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Are you truly diversifying with crypto?
I've found new investment idea! Project MetaPax
Using Modern Portfolio Theory for Crypto - How to create an Optimal risky portfolio
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In bitcoin "time" doesn't really exist in the same sense as you might think as the bitcoin network doesn't rely on an outside oracle to determine the time and doesn't keep a time consensus with "the real world" instead it is it's own clock, a distributed timestamp server where everyone HAS to agree on the order blocks and transactions occurred. >In this paper, we propose a solution to the double-spending problem using a peer-to-peer distributed timestamp server to generate computational proof of the chronological order of transactions - Satoshi Nakamoto (2009) Miners are required to add their own timestamps to the blocks they're building but it leaves the door open for potential manipulation - If miners say the blocks took longer on average than it did then the difficulty would adjust downwards and their profitability would go up. There are two rules in place with regards to how to "timestamp" blocks to prevent this being an issue: >Median Past Time (MPT) Rule – The timestamp must be further forwards than the median of the last eleven blocks. The median of eleven blocks implies six blocks could be re-organised and time would still not move backwards, which one can argue is reasonably consistent with the example, provided in Meni Rosenfeld’s 2012 paper, that six confirmations are necessary to decrease the probability of success below 0.1%, for an attacker with 10% of the network hashrate. >Future Block Time Rule – The timestamp cannot be more than 2 hours in the future based on the MAX_FUTURE_BLOCK_TIME constant, relative to the median time from the node’s peers. The maximum allowed gap between the time provided by the nodes and the local system clock is 90 minutes, another safeguard. It should be noted that unlike the MPT rule above, this is not a full consensus rule. Blocks with a timestamp too far in the future are not invalid, they can become valid as time moves forwards. https://blog.bitmex.com/bitcoins-block-timestamp-protection-rules/ So long as the timestamps abide by these rules the network will keep "time" and the individual timestamps don't really matter.
Suggest you study up on MPT, investment allocation, alternative investments, and risk management/reduction through diversification.
tldr; Modern Portfolio Theory (MPT) is a method for selecting investments in a way that maximizes returns with an acceptably low level of risk that is in line with an investor’s risk tolerance. Harry Markowitz first pioneered the concept in his paper “Portfolio Selection,” and was even awarded a Nobel Prize for his work on the theory. MPT is primarily used by investors seeking the following outcomes: *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.*
This is awesome man! As I understand, I can use the Collab notebook for myself but I just need to add or change tickers in the code and run the whole thing? Alternatively, do you know of a tool with a nice front-end for MPT and crypto?
Excellent post! Thanks for sharing, I wasn't familiar with the MPT. I will definitely have a look at your medium.
tldr; Four non-fungible tokens (NFTs) artworks inspired by Freddie Mercury will be available for sale starting from today (September 20th) on SuperRare. The collectibles would mark the 75th birthday of the singer as the raised funds would support an AIDS charity. Proceeds from the initiative would go to the Mercury Phoenix Trust (MPT). *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.*
MPT is lame. Put all eggs 🥚 in one basket and watch it! - some Carnegie guy
MPT inherently considers correlations.
I think markovitz (that's the laureate right?) would have argued for bitcoin. There's an understated asset allocation argument--you don't have to believe in bitcoin or say anything normative about bitcoin for you to accept it pushes you past the known efficient frontier. Given that, the MPT case for holding bitcoin is undeniable.
tldr; Learn the basics of Python by calculating Bitcoin’s correlation to the stock market and gold. We’ll use the Python programming language to calculate the correlation between Bitcoin and stocks and gold prices. Bitcoin is uncorrelated to traditional assets like stocks and will determine if it makes it into any portfolio on the basis of MPT. *This summary is auto generated by a bot and not meant to replace reading the original article. As always, DYOR.*
I entered the world of investing last month only. Started as 70% Eth 30% Btc for my crypto investments. Thought I needed to apply Modern Portfolio Theory at least a bit, so I took out 20% Eth to 20% LINK (negatively correlated with Eth and Btc). Since then I read about the "race" between ETH and ADA to have both Smart Contracts, PoS and tokens, so I read up on ADA, liked the staking mechanism, and now it's: 30% ETH, 25% ADA, 25% BTC, 20% LINK BTC because seniority, ETH same + it's promising if ETH2.0 comes out (but not very useful until then), ADA because it looks really solid but I divided my % of ETH into it because to me they have the same end purpose, and LINK because it's negatively correlated with all of them (and applying a bit of MPT makes me feel safer).