What Is The Meaning Of NFT – Better Investment Than Crypto?

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If you have been apart of the crypto market for a while, then you probably already aware of the newest hottest trend for the past year – NFTs. In this post we are going to discuss the meaning of NFT, if you should spend time researching it, and top tips before investing!

Nothing should be considered investment or financial advice. Enjoy the ride!

Meaning Of NFT

What is an NFT?

A Non-fungible token (NFT) is a digital asset that contains identifying information recorded in smart contracts that are hosted on a blockchain.

This has multiple use cases that we can dive into, but lets dive into the name a bit more. What does Non-fungible mean?

What Does Non-fungible Mean

Non-fungible simply means that it is not replaceable. If you were to think about a specific item you own like your lucky socks or maybe an heirloom passed down from your ancestors – these would be considered (in a way) Non-fungible. They are not replaceable right?

Where as, if you just picked any pair of socks from Walmart, or if you picked a random item from a craft store you might be more willing to replace any of those items with any of the other ones of the shelf. These items are considered fungible.

So, when someone says Non-fungible token what should you think?

You should be think, something non replaceable in a token form. And that is exactly what it is! It is something that is stored in a token form that can not be duplicated or replaced. This can be all sorts of things like:

  • Video clips
  • Game characters
  • Tweets
  • Photos
  • Art
  • Animation
  • Historical items
  • Houses
  • Even other tokens

As you can see, a NFT can be just about anything that is represented on the blockchain that is irreplaceable and can be owned as a token.

Should You Research NFTs

If you are thinking about diving into this market, then you might want to first do some research.

Although if you are not aware, NFTs have been around for a little while. Single images are going for tens of millions, tweets like Jack Dorsey’s first tweet on Twitter are selling for millions, and common art can land you several hundred thousand dollars over night if marketed right.

Why wouldn’t you want to get a piece of that cake?

You might want to start with a simple course on Udemy, or maybe even a set of YouTube tutorials to get you accustomed to the NFT market. There are some important things you might want to learn before starting to purchase or create your first NFT.

Tips Before Investing

Lets go over some tips before diving into the NFT market that might help you in the long run.

Figure out how NFTs are priced and what they are going for:

You need to do your research about how much people are spending on NFTs and on what kinds of NFTs.

If you went to buy a mattress, and you offered $300, but they were selling for $100, you are going to lose a lot of money when you try to resell your mattress. Likewise, figure out a price range for certain types of NFTs before you even start moving crypto to purchase one. Here is a great article to read that will help with this.

Use A reputable Market Place:

This is very important since there are so many scams in the crypto space. You need to not only be patience, but be overly cautious when entering any new field of the market because you don’t know what you don’t know. People will take advantage of this. Because of that, it is a good idea to start with some of the top marketplaces before venturing out beyond.

Here are some you should start with:

  • OpenSea – One of the largest NFT marketplaces around. Offers lots of different types of NFTs for sale
  • Rarible – A community owned marketplace. Places a huge focus on art based NFTs
  • SuperRare – Reputable marketplace that has a focus in selling unique NFTs
  • AtomicMarket – Type of multiple website marketplace that offers plenty of verified tokens for purchase
  • BakerySwap – Rare automatic market and DEX that on the Binance chain. Very simple and easy to use process for minting tokens
Have Fun With It

As I recommend with people entering the crypto market, it is best not to take NFTs too seriously.

While this might sound simple, it really is a gamble when messing with these things. There is not clear way to know for sure if an NFT will be worth something one day, or if the hype will die down. Therefore, make sure to enjoy the process, don’t invest more than you are willing to lose, and make sure to keep up with your assets and protect them.

NFT Review

Just to review for those that are new, here are the things to take away from this article.

  • NFTs are Non-fungible tokens that are created with smart contracts that represent something based on the information provided and hosted on a blockchain
  • There is no clear pricing structure for these assets, so any investing will be largely speculation
  • Use the reputable marketplaces listed to get started and prevent scams
  • Have fun learning about the hottest trend in the market!

Thanks for reading our post on the meaning of NFT! We hope this help you understand a new exciting part of the market.

Cheers

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How To Find A Bitcoin ATM Nearby – Could There Be A Bitcoin Shortage On Exchanges?

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Right now the market is at all time highs with constant pressure to go up and down in large ranges. While most people expect a “super cycle” or a “different outlook” than the past cycles, history has a way of repeating itself.

What that means is, the market will ultimately move in a direction rather sharply within the next year. More than likely, that direction will be back down around a trillion dollar marketcap, but it could always be shot the other direction by unforeseen events.

If that happens, one thing is for sure – the market will be in trouble. Not just the normal trouble of exchanges going down for a bit, eth gas prices shooting up, and the occasional hack. I am talking about the kind of trouble that brings a shortage of assets available on exchanges.

Shortage Of Bitcoin

While we’ve never directly experienced this, it is highly possible to happen.

As Bitcoin continues to gain reputation as a global standard, governments and companies alike will start to take it more seriously as a reserve fund. Tesla has already put their foot in the door, but realistically it won’t be long before it becomes normal practice. This will inevitably lead to a massive surge in demand which supply will not be able to keep up with.

In addition, there are millions of Bitcoins lost from people misplacing hardware wallets and losing them. This is including Satoshi’s wallets that are yet to show any activity. Obviously, there is also a decreasing number or Bitcoins being mined daily with the halving already around the corner again.

With all of that in mind, you might want to start practicing other ways of getting your monthly Bitcoin purchases in. This is where Bitcoin ATMs come in!

Bitcoin ATM Near Me

It might seem silly, but there are probably not many OG Bitcoiners or crypto advocates that have ever purchased Bitcoin from a local ATM. Most probably wouldn’t know where to find one.

Luckily, There are a group of gas stations in most cities that have decided to offer crypto services. For instance, Circle K and Texaco have started to offer Bitcoin ATMs in most of their locations.

It is easier than you might think to find one though. There are sites that offer a service for you to find the closest Bitcoin ATM near you. The most popular is called Coin ATM Radar! Simply click on the link, enter in your city or zip code, and you can see all of the closest ATMs near you! This really is rather genius, but you can even use normal GPS on your phones to find them.

Even the IPhone maps app can be used to find one nearest you by typing in “Bitcoin ATM”. Here is a list of some of the top Bitcoin ATM companies with their location counts at the time of September 2021:

How To Use A Bitcoin ATM

They look like ATMs, except they’re not. These new kiosks will allow you to buy bitcoin and some will even offer other cryptocurrencies!

Now when you find the ATM nearest you, there are a few steps that you will need to be aware of. First, you will need to have a digital wallet on your phone that you can scan in order to purchase or sell your Bitcoin. This is standard for most ATMs, so you will need to make sure you have one before going to the ATM. I do want to mention that some ATMs will accept paper wallets, but I highly recommend against this since taking your paper wallet anywhere is very risky.

Once you have your digital wallet, you can scan the QR code native to it once requested from the ATM. Please note that this is the same process for all offered cryptocurrencies on the machine. For instance, if you are purchasing Ethereum from the Kiosk then you will need an Ethereum digital wallet.

Before you scan anything though, the machine should display some options for you.

Some of the options offered are typically:

  • Buy Bitcoin or the selected coin (with different ranges offered. The ranges usually look something like 0-$500, $500-$1000, or $1000+)
  • Sell Bitcoin or the selected coin
  • Redeem Voucher

Once you select your option, then scan your wallet!

Afterward, you will be requested to insert cash if you are purchasing, give cash if you are selling, or be deposited crypto if you are redeeming a voucher. It is that simple.

Warnings

While this might seem easy and amazing, there are are few other things you need to know.

