Tai Zen: This is Tai Zen. I’m broadcasting from Dallas, Texas. Today, I have the legendary LeonFu.com with me.
Leon Fu: Hey guys, how are you?
Tai Zen: We’re talking about one of the best market indexes that our team has created.
First of all, I want to give credit to our other partners. There are 3 of us on the team. We are the 3 founders of this channel. The other one’s name is David.
Sometimes you hear us talk about him. Sometimes you don’t. We are still pulling teeth to get him to come public, but he doesn’t care about that.
He’s a very badass trader and investor who focus heavily on the options and stock market as well as for cryptocurrencies.
Towards the end of this year, I think we may have to do an announcement and pull him out of the shadows.
Let’s get back and focus on this. David has finally allowed us to release the 2 new market indexes that we created. These are 2 very powerful tools to help us make better and more accurate cryptocurrency investing decisions.
If you want to follow what Leon and I are going to explain, please go to TaiFuindexes.com.
Firstly, Leon and I will explain to you why we created this index and how to use it to make better investment decisions.
I’m pulling it up myself here Leon. Do you want to explain to the audience what the Tai Fu 30 Crypto Market Index and Tai Fu 30 Altcoin Market Index?
Leon Fu: We already had the original Tai Fu 30 Crypto Market Index, which was just the 30 most valuable cryptocurrency of the market.
Because this is a market-weighted index and Bitcoin is still the most dominant cryptocurrency (up to about 50% of the total market share), most of our portfolio do not have more than 50% weighting in Bitcoin.
The only crypto investors who have more than 50% are the Bitcoin maximalists.
Leon Fu: We wanted an index that’s closer to what our portfolios look like, which is without Bitcoin. It doesn’t mean that we don’t have any Bitcoin. Bitcoin is certainly still a core position, but it’s not a dominant cryptocurrency in our portfolio because we don’t believe Bitcoin will remain the dominant cryptocurrency going forward.
Therefore, we created this index called the TaiFu 30 Altcoin Market Index, which is similar to the Tai Fu 30 Crypto Market Index except without Bitcoin or any fork of Bitcoin. That the reason why it also does not include Bitcoin cash.
This index is closer to like our portfolios would look like. We don’t necessarily have a 50% weighting in Ethereum.
Now, if you hadn’t been doing any kind of crypto investing, you probably have a position that has become 50% of your portfolio, not because you put 50%, but because it became 50% of your portfolio.
The first Altcoin that went up that much to be able to do that was Ethereum, so Ethreum still here and has a 49% weighting.
However, we wanted to track what the markets look like without Bitcoin since Bitcoin is not a dominant position in most of our portfolios here. That’s why we created this.
Tai Zen: I also want to just verify that it does not include the market cap of Bitcoin or any hard fork of Bitcoin such as Bitcoin Cash.
It does not include any derivative of Bitcoin that shares the same genesis block as the original Bitcoin that was created by Satoshi Nakamoto back in 2009.
I just want to make that clear in case someone like why other Bitcoins are included in the index, but then Bitcoin cash is not.
Leon Fu: When we consider the price of Bitcoin, we really consider Bitcoin plus all the baby Bitcoin.
Tai Zen: We will explain that in the second index we’re going to about.
Leon Fu: We decided to create a separate index for Bitcoins and Bitcoin derivative because Bitcoin is no longer just Bitcoin. Let’s segue into the second index.
Tai Zen: Okay. Before we segue into that, let’s talk about how crypto investors can use this to help them in their portfolio.
One way that I can think of is we can gauge our performance. Right. This Index started in June and David had to work out all the bugs out of it before we released it. Therefore, this is like a super alpha version.
The production version won’t come in until later at the end of this year or early in 2018 before we have a production-grade. We launched today so that people can start using it.
Right now, the Tai Fu 30 Altcoin index should be around like $72 million, but there’s a 24-hour delay before it gets updated. It gets updated every day at GMT 0 hours.
At the end of the year, if the TaiFu 30 Altcoin Market Index is up, let’s say, 1000% and our personal portfolios are up only 800%, that means we did not do as well as the Tai Fu 30 Altcoin Market index.
If the TaiFu 30 Altcoin Market Index is up, let’s say, 1000% and our personal portfolios are up to 2000%, that means we did significantly better.
It’s a parameter to measure the overall performance of your portfolio. This would be a consistent computer-generated number. The number represents billions.
