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Top 10 Tips For Cryptocurrency Investing, As Bitcoin And Ethereum Surge

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Top 10 Tips For Cryptocurrency Investing, As Bitcoin And Ethereum Surge

Top 10 Tips For Cryptocurrency Investing, As Bitcoin And Ethereum Surge

The price of Bitcoin and Ethereum have exploded in 2017. The question is whether there is sufficient upside potential to consider investing in cryptocurrencies. Stated differently, is it still worth looking into cryptocurrencies as an investment or is it too late?

The key consideration is that Bitcoin is not the only cryptocurrency to invest in. On the other hand, Bitcoin has made cryptocurrencies popular and even more secure. Yes, there were definitely security issues a couple of years ago, but it seems those issues have been resolved. So Bitcoin has helped mature the cryptocurrencies space.

InvestingHaven believes that a combination of price analysis and fundamental analysis is the most appropriate way to make a rational investment choice, and to engage in forecasting the price of cryptocurrencies. With that in mind, we also look into the altcoins space in this article in order to find investment opportunities.

InvestingHaven’s research team has collected 10 investment tips for investing in cryptocurrencies which are useful to investors not very familiar in this space.

Investing in cryptocurrencies: tips, insights and upside potential

1. Cryptocurrencies investments are similar to investing to commodities

Investing in cryptocurrencies is very similar to commodities investing. The fact of the matter is that commodities have two ‘faces’. On the one hand, they are assets that are used in the real world. Base metals, for instance, are used in industry. Softs are used in the food industry. Precious metals are used in the jewelry industry. At the same time, commodities can be invested in, through open market exchanges.

Cryptocurrencies are similar. They are used in financial and insurance applications, but investors can also invest in cryptocurrencies.

From that perspective, it is mandatory to look at usage and added value that cryptocurrencies create in this world when choosing a specific cryptocurrency to invest in.

2. Usage is growing as evidenced by the collective market cap

All cryptocurrencies combined have a market cap of more than $60B meantime. So that includes all cryptocurrencies in existence: Bitcoin, Ethereum, Ripple, Litecoin, and hundreds of smaller and unknown ones.

To put that into perspective, for investors, here are some reference points: Tesla’s market cap is $50B, Boeing Airlines $100B, Coca Cola $180B (rounded figures for April / May 2017).

Note how the volume of real world transactions has gone up together with the market cap which indicates that ‘crypto is for real’.

3. Most people are unaware about cryptocurrencies, an absolute minority uses them
 

If it is important to look at real world usage as a key criterium when considering investing in cryptocurrencies, then there is great news for investors: “you ain’t seen nothing yet”.

According to Statista, who has dedicated a section to cryptocurrencies useful for investing, we see that the number of adults in the U.S. familiar with the most known cryptocurrency (Bitcoin) is only 24 percent. And, by far the most important data point on this graph, the number of Americans that use Bitcoin is 2 percent while the ones thinking of using it in the future is 25 percent.

Investors should get excited when realizing this. Not primarily for Bitcoin, but more so for other cryptocurrencies.

4. Usage is the key criterium for investors

As said in the intro, analyzing fundamental data is the key element in our methodology to identify a decent investment opportunity. So supply and demand data, based on usage in the real world, is what investors should be focused on.

That is also what we used as a method in our Bitcoin Price Forecast For 2017 and our Ethereum Price Forecast For 2017. Note that our Bitcoin forecast got filled meantime, as the price of Bitcoin went over $2000, a forecast we made more two months ago.

As an example, when it comes to Ethereum, we have included the chart which features the number of its transactions, see below. This is proof that Ethereum is being used in the real world.

Top 10 Tips For Cryptocurrency Investing, As Bitcoin And Ethereum Surge

Moreover, the number of Bitcoins in circulation is another proof of cryptocurrency usage, as well as trade volume.

Note also how Ripple, a cryptocurrency which is meant to facilitate payments between financial institutions, and, in doing so, pushes transaction costs down meaningfully, has a great chart highlighting the strong usage of some large accounts along with the long tail of users: Ripple usage statistics.

5. Where are we in the market cycle?

Given the above data points, we consider that we are nowhere near any point close to euphoria according to the traditional market cycle. It is maybe not very useful to consider Bitcoin as an investment opportunity, though prices can go much higher from here. However, there are many other cryptocurrencies which are only now starting to be considered by businesses, governments, and society across the globe.

With that in mind, we believe we are only in the optimism stage in the market cycle.

Note that this market cycle can be considered by individual cryptocurrency as well (we considered all cryptocurrencies combined when we stated that we are in the ‘optimism’ stage). Bitcoin certainly has gone through this cycle, reaching euphoria in January of 2014.

6. Altcoins are similar to the dotcom hype, 80% will not survive the storm

Pareto is one of the few universal principles applicable in all areas of life, including in the investment world.

We see a dotcom type hype arising and, presumably, 80% of cryptocurrencies will not survive the storm. We saw something similar in the dotcom hype. That is simply because, during a hype, users and investors do not focus sufficiently on the real added value that is created.

It is imperative for investors, when choosing cryptocurrencies to invest in, that they acknowledge the added value that is created, from a business and society perspective.

7. A cryptocurrency MUST solve a problem in life

Just buying cryptocurrencies hoping that they will deliver an investment return does not make sense at all. The sweet spot for every investor is the ability to solve a problem: the bigger the problem that gets solved, the higher the potential value.

