Category: Articles

Axie Infinity, the Money Printing Machine

David Barreto1 Comment

In this new generation of apps where blockchain meets video games new vehicles for investment arise that use NFTs in a novel way. Axie Infinity has been at the forefront of the movement with a staggering growth of its user base and volume transacted in its marketplace.

In a previous article I did an analysis of Axie Infinity’s blockchain tech stack to understand how robust their technology is before even considering a credible investment opportunity. You can find a link to that article here. Today I’ll focus instead on analyzing its investment potential.

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Axie Infinity and the Power of Blockchain Games

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Updated on August 23rd 2021

These days everyone has already heard about cryptocurrencies and a growing number of people have even purchased assets like bitcoin and ether. But cryptocurrencies are just the tip of the iceberg of what blockchain technologies can do. Last year the biggest news in the space was DeFi and although it’s an interesting space it didn’t drive a significant level of adoption to the blockchain. This year however seems to be the year of the NFTs and in particular, the year of the blockchain games.

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Crypto lending as an alternative to a savings account

David Barreto2 Comments

One common advice for personal finance is to alway keep 3 to 6 months of salary in a savings account for an emergency. This money has to be liquid and not tied to any investment like stocks, crypto or even a GIC. Just a good old fashioned savings account with enough money in it. The problem is that in the age of money printing interest rates for savings accounts in Canada and the US (and I suspect many advanced economies) are near zero while inflation is picking up. Keeping money in a savings account is a losers game.

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Options trading for dummies

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betting on the stock market

Alice is getting into the world of investing and she has her eyes on the company XYZ. The current stock price of that company is $20 but Alice is almost certain that in a few months the stock price will rise to $28 or more so she wants to get in on the action. The problem is that Alice is short on cash, she only has $200 to spare and with that money she could only buy 10 shares. Even if the stock rises to $28 and she sells her 10 shares at that price she will only make a net profit of $80 (10 x $28 – 10 x $20). That’s clearly not enough for her, she wants to find another way to make a bigger profit with her certainty that the stock will soon increase in value.

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Is Bitcoin a currency or an asset?

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Bolivares

There’s an ongoing discussion about the role of Bitcoin that divides people into two camps: those who consider Bitcoin to be a currency and those who consider it to be an asset. The outcome of the discussion has an impact on its price, its correlation to the stock market (where other assets are traded) and government regulations. It is my view that although Bitcoin exhibits all the characteristics of a currency, it is mostly used like an asset (a risky one). But this role might change over time as Bitcoin will likely transition from being treated like an asset to being used like a currency. How do I know that? Because I witnessed the same transition of the US dollar in Venezuela.

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Four scenarios for the US economy: damnation, inflation, reinvention or Japan

David Barreto2 Comments
Crystal Ball

Recently I’ve decided to rebalance my investment portfolio but to do it effectively I had to ask myself a hard question: What’s likely to happen in the US economy in 2021 and beyond? This analysis led me to four scenarios with different probabilities of happening: damnation, inflation, reinvention and Japan. The scenario that seems more likely will drive the distribution of my portfolio between risky / high growth assets and safer / low growth ones.

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Bitcoin explained without complicated terms

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kids playing

When I was starting my journey to understand this technology I found the literature on the subject dry and the information available online often misleading. I decided to write a simple story to explain Bitcoin’s fundamentals in technology and economics without getting into the weeds. The story itself is free of any technical jargon and I hope it’s accessible to everyone, even if the reader doesn’t have a background in technology. I did add some side notes as the story progressed to connect the dots between the analogy and real life, just in case the reader feels inclined to get deeper into a particular subject.

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[Spanish] ¿Cómo le explicarías el funcionamiento de Bitcoin a un niño?

David Barreto3 Comments
kids playing

Mis familiares y amigos que saben de mi interés por Bitcoin y viendo la rápida apreciación de la moneda, me han empezado a preguntar ¿Cómo funciona Bitcoin? Como buen ingeniero empiezo a explicarles cómo funcionan los algoritmos de hashing, la relación entre la llave pública y privada, la criptografía de curva elíptica, proof-of-work, la “gossip network”, los wallets, etc. Desafortunadamente la mayoría de ellos no trabajan en tecnología y las explicaciones técnicas no son efectivas. En lugar de ayudarlos a entender los termino confundiendo aún más.

