Bitcoin fans hold on for a very wild ride

Bitcoin fans hold on for a very wild ride

Bitcoin has been a wild ride for those brave enough to invest.

Ankit Patil bought his first Bitcoin for $200 two years ago out of curiosity. When the cryptocurrency's value reached $800, Patil sold it to buy the motherboard, graphics card, hard drive, and other equipment necessary to mine Ethereum, another digital coin. His setup now whirs away in a corner of his apartment in The Acre.

A hedge fund associate by trade with a master's degree in corporate finance, Patil was drawn to the economics of the Bitcoin market and has spent the last two years learning about the various cryptocurrencies that have captivated tech enthusiasts, libertarians, regulators and hobbyists alike. Public interest has surged in recent weels as bitcoin reached a record valuation of $19,662 on Dec.A man uses a Bitcoin ATM in Hong Kong on Dec. 8. Below, mock Bitcoin chips are displayed at a Bitcoin trading store in Hong Kong on Dec. 21. Virtual currencies are not tied to a bank or government and allow users to spend money anonymously. They are basically lines of computer code that are digitally signed each time they are traded.

Public interest has surged

in recent weels as bitcoin reached a record valuation of $19,662 on Dec.17 then dropped to $12,617 just five days later. At the start of the year, one Bitcoin was worth just under $1,000.Depending on who you ask, cryptocurrencies are the future of money, a bubble that's about to burst, or both. "People should learn how it works because It touches on so many subjects — government, inflation, the economy," Patil said, predicting that cryptocurrencies will soon be as ubiquitous as social media platforms like Snapchat and Facebook.

To that end, he founded a Bitcoin discussion group in Lowell, which met for the first time on Dec. 23. Its members come from a variety of backgrounds and are drawn to cryptocurrencies for different reasons. For Patil, it was the economics and the opportunity to make some money on the side. Michael Connell, the owner of a video production company from Quincy, is in it purely to see an increase on investment, although he's far from betting his retirement on the technology.

"Call it a bubble, call it a scam, call it whatever, but in my lifetime I've had the stock market crash on me twice," Connell said. "I lost 30 percent on my mutual funds the first time and 60 percent the second time and I haven't heard anybody complaining about the scam we call mutual funds.A chart shows Bitcoin is closing value from Dec. 1 to Dec. 29. Bitcoin reached a record valuation of $19,662 on Dec. 17 then dropped to $12,617 just five days later.

His original investment of $1,000 has grown into $15,000. George Gaines, of Boxboro, has also seen a substantial return on investment but his interest lies more in Bitcoin's underlying technology. Blockchain is a digital technology that acts as a public ledger of transactions. In the case of Bitcoin, whenever two users make a transaction, or block, computerized "mining" systems distributed throughout the network confirm its accuracy by solving complicated mathematical problems based on the same algorithm. The block is then added to the end of the chain, which is recorded across the network.

Occasionally, and increasingly rarely,

one of those miners will solve a problem that creates a new block out of thin air, and a bitcoin is born. There is a finite number of bitcoins — 21 million — that can be mined. Blockchain has many potential applications, attracting even those investors who dismiss cryptocurrencies. The stock of Long Island Iced Tea Co., for example, rose 289 percent last week after the beverage company changed its name to Long Blockchain and announced it would begin partnering with companies using the technology.

Gaines, a serial entrepreneur who is currently working on ways to use artificial intelligence in health care settings, said he thinks blockchain could solve one of the Internet's biggest problems: verifying the accuracy of information. Investing in cryptocurrencies may help it realize that potential. "That helps the technology," he said."It's kind of amusing because the excitement and the greed fuels more interest, which fuels more technology, which solves some of the underlying problems."Ask a cryptocurrency enthusiast what he or she thinks about Bitcoin or blockchain and the conversation can go in a hundred different directions.

There are investment strategies to discuss, security precautions to share, and philosophies to expound on. The community aspect is important. One of the main criticisms of cryptocurrencies — although it's also an attraction for many users — is that they are decentralized. There is no Securities and Exchange Commission overseeing Bitcoin or a Federal Deposit Insurance Corporation to insure against loss if, for example, someone hacks a company that creates the digital wallets in which bitcoins are stored and steals thousands of customer passwords.

The future of cryptocurrencies is therefore heavily dependent on the technologies and communities that grow around them. Patil and other members of the new Lowell Bitcoin group hope their collaboration will make them safer, individually, and more valuable, collectively. "There's so much happening in this field, you need someone to talk to," Patil said. "When you get in, you have to be educated."

