Ethereum

Sep 04 2022

The Zipper Merge

Kid 2 is taking driver’s education — a rite of passage here in the U.S.A., though less so in these modern times, where your every everything is catered to by things like apps, mass transit, Uber, and that concept of “prolonged adolescence” exacerbated by the response to COVID — and likes to tell his parents about how much he’s learned. This also means we have to relearn some things where “The Science” used to be settled (“10 and 2!” is now “9 and 3!”).

Which brings us to “The Zipper Merge.”

Why Not A Video from the Province of Alberta?

We’ve been merging all wrong, it seems. Wait til the very last minute, use both lanes, and Bob’s Your Uncle.

Ethereum’s Zipper Merge

If you’re like me — laser-focused on ETH for months, then there was an implosion in prices and you cut your losses and moved on to other things, like making a living — then the Ethereum Merge has sneaked up on you like a construction zone on US-55. What do you do with your ETH? Do you have any ETH2? Do you know the difference? Do you care?

Understanding The Merge

Long story short, The Merge is where Ethereum moves from “Proof of Work,” or a mining environment that is similar to Bitcoin’s (but not as profitable) where miners are rewarded with coins for proving validity of transactions, to a “Proof of Stake” system, where owners are credited for staking (“parking”) their assets.

Y’all ain’t getting Web3 without Proof of Stake, so that’s where it’s headed. But not without a meandering road with a few…forks.

Once The Merge happens, rumored to be in a couple weeks but certainly in September, ETH will likely see some changes to its price — maybe mad fluctuations? — and it’s going to be bumpy.

So get yourself some tunes and buckle up for the ride. (No, we don’t know who to believe either.)

Some Thoughts THAT ARE NOT INVESTMENT ADVICE

These thoughts are not investment advice. But here are some considerations…

You Could Leave It All There*…

So yeah, there’s option one. For instance, I have some ETH parked on MegaCryptopolis. The game site is migrating to its own whole new world, so there’s not much choice I have in the matter. Whether I’ll get an airdrop there is another question: rumors abound about airdrops and whether they’ll happen, or not.

And if you *do* leave it all there, you’re looking at — thanks to calculations from Bitmex, with which we cannot trade in our region, natch — $45 per ETH.

Whales will make out like bandits. The rest of us could get a nice dinner out (after taxes, because, well, our jurisdiction will tax the airdrops like income and whatnot).

BTW, the Asterisk above means those assets you have parked in DeFi tools and other…things…like MegaCryptopolis. Or Sushi. Or a Uniswap pool.

…Or You Could Take It All Out of DeFi…

That’s another option here. Probably a pretty viable one, too, if you’ve lost any money from a rug pull. (Who among us?)

The thinking: you can’t trust anyone with your ETH so you might as well take yours out, and certainly take it out of any DeFi protocol with a high potential of rug pulls.

Sensible thoughts, but here’s option 3, which is where we’re landing:

…Something In Between

Here’s the winner.

We yanked some of our coins out of DeFi things, and we traded out of some duds to get ETH a couple weeks ago. BUT, we’ve also done that “why the heck not?” thing with a few. Holding a little in a pool of SUSHI and ETH, a little more in a couple barely there pools.

And holding tight.

We’ll All Be in One-Lane Traffic Soon

That’s the guess: from Proof of Work to Proof of Stake, some folks will head off onto side roads, others will go off-road, and we’ll stick in this lane for a little while, while holding a piece of one of those four-wheel drive things.

Hoping it’s not a Yugo.

Feb 20 2022

When the Growth Portfolio Doesn’t Grow

We’re on a mission with the 2022 Growth Portfolio. We’re just not yet sure what that mission is.

When we jumped into the fray with our own mix of ten tokens to potentially invest in — and of course you should DO YOUR OWN RESEARCH — the thought was as follows: get a basket of tokens and ride out the 2022 market with it.

Up? Down? Sideways? Stalwarts like Bitcoin and Ethereum? Up-and-comers in Web3 like $ENS and $MAGIC? Yes.

So maybe the mission depends on the markets; a basket like this can help you ride the ups and downs.

And, So Far This Year, Lots of ‘Downs’

So we’re taking one on the chin so far.