Right now, it shows on the index 62.109. It’s up .03 within the last 24 hours. That means the market right now is at $62 billion market cap based on what shows there.
Keep in mind that we’re about 24 hours before it’s updated again, so it will show higher.
David is sending me a text to clarify that is updated and he says that it only includes the top 30 Altcoins among 800 and something Altcoins. That’s why it’s going to be slightly below what the actual market cap of all the Altcoins.
Leon Fu: That’s our goal.
Tai Zen: Do you want to explain to the audience why we only choose the top 30 biggest Altcoins on the market right now?
Leon Fu: Because the top 30 represent over 95% or better of the value of the entire crypto market.
Remember the intention is to measure the size of the overall market. That’s what we wanted these indexes to do.
Just Bitcoin and Ethereum and Bitcoin cash, which I considered just part of Bitcoin because it came from Bitcoin, are over 80% of the market.
Basically, we’ve captured a snapshot of the entire market at that given moment. The bottom thousand coins don’t really impact the overall market simply because they’re too small.
In other words, you only need 30 to measure the entire market. You don’t need all 1000 coins to get a good representation of the market.
Tai Zen: You brought up Bitcoin cash and Bitcoin several times. There was a good time to segue into the second index that we are going to release today. That is the Tai Fu 30 Bitcoin Aggregate Index, which we have nicknamed the Ma Bell Index.
If you go to TaiFuindex.com and click “indexes” at the top, it shows you the Tai Fu Bitcoin Ma Bell Aggregate Index.
We’ll explain what that is and how to use that as well in your folio. Do you want to first talk about what the Bitcoin Aggregate Index? Then, we can go into why we nicknamed it the Ma Bell Aggregate Index.
Leon Fu: On August 1st, a group of miners implemented a hard fork, which we call a Bitcoin cash. Everyone who held Bitcoin before August 1st now has to 2 Bitcoins: the original Bitcoin and Bitcoin cash because a group of miners didn’t agree with Bitcoin core.
This is similar to what happened with Ethereum and Ethereum Classic. In that case, the Ethereum Foundation decided to hard fork to reverse the DAO, while a group in the community of Ethereum decided that they did not believe in the hard fork and they continued with the original chain, which today is known as Ethereum Classic.
The reason we created this index is we don’t believe this is the last time this is going to happen. We believe that Bitcoin cash is the first of many hard forks that are coming in the future.
For example, there’s another hard fork, I think, coming in September or November. It’s the segregated witnesses. It’s the 2X Hard Fork, which they said that they were going to do segregated witness and then they were going to hard fork to 2MB blocks.
We believe that we’re going to have a lot of baby Bitcoins. Hence, we need the index Bitcoin Ma Bell.
For the name Ma Bell, in the 1990s, AT&T was broken up by the government into what we call the Baby Bells.
Tai Zen: AT&T is one of the largest phone companies in the United States. It provided almost of the phone service in the United States and Canada. They have a monopoly on it.
US government filed an anti-monopoly suit against them and they ended up winning. It caused AT&T to break up into multiple small companies called Baby Bells.
They all came from the same Bell company that originally was sued by the government. That is the reason why we call the Bitcoin Aggregate Index the Ma Bells index. It is simply because all these baby Bitcoins that are going to be growing and forking out of it.
Explain to the audience who are the Bitcoin maximalists why you do you think Bitcoin will have more hard forks in the future.
Leon Fu: Yes, it’s going to happen again because Bitcoin lacks any governance process.
When we say governance, we don’t mean government. We mean the process of how the decisions in the community are made.
That could be through the government. That is certainly one-way societies and communities organize themselves as they create a government, then the government makes decisions on behalf of the community.
Or it could be some kind of proposal mechanisms like Dash and some other coins are working on these different on-blockchain governance mechanisms.
Bitcoin does not have any such mechanism built into it or even any formal or informal agreement within the community. Every time there’s a disagreement within the community such as the one we’ve just seen, a hard fork is going to happen as long as enough people want to or disagree with the rest of the community.
There is nothing to stop them from forking the source code and creating a split in the chain. As long as they have enough users, miners, and exchanges that support that decision, we will see a fork of it. It’s already happened once with Bitcoin cash. It will happen again in our view multiple times.
Tai Zen: It’s extremely important for the audience to know that whenever we add a new Bitcoin to the Bitcoin Ma Bell Aggregate Index, it needs to share the same genesis block as the original Bitcoin Satoshi Nakamoto created.
