Category: bitcoin

Bitcoin Price Goes Over $5,800, Setting a New All-Time High Record in Less Than 24 Hours

Bitcoin prices surged past the $5,300 mark on Thursday, closing at $5,363 — only to reach a new all-time high value at $5,856.10 some time early Friday morning, after markets had opened at a $5,439.

The increase in value comes after Russia banned Bitcoin and expressed interest in rival Ethereum. The Russian ban followed previous moves against cryptocurrencies by South Korea and China, which included prohibiting initial coin offerings (ICOs). The market, it would seem, finally got over the fears incited by these moves.

bitcoin-price-surge-coindesk
Image credit: Coindesk

At the time of writing, revitalized Bitcoin is now at $5,714.95 marking a more than 13 percent increase in value in less than one day, and an over 30 percent increase in just one week. It isn’t the only cryptocurrency benefitting from the price surge, as the overall cryptocurrency market cap peaked at $171.94 billion early Friday morning — almost reaching a high comparable to that of September 1, when it reached $172.5 billion. Bitcoin, which makes up more than 55 percent of the whole crypto market, capped at $95.5 billion today (Friday, Oct 13).

Cryptocurrencies are no stranger to fluctuations in prices, which critics are always quick to note. Experts say crypto is destined to be more than a fad however, and that Bitcoin’s popularity will herald a bigger blockchain revolution. Whatever the case may be, experts expect Bitcoin to go as high as $6,000 by the end of the year, and over $10,000 by the first half of 2018.

Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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After Falling in September, Bitcoin Breaks Previous Records

Bitcoin is back in a big way. After a few tumultuous weeks caused by some intense government regulation from states like China and South Korea, and fears of impending bans in Russia, Bitcoin has been able to rally and surpass its previous record value established in early September.

Prices soared to $5,314.06 at the point of writing, beating the previous record of $5,013.91. Prices were expected to take a dip after the cryptocurrency hit the $5,000 point as some investors likely had sell orders placed for that milestone. However, China’s announcements about the temporary ban followed by other developments played a major role in the tumult that followed.

Image credit: CoinDesk
Bitcoin’s value is taking a wild ride. Image Credit: CoinDesk

Bitcoin prices have achieved 424 percent growth since the beginning of the year, proving that the cryptocurrency is particularly resilient, contrary to some assumptions.

Bitcoin could be back on track with its meteoric rise. Experts seem to be unphased by the rollercoaster changes of the past few weeks. Speaking during CNBC’s Fast Money segment, former Fortress Investment Group hedge fund manager turned cryptocurrency investor Mike Novogratz predicted that Bitcoin will reach heights above $10,000 in the next six to ten months.

The cryptocurrency market is anything but stable. There is no definitive way to predict how it will perform in the coming days, let alone weeks or months. Still, whether crypto is a bubble or not, there’s no doubt that it is disrupting the financial sector.

Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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Latest Prediction Puts Bitcoin at $10k by April 2018

As Bitcoin prices remain stable, experts predict a continued increase in value. In a recent interview featured in CNBC‘s “Fast Money” segment, former Fortress Investment Group hedge fund manager turned cryptocurrency investor Mike Novogratz said the rise in value isn’t likely to stop any time soon.

“I’m pretty confident to say it’s going higher,” he said on Wednesday, adding that “It would not surprise [me] if in the next six to 10 months we’re over $10,000.” Just last week, other experts predicted bitcoin prices would reach $6,000 by the end of the year, though still warning against volatility.

Indeed, many have pointed out that cryptocurrencies tend to be unstable. For Novogratz, however, this volatility is normal. “Yes, it’s a bubble, it’s going to be one of the great manias of all time,” he explained. “Bitcoin happens to be the bellwether of this entire decentralized revolution, so it’s the easiest way people get gain exposure to it. […] Things like Ethereum I think will be the public utility of this new space.” This blockchain revolution, he added, would “change the way we live.”

Despite fears of a dip in prices due to Russia’s cryptocurrency ban, recent numbers show that bitcoin prices have stayed at the upper $4,000 mark after closing at another all-time high on Monday. The Russian ban comes after China and South Korea made similar moves against cryptocurrencies and initial coin offerings (ICOs).

Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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Harvard Professor: “In the Long Run, the Price of Bitcoin Will Collapse”

Futures Market

This summer, the total value of the bitcoin market reached $160 billion, almost 10 times what it was at the beginning of 2017. Now, a leading economic expert is warning investors that while cryptocurrencies may very well be the financial wave of the future, the value of bitcoin will collapse eventually.

Kenneth Rogoff is a professor of economics at Harvard University, and from 2001 to 2003, he served as the chief economist of the International Monetary Fund. In an opinion piece published by The Guardian this week, he praises the technology underpinning bitcoin, but says he believes too many factors are working against the currency for its value to continue to increase indefinitely.

In the article, he argues that bitcoin evangelists who expect the currency to become ubiquitous are just setting themselves up for disappointment.

“It is folly to think that bitcoin will ever be allowed to supplant central-bank-issued money,” wrote Rogoff. “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.”

Bad for Bitcoin

Bitcoin was once the only cryptocurrency with any real cachet, and it’s still the most popular. However, a variety of competing alt-coins and tokens have emerged in recent years, with the likes of ether and ripple quickly establishing themselves within the crypto market.

External competition isn’t the only reason Rogoff believes bitcoin will collapse, though. According to the economist, governments could end up crippling the currency’s value if the current “free-for-all” crypto landscape changes too much or too quickly. He holds the opinion that regulation is unavoidable, as governments are going to want to keep an eye on transactions to cut down on tax evasion and other crimes.

Rogoff points to Japan as an example. Bitcoin is already very popular in the Asian nation, and it appears set to grow even more so thanks to relaxed regulation. However, if the country decides to draft and enforce new legislation or if its banks are successful in their attempts to create an alternative cryptocurrency, bitcoin’s value could suffer.

Rogoff doesn’t say when bitcoin will collapse, though, so actually taking action based on his prediction is futile. Meanwhile, other experts have shared far more concrete predictions for bitcoin’s future, and many of those are also far more optimistic.

Ronnie Moas of Standpoint Research believes bitcoin’s value could reach $20,000 in the next three years, while veteran trader masterluc has predicted that bitcoin will be worth $15,000 before the end of 2017. As for regulations having an impact on the crypto’s future value, economists at the central bank of Finland believe blockchain technology is self-regulating and that governments likely couldn’t regulate it even if they wanted to.

Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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Russia Moves to Block Cryptocurrency Exchanges

No Crypto in Russia

Russians looking forward to incorporating cryptocurrencies like Bitcoin into their lives awoke to less-than-stellar news Tuesday morning, as Russia now intends to block cryptocurrency exchanges and the websites that offer them.

As reported by Reuters, Central Bank First Deputy Governor Sergei Shvetsov called cryptocurrencies “dubious” during a conference in Moscow. He went on to add that digital currencies like Bitcoin and Ethereum are something people shouldn’t be able to easily access.

“We can not stand apart. We can not give direct and easy access to such dubious instruments for retail (investors),” said Shetsov. According to CoinTelegraph, the deputy governor further backed up the decision, saying financial instruments based on digital currencies are nearly impossible to support; additional regulations would need to be put into place to prevent the Russian domestic market from dealing in cryptocurrencies.

As for the ban’s effect on digital currencies, CNBC reports that Bitcoin experienced a $600 drop in value around the same time as the announcement, though it quickly recovered soon after.

Yet Another Ban

Russia’s decision comes after China and South Korea imposed similar bans on cryptocurrencies and initial coin offerings, though China’s is said to be temporary. For Russia, specifically, it comes as a bit of a surprise. It was only last month that the country struck a deal to create Ethereum Russia, and soon after, Finance Minister Anton Siluanov stated plans were in the works to legalize cryptocurrencies.

How the US Can Fight Russian Cyberattacks?
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“The state understands indeed that crypto-currencies are real. There is no sense in banning them, there is a need to regulate them,” said Siluanov at the time.

The ban may only be temporary considering these plans, and may have only been enacted until proper regulations are put forward later this year. If the ban is permanent, however, it will be yet another market digital currency has lost a foothold on, and another potential setback to the currency’s worldwide adoption.

 

Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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Schools Are Officially Accepting Bitcoin for Tuition

Using Bitcoin for Tuition Payments

Bitcoin has been used to buy homes, and countries like Venezuela and Vietnam are beginning to truly embrace the currency. Now, certain universities are adopting the payment method of bitcoin for tuition, albeit with a few caveats.

The Lucerne University of Applied Sciences and Arts in Switzerland announced the decision to accept bitcoin payments this week, saying it is an indication of “its ability to disseminate knowledge on cutting-edge technologies such as blockchain, as well as its desire to gain experience in the practical aspects of this novel area.” The university offers courses focused on financing, economics, music, and more, meaning it was really only a matter of time before it invited bitcoin inside its walls.

Lucerne doesn’t handle the bitcoin transactions, instead entrusting all bitcoin payments to processing firm Bitcoin Suisse AG. The company will use a banking system similar to an e-banking portal, enabling the school to accept the digital currency without having to maintain possession of it. Bitcoin payments are converted into Swiss francs once a week, or once a day if more than 10,000 Swiss francs are acquired.

The Entire History of Bitcoin in a Single Infographic
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“Bitcoin Suisse AG bears the risk of any exchange rate losses and currency fluctuations,” explains Lucerne.

Students who use bitcoin for tuition will incur a 1% payment fee, which Bitcoin.com notes is much less than traditional payment fees. Lucerne doesn’t expect many of its students to pay with bitcoin initially, but believes those who understand the currency will be among the first to take advantage of the option.

“Those most likely to avail themselves of this opportunity will either be already familiar with the concept of financial services and blockchain or interested in pursuing continuing and executive education opportunities in this subject area,” the university added.

Expanding Curriculum

According to Bitcoin.com, Lucerne isn’t the only university that’s started to accept bitcoin. Last December, business school ESMT Berlin became the first German university to accept the cryptocurrency as payment, calling it “the most well-developed blockchain application.” Even earlier than that, The University of Nicosia in Cyprus announced that it was the first school in the world to adopt bitcoin in 2013, while King’s College was the first U.S. college to do so in 2014. Despite these colleges’ efforts, many people are unfamiliar with cryptocurrencies and how they work. As a society, we’re a long way out from being to use them for all of our transactions.

As bitcoin and other cryptocurrencies become more popular and widely accepted, expect to see universities around the world to not only accept them as payment, but also introduce courses focused on blockchain technology. As reported by CoinTelegraph, the financial industry has a large demand for people with blockchain expertise, but the supply currently isn’t there. Fortunately, universities in the U.S., Europe, and Russia have incorporated such courses, including Duke University, Princeton University, UC Berkeley, the aforementioned University of Nicosia, and the National University of Science and Technology.

Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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Goldman Sachs Is Considering Ways to Facilitate the Trading of Cryptocurrencies

Banks and Bitcoin

Goldman Sachs is considering ways to incorporate bitcoin and other digital currencies into their trading operations, according to people familiar with the banking company’s plans.

Those sources tell The Wall Street Journal that the development is still in its earliest stages and was inspired by client curiosity. “In response to client interest in digital currencies, we are exploring how best to serve them in this space,” a Goldman Sachs spokeswoman told the WSJ.

According to the WSJ, Goldman Sachs intends to serve their own investors who have bet on bitcoin to be the next big thing. If done properly, their operation could lead to the creation of new markets that operate in much the same way as the markets used to buy shares in a company. Being the first to create such an operation would also put Goldman Sachs in a prime position to further expand the market.

“The smartest Wall Street firms have an opportunity to lead the market in offering financial services to the burgeoning cryptocurrency industry,” Matthew Goetz, CEO of cryptocurrency investment firm BlockTower Capital and former Goldman Sachs vice president, told CNBC. “I think it behooves the smart and more forward-thinking firms to be involved in cryptocurrency, given the number of new services and business lines that will stem from it as this important new industry continues to build and institutionalize.”

New Markets

Goldman Sachs isn’t the first financial institution to explore blockchain technology, nor is this the first time they’ve expressed interest in it — they even have a page of their website dedicated to explaining the tech. However, they are the first blue-chip Wall Street firm to consider facilitating the trading of cryptocurrencies.

While Goldman Sachs explores ways to move forward with blockchain technology, other financial institutions are being vocal about their disinterest in it. JP Morgan’s CEO has even called bitcoin “a fraud,” and this hesitation to dive into the world of cryptocurrencies is understandable. They started out as a mysterious alternative to government-backed money and were often linked to shadier dealings. Even though cryptocurrencies such as bitcoin and ether have seen record price increases over the past year, the market still volatile.

While the WSJ‘s sources were sure to note that Goldman Sachs may not move forward with crypto trading, the fact that they’re even considering it is promising. The more institutions and governments we have exploring how cryptocurrencies can best be incorporated into society, the sooner we’ll be able to take advantage of all the benefits of blockchain.

Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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Fidelity Investments Is Mining for Cryptocurrency

Investing in Crypto

Investment and financial institutions are beginning to take cryptocurrencies and blockchain technologies more seriously. Among them is Fidelity Investments, which manages $2.3 trillion in assets. Fidelity, while exploring the potential of bitcoin and dipping their toes into the blockchain waters, has recently begun a cryptocurrency mining program that is already generating a profit.

At the 2017 Consensus conference, Fidelity’s CEO Abigail Johnson said, “We set up a small bitcoin and ethereum mining operation…that miraculously now is actually making a lot of money.” The company started mining to learn more about the process.

Crypto mining, thankfully, doesn’t involve any pickaxes or collapsible underground tunnels. Instead, it is a process in which crypto transactions are verified and added to the blockchain — or public ledger. This process also allows for the creation of new bitcoin.

Financial Mining

The applications of blockchain technologies, and specifically cryptocurrencies, extend well beyond financial transactions. As more (and larger) companies show interest and seriously invest in a blockchain-based future, these technologies will grow in potential. Mining is becoming increasingly commonplace. Some individuals are trying to turn a profit with it, but right now it’s only a realistic moneymaking method (which is debated) for large institutions.

The Entire History of Bitcoin in a Single Infographic
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Fidelity has set the stage as a massive firm confident in venturing into crypto mining, so perhaps blockchain technologies will continue to be taken more seriously and adopted by a greater number of bigger organizations. Johnson will hopefully pave the way for others with a large presence to get involved. She has mined about 200,000 satoshis so far, according to a report in The Financial Times, and by the looks of it, she and Fidelity will continue to push forward as major supporters of blockchain technologies and cryptocurrency mining.

Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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The Showtime Question: Should Companies Be Allowed to Use Your Computer to Mine Crypto?

Mining Money

A significant portion of internet users don’t like seeing ads. To avoid these sometimes distracting pop-ups and banners, they may install ad-blockers on their browser or turn exclusively to ad-free sites. Meanwhile, advertisers are spending larger and larger portions of their ad budgets with big online players like Google and Facebook. This is causing internet ad revenues to plummet for sites that may rely on that money to stay afloat.

Privacy and the Internet of Things
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Now, BitTorrent search engine The Pirate Bay and the Showtime streaming service have been caught monetizing their online visitors another way: by using their systems to mine cryptocurrency.

Both sites were found to be sending mining code to users’ computers, and both have now stopped this practice.

The Pirate Bay acknowledged the situation, claiming that it was simply a test. “We really want to get rid of all the ads,” read a statement published by The Pirate Bay. “But we also need enough money to keep the site running.” Showtime, meanwhile, has yet to respond to questions.

Selling Your System

Using visitors’ systems to mine cryptocurrency would provide a potent new revenue stream for sites and services, but whether users would agree to it is another question entirely.

When a site uses a visitor’s computer to mine cryptocurrency, they take up a portion of the system’s resources. At its least intrusive, this practice might cause the system to run a bit slower. In an extreme scenario, it could tear through the battery of a portable device or even inflate a home’s electric bill.

The biggest problem with this particular discovery is that neither The Pirate Bay nor Showtime warned users in advance about their plans. While some users might agree to give up a bit of processing power in exchange for an ad-free experience, most would likely agree that running code on someone’s system without their permission is rather dishonest.

If users don’t agree to the practice, it doesn’t stand much of a chance of gaining traction as a new revenue source for sites — a standard ad blocker will impede mining code just as easily as it blots out ad content.

Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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This Latin American Country Could Adopt Bitcoin as an Official Currency

From Bolivars to Bitcoin

In order to deal with ever-growing issues with hyperinflation, the country of Venezuela may soon decide to adopt a new currency: Bitcoin.

As explained by CoinTelegraph, Bitcoin has been the subject of a massive amount of mining and purchasing over the last few months, leading to a number of rumors regarding the country’s desire to incorporate it into their financial structure.

According to Daniel Osorio, from Andean Capital Advisors, Venezuela may be on the verge of forgoing their Bolivar currency. During an interview last week, he told CNBC “we may well be witnessing the first ‘Bitcoinization’ of a sovereign state.”

Osorio went on to explain that Venezuela is more than a week behind on a substantial bond interest payment. At present, it doesn’t have the money to address it or manage the economy. A simple lunch can now cost up to 200,000 Bolivars ($8-$10) prompting people to resort to using Bitcoin or money wires of other foreign currency. Bitcoin is appealing because it’s independent of the black market and tied to a fixed exchange platform, making it difficult to exploit.

First in Line

In August, Venezuela was listed as the top country with a failing currency ahead of Colombia and Argentina, with all ten countries listed expected to turn to Bitcoin or other cryptocurrencies in the near future.

The “bitcoinization” of Venezuela hasn’t happened, despite what many would like to say, so we’ll have to wait to see what actually becomes of the situation. If it does completely shift, however, it could be used as another selling point to get people to adopt the biggest crypto out there.

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Bitcoin Was Just Used to Pay for a New Home in Texas

Texas-based real estate brokerage firm Kuper Sotheby’s International Realty has completed the first-ever sale of a real estate property using just bitcoin.

The world’s most popular cryptocurrency has long moved on from its shadowy past to become a legitimate currency used to purchase Starbucks coffeeXbox games, and now, a newly built custom home with grand entertaining areas, a master suite, and a chef-worthy kitchen.

The price of the home hasn’t been disclosed, but more important than that is the ease of the overall transaction. The buyer simply transferred the bitcoin to the seller, who then converted it into U.S. dollars.

“In all of my 33 years of closing transactions, I honestly couldn’t have expected something so unique to go so smoothly,” Kuper Sotheby’s Sheryl Lowe, the buyer’s agent, said in a press release. “In a matter of 10 minutes, the bitcoin was changed to U.S. dollars and the deal was done!”

This real estate transaction is further proof that bitcoin isn’t “a fraud,” as some have claimed. It’s also another example of the increasing acceptance of cryptocurrencies, which are poised to revolutionize a variety of industries beyond finance, from transportation to entertainment to politics.

Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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Let’s Have a Heart to Heart: Are Blockchain Tokens Really Nothing More Than “A Scheme?”

Opportunity or Trap?

For seemingly every expert making bold claims that cryptocurrencies are the future of finance and are capable of “freeing humanity from tyranny,” there’s another expert decrying the rise of bitcoin and the like as nothing more than an unstable “bubble” built on hype and bound to pop.

Perhaps the strongest criticism levied at crypto companies, however, is that they’re massive scams — that they don’t deliver anything of material value and are intentionally designed to make money for those at the top by taking advantage of those at the bottom.

Case in point: “In my view, digital currencies are nothing but an unfounded fad (or perhaps even a pyramid scheme), based on a willingness to ascribe value to something that has little or none beyond what people will pay for it,” Howard Marks, Co-Chairman of Oaktree Capital Group.

So, who is right? Is crypto a legitimate new type of finance system or a modern take on snake oil, one peddled by supposed tech revolutionaries instead of seedy profiteers? In order to answer this question, it is important to first understand how token launches (sometimes called “ICOs” or “Initial Coin Offerings”) work in relation to IPOs (Initial Public Offerings) — to understand how crypto startups are funded in comparison to other companies.

Understanding the Terms

When a private company decides it wants to start raising funds from the public, it has what’s known as an initial public offering (IPO). For a certain fee, interested investors can purchase shares in the company. Those shares make these investors, by law, part owners in the company and entitled to dividends if the company makes a profit.

The IPO process is typically facilitated by a team of experts — lawyers, accountants, underwriters, etc. — and it is overseen by the Securities and Exchange Commission (SEC), a non-partisan agency of the federal government with two primary objectives:

  • Ensure that the companies raising fund are telling potential investors the truth about their business, including any potential risks to investing
  • Ensure that the people facilitating the process, such as stockbrokers and exchanges, put investors’ interests first and treat them fairly and honestly

To meet these objectives, the SEC will require that a company register before their IPO, submit their financial statements to be audited, and meet a number of other requirements. In theory, the SEC acts as an unbiased third-party in the IPO process, ensuring that everything is aboveboard.

