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EDIT : Thanks to everybody for pointing out the few mistakes/improvements that can be made in this new-player level guide. For the sake of summarizing here : - Intel documents are NOT worth 250k. I didn't check them on the flea before writing this and for some reason I always remembered them at 250k. Game is in maintenance so I can't check the real price. That being said, it's still profitable to craft USB into Intel, it's just not x2 profitable. - Scav case : moonshine / intel docs, some people seem to say they've never been profitable. I personally *did not* measure those, I eyeballed it. I'm working on so much shit that I didn't bother. On average I think that I'm in a net positive, but it's as believable as people saying they're not : without proof we can't really say for sure. That bein said, it's certainly more profitable to run lower-tier scav runs that are *faster* when you're online, and to run a moonshine or intel when you log off. It's more efficient to get a lot of runs while you can re-start them every time. - Crafting moonshine : It's not profitable to spam it ; I was under the assumption that the average player who will read this will usually not play for 4-5 hours straight and will end up collecting yesterday's moonshine, craft a new one, and that's it. If that's you're rythm then yes, spam it. If you intend to play more than one craft worth's of time, then you will craft moonshine faster than you can spend it, and it's not really worth to sell it on the flea except to up your market reputation for a small loss (about 10k). So in short : craft moonshine to be able to start a moonshine run for when you log off, but you don't *need* more than that.
Check this out
Here is some actual data on the lavatory !! Hey everybody ! I know it can be a struggle to get a stable economy in this game, especially when you die a lot. Today I'm gonna try and give a few guidelines on how to make money safely, efficiently, fast, or in any other way we can think of. If you're struggling to stay above the 15-20 million rouble treshold, this guide is definitely for you. Very often I'll hear newer players say "Damn I can't seem to make money, I keep loosing. Every time I take gear I die instantly". There is some truth in that. Today I'll help you improve your survival rate, but most importantly I'll unbalance the other side of the equation. When you complain about losing a lot of money, I will help you spend less by a significant margin, as well as earn more. You'll also get rid of gear fera naturally. Remember this throughout this very, very long read : It all depends on how you want to play, and how much. Some of these tips will not fit how you want to play the game, and like Nikita always says : this game is supposed to be fun before anything else.
Safety Score : 100% Reward : Moderate but very stable. Maxing your hideout should be one of your top priorities, probably before telling your mom how much you love her every now and then. If you're not doing either of those, the big gamer in you knows what to do. Early wipe, save your fuel for when you're online and playing. If you're playing, your generator should definitely be running and all your stations should be crafting something. Once you have Medstation 1, Workbench 1 and Lavatory 2, you really have no reason to turn your generator off when you're playing. Once you have the bitcoin farm, you should never turn off the generator. Medstation : Craft salewas and/or IFAKs permanently. They cost 8k and sell for 15k. That's a net profit of about 25k / hour for salewas, as well as never having to buy any. Lavatory : Always be crafting Bleach. If you have 2 empty blue fuel, use those empty cans to craft a Magazine case. You can then keep the magazine cases until you've enough for your liking and sell those for a good profit. The bleach you will use to buy the 6B47 helmets which are better than the SSh-68 helmets. Buying from 2x bleach barter at ragman level 1 means you get the helmet for 18k (instead of 33k on the market). This helmet has better head coverage, less slow/negative effects, less weight, has a slot for a mount, has +11 ergonomics AND is cheaper than the 22k SSh-68. That being said, it has a slight noise reduction that the Ssh does not have. If you wear headphones I'd say this is negligible but debatable. I prefer to have the extra protection and ergonomics for sure, considering it's slightly cheaper. You can also barter for that helmet and instantly sell it back for a profit (five times) and level up ragman money requirements. Bleach can also be traded for the Blackjack backpack at level 4, as well as the TTV rig at level 2. You should definitely do it. Sell excess bleach on the flea market when the prices are around 10.5k or more. (around midnight Central European Time). Workbench : You can buy Power Cords and craft Wires forever and always make a profit. Buy in the morning and sell in the evening for better profits (CET timezone). For even more profit, you can craft gunpowders and ammo which tend to also be ridiculously pricy at night. Buying grenades from Peacekeeper and crafting green (Eagle) gunpowder is a good way to make a lot of money and level up Peacekeeper. Intel Center : You main objective is to get this one to level 3 for reduced fees and better quest rewards, but also access to the bitcoin farm at level 2. If you need FiR for quests, craft that. When you're done craft Intel Documents at all times (buy the USB), and use it for scav case or sell for a x2 profit. ( 3x40 for USB = 120, documents sell for 250) Bitcoin Farm : Once you have it, spend all your money on GPU until its maxxed, then level it up even more. The BTC farm is definitely worth it. At 50GPU you need to connect every 15 hours to clic. If you can't, keep it level 2 and connect every 24 hours to clic. Even at level 1 its worth. But its much, much faster at higher levels. From 0 to 50 GPUs it takes about 30 days to pay for itself. GPUs should not be sold until you maxxed it. Water Collector : Must be running at all times. Buy the components if you don't have them. Booze Generator : Must be running at all times. Buy the components if you don't have them. Scav Case : Always have it running on moonshine, and use intel documents once you're done crafting one. Nutrition Unit : It's not really worth crafting sugar to put in the Booze gen, as the price for chocolate is pretty much = the price of sugar. So buy the sugar instead and craft something else. I tend to craft Hot Rods when the prices are good (morning) and then use them to barter 5.45 BS Ammo with Prapor or sell for a profit. If you do all that, you should have about 150k an hour fairly easily. Don't forget to check it between every raid.
Safety Score : 100% Reward : Quite good. Once your mom has received all the love she deserves and your hideout is taken care of, you should have max traders (traders are a requirement for most of the hideout anyway). Traders level 4 will net you much better prices on most mods and open very good barter trades. Buy as much as you can from barter trades. You can buy almost everything from it, and it's usually at least 25% cheaper to buy the requirements and then do the barter. Ragman4 has the CPC Armored Rig which is level 5 armor, you'll get it for about 200k instead of 250k on the flea. The Slick is also much cheaper. The Blackjack backpack is literally half priced. You can also NOT use what you barter and just sell it back to a dealer (sometimes the same from which you bartered) for a profit as well as having 2 times the loyalty money increase (from bartering then from selling). Another good example is buying a Recbat 14k from the market, getting an ADAR for skier, selling it to Mechanic and winning 8k just like that. You can find every single barter that nets a profit yourself and just buy-resell and you'll probably make another 100k every reset, if you really are struggling and have the patience. I personally advise to just use the equipment for yourself unless you're levelling traders, but I wouldn't go as far as buying all profitable items every reset. Every trader at every level has good barters. You can make a full decent kit at level 1 traders for about 40k roubles on barter, instead of 90 if you buy it all. (Paca for masks, helmet for bleach, ADAR for recbatt, salewa from craft, backpack, etc. all barters) Bleach is beautiful and is coveted in the real world for its ability to cure diseases.
Safety Score : 100% Reward : Very profitable. Don't mod out of your reach. Don't mod Meta. If money is an issue for you, having +1 ergo won't change your life. For example, Priced at 10k roubles Priced at 45k Roubles See where I'm going with this? If you have money, sure, go for the Shift. If you wanna have fun and try, sure, go for it as well. But if you're struggling, buy 4 cobras and mod 4 guns for the price of 1% recoil which will not make you a gamer god anyway. Also, do NOT buy mods from the flea market when you see you can buy them from traders. Look at the top of the market, if the mod is greyed out, look at the price. It means you don't have access (yet). If the price is too inflated for you, find another mod. There are always other mods. You can make 2 AKMs that have a difference of 2% recoil and 4 Ergonomics and have a 150k price difference. It's up to you. When money is the issue, this was the answer. Note : Some guns are inherently much more expensive. Guns shooting 5.56 or 5.45 tend to be more expensive than 7.62. AKMs are VERY good budget guns. They're a bit harder to handle, but you can get a fully modded AK for 150-200k, where as you will have an entry level M4 for that price. 7.62 PS ammo is also incredibly cheap while being decent. Play 7.62 if you're struggling with money. It's not meta, but it's far more than enough, trust me. You'll rarely lose fights exclusively because you had PS ammo in an AKM. Rarely.
How much you usually extract with, on average, per map
How much you usually go in raid with, on average, per map
These will help us measure how much you fuck up or not. Lets make it simple. If you have a 500k loadout and you usually extract with 100k, at 10% survival rate, that means you will spend 500k x 10 = 5.000.000 roubles over 10 raids on average, die 9 times, and earn 100k once. This very obvious example shows the loss. Basically we're gonna try and balance that equation so that you never lose money on average. You'll have ups and downs obviously, but over a week or two, it'll smooth things out for you, like math always does in a pleasant conversation with a girl. So what can you do to improve that equation ?
4.1 Improve survival rate
Seems simple enough, DIE LESS. You do not need to be good, smart, or special to die less. If you die a lot, do something different. If you die less, try more of that. Explore statistical advantages through different gameplay. What can you do to die less practically? Here is a list of checkboxes you can tick depending on your money, skill, mood, or any other factor like the map and sheer luck:
Fight from a bigger distance. People miss more from far (so will you, but killing less is irrelevant when you want to die less)
Fight with better gear (supressed, better armor, better ammo, etc.). Its expensive, but it technically helps
Don't fight at all. Avoid fights, run away from gunshots. 99.3% of people who didn't get shot survive a raid.
Wait more, play slowly. If you go with the flow of players, you'll be with the players. Avoid that "wave" and stay behind it. When you come across players trying to extract to where you spawned, hide.
Play with friends if you have any. If not, your mom loves you and so do I. I do coaching so do a lot of other decent players, look it up.
Whenever you die, look at what killed you. Did you take a risk ? Did you lack skill ? Were you out of position ? Were you unlucky ? Try to be as OBJECTIVE as possible even in the frustration. It's pretty much always your fault if you died, avoid toxicity and learn something from that instead. If you took a fight with good gear and ammo and just lost, its probably skill/positioning. It's fine. Learn the game, fight differently, and with time it'll get better. If you were in the open, don't go in the open. If you were sprinting in the middle of interchange and got ambushed, well. Don't do that. Learn.
Do all that, it'll give you a LOT of data to actually improve by just doing something different without really being fastestronger, just smarter. And I repeat : you can do some of it, all of it, it depends on what you like, what you're comfortable with, and the time/investment you're putting in the game. It's okay to play at your own pace.
4.2 Reduce gear cost
The second part of our "profit equation" above is how much gear you take with you. Using previous tips, reduce that cost. Barters, cheaper mods, etc.
4.3 Increase extracted value
This one is not as tricky as it sounds. Basically there are two ways to extract with more money in the backpack :
Know what/where to loot
Have a bigger backpack.
The goal is to pay for the gear you will loose when you die while making a profit on top. That one time you extract if you have a MBSS backpack, you'll need items worth like 50k per slot to break even. If you take a tri-zip, suddenly it's only 30k per slot. If you take a blackjack and blackrock from good old ragman, suddenly it's 10k per slot. So you can break even by looting crickents and DVD players almost. See where I'm going ? Always take a tri-zip or bigger unless you're doing something special. That way you can afford to loot shitty areas, take less risk, and survive more while having a little less value. We'll cover that in a minute, but there are ways to loot high value items, moderate value and low value. Those have also different risk/reward. All of those are also map specific. In woods I'll often go with a 6B3TM armored rig for 40k, no helmet, 20k headphones and a sniper rifle. Rest is pouched so does not count. That's less than 100k investment. All players tend to have low value gear so I never extract with a lot either so it balances out. But on Woods, my survival rate is 20% instead of my overall 40%. So I know it's not a map I can reliably make money on, because I measured that accurately over time. This example is very common and should make sense to you. Same goes for interchange where I have more about 50% survival but will tend to go in with 600k worth of gear, but will also often extract with over 500k quite regularly. Different ratios, different values, different purposes. You can measure your own data if you're willing to do so, or you can eyeball it. Eyeballing it is much faster but very inaccurate because you will tend to include emotions in the mix when you die. You'll remember losses ~2x more than your wins (that's somewhat scientifically proven), and if you're eyeballing your loadout you might think you have 600k but really you might have only 450k. I would advise to go hardcore and measure it all for price, initial loadout, losses and earnings, for each map.
5. Money runs
Now money runs are vast and numerous. All include different levels of risk and reward. It's up to you once again to find what you're willing to do for the time it takes, the fun it will give you and how much it will actually help you. You can always try them all for ~50 raids the sake of trying something different and see how your data is impacted. it doesn't have to be 50 in a row if you don't want to. As long as you keep track of it it can be over a whole wipe. You'd have your data ready for the next wipe :) Faster is better though.
5.1 Hatchling runs
Safety Score : 100% Reward : Very Variable. Mentally exhausting. Those are incredibly money efficient. You're investing a gear of 0 value, so whatever you extract with is 100% win, so you cannot possibly lose money that way. Is it fun? Is it rewarding? I don't care, to each is own. Statistcally speaking, hatchling runs are an efficient way to make money. They do however require a little bit of knowledge, but not skill. You'll be much more efficient at doing these kind of runs if you know where to go, what to look for, and how to get there depending on your spawn. That being said, such knoweldge is easily found ; it's nothing complex, it just takes time to learn. Once again, depends on how much you're willing to invest (if not roubles, time).
