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A Stark Prediction For The Future Of Bitcoin, ETH, XRP, And LTC

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Bitcoin, ETH, XRP, and LTC prices, will be on a roller coaster for a long time. Traders and investors will make and lose fortunes in record time, betting on them. In the end, say some analysts, these cryptocurrencies will either die on their own, or be killed by the ‘establishment’ — big governments and big banks around the world that defend sovereign currencies.

Take the case for Bitcoin.

The “people’s currency” holds a great promise: to become the first true global currency, free of the control of central banks that print money and big banks that generate credit.  But to do that, Bitcoin must gain the trust of the “general public.“ This means it must be adopted as a medium of exchange, standard of value, and store of value, replacing national currencies.That isn’t easy, given the many obstacles Bitcoin has to overcome. Like lack of awareness, familiarity, and stability, etc. And that makes some experts bearish about the future of Bitcoin.

Bitcoin Price YTD

Bitcoin Price YTD

Lars Seier Christensen, Chairman of Concordium, the next-generation decentralized world computer, is one of them. “In the longer term, I am bearish on bitcoin as I believe it does not have the necessary characteristics of a longer-term valuable asset and, eventually, that reality will catch up” says Christensen.“But in the short term, price movements will likely be random as Bitcoin is affected by low liquidity and unpredictable bigger trades.”

Unpredictability will make it hard for Bitcoin to gain broad adoption as a medium of exchange. And without broad adoption, Bitcoin will remain a play for speculators and true believers, and eventually die on its own.

But even if Bitcoin overcomes all these obstacles and gains broad adoption by the general public, and was in a position to replace national currencies — ie, become the new currency — what would happen then?

Bears argue that the “establishment” cannot afford to let that happen.

For a couple of reasons, including  the loss of Seigniorage” — simply put, the profit made by the national governments by printing currency. Then there’s the profit made by banks helping circulate that money and create credit.

The establishment will do whatever it takes to defend these profits from Bitcoin and any other cryptocurrency that seeks to replace it.

Recent Congressional hearings on Libra attests to the determination of the establishment to protect the dollar from competing cryptocurrencies. In a rare display of unity, Democrats and Republicans opposed Libra, and had many unkind words for Bitcoin.

“Cryptocurrencies that are ONLY there as a currency substitute, however, have no real long-term future,” says Christensen.“They will be outlawed by governments wanting to control the money supply and taxation, and in any case, cryptocurrencies have no intrinsic long-term value of significance. Hence, Bitcoin will only survive as a fringe activity.”

Not everyone agrees with this gloomy assessment, however. Dave Hodgson, Director and Co-Founder of NEM Ventures, is one of them.

“In my opinion, Bitcoin will never die nor be killed by the establishment, despite some people’s efforts to the contrary,” says Hodgson. “The recent drop we have seen in Bitcoin is within the boundaries of what our analysts were expecting from technical analysis. However, the timescale has been slightly skewed in light of recent announcements, primarily from US government representatives.”

 Corentin Denoeud, CEO and Co-founder of Blockchain Studio, is another .

“The fact that governments around the world are even talking about crypto is a sign of progress for the blockchain industry in general,” says Denoeud. “While countries such as India have called for the outlawing of cryptocurrencies, representatives from Germany’s Central Bank have responded favourably and advanced the view that cryptocurrencies are not a threat to global monetary stability. Even China, who has previously banned ICOs and cryptocurrency trading, has called bitcoin a ‘safe-haven asset’ (via its state-run media agency) and is now reportedly stepping up its own efforts to create its own cryptocurrency, following Facebook’s unveiling of Libra.”

 While it’s still unclear which side is right, one thing is clear: Bitcoin (and ETH, XRP, LTC, etc) true believers who think that cryptocurrency will eventually replace national currencies, need a 101 lesson in Money and Banking.

