Single-family offices are investing in bitcoin as a way to diversify portfolios, according to Angelo Robles, founder and CEO of the Family Office Association, reported Russ Alan Prince, a contributor to Forbes who writes on wealth management. Single family offices are following hedge fund investors and institutional players in looking to bitcoin for asset diversification.
Prince, president of R.A. Prince & Associates, is one of several wealth management experts who has noted more people are considering bitcoin as a way to diversify investment portfolios.
Bitcoin’s Benefits
Bitcoin is not dependent on other assets in a traditional family portfolio, Robles noted. Hence, it offers asset diversification.
Bitcoin is also decentralized, meaning there are not any institutions controlling the currency. In addition, it is transparent because of blockchain technology, it is a fast way to transfer funds, and the transaction fees are diminutive.
Bitcoin does require understanding the risks involved, according to David Berger, chairman of the Digital Currency Council. He said bitcoin will either be a “grand slam” or it will crash, with plenty of volatility. Berger said he doesn’t see bitcoin as suitable for a family looking to preserve wealth. He sees it similar to high risk/high reward venture investments.
More single-family offices are investing in bitcoin and other decentralized, digital currencies, Berger agreed. He said some are choosing to invest in ventures that are developing the technology and infrastructure. He noted that the ecosystem for this new asset class is expanding rapidly.
Also read: Portfolio manager high on cash suggests bitcoin for diversification
Experts Weigh In
Chris DeMuth Jr., a portfolio manager at Rangeley Capital, has suggested investors optimize their cash holdings and put 10% of it in bitcoin. He noted in June that the implied future annual return for the stock market is negative, and the price-to-sales ratio globally is as high as ever.
Not all investment bloggers are encouraging people to invest in bitcoin.
Matt Thalman, a blogger for ino.com, a market trader website, recently blogged that he considers bitcoin to be unproven as an investment. He is concerned about the secrecy surrounding various aspects of bitcoin. He also thinks the cryptocurrency will continue to be volatile.
Monday, February 27, 2017
Saturday, February 25, 2017
'Buy Bitcoin,' PwC Fintech Director Tells Fordham Students
Representatives from each of the 'Big Four' global auditing firms were in attendance yesterday at New York's Fordham University to discuss blockchain in the capital markets.
There, members of Accenture, Deloitte, EY, KPMG and PWC joined blockchain startup ConsenSys to discuss the future of the industry and to provide career advice to students on the cusp of beginning their professional careers.
While no companies provided new insight into their public strategies, their off-the-cuff remarks shed light on how traditional financial institutions are becoming more comfortable with the increasingly nuanced technology.
When given an opportunity to address the crowd, Subhankar Sinha, a PwC fintech director, told students that the best way to get involved in the industry is to buy and hold bitcoin and ethereum.
Sinha told the crowd:
"Buy it with your own money. That will give you a tremendous dividend. You have to put yourself in uncomfortable situations. Have an open mindset.”
Positive predictions
Elsewhere, there was discussion about how the industry might evolve.
An introduction from Fordham professor Dr Frank Hsu outlined the history of blockchain, drawing analogies to the TCP/IP protocol – an internet technology developed in 1983, but that did not gain mainstream adoption until 1995.
"Using that framework, blockchain, started in 2008, should gain mainstream status by 2020," he said.
Panelist Chris Broderson, Capital Markets researcher at Accenture, focused on healthcare, stating that cryptographic technology will allow medical records to be easily stored and transferred via blockchain applications while also reducing fraud.
Finally, panelist Vanessa Grellet, an ethereum executive and chair of Nexus Impact Investing Group, predicted that blockchain will disrupt the legal, financial services and remittance industries.
She ended with an appeal to students: "Follow your passion, doing something you love, stick with something for two to three years to build expertise and knowledge in your field."
And stressing the passion that those in the industry have for the technology, panelist and EY financial services manager Mike Maloney said:
"Nobody gets in Twitter fights over Swift and ACH."
Image by Michael del Castillo for CoinDesk
There, members of Accenture, Deloitte, EY, KPMG and PWC joined blockchain startup ConsenSys to discuss the future of the industry and to provide career advice to students on the cusp of beginning their professional careers.
While no companies provided new insight into their public strategies, their off-the-cuff remarks shed light on how traditional financial institutions are becoming more comfortable with the increasingly nuanced technology.
When given an opportunity to address the crowd, Subhankar Sinha, a PwC fintech director, told students that the best way to get involved in the industry is to buy and hold bitcoin and ethereum.
Sinha told the crowd:
"Buy it with your own money. That will give you a tremendous dividend. You have to put yourself in uncomfortable situations. Have an open mindset.”
Positive predictions
Elsewhere, there was discussion about how the industry might evolve.
An introduction from Fordham professor Dr Frank Hsu outlined the history of blockchain, drawing analogies to the TCP/IP protocol – an internet technology developed in 1983, but that did not gain mainstream adoption until 1995.
"Using that framework, blockchain, started in 2008, should gain mainstream status by 2020," he said.
Panelist Chris Broderson, Capital Markets researcher at Accenture, focused on healthcare, stating that cryptographic technology will allow medical records to be easily stored and transferred via blockchain applications while also reducing fraud.
Finally, panelist Vanessa Grellet, an ethereum executive and chair of Nexus Impact Investing Group, predicted that blockchain will disrupt the legal, financial services and remittance industries.
She ended with an appeal to students: "Follow your passion, doing something you love, stick with something for two to three years to build expertise and knowledge in your field."
And stressing the passion that those in the industry have for the technology, panelist and EY financial services manager Mike Maloney said:
"Nobody gets in Twitter fights over Swift and ACH."
Image by Michael del Castillo for CoinDesk
Bitcoin Price Next Milestone: Beating Gold Permanently
The Bitcoin price could soon surpass gold’s on a permanent basis supposing they both continue with their current market performance.
Gold hit a three-month high of $1260 at the end of business day on Thursday, Feb. 23, as a steady flow of safe-haven demand from traders and investors continued worldwide while Bitcoin topped $1170 around the same time. Civic CEO Vinny Lingham, gives Bitcoin about a month or less to consolidateits price in the $1300 range.
It’s Trump, not China
A report says ongoing uncertainty and some anxiety regarding the new US president and his administration’s new and potentially aggressive policies continue to support the gold market. Similarly, the latest rally in the Bitcoin market has been described by an analyst at Lux Research Inc., Mark Bünger, as likely unconnected to China but rather to some of the policies of US President Donald Trump.
It is worth noting that the Trump factor is pinned on the documents - minutes of the Jan. 31-Feb. 1 session of the Federal Open Market Committee - released on Wednesday that shows that the Federal Reserve could be giving a strong indication that another interest hike could come sooner due to some of the changes brought by the new administration.
That Bitcoin has been going more mainstream as additional companies have now been accepting it as a form of payment, according to equity strategist at Miller Tabak, Matt Maley, on CNBC's "Trading Nation," will support its push to overtake gold.
The media hype trailing the all-time high record in the Bitcoin price has gone far and wide in the last few days. The noise is likely to reach even further than could be captured because a rise in the price of Bitcoin has been known to magnetize new users. Gold isn’t as new to court similar attention.
ETF factor, France uncertainty
There is a likelihood that the first Bitcoin exchange traded fund or ETF could be approved. When it does get the approval on March 11, Bitcoin has been tipped to gain value.
Also, Chinese Bitcoin exchanges which contribute significantly to the global trading of the currency have had some aspects of their operations restricted pending their upgrade of the KYC/AML system. A slight change in Bitcoin price is expected as soon as they resume full operation.
Global political uncertainty particularly in the case of France’s far-right candidate, Marine Le Pen, of the National Front Party, ahead of the coming presidential election is also key to determine if and when Bitcoin price will beat gold’s.
Gold hit a three-month high of $1260 at the end of business day on Thursday, Feb. 23, as a steady flow of safe-haven demand from traders and investors continued worldwide while Bitcoin topped $1170 around the same time. Civic CEO Vinny Lingham, gives Bitcoin about a month or less to consolidateits price in the $1300 range.
It’s Trump, not China
A report says ongoing uncertainty and some anxiety regarding the new US president and his administration’s new and potentially aggressive policies continue to support the gold market. Similarly, the latest rally in the Bitcoin market has been described by an analyst at Lux Research Inc., Mark Bünger, as likely unconnected to China but rather to some of the policies of US President Donald Trump.
It is worth noting that the Trump factor is pinned on the documents - minutes of the Jan. 31-Feb. 1 session of the Federal Open Market Committee - released on Wednesday that shows that the Federal Reserve could be giving a strong indication that another interest hike could come sooner due to some of the changes brought by the new administration.
That Bitcoin has been going more mainstream as additional companies have now been accepting it as a form of payment, according to equity strategist at Miller Tabak, Matt Maley, on CNBC's "Trading Nation," will support its push to overtake gold.
The media hype trailing the all-time high record in the Bitcoin price has gone far and wide in the last few days. The noise is likely to reach even further than could be captured because a rise in the price of Bitcoin has been known to magnetize new users. Gold isn’t as new to court similar attention.
ETF factor, France uncertainty
There is a likelihood that the first Bitcoin exchange traded fund or ETF could be approved. When it does get the approval on March 11, Bitcoin has been tipped to gain value.
Also, Chinese Bitcoin exchanges which contribute significantly to the global trading of the currency have had some aspects of their operations restricted pending their upgrade of the KYC/AML system. A slight change in Bitcoin price is expected as soon as they resume full operation.
Global political uncertainty particularly in the case of France’s far-right candidate, Marine Le Pen, of the National Front Party, ahead of the coming presidential election is also key to determine if and when Bitcoin price will beat gold’s.
Even Chinese central bank can’t kill bitcoin
Bitcoin gained prominence because its peer-to-peer payment system allows people to conduct financial transactions that can’t be censored by third parties. Users are free to transact with anyone, as long as they control their own private keys. Photo: Bloomberg
Every time a government sets out to abolish something people like, the well-liked thing moves to where it can’t be stopped. This has happened with prohibition, gambling, the war on drugs and digital piracy. Now it’s happening in China, where the government has been trying to crack down on bitcoin.
As part of an effort to control capital outflows, the Chinese central bank required bitcoin exchanges to suspend withdrawals until they could update their compliance systems. Trading on the exchanges took a big hit, but the bitcoin activity resurfaced on less formal over-the-counter venues. Here’s a chart showing trading volume at LocalBitcoins, a site where users post “advertisements”—like on Craigslist—to buy or sell bitcoin for local currency:
[Bloomberg]
Click here for enlarge
Blocking LocalBitcoins would be no solution, in part because people can use virtual private networks to access it anyway. Also, plenty of trading happens on lesser-known sites and on micro-messaging services such as WeChat and QQ. The latter already have their own payment systems, allowing users to build chatbots to automate trading activity. For those who prefer a more familiar trading interface, decentralized exchange software such as Bitsquare can construct an order book based on outstanding offers accumulated from other participants.
China is not alone. Peer-to-peer trading took off in Turkey after the country’s only bitcoin exchange ceased to operate, and in Venezuela after the leading exchange had its bank account closed. Russia has some of the most active unofficial bitcoin markets in the world, thanks to the country’s longstanding regulatory uncertainty.
