Friday, November 3, 2023

On Halvings and Seasonal Trading.

On the 5 of December 2023 the mining supply of Autumn tokens will be reduced from 120 tokens to 60 tokens every ten minutes:

Tokens Per Reward every 10 minutes

This effectively doubles the cost of production of Autumn tokens overnight. These changes in the cost of production of the four tokens produces predictable oscillations in the relative price of the four tokens.

So What?

Traders can benefit from these predictable price oscillations.

In order to understand what is the use of this price mechanism let us consider the following example. We see the prices in Ether of the four Seasonal Tokens over the last couple of years.

Historical Token Price in ETH

It is true that the dollar prices of the tokens have been falling for two years in the worst crypto bear market so far since the creation of Bitcoin, but this will highlight the fact that the Seasonal Tokens price mechanism is independent of the external market conditions, and depends only on its own internal economics.

Suppose that on May 20 2022 we trade X Winters for Spring. Point A in the graph.

Then the Spring Tokens Halving happened on June 2022. Few months later Spring was the most expensive of the four tokens.

Then on February 13 2023 we trade the Spring for Summer. Point B in the graph.

Then the Summer Halving happened on March 2023 and few months later Summer became the most expensive of the four tokens.

Then on October 27 2023 we trade the Summer tokens back to Winter again. Point C in the graph.

This completes a full cycle for our Winter tokens. The table below shows the prices of the tokens in ETH on those dates:

May 20 2022 0.000009184 ETH/Spring 0.00001478 ETH/Winter
Feb 13 2023 0.0000045 ETH/Spring 0.00000286 ETH/Summer
Oct 27 2023 0.000001939 ETH/Summer 0.0000013682 ETH/Winter

Therefore, if we start with X number of Winter Tokens on May 20 2022, after the complete cycle of trading we obtain 3.59*X winter tokens:

https://preview.redd.it/0qv28s5li8yb1.png?width=1236&format=png&auto=webp&s=b29cc3af8b7c9cd6fd14bc9125b4fabb52d0b3ec

Conclusion:

If you just hold to your X Winters you will have only X Winters at the end. But by using the price oscillations you can have 3.59 X at the end of the same period of time.

This is 359% better than just holding the tokens.

Where does this value comes from?

The tokens are produced by proof of work mining, this is a way to make sure that the tokens are anchored on an economic reality, and they follow the same economic principles followed by commodities in the traditional economy.

Traders are not getting this value for nothing. By trading the more expensive tokens for cheaper tokens they are helping the miners to recover the mining profitability of the token whose cost of production was doubled.

To learn more about Seasonal Tokens price mechanism check out this YouTube playlist:

Seasonal Tokens Explained

But the Dollar prices are falling.

True, over the same period of time, the dollar value of the X Winters has dropped by a factor of ten. So despite the gain by a factor of 3.59 we are still in red numbers. This has affected all ERC20 tokens. Part of it is due to the overall market conditions, and part of it is due to the fact that every ten minutes new tokens are being produced. Miners have to sell the tokens to recover the cost of production, and so there is an inflationary phase where prices are being pushed down by the influx of new tokens.

This has nothing to do with the popularity of the tokens, which are not being advertised to avoid any legal liability coming from "unqualified financial advice". But after several of these halving events, the inner workings of the four tokens system are clear for future investors who will be able to analyze and apply the principles of real world economics to this digital commodities.

You can see how this bear market has affected other tokens, 0xBitcoin price for example has fallen by a factor of 12, and many other crypto projects are waiting for the Bitcoin halving to start a new "Altcoin Season" to see some recovery.

0xBitcoin PoW ERC20 Token Price History

In Seasonal Tokens we are not just waiting to see what happens. New technologies are being deployed to tackle the problems arising in decentralized token economics.

Join us to learn more about Web3 and Decentralized Economics.


Public Service Announcement Regarding BrickLink Being Offline

I mainly lurk on Reddit so forgive the non-conformity with the usual post styles

Public Service Announcement Regarding BrickLink Being Offline

I am making this post because the BrickLink administrators, who are understandably very busy right now, have not yet provided information over the past three hours or so and there are people on Reddit and elsewhere who are understandably concerned about their BrickLink orders. I will therefore explain what we do and do not know at this time and what you should and should not be concerned about at this time given the information that is available to someone who has been following this issue over the past week – the current situation did not start today. Full disclosure: I am both a buyer and seller on BrickLink so yes, I have an interest in maintaining BrickLink’s reputation as an excellent marketplace for fans of Lego. I am not, however, affiliated with BrickLink, The Lego Group (which owns BrickLink), etc. in any way. There is a lot to say but I will try to keep things brief to provide a summary.

