Bitcoin Price Bounces Back, Crypto Markets Recover to $170 Billion

Bitcoin Price Bounces Back, Crypto Markets Recover to $170 Billion

Bitcoin Price Bounces Back, Crypto Markets Recover to $170 Billion

The crypto markets bounced back on Thursday following a significant contraction the previous day. The bitcoin price led the charge, rising more than 6% to put the $5,700 barrier within its sights, while the ethereum price ticked up 3% to $309. Unfortunately, the recovery was not comprehensive, and some cryptocurrencies — including ripple — continued to decline.


Chart from CoinMarketCap

The downturn forced the total cryptocurrency market cap as far down as $156.5 million, which represented a one-week low. However, the markets began to recover Wednesday afternoon and quickly rose above $160 billion. They continued to climb leading into Thursday morning and have since risen to a present value of $169.7 billion.

Chart from CoinMarketCap

Bitcoin Price Bounces Back

Wednesday’s bitcoin price decline caught many investors by surprise, and it was difficult to ascertain what caused it, other than that traders were taking profits following last week’s rally. The pullback put severe downward pressure on the bitcoin price, which fell as low as $5,151. However, bitcoin held firm at this level, and support gradually began to return, enabling the flagship cryptocurrency to mount a successful recovery. Ultimately, the bitcoin price posted a single-day return of 6%, bringing it to a present value of $5,679, which translates into a $94.5 billion market cap.

Bitcoin Price Chart from CoinMarketCap

Ethereum Price Holds Above $300

The ethereum price experienced a single-day recovery as well, although its performance was not quite as impressive as that of bitcoin. After dipping as low as $291, the ethereum price managed to fight its way back across the $300 threshold. Ethereum is currently trading at $309, which represents a 24-hour recovery of about 3%. Ethereum now has a market cap of $29.4 billion.

Ethereum Price Chart from CoinMarketCap

Altcoins Eye Generally Recovery

Altcoins lost ground to bitcoin on Thursday, which saw its dominant market share rise about 1% to 55.7%. However, the majority of altcoins experienced recoveries against the value of USD, adding about $2 billion to their combined market cap.

Altcoin Price Chart from CoinMarketCap

But there were some significant outliers. In fact, three of the top 10 cryptocurrencies posted negative movement for the day, and the worst performance belonged to ripple. XRP holders had expected Ripple to make a major announcement during “Swell”, a conference hosted by the fintech startup. However, nothing materialized — at least not of the caliber they were expecting — causing the ripple price to add to its losses from yesterday. At present, the ripple price is $0.212, which represents a 24-hour decline of 7%.

Ripple Price Chart from CoinMarketCap

Fourth-ranked bitcoin cash also posted a minor decline, causing it to tick down to about $334. Several major bitcoin cash proponents — including Roger Ver and Calvin Ayre — intend to start a campaign to assert that “bitcoin cash is bitcoin”, so it will be interesting to see if this has any lasting effects on the trajectory of BCH.

Litecoin Price Chart from CoinMarketCap

The litecoin price, on the other hand, rose by 8%. This advance pushed it back over the $60 threshold, and litecoin is currently priced at $61. This translates into a market cap of $3.2 billion.

Dash added 3%, but it was unable to climb past the $300 mark, while NEM surged by just under 10%. NEO declined 3% after weathering the Wednesday downturn quite respectably, and bitconnect rose by 8% to $201. Monero rounds out the top 10 with a 1% increase, which was just enough to inch above the $90 barrier.

Author: Josiah Wilmoth on 19/10/2017

 

Posted by David Ogden Entrepreneur
David Ogden Cryptocurrency Entrepreneur

 

David – http://markethive.com/david-ogden

Why Silicon Valley is going gaga for Bitcoin

Why Silicon Valley is going gaga for Bitcoin

Why Silicon Valley is going gaga for Bitcoin

Cryptocurrencies are on a historic tear right now. And Silicon Valley’s infatuation with the industry explains a lot about itself.

Should I buy bitcoin? As a technology reporter, the questions I receive from random people at birthday parties, say, or seatmates on a plane, are usually emblematic of what is going on in the digital world. (And, increasingly, the real one, too, for that matter.) Not too long ago, the predominant question was Should I buy the new iPhone? Then it became Do I need to be on Twitter? or Do I need to be on Facebook? or Do I need to be on Snapchat? (That question has since come full circle to Should I quit Twitter and Facebook?) These days, the question I hear the most—well, besides whether Twitter should ban Trump—is Should I buy bitcoin?

I usually respond with the story of Laszlo Hanyecz. If you’ve come within 500 feet of bitcoin, or any other cryptocurrency, over the past few years, the name alone will make you cringe. Back in 2010, when the currency was in its infancy, Hanyecz went “mining” for bitcoins for a few months and collected 10,000 of them; he subsequently traded them, in what would be the first cryptocurrency transaction in history, to a guy who bought him two Papa John’s pizzas with a couple sides of that tasty, buttery garlic sauce. Back then, Hanyecz’s bitcoins had no value, and the $30 value of two pies and an accoutrement made his individual bitcoin units worth 0.003 cents apiece. Today, at their current market valuation, bitcoin units are worth around $5,800 each, which means Hanyecz’s 10,000 bitcoins would be worth around $58 million. “It wasn’t like bitcoins had any value back then, so the idea of trading them for a pizza was incredibly cool,” Hanyecz told me in 2013, when bitcoin was already valued at $1,242 each. “No one knew it was going to get so big.”