One very important point to note is that basically all brokerage firms require investors to meet some qualifications before they can participate in an IPO. Generally, you have to have a certain amount of money or a set number of transactions, which means that a vast majority of society is not able to participate.

This is the big difference between an IPO and the launch of a new blockchain token — token launches put the power, and the responsibility, in your hands.

Instead of venture funding, many blockchain startups have a token launch or an ICO. It is important to note that many individuals operating in the blockchain space, and other experts, prefer the term “token launch” instead of “ICO.” This is because some blockchain tokens/transactions do not qualify as “investment contracts,” meaning that they are not considered securities, and so the term ICO (given its similarity to IPO) may be confusing.

A Securities Law Framework for Blockchain Tokens” sums the problem with the term ICO, noting that tokens have many different applications and utilities:

There are many different types of blockchain tokens, each with varying characteristics and uses. Some blockchain tokens, like Bitcoin, function as a digital currency. Others can represent a right to tangible assets like gold or real estate. Blockchain tokens can also be used in new protocols and networks to create distributed applications…some tokens, depending on their features, may be subject to U.S. federal or state securities laws.

But, and this is the notable thing, not all tokens will have these features and be subject to security laws. With this in mind, for the purposes of clarity, we will be referring to the launch of a new blockchain token as “token launches.”

As Balaji Srinivasan, board partner at the venture capital firm Andreessen Horowitz, explained in an essay on Medium, the fundraising process that drives some token launches is a bit “like a Kickstarter on steroids.”

To raise funds through a token launch, a company will sell a certain percentage of the total amount of their crypto upfront. Purchasers of these crypto coins are not legally part owners in the company, and they don’t earn dividends if the company prospers. The success of their investment is based on the market value of the coin. In other words, as long as they can sell their cryptocurrency for a value higher than what they paid for it, they can make a profit.

Unlike the IPO process, token launches are unregulated. Companies aren’t required to adhere to a path set forth by the SEC or any other government agency, which means there is no third party ensuring that either side is telling the truth or meeting any certain requirements.

Token launches do tend to follow a certain format, however, and it starts with the company’s founders writing a white paper providing details on their startup. This paper can be any length or format, but it will usually include the company’s strategy and goals, as well as their plans for funding (the amount of money they hope to raise, the per-token cost, the duration of their token launch, etc.). Ideally, these white papers should provide a comprehensive business plan for interested parties.

If the company does not meet their minimum funding goals, the money is returned to the would-be supporters and the token launch is considered unsuccessful.

Risks vs. Rewards

According to one crypto investment expert (who agreed to speak on the condition of anonymity), the token launch process can benefit both investors and innovators looking to get their projects off the ground.

“Token launches allow the broadest amount of participation we have seen yet,” they explained. “They’re a pure way to go from a creator of an idea directly to investors without a large number of middlemen. They allow investors to get in at an earlier level than an IPO. They allow anyone anywhere in the word to easily participate with very low minimum investments.”

In this respect, token launches are all about total participation and democratizing power. Instead of just a few wealthy participants, anyone can participate in a token launch or even host their own token launch, allowing individuals in impoverished areas (or who are faced with other economic or social barriers) to participate in the global economy.

“Crypto is complicated, exciting, and the future.”

Unfortunately, token launches also carry with them several inherent risks due to their unregulated nature.

“With token launches, people are able to raise large amounts of money with very little evidence they can deliver,” the expert noted. This is mostly a matter of supply and demand. Crypto has the potential to deliver high returns, so investors are eager to jump into the market. Unfortunately, the supply of crypto projects isn’t yet enough to meet this demand, which leads to investors who are more willing to take greater risks on companies with less evidence they can deliver on their claims.

“Investors are also willing to accept a longer lag between when they give their money to a token launch and when [the company] builds a product — another example of moving further out the risk spectrum,” they continued. “This dynamic lends itself well to a Ponzi scheme, where a company does a token launch, promises a product in six months, builds nothing, and then uses the money raised to market and execute another token launch two months later.”

Investors in OneCoin know the dangers of investing in crypto startups all too well. Founded by Bulgarian national Rjua Ignatova, the company raised more than $350 million before Ignatova and nearly two dozen of OneCoin’s promoters were arrested for running a fraudulent business.

This, of course, is important to note: Just because token launches are not regulated does not mean that they are held to no standards and are free to do whatever they like. Those who act with malicious intent can still be held accountable, though this is admittedly a long and painstaking process.

After the arrest, Deputy Commissioner of Police (Crime) Tushar Doshi told The Indian Express, “It is clear that this is a Ponzi scheme,” but that fact obviously wasn’t clear to the thousands of investors who put money into the operation. How were they supposed to know where OneCoin landed on legitimate-to-scam spectrum of business models before putting money into it?

The Point: Don’t Invest Blindly

In the end, the expert consensus indicates that, although some cryptocurrencies and token launches are nothing more than schemes, there are a great many projects that are genuine and can (and have) delivered.

Indeed, some major financial institutions are already developing their own cryptocurrencies to ensure that they’re not left behind if the economy does undergo this major transition, and even JP Morgan is looking into ways to incorporate blockchain into their operations.

Furthermore, more than a billion people worldwide don’t have a way to identify themselves, and they can’t open bank accounts and participate in the traditional economy as a result. A cryptocurrency like bitcoin has no such barrier to entry.

With this in mind, according to experts, the best way for investors to ensure they don’t fall victim to the crypto scheme is to do their due diligence. This is the big difference between an IPO and the launch of a new blockchain token — token launches put the power, and the responsibility, in your hands.

So, how do you safeguard yourself?

“Investing in token launches is a really hard business,” the expert asserted. “I’d say the most important things are knowing the team and their business plan. If the team has a history of hopping from one project to the next, they’re probably going to hop on your project. If they can’t explain their business plan in a way that makes sense to you, they probably don’t understand well what they are doing.”

Following this advice could have prevented OneCoin’s many investors from falling victim to the scam, as it raised many red flags online long before arrests were made.

As The Cointelegraph pointed out, Ignatova’s qualification were inconsistent between her resume, personal websites, and OneCoin’s website, and several of the company’s directors had been linked to scam operations in the past. When combined with several other eyebrow-raising factors — the promise of huge returns, constantly moving goal posts, and a refusal to accept payment in crypto — the illegitimacy of the operation seems obvious in hindsight.

Of course, as previously mentioned and as evidenced by cryptocurrencies like bitcoin and ether, not every crypto will be a scam, and some can deliver remarkable returns. Over the course of eight years, bitcoin has increased in value from eight-hundredths of a cent to more than $4,000 per coin. Ether has seen its own value surge over the last year, and Ethereum is now the blockchain technology of choice for some of the world’s biggest tech and finance companies, including Microsoft, JP Morgan, and Intel.

No doubt anyone who bought in when either of those cryptos was in its infancy now thinks the gamble was worth it. As our expert explained, “Crypto is complicated, exciting, and the future,” so as long as investors understand that token launches, by their very nature, are riskier than traditional investments, investing in them can be a potentially rewarding — and highly profitable — experience.


This interview has been slightly edited for clarity and brevity. The term ICO has been changed to “token launch” throughout. 

Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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The U.S. is No Longer the World’s Largest Bitcoin Market

Japan has risen above the U.S. in the worldwide rankings for the largest bitcoin exchange market. The country now accounts for roughly 48 percent of the global market share, reaching a high of 51 percent over the weekend.

This is thanks in no small part to the Chinese government’s recent rulings on the cryptocurrency. The nation first issued a ban on initial coin offerings (ICOs) and then requested that exchanges and trading platforms cease operations by the end of September, granting an extension until October 30 for OKCoin and Huobi.

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Those deadlines are still weeks away, but traders aren’t waiting around. Many that were previously operating in China have taking their activity to Japan, causing the spike in the nation’s market share — and reducing China’s from 15 percent to less than seven percent in just three days.

It remains to be seen whether Japan’s current position will hold or is a fleeting surge. One Chinese official has claimed that the country’s ban on ICOs is a temporary measure, but the country’s position in the cryptocurrency market might be forever changed if the current situation drags on too long.

Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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JPMorgan CEO Says That Bitcoin Is a “Fraud”

The New Tulip Bulb?

Bitcoin is a “fraud,” according James Dimon, the chief executive officer of JPMorgan Chase — the largest of the “big four” American banks.

Dimon made this assertion during the Delivering Alpha conference in New York City on Tuesday, and he went on to state that the cryptocurrency is “just not a real thing” and that “eventually it will be closed.”

In an appearance at another event earlier in the day, Dimon compared bitcoin to “tulip mania.” This phrase is something of a shorthand for an economic bubble, a situation where an asset’s price is far higher than its intrinsic value. It originates from a period of time during the Dutch golden age in the 1600s when tulip bulbs prices briefly swelled incredibly high before crashing dramatically.

Dimon said that bitcoin investors are taking a big risk because the cryptocurrency doesn’t have legal support. He went on to state that he would immediately fire any JPMorgan trader who was trading bitcoin, explaining, “It’s against our rules, and they are stupid.”

Banks and Bitcoin

Banks like JPMorgan have a vested interest in keeping bitcoin at bay. If “the flippening” comes to pass — a point at which cryptocurrency overtakes traditional money in terms of usage — banks are going to have to scramble to find their place in the new economic landscape.

Some major financial institutions are already developing their own cryptocurrencies to ensure that they’re not left behind if the economy does undergo this major transition, and even JP Morgan is looking into ways to incorporate blockchain — the technology behind bitcoin and other cryptocurrencies — into their operations.

Furthermore, cryptocurrencies and tulips aren’t particularly comparable as the former offers tangible utility. More than a billion people worldwide don’t have a way to identify themselves, and they can’t open bank accounts and participate in the traditional economy as a result. A cryptocurrency like bitcoin has no such barrier to entry.

While Dimon is clearly skeptical of cryptocurrencies, they are inarguably on the rise right now, and many other experts are predicting further growth. Still, no one knows for sure whether they will be the future of finance.

Because cryptocurrencies aren’t backed by governments, they do carry additional risks, and bitcoin prices could drop just as quickly as they have risen. Alternatively, widespread adoption of crypto could prompt government involvement — signs that this might be about to happen in the U.S. and elsewhere have already emerged. For now, all we can do is wait to see where this upward trend in crypto leads.

Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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Bitcoin Cash Price Rises While Bitcoin and Ethereum Drop

Bitcoin, Bitcoin Cash, and Ethereum experienced a few changes since Monday, with some rising to new heights and others dipping down.

As reported by Business Insider, both Bitcoin and Ethereum, the two biggest cryptocurrencies, have seen a single-digit percentage drop, while Bitcoin Cash has seen a double-digit rise.

Bitcoin dropped 2.2 percent against the US dollar as of Tuesday morning, and is now valued at $4,004.67. Ethereum, which recently announced its Metropolis update, saw a slightly larger drop than Bitcoin, dropping 3 percent to $310.32. This drop continued the currency’s struggles to hit $350, and it’s unclear how the Metropolis update will further affect Ether token prices.

bitcoin cryptocurrency ethereum bitcoin cash
Bitcoin’s 2.2 percent drop. Image Credit: Business Insider

Although Bitcoin Cash only split from Bitcoin very recently, at the beginning of August, it quickly became the third-biggest cryptocurrency in the world. Compared to the top two, Bitcoin Cash rose by 15.6 percent, to $696.39. As impressive as this may be, Business Insider notes the young currency managed to top $1,000 last weekend, but skepticism about it’s staying power caused it to fall sharply.

Expect prices to fluctuate, as they often tend to do, especially when regarding Bitcoin. Trusted trader masterluc predicts the top digital currency will hit $15,000 by the end of 2017.

Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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Get Ready. Renowned Bitcoin Trader Says the Currency Will Hit $15,000 in 2017.

Late last week, the price of bitcoin rose beyond $3,500, and it currently sits slightly above $4,200. While some are skeptical of this steady increase in value, according to an expert observer, it won’t be ending any time soon.

Veteran trader masterluc predicts that bitcoin will be worth $15,000 before the end of the year. He believe the cryptocurrency’s current bull run will then continue into 2019, at which point its price will top out somewhere between $40,000 and $110,000.

Masterluc has historically been adept at predicting bitcoin’s future value. He was able to accurately predict in March 2013 that the crypto would enter into a bear market in November 2013, and then in May 2015, he made a prediction that proved to be just slightly off point, missing the start of the crypto’s current surge by just two months.

Masterluc isn’t the only pundit expecting bitcoin to go from strength to strength. Earlier this month, Goldman Sachs analyst Sheba Jafari predicted that the currency could reach $4,800, having previously forecast a high of $3,691 as recently as July.

Bitcoin is on a roll at the moment, and predicting when this run will start to drop off is no easy task. Masterluc has a history of being right in his predictions, and many experts agree that the uptick will continue for at least a little while longer, which could have some major ramifications for traditional currency.

Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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Goldman Sachs Analyst Predicts Bitcoin Price Could Hit $4,800

Bitcoin Rising Again

Business Insider reports that Goldman Sachs Analyst and Head of Technical Strategy, Sheba Jafari, sent a client note on Sunday predicting that the price of bitcoin might soar as high as $4,800. Jafari set a target of $3,691 in late July, which the cryptocurrency came very close to Sunday, and has since surpassed it. On August 12 the price surpassed $4,000 for the first time.

With these milestones in the rearview mirror, Jafari predicted that the price might rise as high as $4,827. This would precede a market correction, however, which would push it back down to $2,221.

Image Credit: Geralt/Pixabay

Business Insider reports that CEO Arthur Hayes of the bitcoin derivative exchange BitMEX agrees with Jafari that bitcoin might near the $5,000 level. Hayes spoke to Business Insider soon after the recent Segregated Witness (SegWit) software update, which is intended to make transactions with the currency quicker to process and improve the coin’s scalability.

At the time of this publication, the price of bitcoin remains above $4,000, at about $4,059. According to CoinDesk, Goldman Sachs has been advising clients that money is moving into the market: “Whether or not you believe in the merit of investing in cryptocurrencies (you know who you are), real dollars are at work here and warrant watching.”

As the future of traditional markets wanes in uncertainty, the welfare of nascent cryptocurrencies is sure to be of critical importance, in the wide world of finance.

Several members of the Futurism team are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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What Would Happen if Cryptocurrency Became More Popular Than Cash?

The Flippening

For a time, Bitcoin seemed unassailable in its dominance of the cryptocurrency market, being the first digital currency to really take root and establish itself in the mainstream. Since then, a host of worthy competitors have emerged, and there’s a real possibility that the balance of power could flip.

Many who have been regularly following developments in the cryptocurrency market refer to the tipping point where one digital currency supersedes another as “the flippening”  We almost saw this occur in May 2017, when Ethereum’s market cap approached Bitcoin’s amid a surge in popularity.

When individuals have significant amounts of money invested in one cryptocurrency over another, it’s no surprise that tensions run high when they go head to head. However, these squabbles over which coin is best might be distracting us from a more pressing issue.

Some observers would argue that the true flippening isn’t a case of competition between two different forms of cryptocurrency at all. The sea of change yet to come could have more far reaching consequences, if and when digital currency as a whole becomes more popular than conventional fiat currency.

The Entire History of Bitcoin in a Single Infographic
Click to View Full Infographic

New Money

There would be some major advantages to an all-cryptocurrency future: its value can’t be manipulated as easy as fiat currency, and it lends itself to the concept of universal basic income. In fact, several different programs, such as uCoin and Cicada, are already using cryptocurrency to distribute UBI.

In a future where our transactions with shops and services are likely to be handled by automated systems, cryptocurrency removes many of the intermediaries that would take their own cut. There are many benefits for the individual, but the flippening stands to pose some major challenges for the global economy in its current form.

Should cryptocurrency manage to jump ahead of fiat money in terms of usage, cash won’t be able to close the gap. That’s the trick to the flippening — once changeover takes place, the losing party loses value and can’t do anything about it.

If everyone begins using cryptocurrency, infrastructure would need to be developed with that in mind. It might not take too long for cash to become incompatible. At this point, it remains to be seen whether established financial institutions could pivot to that new status quo in time.

At the highest level, governments will be hit hard, as they will no longer exercise the same level of control over the country’s currency. The idea of printing more money has been raised time and time again in response to financial turmoil, but that option disappears once currency has to be mined.

The flip from fiat money to cryptocurrency is a very real prospect, and it could well change the face of how our society spends and saves.

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Is Investing in Bitcoin and Other Cryptocurrencies Worth the Gamble?

The Technology Behind Cryptocurrencies

The creation of Bitcoin back in 2008 fueled the exponential growth of the cryptocurrency ecosystem, facilitating the creation of a rich diversity of coins and applications that many would deem revolutionary. Those who invested in cheap coins at the outset are reaping huge returns on their capitals, dwarfing the average returns one can acquire in the stock markets. Think about it; if you had bought $1,000 worth of Bitcoin in 2010, you’d be worth a staggering $35 million now. The possibility of earning colossal returns has attracted many to the arena, and this begs a crucial question: Is the hype on cryptocurrencies warranted or it is just a game of Russian Roulette?

The birth of Bitcoin – the first digital cryptocurrency that is decentralized by design – gave rise to a technology with the potential to redefine the very fabric of our status quo. This technology is called the Blockchain, which underpins Bitcoin’s protocol.

“Every informed person needs to know about Bitcoin because it might be one of the world’s most important developments.” — Leon Luow, Nobel Peace Prize nominee

Blockchain is essentially a distributed, digital ledger where every transaction is broadcasted publicly and recorded chronologically. The database is ever growing, expanding in tandem with the amount of transactions made on the network. The decentralized nature of Blockchain technology ensures that transactions are immutable and thus immune to change, offering full transparency for each and every transaction. Add to that the traits of increased security, higher efficiency, error-resistant and reduced transaction costs, it leaves no doubt as to why many are excited about Blockchain’s possible use cases. The utility of Blockchain technology is endless, with an ever-growing list of governments, industries and companies looking to further explore its usage.

Hotbed for Money Making

The birth of a revolutionary technology would always entail those looking to capitalize on its profitability. Blockchain is no different. Investors, traders and speculators can get in on the action by buying cryptocurrencies, which are digital currencies manifesting as variant applications of the Blockchain technology. There are over 900 coins available, with each offering a slightly different approach to solving a range of problems. Many early adopters have made a great sum of money, by buying the coins cheaply at its outset and realizing them much later on. Based on the statistics provided by ICOSTATS, the return on capital of 40 cryptocurrencies since their inception stands at a staggering 6703%! In order for you to earn similar rates of returns in the stock market, it will take you approximately 957 years.

The Entire History of Bitcoin in a Single Infographic
Click to View Full Infographic

These stellar returns inevitably attract many who are looking to earn multiples over their capital. Given the extreme technicality of cryptocurrencies and the underlying Blockchain technology, many do not fully understand the fundamentals of what they’re investing in. The immaturity of the current infrastructure – stemming from the relative infancy of the cryptocurrency industry — results in an inefficient price discovery mechanism, thereby creating an extremely volatile market environment. This poses huge risks for those looking to invest in a comprehensive list of coins.

Simply entering the market with the hopes of massive short-term gains without understanding the coins and their technology is akin to playing a deadly game of Russian Roulette. The radical volatility of the coins’ prices may significantly put your capital at risk. Just to draw a picture, Bitcoin’s price lost 40% of its value in a matter of days in December 2013, and at the start of this year, Bitcoin lost approximately 34% of its value in a week. While this can spell doom for many, there are those that find gratification by profiting from the intense gyration of prices.

The Verdict?

Nine years after Bitcoin kickstarted the technological revolution, the ecosystem centered around Blockchain technology has flourished and is looking ever so promising. New coins solving real world problems are launched at a tremendous pace, with new functionalities and applications pushing the boundaries of this nascent technology. With increasing user adoption and a keen interest by nations and corporations, it is only a matter of time before Blockchain technology becomes ubiquitous in our lives.

A flip side of this emergent technology is the great risks associated with investing in cryptocurrencies, especially for those with a short-term horizon and an absence of understanding in the coins they have invested in. Truly, the extraordinary volatility unique to cryptocurrencies creates a superficial impression of high stakes gambling in the eyes of many. Armed with the right understanding and knowledge of Blockchain technology, you would begin to appreciate its innate beauty.

Disclaimer: The views and opinions expressed are solely those of the author. They do not necessarily represent the views of Futurism or its affiliates.

Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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Bitcoin Can Get to $100,000 If It Keeps Following One of Tech’s Golden Rules

Record Highs

Bitcoin is trading at record highs on Monday, but the cryptocurrency may still be far from hitting its ceiling.

It rallied 16.19% since July 31, despite last week’s fork that split it in two. It’s up 465% since last year.

