Error 521 Ray ID: 422b939260168e73 • 2018-05-29 20:05:33 UTC

Web server is down

Cloudflare

What happened?

The web server is not returning a connection. As a result, the web page is not displaying.

What can I do?

If you are a visitor of this website:

Please try again in a few minutes.

If you are the owner of this website:

Contact your hosting provider letting them know your web server is not responding. Additional troubleshooting information.

Cloudflare Ray ID: 422b939260168e73 • Your IP : 185.87.51.142 • Performance & security by Cloudflare

Bitcoin Price Speculation – Lessons Learned From Trading Stocks

Bitcoin price prediction and chart analysis are among the most popular topics on Bitcoin. That’s okay, nothing wrong with a little speculation. But there’s a lot more to making a profit than ‘reading the charts’ and following the news. I certainly learned in my days as a day trader in the stock market.

For a year, I was possessed with finding a way to make a profit in day trading. I frantically read the news and analyzed charts looking for clear patterns. Some strategies worked for a short time. Then the price level suddenly changed direction, and I was at a loss. Theoretically and psychologically, I just wasn’t up for this. But in all the efforts I learned the following:

1. 70% – 90% of traders are losing money

If only I had known. Whether trading gold, commodities or currencies, most traders lose money. Why is this? Because in the trading game, you are betting against all other traders, and many are smarter than you. They have more years of experience in trading, they have access to colleagues with more experience, and they have access to the news before you do. It’s like fighting Mike Tyson in boxing. You can give it a try, but please know what you’re up to.

William Eckhardt describes it as follows in the book “The new Market Wizards”:

If a betting game among a certain number of participants is played long enough, eventually one player will have all the money. If there is any skill involved, it will accelerate the process of concentrating all the stakes in a few hands. Something like this happens in the market. There is a persistent overall tendency for equity to flow from the many to the few. In the long run, the majority loses. The implication for the trader is that to win you have to act like the minority. If you bring normal human habits and tendencies to trading, you’ll gravitate toward the majority and inevitably lose (The New Market Wizards).

Being different by leaving your fear and greed behind has often been mentioned as necessary in trading. I have experienced how psychologically difficult that is. Ignoring your instinctual human emotions and habits is really hard. Even then, with everything in check, you are betting against more experienced traders.

In the Bitcoin world there are enough beginners to profit from, but eventually professionalism will reach the Bitcoin trading market too. You are currently betting against Bitcoin enthusiasts reading every thread on Bitcointalk. Soon you are betting against market professionals with 5+ years experience in trading. Good luck. For me, day trading it out for sure.

2. Prediction is impossible

It is shown to be impossible to consistently and accurately predict a market weeks or months from now. Many studies show that banana picking monkeys — or blindfolded dart-throwing humans for that matter — are as good in predicting stock movement as financial experts. Yes, you read that right. Here is study one, two, three and four to back it up.

Truth be told, investment managers also manage risk and diversify their clients’ portfolio, so there is some legitimacy to their services, but when stock experts don’t know any better than monkeys if prices are going up or down next months, there is some serious questions to ask. Being an Artificial Intelligence student, I figured it would be possible to create a market prediction model. Of course I wasn’t the only one with that idea. Predictive analytics are now used by investments firms as a new tool in predicting prices. For these algorithmic traders it is by no means a golden bullet, but rather an added tool. Even twitter is used for predictions and ‘beating the news’. With all the Bitcoin data publicly available it would be perfect for the Bitcoin world. There is recently an attempt done on the Bitcoin market: Bitcoin Price Prediction Tool. While I cannot vouch for the accuracy of it, the comments have spotted at least one beginner mistake:

I’m hugely impressed indeed – by the inaccuracy of this tool. Currently, for the 5-day chart, it predicts a rise from $614 to $637 For the same 5-day period in the 20-day chart it predicts a decline to as low as $540. Sounds legit …

I have learned that a Neural Network can be amazingly accurate in learning anything, but they easily overlearns, being too specific about the past to make accurate predictions for the future. A trend line would be more correct, to put it simply. But the biggest problem is that results from the past offer no guarantee for the future. At times its easy to predict the market, at other times markets are acting irrational.

3. Arbitrage is risky in the Bitcoin world

The strategy of arbitrage is when you buy on one exchange and immediately sell for a higher price on a different exchange. Since these price differences are usually only a couple cents in the established markets, one has to perform the trades often and with a lot of money to make a profit. On the FOREX (Foreign Exchange) market you can, and it’s a relatively safe option. Your profit doesn’t depend on a price increase or decrease, but you simply spot opportunities for a quick trade. Since trades are executed so fast and between trusted trade parties, the risk is limited. In the Bitcoin world, long confirmation times pose a challenge to quick trades. Profits could be wiped away by the time the second trade can be made. Whole exchanges going bankrupt or a single unreliable trading partner is fatal. The reliability has to be 100%. Currently, the payoff is bigger for Bitcoin trades, with price differences in the multiple dollars, but the risk is also higher.

4. News is not that important

Please allow me to explain: news can be very important for the price of Bitcoin, say the announcement of the NY BitLicence regulation, or the more positive announcement that Warren Buffet has changed his mind and decided to buy some Bitcoin. But in most cases, by the time you read the news, it has already been factored in by the market. You see, Bitcoin enthusiasts and investors are closer to the news sources than you are. Professional traders run news tickers that receive news minutes before it’s on the websites and Google news. Bitcoin enthusiasts get it from the community forums. And nowadays firms like dataminr try to be before the news by folllowing trends on twitter. In many occasions, I have seen a price surge, only to find out three hours later the news that caused it. It was simply not accessible to me in time. Likewise, do we know what causes the current price drop? But the point I want to make about news is different. Consider this quote:

“The virtual currency’s value recently took a knock causing it to steadily decline in value, from $1,200 to the current $615. This is attributed to Chinese authorities toughened their stance against the company in May and the collapse of online exchange MtGox.”

This is a relatively recent quote. Was the price still going down because of the Chinese government and the Mt. Gox failure? It’s possible, but who knows. More likely is that the author had no clue and just cited a likely item of news as the cause. You’d be surprised at how widespread this approach is in the regular stock markets. I have seen the most exotic motives to explain a price increase of 1-2% in the Dow Jones, when in reality, the market moves 1-2% up or down every single day. A more accurate description would be that some people sold some stocks for some reason. You can’t find out in the established trading world further than that. An interesting feature of Bitcoin is that we can now know. We can track who bought how much, and we can potentially ask that entity why they did it. As soon as this can be done fast and on a massive scale, we should see a more accurate market explanations coming in.

5. There is no such thing as a free lunch

If you prefer a safer way of earning, a year ago I would have recommended mining bitcoins. It is a fixed investment with a return you can calculate. If you have the space to host a Bitcoin ASIC miner and cheap electricity, it is profitable and very safe. Or rather, it should be. As shows by various news reports, Bitcoin miner companies like Butterfly labs and Black Arrow, there is a large risk in purchasing a miner. Occasional delays and no refunds make it very important to choose the right company at the right time. Nature tends to restore itself. For profit, one needs to risk.

Bitcoin spekulation

Bitcoin was never invented as an investment options. It was created in aftermath of 2008 recession, the major cause of recession was banking irregularities, bad loans, high risks with the support of corrupt governments.

Bitcoin was created to use it as alternate currency to traditional fiat currency like US dollar, British pound.

Because Bitcoin is limited, only 21M in the world and 16M in circulation. There’s high demand and because Bitcoin can’t be created on demand prices went high and it will go high in future as well.

Why? 16M Bitcoins, Population of the US 350+ M . Not enough bitcoin for every American, think of rest of the world.

Some people even 16 years old teens made ridiculous amount of money by buying Bitcoin early (I’m talking multi-millions here).

People are still making money by investing in Bitcoin, prices are result of demand and supply differences (you can’t call it speculation).

If you’re interested in buying Bitcoins, buy it from Coinbase

Pro tip: Sign up using my invitation link and get $10 free in Bitcoin while making a purchase of >=$100 in Bitcoins. Sign up here !

Coinbase is available in 32 countries . You can also buy cryptocurrencies using a credit card on Coinbase.

If you’re in India, you sign up at Unocoin .

Bitcoin: Wild Speculation But Transaction Fees Will Hinder Adoption

Bitcoin is not an investment that can be valued on its cash flows, it is merely speculation based on what some future buyer might pay.

Bitcoin's value is untethered to reality, with estimates ranging anywhere from $0 to $1 million.

Bitcoin is technologically inferior to its peers as its transactions are both slow and up to 100x more costly than those of other coins.

Until Bitcoin cures these technological issues, it will not be adopted as an actual currency and is merely a tool for speculators.

I am confident that blockchain technology will thrive and survive, but unless Bitcoin improves, it will not emerge as the winning blockchain currency.

Investment Thesis

Bitcoin (COIN, OTCQX:GBTC) is not an investment, but is instead just speculation, as defined by Seth Klarman. Because of this, its value is not tethered and will fluctuate wildly. As it is presently implemented, Bitcoin is also an inferior cryptocurrency (compared to other notable cryptocurrencies), with transaction fees over 100x higher. Further, these costly transactions do not benefit the consumer. Rather than being faster or offering other advantages, Bitcoin's network is near the limits of its growth, and transactions can be delayed for hours or days.

Bitcoin's value as a currency is dubious at best at a time when transactions cost an average of $22 each. This is far too much for it to see use as a currency, rather than just as a tool for speculators. Until technical issues with Bitcoin are fixed, it is inferior to other common cryptocurrencies and unlikely to retain its value or see increased use as a currency.

I see a bright future for cryptocurrencies in general, but Bitcoin needs technical fixes or else other cryptocurrencies, such as Ethereum or Bitcoin Cash, will surpass it.