5.2 Scav runs
Safety Score : 100% Reward : Low-ish Scav runs are also incredibly efficient for the same reason as hatchlings. Except those have a cooldown. Statisticall speaking I have noticed you should always run your scavs as fast as possible on the map where you extract both the fastest and most frequently. The explanation is simple, lets make it simpler : The scav is a button that makes you earn free money. When you press it the button becomes unpressable for some time, when you release the button you earn money (sometimes). That means you want to release the button as often as possible. And for that, you need to release it as fast as possible. It's that simple. So make scavs incredibly fast. I'm talking "Run through" fast. Unless you're looking for FiR items or doing something specific like annoying a streamer, you should literally run straight to the extract every single time, and loot what you have that doesn't make you go out of your way too much. Usually I suggest factory, go in, kill a random scav, loot it, get out. Two weapons is at LEAST 50k, 100 if they have a scope. There you go. That's 100k every 20 minutes (or less with intel center). That's MUCH BETTER than going up to 150-200k but taking 30 minutes to extract, and taking more risk by spending more time in the map. Every second you're in someone can shoot. Nobody can shoot you in the hideout. The exception to that rule is Scavs with a pilgrim which you can take on your favourite loot-run map, probably interchange or reserve. There you should just fill everything you can and extract once you're full, no matter what you have. 30 crickents and an extra gun is fine.
5.3 Stash runs
Safety Score : Very Reward : Okay Those are very very safe and can be done with a pistol and a backpack only. Very cheap, quite unchalleneged, for a moderate reward. Just go on a map that you like and run around and loot all stashes until you're full, then get out. You can vary the map/route depending on the traffic of players. Interchange and shoreline are good contenders for that. It'll net you easy money. Not great money, but definitely safe.
5.4 Loot Runs
Safety Score : Moderate Reward : Quite alright Once you have better knowledge/skill you can start having a specific route in a specific map, depending on a specific spawn. So it'll take time to learn. Usually very similar than a hatchling run except this time you bring moderate gear and go for moderate loots. For example, instead of going for fast techlight, in-and-out interchange, you can decide "alright I'll loot 100% of Oli and the computers in the back", it'll take time, but it'll make good loot. More money than stashes, definitely will see scavs to kill, and most probably some more pvp. More risk. If you win that PvP you have even more loot as well. But overall good reward. Loot runs need to be "scheduled" and thought of after several tries, so you know how much you can take per person depending on backpack size. For example you can't say "lets loot oli" if you have a 5-man with blackjacks, you'll all be empty. Adapt.
Safety Score : Insane Reward : Unreliably moderate This one is pretty obvious. Very risky, unpredictable rewards. Usually better than loot runs when you survive. I won't elaborate on this, because if you're reading this far you're probably struggling in PvP. And the rest of this guide already covers a fair bit.
Safety Score : "Meh" Reward : Very profitable. Now this is very, very important. Always insure your gear. Always. If you die you will get stuff back, pretty much for free. If you're really struggling people won't loot your "trash", so you WILL get it back. If you play in a group it's very likely that people will hide your stuff too. And most importantly : you can insurance fraud. This is the best way to balance the equation we talked about earlier. If you find a decent-ish gun, replace yours. You drop your initial investment by a significant margin, you will definitely get it back, and if you extract it's a flat profit. Weapons don't take inventory slot, so if you have two weapons that are not yours initially they will usually pay for your whole gear. I have quite often left my super-mega-modded HK just for an average M4 or other weapon that I can fight with, just so I can reduce my investment by 350k and up my reward by like 200k instantly. Replace your headphones all the time too, that's an easy -30+30k, same with helmets. even if it's a bit broken or slightly worse. If you're struggling with money, try to leave every raid with at least 3-4 pars of your equipment that aren't yours initially. But value the risk behind this. I won't leave my slick for a Paca at the third minute of a raid just to have that extra 28k. I won't leave my meta-modded HK for a naked mosin. But if it seems decent/doable, do it. It will pay off. Because even if you die, you still get your shit back, and gun is usually the most expensive part of the gear.
7. Final notes
It's all about balance. Find what works *for you* and try shit out. Really, try. You'll die, you'll learn, you'll adapt with data to back that up. I find it crazy that people will die and not try to learn from it. That's how you will improve as a player. First you gotta get smarter, then you'll get better. And with time, skill, mechanics, gamesense, all that will improve on the side. Earning more will snowball in your favour. And if you know you're statistically okay, you will have a much smaller gear fear and enjoy the game more. Sorry for the wall of text, you guys should be used to it with me by now :D I made these guides in video but not in english, so here I am typing it all for you guys. Enjoy :)
Tomorrow [The 27th], at 14.00 Moscow time we plan to start installation of the update 0.12.7. The game will be stopped. Installation of the update will take approximately 4 hours, but can be extended if necessary.
Customs expansion (expansion of industrial area, construction site, added many new explorable buildings, stationary weapons, new location for Reshala spawn etc.)
Added new scav boss - Sanitar.
A former doctor, he worked in the health resort "Lazurny bereg", and before that in the TerraGroup laboratory. After the events that happened in Tarkov, he gathered a gang with former colleagues and operates on the "Shoreline". Actively uses professional skills in combat, quickly healing himself and the gang members. He uses various stimulants and medications, including those of his own production. He can quickly perform surgery by pulling out a bullet or applying a tourniquet on the field. Sometimes he is loyal to the Scavs and can leave a couple of first-aid kits or other medical supplies for his own group members on location
New quests on Shoreline
System for reporting suspicious players, unacceptable nicknames and game bugs abusers (on the post-match screen)
Improved AI behavior:
Bots can pick up items now
Improved AI behavior when they see bodies
Bots now can pick up a second firearm from bodies
AI now can greet each other or player scavs, showing their peaceful intentions
Bots will eat\drink while in peaceful mode
AI will perform a mag check when in peaceful mode
Bots can check someone for friend or foe by aiming at him for some time, if they’re not sure of one’s intentions
Bots will sprint while patrolling if they consider the spot being dangerous
AI will be able to storm the player as a group, if he’s holding position and attacking them
AI will try to avoid dangerous places
FN GL40 Grenade launcher
Mossberg 590A1 Shotgun
.45 ACP Hydr-Shock
9x19 mm QuakeMaker
9x19 mm 7N31
.45 ACP Lasermatch FMJ
.45 ACP AP
7.62x51 mm M993
40x46 мм M381 HE
40x46 мм M386 HE
40x46 мм M406 HE
40x46 мм M433 HEDP
40x46 мм M441 HE
40x46 мм M576 buckshot
Added new stimulants:
P22 (Specimen 22)
Added an additional icon for the network connection status in case of high packet loss
In the container slots window, the container tag is now displayed in the header
Iteration of improving and reworking the skill system:
New skill "Surgery"
Reduces HP penalty for surgery
Improved surgery speed
(Elite) No HP penalty for the restored body part
(Elite) Maximum increase in the speed of surgery
New skill "Aim drills"
Increase of the aiming speed
Decrease the volume of aiming
(Elite) No hand shaking at any stamina value, first 2 seconds after aiming
(Elite) Reduced hands shaking during tremor and fracture, the first 2 seconds after aiming
Rework of the “Strength” skill
Increase all weight limits
Increase the speed of the sprint
Increase the jump height
Increase the strength of the grenade throw
Increase the strength of a melee attack
(Elite) The weight does not take into account the weapons on the sling and on the back
(Elite) Melee attack can be stronger than usual
Rework of the "Endurance" skill
Increased feet stamina
Reduced stamina consumption for jumping
Increased holding breath time when ads
Increased the speed of breath recovery
(Elite) Maximum increase in breathing recovery rate
(Elite) Breathing is no longer dependent on energy
(Elite) Increased stamina reserve
Various fixes in old skills
Added 5 HP to the health of “Chest” zone (from 80 to 85)
Optimized the rendering of decals
Fixed freezes that happened when the sound of thunder or the sound of grenades exploding was played
Optimized the performance of the game server
Fixed an issue with killing the boss of a group of raiders who appeared on the scene after interacting with the trigger was leading to errors on the server
Minor optimizations on the first shot or hit
Optimization of hideout sounds
Fixes of errors that could potentially lead to different freezes
Iteration of fixes and corrections in UI
Bug with the PostFX menu that remains on the screen after closing the settings
Bug playing the sound of contusion if the sound is turned off in the settings
Bug of jerky animation of shooting weapons in the Hideout shooting range
The passage of raiders on the laboratory through the doors
A bug that allowed you to quickly move when constantly tapping the "Run" button when overweight
AS VAL with the handle adapter "Rotor 43" is now impossible to fold
Inability to exit the location via the paid exit “Car”, if you reconnect at the start of the exfil timer
Bug with throwing away the magazine when reloading the weapon via the context menu
Error 228 when receiving items from an expired email
Formulas for calculating prices for items with its resource and its commissions
After the reconnect, the equipment that was not searched become searched
The sound of the visor on/off remained at one point, and does not follow the character
Bug that wouldn't block buttons on the bottom panel after reconnecting as a Scav
Interface block if you go to the “Map” screen without a map
Bug when the "Receive all" button opened only the first and last message with items
Various bugs with switching the sound from “outdoor " to "indoor", and back, when reconnecting
Bug of not blocking an item after it was added to the merchant's sales table
Cartridges from packs of cartridges found in raid now have the status " found in the raid”
Error when studying items from the scav box
Fixes in the flea Market
The search will be updated if you delete and add an item to the wish list
Loss of a player's nickname and rating from the offer line after applying filters
The “search by item" option now resets the selected filters
Bug displaying the loading spinner on top of the list of offers
The mount without the “Found in raid" label ceased to be semitransparent (blocked) in the selection of the item for the offer, if you put and remove the mod on it
Bug when the merchant's avatar was flattened
Incorrect tag behavior on marked items for a flea market offer if you select multiple items from the container, closing and opening the container
Horizontal scrollbar on the product sales screen
Bug when the player couldn't put 2 identical weapons on the flea market if one of them was included in the starter kit for pre-order
Error 1508 - You send bad items- when putting an empty pack of cartridges on a flea Market
Bug, when for buying through a flea market goods from npc merchants needed items found in raid
Fixed in weapon presets
Displaying the indicator “you have mods to build” when there are no mods for the build in the stash
Bug when the build could have been built with the wrong mod that was not in the preset
Weapon disassembly bug if you build the same preset twice with the same weapon
Ability to select items that are blocked for purchase, via the presets by clicking the button “Select all”
Packs of items are no longer displayed in the purchase lists of preset mods
The purchase lists of presets no longer display items the player's own offers
Added an error about lack of space when purchasing preset mods
Bug when opening presets through the lower panel that caused the game client to freeze
Fixed in the hideout
Various fixes in the bitcoin farm
White authorization screen if you improve the pre-order version while in the hideout
Bug when it was possible to install a filter with zero resource in the “Water collector” and it could not be uninstalled
Calculation of fuel consumption time in the “Generator " zone
Bug duplicating the canister icon, when selecting a canister, in the “Generator" zone
Various bugs in group chat
Bugs with the discharge of weapons in the stash
Incorrect position of the fire mod pin and the turn of the barrel of the PPSH
Visual bug for displaying a zero bonus in the base level zones in the Hideout
Visual bug with the availability of time selection before the raid on the Laboratory screen
A bug where the player could spawn outside the location
The Dow fell 525.05, or 1.92%, to 26,763.13, the Nasdaq lost 330.65, or 3.02%, to 10,632.98, and the S&P 500 declined 78.65, or 2.37%, to 3,236.92. The S&P 500 dropped 2.4% on Wednesday in a broad-based retreat that reflected cash-raising efforts. The Nasdaq Composite fell 3.0%, the Russell 2000 fell 3.0%, and the Dow Jones Industrial Average fell 1.9%. U.S. equity futures were firmer in early trading following an agreement on a continuing resolution to avoid a government shutdown and J&J announcing that it has begun a large phase 3 trial of its COVID-19 vaccine. However, the early gains did not hold and the major averages were all in the red by midday. All 11 S&P 500 sectors closed sharply lower between 1.1% (health care) and 4.6% (energy), and traditional safe-haven assets did not see the usual appreciation in times of equity weakness. An initial weakness in the mega-cap stocks, however, gradually spilled over to the broader market, and the negative price action appeared to reinforce the idea that the market's recent pullback may not yet have run its course. The CBOE Volatility Index increased 6.4% to 28.58, which was a relatively modest gain. Losses steepened in the afternoon without much interest to buy the dip. Shares of AAPL fell 4% while TSLA fell 10% post-Battery Day. On a related note, UBS resumed coverage on Apple with a Neutral rating, versus a prior Buy rating. Data from the Johns Hopkins Whiting School of Engineering shows there are now 31.7M confirmed cases of COVID-19 worldwide, including 6.9M in the U.S., and 972,372 deaths due to the disease, including 201,000 in the U.S. Separately, the House passed a government funding bill through Dec. 11 that the Senate is expected to pass later this week. Notwithstanding this piece of good news, general uncertainty surrounding the election, the coronavirus, and the economy likely increased the cash appeal. In other auto news, California Governor Gavin Newsom announced that he will "aggressively move the state further away from its reliance on climate change-causing fossil fuels while retaining and creating jobs and spurring economic growth," issuing an executive order requiring sales of all new passenger vehicles to be zero-emission by 2035 and additional measures to "eliminate harmful emissions from the transportation sector." Among the notable gainers was WDC, which rose 6.7% after the company announced that it is reorganizing and creating separate business units for its Flash and Hard Drive product businesses. Among the notable losers was JPM, which was lower by 1.6% after Bloomberg reported that the bank is set to pay close to $1B to resolve market manipulation investigations by U.S. authorities into its trading of metals futures and Treasury securities. Additionally, shares of DAL fell 2.2% as Bloomberg said that the airline is in talks with EADSY to delay at least 40 aircraft deliveries planned for this year due to the airline's struggles with a travel market hit by the coronavirus pandemic. Elsewhere, European stocks closed higher Wednesday as investors reacted to key data releases from the euro zone and weighed up the possibility of further stimulus measures for the region. Stocks in Asia-Pacific were mixed on Wednesday.
