- Barter system, you give me a cow and I give you 100 kgs of rice (2/n)
๐ ๐ฉ๐ซ๐ข๐ฆ๐๐ซ ๐จ๐ง ๐๐ฅ๐จ๐๐ค๐๐ก๐๐ข๐ง & ๐๐ซ๐ฒ๐ฉ๐ญ๐จ๐ฌ ๐งต
I still everyday meet investors who think Bitcoin & Blockchain are the same & this thread is specifically for them
Do re-tweet & help us educate more invetsors โบ
#Investing #Cryptos #Bitcoin (1/n)
- Barter system, you give me a cow and I give you 100 kgs of rice (2/n)
- It was difficult to transact in fractions
- What if I want only 50 kgs of rice? I cant give you half a cow right?
- This is the prime reason for the introduction of smaller units of payment method we now call as coins (3/n)
- It was malleable & portable
- It was non corrosive, could be stored for a long time
- It was a perfect combination of abundance & rare
- Plus it was eye catching & visually appealing (4/n)
a) When paper currencies were introduced, it was decided that a country could only print as much currency as the gold reserves they have but this was withdrawn in 1971 bcoz of which the central banks could then print as much money as they wanted
(c) To solve the above problem, Bitcoin was invented. (6/n)
(a) It claims to be a Store of value (like Gold is) & a payment method (Like $ is) (7/n)
(a) Assume split wise. Friends go out, sometimes someone pays and sometime someone else. At the end of the year, there is a ledger mentioning how much does who owes whom. (9/n)
(c) Currently, banks do this verification when you transact through the bank. Banks maintain transaction record of credits & debits (10/n)
(e) But what can you do to decentralize? No banks, no NSE/BSE/CDSL/NSDL? To verify the transactions, you use computational work (replacing intermediaries (Banks) with computational work), let me explain (11/n)
(a) There are multiple computers also called as miners or NODEs are connected to each other on open source software (12/n)
(a) It is called Bitcoin Halving
(b) It reduces the bitcoin reward for the miners by half every time 2,10,000 blocks are verified (18/n)
(d) This is the bitcoin reward 4 solving the block & no new bitcoins after 2,10,00,000 bitcoin are released
(a) Altcoins - Anything other than a Bitcoin is called the Altcoin. Example โ Ethereum, Cardano, Polkadot (20/n)
(c) Meme-Coins - Made for fun, have no logic. Example โ Doge, Shiba (21/n)
(a) Blockchain is a brilliant technology & has multiple use cases in various industries
(b) But on Bitcoin, I am not sure if it will be able to replace paper currencies as a medium of transaction or gold as a store of value. (22/n)
(d) Altcoins with use cases like De-fi will evolve over time & we will talk about it in the next thread. Will also talk about the fancy around NFT's & Metaverse going forward (23/24)
@KirtanShahCFP
Have earlier written on,
-Sector Analysis
-Macro
-Debt Markets
-Equity
-Gold
-Personal Finance etc. You can find them all in the link below https://t.co/UrRt87xIJFโฆโฆโฆโฆโฆ (END)
Here\u2019s a compilation of Personal Finance threads I have written so far. Thank you for motivating me to do it.
— Kirtan A Shah (@KirtanShahCFP) December 13, 2020
Hit the 're-tweet' and help us educated more investors
More from Kirtan A Shah
Hereโs a compilation of Personal Finance threads I have written so far. Thank you for motivating me to do it.
Hit the 're-tweet' and help us educated more investors
Yes Bankโs additional Tier 1 bonds, written off. Lakshmi Villas Banks Tier 2 bonds, written off. Understand what & why of ATI and Tier 2 bonds in this thread.
https://t.co/VBmV2dwpPn (1/n)
'Floating Rate Funds' - A case for debt investing in the current interest rate situation
Fixed Income investment strategies
Itโs a misconception that FD, RBI Bond, PPF etc have no risk. The reason we donโt see the risk in them is because for us, risk ONLY means loss of capital.
Index Funds v/s ETFs
While index funds and ETFโs look similar, there are multiple differences you need to keep in mind before investing in either of them. Let me highlight the important ones
Hit the 're-tweet' and help us educated more investors
Yes Bankโs additional Tier 1 bonds, written off. Lakshmi Villas Banks Tier 2 bonds, written off. Understand what & why of ATI and Tier 2 bonds in this thread.
https://t.co/VBmV2dwpPn (1/n)
Yes Bank\u2019s additional Tier 1 bonds, written off. Lakshmi Villas Banks Tier 2 bonds, written off. Understand what & why of ATI and Tier 2 bonds in this thread.
— Kirtan A Shah (@KirtanShahCFP) December 4, 2020
Do \u2018re-tweet\u2019 and help us benefit more investors (1/n)
'Floating Rate Funds' - A case for debt investing in the current interest rate situation
'Floating Rate Funds' - A case for debt investing in the current interest rate situation (A Thread)
— Kirtan A Shah (@KirtanShahCFP) November 27, 2020
You should not miss this if you invest in Debt.
Do \u2018re-tweet\u2019 & help us benefit more investors (1/n)
Fixed Income investment strategies
Itโs a misconception that FD, RBI Bond, PPF etc have no risk. The reason we donโt see the risk in them is because for us, risk ONLY means loss of capital.