1. Bitcoin Is Not An Investment, It Is Speculation

Fig. 1: Bitcoin price history

I have owned Bitcoin and other cryptocurrencies since November 2013, although I recently exited my Bitcoin position but continue to hold Bitcoin Cash. That said, I fully realize that this is just speculating, and not investing. Bitcoin is not an investment.

In Margin of Safety (yours for only $1,270), hedge fund manager Seth A. Klarman writes:

Just as financial-market participants can be divided into two groups, investors and speculators, assets and securities can often be characterized as either investments or speculations. The distinction is not clear to most people. Both investments and speculations can be bought and sold. Both typically fluctuate in price and can thus appear to generate investment returns. But there is one critical difference: investments throw off cash flow for the benefit of the owners; speculations do not. They return to the owners of speculations depends exclusively on the vagaries of the resale market."
(Emphasis in the original)

As defined by Klarman, investments throw off cash flow for the benefit of the owners. Investments include stocks, bonds, certificates of deposits and interest-bearing savings accounts, REITs, rental properties, and more. Each of these assets has in common that they can be valued: You can add up the sum of the cash flows from those assets, discount them back to present values, and determine a value for those investments.

In contract, speculations do not put off cash flows. To use a washed-up example, tulip bulbs in 1637 were speculations: Tulips do not put off cash flows, although they may bloom. Other more relevant examples of speculation include fiat currencies, collectibles including fine art or sports cards, and precious metals such as gold (GLD, IAU). In each case, these items do not put off cash flows, and their own value is what they may later be exchanged for. Bitcoin falls solidly in the category of speculations, rather than investments.

NYU Stern professor Aswath Damodaran distinguishes between two games which may be played by investors: The pricing game and the value game.

Fig. 2: The Pricing Game vs. The Value Game (Source: Aswath Damodaran)

Investments may be bought and sold based on either the pricing game, or the value game. For example, I might purchase Roku (ROKU), based on a belief that the present value of Roku's future cash flows will exceed the price that I pay for shares of the company today. This is the value game. In this game, tools such as DCF valuations may be used, or the use of ratio analysis, in order to determine whether a given investment is likely to rise or fall in the future, be it the short-term or long-term future.

However, others may choose to buy or sell Roku based on their expectations of what the stock price will do in the future, most commonly in the short term. This is the pricing game. Common tools used in the pricing game may include analysis of investor sentiment on Roku, or analysis of the price chart for technical indicators that a stock may be reaching a "support level" or experiencing a "break out." It is probable that most of trades of volatile companies like Roku are based on the pricing game rather than the value game.

2. Bitcoin Prices Are Untethered To Reality

Bitcoin and other speculations are different than investments. Investments like Roku can be bought and sold using either the pricing game or the value game. However, speculations like Bitcoin can be bought and sold only based on the pricing game. While I own Bitcoin, I know that it will never produce cash flows in any form. If I am to profit from Bitcoin, like gold or the Swiss franc, it will because I am able to sell my Bitcoin purchase for more than I bought it for. This is because Bitcoin is not an investment, it is just speculation: The value of Bitcoin is based solely on what others are willing to pay for it.

Because Bitcoin is just speculation, Bitcoin is not tethered to any sort of reality. When reviewing the stock price of Wal-Mart (WMT), there are real cash flow factors to keep in mind: revenue, margins, income, dividends, buybacks, and the like. These factors can be used to value Wal-Mart. Because of the relative consistency of many of these factors, if we asked a crowd of financial experts to value Wal-Mart, they are likely to come up with relatively similar valuations, and those valuations are likely to be near the market price.

In contrast, beliefs in the value of Bitcoin vary wildly. Valuations of the cryptocurrency vary from $0 up to $1,000,000. The prices at which Bitcoin trades are not based on any underlying value provided by the currency, but instead, based on market sentiment about what Bitcoin will be worth in the future. Because of this, Bitcoin has experienced wild fluctuations in price, and will continue to fluctuate.

3. Other Cryptocurrencies Will Surpass Bitcoin

Fig. 3: The market cap of Bitcoin and Other Cryptocurrencies (Source: Coin Market Cap)

Today, Bitcoin is the gorilla in the cryptocurrency room. Its $263 billion market caps the $43 billion of Ethereum, the closest challenger to the throne.

This strength is largely build on brand name and first-mover advantage. Bitcoin was the first decentralized digital currency, and gained a reputation prior to any other cryptocurrency. Because of this, when consumers think of cryptocurrencies, Bitcoin is their first thought. Thus, since these speculations are only subject to the pricing game, Bitcoin's price is significantly higher than that of its peers.

This name value advantage is unlikely to be permanent. Unlike traditional fiat currencies, Bitcoin is not backed by any nation or other strong entity that is likely to protect the currency in the future. While Coca-Cola (KO) has retained a strong brand name for decades, this is not an accident: the Coca-Cola brand is backed by the corporation itself, through advertising, quality control, and other active efforts to keep the brand in the public eye and to ensure that the public has a positive view of the brand. As a decentralized digital currency, Bitcoin has no such billion-dollar entity likely to advertise and fight for the rights of Bitcoin over other cryptocurrencies.

Further, unlike traditional currency, there are technological reasons why Bitcoin is unlikely to be able to retain its position as the top cryptocurrency.

4. Bitcoin Transaction Fees Dwarf Other Cryptocurrencies

Fig. 4: Bitcoin's High Transaction Fees (Source: BitInfoCharts)

Bitcoin's transaction fees are significantly more expensive than those of its competitors. This is a major competitive disadvantage, since one of the primary benefits of a cryptocurrency is the ability to easily and inexpensively move money between parties and wallets without having to pay high costs. The value of "decentralizing" the currency is lost when the price for that decentralization results in fees nearing $22 for each purchase.

If you wanted to walk to the store and purchase a loaf of bread, would you be willing to stomach a $22 surcharge on that transaction? Of course not. Similarly, Bitcoin is simply not useful as a currency in and of itself with these fees. Admittedly, there are ways around these fees, such as off-chain transactions. However, these transactions lose many of the key advantages of Bitcoin itself, such as anonymity and decentralization. For example, if you use Coinbase off-chain transactions, by the Blockchain, those coins are Coinbase's and not yours. Thus, if Coinbase were to be seized by the US government or taken down by hackers, your coins could vanish.

Fig. 5: Comparison of transaction fees (Source: BitInfoCharts)

Bitcoin's transaction costs dwarf those of other currencies, and are high enough that Bitcoin is not useful as a currency except for extremely large transactions. Such transactions are also less likely to occur in Bitcoin due to its high volatility: Why pay $22 for a Bitcoin transaction and risk gaining or losing 20+% on volatility when you can pay for and conduct transactions in a fiat currency?

Bitcoin fees are high right now for technical reasons. One change that was made in the Bitcoin Cash fork is the Bitcoin Cash has an 8MB block which clears over 37,000 transactions. In contrast, Bitcoin is having scalability issues due to its 1MB block size. These scalability issues are severe, and will limit Bitcoin's adoption as a currency:

In contrast to Visa's peak of 47,000 transactions per second, the bitcoin network's theoretical maximum capacity sits at under 7 transactions per second." - Wikipedia

As a result, those wishing to conduct Bitcoin transactions must bid on a miner's fee, which is the transaction fee that is given as a "reward" to miners for confirming the transaction. This fee rises, as seen in Fig. 5, because of supply and demand: There is more demand for Bitcoin transactions than the network can handle.

There are efforts underway to reduce Bitcoin's transaction fees. However, those efforts have been a failure to date, given the transaction fees quoted above. For example, SegWit intended to reduce Bitcoin transaction fees. According to Crypto Coin News, "Bitcoin Fees Are High, But They Will Decrease With SegWit Soon." Disappointingly for users, that article is from August, and quotes fees in the $1 to $5 range.

Fees remain extremely high. Further, the unpredictability of fees has led to uncertainty in transaction processing times. An internet search for "Bitcoin unconfirmed transaction" results in numerous forum posts from users wondering why their transactions have not been processed after days or weeks. While these problems are both avoidable and solvable (by using higher fees and child pays for parent transactions), these problems present a steep learning curve for those wishing to use the currency.

5. Bitcoin's Rocky Future

If Bitcoin is to gain widespread use as an actual currency used for transactions, rather than merely a tool for speculating, it must address these issues of transaction fees and transaction times. Widespread use as a currency is unlikely to occur in a world where transactions cost $22 on average, and where transactions can take hours, days, or weeks to confirm.

Bitcoin will also face additional challenges as new cryptocurrencies are launched. This will be especially so if and whether cryptocurrencies are launched that are back by sovereign nations, by large corporations, or even by assets. For a speculative asset like Bitcoin, with its short and volatile history, the entry of these types of assets into the space could spell doom for investor confidence in the currency, and therefore for the value of Bitcoins.

Blockchain is a powerful technology. One potential use of blockchain technology would be to launch asset-backed currencies. For example, what if a unit of a cryptocurrency was readily exchangeable for, e.g., a portion of the S&P 500 (SPY) or by real estate? Startups are launching cryptocurrencies which intend to back their digital currency with real assets. For example, BrickCoin is an REIT-backed cryptocurrency, where the digital coins will mark ownership of real property. It will be interesting to watch BrickCoin and other asset-backed cryptocurrencies develop, and to see whether any may be able to garner enough support for actual use as a currency, rather than merely as a tool for speculation.

I believe in blockchain technology, and I expect it to significantly alter the economy for years to come. However, Bitcoin, as currently implemented, is not the blockchain-based technology that is likely to take off and see actual use as a currency among consumers. Instead, Bitcoin is merely a tool for speculators at this stage. I am hopeful the Bitcoin's shortcomings will be remedied, and that transaction fees and times will be reduced to allow the cryptocurrency to bloom not just as a tool for speculators, but also as a currency that can be exchanged for goods and services.

We are not there yet.

Disclosure: I am/we are long BCH, ROKU.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Bitcoin Price Soars, Fueled by Speculation and Global Currency Turmoil

SAN FRANCISCO — The virtual currency Bitcoin has been swept up in yet another speculative frenzy, pushing its price toward the peak it last reached in late 2013.