  • ATM purchases and transactions are final. This is standard as well across the industry, so please make sure you double check your selected options before accepting anything on the machine!
  • Kiosk transactions are instant. While the transactions are also final, they are instantly pushed to the blockchain regardless of confirmations. This means that there really is no going back once you place your order.
  • There are Scams out there to try and get your crypto. The most common scam involving Bitcoin ATMs is the paying bills or services with an ATM. It is very important to remember that you CANNOT pay for any services or bills over an ATM. If anyone askes you to do so, you are being scammed. In addition, taking your paper wallet is a common way for people to get scammed as well. As mentioned earlier, it is a very bad idea to bring a paper wallet because people can steal it or scan it, or simply take a recording of it.

Regardless, please do not get scammed and always protect your assets!

Bitcoin ATM Machine Near Me

The best tips to remember from this article are as follows:

  • Use Coin ATM Radar to find ATMs near you
  • Get or bring a digital wallet for your transactions for security
  • ATM transactions are final
  • Bitcoin shortages will probably become a thing in the near future, so find the ATM nearest you today

Thanks for reading our post on finding a bitcoin atm near me!

Cheers

 

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The Next Big Coin To Watch – What Is The Graph Crypto

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The market has been swinging wildly since 2020, but what’s the next big coin to watch? Most of the top assets are too inflated to invest in right now, so what is still afforable?

As the market continues to surge, new coins continue to pump to the top to show their face and give opportunity for massive gains. Most recently, a coin did just that and is making waves around the pond. This coin we are mentioning is none other than The Graph.

Therefore, we are going to dive into the project and see what all the hype is about.

*Full disclaimer – I do not own The Graph (GRT) nor are we sponsored. This post is purely educational.

Nothing should be considered investment or financial advice. Enjoy the ride.

What Is The Graph Crypto

The Graph is an indexing protocol that is built on top of the Ethereum blockchain. It has a native token called GRT that is currently ranked pretty well on Coinmarketcap!

The project was started in late 2017 by 3 engineers that were frustrated with lack of tooling from the Ethereum eco-system. After over 3 hard years of work, The Graph went live on December 2020.

Right out of the gate the GRT token was listed on some of the top exchanges in the industry including Coinbase and Binance showing huge promise for the future of the project.

Why Is The Graph called the Google of Blockchains?

The Graph has been referred to as the “Google of blockchains” because of its indexing feature protocol.

This is similar to how Google indexes websites and allows us to easily access to them through a search engine. The Graph does just this with the data that is stored and hosted on the blockchain.

Providing clean, easily accessible data is extremely important for the future of the decentralized industry. Developers will need this feature to build fully decentralized apps that do not depend on third party providers, or from centralized data bases.

Specifically, the protocol mainly focuses on decentralizing the query part and API generation layer of the decentralized network. This allows for querying different networks such as Ethereum, 0r IPFS by using a native query language on the network called GraphQL.

What is GraphQL

GraphQL is a native query language on The Graph crypto that allows users to specify what fields they are interested in and what search criteria they would like to apply to their query. The data that is being queried is then organized into subgraphs based on the set criteria.

A single d-app can make use of one or multiple sub graphs. Furthermore, one sub graph can also consist of other sub graphs similar to Set theory.

The Graph then provides an explorer which makes it easy to locate and use sub graphs for some of the most popular protocols like:

What Is An Indexing Protocol Really For?

An Indexing Protocol allows you to find a particular piece of information similar to using the index in a book to find a specific chapter or page with information on it. In a similar fashion, computer data bases can use the protocol to cut the search time for data and respond quicker to queries enabling stronger real world use-cases.

Indexing protocols make querying blockchain data simple and efficient. They are considered infrastructure protocols because their utility will help build out applications and allow them to easily access data.

What Problem Does The Graph Solve For Blockchain?

Developers are currently having to choose between building slow decentralized applications, or fast ones that depend on a centralized entity to index the data. This makes apps and web services useable at scale but not truly decentralized.

The only other option is to build an indexing or sorting system that can be accessed like a protocol which can take up to a year and is duplicate work across the industry wasting valuable time that could be used for further development.

This is why a decentralized query protocol for blockchains is a necessary solution. Over time, GRT will become one of the main necessary infrastructure protocols for building fully decentralized applications at scale.

Are There Other Indexing Protocols?

There are a few similar indexing protocols currently on the market, but The Graph is the clear leader for the industry. Here is a list of the other top similar protocols that you can research to compare to GRT:

Now, lets dive into the actual architecture of the network!

Protocol Architecture

lets break the architecture of the protocol network down into several parts starting with the indexers.

Who are the Indexers?

They are the Node operators of The Graph network. They join the network by staking the GRT token and running a Graph node. Their main function is to index relevant sub graphs.

The indexers earn rewards by indexing sub graphs and are paid fees for serving queries of sub graphs. Unlike most blockchains, these indexers can also set prices for their services, but prices are kept low through competition with other indexers or aka by the native marketplace on the network.

Who Uses The Indexes?

The people who use the indexes are called consumers!

The consumers query indexers and pay them for providing the service of good quality data from different sub graphs. The consumers can either be end users, web services, or applications.

Who Manages The Indexers?

Curators are the “managers of indexers” if you will.

Curators use their GRT tokens to signal what subgraphs are worth indexing. They are typically developers that want to make sure their sub graph is indexed by indexers, or end users that find particular sub graphs valuable.

In addition, these curators are incentivized through rewards for how popular their sub graphs become.

Are There Other Participants On The Network?

Yes, there are delegators and fishermen as well on The Graph network.

  • Delegators stake their GRT on behalf of indexers in order to earn a portion of indexers rewards and fees. These guys don’t have to run a Graph node.
  • Fishermen are useful incase of a dispute on the network. Think of them like the hall cops. For example, if an indexer provides incorrect data to a consumer, the Fishermen will intervene and correct the mistake.
Where Can You Buy GRT

If this project interests you, then here is a list of exchanges you can find it on to purchase. As always, please do your own research after this post to make sure this project aligns with your standards!

In addition, many more exchanges are starting to offer GRT. In fact, you can earn $50 of free GRT now by going to coinbase earn and simply learning a few more things about the project.

The Graph Crypto Review

Thanks for reading this post on what is The Graph crypto! This project has huge potential, so definitely be on the look out for it soon. Although, before investing please remember to do your own research!

Cheers

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Should You Start Mining Crypto? Top Things You Need To Consider

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If you are new to crypto or maybe just a lurker that constantly monitors, you might have thought about crypto mining at some point. The thought occurs to me every now and then: “Is it too late to start mining?”

In this post, we are going to dive into the main question of profit, the main types of mining, and things to consider before you start mining.

Nothing should be considered investment of financial advice. Enjoy the ride.

Is Crypto Mining Profitable?

Before we get to far into this post, we need to answer the elephant in the room: Is crypto mining profitable?

Yes and no. It all depends on the timing of the market, the coin you choose to mine, and of course your mining setup.

Although, there is almost always a few coins that you can continuously mine profitably at any given time. This is because the difficulty to mine coins fluctuates based on the amount of people mining them. In short, if the price of assets drop and less people mine it, the more you receive and are compensated for your contributions through mining.

So as you can see, it is generally profitable to mine most cryptocurrency given you have the proper equipment. This is especially true if you hold the assets you mine till a bull run and don’t just sell them out right.

Now, lets get into what crypto mining really is.

What Is Crypto Mining?

This is a question I get all the time when people start talking about Bitcoin: what is mining?

To put it simply, mining is about contributing some type of resource (typically computer power) to authenticate a block of transactions by solving an algorithm. Once your computer solves the algorithm, you are then rewarded by the native currency of the blockchain you are contributing to.

