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Fungible vs Non-Fungible Tokens: What Is The Difference?

Are you invested in cryptocurrencies or have you bought yourself an NFT? If you haven’t then you have come to the right place as today we will give a comparison of fungible vs non-fungible tokens: what is the difference? Even if you have invested in any of those, learning the difference between the two will help you make a much better and well-informed decision going forward and get ahead of the pack. This becomes much more important as the future is going to see a huge influx of people and mass adoption of blockchain technology in general and NFTs, and cryptocurrencies in particular. On top of that, if you’ve ever wondered how to invest in NFT, then you have come to the right place.

Fungible vs Non-Fungible Tokens

The difference between the two is very simple. Think of the fungible tokens as the money you carry in your wallet except they are digital and decentralized. To put it simply, fungible tokens are interchangeable for example, if you own 1 BTC and your friend also owns 1 BTC, then these two are interchangeable and would hold the same value. Just like how a USD 10 bill in New York would have the same value as a USD 10 bill from Los Angeles and can be interchanged. Fungible tokens differ from conventional currencies in a way that they exist over the blockchain and are decentralized.

Non-Fungible Tokens(NFTs) are also tokens but they differ from fungible tokens in a way that they are not interchangeable. Every NFT is unique and can not be equated to any other NFT, even if they are from the same collection.

Fungible tokens are a store of value as 1 BTC is equal to 1 BTC everywhere across the globe. Whereas Non-Fungible Tokens are a store of data, i.e. they store all the information about it like its creation, blockchain data, history of ownership, etc. This is what gives it a unique identity.

Fungible tokens do not have any real-world assets, either tangible or intangible associated with them. Non-Fungible Tokens on the other hand can have a tangible or intangible asset like intellectual property attached to them. On top of that, fungible tokens are divisible while non-fungible tokens can not.

One more major difference between fungible and non-fungible tokens is that while most of the fungible tokens exist on their own blockchain, such as BTC has its own blockchain, and so does ETH. NFTs on the other hand are ERC-721 standard tokens and exist on some other blockchain such as Ethereum, Solana, etc. It is important to understand that not all cryptocurrencies are tokens. Tokens are inherently built on some existing blockchain, like the majority of the altcoins in existence, today are built on Ethereum blockchain and are ERC-20 standard.

Fungible Tokens

Non-Fungible Tokens

1. They are interchangeable 1. They are unique in nature and can not be interchanged.
2. They are a store of value 2. They are a store of data
3. The tokens are built mostly on ERC-20 standards 3. The NFTs are ERC-721 standard tokens
4. Divisible into smaller parts 4. NFTs are indivisible and only have value as a whole.

Now that you know about the differences between fungible and non-fungible tokens, let us understand what are the pros and cons of investing in NFTs.

Pros and Cons Of Investing In NFTs

Pros

  1. If you are an artist like a musician, painter, content creator, etc. you can connect directly with your buyers, fans, followers, etc. using NFTs and even earn royalties on the NFT of your work exchanging hands or being sold further without the need for any middlemen.
  2. People have made hundreds, thousands, and millions of dollars by investing in NFTs in many different ways and if done with proper research and timing, you can also earn a hefty profit from the NFT market.
  3. NFTs are going to be a big thing as the world moves into the Metaverse as stated by some of the biggest tech companies in the world, so investing in them now might be like investing in Amazon when it was just starting out.

Cons

  1. NFTs and the entire cryptocurrency market is highly volatile and a lot of people have lost a lot of money including their lifes savings in these markets as seen during the recent LUNA crash.
  2. Many people still do not believe in NFTs as what is the point of owning an original of something when hundreds or thousands of copies of it can be made online. Even though it can be related to traditional art. For e.g. people can produce a hundred or thousand different copies of Leonardo Da Vinci’s Mona Lisa, but the original would not lose its value.

Since NFT is a new technology, it is not clear what path it would take in the long run and that is what makes it a risky investment.