The price of Bitcoin has been buoyed by increased interest from places like Venezuela, where the local currency has lost much of its value, and India, where the government recently removed the largest cash notes from circulation.

More broadly, a tilt toward isolationism that has emerged in American and European politics — highlighted by Donald J. Trump’s election victory — has given a new sheen to a currency that can move between countries with little oversight.

“The more there is an expectation for new barriers to be erected, the more there is an expectation that Bitcoin will be valuable for moving money across borders,” said Gil Luria, the director of research at Wedbush Securities.

Still, most of the people actually buying and selling Bitcoin these days are coming from a single country: China.

Some wealthy Chinese have used Bitcoin to evade their government’s strict controls on moving money in and out of the country, according to Bitcoin specialists in China.

But the heavy trading on Chinese Bitcoin exchanges, much of it by automated software, suggests that most of the price movement is a result of bets by speculators.

In recent days, the price of a Bitcoin has been about 3 percent higher on these exchanges than on dollar denominated exchanges, suggesting more demand in China than outside.

The importance of speculators suggests that the value of Bitcoin is still driven by the hope of how it might be used someday, rather than real world use today, which has generally been hard to quantify.

In dollar terms, a Bitcoin was going for about $1,025 on Tuesday, or about 140 percent more than what it cost at the beginning of 2016.

The volatile price has led many analysts to conclude that is less similar to a currency than to a commodity, like gold, which has a value resulting from its scarcity. In Bitcoin’s case, the rules of the network dictate that only 21 million Bitcoin will ever be created.

The recent rise has brought the price of one Bitcoin to within striking distance of the price of an ounce of gold, which was about $1,150 on Monday.

The price has increased in the last year despite the lack of interest in Bitcoin from banks and a majority of more sophisticated investors.

After showing early interest in the currency, most big banks have moved on to make investments in the blockchain, the new type of ledger technology introduced by Bitcoin, while eschewing Bitcoin itself.

Some central banks have talked about issuing their own national currencies on some sort of blockchain inspired by but unrelated to the blockchain that Bitcoin uses.

Bitcoin and the blockchain were introduced in late 2008 by a mysterious coder who used the name Satoshi Nakamoto. Anyone with a computer and internet access can open a Bitcoin wallet and help maintain the blockchain ledger where all Bitcoin transactions are recorded.

Because it is run by a decentralized network of computers around the world, Bitcoin does not require a central authority like a central bank or financial institution. That has made it attractive to people who hope to do financial transactions anonymously, such as the drug dealers who have sold illicit goods for Bitcoin on the Silk Road website and its successors.

New Bitcoins are released at regular intervals to computers helping to support the Bitcoin network, and previously released Bitcoins can be bought and sold on exchanges around the world.

Since 2009, the price of Bitcoin has generally been defined by long periods of stability marked by short periods of speculative excitement.

The only other time the price of Bitcoin has exceeded $1,000 was in late 2013, when the demand was driven by a surge of interest from Chinese investors and traders.

The price soon crashed when one of the largest Bitcoin exchanges, Mt. Gox, which was based in Tokyo and went bankrupt, announced that it had lost most of the Bitcoins held by its customers (the cause remains in dispute). The Bitcoin price fell to its low — under $200 — in early 2015.

Since then, the price has risen in fits and starts, in part because of continuing hacking and fraud, and because of fights over the direction of the Bitcoin network.

Many Bitcoin businesses have wanted to edit the basic Bitcoin software to change the number of transactions that can move through the network every day. But the proposed changes have run into opposition from the team of coders responsible for maintaining the basic Bitcoin software. Many Chinese Bitcoin companies have sided with the coders.

That disagreement has led to slowdowns on the Bitcoin network, with some transactions taking days to be processed. The slowdowns have made it harder to use Bitcoin for everyday payments.

But through the controversy the security of the basic Bitcoin wallets and transaction software has held up, making it a potential alternative for people in countries with less secure currencies and financial institutions.

In November, interest in Bitcoin spiked in India after the government announced moves to quickly ban the largest Indian bank notes, in an effort to crack down on corruption.

The continued fall in the value of the Venezuelan currency, the bolívar, has led to reports about Venezuelans desperate to exchange their money for Bitcoin.

But despite the new demand, the total value of all outstanding Bitcoin, about $16 billion, is still only that of a medium-size American company, and is not large enough to sustain the demand of even a moderate number of Indians or Venezuelans looking to store their wealth in the virtual currency.

That points back to the importance of speculators, who are betting that someday soon people worldwide will turn to Bitcoin for their daily financial needs, and push the price much higher.

“I ascribe only 10 percent of the value of Bitcoin to current day usage, and more like 90 percent of it to the expectation of future usage,” Mr. Luria of Webush Securities said.

Bitcoin: What's driving the frenzy?

2017 has become the year bitcoin went big.

It started the year worth less than $1,000 but has soared above $17,000. Back in 2011, it was worth less than a dollar. It is being bought and sold by investors in a frenzy, driving the price higher and higher.

Some leading economists and financiers are calling bitcoin a bubble and a fraud, but industry insiders say they think it's only going to get bigger as it gains more widespread acceptance.

So how does the virtual digital currency work -- and what's behind its spectacular rise?

WHAT IS BITCOIN?

Bitcoin ( XBT ) was created in 2009 by an unknown person using the pseudonym Satoshi Nakamoto. Many of its backers saw it as a simple global payment system for anyone to use rather than a financial asset for investors to trade.

Unlike the U.S. dollar or Japanese yen, digital currencies such as bitcoin aren't issued by central banks like the Federal Reserve. Instead, they are "mined" by computers using complex algorithms.

Payments in bitcoin can be made without traditional middlemen such as banks and without the need to give your name.

That made bitcoin popular with criminals and others who wanted to move money anonymously. It's also been adopted by businesses around the world as a way to pay for everyday things like groceries, train tickets and haircuts.

Exchanges, or marketplaces, allow people to buy or sell bitcoins using different currencies. People can send bitcoins to each other using mobile apps or their computers. It's similar to sending cash digitally, and a fee is charged for every transaction.

Bitcoins are stored in a "digital wallet" — a kind of virtual bank account that allows users to send or receive bitcoins, pay for goods or save their money.

Its price has taken off this year as mainstream investors have become more interested.

National governments are trying to keep up, puzzling over how to regulate bitcoin and other so-called cryptocurrencies. Countries like China and Venezuela have expressed interested in creating their own digital forms of money.

WHY HAVE PRICES GONE CRAZY?

Some experts say the biggest force pushing bitcoin prices higher this year has been . higher prices.

Investors have been buying in this year out of "FOMO," or the fear of missing out, according to Dave Chapman, managing director of Octagon Strategy, a Hong Kong-based cryptocurrency exchange.

"There is admittedly a lot of speculation in this market," he said.

Bitcoin is also being driven higher by the hands-off approach many financial regulators seem to be taking toward the digital currency, Chapman said.

Japan's government, for example, gave bitcoin the seal of approval and started licensing bitcoin exchanges earlier this year.

The only black mark has been China, which has been cracking down on some uses of the virtual currency.

Announcements from some major financial institutions in the U.S. are helping bitcoin gain greater mainstream acceptance.

This month, investors will be able to start trading bitcoin futures via the Chicago Board Options Exchange and Chicago Mercantile Exchange.

New York's Nasdaq plans to launch its own bitcoin futures in 2018.

"The fact the CME, CBOE and Nasdaq will now all offer bitcoin products lends additional legitimacy" to the digital currency, said Chapman.

WHO'S BUYING IT?

For much of this year, it's mom-and-pop investors who have been buying in.

Many are in Japan and South Korea, where recent regulation changes have made it easier to trade bitcoin, according to experts.

But the biggest gains from the virtual currency's massive rally are likely to be concentrated among a relatively small number of investors.

When you invest in bitcoin, you don't have to buy a whole unit. According to research site BitInfoCharts, the vast majority of bitcoin accounts contain just 0.1 bitcoin or less. Just 3% of more than 20 million bitcoin accounts hold one bitcoin or more.

Big institutional investors such as hedge funds and assets managers have largely stayed on the sidelines. But some experts predict they'll move into the market in the coming months, despite skepticism from the likes of Warren Buffett and JPMorgan Chase ( JPM ) CEO Jamie Dimon.

WHAT'S NEXT?

Some industry insiders are incredibly bullish.

Arthur Hayes, CEO of Hong Kong bitcoin exchange Bitmex, predicts prices could hit a mind-boggling $50,000 by the end of next year, driven by the flow of money when institutional investors "pull the trigger" on investing in the digital currency.

Octagon's Chapman is willing to stick his neck out even further. He thinks it will go above $100,000 before 2018 is over.

With a total value of around $270 billion, the bitcoin market is small compared with more established assets.

"This is a drop in the ocean compared to the trillions transacted daily" in currency and stock markets, said Thomas Glucksmann, head of marketing at Hong Kong bitcoin exchange Gatecoin. Just a small amount of mainstream investors' money would make a big difference to bitcoin prices, he said.

But some finance industry veterans are wary.

Oanda's Innes, who has worked in currency trading for decades, referenced a famous piece of investment advice from Buffett: "Be fearful when others are greedy."

"Following the herd rarely produces large scale gains," Innes said.

Investors were given a reminder of bitcoin's unpredictability in November. After topping $11,000, it plunged more than $2,000 before resuming its ascent.

Bitcoin spekulation

Bitcoin: Wild Speculation But Transaction Fees Will Hinder Adoption

Dec. 12, 2017 11:46 AM • coin

Summary

Bitcoin is not an investment that can be valued on its cash flows, it is merely speculation based on what some future buyer might pay.

Bitcoin's value is untethered to reality, with estimates ranging anywhere from $0 to $1 million.

Bitcoin is technologically inferior to its peers as its transactions are both slow and up to 100x more costly than those of other coins.

