Digital Diehards

Exactly 10 years ago today Satoshi Nakamoto set in motion his plan to create a new form of money that is independent of any government or bank. 


The evolution of bitcoin and blockchain over the last decade has been so remarkable that I’m sure even Satoshi himself could not have imagined the impact of his work.

Happy Birthday, Bitcoin!

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

Flash Crash Rips the Currency Markets

Shut Down: Day 13

Crypto Flash Setup

Please note: All data, figures & graphs are valid as of January 3rd. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Yesterday afternoon, shortly after the markets closed Apple came out with a shocking report.

Shares of the world’s largest company fell about 7% in after-hours trading and are expected to open this morning with a huge gap down.

At some level, just about every investor in the world who holds a stock portfolio has some exposure to Apple shares, that includes most pensions and investment portfolios in the world. Apple has already been under pressure from the tech rout but this new leg down bumps up the severity and further jeopardizes the entire market.

It’s not just stocks that are affected by this either. Shortly after Apple’s announcement, there was some very peculiar activity in the currency market.

The flash crash impacted almost all currencies but was felt strongest in the Japanese Yen. Japan is still closed for the holiday, so the thin liquidity, especially during the wee hours of the morning when most other countries are sleeping, was also said to have been a trigger for this flash crash.

As you’ll recall, the flash crash that happened in the British Pound on October 7th, 2016, also happened during the early morning Japanese session when volumes are lowest.

Here we can see the scope of the crash in the USDJPY on three different time scales.

Also, the second most affected currency seems to be the Turkish Lira. In this chart we can see the USDTRY repelling away from 200 day moving average (blue line), that it has been testing for a few weeks.

Day 13

As the US Government partial shutdown enters its 13th day, tensions couldn’t be higher. A meeting between President Trump and the Democrats ended very poorly yesterday, with neither side willing to compromise over the budget.

Today will probably be more of the same illiquid flight to safety markets. but you never know really and a turnaround or even a flattening is always possible.

Tomorrow, we’ll receive the monthly jobs report from the United States. This oughta be fun.

Crypto Setup

Gains across most of the popular cryptoassets have been rather mild lately. While it’s good to see bitcoin holding steady, we’re actually starting to see a side of the market that is more typical during a bull run.

Surges in alt coins are suddenly getting more common. Though I can’t quite explain what happened to Paragon, a cannabis-related alt coin, that went from 16 cents to more than $10 and back within a few hours on Tuesday. This could very well be a product of an illiquid market, similar to what we saw above.

However, more serious projects like EthereumEOS, and Iota have actually seen sustainable double-digit gains this last week.

What’s becoming clear is that there’s a large disconnect between cryptoasset pricing and industry growth. My comments to this effect were covered by Bloomberg yesterday, and I’m now considering adding “digital diehard” to my bio.

Kidding aside. We’ve tried to call the bottom of this market several times now without success, so I’ll reserve my predictions on that front. But, what I can say is that crypto has evolved from virtually nothing into an entire budding industry within 10 short years. I can only imagine what the next 10 years will bring.


This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

eToro is a multi-asset platform which offers both investing in stocks and cryptocurrencies, as well as trading CFD assets. 

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework. 

The post Digital Diehards appeared first on Bitcoinist.com.

Source: Blockchain

Fred Wilson: 2019 Will Find the Bottom and ‘Slowly’ Enter a Bull-Run

Fred Wilson Union Square Vetures

Fred Wilson, the co-founder of Union Square Ventures, holds that 2019 will see the cryptocurrency market bottom out and ‘slowly’ enter a new bull run. However, he’s also concerned by actions of ‘misguided’ regulators. 


2019: Finding the Bottom

Venture capitalist and co-founder of investment firm Union Square Ventures, has laid down his predictions on the overall state of the cryptocurrency market in 2019.

The investor believes that we are currently in the process of bottoming out. However, he thinks that this would take much of 2019 but it will be followed by “some bullish runs.”

I expect we will see some bullish runs, followed by selling pressures taking us back to retest the lows. I think this bottoming out process will end sometime in 2019 and we will slowly enter a new bullish phase in crypto.

