ground. While a few coins rebounded quite a bit from the monthly lows, most ended up finishing the month significantly down. Out of the 2018 Top Ten group, Bitcoin lost the least, down -8% in September. NEM followed it’s winning August (yes, you read that right) with the poorest performance, down -26%.
Question of the month:
Which cryptocurrency exchange won approval to create America’s first crypto bank in September?
A) Binance B) Binance.us C) Kraken D) Coinbase Scroll down for the answer.
Ranking and September Winners and Losers
Rank of 2018 Portfolio - 50% no longer in Top Ten A lot of shuffling in September. On the upside, Bitcoin Cash and Cardano gained one place each landing at #5 and #10 respectively. Cardano gets special mention for re-entering the Top Ten. Heading the wrong direction were IOTA, NEM, Dash, and Stellar each falling two or three spots. The big story though, for long time crypto watchers, was the ejection of Litecoin from the Top Ten, down five places from #7 to #12 in just one month. For some context, Litecoin’s absence from the Top Ten is a Top Ten Experiment first. It is also the first time since CoinMarketCap has tracked crypto rankings that Litecoin has not been in the Top Ten. Drop outs: After thirty-three months of this experiment 50% of the cryptos that started 2018 in the Top Ten have dropped out. NEM, Litecoin, Dash, IOTA, and Stellar have been replaced by Binance Coin, Tether,BSV, LINK, and most recently, DOT. September Winners – Although it lost -8% of its value, this month’s W goes to Bitcoin. ADA gets second place, down -15% and climbing back into the Top Ten. September Losers – As most probably expected after an extremely out of character victory last month, NEM came back down to earth in September, bigly, down -26%. Litecoin finished right behind, down -24% and dropping out of the Top Ten. For the overly competitive, below is a tally of the winners of the first 33 months of the 2018 Top Ten Crypto Index Fund Experiment. Bitcoin still has the most monthly wins (8) and Cardano in second place with 6 monthly wins. With its poor September performance, NEM now has 7 monthly losses. Ws and Ls - One clear winner Every crypto has at least one monthly win and Bitcoin is unique as the only cryptocurrency that hasn’t lost a month yet since January 2018.
Overall update – BTC solidly in the lead, followed by ETH. Dash in the basement, LTC drops out of the Top Ten.
Even though BTC took a bit of a detour on its way back to break-even point, it is still far ahead of the field, down -17% since January 2018. The initial investment of $100 thirty-three months ago is now worth about $83. Second place Ethereum is down -49% over the same time period. At this point in the 2018 Top Ten Experiment, Dash is at the bottom. It is currently worth $70.49, down from a January 1st, 2018 starting price of over $1,000. That’s a loss of -93%. The initial $100 invested in Dash 33 months ago is now worth $6.77. The big story this month is LTC’s departure from the Top Ten, the first time since I started the experiment back in January 2018. Whether or not it will eventually fend off the new generation of coins remains to be seen, but it certainly is noteworthy to have one of the most well known and long standing cryptos drop out of the Top Ten. Consider pouring one out for Litecoin.
Total Market Cap for the entire cryptocurrency sector:
The crypto market lost over $35B in September and is down -39% since January 2018. The value of the overall crypto market is near where it was in August of this year, just a few months back. As painful as the beginning of the month was, looking at a table like this helps with perspective, especially if you’re panic prone.
After steadily dipping for months, BitDom increased a bit in September, up to 57.5%. For some context: since the beginning of the experiment, the range of Bitcoin dominance has been quite wide: we saw a high of 70% BitDom in September 2019 and a low of 33% BitDom in February 2018.
Overall return on $1,000 investment since January 1st, 2018:
The 2018 Top Ten Portfolio lost -$50 this month. If I cashed out today, the $1000 initial investment would return about $238, down -76% from January 2018. September broke an encouraging upward trend, but at least the portfolio is taking a break from the -80% range. Here’s a look at the ROI over the life of the experiment, month by month, for some context: 33 Monthly ROIs on Top Ten since Jan 2018 The absolute bottom was -88% back in January 2019. So the Top Ten Cryptos of 2018 are down -76%. What about the 2019 and 2020 Top Tens? Let’s take a look:
So overall? Taking the three portfolios together, here’s the bottom bottom bottom line: After a $3000 investment in the 2018, 2019, and 2020 Top Ten Cryptocurrencies, my combined portfolios are worth $3,340 ($238+ $1,538 +$1,564). That’s up about +11% for the three combined portfolios, compared to +31% last month. Here’s a table to help visualize: Combined ROI on $3k over 3 years - UP +11% That’s a +11% gain by investing $1k on whichever cryptos happened to be in the Top Ten on January 1st for three straight years. But surely you’d do better if you went all in on one crypto, right? Depends on your choice. Let’s take a look: ETH for the win Only five cryptos have started in the Top Ten for all three years: BTC, ETH, XRP, BCH, and LTC (unless Litecoin can make a comeback by the 1st of Jan. 2021, it’s not going to make the four year club!). Knowing what we know now, which one would have been best to go all in on? Ethereum, by a pretty good margin: the initial $3k would be up +104%, worth $6,118 today. The worst choice of a basket to put all your eggs in at this point in the experiment is XRP, down by almost one third.