Mining is further broken down into 3 main types: ASIC, GPU, and CPU. Lets learn about these to give you a solid foundation of crypto mining!

What Is ASIC Mining?

ASIC mining is short for: Application-Specific Integrated Circuit Miner.

This type of mining is the most efficient form of crypto mining but also the least known. ASICs are typically designed for a single purpose use. What this means is that they are usually specifically made to mine one cryptocurrency. Now, some can mine multiple coins if they use the same underlying algorithm. A good example would be Ethereum and Ethereum Classic.

Pros: They are cheaper and mine much more efficiently than CPUs and GPUs.

Cons: They only mine certain coins, and are not as durable or upgradeable

What Is GPU Mining?

GPU mining is short for: Graphics Processing Unit.

This type of mining literally uses the graphics card from computers that are used to play games or watch shows to mine cryptocurrency!

GPU mining has become more popular recently, but is more expensive than ASIC mining. In addition, the costs of power consumption and general maintenance can cause issues with staying profitable long-term.

Pros: Can mine multiple coins and are efficient

Cons: More expensive and uses more power. Slightly inefficient compared to ASICs.

What Is CPU Mining

CPU mining is short for: Central Processing Unit.

This type of mining is the most commonly known but sadly outdated at this point. The entire idea behind this type of mining originated with Bitcoin. It lets you use your basic computer processing power to solve algorithms to get rewards. As you can guess, it is now mainly a gateway for people trying to get into mining and play around with the entire process at this point.

Pros: Anyone can mine from any computer or phone! Also provides people with an easy way to experience and experiment with mining without expensive hardware.

Cons: It is extremely inefficient and outdated. Basically impossible to profit from it

Whew! Now that we have the basics out of the way, lets discuss things to consider that can drastically effect profitability.

Use A Mining Calculator

This is where most people start their mining journey before they even consider what coins to mine or what type of miners to purchase. Use a crypto calculator!

Even though you might really really love a certain crypto project, it might just not be realistic to mine it profitably. It is very important when you approach mining to put away bias and treat it purely as a business investment.

Use the crypto calculator to see which coin will give you the best return based on your situation. This includes: fees, electricity costs, costs to purchase the miners, and expected price of the assets.

Research The Token Economics

With each coin you decide to mine, there is an entire market behind it that you need to research.

For example, does it have enough liquidity to sustain you constantly selling the asset if you plan to take profits? Does the price volatility reflect instability that could effect your month to month cash flow?

These are all questions that you need to research before committing potentially thousands of dollars to mine. In addition, you need to look into how reliable the project is long-term.

Do you think that the project will be there in 3 to 5 years? Or, do you think the project will lose out to new projects coming into the market? Dig into the roadmap and website to make sure it has a strong team, community and liquidity levels before ever committing to even purchase one miner.

Create a Business Plan

Like the Token Economics, you need to establish a business plan with mining.

Most people do not know this, but if you mine personally you can not write off any of your expenses like electricity or even purchasing the miners. In addition, you STILL have to pay taxes on when the asset is mined and when you sell it. Yikes.

The easiest way to work around this is to create an LLC.

Once you have done that, you can write off your expenses and keep more of your profits on the backed of your mining operation. For instance, if you spend $10,000 on miners with an LLC, you can take $10,000 in profits without having to pay taxes on it from your mined coins. This is extremely important and you need to have this figured out and set up before you start mining.

In addition, have a plan for when you are going to sell your assets. Will you do it monthly, or just wait for the next bull run? Did you know that if you hold your assets for over a year that they are taxed differently? All of these things you need to consider before diving head first into mining.

Make sure you have everything mapped out to maximize your profitability!

Crypto Mining

This concludes our post on crypto mining! I hope this post left you with basic knowledge of mining, and gave you something to consider before you start! At the end of the day, you can make plenty of money mining, but there is always a system that needs to be put in place first.

Take your time, map it all out and you could make more money than your job currently!

Cheers

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Are You Addicted To Crypto? Why Is Crypto Addictive?

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Usually we like to post about news, education, or even the occasional shill piece now and then to keep the fun of the crypto spirit in our posts. Although, today we want to shift slightly to something that really does not get enough attention. It is a dark side of crypto that people want to dismiss and ignore.

That dark side is the rise in crypto addictions that are not getting better anytime soon.

Why Is Crypto Addictive?

Crypto addition is the point where investing is no longer a choice, but a need.

This is usually coupled with constantly researching new coins out of fear of missing out on the next big thing. Most addicts even start to develop extreme points of views involving methodology or strategy becoming almost territorial of their investments. Of course no addiction is complete without constantly checking your account balance and your wallets 25 to even 100 times per day.

This is what some people end up experiencing and it gets worse over time. Like all things in life, too much of any one thing can be very bad for you, so you need to be aware of some of the signs indicating addiction.

Signs of Crypto Addiction

Here are some signs that you might be addicted to crypto:

  1. You start to take increasingly riskier decisions then you typically would
  2. You contemplate spending above your means for investments with no regard to the outcome
  3. You make compulsive trades and decisions about your portfolio
  4. You might take a loan or sell things just to continue to invest
  5. You might even be hiding or lying about some of the investing
  6. You no longer enjoy your usual activities before crypto

All of these things can be clear signs that you are addicted to crypto and need to start toning it back a bit. While there are people that have scored it big in this space, it is not worth your mental health and your potential future.

Sometimes understandings why your addicted to something can help yourself reason through the struggle. Therefore, lets look at some of the reasons why crypto is addictive.

Reasons Why Crypto Is Addictive

Here are a few reasons why crypto is addictive to so many people:

  1. Crypto hosts some of the highest swings of any market leading to huge gains and losses
  2. The constant generation of thousands of projects and tokens make investors feel the need to explore and research all of them
  3. The crypto community is very diverse which can provide a safe space for creative thinking. The sky is the limit at times
  4. The crypto community is also very engaging and confrontational which can be appealing at times
  5. Crypto is constantly moving and changing as a 24/7 living ecosystem that always has something catching investor attention
  6. There are feelings of freedom and uniqueness to owning or investing in crypto that is unlike any other asset class
  7. Fear of losing your assets or missing out on the next big investment (FOMO) leads to constant stress and anxiety
  8. Most people that invest feel innovative or revolutionary in a way leading to an urge to do more or invest more
  9. Hodling is an expectation which leads to people struggling with selling assets even in bull markets
  10. People become very emotional about projects and lose sight of the practicality of it all

As we can clearly see, there are plenty of reasons why crypto is so addictive. It is a thrill, a rush, something new that does not fully have answers yet and can offer people an entirely new lifestyle! Although, it can just as easily do the opposite. The allure of crypto can become a cave with no way out for some people.

Steps To Ease Addiction

It is not always easy to step away from something that has become ingrained into your core.

For some people, it might take weeks or even months to fully step out of crypto addiction. For most people though, it might be easier than you think. Here are a few ways you can help curve your addiction:

  1. Find an alternative asset class to study or focus on other financial opportunities
  2. Try to step away from your common place of study or investing to a new location to practice new habits
  3. Create a time limit or period for investing and studying, and afterward try not to interact with it
  4. Set limits to investing per month with a budget and stick to it
  5. Set limits to trading per day or per week that you will allow yourself to make
  6. Start creating more long-term goals and focus less on short-term goals
  7. Seek professional help from a trained therapist
  8. Attend a local addiction group where you can discuss the issue at hand and learn more ways to be preventative

The best advice I can give anyone currently struggling with crypto addiction is to get on a good sleeping schedule, become more active like working out or going for a daily walk, and focus on your mental health. This might be by listening to podcasts, reading a book, attending a religious gathering, or whatever works for you.

