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Bob The Magic Custodian
Summary: Everyone knows that when you give your assets to someone else, they always keep them safe. If this is true for individuals, it is certainly true for businesses. Custodians always tell the truth and manage funds properly. They won't have any interest in taking the assets as an exchange operator would. Auditors tell the truth and can't be misled. That's because organizations that are regulated are incapable of lying and don't make mistakes. First, some background. Here is a summary of how custodians make us more secure: Previously, we might give Alice our crypto assets to hold. There were risks:
Alice might take the assets and disappear.
Alice might spend the assets and pretend that she still has them (fractional model).
Alice might store the assets insecurely and they'll get stolen.
Alice might give the assets to someone else by mistake or by force.
Alice might lose access to the assets.
But "no worries", Alice has a custodian named Bob. Bob is dressed in a nice suit. He knows some politicians. And he drives a Porsche. "So you have nothing to worry about!". And look at all the benefits we get:
Alice can't take the assets and disappear (unless she asks Bob or never gives them to Bob).
Alice can't spend the assets and pretend that she still has them. (Unless she didn't give them to Bob or asks him for them.)
Alice can't store the assets insecurely so they get stolen. (After all - she doesn't have any control over the withdrawal process from any of Bob's systems, right?)
Alice can't give the assets to someone else by mistake or by force. (Bob will stop her, right Bob?)
Alice can't lose access to the funds. (She'll always be present, sane, and remember all secrets, right?)
See - all problems are solved! All we have to worry about now is:
Bob might take the assets and disappear.
Bob might spend the assets and pretend that he still has them (fractional model).
Bob might store the assets insecurely and they'll get stolen.
Bob might give the assets to someone else by mistake or by force.
Bob might lose access to the assets.
It's pretty simple. Before we had to trust Alice. Now we only have to trust Alice, Bob, and all the ways in which they communicate. Just think of how much more secure we are! "On top of that", Bob assures us, "we're using a special wallet structure". Bob shows Alice a diagram. "We've broken the balance up and store it in lots of smaller wallets. That way", he assures her, "a thief can't take it all at once". And he points to a historic case where a large sum was taken "because it was stored in a single wallet... how stupid". "Very early on, we used to have all the crypto in one wallet", he said, "and then one Christmas a hacker came and took it all. We call him the Grinch. Now we individually wrap each crypto and stick it under a binary search tree. The Grinch has never been back since." "As well", Bob continues, "even if someone were to get in, we've got insurance. It covers all thefts and even coercion, collusion, and misplaced keys - only subject to the policy terms and conditions." And with that, he pulls out a phone-book sized contract and slams it on the desk with a thud. "Yep", he continues, "we're paying top dollar for one of the best policies in the country!" "Can I read it?' Alice asks. "Sure," Bob says, "just as soon as our legal team is done with it. They're almost through the first chapter." He pauses, then continues. "And can you believe that sales guy Mike? He has the same year Porsche as me. I mean, what are the odds?" "Do you use multi-sig?", Alice asks. "Absolutely!" Bob replies. "All our engineers are fully trained in multi-sig. Whenever we want to set up a new wallet, we generate 2 separate keys in an air-gapped process and store them in this proprietary system here. Look, it even requires the biometric signature from one of our team members to initiate any withdrawal." He demonstrates by pressing his thumb into the display. "We use a third-party cloud validation API to match the thumbprint and authorize each withdrawal. The keys are also backed up daily to an off-site third-party." "Wow that's really impressive," Alice says, "but what if we need access for a withdrawal outside of office hours?" "Well that's no issue", Bob says, "just send us an email, call, or text message and we always have someone on staff to help out. Just another part of our strong commitment to all our customers!" "What about Proof of Reserve?", Alice asks. "Of course", Bob replies, "though rather than publish any blockchain addresses or signed transaction, for privacy we just do a SHA256 refactoring of the inverse hash modulus for each UTXO nonce and combine the smart contract coefficient consensus in our hyperledger lightning node. But it's really simple to use." He pushes a button and a large green checkmark appears on a screen. "See - the algorithm ran through and reserves are proven." "Wow", Alice says, "you really know your stuff! And that is easy to use! What about fiat balances?" "Yeah, we have an auditor too", Bob replies, "Been using him for a long time so we have quite a strong relationship going! We have special books we give him every year and he's very efficient! Checks the fiat, crypto, and everything all at once!" "We used to have a nice offline multi-sig setup we've been using without issue for the past 5 years, but I think we'll move all our funds over to your facility," Alice says. "Awesome", Bob replies, "Thanks so much! This is perfect timing too - my Porsche got a dent on it this morning. We have the paperwork right over here." "Great!", Alice replies. And with that, Alice gets out her pen and Bob gets the contract. "Don't worry", he says, "you can take your crypto-assets back anytime you like - just subject to our cancellation policy. Our annual management fees are also super low and we don't adjust them often". How many holes have to exist for your funds to get stolen? Just one. Why are we taking a powerful offline multi-sig setup, widely used globally in hundreds of different/lacking regulatory environments with 0 breaches to date, and circumventing it by a demonstrably weak third party layer? And paying a great expense to do so? If you go through the list of breaches in the past 2 years to highly credible organizations, you go through the list of major corporate frauds (only the ones we know about), you go through the list of all the times platforms have lost funds, you go through the list of times and ways that people have lost their crypto from identity theft, hot wallet exploits, extortion, etc... and then you go through this custodian with a fine-tooth comb and truly believe they have value to add far beyond what you could, sticking your funds in a wallet (or set of wallets) they control exclusively is the absolute worst possible way to take advantage of that security. The best way to add security for crypto-assets is to make a stronger multi-sig. With one custodian, what you are doing is giving them your cryptocurrency and hoping they're honest, competent, and flawlessly secure. It's no different than storing it on a really secure exchange. Maybe the insurance will cover you. Didn't work for Bitpay in 2015. Didn't work for Yapizon in 2017. Insurance has never paid a claim in the entire history of cryptocurrency. But maybe you'll get lucky. Maybe your exact scenario will buck the trend and be what they're willing to cover. After the large deductible and hopefully without a long and expensive court battle. And you want to advertise this increase in risk, the lapse of judgement, an accident waiting to happen, as though it's some kind of benefit to customers ("Free institutional-grade storage for your digital assets.")? And then some people are writing to the OSC that custodians should be mandatory for all funds on every exchange platform? That this somehow will make Canadians as a whole more secure or better protected compared with standard air-gapped multi-sig? On what planet? Most of the problems in Canada stemmed from one thing - a lack of transparency. If Canadians had known what a joke Quadriga was - it wouldn't have grown to lose $400m from hard-working Canadians from coast to coast to coast. And Gerald Cotten would be in jail, not wherever he is now (at best, rotting peacefully). EZ-BTC and mister Dave Smilie would have been a tiny little scam to his friends, not a multi-million dollar fraud. Einstein would have got their act together or been shut down BEFORE losing millions and millions more in people's funds generously donated to criminals. MapleChange wouldn't have even been a thing. And maybe we'd know a little more about CoinTradeNewNote - like how much was lost in there. Almost all of the major losses with cryptocurrency exchanges involve deception with unbacked funds. So it's great to see transparency reports from BitBuy and ShakePay where someone independently verified the backing. The only thing we don't have is:
ANY CERTAINTY BALANCES WEREN'T EXCLUDED. Quadriga's largest account was $70m. 80% of funds are in 20% of accounts (Pareto principle). All it takes is excluding a few really large accounts - and nobody's the wiser. A fractional platform can easily pass any audit this way.
ANY VISIBILITY WHATSOEVER INTO THE CUSTODIANS. BitBuy put out their report before moving all the funds to their custodian and ShakePay apparently can't even tell us who the custodian is. That's pretty important considering that basically all of the funds are now stored there.
ANY IDEA ABOUT THE OTHER EXCHANGES. In order for this to be effective, it has to be the norm. It needs to be "unusual" not to know. If obscurity is the norm, then it's super easy for people like Gerald Cotten and Dave Smilie to blend right in.
It's not complicated to validate cryptocurrency assets. They need to exist, they need to be spendable, and they need to cover the total balances. There are plenty of credible people and firms across the country that have the capacity to reasonably perform this validation. Having more frequent checks by different, independent, parties who publish transparent reports is far more valuable than an annual check by a single "more credible/official" party who does the exact same basic checks and may or may not publish anything. Here's an example set of requirements that could be mandated:
First report within 1 month of launching, another within 3 months, and further reports at minimum every 6 months thereafter.
No auditor can be repeated within a 12 month period.
All reports must be public, identifying the auditor and the full methodology used.
All auditors must be independent of the firm being audited with no conflict of interest.
Reports must include the percentage of each asset backed, and how it's backed.
The auditor publishes a hash list, which lists a hash of each customer's information and balances that were included. Hash is one-way encryption so privacy is fully preserved. Every customer can use this to have 100% confidence they were included.
If we want more extensive requirements on audits, these should scale upward based on the total assets at risk on the platform, and whether the platform has loaned their assets out.
There are ways to structure audits such that neither crypto assets nor customer information are ever put at risk, and both can still be properly validated and publicly verifiable. There are also ways to structure audits such that they are completely reasonable for small platforms and don't inhibit innovation in any way. By making the process as reasonable as possible, we can completely eliminate any reason/excuse that an honest platform would have for not being audited. That is arguable far more important than any incremental improvement we might get from mandating "the best of the best" accountants. Right now we have nothing mandated and tons of Canadians using offshore exchanges with no oversight whatsoever. Transparency does not prove crypto assets are safe. CoinTradeNewNote, Flexcoin ($600k), and Canadian Bitcoins ($100k) are examples where crypto-assets were breached from platforms in Canada. All of them were online wallets and used no multi-sig as far as any records show. This is consistent with what we see globally - air-gapped multi-sig wallets have an impeccable record, while other schemes tend to suffer breach after breach. We don't actually know how much CoinTrader lost because there was no visibility. Rather than publishing details of what happened, the co-founder of CoinTrader silently moved on to found another platform - the "most trusted way to buy and sell crypto" - a site that has no information whatsoever (that I could find) on the storage practices and a FAQ advising that “[t]rading cryptocurrency is completely safe” and that having your own wallet is “entirely up to you! You can certainly keep cryptocurrency, or fiat, or both, on the app.” Doesn't sound like much was learned here, which is really sad to see. It's not that complicated or unreasonable to set up a proper hardware wallet. Multi-sig can be learned in a single course. Something the equivalent complexity of a driver's license test could prevent all the cold storage exploits we've seen to date - even globally. Platform operators have a key advantage in detecting and preventing fraud - they know their customers far better than any custodian ever would. The best job that custodians can do is to find high integrity individuals and train them to form even better wallet signatories. Rather than mandating that all platforms expose themselves to arbitrary third party risks, regulations should center around ensuring that all signatories are background-checked, properly trained, and using proper procedures. We also need to make sure that signatories are empowered with rights and responsibilities to reject and report fraud. They need to know that they can safely challenge and delay a transaction - even if it turns out they made a mistake. We need to have an environment where mistakes are brought to the surface and dealt with. Not one where firms and people feel the need to hide what happened. In addition to a knowledge-based test, an auditor can privately interview each signatory to make sure they're not in coercive situations, and we should make sure they can freely and anonymously report any issues without threat of retaliation. A proper multi-sig has each signature held by a separate person and is governed by policies and mutual decisions instead of a hierarchy. It includes at least one redundant signature. For best results, 3of4, 3of5, 3of6, 4of5, 4of6, 4of7, 5of6, or 5of7. History has demonstrated over and over again the risk of hot wallets even to highly credible organizations. Nonetheless, many platforms have hot wallets for convenience. While such losses are generally compensated by platforms without issue (for example Poloniex, Bitstamp, Bitfinex, Gatecoin, Coincheck, Bithumb, Zaif, CoinBene, Binance, Bitrue, Bitpoint, Upbit, VinDAX, and now KuCoin), the public tends to focus more on cases that didn't end well. Regardless of what systems are employed, there is always some level of risk. For that reason, most members of the public would prefer to see third party insurance. Rather than trying to convince third party profit-seekers to provide comprehensive insurance and then relying on an expensive and slow legal system to enforce against whatever legal loopholes they manage to find each and every time something goes wrong, insurance could be run through multiple exchange operators and regulators, with the shared interest of having a reputable industry, keeping costs down, and taking care of Canadians. For example, a 4 of 7 multi-sig insurance fund held between 5 independent exchange operators and 2 regulatory bodies. All Canadian exchanges could pay premiums at a set rate based on their needed coverage, with a higher price paid for hot wallet coverage (anything not an air-gapped multi-sig cold wallet). Such a model would be much cheaper to manage, offer better coverage, and be much more reliable to payout when needed. The kind of coverage you could have under this model is unheard of. You could even create something like the CDIC to protect Canadians who get their trading accounts hacked if they can sufficiently prove the loss is legitimate. In cases of fraud, gross negligence, or insolvency, the fund can be used to pay affected users directly (utilizing the last transparent balance report in the worst case), something which private insurance would never touch. While it's recommended to have official policies for coverage, a model where members vote would fully cover edge cases. (Could be similar to the Supreme Court where justices vote based on case law.) Such a model could fully protect all Canadians across all platforms. You can have a fiat coverage governed by legal agreements, and crypto-asset coverage governed by both multi-sig and legal agreements. It could be practical, affordable, and inclusive. Now, we are at a crossroads. We can happily give up our freedom, our innovation, and our money. We can pay hefty expenses to auditors, lawyers, and regulators year after year (and make no mistake - this cost will grow to many millions or even billions as the industry grows - and it will be borne by all Canadians on every platform because platforms are not going to eat up these costs at a loss). We can make it nearly impossible for any new platform to enter the marketplace, forcing Canadians to use the same stagnant platforms year after year. We can centralize and consolidate the entire industry into 2 or 3 big players and have everyone else fail (possibly to heavy losses of users of those platforms). And when a flawed security model doesn't work and gets breached, we can make it even more complicated with even more people in suits making big money doing the job that blockchain was supposed to do in the first place. We can build a system which is so intertwined and dependent on big government, traditional finance, and central bankers that it's future depends entirely on that of the fiat system, of fractional banking, and of government bail-outs. If we choose this path, as history has shown us over and over again, we can not go back, save for revolution. Our children and grandchildren will still be paying the consequences of what we decided today. Or, we can find solutions that work. We can maintain an open and innovative environment while making the adjustments we need to make to fully protect Canadian investors and cryptocurrency users, giving easy and affordable access to cryptocurrency for all Canadians on the platform of their choice, and creating an environment in which entrepreneurs and problem solvers can bring those solutions forward easily. None of the above precludes innovation in any way, or adds any unreasonable cost - and these three policies would demonstrably eliminate or resolve all 109 historic cases as studied here - that's every single case researched so far going back to 2011. It includes every loss that was studied so far not just in Canada but globally as well. Unfortunately, finding answers is the least challenging part. Far more challenging is to get platform operators and regulators to agree on anything. My last post got no response whatsoever, and while the OSC has told me they're happy for industry feedback, I believe my opinion alone is fairly meaningless. This takes the whole community working together to solve. So please let me know your thoughts. Please take the time to upvote and share this with people. Please - let's get this solved and not leave it up to other people to do. Facts/background/sources (skip if you like):
The inspiration for the paragraph about splitting wallets was an actual quote from a Canadian company providing custodial services in response to the OSC consultation paper: "We believe that it will be in the in best interests of investors to prohibit pooled crypto assets or ‘floats’. Most Platforms pool assets, citing reasons of practicality and expense. The recent hack of the world’s largest Platform – Binance – demonstrates the vulnerability of participants’ assets when such concessions are made. In this instance, the Platform’s entire hot wallet of Bitcoins, worth over $40 million, was stolen, facilitated in part by the pooling of client crypto assets." "the maintenance of participants (and Platform) crypto assets across multiple wallets distributes the related risk and responsibility of security - reducing the amount of insurance coverage required and making insurance coverage more readily obtainable". For the record, their reply also said nothing whatsoever about multi-sig or offline storage.
