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Bitcoin-Ethereum Flippening Fervor “Makes No Sense,” Claims Vinny Lingham

Bitcoin-Ethereum Flippening Fervor “Makes No Sense,” Claims Vinny Lingham

    

Both bitcoin and ether prices fell today,

putting off what many traders consider inevitable—the “Flippening.” The Flippening, of course, refers to the potential future date when Bitcoin could lose its status as the largest cryptocurrency by market cap. Many coins have tried to usurp Bitcoin through technical innovations, corporate partnerships, and marketing strategies, but Bitcoin has continued to reign supreme.

Only recently has the Flippening become a real possibility. As the ether price has surged to a high of more than $400, Ethereum has become the first cryptocurrency to get within striking distance of Bitcoin’s market cap. Many crypto-pundits have begun to ponder what will happen if the Flippening does occur. Will it be the beginning of the end for Bitcoin? Will the Ethereum platform finally take the blockchain mainstream?

The Flippening “Makes No Sense”

Others, such as Gyft co-founder and Civic CEO Vinny Lingham, believe those questions are meaningless and irrational.

As he stated on Twitter:

Bitcoin is better money, deflationary & scarce. Ether is not really money, inflationary & abundant. The flippening makes no sense[.]

What Lingham’s tweet alludes to is that, strictly speaking, Bitcoin and Ethereum are not competitors. Bitcoin is designed to function as a currency (which is why Bitcoin nodes validate addresses), while ether is meant to serve as fuel for Ethereum’s decentralized smart contracts platform; this is why the developers of Ethereum refer to ether as a “token” and advise it is not intended to be used as a currency. However, that warning has not stopped people from treating ether like a currency.

Lingham notes bitcoin derives its value from its scarce and deflationary nature. Ether, in contrast, is inflationary. Ether issuance is capped at 18 million per year (the move to Casper should decrease that number further), so the rate of inflation will decrease every year, but the token will remain inflationary to some degree. Ether’s inflationary nature has proved unpopular with some Bitcoin proponents, many of whom were first attracted to cryptocurrency because of Bitcoin’s “digital gold” nickname. Flippening numbers on Thursday.Additionally, as Lingham points out, there are already far more ether in circulation than bitcoins (~92.5 million ETH to ~16.4 million BTC).

What is Money?

Lingham’s tweet triggered a litany of replies (more than 130 at the time of writing). Lightning co-founder Elizabeth Stark ascribed the Flippening to short-term ether speculation. She stated that “Users and real use cases are what will matter,” not short-term market cap rankings.

Before long, the thread had devolved into arguments about the fundamental nature of money. BitPoint CEO Aaron Foster, for instance, argued that Ethereum will surpass Bitcoin’s market cap and that to deny that ether is money is “stupid,” even though Ethereum nodes do not validate addresses. “What is money?,” he asked. Olivier Janssens rejected the assertion that Ethereum cannot serve as a store of value.  Others compared ether to the U.S dollar (both favorably and unfavorably) and pushed back against Lingham’s assertion that deflation is a positive attribute for a currency to have. In any case, the Flippening frenzy should serve has a reminder that no matter how technologically-advanced humanity becomes, it will likely never reach consensus on one of the society’s most fundamental questions: “What is money?”

Chuck Reynolds


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It’s a Cryptocurrency Bloodbath

It’s a Cryptocurrency Bloodbath

 

    

The market correction that a number of analysts have predicted

has hit, with leading cryptocurrencies losing in double digits in the last 24 hours. Market leaders bitcoin and Ethereum were not among the biggest losers, dropping 12.81% and 16.04% in the last 24 hours, respectively, but their market cap losses were in the billions, falling to $37.4 billion and $28.9 billion, respectively.

Ripple, a distant number three in market capitalization at just under $10 billion, lost over 12%. NEM, number four, lost over 17%, while Ethereum Classic, number five, lost 13.77%. Litecoin, number 6, suffered the least among thbillion-dollarar players, losing just over%. Eighth placed IOTA was the biggest loser among the cryptocurrencies with more than $1 billion in market capitalization, falling 36.5% when its price fell to $0.38.