Chuck Reynolds


Marketing Dept
Contributor

Please click either Link to learn more about Bitcoin.
Interested or have Questions, Call Me, 559-474-4614

Where Are All the Quick Wins for Blockchain?

Where Are All the Quick Wins for Blockchain?

In 2017, much of the focus was on vision setting,

long-term projects and the sizzle of cryptocurrencies. We also got CryptoKitties, a star of 2017 blockchain usage that is cute and fun, but of limited benefit. As someone who joined the community because of the technology and social impact, the vision is compelling, but nowhere near sufficient to sustain this ecosystem until 2022-2024, the time when most predictions of meaningful production applications are settling. The question for 2018, then, is more tangible: How do we get real cost savings? Improve the customer experience?  Increase revenue? Decrease risk? Arrive at stakeholder benefits more quickly?

Bite-sized success

First off, we need to make the entire blockchain ecosystem more actionable, more real, even better – simpler! Maybe because this is a technology-led community, most blockchain discussions get more complicated rather than simpler. With simpler, quick-win, use cases, there is an opportunity to move organizations from research and into action.

You might think, there are already plenty of use case lists, just get going! True, there are plenty of lists, but they lack actionability. They are too high level – it'd be almost the same as telling a salesperson to "just go sell something" without the context, the training, the experience and the technology underpinnings for them to be successful. My company is helping to change the process by thinking this way: "What benefit can we bring using existing blockchain technology in 3-6 months?" Though we certainly don't have these simpler, quick-win use cases nailed down yet, we have identified four patterns where we believe there can be

2018 value:

  • Decrease digital storage costs while learning blockchain
  • Improve trust and usability of recorded data
  • Next generation business process management and integration
  • Speed up and reduce costs of payments.

The goal of this list is to combine the fundamental values of blockchain, existing technology and real organizational needs. The first pattern on the list is a perfect example. Hardly anyone would say that storage is visionary and while it’s cheap, the continual expansion of data, necessitates better solutions. With Sia, Storj, and others, you can reduce your costs over AWS – a practical benefit from a blockchain. Another quick win example is a private equity administration blockchain developed by Northern Trust. In its solution, the company looked at how to leverage the trusted data resulting from using blockchain. Their blockchain leverage turned into reduced costs and duration of transactions along with increased transparency for audit and compliance.

Giving up control

In addition to simplifying the use cases, we need to address the proverbial elephant in the room: everybody wants the benefits of a blockchain but is hesitant to dive in because of competitive and control concerns. These are valid concerns, and we've already seen these issues manifested in the bitcoin community. Since we won't eliminate the concerns directly with blockchain, a better way to speed adoption is to create a set of patterns to follow.

For example, take a look at a simple hierarchy of business network models:

  • Public data + Own Organization + consumer
  • Vertical value chain with dominant origin or end point
  • Complementary Proprietary Data/Contracts/SLAs + Own Org + consumer
  • Complementary Proprietary Data/Contracts/SLAs + Own Org + Proprietary Data/Contracts
  • Competitors via alliances, consortiums and direct relationships

The model at the top is the easiest way to get started since it has the fewest direct participants while the one at the bottom is the most difficult because these are your numerous, direct competitors. Not surprisingly, each of these models has examples. Public data is the key to the first model, whether it’s flight departure times or from a governmental entity. The second has many examples (Tencent, Daimler, Cargill, Bloomberg…) where a dominant organization can drive or forestall change within a business network.

The third and fourth are about disruption – both avoiding it, and creating new combinations to improve a customer’s experience. And finally, there is the straightforward combination of direct competitors working to create some sort of new standards. Like a lot in blockchain these days, these patterns and models are only the beginning. Feel free to use them as a guide to prioritize your thinking, minimize blockchain readiness objections and get to the nuts and bolts of creating a real blockchain project. Meanwhile, we’re working on enhancing these patterns with specific scenarios to make them even more actionable. We can see a better world using blockchain. Let's get there faster by focusing on creating simpler, more practical, use cases. We may even get to the world-changing visions more quickly.

Chuck Reynolds


Marketing Dept
Contributor

Please click either Link to learn more about Bitcoin.
Interested or have Questions, Call Me, 559-474-4614

Which Privacy Cryptocurrency is the Most Undervalued Right Now?

Which Privacy Cryptocurrency is the Most Undervalued Right Now?

CLOAK is one of the few strongly privacy driven cryptocurrencies out there.

