Falling Out of Love With EOS and Other Crypto Thoughts

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The promise of a fast, scalable, secure, democratically organized blockchain highly suitable for enterprise applications with fee-less transactions with “enough” censorship resistance was what attracted me to the promise of the EOS blockchain.   Given the overall state of blockchains when EOS launched I thought it would mop up and be the ETH Killer.

Carl Kruse Blog - EOS Chestahedron
The Chestahedron: Symbol of EOS. What happened?

This obviously has not happened. And for me, a disappointment.  Of the original EOS propositions most are either currently failing or need reworking. There are some notable exceptions though.

FAST – there’s no doubt EOSIO is fast. Of the large blockchain projects deployed it is the fastest.  That’s great.

CENSORSHIP RESISTANCE — While yet to face a test from a strong adversary, e.g., the U.S. government, there are indications EOSIO could be good enough for most projects for censorship resistance, even with a large amount of the chain’s block producers based in Asia.   It might even be highly censorship resistant.

IMMUTABILITY – A bigger problem for EOS is immutability, with smart contracts capable of changing on the fly and dapp tokens distributed to users that can be skyhooked back without the consent of the token holders (see what happened to the EDNA dapp on EOS).   It is now becoming clear that one of the great use cases for blockchain will be Decentralized Finance, and the lack of immutability will hurt EOSIO.

STABILITY — EOSIO is right now not stable or predictable enough for large scale applications and we must admit that the promise of stability has yet to bear fruit.

SCALABILITY – In the early days the talk was of many thousands of transactions per second and ultimately millions and here too — in the real world — EOS is currently failing.  I would even say EOS is not scalable in practice.  Applications with a few hundred to a few thousand users might be ok, but no application with millions of users will be ok.

FEE-LESS TRANSACTIONS –  At first all looked sweet until it dawned on everyone that EOS was not cheap even if transactions were fee-less. To do anything meaningful on EOS involves hundreds of staked EOS, whether staked for by a user or paid for by a dapp.  That makes real world deployment to EOS crazy expensive and will limit the deployment of high throughput dapps such as games. Note the rise of WAX and UOS to handle games on EOSIO not EOS.  Unless some form of LiquidDapps comes to the rescue or innovative sister-chaining or whatnot — the real promise of fee-less transactions is in trouble on EOS. When I hear people moving operations off-chain to save resources, like the DICE app is currently doing, than I wonder why blockchain? Anyway that was not the original idea for EOS.

EASE OF USE – Not. Obtaining EOS tokens, learning to use a wallet to stake resources on the network such as CPU and NET and dealing with RAM, understanding all of it, is more complicated than need be and a barrier to mass adoption. After almost two years — which is eons for a blockchain — these issues have yet to be addressed.

GOVERNANCE – Do we need to discuss the state of EOS governance?  Do we agree it is a failure from the original dream?  Whether it even works well enough is debatable and there seems to be no clear solution in sight, as EOS tokens parked in crypto exchanges are voted en masse by the exchanges themselves to position themselves and their allies as Block Producers. Many (most?) of these BPs invest little in the network. And while blocks continue to be produced and the BPs do not seem to have acted in any detrimental way towards the EOS blockchain itself, this is far from the ideal once envisioned of a Democratic blockchain. By the way, where is Block One?  As of this writing they were to vote their 100 million tokens soon but that has not happened and it is not clear the full amount of their votes will ever be deployed.

DEVELOPMENT -  Who is deploying to EOS these days?  Several projects have exited to other chains and other projects shelved.  Of course Voice is coming, that social media dapp developed by Blockone, which as the creator of EOS has a vested interest in seeing EOS flourish.  But what other large outside projects are deploying to EOS?  Even with Voice it is unclear what role the EOS mainnet will play.   Where’s Blankos?  What is EOSVC doing?  What of Everipidia?  What big groups or companies are building on EOS?

Particularly heartbreaking was the decision of the government of the Marshall Islands to deploy their project of creating the first sovereign blockchain currency in the world to Algorand, when it looked almost certain they would deploy — and indeed had been working a long time — with EOSIO. How did this happen and where was B1?

COMMUNITY:  Mike Novogratz capitulated. Multicoin Capital capitulated. Even Rob Finch, the EOS permabull, capitulated.  The excitement of the original EOS launch is gone.  The community is fractured.  Maybe depressed? The Telegram chatrooms mostly moribund. What is a project without its community?  Where is B1 in all of this?  What of the future?

MARKETING – B1 has done a terrible job marketing the EOSIO platform. They have been slow, flat-footed, and long ago decided to let their lawyers drive the bus, for whatever reasons, good or ill.  Controversial pronouncements by senior B1 executives, such as Dan Larimer, on everything from shower coins to anti-Vaxx theories to a pivot which argued EOS being faster and more secure than SQL databases (!) to the manner in which B1 has thrown shade at EOSIO side chains such as Telos, cast doubt as to B1 capably marketing themselves to the world at large.   “LikeTerryFox” was unfortunately on to something when he directly responded to a Brendan Blummer tweet on marketing saying, “Are you kidding? To write “EOS” on the asphalt is better marketing than in the first two years.”

Carl Kruse Blog - EOS tweet

The only time I remember — someone will correct me here please — of anyone at B1 even commenting on any EOS dapp was Dan’s December 18, 2018 Medium article in which he threw the DICE dapp team under the bus, admonishing them to write better code and to work smarter not harder in response to CPU issues.

I guess there may have also been some indirect comments by B1 regarding the EIDOS network attack in answer to the wave of complaints that arose back then by saying EOS was working as it was supposed to work.

