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Hashrate beats the S&P 500 or A word on the benefits of hashrate rental.

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Hashrate beats the S&P 500 or A word on the benefits of hashrate rental.

/* this article is not a financial recommendation */

The story of Warren Buffett’s $1 million bet is well known. Without going into detail, we can say that index funds are completely superior to all other forms of asset management. Interestingly, after the announcement of the bet’s terms, which claimed that no professional could build a portfolio that would beat the S&P 500 in 10 years, the managers did not flock to get easy prey or take advantage of this excellent chance to publicly prove their worth. Protégé Partners was the one company that accepted the call with one qualification: the names of the funds it selected would not be disclosed.

As a result, 10 years later, Buffett clearly proved he was right — even with the choice of the top fund, long-term returns can’t match those of the main index fund.

The reasons certainly lie much deeper than it might seem, but they are based on the important fact that funds primarily enrich themselves, and last of all — those whose money they use. In other words, ordinary users of financial services, who invest their money and pay insane commissions, are actually supporting a horde of professional financiers who don’t aim to provide them with maximum income. It’s hardly a surprise that the index of the 500 top US companies over 10 years shows much better results, since it reflects the true dynamics of the development of the American economy, rather than the personal appetites of stock traders.

But if the S&P 500 is this attractive, a fair question arises: could any cryptocurrency index bring the same, or maybe even greater profitability, perhaps not over 10, but over 5–6 years? This is definitely the right train of thought, but the whole thing is that the cryptocurrency market is too young and immature. Over the years, a huge number of coins have been replaced in the top five, and even more of them — in the top-10 or 100 They were mostly pushed up by speculative hype, so the idea of compiling an arbitrarily reasonable index out of all this still looks premature.

Nevertheless, let’s assume that six years ago we compiled an index of 10 leading cryptocurrencies in terms of capitalization in appropriate proportions. As of January 2015, it would include Bitcoin BTC 81.2%, Ripple XRP 14.2%, Litecoin LTC 1.36%, BitShares BTS 0.77%, PayCoin XPY 0.64%, Stellar XLM 0.5%, Dogecoin DOGE 0.4%, MaidSafe MAID 0.38%, NXT Generation NXT 0.35%, Peercoin PPC 0.2%. Today, some of these coins have already sunk into oblivion, but the remaining ones would be enough for us: the capitalization of Bitcoin has grown by more than 300 times, Ripple — by more than 100, Litecoin — by 250, Stellar — by 500 times, and Doge is an additional bonus with its 3000-fold surge. If we had waited a year, Ethereum would have been included in the index. However, the index could easily be rebalanced as the market situation changed, just as it happens with the S&P 500.

All in all, our hypothetical index has grown over 300 times over 6 years. The S&P 500 index has grown approximately 2.5 times (150%) over the same period. We should, however, remember that almost the entire growth was brought on by bitcoin due to the selected proportions. However, by including more coins in the index and diluting bitcoin’s presence, we would still hold the lead until the component pie chart began to turn into a full color circle: such an approach would be destructive.

Let’s try to objectively figure out how this success came about and which primary parameter should be taken as a basis. Five coins out of the top ten showed impressive profitability, but some simply disappeared. We based our choice of proportions on coin capitalization. However, the capitalization of any other real-world asset would not make the slightest sense. Who cares about the cost of all the coconuts, bananas or all the palm oil in the world? Or even the cost of all the oil or gold in the world? These are purely curious facts, nothing more. In addition, capitalization blindly follows the price.

In the cryptocurrency world, bitcoin sets the bar. Altcoin seasons come and go, individual coins shoot up hundreds of percent, but if bitcoin falls — everything else falls, too. It is obvious that altcoin prices depend on the price of bitcoin. Bitcoin has been and still remains the main measure of confidence in the entire cryptocurrency market. What does its price depend on?

The price of bitcoin is a function of difficulty. The difficulty is automatically recalculated by the system every two weeks, so that a block is created every 10 minutes. The difficulty, in turn, is a function of hashrate — the higher the hashrate, the easier it is for miners to mine new blocks and accelerate the emission, which the system resists. A hashrate increase means a decrease in mining profitability, since it requires increasingly greater investments in computing equipment, but halving, in fact, cuts profitability in half. This, however, has never led to significant drops in the exchange rate, just the opposite!

So, could hashrate be the fundamental characteristic that determines market behavior? The point here is not so much bitcoin itself, but miners’ involvement in the industry, their willingness to trust the system and work in it, invest money in equipment, believe in their approach and long-term profitability? If there was no bitcoin, these same people would still enter the market of the asset that replaced it.

