Edmond Chan

Is OmiseGo a good project and should you buy OmiseGo (OMG)?

chanman · Sep 23, 2017 · 1 Comment

I started to look at OmiseGo because it’s in the Exodus wallet as a supported cryptocurrency (meaning that I wouldn’t need to look at downloading yet another wallet to store it on), and also because it’s has a high market cap (currently 12th on coinmarketcap.com).

Current Price: USD 9.07 as at 23 September 2017

What is OmiseGo?

Omise is a company that facilitates payments across borders in South-East Asia.

Omise held an ICO to fund the development of OmiseGo, a project based on the Ethereum framework. The ICO issued tokens called OmiseGo or OMG.

What problem is it trying to solve?

Its target market is people who are left out by traditional banking services in South-East Asia. Think of the migrant worker in Myanmar or Thailand who needs to send money home. Omise wants to give these people the ability to send and receive money.

Omise thinks that 73% of all people in South-east Asia are ‘unbanked’, ie have no access to banking services.

It also targets the remainder by providing a better service than traditional existing banking services.

Does it solve the problem?

Unclear yet. The main product will be an e-wallet that interestingly serves both fiat and cryptocurrencies.

Potential issues

I’m guessing that you would need a smartphone to run the OmiseGo e-wallet.

Would the 73% of unbanked people above have a smartphone? Maybe OmiseGo could partner with a low-cost smartphone provider to give out to people.
For security, maybe you wouldn’t put large amounts of value on your e-wallet, as it wouldn’t be a hardware storage solution like Trezor or Ledger.

Should you invest in the OMG tokens?

The OMG tokens were used as a fundraising security.

According to this Techcrunch article:

Under proposed terms, 65 percent of all coins will be released during the sale. A further 20 percent will be retained by Omise for future costs and expenses with 10 percent left for the company’s team. The remaining five percent is set aside for “airdropping,” which essentially means that small amounts will be given to people who already own Ethereum’s Ether coin to stoke interest and widen engagement.

The company isn’t planning to make another token sale in the future, representatives told TechCrunch, in order to prevent dilution.

So we can infer that there will be a cap on OMG tokens, meaning that the risk of dilution is minimised. That’s not the same as it is with Bitcoin, which will by nature of its code, stop at 21 million Bitcoins.

With OMG, we would have to take the word of the company that they wouldn’t issue more tokens that would dilute and reduce the value of the existing OMG tokens.

This next Techcrunch article is reassuring as to the intentions and integrity of the Omise company:

Hasegawa said the firm could easily have raised more than $100 million from pre-sale interest, let alone with others following on when a public sale began, but it instead wanted to keep the figure low and be “responsible.” Likewise, Omise wanted to guard against a few wealthy backers taking all the spoils, as has appeared to happen with other sales.

In response to that demand, it canceled the planned public sale in favor of a more stable and managed sale. Omise forced all backers to register themselves with a handful of brokerage partners ahead of time in order to participate, while it also limited how much each participant could buy.

“We limited the OMG sale to KYC [people who can be identified] in order to prevent a very real possibility of one or two rich people buying almost all the tokens, as happened with [Brave’s] Basic Attention Token (BAT) sale,” Hasegawa explained in a statement.

“Unlike other sales, we didn’t want to raise our sale cap past $25 million because we don’t expect we need more money to accomplish our goal,” he added. “It is both irresponsible and counterproductive to take more than we think we need.”

Isn’t that great? They only asked for the amount they needed for the project.

What do you get for your coins?

You will get some fees for helping to validate transactions on the blockchain. The size of the fees is yet to be determined. Also, if the tokens are held outside of a node (like in an Exodus wallet), how will you be able to validate transactions?

Why would the price of OMG increase? The key driver of price increase will be its percerption as a store of value (like Bitcoin). This will depend on the supply being limited, which isn’t hard-fixed, unlike Bitcoin.

Will I buy any OMG?

Yes I will but not a lot yet. The price is down currently from its high of around USD 12:

OmiseGo price chart since inception: from coinmarketcap.com

So buying it now, and if it regained to USD 12, would return 33%. That’s a solid gain.

Long-term, I’m not sure about where the price could go with OMG tokens, but it’s fair to say that they could go to a few multiples of its current price of USD 9.