But that’s it.  No B1 public support or cheering for EOSIO dapps.  Nor B1 cheering for EOSIO chains. Does anyone find this strange? I secretly suspect B1 doesn’t really know who or what is actually deploying to EOSIO, but I might be wrong.

Look at EOS VC — that supposedly powerful investment arm whose goal was to fuel development on EOS — their actions, or better said inactions, leave much to be desired, and B1’s balance sheet betrays much of where B1’s focus lies:  B1 has far more holdings in Bitcoin than in EOS itself, and far more holdings in government securities than in Bitcoin.  By all appearances, B1 has become primarily an investment holding company first, and an EOSIO development company second, and when seen that way its cautious actions make more sense.  Unless of course you hold hope that there is a super duper secret three-dimensional chess game B1 is playing that will eventually be revealed to the wonder of all. 

EOS has worked problems out in the past and might still work out its current issues.

But the situation sure looks different than what I thought it would be.   I say this honestly and as an EOS fan.

The crypto/blockchain space as I write in May 2020 is far different than even 6 months ago, let alone 1-2 years ago when a white-paper and some tweets fueled dreams. And it is developing at a vertiginous rate.

The narrative of Bitcoin as a safe-haven, uncorrelated asset is alive and well, and if there is any validity to stock-to-flow models, or even simple economics of supply-demand where we assume steady or rising demand with a diminishing supply, bitcoin is poised to do well.  This is not to mention the macro and geopolitical issues of massive quantitative easing, money printing and assorted stimulus packages that stand to devalue most world currencies over time.

The tools with how people interact with crypto – from lending to derivatives to synthetics to games — have never been greater and are increasing at a rapid pace.  Real world tokenization of everything from stocks to bonds to expensive cars and even to a basketball player are taking place and this type of activity will only increase.

Institutions are no longer just around the corner but are actively participating in crypto.

There is a lot more than just hype or a limited audience.  And the space is almost certainly going to get more active.

Ethereum

If you had asked many observers even 6-8 months ago of their opinion of Ethereum they would have said it is dead or had no future. I thought so too. Today it is stronger than ever, becoming a center of DeFi.   Far from destroying ETH, the “ETH killers” are struggling or yet to deploy, while massive deployment is taking place on ETH.

ETH has about 1000 active developers – four times as many as BTC, and ten times as many as EOS (assumption: EOSIO is mostly worked on by B1 and they have about 100 developers working on EOSIO). 

Santander has floated millions of dollars of bonds on ETH, the first regulated stock IPO (Overfuture) is taking place in Switzerland on ETH,  fancy cars are being tokenized in a compliant way backed by the government of the Seychelles on ETH, Ernst & Young is deploying Nightfall on ETH, and dozens of other major companies and banks are building on ETH, and a tsunami of blockchain startups are all trying to build bridges between their projects and ETH.   That includes B1, which has offered a $200,000 bounty to anyone who builds a bridge between EOSIO and ETH.

I don’t like ETH, but there is no arguing with reality and the incredible strides it is making.

Add to this a clear roadmap that includes eWASM, sharding, staking, a move to Proof of Stake and ETH 2.0 and the ETH killers don’t have much time to lose – maybe 1-2 years.   After that, I think it might be lights out for many of them. I find this interesting given that so many people — including myself — thought ETH had no future.

This is not FUD but a realistic assessment of the current panorama in smart contract development.  B1 let its lawyers drive its bus and here we are.  The network and Lindy effects favor ETH and will soon be insurmountable for all ETH Killers, and I am surprised to be writing this.   How can this be? Shame on B1, Cardano, Tezos, et al.   Especially shame on B1, which hoarded its war chest, expertise, and good vibes in community building and shame on EOS VC that did little to encourage and fund projects on EOSIO given its large warchest.  

Maximalist Of Nothing

I like fundamentals, such as they are in the crypto world. What jibes with humanity?  How does blockchain fit?  How does crypto make the world better?  I am a maximalist of nothing and suspect many projects will find niches in the big bad world.  These assumptions might be wrong. Maybe one or two chains rule them all, proving some maximalists right.  It’s early.

I like BTC and its narrative of providing a force field around wealth – immutable, not confiscatable, non-sovereign, permisionless, transportable, fungible, divisible, programmable…with ultimate scarcity. These concepts should prove powerful in decades to come.  Large network effect and brand recognition to boot.

I also think smart contracts will play key roles in a future society and I am on the hunt for good ones.  BTC Maximalists will tell you Layer 2 smart contract solutions on BTC will eliminate everything else. I don’t think so. 

Regarding smart contracts, I grudgingly look at ETH because the world appears to be building on it, especially DeFi applications. 

I like the technology behind EOS and B1 probably won’t let it fail easily.  But this is an assumption.  B1 is sitting pretty with 140,000 BTC, U.S. Treasuries, and who knows what else.  If EOSIO didn’t go anywhere B1 is still fine and dandy, having made its money. That sounds bad but it’s true.  Regardless of the updates and work done on EOSIO, and independent of what everyone thinks of Brendan and Dan and the team.  I don’t like the way B1 deals with EOS and the overall EOSIO community, but hey, that’s me, and I still bow to Dan, B1, and its resources.  I hope EOS will right itself after having righted itself before. It is continually battle tested like few other smart contract platforms and improves where it matters – in the real world.  And ultimately EOS is more than B1.  Let’s see what happens.

Other smart contract platforms?  Cardano, Lisk, Tron, NEM, Tezos, Algorand, Kadana, Cosmos, et al.  But which ones are up and running?  What are they doing?  Who is building?  Of these I like Tezos but not enough to hold a bag.  Also Cosmos. But no bag there. Some well-intentioned friends continue to hound me to look at “peer reviewed” Cardano.  One visit to the Cardano telegram chat is enough to run back quickly to EOS.  Hoskinson kinda makes you run also, genius that he is.