And privacy is the last human right we have forgotten to fight for. CLOAK is also incredible, because it rewards every single coin holder that wishes to participate in maintaining the CLOAK transaction system called ENIGMA – something none of the top cryptocurrencies do for their users.

Before the following description of CLOAK, in advance big news has to be announced. The source of ENIGMA will be open-source on 31st of December 2017. So everybody will be able to review the source code based on over three years hard work. Hard work pays off and hence CLOAK ticks all the boxes, when evaluating the long term sustainability of a cryptocurrency:

  • Tight and active community
  • Strong developer team
  • Purpose of the project
  • How well designed the project is

At the time of writing, CLOAK is performing very well in coinmarketcap. When looking at the momentum it has gained since the start of December – the price has tripled this month. It’s especially impressive how well CLOAK is trading against Bitcoin, something that few altcoins can say after Bitcoin’s dramatic December surge of over 7000$. And there are good reasons for that. Let’s compare CLOAK to other big cryptos on the scene right now.

CLOAK has a low circulating supply compared to others

Let’s imagine that CLOAK is as popular as Bitcoin and attracts the same investment. CLOAK’s hard cap of 5+ million means every single CLOAK would be worth 3 times more than Bitcoin, which has a circulating supply of 16.5 million.

2018 is predicted to be the year of Altcoins. In 2017, Bitcoin has already given a large chunk of its hegemony in the total cryptocurrency market cap away. CLOAK should do well to seize a sizeable portion of this, once it’s noticed.

CLOAK uses PoS instead of PoW

The cryptocurrencies dominating the top of coinmarketcap all use the Proof of Work algorithm. But investment that goes into sustaining PoW coins devalues over time, because PoW coins require expensive hardware and a lot of computational power. As such, control of PoW networks also tends to centralise into the hands of a few. CLOAK uses Proof of Stake, where consensus in CLOAK can be reached based solely on the amount of coins in staked wallets.

CLOAK is environmentally sustainable compared to others

PoS integrates the security and running of the blockchain into the coins instead of separate mining equipment. It therefore saves not just on hardware, but also electricity, making it much more environmentally friendly.

CLOAK rewards all its coin holders

To motivate coin holders to stake their coins into the service of the blockchain, CLOAK uses PoS without Master Nodes. As a result, CLOAK is able to reward all of its coin holders with 6% on their holdings per year. Which investment yields a 6% return annually? None! There are even more gains, if your wallet secures Enigma transactions. The 1.8% charge taken from using Enigma’s extra layer of anonymity is divided among all participating nodes (wallets).

CLOAK offers true decentralization and anonymity to its users

Increased regulation is inevitable as cryptocurrency adoption becomes more widespread. Many are concerned regulation could stifle the libertarian aspects of cryptocurrency. Anonymity for its users has never been a priority for Bitcoin in its quest for ubiquity. But CLOAK is a cryptocurrency designed to facilitate private, secure and untraceable transfers by using Enigma, a secure and decentralized, off-blockchain mixing service. By using PoS without Master Nodes, CLOAK also achieves a wide spread of power across the blockchain, bringing true decentralization to its users.

To conclude, ask yourself this: are the cryptos popular now the Googles of cryptocurrencies? Or are they the Netscapes? If they’re the Netscapes, where is the Google of cryptos sitting right now? CLOAK has been around since 2014, having 3 unrushed years to build up a solid and well-designed project. And in this time, the project has evolved, taking in lessons and keeping up with developments trending in cryptocurrencies. No wonder CLOAK is coming off so well and everybody is awaiting eagerly the open-source of ENIGMA on 31st of December 2017.

Chuck Reynolds


Marketing Dept
Contributor

Please click either Link to learn more about Bitcoin.
Interested or have Questions, Call Me, 559-474-4614

2017: A Defining Year for Cryptocurrency Regulation

2017:

A Defining Year for Cryptocurrency Regulation

In a year of soaring cryptocurrency prices and countless initial coin offerings,

it's perhaps unsurprising that, over the course of 2017, regulators worldwide stepped in to define how they would oversee what had been to date a legally murky environment. From China's crackdown on exchanges to the SEC's report on The DAO, 2017 was perhaps one of the most significant years to date on the regulatory front. Indeed, the year saw regulators from many of the world's leading economies issue investor alerts and cautionary statements about financial use cases for the tech. The past two months especially have seen growing activity on the ICO funding model, as seen by bans in major Asian countries to enforcement actions in North America. In this article, we look at some of the big policy shifts from the past 12 months – many of which may have set the stage for further industry-defining developments in the year ahead.

