Monthly Archive: November 2018

Litecoin’s future viability

Jain assumes that the LTC community has another aberration: namely the assumption that the low transaction fees can also be maintained in the future. However, Jain considers this unrealistic. The transactions would become more and more expensive due to the periodic halving of the block rewards. Although this is also the case with Bitcoin, it does not try to stand out by low transaction fees. LTC will reach its limits as early as 2028 when the number of transactions is no longer compatible with the network’s security mechanisms and low transaction fees:

“If the Litecoin community wants to maintain the current narrative “History of cheap transactions” (currently 0.0008 LTC per transaction), the number of transactions necessary to maintain the security of the network will exceed the capacity of the network to process these transactions.

It is also a warning signal that Charlie Lee sold all of his LTCs in December 2017, at the height of the crypto-hypes:

“A founder who sells all his property is a massive red flag. Lee cited reasons such as decentralization, financial distance and other conflicts of interest for his sale. Despite his intentions, there is now a misalignment of incentives that reduces his motivation to develop the protocol further. To better achieve this goal, we would have liked him to have limited his holdings or used them to finance further LTC development.”

Jain concludes his cryptosoft analysis with a gloomy outlook for LTC:

“Litecoin has traded between $41 and $358 in the last 52 weeks. With an exchange rate of around 50 US dollars, we consider cryptosoft to be significantly overvalued. In the absence of a viable investment thesis, lack of positive catalysts and strong negative catalysts, we expect LTC to remain significantly underperfomed in the crypto market”. Here is the full review.

Here is also the desire father of prognosis. Multicoin makes no secret of shortening LTC, i.e. the hedge fund speculates on a falling LTC price.

Charlie Lee shoots back at crypto trader

For this reason, Charlie Lee also dismissed Multicoin’s article as FUD gibberish circulated by interested crypto trader parties. In an eleven-tweet defense speech, he uses a similar format to Jain’s. Where Jain divided his argumentation into narrative (here: Is Crypto Trader a Scam? Read This Review Before You Sign Up!) and analysis, Lee first names the FUD statement and then his counter-argumentation (“TRUTH”).

Lee counters Jain’s postulated lack of unique selling points in LTC with the fact that Litecoin has one of the most secure networks. The security is guaranteed by ASIC miners worth over 150 million US dollars, and LTC dominates the crypt mining market.

Jain’s argument that LTC could become osbolet through new solutions for the scalability of Bitcoin, above all the Lightning Network (LN), does not apply to Lee either: Many LN clients already support LTC because they know its value. Atomic swaps also make it possible for LTC and BTC to be compatible in the Lightning Network.

Lee replies to the statement that LTC as Bitcoin Testnet is not worth 3 billion US dollars:

“Even if Litecoin were to function exclusively as a Bitcoin test network, its value could never be expressed in absolute figures. You have to relate it to Bitcoin. LTC’s market capitalisation is only three percent of BTC’s market capitalisation. That’s not much at all.”

A conspiracy against Litecoin?
Lees Tweetstorm, half argumentation, half LTC advertising, concludes with his response to Jain’s accusation that he had dried up his lambs in December 2017 and has not cared about Litecoin since. Lee replies:

“I work full time for Litecoin and concentrate on the Litecoin adaptation. The proof: The fact that I spend time writing these eleven tweets!

Finally, Lee gathered his church around him:

“Litecoin also has the strongest crypto community.”

Even though Lee never explicitly refers to Jain: His replica obviously refers to the multicoin article. Whether a critical article is sufficient to speak of a “concerted action” like Lee remains questionable.

Social media giants get blockchain competition

Content creators are increasingly migrating to blockchain-based Facebook and YouTube counterparts. Steemit, DTube and LBRY attract with new payment models and new audiences. This migration increases the quality and quantity of available contributions on the new alternatives. This makes the networks more attractive for new users.

Facebook and YouTube are the news spy

Steemit is a social network in which users are paid directly for the news spy. The Steemite crypto currencies Steem-Dollar and Steem-Power are used for this purpose: The News Spy Review 2018 ยป Full Scam Check. We have explained exactly how this network works here. There are now about one million steemem accounts. That’s not much compared to Facebook; 120,000 new registrations in March 2018, however, testify to rapid growth.

The DTube blockchain platform is based on YouTube and is designed for video content. Like Steemit, DTube uses the STEEM blockchain. Accordingly, users are also paid for their activity in Steem Dollars. There are no advertising clips in front of the videos like on YouTube. One example of DTube’s success is the YouTuber “Furious Pete”. His videos on weightlifting and eating out follow almost five million people on YouTube. Nevertheless, some of his videos appear exclusively on DTube.

LBRY is a platform for films. Artists make their work available directly to the target group. The idea behind LBRY is that artists can market their work without giving an intermediary platform like Netflix or Spotify control over payment. LBRY now has around 600,000 registered users.

