Bitcoin is the most censorship resistant money in the world.
You don't have to buy a “whole” bitcoin so don't freak out if you look at the price. You can buy a piece of one no problem.
The Dallas Mavericks accept Bitcoin on their website. You don't trust Mark Cuban. He's the best shark.
Bitcoin is the best performing asset of the last decade (better than S&P500).
Diversify your current portfolio.
It's not illegal in the USA.
You holding just one satoshi slightly limits the supply and can rise the price for everyone else.
[In late 2019] hash rate is the highest it has ever been
Suicide insurance; if Bitcoin rises in price there is no worse feeling than regret.
Some of the smartest people in computer science and cryptography are working on it. Trust nerds.
Look at the all time historical chart. No technical analysis just tell me what you think when you look at it.
Money is a belief system... and I want to believe.
Transparent ledger, no funny business going on it's easy to audit.
Elon Musk appears to be a fan. How's that for an appeal to authority
There is a fixed limit in the number of bitcoins that will exist. 21 million bitcoin, 7 billion people on earth. Do the math.
There are so many examples of governments inflating their currency to the point where it becomes unusable. Read the wikipedia page for Venezuela or Zimbabwe.
Altcoins make sacrifices in either security or centralization. There are altcoins out there that claim to be innovating but just check the scoreboard nothing has flipped Bitcoin in market value or even gotten close.
With technology developing at a rate faster than law, governments and for-profit businesses have the ability to monitor our purchases, location, our habits, and all of this has happened without consent. People made jokes and conspiracy theory, but sometimes conspiracy is real. Most people are good, but there is absolutely evil out there. There are absolutely evil people in positions of power. There are absolutely evil people that work together in positions of power. Does anyone actually believe that Jeffrey Epstein committed suicide. Go read about Leslie Wexner. Go read the cypherpunk manifesto.
The upcoming halvening in 2020 will reduce the number of Bitcoin created in each block, making them more scarce, and if history repeats more valuable.
Bitcoin has lower fees than traditional banking.
Gold has the advantage of being a physical thing. But unlike gold you know Bitcoin is not forged, or mixed with another metal, and you can easily break it into tiny pieces and send it over the internet to someone.
Bitcoin could spark new interests maybe you start to read more into economics, computer science, or Brock Pierce.
Bitcoin has survived with no leader, marketing team, public relations, or legal team.
Because Wired magazine said Bitcoin was dead at $2, Forbes said it was dead at $15, NY Times at $208, and CNN at $333.
Just do a cost benefit analysis. What happens if Bitcoin fails and it goes to zero vs. what happens if it succeeds, and becomes world money.
Bitcoin encourages long term thinking, planning, saving. Due to inflation we are punished by holding on to cash. Look up the statistics on the average savings account while we are bombarded with consumerist bullshit like Funko pop heads, Loot crate subscription services, and new syrup flavors for coffee. Currently we are encouraged to spend now, seek immediate gratification, and ignore what we are becoming as Amazon picks out our clothes and toothpaste ships it to the house and we sit and watch streaming services where content is pushed to us and I'm supposed to buy that this garbage is actually “trending”. Our lives have become so comfortable that idiots spend $60 to escape a room and have someone take your picture when you get out. What would our ancestors think.
Maybe you're a day trader looking to use a trading bot in an unregulated market.
Bitcoin has 7 letters in it. Lucky number 7.....
Bitcoin promises to bank the unbanked, and provide services to those not otherwise “qualified” to open a bank account.
It's just cool, don't you want to seem smart to all your friends.
The origin story is so nuts there's going to be a movie or several movies about the early days of Bitcoin. Satoshi Nakamoto remains anonymous to this day. Imagine if the inventor of the cell phone was anonymous.
If you have money to burn, don't buy soda, weed, or some girls private snapchat it's a dead end put it towards Bitcoin and give it to your child in the future.
To avoid getting ripped off by foreign exchange fees just because you were born one place and your friends were born in another place.
Can't live off the grid in your log cabin and still use Mastercard. Bitcoin is one piece of opting out.
If one country adopts BTC as the national currency, it doesn't take much thought to realise that others will follow.
Join a welcoming and unique community. Everyone is super nice because they want your money.
You can stick it to the baby boomers.
You can stick it to the vegans.
You can stick it Roger Ver.
Maybe your IQ is 70 and you'll do whatever CNBC Fast Money recommends.
Maybe a hacker infects your computer, records you doing that thing, and threatens to release the tape if you do not pay them 1.5 Bitcoin.
You're a risk taker looking for some risky investment.
Aliens attack like Independence Day, blow up major cities in major countries, your money is still safe with Bitcoin. As long as there is a some guy, some person, living on an island with a copy of the ledger out there on your'e good. We're all good.
Many proposals to scale the number of transactions, may the best plan win.
One day you might have to use BTC to pay taxes, buy food, and charge your Tesla.
You want to support a political group and remain private.
You can trust math more than you can trust people to set an emission rate.
Government don't know how much you have.
The first response to Bitcoin being published by Hal Finney stated that Bitcoin was positioned to reach million dollar valuation. Hal was the first bull and passed away in 2014, missing a lot #doitforHal.
Baddies can't freeze your money if they mad at you.
The Big Bang Theory mentioned it, maybe you want to be like Sheldon the bazinga guy.
Be contrarian. In a world where everyone zigs it's sometimes good to zag.
Don't have any hobbies, and you just need a reason to get up in the morning.
Enjoy learning? Bitcoin is a topic where there is so much to learn, and so much development, that it really becomes a never ending journey. For someone who likes learning, it's more productive than speedrunning a video game.
Yolo. You only live once. This isn't a dress rehearsal, if there's something your kind of interested in pursue it. That's true for anything not just Bitcoin. But if you're reading this I'm assuming you're interested.
Bitcoin is not a ponzi scheme. The difference is Bitcoin does not need new people buying in to work, blocks being added will continue even if the community stopped growing.
With religion on the decline maybe you want to join a cult. Crypto twitter is a great echo chamber to meet like minded people.
Satoshi Nakamoto found a way to distribute a global currency in a fair way with the ability to adjust the mining difficulty as we go, it's really incredible. You still need computers and electricity to mine new bitcoin today but it's an extremely fair way for people to earn. There was no premine of Bitcoin. Everyone who has Bitcoin either bought it at what the market said, or they earned it.
No CEO in charge of Bitcoin to make bad decisions or a board of directors that can make changes. The users, an ever growing number, are in charge.
Bitcoin has no days off, it has no workers in charge who can get sick or take a holiday.
Bitcoin has survived 10 years (and more). While there will always be dangers, I'd argue that those first few years it was most vulnerable to fail.
Have some trust in the cypherpunks. Anyone who held and didn't sell bitcoin as it went from pennies to five figures is not looking to get rich. They want to change the world.
Potential president Tulsi Gabbard disclosed owning some.
Digital money is the future, anyone who has tried Venmo can see that. Well Bitcoin is a digitally native asset.
Refugees can use Bitcoin to store their wealth as they flee a failing country.
Bitcoin is an open source project. Anthony Pompliano likes to call it a virus but I like how the author of the Bitcoin Standard describes it. Bitcoin is like a song. As long as one person remembers it you can't destroy a song.
Triple entry accounting. When humans first started recording who owes who what we had single-entry accounting. The king's little brother would keep everything written down, but we had to really trust this guy because he could simply erase a line and that money would be gone. When double-entry accounting started to spread 500 years ago it brought with it massive innovation. Businesses could now form relationships across the ocean as they each kept a record. We did not have innovation again until Satoshi's Bitcoin, where blockchain can be used as the neutral third party to keep record. It might not sound important but blockchain allows us to agree upon an objective reality.
Bitcoin is non-political.
Bitcoin is easy to accept. I mean kind of. It's certainly easier than setting up a bank account.
A sandwich used to cost 10 cents in America, I walk into Subway and they don't even have $5 foot longs anymore. Inflation man..
It's a peaceful protest.
Critics say that mining wastes electricity, but if Bitcoin adoption continues the world will actually be incentivized to produce more renewable energy. There are so many waterfalls and sources of energy in the middle of nowhere right now. People might not see a reason to build a power plant over there now, but in the future it can make business sense. Take that waterfall mine bitcoin, and sell them to the people who can't mine. It allows for a business to sell their energy anywhere.
Get into debates around Bitcoin, build those critical thinking skills.
“Predicting rain doesn't count, building arks does”
“The best time to plant a tree was 20 years ago, the second best time is now.”
"I never considered for one second having anything to do with it. I detested it the moment it was raised. It’s just disgusting. Bitcoin is noxious poison.”
The immaculate conception. No cryptocurrency can have a start the grassroots way Bitcoin did, it's just impossible given how the space has changed.
There are more than 1000x more U.S. dollars today than there were a hundred years ago.
Bitcoin is the largest transfer of wealth this decade from the least curious to the curious.
The concept of the Star Wars Cantina, Galt's Gulch, or young Beat Generation kids sitting in a basement smoking cigarettes and questioning the world can only exist if money remains fungible.
You can send money to your Dad even if he lives in a country run by bad boys.
Memorize your key, and walk around the world carrying your money in your head.
The Federal Reserve is objectively way too powerful.
John Mcafe promised that if bitcoins were not valued at 1 million dollars by the end of 2020 he would eat his own penis on national television. It will be a sad day if we don't hit that 1 million.
The Apple credit card.
If we ever get artificial intelligence it'll be able to interact with Bitcoin.
Katy Perry is aware of crypto so if by some chance you run into her, you get one chance to strike up conversation, so here's your chance to shine. You don't ask for a picture, you don't say she's pretty, or name your favorite song. Take your shot and ask about what type of cold storage she uses for her bitcoin.
Many people are afraid of a world currency because it's associated with a centralized world power taking control. Bitcoin allows for neutral world money.
An extensive guide for cashing out bitcoin and cryptocurrencies into private banks
Hey guys. Merry Xmas ! I am coming back to you with a follow up post, as I have helped many people cash out this year and I have streamlined the process. After my original post, I received many requests to be more specific and provide more details. I thought that after the amazing rally we have been attending over the last few months, and the volatility of the last few days, it would be interesting to revisit more extensively. The attitude of banks around crypto is changing slowly, but it is still a tough stance. For the first partial cash out I operated around a year ago for a client, it took me months to find a bank. They wouldn’t want to even consider the case and we had to knock at each and every door. Despite all my contacts it was very difficult back in the days. This has changed now, and banks have started to open their doors, but there is a process, a set of best practices and codes one has to follow. I often get requests from crypto guys who are very privacy-oriented, and it takes me months to have them understand that I am bound by Swiss law on banking secrecy, and I am their ally in this onboarding process. It’s funny how I have to convince people that banks are legit, while on the other side, banks ask me to show that crypto millionaires are legit. I have a solid background in both banking and in crypto so I manage to make the bridge, but yeah sometimes it is tough to reconcile the two worlds. I am a crypto enthusiast myself and I can say that after years of work in the banking industry I have grown disillusioned towards banks as well, like many of you. Still an account in a Private bank is convenient and powerful. So let’s get started.
