Ethereum (ETH) + Cardano (ADA) Staking: Early Adopter Advantage?

According to Cardano’s roadmap staking will start soon (at least within 5 months), Ethereum will also be moving to some kind of staking model in 2018. This will perhaps present a significant first adopter opportunity.

Lets rewind. Different networks secure their blockchains using different protocols. The two main protocols are Proof-of-Work and Proof-of-Stake (aka Proof-of-Share). Coin networks which use Proof-of-Work include Bitcoin, the first and premier coin, also many others (for now) Ethereum. Coins that use Proof-of-Stake include Dash and REDD coin.

Proof-of-Work involves doing complex, lengthy, electricity expensive calculations. This activity is colloquially referred to as mining. The participant who mines a block (by solving a cryptographic puzzle) makes the next block – and crucially, secures a reward – the reward is the motivation for engaging in the activity.

Proof-of-Stake is similar; a particular participant will make the next block and get a reward, however instead of competing with other participants to solve a cryptographic puzzle, the participant is chosen at random (but in proportion to their stake). The participant vouches for the accuracy of the block they are adding, by staking their capital. Should they try to cheat the system, they will lose their stake. The process is known as staking or sometimes minting.

POS has two huge advantages over POW; it is faster and it uses less electricity. The use of electricity should not be underestimated, the Bitcoin network uses more electricity than some African countries. Also as crypto networks are used by more and more people, transaction times for systems like Bitcoin have really suffered. Speed is one of the USP’s of crypto, transactions should happen within seconds. Recently Bitcoin transaction times have been in the hours. Without getting into the details, POS is more scalable than POW.

For these reasons Ethereum will be moving from POW to POS this year (2018). Right now for Ethereum you need a mining rig (computer with 6 top end graphics cards). Once the switch over happens, you will simply need to hold ETH. Anyone holding ETH will be able to mint more ETH. The exact details of how it will work for Ethereum have not be clarified yet.

Cardano (the ADA coin) is a little further along. It will be moving to a decentralised POS system Q2 2018. Currently liquidity in ADA is provided by the Cardano Foundation using centralised servers. So right now, Cardano is not POW or POS, it is centrally controlled. When that changes, holders of the ADA coin, will be able to participate in the securing of the blockchain, for the reward. Staking will be elective. Holders who stake will (over time) increase their holdings, while holders who do not stake, will not. Although the reward has not been announced yet, based on other POS coins the annual rate of return will probably be somewhere between 5-10% if all holders stake.

Here is the opportunity; at the moment no one is staking, once POS has been running for a while the majority will be staking. But what about those first 6 months? Will everyone stake on day one? I don’t think so. For a short time, there will be a small number of stakers, who will get all the rewards. Think about it.

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Crypto – Highs and Lows

Huge dump over the last couple of days – totally unfazed, picked up some ADA on the way down, was not the bottom, don’t care.

I am HODL all the way. It will come back, because the value is there.

To me on Twitter: Why do cryptos crash?

Good question.

There are two separate questions here; 1) why are cryptos going down together?; 2) why are they going down so much?

My response:

Hi, If you are asking why all the cryptos move as one, the answer is that they are all owned by the same people. Bitcoin whales who mined it early and held, diversified and hold a portfolio of BTC + alt-coins. So if they sell BTC they also sell alt-coins, to them it is a similar investment, almost the same thing, we could just call it “crypto”.

If you are asking why they go down, so much, right now. That is a different question. Think about how the value of something is determined. If I was thinking about purchasing a small convenience store, how would I value it? Probably on cash flow. How much does the store make a month? That, plus a couple of other questions (what is the rent for the store?) would tell me what the convenience store is worth. The value of crypto however is based on future cash flows + capital gains. There is almost ZERO intrinsic value today. But if ETH or BTC or ADA or whatever becomes a commonly used currency, then there will be tremendous value. But a valuation based on maybes is going to be subject to sentiment and therefore massive volatility.