In addition to the fact that the $40m hack represented only one "hot wallet" of Binance, and they actually had the vast majority of assets in other wallets (including mostly cold wallets), multiple real cases have clearly demonstrated that risk is still present with multiple wallets. Bitfinex, VinDAX, Bithumb, Altsbit, BitPoint, Cryptopia, and just recently KuCoin all had multiple wallets breached all at the same time, and may represent a significantly larger impact on customers than the Binance breach which was fully covered by Binance. To represent that simply having multiple separate wallets under the same security scheme is a comprehensive way to reduce risk is just not true.
Private insurance has historically never covered a single loss in the cryptocurrency space (at least, not one that I was able to find), and there are notable cases where massive losses were not covered by insurance. Bitpay in 2015 and Yapizon in 2017 both had insurance policies that didn't pay out during the breach, even after a lengthly court process. The same insurance that ShakePay is presently using (and announced to much fanfare) was describe by their CEO himself as covering “physical theft of the media where the private keys are held,” which is something that has never historically happened. As was said with regard to the same policy in 2018 - “I don’t find it surprising that Lloyd’s is in this space,” said Johnson, adding that to his mind the challenge for everybody is figuring out how to structure these policies so that they are actually protective. “You can create an insurance policy that protects no one – you know there are so many caveats to the policy that it’s not super protective.”
The most profitable policy for a private insurance company is one with the most expensive premiums that they never have to pay a claim on. They have no inherent incentive to take care of people who lost funds. It's "cheaper" to take the reputational hit and fight the claim in court. The more money at stake, the more the insurance provider is incentivized to avoid payout. They're not going to insure the assets unless they have reasonable certainty to make a profit by doing so, and they're not going to pay out a massive sum unless it's legally forced. Private insurance is always structured to be maximally profitable to the insurance provider.
The circumvention of multi-sig was a key factor in the massive Bitfinex hack of over $60m of bitcoin, which today still sits being slowly used and is worth over $3b. While Bitfinex used a qualified custodian Bitgo, which was and still is active and one of the industry leaders of custodians, and they set up 2 of 3 multi-sig wallets, the entire system was routed through Bitfinex, such that Bitfinex customers could initiate the withdrawals in a "hot" fashion. This feature was also a hit with the hacker. The multi-sig was fully circumvented.
Bitpay in 2015 was another example of a breach that stole 5,000 bitcoins. This happened not through the exploit of any system in Bitpay, but because the CEO of a company they worked with got their computer hacked and the hackers were able to request multiple bitcoin purchases, which Bitpay honoured because they came from the customer's computer legitimately. Impersonation is a very common tactic used by fraudsters, and methods get more extreme all the time.
A notable case in Canada was the Canadian Bitcoins exploit. Funds were stored on a server in a Rogers Data Center, and the attendee was successfully convinced to reboot the server "in safe mode" with a simple phone call, thus bypassing the extensive security and enabling the theft.
The very nature of custodians circumvents multi-sig. This is because custodians are not just having to secure the assets against some sort of physical breach but against any form of social engineering, modification of orders, fraudulent withdrawal attempts, etc... If the security practices of signatories in a multi-sig arrangement are such that the breach risk of one signatory is 1 in 100, the requirement of 3 independent signatures makes the risk of theft 1 in 1,000,000. Since hackers tend to exploit the weakest link, a comparable custodian has to make the entry and exit points of their platform 10,000 times more secure than one of those signatories to provide equivalent protection. And if the signatories beef up their security by only 10x, the risk is now 1 in 1,000,000,000. The custodian has to be 1,000,000 times more secure. The larger and more complex a system is, the more potential vulnerabilities exist in it, and the fewer people can understand how the system works when performing upgrades. Even if a system is completely secure today, one has to also consider how that system might evolve over time or work with different members.
By contrast, offline multi-signature solutions have an extremely solid record, and in the entire history of cryptocurrency exchange incidents which I've studied (listed here), there has only been one incident (796 exchange in 2015) involving an offline multi-signature wallet. It happened because the customer's bitcoin address was modified by hackers, and the amount that was stolen ($230k) was immediately covered by the exchange operators. Basically, the platform operators were tricked into sending a legitimate withdrawal request to the wrong address because hackers exploited their platform to change that address. Such an issue would not be prevented in any way by the use of a custodian, as that custodian has no oversight whatsoever to the exchange platform. It's practical for all exchange operators to test large withdrawal transactions as a general policy, regardless of what model is used, and general best practice is to diagnose and fix such an exploit as soon as it occurs.
False promises on the backing of funds played a huge role in the downfall of Quadriga, and it's been exposed over and over again (MyCoin, PlusToken, Bitsane, Bitmarket, EZBTC, IDAX). Even today, customers have extremely limited certainty on whether their funds in exchanges are actually being backed or how they're being backed. While this issue is not unique to cryptocurrency exchanges, the complexity of the technology and the lack of any regulation or standards makes problems more widespread, and there is no "central bank" to come to the rescue as in the 2008 financial crisis or during the great depression when "9,000 banks failed".
In addition to fraudulent operations, the industry is full of cases where operators have suffered breaches and not reported them. Most recently, Einstein was the largest case in Canada, where ongoing breaches and fraud were perpetrated against the platform for multiple years and nobody found out until the platform collapsed completely. While fraud and breaches suck to deal with, they suck even more when not dealt with. Lack of visibility played a role in the largest downfalls of Mt. Gox, Cryptsy, and Bitgrail. In some cases, platforms are alleged to have suffered a hack and keep operating without admitting it at all, such as CoinBene.
It surprises some to learn that a cryptographic solution has already existed since 2013, and gained widespread support in 2014 after Mt. Gox. Proof of Reserves is a full cryptographic proof that allows any customer using an exchange to have complete certainty that their crypto-assets are fully backed by the platform in real-time. This is accomplished by proving that assets exist on the blockchain, are spendable, and fully cover customer deposits. It does not prove safety of assets or backing of fiat assets.
If we didn't care about privacy at all, a platform could publish their wallet addresses, sign a partial transaction, and put the full list of customer information and balances out publicly. Customers can each check that they are on the list, that the balances are accurate, that the total adds up, and that it's backed and spendable on the blockchain. Platforms who exclude any customer take a risk because that customer can easily check and see they were excluded. So together with all customers checking, this forms a full proof of backing of all crypto assets.
However, obviously customers care about their private information being published. Therefore, a hash of the information can be provided instead. Hash is one-way encryption. The hash allows the customer to validate inclusion (by hashing their own known information), while anyone looking at the list of hashes cannot determine the private information of any other user. All other parts of the scheme remain fully intact. A model like this is in use on the exchange CoinFloor in the UK.
A Merkle tree can provide even greater privacy. Instead of a list of balances, the balances are arranged into a binary tree. A customer starts from their node, and works their way to the top of the tree. For example, they know they have 5 BTC, they plus 1 other customer hold 7 BTC, they plus 2-3 other customers hold 17 BTC, etc... until they reach the root where all the BTC are represented. Thus, there is no way to find the balances of other individual customers aside from one unidentified customer in this case.
Proposals such as this had the backing of leaders in the community including Nic Carter, Greg Maxwell, and Zak Wilcox. Substantial and significant effort started back in 2013, with massive popularity in 2014. But what became of that effort? Very little. Exchange operators continue to refuse to give visibility. Despite the fact this information can often be obtained through trivial blockchain analysis, no Canadian platform has ever provided any wallet addresses publicly. As described by the CEO of Newton "For us to implement some kind of realtime Proof of Reserves solution, which I'm not opposed to, it would have to ... Preserve our users' privacy, as well as our own. Some kind of zero-knowledge proof". Kraken describes here in more detail why they haven't implemented such a scheme. According to professor Eli Ben-Sasson, when he spoke with exchanges, none were interested in implementing Proof of Reserves.
And yet, Kraken's places their reasoning on a page called "Proof of Reserves". More recently, both BitBuy and ShakePay have released reports titled "Proof of Reserves and Security Audit". Both reports contain disclaimers against being audits. Both reports trust the customer list provided by the platform, leaving the open possibility that multiple large accounts could have been excluded from the process. Proof of Reserves is a blockchain validation where customers see the wallets on the blockchain. The report from Kraken is 5 years old, but they leave it described as though it was just done a few weeks ago. And look at what they expect customers to do for validation. When firms represent something being "Proof of Reserve" when it's not, this is like a farmer growing fruit with pesticides and selling it in a farmers market as organic produce - except that these are people's hard-earned life savings at risk here. Platforms are misrepresenting the level of visibility in place and deceiving the public by their misuse of this term. They haven't proven anything.
Fraud isn't a problem that is unique to cryptocurrency. Fraud happens all the time. Enron, WorldCom, Nortel, Bear Stearns, Wells Fargo, Moser Baer, Wirecard, Bre-X, and Nicola are just some of the cases where frauds became large enough to become a big deal (and there are so many countless others). These all happened on 100% reversible assets despite regulations being in place. In many of these cases, the problems happened due to the over-complexity of the financial instruments. For example, Enron had "complex financial statements [which] were confusing to shareholders and analysts", creating "off-balance-sheet vehicles, complex financing structures, and deals so bewildering that few people could understand them". In cryptocurrency, we are often combining complex financial products with complex technologies and verification processes. We are naïve if we think problems like this won't happen. It is awkward and uncomfortable for many people to admit that they don't know how something works. If we want "money of the people" to work, the solutions have to be simple enough that "the people" can understand them, not so confusing that financial professionals and technology experts struggle to use or understand them.
For those who question the extent to which an organization can fool their way into a security consultancy role, HB Gary should be a great example to look at. Prior to trying to out anonymous, HB Gary was being actively hired by multiple US government agencies and others in the private sector (with glowing testimonials). The published articles and hosted professional security conferences. One should also look at this list of data breaches from the past 2 years. Many of them are large corporations, government entities, and technology companies. These are the ones we know about. Undoubtedly, there are many more that we do not know about. If HB Gary hadn't been "outted" by anonymous, would we have known they were insecure? If the same breach had happened outside of the public spotlight, would it even have been reported? Or would HB Gary have just deleted the Twitter posts, brought their site back up, done a couple patches, and kept on operating as though nothing had happened?
In the case of Quadriga, the facts are clear. Despite past experience with platforms such as MapleChange in Canada and others around the world, no guidance or even the most basic of a framework was put in place by regulators. By not clarifying any sort of legal framework, regulators enabled a situation where a platform could be run by former criminal Mike Dhanini/Omar Patryn, and where funds could be held fully unchecked by one person. At the same time, the lack of regulation deterred legitimate entities from running competing platforms and Quadriga was granted a money services business license for multiple years of operation, which gave the firm the appearance of legitimacy. Regulators did little to protect Canadians despite Quadriga failing to file taxes from 2016 onward. The entire administrative team had resigned and this was public knowledge. Many people had suspicions of what was going on, including Ryan Mueller, who forwarded complaints to the authorities. These were ignored, giving Gerald Cotten the opportunity to escape without justice.
There are multiple issues with the SOC II model including the prohibitive cost (you have to find a third party accounting firm and the prices are not even listed publicly on any sites), the requirement of operating for a year (impossible for new platforms), and lack of any public visibility (SOC II are private reports that aren't shared outside the people in suits).
Securities frameworks are expensive. Sarbanes-Oxley is estimated to cost $5.1 million USD/yr for the average Fortune 500 company in the United States. Since "Fortune 500" represents the top 500 companies, that means well over $2.55 billion USD (~$3.4 billion CAD) is going to people in suits. Isn't the problem of trust and verification the exact problem that the blockchain is supposed to solve?
To use Quadriga as justification for why custodians or SOC II or other advanced schemes are needed for platforms is rather silly, when any framework or visibility at all, or even the most basic of storage policies, would have prevented the whole thing. It's just an embarrassment.
We are now seeing regulators take strong action. CoinSquare in Canada with multi-million dollar fines. BitMex from the US, criminal charges and arrests. OkEx, with full disregard of withdrawals and no communication. Who's next?
We have a unique window today where we can solve these problems, and not permanently destroy innovation with unreasonable expectations, but we need to act quickly. This is a unique historic time that will never come again.
