cryptonomics

Apologies for being reclusive over the last couple months. I've been a little busy relocating. Lets discuss some of my favorite topics: monetary policy, global trade, and (you guessed it) cryptocurrencies. First: Hyper inflation, bad... very bad. very very very bad. controlled inflation, ok. Inflation has taken a beating throughout the blockchain community. Mainly from Bitcoin Maximalists. Scarcity, along with supply and demand, creates value. However, scarcity also leads to a decrease in the velocity of money, and lead to hoarding. Why? When resources are scarce, humans conserve. Think of the price of oil. When the price of oil is high, the price of gas is high. When the price of oil is low, the price of gas is low. You can see the correlation by comparing the next two graphs. The price (USD) of oil per barrel. Chart by MacroTrends The price (USD) of a gallon of gas. Chart by  Gas Buddy When oil is abundant: supply goes beyond demand (most recent 2014), and p...

In my unprofessional opinion, an ICO (Initial Coin Offering) will replace the IPO (Initial Public Offering) just like the Decentralized Exchanges (DEX) will replace current exchanges, and Atomic Swaps will be fluid in our daily transactions. This will take time, as regulation will be made, and our understanding of blockchain deepens. However, we already have had many ICOs, and we already have a few DEXs. An ICO should be looked at as an unregulated way for a firm in the crypto-space to raise money, and fund their project(s). It is a way for crypto-firms to bypass regulation and raise funds quickly, while jumping onto the cryptocurrency hype, so caution must be taken as most crypto-enthusiasts see ~90% of ICOs failing. In the ICO's current state, when you purchase a coin/token, you don't own a share of that firm. The firm isn't required to disclose information as they would after an IPO. However, if there is a lot of buzz around said firm, their token value theoreti...

We live in a day of globalization. Technology has delivered ways to communicate with one another through miles of under water internet cables. Transportation is slowly becoming cheaper and more innovative; from captain-less cargo ships transporting goods across the globe, to the possibility of hyperloops from Dubai to Abu Dhabi or LA to San Francisco in less than 30 minutes.  30 minutes to travel 380 miles which is 6 hours in a car. In this fourth industrial revolution, why are we still allowing banks to take days to complete a transaction? Cryptocurrencies are the next step to globalization for consumers and businesses alike. These digital currencies will break down currency barriers, and allow everyone to exchange goods and services with little to no fees. There will be no need to exchange currencies through a third party, as you have millions of super computers hashing away for you. Hackers? pfff, not really something to worry about as they would have to take over 51% of thos...

As I was skimming twitter  the other day, I came across an opinion (via  marketwatch ) piece that was critical of Bitcoin. The author pointed out some minor flaws; mainly with people's knowledge on bitcoin, especially among its fanboys/fangirls. I recently had the opportunity to meet with a fine gentleman, Jim Clawson, who has been involved with the idea behind cryptocurrencies for decades. In 1997 he was issued a patent that deals with the fundamental aspects of blockchain tech. With the knowledge I have attained on bitcoin's subject matter, it seem's that it is my obligation to respond to some things that opinion piece mentioned. 1. What is the purpose of Bitcoin? According to Bitcoin's White Pages , the purpose of Bitcoin is to provide peer-to-peer electronic cash or digital currency. This true digital currency would allow users to send payments directly from one party to the next with out being boggled down by the financial institutions, and their lengthly tr...

Bitcoin Lets go over some of the basics about bitcoin. Cryptocurrency vs Altcoins . The only difference is that cryptocurrency covers all digital currency (Bitcoin and altcoins), while altcoins are alternatives to Bitcoin. Blockchain is a digital ledger where transactions for cryptocurrencies are publicly recorded. The blockchain is stored on nodes, that verify transactions. Bitcoin Mining  sounds intense, but only for the computer. When a computer is "mining" it is racing against other miners on the network to solve a mathematical equation and seal the current block. Cryptocurrencies are digital assets that can be bought, sold, traded, transferred (etc) digitally. The network for cryptocurrencies is virtually impossible to hack/manipulate since a dishonest group would have to take control of 51% of the network. The network is huge. Bitoin's network is in exohash sphere. Similar to precious metals, cryptocurrencies can be broken down into smalle...

If you haven't exchanged a form of fiat currency for bitcoin/alt-coin, then you basically have managed to sit on the sidelines during the coolest innovation of our times. The altcoin movement will be bigger than the change from horse pulled carriages to automobiles, mail to e-mail, dial-up to broadband... you get the point. Altcoins are a fabulous innovation that can cut transaction time from days to seconds.  These future currencies don't come without problems, the biggest being how unstable they can be, but that will change as people have less and less reasons to sell. Until then, this is true. At times, altcoins can seem to be driven by pump-and-dump traders; not investors or users. The volatility of these markets could make the strongest human bipolar. For now, take a long position  Diversify Then only throw as much money as you are willing to lose