For a lot of people on the periphery of this technology, the extraordinary rise in bitcoin’s value has become cause for alarm. The Web is littered with news articles, blog posts, and white papers warning that bitcoin and its sibling currencies are worth nothing, and the rise and fall of the currencies’ worth, which can fluctuate by billions of dollars a minute, certainly backs that up. But while Jamie Dimon and other bankers might scoff at these digital currencies, Silicon Valley is extremely bullish. There’s a reason, too: if Dimon had invested in bitcoin when he first called it a joke, in 2015, he would have received a tenfold return on his investment.

There are a number of reasons why bitcoin and cryptocurrencies are doing so well right now. One of the more plausible scenarios was outlined this week in a very clever post written by Adam Ludwin, an investor and co-founder of Chain.com, a bitcoin developer platform, which argues that bitcoin is an entirely new asset class, similar to equities and bonds, and that “bitcoin is capitalism, distilled.” The “capitalism” part of the sentence helps explain why some in Silicon Valley are so specifically exuberant about it right now. “In the short-run, there will be extreme volatility as FOMO competes with FUD, confusion competes with understanding, and greed competes with fear (on both the buyer side and the issuer side),” Ludwin wrote. “Most people buying into crypto assets have checked their judgement at the door.”

This gets someone like me a bit nervous about what cryptocurrencies could end up doing to society in the long run. Silicon Valley culture is largely fueled by people who love to decimate industries that don’t work, often without any thought of how the disruption could lead to other negative results happening in society (see the recent social-media debacle around the election ). In typical Valley fantasy, people are seeing only the positive potential with bitcoin, not the potentially ugly outcomes when humans molest it for their own interests.

One of the many factors currently fueling the ascent of bitcoin is the rise of initial coin offerings, or I.C.O.s, where some lucky investors are reaping astounding returns. You can think of these like a traditional initial public offering, or I.P.O., but without the layers upon layers of regulation and government bureaucracy that come with a company going public. With an I.C.O., a start-up raises money for a new venture by selling “coins” that are very similar to shares of a public company. The coins then rise and fall as the company’s value oscillates. In 2014, when the founding of a new cryptocurrency called Ethereum was announced, it raised $18 million by selling a new digital coin called “Ether” for 40 cents per coin. Today, Ethereum has a market cap of around $30 billion. So if you had spent $100 on Ether during the I.C.O., you would have made $74,900 in profit. As Nathaniel Popper detailed in The New York Times earlier this summer, I.C.O.s have been generating billions of dollars in returns for some—and a lot of scams, too.

The lack of regulation in the cryptocurrency world, after all, means that there is a lot of fraud, extreme volatility, and coin values can jump up or down in mere seconds. Someone I recently spoke with who works with, and monitors, the crypto I.C.O. markets pointed out that some of these I.C.O.s feel awfully similar to the Dot Com public offerings of the late 90s, where the public was buying into nothing and ended up with exactly that when the entire market came crashing down and trillions of dollars were wiped off the stock market. In China, I.C.O.s became so troubling that they were banned earlier this year. In September, the People’s Bank of China issued a blunt statement saying that this practice was “illegal and disruptive to economic and financial stability.” I.C.O.s in China were occurring at an astounding rate, with one report claiming that more than $750 million was raised in I.C.O.s in July and August alone. A lot of people think the ban by China is temporary, slowing the dizzying speed of these offerings.

As a result of all the movement in the cryptocurrency market over the past couple of years, there are a lot of options out there for people who want to try their hand in crypto-investing. There’s bitcoin, the first and most well known of all the currencies, which currently oscillates in value at around $5,000 a coin. I’ve heard predictions all over the map, from bitcoins one day being worth as much as $500,000 each to units being worth absolutely nothing if a better coin comes along. (My personal prediction is that they will continue to rise for at least the next couple of years.) Ether had remained relatively flat until earlier this year when it spiked in value to over $350 apiece. (It’s since fallen to $300 each.) The current coin du jour is called Litecoin, which is getting a lot of attention because it’s still priced relatively low, at around $55 each, and is expected to rise considerably over the next year or so on account of new features that will be added to enable more privacy options. Then there are a slew of other coins to explore, including Monero, which is an open-source currency that was developed in April 2014, but which spiked this year after the illegal drug market AlphaBay was taken down. Monero, unlike other currencies, is truly anonymous, making it the perfect currency with which to buy and sell drugs, guns, and other illegal contraband on the Dark Web. If you look at the World Coin Index Web site, you can see a long list of other coins and their values over time, including Ripple, Bitcoin Cash, Qtum, NEO, Nav Coin, NEM, and a number of other coins.

For Silicon Valley, betting on one of these early can mean profiting beyond all imagination, exceeding even the famed 1,000x start-up returns from companies like Facebook and Uber. Earlier this summer, I interviewed Tyler and Cameron Winklevoss, the twins who co-founded The Facebook with Mark Zuckerberg, and they are now obsessively investing in cryptocurrencies. In a settlement with Facebook, the two brothers were awarded $60 million, but to hear them talk about it, it appears their investments in bitcoin and other currencies are going to reap a far bigger return over time. I’ve spoken with countless other people about the current state of bitcoin and cryptocurrency, and I’ve heard two truths that seems consistent. No one—and I mean no one—knows exactly which digital currency will be successful in the future. It could be bitcoin, it could be Litecoin, it could be something that hasn’t even been created yet. But, the other resounding feeling is that these currencies are here to stay in one form or another and there is nothing anyone can do to stop them. Which brings me back to that question that I’m often asked these days: “should I buy bitcoin?”

