Cardano’s Charles Hoskinson: “Preyed upon Elderly and Children?" Fake News!
- Cardano Founder in an exclusive interview on Japan, controversies, and the future of the project.
This is an excerpt. To hear the whole interview, click the Soundcloud and Youtube links.
However, not all of the buzz has been positive. By some accounts, ninety-five percent of buyers in Cardano’s ICO were of Japanese origin; conspiracy theories and accusations of foul play have arisen in relation to Cardano’s decision to establish itself in Japan. Additionally, Cardano has been named by some significant voices in crypto community as ‘vaporware.’
Recently, we spoke with Charles Hoskinson, Founder of Cardano, to ask for Cardano’s side of the story.
Why was Cardano AD marketed so specifically to Japanese investors? It’s estimated that 90 percent of ADA’s ICO buyers were of Japanese origin.
Hoskinson noted that this “Japanese bias” is due to the project’s origin, but also because of their sales strategy.
According to Hoskinson, there are three Asian crypto markets that “matter”: China, Japan and South Korea. Of these three, Cardano decided to focus on Japan, because it’s “the friendliest, most favorable, and [offers] the most long term growth”
Once Japan sales gained traction, they decided to postpone their plans for South Korea.
As for China, they decided to avoid it due to regulatory perils. Hoskinson noted that they feared that someone in the Chinese government would say “hey, maybe this Crypto thing is not such a great idea, let’s try to control it.”
As for European and US markets, Hoskinson said they considered it as a “secondary offering”.
Thanks to these tactics, the coin was at a whole different point when it was officially launched: ”It launched at around 700 million on Bittrex, and now the whole world is participating. We’re starting to see a churning of supply throughout.”
Moreover, they saved big money on taxes: “If you make a quick buck, you have to give more than half of it to the government. I think it’s better to wait a little bit to liquidate.”
Some other reports have emerged that as far as some of the marketing of ADA in Japan, that it was marketed as an “investment to retire on”. Do you know anything about that?
In response to this question, Charles acknowledged that he was aware of a wide variety of rumours and accusations of illicit activity and immoral marketing with regards to the Cardano ICO, including a story that “[Cardano] had people dressed up in panda suits to convince children to start gambling.”
He categorically denied that Cardano itself had any responsibility in any of the controversy surrounding the ICO, although he did not deny that such things may have taken place: “The reality was that the sale was done by other entities, not us. We didn’t write any of the marketing materials, and there were 1400 people involved in the sale. And guess what? You can cherry pick when you have 1400 people involved in something--at least one person is not gonna be a good person.”
Charles said that similar problems have affected Ripple and Ethereum, and that “this is an invasive, pervasive problem throughout the entire cryptocurrency space,” one that often casts the cryptos associated with this issue in a sinister light--accusations that Cardano “preyed upon the elderly, that this is a pump and dump, and that this is just a cash grab for people.”
He also provided some specific examples with regards to how Cardano took steps to protect ICO participants, saying that “everyone went through compliance.” He added that “less than five percent of the people who bought it [Cardano] were over the age of 65.”
Furthermore, Charles noted that Cardanos’ was “the only crowdsale that ever did consumer protection.” Participants in the Cardano ICO “could ask to have [their certificates that were vended in the month of March] backed up.”
“We did it because we cared,” he added.
He also spoke of Cardano’s ‘Help Desk’ tour of Japan, in which Cardano representatives went to different cities and taught people “how to install Daedalus [the Cardano wallet], how to redeem their ADA, and how to use the wallet, including how to use an exchange if they wanted to sell.”
Despite the efforts that Charles said that Cardano has taken to protect and educate users, there are still plenty of voices in the crypto community who are ready to through it under the bus: “there are some people in the cryptocurrency space, who privately have purposely, for competitive reasons, pushed these rumors and these allegations, amongst other things, out there.”
He continued, “It is bizarre. It is patronizing, it is insulting, it’s slander, and it has to stop. You can dislike the technology, you can dislike people, you can think I’m an asshole. Great, let’s have that conversation. But don’t say I defrauded people, and don’t say I defrauded the elderly. That’s wrong, and it’s slander.”
Another thing that Cardano has received criticism for is its association with Tadashi Izumi, who has been closely linked with the NoahCoin. NoahCoin has been criticized as a ‘scamcoin’. How do you respond to that?
When asked about Cardano’s relationship with Tidashi Izumi, Charles had some choice words: “He’s one of those 1400 distributors and I don’t have any business relationship with Izumi. He owns nothing at Emergo, nothing in the CF, nothing in IOHK. We don’t endorse NoahCoin, we don’t endorse any of his projects. He was an independent agent, working with 1400 other people. I disavow him, I want nothing to do with him. I don’t know the man.”
Charles acknowledged that he and Izumi may have been associated by happenstance: “I’ve sat in at a couple of seminars where I talked about the technology of Cardano, and we even had a contract saying no selling of ADA could be done at these seminars. Then somebody takes a picture of me with him, and then suddenly [Cardano is made up of] the worst people in the world.”
He cited the cryptosphere’s tendency to make assumptions based on the oversimplification of various pieces of informations as another pervasive problem within the industry: “They did the same thing to Vitalik [Buterin, creator of Ethereum], he was in a picture with Vladimir Putin, they said, ‘you were at a seminar and Putin was there, that must mean that Russia is backing Ethereum, and Russia is behind it, and Vitalik is a sellout to Russia.’”
On a more personal note, Charles added that he’s used to these “politics of personal destruction” because “he’s been dealing with it for a lot of years. However, he noted that he isn’t the only one affected by the various vitriolic accusations: ‘all you people who are doing that, know that you’re really pissing my mom off. You’re making her sad. She’s upset about that."
In the past there’s been a little bit of controversy about your decision to exit Ethereum and Lisk. How can Cardano investors be certain that you are here to stay as part of this project?
Charles said that the proof was in the pudding: “Well I’ve been here for 3 years already, they keep saying that I go away in 6 months, but I’ve kind of already gone past that threshold. The other thing is that I’ve stuck around at Ethereum Classic for damn over a year, putting my own money to build a client. We’ve just released the client, so we’ve honored that commitment.”
“I firmly believe that if I’m involved in something, it has to be worth my time, and it has to be worth the ecosystem’s time. If the ecosystem is paying me money, are they getting their money’s worth?,” he said, and explained that his decision to leave Lisk was essentially because he felt that he wasn’t useful there.
He added that ultimately, his contributions to Cardano and his future role in the cryptocurrency will be evaluated by the users: “the community will get to decide who Charles Hoskinson is, and the value that I provide to the ecosystem. As for my track record, I’ve taken a company from 2 people to 100 people. We operate in ten countries, we’ve written 70,000 lines of code, and we keep accelerating. We build great processes, we have three research centers (one at University of Edinburgh, One at Tokyo Tech, and one at University of Athens).”
