What We’ve Read Today…

The Clark Street Crew…
© Getty Images A stock photo of the bitcoin symbol. 

Whichever Party Is First to Back Cryptocurrency Will Win Big

Louisa Idel is the Head of Insights at Redfield & Wilton Strategies.The views in this article are the writer’s own.

In American politics, issues on which both parties have yet to establish a firm position are rare, representing a significant opportunity for whoever moves first. In 2021, one such area is cryptocurrency regulation.

Cryptocurrency may still be a minor issue for some voters, but with the crypto market now valued at more than $2.5 trillion, its importance is only going to grow—in both economic and electoral terms. Moreover, our research team at Redfield & Wilton Strategies recently found that many voters are already aware of cryptocurrency, making the political stakes even higher.

We polled almost 10,000 Americans across ten politically salient U.S. states, and what we found was that very few respondents—ranging from 8 percent in Florida to 14 percent in Georgia—hadn’t heard of cryptocurrency. Meanwhile, over four in 10 people polled in key states said they’d read or heard “a moderate amount” or “a lot” about the topic.

And voters aren’t just aware of cryptocurrency; they are receptive to it, too. Even without having been exposed to any campaigning on the issue, roughly a third of Americans across all states polled—ranging from 28 percent in Arizona to 37 percent in both Texas and Wisconsin—would vote “yes” on a ballot measure asking whether cryptocurrency should be deemed legal tender in their state.

Whichever party wants to catch these receptive voters should act swiftly, not only to beat the other party to the punch but also to pre-empt legislation that would prove difficult to reverse if enacted.

To wit, the Biden Administration, pressured by officials in the Treasury Department, has recently sought to introduce stricter federal rules for cryptocurrency reporting and exchanges, ostensibly in a push to enforce tax compliance. Yet the effort to include such rules in the recently passed infrastructure bill failed, opening up a fresh opportunity for either party to win over voters who would be more disposed toward an open, crypto-friendly legal and regulatory environment.

In particular, the Republican Party could seize the initiative at the national level, having already established a crypto-friendly legal framework at the local level. In recent years, Republican lawmakers in Wyoming have introduced legislation that allows banking institutions to legally operate with cryptocurrency, resulting in the relocation of several companies in the industry—Ripple and Kraken—to the western state. For the GOP, this local success could be a microcosm of a nation-wide story.

Indeed, our research finds that significant proportions of Americans, from 25 percent in Arizona to 42 percent in Texas, say they would support their state introducing legislation that provides a legal framework for cryptocurrency and encourages cryptocurrency investors to operate as Wyoming has already done.

Surprisingly, support for emulating Wyoming is highest among registered Democratic voters. It’s an opportunity for the Republican Party to win over new voters—as well as a reason for the Democratic Party to reverse course on the issue.

More problematically for the GOP, the party itself appears divided on the issue. While Ted Cruz notably led the effort to strike out the cryptocurrency provisions in the infrastructure bill, former president Donald Trump has labelled Bitcoin a “scam” and has said he sees cryptocurrencies “as a disaster waiting to happen.”

A significant stumbling block for all policymakers has been the close association of Bitcoin, whose value is prone to speculation and wild fluctuations, with the subject of cryptocurrencies altogether. Strong majorities in all states polled say they had heard of Bitcoin, but few had heard of other cryptocurrencies. Public awareness of stablecoins like the world’s largest, Tether, is currently limited.

This, too, is an opportunity. The more widespread use of stable cryptocurrencies like Tether would ensure that transactions that are currently settled in a local currency may soon effectively be settled in U.S. dollars. But if the U.S. were to turn against dollar-backed stablecoins, this move would likely leave a currency vacuum, one which another player—perhaps China, with its central bank issued digital currency—would be more than happy to fill. Backing U.S.-pegged cryptocurrencies thus becomes a means to contain China’s and others’ influence, an argument likely to appeal to voters across the political spectrum.

Capturing voters who favor a crypto-friendly regulatory framework is a major opportunity for both parties in the U.S. But this advantage is time sensitive. The first party to get there will win a long-term advantage, both political and economic.

Louisa Idel is the Head of Insights at Redfield & Wilton Strategies.

The views in this article are the writer’s own.

What We’ve Read Today…

The Clark Street Crew…

Coinbase Files to Offer Cryptocurrency Futures and Derivatives Trading

Cryptocurrency exchange Coinbase has filed an application with the National Futures Association (NFA) to offer futures and derivatives trading on its platform. The exchange says its new offerings aim to “Further grow the cryptoeconomy.”

Coinbase Global Inc. (Nasdaq: COIN) announced Wednesday via Twitter that it has filed an application with the National Futures Association (NFA) to register as a Futures Commission Merchant (FCM). The exchange wrote:

This is the next step to broaden our offerings and offer futures and derivatives trading on our platforms.

The exchange added that its goal is to “Further grow the cryptoeconomy.” The filing shows that the company is registered as Coinbase Financial Markets Inc.

Crypto derivatives have become a huge market and most major cryptocurrency exchanges offer derivatives trading, including Binance, Okex, FTX, CME Group, and Kraken.

In April, Coinbase announced that it had acquired Skew, a crypto data analytics firm that specializes in tracking the derivatives market.

Coinbase is currently raising funds by issuing bonds. Initially, the company planned to issue $1.5 billion worth of senior notes. However, due to high interest, it has raised the amount to $2 billion. Coinbase said it intends to use the net proceeds from the offering “for general corporate purposes, which may include continued investments in product development, as well as potential investments in or acquisitions of other companies, products, or technologies that Coinbase may identify in the future.”

What We’ve Read Today…

The Clark Street Crew…

Cardano price could reach $8 if this accumulation fractal plays out

 By: Akash Girimath FXStreet

CRYPTOS | 9/15/2021 9:13:15 AM GMT

  • Cardano price has been accumulating for over a month now, hinting that a volatile move is incoming.
  • This accumulation phase seems similar to the one seen between November 18, 2020, and January 5, 2021.
  • ADA could head to $8.40 even if a portion of the fractal plays out.