So, wouldn’t it be fair to direct all attention to hashrate and imagine a certain hashrate index, which, unlike hypothetical cryptocurrency indices, can demonstrate much better growth dynamics?

In early 2015, bitcoin hashrate was about 300 PH/s, and at the May peaks it reached 180 EH/s, showing a 600-fold increase. Hashrate is computing power. Those who own the hashrate own the market and push it up. The dynamics of the last few years clearly indicates that the growth of the entire cryptocurrency market is based on the growth of bitcoin hashrate, and the same applies to significant drops. The speculative waves that keep rolling into the market, like the one in late 2017, may seem to contradict this theory and hashrate appears to follow the price, not vice versa. However, market sentiment is one thing, and fundamentals are another. The 2018 bitcoin slump only provoked hashrate growth, in other words, the crowd was swept off the market for a reason.

To sum up all of the above, what can an ordinary user who would like to own hashrate, but is not ready to buy equipment, do?

CryptoUniverse provides a concise and simple answer to this question. Its core business activity is the construction of modern data centers near efficient sources of renewable electrical power. One example of its approach is the data center in the Nadvoitsy town in the Republic of Karelia in the north of Russia, where a reconstructed hydroelectric power station allows to minimize energy consumption costs. Thus, in order to get hashrate with a several-year horizon, the user needs to choose a suitable contract among those offered by CryptoUniverse. The user-friendly dashboard allows you to instantly assess the payback period and potential income, while keeping the natural market growth in mind.

When a user owns hashrate, they receive a daily reward in bitcoins, earning money in the same way as they would speculating on currency rate spreads. The difference is that there is no speculation going on: owning hashrate eliminates trading, but your funds keep growing on the deposit.

Thus, owning hashrate today looks more than justified, and it is available to any private user, too. As Warren Buffett said, volatility is far from synonymous with risk, so bitcoin’s growth and fall phases are merely circumstances. The same circumstances occurred time and time again with the S&P 500 index. However, any long-term growth, including hashrate growth, is based on people’s willingness to deposit funds in entire sectors of the economy, otherwise, why would all this have been invented by the very same people? Certainly not to play at a loss all their life…

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Source: https://medium.com/@cryptouniverse_cloudmining/hashrate-beats-the-s-p-500-or-a-word-on-the-benefits-of-hashrate-rental-cacac597f390?source=rss——cryptocurrency-5

Blockchain

DraftKings Doubles Down, Partners With Polygon

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Yes, it was just a few short months ago that DraftKings launched the ‘DraftKings Marketplace‘ in partnership with Autograph.io. In that short time, we’ve seen the sports gambling powerhouse churn out some successful NFT releases with the likes of Tiger Woods, Simone Biles, Tom Brady, and more.

Now, DraftKings is doubling down on crypto, this time pairing up with Polygon for some versatility and support in secondary-market transactions.

DraftKings & Polygon: A Prime Pair

Scalability and sustainability are two traits that Paul Liberman, co-founder and president of global product and technology at DraftKings, cited as “critical challenges of blockchain technology” that Polygon was able to address to meet DraftKings’ needs. According to the press release, the company will also have an option to potentially contribute to Polygon’s governance protocol and keep the network secure as a validator node with its own stake pool.

Polygon will hone in on custom NFT drops and secondary-market transactions.

The marketplace is available for millions of DraftKings’ users, and the platform is currently working towards transferability of NFTs to decentralized wallets via Ethereum mainnet. Meanwhile, Polygon has continued to show investment in NFTs, gaming, and corresponding areas. Existing partners for Polygon include the likes of Atari, ZED RUN, Decentraland, The Sandbox, and more.

“Although DraftKings Marketplace is still in it’s nascency, we are bullish on the possibilities that blockchain, NFTs, cryptocurrency and more will present as we prepare for Web 3.0 alongside Polygon and the new innovations ahead for digital collectibles,” added Liberman. A refreshing take from brand executives that shows the immense potential ahead for crypto in online gaming and gambling.

Polygon continues to solidify partners to build further investment in gaming and NFTs. | Source: $MATIC on TradingView.com

Related Reading | Crypto Scammers Take Over Dating Apps Users’ iPhones

Gaming, Gambling & Crypto

The emergence of young industries stateside, such as sports gambling and cannabis, are prime contenders for crypto integration – and this move for DraftKings is a prime example. They are also industries that are on the rise throughout the US in particular.