The company raised USD 25m in ETH from the sale of the ERC20 tokens and I’m guessing that most of this was used to fund the development of the project, which would pay for things like salaries and expenses in either ETH or USD or other local fiat currencies. The sale document for the tokens said that 10% of the tokens issued would be held for the team members. It’s hard to see that they would envisage a situation where the OMG tokens were reduced to zero value.

Overall thoughts on OmiseGo

I love the project for what it’s trying to do. It’s a noble aim to try and bring people into the financial world.
If it works, I can see it spread to the rest of the world.
I love the founders’ integrity in not having uncapped ICO, when there was clearly appetite from investors for a lot more than they raised
They have a lot of support from big players in the Ethereum space like Vitalik Buterin.
I can’t wait for the first release of the wallet

Is Augur a good project and should you buy Augur REP?

chanman · Sep 20, 2017 · 2 Comments

Augur is a prediction market platform based on blockchain technology (the crypto token is called Augur REP). It’s got a lot of positive coverage, it has a superstar adviser in Vitaly Buktarin and it’s now available to store in the Exodus wallet (along with its rival Gnosis).

Before we look at whether this is good project and a good speculative play, here is an excerpt from their homepage:

Here is their video introducing REP tokens:

Okay got all that? Let’s look at the project itself.

The main current world competitor to Augur and blockchain-based prediction markets are betting exchanges.

In the UK, the best known of these is Betfair.

Betfair is different to traditional non-exchange gambling platforms.

In traditional gambling platforms, a bookmaker (or the market creator) sets the odds on an event happening. Eg if the bookmaker says that that snow on Christmas Day is even money, that means he thinks it’s 50:50, or at least that the price he’s willing to offer you. If you bet that it will snow, and you are correct, then you win your stake back plus your profits. In this case, the bookmaker will pay you profits equal to the size of your stake.

The problem with this model is that the bookmaker’s odds make not be reflective of the true odds of the event happening. Maybe the real odds are 60:40, but you’re only being offered 50:50. This isn’t ideal.

Betting exchanges like Betfair are different in that there is no bookmaker. The market is made up of people like me who think that it will snow on Christmas and people on the other side of the trade/market who don’t think it will snow and are willing to offer me odds on the event.

This means that the price offered (odds of event happening) can move according to how sentiment changes. So if the weeks into Christmas are unusually warm, then the odds will move accordingly.

This brings us to problem number 1.

Problems with Augur

1. Prediction markets already exist outside of blockchain, and they’re good

For instance, Betfair has markets on politics. Look at the below screenshot:

That’s some serious money placed (GBP 1,011,592) on this market.

The odds at the moment suggest/predict (roughly):

that there’s a one in 17 chance of Trump exiting the Presidency in 2017 (5.88%)
a one in 4 chance in 2018 (25%)
a one in 6 chance in 2019 (16.6%)
a one in 0.88 chance in 2020 (63%)

That’s pretty good as a prediction market isn’t it? That’s real world market participants who’ve arrived at these odds at that’s what they predict.

Does Augur improve on that from a prediction market standpoint?

This is from their beta app:

I know this is in beta, but these aren’t as granular in terms of range of outcomes that Betfair offered. Furthermore, the prediction isn’t anywhere as specific as Betfair’s range above. Augur’s says 50% chance of Bitcoin hitting USD 5,000 by New Year’s 2018. Not very specific.

2. You have to wait a month before getting your winnings

Remember from the video above. For the market in Augur to settle, you have to wait a month for the holders of REP (Augur token) to vote on what the correct outcome of the event was. So you have to wait for REP holders to vote into the blockchain that it snowed on Christmas Day. On Betfair, that would pay out the next day. A month!!

3. Holders of REP have to report on events within the timeframe or lose ‘reputation’.

What a burden this is on the holders of REP. Will anyone want these?

Advantages to Augur

Create your own markets

This something that I can’t get on Betfair at the moment. I can’t invent a new market like ‘will Theresa May wear red shoes tomorrow?’. I could do this on Augur, but it’s another question as to whether this would be an attractive market for other people to bet on.

Should you buy the Augur REP tokens?

There are a limited supply of Augur REP tokens which is good. A finite supply means that the price should rise in the future if demand rises.
There is good positive sentiment about it.
It is on Exodus as a supported altcoin.
It has Vitaly on the board of advisors.

