Bitcoin Price Will Have ‘No Difficulty’ Hitting $10k, With 30,000 New Wallets a Day: Max Keiser

Bitcoin Price Will Have ‘No Difficulty’ Hitting $10k, With 30,000 New Wallets a Day: Max Keiser

After Bitcoin hit $6,000 and stayed above it Monday,

the virtual currency’s most famous fans are confident $10,000 will involve little effort. Mixed messages are accounting for Bitcoin’s sudden second surge above the $6,000 mark, with Max Keiser pointing to a combination of

factors for underlying support.

30,000 new #Bitcoin wallets a day. ETF coming soon. Wall St. just getting started. Regulators waking up to their impotence. Hello $10,000!

The move itself, however, could be down to just one trader, analysis on

social media suggests.

it wont appear in the feed due to time to close but all signs point to a top holder getting liquidated credit

Bitcoin continues to deny bubble criticism from major legacy finance figures, which now include infamous investor Warren Buffett, while JPMorgan CEO Jamie Dimon has taken a back seat in his cryptocurrency chiding. Keiser meanwhile remains steadfast in his prediction of an easy ride to $10,000 per Bitcoin, reiterating his long-term target since 2011 being ten times that – $100,000.

Anyone who thinks otherwise, he wrote on Twitter Monday, “has not been paying attention.” Bitcoin prices reached a new all-time high of $6,300 Sunday before tailing off to hover around $6,110 at press time. The move dragged altcoin markets along with it, with the top ten seeing 24-hour gains of up to 6.6 percent. Bitcoin Cash, too, has achieved multi-week highs with its Sunday trading price of $475 at its highest since mid-September.

Bitcoin Fork SegWit2x:

eToro Draws Battle Lines While OKEx Could Service China

The Bitcoin industry continues to take different approaches

to SegWit2x as eToro and OKEx issue their positions on the Bitcoin hard fork. In statements over the past week eToro became one of the more skeptical exchange platforms, opting for limited SegWit2x support and shunning the Bitcoin Gold fork altogether. “…In the case of the upcoming Bitcoin2X fork, there is no Replay Protection, which may lead to transaction errors and double spending,” a dedicated blog post reads. eToro added it would continue applying the BTC ticker to the Bitcoin Core chain, unlike others such as Xapo, which has stated BTC could signify the SegWit2x chain should the latter receive adequate support.

Conservative standpoints like eToro’s have seen support from community commentators, with popular commentator WhalePanda even endorsing companies treating SegWit2x as an altcoin. OKEx meanwhile has taken a more inclusive stance. Coming at a time when a major p2p trading offer is about to launch, rumors say Monday, the exchange’s support for the 2x chain could affect the huge domestic Chinese market. “…As a company dedicated to promote Bitcoin application, we strive to provide the best services to our customers. Therefore, we will support all major Bitcoin technical development roadmaps and respect our customers’ individual desire,” OKEx wrote in

its corresponding announcement.

“The […] token supporting Segwit2x will be named as BT2, the token derived from the original chain will be named as BT1.  If the hardfork occurs then BT1 will be renamed as BTC.”

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

How About an ICO? Company’s Stocks Rocket 400% On Blockchain Rebranding//Chinese may trade again.

How About an ICO?
Company’s Stocks Rocket 400%
On Blockchain Rebranding

It’s not just initial coin offerings (ICOs) that are acting like magic

– the word ‘Blockchain’ has just revolutionized one company’s finances by 400 percent. UK-based On-Line PLC, which supplies Internet-related software through various subsidiaries, saw its share price rocket from £15 ($19.60) to a high of £84 ($110) in hours after it announced it was adding ‘Blockchain’ to its name. On-Line, which has been around since the start of the Internet boom in 1996, saw unprecedented trading based on the news, Bloomberg reports. Shares in the company are currently retracing after the sudden spike to circle around £60. The performance mimics that of multiple altcoins following news about their interaction with the mainstream cryptocurrency market.

“We feel the time is right to re-name the company to reflect these developments, where we believe the future growth will be in our sector,” a statement released Thursday explains, calling Blockchain “new and exciting.” The day’s growth puts On-Line’s market cap at £4.17 mln and reflects the continued buzz around Blockchain which is seeing an increasing number of corporations go in for experimenting with it. This week, ratings agency Moody’s nonetheless said Blockchain’s disruptive potential still made it a distant threat, albeit one which would likely inevitably shake up the norm when it hit.

Chinese Might be Able to Trade
Bitcoin Again Soon

19th National Congress of the Communist Party of China,

the most important conference in China this year, ended on Oct. 24. With the end of the conference, some temporary regulations and policies are canceled as well. Among the regulations, the shutdown of Bitcoin trading in China might be one. On Oct. 28 ZB.com, which is a new cryptocurrency trading platform, announced that all trading functionality will be available from Nov. 1. Users can sign up for accounts and deposit now.