Survivors A Few

All top 100 cryptocurrencies tumbled in the last 24 hours, according to marketcap.com, except for four: Quantum Resistant Ledger, the number 41 cryptocurrency with $81.4 million market capitalization, jumped 19.43%; LBRY Credits, number 57, posted an 18.24% gain; Xarum, number 62, gained 10,4%, and ZCoin, number 69, gained 9.58%. The correction that began Monday continued after a breather yesterday, as bitcoin failed to launch a new rally towards all-time highs and rolled over after the bounce. Correlations are high once again, as is usual for a correction, and it’s likely that bitcoin and Ethereum will dictate the trend of the coming days, with small cap coins following the majors lower.

Further Losses Expected

Bitcoin continues to trade near its lows from Monday, and it will likely head for a test of the $2375 level, as it clears its overbought momentum readings. The rising long-term trendline is found near $2200, providing further strong support. The long-term picture remains bullish, but there is room for further correction after the strong rally since the end of March.

A 30%-50% correction, that has been the normal for bitcoin in the past, is a huge psychological burden that makes a panic sale likely, usually just before the bottom. Because of this, buyers are advised to wait for the correction and oversold readings, even for those planning to buy it at a higher price later on. Analyst Nicola Duke of Forex Analytix predicted hefty price corrections for both bitcoin and Ethereum in late May. Duke said bitcoin could experience a 46.5% price correction at $2,800 after witnessing a record $2,791.70 high in late May. After reaching $2,800, Duke predicted it would fall and reach as low as $1,470, marking a 46.5% drop from the late May price.

Duke expects the correction to be temporary, with the price recovering, and continue its upward movement through 2018. An analysis called the Fibonacci retracement examines the peaks through different periods of up and down movements to determine future asset prices. In “wave two,” in the fall of 2013, bitcoin bottomed out in January 2015 before rebounding for several months and then declining again. It rebounded again in January of 2015. Duke said bitcoin is now in a third wave.

Recovery Expected

Duke expects the fourth wave will see bitcoin stay at 61.8% of the time the second wave lasted. This means the rally following the correction will begin in January. Short-term traders are advised to wait until the correction runs its course and the short-term trend turns higher again, while long-term investors should prepare to add to their holdings heading towards the targets of the move, and buying opportunities emerge. This holds true for long-term investors who plan on holding on to the coins and adding to their core holdings on the dips. Short-term traders should still wait for the short-term trend to turn higher before buying.

Chuck Reynolds

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India Hits 10 Percent Of Global Monthly Bitcoin/Dollar Trades

India Hits 10 Percent Of Global Monthly Bitcoin/Dollar Trades

    

India contributed more than 10 percent of last month’s USD/BTC trade volumes

according to data from ARK’s Blockchain Products Lead Chris Burniske. Reproducing a graph of major trade markets via Twitter on Thursday, Burniske highlighted India’s growing role in the exchange market, which accounted for over 10 percent of the total for the month to June 15.

Burniske added he was “curious” what this would mean for Bitcoin going forward. India’s story of consumer trading activity is one of constant growth. Despite mixed signals given out by the country’s central bank and government figures, increasing uncertainty surrounding the rupee has given Bitcoin a firm foothold among Indian investors seeking a safe haven.

Marketplace data from Coin Dance shows a broad upward trend week on week, a recent surge linked to Bitcoin’s brief downturn at the end of May, which saw prices dip below $2,000. Individual Indian Bitcoin exchanges preempted the positive figures, Zebpay reporting milestone downloads of its app, helping it reach number seven on Apple’s App Store in the local financial category. India’s banking industry, meanwhile, is also waking up to the benefits of Blockchain technology, having successfully piloted a joint scheme known as “Bankchain” last month.

Chuck Reynolds


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COs “High On Radar” Of US SEC – Regulator Source

COs “High On Radar” Of US SEC – Regulator Source

    

As markets wait for the US Securities and Exchange Commission

(SEC) to address ICOs, a source has confirmed that ICOs remain “high on their radar.” Quoted by Reuters on Wednesday, a regulator who asked to remain anonymous confirmed the Commission was eyeing the wildly popular fundraising instrument. “I know that this is something that’s high on their radar,” the source confirmed.

The speed and unprecedented success of ICO campaigns have brought both joy and sorrow to cryptocurrency and Blockchain investors. Such are the sums involved in the now $90 bln market that many began fearing early on that it would not be long before regulators became involved. “It's like painting a target on yourself. Because, what does an organization like the SEC regulate? They regulate IPOs,” Coin Center’s Peter Van Valkenburgh told a recent conference panel.

