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March 21, 2018

 

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Crypto Market Commentary

Neutral Day

Altcoins have mixed gains while high caps flatline

The market is nearly neutral for the day. A small rally followed by a sharp loss puts us at 345 Billion, which is still up from the 275 Billion low we saw on Sunday.

 

One of the biggest pieces of news percolating through the crypto community has been an issue discovered with the Ledger Nano S. A 15 year old hacker was able to backdoor the hardware wallet, which until now has been seen as the most secure method for storing cryptocurrency.

His 300 bytes of malicious code cause the device to generate pre-determined wallet addresses and recovery passwords known to the attacker. They could then enter them into a new Ledger to recover the private keys of the compromised device.

 

Using the same approach, the hackers could change wallet destinations and transaction amounts, so the $50 you’re sending your friend is suddenly $5000 being sent to the hacker’s address.

 

Ledger have recently released a firmware update for the devices which was meant to serve as a deep dive and fix into three known vulnerabilities. You can read the blog post here. We recommend anyone with these devices update to firmware 1.4 by following the instructions here.

 

Unfortunately, according to the hacker and John’s Hopkins researchers, the backdoor vulnerability was not fixed with this most recent update as it is a fundamental design flaw.

 

The Ledger Blue and Nano S rely on the ST31H320 secure microcontroller from STMicroelectronics to provide the cryptographic attestation that the device is running authorized firmware. Because the microcontroller doesn’t support displays, USB connections, or communications, the Ledger engineers added a second general-purpose microcontroller, the STM32F042K6, to serve as a proxy. In a nutshell, the hacker’s exploit works by replacing the genuine firmware with unauthorized code while at the same time causing the one microchip to send the other the official firmware image.

 

This exploit is eerily similar to the recently discovered exploits of Spectre and more specifically Meltdown.

 

As Ledger Nano S owners, we’re certainly concerned by this news, but at the same time we do not feel threatened. For one, this attack is only possible if the hacker has physical access to your hardware wallet. Second, so long as you bought the device directly from the company, or from a reputable reseller, there should be no concern that malicious code was installed on the device before you acquired it. Last, so long as you’ve never installed any unsigned apps onto the device via command-line, there will be little to worry about. Also, if you have the older model, the Nano, then there’s nothing to worry about as it has a different architecture.

 

We look forward to hearing more from the Ledger team as they look to quell the concerns people have.

Talk to you this week.

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Offense – Adding Trades

Offensive Actions for the next trading day: 

  • None.

Defense – Managing Risk

Defensive Actions for the next trading day: 

  • None.

Current Portfolio

Desired Holdings

How to read this portfolio: Please click on the Chart Key tab above for definitions and color codes. The colors correspond to our 7 categories in the graphic below.

None.

None.

Tier 2

MOD

 Tier 3

REQ

SUB

LINK

NANO

KNC

Tier 4

BNTY

TAU

WISH

PHR

LOCI

XBY

ELA

ECC

POE

HPB

BIX

EVE

How to read this portfolio: Ticker: Contains the ticker code for the coin. You can search this ticker in Coinmarketcap to learn more about the coin. The color denotes the risk tier by our evaluation. Dark Red = T1, Dark Green = T2, Dark Blue = T3, Light Blue = T4 (Colors in the Ticker column do not interact with the colors in the other columns) Cost Basis = Our average purchase price for this coin. Current price = The average price of the coin based on the exchanges it is listed on. Strategy = What we plan to do with this coin. Staking is receiving dividends for that coin. Master node is also staking, but with a higher return rate for having a (large) number of that coin. Stop = Our exit point, if it exists What do the colors mean? The colors in the ticker column represent the risk profile of that coin. The colors in the other columns reflect what sector(s) that coin belongs to. Some coins belong to multiple sectors, which is indicated by multiple colors. The colors correspond to our 7 categories in the graphic below

ReadySetCrypto’s 7 Categories Of CryptoCurrency

Tier 1 coins are those coins which we have considerable assets invested, are firm believers in the project direction and execution, and have very little reason to sell within short to mid term. These are coins which we risk evaluated to be very solid, and have a high probability of existence duration.   

