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Showing posts with label bitcoin. Show all posts
Showing posts with label bitcoin. Show all posts

Wednesday, November 29, 2017

The Daily Economist update for Nov. 29 2017 - Gold, Bitcoin, and Cryptocurrency Report

Tuesday, November 28, 2017

Kim Dotcom's latest venture is to create a new financial system using the 'perfect' cryptocurrency as universal money

While Bitcoin, Ethereum, and Litecoin have yet to reach their full potential as a new and alternative medium of exchange which could replace the current system of sovereign currencies, long time innovator Kim Dotcom is ready to change that.  And his newest venture and goal is to create a completely new financial system based on what he calls the 'perfect' cryptocurrency that would function globally as universal money.

Kim Dotcom has sketched out his vision for a “perfect cryptocurrency” that would be fast, cheap and popular enough to keep it outside the influence of the world’s largest financial institutions. 
Dotcom gave fans the broad strokes of his plan in a Twitter post, saying that high-speed transactions and low fees of a universal cryptocurrency would help transfer control from banks and corporations back to the individual. The tweet was punctuated with the hashtag “#Goals,” suggesting this is a vision the self-described “tech freedom fighter” is working towards. - Russia Today
In addition to creating a new global financial system which would be run using a singular cryptocurrency, Dotcom is also envisioning a new and separate internet that would be outside the purview of state controls, and allow the free flow of information as was the original intention of the current system.

From $8000 to $10,000 in just four days: Bitcoin price crosses Rubicon on at least one foreign exchange

Nov. 28 is now a red letter day for Bitcoin and the cryptocurrency sphere as on at least one Bitcoin Exchange, the price of the cryto crossed the predicted Rubicon of $10,000 per coin.

The meteoric rise of Bitcoin's latest moves comes as the cryptocurrency went from just under $8000 on Thanksgiving day to over $10,000 just four days later.

The first decentralized peer-to-peer payment system, bitcoin, has broken through the $10,000 mark on South Korea’s Bithumb, one of world’s biggest exchanges for cryptocurrencies. The price of bitcoin this year has jumped more than 10-fold. 
The digital currency is still unrecognized or regarded as an asset by most central banks. It started the year at below $1,000. 
November has been a volatile month for the world's most popular cryptocurrency. Two weeks ago, bitcoin saw it's price drop by 30 percent to $5,500. It has since nearly doubled to over $10,000. - Russia Today

Monday, November 27, 2017

21 million Bitcoins? New study confirms that as much as 25% of the already 16 million mined are gone forever

One of the more interesting aspects of cryptocurrencies is that they rely upon the individual owner to be solely responsible for their protection.  And by protection we mean control over their cryptocurrency wallets, as well as when they move them back and forth through exchanges during the process of buying and selling.

And unlike a bank or vaulting service that provides a modicum of insurance of your money and assets in the case of cyber theft, physical theft, or institutional error, if someone is negligent in their handling of their cryptocurrency wallets, not only are they out the Bitcoin they lost, but those cryptocurrencies are also lost forever from the entire balance of mined cryptocurrency.

In a new study out on Nov. 25, in the time it has taken to mine 16 of the total 21 million Bitcoin expected to ever be produced, approximately 25% have been lost forever through a myriad of reasons such as failed hard drives, lost wallet passwords, etc...

Chart courtesy of Fortune Magazine
Just as gold bars are lost at sea or $100 bills can burn, bitcoins can disappear from the Internet forever. When all 21 million bitcoins are mined by the year 2040, the actual amount available to trade or spend will be significantly lower. 
According to new research from Chainalysis, a digital forensics firm that studies the bitcoin blockchain, 3.79 million bitcoins are already gone for good based on a high estimate—and 2.78 million based on a low one. Those numbers imply 17% to 23% of existing bitcoins, which are today worth around $8,500 each, are lost. 
While others have speculated about the number of lost bitcoins, the Chainalysis findings are significant because they rely on a detailed empirical analysis of the blockchain, where all bitcoin transactions are recorded. - Fortune Magazine

Bitcoin as collateral? New Blockchain Fintech company to create lending network grounded on cryptocurrencies

One of the biggest questions in the cryptocurrency market has always been how could a de-centralized digital currency facilitate lending in a similar fashion to how central banks do using sovereign currencies?  Some companies like GoldMint are in the process of trying to create lending facilities using the old 'Pawn Shop' method out of their gold backed cryptocurrency, but as yet this paradigm only works for resource backed cryptos.

