Tag: bitcoin

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How can SEO be beneficial in 2017?

How can SEO be beneficial in 2017?
 

Online business is at its boom

The Internet has become an easily accessible marketplace. Whether you want to purchase a pair of shoes or get your real estate property booked, the Internet is the right place to do so. E-commerce is gradually spreading its dominance over traditional forms of business. In fact, conventional businessmen are shifting towards the online arena. Establishing an online business is not enough. Digital marketing is an essentially important aspect to getting your business noticed online and increase its digital visibility. You need to build a sense of trust in potential customers to maximize conversions.

This is where Search Engine Optimization (SEO) comes into play. Once you have built a business website, it is important to increase its visibility. SEO helps to increase search engine rankings. There are many professionals that can draft you a strategy like SEO expert Brad and enable an effective implementation. However, it can be done by yourself as well but involves several technicalities. Regardless of the complexities involved in the field, SEO can elevate your business in a number of ways. It is 2017 and if still, you are not aware of the advantages it offers then you are missing out on something really important. Here is how it can be highly beneficial:

Cost effective

SEO is one of the most cost-effective ways of marketing. We already know how important an effective marketing strategy be to make or break a business. This is the cheapest form of marketing. It enables the business to reach a wider pool of customers. Buying advertisements for business promotion can cost you a great deal of money. Hiring an SEO expert can be one of the wisest investment your business can make. It will surely pack back.

Improve search engine rankings

Google is the king. Statistics prove that most of the people search for products or services on search engines before actually purchasing it. This is why you need to improve your search engine rankings. SEO of your blog or website can increase your rankings.

Visibility

Visibility counts a lot for any online business in this digital era. There are hundreds of companies doing the same job selling the same product or service. Why would a specific customer buy from you? Obviously quality is the primary factor but it only works along with other significant features. Many companies lose out of business because people are not aware of their existence. You will not be on the Internet if someone searches for you. SEO helps you to enhance your appearance on search engines. Obviously getting noticed is the first step, then only a customer will carry on with the transaction.

Generates traffic

SEO is the key to good search engine rankings but there are multiple ulterior benefits as well. The most obvious one is in real audience coming to your business. Generation of traffic is undoubtedly the greatest benefit you can leverage out of it. It will gradually lead to conversions and more profit for your company.

Worldwide audience

Each business has its own SEO strategy. If implemented correctly, it can progress in unparalleled ways. A progressive mindset is essential in order to acquire a competitive edge over other companies. Such strategies can get you audience from the entire globe. You have an extra element of profit through optimization. You can easily cover overseas with an effective implementation. No additional costs are present which is the most interesting part. This even gives you an opportunity to establish a business out of the country. Getting your brand noticed worldwide enlarges the room for improvement. In a nutshell, SEO serves you exceptionally.

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

Markethive

Effective Strategies to help you with Lead Generation

  Effective Strategies to help you with Lead Generation
 

Generating Leads Difficult?

I know how difficult it can be to keep generating leads, I understand the pressure involved to keep feeding good quality leads into your sales funnel! The good news is, you don't have to reinvent the wheel, there are plenty of strategies you can use to help you generate more leads, but before we explain these strategies, you have to answer the following questions about your business:

What is your target market?
What is your Ideal Customer Profile?
What are the problems that your customers have which your business can help solve?
What are you customers most common fears? Frustrations? Desires?

Once you have answered all the above questions, you will be able to understand your market better, you are looking to identify the NEED which your business satisfies, its easier to approach potential customers if you know why they need YOU.

Whenever you feel like you are overwhelmed or lost, go back to your answers to the above questions. Your second step will be to create and maintain a customers Database, set a goal for the number of leads you want to have in your Database. The Database can be in the form of a CRM software such as Salesforce, Microsoft Dynamics CRM, HighRise or can be a simple Excel spreadsheet.

Having a Database will help you:

  1. Maintain all your contacts in one place.
  2. Keep Important notes on each contact
  3. Keep track on your activities with each contact.

Now you are ready to start adopting some lead generation strategies, here we go:

Ask your past clients for testimonials and referrals

Have your previous clients write testimonials, this can help your business establish credibility and enhance your public image. you have to know that your clients may not know how to write a testimonial, therefore it’s worth your time if you guide them through it, a good testimonial template can be like the following:

-(open)

My name is ____(X), I am ___ (age), I live in ___ (location), I’m a ____ (profession)
I used to experience _____(problem/ I had _____ (pain)
I thought that ______(myth #1)
And I had to _______(myth # 2)

(Transition)
After working with {your company name)
I _______(quantifiable desired benefit)
and ______(secondary quantifiable desired benefit)
Now I feel _____(emotions related benefit)
I’m excited to ______(opportunities that are now opened up)
(Close with thanks)

Do you like what you read so far? Keep on reading and don't forget to LIKE & SHARE with your connections..

Ask you current clients for referrals.

This strategy also works for existing businesses, If your current clients are happy with the product/ service you are providing, call them and ask if they can refer you to their friends, this strategy could generate good leads for your business and you will take advantage of using social proofing, since his friend is using your product/ service then you will face less resistance

Turn your bills into buyers

Check out your bills, who are the people you currently pay money to? Check if you can exchange your service with theirs instead of paying them hard cash.

Networking

Networking is by far one of the best ways for lead generation, it allows you to build rapport and get warm leads, your goal during any networking event is to get as many good quality business cards as you can get. You can keep good leads cards in your left pocket and business cards that are not relevant in your right pocket, make sure to fill the data from those business card into your database as soon as you get back to office, don’t let those cards pile up, otherwise they just become a stack of meaningless business cards. Follow up with an email or a call within 3 days of event date, you have to make sure the lead still remembers you and build on that. A good place to find out about new networking opportunities is meetup.com

Public speaking

People love to do business with “experts” and public speakers are viewed as experts, find out about events and ask if you can schedule a chance to speak. It’s important that your speech focuses on offering value to your audience, do not try to sell your product or promote your business, seize the opportunity to educate your audience about your subject matter.