There’s an old saying in real estate that “you shouldn’t wait to buy, but rather you should buy and then wait.” That’s the way I feel about these cryptocurrencies. If you’re looking for a quick and dramatic financial boost, realize that you could probably get similar odds by buying a plane ticket to Las Vegas, walking into the first casino you see, and putting all your money on black or red. But, if you’re willing to wait it out, there’s a chance that your investment in a cryptocurrency could make for an impressive return over time. Just be prepared to go it the long haul. Or at least until the price spikes tomorrow.

Author Nick Bilton – special correspondent for Vanity Fair.

 

Posted by David Ogden Entrepreneur
David Ogden Cryptocurrency Entrepreneur

 

David – http://markethive.com/david-ogden

Bitcoin gets official blessing in Japan

Bitcoin gets official blessing in Japan

Bitcoin gets official blessing in Japan

The broader fintech sector is struggling even as cryptocurrencies take off

Entrepreneurs do not often welcome regulation. For Japanese cryptocurrency start-ups, however, a framework put in place by the country’s financial authorities has been a boon.

Rules announced this year by the Financial Services Agency allow people to pay for goods and services with bitcoin and require cryptocurrency exchanges or remittance operators to be licensed and subject to annual audits. These have given bitcoin official approval.

“The Japanese have felt that cryptocurrencies are a scary thing but trading volumes have increased as many now see it as trustworthy thanks to government approval,” says Yusuke Otsuka, chief operating officer at Coincheck, a bitcoin exchange.

The FSA issued operating licences to 11 bitcoin exchanges late last month. Coincheck has applied for a licence and is hoping to receive approval next month, Mr Otsuka says.

The new digital currency rules come as other governments clamp down on cryptocurrencies. China, for instance, has banned companies from issuing their own virtual currencies and is cracking down on cryptocurrency exchanges.

However, for Japan, cryptocurrencies sit within the realm of fintech. The government and banking leaders hope that this sector’s businesses — ranging from artificial intelligence-led investment advisory groups to cloud data storage — will free up cash sitting in bank deposits and reignite the economy.

There has been domestic hand-wringing over the investment going into fintech ventures in Japan compared with that in other developed countries. Japan’s fintech sector, seen as a laggard, had investments of $65m in 2015. This compares with $12bn in the US, $974m in the UK and $69m in Singapore, according to consultants Accenture.

“We’re hoping that fintech will change economic and corporate activity,” says Takuya Fukumoto, director of industrial finance in the economy, trade and industry ministry. The ministry set out the government’s vision in August, calling for an increase in cashless consumer payments, digitising back-office functions and new technologies to enhance cash flow between companies.

Japanese banks, worried that fintech ventures will become mainstream players, are trying to gain exposure to new technologies by either creating a business or investing in a start-up.

 

Author   Emiko Terazono

Posted by David Ogden Entrepreneur
David Ogden Cryptocurrency Entrepreneur

 

 

David – http://markethive.com/david-ogden

Bitcoin Wallet Blockchain: ‘Buy Some Ether’ to Make Transactions After SegWit2x

Bitcoin Wallet Blockchain: ‘Buy Some Ether' to Make Transactions After SegWit2x

Bitcoin Wallet Blockchain: ‘Buy Some Ether’ to Make Transactions After SegWit2x

Crypto wallet Blockchain has announced its intention to join with Xapo in following the blockchain with the most accumulated difficulty following the proposed SegWit2x. The wallet service advised its users to “buy some ether” if they intend to make transactions immediately following the fork.
 

Blockchain Wallet to Follow Chain With Most Difficulty

In mid-November, the Bitcoin blockchain is expected to split into two, competing chains following SegWit2x, a hard fork designed to upgrade the Bitcoin network and enable it to scale more effectively. The proposal appears to have strong support from miners and crypto firms — although this support has steadily waned as the fork has gotten closer — but it is opposed by the Bitcoin Core developers, as well as many other businesses and users.

Consequently, bitcoin services have to decide how they will approach the hard fork. Some, such as Bitfinex, are treating the SegWit2x fork as a separate cryptocurrency, while others, including Xapo, state that they will assign the label “Bitcoin” to the blockchain with the highest accumulated difficulty.

Crypto wallet Blockchain — a SegWit2x supporter — has signaled its intent to follow Xapo’s example and determine which chain will receive the label “Bitcoin” based on the amount of accumulated difficulty each blockchain obtains.

Blockchain chief executive Peter Smith made the announcement in a blog post, stating that the service will provide users with access to the coins on the minority chain if they have “significant value”. Like Xapo, they will label the minority chain either BC1 (incumbent) or BC2 (SegWit2x)
 

Buy Some Ether’

Smith goes on to say that Blockchain may suspend outgoing bitcoin transactions following the fork until the networks have stabilized. He suggests users “buy some ether” if they plan to make transactions in late November following the fork.

During this period, it may be necessary to temporarily suspend outgoing bitcoin transactions for a period of time during network instability. However, even in this scenario, your funds will remain safe and you’ll be able to monitor them from within the wallet. You’ll also be able to use all Ethereum related functionality.