Now on Nov. 26 a company known as SALT Lending announced that they are ready to provide the platform to facilitate lending using unbacked cryptocurrencies like Bitcoin as their collateral.

In a world drowning in debt, consumers and institutions can borrow and lend against any collateral: Houses, stocks, gold, watches, diamonds, government bonds — the possibilities are endless. 
But there is one asset class the traditional lenders won’t touch with a ten-foot pole: cryptocurrencies and other crypto assets. And yet, because of their digital and transparent nature, these assets would be the easiest to collateralize. 
Enter SALT Lending, the first blockchain-based lending network. It aims to use blockchain technology to securely collateralize crypto assets and provide fiat money loans against them. 
But this is just the first step. Eventually SALT wants to put all asset-backed lending on its Ethereum-backed blockchain, using the technology to provide a better and cheaper service for lenders and borrowers alike. This is a daunting task, however, as many ambitious Ethereum ventures have yet to deliver on their lofty promises. - Epoch Times

Sunday, November 26, 2017

Bitcoin has joined gold as a safe haven asset over bonds in the advent of a financial crisis or stock market crash

Although Bitcoin does not carry all of the intrinsic characteristics of physical gold, it has in its short time become a go-to safe haven asset according to many hedge fund managers and institutional investors.  In fact Bitcoin appears to be ready as even a replacement for sovereign bonds in the advent of the next financial crisis or stock market crash.

Graphic courtesy of Coin Telegraph
Bitcoin could become a lifeline for hedge funds and other investment professionals in case the established financial system fails, says Mikhail Mashchenko, an analyst at the social network for investors eToro in Russia and CIS. 
“The demand for bitcoin is growing as the crypto market has become less volatile, and an increasing number of professional investors see it as insurance,” the analyst told RT.
Digital platforms have been trying very hard to attract institutional investors, according to Mashchenko. 
“LedgerX launched its first long-term options for bitcoin, with an expiration date of December 28, 2018. In the coming months, we will continue to see the ‘domestication’ of bitcoin: the Chicago Board Options Exchange and the Chicago Mercantile Exchange are planning to launch tools based on the cryptocurrency in the near future,” he said. - Russia Today
There is one big caveat however, and it is the same dichotomy that the gold market experiences in the advent of financial duress.  And that is whether investors will move towards buying actual Bitcoin, or instead buy paper derivatives of the cryptocurrency similarly to how investors buy GLD paper gold versus the real physical metal.

Bitcoin price jumps $400 overnight to over $9000 per coin as Western investors begin to enter market in droves

Some of the predictions of Bitcoin reaching $10,000 per coin before the end of 2017 are appearing now to have been conservative as the cryptocurrency's movements over the last five days signal that milestone could easily be reached as early as next week.

Overnight buying of Bitcoin in the 24 hour market has driven the price up over $400 to a new all-time high of $9200 as Western investors have begun to enter into the market in droves thanks to the expected acceptance of Bitcoin derivative trading on Wall Street.

Less than 24 hours ago, we noted that Bitcoin had broken above the recent resistance level around $8,300 and hit a fresh all time high of $8,650, observing that the world's biggest cryptocurrency by market cap is now rising at a pace that has put the $10,000 price target by both Mike Novogratz (and Jose Canseco) firmly in its sights. It didn't take long however for bitcoin to find a new round of eager buyers, and in early Asian trading, a burst of buying out of Korea's Bithumb exchange, has sent bitcoin surging another several hundred dollars higher, and around midnight ET bitcoin had surpassed $9,000, sending its market cap to $150 billion, making it more valuable than corporations like Siemens, Mastercard or McDonald’s. 
The sharp gains come as the combined market capitalization for all cryptocurrencies also peaks at new highs - currently standing at just shy of $300 billion. 
At this rate of appreciation, the crypto may hit the key psychological level of $10,000 in under a week. Needless to say, the long term chart is about as exponential as it gets, so as usual, buyer beware. - Zerohedge

Saturday, November 25, 2017

The black hole cost of mining Bitcoin that no one is talking about

One of the more lucrative businesses that have sprung up in 2017 is that of Bitcoin, and other cryptocurrency mining.  In fact in areas where governments subsidize cheap electricity (Russia, China, and Venezuela), these mining operations have grown and multiplied substantially.

