CryptocurrencyScripts

Tag: Ethereum

How close are we to a ‘fiat-less’ world?

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Numerous articles tip bitcoin and cryptocurrencies over fiat currencies and a couple more insinuating the inferiority of traditional hard currencies and suggesting these currencies might become obsolete and deprecated in the near future. ‘The death of fiat is imminent’ they say, but is this really true? I don’t know what your answer might be, but I strongly doubt if the days of paper currencies are anywhere near an end, especially not with the current state of the crypto space.

Recent trends of countries employing blockchain technology in certain sectors including finance have fueled the trend of people envisioning a world without fiat and a world where currencies running on the blockchain are the generally accepted resource exchange means. But while this is a possibility, it is a very long-term vision and as a matter of fact, stands a very little chance of coming true.

While I am pro-bitcoin and cryptocurrency, the masterpiece of fiat currencies and the current shortcomings of bitcoin and cryptocurrencies are hard to ignore. And according to certain cryptographers, ‘Blockchain is a clever technology but cryptocurrencies are useless’. This is certainly not true to a large extent, but to an extent, it basically expresses dismay at cryptocurrencies. While the technology backing these flexible currencies holds many applications, cryptocurrencies have to a large extent depicted some shortcomings which are very hard to ignore.

Fact is, no system or technology is 100% efficient, but tipping a very young prospect that has displayed some huge level of inefficiency over a system which have served for centuries could be asking too much…and moving too fast.

A little assessment, how well do you think cryptocurrencies will perform as a global means of exchange? Critical thought will reveal numerous issues which may arise from this. While these issues are fixable, cryptocurrencies and blockchain technology are still some miles away from solving these issues.

Get used to bank notes, they will be here for much longer! Source

Cryptocurrencies are better off as utility tokens than global currencies used for mainstream exchange. However, if cryptocurrencies must be used for this purpose, then a little bit of centralization must come in, and this defeats the whole goal of decentralization and cutting off the middleman to add security and privacy to the fund transfer process.

Achieving high throughput in transactions is also a blockchain issue that limits the use of cryptocurrencies in everyday ‘spend’ activities. Optimization of the spend and receive algorithms set a blockchain project ‘a head above others’, while many contemporary blockchains can process the transfer and reception of assets, many users still face tangible constraints while using this feature, this stems from the complicated steps required before a transfer request is made and a slow speed of processing transactions. To serve the people better, an optimized means of spending funds is essential.

Talk about portability. Of course! Present banking financial technologies are focused on providing a portable medium of financial transactions, hence the recent surge of banking applications, bar-code spending systems, and other web-based banking services. This has simplified financial activities and created a sort of ‘digital fiat’ which runs without the blockchain and in a centralized system, but it of course presents a flexible spending system with some regulations which try to monitor the use and block irregular activities…to an extent.

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Ok, blockchain claims to be transparent, and this is a fact relative to custodial banking systems, but transparency is just a tool that aids financial regulation, however using a transparent financial system with no means of actually curbing irregularities in the system makes it all futile. If you can see the unscrupulous acts going on but can’t stop or reduce them, then transparency is almost of no use. This is the case in a truly decentralized blockchain-powered financial system.

Currently, cryptocurrency’s universality is the only enticing feature it really has over the current fiat currencies, financial systems, and banks. With the current instability, manipulations, and technological shortcoming, it is as a matter of fact inferior to fiat currencies and the current banking system.

Seeing cryptocurrencies as utility tokens of blockchain projects which solves some real-world problems or presents a new and/or more efficient way of handling real-world issue is probably the healthiest way to look at it. Bringing some aspects of blockchain technology into fintech and revolutionizing the financial system to incorporate some virtues of blockchain technology into the mainstream financial system will surely create a more efficient financial system. The fiat system may never die, but if blockchain technology and cryptocurrencies take a healthier route and fix some of its biggest issues, then they stand a chance of penetrating the mainstream financial system…but not replacing fiat. Replacing fiat with cryptocurrencies is just a long-lasting illusion.

13/03/2023
Celebrities in crypto; good or bad?

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Snoop Dogg revealed that his NFT portfolio is worth millions of dollars. The most popular names you could think about are fast hopping on the NFT trend. Lil Yachty influenced the very popular Safemoon moonshot. A tough one to say, but SouljaBoy once turned into a proper cryptocurrency pump and dump specialist of the McAfee type.

Celebrities of the most elite echelon are fearlessly pushing cryptocurrency, decentralization, and financial technology-aided human freedom. Unarguably, your recent love and respect for a couple of them stem from the fact that they helped ‘pump’ some of your cryptocurrency holdings.

Hate or love him, Elon Musk has been the most influential figure in the crypto space in 2021. Yeah, it’s the rocket man, not even Michael Saylor and the thousands of Bitcoins he regularly buys via his investment startup — Microstrategy. NSFW projects have also attracted adult content producers into the crypto space.

As if this is the first time cryptocurrency made its way to mass awareness, the rave seems to have shot up from nowhere! Amazing, yet confusing…what could have caused this rush and how have this changed things for the larger cryptocurrency community?

Flashback to a couple of years ago; bitcoin was relatively stuck in obscurity, despite performing way better than every other asset you could think of over the past decade. Only the most curious and financially knowledgeable celebrities cared about making their opinions about the shady digital asset known. The dollar was the rave, amongst celebrities and other people alike…it probably still is.