Until Bitcoin cures these technological issues, it will not be adopted as an actual currency and is merely a tool for speculators.

I am confident that blockchain technology will thrive and survive, but unless Bitcoin improves, it will not emerge as the winning blockchain currency.

Investment Thesis

I see a bright future for cryptocurrencies in general, but Bitcoin needs technical fixes or else other cryptocurrencies, such as Ethereum or Bitcoin Cash, will surpass it.

1. Bitcoin Is Not An Investment, It Is Speculation

Fig. 1: Bitcoin price history

In Margin of Safety (yours for only $1,270), hedge fund manager Seth A. Klarman writes:

NYU Stern professor Aswath Damodaran distinguishes between two games which may be played by investors: The pricing game and the value game.

Fig. 2: The Pricing Game vs. The Value Game (Source: Aswath Damodaran)

2. Bitcoin Prices Are Untethered To Reality

3. Other Cryptocurrencies Will Surpass Bitcoin

Fig. 3: The market cap of Bitcoin and Other Cryptocurrencies (Source: Coin Market Cap)

Today, Bitcoin is the gorilla in the cryptocurrency room. Its $263 billion market caps the $43 billion of Ethereum, the closest challenger to the throne.

Further, unlike traditional currency, there are technological reasons why Bitcoin is unlikely to be able to retain its position as the top cryptocurrency.

4. Bitcoin Transaction Fees Dwarf Other Cryptocurrencies

Fig. 4: Bitcoin's High Transaction Fees (Source: BitInfoCharts)

Fig. 5: Comparison of transaction fees (Source: BitInfoCharts)

In contrast to Visa's peak of 47,000 transactions per second, the bitcoin network's theoretical maximum capacity sits at under 7 transactions per second." - Wikipedia

5. Bitcoin's Rocky Future

Frequently Asked Questions

Find answers to recurring questions and myths about Bitcoin.

What is Bitcoin?

Bitcoin is a consensus network that enables a new payment system and a completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet. Bitcoin can also be seen as the most prominent triple entry bookkeeping system in existence.

Who created Bitcoin?

Bitcoin is the first implementation of a concept called "cryptocurrency", which was first described in 1998 by Wei Dai on the cypherpunks mailing list, suggesting the idea of a new form of money that uses cryptography to control its creation and transactions, rather than a central authority. The first Bitcoin specification and proof of concept was published in 2009 in a cryptography mailing list by Satoshi Nakamoto. Satoshi left the project in late 2010 without revealing much about himself. The community has since grown exponentially with many developers working on Bitcoin.

Satoshi's anonymity often raised unjustified concerns, many of which are linked to misunderstanding of the open-source nature of Bitcoin. The Bitcoin protocol and software are published openly and any developer around the world can review the code or make their own modified version of the Bitcoin software. Just like current developers, Satoshi's influence was limited to the changes he made being adopted by others and therefore he did not control Bitcoin. As such, the identity of Bitcoin's inventor is probably as relevant today as the identity of the person who invented paper.

Who controls the Bitcoin network?

Nobody owns the Bitcoin network much like no one owns the technology behind email. Bitcoin is controlled by all Bitcoin users around the world. While developers are improving the software, they can't force a change in the Bitcoin protocol because all users are free to choose what software and version they use. In order to stay compatible with each other, all users need to use software complying with the same rules. Bitcoin can only work correctly with a complete consensus among all users. Therefore, all users and developers have a strong incentive to protect this consensus.

How does Bitcoin work?

From a user perspective, Bitcoin is nothing more than a mobile app or computer program that provides a personal Bitcoin wallet and allows a user to send and receive bitcoins with them. This is how Bitcoin works for most users.

Behind the scenes, the Bitcoin network is sharing a public ledger called the "block chain". This ledger contains every transaction ever processed, allowing a user's computer to verify the validity of each transaction. The authenticity of each transaction is protected by digital signatures corresponding to the sending addresses, allowing all users to have full control over sending bitcoins from their own Bitcoin addresses. In addition, anyone can process transactions using the computing power of specialized hardware and earn a reward in bitcoins for this service. This is often called "mining". To learn more about Bitcoin, you can consult the dedicated page and the original paper.

Is Bitcoin really used by people?

Yes. There are a growing number of businesses and individuals using Bitcoin. This includes brick-and-mortar businesses like restaurants, apartments, and law firms, as well as popular online services such as Namecheap, Overstock.com, and Reddit. While Bitcoin remains a relatively new phenomenon, it is growing fast. At the end of April 2017, the total value of all existing bitcoins exceeded 20 billion US dollars, with millions of dollars worth of bitcoins exchanged daily.

How does one acquire bitcoins?

As payment for goods or services.
Purchase bitcoins at a Bitcoin exchange.
Exchange bitcoins with someone near you.
Earn bitcoins through competitive mining.

While it may be possible to find individuals who wish to sell bitcoins in exchange for a credit card or PayPal payment, most exchanges do not allow funding via these payment methods. This is due to cases where someone buys bitcoins with PayPal, and then reverses their half of the transaction. This is commonly referred to as a chargeback.

How difficult is it to make a Bitcoin payment?

Bitcoin payments are easier to make than debit or credit card purchases, and can be received without a merchant account. Payments are made from a wallet application, either on your computer or smartphone, by entering the recipient's address, the payment amount, and pressing send. To make it easier to enter a recipient's address, many wallets can obtain the address by scanning a QR code or touching two phones together with NFC technology.

What are the advantages of Bitcoin?

Payment freedom - It is possible to send and receive bitcoins anywhere in the world at any time. No bank holidays. No borders. No bureaucracy. Bitcoin allows its users to be in full control of their money.
Choose your own fees - There is no fee to receive bitcoins, and many wallets let you control how large a fee to pay when spending. Higher fees can encourage faster confirmation of your transactions. Fees are unrelated to the amount transferred, so it's possible to send 100,000 bitcoins for the same fee it costs to send 1 bitcoin. Additionally, merchant processors exist to assist merchants in processing transactions, converting bitcoins to fiat currency and depositing funds directly into merchants' bank accounts daily. As these services are based on Bitcoin, they can be offered for much lower fees than with PayPal or credit card networks.
Fewer risks for merchants - Bitcoin transactions are secure, irreversible, and do not contain customersвЂ™ sensitive or personal information. This protects merchants from losses caused by fraud or fraudulent chargebacks, and there is no need for PCI compliance. Merchants can easily expand to new markets where either credit cards are not available or fraud rates are unacceptably high. The net results are lower fees, larger markets, and fewer administrative costs.
Security and control - Bitcoin users are in full control of their transactions; it is impossible for merchants to force unwanted or unnoticed charges as can happen with other payment methods. Bitcoin payments can be made without personal information tied to the transaction. This offers strong protection against identity theft. Bitcoin users can also protect their money with backup and encryption.
Transparent and neutral - All information concerning the Bitcoin money supply itself is readily available on the block chain for anybody to verify and use in real-time. No individual or organization can control or manipulate the Bitcoin protocol because it is cryptographically secure. This allows the core of Bitcoin to be trusted for being completely neutral, transparent and predictable.

What are the disadvantages of Bitcoin?

Degree of acceptance - Many people are still unaware of Bitcoin. Every day, more businesses accept bitcoins because they want the advantages of doing so, but the list remains small and still needs to grow in order to benefit from network effects.
Volatility - The total value of bitcoins in circulation and the number of businesses using Bitcoin are still very small compared to what they could be. Therefore, relatively small events, trades, or business activities can significantly affect the price. In theory, this volatility will decrease as Bitcoin markets and the technology matures. Never before has the world seen a start-up currency, so it is truly difficult (and exciting) to imagine how it will play out.
Ongoing development - Bitcoin software is still in beta with many incomplete features in active development. New tools, features, and services are being developed to make Bitcoin more secure and accessible to the masses. Some of these are still not ready for everyone. Most Bitcoin businesses are new and still offer no insurance. In general, Bitcoin is still in the process of maturing.

Why do people trust Bitcoin?

Much of the trust in Bitcoin comes from the fact that it requires no trust at all. Bitcoin is fully open-source and decentralized. This means that anyone has access to the entire source code at any time. Any developer in the world can therefore verify exactly how Bitcoin works. All transactions and bitcoins issued into existence can be transparently consulted in real-time by anyone. All payments can be made without reliance on a third party and the whole system is protected by heavily peer-reviewed cryptographic algorithms like those used for online banking. No organization or individual can control Bitcoin, and the network remains secure even if not all of its users can be trusted.

Can I make money with Bitcoin?

You should never expect to get rich with Bitcoin or any emerging technology. It is always important to be wary of anything that sounds too good to be true or disobeys basic economic rules.

Bitcoin is a growing space of innovation and there are business opportunities that also include risks. There is no guarantee that Bitcoin will continue to grow even though it has developed at a very fast rate so far. Investing time and resources on anything related to Bitcoin requires entrepreneurship. There are various ways to make money with Bitcoin such as mining, speculation or running new businesses. All of these methods are competitive and there is no guarantee of profit. It is up to each individual to make a proper evaluation of the costs and the risks involved in any such project.

Is Bitcoin fully virtual and immaterial?

Bitcoin is as virtual as the credit cards and online banking networks people use everyday. Bitcoin can be used to pay online and in physical stores just like any other form of money. Bitcoins can also be exchanged in physical form such as the Denarium coins, but paying with a mobile phone usually remains more convenient. Bitcoin balances are stored in a large distributed network, and they cannot be fraudulently altered by anybody. In other words, Bitcoin users have exclusive control over their funds and bitcoins cannot vanish just because they are virtual.

Is Bitcoin anonymous?

Bitcoin is designed to allow its users to send and receive payments with an acceptable level of privacy as well as any other form of money. However, Bitcoin is not anonymous and cannot offer the same level of privacy as cash. The use of Bitcoin leaves extensive public records. Various mechanisms exist to protect users' privacy, and more are in development. However, there is still work to be done before these features are used correctly by most Bitcoin users.