However as most of us know regarding Bitcoin, as the volume of produced coins increase, the time and duration to mine the remaining coins lengthens.  And in an interesting study out on Nov. 23, the current electricity use incurred for Bitcoin mining operations now exceeds the total combined output of 161 nations, and by February of 2020 could exceed the entire amount currently produced by the entire world.

Bitcoin’s ongoing meteoric price rise has received the bulk of recent press attention with a lot of discussion around whether or not it’s a bubble waiting to burst.
However, most the coverage has missed out one of the more interesting and unintended consequences of this price increase. That is the surge in global electricity consumption used to “mine” more Bitcoins. 
According to Digiconomist’s Bitcoin Energy Consumption Index, as of Monday November 20th, 2017 Bitcoin’s current estimated annual electricity consumption stands at 29.05TWh
That’s the equivalent of 0.13% of total global electricity consumption. While that may not sound like a lot, it means Bitcoin mining is now using more electricity than 159 individual countries (as you can see from the map above). More than Ireland or Nigeria.
If Bitcoin miners were a country they’d rank 61st in the world in terms of electricity consumption. - Power Compare UK
To keep up with this demand, alternative forms of energy would be needed to fuel cryptocurrency mining, possibly within just a years time.  Because if not then sovereign governments would surely need to get involved as the current global grid system is inadequate to facilitate a doubling of its electricity output.

Bitcoin price soars to new all-time high of over $8600 following Friday's hard fork and Bitcoin Diamond spinoff

Nov. 24 saw the advent of another hard fork spinoff for Bitcoin where the original cryptocurrency has now spawned two derivative 'coins' with the possibility of a third still looming on the sidelines.  Yet unlike previous times when there were major selloffs of Bitcoin following a fork and dividend offering, the cryptocurrency jumped over $400 in price Friday to set a new all time high of over $8600.

Bitcoin, the world's most popular cryptocurrency, almost reached $8,500 (now over $8600) on Saturday, setting another record.  
Earlier this month, the price of bitcoin fell to $5,500 following the scrapping of the SegWit2X update that made some miners and investors shift to offshoot bitcoin cash. 
However, the cryptocurrency returned to growth and surpassed $7,000 on news that the Chicago Mercantile Exchange would start trading futures on the digital currency. 
Bitcoin started the year just above $1,000, and the overall growth now is approaching 850 percent. The cryptocurrency's market capitalization has reached $142 billion, making it more valuable than corporations like Siemens, Mastercard, British American Tobacco or McDonald's. - Sputnik News

Friday, November 24, 2017

Bitcoin's divisions beginning to become a mockery as new fork creates Bitcoin Diamond

Either Bitcoin is quickly becoming a ponzi type scam, or developers of the cryptocurrency are completely divided on the platform's future as another hard fork imposed on Nov. 24 has spawned the newest Bitcoin derivative in Bitcoin Diamond.

Bitcoin Diamond joins Bitcoin Cash and the shelved (for now) cryptocurrency labeled Bitcoin Gold in what has become a mockery for the original player in the cryptocurrency sphere.

A fresh new Bitcoin fork successfully debuted Friday, but its 4.2 bln coins are already raising questions. 
Bitcoin Diamond (BCD), which launched at block 495866, aims to switch from proof-of-work to proof-of-stake after mining is completed - after just 10,000 blocks. 
A curiously complex introduction on Bitcointalk Nov. 22 paved the way for Bitcoin’s latest doppelganger, which unlike previous incarnations Bitcoin Cash(BCH) and Bitcoin Gold (BTG) has hardly anything in common with Bitcoin (BTC) at all. - Coin Telegraph
With there now being at least two iterations of the original Bitcoin, and close to 1200 total cryptocurrencies available for trading, the idea of Bitcoin becoming an alternative to currency (money) is very quickly falling by the wayside as even long time advocates appear to be recognizing that traders are using one or more of the cryptos as a platform to engage in a pump and dump, boosting up the price of one crypto while forcing down the price of others.