The platform claims that people all over the world, including those in mainland China, can exchange and trade on the platform. The languages of the website are Chinese and English. However, it’s too soon to state that the regulation toward Bitcoin and other cryptocurrencies is invalid. Maybe the platform will be closed by the government soon. Nevertheless, there are also people saying that the Chinese government is behind the platform.

Offline trades become popular after regulation

For now, nobody knows exactly what’s going to happen after Nov. 1. It's good news if Chinese Bitcoin traders may operate more easily. Since the shutdown of Bitcoin trading platforms in China, people have started to trade Bitcoin through Taobao, which is the Chinese version of eBay which belongs to Alibaba Group, Wechat chatting group, and QQ chatting group. Offline trades have become popular between Chinese Bitcoin traders.

Chuck Reynolds

 


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

 

UK Auditors Blast NHS ‘Basic’ Security Failures Over WannaCry Cyberattack // more

UK Auditors Blast NHS ‘Basic’ Security Failures Over WannaCry Cyberattack

The UK’s National Audit Office (NAO) has said the country’s health service failed

to “follow best practices” to prevent the WannaCry cyberattack. The National Health Service (NHS) was one of the first major victims of May’s international Bitcoin ransomware, which demanded users pay $300 in order to regain access to infected computers. Despite being a “relatively unsophisticated attack,” the NAO said in a new report, the NHS was easy prey. WannaCry “could have been prevented by the NHS following basic IT security best practice.”

“There are more sophisticated cyber-threats out there than WannaCry, so the Department (of Health) and the NHS need to get their act together to ensure the NHS is better protected against future attacks,” it advised. The report comes as a new variety of ransomware known as Bad Rabbit makes its way across the world, infecting public computer systems in Russia, Ukraine, elsewhere in Europe and even Japan. WannaCry was the most prolific attack of its kind, spreading easily due to a conspicuous lack of security guarding the IT systems of its victims.

“The NHS could have fended off this attack if it had taken simple steps to protect its computers and medical equipment,” Meg Hillier, chair of the UK government’s public accounts committee reiterated. “…The NHS and the department need to get serious about cybersecurity or the next incident could be far worse.” Though the discovery of an antidote, WannaCry’s effect was limited after a certain point, and the attack was notable for the correspondingly meager amounts collected by hackers. This led Russia’s Internet advisor Herman Klimenko even to suggest the perpetrators were children.

Japan’s Quoine – Too Much Interest
to Handle from ‘Desperate’
Chinese Exchanges

China’s Bitcoin-to-fiat exchange and ICO ban

is producing a record number of “desperate” refugees, Quoine’s CEO Mike Kayamori has said. In comments to Bloomberg, the Japanese exchange head said the fallout from the Chinese rules means the country’s exchange operators are fervently looking for alternatives, including in Japan. “We’re talking to almost all of those guys. They’re all desperate now,” he told the publication.

Japan offers a ‘friendlier’ licensed environment for crypto exchange businesses, while China’s household names such as OKCoin and Binance are eyeing up Hong Kong, Singapore and South Korea. Kayamori said that such is the scale of demand, Quoine alone is unable to service Chinese requirements. “There’s a lot of Chinese retail people reaching out to us, but we can’t handle it. So if a Chinese partner can handle all of those and they connect to us, that will be much easier,” he added.

As China’s flagship exchange BTCChina shuts its doors in the coming days, the Bitcoin sphere is buzzing with speculation as to if and when the situation will change once again. In the meantime, international scaling is something OKCoin is considering in light of current demand. “China used to account for a significant share of the cryptocurrency market, so we think the demand is there," Lennix Lai, financial market director for its subsidiary OKEx said. “As formerly one of the biggest operators in China, we think we have a good chance of competing globally.”

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

How Bitcoin Forks Influence Bitcoin Price Rise and Fall

How Bitcoin Forks Influence Bitcoin Price Rise and Fall

Prior to the Bitcoin Gold fork two days ago,

the market made some interesting moves. Bitcoin price reached a new all time high on Oct. 20, 2017 – five days before the Bitcoin Gold fork -surpassing $6,000 for the first time and eventually climbing to nearly $6,200.

Those of you who have endured past chain splits are aware of what usually happens when there’s a split from the Bitcoin network. Ordinarily, the community complains, reddit.com, medium.com, and twitter.com become platforms for soapbox speeches, and a lot of trash is talked by factions within the community. However, have you noticed the other events that are correlated with a chain split? Once a chain splits, you suddenly own a number of split tokens equivalent to the number of tokens you had on the Bitcoin network. This is because the new chain will be an exact copy of the Bitcoin Blockchain up until the point where the fork occurs.

If the wallet you use supports the forked chain’s software, you will be the owner of two digital tokens: Bitcoin and the Forked Chain Token. In our example we will use Bitcoin Cash (BCH) as the forked token. When the Bitcoin Cash chain forked off of the main chain, owners of Bitcoin became owners of an equivalent amount of Bitcoin Cash. This is because the chains were identical until the fork occurred. If you owned 10 BTC before the split, then you owned 10 BTC and 10 BCH after the split. This is where the slope becomes slippery.  People or organizations with unfathomable amounts of money can use forks as an opportunity to extort both the Bitcoin network and the forked network for enticing capital gains

when a fork occurs.

