Whether you are aware of it or not, we are already using digital currency.
When we deposit cash into the banks, we are giving up possession of a physical item, and in exchange we receive an increase in numbers on our bank account screen. Using our debit and bank cards, we can pay with money we’ve stored directly from our bank to the seller(s) of the product(s) we purchase, or if solely online, we simply pay electronically using our cards’ numbers.
With the advent of even more accessible payment systems, such as Venmo, Zelle, and Cashapp, people have grown accustomed to not needing a card on hand to pay. As the digital world grows increasingly efficient and effective, people use physical money less and have little need for a physical card. With the pandemic of 2020, a demand was born for a “touchless” lifestyle and grew the popularity of Apple Pay and other technologies, such as digital wallets.
Now, approximately 76% of people carry less than $50 in cash at any given time, and 30% don’t carry any cash at all. *
People may not realize it, but currency has been largely digital for years now and integrated into most people’s lives.
When asked, more than 6 out of every 10 people in the U.S. say that it is highly likely we’re headed toward a cashless society. **
By large, people haven’t made the connection yet, but crypto is coming and they are far more familiar with it than they realize.
Welcome back to the bull market! Joking aside, this week, it finally feels like crypto is doing something other than staying sideways. At the start of the week, it seemed like the market was gearing up to take a ride up.
On Tuesday, investors were met with a substantial amount of gains with coins such as Bitcoin moving from the low $19,000’s up into the mid $20,000’s as well as Ethereum moving from the low $1,300’s back up into the $1,500’s. Ethereum hasn't seen a price above $1,500 for over a month, trailing back into September during the post-merge hype and sell-off. Bitcoin, on the other hand, has seen these levels a few times over the past month and is still looking to break into the $21,000’s and higher ranges, an area that has proven to be a level of resistance and a rather difficult zone to break into.
Although these pumps on Tuesday were well received by investors, most coins are still stuck within a trading range that began mid-summer in June. So why this sudden move up in the market you may ask?
The equity markets opened positively on Tuesday, and sent the crypto markets rallying alongside it. The most likely reason for the equity market’s rally is the beginning of some of the most impactful earnings reports from many large publicly traded companies. Earnings reports are essentially where companies tell us how business has been going with their revenue and sales which gives investors a look inside these companies’ futures. They provide a deeper insight as to how certain industries are being affected by inflation and the impact of all the monetary policy actions taken recently by the FED.
Taking a dive into the world of earnings reports, some of the biggest giants in the market are reporting this week. Tuesday began with earnings from Coca-Cola, General Motors, and UPS, to name a few before the market opened. These positive earnings reports sparked a rally in the equity markets which translated into the crypto markets.
As the day progressed, investors eagerly awaited the arrival of earnings from Microsoft and Google, which hold a very substantial size of the total market. Both Google and Microsoft missed their projected earnings reports after the market closed, wiping away all the gains seen during market hours. Pushing into Wednesday, Boeing, Meta (Facebook), and Ford all reported earnings that were less than flattering.
Interestingly, with the equity markets rather flat on the day there was some continued upside for the crypto markets where Bitcoin finally touched the $21,000 range again, breaking an over one-month period of price action below. The big move up in the market this week caused quite a stir around crypto Twitter where many discussed the massive $800 million in liquidations which affected over 100,000 traders in a 24-hour period.
For those unaware, let me give a brief explanation of what liquidation means. Naturally, all cryptocurrencies are risky investments because they are still so early in adoption, but there is a way traders have found to fill their appetite for even more risk. Enter the world of a speculative derivatives trader.
Derivatives, commonly referred to as futures and margin trading, allow investors to trade with borrowed money which essentially allows traders to make a bet on the future price of their chosen investment going up or down. When trading derivatives, one does not buy the underlying asset, instead they put up some of their own capital, known as margin, into a trade while being allowed to borrow money that isn’t theirs, to increase the size of their position. In essence that initial capital investment becomes a loan collateral in a specific trade.
Ok, this sounds great right, so why isn't everyone doing this? When a trader opens a margin trade with their collateral, they are allowed to set a certain leverage multiplier to increase their total position size and expand their earning potential, but it comes with a catch. That catch is labeled as a liquidation price. When these types of positions are open and active, if the trade goes unfavorably in the wrong direction, they risk the potential of getting what’s known as a margin call where they’ll be forced to either close the position at a loss, add more money into the position or hit their liquidation price.
