The original post: /r/cryptocurrency by /u/holdthefridge on 2024-11-24 17:26:41.
Summary and TLDR for the seasoned experts so you can either add/correct/ignore post:
- The "ideology" (controversial - conspiracy)
- Historical deep dive into (defi) dApps uses and how to use them
- Crypto cycles
- Insights from being in the market for a few cycles
- Current Macroeconomics
- Advise for Do's and Dont's (it's controversial as everyone has different opinions)
Important Note
I am not a CFA, nor am I an accredited investor. I am a dApp builder who had a little bit of success in DeFi. I am just giving my insights and this does not reflect any certified financial advisor's advise. That being said, CFA cannot give you money making advise either. Always read between the lines and always do your own research**.**
Start
The year is 2024, you are seeing bitcoin and crypto coming into your timeline more and more. USA just elected a president who is pro crypto. Elon Musk is jumping up and down on Trump rally and he's also pro crypto. You are wondering "is this just internet magic money? Is this a ponzi scheme? Why the heck would I use a currency , fiat already exists. There are no additional use cases"
The Ideology
You can ignore this part if you are already tired of reading similar summary over and over again. Remember this is MY opinion and does not reflect everyone's opinion. This part also has a lot of compiled conspiracy theory and not my own.
1912, Titanic just sank and took down old banking system. The Rothschild bankers and few others who happened to be off the boat, has now gripped the world financial system. Federal Reserve which can indefinitely print money supply in exchange for gold was established in 1913. WW1 and WW2 followed shortly which introduced massive amounts of temporary tax (we still are in that temporary taxation system). Till 1970, we had this certificate (now fiat money) , that was printed and backed by Gold, oil and few other global commodities. The more commodity a country had, the more value it's printed certificate (dollar, rupee etc.) had. Gold and oil was the "native liquidity currency". Remember this: "native liquidity currency". USA being the new super leader, decided to hoard as much gold and oil possible by dealing with as many countries as possible. US dollar or any other fiat currency had this pair ($ Country's money / Gold)
1971, USA has a significant amount of gold, and oil, and a grip on the world. USSR (now Russia) was and still is it's arch rival. By now, USA has already made a few great decision for itself by establishing itself as a world native liquidity currency. USA decided to depeg the gold from it's native liquidity.
Which means before it was ($ USD / Gold ) but now it's ($ USD / ____). Where as the rest of the world was ($ Rupee / USD), ($Yen / USD). Trades were and still happens in USD, even now. If you want to send a shipment of paint from China to Bangladesh, it's done in USD. Not yen, not taka.
Now the question is, if my country's currency has a US dollar reserve and USD is being treated as one of the major liquidity currency, what about USD? What is USD's own native liquidity pair? :)
I will leave the history of 1971-2000s fill out your imagination.
From the 1900 - 2000, the old banking system has significantly shifted from being Gold backed to US dollar backed. USA is also printing as much as it wants out of thin air with nothing but war behind it's liquidity backing. Any country that is trying to get back to gold or oil standard has been uprooted. So paper money is literally being made from trees.
Fiat currency supply keeps going up, value keeps going down. If USA prints, your country's currency is gaining strength but that all depends on whether they are NOT printing themselves. This macro economics majorly affects us and crypto every single day. The key for your country is to stop printing while USA prints.
Your parents have immediately felt the affects of this depegging over 1970s - 2000s. Everything inflated fast. Their salary was not that far off of inflated value of homes, cars, food. Taxes were not that bad, it was supposed to be temporary but it was acceptable.
You were born in the 80s - 2000s, now you are either in your 20s or your 40s. You are in this subreddit trying to figure out how do you get rich via crypto and how to get out of this rut. Where's this get rich quick scheme?