Two Prime, under the radar coin worth looking into.
Two Prime has released their FF1 MacroToken. "We show how this methodology can be applied as an Open Source application, in the vein of BTC and ETH, with all the creative and value generative potential that comes along with it. We leverage store of value functions of cryptocurrencies to arrive at value creation and accretion in the real economy by the intermediary of crypto exchanges on which we propose to provide protective measures. We detail treasury and reserve formation for the Open Source Finance Foundation, describe its relation to Two Prime and detail the emission of a new crypto-asset called the FF1 Token. We seek liquidity for the FF1 treasury within the secondary exchanges for the purpose of applying M4 in the real world, both in the private and public sector. We first apply this to the vertical of cryptocurrencies while outlining the genericity and stability of the model which we indeed to apply to esoteric financial needs (e.g. Smart City financing). In so doing, we extend the scope and control of applications that a system of digital units of value stored on decentralized, public ledgers can aim to advance. We call this approach Open Source Finance and the resulting coin class a MacroToken. MODERN MONETARY THEORY FRAMEWORKModern Monetary Theory states two interdependent phenomenological axioms and the banking system operates on a resulting syllogism:
Axiom 1: in discounted cash flow analysis (axiom 1a), 0 = 1 and (axiom 1b) 1 = 1..N.
Axiom 2: Government possesses, de facto, exclusive, and perpetual right of use of Axiom 1a for Ab-Initio Money(M0) monetary creation (FIAT M0).
Syllogism 3: The creation of AssetBackedM oney(M4) is a consequence of these two axioms. The banking system creates BACKED M4 with debt-backed cash flows of type 1b: 1 = N with N ⇡ 1. Add equity to these cash flows (e.g. project finance) and you create a return of type 1 = N with N 1 or axiom1b. FIAT currencies are therefore designed to be accretive with possibility of fluctuation.
In the past 10 years, the formation and emergence of BTC and ETH has verifiably falsified Axiom 2 . The phenomenon of crypto-currencies has created ab-initio global stores of value of type 1a. Cryptoc Currencies have displaced trust by means of government violence and associated, implied violence, with instead, open source distribution, cloud computing, objective mathematics, and the algorithmic integrity of blockchain ledgers. The first “killer app” of these open source ledgers areis stores of value, e.g. Bitcoin, or “open source money” as it was first characterized by its semi-anonymous creators. Leading crypto-currencies have proven themselves as viable global stores of value. They are regulated as Gold is in the United States. However, as type 1a units of value, they have tended towards high volatility inevitably leading to speculative market behavior and near 0 “real” asset-” backing or floor price , albeit with an aggregate value of $350bn ab-initio creation. We therefore advance Axiom 2 to Axiom 2’
Axiom 2’: (spoken “Two Prime” and the reason for the company name): ab-initio value creation (type 1a) and Macro Token (type 1b) can reside outside of national powers and central banking, e.g. in Open Source Finance.
At N < 1 we have dilutive debasement of fungible units of value, aka inflation. At 1, the new monies are therefore stable coins. At N > 1, these tokens are designed to grow with demand. Axiom Two Prime (or 2’) displaces government endorsed violence as our macro-socio organizing principle, with algorithmic objectivity and verifiable transparency. This occurs within the landscape we call Open Source Finance. THE TWO PRIME MODEL Two Prime refers to the financial management company managing the OSFF. FF1 refers to the Macro Token of the OSFF. The first stage is reserve and treasury formation, the second stage describes the mechanics of the public markets and the protective measures of the reserves and third stage is treasury liquidity via the Continuous Token Offering both in public and private markets. We will now describe these in more detail. MACRO INVESTMENT THESIS AND RATIONALE FOR FF1The FF1 MacroToken is a synthetic token based on the proven killer applications of Cryptoc-Currencies. After 110 years since the inception of the blockchain technology, the killer apps of crypto are already here and they are primarily all financial, not technical. The historical killers apps are:
Transnational Store of Value: Crypto-Currencies display a robust and transnational store-of-value function. Many crypto professionals today use the blockchain as their international bank. They maintain balances and pay with internet-based open source ledgers (a.k.a crypto). They find local FIAT liquidity on local exchanges. They speculate in crypto on global exchanges. The paradox of Axiom 1a is that in the absence of any backing the value of these stores of value is determined solely via exchanges, pure supply and demand mixed with sentiment. Their volatility is a side-effect of their lack of anchoring.
Capital Formation: Crypto-Currencies have proved very adept at capital formation both on flow and stock. The days of the ICO, where hundreds of millions of (crypto) dollars were raised seemingly overnight, need to be reborn as the Phænix from its ashes. However, the ICO faltered at capital allocation, wasting proceeds on tech no one needed and lavish parties, resulting in non accretion (N = 0.07)
Fractional Asset- Backing and Stablec Coins: Stable coins are tokens that are backed by existing assets. The first and best known example of a stable coins is Tether, which has a 60% backing ratio. We credit the crypto rally of 2017 to the conjunction of ICOs and stable coins. These instruments also have something to say to banking infrastructure. Witness the political backlash to Facebook’s Libra or the efforts of the Bank of China launching it’s own Central Bank Digital Currency. It should be noted that FIAT in the west is born as a fractionally asset- backed instrument (N = 0.07 or Basel III ratios) and matures, over time to (N > 1), as a super-backed instrument.
The FF1 MacroToken is a pot-pourri of these features, a synthetic token that mixes the best of breed practices of crypto mixing Store-of-Value, Capital Formation and Fractional Asset-Backing. MACRO INVESTMENT THESIS AND RATIONALE FOR FF1Treasury Generation: Ab-Initio Store of Value On the supply side, The OSFFTwo Prime has created is creating 100, 000, 000 FF1 Macro Tokens, which it keeps in treasury. They are pure stores of value for they have no assets backing them at birth. They are ab-initio instruments. The FF1 Macro Tokens are listed on public crypto exchanges. Two Prime manages operates market- making for these stores of value. Treasury Management: Supply- Side Tokenomics All FF1 are held in the Open Source Finance Foundation treasury. Crypto aAssets that enter into treasury are, at first, not traded. The FF1 supply will be offered upon sufficient demand. which Two Prime generates publicly and privately. The total supply will be finite in total units (100, 000, 000), but variable in its aggregate value for supply and demand will make the price move. The proceeds are the property of the OSFF (not Two Prime) and Two Prime places invests the liquid treasury (post FF1 liquidation) in crypto assets to protect against depreciation and create a macro-hedge reserve andor floor for the price. It should be noted that the price and the NAV of assets are, by design, not equal. In other words, the additional OSFF treasury is locked and can enter circulation if, and only if, there is a corresponding demand which is then placed invested in crypto assets with a target value N 1. This results in fractional asset- backing at first. EXCHANGES, CONTINUOUS TOKEN OFFERING, AND DEMAND- SIDE TOKENOMICSPublic Exchanges Two Prime will maintain listings for the FF1 Tokens on behalf of the OSFF. Two Prime maintains market- making operations in public crypto exchanges on behalf of the OSFF. Continuous Token Offering Two Prime works on creating new liquidity for the FF1 Macro Tokens to comply with the supply side constraints detailed above, namely that a token enters circulation when matched by demand. Two Prime does demand generation in public as above as well as private. This CTO results in something akin to a reverse-ICO, letting the reserves be set by public trading and then marketing to private purchasers investors (accredited US for example) after the public liquidity event. Demand generation is done via marketing to relevant audiences, e.g. as a macro way to HODL with exclusive private equity investments for crypto holders, and as a diversified and de-risked way to gain crypto exposure for FIAT holders (Sharpe ratio: 1.55, Beta to BTC: 0.75). PARTNER NETWORK, USE OF PROCEEDS, ACCRETION AND FLOOR PROTECTIONThough this mathematical approach allows for a broad and differentiated set of financial applications and outcomes, Two Prime founding Members will first apply this work to the realm of project finance within the Blockchain space via algorithmic balancing of an equity and debt based treasury consisting of real crypto assets and future cash flows. Proof of Value Mining in Partner Network Funds and projects can apply to the foundation for financing. This is the partner network and is akin to the way a network of miners secure the chain. Here a network of partners protects the value. The Foundation invests the proceeds in liquid crypto assets, interest bearing crypto assets and equity crypto assets via partner funds, creating a bridge to the real economy (crypto companies) in the last step. The foundation holds these (real economic) assets. M4 Asset Mix The funds raised are invested in public and private sector projects. We consider the following mix
Up To 30% cash and cash equivalents including crypto products (HODL)
Up To 30% debt and bonds. Including crypto products (Staking HODL)
Up To 30% deep tech including Fund of Funds
Up To 30% discretionary allocation including back to reserves.
This completes the M4 step and the flow of funds for the FF1 Token. It shows a feedback loop, for the Foundation can buy back it’s token, leading to an idiosyncratic tokenomics: the FF1 Token has a fixed (and potentially diminishing) SUPPLY alongside (potentially increasing) endogenous and exogenous DEMAND." This seems pretty interesting imo, thoughts?
WSB101 - THE BOOK OF YOLO: BEGINNERS GUIDE TO TRADING LIKE A DEGENERATE AND EVERYTHING WSB
The Book of Yolo: COMPLETE GUIDE TO WSB The goal of this is to actually create something that all of you WSB newbies can read - because we’re all tired of seeing the endless wave of uninformed and unavoidable stupidity from those who have never touched the stock market. CALLING ALL NEWFAGS AND NORMIES. If you can’t read, GFY now. Now that we will be on the popular section of reddit, this has become pertinent. WSB can't avoid newcomers, so we might as well explain how the clock ticks here. This one is for you all. This is to serve as a reference what values we hold, what instruments we use, and as a general place to educated the uneducated. First off, this is the LEAST helpful stock market-based community for newcomers. Sarcastic answers are the only thing of true value here. It isn't a place to learn, but a place to plan out where you will dock your yacht. Newcomers are usually berated upon asking the inevitable stupid questions that they could learn slowly from reading here, or just using a damn search engine. Instead of embarrassing yourself here, you now have the opportunity to read this and get what we’re all rambling about. This will help you understand what to expect if you make the decision to undertake a WSB style trading career, so you can stay here and contribute to the yolo lifestyle or otherwise GFY. I will edit in any suggestions that our frequenting users or mods want to add to this as well. To begin: Here are our topics for WSB101 -Basics (Equities/Stocks) ; -ETF's ; -Options ; -Futures Trading ; -SubCulture ; BASICS/EQUTIES Skip if you understand basic stock stuff Okay, so what is an equity/stock? An equity is essentially what you’d think of as your “vanilla” trading tool. They move up or down depending on market forces, and can range from pennies to thousands of dollars per share. To explain how stocks work, let's define a few terms. Volume: The number of shares of stock traded during a particular time period, normally measured in average daily trading volume. Spread: The difference between the bid and the ask price Bid Price: The current price in which someone wants to buy at Ask Price:The current price in which someone wants to sell at Volatility: The WSB favorite. Volatility is referring to the price movements of a stock as a whole. The higher the volatility, the more the stock is moving up or down. Highly volatile stocks are ones with extreme daily up and down movements and wide intraday trading ranges. Margin: A margin account lets a person borrow money (take out a loan essentially) from a broker to purchase an investment. The difference between the amount of the loan, and the price of the securities, is called the margin. Margin is one of WSB’s popular instruments of wealth and destruction. Dividend: This is a portion of a company’s earnings that is paid to shareholders, or people that own hat company’s stock, on a quarterly or annual basis. Not all companies do this. PPS: Acronym for “Price per Share” Moving Average: A stock’s average price-per-share during a specific period of time. Bullish: Expecting the stock to go up Bearish: Expecting the stock to go down Any raised hands can redirect themselves to here: http://www.investopedia.com/articles/investing/082614/how-stock-market-works.asp?ad=dirN&qo=investopediaSiteSearch&qsrc=0&o=40186 Now that these terms are defined, let's move into the details of why this is even useful. Most people know what a stock is, but how and why stocks move is a different story. The stock market is essentially a big virtualization of supply and demand - meaning that usually high positive volume creates upwards movement in the PPS, where high negative volume does the opposite. This creates a trader’s opportunity; Generally, the most effective time to buy or sell is where the candlesticks (volume data) are thinning out. When you are ready to take an entry point or execute an exit point, waiting till the volatility (candlesticks) thin out is one method to give you best trade possible. WSB FAVORITE EQUITIES: Of many equities, WSB favors the riskier ones - but avoiding penny stocks is a policy. AMD - CEO Lisa Su, Next Gen Processors, chips, graphics. It’s the gamers gambit. Up roughly 1400% as of 2/7/2017 since WSB first mentioned it NVDA - AMD’s sister? Mother? Daddy? Who knows. NVDA has been a sexy semiconductor leader. Is up 400% since gaining traction on WSB. FNMA / pfds - Mnunchin, Trump, Big fat fannies. Get your self deep in the fannie. We all want it. WSB 10 bagger candidate for reforming the housing market. WSB holds a large cumulative position that can be seen below. Also a good read is the beginners guide to FNMA. Any post by u/NOVACPA is very often VERY informative on FMNA/pfds. https://www.reddit.com/wallstreetbets/comments/5oissp/results_wsb_fnmafmcc_holdings https://www.reddit.com/wallstreetbets/comments/5t7gba/beginngers_guide_to_fnma_fmcc_read_this_before/ ARRY - A biotech champion that prevailed after a lot of failures and huge losses in the biotech sector. Dark times for WSB. Up ~300% since getting traction on the subreddit. TWTR - WSB likes to buy put option contracts on her. Exemplary of a social media platform that is unable to monetize itself. TSLA - Maybe not unanimously a favorite, but loved for it’s sexy volatility, Elon Musk, and ridiculously expensive options. GILD - A Shkreli pump and dump? The greatest large cap pharma recovery of all time? Who knows. Martin took the time to make a post on this reddit and it is up $5 dollars since. ETF'S Welcome to the world of investing made easy. Exchange traded funds (etfs) are devices that can be traded like stocks, but often track the value of many companies by investing in their listed assets accordingly. Specifically, An ETF, or exchange traded fund, is a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund. Unlike mutual funds, an ETF trades like a common stock on a stock exchange. ETFs experience price changes throughout the day as they are bought and sold. ETFs typically have