Sunday, August 15, 2021

Safemoon and me (long post)

I first want to thank this sub for the discussion, info, stories, and general sense of a common goal.

In March 2021, my knowledge of crypto was limited to an event in 2011 involving BTC that forever changed my life.

Back then, I kept reading about a crypto currency called bitcoin. I was pretty computer literate for basic stuff and wanted some, but as soon as I got to the wallet part, it was too complicated, so I called my brother. He is the type of guy that once he starts learning about something, he doesn’t stop until he knows everything about it. He was an investor, precious metals. He was also very computer savvy so I knew he was the guy to help.

So I called him. Told him to make me a wallet and buy $1,000 worth of bitcoin. He flat out refused. Told me it’s all fake and will never be worth anything. All good points, so I forget about it. Over the next few years later and BTC is popping off and I always talked about it with people and would always end on “it’s too late now, it’s already X amount of money. It’s too expensive.”

Back to March 2021. Wife comes in, shows me a Tik tok that will change my life. Keep in mind, BTC and doge (which I bought super bowl Sunday on Robinhood) were the only coins I knew about. So when I see this Tik tok clown flashing SafeMoon and how it’s going to be the next BTC, I fell for it.

I became obsessed with not missing my chance again.

I started with a Google search of “how to buy bitcoin” (I thought I could swap it for SafeMoon) landed me with Coinbase as the top hit. Create account. Send $200ish BTC to my newly created trust wallet, try to swap for SafeMoon, and I can’t. Send it back, change it to Ethereum, and repeat the process.

I then found I could only swap BNB for it. That’s easy, I’ll just buy BNB. Nope. I live in NY. I can’t use Binance. I start looking everywhere. Completely neglecting my entire life for 4 straight days in search of a way to get my hands on BNB. I finally find a crypto swapping service, Changelly.

I send them what’s left of my Ethereum (gas fees were still confusing to me) and I finally get my BNB. I swap it for SmartChain. After all is said and done, I wind up with $69 (nice) worth of safemoon after 4 days of obsession.

After a few days, the price starts going up. My $69 turns into $800 rather quickly. Get excited. Buy more. At the ATH, my SafeMoon is worth over $10K and I just stare at it.

Then I started buying other coins. Real coins. Everything is just green. Every day, green candles. Then I decide it’s time to get serious and finally pull the trigger.

I buy X Ethereums.

What happens after that? Not even four hours later, the whole market crashes.

Since then, I’ve learned staking and of many other coins, DCA, FOMO, dabble in day trading (abandoned after 2 days and some lost dollars).

My portfolio is very diversified and whatever can be staked is staked.

I know this is a long story, and I know SafeMoon is turning about to be everything you all said it was going to be but i think it’s important to point out that because of a lot of these shitcoins, people are being introduced to a world they would never have found out about if it.

I was first on the SafeMoon sub mainly until I found out about this place. After interacting with many of you, reading your stories, sifting through the endless piles of information, and reading funny and informative comments, I know now way more than I would have if I had never wondered outside the SafeMoon bubble.

I’m glad I did. Thank you, r/cryptocurrency members. For real. Thank you.


Controversial News: The upcoming Dollhouse stream is being sponsored by crypto currency trading platform ‘Coinbase’.

”Personal statement: this is a collective of the events based around the news that the dollhouse stream is being sponsored by Coinbase. This is a very abridged version. Any further investigation is best acted on personally. I do not mean to stir things up by sharing this but I still felt as if it needed to be shared. I’ll remain as objective as possible.”

This news has since made a small rise in the community since it is not only an outside sponsor but also an acting body involved in crypto currency. Mainly the purchasing and selling of said currency with Bitcoin, Litecoin and Ethereum being the main trades.

The world of crypto currency is still a relatively new one and has already gained a huge position in the economy as a giant unregulated money maker, although it has also been a large participant of controversies, the main one in this situation being how many scams are revolving themselves around the crypto currency world. An infamous one being many “start-up” companies that have stolen millions off of seemingly innocent investors donating to their new crypto company. After going public to any investors, these companies would just pocket the money then vanish. In some cases these companies have sponsored influencers to promote their product, whether these influencers were aware of the malicious intentions is a case by case basis but more commonly they weren’t in the know. Although, the damage had already been done and reputations as well as careers were damaged by proxy.

As of the date of posting this, Coinbase has not been involved with any known controversy and continues to operate as a crypto currency trading service.

As for how this affects jerma: Some members of the community have opted to not watch the dollhouse stream because they’re being sponsored by a company associated with crypto, others seeninly refuse to watch because the stream is being sponsored at all.

While this is likely a small number of the community due to how Jerma’s audience is split based on how they interact with the community be it the discord, subreddit or any Twitter page associated with jerma. However the news was still cause for concern to this vocal part of the community.

”Personal statement to wrap this up: I have no problem with sponsorship as long as the company + product are decent and relevant and it doesn’t effect the content, e.g: the sponsor wanting some level of control of the content to promote themselves further WITHIN the content. The most I’m okay with is a message prior to, during or after a video saying “this video is sponsored by X” with an ad. Anything more than a separated segment, I have an issue with.

I can however, understand why the community takes issue with sponsorship since jerma hasn’t actively been sponsored before, notably not on a large stream. Crypto is still sketchy for those that don’t understand it but jerma seems active in that realm so I hope he’s aware of it in some way.

I like to think jerma would rather throw out a project that compromise with a sponsor. Say if either twitch or this Coinbase wanted jerma and the guests to wear the company’s T-shirt’s and give a shout-out every 10 minutes or control a segment with crypto orientated themes. I’d liked to imagine, if that were a breaking point in whether or not the stream would go ahead in this capacity with a large level of support, jerma would throw this entire project out the window. I’m not saying compromises may have or have not been made but I respect jerma enough to know when to say “No” to a sponsor wanting control.”

I open the floor to discussion.


What is a fair valuation for iotex?

I have been invested in iotex since it came on Coinbase and have recently been learning more about crypto. My background is a PhD in life sciences from a top program and startup world vc experience in the bay area.

What I have been struggling with is how to properly value a particular coin from the perspective of how venture capital and the public markets value companies. Hopefully this post generates some discussion on what constitutes a fair valuation, outside of hype and the effect that Bitcoin has on pricing of the other coins. In other words, a coarse look at fundamentals and valuation of Iotex. Here goes my two cents:

Going onto Coinbase is essentially like doing an IPO for any coin. It has the exposure to newer retail investors and is publicly listed itself. An IPO being the ability for institutional public funds and retail to gain exposure to a company, I would argue that the closest thing to an IPO type of event of massive money flooding in is Coinbase.

Given this, it seems like post Coinbase/IPO valuation has gone from around 250 million to 1 billion. 10bil shares times 10 cents per share, plus or minus.

So let's just say Mr. Market values iotex as a company at 1 billion usd. In this post since I'm trying to use traditional terms on a cryptocurrency let's just treat iotex as a company, with a team, products, etc etc.

So, if the market says iotex inc. is worth 1 billion, what is this compared to a from the ground up valuation?

In my mind iotex can value for shareholders like you and me in 3 ways: 1. Royalties from hardware devices co developed 2. Royalties from software / transactions 3. Voting control over the fundamental infrastructure

  1. Royalties from hardware Iotex has one product on the market and one slated in production, pending chip shortage ending. Let's say all the devices sold are ucam, so call their devices 7000, price of ucam 60, current revenue stands at 420,000 usd.

So by a price to revenue valuation of 1.5 which is the median price to sales of the sp500 we have valuation of 420,000*1.5 = about 600k. Let's take this and say, okay maybe there's this crazy crypto valuation factor or we haven't seen quarterly sales numbers yet of 2x, that makes 1.2 million usd.

Lets say pebble can perform similarly and we want to price that in as well. Call it another 1.2 million usd.

Present valuation from hardware with these rosy valuation bumps still only puts iotex hardware valuation at 2.4 million usd.

  1. Royalties from software. To my knowledge, there is no pure software royalties or payments yet, otherwise they would have announced it. Something in this category would be: Google nest has an experimental device that it will pay .00001 iotex per device per transaction. Obviously numbers are fictional but the idea is that a major organization will be willing to pay a fixed amount for the distributed network infrastructure.

  2. Voting control. Presently no value.

So if we have a fundamentals based valuation of 2.4 million, and a market cap of 1 B, we have about a 400x valuation relative to calculated to priced. Which by any standards of investing is insane.

However consider, Tesla trades at 225x pe ratio. Is it insane? Yes, if you think Tesla is the best short selling opportunity this side of the moon. But short sellers have been getting burned constantly on Tesla.

This project however is not tesla because they have not shown an ability to scale. I mean, what is their business plan? Put out ucam. Then put out pebble. Then put out another product? This is a linearly scaling process, and you can't grow your valuation to meet market cap one hardware product at a time. Plus, are they even a hardware company? They are a Blockchain company, pure software. In my opinion this direction provides value only in the early days in demonstrating they can build a working product because no hardware manufacturer will build a product on their undeveloped platform. It is bootstrapping for them, building proofs of concepts. Not sustainable on the longer term because clearly smart devices will be built by Google or Amazon, or for industrial solutions by their own industrial equivalents.

So where does the revenue come from?

  1. Royalties from software. Currently they are on a consortium called iic with a subgroup composed of them and amazon and Huawei. Good, scalable partners. However a working group in a consortium in itself is suggestive at best, presently, which is why I can't assign valuation to it. Without tangible products or software projects that are a collaboration, they are just having some meetings and drafting PowerPoints about first principles.

But what about the future?

If they can partner with any company that already has significant existing products in any iot space, even a Chinese company big enough selling knockoffs, and establish a model of usage or royalty per usage, then that is the beginning of really scalable value creation.