 How important is the impact of #Bitcoin forks on Bitcoin price?

Preparing for the fork

Let's say Randy owns 35,000 Bitcoins; at a value of $5,000 per Bitcoin, Randy’s digital assets are worth $175,000,000. Just like anybody with large amounts of money invested in a market, Randy pays attention to news that may affect his position (wealth) in that market. Randy learns that there will be a hardfork in the Bitcoin network and that the hardfork will create a new token, Bitcoin Cash (BCH).

On top of this, Randy learns that his Bitcoin wallet provider will support the forked software, so he knows that he will own Bitcoin Cash as well as Bitcoin once the fork occurs. Now, Randy expects to have 35,000 Bitcoin Cash tokens in addition to his 35,000 BTC after the fork.  If Randy was to increase his position by millions of USD worth of Bitcoin, he would be the owner of more Bitcoin than he previously owned.

However, he would also create a buy wall that drives the Bitcoin price up since he is such a large player in the Bitcoin market. When Randy increases the amount of Bitcoin he owns, he also increases the amount of Bitcoin Cash he will own once the fork occurs. Because Randy is an educated investor, Randy decides to increase his position in Bitcoin so that he owns 50,000 Bitcoin the day before the fork. Randy did this because he would like to own even more Bitcoin Cash than the 35,000 he would have had if he did not increase his position in Bitcoin. Now when the fork occurs, Randy expects to have 50,000 BCH in addition to his 50,000 BTC.

What happens when a chain forks

When the Bitcoin Network forks, some of the value that was in the Bitcoin network splits into the forked chain. When Bitcoin Cash forked from the Bitcoin network, the value of Bitcoin went from $2800 to $2700 (July 23,2017). As a result of the fork, Bitcoin Cash was created and was valued around $555 at the time of it’s launch. (July 23, 2017).

Now what does that mean for Randy?

When Bitcoin dropped from $2,800 to $2,700, Randy's digital assets (wealth in Bitcoin)  dropped from $140,000,000 to $135,000,000, a $5 mln loss. However, because of the fork, Randy now has 50,000 BCH worth $555 a piece. Because Randy is an educated investor and has no plans to use the Bitcoin Cash (BCH), he immediately sells his BCH for a profit the moment the option to sell BCH becomes available to him on his preferred exchange.

Randy sells all 50,000 of his BCH for a profit of $27,750,000. A nice $28 mln gain (rounded number) to make up for the $5 mln loss that he suffered due to the decline in the price of Bitcoin. At the end of the day, Randy profits around $23,000,000 from the chain split. Keep in mind, there are other investors like Randy who are highly educated and extremely skilled at what they do. Furthermore, they may be executing a similar or even more efficient strategy as Randy regarding the hardfork; buy a lot of Bitcoin, anticipate a chain split where you are left with a number of new altcoins equivalent to the number of Bitcoin you own, quickly sell off the altcoin for a profit and then decrease your position in Bitcoin because it is overvalued.

Individuals like Randy are referred to as whales: individuals who hold positions so large in the Bitcoin market, that their bid and ask orders are capable of shaking up the market. Since it only takes a few big players using a similar strategy to drive the value of Bitcoin up or down, when an opportunity like this presents itself (a hardfork), the price of Bitcoin may not reflect the true value of Bitcoin.

Since educated investors know that the Bitcoin price may be artificially high due to big players like themselves implementing a hardfork strategy, the big investor(s) have an incentive to lower their position in Bitcoin once they have executed their hard-fork gameplan. This is because they expect the Bitcoin price to correct to a value that is closer to its true value once all the hard-fork affiliated nonsense subsides. Because there are multiple people like Randy who have a relatively large position in the Bitcoin market, when these people decrease their position in Bitcoin to an amount that they are comfortable owning during a bear period (and that number may be zero) their collective ask offers are capable of creating a sell-wall that drives down the price of Bitcoin.

After the big sell off of both the altcoin – because investors find it virtually worthless for them to hold for the long term – and Bitcoin – because investors know the price is artificially high for the short term due to their market strategy – investors capitalize on the low price of Bitcoin from the massive sell-wall and they buy back the Bitcoin that they previously unloaded. On top of the profit investors make from selling-off all of their altcoin, investors will experience capital gains from selling their Bitcoin at an artificially high price and then purchasing Bitcoin back once the price is lower. During the period where investors buy back Bitcoin, we tend to see the price stabilize for a short period of time.