Small steps towards a more healthy mentality is great advice for everyone at any point in life. At the end of the day just remember, crypto is only a digital asset that represents money and ownership. It can’t make you happy, and it is not worth your well being.

Cheers

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Crypto Opportunity Costs Could Be High

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Before you go into any crypto investment (especially risky ones) you need to run some numbers and calculate your crypto opportunity costs. For instance, how much are you willing to lose, how much are you expecting to get in return, what are you giving up to make that investment, what is your exit strategy, what does the market portfolio offer, and many other questions like these should come to mind.

In this post, I want to dive into important factors investors need to consider before investing and discuss how you can determine your best investment for yourself!

Nothing should be considered investment or financial advice. Enjoy the ride.

Crypto Investment Expectations

The crypto market is… well crazy. Things go 10x over night and then drop 85% a week later. It really is quite the thrill, quite the rush for novice and experienced investors.

With all of the craze, it is extremely easy to get caught up in it all. In addition, the crypto market is loaded of extremely biased investors waiting to shill their coins. New comers generally get sucked up into the propaganda and fairy land of promises by at least one project they put their money in. This happened all over the place in the 2017-2018 crash where people lost all millions, but still exists heavily in the market we have today.

If people take a step back though, they can start to think about what their end goal is. That end goal generally for most people is to get a profit or a return for your investment. Not to lose money chasing a fairy tale.

Therefore, lets go over the first thing to consider before ever investing in anything – opportunity cost.

Opportunity Cost

Have you ever gone out to eat, ordered something, but then immediately regretted it once you saw what someone else ordered? This is sort of like a round about way of discussing opportunity cost.

By ordering a burger, you have forgone your opportunity to have a steak. Most people might not be with that.

What if you did not know the other options on the menu? What if you did not “do your own research” and see that there was a back to the menu with steaks, seafood, and pasta? You just simply glanced at the menu, saw “burger” and said that sounds good.

You might not enjoy your meal once you see a steak walk by sizzling.

Opportunity cost is all around us. And in investing, it goes a bit deeper than the simple ordering illustration above.

Lets consider an investment in Bitcoin.

If you purchase $10,000 worth of Bitcoin, what are you doing? Well, for starters you are giving up your $10,000, but it is really more than that.

For example, most banks can give you 1%-2% return on your cash. So, in reality you are already forgoing that interest of potentially receiving 2% return on your capital.

Therefore, you should already at a minimum expect a 2% return on your Bitcoin yearly to make the investment worthwhile.

Luckily, Bitcoin returns are much larger on average. But this is all hypothetical anyways.

Compounding and Cashflow

Clearly, 2% is miniscule to the returns you could receive from grandfather Bitcoin.

Well, that is because Bitcoin has high volatility. Any asset with high volatility poses itself to give potentially higher returns.

But we are getting off topic. If you would have put your $10,000 into USDC stablecoin and put that into Blockfi, you could be getting an 8.6% annual return on your capital which would compound year over year.

Now as you see, your Bitcoin needs to return a minimum of 8.6% annually in order for your investment to be worth while. Now as you see, the expected return to of your Bitcoin is growing the more you know and dig deeper.

Although, what about compounding your Bitcoin in a interest account?

What if you invested your Bitcoin into an interest account, gaining more Bitcoin all while it was also growing in value? Well, now you are thinking. By doing this, you reduce your risk of investment, reduce your required return necessary to make your investment worthwhile, and improve your potential capital gains on your investment. Cool huh?

Market Return and Market Portfolio

Another thing to consider when investing is the market return. What is the average return on the market? Is your investment going to beat that, or is it better to “follow the crowd”?

Warren Buffet (who ironically dislikes crypto) actually has some wisdom here. He recommends investors to only invest in the things they know a lot about, and bet big on only a few assets, instead of a portfolio of 10 or more assets. This was actually Mark Cuban’s strategy as well. He made his money investing in the things he knew. Bet big on a few things you know A LOT about.

Therefore, it is almost never advisable to “follow the crowd” unless you know very little about the market.

Cash Flow

The last thing to consider before investing is cash flow.

There is a reason buying businesses and the private equity markets are so large. That is because they can provide cash flow. Or at least they are supposed to.

By investing your money into the market, you could be removing this option from your portfolio. This is why some people will only invest in dividend paying stocks, or crypto with proof of stake that will return small profits over time. Sort of like interest accounts once you think about it.

If you can make money off of your money, then that is also an “opportunity” that needs to be considered before investing.

Cash flow is king in the eyes of the rich, but only if you can KEEP your assets. The rich will leverage equity, post collateral, finance through securities, or do whatever they have to in order to keep their assets. Keep this in mind before you give away your capital or your assets for something that does not give a little bit back overtime guaranteed.

Crypto Opportunity Costs

I hope this article helps you guys understand crypto opportunity costs and some investing basics. Always consider the other opportunities before you invest your money, and at the end of the day try to protect it at all costs. Thanks for reading and best of luck with your investing!

Cheers

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Blockchain Next Steps – Building Interoperability On Blockchains

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Whew. We can all finally take a breather and relax for a minute because most of the largest projects on the market have FINALLY released their main nets by now – right? Well, not exactly.

While the crypto market has achieved huge things already in 2020 and 2021, there is still a massive, I mean massive elephant in the room. Awkwardly, none of us can talk to each other about the elephant either! It’s almost as if we need to learn how to communicate to one another in order to solve the worlds largest problems together.

Nothing should be considered investment of financial advice. Enjoy the ride.

Building Interoperability On Blockchains

But wait you might be thinking. How come we can’t talk to each other about the elephant? By “we” I mean blockchains and by “elephant” I mean the disconnected data hosted on separate blockchains.

(que the Vsauce noise)

Lets break this down. Blockchains are great because they are decentralized (in theory at least) and that means that the chains hold, store, and continues to bring in immutable data. This data is made up of random things like transactions, the chain’s ledger, messages, and sometimes parts of smart contracts by there is much more.

Anyways, the point is that the blockchains like Ethereum, Cardano, Tron, EOS, and a few other projects enable smart contracts. Smart contracts enable people to write agreements that are executed after an event, outcome, circumstance, or what have you.

This is great until a smart contract needs additional data not on the native chain. Unfortunately, that data might be… on another blockchain.

Or sometimes those smart contracts need value in terms of crypto. For instance, what if a smart contract needs to convert Bitcoin for Ethereum?

Anyways you get the picture. These things can’t “happen” yet autonomously and without a third party like an exchange which is kind of a problem.

To enable them to be able to run these kind of smart contracts, what do blockchains need? What do they need in order to be able to communicate?

Communication Between Chains

At the end of the day, in order for smart contracts to be effective they need to be able to send and receive data collectively.

Not only data, but they need to be able to convert currencies, initiate code, and do so in a matter of efficiency across multiple layers of different chains. This seems like a lot. In addition to that, there needs to be an authenticator of this new data, a recollection of the values transacted, and a way to store it all for a ledger. Quite the conundrum.

Basically, we are saying we need an internet of blockchains. A place where everything can talk to each other, a place where chains can interact and evolve together and benefit from one another.

Internet of Blockchains Meaning

This phrase has been thrown around quite a bit. A few projects like Polkadot, Cardano, and many others have been called it but what does it mean?

The phrase “Internet of Blockchains” means a place or concept that enables multiple blockchains to communicate their data, transact value, and store all of it efficiently as a record. Not to mention execute smart contracts across all chains, and at any time being able to verify the data being input across chains for contracts.

The data verification process is mostly handled with oracles which would be a project like Chainlink. This protocol enables blockchains to pull verified and trusted data to use for their contracts. Other projects like IOTA are building their own internal oracles, but regardless, the Internet of Blockchains will need this feature.