Some concerns have been raised that private transactions could be used for illegal purposes with Bitcoin. However, it is worth noting that Bitcoin will undoubtedly be subjected to similar regulations that are already in place inside existing financial systems. Bitcoin cannot be more anonymous than cash and it is not likely to prevent criminal investigations from being conducted. Additionally, Bitcoin is also designed to prevent a large range of financial crimes.

What happens when bitcoins are lost?

When a user loses his wallet, it has the effect of removing money out of circulation. Lost bitcoins still remain in the block chain just like any other bitcoins. However, lost bitcoins remain dormant forever because there is no way for anybody to find the private key(s) that would allow them to be spent again. Because of the law of supply and demand, when fewer bitcoins are available, the ones that are left will be in higher demand and increase in value to compensate.

Can Bitcoin scale to become a major payment network?

The Bitcoin network can already process a much higher number of transactions per second than it does today. It is, however, not entirely ready to scale to the level of major credit card networks. Work is underway to lift current limitations, and future requirements are well known. Since inception, every aspect of the Bitcoin network has been in a continuous process of maturation, optimization, and specialization, and it should be expected to remain that way for some years to come. As traffic grows, more Bitcoin users may use lightweight clients, and full network nodes may become a more specialized service. For more details, see the Scalability page on the Wiki.

Is Bitcoin legal?

To the best of our knowledge, Bitcoin has not been made illegal by legislation in most jurisdictions. However, some jurisdictions (such as Argentina and Russia) severely restrict or ban foreign currencies. Other jurisdictions (such as Thailand) may limit the licensing of certain entities such as Bitcoin exchanges.

Regulators from various jurisdictions are taking steps to provide individuals and businesses with rules on how to integrate this new technology with the formal, regulated financial system. For example, the Financial Crimes Enforcement Network (FinCEN), a bureau in the United States Treasury Department, issued non-binding guidance on how it characterizes certain activities involving virtual currencies.

Is Bitcoin useful for illegal activities?

Bitcoin is money, and money has always been used both for legal and illegal purposes. Cash, credit cards and current banking systems widely surpass Bitcoin in terms of their use to finance crime. Bitcoin can bring significant innovation in payment systems and the benefits of such innovation are often considered to be far beyond their potential drawbacks.

Bitcoin is designed to be a huge step forward in making money more secure and could also act as a significant protection against many forms of financial crime. For instance, bitcoins are completely impossible to counterfeit. Users are in full control of their payments and cannot receive unapproved charges such as with credit card fraud. Bitcoin transactions are irreversible and immune to fraudulent chargebacks. Bitcoin allows money to be secured against theft and loss using very strong and useful mechanisms such as backups, encryption, and multiple signatures.

Some concerns have been raised that Bitcoin could be more attractive to criminals because it can be used to make private and irreversible payments. However, these features already exist with cash and wire transfer, which are widely used and well-established. The use of Bitcoin will undoubtedly be subjected to similar regulations that are already in place inside existing financial systems, and Bitcoin is not likely to prevent criminal investigations from being conducted. In general, it is common for important breakthroughs to be perceived as being controversial before their benefits are well understood. The Internet is a good example among many others to illustrate this.

Can Bitcoin be regulated?

The Bitcoin protocol itself cannot be modified without the cooperation of nearly all its users, who choose what software they use. Attempting to assign special rights to a local authority in the rules of the global Bitcoin network is not a practical possibility. Any rich organization could choose to invest in mining hardware to control half of the computing power of the network and become able to block or reverse recent transactions. However, there is no guarantee that they could retain this power since this requires to invest as much than all other miners in the world.

It is however possible to regulate the use of Bitcoin in a similar way to any other instrument. Just like the dollar, Bitcoin can be used for a wide variety of purposes, some of which can be considered legitimate or not as per each jurisdiction's laws. In this regard, Bitcoin is no different than any other tool or resource and can be subjected to different regulations in each country. Bitcoin use could also be made difficult by restrictive regulations, in which case it is hard to determine what percentage of users would keep using the technology. A government that chooses to ban Bitcoin would prevent domestic businesses and markets from developing, shifting innovation to other countries. The challenge for regulators, as always, is to develop efficient solutions while not impairing the growth of new emerging markets and businesses.

What about Bitcoin and taxes?

Bitcoin is not a fiat currency with legal tender status in any jurisdiction, but often tax liability accrues regardless of the medium used. There is a wide variety of legislation in many different jurisdictions which could cause income, sales, payroll, capital gains, or some other form of tax liability to arise with Bitcoin.

What about Bitcoin and consumer protection?

Bitcoin is freeing people to transact on their own terms. Each user can send and receive payments in a similar way to cash but they can also take part in more complex contracts. Multiple signatures allow a transaction to be accepted by the network only if a certain number of a defined group of persons agree to sign the transaction. This allows innovative dispute mediation services to be developed in the future. Such services could allow a third party to approve or reject a transaction in case of disagreement between the other parties without having control on their money. As opposed to cash and other payment methods, Bitcoin always leaves a public proof that a transaction did take place, which can potentially be used in a recourse against businesses with fraudulent practices.

It is also worth noting that while merchants usually depend on their public reputation to remain in business and pay their employees, they don't have access to the same level of information when dealing with new consumers. The way Bitcoin works allows both individuals and businesses to be protected against fraudulent chargebacks while giving the choice to the consumer to ask for more protection when they are not willing to trust a particular merchant.

How are bitcoins created?

New bitcoins are generated by a competitive and decentralized process called "mining". This process involves that individuals are rewarded by the network for their services. Bitcoin miners are processing transactions and securing the network using specialized hardware and are collecting new bitcoins in exchange.

The Bitcoin protocol is designed in such a way that new bitcoins are created at a fixed rate. This makes Bitcoin mining a very competitive business. When more miners join the network, it becomes increasingly difficult to make a profit and miners must seek efficiency to cut their operating costs. No central authority or developer has any power to control or manipulate the system to increase their profits. Every Bitcoin node in the world will reject anything that does not comply with the rules it expects the system to follow.

Bitcoins are created at a decreasing and predictable rate. The number of new bitcoins created each year is automatically halved over time until bitcoin issuance halts completely with a total of 21 million bitcoins in existence. At this point, Bitcoin miners will probably be supported exclusively by numerous small transaction fees.

Why do bitcoins have value?

Bitcoins have value because they are useful as a form of money. Bitcoin has the characteristics of money (durability, portability, fungibility, scarcity, divisibility, and recognizability) based on the properties of mathematics rather than relying on physical properties (like gold and silver) or trust in central authorities (like fiat currencies). In short, Bitcoin is backed by mathematics. With these attributes, all that is required for a form of money to hold value is trust and adoption. In the case of Bitcoin, this can be measured by its growing base of users, merchants, and startups. As with all currency, bitcoin's value comes only and directly from people willing to accept them as payment.

What determines bitcoinвЂ™s price?

The price of a bitcoin is determined by supply and demand. When demand for bitcoins increases, the price increases, and when demand falls, the price falls. There is only a limited number of bitcoins in circulation and new bitcoins are created at a predictable and decreasing rate, which means that demand must follow this level of inflation to keep the price stable. Because Bitcoin is still a relatively small market compared to what it could be, it doesn't take significant amounts of money to move the market price up or down, and thus the price of a bitcoin is still very volatile.

Bitcoin price over time:

Can bitcoins become worthless?

Yes. History is littered with currencies that failed and are no longer used, such as the German Mark during the Weimar Republic and, more recently, the Zimbabwean dollar. Although previous currency failures were typically due to hyperinflation of a kind that Bitcoin makes impossible, there is always potential for technical failures, competing currencies, political issues and so on. As a basic rule of thumb, no currency should be considered absolutely safe from failures or hard times. Bitcoin has proven reliable for years since its inception and there is a lot of potential for Bitcoin to continue to grow. However, no one is in a position to predict what the future will be for Bitcoin.

Is Bitcoin a bubble?

A fast rise in price does not constitute a bubble. An artificial over-valuation that will lead to a sudden downward correction constitutes a bubble. Choices based on individual human action by hundreds of thousands of market participants is the cause for bitcoin's price to fluctuate as the market seeks price discovery. Reasons for changes in sentiment may include a loss of confidence in Bitcoin, a large difference between value and price not based on the fundamentals of the Bitcoin economy, increased press coverage stimulating speculative demand, fear of uncertainty, and old-fashioned irrational exuberance and greed.

Is Bitcoin a Ponzi scheme?

A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money, or the money paid by subsequent investors, instead of from profit earned by the individuals running the business. Ponzi schemes are designed to collapse at the expense of the last investors when there is not enough new participants.

Bitcoin is a free software project with no central authority. Consequently, no one is in a position to make fraudulent representations about investment returns. Like other major currencies such as gold, United States dollar, euro, yen, etc. there is no guaranteed purchasing power and the exchange rate floats freely. This leads to volatility where owners of bitcoins can unpredictably make or lose money. Beyond speculation, Bitcoin is also a payment system with useful and competitive attributes that are being used by thousands of users and businesses.

Doesn't Bitcoin unfairly benefit early adopters?

Some early adopters have large numbers of bitcoins because they took risks and invested time and resources in an unproven technology that was hardly used by anyone and that was much harder to secure properly. Many early adopters spent large numbers of bitcoins quite a few times before they became valuable or bought only small amounts and didn't make huge gains. There is no guarantee that the price of a bitcoin will increase or drop. This is very similar to investing in an early startup that can either gain value through its usefulness and popularity, or just never break through. Bitcoin is still in its infancy, and it has been designed with a very long-term view; it is hard to imagine how it could be less biased towards early adopters, and today's users may or may not be the early adopters of tomorrow.

Won't the finite amount of bitcoins be a limitation?