higher daily liquidity and lower fees than mutual fund shares, making them an attractive alternative for individual investors. ETF’s come in beautiful and delicious varieties, often with a BEAR form and a BULL form of each; but the most delicious to WSB are the 3x etf’s. A 3x ETF is one in which the underlying movement of the ETF is leveraged 3:1. Meaning for every movement within the underlying index or stocks, the 3x ETF moves well.... 3x as much.. WSB FAVORITE AND USEFUL ETF’S: JNUG - 3x Gold Miner Bull - A hit or miss, has extreme intraday movements and essentially tracks GDX (gold miner’s index). Jnug will usually move with a pretty strong correlation to gold, which is affected by the mentioning of rate hikes (negatively), movement of the US dollar (inversely), uncertainty (positively), and supply and demand. NUGT - Jnug with a different price tag JDST - The inverse 3x etf of JNUG - or the bear etf. It does almost exactly the opposite movements of JNUG by the tick. Moves for the same reasons, but obviously opposite directions. DUST - Jdst with a different price tag. UGAZ - Natural Gas 3x Bull ETF - essentially tracks the price value of the commodity Natural Gas, but more specifically the S&P GSCI Natural Gas Index ER. The index comprises futures contracts on a single commodity and is calculated according to the methodology of the S&P GSCI Index. Natural gas is most affected by Weather temperature conditions (use your brain), petroleum prices, and broader economic conditions. DGAZ - Inverse of UGAZ UWT - Crude Oil Bull 3x ETF - extreme intraday movements, closely follows the price of oil. More specifically, it tracks futures. UWT seeks to replicate, net of expenses, three times of the S&P GSCI® Crude Oil Index ER. The index tracks a hypothetical position in the nearest-to-expiration NYMEX light sweet crude oil futures contract, which is rolled each month into the futures contract expiring in the next month. The value of the index fluctuates with changes in the price of the relevant NYMEX light sweet crude oil futures contracts. DWT - Inverse of UWT FAS - Financial Bull, specifically FAS seeks daily investment results, before fees and expenses, of 300% of the performance of the Russell 1000 ® Financial Services Index. The fund creates long positions by investing at least 80% of its assets in the securities that comprise the Russell 1000 ® Financial Services Index and/or financial instruments that provide leveraged and unleveraged exposure to the index. Can be used when bullish on US financial services - so banks, lenders, etc. FAZ - Inverse of FAS UPRO - S&P500 Bull 3x ETF, essentially tracks the S&P500 and multiplies it’s returns by 3x. BRZU - Tracks Brazil (in its most basic form). It creates long positions in the MSCI Brazil 25/50 Index. LABU - Tracks the Biotech sector, or specifically 300% of the performance of the S&P Biotechnology Select Industry Index ("index"). It should be noted that LABU has doubled since just before the election of Donald Trump. LABD - Inverse of LABU RUSL - roughly creates 300% of the performance of the MVIS Russia Index. RUSS - Inverse of RUSL SPY - Tracks the S&P500, but is not 3x. OPTIONS: Alright, so half you are going to understand this, and half of you are not. Pull up an options chain now on any stock (penny stocks and specific stocks do not have chains because of their market cap). Options are truly the ultimate way to achieve maximum risk/reward. An option is a contract that gives the buyer the right to buy or sell 100 shares of a stock at a certain price, on a certain date. This concept makes options a commodity themselves. KEY TERMS: A CALL - is the right to buy. Buying calls is taking a bullish position in its most extreme form. A PUT - is the right to sell. The underlying - is the stock that the option is covering i.e. AAPL, GOOG, AMZN Strike Price - the price at which a put or call option can be exercised. ITM, In the money - In the money means that a call option's strike price is below the market price of the underlying asset or that the strike price of a put option is above the market price of the underlying asset. Being in the money does not mean you will profit, it just means the option is worth exercising. OTM, Out of the money - a call option with a strike price that is higher than the market price of the underlying asset, or a put option with a strike price that is lower than the market price of the underlying asset. ATM - At the money - Strike price at the same price as the underlying Expiration - Expiries for options are every friday of every week usually, with exceptions such as every month, or every other day - depending on the underlying. SPY and SPX are great examples of very active option chains with expiries every other day. On the expiry date or any time before (with american options), an option can be, but doesn’t have to be exercised, meaning the holder of the option can use it to buy or sell shares of the underlying stock at the strike price. Most people on WSB do not exercise the contracts, but merely flip them for increases in value as the underlying moves. For example, when AAPL was at 120 before its earnings report, Joe Shmoe Yolo buys 10 FEB 17th CALLS at strike 127 for .60 , each. Now .60 cents is really 60 dollars each, because the contract is multiplied by 100 (the right to 100 shares). In total, Joe Shmoe Yolo spends $600 dollars + commision on this trade. The next day, AAPL leaps to 130 upon great news. These same option contracts are now worth 3.50 each. $350 dollars per contract, times ten contracts is $3500 dollars. Joe Shmoe Yolo just turned $600 into $3500 dollars. MAGIC. Spoiler alert: Joe Shmoe Yolo was me. That same Joe Shmoe later buys FEB 17th XOM calls at 90, hoping for similar results. However, XOM ends up never reaching anywhere close to the strike price, and the options expire worthless. Get it? Now what determines the pricing of options? OPTION PRICING: Below is sourced from investopedia Intrinsic Value: The intrinsic value is the actual value of a company or an asset based on an underlying perception of its true value including all aspects of the business, in terms of both tangible and intangible factors. This value may or may not be the same as the current market value. Additionally, intrinsic value is primarily used in options pricing to indicate the amount an option is in the money. Time Value: Time Value = Option Price - Intrinsic Value. The more time an option has until it expires, the greater the chance it will end up in the money. The time component of an option decays exponentially. The actual derivation of the time value of an option is a fairly complex equation. As a general rule, an option will lose one-third of its value during the first half of its life and two-thirds during the second half of its life. This is an important concept for securities investors because the closer you get to expiration, the more of a move in the underlying security is needed to impact the price of the option. Time value is basically the risk premium that the option seller requires to provide the option buyer the right to buy/sell the stock up to the date the option expires. It is like an insurance premium of the option; the higher the risk, the higher the cost to buy the option. Makes sense, right? Time value is determined by the expiration date. An expiration date in derivatives is the last day that an options contract is valid. When investors buy options, the contracts gives them the right but not the obligation, to buy or sell the assets at a predetermined price, called a strike price, within a given time period, which is on or before the expiration date. If an investor chooses not to exercise that right, the option expires and becomes worthless, and the investor loses the money paid to buy it. Volatility: In an options pricing, you see IV. This stands for implied volatility. The higher that is, the higher the options will be priced Volatility is the extent to which the return of the underlying asset will fluctuate between now and the option's expiration. Volatility, as expressed as a percentage coefficient within option-pricing formulas, arises from daily trading activities. How volatility is measured will affect the value of the coefficient used. Decaying Nature of Options: Decay refers to derivative trading (i.e. options). When you sell or buy a call/put (using those two for simplicity purposes) you don't get an infinite time frame to make your dreams come true. Time is your enemy; the further out the expiration date, the less time decay there is. Time decay really hits the worst the week of expiration. Sound confusing? Say you're buying options of the stock WSB (I hope you're seeing what I did there) - and the option costs $1, the expiration is this Friday. Say today is Monday. You buy a call expecting WSB to take you to the moon and beyond. Each day the stock doesn't move closer to your strike price or remains stagnant/drops, you lose value on your option + the time decay. Meaning if it finishes closer to your strike price, your option could be worthless because of that time decay. Questions? Ask away. A great example of these factors in action is TSLA. TSLA’s options are among the most expensive for companies in its price range, why? An in the money TSLA call expiring this week is worth around $1100 per contract. Insanely expensive. But for a reason. TSLA has extreme intraday movements and calls have an implied volatility of 40.92%. Which is fairly high. In addition to that, it holds high intrinsic value / price per share, and a week of time value. -Futures 101 - The Ultimate YOLO Guide (thanks to u/IncendiaryGames) Okay, a lot of you have been YOLOing on faggot delights on SPY options. How would you like to trade something with the same or more leverage, 1.0 delta, and no time premium costs? Have you considered futures? What are futures? Unlike options, futures is a contract where both the buyer and seller is obligated to perform the transaction by the expiration. Conversely, in options, only the seller is obligated to perform. That means you can lose more than your investment. Originally they were used by farmers to sell future crops early and guarantee some amount of sales. Since then futures have expanded not just to commodities but currency and equity indices like the S&P 500. Why the heck would I want to trade futures? Here are the advantages: Leverage $5k is the margin requirement for most contracts. For example with the E-mini S&P 500 with 5k you're trading $120k worth of stuff. 1 contract = 500 spy shares. Some brokers offer intraday daytrading margin rates too - TD Ameritrade is 25% of the overnight margin rate($1,250.) Some brokers go as low as $500 an /ES future. SPAN Margin If 24x overnight leverage and 240x day trade leverage didn't give you a hard on there is also SPAN margin, which is like portfolio margin on steroids. The beauty of SPAN margin is you don't need a $125k+ account to be eligible. SPAN will greatly reduce your margin requirements if you hold uncorrelated or inversely correlated positions (up to an 80% discount, here is a list of groups that give discounts) and if you hedge with options. Hedge with the right option or asset and now you have up to 500x day trading margin. 23/7 and day trading Ever get in and out of an equity only to have your broker yell at you to stop doing that or deposit $25k? There is no pattern day trading restrictions on futures. Feel free to day trade and blow up your account as often as you want! You can also trade 23 hours a day. Get trading on how the S&P 500 index will react to news from China right away. Taxes No matter how long or how short you hold you always get taxed under the 60/40 rule. 60% of your profit from futures will be taxed as a long term gain and 40% will be taxed as short term gain. No wash sales. Trade your hearts out. Just remember holding past Dec 31st will treat you as if you closed all your positions that day and you'll be taxed on unrealized gains. Long/Short No need to pay interest or borrow shares as being short a future contract is being a writer, just like an options writer. Options Of course there are options. What fun would it be without options? Unlike stock options each contract gives different number of future contracts. Research what you're trading. Ok. I'm convinced. I want to strat trading futures! What are some good strategies? YOLO Strategies Swing trading Trying to guess/predict/ride sudden market momentum. A low volume average day in the S&P 500 (/ES) for one contract can swing +- $500. Get it right and you can see a huge appreciation of value. /ES is usually highly liquid during regular hours with average volume of 1 million trades and usually bid-ask spreads of one tick. One approach is to buy or short in your direction and put in a stop loss to an amount you're comfortable to lose (say $200.) Since it's so liquid you'll likely be filled at or near your stop loss during the day if your trade goes against you. If you can guess the direction 50% of the time and have trades like this: trade 1 - gain $800 trade 2 - lose $200 Then you may profit over the time period. If you have a 50% chance of being wrong and losing $200 or 50% chance of being right and gaining $800 then over time you'll gain more than you lose. Also, since the present value of your futures contract is included in your margin calculation then if it goes strongly in your favor your position can quickly grow to cover its own margin and you can let it ride for a while. You'll want to be sure you enter a combo buy/short order along with a stop loss order simultaneously, like this for Thinkorswim. Futures can move suddenly and a sudden movement can make you lose a ton of money. Exploiting outdated SPAN margin guidelines There are several out of date correlations between popular futures like oil and say things like wheat that SPAN gives you margin credits on. Take whatever position you want in oil (/cl) then take the opposite in something that doesn't move much day to day with less volatility such as /w (wheat)) and your /cl and /w positions will get a 75% credit, giving you 50% more buying power on crude oil. (2 positions * .25 = 0.5). Trade your heart out on the more volatile future then when you're done close your safer future pair. SPAN is constantly changing but such a complex system definitely has its exploits. Automated/algorithmic trading For you programmer geeks out there it's really hard to algorithmic trade on small accounts due to pattern day trading rules and economies of scale with broker fees. Futures is probably the best way to get your feet wet. Join us on /algotrading if you want to explore more! Boring safer strategies I'm including these for completeness but these belong on /investing. Scalping With high frequency trading scalping is less guaranteed. Basically scalping is using tiny momentum as usually there are small micro patterns in futures buying and selling activity where it will rise or fall a couple of ticks. Since the notional value of each tick is $12.5 it's profitable for retail investors and small accounts to act as a market maker after fees at the smallest bid-ask spread possible. Spreads Just like you can trade spreads in options, you can trade calendar spreads in futures. Futures have contracts with different expiration dates and the prices are different for each month of expiration based on the market's expectations. You can go long or short the near month expiration and the opposite for the far month. This will hedge out any sudden market moves as that would likely affect both months. Bull markets in general tend to increase the price of the near month faster than the far month. Basically with a spread trade you're making a long term bet on bull or bear for the underlying future. Pairs trading You can go long in one future say the dow jones (/ym) and short the S&P 500 index and profit off the relative growth. This is a hedged trade as any market ups or downs will likely affect both positions with the same % value. For the past 180 days /ym - /es has been really profitable. Even if you don't do a full perfect pairs trade it is still a great option to reduce the leverage too on whatever index future you're trading so you can stay in longer or overnight. Interest rate and optimal leverage plays Since the $5k investment is equal to $120k of the S&P 500 index currently then you'll likely beat out the market by buying one future contract and putting $115k in safe treasuries or bonds or uncorrelated assets. Some people choose to leverage their stock portfolio and you can get the exact leverage ratio of liquid investments to future ratios. In probability theory the max leverage you can gain is determined by the Kelly Criterion which modeling shows indicates the S&P 500 index to be leveraged to 1.40x. Yes, you could do the same with options but even on SPY deep in the money call leaps are illiquid and have a time premium. Even today they are so deep ITM that the options you would need to use have 0 open interest and a bid-ask spread of $5 per share (so $500 per contract.) You'd need ~5 contracts per 120k so you're already eating $2.5k/$120k - 2% interest rate a year for that leverage. SPX isn't better, it's bid ask is 22 so you'd be eating $2.2k/$120k - 1.83% interest rate. It's doubtful you won't get much past the ask as its only market makers providing liquidity and guess what the market maker will do if you buy/sell the option? They will hedge with the underlying futures until their minimum profit is the risk free interest rate. Hedging Going long and short in various non correlated or negatively correlated assets to seek out a high sharpe ratio and have a higher risk free return that is market neutral. Basic hedge fund stuff. The variety and price efficiency of futures makes things pretty attractive in this area. SUBCULTURE Wallstreetbets is a community that has become infamous for the most wild west, moon or cardboard box trades on the planet earth. WSB is a place where you can take out thousand dollar loans, refinance your homes, cash advance all of your credit cards only to put it all on JNUG, and we will still love you. Your mother won't. Your father will never understand your spectrum of autism, but we will always love you. It is a uniquely beautiful community focused on praising its biggest losers as much as its biggest winners. To begin on the subculture, we should define some key moments in the sub's history. HISTORY: (As made by u/digadiga) + my additions 2012: Jartek [+1] creates /wallstreetbets, and word slowly starts to ooze out. 2013: americanpegasus discovers pennies. AP has seen the light, and is a penny stock evangelist. Jartek & AP have an epic options vs pennies battle - they both lose a couple of hundred bucks, but we are entertained, and WSB is officially born. AP blows up his retirement, swears off pennies and moves onto bitcoins. 