Tezos, a cryptocurrency that raised $232 million in July, is in crisis
arstechnica.com/tech-policy/2017/11/tezos-a-cryptocurrency-that-raised-232-million-in-july-is-in-crisis/

Something going on with NEO, up 23% overnight.

Don't see crypto like a new "hot stock bubble". Bitcoin (and others) herald a fundamentally different type of asset class, a new type of money, and one with properties the existing financial system can't replicate.

Think: Letters -> Fax -> Email

Watched my first live ICO last night - quantstamp.

It was equal amounts hilarious and frightening.

Hilarious as in how fools are so easily parted from their money when in herd mentality but scary as in just how big this whole ICO mania thing is getting. Peeps from all over the planet were frothing to get the next big thing, treating the CEO like a celebrity when he came online from his warehouse / shed office, promising secret announcements to ramp things up in coming weeks etc (ie the kind of statement that would see a list company CEO reaching for his lawyer)

Most of the punters had no clue what they were buying but FOMO meant they just had to get some before it trebled (or more) in price- "a friend told me i need to buy this today or I would miss out" etc etc

8 different scammers managed to get the weakest in the herd to send their $s to the wrong addresses no matter how many times they were warned.

The only intelligent question i saw asked was about how much cash quantstamp actually needed to achieve its goals vs how much it was raising (the magical $34M odd) and was shouted down as being too negative.

Seriously these guys made crypto boy look like warren buffet!

This whole ICO thing makes the dot.com bust look like sensible and considered investing from what ive seen so far.

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Bara said..
Watched my first live ICO last night - quantstamp.

It was equal amounts hilarious and frightening.

Hilarious as in how fools are so easily parted from their money when in herd mentality but scary as in just how big this whole ICO mania thing is getting. Peeps from all over the planet were frothing to get the next big thing, treating the CEO like a celebrity when he came online from his warehouse / shed office, promising secret announcements to ramp things up in coming weeks etc (ie the kind of statement that would see a list company CEO reaching for his lawyer)

Most of the punters had no clue what they were buying but FOMO meant they just had to get some before it trebled (or more) in price- "a friend told me i need to buy this today or I would miss out" etc etc

8 different scammers managed to get the weakest in the herd to send their $s to the wrong addresses no matter how many times they were warned.

The only intelligent question i saw asked was about how much cash quantstamp actually needed to achieve its goals vs how much it was raising (the magical $34M odd) and was shouted down as being too negative.

Seriously these guys made crypto boy look like warren buffet!

This whole ICO thing makes the dot.com bust look like sensible and considered investing from what ive seen so far.

Never heard of Quantstamp but there's so many ICO,s starting up its impossible for anyone to know them all.

Only ICO I've been involved with is PL, at first it was a mad impulse driven frenzy to get your tokens before they sold out. But it was pretty funny that after the bull run to get the first tokens, PL struggled to sell the rest & they had to sweeten the deal with discounts.

At first I felt like I'd been ripped as the price dropped right at the start of the public offering (profits were taken & they got the best price) But it has actually work out really well for everyone who invested in PL - so far.

So big question is, did you buy any Bara ?

Yeah I bought a small amount (1 ether) mainly as an incentive to follow it and learn what I can from the process.

Find it easier to buy one I dont understand than one i do like PL and that says alot in itself I reckon!

PL is approaching 80m last I looked and back of envelope it would need around a dozen entire cities signed up to justify that kind of price and I'm probably being generous.

I very much doubt the buyers now are looking at fundamentals though - more likely candlesticks.

People are not buying Bitcoin because they intend to use it in their daily lives. Currencies need to have a steady price if they are to be a medium of exchange.

People are buying Bitcoin because they expect other people to buy it from them at a higher price.

sellers do not want to receive a token that might plunge in price

"it is one thing to become a millionaire but it is another to be able to get into a bubble and out again with your wealth intact."


NO_CONVERSATION_EXIST

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busterwa said..
People are not buying Bitcoin because they intend to use it in their daily lives. Currencies need to have a steady price if they are to be a medium of exchange.

Spot on. The more its manipulated and volatile then the less relevant it becomes. Crowd psychology is destroying these "currencies" before our very eyes IMHO.

