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The Wolf Den #587 - The Tronics Boom

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September 26 · Issue #587 · View online
The Wolf Den Crypto Newsletter
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In This Issue:
  1. The Tronics Boom
  2. Legacy Markets
  3. Is Proof-Of-Stake Winning?
  4. Coinbase Is Being Sued
  5. Zero Knowledge, Privacy, And True Decentralization | Evan Shapiro, Mina
  6. My Recommended Platforms And Tools
The Tronics Boom
Market cycles are fascinating to study. They are as inevitable as the sun rising and setting, but ignored as much as an annoying step child.
Each market cycle is driven by the same human tendencies, so one would assume that investors would eventually learn the lessons of the past, but that’s not the case. Thanks to human emotions, fancy jargon, and false promises, markets continue to do what they do best - boom and bust. 
The Dot-com bubble is often used as a parallel for the crypto bear market, but today I’ll present something slightly different. From 1959-1962, a lesser-known bubble existed. Known as the Tronics Bubble, this mania resembled crypto today. During this time period, stock offerings included obscure “electronic” jargon in their names, because it was popular and an easy sell. Companies that had nothing to do with electronics jumped on board, much like companies do now with blockchain tech.
Here is a great excerpt from the legendary Jack Dreyfus, describing this mania.
Take a nice little company that’s been making shoe laces for 40 years and sells at a respectable six times earnings ratio. Change the name from Shoelaces, Inc. to Electronics & Silicon Furth-Burners. In today’s market, the words ‘electronics’ and ‘silicon’ are worth 15 times earnings. However, the real play in this stock comes from the word ‘furth-burners,’ which no one understands. A word that no one understands entitles you to double your entire score.
Therefore, we have six times earnings for the shoelace business and 15 times earnings for electronic and silicon, or a total of 21 times earnings. Multiply this by two for furth-burners, and we now have a score of 42 times earnings for the new company. In today’s market, studying securities can be fatal. While you’re studying them, they’re apt to double, and by the time you find you wouldn’t have bought them in the first place, they will probably have tripled.
With a sprinkle of financial black magic, false promises, and space race hype, valuations soared. Shoelaces Inc. became Electronics & Silicon Furth-Burners. American Music Guild became Space-Tone and investors loved it. 10 years following the boom, most shares of the companies involved in the mayhem were worthless.
Does anyone remember when, in 2017, Long Island Iced Tea changed its name to “Long Blockchain Corp” and the stock jumped 200% at the opening of trading? This was a top signal for the 2017 run, but also a major hint at what was to come with the ICO craze. Once interest in crypto started to strengthen again in late 2020, the same phenomenon repeated. Like the Tronics Boom, the more complex the white paper, the more money there was to be raised.
Nonsense sells.
ICO buyers largely didn’t understand what they were investing in, they simply fell for juicy buzz words or the promise that the blockchain would “fix everything.” Selling products with names based on ZK-snarks, Merkle hashes, and liquid staking isn’t much different from companies using hydro-space, geophysics, electronics, and silicon to sell insurance, real estate, and shoelaces. Promoters of ICOs, much like the creators of Tronic companies, composed white papers in complex language, then held their arms out wide to collect the tsunami of cash.
And it worked.
The spirit of these bubbles was not sinister - while using the term electronics was nonsense, the actual technology the hype was based on became the most powerful innovation of the future. To that end, much of what we believe about crypto today will be laughed at in 20 years. Investors are faced with the tall task of allocating money to an industry that will evolve at the speed of light, trying to determine what is real and what is hype.
Choose wisely - like in the electronics world, the right protocols will be the most powerful innovations of the future.
THERE ARE NO CHARTS TODAY, AS I CURRENTLY HAVE SPOTTY INTERNET!
Legacy Markets
Stock Market Today: Dow, S&P Live Updates for Sept. 26 - Bloomberg
Global risk assets extended their selloff on Monday as fears of faster inflation and global recession continued to rise. 
UK markets were in focus as the pound crashed to an all-time low and bond yields surged as the government vowed to press on with tax cuts. The 10-year yield topped 4% for the first time since 2010 as traders ramped up bets on the pace and size of interest-rate hikes by the Bank of England. 
