MCS Crypto News - Issue #2

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Are you keeping a close eye on Ethereum (ETH)? If not, you might want to, as recent insights from Fidelity paint a promising picture for this popular cryptocurrency. Let’s break it down.

Quick Refresher: Understanding Ethereum 🌐

• What is Ethereum?

  • A blockchain platform that facilitates the creation of decentralized applications (dApps) and smart contracts.

• Why is it Important?

  • It broadens the scope of blockchain technology, enabling secure and transparent decentralized applications, including decentralized finance (DeFi) and more.

• How Does Ethereum Differ from Bitcoin?

  • While Bitcoin is a digital currency, Ethereum is designed to run applications and smart contracts, using its own currency, Ether (ETH), to facilitate transactions.

• Key Ethereum Features

  • Smart Contracts: Self-executing contracts with terms directly written into code.

  • dApps: Secure and transparent apps running on a blockchain.

  • Ether (ETH): Ethereum's native cryptocurrency.

  • DeFi: Financial applications built on the Ethereum blockchain aiming to remove traditional intermediaries.

The best way to think of Ethereum is as an app store.

Imagine your iPhone as a kind of mini-universe, a place where you can find a tool for almost anything you can think of, from chatting with friends, to checking the weather, to playing games. The Apple App Store is the magical gateway to this universe, a place where developers can build and showcase their apps to iPhone users around the world.

Now, think of Ethereum in a similar light. It's like the grand App Store for the decentralized web, offering a platform where developers can build and launch a myriad of applications, known as "dApps" (decentralized applications), using "smart contracts." These dApps can range from financial services to games, and much more, all operating on a transparent and secure blockchain network.

Just as the App Store revolutionized our phones, turning them into versatile tools for daily life, Ethereum seeks to revolutionize the internet, making it more open, secure, and user-friendly.

Okay, now on to the Fidelity report.

Ethereum's Current Standing 📊

As of now, Ethereum is experiencing what many consider to be an undervaluation. Fidelity Digital Assets applied a discounted cash flow model to the current Ethereum metrics (like its supply of around 120 million and annualized network fees exceeding $6.8 billion) and estimated ETH's value to be approximately $2,090. This is a whopping 28% premium over its current market price!

What Drives Ethereum's Value? 💎

The value of Ethereum is intrinsically linked to the activity on its network, particularly the fees generated from transactions. The good news is that this network activity is expected to see substantial growth in the coming years, potentially surpassing $20 billion by 2030.

The shift of Ethereum to a proof-of-stake model has made it easier to model the value attributed to Ether, the cryptocurrency of the Ethereum network. This model means that whether fees are burned or passed on to validators (people who validate transactions on the network), it contributes to the value accruing to ETH holders.

Looking Ahead with Cautious Optimism 🌈

While the future looks bright, it's essential to remain grounded. The report acknowledges potential risks, including the chance that scaling technology might reduce fee revenue unless there is a significant increase in transaction volumes.

Why Should You Care? 🤔

Many people feel they’ve missed out on crypto - like they had to get in years ago to make any money. This report proves that way of thinking patently false.

Ethereum is not just another cryptocurrency; it's a platform that supports a vast range of applications, making it a foundational asset in the digital investment realm.

Understanding its potential growth and the factors that might influence its value can be a golden ticket for investors.

What Happened? 🕵️

Over the weekend, a hacker managed to infiltrate Buterin's X (twitter) account, using it to post a malicious link that purported to offer free commemorative non-fungible tokens (NFTs) from software vendor Consensys, to celebrate the arrival of "Proto-Danksharding coming to Ethereum."

The link, unfortunately, was a trap that led to a significant number of Buterin's 4.9 million followers losing a total of around $691,000. The victims were duped into connecting their digital wallets to mint the promised NFTs, but instead had their funds siphoned off.

The most valuable NFT pilfered so far has been identified as CryptoPunk #3983, valued at approximately $250,543. The exact number of victims remains unknown,

Here’s the post made by the hacker:

How Did the Community Respond? 🗣️

The crypto community was quick to respond, with many alert users recognizing the fake link almost immediately. The first confirmation of the hack came from Buterin's father, Dmitriy "Dima" Buterin, who urged people to disregard the post as Vitalik had been hacked.

Prominent blockchain investigator ZachXBT has been actively updating his over 438,000 followers about the hacker’s activities, trying to keep the community informed and safe.

Lessons to Learn 🎓

• If something seems too good to be true, it is.

• Vitalik has never posted about free NFTs before. Why would he be doing this now?

• DO NOT click on links posted on X. Even they look real, they may not be.

• DO NOT connect your wallet to random websites.

As we navigate the exciting yet unpredictable waters of the crypto world, let's remember to stay vigilant and prioritize our digital safety.

Updated FTX Holdings. Note that they are expected to seek permission to sell off these assets. Will this present a $SOL buying opportunity?

Friend.tech is still thriving.

TFM launches IBC earn - a place to manage all of your yield opportunities throughout the Cosmos Ecosystem.

The Bond market is expecting interest rates to stay the same.

Polygon Daily breaks down the LSDFi (Liquid Staked Derivatives Finance) ecosystem.

A glance at the current state of crypto with ViktorDefi

Salazar.eth breaks down noteworthy fundraising from last week.

That’s all for today. We’ll be back tomorrow with issue #3 of MCS Crypto 101.

Thank you for reading Make Crypto Simple.

Chris Schawel


^{The content provided in this newsletter is for entertainment purposes only and should not be construed as financial advice. All information, including but not limited to market analysis, price predictions, and investment strategies, is purely speculative in nature. We strongly recommend conducting your own research and consulting with a qualified financial advisor before making any investment decisions. We are not responsible for any losses incurred as a result of the information presented in this newsletter.}