Reasons for the success of the Bitcoin secret

Steemit, DTube and LBRY have one thing in common: they offer their users a fair and transparent Bitcoin secret payment model. However, the big competition is increasingly caught in the crossfire of critics, for example because of the distribution of advertising revenues through YouTube. The data scandal surrounding Cambridge Analytica also motivated many users to leave Facebook. Competitors benefit from this.

It is unlikely that the mainstream platforms will refrain from trading their users’ data. Steemit and DTube, on the other hand, also enable passive users to earn an income. Because not only own content, but also comments can be paid by other users with an “upvote”. Even members who are the first to link to a later popular article (and thus contribute to its popularity) receive a reward. Unlike Facebook and Google, users earn money for their data and activity. Dan Novaes, co-founder and CEO of Current’s streaming service, says:

“So far, I don’t think people have realized how valuable their personal information is. […] With Blockchain, people have the opportunity to get paid for their time, attention and data. Your valuable data is no longer controlled by a few giant corporations.”

Another argument in favor of blockchain-based social media services is that they are not susceptible to censorship. Poor contributions are punished by the community, but cannot be removed from the blockchain. Accordingly, the platform itself has no way of deleting posts. This is a strength in repressive political systems. However, with embarrassing posts after a few glasses of beer, this can also backfire. Therefore, and this is not only true for the blockchain: first think, then write.

Investing in crypto currencies: The ICO Strategy

An ICO is in parts comparable to an initial issue of securities on a stock exchange. The word ICO stands for Initial Coin Offering. An ICO is an opportunity to acquire money for projects in the Blockchain ecosystem via crowdfunding. Those who invest money in this project receive tokens of the planned crypto currency in exchange – which, as soon as the supported project has established itself, can certainly pay off – at least that’s hope.

What is an Bitcoin loophole?

This means that money that comes from an ICO usually goes to the Bitcoin loophole developers. In the best case scenario, it should be used to further develop the crypto currency or to make it ready for the market in the first place. This makes the Bitcoin loophole as attractive as it is dangerous.

Risk analysis: ICO in the time horizon
Let’s look at the ICO from an investment perspective. Of course, there are other reasons to invest in a new crypto currency, but here we only consider the investment case.

First of all, it should be noted that you usually acquire the right to something from the ICO that does not really exist yet. You buy a token, which is usually distributed after the end of the ICO, for example via a protocol like Ethereum. When the ICO is finished, the developer can inform his supporters that the tokens will be transferred soon. So everyone creates an Ethereum Wallet and receives a credit for the purchased coins.

Even if you get the coins well written, you should be aware that it is still only a “number”. A real equivalent does not exist at this time yet. And the coins can rarely be used in the early phase.

Conclusion: First of all, we only receive a few coins that no one may know, that have no equivalent value and that are not even ready for use.

Those who invest in the news spy should therefore have two qualities

1. frustration tolerance like seen here:
Many investments promise the new disruptive revolution in various areas, but not all of them will survive. Often enough, the current hype is compared with that of the news spy Internet at the end of the 90s. Because even then the enthusiasm was huge, the innovativeness high and everyone sensed the imminent wealth. Enthusiasm quickly came to an end when many of the once hyped companies went bankrupt. This can also happen with blockchain start-ups. Remember: You are investing in something unreal, new, unknown. Assume that in the worst case you will suffer a total loss. Calculate your willingness to pay accordingly.

2. patience
As already mentioned, you are investing in something that you cannot use today, tomorrow and possibly this year. Especially because you are an investor in the early phase of a crypto currency, you usually have higher return potential than with established currencies, but the loss potential is also much greater. And the road to wealth can become a dry spell. Invest only the money that you can easily do without. Because you won’t see it again so quickly. The money that flows to the developers is intended for the development of the product. And that can take a long time, so be aware that ICO’s is a long-term strategy and not a quick profit.

But how do you find the right ICO?
This is not easy, because ICO’s are one of the least structured investment vehicles for crypto currencies. You can’t just open a stock exchange on your smartphone that allows you to swap currency pairs back and forth. Instead, you have to find your way around a publisher’s individual website and transfer BTC or often ETH to a foreign company.

Each ICO is a new task and should be thoroughly analyzed. A critical point of view will pay off in the long run: Is the publisher only interested in transferring an existing model to a blockchain technology or does the project offer real added value that can achieve measurable results?

Since it has to be estimated how the project will develop in the future, the team is also decisive: the developers should feel the fire to drive the project forward.

The task is to condense a huge amount of information about the project into a few facts that are relevant for decision-making. This costs a lot of time, but reduces the risk of blindly investing in new projects and running into the knife of the black sheep – who, unfortunately, are increasingly taking the floor.