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World stocks hits fresh highs, as bitcoin keeps climbing – business live

World stocks hits fresh highs, as bitcoin keeps climbing – business live

All the day’s economic and financial news,

as new Chinese trade figures beat expectations

  • Bitcoin hit $5,800
  • Chinese imports surge by 18.7%, suggesting strong demand
  • US surplus hits record high, but trade with North Korea tumbles
  • MSCI World Index hits new peak
  • FTSE 100 hit new closing high last night
  • Coming up: US inflation; IMF meeting

A worker processes panda soft toys for export to American and European markets at a factory in Lianyungang, Jiangsu province,

China, this week.

…The cryptocurrency community is aware of the sheer energy consumption issue. Therefore, it is looking for alternative solutions to the Mad Max problem.

One alternative may be Proof of Stake. Miners are not asked to show they put in work (computing power) in validating but to commit valuable resources beforehand, indicating they have a stake in the proper outcome. For example, miners may have to put an amount of cryptocurrency in escrow which is only released if no fraud is detected, otherwise forfeited.

That sounds like a smart idea. However, it implies that only those wealthy enough to be able to put resources in escrow can join the mining process. This creates a plutocracy, which sits uncomfortably with cryptocurrency’s anarchistic and libertarian roots.

My conclusion is that finding a sustainable and fair solution to the Mad Max Problem is one of the biggest challenges for the cryptocurrency community today.

The US inflation figure was the main focus in the day’s data, says Connor Campbell, financial analyst at Spreadex,

and it came in below expectations:

US consumer confidence hits highest level since 2004

The survey’s chief economist Richard Curtin said:

The October gain was broadly shared, occurring among all age and income subgroups and across all partisan viewpoints. The data indicate a robust outlook for consumer spending that extends the current expansion to at least mid 2018, which would mark the 2nd longest expansion since the mid 1800’s.

While the early October surge indicates greater optimism about the future course of the economy, it also reflects an unmistakable sense among consumers that economic prospects are now about as good as could be expected. This “as good as it gets” outlook is supported by a moderation in the expected pace of growth in both personal finances and the overall economy, accompanied by a growing sense that, even with this moderation, it would still mean the continuation of good economic times.

…Nothing in the latest survey indicates that consumers anticipate an economic downturn anytime soon – which contrarians may consider a clear warning sign of trouble ahead. Nonetheless, consumers anticipate low unemployment, low inflation, small increases in interest rates, and most importantly, modest income gains in the year ahead. It is this acceptance of lackluster growth rates in personal income and in the overall economy that signifies that consumers have accepted, however reluctantly, limits on the pace of improving prospects for living standards.

Wall Street opens higher

The dollar has weakened following the US data, in particular the inflation figures. But – barring political ructions – the Federal Reserve is still on track for a rate rise in February, says James Knightley,

chief international economist at ING Bank:

Inflation pressures are grinding higher and domestic activity is strong, suggesting that the main barrier to a higher Fed funds rate is political rather than economic.

The US CPI report shows inflation pressures are rising, but this is primarily an energy story reflecting higher oil prices and refinery shutdowns relating to Hurricane Harvey. At the headline level it rose 0.5% month on month/2.2% year on year (a tenth of a percentage point below what was expected). Energy prices rose 6.1% month on month, but excluding food and energy inflationary pressures were more muted, rising just 0.1% month on month/1.7% year on year (again a tenth of a percentage point below expectations).

In terms of core inflationary pressures, we are starting to see a bit more upward movement in the housing component, but medical care, apparel and education prices are very soft. Nonetheless, with the economy growing quite strongly, the jobs market looking tight with wage growth starting to show some signs of life we would expect inflation rates to creep higher….

September retail sales [data] has also been released and is strong, rising 1.6%MoM with small upward revisions to August’s data. Hurricane effects are clearly visible – higher gasoline prices boosted gasoline station sales 5.8%MoM while the fact unit car sales rose to a 12 year high helped boost the value of sales with a 3.6%MoM rise. Strength can also be seen in other components and it is likely that there was some uplift as households start to replace lost items following the recent hurricanes. This has come on top of what is already a strong story for the consumer with employment, wages and confidence all looking healthy.

We expect the positive story to continue into next week with industrial production rebounding following storm disruption. After all, the ISM manufacturing index is at a 13 year high, the dollar is making exports more competitive and we are seeing stronger global growth.