We are thrilled to announce that we will be integrating Ledger hardware wallet in our Cardano ecosystem. This means users will be able to hold their Ada offline, through the convenient and highly secure means of cold storage. https://t.co/yzEazs5BTS
— Cardano Foundation (@CardanoStiftung) February 3, 2018
Charles said that he is happy with the work that he’s done so far: “[Cardano has] long-term relationships and commitments, very few people leave my company, and I’ve been very honest with who I am and what I do. I’m proud of my record. People wanna go and say that I leave every six months, it’s a lie. It just reflects poorly on them, not on me.”
Where do you see Cardano in a year?
On a technical level, Charles said that “In a year, [Cardano will be] fully decentralized, we have smart contracts. We have all those things you know and love, like lots of Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash. The most liquid asset of all is cash itself. · In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent varying degrees of liquidity. This can be differentiated as market liquidity or accounting liquidity.· Liquidity refers to a tangible construct that can be measures. The most common ways to do so include a current ratio, quick ratio, and cash ratio. What is the Definition of Liquidity? Liquidity is a common definition used in investing, banking, or the financial services space. Its primary function is to ascertain how quickly a given asset can be bought, sold, or exchanged without a disparity in market price. Which of the following assets is the most liquid? By definition, in terms of liquidity, cash is unequivocally seen as the most liquid asset in an economic sense. This is due to its widespread acceptance and ease of conversion into other assets, forms of cash, or currencies, etc. All other liquid assets must be able to be quickly and efficiently converted into cash, i.e., financial liquidity. This includes such things as stocks, commodities, or virtually any other construct that has an associated value. By extension, illiquid or non-liquid assets are not able to be quickly converted into cash. These assets, also known as tangible assets, can include such things as rare art or collectables, real estate, etc. Liquidity Spectrum Liquid assets can be defined primarily as either cash on hand or simply an asset that can be easily or readily converted into usable cash. It is important to note that cash is not uniformly liquid for several reasons. The below examples encompass all types of assets and their corresponding level of liquidity. Examples of Liquid Assets or Securities A good example of this is the US dollar, which is recognized or accepted globally, and backed by the US government or Federal Reserve Bank. Other major forms of cash include Euros, or major currencies. This differs notably from the legal tender in many emerging countries or others for political or economic reasons. Cash aside, assets such as stocks or equities, bonds and other securities, money market assets, marketable securities, US treasuries or T-notes, exchange-traded funds (ETFs), a savings account, and mutual funds serve as the most liquid assets. These are generally assumed to be quick assets. Each of these assets can be converted into cash either instantaneously, or via any brokerage platform, exchange, etc., often in as little as minutes or seconds. As such, these assets are liquid. Examples of Illiquid Assets or Securities Conversely, illiquid assets still retain importance and value, though are much more difficult to convert into cash. Common examples of this include land or real estate, intellectual property, or other forms of capital such as equipment or machinery. In the examples above, liquid assets are assumed to be convertible into cash without substantial fees or delays in time. Illiquid assets on the other hand often suffer from fees or additional conversion costs, processing times, ultimately creating a price disparity. The best example of an illiquid asset is a house. For many individuals this is the most valuable asset they will own in their entire lives. However, selling a house typically requires taxes, realtor fees, and other costs, in addition to time. Real estate or land also takes much longer to exchange into cash, relative to other assets. Types of Liquidity Overall, liquidity is a broad term that needs to be defined by two different measures: market liquidity and accounting liquidity. Both measures deal with different constructs or entities entirely, though are useful metrics with regards to individuals or financial markets. Market Liquidity Market liquidity is a broader term that is used by a market maker to measure the ease of which assets can be bought and sold at transparent prices, namely across exchanges, stock markets, or other financial sectors. This can include among others, a real estate or property market, market for fine arts and collectable, and other goods. Market Liquidity Example As mentioned above, certain financial markets are much more liquid than others. The degree to which stocks from large companies or foreign currencies can be exchanged is much easier than finding a readily available market for antiques, collectables, or other capital, regardless of utility. Overall, a stock market, financial brokerage, or exchange is considered to have the high market liquidity. This is because the difference between both the bid and ask prices between parties is very low. The lower the spread between these two prices, the more liquid a given market is. Additionally, low liquidity refers to a higher spread between two prices. Why Liquidity Varies and What Does Liquidity Mean in Stocks? Every asset has a variable level of liquidity meaning this can change depending on what is being analyzed. One can define liquidity in stocks or stock markets in the same way as in foreign exchange markets, brokers, commodities exchanges, and crypto exchanges. Additionally, how large the market is will also dictate liquidity. The foreign exchange market for example is currently the largest by trading volume with high liquidity due to cash flows. This is hardly surprising given that forms of cash or currencies are being exchanged. What is Liquidity in Stocks? A stock's liquidity refers to how rapidly shares of a stock can be bought or sold without largely impacting a stock price. By definition, liquidity in stocks varies for a number of reasons. Stocks with low liquidity may be difficult to sell and may cause you to take a bigger loss if you cannot sell the shares when you want to. In finance, the most liquid assets are always the most popular. By extension, if a spread between buyers and sellers increases, the market is considered to be less liquid. A good example of this is the real estate or property market. While highly valuable, there are large disparities between the purchase price and selling price of property, as well as the time associated in making these transactions, and additional fees incurred by other parties. Liquidity providers play a key role in this regard. Accounting Liquidity Unlike market liquidity, accounting liquidity measures something different entirely. Accounting liquidity is a measure by which either an individual or entity can meet their respective current financial obligations with the current liquid assets available to them. This includes paying off debts, overhead, or any other fixed costs associated with a business. Accounting liquidity is a functional comparison between one’s current liquid assets and their current liabilities. In the United States and other countries, companies and individuals have to reconcile accounting on a yearly basis. Accounting liquidity is an excellent measure that captures financial obligations due in a year. Accounting Liquidity Example Accounting liquidity itself can be differentiated by several ratios, controlling for how liquid assets are. These measures are useful tools for not just the individual or company in focus but for others that are trying to ascertain current financial health.As an example, accounting liquidity can measure any company’s current financial assets and compare them to its financial obligations. If there is a large disparity between these figures, or much more assets than obligations, a company can be considered to have a strong depth of liquidity.How to Calculate Liquidity Liquidity is of importance to investors, financial market participants, analysts, or even for an investment strategy. Calculating liquidity is a measure of firm or individual’s ability to utilize or harness current liquid assets to current cover short-term debt. This can be achieved using a total of four formulas: the current ratio, quick ratio, acid-test variation, and cash ratio. Current Ratio The current ratio is the easiest measure due to its lack of complexity. Quite simply, the current ratio measures a firm or individual’s current assets or those than can be sold within a calendar year, weighed against all current liabilities. Current Ratio = Current Assets/Current Liabilities If the current ratio’s value is greater than 1, then the entity in question can be assumed to reconcile its financial obligations using its current liquid assets. Highly liquid assets will correspond to higher numbers in this regard. Conversely, any