Comparison to S&P 500:
I’m also tracking the S&P 500 as part of the experiment to have a comparison point with other popular investments options. The S&P 500 Index fell from an all time high in August, but is currently up +26% since January 2018. S&P since Jan. 2018 The initial $1k investment into crypto on January 1st, 2018 would have been worth about $1260 had it been redirected to the S&P. But what if I took the same invest-$1,000-on-January-1st-of-each-year approach with the S&P 500 that I’ve been documenting through the Top Ten Crypto Experiments? Here are the numbers:
$1000 investment in S&P 500 on January 1st, 2018 = $1260 today
$1000 investment in S&P 500 on January 1st, 2019 = $1350 today
$1000 investment in S&P 500 on January 1st, 2020 = $1050 today
Taken together, here’s the bottom bottom bottom line for a similar approach with the S&P: After three $1,000 investments into an S&P 500 index fund in January 2018, 2019, and 2020, my portfolio would be worth $3,660. That is up +22%since January 2018, compared to a +11% gain of the combined Top Ten Crypto Experiment Portfolios. That’s an 11% swing in favor of the S&P 500 and breaks a two month mini-streak of wins from the Top Ten crypto portfolios. S&P vs. Top Ten Crypto Experiments That’s seven monthly victories for the S&P vs. two monthly victories for crypto. The largest gap so far was a 22% difference in favor of the S&P in June.
September was a tough month for both traditional and crypto markets. What’s next for the rest of 2020? More volatility is no doubt to come as we enter the last quarter of a truly unpredictable and exhausting year. Buckle up. Thanks for reading and for supporting the experiment. I hope you’ve found it helpful. I continue to be committed to seeing this process through and reporting along the way. Feel free to reach out with any questions and stay tuned for progress reports. Keep an eye out for my parallel projects where I repeat the experiment twice, purchasing another $1000 ($100 each) of two new sets of Top Ten cryptos as of January 1st, 2019 then again on January 1st, 2020.
And the Answer is…
C) Kraken According to an official announcement in September, Kraken is “the first digital asset company in U.S. history to receive a bank charter recognized under federal and state law.”
Litecoin is a paradox: despite doing nil for advertising or development, LTC trading volumes and market cap demonstrate Litecoin is a relevant irrelevant coin. In this post, I'm going to draw the parallel between the early days of Litecoin — in which its community was in a frenzy over pumping Litecoin as the silver to Bitcoin's gold — and the present day state of Decred in which its community is in a frenzy over pumping Decred as an apparent "Chad Coin". Many years ago, back in the heyday of MtGox, the Bitcoin exchange space was in a wild west phase. By sheer historical accident, I received an LTC balance on one of the many now-defunct exchanges from those days. Having become an accidental LTC holder, I decdied to analyse its investment potential. At the time, the Litecoin community was in a frenzy about being the "silver to Bitcoin's gold", a dubious-at-best narrative that I never found personally convincing. I saw them frenzied up about the silver thing, and it just crushed me: "Aren't these people concerned about developing their technology? About contributing to the overall space?" As it turned out, they weren't. They were only concerned about positioning Litecoin as the silver to Bitcoin's gold using the Litecoin.org home page. Sound familiar? Rather than developing Litecoin's technology, and rather than making any semblance of a substantive contribution to the world, the Litecoin community was enthralled with marketing. "If only we could improve the website to make Litecoin seem more like The Silver To Bitcoin's Gold™", the community members cried. But LTC sees trading volume and is valued the way it is not because it is "the silver to Bitcoin's gold" — but because it is the only other coin besides Bitcoin with an immaculate conception. It is a carbon copy of Bitcoin without a premine and without an agenda. This means, in the absence of all marketing, investors know they can hold LTC to maintain a stake in a vehicle which is a clone of Bitcoin. Such a value proposition would never gain traction today, but because Litecoin was conceived at a time with little to no competition in the altcoin markets, exchanges listed LTC en masse, creating a sulf-fulfilling prophecy. And you hear not a peep from the Litecoin community about its "silver" angle these days, because positioning Litecoin in that way never mattered. Sprucing up Litecoin.org to capture that positioning was always a waste of time. It was always just a distraction. Just like positioning Decred as chad coin is a waste of time and doesn't and will never matter. LTC is perhaps the paragon of irrelevant, relevant coins. Litecoin's seemingly undeserved relevancy demonstrates better than anything else the fate of the coin is determined at its conception: cryptocurrency success is in large part hereditary. "Why was this coin built, and how did they go about it?" — that is what people care about. Concentrated pump efforts are still possible, of course — I exited my LTC position at the same time a literal Chinese ponzi schemer was pumping it — but over time the coin's relevancy merges with its genetics. You can't put lipstick on a pig and expect the public to be duped by it for a long period of time. Decred has the genetics to succeed: a phreaking censorship resistant treasury built by mad scientists. "Chad Coin" is a long term non-viable pump tactic akin to "silver to Bitcoin's gold". Gets community members worked up into a frenzy but several years later it counts for nothing. I wish we could learn from history.
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