The People's Bank vs bitcoin

It was the first week of 2017 and China's "Big Three" bitcoin exchanges – OKCoin, Huobi and BTCC – were being warned by the country's central bank. That warning about staying compliant with "relevant laws and regulations" was followed in February by a freeze on withdrawals and the creation of new trading fees – both of which were measures imposed by the People's Bank of China in a stated effort to curb the risk of money laundering. And after months of waiting, exchanges ultimately returned access to funds to users in late May.

Officials in the world's most populous nation ultimately ordered those cryptocurrency exchanges to cease trading and shut down in mid-September, which combined with BTCC's closure effectively ended the "Big Three" ecosystem and pushed trading activities within China to over-the-counter markets. News of the pending shutdowns came just days after the country stopped ICOs within its borders, saying the campaigns operated by "illegally selling and distributing tokens." Where 2018 will head remains to be seen, though commentators on state-owned television in China have said in recent months that OTC cryptocurrency trading may be deemed against the law as well.

The DAO report

Rumors had circulated for months that the SEC would move to define how it would regulate ICOs. Yet the agency played its cards close until late July, when it declared that U.S. securities laws could be applied to some token sales depending on the nature of the token itself and the manner in which it was offered.

The funding model, through which the sale and distribution of cryptographic tokens would be used to kickstart work on a new blockchain network, was at the heart of The DAO, the now-defunct funding vehicle that raised millions of dollars in ethers in 2016 through the sale of DAO tokens. It collapsed later that summer following a debilitating exploit, sparking months of infighting, recovery efforts and, ultimately, a split in the ethereum blockchain. According to a report published by the SEC in July, the DAO tokens were securities under U.S. law, though the agency said that it had declined to pursue any enforcement action related to the sale.

The SEC wrote at the time:

"…the Commission deems it appropriate and in the public interest to issue this Report in order to stress that the U.S. federal securities law may apply to various activities, including distributed ledger technology, depending on the particular facts and circumstances, without regard to the form of the organization or technology used to effectuate a particular offer or sale."

The agency's statements are significant because they sparked a host of similar warnings and publications from other regulators around the world. The SEC itself would go on to warn about celebrity endorsed ICOs and public-stock scams that use the funding model as a way to entice investors. The agency has also pursued civil lawsuits against ICO organizers since July through a newly-created unit focused on digital investigations.

Putin's edicts

CoinDesk readers are likely familiar with the long-running saga of cryptocurrency regulation in Russia.

And while recent statements from senior lawmakers suggest that Russia's State Duma may finally approve rules governing the trade and issuance of cryptocurrencies, statements from earlier this year from president Vladimir Putin are arguably more impactful for the tech's future in the country. In late October, the Kremlin published five orders from Putin focused on various uses for the tech. He ordered new registration requirements for cryptocurrency miners, the application of securities laws to the initial coin offering (ICO) funding model and research into how the tech could be used as part of a digital payments ecosystem in the Eurasian Economic Union.

Echoing moves by other countries in the past year, Putin also ordered the creation of a regulatory "sandbox" for companies that use technologies like blockchain to develop new products and services. While the orders undoubtedly nudged forward the work on legislation around cryptocurrencies, Putin's edicts have arguably advanced efforts to integrate the tech into the Russian state government infrastructure. They also came months after the Russian leader briefly met with ethereum creator Vitalik Buterin. Other leaders in Russia have pushed the idea of using blockchain for public-sector purposes as well. Prime minister Dmitry Medvedev, for example, ordered government officials to begin researching uses of blockchain last spring.

Chuck Reynolds


Marketing Dept
Contributor

Please click either Link to learn more about Bitcoin.
Interested or have Questions, Call Me, 559-474-4614

Bitcoin Looking Over Its Shoulder as Cryptocurrency Competition Heats Up

Bitcoin Looking Over Its Shoulder as Cryptocurrency Competition Heats Up

What Could Go Wrong for Bitcoin in 2018?

A host of cryptocurrencies are vying with the more-established Bitcoin for the interest of investors looking for risk and the potential make a quick buck.While Bitcoin has a cryptocurrency market share of more than 50%, competition is hotting up as investors are looking at smaller, cheaper cryptocurrencies for which there is more scope to rise in value.Bitcoin, the most established cryptocurrency, was worth $13,300 and had a market capitalization of $224 billion on Sunday, according to Coinmarketcap.The next largest cryptocurrency by market cap is Ripple, which was worth $91.7 billion on Sunday, followed by Ethereum, worth $70.9 billion. However, one Ripple is currently priced between $2 and $3, extremely cheap when compared to competitors such as Litecoin ($220) or Ethereum ($732).