Conclusion

Fungible or non-fungible, tokens are here to stay and will eventually make the world more decentralized in nature. It is just for us to see how long it would take to happen. But as of now, they are both risky investments and you should always do your own research before investing in either of them.

CryptoWatch: Silvergate Capital poised to trigger next Bitcoin plunge

  • Silvergate Capital runs major clearing portal that skirts AML and KYC;
  • Exposure to FTX, BlockFi, and Gemini said to be Silvergate achilles heel;
  • Share price down 81% YTD despite new investor Brendan Blumer’s 10% stake;
  • Silvergate is a US Federal Charter Bank and trades on the NYSE as “SI”

Its a milestone in human interconnectivity when Tiktok is becomes the best source of breaking news in crypto and geopolitical upheaval. But I have resigned myself to the fact that journalists too use social media platforms to find the smoke that indicates fire in many cases.

Silvergate Capital, organized and licensed as a state bank based in La Jolla, CA, operates the crypto world’s closest approximation of the SWIFT network, that allows for instantaneous transfer of capital in any quantity internationally. With the sole exception that it does not provide AML (anti money laundering) or KYC (know your client) information about the participants.

It is essentially the conduit through which US dollars are transformed into crypto currencies from US financial institutions to non-regulated offshore exchanges.

Meaning that, it could technically be deemed a platform for the international laundering of the proceeds of crime, or the best way to evade taxes.

The platform, known as “SEN” for Silvergate Exchange Network, is relied upon by almost all of the major crypto platforms such as Coinbase, Kraken, Circle, Polychain, Bitstamp and  investment entities like Gemini, Genesis, Graysclae, and others. The company website claims to service “750 of the most recognized and well-funded digital currency exchanges, institutional investors, and software developers in fintech. ”

Silvergate Capital, the parent company of Silvergate Bank, lent Michael Saylor’s Microstrategy Inc $205 million so he could buy more Bitcoin. Microstrategy is down over 60% YTD.

The implications for this are significant, because the SEN system is designed to go around KYC and AML provisions, which is a violation of US  federal law.

That means each of these institutions could be deemed to have engaged in money laundering activity and potentially wire fraud as well – both major felony crimes.

To suggest that this has the potential to crash crypto even further is an understatement.

Most importantly, this story coming to light could provide regulators with all the evidence they need to ban crypto trading anywhere that funds must originate from a US institution. This would slam shut one of the only loopholes available to crypto traders to trade in and out of USD and crypto at high speed, thereby wrecking an important pipeline of the entire crypto ecosystem.

Silvergate listed 15.5 billion in assets and 14.3 billion in liabilities as of its last quarterly financial statement for the period ending September 20, 2022.

Morningstar’s 2023 Lithium Outlook

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Morningstar's 2023 Lithium Outlook
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Today, we sit down with Morningstar Equity Strategist Seth Goldstein to discuss Morningstar’s bullish outlook in the lithium market. Seth provides his top stock pick (Lithium Americas $LAC) to take advantage of the lithium price remaining at high levels. Other battery metals and battery formulations are also discussed.

Tembo Gold Comes Back to Life

Someone called me a month or so back and pitched me on a company I had visited and followed a dozen years ago. I had lost track of the company because I never seemed to hear anything from or about them. Part of the reason was because they weren’t doing anything at all.

Here is the story.

Sutton Resources controlled by Jim Sinclair explored for gold and found the deposit now known as Bulyanhulu. In 1999 Barrick purchased Sutton for $343 million and began construction of a mine. It cost $280 million and went into production in 2001. Today the mine still produces over 100,000 ounces of gold a year and has 2.5 million ounces in reserves. As far back as 2010 Barrick was producing 250,000 ounces of gold a year. Clearly they would like to find new and easy to mine resources.

One of the principals of Sutton staked ground to the west and northwest of the Bulyanhulu deposit and formed a company named Lakota Resources. Lakota was an early advertiser with 321gold but the guy running the company was more interested in drinking than mining. I can understand that, at times I feel exactly the same way.

