The crypto market crashed in June 2022. Bitcoin and other cryptocurrencies hit their lowest prices in over a year, causing market panic. Some believe this crash will benefit future investors.

Before I discuss how this crash might help investors, let's examine why it happened. Inflation in the U.S. reached a 30-year high in 2022 after Russia invaded Ukraine. In response, the U.S. Federal Reserve raised interest rates by 0.5%, the most in almost 20 years. This hurts cryptocurrencies like Bitcoin. Higher interest rates make people less likely to invest in volatile assets like crypto, so many investors sold quickly.

The crypto market collapsed. Bitcoin, Ethereum, and Binance dropped 40%. Other cryptos crashed so hard they were delisted from almost every exchange. Bitcoin peaked in April 2022 at $41,000, but after the May interest rate hike, it crashed to $28,000. Bitcoin investors were worried. Even in bad times, this crash is unprecedented.

Bitcoin wasn't "doomed." Before the crash, LUNA was one of the top 5 cryptos by market cap. LUNA was trading around $80 at the start of May 2022, but after the rate hike?

Less than 1 cent. LUNA lost 99.99% of its value in days and was removed from every crypto exchange. Bitcoin's "crash" isn't as devastating when compared to LUNA.

Many people said Bitcoin is "due" for a LUNA-like crash and that the only reason it hasn't crashed is because it's bigger. Still false. If so, Bitcoin should be worth zero by now. We didn't. Instead, Bitcoin reached 28,000, then 29k, 30k, and 31k before falling to 18k. That's not the world's greatest recovery, but it shows Bitcoin's safety.

Bitcoin isn't falling constantly. It fell because of the initial shock of interest rates, but not further. Now, Bitcoin's value is more likely to rise than fall. Bitcoin's low price also attracts investors. They know what prices Bitcoin can reach with enough hype, and they want to capitalize on low prices before it's too late.

Bitcoin's crash was bad, but in a way it wasn't. To understand, consider 2021. In March 2021, Bitcoin surpassed $60k for the first time. Elon Musk's announcement in May that he would no longer support Bitcoin caused a massive crash in the crypto market. In May 2017, Bitcoin's price hit $29,000. Elon Musk's statement isn't worth more than the Fed raising rates. Many expected this big announcement to kill Bitcoin.

Not so. Bitcoin crashed from $58k to $31k in 2021. Bitcoin fell from $41k to $28k in 2022. This crash is smaller. Bitcoin's price held up despite tensions and stress, proving investors still believe in it. What happened after the initial crash in the past?

Bitcoin fell until mid-July. This is also something we’re not seeing today. After a week, Bitcoin began to improve daily. Bitcoin's price rose after mid-July. Bitcoin's price fluctuated throughout the rest of 2021, but it topped $67k in November. Despite no major changes, the peak occurred after the crash. Elon Musk seemed uninterested in crypto and wasn't likely to change his mind soon. What triggered this peak? Nothing, really. What really happened is that people got over the initial statement. They forgot.

Internet users have goldfish-like attention spans. People quickly forgot the crash's cause and were back investing in crypto months later. Despite the market's setbacks, more crypto investors emerged by the end of 2017. Who gained from these peaks? Bitcoin investors who bought low. Bitcoin not only recovered but also doubled its ROI. It was like a movie, and it shows us what to expect from Bitcoin in the coming months.

The current Bitcoin crash isn't as bad as the last one. LUNA is causing market panic. LUNA and Bitcoin are different cryptocurrencies. LUNA crashed because Terra wasn’t able to keep its peg with the USD. Bitcoin is unanchored. It's one of the most decentralized investments available. LUNA's distrust affected crypto prices, including Bitcoin, but it won't last forever.

This is why Bitcoin will likely rebound in the coming months. In 2022, people will get over the rise in interest rates and the crash of LUNA, just as they did with Elon Musk's crypto stance in 2021. When the world moves on to the next big controversy, Bitcoin's price will soar.

Bitcoin may recover for another reason. Like controversy, interest rates fluctuate. The Russian invasion caused this inflation. World markets will stabilize, prices will fall, and interest rates will drop.

