So you want to invest in Crypto? This guide is meant for people who may have previously had an interest in this kind of technology, but as of yet have not dug too much deeper into this burgeoning empire of bits and code. Cryptocurrency is where millionaires are made and where dreams come true, but it’s also a place full of dangers lurking behind every corner. One wrong step here and you’ll be among many of the sad stories of lost accounts, stolen wallets, or gambled-away earnings. I’ll be your guide as I take you along this harrowing cryptocurrency journey and, with diligence and patience, you too can benefit from the fruits of this growing economy. So let’s talk basics.
What is Bitcoin?
Put simply, Bitcoin is a digital form of currency that has several advantages over your typical Fiat (paper) currency. Some examples of Bitcoin’s advantages include the ability to send it overseas to other countries with no cost (or very little), the ability to keep your funds privately, and increased security compared to things like credit cards and paper money. If someone were to steal your Bitcoin wallet, it would be useless to them without knowing the private key – but more on this later.
Why is it so valued?
Bitcoin is the first of its kind (asides from the now-closed E-Gold), created by a man named Satoshi Nakamoto. While initially, Bitcoin was worth fractions of a penny (in 2009), it slowly grew in strength and network effect, completely undisturbed by the worlds financial systems. Bitcoin would grow over time, in dimly lit computer rooms and closed off hacker communities, earning reputation and a massive influx of new users in just a few short years. As of today, the price of a single Bitcoin is now over 4’000 U.S Dollars. Bitcoin is capped at 21 million coins, making it extremely rare compared to even the amount of dollar bills in circulation.
It is also decentralized, using computers from all over the world to support the infrastructure that Bitcoin uses, known as the “Blockchain”. With blockchain technology, Bitcoin can evade the control of governments and function as a truly democratic form of currency, giving the power back to the people and away from political interests. Bitcoin is also irreplacable – many who don’t know much about it simply believe Bitcoin to be some lines of code that are randomly decided to have value – this couldn’t be further from the truth. While there are as of this post over 800 digital currencies (known as Altcoins), Bitcoin has remained the top dog in the race of decentralized currency, due to its purity of code, rarity, and network effect – no other coin even comes close to Bitcoin when it comes to the amount of users.
Who controls Bitcoin?
This is the beauty of decentralized systems – no one, not even (the as of now missing) Satoshi Nakamoto can make any changes, updates, or revisions to the code of Bitcoin without requiring a significant amount (usually over 90%) of Bitcoin miners to agree to a change. Because Bitcoin miners operate from mining rigs all over the world (and the cost of entry to being a miner is relatively cheap), it means that the system is completely democratic, and there is no “dictator” at the top leading the way. Even if the government wanted to, they could not stop the proliferation of Bitcoin, and with the recently launched Blockstream Satellite, Bitcoin is poised to be functional even outside of the boundaries of the Internet itself.
How do I purchase Bitcoin?
For most users, the easiest place to buy Bitcoins will be at coinbase.com. From there, you can enter credit card or bank details and pay for Bitcoin there. Coinbase is a legal US based company, and your money is insured up to 250’000$ USD in the event of thefts, hacks, or otherwise when it’s in a coinbase wallet (they are not, however, responsible if your password gets hacked or the error was on your end). You’ll buy coins there at the current exchange rate of Bitcoins to US Dollars, which is always reflective in the price. For example, if a Bitcoin costs 4’000$ today and you buy one, you can later sell it back to Coinbase for 5’000$ (if the current exchange price reaches that point). Bitcoin price is usually always growing, however like any growing system, there are points and times where price is in a decline. These present excellent buying opportunities for those who are looking to increase their Bitcoin exposure, and you can get some relatively cheap coins by doing this.
I have Bitcoin, now what?
Now you have a few options; you can either leave your Bitcoin in your Coinbase wallet, or move your Bitcoins to a wallet of your own that you own. There are many different types of wallets, including Web based and hardware wallets. Personally, I own a Trezor, which is a hardware based wallet. It features great security, and if you’re investing more than, say 1’000$ or so into Bitcoin, is your most secure option when storing currency.
Remember, Bitcoin gives us power over banks, but in doing so we become our own banks – this means we are responsible for the security of our funds, and it should be of utmost importance. After you’ve decided on a wallet, you can send the funds out of Coinbase using the public address key – on all wallets this will be a string of numbers and letters. For example, my Bitcoin address looks like this:
In order to send funds to my private wallet, I would set the destination address as: 1PyyinjbsWLGpbmnjQqGg49nS4ESeC88aB
If you’re looking to send Bitcoin to your own private address, yours will look similar – simply copy and paste the address from your chosen wallet into the destination address on Coinbase.
After that, wait some time – the blockchain needs to confirm your transactions which can take anywhere from 5 – 15 minutes. Once confirmed, your funds will show up in your destination address. The advantage of having a private wallet is that you own your private keys – on creation of a wallet, you will usually have a pass phrase or string of numbers and letters. This is your private key (not to be confused with your address!) – write this down and keep it somewhere safe, as it is the only way to actually use the funds in your wallet. If you lose your private key, your funds are gone.
And that’s it! You’re now a crypto investor. You can also start paying other people in Bitcoin for goods and services by sending them BTC in similar fashion to the way you sent it to your wallet – just be careful how much you send, as you don’t want to mistakenly send your entire balance.
Bitcoin is a wonderful product, as it liberates us from central banking institutions and government currency control. It is also dangerous, and security should always be your primary concern. Remember that the price of Bitcoin is always rising – with some speculators placing it above tens of thousands of even millions of dollars a coin, it’s a perfect time to start investing in this bold new technology.
There is a certain mass psychology in the Ethereum community with respect to its competitors, Ethereum’s design/governance principles, and even generally unrelated projects such as Bitcoin. Make any singular attack or critique against Ethereum, its potential, or its “based god” Vitalik will likely leave you open to a vitriolic backlash that borders on the edge of insanity. In the eyes of those who support Ethereum, kids and grown adults alike coalesce to form an echo chamber of ideas, support, and more fatally, the rejection of criticism of anything challenging their status quo.