A couple of them surely moved a chunk of their funds into bitcoin and cryptocurrencies but barely cared to talk about them as much as they do currently.

NBA teams are proposing to pay part of their players’ salaries in bitcoin, popular racing companies, and F1 racers have lucrative deals with cryptocurrency startups. The bitcoin car didn’t win that race, but still, it has served its purpose. It’s not so odd to see new people join a trend, but then they barely cared about it a while ago and suddenly get so involved, it looks weird…or amazing, rather.

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Who’s your favorite celebrity in cryptocurrency? For me, it’s certainly not Soulja Boy. The ‘Crank dat’ emcee hasn’t been such a healthy figure in the crypto space and represents everything that makes cryptocurrency investment risky. His influence is very similar to that of many other celebrities who ventured into the space during the cryptocurrency bull run of the first quarter.

Anyone who really cared would wonder what these popular guys have contributed to the real growth of cryptocurrency and blockchain technology.

Pump and dump specialists? Remember when meme tokens nearly took over the Binance Smart Chain? The safe, moon, baby, Shiba, and Inu tokens. As funny as they sound and function, many of them were being advertised by elite celebrities; Snoop Dogg, The Game, members of the Faze Clan, to mention very few. Thanks to the large audience they gained via their music success, and otherwise, these tokens gained enormous popularity accompanied by face-melting price moves. Thanks to Automated Market Protocols, every buy or sale has a tangible influence on price.

Price easily went haywire, 10X gains were as common as ever, 100X gains and even higher could come within a week. The peak of these gains was usually followed by rug pulls and teams selling the majority of their holdings, leaving holders to nurse their irrecoverable losses as trading volumes shrink out while the project goes into obscurity. Unto the next one! “what’s the next 100X?” cryptocurrency’s reputation was left to bleed, volatility and betrayal were demonstrated in their worst manners. These influencers already cashed out before the storm, depending on whether they were paid upfront or in the tokens.

Money grabs? For most of these celebrities, cryptocurrency is simply an avenue to boost their net worth or get out of their bad financial situations. NFTs, Defi, memes, and passive reward coins; the boom of each of these presents an avenue for celebrities to jump in and make some dollars. Celebrities would mint NFTs and only sell them for Dollars and USDT.

Funny how the rest of the crypto space boarded their ship and paid ridiculous fees for these NFTs. Well, thousands bought meme coins simply because a celebrity said inaudible words and mentioned the coin at the end, lol. Well, the gains were good, for these popular guys, and they get to keep their reputation intact and gain more followers.

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Politically influenced moves? Actually, I have been mentioning rap stars and pop stars, that’s partial! Elite politicians have also joined the movement, either against or in support. Most of these moves are politically motivated as some of these politicians, in fact, have no interest in cryptocurrency, while a good number of them actually hate it but put their weight behind it to earn voters’ attention and support.

Politicians with real interest in cryptocurrency have stayed outspoken way before the boom, most of them against it, however…but they are genuine, at least.

Well, as long as global awareness goes, these celebrities haven’t been such a bad influence in the space. To be fair, a good number have pushed cryptocurrency closer to global adoption…very few of them anyway. Regardless of how they did it, more people got to know about cryptocurrency via their popular shills and toxic support for certain projects.

In the real sense, long-term supporters have continued to have the most important contributions to the positive growth of cryptocurrency and blockchain technology, while the new ‘converts’ continue to find their way into the space.

13/03/2023
2021–2022: The fall of cryptocurrency ‘DAO’

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DAO in crypto was short-lived, not just the concept. Sounds funny when some of them control almost a billion-dollar market capitalization. Your best knowledge of a DAO might be a famous airdrop where users claimed thousands of dollars for free. You might have benefitted from one of these if you’re fortunate enough.

One good thing about (some of) these airdrops is that they surely get the attention of the greater part of the cryptocurrency community who barely knew about these projects and even the world outside it. Exchanges are also quick to list the ‘DAO’ tokens and enable trading as soon as possible. The normal listing process can be forgotten. Who cares when there are surely some juicy trading fees to be made? Beneficiaries are also quick to hit the market and cash in on some free cash.

You probably don’t care about it but, Decentralized Autonomous Organizations (DAOs) are a systemic design structured to ensure general and undiluted participation of the members of the organization. In cryptocurrency communities, rights to this participation are tokenized and every token holder is considered a member of the DAO. Through voting portals, members of the DAO can vote on proposals and submit their improvement suggestions to be voted on by the rest of the holders.

The idea of DAO has long existed, many older projects have implemented this before it became so popular in the past few years. Many projects have launched tokens whose primary use is to vote on proposals. A brilliant move, in my opinion. Unfortunately, this hasn’t really worked so well.

Buzzwords and media hype apart, contemporary DAOs haven’t really made much progress and are pretty much replicas of the older examples. In contrast, these older DAOs worked better…and are worth way less.

DAOs are designed to promote general participation and optimize the efficiency of communal decisions. To achieve this, as many members as possible are required to partake in the voting process. Abstaining is also an option; this should be explained in case.

Tokenizing this participation simplifies the verification and collation process. Holders of these tokens are confirmed automatically by smart contracts. Manipulating smart contract tokens is impossible. the number of tokens in circulation can also be verified via the blockchain. These ensure that every vote is valid. The amount of tokens held by each member is a representation of their stake in the DAO and determines the extent to which they influence the community’s decision.