Although centralized exchanges provide benefits, such as bringing together large quantities of buyers and sellers and guaranteeing payment, they’re not necessary for the currency’s existence. Bitcoin users don’t own physical coins, or even digital ones. They own permanent transaction histories recorded on a global ledger, replicated by participants all around the world. Even if a government shuts down every bitcoin node in its country, a bitcoin user can still transact as long as a single node is accessible overseas.
This puts regulators in a tough spot. It’s hard to control something that exists nowhere and everywhere at the same time. With peer-to-peer transactions, there are no servers to shut down, no kingpins to arrest, no warehouses to bust. Regulators can only go after local bitcoin exchanges and service providers, effectively impairing their own ability to see what’s going on.
Attempts to stamp out Bitcoin serve only to remind users why a decentralized currency needs to exist in the first place. Bitcoin gained prominence because its peer-to-peer payment system allows people to conduct financial transactions that can’t be censored by third parties. Users are free to transact with anyone, as long as they control their own private keys. The fact that many people still give third-party service providers custody of their bitcoin accounts is mostly a relic of our existing acclimation to banks. When regulators try to restrict bitcoin exchanges, they reduce trust both in the government — which can’t seem to keep its hands in its own pockets — and in any kind of third-party financial service provider that might be beholden to the government.
The best way to curb the use of bitcoin is to convince people that they don’t need the cryptocurrency. If Visa and Mastercard started processing payments for darknet markets and remittance customers, the demand for bitcoin would fall off a cliff. But that’s about as likely as China offering to ease capital controls. The US, for its part, could reform money laundering rules that effectively bar a subset of the population from the banking system. When regulations create barriers that prevent legitimate businesses from serving certain customers, less-legitimate businesses rise to meet the demand outside the regulatory system.
Markets can’t be regulated out of existence. The next best thing might be to let them operate in the open. Bloomberg
Elaine Ou
Every time a government sets out to abolish something people like, the well-liked thing moves to where it can’t be stopped. This has happened with prohibition, gambling, the war on drugs and digital piracy. Now it’s happening in China, where the government has been trying to crack down on bitcoin.
As part of an effort to control capital outflows, the Chinese central bank required bitcoin exchanges to suspend withdrawals until they could update their compliance systems. Trading on the exchanges took a big hit, but the bitcoin activity resurfaced on less formal over-the-counter venues. Here’s a chart showing trading volume at LocalBitcoins, a site where users post “advertisements”—like on Craigslist—to buy or sell bitcoin for local currency:
[Bloomberg]
Click here for enlarge
Blocking LocalBitcoins would be no solution, in part because people can use virtual private networks to access it anyway. Also, plenty of trading happens on lesser-known sites and on micro-messaging services such as WeChat and QQ. The latter already have their own payment systems, allowing users to build chatbots to automate trading activity. For those who prefer a more familiar trading interface, decentralized exchange software such as Bitsquare can construct an order book based on outstanding offers accumulated from other participants.
China is not alone. Peer-to-peer trading took off in Turkey after the country’s only bitcoin exchange ceased to operate, and in Venezuela after the leading exchange had its bank account closed. Russia has some of the most active unofficial bitcoin markets in the world, thanks to the country’s longstanding regulatory uncertainty.
Although centralized exchanges provide benefits, such as bringing together large quantities of buyers and sellers and guaranteeing payment, they’re not necessary for the currency’s existence. Bitcoin users don’t own physical coins, or even digital ones. They own permanent transaction histories recorded on a global ledger, replicated by participants all around the world. Even if a government shuts down every bitcoin node in its country, a bitcoin user can still transact as long as a single node is accessible overseas.
This puts regulators in a tough spot. It’s hard to control something that exists nowhere and everywhere at the same time. With peer-to-peer transactions, there are no servers to shut down, no kingpins to arrest, no warehouses to bust. Regulators can only go after local bitcoin exchanges and service providers, effectively impairing their own ability to see what’s going on.
Attempts to stamp out Bitcoin serve only to remind users why a decentralized currency needs to exist in the first place. Bitcoin gained prominence because its peer-to-peer payment system allows people to conduct financial transactions that can’t be censored by third parties. Users are free to transact with anyone, as long as they control their own private keys. The fact that many people still give third-party service providers custody of their bitcoin accounts is mostly a relic of our existing acclimation to banks. When regulators try to restrict bitcoin exchanges, they reduce trust both in the government — which can’t seem to keep its hands in its own pockets — and in any kind of third-party financial service provider that might be beholden to the government.
The best way to curb the use of bitcoin is to convince people that they don’t need the cryptocurrency. If Visa and Mastercard started processing payments for darknet markets and remittance customers, the demand for bitcoin would fall off a cliff. But that’s about as likely as China offering to ease capital controls. The US, for its part, could reform money laundering rules that effectively bar a subset of the population from the banking system. When regulations create barriers that prevent legitimate businesses from serving certain customers, less-legitimate businesses rise to meet the demand outside the regulatory system.
Markets can’t be regulated out of existence. The next best thing might be to let them operate in the open. Bloomberg
Elaine Ou
Bitcoin Prices Have Surged to an All-Time High
In Brief
Bitcoin is a digital currency that allows users to conduct monetary transfer securely and anonymously.
The value of the currency has been steadily surging lately and is currently enjoying its highest value ever.
Tales From the Cryptocurrency
Bitcoin is a term we often hear tossed around in the headlines. We know that it deals with money, online transactions, and just maybe the deep web. Back in 2014, the Washington Post established that only 24% of the American public was aware of what bitcoin actually was. Meaning that almost three-quarters of the country had no idea. But maybe they just might want to start paying attention, especially now since it is at its all-time high value.
Bitcoin was introduced in 2008 by an anonymous group of programmers under the name of Satoshi Nakamoto and was eventually released to the public in 2009 as an open-source software. Unlike other online payment services like PayPal and Venmo, Bitcoin is a peer-to-peer network that takes place privately between two users—meaning there is no intermediary involved. The cryptographic virtual currency is completely decentralized from any external influence while all transactions with the currency are accounted for through a blockchain ledger.
While bitcoin is thoroughly anonymous, the blockchain ledger has all transactions available publicly. Therefore, theoretically, if you know the time and date of a particular transaction, you may be able to match someone’s online address to their identity. On the other hand, all transactions made through bitcoin are encrypted with military grade cryptography, ensuring that all deals are secure. Sending and receiving bitcoins is as easy as sending an email, but does that mean it’s worth it?
Time to Invest?
With all that said and done, Bitcoin has made it far since it’s substantial price drop in 2013. Since then Bitcoin has stabilized around a margin of $250, with most experts believing it was doomed. However, it seems to have returned to a relatively stable rise since last year. This time last year bitcoin was valued at $367, with its steady rise, it is now valued at 1,177.18. Many speculate as to what is causing the recent trend from Congress to WallStreet to even sheer luck.
References: TechCrunch, Blockchain
Neil C. Bhavsar
@Neilcogen
Bitcoin is a digital currency that allows users to conduct monetary transfer securely and anonymously.
The value of the currency has been steadily surging lately and is currently enjoying its highest value ever.
Tales From the Cryptocurrency
Bitcoin is a term we often hear tossed around in the headlines. We know that it deals with money, online transactions, and just maybe the deep web. Back in 2014, the Washington Post established that only 24% of the American public was aware of what bitcoin actually was. Meaning that almost three-quarters of the country had no idea. But maybe they just might want to start paying attention, especially now since it is at its all-time high value.
Bitcoin was introduced in 2008 by an anonymous group of programmers under the name of Satoshi Nakamoto and was eventually released to the public in 2009 as an open-source software. Unlike other online payment services like PayPal and Venmo, Bitcoin is a peer-to-peer network that takes place privately between two users—meaning there is no intermediary involved. The cryptographic virtual currency is completely decentralized from any external influence while all transactions with the currency are accounted for through a blockchain ledger.
While bitcoin is thoroughly anonymous, the blockchain ledger has all transactions available publicly. Therefore, theoretically, if you know the time and date of a particular transaction, you may be able to match someone’s online address to their identity. On the other hand, all transactions made through bitcoin are encrypted with military grade cryptography, ensuring that all deals are secure. Sending and receiving bitcoins is as easy as sending an email, but does that mean it’s worth it?
Time to Invest?
With all that said and done, Bitcoin has made it far since it’s substantial price drop in 2013. Since then Bitcoin has stabilized around a margin of $250, with most experts believing it was doomed. However, it seems to have returned to a relatively stable rise since last year. This time last year bitcoin was valued at $367, with its steady rise, it is now valued at 1,177.18. Many speculate as to what is causing the recent trend from Congress to WallStreet to even sheer luck.
References: TechCrunch, Blockchain
Neil C. Bhavsar
@Neilcogen
Thursday, February 23, 2017
Bitcoin Price Sets New All-Time High
The price of bitcoin has reached a new all-time high.
Bitcoin prices hit a high of $1,172.09, according to the CoinDesk Bitcoin Price Index (BPI) – surpassing a level first set more than three years ago in November 2013, when the BPI reported an average price high of $1,165.89.
The move followed a morning of price gains, coming amid the longest period ever in which bitcoin's value has stayed above $1,000.
Prices first began to inch upward today at 9:00 UTC on Wednesday, with bitcoin prices reaching a high of $1,100, staying above that level since. Today's price high represents an increase of more than 4% since the start of the day's trading.
At press time, the average price of bitcoin is $1,170.72, BPI data shows.
A number of factors of buoyed prices – and positive trader sentiment – in recent weeks.
Perhaps most notably, traders have taken a largely bullish tack on the prospects that the US Securities and Exchange Commission (SEC) will approve the first-ever bitcoin ETF. The SEC has a deadline of 11th March to make their final decision, which has already been subject to delays.
The surge past the all-time high also follows a period of uncertainty and change within the global bitcoin market.
January's defining markets storyline was the growing involvement of the People's Bank of China, China's central bank, in the domestic bitcoin exchange space. A warning issued to exchanges led to the imposition of trading feesand, later, withdrawal delays at China's leading bourses.
That month opened with a push above the $1,000 line, though the days to follow would see a dramatic fall back below that figure.
An AI-run hedge fund has created a #cryptocurrency for its human data scientists
An AI-run hedge fund has created a #cryptocurrency for its human data scientists http://bit.ly/2l03lgZ #Blockchain #AI #Crowdsourcing
#PrisonersDillemma #DataScience #Network #GameTheory
‘Why is tech positive-sum and finance zero-sum?’
12,000 data scientists were issued 1 million crypto-tokens to incentivize the construction of an #ArtificialYntelligenceHedgeFund. Here’s why.
Money was invented to solve the coincidence of wants problem and facilitate transactions. But as fiat currencies continue to lose relevance into the 21st century, cryptocurrency presents solutions far beyond money transfer. Cryptocurrency can now be used to incentivize cooperation in populations.
With cryptocurrency, money can now be software. There can be programmed rules for how money behaves. The ability to program money seems subtle, but small changes to the rules of money can have large effects on the behavior of the holders of that money. For a historical example of primitive money software influencing a population, see The Wörgl Experiment of 1932. For a modern example, consider how bitcoin incentivized thousands of people around the world to mine it.
The stock market presents a situation similar to the prisoner’s dilemma. The market would be better off if market participants collaborated, but rationally they don’t. Regular money simply does not incentivize them correctly. Regular money is too low-tech.