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I’m Professor and Chair of the Department of Economics at LIU Post in New York. I also teach at Columbia University. I’ve published several articles in professional journals and magazines, including Barron’s, The New York Times, Japan Times, Newsday, Plain Dealer, Edge Singapore, European Management Review, Management International Review, and Journal of Risk and Insurance. I’ve have also published several books, including Collective Entrepreneurship, The Ten Golden Rules, WOM and Buzz Marketing, Business Strategy in a Semiglobal Economy, China’s Challenge: Imitation or Innovation in International Business, and New Emerging Japanese Economy: Opportunity and Strategy for World Business. I’ve traveled extensively throughout the world giving lectures and seminars for private and government organizations, including Beijing Academy of Social Science, Nagoya University, Tokyo Science University, Keimung University, University of Adelaide, Saint Gallen University, Duisburg University, University of Edinburgh, and Athens University of Economics and Business. Interests: Global markets, business, investment strategy, personal success.

Source: A Stark Prediction For The Future Of Bitcoin, ETH, XRP, And LTC

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Brazilian President Jair Bolsonaro Reveals He Doesn’t Know What Bitcoin Is

Jair M. Bolsonaro, the president of Brazil, has recently revealed in an interview with a well-known TV show host that he doesn’t know what bitcoin is, while speaking about his administration’s decision to shut down an ‘indigenous cryptocurrency’ project.

According to local news outlet Portal do Bitcoin, the TV show host has been participating in various cryptocurrency-related events recently, and was speaking to the country’s president about a cryptocurrency-related project barred by Brazil’s Minister of Human Rights, Family, and women, Damares Alves.

Bolsonaro, with a disapproving tone, stated:

She [Damares] discovered at the end of the transition last year that they were earmarking Funai for RS $40 million, and do you know why Ratinho? To teach indigenous people how to mess with bitcoin.

The “indigenous cryptocurrency” project Bolsonaro refers to was signed three days before the mandate of Michel Temer, Brazil’s former president, ended. It would see the country spend roughly $12 million to bring in an “alternative currency” for its indigenous communities, in a move that purportedly could “transform the reality of these people.”

As CryptoGlobe covered, however, the project saw the government sign a contract directly with the National Indian Foundation (Funai) and with the Universidade Federal Fluminense (UFF), instead of seeing organizations compete for it through a traditional bidding process.

At the time, officials claimed the UFF was chosen because of its “expertise” in similar projects. It’s worth noting, however, that Funai employees claimed the work that was set to be done was of “questionable technical relevance.”

Reacting to Bolsonaro’s disapproving tone, Ratinho asked the Brazilian president if he knew what bitcoin was. Bolsonaro replied he didn’t know but with help from the host managed to get a little more out:

It’s that virtual coin. I do not know how to operate that ‘train’ yet.

As Portal do Bitcoin reports, Bolsonaro’s son Carlos Bolsonaro appears to not yet properly understand cryptocurrencies. On the microblogging platform Twitter, he claimed the halted cryptocurrency project blocked “millions in bitcoin,” when in reality it blocked millions in fiat currency.

Featured image via Jair Bolsonaro’s YouTube channel.

Source: CryptoGlobe

Bitcoin Holds Over $6,000, Beats Stocks And Gold In 2019, Will It Ever Get Back To $20,000?

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Bitcoin has outperformed stocks and gold, so far, in 2019.

The digital currency has gained close to 68% YTD, the NASDAQ QQQ Invesco ETF shares have gained 18.09%, the Russel 2000 iShares ETF has gained 15.04%, while SPDR Gold shares have lost 0.08%.

Stocks, Gold, and Bitcoin YTD

Stocks, Gold, and Bitcoin YTD

Koyfin

Meanwhile, the rest of the cryptocurrency was mixed, with 30 out of the top 100 advancing, and 70 falling over the last seven days.

Table 1

Number of Cryptocurrencies That Advanced/Declined In The Top 100 Ranks

Cryptocurrencies Advance/Decline Number
Advance 30
Decline 70

Source: Coinmarketcap.com 5/10/19 at 10 a.m

“The worst of the bitcoin bear market is behind us,” says Ian King, senior research analyst at Banyan Hill Publishing, who specializes in cryptocurrencies.

He sees a number of factors driving the Bitcoin rally this time around. One of them is resilience. “In 2017-2018, Bitcoin had a boom and bust, but it’s still here,” adds King.“The November 2018 capitulation was a mirror image of the panic buying of December 2017.”