 

Bitcoin & XRP – both overrated

I did a Bitcoin (BTC) transaction yesterday, I moved some BTC from my Coinbase to my Bittrex, it took about 35 hours and I paid $30 for the privilege. Struggling to see the value proposition here. I’m told Lightening Network is a BTC extension(?) that will give near instant transfers at under 10 cents. All I can say is, it can’t come quickly enough. BTC is the first mover in the space and a household name, it has time, but not an unlimited amount of time. I do not think BTC needs to be any more than a currency, no need for smart contracts, anonymity or any new functionality in that sense. But it does have to be fast and cheap (as it used to be) – if it can’t achieve that within 6 months, I think it could be over and we will see prices under $10,000.

XRP (the token issued by Ripple Labs Inc) is a very dubious investment in my opinion. Because the Bitcoin network is synonymous with it’s token BTC, and the Ethereum network is synonymous with it’s token ETH, people assume that buying XRP is buying into the Ripple network and technology. You are not. You do not need XRP to transact on Ripple, You can shuffle IOUs between banks all day long, without any need of XRP. You could of course settle using XRP, but you don’t need to. It is unclear to me at the time of writing why XRP has value. It is totally possible that Ripple Labs Inc will be a huge success, but the XRP token be worthless.

Now that I have that out of the way, I’d like to turn to “Ripple The Network“. The purpose of Ripple is for settlement (clearing) between financial institutions, it’s for banks; that’s quite different from the other cryptos. The way people are talking, it’s like settlement is a new problem and Ripple is here to fix it. That is total baloney, electronic settlement has been around a long time, there is a network for it, it is called SWIFT, it was created in 1973. Yes it’s been here for 45 years. They have a message type for every conceivable monetary and stock transaction. Do you think Ripple is going to replace all that? Or do you think SWIFT will start settling via blockchain, their own blockchain? I’m very unconvinced on XRP, I’m also pretty unconvinced on Ripple The Network.

The one thing they do have in their favour is a very large amount of money. You see, they own 60% of the XRP supply, so when all of you retail “investors” dump your money into XRP, it’s a direct transfer of wealth from you to them. Let that sink in. BTC and ETH are owned by the miners who worked for it, XRP was created out of thin air by a company. I will be staying FAR AWAY from this “investment” however much the price goes up.

I want to Tweet Crypto

I’m not interested in speculating and making a ton of money on crypto currencies, although I have taken ETH and ADA positions — I want applications, I want real world Use Cases. I want to be able to do stuff with crypto that I can’t do with regular money.

Here is just one Use Case. I want to give people money. Anonymously and simply. Without them understanding accounts and addresses etc.

I want to be able to literally tweet money. I want to be able to go on twitter and tweet at a user, such that if they (and only they) click on the link, it will open an account (somehow, somewhere) with 10 REDD or XRP, or whatever.

I want to be able to email money. Facebook money. Youtube money. I don’t know how to implement that – but I am SURE I am not the only person who wants to be able to do this.

25th Amendment, Impeach Impeach.

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Twitter is alive with calls to impeach American President Donald Trump. I’m in the UK, and even I know how silly this is. The 25th is for the eventuality that the sitting president has a stroke, or is in a coma etc.

It works like this: The Vice-President, in this case Mike Pence, has to start the process. You then need a 66% vote in the house of congress.

So “impeachers”, what are the chances of this working out for you? Exactly zero. It’s laughable when someone in another country understands your system better than you.

By the way, so you know, normal impeachment proceedings have a lower threshold requirement (51% vote). And you haven’t managed to pull that off. The irrational hatred for Trump is making people say, do and believe some very fanciful nonsense.

I honestly don’t get it. Stock market, Up. Employment, Up. Taxes, Down. It’s not so bad you guys. I wish the UK’s prime minister could get those kind of results. If you hate The Donald so much, you will get your chance to remove him in about 3 years. So cool it. Take up a hobby. Get off twitter.