This kind of group-think is dangerous to any society, but especially so when it comes to technology and building the future. After all, that’s what Ethereum’s claim to fame is – “the future of smart contracts” or some other trite that is needlessly repeated over and over until the voice of the crowd drowns out dissenting opinion. Sharding won’t work? The Ethereum blockchain can’t scale to meet world demand? Oracle bribing and Turing Completeness pose dangerous threats to the stability of the platform? No, these aren’t legitimate concerns, but FUD! If you can’t understand that this is the future, then get out of the way! Obviously, this echo-chamber mentality of parties with the same interest repeating and consoling each other is evident enough in politics. Once you add in the prospect of money and people putting in their house mortgages, savings accounts, or college tuition fees towards a product, it’s going to magnify the pathology even more.
It’s important in this industry (whether you’re a miner, investor, trader, or otherwise) to always be paying attention to your own biases. Keep them in check, because falling in love with one product over another equally viable one can lead you to financial ruin. There was once the era of Bitcoin Maximalists, investors who truly believed in the network effect and capability of Bitcoin to such an extent that Alts were nothing more than trash, humorously nicknamed “shitcoins” and ignored by the vast majority of these Bitcoin Maximalists. Of course, we know how that turned out – as of today, Bitcoin Dominance is more like Bitcoin Majority, making up less than half of the market cap of all cryptocurrencies combined. The Bitcoin Maximalists took a hit for their ideology where it hurt most – their wallets. And the remaining Maximalists? The ones who could get over their biases stopped talking about Bitcoin and started putting their money in alts.
"May 2013, I got a whole pile of shit from Mr. Peter Todd, because I'm a Bitcoin maximalist. I'm still a Bitcoin maximalist." CW, Scammer
But this isn’t an Ethereum or a Bitcoin piece. This is about Bitcoin Cash.
Bitcoin Cash, the hotly debated new kid on the digital block, started out with less of a bang and more of a whimper. Their first block took around 13 hours to actually show up on the network and they’ve been having issues since, namely with the ongoing difficulty adjustment and the ironic tx malleability bugs that have started to crop up on the network. For the first few days, Bitcoin Cash was also almost entirely locked up on hardware wallets or otherwise, and those that could move their corresponding BCH tokens had to wait almost an entire day for their transactions to get confirmed on the Bitcoin Cash network. The result? A massive pump due to limited supply and relatively high demand:
Now that’s a pump.
What followed was the floodgates being opened – massive amounts of confirmed deposits of Bitcoin Cash came in, exchanges started accepting the currency, and most of it was dumped on the open market, crashing the price down to as low as 150$ before things slowed down. Here’s where the cult mentality part comes in, however:
Turns out most people, in their ideological rage, dumped all of the free BCH they got on the open market the second it was available to them. This made the actual price of the coin ridiculously cheap compared to where it would likely be – in essence, people sold themselves short. They either believed that Bitcoin was simply superior and that Bitcoin Cash didn’t have a chance, wanted to cash in some free money, or simply sold out of spite of Jihan Wu and company.
The next question you have to ask yourself is, “who actually bought all of this Bitcoin Cash?” For every seller there’s a buyer. This part is completely my own speculation, but I personally don’t see Jihan Wu and Roger Ver as the idiots that people in the Bitcoin community make them out to be. I believe that this entire event was planned months in advance and executed with people being none the wiser. What they did was possibly the greatest hat trick that has ever been seen in the crypto space. What did they do? Let me explain.
It’s common knowledge that miners will always gravitate toward whatever chain is most profitable at the time – it’s a simple aspect of game theory that we can rely on to support blockchain technology. Let’s take a look at the current differences between Bitcoin and Bitcoin Cash’s profitability to get a better picture of what I mean:
Bitcoin Cash, while admittedly starting out slow, has been having a meteoric rise in terms of its profitability in relation to the Bitcoin chain. While initially, it was over 11 times more profitable to mine Bitcoin, this gap has lessened at a frightening pace. Once Bitcoin Cash reaches around 500-700$, it will at that point be more efficient to mine that chain over Bitcoin.
Considering that BITMAIN owns most of the hash power of Bitcoin, and they have pushed Bitcoin Cash themselves, there’s no debate that Jihan wants to make Bitcoin Cash the dominant blockchain. At this point it’s simply a matter of driving the price of Bitcoin Cash up to the required levels as to make it more profitable than Bitcoin. Once this happens, BITMAIN can swap all of their hashpower to the now more lucrative version of the chain, leaving the original Bitcoin in a weakened state, with a small fraction of current hashpower:
What’s the easiest way to drive the price of a currency up? Supply and demand – and most people walked right into this trap, quickly selling off their Bitcoin Cash to others for reasons stated above. Who bought all of this seemingly worthless Bitcoin Cash?
In Jimmy Song’s overview of Bitmain, he estimated the company to have a valuation of around 1 billion dollars, with about 200 million dollars in profits this year off of their AntMiner’s alone. It’s difficult to find financial data on Bitmain as it is a privately held Chinese company, however it’s certainly possible and likely that this was orchestrated by the company to buy everyone’s cheap Bitcoin Cash. With the lowest valuation of the BCH tokens at 150$, it would only take around 2.2 billion dollars in total to buy out the entire Bitcoin Cash network at this price (15 million coins in circulation multiplied by 150).
That’s speculating that absolutely everyone sold their BCH (they didn’t), that Bitmain had no Bitcoin in their wallets at the time of the fork (they almost certainly did), that no one is working together with Bitmain to orchestrate this scheme (highly unlikely), and that you need 100% of the tokens in order to control the market (even something like 30% is likely enough).
If this gambit actually works, Bitcoin Cash will be the predominant chain – whether for a short amount of time or more permanently largely does not matter. Once people see the signs that a potential “flippening” might occur, they’ll buy back those same BCH tokens they sold at a premium, thus driving demand and lowering the network effect of Bitcoin. At this point, mass panic might start to hit the markets, and we all know what happens when traders start panicking.
It’s a dangerous game that’s being played here. One is best served by remaining vigilant, keeping an open mind to new information, and thinking their moves carefully. In the case of Bitcoin Cash, hedging might be the last, best option for those who have already liquidated their positions.
Welcome back everyone to my continuing analysis on some of the top cryptocurrencies that you should be investing in. If you haven’t read part one, you can find it here. Today I’m going to go over 5 Mid Cap picks – cryptocurrencies and assets that as of yet have not hit it big time and are under a 100 million dollar market cap. These are riskier picks than big caps simply due to less stability, however the ideas are solid and the gains will be much more explosive in this tier.
Edgeless – EDG
In a world where it can be difficult to find actual use cases for blockchain and its technology (mainly due to how new it is), Edgeless gives us one of the most obvious answers to the usecase problem: provably fair gambling.