The real opportunity in this space isn't even the smart devices we currently think about. It is the industrial infrastructure that will be the big moneymaker. Retail devices are something you and me can understand but think about any digital device in the electrical grid, all the businesses that run instruments, planes, buses, shipping etc etc. Anyhow if I were them that's where I would be trying to get adoption, on the software side in industrial devices, not building little knick knacks in hardware land.

So IF they can do this, all bets are off the table.

  1. Voting control. Say GE starts using this for thermostats or something. Now their infrastructure depends on this Blockchain. Then what? Then if you and I own iotx we have the voting power on the changes to the block. Iotx is fully tapped out at 10 billion and decentralized so the iotx people can't actually do anything about it without voting.

So ask yourself if you are GE, and to have a product that depends on this, what do you do? You buy this token that confers voting privilege as a hedge. You don't want infrastructure to be beholden to dumb dumbs like us.

MY SYNTHESIS

There is really no good way to value cryptos from a fundamental basis, and clearly trying to do so with iotx yields multiples that are insane. If Tesla is at 250x then iotx at about 2500 p/e is not so crazy if we can somehow price these intagibles in revenue streams 2 and 3.

However in my opinion iotx is not focusing on where they should be, namely industrial and skipping making their own products. No offense, but these guys are never going to beat Amazon at making echo devices or Google at making nest devices. Don't compete on the hardware or the system, demonstrate value or find those projects where they can understand value in the industrial supply chain and focus on adoption on the backend protocols. Just my two cents.

If the price is going to really go up it needs adoption in industrial sectors where the industrial end up owning iotx to get the rights to the chain.

CAVEATS

I am not a professional investor and have no special knowledge about Bitcoin or crypto. Only related experience is in large fund investing in public markets and vc fundraising and bio PhD. My opinions only, I am long eth and iotx.

Would love to see what you humanoids think!


List of Today's and Tomorrow's Upcoming Events

I will be bringing you upcoming events/announcements every day. If you want improvements to this post, please mention /u/houseme in the comments. We will make improvements based on your feedback.

 

https://kryptocal.com | /r/kryptocal | Android | iOS | Telegram Interactive Bot (add cryptocalapp_bot) | Telegram Channel @kryptocal

 

ADD AN EVENT

If you like an event to be added, click Submit Event, and we will do the rest.

 

NEXT DAY UPCOMING EVENTS


 

Exchanges

Chiliz(CHZ) ZBG Listing August 15, 2021
NEVERDIE(NDC) BitMart Listing August 16, 2021
Zoe Cash(ZOE) LBank Listing August 16, 2021

 

General

General Event(CRYPTO) REIMAGINE 2021 V10.0 August 15, 2021
Bitcoin SV(BSV) Financial Mathematics August 15, 2021
LGCY Network(LGCY) Mainnet Launch August 15, 2021
ACryptoS(ACS) Third Daily Emissions Cut August 15, 2021
TotemFi(TOTM) NFT Series Reveal August 15, 2021
Ethbox Token(EBOX) 1st EBOX Buyback & Burn August 15, 2021
Pink Panda(PINKPANDA) YouTube Live AMA August 15, 2021
ElonTech(ETCH) Weekly Token Burn August 15, 2021
Gnosis(GNO) Community Call August 16, 2021
nDEX(NDX) Community Call August 16, 2021
Sparkpoint(SRK) Telegram AMA August 16, 2021
Voyager Token(VGX) Token Swap August 16, 2021
Origin Protocol(OGN) DeFi Weekly Call August 16, 2021
Ergo(ERG) AMA August 16, 2021
DuckDaoDime(DDIM) Telegram AMA August 16, 2021
Equalizer(EQZ) Mainnet Launch August 16, 2021
My DeFi Pet(DPET) Telegram AMA August 16, 2021
StackOS(STACK) Mainnet Launch August 16, 2021
Aquari(AQUARI) Twitch AMA August 16, 2021

 

Air Drops

Badger DAO(BADGER) Options Airdrop August 15, 2021

 

Blockchains

IdeaChain(ICH) Main Platform Launch August 15, 2021

 

Bounty Programs

Octopus Protocol(OPS) Staking Testnet August 16, 2021

 

 


