Thinking about the reasons for why Golem is up x10, and the driving forces for the upcoming rise of iEx.ec which can also rise x10 or more, led me to some speculative conclusions on what could be causing it (beyond perceived utility).
- Ethereum is moving from Proof of Work which favors miners to Proof of Stake
- Individuals who have a lot of ETH have no where to put it except into ICOs because productive interest paying assets aren't available
- Miners currently get lots of money in mining rewards and see Golem as a way to secure their market role
- iEx.ec also can favor miners because the more computation resources you have the more you can provide to iEx.ec
Hypothesis 1 - Could it be that miners are putting their ETH into Golem and iEx.ec to protect themselves from Proof of Stake?
Once Ethereum switches to Proof of Stake what is supposed to happen to all that mining equipment? I would think the typical miner would want to secure future profitability of their mining equipment. Would Golem be a way to securing this? I think it can be and it would make sense.
ICOs are a high risk high return investment. The reason people with lots of ETH get involved in ICOs is because there is no where else to put their wealth. In traditional markets there are dividend paying stocks which people can buy to receive passive income. These dividend paying stocks are usually listed as "dividend aristocrats" and typically are among the safest choices for people buying stock for income. A person only needs a certain amount of money to live and anything else has to be invested, so the problem faced by large ETH holders (people who hold 1000-10,000+) are where to put the wealth? They cannot simply "cash out" because then they lose wealth through inflation guaranteed, and it's not obvious that stocks aren't in a bubble so even if the ICO market is in a bubble the stock market bubble is even bigger, real estate is also in a bubble in most places, so the only places to put it would be ICOs or dividend investments.
Steemit used to provide interest on the Steem Dollar and Steem Power, and Peerplays intends to do something similar. The problem is for people holding Ethereum there is no store of value which is not volatile which can generate interest like the Steem Dollar. As a result the only place to put 100,000 ETH is in ICOs. If someone finds fault in this thinking let me know?
A proposed solution and prediction
Token sales are risky, but if there were tokens which pay interest to the holders, this will solve the problem. Eventually Ethereum is switching to Proof of Stake which will allow large holders of ETH to not have to invest in ICOs and essentially gambling to get some ROI because a no risk ROI will be possible from interest via Proof of Stake. I predict once Proof of Stake comes online with Ethereum the current ICO environment will settle down as large holders will be satisfied to live off POS without the need to buy into ICOs. In addition, for the rest of crypto-space there will need to be more tokens like Peerplays and others which actually pay interest to token holders. In this way people with a lot of crypto wealth will have places to put it rather than in ICOs and or into the hands of scammers.
Disclosure: I hold Ethereum, Golem, and iEx.ec tokens.
References
It will go to eth classic, which is where they plan to keep mining. At least I thought this was the case anyway...They were planning to NOT go with POS like ETH.
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This may have been true but iEx.ec and Golem provide an option for people who don't want to go to ETH classic. The developers don't support ETH classic.
Btw Fuzzy you might be interested in my posts about Tauchain+ARGs. The significance of these posts might not make sense today but visionaries like yourself will be among the first to connect dots.
The statement: "Tauchain enables ARGs better than any other platform" is not yet obvious.
https://steemit.com/tauchain/@dana-edwards/collaborative-alternate-reality-games-tauchain-ubas-universal-basic-assets
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I am kicking myself a bit that I didn't buy into golem sooner. I have iex.ec now but I am waiting a bit to get into GNT to see if it will go down a bit more. When do you think would be a good time to buy?
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Golem is up 10x so the only reason I hold any at all is to buy more iEX.ec in the future. The only reason I hold either of these is as a hedge and store of value as I see them as the only relatively sacred ICOs.
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I think I will accumulate iEx.ec for now. If Golem goes down then I will buy a little bit to see if it will continue its rise. I don't really comfortable to buy GNT now since it is near the top and went up so quickly but this is crypto and anything can happen.
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I sold all my Golem(GNT) today for iEx.ec (RLC). I think it's about time.
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I love my Golem :) So glad to come back and see we are on the same page!
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Just hold ETH. If the ETH ICOs do well so will ETH. ETH has no limited upside since its like Bitcoin but more useful.