2009 - Satoshi (a person or group of people or psyop by the banking system), invented BTC Bitcoin. Digital currency that can't be printed. The idea that one day it will become a native liquidity currency like gold or oil. Unhackable because you'd have to hack all the mining computers all at once. Mining means you use your computer to act as part of the ledger system that keeps transactions all in sync and calculated while solving a formula to SLOWLY mine 21 million bitcoin (total). All of a sudden you can send money overseas without any issues, albeit transaction fee is expensive af. However, this is the only thing banks and feds cannot touch or tax(However, we all know decentralized - they cannot, centralized - they can, we will dive in to this later). You can hold on to it and battle this unlimited printing of fiat. You know rest of the usual story that people say so we won't be diving more into this.
Deep dive into Defi
Decentralized is a word that gets thrown around every where. Everyone claims to be decentralized in crypto and btc subforums. However, 90% of the people are just buying and holding in CEX (centralized exchanges like binance). They are then selling it for USDT for profit or loss, and sending it back to their banks for fiat. They were never decentralized. They don't use bitcoin for anything. They don't use ethereum for anything. They don't use solana for anything.
So what can you use these coins for? Is it just for silk road like the early bitcoin days? I pay someone in btc and someone gives me the limited edition pokemon card on ebay? Sure, but no.
DeFi truly started during introduction of Ethereum by an alpha centauri alien called Vitalik. It didn't have a max supply like bitcoin, it was exactly like fiat in the sense that you can print it. However, printing was not controlled by the ETH foundation, it was printed by miners. You had to mine it. Why would we buy eth if it's still being printed?
ETH had 3 tricks up it's sleeve.
- dApps (decentralized apps - it's what apps are to smart phones - whaaaat?)
- Layer 2 EVMs (make your own network - wow!)
- tokens (its like a coin, you can attach a name to)
If Bitcoin is gold , Ethereum is silver. Gold is a store of value, where silver is a tool
2018 - The birth of Uniswap:
dApp builders like myself started scrambling and figuring out what to make. What can we all make in this brand new finance world?
One of the first key things that came out was Uniswap. Uniswap is a decentralized exchange. Anyone can make a token and upload it with eth as it's native liquidity pair (token/ETH). In return Uniswap gave that user a liquidity pool token which is like a key that you can use to unlock the pair and pull out the money if they wanted.
No more applying to CEX like binance for listing your own project, no more accredited investor status required for buying and selling things, no tax (controversial), and definitely cannot be frozen by banks.
You can buy and sell any token that you want, you can make your own token (if you knew how to code in ethereum smart contract language called solidity), and you can make your token tradeable via uniswap. All you had to do was go on subforums and talk about your own tokens. What you needed was a wallet like metamask with actual ETH (not in CEX), you needed to press wallet connect on uniswap, and spend that ETH to buy tokens, or sell tokens to get some ETH. There were no middle men. No one can hack uniswap.
Now what happened really? Our core degenerate mindset got us to start building shitcoins by now. 99% of the tokens on uniswap are scams, the users just unlocked and withdrew the liquidity (ETH) with the liquidity pool token. What if the token smart contract was a scam by itself? I will put a list of things for you to see before you buy any shitcoins directly on uniswap.
2020 - The birth of DxSale, and other launchpads
Ah, this is something that takes you to some of the golden age of shitcoins. DxSale and Unicrypt made it easy for anyone to make a token. You didn't need to know how to write contracts anymore, those defi apps made it for you and you own it. Your wallet owns the token as the creator. You can make a token within seconds without knowing how to code, and raise funds in those same apps. Once the funds are raised, it automatically uploaded the token/ETH as a liquidity pair on Uniswap. Uniswap returned the liquidity pool token to the Launchpad smart contracts which automatically locked the liquidity pool (LP) token (key). This solved the number one issue with Uniswap launches, which is scam by unlocking LP and disappearing in to thin air.
Great, now all you had to do was marketing and you have a token on ethereum, you could either try to launch it hard and make your coin go 100x or if you were a scam - you would've just found another way like dump the team tokens or perhaps add "fee system"
Out came the rebase tokens, fee tokens, burn tokens etc. People started making cu...
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