Precious metal asset fund swapped mining stocks for Bitcoin to then use profits to increase gold holdings

A small yet well established asset management firm that offers customers exposure to precious metals reported earlier this week that back in April they had swapped their historic investments in mining stocks to instead direct their cash into Bitcoin.

Old Mutual's Gold and Silver fund had for a long time invested clients money into precious metal based equities and securities.  But with the astronomical rise in the value of cryptocurrencies here in 2017, in April they shifted assets into Bitcoin as a means gain yield which they have traded to then move the profits into other gold assets.

A precious metals fund is investing in bitcoin to reinvest profits from the digital currency in gold assets. 
Ned Naylor-Leyland, manager of the Old Mutual Gold and Silver Fund, said it started buying bitcoin in April, and that the virtual currency serves as a better allocation than a heavy weighting toward mining stocks. 
He said that both bitcoin and gold complemented each other as assets, as the cryptocurrency was designed to be "digital gold." 
"Bitcoin's frictionless and immediate blockchain payment system resolves the criticism of gold as lacking divisibility and having problems with ease of transmission," Naylor-Leyland said in an emailed statement. - CNBC

Wednesday, November 22, 2017

The Daily Economist update for Nov. 22 2017 - Gold and Cryptocurrency Report

Asset management company in France to become the first to create and offer Bitcoin secured mutual fund

While Wall Street focuses on the creation of a futures market to allow institutional investors to acquire a form of Bitcoin in their portfolios, one asset management company in France is working on taking ownership of the cryptocurrency a step further.  And on Nov. 22 TOBAM announced they have created the world's first Bitcoin secured mutual fund which will be offered to their customers as another investment vehicle.

The French asset management company TOBAM, with $9 bln under management, has officially announced the creation of the first Bitcoin mutual fund. The goal is for institutional investors to gain access to the cryptocurrency. 
The company has created the fund as an unregulated alternative investment in order to provide a vehicle for allowing more regulated investors at the institutional level to gain Bitcoin exposure without the regulatory concerns. According to the business development lead, Christophe Roehri: 
"Direct investment in Bitcoin can be operationally challenging, from dealing with the choice of the platform, to maintaining the proper security measures in terms of custody and to managing the changes made to the protocol.” - Coin Telegraph

Chinese internet giant Baidu wants to pay you for use of your pc's processing power to mine Bitcoin

A month ago we published an article on how hackers are using malware to turn your pc into a Bitcoin miner as part of their global unauthorized network.  Now on Nov. 22 Chinese internet giant Baidu wants to do the same with your computer, only their program seeks to do it with your permission, and also to pay you for the leasing out of your spare processing power.

A service launched by China’s internet giant Baidu can make you money if you are willing to share your desktop computer’s spare computing power for faster downloads, smoother online videos and maybe even mining bitcoin. 
Baidu, the operator of China’s dominant online search engine, has launched a service called Baidu Jinkuang, which roughly translates as Baidu Gold Mine in English, to allow users to exchange extra hard disk space on their computers and broadband connection into real money. 
Baidu said in a statement on Wednesday that by using a peer-to-peer content delivery network (CDN), the service can gather the extra computing resources and broadband connection in individual homes and use them to help store and speed up the distribution process of various online products. 
“CDN enables users to share their unused bandwidth,” said Hu Yongjun, chief operational officer of Huangpu Community, an online platform for digital currency and blockchain technologies. “Bitcoin mining may be one of the uses but it could definitely help live streaming and e-sport platforms and generate hype to lure users as bitcoin is so hot right now.” - South China Morning Post
Bottom of Form

Tuesday, November 21, 2017

Long time Bitcoin and cryptocurrency advocate diligently selling some holdings to put into physical gold and silver

Jeff Berwick, who is also known as the Dollar Vigilante, is a long time advocate of Bitcoin and cryptocurrencies as a whole.  And in fact he has been a strong proponent of them since the beginning when Bitcoin was little more than a symbol of rebellion among the anarcho-capitalist community.