Its really interesting to watch. Recommend getting on board in small $s just to watch the show. Better than TV cos its real human behaviour.

ICOs way more crazy than the big ones-

Powerledger cracked 100M USD today and looks like heading higher still as the news of it spreads wider. No fundamentals can justify this - you would need at least 2 Australia's fully connected to microgrids to generate the transactions to justify this market cap.

Meanwhile quantstamp is closing early and "burning coins" (reducing target raising) today. Normally that would be bad news I would have thought but its being treated as good news (less supply = tighter market). It raised $29M without tapping china or the US. Will it be worth 100M when those buyers get access via exchanges? PL experience says that and more.

Interesting times

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Bara said..

ICOs way more crazy than the big ones-

Powerledger cracked 100M USD today and looks like heading higher still as the news of it spreads wider. No fundamentals can justify this - you would need at least 2 Australia's fully connected to microgrids to generate the transactions to justify this market cap.

Hey Bazza, how did you work out that valuation?

I'm interested because I have been looking into valuation metrics for cryptos.

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Underoath said..

Bara said..

ICOs way more crazy than the big ones-

Powerledger cracked 100M USD today and looks like heading higher still as the news of it spreads wider. No fundamentals can justify this - you would need at least 2 Australia's fully connected to microgrids to generate the transactions to justify this market cap.

Hey Bazza, how did you work out that valuation?

I'm interested because I have been looking into valuation metrics for cryptos.

Ill start by saying its deliberately murky in the whitepaper etc and there are NO NUMBERS provided at all so I make my own assumptions -

I know its international in scope but lets just use oz as the proxy for microgrids scattered in a bunch of developed high energy cost countries to get some numbers top down.

8m households etc in Australia ( assume they can all access a microgrid and that its economically feasible for them to do so due to "free " smart meters from somewhere - first nail in coffin but lets stay in fantasy land)

average powerbill $1600.

savings from swing trading equate to no more than 10% of those kwhs or $160 pa (being very generous here just look at a daily demand profile where everyone wants to buy at same time and sell at same time as well as taking off all the fixed cost components)
spkz the lower tokens are designed to take a cut of that so lets say 20% margin (10 from each side) there or $32 pa. (In time this kind of spread would have to halve at least i reckon)

IF the whole of Australia was hooked up to micro grids and trading thats a $256M market for transaction fees on a very very generous basis.

But all that market is delivering is a measly $128 pa best case saving to customers after transaction costs and assuming no start up costs when of course there are substantial ones. So how likely would that level of take up really be?

Power tokens are used to access spkz market (if you dont get given them for participating) so thats the fundamental demand for them. So a retailer or whatever wants to make a margin on that investment so assume they can make a 50% margin over their investment costs to participate or $128M for total powr demand. ( i reckon this is too high and would fall pretty rapidly but its a best case eh)

But heres the kicker - only 35% of the powrs were auctioned (the rest will be given to partners for participating down the track) so that gives you AUD$44M market cap IF the whole of Australia is hooked up.

A start up tech company wouldnt dare to dream of that kind of valuation on listing just 35%. So much blue sky on no actual real milestones.

Powrs maket cap this morning is US $140M or nearly AUD $190M so its now gone to nearly 4 and a half times the value of the entire Australian market potential over the weekend....

It's pretty amazing. AND with ICOs the owners of the company retain 100% ownership. Versus IPO or seed funding where owners trade ownership for capital raised.

Yep all equity retained by founders which is even more startling for sure. And dont forget no compliance issues like having to keep the market informed etc etc

AUD$280M market cap now! you should get on the telegram group its hilarious. guys are going all in at 7 times what they initially paid with small money just a few weeks back and at same time asking why has it gone up so much?

Hey gents ,

It may be overpriced now but if it goes global it will make billions and billions.
To be honest out of everything in crypto land right now it has many things that others with 4 x the market cap dont.
It has working r&d
It has a product
A use
Something people need
Something which can be used globally
Real people working there

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Razzonater said..
Hey gents ,

It may be overpriced now but if it goes global it will make billions and billions.
To be honest out of everything in crypto land right now it has many things that others with 4 x the market cap dont.
It has working r&d
It has a product
A use
Something people need
Something which can be used globally
Real people working there

Yes you are right Razz there is a product and it fills a real need.