With overall economic growth looking good, inflation pressures gradually increasing and the Fed’s worries about asset valuations and financial stability becoming more prominent in speeches, a December rate hike is looking likely. The main risk remains the potential for an economically/market destabilising government shutdown.

Meanwhile US retail sales have bounced back in September, albeit just shy of expectations:

Newsflash: inflation across America rose last month, but by less than expected.

So, is bitcoin a sensible investment at today’s record levels, or should you keep well away?

The moment bitcoin hit a new all-time high over $5,800 today Photograph: Bloomberg But critics argue that the recent rally is a bubble, that could burst if there is a rush to the exits. Lee Wild, head of equity strategy at Interactive Investors, says anyone considering investing in

digital currencies needs to be cautious:

“The value of bitcoin has almost doubled in less than a month which is clearly attracting further interest from speculators. There’s evidence of growing institutional activity, too, and if China reopens cryptocurrency exchanges after the Communist Party Congress which starts next week, some believe the price could reach $10,000 by the end of the year.

“However, there could be near-term turbulence around changes to the code the bitcoin network runs on, due to be implemented in mid-November. “It is crucial that retail investors understand the many risks involved in cryptocurrency trading, not least the volatility – bitcoin has lost more than a third of its value on two occasions since June. It is clearly not for the faint-hearted.”

The pace of bitcoin’s rally in recent weeks is quite remarkable.As this chart from Bloomberg shows, it’s quadrupled in value this year, despite faltering last month when China announced a crackdown on bitcoin exchanges.Our economics editor, Larry Elliott, has been holding the World Bank to account at their

Annual Meeting with the IMF in Washington:

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

Bitcoin hits new highs

Bitcoin hits new highs

India’s stock market has been swept to a new alltime high today:

 

The Nifty has hit 3 fresh records in the last 2 months but it has been one roller-coaster ride!

China also hit a milestone for iron ore imports last month, as it bought more higher-quality stocks from abroad.

Bloomberg has the details:

Iron ore imports by China surged above 100 million metric tons to a record, smashing the previous high set in 2015, as the country’s concerted push to clean up the environment stoked demand for higher-grade material from overseas while hurting local mine supply.

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

Tell Us Why You Bought Bitcoin Or Face Account Closure: US Bank To Customer

Tell Us Why You Bought Bitcoin
Or Face Account Closure:
US Bank To Customer

US bank PNC allegedly “wants nothing to do with Bitcoin”

but still threatens to close accounts if customers do not reveal why they bought it. That’s according to a story circulating on social media getting increasing attention from the cryptocurrency community. A post by PNC account holder u/EliToohey Thursday recounts how the bank contacted them demanding to know why Bitcoin had been purchased from exchanges Coinbase and Xapo. “I've had a banking relationship with PNC Bank for 15 years and I just got a call to verify unusual activity,” the post reads. “He asked me to confirm a couple transactions then asked ‘For what purpose are you buying Bitcoin’”.

When the user refused to divulge the “purpose,” the bank’s representative threatened to close the account. “I told him I wouldn't answer, he then asked ‘What are you going to do with the Bitcoin’”, u/EliToohey continues. “I again told him I wouldn't answer. He then informed me that his security team told him they would ‘exit the relationship with me’ if they didn't get satisfactory answers.” The episode is not unusual in the often bizarre relationship banks have with cryptocurrency.

Tales of threats and sudden account suspensions have surfaced not just in the US, but also in Europe, with UK-based Barclays becoming one of the worst offenders in terms of contradictory and overreaching policy. Banks’ treatment of Bitcoin combined with bankers’ championing fiat has led to increasing ridicule from cryptocurrency investors in light of JPMorgan CEO Jamie Dimon’s allegations that Bitcoin is a “fraud.” Unlimited fiat money supply was a topic touched on by entrepreneur and commentator Tuur Demeester Wednesday, who highlighted a quote from the

US Federal Reserve on the issue.

Imagine if Satoshi's white paper said: "Bitcoin's total money supply doesn't really matter" Tuur Demeester (@TuurDemeester) October 11, 2017

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

$5k Forever! Bitcoin Price Surges To Claim New All-Time Highs

$5k Forever! Bitcoin Price Surges To Claim New All-Time Highs

Analysts are more confident than ever that Bitcoin

will stay above $5000 today as prices continue surging towards new highs of $5050. Technical data from multiple sources indicates no slowdown in Bitcoin’s charge to retake the historic price level, having increased by $600 since Monday. Now, forecasts of resistance range from $5200 to $7000 should the largest digital currency

Hold above the barrier.