Unlike others who’ve based their positive predictions on catalysts such as further market adoption, institutional money entering the market, infrastructure, and so forth, Wilson sees the premise of a new bullish run in the face of the results of promises made back in 2017.

I think the catalyst for the next bullish phase will come as the result of some of the many promises made in 2017 coming to fruition in 2019 […] I think we will see a number of “next gen” smart contract platforms ship and challenge Ethereum for leadership in this super important area of the crypto sector.

Another area where Wilson thinks 2019 will bring ‘meaningful progress’ and further adoption is stablecoins. He’s not alone on the matter.

Bitcoinist reported earlier in November that CoinJar’s co-founder Asher Tan also believes in the potential of stablecoins to solve the problem of volatility in the cryptocurrency space.

Regulatory Concerns

The venture capitalist also shares that there will be pressure on the cryptocurrency industry, in general. According to him, it will stem from ‘misguided regulators’.

The area I am most concerned about are actions brought by misguided regulators who will take aim at high quality projects and harm them.

Back in October, industry proponent Jeremy Allaire, CEO of investment application Circle, called for globally coordinated cryptocurrency regulations. At the same time, the Chairman of the US Commodity Futures Trading Commission (CFTC) J. Christopher Giancarlo urged regulators to apply a “do no harm” approach to cryptocurrency legislation.

Last but not least, Wilson thinks that scams, hacks, and overall failures are going to remain a “drag on the sector.” However, he also holds that this is normal and ‘always the case’ with emerging tech.

What do you think of Fred Wilson’s prediction of the cryptocurrency industry’s condition in 2019? Don’t hesitate to let us know in the comments below!


Images courtesy of Shutterstock, Wikipedia.org

The post Fred Wilson: 2019 Will Find the Bottom and ‘Slowly’ Enter a Bull-Run appeared first on Bitcoinist.com.

Source: Blockchain

India Likely To Lift Cryptocurrency Ban in 2019

India's Supreme Court to Issue Final Ruling on RBI Cryptocurrency Ban in September

India’s long-running saga regarding the legality of cryptocurrency is likely to see a lifting of the current ban in 2019.


Indian Flip Flops

Reports suggest the Gov’t formed committee debating the matter are in favor of legalization, although with strong regulations.

India was a notable early adopter of Bitcoin, prompting the Reserve Bank of India (RBI) to issue its first cryptocurrency warning way back in December 2013. But Indians continued to embrace cryptocurrency with a fervor matched only by RBIs increasing animosity towards it.

Despite this, it is interesting to note that RBI was considering its own fiat-cryptocurrency, the Lakshmi, back in September 2017. In the end, though, it seems that the bank considered a ban to be a better solution.

But Who Banned What Exactly?

In April this year, RBI ordered financial institutions to stop providing services to businesses involved with cryptocurrency. Companies were given a three month grace period, so the ban came into force on July 5.

However, though the central bank’s position on the matter was made fairly explicit, the government’s position seemed increasingly at odds with this. Reports stated that the Indian government had no intention to enforce a blanket ban on cryptocurrency.

Ongoing Confusion

Lawyers for industry players are locked in an ongoing legal battle to repeal the RBI ban, which was allegedly implemented without any research being conducted.

Reserve Bank of India

RBI Headquarters in Mumbai

The government has been deliberating its final decision, suggesting that it may reach some conclusion before the end of the year. Meanwhile, the Supreme Court gave the government a two-week deadline to provide some clarity back in October – which it missed.

The government’s own suggested resolution date has again slipped back, and this latest report suggests the committee’s recommendations will come in February 2019 (a further delay).

When Clarity Comes

Companies are queuing up to (re)enter the Indian market if the ban does finally get lifted.

This includes social media giant, Facebook, which is supposedly working on a stable coin for WhatsApp. The initial focus of this venture is said to be the remittances market in India.

Will India eventually lift its ban on cryptocurrency? Share your thoughts below!