That, my friends, is an understatement. Bitcoin’s doing fine when compared to the others — but still down nearly 20 percent — and Ethereum has been down and then a little back up but still down in 2022. To wit:

No time to do any touchdown dances or victory laps: this is not good performance. What gives?

We Don’t Know Why. Time to Catch the Falling Knife?

This is the question I get pretty often: have we hit bottom, or is it time to catch the falling knife? And, from the school of “IDK, DYOR,” I can posit a guess or two but invite you to study this on your own.

Guess One: Global Unease Equals Meh Performance

If I see one more post about “this is the time for Bitcoin” using the context of global geopolitical events as proof that this is the time for Bitcoin, I’ll scream.

However, you *could* guess that people in places like Canada who have had their bank accounts frozen might see a little truth to that. If you can’t even get money out of your bank then, well, this may be the time for Bitcoin.

Hilarious.

Many people called this: not your keys, not your coins. pic.twitter.com/IGblbjOwJu
— Dave Van de Walle (@Area224) February 20, 2022

(Also, if governments don’t understand how these things work, they may only choose to regulate them further. Will that push any and all coins into an oblivion? Will that lead to a black market for all things? Will that drive everything higher?)

Guess Two: Is There TOO Much Crypto Noise?

Is it possible that the ads from Larry David and Lebron James have rendered some of us inured to the noise around the subject? I mean, not the OGs like you and me, natch, but the rest of the world.

Nobody really knows what constitutes a good deal these days, so the newbies jumping in might not care if Bitcoin is $35K or $25K. And so on: for assets without earnings seasons and dividend payments, you’re flying blind.

Celebrating Our Only Good Pick So Far…

“Even a blind squirrel finds a nut every once in a while.”

We got lucky with $MAGIC. Somehow, at treasure.lol — that’s the web address! — they’re building a pretty cool…ah…uh…whatever they’re building. But trust us, it’s at the intersection of NFTs and gaming and crypto writ large, so we’re there for it.

We had mentioned it a couple times before on these pages, most recently in this post: How to Spend $1000. And we’ll ride this for as long as is feasible.

Today’s Takeaway…

We have mentioned this is not investment advice, right? And that you should do your own research?

Yes, that. Also you may or may not be better off being lucky than being good.

Dec 06 2021

A Month Later: Is $ENS the Perfect* Web3 Token?

If you were lucky enough to grab some $ENS, the token from the Ethereum Name Service project, congrats! (If you haven’t but think you may be entitled to some, there’s still time. Go here: ens.mirror.xyz and take a look.) The token dropped into wallets on November 8 and it’s been nearly a month to watch it unfold, so we thought we’d examine a little further.

The price chart has been a thing to behold: if the average user got a couple hundred $ENS tokens, and those are now trading in the low $40 range, an $8000 or $9000 payday is nothing to sneeze at. Pick out your Christmas gifts — so long as they’re not negatively impacted by the supply chain — and rock on!

Not Bad for Playing on the Internet for Three Years

But, long term, is $ENS all it’s cracked up to be?

First, the Background

We actually talked about this in our post from June 2019 called “Playing the Long Game.” Back then, we didn’t really see the prospect of an airdrop coming, we were just looking for a combination of Ethereum Cybersquatting and Finding A Cool Domain Name.

You can register a bunch and they only cost about $5 a year; we registered several and use one of them as our principal registry.

In theory, we could use one of the ones in our stable, like “jamiedimon.eth,” and set it up to give and receive tokens. (Or you could try to sell it to JP Morgan Chase, which the owner of the above coin appears to be doing.) (Note that it doesn’t take an internet super sleuth to figure out that the author of this post owns jamiedimon.eth.)

If you think of these dot-eth domains as your portal to Web3, the metaverse, AND your crypto holdings…that’s a pretty good way to look at it. Now, let’s do a little analysis.

‘I Promise, It’s Perfect.’

That was the tagline from a golf club that was sold in the early 2000s. Called “The Perfect Club,” it could get you out of trouble, like tight lies, and suggested that mere mortals like me (with my handicap of…well, let’s say it’s not pretty) could use it on shots from about 190 yards out and drop the ball on the green with minimal effort.

I don’t remember seeing an asterisk — * — like the one in the headline of this blog post, but it should have come with one. Especially when the announcer himself said “I Promise, It’s Perfect.”

