Prominent Venture Capitalist Shares Bitcoin, Ethereum Investment Tips

Prominent Venture Capitalist Shares Bitcoin, Ethereum Investment Tips

    

Prominent venture capitalist and investment firm

co-founder Fred Wilson shares investment tips for Bitcoin and Ethereum traders in a blog post entitled “The Selloff.” His investment firm Union Square Ventures is based in New York.

Rollercoaster

Since the beginning of January, the cryptocurrency market and leading cryptocurrencies such as Bitcoin and Ethereum have experienced corrections. Some market corrections saw Bitcoin and Ethereum falling by as much as 30 percent, although the two cryptocurrencies recovered relatively quickly after their initial decline. In a blog post, Wilson noted that as he told his daughter who has also been an early investor in Bitcoin and Ethereum, he encourages traders and investors to consider what the price trend and value of Bitcoin and Ethereum will be in five to 10 years, not in the short-term.

Long-term

Admittedly, the majority of traders within the cryptocurrency market are looking to profit off minor corrections and rallies of cryptocurrencies such as Bitcoin and Ethereum. Hence, when the price of the two cryptocurrencies achieve new all-time highs or are in a position to sustain an upward momentum, traders tend to sell off and cause a price correction. However, like many early-stage investors, Wilson, who has invested in Bitcoin since 2013 and Ethereum since its launch in 2015, explained that most market corrections don’t hold much significance for his portfolio. Wilson is considering Bitcoin and Ethereum as long-term investments and is taking its long-term price trend into consideration.

Wilson writes:

“I have been buying Bitcoin since early 2013 and Ethereum since last year. I keep buying but never that much at one time. Just a little bit every week. You can build a pretty big position that way, but you have to be patient, and you have to keep at it.”

More importantly, Wilson emphasized that he doesn’t attempt to predict price corrections and market bottoms even though his predictions turned out to be accurate often. Because Wilson is maintaining a cryptocurrency portfolio as a long-term investment, he explained that he doesn’t focus on evaluating short-term price development of cryptocurrencies. 

Wilson adds:

“I don’t try to time market bottoms and market tops, even though I can sense when they are happening. I don’t try to predict where these assets are going in the near term and I just believe they will be a lot more valuable in five or ten years than they are now.

Many analysts within the cryptocurrency sector have also stated in the past that most traders will earn a profit if they only trade a monthly basis. Over the past few years, Bitcoin has consistently made gains on a monthly basis as it always bounced back from market corrections. “I am wrong a lot. But honestly, I don’t really care. I will keep buying into this correction or rally, whatever it turns out to be. Because the more important question is where these assets will be in five or ten years,” said Wilson.

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.

Alan Zibluk Markethive Founding Member

Cryptocurrencies Could Reach $5 Trillion in 5 Years, Says Wall Street Billionaire Bitcoin Investor

Cryptocurrencies Could Reach $5 Trillion in 5 Years, Says Wall Street Billionaire Bitcoin Investor

Cryptocurrencies Could Reach $5 Trillion in 5 Years, Says Wall Street Billionaire Bitcoin Investor

 

Billionaire investor Michael Novogratz, a former hedge fund manager who has been supportive of bitcoin, claims cryptocurrencies could be worth more than $5 trillion in five years, speaking at the CB Insights Future of Fintech conference in New York,

Get exclusive analysis of bitcoin and learn from our trading tutorials. Join Hacked.com for just $39 now.

For this to happen, companies have to develop business principles that satisfy regulators. The recent cyberattack that disabled computers and demanded $300 bitcoin ransom payments is one reminder of the challenge bitcoin faces, following May’s WannaCry attack. Such events reinforce bitcoin’s reputation as a currency favored by hackers and criminals.
 

Bitcoin Needs A Better Reputation

Novogratz, who formerly managed liquid strategies for Fortress Investment Group LLC and has addressed bitcoin investments since 2013, is among Wall Street’s most visible cryptocurrency supporters, according to Bloomberg. He urged cryptocurrency companies to pay their taxes since “nobody in that space” pays taxes. He said a core group of developers have good intentions, however.

The Nasdaq reached $5.4 trillion in 1999, he noted.

 

Hack’s Impact Not Great

The recent cyberattack did not impact bitcoin’s price, which at 2 p.m. Tuesday was $2,339.66. Some makers of chips used for bitcoin mining equipment did retreat, however. Bitcoin has gained more than 140% on the year, while Ether has skyrocketed from $8 to $240.