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You cannot make any profit just holding anything unless it pays interest. Proof of Stake pays interest but currently ETH does not. This is why miners have to invest in ICOs.
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Of course you can just hold and make a killing in the right asset. Amazon in 97' was $1. Amazon in 99' was $100. It never paid a dividend.
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But people have living expenses. Holding doesn't generate any passive income unless there are dividends and this means it's the highest risk choice. Holding all your ETH in Ethereum itself puts the fate of your wealth entirely in the current price of ETH. Also you cannot grow your wealth or generate income from your wealth that way. And also currently ETH is inflating daily, so holding it in ETH is lossy.
Wealth tends to go where it can increase.
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Good point. However, most ICO's are ERC-20 based which means they rely on Ethereum to run the DAPP. No token has paid dividend yet and few will. Many have chosen burn method. ETH inflation is less than Bitcoin due to ice age. Also, few miners want to sell since ETH will be required to stake forcing the prices up even higher. Ethereum is best token to hold in my opinion and I been saying that since last year. Until we see some ridiculous run up to $200-$250 theres little reason to sell ETH. I am betting it trades at least to a 20 billion market cap.
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Of course but the price of ETH can go down while those tokens may be going up. People who find themselves millionaires because ETH went up are going to have to put it into ICOs because there is currently no where else. Proof of stake might change things though.
One reason people wont sell their ETH is because the taxes are so high for cashing out to fiat. This gives people the incentive to stay in the Ethereum ecosystem as long as they can and only sell when they need to live from it.
Let me ask you, if you could get 8% interest on $500,000 would you choose that or would you cash it all out into fiat, pay 40% tax possibly, and then put it into stocks or real estate to get less than 8% interest? The market in Ethereum doesn't seem irrational because there isn't any better alternatives than ICO except to hold, and there is no low risk opportunities yet.
Of course I'm not a game theorist or expert so I could be wrong so take it as my interpretation of people's motives.
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Yes, I understand your points. Just that miners of ETH know staking will lock up many Ether so few wanna sell now. I can see though from ETH ICO investors that bought at .50 cents they might wanna take a few ETH off the table and buy realestate or something very stable to diversify but there's also a whole other group that got in below $10 after the DAO hack that are not selling. The adoption of especially ETH (crypto in general) is really happening so its kinda like selling out in early 98' before Internet really took off in 99'. People who understand the tech know this is a chance in a lifetime to make bank as adoption takes place. Off topic: As investor in Steem I could not be anymore disappointed. I am not sure what they are doing but they need get there act together ASAP. The market is up 10X yet Steem can't even go up 100% . What are they doing here?
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If Steem were a business ask yourself what the Steemit employees are doing to add value and increase the share price? In terms of adding value this would mean increasing revenue so that revenue is greater than expenses.
It does not seem to me that they know how to do this and as a result the price of Steem is under $1. In addition, there aren't many users of Steemit and after a year of development it still doesn't compare even partially to Reddit or Voat.
So if you thought Steem was an investment perhaps you thought wrong? It's just a game and Steem tokens are not real money. Steemit employees are under no legal or moral obligation to commit to raising the price of the Steem tokens and the founders of Steemit have been powering down, where the co-founder Dan has left the project entirely.
I've been powering down ever since Dan started powering down and pulling his involvement back. When Dan left the project I now choose to wait and see on Steemit. If the price goes up then great, but I see no use for Steem Power because the interest level is too low to be considered attractive. They had something with the 100% interest, or even 10% interest on the Steem Dollars, but without this interest Steem Dollars and Steem Power become "ugly".
I hope Peerplays avoids making the same mistakes. Don't change your original agreement with your stakeholders. If you promised 100% interest or 10% or whatever it was, then stick to it. If you promised a certain set of rules when people bought or earned their way in to last for at least 2 years or some set period of time then stick to that period of time. I knew when they were willing to change these rules of the initial agreement that all rules about the project were flimsy and could be changed without justification if enough people can be convinced.
