Discover and read the best of Twitter Threads about #cryptoasset

Most recents (20)

Here's the cycle:

$BTC rallies hard, majority of "alts" drop as BTC is the main liquidity provider to #crypto (right now) and no one wants to sell BTC.

Value of "alts" in *BTC terms* then drops until whales choose to cycle into "alts." Then...
2/ Whales cycle from $BTC into the "alts" that're depressed (pick your alt).

Those "alts" rally harder than BTC did because they are higher risk, gaining in *BTC terms.*

The whales can then cash their "alts" out for more BTC than they started with. And so they "make BTC" :-)
3/ BTC is the market beta of #crypto.

Every other #cryptoasset is higher beta than it, meaning it'll move more to the downside (when people are panicking) and also more to the upside (when people are ebullient).
Read 7 tweets
1/ Published an expansion of the 2017 #cryptoasset valuations piece, bifurcating into cryptocapital & cryptocommodities, two groups with fundamentally different models of value capture: placeholder.vc/blog/2019/4/26…
2/ The primary point of bifurcation boils down to what's a "productive asset" (cryptocapital) vs a "non-productive asset" (cryptocommodity).

The equation of exchange (MV = PQ) only applies to the non-productive subset of cryptoassets.
3/ Any cryptonetwork that requires ownership of the native cryptoasset to gain access to a recurring value stream generated by the network,​ t​hereby creates a capital asset as opposed to a commodity.
Read 9 tweets
The recent tumble of $BSV shows the importance of application interfaces as distributors in cryptoland.

While application interfaces operating atop open protocols can’t directly censor an underlying protocol, they can strangle distribution and therefore users.
Note, however, if demand remains for the underlying protocol, an opportunistic interface may add support or stick around to service the #cryptoasset’s userbase.

It will have less competition from other interfaces given many have left the field, and therefore a greater incentive.
The application interfaces as “distributors” that don’t have monopoly access to the underlying resource (very different from Web 2.0 things like $FB) is going to be a fascinating landscape to watch unfold.

The suppliers and consumers should win as the distributors duke it out.
Read 3 tweets
By connecting suppliers with consumers through an open protocol, distributors built atop #cryptonetworks lose a significant leverage point that exists in the Web today: exclusive access to the scarce underlying resources of production & consumption.
Put another way, crypto’s open protocols unbundle “distribution” from the “scarce resource,” which should help us avoid a GAFA style consolidation of market power.

cc @benthompson
That said, be on the lookout for consolidation vectors.

As @superwuster made clear in The Master Switch, there will always be a pendulum swinging between centralization and decentralization in information networks.
Read 4 tweets
$MKR is better as a secondary layer, as the system can be governed more adeptly without the mental bloat of all $ETH holders involved.
In conversations w/ @BradUSV & @jmonegro, the idea of “small pieces, loosely joined” has come up in the context of #crypto.
One conclusion has been protocols that provide a single service, as opposed to a motley of services, should have tighter governance, leading to more adept evolution.

The native #cryptoasset can then stay more relevant, useful, and valuable w/ time.
Read 3 tweets
"Perhaps forcefully taking 20% of all rewards is the only way to get any contribution out of the mining industry." -Grin Core Dev grin-forum.org/t/solved-early…
Grin is teaching us that models like what we've seen with $DCR & $ZEC, where 10% and 20% (respectively) of mined assets are reserved for core development and resources, is the best combo of fair *and* sustainable that #crypto has today.
What's great about funding models that come straight from mining is the team only accrues purchasing power, and the treasury of the network only grows, if they create value in the native #cryptoasset.

Different from an #ICO where majority of the money comes in up front.
Read 3 tweets
#Cryptonetworks that started as a security but already launched & will be grandfathered into “sufficiently-decentralized-to-no-longer-be-a-security-land” have a sizable #RegulatoryMoat vs those that raised in 2017 and have yet to launch & cross the security divide.
Much easier for a regulator to say, that #cryptoasset’s no longer a security, and leave its tax treatment, filing requirements, etc as such, than to provide the path to cross from security —> non-security, and that “path” I fear will become a quagmire.
What woes will a team face if upon launch their cryptoasset is a security (until they become a non-security)?

For example:
1) tax ramifications of “transacting” a security are horrible for use.
2) heavy filing requirements drag on resources, especially if dev heavy team
3) ...?
Read 5 tweets
1/ Don't underestimate the strength of the #hodl meme. Until we have market completeness, hodlers will make #cryptoasset prices stickier than anticipated.
2/ Market completeness: "In such a market, the complete set of possible bets on future states-of-the-world can be constructed with existing assets without friction." en.wikipedia.org/wiki/Complete_…
3/ It's no secret the #crypto markets have a strong long bias.

Outside of the top 10 #cryptoassets, shorting is difficult, and even for the top 10, friction remains.
Read 15 tweets
@phenrikand 1/ I’ve been in the digital cash and eMoney space since 1999 for co-design bit.ly/NavyCash It was centralised command control money digital USD on an EMV card where the backend -> every transaction traced & tracked by float manager @jpmorgan debitcard ATMs via @Mastercard
@phenrikand @jpmorgan @Mastercard 2/ Every Navy base & every ship in a flotilla was like an island🌴 at sea (at any point in time it could have only local and no or limited comms back to treasury) Similar to today’s offchain and onchain networks eventually reconciliation would happen. DoubleSpends manual captured
@phenrikand @jpmorgan @Mastercard 3/ Proof of Work Blockchains tend to centralisation. The top5 PoW 💥 Blockchains generally work 💪and have a huge bounty on their embedded value across their networks PoS and others not so much
Read 15 tweets
1/ A few reflections on @andrewrsorkin's interview of Jay Clayton last night. First off, it left me feeling more hopeful for #crypto's regulatory situation.
2/ Clayton and the SEC are not out to get #bitcoin and #ether, this should be obvious by now.