According to analysis by Dennis Porto, a bitcoin investor and Harvard academic, bitcoin’s price could hit $100,000 per coin if it continues to follow one of tech’s “golden rules” — Moore’s law.

The rule, which was devised in 1965 by Intel cofounder Gordon Moore, describes the exponential improvements of digital technology.

“Moore’s law specifically applied to the number of transistors on a circuit but can be applied to any digital technology,” Porto wrote in an email to Business Insider. “Any technology that is growing exponentially (i.e., ‘following Moore’s law’) has a doubling time.”

Typically, however, the rule applies to a technology’s computing power or capabilities. This is the first time Porto has noticed a technology’s price following Moore’s law.

Investment Opportunity

Since bitcoin’s inception, according to Porto, its price has doubled every eight months.

Image Source: Dennis Porto

“This poses a unique opportunity for investors: Whereas it was difficult to invest in circuits or internet speeds, it is easy to buy a bitcoin,” Porto said.

Porto expects that this doubling trend could continue until bitcoin reaches mass adoption. Of course, another cryptocurrency could usurp bitcoin in the meantime.

By February 2021, Porto believes, it could be worth over $100,000.

Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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A Bipartisan Group of Australian Lawmakers Want the Nation to Create Its Own Crypto

Despite Bitcoin’s recent complications, a group of lawmakers from Australia’s center and left-leaning political parties are strongly encouraging the country’s Reserve Bank to officially recognize the cryptocurrency and perhaps even create its own cryptocoin. They’ve created a group called Parliamentary Friends of Blockchain to push this initiative, which they believe will secure the future stability and competitiveness of Australia’s financial services industry.

“This will be a revolutionary leap for the Reserve Bank and for Australian financial institutions; what we want to do here in Parliament is to create the political environment to allow that leap,” Labor senator Sam Dastyari told The Sydney Morning Herald. Dastyari and Liberal senator Jane Hume are the lawmakers leading the effort.

Blockchain, the technology upon which Bitcoin and other cryptocurrencies are built, is a decentralized digital ledger that is both more transparent and more secure than most traditional financial systems.

As Australian Digital Currency Commerce Association chairman Ronald Tucker explained to The Sydney Morning Herald, a crypto backed by the federal government would eliminate settlement times, as well as foreign currency exchanges. “It would be an auditor’s dream because you’ll be able to see any transaction that moves on it,” he added.

It’s no surprise, therefore, that a number of nations are adopting this new system of currency. China is the first country to test a national cryptocurrency, and it has plans in the works to release its own version of Bitcoin. Meanwhile, more than 260,000 stores in Japan have begun accepting Bitcoin payments, with three of the nation’s largest banks backing a Bitcoin exchange.

Australia is already showing signs that it hopes to get in on the trend while it’s still emerging, and the Parliamentary Friends of Blockchain group should help push things along.


Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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Experts Suggest Cryptocurrencies Could be This Generation’s Supplement for Pensions

The Future of Crypto

Those who have retired within previous decades, or even some who are currently looking to retire, have earned pension funds which allow them to transition out of the traditional working force. This is unfortunately not a reality for many working today. Recently though, experts have suggested that the future of and potential for cryptocurrencies could be this generation’s supplement for pensions, re-affirming retirement as a viable alternative for working adults.

Ron Ginn, the young founder of Text Event Pics and investor in Ripple, et al real estate, said to The New York Times that “This is like getting to invest in the internet in the ’90s. I’m obviously very bullish, but I expect to make a couple million dollars off very little money. This is the opportunity of a lifetime. Finance is getting its internet.”

While cryptocurrency isn’t a precise parallel to pension funds, it’s still a very hopeful and promising investment. At the very least the consensus leans toward its eventual reliability. Nothing’s carved in stone, but recent developments in financial technology have shown that palpable risk is correlated with significant gains.

Image Credit: quinntheislander / pixabay

Risky Money

Money has no value without trust, and this truth holds no less true for investment. Today, with pensions and 401(k)s growing rarer while memories of the recession of 2007-2009 still linger in the air, finding a realistic way to invest in a financially secure future (in the traditional sense) can seem like a lost cause. Consequently many see crypto investments as the safer alternative. Gabe Wax, who runs a recording studio in Brooklyn, told The New York Times, “I constantly feel like I’m looking over the edge. of a cliff […] I don’t like the idea of money just sitting in a savings account — with the way inflation works and how low interest rates are, you’re losing money. There’s less money than there’s ever been in the history of recorded music, so that gives me anxiety. It’s weird to say that owning cryptocurrency soothes that anxiety, because it’s counterintuitive, but it does.”

The Entire History of Bitcoin in a Single Infographic
Click to View Full Infographic

As major players like Bitcoin and Ethereum compete against new-name giants like Bitcoin Cash, which advanced to third-biggest in market capitalization in its first 48 hours, the dawn of cyrptocurrency has become an inevitable reality. Looking around, its rapid global proliferation is apparent in everyday wearable technologies, which softens the distinction between financial and digital.

The days of stable, reliable pension funds may be on the proverbial endangered list. Alas, this generation’s trust in the forces of globalization and traditional financial institutions may again be at low ebb. Consequently, while many in previous generations joined the workforce with implicit trust in traditional institutions, many younger investors will pivot to cryptocurrency. The future’s never a certainty in economics, but we’d all be remiss to ignore this increasingly viable means for financial security.


Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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Bitcoin Just Reached a New All-Time High

Bitcoin Going Strong

According to the CoinDesk Bitcoin Price Index (BPI), the price of bitcoin has shot up again, surpassing $3,200 for the first time. Market data indicates this latest surge started after 1:00 UTC on August 5, when the price of bitcoin surged past $2,900. By about 3:12 UTC, the price breached the $3,000 mark.

Screenshot, Screenshot, bitcoin price 8-5-2017 at 4:20pm MST, Coindesk 
At the time of this writing, the BPI shows that markets hit a high of $3,360.87, and are now trading at an average of $3,266.81. The last time the price of bitcoin broke $3,000 was June 12, based on the BPI.The market push also boosted the collective market capitalization of bitcoin beyond the $50 billion mark for the first time. The BPI showed bitcoin’s market cap at around $54.13 billion at the time of this writing.

Screenshot, Screenshot, bitcoin trading volume, 8-5-2017, 4:19pm MST, Bitcoinity
Data from Bitcoinity reveals the jump in trade volume you would expect to accompany the swing in price, with market volumes rising alongside the value of bitcoin. The data shows a peak in trade volume at around 20:00 on August 4, with more volume overall from August 4 to August 5 than at any time during the week.

Although many predicted bitcoin would not fare well after the fork, these numbers seem to indicate otherwise. In fact, as Redditors have been discussing, Bitcoin is now worth more than $1 for each day it has existed. Senior Goldman Sachs technician Sheba Jafari’s prediction about bitcoin starting a wave V — during which its value could reach almost $3,700 — is looking on point.Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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History Is Rhyming: Fitness Functions & Comparing Blockchain Tokens To The Web

The Future of Cyrptocurrency

At the end of 2013, I wrote a blog titled: In The Future, Everyone Will Have Their Own Cryptocurrency. It was based on the premise that because we can easily create cryptocurrencies, we are going to see tokens minted for almost all networks of value, including every person. It started a multi-year rabbit hole towards designing the technical infrastructure for tokens (e.g. I worked on dogeparty, scrypt altcoins & I was a key contributor to the ERC20 standard) & the economic design of them.

The reality is:

Blockchain tokens have reduced the cost to tokenize coordination by orders of magnitude, and thus we are likely to see the effective tokenization (and by extension, the introduction of markets) into almost everything.

The reason why is quite simple: blockchain tokenization decreases the cost to coordinate by orders of magnitude. Coordination systems are utilized when the cost to run them are less than the benefits they provide. New coordination systems will come to exist because we’ve substantially lowered the costs to implement them:

Value of a coordination system > cost to coordinate.

We’ve seen this before: the web decreased cost to share information by orders of magnitude.

Value of information shared > cost to share that information.

Before the web, when you received a letter with some photos of loved ones far away, one might’ve wished to extend gratitude back immediately, but it wasn’t within our frame of reference that it would ever be possible to forward something as low bandwidth as a “like” back: which is now just a double-tap whilst you are lying in bed at night.

It was possible to do Twitter before the web, but good luck getting someone to use Twitter where we have to send it all through mail.

“Dear Donald Trump.

I hope this tweet finds you well. I think you are a terrible president. #carpediem

Yours in lulz,

Simon”

Blockchain Tokenization

Information systems today just didn’t fit into the context of the pipes that was available before the web. It was too costly, and unreasonable to do them. It’s why newspapers were bundled: they ALSO had a market (classifieds) in them, because this channel was already open. The hard work of distribution was done. But then… we began to program & automate information.

In the same vein, the modern limited liability, joint-stock corporation, (which everyone could create one), is about ~160 years old. Before then, you had to get a royal charter to allow access to tradable ownership and limited liability.

There are many coordination systems today that are being invented as we speak and that are going to be invented that just does not fit into the pipes of a corporation. A modern corporation succeeds because we have systems of law & systems of enforcement to enable them. In order to do so, we essentially rely on the massive cost of a nation state to enforce them. But now… we can now program & automate coordination.

I don’t think we can ultimately fathom how ground-breaking this is. Tokenized coordination systems that exist on scales we’ve never imagined. Like your great-grandmother not even pondering about the existence or need of something akin to sending a “like”, we haven’t even scratched the surface. We should absolutely be asking where this fits in, and where this could help. The result of which will create massive amounts of wealth.

The reason is that like information systems before the web, they under-fit the potential of information systems. We didn’t have Twitter, Facebook, Instagram, Wikipedia, Medium, etc because they couldn’t fit into the channels that were available. We could build substantially more granular information systems, making them fit more for specific niches and needs. The modern corporation, as great as it was, only allowed us access to certain kinds of coordination systems.

Fitting information systems more appropriately led to more information sharing: as low bandwidth a ‘like’ is, it’s likely more ‘likes’ have been shared (in size), than all newspapers in history.

If we are going to fit tokenized, coordination systems more appropriately, the result is simply: more wealth creation… Perhaps greater than anything we’ve seen before. Perhaps greater than giving access to the joint-stock corporation to everyone in society.

Image Source: Scikit Learn

Do you think it would ever have made sense to en-masse create ownership in just a song? Tokenizing attention? Tokenizing a contract directly? Tokenizing memes? Tokenizing people? Tokenizing this blog post? Tokenizing public goods? We invented something as low bandwidth as a ‘like’. How granular does blockchain tokens go? What’s the lowest bandwidth coordination system blockchain tokens allow? 10 second organizations? Idea derivatives? Meme derivatives?

Much of these coordination systems might seem overkill, but you also have to remember that much of our information systems are just machines talking to each other. The liquidity of say tokenizing a contract and effectively trading it is costly for humans. It’s likely much of these coordination systems will be primarily exploited by machines to offset inefficiencies in the markets to our collective benefit.

Conclusion:

We’ve opened the Pandora’s box. We are on the multi-year path to tokenizing almost everything.

To combine the aphorisms:

Past performance doesn’t predict future results, but it sure rhymes.

PS: I’ve been busy writing a substantially longer blog post that puts it much broader context, including the history & theory of the firm, corporate legal innovations over time, systems and complexity theory, meme & curation markets, prediction markets, graph markets, history of collectibles & multi-disciplinary research from other fields that explains it all. Coming soon.

Disclaimer: I’ve drunk the Kool-Aid. I’ve held cryptocurrencies since 2011.

Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

Disclaimer: The views and opinions expressed are solely those of the author. They do not necessarily represent the views of Futurism or its affiliates.

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In Less Than 2 Days, Bitcoin Cash Becomes Third Biggest Cryptocurrency

[Un]Expected Boom

Less than two days after splitting from the main Bitcoin network, Bitcoin Cash [BCC] now ranks third amongst the world’s most valuable cryptocoins. The budding cryptocurrency has reached a market cap of more $7.7 billion as of this writing, overtaking Ripple’s $6.7 billion market cap.

With a market cap of a little more than $44 billion, the original Bitcoin currency is leading the market, while Ethereum comes in second at $20.9 billion. In terms of value per coin, Bitcoin Cash is even ahead of Ethereum’s current valuation of $223.54, with a per unit value of $470.27.

The surge in Bitcoin Cash comes despite a lack of support from several mining pools and major exchanges like Coinbase and BitMEX. Some Coinbase users are even threatening to sue the exchange for not recognizing the currency.

Blockchain Global’s recently re-opened Australian Cryptocurrency Exchange, on the other hand, is confirming Bitcoin Cash trades and claims to have seen a huge demand for the currency. “We are receiving a lot of off-market orders for bitcoin cash — they’re exploding!” venture partner Sebastian Quinn-Watson told Business Insider.

A Volatile Currency

The creation of Bitcoin Cash was the result of an ongoing debate regarding how to scale Bitcoin blockchain transactions, and experts are currently divided on how the split will ultimately play out.

For now, this sudden increase in value is understandable. Bitcoin Cash carries all the history of the original Bitcoin platform up until the fork on August 1, which means anyone with Bitcoin now has an equal amount of Bitcoin Cash.

Eventually, Bitcoin Cash should be able to stabilize itself for market exchanges, but right now, speculation is causing a surge in initial interest. “People are selling their Bitcoin positions and buying Bitcoin Cash as a proposition that it is the ‘new coin’ that has more value in the future,” explained Quinn-Watson. “It’s a bit speculative.”

No one knows for sure how long Bitcoin Cash can sustain this upshot. As with other digital currencies, Bitcoin Cash’s value depends mainly on how much value investors assign to it and how easily it can be used for “real-world” transactions.

“There’s no infrastructure available out of the box to support BCC,” Fran Strajnar, co-founder and CEO of Brave New Coin, told CNBC. “The network needs further support and infrastructure needs to be as easy as Bitcoin; otherwise, it’s over for BCC.”


Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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Here’s What CEOs Around the World Are Saying About the Bitcoin Fork

Of Forks and Splits

It’s official. Bitcoin has split in two. Following weeks of speculation that a hard fork was imminent, Bitcoin Cash has separated from the main Bitcoin blockchain, resulting in two distinct Bitcoin currencies and blockchains that could be used in cryptocoin exchanges.

The primary issue leading to the fork concerned conflicting ideas on how to scale up transaction support over the Bitcoin blockchain. Bitcoin Cash emerged as the final solution. It increases Bitcoin blocks to eight megabytes — the previously agreed upon compromise, BIP91, was expected to double the current block size to two megabytes several months from now.

A Pivotal Moment?

Several experts have weighed in on the potential effects of this split.

Aragon co-founder Luis Cuende thinks it “will positively impact Bitcoin.” He explained, however, that Bitcoin Cash may be short-lived. “Probably a fatal bug will crash the whole network (it already happened with Bitcoin Unlimited, Cash’s predecessor) or people will just lose interest in a currency engineered to look decentralized while being totally centralized,” he said in a statement.

The same concern has led major exchanges like Coinbase and BitMEX to hold off on support for Bitcoin Cash. “When we look back 30 days from now, this is essentially going to be a non-event,” said Coinsource CEO Sheffield Clark. “We have absolutely no plans to integrate Bitcoin Cash at our machines at this time.”

“While the markets will ultimately decide, I think there is little chance that Bitcoin Cash will be successful in the long-term. It may have increased capacity, but several issues remain,” said Ryan Taylor, CEO of Dash Core. He argued that Bitcoin Cash didn’t solve Bitcoin’s scaling issues and that it isn’t really forking.

ZenCash co-founder Rob Viglione is more optimistic: “[T]here are pros and cons to everything. The downside of a split is that Bitcoin loses part of its ecosystem, and network effects are so important to this industry. That said, this isn’t a zero-sum game, and it’s more than possible to see both chains flourish in parallel.”

This new cryptocurrency won’t be usable for trading for some while, however. Bitcoin Cash will first need to make it past initial adjustment difficulties and secure multiple block confirmations. For now, all we can do is wait to see how this fork plays out.


Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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Stock Analyst Predicts “Cryptocurrencies Will Continue to Rise”

In a report published in part on Sunday, Standpoint Research founder and independent stock analyst Ronnie Moas predicts a favorable future for cryptocurrencies.

Moas spent the better part of last month testing out digital currencies. He wrote that he expects the solid performance of cryptocoins like bitcoin and ether to continue, and he predicts the value of the latter will double by 2018 to about $400. He previously said that he expects the value of bitcoin to increase to $5,000 per token by 2018 and possibly reach $50,000 in the next 10 years.

At the time of writing, a token of ether costs $219, up by almost 5 percent from the past week. Meanwhile, a unit of bitcoin is valued at $3,000, despite today’s BTC-BCC fork.

Aside from cryptocurrency heavyweights Bitcoin and Ethereum, the report also featured alternative cryptocoin Litecoin. Moas predicts that the price of this so-called “silver bitcoin” will double in 2018 to $80.

“In my view, the genie is out of the bottle, and cryptocurrencies will continue to rise and take market share away from stocks, other precious metals, bonds, and currencies,” Moas wrote in the new report, according to CNBC.

Ultimately, he encourages investors to give cryptocurrencies a try: “I think investors should take a shot on this and hold for a few years. If you lose a few bucks, at least you took a shot. In life, you miss every shot that you do not take. It will probably be more upsetting to watch it (from the sidelines) go up another 1,000 percent.”


Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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Bitcoin “Civil War” Leads Cryptocurrency to Split

The Split

Bitcoin power brokers were unable to come behind a single solution that would have preserved a unified cryptocurrency by Tuesday morning’s deadline.

As such, the digital currency has split in two: bitcoin and bitcoin cash.

“There seems to be some technical issues that might be slowing it down, but yes, the fork has happened,” Peter Borovykh of Blockchain Global, a blockchain technology company, told Business Insider.

“Bitcoin cash is here.”

Eric Voorhees, CEO of ShapeShift, a digital trading company, took to Twitter at around 9:30 a.m. ET to announce the fork this morning.

“Fork has happened,” he wrote.”Now awaiting first block from bitcoin cash. Regardless of opinions, this is very exciting/fascinating day in cryptoland.”

Supporters of the newly formed bitcoin cash (BCC) believe the currency will “breath new life into” the nearly ten-year-old bitcoin by addressing some of the issues that have underpinned the bitcoin (BTC) as of late, such as slow transaction speeds.

The “Civil War”

To recap, bitcoin power brokers have been squabbling over the rules that should guide the cryptocurrency’s blockchain network.

On one side of this civil war, there are the so-called core-developers who are in favor of smaller bitcoin blocks, which make up the network, to protect it against hacks. On the other side, are the miners who want to increase the size of blocks to make the network faster and more scalable.

Until last week, the solution known as Segwit2x, which would increase the size of bitcoin blocks to two megabytes, was slated to become the standard.

Then, bitcoin cash came along. The solution is a fork of the bitcoin system: it’s a new software that has all the history of the old platform but bitcoin cash blocks will be eight megabytes.

Bitcoin cash came out of left field, according to Charlie Morris, the chief investment officer of NextBlock Global, an investment firm with digital assets.

“A group of miners who didn’t like SegWit2x are opting for this new software that will increase the size of blocks from the current one megabyte to eight,” Morris told Business Insider.

Only a minority of bitcoin miners, the folks who unlock bitcoin from bitcoin blocks, support the new currency. Furthermore, a number of exchanges have said they won’t back bitcoin cash.

But that doesn’t necessarily mean it’ll be a dud or that it couldn’t potentially usurp the original bitcoin. Miners might rally behind bitcoin cash if it turns out to be the better digital currency.

“Bitcoin cash has a chance to become the dominant cryptocurrency contingent upon its ability to gain trust and support from both current and new players as well as security of its network,” Borovykh said. “Due to, at least temporary, solution of the scalability issues, bitcoin cash could attract more new capital to the entire crypto space, thus helping increase overall market cap.”

Arthur Hayes, CEO of BitMex, a bitcoin derivative exchange, told Business Insider he thinks a fork will benefit the cryptocurrency in the long run, despite short term volatility and confusion.

“There are people with billions of dollars of skin in the game and they will ultimately go with the superior bitcoin network and the market will follow,” Hayes said.

Bitcoin is trading down 5.78% at $2,715 following word that bitcoin cash has gone live.

Get the latest Bitcoin price here.

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Bitcoin Swings Ahead of Tuesday’s Big Decision

Bitcoin traders are on edge as they await the outcome of the civil war that will decide the fate of the cryptocurrency. Bitcoin is trading up 0.52% at near $2,773 a coin.

On Tuesday, core developers and miners will decide whether bitcoin remains as is, or if there will be a hard fork that splinters the cryptocurrency.

Bitcoin developers want to keep the blocks that make up bitcoin’s network limited in their size to 1 megabyte per block while miners want to make the blocks bigger to improve the network’s speed.