But the question at hand, and where the asterisk leads us, is whether or not $ENS *may* be the Perfect* Web3 token.

Here are a couple reasons — and yes, this is not financial advice and you should DYOR (Do Your Own Research) and we’re not responsible for your gains or losses — why $ENS could be the on-ramp to Web3.

The Analysts Are Taking Note

Van Eck is kindof a big deal. One of their analysts did a pretty solid analysis of what’s going on with Ethereum domain names, the bread-and-butter of the ENS entry point to the rest of the investment world.

We’ll link to Matthew Sigel’s post here, and we found it more than a little interesting (in a good way) that Sigel compares the ENS domain business to Verisign. (We also didn’t realize Verisign was such a stud.)

Van Eck’s Sigel summarizes the dot-eth trend better than we could right here:

Plus the Airdrop Means Fewer People “Heading for the Exits”

Here’s another aspect to look at: when you have projects that make people rich very early — not just crypto or Web3, but IPOs, too — you always run the risk of a “cut and run.” For instance, a Junior Software Developer signs up for a gig at a startup, is given some options, and the startup IPOs. Whenever the lockup expires, the developer gets bored, has high-six or low-seven figures in cash, and heads straight for the exit.

Because of an airdrop that didn’t end up with tons of rich people, and with no VCs taking part, the result is that nobody (aside from the founders, who are in this for the long haul) got super rich. The lack of “F*** You Money” makes this a potential winner.

AND…It’s a DAO

This would be the third reason this is so huge: governance.

DAOs are Decentralized Autonomous Organizations. Simply put, they’re designed to run with limited involvement from management, delegating votes on a variety of governance issues to a team. To collect your $ENS tokens you had to vote on a series of proposals and select a delegate to vote on your behalf.

They’ve built a black box and the management of that black box is in the hands of the team of delegates, but proposals to change the way the black box functions take a majority. And some of it is immutable — like the DAO can’t really go out of business — so they’re definitely looking at this with a decades-long time horizon.

Should You Buy at This Price?

Again, this is not financial recommendation, and do your own research.

But the token itself is right around the top 100 in market cap and it’s just north of $1B. Compare and contrast that with tokens like $SHIB (~$19B market cap as of this writing) and take a look at the functionality of $ENS in comparison with other tokens ($SHIB has a cult-like following and has rocketed upwards, but is it really THAT valuable?).

$ENS might not be a bad bet in the grand scheme.

Good luck.

Jan 18 2020

A Balanced 2020 Crypto Portfolio

We struggled with this one for a little while, and you can’t really blame us: 2019 was a meh year for crypto, and our typical portfolio wouldn’t exactly be the way to go for 2020. Plus, a bunch of new entrants — both projects and categories — caught our eye last year.

Our first question: Does the BRED Portfolio makes sense anymore? Given the fact that Bitcoin had a good year and the others didn’t, does the mix of Bitcoin, Ethereum, Ripple’s XRP, and Dash still give you the kind of portfolio that will propel your crypto investments into the stratosphere?

ALSO, it may not be about the “into the stratosphere” anymore for you. And that’s okay. In any event, we have to figure out if there’s another way to do this.

First Up…How Did BRED Do?

Glad you asked: weird year for sure. Let’s look at the numbers:

2019 BRED Portfolio — Down a shade, but not insane, but…

So, in the interest of consistency, here’s what the 2020 BRED Portfolio would look like.

However, we don’t think this is the kind of portfolio to focus on for the year(s) ahead. We’ll give a couple reasons why we *think* there’s a rebalancing ahead.

Bitcoin still makes sense, but Ethereum less so.
Ripple is working on a ton of partnerships, but hasn’t grown like before.
Dash didn’t catch fire on the consumer-facing front.
Way too much else going on.

Let’s Follow the Trends and Create a New Portfolio

Without further ado, here you go: the 2020 Crypto Balance Portfolio.

So, what have we done here?

First Up, MOAR Bitcoin

If a stock went up 90% in a year, would you still want it in your portfolio? Or would you take profits?

Good question, and we address that at least a little by (a) keeping BTC in the portfolio and (b) ratcheting it up to 30% of the overall $10,000.