Clustering of Chains

If you have read some of my older posts, then you will know the phrase clustering of chains.

Personally, I think this will be the temporary solution to this problem until a project comes along and takes the medal of “Internet of Blockchains”.

A cluster of chains would be if Cardano, IOTA, and VeChain all got together, built bridges to one another to transmute data and tokens, and then went live to smart contracts enabling autonomy. This would be huge for the market, but even more so for the token economics. People would be able to write contracts that could be settled in IOTA, ADA, or VET.

The possibilities are endless. Long-term there will need to be a more global solution similar to what Polkadot is doing with their Para-chains. Charles Hoskinson of Cardano even commented that Polkadot is what Ethereum 2.0 should have been. If you want to learn more about that project then click the link right above. That posts goes into detail about their para-chain solutions.

Only time will tell who comes out on top. Although, the first project to solve this problem will be essentially just that – the Internet of Blockchains. The next Google of data and value.

Interoperability On Blockchains

Thanks for reading my post on Interoperability On Blockchains. There is so much to dive into given this topic, but I just wanted to do a general overview for those that have been asking. As always, enjoy the ride.

Cheers

/by

Traditional Market and Crypto Good for Each Other? – What’s to Come

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In this post we are going to take a break from discussing crypto projects individually and talk about the macro economy of crypto at scale. That is, the entry of the larger traditional market. This quickly raises a few questions like:

  • Is this good for crypto?
  • Why do companies want to hold crypto
  • Where is crypto headed

All great questions, especially the last one, but lets take time to discuss them properly.

Nothing should be considered investment or financial advice. Enjoy the ride.

Traditional Market and Crypto

To kick things off, do you think the traditional market is good for crypto? Surprisingly, the answer is not as intuitive as you might think.

Yes, more investors, fewer barriers of entry, regulation even in some circumstances, and increased exposure are all great for crypto as a whole. Due to this, we are starting to transition out of the “wild west” days of the crypto scene and into the first real developed look at the market.

What does that mean? It means projects are finally getting exposure to real world problems, providing real world solutions, and the market leaders are watching. More than that, the world is starting to adopt blockchain in forms of investment and use-case at an astounding rate. No more of the hype followed by dead-end developments. The market is starting to blossom into what it will one day become – the next catalyst to a new financial system.

But hold up just a second. What is the next big thing for crypto currently in a investing sense? By that I mean, what is going to continue to attract people short-term to the crypto market? That would be diversity.

The Next Big Thing – Diversity

You see, the more that blockchain and this space starts to intertwine with the real world economy, the more it starts to follow it. Unfortunately, this means that it also has to participate in its cycles.

The largest cycle of all – the long term debt cycle is currently coming to an end some might say.

The long-term debt cycle goes on about once every 50 or 75 years. The long-term debt cycle is when you begin a new type of money and a new type of credit. This happened in 1945 when the New World order at the end of World War II with the establishment of the Bretton Woods monetary system. The Bretton Woods system defined all currencies in relation to the US dollar. The US currency was now effectively the world currency and the standard to which every other currency was pegged. Currently 70% of the money and credit that exists in the economy is running by dollars and what you have traditionally is a breakdown.

– Financial Goodness

This means that companies will be looking for one thing. Given they agree with Ray Dalio’s prediction of the end of the long-term debt cycle, they will be looking for diversity. A huge advantage that crypto has is that it is anti-inflationary. Now yes the price can go up, but the number of Bitcoins for example never can and never will.

Therefore, it is safe to assume that more companies (Tesla for example) will start to view crypto as a sort of hedge against this pending dilemma. In the event that the dollar starts to lose traction around the world, companies can hold crypto for now to protect their wealth. This will only last for so long, but for now crypto is still independent of the traditional market.

Crypto in Reserves and Index Funds

This will probably mean that soon it will be common for companies, banks, and governments to hold some of their reserves in crypto. This is already happening all over the globe, but it is still hush hush. Tesla was the first huge company to put it out there publicly and in everyone’s face, but these entities are genuinely concerned about the pending debt crisis we could experience.

They are looking to diversify risk. Luckily, Bitcoin and other crypto currencies do just that. Along with traditional commodities like gold and silver, we will probably soon see another spike in the crypto scene as people prepare for the inevitable.

That is as long as wealth creation does not continually hold off the crash.

Wealth Creation and Over Leverage

While wealth creation is a good thing inherently, it is also apart of the reason Bitcoin exists.

While the U.S. continues to print trillions and trillions of dollars, all it does is manipulate the already serious issue of the world’s debt problem. In time, this same problem will slowly creep into the crypto market as well.

Already platforms are encouraging lending and loans over selling your crypto. “Loan away your crypto and keep it at the same time!”

This is great for you to retain your assets, but all this does is create a similar problem down the line potentially if not well kept up with.

Problem with Loans and Credit

For instance, if bob owns 2 Bitcoins which is around $100,000 lets say. Bob could take a loan out on his assets for $30,000-$40,000 and keep his Bitcoin.

Although, what if in 3 months his crypto drops 85% similar to 2018 and now Bob actually owes more than his loan is even worth. This is exactly what happened in the 2008 housing market and caused a crash. The more “wealth” that is created, the more credit given out, the more loans taken only provide more and more variables to the equation.

If precautions are not taken on this, we could be setting ourselves up with a huge problem down the line.

Where is Crypto Headed

With all of this in mind, where is crypto headed?

I mean we have NFTs costing thousands and millions of dollars, the Defi space is exploding with traction, and most of the largest projects on the market have achieved mainnet by now. Huge huge things are happening, but we are still so far from our goal. Our goal of a new financial system where the economy is driven and funded by the community, by cooperation, and kept in check by a decentralized entity that is trusted and verifiable.

The next step of the market is interoperability. We will discuss this in the next post, but that is what is coming.

Clusters of chains, para-chains, side-chain solutions, layer 2 protocols, and more collaboration between projects. It is an exciting time to watch the market mature, and the projects that team up in the coming years might just surprise us. Only time will tell.

Traditional Crypto Market

Thanks for reading this post on the Traditional Market and Crypto. It was a bit general, but I wanted to get this stuff out of my head and onto “pen and paper”. If you liked it, please share, sign up for our mailing list, or simply go out and make a difference in this broken world.

Cheers

/by

Difference Between Cardano and IOTA – Which is the Better Investment?

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Recently on Twitter I volunteered to write a post about the difference between Cardano and IOTA. Due to the positive responses, here it is!

Nothing should be considered investment or financial advice. Enjoy the ride.

Upon agreeing to this post I realized three things:

  1. There are no good posts or videos comparing these projects on more than just the basic characteristics.
  2. I have already written a good bit about both projects.
  3. The click-bait title was way too easy to write.

If you want the basic “circulating supply”, “daily volume”, etc etc boring stuff for Cardano and IOTA, then please head over to coin market cap, pull up two tabs and look at it. If you want to understand each project, learn the differences, and read about my recent portfolio decisions involving these projects, then continue on please.

Overview of Cardano and IOTA

Before we can compare these two projects, we need to do an overview of each project starting with Cardano!

by the way, if you do not like reading – scroll down to the “QUICK OVERVIEW” to save time and skip most of the reading. Anyways, here is Cardano.

Cardano In General

From my previous post on Cardano here is what we said about the project in general:

The developers of Cardano see it not as just another cryptocurrency but rather the future of how the industry works as a whole.  Academics and engineers are applying philosophies behind mission-critical applications (aerospace and banking, most notably) and producing high-assurance, peer-reviewed software to power the platform.  While some ecosystems seek to provide the utmost in privacy and decentralization, Cardano hopes “that it will balance the needs of users with those of regulators, and in doing so combine privacy with regulation” (“What is Cardano”).  This goal spurs the developers to provide a world of fair financial services to anyone desiring to participate. 

