Stop oversimplifying everything!

The old days of gaming Google's ranking algorithm are over, but columnist Eric Enge notes that many SEO professionals haven't moved on yet.

 

  

Once upon a time, our world was simple.

There was a thesis — “The Anatomy of a Large-Scale Hypertextual Web Search Engine” by Sergey Brin and Larry Page — that told us how Google worked. And while Google evolved rapidly from the concepts in that document, it still told us what we needed to know to rank highly in search. As a community, we abused it — and many made large sums of money simply by buying links to their site. How could you expect any other result? Offer people a way to spend $2 and make $10, and guess what? Lots of people are going to sign up for that program.

But our friends at Google knew that providing the best search results would increase their market share and revenue, so they made changes continually to improve search quality and protect against attacks by spammers. A big part of what made this effort successful was obscuring the details of their ranking algorithm. When reading the PageRank thesis was all you needed to do to learn how to formulate your SEO strategy, the world was simple. But Google has since been issued hundreds of patents, most of which have probably not been implemented and never will be. There may even be trade secret concepts for ranking factors for which patent applications have never been filed.

Yet, as search marketers, we still want to make things very simple. Let’s optimize our site for this one characteristic and we’ll get rich! In today’s world, this is no longer realistic. There is so much money to be had in a search that any single factor has been thoroughly tested by many people. If there were one single factor that could be exploited for guaranteed SEO success, you would already have seen someone go public with it.

‘Lots of different signals’ contribute to rankings

Despite the fact that there is no silver bullet for obtaining high rankings, SEO professionals often look for quick fixes and easy solutions when a site’s rankings take a hit. In a recent Webmaster Central Office Hours Hangout, a participant asked Google Webmaster Trends Analyst John Mueller about improving his site content to reverse a drop in traffic that he believed to be the results of the Panda update from May of 2014. The webmaster told Mueller that he and his team are going through the site category by category to improve the content; he wanted to know if rankings will improve category by category as well, or if there is a blanket score applied to the whole site.

Here is what Mueller said in response (emphases mine):

“For the most part, we’ve moved more and more towards understanding sections of the site better and understanding what the quality of those sections is. So if you’re … going through your site step by step, then I would expect to see … a gradual change in the way that we view your site. But, I also assume that if … you’ve had a low quality site since 2014, that’s a long time to … maintain a low quality site, and that’s something where I suspect there are lots of different signals that are … telling us that this is probably not such a great site.

(Hat tip to Glenn Gabe for surfacing this.)

I want to draw your attention to the bolded part of the above comment. Doesn’t it make you wonder, what are the “lots of different signals?” While it’s important not to over-analyze every statement by Googlers, this certainly does sound like the related signals would involve some form of cumulative user engagement metrics. However, if it were as simple as improving user engagement, it likely would not take a long time for someone impacted by a Panda penalty to recover — as soon as users started reacting to the site better, the issue would presumably fix itself quickly.

What about CTR?

Larry Kim is passionate about the possibility that Google directly uses CTR as an SEO ranking factor. By the way, do read that article. It’s a great read, as it gives you tons of tips on how to improve your CTR — which is very clearly a good thing regardless of SEO ranking impact. That said, I don’t think Google’s algorithm is as simple as measuring CTR on a search result and moving higher CTR items higher in the SERPs. For one thing, it would be far too easy a signal to the game, and many industries that are well-known for aggressive SEO testing would have pegged this as a ranking factor and already made millions of dollars on this by now. Second, of all, high CTR does not speak to the quality of the page that you’ll land on. It speaks to your approach to title and meta description writing and branding.

We also have the statements by Paul Haahr, a ranking engineer at Google, on how Google works. He gave the linked presentation at SMX West in March 2015. In it, he discusses how Google does use a variety of user engagement metrics in ranking. The upshot of it is that he said they are NOT used as a direct ranking factor, but instead, they are used in periodic quality control checks of other ranking factors that they use.

Here is a summary of what his statements imply:

1. CTR, and signals like it, are NOT a direct ranking factor.
2. Signals like content quality and links, and algorithms like Panda, Penguin, and probably hundreds of others are what they use instead (the “Core Signal Set”).
3. Google runs a number of quality control tests on search quality. These include CTR and other direct measurements of user engagement.
4. Based on the results of these tests, Google will adjust the Core Signal Set to improve test results.