This works well…on paper. But, do these projects really achieve their goal of a Decentralized Autonomous Organization when their tokens are quickly traded on exchanges by the beneficiaries of their airdrop? The new owners couldn’t care less about how a DAO works and if there exists a DAO at all.

These tokens are no different from every other smart contract token filling up the whole space. Only one principal achievement; marketing. These ‘DAOs’ quickly gain thousands of followers as their airdrop beneficiaries scamper to find out who their new ‘Santa’ is. Influencers who seemingly claimed a ton of the drop picks up their devices to tweet the hell out of these benevolent projects.

Airdropping free tokens to old community members is the right thing to do. Older participants are regarded as the most loyal and have stayed with the project for most of its existence. If anyone should get a free stake in the government, it should be this set of people. Dumping these DAO tokens into the market is a failure on the part of the community and not the project founders.

Project founders aren’t exempted from the blames anyways. Albeit decentralizing the community, DAO project teams still execute important proposals without the consent of the community. Many argue that a complete DAO is ‘dumb’ and unsustainable. You’d agree too. It falls through at some point. The majority isn’t always right, this happens more often than not. In cases like this, project founders face the hard decision of going against the community or not consulting them properly.

When the hype dies, the ‘quick buyers’ can only count their losses as they wait for the DAO to go live. Nope, they wait for the price to go up…again. DAOs are currently hype, just like many other cryptocurrency concepts. The best uses might emerge when the hype dies or when solutions are developed to retain community interest and understand how best to handle negative decisions by the community.

13/03/2023
Automated Market Maker Vs CEXes: The trading revolution!

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Ridiculous fees apart, using decentralized exchange services has been really fun! Using DeFi services on platforms where fees and efficiency issues are fixed brings a true feel of decentralization.

The comfort, the security, the speed…oh well, just many things! DeFi protocols are mavericks and make centralized exchanges look so ancient despite being just about a decade old, lol.

My frequency of using centralized exchanges has decreased over five times the initial. If we can get rid of fake volumes, centralized exchanges are obviously bowing down to decentralized exchanges; in terms of volume, user base, and application.

The fact is, centralized exchanges aren’t even real competition to contemporary decentralized exchanges the difference is clear. Mainstream trading system will probably get usurped by DeFi protocols.

In addition to decentralization, security, and efficiency; Automated Market Maker, the protocol powering trading on decentralized exchanges is the main technology poised to put centralized exchanges to rest. AMMs are built to ensure organic liquidity and create real-time trading effects. Unlike centralized exchanges, AMMs are all shades of good. In the real sense, it’s AMMs Vs CEXes!

Despite years of efforts and modifications, fake volumes have continued to bite down on the reputation of centralized exchanges. Aided by exchange officials or solitarily, cryptocurrency projects could easily fake buy and sell orders to lure investors who are attracted by high volumes as proof of demand and liquidity.

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This fake liquidity and high demand would quickly dry up as soon as the manipulation ends. Well, if the manipulation was able to lure enough investors and traders, then the decline will be gradual. If the project is unable to drive real demand, the liquidity dries up once again. Investors are only left to mourn their losses in cases like this…the ripple effect continues.

Apart from projects luring investors with these volumes, exchanges as well adopt this strategy to boost their numbers and attract users. Exchanges or cryptocurrency projects…I can’t tell who did this first.

Trading and liquidity manipulations on centralized exchanges also tarnish the organic effects of buys and sell. High volumes of huge buys, yet the very little effect on prices. Unfortunately, these positive effects are wiped away by relatively lesser sell orders. Everything looks programmed! For unstable projects, this phenomenon is even clearer.

The inability to estimate the depth of the liquidity pool and the effects of buys and sells on the price makes trading harder and less fun. I’m no trading expert, but being unable to access the originality of the trading activities for a particular token makes trading unthinkably tough.

Centralized exchanges and their technology have served for the time they dominated the space. No doubt, they flourished due to the incredibly handy services they offered. In essence, these services were the best available.

In contrast, Automated Market Markers, despite not being without their own shortcomings are programmed to be highly organic and responsive. Like a real-time trading system, every bit of supply and demand creates a relative effect. Traders and investors are handed efficient tools for making decisions and projects are represented for what they truly are…at least for that point in time.

AMM schema

Thanks to liquidity pools, AMMs provide a basket of exchangeable assets to enable unrestricted trading for the period in which the liquidity providers wish to leave their assets on the pool. The transparency of the liquidity pool allows traders to make their decisions.

AMM protocol ensures that every buys and sells effect reflect relatively on the asset price. AMMs are not completely resistant to manipulations, this is evident in the rampant rug pulls. But on the brighter side, these actions are transparent; an important feature of blockchain technology.

Smart contract technology also creates an avenue for ‘liquidity locking’. This solves rug pulls to an extent. Liquidity locking ensures that provided liquidity cannot be removed for the period of time specified in the locking process.

It’s not just centralized exchanges; trading systems around the world will surely adopt AMM strategies sometime in the near future. In my opinion, it is the future of trading and exchange.

20/02/2023
Chasing ‘hot shots’ is less likely to make you rich!