Bitcoin is unique in that only 21 million bitcoins will ever be created. However, this will never be a limitation because transactions can be denominated in smaller sub-units of a bitcoin, such as bits - there are 1,000,000 bits in 1 bitcoin. Bitcoins can be divided up to 8 decimal places (0.000 000 01) and potentially even smaller units if that is ever required in the future as the average transaction size decreases.

Won't Bitcoin fall in a deflationary spiral?

The deflationary spiral theory says that if prices are expected to fall, people will move purchases into the future in order to benefit from the lower prices. That fall in demand will in turn cause merchants to lower their prices to try and stimulate demand, making the problem worse and leading to an economic depression.

Although this theory is a popular way to justify inflation amongst central bankers, it does not appear to always hold true and is considered controversial amongst economists. Consumer electronics is one example of a market where prices constantly fall but which is not in depression. Similarly, the value of bitcoins has risen over time and yet the size of the Bitcoin economy has also grown dramatically along with it. Because both the value of the currency and the size of its economy started at zero in 2009, Bitcoin is a counterexample to the theory showing that it must sometimes be wrong.

Notwithstanding this, Bitcoin is not designed to be a deflationary currency. It is more accurate to say Bitcoin is intended to inflate in its early years, and become stable in its later years. The only time the quantity of bitcoins in circulation will drop is if people carelessly lose their wallets by failing to make backups. With a stable monetary base and a stable economy, the value of the currency should remain the same.

Isn't speculation and volatility a problem for Bitcoin?

This is a chicken and egg situation. For bitcoin's price to stabilize, a large scale economy needs to develop with more businesses and users. For a large scale economy to develop, businesses and users will seek for price stability.

Fortunately, volatility does not affect the main benefits of Bitcoin as a payment system to transfer money from point A to point B. It is possible for businesses to convert bitcoin payments to their local currency instantly, allowing them to profit from the advantages of Bitcoin without being subjected to price fluctuations. Since Bitcoin offers many useful and unique features and properties, many users choose to use Bitcoin. With such solutions and incentives, it is possible that Bitcoin will mature and develop to a degree where price volatility will become limited.

What if someone bought up all the existing bitcoins?

Only a fraction of bitcoins issued to date are found on the exchange markets for sale. Bitcoin markets are competitive, meaning the price of a bitcoin will rise or fall depending on supply and demand. Additionally, new bitcoins will continue to be issued for decades to come. Therefore even the most determined buyer could not buy all the bitcoins in existence. This situation isn't to suggest, however, that the markets aren't vulnerable to price manipulation; it still doesn't take significant amounts of money to move the market price up or down, and thus Bitcoin remains a volatile asset thus far.

What if someone creates a better digital currency?

That can happen. For now, Bitcoin remains by far the most popular decentralized virtual currency, but there can be no guarantee that it will retain that position. There is already a set of alternative currencies inspired by Bitcoin. It is however probably correct to assume that significant improvements would be required for a new currency to overtake Bitcoin in terms of established market, even though this remains unpredictable. Bitcoin could also conceivably adopt improvements of a competing currency so long as it doesn't change fundamental parts of the protocol.

Transactions

Why do I have to wait for confirmation?

Receiving notification of a payment is almost instant with Bitcoin. However, there is a delay before the network begins to confirm your transaction by including it in a block. A confirmation means that there is a consensus on the network that the bitcoins you received haven't been sent to anyone else and are considered your property. Once your transaction has been included in one block, it will continue to be buried under every block after it, which will exponentially consolidate this consensus and decrease the risk of a reversed transaction. Each confirmation takes between a few seconds and 90 minutes, with 10 minutes being the average. If the transaction pays too low a fee or is otherwise atypical, getting the first confirmation can take much longer. Every user is free to determine at what point they consider a transaction sufficiently confirmed, but 6 confirmations is often considered to be as safe as waiting 6 months on a credit card transaction.

How much will the transaction fee be?

Transactions can be processed without fees, but trying to send free transactions can require waiting days or weeks. Although fees may increase over time, normal fees currently only cost a tiny amount. By default, all Bitcoin wallets listed on Bitcoin.org add what they think is an appropriate fee to your transactions; most of those wallets will also give you chance to review the fee before sending the transaction.

Transaction fees are used as a protection against users sending transactions to overload the network and as a way to pay miners for their work helping to secure the network. The precise manner in which fees work is still being developed and will change over time. Because the fee is not related to the amount of bitcoins being sent, it may seem extremely low or unfairly high. Instead, the fee is relative to the number of bytes in the transaction, so using multisig or spending multiple previously-received amounts may cost more than simpler transactions. If your activity follows the pattern of conventional transactions, you won't have to pay unusually high fees.

What if I receive a bitcoin when my computer is powered off?

This works fine. The bitcoins will appear next time you start your wallet application. Bitcoins are not actually received by the software on your computer, they are appended to a public ledger that is shared between all the devices on the network. If you are sent bitcoins when your wallet client program is not running and you later launch it, it will download blocks and catch up with any transactions it did not already know about, and the bitcoins will eventually appear as if they were just received in real time. Your wallet is only needed when you wish to spend bitcoins.

What does "synchronizing" mean and why does it take so long?

Long synchronization time is only required with full node clients like Bitcoin Core. Technically speaking, synchronizing is the process of downloading and verifying all previous Bitcoin transactions on the network. For some Bitcoin clients to calculate the spendable balance of your Bitcoin wallet and make new transactions, it needs to be aware of all previous transactions. This step can be resource intensive and requires sufficient bandwidth and storage to accommodate the full size of the block chain. For Bitcoin to remain secure, enough people should keep using full node clients because they perform the task of validating and relaying transactions.

What is Bitcoin mining?

Mining is the process of spending computing power to process transactions, secure the network, and keep everyone in the system synchronized together. It can be perceived like the Bitcoin data center except that it has been designed to be fully decentralized with miners operating in all countries and no individual having control over the network. This process is referred to as "mining" as an analogy to gold mining because it is also a temporary mechanism used to issue new bitcoins. Unlike gold mining, however, Bitcoin mining provides a reward in exchange for useful services required to operate a secure payment network. Mining will still be required after the last bitcoin is issued.

How does Bitcoin mining work?

Anybody can become a Bitcoin miner by running software with specialized hardware. Mining software listens for transactions broadcast through the peer-to-peer network and performs appropriate tasks to process and confirm these transactions. Bitcoin miners perform this work because they can earn transaction fees paid by users for faster transaction processing, and newly created bitcoins issued into existence according to a fixed formula.

For new transactions to be confirmed, they need to be included in a block along with a mathematical proof of work. Such proofs are very hard to generate because there is no way to create them other than by trying billions of calculations per second. This requires miners to perform these calculations before their blocks are accepted by the network and before they are rewarded. As more people start to mine, the difficulty of finding valid blocks is automatically increased by the network to ensure that the average time to find a block remains equal to 10 minutes. As a result, mining is a very competitive business where no individual miner can control what is included in the block chain.

The proof of work is also designed to depend on the previous block to force a chronological order in the block chain. This makes it exponentially difficult to reverse previous transactions because this requires the recalculation of the proofs of work of all the subsequent blocks. When two blocks are found at the same time, miners work on the first block they receive and switch to the longest chain of blocks as soon as the next block is found. This allows mining to secure and maintain a global consensus based on processing power.

Bitcoin miners are neither able to cheat by increasing their own reward nor process fraudulent transactions that could corrupt the Bitcoin network because all Bitcoin nodes would reject any block that contains invalid data as per the rules of the Bitcoin protocol. Consequently, the network remains secure even if not all Bitcoin miners can be trusted.

Isn't Bitcoin mining a waste of energy?

Spending energy to secure and operate a payment system is hardly a waste. Like any other payment service, the use of Bitcoin entails processing costs. Services necessary for the operation of currently widespread monetary systems, such as banks, credit cards, and armored vehicles, also use a lot of energy. Although unlike Bitcoin, their total energy consumption is not transparent and cannot be as easily measured.

Bitcoin mining has been designed to become more optimized over time with specialized hardware consuming less energy, and the operating costs of mining should continue to be proportional to demand. When Bitcoin mining becomes too competitive and less profitable, some miners choose to stop their activities. Furthermore, all energy expended mining is eventually transformed into heat, and the most profitable miners will be those who have put this heat to good use. An optimally efficient mining network is one that isn't actually consuming any extra energy. While this is an ideal, the economics of mining are such that miners individually strive toward it.

How does mining help secure Bitcoin?

Mining creates the equivalent of a competitive lottery that makes it very difficult for anyone to consecutively add new blocks of transactions into the block chain. This protects the neutrality of the network by preventing any individual from gaining the power to block certain transactions. This also prevents any individual from replacing parts of the block chain to roll back their own spends, which could be used to defraud other users. Mining makes it exponentially more difficult to reverse a past transaction by requiring the rewriting of all blocks following this transaction.

What do I need to start mining?

In the early days of Bitcoin, anyone could find a new block using their computer's CPU. As more and more people started mining, the difficulty of finding new blocks increased greatly to the point where the only cost-effective method of mining today is using specialized hardware. You can visit BitcoinMining.com for more information.

Is Bitcoin secure?

The Bitcoin technology - the protocol and the cryptography - has a strong security track record, and the Bitcoin network is probably the biggest distributed computing project in the world. Bitcoin's most common vulnerability is in user error. Bitcoin wallet files that store the necessary private keys can be accidentally deleted, lost or stolen. This is pretty similar to physical cash stored in a digital form. Fortunately, users can employ sound security practices to protect their money or use service providers that offer good levels of security and insurance against theft or loss.

Hasn't Bitcoin been hacked in the past?

The rules of the protocol and the cryptography used for Bitcoin are still working years after its inception, which is a good indication that the concept is well designed. However, security flaws have been found and fixed over time in various software implementations. Like any other form of software, the security of Bitcoin software depends on the speed with which problems are found and fixed. The more such issues are discovered, the more Bitcoin is gaining maturity.

