Bitcoin surges above $1,500 to record as more investors bet on 'digital gold'

• Bitcoin rose more than 4 percent to hit a record price of $1,553.18, according to CoinDesk.
• Gold futures traded more than 1 percent lower to near $1,232 an ounce and haven't been above $1,500 for about four years.
• Speculation of a bitcoin ETF in the U.S. and increased interest from Japanese investors also supported bitcoin prices.
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• Bitcoin on the rise  

Alan Zibluk – Markethive Founding Member

  

Bitcoin sailed past the $1,500 mark on Thursday,

pushing the total value of the digital-currency market above $40 billion for the first time. Litecoin, another prominent bitcoin rival, advanced 22% to $25, its highest level in more than three years, after Coinbase, one of the most popular digital-currency exchanges in the U.S., enabled trading in the cryptocurrency. The top 14 most heavily traded digital currencies have all realized astounding gains over the past month as investors who have booked large profits trading bitcoin and rival Ethereum have sought to diversify and increase their chances of cashing in on the next big cryptocurrency rally, according to Chris Dannen, founder of Iterative Instinct a New York-based cryptocurrency venture fund.

“Not only are the smaller coins obscure and cheap, but they represent a chance to get those huge returns all over again,” Dannen said. The price of a single bitcoin BTCUSD, +2.25%  has more than tripled since the beginning of 2016, when it traded around $450. It peaked at $1,589 on Thursday, according to the CoinDesk bitcoin price index. One ether token traded at $90.95. Dash, the fifth most popular token, traded at $96. Bitcoin’s advance has coincided with its growing acceptance by regulators. A law passed by Japanese lawmakers earlier this year that allows financial institutions to participate in the digital-currency market took effect in April.

Also, regulators in Russia and India have signaled their willingness to legalize bitcoin and its peers. However, bitcoin trading volume in China, once its largest market, plunged after authorities forced the largest exchanges in the country to institute transaction fees and halt withdrawals until they could upgrade their anti-money-laundering systems. New rules require exchanges based in China to verify customers’ identities. In March, the Securities and Exchange Commission rejected two proposals that would have led to the creation of bitcoin-focused exchange-traded funds. But the decision elicited only a brief dip in the bitcoin price.

The SEC has since said it would review its March 10 decision that effectively killed the Winklevoss Bitcoin Trust. Grayscale’s proposal to allow its Grayscale Bitcoin Investment Trust to begin trading on the New York Stock Exchange’s ETF platform is currently being reviewed, but a decision isn’t imminent. The value of cryptocurrencies, however, have varied dramatically between exchanges, prompting Charles Hayter, the chief executive officer and founder of Cryptocompare, to worry about a possible pullback.

On Bitfinex, one of the largest digital currency exchanges in the world, customers paid a $100 premium as they scrambled to move their assets off its platform. The exchange announced two weeks ago that it would temporarily suspend dollar withdrawals after it was effectively cut off from the financial system. “Cryptos have hit a period of volatility as the markets have become dislocated. Prices on exchanges are showing huge discrepancies in terms of pricing and arbitrage is rife,” Hayter said.

Bitcoin’s advance has coincided with its growing acceptance by regulators. A law passed by Japanese lawmakers earlier this year that allows financial institutions to participate in the digital-currency market took effect in April.Also, regulators in Russia and India have signaled their willingness to legalize bitcoin and its peers.However, bitcoin trading volume in China, once its largest market, plunged after authorities forced the largest exchanges in the country to institute transaction fees and halt withdrawals until they could upgrade their anti-money-laundering systems. New rules require exchanges based in China to verify customers’ identities.

In March, the Securities and Exchange Commission rejected two proposals that would have led to the creation of bitcoin-focused exchange-traded funds. But the decision elicited only a brief dip in the bitcoin price. The SEC has since said it would review its March 10 decision that effectively killed the Winklevoss Bitcoin Trust. Grayscale’s proposal to allow its Grayscale Bitcoin Investment Trust to begin trading on the New York Stock Exchange’s ETF platform is currently being reviewed, but a decision isn’t imminent.

The value of cryptocurrencies, however, have varied dramatically between exchanges, prompting Charles Hayter, the chief executive officer and founder of Cryptocompare, to worry about a possible pullback. On Bitfinex, one of the largest digital currency exchanges in the world, customers paid a $100 premium as they scrambled to move their assets off its platform. The exchange announced two weeks ago that it would temporarily suspend dollar withdrawals after it was effectively cut off from the financial system. “Cryptos have hit a period of volatility as the markets have become dislocated. Prices on exchanges are showing huge discrepancies in terms of pricing and arbitrage is rife,” Hayter said.