Cardano price has been teetering above a crucial support barrier for over a month and shows signs of coiling up. This congestion could resolve into a massive bullish breakout, pushing ADA to new all-time highs.

Here are two reasons for the optimism around Cardano and why it could hit $8 over the coming weeks.

Alonzo upgrade gives birth to dApps on Cardano blockchain

The much-awaited Alonzo upgrade was successfully implemented on September 12 via a hard fork. This improvement brings smart contracts and a plethora of possibilities to it, all of which were highly anticipated.

While Cardano is sometimes referred to as the so-called “Ethereum killer,” it never possessed any capabilities that allowed it to play on the same field. However, developers can now start building dApps, decentralized exchanges (DEX) and algorithmic stablecoins, which could evolve into a DeFi ecosystem similar to Ethereum

This development is possible because of the Alonzo upgrade, which has firmly implemented the core building blocks. Moreover, thousands of developers are already taking part in the Plutus Pioneer course, which will allow them to build a new ecosystem on Cardano.

An example of this is ADALend, a lending platform built on the ADA blockchain that will facilitate the “new wave of flexible financial markets by serving as a foundational layer for instant loan approval, automated collateral trustless custody and liquidity.”

Similarly, PlutuSwap Platform is ready to launch its automated market maker (AMM), a decentralized exchange (DEX), on the Cardano platform. It aims to set a standard for the ADA DeFi ecosystem, be it UI/UX friendliness or the simplicity and reliability of the Cardano blockchain.

The announcement further reads,

When fully operational, PlutuSwap.com will be a decentralized exchange based on the Extended Automated Market Maker (EAMM) protocol and powered by the Cardano Blockchain Infrastructure’s UTXO mechanism.

While this is just the beginning, the burgeoning ecosystem will attract more users to the Cardano blockchain, improving its prospects and bringing in tons of capital.

Regardless of the technical setups, if the fundamentals of an asset are strong, the price will find a way to cut through the noise and surge higher. ADA, however, displays an accumulation fractal that could propel it to new all-time highs with its recent upgrade acting as a tailwind.

Cardano price accumulation fractal hints at a massive upswing

Cardano price accumulated for roughly 38 days between late November 2020 and early January 2021, which was followed by a 600% bull run. This run-up pushed ADA to $1.20 from $0.10.

Cardano price has entered another consolidation phase since mid-August that looks similar to the one mentioned above. If a similar structure continues to unfold and ADA breaks out from the congestion, it will trigger an exponential rally. 

However, the confirmation of this run-up will arrive after Cardano price produces a decisive close above its all-time high at $3.10.

Assuming ADA can replicate one-fourth of the 2021 run-up, i.e., a 150% advance would forecast a $6 target.

A 300% upswing would push Cardano price through the 261.8% Fibonacci extension level at $8.41 and place the so-called “Ethereum-killer” at $9.50 per token.

ADA/USDT 12-hour, 9-hour chart

While optimism around Cardano price seems logical after the recent Alonzo upgrade, things could turn awry quickly if the big crypto decides to tank. If Bitcoin price begins to crash violently as it did on September 7 or May 19, it would push all the altcoins to do the same.

If ADA slices below the range low at $1.68, it would set up a lower low and invalidate the bullish thesis. While recovery from this downturn is plausible, a massive shake-out would scare the investors away and delay the upswing.

In this case, ADA could drop to the next support floor at $1.50 and the July 20 swing low at $1.

How Media Fell for a Lucrative Lie About Walmart

What we Read Today…

Opinion

How Media Fell for a Lucrative Lie About Walmart

A series of failures by news services and gatekeepers sent Litecoin, an early altcoin, on a wild, fraudulent ride.

By David Z. Morris

CoinDesk Insights

Sep 13, 2021 at 3:19 p.m. EDT

Updated Sep 13, 2021 at 6:06 p.m. EDT

Fake news keyboard (Getty Images/Dazeley)

“A lie can travel halfway around the world while the truth is putting its boots on.” – Actually Not Mark Twain

This morning, an unknown scammer perpetrated a news hoax that likely made them a lot of money and cost innocent investors just as much.

A press release posted to the GlobeNewswire service this morning by “Walmart, Inc.” claimed that the big-box retailer would begin accepting payments in the cryptocurrency litecoin (LTC). The news was quickly picked up by reputable news outlets including Reuters, U.S. News & World Report and CoinDesk.

Litecoin, unsurprisingly, surged in the markets, zooming up from $175 to a peak of $233.44 in roughly 15 minutes, according to CoinDesk data. Litecoin trading volumes also surged. Much remains to be unpacked about trading flows during that period, but the likely bottom line is that a lot of people bought LTC on the news.

Then LTC tanked all the way back down to below $180 within another 45 minutes, as some observers began to notice discrepancies in the release. Walmart has now confirmed that it was fake.

Whoever created the fake release likely dumped a large bag of LTC as fast-fingered traders bought the hype. That means a lot of investors just lost a lot of money to a pump-and-dump.

CoinDesk is still working to figure out exactly what happened, but there were at least two key failures. One was at GlobeNewswire, which published a release from a user impersonating WalMart; and one was at the Litecoin Foundation, which retweeted the news on Twitter, seeming to confirm it – despite it containing what we now know were fake quotes from Litecoin Foundation leadership.

Of course, CoinDesk and other news outlets also failed in our due diligence. This was a breakdown in our internal processes, and we are adding further safeguards against getting taken in again.

From the outside, the failure at GlobeNewswire appears to have been the most severe. The service is widely considered a reputable platform for real companies to publish real press releases. The Associated Press, perhaps the most trusted news service in the world, in turn trusts GlobeNewswire enough that it distributes some of its releases automatically.

In this case, though, GlobeNewswire appears to have been duped by a stunningly simple trick. Whoever published the fake release registered a “Walmart, Inc.” account associated with the domain “Walmart-corp.com.”