 

Challenges still face cryptocurrencies, Novogratz noted. The cyberattack struck amidst questions about the strength of the current cryptocurrency rally and about the scalability of digital assets, Novogratz noted.

This week’s downturn in crypto values shrunk the total market cap from $110 billion $90 billion, according to coinmarketcap.com.
 

Novogratz Bets On Bitcoin

Novogratz said he has profited on the bitcoin and ether surges, and still has 10% of his net worth in cryptos, including assets he acquired in initial coin offerings. He hopes to add more bitcoin if the price falls to $2,000, and more Ether should the price drop between $200 and $150.

Bitcoin could emerge as a store of wealth similar to gold, he said, while Ethereum could provide the foundation for future Facebooks and Googles. He suspects money transfers to securities settlement will discontinue using blockchain technology.

 

David Ogden
Entrepreneur

Entrepreneur David Ogden

 

Author: Lester Coleman

 

Alan Zibluk Markethive Founding Member

Bitcoin Scaling Project Segwit2x to Release New Code Tomorrow

    

Segwit2x is moving ahead in adherence with its previously announced timeline

Segwit2x, a controversial scaling proposal largely backed by the bitcoin network's enterprises and miners, is moving ahead in adherence with its previously announced timeline. In an email yesterday, Bloq co-founder and Segwit2x lead developer Jeff Garzik confirmed to CoinDesk that new code is set to be released on Friday, following two weeks of alpha release testing. The release is said to address issues and comments on the initial version. As such, the release is expected to mark a new phase for the proposal, which has been praised by some as a pragmatic solution to the network's perceived capacity issues and derided by others as a deal that misunderstands the nature of bitcoin development and the network's intended design.

Still, it has emerged as unique, given that it was able to bring together perhaps the largest contingent of companies and mining pools ever in support of a scaling proposal. Further, its support by a large majority of miners means, if released, the code could quickly gain the necessary backing from the network to activate the upgrade. If development continues as planned, bitcoin’s long-requested scaling optimization SegWit could be activated before August, with a hard fork to double the block size slated for three months later. This change, though, also remains a matter of controversy and critique.

Testing phase

So far, little is publicly known about the testing process.

According to those involved, the last two weeks of development have been dedicated to testing, with the firms involved using a new testnet ("testnet5") and a so-called faucet that spits out fake coins to test the system. A notable change this week was that the team tweaked the details of the hard fork portion of the agreement for the time being Companies involved in the project – including Abra, Bitfury, Blockchain, BTCC, OpenBazaar, Purse and Xapo – have been contributing to development and testing, though it’s still not public who's working on what. From the SegWit2x GitHub site, it is apparent that developers have been testing the code. Purse CTO Christopher Jeffrey, for instance, identified and fixed some bugs during this two-week stage, while others flagged and put forth other ideas.

Some companies are playing a smaller role in the effort. For example, OpenBazaar's lead backend developer, Chris Pacia, said that he is the sole developer from the firm to contribute to the project. He explained that he created a testnet5 DNS seed (which helps new nodes connect to the test network) and has offered occasional feedback. However, a few of the firms that pledged to assist in testing the code have been hesitant to reply to requests about their involvement. (Some critics have gone as far as to argue that the firms involved are "corporatizing" bitcoin, asserting that Segwit2x is a small group of companies in an invite-only Slack channel attempting to govern a decentralized online currency.)

Remaining questions

So, with the beta release almost here, what's next?

According to the schedule, mining pools are supposed to install the software on 14th June, which they can use to signal for the network to activate the upgrade from 21st July. Last week mining pools representing 80% of the bitcoin hashrate agreed to run the code that could lock in SegWit before 31st July. After that, three months later, is the hard fork to boost the block size. Of concern, is that the fork could potentially result in a split into two competing tradeable bitcoin assets if not everyone agrees to upgrade their software to the change. While this is the plan for later in the summer, bitcoin developer James Hilliard mentioned that the details of the 2MB hard fork portion are still up for debate.

"It’s unclear what the details are," he told CoinDesk.

Hilliard, who's contributed code to Segwit2x that might help to avoid a split into two assets, is skeptical of the hard fork timeline, calling it "unrealistic" – a sentiment shared by other Bitcoin Core contributors, who nearly universally reject the SegWit2x project. Developers have proposed various ways of doing the hard fork portion of the code, though Hilliard said it would be possible to wait and finish the code and logistics for increasing the block size parameter after SegWit activates. As usual, users will have to wait and see how this will unfold, and for now, speculate on the possible outcomes and their impact.