A. What is required to open an account in a Private bank when you made your fortune through crypto.
There are two different aspects to your onboarding in a Swiss Private bank, compliance-wise. *The origin of your crypto wealth *Your background (residence, citizenship and probity) These two aspects must be documented in-depth. How to document your crypto wealth. Each new crypto millionaire has a different story. I may detail a few fun stories later in this post, but at the end of the day, most of crypto rich I have met can be categorized within the following profiles: the miner, the early adopter, the trader, the corporate entity, the black market, the libertarian/OTC buyer. The real question is how you prove your wealth is legit. 1. Context around the original amount/investment Generally speaking, your first crypto purchase may not be documented. But the context around this acquisition can be. I have had many cases where the original amount was bought through Mtgox, and no proof of purchase could be provided, nor could be documented any Mtgox claim. That’s perfectly fine. At some point Mtgox amounted 70% of the bitcoin transactions globally, and people who bought there and managed to withdraw and keep hold of their bitcoins do not have any Mtgox claim. This is absolutely fine. However, if you can show me the record of a wire from your bank to Tisbane (Mtgox's parent company) it's a great way to start. Otherwise, what I am trying to document here is the following: I need context. If you made your first purchase by saving from summer jobs, show me a payroll. Even if it was USD 2k. If you acquired your first bitcoins from mining, show me the bills of your mining equipment from 2012 or if it was through a pool mine, give me your slushpool account ref for instance. If you were given bitcoin against a service you charged, show me an invoice. 2. Tracking your wealth until today and making sense of it. What I have been doing over the last few months was basically educating compliance officers. Thanks God, the blockchain is a global digital ledger! I have been telling my auditors and compliance officers they have the best tool at their disposal to lead a proper investigation. Whether you like it or not, your wealth can be tracked, from address to address. You may have thought all along this was a bad feature, but I am telling you, if you want to cash out, in the context of Private Banking onboarding, tracking your wealth through the block explorer is a boon. We can see the inflows, outflows. We can see the age behind an address. An early adopter who bought 1000 BTC in 2010, and let his bitcoin behind one address and held thus far is legit, whether or not he has a proof of purchase to show. That’s just common sense. My job is to explain that to the banks in a language they understand. Let’s have a look at a few examples and how to document the few profiles I mentioned earlier. The trader. I love traders. These are easy cases. I have a ton of respect for them. Being a trader myself in investment banks for a decade earlier in my career has taught me that controlling one’s emotions and having the discipline to impose oneself some proper risk management system is really really hard. Further, being able to avoid the exchange bankruptcy and hacks throughout crypto history is outstanding. It shows real survival instinct, or just plain blissed ignorance. In any cases traders at exchange are easy cases to corroborate since their whole track record is potentially available. Some traders I have met have automated their trading and have shown me more than 500k trades done over the span of 4 years. Obviously in this kind of scenario I don’t show everything to the bank to avoid information overload, and prefer to do some snacking here and there. My strategy is to show the early trades, the most profitable ones, explain the trading strategy and (partially expose) the situation as of now with id pages of the exchanges and current balance. Many traders have become insensitive to the risk of parking their crypto at exchange as they want to be able to trade or to grasp an occasion any minute, so they generally do not secure a substantial portion on the blockchain which tends to make me very nervous. The early adopter. Provided that he has not mixed his coin, the early adopter or “hodler” is not a difficult case either. Who cares how you bought your first 10k btc if you bought them below 3$ ? Even if you do not have a purchase proof, I would generally manage to find ways. We just have to corroborate the original 30’000 USD investment in this case. I mainly focus on three things here: *proof of early adoption I have managed to educate some banks on a few evidences specifically related to crypto markets. For instance with me, an old bitcointalk account can serve as a proof of early adoption. Even an old reddit post from a few years ago where you say how much you despise this Ripple premined scam can prove to be a treasure readily available to show you were early. *story telling Compliance officers like to know when, why and how. They are human being looking for simple answers to simple questions and they don’t want like to be played fool. Telling the truth, even without a proof can do wonders, and even though bluffing might still work because banks don’t fully understand bitcoin yet, it is a risky strategy that is less and less likely to pay off as they are getting more sophisticated by the day. *micro transaction from an old address you control This is the killer feature. Send a $20 worth transaction from an old address to my company wallet and to one of my partner bank’s wallet and you are all set ! This is gold and considered a very solid piece of evidence. You can also do a microtransaction to your own wallet, but banks generally prefer transfer to their own wallet. Patience with them please. they are still learning. *signature message Why do a micro transaction when you can sign a message and avoid potentially tainting your coins ? *ICO millionaire Some clients made their wealth participating in ETH crowdsale or IOTA ICO. They were very easy to deal with obviously and the account opening was very smooth since we could evidence the GENESIS TxHash flow. The miner Not so easy to proof the wealth is legit in that case. Most early miners never took screenshot of the blocks on bitcoin core, nor did they note down the block number of each block they mined. Until the the Slashdot article from August 2010 anyone could mine on his laptop, let his computer run overnight and wake up to a freshly minted block containing 50 bitcoins back in the days. Not many people were structured enough to store and secure these coins, avoid malwares while syncing the blockchain continuously, let alone document the mined blocks in the process. What was 50 BTC worth really for the early miners ? dust of dollars, games and magic cards… Even miners post 2010 are generally difficult to deal with in terms of compliance onboarding. Many pool mining are long dead. Deepbit is down for instance and the founders are MIA. So my strategy to proof mining activity is as follow: *Focusing on IT background whenever possible. An IT background does help a lot to bring some substance to the fact you had the technical ability to operate a mining rig. *Showing mining equipment receipts. If you mined on your own you must have bought the hardware to do so. For instance mining equipment receipts from butterfly lab from 2012-2013 could help document your case. Similarly, high electricity bill from your household on a consistent basis back in the day could help. I have already unlocked a tricky case in the past with such documents when the bank was doubtful. *Wallet.dat files with block mining transactions from 2011 thereafter This obviously is a fantastic piece of evidence for both you and me if you have an old wallet and if you control an address that received original mined blocks, (even if the wallet is now empty). I will make sure compliance officers understand what it means, and as for the early adopter, you can prove your control over these wallet through a microtransaction. With these kind of addresses, I can show on the block explorer the mined block rewards hitting at regular time interval, and I can even spot when difficulty level increased or when halvening process happened. *Poolmining account. Here again I have educated my partner bank to understand that a slush account opened in 2013 or an OnionTip presence was enough to corroborate mining activity. The block explorer then helps me to do the bridge with your current wallet. *Describing your set up and putting it in context In the history of mining we had CPU, GPU, FPG and ASICs mining. I will describe your technical set up and explain why and how your set up was competitive at that time. The corporate entity Remember 2012 when we were all convinced bitcoin would take over the world, and soon everyone would pay his coffee in bitcoin? How naïve we were to think transaction fees would remain low forever. I don’t blame bitcoin cash supporters; I once shared this dream as well. Remember when we thought global adoption was right around the corner and some brick and mortar would soon accept bitcoin transaction as a common mean of payment? Well, some shop actually did accept payment and held. I had a few cases as such of shops holders, who made it to the multi million mark holding and had invoices or receipts to proof the transactions. If you are organized enough to keep a record for these trades and are willing to cooperate for the documentation, you are making your life easy. The digital advertising business is also a big market for the bitcoin industry, and affiliates partner compensated in btc are common. It is good to show an invoice, it is better to show a contract. If you do not have a contract (which is common since all advertising deals are about ticking a check box on the website to accept terms and conditions), there are ways around that. If you are in that case, pm me. The black market Sorry guys, I can’t do much for you officially. Not that I am judging you. I am a libertarian myself. It’s just already very difficult to onboard legit btc adopters, so the black market is a market I cannot afford to consider. My company is regulated so KYC and compliance are key for me if I want to stay in business. Behind each case I push forward I am risking the credibility and reputation I have built over the years. So I am sorry guys I am not risking it to make an extra buck. Your best hope is that crypto will eventually take over the world and you won’t need to cash out anyway. Or go find a Lithuanian bank that is light on compliance and cooperative. The OTC buyer and the libertarian. Generally a very difficult case. If you bought your stack during your journey in Japan 5 years ago to a guy you never met again; or if you accumulated on https://localbitcoins.com/ and kept no record or lost your account, it is going to be difficult. Not impossible but difficult. We will try to build a case with everything else we have, and I may be able to onboard you. However I am risking a lot here so I need to be 100% confident you are legit, before I defend you. Come & see me in Geneva, and we will talk. I will run forensic services like elliptic, chainalysis, or scorechain on an extract of your wallet. If this scan does not raise too many red flags, then maybe we can work together ! If you mixed your coins all along your crypto history, and shredded your seeds because you were paranoid, or if you made your wealth mining professionally monero over the last 3 years but never opened an account at an exchange. ¯_(ツ)_/¯ I am not a magician and don’t get me wrong, I love monero, it’s not the point. Cashing out ICOs Private companies or foundations who have ran an ICO generally have a very hard time opening a bank account. The few banks that accept such projects would generally look at 4 criteria: *Seriousness of the project Extensive study of the whitepaper to limit the reputation risk *AML of the onboarding process ICOs 1.0 have no chance basically if a background check of the investors has not been conducted *Structure of the moral entity List of signatories, certificate of incumbency, work contract, premises... *Fiscal conformity Did the company informed the authorities and seek a fiscal ruling.
B. The tax issue I am not a tax specialist, but I can say that this year I have seen it all. Again I am not judging. You made $100m hodling, and still wouldn’t pay your taxes ? Your decision.I personally advise everyone to pay their taxes, but also to be generous, to give to charities. I mean you eventually made it. Good for you. What about you contribute to make the world a better place now? I will stop patronizing you. It’s just my 2cts, and it’s your money.
For the record, I am not into the tax avoidance business, so people come to me with a set up and I see if I can make it work within the legal framework imposed to me. First, stop thinking Switzerland is a “offshore heaven” Swiss banks have made deals with many governments for the exchange of fiscal information. If you are a French citizen, resident in France and want to open an account in a Private Bank in Switzerland to cash out your bitcoins, you will get slaughtered (>60%). There are ways around that, and I could refer you to good tax specialists for fiscal optimization, but I cannot organize it myself. It would be illegal for me. Swiss private banks makes it easy for you to keep a good your relation with your retail bank and continue paying your bills without headaches. They are integrated to SEPA, provide ebanking and credit cards. For information, these are the kind of set up some of my clients came up with. It’s all legal; obviously I do not onboard clients that are not tax compliant. Further disclaimer: I did not contribute myself to these set up. Do not ask me to organize it for you. I won’t. EU tricks Swiss lump sum taxation Foreign nationals resident in Switzerland can be taxed on a lump-sum basis if they are not gainfully employed in our country. Under the lump-sum tax regime, foreign nationals taking residence in Switzerland may choose to pay an expense-based tax instead of ordinary income and wealth tax. Attractive cantons for the lump sum taxation are Zug, Vaud, Valais, Grisons, Lucerne and Berne. To make it short, you will be paying somewhere between 200 and 400k a year and all expenses will be deductible. Switzerland has adopted a very friendly attitude towards crypto currency in general. There is a whole crypto valley in Zug now. 30% of ICOs are operated in Switzerland. The reason is that Switzerland has thrived for centuries on banking secrecy, and today with FATCA and exchange of fiscal info with EU, banking secrecy is dead. Regulators in Switzerland have understood that digital ledger technologies were a way to roll over this competitive advantage for the generations to come. Switzerland does not tax capital gains on crypto profits. The Finma has a very pragmatic approach. They have issued guidance- updated guidelines here. They let the business get organized and operate their analysis on a case per case basis. Only after getting a deep understanding of the market will they issue a global fintech license in 2019. This approach is much more realistic than legislations which try to regulate everything beforehand. Italy new tax exemption. It’s a brand new fiscal exemption. Go to Aoste, get residency and you could be taxed a 100k/year for 10years. Yes, really. Portugal What’s crazy in Europe is the lack of fiscal harmonization. Even if no one in Brussels dares admit it, every other country is doing fiscal dumping. Portugal is such a country and has proved very friendly fiscally speaking. I personally have a hard time trusting Europe. I have witnessed what happened in Greece over the last few years. Some of our ultra high net worth clients got stuck with capital controls. I mean no way you got out of crypto to have your funds confiscated at the next financial crisis! Anyway. FYI Malta Generally speaking, if you get a residence somewhere you have to live there for a certain period of time. Being stuck in Italy is no big deal with Schengen Agreement, but in Malta it is a different story. In Malta, the ordinary residence scheme is more attractive than the HNWI residence scheme. Being an individual, you can hold a residence permit under this scheme and pay zero income tax in Malta in a completely legal way. Monaco Not suitable for French citizens, but for other Ultra High Net worth individual, Monaco is worth considering. You need an account at a local bank as a proof of fortune, and this account generally has to be seeded with at least EUR500k. You also need a proof of residence. I do mean UHNI because if you don’t cash out minimum 30m it’s not interesting. Everything is expensive in Monaco. Real Estate is EUR 50k per square meter. A breakfast at Monte Carlo Bay hotel is 70 EUR. Monaco is sunny but sometimes it feels like a golden jail. Do you really want that for your kids? Dubaï
Set up a company in Dubaï, get your resident card.
Spend one day every 6 month there
Be tax free
US tricks Some Private banks in Geneva do have the license to manage the assets of US persons and U.S citizens. However, do not think it is a way to avoid paying taxes in the US. Opening an account at an authorized Swiss Private banks is literally the same tax-wise as opening an account at Fidelity or at Bank of America in the US. The only difference is that you will avoid all the horror stories. Horror stories are all real by the way. In Switzerland, if you build a decent case and answer all the questions and corroborate your case in depth, you will manage to convince compliance officers beforehand. When the money eventually hits your account, it is actually available and not frozen. The IRS and FATCA require to file FBAR if an offshore account is open. However FBAR is a reporting requirement and does not have taxes related to holding an account outside the US. The taxes would be the same if the account was in the US. However penalties for non compliance with FBAR are very large. The tax liability management is actually performed through the management of the assets ( for exemple by maximizing long term capital gains and minimizing short term gains). The case for Porto Rico. Full disclaimer here. I am not encouraging this. Have not collaborated on such tax avoidance schemes. if you are interested I strongly encourage you to seek a tax advisor and get a legal opinion. I am not responsible for anything written below. I am not going to say much because I am so afraid of uncle Sam that I prefer to humbly pass the hot potato to pwc From here all it takes is a good advisor and some creativity to be tax free on your crypto wealth if you are a US person apparently. Please, please please don’t ask me more. And read the disclaimer again. Trust tricks Generally speaking I do not accept fringe fiscal situation because it puts me in a difficult situation to the banks I work with, and it is already difficult enough to defend a legit crypto case. Trust might be a way to optimize your fiscal situation. Belize. Bahamas. Seychelles. Panama, You name it. At the end of the day, what matters for Swiss Banks are the beneficial owner and the settlor. Get a legal opinion, get it done, and when you eventually knock at a private bank’s door, don’t say it was for fiscal avoidance you stupid ! You will get the door smashed upon you. Be smarter. It will work. My advice is just to have it done by a great tax specialist lawyer, even if it costs you some money, as the entity itself needs to be structured in a professional way. Remember that with trust you are dispossessing yourself off your wealth. Not something to be taken lightly. “Anonymous” cash out. Right. I think I am not going into this topic, neither expose the ways to get it done. Pm me for details. I already feel a bit uncomfortable with all the info I have provided. I am just going to mention many people fear that crypto exchange might become reporting entities soon, and rightly so. This might happen anyday. You have been warned. FYI, this only works for non-US and large cash out. The difference between traders an investors. Danmark, Holland and Germany all make a huge difference if you are a passive investor or if you are a trader. ICO is considered investing for instance and is not taxed, while trading might be considered as income and charged aggressively. I would try my best to protect you and put a focus on your investor profile whenever possible, so you don't have to pay 52% tax if you do not have to :D
C. The cash out itself So you have accumulated patiently a good amount of wealth. For some of us who have been involved in crypto since 2010, it took years. Remember when BTC was stuck at 200$ for months? I personally feel like it was yesterday. There is no way you screw up your wealth by cashing out in a hurry or with low security standards. Here is how the cash out takes should place.