When a trader is liquidated, they lose all that collateral they put into their trade, a complete loss, poof, it's gone. Circling back to that $800 million in liquidations this week, those who were liquidated were betting on the likes of Bitcoin and Ethereum going down, but they did the exact opposite and those traders lost all of their trade investments.
By the time you're reading this, more companies will have rounded the week out with their earnings reports including many companies from the energy sector, Shopify, McDonalds, and the two most awaited reports from Apple and Amazon. In addition to these earnings, we will also have received the GDP data on Thursday and the Core PCE data on Friday which likely invited more market volatility and opportunities for gains and more liquidations.
Although that degen inside you may want to hop right onto the closest crypto exchange and toss your whole bag at a moonshot call with max leverage, do keep in mind proper risk management as we have discussed in a previous article. Let's face it, no one wants to be a part of an $800 million liquidation statistic. If you do find yourself on the wrong side of a trade and taking a loss, find the lesson in the loss. You can still come out with a win, even if the win is for knowledge and not one of financial gain, it still holds value in its own way! As usual, NFA, DYOR, stay safe, love y’all, and see you next time!
Happenings in the Community:
Twitter Is Now In Elon’s Palms
Breaking news! Elon Musk has completed the purchase of Twitter at a $44 billion acquisition. He has since updated his Twitter bio to “Chief Twit.” Twitter as a platform has always been the mouthpiece of web3, from crypto to NFTs. What would this signal for web3’s future?
In a recent tweet to Twitter Advertisers, Elon shared, “The reason I acquired Twitter is because it is important to the future of civilization to have a common digital town square, where a wide range of beliefs can be debated in a healthy manner, without resorting to violence.”
Known for his views on cryptocurrencies and strong support for Dogecoin, an ERC-20 crypto token, he is no stranger to the web3 landscape, which is pivotal to the future of tech. One core tenet of web3 is censorship resistance, and hopefully, having someone in tune with the space at the helm will mean Twitter will adopt some web3 ethos.
An exciting possibility is Twitter having its own platform avatar NFTs. As seen with Reddit’s phenomenal success in onboarding the masses with their alien avatar, Snoo, a digital collectible (NFT) on the Polygon blockchain, Twitter could also adopt a similar route. We look forward to seeing how Twitter will evolve with this change in leadership.
Telegram Is placing a TON of Confidence in web3.
When we ask the crypto/NFT crowd about social networks, Twitter will be at the top of our minds. However, there are other communication giants that are ingrained in our lives, such as Telegram. Although not a social network per se, it is an active and potent communication channel used by niche or mastermind groups in the space.
Without a doubt, blockchain is taking over all things digital. Community volunteers recently resurrected TON blockchain's use by running an auction of wallet usernames on the network. TON was launched by the team behind Telegram in 2020, which was later forced to abandon the project due to a legal battle with the U.S. Securities and Exchange Commission (SEC) over its initial coin offering (ICO).
“I’m really impressed by the success of the auction TON recently conducted for their domain/wallet names. Wallet.ton was sold for 215,250 Toncoin (~$260000) while casino.ton was sold for ~$244000. If TON has been able to achieve these results, imagine how successful Telegram with its 700 million users could be if we put reserved @ usernames, group and channel links for auction,” said Pavel Durov, the founder of Telegram, according to a report from TechCrunch.*
Identity is a big part of web3, and with this move, Telegram users will soon be able to prove ownership of their handles via the blockchain. As more companies race to adopt blockchain technologies, the closer we are to a revolution in the digital space.
Educators are Getting a Web3 Upgrade with TinyTap
Tiny Tap, a platform for user-generated educational content (games) for students, is rolling out an education-related token called Publisher NFTs. A subsidiary of Animoca Brands, a blockchain gaming behemoth, the company will be auctioning six of the NFTs on Opensea.
Each Publisher NFT is linked to a bundle of educational games and interactive activities and represents co-publishing rights to a course created on the platform by an educator in a specific subject. The owner of the NFTs will be able to take on a co-publisher role to promote the course, and proceeds will be shared by the NFT owner and creator of the course.