The U.S. Dollar Index rose 0.4% to 94.32, reaching its best level in nearly four months.
EUUSD: -0.4% to 1.1657
GBP/USD: -0.2% to 1.2712
USD/CNH: +0.7% to 6.8255
USD/JPY: +0.5% to 105.41
U.S. Treasuries ended Wednesday on a modestly lower note, but once again, intraday action was confined to a narrow range. The trading day started with modest losses after overnight action saw a rally in European markets, which reflected a rebound in risk tolerance. However, that rebound was short-lived, resulting in a slide into the European close and more weakness on Wall Street.
2-yr: UNCH at 0.13%
3-yr: +1 bp to 0.15%
5-yr: +1 bp to 0.27%
10-yr: +1 bp to 0.68%
30-yr: +1 bp to 1.43%
Oil rose more than 1% on Wednesday, supported by U.S. government data that showed crude and fuel inventories dropped last week, although concerns about the ongoing coronavirus pandemic capped gains. Spot gold dipped 1.5% to $1,870.11 per ounce, having hit its lowest since Aug. 12 at $1,865.03.
WTI crude: +1.0% to $39.94/bbl
Gold: -2.0% to $1868.90/ozt
Copper: -2.2% to $2.993/lb
Bitcoin fell as investors sold equities, gold and other fiat currencies on renewed coronavirus concerns.
Bitcoin: $10,331.92 (24hr: -1.71%)
Ethereum: $369.66 (24hr: -4.38%)
Ripple: $0.22 (24hr: -2.02%)
FAAMG + some penny stocks +18.5% YTD
Spoos +0.2% YTD
Old man -6.2% YTD
Russy -13% YTD
What Patrick, the Cat says?
The S&P 500 is down 5.3% in September while the Nasdaq Composite is down 6.9%. The market could go either way today (to state the obvious). Summaryscrapedfromtheinterweb.Took0.36seconds.
DDDD - The Rise of “Buy the Dip” Retail Investors and Why Another Crash Is Imminent
In this week's edition of DDDD (Data-driven DD), I'll be going over the real reason why we have been seeing a rally for the past few weeks, defying all logic and fundamentals - retail investors. We'll look into several data sets to see how retail interest in stock markets have reached record levels in the past few weeks, how this affected stock prices, and why we've most likely seen the top at this point, unless we see one of the "positive catalysts" that I mentioned in my previous post, which is unlikely (except for more news about Remdesivir). Disclaimer - This is not financial advice, and a lot of the content below is my personal opinion. In fact, the numbers, facts, or explanations presented below could be wrong and be made up. Don't buy random options because some person on the internet says so; look at what happened to all the SPY 220p 4/17 bag holders. Do your own research and come to your own conclusions on what you should do with your own money, and how levered you want to be based on your personal risk tolerance. Inspiration Most people who know me personally know that I spend an unhealthy amount of my free time in finance and trading as a hobby, even competing in paper options trading competitions when I was in high school. A few weeks ago, I had a friend ask if he could call me because he just installed Robinhood and wanted to buy SPY puts after seeing everyone on wallstreetbets post gains posts from all the tendies they’ve made from their SPY puts. The problem was, he actually didn’t understand how options worked at all, and needed a thorough explanation about how options are priced, what strike prices and expiration dates mean, and what the right strategy to buying options are. That’s how I knew we were at the euphoria stage of buying SPY puts - it’s when dumb money starts to pour in, and people start buying securities because they see everyone else making money and they want in, even if they have no idea what they’re buying, and price becomes dislocated from fundementals. Sure enough, less than a week later, we started the bull rally that we are currently in. Bubbles are formed when people buy something not because of logic or even gut feeling, but when people who previously weren’t involved see their dumb neighbors make tons of money from it, and they don’t want to miss out. A few days ago, I started getting questions from other friends about what stocks they should buy and if I thought something was a good investment. That inspired me to dig a bit deeper to see how many other people are thinking the same thing. Data Ever since March, we’ve seen an unprecedented amount of money pour into the stock market from retail investors. Google Search Trends \"what stock should I buy\" Google Trends 2004 - 2020 \"what stock should I buy\" Google Trends 12 months \"stocks\" Google Trends 2004 - 2020 \"stocks\" Google Trends 12 months Brokerage data Robinhood SPY holders \"Robinhood\" Google Trends 12 months wallstreetbets' favorite broker Google Trends 12 months Excerpt from E*Trade earnings statement Excerpt from Schwab earnings statement TD Ameritrade Excerpt Media cnbc.com Alexa rank CNBC viewership & rankings wallstreetbets comments / day investing comments / day Analysis What we can see from Reddit numbers, Google Trends, and CNBC stats is that in between the first week of March and first week of April, we see a massive inflow of retail interest in the stock market. Not only that, but this inflow of interest is coming from all age cohorts, from internet-using Zoomers to TV-watching Boomers. Robinhood SPY holdings and earnings reports from E*Trade, TD Ameritrade, and Schwab have also all confirmed record numbers of new clients, number of trades, and assets. There’s something interesting going on if you look closer at the numbers. The numbers growth in brokers for designed for “less sophisticated” investors (i.e. Robinhood and E*Trade) are much larger than for real brokers (i.e. Schwab and Ameritrade). This implies that the record number of new users and trade volume is coming from dumb money. The numbers shown here only really apply to the US and Canada, but there’s also data to suggest that there’s also record numbers of foreign investors pouring money into the US stock market as well. However, after the third week of March, we see the interest start to slowly decline and plateau, indicating that we probably have seen most of those new investors who wanted to have a long position in the market do so. SPX daily Rationale Pretty much everything past this point is purely speculation, and isn’t really backed up by any solid data so take whatever I say here with a cup of salt. We could see from the graph that new investor interest started with the first bull trap we saw in the initial decline from early March, and peaking right after the end of the crash in March. So it would be fair to guess that we’re seeing a record amount of interest in the stock market from a “buy the dip” mentality, especially from Robinhood-using Millennials. Here’s a few points on my rationalization of this behavior, based on very weak anecdotal evidence
They missed out of their chance of getting in the stock market at the start of the bull market that happened at the end of 2009
They’ve all seen the stock market make record gains throughout their adult lives, but believing that the market might be overheated, they were waiting for a crash
Most of them have gotten towards the stage of their lives where they actually have some savings and can finally put some money aside for investments
This stock market crash seems like their once-in-a-decade opportunity that they’ve been waiting for, so everyone jumped in
Everyone’s stuck at their homes with vast amounts of unexpected free time on their hands
Most of these new investors got their first taste in the market near the bottom, and probably made some nice returns. Of course, since they didn’t know what they were doing, they probably put a very small amount of money at first, but after seeing a 10% return over one week, validating that maybe they do know something, they decide to slowly pour in more and more of their life savings. That’s what’s been fueling this bull market. Sentiment & Magic Crayons As I mentioned previously, this bull rally will keep going until enough bears convert to bulls. Markets go up when the amount of new bullish positions outnumber the amount of new bearish positions, and vice versa. Record amounts of new investors, who previously never held a position in the market before, fueled the bullish side of this equation, despite all the negative data that has come out and dislocating the price from fundamentals. All the smart money that was shorting the markets saw this happening, and flipped to become bulls because you don’t fight the trend, even if the trend doesn’t reflect reality. From the data shown above, we can see new investor interest growth has started declining since mid March and started stagnating in early April. The declining volume in SPY since mid-March confirms this. That means, once the sentiment of the new retail investors starts to turn bearish, and everyone figures out how much the stocks they’re holding are really worth, another sell-off will begin. I’ve seen something very similar to this a few years ago with Bitcoin. Near the end of 2017, Bitcoin started to become mainstream and saw a flood of retail investors suddenly signing up for Coinbase (i.e. Robinhood) accounts and buying Bitcoin without actually understanding what it is and how it works. Suddenly everyone, from co-workers to grandparents, starts talking about Bitcoin and might have thrown a few thousand dollars into it. This appears to be a very similar parallel to what’s going on right now. Of course there’s differences here in that equities have an intrinsic value, although many of them have gone way above what they should be intrinsically worth, and the vast majority of retail investors don’t understand how to value companies. Then, during December, when people started thinking that the market was getting a bit overheated, some started taking their profits, and that’s when the prices crashed violently. This flip in sentiment now look like it has started with equities. SPY daily Technical Analysis, or magic crayons, is a discipline in finance that uses statistical analysis to predict market trends based on market sentiment. Of course, a lot of this is hand-wavy and is very subjective; two people doing TA on the same price history can end up getting opposite results, so TA should always be taken with a grain of salt and ideally be backed with underlying justification and not be blindly followed. In fact, I’ve since corrected the ascending wedge I had on SPY since my last post since this new wedge is a better fit for the new trading data. There’s a few things going on in this chart. The entire bull rally we’ve had since the lows can be modelled using a rising wedge. This is a pattern where there is a convergence of a rising support and resistance trendline, along with falling volume. This indicates a slow decline in net bullish sentiment with investors, with smaller and smaller upside after each bounce off the support until it hits a resistance. The smaller the bounces, the less bullish investors are. When the bearish sentiment takes over across investors, the price breaks below this wedge - a breakdown, and indicates a start of another downtrend. This happened when the wedge hit resistance at around 293, which is around the same price as the 200 day moving average, the 62% retracement (considered to be the upper bound of a bull trap), and a price level that acted as a support and resistance throughout 2019. The fact that it gapped down to break this wedge is also a strong signal, indicating a sudden swing in investor sentiment overnight. The volume of the break down also broke the downwards trend of volume we’ve had since the beginning of the bull rally, indicating a sudden surge of people selling their shares. This doesn’t necessarily mean that we will go straight from here, and I personally think that we will see the completion of a heads-and-shoulders pattern complete before SPY goes below 274, which in itself is a strong support level. In other words, SPY might go from 282 -> 274 -> 284 -> 274 before breaking the 274 support level. VIX Daily Doing TA is already sketchy, and doing TA on something like VIX is even more sketchy, but I found this interesting so I’ll mention it. Since the start of the bull rally, we’ve had VIX inside a descending channel. With the breakdown we had in SPY yesterday, VIX has also gapped up to have a breakout from this channel, indicating that we may see future volatility in the next week or so. Putting Everything Together Finally, we get to my thesis. This entire bull rally has been fueled by new retail investors buying the dip, bringing the stock price to euphoric levels. Over the past few weeks, we’ve been seeing the people waiting at the sidelines for years to get into the stock market slowly FOMO into the rally in smaller and smaller volumes, while the smart money have been locking in their profits at an even slower rate - hence an ascending wedge. As the amount of new retail interest in the stock market started slowed down, the amount of new bulls started to decline. It looks like Friday might have been the start of the bearish sentiment taking over, meaning it’s likely that 293 was the top, unless any significant bullish events happen in the next two weeks like a fourth round of stimulus, in which case we might see 300. This doesn’t mean we’ll instantly go back to circuit breakers on Monday, and we might see 282 -> 274 -> 284 -> 274 happen before panic, this time by the first-time investors, eventually bringing us down towards SPY 180. tldr; we've reached the top EDIT - I'll keep a my live thoughts here as we move throughout this week in case anyone's still reading this and interested. 5/4 8PM - /ES was red last night but steadily climbed, which was expected since 1h RSI was borderline oversold, leaving us to a slightly green day. /ES looks like it has momentum going up, but is approaching towards overbought territory now. Expecting it to go towards 284 (possibly where we'll open tomorrow) and bouncing back down from that price level 5/5 Market Open - Well there goes my price target. I guess at this point it might go up to 293 again, but will need a lot of momentum to push back there to 300. Seems like this is being driven by oil prices skyrocketing. 5/5 3:50PM - Volume for the upwards price action had very little volume behind it. Seeing a selloff EOD today, could go either way although I have a bearish bias. Going to hold cash until it goes towards one end of the 274-293 channel (see last week's thesis). Still believe that we will see it drop below 274 next week, but we might be moving sideways in the channel this week and a bit of next week before that happens. Plan for tomorrow is buy short dated puts if open < 285. Otherwise, wait till it goes to 293 before buying those puts 5/5 6PM - What we saw today could be a false breakout above 284. Need tomorrow to open below 285 for that to be confirmed. If so, my original thesis of it going back down to 274 before bouncing back up will still be in play. 5/6 EOD - Wasn't a false breakout. Looks like it's still forming the head-and-shoulders pattern mentioned before, but 288 instead of 284 as the level. Still not sure yet so I'm personally going to be holding cash and waiting this out for the next few days. Will enter into short positions if we either go near 293 again or drop below 270. Might look into VIX calls if VIX goes down near 30. 5/7 Market Open - Still waiting. If we break 289 we're probably heading to 293. I'll make my entry to short positions when we hit that a second time. There's very little bullish momentum left (see MACD 1D), so if we hit 293 and then drop back down, we'll have a MACD crossover event which many traders and algos use as a sell signal. Oil is doing some weird shit. 5/7 Noon - Looks like we're headed to 293. Picked up VIX 32.5c 5/27 since VIX is near 30. 5/7 11PM - /ES is hovering right above 2910, with 4h and 1h charts are bullish from MACD and 1h is almost overbought in RSI. Unless something dramatic happens we'll probably hit near 293 tomorrow, which is where I'll get some SPY puts. We might drop down before ever touching it, or go all the way to 295 (like last time) during the day, but expecting it to close at or below 293. After that I'm expecting a gap down Monday as we start the final leg down next week towards 274. Expecting 1D MACD to crossover in the final leg down, which will be a signal for bears to take over and institutions / day traders will start selling again 5/8 Market Open - Plan is to wait till a good entry today, either when technicals looks good or we hit 293, and then buy some SPY June 285p and July 275p 5/8 Noon - Everything still going according to plan. Most likely going to slowly inch towards 293 by EOD. Will probably pick up SPY puts and more VIX calls at power hour (3 - 4PM). Monday will probably gap down, although there's a small chance of one more green / sideways day before that happens if we have bullish catalysts on the weekend. 5/8 3:55PM - SPY at 292.60. This is probably going to be the closest we get to 293. Bought SPY 290-260 6/19 debit spreads and 292-272 5/15 debit spreads, as well as doubling down on VIX calls from yesterday, decreasing my cost basis. Still looks like there's room for one more green day on Monday, so I left some money on the side to double down if that's the case, although it's more likely than not we won't get there. 5/8 EOD - Looks like we barely touched 293 exactly AH before rebounding down. Too bad you can't buy options AH, but more convinced we'll see a gap down on Monday. Going to work on another post over the weekend and do my updates there. Have a great weekend everyone!