In a guidance Van Valkenburgh published with Coin Center in May, he had noted US authorities should give more concrete statements regarding the legal status of ICOs. “FinCEN should clarify that certain token sales are not currently subject to regulation under the BSA,” he wrote. “Should there be a desire to regulate these activities, FinCEN must engage in a formal rulemaking.” Recent examples of ICOs notably include Bancor, which needed less than four hours to raise $153 mln in its sale on June 12.

Chuck Reynolds


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Microsoft’s Buchner: Bitmain “Has Zero Clue” About Decentralization

Microsoft’s Buchner:
Bitmain “Has Zero Clue” About Decentralization

    

Microsoft’s Head of Decentralized Identity

Daniel Buchner has said Bitmain “has (zero) clue what decentralization means” in the Bitcoin ecosystem.

In a series of eight tweets highlighting a section of the pro-Bitcoin Unlimited miner’s blog post on a Bitcoin hard fork, Buchner said the material “reveals” its lack of understanding of the core principle. “Dissecting the section of Bitmain's latest post where they reveal they have 0 clue what decentralization means within this ecosystem,” he wrote. Subsequent comments explained Buchner’s criticisms in more detail. Bitmain’s claim that the large number of people “using Bitcoin as a saving currency and payment network” has nothing to do with decentralization, he says, using an analogy with fiat currency, credit card networks and PayPal.

“…Hundreds of thousands of people, apps, and services use PayPal – this doesn't mean PayPal is a decentralized payment network,” he wrote. The Microsoft figure is known for his UASF support and has previously come out against the plans for Bitcoin put forward by Bitcoin Unlimited advocates. A raft of commentators has risen to defend UASF following Bitmain’s post, with businesses such as Bitsquare especially active in decrying the detrimental effect on the network.

Chuck Reynolds


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Coinbase Freezes $40k Ross Ulbricht Funds As Rumors Fly

Coinbase Freezes $40k Ross Ulbricht Funds As Rumors Fly

    

Coinbase has disabled a wallet used by the action group

working to free imprisoned Silk Road creator, Ross Ulbricht. Reports from members of the Free Ross campaign and other community sources allege that a wallet used to ‘pay lawyers’ was frozen after receiving a payment of 16.5 BTC ($40,200) on Thursday. After the event was reported, community members were quick to offer assistance, with Abra’s John Light appearing to collude with Free Ross in order to resolve the situation. The block marks the latest headache involving Coinbase and the law: the exchange and wallet provider’s battle with the U.S Internal Revenue Service (IRS) is still ongoing.

Suggestions of foul play soon surfaced in the press and from veteran Bitcoiner Brian Hoffmann, which centered around the fact Coinbase had only recently appointed a federal prosecutor, Kathryn Haun, to its board of directors. Haun was involved in unveiling corrupt secret service agents’ involvement with Bitcoin, but had no direct involvement with Ulbricht’s sentencing, leading respondents to call Hoffmann’s allusion ‘extremely misleading.’ Coinbase meanwhile is facing trouble on several fronts, with its user base already alienated following widespread outages in recent weeks. The impact on traders included funds missing and slow transactions, leaving many unable to take advantage of market price swings. Free Ross subsequently confirmed the receival of a further donation totalling 4 BTC ($9750).

Chuck Reynolds


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First Look: Bitcoin Scaling Proposal Segwit2x Gets Alpha Release

    

The working group behind the Segwit2x bitcoin scaling proposal

has announced that the first version of its code is now ready for review and testing. As such, the release provides the market with a first look at the technology underlying one of the most broadly supported bids to enhance the network. Announced in May as an "agreement" that united miners and startups, Segwit2x is an alternative technology roadmap to one proposed by Bitcoin Core, the network's open-source developer group.

It has since emerged as a frequent subject of praise, criticism and discussion. However, in what could be a promising sign, Segwit2x could become a moderate option that helps to avoid a contentious network split, and it looks like it could end up being somewhat compatible with an alternative proposal, the user-activated soft fork (UASF) BIP 148, which, as coded, will activate on 1st August.

The news is notable because earlier this week any compatibility between the two proposals seemed less likely – a discordance that raised fears of a split of the blockchain into two competing assets. The development became apparent on Wednesday, when bitcoin developer James Hilliard submitted a change request, along with a code change that would reduce the time it takes for mining pools to lock in the update.

On GitHub, Hilliard said:

"This should reduce the chance of a conflict with BIP 148."