Short summary of the talking stream

Why -- why can't I tweet this? What's going on? Hello, how are you, hi! Oh yeah -- ads? No, no ads today. There's an echo? Yeah, I'm in a different room. It's probably really loud. Yeah, I'm streaming from my bathroom -- there was literally an ad? Well, I can't control that. I'll talk quiter, though. Is that better? Live from the hospital? Yeah... What a wild week it's been. I will say it's been stressful, I'm very excited -- toilet cam, wait what if I... Does this help at all? Does this change anything? It's -- there's not much I can do about it, it's probably gonna be very echoey. Did -- it helped? Oh, shit it did? Oh, I'll just do this then. Just put the mic in your mouth. Lemme change a few things -- I can't tweet this for some reason, I don't know why. Yeah, we're gonna talk about the dollhouse, this stream is gonna be very short, I envision I'll be live for like 20-30 minutes, there's a lot of work going on behind the scenes, I will tell you that: this is... this is literally the coolest fucking thing I've ever seen, in the 10+ years I've been doing Twitch and Youtube. I'm incredibly excited. I couldn't be more excited. So, it's fucking gonna be insane! Reverb Andy? Let's see what this sounds like, get these headphones here. Cause -- oh yeah, it is pretty -- well actually it's not that bad. You can handle it, can't you? Yeah, I'm okay, I wanna make that really clear, first and foremost. Hi. Let's get those off cause I look like a dick head -- streaming from -- yeah, well I'm in my office right now! Old Jerma -- do I look old? Why -- why can't I -- hold on, we're going back to the start screen. You look like a podcaster -- I was just thinking about eating the microphone, but I don't know it's not my Mike so I don't wanna do that. I'm trying to send a tweet -- why? I'll go over really quickly -- sorry about the echo, I'm not in my usual set up, so... This stream, I just really want to reiterate the dollhouse stream, because, I announced it, then I went on will youed's stream and we talked about some stuff, and then I had a fucking immediate medical concern that was an annoying process that I just barely finished, literally like yesterday, and I'm still kind of dealing with it, and I won't give any details because I don't wanna anybody to be concerned about this or anything, but have a little bit of a medical problem that's completely unrelated to the other stuff, and of course it happens like a week before a big show like this... It sounds like a zoom court meeting? I know -- are you aware of the charges put forth by me? Yeah, I guess. Young man, this is not a joke! Yeah, whatever. Fuck you. All right, take him out of here. Hold him in containment court. And finally, get some fucking padding on these walls! This is unbearable. This is Bugelberry! Hold on, alright, lemme try to tweet, if I can't then I can't I don't know why... Quick talking stream -- come on, tweet! What's wrong with my phone? There we go! That took long enough. Alright. I'll come back on, I'll come back on, look I'm here. That's not what I wanted to put. I didn't want to click that! But anyways, hello, how are you? Desktop? I love how there's stream start, face cam, desktop capture, desktop with face, and then BRB. And stream end. So, I probably look tired, and I kind of am -- why am I in the void? Handsome? Yeah, well probably not today. I'll be honest with you. The mic sucks? Yeah it does. Hold on, lemme... I feel like fucking Price is Right. Don't they have one of these mics? Look how fucking big this is, right? No, that looks like I'm at a fucking podium and I'm five feet tall. Oh, god, like -- eeeee -- Hi, um, yes I'm here to accept the award for small but cool streamer. I'm on a fucking quiz show and the mic is too tall. Whatever. What the fuck do I care. Spelling bee. Okay, so, let's talk about a few things, this is going to be very quick, still going through some medical shit, I'm trying to get it just completely gone by this coming week, because obviously, lot of shit going on here, that I can't really be ill for, and it's not like a cough cough like I'm sick, it's something completely different that now I'm dealing with, and it's annoying, so we'll see how that place out. I feel pretty good now, I feel okay, maybe after the streams are over I will give a more in depth detail of what I'm talking about here, but it's nothing to be majorly concerned about, so don't worry, the show must go on, we're gonna continue, and the show is gonna be crazy! I wanna reiterate something, I didn't really talk about too much, is that we have special guests, Ludwig is one of them, we also have Kitboga is gonna be on the stream too, which I only really barely about leaked for like 14 seconds on Ludwig's stream last week. So Kitboga's gonna be there, and I can't wait to do that, I can't wait to have Kit, can't wait to have Ludwig on the stream -- this is gonna be the funnest thing I've ever done in my entire life. So having a new medical problem, is, FUCKING ANNOYING! Okay. It was a testicular tortusion -- does that mean I got like -- what is -- testicular contusion? Yeah, I don't want to talk about it guys, I slammed my balls in the car door getting out to come to the dollhouse... Anyways, Kitboga's gonna be there, Ludwig's gonna be there -- we also, I can say today, I can say this today too, and I wanna make sure you guys were aware of this -- we have a sponsor, that is now gonna be completely baked in to the stream, and it's really good cause it can help pay for a shit load of the stuff that's really expensive -- so not only Twitch, but Coinbase is also gonna be helping pay for this stream. They're gonna be presenting the stream as well, so now we got all the money we need, and that's probably really, really loud, but now we literally got all the money we need. It's -- I can't fucking wait to do this show. You're a stock user? Bitcoin Andy? Those of you that have followed this stream for a fairly long time though, will know that I have been into cryptocurrency since like 2015. So, you've heard me talk about -- we literally fucking have a crypto fake BaldCoin emote! So that's -- it's cool that they actually want to come in and help sponsor this stream, cause... We needed it for sure, and at this stage, I wish I could just yell all these insane things you're gonna see the next like four, five days, but I can't. I can't do that. Uh, I want to make this really clear again too: all of the money that's coming in from Twitch, all of the money that's coming in from potentially Coinbase, any thing that's coming in, I'm not taking any money from. It's only to make sure that we can pay for the stream, and all the production staff, all people, everybody that's coming together to do this, I -- I can't take any money, it'd be impossible. If I took any money from this stream, this stream wouldn't happen, it'd be impossible. So, I want to make that really clear that this isn't like, "Yeah, Coinbase is coming in, I'm getting a fucking bunch of money for doing it!" So, no, that's not happening. It's just to -- I'm fucking grateful actually, because for them to kind of come in here, and give us the remaining kind of funding that could -- that we need, is a huge fucking deal. So... This microphone is fucking freaking me out! But, I wanna reiterate a couple of things about the extension, we'll talk about that really briefly -- am I in jail? No, I'm wearing a Red Sox shirt! I'm not like in a prison outfit! Zoom call -- I know this looks like I'm a fucking professor! Oh, that was a really weird face, I'm annoyed that it was in HD. Prison break -- yeah, I didn't do shit, lemme out! You're in a courthouse! All Boston prisons have Red Sox jumpsuits? Yeah, and they let us all watch the games on TV! Convicted Andy... Well... Is further back -- the further way I go, the worse it is? Let's see. Yeah, I'll just give you like a couple clips just for fun, right, like... I didn't fucking do anything. I didn't -- I didn't do anything. Yup, I -- no, I'm not gonna give you like -- no, we're not doing that anymore. Mini green screen? No, how the fuck do people fuck with that? Never mind, we're not doing that anymore. Life sentence Larry? I can see your pores? Don't -- don't look at me! This is why I never stream with a camera that's this good, because people can see like -- my nose goes this way, one of my eyes has like a red line in it, my hair's like, getting a little gray up here. I don't want people to know this shit! I'm 25 to half of you! I can't be like pushing 40 to you guys, I have to be able to keep up the appearance of being uh -- I have to keep up the appearance of being a 25 year old! I have to keep the appearance of a 25 year old boy! That was fucking gross. This is a school assembly -- what a weird school assembly this would be if this is what the person is doing. "You kids don't understand! As the principal, I have to keep up appearances! I have to be a 26 year old to you guys, don't you understand? I can't be old to you!" Pushing 40 -- yeah, I know, I am. Your face has too many colors -- no it doesn't. I have a few extra nose hairs, but I don't think that's out of the ordinary. What are you saying -- you're not 20 -- no! Your head is huge? My head is tiny! Okay? Here's a -- here's more perspective. My head is small, I don't have a -- it's cause I was leaning in! Do you know perspectives? Come on, man! Okay -- take your mugshot. Some of you guys -- I just imagine people editing that, and being like "Dude, I found his fucking arrest records! He was wearing the same shirt he was wearing when he streamed that time!" Do a side profile? Okay. No! What the fuck is this stream? I don't want to -- we're supposed to be talking about the dollhouse. I don't want to give you guys like every fucking avenue. Look at what I've done to myself! I gave myself a fucking rash! I gave myself a rash on camera! Okay, so the dollhouse is coming up on the 18th, the 20th -- it's three streams, not just one, we're doing three streams, yes! I'm gonna throw up -- why? The extension is going to be baked into Twitch, a lot of people have been asking this question, I wanna make sure this is very much taken care of, um -- you're in a porn mansion -- just listen for a second, we can get back to that in a second. So, the extension is baked -- it's an actual Twitch extension. There's not gonna be anything in the chat room, so you're not gonna be chatting and doing commands or anything, no, it's an extension, an elaborate extension that's baked in through Twitch. So, people were -- you want me to put something back here to people stop freaking out -- hold on, I have a... Do we have like a picture or a painting or something, I don't know? So we can't see chat -- no, chat will be available, you can chat in the chat room, it's just none of the actions will be in the chat. You'll be actually physically clicking on the screen on an extension. That is baked through Twitch. You need a louder mic? I thought people told me to lower it because it was so annoying. How's that? Alright, is that better? I think it's gonna work -- I believe a portion of the extension does work on mobile. I think mobile does work. So, I don't know if every single feature is gonna work on mobile, but I think -- I probably have to get that corrected, but I believe mobile works. For at least some of it. The mic sucks? I know. What are you -- there's nothing I can do about it. Are you -- what are you -- is this supposed to -- oh, also really important: I wanna make sure people are really clear on what you are gonna be able to do on this stream. I've seen comments like "oh, we can make him just like sit and zerk off for like fucking two hours?" That's... That's -- no! Why -- no! This is a game, this is a game where you have to play by the rules of the game, essentially. You guys will have a lot of things you'll be able to do. As if you were playing some kind of simulation type games. This is not a scenario why somebody just like tells me to go like zerk off into the fridge for an hour. So, that's not how this is gonna work. You'll have a lot of shit to do, but that's not one of them. I heard people say like, oh, can we -- oh, okay, so ladies and gentlemen it has just been confirmed by Community Jake: all features work on mobile! Just like -- somebody was like coming in here, and I was like "holy shit, what happened?" So, all features do work on mobile. No pants? Right, somebody just asked something, what was it? You're on record calling -- no, I'm not gonna be on record in front of like, this like court mic. What do you got? What is that? That looks worse! That looks way worse! It's not -- that looks like... That looks like I'm streaming from like the bottom of a dumpster! This is trash all down here, and that's like stuck on the lid! Didn't Oscar the Grouch have like a fucking entire civilization in the trash can, right? So, alright. You need more garbage back there. Do a dumpster stream. Okay, let's -- one thing at a time, please. One thing at a time. Because, this stream that you're gonna see in the next week, right, we were just in chat and somebody was like, "oh, hey man, this would be cool". It would be cool, wouldn't it? Oh, imagine if I like, if I was in a dollhouse and you guys controlled what I was doing, and we did like a real life life simulator? Ha-ha-ha that's funny. Oh, dear, literally... Big shit later and here we are, so can we do like one at a time? I don't want to go now contact a bunch of people like, okay, I got to do a dumpster stream, and it's gonna cost this amount of money, and I need to have like a whole fucking civilization in the dumpster -- like no, one thing at a time. Are there any breaks? Yeah, so you guys will be able to buy stuff, I wanna make that clear too, because people think "oh, we're just gonna be able to make him take a shit a thousand times." You are gonna have a buy menu -- yes, with lots and lots and lots of option. You'll have money, you'll have a currency that you'll have to deal with. There -- this is not just me walk around a room without any interaction from you guys, or just simply telling me where to go. You're gonna be able to put furniture wherever the fuck you want. It's baked into the extension. So, it's, it's not real money. Will there be gambling? I don't -- I don't know. I don't think so. Not of the top of my head. It's gonna be bonkers? I can at least say it'll be interesting to watch. Buy a slot machine -- I wonder if there's anything -- I don't know, we'll see. Is it channel points? No, it is it's own currency in the extension baked into the game. Not channel points. Is there gonna be a shit pants button? You guys are gonna have to take care of me. Lemme make that clear as well, you're gonna have things that you'll need to manage. It's not just me walking around and pooping -- I have quite a few needs that you'll have to attend to. Can you cook? Yes. I don't wanna give too much shit away, I really don't, but yes, you're gonna be able to do things. He's a maniac. Debatable. Is there a mana bar? No, but there's something... There are things that need to be managed, that could be potentially bar related. How many things will be baked? I don't know. That's not, like a fire alarm. Can you guys hear that? Yeah, just uh, leave it over there for now. There's like a fucking lift over here! I told you I'm in the dumpster! There -- there's -- there may or may not be a lift for some reason over here, I don't know. Do a recap -- okay, quick recap -- extension works on mobile, works on desktop, nothing special, you just need to be on Twitch. Kitboga's gonna be there! Ludwig's gonna be there! There might even be a few others, that you may or may not know. How do we control you? Through the extension. The extension is gonna have a menu that -- I want -- we're doing this for three days, so this is something important to remember too, the first stream that we're doing on, I believe it's Wednesday the 18th -- the first stream is a tutorial. It really is. Because I wanna make sure that everything works, that people know how the extension works, how well does it works, does anything need to be changed, tweaked, the first stream is a tutorial. I'm just gonna say it, because that's the way it is -- but -- wait what are you saying? Why are you saying Joe Biden? No, no he's not here. I was like why are they saying that? Doesn't make any sense. But anyways, the first stream is a tutorial, for everyone to learn how the extension works. That doesn't mean it's not gonna be an experiment and fun stream, but that's why we did three of them. Because we want you guys to have the ability to learn how it works, and keep going, because one stream is just not gonna do it. If we did one stream, or maybe two streams, by the times you guys figured out how it works, ope, that's it! See you late. No, we wanted time for you guys to play around and have fun. So. So there will be plenty of instructions, there will be plenty of ways for you guys to figure out what's going on, and we'll -- we're doing it for three days. How many