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.

Alan Zibluk Markethive Founding Member

Beware Cryptocurrency Gold Rush Mentality

Beware Cryptocurrency Gold Rush Mentality

Beware Cryptocurrency Gold Rush Mentality

On one hand, it's hard for many investors not to be excited about the meteoric rise of cryptocurrencies in the past few months. Bitcoin has roughly tripled in value since the beginning of the year, Ethereum is up by about 40 times, and Ripple, one of the newest arrivals on the scene, gained a shocking 3800%. What's more, the total market cap for the cryptocurrency industry has been steadily increasing as well, and more and more businesses are finding ways to incorporate digital currencies into their models and payment systems. However, with all of this excitement about the new industry, there are also many analysts approaching with caution. Aberdeen Asset Management is one of the latest firms to do so, suggesting that there is a virtual currency bubble which will, at some point, eventually burst.

Prices Driven By Speculation?

In an interview with Bloomberg, the head of global venture capital at Aberdeen Asset Management had some words of caution for investors considering the cryptocurrency field. Peter Denious said that "prices right now aren't being driven by network usage, they're being driven by speculation that tokens are going to appreciate. It's a gold-rush mentality." Denious and others point to the rapid increase in the number of initial coin offerings, or ICOs, as well as the quick gains in the price of tokens upon listing as two signs that a bubble is in effect. ICOs are tremendously successful, with many companies operating in the blockchain space making millions of dollars in minutes, even if they have no proven or distinctive idea backing their token.

Cryptocurrencies Not the Only Assets to Reach Heights

It may be important to note, however, that digital currencies are not the only assets which have seen gains to record levels in recent months. The returns on the leading cryptocurrencies so far in 2017 have been unparalleled in other areas, but other asset classes have also made impressive gains. Nasdaq and S&P 500 indices are at record levels, despite the widespread uncertainty surrounding global markets. At the same time, housing prices seem to have mostly recovered from an earlier burst.

Coin Telegraph suggests that the increase in asset prices may be due to large degrees of liquidity across global markets, thanks to quantitative easing by many central banks around the world. Considering this possible reason for the gains, it may not be just a cryptocurrency bubble that eventually bursts. If there is, in fact, a burgeoning bubble in either the real estate or equity worlds, those could have serious and long-lasting effects on the worldwide economy. As cryptocurrencies are untested, it's more difficult to say what the impact of a bubble burst would be in that area.

 

 

David Ogden
Entrepreneur

daviid ogden

 

Author: Nathan Reiff |

Alan Zibluk Markethive Founding Member

Bitcoin Development Similar to 1800s Gold Rush

Bitcoin Development Similar to
1800s Gold Rush

    

Present day Bitcoin and altcoin development

appear to be recounting a theory that played out in the early mining industry. As was the pattern during the actual gold rush of the 1800s, while some people took the risk and spent their time looking for gold, other folks watched on non-judgmentally and lucratively supplied the "picks and shovels" that enabled the fever-pitched masses to take a shot at "striking it big." Drawing on some similarities and contrasts between the actual "gold rush" and the new "digital gold rush" provides a good framework to describe how industries today are being impacted by Bitcoin. Bitcoin evangelist and technologist Melvin Petties explains how the emergence of Bitcoin has given rise to different kinds of related endeavors, pointing out the attitude of some key players and the impact on the crypto ecosystem.

Picks And Shovels Model: Industries That Make Equipment

According to Petties, in the olden days, the absolute quantity of precious metal was not known so the risk of participation was greater. The big rewards were random yet impactful – whole towns were built from major gold strikes, which made the lure to participate even greater.  People from all walks of life, even the very poor, were compelled to participate and their chances of success were arguably relatively the same.

Irresponsible

Fast forward to the present day, Petties notes that not just anybody can make a "pick and shovel" when it comes to Bitcoin mining.

Petties says:

“In fact, the technology is so coveted that for the years between 2013-2015 (Bitcoin good time days) most mining equipment providers were ultimately found to be fraudulent or irresponsible in how they pre-sold equipment but never delivered it.”

Petties explains that microchip shortages were always the common scapegoat. However, the real issue was that most people who knew how to make a real pick and shovel (ASIC chip-based mining computer) held onto the knowledge, built the product, mined with it for most of its practical lifetime (innovations were happening every month and the difficulty level was rising even more rapidly due to the rush of entrants) and then delivered it to the customer only when it was virtually worthless.  