Other blockchains? So many great use cases but the only other area I focus on due to limited mental bandwith is games.  I particularly like the WAX and ENJ projects.  I won’t bore you with why but simply to say the obvious, that besides DeFi, gaming is a beautiful use case for blockchain. 

I might be all wrong as the future continues to be written.

For a general discussion on the potential of the totality of blockchains and how they fit in with global wealth I like Kyle Samani’s article “$100 Trillion”.  https://multicoin.capital/2018/10/09/100-trillion/

Anyway, beyond Bitcoin, my first foray into blockchains was EOS. And this post began as something of a lover’s lament for that blockchain. Maybe EOS will come back with renewed attention from its creator, B1. But the hour is late. And wildly useful and exciting developments are taking place elsewhere.

Will smart contracts play an important role in a future society? I believe so. What platform or platforms will rule this arena? This remains to be seen.


Carl Kruse

Contact: carl AT carlkruse DOT com

https://carlkruse.at

Former blog post: https://carlkruse.at/talking-internet-culture-with-pomp-and-lorenz-notes/

Check out my Bitcoin thoughts in my other blog: https://www.carlkruse.com/buy-bitcoin/

Author: Carl Kruse

Human. Being.

70 thoughts on “Falling Out of Love With EOS and Other Crypto Thoughts

    1. Alas, yes. Wild promise and beautiful expectations. Who knows, maybe it will still live up to its potential.

      Carl Kruse

  1. BlockOne forgot the most important aspect for building a blockchain project is the community not TPS or necessarily the technology itself.

    1. Tom, I suspect this is 100% correct. What moves almost anything forward is a community. Together everyone is stronger.
      B1, perhaps worried about regulators or what not, took a back seat — far, far away — and watched as the EOS community disintegrated.

      My guess is they now regret this. Might it be too late?

      Carl Kruse

  2. B1 puts one’s mind to one of those dragons in Lord of the Rings, powerful, but growing fat and cautious, ancient before its time, content to sit on its hoard of $4 billion snatched from the community in the largest ICO in history and now ensconced in its Cayman Islands lair. The beast no longer takes risks, content to sit atop its treasure — counting bitcoins and T-bills as dragons are wont to do, safe in the knowledge no Bilbo Baggins will disturb its peace. Warriors at the SEC? Dispatched and all good.

    So as OG’s capitulate amid a series of misguided shower coin musings, anti-vaxx pronouncements, unfulfilled expectations and perhaps one too many visits to dragon gay bars — all normally calamitous events to other projects, we find the B1 dragon relatively unmoved.

    Can the community save the day? I dunno. I tour the realms of Elrond, Algorand, Cardano, Tezos and Cosmos and wonder at the vibrant communities and cool projects being built (not to mention the Ur-Dragon Ethereum that EOS was supposed to vanquish long ago).

    I once had 100,000 EOS, when EOS was worth something. All gone now. And for a while I have been looking for a reason to return to the fold. Any reason.

    Soon I’ll stop looking for reasons and leave everyone to the B1 dragon. Too many good things happening yonder.

    Gobi D.

  3. B1 built a beautiful sailboat called EOS, sleeker, faster, shinier than other boats.

    B1 put this amazing boat in the water and told the world, do what you want with it. Even if the boat head to the rocks or no one climbed aboard, B1 was fine with that. “Hey! We built the boat and it’s up to the community.”

    Meanwhile, uglier and slower boats hustled devs aboard, pumped nitrous in the engines and put up extra sails. At the same time, other shiny newer boats with super high TPS and superb crews, such as the S.S. Elrond and the S.S. Algorand readied to leave port.

    Surveying the seascape, B1 Naval HQ thought it better do something lest its shiny boat stay adrift amid an armada of shiny and not so shiny competitors.

    Can B1 turn the tide?

      1. Five months after this reply it increasingly looks like the answer is no. B1 is not doing anything. And EOS appears to have become another one of those zombie blockchains. Calamitous given its beginnings and expectations.

        Carl Kruse

  4. Polkadot is kinda sorta where EOS was two years ago. Just replace “ETH KIller” with “Interoperability” and you’ve got Polkadot. Now that everyone these days is desperate to figure out how to solve ETH flaws — high fees, slow transactions, etc. — which EVERYONE knew all along were serious ETH problems — and DOT comes to the fore. Cosmos is kinda there in the background and Elrond and Algorand and Tezos poking their heads behind the corner. Even TRON taking a peek. EOS could have snagged it all a while back, but was too busy taking long showers and spending ICO money in gay bars and letting random lawyers drive the bus. Meanwhile, the awful, nasty, crusty Ethereum minting millionaires by the day. It’s not fair.

  5. B1 never realized and probably still doesn’t, that the community matters far more than technology in crypto. Who is using the platform? Who is spreading the word? What support do they have?

    B1 has had a serious hands off approach and every month I suspect there are fewer users of EOS not more. EOS should be shining now, like Polkadot is, as a viable alternative to ETH. B1 is nowhere to be found.

  6. That people prefer to pay a fee per transaction to interact with a blockchain, say as is the case with ETH or BTC, speaks greatly (and surprisingly) to the current failure of the EOS notion of fee-less transactions. In any case EOS is not free because you still have to figure out how to stake resources or have someone stake them for, which continues to confuse newbies and hamper adoption. People clearly don’t mind paying as they go and not having to worry about CPU, RAM, NET, and perhaps worst of all an account set up process that remains complicated and for which they must somehow pay for. Assuming you have the time to learn and the resources to stake on the network, then EOS is mostly fast, good and kinda reliable, though still not as scalable or robust as we once believed. I still remember the days of having 500 EOS staked for CPU and being kinda limited what I could do on the blockchain. And most dapps that made intensive use of the blockchain, say like Dice, had to move the bulk of transactions off chain, kinda like what the layer 2 solutions for ETH or BTC are doing.