Offer a free Report/ Free consultation

You can get more leads from your website if you offer your website visitors with value in exchange for contact information, provide people with something like:

  • E-book
  • Exclusive content
  • Reports
  • Infographic
  • Templates

The Facebook referral system

Each one of your friends knows at least 3 people who can benefit from your product/ service, if you have 250 FB friends and you asked each one of them to refer you to 3 of their friends, this has the potential to generate 750 leads, assume that your conversion rate was 1 % then you have the chance to make 7-8 new customers from this strategy.

A good message template for Facebook referral can be like:

Hi, (Name)
I am looking to build my business with referrals. A good referral for me is {target market}
I want to offer them a {free consultation/ Ebook/ audit report (add value})
If they say “Yes”— great. if they say “No” — No problem.

If you can message me back with 3 referrals today, I will enter your name in a contest where I am giving {25$ Amazon gift card/ Coupon}. I really appreciate your help, it will make a big difference.

Recycle old Leads

Check your database, am sure you will find some old leads who asked you to contact them again in the future, it maybe worthy of your time to follow up with them every 90 days to see if they are ready to buy your product/ service.

Referral Partnership

Find complementary businesses, these are business that are selling your same target market however are not a competitor to you. you can create partnerships with these businesses where you promote his services to your network in exchange for referrals for your business.

Internet Marketing

Google, Facebook, Email Marketing and Video Marketing are great ways to convert traffic to your website and generating new leads, they are mostly free as well, except for the pay per click ads of course, you should utilize these tools to generate leads, It is not possible to cover the whole topic of Internet Marketing here, however I wrote down a few tips on how Internet marketing can help:

Google Business

97% of Internet users look online for local goods and services, therefore If you haven’t listed your business on Google business Directory, I suggest you start now.

Get an Email Marketing system

The good side of having an Email marketing system is that you can automate the process, you do not need to send every email by yourself, you can set up automatic replies to your leads and let the system are care of the process, another benefit is that you can measure your success and failure rates then be able to revise your emails accordingly.

Some good Email Marketing platforms are:

  • GetResponse
  • Campaign Monitor
  • MailChimp

Video Marketing

The main advantage of Video marketing is that its free, other benefits are it engages, educates your customers and drives traffic to your website.

Pay per Click Advertising

Great, low-cost way to drive business to your websites or business page, you can use google Adwords and Facebook Ads to drive your target audience to your website. Don't waste any time, start applying some of these strategies right away to get more leads, If you are already implementing some of these strategies then please let us know which in the comments section below, what worked best for you? what didn't work best?

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

Markethive

All You Need To Know About Dollar-Denominated Cryptocurrencies

dollar denominated chryptocurrency

All You Need To Know About Dollar-Denominated Cryptocurrencies

A well-known obstacle to the greater popularity of Bitcoin as a medium of payment is the high volatility of its exchange value. This volatility results from its built-in quantity commitment: because the number of Bitcoins in existence stays on a programmed path, variations in the real demand to hold Bitcoin must be accommodated entirely by variations in its unit value. When demand goes up, there is no quantity increase to dampen the rise in price; and vice-versa for a fall in demand.

 

Not surprisingly, several cryptocurrency developers have thought of creating a cryptocurrency with a price commitment–namely a pegged exchange rate with the US dollar–rather than a quantity commitment, in hopes of greater popularity. The aim is to create a system in which dollar-denominated payments can be made with the ease, security, and low cost of Bitcoin payments, but without the exchange-rate risk.
 

New Digital Assets
 

The development of “Blockchain 2.0” platforms has enabled the launching of a variety of new digital assets, including such dollar-pegged (and euro-pegged and gold-pegged) currencies. As we will see, the histories of early (2014-2016) dollar-pegged cryptocurrencies show a series of flops. But one project, Tether, has become a late-blooming success.
 

Tether had $55 million in circulation as of March 29, 2017, making it the #13 largest cryptocurrency. To keep this size in perspective, a brick-and-mortar US institution with $55 million in deposits is a tiny bank or a mid-size credit union, and Tether is currently only 1/300th the size of Bitcoin.

The Tether white paper explains in more detail the motivation for developing a dollar-pegged cryptocurrency by listing advantages to individuals using it for dollar-denominated transactions rather than using dollars held in “legacy bank” accounts:
 

Transact in USD/fiat value, pseudonymously, without any middlemen/intermediaries

Cold store USD/fiat value by securing one’s own private keys

Avoid the risk of storing fiat on [cryptocurrency] exchanges–move crypto­fiat in and out of exchanges easily

Avoid having to open a fiat bank account to store fiat value

In sum, “Anything one can do with Bitcoin as an individual one can also do with” a dollar-pegged cryptocurrency, namely, “avoid credit card [or debit card] fees,” maintain greater privacy, “remit payments globally” more cheaply, and access blockchain financial services.

But what is the claimed advantage over using Bitcoin? It is the expectation of wider acceptance in payments, because of the advantages to merchants of accepting a dollar-pegged cryptocurrency over accepting Bitcoin in a US-dollar-dominated economy:

Price goods in USD/fiat value rather than Bitcoin (no moving conversion rates/purchase windows)

Avoid conversion from Bitcoin to USD/fiat and associated fees and processes

 

The Flops

First we consider the projects that have flopped. Three projects were launched in September 2014: CoinoUSD, NuBits, and BitUSD. Their pegging mechanisms were different, and are difficult to describe briefly (partly because they were not all entirely transparent), but two common features are important to note.

The rate-pegging mechanisms were not programmed into a source code, like Bitcoin’s quantity commitment, but relied on non-programmed policy actions by a trusted central authority.