Chuck Reynolds
Contributor

Alan Zibluk – Markethive Founding Member

Gold and Silver vs Bitcoin and Litecoin

  

A lot of financial experts tend to think of Bitcoin and Litecoin

as the digital counterparts of gold and silver. All four assets have seen significant value changes over the past few years. One thing that stands out right now is how Bitcoin is worth more than 1 Oz of gold, and Litecoin is worth more than 1 Oz of silver. Perhaps there is some truth to this comparison after all.

Gold and Silver

It is evident these two precious metals have always had a bit of an interesting relationship. Silver has always been considered to be the “little brother” of gold, which also explains why it has a much lower value. However, silver is still a precious metal, and only second in most people’s minds to gold. From a collector’s and an investor’s point of view, diversifying precious metal holdings into both gold and silver has been a popular decision over the past few years. The value of silver has gone through some interesting highs and lows over the past few years as well. Right now, one Oz of silver is valued at US$16.59, whereas it hit over US$40 in late 2011.

One of the downsides of precious metals is how they seem to only gain value during times of financial distress. The same can be said about gold, as it is a somewhat volatile asset these days. Right now, one Oz of gold is worth US$1,237.92, compared to over US$1,700 at the end of 2011. Despite these declines, both gold and silver are still popular assets, even though they may not necessarily generate a lot of profit.

Bitcoin and Litecoin

Although comparing gold and silver to Bitcoin and Litecoin is the same as comparing sea shells to diamonds, there are some interesting correlations. Litecoin is the “little brother” to Bitcoin and is highly regarded among cryptocurrency enthusiasts. In this regard, the value of Litecoin often represents a fraction of Bitcoin’s, similar to how gold and silver relate to one another.

Looking at the current prices, it is not hard to see why this comparison still holds up. Bitcoin is valued at US$1,550 right now, whereas Litecoin has surpassed the US$20 mark at the time of writing. In this regard, both popular cryptocurrencies have successfully surpassed the value of gold and silver when measuring both in ounces. An interesting development, that much is evident. In the end, comparing Bitcoin and Litecoin to gold and silver is somewhat understandable, albeit it is not the best metric by any means. It is true Bitcoin is still the “king of crypto” whereas Litecoin is its loyal right-hand man. However, they are not the only contenders right now, Comparisons like these only carry so much weight, yet it provides an interesting way to look at popular cryptocurrencies.

Chuck Reynolds
Contributor

Alan Zibluk – Markethive Founding Member

What is the Bitcoin Dominance Index?

  

There are quite a few intriguing metrics to determine the position of Bitcoin in the financial market. However, there is also such a thing called the Bitcoin Dominance Index. This “index” measures the market cap of Bitcoin compared to the overall market cap of all cryptocurrencies in existence. It is an interesting factor to look at, although it doesn’t necessarily tell the whole story either.

Most people are well aware of how Bitcoin has always been looked at as the dominant cryptocurrency. Over the past few years, the market cap of Bitcoin was by far the largest compared to all altcoins. That situation slowly came to change thanks to the introduction of Ethereum, Dash, Monero, and other coins gaining some major traction. Ever since that time, things have started to change for the Bitcoin Dominance Index. Even though the popular cryptocurrency is still dominating the overall market, its undisputed position has taken a few bumps along the road. In fact, Bitcoin’s dominance has dipped to 59.7% over the past six months, which is an all-time low. This is good news for people who hold diversified portfolios, though, that much is certain.

To put this into perspective, Bitcoin still generates most of the trading volume in the fiat currency market. Moreover, altcoins mainly get their trading volume from the Bitcoin trading pair as well. Without Bitcoin, there would be very little to no trading volume for a lot of altcoins, even those which have started to gain mainstream traction as of late. This puts the Bitcoin Dominance Index in a rather awkward spotlight. Bitcoin is only responsible for 59.7% of the total cryptocurrency market cap. However, most of these altcoins still derive their value based on how they are valued against bitcoin. This is also what creates most of the altcoin volatility as of right now, as a bullish Bitcoin trend will send the altcoin/BTC trading value on a wild swing. Most altcoins have proven to be somewhat resilient in this regard, though.

Moreover, the Bitcoin Dominance Index is not necessarily the best reference when it comes to gauging Bitcoin and altcoin values. Some of the listings on the platform are subject to significant discussion. Forked coins, currencies with a massive premine or instamine, or relaunched projects are all counted as part of the overall cryptocurrency market cap. While these coins have some form of value to the right people, it goes to show there are quite a few factors capable of skewing the numbers. In the end, the Bitcoin Dominance Index provides some interesting metrics, yet it is only a snapshot of how things are evolving. Bitcoin’s dominance is certainly waning, though, which nobody can deny right now. Diversification remains a critical part of being successful in the cryptocurrency industry, that much is evident.