    The number one complaint I have heard from other crypto people regarding EOS is that it is a total pain in the butt just to start. The number 2 complaint is that once they invested the time to learn there was nothing on EOS they wanted to use.

    This is heartbreaking we are still in such a situation given the quality of the EOSIO technology and the potential resources available to B1.

    1. Hard to argue with anything you have said Gobi D.

      What dapps are you using and where are you using them?

      Carl Kruse

      1. I am mostly on ETH as that is where the action is.

        I use ETH dex’s Uniswap, 1inch, Kyber, Balancer and Matcha all the time, and I’m checking out Swissborg. I hold PAXG on ETH in lieu of real gold. I often make bets on Augr, like with the recent US elections, which was easy money shortly after the networks called it but Augr was still giving a 10% possibility to Trump. I use DEXTF to set up my own fund with ETH tokens and do arbitrage. I play the no-loss lottery on PoolTogether, which runs on ETH, for fun. I always dive in and out of lending various tokens on the BZRX platform, which at times has crazy returns though lately that has calmed down. I use the Monolith credit card, which taps directly into your ETH wallet. I’ve made some money swapping NFTs on Rarible (which runs on ETH) but it’s become something of a grind lately. But I did make 6 ETH just swapping 3 different Ivan On Tech cards as an example. I’ve made some nice money participating in Trustswap initial offerings as well. All on ETH.

        I’m sure I’m missing something but this was off the top of my head.

  7. I would love to see EOS make it, but I don’t see how it could. As recently said on Twitter, If you were 90% in Bitcoin and 10% EOS in your portfolio, you would precisely reflect B1, excepting B1 got its EOS for free — you paid for yours sucka — and you care about the project. Savage but true. I sold all my EOS a while back and don’t know why it’s even talked about much anymore.

    1. Melchior! One of the Three Magi! 🙂 Welcome welcome. A savage comment. I have a strange feeling B1 and EOS will go down in infamy, even though the stakeholders of B1 — though not of EOS — will have made out like bandits. I always liked the EOSIO technology and always thought it would leave its mark on the world. I’m not sure anymore.

  8. I wonder if Block.One had acted more honorably towards its original investors and more honorably especially to its community, whether it would have garnered so much bad energy. B1 struck gold in raising money for its ETH killing EOSIO software with the biggest ICO in history, then kept almost all of the money for itself, lawyered up to fend off regulators, investors and the community, and has been flat-footed in almost every initiative it has tried to launch, particularly with the vaunted VOICE.

    Today, if you had a portfolio of 70% BTC, 10% T-bills and 10% EOS, you would replicate B1, excepting you didn’t get your EOS for free and you care about the project.

    It’s too bad because the EOSIO technology is good. But as we see with each passing month watching projects like Ethereum, Polkadot, Elrond, Algorand, Tezos, and even Tron (!), it takes more than technology to create success, let alone change the world, and B1 has been admirably incapable of moving much forward, in spite of having the largest resources of any blockchain or cryptocurrency project.

    What is cause and what is effect here? Is B1 in a pickle because EOS did not succeed like many expected? Or is EOS in a pickle because B1 has not done all it could? I suspect it is the latter.

    Apologies for my negative tone. I have been involved with EOSIO projects for a long time and I am frustrated.

    1. Gobi Desert Canoe Pro, no need to apologize and thank you for your ongoing commentary here. Together we are stronger and I super appreciate your insights.

      I hear you and feel you regarding B1’s role with EOS. They coulda, shoulda, done more. Now I’m not sure they can save the pooch but let’s see.

      I gather you have shifted your smart contracts focus to Ethereum? Or to what other blockchain / cryptocurrency project?

      Carl Kruse

      P.S. I’ve been getting a kick lately reading commentary from ETH Bulls on Twitter that during this next bull cycle ETH could overtake BTC in price.

      P.P.S Find me on Twitter here: Carl Kruse Twitter

  9. Regarding Ethereum’s price much will depend on the outlook for ETH 2.0 and ongoing adoption. ETH has 5X the supply of Bitcoin, but it has a lot more being built on it than BTC ever will. I mean, a $30,000 ETH is possible but is a $100k ETH possible? I dunno. A $100k BTC (or more) is definitively realistic. Now, if ETH becomes an acceptable substitute for currency around the world, then all bets are off and ETH could moon hard. My guess however is that BTC is going to play that role.

    1. To me ETH and Bitcoin are two different things entirely. BItcoin is this pristine solid store of value. Ethereum is a platform to build applications on. I think ETH market cap eventually is larger than Bitcoin’s.

      By the way, anyone staking on ETH 2.0 or in some of the DeFi protocols? Risk adjusted returns seem safer with straight Ethereum staking?

      1. It’s too early to know what is safer or provides better returns. The more people who stake for Ethereum 2.0 — and more people will eventually stake — the lower the individual returns for Ethereum staking. Also ETH staking is a one-way ticket with any ETH staked locked up until the full deployment of ETH 2.0 which could take another two years. Who knows.

        Decentralized Finance is in its infancy. What the returns will be on DeFI protocols such as Uniswap, YFI, Compound, Kyber, and AAVE for example is anyone’s guess, but the way things are looking, DeFi is only growing, so it stands to reason DeFi protocols will rise. Let’s see.

        Carl Kruse

  10. What about Brendan Blummer of B1’s recent comments regarding “PROFI” as a link beween unregulated DeFi and the traditional CeFI financial systems? Would this give EOS any hope for relevance?