That sure sounds legit, but the domain is actually owned by a squatter. This was also the first release posted to the account, which should have merited some scrutiny. The release included an email address, william.white@walmart-corp.com, supposedly for real-life Walmart public relations chief William White. But an email sent to that address just before noon Eastern time Monday bounced immediately.

“When GlobeNewswire became aware this morning that a fraudulent user account was used to issue an illegitimate press release we promptly withdrew the press release and issued a Notice to Disregard,” the company said in a statement to CoinDesk. “This has never happened before and we have already put in place enhanced authentication steps to prevent this isolated incident from occurring in the future. We will work with the appropriate authorities to request – and facilitate – a full investigation, including into any criminal activity associated with this matter.”

The pumper is likely to face legal fallout. Even if Walmart stock was not the target, the involvement of a publicly traded company means the SEC is likely to launch an investigation, according to lawyers who spoke to the New York Times. The regulator has repeatedly prosecuted people who try to use fake news to manipulate financial markets.

Another significant failure seems to have been by the Litecoin Foundation, which retweeted the news release early Monday morning from the @Litecoin account. That was reasonably seen by some as confirmation, since Foundation leadership was quoted in the release and would presumably have been involved with preliminary talks with Walmart.

But according to Foundation head and Litecoin creator Charlie Lee, the retweet was a process error.

“We have three people who have access to the [Litecoin] Twitter account,” Lee told CoinDesk. The person on duty “saw the news on GlobeNewswire and got excited. He didn’t know better that we didn’t have a partnership, and unfortunately, he didn’t check with me because I was asleep at the time. So he retweeted it, and 10 minutes later he saw that it was fake and we deleted it.”

“It’s unfortunate,” Lee said. “We’ll definitely be more careful in the future … But I think the story blew up before we tweeted it.”

“It happens. Everyone [in crypto] just reinforces each other,” he said.

That reinforcement will be hard to completely unwind – at this writing, many tweets trumpeting the fake Walmart/litecoin news are still up, and could mislead investors for weeks or even months to come.

This whole mess reflects broader pitfalls of the internet age. False news is more viral than the truth, largely because, freed from the chains of reality, it is usually splashier and more surprising. It also takes much more work to debunk false information that has gained a foothold than it does to create it in the first place.

At the same time, the business imperatives of online media, particularly the financial press, make the entire system more vulnerable to disinformation. Getting a story out quickly can make a huge difference to the traffic and advertising revenue it generates, and over time, to the Google visibility of an entire website. That can lead to corner-cutting as newsrooms race to be first. This time, CoinDesk succumbed to that pressure.

Update 4:55 ET 9/13/21: Added statement from GlobeNewswire.

What We’ve Read Today…

The Clark Street Crew…

Is XRP really going to break out like everyone is saying, or is it best just to stick with Cardano?

By: Jay Thompson Researcher and micro- investor

To answer this with any certainty you need to check if either XRP or ADA has decoupled from Bitcoin. Because for there to be a breakout, or in other words a run up in price to some figure that coin gurus have picked out of the sky either one of two things needs to happen.

  1. Bitcoin (BTC) breaks up from its sideways movement since the crash which started on May 19th. If BTC can get a solid break above 40K and continue up, then pretty much all the major alt coins are going to break out as well. So, there is the first possibility for XRP to break up. This will also move ADA up.
  2. the second possibility is a decoupling from Bitcoin. For this to occur there needs to be a good reason for folks to think XRP should go up when BTC is staying flat. That might be breaking news that the SEC has dropped the lawsuit. That would decouple XRP from BTC for a few days most likely. Of course, as of lately there has not been a whole of news about XRP and it is probably unlikely there will be much of any news besides something about the lawsuit. If Ripple wins or the SEC decides to drop the legal action, then there is the possibility that Elon Musk might tweet something positive about XRP which would also be bullish for the coin and might help XRP decouple from the BTC train.

Now let us look at the possibilities for ADA. If you compare the chart of ADA to BTC there seems to already be a bit of decoupling going on. After BTC crashed, ADA was the first asset in the top 20 by Market cap to recover. Cardano has been bullish for quite some time in fact. The only thing that had much of an effect on the ADA chart was the BTC crash which pulled every coin down with it.

ADA is about to become smart contract capable when the Alanzo hard fork goes live in August. This will give developers an option to build on the Cardano Ecosystem instead of the Ethereum system. It opens a lot of possibilities and is almost certainly to give a boost to ADA’s price.

ADA is also working toward many other goals like the Africa project which helps poor people validate information like diplomas and GPA records for students, deeds for real estate, and titles for different kinds of assets. This is such a great use for Block Chain technology, and I know of no other Crypto project that is doing stuff like this.

Hoskinson, the founder of Cardano, (ADA) has such a broad vision for the project that it is impossible to mention it all in a short Quora answer.

So bottom line in comparing these two coins is there seems to be several reasons for ADA to continue going up and only the possibility of one or two reasons for XRP to go up. So IMHO it might be a good idea to bet on ADA over XRP.

But if the lawsuit gets dropped and the financial news media make a big deal of the news, then for at least a short time XRP will probably outperform BTC and ADA.

BTW. This is not financial advice. I write these answers because it makes me think more about how I will invest my hard-earned money. Please do your own homework and think hard before you invest in anything, and I hope this helps you think about it. Have a great day! Live long and prosper!

What We’ve Read Today…

The Clark Street Crew…

What is DAI, and how does it work?

By: Sharon Manrique

This is a brief overview of how MakerDAO and Dai works. There are many intricacies to the system, but I believe these are the main mechanisms in place if one wants a brief overview of how Maker gives Dai its stable coin properties.

As long as huge price fluctuations plague the ecosystem, cryptocurrency could never be globally adopted as a currency for everyday real-life transactions.

Even though cryptocurrency has progressed significantly since its inception, a few crucial problems are blocking its adoption as a real-world currency. One problem being: price fluctuations of a single coin can drastically change in a day, let alone an hour. Could you imagine having USD or CAD fluctuate hundreds, maybe thousands of dollars in an hour while you are trying to pay rent or buy groceries? You could go from having the appropriate amount of USD for rent of $1200, then suddenly it is now worth $900 dollars.