One of the sweet spots that cryptocurrencies can enable as a problem solver is to provide access to money and basic banking functions like wiring and paying. A fact that is unknown is that a huge amount of people globally do NOT have access to to these traditional banking services. We consider that Stellar Lumens, symbol XLM, is such an enabler. At the moment of writing, Stellar Lumens trades at $0.05. Read on Fortune.com why Stellar has a disruptive potential, especially in the underdeveloped part of the world, and is worth a cryptocurrency investment.

8. Create your investment portfolio with a limited number of cryptocurrencies

As with any other investment, investors should create their own portfolio and work on it actively. Also, they should work on it for the very long term.

Creating a portfolio with some cryptocurrencies is the way to go. Choosing them selectively is imperative. Only invest in things you understand and keep your emotions under control are principles that should always be applied, in every investment portfolio.

9. Crypto to money

Do not forget that your cryptocurrencies can be exchanged for ‘traditional money’. The market is in the process of enabling all exchanges: all traditional currencies will be exchangeable with all cryptocurrencies, sooner rather than later. So the lock-in risk which was present a while back will not be a risk going forward.

Stated differently, your portfolio with cryptocurrencies is just another way to store cash, or exchange crypto for cash (money), over time as market conditions change.

10. Read the right sources

Last but not least, as it goes with every hype, ‘everyone and his uncle’ can become a guru during a hype. Be very sceptical when following people and selecting sources to read. The blogosphere has only a handful of bloggers who are worth following, say maximum 20 percent.

At InvestingHaven, we will do everything we can to offer the best investment insights for high reward / low risk opportunities. You can also follow this upcoming blog which is owned by the same team that runs InvestingHaven: www.BlockchainRevolution.global

This article is brought to you courtesy of Investing Haven.

David Ogden
Entrepreneur

 

Alan Zibluk – Markethive Founding Member

Markethive

As Price Reaches Record Highs, is Bitcoin in a Capacity Crisis? – CryptoCoinsNews

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As Price Reaches Record Highs, is Bitcoin in a Capacity Crisis? – CryptoCoinsNews

As Price Reaches Record Highs, is Bitcoin in a Capacity Crisis? – CryptoCoinsNews

 

Imagine you are slightly late for work, quickly getting a shower, brushing your teeth and all the rest, walking – in an almost running manner – to the tube station, to then find out there are 200,000 people waiting outside to get the train.

What’s more, the train only handles 4,000 individuals and arrives every ten minutes, during which period new individuals arrive at a rate of 4 per second. Now, it’s ok, you’re busy, you can still be one of those 4,000 individuals and get to work if you pay a high enough fee.

So you check out the notice which says the current estimated fee is $1, but since others are seeing the same notice too and paying $1 too, the fee keeps going up every second, with these higher fees paid by the new individuals that come every second, pushing you down the queue.

Tough luck, you can’t make it to work today because your $1 bid is now as good as worthless to the super congested network. The next day you learn the lesson, so instead of bidding what the notice says, you bid 10% or 20% more, but you weren’t the only one who missed work yesterday, almost everyone else did too and they have this genius but obvious idea too, making you miss work again.

The next day you get angry and pay double the fee, but you’re not the only angry one. Now, sure, some in this lottery do get to make it to work, 4,000 every 10 minutes with 200,000 waiting, but a lot don’t, resulting in a bidding war which looks like below:

As can be seen, bitcoin’s fees have gone vertical, which is bad, but if you know you’d get through for x dollars then at least you can evaluate the proposition. Instead, you’re not only paying high fees, but you don’t even know whether you will get the service you paid for because of simple logics.

Let’s take, for example, a statement by Luke Dashjr, a Blockstream “open hash contractor,” who suggested everyone pay a $5 fee and you’ll get through. If we analyze this a bit further, we can start by asking why people are not paying $5 and one good reason is because then everyone would start paying $5 meaning newcomers would outbid them by paying $5.01.

Sure, one or two guys might currently “cheat” and jump the queue by paying $5, but as long as it’s a very tiny minority the rest let it go. If instead, it went to a point where say 1,000 of the 4,000 are paying $5, the other 3,000 will probably quickly start paying $5.01.

This clearly shows ordering transactions by fee is an unworkable idea which is why Satoshi Nakamoto ordered transactions by first seen in the bitcoin clients he/she released, a rule largely enforced by the bitcoin network until full capacity was reached.

The Easy Attack

Still, even the above problems, as bad as they are, might be bearable for desperate bitcoiners, but let’s imagine I’m a wealthy company, say Vusa, or Rapp Labs, or a wealthy guy who just doesn’t like bitcoin.

Just to be very clear, no one is suggesting either of them has behaved in any nefarious way, but say I’m a competitor to bitcoin or recently attracting much hype and attention due to gaining crazy high market cap in just days. You know what I could do with just $2 million?

I could send bitcoin down crashing as far as its sole purpose of moving bitcoins is concerned. That’s because bitcoin’s capacity is limited to around 250,000 transactions, but just to make it simple let’s say it can handle only 200,000 transactions a day.

At $1, it would cost me just $200,000 to take up that space, which is fine, everyone else could pay $1.50. But, at $10 per transaction it would cost me only $2 million to send everyone else at the back of the queue.

Now sure, you can pay $11 or $12, but even at a fee of $20 it would cost just $4 million, as good as nothing considering how much value may flood to the competitors and considering the shock bitcoin would receive if all the sudden everyone is asked to pay $25 per transaction.

There is no evidence to suggest this is happening at scale, but fees went up yesterday from around $1 to around $4 for a normal transaction. It could be ordinary demand, but it could also be someone or some entity which wants to send bitcoin crashing.