    1. B1’s pronouncements seem like it wouldn’t know DeFi if it bit Brendan Blumer on the bum.

      Bridges between DeFi and traditional systems have been taking place for the last two years on Ethereum and other blockchains and today many fully compliant and regulated financial applications are active with many more in the pipeline. You have the Paxos tokenized gold with PAXG, compliant and regulated by the New York State Department of Financial Services, as is its stablecoin PAX. Stablecoin USDC is registered with FinCen, There are already a series of bonds issued on Ethereum regulated by Switzerland and Lichtenstein respectively with many more issuances to come. And about two dozen governments themselves from Canada (administration of government contracts) to Mexico (public procurement procedures) to Georgia (land registry) to Holland (financial support for children living in poverty) and many others. Other blockchains — but not EOS — have seen National currencies deploy (Marshall Islands using Algorand and the Bahamas using Cortes DLT for example).
      And let’s not forget the hive of activity that is Polkadot.

      Block.One has become great at talking the talk but it never walks the walk and the rubber never meets the road. Its latest pronouncements regarding ProFi sound like similar pronouncements from the likes of Worbli and other projects, where nothing ever happened.

      B1 has become a holding company for crypto investments from money it raised from all of us, and now just talks innovation and possible deeds and pontificates on the “right” and “proper” way of building things and what the future holds, all the while the actual innovation, real building and the future itself is taking place far, far away from B1, and that has been the case for a while. Anyone who has dabbled in DeFi, let alone someone active in the space, knows this to be true, and it is sad that B1, with all its resources and talent cannot make something happen in a space ablaze with activity and promise. Sad and frustrating.

      Gobi

  11. The SEC went after EOS and is now going after Ripple. Does anyone think other blockchain projects will be targeted for regulatory action?

    1. Projects that did not raise money directly by selling tokens are probably in the clear. For example, Uniswap and 1inch Exchange gave their tokens away for free. These projects are most likely 100% in the clear. Likely great moves by the teams, as they hold a lot of tokens but they give part of them away for free knowing people will then trade them on secondary exchanges, which all of a sudden gives value to all of the tokens, including those held by the team. But because they were not sold by the teams in the first place they are not likely securities under the law. NOTA BENE: this is not legal advice and might actually be wrong.

      Because this is seemingly a legally safe way to avoid SEC regulation while at the same time monetizing your project, I expect many other projects to do the same – meaning to do free airdrops. Again, not legal or financial advice.

      Going back to the original question, those projects are most at risk who raised money by selling tokens and who are not sufficiently decentralized.

      Carl kruse

  12. Anyone else going into cash to await the BTC dip and then swoop in? Anyone holding XRP given everything? And is anyone still holding EOS?

    1. Since a Bitcoin price of about $14k many observers have been calling for a correction and advocating that everyone stay in cash, wait for the dump and then dive in and buy BTC. Meanwhile BTC has upped and moved and passed the $34k mark, all the while many called for a retracement. Anyone in cash would have missed out on a 100% gain in their money.

      Now, BTC might correct hear, and it sure looks super hot right now and due for a retracement, which appears to be happening as of this writing, but it’s also clear instititions continue to buy dips and BTC keeps inching higher. I wonder if the market dynamics for Bitcoin today are different from the market dynamics of yesteryear, and my guess is they are.

      Regarding XRP. Some look at the chart and think this will eventually go back up. Meanwhile, XRP is getting delisted everywhere, decreasing liquidity and exposure to the token. The SEC litigation is bound to take many years if XRP fights it earnestly like it says it will, and during this time XRP’s name will be dragged through the mud with whatever SEC allegations of wrongdoing come out in the press and XRP’s treasury will be drained by lawyers. I think the correct call is to get out of XRP immediately at any price, and if you believe in the project, jump back in when there is more clarity.

      Of course there are my own opinions, but you asked, and here they are. Ad always please do what you think is right for you and Big Boy Pants on always.

      Regarding EOS, I see no reason to hold the token though at one time I was a huge fan. I don’t see how value accrues to it. Furthermore, any technology needs a community excited to use it, build on it and deploy it and at best Block.One has been community neutral or agnostic, and at worse, anti-community, “Hey regulators, no, no, no…not us…that’s other folks, we just build software and what people do with it is not our concern.” This somewhat antagonistic, self-centered, and frankly immature attitude is the opposite of what a blockchain needs to flourish.

      Carl Kruse

        1. Many thanks Kares! Happy you found it helpful. But remember this is just my opinion on XRP, EOS and BTC and I hope you have done other research before taking action. Big Boy Pants on always. All the best and good luck!

          Carl Kruse

  13. I don’t know anything about EOS but I hodl Bitcoin and Ethereum and nothing else and year after year I am super happy. Don’t know about you.

  14. Carl to what levels do you see btc dropping again in 2021 to buy the dip?

    What other cryptos would you rate as interesting? As I am looking into Polkadot.

    1. Jorge, I don’t know how far down the correction might go, especially given current markets in which institutional players are now buying Bitcoin. In the past, corrections of 30-40% have happened without anyone blinking an eye. That is possible now but it is also entirely possible the dip we are seeing now is all the dip we will ever see. And that would be a first for Bitcoin that it doesn’t dip harder to then rise even harder, but current macro economic conditions (money printing, quantitative easing, etc) are also unprecedented and again, institutional money was never a big factor in Bitcoin until now. So who knows.

      Because I think it is impossible to time the bottom I think it a good idea to dollar cost average (DCA) in. Every day or every week just buy some amount and do so over time. No matter what the price, you buy your bitcoin at your predetermined time. Of course, you could just buy it all at once and be done with it, if your time horizon is at least six-12 months (mine is longer), then I think you are going to be OK.