“If you have transactions to make around late November,” he adds, “we suggest you buy some Ether in our wallet today.”

 

Author: Josiah Wilmoth on 16/10/2017

 

Posted by David Ogden Entrepreneur
Davkid Ogden Cryptocurrency Entrepreneur

David – http://markethive.com/david-ogden

Global Regulators Play Bitcoin Whack-a-Mole as Demand Explodes

Banks Respond to Growing Interest in Cryptocurrencies

Global Regulators Play Bitcoin Whack-a-Mole as Demand Explodes

  • Evading government control a central feature of bitcoin
  • Efforts to regulate digital currencies stymie authorities


Banks Respond to Growing Interest in Cryptocurrencies

Regulators worldwide are finding that it’s incredibly hard to control the explosive growth of money tied to no nation.

Russian President Vladimir Putin is the latest to call for regulation of cryptocurrencies, saying there are “serious risks” they can be used for money laundering or tax evasion. Finance Minister Anton Siluanov has called for regulating digital money as securities, while central bank officials vowed to work with prosecutors to block websites that allow retail investors access to bitcoin exchanges. “We think this is a pyramid scheme,” said Sergey Shvetsov, first deputy governor of the central bank.

Global efforts to regulate digital money have accelerated in the past month since China banned initial coin offerings and ordered all cryptocurrency exchanges to close, following inspections of more than 1,000 trading venues over a six-month period. At least 13 other countries have imposed new rules or announced plans to tighten regulations, including South Korea, which also banned ICOs. Last week, European Central Bank Governing Council member Ewald Nowotny said the bank is discussing "concrete legal restrictions" on digital coin sales.

It’s a development that creators of bitcoin, the best-known digital currency, saw coming, and prepared for. Since it works on a peer-to-peer network, users can buy and sell coins and secure and perpetuate the system without any government or central bank involvement. Trying to control it is “like trying to catch water,” said Alex Tapscott, chief executive of NextBlock Global Ltd., a venture-capital firm that invests in blockchain startups.

Global Regulators Play Bitcoin Whack-a-Mole as Demand Explodes

Nine years after a mysterious coder that goes by the name Satoshi Nakamoto unleashed bitcoin on the world, some see it as a revolutionary use of technology that takes power away from governments and gives it to individuals, like handheld video cameras in the hands of civil rights activists, or social media during the Arab Spring uprisings.

"As cryptocurrencies gain wider acceptance, their ability to undermine politicians increases,” said Roger Ver, an early investor in bitcoin who is known as Bitcoin Jesus, for proselytizing about the digital currency in its early days. "The invention of bitcoin is one of the most liberating technologies in all of human history. It is on par with the importance of the invention of the printing press, or the internet itself."

Digital currencies live on computers and can be held by millions worldwide, bought and sold on websites, at MeetUps, or in person-to-person meetings. Even if there’s no ATM or exchange nearby, anyone with access to the Internet can buy them. And they can be used to purchase everything from a sandwich to a carpet to a house, or they can be held as an investment.

An investment of $1,000 in bitcoin in 2012 would now be worth about $4.9 million, while the number of transactions continues to increase. In the second quarter, they reached an average of about 291,000 per day for bitcoin and nearly double that when other major cryptocurrencies are included, from about 60,000 per day in 2013, according to researcher CoinDesk.
 

Dark Side

Yet there is an undeniable dark side. Bitcoin rose to prominence with Silk Road, a marketplace for weapons, drugs and other illicit goods, and it’s still used for such sales on the so-called Dark Web even after Silk Road was shut down. It’s also the currency of choice for hackers who have invaded the computers of everyone from hospitals to police departments. Even the North Korean government is accumulating bitcoin as a means to dodge international sanctions.

That’s why Jamie Dimon, the chief executive officer of JPMorgan Chase & Co., sees bitcoin as a “fraud” that’s destined to come crashing down, as its use in ransomware schemes, drug and arms trafficking ultimately persuades authorities to find a way to put a stop to it. “Someone’s going to get killed and then the government’s going to come down,” Dimon said. “You just saw in China, governments like to control their money supply.”

While any central banker might be troubled by a stateless currency competing with the coin of the realm, China’s efforts to crack down suggest it may be harder than it appears. While the government crackdown sent bitcoin prices plunging as much as 30 percent, it has now recovered those losses, even as a growing number of governments take action.

Once the largest global market for trading, China now accounts for 1.5 percent of bitcoin transactions, while Japan — where regulators have been more open to digital currencies — accounts for more than 60 percent, according to CryptoCompare.com.
 

Bitcoin Mining

China is the leader in bitcoin mining capacity — computers that are used to support bitcoin transactions and then get paid for the service with newly minted coins. Regulators have so far refrained from any action in that area. Wu Jihan, CEO of Bitmain Technologies Ltd., the world’s biggest mining operation, said in an interview that regional governments are welcome to legally set up bitcoin mining farms which are clean and considered part of the high-tech industry.

Cryptocurrencies are attractive where there are restrictions on taking cash abroad or where the local currency is weakening because of inflation. In Venezuela, a place with both problems, bitcoin’s weekly trading volume spiked to an all-time high in early April, when violent clashes between protesters and police started. The government has conducted raids on bitcoin miners, accusing them of “internet fraud and electricity theft.”