Market capitulations usually follow bad news, but are signals of strong turnarounds. “All markets bottom when they stop selling off on bad news,” says King.  “Two weeks ago, the NYAG claimed Bitfinex was missing $850mm in customer funds.  The market sold off and then rallied.”

That’s the 4th boom and bust cycle since Bitcoin’s creation 10 years ago, observes King.  “I’m more confident of this recovery than I was of the last, as there are more institutions and retail investors looking at bitcoin as a digital store of value,” adds King.

Meanwhile, Fidelity, Ameritrade, and ETrade are planning to launch institutional trading platforms within the next few weeks, raising market participation.

That’s a bullish sign for Bitcoin, according to King.

But will Bitcoin ever reach $20,000 again? Not in 2019, according to Farrukh Shaikh, Co-Founder and CFO

-Gath3r, LTD. “In the coming few months, it is not very likely at all to go near the all-time high of $20,000. However, 2020 is when the halving occurs for BTC, where mining rewards get cut in half ie reducing future supply,” says Shaikh. “This would be the 3rd halving for BTC since inception, and previous ones have been catalysts for huge price increases for BTC.”

And that could help  Bitcoin reach $20,000 by 2021, according to Shaikh. “Speaking from a technical analysis perspective. there are several scenarios where it can reach and surpass the $20,000 price point within the next couple of years,” adds Shaikh.“On a fundamental basis, real world use, adoption and acceptance of BTC is increasing with each passing month, which are also positives for its future price expectations.”

While, it’s hard to predict where the digital currency will be in a couple of years from now, one thing is clear: volatility will continue in cryptocurrency markets.

[Ed. note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment. Disclosure: I don’t own any Bitcoin.]

My recent book The Ten Golden Rules Of Leadership is published  by AMACOM, and can be found here. 

I’m Professor and Chair of the Department of Economics at LIU Post in New York. I also teach at Columbia University.

Source: Bitcoin Holds Over $6,000, Beats Stocks And Gold In 2019, Will It Ever Get Back To $20,000?

Tim Draper Believes Bitcoin Will Grab 5% of the Earth’s Market Share

While Elon Musk and Jeff Bezos are focused on Mars, billionaire venture capitalist Tim Draper has his feet firmly planted on the ground. Draper might appear to have his head stuck in the clouds with a lofty $250,000 bitcoin price prediction. But from what he tells Fox Business, the early bitcoin investor isn’t stargazing:

“I’m a believer that in four years, something like that, bitcoin will be about a 5% market share of the earth.”

Draper’s Bitcoin War Chest is a Cool $189 Million

He pointed to bitcoin’s best features such as decentralization, transparency, and simply being a better currency than fiat. Draper was an early bitcoin investor, having purchased 30,000 BTC when the price was hovering at $632 per coin. He points out that the investment is worth 10x that amount today, and he’s got no doubt that it’s going much higher.

Draper envisions a future in which bitcoin further disrupts the venture capital business model.

“I eventually want to have a fund where I take in bitcoin and I fund everybody in bitcoin and they pay their employees and suppliers in bitcoin. And then I pay my investors in bitcoin. Because I would then require no acounting, no legal, no bookeeeping, no custody. It would all be done.”

Considering that transactions would be recorded on the blockchain, all relevant participants would be able to see everything. Tim is a big fan of bitcoin but he keeps an open mind about other cryptocurrencies, too. Though he does expect that the number of coins will be whittled down to only the best projects.

Tim Draper has a $250,000 price target on bitcoin. | Source: CoinMarketCap

Tim Draper on Facebook

Everyone knows Facebook is pursuing a $1 billion fund for its new stablecoin, and Draper has been linked to discussions with the company about the initiative. Incidentally, the gloves came off on one of Facebook’s founding members earlier this week, with Chris Hughes calling for the breakup of Mark Zuckerberg’s company. Draper isn’t buying into it.

“If the shareholders will benefit somehow by a breakup, then sure go ahead and do it. But the idea that he has all this centralized power…I think he’s just building a business and it’s a great business. And there are plenty of competitors to him out there. And I’m very pleased that he’s done so well.”