Full cash out or partial cash out? People who have been sitting on crypto for long have grown an emotional and irrational link with their coins. They come to me and say, look, I have 50m in crypto but I would like to cash out 500k only. So first let me tell you that as a wealth manager my advice to you is to take some off the table. Doing a partial cash out is absolutely fine. The market is bullish. We are witnessing a redistribution of wealth at a global scale. Bitcoin is the real #occupywallstreet, and every one will discuss crypto at Xmas eve which will make the market even more supportive beginning 2018, especially with all hedge funds entering the scene. If you want to stay exposed to bitcoin and altcoins, and believe these techs will change the world, it’s just natural you want to keep some coins. In the meantime, if you have lived off pizzas over the last years, and have the means to now buy yourself an nice house and have an account at a private bank, then f***ing do it mate ! Buy physical gold with this account, buy real estate, have some cash at hands. Even though US dollar is worthless to your eyes, it’s good and convenient to have some. Also remember your wife deserves it ! And if you have no wife yet and you are socially awkward like the rest of us, then maybe cashing out partially will help your situation ;) What the Private Banks expect. Joke aside, it is important you understand something. If you come around in Zurich to open a bank account and partially cash out, just don’t expect Private Banks will make an exception for you if you are small. You can’t ask them to facilitate your cash out, buy a 1m apartment with the proceeds of the sale, and not leave anything on your current account. It won’t work. Sadly, under 5m you are considered small in private banking. The bank is ok to let you open an account, provided that your kyc and compliance file are validated, but they will also want you to become a client and leave some money there to invest. This might me despicable, but I am just explaining you their rules. If you want to cash out, you should sell enough to be comfortable and have some left. Also expect the account opening to last at least 3-4 week if everything goes well. You can't just open an account overnight. The cash out logistics. Cashing out 1m USD a day in bitcoin or more is not so hard. Let me just tell you this: Even if you get a Tier 4 account with Kraken and ask Alejandro there to raise your limit over $100k per day, Even if you have a bitfinex account and you are willing to expose your wealth there, Even if you have managed to pass all the crazy due diligence at Bitstamp, The amount should be fractioned to avoid risking your full wealth on exchange and getting slaughtered on the price by trading big quantities. Cashing out involves significant risks at all time. There is a security risk of compromising your keys, a counterparty risk, a fat finger risk. Let it be done by professionals. It is worth every single penny. Most importantly, there is a major difference between trading on an exchange and trading OTC. Even though it’s not publicly disclosed some exchange like Kraken do have OTC desks. Trading on an exchange for a large amount will weight on the prices. Bitcoin is a thin market. In my opinion over 30% of the coins are lost in translation forever. Selling $10m on an exchange in a day can weight on the prices more than you’d think. And if you trade on a exchange, everything is shown on record, and you might wipe out the prices because on exchanges like bitstamp or kraken ultimately your counterparties are retail investors and the market depth is not huge. It is a bit better on Bitfinex. It is way better to trade OTC. Accessing the institutional OTC market is not easy, and that is also the reason why you should ask a regulated financial intermediary if we are talking about huge amounts. Last point, always chose EUR as opposed to USD. EU correspondent banks won’t generally block institutional amounts. However we had the cases of USD funds frozen or delayed by weeks. Most well-known OTC desks are Cumberlandmining (ask for Lucas), Genesis (ask for Martin), Bitcoin Suisse AG (ask for Niklas), circletrade, B2C2, or Altcoinomy (ask for Olivier) Very very large whales can also set up escrow accounts for massive block trades. This world, where blocks over 30k BTC are exchanged between 2 parties would deserve a reddit thread of its own. Crazyness all around. Your options: DIY or going through a regulated financial intermediary. Execution trading is a job in itself. You have to be patient, be careful not to wipe out the order book and place limit orders, monitor the market intraday for spikes or opportunities. At big levels, for a large cash out that may take weeks, these kind of details will save you hundred thousands of dollars. I understand crypto holders are suspicious and may prefer to do it by themselves, but there are regulated entities who now offer the services. Besides, being a crypto millionaire is not a guarantee you will get institutional daily withdrawal limits at exchange. You might, but it will take you another round of KYC with them, and surprisingly this round might be even more aggressive that the ones at Private banks since exchange have gone under intense scrutiny by regulators lately. The fees for cashing out through a regulated financial intermediary to help you with your cash out should be around 1-2% flat on the nominal, not more. And for this price you should get the full package: execution/monitoring of the trades AND onboarding in a private bank. If you are asked more, you are being abused. Of course, you also have the option to do it yourself. It is a way more tedious and risky process. Compliance with the exchange, compliance with the private bank, trading BTC/fiat, monitoring the transfers…You will save some money but it will take you some time and stress. Further, if you approach a private bank directly, it will trigger a series of red flag to the banks. As I said in my previous post, they call a direct approach a “walk-in”. They will be more suspicious than if you were introduced by someone and won’t hesitate to show you high fees and load your portfolio with in-house products that earn more money to the banks than to you. Remember also most banks still do not understand crypto so you will have a lot of explanations to provide and you will have to start form scratch with them! The paradox of crypto millionaires Most of my clients who made their wealth through crypto all took massive amount of risks to end up where they are. However, most of them want their bank account to be managed with a low volatility fixed income capital preservation risk profile. This is a paradox I have a hard time to explain and I think it is mainly due to the fact that most are distrustful towards banks and financial markets in general. Many clients who have sold their crypto also have a cash-out blues in the first few months. This is a classic situation. The emotions involved in hodling for so long, the relief that everything has eventually gone well, the life-changing dynamics, the difficulties to find a new motivation in life…All these elements may trigger a post cash-out depression. It is another paradox of the crypto rich who has every card in his hand to be happy, but often feel a bit sad and lonely. Sometimes, even though it’s not my job, I had to do some psychological support. A lot of clients have also become my friends, because we have the same age and went through the same “ordeal”. First world problem I know… Remember, cashing out is not the end. It’s actually the beginning. Don’t look back, don’t regret. Cash out partially, because it does not make sense to cash out in full, regret it and want back in. relax. The race to cash out crypto billionaire and the concept of late exiter. The Winklevoss brothers are obviously the first of a series. There will be crypto billionaires. Many of them. At a certain level you can have a whole family office working for you to manage your assets and take care of your needs . However, let me tell you it’s is not because you made it so big that you should think you are a genius and know everything better than anyone. You should hire professionals to help you. Managing assets require some education around the investment vehicles and risk management strategies. Sorry guys but with all the respect I have for wallstreebet, AMD and YOLO stock picking, some discipline is necessary. The investors who have made money through crypto are generally early adopters. However I have started to see another profile popping up. They are not early adopters. They are late exiters. It is another way but just as efficient. Last week I met the first crypto millionaire I know who first bough bitcoin over 1000$. 55k invested at the beginning of this year. Late adopter & late exiter is a route that can lead to the million. Last remarks. I know banks, bankers, and FIAT currencies are so last century. I know some of you despise them and would like to have them burn to the ground. With compliance officers taking over the business, I would like to start the fire myself sometimes. I hope this extensive guide has helped some of you. I am around if you need more details. I love my job despite all my frustration towards the banking industry because it makes me meet interesting people on a daily basis. I am a crypto enthusiast myself, and I do think this tech is here to stay and will change the world. Banks will have to adapt big time. Things have started to change already; they understand the threat is real. I can feel the generational gap in Geneva, with all these old bankers who don’t get what’s going on. They glaze at the bitcoin chart on CNBC in disbelief and they start to get it. This bitcoin thing is not a joke. Deep inside, as an early adopter who also intends to be a late exiter, as a libertarian myself, it makes me smile with satisfaction. Cheers. @swisspb on telegram
Ritocoin - a 100% community driven project based on Ravencoin
tl:dr: Ritocoin is a code fork of the Ravencoin codebase and continues to track future Ravencoin developments. The project was launched to provide a more community-oriented blockchain with the same functionality as Ravencoin, without a corporate overseer, and with a more flexible model for community participation and development. It’s intention is to be a hacker’s playground for innovative ideas. Specifications Proof-of-Work Algorithm: X21S Block Time: 60 seconds POW Block Reward: Smooth curve down Community fund: 1% first year Difficulty Retargeting: DGW-180 Maximum Supply: 6 months: 993,521,892 RITO 1 year: 1,227,448,858 RITO 5 years: 1,762,210,058 RITO 10 years: 1,820,404,381 RITO 50 years: 2,030,907,256 RITO 100 years: 2,293,707,246 RITO Infinite: 10 RITO per block in perpetuity Pre-mine: None Masternodes: Researching for use case Asset layer: Was enabled at height 50,000 Links Website /ritocoin Explorer Github Whitepaper twitter [ANN] X21S This hashing algorithm was created specifically for Ritocoin, and was designed to resist FPGAs, ASICs, and NiceHash. It is X16S (16 algorithms shuffled and hashed),, followed by 5 additional hashing algorithms: haval256, tiger, lyra2, gost512, and sha256. The inclusion of lyra2 brings numerous advantages, making parallelization of the algorithm practically impossible, with each step relying on the previous step having already been computed. It is a “friendly” algorithm that makes GPUs produce much less heat and uses less electricity during mining. Take your time to learn more about us in the below story of Ritocoin... The spirit of Bitcoin continues to inspire, empower and enable people around the globe. Ten years later, just as it seemed Bitcoin was being defined by commercial agents and regulated governance, that same free and independent spirit imbued the Ravencoin community. In ten short months, however, 30% of the Ravencoin project’s net hash comes from NiceHash and the looming impact of the imminent FPGA mining cards and X16R bitstreams certainly promises to shake up the dream of this GPU miner’s darling. Ravencoin’s fair launch genuinely inspired our developers and supporters. We admire the way Ravencoin came out swinging — fighting for fairness, an honest distribution of coins and a place where GPU miners could thrive. The asset layer attracted many more miners and investors to the pools. Many Ritocoin enthusiasts came from the Ravencoin community, and continue their association with that project. The whole crypto ecosystem should appreciate the work begun by Ravencoin. Obviously they continue to inspire and motivate us to this day. It’s the reason we took action. We decided to start our own project which focuses upon at least two pillars of decentralized networks in the crypto space: community governance and a fair distribution of coins. It is a core belief throughout Ritocoin that in order to successfully develop and maintain this hacker’s playground — a place where a broad range of ideas could be tried and allowed to flourish — these two ideals must be allowed to drive and guide our community. This deep focus on community choices creates a project flexible enough to support most ideas, and agile enough to define new frontiers. A mining network’s distributed ledger is defined by its technology. Like many in the broader crypto-mining community, we value the GPU for its accessibility. These processors are available for purchase all around the world without any legal restrictions. GPUs are vastly more accessible for hobbyists and miners to acquire. They can be shipped nearly anywhere around the globe, a nice benefit to the popular secondary market which has sprung up much to the chagrin of PC gamers. More constraints exist for the ASIC and FPGA miner. Laws in some parts of the world restrict people from using or buying ASIC and FPGA mining hardware. This alone is directly in confrontation with Ritocoin’s core values of decentralized stewardship and sovereignty. The GPU, in essence, is like your voice. Anyone with the means of acquiring one GPU should be able to have their voice heard. ASIC and FPGA mining devalues the GPU miner’s voice and silos that coin’s network away from the small scale and personal mining operator. A truly community driven project means each stakeholder, regardless of size of contribution to the network’s net hash, has an opportunity to build, vote and direct. If you are already familiar with our website, discord or whitepaper, you are probably aware that masternodes had been proposed as a feature of the network from the beginning. This opened the door to ongoing discussions in the Ritocoin community regarding ● A masternode’s true purpose ● What benefit they provide to the project ● How the benefit is realized ● The collateral This discussion, governed entirely by stakeholders across the extended network yielded a defining moment for our vision of flexibility. We have not yet found the potential utility of masternodes, however, the conversation has not reached an extent to where we could abandon the idea. To quote one of our developers during this discussion on our Discord:
“Just want to give a reminder here that even though masternodes are on the roadmap, it is not set in stone. This coin belongs to the community and we will do what we as a community want to do. If we conclude that we want to take this coin a different direction than masternodes, then that is what we’ll do.” --traysi
We are all volunteers at Ritocoin. Our moderators and community leaders try to give immediate support to all users that require it. Contact us in Discord or Telegram, not only for support, but, proposing new ideas, revising old ones and just so you can find a place to get together and find people to hang out with. You are well within your rights to enjoy yourself at any given moment, and, should you feel so inclined to begin working with the team, we just so happen to be looking for ambitious individuals that see themselves as being part of a greater vision, are inspired by change, and inspired to be the change they want to see making things better in this world. Join us in a space where your ideas to build something great can become a reality. We are eager to know what you think is best for the future of Rito. What steps would you take to become more resilient, stronger, fair and decentralized? Because at the end of the day, like it or not, love it or leave it.. this is your coin, too. You can become a significant part of this project. We will help you further develop the role you wish to fill in the cryptocurrency space — influencer, developer, analyst, you name it. This is not a just-for-developer’s playground. We want the enthusiasts. We want the perplexed and the rabbit-hole divers. This is the coin for everyone who is trying to find their place on the path that Satoshi began unfolding in 2008 after the collapse of the housing market rippled out into the subsequent crash of global markets. That’s why we have Bitcoin, remember? Be your own bank. This is why Satoshi and Bitcoin.org kept their software open source. It’s up to us to keep the torch ablaze. Community funds For the first year, about 1% of mined coins are set aside into a developers fund that is used to provide bounties to the community developers who make substantial development contributions to the Ritocoin ecosystem. We have already paid out numerous bounties for important work that has already benefits Ritocoin in substantial ways. We also have another donation-driven community fund that has recently been put together for the purposes of doing fun contests and things like that. Cooperation and collaborations We have discovered a number of fatal flaws in the original Ravencoin codebase and worked with the Ravencoin developers to get those fixed in both Ritocoin and Ravencoin. This work has benefitted Ravencoin in numerous ways and we look forward to a long time of collaboration and cooperation between us and them. Many members of the Safecoin team are also in our discord group, and have collaborated with us in shaping the future decisions of Ritocoin. We have several thousand members in our group and they represent all walks of cryptocurrency life. We invite all coin developers, miners and enthusiasts to join our discord and be a part of this coin that truly belongs entirely to the community. Block reward A couple weeks ago we met for a scheduled meeting in our discord group and had a lengthy conversation about the block reward. Our block reward started at 5,000 RITO per block (every 60 seconds) just like Ravencoin. This extremely high number of coins coupled with the high profitability of mining led to unforeseen consequences with pools auto-exchanging the coin into bitcoin. This dumping by non-community miners had a very negative impact on the community sentiment and morale, as we watched the exchange price plunge. We looked at other coins and realized that this fate has befell many other coins with high block rewards. Following much discussion, we decided to change the reward structure. Starting around March 19th the block rewards will start to slowly go down in a curve until it reaches 1,000. Then the reduction will be even more slowed down with block rewards exponentially dropping at periodic intervals. We have posted charts on our website that shows what the long-term effects of our reward reducing algorithms will be. As a miner, the next 2 months will be a great time to mine and hold, while the block reward is still fairly high. We encourage all miners and cryptocurrency enthusiasts to take advantage of the current favourable block reward and build a nice holding for yourself. Then join the community and be a part of the fun we’re having with this project. This post was prepared by a collaboration of multiple Ritocoin members and was posted to reddit by the core developer Trevali, who posts to reddit under the ritocoin username and will be very happy to answer any questions anybody may have about our project. Traysi (well known in the Ravencoin community) is also an active Ritocoin developer and may come to this thread if needed. We welcome any questions from any of you regarding our project!