I visited the property about fifteen years ago. When you look at maps of the structure and the Bulyanhulu mine off to the distance to the southeast it becomes obvious that the gold bearing structure runs from the mine right onto the Lakota property. To confirm, there were hundreds of garimpeiro miners working near surface showings.

Click here to read the full story

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Goldman Sachs Statements on Lithium Prices Depart from Reality

Goldman Sachs is at it again. After the publication of their report “The End of the Beginning” in June this year led to a sell-off across all publicly traded lithium issuers, they have apparently doubled down on that sentiment, stating in a letter to investors they expect “overcapacity and slowing (electric vehicle) sales’ could soon seriously slow the lithium market”.

Despite that, they revised their prediction of a 76,000 for 2023 tonne surplus downward from the June statement.

Related: Goldman Sachs Battery Metals Call: A History of Manipulation

Since the publication of its bearish sentiment on June 1st triggered a sell-off in lithium stocks, the commodity futures price of lithium has risen by 12.9%…a rather poignant demonstration of the problematic issue of such an influential institution publishing predictions that are flat out wrong.

Chart showing the aftermath of Goldman Sachs attempt to manipulate markets

But I finally got around to absorbing the entire Goldman research report, and the contradictions in sentiment in it are so rife that I had to keep starting over to believe my eyes. If anything, the data referenced in the report suggests the bull market is about to become much more entrenched.

For example, this statement:

While the battery metals bull market appears to have peaked, our new metal price forecasts are still higher than historical 5-year average levels (especially for Nickel). Further, spot and contract lithium prices have diverged meaningfully in recent months, especially for the lithium hydroxide market which is dominated by contract-pricing, and we expect contract prices to lag spot prices by 2-3 quarters. Overall we raise our 2022E-25E global average battery pack price forecasts by 8-26% and expect the battery price to peak in 2023.

If the battery price forecast is expected to rise by 8 – 26% over the next 3 years, how could the price peak in 2023? With inflation well above 8 percent in all markets, that doesn’t even make sense.

This suggests that the battery metals market is anything but over. Not only is nickel expected to lead the price appreciation trend among the bat metals, but the selling price of batteries is also expected to rise. How does that support any terminal point in the bull market?

Goldman’s own chart points to increasing lithium demand while there is a complete absence of analysis on the supply side to justify the overarching sentiment:

Goldman Sachs has a Conflict of Interest

In the June 2022 article, Goldman Sachs discloses potential investment banking relationships with several battery and/or cathode manufacturers. Specifically,

Goldman Sachs is acting as a manager, or co-manager of a pending underwriting for CATL , has received compensation for investment banking services in the past 12 months from LG Energy Solution,  expects to receive or intends to seek compensation for investment banking services in the next 3 months from CATL, LG Energy Solution, Samsung SDI Co and SK Innovation.

So one possible explanation for Goldman being so contrary to what its own data is saying is that it may serve the interests of its investment banking group to lower the valuations of its clients’ suppliers ahead of any major capital raise.

For the record, here is Goldman’s chart on their price expectations for the next year:

Goldman Sachs expects lithium prices to fall at the “fastest pace in 2023”.

Benchmark Mineral Intelligence, on the other hand, expects a continuation of the steady increase in lithium carbonate and hydroxide prices as indicated by their chart below.

Benchmark Mineral Intelligence projects continued demand-driven price appreciation.

We shall see. But if the track record on lithium holds, Goldman Sachs bearish proclamations might be viewed is bullish indicators.

What about the quality of supply-side projections?

There exists a historical correlation where rosy projections of imminent supply side additions are ultimately optimistic at best if not downright fraudulent in many cases. I won’t present examples here to avoid liability, but suffice to say that resource investors have seen many projects portrayed as certainties become historical footnotes.