2014: fscomeau [+3] discovers options. He repeatedly bets five figures on AAPL calls before earnings. FS claims a supernatural clairvoyance of AAPL. FS then posts about his chest pains and ER visits. He finally suffers an epic loss. Is he dead? Is he alive? Is he is mother? Is he banned? Who cares? 2015: Photos from the 3rd annual meetup are posted. Where a bunch of dudes hang out on the romantic beaches of Guerrero Mexico. In a completely unrelated event, the wsb banner is changed to thousands of ejaculating dicks. Modpocalypse occurs. Hundreds of random users are added as moderators for a few months. None of the new mods can change the CSS. The constant whining about how "wsb isn't what it used to be" continues. Someone attempts to show how selling covered calls is idiot proof, but gets lazy, bets all six figures on Apple, and suffers significant losses. Robinhood gets popular. Should you buy one share of AMZN or one share of GOOGL? Who gives a fuck. 2016: Everyone starts saying "go fuck yourself." Except me. Because I am what I am. And if you don't like it, you can all go fuck yourselves. u/World_Chaos performs one of the more impressive yolo's of the sub, starting with 900 dollars, and turning it into 55k. https://www.reddit.com/wallstreetbets/comments/414blh/yofuckinglo_900_to_55k_in_12_days/?ref=share&ref_source=link 2017: u/fscomeau preforms what he calls "The Final Yolo", a 300k trade against AAPL before earnings (that I, u/thor303456 inversed), supposedly supposed to net fscomeau 2.5 million or so, in which he will finally stop trading. FSC is featured on several market related articles and newspapers, showing up on yahoo, etc. Later we find proof during his livestream of AAPL earnings that he was paper trading. Even later, FSC writes a near 200 page book called "Wolfie Has Fallen" describing how he trolled the entire internet, some following him into that AAPL trade. Martin Shkreli visits the sub and proclaims that GILD pharma is worth over $100 a share and is deeply undervalued. KEY FIGURES: Donald J Trump - He is the Marmalade Manchurian, the Tangerine Tycoon, and our spray tan Stalin. Unbelievable night of election. WSB demographics show a primarily capitalist and right wing (or at least joking to be so) point of view, and thus we are generally pro trump. In actuality though, WSB is focused on pro-market, which Trump happens to be. u/Jartek - Founder of the sub, original yoloer. Believe he has retired from reddit for the most part. Mostly inactive. u/Fscomeau - The Canadian as some call him, and perhaps one of the most profound internet trolls of 2016-2017. A French-Canadian trader who deals with mostly options. The man has been called "The Great Inverse", and for a good reason. Nearly all of the trades or statements he made on WSB were completely wrong or mostly wrong. Truly the strongest technical indicator. Martin Shkreli - An idol to many WSBers, Martin stands as the master of the biotech sector. A very debated character for very stupid reasons. Martin regularly tweets about the stock market, occasionally does a youtube channel, and livestreams fairly regularly. u/theycallme1 - Educated trader, and mod of WSB. Roasts people often and roasts them good. Ask him the questions that aren't stupid. One of the most active mods. u/world_chaos - some fucking college student with some real net worth. Sits on 100k or so (needs verification), and was an inspiring yoloer to all, with his 900 to 55k yolo with options. Lingo, Terminology, and Nomenclature: The Faggots Delights - Truly the most suicidal, yet clearest shot to the moon. This term is usually used to define either weekly, or daily option plays on the SPY/SPX. Some users trade them very profitably, such as u/MRPguy and many in the past. Cuck - Truly the worst thing you could be. A cuck is a man who likes watching his wife/girlfriend fuck other guys. Weak, spineless, and a term often throw around here. The YOLO - You only live once. This is something that is, and should be realized as undeniably true. Why are you sitting on a 5k emergency fund that is making you less interest in a year than what I just made in 10 minutes? Why haven't you used all of the credit on your 5 credit cards or used your testicles as collateral for a loan yet? YOLO or YOLOING is as much a psychological decision to embrace absurdism, and win with everything you have while risking it all. Yolo is what it means to be a WSB trader. Bagholding or a Bagholder - When you're stuck with the most ass trade of your life, because you know it'll go back up. A bagholder is the 59 year old guy at the grocery store who won't quit his Job because he knows he only has to wait another year until he gets a return on his investment (of his life). Anyone holding SUNEQ is the definition of a bagholder. Autists - Something we embrace, something we call each other, something we all are. Autism isn't used in an offensive way as much as it is a generally accepted term that defines us. The best traders have autism because of their distance from emotion. I bet you never made it to this part of the reading because you're such a damn autist. Tendies - Tendies are what you get after you make a small amount of money. "I SOLD AMD TODAY FOR A $13 DOLLAR PROFIT, GOING TO MCD's TO GET MY TENDIES". Tendie money is usually shameful and insignificant, but at least it got you tendies. Chicken tenders at McDonalds are the least expensive for the most cholesterol. I know some of the writing was half ass, full of errors, or otherwise not the best explanation. But I believe this will serve its purpose, and maybe help to promote new ideas from moderately educated traders. WSB has very strong traders, and the most uniquely risky trading styles on the planet. Hopefully this can serve to better the overall community. You guys are all faggots, upvote this so we can get the noobs to stop trying to bite on our cocks. Also I'd really appreciate input on anything to add to this overall. It took my over 3 hours to write up, so I eventually grew tired and probably have missing spots. Enjoy your time here at WSB. EDIT: Added a shit ton of stuff, fixed errors. THANKS FOR ALL OF YOUR INPUT, ACTUALLY MAKING WSB GREAT AGAIN MODS: Can we make this editable by others mods or something? My fingers aren't enough. Seems like this could serve as a good "official" thing. Paging u/theycallme1u/CHAINSAW_VASECTOMY etc
Among the more frequently mentioned G+ alternatives at the Google+ Mass Migration community, and others, is MeWe with over 250 mentions. The site bills itself as "The Next-Gen Social Network" and the "anti-Facebook": "No Ads, No Political Bias, No Spyware. NO BS. It is headed by professed Libertarian CEO Mark Weinstein. As the site reveals no public user-generated content to non-members, it's necessary to create an account in order to get a full impression. I thought I'd provide an overview based on recent explorations. This report leads of with background on the company, though readers may find the report and analysis of specific groups on the site of interest.
Founder & CEO Mark Weinstein. Co-Founder & Chief Scientist, Jonathan Wolfe (no longer with company). Weinstein previously founded SuperFamily and SuperFriends, "at the turn of the millennium". Weinstein's MeWe biography lists articles published by The Mirror (UK), Huffington Post, USA Today, InfoSecurity Magazine, Dark Reading, and the Nation. His media appearances include MarketWatch, PBS, Fox News, and CNN. He's also the author of several personal-success books. His Crunchbase bio is a repeat of the MeWe content.
Sir Tim Berners-Lee: Inventor of the World Wide Web.
Jack Canfield: Legendary Founder, Chicken Soup For The Soul.
John Friedman: Founding Partner, Easton Capital.
Cullen Hoback: Director, Terms and Conditions May Apply.
Dianne Morrison: Partner, MorrisonMcNabb, LLC.
Colin Sebastian: Director, Equity Research/Internet, RW Baird.
Brett Shevack: CEO, Brand Initiatives; Former Vice Chair, BBDO.
Marci Shimoff: author, Happy for No Reason.
Sherry Turkle: Professor, MIT; author Alone Together.
Ownership & Investment
MeWe is the dba of Sgrouples, a private for-profit early-stage venture company based in Los Angeles, though with a Mountain View HQ and mailing address, 11-50 employees, with $10m in funding over five rounds, and a $20m valuation as of 2016. Sgrouples, Inc., dba MeWe Trust & Safety - Legal Policy c/o Fenwick West 801 California Street Mountain View, CA 94041 Crunchbase Profile. Founded: 2012 (source) Secured $1.2M in seed funding in 2014. 2016 valuation: $20m (source] Backers:
John Friedman, venture capitalist, founder & MD, Easton Capital, New York, NY.
Do you have friends still on Facebook? Share this link with them about Facebook wanting their banking information - tell them to move to MeWe now! No Ads. No Spyware. No Political Agenda. No Bias Algorithms. No Shadow Banning. No Facial Recognition.
MeWe provide several policy-related links on the site:
California Disclosures -- Do Not Track, 3rd-party cookies, and California Privacy Rights.
Your Identity: We protect it to the extent the law allows
Linking to Third-Party Sites: These are your decisions and responsibilities
Security: HTTPS and Encryption
Terms of Service
The ToS addresses:
Allowable Content and Acceptable Use
Who Our Services are For
User Content Ownership
Misuse of Usernames, Page names, Group names
Fake Accounts (pseudonyms allowed, misleading is not)
More on Spam
Our Commitment to Data Security
MeWe Content Data
MeWe Log Data
Your Data Portability
Deleting Your Account -- Right to Erasure
MeWe Secret Chat
MeWe Invitations and "Add Automatically"
Additional Policies for Pages, Groups, and Events Notifications of Requests for Account Information
Guidelines for Law Enforcement Seeking Customer Data (Worldwide)
Ownership In and To the Site and Services
Effective: November 6, 2018.
The FAQ addresses:
What is MeWe (emphasises privacy)
The Politics of MeWe ("absolutely no political agenda")
How can MeWe be free and make money? (additional services/freemium)
Which devices is MeWe available on? (Android, iOS)
What content can I share on MeWe (photos, videos, documents, voice messages, privacy mail, chats, gifs, memes, doodles)
What are some unique features of MeWe?
Who can see the posts I share?
Can I delete my MeWe account and is it easy to do this?
This emphasises that people are social cratures and private people by right. The service offers the power of self expression under an umbrella of safety. It notes that our innermost thoughts require privacy. Under "We aspire...":
MeWe is here to empower and enrich your world. We challenge the status quo by making privacy, respect, and safety the foundations of an innovatively designed, easy-to-use social experience.
Totalling 182 words.
Privacy Bill of Rights
A ten-item statement of principles (possibly inspired by another document, it might appear):
You own your personal information & content. It is explicitly not ours.
You will never receive a targeted advertisement or 3rd party content based on what you do or say online. We think that's creepy.
You see every post in timeline order from your friends, family & groups. We do not manipulate, filter, or change the order of your content or what you see.
Permissions & privacy are your rights. You control them.
You control who can access your content.
You control what, if anything, others can see in member searches.
Your privacy means we do not share your personal information with anyone.
Your emojis are for you and your friends. We do not monitor or mine your data.
Your face is your business. We do not use facial recognition technology.
You have the right to delete your account and take your content with you at any time.
There are a few mentions of MeWe in the press, some listed on the company's website, others via web search.
The following articles are linked directly from MeWe's Press page:
The page also lists a "Privacy Revolution Required Reading" list of 20 articles all addressing Facebook privacy gaffes in the mainstream press (Wired, TechCrunch, Fortune, Gizmodo, The Guardian, etc.). There are further self-reported mentions in several of the company's PR releases over the years.
Facebook Alternative MeWe Raises $5.2M, Los Angeles Business Journal (July 7, 2018) "The latest round, as well as MeWe’s total $10 million in fundraising, was predominantly backed by celebrity investors, such as author Marci Shimoff, Rachel Roy, and Lynda Weinman, founder of Lynda.com, which sold to Linkedin in 2015 for $1.5 billion. Jack Canfield, creator of the “Chicken Soup for the Soul” book series, also invested in MeWe."
Is building a Facebook alternative worth the effort? MeWe thinks soVentureBeat (July 5, 2018) "[T]here are still companies hoping to make their mark in the social networking realm with “Facebook alternatives.” One of those is MeWe, a “next-generation” social network that positions itself as the anti-Facebook: “Your private life is not for sale. No ads. No Spyware. No BS,” its website proclaims." Continues to mention "modest $5.2 million" funding round. Also a "sister product", MeWePRO, a Slack competitor.
Startup MeWe Launches Free, 'No Ads' Social NetworkeWeek (March 16, 2016) "MeWe, a new network engineered with its users' data privacy built in, is betting that a lot of people will say yes to both of those questions. The Mountain View, Calif.-based startup, whose parent company is Sgrouples.com, launched its freely available social network out of beta March 9 with more than 200,000 members already using it.... Sir Tim Berners-Lee, co-architect of the World Wide Web, found out about MeWe on his own and approached the company about getting involved."
Facebook Alternative MeWe closes $5.2M Series A Yahoo/PR Newswire (July 5, 2018). "The investment brings MeWe's total funding to $10 million, to support the engineering of MeWe and the enterprise version MeWePRO.... The company has relied on high net worth individuals for all of its funding including Lynda Weinman, founder of Lynda.com ...; Marci Shimoff, a #1 New York Times bestselling author ...; Rachel Roy...; and Jack Canfield."