Cryptocurrency saw a significant boost in popularity during the bull run of 2017. This caused a lot of hype and fear-of-missing-out to sweep across investors, creating a domino effect of other investors buying in as the price of many cryptocurrencies skyrocketed— which only helped boost prices even higher. However, what goes up must come down. The market started falling rapidly during the early months of 2018 as investors became weary of the current valuations of cryptocurrencies, and most of them were not exactly sure what they were getting themselves into. There is a small percentage of investors who buy into cryptocurrency due to its technological fundamentals, but it is not enough to change the current trend of pure-hype investment. Imagine if investing in cryptocurrency could guarantee steady returns, offered minimal risk of losing your initial investment, and helped make history by supporting a technology that you believed could make a difference in the world. And for those who enjoy riding the highs and lows of the cryptocurrency market, you could still participate in high-risk, high-reward endeavors while your initial investment was safe.

The Collateralized Debt Position (CDP) is a financial cryptocurrency concept that has been in development since 2014 by the MakerDAO project, which offers a possible solution to the high volatility that cryptocurrency faces today through the stablecoin known as Dai. A stablecoin is a cryptocurrency that is pegged to another stable asset. Pegging is the practice of fixing the exchange rate of one currency to the value of another currency. In this case, the Dai stablecoin is pegged to the US dollar. Having a stablecoin opens up many new financial possibilities for this burgeoning sector that were not possible before due to volatility. Not only does Dai offer stabilization, but is also offers transparency and decentralization, since it is built on top of the Ethereum network.

Now, back to CDPs. There are many mechanisms in place that ensure that Dai stays relative to the US dollar. Maker offers a smart contract platform on the Ethereum blockchain that backs and stabilizes Dai through a series of dynamic feedback systems called CDPs, which also help to facilitate an efficient decentralized margin trading platform. With a CDP, a user deposits an asset into a smart contract as collateral for a loan. Once the CDP holds the assets deposited by a user, the user can then generate the equivalent USD value in Dai that they wish to borrow. Users can then do anything they want with Dai, just like any other cryptocurrency. They can trade Dai, use it for payments, or even use it as a personal savings account — there are no restrictions to using Dai, it can be used the same way you would use any other cryptocurrency.

Since Dai is pegged to the US dollar, you will always only owe back what you initially borrowed in addition to interest. For example, let’s say you deposit 2 ETH (at moment of writing, ETH is worth $105 USD) into a CDP and borrow 100 Dai: You would have to pay 100 Dai back plus accumulated interest, and you get back your full 2 ETH. Currently, there are other systems you can use to borrow other non-stable coins, but with the current market volatility, you could end up owing twice as much as your initial investment. Let’s say you deposited 10 AssetCoins, and then generated 100 NonStableCoin(NSC) to be borrowed at their current market price of $2 USD. If the price of NSC has dropped to $1 USD when you go back to repay the loan, you would now owe 200 NSC plus accumulated interest. As you can see, this is a great benefit for any investor: what you owe will always be clear and certain.

In another example, let’s say you want to invest in the very high-risk AmazingICO(AICO) but you do not want to send in your ETH and potentially lose it all. You could deposit 10 ETH into a CDP (at time of writing, that is $1050 USD), generate the equivalent in Dai, and then send that 1050 Dai to the AICO. Let’s say AICO crashes and you want to cut your losses, so you sell AICO back into Dai, but now you only have $800 worth of Dai. Good news though! You still have your 10 ETH safe in a CDP. In order to retrieve your ETH, you would have to find a way to recuperate the $250 USD to pay off your loan plus interest, but you’re happy that you didn’t lose ETH since while you were waiting for your ICO to increase in value, the price of ETH has been skyrocketing, so now your 10 ETH is now worth $2100! That was enough to offset your losses in AICO.

Imagine if instead of setting up a CDP, you actually sent in ETH to AICO, you could have lost 2 ETH, which would have meant losing $420. Setting up a CDP and using Dai as your method of investment can be the difference between either doubling your loses or doubling your profits. Of course, there will always be risk with investments, so you must be diligent in your research and strategies.

The deposited assets inside a CDP can only be retrieved once the user has paid back the same amount of Dai that they initially borrowed. However, generating the initial CDP to borrow Dai also accrues interest, so the user must pay back the Dai they borrowed plus generated interest to retrieve their assets. Active CDPs must always hold a higher collateral value than the value of debt the user has. Otherwise, CDPs that hold less value in collateral than they do in debt might be at risk to be liquidated and sold off.

Dai initially launched with support for only one collateral, which was Pooled Ether, also known as PETH. In order for users to obtain PETH to use as collateral for a CDP, they first had to deposit their ETH into a smart contract that pools ETH, which then gave them the equivalent amount in PETH. The purpose of using Pooled ETH was so that if the market for ETH crashed, the CDP would be able to retain a higher value of collateral than debt. If ETH crashed, the debt in a CDP would be worth more than the collateral held. Maker would then have the ability to recapitalize the market by automatically decreasing the supply of PETH, which would increase demand and, in turn, increase the price of Dai. This then increases the value of the collateral in a CDP and decreases the overall value of debt.

Maker is able to make Dai a Stablecoin due to its Target Rate Feedback Mechanism (TRFM). The TRFM is an automatic mechanism that the Dai Stablecoin System employs in order to maintain stability. The Target Price of 1 Dai is $1 USD, so the Target Rate determines the needed change of price of Dai over time in order to reach the Target Price during a market swing. However, when the TRFM engages, the fixed peg ratio of 1 DAI to $1 USD breaks, but it is required in order to get the price of Dai back to where it needs to be. For example, if the Target Price of Dai is below $1 USD, the TRFM increases so that it can push the price of Dai back up. This causes the price of Dai to increase, which then causes the generation of Dai through CDPs to become more expensive.