None used the traditional currency pegging method of having the issuer hold reserves in physical dollars or dollar-denominated debt securities. (On the NuBits mechanism see this critique by a BitUSD promoter. On the BitUSD mechanism see this critique by the CoinoUSD developer.)

We can examine the fortunes of each project by looking at its price and “market capitalization” (value-in-circulation) history on the cryptocurrency tracking site CoinMarketCap.com.
 

CoinoUSD

CoinoUSD, which began trading in December 2014, was developed by a for-profit payments firm called Coinomat and built on the blockchain of the NXT cryptocurrency. (In November 2014 NXT was the #6 cryptocurrency with a market cap of $19 million; currently it ranks #38 with a market cap around $13 million.)

CoinoUSD reached a market cap plateau of $2.7 million in early 2016, but shut down in early 2016, due to a “payout glitch” that flooded customers with free CoinoUSD units, making it impossible to maintain the exchange value at $1. Coinomat announced a reboot in which the erroneous payout would be reversed and said, “NXTUSD will replace CoinoUSD completely, and enhance it,” but this appears not to have happened. Since then it has had a market cap of zero, and its webpage at the Coinomat site declares it “disabled until further notice.”
 

NuBits

The history of NuBits, also a for-profit enterprise, shows that it gained only a similarly small market foothold. Its market cap plateaued early on below $2.5 million, and since April 2015 has remained below $1 million. In June 2016 NuBits had a devaluation crisis, with the price falling to 20 cents. Its rate-pegging intervention mechanism, despite claiming many layers of reinforcement, was not robust and failed.

Although the price later returned to par, today NuBits shows very little market activity. Since January 2017 the market cap has hovered around only $135,000, with daily trading volume in the neighborhood of $2000.

BitUSD

BitUSD is built on the blockchain platform of the cryptocurrency BitSharesX. Its highest market cap plateau was around $1 million soon after introduction, but it fell to below $200,000 in April 2015 and is currently less than $110,000.

BitUSD uses a novel pegging system that so far has proven robust. A piece promoting BitUSD emphasizes that “the bitUSD is an asset that is not backed by real dollar in someone’s bank account.” (It claims this a virtue: “We cannot trust anyone to hold and secure a physical asset so that people can redeem it eventually. History has repeatedly shown: It doesn’t work!” In fact, history shows the major banks in unhampered banking systems routinely justifying the public’s trust by redeeming their liabilities on demand for decades. Paypal works on the same supposedly non-working model, backed by Paypal’s dollar deposits at Wells Fargo Bank.)

By contrast, BitUSD are created through collateralized forward currency contracts. The network provides an escrow service that credibly ensures repurchase (or “redemption”) of the BitUSD at or near par. Someone who wants to acquire BitUSD, say in order to buy from a seller who prefers a dollar-denominated medium of exchange, offers a contract: so many BitShares (hereafter BTS) for a certain amount of new BitUSD.

Under the BitShare network rules, the acquirer must not only pay at the outset in BTS but also agree to post collateral in BTS equal to the value of the bid. If the bid is accepted by another network participant, explains the BitUSD white paper, “the collateral and purchase price are held by the network until the BitUSD is redeemed” by some third party repurchasing it. The acquirer of BitUSD thus puts 200% collateral into a contract “that only allows access to these BTS when the BitUSD are paid back.” In effect the acquirer is shorting the dollar price of BTS.

“BitUSD is an asset used to hedge a position in BitShares against changes in the price of USD and is not supposed to have an exact 1:1 exchange rate with USD.”

Note that the new BitUSD units are initially 200% collateralized not in dollar-denominated assets, but in BTS. If BTS fall 25% or more against
 

David Ogden
Entrepreneur

Alan Zibluk Markethive Founding Member

Markethive

IT leader’s guide to the blockchain

IT leader’s guide to the blockchain

  

The blockchain may hold significant opportunities for the enterprise

from financial services to IP protection to job documentation. This ebook looks at what the blockchain is and how it could affect your business. The blockchain is a record of every Bitcoin transaction. The name comes from the method by which Bitcoin is unlocked and available to be mined by the public. The code releases nodes in 1 MB chunks, or “blocks,” approximately every 10 minutes. Every coin, and every transaction related to it, is logged. Because the blockchain is available to anyone and contains metadata similar to a bank statement, the code is often referred to as a “public ledger.”

The database is cryptographically secure, and the chain is reliable and can be used to develop applications and protocols that require transparency and complete security. The primary advantage of money—like dollars, euros, and Bitcoin—is that the currency is understood by everyone, yet can be controlled by individuals or institutions. The blockchain, and Bitcoin, offers the additional benefit of transparency. Code, rather than a government, dictates the supply of Bitcoin.

Corporations, small businesses, and individuals all need to be aware of the blockchain. Because the blockchain allows financial transactions to occur anonymously, the technology has empowered the growth of questionable, sometimes illegal, behavior. In recent years ransomware has become a popular method of extorting consumers. Black markets have exploded in popularity. These markets exist on the Dark Web and allow hackers to buy and sell stolen data, zero-day exploits, drugs, weapons, and humans. The United Nations, the FBI, and other law enforcement agencies attempt to track illicit Dark Web transactions, but Bitcoin-based markets continue to flourish.

Well-funded startups also use the blockchain. It's data-rich, secure, and offers unprecedented transparency, so the code can be used as the building block (pun intended) for numerous modern, and future, technologies and startup companies. Etherium, for example, is a blockchain startup that helps enterprise companies develop private chains and private currencies. Mycelium builds physical point-of-sale systems and debit cards for cryptocurrency.