Boom and bust

Investors may have stockpiled Bitcoin anticipating an equal amount of altcoin and then sold off a significant amount of both Bitcoin and altcoin – in our example Bitcoin Cash – to reap the massive capital gains available to them. I can’t rule out the possibility that several other market factors had an effect on the Bitcoin price surge and subsequent plummet, but that being said, how plausible do you think it is that the whales set off the surge and fall of Bitcoin?

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

Market Volatility, Illiquidity Can Be Quite Profitable for Bitcoin Traders

Market Volatility,
Illiquidity Can Be Quite Profitable
for Bitcoin Traders

Introduction to “spreads”

The cryptocurrency markets are often volatile and suffer from periods of limited liquidity. Combined, they increase the risk profile for Blockchain asset investors. But with increased risk, the potential for reward should increase as well. In this post we explore one method professional traders use to handle volatility and liquidity issues and explore ways to profit from these inefficiencies.

Introducing mean-reversion strategies

Volatility is driven by uncertainty. Some strategies, however, profit from volatility and even illiquidity. At the same time these strategies help mitigate market inefficiencies and should be rewarded for that. Mean-reversion is the assumption that a stock's price will tend to move toward its average price over time. In other words, deviations from the average price could be exploited for profit, based on the knowledge that the price should tend to revert to the mean in time.

A simple implementation of this strategy is to quote both a sell and a buy price, like a market maker. If the market is in fact mean reverting, then the strategy profits from the difference between the buy and sell price. The difference is also called the quoted spread. Mean-reversion strategies trade the market as if the market oscillates around a fair price for an asset. The swings are driven by the uncertainty of other market participants or illiquidity at different market levels. Mean-reversion strategies bridge the gap between buyers and sellers and can expect to generate a profit from that.

This strategy is most effective in markets that are both high in volatility and are mean reverting. Volatility measures the size of the market’s swings. With high volatility, market swings are large and the mean-reversion strategy has a high probability of generating a profit. In markets with low volatility only small spreads are possible and the strategy is less profitable. The best market scenario for mean-reversion is a sideways market with large volatility or market swings. This market scenario is damaging for trend-following strategies but profitable for market making or mean-reversion strategies.

Simple example

The figure below shows an example of a profitable trading day using a mean-reversion strategy. At the beginning of the day, both buy and sell orders are placed in the market. The day develops and volatility drives a random walk of the price. Throughout the day, the strategy buys one Bitcoin at $4377.70. At some point later during the day, you sell this Bitcoin at $4421.48 and generate a profit of 1%. From this profit, fees have to be added or deducted. Some exchanges charge as little as 2.5 basis points for providing liquidity using such passive strategies.

Implementing mean-reversion?

As we have already learned, mean-reversion strategies capitalize on the spread between buy and sell prices. These are usually placed around a mid price. The mid price incorporates all assumptions about the true price. For example, if the market exhibits large trends, these would be considered to adjust the mid price.

In general, buy and sell orders are determined by

Buy/Sell = Mid Price +/- Spread

The spread is determined largely by the market’s volatility and the skew of the its returns. The skew is determined by the probability of up or down moves of the market. Such moves are usually not equally probable and therefore the spread is adjusted. The volatility determines the size of the spread. With a high volatility, buy and sell orders are executed with a higher probability because the market shows larger price swings. On the other hand, if the volatility is small, the buy and sell might not be hit and the strategy keeps a long or short position, i.e. either ends up holding the underlying asset or holding cash and being short the asset.

The recursion is usually initiated with the variance over the first 10 days. λ determines the half-life of the EWMA system. The half-life is the time required for the system to forget half of its former value. With daily data, the half-life is usually set to 10 days and therefore λ set to 0.93. The figure below shows the annualized volatility for Bitcoin prices as estimated by the EWMA model. Bitcoin is fluctuating around an annualized volatility of 116%.

Strategy’s performance

To test the mean-reversion strategy we explored to quote buy and sell prices every day since the inception of Bitcoin through the end of September 2017.. All data is taken from Cryptocompare. Given a 116% average volatility, we chose the quoted spread as 1% between buy and sell prices. If returns would be normally distributed this spread would be hit with a probability of 99.6% over, for example, 10 days.

Of course, Bitcoin returns do not follow a normal distribution. So what is the likelihood that a trader could both buy and sell Bitcoin over the course of 10 days and earn 1% each day? Based on our data, this strategy would have been successful in 2297 out of 2615 days, or 87.84% of the time. For this backtest, we calculated the buy and sell orders on +/- 0.5% of the last closing price and compared this price with the highs and lows over the course of the next 10 days. Of course, this strategy would result in some large long or short positions in Bitcoin. In fact, for 189 of the days, the strategy would have sold Bitcoin, but not bought. And for 129 of the days, the strategy bought Bitcoin, but did not sell it. The main reason for this is the large upward trend in Bitcoin prices.

To account for the trend in Bitcoin prices, we use the moving average return as an estimate and arbitrarily chose the look-back as 60 days, based on a previously published strategy. We also tested other look-back periods which produced similar results, and the look-back of 60 days is in the range of general trend-following strategies.

