Weekly Wednesday Crypto: Recent Episodes

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Weekly Wednesday Crypto Episode 3 - Holding on for Dear Life
I am holding onto my crypto-currency.

Summary of this Episode
Over the last week, I had a lot to say about crypto. I was of the opinion that the bear market had bottomed out. Today, I woke up, and the market fell another 15%.

My Response
I did not see that coming. However, I did take it as a buying opportunity. I bought more Ethereum. I still believe very strongly that by Q2 of 2019, we will be in a bull market for crypto. You should not take my word for it. I could be wrong, but I don't think I am. If, because of what I said, you bought into crypto last week, you just lost 15% of what you put in. What you do next is up to you. If you keep it in, you could lose more. I can't tell you what you should do, but I will tell you that I have doubled down.

The Next Bull Run
Let me explain why I think that Q2 of 2019 will be the beginning of the next bull run. I believe that the developments in the crypto space over 2018 will lead to many projects being much more usable. This means that the potential for real adoption in 2019 is much greater than it was two years ago in 2017 during the last run-up. Because of this, many who were disillusioned with the crypto space after the crash will revisit the space next year. In order for that to happen, however, the improvements will have to be implemented and brought to public awareness. Then, there will still be some skepticism until people actually start to see it work.
By the time people start coming back around to cryptocurrency, it will be a lot more expensive to acquire. I won't tell you, the reader what to do, but personally, I'm holding onto my crypto, and I'm buying more while it's still cheap.

Disclaimer
This post is for academic and entertainment purposes only. It is not financial advice. All cryptocurrency investments are highly risky. Always do your own research, and never invest more than you can afford to lose.

Originally posted to [PJCornell.Com]; this article is copyrighted (2018) by Cornell Enterprises, which is the sole proprietorship of Philip John Cornell. Some rights reserved. If shared in part or in whole, it must be prominently attributed to "PJ Cornell," and if shared online, a link to this content or [PJCornell.Com] must be provided.

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Weekly Wednesday Crypto Episode 2 – Roger Ver and Bitcoin Cash
In this episode, I talk about Roger Ver and Bitcoin Cash. I’m a fan of neither.

Summary of this Episode
When I saw Roger Ver’s discussion with Charlie Lee, it was a huge eye-opener for me. The man is obnoxious and solipsistic. In the meantime, Bitcoin Cash has no real use case that isn’t fulfilled in a better way by either Bitcoin or Litecoin. So Roger Ver doesn’t play well with others, and his product offers nothing to make it a better option than either Bitcoin or Litecoin and moving forward, Bitcoin Cash is going to be hard pressed to keep its niche in the market.

Some General Observations About the Crypto Market
It seems to me that, in order for a blockchain project to carve out a niche in the marketplace, one of two things must be true. Either it has to provide a service that is significantly superior to all of its competitors, or it has to have a particular niche, and then cooperate with other projects to form a broad economic ecosystem.
Monero and Cardano are examples of the first case. Monero (as of now) is, arguably, the best privacy token in the marketplace. It does that better than any other project in the space (in my opinion). Cardano, on the other hand, attempts to provide a wide enough balance of somewhat mutually exclusive aims to provide one of the best overall currency and platform projects in the space.

Bitcoin and Litecoin are examples of the second case. Bitcoin is extremely secure because of the sheer size and decentralization of its network. However, because of its size, it is somewhat less scalable than its competitors. Litecoin, on the other hand, is somewhat less secure than Bitcoin, but it is massively scalable. The two projects have always had a cooperative relationship. They are both integrating into the Lightning Network and will integrate, to a large degree, with one another. Thus, they can shore up each others’ relative weaknesses.

Bitcoin Cash in Light of These Observations
Where does Bitcoin Cash fit into this picture? In August of 2017, Roger Ver hard-forked Bitcoin to form Bitcoin Cash. Hard forks do happen, however, in this case, the event was unusually contentious. Roger Ver did not present the fork as a fork; he presented it as a replacement. He went so far as to represent Bitcoin Cash as the original Bitcoin online on social media, and with [Bitcoin.Com].

Many people in this space (including myself) considered this move to be highly dishonest and antagonistic. His contention was that, in order for Bitcoin to continue to be scalable enough to be used as cash, the block size had to increase. The result of this would be that the currency would have to be somewhat more centralized. In other words, he was forking Bitcoin in such a way as to sacrifice some decentralization for scalability.

Bitcoin Cash as a Competitive Project
When we evaluate Bitcoin Cash as a competitive project, it’s hard to see what its place in the world is. It is less decentralized and secure than Bitcoin. At the same time, it is less scalable than Litecoin. Now, admittedly, I’m a philosopher, not a technician, but based on my research, this is what seems to be the case. So it isn’t clear what Bitcoin Cash has to offer that is uniquely superior to what is offered by other projects.

Bitcoin Cash as a Cooperative Project
It is laughable, in my opinion, to think of Bitcoin Cash as a cooperative project. Roger Ver is still the biggest spokesman for Bitcoin Cash, and he seems to go out of his way to make enemies and poison the reputation of his project. It is an aggressively stand-alone project. It is an aggressively stand-alone project that doesn’t offer anything particularly unique.