Key events this week:
  • Fed officials Susan Collins, Raphael Bostic, Loretta Mester speak at events, Monday
  • ECB President Christine Lagarde at the European Parliament, Monday
  • China industrial profits, Tuesday
  • US new home sales, Conference Board consumer confidence, durable goods, Tuesday
  • Fed Chair Jerome Powell and Charles Evans speak at events, Tuesday
  • Fed’s Mary Daly, Rafael Bostic, Charles Evans and ECB President Christine Lagarde speak at events, Wednesday
  • Euro zone economic confidence, consumer confidence, Germany CPI, Thursday
  • US initial jobless claims, GDP, Thursday
  • Fed’s Loretta Mester, Mary Daly speak at events, Thursday
  • China PMI, Friday
  • Euro zone CPI, unemployment, Friday
  • US consumer income , University of Michigan consumer sentiment, Friday
  • Fed’s Lael Brainard and John Williams speak, Friday
Some of the main moves in markets:
Stocks
  • The Stoxx Europe 600 fell 0.2% as of 9:25 a.m. London time
  • Futures on the S&P 500 were little changed
  • Futures on the Nasdaq 100 rose 0.1%
  • Futures on the Dow Jones Industrial Average fell 0.1%
  • The MSCI Asia Pacific Index fell 1.5%
  • The MSCI Emerging Markets Index fell 1.8%
Currencies
  • The Bloomberg Dollar Spot Index rose 0.4%
  • The euro fell 0.1% to $0.9674
  • The Japanese yen fell 0.3% to 143.76 per dollar
  • The offshore yuan fell 0.1% to 7.1458 per dollar
  • The British pound fell 1.1% to $1.0738
Cryptocurrencies
  • Bitcoin rose 0.9% to $19,067.22
  • Ether rose 1.1% to $1,306.63
Bonds
  • The yield on 10-year Treasuries advanced eight basis points to 3.76%
  • Germany’s 10-year yield advanced five basis points to 2.07%
  • Britain’s 10-year yield advanced 31 basis points to 4.14%
Commodities
  • Brent crude fell 0.9% to $85.37 a barrel
  • Spot gold rose 0.1% to $1,645.96 an ounce
Is Proof-Of-Stake Winning?
Vitalik Hopes Dogecoin ($DOGE) and Zcash ($ZEC) Will Also Move to PoS Consensus | Cryptoglobe
Since Ethereum’s successful switch to POS from POW, developers, regulators and investors have been showing increased interest in proof-of-stake. During Messari Mainnet, Vitalik said the following: “I’d say should… As proof of stake matures, I expect it to just increase in legitimacy more and more over time… I hope that Zcash moves over. I am also very hopeful that Dogecoin is going to evolve over to proof of stake at some point soon.
It could happen.
In May 2022, Zcash began an initial research phase to “ultimately produce a proposal that recommends Zcash move to a proof-of-stake protocol.
It will be interesting to see communities and developers choose sides.
Coinbase Is Being Sued
Crypto Giant Coinbase Facing $350,000,000 Lawsuit for Allegedly Infringing on Technology Patent - The Daily Hodl
Veritaseum is suing Coinbase, claiming that the exchange is using its patents for Coinbase Cloud, Coinbase Pay, and Coinbase Wallet. Coinbase has yet to comment on the lawsuit.
Long Live The British Pound
British pound plummets to record low against the dollar | CNN Business
The British pound fell to a record low against the dollar this weekend. For my U.S. readers, this is a reminder as to how fortunate we are relative to other nations. While our markets are in disarray, we still have ready access to the world’s global reserve currency, which has proven to be relatively strong against the rest of the world’s money.
The dollar may eventually hyper inflate as Bitcoiners predict, but it’s still the most compelling store of value for most of the world.
Zero Knowledge, Privacy, And True Decentralization | Evan Shapiro, Mina
Podcast - The Wolf of All Streets
Zero Knowledge, Privacy, And True Decentralization | Evan Shapiro, Mina
I sat down with Evan Shapiro, the founder of Mina protocol and the current CEO of Mina Foundation, to cover everything from Zero Knowledge SNARKS, privacy, and scaling, to what true decentralization means and how to achieve it.
Mina was created by Evan Shapiro and Izaak Meckler in 2017. It is one of the lightest blockchains, just 22 kB. To achieve this result, Mina implemented zk-SNARKS, a cryptography technique that leads to a significant decrease in the computational requirements needed to support a full blockchain network.
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The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this e-mail constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to “Buy,” “Sell,” or “Hold” an investment.
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