CrazyLoaf's CrazySteak(TM) High PoS Investment Journal

[CrazyLoaf]

Introduction

Ahoy! So it looks like the high PoS markets are pretty quiet atm, so in the interest of getting discussion going again, I'll just start talking out into the dark until someone hears me and tells me to quiet down

Crypto Background

I originally got into crypto in the last BTC rush. My original strategy was "buy everything," and I had positions in well over 1000 coins and crypto assets at that time. While I still think a more abbreviated version of that strategy, say equal amounts of top 50 coins by market cap could work, I've moved to high PoS coins and several active positions.

I only recently gobbled down bigish chunks of high PoS coins like HBN. While BTC has gone down in price since then, the Satoshi price level of HBN is kinda where it was ago almost a year ago, so it seemed like as good a time as any to just jump right in.

Part of the reason for my willingness to just randomly purchase willy-nilly is that I've wanted to do a high PoS portfolio for months. As a matter of fact, I remember seeing the old HBN website and thread with the vagrant grilling a sausage or something as the coin logo and being really interested in the almost weekly 2% interest rate.

[CrazyLoaf]

A Few Notes

Okay, the thread is moderated from the start on the off chance any spamming, fudding, and/or trolling occurs. Assume that I own all coins mentioned and even coins not mentioned. I'm not doing this as a public service or anything, so if you end up losing your 0.1, 1, or even 10 BTC to something I mention, it's not my fault. I'm pretty lazy and may end up dropping this at any time if it starts to resemble more "work" than "fun."

Special Thanks

Full credit to people like TokyoGhetto and StakeHunter for turning me on to this investment style. Also thanks to high PoS coin creators and developers such as Tranz, Presstab, Thundertoe, Unick, Palmdetroit, and others for their continuing contributions to the high PoS investment arena.

Also, if anyone wants to piggyback and start and/or continue a high PoS investment journal in this thread, you are welcome to do so. You'll probably update more frequently and provide better analysis than me anyway

[CrazyLoaf]

General Thoughts on Crypto

At this stage of the game, crypto is a minefield. While it would have been nice to put a few thousand in BTC when it was sub $1, we operate in the here and now and that doesn't seem likely to happen again, so rather than whining about it, we should try to see how to best operate moving forward.

For all the features being released on the market, at their core, most coins operate towards the idea of being a store of value/unit of exchange. But let's be reasonable here: are we going to use Milkcoin for milk and Breadcoin for bread? Expanding further out, why do I even need 10-15 different types of cryptos in my wallet to use as transaction currencies?

Now, the argument can be made that there are a lot of different credit card and bank transfer companies. However, I would make the point that while there is a lot of variety in operators, there is still only one currency being transmitted, local fiat. I think crypto will operate in the same way in the long run, with only at most a handful of coins being in common use. In the interim, however, who knows what will happen? I mean, we've got a long way to go to reach the levels of the Dotcom bubble that saw TRILLIONS of dollars in paper wealth vanishing. Much excitement

[CrazyLoaf]

General Thoughts on High PoS

High PoS coins to me sidestep the issue of trying to be compete in the very crowded "next Bitcoin" market by being something completely different: crypto debentures or bonds.

Let's look at a few aspects of high PoS coins and think about them in relation to bonds.

Coins pay a PoS rate that is fixed in the short term while their face value can fluctuate based on market sentiment. Think receiving a 2% stake while the market value of the coin reduces by 8% at the same time.

Coins can have their PoS change based on the original parameters of the code as a reaction to current and future market sentiment. For example, fewer people stake, making the stake difficulty go down and the PoS rate higher to entice people to stake, sort of how bonds entice investors with higher rates than competing offerings.  

Sentiment and ability to "pay" via PoS can be seen in network strength. I could go on with details, but I can't think of any more clever ones at the moment and I think the point is clear.

High PoS's Place in Crypto

While I don't think for a second any high PoS coin will supplant Bitcoin or whatever becomes a member of the dominant crypto CURRENCY market, I do believe there is a place for high PoS within the crypto ASSET market.

Taking the debenture analogy a little further, high PoS coins act as multi-form assets. You own a share of the total coins outstanding, like a stock, but at the same time, you are guaranteed a payout of assets, like a bond. It's like super preferred stock, or something altogether completely different.

Anyway, let's just provide a use case for a high PoS coin. Say BTC or some dominant crypto's price has stabilized fairly well. You have spending that you want to do in the future, but you want a return now due to the time value of money. Where do you park your money? Wouldn't an older, stable high PoS coin be a viable option?