      For other projects other than Bitcoin I think it good to own some Ethereum (ETH), which is the world’s largest smart-contracts platform and should perform extremely well this year and the next few years.

      Bitcoin and Ethereum I think should form the basis of any crypto portfolio. After that here are some projects I would consider. Note, the more projects you own the more distracted you get and the more time they consume in following, so nothing wrong owning BTC, ETH and one or two other things.

      SMART CONTRACT PLATFORMS
      Ethereum is the king here but I like Polkadot (DOT) as you had mentioned earlier. It is newer, faster has a lot of hype and a lot of developers working on it. There is a good chance DOT grabs some of the projects now building on ETH. I would say the same good comments, but I’m less enthusiastic about Cardano (ADA). Elrond (EGLD) is a dark horse in this space and could also do well though it has already rocketed fairly high. I would avoid older smart contract platforms that promised to demolish Ethereum such as EOS, Tezos, Tron and such.

      ORACLES
      These blockchain projects link real world data, such as price feeds, to smart contract platforms, making smart-contracts, well, smart. The king in this space is CHAINLINK (LINK) and I think it will do well these coming years and I would consider looking at it. There are other up and coming oracles such as Band Protocol that could also do well but they are less established than LINK.

      DECENTRALIZED FINANCE (DEFI)
      This was the buzz for 2020 and is likely to continue growing in 2021. These are platforms – almost all of them built on Ethereum – for engaging in lending, borrowing, trading, swaping, yield farming, derivatives and synthetics. There are several large players here including AAVE (LEND) and Synthetix (SNX) both of which I like, and the trading platform UNISWAP (Uni).

      GAMING
      Tokenizing virtual assets within games, such as swords, magic potions, shields and thousands of other in-game assets is a huge business and blockchain technologies are perfectly suited for this. In this space I like ENJIN (ENJ).

      SUPPLY CHAIN MANAGEMENT
      I’m running out of a steam. 🙂 VECHAIN (VET) is one of the largest projects using blockchain to keep track of supply chains, which is a huge business and I like it. I like ORIGINTRAIL (TRAC) even better but the team doesn’t do a lot of marketing and so I don’t know how much the token will move in price. But I like them.

      NON-FUNGIBLE TOKENS (NFTS)
      These are projects that use blockchain to create unique, unforgeable assets, used for example in tokening everything from artworks to identity to bonds to virtual game assets. One project I think is interesting is PERSISTENCE (XPRT) and of course also ENJIN (ENJ), which I mentioned earlier.

      SUMMARY
      Simply holding Bitcoin (BTC) and Ethereum (ETH) is a great, low maintenance portfolio.
      Adding Polkadot (DOT) would give you exposure to another smart contract platform that looks like it will do well. Adding LINK would give you exposure to oracle technology, and indirectly to DeFi, as all smart contracts need bridges to real world information. LINK should do well. Adding either LEND or SNX would give you direct exposure to the growing DeFi ecosystem. And if you like the supply chain space I would consider adding VET or TRAC and for some exposure to the gaming space I like ENJ. No need to add any of these extra projects, and there are dozens more that are good, but I include them just for flavor and in case any of them find a spark in you.

      Good luck whatever direction you take!

      Carl Kruse

  15. Seems like a lot of knowledge in this cozy group so I hope you dont mind me reaching out with a question. It’s not EOS related but an overall crypto issue.

    Ive been thinking of moving some Bitcoin into Ethereum. I am now about 60-30-10 BTC-ETH-ALTS and thinking of bringing it to 50-40-10.

    I think BTC is the surer bet with its scarcity, strong holders and now institutional money coming in, and more of that to continue in 2021, maybe ALOT more of that to continue. So BTC looking great. However, percentage wise I think ETH could move more dramatically than BTc, maybe a lot more. But more risks to ETH in that it has competitors gunning for it, fees are crazy, and ETH 2.0 could experience delays. But so much being built and deployed to ETH and so much already on it.

    Do you guys have thoughts on moving BTC to ETH – good, bad, neutral? Super grateful for any insights.

    1. Your question is beyond the scope of a quick answer but here goes. ETH is younger than BTC and is in the process of changing from a Proof of Work blockchain to a Proof of Stake one. In short, there is more risk with ETH compared to Bitcoin. However, there is also the possibility that ETH, on which so much is being built, eventually surpassing Bitcoin, meaning higher gains. If you’re feeling frisky, maybe move a higher allocation to ETH than you have? If more conservative your current allocation seems fine to me.

      Carl Kruse

  16. B1 is increasingly looking like bandits who snatched $4 billion from the community to throw into BTC, other crypto, and T-bills, all the while pontificating on random pseudo-blockchain aphorisms and wisdoms, and letting EOS, EOSIO that is, go down the toilet. Shameful.

    I suspected this was the case from the infamous June 1 gathering (and its aftermath)… and don’t know how BRendan Blumer, et al live with themselves.

  17. To heck with Dan Larimer and B1.

    So many good people trusted them both, and Dan ended up doing what all the naysayers said he would do — abandon the project like he had done with all the other projects he had abandoned — and that B1 would simply do everything it could to protect itself and the loot it had secured from the crowd sale from regulators and investors. Scoundrels all.

  18. I am still confused. What is the value proposition of Bitcoin? I understand stocks. And real estate. Amd gold. And even esoterica like art or expensive warches. But what of Bitcoin.