NEO

NEO ($NEO) is classified as a Dividend and Platform coin. As our largest holding, we believe NEO has the potential to become a dominant smart contract and DApp platform in 2018. It’s four most compelling features are:

  • An innovative consensus algorithm which will allow for greater TPS (transactions per second) over its competitors.
  • A dividend structure for holders, incentivizing coin retention and network stability / diversity.
  • SE Asia location, enabling NEO to break into markets more easily than competitors.
  • Agnostic smart contract language, allowing for smart contract developers to use existing mainstream programming languages, which allows for cheaper smart contract implementation as compared to Ethereum who’s proprietary smart contract language, Solidity, can be a barrier to integration.

NEO is best acquired through Binance. Storing NEO on the Binance exchange will result in a GAS distribution once a month on the first. We recommend the NEON wallet for safe storage. GAS will be distributed on the NEON wallet daily.  

WaltonChain

WaltonChain ($WTC) is classified as a Dividend and Utility coin. Waltonchain is on the cutting edge of using RFID hardware to enable supply chain management 2.0. We believe Walton has the potential to become a dominant IoT blockchain solution Waltonchain is the only truly decentralized platform combining blockchain with the Internet of Things (IoT) via patent pending RFID (Radio Frequency Identification) technology. The custom RFID chips are able to digitally sign and verify transactions at the integrated circuit level, automatically and instantly reading and writing data to the chain without human intervention. This unique implementation of blockchain + IoT facilitates the true interconnection of all things in the real world with the virtual world, creating a genuine, trustworthy and traceable business ecosystem with complete data sharing and absolute information transparency. Walton has two major competitive advantages:

  • A recently confirmed (to be signed) partnership with China Mobile’s IoT Alliance. China Mobile is the largest mobile telecommunications service in the world as well as the world’s largest mobile phone operator by total number of subscribers. Walton’s Management system is set to be implemented through mobile communication networks, and China Mobile is the largest one. Waltonchain is positioning themselves to be the single connector of the entire Internet of Things initiative put forward by the China Mobile IoT Alliance.
  • They implement the blockchain through the RFIDs at the foundational layer. Their technology is patent-pending and gives Waltonchain a solid claim as the only blockchain that connects the physical world with the virtual world with truly reliable data. This is because all other IoT solutions tag items through API, and this means all the data is first passed through a centralized intermediate, a potential point of vulnerability.

Ethereum

Ethereum ($ETH) is an open blockchain Platform that lets anyone build and use decentralized applications that run on blockchain technology. Like Bitcoin, no one controls or owns Ethereum – it is an open-source project built by many people around the world. But unlike the Bitcoin protocol, Ethereum was designed to be adaptable and flexible. It is easy to create new applications on the Ethereum platform, and with the Homestead release, it is now safe for anyone to use those applications.

OmiseGO

OmiseGO ($OMG) is classified as a Dividend and Utility coin. OmiseGO is a Southeast Asia-based company creating an e-wallet that will make transfer of assets and currencies possible. Merchants and users of the wallet can transfer whatever asset or currency they desire. For example, you could use your ethereum, bitcoin, international fiat, or even your airline points to buy groceries using the e-wallet app on your mobile phone. Transfers can happen across borders, or even while traveling abroad. Unlike Western Union or PayPal for example, the fees are almost negligible, and the transfer is instant. Because it’s based on a blockchain, there are no intermediary banks necessary and users don’t need bank accounts to access those funds. This is especially good for migrant workers who send money home and often don’t have bank accounts and are forced to use expensive wire services instead.

Tier 2 coins are those coins which have performed extremely well, we have a large amount of assets with, and we believe will continue to operate with high marks. What separates these coins from our Tier 1 status is a flaw or they haven’t yet proven their defining feature, though we believe they will.