It's got a really good story which has allowed a divorce from reality. Especially given there are no numbers ever provided on market size, revenue streams, margins etc its deliberately been left to your imagination.

But

The coins can only eventually hold a value reflective of the transaction fees they can earn when all the hype gets wiped out. Even my simplistic analysis should show you just what a tall order is already built into the price.

Even if it goes global there's only so many microgrids feasibly out there and there's only so many transaction fees to be made off the spread from buyer and seller.

I'm not going to try and work out the global pool that could be but it's sure not in the billions ( don't forget these tokens are only 35% of one companies share of one market segment)

^ if it makes billions that will be nice for shareholders.

My maths albeit how loose it is and taken with a pinch of salt is as below

8 billion people in the world
Maybe 1/3 have electricity ????(I have no idea?)

So 2.5 or so billion people who may have access to this product when online, lets say only 10% of them want to use it thats 250 million people all using 1000 per year that is a pool of electricity of only 10% of less than a third of the global population and we have a 250 billion of electricty been slid around the grid at probable 1-2c ????((( transaction feed per kw.

Look at this stage it is early early days but any company making around 2.5 billion a year is worth a lot of money more than the 250 million right now, this is all 10 years away however that could be a 10x or 20 x increase in value within the next 5 years....easily a lot more than that dependent on hype access to market and which country they roll out in.

Power ledger $20 by 2025??*????

PL concept is awesome. No doubt about that!

But Razz this is a start up and using that kind of maths is pure speculation.

Think about what's going on in the tech world right now....

Tesla could throw 200m at it tomorrow and be a mile ahead of PL. Who knows, maybe they're already.

Apple spent 5bn on a new office. It's 100% off the grid. They could trial a blockchain based electricity sharing scheme within their own office on a whim, on a scale much larger that any PL trial, and you probably wouldn't even know about it. Just for fun, after all, they've got 270bn in cash right?

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bene313 said..

evlPanda said..
I'm of the idea that the blockchain is the blockchain; The Bitcoin blockchain. (you can disagree it is the blockchain if you like. Please do.)

Hang on... earlier in the thread you said "it's just a currency".

Now it's the blockchain?

Big B Bitcoin is the blockchain/protocol and little b bitcoin is the currency that uses it. They're one and the same.

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Singapore disagrees
www.ccn.com/singapore-canadian-central-banks-unite-blockchain-cross-border-payments/

So does Brazil
cointelegraph.com/news/brazilian-central-bank-ramps-up-blockchain-rd-efforts

If the central banks could get their act together (they probably can't) and run their own blockchain for their own currencies, there is no real need for Bitcoin.

That's a centralised currency on top of a centralised blockchain. If one entity runs and controls it then you need all the security and vetting that you currently need for traditional banking anyway. And It's still open to theft and corruption and manipulation just like traditional currency. It's practically Soviet.

And what do you call an operation where an entity prints off money, and controls it, runs it, manages it? [cough cough]

All they will have is the same they already have on top of a really, really, really, frankly dreadfully inefficient database. Bitcoin makes this trade intentionally for decentralisation and security (from people).

Look, the entire civil war that Bitcoin is undergoing is all about centralisation. One side wants efficiency and abstraction, the other want horsepower and big blocks. Both say the other approach will lead to centralisation.

Nobody runs bitcoin.

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I think I get where you're coming from though Panda... Maybe... I just don't know how it would work...

Have a look at what is going on in ICO land. You have all these applications/concepts being introduced using blockchain technology. Take the business of Brave and BAT. In short this is blockchain based web advertising, cuts out the middleman and links advertisers to content providers direct over the blockchain. However in order to transact between advertiser and content provider, they need something to trade. So they create their own token called BAT, it ICOs and then is listed on an exchange.

And Panda what you're saying is that instead of using BAT to trade advertising credits, or use POWR to trade electricity credits, etc, etc, we should be able to buy advertising or electricity using only Bitcoin.