    1. The value proposition of Bitcoin:

      1. Property.
      2. Liquid fungible property.
      3. Liquid fungible property that is programmable.
      4. Liquid fungible property that is programmable, non-sovereign and non-confiscatable.
      5. Liquid fungible property that is programmable, non-sovereign, non-confiscatable, portable and highly divisible.
      6. Liquid fungible property that is programmable, non-sovereign, non-confiscatable, portable, highly divisible, with ultimate scarcity.

  19. I’m a newcomer to crypto and getting caught up in all the recent excitement.

    I second the question of the poster above on understanding the value of Bitcoin. I understand how stocks get value. But where does value come for Bitcoin?

      1. As for getting started in crypto investing you are going to need a crypto exchange account so that you can buy, sell and hold bitcoin and other cryptocurrencies. Coinbase is an easy to use exchange and perhaps a good place to start, though there are others such as Kraken. (your options are more limited if living in the USA).

        Though first off, you’re probably going to want to get an overview of what bitcoin is, why is it useful and why it could change the future of the financial world.

        Ben Yu’s article on Cryptocurrency 101 is an easy to read introduction.
        https://medium.com/@intenex/cryptocurrency-101-7197684775fd

        The article is a few years old — which is an eternity in the crypto world, and some parts of it, mostly those on prices, are dated, but it is still a great overview and i recommend it. There are dozens of other good articles you can find by googling.

        When it comes to investing I suggest getting started simply holding the two largest cryptocurrencies, which are bitcoin and ethereum. These are the less risky of all cryptos yet retain the potential to still move upwards dramatically. So the downside is relatively low, while maintaining a nice upside. CAUTION: That said, crypto is highly volatile and I would not invest your mortgage money type of thing 🙂 and be prepared for something of a wild ride not common in many other investments.

        There are many other cryptos that will probably outperform bitcoin and ethereum, but they are also much riskier and I would not dabble in them until you have a touch more experience in what is still a bit of a Wild West.

        If I can help you with more specifics just reach out and good luck and welcome to the world of crypto. 🙂

        Carl Kruse

  20. Sorry for the noob question. But I see the value of stablecoins being super high. Why do people use stablecoins so much?

    1. Stablecoins are cryptocurrencies that are pegged 1:1 to some standard, the most popular being the U.S. Dollar. Stablecoins are some of the most widely used cryptos. They exist as a way to reduce price volatility risk when holding money within the space or when trading. If you were to hold say Bitcoin for trading, and you are successful at trading Bitcoin say with another crypto currency, you could see profits vanish if Bitcoin’s price were to move dramatically down, which happens all the time. By trading in stablecoins you eliminate this risk as stablecoins are “stable,” as they are pegged to a fiat currency. Note, this does not mean stablecoins are necessarily a store of wealth as being pegged with fiat they would suffer from any inflationary or devaluation pressures of the pegged currency.

      Stablecoins also allow someone to “stay” within the crypto space and not have to exit the overall system when wanting to use a cash equivalent within crypto. This is important because traditional systems in which cash moves, such as banks, SWIFT wire transfers and so forth, are beset with regulations, friction, costs, and reporting requirements adding to complexity if someone had to enter or exit actual cash positions. By using stablecoins a user can stay within crypto and avoid the legacy financial system altogether.

      Stablecoins come in one of three different flavors (as far as I can tell):

      1. Those backed by fiat 1 to 1. Say one crypto dollar to one U.S. Dollar. Examples include USDT (Tether), USDC (from Circle), gUSD (Gemini). One stablecoin unit would always equal one dollar.

      2. Those stablecoins backed by other crypto. These are “synthetic” dollars backed by the deposit of crypto collateral in exchange for the stablecoins. Examples include Maker’s DAI and the sUSD issued by Synthetix.

      3. Those stablecoins backed by algorithms that do not require collateral and are secured by computer code and incentives. Examples include, DSD, ESD, Basis Cash and such.

      4. There are a range of seigniorage coins that try to flip the traditional “supply is fixed, price is stable” notion, with an elastic supply in an attempt to maintain a specific price range. These coins, such as AMPL, are technically not stablecoins but are interesting experiments.

      Stablecoins have come under increasing scrutiny from regulators and there are indications that Central Banks might push for further regulation as the banks themselves explore issuing their own Central Bank Digital Currencies (CBDCs).

      The future of stablecoins is unclear. Maybe it is bright. Maybe it is nonexistent. We live in times of change and flux.

      Carl Kruse

  21. I am shifting more Into Ethereum.

    Not advising anyone to do this but I have temporarily reallocated my portfolio to be more ETH heavy. Previously it was Bitcoin top heavy.

    My thought process is as follows. We have the following happening DEFINITIVELY in the next 30 days:

    Launch of CME futures for Ethereum in about 10 days. Some people worry this might even be bad as institutions will be able to short ETH, but I think they will long more than short at these levels, and having more institutional exposure to ETH in my mind can only be good.

    Novogratz is launching three new ETH funds around mid-February. These funds will put more buying pressure and give more exposure to ETH.

    Grayscale has reopened its Ethereum fund to new investors. It has been closed since December. This will add a touch more buying pressure beginning any day now.

    Happening within 30-90 days from now is …:

    Deployment of EIP-1559, which will change ETH economics, introducing burning of ETH, and eventually make ETH more scarce. The actual event of this happening I think will fuel ETH fomo.

    Within 90 days, ETH 2.0 Phase 1 testnets will launch adding more evidence that ETH 2.0 is on track and a reality, further beating the drums for ETH.

    All the while, DeFi metrics – TVL, number of users, number of transactions, value of transactions and overall exposure is increasing daily. All of this taking place on Ethereum. And at a time when a wide range of young investors and Robin Hooders are looking for other investments.

    Has everyone forgotten about a 1.9 trillion stimulus package in the works? Some of that money will add fuel to markets everywhere.