Please find below the slack log for discussion relating AIP19 as presented here https://github.com/ArkEcosystem/AIPs/issues/26 I will try to write a blog post explaining in further detail the AIP19 for non-technical individuals however due to current obligations it will be delayed and finish some time in September. ------------------------------------------------------------------------------------------ Matthew_DC [3:43 PM] I think AIP 18/19 has some merit and I had a chance to look at it before he published. He gave Francois and I a chance to review the idea as he was hesitant to post it publicly in fear that a competitor might steal it, which I can appreciate. There are a lot of things in there that I find interesting. The proposal in AIP18 makes a lot of sense and would solidify the price discovery and help create a streamlined system for the wallet for token swaps. We can make it intuitive and easy to use. The AIP19 proposal is where I think we all need to slow down and seriously consider both the impact it would have on ARK and what ARK is trying to accomplish, as well as the complications that might arise from the system. For starters, AIP19 turns ARK into a decentralized delegate services network. In other words, Consensus-As-A-Service (CAAS). This is something we actually discussed at Crypti and had a model for, which I believe Lisk is still planning on implementing. That model looks very similar to what Komodo has already tried to implement in regards to storing data on the main chain (hashes) relevant to the sidechain as an added security layer. I'm not sure that solution is the best model and I think there is a major problem that needs solved, which AIP19 is partially trying to address. That problem is the security of early stage bridge chains who have yet to build a strong following. Finding a way to use the "hash power", or in this case, vote based security, of the main chain, is something I've been very interested in and would love to find a proper solution for. What needs to be considered is the impact that the system has on up-time and reliability of the network (for starters). Let's say I'm an attacker and I want to just really hose up the works. If I create a script that moves large chunks of voting wait all over the place consistently for multiple blocks or rounds, how will that impact the delegates assignments, will they all switch to the appropriate network in time, will blocks be missed as the transition occurs, etc. Consider that every 1-2 cent change in price could drastically move delegates between networks and if you couple that with voter swings, you are looking at a lot of moving parts. For all of that complexity, what added security do you really gain? New bridge chains will still be very low on the list for delegates due to price which makes them easy targets. However, for an attacker, it would potentially randomize the order of delegates to a point where it would make it very hard to put yourself in position to take over a network which would add a lot of difficulty to an attack. To try and gauge exactly the amount of votes, the price of the token, and what 27 spots you would need to control would be almost impossible. The complicated part would be smoothing out the delegate transitions in a way that doesn't cause total constant chaos among delegates as votes, prices, and registrations are constantly changing. Imagine 5 years from now if there are 100 bridge chains, some with 101 delegates, some with 501, some with 51, etc. What if someone comes in and registers a network with 1,000,000,000 delegates, does it shut down the system? How does it react? There are a lot of things like that which have to be considered before you can move forward with something like this. I'm not saying it's a bad idea and I think it's a really intriguing use of the system, especially for DPoS, but there is a lot that has to be mapped out. You can't just start coding it and hope for the best. cj (azek) [3:55 PM] @Matthew_DC ++ Matthew_DC [4:12 PM] On a side note, I think that the CAAS model fits directly with the desire to have the ARK core technology power startups and enterprises blockchain solutions while providing a strong avenue for the public decentralized applications to take hold and grow. By keying their consensus and security into one main chain, it does provide added security and allow for a use case other than "currency" for the main net, but it does do it at the cost of some decentralization. Part of why ARK is being developed to allow bridged but separate chains is to avoid one central point of failure (the point of all of this). By making so many systems globally dependent on the ARK main chain for their consensus mechanism to function, you do sacrifice decentralization for security in this case. If the ARK network were to end up with a critical bug or suffer from some kind of attack, etc, it could cause all subsequent reliant network to stop forging as well. This is something we are always thinking about. vdeurzen (blockport) [4:20 PM] joined #trading_altcoins. bangomatic [4:23 PM] order books finally on Delta. :allthethings: Jarunik [4:38 PM] For AIP18 I have my doubts concerning price finding. Free market will likely beat a stable coin formula. I would rather see each token valued individually. Didn‘t analyse the formulas in detail but looks like a weak point. A market based pricing would be more interesting. Blazeron [4:39 PM] why wouldn't it just use the market value automatically? Jarunik [4:39 PM] Because there is none Check persona as example Whats the Ark-Prs market rate? tk0n (thefoundry) [4:43 PM] price is also susceptible to manipulation bangomatic [4:43 PM] polymath making some BIG announcements today. www.twitter.com/polymathnetwork Blazeron [4:48 PM] hmm true, it wouldn't work with very small tokens that aren't widely listed Matthew_DC [5:11 PM] That's the same problem you have right now with any exchange. There are hundreds of tokens you could spike by 200% in 5 mins for like $200 The point isn't whether or not all of his math is perfect or whether or not his formula is even the one that gets used, its about whether or not it is a good idea to create "liquidity gates" for atomic swaps and separately, should they be used for price discovery even if an AIP isn't taken and implemented wholesale, it may provide value through some of the ideas involved Obviously, the system he proposes in AIP19 doesn't work without proper price discovery and some kind of oracle Keep in mind, he specifically proposes a stable coin formula as an example as well as an exponential priced ICO token wherein the creator would be using it as a system to fund an ICO, but that doesn't mean you wouldn't have free market price discovery through some form of order book function. pieface [5:19 PM] Would AIP19 deem the ArkVM chain as not needed anymore? Matthew_DC [5:20 PM] To avoid major shuffling issues it almost makes sense to have a superblock either every round or x number of rounds with a longer block time to allow the delegate system to perform averages on price/position of bridge chains for delegate assignment and allow a longer period of adjustment pieface [5:20 PM] One of the benefits of the ArkVM chain is that you don't have to find delegates to run your chain, AIP19 sounds like it solves the same problem in a different way Matthew_DC [5:21 PM] It would be a completely separate consideration from VM and VM would still be something we want/need Jarunik [5:22 PM] If we need super blocks ... then it will slow down the mainnet the more sidechains we have. Wouldn't it be better to use decentralized ACES? Matthew_DC [5:25 PM] You could probably do it with 1 longer block at the end of each round to allow time for the shuffling. So one longer block every 7 mins or so. That's just a random thought and is something that would have to be tested. In some sense, this system IS ACES, just upgraded to take into account the added features of v2/AIP11 like webhooks, multi-sig, time locks, etc just re-organized into a dex with some form of order book and then used for price discovery Jarunik [5:26 PM] yes ... but it should run outside of the Ark mainnet and just connect to it Matthew_DC [5:26 PM] Well, like I said above, in his proposal, you exchange decentralization for security/valuation Which is one of the considerations (edited) It's the same argument we've been having all along brodinson [5:27 PM] I'd like some extra security and valuation :evil: Matthew_DC [5:27 PM] Do you potentially sacrifice principal for token valuation? Security would be for bridge chains Jarunik [5:28 PM] it will increase the risk for the main chain ... brodinson [5:28 PM] That's fine too right Matthew_DC [5:28 PM] At some point, you have to ask are you just recreating the current financial system with you as the central bank brodinson [5:28 PM] I mean ark being an ecosystem and all Want all that good security stuffs for the bridgechains Jarunik [5:29 PM] I am against Ark being the "master" chain. :slightly_smiling_face: brodinson [5:29 PM] Also extra reasons for a higher valuation can only attract more investors and thus more attention. Matthew_DC [5:29 PM] The more bridge chains that rely on the ARK main chain for security and in order for their applications to work, the more you risk incentivizing collusion and extortion by the delegates and increase their personal power over people's money (edited) Jarunik [5:30 PM] If you do something directly for "high valuation" ... then you will take that profit from someone else ... Who will lose ? brodinson [5:30 PM] Find countermeasures to possible collusion? Jarunik [5:30 PM] Unlikely to work. brodinson [5:30 PM] Maybe some random factors? Jarunik [5:30 PM] Power corrupts Matthew_DC [5:30 PM] I mean, at the end of the day, what he is suggesting, and what AIP19 boils down to, is turning the ARK Main Chain into a decentralized Delegate Marketplace for ARK Bridge Chains. It's a pivot for the purpose of the main chain for sure. Jarunik [5:31 PM] And my point is that a bridgechain not good enough to create a delegate incentive and market is not good enough anyway. Matthew_DC [5:32 PM] The delegate marketplace was always meant to be a completely open free market system where people could find delegates for their bridge chains and make offers/promote their chains, but never force tie-in to the ARK main chain and 100% exclusively rely on it for security and validation. Jarunik [5:32 PM] If the bridge chain does offer utility and functionality ... then it will be no problem to pay the delegates. Matthew_DC [5:33 PM] He doesn't shy away from it in the proposal and outright says that a large motivating factor for the proposal is to create valuation for the ARK token and a use case. Jarunik [5:33 PM] So this kind of ark mainchain market place sounds like a concept to push up "unhealthy" sidechains for higher valuation (similar like shittokens of eth) spghtzzz(ark.party is not a website) [5:33 PM] ARK already has those Matthew_DC [5:34 PM] If it were me personally and only me and I wasn't relying on the ARK token to make me rich and I could make decisions based on my fundamentals and what was right in staying true to the nature of ARK and decentralization, I would whole heartedly say no way. But the delegates decide what happens to the network in the end, not me. vela_nova [5:34 PM] No it sound like a way to incentivize adoption Matthew_DC [5:34 PM] There are lots of driving forces and for many, that driving force is token valuation, whether we like it or not. Having every delegate for every bridge chain be required to register and receive payment on the main chain isn't really adoption in the way we want it. (edited) spghtzzz(ark.party is not a website) [5:35 PM] Marketplaces seem like a good idea, but I think ARKVM will probably stop people from having to delegate every single function they want to create, using tokens and leveraging someone elses blockchain as a service. Jarunik [5:36 PM] we already have a delegate market place ... if you offer good enough incentives and a convincing project ... easy to find dpos delegates. pieface [5:38 PM] Couldn't there be a compromise somewhere? Continue with the Ark Mainchain like now. An ArkVM chain which the Arkcoin is pegged to An ArkDM (Ark delegate marketplace) chain which the Ark coin is also pegged to. (edited) Matthew_DC [5:38 PM] The truth is, a large part of the valuation and use of the token relies on our ability to create easy swapping mechanisms for ARK->Bridge Chains so that we can incorporate easy, simple to use, GUI driven interaction with bridge chains without anyone ever needing to own the other token. That involves ACES or something like AIP18, it involves creating multi-sig and time lock style transactions, that allow the network to use something similar to liquidity gates (for the sake of argument) to allow the ARK wallet or application store to carry out the bridge chain functions with the ARK balance, invisible to the user. @pieface There is nothing to stop someone from creating any possible use case, whether that be a delegate marketplace or 3 or 4 VM focused chains with different flavors and incentives, etc vela_nova [5:44 PM] You can’t expect potential clients to identify a use case, the actors involved, and where that use case starts and ends without some kind of built in framework and enough momentum/adoption to ensure dependability. (edited) Matthew_DC [5:45 PM] This is the tricky part of decentralized business and a decentralized world, you have to come to consensus. It's why there are so many forks out there. If we asked every delegate, odds are it would be split on AIP19 If a potential client hasn't identified a use case then how are they a client? We absolutely can expect a potential client to identify a use case or they have no business. That's step #1. As far as finding delegates, we had always planned a marketplace, just not tied to the ARK main chain in the way described in AIP19. As far as examples and frameworks, we are building out new documentation and have some partners who will be helping us do just that. vela_nova [5:55 PM] It sounds like you’re relying too much on an audience that has already accepted ark as a solution to their needs. That’s problematic when it comes strengthening the ecosystem and encouraging adoption. I look forward to this new documentation though (edited) zebedee [5:57 PM] lol Lisk up 30% , mainnet pump vela_nova [6:02 PM] :shrugs: vela_nova [6:15 PM] So the lisk community is convinced that their resources are dedicated to a productive cause. Maybe we could use some positive speculation too for a change. A little shade is one thing, but y’all are some walking palm trees :palm_tree: up in here. This culture of scrutinizing lisk or any other project but the one one we’re here for is ironically weakening the ark. SuperCool (The Golden Horde) [6:16 PM] The we already have a market place argument is an inside argument imo. From the ‘outside’ aip19 would sound really nice. While there is some truth in the ‘shitcoin argument’ I feel it almost the same as the ‘bitcoin is used by criminals’ argument Djenny Floro (Ark Tribe) [6:16 PM] What's the golden horde ? SuperCool (The Golden Horde) [6:17 PM] Our marketing failed :cripes: Djenny Floro (Ark Tribe) [6:17 PM] If it was on Reddit, I'm sorry. I don't follow the Reddit much because of the time Ark Tribe takes. tk0n (thefoundry) [6:17 PM] you have marketing? SuperCool (The Golden Horde) [6:18 PM] @Djenny Floro (Ark Tribe) Colby made a really nice introduction: https://medium.com/the-golden-horde-blog/the-golden-horde-announces-ark-delegation-merchandise-business-e3f1a4162a60?source=linkShare-b6b32376193e-1534436290 Medium The Golden Horde Announces Ark Delegation & Merchandise Business After being in the Ark community for more than a year, we have seen a lot of great people coming together and discussing all things… Reading time 6 min read Jul 26th https://cdn-images-1.medium.com/max/1200/1*HOBm_aB5iJ4XUCV5y9Ls7g.png SuperCool (The Golden Horde) [6:19 PM] replied to a thread: This is really offensive, we should remove tk0n vela_nova [6:20 PM] Ya little too much behind closed doors for my taste. SuperCool (The Golden Horde) The we already have a market place argument is an inside argument imo. From the ‘outside’ aip19 would sound really nice. While there is some truth in the ‘shitcoin argument’ I feel it almost the same as the ‘bitcoin is used by criminals’ argument Posted in #trading_altcoinsToday at 6:16 PM Highjhacker (The Golden Horde) [6:20 PM] replied to a thread: DELETE :angry: arkenstone [6:39 PM] Slack outage This message was deleted. tk0n (thefoundry) [6:41 PM] You can take away my GIFs but you can never take away my freedom :allthethings: SuperCool (The Golden Horde) This is really offensive, we should remove tk0n From a thread in #trading_altcoinsToday at 6:19 PM arkenstone [6:43 PM] This was strange ..was on officia slack .. they said servers were down ..was getting error messages when sending text .. SuperCool (The Golden Horde) [6:44 PM] Yeah slack was down for me aswell I wanted to ad to my argument that aip19 or a similar solution would make ‘push click blockchain’ a real thing Msk [6:55 PM] joined #trading_altcoins. Matthew_DC [6:58 PM] I had a reply but couldn't post it and now I forgot :shrugs: SuperCool (The Golden Horde) [7:04 PM] Haha I also wrote that a lot smarter the first time mak [7:14 PM] Thanks for the feedback @Matthew_DC. Some of the points you mention up have been brought up in the last week by @skeuo as well. Such as someone changing votes frequently in order to mess with the system and someone creating a chain with 10,000 delegates. For the first problem I suggested that vote recount could happen every few hours instead of every block but it's possible there is a better way to handle this. In the second case I think a bridgechain with so many delegates wouldn't be able to sustain any significant token value since the blockreward would be diminished so much or would be unable to pay out because the liquidity gate ran out of ark. I agree these are technical hurdles related to implementation that we need to consider but I don't see them as critical issues. Regarding your last point i.e someone breaking ark main chain would break the entire ecosystem I acknowledge that it is a concern. Which is why the