Reading between the lines of his words, it seems Clayton considers $BTC a currency, and $ETH a commodity.
3/ In differentiating a currency from a commodity, he stressed that commodities generally have an “industrial use” beyond serving as a means of exchange.

Will be interesting to see how granular regulators get in classifying the great diversity of #cryptoassets before us.
Read 11 tweets
OGs will often look at #cryptoasset charts in $BTC terms, in addition to $USD terms.

If investing in any ERC-20s, I recommend looking at them in $ETH terms too, $ZRX and $MKR shown below.
$ZRX / $ETH & $MKR / $ETH both in beast mode, showing growing confidence in these projects relative to #Ethereum.

Could also be pricing in of the growing trend of "middleware protocols" looking to operate across multiple base layer chains, de-coupling from original parent chain
While $USD prices may feel relatively static in #crypto right now, there is a lot of underlying movement in the relative accrual of value between different projects. $BTC makes this clear, but it's also showing in other quality projects.
Read 4 tweets
A prolonged bear market is the best thing #crypto could've asked for to expose projects that never planned to deliver in the first place.
The fumes of exchange listings, prominent partnerships, and events + conference appearances will only carry a #cryptonetwork so far.
The only way to survive over the long haul is to build things people use, and if you have a #cryptoasset, making sure the demand-side and/or supply-side relies on it to access/provision the service.
Read 3 tweets
1/ Get ready for a predictable #crypto pattern: in the coming months, we will see an increasing number of #Bitcoin maximalists tormenting “altcoin investors” for straying from the mother ship.
2/ The maximalist drum will get louder as we go deeper into the bear market, with #bitcoin falling less than most other coins, and its dominance index growing. coinmarketcap.com/charts/#domina…
3/ #Bitcoin is the benchmark after all, the market beta of crypto, with most everything oscillating at a higher amplitude than $BTC.
Read 18 tweets
As of yet, no #cryptoasset is too big to fail-- not even #bitcoin.
Too big to fail applies in 2 areas

1) #Cryptoland, where the question is: will crypto be crippled if a core network suffers catastrophic failure (or slow fade 2 obsolescence)

2) Macro-land, where the question is: will global economies be severely affected if X #crypto goes down
3/ In case #1, there's no doubt #cryptoland would go through a period of heavy puking if #Bitcoin or #Ethereum went down, and while a few #buidlers would defect, the majority would stay and adapt.
Read 5 tweets
1/ Yesterday’s quarterly #crypto update by @DAR_crypto was filled w/ interesting data: t.sidekickopen24.com/e1t/c/5/f18dQh…
2/ Median #crypto returns by size:
Large caps: -61.1%
Mid caps: -68.8%
Small caps: -79.4%
3/ Relative performance of small caps in a bear market shows you can’t supercharge your returns without taking on commensurate risk.
Read 7 tweets
More people will own #cryptoassets than stocks.
2/ #cryptopeople > #stockpeople is already the case in some emerging countries.
3/ @jmonegro was recently in Brazil, where stats were put up about users of #crypto products outnumbering users of stock exchanges/brokerages/etc
Read 8 tweets
1/ #Hodling is a lot harder than it looks, as it requires the choice of *no action* in an action-oriented culture.
2/ One of my favorite classes in college was called, "A Life of Contemplation vs Action," and it revealed humans repeatedly choose "action" over "no action," even when statistically "action" has clearly been proven to be the wrong choice.
3/ Take soccer goalies, for example. Statistically, they have better odds of blocking a penalty shot by staying in the middle of the goal (no action) and defending from there. Yet, the majority decide to jump right or left (action), decreasing their odds of success.
Read 11 tweets
1/ @telegram chose, from a place of strength, to use a #cryptoasset as their monetization model, instead of an equity.
2/ @telegram's *choice* to say: #cryptoasset > #equity, is the single most important takeaway for me from the $TON sale.
3/ I'm not sure everyone appreciates how much VCs have yearned to invest in @telegram over the years, and @durov was never having it.
Read 7 tweets
1/ While I appreciate the work of @CoinMarketCap & the many other token data aggregators, it’s important to recognize none of them represent the entire #cryptoasset reality.
2/ When people new to the space first realize @CoinMarketCap has ~1,500 #cryptoassets listed, many will exclaim, “Wow, that’s a lot!” But in reality, that’s just the tip of the iceberg...
3/ consider, for example, that @wavesplatform has 12,297 #tokens that have been launched on its platform and trade on its internal DEX.
Read 13 tweets
1/ Put together some informal thoughts on smart contract platforms for friends that I figured I should share. Clearly, this market is #Ethereum’s to lose.
2/ The reward, however, for any smart contract platform that can achieve #Ethereum levels of success is significant. Makes the expected value of investments potentially positive, even if low odds.
3/ #Ethereum has a “feature gravity advantage” over the upstarts, and a proven willingness to move fast and avoid ossification. So long as scale doesn’t make things a quagmire, such flexible governance will suit $ETH well going forward.
Read 9 tweets

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