Wild West Days

Also, most other cloud mining or new mining equipment companies were either not worth the ROI at the time (if you were thinking short-term) or an elaborate pre-order scam/trap for victims. The latter was willing to send Bitcoin to anywhere in the world to receive a miner.  Consumer protection was non-existent which made the "buyer beware" burden too heavy and often times a soul-crushing experience to be scammed. Compared to the gold rush of the 1800s, Petties notes that it was not possible to have a massive stealth mining operation. However, in the crypto age, that's exactly what a lot of companies did to cement their space and build a massive moat around themselves to eventually experiment with other value-added services to be built on top of the network that they breathed life into.

Me Too Shops

Another area of significant comparison in terms of activities surrounding the development of Bitcoin is the “value-added service industry.” Petties points out that in the 1800s during the gold rush, pop-up towns and communities were the norms. When a lucky team would strike a big vein they would ultimately reinvest the wealth back into the community, opening banks, general stores, parlors, salons and housing for the existent and soon to arrive patrons that would have certainly heard the news and set their sights to capture some of that same luck.

In the big booming Bitcoin days, this represents all of the "me too" shops that began to publicly accept Bitcoin and make a splash in the news. All the activity served to drive more and more VC money into the space as the community searched for "killer apps" that would live on top of Bitcoin and usher in Bitcoin 2.0 – streamlined payments, borderless markets, no remittances, etc. Ultimately, the most impacted industries were not retail due to the existing reluctance towards the mainstream adoption of the cryptocurrency.  

Value-Added Services

Petties sees some positivity from the circumstances. He notes that what happened through all of that is the discovery of financial services as the real added value, namely legitimate exchanges that were run by competent folks who knew how to secure digital currency and could partner with banks and insurance companies to properly protect customer accounts. Petties concludes by explaining that because Bitcoin, as money, is Blockchain's first "killer app," the obvious industries that will shine will be those that facilitate the safe transfer of crypto and investment exposure – that is financial services. “I'm encouraged by the strides that the Winklevoss brothers have taken to make that a reality,” says Petties. “True pioneers in understanding the need to make digital currency safe and broadly available in a regulatory compliant way.”

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.

Alan Zibluk Markethive Founding Member

Market Turns Green

Market turns green

Market Turns Green

The cryptocurrency market takes a turn to the green, led by Ethereum and Bitcoin.

After two days of the so-called ‘crypto correction’ in the final days of June, the wider cryptocurrency market is seemingly back on a comeback trial as all top ten cryptocurrencies by market cap make gains over a 24-hour period.

According to CoinMarketCap, all but two of the top 50 cryptocurrencies have taken a positive turn during Tuesday’s trading period. At press time, only Bytecoin, the original anonymous crypto which made a 250% jump in May and Ardor, a blockchain-as-a-service platform, see their respective tokens fail to make gains at the top half of the table.

 

Ethereum leads the way among the big dogs, with a near 8% gain as Ether prices return to hitting above $275. Bitcoin, up over 2%, is trading just above $2,475. Ripple, Litecoin and Ethereum Classic are following the trend. Dash, at #7 on the crypto-ranks, is up nearly 13% at over $170 per DASH.

 

Today’s upward gains will come as respite during a dramatic few days for the cryptocurrency market. Rewund back to mid-June, the entire cryptocurrency market cap had struck $117 billion. At its lowest point on Tuesday, the combined market cap of all cryptocurrencies in circulation had fallen to $88 billion – a wipeout of $29 billion in two weeks. Monday, in particular, saw 92 of the top 100 cryptos hit red, with the IOTA’s IOT token and Ethereum taking the biggest falls.
 

Tuesday didn’t start off on sound footing either, as Ethereum fell nearly 20% to a low of $227.14 today, a near 4-week low. A mainstream rumor that Ethereum founder Vitalik Buterin died in a car crash didn’t help matters.

 

Ultimately, the downturn that began on Sunday evening could have ultimately proven to be the pause the market needed following significant gains in recent months. A breather helps. It never was, nor will ever be a sprint. It’s summer time, after all. Everyday investors, having helped boost entire cryptocurrency market leap from $28 billion in mid-April to a dizzying $117 billion in mid-June, could be closing their positions for profits during summertime.

 

“All that really happened today was some newcomers and bull traders got discount coins,” wrote CCN’s P.H. Madore amid Monday’s gloom. For others, these last few days have merely been an exercise of holding on.