So it’s a tentative yes from me. Even though I’m not sure about the project, I think it’s still worth a gamble on the tokens. But this means that I will buy a smaller amount of Augur REP tokens, say 5% of my total portfolio.

I did this yesterday using Shapeshift in my Exodus wallet. I now have some Augur REP.

What do you think? Do you hold any? Let me know in the comments below!

Warning against using the full Ethereum node wallet (Lost my ETH!)

chanman · Sep 10, 2017 · 8 Comments

You’ll know from previous posts that I’ve had trouble using the official Ethereum node wallet. This is the full node downloaded from the official Ethereum project website.

The problem is that you can’t see transactions made to or from your wallet until your wallet has synced with the entire blockchain.

This is easier said than done.

Even using decent broadband, I’m always 100,000 blocks behind. The rate that my wallet downloads at is maybe one block per second.

I’ve been trying for weeks to catchup and without success.

It’s time to cut my losses and write this off.

Luckily, I didn’t have that many ETH in there. I’ve only bought two purchases of 0.5 ETH for a total of 1 ETH.

The first time I noticed that I would have a problem was when I bought the second lot of 0.5 ETH. My wallet wouldn’t show receipt of the 0.5 ETH. The node needed to be up to date before showing the transaction.

I tried to send 0.1 to my Exodus wallet and managed to do so. I tried to transfer the remaining 0.4 ETH that I could see in my Ethereum wallet but this didn’t work.

For now, I’m going to use my Exodus wallet for ETH up to an amount of about GBP 500 and use my Trezor wallet for larger amounts.

The only problem I see for the Trezor wallet is that for ETH, it requires an integration with Myetherwallet.com. This extra step isn’t as user-friendly as I would have hoped for with the Trezor wallet. Why can’t I just send my ETH directly to the Trezor, just as I do with Bitcoin?

This makes me want to try out the Ledger Nano S, which from some research is able to receive ETH directly to the device.

Their website currently says shipping dates start on 30th September! They clearly have more demand than supply.

Takeaway

Anyway. the takeaway from this post is to test any wallet first with very small amounts that you could handle losing should the wallet be unusable. Transfer small amounts and practise sending and receiving. If this doesn’t work or the wallet takes years to sync, then at least this way, you won’t have lost large amounts.

How I bought my first Litecoins, using Exodus wallet, Shapeshift and Changelly

chanman · Sep 4, 2017 · Leave a Comment

Today I bought my very first Litecoins.

I knew it was a coin buying day because on my way home from work, a friend of mine whatsapped to laugh that I should close up my blog. I knew he was referring to the day’s softness in the cryptomarket.

China had announced that it was cracking down on ICOs and this had caused a sea of red amongst all coins. Look at this from coinmarketcap.com today (4th September):

I wasn’t too fussed by my friend’s glee. Instead, I welcomed this.

I don’t hold leverage (I’ve learned the hard way that this is dangerous).

And I’m ‘buy and hold’. 10% down, 20% down and I’m not too fussed.

This is just noise that is actually a buying opportunity.

Why buy Litecoin?

It fulfils the criteria I laid out in my previous post on what I look out for in buying cryptocurrencies.

In particular and in addition:

Litecoin is a top 5 coin that I was always going to buy for my portfolio.

It’s seen some serious upward movement in the last six months, indicating that there’s some strong weight of money coming into the coin. Look at the below:

Litecoin chart for last 12 months (source coinmarketcap.com)

Today was an opportunity to buy it on a pullback. Look at the chart above.

The price of LTC hit USD 90 on 2nd September and dipped to USD 62 today on the 4th September.

This would be termed blood on the floor in traditional markets but in crypto, this sort of volatility is to be expected.

So I’m looking at a quality coin on an upward trajectory, which had a pullback today.

It was time to buy in.

Buying Litecoin (LTC) through Exodus wallet and Shapeshift

Exodus wallet has Shapeshift built in. So I compared the exchange rate with Changelly and the Bitcoin to Litecoin rate were pretty similar.

On Changelly it was: 1 BTC = 61.99956402 LTC

First, I opened up my Exodus wallet and went to the ‘exchange’ function. You get a screen like:

Then you switch the desired number of Bitcoins that you want to exchange (can’t be more than you have in your wallet) and if you’re happy with the rate, you click exchange.