Exactis Data Leak 2018: 340 Million Records ExposedInvestorPlace (June 29, 2018) "'Today's cookies can link your mobile phone to your laptop, to your home monitoring devices, and much, much more. Creepy? Scary? Orwellian? Yes, yes, yes,' Mark Weinstein, the privacy expert and founder of social media company MeWe, told MarketWatch. 'So imagine that Exactis, like Facebook, knows everything about you — really.'"
MeWe Raises $3M in FundingFinSMEs (March 9, 2016) "Sgrouples, Inc., the Mountain View, CA-based developer of MeWe, a social network with neither ads nor tracking, raised $3m in funding."
This section is a basic rundown of the user-visible site technology.
The site is not natively accessible from a mobile Web browser as it is overlayed with a promotion for the mobile application instead. Selecting "Desktop View" in most mobile browsers should allow browser-based access.
There are both Android and iOS apps for MeWe. I've used neither of these, though the App store entries note:
MeWe Android 4.4 rating (13.1k ratings). Permissions: Contacts (read), Location (approximate/precise), SMS (receive), Phone (read status & identity), Photos/Media/Files (read, modify, & delete contents), Storage (read, modify, or delete), Camera (take pictures/videos), Microphone (record audio), Device ID & Call Info (read status & identity), and numerous elements under Other.
Crunchbase cites 209,220 mobile downloads over the past 30 days (via Apptopia), an 80.78% monthly growth rate, from Google Play.
Either selecting "View Desktop" or navigating with a Desktop browser to https://www.mewe.com your are presented with a registration screen, with the "About", "Privacy Bill of Rights", "MeWe Challenge", and a language selector across the top of the page. Information requested are first and last name, phone or email, and a password. Pseudonymous identities are permitted, though this isn't noted on the login screen. Returning members can use the "Member Log In" button. The uMatrix Firefox extension reveals no third-party content: all page elements are served from mewe.com, img.mewe.com, cdn.mewe.com, or ws.mewe.com. (In subsequent browsing, you may find third-party plugins from, for example, YouTube, for videos, or Giphy, for animated GIFs.) The web front-end is nginx. The site uses SSL v3, issued by DigiCert Inc. to Sgrouples, Inc.
The onboarding experience is stark. There is no default content presented. A set of unidentified icons spans the top of the screen, these turn out to be Home, Chats, Groups, Pages, and Events. New users have to, somehow, find groups or people to connect with, and there's little guidance as to how to do this.
Generally there is a three panel view, with left- and right-hand sidebars of largely navigational or status information, and a central panel with main content. There are also pop-up elements for chats, an omnipresent feature of the site. Controls display labels on some devices and/or resolutions. Controls do not provide tooltips for navigational aid.
My Cloud - Seamlessly organize all your content in My Cloud; it's your personal cloud. My Cloud offers an interactive dashboard for you to control everything you’ve posted or shared - making it simple to delete or reshare.
Unique profiles - Be yourself, free from any tracking and spying. Customize your profile for every group you create or join.
Voice integration (on any or all content) - Post pictures, videos, or documents and include a voice message. Respond to a shared post or just chat. MeWe’s voice integration works for you and your contacts throughout the entire platform.
Universal tagging - This is a new, convenient way to sort and organize all the content you receive and share, making it easy to find everything, anytime.
Enhanced permission control (patent issued) - Manage permissions on a granular level and decide exactly who sees what. You can also remove yourself from the search directory, make yourself invisible to other members online, and much more.
Much More – join MeWe today and take a look inside! MeWe is the next-gen social networking experience designed for you to have fun, stay in touch, collaborate, organize, and simplify.
A key aspect of any social network is its community. Some of the available or ascertained information on this follows.
Weinstein claims a "million+ following inside MeWe.com" on Twitter. The largest visible groups appear to have a maximum of around 15,000 members , for "Awesome gifs". "Clean Comedy" rates 13,350, and the largest open political groups, 11,000+ members. This compares to Google+ which has a staggering, though Android-registrations-inflated 3.3 billion profiles, and 7.9 million communities, though the largest of these come in at under 10 million members. It's likely that MeWe's membership is on the whole more more active than Google+'s, where generally-visible posting activity was limited to just over 9% of all profiles, and the active user base was well under 1% of the total nominal population.
MeWe do not publish active users (e.g., MUA / monthly active users) statistics.
MeWe is principally a group-oriented discussion site -- interactions take place either between individuals or within group contexts. Virtually all discovery is group-oriented. The selection and dynamics of groups on the site will likely strongly affect user experience, so exploring the available groups and their characteristics is of interest. "MeWe has over 60,000 open groups" according to its FAQ. The Open groups -- visible to any registered MeWe user, though not to the general public Web -- are browsable, though sections and topics must be expanded to view the contents: an overview isn't immediately accessible. We provide a taste here. A selection of ten featured topics spans the top of the browser. As I view these, they are:
Health & Fitness
Cars & Motorcycles
Fashion and Beauty
Specific groups may appear in multiple categories. The top Groups within these topics have, variously, 15,482, 7,738, 15,482 (dupe), 7,745, 8,223, 8,220, 1,713, 9,527, 2,716, and 1,516 members. Listings scroll at length -- the Music topic has 234 Groups, ranging in size from 5 to 5,738 members, with a median of 59, mean of 311.4, and a 90%ile of 743.5. Below this is a grid of topics, 122 in all, ranging from Activism to Wellness, and including among them. A selected sample of these topics, with top groups listed members in (parens), follows:
Activism: QAnon+++ (2,572), PATRIOT PREPPERS USA (2,430), Deplorables Republic (2,48), The War Drummer (1,898), Patriots for a United America. (1894), Anonymous (1,700).
Alternative Energy: Reiki, Crystals, and alternative healing (2,114), 💜Starseeds & Empaths💜 (345), Living in Colour (365).
Alternative Lifestyle: Natural Healing and Home Remedies (3,045), Backyard Farming of All Things (2,696), WeTheSheeple (2,251).
Alumni Connections: Google Plus Refugees (271), Google+ Refugees (186), Frog Pond (156), Carlsbad NM High School alumni (57).
Animals: I Love My Dog (4,421), Pussy Shots (4,619).
Astronomy: Spherical Earth Truth, Flat Earth is Wrong (278), Nibiru, Nemesis, Hercolobus, The Destroyer (187).
Biology: Trees (344), Field of Birds (104), Patriots of Australia (51).
Personal Improvement: For Introverts. (1,214), Anarchy, Philosophy, Psychology, and Spirituality (679), Positive Affirmations (447).
Philosophy: In5d Esoteric Metaphysical and Spiritual Database (1,764), Thought Bouncing (1,137), Obtectivists - Galts Gulch - Ayn Rand fans (561).
Poetry: Dead Poest (1,407), Palacio de Poetry (451), Poets Corner (412).
Politics: Donald J. Trump 2016 - Present (11,486), The Conservative's Hangout (8,345), Qanon Follow The White Rabbit (5,600), Drain The Swamp (4,978), Libertarians (4,528), United We Stand Trump2020 (4,216).
Pop Culture: The Loftus Party (116), The Walking Dead: The Stalking Dead (100), Tyler, Texas (71).
Privacy: Join the Open/Privacy Movement (3974), Kingsport tn gun trader (1,157), Safer Computing (555).
To be clear: whilst I've not included every topic, I've sampled a majority of them above, and listed not an arbitrary selection, but the top few Groups under each topic.
Google Plus expats (1,862)
Google+ Refugees (186)
G+ Refugees (101)
my Google+ expatriates
The Google Plus expats group seems the most active of these by far.
It's curious that MeWe make a specific point in their FAQ that:
At MeWe we have absolutely no political agenda and we have a very straightforward Terms of Service. MeWe is for all law-abiding people everywhere in the world, regardless of political, ethnic, religious, sexual, and other preferences.
There are 403 political groups on MeWe. I won't list them all here, but the first 100 or so give a pretty clear idea of flavour. Again, membership is in (parentheses). Note that half the total political Groups memberships are in the first 21 groups listed here, the first 6 are 25% of the total.
Donald J. Trump 2016 - Present (11486)
The Conservative's Hangout (8345)
Qanon Follow The White Rabbit (5600)
Drain The Swamp (4978)
United We Stand Trump2020 (4216)
The Right To Self Defense (3757)
Alternative Media (3711)
Hardcore Conservative Patriots for Trump (3192)
Bastket Of Deplorables4Trump! (3032)
Return of the Republic (2509)
Infowars Chat Room Unofficial (2159)
Donald Trump Our President 2017-2025 (2033)
Berners for Progress (1963)
Sean Hannity Fans (1901)
The American Conservative (1839)
I Am The NRA (1704)
Tucker Carlson Fox News (1645)
We Love Donald Trump (1611)
MAGA - Make America Great Again (1512)
news from the front (1337)
Basket of Deplorables (1317)
Payton's Park Bench (1283)
Convention of States (1282)
Britons For Brexit (1186)
MoJo 5.0 Radio (1180)
MeWe Free Press (1119)
The Constitutionally Elite (1110)
WOMEN FOR PRESIDENT TRUMP (1032)
AMERICANS AGAINST ISIS and OTHER ENEMIES (943)
#WalkAway Campaign (894)
ALEX JONES (877)
The Lion Is Awake ! (854)
We Support Donald Trump! (810)
The Stratosphere Lounge (789)
TRUMP-USA-HANDS OFF OUR PRESIDENT (767)
Official Tea Party USA (749)
Mojo50 Jackholes (739)
Yes Scotland (697)
"WE THE DEPLORABLE" - MOVE ON SNOWFLAKE! (688)
Judge Jeanine Pirro Fans (671)
Ted Cruz for President (650)
No Lapdog Media (647)
Q Chatter (647)
Daily Brexit (636)
Tucker Carlson Fox News (601)
The Trumps Storm Group (600)
QAnon-Patriots WWG1WGA (598)
100% American (569)
Ladies For Donald Trump (566)
Deep State (560)
In the Name of Liberty (557)
Material Planet (555)
Trump NRA Free Speech Patriots on MeWe Gab.ai etc (546)
Magna Carta Group (520)
Constitutional Conservatives (506)
Question Everything (503)
Conspiracy Research (500)
Bill O'Reilly Fans (481)
Conservative Misfit's (479)
Canadian politics (478)
HARDCORE DEPLORABLES (454)
Tampa Bay Trump Club (445)
UK Politics (430)
Bongino Fan Page (429)
Radical Conservatives (429)
RESIST THE RESISTANCE (419)
The Deplorables (409)
America's Freedom Fighters (401)
Politically Incorrect & Proud (399)
CONSERVATIVES FOR AMERICA ! (385)
Political satire (383)
RISE OF THE RIGHT (371)
UK Sovereignty,Independence,Democracy -Everlasting (366)
The Patriots Voting Coalition (359)
End The Insanity (349)
Coming American Civil War! (345)
Constitutional Conservatives (343)
United Nations Watch (342)
A Revival Of The Critical Thinking Union (337)
The New Libertarian (335)
Libertarian Party (official ) (333)
DDS United (Duterte Die-hard Supporters) (332)
American Conservative Veterans (331)
America Needs Donald Trump (326)
The UKIP Debating Society (321)
Coalition For Trump (310)
FRIENDS THAT LIKE JILL STEIN AND THE GREEN PARTY (292)
2nd Amendment (287)
Never Forget #SethRich (286)
Green Party Supporters 2020 (283)
It seems there is relatively little representation from the left wing, or even the centre, of the political spectrum. A case-insensitive match for "liberal" turns up:
104: Conservatives Against Liberal Beliefs C.A.L.I.B (273)
184: Progressive and Liberal Politics (119)
301: Liberalism is a Mental Disorder (33)
302: Resistance Against Liberal Socialism (33)
358: NOT For Liberals (17)
367: Drinking Liberally Houston (14)
400: Stephanie Miller's Sexy Liberal Army (6)
Mainstream political parties are little represented, though again, the balance seems skewed searching on "(democrat|republic|gop)":
391: Saving The Republic: Video News & Opinion (8)
The terms "left" and "right" provide a few matches, not all strictly political-axis aligned:
7: The Right To Self Defense (3757)
80: RISE OF THE RIGHT (371)
150: POLITICS ON THE LEFT (156)
157: 1st Amendment Rights Protected By The 2nd Amendmen (141)
209: On The Left With Jeremy Corbyn (84)
262: Eyes-Left Labour & PP - Social Media (49)
300: Gather Left (33)
385: Defend Washington State Gun Rights (9)
390: Left Coast Conservatives (8)
Socialism and Communism also warrant a few mentions:
121: Revolutionary Socialists United (204)
216: Socialist Thought (79)
220: Stories Of Communism (76)
262: Eyes-Left Labour & PP - Social Media (49)
288: Snuggly Wuggly Socialists (38)
302: Resistance Against Liberal Socialism (33)
And there are some references to green, laboulabor parties:
97: FRIENDS THAT LIKE JILL STEIN AND THE GREEN PARTY (292)
100: Green Party Supporters 2020 (283)
262: Eyes-Left Labour & PP - Social Media (49)
320: Green Party of Ohio Issues & Discussion Group (29)
Whilst there may not be a political agenda, there does appear to be at least a slight political bias to the site. And a distinctive skew on many other topical subjects. Those seeking new homes online may wish to take this into account.
Various typos and tagging corrections. 2018-11-29 - 30
Added G+MM references count for MeWe to lede paragraph. 2018-12-2
Our blog has a longer post on the subject, but the ultimate answer is that GPU mining is very insecure. For the vast majority of GPU mined coins out there (including Sia), it is the case that there are multiple, if not many, individuals who operate enough GPUs to execute a 51% attack against the coin all by themselves. There are some very large Ethereum GPU farms out there, and they are a threat to all small GPU-mined coins. (our market cap is a factor of 50 smaller than Ethereum - we are a small coin). And it's not just Ethereum farms to be afraid of, there are massive GPU farms dedicated to machine learning as well, and other big-data related use cases. All of those are potential sources for a 51% attack. Even worse, if the price of the coin tanks following such an attack, the attacker has nothing to lose, because the core purpose of their hardware is unrelated to Sia, and unaffected by a change in price. Though it sounds terrible and unintuitive, a single centralized entity running ASICs would be a much more secure situation than this. Because with a single central ASIC entity, you get two huge advantages:
There's only 1 entity capable of performing a 51% attack. This is much better than having multiple entities that are each individually capable of performing a 51% attack.