Can Blockchain Gaming Drive Cryptocurrency Adoption?
The gaming industry, with its approximately 2.5 billion gamers worldwide, is a lucrative target and an immense field of application for blockchain itself, Bitcoin and other cryptocurrencies that could no doubt give a mighty push toward taking and making the technology mainstream. Honestly, this is not quite a news as the efforts to establish cryptocurrencies in the entertainment sector have gone a long way, with varying degrees of success. by StealthEX What they were, how it fared, and where things are going now – these questions deserve their own inquiry. So let’s take a look at how gaming facilitates cryptocurrency adoption, in what ways, and whether exposing the blockchain tech to a user base of a third of the world’s population would help oil the wheels of this sportster in a major way and ultimately cause a tectonic shift in the gaming industry itself.
A Little Bit of History
As Bitcoin kicked off in late 2008, with its first transaction hitting, or effectively starting, the blockchain in early January of 2009, it had taken well over two years till the cryptocurrency got involved in online gambling. It was the now-defunct mobile poker platform, Switchpoker, a developer of an online poker room that started to accept Bitcoin as a deposit and payment option. You can still find a topic on Bitcointalk.org about this news dated back to November 23, 2011. In April 2012, Erik Voorhees, an American entrepreneur and early Bitcoin adopter, founded Satoshi Dice, arguably the oldest online cryptocasino on the block, which is still pretty much alive today, although Voorhees sold it in a year. What makes it truly intriguing is the fact that during its early years the casino was generating half of all the transactions on the Bitcoin network. In short, online gambling was critically important in Bitcoin’s infancy years as it helped promote cryptocurrency awareness that led to future growth and expansion into other areas. Some folks are certainly going to argue that gambling is not the same thing as gaming. The commonly accepted view is that gaming is based on skill while gambling on chance. We won’t debate over this point. However, as every poker player knows, the outcome of a poker game depends not only on luck, but also on skill and expertise. Put simply, there are large gray areas and overlaps. All things considered, our exposition would be missing a big chunk of significant history without giving due credit to gambling and how it helped Bitcoin adoption. Now that online gambling is off our chest, we can safely turn to gaming as it is understood in the industry, and look at how it helped the blockchain space. One of the first uses of Bitcoin in a major game that we are aware of started in 2014 with the launch of BitQuest, a Minecraft server that used Bitcoin for in-game transactions. Within the gaming environment you could buy valuable in-game stuff from other users with the so-called bits, small fractions of a Bitcoin, and earn them by completing in-game tasks or challenges like killing local monsters. BitQuest closed the server in summer of 2019, and its brand name now belongs to a different entity not involved with gaming, but it still produced an impact. In essence, this effort successfully demonstrated how a cryptocurrency, in this case Bitcoin, can be used in lieu of a native in-game currency that players can earn, buy and spend as well as withdraw. This has serious implications for two main reasons. First, Bitcoin, unlike any other purely in-game currency, has uses outside the game and its ecosystem, and, second, its supply cannot be manipulated by the game developers, which makes the game by far more fair and square. Needless to say, the example that BitQuest had set encouraged other market participants to look into Bitcoin as an alternative option for in-game currencies. Another popular Minecraft server, PlayMC, also introduced Bitcoin into its world in 2015, but ceased the operation just two years later. There were a few other servers experimenting with altcoins, more specifically, Dogecoin, but most of them disappeared from the scene shortly thereafter, failing to attract enough die-hard Minecraft fans.
What Has Changed?
With the arrival of smart contract-enabled blockchains such as Ethereum, EOS and TRON, the phrase “blockchain gaming” has taken on a more literal meaning as these blockchains allow games to be designed and played entirely on-chain in much the same manner trades are made on a decentralized exchange. While TRON stands for “The Real-time Operating system Nucleus”, there is an obvious reference to a once popular arcade game based on a titular 1982 science fiction film that ultimately garnered a cult following. CryptoKitties is likely the most popular game ever released in the Ethereum ecosystem and probably in the whole crypto space so far. Its test version was made available on October 19, 2017, and it was an instant success. By the end of 2017 over 200,000 people signed up for the game, spending over $20 million in Ether. We won’t delve into its “gameplay” as it is beyond the scope of this article, and most certainly you are well familiar with it anyway. But what we absolutely should write about is the effect it made and the repercussions it produced. It could be said that CryptoKitties was to the Ethereum blockchain what Satoshi Dice had been to Bitcoin in the early days of crypto. At the peak of its popularity the game reportedly accounted for 20-25% of all Ethereum’s traffic that clogged the entire Ethereum network, with transaction fees skyrocketing. No wonder lots of people got pissed off with this turn of events. However, despite all the rage and fury, CryptoKitties amply demonstrated what a success means in the blockchain gaming field, how it looks and feels in practice. It is hard to estimate how much CryptoKitties contributed to cryptocurrency adoption. But given that a few hundred thousand people got involved in this game alone and many more with dozens of blockchain games that it has spawned, like Etherbots, Gods Unchained, The Six Dragons, etc, this indisputable triumph surely counts as a massive contribution by any definition or metric. Moreover, it also revealed the weaknesses of the contemporary blockchain solutions and what exactly should be done to overcome them. Evolution never goes linearly. In fact, it generally doesn’t go in curves, circles, or zig zags, either. It always moves along very diverse routes, directions and entire dimensions like plants and animals, viruses and bacteria, and, well, dinosaurs and mammals. The evolution of gaming in crypto space is no different. СryptoKitties and other games share essentially the same tech under the hood – building games on some advanced general-purpose blockchain such as Ethereum. But it is not the only front that crypto gaming has been advancing on, nor is it the only way to introduce gaming to cryptocurrencies, and vice versa. A more recent approach is based on designing either a standalone cryptocurrency or a token on a smart contract-enabled blockchain to be used across many games that support it as an in-game currency. As a result, gamers can enjoy true ownership of their in-game assets (the so-called non-fungible tokens, or NFTs), safe item trading outside the game, and cross-game compatibility. This path has been taken by such projects as Enjin (ENJ), GAME Credits (GAME), Decentraland (MANA), WAX (WAXP) and others, with their respective cryptocurrencies fueling a range of games. A somewhat different avenue is taken by Funfair (FUN), Chromia (CHR) and Lucid Sight, which are offering platforms that blockchain games can be built on. Thus, Lucid Sight’s Scarcity Engine is focused more on game creators than end users, that is to say, gamers, allowing developers to integrate blockchain into their games. It aims to obliterate the difference between blockchain-based games and traditional gaming platforms. Funfair, on the other hand, leans more toward creating custom-built blockchain casinos, with its FUN token as a casino “chip”. So much for no more gambling, huh. Our account of events would be incomplete if we didn’t mention yet another attempt to make use of Minecraft for the purpose of introducing cryptocurrencies to the gaming public. This time, a new Minecraft mod called SatoshiQuest has emerged. To participate in it, the gamers pay $1 in Bitcoin and get one in-game life. The pooled coins make up the loot, and the challenge is to find a minimum of 400 key fragments into which the keys to the Bitcoin wallet containing the prize are divided. And who said that evolution doesn’t loop?
Challenges and Future Prospects
The knockout popularity of СryptoKitties has clearly shown the scale of cryptocurrency mass adoption that blockchain gaming can trigger. As the game developers themselves put it, their “goal is to drive mainstream adoption of blockchain technology”. They believe that “the technology has immense benefits for consumers, but for those benefits to be realized, it needs to be experienced to be understood”. Speaking more broadly, as more people start using cryptocurrencies for gaming, they may eventually become interested in using their coins for purposes other than playing one game or another. With that said, it is now as clear that there are two main barriers on the way there. The first is the limitations of the blockchain tech itself that essentially limits blockchain gaming to NFTs, in-game currencies, streamlined payments, and similar stuff. This is mostly a technical challenge anyway, and we could realistically expect it to be solved sooner or later. The other issue is applicable to the gaming industry as a whole. People en masse would only play games that are truly engaging and immersive, technical issues aside. So the bottom line is that we need the convergence of these two vectors to make blockchain a dominating force in the gaming industry. First, the blockchain tech should have the capacity for running multiplayer games that major video game developers like Blizzard, Valve and Ubisoft produce, no trade-offs here. Then, we actually need the games like Warcraft, Counter-Strike or Far Cry that can be played on blockchain, to make it matter. Only after we get there, the gaming industry will likely become a primary driver behind cryptocurrency adoption. What are your thoughts on how gaming facilitates cryptocurrency adoption? Tell us your ideas in the comments below. And remember if you need to exchange your coins StealthEX is here for you. We provide a selection of more than 250 coins and constantly updating the list so that our customers will find a suitable option. Our service does not require registration and allows you to remain anonymous. Why don’t you check it out? Just go to StealthEX and follow these easy steps: ✔ Choose the pair and the amount for your exchange. For example BTC to ETH. ✔ Press the “Start exchange” button. ✔ Provide the recipient address to which the coins will be transferred. ✔ Move your cryptocurrency for the exchange. ✔ Receive your coins. Follow us on Medium, Twitter, Facebook, and Reddit to get StealthEX.io updates and the latest news about the crypto world. For all requests message us via [[email protected]](mailto:[email protected]). The views and opinions expressed here are solely those of the author. Every investment and trading move involves risk. You should conduct your own research when making a decision. Original article was posted onhttps://stealthex.io/blog/2020/09/22/can-blockchain-gaming-drive-cryptocurrency-adoption/
AlteredMagnum A.K.A. MRmagnum's $Whale Journey in some nutshell #my-whale-journey
$Whale MRmagnum's $Whale Journey in some nutshell: Hello there. This piece that I am writing is something I am a bit uncomfortable with. I’m not a native English speaker to begin with but I have been fortunate. Thank the lord and my mother for allowing me to learn to read and write in this wonderful language rather fluently to some extent. Having little practice in the art of writing over the years it makes me anxious and perhaps nervous too on some level. And yes, I do feel a bit rusty. But, where there’s a will there’s a way! So, I have chosen mind over matter without a clue as to how this will turn out. Oh, It’s on! So, it turns out I wasn’t even aware of the “Maiden Voyage”. The formerly mentioned terminology eluded me until very recently in fact. That’s some ship that set sail huh! The title itself is very catchy. Love it! Woohoo! With the drops and all. 30K $Whale! Say whaaaaaaaaaat? 😊 Needless to repeat it though. That was some major jackpot I wasn’t meant to land. Well, I can smile and think that there are people who were blessed to be there at the right place at the right moment in time. Hats off to them! This was not exactly my case since I just joined the community later on. We can’t have it all and should not want it all is how I try to reason with myself in such regard these days. Now, rewinding things a bit to give you some idea of my background. Well, I got into the crypto currency scene sometime in Mid-2017. Back then less people ever heard of Bitcoin, and crypto currency was not in the news as much as it is today. It’s still so very hard to get in. The barriers to entry are still quite steep for most of us outside the Western world. Sadly, though I had just bought some BTC and thanks to a Coinomi wallet malfunction plus my stupidity (I DID NOT WRITE MY BACKUP PHRASE KEY RIGHT) during that time I lost whatever I had. That was like a few months worth of my paycheck down the sinkhole! Lol! SMH! By the way I was up like 200% between Jul – December, 2017. So yeah! Shit happens and it happened to me. No doubt we all have similar “horror” stories of varying degrees. Some say that failure is the pillar of success. Indeed, I suppose it is so. I hope my mistakes lead me to make me wiser and smarter and lead me to the right direction because I have had my share of scams and pathetic as they may have been, I was partly responsible for falling into those silly traps to begin with. Now, onto my journey. It began when I heard about you yes you the “Whale community” sometime in August, 2020 when my dear friend Ivic13 suddenly invited me to the Whale Discord server. He’s a good lad I came across on some other random server on Discord by the way. We actually had a DM about it and I suppose he knew about the maiden voyage then. Trusting his judgement, I just jumped aboard without much thought to be honest. It turns out that we used to chat on some random Discord server’s on and off haha! He is a good soul who sort of pushed me in here in the first place. For that I am eternally grateful. And since then I have come to like my time here on Whale more and more increasingly … alas! If time were kinder to me perhaps? I should have been here earlier! That FOMO feel leave a slightly bitter taste in my mouth *chuckles*. Guess there is a time and place for things. I had joined out of pure curiosity not knowing what the hell I was getting myself into. But, with regards to that it has not been a mistake. No siree! It has been a great privilege truth be told. No regrets whatsoever in being a part of the Whale fam! It didn’t take me long to figure out that I needed to become a Dolphin. However, wishful thinking that I attempt not to linger on says “Why didn’t I buy some $Whale after joining?” It doesn’t matter. I am a Dolphin after all. Next up, dare I try to be a Shark? Haha! In a way time will tell. It does cost quite a lot by current rates. Sure hope there is a loan system and no interest in that please! So then maybe a lot of us can try for the Shark role too 😉 I had to put in some two bits and hope that’s alright. So, before I joined the wonderful $Whale Community