number less than 1 indicates that current liquid assets are not enough to cover short-term obligations. Quick Ratio A quick ratio is a slightly more complex way of measuring accounting liquidity via a balance sheet. Unlike the current ratio, the quick ratio excludes current assets that are not as liquid as cash, cash equivalents, or other shorter-term investments. The quick ratio can be defined below by the following: Quick Ratio = (Cash or Cash Equivalents + Shorter-Term Investments + Accounts Receivable)/Current Liabilities Acid-Test Ratio The acid-test ratio is a variation of the quick ratio. The acid-test ratio seeks to deduct inventory from current assets, serving as a traditionally broader measure that is more forgiving to individuals or entities. Acid-Test Ratio = (Current Assets – Inventories – Prepaid Costs)/Current Liabilities Cash Ratio Finally, the cash ratio further isolates current assets, looking to measure only liquid assets that are designated as cash or cash equivalents. In this sense, the cash ratio is the most precise of the other liquidity ratios, excluding accounts receivable, inventories, or other assets. A more precise measure has its uses, namely regarding assessing financial strength in the face of an emergency, i.e., an unforeseen and time sensitive event. The cash ratio can help measure an entity or individual’s hypothesized solvency in the face of unexpected scenarios, events, etc. As such, the cash ratio is defined below: Cash Ratio = Cash and Cash Equivalents/Current Liabilities The cash ratio is not simply a doomsday tool but a highly practical measure when determining market value. In the financial services space, even large companies or profitable institutions can find themselves at liquidity risk due to unexpected events beyond their control. Why is Liquidity Important and Why it Matters to You? Liquidity is very important for not just financial markets but for individuals and investors. Liquid markets benefit all market participants and make it easier to buy and sell securities, stocks, collectables, etc. On an individual level, this is important for personal finance, as ordinary investors are able to better take advantage of trading opportunities. Additionally, high liquidity promotes financial health in companies in the same way it does for individuals. Conclusion – What Does Liquidity Mean? What is liquidity? This metric is a commonly used as a measure in the investing, banking, or financial services space. Liquidity determines how quickly a given asset can be bought, sold, or exchanged without a disparity in market price. Which of the following assets is the most liquid? – cash, stocks, real estate. Of all assets, cash or money is the most liquid, meaning it is the easiest to utilize. All other liquid assets must be able to be quickly and efficiently converted into cash. This includes such things as stocks, commodities, or virtually any other construct that has an associated value. Conversely, illiquid or non-liquid assets are not able to be quickly converted into cash. These assets, also known as tangible assets, can include such things as rare art or collectables, real estate, etc. Frequently Asked Questions About Liquidity Is Liquidity Good or Bad? The term liquidity refers to a measure and is neither good nor bad but is instead a metric of how convertible an asset is to cash. However, high liquidity is associated with lower risk, while a liquid stock is more likely to keep its value when being traded.Is a Home a Liquid Asset? A home or properly is not considered to be a liquid asset. Selling any property can incur additional costs and take a long amount of time. Additionally, there is often a price disparity from the time of purchase, meaning a seller may not even get its original market value back at the time of the sale. Why Are Stocks Liquid? Stocks are some of the most liquid assets in financial markets because these assets can be converted to cash in a short period of time in the event of any financial emergency. Is Tesla a Liquid Stock? Tesla is a liquid stock and while hugely volatile, is an integral part of the NASDAQ and is a globally recognized company. Additionally, the company is a popular single-stock CFD offering at many brokerages, with very high volumes. Is a Pension a Liquid Asset? Certain pensions are liquid assets once you have reached a retirement age. Until you are eligible to withdraw or collect a pension, without early withdrawal penalty, it is not considered a liquid asset. The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash. The most liquid asset of all is cash itself. · In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent varying degrees of liquidity. This can be differentiated as market liquidity or accounting liquidity.· Liquidity refers to a tangible construct that can be measures. The most common ways to do so include a current ratio, quick ratio, and cash ratio. What is the Definition of Liquidity? Liquidity is a common definition used in investing, banking, or the financial services space. Its primary function is to ascertain how quickly a given asset can be bought, sold, or exchanged without a disparity in market price. Which of the following assets is the most liquid? By definition, in terms of liquidity, cash is unequivocally seen as the most liquid asset in an economic sense. This is due to its widespread acceptance and ease of conversion into other assets, forms of cash, or currencies, etc. All other liquid assets must be able to be quickly and efficiently converted into cash, i.e., financial liquidity. This includes such things as stocks, commodities, or virtually any other construct that has an associated value. By extension, illiquid or non-liquid assets are not able to be quickly converted into cash. These assets, also known as tangible assets, can include such things as rare art or collectables, real estate, etc. Liquidity Spectrum Liquid assets can be defined primarily as either cash on hand or simply an asset that can be easily or readily converted into usable cash. It is important to note that cash is not uniformly liquid for several reasons. The below examples encompass all types of assets and their corresponding level of liquidity. Examples of Liquid Assets or Securities A good example of this is the US dollar, which is recognized or accepted globally, and backed by the US government or Federal Reserve Bank. Other major forms of cash include Euros, or major currencies. This differs notably from the legal tender in many emerging countries or others for political or economic reasons. Cash aside, assets such as stocks or equities, bonds and other securities, money market assets, marketable securities, US treasuries or T-notes, exchange-traded funds (ETFs), a savings account, and mutual funds serve as the most liquid assets. These are generally assumed to be quick assets. Each of these assets can be converted into cash either instantaneously, or via any brokerage platform, exchange, etc., often in as little as minutes or seconds. As such, these assets are liquid. Examples of Illiquid Assets or Securities Conversely, illiquid assets still retain importance and value, though are much more difficult to convert into cash. Common examples of this include land or real estate, intellectual property, or other forms of capital such as equipment or machinery. In the examples above, liquid assets are assumed to be convertible into cash without substantial fees or delays in time. Illiquid assets on the other hand often suffer from fees or additional conversion costs, processing times, ultimately creating a price disparity. The best example of an illiquid asset is a house. For many individuals this is the most valuable asset they will own in their entire lives. However, selling a house typically requires taxes, realtor fees, and other costs, in addition to time. Real estate or land also takes much longer to exchange into cash, relative to other assets. Types of Liquidity Overall, liquidity is a broad term that needs to be defined by two different measures: market liquidity and accounting liquidity. Both measures deal with different constructs or entities entirely, though are useful metrics with regards to individuals or financial markets. Market Liquidity Market liquidity is a broader term that is used by a market maker to measure the ease of which assets can be bought and sold at transparent prices, namely across exchanges, stock markets, or other financial sectors. This can include among others, a real estate or property market, market for fine arts and collectable, and other goods. Market Liquidity Example As mentioned above, certain financial markets are much more liquid than others. The degree to which stocks from large companies or foreign currencies can be exchanged is much easier than finding a readily available market for antiques, collectables, or other capital, regardless of utility. Overall, a stock market, financial brokerage, or exchange is considered to have the high market liquidity. This is because the difference between both the bid and ask prices between parties is very low. The lower the spread between these two prices, the more liquid a given market is. Additionally, low liquidity refers to a higher spread between two prices. Why Liquidity Varies and What Does Liquidity