By reducing that time, mining pools will have one (or maybe two) three-day periods in which they can lock-in a controversial code change called Segregated Witness (SegWit) by signaling support using the SegWit2x software before the UASF occurs on August 1st. Though, it's unclear if mining pools will decide to do so. The request was well-received, being met with several 'ACKs' – developer shorthand for 'agreed', and a sign of approval.

Firmer timelines

The alpha release of SegWit2x includes a working version of the software, which combines two changes, the scaling optimization SegWit and an increased 2MB block-size parameter. The increase to 2MB is now scheduled for three months after SegWit activates, according to an email from BitGo CEO Mike Belshe. Prior to this, it's been less clear (even to some SegWit2x participants) when the 2MB hard fork would take place. "Segwit2x development has been moving quickly according to plan, and the project is in good shape," Belshe said, in the message to the working group.

The 2MB block size has long been a point of contention, partially because it could lead to a blockchain split if not everyone agrees to upgrade to the new blockchain code. Further, some in the industry have already suggested they don't plan to. However, SegWit2x has won the support of most major bitcoin companies and mining firms, in total representing over 80% of bitcoin's hash rate. (Though it remains unclear how reliable this support will be owing partly to fatigue around the issue). With the alpha version out, the wider community now gets to review and test the software. The release also includes a new bitcoin testnet that developers can use to put the software through its paces and identify any bugs.

Testing phase

Developers can trial the software using the new test network, called testnet5, for the next two weeks. "We are planning to conduct rounds of testing against the new testnet5 including everyone from the working group who would like to participate," BitPay senior developer Justin Langston said in another email to the working group. The plan for these rounds is to simulate the code's deployment lifecycle, from signaling support for SegWit to activating the 2MB block-size parameter. These rounds of testing and review are aimed to help avoid any future network problems, such as, in a worst-case scenario, the loss of users' bitcoin.

In the email, Langston wrote:

"My perspective is limited. We need your feedback on what tests would be essential for your company to adequately assess applicable risks and be prepared to deploy on livenet, signaling accordingly, when the time comes."

Security loose ends?

Feedback on SegWit2x's  plan has already been rolling in. One working group participant argued there is potential for 'replay attacks' in the event of a hard fork. Replay attacks, in the event of a split leaving the community with two bitcoin tokens, could allow users to accidentally spend their bitcoin on both networks. This confusion happened last summer when ethereum split into two coins, leading some companies to lose money. The participant argued that protection from this confusing and potentially dangerous issue is needed within Segwit2x's code.

Some Bitcoin Core developers have also criticized Segwit2x's development timeline as being too short, because it often takes a significant amount of time to catch all errors associated with bitcoin code changes. SegWit itself was tested for over a year before it was launched. So far, though, SegWit2x developers haven't skipped a beat, saying the project will continue to move forward along the original timeline, with the beta release scheduled for 30th June. On 21st July, users will be able to run and signal the fully vetted software, according to the group.

Chuck Reynolds


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Bitcoin and Ethereum Just Crashed, Taking Coinbase Down With Them

Bitcoin and Ethereum Just Crashed, Taking Coinbase Down With Them

 

    

After both hit all-time highs earlier this week, Bitcoin and Ethereum prices

plummeted as much as 25% Thursday — but many investors were unable to trade for much of the selloff. Coinbase, a leading cryptocurrency exchange, confirmed that it was completely offline by 9:35 a.m., though the outage appears to have begun several hours earlier, with investors reporting problems on Twitter throughout the night. The company blamed "sustained heavy traffic," likely caused by intense Bitcoin and Ethereum trading, for crashing the Coinbase website and mobile app, which remained completely down for at least four hours.

As has become a familiar frustration to blockchain enthusiasts in recent days, Coinbase went offline at the worst possible time, just as extreme price swings in the cryptocurrencies made investors desperate to buy or sell. Around 10 a.m. Thursday, the Bitcoin price fell as low as $2079, a more than 30% drop since breaking the $3,000 milestone last weekend (and a 19% decline in the previous 24 hours alone). At the same time, Ethereum, a rival cryptocurrency whose eye-popping 40-fold gain this year has far outpaced Bitcoin's returns, was down as much as 25% from its price a day earlier. The Ethereum price dipped below $274, just three days after it traded above $400 for the first time.