If his tone is any indication, perhaps we will be hearing about a VC investment into Zuckerberg’s new blockchain project.

Meanwhile, the bitcoin price is currently hovering at $6,379. It’s a far cry from Tim Draper’s $250,000 target but if he’s right and it captures 5% of the earth’s market share, the moon will seem a lot closer than it does today.

Source: Tim Draper Believes Bitcoin Will Grab 5% of the Earth’s Market Share

This Awful Bitcoin Stat Guarantees It’s Not Crypto’s Future: Mathematician

With all the hype about blockchains and their many uses, we shouldn’t forget the original purpose for the Bitcoin blockchain and Nakamoto’s great leap forward.

Blockchains and cryptocurrencies were created to be decentralized currencies, replacing or complementing fiat currencies. For the most avid crypto fans, crypto is the future of currency and will eventually handle full-scale economies. We dream of the day that we laugh and tell our kids and grandkids that we had physical wallets, paper currencies, and things called “credit cards” (“Grandpa, seriously, you are so old!”).

Preparing the Crypto Economy for Mass Adoption

So what has to happen in order for us to run economies on the blockchain?

There are several hurdles we still need to clear, like getting the value of these currencies to be stable, handling privacy in a sensible way, and getting confirmation speeds fast enough for point-of-sale transactions.

By far the most glaring hurdle, however, is throughput. We need to be able to handle many, many more transactions per second than any current blockchain is capable of. At 13 transactions per second (a high estimate), Bitcoin can handle just over a million transactions per day. For niche, small economies, this might do the trick. But it certainly won’t do it for, say, the US economy.

Let’s put this into perspective. In 2017, the US gross domestic product (GDP) was almost $20 trillion. GDP isn’t a great measure of how much money changes hands during the year, but for our purposes, it’s close enough. If about $20 trillion changed hands in the US in 2017, then about $54 billion changed hands every day (20 trillion divided by 365). Ignoring how slowly Bitcoin processes transactions, if it were to handle $54 billion in transactions in one day, transactions would have to be on average about $54,000 (54 billion divided by 1 million).

What? Your everyday transactions aren’t $54,000 on average? Of course not. Between 2012 and 2017, US consumers spent roughly $80 per transaction online.

bitcoin is bad for payments

Bitcoin doesn’t look like a candidate to replace credit cards in the online payments realm. | Source: Statista

In 2016, transactions on Amex credit cards averaged about $141, and those on Visa averaged about $80. While it is true that corporations tend to transact in higher dollar amounts, it’s still likely that the crypto community is still a few orders of magnitude away from being able to handle all the transactions in an economy on a single blockchain.

If, based on the statistics I just gave, we assume that transactions are about $100 on average, then $54 billion would change hands every day in roughly 540 million transactions (54 billion divided by 100). That boils down to about 6,000 transactions per second on average. If we take into account the fact that most people transact during the day, a quick recalculation yields about 10,000 transactions in an average daytime second (instead of dividing by 24 hours of the day, divide by 16 to account for about 8 hours of sleep).

This estimate is probably about right. There are roughly 324 million people in the United States, and about 5 million businesses. If we assume that people and businesses, on average, transact 1.5 times per day, then we have about 500 million transactions per day (329 million entities multiplied by 1.5). This is close to our estimate of 540 million daily transactions from before, which gives about 10,000 transactions per daytime second in the United States.

Bitcoin Would Need to Increase Transaction Capacity By Four Orders of Magnitude to Replace Visa

Mastercard, Visa, Bitcoin

With Bitcoin’s staggeringly-limited transaction capacity, it’s unrealistic to believe it can rival Visa or Mastercard – much less both. | Source: Shutterstock

Getting back to the original question, how many transactions per second does a blockchain have to be able to handle in order to support the United States economy? Our rough calculation of 10,000 transactions per second is almost certainly not enough, but it does give a base from which we can work. To give perspective, Visa processes about 1,700 transactions per second on average but at peak times it can handle up to about 24,000 transactions per second. Their max limit is just over an order of magnitude higher than the average, in order to handle high-volume days like Black Friday or the post-Christmas wave of returns.

