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Blockzero Jed McCaleb Interview: My Outlook on XLM

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In terms of price trends, we recently saw a bit of a dip, with Ethereum and bitcoin losing about 10% no reason. I am staying away from this market until it starts to act according to good news and bad news. All of this bouncing around for no reason just smells like market manipulation and/or stupidity. Two things I don’t trade into.

As I have looked through the content YouTube “stars” and some of the more well-known cryptocurrency enthusiasts are putting out, I am noticing one shocking thing. They come up with new coins daily to invest in. They just poof one out of thin air, they say how great the idea (not the business) is, and that it could change stuff. Wow. Well, I pride my reputation on being a broken record. I only like 4-5 coins, and I only talk about those coins. I don’t invest in anything else, nor do I want to talk about anything else. Stellar Lumens is one of those coins, and a great interview just came out with CEO Jed McCaleb. Although I have followed what Jed has said throughout Stellar’s business cycle since 2014, hearing him talk about the market right now (as of Feb. 8) was something I sorely needed as an investor when XLM is trading at a mere $0.38.

Most of these coin projects have founders who shouldn’t be anywhere near a microphone, as their explanations of their businesses is actually detrimental to marketing, not helpful. Digging into deep technical jargon on a public forum when you are supposed to be marketing your coin is not helping anyone. There are so few people who understand blockchain that companies are paying high s9x figure salaries for amateurs. Marketing should be an explanation on who’s buying, why, and how much. Jed did exactly that in his interview. He talks faster than a New York City stock broker on speed, but wants to provide only information that will give investors better insight into the XLM business; not the deep tech of the coin. I will touch on some of the key points that I loved: update on corporate relationships, innovations for public use, and ICO platform.

Corporate Relationships

CEOs are not often people who talk candidly. They are the head salespeople of the firm, and everything has to be perfect at the company. Jed is taking a humble blockchain approach. He wants to make sure that the record is straight about what partners are doing at Stellar, and how it will help/affect XLM specifically. Case in point: he said explicitly that bank relationships are far off for Stellar, and the market as a whole. He admitted the banks he works with are very early on in the sales cycle, and that 1,000+ year incumbents aren’t too used to working with new entrants. The trial runs and beta versions are all common practices in every industry. They don’t mean adoption. This was a surprise to me. I was under the assumption that these banks had a fire lit under them to catch up to blockchain. It seems they aren’t in a hurry, or just making it seem that way.

This is where it gets good. Jed has since re-shifted focus to companies that he knows will be immediate adopters, just because of how easily it can fit into their structure. Remittance companies (Western Union, Moneygram, etc.) are the low hanging fruit in his mind. These are high volume transfers of cash, with high fees to come with it. The biggest demographic of remittances are obviously foreign workers, who also happen to be the last people who can afford to spend 5-10% of their capital on transfer fees. With an industry size of $500 billion in 2016, remittances can feed quite a few companies that have friendly corporate technology.

XLM is a shell. It can take form of fiat currency, transfer anywhere in the world, and settle in a bank account in any currency. There are 300 coins that claim they can be the new PayPal, and most them are still spouting off about decentralization. This is a company that wants control mechanisms so it can give tangible control to their corporate customers.

The way he spoke about his corporate partnerships is translucent. He doesn’t tweet (says he only watches, not talks) out random fodder that happens each day. He wants to be the business person that people can depend on. People will go back and read through the information that all of these coins put out during late 2017/early 2018. I think his spot in the annals of the crypto boom will prove to be very noble. I am happy with remittances, and I am happy he was open that banks just aren’t there yet. I haven’t heard anyone else admit it, have you?

Public Use

I was unaware of the infrastructural scope that Stellar has built since 2014. Jed created a conglomerate, not a business. He has a platform for the public to launch DAPPs/smart contracts, token offerings, and an exchange soon capable of atomic swaps (no base currency; you can trade LTC for KMD). His main goal is to create an exchange capable of housing the U.S. cryptocurrency market, while also having ICOs launching on it in tandem. The recent $30 million ICO of Mobius (I don’t invest in any ICOs) had all the looks and smells of a compliant offering. If the exchanges play well with the government, we can see some very big moves.

The next public project was partnered out. Because remittances are so large, the big companies are just necessary evils in the early adoption phase. He is working with a confidential company on creating a global Venmo-type network that can work directly with any kind of bank account. You can send USD from an American bank account, and it will deposit in yen in a Japanese bank account. All on the app in 3-5 seconds. XLM was designed specifically for this purpose, and its use cases are beginning to take up speed. XLM is the sought after technology, not private chaining. I am very excited to see what he comes up with here because this fiat currency settlement mechanism is almost monopolistic right now.