They have succeeded as far as bitcoin’s sole purpose of moving bitcoins around is concerned because around 200,000 bitcoins have been stuck for the past 24 hours while fees have gone parabolic pricing everyone out.

Another Obituary?

Bitcoin has only one job – to move data from a to b – and it is failing to do that simple task. A task which is not really rocket science as some claim because everyone and their cat have launched their own bitcoin like network which actually manages to continue performing their one task.

No wonder bitcoin’s market share has now fallen down to around 48%, nearly halved from just a few months ago, but its price has now doubled to more than $2,000 and its market cap keeps going up, so, who knows. Maybe $20 fees and days for one transaction are a good thing?

Or maybe it’s all just because of the recent advertising following allegations Trump’s Press Secretary and an aid to the French President Macron had used bitcoin, combined with the recent ransom global incident.

Or perhaps it’s only because bitcoin is the main gateway to other altcoins, although ethereum has started making inroads on that front due to its own tokens system and clones.

But maybe the market sees value in a limited coin you just buy and lock away in some paper wallet somewhere, forgetting about it, like actual gold and just as difficult as well as expensive to move around.

In which case, “Bitcoin: A Peer-to-Peer Electronic Cash System,” as bitcoin’s white paper describes it, has failed, because the current bitcoin is not a cash system. Cash can be exchanged almost instantly with 0 fee and can be moved around fairly easily without getting stuck for days.

Which might be why the market is giving conflicting signals. On the one hand, it’s falling market share is probably because bitcoin investors and other market participants are looking for the real bitcoin, the cash system, which many think has just changed its name to ethereum while getting some cool new tech like smart contracts.

It may be that these newcomers think bitcoin is still the cash system rather than seemingly having changed into something else, or maybe they like this idea of gold but with very high fees or they’re in markets which have no choice, although even they could easily diversify.

Bitcoin is Dead, Long Live Bitcoin

So, to conclude, bitcoin is definitely in crisis because the real bitcoin as described in the whitepaper does not exist anymore. The real bitcoin uses the first seen rule for transactions, rather than ordering by fee. The real bitcoin never operates at full blocks. The real bitcoin has as good as no fees and confirms almost instantly.

What now is called bitcoin is an aberration, something completely different and planned to become even more different. Far more similar to ripple with its hubs and intermediary banks than to bitcoin.

The real bitcoin, the digital cash, the codable money, the global, inclusive, permissionless network, the innovative powerhouse which has grabbed the world’s imagination, that has changed its name and is now called ethereum.

Disclaimer: The views expressed in the article are solely that of the author and do not represent those of, nor should they be attributed to CCN.

 

David Ogden
Entrepreneur

Alan Zibluk – Markethive Founding Member

Markethive

Bitcoin Price Breaks $2,000 in Historic All-Time High

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Bitcoin Price Breaks $2,000 in Historic All-Time High

Bitcoin Price Breaks $2,000 in Historic All-Time High

 

Bitcoin price has, for the first time in its history, reached $2,000 and beyond during trading on Saturday.

The world’s most prominent cryptocurrency began trading in 2017 at $1,000 per coin, with today’s new all-time high representing a doubling of value for bitcoin. On an average, bitcoin price climbed to $2,040.88 in global trading markets. On the Bitstamp Price Index (BPI), price struck a high of $2,020.

Trading leading into Saturday saw global average prices climb to $1,968.48. A steady period of trading during the day saw prices climb throughout before crossing the symbolic $2,000 milestone at 18:00 (UTC) on Saturday.

“Nearly seven years ago to the day, the first real-world Bitcoin transaction was completed in Florida, when two pizzas were bought for 10,000 bitcoins,” reminded eToro senior markets analyst Mati Greenspan in conversation with CCN. “If you’d invested $100 in bitcoin that day and left it there, you’d be sitting on over $20 million right now.”

He added: “The $2,000 mark is a historical moment for Bitcoin”.
 

Intriguingly, trading over the last 24 hours was led by US markets followed by Japan, the inverse of recent trading trends of the past few months. Bitfinex, GDAX and Bitstamp led the way in the US marketplace, altogether leading to over 35% of trading in the past 24 hours. Trading markets in Japan, China and South Korea combined for over 45% of trading volumes.

Bitcoin prices have gained 50% in May alone, a month that saw bitcoin in the headlines for being abused by ransomware extortionists behind the global WannaCry cyberattack.

“One might have expected that the WannaCry cyberattack – in which hackers asked for payment in Bitcoin – would have had a negative effect on price, but it seems like not even a ransomware attack can prevent the rise of Bitcoin,” Greenspan added.

The analyst also revealed that bitcoin’s soaring gains hasn’t put off existing investors from continuing to invest in the cryptocurrency. “Bitcoin is gaining some serious momentum among investors on our platform, with 88% of Bitcoin traders still buying the asset.”

Bitcoin’s flourish comes during a time of marked gains for the wider cryptocurrency ecosystem, led by the likes of Ethereum, Litecoin and Ripple.

After hitting an unprecedented $100 for the first time on Thursday, Ethereum’s ether token is now trading above $125.

Altogether, the entire cryptocurrency market cap is now valued above $70 billion, up from less than $30 billion a little over a month ago.

David Ogden
Entrepreneur

Author:Samburaj Das

 

Alan Zibluk – Markethive Founding Member

Markethive

UNDERLYING ASSET BITCOIN VALUE CLOSER TO $3000

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UNDERLYING ASSET BITCOIN VALUE CLOSER TO $3000

UNDERLYING ASSET BITCOIN VALUE CLOSER TO $3000

 

Bitcoin price has been skyrocketing, before this weekend’s cyber attack hiccup, but prices are again on the move upward. How much is a Bitcoin really worth right now? American investors are seeing a true value of more than 70% higher than the market rate this week.