Images courtesy of Shutterstock 

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Source: Blockchain

Ethereum ICO Treasury Withdrawals Hit 2018 High in December

Ethereum ETH withdrawals

Projects which had their initial coin offerings (ICOs) on the blockchain of Ethereum have quickly liquidated their ETH holdings since June of 2018. Treasury withdrawals hit a year-high in December with more than 420,000 ETH being liquidated.


420,000 Ethereum Sold in December

Upwards of 420,000 ETH has been liquidated from ICO treasuries so far in December, making the month the largest withdrawal period this year according to Diar. 

The market research firm also reveals some statistics for 2018’s prolonged bear market. In January, the total amount of ETH held in ICO treasuries was 4,623,148. Currently, this number has been reduced to 3,052,168 ETH. The average monthly withdrawal is 2.45 percent while December has seen 12.20 percent of Ether withdrawn from treasuries or a total of 423,816 ETH so far.

November was also a month of a massive selloff as over 290,000 ETH were liquidated, led by Tezos’ 82K ETH drawdown.

Sold at Year-Low

Almost half of the total withdrawn amount of ETH in December can be attributed to one single project – Filecoin. It sold off all of its holdings of 216,906 ETH.

Another project which liquidated almost all of its ETH holdings was Substratum, withdrawing 8,931 ETH in December.

Kyber, on the other hand, withdrew 66,454 ETH and is currently left with a little over 3,000 ETH in the treasury. The reasons for the selloff are undisclosed.

Looking at ETH’s 00 yearly price chart, however, shows that the third quarter has been particularly unforgiving for the cryptocurrency. In December, it fell down to as little as $83, which is almost 95 percent down from its all-time high values at the beginning of the year.

What do you think of Ethereum’s peaking treasury withdrawals? Don’t hesitate to let us know in the comments below!


Images courtesy of Shutterstock

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Source: Blockchain

Looking to 2019: What Will Bring About The Next Crypto Bull?

new year 2019 bitcoin icos crypto bull

2018 is nearly finished and investors are cautiously optimistic about crypto’s prospects in 2019. While it’s great to think positive, what will it really take to turn the market around in 2019?


2018 was a Nightmare

As the end of 2018 approaches, there will be a steady barrage of articles writing 2018 off as a fluke correction year for crypto. Readers can also expect to be bombarded with proclamations that all cryptocurrencies have bottomed and 2019 will bring a bull run the likes of which the world has never seen.

With that said, 2018 was a rough year and the crypto-bear definitely roamed free and caused an unforeseeable amount of havoc. All criticism aside, 2019 should be a better year than 2018. Honestly, how could it get any worse?

Let’s take a look at what factors and new developments could help the crypto-market turn around next year.

Liquidity, Demand and Volume

Diminishing volume has been a recurring theme all throughout 2018 and a quick glance at a chart for Bitcoin or nearly any other cryptocurrency shows that repeated fake out rallies, dead cat bounces, bull traps and a continuous pattern of lower highs were clear signals that the market would continue trending down but hindsight is 20/20 isn’t it?

Evaporating demand for cryptocurrencies translated to free falling prices and sharp corrections that repeatedly pulled the market below crucial supports.

The launch of Bakkt’s Bitcoin futures exchange could assist with the demand, liquidity and volume of Bitcoin and there are rumors that the platform operators are considering adding other digital-assets.

As has been discussed throughout the year, institutional grade investment platforms provide an on digital assets ramp for hedge funds, institutional investors, family offices and other larger firms to access the crypto-market in a secure, regulated manner.

To ETF or Not to EFT?

Every month of 2018 was spent pondering whether or not the U.S. Securities and Exchange Commission (SEC) would approve a Bitcoin-based exchange-traded fund. For a time, it seemed that the entire lifeforce and future success of the crypto-market was reliant on the result of this decision and with each postponement and hint of denial the market steadily stepped down another leg.

At this point, it’s safe to say that most retail investors just want to scream out “Just get it over with already.” In other words, either deny or approve the damn thing so the market can react, accept and move on. Obviously, in the event of an approval, demand permitting, the market could experience an uptick in liquidity, demand, and volume.

Even if 2017’s bull rally was the product of a manipulative fluke, it is clear that main street investors appetite for creating a quick buck fueled a parabolic rally that will be the talk of ages.