The reason for this process is that it allows Google to run their quality control tests in a controlled environment where they are not easily subject to gaming of the algorithm, and it makes it far harder for black-hat SEOs to manipulate. So is Larry Kim right? Or Paul Haahr? I don’t know.

Back to John Mueller’s comments for a moment

Looking back on the John Mueller statement I shared above, it strongly implies that there is some cumulative impact over time of generating “lots of different signals that are telling us that this is probably not such a great site.” In other words, I’m guessing that if your site generates a lot of negative signals for a long time, it’s harder to recover, as you need to generate new positive signals for a sustained period of time to make up for the history that you’ve accumulated. Mueller also makes it seem like a graduated scale of some sort, where turning a site around will be “a long-term project where you’ll probably see gradual changes over time.” However, let’s consider for a moment that the signal we are talking about might be linked. Shortly after the aforementioned Office Hours Hangout, on May 11, John Mueller also tweeted out that you can get an unnatural link from a good site and a natural link from a spammy site. Of course, when you think about it, this makes complete sense.

How does this relate to the Office Hours Hangout discussion? I don’t know that it does (well, directly, that is). However, it’s entirely possible that the signals John Mueller speaks about in Office Hours are links on the web. In which case, going through and disavowing your unnatural links would likely dramatically speed up the process of recovery. But is that the case? Then why wouldn’t he have just said that? I don’t know. But we have this seeming genuine comment from Mueller on what to expect in terms of recovery with no easily determined explanation of what signals could be driving it.

We all try to oversimplify how the Google algorithm works

As an industry, we grew up in a world where we could go read one paper, the original PageRank thesis by Sergey Brin and Larry Page, and kind of get the Google algorithm. While the initial launch of Google had already deviated significantly from this paper, we knew that links were a big thing. This made it easy for us to be successful ionGoogle, so much so that you could take a really crappy site and get it to rank high with little effort. Just get tons of links (in the early days, you could simply buy them), and you were all set. But in today’s world, while links still matter a great deal, there are many other factors in play. Google has a vested interest in keeping the algorithms they use vague and unclear, as this is a primary way to fight against spam.

As an industry, we need to change how we think about Google. Yet we seem to remain desperate to make the algorithms simple. “Oh, it’s this one factor that really drives things,” we want to say, but that world is gone forever. This is not a PageRank situation, where we’ll be given a single patent or paper that lays it all out, know that it’s the fundamental basis of Google’s algorithm, and then know quite simply what to do.

The second-largest market cap company on planet Earth has spent nearly two decades improving its ranking algorithm to ensure high-quality search results — and maintaining the algorithm’s integrity requires, in part, that it be too complex for spammers to easily game. That means that there aren’t going to be one or two dominating ranking factors anymore. This is why I keep encouraging marketers to understand Google’s objectives — and to learn to thrive in an environment where the search giant keeps getting closer and closer to meeting those objectives.

We’re also approaching a highly volatile market situation, with the rise of voice search, new devices like the Amazon Echo and Google Homecoming to market, and the impending rise of the personal assistants. This is a disruptive market event, and Google’s position as the number one player in search as we know it may be secure, but search as we know it may no longer be that important an activity. People are going to shift to using voice commands and a centralized personal assistant, and a traditional search will be a minor feature in that world.

What this means is that Google needs its results to be as high-quality as they possibly can make them. Yet they need to keep fighting off spammers at the same time. The result? A dynamic and changing algorithm that continues to improve overall search quality as much as they can. To maintain a stranglehold on that market share, and establish a lead, if at all possible, in the world of voice search and personal assistants.

What does it mean for us?

The simple days of gaming the algorithm are gone. Instead, we have to work on a few core agenda items:

1. Make our content and site experience as outstanding as we possibly can.
2. Get ready for the world of voice search and personal assistants.
3. Plug into new technologies and channel opportunities as they become available.
4. Promote our products and services in a highly effective manner.

In short, make sure that your products and services are in high demand. The best defense in a rapidly changing marketplace is to make sure that consumers want to buy from you. That way, if some future platform does not provide access to you, your prospective customers will let them know. Notice, though, how this recipe has nothing to do with the algorithms of Google (or any other platform provider). Our world is just no longer that simple anymore.

Chuck Reynolds
Contributor
Please click either Link to Learn more about — Inbound Marketing.