As Bitcoin does not have any real level of mainstream investor access like an ETF, even though that is still a possibility, the next best thing right now is shares in the Grayscale Bitcoin Trust, or GBTC, according to sources. The Grayscale Bitcoin Trust is one of the very few ways to access Bitcoin through a standard brokerage account.

In the case of Bitcoin, its price has moved up about 50% over the last month, and the GBTC has nearly doubled. The extra buying and demand for exposure have pushed a premium onto shares of GBTC. To calculate the premium that you may be paying, you have to take your GBTC shares and times them by about 10.75. According to the company’s website, each share is about 0.093 BTC, as of late last month.

CLOSE TO $3000 BITCOIN VALUE

Just six weeks ago, shares were trading at half the price they are now. April 1st, 2017, GBTC shares were selling for $110 USD, and now they closing at $220, and have peaked at $265 each during inter-day trading. When you multiply these share values times 10.75, you are much closer to $3000 USD than you are the current market prices in the $1700-1800 range. $265 in GBTC shares converts to $2849 in underlying asset value.

This level of a premium price, in the 70% range, means there is a bubble forming, at least in this sector of the over-the-counter market, and now is not the time to buy. Even in markets like India, where Bitcoin currency is high in demand, it is selling at just over 20% over market. It may be advisable to wait until the market settles, which may not be until next month.

Considering these investment market realities, it is not hard to understand the mainstream interest in a future Bitcoin ETF to provide some level of competition. This is also a good indicator that the current price is legit, and a major, sustained Bitcoin price drop is not in the cards anytime soon, at least not in the U.S. market.

 

David Ogden
Entrepreneur

Alan Zibluk – Markethive Founding Member

Markethive

Cryptocurrency Bubble?

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Cryptocurrency bubble ?

Cryptocurrency Bubble ?
 

Some credible sources are citing a possible "cryptocurrency bubble", as the prices of coins and tokens rocket and the fever for initial coin offerings (ICOs) continues unabated. All this stuff involves the technology known as blockchain, so it's all broadly related, but there are also certain distinct phenomena to consider.

On the one hand, we are seeing a massive increase in the price of Bitcoin, ether, Dash, Z-Cash, Monero, what have you.

Also surging is the ICO trend, which involves many new startups issuing and selling their own tokens (often oversubscribed with speculative buyers) as a way to crowdfund the building of yet another use-case focused blockchain system.

One theory behind the dramatic increase in the value of existing "altcoins", as in alternatives to Bitcoin, such as Dash or Litecoin, is that Bitcoin is approaching its limit and as a result users are now forced to pay increasingly high fees to use the Bitcoin network. Indeed, users are paying transaction processors additional Bitcoins to prioritise their transactions among the many thousands that are queued in a backlog, termed the 'mempool'.

Preston Byrne, COO of Monax and a fellow of the Adam Smith Institute, recently wrote about this: "The cryptocurrency market as a whole is interesting from an economic perspective in that it provides a perfectly transparent sandbox to see what happens when perfectly substitutable goods (Bitcoin clones) that accomplish the exact same thing (unregulated value transfer) in a fully automatic way (distributed state machines which require no human oversight) are placed in a position to compete.

"As far as an end-user of cryptocurrency software is concerned, whether a c-currency is $3000 in Dogecoin or $3000 in Bitcoin is immaterial; the shop round the corner prices its goods in USD/GBP/EUR, so as long as one coin or the other has sufficient liquidity to cash out, this means competition can occur on the basis of speed and transaction fees."

According to trading experts, the crypto ecosystem has been fleshed out lately with more cross pairs and on-ramps from the fiat world. There is a roll in roll out trade from Bitcoin to crypto and back as the markets inflate on both sides of the trade.

Charles Hayter, CEO, CryptoCompare, said: "Last year it was fairly easy to predict buying of Bitcoin through fiat and then into crypto. The cross pairs and markets have matured to offer direct Ethereum and Litecoin buying in a number of fiat pairs and this is increasing the options for traders to enter and exit positions. That said, Bitcoin is still the direct port in a storm for the entire industry.

"You are also seeing the arrival of new nations to the crypto sphere with their own bespoke approach to local regulatory issues et al – South Korea is a perfect case in point as they have taken the number three spot in terms on direct fiat to Ethereum trading.

Hayter said another interesting trend has been the dislocation of markets premia / discounts across pairs have widened. "This has been exacerbated by the Chinese regulatory issues as well as Wells Fargos hiatus on international transfers connected to Bitfinex and USDT. New markets tend to sit at premiums, as direct fiat flow spikes prices with exit routes from dead pools of money trading at a premium for exiting the exchange," he said, adding, "bubble – to an extent."

However, as far as ICOs are concerned, many prominent people in the industry believe this is fast becoming pure bubble territory and will end in tears (and probably some actions by the SEC). Someone who would go the record about token sales is angel investor and author William Mougayar, who is organising the Token Summit in New York on May 25.

He said: "In the history of technological cycles, if you follow economist Carlota Perez's thinking, nothing great happens without overshooting during the installation phase of a given technology, before moving into the adoption phase.

"We are clearly in the installation phase of cryptotech, and there is nothing we can do to prevent this overshooting from happening. It's just human nature at play.