Up until recently, it looked like everyone was on board with SegWit2x, a proposal that, according to bitcoin evangelist Paul McNeal, moves the threshold for implementation down to 80% and also allows for a small increase in the size of blocks on the chain to 2 MBs. That was until bitcoin cash, an alternative to both bitcoin and the SegWit2x version, entered the picture.

“Bitcoin cash basically came out of nowhere,” Charlie Morris, the chief investment officer of NextBlock Global, an investment firm with digital assets, told Business Insider.” A group of miners who didn’t like SegWit2x are going to opt for this new software that will increase the size of blocks from the current 1 megabyte to 8.”

For what it’s worth, the majority of bets placed in the gambling markets aren’t predicting a good outcome for bitcoin. Accroding to Ed Pownell, a company spokesperson at Bodog, of the 470 people who have wagered on the event, “310 people think the price will dip below $2,000 per coin.”

Bitcoin is up 186% in 2017.

Bitcoin Swings Ahead of Tuesday’s Big Decision

Disclosure: Several members of the Futurism team are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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This Altcoin Is Ready to Challenge Bitcoin’s Domination of the Crypto Market

While Bitcoin currently leads the cryptocurrency market in terms of adoption and market cap, some argue that other, newer cryptos are actually a better investment. Once proposed alternative is Litecoin. Sometimes referred to as the “silver Bitcoin,” this altcoin could prove superior based on four factors.

First, Litecoin’s algorithm is far simpler than Bitcoin’s, which makes it easier to run on graphics processing units (GPUs). This results in a lower barrier to entry for Litecoin miners in comparison to Bitcoin.

Second, Litecoin has a faster block generation speed. Processing a Litecoin block takes two-and-a-half minutes as opposed to Bitcoin’s 10. This decreases transaction fees, making the Litecoin cryptocurrency more attractive to investors.

Third, Litecoin is about to launch a “lightning network” that will improve its already superior ability to adapt to changes. This network will make it easier for Litecoin to scale as it gains more traction.

Fourth, Litecoin’s lifetime cap is higher than Bitcoin’s (84 million coins as opposed to 24 million). Once this cap is reached, miners will no longer be a part of the process, and this could decrease the security and stability of the blockchain supporting each currency.

While cryptocurrencies in general are increasing in popularity, the individual variants are constantly vying for market dominance. Perhaps Litecoin will come out on top, or perhaps it won’t — the primary characteristic shared by all cryptocurrencies right now is volatility, and only time will tell how the crypto market ultimately plays out.


Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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Goldman Sachs Chief Technician Predicts Bitcoin Will Rise to $3,600

It is a turbulent time for Bitcoin — the cryptocurrency has risen to highs of $2,850 and sunk to lows of $1,836 just in July alone. But now, an influential voice has entered into the equation — Goldman Sachs, whose chief technician Sheba Jafari has claimed, in a report to clients on Monday, that soon Bitcoin will rise to $3,600.

Jafari wrote that “anything above 3,000 (June 13th high) will suggest potential to have already started wave V, which again has a minimum target at 2,988 and scope to reach 3,691.”

Wave V refers to the Elliott Wave theory, described in his 1938 book The Wave Principle, which is a means of technically analyzing financial cycles using stages of growth and fluctuation. Wave V indicates the final period of growth in which “news is almost universally positive and everyone is bullish.”

Despite Bitcoin’s variable month, which also involved a severe hack and a potential crypto civil war being avoided, 2017 has been an astonishingly successful year for the cryptocurrency — and cryptocurrencies as a whole, for that matter.

Bitcoin has risen from $997 to today’s rate of $2,512, which is an increase of 151 percent. Correspondingly, it is being used ever more for real world applications. It is now accepted as a legal form of tender in 260,000 stores in Japan, and many countries, such as South Africa, are now considering how to regulate it — which is a testament to the cryptocurrency’s growth and potential legitimacy.

 

Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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Spoiler Alert: Blockchain is About Far More Than Just Crypto

Blockchain

Blockchain on the brain and I can’t sleep.

There is a fundamental problem with the way I’m hearing blockchain discussed. I’ll be skipping over a lot of central aspects of the technology, so if you are unfamiliar, please check out the Satoshi white paper here, the Ethereum white paper here, and the Gnosis white paper here. These will give you a good starting point on blockchain fundamentals and what’s going on in the current world of crypto currencies, although crypto currencies have been discussed since the 80’s.

cryptocurrency ubi blockchain automation
Image Source: Stefan Bohrer/Wikimedia

Let’s start with the fundamental misunderstanding of blockchain technology solely as a currency. It’s easy to see why this would be the default perception (after all, the bitcoin white paper is titled “A Peer-to-Peer Electronic Cash System”). As early as 9,000 BCE, people were using grain for money, and over time money has been represented by a variety of objects, including shells, gold coins, and paper. Historically, people have looked to objects that are scarce, hard to replicate, and durable as a form of currency. Some forms of currency have had commercial use, while others have solely acted to represent value. For example, our USD is a piece of paper not good for much other than paying for stuff (see fiat currency). Silver, on the other hand, is useful for many industrial applications.

Blockchain is more like silver than fiat currency. If we believe that blockchain is inherently valuable as a building block for future business models, we should stop thinking of it simply as a currency, and more as a platform that is going to change the way we build all kinds of systems. Blockchain tokens represent the first time that a digital asset is able to exist in one place at one time, securely and with certainty. By thinking in these terms, I believe that we will be able to expand our view of the possibilities for what this technology can do. But how will these businesses get built?

ICOs in the house! ICO stands for Initial Coin Offering and involves the launching of a new token on a blockchain. ICOs certainly have the potential to change a lot about how companies get funded in the future. However, we should all realize that there are reasons for the SEC and their regulations around who can invest in private companies, the primary reasons being to protect individuals from getting scammed, and keeping them away from assets whose risks are tough to understand and can lead to bankruptcy. Typically, these private investments are restricted to qualified investors because rich people “can afford” the risks of potentially losing their money and should have (or can hire) the expertise to understand complex financial instruments.

Being a libertarian, I’m not a fan of protectionist regulations, but the rules were put in place for explicit reasons, and those reasons haven’t changed. A general best practice is for people to save the extra money they have in a combination of safe and risky assets in a measured way. Now, there is excitement about the ability for anyone to participate in ICOs, because at this time they are largely unregulated. However, if the only difference is that now any person can send crypto to fund / invest in an early stage company, that will almost certainly wind up being regulated in the same way investments are currently regulated. Yes, the ICO market is very hot and yes, some of these projects are getting massive amounts of funding very quickly, but let’s take a step back and look at the bigger picture.

Cryptocurrency

Over the past few years there have been many individuals that have had massive windfall returns from their investments in blockchain protocols and specific tokens. Let’s use an example of someone using Ethereum (ETH). “Alex” bought $10,000 of ETH in January 2016 for $1 because he thought it sounded cool and just let it ride. Now, Alex has about $4,000,000 USD equivalent in his digital wallet and probably feels pretty good. But there are two big questions here: 1) where does Alex spend all this newfound wealth and 2) what about taxes?

Anyone close to the crypto space realizes that there is a liquidity problem. (This is less true for Bitcoin and Ethereum, but if you are looking to go down that rabbit hole here ya go.) Here’s a simple example. Alex bought his crypto using Coinbase and now has $4MM USD equivalent of ETH in his wallet. He wants to convert that to real USD in his bank account so he can buy some stuff. If he hasn’t done much to increase his limits, it could take him several months to get this money out. There are other ways to get more liquidity with BTC and ETH, but the point here is that illiquid markets create artificial damming of value.

The tax question may be an even bigger element of friction keeping value locked up in the crypto markets. If Alex were to liquidate all $4MM USD, he would need to pay taxes on the $3.999MM worth of gains. However, if he keeps it in crypto, he can postpone that taxation event to a later date, maybe indefinitely. So between liquidity and taxation, a lot of value is tied up in the crypto currency markets that would otherwise flow elsewhere.

Cue the market for ICOs. ICOs are a way for anyone to buy company specific tokens. These tokens can be used for several purposes: 1) a form of ownership in a company, 2) a form of voting, and/or 3) as a way to participate in whatever product, service, or application the company is offering. The first two sound a lot like equity, which I will discuss more later, but in regards to purpose 3, many players with massive illiquid returns carrying with them large potential tax consequences now have something to spend those returns on that provide additional upside and avoid triggering a taxation event, #WinWin. Because while turning ETH into USD can be tough, sending ETH is very easy. Just point a transfer at a wallet id and send away (Want to try it? Hit me at 0xE8d8c7bE6E9F5Ed7A3Fa7ceF090Bb5044c2735Bf ;-))

Jokes aside, it is my feeling that these returns are being spent more like lottery dollars than they are being used as investment dollars. When a person wins the lottery, they often spend that money in careless ways. Similarly, many people who have experienced these massive windfall returns and don’t have an easy form of liquidity are viewing these token launches as a way to put some of that value to work. The result is a heavily inflated ICO market on the back of the massive returns driven initially by the earlier protocol appreciation. The truth is that 90% of startups do not work out, as will almost certainly be the case with companies raising via ICO. I just want to echo a recent AVC post and say, “Be cautious.”

Enough doom and gloom. Tokens are great and going to totally change the world we live in. Also, this massive shift of value through ICOs is going to fuel many incredible projects that will pave the way for future companies. One in particular working on the liquidity problem, for example, is Omega One.

While I’ve spent a lot of time talking about what’s going on in the ICO market, the point I really want to drive home is that crypto tokens on top of blockchain technology represent a fundamental advancement in technology. It is the first time a digital asset can exist in one place at one time with certainty, and while this has led to tokens being viewed and used as a currency, that is a narrow application. There are so many things that this will change- the way games are built, the way media is stored, the way personal data is monetized (anyone working on this?) are just a few initial targets, with many more left to be discovered. My hope is that by expanding the perspective of this technology, we start developing truly revolutionary ideas that will change the world for good.

This is not a new pattern. Early radio hosts just read the newspaper out loud, and early movie stars performed as if they were still on a stage. The problem with a new technology is that typically, the first move is to push old models on top hoping to make it better, but true innovation comes when we can see the technology for what it is and what it will make possible that before was impossible. One method I use to do this is an innovation chart.

Spoiler Alert: Blockchain is Far More Than Just Crypto

It’s simple. Write a list of old industries on the top and then list new technologies on the side. Then assess where they intersect and what opportunities that might unveil. For example, if you put something like cell phones as a new technology and maybe something like yellow cab as an old industry, you could arrive at an interesting place.

This is a space I’m spending a lot of time in and am always interested in talking to entrepreneurs working on cool projects, so please reach out!

Twitter: @lapecc

Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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A Bitcoin Civil War Has Been Avoided, at Least Temporarily

This Way or That Way?

Like a season premiere of the popular HBO series Game of Thrones, the finance world is eyeing July 31 with both anticipation and slight trepidation.

An ongoing disagreement between miners and developers over the future of Bitcoin’s blockchain has had many Bitcoin analysts, investors, and enthusiasts fearing a potential split in the cryptocurrency at the end of this month. However, as a moderate solution seems more likely to be accepted, fears of a network hard fork are beginning to die down.

As previously reported, the Bitcoin crisis is the result of a clash of ideas for the future of the popular cryptocurrency and its blockchain’s transactional capacity. Miners wanted to increase Bitcoin’s block limit, while developers proposed moving data off the main blockchain network.

The more moderate solution, which was activated on July 22, is Bitcoin Improvement Proposal (BIP) 91. This protocol update prevents a hard fork from occurring by providing a compromise between what miners and developers want. Last week, more than 80 percent of bitcoin miners expressed support for BIP91, passing the threshold required for implementation.

Temporary Calm

This is definitely good news, but the potential for chaos hasn’t been entirely avoided. It’s only July 25, so five days remain before the required July 31 lock in. More than 51 percent of miners must begin using the BIP91 protocol by then for it to be fully adopted.

For now, though, it seems less and less likely that a hard fork is coming between July 31 and August 2. As if anticipating future smooth sailing, bitcoin’s value has risen to $2,729 as of this writing. That’s a $570 increase over last week’s value.

Still, some are quick to point out that this current period of peace could be temporary.

“Segwit2X locked-in on July 21st with +90% miner support so many people could now be tempted to assume that the scaling debate is over and Bitcoin is now good to scale to the masses,” Juan Manini-Rios, CEO of SHA256 Trading, wrote in a Medium post. “Unfortunately, that is not the case at all and a Bitcoin fork is still almost certain.”

For AQR Capital Management former managing director Aaron Brown, a currency split may not be that bad for Bitcoin. “It is the rule, not the exception, that currencies evaporate due to hyperinflation, government default or expropriation, or a losing a war,” he told MIT Tech Review. “People do not use them because they have faith in their long-term survival, but because they can facilitate transactions today.”


Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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Central South African Bank Will Experiment With Bitcoin Regulation

South African Bitcoin Experiment

The South African Reserve Bank, which functions as the country’s central bank, is partnering with blockchain-based solutions provider Bankymoon to experiment with digital currency regulations. Bankymoon will serve as a “sandbox business” as the team works with Bitcoin and other cryptocurrencies with the ultimate goal of understanding and legitimizing the growing adoption of cryptocurrency.

Image Credit: fdecomite/Flickr
Image Credit: fdecomite/Flickr
Until now, the South African government has mostly ignored Bitcoin and other digital currencies, but these currencies are being used more and more in the nation among both individuals and merchants, so the government is trying to be more proactive. Bankymoon CEO Lorien Gamaroff commented to Business Tech, “The sandbox will only be Bitcoin-focused during this initial phase, but is focused on applying broad regulations to all cryptocurrencies.”

Support For Regulation

As with any new technology that becomes mainstream, regulation becomes an issue. However, cryptocurrencies and the blockchain technology they are based upon are, by nature, decentralized. Therefore, there is, at some level, a fundamental tension between the government’s need or desire to regulate and the structure of the technology (not to mention the intent of its users).

However, government regulation of digital currencies could legitimize the technology. Gamaroff believes that regulations will strengthen and give legitimacy to Bitcoin and other digital currencies for novice users, “I think the regulation will move things along and make people on the street comfortable with Bitcoin. With these new regulations, these everyday people can now trust that Bitcoin is not just for hackers and criminals.”

The initiative also enjoys the support of some of South Africa’s leaders and biggest businesses. Former First National Bank CEO Michael Jordaan, for example, believes that digital currency is on track to render central banks and the entire traditional banking model obsolete. Only time will tell whether the government can involve itself in a meaningful way with this kind of regulation — or if the technology will simply continue to expand without that type of constraint.

 

Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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As Cryptocurrency Prices Recover, “Bitcoin War” May Be Averted

After a rough weekend of historic lows, Bitcoin prices began to recover on Monday, reaching over $2,300, signaling a crisis averted — for now. It’s also an optimistic sign that the potential network hard fork may be avoided, with more bitcoin shareholders, miners and developers, warming up to a proposed solution.

Bitcoin prices dropped dramatically beginning Friday and continuing well into the weekend. Economic forecasts had suggested that the most turbulent period in the cryptocoin’s history was imminent. It didn’t come as a complete surprise, as many were expecting the so-called Bitcoin Civil War to ensue between miners and developers, after a deadlock in deciding what direction the cryptocurrency should take amidst increased blockchain traffic.

Miners wanted to increase Bitcoin’s block-size limit, while developers have proposed moving data off the main blockchain network, which would diminish the influence miners wield. The scaling solution in question is the Bitcoin Improvement Protocol (BIP) 91, which makes the SegWit2x update and the BIP 148 compatible. Essentially, it would make it easier for the SegWit2x update to be adopted, while at the same time avoiding the split that BIP 148 might cause.

To lock in by July 31, BIP 91 only needs 80 percent miner support — unlike BIP 148, which would require 95 percent. With increased support for BIP 91, the expected July 31 to August 2 bitcoin split could still be averted.

Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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The Finance World Is Preparing for a Bitcoin Civil War

A House Divided

Bitcoin may be the most popular, longest standing cryptocurrency, but that doesn’t mean its path forward is without potential conflict. In fact, analysts are now predicting that the cryptocurrency is on the brink of a civil war that would put Captain America and Iron Man’s to shame.

Like the Marvel story, the Bitcoin rift is an ideological one. On one side of the divide are the bitcoin miners who oversee every transaction made on the Bitcoin blockchain. On the other side are the developers that have maintained Bitcoin’s bug-proof software — they’re led by a group called Core.

The problem of how to handle increased Bitcoin traffic has caused the rift. The former group wants to increase Bitcoin’s block size limit in order to process more transactions. Meanwhile, the latter wants to move data off the main network, which would diminish the influence of miners and essentially make Bitcoin more enterprise-friendly, like its main competitor, Ethereum.

“It’s moderates versus extremists,” Stephen Pair, chief executive officer of bitcoin wallet provider BitPay, told Bloomberg. “It depends on how much a person values the majority of people staying on one chain at least for a little while longer, versus splitting and allowing each [to pursue] their own vision for scaling.”

Of Forks and Roads

What’s ironic about this situation is that it’s made possible by blockchain’s decentralized nature, which is often heralded as one of the technology’s most interesting features. The absence of a central Bitcoin authority has made it difficult for a consensus to be reached.

At any rate, a compromise called the SegWit2x update has been developed, and it should be available by July 21. It changes how some of Bitcoin’s data will be stored while also doubling the block size limit.

Though support for SegWit2x is reportedly high, no one knows for sure how it will be received until it is actually released. “It’s a high-stakes game of chicken,” Arthur Hayes from Hong Kong-based BitMEX told Bloomberg. “If you’re a trader, there’s a lot of uncertainty as to what happens.”

Bitcoin has been enjoying a continuous upward trend in market value for the past several months — at one point, it was even more valuable than gold. We’ll have to wait to see if this growth can continue past the next couple of weeks, which will possibly be the most turbulent in Bitcoin’s history. As Hayes said, “Once there’s a definitive signal about what will be done, the price could move very quickly.”

Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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An Anonymous Ether Trader Just Made $200 Million in One Month

0x00A651D43B6e209F5Ada45A35F92EFC0De3A5184

Nope, that header isn’t a typo. That’s the identification code for the virtual wallet of an anonymous cryptocurrency trader that’s made more than $200 million in just over a month. Supposedly, this unknown trader was able to raise their cryptocurrency assets from $55 million to $283 million in that short span of time; a 413 percent accumulated profit from Ethereum blockchain’s digital money, ether.

In an Instagram post, someone (or maybe several people) purporting to be the trader in question said, “I get many private messages asking how much ether I have. One of the cool things about Ethereum is that all wallets around the world are transparent and open for everyone to see. And this is my wallet’s savings.”

While the amount of earnings from cryptocurrency trading is incredible, it isn’t at all impossible. Recently, the values of both bitcoin and ether have been going up. The total value of cryptocurrencies reached an all-time high on June 6 when it surpassed $100 billion, according to Bloomberg.

Anonymity and Security

Faced with the growth of cryptocurrencies, experts are asking whether anonymity is beneficial or not. It’s certainly one of the key reasons cryptocurrencies are becoming so popular. “One of its more important features is that you don’t have identities tied to this,” Spencer Bogart, research head at venture firm Blockchain Capital, said in Bloomberg “This financial privacy is an important characteristic.”

That’s also the source of some of its troubles, though: there have been a handful of cyberattacks that asked for ransom in bitcoin, and that trend could continue as it becomes more widely used. “The credibility of virtual currencies will not rise if they are used for criminal purposes,” a draft online currency legislation by the European Parliament noted. “In this context, anonymity will become more a hindrance than an asset for virtual currencies.”

To this end, would tying digital wallets to identifiable persons be a problem for a mainstream adoption of cryptocurrencies? For a cryptocurrency like ether — which is used to pay for applications that run on the Ethereum blockchain — it may not be such a big deal. It could even help ether avoid having its reputation sullied by cyberattacks like bitcoin. At present, ether seems to be moving into the mainstream. The rise of Initial Coin Offering (ICO) is helping, and Ethereum is working to make their transactions even more efficient and powerful.

For now, though, it wouldn’t hurt to be careful. As Peter Denious from Aberdeen Asset Management told Bloomberg, “A lot of lessons will be learned. A lot of money will be lost before a lot of money can be made.”

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Wall Street Expert Predicts Bitcoin Will Reach $55,000 in 5 Years

Modern Gold

Tom Lee, a Wall Street strategist who works at Fundstrat, has predicted that the price of bitcoin will continue its exponential rise until it reaches $55,000 by 2022. He bases his prediction on the economic principles of scarcity and market instability.