Adding the moving average to shift the spread increases the number of days the mean-reversion strategies buys Bitcoins and reduces the number of days that it only sells Bitcoins. Therefore the strategy ends up with a long position in Bitcoin rather than a short position. In total, this strategy would have made 1% profit on 2288 days out of 2615. On 327 days, the strategy either only sold Bitcoin or only bought Bitcoin. Adjusting the mid-price for trend resulted in more days that the strategy only bought Bitcoin and therefore accumulated Bitcoin over time. As an additional rule, the strategy could sell the additional Bitcoin at the end of each month or even keep them as a market position.

A trader can improve this strategy by considering the volatility estimate and adjusting the spread. With higher volatility estimates, the strategy would aim to profit from a larger spread and vice versa. Other models use more sophisticated supervised learning algorithms to predict market movements. While some search for trading signals in order books, others use market news as an input to make directional predictions (Li et al., 2014; Kanagal et al., 2017). When trading a mean-reversion strategy, the liquidity of the market has to be considered. Here we did not consider any limitations to the ability to trade at the quoted prices. Obviously, that is not always the case and largely depends on the deployed capital.

Broader market benefits

Trading a mean-reversion strategy also plays a crucial role to establish efficient market mechanisms. While efficiency has already improved dramatically over the recent years, cryptocurrency markets still face fundamental issues that are typical for any new market. Illiquidity, matching inefficiencies and unstable spreads are frequent symptoms that can be observed across all currently available exchanges. Mean-reversion strategies provide additional liquidity to the market and therefore resolve these frictions. They bridge the liquidity gap, for which they get paid.

Market making strategies extend mean-reversion strategies, in that they trade on the spread many times a day with relatively large volumes on both sides of the trade. Market making strategies provide the liquidity that is essential for any well-functioning financial system. Abrupt spikes of demand or supply, like when traders either buy or sell large volumes, are absorbed by market makers. Any successful Bitcoin buy order requires a seller who is willing to take the opposite side and sell the particular volume of coins to the quoted price. The exchange (broker) matches both parties to make the trade happen.

This frequently leads to order delays and varying fulfilment prices, at the cost of traders. By placing orders at each side of the trade, market makers have the capacity to make more trades happen and thereby eliminate fulfillment delays. Bitcoin markets still observe very unstable spreads, which are absorbed by the market makers. By fixing bid and ask prices for other traders, market makers profit from keeping spreads low and stable. The more liquidity they provide, the narrower and more stable the spread becomes.

Conclusion

Mean-reversion strategies are very profitable in high volatility markets and can be adjusted for trends. This strategy can be easily applied to Bitcoin trading and improve the performance of a buy-and-hold strategy. The mean-reversion strategy would post buy and sell quotes around the current market level and earn the spread.

Since the strategy is independent of the market level, it can add an independent performance to a buy-and-hold strategy. As an example, the strategy could use 1% of the portfolio assets and then aim to earn an additional 1% per day on this part of the portfolio. Historically, this strategy would have added 24% per year to the portfolio performance.

Mean-reversion strategies are providing liquidity to the market. On the other hand, these strategies might end up long or short the asset, if the market does not revert to the mean. In that case they are taking a market position. On the other hand, providing liquidity should earn these strategies a potential profit that rewards the trader for his risk. Market making strategies extend mean-reversion strategies by quoting bid-ask spreads more frequently.

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

Here’s What Gold Bugs Miss About Bitcoin’s ‘Intrinsic Value’

Here's What Gold Bugs Miss About Bitcoin's 'Intrinsic Value'

Gold bars are pictured at the German central Bank Bundesbank,

in Frankfurt, Germany (BORIS ROESSLER/AFP/Getty Images).While bitcoin would appear to be a libertarian’s monetary dream at first glance, the reality is that many of the longtime gold bugs have yet to go all the way down the cryptocurrency rabbit hole. For those most part, these gold bugs do not believe in the long-term viability of bitcoin due to its lack of “intrinsic value”.

Peter Schiff is one such gold bug who is a noted critic of bitcoin. I recently dissected some of the arguments he made against bitcoin on The Joe Rogan Experience in another post. Indeed, I also followed this line of thinking when I first found out about bitcoin. One of the first questions I had about this new digital commodity was why it was not backed by a physical commodity such as gold.

However, that was back in 2011. And I eventually learned that the lack of physical backing behind bitcoin is a feature, not a bug. Without physical backing, bitcoin is able to act as the world’s first digital bearer asset, which can be stored and transacted without interference from a third party custodian or government. Like many others who have researched bitcoin thoroughly over the years, my understanding of money and intrinsic value has been flipped on its head by Satoshi Nakamoto’s financial innovation.