The same combination of capital controls, high inflation and a weakening currency have driven demand for cryptocurrencies across Latin America. Bitcoin demand spiked in Argentina in 2013 after former President Cristina Fernandez de Kirchner banned dollar purchases, while Ecuador and Bolivia are among the few countries that have outright bans on the currency.

By contrast, the U.K. has exempted bitcoin from value-added taxes, and says it should be considered a foreign currency for corporate tax purposes. The U.K. was early in publishing clear directives, ruling in 2014 that "bitcoin may be held as an investment or used to pay for goods or services at merchants where it is accepted.”
 

Crypto-Friendly Japan

Japan this year began enforcing a law that recognizes bitcoin as a legal method of payment, and overseeing cryptocurrency exchanges — effectively providing clarity and support to local entrepreneurs. That’s something Vietnam may do as well.

The U.S. Commodities Futures Trading Commission classified bitcoin as a commodity in September 2015 and this year approved the first cryptocurrency options trading, clearing and settlement firm. The Securities and Exchange Commission in July said some coins issued in ICOs would be considered securities and regulated as such unless “a valid exemption applies.”

While government efforts to come to grips with digital money have been fraught, the more important trend may be the growing number of money managers who are looking at cryptocurrencies as an asset class for investment.

"What’s more interesting is the increased sophistication of the institutional buy side for cryptocurrencies," said Nolan Bauerle, director of research at CoinDesk. "This new type of buyer means this is only a hiccup. There are important sums of fiat ready to cross into crypto in the short term." There are more than 68 hedge funds focused on cryptocurrencies today, many of them run by people from Wall Street.

 

Author: L Olga Kharif and Camila Russo
11 October 2017, 10:00 BST

 

Posted by David Ogden Entrepreneur
David Ogden Cryptocurrency Entrepreneur

 

David – http://markethive.com/david-ogden

Bitcoin heading over $10,000 in six to 10 months, former Fortress hedge fund manager says

Bitcoin heading over $10,000 in six to 10 months, former Fortress hedge fund manager says

Bitcoin heading over $10,000 in six to 10 months, former Fortress hedge fund manager says

Bitcoin has surged this year, up to $4874 on Tuesday, and Michael Novogratz sees it heading over $10,000.

Novogratz is starting a $500 million fund to invest in cryptocurrencies, initial coin offerings and related companies.

Although he says digital currencies like bitcoin show signs of forming a bubble, former hedge fund manager Michael Novogratz is going all-in.

The former Fortress Investment Group manager says he's been investing in bitcoin and its underlying blockchain technology for a while and sees bitcoin's price rising to over $10,000 in the next six to 10 months, largely because of heavy investor interest. Bitcoin was up 2.1 percent on Tuesday, to $4874.15 as of 5 p.m. ET, according to CoinDesk, and has surged in value this year.

"I can hear the herd coming," he said during an appearance after market hours Tuesday on CNBC's "Fast Money." He likened bitcoin to digital gold.

Novogratz is starting a $500 million fund to invest in cryptocurrencies, initial coin offerings and related companies. He put $150 million of his own money into Galaxy Digital Assets Fund and plans to raise the rest from outside sources by January, mainly from wealthy individuals and families and fellow hedge fund managers.

He told Bloomberg Television last month that digital currency like bitcoin is "going to the be the largest bubble of our lifetimes." JPMorgan Chase CEO Jamie Dimon last month called bitcoin a "fraud" and said he would fire anyone at his bank for trading it.

But whether bitcoin lasts or eventually gets replaced by the next new thing, the underlying blockchain technology is probably here to stay, he said. "Blockchain will change the way we live," he said. "This is not going away."

 

 

Author: Michael Novogratz

 

Posted by David Ogden Entrepreneur

David Ogden Cryptocurrency Entrepreneur

David – http://markethive.com/david-ogden

Bitcoin’s price bubble will burst under government pressure

Bitcoin's price bubble will burst under government pressure

Bitcoin's price bubble will burst under government pressure

Is the cryptocurrency bitcoin the biggest bubble in the world today, or a great investment bet on the cutting edge of new-age financial technology? My best guess is that in the long run, the technology will thrive, but that the price of bitcoin will collapse.

If you haven’t been following the bitcoin story, its price is up 600% over the past 12 months, and 1,600% in the past 24 months. At over $4,200 (as of 5 October), a single unit of the virtual currency is now worth more than three times an ounce of gold. Some bitcoin evangelists see it going far higher in the next few years.

What happens from here will depend a lot on how governments react. Will they tolerate anonymous payment systems that facilitate tax evasion and crime? Will they create digital currencies of their own? Another key question is how successfully bitcoin’s numerous “alt-coin” competitors can penetrate the market.
 

Warnings grow louder over cryptocurrency as valuations soar

In principle, it is supremely easy to clone or improve on bitcoin’s technology. What is not so easy is to duplicate bitcoin’s established lead in credibility and the large ecosystem of applications that have built up around it.

For now, the regulatory environment remains a free-for-all. China’s government, concerned about the use of bitcoin in capital flight and tax evasion, has recently banned bitcoin exchanges. Japan, on the other hand, has enshrined bitcoin as legal tender, in an apparent bid to become the global centre of fintech.

Bitcoin's price bubble will burst under government pressure

The United States is taking tentative steps to follow Japan in regulating fintech, though the endgame is far from clear. Importantly, bitcoin does not need to win every battle to justify a sky-high price. Japan, the world’s third largest economy, has an extraordinarily high currency-to-income ratio (roughly 20%), so bitcoin’s success there is a major triumph.