But Berwick is also a long time student of the market as prior to his moving to Acapulco several years back, he was the owner of Canada's largest financial website and bulletin board during the early years of the internet.

So with this being said it appears that financial prudence is outweighing the mania that is part and parcel for the cryptocurrency community.  And as Bitcoin reaches new all-time highs of over $8000 per coin, The Dollar Vigilante is taking profits from some of his crypto holdings and moving them into two of the most undervalued assets in the markets.

Gold, silver, and even the mining stocks that produce them.

Unlike gold and sovereign currencies, cryptocurrencies like Bitcoin don't have insurance to cover theft or coding mistakes

When hackers broke through the world's primary platform for currency exchange (SWIFT) last year and stole close to $100 million from the Indonesian central bank, it signaled just how vulnerable any asset born from, or stored in, cyberspace can be with the right amount of time and ingenuity.

Cryptocurrencies, and by default their third party conduits such as an exchange, are no exception to this rule.  And because of the amount of value and growth cryptos like Bitcoin have garnered in just a short amount of time, even the most powerful encryption processes will be cracked and their assets subsequently stolen.

As in the latest cyber-theft of wallets from the 19th largest cryptocurrency known as Tether.

Hackers have robbed the wallet in the 19th largest cryptocurrency tether. The company behind the dollar-pegged cryptocurrency blamed "malicious action by an external attacker" for the theft of $30,950,010 on Monday. 
Tether would not redeem any of the stolen tokens. The cryptocurrency’s market cap is $674 million, with the value of one tether equal to one US dollar. 
“The back-end wallet service has been temporarily suspended. A thorough investigation of the cause of the attack is being undertaken to prevent similar actions in the future,” Tether wrote. 
As the largest cryptocurrency bitcoin reacted negatively on the news, immediately falling about five percent, but soon recovered and is trading above $8,000, not far from the all-time high of $8,200 seen on Monday. 
The incident is the latest in a number of hacks that are raising questions about the security of cryptocurrencies. 
This month, $280 million worth in ethereum was frozen after someone made a mistake by deleting the code library of Parity Technologies, a large provider of cryptocurrency wallets. 
The individual who triggered the lockdown claimed to be new to cryptocurrency. 
Mt.Gox, one of the largest bitcoin exchanges, faced bankruptcy after hackers stole $460 million worth in bitcoin in 2014. - Russia Today
Yet here is the thing... owners of sovereign currencies like the dollar, euro, yen have a modicum of insurance through the banking system in case of it being stolen from those accounts through a cyber attack.  Additionally, gold stored in a respected vaulting service will be able to have insurance in case of physical theft of their metal.

But in the cryptocurrency realm there is no insurance against theft, or as we saw last week with Ethereum, coding mistakes that locked out hundreds of millions of dollars worth of crypto from individual wallets.  And so the onus is 100% on the cryptocurrency owner, which makes owning cryptocurrencies completely reliant upon diligent investors, as well as in being able to trust in the facilities that in the end offer little recompense if hackers decide to target their platforms.

Monday, November 20, 2017

Bitcoin daily transactions reach the $2 billion mark for first time last week

Last Wednesday was a red letter day for Bitcoin as the cryptocurrency achieved a new high for denominated transactions when it surpassed the $2 billion per day threshold on Nov. 16.

Even going back to September, the total notional amount of transactions per day remained below $1 billion.  However with the oncoming of October Bitcoin blew through that ceiling and within a months time doubled again to its $2 billion level.