Next, lower interest rates could boost Bitcoin's price. Eventually, it will happen. The U.S. economy can't sustain such high interest rates. Investors will put every last dollar into Bitcoin if interest rates fall again.

Bitcoin has proven to be a stable investment. This boosts its investment reputation. Even if Ethereum dethrones Bitcoin as crypto king one day (or any other crypto, for that matter). Bitcoin may stay on top of the crypto ladder for a while. We'll have to wait a few months to see if any of this is true.

This post is a summary. Read the full article here.

Overview

Ethereum blockchain is a network of nodes that validate transactions. Any network node can be queried for blockchain data for free. To write data as a transition requires processing and writing to each network node's storage. Fee is paid in ether and is also called as gas.

We'll examine how user-initiated transactions flow across the network and into the blockchain.

Flow of transactions

• A user wishes to move some ether from one external account to another. He utilizes a cryptocurrency wallet for this (like Metamask), which is a browser extension.

• The user enters the desired transfer amount and the external account's address. He has the option to choose the transaction cost he is ready to pay.

• Wallet makes use of this data, signs it with the user's private key, and writes it to an Ethereum node. Services such as Infura offer APIs that enable writing data to nodes. One of these services is used by Metamask. An example transaction is shown below. Notice the “to” address and value fields.

var rawTxn = {
    nonce: web3.toHex(txnCount),
    gasPrice: web3.toHex(100000000000),
    gasLimit: web3.toHex(140000),
    to: '0x633296baebc20f33ac2e1c1b105d7cd1f6a0718b',
    value: web3.toHex(0),
    data: '0xcc9ab24952616d6100000000000000000000000000000000000000000000000000000000'
};

• The transaction is written to the target Ethereum node's local TRANSACTION POOL. It informed surrounding nodes of the new transaction, and those nodes reciprocated. Eventually, this transaction is received by and written to each node's local TRANSACTION pool.

• The miner who finds the following block first adds pending transactions (with a higher gas cost) from the nearby TRANSACTION POOL to the block.

• The transactions written to the new block are verified by other network nodes.

• A block is added to the main blockchain after there is consensus and it is determined to be genuine. The local blockchain is updated with the new node by additional nodes as well.

• Block mining begins again next.

The image above shows how transactions go via the network and what's needed to submit them to the main block chain.

References

ethereum.org/transactions How Ethereum transactions function, their data structure, and how to send them via app. ethereum.org

Many of us have struggled for years to master a second language (in my case, English). Because (at least in my situation) we've always used an input-based system or method.

I'll explain in detail, but briefly: We can understand some conversations or sentences (since we've trained), but we can't give sophisticated answers or speak fluently (because we have NOT trained at all).

What exactly is input-based learning?

Reading, listening, writing, and speaking are key language abilities (if you look closely at that list, it seems that people tend to order them in this way: inadvertently giving more priority to the first ones than to the last ones).

These talents fall under two learning styles:

• Reading and listening are input-based activities (sometimes referred to as receptive skills or passive learning).

• Writing and speaking are output-based tasks (also known as the productive skills and/or active learning).

What's the best learning style? To learn a language, we must master four interconnected skills. The difficulty is how much time and effort we give each.

According to Shion Kabasawa's books The Power of Input: How to Maximize Learning and The Power of Output: How to Change Learning to Outcome (available only in Japanese), we spend 7:3 more time on Input Based skills than Output Based skills when we should be doing the opposite, leaning more towards Output (Input: Output->3:7).

I can't tell you how he got those numbers, but I think he's not far off because, for example, think of how many people say they're learning a second language and are satisfied bragging about it by only watching TV, series, or movies in VO (and/or reading a book or whatever) their Input is: 7:0 output!

You can't be good at a sport by watching TikTok videos about it; you must play.

“being pushed to produce language puts learners in a better position to notice the ‘gaps’ in their language knowledge”, encouraging them to ‘upgrade’ their existing interlanguage system. And, as they are pushed to produce language in real time and thereby forced to automate low-level operations by incorporating them into higher-level routines, it may also contribute to the development of fluency. — Scott Thornbury (P is for Push)

How may I practice output-based learning more?