NAVCoin

NAVcoin ($NAV) is a Privacy coin with upcoming Platform features. NAVcoin has been around for 3 years. It is not minable, instead being based on a Proof of Stake system in which stakers earn 5% annual returns. Theoretically this means there could be 5% inflation on the supply, however, that would require every coin holder to stake, so likely there will be very marginal inflation between 1 and 3% year over year. It is a currency originally based off of Bitcoin version 0.13, which should tell you it’s got a good foundation from which to build its feature set. Being based off Bitcoin, it currently is a method of transaction, with notable upgrades in the form of Segwit (with possible lightning network integration in the future) and 30 transaction times with extremely marginal fees. That’s great but a lot of coins have that going for them, so thankfully we’re just getting started with the real interesting pieces of NAV. The first and currently only implemented feature, NavTech is a unique dual blockchain technology. Essentially, NAV runs on these two blockchains in order to completely disconnect the sending wallet (your wallet), to the receiving wallet (where the money is getting sent). Think of it like a VPN, NavTech completely strips the sender’s details so the transaction is completely anonymous. The anonymous transaction space has really gotten big lately, with Monero’s recent price action and Ethereum’s implementation of ZKSnarks being two big examples that come to mind.Moving on to the roadmap, there are two big upcoming features for NAV:

  • The first is Polymorph, which is a really cool blend of Nav’s anonymous transactions and Changeally’s instant exchange. What this means is that, for example, I wanted to pay someone in Bitcoin but I wanted to do it anonymously. Polymorph would take my bitcoin, turn it into navcoin in order to be processed and sent anonymously using the Navtech dual blockchain, then turned back into bitcoin at the to be sent to the receiving wallet. This will certainly set NAV apart, as it guarantees anonymous transaction for all of the coins on changeally. This is huge for exposure, and a great opportunity for NAVcoin to gain trust, which is absolutely critical anonymous transaction coins.  
  • The second big upcoming feature is ADApps, or Anonymized Decentralized Apps. This is also a huge potential win for Nav as there is already a huge amount of interest in the crypto space surrounding Dapps, such as Ethereum and Omni. Adding in the anonymous layer would attract projects that would value the anonymity. Nav is still in the planning stages for this project so it could still be awhile before it comes to fruition, but we should see the whitepaper for it soon, and if they could be first to market with ADapps that could prove to be a killer feature for them as it would give them first access to the interested demographics.

Ripple

Ripple ($XRP) is a real-time Payment protocol for anything of value. It’s a shared public database, with a built-in distributed currency exchange, that operates as the worlds first universal translator for money. Ripple is currency agnostic and has a foreign exchange component built right into the protocol. Ripple acts as a pathfinding algorithm to find the best route for a dollar to become a euro or airline miles to become Bitcoin. It will look at all the orders in the global order book. The case for XRP comes down to the following: 1) Payment systems work best with bridge assets to focus liquidity. 2) There are good reasons to expect a cryptocurrency to be the most popular bridge asset. 3) There are good reasons to expect that cryptocurrency to be XRP.

  • Open, decentralized payments will have lots and lots of assets, including national currencies of all kinds and cryptos. A significant fraction of payments will be among assets that aren’t the most popular. Using intermediary assets to settle those payments concentrates liquidity and reduces spreads.
  • National currencies are always tied to jurisdictions and can’t be universal. Systems built around them will never be as open and inclusive as systems that aren’t.
  • XRP settles faster than any other major crypto. It higher transaction rates than other major cryptos. It is beat by others only by the amount of liquidity available today. And, most importantly, XRP has a company that is devoted to making sure XRP succeeds for this specific use case.