Taking Visa’s data as an example, since 10,000 transactions per second is our rough estimate for the average, we’d probably need to be able to handle around 100,000 transactions per second to really kill it (one order of magnitude higher than the average, similar to Visa). That’s a lot. More precisely, that’s about 10,000 times faster than Bitcoin—a whopping difference of four orders of magnitude.

To me, this says that our methods of finding consensus on a blockchain are simply not fast or powerful enough to actually use crypto as a viable currency. We need innovations in infrastructure, hardware, and consensus algorithms in order to even hope to reach this threshold.

Bitcoin Is Not the Future of Crypto

bitcoin

Derek Sorensen believes Bitcoin is definitely not the future of crypto. | Source: Shutterstock

That is to say that, barring some major changes and improvements, Bitcoin is almost certainly not the future of crypto.

Technologies like the Lightning Network attempt to solve the scalability problem, but do so awkwardly and ineffectively. Opening channels to transact off-chain ties up money in extremely inconvenient ways. In practice it incentivizes users to open a single channel with a centralized liquidity provider on the blockchain, rather than opening many channels. This effectively creates unregulated, centralized banks, and in my view goes against the core principles of blockchain technology. Even worse, because transactions are done off-chain and channel data can’t be deterministically rebuilt, if a Lightning node crashes, both parties can easily lose funds. It may genuinely be one of the worst ideas in cryptocurrency.

Notwithstanding, the blockchains of the future may not be so far off. New research in math shows promising results in the mathematical foundations of consensus that could produce blockchains with 50,000 transactions per second or more without compromising safety or decentralization. Every day, a new paper comes out or a crypto startup launches a new product.

There are plenty of bright minds working on securing the crypto dream. I guess in twenty years if you’re paying for your groceries with crypto you’ll know that we succeeded.

About the Author: Derek Sorensen, Pyrofex Research Mathematician, has an MSc in Mathematics and Computer Science from the University of Oxford and is set to start his PhD this fall at the University of Cambridge, where he will study logic and topology. His work at Pyrofex is in formal verification, which includes research on the theory of consensus and setting up mathematical frameworks to prove theorems about code.

Source: This Awful Bitcoin Stat Guarantees It’s Not Crypto’s Future: Mathematician

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Crypto Analyst Brian Kelly: ‘No Shot’ for Bitcoin ETF in 2019

Crypto entrepreneur and regular contributor to CNBC, Brian Kelly, claimed that there is no chance for a Bitcoin (BTC) exchange-traded fund (ETF) approval in 2019. Kelly made his remarks in an interview with Cointelegraph at the Crypto Finance Conference, Switzerland, Jan. 18. Discussing the overall state of the cryptocurrency market, Kelly predicted that 2019 will turn out better than 2018. The analyst argued that “we are somewhere close to the end of [the bear market]………

Source: Crypto Analyst Brian Kelly: ‘No Shot’ for Bitcoin ETF in 2019

10 Year Anniversary of Hal Finney’s Running Bitcoin Tweet: Rapid Growth

The late cypherpunk and cryptographer had just become the first person to receive the digital currency from its creator Satoshi Nakamoto himself. But more importantly, he had become the first person to trust bitcoin for its immense potential. He would run its code, review its anonymity and environmental drawbacks, suggest changes, and would entirely immerse himself to support an open-source project that would one day grow up to challenge the status-quo of mainstream finance.

Source: 10 Year Anniversary of Hal Finney’s Running Bitcoin Tweet: Rapid Growth

New York Lawmakers Highlight Potential of Bitcoin, Ethereum, Ripple and Litecoin, Create New Crypto Task Force

New York is now home to the first crypto task force in the United States. Governor Andrew Cuomo of New York State has signed the Digital Currency Study Bill, which creates a digital currency task force to explore the effects of digital currencies on financial markets in the state. The task force, whose members are appointed by the Governor, Senate and Assembly, will submit reports by December 15, 2020. According to the announcement,

Source: New York Lawmakers Highlight Potential of Bitcoin, Ethereum, Ripple and Litecoin, Create New Crypto Task Force | The Daily Hodl

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