Alan Zibluk Markethive Founding Member

Artificial Intelligence Is Changing SEO: Get Ahead Or Fall Behind

While some folks are still going to want a human voice powering or refining their content, these algorithms are going to be able to point out the best keywords to use in real time. Even though this technological development sacrifices human perspective and insight, the return is going to provide content providers with articles that could potentially lead to the top of search results almost every time. The jury is still out on the actual details as to how this type of content will be handled from the first draft all the way through publication, but it is expected that the impact of improved keyword strategy will make a significant difference.

Real Time Data is Going to Be Huge

One of the biggest impacts that AI will have on SEO is the speed that it offers to universal marketing efforts. As we mentioned above, not only will AI be able to aggregate and organize keywords and search terms, but it will additionally be able to pinpoint how to use these terms as well. Imagine being able to run tests on what terms will work best based on location, service, or even timing. Additionally, marketers will also be able to use these algorithms to use predictive models on how the response will turn out. This means that updating automated responses and search terms will occur instantaneously — cycling through which ones will achieve the highest ROI in a matter of seconds. The results of this fast-paced development will likely alter search term strategy and analysis for years to come.

Chuck Reynolds
Contributor
Please click either Link to Learn more about — Inbound Marketing.

Alan Zibluk Markethive Founding Member

Effective Business Development Strategies (Plan)

Business Development Strategies…. Errr… What is that? Is it related to sales? Is it related to partnerships? Is it a tiring job? Can I do it? Is it related to target achievement? Lots of unanswered questions…..

Let’s try to find an answer to these queries.

  

Business Development Strategies

 is a combination of numerous individual tasks which has a goal of implementing and developing growth opportunities either within the organization or between two or more organizations. It is related to all round development of a particular business which makes it enriching and fruitful. It is a mixture of commerce, business, and organizational behavioral theories. Business development deals with the establishment of long-term value factor for an organization from the point of view of markets, customers and their interrelationships. In recent times, there is a new job profile of Business Development Executive whose function has evolved as the business world has transformed into the global economy. This job profile represents a pivotal role in increasing the amount of business for a particular company.

What is Business Development?

  

It is defined as “processes and activities

which are concerned with analytical preparation for probable growth opportunities, which does not entitle decisions regarding strategy for implementation of growth opportunities but supports the strategy for implementation of growth opportunities. ” The basis of Business Development is about creating long-term value or long term positive image of an organization in the minds of customers, stakeholders, markets and so on. The process of business development is all about identifying these interconnected networks, which will create new opportunities for growth. Become an e-Learning Developer and Authoring Tools Expert.Learn to design the high quality, valuable content. Be well versed in web/eLearning standards such as HTML5, CSS, SASS, web accessibility.

Long term value

Business development Strategies

is about any get-rich-quick formula or I-win-You-lose guidebook. It is not about creating values which will vanish in a matter of seconds. It is all about creating suitable opportunities for that specific goodwill to retain for a long period of time. The concept is that the gates should be open so that there is a free flow of values. Stabilizing the business development platform by strengthening the long-term value is the only way for organizational growth

History of Business Development Strategies

In practical life, the term Business Development Strategies has evolved into several applications and usage. In this age, the tasks of business developer are very varied and interesting. It has a wide application group starting from IT professionals to engineers, from marketing management to prospective clients. Recent research has pointed out the co-relation between emerging business development solutions to an innovation management process. The business development function has evolved into a more matured, highly technical function which is especially true in Biotechnology and Pharmaceutical industries. History specifies that business development can be traced back to Industrial Revolution period.

Sales vs Business Development Strategies

Business Development Strategies should not be confused with sales. The process of sales is based on driving revenue or the generation of profits. The sole intention of sales is the handover of items, thereby maintaining a profit margin. In the other hand, business development identifies and creates new partnership avenues that help indirectly to drive revenue. The sales function deals only with the output, whereas the business development process deals with the entire journey.

Business Development Strategies is essentially a marketing function, though it involves some minor sales skills like negotiations. Typical goals of business development strategies include market expansion, brand projection, new client acquisition, general awareness about brands, etc. The function of sales is to sell products or services directly to the end user or client. Whereas the function of business development strategies is working through the channels or partners to

Make sales happen to Clients.

  

Awesome Business Development Strategies

The business development strategies are everywhere and lots and lots of ideas are there which can be exploited on a commercial basis. These fresh ideas can be harvested, launched and thereby marketed properly. Anyone can get awesome ideas at any point of time. Ideas can be large, small, big. Ideas are usually driven by a passion for one’s area of interest. A new idea may be borne from an existing situation or from the innovative mind of a thinker. The business owner can also observe two different disciplines and blend them smoothly, which gives birth to a new field of business innovation.