Currently, online gambling is a 50 billion dollar industry, and despite this, gamblers and users of online gambling software have many complaints such as the house advantage, rake, and even scandals. Edgeless promises to get rid of all of these entirely, and provides a service with a 0% house edge – it is a completely fair game, and Edgeless bets that they will make money simply due to players themselves not playing perfectly (if every player played perfectly, they would come out 50/50)
Edgeless is currently sitting at at 38 million dollar market cap. Quite a ways to go to reach that 60 billion.
For such an auspicious project, it’s hard to find any real drawbacks to it. One possible problem is that players will simply play to the best of their ability in order to gain an edge against the system in games such as Poker, where you can make positive Expected Value (EV) maneuvers against the house. However, there are far more unskilled players that will use the platform compared to skilled ones, and this is only one game where +EV is possible. Thus, downside risk is quite minimal.
Etheroll is a competing service that offers provably fair dice rolling and gambling. The advantage that Edgeless has over DICE however, is that Etheroll is only a dice game while Edgeless plans to include games such as Poker, Blackjack, and more. In addition, Edgeless has a 0% house edge compared to Etheroll’s 1% house edge, thus making it the clear winner if you’re a gambler looking for a platform.
With such clear advantages, low current market cap, and large potential for future adoption and gains, Edgeless is my top pick out of all the mid-cap coins for crypto investment opportunities.
BlockNet – BLOCK
Blocknet is a project aiming to provide inter-connectivity between blockchains and provide the advantages of all of them to the user without ever having to worry about which blockchain to use. As an example, you might want to pay someone privately, but instead of converting your funds from Bitcoin to Monero and back to Bitcoin again, you could simply use Blocknet to carry out this service for you:
No single blockchain could carry the load of storing and serving humanity’s data. There is already a vast array of technologies upon discrete, isolated blockchains. Together they are capable of realising the vastly disruptive power of a decentralised internet – if they could be made to work together.
The Blocknet is designed as infrastructure for the emerging token ecosystem. Any service or orchestrated sequence of microservices provided by dapps may be delivered over the Blocknet’s infrastructure.
Using decentralized exchange, these services are intrinsically monetizable, removing the friction and high costs of traditional payment networks – friction which has prevented the monetisation of the bulk of the API ecosystem.
Due to the decentralized exchange, consumers of a service may pay in their native token even if the service consumes a different token.
Blocknet is an extremely complex project – bridging together blockchains is no easy task, and their success as a platform will depend entirely on the scalability and strength of their XBridge protocol. It’s possible to have bugs and errors which would reduce the credibility of this already hard-to-understand product and people may decide to simply do these operations themselves. If Blocknet can make the process as simple as clicking a button, it will be a great boon to their future growth potential.
Blocknet has several competitors that have risen up including Polkadot, Cosmos, Internet of Coins, Supernet and others. The advantage that Blocknet will have over all of these however, is its technology – I’ve compared the tech advantages of each of these infrastructures and Blocknet has the best features of all. Other attempts at unifying the blockchain come close, but there is usually a feature or two that are missing (that Blocknet provides) which make it the clear winner. There will likely be some more comparisons made between Blocknet and Polkadot in the future, but that project is still too new to make comparisons.
Blocknet takes the best features of each blockchain and combines them in such a way as to make transactions instant (only limited by the confirmation times of the used chains), fully decentralized (compared to other blockchain networks) and lightweight, offering the chance to use the powerful advantages of blockchain even on weaker devices such as mobile phones.
Their decentralized exchange promises an even faster experience for trader/investors as well as the capability of keeping your own private keys when doing any kind of trading – while it’s not necessarily the main focus of the Blocknet project, this should not be left as an afterthought, as a fully functioning decentralized exchange (similar to the Counterparty DEX) with enough mainstream appeal can move mountains.
Ubiq – UBQ
Whereas Ethereum and other Smart Contract platforms attempt to mass market their product and software, the team at Ubiq chose to move the other way and narrow their focuses. Ubiq is focusing primarly on the FinTech (financial technology) industry and aims to be the premiere enterprise solution for professional companies looking for reliable, affordable solutions.
I don’t often mention developer team as they are a small part of my overall analysis, but Ubiq is backed by Julian Yap, who himself has gone through almost all of the codebases of every cryptocurrency and asset that has been added to the popular Bittrex exchange, giving him professional status in this burgeoning space as well as the experience and knowledge that he and his team will be able to leverage to improve the Ubiq system.
Ubiq’s strength in being a niche platform could prove to be a downside in the future – while it is simple for Ubiq to implement code that is created on the Ethereum chain (as it is a fork of Ethereum), this will have to be done sparingly and reliably. No company is going to trust Ubiq in the future with highly sensitive operations if their code is not absolutely up to par and at a greater standard than more generalized platforms like Ethereum.
Syscoin is another great blockchain based project that is attempting to bridge the gap between distributed ledgers and business application, and while it may initially seem like these two are direct competitors, Syscoin and Ubiq are not intensely battling for the same market share. Whereas Syscoin is more interested in delivering business solutions to individuals, storefronts, and online marketplaces, Ubiq is focused on providing services to more corporate companies and backend systems.
Ubiq has great developers, a solid concept without going too far into territory where they can bite off more than they can chew (unlike Ethereum, Ubiq is a much more secure chain). This is one solid project that has an immense room for growth and one of my top picks for 2018 and beyond.
TenX – PAY
TenX is blockchains killer app – applying cryptocurrency to the real world and enabling users and holders of cryptocurrency to spend them as they wish, at any store in the world using their TenX VISA debit card. Users no longer need to liquidate their positions in, say Digibyte, to Bitcoin in order to spend it using more traditional Bitcoin debit card services. With TenX you have the capability to spend your blockchain assets and cryptocurrencies at any time, instantly, and with no fees.
So TenX is basically what I had always envisioned as the natural evolution of crypto currencies. Looking to invest.
TenX largely depends on the functionality of the COMIT Network – a brand new infrastructure created to allow for swapping of crypto tokens through blockchains, similar to Blocknet. However, COMIT will require a large amount of users to be using the network in order to find the liquidity to be able to convert a lot of these coins. For example, if you’re looking to spend some Digibyte and few people on the network wants Digibyte then you’ll likely pay a large spread fee to Liquidity Providers – this fee will still likely be magnitudes lower than current payment systems but people largely prefer static fees as opposed to dynamic ones.