token economic incentive is useful to make it more difficult to execute a 51% attack on the main chain. On the other hand since the bridgechains depend on the main chain's security for theirs, it makes the bridge chains more secure. In the end I see this as a mechanism design problem where the best approaches can be proven mathematically using game theory and if there's a better way to achieve the same effects then I'd be glad to check them out. Matthew_DC [7:18 PM] You also have to consider the consensus mechanisms and individual components and modules used by bridge chains. A given bridge chain may require a specific set of modules for their applications purpose. In that sense, their node software may be vastly different for providing consensus when compared to the ARK core model. In this case, let's say delegates ABC are providing consensus for Bridge Chain X and after vote re-shuffle, ABC are now required to provide consensus for the use case of Bridge Chain Y. This may require a completely different software package for the node and you have to determine a model for those delegates to not just re-shuffle to new peers for consensus, but also potentially download and implement new modules or entire new packages in order to provide consensus for the given bridge chain to which they are assigned. (edited) Jarunik [7:19 PM] Did anyone check the sidechain forging from mainchain that blockpool is developing? Matthew_DC [7:20 PM] I haven't mike [7:20 PM] I like the proposals but prefer pie's approach of implementing them on bridged chains. The main chain needs to be simple and reliable like TCP/IP. We then build on top of in modular fashion, like adding email and http on top of TCP/IP instead of adding them to it. Djenny Floro (Ark Tribe) [7:23 PM] @mike the point was to make Ark the reward system, if they're on the bridged chain how would they receive Ark as the token reward for their forging chain? It was also meant as an incensitive for non-forging node, as for now, they're running a node for free. Matthew_DC [7:24 PM] Maybe instead you do a dual voting system that somehow ties into a core delegate market network or the ARK Main Chain that allows for voting on a given bridge chain using a bridge chain ID# and Delegate# and every ARK accounts gets 1 vote per bridge chain and then that holds 60% weight and the bridge chain votes hold 40% and the bridge chain has a mechanism built into their node through a module that pulls votes from main net So you provide additional security without the main net delegates providing consensus so packages aren't an issue and it's not as susceptible to being completely taken down by ark main net going down as a secondary voting system exists (bridge chain votes) (edited) mak [7:25 PM] That was also one of the suggestions that @skeuo came up with but from what I could work up it would have adverse effects on scaling since all main chain delegates now need to have a full node running for every bridgechain in order to know bridgechain only delegates (edited) However if we could provide hard SPV guarantees then maybe it's possible Matthew_DC [7:27 PM] OK, no need to map that out further I think you know what I'm saying on that one and it sounds like it was mentioned. Well, how do you trust any values from any network truly. If you want to vote on a bridge chain, then your wallet has to connect to a relay or node on that network through the same way we do now on ARK no need to download the entire chain necessarily goldenpepe [7:28 PM] How does one provide SPV guarantees in dpos? mak [7:30 PM] the block headers leading up to the required transaction are provided though I'm not sure if the chance of correctness in DPoS is the same as in PoW (edited) Matthew_DC [7:30 PM] Delegates on the bridge chain could still convert and payout forging rewards to main net voters with a little work to the scripts JayCrypto [7:32 PM] You guys need a new white paper Matthew_DC [7:33 PM] Way to break the flow mak [7:34 PM] the main issue IMO would be with main chain delegates accepting the threshold signatures if some of the delegates have been selected only on the bridgechain then the main chain can't know for certain about them without SPV or a fullnode and like I mentioned I don't have the expertise to figure out how reliable SPV is in a DPoS system JayCrypto [7:35 PM] Why does it matter Why can't the nodes run their own delegates (edited) mak [7:36 PM] the bridge chain could either go 100% delegates voted on their own chain or 100% delegates voted on main chain but not a mixture of both JayCrypto [7:37 PM] Why mak [7:37 PM] it would require main chain delegates to run full nodes for all bridgechains not scalable you run into the same situation that ethereum has currently JayCrypto [7:41 PM] I'm not a tech person but I always envisioned ark as bridge chains not connected to main chain but able to communicate with them through arkVM or some aces module. I never thought the bridge chains would need the security of ark. As for ICO, I was under the impression that through arkVM or aces, companies can raise money through ark/Eth/btc... And eventually some arkVM Dex would be available to trade between tokens Matthew_DC [7:41 PM] Maybe I'm being naive here, but why does the main chain care? It's up to the bridge chain to properly implement the dual voting for the added security and to require voting from main net to impact their voting mechanism. Main net should just store a vote value. If it's 60/40 main chain voting to bridge chain voting to determine delegates, then you still have a ton of added security. IF the bridge chain isn't properly implementing it, then people should consider whether or not they really want to put their money into the token/bridge chain. It would require the bridge chain delegates run an ARK node but that's better for us and creates a larger ARK main network by adding more relays. Sorry, maybe I'm missing something and I'm just thinking out loud while doing a bunch of other stuff mak [7:42 PM] main chain needs to approve/disapprove remote liquidity gate transactions based on it's knowledge of current bridgechain delegates Matthew_DC [7:42 PM] I'm not talking about the liquidity gate right now mak [7:42 PM] can't have AIP18 working without it Matthew_DC [7:42 PM] I'm talking about dual voting chains for added security and then we don't need price discovery for vote shuffles JayCrypto [7:43 PM] What's a liquidity gate mak [7:43 PM] @JayCrypto please read the AIP 18 :slightly_smiling_face: https://github.com/ArkEcosystem/AIPs/issues/25 GitHub AIP 18: On chain price discovery using liquidity gates · Issue #25 · ArkEcosystem/AIPs AIP: 18 Title: Token price discovery and creating high liquidity decentralized exchange in the Ark ecosystem using instant crosschain atomic swaps Authors: Moazzam Abdullah Khan Status: Draft Type:... Matthew_DC [7:44 PM] and it provides utility because the voting from main chain provides security to side chain and also potentially if main chain accounts get 1 vote on every bridge chain it provides for additional forging rewards exponentially as the network grows but without adding a bunch of complex activity on the main chain just more voting transactions really mak [7:44 PM] We could make it so that the bridgechain only delegates aren't part of the k-threshold signature for the liquidity gate that way it would work Matthew_DC [7:45 PM] ark tokens wouldn't dilute bridge chain circulation as they aren't actual tokens, but they provide for voting to expand capability and security of bridge chain through their use mak [7:45 PM] but then those delegates are 2nd class delegates that don't share the full responsibility Matthew_DC [7:45 PM] and voters on main chain could be paid out from converted forging rewards Aren't they though? ARK main net provides 100% of security of its main chain and 60% of all bridge chains that implement, bridge chains hold 40% of responsibility which is reasonable but allows for much more expensive 51% attacks if main net votes are being used on bridge chains providing added security for new chains just spinning up mak [7:47 PM] how do you propose we create the threshold signatures to control liquidity gates when the delegates are split like this? Maybe I'm missing something here Matthew_DC [7:47 PM] I'm not concerned at all with liquidity gates right now I'm talking about a system in which bridge chains get added security, main chain gets added utility, by adding very little to main chain bloat and using vendor field then you are back to the idea of just having a decentralized exchange for swaps, atomic swaps, and traditional methods of moving funds between for that matter, any DPoS chain could tie in to the main chain for added security using that method by registering a chain and allowing voting mak [7:49 PM] Let me ask you this then. Do you agree that the bridgechain's delegates should be responsible for handling it's liquidity gate? You have to keep in mind there are potentially billions of dollars worth of tokens stored in them. I think that delegates should be responsible for it because the community trusted them with their votes. Matthew_DC [7:50 PM] just create an atomic swap marketplace mak [7:51 PM] can't have price discovery without liquidity gates though. So there would be no rank ladder to figure out delegate-bridgechain match Matthew_DC [7:51 PM] no ladder necessary no convoluted hot swapping delegates main chain accounts choose who they want to vote for and can register 1 vote per bridge chain mak [7:52 PM] well then you have the same issue of delegates speculating on future token price and negotiating with team to become a delegate too much social friction Matthew_DC [7:53 PM] I disagree. People said our version of DPoS wouldn't work because of social this and that and bribes and blah blah Delegates can't negotiate with the team for votes if the main chain votes outweigh the bridge chain funds 60/40 mak [7:54 PM] Ohh I think it works. Just that there is a lot of unnecessary headache involved which can be taken out completely. (edited) JayCrypto [7:54 PM] @Matthew_DC are you saying that ark holders can vote on bridhechain delegates even though they have no bridhechain tokens? Matthew_DC [7:54 PM] you are creating checks and balances on manipulation by the team in a sense @JayCrypto yes, as an added security measure for the bridge chain to avoid 51% attacks in their infant stages you would essentially have to take over ARK main chain, plus a % of bridge chain tokens to gain control JayCrypto [7:55 PM] Or you could issue 1 trillion of your own tokens Is there a yes no option for this Matthew_DC [7:56 PM] It doesn't matter if % is 60/40 in delegate appointment 60% of weight from ARK main net and 40% from bridge chain net voting mak [7:56 PM] "you are creating checks and balances on manipulation by the team in a sense" I disagree with that assessment. I am creating a decentralized protocol that manages the financial layer across multiple chains. The team should only have to worry about their product and not about convincing delegates to join them by offering rewards outside of the blockrewards. Matthew_DC [7:56 PM] so no matter how many tokens you make, it still holds in the calculation They aren't offering outside rewards of any kind JayCrypto [7:57 PM] Is there a yes no option for this Cos I wouldn't want it Matthew_DC [7:57 PM] They build their product, delegates need to worry about convincing people to vote for them yes or no option for what? mike [7:57 PM] Implementing AIP18 and 19 on a bridge chain would make a lot of sense. It can operate with a 2 way peg to ark even, so delegate rewards would be the same, and convertible to Ark, or let the market decide the conversion rate, or use a liquidity gate. Many of the same delegates would operate on it, as has been the case with Persona. mak [7:57 PM] Eventually it's going to happen. Why would a delegate want to run the 100th chain in the ark ecosystem when it's expected market cap would never reach a million dollars. JayCrypto [7:58 PM] For this 60 034'3!5 thing Matthew_DC [7:58 PM] Why would anyone run as a delegate on any network JayCrypto [7:58 PM] Percent Matthew_DC [7:58 PM] at some point the team has to do some form of work Crypto needs to get away from this entitlement stage mak [7:58 PM] @mike it could be done that way for convenience but it's functionally equivalent to having the voting on main ark chain. Matthew_DC [7:58 PM] if your product is stupid and no one believes it will ever have value and you aren't making any progress or building anything then your network SHOULD die mike [7:59 PM] also, Rob has set up multiple chains to run on the same servers, so lower volume chains can be run very cost effectively. Djenny Floro (Ark Tribe) [8:00 PM] But then again, even with a great product, starting isn't always easy, so this marketplace of delegate could enable great project effectively. mike [8:00 PM] yes, mainchain voting could be mirrored over to the bridged aip19 chain. Djenny Floro (Ark Tribe) [8:00 PM] It would reduce risks for delegates too when they actually help a starting project, before they decide if they will run a full delegate on the chain or not. Matthew_DC [8:01 PM] AIP19 doesn't solve the "I don't want to be a delegate on a useless network" problem either why would someone sit in spots 1,000-2,000 and run a node at a loss? same problem mike [8:01 PM] i've never seen a new project having problems recruiting delegates, but they do sometimes have a problem retaining them if interest in the project fades due to failure to execute. Djenny Floro (Ark Tribe) [8:02 PM] @mike but so far there isn't many projects. mak [8:02 PM] I think you misunderstood my point @Matthew_DC. I think delegates are service providers that get paid to ensure decentralization to your bridgechain. They may or may not provide additional services to remain competitive but that's irrelevant for now. What I'm saying is that we can streamline the back and forth that is required currently to get delegates and keep them running (look at KAPU). Djenny Floro (Ark Tribe) [8:02 PM] When the number multiplies, there will be much more to chose from, and this might become another kind of trouble. mak [8:03 PM] However if you don't agree with that perspective then that's fine. Someone will eventually come in and implement AIP19 on their forked chain and we will let the market decide if it's useful or not. vela_nova [8:03 PM] Dunno ark the product can have everything but a driving purpose and still fail economically Matthew_DC [8:03 PM] You just need a central place for delegates to market themselves and their services and for projects to find them Master [8:03 PM] What’s the debate :eyes: vela_nova [8:03 PM] That is why I like what mak is getting at Matthew_DC [8:03 PM] You can do that without massive changes to the ARK Main net JayCrypto [8:03 PM] I'm just shocked that ark bridgechains have to use ark main chain delegates Jarunik [8:04 PM] A normal website is enough as delegate market place. I would have to run different servers for different chains anyway ... no need to integrate delegate operation into one mainchain. Matthew_DC [8:04 PM] And I agree the market should decide so you won't find any argument there. I would love to see multiple models challenge one another because in the end it makes the winner much stronger Jarunik [8:05 PM] More delegate tools that come out of the box and are easy to port over would help though.. :wink: Matthew_DC [8:05 PM] but anyone struggling to find delegates right now, it is most likely because their idea just sucks Jarunik [8:06 PM] Let's first have a good and stable payment solution for all bridge chains without the need for every delegate to code some script himself ... will already make delegate recruitement easier. Matthew_DC [8:06 PM] That's not going to happen. Delegate payouts won't be coded into the network itself by us at any point. Jarunik [8:06 PM] Things like that are much easier to implement and much less invasive. I didn't say that ... Brian already made a good plugin. Matthew_DC [8:07 PM] That I'm fine with Djenny Floro (Ark Tribe) [8:07 PM] @Jarunik something like that implemented in the Ark Commander? Matthew_DC [8:07 PM] but no baking it into the network core itself Jarunik [8:07 PM] If that becomes well tested and easy to use ... will help all bridge chains Matthew_DC [8:07 PM] for previously stated reasons Jarunik [8:07 PM] i don't want anything in the core :stuck_out_tongue: i love the bare bone approach of v2 Matthew_DC [8:07 PM] shit guys, I'm really enjoying this but I was supposed to leave 7 minutes ago to take my kids somewhere try to capture some of the convo if you can and post a pastebin link in the github maybe just for the sake of saving it Jarunik [8:08 PM] complex stuff tends to fail too easily mak [8:08 PM] have fun :slightly_smiling_face: I think I've laid out all of my points. It's upto the delegates to decide if the idea holds merit and should be implemented. JayCrypto [8:09 PM] Is this 60/40 thing a slider which new bridgechains can use @Matthew_DC spghtzzz(ark.party is not a website) [8:09 PM] I always thought the ArkVM was meant to address this, if a person who is starting a new bridge does not **need** to change any node code, or **want** to run any delegates they can just create a token. Perhaps I am wrong though. mike [8:09 PM] i think implementing aip19 on a forked chain is best approach, and let market decide. i think there are some very good ideas to try in aip18 and 19, which is the advantage of ark's modular approach. ideas like this can be tried without risking the main chain, or having to hardfork it to add them in. By allowing a token swap or doing an airdrop, ark holders can have a stake in its success if it really does take off. mak [1 hour ago] If there's a 1:1 peg with ark on the new chain then there's no economic incentive for people to hold the new chain. However it will split the votes so it would be easier to attack the new network that's hosting the bridgechain delegate voting system. mak [1 hour ago] So if we want to experiment with it then we can't have the peg there. mike [1 hour ago] so you can mirror the voting from the main chain, just ignore votes for delegates that aren't running on the bridged chain. mak [1 hour ago] At that point is it a different chain anymore?