Tier 3 coins are those coins which we have moderate investments and we believe have a possibility of high performance in the future, but as of yet have not shown enough performance to reduce their risk profile. Tier 3 coins are coins which are moderately risky, but due to our risk analysis of the project and team we believe have minimal chance of failure. 
Tier 4 coins are coins which we have minimal stake in, are highly risky, and we are contributing no more than 2% of our portfolio to. These coins represent the outer fringe of our risk analysis, in that we have little information to work with, have little insight into the coin’s performance, and at the very best we are making an educated guess that they will be successful. If a coin performs well and proves that it has a commitment to its compelling feature, it will be moved to the Tier 3 status.  

ICON

Simply put, ICON ($ICX) is a massive scale blockchain Platform that allows

  • Decentralized Application (DAPPS) – Build DAPPS on ICON Platform like on Ethereum and NEO. Yes, soon, you will see ICOs happening on ICON platform for different DAPPS
  • Interchain (Interoperability with Blockchains) – Allows different blockchains connecting to one another through their protocol. ICON is fully compatible with traditional blockchains like Bitcoin and Ethereum and in future can bridge other public blockchains such as Qtum, NEO and many others to achieve their mission statement – “Hyperconnect the world”
  • Artificial Intelligence (AI) – Use of AI to ensure all nodes contributing to ICON Republic/platform are rewarded fairly and not to have certain powers over distribution policies. AI will continue to learn a variety of variables to determine optimal distribution policies and achieve complete decentralization.
  • Decentralized Exchange (DEX) – ICON will integrate different DEX protocols on their platform to facilitate exchange of ICX and other future ICON platform currencies. Bancor protocol will be their first DEX protocol when mainent launches this month end and Kyber and others will follow. Not just throwing Kyber’s name out there, it was confirmed they are working with each other, official partnership yet to be announced.

 

Fundamental Currency Research

We need to address a recent new report that claims that child pornography is stored on the Bitcoin blockchain. It sounds a lot worse than it is, but it doesn’t mean that you can’t do it.

The discussion is based around this German research paper, which demonstrates that they have found methods for storing images on the Bitcoin blockchain through encrypting the data. While the methods are insanely expensive and not detectable by 99.99% of the people using the blockchain, it’s theoretically possible.

 

While we could defend this flaw by saying that thousands of terrible pictures are stored on the internet and are much easier to access, the crucial difference is that once the encrypted image is linked into the blockchain, it is forever on there due to the nature of the blockchain.

 

It’s a concerning thought to be sure. The ability to store arbitrary immutable data on the blockchain is potentially very dangerous in modern society. Top secret information, bomb making instructions, social security numbers, nuclear launch codes, etc.

 

Yes it is expensive, but depending on the goal, it could be worth it. If your goal was to kill the blockchain, posting incriminating information on it that would compromise the whole chain could be a way to do just that and turn public sentiment against it.

 

In my opinion, this is a much more salient, if clearly hypothetical, argument against the blockchain than saying that cryptocurrency is used for drug transactions.  

 

In this context, it makes it clear to me that this is the biggest issue for blockchain going forward. If a blockchain is found to be storing illicit information, would the government step in and force a hard fork? I’m not sure a solution currently exists. This ability is directly tied to the fundamentals that make blockchains work. It’s the clear divide between censorship resistance and centralized censorship. They’re diametrically opposed, and presents a future problem that we’re going to have to solve.

 

Thankfully, the problem is remote enough right now that it’s mostly confined to clickbait articles and esoteric debates. Time will tell if this becomes the blockchain’s arch-nemesis, or boogeyman.

ICON ($ICX) had an absolutely amazing day today, hitting a 30% positive change over the past 24 hours. While it doesn’t make up for the last month of soul-crushing loss for the coin, it is nice to see it’s still got signs of life.

 

The catalyst for the surge was centered around the announcement that ICON would be listed on Bithumb, one of the largest exchanges in the world.   

There is still no news regarding the token swap so, unfortunately, we are still in a holding pattern regarding that.