At the analytical layer of investment bank scrutiny, the quality of projections might be overlooked if it serves some interest elsewhere within the enterprise to accept rosy projections. Since Goldman Sachs, by its own admission, is chasing investment banking business from some of the world’s largest battery component manufacturers, that conflicted interest is enough to drive such oversight.

But other factors often result in the elimination or delay of new supply side projects that might have been seen as credible.

The emergence of a socialist government in Chile has thwarted investment in new Chilean supply.

In Utah, US Magnesium is trying to get permits to expand two intake canals into Great Salt Lake to increase the water intake from the lake to 100,000 gallons per minute. The lake is already at historic lows, and public opposition to the addition of industrial capacity being extracted from the lake is looking like it could block the permits. US Magnesium extracts mostly other products from the lake, but says it could add 10,000 tons per year of lithium to that mix if it could be granted the additional permits.

So while Goldman Sachs might account for this as credible future supply, reality may paint a starkly different picture.

In Argentina, whose share of global lithium supply has risen to 16 percent due to rapid development and permitting of various salars, an NGO called Fundacion Ambiente y Recursos Naturales (Environment and Natural Resources Foundation) issued a report in May 2022 that makes 9 recommendations to the communities and governments in Argentina, that, if implemented, could hinder many of the projects the Goldman Sachs supply-side scenario predicts.

These are the less visible headwinds that might render the quality of projections upon which these macro pictures lie somewhat deficient.

Far be it from to imply that my depth of access and connectivity within the lithium supply side is better than Goldman Sachs considerable research resources. But given Goldman’s rather flagrant track record of selecting data that suits its narrative in industry, it is incumbent on investors to question the data behind the data to obtain a more nuanced perspective.

FTX Special | Midas Letter Live

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FTX Special | Midas Letter Live
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James West & Ed Milewski discuss how Sam Bankman-Fried (SBF) went from the crypto genius who founded one of the biggest cryptocurrency exchanges in the world to an epic flameout that left his empire and the future of crypto teetering on the edge.

How has the FTX scandal affected crypto and what are the consequences on the overall stock market?

Watch this week’s episode of Midas Letter LIVE to find out.

Fed Minutes Set Mood on Wall Street for Rest of 2022

The Federal Reserve’s minutes of their last meeting add fuel to increasing market excitement, affirms the CEO of one of the world’s largest independent financial advisory, asset management and fintech organizations.

The bullish observation from deVere Group’s Nigel Green comes as the meeting minutes released Wednesday suggest that official data from the U.S. central bank earlier this month concluded that smaller interest rate increases should happen soon.

He says: “The minutes give markets more of a picture about where the central bank of the world’s largest economy is headed. 

“It seems that the Federal Open Market Committee (FOMC) is heading toward stepping down to a 0.5 percentage point increase in December, following four consecutive 0.75 percentage point hikes. 

“This suggestion of smaller rate rises to come will certainly buoy stock markets, although the immediate positive impact will be muted somewhat by lighter-than-usual trading volumes because of Thanksgiving holiday on Thursday.

“The FOMC has been keen to stress that the fight against inflation is not over yet and we expect rate rises to continue well into 2023, but the slowing of the pace of the hikes will add fuel to increasing market excitement.”

Ahead of the Fed minutes being published, the deVere CEO predicted that the year ahead promises to be much more positive for markets, after the turbulence of 2022. 

He cited four main reasons:  inflation peaking in most major economies, low valuations providing buying opportunities for investors, the growing digitalization of business models, and the peaking of the dollar’s strength.

Nigel Green concludes: “The Federal Reserve won’t meet again until the next rate-setting meeting in mid-December, but with stock markets being forward-focused, these latest minutes will pretty much set the mood until the end of 2022.”

Crypto Stocks Short Sellers Are up 89.58% YTD Following the FTX Collapse

Crypto stocks short sellers are turning a tidy profit in the wake of Sam Bankman-Fried’s FTX debacle. That’s according to a recent BanklessTimes.com report. The site has presented data indicating that crypto shorting investors are up 89.58% after the crypto exchange’s collapse.

