26 May 2017
Last night a room full of New Yorkers met to discuss cryptocurrencies. The group contained a cross section of age ranges, backgrounds, and expertise. Some of those present were making a full time living from digital currencies, others needed help transferring money between wallets. Here are some of the takeaways from the night.
BLOCKCHAIN EXPLORERES
The speaker at the meetup highlighted Etherscan.io. The site indexes and makes searchable all transactions on the Ethereum Blockchain. If you're wondering whether your purchase went through on Coinbase.com, you can search to see if your transaction was added to Ethereum's ledger directly, long before your bank clears the funds.
BlockExplorers are usually bundled with other powerful features. There are tools for miners to calculate future profits, graphs that monitor the strength of hash rates, and APIs if you feel like connecting your own applications to their data sets.
Other BlockExplorers mentioned at the meetup:
blockchain.info
etherchain.org
ethstats.net
THE BETTER THE MARKETING, THE WORSE THE COIN
One of the traders at the event is in charge of growing millions of dollars of investment capital in the Blockchain space. His recommendation? Invest in tokens that are difficult to use. If a cryptocurrency has solid fundamentals (limited supply, valuable innovations, a solid team, etc.) and the website is difficult to navigate, you may have found a goldmine.
His reasoning: If a token comes bundled with slick videos, and a trendy user interface (like Monaco and Ripple) it means the team spent time making themselves look great at the expense of other things. The investor believes that you can increase your returns significantly by learning to purchase quality tokens that have not yet been listed on easy-to-use indexes. "There's a learning curve, and if you stay on top of it, you can stay ahead of the pack." It's an interesting way of viewing the cryptocurrency space, especially at this early stage. I'd love to hear what you think about the strategy. Comment below!
AUGUR, AUGUR, AUGUR
If you didn't know, one of the most exciting things on the cryptocurrency horizon are prediction markets. Prediction markets operate on the idea that the collective wisdom of the crowd is better at predicting the future than any individual in that crowd. Enter Augur.
Augur is in beta with a decentralized predictive market built on Ethereum. The service allows users to make bets on real world events, from tomorrow's weather, to who will win the Super Bowl. If you're right, you win the bet and are rewarded with a payout based on the odds at the time when you placed that bet. It's a simple concept, but the implications are far-reaching.
As data collected by predictive markets grows, patterns will emerge. With enough time, these patterns will constitute a new form of history, one that future humans will be able to study and use to make inferences. It will be the first record of humanity's time on earth not written and controlled by those who won the latest war. Predictive markets record the hopes and beliefs of anyone using them. People who understand the nature of this innovation are right to be excited. I'll be releasing an in-depth write up of the consequences of predictive markets in the next few days. Subscribe if you'd like to read it.
ARAGON: DECENTRALIZED SELF-GOVERNANCE ON ETHEREUM
Aragon is an autonomous community in Spain with more than one million people living within its borders. It is also a system of self-governance for Decentalized Autonomous Corporations that stores its contracts on the Ethereum blockchain. The service is in alpha testing and hopes to provide everything needed to create and run a company on Ethereum including cap tables, governance, arbitration, fundraising, payroll, accounting, and bylaws.
Aragon is a champion of the little man. They want to find the best human capital and match it with funding to allow innovators from disenfranchised parts of the world to compete with startups founded by Harvard grads.
“We are not creating Aragon just to make business more efficient, we are creating it to allow everyone in the world to create value. Because decentralization can make most unjustified power disappear.”
The Aragon token sale began on May 17th and will run for four weeks or until its hidden cap is reached. People at the meetup wouldn't stop talking about it and the system seems deserving of further investigation.
NUMERAI
A new hedge fund is hoping to focus the efforts of financial markets. One million Numeraire tokens were recently distributed to twelve thousand data scientists. These scientists have been building prediction models and entering them into digital tournaments against other investors. After a period of time, the predictions are analyzed. If the predictions are accurate, the data scientist who staked Numeraire on their models earn money. If the predictions are poor, the Numeraire they staked is permanently destroyed.
Every phone makes the phone network stronger. Every subway station makes a ticket more valuable. This is called the network effect. The hope is that Numerai will be able to capitalize on network effects to create a decentralized hedge fund. Current hedge funds employ small teams of experts who compete against one another in exchange for bonuses. These experts keep their findings secret from others at their company as a means of outperforming competitors within their own organization. Numerai wants these researchers to work together.
With Numeraire, there is now a way for data scientists to express confidence in their predictions the same way traders do: by deciding how much to stake. Models that perform well are rewarded, those that don't lose out.
THE LOSERS
Everyone at the meet-up who was aware of Ripple and RawCoin agreed: they are junk tokens. The reason? Each have infinite supply and can be deflated at any time by their issuing authorities. Ripple is currently sitting in 61 percent of its tokens and investors are worried a dump is coming.
To ease these concerns, Ripple announced a plan last week for the structured sale and use of its currency. By the end of 2017, Ripple will place 55 billion of its tokens into escrow and release up to 1 billion if them into the market each month. Should you continue to hold these volatile, infinite currencies? Only if you think you can sell them before the bottom inevitably falls out.
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