Monaco and Tokencard, in my opinion, are both weaker products overall. In the case of Monaco, they only provide Bitcoin and Ethereum assets, while TenX will eventually add any cryptocurrencies that fit their minimum requirements as specified in the COMIT whitepaper. On the other hand, Token is strictly Ethereum-based, which removes yet another viable asset for spending in the real world (Bitcoin).
The TenX team has created a wonderful product here, and should the COMIT network and Liquidity Providers function to a high level, mainstream adoption will take a huge leap forward. Taking an esoteric concept like cryptocurrency and applying it to well known concepts such as debit cards is a master stroke and an investor would be remiss not to have some PAY tokens as part of their digital assets portfolio.
BitBay – BAY
BitBay, in plain terms, is a decentralized eBay. Not only are eBay and Amazon the only relevant services people can use in the current day if they’re looking to sell their products, they are also highly centralized, tyrannical companies that leave the seller at the mercy of the buyer. For anyone who has ever used eBay/Amazon, they can attest to the high fees and bias towards buyers.
BitBay attempts to change all that, making e-commerce operate entirely off of Smart Contract. The system works in such a way that the buyer and seller are put on equal ground – they must both deposit money into the Smart Contract – this way both parties are incentivized (by the escrowed money) to work together and resolve the Contract. BitBay is also Peer to Peer as opposed to blockchain – it’s an interesting move, especially in crypto. To someone with the hammer of blockchain, every problem can look like a nail – BitBay is a more refined solution to the problem of centralized marketplaces.
BitBay is currently selling for 2 cents per token, with plans to peg the currency to 1 dollar.
One of the downsides of decentralizing a marketplace like eBay is exactly that – for most novice buyers and sellers, they are likely much better off trusting and paying a third party (such as eBay) to take care of all of the disputes and make sure things get sent on time, etc. For more professional sellers, however, using BitBay becomes the clear choice once the market moves in that direction as they will save up to 10% or more on fees by using the BitBay platform over eBay/Amazon.
That’s also a second possible downside however – BitBay will require mass user adoption, which as of yet remains to be seen if it can be done. BitBay will likely need a large marketing team and strategy in order to secure a large initial following of members with which to springboard the platform and attain more market share.
Syscoin is yet again a competitor in this space, as BitBay and Syscoin do compete for the same marketshare. The advantage that BitBay leverages over Syscoin, however, is that BitBay is Peer to Peer – it doesn’t use blockchain as its basic infrastructure. The ultimate result of this is that BitBay will simply be faster than a blockchain-based architecture that has to continually stay synchronized to a server (without light nodes) and download the massive amounts of data that a marketplace would entail (images, descriptions, videos, etc.)
OpenBazaar is a more powerful competitor, offering many of the same features of BitBay and a superior marketing team, which is a big plus to OpenBazaar. However, BitBay wins out on the user experience aspect as OpenBazaar requires what essentially amounts to trusted third parties to mediate and settle disputes while BitBay is a fully trust-less exchange between two parties and those two parties alone. For this reason, BitBay has the clear advantage, and once they start focusing efforts towards marketing the product, it will easily be able to outpace OpenBazaar.
BitBay is a great piece of technology that has advantages by not being blockchain – individuals such as Chris DeRose often have the question of why do we even use blockchain in the first place, and this is a good query. Blockchain can be slow, inefficient, and overall a massive data and CPU hog – the key was never blockchain but decentralization. With that concept in mind, BitBay looks to be the finest solution we have to the centralized marketplace problem, and is a great investment for 2018 and beyond.
Join me next time as we delve deeper into the mid-cap cryptocurrencies and go over 5 more amazing picks to invest in. Remember to play the long game, and happy trading.
Welcome back ladies and gents to the most critical three part article I’ll likely create on this site. As a trader, you can simply skip over this article, as chances are you are not keeping a large stake in altcoins or otherwise. If you’re like me however, and you see the potential that altcoins and the companies behind them have in the future then you’ve absolutely come to the right place. I’ve compiled a list of the top 20 companies and altcoins that I truly believe are going to be monumentally huge, profitable, or otherwise valuable with the potential that, should they be realized, will change the game of their respective industries forever. These are long term holds that should be treated as such, so we will always ignore short term volatility in favor of long term rewards. Expect to wait years for many of these coins to realize their potential, but for those lucky few who were patient and held their stake in these businesses will come out of the other end with future riches.
This article will detail the “Big Caps” first, the highest market cap coins with proven track records and history of success – in parts 2 and 3, I will detail 10 more Mid Caps and 5 Low Caps. I used the process detailed in this article to curate my altcoin picks to find the most profitable investments. You can read about it here. Without further delay, let’s get to it.
A big cap, as defined by yours truly, is a cryptocurrency/asset that has a current market cap (as of the writing of this article) at or above 100 million dollars. These are the market leaders, assets and currencies that have proven their effectiveness, use case, or potential and ones that grow in price and strength along with the rise of Bitcoin.
Ethereum Classic – ETC
Ethereum Classic is the original version of the Ethereum Project, (which is now a fork of ETC) a blockchain based company focused on Smart Contracts. A Smart Contract is essentially a computerized agreement written in code which will execute the given code contained in the contract when two parties agree on it. As an example, instead of trusting Uber to be a mediator between you and the driver (Uber serves as a third party) who has to take you to the city, you can use the Ethereum network to remove the third party entirely and put your faith in the code, which is immutable. Continuing the example, if the driver takes you to your destination, the Smart Contract executes, and you pay the driver in ETC tokens.
It’s of note that I am placing Ethereum Classic in this spot instead of Ethereum. While there will be Ethereum based projects later on this list, it is of my opinion that Ethereum itself is supported by Vitalik Buterin almost entirely (in the sense that if he were to some day leave the project, Ethereum’s very potential would severely drop) as well as the high current price of the asset (and the fact that Ethereum Classic is the ORIGINAL chain) leaves ETC in a prime spot for future investment. Several projects are already beginning to use ETC over ETH, and in time this will only increase with the network effect of ETC, its strong community support, and the potential of Ethereum minus the downside of having a “benevolent dictator” with the capability to delete your funds at will.
By entering into contracts on Ethereum Classic, you can be certain that the network remains neutral. The outcome of transactions will be dictated by code you voluntarily interact with. Unless explicitly defined by the contract code, there are no reversals, no undos, no opt-outs.