FTX’s announcement that it had filed for bankruptcy on 11th November sent ripples through the crypto market. Bitcoin fell 4% to its lowest in two years, reaching lows of $15,586.94. Similarly, Ether, the second leading digital asset, shed 8% of its value, going to a low of $1,081.56. Other crypto suffered varying degrees of losses too.

Jonathan Merry, the CEO of BanklessTimes, spoke on the data: “The crypto market has entered a tumultuous cycle due to the insolvency of the failed crypto exchange FTX. Cryptocurrencies are a volatile investment, and short sellers thrive on this volatility to make gains. The uncertainties that FTX’s fall brought on the crypto market created the perfect opportunity for them to profit.”

Instabilities and Frauds Have Rocked the Crypto Industry

Besides the demise of FTX, this year has seen several other eruptions and frauds in the crypto industry. The unbelievable tales of worthless tokens masquerading as assets, the unanticipated withdrawal of billions of dollars in cash before declaring bankruptcy, the fraudulent halo surrounding Sam Bankman-Fried (AKA SBF), and FTX’s total lack of structure or organization have sent shockwaves throughout the world.

Following FTX’s downfall, the mood in the sector has worsened even further, as the firm was seen as having a steady presence.

Bitcoin’s price has fallen from roughly $69,000 to less than $17,000 in the past year. Bitcoin’s price movement is widely used as a barometer of emotion in the crypto market.

Similarly, crypto-focused stocks have taken a sound beating. For instance, MicroStrategy’s stock price is down 70% from where it was at the beginning of the year. Likewise, Silvergate and Coinbase are down over 80%. Also dwindling is the optimism of Wall Street experts on the stock.

That said, the FTX-inflicted chaos largely left traditional U.S. stocks unaffected. They traded upwards on the back of softer-than-expected inflation data, which gave investors hope.

FTX’s Fall

The failure of TerraUSD earlier this year had a domino effect on several enterprises. It contributed to the collapse of a significant hedge fund, Three Arrows Capital.

Like TerraUSD, FTX’s fall will likely have a ripple effect on the exchange’s affiliated companies.. Hackers preyed on the firm and stole about $477 million worth of crypto assets. FTX has acknowledged that “unauthorized transactions” took place. However, they have not provided information on the amount of money stolen.

The full story and statistics can be found here: Crypto Stocks Short Sellers Are up 89.58% YTD Following the FTX Collapse

Research Reveals the Increase in the Gas Prices Worldwide

It’s no secret that many countries are experiencing an energy crisis, with prices soaring in recent months. Many homes are looking for ways to reduce their energy bills, from upgrading to a more energy-efficient boiler to getting home cover to avoid unexpected bills in the event of a breakdown. Earlier this year the UK government announced a £400 non-repayable discount to most UK households, in an effort to help consumers with their energy bills over winter.

With the cost of energy soaring in the UK, BOXT wanted to find out how this compares to rising prices in countries in the International Energy Agency (IEA).

BOXT looked at government information to find out how much electricity and gas prices have increased in the last five years. They also looked into the measures each government is taking to help households deal with the energy crisis, comparing their response to that of the government in the UK.

Top 10 countries with the biggest gas price increase:

Rank
Country
5 year difference
1
Denmark
89%
2
Sweden
88%
3
Greece
47%
4
Netherlands
32%
5
Italy
30%
6
Luxembourg
20%
7
Spain
18%
8
Belgium
15%
9
Canada
14%
10
Czech Republic
11%

Norway is the country with the biggest increase in electricity prices worldwide – 91% increase in electricity cost in pence/kWh since 2016. To help residents cope with rising energy prices, the Norwegian government is covering 80% of the portion of electricity price that exceeds NOK 0.70 per kWh at least until March 2023. From October to December of 2022, that percentage has increased to 90%.

