A Crash Course on Crypto Economics in 1 Hour by Natasha Che

A newer one with a focus on stablecoins and fiat.

The whole series is worth a read if you have any interest in cryptocurrencies. Tascha also has a newsletter.

How NFTs Create Value

“[Non-fungible Tokens (NFTs)] enable new markets by allowing people to create and build upon new forms of ownership. These projects succeed by leveraging a core dynamic of crypto: A token’s worth comes from users’ shared agreement — and this means that the community one builds around NFTs quite literally creates those NFTs’ underlying value. And the more these communities increase engagement and become part of people’s personal identities, the more that value is reinforced.

Newer applications will take greater advantage of online-offline connections, and introduce increasingly complex token designs. But even today, it’s less surprising than you might think that people are making money selling pictures on the internet.”

Steve Kaczynski and Scott Duke Kominers, “How NFTs Create Value.” Harvard Business Review. November 10, 2021

I was of the mindset that NFTs are a scam. But, then again, people think the same thing about cryptocurrencies, which I think is a new computing paradigm. This overview and explainer convinced me that perhaps there is more going on in this space than I realized. If you want to go deeper down this hole, you could do worse than Rolling Stone’s coverage of the Bored Ape Yacht Club.

Is/Ought Fallacy: Exhibit A

“Crypto is gambling, and you should never gamble more than you can afford to lose, right? So the only people who held onto their bitcoin when it was worth $100,000 dollars were:

* People who could afford to lose $100,000

* People who couldn’t afford to lose it and were therefore making a very, very stupid gamble

And that’s the same at every dollar amount. Some people can’t afford to lose $1000, some people $100, but whatever level you’re at, you would have and should have sold when it hit that figure.

That means it’s literally not possible for a sensible person to make life-changing amounts of money from cryptocurrency, because the only way to do it is to bet more than you can afford to lose.”

McKinley Valentine, “No FOMO: If you’d bought bitcoin 10 years ago, you wouldn’t be rich today.” The Whippet. September 15, 2021.-

The way logic works is if you argue something is not possible, then pointing to one (or dozens of) counter-example(s) refutes your argument. You’ll notice the chart after the table of names that indicate that “investors” make up the majority of Bitcoin billionaires. So, it is literally possible. If you had limited resources, it could have been as simple as putting together a mining rig, well within the capabilities and budgets of most technical people back then.

If you want to feel good about not investing in Bitcoin back in its infancy, consider what sudden wealth tends to do to people talked about in this classic Reddit post on the lottery. It’s enough to make you never want to be rich, ever.

bash: Cryptocurrency Prices From the Linux Terminal

printf -v coin '%s' -1   # crypto.sh bitcoin

price() {
  # A function that pulls cryptocurrency price data from coingecko
  curl -X 'GET' 'https://api.coingecko.com/api/v3/simple/price?ids='"$1"'&vs_currencies=usd' \
     -H 'accept: application/json' 2> /dev/null | # sends download data to /dev/null
  sed  's/.*usd"://' |   # Removes everything before the price
  sed 's/..$//' |        # Removes back two }}
  sed 's/^/\$/'          # Adds dollar sign to the front, returns

bitcoin=$(price bitcoin)
ethereum=$(price ethereum)

# Checks to see if there is a command line variable and prints to console
if [[ -z $1 ]]; then
    echo "bitcoin: ${bitcoin} | ethereum: ${ethereum}"
    price=$(price $1) # calls function with command line variable
    echo "${1}: ${price} | bitcoin: ${bitcoin} | ethereum: ${ethereum}"

h/t Techstructive for the basic idea. I simplified their code by cutting out the I/O and putting the coin as a variable when calling the script, e.g. crypto.sh bitcoin, and formatting it by piping it through sed. Have I mentioned how much I love sed?