[CrazyLoaf]

TRANZ-TAB-TEK TRIFECTA

Anyway, this is getting pretty long at this point, so rather than just talking to myself further, I'll try to start the ball rolling with a discussion of some core high PoS assets that I call the "Tranz-Tab-Tek Trifecta," consisting of Hyperstake (HYP), Tekcoin (TEK), Bottlecaps (CAP), and HoboNickels (HBN). A brief discussion of each follows.

HYPERSTAKE (HYP) - 750% - PURE POS

HYP is one of the newer high PoS coins, but it's notable for a few reasons. The first is that it has the highest stated PoS rate of any coin at 750%, even beating out stalwart Tekcoin (TEK)'s 500%. However, while I worried about the effects of compounding on the coin at the start, it seems that a lot of thought has gone into taking advantage of the coin's block times and staking parameters to make it where the long-run compounding of the coin will be close to the stated APR, and not some crazier level of inflation.

Developer Presstab has a financial background and I've learned a lot talking with him on the IRC about how things like max block rewards and daily number of blocks can be used to limit inflation. Co-founder David Latapie is also heavily involved in Monero (XMR), so there could be some potential interplay with that as well.

An interesting thing I see in HYP is that, due to it being a forked launch off of Truckcoin (TRK), a lot of the current HYP coins may be "lost" and not currently staking. I'm curious how the tradeable number of HYP's compare to the total 17M+ shown on the blockexplorer.

TEKCOIN (TEK) - 500% - POS/POW

Before HYP, TEK was one of my favorite high PoS coins. The only issue was that it was, and still sort of is, difficult to get a large position without moving the market. Recently, there were some issues with hard forks and staking, causing a high volume of low priced coins to appear on Comkort.

TEK is supposed to pay 40% every 30 days, making it one of the longest waiting periods of any high PoS coin. However, competing for blocks has caused that to drop to around 20%, which is still generous, but not as high.

I think even if the stake is permanently reduced, TEK could have value since it is one of the older PoS coins (1+ year old) and the current number of coins outstanding isn't that high (2.2M vs HYP's 17.6M). I also am more partial to the 30 day waiting period since it rewards holders vs traders.

BOTTLECAP (CAP) - 200% - POW/POS

CAP is an older coin that was recently taken over by HBN developer Tranz. Both it and HBN are well over 1 year old, making them some of the oldest actively developed altcoins. Tranz is also considered one of the most prolific developers in the high PoS space, pioneering such developments as multiwallets and oddities such as Raspberry Pi minting.

Once Tranz announced he was taking over CAP, the price level rose rather decently and, more surprisingly, there was a HUGE buy wall that was actually guzzling up CAPs. I recall it was 30 BTC - 50 BTC, but I have no idea how much it actually bought. Regardless, if they haven't dumped, there is someone who still owns a TON of CAPs. Maybe it's Tranz

I'm curious as to what interplay there will be between HBN and CAP, if there is one at all. Tranz has stated that he will be pushing developments to HBN first, and CAP will receive updates second.

HOBONICKEL (HBN) - 100% - POW/POS

HBN is the stalwart in this group and was the focus of TokyoGhetto's investment journal. From the start of that journal until now, HBN has had a roughly x10 increase in value from 5k to 50k sat and is now back to around where it started.

At this point I'm a little talked out since I've sort of stolen HBN's thunder and mentioned some of it's features/concepts in other coins.

Also, I was having 3 paragraphs for each coin, so my OCD is requiring me to do the same for this one even though there really isn't much value in this last block o' text

[CrazyLoaf]

Alright, so HYP, CAP, and HBN have the nice cryptocoinexplorer.com block explorers and rich lists. I've gone ahead and confirmed my addresses on these coins, so if anyone is nosy in the peanut gallery, they want keep track of my every move. In regards to TEK, the block explorer seems to be working, but the rich list isn't, so you'll just have to take my word on the address.

HYP - X
TEK - X
CAP - X
HBN - X

[presstab]

This should be fun  

PS - TEK is not 480%, it is 500%. This 480% is caused by rounding errors from marketing slogans. It went from "TEK is 40% per month" (really 41.09%) to "TEK is 40% * 12 = 480% per year!!". 

For the sake of providing everyone with correct info (I am hoping this journal gets traffic), I would recommend to change your post to say 500% annual, and 41%/month.