The second highest electricity rises are in Finland – Since 2016, Finnish residents have seen their electricity bills increase by almost two-fifths (37%) on average. To combat soaring prices, the government in Finland recently cut electricity VAT from 24% to 10% and also announced plans to offer €10 billion of liquidity guarantees to the energy sector, in an effort to prevent a nationwide financial crisis.

Tied in third place are the Czech Republic, Denmark, and the United Kingdom with 35% increases in electricity prices. The unit price for electricity in these countries has risen by over a third (35%) in the last five years. 

Top 10 countries with the highest gas prices:

Rank
Country
5 year difference
1
Sweden
9.54
2
New Zealand
6.35
3
Spain
6.18
3
Greece
5.99
3
Switzerland
5.88
6
Italy
5.41
7
Ireland
5.21
8
France
4.81
9
Portugal
4.75
10
Denmark
4.61

The most expensive country overall for gas prices is Sweden, where residents pay an average of 9.54p per kWh. Sweden enacts a carbon tax, which has successfully helped to lower the country’s emissions but leads to these higher costs.

In second place, although some distance behind Sweden, is New Zealand, where gas costs an average of 6.35 pence per kWh. The New Zealand Commerce Commission recently announced that gas companies would be able to charge higher rates, with customers expected to pay an extra NZ$200 (£100) over the next four years.

Spain has the third highest cost when it comes to gas, at 6.18p per kWh.

Further insights:

  • Spain ranks third for both the highest costs for electricity and gas prices in the world. Spain is paying an average of 18.51p per kWh for electricity. Recently electricity prices in Spain hit a historic high and were recently capped at €130 (£112) per megawatt hour, down from €210 (£181). Also, the third highest cost when it comes to gas, at 6.18p per kWh.
  • The United Kingdom has the highest electricity prices overall, with Brits paying 19.31 pence per kWh. Much like the rest of the world, prices have increased due to reduced supply from Russia due to the Ukraine conflict, as well as the after-effects of the coronavirus pandemic.
  • Denmark has witnessed the highest price increase in gas unit charges in the last five years. From 2.44 to 4.61 pence/kWh, the average price has risen by 89%. Denmark is also one of the countries with the highest increases in electricity prices over the past five years.

You can view the full research here.

Bitcoin Investors Poised for the Rate Hike Unwind

Bitcoin and cryptocurrencies will continue to hold their current price ranges until the end of the year, before the ‘crypto winter’ thaws in the spring of 2023 when inflation will have peaked and central banks unwind their rate hikes.

This is the prediction of Nigel Green, the chief executive and founder of deVere Group, one of the world’s largest independent financial advisory, asset management and fintech organizations.

“We saw this week how Bitcoin and crypto are going to react when major central banks take their foot off the economic brakes and slow down their interest rate hike agenda as inflation peaks,” he says.

“Bitcoin jumped around 1% on Wednesday after minutes from the Federal Reserve’s November meeting indicated that the majority of U.S. central bank officials want a slower pace of rate hikes going forward.”

The deVere CEO continues: “Assets that most benefitted from low interest rates were, naturally, hit hardest in 2022 by the hikes. These include stocks, especially in the tech sector, and cryptocurrencies, amongst other risk assets.

“We expect as the program unwinds, which is likely to be in the second quarter of 2023, these will be the assets that will experience some of the biggest rallies.

“Although, the high-octane rush of previous rallies is unlikely, instead we will see a steadier, continued upward trajectory for Bitcoin when the unwind kicks off.

“Until then, many serious, long-term investors will be using the current lower valuations as a buying opportunity.”

Investors are starting to realize that, clearly, headwinds remain for economies around the world, but that some quality assets, like Bitcoin, are currently cheap. “Confidence is creeping back into the markets,” says Nigel Green.

He concludes: “One good thing about the hikes has been that as the sugar-rush of free money faded away, we could see the real value of assets.

“Despite coming down 70% from its hype and heat-fuelled November 2021 high, Bitcoin remains the best-performing asset class of the decade.”