I was almost a lost cyber-wanderer here on Discord. I had no clue what the hell I was doing with regards to the crypto currency world, Discord, etc. among some things. Awareness of the digital art realm with relation to NFTs, social coins, etc was sort of non-existent in my mind. I had no ideas regarding all this. My journey as a member of the $Whale community has been one of epic proportions I would say. Albeit in such a short time too. Why? Because of our wonderful community. The laughs I get thanks to the funny antics of the other users cheers me up at times. It’s because we get to share great joy together which almost seems lacking in the world at times. Then the fact that I am learning things sometimes slowly and sometimes not so. It fuels my hunger and the curiosity to learn and get deeper into the $Whale world. Therefore, I would like to declare that in addition to learning and the banter and fun we have there is such a strong sense of comradery amongst us! Truth be told it would not be surprising if the real world and our friends in it don’t give us that anymore. Yet, here as if by some miracle I find an amazing community and will echo it from time on Discord and among us 😉 Please do bear with me! I know I repeat this but yeah, my maternal grandfather was a self-taught artist and protégé to one of the legendary and greatest artists from my country. Somehow, I was denied my bloodline perhaps by fate and my own poor decisions and didn’t really pursue art as a result. Oh how I do regret that now! Guess it’s not too late to start over hmm…. Well then, I have no clue how this will turn out but to be clear the Town Hall was sensational! I see the true leadership in WhaleShark and it gives me great pride to be associated with him and the community. There are so many great people here that a list in itself would be quite something plus the number of names to place in there! But, yeah! I sign off with a few things to say then….. Where’s that $Turd coin? Haha! And May wealth come to us all. I hope to learn from you all and I hope you all learn something from me too. With regards to hopes some of them have been mentioned then. I’d love to see how the NFT and social coin scene flourishes! And along with it so should we. Thank you $Whale. I think I will try to broaden my horizon and participate more actively in the events and competitions taking place. Let’s grow together. This a part of the journey of life we have embarked upon. A song tribute for everyone (i grew up listening to) Hope you all enjoy this fine tune: https://www.youtube.com/watch?v=zSAJ0l4OBHM
Eyes On Stimulus Developments Again Investors are still largely focused on new twists and turns with stimulus efforts in the U.S. Last night, President Donald Trump said talks had resumed on an aid package for the struggling U.S. economy, while House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin are expected to talk once again. Global stock markets have started the day off with a dose of optimism. The Shanghai Composite Index rose 1.7% following a strong read on services activity in China and the SZSE Component Index was up 3.0%, while Hong Kong's Hang Seng fell back 0.3% and Japan's Nikkei slipped 0.1%. European stocks are largely higher despite sluggish PMI data, with the Stoxx 600 Index gaining 0.2%. France's CAC 40 and the U.K.'s FTSE 100 are both in positive territory in mid-day action. Meanwhile, U.S. stock futures are setting up for a positive open, with S&P 500 futures up 0.4% and Dow Jones futures 0.3% higher. Crude oil stays on track for big week Oil (CL1:COM) is poised for its biggest weekly gain since May, even though prices have tracked back just a bit. Operators in the Gulf of Mexico have closed off about 92% of production ahead of Hurricane Delta as the storm barrels toward Louisiana. Yesterday, OPEC forecast global oil demand will keep rising until around 2040, when it will plateau at about 109.3M bbl/day, or about 10% above the level of production in 2019. Later today, traders will get their hand on the latest Baker Hughes U.S. oil rig count report. In early action, WTI crude oil futures -0.8% to $40.86/bbl and Brent crude -0.3% to $43.20/bbl. AMD seeking to buy Xilinx in latest big semiconductor tie-up Advanced Micro Devices (NASDAQ:AMD) is in advanced talks to buy rival chip maker Xilinx (NASDAQ:XLNX) in a deal that could be valued at more than $30B, WSJ reports. Earlier talks are said to have stalled before recently restarting, and the latest deal under discussion could come together as soon as next week, according to the report. A deal for Xilinx would raise AMD to a more even competitive footing with Intel (NASDAQ:INTC) and give it a bigger position in the growing telecom and defense markets. Golden Week traffic in Macau disappoints Traffic in Macau fell 85.7% during Golden Week to come in well short of most expectations within the industry. Of the 139,280 visitors to enter during the holiday week, 97,126 came via the Gongbei Border Gate, 4,190 by ferry and 7,149 by plane. JPMorgan reset expectations on a Macau recovery after the Golden Week disappointment. "Choppy demand and dwindling hope of 'return to normalcy in 2021' make us acknowledge the sector's risk-reward isn't as attractive as we had envisioned, despite seemingly undemanding valuation (on 2022, not 2021)," updated the firm. Earlier this week, the Macau sector received some good news when Bernstein Research predicted that all six casino operators will retain their licenses, although the government is likely to impose additional economic conditions. The firm doesn't think the current tensions between Washington and Beijing will prevent U.S. operators from staying in Macau. Nikola talks up hydrogen potential Nikola (NASDAQ:NKLA) showed off its prototypes to the hydrogen industry yesterday at an event that also covered the company's patents and strategy to be a technology integrator. The presentation coincided with National Hydrogen and Fuel Cell Day 2020. Nikola noted it has developed core IP related to, among other things, vehicle integration and hydrogen storage and fueling, and continues to work with its world-class partners to develop next-generation standard fueling hardware and advance hydrogen fuel cell-based transportation. "Nikola is creating an ecosystem that integrates next-generation truck technology, hydrogen fueling infrastructure and maintenance. By removing commercial trucks from the carbon equation, Nikola is fulfilling our mission of leaving the world a better place," said CEO Mark Russell. Shares of Nikola are up 2% premarket Takeda in group trial for COVID-19 hyperimmune convalescent plasma treatment Japan's Takeda (NYSE:TAK) is part of a group of companies testing an experimental COVID-19 convalescent plasma treatment, derived from those having recovered from the disease. The "hyperimmune" drug combines antibodies from multiple recovered patients, vs. typical convalescent treatments derived from single patients. Takeda, Emergent BioSolutions (NYSE:EBS), CSL Behring (OTCPK:CSLLY) and Grifols (NASDAQ:GRFS) are gathering antibodies in the government trial, funded by the National Institute of Allergy and Infectious Diseases; it could be completed by year-end. DOJ eyes cryptocurrency threats The Department of Justice said in a new report that law enforcement is hampered by the global nature of digital coins and the lack of consistent regulation across regions. Cryptocurrencies in general are called detrimental to the safety and stability of the international financial system due to the opportunities for rogue nations, criminals and terrorists to skirt reporting requirements. "Current terrorist use of cryptocurrency may represent the first raindrops of an oncoming storm of expanded use,” stated Attorney General William Barr's Cyber-Digital Task Force. The task force warned that cryptocurrencies provide bad actors with the means to earn illegal profits and become a threat to national security. The DOJ's larger goal with the report is to lay out a framework for cryptocurrency enforcement. China Services PMI runs hot China September Caixin Services PMI came in at 54.8 to top both the consensus mark of 54.3 and the 54.0 reading for August. Services PMI has now increased for five straight months, and the latest rate of expansion was among the highest recorded over the past decade. Growth was supported by a marked rise in total new business, though new export work continued to decline. A sustained rise in overall client demand led firms to expand their payrolls for the second month in a row amid increased capacity pressures. Companies also retained a positive outlook regarding activity over the year ahead, with business confidence improving since August. Chinese funds targeting Ant IPO draw $9B from millions of retail investors Five Chinese funds targeting the upcoming mega-IPO of Ant Group (NYSE:BABA) sold out in days, having cumulatively raised about 60B yuan - or about $8.93B - from more than 10M retail investors. The funds launched Sept. 25 to raise 12B yuan each and invest up to 10% of assets to buy shares in the Ant IPO, aiming to raise about $35B in a Hong Kong/Shanghai dual listing and value the company at more than $250B. Two of the funds hit their target even before a week-long holiday that started Oct. 1; Ant's Alipay says today the other three sold out as well. What else is happening... LSE (OTCPK:LDNXF, OTCPK:LNSTY) to sell Borsa Italiana to Euronext (OTCPK:EUXTF) for €4.3B. NXP Semiconductors (NASDAQ:NXPI) shoots to 52-week high after strong preliminary Q3 numbers. GameStop (NYSE:GME) soars after Microsoft (NASDAQ:MSFT) development. Disney (NYSE:DIS) moves 'Soul' to streaming, in theaters' latest loss. Today's Markets In Asia, Japan -0.1%. Hong Kong -0.3%. China +1.7%. India +0.8%. In Europe, at midday, London +0.7%. Paris +0.4%. Frankfurt -0.05%. Futures at 6:20, Dow +0.4%. S&P +0.4%. Nasdaq +0.3%. Crude -0.8% to $40.86. Gold +1.2% to $1918.70. Bitcoin +2.9% to $10890. Ten-year Treasury Yield -2 bps to 0.765% Today's Economic Calendar 9:00 Fed's Barkin: “Community Conversation: Resiliency of the Economy” 10:00 Wholesale Inventories (Preliminary) 1:00 PM Baker-Hughes Rig Count
When we were a much smaller society, people could trade in the community pretty easily, but as the distance in our trade grew, we ended up inventing institutions such as banks, markets, stocks etc. that help us to conduct financial transactions. The currencies we are operating with nowadays are bills or coins, controlled by a centralized authority and tracked by previously mentioned financial institutions. The thing is, having a third party in our money transactions is not always what we wish for. But fortunately, today we have a tool that allows us to make fast and save financial transactions without any middlemen, it has no central authority and it is regulated by math. Sounds cool, right? Cryptocurrency is this tool. It is quite a peculiar system, so let’s take a closer look at it. by StealthEX
Layers of a crypto-cake
Layer 1: Blockchain
First of all – any cryptocurrency is based on the blockchain. In simple words, blockchain is a kind of a database. It stores information in batches, called blocks that are linked together in a chronological way. As the blockchain is not located in one place but rather on thousands of computers around the globe, the blockchain and the transactions thus are decentralized, they have no head center. The newest blocks of transaction are continuously added on (or changed) to all the previous blocks. That’s how you get a cryptocurrency blockchain. The technology’s name is a compound of the words “block” and “chain”, as the “blocks” of information are linked together in a “chain”. That’s how crypto security works – the information in the recently created block depends on the previous one. It means that no block can be changed without affecting the others, this system prevents a blockchain from being hacked. There are 2 kinds of blockchain: private and public. Public, as goes by its name, is publicly available blockchain, whereas private blockchain is permissioned, which only a limited number of people have access to.
Layer 2: Transaction
In fact, everything begins with the intention of someone to complete a transaction. A transaction itself is a file that consists of the sender’s and recipient’s public keys (wallet addresses) and the amount of coins transferred. The sender begins by logging in into his cryptocurrency wallet with the private key – a unique combination of letters and numbers, something you would call a personal password in a bank. Now the transaction is signed and the first step which is called basic public key cryptography is completed. Then the signed (encrypted) transaction is shared with everyone in the cryptocurrency network, meaning it gets to every other peer. We should mention that the transaction is firstly queued up to be added to the public ledger. Then, when it’s broadcasted to the public ledger, all the computers add a new transaction to a shared list of recent transactions, known as blocks. Having a ledger forces everyone to “play fair” and reduce the risk of spending extra. The numbers of transactions are publicly available, but the information about senders and receivers is encrypted. Each transaction holds on to a unique set of keys. Whoever owns a set of keys, owns the amount of cryptocurrency associated with those keys (just like whoever owns a bank account owns the money in it). This is how peer-to-peer technology works.
Layer 3: Mining
Now let’s talk about mining. Once confirmed, the transaction is forever captured into the blockchain history**.** The verification of the block is done by Cryptocurrency Miners – they verify and then add blocks to the public ledger. To verify them, miners go down on the road of solving a very difficult math puzzle using powerful software, which is that the computer needs to produce the correct sequence number – “hash” – that is specific to the given block, there is not much chance of finding it. Whoever solves the puzzle first, gets the opportunity to officially add a block of transactions to the ledger and get fresh and new coins as reward. The reward is given in whatever cryptocurrency’s blockchain miners are operating into. For example, BTC originally used to reward miners in 50 BTC, but after the first halving it decreased to 25 BTC, and at present time it is 6.25 BTC. The process of miners competing against each other in order to complete the transactions on the network and get rewarded is known as the Proof-of-Work (PoW) algorithm, which is natural for BTC and many other cryptocurrencies. Also there are another consensus mechanisms: Proof-of-Stake (PoS), Delegated Proof-of-Stake (dPoS), Proof-of-Authority (PoA), Byzantine Fault Tolerance (BFT), Practical Byzantine Fault Tolerance (pBFT), Federated Byzantine Agreement (FBA) and Delegated Byzantine Fault Tolerance (dBFT). Still, all of them are used to facilitate an agreement between network participants. The way that system works – when many computers try to verify a block – guarantees that no computer is going to monopolize a cryptocurrency market. To ensure the competition stays fair, the puzzle becomes harder as more computers join in. Summing it up, let’s say that mining is responsible for two aspects of the crypto mechanism: producing the proof and allowing more coins to enter circulation.
Types of cryptocurrency
In the virtual currency world there are a bunch of different cryptocurrency types with their own distinctive features. The first cryptocurrency is, of course, Bitcoin. Bitcoin is the first crypto coin ever created and used. BTC is the most liquid cryptocurrency in the market and has the highest market cap among all the cryptocurrencies.