Pretty cool. What about Mining on Cardano like Bitcoin?

Mining On Cardano

Here is what we said about Mining on Cardano in our Cardano post:

What does mining look like in Cardano?  Short answer:  very different than what you’ve seen in other systems.  Rather than utilizing the standard proof-of-work approach, Cardano has chosen to base block validation on a proof-of-stake methodology.  What does proof mean in this situation?  It refers to the evidence that a given block of transactions is actually legitimate (the transactions have been validated by an approved party).  That makes sense – it’s similar to what we have learned about in proof-of-work systems.  But what about stake? 

The Cardano Settlement Layer comprises the entire system of Ada within the Cardano network.  Any one particular node has a small subset of this value; hence, dividing what a particular node has by the total value of the Cardano network gives a relative value or “stake” for any particular node.  So, a proof-of-stake methodology refers to the evidence of legitimacy that a particular node has as compared to its impact on the system as a whole.  While it may sound simple (or maybe it doesn’t), it’s actually quite a complex series of events.

The complex series of events if run by a protocol called Ouroboros.

Ouroboros Overview

And here is our explanation of the Ouroboros Protocol:

By incorporating Ouroboros, the Ada cryptocurrency doesn’t have to rely on a global infrastructure of power-hungry servers.  Instead, stakeholders who will help form the next block on the blockchain are randomly chosen based on their proportional stake size (in accordance with the blockchain ledger).  These chosen stakeholders are referred to as “slot leaders” (more on this in the next paragraph).  A secure, multiparty implementation of a coin-flipping protocol is used to select the next slot leader to form a block.  Note that there isn’t a typical “block reward” for the node who solves the next block (like is common in a proof-of-work based crypto). Rather, the node responsible for transaction validation makes profits based on the transaction fees within the transactions.

Now that you understand some of the frame work around Ada and Cardano, lets dig into the people behind it all.

Cardano Company Structure

What about the company or structure behind Cardano? Well, that is quite interesting.

The project is divided into three entities.

Lets talk about the most popular piece, IOHK.

IOHK

IOHK (which is now based in the US) is the company where the fearless leader Charles Hoskinson resides and does his famous (and random) AMAs. Charles is a legacy member of the crypto space and was even a co-founder of Ethereum.

IOHK is directly responsible for the development of the Cardano protocols and updates. They have a history of working with some other projects around the space as well like Ethereum Classic and Horizen at a point. (This was speculated, but I don’t believe confirmed? Don’t quote me on that.)

Anyways, the second part of the trio is called Emurgo.

Emurgo

Emurgo is a multinational blockchain tech company that aims to provide solutions for developers, startups and governments. (per the website) Basically, Emurgo is the investment arm of the trio. They are responsible for funding and creating partnerships for the project as a whole.

In addition, they are responsible for some development on the project like the light native wallets Yoroi.

Fun fact: I actually got interviewed by Emurgo 2 years ago. Unfortunately, moving to Japan was not in the cards for me. Anyways, the third piece of the trio is called the Cardano Foundation.

Cardano Foundation

These are the guys that try to run the community aspect of the project. They are based in Zug, Switzerland. Their mission is to “standardise, protect and promote” the Cardano Protocol technology.

These guys were not very nice when I made a post about Cardano rebranding on accident. Even after I fixed the post… but it’s cool.

We have pretty much covered Cardano. If you want to learn more about the project then check out this post, or go to their website here.

Cardano QUICK OVERVIEW

Here is the brief overview on Cardano for those like me who forget things right after they read them or for those too lazy to read everything above.

Cardano is aiming to use a function based language (Haskell) to promote a regulatory friendly and privacy centric blockchain that can be easily verified and provably secured through formal verification all done through academic research. It wants to bridge the gap that Ethereum left by being the intermediary of blockchains, aka the internet of blockchains. They also aim to safely bring the traditional financial realm to the space and enable them to use blockchains for real world solutions.

Now lets check out IOTA.

What Is IOTA

Ok, luckily I have a few (9) posts on IOTA. Here is our entire series of IOTA for those who really like to dig deep. Also, these posts and MADE to be easy to digest and for people with little technical background or knowledge of IOTA. I highly suggest reading them in order if you want to learn more. If you read all 9 of these posts, you will know just about everything you need to know about IOTA.

  1. IOTA – What’s a Tangle – Covers: Tangle Graph Theory, Tangle Vertex, Concept of the Tangle, Tangle Versus Blockchain
  2. Tip Selection – Part 1 – Covers: What Does a Tangle Look Like, Tip selection, Random Walks
  3. Scaling The Network – Part 2 – Covers: Unweighted Random Walk, Tangle and Transactions
  4. Combating Lazy Tip – Part 3 – Covers: Lazy Tip, Randomness Generation
  5. Transaction Approval Process – Part 4 – Covers: Transaction approval process, Transaction Confirmation Simulation, use cases
  6. RIP Coordinator – Part 5 – Covers: Voting On IOTA, Coordicide Modifications
  7. Removing the Coordinator – Part 6 – Covers: GoShimmer, attacks, Mana
  8. Spam Protection – Part 7 – Covers: Iota Rate Control, Adaptive pow, Verifiable delay functions, Additive increase multiplicative decrease
  9. Approval and Consensus – Part 8 – Covers: Consensus Post-Coordicide, Efficiency and Orphaned Transactions, Cellular Automation Approach, Shimmer Consensus Mechanism

Anywho, what is IOTA?

IOTA (or the Internet of Things Application) is both an open-source distributed ledger and cryptocurrency that entered the crypto market back in 2016. The IOTA project aims at providing the Internet of things with a better, fee-less, and all encompassing “blockchain” for use in the machine to machine world that is coming. They focus on providing integrity and provability to their data through native oracles while also focusing on efficiently transacting value through the tangle.

What is the Tangle

Here is what we said in our post: What’s a Tangle (links above):

While the blockchain is a synchronous set of blocks stacked one after the other, the Tangle has no concept of this rigid synchronicity.  Instead, the system acts asynchronously and can have many forks and branches that all converge over time.  The main impetus for this decision was scalability of the distributed ledger.  Because each node participates in the validation process during the performance of a transaction, the network of validated transactions continues to strengthen while staying nimble.  This allows computationally bounded devices (such as IoT devices) to participate in the network (no need for racks and racks of custom ASICs to validate transactions by calculating terahashes of computations). 

In addition, transactions on the network are “free” in that they require neither the sender nor the receiver to pay any MIOTA (IOTA’s token).  Instead, each transaction requires the node to perform two validations of other transactions within the network.  The choice of these transactions is outside the scope of this article, but feel free to look at the Whitepaper if you really want to know what’s going on here (especially starting at section 2).

Tangle Vs Blockchain

What about the Tangle vs a traditional Blockchain? Here is what we said in our post:

There are few more important distinctions to make with the Tangle and how it relates to a standard blockchain:

  • The Tangle provides virtually unlimited throughput (as opposed to, say, Bitcoin with about a 10-minute block production schedule or Ethereum which produces about 10-12 blocks per second).  Because of its asynchronous nature, the Tangle can proceed extremely quickly and has no programmed block schedule.
  • There are no mining fees in IOTA as there are no miners.  Each node must verify two transactions every time it produces a new transaction.  This allows the system to send all of the MIOTA specified in the transaction payload without having to worry about miners’ fees or higher fee payment if a quicker verification of the transaction is desired.
  • Because there are no miners in IOTA, there are no incentives (other than perhaps malicious intent) to slow the network down.  Typically, this is done to raise fees, which really goes against the decentralized nature of most cryptocurrencies.  Rather, nodes are incentivized to perform quickly as their transaction can be further validated after being added to the Tangle.

