We need to be aware of our thinking processes when making decisions in trading and investing – by Wolfgang Fallmann

Many traders and investors are losing money on the markets. They believe that they make rational and good decisions. Unfortunately, this is not true for most people and for most investment decisions. All too often we allow ourselves to be fooled into relying too much on our current mood, feelings and emotions when making decisions. We believe our first intuitive answer, but it usually causes mistakes. We tend to be risk takers when we lose and risk averse when we win. We tend to overestimate our knowledge of the world and underestimate the role that chance plays in events. Because our brain is not designed for this, we ignore statistical facts and overweight unlikely events.

An introduction to Sovryn, a Decentralized Margin Trading and Lending Platform, based on the Bitcoin Blockchain and RSK Smart Contracts.

If you want to trade with Bitcoin or lend them out to generate an interest, you have to accept a risk which Bitcoin is supposed to have overcome: you have to entrust your coins to a third party. You might know the slogan “Not your keys, not your coins”, but so far you had no choice but to transfer your coins to a company that would control your private keys. If you wanted to avoid this and go DeFi, you had to exchange your precious Digital Gold for Ether, which is not exactly an attractive alternative for die-hard Bitcoiners.

Sovryn changes this. It is a decentralized platform built on RSK smart contracts which run on top of the Bitcoin blockchain. Sovryn offers two services: a margin trading platform for risk-affine traders, and a lending platform which pays an interest to Bitcoin owners who lend out their coins to the traders who use them as leverage.

China celebrates its new year – a good opportunity to take a look at the Chinese crypto market. By Olga Filatova (Hong Kong)

One of the most attractive markets for business of all spheres, especially crypto, is China. But it is also a mysterious one. First, objective factors are that the People’s Republic of China is home to 1.4 billion people, more than 40 percent of whom are considered middle class who can afford excess consumption.

There are also some subjective reasons. Chinese need to bypass the official procedures to withdraw money from the country. Chinese also love to gamble, which, in fact, is the core of many manipulations of the crypto market.

How a DeFi trader from Canada keeps his brick-and-mortar business alive in times of Covid.

APE Parkour is a gym in Grand Prairie, Canada, which had been running successfully for some years when the government forced it to close down because of Covid restrictions. This could have meant bankruptcy for its founder Chad McDonald, as for so many small business owners. But he does not give up and uses Decentralized Finance to keep his dream alive. His situation is especially critical, as he is not only paying rent for his current gym, he is also investing in his own building for the future.

Chad does not like banks, as he had bad experiences with them in the past. Instead of taking a bank mortgage, he made a private arrangement with a construction company. They are giving him a private mortgage which he originally planned to pay by the revenues of his gym.

Money-on-Chain provides the first Bitcoin-backed stable coin and more.

If you run a business, you need a stable unit of account in which you can state your prices and keep your books. With its hefty up and down movements, Bitcoin cannot provide the stability merchants need, that is why many are not using it yet. While for a trader or investor Bitcoin’s volatility is beneficial, merchants want a stable currency.

Therefore many companies are currently working on so-called stablecoins with significantly less volatility. Most of them peg their coin to fiat money. Projects like Tether, the TrueUSD or USDC claim to deposit one US dollar in a bank account for each stablecoin they generate. Tether originally promised to exchange your Tether for US dollars at any time. At present, there are about 26 billion Tether in circulation, which should be covered by 26 billion US dollars.

Despite a record number of transactions, the Bitcoin blockchain works much better than during the last big bull run of 2017

The number of daily Bitcoin payments has recently reached a new All-Time-High, while the MemPool of unconfirmed transactions remains surprisingly small. The reason for this is the increasingly efficient use of space on the blockchain through a method called batching.

Despite its ever-stronger status as digital gold, Bitcoin remains first and foremost a payment system. And a payment system can be judged by how many payments it processes. It fits well with the All-Time-High of the Bitcoin price that the number of payments has reached a new All-Time-High, too.

We have interviewed Tone Vays, one of the most well-known traders and consultants of the Bitcoin space. He is a die-hard Bitcoin maximalist and has a very clear (and controversial) opinion about all other cryptoprojects.

SMART BITCOIN INVESTOR: The price of Bitcoin nearly doubled from September to December 2020*, why do you think did that happen?

* This interview was conducted on December 8th, 2020

TONE VAYS: Bitcoin has been in a bear market for more than two years, so it was just Bitcoin’s time to go up. We saw a lot of corporate interest in Bitcoin, and that is a huge driver. Companies like Microstrategy are buying so much Bitcoin, taking it off the market, and when people read about this, they feel that they are missing out. So the fact that big companies are getting into Bitcoin drives the retail confidence.

A short introduction into Decentralized Finance on the Bitcoin blockchain and RSK smart contracts

DeFi, shorthand for “Decentralized Finance”, has been one of this year’s most significant trends. According to a report by DappRadar, the total market volume of DeFi has risen more than tenfold in 2020, from 12 Billion USD in Q2 to 125 Billion USD in Q3. Tokens of DeFi platforms such as Uniswap, Aave or Compound have seen a dramatic rise in value.

What Bitcoin does to money transactions, DeFi promises to bring to lending, borrowing and trading: a system that works without the need to trust any middlemen. All intermediaries such as banks or exchanges, which make the traditional financial system so vulnerable to fraud and corruption, are replaced by the cold hard math of open source software. A crucial role in this financial revolution play so-called smart contracts, a concept that has been developed by the computer scientist, lawyer and cryptographer Nick Szabo in the early 1990s.