Transactions are final; applications are unstoppable.
Smart Contracts have the potential to change anything and everything that we currently use money for. One of the emerging technologies that are vastly superior to anything we had previously is provably fair gambling – with code that you can read yourself, you can check that the game of Ethereum Classic blackjack you’re playing is completely fair to both parties, and this look behind the curtain is something we were previously unable to do within the time span of a few seconds. Usage of Smart Contracts can remove the dependence on third parties to mediate agreements, escrow companies that hold your funds, and overall create a much more streamlined commerce path between two people. Banks could use Smart Contract code between each other to settle large financial deals and have a public ledger of the transactions that anyone can read. Smart Contracts could be written and utilized by wealthy individuals to mete out their riches to their progeny in a fair manner rather than have invested parties squabble over who gets the “family fortune”.
The introduction of gas costs means that the network will be very expensive to attack and becomes more expensive to do as the network grows in user-base and power. These gas costs also serve as a great benchmark to compare against other systems in place today. Why pay eBay 10% of everything you sell when you can create a Smart Contract based market where the seller saves all of the cost of having eBay serve as a third party mediator?
Turing-completeness is an often quoted feature of Ethereum and Ethereum Classic. What this essentially means is that the code that can be used is versatile in scope and can fit almost any need the developer sees fit. The open endedness of this is dangerous however – as Ethereum is intended to be a featureset that allows absolutely anyone to create their own Smart Contract, these contracts can be full of bugs and holes that can easily be exploited by hackers or more tech-savvy parties. Ethereum often has funds stolen, the biggest example being The DAO, where over 3.6 million Ether (over 50 million dollars at the time) was siphoned off due to security flaws in the DAO Smart Contract.
This is the problem I have with $ETH. Code may be immutable, but who writes the code?
Ethereum and Ethereum Classic are also being used for many things that simply replace current technology with technology that does the exact same thing on the blockchain, oftentimes with even slower results due to the added expense of using a blockchain. One of the examples that I like to use is many of the “decentralized prediction markets” that are actively receiving millions of dollars of funding for what tantamounts to a technology that doesn’t even need to use blockchain, and moreover slows the process down from current day alternatives. Not everything needs to be a Smart Contract.
Oracle bribing is also another potential problem. Ethereum Classic uses “oracles”, which are essentially the replacement for third parties mediating the results of a given event in a smart contract. In our previous example, Uber pays the driver after you (the passenger) states that you’ve arrived at your destination and there were no problems. In a Smart Contract, the oracle would be a piece of code (or a person) that checks your location and looks for input from both the driver and the passenger that the ride is complete before payment is released. However, it’s possible to “bribe” these oracles, feeding them false data or giving them money to change the outcome of a given Smart Contract. While this is costly, and currently only a concept, it’s a possible vulnerability to Smart Contract code.
Ethereum is the forked chain of the original Ethereum Classic, and is the most closely related competitor. Led by Vitalik Buterin, who is hailed as one of the key players in the battle for the blockchain future, Ethereum is a massive project, with billions of dollars of funding, expert engineers at their beck and call, tremendous community support, and being the “first to market” so to speak (an attribute shared with Classic, strangely enough). Most projects run on Ethereum as of today, and so vastly outnumber the amount of projects that Classic has. Still, the core tenet of Ethereum was that “Code is Law.” Unfortunately, this very core facet has been ignored by Vitalik himself the very moment he forced a chain split and made it clear to the world that he did not care for the immutability of the chain as much as he did his own ambitions. For this reason, I believe Ethereum Classic to have a much higher future potential than Ethereum, as people will flock to the immutable chain over the one run by the benevolent dictator. As we can see already, projects such as Postalgia and Gambit run on Ethereum Classic, and more in the future will soon follow suit.
NEO, previously known as AntShares, promises all of the current benefits of Ethereum with many important improvements, the main one being the ability to code a Smart Contract in any code the developer desires, instead of Solidity (the language of Ethereum). While initially this may seem like an auspicious investment opportunity, the ability for anyone to write their own Smart Contract is a train wreck waiting to happen.
While Ethereum bleeds out millions of dollars of Ethereum to buggy code every other week, NEO essentially signs its own death warrant by opening an even bigger can of digital worms. For this reason, I believe NEO will likely have a much larger initial audience, but also a much larger amount of potential problems in the future. Still, should NEO prove to not have these issues, a re-evalutation will have to take place, as the ability for anyone to write their Smart Contract could prove useful in the future.
Ethereum Classic has all the advantages of Ethereum as well as support directly from the community rather than reliance on Vitalik as the spearhead of the project. Ethereum Classic also has the promise of true immutability. This, combined with the advantages against other competitors in the space leave Ethereum Classic as the number one choice of investment vehicles when it comes to Smart Contracts.
MaidSafe – MAID
The first step in the natural evolution of the Internet was a series of innovations called “Web 2.0”. This included things like push notifications, social media, live streaming through Internet, and mobile integration. The problem with the way the Internet works currently is that everything is centralized – sensitive information is kept on servers that serve as single points of failure, web sites can be attacked by DDoS and shut offline due to server load problems and there is also the issue of trusting whoever it is that you’re sending your personal information to. Enter MaidSafe, the decentralized Internet – MaidSafe is one of the most interesting projects on this list because it’s not blockchain at all. MAID coins were created on the OMNI protocol in order to fund the project, which will be traded in for SafeCoin once the main network launches – however this network doesn’t run on blockchain, but rather distributed computers all over the world. Imagine instead of connecting to Google’s servers to access your e-mail, you connected to computers all over the world that all contained secure segments of the information you wished to access – this way, no one can hack into a single server because single servers don’t exist. Your sensitive information is also split and encrypted across the distributed network such that no one on host computers can have access to your information either.
The Safe network promises to completely reverse the current infrastructure of the Internet and rebuild it in a decentralized manner – this is a hugely ambitious project to be sure, but if it succeeds will be one of the most utilized ones on the planet – With the Safe browser, you will finally have complete privacy from prying eyes and be able to properly protect and secure your data. The Safe network has a large feature-set, including things like distributed data storage allowing you to use the network as a decentralized Google Drive of sorts, where you pay in SafeCoin in exchange for access to storage space that would otherwise be more expensive to purchase alone. There are also many corporate advantages to this kind of system, especially in the cyber-security and medical sectors, where privacy is one of the most expensive costs for companies.