"Of course there are ideas, protocols, start-ups and applications currently being launched that will not make it long term, but out of all this activity, some great ones will emerge."

Byrne of Monax has been as staunch a critic of ICOs as anyone ("the equivalent of selling people rows in a database"). But he concluded by saying that, amid all the froth, the way blockchains perform is truly impressive.

"Even relatively obscure systems with a fairly low level of developer input, such as Dogecoin, continue to survive and thrive under the circumstances. This is a ringing endorsement of blockchain technology as a very capable way of automating financial process flows with maximal security and minimal supervision.

"In the enterprise blockchain space we benefit directly from observing the failings and successes of public blockchain systems, which allows us to deliver more value to our clients in the permissioned/regulated applications they ask us to build. All in all, it's great," he said.

 

David Ogden
Entrepreneur

 


 

By Ian Allison

 

Alan Zibluk – Markethive Founding Member

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Cryptocurrency Ethereum soars by 900 per cent as stellar performer gets Chinese boost

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Cryptocurrency Ethereum soars by 900 per cent as stellar performer gets Chinese boost

Cryptocurrency Ethereum soars by 900 per cent as stellar performer gets Chinese boost
 

A CRYPTOCURRENCY that allows users to move value around as well as represent the ownership of property has rocketed by 900 per cent in just a year.

Ethereum, which uses apps that run on a custom built blockchain, an enormously powerful shared global infrastructure, is attracting serious investor interest over its incredible financial returns.

The blockchain app, which claims it allows developers to create markets, store registries of debts or promises and move funds all without a middle man or counterparty risk, was launched in August 2014.

It was developed by a Swiss nonprofit and crowdfunding campaign which has in turn catapulted it to huge success.

With a current market capitalisation of more than £7billion, the digital currency is outperforming its main rival Bitcoin, according to market data.

Now analysts say it has been of particular interest to the Chinese market which is embracing the explosion in digital currency with gusto.

Blogger Andrew Keys said: "I was fortunate enough to be invited to the city of Hangzhou for the Global Blockchain Financial Summit.
"During this trip to China, I learned about the burgeoning Ethereum communities in Beijing, Shanghai, Nanjing and Hangzhou. Every night we hosted an Ethereum meetup and it was standing room only in each city.

"Peking University is creating an Ethereum Laboratory to work on protocol improvements and application use cases that effect China, specifically in supply chain and energy markets.

"The Royal Chinese Mint is experimenting with the ERC 20 token standard and Ethereum smart contracts to digitise the RMB".

Meanwhile Silicon Valley based Martin Frohler, who runs Quantiacs, told Express.co.uk that the cryptocurrency is set to revolutionise the way the world trades thanks to the advent of blockchain infrastructure following the news that Bitcoin surpassed $1,800 to a fresh record high today.

It rose more than $100 in just two days, driven by comments from policy makers and positive noises around the future of the cryptocurrency.

He said: "You can think of a Blockchain as an identical database of transactions (or other information) stored on hundreds of computers around the world.

"Every new transaction that's entered into the system has to be verified by the majority of the computers. Since no single person, government, or institution controls that majority it is close to impossible to hack a transaction.

“The process of verifying transactions through computing power is called 'mining'.

"The miner receives the right to create a very small new unit of that currency as reward.

"Depending on how much Bitcoin already exist that new unit becomes smaller and smaller over time.

"There is an absolute limit of the number of Bitcoin that will ever exist: 21 million. Bitcoin is by construction a deflationary currency, which makes it an attractive store for value.

"Anybody with internet access can buy or sell bitcoin at a bitcoin exchange or with a digital wallet".

The digital currency is trading at $91.20 (3.11%) today.

 

David Ogden
Entrepreneur

 

By SIOBHAN MCFADYEN

Alan Zibluk – Markethive Founding Member

Markethive

Cryptocurrency – Looking Forward from May 2017

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Cryptocurrency – Looking Forward from May 2017

Cryptocurrency – Looking Forward from May 2017

For cryptocurrency enthusiasts, developers and investors, the first half of 2017 has been nothing but exciting. Very few people would have predicted the trends that we are now seeing today: a vibrant and rapidly growing altcoin market, massive all time highs for both Bitcoin and Ethereum and an initial coin offering (ICO) crowdfunding mechanism that is creating enormous investor hype.

Among all of this noise are a number of very interesting developments. These developments could indicate what’s to come in the second half of 2017, and this article aims to summarize events so far and what may be to come. Whatever your role in the cryptocurrency space, this piece should serve as some inspiration as to where to look next.
 

RIPPLE – BITCOIN FOR BANKS

The popularity of Bitcoin’s blockchain stems from its ability to circumvent banks and allow users to engage in peer to peer transactions without authority; creating an enormous array of applications for Bitcoin gambling and dark net markets, as well as limitless “white hat” models. This ideology is more powerful than ever today, but the introduction of Ripple in 2013 has demonstrated that banks themselves can be revolutionized by overhauling their systems to use blockchain-based payments.

Ripple is unlike most other cryptocurrencies, in that it operates on a private or “consortium” blockchain, whereby the nodes (transaction verifiers) are controlled by trusted financial institutions that have been vetted to join the network – on the contrary, anyone in the world is free to join and use the Bitcoin network. The Ripple tokens (XRP) power international transactions on the network, whether that’s fiat to fiat, crypto to crypto or a mix of the two – with currency exchange conversions happening on the fly. Ripple allows banks to reduce global (and domestic) payment times from days and weeks down to seconds, with layers of transparency that are unprecedented in the traditional banking sector.