Here are the top most awesome business ideas-

  

Recruit right personnel at the right time

A person can be having a great degree of knowledge as well as strong network who is eager to close deals with clients. But it can be very harmful to a company’s well-being. Sometimes marketing team emphasizes only on lowest prices. They forget to pay attention to engineering and quality aspects. This casts an ill effect on the company’s reputation. The effect will depend on the company’s life cycle. There are three life stages in a company’s life and not every employee is suited for every stage.

The three life stages are-

• Scouting–
  This is the preliminary stage of a company. At this stage, business development deals with the identification of various entry points for marketing. Various leverage points are identified and the concerned internal team is provided with feedback for market analysis. The key skills involved here is collaborative work with the product and engineering teams.
• Testing–
  At this stage, the business developer will close a few open deals in order to test the assumptions made from the market and input various findings. Analytical skill sets for setting up a measurement framework is required. The framework will depend on the company’s mission, strengths, and vision.
• Scaling–
  After the data is gathered from each and every deal, a path is laid down for goal fulfillment. After this, business development is all set to start closing for deals. An entire support system for future activities is created.

Look for the right opportunity-

The contacts with whom you are dealing must be cross checked as well. Dealing with the right person is very important. This practice leads to unwanted wastage of time. It is very important to identify the potential clients with whom you can do business. Scanning of the market for fruitful associations is vital before starting dealing with prospects. If this step is omitted, you will find that you are already drained out, yet no positive associations have been made. Focus on those clients who actually matters to your business rather than digging your head in unwanted ones.

Stop talking too much

When you are speaking for more than 50 percent of the time, you are actually talking 10 times excess. Your job is not to blurt out everything, but understand and probe the client’s perspective, his problems, issues, type of work done, time taken etc. Be an active listener if you really want to develop your business. You will always be a favorite vendor in a competitive economy if you hone your listening skills.

Focus on your client’s requirement

Don’t present what you are offering. Present what the client needs. Do not talk about your offerings instead listen carefully the client’s requirements, preferences. If you listen carefully to your clients, you can modify your own pitch to match the client requirements which in turn increase client satisfaction rates. Always pay a keen attention to the clients’ issues so that you customize your offerings as per his needs. If a client fails to get what he desires, then the chances of doing business with him is minimized. He will not select you as his business partner and instead look for other prospective partners.

Be Important

It is a well-known idea that important people love to deal with other important people. Be active within your business associations. To be part of those organizations that fulfill your business needs and where you can interact with prospective clients. You can offer volunteer services to industry experts to gain visibility as well as to capture high-value targets. You can climb the corporate ladder to gather the desired prestige in your concerned industry. If you succeed in doing so, the successive orders are bound to flow in your company. Remember, people like to deal with the creamy layer or the winners in their respective areas of expertise.

Main motto: Client Satisfaction

There is nothing in the world which is worse than a furious client. Not only it spoils the relationship of yours with the client, but it is also harmful to your company’s reputation. Forget about everything else and fix your client’s problems first. If you take a quick action once your client's complaints about an issue, you will make an enthralling impression on your client. You will get applause from your client and your name will be circulated on your industry members. Remember to practice empathy when dealing with clients. Place yourself in your client’s position and feel his problem. By doing so, you will be effectively nurtured your business.

Provide excellent service

After you successfully influenced your clients and got business from them, it is time to make them happy with your amazing services. Stick to the deadlines fixed with your clients. Be a perfect guide throughout the whole process. If you succeed in making your clients satisfied, they will be offering you repeat business as well as new business opportunities. Who knows, you may be rewarded with something exceptionally good.

Qualitative vs Quantitative approach

Many businesses focus purely on qualitive business value proposition and give less importance to the other factors. But this is not a wise idea. This plan has a high probability of failure and is quite difficult to achieve. There is also a minimal probability of the market to pay higher for a premium service. The market is not ready to spend extra bucks even if they get improved user experiences and better services. As a result, the quantitative aspect of the business increases the chances of success. Creating competitive lowest prices will surely attract more clients. This, in turn, will maximize your revenue generation.

Stop saying: I don’t have any time

Time management is a crucial skill which every business owner needs to know. It is all about prioritizing work. Important work needs to be done first and less important jobs can be done later. You can also have a great business idea in the silliest of time. Managing your time wisely is one of the most crucial tasks, especially when you are a business start-up. Balancing time between operational activities and business development activities is an art which you need to master. This can be done only when you spent less time on useless stuff and allocate more time to vital tasks.