Simultaneously, this also causes users who hold Dai to gain profit, leading to an increase in demand for Dai. The combination of increased demand for the coin causes a reduced supply of Dai in the market, as users lower the supply of Dai as they borrow it through CDPs and buy from the market, they cause the price of Dai to be pushed back up to its Target Price.

The TRFM and Target Rate are determined by market supply and demand dynamics. However, Maker voters can also set the Sensitivity Parameter of the TRFM. The Sensitivity Parameter determines how mild or severe the response of the Target Rate Feedback Mechanism should be when the Target Price of Dai has deviated from where it should be. For example, if the Sensitivity Parameter is defined as “10% in 15 minutes” by Maker voters, then the Target Rate cannot change the price of the market by more than 10% within a span of 15 minutes. This means that the maximum hourly change in price of Dai that the TRFM can make is 40% from where Dai was at the beginning of the hour. This restriction ensures that there is enough time to trigger a global settlement in the event that an attacker gains control over a majority of the oracles. The Sensitivity Parameter is set by Maker Voters so that if the Oracles were ever hacked, Maker Voters would be able could set the Sensitivity Parameter as low as possible to limit the speed of which the price of Dai could change, which would give the network enough time to trigger a global settlement.

The Maker Platform requires real-time information to be fed into the system in order for the autonomous procedure to work properly. This ensures that collaterals in CDPs are worth more than the debt accrued in them; if not, TRFM kick’s in to level the price of Dai. Maker always wants the collateralized assets to be worth more than the debt incurred by users. The protocol can liquidate CDPs if the collateralized assets within them are deemed to be “risky.” In this case, liquidating them would ensure that the CDP can cut its losses. The Maker Platform also requires oracles to relay real-time information to the system about market price in order to adjust the Target Rate when TRFM is engaged.

A Global Settlement is a last resort process to guarantee the Target Price to the holders of Dai. When a Global Settlement is triggered, it shuts down the system. This means that holders of Dai and CDP users receive the net value of assets that they are entitled to. The process is fully decentralized and Maker voters govern the access to it in the case of an emergency.

Oracles and Global Settlers are known as Key External Actors that help keep Dai’s price stable. They are external actors since they do not live within the protocol but, rather, live around it to help keep Dai safe. Another type of Key External Actor are Keepers. Keepers are usually automated and independent actors who are incentivized by profitable opportunities to contribute to decentralized systems. Keepers can also make profit trading Dai; when the market price of Dai is higher than Target Price, keepers sell to increase supply and decrease demand, which lowers the price of Dai back to its Target Price. Keepers also buy Dai when the price is below $1 USD to lower supply, which increases demand for the coin, in turn helping push Dai’s price back up to where it needs to be.

As any company would, Maker strives to ensure that the operation of this system is as secure as possible, but there are always potential risks. However, Maker is consistently developing new ways to benefit the community and perfect its stablecoin system. Maker addresses a crucial problem in today’s Ethereum ecosystem: The price of cryptocurrency is too volatile to be today’s everyday currency.

What We’ve Read Today…

The Clark Street Crew!

How Elon Musk Became Elon Musk: A Brief Biography…

By: DAN BLYSTONE

TABLE OF CONTENTS

  • Born in South Africa
  • Bullied as a Child
  • Moving to Canada
  • Musk’s Education in the U.S.
  • Tesla and Beyond
  • The Bottom Line

Visionary entrepreneur Elon Musk is the co-founder of PayPal (PYPL) and Tesla Motors (TSLA) as well as the founder of SpaceX. His astounding success has given rise to comparisons of Musk and Steve Jobs, Howard Hughes, Henry Ford, and Bill Gates. Amid an often-difficult childhood, Musk developed a relentless work ethic (he is known to work as many as 80 to 120 hours per week) and a tenacious single-minded vision.

On Sept. 7, 2018, Musk appeared to be smoking marijuana while interviewing for a podcast. Coupled with the exit of Tesla’s head of human resources and chief accounting officer, that news saw the stock drop in trade. This was just another addition to the string of bad news for the company, including a shareholder lawsuit against Musk and the company for his infamous tweet on Aug. 7. Musk had tweeted that he is considering taking Tesla private. The company later decided against the move.7

Despite these incidents, Tesla’s stock has only continued to climb higher under Musk’s leadership, increasing his wealth along with it. In Jan. 2018, Tesla announced a compensation structure in which Musk would not receive an annual salary but would instead earn cash based on the increasing market caps the company hoped to achieve over the next ten years.

 As of Jan. 26, 2021, according to the Bloomberg Billionaires Index, he has an estimated total net worth of $209 billion, surpassing Jeff Bezos as the richest person in the world.

We look at the early life and education of the man behind a string of companies that have disrupted multiple industries.

KEY TAKEAWAYS

  • Elon Musk is the charismatic founder and CEO of electric car maker Tesla as well as SpaceX and the Boring Company.
  • Born and raised in South Africa, Musk spent time in Canada before finally moving to the U.S.
  • Educated at the University of Pennsylvania in physics, Musk started getting his feet wet as a serial tech entrepreneur with early successes like Zip2 and X.com.

Family Background and Youth in South Africa

Elon Reeve Musk was born in 1971 in Pretoria, one of South Africa’s three capital cities. His father was an engineer, and his mother was a model and nutritionist. He is the oldest of three children in an ambitious family. His brother Kimbal Musk is currently a venture capitalist and environmentalist. His sister Tosca Musk is an award-winning producer and director.

After his parents divorced when he was a child, Musk lived primarily with his father. Musk started school a year early, attending the private Waterkloof House Preparatory School and later graduating from Pretoria Boys High School. He read voraciously and was also an avid fan of comics. Self-described as a bookworm and something of a smart aleck, he was bullied in school and withdrew to his books at the expense of his social life.

Bullied as a Child

Musk’s intellectual aptitude did him few favors as a child. He found few friends in the tough-minded Afrikaner culture he encountered in school.