With such a largely ambitious project, there is always the ever present question if too much is attempting to be done here. Decentralizing the Internet is no small task after all, and the years of work that have already been done on the Safe Network just show the absolutely monumental task that is being done in this space.
It will also depend largely on the amount of user adoption of the Safe Browser, which is in direct competition to browsers already used in the current day. This will be huge opposition, however browser plugins for popular apps will mitigate this problem somewhat. If you can access the SAFE network from your Chrome browser with seamless integration then there will be no real barriers to entry apart from the usage of the plugin.
SHIFT is a project that’s also aimed at decentralizing the Web. While details of the project itself are rather scarce, SHIFT is one of the few competitors to the Safe Network due to the sheer scale of the project. SHIFT attempts to bridge decentralized web along with a Smart Contract enabled platform, however the relevance of these two facets makes little sense – they have since shifted focus more towards a decentralized Web, however SHIFT has several shortcomings that make MaidSafe a simply better choice. They have no whitepaper released as of yet and their service also functions on blockchain – which becomes a detriment when comparing it to a non-blockchain service like MaidSafe due to the speed of transactions. Not only this, but the erratic developer updates and security flaws makes MaidSafe the superior choice.
Revolutionary projects such as the Safe Network are few and far between – they often have high failure rates and investors must have a large amount of pain and risk tolerance. After all, investing in this kind of service is one of the most un-sexy sounding things you can imagine when it comes to blockchain. The MaidSafe team has very little marketing, focusing more on their development, as well as the idea itself being one that takes a very long time to come to fruition – this has led to a rather low overall price of tokens. This also represents opportunity that, should MaidSafe succeed, will pay investors back many times over in the years to come.
Tezos – XTZ
Tezos is likely one of the most creative cryptocurrency ideas since Ethereum. Taking the concept of Decred (DCR) one step further, Tezos allows for true self governance – where even the developers and updating the codebase of the protocol are decentralized. This takes the idea of democratized decentralization to the extreme level, and possibly its final evolution. From the Tezos website:
Tezos is a new decentralized blockchain that governs itself by establishing a true digital commonwealth. It facilitates formal verification, a technique which mathematically proves the correctness of the code governing transactions and boosts the security of the most sensitive or financially weighted smart contracts.
The impact of something like Tezos isn’t something that’s necessarily self-evident the first time you think about it. It’s similar to Bitcoin in that regard – there were initially many more detractors than supporters of the idea of a decentralized currency. In this sense, Tezos shares many of the same inspirations from Satoshi Nakamoto’s original Bitcoin vision. Imagine a currency that is self-improving and does so using democratic processes. The voice of the people can be heard as they literally meld their currency to fit their specific needs. This takes the concept of electronic, programmable cash and can be applied to almost anything the users can imagine. In a sense, Tezos could be the final cryptocurrency, because it has the potential to do it all. Developers from all over the world collaborate and improve the protocol, as the code becomes a monster that is unstoppable and uncensorable.
Giving too much power to the people could prove to be one of the most dangerous aspects of this project – Tezos serves as not only a blockchain and currency experiment, but a social one. The ability for the protocol to be updated, forked, and everything else about it to be manipulated in some form or another by users could definitely pose problems for the coin. What happens in the event of a community divide? Will 51% of the coin holders take the other 49% hostage? Will a happy medium be struck between users? Time will tell.
Tezos has no real competiton, aside from cryptocurrency itself. While it doesn’t directly compete with Ethereum, it is capable of more secure Smart Contracts. While it doesn’t directly compete with Decred, it is capable of a more powerful version of self governance. While it doesn’t directly compete with more robust projects such as IOTA and EOS, Tezos has the capability to challenge these projects on multiple fronts by being used as a platform for other projects.
Tezos is one of the most unique projects that we’ve seen thus far in the blockchain space – it’s exactly the kind of project an investor is looking for when they’re scouting for Unicorn companies and moonshots. While it may be one of the riskier picks in this portfolio, those who are daring enough to invest in it will be handsomely rewarded should the Tezos experiment prove successful.
Dash – DASH
Dash attempts to be one of the premiere cryptocurrencies used by the masses and people not as involved with the blockchain space. Dash is a foray into the population at large with their core tenets being ease of use, privacy, speed, and market saturation. As their web site states, “Dash is Digital Cash”, and the Dash team goes to great lengths to ensure that their product is one of the most professional in the blockchain world.
More than any other cryptocurrency, Dash poises itself as a frontrunner in the race to be a digital world currency. The impact of Dash can be compared with Bitcoin – whereas Bitcoin serves as a storage for currency, Dash will be the other side of this coin. Dash can be used for real world things like going shopping or paying your rent. Dash, more than any other coin, has the most systems and services in the real world today than any other cryptocurrency. With such a large network effect, ease of use of their applications, and obvious benefits, it’s a simple call to make when choosing whether to invest.
There are always talks of scams and unfair launches when it comes to cryptocurrency, and Dash has been the subject of many of these talks over the years. The truth is that there is a large portion of Dash that is currently held in the hands of the founders of the coin – while this isn’t necessarily a problem, it’s been a continual thorn in the side for the project as detractors levy regular attacks against the team and coin for this reason.
There have been many competitors in the crypto space when it comes to Dash, and PIVX is the latest of these contenders, being the most polished and able one to take down the reigning champion. The important thing to remember here, however, is that PIVX has no real advantages over Dash (it even lacked master-nodes for some time) and much less market saturation, as well as being “second to market” means PIVX will be little more than another challenger that will be left to history.
The goal of cryptocurrency is to be electronic, programmable money. No other project has this goal in mind as much as the Dash project. With a Bitcointalk thread spanning over 6’000 pages, there is already proof in the pudding of massive community support and the potential for true user adoption. Dash is one of the safest bets one can take in the crypto space, because it has actual use cases that people can take advantage of today as a general idea of what to come. International, instant money transfers, micropayments and subdivision of money all present themselves as obvious advantages over fiat counterparts. Anonymity and privacy, while not the specialty of Dash, are supported features that give the power back to the user, and its governance systems ensure a flexible plan for the future.
Monero – XMR
Anonymity, the power of being able to use your currency as you see fit without governments, third parties, or malefactors getting a peek into your activities and purchases is likely one of the most liberating innovations that cryptocurrency will bring. Monero was created to be the coin of choice when it comes to privacy and untraceable, unlinkable transactions, and it focuses solely on this aspect to become the industry leaders.