Innovation at its best

Innovation is the best way to be at the top of the competition. When you offer your clients something unique then there is a high probability that your client will do business with you. Everyone prefers products or service that are new to the market. So why don’t you go out of the box and have some awesome ideas? Offer your clients something which no one is offering. Innovation may involve new methods, ideas, workflows, process flows which will be beneficial for companies.

The role of business development Strategies is extremely crucial in the first stages of a new business. This phase decides the fate of your business. If you do it well, you will taste success soon or else it will take your business to a downward direction. You need to identify the winning concepts for your business. You have to brainstorm ideas in order to be successful in developing your business. Start looking for new niches for promoting your products or services. You can also apply your skills to a new field which can be beneficial. You can also search for existing product lines and offer a cheaper version of the same product. When you are doing a mix and match of ideas, it won’t disappoint you in achieving your goals. Just be confident and be ready to RULE the world!

Chuck Reynolds
Contributor
Please click either Link to Learn more about — Inbound Marketing.

 

Alan Zibluk Markethive Founding Member

Coinbase Hopes For Cryptocurrency's 'Netscape Moment' With New App, Token

“Digital currency right now is having its Netscape moment” declared Coinbase chief executive Brian Armstrong at the Ethereal Summit, in Brooklyn, in a presentation about the cryptocurrency company’s most recent product, Token, “a messaging app with money baked in.” Speaking at the Ethereum-focused day-long conference featuring players in the decentralized web, Armstrong said that the Ethereum-based Token, in developer preview and unveiled a month ago, has four main features that show off the potential for innovation in blockchain-based products. First, it enables payments “in every country in the world from day 1,” he said. Plus, the payments are international. The users themselves, as opposed to financial institutions, are in control of the money they put in it. And the platform has its own reputation system, which Armstrong compared to a FICO score, “so you know who and which applications and people you can trust.”

Finally, Token can be used to make payments to apps. For instance, a Mechanical Turk-type app could enable users to do discrete tasks for small payments, but the workers could then be paid in actual money instead of in Amazon gift cards, which is how non-U.S. workers on Mechanical Turk are paid. Armstrong also envisions that Token, which is based on Ethereum, will host apps ranging from currency exchanges to marketplaces, remittance services to lenders,

advice services to cell phone top up providers.

Armstrong’s bold comparison of Token to Netscape,

the first widely popular web browser indicates the company’s hope that Token gains widespread consumer adoption. To begin, Coinbase, which so far has offered its services in developed countries such as the U.S., Canada, Europe, Australia, and Singapore, plans to promote Token in the developing world. Later this year, Armstrong will travel to Nigeria to foster development on the platform.

The comparison to Netscape also suggests Armstrong’s hope that Token ushers in a new stage of evolution in the industry, to a phase in which more consumers interact with blockchains and cryptocurrency but are not necessarily aware that they are doing so. Coinbase’s timing has historically been right. The startup began attracting a following in 2012 in what was then the tiny bitcoin community for making it safe and simple to buy bitcoin with your bank account. In 2015, responding to growing institutional interest in cryptocurrency, it launched Coinbase Exchange since renamed Global Digital Asset Exchange (GDAX), for professional traders.

Now the company is trying to help the industry mature beyond these basic building blocks of a blockchain-based world to have more consumer-facing offerings. In its development of Token, the company created a new protocol called Simple Open Financial Application that makes it easier for developers to build apps for a platform such as Token. In the past, a well-known bitcoin developer who attempted to build a simple bitcoin app spent eight months to get it to work, whereas a developer using SOFA got an app up and running in eight hours. “If it’s that much easier to build these applications, we’re going to see several orders of magnitude more applications being created,” he said, comparing SOFA to the development of simple web programming languages like html and Javascript. He then invited developers to participate in a hackathon beginning June 3 to build applications for Token.

Because Token is more like a web browser than an app store, Armstrong says Coinbase will not be vetting apps that list on Token, though it will be choosing which ones to feature. When asked how the company would deal with apps that are, say, stealing people’s money, he compared it to how the web browser Google Chrome will warn a user if it thinks a site they’re trying to visit has malware or otherwise looks suspicious. “I’m not saying we have zero responsibility,” he told Forbes, adding that Token is not like an app store. “We want to educate users about what they’re using, and if they’re going to do something dangerous, make sure they really know what they’re doing.”