If the price of the coin falls, the entity that has all of the hardware loses a lot of money. That hardware isn't good for anything besides Sia mining, so that entity is quite invested in propping up the siacoin price.
We chose ASICs over GPUs because even the worst case scenario is more secure and better for the coin than the situation with GPU mining. But we also did not want a single entity owning and operating all of the ASICs. That's when we realized, if we were ASIC manufacturers ourselves, we could guarantee that at least one entity is selling chips to the larger community. The unfortunate fact is that either way, there is going to be a small number of chip manufacturers who have the power to sell chips to the community. Even so, this is a better situation than what you get with GPU mining. We are making ASICs so that we can guarantee the first batch of ASICs will make it to the Sia community. Without that, we have no idea if the first batch of ASICs will be sold to the public or hoarded by some greedy investors who were able to pay the full price of manufacturing up-front.
Why are you doing the presale so early?
We, put simply, don't have enough cash even to do the early development of the chips. We need financing to pay for chip development. Traditionally, we would find some private investors, have them front some millions, and in return promise them a very good deal on some hardware. The private investors would get the first stab at buying ASICs, they'd get a huge chunk, and they'd get them at an exclusive deal for taking on the risk early. We actually had private investors come forward offering this to us, with enough money to fund the full development and manufacture of the first batch of chips - this isn't a hypothetical, it's a real offer that the Sia team received. This didn't seem fair to us. When we finally did get to the point where the miners were ready to be sold to the community, we would have to offer the community a worse deal. Less risky, but ultimately it would mean that the community was excluded from the opportunity of participating early, and the result is a huge chunk of the chips going to some private investors. Such a situation is still better than GPU mining, but it didn't seem like the best that we could do. We felt that we could do better by opening the early presale to everyone.
Why not accept credit cards?
Payment processors are not friendly to Bitcoin products. We contacted Stripe and were told point-blank that they would not process payments for cryptocurrency miners. We appreciate everyone who pointed us towards Stripe as a bitcoin-friendly company, but they gave us a direct no. Paypal has a long history of freezing merchant accounts with little warning, and when they do so they freeze your existing money in addition to freezing incoming payments - we would be unable to pay our bills if Paypal did this to us, and it would unquestionably cause delays. Visa and MasterCard are not much better in terms of track record. Losing access to our accounts would unquestionably cause delays. ASIC hardware is already well known to suffer from serious delays, and we need to limit our exposure to delays. We are in an industry that is unfortunately fraught with fraud. With revenue-generated devices such as miners, criminals are much more likely to try to target these devices as a way to cash in on stolen credit cards, stolen identities, hacked bank accounts, etc. The fraud rates are staggering, and as a result most payment processors outright refuse to deal with it. We are aware that Bitmain is partnered with Paypal, though we don't know the details behind how that came to be.
Why not accept Siacoin?
This was a harder decision. We could quite easily choose to accept siacoin, however we fear that Siacoin is not ready to handle such a massive presale. The market cap and daily volume of Bitcoin is a factor of 100 times as large as the Siacoin market cap and volume. Moving millions or tens of millions of dollars through Bitcoin is not likely to make much of a dent. Siacoin on the other hand, a sudden sell order for millions of dollars would likely tank the price. That not only means the ecosystem is unhappy with us, it also means that we might only be able to sell $2499 of siacoin for $2200. A lot of people have accused us of not having confidence in our own coin. Unfortunately, this is true. Even at a $500 million market cap, Sia is not ready to handle a presale of this size. It's a pragmatic decision based on the fact that we don't want to dump our own coin. We know that people will be selling siacoin to buy the miners anyway, but we still feel that this situation is much better than us accepting siacoin directly. This decision was a disappointment for us as well. We would love to accept siacoin, and if we weren't talking about processing millions of dollars in a single day, we absolutely would be accepting siacoin. And, as Sia continues growing up, the concerns above will become less and less.
What about this 5% gains/losses stuff?
Our intention was never to play fishy financial games with our users, and honestly this isn't even something that crossed our minds as a potential problem point. I think a big part of the issue was that people did not realize we will be converting to US dollars as fast as possible - we will be doing the conversion in minutes or hours as long as we can keep up with the order volume. The rationale is very simple. If the price plummets before we are able to convert the Bitcoin, we won't have enough money to create the hardware. We really don't expect this to matter, because we don't expect the price to swing by more than $100 (which is what would be required) in the few hours that we're going to be sitting on the BTC. If it does, we'll need more coins or we can't produce the hardware - our costs are in dollars, which means we need to end up with the right amount of dollars in our account at the end of the day. The original stance on not returning gains was also very simple. There's no transparency into when we sell the coins. If we sell the coins within 60 minutes of receiving them, and then 4 hours later there's a huge surge in the price, we will almost certainly have users emailing us and posting about how we owe them a refund. We won't have that refund, because we'll have sold the coins before the price rise. There's not much we can do to provide transparency into this either. And we're likely to get requests for refunds even if it takes 3 months for Bitcoin to rise by 5%. This promise of returning gains that we've put forward is going to be a massive headache, because we're not expecting to have any gains, even if the price goes up by that much we'll have likely converted to USD faster than that. Our whole goal is to convert to USD as fast as possible. We're sorry that we have to go through this headache at all. If we could get set up with a processor like Stripe, we could accept both Bitcoin and USD and let them deal with the conversion process, slippage risk, and all the other headache associated with using multiple currencies.
Why shipping a full 12 months away?
Before we set out to make Sia miners, we did a study of companies who had previously sold and pre-sold Bitcoin miners. This included talking to both Avalon and Butterfly Labs, and talking to professionals and advisors who have shipped hardware successfully in other industries. The core piece of advice we got was pretty consistent: expect delays. Expect lots of delays, and expect them to come from the most absurd setbacks. (Example: one of the people we talked to had to delay their product because there was a global shortage of power supplies, and they had to wait in line behind billion dollar companies to get some). Our projections indicate that if all goes well, we should be able to ship the miners in 6-8 months. Nothing we are doing is new. Plenty of companies have gone through the process of developing a chip, manufacturing it, putting it in a box, and then shipping it to users. There is almost no innovation risk here. Sia's PoW algorithm is deliberately very ASIC friendly, even more than Bitcoin. We have advisors who have gone through this process before, and the types of challenges facing us are well known. 6-8 months is reasonable, except that every single person we've talked to has told us that unexpected delays is a guarantee, and that by nature of being unexpected, there's not really any way to prevent them by planning around them. Delays are just inherent to shipping hardware. So we chose to set our target at 12 months. We will ship the miners as soon as they are ready. If we are a few months ahead of schedule, and have somehow managed to avoid the foretold delays, we will ship them months ahead of schedule. But we want our users to have a realistic understanding of the expected delays. We've baked a generous amount of time for setbacks into our shipping date. We'll almost certainly need at least some of it.
Making chips is very expensive. We have to sell thousands of units to cover the cost of the chips. A nontrivial percentage of the price is going to go towards chassis, shipping, power supply, control board, fans, etc. Those costs are relatively the same even if we put in fewer chips, which means the total percentage of our budget going towards chips drops significantly. If we cut the price in half, we'll have to sell roughly three times as many units to break even on the cost of the chips. If we cut the price in half again, we'd need to sell a completely unreasonable number of units to break even on the cost of the chips. It's unfortunate, but the fixed costs of chip manufacture means that we really need vast majority of the price of the unit to be spent on chips, otherwise we simply won't be able to sell enough units. There is a second reason as well. As stated in the section above, the industry is plagued by delays an unexpected expenses. We need a healthy budget to plan around potential setbacks, because we've been guaranteed that there will be multiple significant setbacks by those who have gone through this process before. If we bring down the price of the unit, we will also be reducing the amount of wiggle room we have for disaster if suddenly we have to replace parts, re-do designs, or otherwise perform expensive adjustments to our plans.
Are you guys qualified to be working on hardware?
Zach is a mechanical engineer, I've been in the Bitcoin space since before ASICs started shipping, and we have advisors who have successfully shipped hardware before. The team that is designing the chips for the miner has designed chips and shipped chips for Bitcoin miners previously - they are familiar with the whole process, and have done it before. The people in charge of designing the PCB board and other aspects of the miner are also all experienced with their respective tasks. We will be facilitating frequent and strong communications between everyone working on the various components of the miner. The ultimate answer is that the Sia development team is not qualified to be making this type of hardware. However, the Sia development team is not the team working on the hardware. Most of the heavy lifting is being performed by teams with lots of experience in this industry, including experience that is directly related to cryptocurrency miners. What we are doing is not new. Dozens of cryptocurrency miners have been created and shipped in the past, and we are not starting from day zero. We have many advantages over the previous rounds of pre-sale cryptocurrency miners, but the biggest is that it's no longer the wild west of hardware design. There is a standard, and there are tried-and-true methods for making reliable cryptocurrency miners. We get to fall back on the mistakes and successes of the many miners that have been built previously, and we will be leaning heavily on teams and people that have direct experience in this field as opposed to doing everything ourselves.
Does this mean that Sia is getting less attention from the developers?
Sia right now has four full time employees. Myself, Zach, Luke, and Johnathan. Zach was hired in June 2017, less than one month ago. He is not a programmer. Luke and Johnathan will continue with the same responsibilities that they've always had. They helped out a little bit in setting up the website, and in setting up a secure database to process orders + payment information, however the majority of their time has been focused on Sia even as we set up this presale. Going forward, they will be almost entirely uninvolved in Obelisk. I have had to allocate about 25% of my time to Obelisk. Slightly more this week, due to the PR meltdown we had from the initial announcement. But most of my time is still going towards Sia. Most people know I work over 100 hours per week (some weeks will eclipse 120), and that a quarter of my time is not a small amount. Zach is closer to 50% Sia, 50% Obelisk at this point. We're expecting that to tone down once the presale is over - much of this time has been spent with banks, with lawyers, with payment processors, and we won't have to do that beyond the initial setup phase. Zach and myself will still be having weekly conversations with every part of the Obelisk supply chain, including the chip designers, chip manufacturers, control board designers, the miner assembly teams, and the fulfillment centers, so even after the presale there will be effort going towards Obelisk. But nobody on the Sia team is doing chip design, nobody is doing control board design, most of the really heavy work is being done by experienced teams and suppliers that we've found and already spent weeks vetting and verifying. We incorporated Obelisk as a separate company precisely so that Obelisk would eventually have a completely separate team. And finally, as Obelisk is wholly owned by Nebulous, a successful hardware company does mean revenue and income for the Sia team. Cryptocurrency mining tends to be low margin, so tens of millions in revenue for Obelisk does not necessarily millions in funding for the Sia team. But it is something, and it will give us more time to get the storage platform to the next levels of maturity.
I know that a lot of you are concerned about the miner presale that we are conducting. I hope that this post has helped to alleviate those concerns. I hope it makes sense why we are doing a public presale, instead of seeking private investment until we have a full prototype. I hope this post has clarified our decisions around payment methods, and around our price point. I hope you feel more confident that this is something we will be able to pull off. And finally, I hope I've reassured you guys that Sia is still our primary focus, and that we haven't suddenly pivoted into being a hardware company. We are ultimately doing this to provide better security to the Sia network. GPU mined coins are frighteningly insecure, and Sia is now large enough where there is serious money on the line. We are doing this to gain security, and also to ensure as much decentralization as possible when it comes to chip manufacture. We are typically viewed as one of the most reputable teams in cryptocurrency, and I know it's why a lot of you are here. We hope that the Sia ASIC that we are going to be manufacturing and selling strengthens this reputation, but ultimately we will not find out until the miners are actually being shipped. We continue to be excited about this new product. We truly do feel that ASICs are the right direction for Sia, and we also feel that we are doing the right thing by bringing the opportunity to own a Sia ASIC to the broader Sia community. We are sorry for the fallout from our sloppy original announcement, and we hope that we have since made up for it. Finally, we hope that you are interested in buying a miner. Even if we only sell a small batch, ASICs are going to utterly dominate the hashrate of Sia going forward. This is an egalitarian sale where everyone has equal opportunity to buy a miner - there's no cap, and we will ensure that small buyers are not shut out by larger buyers in any way.