If we pass 5k, next possible resistance at 7k if we follow the same trend pattern #BTC #XBT #bitcoin $crypto #blockchain #moon #hodl pic.twitter.com/U8cZArrnaR, $BTC Over $5000 soon !
If It's gone try to $5200 pic.twitter.com/wmqhYGrQTu

More resilient

Bitcoin passed $5k for the first time September 2, before dropping back markedly as markets reacted to subsequent regulatory moves in China. A period of volatility, which saw prices dip below $2000 soon reversed, Bitcoin becoming rapidly more resilient to further

Hostile reactions from authorities.

"This week’s decision to block access to cryptocurrency exchanges in Russia, for example, had barely any effect on Bitcoin’s upward trajectory."

While BTC is no stranger to corrections, buoyant short-term predictions by well-known investors are flowing. On Wednesday, Mike Novogratz told CNBC he “would not find it surprising” if one bitcoin cost $10,000 by April 2018. At press time, BTC was trading around $5050 per coin according to Bitcointicker’s tracking of Bitstamp rates. In altcoin markets meanwhile, activity was flat as investors appeared to turn to Bitcoin.

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

Vladimir Putin: Cryptocurrency Poses ‘Serious Risks’

Russian president Vladimir Putin said in a meeting today

that cryptocurrencies pose significant risks related fraud and money laundering. Quoted by Russian state news service TASS, Putin was speaking during a meeting that was focused on the subject of cryptocurrencies and financial tech more broadly. In the meeting, he formally voiced his support for new rules around cryptocurrency trading, stating that Russia should look to international examples as a guide when developing those regulations.

Indeed, the meeting represents some of Putin's most comprehensive comments on the subject to date. He first spoke about cryptocurrencies in the summer of 2015, remarking at the time that there were "serious, really fundamental issues related to its wider usage." In his new statements, Putin highlighted the rising profile of the technology, while also echoing those 2015 comments.

Putin was quoted as saying:

"Virtual [currencies] or cryptocurrencies are becoming and have already become more popular. They have already become or are turning into a full-fledged payment instrument and an investment asset in certain countries. At the same time, use of cryptocurrencies also carries serious risks."

On the subject of the rules themselves, Putin threw his support behind regulations that would protect consumers and facilitate the development of new financial products. "We should develop such a regulatory system on the basis of international experience that will make possible to make relations in this sphere systemic, definitely protect interests of citizens, business and the government, and provide legal guarantees for work with innovative financial instruments," he said.

His comments come after a senior official for Russia's central bank stated publicly that his institution will support efforts to block access to external websites that offer cryptocurrency brokering services in the country. Representatives from the Bank of Russia were also present at the Putin meeting, according to sources.

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

Abu Dhabi Issues Cryptocurrency and ICO Regulations

Abu Dhabi Issues Cryptocurrency and ICO Regulations

 

The government of Abu Dhabi, through its markets regulator,

has released guidelines on virtual currencies and initial coin offerings (ICOs). The government of Abu Dhabi has published [PDF] guidelines to bring clarity to its regulatory approach to ICOs and virtual currencies for ICO organizers and digital currency adopters. After deliberation, the Financial Services Regulatory Authority (FSRA)– Abu Dhabi’s financial markets regulator – has decided that a “one size fits all” approach to virtual tokens, be it ICO tokens or digital currencies or any other implementation of blockchain solutions powered by crypto tokens, is “inappropriate.”

ICOs – Only Regulated if Seen as Securities

“The ICO market is incredibly diverse in terms of quality, there are some ICOs which constitute high risk,” said Christopher Kiew-Smith, head of fintech strategy at the FSRA. “The disclosures are not there, there are no financial statements, those are extremely high risk for those seeking returns.

Under the new guidelines, companies wishing to organize an ICO are now mandated to approach the FSRA where the authority will determine if the token offering is to be regulated as a security. If the FSRA determines the token falls outside the definition of a security, the token offering will remain unregulated. The FSRA underlined ICOs as “a novel and potentially more cost-effective way of raising funds for companies and projects.” Altogether a decidedly contrasting approach to the likes of China and South Korea who imposed blanket bans on ICOs.

FSRA chief executive director Richard Teng stated:

ICOs have transformed the capital formation landscape and global regulatory frameworks are evolving to adapt to such innovation. Participants exploring the issuance of ICOs that offer real value to the market and wish to operate within our regulatory framework are encouraged to engage us early to gain insights into the applicable regulatory regime.

