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There’s been a lot of hustling going on at The Daily Bit — some of which concerns our new website, which is set to launch this Sunday, January 14th.
To celebrate our official launch, we’ll be doing two things:
- Twitter giveaway: One of our lucky followers will win $500 of cryptos. (Winner’s coin of choice) How can you enter? (1) Subscribe to our newsletter (2) Like and RT our official post on Twitter.
- Full newsletter on Medium: Like we mentioned, Medium is generally reserved for our blogs. However, to give you all the opportunity to test-run what we’re dishing out each morning, we figured it would be a great idea to share today’s post here as well. So, without further ado, let’s dive into the buffet.
Meme of the Day
Bulls and Bears
Bull: Japanese investors may start seeing red due to Fisco Corporation’s launch of the country’s first cryptocurrency fund. According to Nikkei, the Tokyo-based investment research group has a minimum of 300 million yen in liquidity and a dual-strategy of direct investments in cryptocurrencies and arbitrage opportunities across exchanges. Hailed as the first of its kind in Japan, the fund has the potential to drive the crypto bull deeper into the Japan’s traditional economy.
Bear: Similar to his public approval rating, Venezuelan President Maduro’s plans to launch the petro were flattened by the National Assembly. With the country on the verge of financial collapse, parliament leaders viewed the cryptocurrency as “a new kind of fraud, disguised as a solution for the (financial crisis).” Legislator Jorge Millan explained the sentiment, stating that “This is not a cryptocurrency, this is a forward sale of Venezuelan oil. It is tailor-made for corruption.” A corrupt government attempted to secure billions in funding for resources that are located 20,000 leagues under the sea? Yep, checks out.
Bull: Ledger is inching closer to supporting privacy coin Monero in their hardware wallets. The complexity of the code, likely due to Monero’s unique privacy features, have challenged developers, although a recent breakthrough could see the implementation complete by the end of 1Q 2018. A successful integration of Monero onto Ledger devices would bring arguably the most secure, privacy centric crypto/device duo to market.
Bear: Wondering why cryptos won’t replace the dollar? Neel Kashkari has the answer. The Federal Reserve President of Minneapolis explained that “the barrier to entry is so low” with cryptocurrencies, and that “I can create… Neel Coin and all of a sudden you have inflation in cryptocurrencies that are indistinguishable from one another”
Admittedly, he has a point — Neel Coin can be spun up within an hour, but it’s just not that simple. Unless Neel Coin has solid fundamentals, a strong development team, legitimate roadmap, and most importantly, a strong following, it’s not gonna last. That is, at least following the *crash*, when capital is expected to consolidate into legitimate projects. Plus, each coin is identifiable by its unique ticker, and most cryptocurrencies have a deflationary supply schedule.
On an unrelated note — here’s an article on inflation of the USD.
Hot In The Streets
Buffett Eats Cryptos
As we expect, you’ve all heard of the man called Warren Buffett. Arguably the most renowned investor in the world, Buffett is a proponent of value investing, which seeks to identify assets in which the intrinsic value is yet to be realized in the asset’s price through the use of fundamental analysis. It’s a no brainer that Buffett is one of the most influential individuals to ever cross the realm of finance.
Yesterday morning, Buffett went on CNBC and reiterated his bearish viewpoint on cryptocurrencies, stating that “I can say almost with certainty that they will come to a bad ending.” Due to his background of value investing, it should come as no surprise that Buffett is opposed to markets that appear to lack, ever more frequently, any fundamental basis for appreciating value. Additionally, noting that he would never directly invest in the underlying asset, Buffett added that buying “a five-year put on crypto currencies” was within his wheelhouse.
Old Dog, No New Tricks
Again, given Buffett’s background, it’s understandable why he doesn’t approve of cryptocurrencies as an investment. However, a key distinction here is that cryptocurrencies fall outside the scope of traditional financial markets. Valuations of cryptocurrencies should not be determined by future cash flows, but rather the expected utility value that can be derived from the network. If you haven’t given it a read already, Chris Burniske expresses these valuation of cryptoassets relative to methodologies used for equities in the Crypto J-Curve.