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

Markethive

Japan’s formal embrace of Bitcoin points to growing role of cryptocurrency in commerce

Japan's formal embrace of Bitcoin
points to growing role of
cryptocurrency in commerce

 

Japan recently passed a law recognizing the cryptocurrency Bitcoin

as an official form of payment. The move opens up new opportunities for the Bitcoin ecosystem. The Japanese government recently recognized the cryptocurrency Bitcoin as a legal form of payment, leading to a jump in the price of Bitcoin and opening up conversations about the future of the currency in international trade. In October 2016, Japan decided to drop an 8% consumption tax that it had been levying on purchases of Bitcoin made in virtual currency exchanges. Now, with the legal status of Bitcoin firmly established in the country, adoption of the currency is expected to explode.

As reported by Nikkei Asian Review, two major Japanese retailers have announced partnerships with Bitcoin exchanges that could bring the currency to some 260,000 stores by as early as this summer. One of the retailers, Bic Camera, will let customers make purchases of up to 100,000 yen (roughly $904 USD) with Bitcoin, and will offer the same reward points as they would for traditional forms of payment.

As noted, the announcement led to increased Bitcoin prices, but there is still a lot of work to be done before Bitcoin becomes widely adopted. An official memo from Japan's Financial Services Agency stated that specific requirements will be put on Bitcoin exchanges, and employees will need to be specially trained to handle the transactions. Other countries have also taken steps to investigate Bitcoin. In December 2016, the Australian Accounting Standards Board (AASB) published a paper calling for new standards for digital currencies like Bitcoin, and sought to define whether or not it was to be considered a tangible asset.

In January 2017, the central bank of China formally encouraged individuals to invest in Bitcoin. However, it also stressed that wasn't an official currency and couldn't be circulated. According to Nikkei Asian Review, more than 20 million people use Bitcoin around the world, with the majority of them residing in North America and Europe. However, the recent moves in Japan and China, along with the explorations happening in countries like Australia, could bolster the potential for Bitcoin to be used more regularly in international commerce.

It is important to note, though, that Bitcoin is still a very new technology, and one that not everyone is willing to trust. The bankruptcy of the Mt. Gox exchange in Tokyo damaged a lot of the trust in the currency itself, and highlighted some of the risks inherent to its deregulated nature, as noted by Investopedia.

Additionally, Bitcoin still isn't supported in many countries. Russia and Bangladesh, for example, don't view the cryptocurrency as legal, and other countries allow Bitcoin to be held but not exchanged. Bitcoin's potential for disrupting the financial market is huge. But, the biggest value of Bitcoin and its underlying blockchain ledger technology is the fact that they are decentralized in nature. And as big vendors seek to turn these products into sellable services, they could end up taking away their core value by making the centralized and heavily regulated.

The 3 big takeaways for TechRepublic readers

  1. Japan recently moved to make Bitcoin a legally accepted form of payment, after dropping an 8% tax on Bitcoin exchanges last year.
  2. Other countries including China and Australia have made moves to investigate or leverage Bitcoin, which could set the stage for the cryptocurrency to be used in international commerce.
  3. As big organizations get involved with Bitcoin and blockchain, they threaten to undermine the technologies' core value of being decentralized and unregulated.
Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

Markethive

Top Scamcoins Giving Cryptocurrency a Bad Name

Top Scamcoins Giving Cryptocurrency
a Bad Name

  

The cryptocurrency world

has seen its fair share of scams, Ponzi Schemes, and other programs where people lost a lot of money. Some of those projects will always stand out, mostly due to their sheer size. Interestingly enough, some scam coins have made an impact on the ecosystem as well. Only one of the currencies listed below is still in operation today, and they are being scrutinized by law enforcement agencies as we speak.

The Billion Coin

                                                      

With a name such as The Billion Coin, it is not hard to see why this cryptocurrency has been labeled as a scam. This Ponzi Scheme advertised itself earlier in 2016 as the biggest cryptocurrency, even dethroning bitcoin. As one would come to expect from this malicious schemes, The Billion Coin claims its value will always go up. TBC mainly targets users in Indonesia, and a lot of innocent people fall victim to this scheme.

However, with no source code — hence no currency to speak of — and no whitepaper — it becomes evident this project is selling nothing but hot air. There is no development roadmap either, indicating there is no one developing this project. Even the block explorer seems suspicious, which is not surprising considering there is no technology powering this scam. Moreover, it is not possible to exchange The Billion Coin anywhere, as no exchange wants to list it.

 

PayCoin

                                                 

Everyone in the cryptocurrency world has heard of PayCoin, an infamous cryptocurrency scheme operated by Homero Joshua Garza. PayCoin portrayed itself as a global currency that could compete with bitcoin, yet never lived up to that expectation. Mining Paycoin could only occur through the company’s proprietary cloud mining platform, called Zenminer.

GAW Miners, the company operating Zenminer and PayCoin, once claimed a US$8m investment was made in the platform, but that information was completely bogus. Things unraveled for Paycoin once Zenminer started attracting a lot of money, eventually leading to all withdrawals being suspended indefinitely. All platforms who listed PayCoin for trading purposes promptly removed XPY shortly afterward. It remains unclear how much money has been lost due to the PayCoin scam to this very day.

OneCoin

                                  

When talking about cryptocurrency scams, one should look no further than OneCoin. Similarly to The Billion Coin, OneCoin has no technological infrastructure, no development, and no white paper. This entire ecosystem is created out of thin air, yet it continues to attract investments from unknowing consumers all over the world.

Thankfully, OneCoin is meeting a lot of resistance from various governments all over the world. The London Police is actively investigating this pyramid scheme. Plus, Italy has banned OneCoin activity due to an ongoing fraud investigation. Bringing down this scheme once and for all could be challenging, but things are heading in the right direction.

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

Markethive

Florida Man Goes From Multilevel Marketing To Cryptocurrency- What Could Possibly Go Wrong?