Cryptocurrencies = Commodities

The FSRA, which also serves as Abu Dhabi’s financial watchdog, has determined that virtual currencies aren’t legal tender with characteristics more common with physical commodities like precious metals and fuels, due to their inherent value.

The FSRA explained:

Therefore from a regulatory perspective, virtual currencies are treated as commodities, which are not Specified Investments as defined under the FSMR. This means that a “mining” or spot transaction in virtual currencies will not constitute a Regulated Activity in itself.

Nonetheless, any regulated firms enabling or using virtual currencies for financial services will have to adhere to existing anti-money laundering/combating the financing of terrorism (AML/CFT) laws.

Bitcoin Could Still be Regulated, in the Future

The Abu Dhabi regulator has not ruled out the possibility of bringing cryptocurrencies like bitcoin under its regulatory purview. Pointing to a recent FinTech pact with its regulatory counterpart in Japan, FSRA capital markets director Wai Lum Qwok revealed that the watchdog is in discussions with Japan’s Financial Services Agency (FSA) about its regulation of bitcoin. Japan recognized bitcoin as a legal method of payment in April this year. More recently, the authority issued 11 licenses for bitcoin exchanges to operate in the country.

In notable quotes, FSRA’s capital markets director Wai Lum Qwok stated:

For us, we do see a lot of challenges in regulating something which was designed not to be regulated. We recently established a fintech reach with the Japanese FSA, and through such cooperation we hope to see how they regulate these and if there are risks they see…We are open to carving virtual currencies into the regulated space.

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

Bitcoin Prices Higher, Bitcoin Cash Rebounds

Bitcoin Prices Higher, Bitcoin Cash Rebounds

Bitcoin prices higher, bitcoin cash rebounds

Investing.com – Bitcoin prices rose on Tuesday to hit fresh six-week highs, while bitcoin offshoot Bitcoin Cash rebounded following a slump in the previous session. On the U.S.-based Bitfinex exchange, Bitcoin hit a high of $4,885.30, the most since September 2 and was last at $4,817.60, up $34.60 or 0.72%. Bitcoin prices are back above pre-China-ban levels as traders anticipate the next leg higher in the digital currency, which could see it test its all-time high of $4,969. The sharp move higher has seen bitcoin’s market cap surge to $80 billion

The recovery in Bitcoin prices comes less than a month after China clamped down on bitcoin related activity, ordering domestic bitcoin exchanges to cease operations. Prices shrugged off reports on Tuesday that Russia is planning to block access to websites of exchanges that offer cryptocurrencies. Russian central bank First Deputy Governor Sergei Shvetsov said authorities cannot give direct and easy access to such “dubious instruments” for retail investors.

He made the remarks at a conference on financial market derivatives. Shvetsov said the central bank sees rising interest in cryptocurrencies because of high returns from buying into such instruments. He warned, however, that cryptocurrencies gradually transform into high-yielding assets from being a mean of payment. The price of bitcoin offshoot Bitcoin Cash was higher. It was last at $324.00, having opened at $311.86.

Bitcoin cash has a total market cap of around $5.4 billion at current prices, making it the fourth most valuable cryptocurrency. Elsewhere in cryptocurrency trading, Ethereum, the second biggest cryptocurrency by market cap after bitcoin, was up 0.99% to $300.50.

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

This 39-year old sold everything he had for bitcoin — now he lives on a campsite waiting for the ultimate cryptoboom

This 39-year old sold everything he had for bitcoin — now he lives on a campsite waiting for the ultimate cryptoboom

Didi Taihuttu believes in bitcoin, and in a big way.

The 39-year-old has put his house up for sale — selling it in part for bitcoin — and now lives with his family on a campsite near Venlo in The Netherlands. All of his other items are for sale, too: the car, the motorbike, electric bikes, the children's toys, clothing, shoes. ith the proceeds, Taihuttu buys bitcoin and other cryptocurrencies, betting that it will make him rich."People will say, 'You're crazy'," Taihuttu told Business Insider. "But we are an adventurous family and are going to gamble for a moment to live minimalist lives. If you never take a risk, life is boring."

Taihuttu thinks digital coins such as bitcoin and the blockchain technology behind it are transforming the role of money and banks in society. With blockchain, no third party is required to approve a payment — a role currently performed by banks — and a network of computers keeps a record of all transactions. "The Internet was a revolution for information. I think that blockchain and cryptocurrency are revolutionising the monetary system," says Taihuttu. "In five years' time, everyone will say: 'We could have seen it coming.' I am responding to this change now."