In Silicon Valley, drooling executives are both investing in bitcoin and pouring money into competitors. After bitcoin, the most important is Ethereum. The sweeping, Amazon-like ambition of Ethereum is to allow its users to employ the same general technology to negotiate and write “smart contracts” for just about anything.

As of early October, Ethereum’s market capitalisation stood at $28bn, versus $72bn for bitcoin. Ripple, a platform championed by the banking sector to slash transaction costs for interbank and overseas transfers, is a distant third at $9bn. Behind the top three are dozens of fledgling competitors.

Most experts agree that the ingenious technology behind virtual currencies may have broad applications for cybersecurity, which currently poses one of the biggest challenges to the stability of the global financial system. For many developers, the goal of achieving a cheaper, more secure payments mechanism has supplanted bitcoin’s ambition of replacing dollars.

But it is folly to think that bitcoin will ever be allowed to supplant central-bank-issued money. It is one thing for governments to allow small anonymous transactions with virtual currencies; indeed, this would be desirable. But it is an entirely different matter for governments to allow large-scale anonymous payments, which would make it extremely difficult to collect taxes or counter criminal activity. Of course, as I note in my recent book on past, present, and future currencies, governments that issue large-denomination bills also risk aiding tax evasion and crime. But cash at least has bulk, unlike virtual currency.

It will be interesting to see how the Japanese experiment evolves. The government has indicated that it will force bitcoin exchanges to be on the lookout for criminal activity and to collect information on deposit holders. Still, one can be sure that global tax evaders will seek ways to acquire bitcoin anonymously abroad and then launder their money through Japanese accounts. Carrying paper currency in and out of a country is a major cost for tax evaders and criminals; by embracing virtual currencies, Japan risks becoming a Switzerland-like tax haven – with the bank secrecy laws baked into the technology.

Were bitcoin stripped of its near-anonymity, it would be hard to justify its current price. Perhaps bitcoin speculators are betting that there will always be a consortium of rogue states allowing anonymous bitcoin usage, or even state actors such as North Korea that will exploit it.

Would the price of bitcoin drop to zero if governments could perfectly observe transactions? Perhaps not. Even though bitcoin transactions require an exorbitant amount of electricity, with some improvements, bitcoin might still beat the 2% fees the big banks charge on credit and debit cards.

Finally, it is hard to see what would stop central banks from creating their own digital currencies and using regulation to tilt the playing field until they win. The long history of currency tells us that what the private sector innovates, the state eventually regulates and appropriates. I have no idea where bitcoin’s price will go over the next couple years, but there is no reason to expect virtual currency to avoid a similar fate.
 

Author: Kenneth Rogoff

 

Posted by David Ogden Entrepreneur
David Ogden Cryptocurrency Entrepreneur

David – http://markethive.com/david-ogden

Bitcoin Price is Hitting Above $4,500 Again

Bitcoin Price is Hitting Above $4,500 Again

Bitcoin Price is Hitting Above $4,500 Again

Bitcoin price surpassed the $4,500 mark Sunday, reaching $4,614.91 Sunday, posting a market capitalization of $76.662 billion. Bitcoin posted close to a 5% gain in the last 24 hours, during which most cryptocurrencies posted losses.

Ripple and Litecoin were the only other two of the top 10 cryptocurrencies to gain in the period, posting 15.6% and 2.02% gains, respectively. BitConnect, the number 12 crypto with a market cap just over $1 billion, was the only other crypto with more than $1 billion in market capitalization to post a gain, grabbing 4.36%.

Bitcoin commanded more than half of all cryptocurrency market valuation, accounting for 50.03% of all market value. Ethereum accounted for 19.39%, the only other crypto to rank in double digits. Bitcoin had also surpassed the 50% mark earlier in the week.

Bitcoin Stabilizes Crypto Markets

In the past week, the bitcoin price provided the markets with a stabilizing force. Despite falling prey to the mid-week downtrend, the bitcoin price ended the week at $4,335, which then represented a week-over-week gain of about one-half of one percent.

Tuur Demeester, a prominent bitcoin investor, analyst, and editor in chief at Adamant Research, recently predicted the bitcoin price would surpass the $5,000 mark if support towards SegWit2x declines in the next few days. Uncertainty around SegWit2x has held back the momentum of bitcoin and its short-term rally. Several business have pulled out from the SegWit2x NYA agreement and the plan of the Digital Currency Group-led consortium of companies to carry out a hard fork in November.

Since early September, bitcoin’s price has struggled to recover beyond $4,500 due to uncertainty surrounding the Chinese cryptocurrency exchange market and SegWit2x. Analysts have started to demonstrate optimism towards the possibility of the Chinese government resuming cryptocurrency trading.
 

Hyperinflationary Period Over?

Chris Burniske, a partner at cryptocurrency-focused venture capital firm Placeholder and former cryptocurrency investment lead at ARK Investment, recently revealed that 80 percent of the total supply of bitcoin is now outstanding and that its hyperinflationary period is behind it.

Because there will only be 21 million bitcoins and no additional bitcoin can be created after the supply achieves its cap, only a limited number of investors would be able to hold one full bitcoin.

Bitcoin’s deflationary supply, however, is not an issue for investors and merchants that adopt bitcoin as a digital currency because it is divisible. Currently, many bitcoin wallets and merchants use “satoshi” as a unit, with one satoshi representing 0.00000001 bitcoin.