Ethereum and the Correctness Problem

I like Ethereum, I actually went on Coinbase and bought a few thousand pounds worth. Shh, do not tell my parents, they would go ape shit.

Ethereum is not just a digital currency, it’s a smart contract platform – a distributed unstoppable computer.

But it has a problem. If it didn’t, I would plant ten thousand pounds there in an instant. The problem is not transaction speed, or POS vs POW, or any of that. It’s Proof of Correctness. This is not a new problem to crypto. It is as old as computer programming itself. It is VERY VERY VERY difficult to know if a computer program is correct. That it is secure and without bugs.

Smart contracts are computer programs. They are computer programs that necessarily involve money. Lots of money. By virtue of what a distributed computer is, once the contract is “out there”, that’s it, no fixes. So we need to know that the program is 100% correct when we push it out.

That is (almost?) impossible. Even the author of Ethereum, Vitalik Buterin, could not spot a mistake in one of the first and most important contracts, the DAO contract that got hacked and led to a chain split into ETH and ETC.

THE GUY WHO WROTE ETHEREUM COULD NOT SPOT THE MISTAKE IN AN ETHEREUM CONTRACT.

Let that sink in.

There are other smart contract platforms: Lisk, Cardano – doubt they will be more successful. There was a startup called Tezos that had some kind of plan to mitigate the problem. They failed for entirely non technical reasons.

Like I said, this is an OLD problem. As old as computer science. You might say, as old as the garden of eden, when man fell and his intellect became corrupted.

Computer Science has tried to use Formal Logic to nail this issue down. Something called Z-Notation promised a way of mathematically proving the correctness of a program. How effective that has ever been I do not know, you don’t hear much about it though, do you?

This is a VERY DIFFICULT PROBLEM and if it can’t be solved I am not sure there is a bright future for anything other than the most trivial smart contracts.

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Christian Dating Sites – UK

As a Christian gal, at some point you will want to meet a man and get married. You may need to do some speed dating, go to theology college for a year or make use of a Christian Dating Site.

Of course you could go with a big brand: Plenty of Fish, OK cupid, eHarmony, Tinder… But 99% of the people on those will not be Christian, and if you are female, they WILL all be contacting you. It makes sense to use a site that caters exclusively to your niche. Also, there are US Christian Dating Sites, like Christian Cafe and Christian Mingle; I’ll tell you now, they have hardly any UK users.

AFAIK there are two dating websites specifically for Christians in the UK:

Faith Dating

£17.99 per month subscription.

Few People, most without a photo.

Long and boring sign up process, literally 100s of questions. Keeps pressuring you to let it email your friends. Won’t let you message without subscribing.

Not great.

Christian Connections

£24.00 per month subscription.

Quite a lot of people, most with photo.

Also a long and boring signup process, not quite as bad as FD. Also will not allow you to message people without a subscription.

Not bad.

That’s my summary. Is £24 per month a lot? Not really imho. We are talking about the person you will most likely be spending the rest of your life with.

If there are other Christian Dating Sites specifically for the UK, I would LOVE to hear about them.

 

 

Ripple XRP

DO NOT BUY IT

Bitcoin and Ethereum, the most mature crypto currencies, are mined. That means that ownership of the coins is distributed to miners, the people who operate the network. HOWEVER Ripple’s coin XRP is not mined. It was simply allocated. Who was it allocated to?? Ripple Labs.

Yes, really – it is that simple. The company who created the protocol, allocated the coins to themselves (who else?? lol) — so right now about 40% of the coins are in circulation and 60% are held back, owned by Ripple Labs.

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Simply notice that 38B XRP is in circulation, i.e. being bought by retards. And 100B is the total supply, i.e. about 60B is held by Ripple Labs.

That is incredible dilution. 60% held by the company that created the protocol. FUCK.

I’m sorry, but this whole thing is a scam. Bitcoin is fully allocated and distributed. Ethereum is not hard limited exactly but will be soon, but in any case, the remainder of the coin is not owned by some company.

Avoid this one.