Despite being a private blockchain, anyone in the world is able to purchase XRP, and with a fixed supply of 100bn, scarcity may play an important role in the future price of XRP. This scarcity has also been compounded by the founding team of Ripple agreeing to verifiably “lock up” well over half of that total supply – adding some predictability to the XRP price. This lock up time is possibly planned for extension, which – combined with the listing of XRP on major exchanges like Bitstamp, and Ripple’s partnership with Japan’s largest bank – has led to a meteoric rise in the value of XRP from $0.01 to $0.18 in a matter of weeks.

Over the past several months, it has become apparent that large financial institutions are leaning towards consortium based blockchains as opposed to the public ones offered by Bitcoin – although Ethereum may buck that trend as discussed below.
 

ETHEREUM – EEA AND DEVELOPMENT ROADMAP

Ethereum was the first blockchain to successfully convince investors that altcoins had a viable place in what was largely considered a Bitcoin-only ecosystem. Popular due to its built-in smart contract protocol, Ethereum is able to run computations that can transact value without middlemen. As a result, the project has led to the formation of the Enterprise Ethereum Alliance (EEA) which connects dozens of businesses and academics who are rapidly researching and developing smart contract technology.

While a number of the projects being worked on are private forks of Ethereum – such as JP Morgan’s Quorum protocol – the interoperability with the main Ethereum chain, as well as the lessons being learned (and shared among EEA members and the open source community), is having profound effects on Ethereum as a whole.

The EEA is just one offshoot of Ethereum that has attracted enormous investment, however there are other developments which have led to a recent upsurge in the price of Ether, from $10 to roughly $90 at the time of writing.

ETHEREUM NAME SERVICE

In May 2017, the Ethereum Foundation (EF) launched the Ethereum Name Service (ENS). This protocol is analogous to the separate Domain Name Service (DNS), which ties domain names to i.p. addresses – making them more readable to human users. In a similar way, the ENS will tie long and unreadable smart contract or personal wallet addresses to a memorable “name” such as mywallet.eth. These names are currently at auction, and there has so far been $7m worth of bids, with exchange.eth receiving a massive $600,000 bid. Note that this is a proxy bid, meaning the winner would only ever pay a trivial amount more than the next highest bidder.

REDUCING MINER REWARD

A poll taking place on carbonvote.com has indicated that an overwhelming 99.73% are in agreement with a move to reduce the miner reward from 5 ETH per block to 2 ETH (with blocks continuing to be mined at roughly 15 second intervals). The motivation behind such a change is to reduce uncertainty about the future total ETH token supply, helping to drop ETH inflation from 13% to a figure that is more inline with Bitcoin’s 4% inflation.

PROOF OF STAKE

Proof of Stake (PoS) is an alternative consensus protocol to the Proof of Work (PoW) mechanism that was made famous by Bitcoin’s blockchain. In order to secure a blockchain, miners must be rewarded by processing valid transactions, and ignoring invalid transactions. In a PoW system, a miner must expend enormous amounts of energy (with a significant cost in doing so) to process a “block” of transactions and to earn their reward. PoW protocols are enormously inefficient, with huge energy requirements that are not inline with modern day environmental considerations.

Proof of Stake serves as an alternative consensus protocol that achieves similar levels of security, but requires “miners” (called validators) to stake value in the form of cryptocurrency – expending little to no energy at all. If the validator tries to game the system for their own advantage, they lose all of their staked value. Validators that act honestly are rewarded by receiving what is analogous to interest payments.

Ethereum plans to move from their PoW structure to a PoS one, and this move is pegged for the end of 2017/start of 2018. Such a change in protocol would lock enormous amounts of Ether in staking contracts, removing said Ether from the ecosystem and reducing circulating supply.

 

BITCOIN – SEGREGATED WITNESS AND THE LITECOIN TEST BED

Bitcoin has been unswayed by the incredible rise in altcoin market caps over the past 6 months and remains one of the best performing cryptocurrencies in the market. Having matured beyond the “pump and dump” phase, the currency has now established itself as the gateway into the world of crypto. Bitcoin is, in its current form, the ultimate store of value and medium for exchange when dealing with other currencies. All of this is despite major concerns over the currency’s ability to scale. Transaction fees have increased several fold, and the mempool (unconfirmed transactions) has seen enormous growth – leading to delays of several hours or even days.

Thankfully, Bitcoin’s little cousin – Litecoin – has played a vital role in abating fear amongst Bitcoin investors. Litecoin, whose market cap is a fraction of Bitcoin’s, has acted as a test bed for introducing Segregated Witness (SegWit) – a code change to help mitigate some of the scaling problems mentioned above. Litecoin’s activation of SegWit has given developers, users and miners renewed confidence in what this code change can do for Bitcoin, providing a “light at the end of the tunnel” on a 3 year long debate.
 

WHERE DO CRYPTOCURRENCIES GO FROM HERE?

Many early adopters have hailed blockchain technology as “the internet 2.0”. In past years, a number of key figures in the industry analogized the current state of blockchain to that of email in the 1990s, suggesting that what we see today is a fraction of what can be achieved with the protocol in the years ahead. That analogy, which was (and still is) heavily criticized by skeptics, is now becoming too obvious to ignore.

Rather than blockchains competing with one another, we are seeing interoperability take hold, and growth is practically ubiquitous amongst all majro cryptocurrencies. Smart contract technology is destined to have an enormous impact on a broad range of markets in the years to come, and the impact that blockchain-based banking will have on global economics is undeniable.