The Entire History of Bitcoin in a Single Infographic
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Lee argues, essentially, that bitcoin is subsuming the role that gold previous played in the economy. It has become a solid and dependable store of wealth in a time when we have seen recessions and market turbulence effecting people’s savings in their own currency. This is particularly the case in countries where the government controls the currency to achieve a desired effect, as is the case in China and Japan.

Many have criticized bitcoin for its turbulence — it has now reached a volatility of 75 percent — and argue that, for this reason, it cannot be the safe store of value that Lee sees it as. Lee, though, told Coin Telegraph that “gold’s volatility approached 90 percent from 1971 to 1980 as the U.S. abandoned the gold standard — hence, we expect this [bitcoin’s volatility] to improve over time.” Coincidentally, bitcoin exceeded the value of gold earlier this year.

Bitcoin’s Rise and Bitcoin’s Results

Bitcoin’s rise has been so meteorotic that it is quite unlike any other currency — or asset, depending on who you ask — in recent memory. To give a quirky example, in May of 2010, a developer bought two pizzas for 10,000 bitcoin. These, in total, would now be worth around $25 million, which is enough to buy a 720-year-old Magna Carta — given that one sold for $21 million in 2007.

Bitcoin arguably lead the vanguard for cryptocurrenies moving from a quirky financial system in tight-knit tech communities to a talking point for major financial planners. It is now fundamentally changing the way we look at economies in addition to being the leading example of blockchain technology. Simon Taylor, co-founder of a blockchain venture capital fund, said in an interview with Government Office for Science that the tech “brings us near instant asset transfer, asset movement, and security of data movement,” and that blockchain will have a similar effect on exchange that the internet did on communication.

Bitcoin has now become large enough for entire countries to consider upending transaction systems that have been in place since the advent of currency itself. India and Sweden in particular are looking to mimic the systems to produce the first cashless societies in modern history. This is perhaps the ultimate testament to how significant the cryptocurrency has become.

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China and Japan Are Largely Responsible for the Current Success of Cryptocurrency

China and Japan’s Crypto Craze

The age of cryptocurrencies is upon us, and two countries in particular have been instrumental in their stratospheric rise: China and Japan.

Cryptocurrencies have become popular in China due to the government’s stringent control of the yuan — a power they occasionally exercise by artificially devaluing the currency for trading purposes. With private wealth in China growing, affluent individuals have found a more stable and accessible alternative to the yuan in cryptocurrencies.

Additionally, China has an abundance of cheap energy and hardware, which facilitates crypto mining (the process through which new blocks in the blockchain are created and transactions are verified). Chinese exchanges run mining “pools” to generate these blocks, and these efforts constitute 60 percent of Bitcoin’s total hashrate (the speed at which Bitcoin operations are completed).

Japan got its foot in the cryptocurrency door at the beginning of 2017 when the market in China experienced an institutional and systematic crackdown, with the most potent measure being a ban on all cryptocurrency withdrawals. This caused an increase in Japan’s trading volume, which grew from one percent to as high as six percent.

Cryptocurrency adoption was further amplified by currency turbulence in the country. Quantitive easing lead to extremely low interest rates, which have occasionally even become negative, meaning that it costs an individual to save money. As in China, cryptocurrencies therefore became viewed as a more stable asset than the native currency, so more people have chosen to invest and store their money in them.

The final piece in the cryptocurrency success puzzle for both countries is increasing institutional acceptance. In China, this takes the form of the country’s Royal Mint, which has invested resources and money into digitizing the yuan and promoting blockchain technology. Japan, meanwhile, began accepting payments in stores using cryptocurrencies earlier this year, and its three largest banks — MUFJ, Mizuho, and SMBC — have all backed the country’s largest Bitcoin exchange, bitFlyer.

A Worldwide Revolution

The enthusiasm with which China and Japan have embraced cryptocurrency systems has contributed to their worldwide success. Virtual currencies have become more popular and valuable than the vast majority of people could have anticipated upon their inception around a decade ago. The value of a single bitcoin has risen from roughly $0.00075 to $2,500, and the market cap for all cryptocurrencies has exceed $100 billion.

The success of cryptocurrencies is also reflected in their increasing adoption by formal institutions. Wall Street is making moves to start using cryptocurrency systems by next year, a Swiss town called Zug has begun to accept payments in bitcoins, and the Gemini Trust in New York has been licensed to trade ether.

However, some worrying news concerning cryptocurrencies has emerged as well. Recently, in spite of claims that the systems are highly secure, hacks have lead to personal information being leaked and exchanges have been robbed, one to the tune of $79 million.

In addition, while cryptocurrencies may be more stable assets than the native currency in Japan and China, they are not absolutely stable. In fact, they are currently far from it, and though prices continue to rise, rapid drops are not uncommon, and public opinion can have a major impact on value.

Mark Cuban illustrated the issue perfectly — when he took to Twitter to assert that Bitcoin wasn’t a currency, its valuation dropped rapidly. Even more recently, Ethereum lost $4 billion worth of market value when a bogus story that its founder, Vitalik Buterin, had died in a car crash was published on 4chan.

Cryptocurrencies are clearly on the rise, and due to their successes, they can no longer be dismissed as a niche monetary system. The pertinent question is will this rise will lead to the worldwide adoption of an entirely new currency and finance system?

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These Technologies Are Critical to Today’s Businesses, According to Survey

Critical Roles

Leaders in the business world are recognizing the importance of new technologies like artificial intelligence (AI) and the Internet of Things (IoT). A survey by the CNBC Global CFO (Chief Financial Officer) Council has found that more than one in four CFOs (26 percent) consider AI and machine learning as critical to their company, and nearly half (44 percent) think that it is “very important.”

Image Credit: CNBC
Image Credit: CNBC

The survey is a key indicator of trends and viewpoints in big business, taking account of the views of some of the largest private companies worldwide which collectively have a market cap of more than $4 trillion in a variety of sectors.

AI’s role in business may be even more significant than this survey suggests, as there is an overlap between this category and the second most critical technology in the survey, the IoT. Most IoT systems utilize AI, particularly to learn, streamline themselves, and self correct.

Although Bitcoin and cryptocurrencies are making headlines — such as Bitcoin prices soaring to over $2,000 and China testing a cryptocurrency for potential national implementation — they are not a major concern among these massive corporations. About 23 percent said that technology related to virtual currencies was “not at all important,” and only 3 percent said that it was critical.

Technological Future

These results show a real-world reflection of the trends in business, cutting through the marketing, jargon, and verbiage surrounding technologies. They show that AI has not just become critical in some industries, but has permeated the business world itself, changing the very way companies operate.

It is being applied across the board to the entire spectrum of the production and consumption processes: from being used to help hire employees, to replacing cashiers in retail stores, to taking the jobs of money-management workers.

AI Forecast for 2017
Click to View Full Infographic

Blockchain did not rank highly on this year’s survey, but this may be because it is only having a fundamental effect in a small number of sectors — such as humanitarian aid and some aspects of the food industry — and because these statistics show the current world, not a forecast of the one to come.

Companies are extremely interested in blockchain technology, but it has not become crucial to them yet because of issues of risk and integration. Blockchain likely will be ranked much more highly on the survey in the coming years. The writing is on the wall already: Wall Street is trying to implement it by 2018, IBM has launched its own cryptocurrency, and cities like Dubai want it to be the default for their economies by 2020.

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One of the World’s Biggest Bitcoin Exchanges Has Been Hacked

Bithumb

One of the largest bitcoin exchanges in the world has been hacked, and 30,000 customers’ data has been compromised, according to a report from Yonhap News.

One of the World’s Biggest Bitcoin Exchanges Has Been Hacked
Image Source: Zach Copley/ Flickr

Bithumb is based in South Korea, and the country’s watchdog Internet and Security Agency is investigating after some customers said they lost money in the attack.

Bithumb did not immediately respond to Business Insider’s request for comment, though it says users’ passwords were not stolen, according to Yonhap News.

It’s one of the busiest exchanges in the world. On Tuesday, Motherboard reported it was the fourth-largest globally in terms of volumes of all cryptocurrencies traded daily; by Wednesday, it had jumped to first place.

In a statement, Bithumb said (via the cryptocurrency news site BraveNewCoin) that an employee computer was compromised, rather than its core servers:

“The employee PC, not the head office server, was hacked. Personal information such as mobile phone and email address of some users were leaked. However, some customers were found to have been stolen from because of the disposable password used in electronic financial transactions.”

Cryptocurrency

BraveNewCoin reports “billions” of won has been stolen. For context, 1 billion won is about $870,000, or £670,000. As such, it would be markedly smaller than some previous hacks of bitcoin exchanges, such as Mt. Gox, where $460 million in bitcoin (at then current prices) disappeared in 2014.

Some Bithumb users were victims of “voice phishing,” where someone phoned them up saying they worked for Bithumb and scammed them out of funds, according to BraveNewCoin.

The incident underscores the fact that it is not just investors and digital-currency enthusiasts who are excited by the current surge of interest in cryptocurrencies — criminals are also eyeing up businesses that hold bitcoin and its sister currencies, and no one can promise absolute security.

There has been a wild surge of interest in bitcoin, Ethereum, and other digital currencies over the past month, with prices surging to all-time highs. Bitcoin is currently worth about $2,600 per coin, with a total global market cap of $43 billion, while Ethereum trades at about $260 with a market cap of $24 billion, according to data from CoinDesk.

Get the latest Bitcoin price here.

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Finance Expert Predicts Bitcoin’s Value Could Soar as High as $4,000

We’re barely past the halfway mark, and already Bitcoin is having a big year. The value of the cryptocurrency soared past $1,000 in January and then again in February. By March, its value surpassed that of gold, and on May 10, it hit what was then a record-high value of more than $1,700 per coin. In June, Bitcoin set a new record, closing above $3,000 before finishing the month at close to $2,500.

In all, Bitcoin’s first-half gain was approximately 168 percent this year, which has led various commentators, including Mark Cuban and Charles Schwab chief global investment strategist Jeffrey Kleintop, to suggest that the cryptocurrency is in a bubble.

The latest expert to weigh in on the future of Bitcoin is Goldman Sachs head of technical strategy Sheba Jafari, who sent a note to clients on Sunday, July 2, advising that while the value of Bitcoin may drop, it is ultimately likely to go even higher.

According to Jafari’s note, which was published by Zero Hedge, Bitcoin is still in the midst of a “corrective 4th wave” during which the value may fall as low as $1,857 — a drop of around 25 percent. According to Jafari, Bitcoin investors shouldn’t worry about this drop very much, though, because the currency could hit a record value during its fifth wave, perhaps as high as $3,915.

Whether the value of Bitcoin does soar toward the $4,000 mark or not, 2017 will still go down as a historic year for digital currency.

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India is Digitalizing Everything From Cash to Citizen Identification

Cash Bans and Digital Plans

Last November, as part of a controversial master plan to make India a cashless and digitized society, the Prime minister Narendra Modi announced that Rs500 and Rs1,000 notes were to be demonetized, which effectively stripped the value of 86 percent of the country’s circulating cash.

The move was one of the last stages of the plan, after the groundwork had been laid by introducing the Aadhaar biometric database, which gave 95 percent of the population a digital proof of identity in 2016. Aadhaar was augmented by India Stack, which allowed people to store and share information such as addresses, bank statements, employment records, and tax filings — all of which were ratified by the Aashaar system.

The key aspect of India Stack was giving everyone in the country access to one of 11 Payment Banks which could manage payments and transfers but not issue loans. Eliminating cash forced people to adopt this new digital infrastructure, causing 270 million people to open bank accounts and 10 billion dollars to be deposited in the first three years — this generated momentum for what may evolve into the first cashless society in the world.

A Case for Cashless?

The decision has significant ramifications not only for India, but for the rest of the world as well. For India, there will be friction initially because of the preeminence of cash-based transfers in the society: it was estimated earlier this year that 78 percent of transactions in the country still used cash.

Cheap Tech Fixes That Could Transform Life In Developing Countries
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This may be justified, though, by the longer term gains. The move could curb corruption and “black money” in India as well introduce a more robust, effective tax system. It could also make payments a completely secure affair — bringing an unprecedented formality and modern bureaucracy to the Indian economy.

The worldwide ramifications of India’s digitization are serious too. Raoul Pal, former manager of GLG Global Macro Fund, wrote in an editorial for Mauldin Economics, “It may well be a bitcoin killer or at best provide the framework for how blockchain technology could be applied in the real world.”

Even if it does not herald the end of bitcoin, the move will prove an interesting experiment to observe for other countries looking to go cashless, such as Sweden, which has seen a 40 percent reduction in cash and coin in circulation.

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There’s an Easy Way You Can Bet on Bitcoin — But It’ll Cost You

Investing in Bitcoin

Want to invest in bitcoin but don’t know where to start? There’s an exchange-traded fund for you.

But wait, there’s a catch: the ETF shares are double the price of the cryptocurrency itself.

There’s an easy way to bet on bitcoin — but it’ll cost you
Image Source: tiendientu vietnam/Flickr

In order to buy the Bitcoin Investment Trust(GBTC), provided by Grayscale Investments, investors have to pay a 106% premium to the actual bitcoin rate, according to data from financial analytics firm S3 Partners.

While that may seem like a steep price to pay, consider that the ETF surged 248% in May, more than three times the 72% increase for the bitcoin-US dollar currency cross. Still, that degree of outperformance is relatively anomalous, with actual bitcoin beating the fund in two of the prior three months.

So why does the GBTC ETF command such a lofty premium? It’s simple supply and demand. As bitcoin demand has grown exponentially, the fund’s shares outstanding have remained around 1.7 million since its inception in 2015. Don’t expect that to change.

“With the operational risk of buying and holding actual bitcoins to support ETF creation very high, and difficult and expensive to insure, it is unlikely that GBTC’s outstanding share amount will climb above 1.7 million anytime soon,” said Ihor Dusaniwsky, the firm’s head of research.

The lack of new shares makes it very difficult for bearish bitcoin speculators to actively short the ETF, simply because there are so few units available to borrow. And the ones that are available can be prohibitively expensive. This creates a situation where expanding bitcoin premiums can go unchecked, aided by a lack of downward selling pressure, according to S3.

Financial Analytics

However, it’s important to note that paying a lofty premium for the GBTC ETF can also be a money-losing proposition, even if an investor makes a correct bet on the direction of bitcoin. Once demand for the fund starts to wane, the current 106% premium will start to collapse, making it difficult for new buyers to sell out of positions at a profit.

But the ETF wasn’t always this expensive. Prior to the recent spike in bitcoin, the fund traded at an average premium of 10% during 2017. It’s only gotten so stretched since demand started exploding in May.

There’s an easy way to bet on bitcoin — but it’ll cost you
Image Source: S3 Partners

With all this considered, the final question becomes: is there any way to wager on the decline of this GBTC ETF premium? Not unless you’re willing to shell out, according to Dusaniwsky.

“There are a substantial amount of potential profits to be made as the premium eventually erodes,” he said. “Unfortunately, today there is no way to get into this trade in size.”

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Ethereum is Up 4000% This Year, And The World’s Elite Are All Buying In

Ethereum Goes Up

MGT Capital, the company run by John McAfee, said it would start to mine Ethereum — the bitcoin rival that has surged nearly 4,000% this year — in its latest bid to turn a profit. Although ethereum has since dropped in value, it’s an alteration that was predicted by experts, given its unprecedentedly excessive rise. And as this latest announcement highlights, tech experts and investors alike are confident that its price will soon surge again.

MGT, which is publicly traded over the counter, has pitched itself to investors mostly as a cybersecurity company. Cybersecurity is where McAfee made his mark as the founder of the antivirus company that bears his name.

But McAfee has more recently started to tout cryptocurrencies. He said last month that investments in bitcoin would help put MGT back in the black by the end of the year.

Ethereum is like bitcoin in that it can be “mined” by computers that solve complex computations. MGT said Friday that it reached an agreement with Bit5ive LLC to buy up to 60 graphics-processor-based mining computers to help mine for ether.

Cryptocurrency

“We are more convinced each day of the growth and value of digital currencies, and our company is uniquely positioned to be a leading provider of processing power to relevant blockchains,” McAfee said in the statement.

Ethereum is Up 4000% This Year, And The World’s Elite Are All Buying In
Image Source: Zach Copley/ Flickr

McAfee’s foray into the cryptocurrency space comes when others have been sounding the alarm after a huge run-up in prices.

In early June, billionaire Mark Cuban said it was evident that bitcoin was a bubble, tweeting, “When everyone is bragging about how easy they are making $=bubble.”

Days later, Goldman Sachs warned that bitcoin was looking “heavy” and that a drop to between $2,330 and $1,915 a coin was looking likely. Bitcoin put in a low of $2,076 just a day later after the scaling debate came back into focus as the bitcoin-mining firm Bitmain outlined its “contingency plan” for if a hard fork were to occur. Bitcoin has recouped those losses and now trades at $2,708.

Ethereum is up by 3,964% in 2017. As for MGT, its stock is up by 42% year-to-date.

Get the latest Bitcoin price here.

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Why a Respected CEO Believes “Bitcoin Is a Tool for Freeing Humanity”

Bitcoin Frenzy

Recently, there has been a lot of hype and — equally — criticism of Bitcoin. The cryptocurrency has, just this far into 2017, jumped well over 100 percent in value, garnering suspicion and questions regarding its potential for long-term success. However, besides these doubts, Naval Ravikant, an investor and the CEO and co-founder of Angel List, has come to Bitcoin’s defense on Twitter:

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Claiming that Bitcoin could free “humanity from oligarchs and tyrants…” Ravikant asserts that the quick rise in value that is making many wary of Bitcoin is just superficial. But how could a cryptocurrency free humanity of tyranny?

Well, through the potential power of blockchain. The blockchain ledger, which includes cryptocurrencies, essentially streamline the financial world. They eliminate a need for a “middle-man,” so-to-speak, so institutions like banks would no longer be necessary for a society based in blockchain. And while that might seem like a small difference, think about how many different aspects of a modern society rely on even the simplest financial transactions.

Financial Futures

Are Ravikant’s opinions of Bitcoin extreme or off-base? It’s impossible to say, as some consider the cryptocurrency to be a bubble about to burst, but the potential blockchain itself has to change the way that societies operate is very real. It’s not just a passing phase, as many thought with the emergence of seemingly joke cryptocurrencies like Dogecoin. It is something that, if adopted on a wider scale — which has already begun in countries like Japan — the authorities who currently control consumption and financial transactions would no longer be relevant.

The Entire History of Bitcoin in a Single Infographic
Click to View Full Infographic

Money makes the world go round. Peace, suffering, conflict, power; so much of modern life centers around transactions. From information to finances, all of these transactions rely on some middle step, some outside authority or management. This has made countless people over the years dependent on these outside power structures, creating control and dominance differences that have the potential to create what could be construed as “tyranny.”

Now, this might be pushing current boundaries by saying that Bitcoin, just one specific blockchain, could make such a big change. So, one some level, Ravikant is stretching this. Bitcoin itself is still relatively unstable and there is some possibility that its most recent rise in value is a bubble that is certain to eventually burst. It is only one of multiple cryptocurrencies and blockchains, none of which are close to completely taking over any economic structures yet. However, if blockchain’s potential coupled with Bitcoin’s popularity eventually leads to such a revolution, perhaps tyranny and oligarchs would truly become obsolete.

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China Becomes First Country in the World to Test a National Cryptocurrency

Benefits of Digital Currency

China’s central bank — the People’s Bank of China — has developed a prototype of a cryptocurrency that it could end up in circulation in the near future. It would be introduced alongside the China’s primary currency the renminbi (also called the yuan). China will be simulating possible scenarios and running mock transactions using the cryptocurrency with some commercial Chinese banks.  

The Entire History of Bitcoin in a Single Infographic
Click to View Full Infographic

The potential benefits of developing a digital currency are significant, particularly in China. First, it would decrease the cost of transactions, and therefore make financial services more accessible, which would be a big help to the millions of people in the country who are unconnected to conventional banks. Second, as it would be supported by blockchain, it has the potential to decrease the rates of fraud and counterfeiting, which would be of service to the government’s attempts to reduce corruption — a key concern. Third, it would make the currency easier to obtain, which would increase the rate of international transactions, allowing for more trades and faster economic growth.

The Rise of Cryptocurrencies

Since Bitcoin’s humble beginnings back in 2009 (when it was only valued at around 0.0007 USD) the digital currency, and the very idea of cryptocurrencies in fact, has grown monumentally. The total market cap of cryptocurrencies on April 1st of this year was over $25 Billion. A single Bitcoin is now worth more than $2,500. Now many national economies, as China’s plan shows, are considering the idea of developing their own variant.