Off to the market! And what are we buying today? The most popular cryptocurrencies? Floki Inu; the meme coin based on Elon Musk’s dog has gained some steam. Funny how that sounds but the rocket man has cemented his reputation as the king of memes and everything that comes with it. Crypto investing is quite an interesting venture.

Doge, Shiba, Floki…each of these projects hit the ground running with the mouth-watering gains they post. They do this despite not having any tangible use case…well, memes and ‘charity’ are good use cases nowadays. Anyways, ‘numbers go up!’.

So, you are going to ditch your stable coins or some of your previous investments for the ‘next 100x’? It’s human nature to chase trends and the fear of missing out is a huge drive. Investors rush to these hot shots with hopes of reaping from the next possible gains.

This works, sometimes. It’s an uncertain market anyways and anything is possible, but being a successful investor hardly comes from jumping on trends. 50% gains, the rush kicks in. Speculators take the space and the project in question gets mentioned everywhere. The trend goes on, enthusiasts buy in with only a little idea of what the project is really about.

TA analyses, hypes from influencers, gains on trading pairs…these things are enough to sweep anyone off their feet. But regardless of how hot the hype blows, clever investors will certainly do their own research before buying in.

What’s your ‘hot shot’ story? Various tales will surround the rush. Successful or not, conditions differ. But…

Cryptocurrency trends are birthed by an idea or concept gaining relevance over time. Memes, DeFi, NFT…these ideas existed way before they caught the attention of the greater number of people in the space.

The real gainers in any case of these concepts breaking out are the pioneers who believed in these ideas and supported them with their time and their capital. Being amongst the pioneer investors in any concept could fetch you over a 1000x gain as the case may be. This, however, comes with its own challenges.

Chasing trends definitely keeps an investor ‘restless’. Traders are meant to do this normally, but investors who buy tokens with a plan to hold on to them until the gains start coming are meant to exercise patience. Patience is a joke word for an investor chasing trends.

2–5X gains (or some terrible to manageable losses) and the hype dies; then unto the next one. A patient and more enduring investor who makes enough research probably already made some crazy gains from the same project and is still holding on knowing the hype could return with even heavier waves.

Chasing trending projects puts an investor in the way of higher risks and lesser gains as the hype and trends are naturally meant to cool off at a point. Buy high, sell low…a common story amongst trend chasers.

Cryptocurrency investment gives room for countless opportunities, but reaping from them would require clever decisions and a lot of patience too. The more time you spend chasing trends, the more risks you’re exposed to and the more losses you may incur.

Depending on how far the project goes, a lucky investor might make tangible gains from chasing trends, but that only means that a patient investor who invested before the hyped kicked in already made way more. Well, it’s better to make little gains than to miss out entirely, but most times, things don’t work exactly as presumed.

05/02/2023
Will GameFi do better without Play-to-earn?

What’s your biggest attraction towards GameFi projects? if we are being honest, play-to-earn will form majority of the answers…probably 100% of the answers. Axie infinity’s success quickly influenced an outpour of decentralized gaming projects with earning opportunities for gamers and investors alike. Binance smart chain’s ‘Cryptoblades’ posted astonishing price gains as users flocked to the platform to play the game which rewards them with tradable tokens and Non-Fungible Tokens.

Success stories from players littered the crypto space as more people flocked to the platform. A ton of other similar platforms would quickly emerge, a new trend was birthed! A lotof users testified to earning more than their annual salary from simply playing ‘games’ on the blockchain.

Hypes, disappointments, and inefficiencies; many of the new and existing blockchain-based games failed to meet up with users’ expectations; financial and technological expectations. Technically, most of these games were far from properly developed. Users would describe them as ‘3D casinos’.

You’d expect these shortcomings for projects built on an impatient community of users with high hopes of turning their financial conditions around by simply playing games on blockchain platforms.

“It’s a scam!” says users whose expectations weren’t met by the new game released by developers after just three weeks of development. But technical issues are hardly the main disappointment. Lamentations steam mainly from users’ inability to earn as much as expected from the games. In some cases, users run into losses leading to more intense ‘scam’ allegations.

GameFi projects easily suffer huge price losses and endless backlash. Investors, disappointed with the low earning potentials continue to air their views in the sternest way, further confirming the fact that cryptocurrency enthusiasts are in fact more concerned about the earnings, and not the gameplay itself.

Well, it’s reasonable.

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The direct juxtaposition of gaming and earning in GameFi projects haven’t really worked best as normal human greed gets the better of these projects. little shortcomings result in heavy price drops and loss of interest. In a space where investors are quick to suspect ‘scams’ (and rightly so); emerging technologies like GameFi face a huge war between good and Bad…and the ugly.

But, how far has GameFi gone exactly? I’ll say, ‘very far’. Unfortunately, this is hard to realize when players are more focused on earning and will gladly shove aside a good game if it doesn’t offer a good earning opportunity. Passion aside, GameFi platforms have attracted more users in a very short period of time than most popular games.

EA Sports’ FIFA21 recorded an astonishing 31 million players on both PC and consoles, an additional 6 million players from its previous record. Taking into consideration, the rate of adoption and resource availability, GameFi platform has outperformed even the most popular football game. Axie infinity has reportedly recorded an excess of a million daily players!