“I had a terrible upbringing. I had a lot of adversity growing up. One thing I worry about with my kids is they don’t face enough adversity,” he would later say in an interview.

Musk attended the English-speaking Waterkloof House Preparatory School, and later graduated from Pretoria Boys High School. The years were lonely and brutal, from his descriptions.

“They got my best friend to lure me out of hiding so they could beat me up. And that hurt,” Musk said. “For some reason they decided that I was it, and they were going to go after me nonstop. That is what made growing up difficult. For several years there was no respite. You get chased around by gangs at school who tried to beat the (expletive) out of me, and then I’d come home, and it would just be awful there as well.”

If there was a point of bright escape for Musk; it was technology. When he was only 10, he became acquainted with programming via the Commodore VIC-20, an inexpensive home computer. Before long, he had become proficient enough to create Blastar — a video game in the style of Space-Invaders. He sold the BASIC code for the game to a magazine called PC and Office Technology for $500.

In one telling incident at that time, Musk, along with his brother, planned to open a video game arcade near their school. Ultimately, their parents nixed the plan. But apparently the only thing stopping them was the need for a city permit which had to be applied for by an adult.

Moving to Canada

At 17, Musk moved to Canada to avoid serving in the South African military, whose main duty in the late 1980s was enforcing apartheid. He would later obtain Canadian citizenship through his mother.

After emigrating to Canada, Musk enrolled in Queen’s University in Kingston, Ontario. It was there that he met Justine Wilson, an aspiring writer. They would marry and have five sons together, twins and triplets, before divorcing in 2008.

Musk’s Education in the U.S.

After two years at Queen’s University, Musk transferred to the University of Pennsylvania. He took on two majors, but his time there was not all work and no play. With a fellow student, he bought a 10-bedroom fraternity house, which they used as an ad hoc nightclub.

Musk graduated with a Bachelor of Science in Physics, as well as a Bachelor of Arts in Economics from the Wharton School. The two majors speak to the direction Musk’s career would take later, but it was physics that made the deepest impression on his thinking.

“(Physics is) a good framework for thinking,” he would later say. “Boil things down to their fundamental truths and reason up from there.”

Musk was 24 years old when he moved to California to pursue a Ph.D. in applied physics at Stanford University. With the Internet exploding and Silicon Valley booming, Musk had entrepreneurial visions dancing in his head. He left the Ph.D. program after just two days.

In 1995, with $28,000 and his younger brother Kimbal at his side, Musk started Zip2, a web software company that would help newspapers develop online city guides. In 1999, Zip2 was acquired by Compaq’s AltaVista web search engine for a whopping $340 million. Musk used his Zip2 buyout money to create X.com, which he intended to shape into the future of banking. X was merged with a company called Confinity and the resulting company came to be known as PayPal. Musk was then ousted from the company before it was bought by eBay for $1.5 billion.

After PayPal slipped away, Musk helped generate funding for an electric car startup called Tesla.

Tesla and Beyond

In 2004, Musk joined engineers Martin Eberhard and Marc Tarpenning to help run Tesla Motors, where Musk was integral in designing the first electric car: The Tesla Roadster. After Eberhard was ousted from the firm in 2007, following a series of disagreements, Musk seized management control as CEO and product architect. Under his watch, Tesla has become one of the world’s most popular and coveted car brands.

With his interstellar travel company SpaceX, Musk landed several high-profile contracts with NASA and the United States Air Force to design rockets and conduct military missions. Musk has been vocal about his plans to send an astronaut to Mars by the year 2025 in a collaborative effort with NASA.

In addition to producing electric vehicles, Tesla maintains a robust presence in the solar energy space, thanks to its acquisition of SolarCity. Founded in 2006, this clean energy services company currently produces two rechargeable solar batteries, mainly used for stationary energy storage purposes. The smaller Powerwall was developed for home backup power and off-the-grid use, while the larger Powerpack is intended for commercial or electric utility grid use.

The Bottom Line

Musk’s early interest in reading philosophy, science fiction, and fantasy novels is reflected in his sense of idealism and concern with human progress. He aims to work in the areas he has identified as crucial to our future, specifically the Internet, the transition to renewable energy sources, and space colonization. With his work with PayPal, Tesla Motors, SolarCity, and SpaceX, he has defied critics and made advances in all three of these frontiers.

Food For Thought…

What’s Your Answer?

What We’ve Read Today…

The Clark Street Crew!

Bitcoin Crash vs. Correction: Do You Know the Difference?

Ollie Leech

When the price of bitcoin declines, it is common to see the terms “crash” and “correction” used interchangeably. However, the two words mean different things.

Bitcoin crash

A crash is widely regarded in traditional finance as an over-10% drop in price over the course of a single day.

These are often fueled by impactful, sudden changes in the crypto market that cause panicked investors to exit in masse. 

While technical factors can have dramatic effects on bitcoin’s price, large crashes seem to be catalyzed more by fundamental circumstances such as macroeconomic events, major company announcements and sudden changes to international regulations and policies.

Bitcoin dropped

The largest crash ever recorded on bitcoin’s chart took place on April 10, 2013, shortly after the U.S. Financial Crimes Enforcement Network (FinCEN) shut down crypto exchange Bitfloor and announced bitcoin exchanges needed to register as “money transmitters.” Bitcoin prices collapsed over 73.1% in 24 hours, according to Bistamp data, from a height of $259.34 to a low of $70.

During more recent times, the infamous “Black Thursday” crash of March 12, 2020, takes the top spot as the biggest crash after prices fell 40%, from $7,969.90 to $4,776.59, following the World Health Organization’s declaring of the coronavirus a global pandemic.

Correction

A correction is characterized by a gradual decline where prices drop more than 10% over the course of several days. 

These usually indicate bullish traders have become exhausted and need time to consolidate and recover. Exhaustion occurs when a majority of buyers has bought the underlying asset and there are no more new buyers appearing to support the uptrend. If sell orders continue to pile in without anyone on the other side of the order book buying them, prices start to fall.