So my question is how? I give you Bitcoin and you give me what to represent my purchase of blockchain based advertising? The advertising itself? How will you provide advertising over the blockchain without using a token? Same as if I give you Bitcoin and you give me electricity - how? Because electricity isn't traded over the blockchain, that's what POWR is for.

Interested in what you have read about all this.

Surprise! Bitcoin can do smart contracts. See: coloured coins.
en.bitcoin.it/wiki/Colored_Coins

It's just not widely known, and the focus has been on bullet-proofing the Bitcoin layer itself.
(arguably the focus has been arguing about block size).

Biggest buzz at the moment is probably around RootStock:
www.rsk.co

There are others:
www.nasdaq.com/article/yes-bitcoin-can-do-smart-contracts-and-particl-demonstrates-how-cm859505

So, if you had a choice of using a smart contract on the Bitcoin blockchain or another ...?
I guess time will tell.

(And, do we even want ICOs on bitcoin? Alas, there's no way to stop it.)

I don't pretend to understand the underlying mechanics but it does read to be not too dissimilar to the way the Lightning Network works; a combination of money locked in time, from both parties, and a form of Mutually Assured Destruction in which both parties can steal all the money in the channel but whoever attempts it first has to wait 8 (?) hours, during which time the other party is alerted and can take all of it instantly.

i.e. some variables plus game theory.

checklocktimeverify:
github.com/bitcoin/bips/blob/master/bip-0065.mediawiki

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Underoath said..

Don't see crypto like a new "hot stock bubble". Bitcoin (and others) herald a fundamentally different type of asset class, a new type of money, and one with properties the existing financial system can't replicate.

Think: Letters -> Fax -> Email

After letters the internet came for publishing, shopping, media, music, movies, television, politics ...and it affected a million things in-between.

And now the internet is coming for money.

And the internet has money with much better qualities, baked in. You can open an international bank using your smart phone in five minutes minutes, with which you can trade internationally, near instantly, for (arguably) almost free/low fees, completely securely and anonymously. My kids can do it.

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Bara said..
I very much doubt the buyers now are looking at fundamentals though - more likely candlesticks.

I see there's an ICO to trade candlesticks with your neighbours now.

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busterwa said..
People are not buying Bitcoin because they intend to use it in their daily lives. Currencies need to have a steady price if they are to be a medium of exchange. People are buying Bitcoin because they expect other people to buy it from them at a higher price.

I'm one of many that thinks we'll live in a world where bitcoin is a common currency, perhaps even the currency. I'm exchanging now while it's cheap to do so, before I go there.

If it's not a common currency it will be because bad money has driven out the good, and it will be hoarded as a valuable asset, something not to be traded daily. This is what always happens when a better currency floods a market; you wouldn't use your $US to buy bread in Zimbabwe if you still had ...whatever Zimbabwe uses. You spend your bad money. You hoard the $US, perhaps chip into it from time-to-time.

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Razzonater said..
My maths albeit how loose it is and taken with a pinch of salt is as below

8 billion people in the world
Maybe 1/3 have electricity ????(I have no idea?)

So 2.5 or so billion people who may have access to this product when online, lets say only 10% of them want to use it thats 250 million people all using 1000 per year that is a pool of electricity of only 10% of less than a third of the global population and we have a 250 billion of electricty been slid around the grid at probable 1-2c ????((( transaction feed per kw.

Look at this stage it is early early days but any company making around 2.5 billion a year is worth a lot of money more than the 250 million right now, this is all 10 years away however that could be a 10x or 20 x increase in value within the next 5 years....easily a lot more than that dependent on hype access to market and which country they roll out in.

Power ledger $20 by 2025??*????

Yep Razz your maths is very loose! You should research what a microgrid actually is and why it can only be applied in things like a retirement village or an apartment building. Maybe a new estate down the track. Ie most people will not have access to them without major infrastructure spend.

The add to that this coin is just taking a small piece of the small gains these microgrids users can actually achieve like i showed and you get why the market size is nowhere near the numbers you are talking about.

Then add in all the potential competitors and you would be a fool not to have sold when it had it's run the other day ie it was priced for having achieved the majority of what it said it would do without doing any of it. Complete nuts!