In this section we’ll feature a daily ICO or new coin we think you should check out. Based on your country, you may not be able to participate in the ICO, but you will be able to trade the coin once it is listed on an exchange following its ICO (usually only a couple of weeks). ICOs are where a lot of money in crypto is made. Here’s proof.   That said, we should warn you: ICOs are highly risky endeavours and you need to mitigate any potential losses. Treat it as money you’ve lost the moment you contribute to the ICO. We are not responsible for the ICO’s performance. Today’s featured ICO / New Coin is:

Vestarin

For flipping Neutral.

For long-term holding Neutral.

What is it? 

Vestarin is a unique platform for the cryptocurrency market. You can find the right people to work with the blockchain projects. Spend crypto for daily needs, shopping, restaurants or services without changing it to fiat money. Be more informed from trusted people about new ICO start-ups before investing in them, as well as about a lot more features such as informational base, news, forum and mining farms market, in order for businesses to integrate an establishment or a shop in any country and get a profit in cryptocurrency.

What is our verdict? 

What we like: Good vision and can be widely adopted.

What we don’t like: Seriously needs to refocus and improve communication to demonstrate what the project is good at.

 

12 days (ICO)

Token
VST
Price
1 ETH = 2000 VST
Platform
Accepting
ETH
Soft cap
2000 ETH
Hard cap
35 000 ETH
Country
Whitelist/KYC
KYC

Website: https://www.vestarin.io/

Whitepaper: https://www.vestarin.io/en/whitepaper

Technical Analysis Research

The G20 bump might have played its course by now, so while we’ve seen a nice little pop off of the bottom over the last three days, we still have not seen that smaller-timeframe reversal propagate up to the daily chart yet. Financial markets have got to run their course just like a virus must be eradicated within a body, otherwise they tend to pop up again. I want the next rally to be a “no-doubter” and not some milquetoast low-volume nothingburger.   In today’s video I discuss the “death cross/golden cross” moving average combination. I have not used these as a trade-able signal in the past, but they can be a warning signal when they occur. And right now, BTC is only a few days away from a death cross. Again, I have not found this signal to be statistically significant BY ITSELF, however it’s just one more signal that goes on the pile of evidence. I also talk about using different exchanges to find the data that we need, because the recent volume hero Bitfinex is a zero when it comes to showing volume from 2013, which is where Bitstamp comes in.   If you get five technical analysts together in a room to look at a chart, you’ll end up with ten different opinions. Speaking of which, I believe that next Wednesday evening (8pm ET NY time) I’ll be giving a live webinar on using technical analysis with the crypto market. (or any market, really) Put it on your calendar now and we’ll send an invite once the date firms up.

If you go to buy any of our courses at our online “store” you can receive $10 off the $59 street price with your member’s “coupon code” of member18crypto..

With overall crypto markets in a dull corrective market, I’ll continue to focus more on the larger cap coins until they break loose, then it will be a better market for alt-coins. Moves are not sustaining right now.
I am doing the majority of my Technical Analysis work on TradingView and Coinigy, and I have a BitFinex app on both my iPad and Android smartphone. All of these charting platforms call a TradingView API. TradingView is the 800 lb. gorilla in the Crypto charting space until the “established” players want to make a go at Crypto, like Ninjatrader, Tradestation, eSignal, Sierra charts, etc. My sense is that TradingView has such a head start that it will be very difficult for the big boys to make a dent in this space for a while. Until that point, TradingView has almost a monopoly in this space. If you have a particular tool that you think is superior, please let me know.   You can access the BitFinex and TradingView platforms for free, however there are some paid features that you might want to consider depending on your needs, such as expanded watchlists, different study sets, account alerts, etc.

  Coinigy is a great tool for determining prices on each exchange, however I may not have access to the full suite of tools on TradingView charts. I am currently not using it as a front-end GUI for my exchanges, which it supports.I also use Blockfolio to give me a quick snapshot of my holdings, and find that it does an excellent job to aggregate all of my holdings into one easy-to-read snapshot of my cryptocurrencies, which are typically located in many different places.

 

I will also be experimenting with the Profit Trailer app which might be useful in this choppy market. I hope to share results and tips/tricks with you in here once I get this bot up and running.

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