Mean in Stocks? Every asset has a variable level of liquidity meaning this can change depending on what is being analyzed. One can define liquidity in stocks or stock markets in the same way as in foreign exchange markets, brokers, commodities exchanges, and crypto exchanges. Additionally, how large the market is will also dictate liquidity. The foreign exchange market for example is currently the largest by trading volume with high liquidity due to cash flows. This is hardly surprising given that forms of cash or currencies are being exchanged. What is Liquidity in Stocks? A stock's liquidity refers to how rapidly shares of a stock can be bought or sold without largely impacting a stock price. By definition, liquidity in stocks varies for a number of reasons. Stocks with low liquidity may be difficult to sell and may cause you to take a bigger loss if you cannot sell the shares when you want to. In finance, the most liquid assets are always the most popular. By extension, if a spread between buyers and sellers increases, the market is considered to be less liquid. A good example of this is the real estate or property market. While highly valuable, there are large disparities between the purchase price and selling price of property, as well as the time associated in making these transactions, and additional fees incurred by other parties. Liquidity providers play a key role in this regard. Accounting Liquidity Unlike market liquidity, accounting liquidity measures something different entirely. Accounting liquidity is a measure by which either an individual or entity can meet their respective current financial obligations with the current liquid assets available to them. This includes paying off debts, overhead, or any other fixed costs associated with a business. Accounting liquidity is a functional comparison between one’s current liquid assets and their current liabilities. In the United States and other countries, companies and individuals have to reconcile accounting on a yearly basis. Accounting liquidity is an excellent measure that captures financial obligations due in a year. Accounting Liquidity Example Accounting liquidity itself can be differentiated by several ratios, controlling for how liquid assets are. These measures are useful tools for not just the individual or company in focus but for others that are trying to ascertain current financial health.As an example, accounting liquidity can measure any company’s current financial assets and compare them to its financial obligations. If there is a large disparity between these figures, or much more assets than obligations, a company can be considered to have a strong depth of liquidity.How to Calculate Liquidity Liquidity is of importance to investors, financial market participants, analysts, or even for an investment strategy. Calculating liquidity is a measure of firm or individual’s ability to utilize or harness current liquid assets to current cover short-term debt. This can be achieved using a total of four formulas: the current ratio, quick ratio, acid-test variation, and cash ratio. Current Ratio The current ratio is the easiest measure due to its lack of complexity. Quite simply, the current ratio measures a firm or individual’s current assets or those than can be sold within a calendar year, weighed against all current liabilities. Current Ratio = Current Assets/Current Liabilities If the current ratio’s value is greater than 1, then the entity in question can be assumed to reconcile its financial obligations using its current liquid assets. Highly liquid assets will correspond to higher numbers in this regard. Conversely, any number less than 1 indicates that current liquid assets are not enough to cover short-term obligations. Quick Ratio A quick ratio is a slightly more complex way of measuring accounting liquidity via a balance sheet. Unlike the current ratio, the quick ratio excludes current assets that are not as liquid as cash, cash equivalents, or other shorter-term investments. The quick ratio can be defined below by the following: Quick Ratio = (Cash or Cash Equivalents + Shorter-Term Investments + Accounts Receivable)/Current Liabilities Acid-Test Ratio The acid-test ratio is a variation of the quick ratio. The acid-test ratio seeks to deduct inventory from current assets, serving as a traditionally broader measure that is more forgiving to individuals or entities. Acid-Test Ratio = (Current Assets – Inventories – Prepaid Costs)/Current Liabilities Cash Ratio Finally, the cash ratio further isolates current assets, looking to measure only liquid assets that are designated as cash or cash equivalents. In this sense, the cash ratio is the most precise of the other liquidity ratios, excluding accounts receivable, inventories, or other assets. A more precise measure has its uses, namely regarding assessing financial strength in the face of an emergency, i.e., an unforeseen and time sensitive event. The cash ratio can help measure an entity or individual’s hypothesized solvency in the face of unexpected scenarios, events, etc. As such, the cash ratio is defined below: Cash Ratio = Cash and Cash Equivalents/Current Liabilities The cash ratio is not simply a doomsday tool but a highly practical measure when determining market value. In the financial services space, even large companies or profitable institutions can find themselves at liquidity risk due to unexpected events beyond their control. Why is Liquidity Important and Why it Matters to You? Liquidity is very important for not just financial markets but for individuals and investors. Liquid markets benefit all market participants and make it easier to buy and sell securities, stocks, collectables, etc. On an individual level, this is important for personal finance, as ordinary investors are able to better take advantage of trading opportunities. Additionally, high liquidity promotes financial health in companies in the same way it does for individuals. Conclusion – What Does Liquidity Mean? What is liquidity? This metric is a commonly used as a measure in the investing, banking, or financial services space. Liquidity determines how quickly a given asset can be bought, sold, or exchanged without a disparity in market price. Which of the following assets is the most liquid? – cash, stocks, real estate. Of all assets, cash or money is the most liquid, meaning it is the easiest to utilize. All other liquid assets must be able to be quickly and efficiently converted into cash. This includes such things as stocks, commodities, or virtually any other construct that has an associated value. Conversely, illiquid or non-liquid assets are not able to be quickly converted into cash. These assets, also known as tangible assets, can include such things as rare art or collectables, real estate, etc. Frequently Asked Questions About Liquidity Is Liquidity Good or Bad? The term liquidity refers to a measure and is neither good nor bad but is instead a metric of how convertible an asset is to cash. However, high liquidity is associated with lower risk, while a liquid stock is more likely to keep its value when being traded.Is a Home a Liquid Asset? A home or properly is not considered to be a liquid asset. Selling any property can incur additional costs and take a long amount of time. Additionally, there is often a price disparity from the time of purchase, meaning a seller may not even get its original market value back at the time of the sale. Why Are Stocks Liquid? Stocks are some of the most liquid assets in financial markets because these assets can be converted to cash in a short period of time in the event of any financial emergency. Is Tesla a Liquid Stock? Tesla is a liquid stock and while hugely volatile, is an integral part of the NASDAQ and is a globally recognized company. Additionally, the company is a popular single-stock CFD offering at many brokerages, with very high volumes. Is a Pension a Liquid Asset? Certain pensions are liquid assets once you have reached a retirement age. Until you are eligible to withdraw or collect a pension, without early withdrawal penalty, it is not considered a liquid asset. Read this Term, multisig paper wallets, hardware wallets support, delegation where it needs to be. We have some voting stuff built into it. Within a year we’ll have mobile clients as well, so they’ll be running on cell phones.”
Changing the world takes endurance, pain and hard work. Market corrections shake off weak hands and harden the resolve of the truly dedicated to continue the drudgery. Crypto isn't dead. It's just getting started.
— Charles Hoskinson (@IOHK_Charles) February 5, 2018
He also explained that the next year is about expanding the usage of Cardano, and taking it beyond Proof-of-Concept: “Next year is all about getting enterprise adoption where it needs to be, the next year’s all about sharding, and getting us from being a system that runs really well with 10,000s to 100,000s, to a system that works well with the millions and the billions...we’ve got a lot of documentation to write, a lot of code to clean up, a lot of partners to bring onboard.”
Charles said that one of the project’s goals is to “get the project done… making it so if I was hit with a bus, Cardano would still be okay, and I can be easily replaced, and so forth.”