Travelling the world for nine months

In the summer of 2017 Taihuttu and his wife made the radical decision to sell everything. The couple have just returned from a nine-month world trip through Asia and Australia with their three daughters. The Taihuttu's visits included Angkor Wat in Cambodia, swimming with dolphins near Brisbane and relaxing on the beach in Thailand.

Early last year, Taihuttu's father, John, died from cancer aged 61. A year before, it became clear that the former professional football player was incurably ill. "It was a difficult period," says Taihuttu, who ran his own company offering computer courses in Venlo for 11 years. "I had had it. I sold my business and we decided as a family to go travelling."

The crypto-believers

During that journey Taihuttu kept bumping into people who were using digital coins. In Bali, he met a South African exchange trader who resigned after 17 years and went into crypto trading. And on the beach near Noosa in Queensland he spoke to someone from Dubai who was trading in bitcoin. Taihuttu kept in touch with them all. They maintain contact through Skype, analyze the market daily and trade cryptomines based on what they're seeing in the price action.

"They are people who have a lot of experience in trading," says Taihuttu. "That is what I am still lacking a little." Taihuttu himself has been "in the coins", as he says it, since 2010, when the currency was worth less than one euro. "I am an entrepreneur, so when I first heard about bitcoin, I said: let's do this."

Mining bitcoin with dozens of computers

Along with a friend, Taihuttu set up a physical business to mine bitcoin after buying dozens of computers and video cards. When the value rose to several hundred euros in 2013, he decided to sell the coins. The entire stock. "If I had known then that four years later it would have been ten times more valuable, then of course I wouldn't have sold everything," says Taihuttu now. "But then I thought: I have to make a profit."

It wasn't too much later when the value of bitcoin plunged and its value was no longer clear. Suddenly, Taihuttu's cost of electricity and property rental were too high. Taihuttu then gave Dogecoin, a smaller emerging currency, a go. "I've had a tremendous amount of it, but that coin was worth nothing," he says. "The portfolio that I had at the time was perhaps worth 200 euros." In the end, he stopped minting for two years.

Dogecoin becomes a saviour

During Taihuttu's world tour, he got a message from a friend who had first told him about bitcoin. "Check your coins! Check your coins!" Dogecoin's value had soared to ten to twenty times its previous worth. In the spring of 2017, bitcoin's value rose to $3,000, and other cryptocurrencies climbed along with it. At work, at home, in the supermarket: suddenly everyone was talking about crypto craze. "That Dogecoin made me realise again: There is something going on in the world," says Taihuttu. The fact that he continued to meet so many bitcoin traders on his family's world trip was a sign for him. "This is no coincidence, I thought. So I went back into it again."

Selling the house

Back home, Taihuttu went to the real estate agent and told them he wanted to sell his house for 85 bitcoin. The Venlo property had been on the market for eight months, yet remained unsold. The decision attracted a lot of media attention and the property has been sold under reservation to a cryptocurrency trader. "He came to the house with his wife and they both thought it was great," says Taihuttu. "The asking price of 300,000 euros is as good as achieved," says Taihuttu. What part of it will be paid in bitcoin is yet to be negotiated with the buyer. "It is likely that the excess will be partly paid for in bitcoin, so that I have no problem repaying the mortgage," he says.

The system is not equipped

At the end of the day, banks are one of the biggest obstacles to selling a house entirely for bitcoin. Just like a conveyancer. Without the intervention of the latter, a house cannot change owner. The buyer typically pays the purchase price into a trust account set up by the conveyancer, which then passes the deed of sale. If the transfer of the property has been registered in the Land Registry, the conveyancer will transfer the amount to the seller.

These transactions still have to be carried out in euros, because the conveyancer does not have a digital wallet to store cryptocurrencies. And there is another problem: what if the bitcoin falls in value in the few days that the purchase price is on the conveyancer's trust account? "The entire system is not designed for it. I wanted to help start changing that,"says Taihuttu. "Unfortunately, it has not become what I had expected. We in the Netherlands have not yet reached the point where we have complete confidence in blockchain, so the notary will have to act."

Minimalist lifestyle

The new lifestyle look a while for the Taihuttu family to get used to. Their luxury four-bedroom, 200 square meter house has been swapped for a chalet on a campsite. Taihuttu's three daughters, who had each had their own room, now all bunk in together. The family's other items are also for sale, in order to buy as much bitcoin as possible. The family will continue this way until 2020, at which point Taihuttu hopes bitcoin and blockchain will be irreplaceable and his wealth will be worth three to four times as much.