Leon Fu: Let me go over that because people are confused about what the word fork means.
There are 2 kinds of forks where we call copycat. We used to call the Altcoins Copycat coin such as Litecoin was the first one that really gained the momentum was the first copycat coin.
A fork could mean they fork off of Bitcoin source code. They take the Bitcoin repository and Github. Then, they fork it and they create Litecoin or hundreds of these other forks of Bitcoin.
All of those Bitcoins are brand new chains. They started with a new genesis block. They’re not a continuation of the Bitcoin blockchain.
Now, Bitcoin Cash is different. It also forks from the original Bitcoin source code, but it keeps the same genesis block. Everything before that block number was forked shares the same history.
Litecoin does not share the same history. They restarted the from block zero and they created their new chain.
Then, people ask me why that important is. It’s important because if you own Bitcoin before that fork, you automatically get Bitcoin Cash. You don’t have to do anything. For Litecoin, you have to go by that. You don’t automatically have them.
That’s a very important distinction because one of the advantages I see from Bitcoin Cash is as long as you own Bitcoin, you automatically have it. You can send them to exchanges and sell them, but you have to take some kind of action to get rid of them. You own them until you make a conscious decision to sell it to somebody.
Whereas, in Litecoin, you have to actually give up some of your Bitcoins in order to get Litecoin here.
Therefore, we’re trying to track Bitcoin in this index because we want to track if you own the Bitcoin from the beginning or before any of the forks, how much is that Bitcoin is worth?
Was it worth the $4,400, where Bitcoin is today, plus the $600, where the Bitcoin Cash is? The total value of all the aggregate Bitcoin is $5000 because we have to add up every single Bitcoin that shares the same genesis block.
Tai Zen: This is something I wan to add to that. People are asking whether we are surprised that the sum of Bitcoin and Bitcoin cash is higher after the fork.
We are not surprised at all. The reason why we created the Tai Fu Bitcoin Aggregate Index is to measure what we believe is the true value of Bitcoin.
The true value of Bitcoin is not the $4,4000 as we’re speaking. It’s the $4,400 plus the $600 plus Bitcoin Cash, which makes the real value of Bitcoin over $5,000 per Bitcoin.
We wanted a tool that actually helps us to measure the combined total value of Bitcoin that mother Bitcoins plus all the baby Bitcoins are producing.
In case not from the US and English is your second language, mom means mother, so Ma Bell means the mother Bell Company, which in this case is the Bitcoin
Leon Fu: The other reason we believe that there’ll be more forks of Bitcoin is it was profitable as this genesis I have just mentioned. If it makes money, you can be pretty sure it’s not going to happen just once. It’s going to happen again and again until it doesn’t make money anymore.
Tai Zen: Here’s the disclaimer or the disclosure that we always have for all our videos. If you hear us talking about it, you can safely assume that we are investing in it.
Leon Fu: In the case of Bitcoin Cash, you are automatically investing in it as long as you own any Bitcoin before August 1st.
Tai Zen: We wouldn’t have built the index tool if we were not invested in it.
Let’s keep the questions related to these 2 indexes we’ve created and released to the public.
We’ll do a separate episode about it if you want to stick around for our second topic of Bitcoin cash. You’re welcome to stick around after this episode.
We’ve explained this to you about the TaiFu 30 Altcoin market indexes and the TaiFu Bitcoin Aggregate Indexes.
Now we’ll take a few minutes to take questions. Then, we’ll conclude those broadcasts. After that, we’ll come back on live again to do another video on a different topic.
“How many splits do you think it’s going to happen. I thought it just 1 more segwit 2x”.
No, I think we will have more because if there’s a profit potential to be made in the cryptocurrency world, you can expect that more people will do it.
Leon Fu: Let me add something about that, Tai.
Other projects have done airdrops before such as Stellar, Gigabyte, but once again, they didn’t do a hard fork from the Bitcoin blockchain.
You had to go claims it. You had to go to sign up on their website. You have to give them your facebook accounts or do something in order to get your free coins even if you didn’t have to buy them.
I expect that a better way to start a project is to just directly fork off of the Bitcoin blockchain because if your project gets any values, all the Bitcoin holders automatically get it.