“We’ll also be able to--pound-for-pound--compete with Ethereum and Bitcoin. If we get all of that done in a year, then I think that’s mission accomplished.”
This is an excerpt. To hear the whole interview, click the Soundcloud and Youtube links.
However, not all of the buzz has been positive. By some accounts, ninety-five percent of buyers in Cardano’s ICO were of Japanese origin; conspiracy theories and accusations of foul play have arisen in relation to Cardano’s decision to establish itself in Japan. Additionally, Cardano has been named by some significant voices in crypto community as ‘vaporware.’
Recently, we spoke with Charles Hoskinson, Founder of Cardano, to ask for Cardano’s side of the story.
Why was Cardano AD marketed so specifically to Japanese investors? It’s estimated that 90 percent of ADA’s ICO buyers were of Japanese origin.
Hoskinson noted that this “Japanese bias” is due to the project’s origin, but also because of their sales strategy.
According to Hoskinson, there are three Asian crypto markets that “matter”: China, Japan and South Korea. Of these three, Cardano decided to focus on Japan, because it’s “the friendliest, most favorable, and [offers] the most long term growth”
Once Japan sales gained traction, they decided to postpone their plans for South Korea.
As for China, they decided to avoid it due to regulatory perils. Hoskinson noted that they feared that someone in the Chinese government would say “hey, maybe this Crypto thing is not such a great idea, let’s try to control it.”
As for European and US markets, Hoskinson said they considered it as a “secondary offering”.
Thanks to these tactics, the coin was at a whole different point when it was officially launched: ”It launched at around 700 million on Bittrex, and now the whole world is participating. We’re starting to see a churning of supply throughout.”
Moreover, they saved big money on taxes: “If you make a quick buck, you have to give more than half of it to the government. I think it’s better to wait a little bit to liquidate.”
Some other reports have emerged that as far as some of the marketing of ADA in Japan, that it was marketed as an “investment to retire on”. Do you know anything about that?
In response to this question, Charles acknowledged that he was aware of a wide variety of rumours and accusations of illicit activity and immoral marketing with regards to the Cardano ICO, including a story that “[Cardano] had people dressed up in panda suits to convince children to start gambling.”
He categorically denied that Cardano itself had any responsibility in any of the controversy surrounding the ICO, although he did not deny that such things may have taken place: “The reality was that the sale was done by other entities, not us. We didn’t write any of the marketing materials, and there were 1400 people involved in the sale. And guess what? You can cherry pick when you have 1400 people involved in something--at least one person is not gonna be a good person.”
Charles said that similar problems have affected Ripple and Ethereum, and that “this is an invasive, pervasive problem throughout the entire cryptocurrency space,” one that often casts the cryptos associated with this issue in a sinister light--accusations that Cardano “preyed upon the elderly, that this is a pump and dump, and that this is just a cash grab for people.”
He also provided some specific examples with regards to how Cardano took steps to protect ICO participants, saying that “everyone went through compliance.” He added that “less than five percent of the people who bought it [Cardano] were over the age of 65.”
Furthermore, Charles noted that Cardanos’ was “the only crowdsale that ever did consumer protection.” Participants in the Cardano ICO “could ask to have [their certificates that were vended in the month of March] backed up.”
“We did it because we cared,” he added.
He also spoke of Cardano’s ‘Help Desk’ tour of Japan, in which Cardano representatives went to different cities and taught people “how to install Daedalus [the Cardano wallet], how to redeem their ADA, and how to use the wallet, including how to use an exchange if they wanted to sell.”
Despite the efforts that Charles said that Cardano has taken to protect and educate users, there are still plenty of voices in the crypto community who are ready to through it under the bus: “there are some people in the cryptocurrency space, who privately have purposely, for competitive reasons, pushed these rumors and these allegations, amongst other things, out there.”
He continued, “It is bizarre. It is patronizing, it is insulting, it’s slander, and it has to stop. You can dislike the technology, you can dislike people, you can think I’m an asshole. Great, let’s have that conversation. But don’t say I defrauded people, and don’t say I defrauded the elderly. That’s wrong, and it’s slander.”
Another thing that Cardano has received criticism for is its association with Tadashi Izumi, who has been closely linked with the NoahCoin. NoahCoin has been criticized as a ‘scamcoin’. How do you respond to that?
When asked about Cardano’s relationship with Tidashi Izumi, Charles had some choice words: “He’s one of those 1400 distributors and I don’t have any business relationship with Izumi. He owns nothing at Emergo, nothing in the CF, nothing in IOHK. We don’t endorse NoahCoin, we don’t endorse any of his projects. He was an independent agent, working with 1400 other people. I disavow him, I want nothing to do with him. I don’t know the man.”
Charles acknowledged that he and Izumi may have been associated by happenstance: “I’ve sat in at a couple of seminars where I talked about the technology of Cardano, and we even had a contract saying no selling of ADA could be done at these seminars. Then somebody takes a picture of me with him, and then suddenly [Cardano is made up of] the worst people in the world.”
He cited the cryptosphere’s tendency to make assumptions based on the oversimplification of various pieces of informations as another pervasive problem within the industry: “They did the same thing to Vitalik [Buterin, creator of Ethereum], he was in a picture with Vladimir Putin, they said, ‘you were at a seminar and Putin was there, that must mean that Russia is backing Ethereum, and Russia is behind it, and Vitalik is a sellout to Russia.’”
On a more personal note, Charles added that he’s used to these “politics of personal destruction” because “he’s been dealing with it for a lot of years. However, he noted that he isn’t the only one affected by the various vitriolic accusations: ‘all you people who are doing that, know that you’re really pissing my mom off. You’re making her sad. She’s upset about that."
In the past there’s been a little bit of controversy about your decision to exit Ethereum and Lisk. How can Cardano investors be certain that you are here to stay as part of this project?
Charles said that the proof was in the pudding: “Well I’ve been here for 3 years already, they keep saying that I go away in 6 months, but I’ve kind of already gone past that threshold. The other thing is that I’ve stuck around at Ethereum Classic for damn over a year, putting my own money to build a client. We’ve just released the client, so we’ve honored that commitment.”
“I firmly believe that if I’m involved in something, it has to be worth my time, and it has to be worth the ecosystem’s time. If the ecosystem is paying me money, are they getting their money’s worth?,” he said, and explained that his decision to leave Lisk was essentially because he felt that he wasn’t useful there.
He added that ultimately, his contributions to Cardano and his future role in the cryptocurrency will be evaluated by the users: “the community will get to decide who Charles Hoskinson is, and the value that I provide to the ecosystem. As for my track record, I’ve taken a company from 2 people to 100 people. We operate in ten countries, we’ve written 70,000 lines of code, and we keep accelerating. We build great processes, we have three research centers (one at University of Edinburgh, One at Tokyo Tech, and one at University of Athens).”
We are thrilled to announce that we will be integrating Ledger hardware wallet in our Cardano ecosystem. This means users will be able to hold their Ada offline, through the convenient and highly secure means of cold storage. https://t.co/yzEazs5BTS
— Cardano Foundation (@CardanoStiftung) February 3, 2018
Charles said that he is happy with the work that he’s done so far: “[Cardano has] long-term relationships and commitments, very few people leave my company, and I’ve been very honest with who I am and what I do. I’m proud of my record. People wanna go and say that I leave every six months, it’s a lie. It just reflects poorly on them, not on me.”