It is likely that cryptocurrencies will continue to grow at an unprecedented rate until, in the same analogous way to the Internet, we experience a gigantic bubble. At what point the bubble bursts is an unknown, however – sticking with the analogy – it wasn’t until the Internet reached a value well into the trillions that the market crashed. Compare this figure with that of the blockchain market which is worth no more than $100bn and it seems that we may still be some way off. Despite what seems like an inevitable bubble, the very long-term outlook for blockchain users, investors and developers could not be brighter.

David Ogden
Entrepreneur

Author: Mark

 

Alan Zibluk – Markethive Founding Member

Markethive

Study highlights growing significance of cryptocurrencies

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Study highlights growing significance of cryptocurrencies

Study highlights growing significance of cryptocurrencies

 

More than 3 million people (three times previous estimates) are estimated to be actively using cryptocurrencies like bitcoin, finds the first global cryptocurrency benchmarking study by the Cambridge Centre for Alternative Finance.

While many members of the general public may have heard of "bitcoin", the first decentralised cryptocurrency launched in 2009, a new report from the Cambridge Centre for Alternative Finance (CCAF) paints a broader picture of "cryptocurrencies".

The report shows that cryptocurrencies – broadly defined as digital assets using cryptography to secure transactions between peers without the need for a central bank or other authority performing that role – are increasingly being used, stored, transacted and mined around the globe.

The Global Cryptocurrency Benchmarking Study gathered data from more than 100 cryptocurrency companies in 38 countries, capturing an estimated 75 per cent of the cryptocurrency industry.

Prior to this research, little hard data existed on how many people around the world actively use cryptocurrencies. The conventional wisdom has been that the number of people using bitcoin and other cryptocurrencies was around 1 million people; however, based on newly collected data, including the percentage of the estimated 35 million cryptocurrency "wallets" (software applications that store cryptocurrencies) that are in active use, the CCAF research team estimates that there at least 3 million people actively using cryptocurrency today.

While bitcoin remains the dominant cryptocurrency both in terms of market capitalisation and usage, it has conceded market cap share to other cryptocurrencies – declining from 86 per cent to 72 per cent in the past two years.

The study by the CCAF at Cambridge Judge Business School breaks down the cryptocurrency industry into four key sectors – exchanges, wallets, payments, and mining. Highlights of the findings are:

Exchanges

Cryptocurrency exchanges provide on-off ramps to cryptocurrency systems by offering services to users wishing to buy or sell cryptocurrency. This sector was the first to emerge in the cryptocurrency industry, and has the most operating entities and employs the most people. Currently, about 52 per cent of small exchanges hold a formal government license, compared to only 35 per cent of large exchanges.

Wallets

Wallets have evolved from simple software programs to sophisticated applications that offer a variety of technical features and services. As a result, the lines between wallets and exchanges are increasingly blurred, with 52 per cent of wallets providing an integrated currency exchange feature.

Payments

Cryptocurrency payment companies generally act as gateways between cryptocurrency users and the broader economy, bridging national currencies and cryptocurrencies. They can fit into two broad categories: firms that use cryptocurrency primarily as a "payment rail" for fast and efficient cross-border transactions, and firms that facilitate the use of cryptocurrency for both users and merchants. The study found that the size of the average business-to-business cryptocurrency payment ($1,878) dwarfs peer-to-peer and consumer-to-business cryptocurrency payments.

Mining

In the absence of a central authority, cryptocurrencies are created by a process called "mining" – usually the performance of a large number of computations to solve a cryptographic "puzzle". The study shows how cryptocurrency mining has evolved from a hobby activity into a professional, capital-intensive industry in which bitcoin miners earned more than $2 billion in mining revenues since 2009. The cryptocurrency mining map indicates that a significant proportion of publicly known mining facilities are concentrated in certain Chinese provinces.

The study found that more than 1,800 people are now working full time in the cryptocurrency industry, as more companies are engaged across various cryptocurrency sectors.

"Cryptocurrencies such as bitcoin have been seen by some as merely a passing fad or insignificant, but that view is increasingly at odds with the data we are observing," says Dr Garrick Hileman, Research Fellow at the Cambridge Centre for Alternative Finance (CCAF) at Cambridge Judge Business School, who co-authored the study with Michel Rauchs, Research Assistant at CCAF.

"Currently, the combined market value of all cryptocurrencies is nearly $40 billion, which represents a level of value creation on the order of Silicon Valley success stories like Airbnb," Dr Hileman says in a foreword to the study. "The advent of cryptocurrency has also sparked many new business platforms with sizable valuations of their own, along with new forms of peer-to-peer economic activity."
 

David Ogden
Entrepreneur

 

Source: University of Cambridge

Alan Zibluk – Markethive Founding Member

Markethive

Hefty Trading Boost Cryptocurrency Market Cap Soars Above $40 Billion

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Hefty Trading Boost Cryptocurrency Market Cap Soars Above $40 Billion

Hefty Trading Boost Cryptocurrency Market Cap Soars Above $40 Billion

 

Bitcoin may be getting most of the headlines, but cryptocurrency as a whole is on a roll. Statistics from Coinmarketcap.com reveal that 82 out of the top 100 cryptocurrencies posted gains in a recent 24-hour period. Whether all cryptocurrencies are riding bitcoin’s coattails or investors are suddenly discovering altcoins is anybody’s guess.

The total cryptocurrency market capitalization (price per coin times amount of coins in circulation) stands at $42.6 trillion. That marks more than a $10 billion gain in 10 days.