There have been several questions regarding how Decred makes minority forked coins, in the sense of Ethereum Classic and Bitcoin Gold, extremely difficult without majority stakeholder approval, and, for all intents and purposes, impossible without also destroying the hybrid nature and security properties of the system in the process. In order to try and explain why this is the case, the following is an analysis that first describes the important aspects of the system as they relate to this topic and then walks through the process of what would happen in a fork attempt under the worst case scenario.
The Proof-of-Stake (PoS) system works by locking up chunks of coins into what is called a ticket. These tickets function as the fundamental building block which allows stakeholders to participate in governance. Once acquired, all tickets are placed into a pool of live tickets after a maturity period. This pool is known as the live ticket pool and has a target size of 40960, but it can grow larger or shrink as tickets are added and removed throughout the course of operation, and the ticket price (stake difficulty) is adjusted, per supply and demand, to try to maintain that target pool size. This is covered more in depth in DCP0001 for readers who want a more thorough treatment. The consensus rules enforce a ticket selection algorithm that works to ensure that ticket selection is both random and impossible for miners to manipulate. It achieves this by deterministically and pseudorandomly selecting 5 tickets from the aforementioned live ticket pool which are eligible to vote on the previous block and that at least 3 of them must be included. The subsidy is reduced if only 3 or 4 votes are included, by 20% and 40%, respectively, in order to discourage miners from ignoring votes and otherwise attempting to game the system. A detailed treatment of the theory behind each of these parameters is beyond the scope of this post, however, it primarily has to do with protection against various adversarial situations. Further, the deterministic pseudorandom ticket selection process is primarily based on seeding it with the hash of the block it's voting on. This implies that, if you're building, say block 100000, on top of block 99999 (hash 00000000000000dab92a8a0c0e706eb74115f0f373669c01ffb4882f9555f494), the chosen tickets are known to every other full node on the network and can't be changed without going back to find a new solution to block 99999 such that it has a different hash (say 00000000000004289d9a7b0f7a332fb60a1c221faae89a107ce3abbd186c386c), which in turn will cause a new set of 5 tickets to be selected for voting eligibility. It is also important to note that stakeholders must be present on a given chain fork at the time of block creation in order to cast their vote when their associated ticket is selected. The act of acquiring a ticket does not mean it automatically votes. This distinction is key because it means that the ticket pool on a minority fork is largely comprised of non-voting tickets which is why the minority chain is unable to continue.
Scenario, Assumptions, and Methodology
With all of that in mind, let's walk through an attempt to create a minority fork that the majority stakeholders don't agree with. Let's also assume that both sides of the attempted fork have equal hash power (so 50% hash power on each fork). Given that a successful vote requires 75% stakeholder approval, in the worst case, 75% of the stakeholders are on the majority chain, while 25% are on the minority chain. Further, let's assume the most recent block at the point of the fork is block 99999. Thus both side of the fork are working on trying to find block 100000, one side on the minority rule set, the other side on the majority rule set. Finally, in order to simplify the description and make it easier to follow the logic, since only 25% of the stakeholders are on the minority chain, let's say that every 4th ticket in the live ticket pool is a stakeholder on the minority chain and the rest are on the majority chain. In other words, ticket numbers 0, 4, 8, 12, 16, 20, 24, ..., 40956 are tickets in the live pool which represent stakeholders on the minority chain, while ticket numbers 1, 2, 3, 5, 6, 7, 9, 10, 11, 13, 14, 15, 17, 18, 19, 21, 22, 23, 25, ..., 40957, 40958, 40959, are tickets in the live pool which represent stakeholders on the majority chain.
The following is the sequence of events that will happen:
The hash power on both chains will try to build a new block on top of block 99999.
Per the above description, in order for this new block to be built on the minority chain, it needs to acquire at least 3 votes from the live ticket pool and the selected votes depend on block 99999.
The tickets required to build block 100000, which is based on 99999 are ticket numbers 17113, 17331, 21307, 21328, and 24903.
As we can see, 4 out of those 5 tickets are stakeholders on the majority chain (ticket numbers 17113, 17331, 21307, and 24903), which means they are going to provide their votes for block 100000 on the majority chain.
The minority chain is only able to acquire 1 vote (ticket number 21328), so it can't build a block 100000, instead, it must go back and find a new solution to block 99999 in order to cause a new set of tickets to be selected.
At this point, the chains now look as follows. The parentheses with the * in this notation indicate blocks that are being worked on.
... -> 99999 -> (100000*) <--- majority stakeholders (75%) are on this chain \-> (99999a*) <--- minority stakeholders (25%) are still on this chain
In other words, the majority chain is now working on block 100000, while the minority chain is stuck trying to find a new solution for block 99999 in order to get a new set of tickets hoping this time they'll be able to get at least 3 votes. Since, per our thought experiment, both chains have equal hash power, we can safely assume that, on average, both block 100000 on the majority chain a new block 99999 (call it 99999a) on the minority chain will be found around the same time.
At this point, the following will happen:
The hash power on the majority chain will try to build a new block on top of the majority chain's block 100000. The votes required for this block are ticket numbers 563, 6766, 21009, 37394, and 37775.
This time around all 5 out of those 5 tickets happen to be stakeholders on the majority chain, which means they are going to provide their votes for block 100000 on the majority chain which allows block 100001 to be built.
The minority chain, now with a new version of block 99999 (99999a) has a new hash, so it ends up requiring ticket numbers 1069, 8007, 16413, 19172, and 31821.
The minority chain is still only able to acquire 1 vote (ticket number 19172), so it must once again go back and find yet another new solution to block 99999 in order to cause a new set of tickets to be selected.
At this point, the chains now look as follows:
... -> 99999 -> 100000 -> (100001*) <--- majority stakeholders (75%) are on this chain \-> (99999b*) <--- minority stakeholders (25%) are still on this chain
In other words, the majority chain is now working on block 100001, while the minority chain is still stuck trying to find yet another new solution for block 99999 in order to get a new set of tickets hoping this time they'll be able to get at least 3 votes. Since, per our thought experiment, both chains have equal hash power, we can again safely assume that, on average, both block 100001 on the majority chain and a new block 99999 (call it 99999b) on the minority chain will be found around the same time.
At this point, the following will happen:
The hash power on the majority chain will try to build a new block on top of the majority chain's block 100001. The votes required for this block are ticket numbers 174, 1999, 12808, 31928, and 38317.
This time, 3 out of those 5 tickets are stakeholders on the majority chain (ticket numbers 174, 1999, 38317), which means they are going to provide their votes for block 100001 on the majority chain which allows block 100002 to be built.
The minority chain, now with a new version of block 99999 (99999b) has a new hash, so it ends up requiring ticket numbers 4653, 15211, 29988, 35175, and 35665.
The minority chain is still only able to acquire 1 vote (ticket number 29988), so it must once again go back and find yet another new solution to block 99999 in order to cause a new set of votes to be selected.
At this point, the chains now look as follows:
... -> 99999 -> 100000 -> 100001 -> (100002*) <--- majority stakeholders (75%) are on this chain \-> (99999c*) <--- minority stakeholders (25%) are still on this chain
In other words, the majority chain is now working on block 100002, while the minority chain is still stuck trying to find yet another new solution for block 99999 in order to get a new set of tickets hoping this time they'll be able to get at least 3 votes.
Fast-forward to Block 100010
The process repeats until, eventually, some variant of block 99999 on the minority chain gets lucky and happens to select 3 tickets that are on the minority chain. This turns out to be roughly 1 in 10 tries. So, fast forwarding a bit to see the chain by the time this happens, the chains would look as follows:
... -> 99999 -> 100000 -> 100001 -> 100002 -> ... -> 100009 -> (100010*) <--- majority stakeholders (75%) are on this chain \-> 99999j -> (100000a*) <--- minority stakeholders (25%) are still on this chain
It should be pretty clear, since both chains have equal hash power, there is no way the minority chain can now ever catch up to the majority chain. Furthermore, the same process is going to repeat for the minority chain's block 100001 where it will have to go back and remine (find new solutions) for its block 100000 over and over until it gets a lucky draw again such that it gets the 3 votes it needs. Consequently, miners are not going to stay on the minority chain because they're never going to be able to become the majority chain and hence would be mining for free.
What if the minority chain gets more than 10x the hash power of the main chain?
Theoretically, if the minority chain with only 25% stakeholder approval had 10x the hash power of the main chain, yes, it could keep up with the majority chain, however, this is not a realistic scenario because of the economic incentives. Mining the minority chain with 10x the hash power effectively means the miners would only be getting 1/10 of the subsidy as they would on the majority chain based on hash power alone, but it's reduced even further by being 1/10 of 60% of the subsidy due to only being able to acquire 3 votes on average. In other words, miners would only receive 6% of the rewards they would by mining the majority chain, or looking it from the other way, they would receive 94% less by mining the minority chain. Putting that into numbers, if a miner had, say 5% of the total network hash power, they could expect to receive roughly 5% of the PoW subsidy per block, or 5% of ~13.89 ~= 0.6945 DCR at the current time. However, on the minority chain, first the subsidy would be 60% of ~13.89 ~= 8.334 DCR, and then that 5% hash power would only be 0.5% of the total hash power on the minority chain, thus 0.5% of ~8.334 ~= 0.04167 DCR. Thus, we can see that 0.04167 DCR is indeed 6% of 0.6945 DCR. PoW mining is very competitive since it is a zero sum game. Most miners, especially those without huge advantages such as free electricity, have very thin margins and are often banking on future appreciation to pick up the slack. Miners would actually have to pay money to mine the minority chain due to the aforementioned effective 94% reduction in income.
Can't somebody just change the consensus rules to ignore the stakeholders?
Yes, it is theoretically possible to do this, but doing so would completely destroy the hybrid system and return the forked currency to effectively being a pure Proof-of-Work system thereby removing any value of the system. It would also undoubtedly no longer be Decred, since, unlike in a pure PoW coin where nobody can really say which chain is the "real" one and which isn't due to lack of a provable and formalized governance system, Decred has a very clear and well understood governance model where the majority of stakeholders make the decision which chain is the real Decred and they do so in an on-chain and cryptographically provable fashion. Further, stakeholders sign up for Decred with the expectation that major consensus decisions are made by the stakeholders themselves. Removing the authority of the stakeholders would be akin to removing Proof-of-Work from a pure PoW coin. In other words, it would completely destroy the security properties of the system. How much confidence are holders going to have in a coin that ignores one of the primary characteristics it claims to offer?