Now that you are a Tangle expert, lets talk about the people behind the IOTA project.

IOTA Foundation

The company behind IOTA is known as the IOTA foundation. It is lead by Dominik Schiener, and you can find the rest of the team here. Dom, from what I can tell, is a pretty solid guy with some decent exposure to the blockchain space before starting IOTA. Per his LinkedIn he tried to start an exchange and a few other small projects before landing on the IOTA idea.

Anyways, the IOTA Foundation is a non-profit organization based in Germany that aims to develop the next generation protocols for the connected world. The Foundation is actually in charge of the three main “pillars” if you will of the IOTA project:

  • Funding
  • Governance
  • Promotion

The foundation is constantly hiring new people since the demand is so high and the project is constantly growing, so if you’re looking for a blockchain job – this might be your chance.

IOTA QUICK OVERVIEW

Here is the brief overview on IOTA for those like me who forget things right after they read them or for those too lazy to read everything above.

IOTA is aiming to use something called the tangle which is a DAG based algorithm to offer the IOT (internet of things) a fee-less payment structure built on top of a data centric layer for connecting machines, securing data, and empowering people in their digital lives. If successful, IOTA could be the go-to project for all machine to machine payments in the future.

Now, lets dive into how these two projects compare.

How Does Cardano and IOTA Compare

Ok now that everyone is on the same page and roughly understands each project, lets start to compare.

I will try to be unbiased as possible, but for full disclosure I own/owned both of these cryptos and have been following both projects basically since they each began. So, my view and opinion of these projects will be like discussing two of my own children. At the end of the day, I love them both equally. (thanks dad)

Cardano and IOTA

How to start this comparison? Well, lets take a look at the main competitors for each of the projects. Because, this will give you a good idea about who these projects need to watch out for.

Cardano’s main competitors are projects like:

  • Ethereum
  • EOS
  • TRON

While IOTA’s main competitors are projects that are DAG related and fee-less, but there are not many in the same category as them. Still projects that compete with them would be:

  • Nano
  • Ripple
  • And recently due to the oracles update – Chainlink

As you can see quickly, these projects are not in direct competitors with one another. But what about their respective Niches?

Market Opportunities

Looking at their respective markets, what are they after? Well Cardano is after:

  • The financial market, and inclusion of unbanked societies like parts of Africa
  • Bridges and interoperability between chains
  • Leans on the idea of academic review and verifiably secure data and smart contracts
  • Wants to work with and support regulatory standards in the blockchain space to encourage the traditional market entry

While IOTA looks to:

  • Be the go to for machine to machine payments
  • Provide a fee-less and autotomized economy
  • Run the IOT market in terms of providing verifiable data for use

Again, we can see these projects are after different things, and are in separate markets. Not only that, but their long-term goals are independent of one another.

Lets help demonstrate this with an example. This is hard for most people in the blockchain space to get, so pay attention.

Example of Differences

Lets say we have two restaurants. The first one will be called Marco’s while the second one will be called Frank’s.

Marco’s is open late for dinner and only takes reservations. They specialize in seafood dishes, pasta, and steaks.

Frank’s on the other hand is open at lunch time. No reservation is required, and they focus on burgers, sandwiches, and even have a bakery in the back for fresh bread and desserts daily.

Is Frank’s and Marco’s in competition with each other?

No. They are not. Actually they would be much better off if they worked together.

Working Together

If someone goes into Frank’s in the afternoon, they need to encourage those customers to try Marco’s for dinner. Likewise, Marco’s needs to create an agreement with Frank’s to get some of that fresh bread daily delivered for their evening meals, and maybe even some fresh desserts made for their customers.

Marco’s can likewise encourage customers to try Frank’s for lunch and promote their bakery.

These restaurants will succeed and get more business working together. Yes, they both have kitchens, they both serve food, and they both want customers. BUT, they do it differently. They do it in different “markets” if you will.

Likewise, Cardano and IOTA are just like these restaurants. They are not in competition. In fact, they will both benefit much more from working together, referring each other, and promoting the other.

Crypto Market Perspective

Moving to the crypto market perspective, this is where I will be most biased, but still objective.

Which project should you “consider” investing in or supporting. Well, that is entirely up to your beliefs. Personally, I like Charles and Dom equally. I believe they are both smart individuals with a positive, market moving drive. I like both of the project’s goals and missions, and I believe both will succeed given time.

Therefore, I invested in both. Although, what about the token economics?

Better Investment ADA or IOTA

Given the recent market run up in early 2021, I have actually sold my ADA at $1.265 and $1.33 in batches and are currently still holding my IOTA. Why did I sell ADA and still hold IOTA you might ask?

Well, ADA (Cardano’s native asset) recently has broken its all time high. Since I bought around $.30 and $.12, I decided to take profits. That was a PERSONAL choice, and please do your own research and make your own financial decisions. If the price dips below $0.85 again, I will probably buy back in as it dips.

For IOTA, I am personally going to hold until the price gets back to a couple of dollars. A $3.50 per IOTA price would be my “start thinking about selling” price. Again this is a personal decision. Please make your own financial decisions.

You could then conclude that IOTA is CURRENTLY the better buy for its market price currently around $1.18. Although between the two projects, IOTA still has a little ways to go before proving to the market it can complete the coordicide mission. (AKA Removing the Coordinator)

IOTA and ADA Pros and Cons

Given both projects fully achieve their roadmaps over the next year or so, then which is better based on economics?

Well, neither is better. It all depends on who can score more of the market share in their individual target markets. Both are great projects, and neither is in direct competition with the other as we showed above.

Although, in the current market Cardano is currently ahead in few ways. First, it has the larger market cap with added liquidity due to its high daily volume. Cardano also currently offers staking, but eventually IOTA will allow you to earn with MANA as well.

The real choice you then have to make is:

Do you want to bet on the Internet Of Things adopting IOTA or on the traditional financial market & governing authorities adopting Cardano? That choice is up to you and how the market moves.

Cardano and IOTA Comparison

I hope this comparison between IOTA and Cardano helps you understand both projects, and the current prices in the market. I strongly believe in both projects and their purposes. Regardless if I own them or not, I will continue to encourage the projects with my blog and by engaging the community with support.

If you view these projects similarly, then please share this post! Knowledge is key. The more people know, the better they can make their own informed decisions.

Cheers

/2 Comments/by

What is Polkadot? It Might Not Be Too late To invest!

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In this Polkadot Blog post, we are going to dive into the project and give you a basic understanding of it!

Here is what we are going to cover:

  • History of Polkadot
  • Purpose of the project
  • Breakdown the structure
  • Discuss Relay Chains
  • Look at Parachains and the use-cases
  • Talk about what “Bridges” are
  • Touch on general governance and Consensus
  • Tell you my personal perspective
  • Is it too late to invest?
  • and finally leave you with some links to learn more!

Remember, the point of these posts are purely educational. I want to teach you guys the basics of the projects, give you some cookies to learn more, and throw in my 2 cents since I’ve been around the market for a while. At the end of the day, please use this knowledge to make your own financial decisions, and remember I am just some guy on the internet blogging about crypto in my free time.

Nothing should be considered investment or financial advice. Enjoy the ride.

Quick History of Polkadot

The Polkadot project was envisioned by Gavin Wood in 2016. He happens to be an Ethereum Co-founder and the creator of Solidity which is the programming language used by Ethereum. Already you can see where some of the politics and inspiration comes in.

Today, the project is run by the Web 3 Foundation (W3F) and developed by Parity technologies. Ironically, both of these companies were also founded by Gavin wood.

Polkadot raised roughly $200 million from investors across two sales of its DOT cryptocurrency, making it a fairly well funded project in the crypto community.