Fixed Income investment strategies (Thread)
— Kirtan A Shah (@KirtanShahCFP) November 20, 2020
Do 're-tweet' & help us reach & benefit investors
It\u2019s a misconception that FD, RBI Bond, PPF etc have no risk. The reason we don\u2019t see the risk in them is because for us, risk ONLY means loss of capital. (1/n)
Index Funds v/s ETFs
While index funds and ETFโs look similar, there are multiple differences you need to keep in mind before investing in either of them. Let me highlight the important ones
Index Funds v/s ETFs
— Kirtan A Shah (@KirtanShahCFP) November 17, 2020
Do 're-tweet' so that we can reach a larger audience :)
(Thread)
(1) While index funds and ETF\u2019s look similar, there are multiple differences you need to keep in mind before investing in either of them. Let me highlight the important ones (1/n)
Should you add more in Equity or redeem right now?
A thread ๐งตto guide retail on why & what should they do at these historic market highs.
Do โre-tweetโ and help us educate more retail investors (1/n)
#investing #StockMarket
Some investors feel that markets are trading at a PE of 27 vs 10 years historical average of 20 and a market-cap to GDP of 105 vs historical average of 79 and hence markets look expensive (2/n)
But, in such crazy liquidity driven markets, prices can move much ahead of the fundamentals & suddenly we start hearing commentaries of how the market is pricing in the earnings of FY 22 & 23 to justify the rally
If you r new to fundamentals, ๐ can help
Results for Q4 have come out very well but that is also because of the lower base effect of the last year.
Over the last many years, markets have corrected 10-15% each calendar year. Can it happen this year as well? Can very much and that can be a great entry point. Why? (4/n)
There are a lot of over hangs in the near term,
-Crude going up
-$ index moving up
-Inflation moving up
-COVID uncertainties
All of the above are โve for markets & liquidity on the other side driving markets up, its impossible to judge the near term movement of the markets (5/n)
A thread ๐งตto guide retail on why & what should they do at these historic market highs.
Do โre-tweetโ and help us educate more retail investors (1/n)
#investing #StockMarket
Some investors feel that markets are trading at a PE of 27 vs 10 years historical average of 20 and a market-cap to GDP of 105 vs historical average of 79 and hence markets look expensive (2/n)
But, in such crazy liquidity driven markets, prices can move much ahead of the fundamentals & suddenly we start hearing commentaries of how the market is pricing in the earnings of FY 22 & 23 to justify the rally
If you r new to fundamentals, ๐ can help
Market PE at 40 and yet the market is not falling, why? Getting asked this question multiple times. Here's a thread covering \u2018very basic\u2019 premier on valuation for my retail investor friends.
— Kirtan A Shah (@KirtanShahCFP) January 14, 2021
Do hit the \u2018re-tweet\u2019 and help us educate more investors (1/n) pic.twitter.com/8oCkBmmOXY
Results for Q4 have come out very well but that is also because of the lower base effect of the last year.
Over the last many years, markets have corrected 10-15% each calendar year. Can it happen this year as well? Can very much and that can be a great entry point. Why? (4/n)
There are a lot of over hangs in the near term,
-Crude going up
-$ index moving up
-Inflation moving up
-COVID uncertainties
All of the above are โve for markets & liquidity on the other side driving markets up, its impossible to judge the near term movement of the markets (5/n)
More from Bitcoin
Another #FreeLoveFriday. So far, Iโve covered Bitcoin, Mastercoin/Omni, and last week ChainLink and the importance of decentralized oracles. Today, letโs talk about one of the most fascinating projects in crypto - @MakerDAO
In my thread about Mastercoin, I briefly touched on the vital role fiat-backed stablecoins play in crypto markets, but thereโs a catch with them:
The counterparty risk of a third-party holding fiat in reserves.
Enter MakerDAO, which set out to create a decentralized, collateral-backed cryptocurrency, DAI, that would be โsoft-peggedโ to the U.S. Dollar using the power of algorithms. In crypto tradition, its supporters said trust game theory, not operators.
In 2017, MakerDAO published a whitepaper describing a system where anyone could create DAI by leveraging ETH as collateral to create Collateralized Debt Positions. Essentially, you take out a digital USD loan against your crypto.
The game theory of the system is structured such that DAI issuance is controlled to keep the price pegged to $1.00. In essence, it buffers the fluctuations of the underlying collateral to create a synthetic dollar bill.
Back with another #FreeLoveFriday. Last time, we covered how Mastercoin/@Omni_Layer pioneered digital asset issuance on blockchains. Today, let\u2019s discuss @Chainlink and the vital role it plays in connecting blockchains to the real world. https://t.co/0poYIBtGrt
— Emin G\xfcn Sirer (@el33th4xor) January 22, 2021
In my thread about Mastercoin, I briefly touched on the vital role fiat-backed stablecoins play in crypto markets, but thereโs a catch with them:
The counterparty risk of a third-party holding fiat in reserves.
Enter MakerDAO, which set out to create a decentralized, collateral-backed cryptocurrency, DAI, that would be โsoft-peggedโ to the U.S. Dollar using the power of algorithms. In crypto tradition, its supporters said trust game theory, not operators.
In 2017, MakerDAO published a whitepaper describing a system where anyone could create DAI by leveraging ETH as collateral to create Collateralized Debt Positions. Essentially, you take out a digital USD loan against your crypto.
The game theory of the system is structured such that DAI issuance is controlled to keep the price pegged to $1.00. In essence, it buffers the fluctuations of the underlying collateral to create a synthetic dollar bill.