Florida Man Goes From
Multilevel Marketing To Cryptocurrency  What Could Possibly Go Wrong?

  

Brand New CryptoCurrency and Multi-Level Marketing

Combine Florida man, a penny stock, a brand new cryptocurrency and multi-level marketing.  What could possibly go wrong?  That was my thinking when Ernie Land told me about Sunshine Capital Inc and Dibcoin.  Sunshine Capital which plans on acquiring businesses has Rx Smart Coffee as one of its targets, so they are taking advantage of Ernie's expertise in multi-level marketing.  I became acquainted with Ernie Land when I was covering young earth creationist Kent Hovind, who having finished his sentence is still working on getting his original conviction reversed.  I think there are some tax issues that the Sunshine Capital people may be making light of, but we'll save them for the end while I give you some background.

About Cryptocurrencies

The best known and most used cryptocurrency is bitcoin.  A website that tracks the cryptocurrency market indicates that the value of the over 700 currencies that it tracks is just shy of $27 billion. Of that over $18 billion is represented by the over 16 million circulating bitcoins which are worth, as I write this $1,130.72 each.  Two other currencies, Etherium and Ripple, have more than a billion dollars in market capitalization.  There are six others with capitalization over $100 million.

To compare all this to another form of currency that allows confidential transactions and holds value pretty well there are over one trillion dollars worth of hundred dollar bills in circulation. So Benjamin Franklin is holding his own for now. Bitcoin has already topped pictures of George Washington and Thomas Jefferson combined.  It tops the $14 billion worth of pictures of Abraham Lincoln and is close to old Alexander.  Maybe there will be a Broadway musical called Bicoin in a couple of centuries. Of course the actual dollar money supply is more complicated than all that green paper floating around, but I will leave it to an economist as to whether the proper comparison to cyrtocurrencies is M0 or M1 or M2, etc.

The two most important concepts to understand if you want to understand bitcoin are the blockchain and mining.  I want you to make a study of them and then explain them to me.  As tax preparers go, I'm pretty good at math.  As it happens, though, you learn all the math you need to do tax work by the fourth grade.  Here is the important part for you and me to know in order to evaluate dibcoin. Bitcoin "mining" which somehow insures the integrity of the blockchain (thereby making sure that each bitcoin is only owned by one "wallet") requires the expenditure of significant computer resources.  It is hard and scheduled to keep getting harder which is what insures the scarcity of bitcoins.  That and people losing the keys to their wallets which is kind of like all those Spanish ships full of doubloons that have sunk reducing the hard money supply.

What Is Special About Dibcoins?

I spoke with Honson Luma, VP of Sunshine Capital, Inc and DIB Funding, Inc who is the creator of  Dibcoin.  He did his best to explain to me the concept of "Omni Layer".  It was a little like me trying to explain the 704(b) regulations and the concept of "partners interest in the partnership"  to my son's dog.  At any rate according to its website Omni Layer is an "open-source, fully decentralized asset platform on the Bitcoin Blockchain".  It goes on to further elucidate:

Omni is a platform for creating and trading custom digital assets and currencies. It is a software layer built on top of the most popular, most audited, most secure blockchain — Bitcoin. Omni transactions are Bitcoin transactions that enable next-generation features on the Bitcoin Blockchain. Our reference implementation, Omni Core is an enhanced Bitcoin Core that provides all the features of Bitcoin as well as advanced Omni Layer features.

Got that? Good. .  At any rate, the important point is that the Omni Layer allows anybody who wants to to set up a new crytpocurrency without investing a lot in infrastructure. Dibcoin is number 89 on the Omni platform. There is no mining of Dibcoins.  They are pre-mined. All 5 billion of them started out being owned by Dib Funding Inc.  Here is the genius part.

DIBCOIN will be the first cryptocurrency to be used by a public company to acquire existing profitable private companies. Sunshine Capital will use DIBCOIN as a monetary instrument, to acquire companies and assets, building its portfolio with no debt.

About Sunshine Capital?

Dib Funding owned most of Sunshine Capital Inc, but if you want a piece, you can buy some on the OTC.  As I write this Sunshine is priced at $4 per share.  Not that I was going to buy it, but when I asked my investment adviser who works for one of those big outfits, he told me that I probably couldn't buy it through his firm.  They consider anything under ten bucks a share to be a "penny stock" and way too volatile.

Sunshine Capital, Inc's unaudited financial statements do not appear all that impressive with just over $20,000 in gross income in 2016 for a net loss a bit over $30,000.  Assets consist of about $2,500 in cash.  Among the liabilities are notes payable of $5,500 to James Scheltema, a recent president of Sunshine who pleaded guilty to filing false tax returns and tax evasion in January.  Here is where the genius comes back in.

In February, most of Sunshine's stock was cancelled leaving 16,977,000 shares.  President Adam Petty commented:

"The controlling shareholder has canceled their shares to guarantee the success of this Company and to increase the book value of all remaining shares outstanding," Stated, Adam Petty, President and CEO of Sunshine Capital, Inc. "With the cancellation of these shares, every penny ($.01) DIBCOIN trades at, once trading commences in the near future, will instantly provide Sunshine Capital, Inc. access to nearly $40,000,000 in capital and results in a net asset value, of Sunshine Capital, Inc., stock by approximately two dollars and thirty-five cents ($2.35) per share."

With the commencement of trading of Dibcoin on Livecoin, Honson Luma exclaimed:

"In months, we have done something that takes other companies years to achieve!" exclaimed Honson Luma, Vice President of Sunshine Capital, Inc. "What the investment world needs to understand is that for every penny DIBCOIN trades at, it gives our Company approximately $40 Million Dollars in liquid assets. So, a single penny should increase Sunshine Capital, Inc.'s book value approximately $2.35 a share."