Corrections can be influenced by minor events but tend to be initiated by technical factors such as buyers running into strong resistance levels, depleting trading volume and negative discrepancies between bitcoin’s price and indicators that measure its momentum like the Relative Strength Index (RSI).

High volatility

Bitcoin is known for being a highly volatile asset. This means its price tends to fluctuate significantly over a relatively short period of time compared to other assets. It is also why many traditional financial investors, including Warren Buffett and Carl Icahn, consider it a highly risky investment.

According to recent data, bitcoin’s one-year volatility stands at 32.7% – significantly higher than the next most volatile assets and asset classes, which are oil, U.S. stocks and U.S. real estate (18.8%, 8.41% and 7.15%, respectively).

While this high volatility has its upsides, particularly during bull cycles where prices can rise dramatically, it also means prices crash and correct on a frequent basis.

Since Jan. 1, 2021, there have been seven notable price moves on bitcoin’s daily chart trading against the U.S. dollar. Four of these movements have been to the downside with a mean average loss of 25.94%, while the other three have been to the upside with a mean average gain of 58.36%.

Knowing which downtrends are corrections and which ones are crashes can help you to better understand the market and how bitcoin traders react to certain fundamental and technical factors. In some events, crashes can foreshadow the arrival of a bear market and a prolonged period of cascading prices, whereas corrections can often be a sign of a healthy uptrend recovering to a support level before retesting a former high.

So, the next time you see bitcoin prices dip into the red you should be able to tell if there’s a correction taking place or a crash, and whether or not the market is going through a healthy recovery or likely reacting to a sudden announcement. 

W.O.W (words of wisdom)

Monday

May 03, 2021

I believe in myself. I will achieve all of my goals. Every day I’m taking little steps toward my dreams. I am able to make great progress in my journey. I am actively taking advantage of opportunities around me. I am going to make today count.

From: daily motivation

The Clark Street Crew!

W.O.W (words of wisdom)

Mark Wilson

What is the most important thing you have learned in life?

1.H.O.P.E. = Hold On. Pain Ends.

2. Overthinking: The art of creating problems that were not even there.

3. Making a ‘living’ is not the same thing as making a life.

4. If you want the rainbow, you got to put up with the rain.

5. A tiger does not lose sleep over the opinions of sheep. Everyone has an opinion, but not everyone’s opinion matters.

6. When deciding on quality or quantity, it is always better to choose quality. It is the same when choosing your life partner.

7. The best time to plant a tree was 20 years ago. The second-best time is now.

8. When fate hands us a lemon, let us try to make lemonade.

9. You can be important to someone but not all the time.

10. Be kind to yourself when you fail. Your failures do not define you.

11. Debt is not worth the stress. If you can avoid debt, do it.

12. We are most alive when we are in love. So, go and find someone to love.

13. You owe nobody anything, so do not waste your time feeling bad about it.

14. Age has no bearing on how you should think, act, or feel. Numbers were only invented to measure arbitrary things. You must be who you are no matter what number age you are.

15. Do not wait for the right one to come. Get out there and work for it.

16. You cannot please everyone, so do not try.

17. Your past does not equal your future.

18. Express your love for the people in your life that matter most. You never know if you will see them again.

19. Life is like a coin. You can spend it any way you wish, but you only spend it once.

20. Being unique is better than being perfect.

21. Keep smiling, because life is a beautiful thing and there is so much to smile about.

What We’ve Read Today…

The Clark Street Crew!

How did Dogecoin go from a joke to a cryptocurrency?

Eugene Chygyryn

Writer at Cryptocurrencies (2014–present)

Dogecoin (DOGE) is a cryptocurrency like Bitcoin or Ethereum, although it is a quite different animal than either of these popular coins. The joke currency named after the Shiba Inu meme has risen by jaw-dropping 13444.6% during a year. Its price does not increase gradually. Usually, it is characterized by massive spikes, leading to consolidation. Not far to seek, the today’s tweet by Elon Musk, where he calls himself “The Dogefather”, has boosted its price by over 20%.

What is so funny about Dogecoin if anything? Will/should it be treated seriously someday? Let us dig into it.

The history behind a project is not what I usually write about in my articles. However, this case is exceptional and here is why.

8 amusing facts about Dogecoin’s creation

1. In 2013, seeing thousands of cryptocurrencies mushrooming every day, Jackson Palmer (Adobe software engineer) and Billy Markus (IBM software engineer) decided to create their own, not-so-serious currency.

“I found that there was a huge market with new coins coming out daily, and at times hourly, all touting how they were going to become worth zillions and take over the galaxy,” Markus said. “I thought it was silly and also thought that considering there were so many coming out, it was probably easy to make.”

2. Interestingly, Markus had already launched his own cryptocurrency by that time called Bells, following a guide he found online. It spectacularly failed.

3. It took just 3 hours to create Dogecoin. It was a find-and-replace job: Ctrl+F “Bitcoin”, replace with “Dogecoin”. Changing a few core elements in Bitcoin’s source code, Markus created 100 billion DOGE and made them easier to mine.

Source: Ross Nicoll’s blog

4. No Dogecoin was premined since only those who are serious about launching a cryptocurrency do this. It was not these guys’ story.

5. Markus even did not have a computer powerful enough to mine longer than 5 minutes. So, he split what he had mined 50/50 with Palmer (about $5,000 of DOGE), and that was it.

6. Still, the name Dogecoin echoed throughout dark corners of the internet. Reddit and its “tipping bot” drove Dogecoin into the stratosphere.

7. The Dogecoin frenzy is the reason Markus bailed on it in 2015.

“I don’t mind if someone spends $10 and gets some Dogecoin,” says Markus. “It’s like buying a movie ticket or something, that’s fun. But when someone puts $20,000 in? That makes me really, really uncomfortable.”

In his view, Dogecoin was a silly thing that should remain silly.

8. A bit later, the Moolah scandal pushed Palmer to quit Dogecoin, too. Today, a lead developer is Max Keller; others are Ross Nicoll and Patrick Lodder.