While cognition is one of the key features that separates man from beast, a good rally and the chance to turn a quick profit is too hard for many a man to resist and if demand and investment from financial giants generate a trend change in the crypto-market, mainstream investors are bound to pile in.  

Whether it be parabolic frenzy or purchasing and advertisements from brokers and institutions, higher volume is required.

A New Year of Bullish Bets on CME & CBOE Futures

With Bitcoin shorted to nearly $3,000, Morgan Creek Digital’s Anthony Pompliano and other analysts are still suggesting the digital asset has further to fall. A possible silver lining to the whole situation is with the turn of a new year and Bitcoin price 00 so low, perhaps BTC bets on the CME and CBOE futures will turn bullish.

Analysts have correlated Bitcoin’s precipitous decline with the debut of Bitcoin futures and it seems that their approval and roll out came too late into Bitcoin’s 2017 rally to provide any benefit.

Hopefully, 2019 will reverse this trend as at some point if this trend does not reverse, there’s nowhere to go but up.

At the moment, SEC commissioner Hester Peirce, who many crypto-investors look to as a friend of crypto and affectionately refer to as Crypto-Mom pledges that she will continue to fight for crypto but also cautions, “Don’t hold your breath.

I do caution people to not live or die on when a crypto or Bitcoin ETF gets approved. You all know that I am working on trying to convince my colleagues to have a bit more of an open mind when it comes to [crypto].

– Hester Peirce

The SEC Sets a Deadline to File Comments for or Against Bitcoin ETF Applications

Meanwhile, SEC Chairman Jay Clayton resolutely stands by his previous statement that a crypto-ETF is a no until manipulation no longer poses a threat. Clayton has repeatedly said,

I want to see better market surveillance and custody for digital currencies before being comfortable with a crypto ETF.

– Jay Clayton

One thing to look forward to in 2019 is the growth of genuine use cases as the market grows more dynamic and diversified. Investors would do well to redirect their focus from the oft disappointing discussion of Bitcoin ETFs and bull markets to growth opportunities within the expanding sections of the crypto market

Genuine Use Cases

2019 should see an expansion of the crypto payments sector and announcements like last week’s news about a partnership between hardware wallet manufacturer Ledger and payment startup Crypto.com are a preview of what’s to come. The sector requires more services that allow cryptocurrency holders to transact in crypto without having to first spend fiat or exit crypto to make fiat payments.

More brokers offering crypto-to-crypto payment services are needed and a growing number of companies are beginning to enter this space. Crypto holders want to spend their funds and an increasing number of businesses are looking to accept crypto.

In fact, a 2017 study from Visual Capitalist report found that the number of brick-and-mortar shops accepting cryptocurrencies grew by 30.3% and this is representative of nearly 11,300 retailers worldwide.

Even more encouraging is the forecast of the e-commerce and payments sector experiencing exponential growth by 2021. Revenue from E-commerce and mobile payment processors are predicted to rise from $528.2 billion to $885.4 billion.

2018 also saw the gradual development of new sectors in the crypto-hemisphere. In 2016 and 2017 investors earned a return on their investments through block rewards for mining and staking coins to support various networks.

As the ICO market withered in 2018, the profits from mining, masternode operation, and staking became less lucrative for many but new options for earning a return on crypto-holdings emerged.

Crypto-banking, crypto-lending, and crypto-to-crypto payments are all genius concepts that draw from the conventional business models of traditional finance but drop some of the challenges that come with traditional banking.

Stablecoins to the Rescue?

While still approached somewhat warily by investors, stablecoins offer a convenient, safe and at times lucrative (due to arbitrage) place to rest one’s funds as Bitcoin and altcoins whipsaw back and forth.

A number of stablecoins came on the market in 2018 and a currently giving Tether (USDT) a real run for the money. They might function as the saving grace to the cryptomarket as provide a regulated, stable, on-ramp for banks and businesses looking to dabble in crypto.

Also, with the ICO market in shambles, stablecoins and security token offerings could be the next assets that underpin an evolving fundraising model that traditional, blockchain and crypto-based startups need to acquire capital in 2019.