Edit: Modified this on August 12, 2021 so it is now a function and prints a portfolio of coins. I track two or three, and it was getting annoying to have to do them each individually. All you need to do to modify it for the coins you are interested in is create a new function call:

cardano=$(price cardano)

Then add that to both the if and then print results.

    echo "${1}: ${price} | bitcoin: ${bitcoin} | ethereum: ${ethereum} | cardano: ${cardano}"

Cryptocurrency Platform Cardano & Ada Coin

Disclosure: I own Ada. This is a condensed summary of what convinced me to start buying cryptocurrency, specifically Ada. I’m happy to share what I learned, but this is not investment advice. I don’t know you. I don’t know your situation. Cryptocurrencies are a speculative investment, and you could lose all your money. If that’s not something you can live with, then do something relatively safe, like invest in an index fund, a certificate of deposit at a major bank or U.S. Treasuries. Also, if you are making investment choices based solely on the suggestions of some random blog on WordPress, written by The Deity knows who, without engaging your own mind and taking responsibility for your own choices, then you deserve to lose all your money. Caveat emptor!

Cardano is an open source crypto platform that runs a decentralized public blockchain for the implementation of smart contracts. The native cryptocurrency, or coin, of Cardano is Ada. There are 45 billion Ada coins, something like 32 billion are in circulation at the moment. It is currently capable of 1,000 transactions per second, and with a future upgrade, it will be capable of millions, on the level of global payment systems like Visa. As a point of comparison, Ethereum and Bitcoin are both less than 20 transactions per second. It is also able to complete these transactions at a fraction of the cost of Ethereum and Bitcoin. But, the killer app for the Cardano platform is the Plutus integrated development environment (IDE) for smart contracts, which allows for programmers to write and “run end-to-end tests on their program without leaving the integrated development environment or deploying their [Haskell] code.”

All of these features will be available as of August 2021. Right now, the Plutus IDE is being tested for the August 2021 deployment. Once the new upgrades launch in August, there will also be a staking system that will allow holders of Ada coins to stake their coin in a pool that verifies the distributed ledger – a function that earns returns, a bit like interest or dividends. Cardano also has the capability of hosting other coins or minting new ones.

Right before Cardano launches, Ethereum will launch Eth2, which will move Ethereum to a proof of stake model like Cardano’s and introduce many of the same features. However, it won’t have is the integrated development environment Plutus. Ethereum also uses Solidity and Vyper programming languages to program their smart contracts. The criticism section from the Solidity Wikipedia page basically says that Solidity is a hot mess.

Compare Solidity to Cardona’s Haskell language, which is an industrial strength language used in cryptography algorithms, semiconducter design, and was used to formally verify an OS microkernel. As a functional language, it doesn’t have side effects. It has type-safe operators and type inference. Basically, it is powerful and has many features designed to cut down on bugs in the code.

Of course, Haskell has drawbacks. It’s hard to learn, and the universe of people that can code in it is relatively small to other programming languages. Depending on your use case, there are other problems as well. But, every choice implies trade-offs, and Haskell is a good language for the implementation of smart contracts.

If you wanted to implement smart contracts into your business workflows. The more money, the higher the stakes, the more likely you’ll be to want to make sure you are not going to have problems later. You’re going to choose the best option available, Cardano.

Ethereum will have more name recognition, as the second highest capitalized cryptocurrency. It’s smart programs will be easier to implement, and they’ll, more often than not, be good enough for a given purpose, probably one that isn’t mission critical.

The good news is that these two systems, and others that come down the pike like PolkaDot, will likely all work together and have different niches. To illustrate, Occum.fi announced a liquidity bridge between Ethereum and Cardano, designed to encourage fund transfer between the two systems, which suggests there could be a symbiotic relationship between them in the future?

Anyway, I think this is going to change the world. These are the two choices in smart contracts, at the moment. And, one has clear advantages.

The current price of Ada on Sunday night, April 11, 2021 was $1.28. You can buy Ada coin through Coinbase.com and most other cryptocurrency exchanges.

This is the video that sold me on Cardano, Plutus and Ada.

For a slightly longer discussion, see this recent Reddit thread.