Coinbase had a similar outage in late May while Bitcoin was trading at record highs, illustrating that new systems for trading blockchain currencies are not yet as reliable as traditional stock market exchanges — a lesson a number of investors were learning the hard way, based on their tweets. (While Coinbase initially said it had restored full access to the exchange by mid-afternoon Thursday, it was still trying to repair service for at least some users after 5 p.m., according to a status report on its website.)

Bearish comments by influential investors have triggered several recent selloffs in Bitcoin and Ethereum, such as when Mark Cuban said he thought they were "in a bubble" last week. Morgan Stanley likely contributed to this week's declines by publishing a couple of research notes casting doubt on whether the surge in cryptocurrency prices is justified. "Market likely getting ahead of itself as we have not seen exponential rise in use case yet, but value is rising exponentially," Morgan Stanley analysts wrote in a note Wednesday.

That followed an even more skeptical research report the bank released a day earlier titled "Blockchain: Unchained?" "The rapid appreciation of Bitcoin and others is somewhat surprising in light of some developments that seemingly would have put downward pressure on the currency," another group of Morgan Stanley analysts wrote, citing the SEC's rejection of a Bitcoin ETF, among other factors. "Their values are too volatile and too hard to actually use for payment for most to consider them currencies," they added. The cryptocurrencies’ prices bounced back later in the day. As of 6 p.m. Thursday, Bitcoin was down less than 3% and Ethereum was down just under 8% over a 24-hour period.

Chuck Reynolds


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World’s First Blockchain Insurance Marketplace To Launch Ambitious ICO

World’s First Blockchain Insurance Marketplace To Launch Ambitious ICO

  

The world’s first Blockchain-based insurance marketplace,

InsureX, is set to launch an ICO in July 2017 in a bid to raise at least 2200 ETH. The first in a large number of token sales set to launch in the next few weeks, London-headquartered InsureX intends to use the funds to create a trading platform specifically for insurance products.

“Blockchain technology presents an exciting opportunity to disrupt the insurance industry,” CEO Ingemar Svensson said in a press release Thursday. Citing Allianz insurance data, he continued: “Preliminary estimates are that gross written premiums generated by insurers contribute 3.5 trillion or 5.7 percent of the global GDP – that is a massive opportunity.”

In addition to finding products themselves, InsureX will offer a secure exchange of confidential documents and other data on the platform, which operates in the Software-as-a-Service (SaaS) format. The insurance industry is already slated for change, thanks to Blockchain solutions with products such as IBM Blockchain built on a hyperledger seeking to streamline common processes.

“Currently, insurance is traded and processed in traditional ways, often manually and with layers of intermediaries,” Svensson continues. “As part of the typical insurance deal, a large amount of documents and data have to be exchanged, which in a manual system introduces cost, delays and errors to the process.” The ICO will go live on July 11, with IXT tokens initially sold at an ambitious rate of 1.125 IXT per ETH, increasing to 1.757 per ETH as the sale continues through until July 31.

Chuck Reynolds


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U.S Judge Upholds Vote To Confiscate Family’s $80mln Gold Coins

U.S Judge Upholds Vote To Confiscate Family’s $80mln Gold Coins

 

The family who found ten gold coins allegedly worth $80 mln

has again lost the battle to stop the US government confiscating them. Acc Mag reported on Wednesday June 14 that Judge Legrome Davis of the Eastern District Court of Pennsylvania upheld the position of the state: the coins originally belonged to the state, therefore the discoverers would not be offered compensation.

The story is a timely reminder about the lack of control over state-issued means of exchange in an age where decentralized assets are flourishing. Ten 1933 Saint-Gaudens double eagle coins were found by the Langbord family, descendants of a U.S cashier, locked in a safety deposit box. Originally coined by the Philadelphia Mint, most were destroyed when the US abandoned the gold standard. However, the few that have slipped through the net have fetched huge sums; in 2002 an identical coin went for $7.5 million at auction.

Nevertheless, when the cache was handed over to the Mint for verification, lawmakers said that they were originally illegally removed from circulation and therefore still belonged to the state. The Langbords have appealed the original decision from 2011 several times without success, yet will continue to challenge the ruling after their latest setback. Cryptocurrency’s rise has seen attempts to increase state control of its value in recent months. The European Union, for example, is attempting to pass legislation obliging wallet holders of Bitcoin and other assets to link these to their real identity.

Chuck Reynolds


Marketing Dept Contributor
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