What We Know

· One or more hackers have accessed several dozen BrickLink accounts, both buyer and buyer/seller accounts, over the past week (if not longer). They have changed the inventory of some stores that were previously closed for several months if not several years and used hacked buyer accounts to post positive feedback and lure actual paying buyers. The hacked buyer accounts were used to leave feedback from a range of countries and most have zero/very few feedback, but some have both left and received feedback but appear to have been inactive for a year if not longer. This suggests that the hackers have accessed login details from an older database of login details, possibly from the 2021-2022 timeframe.

· The affected hacked/fraudulent stores were located in France, the United States, Indonesia, and other countries. Some had years of experience with thousands of orders and positive feedback. Unsurprisingly, hackers prefer to gain access to established stores that can attract many customers in as short a time as possible. I am aware of 5-7 stores that may have been hacked and used in this way but there could be more. Given the rock bottom prices, “you know it when you see it.”

· A lot of people lost money so I don’t want to be dismissive toward the real pain that these hacks have caused (and continue to cause with sellers being unable to sell through BrickLink at this time). Even so, there were pretty clear red flags: massive uploads of heavily discounted items (often 30%-60% off everything, including very expensive items and very expensive sets). Most BrickLink stores offer PayPal and/or Stripe and these offer considerable protection to a buyer. The hacked stores did not, however, offer PayPal and/or Stripe – only bank transfer/IBAN (i.e., the bank transfer system used in Europe and many other countries outside of North America), and debit/credit card (through one or more e-commerce payment providers that are otherwise legitimate). The debit/credit card payment links were linked to bank accounts located in a country different from where the store was registered. For example, a hacked French store provided a credit card payment link that stated the merchant was located in Italy – a major red flag.

· Unfortunately, these scams worked – dozens of orders were placed and buyers who paid through bank transfer/IBAN and perhaps debit card are, it is sad to say, unlikely to get their money back. If I had to guess, I would say 200-300 orders were affected over the past several days, but it is worth keeping in mind that not everyone who placed an order ended up paying given the absence of PayPal or Stripe as payment options and the fairly quick intervention by BrickLink admins to suspend these hacked stores, cancel orders, and notify buyers. This is a serious issue without a doubt but, all things considered, a drop in the bucket when compared to average daily sales volumes on BrickLink.

· To give an idea of what I mean by very low prices, I am talking about a dozen or more sealed UCS Venator sets for around $300, dozens of new UCS Mandalorian minifigures for $25 each, dozens of the new Disney Bami piece for like $5 each – rock bottom liquidation type prices that should raise red flags. To be clear, prices are not necessarily a red flag but massive sales on massive inventories of new, very expensive sets/items are likely too good to be true and you will likely end up either receiving stolen items or being a victim of fraud. Don’t do it even if you have the security offered by payments through PayPal or Stripe.

· In any event, the hackers were repeatedly thwarted by people reporting suspicious stores and BrickLink admins suspending these stores and cancelling orders. Earlier this afternoon, someone using what appears to be hacked buyer accounts posted on the BrickLink forum demanding EUR 50,000 in Bitcoin within 30 minutes and otherwise threatened to delete store inventories starting with the largest stores. To be clear, this could be someone else being opportunistic and trying to make money off the work of other hackers. The hackers who were running hacked/fraudulent stores were stealing money by requesting bank transfers and debit/credit card payments (*not* made through PayPal or Stripe, which offer considerable protection to buyers). Maybe they have turned to ransom demands after being thwarted or maybe it is just another group – we simply do not know at this time.

· BrickLink shut down for unscheduled “maintenance” shortly thereafter earlier this afternoon. Needless to say, I do not know for sure why this happened, but this appears to be a preventative shutdown to allow computer security specialists to get the hackers out of the system. In other words, the shutdown is, given the current situation, a “good sign” much like fire truck or ambulance responding to a situation.

What We Do Not Know

· To be clear, we do not know why BrickLink is down right now – we can only speculate. This could be a preventative shutdown, or it could be something worse. We have to wait for an official update from BrickLink administrators who will ideally also let us know when to expect the site to return online.

· BrickLink shut down for unscheduled “maintenance” shortly thereafter earlier this afternoon. Needless to say, I do not know for sure why this happened, but this appears to be a preventative shutdown to allow computer security specialists to get the hackers out of the system. In other words, the shutdown is, given the current situation, a “good sign” much like a fire truck or ambulance responding to a situation.

What You Should Not Be Concerned About

· You should not be concerned about your money if payment was made through PayPal or Stripe. Both PayPal and Stripe offer considerable protections to buyers so you should be fine. Please keep in mind that only a small number of stores appear to have been hacked and used to defraud buyers. If you recently placed an order – and if the order was not characterized by rock bottom prices – you are likely fine even if you paid through bank transfer/IBAN. Most stores are reputable and the vast majority of transactions are likely to be legitimate – rock bottom prices are the red flag so check your email inbox to access your invoices.