The term ‘altcoins’ means ‘alternatives’ of Bitcoin. The first altcoin Namecoin was created in 2011 and later on hundreds of them appeared in crypto-world, among them are Ravencoin, Dogecoin, Litecoin, Syscoin etc. Altcoins were initially launched with a purpose to overcome Bitcoin’s weak points and become upgraded substitutes of Bitcoin. Altcoins usually stand an independent blockchain and have their own miners and wallets. Some altcoins actually have boosted features yet none of them gained popularity akin to Bitcoin. More about altcoins in our article.
Token is a unit of account that is used to represent the digital balance of an asset. Basically tokens represent an asset or utility that usually are made on another blockchain. Tokens are registered in a database based on blockchain technology, and they are accessed through special applications using electronic signature schemes. Tokens and cryptocurrencies are not the same thing. Let’s explain it more detailed: • First of all, unlike cryptocurrencies, tokens can be issued and managed both centralized and decentralized. • The verification of the token transactions can be conducted both centralized and decentralized, when cryptocurrencies’ verification is only decentralized. • Tokens do not necessarily run their own blockchain, but for cryptocurrencies having their own blockchain is compulsory. • Tokens’ prices can be affected by a vast range of factors such as demand and supply, tokens’ additional emission, or binding to other assets. On the other hand, the price of cryptocurrencies is completely regulated by the market. Tokens can be: • Utility tokens – something that accesses a user to a product or service and support dApps built on the blockchain. • Governance tokens – fuel for voting systems executed on the blockchain. • Transactional tokens – serve as a unit of accounts and used for trading. • Security tokens – represent legal ownership of an asset, can be used in addition to or in place of a password. Tokens are usually created through smart contracts and are often adapted to an ICO – initial coin offering, which is a means of crowdfunding. It is much easier to create tokens, that is why they make a majority of coins in existence. Altcoin and token blockchains work on the concept of smart contracts or decentralized applications, where the programmable, self-executing code is ruling the transactions within a blockchain. By the way, the vast majority of tokens were distributed on the Ethereum platform.
Generally a fork occurs when a protocol code, on which the blockchain is operating, is being changed, modified and updated by developers or users. Due to the changes, the blockchain splits into 2 paths: an old way of doing things and a new way. These changes may happen because: a disagreement between users and creators; a major hack, as it was with Ethereum; developers’ decision to fix errors and add new functionality. The blockchain mainly splits into hard forks and soft forks. Shortly speaking, coin hard forks cannot work with older versions while soft forks still can work with older versions. Hard fork – after a hard fork, a new version is completely separated from the previous one, there’s no connection between them anymore, although the new version keeps the data of all the previous transactions but now on, each version will have its own transaction history. In order to use the new versions, every node has to upgrade their software. A hard fork requires majority support (or consensus) from coin holders with a connection to the coin network. If enough users don’t update then you will be unable to get a clean upgrade which could lead to a break in the blockchain. Soft fork – a protocol change, but with backward compatibility. The rules of the network have been changed, but nodes running the old software will still be able to validate transactions, but those updated nodes won’t be able to mine new blocks. So to be used and useful, soft forks require the majority of the network’s hash power. Otherwise, they risk becoming set out and anyway ending up as a hard fork.
As it comes from the name, stablecoins are price-stabilized that are becoming big in the crypto world. Still enjoying most of the “typical-cryptocurrency” benefits, it is standing out as a fixed and stable coin, not volatile at all. Stablecoins’ values are stabilized by pegging them to other assets such as the US Dollar or gold. Stablecoins include Tether (USDT), Standard (PAX), Gemini Dollar (GUSD) which are backed by the US Dollar and approved by the New York State Department of Financial Services.
Now that we hacked into cryptocurrency, you probably understand that it is much less mysterious than it first seemed. Nowadays, cryptocurrencies are making the revolution of the financial institution. For example, Bitcoin is currently used in 96 countries and growing, with more than 12,000 transactions per hour. More and more investors are involved, banks and governments realize that these cutting edge technologies are prone to draw their control away. Cryptocurrencies are slowly changing the world and you can choose – either stand beside and observe or become part of history in the making. And remember if you need to exchange your coins StealthEX is here for you. We provide a selection of more than 300 coins and constantly updating the cryptocurrency list so that our customers will find a suitable option. Our service does not require registration and allows you to remain anonymous. Why don’t you check it out? Just go to StealthEX and follow these easy steps: ✔ Choose the pair and the amount for your exchange. For example BTC to ETH. ✔ Press the “Start exchange” button. ✔ Provide the recipient address to which the coins will be transferred. ✔ Move your cryptocurrency for the exchange. ✔ Receive your coins. Follow us on Medium, Twitter, Facebook, and Reddit to get StealthEX.io updates and the latest news about the crypto world. For all requests message us via [[email protected]](mailto:[email protected]). The views and opinions expressed here are solely those of the author. Every investment and trading move involves risk. You should conduct your own research when making a decision. Original article was posted onhttps://stealthex.io/blog/2020/09/29/how-does-cryptocurrency-works/
Nikola in the spotlight after founder resigns Nikola (NASDAQ:NKLA) shares tumbled 30% in premarket trade after founder Trevor Milton stepped down as executive chairman and member of the company's board, adding that he would defend himself against "false allegations leveled by outside detractors." The resignation comes in the wake of claims made by short-seller Hindenburg Research, who described Nikola as a "an intricate fraud built on dozens of lies," as well as reported SEC and DOJ investigations into the company. The news could also spell trouble for General Motors (NYSE:GM), which recently took an 11% stake in Nikola and said it would produce its marquee hydrogen fuel cell electric pickup truck called the Badger. More pain for stocks Things aren't looking brighter for U.S. equities following Wall Street's third straight weekly decline, with Dow futures down 2.1% and contracts tied to the S&P 500 and Nasdaq off 1.9%. Little progress has been made on a new coronavirus stimulus package as Republicans and Democrats remain at an impasse, while the negotiations could become even more complicated following the death of Supreme Court Justice Ruth Bader Ginsburg. Investors also appear worried that a global recovery could be hampered by a rise in coronavirus infections, especially with no vaccine breakthrough yet. Oracle deal for TikTok scores Trump's 'blessing' Oracle (NYSE:ORCL) has reached a deal with China's ByteDance (BDNCE) to host video-sharing app TikTok and take a minority stake in the company along with Walmart (NYSE:WMT). "I have given the deal my blessing,” President Trump declared, adding that new unit TikTok Global would create more than 25,000 new jobs in the U.S. and pay more than $5B in new tax dollars to the Treasury. Meanwhile, Tencent's (OTCPK:TCEHY) WeChat is set to remain operating in the U.S. after a federal judge issued an injunction against Trump's executive order that would have banned the Chinese social media app. Musk rallies the troops before 'Battery Day' "We have a shot at a record quarter for vehicle deliveries, but will have to rally hard to achieve it," said Tesla's (NASDAQ:TSLA) Elon Musk in an internal email entitled 'All hands on deck!' Tesla hopes to deliver half a million vehicles in 2020, and has delivered roughly 179,000 through the first half. The letter also comes ahead of the company's annual shareholder meeting tomorrow and its first-ever highly anticipated "Battery Day" for investors. Energy transition Shell (RDS.A, RDS.B) is jumping on the bandwagon of its European rivals BP (NYSE:BP) and Eni (NYSE:E), which have both announced plans to reduce their focus on oil and gas in the coming decade. Sources tell Reuters that the oil major is looking to slash up to 40% off the cost of producing oil and gas so it can overhaul its business and focus more on renewable energy and power markets. Shell's new cost-cutting review, known internally as Project Reshape and expected to be completed this year, will affect its three main divisions and any savings will come on top of a $4B target set in the wake of the COVID-19 crisis. HBO outpaces Netflix at the Emmys HBO (NYSE:T) once again held off Netflix (NASDAQ:NFLX) in this year's Emmy race, taking home 30 trophies including 11 for dystopian drama Watchmen, which was the night's biggest winner. HBO's media family saga Succession also had a strong showing, as well as the final season of Schitt's Creek and Disney's (NYSE:DIS) The Mandalorian. The dogfight between HBO and Netflix, which scored 21 wins, is part of a much larger trend in the TV awards circuit: subscription-based platforms are creating more Emmy Award winning content. Suspicious transactions Deutsche Bank (NYSE:DB) appears to have facilitated more than half of the leaked $2T of suspicious transactions that were flagged to the U.S. government over nearly two decades, according to Deutsche Welle, though the lender said the incidents "have already been investigated and led to regulatory resolutions." Shares of HSBC (NYSE:HSBC) and Standard Chartered (OTCPK:SCBFF) fell on the suspicious fund movement, as well as JPMorgan (NYSE:JPM), BNY Mellon (NYSE:BK) and Barclays (NYSE:BCS), which were also named in the report. Financial firms are required by law to alert FinCEN (the U.S. Treasury’s Financial Crimes Enforcement Network) when they detect activities like money laundering and sanctions violations, though such filings are not necessarily evidence of criminal misconduct. DB -8% premarket. What else is happening... Garrett Motion (NYSE:GTX) files for bankruptcy with $2.1B KPS offer. Walmart (WMT) widens fashion focus with new private clothing label. Different efficacy bars in Moderna (NASDAQ:MRNA) and Pfizer (NYSE:PFE) COVID-19 trials. Movies still face Catch-22, needing both viewers and blockbusters to return. United (NASDAQ:UAL) the latest airline to press for more relief. Today's Markets In Asia, Japan +0.2%. Hong Kong -2.1%. China -0.6%. India -2.1%. In Europe, at midday, London -3.4%. Paris -3.2%. Frankfurt -3.2%. Futures at 6:20, Dow -2.1%. S&P -1.9%. Nasdaq -1.9%. Crude -2.3% to $40.37. Gold -1.3% to $1937.60. Bitcoin -2.1% to $10734. Ten-year Treasury Yield -3 bps to 0.66% Today's Economic Calendar 8:30 Chicago Fed National Activity Index 6:00 PM Fed's Williams Speech 6:00 PM Fed's Kaplan Speech
The Next Crypto Wave: The Rise of Stablecoins and its Entry to the U.S. Dollar Market
Author: Christian Hsieh, CEO of Tokenomy This paper examines some explanations for the continual global market demand for the U.S. dollar, the rise of stablecoins, and the utility and opportunities that crypto dollars can offer to both the cryptocurrency and traditional markets. The U.S. dollar, dominant in world trade since the establishment of the 1944 Bretton Woods System, is unequivocally the world’s most demanded reserve currency. Today, more than 61% of foreign bank reserves and nearly 40% of the entire world’s debt is denominated in U.S. dollars1. However, there is a massive supply and demand imbalance in the U.S. dollar market. On the supply side, central banks throughout the world have implemented more than a decade-long accommodative monetary policy since the 2008 global financial crisis. The COVID-19 pandemic further exacerbated the need for central banks to provide necessary liquidity and keep staggering economies moving. While the Federal Reserve leads the effort of “money printing” and stimulus programs, the current money supply still cannot meet the constant high demand for the U.S. dollar2. Let us review some of the reasons for this constant dollar demand from a few economic fundamentals.
Demand for U.S. Dollars
Firstly, most of the world’s trade is denominated in U.S. dollars. Chief Economist of the IMF, Gita Gopinath, has compiled data reflecting that the U.S. dollar’s share of invoicing was 4.7 times larger than America’s share of the value of imports, and 3.1 times its share of world exports3. The U.S. dollar is the dominant “invoicing currency” in most developing countries4. https://preview.redd.it/d4xalwdyz8p51.png?width=535&format=png&auto=webp&s=9f0556c6aa6b29016c9b135f3279e8337dfee2a6 https://preview.redd.it/wucg40kzz8p51.png?width=653&format=png&auto=webp&s=71257fec29b43e0fc0df1bf04363717e3b52478f This U.S. dollar preference also directly impacts the world’s debt. According to the Bank of International Settlements, there is over $67 trillion in U.S. dollar denominated debt globally, and borrowing outside of the U.S. accounted for $12.5 trillion in Q1 20205. There is an immense demand for U.S. dollars every year just to service these dollar debts. The annual U.S. dollar buying demand is easily over $1 trillion assuming the borrowing cost is at 1.5% (1 year LIBOR + 1%) per year, a conservative estimate. https://preview.redd.it/6956j6f109p51.png?width=487&format=png&auto=webp&s=ccea257a4e9524c11df25737cac961308b542b69 Secondly, since the U.S. has a much stronger economy compared to its global peers, a higher return on investments draws U.S. dollar demand from everywhere in the world, to invest in companies both in the public and private markets. The U.S. hosts the largest stock markets in the world with more than $33 trillion in public market capitalization (combined both NYSE and NASDAQ)6. For the private market, North America’s total share is well over 60% of the $6.5 trillion global assets under management across private equity, real assets, and private debt investments7. The demand for higher quality investments extends to the fixed income market as well. As countries like Japan and Switzerland currently have negative-yielding interest rates8, fixed income investors’ quest for yield in the developed economies leads them back to the U.S. debt market. As of July 2020, there are $15 trillion worth of negative-yielding debt securities globally (see chart). In comparison, the positive, low-yielding U.S. debt remains a sound fixed income strategy for conservative investors in uncertain market conditions. Source: Bloomberg Last, but not least, there are many developing economies experiencing failing monetary policies, where hyperinflation has become a real national disaster. A classic example is Venezuela, where the currency Bolivar became practically worthless as the inflation rate skyrocketed to 10,000,000% in 20199. The recent Beirut port explosion in Lebanon caused a sudden economic meltdown and compounded its already troubled financial market, where inflation has soared to over 112% year on year10. For citizens living in unstable regions such as these, the only reliable store of value is the U.S. dollar. According to the Chainalysis 2020 Geography of Cryptocurrency Report, Venezuela has become one of the most active cryptocurrency trading countries11. The demand for cryptocurrency surges as a flight to safety mentality drives Venezuelans to acquire U.S. dollars to preserve savings that they might otherwise lose. The growth for cryptocurrency activities in those regions is fueled by these desperate citizens using cryptocurrencies as rails to access the U.S. dollar, on top of acquiring actual Bitcoin or other underlying crypto assets.