The company, which has raised $110 million from investors incumbents such as the New York Stock Exchange, USAA and BBVA, does not currently have plans to make money from Token though Armstrong said it could lend itself to some possible business models down the line, such as charging for pro features or for usage above a certain number of transactions a month. In his presentation, referring to a popular Chinese messaging app, he called Token “a WeChat for the other 180 countries in the world” and said that it would be like putting a bank in the pockets of every person in the world, which, according to McKinsey, said that financial services on mobile phones could add $3.7 trillion to the GDP of emerging economies within a decade. It's an ambitious goal, but a fitting one for a company whose mission is to "create an open financial system for the world."

Chuck Reynolds
Contributor
Please click either Link to Learn more about TCC-Bitcoin.

Alan Zibluk Markethive Founding Member

Decentral, a Toronto-based innovation hub for decentralized and blockchain technologies,

today announced that its flagship product, Jaxx, a leading user-controlled, multi-asset, multi-platform digital currency wallet, and exchange, has secured more than 70 new partners and integrations. These integrations and partnerships will help bolster Jaxx’s objective to create a unified, cross-platform experience for all blockchain assets and become the ultimate command center for all things blockchain. Just as the browser unleashed the power of the Internet, Jaxx aims to be the tool that brings digital currencies and digital assets to the masses.

According to the official release, the following partners will integrate with the Jaxx universal key management system and backend blockchain infrastructures to create a simple point of entry into various areas of blockchain technology — including user-controlled payments and exchange, identity, communications, value movement, privacy, smart contracts, document signing, and decentralized storage: RSK Labs, BitPay, Coinbase, Purse.io, Bittrex, Blockchain Capital, BitGo, Civic, Changelly, Trezor, Ledger Wallet, Opendime by Coinkite, QTUM, Coinfabrik, Signatura, Wall of Coins, and Bitnovo.

Future Coin and Token Addition Roadmap

Jaxx also today announced that it will be working with teams and communities from Ripple, Monero, Tether, Stellar Lumens, PIVX, Factom, Steem, NEM, QTUM, Bytecoin, Bitshares, MardSafeCoin, Siacoin, Waves, Lisk, Omni, Stratus, GameCredits, Ardor, SingularDTV, Round, Decred, NXT, Byteball, DigiByte, FirstBlood, IExec RLX, Emercoin, Syscoin, Etheroll, Komodo, Namecoin, Storjcoin, Chronobank, Melonport, WeTrust, Counterparty, TokenCard, Matchpool, Edgeless, Xaurum, CreditBit, MonaCoin, NovaCoin, RubyCoin, Bitcrystals, BitShares, BlackCoin, Expanse, Gulden, Namecoin, NAV Coin, NEM, Peercoin, PotCoin, Tezos and Wings among others to bring more projects into Jaxx across all platforms and devices. These new tokens and coins join Bitcoin, Litecoin, Dash, Ethereum, Ethereum Classic, Augur, Golem, Gnosis, DigixDAO, Iconomi, Zcash, Dogecoin, RSK Testnet, and Blockchain Capital to make Jaxx the most versatile, non-custodial wallet with a built-in crypto-exchange available.

Chuck Reynolds
Contributor
Please click either Link to Learn more about TCC-Bitcoin.

 

Alan Zibluk Markethive Founding Member

The $80 billion question: Why are Bitcoin and Ethereum growing so fast?

A little over two months ago, Bitcoin achieved a symbolic milestone: After an intensive period of growth, the price of one Bitcoin surpassed the price of an ounce of gold. That seems like ancient history. The price of Bitcoin has nearly doubled since then and the cryptocurrency is currently trading at about $2,200. Bitcoin's cousin Ethereum is trading at about $180, its price increasing by a cool 1400% in the last three months. But is the rally over, or has it only just begun? And what has propelled the explosive growth in the first place? In the world of cryptocurrencies, answering these questions is anything but easy. 

A new breed of cryptocurrencies

To start, it's important to understand that Bitcoin, while still the biggest cryptocurrency around, is not the only — arguably not even the biggest — driver of growth anymore. According to Coinmarketcap, the total vale of all major cryptocurrencies put together now stands at around $79 billion. Bitcoin accounts for less than half of that, with a $35 billion market cap, while Ethereum and Ripple have grown to $17 and $13 billion, respectively. 