Chuck Reynolds
Contributor

Alan Zibluk – Markethive Founding Member

   Blockchain is an exciting technology,

but for it to go mainstream governments must be able to regulate it.The headlong pace of technological change produces giant leaps forward in knowledge, innovation, new possibilities and, almost inevitably, legal problems. That’s now the case with blockchain, today’s buzziest new tech tool. Introduced in 2008 as the technology underpinning Bitcoin, a digital currency that is created and held electronically without any central authority, blockchain is a secure digital ledger for any kind of data. It simplifies record keeping and reduces transaction costs.Its range of applications in commerce, finance and potentially politics continues to widen, and that has triggered a debate around how to regulate the tool.

Alan Zibluk – Markethive Founding Member

Project Manifest, is gaining traction with potential partners,

 the effort to track everything from auto parts to medical devices remains tightly held under non-disclosure agreements. Still, that isn't stopping those involved from dropping hints about the group's progress. Soon after providing a sneak peek at the technology last week, Dan Doles, CEO of supply chain tech firm Mojix, revealed plans for an upcoming test, describing a more academic project being spearheaded by another Project Manifest member, Auburn University. In total, Doles said a group of more than a dozen companies is now working on the project in the laboratory.

He told CoinDesk:

"We're working with the lab down there, they've lined up seven retailers and six brand owners to participate in this."

Revealed exclusively to CoinDesk in January of this year, Project Manifest debuted just a week after Microsoft and Mojix confirmed the participation of two professors and 10 students in the project. Further, while details of Project Manifest’s work with Auburn University's renowned RFID Lab are not being disclosed, lab director Justin Patton told CoinDesk that a white paper is currently being developed and that the names of additional participants are likely to be revealed upon completion.

To give an idea of the scope of the work being undertaken by Auburn University's lab, sponsors include Mojix, along with Amazon, FedEx, Target, Home Depot and more. By making improvements to traditional radio frequency identification (RFID) technology, and combining it with the electronic data interchange (EDI) transaction standard, the group has already been able to make improvements to the traceability of supply chains using existing centralized databases, Doles explained. However, Mojix and the rest of Project Manifest are now working to turn a distributed ledger into the "connective tissue" that gives complicated cross-industry supply chains real-time accuracy, according to the CEO.

"We're automating the writing, shipping and receiving of transactions in smart contracts on the blockchain," said Doles, adding:

"What I suspect is, it will bring to surface all of these issues of applying blockchain to enterprise."

Increasingly this year, the global supply chain has come in the sights of blockchain disruptors. With the strong correlation that exists between efficient supply chain management, increased revenue and profit, a number of companies have entered the space.

Enterprise embrace

In April, US software firm SAP Ariba partnered with blockchain supply chain startup Everledger and shortly thereafter IBM joined up with Chinese supply chain management firm Hejia for its own blockchain trial. Another recent trend is that 'blockchain supply chain' also means moving trade finance to a blockchain, with Taiwanese manufacturing giant Foxconn spinning off a related startup with P2P lender Dianrong, and Chinese lender CreditEase launching its own blockchain service.

As industry leaders continue to push the technology, Mojix, too, has plans: namely, to deal with the issues of incorporating blockchain benefits into existing enterprise applications. "The next step is we're going to take two to three retailers and set up automated verification, RFID readers, so we can track either shipments or receipts," said Doles, as he used one of his company’s readers to scan a box of shirts from several feet away.

Testing the theory

If all goes as planned, decentralizing the supply chain could have trickle down effects to smaller contractors, according to Microsoft's global business strategist in charge of blockchain. Rhodes believes that the results of improving multi-party work flows include improved cash flow and stronger margins. "Ultimately," said Rhodes, "companies will be able to radically change how they think about supply chain insurance, financing, and letters of credit."

To test that idea the Project Manifest proof-of-concept currently being built is being designed use specially designed 'adapters' that connect RFID scanners directly to the ethereum blockchain. Brand-owners that ship goods, and the retailers that receive them, would then automatically trigger a diverse set of smart contract functions.

Doles concluded:

"If we can solve that problem and create a secure way to verify the perfection of those contracts, then we have a way to expand upward and outward from there."

Chuck Reynolds
Contributor

Alan Zibluk – Markethive Founding Member

  

Attorney Sharon Klein at the law firm Pepper Hamilton, along with Joe Guagliardo,

who chairs the Blockchain Technology Group at the firm, have been looking at blockchain's implications for healthcare for more than a year.Attorney Sharon Klein first started thinking seriously about blockchain's implications for healthcare about 18 months ago. And she's hardly the only one.