Ripple Leads In Growth Rate

Among the currencies with a market capitalization in excess of $1 billion, Ripple has posted the top growth rate of 33.6% in a 24-hour period, yielding a $2.831 billion market cap. Litecoin comes in second with a 22.34% growth rate and $1.132 billion market cap.

Ripple’s gain has been credited to a strategic partnership initiative, teaming with Asian and Australian banks in conjunction with its stated goal of acting as PayPal-like mechanism for large interbank transfers.

Litecoin, for its part, has benefited from Coinbase’s decision to support it, allowing users to buy, sell and store Litecoin using its platform and wallet. It became the third cryptocurrency, after bitcoin and Ethereum, to gain Coinbase’s full support.

What Drives Bitcoin?

Bitcoin, far and away the largest market cap in excess of $25 billion, posted a 5.81% 24-hour jump. Bitcoin’s price reached a new all-time high once again, at $1,567.

Brian Kelly, a financial analyst at CNBC, has attributed the recent surge in bitcoin’s price to the rise in institutional investors within the bitcoin market. Other factors include the bitcoin community’s consensus not to support Bitcoin Unlimited, and an overall increase in global trading.

Some analysts have attributed some of bitcoin’s growth to that of the altcoins; altcoins are usually bought and sold with bitcoin, requiring traders to buy bitcoin.

Ethereum Has Its Own Story

Ethereum, which has the second highest market cap at just over $8 billion, has jumped 12.12% in the 24-hour period. Its price rise is due to a number of factors.

Google searches for Ethereum have spiked to an all-time high, nearly doubling in just one week.

Some countries appear to be using ETH a hedge against national currencies. Switzerland, where the Ethereum Foundation is based, showed the strongest interest, followed by Venezuela, which is suffering triple-digit inflation.

South Korea seems to have fallen in love with the currency. Its three largest exchanges handle twice the ETH/fiat volume of Coinbase’s GDAX and Kraken combined.

South Korea is also big into fantasy sports, an area where ETH’s smart contracts can be used to make the game more transparent and reduce cheating.

Don’t Forget Dash

Dash, number 5 with a $683.3 million market cap, jumped 6.77% in the 24-hour period. Featuring exceptional transaction speed, Dash continues to become more accessible to investors and consumers.

The cryptocurrency exchange Kraken recently announced the integration of Dash to its trading platform. BitCart, an Ireland-based discount gift card platform, recently allowed users up to a 20% discount for using Dash on Amazon purchases. Crypto-Woo, a payments plug-in, has integrated Dash, allowing users to pay for online purchases with Dash. CryptoBuyer, a Venezuela-based crypto exchange, has begun selling Dash, allowing consumers in the economically ravaged country to have another alternative to its imploding national currency.

Ethereum Classic, number six at $664.4 million, rose 8.97%.

NEM, at %521.7 million, jumped 9.5%.

Monero, number 8 at $371 million, rose 8.76%.

The top 14 cryptocurrencies all posted gains in the 24-hour period. PIVX, which at $84.1 million has the 15th highest market, cap posted a 3.16% drop.

David Ogden
Entrepreneur

Alan Zibluk – Markethive Founding Member

Markethive

Bitcoin soars Above $1,400

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Bitcoin soars above $1400

Bitcoin Soars Above $1400

The price of bitcoin has bulldozed its way to a new historic all-time high on the Bitstamp Price Index (BPI) as the trading value of the cryptocurrency scaled beyond $1,400.

Bitcoin prices are now trading at previously uncharted levels as the value of the cryptocurrency reached a high of $1,425 on Bitstamp on Monday. The previous high of $1,350 registered on March 10 amid heightened traders’ interest in the lead-up to the SEC decision about a bitcoin exchange-traded fund (ETF).

Since the turn of 2017, bitcoin’s value has now risen by over 42%.

The latest surge in prices is a part of a continuing bullish trend that began in last quarter of 2016. The value of the world’s most prominent cryptocurrency struck a significant milestone on January 1 when prices struck $1,000. Within days, bitcoin made history and reached gold parity. That early momentum has stuck through what has been a dramatic four months since the turn of the year.

The crackdown led by the People’s Bank of China, the country’s central bank, remains the single largest negative driver in prices throughout January and February. Prices fell as low as $750 on January 12th, before recovering.

In March, the anticipation of the SEC’s decision toward a bitcoin ETF drove prices to hit an all-time BPI high of $1,350. The federal agency’s rejection sent prices tumbling below $1,000 in a sharp fall to a low of $891 before bouncing back to begin a bullish price trend in April.

April began with bitcoin gaining recognition as a legal method of payment in Japan. The legislation has led to retailers making notable moves toward accepting the cryptocurrency. As many as 260,000 Japanese storefronts will be enabled to accept bitcoin as payment by this summer. Emerging markets such as Russia and India have significantly changed their previously hardline stance with bitcoin, with authorities now talking about regulating (and acknowledging) the cryptocurrency. The last week of April also saw the SEC announce its decision to review its rejection of the bitcoin ETF application filed by the Winklevoss brothers. News of the review, it appears, has helped bitcoin’s bull run step up a gear. A week later, bitcoin is now trading at historic highs.

A protocol upgrade with Litecoin is among a number of factors that have contributed to the wider cryptocurrency market also making marked gains. Ethereum, the second most prominent cryptocurrency after Bitcoin, struck a new all-time high today and is now valued at $7 billion in overall market capitalization.

 

Global average prices struck a high a historic high of $1,433.81, according to data from BitcoinAverage.

David Ogden
Entrepreneur
 

Alan Zibluk – Markethive Founding Member