· You should not be concerned about your payment data. Please note that BrickLink does not access your payment data even as it has the name, address, email, etc. that you provide as account details. When you pay through PayPal or Stripe, even sellers cannot see your full card details. If you pay through bank transfer/IBAN, then you share bank details as the cost of doing business. Regardless, payment data is not stored on BrickLink – it is stored on the servers of the payment processor so a possible data breach on BrickLink does not mean that the hackers now have access to your credit card information, etc. For peace of mind, please contact your store but please consider waiting until later this weekend as all of us, buyers and sellers alike, are in the dark until BrickLink administrators provide an official update.

o I do not know if the situation with the new MOC Pop-Up Store is different given that it connects to the Lego website.

What You Should Be Concerned About

· Your login information if your BrickLink password was shared with other online accounts particularly if you use the same email. Please consider changing the password for any online accounts that shared your BrickLink password. As a general rule, it is best practice to never reuse passwords and to instead always create unique and difficult passwords (a password manager and automatic password generator, such as that provided by Google, can be very helpful in this respect).

· Your login information if your BrickLink password was shared with other online accounts particularly if you use the same email. Please consider changing the password for any online accounts that share your BrickLink password. As a general rule, it is best practice to never reuse passwords and to instead always create unique and difficult passwords (a password manager and automatic password generator, such as that provided by Google, can be very helpful in this respect). I say this as someone who reported several of these seemingly hacked stores to BrickLink – only a small number of open stores – likely less than a dozen – were actively affected (open to defraud buyers) and these were suspended by BrickLink admins.

· Finally, and I stress that I am speculating – but you may want to change your Lego.com password *if it is the same password as used on BrickLink.* This has become a vulnerability since Lego/BrickLink began to integrate accounts and encouraged us to link usernames. If you save payment details on Lego.com and share a password for Lego.com and BrickLink, then there is a *possibility* that hackers may make purchases from your account. Granted, you are likely protected by your bank, credit card provider, and The Lego Group itself, but you may wish to take precautionary steps. I stress that this is the most speculative part of this post – take it with a lot of salt.

---

The information and suggestions for what you should and should not be causes for concern are undoubtedly incomplete, but I hope people find this helpful. BrickLink is an excellent site for Lego fans – even for Lego fans uninterested in making purchases given the existence of the excellent BrickLink catalogue, etc. – and hopefully, this experience will result in a better, more secure BrickLink for everyone to benefit from. Best case scenario: this post will be redundant in the coming hours but please do share this information if required.


Here's Why Bitcoin Will 10X From Here: Insights from Michael Saylor

"You can never have too much bitcoin (BTC)," declared Michael Saylor during a recent appearance on CNBC, just a day after his company, MicroStrategy (MSTR), released its third-quarter earnings report. While Saylor's bullish stance on Bitcoin is well-known, he highlighted several specific catalysts on the horizon, offering a compelling case for the digital asset's potential for exponential growth in the near to medium term.

First and foremost among these catalysts is a significant impending shift in the supply-demand dynamics. Saylor pointed out that Bitcoin miners, who play a crucial role in the ecosystem, currently sell approximately $1 billion worth of Bitcoin each month to cover their operational costs. However, the upcoming Bitcoin halving event, projected to take place in April 2024, will cut this available supply in half. This means that miners will only have $6 billion of Bitcoin to sell annually, down from the current $12 billion. Simultaneously, Saylor emphasized that spot Bitcoin exchange-traded funds (ETFs) are poised to generate increased buying pressure.

The second factor Saylor underscored is the forthcoming introduction of new regulations involving fair value accounting for corporate Bitcoin holdings. He believes this development will be instrumental in paving the way for businesses to embrace Bitcoin as a treasury asset, thereby creating additional shareholder value through their balance sheets.

Furthermore, Saylor addressed the ongoing news cycle within the crypto industry, including the high-profile fraud trial of former crypto prodigy Sam Bankman-Fried. He argued that early crypto ventures, the myriad unregistered crypto tokens, and the unreliable crypto custodians represented liabilities for Bitcoin. Saylor asserted that for the crypto industry to ascend to a new level, it needs to transition to a phase characterized by mature oversight. This entails moving away from the multitude of distracting and often value-eroding "shiny little tokens" toward a more rational and regulated landscape. In his view, this transformation is the key to Bitcoin potentially experiencing a tenfold increase from its current position.

Saylor's insights shed light on the evolving dynamics within the cryptocurrency space and underscore the ongoing maturation of Bitcoin as a digital asset with widespread adoption potential. As the industry continues to evolve and adapt to regulatory changes, its capacity to realize substantial growth remains an exciting prospect for investors and enthusiasts alike.

Footnotes:

https://youtu.be/Cp6lRvECH70

https://www.coindesk.com/markets/2023/11/02/heres-why-bitcoin-will-10x-from-here-michael-saylor/?utm_source=CryptoNews&utm_medium=app