New ventures like the partnership between crypto-lender Nexo and stablecoin TrueUSD are likely to provide profitable alternatives to investors as holders can earn a return steady return on their digital assets and also acquire crypto-to-fiat loans on their crypto holdings.

Other crypto banking providers and payments companies like Nexo, FOTON Bank and Revolut are already making it easier for crypto-holders looking to acquire capital or make crypto payments quickly. The use of smart contracts and platform-specific native tokens are meant to bypass taxable conversions (crypto to fiat, crypto to crypto) and also remove the double transaction fees that those attempting to convert and spend crypto frequently encounter on exchanges.  

With forecast of a ‘revolutionary force’ in 2019, investors should keep a close eye on this corner of the crypto-sector to see what other services stablecoins could provide.

In 2019, it’s going to take more than pure speculation for traders to turn a profit and each investor will have to work a little bit harder and familiarize oneself with a maturing crypto-market.

Trading wise, investors will need to stay abreast of new developments and exploit the little opportunities in order to average a respectable profit. At this point, nobody is sure what the market holds for 2019 and it’s yet to be determined if a bottom has been found yet.

In order for the oft-mentioned ‘mass adoption’ that investors and analysts speak of to occur there needs to be genuine, convenient use cases for cryptocurrency other than just investing and spending.

What do you think it will take to turn the crypto-market around in 2019? Share your thoughts in the comments below.


Images courtesy of Shutterstock

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Source: Blockchain

Perfect Storm: Bitcoin Didn’t Exist in the Last Financial Crisis

perfect storm financial crisis bitcoin

Bitcoin has been quietly preparing for over a decade for the next market storm as a non-political alternative to the money printing pyramid.


Bitcoin Separates Money and State

Bitcoin was forged by the last great financial crisis of 2008 and designed to thrive in financial turmoil.

“Bitcoin adoption has always been driven by bank failures, bailouts, bail-ins, and political unrest,” said Max Keiser in an interview with Bitcoinist earlier this month.

It’s certainly no coincidence that Satoshi Nakamoto left a message in the first ever mined Bitcoin block —known as the genesis block. It famously contains the dated title of an FT article:

The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.

The anonymous creator hints that Bitcoin is a non-political alternative to the existing financial system. The Bitcoin whitepaper could, in fact, be interpreted by some as a declaration of the separation of money and state. 

Bitcoin was an inevitability  a solution to downfalls of the trust-based monetary system — in which central banks and governments have historically abused that trust at the expense of the public.

For almost fifty years now, the de facto global currency has essentially been running on ‘full faith and credit’ only. The problem is that when this faith is tested by the markets (i.e. reality), credit-fuelled bubbles are exposed. When they go pop, liquidity dries up and cash once again becomes king.

Bitcoin: Trust Buster

So it’s no surprise that cash injections — euphemistically known as QE (Quantative Easing) — have become the preferred drug prescribed by central banks to fuel the longest bull market in history. 

At the same time, the demand for the US dollar hasn’t waned but actually risen. This phenomenon may have impacted the price of bitcoin 00 this year, according to Keiser.

“The problem Bitcoin has had recently is its competitor, the US Dollar, has been rising,” he explains.

When the dollar rolls over and starts dropping, Bitcoin will hit new ATH.

Meanwhile, critics say it’s too volatile to be a safe haven alternative. Its price has admittedly dropped by 85 percent from its all-time high in 2017. But proponents, like Max Keiser and many others, argue that short-term price fluctuations do not matter if the legacy fiat monetary system is inherently flawed.

They also note that savvy investors are realizing the long-term value proposition of holding the world’s most politically-neutral, hard form of money.

Simply put, trusting no one pays off for those who wait.

Bitcoin Transfers Value From the Sodler to the Hodler

Saifedean Ammous, economist and author of the Bitcoin Standard, states that Bitcoin’s attributes, particularly immutability and neutrality, make it attractive to investors with a long-time preference.

saifedean

Saifedean Ammous

He explained:

Bitcoin has already gone through 9 years of growth out in the wilds of the internet, mostly without a central planner in charge of it after its creator disappeared. It grew because it offered utility to enough users and developers to keep maintaining it.

