After a long time in the trading world and now in the technology venture capital & alternative investment space. I wanted to write a piece on the crypto/blockchain space as a whole.
What a lot of people fail to realize is the technology underpinning the sector, what that means, how it’s connected and why it’s not just looking at pump discord servers, buying on news and actually just buying in a straight line. The whole sector is new, the people jumping into crypto is astonishing – but the lack of understanding is quite Frankly; SHOCKING.
In the beginning, there was Bitcoin, this has become the default crypto of choice – King of crypto as we know it so far! This is largely due to the lack of understanding and is deemed predominantly as the safe investment. Venture Funds, PE firms, banks all see an investment into crypto as a tick box (mostly) do we cover this asset class?
"Yes, we do" is the kind of logic for many of the old money firms, without having to delve too deep.
Grayscale really shook things up with the crypto funds they structured.
Grayscale - www.fool.com/investi...ay-you-shouldnt-buy/
As the world evolves, and the crypto market grows and establishes its foundation in global markets in various ways we can see the technology evolving. Enter other currencies, Ethereum (ETH), Ripple (XRP) and many more. What’s the difference?
Current view of the total crypto market cap chart
Blockchain
Taking a slightly deeper dive into the tech itself; you have several protocols that differentiate the technologies, the capabilities, and even the scalability.
Bitcoin
The bitcoin network is a peer-to-peer payment network that operates on a cryptographic protocol. Users send and receive bitcoins, the units of currency, by broadcasting digitally signed messages to the network using bitcoin cryptocurrency wallet software. But isn’t all crypto designed to do this? Well yes & no.
Bitcoin uses a protocol called proof of work. (Understanding the protocol in this detailed way is hard work.) To understand the technology itself, you need to be comfortable with public-key cryptography, and with the closely related idea of digital signatures. I’ll also assume you’re familiar with cryptographic hashing.
Proof of work – Proof of work (PoW) is a form of cryptographic zero-knowledge proof in which one party (the prover) proves to others (the verifiers) that a certain amount of computational effort has been expended for some purpose. Verifiers can subsequently confirm this expenditure with minimal effort on their part.
Then you have other crypto's using the Proof of Stake protocol. Such as; DASH & Ethereum.
Proof of stake – The Proof of Stake (PoS) concept states that a person can mine or validate block transactions according to how many coins they hold. This means that the more coins owned by a miner, the more mining power they have.
You then have yet another protocol called - Proof of Authority;
Proof of Authority (POA) is a consensus method in which a number of blockchain actors within the ecosystem are given the power to validate transactions and ultimately decide whether new blocks will be added to the blockchain or not. In the case of Proof of Authority, it is not suitable for public blockchains as there is essentially a monopoly with a few actors who may confirm transactions.
Altcoins
The main altcoins are Ethereum and XRP (Ripple). Now the issue with many altcoins is that not many have a use case or a real-world problem to solve.
Ethereum provided a type of Lego set ability for developers to create projects. Thus making it the Linux of the crypto space. This means Bitcoin is the Apple – nothing new or exciting but packaged well and designed for the cool kids who only need a browser and some bragging rights “I own the latest iphone”.
Ripple has gone after the payment space, and as a financial instrument in the financial sector – makes a little sense. Could it replace Visa & Mastercard? Think of Ripple like the Microsoft in the scenario.
Obviously, we have new contenders such as DogeCoin. I read recently that it’s now worth more than Barclays. It’s this kind of thing that causes issues in the industry as a whole. To obtain mass adoption, it needs to be professionalized. Mass adoption is what will make or break the market as a whole & 100% shake out anything that isn’t useful!
There are, however, a good couple of projects including Litecoin, which is nearly identical to Bitcoin. The Litecoin Network aims to process a block every 2.5 minutes, rather than Bitcoin's 10 minutes. This allows Litecoin to confirm transactions much faster than Bitcoin.
Another interesting project is Cardano, which is a public blockchain platform that aims to run smart contracts. It is open-source and decentralized, with consensus achieved using proof of stake. It can facilitate peer-to-peer transactions with its internal cryptocurrency Ada The project differentiates itself from competitors by using a research-driven approach — the platform is designed through peer-reviewed papers written by computer scientists and academics.
Ok so what about Adoption & regulation???
Due diligence
When investing in crypto – especially less known altcoins, you need to consider other factors beyond charts and the technical analysis. Much more like trading a stock. You should look to factor in the founders, financials, future plans, and so on.
Conspiracy
As a cybersecurity investment firm – Mayfair knows what can be done on the cybersecurity side, you can’t help but think with the resources that the NSA has, they can’t find out who’s behind BTC - that on a technology built purely based on the premise of being an immutable ledger. Makes you think doesn't it???
Will we see Crypto replacing Gold and even the Dollar? Comment and thoughts below; give more detail than just a yes/no! Why do you think it?
Anything interesting your seeing in the market? I am keen to get opinions, ideas and just some interesting points of discussions.
🎥 Next Live stream with @Paul_Varcoe www.tradingview.com/...25vQZA9BoLAzJS5WilF/ - on Monday 🎥
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
What a lot of people fail to realize is the technology underpinning the sector, what that means, how it’s connected and why it’s not just looking at pump discord servers, buying on news and actually just buying in a straight line. The whole sector is new, the people jumping into crypto is astonishing – but the lack of understanding is quite Frankly; SHOCKING.