According to Livecoin, the last Dibcoin transaction was at 0.00087 BTC, which works out to about a dollar.  Dibcoin at a buck, seems to be what they were shooting for when they retired all corporate debt with Dibcoins at a dollar.  According to the financial statements Sunshine had less than $12,000 in liabilities at 12/31/16, so maybe that is not so dramatic. Nonetheless, Dibcoins at a buck means Sunshine is worth $235 per share.  And you can get it for $4 if you have a broker without a picky compliance department.

That's the compelling story I get from Ernie Land and Honson Luma.  I really like Ernie, but he can sometimes get carried away.  When I gave him a hard time about how his fellow Hovindicator was bad mouthing Jesuits, I told him that I had eight years of Jesuit education (Xavier High School 1970, College of the Holy Cross 1974).  Somehow, that got translated into me having been a Jesuit for eight years, which would be equivalent to my four years as a JROTC cadet in the late sixties making me a Vietnam veteran. Ernie believes that the world is about six thousand years old and dinosaurs existed contemporaneously with humans. Honson Luma emphasized to me that Rx Smart Coffee is just one of Sunshine's potential acquisitions and they are not staking their credibility on Ernie's endorsement.  Ernie, himself, has not claimed a big role in Sunshine.  He does see this as his chance to make up for missing out on the bitcoin run-up.

The Tax Problem

In my discussion with Honson Luma he seemed to be of the opinion that virtual currency only generates taxable income when it is exchanged for US dollars.  The guidance issued by IRS in Notice 2o14-21 indicates that virtual currency is property.  Generally when property is exchanged for other property gain or loss is recognized.  If we assume that Sunshine has zero basis in its Dibcoins, that means it will recognize gain on each acquisition.  That might mean that it only has $3 billion to work with after tax, give or take.  But it could be worse. Consider this from Notice 2012-21

Q-8: Does a taxpayer who “mines” virtual currency (for example, uses computer resources to validate Bitcoin transactions and maintain the public Bitcoin transaction ledger) realize gross income upon receipt of the virtual currency resulting from those activities?
A-8: Yes, when a taxpayer successfully “mines” virtual currency, the fair market value of the virtual currency as of the date of receipt is includible in gross income. See Publication 525, Taxable and Nontaxable Income, for more information on taxable income.

Was the listing on Livecoin a taxable event equivalent to a bitcoin miners success?  I actually don't think so, but it would cause me to lose a bit a sleep. The demand for dollars to pay taxes from the gains recognized on the acquisition do, in my mind, pose a threat to the structure, as the need to convert dibcoins to dollars could drive their value down. You will likely to be able to buy some of the Rx Smart Coffee Gentlemen's Blend for dibcoins before long, in the event you are having issues with your male vigor.  I expect you will have to use dollars to pay your taxes for the foreseeable future, though. We'll see if the whole enterprise lasts long enough for taxes to be a problem.  I do have my doubts.

Other Opinions

I got some thoughts on the future course of Sunshine Capital Inc from Alma Angotti, Managing Director, Global Investigations & Compliance, Navigant Consulting.  She wrote me:

Securities regulators will likely have concerns about the accuracy of the company’s disclosures, particularly if and when they start to invest in other companies. This reminds me of a blind pool or blank check offering in which the company offering securities does not identify a specific acquisition target or line of business. Those kinds of investments can be risky. The stock price of Sunshine Capital has been very volatile.

As for the Dibcoin, regulators and law enforcement will focus on the anonymity, cross border / cross currency capability and lack of regulatory oversight. Because of these attributes, the product could be used to commit tax evasion, money laundering and fraud. Although they say that Dibcoin is built on top of the bitcoin blockchain, that does not necessarily mean that it is tied to the price of bitcoin. Since there is no mining of Dibcoin, and there is already a certain amount in circulation (5 billion), the price of Dibcoin is set by the issuer. Regulators will likely closely scrutinize the transactions executed through the exchange of Dibcoin.

Most of the "coverage" of dibcoin has been press releases from Sunshine Capital, Inc or Dib Funding, Inc.  A post on beyondbitcoin expressed extreme skepticism.

Wouldn't It Be Great If This Could Work?

More than anything else Dibcoin reminds me of a short story by Poul Anderson titled Fairy Gold which is nicely summarized here. A young man is rewarded for helping an elf with fairy gold.  Fairy gold is just like real gold at night but turns into trash when the sun rises.  A series of transactions occur.  The last one is by the hero's former girl friend who sells her grandmother's business, before the coin goes poof, but it is fine because now she can live happily ever after with the hero.  I'm sure a feminist critique of the story would find it problematical, but that's not going to bother Poul Anderson who died in 2001.

It also reminds me a bit of the real story of Alfves dos Reis, chronicled in The Man Who Stole Portugal.  Reis convinced the British bank note company working for the Bank of Portugal to print 200,000 500 escudo notes for him and his crew.  His plan, which almost succeeded was to use some of the money to buy control of the Bank of Portugal, which would have retroactively made his notes valid.

Of course everything that Adam Petty and Honson Luma and Ernie Land are doing is in the open.  The only thing I find a bit disingenuous is the notion that somehow having a public company hold all the dibcoins makes them more valuable.  Particularly a public company that based on its own financial statements does not otherwise appear to be worth the powder to blow it away.  I might also add that even after all this time, I'm still not a believer in bitcoins, more or less the gold standard of cryptocurrencies, as a long run store of value. In the MIT Technology Review Jamie Condiffe wrote"Why Bitcoin's $1,000 Value Doesn't Matter".  Quoting the Financial Times we get:

For context, the Central Intelligence Agency put the planet’s stock of broad money—notes, coins, and various forms of bank account—at $82tn as of the end of 2014. On the CIA figures, the value of bitcoins hashed into existence is similar to the broad money total for Uzbekistani soms. With apologies to Tashkent, the value of soms and bitcoins, and the number of people for whom they are relevant pieces of information in the world of modern finance, both round to zero.