The Rise of Crypto Dollars
Due to the highly volatile nature of cryptocurrencies, USD stablecoin, a crypto-powered blockchain token that pegs its value to the U.S. dollar, was introduced to provide stable dollar exposure in the crypto trading sphere. Tether is the first of its kind. Issued in 2014 on the bitcoin blockchain (Omni layer protocol), under the token symbol USDT, it attempts to provide crypto traders with a stable settlement currency while they trade in and out of various crypto assets. The reason behind the stablecoin creation was to address the inefficient and burdensome aspects of having to move fiat U.S. dollars between the legacy banking system and crypto exchanges. Because one USDT is theoretically backed by one U.S. dollar, traders can use USDT to trade and settle to fiat dollars. It was not until 2017 that the majority of traders seemed to realize Tether’s intended utility and started using it widely. As of April 2019, USDT trading volume started exceeding the trading volume of bitcoina12, and it now dominates the crypto trading sphere with over $50 billion average daily trading volume13. https://preview.redd.it/3vq7v1jg09p51.png?width=700&format=png&auto=webp&s=46f11b5f5245a8c335ccc60432873e9bad2eb1e1 An interesting aspect of USDT is that although the claimed 1:1 backing with U.S. dollar collateral is in question, and the Tether company is in reality running fractional reserves through a loose offshore corporate structure, Tether’s trading volume and adoption continues to grow rapidly14. Perhaps in comparison to fiat U.S. dollars, which is not really backed by anything, Tether still has cash equivalents in reserves and crypto traders favor its liquidity and convenience over its lack of legitimacy. For those who are concerned about Tether’s solvency, they can now purchase credit default swaps for downside protection15. On the other hand, USDC, the more compliant contender, takes a distant second spot with total coin circulation of $1.8 billion, versus USDT at $14.5 billion (at the time of publication). It is still too early to tell who is the ultimate leader in the stablecoin arena, as more and more stablecoins are launching to offer various functions and supporting mechanisms. There are three main categories of stablecoin: fiat-backed, crypto-collateralized, and non-collateralized algorithm based stablecoins. Most of these are still at an experimental phase, and readers can learn more about them here. With the continuous innovation of stablecoin development, the utility stablecoins provide in the overall crypto market will become more apparent.
In addition to trade settlement, stablecoins can be applied in many other areas. Cross-border payments and remittances is an inefficient market that desperately needs innovation. In 2020, the average cost of sending money across the world is around 7%16, and it takes days to settle. The World Bank aims to reduce remittance fees to 3% by 2030. With the implementation of blockchain technology, this cost could be further reduced close to zero. J.P. Morgan, the largest bank in the U.S., has created an Interbank Information Network (IIN) with 416 global Institutions to transform the speed of payment flows through its own JPM Coin, another type of crypto dollar17. Although people argue that JPM Coin is not considered a cryptocurrency as it cannot trade openly on a public blockchain, it is by far the largest scale experiment with all the institutional participants trading within the “permissioned” blockchain. It might be more accurate to refer to it as the use of distributed ledger technology (DLT) instead of “blockchain” in this context. Nevertheless, we should keep in mind that as J.P. Morgan currently moves $6 trillion U.S. dollars per day18, the scale of this experiment would create a considerable impact in the international payment and remittance market if it were successful. Potentially the day will come when regulated crypto exchanges become participants of IIN, and the link between public and private crypto assets can be instantly connected, unlocking greater possibilities in blockchain applications. Many central banks are also in talks about developing their own central bank digital currency (CBDC). Although this idea was not new, the discussion was brought to the forefront due to Facebook’s aggressive Libra project announcement in June 2019 and the public attention that followed. As of July 2020, at least 36 central banks have published some sort of CBDC framework. While each nation has a slightly different motivation behind its currency digitization initiative, ranging from payment safety, transaction efficiency, easy monetary implementation, or financial inclusion, these central banks are committed to deploying a new digital payment infrastructure. When it comes to the technical architectures, research from BIS indicates that most of the current proofs-of-concept tend to be based upon distributed ledger technology (permissioned blockchain)19. https://preview.redd.it/lgb1f2rw19p51.png?width=700&format=png&auto=webp&s=040bb0deed0499df6bf08a072fd7c4a442a826a0 These institutional experiments are laying an essential foundation for an improved global payment infrastructure, where instant and frictionless cross-border settlements can take place with minimal costs. Of course, the interoperability of private DLT tokens and public blockchain stablecoins has yet to be explored, but the innovation with both public and private blockchain efforts could eventually merge. This was highlighted recently by the Governor of the Bank of England who stated that “stablecoins and CBDC could sit alongside each other20”. One thing for certain is that crypto dollars (or other fiat-linked digital currencies) are going to play a significant role in our future economy.
There is never a dull moment in the crypto sector. The industry narratives constantly shift as innovation continues to evolve. Twelve years since its inception, Bitcoin has evolved from an abstract subject to a familiar concept. Its role as a secured, scarce, decentralized digital store of value has continued to gain acceptance, and it is well on its way to becoming an investable asset class as a portfolio hedge against asset price inflation and fiat currency depreciation.Stablecoins have proven to be useful as proxy dollars in the crypto world, similar to how dollars are essential in the traditional world. It is only a matter of time before stablecoins or private digital tokens dominate the cross-border payments and global remittances industry. There are no shortages of hypes and experiments that draw new participants into the crypto space, such as smart contracts, new blockchains, ICOs, tokenization of things, or the most recent trends on DeFi tokens. These projects highlight the possibilities for a much more robust digital future, but the market also needs time to test and adopt. A reliable digital payment infrastructure must be built first in order to allow these experiments to flourish. In this paper we examined the historical background and economic reasons for the U.S. dollar’s dominance in the world, and the probable conclusion is that the demand for U.S. dollars will likely continue, especially in the middle of a global pandemic, accompanied by a worldwide economic slowdown. The current monetary system is far from perfect, but there are no better alternatives for replacement at least in the near term. Incremental improvements are being made in both the public and private sectors, and stablecoins have a definite role to play in both the traditional and the new crypto world. Thank you. Reference:  How the US dollar became the world’s reserve currency, Investopedia  The dollar is in high demand, prone to dangerous appreciation, The Economist  Dollar dominance in trade and finance, Gita Gopinath  Global trades dependence on dollars, The Economist & IMF working papers  Total credit to non-bank borrowers by currency of denomination, BIS  Biggest stock exchanges in the world, Business Insider  McKinsey Global Private Market Review 2020, McKinsey & Company  Central banks current interest rates, Global Rates  Venezuela hyperinflation hits 10 million percent, CNBC  Lebanon inflation crisis, Reuters  Venezuela cryptocurrency market, Chainalysis  The most used cryptocurrency isn’t Bitcoin, Bloomberg  Trading volume of all crypto assets, coinmarketcap.com  Tether US dollar peg is no longer credible, Forbes  New crypto derivatives let you bet on (or against) Tether’s solvency, Coindesk  Remittance Price Worldwide, The World Bank  Interbank Information Network, J.P. Morgan  Jamie Dimon interview, CBS News  Rise of the central bank digital currency, BIS  Speech by Andrew Bailey, 3 September 2020, Bank of England
Finxflo: An Innovative Solution to Cryptocurrency Trading
In over a decade, bitcoin has created a market that now consists of more than 5000 cryptocurrencies. Buying or selling cryptocurrencies, using traditional finance tools, has started to gain mainstream adoption. Moreover, the interest in cryptocurrency trading and investments is growing with institutional investors keen on including digital assets as a part of their investment portfolio. Even countries across the globe have started defining legal regulations pertaining to digital assets. Finxflo has bought an innovative solution to trade cryptocurrency without having to shuffle through multiple cryptocurrency trading websites. In this article, we explore the inefficiencies of trading cryptocurrencies through multiple exchanges and the solutions that Finxflo offers to enable an optimum online trading experience.
Inefficiencies In Cryptocurrency Markets
With a rise in the activity of cryptocurrency trading, supportive infrastructure in the form of cryptocurrency exchanges and wallets has developed at a rapid rate in recent times. While services to manage and exchange cryptocurrencies have developed at a staggering rate, there is a lack of proper structure to optimize trading in crypto markets. Traders face a number of challenges that cause friction in different aspects of managing cryptocurrencies. Some of these inefficiencies are:
Disparate Prices – Cryptocurrency prices vary across different platforms depending upon the supply and demand. Traders have to either shift between multiple platforms or compromise by paying higher fees on any particular exchange.
Managing Cryptocurrencies – With more than 5000 cryptocurrencies in the market, there lacks a consolidated platform to manage and store crypto. Moreover, a trader needs to manage multiple wallets that are used to store cryptocurrencies.
Unregulated – Although cryptocurrency markets are gaining mainstream adoption, there are concerns about the regulation of entities or exchanges. Dealing with unregulated exchanges can cause a trader to lose their coins or become a victim of unethical practices.
Multiple Accounts – In order to trade across different exchanges, a trader subsequently needs to maintain multiple accounts. This further means repeated processes of going through the KYC process and setting up the account along with managing them on a separate basis.
Security – One of the primary concerns while dealing with cryptocurrency exchanges lies in the security of a trader’s cryptocurrency funds. In case if proper security and custodian measures are not in place, it can lead to disastrous consequences.
Finxflo: A Global Cryptocurrency Brokerage Platform
In order to curb such concerns and optimize a user’s experience in cryptocurrency trading, Finxflo, a Singapore-based cryptocurrency platform has developed a unique solution. Finxflo, designed by a leading and experienced team of experts in fields of finance, law, and tech, is an advanced tool for cryptocurrency markets. Finxflo is a global brokerage platform designed to aggregate cryptocurrency prices from the world’s leading exchanges. It further offers its users the optimum price to buy and sell any cryptocurrency in the market at any given point in time. It also enables users to build a diversified portfolio and trade and manage their coins under a consolidated platform. Finxflo eliminates market distortions that exist in the cryptocurrency industry today and provides all the similar tools for retail and institutional investors to trade in all cryptocurrencies.
Aggregating Prices- Finxflo offers the optimum buy/ sell price by aggregating the price of a coin from 25 exchanges. This further ensures that a Finxflo user receives the best price available on the market without navigating between multiple exchanges at the same time.
One Wallet- Finxflo facilitates managing your cryptocurrencies by only using one wallet. A user can store multiple cryptocurrencies under one platform and avoid the hassle of managing private keys to each wallet individually.
Regulated- Finxflo ensures an equivalent balance between providing a regulated trading environment along with aggregating multiple pools of liquidity. This further protects its users from any unfair accidents.
One Account- A user can transparent and effectively trade from one Finxflo account. Instead of going through multiple procedures of KYC verification, a user only needs to complete the verification once on Finxflo.
Security- To create a secure and seamless experience in cryptocurrency trading, Finxflo provides end-to-end encryption methods along with advanced security protocols to all its users.
Custodian Services- To ensure maximum protection of a user’s funds, the brokerage platform has partnered with Fireblocks to ensure that the digital currencies remain completely insured.
Finxflo’s Advanced Solutions For Cryptocurrency Trading
https://preview.redd.it/l8teei3qsjm51.jpg?width=1024&format=pjpg&auto=webp&s=966d49c71e4f0a269eb16941ad8152ccf924190c In addition to all the features discussed above, Finxflo adds many other innovative solutions catering to institutional as well as retail traders. The Finxflo’s smart order routing system innovation enables large orders to be distributed across multiple exchanges simultaneously. This helps institutional investors buy or sell cryptocurrency at the best price available. Finxflo also caters to retail traders by offering preferential fees, usually available only to institutional traders. By introducing no withdrawal fees and low trading fees, it has managed to create an inclusive solution for all types of traders. Aggregating multiple exchanges further enables Finxflo to access greater market depth and offer higher liquidity to traders. Through one unitary portal, traders can maintain a consolidated order book instead of navigating between multiple exchanges. The leading crypto platform also encompasses advanced tools like dark pools that allow traders with bigger positions to move in/out of trades without revealing their interests. Although this function is available at many exchanges, it usually comes with additional fees. At Finxflo, traders can access these innovative tools without any additional fees.
The FXF Ecosystem
FXF is the native token, the fuel, of the Finxflo ecosystem. It is a utility token that grants access to products and services of the Finxflo trading platform. The token is one of the instruments along with the option of traditional coins to pay fees for cryptocurrency transactions conducted on Finxflo. Post-2021, FXF tokens will be the only option for traders to pay their transaction fees. Additionally, the FXF token also carries incentives by offering lower fees while performing transactions on the Finxflo crypto platform. Trading fees will further be reduced depending upon the amount of tokens held in a user’s wallet.
Initial Coin Offering(ICO)
FXF tokens are available through public ICO sale commencing on the 15th of July 2020. This will last for a duration of 6 months and will end on 31st December 2020. In this ICO sale, 50% of FXF tokens will be allocated. This enables Finxflo to gain wider community input and further incorporate the feedback into building a stronger user-centric product. Article source: Blog Finxflo
New account but in Bitcoin for a while. Saw today the Bull meme here because we all know that memes is the fuel to get us to the moon and wanted to tip the user. Never done it before so checked the lntip wiki page and found this right at the bottom:
I am looking into using HODL invoices to remove the custodial account-like way the bot currently works. How would it work?