There are often misconceptions about thefts and security breaches that happened on diverse exchanges and businesses. Although these events are unfortunate, none of them involve Bitcoin itself being hacked, nor imply inherent flaws in Bitcoin; just like a bank robbery doesn't mean that the dollar is compromised. However, it is accurate to say that a complete set of good practices and intuitive security solutions is needed to give users better protection of their money, and to reduce the general risk of theft and loss. Over the course of the last few years, such security features have quickly developed, such as wallet encryption, offline wallets, hardware wallets, and multi-signature transactions.

Could users collude against Bitcoin?

It is not possible to change the Bitcoin protocol that easily. Any Bitcoin client that doesn't comply with the same rules cannot enforce their own rules on other users. As per the current specification, double spending is not possible on the same block chain, and neither is spending bitcoins without a valid signature. Therefore, it is not possible to generate uncontrolled amounts of bitcoins out of thin air, spend other users' funds, corrupt the network, or anything similar.

However, powerful miners could arbitrarily choose to block or reverse recent transactions. A majority of users can also put pressure for some changes to be adopted. Because Bitcoin only works correctly with a complete consensus between all users, changing the protocol can be very difficult and requires an overwhelming majority of users to adopt the changes in such a way that remaining users have nearly no choice but to follow. As a general rule, it is hard to imagine why any Bitcoin user would choose to adopt any change that could compromise their own money.

Is Bitcoin vulnerable to quantum computing?

Yes, most systems relying on cryptography in general are, including traditional banking systems. However, quantum computers don't yet exist and probably won't for a while. In the event that quantum computing could be an imminent threat to Bitcoin, the protocol could be upgraded to use post-quantum algorithms. Given the importance that this update would have, it can be safely expected that it would be highly reviewed by developers and adopted by all Bitcoin users.

I'd like to learn more. Where can I get help?

You can find more information and help on the resources and community pages or on the Wiki FAQ.

Speculation: Bitcoin could reach $250,000 in 2020

If a person who spent $10 back in 2010 to buy a pizza invested that money on Bitcoin, he would become a millionaire having $10 million by now. This fact clearly explains the price hike of Bitcoin. Digital currencies are considered as the future ad they are gradually in the process of replacing traditional currencies. The hike in Bitcoin prices is still taking place. Therefore, we can expect it to go further up in the future as well. If this trend continues, we will be able to see the price of one Bitcoin, equivalent to $250,000 by the end of 2020.

The predictions of Jameson

Jameson Lopp, who is one of the software engineers from BitGo, has given out an accurate description about the price hike of Bitcoin in the future. He has analyzed the trends of this cryptocurrency for a period of seven years in order to come up with his prediction. According to the analytic data, Jameson is pretty sure that the price of a one Bitcoin would be equivalent to $250,000 by 2020.

Jameson has officially announced this fact from one of his Tweets. He has given out a brief explanation on how he worked on the calculations as well. In fact, he has drilled down to a daily analysis in order to see how the price is being varied. As a result, the accuracy of information presented by him is relatively high.

As mentioned earlier, Jameson took daily value change of Bitcoin into account, while he was working on the calculations. He also took the downfall of the Bitcoin value back in 2014 as well. However, he observed an overall positive trend in the price hike of Bitcoin since 2010.

The exponential hike in price

After evaluating the price hike of Bitcoin for a period of 7 years, Jameson realized that it showed an exponential growth. In other words, the daily price hike measured 0.09% in 2015, 0.22% in 2016 and 0.66% in 2017. This is the main reason why we were able to see the price going from $980, all the way up to $2750 within the first six month of 2017. With this rate, we can definitely expect the Bitcoin prices to go all the way up to $250,000 by 2020.

The figures that are expected to see in 2020 have been calculated by Jameson as per the figures that he analyzed. Therefore, $250,000 is not a ballpark figure. When calculating this value, Jameson came up with one key assumption, which is the value of Bitcoin would increase by 0.42% on a daily basis. According to Jameson, no linear calculation method or graphical calculation method can be used in order to predict the price of Bitcoin in future. That’s mainly because the exponential growth cannot be modeled through such calculation methods. Therefore, a single formula cannot just be used to calculate the price of Bitcoin.

As mentioned earlier, Bitcoin price is showing a non-linear behavior. Therefore, we can expect the daily value change of the digital currency to increase along with time. This can make the ultimate value of a Bitcoin reach up to $250,000 after a period of three years. However, we are not in a position to validate the accuracy of this fact because the changes that can take place within the cryptocurrency, such as a hard fork is in a position to create an impact on the end value. However, we can say that it would be somewhere around $250,000.

The role of the media

When analyzing the upward trend of cryptocurrencies, we cannot simply forget the role played by media. Some of the mainstream media outlets have already started giving insights about the cryptocurrency future. They have paid special attention towards Bitcoin instead of the other cryptocurrencies. In addition, media has taken necessary steps in order to compare Bitcoin along with other assets that are available for the people such as gold.

The recent reports of ABC news can be considered as a perfect example to highlight the role played by mainstream media in terms of cryptocurrency. ABC news is a national news service that is based in Australia. It was established by the Australian Broadcasting Corporation. During the past few months, ABC news has been offering an extensive coverage to the people about Bitcoin. The same is applicable for The Wall Street Journal as well. All the media channels are comparing Bitcoin to other currencies that exist out there in the world. They include comparisons in between Bitcoin and USD, Bitcoin and Japanese Yen, Bitcoin and GBP, Bitcoin and Euro and Bitcoin and INR. According to these comparisons, it can clearly be seen that the value of Bitcoin is increasing relative to the value of the currency.

According to Alan Silbert, who is the Senior Vice President for Capital One Healthcare, it has been identified that the Wall Street Journal Newspaper is digging down into the insights of Bitcoin along with their episodes. Alan Silbert is also the founder of Bit Premier and he seems to be impressed with the steps that are taken by the Wall Street Journal newspaper. Bitcoin has even appeared on the front pages of these newspapers. This has heavily influenced the customers. On the other hand, the demand towards Bitcoin is increasing on a daily basis because of this fact as well.

Once the scaling issues that exist in Bitcoin are resolved, more and more investors would start purchasing Bitcoins. This reason would also contribute towards the exponential growth of the cryptocurrency.

As you can see, the value associated with Bitcoin is increasing at a rapid pace. Therefore, it is the high time for people to think of this excellent investment opportunity. If the current trend continues, the value of a Bitcoin would reach up to $250,000. However, you don’t need to keep any second thoughts in your mind because the value is increasing on a daily basis.

Bitcoin Prices Rebound on Coincheck Takeover Speculation

Capital flowed back into bitcoin on Tuesday amid reports that a major Japanese exchange was planning to make a bid for Coincheck, the Tokyo-based crypto platform that was recently hacked.

BTC/USD Price Levels

The value of bitcoin climbed more than 7% on Tuesday, reaching a session high of $7,529, according to CoinMarketCap. At the time of writing, BTC/USD was valued at around $7,450 for a market cap of $124.6 billion.

Bitcoin’s share of the total crypto market is at 45%, which is about 12 percentage points higher than January’s all-time low. Bitcoin’s growing dominance means more cryptocurrencies follow its lead. This was evident on Tuesday, as the total market cap rose by $20 billion to $282.4 billion.

Trade volumes in bitcoin surpassed $5.4 billion on Tuesday, accounting for more than a third of overall market activity.

The world’s largest crypto asset was engulfed in bearish pressure over the weekend after the 50-day moving average crept below the 200-day MA. The so-called “death cross” formation usually signals further downside ahead.

Coincheck Takeover Rumors

Japanese online exchange Monex Group is reportedly in talks to buy a majority stake in Coincheck, according to a report by the Nikkei Asian Review. The acquisition will allow Monex to rehabilitate the exchange in the wake of a major cyber attack that resulted in the loss of more than $500 million.

The deal is reportedly worth one billion yen, which is equivalent to roughly $10 million USD. Nikkei’s sources indicated that a deal could be announced by the end of this week. Meanwhile, Monex shares spiked more than 23%.

Speculation about the potential acquisition boosted investor confidence that cryptocurrency would achieve greater mainstream adoption in Japan. For some, cryptocurrency still faces a crisis of legitimacy, which is limiting its uptake in traditional finance and consumer circles.

While Coincheck has already begun repaying customers for the loss of funds, the exchange has faced multiple lawsuits from disgruntled investors. Japan’s Financial Services Agency (FSA) has also levied two business improvement orders on the exchange for failing to protect its customers.

Japanese regulators have stepped up their oversight efforts in response to the Coincheck hack. Crypto exchanges themselves have also come together to develop a self-regulatory regime, according to multiple sources familiar with the discussions. This includes developing a new body to govern exchanges currently registered with the FSA.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Rate this post:

Sam Bourgi

Litecoin Pops after Amex-Backed Startup Broadens Its Embrace of LTC Smart Contracts

Pre-Market: Stocks Bounce as Europe Returns but Sellers Still in Control

2 Comments

April 4, 2018 at 12:33 am

I think one significant piece today (though not affecting the majors) is the legal action taken by the SEC against Centra and their CTR token. Unfortunately, those holding CTR lost some 75% of their investment which is sad news, however, we have seen our first example of regulation proving positive against dodgy ICOs and could be the start of a clean up of the over-supply and more focused investment in the more established reputable cryptos going forward. Perhaps some correlation with today’s movements, perhaps not.

April 4, 2018 at 9:01 am

Just noticed you covered the CTR news under another article…

You must be logged in to post a comment Login

You must be logged in to post a comment.

Crypto Update: Coins Suffer Another Hit as Bounce Fades

Bulls were only in control for a short period during the weekend, as the declining short-term trend continued in the cryptocurrency segment. Most of the majors hit marginal new lows today in early trading, and small caps are also under pressure, as correlations between the coins spiked higher again. Bitcoin is holding up relatively well amid the selloff, trading right at last week lows, after breaching the weekend trading range this morning.