It has weathered attacks and hacks and ‘community conflict’ and plenty of powerful interests and questionable characters trying to bend it to their will. After all of this, Bitcoin can indeed claim to be immutable. Once it became clear Bitcoin was successful at doing this, then anyone who was interested in an immutable digital hard money could use it.”

Coinbase President Asiff Hirji, whose San Francisco-based exchange launched a custodial platform for institutional investors earlier this year, also sees Bitcoin and cryptocurrencies rewarding the patient in the future.

According to Hirji, none of Coinbase’s investors speculated on BTC price when they valued the exchange at $8 billion earlier this year. They weren’t betting on what the price will be “today, tomorrow or even a year from now,” he said 

“If that’s your time horizon, as an institutional investor, you shouldn’t be touching this,” adds Hirji.

Fragile Fiat

From a security standpoint, centralized money systems are also honeypots. Centralized infrastructure is prone to hacks and shut down compared to a much more robust decentralized network like Bitcoin, which has been operating 24/7 with 99.8 percent uptime.

What’s more, third-parties aren’t just security holes. They are also structurally political. A duopoly such as Visa and Mastercard, for example, can (and do) restrict access for their own reasons, and even have the power to push other companies to toe the line.

bakkt earnings season Wall Street's Old Guard Has A Double Standard When It Comes To Bitcoin

The next global financial crisis is baked into the fiat cake. It’s a matter of not if, but when.

Will Bitcoin be ready? Only time will tell. But with warning signs already surfacing such as global social unrest and the markets tanking, the test may come sooner rather than later. 

Do you consider Bitcoin the perfect long-term investment? Share your thoughts below! 


Images courtesy of Bitcoinist archives, Shutterstock

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Source: Blockchain

The Best Bitcoin Articles *Not* On Bitcoinist In 2018

Here at Bitcoinist we try to present you with the most comprehensive selection of relevant news stories in the crypto-verse. But sometimes great articles appear that don’t quite fit into our news cycle. So here is a small selection of some of the best pieces *not* on Bitcoinist this year, as suggested on Twitter.


1. Planting Bitcoin

Who doesn’t love a good origin story? But if you have superhero fatigue from all the Marvel movies, check out Dan Held’s origin story of Bitcoin. In it he draws parallels between the birth of Bitcoin and planting a tree.

It’s a fantastic read and becomes available as a short-story e-book in early 2019.

2. How Bitcoin Functions As Property Law

An explanation of Bitcoin as analogous to real-estate contracts, written by a law professor, may not sound particularly accessible. But this paper by Eric D. Chason gives a great insight into the workings of Bitcoin.

He describes transactions as ‘deeds’ we must verify, and explains time-stamping with the example of Satoshi Nakamoto updating his will.

3. and 4. The Workings Of Proof-of-Work

Bitcoin, Chance and Randomness

Hugo Nguyen’s article explores the importance of randomness to Bitcoin and its role as the ‘Proof’ in Proof-of-Work

Proof-of-Work Is A Decentralised Clock

Gregory Trubetskoy’s blog post explains how the blockchain utilizes PoW, simply as a distributed decentralized clock. Gregory describes the other functions of Proof-of-Work as essentially red herrings and poses the suggestion that a better name might be Proof-of-Time.

Timeless

5. Invalid Blocks Need Not Apply

This HackerNoon article by StopAndDecrypt should help us to all sleep easier in our beds at night. In looking at security, it explains why Bitcoin is an “impenetrable fortress of validation.”

6. Unpacking Bitcoin’s Social Contract

Hasu’s article explains how social contracts work with regards to fiat money, and how Satoshi Nakamoto used technology to implement this in a new improved way.

7. The Three Economic Eras Of Bitcoin

Okay, while not technically published this year, you may have missed this article from December 2017. Rusty Russell examines the past, present, and future of Bitcoin, as laid out in its mathematics and consensus rules.

The ghost of Bitcoin-past, with its negligible fees, noble aims, and a dearth of respectable uses, may now seem like a fairy tale. Christmas-future, when Bitcoin economics are dominated by fees, rather than block rewards, is still about ten years away.