A new command, say !hodltip , is now used for tipping.
When a tip is made, the bot will acknowledge it with a reply and also DM the tipper with a HODL invoice to pay.
The tipper pays the invoice within the invoice timeout period (probably something like 2 days)
Once the invoice is paid (but not settled yet by the bot), the tip recipient will be notified to supply an invoice for the same amount.
If the tip recipient supplies an invoice within the HODL timeout, the bot will attempt to pay the invoice. If successful, it will settle the tipper's invoice and the transaction is complete.
If the tip recipient does not supply an invoice within the timeout, the tipper's invoice will expire and funds are returned to the tipper.
Less trust in the bot since balances are no longer needed.
No risk of loss due to lost access to reddit account.
Refunds now possible if the tip recipient is not interested in redeeming.
Tippers/tip recipients need to pay/create an invoice for every tip they make/receive. As a result, I would probably increase the minimum tip for this way of tipping to something like 500-1000 satoshis.
The original way of tipping as well as withdrawals would still be supported indefinitely, but I will likely disable deposits going forward once this is ready in the coming months. Disclaimer: I have nothing to do with LNTipBot just trying to get the news to the community. I think, LN is the future and will be really important in the next bull run with all the shitcoins pointing at the high fees and slow transactions we should all promote LN as much as we can. Also, if you have a tiny bit of time, at least subscribe to the lightningnetwork there's less than 5k members. Thank you all for this subreddit reading the whole thing. TL;DR: LN is cool, subscribe to lightningnetwork, HODL!
A criticism of the article "Six monetarist errors: why emission won't feed inflation"
(be gentle, it's my first RI attempt, :P; I hope I can make justice to the subject, this is my layman understanding of many macro subjects which may be flawed...I hope you can illuminate me if I have fallen short of a good RI) Introduction So, today a heterodox leaning Argentinian newspaper, Ambito Financiero, published an article criticizing monetarism called "Six monetarist errors: why emission won't feed inflation". I find it doesn't properly address monetarism, confuses it with other "economic schools" for whatever the term is worth today and it may be misleading, so I was inspired to write a refutation and share it with all of you. In some ways criticizing monetarism is more of a historical discussion given the mainstream has changed since then. Stuff like New Keynesian models are the bleeding edge, not Milton Friedman style monetarism. It's more of a symptom that Argentinian political culture is kind of stuck in the 70s on economics that this things keep being discussed. Before getting to the meat of the argument, it's good to have in mind some common definitions about money supply measures (specifically, MB, M1 and M2). These definitions apply to US but one can find analogous stuff for other countries. Argentina, for the lack of access to credit given its economic mismanagement and a government income decrease because of the recession, is monetizing deficits way more than before (like half of the budget, apparently, it's money financed) yet we have seen some disinflation (worth mentioning there are widespread price freezes since a few months ago). The author reasons that monetary phenomena cannot explain inflation properly and that other explanations are needed and condemns monetarism. Here are the six points he makes: 1.Is it a mechanical rule?
This way, we can ask by symmetry: if a certainty exists that when emission increases, inflation increases, the reverse should happen when emission becomes negative, obtaining negative inflation. Nonetheless, we know this happens: prices have an easier time increasing and a lot of rigidity decreasing. So the identity between emission and inflation is not like that, deflation almost never exists and the price movement rhythm cannot be controlled remotely only with money quantity. There is no mechanical relationship between one thing and the other.
First, the low hanging fruit: deflation is not that uncommon, for those of you that live in US and Europe it should be obvious given the difficulties central banks had to achieve their targets, but even Argentina has seen deflation during its depression 20 years ago. Second, we have to be careful with what we mean by emission. A statement of quantity theory of money (extracted from "Money Growth and Inflation: How Long is the Long-Run?") would say:
Inflation occurs when the average level of prices increases. Individual price increases in and of themselves do not equal inflation, but an overall pattern of price increases does. The price level observed in the economy is that which leads the quantity of money supplied to equal the quantity of money demanded. The quantity of money supplied is largely controlled by the [central bank]. When the supply of money increases or decreases, the price level must adjust to equate the quantity of money demanded throughout the economy with the quantity of money supplied. The quantity of money demanded depends not only on the price level but also on the level of real income, as measured by real gross domestic product (GDP), and a variety of other factors including the level of interest rates and technological advances such as the invention of automated teller machines. Money demand is widely thought to increase roughly proportionally with the price level and with real income. That is, if prices go up by 10 percent, or if real income increases by 10 percent, empirical evidence suggests people want to hold 10 percent more money. When the money supply grows faster than the money demand associated with rising real incomes and other factors, the price level must rise to equate supply and demand. That is, inflation occurs. This situation is often referred to as too many dollars chasing too few goods. Note that this theory does not predict that any money-supply growth will lead to inflation—only that part of money supply growth that exceeds the increase in money demand associated with rising real GDP (holding the other factors constant).
So it's not mere emission, but money supply growing faster than money demand which we should consider. So negative emission is not necessary condition for deflation in this theory. It's worth mentioning that the relationship with prices is observed for a broad measure of money (M2) and after a lag. From the same source of this excerpt one can observe in Fig. 3a the correlation between inflation and money growth for US becomes stronger the longer data is averaged. Price rigidities don't have to change this long term relationship per se. But what about causality and Argentina? This neat paper shows regressions in two historical periods: 1976-1989 and 1991-2001. The same relationship between M2 and inflation is observed, stronger in the first, highly inflationary period and weaker in the second, more stable, period. The regressions a 1-1 relationship in the high inflation period but deviates a bit in the low inflation period (yet the relationship is still there). Granger causality, as interpreted in the paper, shows prices caused money growth in the high inflation period (arguably because spending was monetized) while the reverse was true for the more stable period. So one can argue that there is a mechanical relationship, albeit one that is more complicated than simple QTOM theory. The relationship is complicated too for low inflation economies, it gets more relevant the higher inflation is. Another point the author makes is that liquidity trap is often ignored. I'll ignore the fact that you need specific conditions for the liquidity trap to be relevant to Argentina and address the point. Worth noting that while market monetarists (not exactly old fashioned monetarists) prefer alternative explanations for monetary policy with very low interest rates, this phenomena has a good monetary basis, as explained by Krugman in his famous japanese liquidity trap paper and his NYT blog (See this and this for some relevant articles). The simplified version is that while inflation may follow M2 growth with all the qualifiers needed, central banks may find difficulties targeting inflation when interest rates are low and agents are used to credible inflation targets. Central banks can change MB, not M2 and in normal times is good enough, but at those times M2 is out of control and "credibly irresponsible" policies are needed to return to normal (a more detailed explanation can be found in that paper I just linked, go for it if you are still curious). It's not like monetary policy is not good, it's that central banks have to do very unconventional stuff to achieve in a low interest rate environment. It's still an open problem but given symmetric inflation targeting policies are becoming more popular I'm optimistic. 2 - Has inflation one or many causes?
In Argentina we know that the main determinant of inflation is dollar price increases. On that, economic concentration of key markets, utility price adjustments, fuel prices, distributive struggles, external commodity values, expectatives, productive disequilibrium, world interest rates, the economic cycle, stationality and external sector restrictions act on it too. Let's see a simple example: during Macri's government since mid 2017 to 2019 emission was practically null, but when in 2018 the dollar value doubled, inflation doubled too (it went from 24% to 48% in 2018) and it went up again a year later. We see here that the empirical validity of monetarist theory was absent.
For the first paragraph, one could try to run econometric tests for all those variables, at least from my layman perspective. But given that it doesn't pass the smell test (has any country used that in its favor ignoring monetary policy? Also, I have shown there is at least some evidence for the money-price relationship before), I'll try to address what happened in Macri's government and if monetarism (or at least some reasonable extension of it) cannot account for it. For a complete description of macroeconomic policy on that period, Sturzenegger account is a good one (even if a bit unreliable given he was the central banker for that government and he is considered to have been a failure). The short version is that central banks uses bonds to manage monetary policy and absorb money; given the history of defaults for the country, the Argentinian Central Bank (BCRA) uses its own peso denominated bonds instead of using treasury bonds. At that time period, the BCRA still financed the treasury but the amount got reduced. Also, it emitted pesos to buy dollar reserves, then sterilized them, maybe risking credibility further. Near the end of 2017 it was evident the government had limited appetite for budget cuts, it had kind of abandoned its inflation target regime and the classic problem of fiscal dominance emerged, as it's shown in the classic "Unpleasant monetarist arithmetic" paper by Wallace and Sargent. Monetary policy gets less effective when the real value of bonds falls, and raising interest rates may be counterproductive in that environment. Rational expectations are needed to complement QTOM. So, given that Argentina promised to go nowhere with reform, it was expected that money financing would increase at some point in the future and BCRA bonds were dumped in 2018 and 2019 as their value was perceived to have decreased, and so peso demand decreased. It's not that the dollar value increased and inflation followed, but instead that peso demand fell suddenly! The IMF deal asked for MB growth to be null or almost null but that doesn't say a lot about M2 (which it's the relevant variable here). Without credible policies, the peso demand keeps falling because bonds are dumped even more (see 2019 for a hilariously brutal example of that). It's not emission per se, but rather that it doesn't adjust properly to peso demand (which is falling). That doesn't mean increasing interest rates is enough to achieve it, following Wallace and Sargent model. This is less a strict proof that a monetary phenomenon is involved and more stating that the author hasn't shown any problem with that, there are reasonable models for this situation. It doesn't look like an clear empirical failure to me yet. 3 - Of what we are talking about when we talk about emission? The author mentions many money measures (M0, M1, M2) but it doesn't address it meaningfully as I tried to do above. It feels more like a rhetorical device because there is no point here except "this stuff exists". Also, it's worth pointing that there are actual criticisms to make to Friedman on those grounds. He failed to forecast US inflation at some points when he switched to M1 instead of using M2, although he later reverted that. Monetarism kind of "failed" there (it also "failed" in the sense that modern central banks don't use money, but instead interest rates as their main tool; "failed" because despite being outdated, it was influential to modern central banking). This is often brought to this kind of discussions like if economics hasn't moved beyond that. For an account of Friedman thoughts on monetary policies and his failures, see this. 4 - Why do many countries print and inflation doesn't increase there? There is a mention about the japanese situation in the 90s (the liquidity trap) which I have addressed. The author mentions that many countries "printed" like crazy during the pandemic, and he says:
Monetarism apologists answer, when confronted with those grave empirical problems that happen in "serious countries", that the population "trusts" their monetary authorities, even increasing the money demand in those place despite the emission. Curious, though, it's an appeal to "trust" implying that the relationship between emission and inflation is not objective, but subjective and cultural: an appreciation that abandons mechanicism and the basic certainty of monetarism, because evaluations and diagnostics, many times ideologic, contextual or historical intervene..
That's just a restatement of applying rational expectations to central bank operations. I don't see a problem with that. Rational expectations is not magic, it's an assessment of future earnings by economic actors. Humans may not 100% rational but central banking somehow works on many countries. You cannot just say that people are ideologues and let it at that. What's your model? Worth noting the author shills for bitcoin a bit in this section, for more cringe. 5 - Are we talking of a physical science or a social science? Again, a vague mention of rational expectations ("populists and pro market politicians could do the same policies with different results because of how agents respond ideologically and expectatives") without handling the subject meaningfully. It criticizes universal macroeconomic rules that apply everywhere (this is often used to dismiss evidence from other countries uncritically more than as a meaningful point). 6 - How limits work?
The last question to monetarism allows to recognize it something: effectively we can think on a type of vinculation between emission and inflation in extreme conditions. That means, with no monetary rule, no government has the need of taxes but instead can emit and spend all it needs without consequence. We know it's not like that: no government can print infinitely without undesirable effects.
Ok, good disclaimer, but given what he wrote before, what's the mechanism which causes money printing to be inflationary at some point? It was rejected before but now it seems that it exists. What was even the point of the article?
Now, the problem is thinking monetarism on its extremes: without emission we have inflation sometimes, on others we have no inflation with emission, we know that if we have negative emission that doesn't guarantees us negative inflation, but that if emission is radically uncontrolled there will economic effects.
As I wrote above, that's not what monetarism (even on it's simpler form) says, nor a consequence of it. You can see some deviations in low inflation environment but it's not really Argentina's current situation.
Let's add other problems: the elastic question between money and prices is not evident. Neither is time lags in which can work or be neutral. So the question is the limit cases for monetarism which has some reason but some difficulty in explaining them: by which and it what moments rules work and in which it doesn't.
I find the time lag thing to be a red herring. You can observe empirically and not having a proper short/middle run model doesn't invalidate QTOM in the long run. While it may be that increasing interest rates or freezing MB is not effective, that's less a problem of the theory and more a problem of policy implementation. Conclusion: I find that the article doesn't truly get monetarism to begin with (see the points it makes about emission and money demand), neither how it's implemented in practice, nor seems to be aware of more modern theories that, while put money on the background, don't necessarily invalidate it (rational expectation ideas, and eventually New Keynesian stuff which addresses stuff like liquidity traps properly). There are proper criticisms to be made to Friedman old ideas but he still was a relevant man in his time and the economic community has moved on to new, better theories that have some debt to it. I feel most economic discussion about monetarism in Argentina is a strawman of mainstream economics or an attack on Austrians more than genuine points ("monetarism" is used as a shorthand for those who think inflation is a monetary phenomenon more than referring to Friedman and his disciples per se).
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