This impressive growth is, however, influenced by earning opportunities as human greed comes into play once again. Despite the enormous number of daily users, players on GameFi platform hardly complain about technological shortcomings if the earnings are good. To be fair, most people would do the same, why complain when the money is good? Rhetoric with a simple answer.

While most mainstream games don’t have direct earning opportunities, players develop a way to make external earnings by contributing to the games’ growth. Popular ‘Call of duty’ players make tangible income from showing their gameplay on streaming platforms. Game critics and analysts make good incomes as well. In plain words, players flock to these games for the real fun they drive from just playing the game.

In contrast, GameFi’s Play-to-earn gets rid of the fun and users care least about the gameplay and how fun they are…the money will bring the fun, lol.

Will GameFi do better without play-to-earn? Well, YES and NO.

Withdrawing earning opportunities from decentralized gaming platforms will allow faster technological growth, however, an opposite effect is expected on adoption as fewer people will play without earning; very few.

NO, for short term, and Yes, for long term. Taking off earning opportunities will inevitably reduce participation, but on the brighter side, the pressure to deliver in a short period will be taken off the shoulders of game developers. Project development will as well move more smoothly as price talks won’t impede development. In the long run, the release of well-developed games with really fun and interesting gameplay will drive even more users.

02/02/2023
Why you should consider investing in decentralized solution(s).

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A couple of disclaimers on cryptocurrency investment advice and endless warnings, ‘cryptocurrency investments are very risky ventures…and the earth is flat’. Well, one is a fact; the other is probably another way to look at facts. A little focus will tell you which is which…just a little teaser there, but that’s by the way.

Alright, fact is, the earth is a sphere, and cryptocurrency investments are very risky, but that’s just another way to look at facts. Risks and rewards are related, sometimes this relationship could get toxic. The crypto space has been buzzing for a while now, anyone who took the risk before this time must have reaped from that audacious move. Recent strives by cryptocurrency and blockchain technology have once again flared the hunger to invest in decentralized solutions, but many are still scared to join the bandwagon

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It’s human to get scared, but it’s mastery to stay in complete control of these fears and ride against the waves. While some investors are hardly overpowered by their fears, others would need tons of advice to make a choice.

But that’s by the way; Cryptocurrency just like most other investments is a very risky venture, there’s unarguably a more pronounced risk when it comes to cryptocurrency. The outrageous fluctuations and nerve-spinning volatility give it a good place amongst ‘a thousand ways to die in the west’…that wasn’t meant to scare you! For experienced investors and risk-loving individuals (like myself!), volatility is a very tasty stuff, but sometimes it might burn hands.

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Here’s why you should consider taking the risk

The Features

Before you bought your first stock, you probably made a couple of research and calculations, a very good number of investors do clever research before putting their money on the road; a very important step in investments. Venturing into the crypto space, the scenario is almost the same. But in general, blockchain technology that powers cryptocurrencies glitters with many enticing features which are just too good to be ignored. ‘All that glitters are not gold’, yeah, I’m sure you said that to yourself at some point, but if gold glitters, then you’re closer to hitting gold if the glitters get more enticing.

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For a technology, blockchains are one of the most interesting inventions of the past couple of decades, the ability it poses and its numerous applications are certainly one to look out for. Cryptocurrencies aside, blockchains are one of the most advanced computing protocols which are unsurprisingly gaining mainstream attention. An immutable store of data, a flexible network for building almost anything on the internet, the list is endless. Venturing into the crypto space is as good as swimming in the oceans of blockchain technology, getting used to what has been a tangible offset of traditional ways of data storage, internet, finance…to mention a few. Regardless of the risks, these features should make you give it a try.

The Future.

A very quick follow-up to the aforementioned point. The features of blockchain technology are currently under-utilized and for any attentive investors, this technology is just starting to gain global recognition, and the only way is ‘up’! the future of cryptocurrencies and blockchain technology may be speculative, but that’s a common step for inventions poised to change the way things are done globally, taking a look at the bigger picture, cryptocurrencies, and blockchain are one for the future, the limits are beyond reach, better said, there are no limits and impossibilities are just weak words thrown around by people who find it hard to chase dreams. This is the same for cryptocurrencies and blockchain technology.

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Cryptocurrency investments are risky, but it is even riskier not to take a close look at the future and your biggest regret might be not securing a part of the future. Stocks will still be a part of the future, same as digitized precious metals and fiat currencies, but cryptocurrencies are poised to be the newcomers and might be an important part of the future. Shaun the risk, secure a place in the future, try making your way into the crypto space.

The Fortune.

I seriously resent the idea of cryptocurrency investments as a “get rich-quick scheme”. But it is hard to ignore the fact that cryptocurrency investments make mouth-watering returns. For investments in the last decades, cryptocurrencies have made the biggest return on investments, posting up to 20X gains. The ‘fast money’ idea is surely an unhealthy one and an investor who really wishes to be successful in the crypto space must first get rid of this orientation and embrace the technology and avoid being over-expectant of their crypto bags. Regardless, there is an already proven fortune in cryptocurrency investment, but just like every good thing, this takes a lot of time and requires some good level of patience and persistence.

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Your Tesla stock might have made you some good gains over the past five years, but most cryptocurrencies have made way more during this same period of time, this is unarguable. With more risks come even more rewards, dive into the ocean, take the risks, give it some time, reap the fortunes.