In the meantime, the family lives with fewer things.

"That was ultimately the decisive factor for my wife to say yes to this plan," says Taihuttu. "Education is the best for the kids. If you raise your kids to be too materialistic, it is not good. And that was what we were doing, to be honest." And if things go wrong? "Then we will be without money for a moment. But I don't think that that's the worst thing that can happen in life."

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

Things Ray Dalio Hasn’t Learned About Crypto Yet

Things Ray Dalio Hasn't Learned About Crypto Yet

 

“Bitcoin today you can't make much transactions in it. You can't spend it very easily."

That's what Ray Dalio, founder of mega hedge fund Bridgewater, had to say about Crypto last month.

He went on to say:

"It's not an effective storehold of wealth because it has volatility to it, unlike gold […] Bitcoin is a highly speculative market. Bitcoin is a bubble."

These remarks (as well as a recent barrage on the topic by JPMorgan CEO Jamie Dimon) got me excited. Excited because the very people who have built modern “Big Money” don't understand the power that crypto is unleashing around the world. What’s being built isn’t a new area of finance—it’s an entirely new parallel replacement. So Ray, Jamie—these are the highlights of crypto that opened my eyes to what may be coming. And now I can hardly look away.

Some ground rules:

 
  • It's not new money—don't bring the biases you have tied to government-issued currency—it's something far more powerful.
  • Remember: it's still extremely early. In Internet terms, recall the days of the 14.4 KB/s modem. We can squint and begin to imagine Netflix playing on a iPhone, but we are still very far away.
  • No one knows where this leads (this author included) — but it's important to understand why this is like nothing before.

What the internet is for information, blockchain tech is for transactions.

This is important. The Internet is, at it’s core, a series of protocols that allow people—who have no prior relationship—to move data back and forth. This goes from low-level things like semi-structured text all the way to streaming 360-degree video. But as soon as the smallest snippet of text was transferred, everything else could follow. What the internet also did—that wasn’t really possible in the previous world of proprietary machine data connections—was provide smart linkage between content. Example primitives here include embedding a photo and linking to a different web page.

How does this apply to transactions?

Bitcoin’s key “academic” revelation was the first practical solution to a long-standing (since 1982) problem—called the Byzantine Generals Problem.

This problem is as follows:

Several armies surround a castle they are going to attack. Each army faction is led by a general. However, they must all attack simultaneously to ensure success. It doesn’t matter what time they attack, so long as they agree. Since they are spread out, it makes communication unreliable. If two attack times were proposed, some generals might hear a different one first. And worse, some of the generals are traitors, and may relay an incorrect message (wrong attack time or similar) to the other generals. So how can the generals ensure a coordinated attack?

In Satoshi's (the pseudonymous founder of Bitcoin) own words:

They use a proof-of-work chain to solve the problem. Once each general receives whatever attack time he hears first, he sets his computer to solve an extremely difficult proof-of-work problem that includes the attack time in its hash. The proof-of-work is so difficult, it's expected to take 10 minutes of them all working at once before one of them finds a solution. Once one of the generals finds a proof-of-work, he broadcasts it to the network, and everyone changes their current proof-of-work computation to include that proof-of-work in the hash they're working on. If anyone was working on a different attack time, they switch to this one, because its proof-of-work chain is now longer.

After two hours, one attack time should be hashed by a chain of 12 proofs-of-work. Every general, just by verifying the difficulty of the proof-of-work chain, can estimate how much parallel CPU power per hour was expended on it and see that it must have required the majority of the computers to produce that much proof-of-work in the allotted time. They had to all have seen it because the proof-of-work is proof that they worked on it. If the CPU power exhibited by the proof-of-work chain is sufficient to crack the password, they can safely attack at the agreed time.

If you are new to crypto: a “hash” is basically a fingerprint—a secure, repeatable reduction of information. Imagine I send you a file via an insecure channel. Someone could tamper with the file. But if I’ve told you (offline, or another secure channel) what the “hash” is, then you can check to make sure the file arrived without tampering. With the solution for the Byzantine Generals in hand, “Money” as we know it is the easy demonstration app to build—akin to transferring plain text between computers in Internet terms. Bitcoin may not be the platform that captures much of the innovation yet to come, but it’s clearly benefitting from the network effects of being the first real-world deployment that demonstrates the power of this technology.

Never before could anyone build a monetary “country.”