According to ValueWalk.com, a site for investors, smaller cryptocurrencies could be a worth a punt as the price of Bitcoin remains high."Go a few rungs lower and market cap plummets; by the 200th rung you get Faircoin, at a mere $57 million market cap and $1.09 apiece earlier today. Move on down to #1,065 and you get Nodecoin, with a total market cap of less than $8,000, a price of less than a nickel per coin—and a 19% gain in just the past hour!" ValueWalk advised on Saturday. The cryptocurrency with the fourth largest market cap is Bitcoin Cash, which was created as a result of a so-called "fork" in August when some Bitcoin developers branched off to create a new, allegedly superior payment network — with the same transaction history. 

Bitcoin

The fork resulted in Bitcoin owners owning an equivalent amount of Bitcoin cash. However, things are less straightforward for traders or investors with Bitcoin held by third parties such as Coindesk. While Coindesk decided to include Bitcoin Cash in its list of assets which can be traded on the platform, others are less accommodating of the newcomer. On Thursday, BitMEX, a Seychelles Islands-based cryptocurrency trading platform, announced it had sold all of the Bitcoin Cash cryptocurrency held by its users, and credited them with an equivalent value of Bitcoin instead.

Chuck Reynolds


Marketing Dept
Contributor

Please click either Link to learn more about Bitcoin.
Interested or have Questions, Call Me, 559-474-4614

 

Bitcoin Boasting Strong Recovery After Post-Dip Volatility

Bitcoin Boasting Strong Recovery After Post-Dip Volatility

This morning Bitcoin (BTC) surged to a peak of $16,930

and the total cryptocurrency market cap hit a high of 603 bln, after a steady past couple of days of growth. The market recovery comes in the wake of a major dip at the end of last week that was followed by several days of volatility. Just last Friday Dec. 22, in the midst of pre-holiday bustle, the cryptocurrency market was awash in red. Altcoins lost up to 40 percent, and Bitcoin was close behind, suffering a 30 percent drop and reaching as low as $11,833 a coin. In a single day, the total cryptocurrency market cap decreased by more than $200 bln.

Just days before on Dec. 17, Bitcoin reached a record high of $20,078 and leading up to the crash Bitcoin price had been hovering between $16-17,000. What followed was several days of volatility. Just 24 hours after the frightening dip, the market saw a notable bounce back. The recovery, however, was not stable and was quickly followed by another dip leading into Christmas day.  Since then, however, Bitcoin has been gaining steadily and has fully recovered its pre-dip heights, trading at an average of just over $16,000 at press time.

Total market cap, which also spiked and then dipped again over the weekend, has been steadily growing since Monday. At press time total market cap also showed an almost full recovery, at $603 bln. Many Bitcoin investors saw Friday’s dip as the perfect chance to buy up more of the leading cryptocurrency at a “discounted” price. Others pointed out that the overall market correction around the New Year is nothing new, and noted that corrections like the one on Friday are actually just what the market need

Chuck Reynolds


Marketing Dept
Contributor

Please click either Link to learn more about Bitcoin.
Interested or have Questions, Call Me, 559-474-4614

Hard Fork, Take Two: SegWit2x Will Return Dec. 28, Says Founder

Hard Fork, Take Two:
SegWit2x Will Return Dec. 28, Says Founder

The controversial SegWit2x Bitcoin (BTC) hard fork

go ahead on Dec. 28, according to the project’s official website.The SegWit2x project, which caused months of debate and infighting among the Bitcoin community prior to its last-minute cancellation in November, now says it will fork off at block 501451, due in around two days’ time. The project’s Founder and Lead Developer, Jaap Terlouw, stated on their site that the fork aims to address issues of “commission and transaction speed within the Bitcoin network,” adding that currently, Bitcoin is “almost impossible to use as a means of payment.” Confirmation that the hard fork will, in fact, take place is indicated both in the roadmap on the project’s site, as well as in a direct quote from

Terlouw:

“Our team will carry out the Bitcoin hard fork, which was planned for mid-November.”