Where do you see Cardano in a year?
On a technical level, Charles said that “In a year, [Cardano will be] fully decentralized, we have smart contracts. We have all those things you know and love, like lots of Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash. The most liquid asset of all is cash itself. · In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent varying degrees of liquidity. This can be differentiated as market liquidity or accounting liquidity.· Liquidity refers to a tangible construct that can be measures. The most common ways to do so include a current ratio, quick ratio, and cash ratio. What is the Definition of Liquidity? Liquidity is a common definition used in investing, banking, or the financial services space. Its primary function is to ascertain how quickly a given asset can be bought, sold, or exchanged without a disparity in market price. Which of the following assets is the most liquid? By definition, in terms of liquidity, cash is unequivocally seen as the most liquid asset in an economic sense. This is due to its widespread acceptance and ease of conversion into other assets, forms of cash, or currencies, etc. All other liquid assets must be able to be quickly and efficiently converted into cash, i.e., financial liquidity. This includes such things as stocks, commodities, or virtually any other construct that has an associated value. By extension, illiquid or non-liquid assets are not able to be quickly converted into cash. These assets, also known as tangible assets, can include such things as rare art or collectables, real estate, etc. Liquidity Spectrum Liquid assets can be defined primarily as either cash on hand or simply an asset that can be easily or readily converted into usable cash. It is important to note that cash is not uniformly liquid for several reasons. The below examples encompass all types of assets and their corresponding level of liquidity. Examples of Liquid Assets or Securities A good example of this is the US dollar, which is recognized or accepted globally, and backed by the US government or Federal Reserve Bank. Other major forms of cash include Euros, or major currencies. This differs notably from the legal tender in many emerging countries or others for political or economic reasons. Cash aside, assets such as stocks or equities, bonds and other securities, money market assets, marketable securities, US treasuries or T-notes, exchange-traded funds (ETFs), a savings account, and mutual funds serve as the most liquid assets. These are generally assumed to be quick assets. Each of these assets can be converted into cash either instantaneously, or via any brokerage platform, exchange, etc., often in as little as minutes or seconds. As such, these assets are liquid. Examples of Illiquid Assets or Securities Conversely, illiquid assets still retain importance and value, though are much more difficult to convert into cash. Common examples of this include land or real estate, intellectual property, or other forms of capital such as equipment or machinery. In the examples above, liquid assets are assumed to be convertible into cash without substantial fees or delays in time. Illiquid assets on the other hand often suffer from fees or additional conversion costs, processing times, ultimately creating a price disparity. The best example of an illiquid asset is a house. For many individuals this is the most valuable asset they will own in their entire lives. However, selling a house typically requires taxes, realtor fees, and other costs, in addition to time. Real estate or land also takes much longer to exchange into cash, relative to other assets. Types of Liquidity Overall, liquidity is a broad term that needs to be defined by two different measures: market liquidity and accounting liquidity. Both measures deal with different constructs or entities entirely, though are useful metrics with regards to individuals or financial markets. Market Liquidity Market liquidity is a broader term that is used by a market maker to measure the ease of which assets can be bought and sold at transparent prices, namely across exchanges, stock markets, or other financial sectors. This can include among others, a real estate or property market, market for fine arts and collectable, and other goods. Market Liquidity Example As mentioned above, certain financial markets are much more liquid than others. The degree to which stocks from large companies or foreign currencies can be exchanged is much easier than finding a readily available market for antiques, collectables, or other capital, regardless of utility. Overall, a stock market, financial brokerage, or exchange is considered to have the high market liquidity. This is because the difference between both the bid and ask prices between parties is very low. The lower the spread between these two prices, the more liquid a given market is. Additionally, low liquidity refers to a higher spread between two prices. Why Liquidity Varies and What Does Liquidity Mean in Stocks? Every asset has a variable level of liquidity meaning this can change depending on what is being analyzed. One can define liquidity in stocks or stock markets in the same way as in foreign exchange markets, brokers, commodities exchanges, and crypto exchanges. Additionally, how large the market is will also dictate liquidity. The foreign exchange market for example is currently the largest by trading volume with high liquidity due to cash flows. This is hardly surprising given that forms of cash or currencies are being exchanged. What is Liquidity in Stocks? A stock's liquidity refers to how rapidly shares of a stock can be bought or sold without largely impacting a stock price. By definition, liquidity in stocks varies for a number of reasons. Stocks with low liquidity may be difficult to sell and may cause you to take a bigger loss if you cannot sell the shares when you want to. In finance, the most liquid assets are always the most popular. By extension, if a spread between buyers and sellers increases, the market is considered to be less liquid. A good example of this is the real estate or property market. While highly valuable, there are large disparities between the purchase price and selling price of property, as well as the time associated in making these transactions, and additional fees incurred by other parties. Liquidity providers play a key role in this regard. Accounting Liquidity Unlike market liquidity, accounting liquidity measures something different entirely. Accounting liquidity is a measure by which either an individual or entity can meet their respective current financial obligations with the current liquid assets available to them. This includes paying off debts, overhead, or any other fixed costs associated with a business. Accounting liquidity is a functional comparison between one’s current liquid assets and their current liabilities. In the United States and other countries, companies and individuals have to reconcile accounting on a yearly basis. Accounting liquidity is an excellent measure that captures financial obligations due in a year. Accounting Liquidity Example Accounting liquidity itself can be differentiated by several ratios, controlling for how liquid assets are. These measures are useful tools for not just the individual or company in focus but for others that are trying to ascertain current financial health.As an example, accounting liquidity can measure any company’s current financial assets and compare them to its financial obligations. If there is a large disparity between these figures, or much more assets than obligations, a company can be considered to have a strong depth of liquidity.How to Calculate Liquidity Liquidity is of importance to investors, financial market participants, analysts, or even for an investment strategy. Calculating liquidity is a measure of firm or individual’s ability to utilize or harness current liquid assets to current cover short-term debt. This can be achieved using a total of four formulas: the current ratio, quick ratio, acid-test variation, and cash ratio. Current Ratio The current ratio is the easiest measure due to its lack of complexity. Quite simply, the current ratio measures a firm or individual’s current assets or those than can be sold within a calendar year, weighed against all current liabilities. Current Ratio = Current Assets/Current Liabilities If the current ratio’s value is greater than 1, then the entity in question can be assumed to reconcile its financial obligations using its current liquid assets. Highly liquid assets will correspond to higher numbers in this regard. Conversely, any number less than 1 indicates that current liquid assets are not enough to cover short-term obligations. Quick Ratio A quick ratio is a slightly more complex way of measuring accounting liquidity via a balance sheet. Unlike the current ratio, the quick ratio excludes current assets that are not as liquid as cash, cash equivalents, or other shorter-term investments. The quick ratio can be defined below by the following: Quick Ratio = (Cash or Cash Equivalents + Shorter-Term Investments + Accounts Receivable)/Current Liabilities Acid-Test Ratio The acid-test ratio is a variation of the quick ratio. The acid-test ratio seeks to deduct inventory from current assets, serving as a traditionally broader measure that is more forgiving to individuals or entities. Acid-Test Ratio = (Current Assets – Inventories – Prepaid Costs)/Current Liabilities Cash Ratio Finally, the cash ratio further isolates current assets, looking to measure only liquid assets that are designated as cash or cash equivalents. In this sense, the cash ratio is the most precise of the other liquidity ratios, excluding accounts receivable, inventories, or other assets. A more precise measure has its uses, namely regarding assessing financial strength in the face of an emergency, i.e., an unforeseen and time sensitive event. The cash ratio can help measure an entity or individual’s hypothesized solvency in the face of unexpected scenarios, events, etc. As such, the cash ratio is defined below: Cash Ratio = Cash and Cash Equivalents/Current Liabilities The cash ratio is not simply a doomsday tool but a highly practical measure when determining market value. In the financial services space, even large companies or profitable institutions can find themselves at liquidity risk due to unexpected events beyond their control. Why is Liquidity Important and Why it Matters to You? Liquidity is very important for not just financial markets but for individuals and investors. Liquid markets benefit all market participants and make it easier to buy and sell securities, stocks, collectables, etc. On an individual level, this is important for personal finance, as ordinary investors are able to better take advantage of trading opportunities. Additionally, high liquidity promotes financial health in companies in the same way it does for individuals. Conclusion – What Does Liquidity Mean? What is liquidity? This metric is a commonly used as a measure in the investing, banking, or financial services space. Liquidity determines how quickly a given asset can be bought, sold, or exchanged without a disparity in market price. Which of the following assets is the most liquid? – cash, stocks, real estate. Of all assets, cash or money is the most liquid, meaning it is the easiest to utilize. All other liquid assets must be able to be quickly and efficiently converted into cash. This includes such things as stocks, commodities, or virtually any other construct that has an associated value. Conversely, illiquid or non-liquid assets are not able to be quickly converted into cash. These assets, also known as tangible assets, can include such things as rare art or collectables, real estate, etc. Frequently Asked Questions About Liquidity Is Liquidity Good or Bad? The term liquidity refers to a measure and is neither good nor bad but is instead a metric of how convertible an asset is to cash. However, high liquidity is associated with lower risk, while a liquid stock is more likely to keep its value when being traded.Is a Home a Liquid Asset? A home or properly is not considered to be a liquid asset. Selling any property can incur additional costs and take a long amount of time. Additionally, there is often a price disparity from the time of purchase, meaning a seller may not even get its original market value back at the time of the sale. Why Are Stocks Liquid? Stocks are some of the most liquid assets in financial markets because these assets can be converted to cash in a short period of time in the event of any financial emergency. Is Tesla a Liquid Stock? Tesla is a liquid stock and while hugely volatile, is an integral part of the NASDAQ and is a globally recognized company. Additionally, the company is a popular single-stock CFD offering at many brokerages, with very high volumes. Is a Pension a Liquid Asset? Certain pensions are liquid assets once you have reached a retirement age. Until you are eligible to withdraw or collect a pension, without early withdrawal penalty, it is not considered a liquid asset. The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash. The most liquid asset of all is cash itself. · In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent varying degrees of liquidity. This can be differentiated as market liquidity or accounting liquidity.· Liquidity refers to a tangible construct that can be measures. The most common ways to do so include a current ratio, quick ratio, and cash ratio. What is the Definition of Liquidity? Liquidity is a common definition used in investing, banking, or the financial services space. Its primary function is to ascertain how quickly a given asset can be bought, sold, or exchanged without a disparity in market price. Which of the following assets is the most liquid? By definition, in terms of liquidity, cash is unequivocally seen as the most liquid asset in an economic sense. This is due to its widespread acceptance and ease of conversion into other assets, forms of cash, or currencies, etc. All other liquid assets must be able to be quickly and efficiently converted into cash, i.e., financial liquidity. This includes such things as stocks, commodities, or virtually any other construct that has an associated value. By extension, illiquid or non-liquid assets are not able to be quickly converted into cash. These assets, also known as tangible assets, can include such things as rare art or collectables, real estate, etc. Liquidity Spectrum Liquid assets can be defined primarily as either cash on hand or simply an asset that can be easily or readily converted into usable cash. It is important to note that cash is not uniformly liquid for several reasons. The below examples encompass all types of assets and their corresponding level of liquidity. Examples of Liquid Assets or Securities A good example of this is the US dollar, which is recognized or accepted globally, and backed by the US government or Federal Reserve Bank. Other major forms of cash include Euros, or major currencies. This differs notably from the legal tender in many emerging countries or others for political or economic reasons. Cash aside, assets such as stocks or equities, bonds and other securities, money market assets, marketable securities, US treasuries or T-notes, exchange-traded funds (ETFs), a savings account, and mutual funds serve as the most liquid assets. These are generally assumed to be quick assets. Each of these assets can be converted into cash either instantaneously, or via any brokerage platform, exchange, etc., often in as little as minutes or seconds. As such, these assets are liquid. Examples of Illiquid Assets or Securities Conversely, illiquid assets still retain importance and value, though are much more difficult to convert into cash. Common examples of this include land or real estate, intellectual property, or other forms of capital such as equipment or machinery. In the examples above, liquid assets are assumed to be convertible into cash without substantial fees or delays in time. Illiquid assets on the other hand often suffer from fees or additional conversion costs, processing times, ultimately creating a price disparity. The best example of an illiquid asset is a house. For many individuals this is the most valuable asset they will own in their entire lives. However, selling a house typically requires taxes, realtor fees, and other costs, in addition to time. Real estate or land also takes much longer to exchange into cash, relative to other assets. Types of Liquidity Overall, liquidity is a broad term that needs to be defined by two different measures: market liquidity and accounting liquidity. Both measures deal with different constructs or entities entirely, though are useful metrics with regards to individuals or financial markets. Market Liquidity Market liquidity is a broader term that is used by a market maker to measure the ease of which assets can be bought and sold at transparent prices, namely across exchanges, stock markets, or other financial sectors. This can include among others, a real estate or property market, market for fine arts and collectable, and other goods. Market Liquidity Example As mentioned above, certain financial markets are much more liquid than others. The degree to which stocks from large companies or foreign currencies can be exchanged is much easier than finding a readily available market for antiques, collectables, or other capital, regardless of utility. Overall, a stock market, financial brokerage, or exchange is considered to have the high market liquidity. This is because the difference between both the bid and ask prices between parties is very low. The lower the spread between these two prices, the more liquid a given market is. Additionally, low liquidity refers to a higher spread between two prices. Why Liquidity Varies and What Does Liquidity Mean in Stocks? Every asset has a variable level of liquidity meaning this can change depending on what is being analyzed. One can define liquidity in stocks or stock markets in the same way as in foreign exchange markets, brokers, commodities exchanges, and crypto exchanges. Additionally, how large the market is will