hours? Um... That's a really good question. It really depends on a few factors. But, each -- it will be -- each stream will be probably at least -- besides -- the first stream is like a tutorial, and remember -- because it's the 18th, the 20th and the 21st, so, that day, that first stream, is probably gonna be pretty short, just to make sure, things go right, people know what they're doing, tutorial goes well, we do some fun stuff, and then we have a day to get other stuff prepared make sure we can get it all ready, and then day 2 and 3 are like... here we go. And I would assume that it's probably gonna be like 3 to 6 hours a day. Probably 4 to 6 hours each stream. So it's not gonna be like a 2 hour stream for each one. It'll probably be like 4, 5, 6 hours each. What else are you saying here. Is it a tutorial? Yeah, it's a very elaborate extension, so it's like not just simply writing -- cause remember, the carnival stream had people just doing inputs into the stream, like up down fire up down left right forward forward back back back, right? This is multiple menus, multiple things to click on, multiple things to look at, so you're gonna need the time to figure out how to ease it. Can -- can -- is there -- no. What are you saying? Snob Andy? What? Snob Andy? Why are you calling me Snob Andy? Is that what you said? I didn't even see it? How many NPCs will there be? Enough. Lemme -- do I need to just confirm that there are NPCs? I don't know, it could be, I don't know, you'll see. There'll be enough. Fuck -- I don't know, fuck around and find out! Wake me up when he plays Sly Cooper. And I'm here to announce, ladies and gentlemen, that after the dollhouse streams, I will -- I will -- I'm not playing Sly Cooper. I tried to play it, it ran like shit and I couldn't get it to work. But I'll play it on like the remastered ones -- why am I even responding to this person? Why am I responding to this? This has nothing to do with the stream, like, oh, lemme tell you when I'll play Sly Cooper -- why am I even responding? That person just wrote -- why am I even replying to that person? What am I doing? It was just like -- I don't know, small words work on me. Like: sly. Oh, that's easy, that's easy word, I know what that is, 1, 2, 3. Small words, I see them, and go oh, okay. What's this stream about anyways? In offline chat 4 and a half years ago, we made a few offhand comments about being in like a simulator, and like, what if I was in a dollhouse, and you guys could control me, and "funny things" happened. Oh, that's seems like a good idea, and four years later we decided to do it. Eren -- fuck! God! Ow, my pinky! Why don't you use that for the court session? "Uh, Mr. Elbertson, are you aware of the charges?" Eren -- ow! Like, fucking lock him up! I guess he did it! Comic-con panel -- alright yeah, I'll do a comic-con. Why do they all sit like this? Yo, what's up? Hey, hey, what's going on? Is there a reason -- does this make you look more relatable or something? Cause I was like -- yeah, that was a pretty sick project we worked on, it was pretty cool, yeah, got a couple of funny fucking stories for you -- like what is this doing up here? Why is this up here? Put it down here. And sit like this. I don't get it. That's not relatable. Because they're waiting to leave. Well, lemme put these on -- no, I'm not gonna play around with these toys around here. Not toys. What's the bag behind you? Part of the dollhouse ARG. It's, Community Jake put it back here. There's no ARG, wanna make that clear. Eat the mic, no. Can you -- do you have any pets that we can pet -- there are no pets, there are no pets. Wanna make that clear. He's unaware? There's no Otto DLC? No, unfortunately no Otto DLC. He doesn't know, don't say anything. What -- is there something on my face? Something on my nose, what's wrong with me? What? What's wrong? I'm gonna burp and I can't turn the camera off, because I don't know how, this is not, this isn't my usual setup, so I'm gonna have to lean back for a sec -- I'm back. Don't tell him. I'm sure I'll read it on like Reddit tomorrow. He had boogers all over his hair. Well, whatever. What are the times again? At -- I just got like stuck up here, did you see that? So -- no, this is in August, so Wednesday the 18th, we're starting at 12 p.m. Pacific, and then Friday the 20th, we are starting at 12 p.m. Pacific, and then Saturday, we're starting at 9 a.m. Pacific, because we want to have as much time as we can. So 12, 12, 9 Pacific. You have a wig on? Ruh! Rip it off. Okay -- I have a question for you. What would you guys say is my good side? This one? Or this one? What's my good side? I would say this is the bad side, because my nose goes that way. Front facing? This side? Or this side? Who cares? Like, really, who gives a shit, what are we talking about? What am I -- you're not talking about it, it's me talking about it, I don't know why I am. Pfff -- I missed! I'm looking at the preview, and I was gonna try to like pretend to snort the mic, and I went the wrong way, so I just looked like a fucking maniac! Cause that would've been like, oh, he's sniffing the mic! But instead I just went like pffff. Is the Minecraft server still being developed? Yes, just that this was such a big project that everything else had to go on hold. But as of next week, we'll be able to focus on more stuff. How do you eat peanut butter? 50% of the time out of the jar with a spoon, with some fluff next to me, so I do one big spoon of peanut butter and then one big spoon of fluff, let it mess around in my mouth and then swallow it, and the other half is like... On a piece of toast, just spread it on a piece of toast. And if you've never done the first one, then, I don't even know how I could explain that to you, it's unbelievably good. I'm going to die -- guys, I don't -- this is not a thing I do every day. I don't eat like a jar of peanut butter every day. Although I have Googled before, do you die if you eat a whole jar of peanut butter. I've Googled that, I actually have Googled that. And the answer is no, but be careful. So, yeah. But I love peanut butter though, it's awesome. Cholesterol -- yeah, you don't eat a whole jar of anything! Like -- that -- the Google result should be -- Google, what happens if you eat a whole jar of pickles? I don't know, but don't do it. Just eat, like 4. Google what happens if you eat a whole jar of peanut butter? I don't know, probably nothing good. Don't do it, just have like 3 or 4 serving. Just have a serving. You could say that for anything, any food product. Don't eat the whole thing -- just eat like one or two servings. That's it. Do I like cantaloupe? No. Sorry. What about moderation -- yeah, just moderation, moderate. Do you like bananas? Yes. AMA stream? Yeah, that's what this is. Do you have more than one food product in your house? Yeah, of course I do. What do you think I am, dumb? Can you guys ask dollhouse related questions? Like, what my favorite peanut butter is is not relevant to the dollhouse stream. What happens if we take good care of you? Well, then I will probably be more happy existence? Gonna have to make money somehow, right? Just gonna have to make sure I'm taken care of, so I can perform, right? What's your favorite Sonic character? Um... That's a really hard question. Who's my favorite Sonic character? I don't want to say Tails, that's easy, right? Robotnic's easy too. Um... Can I just say Jim Carrey? That's my answer. Will you speak in -- no, it's gonna be in English. Not gonna be doing any other dialect or any language that's not English, it's gonna be English. We thought a long time if I should talk in a non-existent language, but that turned to be something that I did not want to do for more than like, 12 to 18 fucking hours. You know what I mean? If each one of these streams was like 4, 5, 6 hours long, I don't want to talk in like fake -- not -- like a fake language for that long, it would be unbearable. What else are you saying? Are you gonna do a funny accent? I -- you -- uh -- probably not? It's just me! I'm not gonna answer specific questions about specific things that you want to see there, or if certain objects are there, you're just gonna have to see. You're just gonna have to play the game. Hold on, somebody just -- somebody had like an interesting question, what did you say? Do we get to do a character customizer? [mumbling] I just keep touching this with my fucking mouth! Is there a character customizer? I really am at like a court session. "Uh, I'm not gonna answer that question your honor" "okay, so that means you did it." "I'm just not gonna answer that question, I don't think I need to answer that question, if there will or will not be character customization. I don't think I have to answer that your honor --" I keep touching this fucking this with my mouth. This stream is so fucking vague, it kind of has to be though, because there's a lot of surprises, there's a lot of things that I think people don't know are gonna happen, and I'd rather not just sit here 3 or 4 days before the stream and tell you all the fun, potential things you can do. I'd rather you figure that out on your own. Yes, there's a fucking -- yes, there's a character creator. Okay? There you go. Yes. Yes there is a character creator. Yes. That's all you're getting. That's literally the only thing you're getting. Can we adjust your height? No. And I specifically made sure that was something we weren't gonna do. What were the dates and times of the streams? 18th -- the 18th, the 20th and the 21st, the 18th and 20th the streams will be at 12 p.m. Pacific, the 21st stream will be at 9 a.m. Pacific. Each stream is scheduled to go for approximately 3 to 6 hours depending on chat interaction and scenario playouts. How's your body feeling? I'm feeling okay. I'm still dealing with it, and I'm just kind of -- I'm powering through a handful of problems right now, and I don't know what Greek god I angered in the last 2 or 3 weeks, but a few things have just piled on here, like especially, like the last 48 hours too, that... Oy, I'm powering through as hard as I can. And I'm on some medication to help with stuff that's happening, and I should be good to go. I'm, I'm... This stream is so interesting to me, there's tons of people involved, tons of awesome people have worked on this, and maybe when, eventually, we'll do something, like after the stream is over, we'll get people together to talk about it. Because it's not just me that had anything to do with this -- yes, I was like this is what I want, this is what I think will be funny, this is what I think will be fun. But it took a monu-fucken-mental amount of people, and a monumental amount of financial support, from different organizations, that it's -- I couldn't be happier with how this is turning out. I really hope it's a lot of fun for everybody, I'm really excited, I hope it's as interesting and as fun as I hope it is. And if it is, great, and if it isn't, then we tried to do something interesting. But I cannot see a scenario where this isn't worth, at least watching for a while. I've seen a lot of things the last few days, that I'm just so... I'm very proud and very grateful for the people that have been working on this project, it's fucking unbelievable, so... I can't wait for you to see it, I really can't. He's gonna cry! Show your feet! Okay, let's show our bare feet! What are are talking -- what are you doing here? What? Worst face 2021! Who else is in the room? At the moment, nobody. Your honor! Your honor... What's happening? Booger? Is the echo -- I'm just in a big room. A big empty room. Blink if you're in trouble -- I have to blink normally as a human! I'm fine, nothing's wrong, I'm blinking now because I'm literally a human that blinks, that's how we secrete liquid into our eyelids to make them, to keep our eyes moisturized! I have to blink! I'M FINE! I'm fine right now, okay? And people are gonna clip these weird images of me with like an HD camera and be like -- what's wrong with him? You're gonna take that, and it's gonna be like this, and people are gonna be like "is he alright? What's happened to him?" I'm -- I'm fine. So, I -- there's a lot of work still to be done, I just wanted to come in and make sure that I talked to you guys one on one before the stream happened, because I wasn't able to last week, I wanted to play the Sims 3, I have a shit load of mods on the Sims 3 and that game is an absolute just clown show just waiting to happen, I'll probably do that after the dollhouse stuff, but I wanted to at least say hello, and explain a little more detail on stuff and give you a little more insight on it. So, I'm glad I was at least able to to do this for the period I have here. There's still a lot of shit to get done, I'm gonna get back to it, and I can't wait for you to see the finished product, hopefully it's as interesting as I hope it is. How much power does one person have? One person have not power over anybody else. It's gonna be a system based off a democracy type system, and there is -- why, what? It's baked in through Twitch, is pretty much how it works. Do we get money for watching the stream? So, there's gonna be a monetary system that you guys will have to manage, and whether that's sending me to work, right? Whether that's managing what kind of thing you wanna buy, where do you want to put it, you're gonna have a lot of things to worry about, and hopefully you can work together to have a good outcome. Otherwise, I'm... I'm gonna be in trouble. Where will you work? These are all things you will be shown very shortly. Are there microtransactions? The entire game is a microtransaction if you think about it. You're gonna be spending money on all kinds of stuff. So, the whole thing is a microtransaction. But you don't have to pay for anything, you just have to watch. Chat's going very fast, lemme see... Will the extension work on every web navigator? I believe all through desktop and mobile has been confirmed that it will work. What if we kill you in the tutorial? There's -- I -- um... I don't wanna give you guys any ways to make this any different than it could be, so... Like, take care of me! Take care of me! I'm a growing boy, I'm pushing 40, but I'm a growing boy still! How much interaction with the outside world? I -- I'm trying -- I think you mean how much interaction with other people, or things that come to the dollhouse, is that what you mean? Cause you guys -- I will be communicating with you, as well as potential NPCs, and people that will or will not arrive, so there will be a lot of interactions between those people. Will I go outside? You fucking answer it. You're my lawyer. Stop acting like a teen, you're 35 dude. I'm not act being like -- alright, me getting angry and like loud is like a teen, like "that's not what I'm doing, mom!" Alright, I'll be an adult. How is it gonna work with people in the chat? The chat room is just gonna be the chat room. You're free to just chat like you normally would, everything is gonna be baked in through Twitch as an extension. So the chat's gonna be free for you guys to talk. Will there be action? You wanna take that one? How much -- how much baking are you allowed to do? Is there even like a limit of how much baking you should have? Will there be Quicktime events? Hey, you want some bacon, lawyer? You want some bacon? How will the camera work? Just wait. Will there be pyrotechnics? Yeah! [singing] I don't know. You guys can hear the like -- explosions, you can hear the fireworks that just went off? Good. Okay. I am gonna go, there's a lot to do -- will there be ragdoll physics? [exaggerated whimsical laughter] What the fuck was that? No, I -- just -- I don't wanna tell you guys anything, you're just gonna have to watch. That was such a smug asshole, like "oh, is there ragdoll physics?" [exaggerated whimsical laughter] Can we make you eat a jar of fluff? Uh... Just wait, I don't know. Oh, baked in through Twitch! Yeah, that's been the mon -- the -- what am I trying to say? The motto of this stream! Is, it's baked in through Twitch! But yeah, we have Coinbase is now presenting a sponsor on the stream, we're able to do a lot of stuff, it's -- I'm fucking insanely excited. I'm gonna power through some of these issues I have, because I think it's gonna be really fun -- it's at least gonna be fun to do. So the next time you see this stream live, it will be on the 18th, at 12 p.m. Pacific, we are gonna go for it, it will be a tutorial, and hopefully you learn how to play it, and we'll see how it goes! I'm really, really excited. I can't wait. So I'm just gonna go, and just turn the stream off, I'll see you guys on, um... Lemme make sure this is correct, my brain is -- I'm slowing down here... Yes. So I will see you guys Wednesday the 18th, that's only a few days from now, at 12 p.m. Pacific, that's the next time this stream will be live. The extension will be there, and you're gonna learn how to play. See you soon. I'm very excited. One more for the road, right? Why's it still on? Why's it not turning off? Oh, monkaS!