    And, holy long comment, all of these reasons will fuel a beautiful Ethereum rally within the next 60 days or so.

  22. I only took a quick look at EOS but the technology seemed good. But good or not good B1 was in its own bubble and as others have pointed out community devours technology and capital. Look at Ethereum now. Fees crazy. But everyone using it. Bye bye EOS.

  23. hello hello. Ethereum futures launching on the CME tomorrow. Many people think we will have serious dump. Any thoughts here on whether CME is good or bad for ETH?

    1. People are concerned about CME futures because when they went live for Bitcoin back in Dec 2017, Bitcoin pulled back hard.

      But I think these are two different situations.

      Bitcoin was at the end of a crazy bull run, Ethereum is just starting a bull run. CME futures are paper transactions settled in cash, with no real ETH actually changing hands. Simply institutions betting on the underlying market itself.

      Overall I think it is going to be positive for ETH because it will give it wider exposure to an institutional audience. I’m not sure the ETH price will immediately swing one way or the other, with one caveat — ETH speculators may “sell on the news” and so we might see some slight selloff but I don’t think this will be directly tied to the CME Futures themselves.

      Meanwhile, the underlying situation for ETH is bullish. Towards the end of this month Mike Novogratz’s Galaxy Digital is launching three ETH specific funds that will be buying real ETH in the market. Grayscale Capital continues buying ETH and we have some good developments for ETH such as EIP 1559, which will involve burning ETH with each transaction, making ETH more scarce, and the testnet for ETH 2.0 phase 1 is set to launch within the next 60-90 days. I think if you can hold for six -nine months we could see ETH do well. Though this is my opinion, not financial advice, and please, please, please do your own research so that you feel comfortable with whatever decisions you make.

      Crypto is always hard because of its volatility but I think it should do well, if you can stomach the wild gyrations.

      Carl Kruse

  24. What’s amazing is that there is still an EOS community around after all the false steps and false promises. Incredible!

  25. I have about 50 EOS spread over six accounts. Tried to move them to one account to then send to an crypto exchange to sell and gave up. I don’t have enough CPU and NET staked (1 EOS) and no way to figure out how to get free transactions and not about to buy more EOS to get rid of the EOS I have.

    A total failure of a blockchain.

  26. I used to play in some of the EOS gaming dapps and today I tried to move some EOS from one wallet to another and couldn’t for the life of me figure out what to do. Hehehehe.

    On a separate topic any thoughts about diversifying out of some crypto into gold?

  27. Given gold’s longevity and vast network of holders and infrastructure supporting the market, gold is likely to be around for a long while. I kinda like it.

    It could even have a nice pump if fiat inflation rises.

    I am a touch concerned though with the future of gold.

    1. Younger generations are not such a big fan of gold.
    2. Bitcoin is fulfilling a good part of the role gold plays, and it does it better.
    3. Savvy younger folks recognize #2.
    4. It looks like there are large deposits of gold in underwater locations and there are miners gearing up to go after it. Also, though it may sound like science fiction, there are tons of precious metals on the moon and on asteroids , and the technology to send robots out there to get it is available now and several projects are working to do just that. Gold may be less scarce in the future.
    5. Physical gold requires some overhead to keep – security, validation, storage and eventual selling.
    6. Speaking of selling, in Germany, where I am right now, the environment is super gold friendly. I can walk into several places, including banks, with two kilos of physical gold, and walk out in 5 minutes with €100k in cash and nobody would say anything. Such a thing is impossible in the USA or many other places. Because of this non-hassle convertibility to cash I don’t mind holding gold. But if it were more of a hassle I dunno.
    7. Some of the issues I mention here are mitigated by buying tokenized gold like PAXG or buying gold with a reputable company that will store it and custody it for you, though you are in a “not your keys not your gold” type of thing.
    8. All of this said, I like gold and hold it, as another asset that is outside the traditional system and that should do well in these immediate years given all the money printing going on.

    Gobi

  28. Alot of knowledge here guys. Wow.

    I wonder if I should be a little less skeptical of crypto staking? Mostly I cant bring myself to stake on Gemini for example. Even BlockFi is sketchy at times. Nothing bad has happened but what is the real risk portfolio of these companies?

    Not worth staking in DeFi rn imo

    1. The risk of staking on a Gemini or Block Fi is relatively small. Here are the risks as I see them:

      1. Centralized companies so if they go under who knows what is the status of your funds. Supposedly they have good custodial arrangemens and insurance so probably should be OK. If dealing with large amounts of funds you can take out insurance with Nexus Mutual, which I think mostly mitigates this type of risk.

      2. Centralized companies so if you get into any legal entanglements — taxes owed, divorces, business disputes, hit an old lady with your car, etc — a court subpoena easily freezes any assets with them. This is a risk.

      3. Crypto accounts used between you and them to send in for staking are doxxed, so loss of privacy, but easily solved by taking claimed funds back, sending them to an exchange (as a poor man’s mixer) and then sending to a new address.

      4. Kinda clunky and slow to make withdrawals, so if you needed funds quickly you’re kinda stuck. I don’t see this as much of a problem with good planning.

      5. I like the idea of staking with crypto.com better, which gives you comparable rates, has flexible schedules of staking and you can quickly move into trading situations, load a credit card and use the money and so forth. The risks are similar to the centralized issues of Gemini and BlockFi.

      6. DeFi staking pays MUCH higher rates, especially for stablecoins, but comes with smart contract risks, rug pulls and such. Some of the risks can be mitigated with many protocols via Nexus Mutual or Cover or similar.

      7. I like the idea of a mix – stake some to get some yield, and hold some in cold storage as a hedge against a black swan event.

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