Blockchain Transactional Volume
2017 has been bitcoin’s biggest year yet, with the digital asset reaching another new all-time high above $8,000 over the weekend. In addition to the exploding price, the total value transacted on the network per day has also seen substantial gains this year; however, the actual number of transactions processed by the network per day has been rather stagnant in 2017. 
For most of January, roughly $200 million worth of bitcoin was being sent around the Bitcoin network per day. Things didn’t really take off until May where there was a steady rise in the total value of the transactions processed by the network. Near the end of that month, days where more than $700 million was transacted on the network were common. 
After declining over the next couple of months, the value being transacted on the Bitcoin network spiked in the runup to the release of Bitcoin Cash, which forked off from the Bitcoin ledger on August 1st. The lock-in of the much-anticipated Segregated Witness (SegWit) improvement for Bitcoin also occurred around this time. 
Roughly a billion dollars of value was sent around the Bitcoin network per day in early August. This number declined down to $600 million by late September before exploding to $1.5 billion by late October. 
November 16th set a new all-time high for value transacted over the Bitcoin network in a single day at $2,803,405,660. - Forbes

Glint joins companies like GoldMoney in allowing people to store their wealth in gold but use it like a bank account

Some of the most trusted names in the gold markets began the process over two years ago to bring gold back into the monetary system when Bitgold merged with GoldMoney to create a digital platform by which individuals can buy and store their wealth in physical gold bullion while still having access to it through a Mastercard use portal.  Now on Nov. 20 another company called Glint is joining in the mix.

An electronic payment app that allows people to pay for goods and services in gold has been launched by fintech firm Glint. 
Released Monday, the app — also called Glint — allows users to link a Mastercard debit card to their phone, which then lets them buy physical gold bullion that is stored in a Swiss vault. 
Jason Cozens, the company's chief executive and co-founder, said Monday that central banks' quantitative easing policies and the collapse of some banks have made many people realize that traditional accounts are not a risk-free option. 
"Since the financial crisis, people are starting to understand that purchasing power of their money isn't safe," he said. 
On its website, Glint says that once either a currency or gold is linked to a Mastercard, customers can buy "anything from a coffee to a car." The company adds that users can also select the precious metal to make peer-to-peer payments. - CNBC
Unlike Bitcoin and other cryptocurrencies that allow for a peer-to-peer medium of exchange in the particular denomination of a given cryptocurrency, gold backed digital accounts allow for easy conversions into any currency without dealing with the volatility swings encountered when a crypto is converted back into a particular sovereign currency.

The world is aching for a return to sound money, and especially a way for gold to backstop that money even if it is just in the hands of depositors and individuals.  And with sovereign governments desperate to devalue their own currencies to protect their own financial systems to the detriment of their people, finding an alternative to the traditional banking system is one of the reasons why cryptocurrencies and gold backed allocated accounts are striving to become the future of individual finance.

Sunday, November 19, 2017

South Korean company is ready to integrate Bitcoin into their global network of ATM machines

The ability to buy and sell Bitcoin in the United States, as well as worldwide, is about to get easier as one of the world's largest ATM manufacturers is expanding their network globally to integrate Bitcoin into their systems.

Hyosung, which builds ATM's for banks and institutions around the world, has allowed for the buying and selling of Bitcoin locally in their home market of South Korea since 2014.  However beginning today, the company who also has its primary headquarters located in the state of Texas is enlarging their cryptocurrency program for both the U.S. and other foreign destinations.

South Korea’s Hyosung, one of the largest ATM manufacturers in Asia, which also has its headquarters in Texas, has officially integrated Bitcoin into its international ATM models. 
Since 2014 Hyosung has collaborated with leading Bitcoin service providers within the South Korean cryptocurrency industry such as the Tim Draper-backed Coinplug. For over three years Hyosung has enabled South Korean ATM users to buy and sell Bitcoin through tens of thousands of Hyosung ATMs, located at nearly every convenience store and subway station. 
Through the Coinplug mobile app, Hyosung has allowed South Korean users to easily withdraw and deposit cash to sell or obtain Bitcoin, increasing the liquidity of Bitcoin for general consumers in the region. - Coin Telegraph
Hyosung is obviously not the first company to install ATM devices that allow for the buying and selling of Bitcoin, however because of their footprint, millions more people will now have the opportunity to bypass online exchanges and trade in the cryptocurrency sphere as they see fit.