xDAI DAO Community Update #10: Eporio, Swapr & Oman Integrations

https://preview.redd.it/bv8jcrqvolh71.png?width=1280&format=png&auto=webp&s=11e06fc017673188b6ecdaa4a708279963e3dc68

As a xDAI-specific support DAO, our job is chiefly to promote the expansive ecosystem of dApps that call xDAI home, inspired by the no-nonsense approach Igor Barinov, Victor Baranov, Vadim Arasev & other impactful members of the xDAI dev team take to delivering solutions and community building behind this sensational Layer-2 EVM platform.

xDAI's Vibrant dApp Ecosystem

In short, we help fledgling platforms scale. 

In crypto there's a distasteful tendency, especially among Blockchain-specific VCs, to have people pitch them on a project, thank them for their time, and immediately begin forking the project before the seat being sat in has had time to cool. 

We like to encourage first-mover advantage and active innovation on xDAI so when a project comes in and delivers a working, honest-to-goodness project and stakes several thousand of their own xDAI into the project. If the majority of devs sat on the sideline and waited for someone else to build out a use case or have another set of devs figure out all of the bugs, allowing them to swoop in later with this cleaned-up code, then the impetus for development would be reversed. This is less than ideal.

One of the projects that enjoys a robust community, and a 20MM market cap, is DxDAO. Their projects include Swapr, a fun Uniswap-type 50-50 staking pool platform with farming capabilities & Omen, the prediction pool, based on the Gnosis Conditional Tokens.

From earlier in the month, we starting the liquidity mining farm on Swapr. It was a success and the participants enjoyed a 10,000 RxDAI earnings from about 200 WxDAI, so essentially 50% for 2 weeks--not too bad of an investment. The "APY" in this instance is off because it's a 14-day lock as opposed to a yearly calculation. 50% expressed in an APR would turn $1 into $37876 in a year's time so actual APR is sky-high. This really is a way of introducing a way of awarding long-standing liquidity providers and airdrop recipients for helping to provide liquidity to our xDAI DAO. 

Essentially, you create liquidity in the RxDAI/WxDAI pool on Swapr then add those LP tokens to the Reward Program. During this 2-week window LP interest is withdrawable, but principal is not. 

Swapr's RxDAI/WxDAI Farm Pool

Mint LP tokens then Stake to Join the RxDAI Farm Pool

What we we doing with this liquidity?

Well, this takes us to Omen, the aforementioned prediction marketplace. 

This platform makes it easy to introduce three of the most popular markets: sports, options, and 

If you're a fellow Solidity developer and want to get into the weeds of conditional and scaling markets, you're welcome to do so. We're always looking for Solidity devs as part of the DAO here. 

So for this market, we're working with one of our sports bet aggregator developers, a member of the DAO, that can create parlay bets through decentralized sports protocols. What this permits him to do is create a market for this where someone can set-up, decentralized, a 99x parlay based on the unlikely event of 3 draws on 3 important premier league games.

As part of this categorical market, after the events have happened the market creator, this DAO's devs, can post a bond and determine the winner. During the 24-hour settlement period anyone can post a bond to have the decision contested and go to a trusted, neutral 3rd party: Kleros.  

This removes the difficulty of having invalid markets, the type of problems that plagued Augur for the longest time. Market makers would create a market like "Will Bitcoin be worth more than $1 in a week" or something that seemed highly probable to be a YES in terms of a binary result. After there would be a rush of bets in favor of that event, they would set the market as invalid and it would return value at a 50/50 split, such that the 1% tokens they held--and where unpopular--that Bitcoin would be sub-$1 now just 50x-ed. 

Omen offers an abundance of provisions to prevent against such chicanery. 

So, for this draw market, someone would put in, say 0.01 xDAI, that these regulation time draws would not result. If all 3 happened then their 0.01 would be returned with 1, a 100x return before fees.

Omen Sports Prediction Market Created by xDAI DAO Liquidity Partner

Based on demand, we hope to encourage Omen-specific bets for sportsbook or racebook markets, providing a trading fee for the xDAI DAO and demonstrated traction for Oman/DxDAO.

More liquidity for RxDAI, our 100:1 xDAI DAO stablecoin, means that we can provide deeper liquidity for these markets, and, in turn, earn more trading fees for making the markets in the process. 

Also, market making in general affords ample opportunity for the DAO to materialize low-risk profits.

For example, in this circumstance, the current NAV discount on GBTC is -10%. Additional liquidity will permit the opportunity for a squeeze where one might go long GBTC & short BTC/USD such that if there is a convergence that a 10% jump would more than make-up for the loss on a "Yes" bet. There are also risk management measures such that if the NAV discount went to -1%, say, that one would hedge the position so that the loss would only actually be 3x--going from 87.15% to 50%--that would be handsomely eclipsed by the 10% appreciation on the GBTC/BTC squeeze.

Omen Categorial Crypto Prediction Market Created by xDAI DAO Liquidity Partner

If properly risk-mitigated, the only risk on many of these trades is the platform risk, and when it comes to clean code, which this is to my eye and the thousands of DXDAO investors, the possibility of platform risk is historically low. You may hear about exploits on the news, but the number of dApps--run by well-regarded, top-level tech talent--versus the projects that get rug pulled are vastly tilted in favor of honest projects ruling the day. Almost always there are red flags that engage in scammy, shady behavior in the weeks leading-up to a rug-pull or code with glaring vulnerability holes, ripe for penetration. We feel it's a risk worth taking to encourage dApp development and innovation so, as an innovation studio and xDAI nurturing DAO, we are in the business of helping projects, all the while mitigating risk and being savvy while traversing the Wild Wild West of crypto.

Speaking of trading, remember our Epor.io/NFTsDAO push for NFTs linked to crypto positions, in this instance 1000 Doge.

xDAI DAO's Crypto-linked NFT on Epor.io, a project in partnership with NFTsDAO

Ways to get RxDAI:

  1. NFT: on xDAI NFT platform or Opensea
  2. Honeyswap/Swapr Pools
  3. Monthly airdrops for community engagements from posting or commenting on our r/xDAI DAO Home

What to do with RxDAI:

  1. Stake it on Swapr's RxDAI Farm
  2. Use it as a trading hedge to get in our out of a volatile crypto position.
  3. Profit by buying it when it's less than $0.01 in value on Swapr or Honeyswap, as the liquidity bots push the price back to $0.01 by default.