But when it comes to Christmas-presents, you can still stuff my stocking with bitcoin, thank you very much.

What other articles would you recommend? Share them below!


Images courtesy of Shutterstock

The post The Best Bitcoin Articles *Not* On Bitcoinist In 2018 appeared first on Bitcoinist.com.

Source: Blockchain

Japan’s Internet Giant GMO Quits Mining Hardware Bussiness

GMO Internet mining quit

GMO
Internet says it will no longer develop, manufacture, and sell Bitcoin
mining hardware following significant losses incurred in Q4 2018. The
Japanese IT company will instead focus on its in-house mining activities
following a comprehensive revenue review.


GMO Internet Downsizing Bitcoin Mining Operations

In a statement Dec. 25, 2018, the IT behemoth announced the shuttering of its cryptocurrency mining hardware business. The decision follows the enormous losses suffered by GMO Internet in Q4 2018 as BTC 00 hit the lowest price in over a year.

After taking into consideration changes in the current business environment, [GMO] expects that it is difficult to recover the carrying amounts of the in-house-mining-related business assets, and therefore, it has been decided to record an extraordinary loss.

Data from the company’s statement show consolidated and non-consolidated losses for Q4 2018 at ¥ 35.5 billion ($321 million) and ¥ 38 billion ($344 million), respectively.

However, despite shuttering its mining hardware sales department, GMO, which generated a total of ¥154 billion ($1.3 billion USD) in revenue in 2017, expects to continue its in-house mining operations.

Presently, the company admits that a decrease in the profitability of its in-house mining venture. This trend is mostly tied to the falling cryptocurrency prices throughout 2018.

GMO began developing, manufacturing, and selling mining hardware in September of 2017. Back in August, GMO shut down its Bitcoin Cash mining activities to focus solely on mining bitcoin.

Bitcoin Mining Firms Feel the Pinch

For most of the year, as prices fell, Bitcoin hash rate still continued to increase. This translated to increased operational costs for reduced rewards. It was thus only a matter of time before miners began to feel the pinch.

After the mid-November price crash that took BTC down to $3,200, as many as 800,000 (unprofitable) miners reportedly pulled out. However, the Bitcoin mining difficulty has adjusted a since, stabilizing the falling hash rate.

However, cryptocurrencies market woes may not be the core reason for GMO pulling out. According to BitMex Research, the company may not have been competitive to begin with and was thus unable to cope with falling prices.

Recently, Bitcoinist reported on massive downsizing going on at Bitmain. The mining behemoth closed down operations in Israel as well as its entire Bitcoin Cash development team.

Recent reports surfacing online even suggest that the staff layoffs might be as high as 85 percent of the company’s workforce.

Will Bitmain and GMO survive the bear market? Share your thoughts below.


Images courtesy of GMO and Twitter (@Excellion).

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Source: Blockchain

Vitalik Buterin: Bitcoin is ‘Genuinely Cool Tech,’ Bitcoin SV Is ‘Pure Dumpster Fire’

dumpster fire

Bitcoin Cash ‘Satoshi’s Vision’ (BSV), the new hard fork of Bitcoin Cash (BCH), is a “pure dumpster fire,” Ethereum co-founder Vitalik Buterin has said.


Cool Vs. Dumpster Hot Air

In a Twitter discussion with cryptocurrency commentator and entrepreneur Tuur Demeester December 25, Buterin debated the pros and cons of two algorithms used by many cryptocurrencies: Proof-of-Work (PoW) and Proof-of-Stake (PoS).

As part of its long-term upgrade schedule, Ethereum plans to transfer from PoW to PoS, with Buterin saying he “doesn’t believe” in the former.

Vitalik Buterin

BSV, which plans to use giant block sizes to solve scaling difficulties ‘on chain,’ has faced technical and publicity hurdles since it came into being on November 15.

The altcoin unwittingly became collateral damage from the debate after an advocate requested Buterin’s opinion on it.

The user had claimed the scaling plans from Bitcoin (BTC) developers – specifically ‘off-chain’ scaling via the Lightning Network, was a “joke.”