Reports emerged this week that New Jersey was the first state to hit a $1B month of bets last month. The first online sports betting entrant in the state was none other than DraftKings, who partnered with Resorts Digital; that partnership yielded nearly $42M last month, leading the online-only handle in the state.

All that to say that DraftKings is one of the largest players in the game, publicly traded with a valuation north of $20B.

Many platforms are targeting the crossover of gambling, gaming and crypto. Polymarket, for example, describes itself as an “information markets platform” that runs on Ethereum, where users can place bets on sports and current events.

Related Reading | Who Funds Bitcoin Core Developers? Here Are The Facts

Featured image from Pexels, Charts from TradingView.com

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Source: https://bitcoinist.com/draftkings-doubles-down-partners-with-polygon/?utm_source=rss&utm_medium=rss&utm_campaign=draftkings-doubles-down-partners-with-polygon

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Blockchain

Anthony Scaramucci Sees Bright Future as First US Bitcoin Futures ETF Makes NYSE Debut Following Positive Nod from S.E.C.

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In Tuesday morning trading, the ProShares Bitcoin Strategy ETF (NYSE: BITO) made its debut, marking a monumental occasion in the developing story of cryptocurrency regulation. The fund, which tracks CME bitcoin futures, or contracts speculating on the future prices of bitcoin, rose by roughly 3% early in the session and continues to hold those gains at time of publishing.

The crypto sector as a whole has pursued a bitcoin-focused ETF for years now, with asset managers submitting proposals for spot bitcoin ETFs as early as 2017. To date, however, the U.S. Securities and Exchange Commission had consistently rejected these proposals, maintaining the stance that none of the applications were able to prove market resistance to manipulation.

While the ProShares Bitcoin Strategy ETF falls short of the spot bitcoin ETF that many in the industry hope is on the horizon, experts agree that Tuesday’s opening stands as a turning point in the regulatory approach of the SEC.

“Remember, there’s a difference between the cash ETF, obviously, and the ETF that everybody’s talking about right now. I have a preference for the cash ETF, but I love the fact that the SEC is allowing for the futures ETF,” Anthony Scaramucci, founder and managing partner of SkyBridge Capital, told CryptoCurrencyWire in an exclusive. “It’s just a sign that they’ve decided that they know the blockchain is going to be a very big component of the future of the financial services industry. I take this as a monumental decision…to allow the United States to stay the leader in financial services globally. I think it’s a very positive sign.”

To stay up to date on the latest cryptocurrency news, signup for the CryptoCurrencyWire newsletter at www.CryptoCurrencyWire.com and for more on SkyBridge Capital & First Trust Skybridge Bitcoin Fund L.P. visit www.SkyBridgeBitcoin.com.

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Blockchain

Traders Start Longing Cardano ($ADA) Over Other Altcoins, Here’s Why

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Cardano ($ADA), the fourth-largest cryptocurrency by market cap seems to have lost market momentum post its Alonzo upgrade in September. The smart contract integration was seen as a key catalyst to its price as $ADA rose to a new all-time high of $3.10 in the run-up to the upgrade. Even though the upgrade made Cardano a Defi and NFT hub, its price hasn’t made much progress since then.

$ADA is currently trading at $2.13 with a 1% loss over the last 24-hours, the altcoin price has fluctuated in the range of $2.10-$2.70 since September. At present Bitcoin is leading the market rally with eyes set of new ATH, while altcoins seem to be in a consolidation phase.  Historically, the real altcoin bull run begins when the $BTC market tops as seen in April-May when the majority of the altcoins hit new ATH.

Cardano
Source: TradingView

The market sentiment towards altcoins looks stable at present, but recent data from Santiment indicate an unusual rise in interest of traders for $ADA, something that was seen during the Alonzo hardfork.

Can Cardano Make a Turn-Around?

Cardano’s social media mentions went through the roof during the Alonzo upgrade, but the hype died down with the successful completion of the upgrade. Many critics believe the September high was the top for the altcoin, however, new data shows traders on Binance is longing $ADA more than other altcoins showing a bullish sentiment in the making.

Cardano
Source: Santiment

The sharp rise in long position is often followed by a bullish price rally for the altcoin and if the trader’s interest continues to mount, it could build a bullish momentum strong enough to help it record new ATHs.

The altcoin had quite a phenomenal year until now having broken into top-3 crypto rankings and currently sitting at third. $ADA with its new decentralized ecosystem is expected to become the go-to option for Defi and NFTs due to the scalability and security that Cardano offers.

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The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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Source: https://coingape.com/traders-start-longing-cardano-ada-over-other-altcoins-heres-why/

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