The Freedom

Stocks are great, digital gold are good investments too, but what about an investment that gives you total control over what you own? Decentralization in cryptocurrency gets rid of third parties and middlemen in handling some core financial activities such as blockchain-level send and receive. The freedom of being able to send a store of value across to anyone anywhere and not worry about exchange rates and delays due to the banks not processing payment, or even decline of payment because of some blurry reasons is something you should really pay some attention to.

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Cryptocurrencies come with some enticing level of freedom and privacy in the management of your finance and performance of some core financial activities. Probably this doesn’t sound so clear to you, but here in the crypto space ‘you are your own bank’, guess that sounds better! You don’t need a stockbroker to help you invest in cryptocurrencies, the simplicity makes it possible for a total noob to invest in cryptocurrency and manage this investment. Decentralization in cryptocurrency cuts off the middleman in most core management procedures.

Still need to be convinced, you certainly have your reservations, but if anything can change your opinion, it’s one of these four…

31/01/2023
Consider these while doing your own research.

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Most cryptocurrency suggestions end with the common phrase, ‘Do your own research’(DYOR). To an extent, I see it as the best way to describe the unpredictable nature of everything about the crypto space, every ‘advice’ are mere suggestion and even the ‘professionals’ get it wrong many times. Getting it right most times is even an extremely hard feat. Getting it right every time is utterly impossible, a 70% accurate cryptocurrency advisor is just an illusion, 50% accuracy is almost impossible too, as a matter of fact.

Predictions in cryptocurrency are mere speculations, hence the phrase ‘Do your own research’ charges you to be a master of your own decision and the repercussions of its failure. While these rampant suggestions also form a part of your research resources, their influence on your final decisions is actually your liability as the influencers do not answer for the failure of your decisions.

Hence, you’re literally ‘on your own’. Looking for that cryptocurrency gem to invest in? it actually sounds easier than it really is, despite the fact that it already sounds tough. Just as experienced investors will say, ‘make your decision and stand by it’. Predictions of any kind are 10% calculation and 90% luck. Getting lucky is the only way to get it right, getting lucky is not assured, unfortunately.

Scoring high chances of getting your speculations right and getting lucky in your cryptocurrency investments involve some vital steps of calm inquiries, research, and calculations. The cryptocurrency space is made up of over ten thousand ‘exciting’ projects and new projects coming up every day with equally exciting concepts and clever moves, one will be moved to invest in almost all of them.

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Regardless of how much you diversify your cryptocurrency portfolio, you still leave out the majority of the cryptocurrency projects, and each one you leave behind reduces your probability of getting it right with your investment as every one of them stands some chance of making good returns on investment. On the other hand, doing the impossible and buying into as many projects as possible also places you at a higher risk of running into losses, diversification may seem to be the best approach, but in the real sense, it could backfire badly. Streamlining your investments still harbors the bigger risk but is poised to give the best return if you get it right with your streamlined portfolio.

Decisions backed by research are the best approach, making the right inquiries in the course of your research hence becomes equally important. In making your research, some important aspects of the project should be surveyed carefully. Short-term holders and traders certainly have a ‘smaller’ decision to make. Traders could derive their next moves by looking at the seven (7) days price chart of the coin/token and predict the next move by other buyers using human behavior theories. This is very hard, however, investors intending to hold on to their investments for a long time certainly have a harder decision to make as there comes to the need to apply the traders’ and short-term holders’ strategies and as well many other calculations and speculations to arrive at a safer decision.

Just like stocks, gold, and other similar commodities cryptocurrency price movements depends on market trends and the utility of the token. While short-term holders and traders can simply ride with their predicted market trends and take their profits in a short while or simply get out of the trade to minimize their loss, long-term holders expect to hold their tokens/coins for a much longer time, ride with the fluctuations and stay through the adverse times hoping to reap from their persistence and patience at the long run. Hence, careful prediction of the long future is essential.

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You should consider the idea behind a cryptocurrency project. Many cryptocurrencies are mere bogus terms with infeasible proposals and concepts. Jumping into such projects is likely to backfire in the long run. Utility is the first thing to look out for. How possible is the concept proposed by the developers? What are the possibilities for developing their proposed solutions into workable prototypes? and what are the possibilities of these prototypes being really applicable to the problem that it hopes to solve?

A project which offers real solutions to problems stands more chances to make massive returns on investments if it finally proves to be a solution. Unfortunately, many cryptocurrency projects make their proposals as flashy as possible and present mouth-watering roadmaps which all end up being mere proposals that may never be realized. Sieving out such projects hence requires an in-depth look at current efforts made by the developers and how workable their current prototypes are. This will give a better insight into the future and enable the investor predicts the future with more information.

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Regardless of how feasible a proposal is, it requires capable hands to materialize it, a capable team is also a vital factor to consider before any cryptocurrency investment. How experienced and qualified the team members are increasing the chances of the project’s success. A good team is as important as a feasible goal. A good team knows how best to steer a project toward the right path. Before investing in any cryptocurrency project with a good vision, endeavor to survey the team’s reputation, experience, qualifications, past projects, and leadership scheme. A well-guided project with a good proposal is bound to succeed if other factors should remain favorable, this is also a good point to consider before buying in.