The founder also promised that in addition to the common practice of crediting BTC holders with equivalent balances of the new coin (B2X), they would also receive “a proportional number of Satoshi Nakamoto’s Bitcoins as a reward for their commitment to progress.” In total, eight exchanges are listed as official supporters of the fork. The project’s roadmap includes features such as Lightning Network support, smart contracts and, ultimately, anonymous transactions.

Forking season

In the past six weeks, Bitcoin Cash, another Bitcoin hard fork formed in August, has become the central talking point of the industry, as it sees remarkable growth and sparks shifts in mining and investment behavior, affecting Bitcoin’s price.The latest incarnation of SegWit2x has so far received comparatively little publicity. However, the website copy conspicuously name-dropped one particular exchange, HitBTC. Speaking about existing SegWit2x futures, Terlouw is quoted on the site as

saying:

“At the same time, trading of its [SegWit2x] futures has been carried out on some exchanges for a long time. HitBTC is among them.”

When the project first saw hints of a comeback on Dec. 19, futures prices of B2X coins saw an uptick from under $200 to almost $600, a trend which has remained steady prior to the launch. Meanwhile, on Christmas Day, a Blockchain Angel Investor debuted his own ‘version’ of Bitcoin, Bitcoin God (GOD), while several other forks are due to join the ecosystem in the coming weeks. For BTC investors, a key appeal of new Bitcoin ‘versions’ or hard forks  is the duplication of their BTC holdings in the new coin at the time of each snapshot, which essentially provides them with a supply of “free money.”

Chuck Reynolds

Marketing Dept
Contributor

Please click either Link to learn more about Bitcoin.
Interested or have Questions, Call Me, 559-474-4614

What is bitcoin, what is blockchain?

What is bitcoin, what is blockchain?

The final months of 2017 brought all-out bitcoin mania.

The value of the digital asset soared near $20,000, then settled back down below $15,000, and is up nearly 1,500% this year; Coinbase, the bitcoin brokerage, surpassed 13 million users and briefly became the No. 1 smartphone app on the iOS App Store; and mainstream financial exchanges like CME, Cboe, and Nasdaq are all rushing into bitcoin futures trading. So you might be feeling left behind if you’re still wondering: What exactly is bitcoin? But you’re hardly alone: even amidst the frenzy, cryptocurrencies are in their infancy, and many, many people hearing about bitcoin still don’t fully understand what it is, what it’s used for, whether they should buy it, and how to buy it.

Here are some answers.

What is bitcoin?

Put in the simplest terms: bitcoin is a digital asset that runs on a public ledger. Bitcoins can be bought, sold, or traded, like a commodity, or used as payment for hard goods, like a currency. Put in the proper technical terms: Bitcoin is open-source software for a decentralized, peer-to-peer payment system. Most people call bitcoin a digital currency or cryptocurrency, but these days, at the end of 2017, no one is really using bitcoin to buy things. Instead, people are rushing into bitcoin to buy and hold it as a speculative investment. For that reason, a more apt term for bitcoin right now is “digital asset” or “digital token.” (See the above video.) If you want to buy bitcoins, you can use an exchange like Coinbase, Kraken, Bitfinex, or Bitstamp, to name just a few. Bitcoin was created in 2009 by someone (or someones) using the pseudonym Satoshi Nakamoto. It still isn’t known who that was, or how many bitcoins that person or group still holds.

What is blockchain?

Bitcoin, the token, runs on the bitcoin blockchain, an immutable digital ledger. Every single transaction done in bitcoin is recorded, permanently, on the bitcoin blockchain. Think of the bitcoin blockchain as akin to the borrowing card inserted in the front of a library book, with all the borrowers listed. The transaction data is recorded on the blockchain in bundles, called “blocks,” by “miners” who use expensive machines to mine, or upload, the blocks. The machines mine by solving complicated computations in real time (and they generate a lot of heat in the process). Miners are rewarded with a tiny amount of bitcoin every time they do so. That’s how new bitcoin gets created—the bitcoin supply is capped at 21 million coins, and 16.7 million coin have been mined so far. Blockchain technology originated with bitcoin, so if you hear people talk about “the blockchain,” they likely mean the first one, the bitcoin blockchain.

But banking giants and other financial institutions have become interested in blockchain technology, without bitcoin or any cryptocurrency. JPMorgan Chase CEO Jamie Dimon, to name just one example of many, has called bitcoin a “fraud worse than tulip bulbs,” but has praised the potential of blockchain. The “blockchain without bitcoin” rallying cry was hot on Wall Street in 2016 and for much of 2017, but near the end of the year, bitcoin and other digital tokens like ether, litecoin, and bitcoin cash started flying as investment poured in, and the excitement shifted back toward bitcoin itself, rather than blockchain.