also dictate liquidity. The foreign exchange market for example is currently the largest by trading volume with high liquidity due to cash flows. This is hardly surprising given that forms of cash or currencies are being exchanged. What is Liquidity in Stocks? A stock's liquidity refers to how rapidly shares of a stock can be bought or sold without largely impacting a stock price. By definition, liquidity in stocks varies for a number of reasons. Stocks with low liquidity may be difficult to sell and may cause you to take a bigger loss if you cannot sell the shares when you want to. In finance, the most liquid assets are always the most popular. By extension, if a spread between buyers and sellers increases, the market is considered to be less liquid. A good example of this is the real estate or property market. While highly valuable, there are large disparities between the purchase price and selling price of property, as well as the time associated in making these transactions, and additional fees incurred by other parties. Liquidity providers play a key role in this regard. Accounting Liquidity Unlike market liquidity, accounting liquidity measures something different entirely. Accounting liquidity is a measure by which either an individual or entity can meet their respective current financial obligations with the current liquid assets available to them. This includes paying off debts, overhead, or any other fixed costs associated with a business. Accounting liquidity is a functional comparison between one’s current liquid assets and their current liabilities. In the United States and other countries, companies and individuals have to reconcile accounting on a yearly basis. Accounting liquidity is an excellent measure that captures financial obligations due in a year. Accounting Liquidity Example Accounting liquidity itself can be differentiated by several ratios, controlling for how liquid assets are. These measures are useful tools for not just the individual or company in focus but for others that are trying to ascertain current financial health.As an example, accounting liquidity can measure any company’s current financial assets and compare them to its financial obligations. If there is a large disparity between these figures, or much more assets than obligations, a company can be considered to have a strong depth of liquidity.How to Calculate Liquidity Liquidity is of importance to investors, financial market participants, analysts, or even for an investment strategy. Calculating liquidity is a measure of firm or individual’s ability to utilize or harness current liquid assets to current cover short-term debt. This can be achieved using a total of four formulas: the current ratio, quick ratio, acid-test variation, and cash ratio. Current Ratio The current ratio is the easiest measure due to its lack of complexity. Quite simply, the current ratio measures a firm or individual’s current assets or those than can be sold within a calendar year, weighed against all current liabilities. Current Ratio = Current Assets/Current Liabilities If the current ratio’s value is greater than 1, then the entity in question can be assumed to reconcile its financial obligations using its current liquid assets. Highly liquid assets will correspond to higher numbers in this regard. Conversely, any number less than 1 indicates that current liquid assets are not enough to cover short-term obligations. Quick Ratio A quick ratio is a slightly more complex way of measuring accounting liquidity via a balance sheet. Unlike the current ratio, the quick ratio excludes current assets that are not as liquid as cash, cash equivalents, or other shorter-term investments. The quick ratio can be defined below by the following: Quick Ratio = (Cash or Cash Equivalents + Shorter-Term Investments + Accounts Receivable)/Current Liabilities Acid-Test Ratio The acid-test ratio is a variation of the quick ratio. The acid-test ratio seeks to deduct inventory from current assets, serving as a traditionally broader measure that is more forgiving to individuals or entities. Acid-Test Ratio = (Current Assets – Inventories – Prepaid Costs)/Current Liabilities Cash Ratio Finally, the cash ratio further isolates current assets, looking to measure only liquid assets that are designated as cash or cash equivalents. In this sense, the cash ratio is the most precise of the other liquidity ratios, excluding accounts receivable, inventories, or other assets. A more precise measure has its uses, namely regarding assessing financial strength in the face of an emergency, i.e., an unforeseen and time sensitive event. The cash ratio can help measure an entity or individual’s hypothesized solvency in the face of unexpected scenarios, events, etc. As such, the cash ratio is defined below: Cash Ratio = Cash and Cash Equivalents/Current Liabilities The cash ratio is not simply a doomsday tool but a highly practical measure when determining market value. In the financial services space, even large companies or profitable institutions can find themselves at liquidity risk due to unexpected events beyond their control. Why is Liquidity Important and Why it Matters to You? Liquidity is very important for not just financial markets but for individuals and investors. Liquid markets benefit all market participants and make it easier to buy and sell securities, stocks, collectables, etc. On an individual level, this is important for personal finance, as ordinary investors are able to better take advantage of trading opportunities. Additionally, high liquidity promotes financial health in companies in the same way it does for individuals. Conclusion – What Does Liquidity Mean? What is liquidity? This metric is a commonly used as a measure in the investing, banking, or financial services space. Liquidity determines how quickly a given asset can be bought, sold, or exchanged without a disparity in market price. Which of the following assets is the most liquid? – cash, stocks, real estate. Of all assets, cash or money is the most liquid, meaning it is the easiest to utilize. All other liquid assets must be able to be quickly and efficiently converted into cash. This includes such things as stocks, commodities, or virtually any other construct that has an associated value. Conversely, illiquid or non-liquid assets are not able to be quickly converted into cash. These assets, also known as tangible assets, can include such things as rare art or collectables, real estate, etc. Frequently Asked Questions About Liquidity Is Liquidity Good or Bad? The term liquidity refers to a measure and is neither good nor bad but is instead a metric of how convertible an asset is to cash. However, high liquidity is associated with lower risk, while a liquid stock is more likely to keep its value when being traded.Is a Home a Liquid Asset? A home or properly is not considered to be a liquid asset. Selling any property can incur additional costs and take a long amount of time. Additionally, there is often a price disparity from the time of purchase, meaning a seller may not even get its original market value back at the time of the sale. Why Are Stocks Liquid? Stocks are some of the most liquid assets in financial markets because these assets can be converted to cash in a short period of time in the event of any financial emergency. Is Tesla a Liquid Stock? Tesla is a liquid stock and while hugely volatile, is an integral part of the NASDAQ and is a globally recognized company. Additionally, the company is a popular single-stock CFD offering at many brokerages, with very high volumes. Is a Pension a Liquid Asset? Certain pensions are liquid assets once you have reached a retirement age. Until you are eligible to withdraw or collect a pension, without early withdrawal penalty, it is not considered a liquid asset. Read this Term, multisig paper wallets, hardware wallets support, delegation where it needs to be. We have some voting stuff built into it. Within a year we’ll have mobile clients as well, so they’ll be running on cell phones.”
Changing the world takes endurance, pain and hard work. Market corrections shake off weak hands and harden the resolve of the truly dedicated to continue the drudgery. Crypto isn't dead. It's just getting started.
— Charles Hoskinson (@IOHK_Charles) February 5, 2018
He also explained that the next year is about expanding the usage of Cardano, and taking it beyond Proof-of-Concept: “Next year is all about getting enterprise adoption where it needs to be, the next year’s all about sharding, and getting us from being a system that runs really well with 10,000s to 100,000s, to a system that works well with the millions and the billions...we’ve got a lot of documentation to write, a lot of code to clean up, a lot of partners to bring onboard.”
Charles said that one of the project’s goals is to “get the project done… making it so if I was hit with a bus, Cardano would still be okay, and I can be easily replaced, and so forth.”
“We’ll also be able to--pound-for-pound--compete with Ethereum and Bitcoin. If we get all of that done in a year, then I think that’s mission accomplished.”