While I wouldn’t go so far as this commentator who thinks Bitcoin will go to $400,000 after its “halving” (when the mining rewards for Bitcoin are cut in half) in May, Bitcoin has cemented itself as the blue chip of cryptos during the past couple years.

You’ll also see that, in this Crypto Balance portfolio, we’ve ignored the forks. If there are notable forks this year, we can take those into account; but “forkening” isn’t that much of a deal the past couple years.

Ethereum, Still, Has a Role

We’ve done some writing on these pages about projects like Megacryptopolis; you can’t play with any of those NFTs, and you can’t trade any assets on OpenSea without ETH that’s in a Metamask wallet (or some other ETH wallet).

Ethereum is really a two-sided coin (ha!) — with quite a few bearish cases on the internet, and a few bullish ones, too. We think the bullish case outweighs the bearish case, though. We’re keeping it in, but dropping it down to 20%.

About the Other Five…

If our goal is a “balanced” portfolio…uh…what the heck does that mean?

In our case, we achieve some level of balance with the other 5 assets in this portfolio, each at ten percent:

XRP — The coin from Ripple still aims to underpin bank transfers, a la SWIFT. Also, if you still believe in the long-term prospects of the project, under a quarter per coin is not a bad deal at all.

MCO — We lurrve this coin. (That’s a technical term, like HODL.) Not just because you can get some for free just by jumping through a couple of hoops [DISCLOSURE ALERT: AFFILIATE LINKS IN THAT ARTICLE] but because they are doing the regulatory thing correctly. We’re American, and bank laws are pretty important to follow.

EOS — I’ll admit to still being really skeptical, but also see the benefits of owning some EOS as an anti-ETH.

VeChain (VET) — This has potential, thanks to the Toolchain, to be the standard corporate “Blockchain-as-a-Service” solution. Partnerships right and left throughout the world. Tremendously undervalued.

VET Website Screenshot — VET’s website tells you what they’re up to.

PAX Gold (PAXG) — One really clever idea is to tie the price of a coin to an ounce of gold — so it’s like Tether, but with gold behind it. Also helps the “gold bugs” get into crypto while helping the crypto bugs get into gold.

And…There You Go

Whether this will catch fire like the 2017 edition of BRED or stall like the 2018 edition of BRED or do nothing like the 2019 edition of BRED…all that remains to be seen. But the plan is that we’ll track both all year and see what happens from there.

Stay tuned. 2020 should be interesting.

Apr 15 2019

The 2019 Tax Day Crypto Portfolio

Happy Tax Day, ‘Merica!

If you’re visiting this site from elsewhere in the world, welcome! Great to have you here. We Americans have a deadline of today to pay our Federal income taxes and boy is that fun this year. You may have heard about a tax cut last year and the ensuing OMG factor that came next: “the rich paid nothing and I don’t get a refund anymore!”

That’s not entirely true. Because of withholdings and how much some people had – or didn’t have – taken out of their paychecks, it *sounds* like lots of people had smaller refunds this tax season.

Some of you, though, may be getting a little money back. Or, in this roaring economy, you may find yourselves with cash to spend, or invest.

We’re here for ya!

What Happened to Our Other Portfolios?

Oh, you mean like BRED and the “Hedge Fund?” Well, as we spend our time getting this site back and running after the “Crypto Winter,” we plan on revisiting those, too.

For now, though, we’ve decided to give you three options: Small, Medium, and Large. DO YOUR OWN RESEARCH, this is not investment advice, and remember that you may lose a little, a lot, or ALL of your capital with anything.

Here goes.

SMALL PORTFOLIO (Like, $100-$500)…What to Do, What to Do?

TBH, we’d stay away from speculating on high-fliers. We’ve been there, it can get ugly if something goes completely belly up.

In fact, if you want to spend all of your small portfolio on crypto, here’s what we’d recommend:

First: Divide it in Half

Let’s use $500 as the number here. Take half and just put it in a Coinbase account and leave it there. You can get one of 11 currencies at Coinbase (THAT’S AN AFFILIATE LINK OVER THERE AND YOU CAN GET A BONUS AND WE GET A BONUS, TOO, WITH QUALIFYING PURCHASE) and we’d stick with Bitcoin, Ripple, and Ethereum (or just pick one) and leave it there. You’re in the game with $250 and you won’t feel the need to play around. Which brings us to the other half…

Then: Play Around

We’ve made no secret here that we’re now taking quite a deep dive into a crypto gaming community called MegaCryptoPolis. (ANOTHER AFFILIATE LINK THERE.) For this, you need Ethereum and a Metamask account to keep the two safe and in sync.