David Ogden
Entrepreneur

 

Author: Samburaj Das

 

 

Alan Zibluk Markethive Founding Member

Bitcoin, Ethereum Lead the Way as Cryptocurrencies Retreat into the Red

Bitcoin, Ethereum Lead the Way as Cryptocurrencies Retreat into the Red

    

Cryptocurrency traders woke up to a sea of red this morning

, as 92 of the top 100 cryptocurrencies by market cap experienced a marked price decline. The bitcoin price led the retreat, falling over 6% toward $2,400. Bitcoin has declined almost $600 since it pierced the $3,000 barrier two weeks ago.

No Flippening Today

Bitcoin price declines always increase discussions about the “Flippening,” the potential future event when another cryptocurrency (presumably Ethereum) will supplant bitcoin as the largest cryptocurrency by market cap. However, Ethereum has been dealing with its own problems. On June 22, it experienced a flash crash on GDAX, although it quickly recovered. More worrisome is the fact that Ethereum is experiencing network congestion and has yet to implement a long-term solution. Consequently, the ethereum price has fared even worse than bitcoin. In the past 24 hours, the ethereum price fell 13% to $285.23. Ethereum too has been experiencing an elongated price decline, having fallen nearly $130 since it hit $410 on June 12. Significantly, ethereum’s ~$26.5 billion market cap is now only 63% of bitcoin’s ~$41.8 billion market cap.

Massacre Extends to Altcoins

The Monday Massacre did not stop with bitcoin and ethereum; altcoins are down across the board. Not even litecoin, which has experienced a price resurgence over the past several months, could swim against the current. The litecoin price fell 9.87% to $41.29. It has fallen nearly 20% since it topped out at $50 leading up to its listing on BitStamp.But the massacre did not stop there Only eight of the top 100 cryptocurrencies managed to avoid the bloodbath. Thirtieth-ranked Byteball was the largest cryptocurrency to experience a price increase, just barely moving the needle 1.84% to $781.20. Tether, MCAP, LEOCoin, OBITS, and Mooncoin each managed to tread water or increase slightly.

Lest one attribute the altcoin price decline to the fact that most altcoins rely on bitcoin as their major trading pair, the price charts look nearly as bad when you switch from USD to BTC. Nearly every altcoin declined against bitcoin. The lone standout in the top 100 was 54th-ranked CloakCoin, whose price rose 41% to $10.09 (.0037 BTC). This is a new all-time high for CloakCoin, who previously rose to a high of .0033 BTC in late July 2014 before crashing in August and September.

A Bump in the Road or Cause for Concern?

Mainstream economists and news outlets rush to pronounce bitcoin’s impending doom every time it experiences a price decline, so don’t be surprised if you see some trigger-happy “Is This the End for Bitcoin?” headlines pop up in your newsfeed if the downward trend continues. Nevertheless, it is far more likely this market downturn is just a bump in the road for cryptocurrency prices. That said, both Bitcoin and Ethereum are facing scaling difficulties and will need to implement long-term solutions. Bitcoin’s test will come with the upcoming Segwit2x activation. All signs indicate Bitcoin will avoid a network fork on August 1, but any unexpected developments could lead to price volatility.

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.

Alan Zibluk Markethive Founding Member

IMF Urges Banks to Invest In Cryptocurrencies

IMF Urges Banks to Invest In Cryptocurrencies

IMF Urges Banks to Invest In Cryptocurrencies
 

A June 2017 staff discussion note from the International Monetary Fund (IMF) suggests that banks should consider investing in cryptocurrencies more seriously than they have in the past. According to the IMF staff team responsible for the note, including prominent economists such as Dong He, Ross Leckow, and Vikram Haksar, "rapid advances in digital technology are transforming the financial services landscape." These members of the IMF feel that such transformations generate new opportunities for consumers as well as service providers and regulators. The ultimate message of the report seems to be one of support for cryptocurrencies, as it outlines some of the ways that the fintech industry might be able to provide solutions for consumers related to trust, security, financial services, and privacy in this area.

 

Boundaries are Blurring

One of the key findings of the IMF report is that "boundaries are blurring." This means that the borders between intermediaries, service providers, and markets, previously well-defined, have become blurry with the advent of new technology related to digital currencies and cross-border payments. Along with the blurring of these boundaries, the authors of the report suggest that "barriers to entry are changing." This does not, however, mean that barriers to entry are universally being lowered. Rather, they are being lowered in some situations but raised for others, particularly "if the emergence of large closed networks reduces opportunities for competition."