Our locally-issued currency (“fiat” for short) is a relatively fragile, modern invention. We don't have to look very far into history to see how this method may well be ill suited for our future. Consider the Bretton Woods Agreement — named for international conference held in a New Hampshire town of the same name in 1944, at the end of WWII. In short, the agreement was that countries may set their own interest rates, so long as they artificially constrained and fixed exchange rates between each country.

Why? The goal was for countries to have sufficient yield in capital to rebuild war-torn Europe. If currencies were to be fluid, all the capital would go to the economy with the highest real yields (and likely be unavailable for lower-return, but still necessary projects.) The IMF and World Bank were established to finance shortfalls across member countries. But differences in inflation rates went on to rip this agreement apart by the beginning of the 1970s. Even at the size of nations, it's hard to keep anything static in markets. Even after further recalibration, the subsequent floating exchange rates put in place led to rampant inflation in the ‘70s.

In our modern age—with unlimited information and entirely geographically dispersed organizations—why would any organization tie themselves to their geographically-proximate neighbors? Ask anyone who has managed payrolls across currencies: it's an entirely different risk. Now with Crypto, anyone—whether a company, a protocol, a network (think EBay buyers and sellers)—can create their own monetary country. This new country's value, relative to more-commonly-traded-counterparts, may experience significant amounts of volatility.

It doesn't matter that Bitcoin's transactions aren't scalable: you don't have to carry only one physical currency to the global markets. It doesn't matter that it's highly volatile, relative to fiat currency: you will seamlessly be able to convert value to the economic “country” where you need to spend it. Some of these countries (maybe even Bitcoin itself) will eventually become incredibly stable. (Or maybe a monetary country will emerge that provides a simple future yield contract, with desired stability characteristics.)

Some of these “new countries” may badly draw their own borders and be unsustainable or disastrous. Existing nations may be hostile—and attempt to seize or shut down smaller crypto countries. As the Bitcoin project itself has shown—internal politics and inability to move quickly might be huge challenges within these projects. Regardless of an individual ecosystem’s success or failure, this is a new power we've never seen or experienced at scale.

It's a currency. It's access to the network. And it's equity in the project.

With the “real” rates (interest minus inflation) stuck at nearly zero for so long, there's just too much money seeking return. I've written before about the ICO phenomenon and the incredible volume (relative to VC as a whole) that is rushing into the system. At the core: the flexibility of the token system is allowing market demand for non-zero interest returns to seep into new technology projects. So what’s an ICO? Answer: it totally depends.

Chuck Reynolds


Marketing Dept
Contributor
Please click either Link to Learn more about -Bitcoin.
Interested or have Questions. Call me 559-474-4614

What’s Bitcoin exactly, and should I invest in it?

What's Bitcoin exactly, and should
I invest in it?

 

Bitcoin, the best-known of the upstart digital currencies,

is still a mystery to many Americans. If you've heard about Bitcoin, it's mainly from startling headlines about its 400% price gain earlier this year, or its surge to nearly $5,000 last month, making it the the most-valuable player in the mushrooming space for so-called crytocurrencies. Or because Wall Street skeptics call it a “fad,” a “fraud” and a “speculative bubble.” Believers in Bitcoin say it’s the money of the future, a digital alternative to the dollar or euro or yen. Non-believers say it’s not real money. After all, you can't dig into your pocket and pull one out like a $10 bill and hand it to a cashier at Dunkin Donuts to pay for your morning coffee. Some investment pros say it’s a new asset class, no different from a stock, a bond or an ounce of gold, and that it has great investment promise. Skeptics say it’s not an investment because there’s no good way to value it.

So what exactly is Bitcoin?

Bitcoin is a digital currency and digital payment system that allows people to send and receive Bitcoins — or digital tokens — to anyone, anywhere in the world. It runs on a decentralized network of computers where all transactions are recorded, verified and updated by technology known as blockchain, which is akin to an online public ledger. Unlike traditional payment networks such as Mastercard, Bitcoin isn’t owned by anyone.There’s no central authority, such as a bank or government, that's in charge of it.

How do you buy Bitcoin?

An easy way to get started is to set up an account with a Bitcoin exchange like U.S.-based Coinbase, which allows you to purchase Bitcoins with money from your bank account or credit card. And just like the New York Stock Exchange is a place you can go to buy and sell stocks like Apple or Amazon, these exchanges will let you trade cryptocurrencies.

How do I access my bitcoin “money”?

