Cryptos 101

My 7-day course on how to lose money on crypto

Day 2: Pick something that will be useful


Most cryptocoins are Tinkerbell tokens. Their promise of glittering returns flitters around your head but you have to believe in NeverNeverLand to commit yourself to crypto's radiant future. No wonder they are so popular in former Soviet countries.
Despite what Margaret Thatcher believed, there is an alternative: tokens that offer something useful. I refuse to call them coins or currency. They are more like loyalty cards and airline miles.
But several tokens have immediate uses that can improve our lives.

WAX

Produced by the mammoth OPSkins internet games-item business, WAX should appeal to the 400 million and more online game players who want to buy skins and object to each game having its own skins and token system.

WAX enables you to trade your items for any others. "WAX is a utility token that's designed to make digital item trading easier and less expensive for both marketplaces and customers, particularly for small and cross-border transactions," says its website.

Unfortunately, a major internet game merchant, Steam, announced in June 2018 that it was ending its agreement with OPSkins and WAX, allegedly for breaching the terms of their contract. In that month, even before the announcement, it lost nearly half its value. Do you think some investors had knowledge before the official announcement? There's no crime of insider trading in the crypto world.

Since then WAX has announced new plans for deals with another games manufacturer. It was also advertising that it would be at Comic-Con in San Diego, CA, on 18-22 July 2018. It didn't help the price much, which on 27 June was 9 US cents, down from 96 cents on 30 December 2017. As of 24 July, nothing, except a promise of a video from days back and lots of frustrated wax supporters mouthing off on Telegram.

With its gaming perspective, price was never a big deal for WAX. So after July 2018 spike at $0.51 indicating a classic pump and dump, the crypto coasted down around 10 cents for most of the next year, and its $0.9 in mid-June 2019 was heralded as a recovery.

HAVVEN

News headlines have regularly followed the travails of Tether (USDT), designed to provide parity between the US$ and a cryptotoken, thereby reducing volatility and unpredictability. Tether is supposed to be backed by US$s held in escrow for each token issued. Is this true? Tether's regular pumping of the market with their coin made many suspicious. Did it really have the funds? No-one could find out and Tether''s auditors stepped away from the project.

Now we have Havven and its nUSD (nomin), operating in the same way but with havvens as its backing. The launch was 11 June 2018, when HAV was 43.9% down on 30 days before, and 30% less than seven days before. On 17 June, nearly a week after launch, with nUSD fully convertible with HAV, the price had risen not even half a percent in 24 hours. In mid-June 2019 it was at $0.23, a big bounce from $0.047 in April, where it had been for the previous nine months.

QUANTSTAMP (QSP)

Ethereum contracts, if they are ever to become ubiquitous, will need to be audited in business. Quantstamp provides the verification. It has already audited more than a hundred tokens on the Binance crypto exchange. Each audit now costs only 25 QSP (less than $3).

The website lets you browse over 230 reports, including for the Crypterium token. It may not be ready for primetime. For Crypterium it found 'Medium to Critical [vulnerabilities] in all cases. An assertion failure warrants attention because it signals the smart contract may have other, more critical vulnerabilities' but its overall judgment was 'No vulnerabilities detected'.

Its loss over the month before July 2018 was 19.83%, and 21.59% loss over 7 days. By mid-June 2019 QSP was about one-fifth of 12 months earlier at $0.023.

ONTOLOGY (ONT)

The Chinese-focused Ontology project, a creation of startup OnChain, is already working with CarBlock, the world's first decentralized automobile industry marketplace.

Decentralized trust systems is its schtick, including identity verification, data exchange, communities, and industry-specific functions.

The network does not require expertise with distributed networks to use. Its mainnet pre-launch event, i.e. when the project stops being vapourware, was on 26 June 2018. It lost 15% over the previous month and 15.4% over the week. You don't want to look at its yearly chart.

ONT was at $1.3, compared to over $6 the year before.

ZEROEDGE

Gambling is an even bigger business.than online gaming skins but gamblers hate being scalped by casinos.

ZeroEdge offered cryptocurrency for online gambling. It said on its website: 'Zero Edge is a decentralized online casino and an open protocol aiming to disrupt the online gambling industry by;offering players 0% house edge casino games, fee-less sports betting and an open source platform for building online games.'

But a benchmarking website on 27 June 2018 only gave the number of tokens sold as of 5 March 2018. This despite the launch on 15 May of the ZeroEdge Casino and continuation of the ICO token sale for another months.

Could this be because the Medium webnews site on 27 March published an article entitled 'ICO Scam Alert: ZeroEdge Is All Fake'?

Medium then published a self-publicizing piece by ZeroEdge on 7 April (with no indication of the writer). On 7 June another ZeroEdge story declared: 'Start Your Own Online Casino in Less Than 5 Minutes'. But not much is available on the Internet between these dates. Just Google it and see. Update mid-June 2019: don't bother.

Surely you don't imagine this is financial advice! If so, think again. Does it sound like I know anything about investing?

You've completed Day 2 of my 7-day crypto investing course following up on superforecasting cryptocurrencies (I never found a way)

Day 1: Get some Tinkerbell tokens and HODL

TOMORROW: NOW TRADE!