 

Trust Remains Essential

Absolutely key in the view of the authors of this report is that "trust remains essential." With less reliance on traditional intermediaries, consumers are turning more toward new networks and providers. The facilitation of this transfer on a large scale requires significant levels of trust in security, privacy, and efficiency. Along with this, and perhaps contributing to a new sense of trust, is the authors' conclusion that "technologies may improve cross-border payments" by serving better and more cost-efficient services, by lowering compliance costs, and by working to fight against terrorism financing.

 

In the view of the IMF authors, the financial services sector is poised to make the change toward cryptocurrency involvement. That being said, the report suggests that "policymaking will need to be nimble, experimental, and cooperative" in order to successfully navigate this crossing. Simultaneously, regulatory authorities will have a careful job to do: they must balance efficiency concerns and stability tradeoffs. In order to be willing to enter into this world, regulatory authorities will likely need reassurance that risks including cyberattacks, money-laundering, and terrorism support can be mitigated without harming the innovative progress of the digital currency world. To do this, the authors believe that regulators might need to increase their attention on activities and that governance will need to be strengthened. If all of these things take place, the IMF authors believe that banks could integrate cryptocurrencies successfully.

 

David Ogden
Entrepreneur

 

Author: Nathan Reiff

 

Alan Zibluk Markethive Founding Member

Factors Pushing Bitcoin Prices Higher in 2017

Factors Pushing Bitcoin Prices
Higher in 2017

For newcomers to the market looking to make a quick win, the rollercoaster of a year has probably been a time of scratching heads and possibly a few tears shed. For the long-term investor, however, these periods are part of the journey and opportune times to snap up some more coins when the price takes a dip. Despite the precautionary cries of ‘bursting bubbles’, these market corrections are an anticipated occurrence.

    
Legislative Changes for Cryptos

Earlier this year, Japan announced that as of 1 April 2017, the country would recognise bitcoin as legal tender and make the provisions for administrative and accounting systems to be enhanced for cryptocurrency transactions to take place seamlessly. This was undoubtedly the major contributing factor to an initial surge in the price as Japanese individuals and corporations alike scrambled on exchanges to secure bitcoin for future purchases. Hundreds of thousands of retailers in the area are said to be equipping themselves to accept bitcoin payments, with a low cost airline, Peach, becoming the first commercial carrier to directly offer consumers tickets paid in bitcoin.

Australia quickly followed suit, announcing accelerated amendments to legislation that eliminated the incumbent double taxation on digital currency transactions. As it stands, Australians using bitcoin for transactions are liable for the 10% goods and services tax (GST) plus a further 10% tax for using ‘intangible property’ as a payment medium. Come 1 July 2017, these transactions will only attract GST, and be exempt from further taxation, no doubt fuelling a greater adoption of digital currency transactions. The proactive progression by these countries certainly paves the way for others to learn from their integration and regulatory practices, empowering mainstream bitcoin adoption, which naturally pushes the price higher as demand increases.

Scaling Debate Resolution

The scaling debate has been a long-standing hurdle for Bitcoin growth. The decentralised nature of bitcoin, which naturally is one of its most appealing qualities, presents some challenges when it comes to governance of remedial action. In an ecosystem where no single entity can dictate changes to the framework, a majority consensus must be reached. The fact remains that Bitcoin needs to scale from its current transactional capacity in order to meet the demands placed on the network in terms of the growing number of transactions, as the current block size is impeding quick and cost-effective transactions.

Whilst several proposals have been put forward, the Bitcoin community have yet to come to agreement on a viable solution that satisfies the majority, while at the same time doing what is best for the wider user base. In May 2017, at the annual Consensus conference, held in New York, an agreement has been signed by a ‘critical mass of the bitcoin ecosystem’ that set out a plan for the adoption of SegWit with a planned hard fork to a 2MB blocksize within six months. While further clarity is needed, it would appear that we may finally come to a point of breaking the stalemate, which will contributing factor in Bitcoin being able to advance and reach its full potential.

Economic and Political Uncertainty

One of Bitcoin’s undeniable drivers of growth are citizens who have lost confidence in their country’s ability to maintain sound economic and political policies, and desperately seek to establish their own sense of financial freedom outside the manipulation of governments.