Chuck Reynolds

Marketing Dept
Contributor

Please click either Link to learn more about Bitcoin.
Interested or have Questions, Call Me, 559-474-4614

Bitcoin or Blockchain? Bet That Both Will Thrive

Bitcoin or Blockchain?
Bet That Both Will Thrive

Bitcoin and blockchain are often pitted against each other,

but I come from both worlds and believe that both are game-changers in their own right. I first learned about bitcoin in 2012 through liberty-oriented channels, which I’d discovered during a search for answers about the financial crisis in 2008. But I also took a deep dive into enterprise blockchain in 2014 while at Morgan Stanley, as a side interest to my day job of running its pension solutions business. In August 2016, I joined Symbiont full-time.

When I look ahead, I see 2018 as a year of maturity for both the bitcoin and enterprise blockchain parts of the space. Bitcoin will yet again prove its anti-fragility, more corporates will embrace it for payments, and the community will successfully resist its financialization. Enterprise blockchain will gain wider acceptance in production applications.

Bitcoin goes corporate

Bitcoin will increasingly be used for B2B foreign-exchange payments

by multinational companies in 2018, as bid-offer spreads continue to tighten, daily liquidity consistently exceeds $5 billion and corporate new entrants gain comfort with liquidity providers (which enable corporates to use bitcoin for “cross-currency” transactions without touching the bitcoin itself–in other words, as an intermediary currency for foreign exchange in illiquid currencies). Corporate bitcoin use will remain predominantly for payments in markets where banking systems are not well-developed. A tell-tale sign that corporate demand is sustainable would be this: when foreign exchange (FX) trading desks start making markets in bitcoin non-deliverable forwards (NDFs).

When that starts – possibly within the next 2 years – Jamie Dimon will admit his mistake and encourage corporate clients to route payments through JPMorgan’s foreign exchange desk, which will become one of the most active market-makers for cross-currency FX involving bitcoin.

Cryptocurrencies will continue to attract users as more folks learn about distortions

in mainstream financial markets that just don’t make sense, such as this:  household net worth in the U.S. was $96.9 trillion, up $7.2 trillion in the year ending September 30, 2017 (according to the Fed’s latest Z.1 report). This means the U.S. economy supposedly generated wealth at a rate equal to roughly 40% of its annual income (GDP), despite Americans consuming virtually all of their income and saving very little. Wow, that’s a miracle!

Remember this: all prices are fractions. Prices can go up either because numerators go up or because denominators go down (such as when central banks dilute fiat currencies). So…are financial markets climbing because we're truly getting richer, or because of central bank-induced asset price inflation? Are quantity-constrained cryptocurrencies a safe-haven alternative? Time will tell, but I predict cryptocurrencies will broadly benefit as more folks come to understand what’s driving distortions in financial markets.

One of the "big 3" cross-currency central banks will announce in 2018

that it is preparing to issue its currency on a blockchain. The “big 3” are the “super-regional” central banks through which most “cross-currency” foreign exchange transactions settle, including the Fed, the Bank of England and the Bank of Japan. The Fed is behind the curve, but in 2018 either the BoE or the BoJ will step forward to allow tokenization of its currency to be executed by institutions in regulatory sandboxes. Corporate treasurers around the world will cheer at the prospect of same-day FX settlement through one (or two) of these “big-3” currencies because it will free up hundreds of billions of capital currently trapped on corporate balance sheets, due to payment system latency.

Yet for all bitcoin’s strengths, I believe advances in the enterprise blockchain will outpace those of bitcoin in 2018. Let’s face it – enterprises are slower to move than the cryptoasset sector, which moves-fast-and-sometimes-breaks-things. I believe 2018 will be the year in which a watershed event happens: an enterprise blockchain platform passes a CISO (chief information security officer) audit and is deployed inside the firewall of major financial institutions.

Enterprise goes live

Consensus 2018 will be "back to the suits.

" Let’s face it: attire at industry’s biggest conference has been a pretty good barometer of what's hot in the space. At the inaugural Consensus conference in 2015, bitcoin t-shirts dominated the audience. In 2016, business suits dominated as bankers discovered the space. In 2017, the dominant attire swung back to t-shirts, but this time for ethereum and ICOs. In 2018, I predict it will be "back to the suits" as enterprise blockchain accomplishments will again dominate the sector’s headlines, late-followers will scramble to catch up, and corporate treasurers will attend en masse.