Up And Down And Up Again
With the majority of traditional financial capital lodged in stocks and bonds, it can be argued that successfully identifying intrinsic value from a particular cryptoasset’s network is the act of value investing. It’s just that in the current market climate, many investors are believed to be entering the market during a period in which there are inflated values for many assets — and there are. Following the boom, there’s a bust. Then another boom, and a bust, and a boom…
Per usual, Twitter provided several counterpoints to Buffett’s crypto outlook. One comes from @HectorRosekrans, who discusses the importance of avoiding herd mentality with investment decisions. The other, as you may have guessed, comes from the regularly touted @cburniske.
Screenshots of the main points to each are below, but feel free to check out the full threads with the links above.
Catching your breath after
a couple wind sprints? Have an appetite for Monero? If so, keep moving those eyeballs — there’s a crypto mining rig for that. Max Dovey of the Institute of Network Cultures developed a machine that executes hashing operations for the privacy coin’s blockchain, which is practically based on the rate of your breathing.
With each inhale, the rig produces roughly 1,000 hashing operations per second. For comparison, the current hash rate of Monero’s blockchain is roughly 6 MH/s, or 6,000,000 hashes per second.
Appropriately named Breath, the operation goes to show how far innovation stretches in the blockchain ecosystem. Dovey noted that the project was never intended to make money — profits are roughly $1 — but rather to “consider more sustainable and psychological methods to maintain blockchains.”
Hardcore gamers are getting
pwned as a result of crypto mania — but not in the standard arena. Rather, playing the field has shifted to online retailers, with the coveted prize being computer GPUs (Graphics Processing Units). The growth of cryptocurrency mining operations are cranking up the demand for GPUs, leading to supply shortages and price increases ranging from several hundred to thousands of dollars. As a result, late-to-buy gamers are between a rock and a hard place — either they pay a premium for current models, or their gaming experience takes a hit from using a less efficient GPU.
The gaming industry market is HUGE. According to Newzoo, 2017 revenues are expected to be $108.9 billion, with a total market CAGR of 6.2% projected through 2020. If cryptocurrency miners continue their full-court press for GPU chips, it’s possible that such a figure could increase — assuming retailers are able to keep up with demand.
Cybersecurity firm, AlienVault, released
yet another report on malware, which has been used to mine Monero. Ironically, despite Monero’s impressive privacy features, the detected code is greatly lacking. The password used is “KJU” — Kim Jung Un — and funds are sent to Kim II Sung University. Honestly, it’s hard to tell if we’re being trolled with this one. Seeing that the university enrolls a number of foreign students, that could be the case.
The more pressing concern is that the North Korean regime is funneling cryptocurrencies into the country to fuel their nuclear program. Previous cyber attacks, notably the infamous WannaCry ransomware, have been tied to the North Korean hacking squadron, Lazarus Group, adding fuel to the theory.
“Opened registration for 1hr yesterday, 248,599 users signed up. Limits don’t work.”
- Changpeng Zhao, January 10th
“Just called my counter part in Korea, he says that the reports are FUD. The position is that the Korean authorities are clamping down on unregulated exchanges and exchanges that are not compliant. Further they are auditing the quality of the KYC. A banis not on the cards.”
“5/ I have made exactly two exceptions to this. When asked what cryptocurrencies I recommend long-term, I have answered with BTC and XMR. Even this reflects a conflict of interest, but these are the only two exceptions I’ve ever made to my “no investment advice” rule.”
“Sometimes no position is the best position. A compulsion to trade leads to disaster.”
- Peter L. Brandt, January 9th
Eyes on $ZEC these next couple days. Remember, it’s all in the market cycles.