This will automatically send the Litecoins that you’ve received in exchange for Bitcoin to your Exodus Litecoin wallet. Easy.

The whole process took less than an hour to complete. Mostly just waiting for the coins to exchange.

Buying Litecoin (LTC) through Changelly

I didn’t have enough Bitcoins in my Exodus to get all the Litecoins I wanted, so I went to Changelly to get some more.

As with the Monero (XMR) trades I did, I moved some Bitcoins to Changelly and swapped these, this time for Litecoins.

Again, super easy now.

exchanging Bitcoin to Litecoin — Slightly different exchange rate to that quoted above earlier in this post

And then I transferred these to my wallet.

Let me know if you’ve invested in Litecoin (LTC) and whether you took advantage of the pullback today in the comments below!

Setting up my new Trezor hardware Bitcoin wallet

chanman · Sep 3, 2017 · 1 Comment

I’d heard from quite a few sources that hardware wallets are the way forward in terms of proper security for your coins.

These are a form of cold storage, as opposed to hot storage. Hot storage is anything where your private keys are connected to the internet or your computer.

Cold storage is what you want for any large holdings of Bitcoin and other supported coins. Large is whatever amount you would feel sick losing. In my previous post, we saw how a guy lost USD 12,000 of Bitcoin (BTC) and Bitcoin Cash (BCH) on his Exodus wallet. This is a lovely looking wallet but it is a hot wallet. You shouldn’t really have that much on there, or any other hot wallet for that matter.

So in the world of hardware wallets, there are three main options:

Keepkey looks great but less durable in case of dropping it. Currently USD 99.

Ledger Nano S is the cheapest at EUR 69.

Trezor is around EUR 89.

So they’re all roughly the same price and I will try them all out at some point.

For now, I went with a Trezor. I bought one off Amazon.

Unboxing the Trezor wallet

This is what it looks:

It’s important to get some information on how to set it up properly. I highly recommend the Trezor set up videos from CoinSutra – seriously useful! I’ve listed the 3 videos below:

Setting it up does take some time. You want to make sure that you get it right, so you don’t want to rush this step.

The most important thing to write down your recovery seed of 24 words.

Write these 24 words down very carefully. DO NOT RUSH!

Once you’ve set up your Trezor wallet, I highly recommend that you don’t transfer Bitcoins into it yet.

Make sure that you can recover your wallet first.

To start this process, watch the video below from Coinsutra about how to wipe your Trezor wallet first.

Now that you’ve wiped your Trezor wallet, watch the next video by Coinsutra to go through the recovery process. You’ve basically now got a new wallet. You’re trying to restore the wallet you just created on a now wiped Trezor wallet.

IMPORTANT: DO NOT SKIP THIS STEP

Practising recovery is ESSENTIAL. You don’t want to have Bitcoins on your wallet and not be able to know that you can recover this wallet in case of loss.

You want to know that you wrote down the recovery seed properly.

You want to have the peace of mind that it all works before committing Bitcoins and other coins to it.

It’s so easy to skip because you just want to get on with the exciting stuff but please do not rush and skip this.

As a cautionary note, I failed to recover my wallet twice in four attempts. It’s easy to rush and get things wrong.

But I got there in the end. And now I have a Trezor hardware wallet!

I do feel it’s a bit more secure than having a wallet on my desktop. I suppose only because I trust that this is a more secure storage system, because everyone in the community says so. There’s an element of trust here but sometimes you do have to do your own research and make a judgement based on risk and reward.

Finally, like I said in my last post, do not put all your eggs in one basket. Only put what you’d be comfortable losing onto your hardware wallet.

As your holdings grow, you will need additional hardware wallets for peace of mind.

Improvements I would make to the Trezor experience

Longer cable

I would make the USB cable that comes with it longer. It’s only about 5 inches and isn’t that useful as it’s got to be connected to your computer the whole time. Whilst it’s connected, you have to hold it in one hand to see what’s going on on the screen. If it was 12 inches, that would be much more user-friendly.

More recovery seed cards

These are really useful actually. They have numbers and lines and make your recording of your recovery seeds nice and neat and easy to refer to. Better than a piece of paper. You get two in the pack as default. I wanted to make two copies of the seed but I messed up copying the second. Doh. Three or four as default would be perfect.

Let me know your experiences with hardware wallets like Trezor are in the comments below! Any questions too!