I know that listening or reading is easy and convenient because we can do it on our own in a wide range of situations, even during another activity (although, as you know, it's not ideal), writing can be tedious/boring (it's funny that we almost always excuse ourselves in the lack of ideas), and speaking requires an interlocutor. But we must leave our comfort zone and modify our thinking to go from 3:7 to 7:3. (or at least balance it better to something closer). Gradually.

“You don’t have to do a lot every day, but you have to do something. Something. Every day.” — Callie Oettinger (Do this every day)

We can practice speaking like boxers shadow box.

Speaking out loud strengthens the mind-mouth link (otherwise, you will still speak fluently in your mind but you will choke when speaking out loud). This doesn't mean we should talk to ourselves on the way to work, while strolling, or on public transportation. We should try to do it without disturbing others, such as explaining what we've heard, read, or seen (the list is endless: you can TALK about what happened yesterday, your bedtime book, stories you heard at the office, that new kitten video you saw on Instagram, an experience you had, some new fact, that new boring episode you watched on Netflix, what you ate, what you're going to do next, your upcoming vacation, what’s trending, the news of the day)

Who will correct my grammar, vocabulary, or pronunciation with an imagined friend? We can't have everything, but tools and services can help [1].

Lack of bravery

Fear of speaking a language different than one's mother tongue in front of native speakers is global. It's easier said than done, because strangers, not your friends, will always make fun of your accent or faults. Accept it and try again. Karma will prevail.

Perfectionism is a trap. Stop self-sabotaging. Communication is key (and for that you have to practice the Output too ).

“Don’t forget to have fun and enjoy the process.” — Ruri Ohama

[1] Grammarly, Deepl, Google Translate, etc.

I shouldn't generalize, yet this is true.

Spending is simpler than earning.

Prove me wrong, but with home debt at $145k in 2020 and individual debt at $67k, people don't have their priorities straight.

Where does this loan originate?

Under-50 Americans owed $7.86 trillion in Q4 20T. That's more than the US's 3-trillion-dollar deficit.

Here’s a breakdown:
🏡 Mortgages/Home Equity Loans = $5.28 trillion (67%)
🎓 Student Loans = $1.20 trillion (15%)
🚗 Auto Loans = $0.80 trillion (10%)
💳 Credit Cards = $0.37 trillion (5%)
🏥 Other/Medical = $0.20 trillion (3%)

Images.google.com

At least the Fed and government can explain themselves with their debt balance which includes:

-Providing stimulus packages 2x for Covid relief

-Stabilizing the economy

-Reducing inflation and unemployment

-Providing for the military, education and farmers

No American should have this much debt.

Don’t get me wrong. Debt isn’t all the same. Yes, it’s a negative number but it carries different purposes which may not be all bad.

Good debt: Use those funds in hopes of them appreciating as an investment in the future

-Student loans
-Business loan
-Mortgage, home equity loan
-Experiences

Paying cash for a home is wasteful. Just if the home is exceptionally uncommon, only 1 in a million on the market, and has an incredible bargain with numerous bidders seeking higher prices should you do so.

To impress the vendor, pay cash so they can sell it quickly. Most people can't afford most properties outright. Only 15% of U.S. homebuyers can afford their home. Zillow reports that only 37% of homes are mortgage-free.

People have clearly overreached.

Ignore appearances.

5% down can buy a 10-bedroom mansion.

Not paying in cash isn't necessarily a negative thing given property prices have increased by 30% since 2008, and throughout the epidemic, we've seen work-from-homers resort to the midwest, avoiding pricey coastal cities like NYC and San Francisco.

By no means do I think NYC is dead, nothing will replace this beautiful city that never sleeps, and now is the perfect time to rent or buy when everything is below average value for people who always wanted to come but never could. Once social distance ends, cities will recover. 24/7 sardine-packed subways prove New York isn't designed for isolation.

