Nakamoto Coefficient

I started staking Solana today. It's not easy or intuitive as one might think: you need to pick a validator, which there are many, to stake with. How do you pick a validator? There are many attributes such as voting, uptime, commission rate, etc. A website that is useful is Solana Beach (https://solanabeach.io/validators) which ranks the validators based on a "score" -- the top 20 are blanked out because the website wants new users to stake with others to reduce the reliance on a few validators. 

That is how I stumbled upon the Nakamoto Coefficient which is a measurement of how decentralized a crypto is relative to the total number of miners / validators. 

This website has a great summary of it. 

What is the Nakamoto Coefficient?

As the wave of adoption in decentralized blockchains continues, it is important we pay attention to how decentralized these blockchains are. One metric to gauge the decentralized nature of a blockchain would be the Nakamoto Coefficient. The Nakamoto Coefficient represents the number of validators (nodes) that would have to collude together to successfully slow down or block any respective blockchain from functioning properly. The higher the Nakamoto Coefficient relative to the total number of validators, the lower the risk of collusion disrupting a decentralized blockchain.


Use Arweave to archive websites and PDFs FOREVER

I read Fred Wilson's post about buying crypto assets and a few names were new to me. I haven't heard of Arweave before but their website gives away free tokens for new users. So I gave it a shot and now have archived my first website. You can find my Archived website that is permanently stored in the blockchain.

The process to setup was super simple. You can try it yourself too. Let me know your thoughts and what future potential you think this token has.


New sidebar links

I added some links to the sidebar. I hope you like them. Most are about tracking crypto activities. Please let me know what others you would like to see on the sidebar.

NYT article on Bitcoin and why it uses so much electricity

The more I read about Bitcoin, the more excited I get. It started as a simple idea / project among a small group of users and today, the entire Bitcoin network consumes more electricity than some countries! Impressive for something that is so "young" relative to other projects that have touched so many lives. 

If it took Bitcoin a decade to consume this much electricity, imagine what the next decade will hold. Could Bitcoin be the driving force to use more green, renewable energy? It would be such a turn of events if in ten years most of the electricity that is being used for mining comes from solar, wind or other forms of renewables. 

That usage, which is close to half-a-percent of all the electricity consumed in the world, has increased about tenfold in just the past five years

Link to NYT article (free)


EIP-1559: Are you ready?

This is really exciting for Ethereum. I think this is positive and we'll see the price increase by year end. Today ETH is about $2,700. There are only about 12 hours left before this is implemented. 

Learn more about the upgrade from Coinbase here

Check out the countdown to the upgrade here

U.S. General Services Administration auctions BTC and LTC

I've never seen this before, but the U.S. government is auctioning crypto that was seized.  

Eleven lots of cryptocurrency up for bid on GSA Auctions

June 16, 2021

ATLANTA -- Become a part of the growing cryptocurrency community by placing a winning bid during GSA Auctions’ next cryptocurrency sale.

Bidding on 11 lots of cryptocurrency, totaling 8.93 bitcoins and 150.2 litecoins and with a combined market value of nearly $377,000, begins on Friday, June 18, 2021, at 5 p.m. ET. This 4-day auction closes Monday, June 22, 2021, at 5 p.m. ET, with the option to extend the closing time to accommodate last-minute bidding. This auction marks the first time that Litecoin will be available on GSA Auctions.

GSA first began auctioning cryptocurrency on behalf of the U.S. government in early 2021. To date, users of the GSAAuctions platform have successfully bid for a total of 16.99 bitcoins over three auctions that garnered $937,092.

“Experienced investors recognize a good opportunity when they see it, which is why our auctions have generated so much enthusiasm among the crypto community,” said Thomas Meiron, Regional Commissioner for GSA’s Federal Acquisition Service. “With the addition of a new type of cryptocurrency, this promises to be one of our most exciting auctions of the year.”

Registration is required to place a bid, and the winning bidder must make a payment via wire transfer no later than June 23, 2021. The winning bidder will also need a digital wallet to receive the property. Network transaction fees may apply. As there is no tangible asset up for bid, GSA will not hold an inspection day.

A service of the U.S. General Service Administration, GSA Auctions is the federal government’s online clearinghouse for surplus federally owned assets and equipment, such as office furniture, vehicles, scientific equipment and collectibles.

The website looks so '90s:

What is Alchemix? Interview by Kevin Rose with ALCX co-founder and short YouTube video

I'm a subscriber to the Modern Finance podcast and enjoy Kevin Rose's interview with various crypto personalities. You can find what I'm listening to right now here

In this podcast, Kevin is interviewing the co-founder of Alchemix, a DeFi lending platform. Before listening to this podcast, I had a rough idea of what Alchemix is but didn't really understand how it was able to do it. Below is what I have learned so far in my hour or so research:

  1. A user deposits a stablecoin into the Alchemix vault
  2. The user is then able to borrow up to 50% of their initial deposit
  3. After a period of time (depending on the yield farming rate), the loan will repay itself
  4. The user can then take back their original loan amount

This all seems very compelling; especially when the loan repays itself. I'm not sure how sustainable high yields will be in the long run but perhaps in the short term this can work. 

I plan on doing more work to learn about Alchemix and its (governance) coin, ALCX. 

Additionally, Gemini this week started allowing trading of ALCX on its platform. This is positive news and I hope more attention goes into DeFi. 

Finally, here are some stats about ALCX including a calculator to show how long it would a loan to repay itself.