A couple of years ago, one Bitcoin was worth a little over a hundred dollars. Now, it broke the $2,000 barrier and is growing like a weed.The digital coin market cap is a frequently quoted number that means nothing and everything, depending on your viewpoint. If you believe that Bitcoin will ultimately replace money, then $35 billion is pocket change. But it may never happen, and even if it does, Bitcoin might be left behind. 

Bitcoin is still by far the most promising as both a digital currency and a payment platform. But the new breed of digital coins are very different. Litecoin, an early Bitcoin competitor, has once again taken the spotlight after having recently adopted SegWit, a software update that solves the scaling problem that has been dividing Bitcoin's community for years. Ethereum is a modern cryptocurrency which promises advanced features such as smart contracts. It wants to become a blockchain-based foundation for what is essentially a new type of internet. How's that for ambition?

The value of (digital) money

When the price of a commodity or a stock rises, you can usually point to some sort of reason. When Apple has a good quarter, its stock price generally goes up. When catastrophe strikes, uncertainty in global markets typically increases demand for what are viewed as safer investments such as gold, propelling prices upward. But in the world of Bitcoin, the digital cryptocurrency that doubles as a decentralized payment system, you've got a lot less to go on. A lot of the recent Bitcoin news wasn't good. In April, the U.S. Securities and Exchange Commission declined a bid by the Winklevoss brothers to get their Bitcoin ETF listed on the Bats BZX exchange. The move would have made it far easier for the average investor to speculate on the future of Bitcoin. 

And over the last couple of years, the Bitcoin community has been bitterly divided over a question on whether the size of blocks on the cryptocurrency's blockchain — the fundamental technology upon which the Bitcoin protocol relies — should be increased or not (read a simple explanation of the block size debate here). Still, the price of Bitcoin went from roughly $400 to more than $2000 in a year, and other cryptocurrencies followed suit. Why?

So what's happening?

Cryptocurrency experts we've contacted say developments in Japan are the likely cause for this latest price surge. "The Japanese have given bitcoin the green light as a currency and are looking to increase the rigour that their exchanges are subject to," said Charles Haytar, CEO of market analysis platform CryptoCompare. On a purely technical level, the current price differences in the Japanese markets and elsewhere offer the possibility of arbitrage, Hayter claims, but there's a great deal of plain old greed going on, too. 

The price difference in Japan and other markets offer the possibility of arbitrage, and some traders are taking advantage. "Lots of inexperienced investors are surging into the market, and it's causing a bit of a bubble," said Hayter. Jörg von Minckwitz, CEO of blockchain-based payment service Bitwala, points out that Ethereum has seen additional growth due to the rise of ICO (initial coin offering) based projects. In other words, to invest in a new project, you have to buy into Ethereum.

"Many crypto projects raise money from the community to develop their projects and most of them use ETH to raise money. ETH set a standard, so it is way easier to start with ETH. The result is that many people buy ETH to be able to invest in the projects and many of the ICO projects hold the money afterwards in ETH. That drives the price up," he told Mashable. None of this, however, explains the fact that a lot of the growth happened before the developments in Japan and the onset of multi-million Ethereum-based projects. It also doesn't give us a much better idea of realistic value of one Bitcoin or one Ether. Go to any Bitcoin-related community, and you'll see price predictions ranging from $40,000 to zero. 

While that second prediction sounds dramatically pessimistic, consider this: Cryptocurrencies are highly volatile. The price of Bitcoin, for example, slumped from more than a $1,100 in Dec. 2013 to less than $200 in Jan. 2015. The most recent rise in price is not permanent. Experts agree that cryptocurrencies rely heavily on user adoption, and however crazy the market may look like now, it's still early days for cryptocoins. Right now, it's easy to raise $10 million or $20 million for your Ethereum-based business, and

more businesses will flock to seize the opportunity. 

Ten years from now, will we be receiving our paychecks in fiat, or Bitcoins?

And while wide adoption of Bitcoin as a payment platform is happening at a relatively slow pace, trading cryptocurrencies has gotten a lot easier in recent years. Exchanges such as Coinbase, Kraken, and BitStamp now let you turn dollars and euros into BTC and ETH. This has definitely propelled some of the market's growth; when you see something increase in value tenfold within a month, you want to be a part of the action. The question is: how far will the price go? 

Is it time to dive in, or rush out?

Predicting the price changes in any market is tough; the old advice from the likes of Warren Buffett says you should put your money in a stock index fund and let the experts trade, as the short-term movements of the market are incredibly difficult to predict.

When I started writing this article on Friday, the market cap of all cryptocurrencies was $63 billion. It took one weekend for the market to add $16 billion in value.