Token generation and distribution schemes could also go a long way to deciding the success of a cryptocurrency project. An outrageous supply scheme scares away investors. Token distribution scheme is also a good factor to consider, who are the holders of this coin/token? And how many tokens are they holding? How many tokens are already in circulation and what is the total supply? Unexplained outrageous supply and distribution of tokens/coins are major red flags.

In practice, a project with a good team and potential utility may override poor token management, however, in a situation where the first two factors are not very satisfactory, risking it more with a poor token supply and distribution scheme is a whole lot of risk.

A look into the community and how the project is being managed is also important. A transparent and decentralized project displays the core virtues of a cryptocurrency project. A good community contributes tangibly to the success of a good project, building a good community is also dependent on how good the management is. A well-managed transparent and truly decentralized project appeals to the cryptocurrency community more than otherwise.

As complicated as cryptocurrency investments could be, good research only improves an investor’s chances of at least not running into grave losses with their choices. The chances of getting it right are also improved, however, it doesn’t assure a successful investment. Sometimes, trusting your intuition might be the best decision to take, good research also feeds your intuition.

31/01/2023
Arbitrage Trading: Exploiting price variations.
If you are a chart watcher, you’ll notice slight price variations on different exchanges. For the majority, this variation is too ‘small’ and ‘not tangible’. Trading price variation across different market pairs and different exchanges is known as Arbitrage Trading. These variations are usually due to differences in demand and purchasing pressure across these exchanges and pairs.

Usually, these variations last for only a short while before leveling up with the rest of the market. Unarguably, the offset in price is usually slight, but they could mean a whole lot…if used correctly.

The popular practice is cryptocurrency traders and investors trading against time and exploiting the periodic variation in values of cryptocurrencies to make gains. Traders are more actively involved in this race against time and demand.

Time and demand play a role in the overall value of an asset, this is a popular concept. But, the effect of time and demand on the value of an asset in different markets is relatively less popular, ‘ignored’ is a more appropriate term. Even in our everyday markets, the price of a commodity doesn’t stay the same in different markets, the cryptocurrency markets aren’t different as regards this.

Market-to-market price fluctuation is commonly overlooked, not just in cryptocurrency but also in mainstream trading scenarios. This market-to-market variation in the value of an asset form the crux of Arbitrage trading.

Differences in price across exchanges can be influenced by the purchasing power of an exchange, this is determined by the ‘wallet weight’ of the traders using these exchanges. The amount of ‘rich buyers’ (whales) in an exchange determines the purchase pressure on the said exchange. This is evident in the impressive spread and high transaction volumes. Such pressure could result in the order books moving slightly faster on the concerned exchange.

Whale influence drives price, more buy force from whales in the market slims down the sell orders while driving the buy orders up and creating good liquidity. This can also go either way, bringing prices down faster. When this happens at different speeds and at different times in different markets, price variation occurs.

This is normal and price variation can be up to 50%. Whichever way the variation goes, provided a difference is created, an Arbitrage trader can swing into action and take advantage of this.

Basically, Arbitrage trading consists of three processes:
1. Detecting variations in the value of an asset across different exchanges or trading pairs.
2. Purchasing assets at this reduced price.
3. Selling the purchased asset at a higher price on another exchange or trading pair.
Easy? Well, not really.

Arbitrage trading is a notably risky venture, just like any other trading activity. However, there seems to be an increased risk, probably why it hasn’t been able to gain huge popularity. Trading arbitrage involves managing a couple of risks. These risks normally arise due to the fast-changing prices and practices of exchanges.

Sometimes the price differences level up after a very brief moment, things could go either way too. Many times, these differences don’t actually exist and the noticed variation is only due to an uneven spread between the buy orders and the sell orders. In the quest to act fast, an arbitrage trader stands a chance of not noticing this development. When this happens, the most possible event is selling at a loss or playing a longer game of time. Sometimes an arbitrage trader could get stuck due to this.

When trading arbitrages across different exchanges for assets that attract tangible withdrawal fees, the risk of losses is increased, relative to the fees. As an arbitrage trader moves assets across exchanges, more spillage and expenses are incurred. To cover up these technical losses, an arbitrage trader must generate a positive net profit. One way to do this is by increasing the purchasing power to maximize the gains. Purchasing power however depends on what the trader can afford, there are strict limits to this.

Arbitrage trading is a game of numbers, speed, and cleverness. Quantity influences the chances of making profits from an arbitrage trade. Acting ‘fast’ is also a vital quality of a good arbitrage trader. Net arbitrage return is obtained by deducting the exchange withdrawal charges and other technical costs from the gross profit. Increasing purchases to compensate for trading and withdrawal charges could also be a good practice. Capitalizing on price variation is profitable practice, however, the sale and buy orders in both markets should be considered.

Thin buy orders on the target market could lead to substantial losses. Inability to win the race against time also results in losses. Best practice would be targeting wide arbitrage in low withdrawal fee assets. This doesn’t come frequently. But when done right, arbitrage trading could prove lucrative.
31/01/2023
ICO vs IEO: Pros and cons, and Why exchanges would want to list new projects.

With an exciting idea in an innovative mind, new products are potentially born. For every new unique cryptocurrency project, the crypto space expands. Over the years, tons of new projects have emerged. These projects proffer solutions to real-world issues through products built on decentralized and distributed networks.