That’s a very powerful way to draw people into your community whether they want to or not because if it’s really free money, people usually don’t want to give that away. They’ll take the time to go download your software and get their coins just like Bitcoin Cash.
We can see how good that was from a marketing perspective.
Tai Zen: You guys need to understand that people are not going to say no to free money. I’ve never met anyone that said no to free money. Number 2 is that if there’s an opportunity to make money, more people will do it.
The reason why we have such a huge influx of people into the cryptocurrency market right now is they’ve seen so many millionaires being created in the cryptocurrency market and many people like I and LeonFu.Com who have retired from investing cryptocurrencies.
What I’m going to do is I’m going to ask everyone to stop texting me so that I can show everyone how to navigate the site and get to the indexes real quick.
I’m going to do a quick screen share here. While we’re doing this, let me know when you can see my screen. Can you see my screen, Leon?
Leon Fu: I can.
Tai Zen: When you come and see these indexes, there are the broad market indexes on the home page. We are the first ones to create a cryptocurrency broad market index here.
If you know anyone did it before us, please let us know, so we can make sure that we have accurate information on this channel.
If you go here to index, you can see TaiFu 30 Altcoin Index and the TaiFu Bitcoin Aggregate Index. As we add more indexes to this, we will include those in that menu.
There are the Altcoin and a description of what the index is. What I like what David did here is he separates it clearly, so you can see what the components of the TaiFu 30 Altcoin market indexes.
I like it because he highlighted it in red or green to show which ones went up and went down. He also put the minus sign in there in case someone is color blind, they can still see it.
I like looking at this format because it’s nice and clean. There’s not too much clutter. The goal is to make these indexes as clean as possible for people to see it and understand it.
You can go to TaiFu Bitcoin Ma Bell Aggregate Index here. Something else I really liked that David did on this was he did an area graph right where he color-coded Bitcoin in blue and Bitcoin Cash in purple.
As soon as we have more baby Bitcoins that come from the original Satoshi Bitcoin from 2009 genesis, we’ll continue adding more on here.
Is there anything you want to add to that before I take it off the screen share, Leon?
Leon Fu: No, no, that was good.
Tai Zen: Okay. We will answer the last few questions here and then we’ll wrap up this episode here.
One of the questions was how someone can use this index.
Do you want to explain how they use it, Leon? Because I explained it earlier. Maybe you can explain it a different way.
Leon Fu: Which indexes is he referring to? Bitcoin or Altcoin?
Tai Zen: Both of them.
Leon Fu: Most of us are not heavily weighted into Bitcoin. We have a diversified portfolio of Altcoins. Therefore, we took that out and wanted an index to show what a portfolio without the Bitcoin would look like.
This gives you a benchmark for your own portfolio to so that you can measure how you’re doing it. This is a way for you to measure that. That’s how we use it.
One of the reasons we did this was the last rally that led to all-time height was led by Bitcoin and Bitcoin cash. The Bitcoin dominance index is back over 50% if you also add in Bitcoin cash.
For the Ma Bell Bitcoin index, we created that to track the overall value of Bitcoin because we believe that if we’re going to count how well Bitcoin is doing, we have to count Bitcoin and all the baby Bitcoins combined together.
If you own 1 Bitcoin, you’ve got a whole Bitcoin. Bitcoin is gold. We’ve got all Bitcoin. If you’re one of those investors, this index will more track what is the value of your Bitcoin because Bitcoin is not just 1 Bitcoin anymore.
We believe you will have a portfolio of all these baby Bitcoins that are coming.
Tai Zen: When you looked at the TaiFu Altcoin market index, it allows you to be able to get a glimpse of what your Altcoin portfolio should be doing or should not be doing.
I’ll use a real world example here. The way that we use all these indexes is to gauge performance. That’s the main reason.
There are 2 types of performances that we’re looking to gauge when we’re managing our portfolio. One is the size of the overall size of the market. The second is the overall size of the profit gain or the gain in profits.
For example, the Tai Fu 30 market cap was at the all-time heights back in July or June, at which the market cap was at $115 billion.
When it pulled back to $63 billion market cap, it was almost a 50% drop there. When we looked at our own personal portfolios, we saw only like a 20% or 30% drop. That means that we were able to manage a portfolio efficiently, so we don’t take the same drop-down as the market.
When the market shooted back up to where it is today, we look at that to see what the difference is from $115 billion to $155 billion.