Buterin slickly disagreed.

“I have my disagreements with the bitcoin roadmap, PoW, etc but they’re trying to do something that’s genuinely cool tech,” he responded.

“BSV is a pure dumpster fire.”

Traders Stay Warm This Christmas

In a curious move, the BSV proponent did not criticize Buterin for his negative perspective, something which has become commonplace among the coin’s better-known activists.

Craig Wright, the self-proclaimed ‘Satoshi Nakamoto,’ has continued to earn a notorious reputation for his lack of tolerance of BSV 00 naysayers.

As Bitcoinist reported, an apparent spat with BCH advocate Roger Ver prior to the hard fork saw Wright pen an email calling Ver his “enemy.”

“Have a nice life. You will now discover me when pissed off,” he wrote.

BCH, BSV and ETH have meanwhile all staged something of an unlikely recovery over the past week. BCH had led the rally, more than doubling in value to hit more than $200 before correcting nearer to $170. ETH managed $160 from a low of $73.

Do you agree with Vitalik Buterin’s comments? Let us know in the comments below!


Images courtesy of Shutterstock, Bitcoinist archives

The post Vitalik Buterin: Bitcoin is ‘Genuinely Cool Tech,’ Bitcoin SV Is ‘Pure Dumpster Fire’ appeared first on Bitcoinist.com.

Source: Blockchain

Coinbase President Says Institutions With Short-Term View Shouldn’t Touch Crypto

It hasn’t been the best of Christmases for the stock markets and let’s face it, Santa hasn’t exactly gone overboard when it comes to crypto. However, according to a CNBC Fast Money interview with Coinbase President Asiff Hirji, it hasn’t been all bad.


A Year of Innovation

When asked what happened to crypto in 2018 after such promise and expectation this time last year, Hirji reminded CNBC that Coinbase warned investors to be cautious.

In fact, in 2017, just when Bitcoin fans were starting to think all their Christmases had come at once, the world’s most regulated exchange dealt a cold blast of reality harsher than a Russian winter reinforcing that prices may be overinflated.

However, he went on to say that there had never been more innovation or institutional buy-in of crypto as there was in 2018, despite the fact that trading volumes were down. 

Not for the Faint Hearted

When asked about the BTC price 00 impact and its effect on his business, Hirji began to dance around the issue like any good president saying that years ago, Bitcoin was the only thing that mattered. Then along came Ethereum, and now there are around 3,000 to 4,000 cryptocurrencies out there but that:

There are probably 200 or so that matter.

Despite dealing a harsh hand to the flailing 2,800 cryptos or so that don’t make the grade, he said:

You should assume that (Coinbase) will over the course of time add all the cryptocurrencies that matter in as many geographies as we are allowed to add them.

He affirmed that he was full of expectations for the year ahead and that this was the start of the next great wave in crypto.

What Happened in 2018?

When asked why 2018 failed to deliver the institutional investor boost that everyone hoped would happen, Himji responded that buy-in was at an all-time high:

We’ve had hundreds of institutions onboard onto our custodian platform.

San Francisco

He added that they needed a valid venue to trade on and a qualified custodian to store with, as well as liquidity, and that Coinbase has the most compliant and regulated solution out there. 

Despite the dreadful year of 2018 for retail investors, 2019 would continue to be a good year for institutions going into crypto, he argued.

The Coinbase IPO?

When quizzed about a possible IPO for Coinbase and how its valuation must be affected by the lower prices, he recalled when the company was valued at $8 billion earlier this year, reinforcing that none of the investors were then betting on the price of the asset “today, tomorrow or even a year from now.”

“If that’s your time horizon, as an institutional investor, you shouldn’t be touching this [cryptocurrencies].

But, if you have a long-term constructive view of where crypto is going, we’re [Coinbase is] the best-leveraged bet on crypto that you can find.

Himji did admit, however, that the company’s revenue was directly tied to trading volume and that trading volume was way down, concluding:

We have a long way to go before we do an IPO.

What do you think about the Coinbase president’s comments on investing in crypto? Share your thoughts below!


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Source: Blockchain