Although China’s experimental approach to simulate a self-developed cryptocurrency’s usage is the first of its kind, other countries and institutions have made strides in that direction as well. The Deputy of Russia’s central bank has emphatically stated that “regulators of all countries agree that it’s time to develop national cryptocurrencies.” Over 260,000 stores in Japan will begin accepting Bitcoin as legal tender this summer, and big banks like Santander have announced plans to develop their own version.

Cryptocurrencies have the potential of revolutionizing not only the business world, but many methods of transaction. There has already been talk of using cryptocurrencies to administer Universal Basic Incomes due to their traceability, as well as for the delivery of human aid; the potential for which was demonstrated by a recent experiment to help refugees in Jordan by the UN.

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Ether is King of Cryptocurrency — For Now

Ether’s Rise

Bitcoin has achieved record highs this year: currently, it’s worth almost three times as much as it was for most of January. Even so, Ether’s success this year is eclipsing Bitcoin’s, given that Ether has risen an unbelievable 4,500 percent in 2017. When we rang in the new year, Ether was worth only around 5 percent as much as Bitcoin, but as of this week, The New York Times reports that “outstanding units of the Ether currency were worth around $34 billion. . .82 percent as much as all the Bitcoin in existence.” 

The Entire History of Bitcoin in a Single Infographic
Click to View Full Infographic

Ether is now backed by not only the usual tekkies, but major corporations such as Accenture, Microsoft, Toyota, Intel, and JPMorgan Chase. These companies are becoming part of Ethereum’s planned global computing network (which will require Ether to use) on the ground floor. Furthermore, Ethereum is gaining traction among cryptocurrency users, with 94 percent feeling positive about the Bitcoin alternative. Only 49 percent report feeling positive about Bitcoin, according to CoinDesk‘s report on a recent survey. Recent trends seem to indicate Ethereum’s value will surpass Bitcoin’s soon — an event cryptocurrency enthusiasts have termed “the flippening.

Ethereum and Bitcoin share many important qualities. Both are maintained and hosted by volunteers all over the world, and tracked by a network of computers, rather than a company or government. Private exchanges establish the prices of both, and people can buy and sell them at market rates or trade them.However, Ethereum was created to do far more than work like digital currency. The Ethereum computer network can also run computer programs and do computational work; functions otherwise known as decentralized applications, or Dapps. This has attracted a massive community of programmers who all contribute their labor to improving the software. In turn, companies have started using the Ethereum network as a base for other programs. JPMorgan Chase, for example, is creating a monitoring system for trading. Some corporate Ethereum users are creating their own Ether currency-free versions of the software, although many observers believe that these software programs will eventually be connected to the Ethereum network.

The Realities Of Cryptocurrency

The rapid boom of both Ethereum and Bitcoin showcase not only the massive potential of blockchain technology, but the volatility of the cryptocurrency world. The Bitcoin community has, at times, been plagued by technical issues and struggles with hackers demanding ransom, and illicit activity like online drug sales. Ethereum has problems, too — like the DAO heist in 2016. However, challenges like these are not unexpected in totally new systems, and both Bitcoin and Ethereum have been robust enough to recover well. NYT reports that their combined value is now “worth more than the market value of PayPal and is approaching the size of Goldman Sachs.”

The idea that companies and individuals will choose to use the computing capabilities of the Ethereum network, as well as the currency, is still speculative. More conservative investors want to see extensive evidence before they make this kind of choice, and right now they don’t have that much to go on.

Meanwhile, Bitcoin’s choice to use retail acceptance of its currency as an entry into mainstream commerce through companies like Expedia and Overstock.com is less risky. Even still, that strategy does run the risk of less savory “retailers” — like drug traffickers. blockchain technology, the basis for the software, is clearly secure, but Ethereum’s strategy may prove more successful over time.

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The Cryptocurrency Market is Exploding. Here’s What You Need to Know.

A Major Spike

On April 1, 2017, the total market cap for all cryptocurrencies was slightly higher than $25 billion. Roughly two months later, the cap exceeded $100 billion. In just over 60 days, the value of cryptocurrencies surged by 300 percent. So what is going on?

The leading cryptocurrency, Bitcoin,  recently made headlines by climbing dramatically in value (it’s currently sitting around $2,600 USD, about 160 percent higher than its value in April). But Bitcoin hasn’t been alone in this extreme growth. The cryptocurrency market as a whole has spiked in value within the last few months.

While those already invested in Bitcoin might be celebrating, this jump is clearly reason to pause for anyone considering entering the market. Historically, what goes up super-fast must come down — at least when it comes to the stock market. This has prompted many to call this rise a bubble, leaving investors to wonder when it will burst.

In an interview with Bank Innovation, cryptocurrency trader Jacob Eliosoff, who runs a Bitcoin-focused investment fund, explains:

Factor number one in the general price rise is just another of crypto’s periodic bubble[s]: see Nov 2013, March 2013, July 2011. Lots of coins which patently have no plausible long-term use case or value — the classic example is Dogecoin, an obsolete joke — have set new highs during this frenzy — a bad sign.

Author, professor, and game designer Ian Bogost has previously written about bitcoin for The Atlantic. He shared his view on the latest cryptocurrency surge in an interview with Mic, explaining how the investors themselves could cause a drop in value:

We’ve seen with these sort of ups and downs, these small groups of mostly Chinese pools end up with more than 50% of the capacity. And we don’t know anything about these organizations. Are they state controlled? The moment [there is too much consolidation in the mining pools], then effectively the platform is dead, at least as a currency.

Anyone looking for proof of the volatile nature of cryptocurrencies, specifically Bitcoin, got it when Mark Cuban publicly criticized the currency. After the billionaire entrepreneur claimed on Twitter that Bitcoin was in a bubble and not, in fact, a currency at all, the cryptocurrency dropped significantly in value, seemingly illustrating a fragile and unstable nature.

An Upward Trend

Whether due to historical precedent, a monopoly on investment, or simply an easily swayed investor pool, it seems pretty likely that this recent rise of cryptocurrencies will lead to some sort of drop. However, that doesn’t mean cryptocurrencies don’t have the potential to be a major player, if not the only player, in the future of finance.

The Entire History of Bitcoin in a Single Infographic
Click to View Full Infographic

One positive development is the increasing diversity of cryptocurrencies. While Bitcoin was long the definitive leader in the market, holding roughly 80 percent of the total market cap, others such as Ethereum are making major gains, knocking Bitcoin down to just about 50 percent. As TechCrunch writer Fitz Tepper notes, “The fact that these gains have come from currencies other than Bitcoin are a good sign that this is less of a bubble and more of a resurgence of interest in crypto.”

Other experts note that while drops in value are likely, they don’t signal an end to cryptocurrency by any means. As Brian Kelly, CEO and founder of global investment management firm BKCM, told CNBC, Bitcoin is “in the first years of what is likely to be a multi-year bull market. Of course there will be corrections and even crashes along the way, but Bitcoin is here to stay.”

Blockchain, the technology supporting these digital currencies, may be even more worthy of the investment than the cryptocurrencies themselves. “I would say I think conventional wisdom now is that blockchain and the underlying technology is probably more interesting and has more potential than maybe Bitcoin does by itself,” Minneapolis Federal Reserve Bank President Neel Kashkari explained in a Reuters report.

The link between digital currencies and this super-secure distributed database lends further support to the argument that digital currencies are a sound investment. However, only time will tell whether this current period of rapid growth will slow, plateau, drop, or continue skyward. As with any investment, the potential for reward comes with its share of risks, but right now, the future looks pretty bright for cryptocurrency.

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Scientists May Have Found a Way to Combat Quantum Computer Blockchain Hacking

Russia’s Solution to Quantum Hacking

A serious concern in the computing industry is that when true quantum computers are produced, the principles of encryption will break down due to the dizzyingly superior processing power.

Although blockchain is a far more secure method of transaction than our current financial system, even it will become vulnerable to a brute force attack by a quantum computer. Andersen Cheng, co-founder of U.K. cybersecurity firm Post Quantum, told Newsweek, “Bitcoin will expire the very day the first quantum computer appears.”

A team lead by Evgeny Kiktenko at the Russian Quantum Center in Moscow, though, may have found a way to protect blockchains by fighting fire with fire using quantum mechanics. They are designing a quantum-secured blockchain where each block, hypothetically, is signed by a quantum key rather than a digital one.

They propose that transmitting and encrypting information using quantum particles such as photons, which cannot be copied or meddled with without the particles being destroyed, ensures the blockchain’s safety. The principle is based on Zero-knowledge proofs which allow you to validate information without sharing it.

Protection in a Quantum World

In recent months Russia has become increasingly interested in blockchain. The central bank is composing new laws focused on cryptocurrencies and is interested in developing one of its own. This research marks a step forward in these efforts because it concerns the protection of such systems.

Meet The Most Powerful Computers in the World
Click to View Full Infographic

If the quantum-secured blockchain proves successful it would be hugely beneficial to the rest of the world as well. Blockchain has the potential to do a lot of good for the world by streamlining the transaction system, making it more secure, and ensuring transparency like never before. Countries such as Senegal have developed currencies that are entirely digital, Japan is accepting bitcoin (which uses blockchain) as legal tender in 260,000 stores this summer, and Ukraine is considering using it to combat corruption.

If the advent of quantum computing could be the apocalypse for blockchain, it is therefore crucially important that we begin thinking about how to protect these system before entire countries and currencies could be subject to hacks from the abusers of quantum computers.

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Mark Cuban Asserts That Bitcoin is Not Currency

Mark Cuban’s Twitterstorm

Mark Cuban has recently raised a series of criticisms of bitcoin on Twitter, which has resulted in the cryptocurrency’s exchange rate dropping rapidly— illustrating many of the issues with the currency that he discussed in the Tweet themselves.

Mark Cuban rose to wealth by selling his start-up businesses MicroSolutions (a PC company that he sold to CompuServe for $6 Million) and Broadcast.com (which transmitted sports games over the internet, and was subsequently sold to Yahoo for $5.7 Billion) in the 1990s, and rose to prominence by becoming owner of the NBA team the Dallas Mavericks.

Earlier today he took his opinions of Bitcoin toTwitter:

Cuban crucially differentiates between blockchain and Bitcoin: the former being a means of transaction that is more secure, transparent, and distributive, and the latter a cryptocurrency.

However, Cuban likens bitcoin to the religious worship of gold as an asset and describes it as a “stock”, which is fundamentally different from a currency — currencies measure how much of an asset you have. This is why Cuban progresses to state “I am not questioning value. I’m questioning valuation.”

Just because bitcoin’s exchange rate has reached thousands of dollars, this doesn’t mean that anyone would be willing to give you thousands of dollars for your bitcoin. Currencies are universal measures of value in the country you operate which allows anyone to trade with anyone as part of a universal system of value. This is in contrast to assets which you can buy with that value system but not necessarily trade anywhere as easily.

Currencies, in order to operate in this way, need to be relatively stable — which Cuban showed bitcoin was not due to the almost instant drop after his tweetstorm. To analogise: can you imagine the dollar, pound, or euro drastically dropping in a matter of hours just because of a few tweets?

Bitcoin's Exchange Rate to Dollars Over the Last 24 Hours. Image Credit: xe.com
Bitcoin’s Exchange Rate to Dollars Over the Last 24 Hours. Image Credit: xe.com

Bitcoin’s Huge, But Possible Fatuous Rise

On the surface, Bitcoin looks monumentally impressive: it has grown every year apart from 2014, has climbed 141 percent in value this year alone, even peaking at $2,900 this past week. However, the precise reason for this success is the reason for its potential failure — it is too turbulent, too successful.

This means that while Bitcoin may seem extremely seductive — it has been billed as, among other things, the ultimate investment and a universal currency — we must be careful when investing in it (particularly because it is difficult to convert back into dollars), putting faith in it, and being overoptimistic about its potential.

Bitcoin is one particularly famous use of a potentially more promising and widely applicable system called blockchain, which has the potential to revolutionize everything from the music industry to sustainable development and even banking accountability.

According to many, it is blockchain, not bitcoin, that has the potential to revolutionize future transactions: “If the internet bought us near instant digital communication, then the blockchain brings us near instant asset transfer, asset movement and security of data movement” said Simon Taylor, the previous head of Barclay’s cryptocurrency division.

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Blockchain Could Help Us Save the Environment. Here’s How.

What is Blockchain’s Potential?

Blockchains are secure, transparent and efficient. They record transactions as ‘blocks’ on a synchronized and distributive ledger — each one has to be ratified by more than one party, and is tied to the previous block. This means that supply chains involving more than one transaction can be traced along their entire sequence. If they are integrated with smart contracts, they could cut out middlemen. The most well-known manifestation of the blockchain is cryptocurrencies like Bitcoin; however, as it is a transaction system, it can be used for far more than currencies.

The applications of the system are wide-ranging. Imogen Heap plans to use it to ensure recording artists get fairer deals, stating, “Blockchain is the catalyst for change in the industry;” Toyota plans to use it to amass information about driverless cars from vehicle owners, fleet managers, and manufacturers in order to expedite the technology’s development; and Walmart is using it to identify contaminated food sources.

That Tunisia is putting their currency on the blockchain and Japan is accepting transactions using it at 260,000 stores by this summer testifies to the seriousness of its potential.

Using Blockchain for Sustainability

Among this revolutionary system’s most promising applications, though, is its potential use in sustainable governance systems, as Guillaume Chapron has argued on Nature. She details four ways in which it could improve governance and sustainability:

First, by making ownership concrete. As blockchains cannot be altered, manipulated, or changed without consent by all parties involved in the network, blockchain could prevent corrupt governments or companies from evicting or seizing the assets of people unfairly. Benben in Accra, Ghana, is already performing this task, along with Georgia and Honduras.

Second, by using its unique traceability. If Blockchain is used in conjunction with the internet of things, the efficiency, waste, and/or emissions of individual commodities, as well as entire company’s supply chains, could be securely and reliably logged. This would enable a reward structure for sustainability because it would provide a way to ensure there is no manipulation of figures or deliberate misinformation.

Third, by providing reliable payments. Blockchains do not require bank accounts — which is beneficial to people in countries that lack the infrastructure to supply them. This would ensure that money intended to be a reward for conservation, or charity payments to specific causes, does not disappear into unintended pockets through bureaucratic labyrinths. Blockchained money could be released automatically to the correct parties in response to meeting environmental targets. Another potential use in this sector is the direct trading of energy, rather than having to rely on middlemen’s conversions or evaluations.

Fourth, by making the corrupt accountable. This can apply on a number of levels, from the governmental to the individual. Votes could be registered on blockchains, making electoral manipulation extremely difficult — or, on a more personal level, evidence could not be tampered with, nor deals changed or fiddled with.

Blockchain can work in tandem with companies advocating sustainable development, governmental improvement, and individual empowerment in a variety of ways — freeing people from webs of complicated contracts, bullying by those in power, and the lack of accountability that often stems from the complexity of the digital age.

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Bitcoin Has Already Climbed 141% in Value This Year. How High Can It Go?

Bitcoin Leveling Out?

In recent weeks Bitcoin has surged repeatedly, smashing records over and over again. However, it seems that the Bitcoin boom might finally be slowing down. After soaring past $2,500 and peaking at almost $2,800 for the first time ever on Thursday, it lost a fair amount of this progress, ending up at about $2,230, down 9.2%. Over the past 30 sessions, it gained almost 90% of the time, growing more than 107%.

The Digital Currency Group, a consortium of 56 companies from 21 countries, has convened in New York at the Consensus 2017 conference. Since closing on Tuesday, news that the group had reached an agreement on scaling prompted another boost for Bitcoin, they climbed as much as 25% since closing on Tuesday. The scaling agreement was just another step forward for Bitcoin, which had already become a legal method of payment in Japan and on Russia’s largest online retail website, Ulmart.

Image Credit: Geralt/Pixabay
Image Credit: Geralt/Pixabay

However, it’s not all good news for Bitcoin. The United States Securities and Exchange Commission (SEC) has yet to rule on its reconsideration of the exchange traded fund (ETF) of the Winklevoss twins. This uncertainty was prefaced by the public comment period that ended on May 15. So, Bitcoin users are now waiting to hear whether Bitcoin will be traded on the U.S. Stock Exchange. So far, the answer is no, which is and has been a major setback for the cryptocurrency.

Nevertheless, this year alone Bitcoin has gained 141%. Many still believe that Bitcoin will become the global currency, and in times of political uncertainty this is an even stronger trend.

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Bitcoin and Ethereum Were Two of Google’s Most Popular Searches This Week

The Cryptocurrency Trend

The rise of Bitcoin has become undeniable: while it was once notoriously relegated to the darkest corners of the web, its ascension to become one of the world’s most popular cryptocurrencies has been rapid. It’s become even more difficult to deny in the last few months.

In 2016, Bitcoin surged past the value of all bank-issued currency. It’s been breaking all-time high market valuation records since February — even momentarily surpassing gold backin March. Currently, Bitcoin is at valued at $2,482.05 (at time of publication).

Things have been downright phenomenal for Bitcoin as of late. It’s hit another record just this week, landing on the top 5 Google searches in the United States on Monday. Those of you who’ve been following Bitcoin’s growing legacy are probably already familiar with why last Monday was special: seven years ago, on May 22, 2010, someone bought two pizzas using 10,000 Bitcoin. Today, that would be worth some $20 million. That date is now celebrated among Bitcoin users as Bitcoin Pizza Day — a remembrance of possibly the most expensive pizzas ever bought — and for Bitcoin’s meteoric rise to fame.

Bitcoin may have some competition hot on its heels, though: another cryptocurrency called Ethereum is coming in at number 18 in the top search results. Ethereum’s rising popularity is especially of interest among enterprise users.

The Future of Finance?

Cryptocurrencies are, indeed, seeing wider mainstream use. For example, more than 250,000 stores in Japan will begin accepting Bitcoin for legitimate transactions by this summer. One publicly traded company has started to trade its stocks using Bitcoin, while a town in Switzerland has been accepting Bitcoin payments as fees for public service transactions. Bitcoin remains popular with not-so legal transactions, too — as the recent WannaCry cyberattack showed.

Bitcoin’s growing popularity isn’t just a testament to the future of cryptocurrency; it’s also proof of the reliability of the technology behind it called blockchain. As a potentially more secure and decentralized system of data ledgers, blockchain has attracted a great deal of attention from a number of sectors, although it’s become especially popular in finance. Still, it’s proving to not be limited to such fiscal ventures. Indeed, the future of finance as a whole could be in cryptocurrency and a blockchain-based economy.

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Someone in 2010 Bought 2 Pizzas With 10,000 Bitcoin. That Would Be Worth $20 Million.

$20 Million Pizza

On May 22, 2010, a developer bought two pizzas using 10,000 units of a then-little-known digital currency called bitcoin.

Laszlo Hanyecz bought these pizzas for 10,000 bitcoins on May 22, 2010. Mike Lazlo

Today, 10,000 bitcoins are worth more than $20 million (£15.4 million).

Bitcoin is going nuclear. Its price is tearing upward, with each bitcoin worth $2,128 (£1,638) — a little shy of its all-time-high of $2,185 (£1,682) reached earlier Monday morning.

Just a year ago, it was trading at just $443 (£341), after deflating from what was then seen as the giddy highs of about $1,100 (£847) in late 2013. It has since embarked on an epic bull run.

“The Japanese have caught the Bitcoin bug and inefficiencies across markets are being exposed,” CryptoCompare founder Charles Hayter said in an emailed comment. “Irrational exuberance is taking hold as the Japanese stumble over each other to enter the Bitcoin market and drag up international prices.”

The digital currency has come a long way since 2010, when the purchase of the two Papa John’s pizzas by Laszlo Hanyecz from another bitcoin enthusiast marked what is believed to be the first “real-world” bitcoin transaction.

He posted on the Bitcoin Talk forum on May 22, 2010, writing (emphasis ours):

I’ll pay 10,000 bitcoins for a couple of pizzas.. like maybe 2 large ones so I have some left over for the next day. I like having left over pizza to nibble on later. You can make the pizza yourself and bring it to my house or order it for me from a delivery place, but what I’m aiming for is getting food delivered in exchange for bitcoins where I don’t have to order or prepare it myself, kind of like ordering a ‘breakfast platter’ at a hotel or something, they just bring you something to eat and you’re happy!

“I like things like onions, peppers, sausage, mushrooms, tomatoes, pepperoni, etc.. just standard stuff no weird fish topping or anything like that. I also like regular cheese pizzas which may be cheaper to prepare or otherwise acquire.

“If you’re interested please let me know and we can work out a deal.”

Bitcoin Pizza Day

Ten thousand coins were then worth about $40 (£30). A British user agreed to buy the pizza for him, and even at the time the buyer got a good deal out of it: The person paid only $25 (£19) for the two pizzas.

The date is a marked on an annual basis by bitcoin users as “Bitcoin Pizza Day.”