ICOs

Staying far away from ICOs right now, even Stellar’s. But that doesn’t mean that we shouldn’t find the winning race horse before the race. Stellar’s platform works with fiat currency, and it can launch ICOs. Need I say more? I have harped on this fact many times, but this is just too good not to repeat. If central banks, corporations, institutions, and high net-worth individuals feel comfortable enough with Stellar’s way of handling their native paper currencies, we could see Regulation D token securities being offered on Stellar. Big American business is waiting for the rulebook to be written, and then they will pounce. Stellar is already working with banks in the South Pacific with America’s tech darling IBM: we are seeing the heir being groomed in my opinion. All of the information listed is leading to me to a rather large conclusion.

Conclusion

My conclusion is getting fast out of XRP, and putting it all into XLM. XRapid, Xcurrent, X-me out of this XRP business. Ripple is creating blockchain systems, and has gotten the taste of private chain revenue. Their coin does not need to be used, and each company they work with has specific press releases saying they aren’t using XRP.  On the contrary, we have the head of blockchain for IBM saying they love XLM, and are actively working together to introduce it to banks. XLM, not just Stellar. That is crucial for coin holders. I am not running over to the computer to sell right now, but I will get up to my basis, and exit. I will most likely keep some for a Coinbase push, but XLM needs more of Raiden’s money. Jed McCaleb has created 3 gigantic blockchain companies (Mt. Gox, Ripple, Stellar), and smart money doesn’t bet against him. I sure won’t be.

 

This is not a recommendation to buy cryptocurrencies. I am not buying or selling anything right now, and I suggested you don’t either. If you do, be aware of the risks. I wish you the best of luck.

Disclaimer: The author has an investment stake in XRP.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.4 stars on average, based on 27 rated postsMythological God of Lightning. Cryptocurrency/Blockchain writer, evangelist, and friend. May the odds be ever in our favor.




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  1. citizen_x

    February 11, 2018 at 5:59 pm

    Really great and very interesting article, like your reasonable point of view, the fundamentals have to be solid for the project to succeed long term. Thanks for sharing those ideas.

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Articles

Are Crypto News Sites Allowing Freedom Of Thought?

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As the interest in cryptocurrencies has exploded during the past couple years, crypto news sites have been on the rise.  These sites are quickly becoming an invaluable resource for traders who enjoy learning about new crypto projects and trade ideas.  The content distributed through these platforms is typically created by a combination of full-time staff and guest contributors/bloggers.  Many of these writers also have a lot of experience in crypto trading so the articles are extremely beneficial for readers.

One thing that readers should always keep in mind is that the content from these sites normally represents the independent thoughts of the writer.  This is important because writers/traders aren’t infallible.  They can make mistakes like all of us.  So, the best approach for readers is to try to attain a diversity of thought.  A diversity of thought means to gather as much information as possible, from a wide selection of sources.  This is absolutely necessary before reaching a conclusion on a certain topic.

But what happens when a website prevents writers from writing about specific topics?  A colleague of mine recently tried publishing an article at Coinnounce.  The writer wanted to publish an article about the buying opportunity that the Bitcoin crash was affording investors.  Normally an article is rejected for legitimate reasons such as poor grammar, plagiarism, or promotional work.  Unfortunately, Coinnounce cited that the website was bearish on Bitcoin and that they wouldn’t be publishing bullish articles.  Even more troubling is that when Bitcoin rebounded in price, Coinnounce reached out to my colleague and told him they would now be willing to publish the bullish article.

When I found out about the rejection and the reason given, I decided to browse the Coinnounce website (which I had never heard of) to find out what kinds of articles were being published.  And sure enough, the articles were nearly all bearish in some fashion.  The problem with this approach is that nobody knows where Bitcoin is going.  It’s 100% speculation.  What actually matters is the logic presented in the article that helps back up a prediction.  So, while Coinnounce is free to run its business as it sees fit, the website (or the articles published) should have a disclaimer that the information presented represents the thoughts of the website’s owners/editors.  Otherwise, readers may not have a clear understanding of what is being presented.

The point of this article is not to call out Coinnounce.  Rather, the point is to make sure readers are aware that some sites may have different motivations than others.  It’s important to read from a variety of sources to get as much information as possible.  This is true not just for cryptocurrency markets, but for everything in life.  I’m proud to write for Hacked which runs an open and honest platform.  The articles written do represent the thoughts and feelings of the writers.  So, while the editors may not always come to the same conclusions that the articles do, they will never suppress freedom of thought.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Op-Ed

The Underlying Assets are Getting Squeezed

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An interesting phenomenon has emerged in the last 3 or 4 months. It appears as if many of the core underlying investment assets of the economy are getting steadily killed in the markets. This is observable in FANG stocks (Facebook, Amazon, Netflix, and Google) as well as commodities like crude oil and iron ore.

Additionally, Bitcoin has continued to get hammered during this absolute beat down on the economy. Many pundits have come out and talked about how this is the “end of Bitcoin” or how this is Bitcoin finally finding its true value, but something far more important is at work here.