Investors Flock To Bitcoin

Currently, many investors and traders have invested in bitcoin as a safe haven asset and a long-term investment. But, as bitcoin evolves as a technology and a robust financial network, it will soon compete with reserve currencies, existing banking systems, and traditional assets such as gold.

For the long-term growth of bitcoin’s market cap and price, its deflationary nature will be a vital factor to sustain bitcoin’s upward momentum and demand for bitcoin from the global market.

Several analysts, including RT’s Max Keiser, Harvard academic Dennis Porto, and Saxo Bank senior analyst Kay Van-Petersen, have predicted bitcoin price surpassing $100,000 within the next 10 years.

 

Author: Lester Coleman on 09/10/2017

 

Posted by David Ogden Entrepreneur
David Ogden Cryptocurrency Entrepreneur

David – http://markethive.com/david-ogden

Will the Disinflation of Bitcoin Lead to Long-Term Price Surge?

Will the Disinflation of Bitcoin Lead to Long-Term Price Surge

Will the Disinflation of Bitcoin Lead to Long-Term Price Surge?

Chris Burniske, a parter at cryptocurrency-focused venture capital firm Placeholder and former cryptocurrency investment lead at ARKInvestment, revealed that 80 percent of the total supply of bitcoin is now outstanding and that its hyperinflationary period is behind it.

Will the Disinflation of Bitcoin Lead to Long-Term Price Surge

Dissimilar to most currencies and assets, bitcoin is a deflationary currency because of its unique monetary policy. Since its introduction in 2009, bitcoin was structured specifically to operate as a robust and secure store of value, and as an alternative to existing banking systems, financial networks, and currencies.

Two distinct characteristics of bitcoin which sets it apart from bank-issued or operated currencies are its decentralized nature and fixed supply. Bitcoin’s supply is capped at 21 million and consequently, it is not possible for more than 21 million bitcoin to exist.

Disinflation and Decreasing Supply of Bitcoin

Because there will only be 21 million bitcoins and no additional bitcoin can be created after the supply achieves its cap, only a limited number of investors would be able to hold one full bitcoin.

Chris Burniske, a parter at cryptocurrency-focused venture capital firm Placeholder and former cryptocurrency investment lead at ARKInvestment, revealed that 80 percent of the total supply of bitcoin is now outstanding and that its hyperinflationary period is behind it.

bitcoinDissimilar to most currencies and assets, bitcoin is a deflationary currency because of its unique monetary policy. Since its introduction in 2009, bitcoin was structured specifically to operate as a robust and secure store of value, and as an alternative to existing banking systems, financial networks, and currencies.

Two distinct characteristics of bitcoin which sets it apart from bank-issued or operated currencies are its decentralized nature and fixed supply. Bitcoin’s supply is capped at 21 million and consequently, it is not possible for more than 21 million bitcoin to exist.

Disinflation and Decreasing Supply of Bitcoin

Because there will only be 21 million bitcoins and no additional bitcoin can be created after the supply achieves its cap, only a limited number of investors would be able to hold one full bitcoin.

But, bitcoin’s deflationary supply is not an issue for investors and merchants that adopt bitcoin as a digital currency because it is divisible. Currently, many bitcoin wallets and merchants use “satoshi” as a unit, with one satoshi representing 0.00000001 bitcoin.

At the Texas Bitcoin Conference, economist Robert Murphy from the Austrian School of Economics, refuted the criticism of conventional economists that previously condemned the monetary supply of bitcoin. Murphy stated:

“Part of where this fear of deflation comes from is, historically, it’s associated with very bad economies. So, during the Great Depression of the 30s, there were falling prices. And there are other periods where prices fell when things were bad, but I would argue that the causality was the other way around. Partly what was going on there was people were concerned because the economy was so terrible. And, so what do you do when you’re afraid? You don’t want to invest in companies and things like that. You rush to liquidity. You rush to hard money. That’s why you often see in periods of panic people will rush to the money, so you see prices of all other things quoted in money fall. So, it’s not that the falling prices caused the bad economy. It’s the other way around.”

The deflationary monetary policy of bitcoin will only increase the demand for bitcoin in the long-term. As noted by Burniske, already 80 percent of bitcoin’s supply is outstanding and the creation of bitcoin will be limited as years pass, upon the “halving” of miner reward.
 

If Bitcoin’s Current Rate of Growth is Sustained, its Value Will Increase Drastically

Several analysts including RT’s Max Keiser, Harvard academic Dennis Porto, and Saxo Bank senior analyst Kay Van-Petersen have provided a strong case of the bitcoin price surpassing $100,000 within the next ten years. In order for bitcoin to achieve $100,000 in value, its market cap would need to increase beyond $2.1 trillion.

Currently, many investors and traders have invested in bitcoin as a safe haven asset and a long-term investment. But, as bitcoin evolves as a technology and a robust financial network, it will soon compete with reserve currencies, existing banking systems, and traditional assets such as gold.

For the long-term growth of bitcoin’s market cap and price, its deflationary nature will be a vital factor to sustain bitcoin’s upward momentum and demand for bitcoin from the global market.
 