The capability of having a truly anonymized way to pay for things and be invisible to third parties is something that as of yet has not truly been seen in the modern world. Currently, Monero is used by darknet markets such as Alphabay as their currency of choice in order to keep hidden from the government, however in the future, private transactions will be useful for more than just buying illegal items. As an example, tax evasion is one of the most prolific crimes in the 21st century, and while it may not be a pretty idea to consider such cases, Monero enables one to truly hide their wealth away.
Implementation, reputation, and niche will be the biggest problems that Monero faces down the line. Implementation is difficult due to the technologies that Monero use to privatize transactions – as of yet there are no hardware or mobile wallets that support Monero. Reputation is also a problem with attracting new users – most people regard Monero as only usable for buying drugs and doing other illegal activities. This is similar to how Bitcoin started off, however, so this perception may change over time. Finally is the niche it fills – while Monero is very good at what it does, it only does privacy. If you’re looking for fast transactions, ease of use, or other features that your average user would be interested in, you’re best off looking at other currencies.
Z-Cash is an honest competitor which boasts many powerful anonymity features. Although the goal of anonymized transactions is the same as Monero, Z-Cash does this with different technologies. Ultimately the winner of “best privacy cryptocurrency” will likely go to the coin with the most privacy features – and while Z-Cash certainly has a lot of edges over Monero, it has one huge drawback; the trusted set up. The way Z-Cash works, is that upon creation of the currency there is some seed data that is required – five developers of Z-Cash had access to this data upon launch, and we as users are merely supposed to trust the Z-Cash creators simply deleted this data and removed it from existence. In this sense you need to trust the creators did this action, because with the seed data you are able to create an infinite amount of Z-Cash coins, thus destroying the value within the network. Monero wins out on this due to having a trustless setup – you don’t need to trust the Monero team with anything, as the technology they use is different.
Monero is simply one of the most powerful cryptocurrencies that currently exist in the blockchain space. Its privatized transactions, Ring Signature technology, and diverse (if morally questionable) use cases make this a great pick for future investment.
When every project has potential, none of them do.
It’s been a rather tumultuous week with all of the recent happenings as of late, but that’s really nothing new when it comes to crypto. Total market cap of all crypto currencies and assets went as low as 60 billion before having a great rebound, with many expert traders (such as yours truly!) finding prices extremely oversold and making nice profit off of the rebound.
But today’s article is less about trading and more about investing. I believe that the long term is the most important aspect to keep in mind when judging the value proposition of any kind of business, and we are circuitously acting as venture capitalists when we invest into these new blockchain based companies. As such, we should have a discerning eye and pay a lot of attention to detail when it comes to our investments. It’s our money after all! Hopefully by the time our money comes back to us after a period of investment it’s grown a lot bigger and stronger, as Mr. Wonderful always says.
So then, we want our money to increase in value, and you’re likely here because you have the opinion that this is possible with crypto investments. Great! Now let’s talk about some specifics.
The vast majority of crypto markets are fueled by rich whales (who we eventually want to become) or more small time investors (you and me!) who are scrambling to get as much of that sweet intangible currency as possible. Our demographic is largely male from around 18-30 years old. It’s a young man’s game, and it’s quite the risky one at that. Institutional investors who are older and with bigger balances aren’t as interested in the blockchain space (yet!) because it’s simply too small and volatile at the moment. However, this is what gives us the upper hand when it comes to investing. We can assume risk with our positions, more than “smart money” would usually be fine with. That also means that if our bets are right, that we will make it big time as we were “first to market” so to speak. No one was talking about Google or Amazon when they were new. Now? Completely different story. The ones who bought in early and held were the ones who became very wealthy later on.
Back to demographics though. We already know the age and gender group of our competition. We also know from a general point that no one in this space does any kind of due diligence or research into what exactly it is that they’re buying. I’ve seen even crypto experts who have been in the business for over 5 years outright mention that they have absolutely no idea what half of the things they buy in the cryptosphere actually do. With all of this dumb money being thrown at everything that has even the most miniscule of potential, prices are vastly over-exaggerated for many of these assets. If you want proof of that, simply search your favorite coin on Twitter or Bitcointalk and read what a lot of these so called “investors” do with their time. Most don’t even read the white papers and have no idea when the ICO they just bought will move into distribution. It’s a complete wild wild west right now, and it will only get bigger over time. Eventually, however, people will start wisening up and dumb money will quickly become no money at all, handing over their treasured wealth and crypto assets over to people who played the long term game, played it close to the vest, and kept a judicious eye.
And that’s the lesson of today’s article. Focus on the long term and focus on projects that actually have potential. Don’t pay attention to short term gambles, and if you do, realize that the music will eventually stop and you don’t want to be left without a chair to sit on.
Of course the next question you might be asking is “well this sounds great and all, so give me some picks!” Patience my friend. The next article will be a long one, going over my top 20 altcoin picks and my preferred methods of division and how to invest in them properly, as well as reasons why you should also be investing.
It’s only when the tide goes out that you discover who’s been swimming naked.
Segwit, Segwit2X, Hard Forks, and User Activated Soft Forks. The current quagmire of trouble that Bitcoin has found itself in is certainly an interesting one, what with all of the other things that move at a lightning pace in the crypto world. There are historical forces at work here, and the decisions made as we approach August 1st will echo out for years to come. Is Bitcoin truly self governable? Or will the “fully democratized economy” experiment come to an end? The top 5 mining pools currently own 56.1% of total hash power. Even Antpool’s hashpower by itself is enough to stop SegWit from being activated and reaching the threshold. Which leads us to User Activated Soft Forks, threats of Hard Forks, and even backroom deals such as the New York Agreement which go against the qualities that Bitcoin stands for. All of this information is plenty to take in, and it’s all relevant, especially when you’re putting money on the line. So the question on everyone’s mind is “How do I hedge?” Here are your options.
Sometimes, the best move is to do nothing at all.
This is what most of the market will do. They will continue carrying on with their strategy (most are bullish bitcoin) and will trade BTC/alts at their discretion, looking for more upside in the market. In my opinion this is the most dangerous thing to do, as you are essentially unprepared for whatever comes next. The attitude of “what happens, happens” is the last thing you want to do when you trade cryptocurrencies, and you always need to be a step ahead. If this is you, move down to the next option.
Going 100% Bitcoin
To the moon, baby!