It's even tougher to predict a highly volatile market such as cryptocurrencies. Add to that the relative youth of all the exchanges you can trade on, and the dangers are even bigger: If the price of Bitcoin starts falling rapidly, don't count on stop-loss measures to save you from impending doom.  Both Hayter and von Minckwitz agree that in short-term the prices in the cryptocurrency markets are overvalued, but they are positive about long-term growth. Hayter is a bit more pessimistic, though, comparing some of the Ethereum-based ICOs to the South Sea Bubble (referring to the British South Sea Company, whose stock price rose sharply in the early 18th century before it collapsed). 

"I would not advise anyone to buy (cryptocoins) right now. I’m worried that the lack of rationality at this point might hurt the market," said Hayter. For an illustration of this lack of rationality, consider this: When I started writing this article on Friday, the market cap of all cryptocurrencies was $63 billion. It took one weekend for the market to add $16 billion in value. Eat that, Uber. That said, one way to look at cryptocurrencies is to read up, and make an informed decision on their long-term prospects. Is Bitcoin just a fad? If so, it might already be overrated. But if you think that this technology could change the way money — or the entire Internet — works, there's plenty room for growth in the future.

Chuck Reynolds
Contributor
Please click either Link to Learn more about TCC-Bitcoin.

Alan Zibluk Markethive Founding Member

Ethereum’s Price Briefly Surpasses $200 as Bitcoin Soars past $2,100

Cryptocurrency enthusiasts will have a hard time figuring out

which chart to look at first right now. Bitcoin is seeing significant gains, pushing the price to new heights over $2,100. Ethereum is on a massive tear as well, rocketing to the $200 mark overnight. There is so much action going on, it is hard to say what we can expect next. Always be careful when buying at the top, though, as cryptocurrency volatility can cause an immediate reversal at times.

Everything is Booming In Crypto

It is rather uncommon to see so many things go up in value at the same time in the cryptocurrency world. Not too long ago, a Bitcoin price increase would often lead to alternative currencies plunging in value. That is no longer the case by any means. Instead, we now see major currencies go up simultaneously, as investors are scrambling to invest money in cryptocurrency right now.

To be more specific, the cryptocurrency market cap has undergone some major growth these past few weeks. About two weeks ago, we were still hovering between $40bn and $45bn. A more than respectable amount at that time, that much everyone could agree on. Bitcoin was the major cryptocurrency at that point, as it has the largest market cap. That has not changed all that much, despite the Bitcoin Dominance Index slowly reducing Bitcoin’s dominance to below the 50% threshold. Fast forward to today, and the cryptocurrency market cap sits at $79.665bn. That is nearly double the amount we were at not that long ago. A lot of people are still puzzled as to where this money is coming from, and more importantly, what is being invested in. Bitcoin’s recent price surge is a direct result of fresh capital, as it remains the top cryptocurrency in the world. With a market cap pushing toward US$37bn, no one can deny the success Bitcoin has had over the past few years.

However, Bitcoin is not the only top dog to keep an eye on these days. Ripple’s XRP asset has seen an influx of capital these past few weeks, although it is seemingly running out of steam once again. The most recent Litecoin bull run did not materialize either, despite a brief spike to a much higher price. Both of these investment opportunities may be rebound at any given time, though, but for now, they are both in consolidation mode. The biggest gains are made by Ethereum as of right now. Less than a week ago, one ETH was valued at just under $100. Today, it is worth just over $200, according to Coinmarketcap. That is a major change in value over the course of one week. Some experts even predict ETH will surpass the $500 mark by the end of the year. Quite a bold statement, but given the way things are evolving in cryptocurrency right now, anything can happen.

It was only a matter of time until Ethereum saw a major price outbreak, though. A lot of people felt this currency has been undervalued for quite some time now. It will be interesting to see how the ETH price evolves over the coming weeks and months. Reaching the $500 mark seems a long way away, but it is not unlikely it may happen. Then again, speculation is running wild during times like these. Always trade with caution, and do not get caught up in the hype.

Chuck Reynolds
Contributor
Please click either Link to Learn more about TCC-Bitcoin.

Alan Zibluk Markethive Founding Member

BitConnect Coin Sees Massive Growth Amid a Surge in Adoption

Bitcoin Press Release: Cryptocurrency newcomer, BitConnect Coin (BCC) sees continued growth after announcing previous records in value and market capitalization.

Alan Zibluk Markethive Founding Member