Bitcoin’s Intrinsic Value

So how does bitcoin have any value at all? How can you go from zero to one? In the early days, bitcoin was nothing more than a collectible to most people who were looking into the new technology. This is in contrast to the “cryptocurrency” and “digital currency” monikers that would eventually be placed on it. In an early thread on the Bitcointalk.org forum regarding how bitcoin should be defined, Nakamoto stated, “Bitcoins have no dividend or potential future dividend, therefore not like a stock. More like a collectible or commodity.”

This speculative view of bitcoin as a sort of collectible for crypto-anarchists and other like-minded individuals is where bitcoin first attained any value at all. The fact that there was a limited supply of bitcoins meant you had to convince someone else to send you theirs (or put in work as a miner) if you wanted to have any.

The Collectible Use Case Bootstraps More Value

Once bitcoin gained a price in other assets, it could then be used to transmit value over the internet in a censorship-resistant manner. “If it somehow acquired any value at all for whatever reason, then anyone wanting to transfer wealth over a long distance could buy some, transmit it, and have the recipient sell it,” Nakamoto wrote back in 2010.

One Bitcointalk.org user famously traded 10,000 bitcoins for a couple of pizzas, but the best illustration of bitcoin’s use as a censorship-resistant medium of exchange likely came in the form of darknet marketplace Silk Road. The bearer nature of bitcoin made it the perfect option for illicit commerce on the internet.

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

 

‘A Real Bubble’: Billionaire Warren Buffett Doubles Down on Bitcoin Doubt

Billionaire investor Warren Buffett has joined the ranks

of those who believe the market for bitcoin is in bubble territory. According to MarketWatch, Buffett touched on the subject during an annual question-and-answer session held in Omaha earlier this month. While Buffett focused on a range of topics, he honed in on the cryptocurrency market during his remarks. "People get excited from big price movements, and Wall Street accommodates," he was quoted as saying. Describing bitcoin as a "real bubble," according to the publication, Buffett also criticized the idea of applying a value to bitcoin.

He told attendees:

"You can’t value bitcoin because it’s not a value-producing asset."

Buffett's comments came amidst a significant month for bitcoin's price, according to CoinDesk data. After fluctuating around $4,300 at the beginning of October, the price surged to more than $6,100 less than a week ago. That Buffett would take a harsh stance toward bitcoin is perhaps unsurprising, given that, in 2014, he advocated that investors stay away from bitcoin entirely.

"It's a mirage basically," he was quoted as saying at the time. Nor is Buffett the only market observer to issue remarks around the market's recent developments. Earlier this week, Saudi Prince Al-Waleed bin Talal said that he expects bitcoin to fail. Others, however, have adopted a different approach. On Oct. 24, New York University's "Dean of Valuation," Aswath Damodaran, argued that bitcoin is a true currency and not a fraud in a new blog post.

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

With BTCChina Ready to Stop Withdrawals, China Bitcoin Gates are Closing

With BTCChina Ready to Stop Withdrawals, China Bitcoin Gates are Closing

BTCChina, the largest Bitcoin trading platform in China

On Oct. 23, BTCChina, the largest Bitcoin trading platform in China, has updated an announcement that it will shut down the exchange business and stop providing withdrawal services on Oct. 30. For speeding up its shutdown, BTCChina is going to adjust the withdrawal transaction fee to remind and urge users to withdraw as soon as possible.

Until Oct. 25, the platform will remain with the previous withdrawal transaction fee standards:

  • Withdrawal transaction fee for BTC: 0.0015 BTC;
  • Withdrawal transaction fee for LTC: 0.001 LTC;
  • Withdrawal transaction fee for ETH: 0.01 ETH;
  • Withdrawal transaction fee for BCC: 0.0005 BCC.

Start on Oct. 25, new withdrawal transaction fee standards will be activated:

  • Withdrawal transaction fee for BTC: 0.0045 BTC;
  • Withdrawal transaction fee for LTC: 0.003 LTC;
  • Withdrawal transaction fee for ETH: 0.03 ETH;
  • Withdrawal transaction fee for BCC: 0.0015 BCC.

After Oct. 30, the platform is very likely to stop the service of online withdrawals. By announcing the increase in withdrawal transaction fees beforehand, BTCChina wants to check out and return all money on time. With the final date coming, the largest Bitcoin trading platform is to say goodbye to its users and the market. The job of checking on and returning funds is the last step of BTCChina’s shut down. On Sep. 27, the platform stopped accepting CNY and Digital Asset deposits. On Sep. 30, it stopped accepting fiat and cryptocurrencies and shut down all trading functionality on BTCChina Exchange. Besides BTCChina, other Bitcoin Chinese trading platforms like OKCoin and Huobi have also announced that they will close CNY trading market based on the “Seven Regulatory Bodies” Announcement issued before by the regulators.

Hopes

However, though the Chinese government currently bans Bitcoin trading, the government didn't consider it absolutely illegal. Some scholars believe that this means that Chinese government might free Bitcoin trading under certain circumstances in the future. When the regulation system is complete, the Chinese government might reopen the gate for Bitcoin. Additionally, both Huobi and OKCoin stated that they would keep communicating with regulators and try to recover CNY trading market in the future.