Alright, I keep seeing you fucks talk about how "Bitcoin is going to make Nvidia/AMD go to the moon". I'm going to walk all you fucks through bitcoin, crypto currencies, and how they effect the GPU market. What is Bitcoin? Bitcoin is a decentralized ledger. That's pretty much it. A set number of bitcoin is generated per block, and each block is solved when a resulting hash is found for the corresponding proof of work. The difficulty is adjusted periodically based on a formula, meaning that as hash rate rises and falls, the number of bitcoins produced per day is roughly the same. What does Bitcoin have to do with AMD and Nvidia? Fucking nothing. Bitcoin is mined on proprietary hardware called Application-specific Integrated Circuits (ASICs). Neither AMD or Nvidia produce these. Why does everyone keep talking about Bitcoin and AMD then? Because they're fucking retarded and you're listening to retards. Bitcoin runs on the SHA-256 Hashing Function which people have custom hardware for. The Crypto driving GPU sales is ETHEREUM, NOT BITCOIN What the fuck is Ethereum then? Don't worry about it. It's for smug assholes who are too edgy for Bitcoin. All you need to know is it runs on a different Hashing function than Bitcoin, so if you weren't a retard you'd probably realize that the proprietary hardware I talked about earlier won't work with it. Currently Ethereum is being mined the same way Bitcoin was when it first started; on GPUs. When are you going to tell me what to buy Shut the fuck up, learn something or kill your self. How many GPUs are being used to mine currently? Currently the Ethereum Hash Rate is 73,000 GH/s. For upcoming earnings, we should instead look at the period from April to June. April 1st shows a network hash rate of 16,500 GH/s, and June 31st shows 59,200 GH/s, meaning the network hash rate increased by 42,700 GH/s for this upcoming earnings report quarter. I've linked a decent benchmark for GPU hashrate . You should notice that all of these are quoted in MH/s, versus the Network reporting in GH/s; there are ALOT of fucking GPUs running on the network. A top of the line 1080 puts out about 20-25 MH/s, a good Radeon card does about 30. As a rough estimate, lets assume that the average card mining Ethereum currently produces about 25 MH/s. 42,700GH/s / 25MH/s means that there are 1.7 MILLION more GPUs currently mining ethereum than there were at the beginning of Q1. Based on my personal observations being involved in this, AMD is actually taking a majority market share of the sold cards just due to their superior performance compared to Nvidia's 1080s, and I'd estimate that About 50-60% of the cards currently mining Ethereum are AMD Radeons. What does this all mean? AMD are selling their highest margin video cards faster than they can produce them, and at ~250$ a pop with 50%-60% market capture AMD will have sold roughly 200-300 million dollars more in video cards than they did last quarter. AMD quarterly revenue last reported was just under 1 Billion. This is a 20-30% increase in revenue from last quarter, where Ethereum Hash Rate only increased by about 10,000GH/s. Even assuming a modest 30% margin for their video cards, AMD will still have almost 60 million in unexpected earnings this quarter due to crypto mining, which translates to about .06-.1 per share in earnings. tl;dr Ethereum will make AMD beat revenue by 20-30%. BUY AMD YOU CUCKS.
Hello cryptocurrency lovers! Welcome to Coin-a-Year, the laziest series yet in the Coin-a-Day publishing empire. This year's coin is Nyancoin (NYAN). I originally covered Nyancoin in an article here in /cryptocurrency published January 4th, 2015. Without (much) further ado, I'm going to include the original report next, unmodified. This is unlike my Coin-a-Week series, where I use strikeout and update in-text. Because this is going to be a longer update, I'll just make all further comments and updates below, just realize that all information below is as of January 4th, 2015 and thus is more than a year out of date as of posting now, at the end of February 2016. Since I use horizontal rules as internal dividers in the original post, I'll use a double horizontal rule to divide the original text from this prelude and the following update. Coin-a-Day Jan 4th Welcome to the fourth installment of Coin-a-Day! To see convenient links to the introduction and the previous entries, please see /coinaday. Today's coin is Nyancoin (NYAN). Summary • ~173.6 million available currently ; 337 million limit  • All-time high: ~0.000024 BTC on February 16, 2014  • Current price: ~3 satoshi  • Current market cap: ~$1,275  • Block rate (average): 1 minute   • Transaction rate: ~25? / last 24 hours; estimated $3-4  • Transaction limit: 70 / second  • Transaction cost: 0 for most transactions  • Rich list: ???  • Exchanges: Cryptsy  • Processing method: Mining  • Distribution method: proof-of-work block rewards and 1% premine for "bounties, giveaways & dev support"   • Community: Comatose  • Code/development: https://github.com/nyancoin-release/nyancoin ; there hasn't been a released code change in 10 months. The new developer has talked about some changes, but has not made a new release. He has given advice about how to keep the network running and operate the client.  • Innovation or special feature: First officially licensed cryptocurrency (from Nyancat) ; "zombie"-coin  Description / Community: So you're probably wondering why in the world we're talking about a coin which has been declared dead and already written off. I actually first selected this coin to illustrate a "deadcoin", but the more I dug into it, the more I was amazed at the shambles I discovered. I am combining the description and community sections for this coin, because the community (or lack thereof) is the central issue for Nyancoin. Substantially all, if not literally all, of the original infrastructure is gone. From the announcement post, the original website has expired. The nyan.cat site itself survives, but has no reference to the coin. The github repo remains, but then there was never much changed from the bitcoin/litecoin original. In fact, the COPYING file doesn't even list "Nyancoin Developers". None of the original nodes seem to be running anymore. @Nyan_Coin hasn't tweeted since July 6th. And that was just to announce posting an admittedly cute picture to facebook which makes a claim for a future which seems never to have developed. Of the original 15 pools, I think all are dead except p2pool, for which at least one node still supports NYAN. The original blockchain explorer, nyancha.in, is still running. The faucet is dead or broken. The original exchanges no longer list it (two of the three having died; SwissCEX having ended its trading as of the first of this year). And so forth. And yet:
[Of course, that scene finishes with knocking out the "recovering" patient so he can be taken away...not to mention the absurdity of including Monty Python in a financial article, but moving right along.] There is still just enough left to Nyancoin to keep it twitching, even if it is on life-support. Whether it's an individual node or whether it's a pool, there are blocks being produced at a steady rate as intended. Transactions are being processed. There is still a market. There is still a block explorer. And there is a dev. It is like a case study in the absolute minimum necessary to keep a coin alive. The most likely outcome is almost certainly a final collapse when one critical piece or another of the infrastructure goes away. And yet in the meantime, a person can own a million NYAN for $8 , and then move this coin quickly and easy, albeit with no particular external demand. It's like the world's most hyped testnet. I think this case presents an interesting example of what happens to an altcoin when its initial support dries up. NYAN coin is more fortunate than some, actually, as there are some where there are no longer any nodes running it nor the original announcement thread (in fact, there was actually a second Nyancoin launched around the same time. But it died hard and its original announcement thread was deleted and at this point I would have no idea how to access it; so "Nyancoin" thus illustrates how hard a coin can die (Nyancoin 2) as well as how it can hang around despite being proclaimed dead, with far more justification behind that pronouncement than there has been for bitcoin (NYAN) ). Footnotes  http://coinmarketcap.com/currencies/nyancoin/  https://bitcointalk.org/index.php?topic=402085.0 Regarding the premine, it's unclear to me where this money is now, since the original poster hasn't been active on BCT since May and the original site is down. However, given that it's only 1%, and about $25 in value right now, there seem to be more significant concerns for NYAN.  http://nyancha.in/chain/Nyancoin - Nyan blockchain explorer; blocks are somewhat inconsistent but somewhere around the 1 minute average  There doesn't seem to be anything automatically doing these stats, so I did visual inspection on about 1500 blocks (about one day) excluding the block generation reward (~250k/day). Most blocks are otherwise empty. I counted about 24 transactions or so scrolling through, with an outlier around 300k NYAN and another around 100k NYAN. In total, about 500k NYAN, excluding the block rewards. This is very approximately $3-4.  Nyancoin is a basically unmodified, slightly out-of-date bitcoin as far as code goes, and ignoring the change in block rate and total coin supply, as well as the difficulty retarget after every block. So for purposes of estimating maximum possible transaction throughput, I start with bitcoin's estimated 7 transactions per second, and multiply by 10 for having a block on average every minute rather than every 10 minutes. In any event, this limit is not likely to be reached in the foreseeable future.  Like bitcoin, transaction fees appear to be optional in Nyancoin. Unlike bitcoin, there is almost no transaction volume, and coins tend to sit for a relatively long time before being moved. So zero-fee transactions appear to be the norm from looking at a couple transactions on the block explorer.  I couldn't find one. See the disclosure section of this article: your humble correspondent is likely represented in some way on a top 100 if one were to be made or if one exists, despite not holding it directly, depending on how the exchange holds it.  I could not find any other exchanges still listing Nyancoin. SwissCex appears to have disabled it as of a couple days ago. Cryptsy has a notice that the NYAN/BTC market will be closing, but its NYAN/LTC market appears strong.  Essentially all of the original sites, pools, faucets, etc. are dead and there has been very little to replace it. There is basically a single node, or perhaps a very few, which are running the blockchain. However, there is a developer still trying to hold things together, maxvall_dev, maxvall on BCT. He is the last hope for the NYAN.  https://bitcointalk.org/index.php?topic=597877.0 This is the thread where maxvall took over as dev, and it also discusses switching to PoS, which hasn't happened as far as I know.  "zombie"-coin: Not to be confused with ZMB (my god, does it ever end?). This is my term to describe a coin which is "undead": by rights it should be dead. And yet it's still walking around and acting like it's alive. What is it? What's going on? It's quite debatable whether this gives it any special value, but I find it an interesting state, and it's why this was chosen for early coverage. There are plenty of actually popular and successful coins, and we will go onto covering more normal selections; we're looking for variety rather than repetition. But I think this is an interesting example for what can go wrong, and yet in the midst of that, how little it takes for a coin to survive. In fact, it's almost like an alternate history bitcoin to me; this shows the concept that "it was run on one computer before; it can be run on one computer again" to some extent. And there are even some strange pragmatic benefits as well, like having no competition for getting a transaction into a block and thus zero transaction fees.  And, in fact, the author chose to do so today, spending about 0.03 BTC for about 1 million NYAN. Additional Reading • /nyancoins - Like NYAN: mostly dead, but not quite • http://nyan-coin.org/ - new official website • BCT thread listing nodes, xpool (p2pool), for mining information. • americanpegasus predicting in February that NYAN will hit $1; always an entertaining read Giveaway Instead of a challenge today, since NYAN has enough challenges, I decided I would give away 10,000 NYAN to at least the first ten people who ask for it. This still remains at my discretion, but honestly, if you really want, say, 50,000 NYAN and create four new accounts to do so, I'll probably be too amused to say no. I don't expect to get ten requests. If I get more, I'll probably still fulfill them, but as with everything else, this is left to my whim. Donations and Disclosure Okay, this is an important one today because of the tiny market here. I actually hold less USD value in NYAN than in BTC, DOGE, and PPC (although my value in PPC might be about equivalent actually), but I hold more of the total market in NYAN than any of those three. And I'll probably be buying more. So I have a conflict of interest in writing this article. I am not providing financial advice and I do not make any recommendations of any sort on any matters. Make your own decisions; do your own research. Please, I do not want to hear about anyone doing anything "on my advice." I am not offering advice. I personally hold just over 1 million NYAN on Cryptsy right now. Perhaps it would be better if I didn't write any articles about anything I were invested inspeculating on, but I started this series for my own education to further my speculation, so unfortunately, dear reader, your needs come second to my own. tanstaafl; you get what you pay for, and I'm giving you my thoughts. If by some strange quirk of fate you actually own NYAN and enjoyed this article and wished to donate some to me, K7Ho9HghBF6xWwS6JsepE6RAEPyAXbsQCV is mine (first non-empty account I've posted; transferred 1000 NYAN into here earlier from Cryptsy to test that the network and my wallet were actually working). Thank you all for reading and commenting! I've already learned a lot from this process and I look forward to more! Upcoming coins: • January 5th: Nxt • January 6th: Darkcoin • January 7th: Namecoin I'll use alphabetic labeling for footnotes in the updates to avoid any confusion with the footnotes in the original. For simplicity, unchanged items, like the 337 million limit and the 1 minute will not be mentioned, and we'll start with the summary changes. Updates: Summary
Community: We're not quite dead yet; in fact, I think we're getting better! [f]
Code/Development: I have an early draft of NYAN2, but I'm about six months past my initial goal for having it available to use. Life/work/lack of build machine/procrastination. NYAN2 will be a rebase onto a modern LTC codebase which will soft fork to fix a current vulnerability to a fork bug. For now, the network still runs on the same code that it did when I wrote the first article.