As you see, its founders do not hold back that Dogecoin was created as a lighthearted joke. However, despite this unusual origin story (or, maybe, thanks to it), Dogecoin has exploded in popularity in 2021 – as of writing, Dogecoin has become the 6th largest cryptocurrency by market cap.

What else?

For many years, Dogecoin has been just hanging around top 25-50 with zero development. It does not have any organization, venture capitalists, or DAO behind it. It is a fact that the cryptocurrency has not seen any major updates since 2015 (although it benefits from improvements to the Litecoin code).

On top of this, Dogecoin is extremely volatile and susceptible to random market movements. Those who bought Dogecoin to start 2021 have been well rewarded. Still, the constant flow of new coins onto the market put unending downward pressure on the coin’s value.

Pat White, CEO of Bitwave, also warned about additional security risks for Dogecoin, compared to other major cryptocurrencies.

“It just hasn’t had the same security and code-level scrutiny that Bitcoin or Ethereum has. Plus, there is just not a particularly robust mining community around Doge, so the exposure for a mining level attack is well above that of something like Bitcoin.”

Some traders will never be in DOGE no matter the gains because the largest Dogecoin address holds about 27% of the entire coin’s supply (34.9 billion DOGE or more than $1.2 billion), questioning its decentralization. In fact, just 5 wallets control 40% of the coin’s supply. Still, these addresses could be a cold storage for exchanges and the like.

Besides, Dogecoin does not have the speed of Ethereum or the dominance of Bitcoin. It does not have an extensive and well-funded ecosystem either. The only real catalyst behind its growth is its name and memes, which does not make for a sound “investment”.

Question: how has a joke currency overtaken Litecoin and briefly Tether? We will try to get to the bottom, but first let us define what Dogecoin is all about.

Being based on Luckycoin (which is, in turn, based on Litecoin), there are not any groundbreaking features that set Dogecoin apart from the pack. It was designed to be a friendly, more approachable form of cryptocurrency that could reach users put off by the cold complexity of Bitcoin.

The main thing that separates Dogecoin from most other cryptocurrencies is that it is inflationary rather than deflationary (meaning there is no lifetime cap on the number of Dogecoins created by mining).

However, being inflationary encourages users to spend Dogecoin, limiting its utility as a long-term store of value. Having bitcoin and Dogecoin on hand, sure thing people would not use Bitcoin as a currency as its scarcity gives it its worth.

One of the most common uses for Dogecoin today is as a tipping service. Users on social platforms like Reddit, Twitter, Facebook, and others, can use Dogecoin to reward, or “tip,” each other for posting content. Besides, Dogecoin is widely used for online payments and purchasing.

Anyway, the main asset of Dogecoin is not the technology behind it but the community that has built up around it. It has made extensive use of the currency for philanthropic purposes. For example, they helped in Kenya’s water crisis, raised money to help train assistance dogs for autistic children, sent the Jamaican Bobsled Team to the Sochi Winter Olympics, sponsored a NASCAR, etc.

You may wonder if this is enough for a cryptocurrency to become bigger than Ford Motor Co. and Kraft Heinz Co. in market value? Of course, not. There is more.

Of course, Elon Musk
Like everything else, Dogecoin’s price is heavily influenced by social media, especially if its primary PR manager is Elon Musk. Among many other tweets, he called Dogecoin his favorite cryptocurrency and promised that “SpaceX is going to put a literal Dogecoin to the literal moon”.

For example, his tweet on April 15th “Doge Barking at the moon” sent DOGE price soaring over 200% the next morning. The reason for such enthusiasm is not known. He may find this meme really hilarious, or he may have millions of DOGE in his portfolio and is doing everything he can to increase their value, or he just makes mockery of simple tweets effecting so much on the whole crypto industry. Be that as it may, the blind trust that millions of his followers have in him is noteworthy.

Reddit
As mentioned previously, the true value of Dogecoin lies in the strong and vibrant community that sprung up around it. R/Dogecoin now has over 1.5 million members and bears close resemblance to R/WallStreetBets.

The Reddit communities and the assets have interlinked relationships: as Dogecoin price keeps going up, it sparks more active conversation and interest on the Reddit forum, driving more investment in the crypto, which then helps push up prices further, repeating the cycle.

Crypto frenzy
Dogecoin is still relatively cheap, and people who may feel like they missed out on the upside of Bitcoin are thinking that perhaps this is their shot.

Companies actively use Dogecoin as payment
Dogecoin is now being accepted as a legitimate form of payment by many companies. The biggest ones so far are CoinFlip, NBA’s Dallas Mavericks, Post Oak Motor Cars, Kessler Collection, AirBaltic, and Newegg. This list continues with 1300+ places, stores, and services accepting Dogecoin.

Crypto exchanges
Many popular exchanges and platforms have Dogecoin listed: OKEX, Huobi, Binance, Kraken, Bitfinex, Coinbase.

Final thoughts

“Dogecoin to $1” is a meme, but as a cryptocurrency that has utility, strong branding, and is cheap enough for regular folks to afford a single unit of, Dogecoin may prove to be a force to be counted with. Moreover, if Amazon becomes DOGE friendly, then it is safe to say that the value might jump to $1.00 overnight.

Dogecoin currently has a 16.7% implied probability to be worth more than $1 at the end of 2021, according to betting aggregators US-Bookies com, a significant improvement from earlier this month, when it had just a 2.9% chance to do so.

“Dogecoin was made as a joke to make fun of cryptocurrencies, but fate loves irony. The most ironic outcome would be that Dogecoin becomes the currency of Earth in the future” (Elon Musk on Clubhouse)

Buying any sort of cryptocurrency, including Dogecoin, involves risk. Always do your own research prior to buying/selling any crypto.

Disclaimer: This is not financial advice, and I’m not an advisor. Please always do your own research.

W.O.W! (Words Of Wisdom)…

Enjoy Your Weekend!

The Clark Street Crew…