In the beginning, there was Bitcoin, this has become the default crypto of choice – King of crypto as we know it so far! This is largely due to the lack of understanding and is deemed predominantly as the safe investment. Venture Funds, PE firms, banks all see an investment into crypto as a tick box (mostly) do we cover this asset class?
"Yes, we do" is the kind of logic for many of the old money firms, without having to delve too deep.
Grayscale really shook things up with the crypto funds they structured.
Grayscale - www.fool.com/investi...ay-you-shouldnt-buy/
As the world evolves, and the crypto market grows and establishes its foundation in global markets in various ways we can see the technology evolving. Enter other currencies, Ethereum (ETH), Ripple (XRP) and many more. What’s the difference?
Current view of the total crypto market cap chart
Blockchain
Taking a slightly deeper dive into the tech itself; you have several protocols that differentiate the technologies, the capabilities, and even the scalability.
Bitcoin
The bitcoin network is a peer-to-peer payment network that operates on a cryptographic protocol. Users send and receive bitcoins, the units of currency, by broadcasting digitally signed messages to the network using bitcoin cryptocurrency wallet software. But isn’t all crypto designed to do this? Well yes & no.
Bitcoin uses a protocol called proof of work. (Understanding the protocol in this detailed way is hard work.) To understand the technology itself, you need to be comfortable with public-key cryptography, and with the closely related idea of digital signatures. I’ll also assume you’re familiar with cryptographic hashing.
Proof of work – Proof of work (PoW) is a form of cryptographic zero-knowledge proof in which one party (the prover) proves to others (the verifiers) that a certain amount of computational effort has been expended for some purpose. Verifiers can subsequently confirm this expenditure with minimal effort on their part.
Then you have other crypto's using the Proof of Stake protocol. Such as; DASH & Ethereum.
Proof of stake – The Proof of Stake (PoS) concept states that a person can mine or validate block transactions according to how many coins they hold. This means that the more coins owned by a miner, the more mining power they have.
You then have yet another protocol called - Proof of Authority;
Proof of Authority (POA) is a consensus method in which a number of blockchain actors within the ecosystem are given the power to validate transactions and ultimately decide whether new blocks will be added to the blockchain or not. In the case of Proof of Authority, it is not suitable for public blockchains as there is essentially a monopoly with a few actors who may confirm transactions.
Altcoins
The main altcoins are Ethereum and XRP (Ripple). Now the issue with many altcoins is that not many have a use case or a real-world problem to solve.
Ethereum provided a type of Lego set ability for developers to create projects. Thus making it the Linux of the crypto space. This means Bitcoin is the Apple – nothing new or exciting but packaged well and designed for the cool kids who only need a browser and some bragging rights “I own the latest iphone”.
Ripple has gone after the payment space, and as a financial instrument in the financial sector – makes a little sense. Could it replace Visa & Mastercard? Think of Ripple like the Microsoft in the scenario.
Obviously, we have new contenders such as DogeCoin. I read recently that it’s now worth more than Barclays. It’s this kind of thing that causes issues in the industry as a whole. To obtain mass adoption, it needs to be professionalized. Mass adoption is what will make or break the market as a whole & 100% shake out anything that isn’t useful!
There are, however, a good couple of projects including Litecoin, which is nearly identical to Bitcoin. The Litecoin Network aims to process a block every 2.5 minutes, rather than Bitcoin's 10 minutes. This allows Litecoin to confirm transactions much faster than Bitcoin.
Another interesting project is Cardano, which is a public blockchain platform that aims to run smart contracts. It is open-source and decentralized, with consensus achieved using proof of stake. It can facilitate peer-to-peer transactions with its internal cryptocurrency Ada The project differentiates itself from competitors by using a research-driven approach — the platform is designed through peer-reviewed papers written by computer scientists and academics.
Ok so what about Adoption & regulation???
Due diligence
When investing in crypto – especially less known altcoins, you need to consider other factors beyond charts and the technical analysis. Much more like trading a stock. You should look to factor in the founders, financials, future plans, and so on.
Conspiracy
As a cybersecurity investment firm – Mayfair knows what can be done on the cybersecurity side, you can’t help but think with the resources that the NSA has, they can’t find out who’s behind BTC - that on a technology built purely based on the premise of being an immutable ledger. Makes you think doesn't it???
Will we see Crypto replacing Gold and even the Dollar? Comment and thoughts below; give more detail than just a yes/no! Why do you think it?
Anything interesting your seeing in the market? I am keen to get opinions, ideas and just some interesting points of discussions.
🎥 Next Live stream with @Paul_Varcoe www.tradingview.com/...25vQZA9BoLAzJS5WilF/ - on Monday 🎥
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
Discord Server for education and advanced techniques: discord.gg/5t3w47raHe
Master the Art of Trading: amzn.to/3nUfB9r
Prop firm partners (FTMO)
shorturl.at/hBEQ4
Master the Art of Trading: amzn.to/3nUfB9r
Prop firm partners (FTMO)
shorturl.at/hBEQ4