Blockchain has been attracting a lot of attention in healthcare, with many technology stakeholders excited about the potential the new data storage paradigm could hold for cybersecurity and interoperability. But while the digital ledger technology has promise, blockchain will struggle to dovetail with the existing realities of privacy law.

"It's the implementation – in this regulatory environment, particularly given everything else that healthcare needs to deal with – that's the question," said Klein, a partner in the health sciences department at law firm Pepper Hamilton and chair of its privacy, security, and data protection practice. "Is this something people are going to want to devote time, energy, money to? It has a lot of good applications. But we have so much to do."

Klein, who will speak at the HIMSS Health Privacy Forum in San Francisco on May 12, serves on the newly reconstituted HHS task force for cyber security. And, according to her, blockchain is on the agenda. "All kinds of data can be stored with blockchain," said Klein. "But from a privacy perspective, it matters whether the data that is stored can be considered protected health information and therefore regulated. And then all of the regulatory drag then is applicable."

For instance, she said, "HIPAA contains a 'patient bill of rights.' So if I, as the patient, want to go see my healthcare records, I just raise my hand and you've got to give them to me. How's that going to work with blockchain?" Or consider the potential implications for updating business associate agreements –  even medium-sized healthcare providers have hundreds of them on file. "It would break my brain to think of how many business associate agreements you'd have to actually execute, and who would execute them," said Klein. "The structure is so inflexible, and very different from any industry's structure when it comes to exchanging of data. That's the hurdle we have to get through."

Blockchain is an exciting emerging technology, to be sure, but it's one that was barely being talked about back when the privacy and security rules under HIPAA and HITECH were drafted, she said. And as it stands today those laws "probably don't meet with the blockchain technology as it is currently constructed." So the question, from a regulatory perspective, should be: Are there easier ways to put blockchain to work in healthcare, even around the margins, that don't need to get tangled up in existing privacy law? "Are there mechanisms, perhaps at the edges, that are not PHI, not as regulated as PHI, that could be utilized in the way that blockchain in healthcare allows?" she said. "You have to start somewhere."

In the near term, Klein said, "the more that private industry self-regulates and has some standard-setting, I think that is going to increase adoption." Klein's colleague Joe Guagliardo, who chairs the Blockchain Technology Group at Pepper Hamilton, agreed. "There's an important point for everyone who's talking about blockchain to understand, whether you're a regulator or a healthcare institution or a technologist," he said. "We're hearing that blockchain is going to revolutionize the way we interact with and store data. But it's not going to happen tomorrow. It may never happen that digital ledger technology is going to replace current infrastructure, because of the regulations.”

Ultimately, it boils down to how important that transformation really is. "What can we do in the healthcare space, what smaller projects can we do, that don't have the regulatory hurdles?,” he said. “And can we take some baby steps that don't require breaking down all the walls? Let's find smaller problems we can solve as a starting point."

Chuck Reynolds
Contributor

Alan Zibluk – Markethive Founding Member

Lockheed Martin bets on Blockchain
For Cyber Security

The world's biggest defense contractor looks to the same tech that powers Bitcoin for cyber security.

  

US defense contractor to adopt blockchain

Lockheed Martin has contracted Guardtime Federal to provide blockchain cyber security, the defense company announced in a blog post.It's the first US defense contractor to adopt blockchain as part of its security approach and Lockheed Martin says the partnership will allow it to "realize more efficient and secure software development and supply chain risk management."A blockchain is a type of secure database that maintains a constantly expanding list of records. Each record, or block, contains a link to a previous block. This makes them inherently resistant to modification by outside sources.

"These new cyber security approaches will enhance data integrity, speed problem discovery a, d mitigation," said Ron Bessire, Lockheed Martin's Engineering and Technology vice president. "The faster our developers can discover issues, the faster we can deliver." Lockheed Martin is a security and aerospace company, and the world's largest defense contractor. The majority of its revenue comes from US military contracts. Guardtime Federal is likewise the world's biggest in its own field, blockchain cybersecurity.

For more on blockchain and how it was used to implement the digital currency bitcoin, check out this explainer on ZDNet. CNET Magazine: Check out a sampling of the stories you'll find in CNET's newsstand edition. Life, Disrupted: In Europe, millions of refugees are still searching for a safe place to settle. Tech should be part of the solution. But is it? CNET investigates.

Chuck Reynolds
Contributor

Alan Zibluk – Markethive Founding Member