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evlPanda said..

busterwa said..
People are not buying Bitcoin because they intend to use it in their daily lives. Currencies need to have a steady price if they are to be a medium of exchange. People are buying Bitcoin because they expect other people to buy it from them at a higher price.

I'm one of many that thinks we'll live in a world where bitcoin is a common currency, perhaps even the currency. I'm exchanging now while it's cheap to do so, before I go there.

If it's not a common currency it will be because bad money has driven out the good, and it will be hoarded as a valuable asset, something not to be traded daily. This is what always happens when a better currency floods a market; you wouldn't use your $US to buy bread in Zimbabwe if you still had ...whatever Zimbabwe uses. You spend your bad money. You hoard the $US, perhaps chip into it from time-to-time.

Yeah I reckon you are right about the bad money driving out the good as you say. I reckon we are seeing it as price speculation and irrational greed overtakes user demand for it as a currency.

As i see it the thing that will save btc as a currency is a massive bubble prick. That will drive out the speculators and allow for some price stability in due course.

Ironically one of the drivers for the recent bubble that is cme futures could well be the catalyst as like I've been banging on about it stops the market being bidside only and allows leveraged shorting that could over time burst the bubble.

That would be good for btc long term.

Who is actually using bitcoin on the regular other than dodgey crew on the dark web?

?list=PLn6GQG6VHVuS58tKe0QM5ZHXGJiMDMzR6

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djt91184 said..
Who is actually using bitcoin on the regular other than dodgey crew on the dark web?

No one, they use

Monero
zcash


These ones are untraceable.

Im interested in this money laundering well not really cause im a broke as nigger with kids. But im experienced. Im just fininshing season 5 of braking bad. How does one convert wads to bitcoin? do you rock up, hand some dude your wads? Do I pay a GST? I feel like I should be exempt from capitol gains. I been making colone ejuice for 3 months now but not many of my clients have not returned. Im not sure if its me or my product.

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Bara said..
Yep Razz your maths is very loose! You should research what a microgrid actually is and why it can only be applied in things like a retirement village or an apartment building. Maybe a new estate down the track. Ie most people will not have access to them without major infrastructure spend.

Ahhh... that's how (I thought it) works. Doesn't say that anywhere on their site. I thought that maybe they'd done some deals with major providers, but it didn't say anything about that either. Seems an odd thing to omit.

What's PowerLedger worth now? How many customers do they have?

...mind you there's a link to an October 2011 thread a few pages back where I said bitcoin was a dead experiment, so don't necessarily listen to me.

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djt91184 said..
Who is actually using bitcoin on the regular other than dodgey crew on the dark web?

There are rumours of Amazon and Uber planning to accept it. Nothing more than rumours, but plausible. Microsoft, Steam, Expedia, Virgin, and a few nerdy sites like NewEgg and Overstock do accept it. I've noticed Shopify has a plug-in. To be fair, not many.

I spend it for small items here and there, mostly computer stuff, art, and the kids' pocket money (no more stealing from each other!). I have used it a lot amongst colleagues to fix up restaurant and bar tabs. But no, I haven't bought bread with it yet.

One problem is not many are spending it, so there's no real demand to accept it. Because it is going up in value so fast. When you have currency A that is going up in value, and currency B that is going down in value, you spend currency B. Of course.

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Gresham's Law says...
In economics, Gresham's law is a monetary principle stating that "bad money drives out good". For example, if there are two forms of commodity money in circulation, which are accepted by law as having similar face value, the more valuable commodity will disappear from circulation. en.wikipedia.org/wiki/Gresham%27s_law

This is exactly what is happening. It's not indicative of bitcoin failing as a currency.

Do you ever see an Australian $100 note in circulation? Rarely, right? They're being horded, just like bitcoin. The $100 note is in practice better than the $50 note, and all the others. So nobody uses it.
www.abc.net.au/news/2016-02-19/australia-100-notes-used-for-tax-evasion-crime-expert-says/7181054

Bad money drives out the good.

[scary music]

Eventually the good money drives out the bad, as it becomes worthless.

Bitcoin is not being treated as a currency by it's users. It's part of their crypto portfolio.

And in order to buy other cryptos and participate in ICOs, traders first need some bitcoin. Crypto mania = demand for bitcoin.