Author: Joseph Young on 07/10/2017

 

Posted by David Ogden Entrepreneur
David Ogden Cryptocurrency Entrepreneur

David – http://markethive.com/david-ogden

Calm Before the Fork – Segwit2x Goes Silent as Bitcoin Split Looms

Calm Before the Fork - Segwit2x Goes Silent as Bitcoin Split Looms

Calm Before the Fork – Segwit2x Goes Silent as Bitcoin Split Looms

"It's sort of like the quiet tension before a battle."

That's how Jean-Pierre Rupp, a developer at bitcoin wallet provider Blockchain, described the current state of Segwit2x development. With the code labeled "production ready," and the work of contributors like Rupp nearly complete, the main step left is the activation of the code, scheduled for late November.

That's when the next stage of bitcoin's scaling debate, as they say, will come to a head.

First proposed at a private meeting of industry players in May, Segwit2x was intended to forge a compromise in bitcoin's long-raging scaling debate. Still, it has attracted opposition, primarily for its approach to upgrading the bitcoin software. Chief among concerns is its use of a hard fork to increase the block size, a contentious mechanism due to the fact it could result in the creation of two competing bitcoin assets, or perhaps a single one that no longer interests a certain portion of users.

While Segwit2x's proponents and detractors permeate social media channels, there's been comparatively few statements from the group working on the software.

To that point, CoinDesk has observed little activity on the Segwit2x mailing list and GitHub (the level of code changes pales in comparison to other active cryptocurrency projects, even smaller ones such as MimbleWimble or btcd).

But this is by design, according to project developers, who say if no problems are detected, the only thing left to do is wait for the big day.

Rupp told CoinDesk:

"Nothing is really being done at the moment until the fork date. As the most recent document that we published states, we are in a quiet period. We aren't discussing much about the direction of development afterwards, nor being too active on the technical front until the fork happens in November."

Small stirrings

While it's primarily a waiting game now, that's not to say some testing isn't being done to make sure everything will go smoothly.

While there's no additional feature development going on, according to Segwit2x project lead and BitGo co-founder and CEO, Mike Belshe, tests are ongoing to verify the software's compatibility with existing bitcoin libraries and applications.

Rupp provided evidence of this, saying he's reviewed the portion of the code set to activate the hard fork. In addition, he said he's been running a "faucet" – one that spills out test coins so users can see what making transactions will be like on a network upgraded to Segwit2x's rule set.

Rupp has given away more than 3,500 coins which have been used to make about 5,000 transactions on the testnet. Still, it's unclear how many and which developers are using the faucet for testing, especially since some Segwit2x developer proponents have since stepped back from the project.

OpenBazaar lead developer Chris Pacia said he's been "a little out of the loop" recently. And RSK Labs developer Sergio Demian Lerner, despite being the author of the proposal that inspired Segwit2x, simply stated in an email: "I'm not involved in Segwit2x now."

Other known participants declined to comment or did not respond to requests for comment.

Partisan lines

Still, there may be good reasons for the lack of Segwit2x developer and company dialogue. In bitcoin, the proposal has become a black-or-white issue, and there may be little that can be done to change the minds of those on either side.

As the bitcoin blockchain has grown, there are some who want to keep transaction fees low to attract consumers (or businesses seeking to offer services to those consumers), and those who want to keep them high (so the costs of storing a full record of all transactions doesn't become prohibitive).

When speaking to developers, there remains staunch support along partisan lines.

John Heathco, a developer who recently contributed to Segwit2x, said he believes there's still "a lot of community support" for increasing the block size parameter as a way to improve network capacity.

"The majority of individuals just want to be able to use bitcoin without paying ridiculously high fees," he argued.

Historical data from Statoshi.info shows that fees have indeed grown over time, but only gradually over the last couple of years. (In October 2015, the average transaction fee was 55 satoshis per byte, though it has been as high as 410 satoshis per byte earlier this year, before dropping again to 120 satoshis per byte).

Others believe Segregated Witness (SegWit), a code change that went live on the network in August, will eventually reduce fees (and provide other suitable options of allowing low-cost transactions).

Already, companies such as BitGo and GreenAddress, among the earliest wallet providers to adopt SegWit transactions, report fees are now about half the cost of normal transactions.
 

Measuring sentiment

Still, users and companies, it seems, are slow to migrate.

Though 144 companies claim they will eventually update to support SegWit, at press time, the percentage of transactions using SegWit is growing slowly, and still in the single digits. Whether because they are uninterested in adoption or unwilling to, it seems, Segwit2x proponents are keen to use the statistic to argue that SegWit doesn't go far enough.

Yet another fault line is just whose opinion matters in the debate, with developers often echoing the idea that "users" and the "community" have already rejected the proposal.

"Most people, as far as I know, don’t intend to follow it," said developer James Hilliard, a notable critic of the Segwit2x agreement.

However, the comments mostly point to the lack of resources that can measure the issue, with informal Twitter polls often serving as "evidence" of broader sentiment.

As for the actual parties to the agreement, while a few signatories have backed out, most major miners and 56 companies claim to support the proposal. Still, there is disagreement over whether the opinion of miners and startups should dictate course.

Though less public now about their plans, it seems the companies and developers behind the effort aren't inclined to weigh in either. Most, it seems, are content to use the silence to their advantage as a way to avoid further backlash, or at least enjoy a moment of calm ahead of what could be a fierce debate ahead.

Oct 6, 2017 at 08:01 UTC by Alyssa Hertig

 

Posted by David Ogden Entrepreneur

David – http://markethive.com/david-ogden