The first institutional bond offering will be issued on a blockchain in the U.S. in 2018.

Bond markets, not stock markets, will see the first U.S. institutional-level securities issued on a blockchain. Because the regulatory requirement to issue securities in “depository-eligible” (indirect) form does not apply to bond markets, the first institutional securities issued on a blockchain will be bonds – something I’ve predicted for years. In 2018, I believe it will finally happen. Yet, the coming clash between the federal securities laws that govern equities (which contemplate indirect ownership via the DTCC’s Cede & Co.) and state corporate laws (which contemplate that shares are owned directly by shareholders) will not happen yet in 2018.

No new blockchain consortiums will be formed in 2018.

If 2017 were the year of forming new consortiums, 2018 will be the year of bilateral projects. Blockchains are networks and therefore suffer from the proverbial chicken and egg problem – consortium first and then project, or project first and then consortium? Consortiums now exist across a wide variety of industries, but – at least for now – more action is happening outside of consortiums than inside them.

Enterprise blockchain adoption will advance beyond incremental-type uses in production,

such as sharing of data, to include transformational uses, such as custody of institutional financial assets that only ever exist on a blockchain. This will shine light on quality differences between platforms — and separate those that are decentralized and offer transformational benefits from those that don’t quite. A big gap will open in 2018 between the "haves" and "have-nots" in enterprise blockchain. 2018 will be a consolidation year as the sector matures. The sector came of age in 2017, as adoption broadened in both bitcoin and blockchain. In 2018, both will strengthen and deepen further. And property owners the world round will rejoice.

Chuck Reynolds

Marketing Dept
Contributor

Please click either Link to learn more about Bitcoin.
Interested or have Questions, Call Me, 559-474-4614

Four Tips for Cryptocurrency Users in the New Year

Four Tips for Cryptocurrency
Users in the New Year

While 2017 may have been the year that cryptocurrencies

really started to get on people’s radar, I’m predicting that 2018 will be the year we see them become more widely adopted. Whether you’re just getting into cryptocurrencies now or are already a veteran, here are some tips for the upcoming year. Note: this is not financial or investing advice. Always do your own research and make your own choices.

Do your own research, and be thorough!

One of the most common questions I get asked when at events or by friends and family is, “What is the next big coin I should invest in?” Frankly, I hate this question, because everyone should really be doing their own research into what projects and cryptocurrencies they wish to spend their money on. Not only is that the adult thing to do, but it also saves everyone from the embarrassing situation of blaming someone else for financial folly. Most projects nowadays have a lot of supporting documents and channels through which to get in touch with the team directly. There is no excuse for not being thorough and autonomous in your research in 2018.

Don’t get too attached to any one cryptocurrency

Maximalism in cryptocurrency has never made sense to me. The beauty of crypto’s open-source nature is that if someone disagrees with how a project is going, they can fork away from it, or choose to buy different cryptos. Only believing in one and attacking all others results in a toxic zoo, where all crypto-curious individuals are scared away and all crypto-skeptics feel validated. So don’t get too attached, and definitely be civil in all of your interactions.

Educate as many people about cryptocurrency as you can

I think that the community is what will make 2018 be the year of wider-spread cryptocurrency adoption. So go out there and tell people about it, or maybe even prepare some paper wallets of a cheap altcoin to pass out and let people try it out for themselves. With all the FUD from mainstream media and incessant attacks from skeptics, it is on the community to show off cryptocurrency’s true value.

Lead by example: actually use some of your cryptocurrency

It can be tempting to never spend your cryptocurrencies. After all, what if they go up in price tomorrow? However, exclusively thinking this way turns the cryptocurrency community into a band of speculators, viewing their cryptocurrencies as fiat-correlated assets. That is not the original intention of cryptocurrencies. Cryptocurrency can only thrive if its use cases are apparent to users and adopters. If its main goal is to be a currency, then it needs to be a store of value but also a medium of exchange. Personally, I use a cold wallet for “savings” and a hot wallet for “spending” much like I do with my fiat assets, which seems to work pretty well. Well, dear readers, the end of 2017 is upon us and I hope you’ve had a successful and profitable year. Here’s to the next one; may it be even better.

Chuck Reynolds

Marketing Dept
Contributor

Please click either Link to learn more about Bitcoin.
Interested or have Questions, Call Me, 559-474-4614