At last the long needed consolidation
We were overdue. At a breakneck pace, ethereum rose from $8 to over $400 in just six months. Who does that? With crazy bubbles come crazy looking corrections. This is the problem when don’t have enough back and fills during your climb. There was little foundation propping up that hot air.
Almost as if on cue, my last regular post was to advise people to not get greedy and although I didn’t know what would be the catalyst, something was overdue to cool the market. I think it was the next day that it finally broke?
Funny how all my local contacts were in full on FOMO and I warned them about the (Fear of missing out) followed by the WATE (World’s About to End). In crypto bubbles, things are magnified and hyper-scaled. Run-ups of 20x- 40x have all had re-tracements of 80% dating back to 2012 if my memory serves correctly. With that in mind, 80% retrace of $400 would put us at about $120 ether. This would be perfectly normal. No idea if it will get that low this time but I would still consider it normal.
Late August, Early September I suspect we will hit a flurry of good news that will likely get things kicking again. Until then, enjoy the nice cheap ether while it lasts. 80% drop is usually enough to shake out the newbies that couldn’t wait to buy in at $400 and ride that elevator to heaven, will now sell with reckless abandon and swear to never invest in these crazy cryptos again.
True experience and wisdom in the land of crypto is a rare, almost mythical ghost, kind of a thing. Don’t take advice from idiots.
* Not financial advice – occasionally I’m wrong.
Hi I have appreciated your posts. You and Mr Smilth have peaked my itntrest in cryptocurrency. I am more of a Luddite than anything. But after learning I see real value in the technology. I prefer a simple life but I can see so many possibilities with this technology. I have no computer background so some of the language goes over my head as I try to decipher cryptocurrency white papers. And now the 800 plus coins it seems to get thicker.
I can be anyone's game. How familiar are you with dash? The more I learn about it the more I want to learn. It seem they are trying to address a number of problems I see. The instant transaction being one. I have had a number of problems with some of my bitcion transactions sometimes lasting more than three days in the unconfirmed transaction pool. That's a big problem I think. I looked at dash and I wonder what you do to assess a tech? I mean someone could totally take me for a ride and I would have no idea what was possible fairy dust or a lie. From the little I have learned I see Etherum in a different playing feild than other coins. I'm still trying to rap my mind around this but coins like Golem and BAT are Erc-20 tokens that run on the Etherum network? My instinct is that if they correlate and if they succeed it helps etherum and etherum succeeds it's a Boone for Erc-20 token companies with real promise.
So if I can group coin investments as etherum and Erc-20 being somewhat correlated. And others based on white papers and other similarities. Combined new innovation with ease of use and who is first to gain a critical mass of the market. I know there are a few that like bitcion because of disconnection from banking debt creation. My initial interest was this a safe haven for my deposit at the bank. But I don't see etherum that whey at all. It's a lot more than a exchangeable unit of a account on a ledger.
I do see the importance of these emerging companies but a DAO is hard for my mind to rap around. How familiar are you with Dash DAO and governance structure? As I learn it seems they understand something's that bitcion does not. Like insentives for full nodes and voting structure. I wonder about companies like Golem if Etherum has problems. And what if Golem has problems how does one find out? do you go to DAO headquarters? It's a silly question right. I'm so fascinated by DAO organizations but if insentives are not structured properly with in the networks entropy will result.
This is a creation phase a lot of energy and innovation. That's great but people in a DAO need the right insentives. Goverernance if you will, what is a good structure? There is so much speculation, myself heavily included. I want to know so much more than I do. Love to hear your thoughts on DAO governance and insentives that you see working in the future.
You bring up a lot with your post so I will cover some of them as there are many posts to be made more clearly rather than one big complex long one.
Dash… Is turning into a surprising coin for me. I bought a bunch when it was a few dollars as just one of many I buy just to keep an eye on it and it's easier to do if you have skin in the game. There are 800+ coins but 90% won't amount to anything in my opinion and can be thought of as experiments – or scams. Unfortunately, we have scammers in this new wild-wild west frontier of Cyrpto-land.
In many ways, Dash was a pioneer. They were the first to have a governance board to help lead direction in a somewhat centralized manner. They can pay for marketing with a small budget so it's not just miners that get the profit. They have a 'dark send' option that mixes the coin and pays the 2nd layer of operators to act as mixers for a slightly higher feed paid to them as a service. This helps ensure privacy somewhat. The feature is where it got its start.
They've slightly veered from the 'dark send' being their only distinguishing factor and are pushing more to be the 'everyday payment platform'. If they can get a lot of people in agreement to use their wallet and network over bitcoin, they definitely have an advantage. For a while.
There are many competitors in the payments blockchains. Many of them are working directly with credit card companies – or creating their own mobile payment platform to integrate with current technologies. Some of these new services will use a basket of crypto one keeps on deposit so it won't rely on just the success and popularity of one asset. Dash itself might be a digital asset of value included in a personalized basket. However, the infrastructure already exists with credit card systems. So they won't have the problem Dash faces which is to rebuild new roads. I don't know if there is enough incentive for actual real companies to retool for a Dash or Bitcoin. There are many additional features these newer tokens based on Ethereum's ERC-20 token design that I'll get into on another post.
Your sense is good that the combined network effect of all the ERC20 tokens makes the network effect of ethereum much stronger as the 'go-to' railroad system of this new frontier. This is the promised land where the talent is congrigating and building the common tools of this century (as in computer code blocks that act as functions), These functions have inputs and outputs with 'stuff' going on that you can plug into many programs like legos. There are tens of thousands of new programmers learning the programming languages of Ethereum and it will be very difficult for anybody else to entice them away from the safety of this pack to start over and learn a new way of another railroad system that has few 'towns' along its tracks.
Many will head to these new lands promising of gold and fortune. Likely, few will be successful in the long term just as in the 'real world'. They key is to have enough experience and wisdom to know which is which.
This is such a new world of knowledge. I bought a Trezor because of your advice. At first I just had my bitcion on Coinbase. Come a long way but so much more to learn. It will be fun to watch and see how some of these plays pan out.
Dash's spitting of mining makes so much sense to me. There has to be insentives to keep full nodes. Making decisions that effect the network quickly. Its so opposite to my natural thinking. It is such a dynamic world. Thank you for your time.