Given the weakening bearish momentum and the favorable long-term setups, a failed breakdown and a quick recovery could point to a durable bottom here. That said, until further signs of strength, short-term traders should still stay away from new positions in case of most of the coins. While BTC gathered relative strength, and Ripple, IOTA, and Bitcoin Cash also held up, Ethereum has been leading the way lower, with Monero and Dash also lagging the broader market.

BTC/USD, 4-Hour Chart Analysis

BTC broke below the $7350 level, exiting the weekend range, but the coin remained stable, and the momentum of the move is weak so far, while the MACD is still showing a positive divergence. Despite that, the declining trend is clearly intact and with the strong resistance zone between $7650 and $7800 still ahead, traders should still wait before entering new positions. Above that further resistance is found at $8400 and $8700 and between $9000 and $9200, while support is at $7000 and $6750.

ETH/USD, 4-Hour Chart Analysis

Ethereum is trading on a new low after the overnight plunge, and it is relatively weak from a short-term perspective, although compared to the April low the coin is still among the stronger majors. ETH fell below the $555-$575 support zone today, and could be headed for a test of the next major level at $500. The currency is now nearing oversold levels with regards to the long-term momentum indicators, so investors could already add to their holdings, while traders should wait for a trend change before entering the market, with further resistance ahead $between $625 and $645.

Ripple Finds Support Again

XRP/USD, 4-Hour Chart Analysis

Ripple followed the broader market lower today in early trading, but it remains near last week’s low as it only briefly broke below the key $0.5750 support level. The coin is showing a positive momentum divergence, but for now, the short-term trend is clearly negative. While we expect a durable bottom to form soon, traders should still not enter new positions here, but Ripple will likely be among of the leaders of the next leg higher.

Featured image from Shutterstock

Disclaimer: The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

Rate this post:

Bitcoin, Ethereum Lead Cryptocurrency Market Lower as Trade Volumes Plunge to Six-Week Lows

Cryptocurrencies continued lower on Sunday after a stalled recovery limited gains to the low single digits, as weak trading volumes kept prices locked in a downtrend.

Crypto Market Price Update

Digital currency prices were down across the board Sunday, with bitcoin and Ethereum leading the declines.

Bitcoin bottomed at $7,243.90, its lowest since April 11. BTC values recovered at $7,348, having lost more than 2% over the past 24 hours. The world’s largest cryptocurrency has lost more than $17 billion in market cap compared with last week.

Ether prices bottomed at $562.23 over the weekend, giving back more than $200 from its most recent high three weeks ago. Ethereum is down nearly 20% in value over the past seven days. It was last seen trading around $569.63.

Bitcoin cash dipped below $1,000 after climbing back above the psychological threshold on Friday. At last check, it was valued at $995.88.

Stellar Lumens was down more than 5% to $0.276.

The crypto market cap is down more than $10 billion over the past 24 hours with total coin values hovering north of $326 billion. The market bottomed at $320 billion on Thursday.

Trading volumes have declined sharply over the past five days, with the market turning over just $13.1 billion on Sunday. That was the lowest turnover in six weeks.

The Bullish Case for Bitcoin

The latest market drama is once again forcing investors to think long and hard about their existing crypto holdings. Though the altcoin universe offers plenty of stellar projects, the bullish case for bitcoin remains stronger than ever, especially at current price levels. That’s because a growing number of use cases and increased institutional adoption make BTC an attractive long-term hold.

Though some have speculated that institutionalizing bitcoin is responsible for its marked decline since December, wider adoption is a net positive for the digital currency. Institutions today are exploring ways to offer bitcoin to their clients and developing new custody platforms that are designed to make holdings more secure.

Another interesting tidbit: bitcoin’s fees on Saturday briefly fell below rival bitcoin cash. Data from fork.lol show that BTC’s transaction costs were lower over a six-hour period, with the discount widening over a three-hour stretch.

By Sunday, the picture had reverted back to the norm with bitcoin transactions costing more than its rival.

Though it’s not entirely clear why bitcoin’s transaction costs declined so sharply on Saturday, the average tx fee for the world’s largest cryptocurrency is extremely erratic. The fee on bitcoin cash, on the other hand, is usually much more stable.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Rate this post:

Sam Bourgi

Blockchain

Justin Sun Plans To Buy BitTorrent

Justin Sun, the CEO of TRON, is finalizing an agreement to buy BitTorrent, inc. Most people know BitTorrent as the creator of the popular torrenting client, uTorrent, which at its peak had over 100 million users.

According to Torrentfreak.com, BitTorrent has been in a steady decline to some poor decisions and potentially illegal missteps by their management.

In an interview with BitTorrent founder Bram Cohen, the management was painted by Cohen as incompetent narcissists who had no business plan and no idea what they were doing besides chasing some nebulous idea of celebrity endorsement.

This can be seen in Cohen’s statement, “They were just incompetent fuckups. I mean they’re losers. Basically, Accel took their share in BitTorrent and pretty much just gave it away to these total strangers who they didn’t know. And not only gave away their stock but gave away control of the company.

Human beings are a bunch of starfuckers, right? The United States has become this celebrity-obsessed culture, and everyone’s all about, oh, we’ll gain access. That’ll be great, and we’ll make money off of it, everybody thinks this.”

It is against this backdrop that Sun’s alleged acquisition is taking place. The TRON projects alleged goal is to “decentralize the web.” Owning one of the most recognizable brands aligned with these goals would be a major coup for the ambitious CEO.

This is due to the fact that the most likely use case of uTorrent by TRON would be to simply parlay its user base into usage of the TRON blockchain.

Since a huge part of TRON’s model relies on advanced content search for media files, simply making use of the uTorrent brand but integrating it with Tron’s decentralized search would instantly transform TRON into one of the most actively utilized blockchains on earth.

The information stems from the fact that BitTorrent changed their company name recently to Rainberry according to their chief product officer. “Rainberry Inc is the official name of the company; it was changed right around the start of 2017.” He stressed that it was a purely corporate decision and that none of the existing product brands would change.

Despite this blanket denial, it seems like the acquisition was proceeding swiftly, and was even overcoming some initial hurdles. BitTorrent had already tried to find a better acquisition offer during the first round of negotiations, to the point that Justin Sun took them to court in an attempt to stop them from negotiating with other buyers.

However, it seems that these initial roadblocks have been overcome, as a new company called Rainberry Acquisition, (BitTorrent recently changed their official company name to Rainberry) was formed and registered directly to Justin Sun. How Sun plans to integrate the platform with Tron is an open question, but it is likely to result in some interesting synergies.

Featured image courtesy of Shutterstock.

суббота, 23 июня 2018 г.

bitcoin_spekulation

Error 521 Ray ID: 422b939260168e73 • 2018-05-29 20:05:33 UTC

Web server is down

Cloudflare

What happened?

What can I do?

If you are a visitor of this website:

If you are the owner of this website:

Bitcoin Price Speculation – Lessons Learned From Trading Stocks

1. 70% – 90% of traders are losing money

2. Prediction is impossible

3. Arbitrage is risky in the Bitcoin world

4. News is not that important

5. There is no such thing as a free lunch

Bitcoin spekulation

Related QuestionsMore Answers Below

Bitcoin: Wild Speculation But Transaction Fees Will Hinder Adoption

Investment Thesis

1. Bitcoin Is Not An Investment, It Is Speculation

2. Bitcoin Prices Are Untethered To Reality

3. Other Cryptocurrencies Will Surpass Bitcoin

4. Bitcoin Transaction Fees Dwarf Other Cryptocurrencies

5. Bitcoin's Rocky Future

Bitcoin Price Soars, Fueled by Speculation and Global Currency Turmoil

Bitcoin: What's driving the frenzy?

2017 has become the year bitcoin went big.

WHAT IS BITCOIN?

WHY HAVE PRICES GONE CRAZY?

WHO'S BUYING IT?

WHAT'S NEXT?

Bitcoin spekulation

Investment Thesis

1. Bitcoin Is Not An Investment, It Is Speculation

2. Bitcoin Prices Are Untethered To Reality

3. Other Cryptocurrencies Will Surpass Bitcoin

4. Bitcoin Transaction Fees Dwarf Other Cryptocurrencies

5. Bitcoin's Rocky Future

Frequently Asked Questions

Table of contents

What is Bitcoin?

Who created Bitcoin?

Who controls the Bitcoin network?

How does Bitcoin work?

Is Bitcoin really used by people?

How does one acquire bitcoins?

How difficult is it to make a Bitcoin payment?

What are the advantages of Bitcoin?

What are the disadvantages of Bitcoin?

Why do people trust Bitcoin?

Can I make money with Bitcoin?

Is Bitcoin fully virtual and immaterial?

Is Bitcoin anonymous?

What happens when bitcoins are lost?

Can Bitcoin scale to become a major payment network?

Is Bitcoin legal?

Is Bitcoin useful for illegal activities?

Can Bitcoin be regulated?

What about Bitcoin and taxes?

What about Bitcoin and consumer protection?

How are bitcoins created?

Why do bitcoins have value?

What determines bitcoinвЂ™s price?

Can bitcoins become worthless?

Is Bitcoin a bubble?

Is Bitcoin a Ponzi scheme?

Doesn't Bitcoin unfairly benefit early adopters?

Won't the finite amount of bitcoins be a limitation?

Won't Bitcoin fall in a deflationary spiral?

Isn't speculation and volatility a problem for Bitcoin?

What if someone bought up all the existing bitcoins?

What if someone creates a better digital currency?

Transactions

Why do I have to wait for confirmation?

How much will the transaction fee be?

What if I receive a bitcoin when my computer is powered off?

What does "synchronizing" mean and why does it take so long?

What is Bitcoin mining?

How does Bitcoin mining work?

Isn't Bitcoin mining a waste of energy?

суббота, 23 июня 2018 г.