So maybe the Dibcoin believers will be able to mock me in a couple of years.  I can take it.

Chuck Reynolds
Contributor
 

Alan Zibluk Markethive Founding Member

Markethive

P2P Cryptocurrency Exchanges, Explained

P2P Cryptocurrency Exchanges, Explained

P2P Cryptocurrency Exchanges, Explained

How did P2P exchanges evolve?

Peer-to-peer exchanges were a natural development of the concept, aimed at eliminating some of regular Bitcoin exchanges’ limitations. For the most part of Bitcoin’s existence, online exchanges served as the primary gateways into the cryptocurrency world. Seeing how a very small number of shops, both online and physical, accept cryptocurrencies as payment, there is a natural need for users to have some sort of interface between the economies of the real world and the Bitcoin.

Online exchanges such as Bitstamp, BTC China, Kraken, and others, have been fulfilling that need as the most popular place for trading Bitcoin and other cryptocurrencies for fiat money and vice versa. The downside is that, unlike Bitcoin itself, these exchanges are run by companies. This means that they have staff, they oversee and manage all the interactions between their users, they serve as arbitrators in cases of disputes, and they collect fees for doing all that.

Seeing how that produces a whole number of disadvantages, some members of the Bitcoin community have set out to disrupt the market by producing a new solution — decentralized peer-to-peer exchanges, that are run not by people, but by software.

How are trades performed on P2P exchanges?

The exchange software is used to automatically connect buyers and sellers with each other, based on the terms they prefer. First, let’s sum up how a ‘regular’ cryptocurrency exchange works. People looking to sell Bitcoins specify the amount and the price they’d like to sell them at. All those requests, known as ‘orders’, are placed in a common ledger, called the ‘order book.’ When another person wants to buy Bitcoins, they either look for a satisfactory offer in the order book or, if none can be found, create their own ‘buy order’, specifying the terms of the deal as they like. Whenever possible, the exchange matches buy and sell orders by price and processes the trades.

Now, Bitcoin transactions can take a long time — from five to 10 minutes at the least, and up to several hours. Fiat money transfers usually take even longer; in some cases, international payments may take several days to complete. In order to speed up the process of trading, the exchange serves as a trusted intermediary: it settles all trades immediately, even though the actual transactions might have not yet been finished.

In order to remove the need for a third party, P2P exchanges operate in a different way. Instead of matching orders in the order book, they match the people behind those orders. That is, whenever a matching buy and sell orders are found, the exchange software does not immediately process the trade, but instead, it connects the buyer with the seller, allowing them to conduct the deal without any intermediaries. Still, third parties may be involved as arbitrators in case of possible disputes, but no human involvement from the exchange is required by default. Here, just like with Bitcoin itself, the software alone is perfectly capable of matching traders with each other in a decentralized manner.

What are the advantages of P2P exchanges?

P2P exchanges offer high resistance to transaction censorship, are cheap to use, private and secure; at least when realized properly. All advantages of decentralized cryptocurrency exchanges arise from not having a single company in charge of things. A single point of authority offers some advantages — primarily, the faster trades. However, it also works as the single point of failure, meaning that every bit of damage to it affects the entire system. So here are the advantages of the P2P exchanges, achieved by removing that single point of failure.

Transaction censorship resistance.
Regular cryptocurrency exchanges are run by people — they are vulnerable, and may be exploited by governments by imposing regulatory restrictions. Case in point: the recent intervention by the People’s Bank of China, which lead to two of the largest exchanges in China freezing all Bitcoin withdrawals for a month. As a user, you wouldn’t want that to happen to your funds.

On the other hand, P2P exchanges are practically invulnerable to government interference, because they don’t have any central point of authority which could be coerced. Even if some parts are forced to cease their operations, the rest of the system remains unaffected. This advantage is exactly what has caused a sharp increase in the user base of LocalBitcoins, one of the top P2P exchanges, following the aforementioned PBoC’s actions.

Cheap operations. Again, regular exchanges are operated by people, who have to be paid for their work. P2P exchanges are run by software, so there’s little to no corporate overhead, and, by extension, very small fees for the users, if any. Privacy. Over the recent years, governments around the globe have been successfully enforcing AML and KYC regulations on cryptocurrency exchanges. This oversight forces the companies running those exchanges to collect as much info on their users as possible: names, places of residence, ID numbers and more.

It goes without saying that government cannot impose those regulations on P2P exchanges, which means that trades can be conducted in a much more private manner there. Security. P2P exchanges do not hold Bitcoins for their users — instead, they connect traders, allowing them to conduct deals directly. Not having to entrust your coins to a third party makes the process much safer. If nobody holds your funds but you, then nobody can steal or lose them — intentionally, or accidentally.

What are their downsides?

P2P exchanges aren’t better than the regular ones in every regard — longer trade times, less intuitive use cases and lower liquidity are some of their comparative disadvantages. Most flaws of decentralized exchanges are caused simply by the fact that they are a relatively new kind of service. For example, Bitsquare, arguably one of the oldest of such exchanges, has been around for just three years and most of that was the development period.

As such, these exchanges have to deal with a number of problems. For example, most of them are currently aimed at small, specific audiences of crypto enthusiasts and haven’t had the need to cater to newcomers — because of that, they tend to be less intuitive to use. For the same reasons — small audience and early stage of existence, decentralized exchanges usually have much lower trading volumes than the regular ones.

Longer trade times, on the other hand, are likely a disadvantage that will take a while to fix, if ever. They are caused by the manner in which the trades are conducted — with traders having to wait for actual Bitcoin and fiat transactions to complete before a trade is concluded. This last issue, coupled with the lower liquidity, means that P2P exchanges are not at all in demand with, for example, professional traders, who need fast transactions to make timely deals. In their current state, these exchanges can only be useful to people interested in the specific advantages they offer — the increased resilience, privacy, security, and freedom of payments.