Goals for the DAO:

- Grow xDAI into a top tier Layer-2 EVM, based on market cap and utility

- Create a bag to HODL for top community members and whales, extending liquidity to our DAO

- Create weekly updates and quality content that speaks to the values and important use cases of the community

- Extend value to those contributing most generously to the DAO and allow them to build their portfolio and ignite their careers in blockchain or tech. 

- Continually provide high APR means for active community members to receive value for being LP in liquidity pools. 


2021Q3 - Clarifications regarding subreddit rules as we enter the next stage of Algorand's DeFi development!

Dear Algonauts

To begin with, I would like to affirm our continued commitment to ensuring that /r/AlgorandOfficial continues to meet the high expectations set on it by the community. It is important that people feel that our rules are unambiguous and that our moderation-style is consistent and congruent with them.

Recently /u/Fantastic-Station-22 posted a thread titled Yieldly rewards have been astounding. #generationalwealth. In their post, /u/Fantastic-Station-22 writes about their experience using Yieldly, how much they are earning daily by staking their Algo in Yieldly alongside the participation rewards they are accumulating. They also include some calculations about future rewards, extrapolating off of current yields.

The post got reported at least twice, and two users commented on it saying that it breaks our subreddit rules.

Up until recently, the major financial decisions you could make in the Algorand world were pretty much the following: choosing whether to buy or sell Algos, and deciding on which wallet to store them in.

Regarding the former, our rules are clear: no price or trading discussion (Rule 4). Among different reasons, we do not want this subreddit to be swamped with threads on how the price went up or down based off of what so and so said about so and so, which caused a crash in Bitcoin which in turn led to a fall in the price of Algo (you get the point). We definitely do not want the subreddit to be an avenue for malicious crypto gurus to run their own pump and dump schemes, manipulating the price with hype and FUD (Rule 5). We also do not want people to make posts solely bragging about how much Algo they own and how much they have made (Rule 7).

Obviously, that is not to say we do not want to discuss any positive or negative news about Algorand. At the end of the day we are all holders of the coin. Users are, and have been, free to discuss their perceived merits and demerits of Algorand. But the focus should be on topics such as concrete aspects of the protocol, choices made by the Algorand Inc and Foundation, events happening in the ecosystem, and so on.

It's currently August and we are halfway through Q3. A number of projects that have been in the pipeline are coming out. As mentioned, Yieldly has been out and a number of people have been putting their Algo into it. Tinyman is currently trialing on the Algorand testnet, AlgoDex has reported great progress too. Folks.Finance will allow you to deposit your crypto as collateral for borrowing stablecoins, and their roadmap says they hope to launch Q1 next year. AlgoMint will allow for trading wrapped assets (e.g., Bitcoin) as tokens on Algorand, and their external audit is due sometime this month. The list continues...

A lot of these projects will come with their own governance tokens that will also be tradeable.

The point is, the Algorand DeFi space will see a lot of activity, a lot of projects that will compete for your attention and possibly your Algo. This is awesome.

In terms of how our rules apply, you should see them as extending to cover these projects as well.

We want the members of this subreddit to discuss and compare different dApps and what profit you can gain. Just like users have been free to ask if they should store their Algo in Coinbase (they keep 25% of your participation rewards), or the official mobile wallet (you get 100%), or to try out that "3% over 15 day APY" deal that Binance had (because they were speculating); people will be free to compare which liquidity pool they should store their Algo in, sharing relevant information and helping users interpret what different dApps state and claim.

Calculations and math are always welcome (e.g, this discussion on optimal compounding frequency). But they should be done with example figures. As part of Rule 7, we discourage using examples with your own balances.

Those governance tokens? Yes, Rules 4 and 5 apply there too. Do not create threads speculating on what e.g. the price of YLDL will be months from now. Do not create fake news, hype or FUD; or spread misinformation about a project, with or without a value-bearing tradeable token. And, like Rule 7 says, please do not publicly share your balance of tokens. Take it in the DMs. It is for your own good.

Note that our rules are not set in stone and are liable to be changed as the dynamics of the Algorand ecosystem and this subreddit change. Certain posts that are allowed today might no longer be allowed months from now, or vice-versa. We will keep you informed and we will always welcome feedback from the community.

Sincerely, the Mods


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Have you thought about getting into Bitcoin but weren't sure about how it works? Thought it was too confusing to get into? Well you can get started with a free £10 Bitcoin to help you get started on your Bitcoin journey with no obligations at all!

You just need to want to get into Bitcoin, be in the UK, over 18 and have ID! That is it!

https://www.luno.com/en/signup

  1. Use the website or download the app and register https://www.luno.com/en/signup
  2. Verify ID
  3. Enter code BPHWRIGHT in the rewards page
  4. Get £10 of Bitcoin instantly

I would recommend saving the £10 for future rather than checking the value every few days.

Bitcoin is something that is really good to get into and a free £10 helps you get you on your journey.

If you need more help signing up, there is another step by step guide here: https://medium.com/original-crypto-guy/how-to-set-up-a-basic-bitcoin-wallet-73f46c612a3c

Or feel free to send me a message if you still need help and I will gladly help you!

Just remember you have to be in the UK to sign up. This offer is purely for the UK.

Once you have joined I think you should learn more by checking out these wonderful FREE events with more info for newbies or not so new people on Bitcoin! You can learn a lot at no cost to you. Check them out now: https://medium.com/original-crypto-guy/upcoming-events-by-jason-deane-aea187d03a10


WOW! Totally FREE £10 Bitcoin instantly from Luno with NO SPEND needed for new customers looking to get into crypto!! (UK Only)

WOW! Totally FREE £10 Bitcoin instantly from Luno with NO SPEND needed for new customers looking to get into crypto!! (UK Only)

Luno are giving people in the UK £10 completely free with no deposit needed to people who are new to Bitcoin and want to get into it. Totally free £10 Bitcoin!

Have you thought about getting into Bitcoin but weren't sure about how it works? Thought it was too confusing to get into? Well you can get started with a free £10 Bitcoin to help you get started on your Bitcoin journey with no obligations at all!

You just need to want to get into Bitcoin, be in the UK, over 18 and have ID! That is it!

https://www.luno.com/en/signup

  1. Use the website or download the app and register https://www.luno.com/en/signup
  2. Verify ID
  3. Enter code BPHWRIGHT in the rewards page
  4. Get £10 of Bitcoin instantly

I would recommend saving the £10 for future rather than checking the value every few days.

Bitcoin is something that is really good to get into and a free £10 helps you get you on your journey.

If you need more help signing up, there is another step by step guide here: https://medium.com/original-crypto-guy/how-to-set-up-a-basic-bitcoin-wallet-73f46c612a3c

Or feel free to send me a message if you still need help and I will gladly help you!

Just remember you have to be in the UK to sign up. This offer is purely for the UK.

Once you have joined I think you should learn more by checking out these wonderful FREE events with more info for newbies or not so new people on Bitcoin! You can learn a lot at no cost to you. Check them out now: https://medium.com/original-crypto-guy/upcoming-events-by-jason-deane-aea187d03a10


WOW! Totally FREE £10 Bitcoin instantly from Luno with NO SPEND needed for new customers looking to get into crypto!! (UK Only)

WOW! Totally FREE £10 Bitcoin instantly from Luno with NO SPEND needed for new customers looking to get into crypto!! (UK Only)

Luno are giving people in the UK £10 completely free with no deposit needed to people who are new to Bitcoin and want to get into it. Totally free £10 Bitcoin!

Have you thought about getting into Bitcoin but weren't sure about how it works? Thought it was too confusing to get into? Well you can get started with a free £10 Bitcoin to help you get started on your Bitcoin journey with no obligations at all!

You just need to want to get into Bitcoin, be in the UK, over 18 and have ID! That is it!

https://www.luno.com/en/signup

  1. Use the website or download the app and register https://www.luno.com/en/signup
  2. Verify ID
  3. Enter code BPHWRIGHT in the rewards page
  4. Get £10 of Bitcoin instantly

I would recommend saving the £10 for future rather than checking the value every few days.

Bitcoin is something that is really good to get into and a free £10 helps you get you on your journey.

If you need more help signing up, there is another step by step guide here: https://medium.com/original-crypto-guy/how-to-set-up-a-basic-bitcoin-wallet-73f46c612a3c

Or feel free to send me a message if you still need help and I will gladly help you!

Just remember you have to be in the UK to sign up. This offer is purely for the UK.

Once you have joined I think you should learn more by checking out these wonderful FREE events with more info for newbies or not so new people on Bitcoin! You can learn a lot at no cost to you. Check them out now: https://medium.com/original-crypto-guy/upcoming-events-by-jason-deane-aea187d03a10


WOW! Totally FREE £10 Bitcoin instantly from Luno with NO SPEND needed for new customers looking to get into crypto!! (UK Only)

WOW! Totally FREE £10 Bitcoin instantly from Luno with NO SPEND needed for new customers looking to get into crypto!! (UK Only)

Luno are giving people in the UK £10 completely free with no deposit needed to people who are new to Bitcoin and want to get into it. Totally free £10 Bitcoin!

Have you thought about getting into Bitcoin but weren't sure about how it works? Thought it was too confusing to get into? Well you can get started with a free £10 Bitcoin to help you get started on your Bitcoin journey with no obligations at all!

You just need to want to get into Bitcoin, be in the UK, over 18 and have ID! That is it!

https://www.luno.com/en/signup

  1. Use the website or download the app and register https://www.luno.com/en/signup
  2. Verify ID
  3. Enter code BPHWRIGHT in the rewards page
  4. Get £10 of Bitcoin instantly

I would recommend saving the £10 for future rather than checking the value every few days.