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Where did the inflation go?

David Barreto2 Comments
inflation

In a previous article I analyzed how the FED’s monetary policy compared to Bitcoin’s. An important takeaway from the article is that, since the beginning of the pandemic, the FED has printed more than 3 trillion dollars, increasing the m0 money supply by 90%. At the same time, and according to the Congressional Budget Office (source), the US economy (GDP) is expected to contract by 5.6% by the end of 2020. In a scenario where the amount of money entering the economy increases drastically but the economy contracts, why aren’t we seeing an increase in the inflation rate?

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Bitcoin’s vs FED’s Monetary Policy

David Barreto6 Comments
Federal Reserve building

In the book “The Bitcoin Standard” written by Saifedean Ammous in 2018, the author claims that Bitcoin is a better store of value than the US dollar because it’s a “harder” currency. The corollary of this claim is that, if you want to save money for the future, you better use a hard currency that’s most likely to preserve (or even increase) its purchasing power over time. According to the author a simple way to analyze the “hardness” of a currency is to calculate its “stock to flow ratio”.

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[Spanish] Bitcoin salvó a mis padres

David Barreto3 Comments
Bitcoin

Hace un par de meses tomé la decisión de renunciar mi trabajo para dedicarme a estudiar las tecnologías que hoy en día se conocen como “blockchain”. No fue una decisión fácil debido a que pasar varios meses sin ingreso económico y viviendo en una ciudad extremadamente cara como Toronto, mis ahorros se verían seriamente afectados. Pero no pude evitarlo, vi demasiadas señales a mi alrededor que apuntaban a que estamos al borde de una transformación social que va a estar apalancada por un nuevo sistema económico basado en riqueza y no en deuda. Bitcoin, creo yo, será el catalizador de esa transformación.

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An overview of Google Apps Script

David Barreto1 Comment

In any company, there’s a lot of data sitting around in spreadsheets. We manipulate that data using built-in functions to create formulas that allow us to extract meaningful information. If your company is using Google Suite you’re able to extend the default functionality available in a spreadsheet by creating custom functions using a flavour of ECMAScript called “Apps Script”.

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Applying agile principles to management

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Ever since I made the transition from being a developer to being a manager I no longer spend my days in front of an IDE coding away. These days my tools of choice are calendars, spreadsheets, documents and presentations. Another significant change is that the people that I interact with on a daily basis have a more diverse set of skills and backgrounds that not always includes technology.

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Immutable Array Operations in Typescript

David Barreto1 Comment

In a previous blog post we explored how to perform immutable operations to update objects using Object.assign(). This time we are going to explore how to perform immutable operations on an array of objects which is a common pattern in Redux. If you wan’t to learn more about Redux, take a look at the excellent training course “Getting Started with Redux” by Dan Abramov, the creator of the library.

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[Spanish] Story Points: Definiendo el esfuerzo relativo

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Scrum es una metodología de desarrollo de software muy popular en la actualidad. Una de las herramientas de Scrum para la planificación de la duración de un proyecto, es la actividad conocida como “planning poker” en donde el equipo de desarrollo le asigna a cada funcionalidad del sistema, o lo que en Scrum se conoce como “historia de usuario”, una cantidad de puntos que miden su dificultad relativa.

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[Spanish] Las telecom y sus grandes datos

David BarretoLeave a comment
telecom antenna

Gran parte de mi experiencia profesional como ingeniero la he obtenido trabajando en empresas de telecomunicaciones. Las telecomunicaciones tienen para mi una connotación especial porque tienen el poder de transformar la vida de las personas. Cuando un pequeño poblado obtiene de un día para otro acceso a Internet dejan de estar excluidos, tienen acceso a la más grande colección de información y conocimiento que como especie humana hemos recolectado en nuestra historia. Sus oportunidades de crecer, de aprender, de estar informados o de divertirse mejoran a la par que mejora su calidad de vida. El acceso a Internet es un gran democratizador del conocimiento, una herramienta para la nivelación de las oportunidades y reducir así la brecha social que amenaza con descomponer la sociedad.

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