The auction is the company’s first step in leveraging web3 technology to incentivize educators to create quality courses and explore new business models made possible by blockchain technology. Web3 is here to stay, and those who actively explore this new frontier will come out on top once the dust settles.
Welcome to another of our articles on web3 education. We introduced the fundamentals of Etherscan in our previous write-up. Today, we’re leveling up and will dive into how to go through smart contracts on the blockchain.
Smart contracts contain code that carry out a set of instructions on the blockchain. For example, if you mint an NFT from a minting site, you’re interacting with a smart contract. NFTs are minted through smart contracts that assign ownership and manage the transferability of the NFT.
These codes and agreements are publicly viewable on a decentralized blockchain network. They are transparent, trustless, autonomous, and irreversible once deployed. A custom, efficient smart contract is difficult to code. Thus reputable NFT projects usually hire an auditor to review their smart contracts to check for any issues or bugs before being deployed to the blockchain. Projects may have to scrap the whole code and redo it if there is a significant issue with the code.
Anyone can write/copy a smart contract and deploy it to the blockchain. On Ethereum, for example, all you need is to learn Solidity, its smart contract language, and have enough $ETH to deploy the contract on chain. The challenge comes when you want to write code for features and functions that are out of the box.
Finding the Contract Address
The best way to access an NFT’s smart contract is through Etherscan or an NFT marketplace listing. We recommend going through the official links in a project’s discord to find their smart contract on Etherscan. There are tons of bad actors in the space, so if you search for a project directly through Etherscan, you may come across plenty of fake collections that could drain your ETH wallet of your NFTs and crypto.
To view a project’s smart contract, you can click on the contract's hyperlink in the Profile Summary section in Etherscan for the project.
Alternatively, you can also use Opensea, the largest NFT marketplace, where you’ll be able to click on the Contract Address under a project’s ‘About’ dropdown. Click on the contract address’s hyperlink, and you’ll be redirected to the contract page on Etherscan.
The Contract Page
On the Contract page, you can find information such as the total ETH balance or other respective cryptocurrencies that the contract holds and its respective value in USD. The ‘more info’ section shows a link that leads you to the initial mint transactions and wallet used for minting. Moving on, you’ll be able to view more information on the transactions, holders, analytics, and smart contract code.
The transactions tab lists all blockchain transactions interacting with the contract. It includes the TXN hash, method, wallet addresses interacting with the contract, value of the transaction, timestamps, and transaction (gas) fees. The TXN hash allows users to dive deeper into each specific transaction.
The method of mint, sale, transfer, and approval shows you the specific action for each transaction. As shown in the picture below, approvals are usually required when you enter a token-gated website.
Contract and Code
The contract page is a treasure mine if you're an aspiring developer. Before diving deeper into reading code, ensure that the contract is verified. It comes with the little tick encased in a green bubble beside the *Contract Source Code Verified*, as shown in the image below. This is to ensure that the contract’s owner matches that of the contract on the blockchain.
Most times, you would want to review the code to check if there’s anything wrong with the smart contract. Seeing is believing. Under the ‘Code’ tab, you can find the codes for the contract. Unless you understand the Solidity programming language, it will be foreign to you. Most times, there are simple comments that describe what the code does. If you’re interested in learning more about Solidity, this could be a kickstart.
Read Contract Section
The read contract tab usually shows information not seen on the main contract page. This information gives users the ability to look up more specific information, such as the dev funds or the founder’s wallet address, or even how many allow list spots were allocated. You could search for how many tokens a particular address owns just by searching their wallet address using a function. If you want to find the owner of a specific NFT, all you need is the token ID, and under the tab ‘ownerOF,’ you’ll be able to find them with a click of a button.
Write Contract Section
The write contract tab allows you to interact directly with any function written in the smart contract from Etherscan if the contract permits this. You can choose to mint, transfer your NFTs or even submit and withdraw bids from it. This is much more technical than simply minting your NFTs on a mint page and requires some basic knowledge of how to interact with a contract on Etherscan. Our word of advice is to stick to the regular, plain, old, and boring NFT marketplaces unless you have spent time learning how to interact with a contract on Etherscan. There are plenty of tutorials on this on Youtube.
With this, we conclude this week’s educational article. We’ll be back again next week with another interesting article for you to level up your web3 skills!