Bitcoin is something that is really good to get into and a free £10 helps you get you on your journey.

If you need more help signing up, there is another step by step guide here: https://medium.com/original-crypto-guy/how-to-set-up-a-basic-bitcoin-wallet-73f46c612a3c

Or feel free to send me a message if you still need help and I will gladly help you!

Just remember you have to be in the UK to sign up. This offer is purely for the UK.

Once you have joined I think you should learn more by checking out these wonderful FREE events with more info for newbies or not so new people on Bitcoin! You can learn a lot at no cost to you. Check them out now: https://medium.com/original-crypto-guy/upcoming-events-by-jason-deane-aea187d03a10


WOW! Totally FREE £10 Bitcoin instantly from Luno with NO SPEND needed for new customers looking to get into crypto!! (UK Only)

WOW! Totally FREE £10 Bitcoin instantly from Luno with NO SPEND needed for new customers looking to get into crypto!! (UK Only)

Luno are giving people in the UK £10 completely free with no deposit needed to people who are new to Bitcoin and want to get into it. Totally free £10 Bitcoin!

Have you thought about getting into Bitcoin but weren't sure about how it works? Thought it was too confusing to get into? Well you can get started with a free £10 Bitcoin to help you get started on your Bitcoin journey with no obligations at all!

You just need to want to get into Bitcoin, be in the UK, over 18 and have ID! That is it!

https://www.luno.com/en/signup

  1. Use the website or download the app and register https://www.luno.com/en/signup
  2. Verify ID
  3. Enter code BPHWRIGHT in the rewards page
  4. Get £10 of Bitcoin instantly

I would recommend saving the £10 for future rather than checking the value every few days.

Bitcoin is something that is really good to get into and a free £10 helps you get you on your journey.

If you need more help signing up, there is another step by step guide here: https://medium.com/original-crypto-guy/how-to-set-up-a-basic-bitcoin-wallet-73f46c612a3c

Or feel free to send me a message if you still need help and I will gladly help you!

Just remember you have to be in the UK to sign up. This offer is purely for the UK.

Once you have joined I think you should learn more by checking out these wonderful FREE events with more info for newbies or not so new people on Bitcoin! You can learn a lot at no cost to you. Check them out now: https://medium.com/original-crypto-guy/upcoming-events-by-jason-deane-aea187d03a10


WOW! Totally FREE £10 Bitcoin instantly from Luno with NO SPEND needed for new customers looking to get into crypto!! (UK Only)

WOW! Totally FREE £10 Bitcoin instantly from Luno with NO SPEND needed for new customers looking to get into crypto!! (UK Only)

Luno are giving people in the UK £10 completely free with no deposit needed to people who are new to Bitcoin and want to get into it. Totally free £10 Bitcoin!

Have you thought about getting into Bitcoin but weren't sure about how it works? Thought it was too confusing to get into? Well you can get started with a free £10 Bitcoin to help you get started on your Bitcoin journey with no obligations at all!

You just need to want to get into Bitcoin, be in the UK, over 18 and have ID! That is it!

https://www.luno.com/en/signup

  1. Use the website or download the app and register https://www.luno.com/en/signup
  2. Verify ID
  3. Enter code BPHWRIGHT in the rewards page
  4. Get £10 of Bitcoin instantly

I would recommend saving the £10 for future rather than checking the value every few days.

Bitcoin is something that is really good to get into and a free £10 helps you get you on your journey.

If you need more help signing up, there is another step by step guide here: https://medium.com/original-crypto-guy/how-to-set-up-a-basic-bitcoin-wallet-73f46c612a3c

Or feel free to send me a message if you still need help and I will gladly help you!

Just remember you have to be in the UK to sign up. This offer is purely for the UK.

Once you have joined I think you should learn more by checking out these wonderful FREE events with more info for newbies or not so new people on Bitcoin! You can learn a lot at no cost to you. Check them out now: https://medium.com/original-crypto-guy/upcoming-events-by-jason-deane-aea187d03a10


WOW! Totally FREE £10 Bitcoin instantly from Luno with NO SPEND needed for new customers looking to get into crypto!! (UK Only)

WOW! Totally FREE £10 Bitcoin instantly from Luno with NO SPEND needed for new customers looking to get into crypto!! (UK Only)

Luno are giving people in the UK £10 completely free with no deposit needed to people who are new to Bitcoin and want to get into it. Totally free £10 Bitcoin!

Have you thought about getting into Bitcoin but weren't sure about how it works? Thought it was too confusing to get into? Well you can get started with a free £10 Bitcoin to help you get started on your Bitcoin journey with no obligations at all!

You just need to want to get into Bitcoin, be in the UK, over 18 and have ID! That is it!

https://www.luno.com/en/signup

  1. Use the website or download the app and register https://www.luno.com/en/signup
  2. Verify ID
  3. Enter code BPHWRIGHT in the rewards page
  4. Get £10 of Bitcoin instantly

I would recommend saving the £10 for future rather than checking the value every few days.

Bitcoin is something that is really good to get into and a free £10 helps you get you on your journey.

If you need more help signing up, there is another step by step guide here: https://medium.com/original-crypto-guy/how-to-set-up-a-basic-bitcoin-wallet-73f46c612a3c

Or feel free to send me a message if you still need help and I will gladly help you!

Just remember you have to be in the UK to sign up. This offer is purely for the UK.

Once you have joined I think you should learn more by checking out these wonderful FREE events with more info for newbies or not so new people on Bitcoin! You can learn a lot at no cost to you. Check them out now: https://medium.com/original-crypto-guy/upcoming-events-by-jason-deane-aea187d03a10


"Events like this always force you to look at elements of Bitcoin in ways you might not have considered outside of the new context"

https://twitter.com/shadders333/status/1426164244886683650?s=20

An overview of consensus protocols

What's up everyone. Now before the next bull run really gets going, I thought I'd slap together a post about the different consensus protocols that exists within the crypto space. You know, before everyone stops giving a shit about tech anymore. I don't know about you but when I research a coin, one of the first things I check is how the blockchain network secures itself and how it achieves global consensus. I'll first introduce some basic concepts that constitute the blockchain, followed by the most well-known consensus protocols, namely Proof of Work and Proof of Stake. Then we'll take a look at some more exotic examples and their (dis)advantages. The last part will be about Byzantine fault tolerance which is a bit more technical and not that essential to properly understand consensus protocols.

Security and consensus are inherently difficult subjects, so I purposefully leave out a lot of details for simplicity and to avoid talking about things I don't fully understand myself. Please note that I'm no expert on blockchain technology or consensus protocols. I taught myself most of these things by scrolling reddit and reading whitepapers and some articles. If you notice anything that doesn't seem right, please correct me and I'll edit the post. Also, if you know about some good links on specific subjects, feel free to leave it in a comment and if necessary I'll add it to the post as well.

So, let's get into this.

Blocks

Cryptocurrencies live on a distributed ledger in the form of a blockchain (or not, if you like IOTA). This is effectively a chain of ordered blocks, with each block containing a set of transactions or any events relevant to the network. So a block is basically nothing else than a collection of data (transaction amount, timestamp, wallet addresses, etc.) describing what happened since the last time a block was made. A very well-explained and broader introduction to blockchains can be found here.

Nodes

A node is basically one participant of the network that helps building the blockchain. Each node can put together its own block with transactions but only one of them can add it to the chain. In a centralized system, it doesn't really matter which node gets to add its block to the chain since all of them correspond to the same controlling entity anyway. In a decentralized system however, the other nodes will have to check if the proposed block is valid. In essence, they have to make sure the proposed block does not contain fraudulent or malicious transactions. For example, a node can have a transaction in its proposed block that reverses a transaction in a previous block, which could be a case of double-spending. Or the block could contain transactions that contradict each other chronologically. So the job of the validating nodes is to find out if the proposed block doesn't contradict any statements made by previous blocks. (This is very much simplified, since there exist different types of nodes like full nodes, archival nodes, validator nodes, lightweight nodes,...)

If some group wanted to hijack the network, all they would have to do is create a lot of nodes such that they have a high chance of being chosen to add the next block to the chain. To counteract this, each node has to provide some sort of unfalsifiable resource to run. It is the nature of this resource that defines how the network is secured and what is the consensus mechanism.

Proof of Work (PoW)

PoW was proposed by Satoshi Nakamoto to secure the first ever cryptocurrency blockchain: Bitcoin. But it was first described way back in 1993 as a method to combat junk mail and was properly formalized a bit later in 1999. The required resource to run a node comes in the form of computing power. A node that wants to add its block to the chain has to prove it has this computing power by solving a set of equations (called hash functions) by trial and error. The first node that finds a solution is then verified by the other nodes, which check if the proposed solution actually solves the problem. Once verified, the block gets added and the node that found the solution gets a reward in the form of the native currency. Nodes that try to add their blocks this way are called "miners" since they are basically mining new coins (usually they get paid with transaction fees as well as newly produced coins). Obviously, the more work memory you have at your disposal, the more likely it is that you find a solution before anyone else. So the more computing power you have, the more likely it is your block gets added to the chain and the more control you have over the network.

Some PoW coins are: Bitcoin (BTC), Ethereum ^(but not for long)(ETH), Dogecoin (DOGE), Litecoin (LTC)

Proof of Stake (PoS)

PoS was first introduced by the team behind Peercoin in 2012 (which was actually a PoW/PoS hybrid). In this framework, the resource provided by the nodes is the native currency of the blockchain itself. Nodes have to "stake" some of their tokens in order to be eligible for adding the next block, meaning that they provide tokens to the network in order to help securing it. The term "stake" comes from the fact that a node loses a portion or all of its staked tokens if it has been found to have malicious intents against the network. Nodes are effectively putting their tokens at stake in order to receive a reward. Again, the more coins are staked by a node, the more chance it has to be picked for adding the next block and farming the rewards. Most PoS protocols also introduce coin age as a contributing factor. A node that has been holding its coins for a longer time has more chance to add its block.