If you want to check out the White paper and learn more about the history then this brief summary of the project then here is the link for those interested.

Purpose of the Project

The purpose of Polkadot was born from the problems that the crypto market is currently facing and will need to solve in order to push the crypto agenda into the traditional market.

Most blockchains currently are fragmented and separated in terms of use. In short, there is no efficient way for these chains to communicate or really work together. This means that sharing data, merging value or anything is extremely difficult.

Polkadot aims to fix this by providing cross-chain interoperability for projects. It will allow any blockchain, public, private, premissioned, premissioned-less, oracles, and decentralized apps to talk to one another and be connected for the first time. This will all be done through trustless and decentralized connections within the Polkadot network.

Here are some examples.

Lets assume you have a type of smart contract on the Ethereum network that needs to trigger a payment from the Bitcoin network. This could be done on the Polkadot network.

Or if you need to make a cross-chain swap of LTC for ADA using a smart contract and no intermediary for potential micro payments. The Polkadot network can handle this.

Perhaps you have an oracle protocol within your network then needs to feed price data to several blockchains simultaneously to update exchange rates. This can also be done on the Polkadot network.

Some people have referred to Polkadot as The Internet Of Blockchains

Imagine each blockchain as its own website or data base. Polkadot could be referred to as the Google search engine for websites or maybe even as the main server to connect all the websites for communication and interaction.

Chain Breakdown

Breaking down the Polkadot network is not to difficult. The network functions by creating three separate types of chains. Those types are:

  • The Relay Chain
  • Parachains
  • Bridges

This could look confusing, but it is actually quite simple to understand. Lets start with the main chain, the Relay Chain.

Relay Chain

The main chain that is created from the Polkadot network is called the Relay Chain. This is the chain that is tasked with filing, confirming and integrating transactions. In order for the network to be faster than most other chains, the Relay Chain parses up this process into two main areas:

  • Adding new transactions
  • Validating transactions

By doing this, the network can currently process over 1,000 transactions per second according to some testing sites! Speed is extremely important because of what Polkadot aims to do. The network was built to allow multiple blockchains to connect to each other, so it will need all the speed it can get in order to allow that to happen real time without lag.

Lets get into the next chain to help describe just how the network plans to “allow” other chains to communicate to each other.

Parachains

The second chain created on the Polkadot network is referred to as a Parachain. A Parachain is simply a custom blockchain. This custom blockchain is used to pass along the chain’s computational power in order to validate the order of transactions and amounts.

Parachains are a little hard to understand, but let me try walk through some examples to help explain what they are and how companies acquire them.

Parachain example 1

Lets make a quick example of a Parachain in use.

Lets say there is a company called NUMBERS INC that wants their own blockchain to store data. NUMBERS INC has many clients that give it sensitive data that is used for financial services.

NUMBERS INC might learn about blockchain and decide, “Hey we want one of those, but we don’t want to build it.”

Then they might come to Polkadot and say, “We would like a Parachain to host out clients data, and use your network to preform some of our financial services, and host our native app on.”

NUMBER INC would then go and purchase a select number of DOT tokens to bid for the bond amount at a specific parachain bid.

Parachain Example 2

The other example will obviously be a project like Ethereum.

The Ethereum foundation could purchase a select number of DOT tokens and bid for a parachain likewise with the bond payment. Now why would Ethereum want to support Polkadot? Because Polkadot aims to make parachains able to communicate trustlessly with the third chain we will discuss in a moment called bridges.

This means that Ethereum could execute smart contracts with other chains in order to settle cryptos in other cryptos. In short, you could have a smart contract that is settled in Bitcoin without the need of a third party exchange that is hosted on the Ethereum parachain.

These are just small examples, and I am sure there are thousands more.

Acquiring a Parachain

In order to acquire a parachain, companies can join an auction and bid for one. Ideally, the network will only have up to 100 Parachains. The companies bidding will try to reach a “bond” amount that will be a specific number of DOT tokens that will be placed in reserve as the bond payment for using the Parachain.

The idea behind this is DOT tokens will be able to get staking rewards at 10%-20%. By placing the tokens in a bond and on the Relay Chain these tokens owned by the company will forgo those staking rewards. These staking rewards can also be considered as the risk-free rate of owning DOT tokens.

In short, companies will bid on these parachains with DOT tokens. The tokens will be placed in a holding or reserve account on the main chain, and the companies will be allocated resources from the main chain. By placing tokens in the holding account, companies will forego the staking rewards they could have received with their tokens, aka the opportunity cost.

Parachain Loan Offering

Companies that can not afford a bond payment can use what is called a Parachain Loan Offering in order to secure the required amount of DOT tokens. These loan lenders will be “rewarded” for their contribution with on-chain tokens or rewards ideally on that newly created parachain.

That about covers the parachain idea. Lets move onto the third chain created on the network, Bridges.

Bridges

The third chain on the network is extremely important and really what most of the hype around Polkadot is about. This third chain is called a bridge.

A bridge allows the network to communicate and interact with other blockchains across the market. Now, this has been proposed hundreds of times across the network, but has never efficiently and effectively been done.

The Polkadot network is currently working very hard to build these bridges with projects like Ethereum, Bitcoin, EOS, and many more in order to allow tokens to be swapped through their network as a central mean for exchange.

The main way the team seeks to achieve this goal is with XCMP, the native interoperability technology. This tech will allow parachains to trustlessly communicate and exchange tokens likewise.

Now that we’ve discussed the main chains on the network, lets move to governance and consensus.

Governance and Consensus

Consensus on each blockchain in crypto is always unique. Polkadot is no exception.

The network uses what is called “nominated-proof-of-stake” or NPoS for short. Most blockchains use a traditional proof-of-stake (PoS) consensus method for comparison.

The NPoS system is run by stakes of DOT. These DOT stakes are locked within special contracts across the platform on the Relay Chain and will be given a following role in the operation of the network:

  • Network validators
  • Nominators
  • Collectors
  • Fishermen

Lets go over what each “role” does on the network:

Network Validators 

This role is used to validate data from the parachains. Network validators can also participate in consensus to vote on proposed changes to Polkadot.

Nominators 

Nominators on the network are used to secure the Relay Chain by “nominating” trustworthy validators. While this is important, the Nominators unfortunately delegate their staked DOT tokens to the validators. This in turn allocates their votes to them.

Collectors 

The collectors run nodes that store a full history for each parachain. They will also be responsible for aggregating parachain transaction data into blocks for addition on the Relay Chain. 

Fishermen

The last piece of the puzzle are the Fishermen. These stakers are used to monitor the Polkadot network and report bad behavior to validators. Sort of like the Polkadot S.W.A.T. team

It is also important to know that the people performing these roles are eligible to receive DOT rewards in addition to their service to the network.

Personal Perspective

Whew! That is a lot to cover in one post and thanks for reading all of that (if you did).

I enjoyed diving into this new project and learning about the differences and similarities it holds to other projects across the space. While the idea behind this project is not necessarily new, it is important. There needs to be interoperability across the network for the crypto economy if it is to ever move into the traditional financial sector fully.

Therefore, I believe in the purpose of this project.

This project has huge potential, but it has a long way to go. Betting and investing in this project is still a huge gamble, but it could pay off big. Either way, any project pushing the crypto economy of things and use-cases is a good project to me.

Is it too late to Invest?

In short, it is not too late to invest in this crypto project.

This project has a long long way to go and will be around for a while. If you are interested in this project, I would personally buy in at lows and stake my holdings for the next 2-3 years. This would be MY PERSONAL strategy for maximizing returns on this investment long-term.

Also, I never invest in crypto short-term for those wondering.

Stay Up-To-Date

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