Today, 10,000 bitcoins add up to about $20.5 million (£15.8 million).

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“It wasn’t like Bitcoins had any value back then, so the idea of trading them for a pizza was incredibly cool,” Hanyecz told The New York Times in 2013. “No one knew it was going to get so big.”

 

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Bitcoin Surges Past $2,200

The Rise of Bitcoin

Bitcoin (for its history, see this infographic) has experienced unprecedented success since their domain name was registered on anonymousspeech.com. Monday, it was reported that the single bitcoin hit a landmark point, reaching $2,251.61 dollars, which far exceeds the price of gold. Its exchange rate has increased in 23 of its past 26 sessions. It has been the top performing currency every year since 2010 (besides 2014). By the summer, it will be accepted at more than 260,000 stores in Japan, since it is officially legal tender in the country. The verdict against the Winklevoss Twins to not allow it to enter the U.S stock exchange may, in the wake of this success, be overturned.

All of this seems to point to Bitcoin becoming a currency on par with the Dollar, Pound, Yen or Euro; or — because of its decentralized and digital nature — it could become the global currency.

Bitcoins. Photo Credit: PROfdecomite, Flickr
Bitcoins. Image Credit: PROfdecomite, Flickr

Why This Might Not be so Great

These figures, however, may not tell us the whole story. “All that glitters is not gold.”

The first thing that Bitcoin will have to do to continue its rise is to become more stable. The reason Bitcoin is so successful is also the reason it could fail. It has the ability to swing and shift extremely quickly: we need only look at when it dropped 15% in a matter of minutes in response to the Winklevoss Twin’s ETF verdict. One key characteristic of a successful currency, rather than its worth as an asset, is stability, which Bitcoin has not yet achieved.

Second, it will need to increase its transaction speed. In comparison with payment processors like Visa, the number of transactions Bitcoin can process is tiny: around 7 compared to thousands. This is because of each transaction has to be validated and verified by an individual due to it being part of a blockchain. And, even though it has the potential to stretch to 27, unless this value is increased there will forever be a serious limitation to how much bitcoin can grow.

Third, these exciting new figures may be artificially caused by an indirect centralization (centralization not through the legal process, but by market means — similar to a hostile takeover of a company). While Bitcoin is an uncentralized currency, if an individual miner (or collection of miners) take control of most of the mining then they are able to abuse the majority loophole, created as a democratic foundation of the currency. This would also allow the individual or group to rewrite the blockchain. As the majority of the miners are Chinese companies, and demand for the currency is increasing in the country due to the value of domestic currency falling, some fear the rise of state control in a system designed to be anti-state.

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Soon, Tech Could Make Cash and Credit Cards Utterly Obsolete

A New Way to Pay

A variety of new payment methods, processors, and banking tools that use smartphones will revolutionize the way we use money — particularly for small businesses and developing countries. Polish futurist Piotr Turek stated in an interview with Thomas Frey that, “in less than five years, smartphones, watches, and other devices will replace credit/debit cards, wallets, lenders, stockbrokers, and insurance agents.”

So, what technologies and enterprises are acting as a catalyst to a cashless, cardless society? Sumsung Pay, Apple Pay, and Google Pay — to name a few. Numerous technology giants are launching mobile payment and banking applications that only require the user to have a smartphone to pay for products. Start-ups, which include B, Starling, and Monzo (which raised £1 Million in 96 seconds in its crowdfund during March, 2016) have also had success in the sector.

These ventures are booming most in developing countries, in which banking is difficult due to a lack of physical banks. A 2016 report by the Global Economic Governance Program found that nine of the 10 top mobile banking companies were in Africa. But these technologies and businesses could have a big impact on first-world economies as well.

Better Business

Mobile points of sale are replacing the need for cash registers. Examples include Square and Shopkeep, which reduce the start-up costs for businesses. These can be integrated with other apps to provide small businesses with management, project planning, and payment tools, greatly decreasing the cost and learning curve for small business owners.

The use of these mobile banking tools makes managing finances: quicker, because there is no need to go through banks and money transfers are often instantaneous; easier, because app’s interfaces are designed to be as simple as possible; and more secure, because there are no physical cards and money to steal, and even if a phone is stolen, one cannot access money without a passcode.

The Entire History of Bitcoin in a Single Infographic
Click to View Full Infographic

As more and more of the mobile banking and payment solutions integrate into blockchain cryptocurrencies (purely digital currencies), security and speed will increase even more. IBM has stated that 15 percent of big banks will be using blockchain by the end of 2017, and the fact that many major banks have recently joined the R3 blockchain gives testament to this prediction. The popularity of bitcoin is reflected in its ever increasing exchange rate.

An interesting potential consequence of payment being conducted over blockchain more and more could be a universal global currency, as blockchain is capable of functioning using only cryptocurrencies. As Turek said in the interview, “There is a good chance that we will have a default global currency arise from the cryptocurrency movement.”

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Bitcoin Prices Continue to Surge, Regularly Breaking Records

Bitcoin or Bust

Early adopters of Bitcoin, the novel currency sweeping the globe, have plenty to celebrate this year. The cryptocurrency has grown in value by 85 percent in 2017. It has enjoyed steady growth, topping $1,700 for the first time ever today. This is the latest milestone for the digital currency, however back in March, Bitcoin surpassed the value of gold for the first time in its history. And, there are no indications of it slowing down.

The previous success of the currency has been tied to the uncertainty in markets after the results of the 2016 US elections. However, that explanation can’t continue its potency for that long. Even more, the US Securities and Exchange Commission (SEC) still has to rule on whether or not they will reverse a previous decision to reject a high profile exchange-traded fund (ETF), so the reasons behind the currency’s burgeoning strength remain unclear.

Going Global

Last month, Japanese policymakers made Bitcoin a legal method of payment. This was followed closely by an announcement that Russia would consider adopting Bitcoin (among other cryptocurrencies) in 2018. However, not all countries are readily willing to consider legitimizing Bitcoin. China, for example, has recently decided to restrict its trade.

Even with some minor hiccups, Bitcoin is set to revolutionize the way that we pay. Its footing keeps getting stronger as it continues to be the top-performing currency since the start of the decade, save for 2014.

The Japanese adoption of the currency could be a considerable boon toward it hitting the mainstream. Experts are expecting retailers in more than 260,000 stores across the country to be accepting Bitcoin. The ease afforded by the currency being international could make it a favorite for travelers as well.

The future of Bitcoin may not be entirely clear. But, if this upward trend continues, it will be difficult for policymakers to deny its rightful place in the pantheon of finance.

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Cryptocurrency All-Time Highs Reveal How Blockchain Is Transforming Our World

Bitcoin Boom

Both Ether and Bitcoin prices are trading at a record high right now, and no one is entirely sure what is happening in the world of cryptocurrency that’s pushing this surge. According to the Coindesk price index, bitcoin peaked today, May 1, at $1,444. That high represents an increase of approximately 12 percent over the course of 7 days, part of an increase of 33 percent over the month of April.

[Taken]Both Bitcoin and Ether Reach All-Time High Prices
Bitcoin prices in USD. Credit: WorldCoinIndex

Ether is booming even more; Today, it peaked at $84.57, up from $51.37 the week before. This was a jump of around 65 percent in a single week. And while Ether and Bitcoin prices are somewhat connected since people often trade Bitcoins against Ethers, that correlation doesn’t really explain why Ether is jumping this much — especially since it has been less than one year since the June 2016 hack into the Decentralized Autonomous Organization and the hard fork response in July.

[Taken]Both Bitcoin and Ether Reach All-Time High Prices
Ether prices in USD. Credit: WorldCoinIndex

This isn’t the first time Bitcoin has seen a rise in value. In 2016, Bitcoin achieved a value above $1,000, growing by 125 percent. This was the first time it crossed that threshold since 2013. By early February of this year, bitcoin prices had surged for several weeks in a row, benefiting from political uncertainty surrounding the Trump presidency. By late February, bitcoin prices broke records again, and by early March bitcoin was valued higher than gold — another first.

Rethinking Economic Security

Romain Dillet of TechCrunch has noted that Bitcoin and Ether prices tend to rise when the world is receiving bad news: “If Donald Trump tweets about North Korea, chances are it will have positive effect on cryptocurrencies. Conversely, I noticed a micro-crash minutes after the results of the first round of the French election — prices went up again minutes later. Marine Le Pen arrived second, which was a good sign for traditional currencies like USD and EUR.”

The Entire History of Bitcoin in a Single Infographic
Click to View Full Infographic

This trend reflects the evolution of how we think about money and what it means to keep money safe. As the political outlook appears less predictable and governments seem more unstable and even corrupt, cryptocurrencies are considered a safer investment than traditional currencies and markets. They are not tied to any one government or political system, and they offer a verifiable trail so investors can watch what happens to their money.

In times when governments can look more incompetent or untrustworthy than consumers prefer, at least we can depend on cryptocurrencies and blockchain technology.

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Experts Are Gathering to Discuss How Blockchain Will Transform Our Future

New Kid on the Block

Most people have heard of the blockchain, but sadly, most people don’t really understand what it is (or how it’s transforming our world). As Investopedia notes, it’s all about creating secure, global connections and getting rid of middlemen: “A blockchain is a public ledger of all Bitcoin transactions [or other cryptocurrency transactions] that have ever been executed. It is constantly growing as ‘completed’ blocks are added to it with a new set of recordings.”

This “ledger,” of sorts, acts as a direct connection between consumers and producers, eliminating the need for third-party entities like traditional banks.

Ultimately, blockchain technology and its developing applications promise a future with safer, more efficient ways to manage finances. Instead of relying on banks as a middleman to ensure the security of finances (which, as past recessions have shown, include a serious risk element), a “chain” of computers that are connected through a global network can verify a transaction. As such, blockchain could totally disrupt the financial sector.

However, blockchain has applications far beyond banking and finances.

Currently, there are two main prevailing blockchains in existence: the Bitcoin blockchain, and the Ethereum blockchain. While the Bitcoin blockchain is dedicated to the trade and storage of Bitcoins, Ethereum took the possibilities of blockchains further. Some say it could be used to disrupt politics or even feed the hungry.

From bitcoin enthusiasts to financial innovators and beyond, more and more people are becoming interested in the concept of blockchain. With this in mind, coming to Brooklyn, NY  on May 19, 2017 is Ethereal Summit, an event designed to bring together those involved with—and excited about—this field.

Since blockchain is a relatively new concept, it is important that the possibilities within it are explored from every angle, and the Ethereal Summit could be a great way for those working in and around this field to come together and pave a way for the future of blockchain.

This culture-focused event will “aim to highlight the technologies and innovators that are ushering in the next generation of the internet, and catalyzing our transition into a decentralized world.”

Planning the Future

The event will include “art installations, virtual reality experiences, keynote speakers, and panels featuring some of the most prominent names in blockchain and beyond.” Among the keynote speakers are Vinay Gupta, a prominent blockchain thought leader; Maximilian Bech, creator of the first 3D blockchain model; Geena Rocero, transgender and identity activist; and Elizabeth Rossiello, co-founder and CEO of BitPesa.

This event will bring together professionals from a variety of backgrounds, giving the audience a well-rounded exposure to a multitude of perspectives.

For example, Gupta will discuss Ethereum and what this trend of decentralizing means for our future. To give another perspective on blockchain, Rocero will speak about the inherent inclusivity that blockchain provides. They will work through ways that women and other underrepresented groups can push forward as leaders in the quickly advancing future of tech and blockchain.

The discussions the are scheduled to take place at Ethereal Summit could help shape the direction that this field goes. If you’d like to attend, you can get a significant discount on tickets using the promo code “Futurism.”

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By This Summer, Bitcoin Will Be Accepted at More Than 260,000 Stores in Japan

A Financial Revolution

Many contend that Bitcoin has long since passed its shadowy reputation for being the transaction standard for the internet’s darker corners. Bitcoin trading, for one, has reached record-breaking values. Now, major bitcoin exchanges in Japan are teaming up with retailers to start a transaction revolution that would allow stores to accept Bitcoin payments.

Bitcoin is an example of a cryptocurrency, i.e., a digital currency that’s based on a data structure called Blockchain. A blockchain is a digital ledger that allows for recording and keeping transactions in a decentralized and cryptographically secured manner.

Each block in a blockchain is maintain by so-called “miners” through servers spread all over the world. These miners then receive cryptocurrencies in exchange. While most markets have been slow to accept cryptocurrencies, some retailers are beginning to test the new form of payment.

According to the Nikkei Asian Review, Japanese consumer electronics retail chain Bic Camera is going to try out a payment system using Bitcoin in two of its stores in Tokyo. To do this, it will partner with Bitflyer, which is the largest bitcoin exchange by volume in Japan.

Bic Camera is not the only Japanese company to adopt cryptocurrency. At the same time, Recruit Holdings’ retail support arm Recruit Lifestyle plans to work with Coincheck bitcoin exchange to implement a similar system. This partnership with Recruit Lifestyle will add more stores that accept Bitcoins, according to Coincheck. “Bitcoin will be accepted at 260,000 shops by this summer,” the company stated.

Digital Currency and the Future

Cryptocurrency and its blockchain foundation have a growing number of users. Naturally, the first to gravitate to this technology were banks and other financial service firms. The nature of blockchain, however, has opened up this technology to applications beyond that of digital currency. Blockchain companies, such as Ethereum, have been working towards finding other ways to put this technology into use. There’s IBM’s Hyperledger, as well as a blockchain application for a universal basic income (UBI) setup.

The Entire History of Bitcoin in a Single Infographic
Click to View Full Infographic

Currently, about 4,500 stores in Japan accept Bitcoin as payments, according to Nikkei. Furthermore, in a Bitcoin.com interview this January, said Kagayaki Kawabata, Coincheck’s Business Development Leaddisclosed that there are already more than 5,000 merchants and websites in Japan that accept Bitcoin payments using the company’s system.

The move to adapt Bitcoin isn’t an arbitrary one, of course. Aside from security, another reason for opting for cryptocurrency is the relative ease with which transactions can be conducted. Bitcoin allows tourists to make purchases in Japan without having to go through currency exchange rates. Additionally, if more outlets accepted Bitcoin, more individual consumers would likely be persuaded to get Bitcoin accounts.

The rise of cryptocurrencies like Bitcoin may be ushering in a new way of conducting financial transactions. To date, over 20 million people worldwide now use Bitcoin. Bitcoin is no longer seen as something to be hoarded — it’s used for shopping. As Japanese stores adapt Bitcoin, this cryptocurrency is steadily making its way into mainstream financial transactions.

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All the Evidence You Need That Bitcoin Is Turning Into a Real Currency

Whether or not you know what blockchain is, you have probably heard of the seemingly mysterious cryptocurrency Bitcoin. Bitcoin and its underlying blockchain network are quietly making headlines around the globe. The recent success of Bitcoin and the security of blockchain may have some consumers considering an investment in the new denomination, but others are still wary. Newly released data further legitimizing the currency could be just the thing to push the undecided into the realm of Bitcoin proponents, however.

The Entire History of Bitcoin in a Single Infographic
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In 2008, Bitcoin was introduced by an anonymous group of programmers under the name of Satoshi Nakamoto, and then it was released to the public as an open-source software in 2009. Unlike other online payment services like PayPal and Venmo, Bitcoin is a peer-to-peer network that takes place privately between two users — there is no intermediary involved. The virtual currency is completely decentralized from any external influence, and all transactions are accounted for through a blockchain ledger.

While Bitcoin is thoroughly anonymous, all transactions on the blockchain ledger are available publicly. Using the time and date of a particular transaction, individuals could potentially match someone’s online address to their identity. However, all transactions made through Bitcoin are encrypted with military-grade cryptography, ensuring that the deals are secure.

Sending and receiving bitcoins is already as easy as sending an email, and it’s poised to get even easier thanks to BitPay.

The Way to Pay

Bitpay is a payment processing service that allows users to spend bitcoins within a larger network of merchants. With Bitcoin’s unexpected rate of growth leading to longer delays in transactions and higher fees, Bitpay developers were pushed to accommodate the sudden popularity of Bitcoin.

“This friction is making us get more creative in how we do user experience design for delayed payment states on the BitPay platform,” co-founder Stephen Pair explained at the Distributed: Markets 2017 conference. “Our designers and engineers are constantly attuned to how we can make using Bitcoin intuitive,” he added.

The frequent updates appear to be paying off as the company recently released a series of charts revealing a positive trend in Bitcoin usage. The data shows a significant increase in the number of Bitcoin payments being processed daily and in the value of the payments being processed.

*3* Evidence That Bitcoin is Turning Into a Real Currency

*3* Evidence That Bitcoin is Turning Into a Real Currency

Experts attribute this to the “wealth effect.” Essentially, people who bought Bitcoin when it was significantly cheaper want to spend it now that the value is high. The trend also affects what people are buying with bitcoins. Bitpay merchant CheapAir, a site that sells plane tickets, hotel reservations, and car rentals, has noticed a higher upper limit in the spending of their Bitcoin customers.

“With bitcoin we tend to generate more sales in premium cabins like business class or first class,” CheapAir founder Jeff Klee told Quartz. “Certainly the average spend for the bitcoin customer is higher than a non-bitcoin customer.”

*3* Evidence That Bitcoin is Turning Into a Real Currency

This increased movement of bitcoins from consumers to companies highlights an important moment in the history of the cryptocurrency. While people initially saw bitcoins as something they could hoard, they’re now seeing them as something to spend.“Bitcoin [is being used] as a store of value, as a currency hedge, and as a payment method for economies without widespread credit card or banking access,” James Walpole, BitPay’s marketing manager, told Quartz.

If these trends continue, the increased acceptance of the cryptocurrency as an alternative payment method might be enough to push it all the way into the mainstream.

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Blockchain Tech Has Never Been More Valuable or More Ready for World Domination

How Blockchain is Changing the World

By now, you have probably heard of the term “blockchain” somewhere amidst discussions of digital currency, banking, and the future of finance. Many believe it’s going to revolutionize the world — from Wall Street adopting blockchain technologies by 2018 to companies trading publicly with the cryptocurrency Bitcoin. But what exactly is blockchain?

The system of Blockchain has been quietly growing since its inception in 2008 by Satoshi Nakamoto (the pseudonym for the suspected group of individuals who co-created Bitcoin). Blockchain serves as the underlying infrastructure for Bitcoin, a form of cryptocurrency that has become increasingly popular: at the time of publication, 1 XBT was worth $1,031.14 USD. Blockchain serves as a peer-to-peer network that takes place privately and exclusively between two users. Information stored in blockchain technology is completely decentralized from any external influence, and all movement of information is accounted for through a blockchain ledger.

Outside of banking and currency, blockchain is gradually changing how business is done in other fields. The most popular form of blockchain development in enterprise technology is Ethereum. Originally founded in 2013 by developer Vitalik Buterin, the company was developed by the Swiss nonprofit Ethereum Foundation. Ethereum is a custom-built blockchain that can be used in payment systems, crowdfunding, gold investing, and other cloud computing functions. The custom-built blockchain system has attracted the interest of some big names in technology, like Accenture, Microsoft, Intel, several large banks, and blockchain startups around the world.

Ethereum’s All-Time High

Global corporations like Maersk are adopting blockchain systems for record keeping and information sharing. This industrial shift has elevated blockchain developers like Ethereum to new heights. Almost remarkably so: Ethereum (ETH) hit an all-time high, trading at over $50 a share — an almost four hundred percent increase from last month when it sold at around $13 a share (at time of publication, it was trading at $44 a share). While the all-time high value only lasted a few days, the implications for Ethereum are clear. Blockchain systems are well on their way to becoming the new industry norm.

As mentioned, corporate giants like Microsoft, JPMorgan Chase are working together to form the Enterprise Ethereum Alliance (EEA). The EEA aims to create a standard of the Ethereum software so that business around the world can collaborate effortlessly. So far, 30 companies have joined the nonprofit initiative. It’s been speculated that the formation of this entity is what’s behind the recent surge for the blockchain company.

The benefits of the EAA could mean greater transparency, reduction in costs, and more appeal to national and international governmental organizations. While the consistency of the Ethereum trend isn’t a guarantee, it’s definitely something worth keeping an eye on.

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Blockchain Will Change Far More Than How Your Money Is Managed

Organizational Upgrade

The times they are a changin’. Spurred by technological innovation, our world is hurtling forward at unprecedented speeds and it is altering how we work, play, and live. However, our organizations, institutions, and governments have not been able to keep up with the pace of change. Too many of them were built on outdated systems that never could have predicted the impact things like the computer or the internet would have. Thankfully our methods for organizing ourselves are themselves finally evolving and nothing has been a bigger breakthrough in that regard than blockchain technologies which have the ability to fundamentally change how we organize ourselves.

blockchain

What is revolutionary about blockchain is that it enables a distributed check on power. Today our systems still rely on centralized authority where trust is given to a select few. What blockchain enables us to do is replace these systems with ones that have no need for a central authority.