[billotronic]

Great write-up bud! A very good read

[Zombier0]

hBN has one advantage - many merchants

[presstab]

hBN has one advantage - many merchants

Come on now.... HBN's main advantage is Tranz, one of the few crazy smart devs that hasn't sold out to a P&D coin.

[CrazyLoaf]

hBN has one advantage - many merchants

Come on now.... HBN's main advantage is Tranz, one of the few crazy smart devs that hasn't sold out to a P&D coin.

Yeah, as stated in TG's investment journal, Tranz has a 2 YEAR plan for HBN. Isn't that like 50 years in crypto (I don't know what is the goofy conversion of the week for that)?

In regards to merchants, that's one thing these high PoS have on the vast majority of other altcoins. You surely can't speculate on something that's only claim to fame is that it can be used to buy things in the long-run. Why use Catcoin or Mooncoin or Leafcoin or whatever to buy something when BTC, or *gasp* credit cards will do just as well?

It doesn't matter if high PoS coins are picked up by merchants. They have at least some residual level of value due to the nature and power of their stake. I mean, taking things to a goofy level, if there was something that you could put 1 cookie in and get 1.4 cookies out (kinda like TEK) in 30 days, does that have a value on some level? Does it have more value if cookie can be replaced with simply any altcoin?

I almost feel the Wall Street types would have an easier time speculating on high PoS, somewhat goofy coin names notwithstanding. I'm sure they've seen things like the Auroracoin dump and want nothing to do with that, and that initial pump had something like merchant adoption as at least one component of the mania.

[glendall]

Thanks for writing this!

I do think you are missing an important central piece of info for this journal though: you should talk some of your numbers, namely how many coins you bought and then your ongoing stake returns.

[CrazyLoaf]

Thanks for writing this!

I do think you are missing an important central piece of info for this journal though: you should talk some of your numbers, namely how many coins you bought and then your ongoing stake returns.

That's coming

[CrazyLoaf]

HYP - pTHifs6KJjm2pQ1JW6GDULVFyXUwqfw1ih
TEK - BXubiTgL3e5Xr8iEpji1XZZCV7Gjr7UuxW
CAP - EjDX8etJ7zmf4fBKt1gfFKdvK7G6MsviYY
HBN - ErH8TwfqfRieqXJNVZPtCEm6spczXYrjgm

Okay, so I've updated my addresses in an earlier post so I guess I'll have stalkers now who wonder why I do this and that at every step of the game.

Anyway, I thought of how to track this and, for the time being, I'll be reporting BTC in, and average cost. The nice thing about high PoS is that the coins can mint for you to (1) sell for income or (2) leave to compound and reduce average cost further.

The format is coin name : BTC in : coins owned : average cost

HYP : 1.6 : 347,329 : 0.00000461
TEK : 7.25 : 42,975 : 0.00016870
CAP : 4 : 139,102 : 0.00002876
HBN : 7.6 : 132,090 : 0.00005754

So as you can see here, I was pretty lucky as to when I started building my high PoS positions. While I did have some TEK and CAP before, I really doubled down once I saw some really cheap HYP and HBN, said wth, and went ahead and started the high PoS portfolio that I always dreamed of.

The only position that I'm really at a paper loss in atm is CAP. Like I said before, I was buying back when the BTC whale was eating up orders. At the time the market caps were roughly:

TEK: $350k
CAP: $200k
HBN: $450k

In most cases, I would hope for these and other high PoS coins to trend back up going forward. None of these stated market caps were at their peak positions, and the beauty of any of these is that the orders books are typically thin enough that, in the short term at least, a little volume eating into the sell side can rapidly move the price if the buy side builds support on the way up.

I know TEK has flirted with $700k in market cap. As far as I can tell, there has never been a coordinated pump on it. HBN had 2 pumps on it, one of which may have sent it close to $1M in market cap, but even before that it seemed to trend to around $500k. CAP is too recent to really discuss aside from the fact there was that whale wall.

I don't really buy into technical analysis all that much. Shoulders, flags, polka dots, I don't know. I just like how you can see panic in all the other coin threads, these high PoS coins are typically pretty quiet. I could go bust, but then again, I still think they have some sort of residual value as long as there is something like BTC.

[forbesmining]

Thanks for articulating the matter of staking coins. I'm fairly new to crypto, and after the dismal month of July scams, began to look for high-staking senior coins. It just makes sense, and like you said, are like owning stocks and bonds in one.