Venezuela

Take Venezuela for example. An overly aggressive expansionary monetary policy has resulted in hyperinflation, which the International Monetary Fund (IMF) expects to reach an explosive 1,660% this year. This has led to an unparalleled economic and social crisis. The removal of the 100 Bolivar note (the largest denomination and still worth only a few US cents) from circulation in December 2016 alongside the lack of availability of the planned 500 to 20,000 Bolivar notes, led to widespread chaos and violent protests amongst Venezuelans, who for the most part were heavily reliant on cash but were effectively left without money for weeks on end.

It is reported that the minimum wage is around 200,000 Bolivars, yet a single basket of groceries costs in the region of 770,000 Bolivars, nearly 4 times the minimum monthly wage. Whilst the government provide some subsidised basic goods, the ‘outlets’ have become hotspots for vicious crime and citizens have to weigh up the risks of cheaper food against the dangers that face them in the queues. This is what happens when people reach such levels of despair to survive. The alarming surge in crimes such as kidnapping and murder leave most Venezuelans living in fear for their lives on a daily basis, with little in the way of respite.

India

India is another prime example, where the most recent, and possibly most extreme case of a modern-day war on cash occurred in December 2016. Under the pretence of curbing criminal action and tax evasion, Prime Minister Narendra Modi effectively wiped out 86% of notes in circulation overnight, when he announced the demonetisation of 500 and 1,000 Rupee notes with immediate effect. Exchange was possible, but within a limited time frame and only up to a certain amount, the rest having to be processed via a bank account. This, in a country where almost half its population has no access to formal banking, let alone a bank account. This is just one of the reasons bitcoin holds such appeal in tempestuous economic climates. With Bitcoin, you are assured a level of financial security your money is removed from the coercion of the centralised system, therefore protecting your wealth from political agendas, damaging inflation and capital controls.

Increased Inflow of Institutional Money

Financial institutions, who are historically wary about Bitcoin are increasingly showing signs of interest in the digital asset. When compared to the performance of stock markets and fiat currencies, combined with more and more regulatory structure coming into place, it is unsurprising that institutional money has started flow into the crypto-economy. Regulation is arguably one of the largest barriers to cryptocurrency investment for institutions. Two nations, in particular, have been influential in this regard; Sweden and Japan. Sweden was one of the first movers in terms of a regulated Bitcoin investment. Back in May 2015, the KnC Group launched the world’s first ‘Bitcoin Tracker’ known as an exchange-traded note (ETN), which is publicly traded on a regulated exchange. This represented massive progress for Bitcoin at the time and essentially opened the market for institutions and private individuals to gain a regulated exposure to Bitcoin.

The ETN is designed to mirror the price movements of the underlying asset being USD/BTC. The company offering the ETN, XBT Provider, is required to hold the equivalent number of bitcoins as the number of ETN’s issued. In other words, when a financial institution or private investor purchases, XBT Provider has to purchase the same amount of bitcoins to back up the note. Earlier this month, Hargreaves Lansdown, the UK’s largest brokerage, announced that their clients would be able to access the ETN via their SIPP and brokerage accounts. This has opened the doors for retail and institutional investors to gain a regulated Bitcoin exposure in the UK.

As mentioned earlier, Japan has played a crucial role in moving bitcoin into the mainstream. This move has provided institutional players with the much-needed vote of confidence required before they got on board. Russia and India are looking likely to be the next countries to announce positive legislation after an increase in interest within the regions. This will further stimulate institutional investment into Bitcoin, leading to a stronger and more prosperous market for all.

Mainstream Momentum

Perhaps this can be linked back to the fact that with growing interest, and impressive growth, the media have been covering Bitcoin more and more frequently, exposing it to a wider audience. Personally, I have had more and more dinner table discussions about Bitcoin with friends, family, ex-colleagues and acquaintances, outside of the ‘cryptocurrency world’, all now showing interest in Bitcoin.

It was this month that the Wall Street Journal mentioned Bitcoin on its front page, highlighting that Bitcoin has had a strong 2017. This mainstream recognition for Bitcoin’s performance has been long awaited and will be a stimulus for continual momentum. It was only 2 years ago that most of the mainstream news stations were reporting Bitcoin’s demise. What a turn of events it has been. The factors I have outlined above are merely a few of the positive fundamentals Bitcoin has going for it. Driving demand, expanding its utility and subsequently, increasing its value and price. So yes, I am confident when I say that Bitcoin will continue to break through all time highs and find favour above the $3,000 mark before the bells ring in 2018.