The key to the blockchain is that everything on it is monitored by everything else on it. Using bitcoin as an example, whenever a bitcoin gets exchanged, that transaction gets checked against every other transaction in the system to make sure it is authentic and then gets tied to the history of that bitcoin. The entire history of each bitcoin is stored in an open ledger making every transaction traceable.

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But the real beauty of a blockchain is that it enables people to have absolute trust in whatever it is powering. Trust is the foundation of all institutions, they must earn the trust of its participants and then continue to prove themselves trustworthy in order for people to keep using them. This is why we exchange goods and services for money, we have faith that the currency we traded for will hold its value. Credit, without which no economy can function, is itself defined as “the ability of a customer to obtain goods or services before payment, based on the TRUST that payment will be made in the future.”

What the blockchain enables us to do is to never have to make those leaps of faith. The systems powered by blockchains are inherently trustworthy because there is no wiggle room in the system for corruption, fraud or even human error to play a part as everything is distributed, verifiable and open to anybody using the system. For more on how it works click here.

It is hard to understate the kind of impact that this can have. As stated in the book Blockchain Revolution, “some scholars have argued that the invention of double-entry book-keeping enabled the rise of capitalism and the nation-state. This new digital ledger of economic transactions can be programmed to record virtually everything of value and importance to humankind…In fact, soon billions of smart things in the physical world will be sensing, responding, communicating, buying their own electricity and sharing important data, doing everything from protecting our environment to managing our health. This Internet of Everything needs a Ledger of Everything. Business, commerce, and the economy need a Digital Reckoning.”

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More Than Money

Not only are a host of financial services now using blockchain technologies, but it is also being used to write smart contractssecure our digital identities, and even to back marriage. IBM is a leading player in blockchain technologies and recently launched a blockchain powered tool for government organizations to help them gain more trust from their citizens. The technology is spreading rapidly as more and more companies are seeing its merits.

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But its real potential is the role it could play in reshaping our political systems. The technology allows for direct democracy where every citizen could vote on issues themselves rather than just electing representatives to decide on issues for us. In addition, if national currencies began using blockchain backed systems then each citizen would be able to track exactly how each of their tax dollars gets spent. It has within it the promise of a world that is incorruptible, completely transparent and one in which anybody who wants to participate can have equal say in how society chooses to order itself.

The technology that enables the blockchain has only been around for 9 years, and like all good ideas, it will take time before its potential is realized. But it does seem to be one of those ideas that has staying power as it holds within it the ability to change how we organize the world we live in.

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Surprise! Another Major Company Is Turning to the Blockchain

The Precedent of Blockchain

The system of Blockchain has been quietly growing since its inception in 2008 by Satoshi Nakamoto, the pseudonym for the suspected group of individuals who co-created Bitcoin. Blockchain serves as the underlying infrastructure for Bitcoin, a form of cryptocurrency that has been gradually taking the world by storm. Now, companies like Maersk are looking for ways to incorporate the blockchain infrastructure to make themselves more efficient.

Bitcoin is built upon a digital ledger that is decentralized throughout the internet. Information on all transactions is anonymously recorded and impossible to modify thereafter. This is achieved through blockchain, which provides a secure, accurate, decentralized system across a network of computers. Blockchain is a relatively new system that hasn’t been fully tested, and it has several potential drawbacks.

To execute a successful blockchain, many organizations are required to agree on the fundamental rules of the network — which could be challenging since opinions on this topic widely vary. Since a blockchain system depends on a decentralized network, multiple protocols must be accommodated in order to launch a blockchain system. Despite these drawbacks, a major company is now turning to the blockchain system.

Blockchain Beyond Bitcoin

The shipping company Maersk has officially announced its partnership with IBM to use blockchain to keep track of international shipments. Rather than tracking entire shipment, the company is now narrowing its focus on the individual shipment containers. At the same time, the companies hope to use blockchain to address the inconvenience of maintaining paperwork for deliverables with short or long trips to their destinations. During delivery, a single shipping container could involve 30 different people and over 200 or more interactions in total.

For the sake of convenience, IBM established a blockchain that allows every participant involved to witness the shipment’s progress at any stage. They have a plan to start updating the user on the whereabouts of the container and the status of their goods in late 2017.

And IBM is not alone. Blockchain technology is finding itself at use in some impressive circles. From Big Blue to Wal-Mart, blockchain is slowly infiltrating corporate structures around the world.

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For the First Time Ever, Bitcoin Has Surpassed Gold in Value

Yesterday was a monumental day for bitcoin. For the first time ever, a single unity of the most mainstream of all cryptocurrencies surpassed the price of an ounce of gold. According to both CoinDesk’s Bitcoin Price Index (BPI) and Coinbase, the value of a single bitcoin hit $1,238.11 at a time when Bloomberg reported the price of gold being $1,237.73 per ounce.

*5* Here’s a First: Bitcoin Surpasses Gold in Trading Value
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It’s worth noting that this isn’t a one-to-one valuation and that people aren’t necessarily trading their gold for bitcoin. Value fluctuations in trade are normal, so yesterday’s historic bitcoin valuations may well have been a product of a good trading day, whereas gold was just experiencing a bad one.

However, this was no outright fluke. The value of bitcoin has slowly been on the rise, as CoinDesk and Coinbase have tracked. The currency has been been recovering from an all-time low point of $200 per unit back in mid-2015 for more than a year now.

Gold has long been the standard as far as secure trading investments go, so bitcoin’s rise may be indicative of how people are seeing cryptocurrency as more secure — a promise held by blockchain-based technologies.

As of the time of today’s writing, CoinDesk’s BPI puts a single bitcoin at $1,283.76, while Coinbase has it at $1,286.26. It’s remained comparably higher than an ounce of gold, which Bloomberg puts at $1,228.03. We’ll just have to wait to see how long bitcoin can remain on top.

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In Case You Missed it, The Blockchain Revolution’s Officially Begun

Blockchain: More Than Bitcoin

Blockchain and cryptocurrency are relatively new. Most people might even think that Bitcoin —  invented just in 2009 and probably the most popular blockchain-based cryptocurrency out there — is the only one of its kind. But blockchain is more than just Bitcoin.

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Blockchain is a digital ledger of transactions. It’s public and is not governed by a central body. As such, there’s a relative level of transparency coupled with security through cryptography. In other words, it’s safe and reliable, and monitored by hundreds of miners who keep these ledgers. It’s quickly becoming of interest to not just existing financial markets, but humanitarian and sustainability efforts.

At the moment, blockchains are most frequently used for cryptocurrencies like Bitcoin. But it has other uses — like what distributed public blockchain network Ethereum does. Instead of focusing on just digital money like Bitcoin, the Ethereum blockchain runs the programming code of decentralized applications, allowing for enterprise use. Transactions in the Ethereum network rely on a crypto-token (also known as security tokens) called Ether.

The Future of Blockchain

Now, Hong Kong-based cryptocurrency research and development company IOHK wants to open new doors in blockchain research. IOHK was established in 2015 by Jeremy Wood and Charles Hoskinson, one of the founders of Ethereum. They’re planning to invest up to $1 million in two facilities for research: one at the University of Edinburgh, and the other Tokyo Institute of Technology.

The labs will cover topics such as cryptography, smart contracts, and how to upgrade cryptocurrency systems. Best of all, their research will be open source and accessible to everyone. “This is commonly not done in the startup setting,” Hoskinson told Business Insider. “Usually, this is something you do if you’re a company like Microsoft — Microsoft has research campuses at many major universities.”

Hoskinson also said that setting up these research labs can provide perspective and better understanding of the growing blockchain technology. “After having discussions, they [the experts] said, actually we don’t have answers to a lot of these fundamental questions,” explained Hoskinson. “We said, how do we get those answers? And they said, we need to write some papers, we need to do some basic research. Over time we started moving into the university research space.”

We already know that blockchain is more than Bitcoin, but now that there will be research labs dedicated to understanding its potential, the future of the technology is bound to develop rapidly. The days of digital cash becoming globally dominant could arrive sooner than we think.

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Bitcoin Prices Have Surged to an All-Time High

Tales From the Cryptocurrency

Bitcoin is a term we often hear tossed around in the headlines. We know that it deals with money, online transactions, and just maybe the deep web. Back in 2014, the Washington Post established that only 24% of the American public was aware of what bitcoin actually was. Meaning that almost three-quarters of the country had no idea. But maybe they just might want to start paying attention, especially now since it is at its all-time high value.

Bitcoin was introduced in 2008 by an anonymous group of programmers under the name of Satoshi Nakamoto and was eventually released to the public in 2009 as an open-source software. Unlike other online payment services like PayPal and Venmo, Bitcoin is a peer-to-peer network that takes place privately between two users—meaning there is no intermediary involved. The cryptographic virtual currency is completely decentralized from any external influence while all transactions with the currency are accounted for through a blockchain ledger.

While bitcoin is thoroughly anonymous, the blockchain ledger has all transactions available publicly. Therefore, theoretically, if you know the time and date of a particular transaction, you may be able to match someone’s online address to their identity. On the other hand, all transactions made through bitcoin are encrypted with military grade cryptography, ensuring that all deals are secure. Sending and receiving bitcoins is as easy as sending an email, but does that mean it’s worth it?

Time to Invest?

With all that said and done, Bitcoin has made it far since it’s substantial price drop in 2013. Since then Bitcoin has stabilized around a margin of $250, with most experts believing it was doomed. However, it seems to have returned to a relatively stable rise since last year. This time last year bitcoin was valued at $367, with its steady rise, it is now valued at 1,177.18. Many speculate as to what is causing the recent trend from Congress to WallStreet to even sheer luck.

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Bitcoin Prices Are on a Huge Upward Trend, No End in Sight

Yesterday, Bitcoin was back above $1,000 for the first time since January 5. The cryptocurrency was higher by 1.5% at $1,000.10 a coin as of 11:39 a.m. ET. And by today, has risen even more to nearly $1,025.07.

It’s been a wild year for bitcoin. It began 2017 with a 20% rally during the first five days of the year before crashing 35% on concerns of a crackdown on trading in China.

Thursday’s gains have extended bitcoin’s winning streak to a sixth straight session as trade appears to be benefitting from uncertainty surrounding Donald Trump’s presidency. The cryptocurrency has gained nearly 10% since Trump was inaugurated on January 20.

Bitcoin
Markets Insider

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Bitcoin Outperformed All Bank-Issued Currencies in 2016

The value of digital currency Bitcoin has crossed the thousand-dollar line for the first time since December 2013. As of this writing, a single Bitcoin is worth $1114.95, growing by 125 percent in 2016 to perform better than all central bank-issued currencies, according to Reuters.

Bitcoins are not controlled by any government or central authority, which makes the cryptocurrency very attractive for those looking to mobilize money without their country’s capital restraints. Reuters reports that the increase in value could be largely due to strong demand from China as a response to the yuan sinking by 7 percent in 2016.

Paul Gordon, co-founder of digital currency investment company Quantave and board member of the UK Digital Currency Association, told Reuters that “the growing war on cash, and capital controls, is making Bitcoin look like a viable, if high risk, alternative.”

Convenience aside, the history of the Bitcoin market is one riddled with volatility. The digital currency clocked in its highest value at $1,163 in 2013, only to suddenly collapse to the neighborhood of $400 due to a massive $460 million-in-Bitcoin theft from the Tokyo-based exchange Mt. Gox. It has stabilized in recent years, though, despite another incident involving the loss of Bitcoins worth about $65 million last August.

The market continues to grow, with 12.5 Bitcoins being added every second. More safeguards must be put in place to prevent major leakages, though, especially since the future of currency is digital and, so far, Bitcoin is leading that transition.

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Overstock Becomes the First Publicly Traded Company to Trade its Shares Via the Bitcoin Blockchain

Overstock, an online retailer, has become the first publicly traded company to offer over 126,000 company shares on the Bitcoin blockchain. Under a subsidiary called , this new method of trading is enabled through technology the company has spent developing over the last two years.

A blockchain is a public, digital ledger of transactions. What makes it particularly interesting is that it is not governed by a central body, allowing for more transparency not currently offered in today’s systems, and coupled with the use of cryptography, makes it more secure.

Watch this brief video that illustrates and explains how blockchain works:

Company CEO Patrick Byrne views the blockchain as a way to provide reliable, transparent, and automated tracking systems for capital markets. He refers to this milestone as a “Sputnik moment”—a symbolic event that demonstrates the financial industry’s attitude towards this kind of technology and how it will affect and evolve current systems.

While the Overstock project is indeed interesting and can be viewed as a definitive milestone, lack of precedent can make regulatory boards and investors wary of it. Still, established financial institutions like JP Morgan, Wells Fargo and State Street, as well as NASDAQ have begun to explore blockchain technology’s potential. Such interest in how available technology intended to reinvent the capital market is at least indicative of how blockchain could one day fundamentally change the world’s established monetary systems.

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Digital Currency Wins as India Nullifies 86% of its Cash in Circulation

Cashless India

Like many reform programs, India’s move to do away with potentially all of its cash in circulation and focus more on digital currency has been greeted with quite the turmoil. The government is scrambling to print new denominations to replace the voided highest-denomination banknotes of 500 and 1,000 rupees — about 86.4% in value of total cash circulation.

When Prime Minister Narendra Modi announced last November that the government would be nullifying these banknotes, it would seem that they didn’t anticipate the eventual setback — almost similar to those who’ve tried it before them, like Burma in 1987, the Soviet Union in 1991, and North Korea in 2009.

The most affected are those who rely solely on cash for day-to-day transactions, including street merchants, farmers, and those in the lower end of the economy. Furthermore, according to reports in The Economist, the backlash could lower India’s expected GDP growth this year by two percentage points. The microfinancing industry, which previously helped many less-fortunate Indians, also suffered major setbacks.

Credits: Narinder Nanu/Getty
Credits: Narinder Nanu/Getty

Everyone loves discounts, right?

Why go to all the trouble? The move was a step toward cleaning up India’s rampant “black economy,” the go-to market of the wealthy to launder their money and procure goods away from the government’s watchful eyes. There has been considerable success, as the country’s IRS equivalent has already seized millions of dollars in cash.

And amidst it all, India sets a world first.

In order to ease the burden, the government introduced several gimmicks, most notably a discount of up to 10% for online payments covering insurance policies, rail tickets, and highway tolls — making India the first country to subsidize the use of digital money. The service tax for online transactions under 2,000 rupees ($29.6) has also been waived, according to Finance Minister Arun Jaitley.

The move has benefitted local digital payment companies, particularly Paytm, the most popular service of its kind in India. Paytm is seeing an increase in people signing up, about 14 times the usual rate. And as a result of increased activity in India, Bitcoin saw an increase in value too.

Now, whether or not Modi’s plans to clean up the economy become successful remains to be seen. What’s interesting is how most Indians, at the end of it all, will have experienced digital financial transactions. Hopefully, they remember the ease and not the worst of it.

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Blockchain Technology and the Law Aren’t Enemies, They’re Allies

It’s hard to deny the promise of blockchain. The Ethereum protocol gave us the toolkit necessary to begin reinventing the way we interact with each other as peers, as well as the way we interact with businesses in commercial relationships. It seems like everyday I wake up and read about a novel use case or decentralized application seeking to blaze a new path forward or innovate off a legacy system.

As a lawyer for ConsenSys , and bystander to the blistering pace of development across the industry, I engage in daily grappling between the promise and greatness of our collective ideas and the way these ideas might come to life in a world governed by laws written long before Satoshi Nakamoto constructed the genesis block of the Bitcoin blockchain and set the wheels of decentralization firmly on their path.

It is simply incorrect to say decentralized applications, or use cases of the blockchain, are incompatible with legacy legal constructs. Instead, I simply view there to be friction between the new and the old that more often than not accompanies the introduction of promising new technologies. As Dax Hansen of Perkins Coie, a leading practitioner in the space, recently told me, the goal is to figure out what areas of the law you are likely to “bump up against.” It just so happens that one of the industry’s most promising and intriguing use cases, tokens, bumps firmly into nearly a century of securities law and regulation; in particular, a 70-year-old case involving some orange trees in Florida and its progeny.

How we progress and mature as a technology and industry will in no small part depend on how we react when we bump up against laws that may not be easy to apply.

That’s why ConsenSys is proud to be a contributor to Coinbase’s recently released Blockchain Token Securities Law Framework. The Framework is the product of deep thinking by some of the industry’s brightest legal minds trying to analyze the friction between the nearly three-quarter century old Florida orange grove precedent (SEC v. Howey Co.) and token launches. The Framework is a must-read for all industry participants.

Is the Framework perfect or absolute? It would be incredible hubris to think so. Instead, the Framework exhibits excellent execution of the aforementioned mental grappling over how we apply legacy legal constructs to a new phenomenon. The document is exemplary and demonstrates the best qualities of our industry, specifically the persistent search for answers and comfort in a legal system where final answers are almost exclusively handed down by the judiciary.

For nearly every occasion blockchain technology bumps into law, the technology provides the law an equivalent boost. Take for example the Know Your Customer and Anti-Money Laundering laws. Exorbitant amounts are spent every year by institutions attempting to comply with these robust and challenging requirements. Current KYC/AML systems add tremendous friction to commerce and jeopardize sensitive personal information. It’s for this reason that I am excited about uPort, a blockchain based identity platform that will offer us a crucial access point to the emerging decentralized Web 3.0.

Enron gave us Sarbanes-Oxley, the greater than 30,000-word regulatory framework designed to prevent crippling accounting fraud by trusted corporations. Balanc3 will give us a seamless triple-entry accounting system designed to prevent such fraud from occurring in far fewer than 30,000 words of code. When a business’s transactions are non-repudiable and logged in a global shared ledger, it makes it impossible to improperly manipulate the past.

When you wake up with an idea, it’s important to take a moment to ask the question: What areas of the law might this bump into or boost? If you don’t know the answer to the former, take time to consult a legal professional.

The most popular (but not exhaustive) areas of law I often see blockchain systems bump into are securities, commodities, data privacy, money transmission and gaming. If you are designing an ecosystem that features a token, the Framework is a wealth of information to help guide you in your architecture. I will probably never convince all of you that lawyers can be an accelerant, but I promise you that’s not just self-promotion. Thinking about the legal issues early on in your development, be it for a token ecosystem or decentralized application, will enable you to get products to market quickly while minimizing personal, corporate, and ecosystem risks.

I am certain that decentralized applications and their features are no less compatible with existing legal constructs than prior revolutionary technologies were. However, compatibility may require thinking long and hard about how laws written before the dawn of decentralization can harmonize with such a powerful disruptive force.


Matt is responsible for overseeing legal at ConsenSys while empowering the organization to build and deliver more revolutionary products to the ecosystem.

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Major Players Unite to Define Blockchain Token Securities Law

A Legal Framework

It looks like things are moving forward for a more secure use of blockchain and cryptocurrency technologies. Just today, the world’s leading players in digital currency have partnered to create the Blockchain Token Securities Law Framework as a form of self-regulation. The partnership includes Coinbase, ConsenSys, Union Square Ventures, and Coin Center.

Blockchain is a system that offers security through transparency. It’s a data structure that uses digital ledgers of transactions shared among a distributed network of computers. It’s used by digital or cryptocurrencies, the most famous of which is Bitcoin and the newcomer Zcash.

Basically, transactions in a blockchain are monitored and kept by people part of a decentralized network, called miners, who store all data in blocks. Digital tokens or cryptocurrencies created on blockchains are called blockchain tokens.

According to ConsenSys, “The ability to widely sell a product or access to a product enables companies to overcome capital crunches and bring worthy products to market.”

Blockchain Tokens as Securities?

The new initiative is an attempt to take blockchain tokens out of its relatively gray area of regulation. “[It] is intended to be both a rubric and guide to selling tokens in exchange for currency without running afoul of the US Securities laws designed to prevent unregistered capital raising,”says ConsenSys. With the increase in uptake of cryptocurrencies in 2016 and after the failure of the DAO, the move comes at the right moment.

It’s a 27-paged framework that includes a “decision matrix” for users of blockchain technology. It should, in principle, limit design flaws that could have potential legal consequences outside of the digital world. It’s the first of its kind, providing developers and applications with an evaluation instrument for their tokens and plans.

“The document is exemplary and demonstrates the best qualities of our industry, specifically the persistent search for answers and comfort in a legal system where final answers are almost exclusively handed down by the judiciary,” said ConsenSys General Counsel Matt Corva.

Although more free from risks, cryptocurrencies are still prone to being abused — and even being hacked. Hopefully, with this self-regulation framework, more people will see the benefits of blockchain tokens.

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