  • The pros for PoS are that it consumes much less energy compared to PoW and that regulating the network requires an on-chain resource. If an entity wants control over the blockchain, it has to buy in large amounts of the currency. Not only do you risk losing all of your staked coins if you try to attack the network, you also risk devaluating the currency you are holding yourself. A currency that suffered a successful attack typically drops in value and people will not be likely to accept it as a form of payment.
  • A downside of PoS is that it can encourage hoarding. People with lots of money can stake more and collect more rewards. Meanwhile, people that spend more and drive the economy are not getting any rewards for doing so -> the rich get richer.

Some PoS coins are: Ethereum 2.0 (ETH), Cardano (ADA), Polkadot (DOT), Cosmos (ATOM), Tezos (XTZ)

Some variants:

  • Delegated Proof of Stake (DPoS): With DPoS, stakeholders don't directly verify the block transactions. Instead, they vote for a node that represents them, called a delegate. The delegates then carry out the block proposition and verification as usual. DPoS introduces some elements of centralization, but in a dynamic and democratic manner. Used by EOS, BitShares (BTS) and Steem (STEEM).
  • Pure Proof of Stake (PPoS): This protocol was proposed by Algorand (ALGO) to solve the blockchain trilemma between security, scalability and decentralization. Every token that is held in a wallet is automatically up for stake. Each round, a number of randomly chosen tokens are selected to validate the block and get a reward.
  • Proof of Activity: This is a hybrid mechanism that combines PoW with PoS. First a block is mined with PoW. The mined block only contains the miner address and a random seed. This seed is used to select a group of stakeholders that sign the block with the actual transactions in a PoS manner. Used by Decred (DCR) .
  • Proof of Stake Velocity (PoSV): This mechanism was introduced by Reddcoin (RDD) to somewhat counteract the hoarding problem that affects normal PoS. Instead of the stake weight increasing linearly with coin age, the weight increases logarithmically with time. So newly staked coins gain weights quickly and the weights of older coins gradually reach a maximum. This should encourage people to more actively spend their crypto. PoSV is actually part of a larger category of consensus mechanisms that reward their validators based on how actively they use the network, called Proof of Importance (PoI). A prime example of this is NEM (XEM).

Proof of Authority (PoA)

With PoA, the resource in question is the reputation of the node, linked to an identity. The better the reputation of a node, the higher the level of authority it has within the network. Nodes have an incentive to act truthfully since they can lose their reputation, which can take a long time and a lot of secondary resources to obtain, if they are caught manipulating the network. And most importantly, the bad reputation will be linked to the identity of the person or organization behind the node. A good PoA chain should have a universal set of rules for how to obtain the right to secure the network.

The main application of PoA is traditionally for private networks, like some applications on Microsoft Azure. Examples of public cryptocurrency blockchains are POA Network (POA) and VeChain (VET) (and these are the only ones for as far as I know).

  • Pros: Very fast, low-cost and economical. It is a very simple mechanism since it typically runs on a limited number of nodes with only reputation as a relevant parameter. At the same time, this also leads to the most apparent downsides of PoA.
  • Cons: It more or less defeats the purpose of decentralization. All nodes receive their authoritarian status from the foundation that built the chain. Besides this, history learns us that people are often more than happy to trade in their reputation for profit.

Proof of Space (PoS*)

PoS* is similar to PoW, but instead of work memory it uses storage memory. Harddrives can be read very fast, they are relatively cheap and are broadly available, which is why it is proposed as a better alternative to PoW. A node in the network can add its block by proving that it has sufficient storage available to verify transactions. The specifics of how this happens can vary a lot so I'll list a few variants below.

  • Proof of Storage/retrievability: A verifier sends a file to a prover, who then stores the file. To add the next block, the prover has to prove to the verifier that he really stored the file. Used by Permacoin, although with some alterations (Maybe it has been renamed by now or it just died somewhere in 2014).
  • Proof of Capacity: This is a clever adaptation of PoW. First, nodes pre-calculate solutions to a cryptographic puzzle, which are then stored. Later on, nodes can "mine" new blocks by reading through their stored solutions and check if they solve the puzzle for the current block. The advantage is that you have to do the computation only once and the actual mining is done on the hard drive. Used by Burstcoin (BURST).
  • Proof of space-time: Unfortunately, this has nothing to do with Einsteins theory of general relativity. In addition to proving that a node has a certain amount of storage available, it also has to prove that the space has remained unchanged for a certain amount of time. Used by Filecoin (FIL) and Chia (XCH).
  • Proof of Acces: With this protocol, nodes have to prove that they stored a randomly selecetd block of the blockchain history on their hard drives. Then, all nodes that have the block in question on their hard drive will compete against each other with the usual PoW algorithm. This allows a very dynamic blockchain structure since each new block is linked to the previous block as well as this randomly selected "history" block, effectively creating a graph structure sometimes referred to as a "blockweave". Used by Arweave (AR).
  • and many more...

Note: It seems that the terminology within this subject isn't exactly standardized so the names Proof of Space/Storage/Capacity are often used interchangeably.

  • Pros: No need for power-intensive hardware like PoW has. PoS* also sets a lower entry barrier than PoS since this kind of hardware is relatively cheap as well.
  • Cons: More accessible hardware also makes it easier to control 51% of the total network.

Proof of Proof (PoP)

I wanted to include this one just to illustrate how creative one can get with security protocols. With PoP, any blockchain that has insufficient active nodes to properly secure itself could inherit security from another blockchain instead. Instead of carrying out PoW or PoS themselves, miners can publish reference data from a PoP chain onto any other chain that is considered to be "more safe". In the case of an attack on the PoP chain, miners can compare the information on both chains and notice that there are inconsistencies. VeriBlock (VBK), the pioneer of PoP, has proposed to help securing Bitcoin SV (BSV) and Ethereum Classic (ETC) this way, since these chains regularly suffer from 51% attacks.

  • Pros: PoP could help blockchains with lacking security infrastrucure by recycling the resources from bigger, more secure chains like Bitcoin.
  • Cons: The problem is basically transferred to the miners that do the PoP verification. You would have to trust them to publish legitimate data on the bigger chain.

A variant of PoW, called Delayed Proof of Work (DPoW), is quite similar to this: A PoW blockchain profits from the additional security of a secondary chain within the same network. In order to take over the primary blockchain, both chains would have to be compromised. But unlike PoP, DPoW doesn't require a "third-party" chain to operate. Used by Komodo (KMD).

Federated Byzantine Agreement (FBA)

Byzantine failure is a key concept for any consensus protocol and is often explained with an allegory (a word that I just learned myself, basically an analogy) about generals of the Byzantine empire. The generals, who are physically separated, have two options: attack or retreat. Each of them has to cast a vote and have it sent to the other generals by a messenger. The generals are then expected to act based on which option has received the most votes. The process is complicated however, by one or more generals who are traitors to the empire and seek to disrupt the operation. As an example they can vote to attack but instead retreat, leaving the attackers at a disadvantage. Or they can send a vote to attack to some generals and a vote to retreat to the others. Another complication is that the messengers could fail to deliver the votes or even falsify them. All of these are examples of Byzantine faults: An incident where the overall state of the system does not appear to be the same for all participants. Byzantine failure occurs when the system is unable to function properly because of too much faults.

In this analogy, the generals represent the nodes in our network who also have to options: To add the proposed block to the chain or not. As you may have noticed it can be difficult to determine what is the truth in a trustless, decentralized system. Yet a proper blockchain should be resistent to Byzantine failures up to a certain level.

An FBA protocol introduces a specific set of rules that each node/general has to follow in order to mitigate the impact that a bad subset of nodes can have on the system. This can be done by having multiple voting rounds where nodes have to convince other nodes to vote for a proposed block. To come to an agreement, each node has its own quorum slice, which is basically the subset of nodes needed to convince this one particular node of a statement. With the quorum slices of different nodes overlapping, this allows for a very dynamic structure that hopefully converges to one single statement being correct. However, the increased complexity can also lead to some nodes being "stuck" without coming to a final conclusion. Even then, the system still utilizes subprotocols to guarantee it can operate despite a number of malicious, failed or stuck nodes. FBA mechanisms are typically characterized by a high level of mathematical rigor.

Within the cryptocurrency space, the FBA protocol was pioneered by Ripple (XRP) and later on adaptations were made by Stellar (XLM). The main difference between the two is that XRP uses pre-selected nodes as validators while with XLM anyone can become a validator and choose which other nodes they trust. If you are looking for a detailed explanation of FBA protocols, the Stellar whitepaper definitely has that. (I actually read through the entire 30-page thing and I must say its a good read if you're familiar with university-level mathematics and/or set theory. Otherwise I'd recommend skipping chapters 3 to 6 because it's damn heavy literature, and that's probably an understatement). Furthermore, NEO uses a Delegated Byzantine Fault Tolerance mechanism, which adds the previously mentioned concept of delegates.

  • Pros: Very fast, cheap and doesn't require a lot of power usage.
  • Cons: Lack of an unfalsifiable resource. You can theoretically make as many nodes as you like, which forces validators to reintroduce the concept of trust and consequentially, also some level of centralization.

End note

There are probably many more consensus mechanism than I listed here, but I think I covered most of those that have applications in the biggest cryptocurrencies. Once again, feel free to comment any suggestions. Another good source for general information about consensus protocols can be found here. If you need more info on a specific consensus algorithm, I'd suggest looking up the whitepapers of the coins I've mentioned above. I hope some people found this useful or now at least have a general idea of what some consensus protocols do. And congrats if you actually made it this far. Have a good one.

EDIT: r/ec265 linked a useful infographic that could act as a tl;dr here.