The Social Ethics of Bitcoin Cash
Roger Ver is an adversarial personality. I think this, above all else, is what has ensured that (in my opinion) his project will not be a part of the dominant economic ecosystem moving forward. It may, perhaps, continue to be an alternative to the Lightning Network, and that could be a positive thing. However, it isn’t clear that it can do, even that, more effectively than, say, Cardano.

In the marketplace, there is a role for competition, and there is also a role for cooperation. I believe that, contrary to popular belief, cooperation, and not competition, is and should be the default mode of operations. Human need is an extremely complex thing, and cannot be met by competition alone. Usually, different groups need to cooperate with one another for mutual benefit in order to better serve their customers. Occasionally, cooperatives get too big, too corrupt, or too inefficient. If and when this happens, competition is essential in order to keep the cooperatives honest.

However, when the default is to be adversarial, especially to the extent that you are engaging in dishonest tactics, the rest of the market will cooperatively outcompete and crush you. And rightfully so.

Disclaimer
This post is for academic and entertainment purposes only. It is not financial advice. All cryptocurrency investments are highly risky. Always do your own research, and never invest more than you can afford to lose.

Originally posted to [PJCornell.Com]; this article is copyrighted (2018) by Cornell Enterprises, which is the sole proprietorship of Philip John Cornell. Some rights reserved. If shared in part or in whole, it must be prominently attributed to "PJ Cornell," and if shared online, a link to this content or [PJCornell.Com] must be provided.

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Summary of this Episode
When determining the blockchain investment strategy in a particular cryptocurrency or blockchain project, there are three fundamental questions that you should ask:

Does this project have a profitable real-world application?
Does this project have a realistic chance of achieving that real-world application?
Is this the right time to buy?

Weekly Wednesday Crypto Episode 1 – Blockchain Investment Strategy
This is the first official episode of my new weekly series on blockchain; this episode is about blockchain investment strategy. This is a show for people who already have some familiarity with the technology and market of blockchain who are interested in hearing some brief philosophical analyses about the space on a weekly basis.

Does this Project Have a Profitable Real-World Application?
In order to answer this question, you have to apply a theory of value. This means you have to think deeply about what people value and why. This is a massively complex field of study all unto itself, and I won’t attempt to address that here. But, when forming a blockchain investment strategy, you need to have a well-formed opinion about this; and you must leverage that in your decision-making process. You then have to evaluate whether what this project creates or contributes to meets some legitimate value proposition. Furthermore, you must evaluate whether this project meets that need in a way that other projects do not; or whether this project at least has some significant advantage over its competitors.

Does this Project Have a Realistic Chance of Achieving that Real-World Application?
If we have answered in the positive the first question, we then proceed to the next. That is: how likely is it that this project will actualize its value proposition? There are many things to consider when considering this question. For example, are their goals inherently realistic? Do the people working on the project have the necessary experience and expertise to tackle the problem they are attempting to address? Have they formed partnerships with other market players who will help them make their vision a reality? Can they communicate their value to their target end user and achieve adoption? Do they have a sustainable business plan? Are they putting themselves at odds with regulators; if so, will the regulators be able to stifle the project? The more of these kinds of questions that you can answer in the positive, the more likely it is that the project has real potential.

Is this the Right Time to Buy?
If we have answered the previous two questions in the positive, then it is fair to say that the project has an excellent chance of success and is worth considering in the context of your overall blockchain investment strategy. Now, you must consider whether this is the right time to commit financial resources to the project. At this time, the blockchain space is still highly volatile. That means that you can expect the price of any given project (with the possible exception of Bitcoin) to rise and fall with significant monthly margins (in excess of 10%, monthly).

FOMO
Anytime you see a given project rise in value sharply, you should consider whether “Fear of Missing Out” (FOMO) is taking place. Do not fall victim to the FOMO effect! Even if the project is promising, it is much better to allow FOMO to take its course and let the token price crash before buying in. For example, in 2017, Bitcoin’s price rose to $20,000 from $900. A lot of this price movement was driven by FOMO. People thought Bitcoin was on the verge of taking over the world, and they wanted to get in before it was too late. Now, I believe, as strongly as anyone, that crypto is the future. But this is something that takes time.

Maximize Your Profits
In 2018, Bitcoin’s price fell back down to $5800 and stabilized around $6500. Let’s say Bitcoin stabilizes at $1,000,000 by the end of 2020, which is what Tech Guru and blockchain enthusiast John McAfee predicts. From that perspective, buying Bitcoin at $20,000 is a sound decision, because if you hold it until then, you will see a 5000% return on your investment. But what if you had waited until Bitcoin stabilized at $6500? Well, then you could have bought three times as much for the same price, and have seen in excess of a 15000% return. This same principle applies to all other projects. When you see a coin that passes the muster of the first two questions rise sharply, wait for FOMO to run its course and buy the dip.

Disclaimer
This post is for academic and entertainment purposes only. It is not financial advice. All cryptocurrency investments are highly risky. Always do your own research, and never invest more than you can afford to lose.

Originally posted to [PJCornell.Com]; this article is copyrighted (2018) by Cornell Enterprises, which is the sole proprietorship of Philip John Cornell. Some rights reserved. If shared in part or in whole, it must be prominently attributed to "PJ Cornell," and if shared online, a link to this content or [PJCornell.Com] must be provided.