Imagine the #PrisonersDilemma in a world that exists entirely on a #blockchain.
Now suppose the prisoners are issued a cryptocurrency similar to a normal money except for one small change: it is programmed to self-destruct whenever anyone goes to prison. By defining the money in this way, the prisoners’ fates are now financially bound. Prisoners in this scenario realize that if they don’t keep the other prisoner out of jail, they will lose all of their money with certainty.
This new cryptocurrency results in a world where citizens have a financial incentive to collaborate to keep each other out of jail. The prisoners are still motivated by self-interest but they now live in a universe where the money nudges them to collaborate in pursuit of that self-interest.
"The higher the scientists sit on the leaderboard, the more Numeraire they receive. But it’s not really a currency they can use to pay for stuff. It’s a way of betting that their machine learning models will do well on the live market. If their trades succeed, they get their Numeraire back as well as a payment in bitcoin—a kind of dividend. If their trades go bust, the company destroys their Numeraire, and they don’t get paid.
The new system encourages the data scientists to build models that work on live trades, not just test data. The value of Numeraire also grows in proportion to the overall success of the hedge fund, because Numerai will pay out more bitcoin to data scientists betting Numeraire as the fund grows. “If Numerai were to pay out $1 million per month to people who staked Numeraire, then the value of Numeraire will be very high, because staking Numeraire will be the only way to earn that $1 million,” Craib says.
It’s a tricky but ingenious logic: Everyone betting Numeraire has an incentive to get everyone else to build the best models possible, because the more the fund grows, the bigger the dividends for all. Everyone involved has the incentive to recruit yet more talent—a structure that rewards collaboration."
#PrisonersDillemma #DataScience #Network #GameTheory
‘Why is tech positive-sum and finance zero-sum?’
12,000 data scientists were issued 1 million crypto-tokens to incentivize the construction of an #ArtificialYntelligenceHedgeFund. Here’s why.
Money was invented to solve the coincidence of wants problem and facilitate transactions. But as fiat currencies continue to lose relevance into the 21st century, cryptocurrency presents solutions far beyond money transfer. Cryptocurrency can now be used to incentivize cooperation in populations.
With cryptocurrency, money can now be software. There can be programmed rules for how money behaves. The ability to program money seems subtle, but small changes to the rules of money can have large effects on the behavior of the holders of that money. For a historical example of primitive money software influencing a population, see The Wörgl Experiment of 1932. For a modern example, consider how bitcoin incentivized thousands of people around the world to mine it.
The stock market presents a situation similar to the prisoner’s dilemma. The market would be better off if market participants collaborated, but rationally they don’t. Regular money simply does not incentivize them correctly. Regular money is too low-tech.
Imagine the #PrisonersDilemma in a world that exists entirely on a #blockchain.
Now suppose the prisoners are issued a cryptocurrency similar to a normal money except for one small change: it is programmed to self-destruct whenever anyone goes to prison. By defining the money in this way, the prisoners’ fates are now financially bound. Prisoners in this scenario realize that if they don’t keep the other prisoner out of jail, they will lose all of their money with certainty.
This new cryptocurrency results in a world where citizens have a financial incentive to collaborate to keep each other out of jail. The prisoners are still motivated by self-interest but they now live in a universe where the money nudges them to collaborate in pursuit of that self-interest.
"The higher the scientists sit on the leaderboard, the more Numeraire they receive. But it’s not really a currency they can use to pay for stuff. It’s a way of betting that their machine learning models will do well on the live market. If their trades succeed, they get their Numeraire back as well as a payment in bitcoin—a kind of dividend. If their trades go bust, the company destroys their Numeraire, and they don’t get paid.
The new system encourages the data scientists to build models that work on live trades, not just test data. The value of Numeraire also grows in proportion to the overall success of the hedge fund, because Numerai will pay out more bitcoin to data scientists betting Numeraire as the fund grows. “If Numerai were to pay out $1 million per month to people who staked Numeraire, then the value of Numeraire will be very high, because staking Numeraire will be the only way to earn that $1 million,” Craib says.
It’s a tricky but ingenious logic: Everyone betting Numeraire has an incentive to get everyone else to build the best models possible, because the more the fund grows, the bigger the dividends for all. Everyone involved has the incentive to recruit yet more talent—a structure that rewards collaboration."
Bitcoin vs Dash digital cash - Which will achieve mass adoption first? (video/podcast)
Bitcoin is an amazing technology that captured the imaginations of many people. Various individuals were stunned at the idea that mathematical algorithms could form the basis of our money, rather than central bankers and corrupt politicians, as is normally the way today. People were seduced by the idea of sending value around the world in a matter of minutes, a currency uncontrolled and uncontrollable by authority, and sending micropayments to websites to read their articles - instead of having to tolerate clickbait content beholden to advertisers. Bitcoin has delivered on some of those promises, however, it's 8 years on and it still seems to be far from mainstream adoption.
If we take a step back from the hype and the dream of Bitcoin - still alive in the minds of many of us - we can see that Bitcoin has a few key problems. The main problem is, it's too hard to use. People have to use long addresses which look like computer errors, to know the right transaction fee to send their cash or risk their transaction being at the back of a queue of 80,000, they have to generate new addresses for security, make paper wallets or buy a Trezor if they really want to be secure - and if they lose their wallet, or get hacked, they might just lose their life's savings. Does that sound like a currency which is ready for mass adoption?
Now, I don't know any digital currency which is ready for mass adoption - but I do know one which might be close. Dash "Digital Cash" is a currency which started in 2014, and the team is actively working on the problem of user experience, devising a system where people can log-in from any computer with a username and password, send currency using something like looks like a name, have their money secured while still retaining control, and not worry about losing their retirement fund just because they misplaced their private keys. Even now, Dash has the functionality of instant payments, and of private payments.
In this short episode, Kurt presents the case of why Dash might reach mass adoption before Bitcoin. Join me in another paradigm-shattering, central-banker-unseating, digital revolution episode of ... The Paradise Paradox!
To download the audio, right click here and press ‘Save as’
View the full shownotes here: Bitcoin vs Dash: The Paradise Paradox Episode 154
Wednesday, February 22, 2017
Bitcoin Price Nears All-Time Record High in New Age of Stability
Bitcoin price is just $60 off a new all-time high Tuesday, having surpassed $1100 to rival 2013’s record of $1155.
At press time, the price was hovering around $1110, having managed to stay above the psychological barrier of both $1000 and $1100 without any significant plunge.
A mere $60 separates current levels from achieving a new benchmark for the Bitcoin economy. Graphs from both Coinmarketcap and Coin Dance make for exciting reading.
BTC Charts
Price
Continued support from traders, a strong outlook and more favorable regulations have all helped create a more stable environment for the cryptocurrency in recent months.
Investor confidence has also increased, as Bitcoin proves its resilience to geopolitical factors - especially from China - which previously sent prices surging and tumbling in equal measure.
Nonetheless, the sentiment is increasing about the approval of the first Bitcoin ETF in the US in March. If it goes ahead, commentators say, Bitcoin price could soon find itself well north of $1155 - perhaps by as much as 65 percent
At press time, the price was hovering around $1110, having managed to stay above the psychological barrier of both $1000 and $1100 without any significant plunge.
A mere $60 separates current levels from achieving a new benchmark for the Bitcoin economy. Graphs from both Coinmarketcap and Coin Dance make for exciting reading.
BTC Charts
Price
Continued support from traders, a strong outlook and more favorable regulations have all helped create a more stable environment for the cryptocurrency in recent months.
Investor confidence has also increased, as Bitcoin proves its resilience to geopolitical factors - especially from China - which previously sent prices surging and tumbling in equal measure.
Nonetheless, the sentiment is increasing about the approval of the first Bitcoin ETF in the US in March. If it goes ahead, commentators say, Bitcoin price could soon find itself well north of $1155 - perhaps by as much as 65 percent
Bitcoin is closing in on its all-time high
Buying early on in US trade has run bitcoin up 0.7%, or $7.50, to $1,115 a coin. Wednesday's bid has the cryptocurrency higher for a ninth straight session and threatening its all-time high of about $1,140.
The recent strength in bitcoin comes amid speculation the Securities and Exchange Commission will approve at least one of the three proposed bitcoin-focused exchange-traded funds despite analyst concerns that none will be approved.
Bitcoin has soared more than 40% since bottoming out on January 11 following word that China was going to begin cracking down on trading of the cryptocurrency. That rally has come despite news that China's largest exchanges would begin charging a flat fee of 0.2% on all transactions and that two of China's largest bitcoin exchanges were blocking withdrawals.
For the year, bitcoin is up about 18%.
BitcoinMarkets Insider
Get the latest Bitcoin price here.
The recent strength in bitcoin comes amid speculation the Securities and Exchange Commission will approve at least one of the three proposed bitcoin-focused exchange-traded funds despite analyst concerns that none will be approved.
Bitcoin has soared more than 40% since bottoming out on January 11 following word that China was going to begin cracking down on trading of the cryptocurrency. That rally has come despite news that China's largest exchanges would begin charging a flat fee of 0.2% on all transactions and that two of China's largest bitcoin exchanges were blocking withdrawals.
For the year, bitcoin is up about 18%.
BitcoinMarkets Insider
Get the latest Bitcoin price here.
Tuesday, February 21, 2017
Bitcoin Prices Hit Six-Week High as Traders Await ETF Decision
The price of bitcoin continued to inch closer to annual highs set in January today, as prices for the asset passed $1,100 across global exchanges.
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At press time, bitcoin was trading at $1,105.18, its highest total since 5th January – the day its most recent price rally collapsed, falling $200 in one hour. The drop, credited by some to the over-influence of leverage in the market, later sparked an investigation into the market by the People's Bank of China, the country's central bank.
However, traders are looking elsewhere in an effort to understand this latest price rise.
Sources told CoinDesk today that they believe the price increase is the result of traders "pricing in" an 11th March ruling that could see the Winklevoss Bitcoin ETF become the first bitcoin ETF in the US market, opening the digital currency to a wider audience of investors.
OTC trader Zhao Dong credited the increase to "optimism about the ETF approval", as did exchange operators and market analysts. Not everyone is optimistic about the path ahead, however.
Blockchain consultant and advisor George Samman, for example, expects the price to edge downward prior to the approval, as traders look to sell ahead of a possible rejection. Research from investment analyst Needham & Co has found that the bitcoin ETF has a less than 25% chance of being approved.
Still, the research firm projects that bitcoin prices could rise dramatically on the off-chance a positive decision is made, perhaps prompting demand for bitcoin in advance of this upcoming date.
Ruler image via Shutterstock
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At press time, bitcoin was trading at $1,105.18, its highest total since 5th January – the day its most recent price rally collapsed, falling $200 in one hour. The drop, credited by some to the over-influence of leverage in the market, later sparked an investigation into the market by the People's Bank of China, the country's central bank.
However, traders are looking elsewhere in an effort to understand this latest price rise.
Sources told CoinDesk today that they believe the price increase is the result of traders "pricing in" an 11th March ruling that could see the Winklevoss Bitcoin ETF become the first bitcoin ETF in the US market, opening the digital currency to a wider audience of investors.
OTC trader Zhao Dong credited the increase to "optimism about the ETF approval", as did exchange operators and market analysts. Not everyone is optimistic about the path ahead, however.