When buying a home, pay 20% cash and the balance with a mortgage. A mortgage must be incorporated into other costs such as maintenance, brokerage fees, property taxes, etc. If you're stuck on why a home isn't right for you, read here. A mortgage must be paid until the term date. Whether its a 10 year or 30 year fixed mortgage, depending on interest rates, especially now as the 10-year yield is inching towards 1.25%, it's better to refinance in a lower interest rate environment and pay off your debt as well since the Fed will be inching interest rates up following the 10-year eventually to stabilize the economy, but I believe that won't be until after Covid and when businesses like luxury, air travel, and tourism will get bashed.

Bad debt: I guess the contrary must be true. There is no way to profit from the loan in the future, therefore it is just money down the drain.

-Luxury goods
-Credit card debt
-Fancy junk
-Vacations, weddings, parties, etc.

Credit cards and school loans are the two largest risks to the financial security of those under 50 since banks love to compound interest to affect your credit score and make it tougher to take out more loans, not that you should with that much debt anyhow. With a low credit score and heavy debt, banks take advantage of you because you need aid to pay more for their services. Paying back debt is the challenge for most.

Choose Not Chosen

As a financial literacy advocate and blogger, I prefer not to brag, but I will now. I know what to buy and what to avoid. My parents educated me to live a frugal, minimalist stealth wealth lifestyle by choice, not because we had to.

That's the lesson.

The poorest person who shows off with bling is trying to seem rich.

Rich people know garbage is a bad investment. Investing in education is one of the best long-term investments. With information, you can do anything.

Good with money shun some items out of respect and appreciation for what they have.

Less is more.

Instead of copying the Joneses, use what you have. They may look cheerful and stylish in their 20k ft home, yet they may be as broke as OJ Simpson in his 20-bedroom mansion.

Let's look at what appears good to follow and maintain your wealth.

#1: Quality comes before quantity

Being frugal doesn't entail being cheap and cruel. Rich individuals care about relationships and treating others correctly, not impressing them. You don't have to be rich to be good with money, although most are since they don't live the fantasy lifestyle.

Underspending is appreciating what you have.

Many people believe organic food is the same as washing chemical-laden produce. Hopefully. Organic, vegan, fresh vegetables from upstate may be more expensive in the short term, but they will help you live longer and save you money in the long run.

Consider. You'll save thousands a month eating McDonalds 3x a day instead of fresh seafood, veggies, and organic fruit, but your life will be shortened. If you want to save money and die early, go ahead, but I assume we all want to break the world record for longest person living and would rather spend less. Plus, elderly people get tax breaks, medicare, pensions, 401ks, etc. You're living for free, therefore eating fast food forever is a terrible decision.

With a few longer years, you may make hundreds or millions more in the stock market, spend more time with family, and just live.

Folks, health is wealth.

Consider the future benefit, not simply the cash sign. Cheapness is useless.

Same with stuff. Don't stock your closet with fast-fashion you can't wear for years. Buying inexpensive goods that will fail tomorrow is stupid.

Investing isn't only in stocks. You're living. Consume less.

#2: If you cannot afford it twice, you cannot afford it once

I learned this from my dad in 6th grade. I've been lucky to travel, experience things, go to a great university, and conduct many experiments that others without a stable, decent lifestyle can afford.

I didn't live this way because of my parents' paycheck or financial knowledge.

Saving and choosing caused it.

I always bring cash when I shop. I ditch Apple Pay and credit cards since I can spend all I want on even if my account bounces.

Banks are nasty. When you lose it, they profit.

Cash hinders banks' profits. Carrying a big, hefty wallet with cash is lame and annoying, but it's the best method to only spend what you need. Not for vacation, but for tiny daily expenses.

Physical currency lets you know how much you have for lunch or a taxi.

It's physical, thus losing it prevents debt.

If you can't afford it, it will harm more than help.

#3: You really can purchase happiness with money.

If used correctly, yes.

Happiness and satisfaction differ.

It won't bring you fulfillment because you must work hard on your own to help others, but you can travel and meet individuals you wouldn't otherwise meet.

You can meet your future co-worker or strike a deal while waiting an hour in first class for takeoff, or you can meet renowned people at a networking brunch.

Seen a pattern here?