Bringing a new cryptocurrency project to life sounds easier than it could get. An average of over five hundred (500) new cryptocurrency projects emerge yearly and aim for prominence in the crypto space. Surviving this challenge is a struggle. This struggle is even more intense for infant projects. A feasible idea and a practical use case are paramount to the survival and success of new and existing projects. A couple of other factors also contribute to this.

In a capitalist world, financing new ideas to life follow the due process of fundraising and hunting for start-up investors. Successful fundraising generates enough funds for new projects. Apart from funds, it also generates the initial set of believers who have faith in the ambitions of the project. Investors believe in the founders and the potential of the idea they have invested in. Fundraising thus goes beyond gaining financial buoyancy to push a new idea.

For cryptocurrency projects; Public Initial Coin Offerings (ICO) and Initial Exchange Offerings (IEO) present fundraising opportunities. Before the advent of IEOs, public Initial coin offering has been the principal means of fundraising for new projects.

Thanks to Ethereum’s smart contract technology and other blockchains with similar features, new projects can generate cryptographic tokens. These tokens run parallel to the blockchain’s native token. To raise funds for the development of this project, project founders offer a percentage of its total token supply. These tokens are sold to investors at a presumably low price in exchange for funds. Through Public Initial Coin Offering, project founders directly sell these tokens to investors…

Public ICO : How did it go wrong?

Due to a series of infamous events; public ICOs have been marred by scams. Other problems include contract breaches and project failures. This has become unreliable for investors. For project founders, fundraising through public Initial Coin Offering (ICO) has also grown tedious. In public ICO, a project bears the total burden.

Success in raising funds via Public ICO solely depends on a project’s ability to properly market its idea to the general cryptocurrency community. Reaching out to the world outside the crypto space is phenomenal. This would take special marketing skills…and a bit of luck.

In the absence of prominent affiliates or partners, this gets even harder. New projects face the hurdle of creating assurance for intending investors. There is a need to prove beyond doubt, the feasibility of their theories and the importance of the utility they hope to create. Even when properly done, public ICOs haven’t been very efficient for project founders. New projects still face the challenge of pushing their product to the market after a successful Public ICO.

Public ICOs leave new projects bare. Most new projects struggle despite having conducted a successful ICO and raised tangible funds. A good percentage of new projects have also failed to survive this struggle while many more have been limited in their potential. Either way, this spells grave losses for initial investors. These struggles led to an outbreak of ICO scams.

IEO: Exchanges to the rescue?

Initial Exchange Offerings (IEO) have grown since then as an alternative to Public ICO which continues to be riddled with its shortcomings.

An Initial Exchange Offering is a form of ICO conducted by cryptocurrency exchanges. To conduct an IEO, new projects partner with exchanges to oversee their token sale. In contrast to public ICOs, this exchange provides a platform for token sales. Exchanges also influence the marketing of the new project as well as its token sale. Depending on the agreement between the two parties, the exchange could handle the majority of the token sale workload. This lessens the burden of fundraising for the project founder(s).

IEOs solve numerous fundraising issues. In addition to the aforementioned, partnering with a reputable exchange further assures investors of the legitimacy of the new project. With the reputation of the exchange at stake, it is very unlikely that it would partner with shady new projects for fundraising. Exchanges via IEOs simplify token offerings and fundraising programs for new projects.

Exchanges such as Binance, and Huobi have developed fundraising models on their platforms.

Exchanges apply cautions and regulations. These caution and regulations make this process safer for investors who are also their customers. A Project after IEO will be immediately listed on the exchange. The project’s life in the crypto space gets off stylishly. IEOs are thought to salvage the fundraising process in cryptocurrency. ‘Exit scams’ by projects who conducted an IEO is a rare story.

However, it’s never all shades of good. IEOs, despite being a masterpiece also have their shortcomings. In contrast to Public ICOs where projects are free to sell their token to any buyer; token sale one exchanges (IEO) are only open to traders on the specific exchange. Depending on the universality of the exchange and user regulations, the token purchase is limited to a certain set of people. For exchanges whose services are not available in certain geographical locations, investors in such locations will be unable to participate in the initial token sale. Exchanges introduce another level of centralization to initial token sales and fundraising programs. This centralization also improves investor security, but still, its limitation is tangible.

What exchanges consider before listing new projects

IEO projects find it relatively easier to get listed on exchanges than public ICO projects.

But why would exchanges consider listing new projects.?

Regardless of the fundraising process, the listing process for every project is the same. Some reservations might exist where the project has a special relationship with the exchange. Apart from situations like this, consideration for listings is a uniform process for most exchanges.

A project’s reputation speaks for it. A good project is on the trajectory for spontaneous success…most times. The relationship between exchanges and projects listed on its platform is mutual. A shady project dampens the reputation of an exchange. Reputable exchanges are clever to refute approaches by shady projects. Transparency is a vital feature considered in the process of token listing.

A project which satisfies this criterion is further assessed for its fundamentals and vulnerability to regulations. Security tokens might face hardship in listing on exchanges due to regulations that bind them.

Market viability and user base are also considered. However, for a project which satisfies the criteria mentioned earlier, the chances of getting accepted by exchanges grow higher and are expected to gain more userbase and grow in market performance with time.

IEO projects find it easier to get listed on other exchanges. This is mainly because they already satisfied these criteria before their fundraising proposal was accepted by their parent exchange.

29/01/2023