Blockchain consultant and advisor George Samman, for example, expects the price to edge downward prior to the approval, as traders look to sell ahead of a possible rejection. Research from investment analyst Needham & Co has found that the bitcoin ETF has a less than 25% chance of being approved.
Still, the research firm projects that bitcoin prices could rise dramatically on the off-chance a positive decision is made, perhaps prompting demand for bitcoin in advance of this upcoming date.
Ruler image via Shutterstock
Sunday, February 19, 2017
Governments and Banks Push Bitcoin Price to New Levels: Experts
Besides the global influx of new users, government wars and restrictions against Bitcoin appears to be toughening the resilience and character of the cryptocurrency.
Bitcoin has exhibited a very strong price character so far in 2017 despite a number of setbacks. This is expressed by the manner in which its price has always shown good strength in recovery.
Alena Vranova, co-founder of SatoshiLabs / TREZOR, says:
“All those setbacks, hurdles and government restrictions are a blessing, making Bitcoin more resilient. The fact that Bitcoin hit $1000 for the second time in its short history also strengthened its position even more and set expectations quite high for this year.”
Two factors supercharging Bitcoin value
Simon Dixon, BnkToTheFuture.com CEO, believes that Bitcoin’s continued strength as a global store of value has been supercharged by two factors in 2017.
Firstly, Dixon notes that banks and financial instructions around the globe waved the Blockchain flag throughout 2016 and many more are starting to realize that Blockchains are pretty useless without Bitcoin’s proof of work.
The result, according to Dixon has been a wave of Blockchain applications that are worse than their existing solutions and a realization that Bitcoin is actually the only interesting thing about Blockchain.
Secondly, Dixon says that governments are essentially subsidizing the growth of Bitcoin, driving people to it by waging war on their national cash supply and adding more and more friction to fiat money in their war on money laundering that is affecting everyday people that are not laundering anything.
“These two factors are driving more and more people to buy some Bitcoin and experience what it is like to own their own money,” concludes Dixon.
Bitcoin is conquering new levels
Michael Vogel, CEO of Netcoins, describes Bitcoin as having a breakout year in terms of new users and continued adoption on a global scale.
Vogel tells Cointelegraph that 2017 is proving to be a very exciting year for Bitcoin, despite having seen major regulatory uncertainties in China with some exchanges halting withdrawals.
Vogel explains:
“Speaking from my viewpoint at Netcoins, a large portion of our customer base continues to be new customers that are discovering Bitcoin for the first time and have made the decision to load up their new Bitcoin wallet. In fact, January was a record month for traffic at our Virtual Bitcoin ATMs.”
Vogel thinks that the overall upward trend in Bitcoin price is as a result of the influx of new users globally. This is because, despite hiccups and negative press, the global Bitcoin trading and transaction volumes continue to grow. This is reflected in the 24-hour volume history of main Bitcoin exchanges over the past year.
Bitcoin has exhibited a very strong price character so far in 2017 despite a number of setbacks. This is expressed by the manner in which its price has always shown good strength in recovery.
Alena Vranova, co-founder of SatoshiLabs / TREZOR, says:
“All those setbacks, hurdles and government restrictions are a blessing, making Bitcoin more resilient. The fact that Bitcoin hit $1000 for the second time in its short history also strengthened its position even more and set expectations quite high for this year.”
Two factors supercharging Bitcoin value
Simon Dixon, BnkToTheFuture.com CEO, believes that Bitcoin’s continued strength as a global store of value has been supercharged by two factors in 2017.
Firstly, Dixon notes that banks and financial instructions around the globe waved the Blockchain flag throughout 2016 and many more are starting to realize that Blockchains are pretty useless without Bitcoin’s proof of work.
The result, according to Dixon has been a wave of Blockchain applications that are worse than their existing solutions and a realization that Bitcoin is actually the only interesting thing about Blockchain.
Secondly, Dixon says that governments are essentially subsidizing the growth of Bitcoin, driving people to it by waging war on their national cash supply and adding more and more friction to fiat money in their war on money laundering that is affecting everyday people that are not laundering anything.
“These two factors are driving more and more people to buy some Bitcoin and experience what it is like to own their own money,” concludes Dixon.
Bitcoin is conquering new levels
Michael Vogel, CEO of Netcoins, describes Bitcoin as having a breakout year in terms of new users and continued adoption on a global scale.
Vogel tells Cointelegraph that 2017 is proving to be a very exciting year for Bitcoin, despite having seen major regulatory uncertainties in China with some exchanges halting withdrawals.
Vogel explains:
“Speaking from my viewpoint at Netcoins, a large portion of our customer base continues to be new customers that are discovering Bitcoin for the first time and have made the decision to load up their new Bitcoin wallet. In fact, January was a record month for traffic at our Virtual Bitcoin ATMs.”
Vogel thinks that the overall upward trend in Bitcoin price is as a result of the influx of new users globally. This is because, despite hiccups and negative press, the global Bitcoin trading and transaction volumes continue to grow. This is reflected in the 24-hour volume history of main Bitcoin exchanges over the past year.
Saturday, February 18, 2017
5 Common Misconceptions About Bitcoin
Satoshi Nakamoto’s creation is often seen as something it is not, as there are a lot of misconceptions that simply don’t want to go away. Sometimes, because some want to smear bitcoin, and often because others fail to do their homework properly. Here are a few common misconceptions about bitcoin that the average joe keeps on believing:
5. It’s all a big Ponzi scheme
Ponzi schemes usually involve a central entity trying to persuade possible investors, telling them they will make a huge profit. In these schemes, the only way those on top can make money is at the expense of others. Bitcoin is a decentralized peer-to-peer currency, there is no central entity. It does not require a constant flow of money to sustain itself, not does it require new adopters to survive.
Moreover, it is important to note that, if it was all a Ponzi scheme, we would assume Satoshi Nakamoto, bitcoin’s creator, would live an extravagant lifestyle. He owns roughly 1 million bitcoins – a little over US$1 billion at the time of press. Yet, these coins haven’t been moved in years.
4. Bitcoin is mostly used by criminals
It is true that Silk Road, an infamous dark web marketplace, helped bitcoin grow in 2011. In 2013, the FBI took down the Silk Road, but that did not stop bitcoin from growing. Recently, bitcoin’s market cap hit $15 billion, as the ecosystem of legitimate businesses who accept bitcoin keeps on growing. In some cases, businesses can even get a special license that allows them to legally accept bitcoin as a form of payment.
Nevertheless, bitcoin is used by criminals, just like fiat currencies, commodities, app store gift cards, gym membership vouchers and pretty much anything with value.
3. Bitcoins can only be used online
In the early days, it was very hard to use bitcoin as almost no one was accepting the cryptocurrency. Nowadays, however, there are thousands of businesses accepting bitcoin throughout the world, and one can not only buy food, but also get a haircut, hire a lawyer, and even get a lightsaber. There’s a useful app out there, called Bitcoin Map, that lets users know which brick-and-mortar businesses around them accept bitcoin.
Here’s a video of a transaction at Subway:
2. Bitcoins can easily be stolen
Hackers have been successful at stealing large amounts of bitcoin in the past, but that doesn’t mean the cryptocurrency isn’t safe. Most bitcoin thefts were a result of inadequate wallet security, and since then risk-mitigating measures have been taken. Yet, these high-profile bitcoin heists can make the currency look unsafe.
Users need to properly secure their wallets , and that means backing them up and encrypting them. Offline wallets are the safest way one can store their bitcoins, and even these should be backed up.
1. Transactions are completely anonymous
Although you don’t need a bank account or a social security number to pay with bitcoin, transactions aren’t completely anonymous. Every transaction is publicly recorded on the blockchain in order to prevent certain actions, such as spending the same bitcoin twice.
Granted, it’s hard to use bitcoin transactions to uncover someone’s real identity, but it is possible. If someone’s transactions are tracked down to an exchange, for example, it is possible authorities uncover the person’s identity through a subpoena. To protect one’s privacy, a bitcoin address should only be used once.
If you liked this article, follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin, cryptocurrency, and technology news.
5. It’s all a big Ponzi scheme
Ponzi schemes usually involve a central entity trying to persuade possible investors, telling them they will make a huge profit. In these schemes, the only way those on top can make money is at the expense of others. Bitcoin is a decentralized peer-to-peer currency, there is no central entity. It does not require a constant flow of money to sustain itself, not does it require new adopters to survive.
Moreover, it is important to note that, if it was all a Ponzi scheme, we would assume Satoshi Nakamoto, bitcoin’s creator, would live an extravagant lifestyle. He owns roughly 1 million bitcoins – a little over US$1 billion at the time of press. Yet, these coins haven’t been moved in years.
4. Bitcoin is mostly used by criminals
It is true that Silk Road, an infamous dark web marketplace, helped bitcoin grow in 2011. In 2013, the FBI took down the Silk Road, but that did not stop bitcoin from growing. Recently, bitcoin’s market cap hit $15 billion, as the ecosystem of legitimate businesses who accept bitcoin keeps on growing. In some cases, businesses can even get a special license that allows them to legally accept bitcoin as a form of payment.
Nevertheless, bitcoin is used by criminals, just like fiat currencies, commodities, app store gift cards, gym membership vouchers and pretty much anything with value.
3. Bitcoins can only be used online
In the early days, it was very hard to use bitcoin as almost no one was accepting the cryptocurrency. Nowadays, however, there are thousands of businesses accepting bitcoin throughout the world, and one can not only buy food, but also get a haircut, hire a lawyer, and even get a lightsaber. There’s a useful app out there, called Bitcoin Map, that lets users know which brick-and-mortar businesses around them accept bitcoin.
Here’s a video of a transaction at Subway:
2. Bitcoins can easily be stolen
Hackers have been successful at stealing large amounts of bitcoin in the past, but that doesn’t mean the cryptocurrency isn’t safe. Most bitcoin thefts were a result of inadequate wallet security, and since then risk-mitigating measures have been taken. Yet, these high-profile bitcoin heists can make the currency look unsafe.
Users need to properly secure their wallets , and that means backing them up and encrypting them. Offline wallets are the safest way one can store their bitcoins, and even these should be backed up.
1. Transactions are completely anonymous
Although you don’t need a bank account or a social security number to pay with bitcoin, transactions aren’t completely anonymous. Every transaction is publicly recorded on the blockchain in order to prevent certain actions, such as spending the same bitcoin twice.
Granted, it’s hard to use bitcoin transactions to uncover someone’s real identity, but it is possible. If someone’s transactions are tracked down to an exchange, for example, it is possible authorities uncover the person’s identity through a subpoena. To protect one’s privacy, a bitcoin address should only be used once.
If you liked this article, follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin, cryptocurrency, and technology news.
Another Bitcoin Record: Over 1000 Bitcoin ATMs Installed Globally
The number of Bitcoin ATMs has crossed the 1000 mark according to CoinATMRadar which uses a map to show Bitcoin or other cryptocurrency ATM locations as well as alternative cryptocurrency exchange services.
The US is the champion
There are now 1002 of them with the majority of these machines - 621 - located in the US followed by Canada. South Africa is the only country in Africa on the list with just one machine.
For the Bitcoin ATM manufacturers, Genesis Coin tops the list with its branded machines in 442 locations while Lamassu has 197 and General Bytes theirs in 159 locations.
