Things That Make You Go Hmmm ...

I've mentioned the FIO protocol, and its associated token, before. While it hasn't been as widely adopted as I'd hoped just yet, it's a cool way of making cryptocurrency manageable. You get an FIO "name," and people can just send (via a number of wallets) any of several cryptocurrencies to that "name" instead of to a long crypto address (my FIO name is knappster@edge).

As for the token, it's not any kind of major investment/speculation vehicle so far as I can tell, but I do keep some on hand, and keep it "staked" to help with network liquidity, for which I earn "rewards" (about 10% APY).

The other day, I got a wallet alert on my phone that the token's value had gone up.

WAY up.

So far up that my $150 or so worth of staked FIO was now priced at more liked $9,000.

I didn't expect that to last, and my FIO balance, being staked, was not liquid (after unstaking, it can't be transferred for seven days).

Nonetheless, I did unstake that balance, thinking that perhaps seven days from now my $150 worth of FIO might still be worth, say, $1,000. Maybe there was some kind of big deal I hadn't heard about (e.g. one of the major exchanges adopting the protocol, or some big investor throwing in to improve, promote, etc.), meaning the surge was genuine, if way over-optimistic going forward.

In the minute or so it took me to do that, the price fell back down to where it usually is, and my $150 or so worth of FIO was worth $150 or so again.

The whole thing happened too quickly to feel like any kind of "pump and dump" operation or other scam.

Kind of weird.

Even weirder when you look at the token's price chart, which doesn't reflect the massive increase my wallet alerted me to.

So now I'm wondering what happened. Was there some kind of error in the price reporting mechanism? If so, where and why -- at the wallet level, on whatever trading platforms inform the wallet, etc.? Microsoft Copilot tried to educate me on "flash crashes," but just in general.

This is NOT Investment Advice, But It's How I "Buy The Dip"

Hypothetical Situation #1: You buy 1,000 shares of stock in Company A at a penny per share. The price rises to two cents per share. You sell your shares.

Hypothetical Situation #2: You buy 1,000 shares of stock in Company B at $100 per share. The price rises to $100.01 per share. You sell your shares.

In each case (excluding things like brokerage fees), you turned the same profit ... ten bucks. The difference is that in Hypothetical Situation #1 you risked $10 to earn $10, while in Hypothetical Situation #2 you risked $100k to earn $10.

I don't consider myself a cryptocurrency "investor" or "speculator" for the most part. I'm more interested in using cryptocurrency in commerce than I am in "buying low, selling high."

My usual version of "selling high" is that there's something I want to buy but I delay doing so until the US dollar price of whatever crypto I'm holding goes up versus the US dollar price I got it at such that my purchase leaves me with the same US dollar balance that I had at the former point.

But when Bitcoin takes a big price hit (as it has this last week for various reasons), I sometimes "buy the dip" by converting some of my BTC balance to a very-low-price cryptocurrency which has been falling as well, probably further/faster than BTC.

For example, yesterday I swapped about $50 worth of BTC (US dollar price $50-some-thousand per BTC) for about $50 worth of FIO (US dollar price about 2 cents per FIO). With swap fees, I think I paid about $52 worth of BTC for about $49 worth of FIO.

Over the next 30 days, I think it's a LOT more likely that FIO will double in price than that BTC will double in price (FIO was worth twice as much as it is now as recently as April; BTC has never been worth twice as much as it is now).

If FIO does about that well, I swap back and end up with a highter US dollar value in BTC than I had before. Not a huge amount of money, but not a huge amount at risk either.

I have secondary motives for picking FIO beyond it being very low in price.

One is that I like its purpose ("one identity for all your crypto"), which I've blogged about before.

Another is that in the past, I've done what I describe above and have ended up "making money." Not big money, but enough money for it to have been worth my time to mess around with it.

FIO Unstaking Thoughts

Over time, between February and a month or so ago, I "staked" a total of 7,280.12286 FIO tokens.

As of a few minutes ago, I had accrued 1,026.14344 FIO in "staking rewards."

I've never bothered to do the full accounting/math on the deal. If I had staked the entire amount at the same time in the beginning, the rewards would have amounted to a little over 14% "interest" in five months, which tracks with the predicted 30% per year.

I just "unstaked," so now I have 8,203.652733091 FIO in my wallet (current USD value: $467.39; current price per token, 5.7 cents US).  Those tokens are "locked" -- I can't sell or spend them -- until August 5.

How did I do, really? Well, I made 14% "interest" on a token that's going, at the moment, for about half of the average price I paid for it in the first place. So I've "lost money" in theory, but only in theory. I have as many tokens as I did before, plus "interest." That the tokens are worth more or less in some other currency than they were at some other time isn't that interesting to me, since I figure their value will, along with that of BTC, BCH, etc., recover and increase over time.

In USD terms, I figure I'm "down" between $100-150. But I would have been "down" by about the same amount over the same period of time and minus that "interest" if I'd held BTC or BCH instead of turning it into FIO and staking it.

So why unstake now?

No, I haven't stopped liking the FIO idea (use of "FIO names" -- mine is knappster@edge -- to make moving cryptocurrency easy with a single, easy to remember address for multiple currencies). While it's not perfect, it's a decent way of doing things.

I just figure I've done my bit to help that idea along and, with crypto starting to trend upward in USD price again, I might want to exchange or spend some at some point in the near future, so it's time to get more ... liquid. If crypto takes a shit again before I do something with my FIO balance, I may restake it instead of turning it into something else.