Foreword: This did not happen today but on Wed. This is also a long post. I'm also typing this on my phone in a bar as I reflect on my stupidity, please excuse the multiple typos. Also (not that this will deter anybody), I know I'm a complete idiot for this, I knew/heavily suspected before, during, and after this scam that I would regret it. I'll explain my ridiculous rational later, but just know I know I'm a complete idiot for letting myself get scammed. Last, I'm not entirely sure the scam is done, best case scenario I'm mining some monero for someone. Worst case scenario, I have a backdoor or key logger installed and the rest of my crypto that I cherish is about to be emptied, if anyone can help me with that it would be much appreciated. Yesterday I decided, even with the return to bullish sentiment in the market, that my portfolio was not offerring the same returns I saw from March to June and I needed to change that. I talked myself into gambling on a satoshimine bot that promised lifetime support, updates to algorithmic programming, and up to 1 btc a day of earnings. I knew it sounded too good to be true, but after my quick money I made from March to now in ETH I figured I was just playing with house money and if it was that easy then it was probably that easy now. It also happened to be a (yet another) time in my life that I needed money, so I went for it despite ALL the red flags. Now let me defend myself a little here before we get to my stupidity: Since March I have been learning as much as I can about crypto everyday. I listen to 7 plus hours of podcasts and audio books on crypto daily. I read charts, Reddit, Twitter, and immerse myself daily in all things crypto. I love the community (even after losing 1300$), and the challenge to understand and learn everything associated with crypto. I love the drama of the scaling debate, I love the possibilities of what is to come, and I love the gold rush that crypto is right now. I have read multiple times that "you are just a noob until you have been scammed or hacked" and just thought I was smarter than that... With that having been said, greed got the best of me. It made me blind to reality. Not only did I need the money, but I love bitcoin! I do I love it! I'm a libertarian, an anarcho-capitalist. Bitcoin is my wet dream. But I've only held bull shit alts. I needed a bitcoin! I also have this thing that I will only buy bitcoin when I can afford 1 whole bitcoin. (Showing my cards here) unfortunately I'm always a couple hundred behind the bitcoin price with my alts to make the switch. :enter stupidity and greed: After my 300 time checking the crypto prices today on blockpholio, I decided it was time to switch to bitcoin; I needed it. But I wasn't ready to dump all my alts. Then it hit me! I remembered a post I saw on Reddit regarding a "super smart" Satoshimines bot that wouls make me 1 BTC a day!! Of course it sounded too good to be true, but it's crypto, it's the wild west, its unregulated, its a gold rush, its BITCOIN! I mean i had just 10x my investment in a few months, was this really that far fetched? So, I watched the YouTube video, I read the comments, I did some research, I checked out who made the comments, I saw win written all over it, but I was weary of course. So, I emailed the guy to feel him out. He was great. Sold it hard, said all the right things, had all the right answers, he was good. So I went for it, 69$ for the bot. If it was a scam why would he sell it!? He would reach way more people if he was giving it away. He was there for the whole thing, in 3 hours we had like 40 emails between us. Telling me the settings for the bot, which had a simple yet nice user interface. He assured me he would help me until my win percentages were up to 99%. He assured me it has worked for so many people and he just couldn't do it too much himself because as the algorithms change on satoshimines he wouldn't be able to keep up with the updates. Like I said, I was desperate and he was good. So now it was time to deposit my .4 btc and run this program with some money. I dumped some alts, waited nervously for the confirmations from various wallets, sold for btc, and send it over to this bitcoin minesweeper site. If you asked me a year ago if I would ever send $1300 to a website to gamble on a minesweeper game I would have laughed hysterically, even more so if you told me I would be doing it with an automated bot I purchased from an internet stranger named BTC RAIN and had a Skype and gmail account with the name Duke Mahler... Either way, after hours of sending, selling, and testing I went for it. Let Duke know I had the BTC on the site. He told me the settings for the bot and then double checked them with me (all via email), then said hit start..... :BAM: Nothing happened, just an error on the bot. "Hey Duke I got this error did I have a setting wrong or something...?" No response... hmm let me refresh this web page and log back in..... 0 Fucking 0! That was my new balance. ALL btc and hope was gone. I knew he got me. Right away. I didn't get mad, I couldn't. It was to dumb. I just told Duke, just man up and tell me I've been had, just send me one last email and rub it in, tell me I'm an idiot. His silence was killing me for some reason. I just wanted closure at this point, I don't know why, but it drove me nuts that I got no response after he got me. I was tired and embarrassed. I needed sleep, I had to work in the morning and was done. But I kept asking and waiting for a reply. I even swallowed my pride enough to compliment the guy on his scamming abilities and asked him to atleast split his (formerly mine) spoils with me. I said, "Hey man just send me half of that BTC back, send it here: removedbtcaddresssoyoualldontthinkimtrolling", but (obviously) received nothing. Not even a response.. I was defeated, embarrassed, and $1300 poorer. It sucked; refreshing my blockpholio wasn't fun anymore. I didn't want to make trades anymore, I was too afraid to fuck up and lose more money. I've read you are a crypto noob until you fuck up and send ETH to your btc wallet, or lose a private key, or fat finger a trade, or get scammed, but I've never felt like more of a noob than after this idiotic chance i took. I stepped away from the crypto world for what seemed like a long time: 3 days... Now today, with BTC hitting 4k I had to get back in! It was all house money, you live and you learn, the BTC price isn't going to wait for me, and the FOMO is just getting worse! I know, eventually, I can trade my way to some BTC, but man if only I could have won it playing satsoshimines with a bot! Lol Edit: here are the details of the tx that the satoshimines admin emailed to me by request. IP Address: 22.214.171.124 Amount: -0.37739599 Destination: 1HEXKiDE8LrrPcv5Ag7aXJ3JVFMXwemK5Z Timestamp: 2017-08-10 02:54:33 UTC Txid: 1b542361ba71ba1a2c8203016ff8c76e9fc94ce12c8143b242bdfcdd69772966 "Hexkid" is the handle the scammer went by on the selly website where I purchased the bot. EDIT: Here is the virus total analysis. I uploaded the file, but the file had already been uploaded previously so that is the upload date you see. Can any experts kindly tell me the level of worry I should have from these results..?: https://virustotal.com/en/file/06e0a2ca42ee632ebb488937ece1828a28d567149ad9bbc3e4b94bd67316f10f/analysis/
What Is USDQ and Q DAO? Complete Guide from PLATINUM ENGINEERING Mihaill Kudryashev, a Front-end engineer at PLATINUM ENGINEERING, wrote this article while seeking to raise awareness about USDQ, a stablecoin his team is helping to develop. Among the biggest benefits, USDQ brings full decentralization and predictive capabilities. Soon there will be even more fully backed stable coins: JPYQ, KRWQ, SGDQ, HKDQ, CNYQ, RUBQ under Q DAO governance. Slowly learning more about blockchains, Mihail has been effective in transforming vague ideas into effective front-end solutions with strong UI/UX. Within his team, he’s helped many crypto startups to make their voice heard throughout the emerging global crypto community. In this article, Mihail looks into the key benefits that users win from using USDQ. USDQ brings stability, with no need to engage legacy finance How do USDQ and Q DAO coins work within the ecosystem? USDQ is decentralized stablecoin, which uses algorithms to offer higher stability and reliability. It's backed by Bitcoin (another top 10 cryptocurrencies will be added in future). The elegant system places all transactions on the blockchain and empower users to execute cross-border and disintermediated transactions at any time and from any place. It's pegged to the value of USD, i.e. 1 USDQ always equals 1 USD. The ecosystem's design borrows heavily from fractional banking systems. In the nutshell, USDQ is a customer-facing stablecoin and Q DAO is an internal "operational" coin; together they help create a stabilized safe haven for anybody who's looking to hedge against rampant volatility of crypto markets. Introduction to Q DAO and USDQ There's a number of factors that prevent mass adoption of cryptocurrencies. The biggest factor among this is high volatility, seen in crypto. Bitcoin, the oldest and most popular coin, has been fluctuating with prices oscillating between 20,000 and 3,500 in just one year of 2018. No potential adopters, be it merchants or individuals, would be happy with suffering huge losses that such drastic changes can entail. And it's this high volatility that USDQ is set to address, bringing stability and convenience. Tether (USDT) is probably the most well-known and widely used stablecoin. However, it has been embroiled in various controversies from the very start with no end to these in sight. Although the system is supposed to assure the 1-to-1 fiat reserves for all Tether units created, the website content has been recently changed to say that the issuer views not only cash in the bank, but also various loans to other companies, as the reserves. Both regulators and crypto enthusiasts have voiced concerns, which might bode ill for Tether in the months to come. USDQ works differently. Here, the stablecoin is pegged to US Dollar and backed by Bitcoin (+top 10 other cryptocurrencies in future). It's similar to lending operations and fractional banking systems. Overcollateralization is used to mitigate potential unexpected changes in assets prices. The USDQ ecosystem is highly transparent as all of the operations are recorded on the immutable Ethereum blockchain, open to review by anybody and at any time. The smart contracts bring automation to business processes and eliminate the need for middlemen to assure trust and prevent abuse. In order to determine how viable USDQ will be in the future, we need to discuss the two tokens used within the ecosystem. Review of Q DAO and USDQ Q DAO is governance token, entitles holders to participate in voting for new decisions. Importantly, holders are interested seeing Q DAO's prices growing and thus they are incentivized to thoroughly review proposals and deliver the best decisions. In this way, Q DAO imbues higher democracy and decentralization, on which many current crypto projects lag. In addition, all the fees, charged for the system use, can be paid only in Q DAO. In order to create USDQ, a user needs to transfer Bitcoins into a Collateralized Debt Contract (CDC). This will automatically trigger the smart contract to generate USDQ and send it to the user. In order to change USDQ back into crypto assets, users need to pay back the amount of USDQ they input and the fees, chargeable in Q DAO Tokens. Whenever this is done, USDQ is automatically destroyed and the Collateralized Debt Сontract is closed. In addition by getting USDQ directly at the company's website, users can trade in USDQ on secondary markets. It's as easy as trading Bitcoin or Ethereum or any other coin. Traders can store both coins in their wallets, assuring higher security. The stability and ease of use for USDQ open up wide ranges of adoption for both businesses and end consumers alike. What makes USDQ stand apart The main difference between projects like Tether and USDQ is complete transparency and openness in the inner workings of USDQ. All the data is easily accessible on the blockchain and there are no rumors or controversies as to the reserves held by the team, potential conflicts of interest or hidden agendas. The CDС mechanics ensure that it's impossible to create fake units of USDQ, as smart contract can be activated only after an amount in Bitcoins is input. The development is being done completely transparent. Interested parties can review the smart contract, presented on the website. The audits and peer reviews were carried out to assure the highest quality of smart contract. The website-based scanner enables to track all the data about each and every transaction, including time, amount and collateral size. In addition, should a "black swan" event occur, i.e. a drastic fall in Bitcoin prices, Q DAO is sold on secondary markets. Bitcoin value is liquidated to make a USDQ buyback procedure, which prevents any losses on the part of the system's users. Additionally, PLATINUM BLOCKCHAIN ENGINEERING which is helping to develop the ecosystem is working hard to build up long-term partnerships with stakeholders in the crypto industry. The more liaisons the team wins, the better outlook for USDQ will be. Why do we need stablecoins anyway? Different assets produce varying levels of volatility in prices, when compared to each other. For instance, the purchasing capacity of US dollar has reduced over time with 1 USD from 1913 equaling 24 USD today (2019). This happens due to inflation 3-10% per year. In comparison, Bitcoin almost tripled in value in 2018 and then fell down by as much. Thus, fiat currencies are more stable, when compared to cryptocurrencies. Stablecoins don't attempt to fight inflation. Instead, coins like Tether and USDQ peg themselves to US dollar, bringing relatively higher stability to crypto trading communities. One of the most famous transactions with Bitcoin is when a pizza was bought with Bitcoin back in 2010. At that time, the pizza ended up costing just a couple of bucks, but today it costs millions. Although stablecoins continue to be impacted by inflation and exchange rates that come to them from fiats they peg themselves to, they are nowhere near the mindboggingly high volatility of crypto assets. One of the major use cases for stablecoins like USDQ is concluding long-term contracts. For instance, when using a popular decentralized platform Augur, users can bet on the price of oil in 5-10 years. The problem is that you won't only have to account for future changes in oil prices, but also for prices in Ethereum or Bitcoin that you use to make the bet. USDQ solves this problem elegantly and without much trouble. Using it, users don't have to consider future changes in Bitcoin prices and they can concentrate on what they've come here for - betting on future events. And they don’t have to worry about technical details as it’s easy to purchase USDQ and use for trader’s purposes. Betting industry is just one of the many use cases, where USDQ can bring benefits. It can be successfully used for any transactions done across borders and long-term financial contracts. Virtually, USDQ opens up new opportunities any time value is exchanged and volatility has a negative effect. Bottom Line USDQ has a high potential to democratise transactions between companies and individuals globally, bringing fast execution and low volatility. The "PLATINUM BLOCKCHAIN ENGINEERING" is working hard to enable and improve various features in order to help USDQ to take leading positions on crypto markets. Here are the main ecosystem’s features: The system uses two tokens (USDQ and Q DAO) in order to tackle volatility, while staying on the blockchain. USDQ is always pegged to USD 1:1. In order to come into line with as many national exchanges as possible and enter other markets, the company will issue other tokens pegged to the national currencies. For example, there will be CNYQ (for Chinese Yuan), KRWQ (for South Korean Won), as well as JPYQ (for Japanese Yen) at the early stage. USDQ brings higher decentralization, driving this important vector in the development of crypto industry. Q DAO holders are interested in seeing the coin grow and succeed, thus they will work hard to review and pick the best proposals for the system to move forward. Taking into account these beneficial features, there's no question that USDQ will become a viable alternative to other fiat-backed cryptocurrencies like TUSD, USDT, GUSD, USDC etc. Competing with other stablecoins, both already operating and just being developed, PLATINUM ENGINEERING will roll out the new features and underlying tech solutions that'll help propel the coin. USDQ is decentralized stablecoin, which uses algorithms to offer higher stability and reliability. Fully on-chain and monitored by high-speed AI robots, ecosystem offers reliable defences against malicious acts and attacks. First run in line of fiat-pegs, USDQ is brought by PLATINUM ENGINEERING Team, looking to edge together innovative solutions in collateralization, using stabilizing mechanisms for high-endurance stablecoins. Soon there will be even more fully backed stable coins: JPYQ, KRWQ, SGDQ, HKDQ, CNYQ, RUBQ under USDQ brand. Fully anonymous, USDQ breaks limits out of this legacy world. PLATINUM ENGINEERING values your opinion and welcomes you to continue the conversation on Telegram or Facebook, where the company’s development team is always ready to help you find solutions to pressing issues. Working on projects like USDQ, Michael has gained an invaluable suite of skills and insights, enabling to roll out high-usability UI/UX with tight deadlines and lack of clear expectations as to user behaviors. The team has successfully produced white-label wallets, stand-alone fundraising platforms, as well as integrated fundraising ecosystems. Any startup looking for a reliable partner to help execute a success-story will win from a free consultation with the PLATINUM ENGINEERING team about potential solutions to their needs and issues. This overview may not be fully exhaustive and does not assess the viability of any project, nor its team legitimacy. Readers should conduct their own due diligence before using or investing in any of the listed Stablecoins. This article represents the author’s opinions only and should not be considered investment advice. All described functionality in the article is still under development, it can be changed/processed. Please follow the updates. Once Upon A Time In The West
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