The US figure didn’t come as a surprise as the country seems to be the next major market for Bitcoin in a couple of years. Several factors are working to its advantage. They include the economy, the currency, the population, higher disposable income and more importantly, events in China.
Basically, the ATM provides one of the easiest ways to buy and sell Bitcoins as a familiar machine that many people have been used to in the traditional sense.
In its blog published on Friday, Feb. 17, CoinATMRadar notes that the last seven days had an average of four machines installed per day, which means almost 30 new machines were installed during last week.
As at May last year, there were 639 Bitcoin ATMs in different parts of the world according to CoinATMRadar. The new figure shows about 56 percent increase in nine months. In 2014, the same website showed there were 211 Bitcoin ATMs operating on six continents.
A Technavio global ATM market report last year says the growing need for automated teller machines including Bitcoin ATMs in developing nations such as Nigeria, India and Kenya is propelling the growth of the global ATM market.
Bitcoin price correlation
Whether there is a correlation between the increase in the number of Bitcoin ATMs and the price movement of the digital currency or its adoption is yet to be established.
Aside those with a commercial focus, some of the private organizations that have unveiled their personal Bitcoin ATM machine include Deloitte and Ernst & Young (EY), one of the “Big Four” accounting corporations in the world, which installed a Bitcoin ATM in their public office in Switzerland, enabling its clients and employees to purchase and sell Bitcoins.
The US is the champion
There are now 1002 of them with the majority of these machines - 621 - located in the US followed by Canada. South Africa is the only country in Africa on the list with just one machine.
For the Bitcoin ATM manufacturers, Genesis Coin tops the list with its branded machines in 442 locations while Lamassu has 197 and General Bytes theirs in 159 locations.
The US figure didn’t come as a surprise as the country seems to be the next major market for Bitcoin in a couple of years. Several factors are working to its advantage. They include the economy, the currency, the population, higher disposable income and more importantly, events in China.
Basically, the ATM provides one of the easiest ways to buy and sell Bitcoins as a familiar machine that many people have been used to in the traditional sense.
In its blog published on Friday, Feb. 17, CoinATMRadar notes that the last seven days had an average of four machines installed per day, which means almost 30 new machines were installed during last week.
As at May last year, there were 639 Bitcoin ATMs in different parts of the world according to CoinATMRadar. The new figure shows about 56 percent increase in nine months. In 2014, the same website showed there were 211 Bitcoin ATMs operating on six continents.
A Technavio global ATM market report last year says the growing need for automated teller machines including Bitcoin ATMs in developing nations such as Nigeria, India and Kenya is propelling the growth of the global ATM market.
Bitcoin price correlation
Whether there is a correlation between the increase in the number of Bitcoin ATMs and the price movement of the digital currency or its adoption is yet to be established.
Aside those with a commercial focus, some of the private organizations that have unveiled their personal Bitcoin ATM machine include Deloitte and Ernst & Young (EY), one of the “Big Four” accounting corporations in the world, which installed a Bitcoin ATM in their public office in Switzerland, enabling its clients and employees to purchase and sell Bitcoins.
Bitcoin Fork Soon? Bitcoin Unlimited Surges Past SegWit, Core Blocks Drop Below 75%
Bitcoin Unlimited blocks mined have reached a new high, passing SegWit and indicating that a hard fork may be just around the corner.
Of the last 144 blocks over the last 24 hours, blocks mined by the Bitcoin Unlimited client have reached 28.5 percent of the network total. This is the second time Unlimited has passed SegWit adoption this month and the first time Bitcoin Core blocks mined have dropped below 75 percent of the network total.
Bitcoin’s network load and resulting scaling issues have been the source of debate and controversy in the community. In particular, the impetus to hard fork Bitcoin to raise the block size limit beyond one megabyte has been a central issue to this debate.
A new high in Bitcoin Unlimited’s adoption, which would allow miners to mine blocks larger than one megabyte, may indicate that the block size limit may be raised soon with the goal of alleviating Bitcoin’s network congestion problems.
Bitcoin’s scaling problems have taken their toll
The Bitcoin network’s activity has increasingly pushed the limits of its capacity recently. Over the last year, average block size, median confirmation time and mempool transaction count have all risen significantly. BitcoinFees.info has charted transaction fees over the last six months, which have seen a steady increase, especially this year.
Now, the average fee to have a transaction included in the next six blocks or roughly one hour is $0.37, higher than many card processors’ fees.
For reference, the popular point-of-sale system Square charges 2.75 percent on swiped transactions, or roughly 28 cents on a ten-dollar transaction- a couple of pints of beer, for example. That same transaction with Bitcoin would cost 37 cents and take over an hour to confirm.
User emsiak recently posted on Reddit in /r/Bitcoin about his troubles attempting to move a total of 0.05BTC that had accumulated from micropayments from web advertising revenue, but was unable to as the suggested fee was larger than the transaction amount.
User coinspace encouraged Bitcoin users to concentrate all micropayments, noting that “[d]ue to fees, any output worth about $0.1/0.1mBTC or less is worthless.”
More companies and users switching to other coins
As a consequence of Bitcoin’s scaling issues, more and more companies are exploring alternatives for payment methods of both reduced cost and faster transaction times.
Erik Voorhees of streamlined cryptocurrency exchange ShapeShift.io has publicly mused about the challenges presented by Bitcoin’s fees, stating that “the higher it gets, the less useful the system becomes.”
He has also admitted to holding Ethereum to use for payments because of Bitcoin’s issues:
Cryptocurrency exchange Nocks, primarily used as an accompaniment facilitating the use of Dutch-based coin Gulden, recently dropped Bitcoin support altogether.
This was partially because of issues surrounding Bitcoin’s purported reputation as a darknet market currency but also because of its untenable transaction fees and times, which stand in stark contrast to Gulden, which has attempted to make a name for itself as an everyday payment method.
Of the last 144 blocks over the last 24 hours, blocks mined by the Bitcoin Unlimited client have reached 28.5 percent of the network total. This is the second time Unlimited has passed SegWit adoption this month and the first time Bitcoin Core blocks mined have dropped below 75 percent of the network total.
Bitcoin’s network load and resulting scaling issues have been the source of debate and controversy in the community. In particular, the impetus to hard fork Bitcoin to raise the block size limit beyond one megabyte has been a central issue to this debate.
A new high in Bitcoin Unlimited’s adoption, which would allow miners to mine blocks larger than one megabyte, may indicate that the block size limit may be raised soon with the goal of alleviating Bitcoin’s network congestion problems.
Bitcoin’s scaling problems have taken their toll
The Bitcoin network’s activity has increasingly pushed the limits of its capacity recently. Over the last year, average block size, median confirmation time and mempool transaction count have all risen significantly. BitcoinFees.info has charted transaction fees over the last six months, which have seen a steady increase, especially this year.
Now, the average fee to have a transaction included in the next six blocks or roughly one hour is $0.37, higher than many card processors’ fees.
For reference, the popular point-of-sale system Square charges 2.75 percent on swiped transactions, or roughly 28 cents on a ten-dollar transaction- a couple of pints of beer, for example. That same transaction with Bitcoin would cost 37 cents and take over an hour to confirm.
User emsiak recently posted on Reddit in /r/Bitcoin about his troubles attempting to move a total of 0.05BTC that had accumulated from micropayments from web advertising revenue, but was unable to as the suggested fee was larger than the transaction amount.
User coinspace encouraged Bitcoin users to concentrate all micropayments, noting that “[d]ue to fees, any output worth about $0.1/0.1mBTC or less is worthless.”
More companies and users switching to other coins
As a consequence of Bitcoin’s scaling issues, more and more companies are exploring alternatives for payment methods of both reduced cost and faster transaction times.
Erik Voorhees of streamlined cryptocurrency exchange ShapeShift.io has publicly mused about the challenges presented by Bitcoin’s fees, stating that “the higher it gets, the less useful the system becomes.”
He has also admitted to holding Ethereum to use for payments because of Bitcoin’s issues:
Cryptocurrency exchange Nocks, primarily used as an accompaniment facilitating the use of Dutch-based coin Gulden, recently dropped Bitcoin support altogether.
This was partially because of issues surrounding Bitcoin’s purported reputation as a darknet market currency but also because of its untenable transaction fees and times, which stand in stark contrast to Gulden, which has attempted to make a name for itself as an everyday payment method.
History of Bitcoin in 500 words
The concept of bitcoin remains baffling to a lot of people Albeit this cryptocurrency has only been around for eight years, there are so many things people want to know about bitcoin. The currency has had a rather colored past as well, spurring multiple waves of mainstream media attention in the process. The below article will summarize Bitcoin’s 8 year history in under 500 words.
The History of Bitcoin In Short
Bitcoin was created by Satoshi Nakamoto in 2009. It took nearly two weeks after its initial release until the first official transaction on the network occurred between Satoshi and Hal Finney. Moreover, it took some time until the first financial transaction denominated in bitcoin took place. This day is known as Bitcoin Pizza Day, an event that is celebrated around the world every single year.
Despite its potential, bitcoin hasn’t been without flaws. A major flaw was discovered in August of 2010 which effectively allowed users to create an infinite amount of bitcoins. Thankfully, any wrongdoings were erased from the blockchain and a software update was released. So far, it is the only major bug to be found – and exploited – in the bitcoin protocol code to date.
It took until 2011 until bitcoin got taken more seriously. WikiLeaks embraced bitcoin as a donation method after being cut off by credit card issuers and PayPal. One year later, Bitcoin made its first TV appearance in an episode of The Good Wife. Quite a few shows have featured bitcoin ever since, albeit nearly always in a criminal setting. Considering the popular darknet marketplace Silk Road was created in 2011 and gained significant popularity throughout 2012, it is not hard to see where this criminal angle comes from. The platform was eventually taken offline by the FBI in 2014.
Things started to unravel a bit in 2013, as the Mt. Gox exchange had bank accounts seized by the US authorities. Operating an unlicensed bitcoin exchange while serving US customers was one of the final nails in the coffin for Mt. Gox before declaring bankruptcy in 2014. Several hacks affected the bitcoin ecosystem in 2013 as well, albeit the payment technology itself was never breached. On the upside, M-Pesa and Bitcoin came together in Kenya under the Bitpesa banner and turned into a very successful company.
Bitcoin was ruled a form of money in August of 2013. Ever since that time, various countries have started debating how they want to label bitcoin moving forward. Japan will legalize cryptocurrency later this year. During 2014 and 2015, merchants started accepting bitcoin payments, bringing their total to 160,000 in August of 2015. That number has continued to grow and includes some of the world’s largest platforms, including Microsoft and Overstock.com.
2016 Has been the year during which the bitcoin price exploded in the final 6 months. Bitcoin was deemed one of the world’s best performing assets for the calendar year, and that bullish trend is still visible today. With the number of bitcoin ATMs around the world reaching the 1,000 mark soon, the future looks very bright for cryptocurrency. There are exciting times to live in, that much is certain.
If you liked this article, follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin, cryptocurrency, and technology news.
The History of Bitcoin In Short
Bitcoin was created by Satoshi Nakamoto in 2009. It took nearly two weeks after its initial release until the first official transaction on the network occurred between Satoshi and Hal Finney. Moreover, it took some time until the first financial transaction denominated in bitcoin took place. This day is known as Bitcoin Pizza Day, an event that is celebrated around the world every single year.