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.

Alan Zibluk Markethive Founding Member

Why Just Holding Cryptocurrency Will Change the World

Why Just Holding Cryptocurrency Will Change the World

Why Just Holding Cryptocurrency Will Change the World

 

Cryptocurrency, digital assets run by blockchain distributed ledger technology, have some pretty revolutionary features and use cases. They can cheaply and permanently send wealth faster than anything else. They can cryptographically prove your identity. They can run self-executing smart contracts instead of relying on an enforcement mechanism when people don’t keep to their deals. But what if I told you that one of the most world-changing things about digital currencies is simply having some?

 

Crypto is new

 

The first, best, and most basic benefit of wealth generated by digital assets is that it’s new. Even if this new money was no different from anything currently out there, just by being new it provides a valuable fresh start to the current wealth distribution. When you hit the reset button, there’s a chance at a new bunch of people getting in at the bottom and making it big. Seeing a fresh set of faces on the rich list is better than having the same few families and groups maintaining an iron grip on the world’s resources generation after generation.

 

Anyone with basic technological access can get into crypto

 

The big barrier to entry when delving into the world of digital assets is internet access. However, this group of people currently stands at about half the global population and quickly rising. More importantly, the regions seeing the greatest growth in internet users are, in descending order: Africa, the Middle East, Latin America, and Asia. Anyone with a basic internet connection can download a wallet app or get a desktop wallet. At that point they can sign up to an exchange to buy cryptocurrency, or go the more grassroots route and buy in cash from someone they know (or a service like Wall of Coins or LocalBitcoins that connects such people) or work for it. Since the internet is global, so is the work that it can facilitate, and with it a borderless form of wealth transfer allows people in the poorest countries to be paid alongside those in the richest. Compared to other investments, the barrier to entry is very low, particularly for the unbanked.

 

Crypto attracts a certain kind of person

 

This is where we get into the uncomfortable territory of painting with a broad stroke, but it’s still important to consider. Generally speaking, cryptocurrency enthusiasts tend to be technophiles, innovators, nonconformists, activists, and liberty lovers. It makes sense, too: those seeking an alternative to the present financial system probably have a problem with the current regime to begin with, and even those who don’t will tend to display intellectual curiosity and a dash of courage to venture off the beaten path into uncharted territory, especially with something as risky as their money. Whichever kind of person we’re talking about, it’s probably a good idea to give them wealth rather than to some of the people who have it already, particularly in countries without a free economy where the entrepreneurial can’t get ahead.

 

Regulation, where existent and applicable, has minimal effect

 

There’s one big problem with the current financial system: control. The few at the top, whether in government, banking, or an industry powerful enough to influence the first two, effectively direct what happens to everyone else’s money. The average person is helpless when they can have their bank account frozen, their cash devalued or reissued (or discontinued altogether), and their investments taxed or seized. Even a physical asset such as gold can be confiscated and have its supply and exchange severely limited. Cryptocurrency, when run in a truly distributed fashion as Bitcoin’s mysterious creator intended, is highly censorship-resistant, requiring an area-wide internet shutdown to provide any meaningful chance of being stopped. Regulation can just make it harder to own and use crypto through legitimate channels. For some fun anecdotal evidence, remember that even Venezuela has a cryptocurrency exchange.

 

Dash in particular builds longer-term, harder to censor wealth

 

If you look at the cryptocurrency charts long-term, you’ll see that holding pretty much any digital token can make you rich at this point. However, Dash in particular has demonstrated, in addition to stable and consistent growth, a few extra benefits. To begin with, anyone with the foresight to run a masternode back when it was $5,000 (or less) to do so is now sitting on almost $200,000 that makes over $1,250 per month in recurring income as a reward for helping to run the Dash network. Those of us (almost all of us at this point) who can’t afford to buy into that level of recurring income can look into a masternode share with some trusted third party (not as good as running something yourself, but still better than a bank). In the future, Dash has savings accounts planned, which will allow anyone to make recurring income off of their investment. And, let’s not forget that you can move Dash around for a couple pennies per transaction, and can spend it at hundreds of places worldwide, lessening your need to hold other, lesser forms of money.

 

Now remember, this is just what cryptocurrency can do for the world if you do nothing but get some and hold on to it. Imagine what will happen when we start leveraging the technology for all it can really do. The future is exciting indeed.

 

David Ogden
Entrepreneur

 

Author: Joël Valenzuela

Alan Zibluk Markethive Founding Member