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

Hong Kong and Singapore Will Launch Blockchain-Based Project to Link Their Trade Finance Platforms

Hong Kong and Singapore Will Launch Blockchain-Based Project to Link Their Trade Finance Platforms

 Hong Kong and Singapore announced that they are going to cooperate

on a cross-border trade project based on Blockchain technology by linking their trade finance platforms. The announcement from Hong Kong Monetary Authority reads: “The Hong Kong Monetary Authority (HKMA) and the Monetary Authority of Singapore (MAS) signed and exchanged a Co-operation Agreement (“Agreement”) in Hong Kong today (25 Oct. 2017) to strengthen co-operation on fintech, with a view to bolster ties between the two cities and fostering fintech development within the region.” Last year, HKMA with banks including HSBC and Standard Chartered worked on building a trade finance platform by using Blockchain technology to digitize and share trade documents, automate processes and reduce the risk of fraud.

At the same time, Singapore planned to build a similar platform as well. The cooperation between Hong Kong and Singapore on this project will “enhance the trade finance corridor between the two financial centers,” according to Ravi Menon, managing director of MAS. What’s more, the platform could significantly increase the efficiency of trade finance in the future. It will replace humans to do time-consuming paperwork. HKMA and MAS stated that linking the two platforms is just a part of a broader plan between their future collaboration on the Blockchain and other fintech projects. Details about the cooperation will be announced by the two authorities next month.

Threat of Blockchain and Cryptocurrencies Distant But Inevitable, Says Moody’s

Threat of Blockchain and Cryptocurrencies Distant But Inevitable, Says Moody's

Moody’s Investors Service analyst Stephen Sohn and his team have reassured the US payments sector that the threat of Blockchain technology and digital currencies is still distant, but businesses will eventually adopt the technology. The team claimed that Blockchain is a disruptive technology and may compete against the payments sector in the long-term. In their report “Consumer Digital Payments – US,” Sohn and his team also highlighted several “tech-enabled entrants” that are revolutionizing the electronic payments market in the US.

Part of the report reads:

“Providers that are considering adopting Blockchain technology, which was originally created as a platform for the Bitcoin ‘cryptocurrency,’ may pose another potential threat to all of the current payment constituents. Blockchain is a chain of blocks of encrypted information that form a database or ‘ledger,’ which may eventually lessen the need for the intermediary platforms that currently approve, clear, and settle payments.”

Blockchain benefits financial services industry

Meanwhile, Moody’s associate managing director, Sean Jones and his team also released a separate report in April claiming that Blockchain has several possible applications and benefits beyond the leading digital currency Bitcoin. They said that the technology can revolutionize the clearing and settlement sector and it can also “promote transaction transparency, improve data security, and lessen the risk of a single point of failure.”

However, Jones and his team cited several obstacles that should be resolved before the economics of investments in the technology can be realized. Among these hurdles are the technical issues related to interoperability and scalability, as well as disagreements on industry standards and terms of collaboration. The report also highlighted the generally supportive stance shown by financial services regulators on Blockchain, but cited the lack of definitive view on how the technology will eventually be treated.

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

SPECTRE Creators Seek VC Backing for Blockchain-Free Cryptocurrency

A veteran researcher behind two influential papers in the emerging field

of crypto-economics is gearing up to launch a new cryptocurrency. Revealed in an exclusive interview with CoinDesk, Yonatan Sompolinsky, author of the GHOST protocol and co-author of the SPECTRE protocol, intends to release the as-yet unnamed project in late 2018. Based on his body of work, the project aims to solve one of the industry's biggest challenges: the speed at which transactions are disseminated and recorded by distributed ledger systems.

Founders of the project include SPECTRE co-author Yoad Lewenberg, and researcher Ethan Hileman, who worked with the team behind bitcoin privacy project TumbleBit. However, the team is not only equipped with developers, but also business experts – including Guy Corem, the former CEO of Israeli-based bitcoin mining firm Spondoolies-Tech, which raised more than $12 million in venture funding before shuttering operations.

Together, the team has founded a new startup called DAGlabs, which is said to be raising $15 million as part of a Series A round. Yet, it's the vision for the project that is perhaps most notable, given how it intends to achieve its goal. Rather than using a blockchain system, the public cryptocurrency will be among the first to operate via a system called a direct acyclic graph (DAG) – technology that Sompolinsky framed as a way to finally create a viable payments rail with distributed ledger concepts.

Sompolinsky told CoinDesk:

"We want to change blockchain into blockDAG. Whether you buy coins or not, you should think about this technology as the next step, releasing the blockchain from the naivety of the chain structure. You will feel this is the natural step towards using a real system."