Despite its potential, bitcoin hasn’t been without flaws. A major flaw was discovered in August of 2010 which effectively allowed users to create an infinite amount of bitcoins. Thankfully, any wrongdoings were erased from the blockchain and a software update was released. So far, it is the only major bug to be found – and exploited – in the bitcoin protocol code to date.
It took until 2011 until bitcoin got taken more seriously. WikiLeaks embraced bitcoin as a donation method after being cut off by credit card issuers and PayPal. One year later, Bitcoin made its first TV appearance in an episode of The Good Wife. Quite a few shows have featured bitcoin ever since, albeit nearly always in a criminal setting. Considering the popular darknet marketplace Silk Road was created in 2011 and gained significant popularity throughout 2012, it is not hard to see where this criminal angle comes from. The platform was eventually taken offline by the FBI in 2014.
Things started to unravel a bit in 2013, as the Mt. Gox exchange had bank accounts seized by the US authorities. Operating an unlicensed bitcoin exchange while serving US customers was one of the final nails in the coffin for Mt. Gox before declaring bankruptcy in 2014. Several hacks affected the bitcoin ecosystem in 2013 as well, albeit the payment technology itself was never breached. On the upside, M-Pesa and Bitcoin came together in Kenya under the Bitpesa banner and turned into a very successful company.
Bitcoin was ruled a form of money in August of 2013. Ever since that time, various countries have started debating how they want to label bitcoin moving forward. Japan will legalize cryptocurrency later this year. During 2014 and 2015, merchants started accepting bitcoin payments, bringing their total to 160,000 in August of 2015. That number has continued to grow and includes some of the world’s largest platforms, including Microsoft and Overstock.com.
2016 Has been the year during which the bitcoin price exploded in the final 6 months. Bitcoin was deemed one of the world’s best performing assets for the calendar year, and that bullish trend is still visible today. With the number of bitcoin ATMs around the world reaching the 1,000 mark soon, the future looks very bright for cryptocurrency. There are exciting times to live in, that much is certain.
If you liked this article, follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin, cryptocurrency, and technology news.
China's Bitcoin Drama Isn't A Financial Meltdown
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Shutterstock
China, currently the world’s largest Bitcoin trader, has caused some complications for the cryptocurrency since the beginning of the year. The amount of Bitcoin traded in the country has plummeted from 10 million a day to 30,000-90,000 due to 'abnormal' changes in Bitcoin prices, spurred on by a crackdown in regulations.
Cracking down
On January 11, the central bank announced the investigation of Bitcoin exchanges in Beijing and Shanghai for potential involvement in unlawful activities, such as money laundering, margin trading, and transferring funds abroad. By the end of the day, Bitcoin prices declined more than 10%.
More than a week later, on January 22, China’s three largest exchanges ended free Bitcoin trading to curb speculation. With a fee imposed, Bitcoin trading dropped further.
And on February 9, the People's Bank of China met with nine Bitcoin exchanges to remind them of potential risks and to curb capital flight. Later that day, the two largest exchanges, OkCoin and Huobi.com, temporarily halted withdrawals from their platforms. BTCChina too announced a 72-hour waiting period for withdrawals. Additional platforms, including BitBays, BTC100, BTCTrade, CHBTC, HaoBTC and Yunbi, imposed withdrawal constraints the next day.
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The increased scrutiny has left investors are unsure what to expect going forward, as the potential for further regulation looms large. But this isn't the first time they've found themselves in such a position.
A rocky relationship
Bitcoin’s relationship with China has been rocky for years.
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Back in December 2013, the People’s Bank of China forbade firms from accepting Bitcoin and restricted banks from converting Bitcoin into RMB due to concerns over financial stability. Financial and payment services were prevented from participating in Bitcoin-related business. As a result of the regulations, in April 2014, Chinese banks closed down the trading accounts of the largest Bitcoin platforms.
These measures resulted in not only declines in trading volume and Bitcoin prices, but also panic among investors.
Bitcoin Prices, December 2013 through February 2017
bitcoin
Source: Bitcoinity
Bitcoin prices plunged 29% between December 5 (when regulations were announced) and the end of the month. Prices rose steadily toward the end of 2015 as Chinese investors gained interest in the virtual currency, but it all feels like deja vu now.
Charles Hayter, CEO of CryptoCompare, stated in January, that“the market has gone from being led up by the Chinese to dragged down by panic.”
Another major market meltdown?
But despite the current Bitcoin market roller coaster ride, we have to put things into perspective. This isn’t the Chinese stock market meltdown of 2015.
Just before that crash, the total market was valued at over $10 trillion and the Shanghai Stock Exchange made up $5.9 trillion of that sum. In just two weeks, it lost 30% of its value. The losses were enormous and affected investors large and small, resulting in financial panic due to the bursting of the stock asset price bubble.
Bitcoin’s recent price fluctuations are not as large and have been relatively contained among a smaller set of investors. The total amount of Bitcoin is also limited to a much smaller dollar sum.
The total number of Bitcoin in existence amounts to 21 million, so when the price reaches $1,000 (as it recently has), the total volume is worth $21 billion, and at $900, close to $19 billion. Considering this is a global market, $19-21 billion is not much. And the Chinese share of this are even less. The market is not a major financial one by any means, and its ties to the real economy are limited.
Good for the long game
What’s more, regulations are not anathema to a functioning Bitcoin system. Even though they have led to investor panic now, in the long run, they should be viewed as a positive development toward legitimizing the use of the cryptocurrency.
Volatility and panic associated with the implementation of these regulations should be taken in stride as normal side-effects of reining in a burgeoning market. Certainly, the wild ride and decreased trading volume in China have created new winners and losers in the Bitcoin market. However, the fact that Chinese regulators are taking Bitcoin seriously should be a positive sign for users.
Follow me on Twitter, at @SaraHsuChina.
Shutterstock
China, currently the world’s largest Bitcoin trader, has caused some complications for the cryptocurrency since the beginning of the year. The amount of Bitcoin traded in the country has plummeted from 10 million a day to 30,000-90,000 due to 'abnormal' changes in Bitcoin prices, spurred on by a crackdown in regulations.
Cracking down
On January 11, the central bank announced the investigation of Bitcoin exchanges in Beijing and Shanghai for potential involvement in unlawful activities, such as money laundering, margin trading, and transferring funds abroad. By the end of the day, Bitcoin prices declined more than 10%.
More than a week later, on January 22, China’s three largest exchanges ended free Bitcoin trading to curb speculation. With a fee imposed, Bitcoin trading dropped further.
And on February 9, the People's Bank of China met with nine Bitcoin exchanges to remind them of potential risks and to curb capital flight. Later that day, the two largest exchanges, OkCoin and Huobi.com, temporarily halted withdrawals from their platforms. BTCChina too announced a 72-hour waiting period for withdrawals. Additional platforms, including BitBays, BTC100, BTCTrade, CHBTC, HaoBTC and Yunbi, imposed withdrawal constraints the next day.
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The increased scrutiny has left investors are unsure what to expect going forward, as the potential for further regulation looms large. But this isn't the first time they've found themselves in such a position.
A rocky relationship
Bitcoin’s relationship with China has been rocky for years.
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Back in December 2013, the People’s Bank of China forbade firms from accepting Bitcoin and restricted banks from converting Bitcoin into RMB due to concerns over financial stability. Financial and payment services were prevented from participating in Bitcoin-related business. As a result of the regulations, in April 2014, Chinese banks closed down the trading accounts of the largest Bitcoin platforms.
These measures resulted in not only declines in trading volume and Bitcoin prices, but also panic among investors.
Bitcoin Prices, December 2013 through February 2017
bitcoin
Source: Bitcoinity
Bitcoin prices plunged 29% between December 5 (when regulations were announced) and the end of the month. Prices rose steadily toward the end of 2015 as Chinese investors gained interest in the virtual currency, but it all feels like deja vu now.
Charles Hayter, CEO of CryptoCompare, stated in January, that“the market has gone from being led up by the Chinese to dragged down by panic.”
Another major market meltdown?
But despite the current Bitcoin market roller coaster ride, we have to put things into perspective. This isn’t the Chinese stock market meltdown of 2015.
Just before that crash, the total market was valued at over $10 trillion and the Shanghai Stock Exchange made up $5.9 trillion of that sum. In just two weeks, it lost 30% of its value. The losses were enormous and affected investors large and small, resulting in financial panic due to the bursting of the stock asset price bubble.
Bitcoin’s recent price fluctuations are not as large and have been relatively contained among a smaller set of investors. The total amount of Bitcoin is also limited to a much smaller dollar sum.
The total number of Bitcoin in existence amounts to 21 million, so when the price reaches $1,000 (as it recently has), the total volume is worth $21 billion, and at $900, close to $19 billion. Considering this is a global market, $19-21 billion is not much. And the Chinese share of this are even less. The market is not a major financial one by any means, and its ties to the real economy are limited.
Good for the long game
What’s more, regulations are not anathema to a functioning Bitcoin system. Even though they have led to investor panic now, in the long run, they should be viewed as a positive development toward legitimizing the use of the cryptocurrency.
Volatility and panic associated with the implementation of these regulations should be taken in stride as normal side-effects of reining in a burgeoning market. Certainly, the wild ride and decreased trading volume in China have created new winners and losers in the Bitcoin market. However, the fact that Chinese regulators are taking Bitcoin seriously should be a positive sign for users.
Follow me on Twitter, at @SaraHsuChina.
Friday, February 17, 2017
Bitcoin traders look to other digital currencies for returns
Bitcoin trading volumes have shrunk since China's regulators clamped down on the market. Now digital currency traders are looking to more volatile alternatives to make returns.
Last week, Chinese authorities took steps to regulate the bitcoin market. Chinese bitcoin exchanges are now charging trading fees and improving their anti-money laundering systems and customer identification measures.
These moves have seen bitcoin liquidity tighten and the elimination of the "China Bitcoin Volumizer", low relevance, inflated, algorithmic trading, according to Fran Strajnar, co-founder & CEO of data and research company Brave New Coin.
"When trading was free, there was an incentive to do millions of very, very small trades very fast. Now we finally have a more transparent Chinese trading environment where the current volumes are real and accountable," he told CNBC via email.
"From the data we have at our analytics and research firm BNC, we estimate the drop in real 'Chinese Volume' has only been 20 percent. Still a significant drop, yes, but not as significant as recent media has been led to believe."
A HaoBTC bitcoin mine site manager checks mining equipment inside their bitcoin mine near Kongyuxiang, Sichuan, China.
Paul Ratje | The Washington Post | Getty Images
A HaoBTC bitcoin mine site manager checks mining equipment inside their bitcoin mine near Kongyuxiang, Sichuan, China.
After hitting a low last week of $954, Bitcoin prices have steadily climbed back to around $1,031. The trading range for bitcoin has narrowed, leading to lower volatility, and some traders are looking elsewhere to profit from bigger price movements.
"There is certainly a move by traders looking for better returns in more risky crypto projects as risk on risk off mentality takes hold," Charles Hayter, chief executive and founder of digital currency comparison website CryptoCompare, told CNBC via email.
There are several bitcoin alternatives, such as Ethereum, Ripple, Monero and others. These are generally much lower value for a single unit compared to bitcoin and have a smaller market cap, but as a result enjoy more volatility.