Pulling out of alts and going into Bitcoin solely may represent another opportunity for safety against the volatile altcoin markets and even promise possible gains in the event of a Hard Fork. If Bitcoin does fork in any event, and your coins are safely in a private wallet (either running the BIP 148 node or using a Trezor/Ledger/wallet that supports BIP148) you have the opportunity to double your current bitcoins. While this is less than ideal in the long run for the health of Bitcoin, this does mean there may be some short term gains to be had if trading Bitcoin on a short time frame. Just keep your Bitcoins off the exchanges and in a private wallet.
You also have the possibility of an outcome such as SegWit being activated smoothly, at which point the price of Bitcoin, even put conservatively, will likely double or more. The downsides to this hedge are that Bitcoin has been unstable in the past, and the panic of the markets could set in – many traders are setting targets at around 1800$, and it could go even lower. If you think you’re completely safe by keep full equity in Bitcoin, you do take the risk of a huge devaluation. But what if you want more safety than Bitcoin can provide? If this is you, move down to the next option.
Your third option is to cash out either all or a portion of your portfolio into USD Tether (which is pegged to the US Dollar), or cashing out entirely and waiting in the wings in Fiat currency while you watch and wait for the event to pass. This carries significantly less risk than most other options, and while it does remove your ability to double your Bitcoins in a Hard Fork or make even more money in the case of an alt coin pump before the big move, it also keeps you protected in the event of a huge drawdown or deflation of the market. In my opinion this is the best move to make, to stay alive in this game and move your money out of the markets while you wait for things to settle down. Crypto will always be there when you come back.
Staying in Altcoins
Some traders feel that Altcoins are the best hedge against Bitcoin, and that they will simply not care about the movements of Bitcoin in the short term with the increased volatility of fork news. I believe this couldn’t be further from the truth. We have seen the inverse correlation of old (BTC up, alts down) been completely gone. I’ve noticed a trend as of late where if Bitcoin goes up, alts go down. If Bitcoin goes down, alts will ALSO go down! Alts devalue less when Bitcoin is pumping, but it’s still a significant risk when looking at the possible outcomes of the hard/soft forks in Bitcoin. You’re really playing with fire if you have more than 10-20% of your equity in Altcoins, and in my humble opinion, this is the most risky and volatile route to take. You may find some refuge in smaller cap alts that are lesser known, but as a direct consequence of being smaller caps most of you reading this probably won’t be in those.
my current allocation is 40/40/20 with 20% in alts (due to ICO tokens becoming available ex. tenx).
I believe that the best thing to do is to split your equity between Bitcoin and Fiat/Tether, with a small amount of your equity in altcoins with solid foundations (no shitcoins!) to safely protect yourself against possible incoming panic waves and large sell offs. This way, you can benefit both from Bitcoin either mooning (you didn’t cash everything out) or crashing down (you are able to buy more Bitcoin at the low price, or simply keep profit in Fiat). I believe smart money has already exited the markets, and all that’s left are smaller traders who will more easily back out of their trades and take huge losses while tanking the price of alts across the board.
I remember back in 2012 (I was 17 years of age at the time) a handy little chart came out by this gentleman named Michael Zappa, having created a visualization of possible future trends as well as emerging technologies. To an investor or any VC worth his salt, this is exactly the kind of thing you’re looking for when you’re seeking investment opportunities – pictured below is something called the Bell Curve. This is essentially the psychology that goes on in the substrata of the masses when it comes to accepting new technologies, cultures, lifestyles, and anything in between. When something is new, it initially faces heavy resistance, is seen as weird and ostracizing, and over time (if the idea has merit/marketing/otherwise) market saturation will increase.
If you recall (and if you’re reading this you probably do) the vast majority of phones back in the 2000-2010 era looked like this:
They were relatively small in today’s standards, lacked flexible functionality, and were mostly used for the primary function of contacting people. I remember predictions at the time were that phones would continue to get smaller and smaller (and they did – for a time) and in 10 years our phones would be little chips or wrist band styled. What do we have 7 years later? Some of the largest phones ever to exist:
So what gives? Why did phones actually get BIGGER instead of smaller? Take a look back at that Bell Adoption Curve – simply put, phones got bigger because it became more acceptable to have larger phones. People were clammoring for additional functionality in their pocket – the ability to send e-mail, use applications, play games, and thus necessitated larger machines to handle the load. And so people adapted. And yet, some people knew this was the future. Take a look at market leaders like Apple, who really pushed bigger and bigger phones with each successive release of their iPhones; these are the types of companies that truly profitted off of seing the bigger picture and trend that we were moving towards technologically.
Which brings us back to the idea of venture capitalism and investing in future technologies. What is seemingly the future for the mass population at large may not necessarily be true. We thought we would have flying cars by now 50 years ago. Instead certain small projects, known as unicorn companies, the Googles and Amazons and Facebooks of the world have come in when everyone least expected it. Below is the chart by Michael Zappa showing future trends (reminder that this chart was made in 2012):
While some of these were off, one of interest has piqued my own curiosity lately. If we follow the Adoption Curve, we know that there is large risk in being one of the real innovators of a technology, as many of these tend to fail. In fact, up to 75% of VC funded enterprises DO end up failing. So what is an intelligent investor to do? Well, they simply wait. If enough time passes that we reach the second stage of adoption – where early adopters come into the space, then we are much more sure of our chances at success. I took a look at Michael Zappa’s Web Site and found an interesting section titled “Envisioning Cryptonomy.”
What do you notice about that chart? Most of these have early alphas and concept builds that already exist in the crypto space. Smart contracts, decentralized chat, distributed storage and information, cloud/fog computing, identity authorization and certification. The list goes on and when one looks at the crypto space they are met with all manner of wondrous future technologies. It becomes a matter then, of seperating the wheat from the virtual chaff and finding the projects that are legitimate, have good backing, and a viable plan for the future. One doesn’t need to worry in a particular sense about the marketability or “business model” of most of these. As Jonathan Ive of Apple says “Our goal isn’t to make money, but to make a great product.”
As far as this writer is concerned, we have passed the initial stage of cryptocurrency, the time when it was most dangerous to invest in it. Sure, we may have missed those explosive exponential gains, but we definitely have a lot more safety in saying that crypocurrency and crypto assets have absolutely made a foothold in the coming years and decades. And let me say that exponential and explosive gains remain to be had in the cryptocurrency space. It’s just that a lot of the guesswork has been taken out of the equation at this point.