I will continue to read the posts here, some of most intelligent sharing on the forums 

[rgm108]

Thanks for articulating the matter of staking coins. I'm fairly new to crypto, and after the dismal month of July scams, began to look for high-staking senior coins. It just makes sense, and like you said, are like owning stocks and bonds in one.

I will continue to read the posts here, some of most intelligent sharing on the forums  

CrazyLoaf relayed his thanks to others in the POS arena.
I have to say that I was also lucky catching TG's investment journal which led me to HBN specifically.
Have a read through it from the start. It is well worth the time. Pity that the thread ended badly...

https://bitcointalk.org/index.php?topic=406112.0

PS: Thank Crazy for this thread. Very well written and well worth anyone's time to read.

[Jamesco]

Very interesting, keep the posts coming, interesting read so far.

[CrazyLoaf]

PS - TEK is not 480%, it is 500%. This 480% is caused by rounding errors from marketing slogans. It went from "TEK is 40% per month" (really 41.09%) to "TEK is 40% * 12 = 480% per year!!".  

For the sake of providing everyone with correct info (I am hoping this journal gets traffic), I would recommend to change your post to say 500% annual, and 41%/month.

Done. Yeah any sort of recommendations keep them coming. Right now, I'll just be focusing on these 4 coins, but may discuss some other ones as well. Aside from alliteration, these 4 (excluding HYP, but it's dev has been active in crypto for almost as long) are some of the oldest coins out there and represent a good range of quoted max PoS rates.

We have 100% - 750% represented. I've noticed that the 100% and below range is getting a little crowded, and there are probably another 10-20+ coins or so that provide stakes higher than the 25% needed to see the effects of compounding. I'm a little more skeptical of these, especially since some seem to have added high PoS after the fact.

Speaking of TEK, I noticed you posted in their thread that difficulty has fallen enough to where you can stake at 40% again. I wonder if the coin will be able to do this consistently going forward.

[presstab]

Speaking of TEK, I noticed you posted in their thread that difficulty has fallen enough to where you can stake at 40% again. I wonder if the coin will be able to do this consistently going forward.

My expectations is that the NVCS will kick in in waves, yielding some stakes less than 500% and some at 500% depending on where in the cycle you stake.

[CrazyLoaf]

Thanks for articulating the matter of staking coins. I'm fairly new to crypto, and after the dismal month of July scams, began to look for high-staking senior coins. It just makes sense, and like you said, are like owning stocks and bonds in one.

I will continue to read the posts here, some of most intelligent sharing on the forums 

CrazyLoaf relayed his thanks to others in the POS arena.
I have to say that I was also lucky catching TG's investment journal which led me to HBN specifically.
Have a read through it from the start. It is well worth the time. Pity that the thread ended badly...

https://bitcointalk.org/index.php?topic=406112.0

PS: Thank Crazy for this thread. Very well written and well worth anyone's time to read.

Yeah, my interest in high PoS was rekindled after looking at all the falling coins as of late. The crypto markets are maturing, and you can't just slap an animal on a coin and call it a day. A lot of high-priced coins have turned out to be falling knives, and barring speculation, there isn't much reason to hold onto them. That's why you see such painful swings.

Heck, I'm looking at the top volume coins on Bittrex today and Gnosis has 126 BTC volume and is showing a paper loss of MINUS 96.8% today! I don't know how accurate those numbers are, but I know we have definitely seen a rise in coins whose price dies a day or so after listing. Anyone remember Syscoin?

Actually, since you mentioned HBN, let's use that and TEK as an example of what high PoS can do for a falling portfolio. There were issues with the HBN wallet on Cryptsy, so who knows how likely this scenario is, but let's say you bought all your HBN at 40k sat May 16th. That's well above any historical high except for the very peak. Today, HBN, is roughly 6k sat. So right there, that is an 85% loss on paper, more if you look at the fact that BTC has fallen in value during that time.

We have had 4 months since that time. That's 12 staking periods. Compounded, that means every 1 HBN is now worth 1.27 HBN. So say we bought 1,000 HBN, we would now have 1,270 HBN. That makes our paper loss 58%, still a bad loss, but we still own the coin and can stake to positive returns. The compounded PoS on HBN can make up for a 50% loss in 1 year if the price merely steady after the 50% loss.

TEK is more interesting. Let's keep in mind the 40% PoS. The 85% loss can turn into profit in 6 months.