Your time and money are best spent on connections. Not automobiles or firearms. That’s just stuff. It doesn’t make you a better person.

Be different if you've earned less. Instead of trying to win the lotto or become an NFL star for your first big salary, network online for free.

Be resourceful. Sign up for LinkedIn, post regularly, and leave unengaged posts up because that shows power.

Consistency is beneficial.

I did that for a few months and met amazing people who helped me get jobs. Money doesn't create jobs, it creates opportunities.

Resist social media and scammers that peddle false hopes.

Choose wisely.

#4: Avoid gushing over titles and purchasing trash.

As Insider’s Hillary Hoffower reports, “Showing off wealth is no longer the way to signify having wealth. In the US particularly, the top 1% have been spending less on material goods since 2007.”

I checked my closet. No brand comes to mind. I've never worn a brand's logo and rotate 6 white shirts daily. I have my priorities and don't waste money or effort on clothing that won't fit me in a year.

Unless it's your full-time work, clothing shouldn't be part of our mornings.

Lifestyle of stealth wealth. You're so fulfilled that seeming homeless won't hurt your self-esteem.

That's self-assurance.

Extroverts aren't required.

That's irrelevant.

Showing off won't win you friends.

They'll like your personality.

#5: Time is the most valuable commodity.

Being rich doesn't entail working 24/7 M-F.

They work when they are ready to work.

Waking up at 5 a.m. won't make you a millionaire, but it will inculcate diligence and tenacity in you.

You have a busy day yet want to exercise. You can skip the workout or wake up at 4am instead of 6am to do it.

Emotion-driven lazy bums stay in bed.

Those that are accountable keep their promises because they know breaking one will destroy their week.

Since 7th grade, I've worked out at 5am for myself, not to impress others. It gives me greater energy to contribute to others, especially on weekends and holidays.

It's a habit that I have in my life.

Find something that you take seriously and makes you a better person.

As someone who is close to becoming a millionaire and has encountered them throughout my life, I can share with you a few important differences that have shaped who we are as a society based on the weekends:

-Read

-Sleep

-Best time to work with no distractions

-Eat together

-Take walks and be in nature

-Gratitude

-Major family time

-Plan out weeks

-Go grocery shopping because health = wealth

#6. Perspective is Important

Timing the markets will slow down your career. Professors preach scarcity, not abundance. Why should school teach success? They give us bad advice.

If you trust in abundance and luck by attempting and experimenting, growth will come effortlessly. Passion isn't a term that just appears. Mistakes and fresh people help. You can get money. If you don't think it's worth it, you won't.

You don’t have to be wealthy to be good at money, but most are for these reasons.  Rich is a mindset, wealth is power. Prioritize your resources. Invest in yourself, knowing the toughest part is starting.

Thanks for reading!

This is arguably the best three-minute demonstration I've ever seen of anything. Derek Sivers turns a shaky video of a lone dancing guy at a music festival into a leadership lesson.

A leader must have the courage to stand alone and appear silly. But what he's doing is so straightforward that it's almost instructive. This is critical. You must be simple to follow!

Now comes the first follower, who plays an important role: he publicly demonstrates how to follow. The leader embraces him as an equal, so it's no longer about the leader — it's about them, plural. He's inviting his friends to join him. It takes courage to be the first follower! You stand out and dare to be mocked. Being a first follower is a style of leadership that is underappreciated. The first follower elevates a lone nut to the position of leader. If the first follower is the spark that starts the fire, the leader is the flint.

This link was sent to me by @ottmark, who noted its resemblance to Kurt Vonnegut's three categories of specialists required for revolution.

The rarest of these specialists, he claims, is an actual genius – a person capable generating seemingly wonderful ideas that are not widely known. "A genius working alone is generally dismissed as a crazy," he claims.

The second type of specialist is much easier to find: a highly intellectual person in good standing in his or her community who understands and admires the genius's new ideas and can attest that the genius is not insane. "A person like him working alone can only crave loudly for changes, but fail to say what their shapes should be," Slazinger argues.

Jeff Veen reduced the three personalities to "the inventor, the investor, and the evangelist" on Twitter.