The First Decentralized Exchange of the DeFi-on-Bitcoin Ecosystem

Exchanges are an important part of the Bitcoin ecosystem, but also its Achilles heel. Many exchanges have been hacked, the most spectacular case was undoubtedly the one of Mt. Gox in February 2014, when 850,000 Bitcoins were stolen. Although security measures have improved since then, a centralized exchange will always be an attractive target for hackers.

Even worse, centralized exchanges can easily be forced by governments to comply with their outdated laws, which were designed for the old system of intermediaries who require trust. But they make no sense for Bitcoin, which is defined by its trustlessness and regulated by its protocol, not by authorities. If you want to use a centralized exchange like Kraken, Bitstamp or Binance, you have to go through an annoying „Know-Your-Customer“-process (also known as KYC). You have to upload a copy of your passport, take a selfie and disclose other things that are nobody else’s business.

Our Ego makes us perceive reality in a distorted way, which can lead to wrong investment decisions

I remember during the big Bitcoin hype in November 2017, when the mood in the Bitcoin and Altcoin market was very optimistic one of my friends invested in Bitcoin. He was convinced that the Bitcoin price would rise far above $20,000 and could also give plausible reasons for this. Half a year later, after the Bitcoin price had collapsed to about $8,000, I met him again and we talked about his investment. He said that he knew that the Bitcoin price would never rise above $20,000 and again he gave me plausible reasons for this.

How the Unicorn Indicator Shows That We Are in a Crypto Bubble

One of the most interesting metrics of the crypto market is the Unicorn Indicator. It counts how many cryptocurrencies or tokens have a market cap of more than a billion dollars. Today there are 69 of them, according to Coinmarketcap.com.

What does the Unicorn Indicator reveal? First, it is a reliable indicator of bubbles. If the number of unicorns has risen exceptionally fast, it means that investors are spreading capital evenly across the market, regardless of news and facts. They will buy anything with the label “crypto”.

How to use Money-on-Chain’s BitPro Token to generate a passive income from your Bitcoins

We already wrote about Money-on-Chain’s stable coin, the Dollar-on-Chain, in issue #3. Now we will have a closer look at the BitPro, which is another important token of the Money-on-Chain system. The Dollar-on-Chain (DoC) is backed by Bitcoin, which means: Bitcoin owners need to add some Bitcoins as collateral to the protocol, otherwise no DoCs can be issued. Logically, they need to be compensated for this.

This is the function of the BitPro. It generates a passive income for Bitcoin owners who invest their Bitcoins in the Money-on-Chain system. In 2020, BitPro owners made a profit of 20% compared to hodling their Bitcoins. From March 2020 to March 2021 the profit even increased to 25%. – not bad for a low-risk investment! Bitcoin, BitPro and DoC are closely connected. The more Bitcoins are locked into the system, the more BitPro tokens can be issued and the more DoCs are available.

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.