For instance, Ethereum currently trades around $12.79, but was worth $8.04 at the start of the year, an increase of almost 60 percent. Year-to-date , bitcoin's price has increased 3.6 percent.
"Ethereum has recently been plagued with troubles such as spamming the network although these look to have been put to bed. A positive newsflow has switched sentiment, with its founder announcing clear development plans as well as larger banks, such as JP Morgan endorsing the technology through joining enterprise ethereum," explained Hayter.
These alternative crypto currencies also hold some advantages over bitcoin.
"Many of the larger alt coins have the same use cases as Bitcoin. At the same time they benefit from the second mover advantage. They had the opportunity to copy Bitcoin but better. Many people believe and I agree there are also significant advantages to being the first mover given the strong network effect," Bram de Haas, managing partner at Schildpad & De Haas Investments, told CNBC via email.
"It's not just a cake being divided among altcoins though. Niche coins with specialized features can have stronger use cases that may accelerate the technology benefiting the entire space."
A more stable bitcoin with lower volatility may appeal to many investors, but gradually these alternative coins are becoming more well-known and boast features such as anonymity and the ability for private trading.
"The other anonymous crypto currencies are also seeing more attention through upgrading their GUI's, amongst other upgrades, as well as making a case for libertarians with their more advanced privacy centric focus," said Hayter.
Follow CNBC International on Twitter and Facebook.
Last week, Chinese authorities took steps to regulate the bitcoin market. Chinese bitcoin exchanges are now charging trading fees and improving their anti-money laundering systems and customer identification measures.
These moves have seen bitcoin liquidity tighten and the elimination of the "China Bitcoin Volumizer", low relevance, inflated, algorithmic trading, according to Fran Strajnar, co-founder & CEO of data and research company Brave New Coin.
"When trading was free, there was an incentive to do millions of very, very small trades very fast. Now we finally have a more transparent Chinese trading environment where the current volumes are real and accountable," he told CNBC via email.
"From the data we have at our analytics and research firm BNC, we estimate the drop in real 'Chinese Volume' has only been 20 percent. Still a significant drop, yes, but not as significant as recent media has been led to believe."
A HaoBTC bitcoin mine site manager checks mining equipment inside their bitcoin mine near Kongyuxiang, Sichuan, China.
Paul Ratje | The Washington Post | Getty Images
A HaoBTC bitcoin mine site manager checks mining equipment inside their bitcoin mine near Kongyuxiang, Sichuan, China.
After hitting a low last week of $954, Bitcoin prices have steadily climbed back to around $1,031. The trading range for bitcoin has narrowed, leading to lower volatility, and some traders are looking elsewhere to profit from bigger price movements.
"There is certainly a move by traders looking for better returns in more risky crypto projects as risk on risk off mentality takes hold," Charles Hayter, chief executive and founder of digital currency comparison website CryptoCompare, told CNBC via email.
There are several bitcoin alternatives, such as Ethereum, Ripple, Monero and others. These are generally much lower value for a single unit compared to bitcoin and have a smaller market cap, but as a result enjoy more volatility.
For instance, Ethereum currently trades around $12.79, but was worth $8.04 at the start of the year, an increase of almost 60 percent. Year-to-date , bitcoin's price has increased 3.6 percent.
"Ethereum has recently been plagued with troubles such as spamming the network although these look to have been put to bed. A positive newsflow has switched sentiment, with its founder announcing clear development plans as well as larger banks, such as JP Morgan endorsing the technology through joining enterprise ethereum," explained Hayter.
These alternative crypto currencies also hold some advantages over bitcoin.
"Many of the larger alt coins have the same use cases as Bitcoin. At the same time they benefit from the second mover advantage. They had the opportunity to copy Bitcoin but better. Many people believe and I agree there are also significant advantages to being the first mover given the strong network effect," Bram de Haas, managing partner at Schildpad & De Haas Investments, told CNBC via email.
"It's not just a cake being divided among altcoins though. Niche coins with specialized features can have stronger use cases that may accelerate the technology benefiting the entire space."
A more stable bitcoin with lower volatility may appeal to many investors, but gradually these alternative coins are becoming more well-known and boast features such as anonymity and the ability for private trading.
"The other anonymous crypto currencies are also seeing more attention through upgrading their GUI's, amongst other upgrades, as well as making a case for libertarians with their more advanced privacy centric focus," said Hayter.
Follow CNBC International on Twitter and Facebook.
Core Developer: Bitcoin is About Financial Sovereignty, Not Speed
Eric Lombrozo, a Bitcoin Core developer, believes that bitcoin is about financial independence and freedom, rather than providing a centralized settlement network which already serves as the backbone of today’s global financial ecosystem.
Over the past two years, various bitcoin communities, analysts and experts have debated on the characterization of bitcoin; specifically whether bitcoin demonstrates the qualities of a settlement network or digital gold.
Since the initial deployment of the bitcoin network, Bitcoin Core developers and other talents in the open source development community of bitcoin have focused on strengthening security measures to eliminate the presence of a central authority within the bitcoin network and ensure the network itself will not be compromised in the future.
The prioritization of security instead of flexibility and functionality as seen in alternative failed blockchain projects allowed bitcoin to prosper and evolve into a decentralized financial network that can’t be censored or restricted by a governing entity. It allowed users to settle payments with low fees and at relatively fast speeds, in comparison to traditional banking.
As the bitcoin network grew in size, transactional delays caused discomfort for daily users. Some individuals expressed their concerns over the increasing transaction fee of bitcoin, which is currently at US$0.32 for an average transaction. A $0.32 fee should be enough to have transactions confirmed within a few hours.
However, the Bitcoin Core development team and industry leading companies aren’t particularly concerned of the rising fees as it is the result of the prioritization of security. Bitcoin Core developers are focused on introducing software like Segregated Witness (Segwit), which allows bitcoin to scale significantly without imposing major security risks unlike hard forks.
Users and investors shouldn’t necessarily be overly concerned about the scalability of bitcoin as well because there already exists a scalability and transaction malleability solution in Segwit and two-layer solutions such as Lightning and TumbleBit that can contribute to the scalability of bitcoin. Lightning in particular enables the facilitation of micropayments, that open doors for many applications which intend to rely on bitcoin micropayments.
Bitcoin is still a technology at an early stage. Currently, the Bitcoin network allows users to make payments that weren’t possible before. Before bitcoin, users couldn’t imagine the possibility of transacting millions of dollars within a few hours with less than $1 in transaction fee without the presence and involvement of a governing entity or a bank.
As Lombrozo explains, “Bitcoin is about financial sovereignty. If you think it’s merely about fast and cheap you’re short-changing yourself.”
The contemporary structure of bitcoin makes it difficult for two-layer solutions to exist. Soft forks like Segwit however allows bitcoin to eliminate transaction malleability and alter its design to welcome two-layer solutions that could enable bitcoin to become a fast, cheap and secure financial network for mainstream users.
Lombrozo believes that the activation of Segwit, implementation of layers and introduction of innovative solutions will allow bitcoin to serve as an important technology to provide users with financial freedom, privacy, independence and flexibility.
“You can make it fast and cheap with layers. Current network design does not allow it at large scale. I wish this weren’t so. Unfortunately HFs carry significant political cost and security risks. I also wish this weren’t so,” noted Lombrozo.
If you liked this article, follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin, cryptocurrency, and technology news.
Over the past two years, various bitcoin communities, analysts and experts have debated on the characterization of bitcoin; specifically whether bitcoin demonstrates the qualities of a settlement network or digital gold.
Since the initial deployment of the bitcoin network, Bitcoin Core developers and other talents in the open source development community of bitcoin have focused on strengthening security measures to eliminate the presence of a central authority within the bitcoin network and ensure the network itself will not be compromised in the future.
The prioritization of security instead of flexibility and functionality as seen in alternative failed blockchain projects allowed bitcoin to prosper and evolve into a decentralized financial network that can’t be censored or restricted by a governing entity. It allowed users to settle payments with low fees and at relatively fast speeds, in comparison to traditional banking.
As the bitcoin network grew in size, transactional delays caused discomfort for daily users. Some individuals expressed their concerns over the increasing transaction fee of bitcoin, which is currently at US$0.32 for an average transaction. A $0.32 fee should be enough to have transactions confirmed within a few hours.
However, the Bitcoin Core development team and industry leading companies aren’t particularly concerned of the rising fees as it is the result of the prioritization of security. Bitcoin Core developers are focused on introducing software like Segregated Witness (Segwit), which allows bitcoin to scale significantly without imposing major security risks unlike hard forks.
Users and investors shouldn’t necessarily be overly concerned about the scalability of bitcoin as well because there already exists a scalability and transaction malleability solution in Segwit and two-layer solutions such as Lightning and TumbleBit that can contribute to the scalability of bitcoin. Lightning in particular enables the facilitation of micropayments, that open doors for many applications which intend to rely on bitcoin micropayments.
Bitcoin is still a technology at an early stage. Currently, the Bitcoin network allows users to make payments that weren’t possible before. Before bitcoin, users couldn’t imagine the possibility of transacting millions of dollars within a few hours with less than $1 in transaction fee without the presence and involvement of a governing entity or a bank.
As Lombrozo explains, “Bitcoin is about financial sovereignty. If you think it’s merely about fast and cheap you’re short-changing yourself.”
The contemporary structure of bitcoin makes it difficult for two-layer solutions to exist. Soft forks like Segwit however allows bitcoin to eliminate transaction malleability and alter its design to welcome two-layer solutions that could enable bitcoin to become a fast, cheap and secure financial network for mainstream users.
Lombrozo believes that the activation of Segwit, implementation of layers and introduction of innovative solutions will allow bitcoin to serve as an important technology to provide users with financial freedom, privacy, independence and flexibility.
“You can make it fast and cheap with layers. Current network design does not allow it at large scale. I wish this weren’t so. Unfortunately HFs carry significant political cost and security risks. I also wish this weren’t so,” noted Lombrozo.
If you liked this article, follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin, cryptocurrency, and technology news.
Is Bitcoin Forming a New Price Floor at $1,000?
Charles Bovaird | Published on February 16, 2017 at 23:10 GMT
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Bitcoin appears to be stabilizing at a new price point.
The value of tokens on the public blockchain protocol reached a high of $1,039 today, continuing their recent run of stability. At press time, bitcoin has been trading above $1,000 since mid-day on 14th February, according to the CoinDesk Bitcoin Price Index (BPI).
Yet, while promising, the digital currency may need to spend more time above this level before it becomes a new support, analysts told CoinDesk.
Tim Enneking, chairman of digital asset hedge fund Crypto Asset Management, projected that if the market stays above $1,000 for the next few days, support at this level could be more plausible.
Still, he indicated he expects momentum will build around this point.
"I'd be astonished if we fell below $1,000 barring any external event," he said.
Vinny Lingham, former Bitcoin Foundation board member and CEO of identity startup Civic, however, voiced doubts about whether bitcoin could build support above the $1,000 mark.
"It certainly could, but I think it's unlikely," he told CoinDesk.
Lingham has previously predicted that the digital currency will consolidate around $1,000 for the next month or two, clarifying today that he believes bitcoin prices will "for the most part" fluctuate within $50 of this level.