We’ve had fun so far with this game – we’re playing with house money, so to speak, as we cashed in “Airdrops” from the past couple years. If you look at your tax refund as house money, you might have some fun, too. Plus, there’s a bit of a gambling element, in that you’re taking a chance on which cool “Citizen” you’ll end up with. Here’s our favorite so far, she means business and we’ve named her “Sloan.”

MegaCryptoPolis “Professional” Who Means Business

MEDIUM PORTFOLIO: $1000-$5000

With this portfolio, we’d suggest you figure out how much – if any – speculation you want to do, and how much you just want to park in something (somewhat) safe.

If you’re not the play money type, then you can consider revisiting BRED: “Bitcoin, Ripple, Ethereum, and Dash.”

We just went back to the concept of dividing money equally between the four “core” coins of the BRED portfolio. We also considered “forks” by investing proportionally between the two forked coins; i.e. since Bitcoin’s price is roughly 19 times higher than Bitcoin Cash (BCH), we invested 19 times as much in Bitcoin.

Here’s what it looks like as of this morning:

This is also a “set it and forget it” portfolio — with the idea that you’re not going to spend way too much time looking at the price growth in any of these.

You also may not get rich off of this portfolio, either: assume that the ship has sailed on the OMG I’M RICH!!! portfolios of a few years ago, as you’re not getting in on the ground floor on XRP (the coin from Ripple, which is why it’s known as “BRED” in this portfolio) with the hopes it will go to $20,000 per.

But this would be a good, safe, crypto bet if you can afford it.

WHALE PORTFOLIO: $5,000 on up

Okay, look at the below chart of seven currencies’ “sparkline” graphs from the past seven days. Fourth from the top (nearing its high) and seventh from the top (all upside last week) look most compelling. Curious?

These two might be somewhat worthwhile to take a stab at. BCH is Roger Ver‘s Bitcoin fork – “it’s the real Bitcoin” is what he’ll tell you. BNB is Binance Coin and that’s an equally compelling Asian crypto exchange that’s always doing interesting things – such as burning its own coins, which Twitter friend @BambouClub tells you might be right around the corner.

Both of these large coins — the above chart is from the Top 7 by market cap — and both are likely to be around for a while. We’d suggest considering them as part of your WHALE PORTFOLIO (said in all caps because why not) and here’s how that *could* look (DO YOUR OWN RESEARCH!):

60 percent BRED
20 percent Large Market Cap Coins, with 10 percent each in BCH and BNB
20 percent on interesting use case coins — projects in which you see potential.

That third category is where you’ll have to, again, DO YOUR OWN RESEARCH; you’ll also need to rely on gut and also sort through whether they’re good blockchain projects, good crypto exchanges, good business models, or just good ideas. Or all four.

Since you’re doing 20 percent in this category, you can pick three or four and, if any one of them goes belly up, you won’t be totally rekt.

Ideas for This Part of the WHALE PORTFOLIO

Here are a few projects to check out:

BitTube (TUBE): Someone’s going to try to take on YouTube’s market dominance and do it through the blockchain. BitTube is one such player (though, honestly, PewDiePie is headed over to DLive, which is on Steemit, so maybe his name recognition gives that platform an advantage).

Storj (STORJ): Decentralized, blockchain-enabled storage is a concept that we’re sure will take off. Whether it’s Storj or someone else remains to be seen.

Quantstamp (QSP) bailed us out in the past by analyzing smart contracts. You buy some of their coin to do that and it’s a pretty seamless thing.

And Paragon (PRG) is doing the cannabis thing — fits and starts during their development but worth looking at, as they now do both a “WeWork-for-cannabis” and a “seed-to-sale” tracking platform.

UPSHOT: Your Tax Refund Can Work For You, Maybe, With Luck

We’re just here with a few ideas, that’s all. And Lord knows there are folks anxious about getting back in, and curious about whether we’ll see another bull run ever. So, again, look around, do your research, and, if you’re ready, dive in!