Discussion I'm going to consider the community first, since I pointed it out as the weakness and central topic in the last one, then talk about the technical situation briefly, and then review the financial results. The community has been excellent, if I do say so myself. We've got working infrastructure going thanks to the contributions of many Nekonauts (see [f]). Some original Nekonauts have returned or at least popped in from time to time, and new ones like myself have found Nyancoin (I would say given what I wrote in the original, I was still a skeptic of it at that point. Not that skeptics can't be Nekonauts, but I think I'd put my conversion to the cult of nyan shortly after writing that, even though I was already a nillionaire then for the heck of it.) While I do look forward to seeing the community continue to grow in future years and consider that important, I don't think the community is our weakest point any longer; I think it's now our strongest point. I've tried to encourage the community's revival as best I could, including giving away tens of nillions in total, and lots of long rambling articles on my views on ethics and philosophy and frankly it's worked better than I would've really expected (or at least it has coincided with an effective recovery of the community). The community also helped me through at least a couple hard times personally in there as well. The technical situation in Nyancoin is mostly unchanged but slightly improved, although with two additional known vulnerabilities. It's unchanged in that it's the same client. It's improved in that we have an active nyanchain explorer host (nyan.space), and we have a public draft of a plan for a soft forking security fix update in the near future (hopefully by the end of March (although I've slipped these deadlines before and may well miss March for release by a bit, I do think I'm inching closer now and then)). The most serious vulnerability is to forking. This is the bug which hit Peercoin if I recall correctly. NYAN2 is intended to solve this through its soft fork from the LTC fix upstream (from the BTC fix upstream). In the meantime, we've been lucky we haven't been attacked. The tiny marketcap probably helps with not being a particularly attractive attack target. We're not exactly about to pay ransom to move faucet outputs. But that's no excuse; we want this fixed and should have it finally done "soon" (tm). The less serious vulnerability is to a time warp attack in the difficulty function (Kimoto Gravity Well), which relates to general weaknesses it has and issues we've had with large gaps in the block chain because of spikes in the difficulty function causing it to be unprofitable and driving away most of the hash, and then low difficulty and price rise making it attractive to more hash, creating a spike and causing it again. While this is irritating, the chain still works, even if there are fits and starts at times. An important part of the reason I can get away with this is because there is at least one Nekonaut-supporting miner, CartmanSPC, who rescues us from time to time, and did so during the course of this article being written. We have a bunch of pools, but sometimes the hash just isn't there to get us unstuck when the difficulty goes high enough. Another part of the reason I consider it not an especially serious issue is because there's a workaround which works for me (classic bad developer logic): I use a large transaction fee (generally 337 NYAN, although I might have halved it after the most recent halving, I'll probably use 337 again) on my personal wallet by default. If necessary, I use a couple of them. It can make NYAN profitable to mine again despite the higher difficulty and "unstick" the chain. The difficulty function can go back down again in the next block if the gap has been long enough, so that can be enough to keep it going again for a while (although it can also get stuck again irritatingly fast at times). A fix for this will be putting in a better difficulty function for NYAN3, which will require a hard fork. This is tentatively scheduled for feature freeze around the middle of this year, coding to follow, activation sometime early 2017. Financial has been our most disappointing performance. A graph of the 1 year performance right now on coinmarketcap looks pretty sad, showing our fall from a little over 60 satoshi down to around 7 satoshi now. We rose too high, too fast, and I didn't stick with the safe high paying job like a sane person. Instead I hit the road, went to jail, and worked minimum wage. That doesn't sound like a sentence from a cryptocurrency financial review, does it? But the performance of NYAN since the article has been the story of my personal finances, which is the story of my life since then. So, autobiographical coinaday interlude, trying to keep it generally to the most salient points. Well, in 2014 I had been on my way home to Minnesota from California when I was pulled over leaving Eureka, Nevada for speeding (got sloppy and went 45 approaching the 45 sign and thus technically still in the 35; bored cop seeing out-of-state plates). My vehicle reeked of weed, what with having been in Mendocino County previously with no intention of traveling out of the county much less state anytime soon but family emergency brought me back, and the end result was a citation for possession of cannabis and paraphernalia along with the speeding. Fast forward to the beginning of 2015, I'm settled into a good software position and start looking more at cryptocurrency in my spare time. I write the coin-a-day series for a bit and then got annoyed and quit after a while when trying to do one a day on top of an actual job was too much for me (along with some annoyance over criticism; I can be rather thin-skinned at times). But I had gotten interested in Nyancoin, and started buying it up more and more with extra money I was making. And then comes the crash. I had to stop putting as much in as I realized that where I was living and what I was working on wasn't going to work out for me and I needed to figure something else out. So, as I seem wont to do, I went on a roadtrip. I quit my job. And I went back for the court date for my citations and refused to pay, instead spending 10 days in jail rather than pay ~$1400 (I actually had the money in cash available to me if I chose to pay as a backup if I chickened out, but the judge annoyed me enough that I really preferred to be jailed instead of paying, as stupid as that sounds since I'm quite sure the judge didn't care in the least one way or another). After that, I went back to roadtrip lifestyle for a while. It was a nice period. A lot of beautiful scenery; a lot of reading. Eventually, I busted up my car pretty badly...a couple times actually, the second time for good. Fast forwarding through the rest of the year, I worked a couple minimum wage jobs to pay bills and avoid cubicle life and kill some time until I figured out what I was going to do next. Just recently I quit as delivery boy after getting a speeding ticket (I swear, I'm not as horrible of a driver as this makes me sounds, although I have had a bad tendency to speed in the past, which I really have curbed to almost nothing; but I'm clearly not good enough) and am currently writing a Coin-a-Year article with a friend's incentive and applying to do documentation and development with the Nu project. Okay, so what did any of that have to do with NYAN? Well, it's the mess of a life that has led to the fall of the price from 60 satoshi to 7 satoshi. If instead my life history for the time since the article had been simply "I was happily employed writing software", then I don't believe we would have dropped below 20 satoshi. It's easy to see in hindsight. If anyone can lend me a time machine, I'm sure I can get some condensed instructions which should improve performance significantly. Otherwise, just going to have more chalked up for the "character building" tally. So, lessons learned if you are the major buy support for your coin: you need long-term reserves. Whatever you put in bids can be taken out in a moment by a dump for no apparent reason. This is particularly true if you may be quitting your cushy, high-paying job and wandering around without income for an extended period of time. Rather obvious, but hey, maybe someone else can learn from my mistakes. If I'd been bidding as cautiously as I am now from the beginning, I think the price would probably be somewhere from 10-20 satoshi now instead of around 7 satoshi. It's especially unfortunate given that I wanted to be able to demonstrate the more consistent growth possible building a stable store of value, as opposed to the pump and dumps common in altcoins. And instead we had a pump-and-dump looking graph ourselves after I bid up higher than I was able to sustain, and a large (10+ nillion) instadump crashed the market all the way back down to 1 satoshi momentarily. We've had a few large (2+ nillion) dumps since, but nothing that large. We haven't generally had that large of bids though either. It's hard to know when I've exhausted the supply at a price level, when it sometimes waits for a couple weeks or even more and then fills all the bids at once. But I want to maximize the minimum price paid because I think that's important for building confidence in a store of value long-term, which is one of my core goals for NYAN. At the same time, we're still up from the lowest parts of the floor and where I found it. Since I own about 30% [g], the very cheapest supply has been taken off the market. I plan to keep on buying up "cheap NYAN" as much as I can. I've bought up to 60 satoshi before, I'll probably buy up that high this time around. I've got a token 100,000 NYAN ask at 300 satoshi; I hope never to sell lower. Conclusions Now I try to wrap it all together as if I saw this all coming and am the wise expert, despite having had about 90% drop in price in the last year after bidding too high. My original concept was taking the "minimum viable coin" and reviving it to a powerhouse as a textbook example in how to do it. Part of my core concept in this is the arbitrariness of value: throughout history, humans have chosen any number of things as a store of value for the time: salt, large rocks, certain metals, disks, marked sticks, and so forth. While there has generally been a certain logic in the choice, in that there is a locally restricted supply in one way or another, and so forth, from the perspective of other centuries or cultures the choices can seem quite strange. Growing up, I was always struck by how strange the notion of salt being limited and valuable seemed in a world where people were trying to reduce intake and large amounts could be bought for trivial sums. And yet, a key nutrient necessary for life fundamentally makes more sense as being valuable than notched sticks or printed paper or a piece of plastic with some encoded information. Humans have perpetually come up with stranger and stranger ways of storing and transferring value. Each new step, as always, comes with its own disadvantages and, frankly, has generally appeared nonsensical at best and fraudulent at worst to the status quo. Which doesn't mean that each new attempt is valuable. The gold bugs always like to point out that every fiat currency ultimately returns to its true value of zero. And the skeptics of cryptocurrency argue that all cryptocurrencies will eventually return to their true value of zero. It's certainly possible. And it's possible the USD will hyperinflate someday. I tend to try the moderate view for a plausible guess of the future. By that type of logic, I would guess that over the course of decades, USD will in general lose value, and cryptocurrency will tend to slowly gain value. That might not seem the moderate view, but USD not losing value over decades would be truly shocking. And hyperinflation has been predicted since the USD went off the gold standard, or before. So some amount of inflation less than hyperinflation seems like the safe guess (but then, the Titanic arriving would also have seemed like the safe guess to me). And with cryptocurrency, I think it's clear by now the technology will continue to survive. So my first question is with what overall value as a market? It could go down, of course, but that seems unlikely in an already small, young market. Even if all the current crop die off and are replaced, whatever cryptocurrencies are around should be able to do better than a handful of billion in market cap in my view. I believe that cryptocurrency has a bright future ahead of it. The best coins should ultimately survive and thrive. But I've been wrong on most of my major calls so far, like for instance when I thought BTC was over-priced around $5-$10. I think Nyancoin can have an important role to play in the future of cryptocurrency in the years and decades to come, but it's a massively speculative long-shot. See also Nyancoin risks document. But like Linus Torvalds' autobiography, I try to keep "Just for Fun" as a core motto and principle. It's makes for a good hobby project because there will always be more to work on, with a core community motto of TO INFINITY AND BEYOND! Disclaimers / Sponsorship: As I said before:
I am not providing financial advice and I do not make any recommendations of any sort on any matters. Make your own decisions; do your own research. Please, I do not want to hear about anyone doing anything "on my advice." I am not offering advice.
And I'll reiterate that I own about 30% [g] of the current supply of NYAN, which makes me by definition maximally biased. Also, I'm not sure what's up with the address from the first post. It doesn't show up in my current wallet as a recognized address. So, anyhow, don't send there. :-) If you'd like to donate, please consider sponsoring a coin-a-day or coin-a-week article. This is the first sponsored article. This Coin-a-Year article has been brought to you by spydud22 's generous patronage. I'd been meaning to do a Coin-a-Week article on Nyancoin for a while, but between wanting to "wait until the price recovered a bit" and general procrastination, then it seemed like it would make a good Coin-a-Year article, and then I wanted to wait until the price recovered a bit more...anyhow, so thank you spydud22, for causing me to finally do this. :-) Footnotes
[a] nyan.space/chain/Nyancoin ; as of block 1091430, 263738786.71890615 NYAN outstanding. This is slightly over 50% more than the last report, which is what we would expect, since it had existed for about a year then, and has approximately annual halvings. The first year generated about 50% of total supply; the second year generated about 25% of total supply. We should expect in a year to have about 17% (one-sixth) more than we have now.
[b] https://www.cryptopia.co.nz/Exchange?market=NYAN_BTC ; this is the only market reflected in coinmarketcap and it is the primary one on which I trade. Cryptopia also has other base pairs which operate at significantly higher spreads (lower bids; higher asks) and have minimal volume. In the time since the last report, NYAN has traded as high as 60 satoshi (and briefly a little higher at times), but over the last almost twelve months since a peak about a year ago, the price has been generally declining overall, as a gross oversimplification of a lot of movements. This has been an effect of me not being able to keep buying as much and there being large dumps I wasn't expecting from time-to-time. Now I'm taking the approach of building large (one or more nillion (million NYAN)) bids on each price as I slowly work my way back up again in order to be able to handle possible dumps with less price shock.
[c] coinmarketcap.com/currencies/nyancoin/ ; as noted in [b], this only reflects the /BTC basepair on Cryptopia but that's where most of the volume is anyhow. Of course, the market is also not particularly liquid since I'm the primary buyer and have rather limited means currently.
[d] I haven't setup a script to count this yet, among many things on my to-do list for someday, so I went through by hand from what was the then-latest block of 1091430 on nyan.space back to 1089766 which was the first block generated less than 24 hours before. There was actually a three and a half hour block gap at that point, such that the next prior block was about 24 hours and 15 minutes before 1091430 while 1089766 was only about 20 hours and 45 minutes prior, and has a disproportionate number of transactions and value compared to a typical block (8 and ~313,000 NYAN respectively) from the build-up during the gap. But since that gap conveniently started right about at the start of the 24 hour period, doesn't really skew our results here.
Note that there are often times where the UTXO created during one transaction during the day is spent during a later transaction in the day. This can be considered the "same" Nyancoin being "spent" twice in the same day in our total. But in practice, I believe what's happening here is the faucet is breaking off small (10-50 NYAN) pieces from a larger (~40,000 NYAN) chunk, and so that pops up a bunch of times. So the total NYAN blockchain volume as counted for this topline number should not be interpreted as "NYAN spent in the day" but "NYAN moved on the chain", where the "same coin" can move many times. So it's a very easily gamed metric and not a strong / resistant metric like the market price tends to be (at least relatively speaking), but it's a fun number to calculate and provides a little bit of information. The transaction count can also be easily inflated and certainly, for instance, having the faucet does generate transactions which are a very common transaction. And this is also just an arbitrary 24 hour period compared to a previous arbitrary 24 hour period. Nonetheless, I do think there's clearly a bit more activity on the Nyanchain, even though the typical block is still empty and the number of transactions and volume is still tiny compared to the major cryptocurrencies. Here's an arbitrary example of the faucet transactions Note the zero transaction fee, which I love that the miners support (the defaults are all quite low as well). Here's an example of what may be the smallest transaction by NYAN volume of the day; but no, I followed its small, spent output, and it led to this gem which also links to this. I have no idea what's going on here, but it's hilarious and I love it. How's that for microtransaction support? :-)
[e] Obviously Cryptsy went down. We had had more than enough red flags with Cryptsy (including one time where I was able to withdraw 6 nillion more than I had in my balance) and got onto Cryptopia. spydud22 basically accomplished that for us, although I helped out in the tail end of the campaigning.
[f] Our community is still small (I wish there were literally dozens of us!) but we've had valuable activity from multiple people, including, just as highlights, vmp32k who hosts nyan.space, a clone of the original nyancha.in, jwflame who created the excellent nyancoin.info intro site, with the awesome status page (which currently notes that "the last 500 blocks actually took 111 minutes, which is approaching the speed of light, causing the universe to become unstable"), KojoSlayer who runs the faucet and dice, spydud22 who got us on Cryptopia, and many other Nekonauts have made worthy contributions, and the Nekonauts mentioned have done more than just that listed. So while we are small, we are active at least from time to time and technically capable.
The CryptoCurrency mining difficulty log Feb 8 2020 Bitcoin Ethereum LiteCoin Monero Eth Classic
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