If there is no authority in charge, how is fraud prevented?

In order to prevent potential fraudulent activities, different P2P exchanges use different solutions. Typically, they are a reputation-based system of community arbitrators, obligatory deposits for the duration of a trade or face-to-face meetings between traders.

The way trades are conducted on P2P exchanges leaves the users vulnerable to fraud. Bitcoin payments are final and cannot be refunded, and, conversely, fiat money transfers are often refundable. Because of that, a buyer may send their fiat payment, receive the Bitcoins, and then request a refund from their bank, or whatever other financial organization they are using, and leave the seller with nothing. In order to prevent such instances, P2P exchanges introduce all kinds of security features. For example, Coinffeine has a system of obligatory deposits: before a trade begins, both counterparties have to deposit a certain amount of Bitcoins. If all goes well and the trade completes uncontested, those deposits return back to the users.

If a dispute does take place, an arbitrator appointed by the community hears both sides and resolves it. The deposits are then used to compensate the victim of the fraud and the arbitrator’s services. A reputation system for arbitrators is also in place to ensure that they do not abuse their powers. LocalBitcoins has chosen another approach: it allows the users to meet in person to conduct their trades. This way they can ensure the deal is fully completed before parting ways. Obviously, this limits trade opportunities to the specific location a trader resides in. Hence, the name of the service, LocalBitcoins, but for some, it is a justified tradeoff for increased security.

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

Markethive

Majority of Nigerians Have Faith in Bitcoin

majority of Nigerians have faith in bitcoin

Majority of Nigerians Have Faith in Bitcoin

A recent survey indicates that Nigerian trust Bitcoin more than gold when it comes investments.

Bitcoin is rightly deemed as the “Digital Gold”. The cryptocurrency, introduced to the world in 2009 has all the properties of gold, except for the weight and these features aren’t lost on the Nigerian cryptocurrency community. Bitcoin has a huge presence in African nations, and Nigeria is one such African country which recently ranked high in Google Trends for Bitcoin-related searches. The extent of faith in the cryptocurrency among the community is now known to the world, thanks to a recent survey conducted by Luno — a cryptocurrency platform serving the region.
 

As a part of this survey, Luno sent a series of questions to all its Nigerian customers, and the results didn’t come as a surprise. The report states that the trust factor in Bitcoin among Nigerians is at an all-time high, as over 59% of the participants in the survey responding positively to the cryptocurrency. The untrusting ones were about 17% of all survey respondents while the remaining preferred to be neutral.
 

One of the leading African tech magazines quoted a representative from Luno describing the survey process saying,

 

“We shared a survey with our Nigerian customers which went out to all of our customers. We then reviewed the results for statistical significance, outliers, and errors and compiled the infographic from the data… Note that it was only sent to Luno customers, so the data might be slightly skewed towards our customer preferences (as opposed to all Nigerian Bitcoin users), but we enjoy the highest trading volume of Nigerian Bitcoin exchanges — as per publicly available volume data — so it should be somewhat similar across the board. We aim to do much more research and share the results with the media and Bitcoin community in the coming months.”

While the results may not be 100% accurate as those participating in the survey were already onboard Luno platform, which makes them existing cryptocurrency users, potentially having a biased opinion towards their favorite digital currency. Also, many of these respondents were found to be in favor of purchasing Bitcoin over gold as they expect the cryptocurrency’s value to appreciate much faster than that of the yellow metal.
 

The results of the survey were published by Luno in the form of an infographic, along with a promise to provide more information as soon as it finishes in-depth research and analysis of not just the platform’s users but other individuals as well.

David Ogden
Entrepreneur

Alan Zibluk Markethive Founding Member

Markethive

Litecoin Is Far More Popular Among CNY Traders Than Ethereum

Litecoin Is Far More Popular Among CNY Traders Than Ethereum

Bitcoin is the top cryptocurrency

Cryptocurrency trading is booming in China, and the rest of the world is following suit. Bitcoin is the top cryptocurrency in just about every country. But the competition between Litecoin and Ethereum is still in full effect for CNY traders,  whereas things look very different in the USD market.

CNY Traders Prefer Litecoin

                                                     

TheMerkle_Litecoin CNY Ether

It comes as quite a surprise to find out exchanges dealing with CNY are seeing more trading volume in Litecoin than Ethereum as of late. Given the global appeal Ethereum seems to have, and the growing interest from all over the world, the trading volume in CNY markets does not seem to reflect that by any means.

Looking at the previous 24-hour volume, for example, shows that nearly three billion CNY has been changing hands to buy and sell Litecoin. Ethereum, on the other hand, has only seen 1.8 million CNY change hands, which is only a blip on the radar in comparison. In fact, only 20,804 Ether has been traded across exchanges supporting the yuan, which is quite a surprise.

Comparing this to the USD markets, Bitcoin and Ethereum are the clear leaders, with Litecoin still in the third spot. But Ethereum seems to be losing a lot of momentum in this market as well, with slightly over US$1m traded in volume over the past 24 hours. This is a lot less than most people would expect, albeit the majority of Ethereum volume is coming from the BTC market.

It is quite interesting to see Litecoin holding on to the second spot as far as CNY trading is concerned, though. Given the fact LTC was the second “major” cryptocurrency for a long time, that only seems normal. But at the same time, the cryptocurrency has seen no real innovation or adoption spike over the past few years.

The big question is what CNY traders are doing with Litecoin, other than speculating about the price. So far, it does not appear as if investors are using LTC to buy goods or services, but only as a way to speculate on the value of the cryptocurrency. Either way, it is rather interesting to note, and a sign that Litecoin is far from dead.

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member