This is fine but if I agreed to hold Steem Power specifically because of the old rules then when those rules change so does the attractiveness of Steem Power. The Steem Dollar is still useful but not as useful as it was with higher interest. Steem missed an opportunity to capture billions of dollars because Tether and other solutions are all centralized and wouldn't scale for store of value. In addition no solution currently exists to give 10% interest, or 5% interest, on any asset that I know of, and for this reason wealth has no where to go.
If an Ethereum long term holder wants to buy real estate they have to cash out into fiat. When they do this they have to pay all kinds of taxes whether it's 10% if they wait 1.5 years, or it's up to 40% as income tax. There is no legal clarity here either. REITs aren't the worst investments as they can generate 8% in interest yearly from various rents, but that income only will come after a person cashes out, pays their taxes, which means much more paperwork, hiring accountants, etc.
If it is a significant sum of money, as in millions, then I would see why someone would take 500,000 and pay whatever accountants to get into real estate. If it's less than that then the ICOs might be a better opportunity in the short to medium term, and a lot easier. It's easier to send ETH to a smart contract than to cash out, hire accountants, pay whatever the taxes will be, research REITs or even more risky buy a house, and then have to learn the real estate business. Personally if it were me I would diversify after a certain threshold but I can totally understand why people in a certain range of ETH, such as 1000-5000, are just going to hold and wait a bit longer. Those who have 10,000 ETH probably can cashout at any time as they are millionaires right now or close to it.
At what point would you cash our your ETH? How much ETH and at what price? And into what exactly? What would be so important that you would pay 40% tax to cash out?
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fascinating information. What do you think or know about Aragon?
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It looks like it's to help someone manage a company? But I don't understand the use case. Why would someone need Aragon for these services?
If it doesn't handle the legal aspects of company formation then what good is it if the legal risks are higher than going the traditional route? What sort of companies would benefit from it?
They have a two member team, and neither member has a background in law. Where is their legal expert or advisor? In addition I don't see any advisors at all so I can say the project likely isn't very serious because I cannot discover who is giving them advice.
Do I think companies can be decentralized? They already are. Companies also are global. All of this already can happen using the typical legal mechanisms and any company cannot avoid those mechanisms as a company only exists legally. So for companies I cannot see what Aragon does unless it's somehow a way to blend the blockchain into the management of it. I will say I would have to see actual companies running on this before I can say I truly understand it.
My stance officially on Aragon is you can use it to manage a company perhaps but the best way to do that is unknown because it's too new. It doesn't take away the paperwork aspects, or the need to register, but it might also depend on the laws of each state and or country.
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I remember Aragon now. I recommended it to Kaylin a few days ago. But having looked closer at it, I think it's a toy app and not yet useful for a real company. It might eventually become useful. More on my comments below.
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Take a look at VIVA project and the VIP "saving account" (Viva Investor Pool or VLP on the WP)
I seriously want your thoughts about it.
Here is the WP
https://s3.amazonaws.com/vivacoin/viva-white-paper-v-2-0.pdf
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It's not for me. I would say Steemit (old incentive structure) and Peerplays make the most sense. VIVA looks like a scam to me. Too many buzzwords, and nothing novel or any reason to believe it will be profitable, plus they talk of "investors" which opens them up to legal risks should their investors not be happy with their investment.
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I agree about the buzzwords, but nothing novel??? Did you read all the WP?
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No code? Whitepapers are just words really, or at best an attempt at a specification, but even there I don't see a specification but more a confusing description. In any case, they don't indicate what they'll be doing with the money or show any code.
I also see no indication of research so how did they arrive at this design? No references in their whitepaper? So no evidence it can even work. What about a multisig wallet, no mention of security?
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To be fair to you I looked at it again. I still think it's a scam because where is the Github? Where is the actual code for me to inspect? Is it based on Graphene? And they ask for my money...
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@dana-edwards thanks for the hypothesis
for an intresting read about Golem https://steemit.com/cryptocurrency/@pps/golem-cryptocurrency-to-solve-computation-power-tasks
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Solid blog. Thanks for bringing this to my attention. Many people say the prices of cryptos are high but we also thought that about Amazon, Apple and Facebok last year. An interesting website I found: https://www.coincheckup.com The site is my go to place for crypto investment analaysis and indepth coin research.
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