Then, we ask ourselves if the market loses that amount, how much did our portfolio growth? If our portfolios roll exceeded what the markets did, that showed we were doing something. If it is matching with the broad market does, that’s also good.
What we want to avoid is where the Tai Fu Broad Market Index goes up 50% and our personal portfolios only go up 10%. That means that we’re not doing as well as what the market team.
Tai Zen: One asks whether it’s difficult to get Bitcoin cash out of Bitcoin paper wallet and whether you think the price is so high due to the technical difficulties to sell.
That could be one of the reasons, but the main reasons are there’s a demand for it. Even if it’s technically difficult for people to get the Bitcoin cash out an exchange and sell it, the fact that somebody wants to pay up to $1000 shows that the market has a demand for it.
Leon Fu: That’s a pretty accurate price in my opinion because of the volume and the diversity of exchanges that are trading.
Tai Zen: Jack brought a good point here, Leon and we’ll bring this up to our developer, David.
He says at the Ma bell index, the colors are too close. He’s color blind, so he really can’t see the difference between the Bitcoin Cash color and the Bitcoin color. Thanks for the feedback.
Lavera Design sees weekly charts at the bottom, so she asks whether we are planning to keep this via a full year or just for a few weeks.
Right now, it’s just for a few weeks. We’re working on the getting a team together to build out the production-grade, which means that we’ll have a similar to what trading view has. That is a place where you can track it, do technical analysis on it and everything. That won’t be out until I think later this year or the beginning of 2018.
One asks whether we think all of this is useless if the market has a huge crash.
It’s crashed 7 times already. It won’t matter. Even if it crashes, 90% of cryptocurrencies will still survive.
Tai Zen: If you’re new to cryptocurrencies, this may be your first crash.
For Leon and I, we’ve seen multiple crashes already and it’s still going up. Keep in mind cryptocurrency is the new technology. I mean even if the market crashes, it doesn’t matter because the technology is still going to move in advance and progress.
One asks whether we can publish the formula used to calculate the TaiFu indexes. We have a description of what it is.
As we go along, we explain that we’re just trying to get it out so people can start using it first. Once we get the production-grade indexes out, we’ll have more information.
“Coinbase is holding around 500,000 coins of Bitcoin cash. That will be a lot of supply in January”.
I guess he means that they’re going to release that Bitcoin cash to everyone in 2018. I don’t believe that it will matter even if they’re released for a day and it’s made public today.
There’s going to be a group of people that will sell to take profits and there’ll be a group of people that will hold onto it to increase in value.
What do you think, Leon?
Leon Fu: I think that if that information is known, what is the price then? Because as long as that information is widely distributed, it’s reflected in the price.
Tai Zen: Chucky asks whether we will make an Android index version of this. The answer is yes. We are working on all of that right now
I’ve been trying to convince LeonFu.com to make an iOS version of it since he is a software engineer and was the lead IOS developer for the Dell project that he was working on at Dell computers.
Then, he said to me that absolutely not. He said if he never has another line of code again, he will not be sad about it because he is investing into crypto investing so that he will never have to make another line of code again.
Therefore, we have to hire an outside software engineer to build it for us. That’s all the questions we have.
I want to say thank you to everyone for joining us on this live broadcast where we released the TaiFu 30 Altcoin Market Index and the TaiFu 30 Bitcoin Ma Bell Aggregate Index.
I hope that it helps you with your cryptocurrency investing and help you make better investment decisions as well as it did for us.
Look forward to the end of the year. There are a few more that we’re working on and we’ll get the kinks worked out.
If you are someone that understands how broad market indexes or have some thoughts on how we can make index is better, especially in the area of when to add a new coin and when to remove it, please contact us privately and we’ll be happy to consider your input a while building these indexes out.
Victor T asks whether we can create these TaiFu indexes special via an API, then someone else can create an app instead.
Yes. We are working on that all at the moment. There are like a thousand opportunities right now in the cryptocurrency market and we are busting our ass even though we’re supposed to be retired.
Thanks for joining us on this broadcast and we look forward to hearing you guys feedback from you guys.
If you like it, gives us a thumbs up. If you don’t like it, give us a thumbs down, so we’ll know not to waste time making more of these videos.
We look forward to seeing you in the next one.
I’m going to end this broadcast and we will start another live broadcast to go over another topic in cryptocurrency investing. Join us there.
Check out the TaiFu™ Indexes at https://taifuindexes.com/