Petar Zivkovski, COO of leveraged cryptocurrency trading platform Whaleclub, also emphasized that this price does not represent a "huge support level", but he was optimistic about the general trajectory.
"The more time price spends above $1,000, the stronger that support level becomes," he said.
One upcoming test, he said, will be if the price declines to retest the $1,000 level, and bounces back above it, providing evidence of support, and potentially, a sign the market could further strengthen.
Price charts image via Shutterstock
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Bitcoin appears to be stabilizing at a new price point.
The value of tokens on the public blockchain protocol reached a high of $1,039 today, continuing their recent run of stability. At press time, bitcoin has been trading above $1,000 since mid-day on 14th February, according to the CoinDesk Bitcoin Price Index (BPI).
Yet, while promising, the digital currency may need to spend more time above this level before it becomes a new support, analysts told CoinDesk.
Tim Enneking, chairman of digital asset hedge fund Crypto Asset Management, projected that if the market stays above $1,000 for the next few days, support at this level could be more plausible.
Still, he indicated he expects momentum will build around this point.
"I'd be astonished if we fell below $1,000 barring any external event," he said.
Vinny Lingham, former Bitcoin Foundation board member and CEO of identity startup Civic, however, voiced doubts about whether bitcoin could build support above the $1,000 mark.
"It certainly could, but I think it's unlikely," he told CoinDesk.
Lingham has previously predicted that the digital currency will consolidate around $1,000 for the next month or two, clarifying today that he believes bitcoin prices will "for the most part" fluctuate within $50 of this level.
Petar Zivkovski, COO of leveraged cryptocurrency trading platform Whaleclub, also emphasized that this price does not represent a "huge support level", but he was optimistic about the general trajectory.
"The more time price spends above $1,000, the stronger that support level becomes," he said.
One upcoming test, he said, will be if the price declines to retest the $1,000 level, and bounces back above it, providing evidence of support, and potentially, a sign the market could further strengthen.
Price charts image via Shutterstock
Monday, February 13, 2017
AI and #Bitcoin Are Driving the Next Big Hedge Fund Wave
AI and #Bitcoin Are Driving the Next Big Hedge Fund Wave https://goo.gl/fb/KJUUNM #technology #business #enterprise
The hedge fund world is on the verge of a new, Silicon Valley inspired revolution, the Third Wave. #AI #Crowdsourcing #DigitalCurrencies
The 1970s saw the rise of discretionary funds, where iconic investors like George Soros used their very human judgments to find new opportunities in the market. Then came the “quants” at funds like Renaissance Technologies, who found even greater opportunities through statistics and computer algorithms. Now, hedge funds are moving beyond the quants.
Numerai, a San Francisco hedge fund that makes trades using #machinelearning models built by thousands of anonymous data scientists paid in bitcoin. Funds such as Quantopian and Quantiacs are tapping the wisdom of the masses in other ways. And then there’s Polychain, a fund that invests exclusively in bitcoin and other digital “tokens” housed on a blockchain, the distributed online ledger that makes cryptocurrencies possible. As its name suggests, Polychain isn’t just investing in digital coins—it’s investing in a radically new breed of businesses owned, funded, and operated entirely by decentralized networks of anonymous online investors.
The hedge fund world is on the verge of a new, Silicon Valley inspired revolution, the Third Wave. #AI #Crowdsourcing #DigitalCurrencies
The 1970s saw the rise of discretionary funds, where iconic investors like George Soros used their very human judgments to find new opportunities in the market. Then came the “quants” at funds like Renaissance Technologies, who found even greater opportunities through statistics and computer algorithms. Now, hedge funds are moving beyond the quants.
Numerai, a San Francisco hedge fund that makes trades using #machinelearning models built by thousands of anonymous data scientists paid in bitcoin. Funds such as Quantopian and Quantiacs are tapping the wisdom of the masses in other ways. And then there’s Polychain, a fund that invests exclusively in bitcoin and other digital “tokens” housed on a blockchain, the distributed online ledger that makes cryptocurrencies possible. As its name suggests, Polychain isn’t just investing in digital coins—it’s investing in a radically new breed of businesses owned, funded, and operated entirely by decentralized networks of anonymous online investors.
Wednesday, February 8, 2017
Most Undervalued Cryptocurrencies of 2017
We asked the 9,000+ member Cryptocurrency Collectors Club which cryptocurrencies were the most undervalued. Below are the results. To read the full discussion join the private group on Facebook.
We’ll update the price and marketcap each month to track the results so join the mailing list to stay informed.
| NAME | SYMBOL | PRICE (2/8/17) | MARKETCAP (2/8/17) |
| Ripple | XRP | 0.007714 | $284,297,507 |
| Litecoin | LTC | 4.02 | $199,593,426 |
| Monero | XRM | 12.65 | $175,927,622 |
| Dash | DASH | 17.04 | $120,753,686 |
| Iconomi | ICN | 0.485193 | $42,211,791 |
| Steem | STEEM | 0.156249 | $36,303,991 |
| Doge | DOGE | 0.00021 | $22,646,315 |
| Game | GAME | 0.273376 | $16,548,174 |
| Bitshares | BTS | 0.004036 | $10,419,503 |
| Sia Coin | SC | 0.00041 | $9,452,904 |
| Stratis | STRAT | 0.09475 | $9,310,272 |
| NXT | NXT | 0.008801 | $8,791,849 |
| I/O Coin | IOC | 0.375018 | $6,117,042 |
| Nexus | NXS | 0.115955 | $5,414,717 |
| Bitbay | BAY | 0.001883 | $1,896,889 |
| Expanse | EXP | 0.32 | $1,684,806 |
| Burst | BURST | 0.000831 | $1,412,423 |
| OKCash | OK | 0.009088 | $637,568 |
| Crown | CRW | 0.018025 | $218,594 |
| Trollcoin | TROLL | 0.000084 | $46,305 |
Tuesday, February 7, 2017
Monero Pice Analysis – Big Losses Coming To XMR/BTC
A lot has happened for Monero over the past 24 hours, that much is certain. Significant losses in the BTC market were to be expected as bitcoin’s bullish trend continues. Luckily for XMR holders, this has not affected the USD value per coin all that much in fact. Once Monero’s value dips below 0.012 BTC, however, things could get very interesting.
A Mixed Day For Monero
Whenever an altcoin’s bitcoin value drops significantly, one would automatically assume the USD value to follow a similar path. That is not the case for Monero, though, as the altcoin’s USD value has increased by 1% over the past 24 hours. At a value of US$12.76 per XMR, things are looking quite positive for Monero. Then again, this increase is only due to bitcoin’s value going up, rather than Monero sparking any significant interest.
In fact, the gains for XMR could have been much higher, were it not for the retrace that followed once the US$13 value was surpassed. Interestingly enough, this retrace has nothing to do with bitcoin’s value decreasing, as the top cryptocurrency is still showing bullish behavior. Instead, it seems to indicate some of the money pumped into Monero is leaving the market in favor for other opportunities.
Over the past 24 hours, the XMR value has shifted from US$12.5 to US$13.13 and back. It is evident the volatility in the Monero market is far from over and traders should expect more of the same moving forward. To some people that will be more than welcome news, although it will not necessarily instill confidence in Monero for mainstream investors. Then again, no one will say no to some easy and quick profits in the altcoin market.
On the Bitcoin front, things are looking rather bad for Monero right now. The past 2 44 hours have been extremely volatile, with the value shifting between 0.01129 BTC and 0.01298 BTC. Right now, one XMR is hovering around the 0.012 BTC mark, although this trend will not be sustained for long. Anyone can see XMR will dip below 0.012 BTC very soon, although no one knows for sure what the bottom will be.
Header image courtesy of Shutterstock
NXT: IGNIS, the next child chain
IGNIS, the next child chain
Finally, after a process coordinated by wolffang that has been going on for several weeks where nxters could vote on the name of the first Ardor child chain, the community has chosen the name IGNIS!
screenshot-100916-201846
IGNIS will be created in the genesis block for Ardor. They will be credited to each account immediately in block #1 of Ardor in a ratio of 1NXT = 0.5IGNIS, according to the balance in each account at the moment of the snapshot.
Ignis will have all the features that the Nxt platform has today, except the ability to forge, which will be taken care of by Ardor. Nxt 1.0 won’t disappear, however. It will continue to operate together with Ardor and Ignis. Thus, you won’t really be getting rid of your NXT in order to get the new tokens. For more detailed information about this, you can visit the following link.
Moreover, Ignis already has an official twitter account. Become a follower so that you don’t lose any news about the upcoming Ardor child chain!
ignisSource: https://nxtforum.org/general-discussion/child-chain-name-poll-results and https://mynxt.info/poll/1862889932034180048
Monday, February 6, 2017
Why not litecoin?
Litecoin is almost identical to Bitcoin, only faster and cheaper
With all the controversy surrounding the block size debate I can´t help thinking why aren´t people turning to Litecoin (LTC) as a viable alternative to Bitcoin. I mean, it is basically the same as Bitcoin with a couple of small changes destined to make it faster, cheaper and most importantly: have a bigger network capacity.
LTC was created back in 2011 by a former Google Employee Charlie Lee, he is well known in the Bitcoin community and currently works at Bitcoin’s wallet provider and exchange Coinbase. It has been said that Charlie wanted Litecoin to be the Silver of Bitcoin; with this in mind he made a few changes to Bitcoin’s original code:
The Litecoin Network aims to process a block every 2.5 minutes, rather than Bitcoin 10 minutes: This not only makes Litecoin faster but it also gives it four times more capacity in the same amount of time. Currently Litecoin’s network is far from being congested but let’s assume for the sake of argument that it was having the same issues as Bitcoin is having today: so if one block is full, you would only have to wait 2.5 minutes to get your transaction on the next block, so even though Litecoin’s blocks are also limited to 1mb, it actually has the capacity to handle 4mb instead of Bitcoin’s 1mb in a 10 minute time frame
Litecoin uses scrypt in its proof-of-work algorithm, instead of Bitcoin’s Sha-256: To the regular user this makes no difference really, what is important to know is that Litecoin has a ton of hash rate destined to secure the network, it has the most reliable network out of all alt-coins and it would be practically impossible to generate a 51% attack.
The Litecoin Network will produce 84 million Litecoins, or four times as many currency units as will be issued by the Bitcoin Network: Not much to say about this really, but just like Bitcoin you have a maximum number of coins which will be issued, this basically prevents developers from issuing coins and dumping it into the market (unlike Central Banks).
The reason why Bitcoiners, Classic or Core supporters, don’t abandon Satoshi’s ship despite all the confusion and disappointment regarding the blocksize debate is simple and irrefutable: Bitcoin is the most widely accepted cryptocurrency in the world…by far!
1 Bitcoin is currently worth over $410 and has a market cap of over 6 billion USD. Moreover it’s accepted in thousands of merchants, traded in all exchanges and in all countries, from Venezuela to Canada and even in highly regulated economies like China. There is literally no boundaries to Bitcoin, they have the best online and mobile wallets and the most publicity, so why take a risk with a copy-cat like litecoin?
Well that is a question that everyone will have to answer for themselves, to me Litecoin is technologically superior, however I still hope for Bitcoin to succeed, because if it doesn´t the media will not only have a party destroying Bitcoin but the whole cryptocurrency scene will take a deadly hit.
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