For all the innovation, however, also notable is what the new cryptocurrency will share with bitcoin, today the largest and most valuable blockchain system, but one that is seen as increasingly less relevant for payments. According to the DAGlabs team, the new cryptocurrency will use a proof-of-work mining algorithm in which anyone who purchases hardware can compete for its rewards. That said, Sompolinsky doesn't see bitcoin and other proof-of-work-based cryptocurrencies as competitors, so to speak. "I'm not competing with this entire plethora of new blockchains. We have a very boutique and niche and specific one and a well-defined one. We want to scale up layer one," he said.

Record of science

As told by Sompolinsky, the project is also a critique on the current state of blockchain development, which he views as having been held back by in-fighting. In particular, he cited his experience with arguments about capacity levels on bitcoin, in which developers have often tried to push solutions to scalability in a way that did not change or update the first layer of the system – the blockchain itself. Referring to last year's Satoshi Roundtable summit, an invite-only event in Cancun, Mexico, he recalled an experience where he was shocked by the state of the conversation.

"Cancun was an eye-opener for me. In Cancun, everyone was fighting about 1 MB to 2 MB … no one was talking about increasing on-chain scalability," he said. Sompolinsky framed the new cryptocurrency as a "vehicle" to enable researchers to take the next step in evaluating this line of exploration, one he argued will benefit from being tested under open market conditions. But given the slate of open-source projects utilizing the initial coin offering (ICO) model as a way to solicit market funding, often for untested concepts, he was also keen to differentiate his project as one based on years of accumulated research.

"There are not 800 projects that implement a concept like DAG. Very, very few, maybe less than five that I know of, try to scale up the layer one. There are not 800 projects that say we should abandon the concept of the chain in favor of a graph of blocks," he said. Among those that do are IOTA and bytecoin, the former being one of the few cryptocurrencies yet to garner a total market capitalization of more than $1 billion.

When complete, the final network should appeal to anyone who wants to use a cryptocurrency with "very fast confirmation and low fees," although that's not to say the concept has been perfected. According to Sompolinsky, there are still plenty of items up for debate. For example, he is still open-minded about how he will structure any issuance, stating he is most strongly considering the model used by Zcash Company – the creators of the zcash protocol – wherein accredited investors are given tokens in stages for their support.

How it works

Still, even those experienced in the field of cryptocurrency may find the concept odd. After all, after the hype around cryptocurrency faded, the so-called "underlying blockchain technology" was often touted as the real secret sauce. That notable researchers would stake a counter-thesis then, is of interest, though it's arguably been a development that has simply received less attention over the years.

Explored by Sompolinsky since his earliest work, the idea is that the process of ordering transactions into blocks, then selecting one to add to the chain, could be better optimized. In the SPECTRE concept, blocks are created at the rate of about 10 per second (as opposed to, say, ethereum where one block is created every 12 seconds). All of these blocks are referenced in a DAG, and multiple, interwoven threads of blocks are created. Then, the most valid transaction history is "voted" in by miners selecting the most inter-referential block graph.

And because this allows for such a high quantity of transactions to be performed on the network, the transaction history won't be permanently stored. Instead, transaction history will only be stored for a limited amount of time, and once it has been validated, will be removed. Other barriers, including backbone congestions and bandwidth, could lie ahead, though. The team intends to address these potential issues by building incentives into the protocol that encourage participating agents to behave correctly.

Still, if the concept on the whole sounds familiar, you've likely come across it when reading about ethereum, which incorporated some of these ideas in how it rewards so-called "uncle blocks" – those that are not selected for inclusion in the ethereum blockchain, but still include useful work. Although uncles aren't considered ultimately valid, they're still profitable to mine, and still get referenced in the blockchain ledger itself.

Indeed, what might be most notable about the SPECTRE project is that Sompolinsky's ideas have often proved to be of influence. For example, Casper, ethereum's hotly debated proof-of-stake protocol, derives its name from the GHOST protocol (a play on the "Casper the Friendly Ghost" cartoon series).

What's left

While the bones of the project are in place, there's still a few questions that need to be fleshed out before the cryptocurrency can be taken to market. Currently under development, the final protocol will be introduced in an upcoming white paper called SPECTRE2. The tech will then begin testing in autumn next year, and by winter, the new cryptocurrency will be launched. Ongoing updates will then continue apace.

For one, DAGlabs has been working on combining the SPECTRE cryptocurrency with MimbleWimble, the natively private cryptocurrency that has been the cause of much excitement in the community. Further down the line, the platform also wants to allow DAG-based smart contracts to be written into the platform.

But the final step that DAGlabs is pivoting towards is perhaps as ambitious as the cryptocurrency itself. Once the team has established a functioning cryptocurrency, they intend to allow the DAG infrastructure to facilitate something along the lines of "merged mining," which is when the underlying hardware can be used to support a number of cryptocurrencies simultaneously. Still, it's the manner in which Sompolinsky will launch the project that he ultimately wants to call attention to – calling the years of research and engagement with the open-source community, a "respectable" path to market.

He concluded:

"The easy path for me was to do an ICO; way easier than what I'm doing now. I'm going for the more respectable path of an equity."

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614