Deleveraging During the Credit Squeeze

For anyone who hasn’t been reading the news over the last several months, the actions of the Fed (and other central banks) have been under considerable analysis. The previous decade has seen some of the easiest money in the history of our economy. Easy money refers to the cost of borrowing. The lower the cost (interest rate), the easier the money is considered to be.

So as we start to see the credit markets change in a way that makes it a lot harder to borrow money, a credit crunch begins. This is when there is a shortage of credit (lending) and borrowers are forced to pay back parts of their loans, or at least not take out any new ones. And as a direct result, they can’t afford to maintain certain investment positions.

Their inability to maintain these positions means they need to sell off their holdings in the same way a short squeeze causes short sellers to need to buy back the security they were shorting. A credit crunch closes a lot of positions.

The economy-wide effect this is having is both predictable and scary, because we don’t know how far all these underlying assets are going to fall before they stabilize. In the mean time, there will be drastic political effects as a result. The policies of central banks have come under scrutiny in recent months thanks to comments by President Trump, and now that a tighter monetary policy is being put into play, we are going to see much lower dollar liquidity in the future.

Zooming in on Bitcoin

So with all of these assets “puking on themselves”, or deleveraging, we are seeing some interesting dynamics unfold. In Bitcoin, capitulation is occurring on both sides of the asset, which is exactly what is necessary to reverse this trend in the future.

You can see traders instinctively realize that the “dead cat bounce” that normally occurs as shorts get squeezed out in the $4k range is much more muted now. This is because many of the shorts have already closed their position. Longs are doing the same as they bought in at what they thought was the bottom, even as recent times have proven them to be mistaken.

This is going to work out as a good thing for Bitcoin in the long-term, as it could be the end of the massive downmarket it has experienced all year and a new time to shine. At the very least, it could create a good “bottom” for opportunistic buyers to hop in and average their costs down a bit.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Altcoins

60 Minutes Showcases Potential of DNA and Genetic Genealogy; Opportunity for Crypto Investors

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DNA Storage

Throughout the years, 60 Minutes has been responsible for reporting on some of the biggest stories in the world.  Many of the most memorable episodes have involved world leader interviews, stories on endangered animals, profiles of famous celebrities, and occasionally, segments on promising developments in business and science.  A week ago, 60 Minutes had a very interesting report on how the authorities used Genetic genealogy to solve the case of the Golden State Killer, and how the authorities plan to keep using this new field to solve more cold cases in the future.

On April 25, 2018, authorities in Sacramento announced that they had solved the notorious case of the Golden State Killer.  Authorities were able to use a promising new technique called Genetic genealogy to help identify 72-year-old former police officer, Joseph DeAngelo, as the suspected killer.

Genetic Genealogy

Genetic genealogy is a mixture of high-tech DNA analysis, high speed computer technology, and family genealogy.  The end goal is to determine the level and type of genetic relationship between individuals.

In the case of the Golden State Killer, DNA came into play because the killer had committed at least 12 murders, 50 rapes, and many home burglaries.  Investigators were able to obtain DNA from the killer at one of the reported crime scenes.  After many years of frustrating dead ends, a cold case investigator submitted the obtained DNA sample to GEDmatch.  GEDmatch is the largest public genealogy database in the world.  After uploading the sample, authorities were able to generate a handful of leads which eventually led to the front doors of Joseph DeAngelo.

In addition to the Golden State Killer case, authorities have used Genetic genealogy to make arrests in at least 11 other cold cases.  While the science appears to be sound, there is a legal question that has yet to be answered.  There is no doubt that attorneys for the accused will raise the question of privacy and whether using databases, thought to be private, should be legal.

Opportunity for Crypto Investors

While I’ve invested in equities and crypto for many years with varying degrees of success, I’ve never had the opportunity to invest at the beginning of a new frontier.  Fortunately, the opportunity has come.  Encrypgen (DNA) is a genomic blockchain network that provides customers and partners with best-in-class, next generation, blockchain security for protecting, sharing and re-marketing genomic data.  This creates a fair marketplace for a person’s DNA that can be stored private and sold (if a person wishes to do that).

Over the past few months, Encrypgen has been gaining attention in the mainstream media because of their revolutionary technology as well as the fact that their closest competition is still years away.

In August, Encrypgen released a beta version of its Gene-Chain.  The Gene-Chain allows consumers to upload their genetic profile and for researchers to purchase that genetic data.  Within the next 2 weeks, the company plans to release the full version of the Gene-Chain which will officially make them a new pioneer in the field of genomic blockchain security.

With the DNA token hovering at approximately 5 cents, the time is running out to accumulate at bargain basement prices.  I fully expect the token to achieve utility in the next several months which will cause a rocket-like explosion in the token price.  There is no looking back now, only forward, and I love what I see.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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