Bitcoins purchased on an exchange or received in a transaction can be stored and accessed in a so-called "Bitcoin Wallet," which is like a bank account. A Bitcoin Wallet lets you receive Bitcoins, store or save them, and send them to others. There are apps that allow you to install a Bitcoin Wallet on your computer or mobile device.

Where can I spend it and what can I buy with it?

You can spend your Bitcoin at any retailer set up to accept Bitcoin as money to pay for purchases. But Bitcoin hasn’t yet enjoyed widespread adoption, and those retailers that do accept it, mostly are set up online. You can use Bitcoin to buy over 1,000 products at discount retailer Overstock.com. You can also go online and use Bitcoin at Microsoft to buy apps, games and videos on Xbox, book airline tickets from CheapAir.com or hotel rooms from Expedia, purchase a satellite TV subscription from Dish Network or buy a sub sandwich from an Allentown, PA, Subway store. One way to get around retailers not accepting Bitcoin is to purchase gift cards for retailers like Amazon or BestBuy at gift card makers like eGifter that accept Bitcoin.

How are Bitcoins priced?

The price is determined by supply and demand – and market forces. The Bitcoin supply will be limited to 21 million, and currently there are roughly 16.6 million. Whether Bitcoin rises or falls in value depends on whether investors believe it will gain widespread acceptance, whether it can avoid being shut down by governments and whether it can continue to dominate the digital currency market or be surpassed by one of more than 1,100 other cryptocurrencies.Bitcoin has so much flavor of the month because it is a relatively new alternative currency demanded by hackers. Video provided by TheStreet Newslook

What do investors need to know about Bitcoin?

Bitcoin has gained most of its notoriety as an investment. A single Bitcoin ended 2016 at around $950 but skyrocketed to nearly $5,000 on Sept. 1. That's a gain of around 425%. But one of Bitcoin’s downsides is that it has proved to be wildly volatile. Three weeks after hitting its 2017 peak, it had given back more than 25% before rallying back 20% to around $4,350 Friday.

Bulls and Bears collide on Bitcoin

That rapid ascent has been accompanied by wildly different prognostications about Bitcoin’s future. Bulls like Thomas Lee, founder of Wall Street firm Fundstrat Global Advisors, see promise. His firm thinks Bitcoin could be worth $6,000 by the middle of 2018, 40% higher than current levels. His long-term target is as high as $25,000 by 2022. He believes Bitcoin will enjoy “expanded acceptance” as a digital currency and payment platform as well as “broader adoption” as a “store of value” similar to gold. He also sees a growing interest from big institutional investors, largely because the market cap of the cryptocurrency market has grown to an estimated $147.4 billion, according to CoinMarket.com.

But there's some  big bears out there. Jamie Dimon, CEO of J.P. Morgan, has called Bitcoin a “fraud.” At a recent investment conference, Dimon said, “Right now, cryptocurrencies are kind of a novelty.” His fear is that when people start to lose money, governments around the world will eventually “shut down” exchanges that trade digital currencies. “It will end badly,” he said. 

But where Dimon sees trouble, others see profit-making opportunities. 

Bitwise Asset Management, a San Francisco-based startup, has just introduced a new cryptocurrency investment fund. The Bitwise HOLD 10 Private Index fund tracks the top 10 cryptocurrencies weighted by market cap, including No. 1 Bitcoin and others such as Ethereum, Ripple, and Zcash. Citing risk  and a need to “proceed with caution,” Bitwise co-founder Hunter Horsley says it makes more sense for investors to be able to buy a basket of cryptocurrencies to reduce risk through diversification. His firm's new fund will track the biggest cryptocurrencies like the Standard & Poor’s 500 stock index tracks the largest U.S. stocks.

“Our view is that, over time, as cryptocurrencies continue to ascend along with their potential, that more people will want to participate via investing,” Horsley told USA TODAY. He says owning a basket of cryptocurrencies is better than owning just Bitcoin. He notes that Bitcoin, which made up roughly 85% of the total cryptocurrency market earlier this year, now accounts for about 55% of its total market cap. “You don’t want to be trying to pick the winners,” he says.

There are now at least 55 crypto-focused hedge funds, according to financial research firm Autonomous Next. And Goldman Sachs, a big Wall Street bank, is reportedly looking into a new trading operation involving Bitcoin and other digital currencies. Don’t buy the hype, counters value investor Howard Marks of Oaktree Capital Management. “In my view, digital currencies are nothing but an unfounded fad, based on a willingness to ascribe value to something that has little or none beyond what people pay for it,” Marks told clients in a letter back in July.”

Chuck Reynolds


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