Category Archives: Bitcoin EXchange

Bitcoin reaches new record high, breaks $9,000

 

The price of one bitcoin passed $9,000.

Bitcoin is getting closer and closer to $10,000.The cryptocurrency hit a record high of $9,033 per bitcoin early Sunday morning. The price rose steadily over the weekend and surpassed $9,000 at around 6:40 a.m. UTC (1:40 a.m. ET), according to CoinDesk’s Bitcoin Price Index. It now has a market cap of more than $150 billion.

 Another digital currency ethereum also hit an all-time high of $485.18 on Saturday but has since dropped to $461.79 on Sunday, according to CoinMarketCap.

Bitcoin had been on an incredible run in the latter half of 2017. It was valued at $1,000 at the beginning of the year and is now closer to reaching the $10,000 mark as we inch toward to 2018. Bitcoin’s value surpassed $5,000 and $6,000 in October and then rose over $7,000 and $8,000 in November.

Price per one bitcoin

Price per one bitcoin

 

That said, it’s too early to tell when the price of Bitcoin will reach that $10,000 milestone because the markets act irrationally and could face a price correction, as The Merkle noted.

Bitcoin was boosted by investor interest around Thanksgiving and Black Friday shopping, a digital assets analyst suggested to CNBC.

Indeed, Coinbase, the largest bitcoin exchange in the U.S., added around 100,000 accounts between Wednesday and Friday this week to reach a total of 13.1 million. Coinbase had 4.9 million users this time last year, according to CNBC.

 

Insightful ICO? Telecom Giant Telenor Wants to Disrupt Media with Tokens

Telcos use ICO to raise Capital !
Telcos use ICO to raise Capital !

A product within telecommunications giant Telenor is hoping the technology behind initial coin offerings (ICOs) can help it disrupt the media business model.

Central to the Norway-based firm’s exploration of the tech is its partnership with data distribution startup Hubii, which launched an ICO this week using the ethereum blockchain. Both companies believe the project will bring benefits: providing a way to create a decentralized, autonomous marketplace of content that can be sold across different platforms, as well as helping Telenor thwart a long-standing hacking problem.

The firms are also interested in how they could directly interact using smart contracts powered by ethereum, instead of via the pesky media companies now increasingly viewed as middlemen.

In conversation with CoinDesk, Telenor’s head of business development at WowBox, Ketil Hoigaard, described the news app could stand to benefit from lessons learned from the Hubii Network ICO.

Hoigaard said:

“Using technologies like blockchain to deliver these services is [the] key to succeed, to be honest, because I think [blockchain is] what’s coming to all these verticals as a tool, a platform, to help deliver content to the end users in an easy way across borders.”

ICO interest

While Hoigaard is studying the ICO to glean insights for WowBox, he said, the project could signal to the larger company how blockchain could be useful in the business.

“It’s still very early. If Hubii succeeds, and I think and hope they will, I think that is five magnitudes larger, using blockchain in WowBox is more to understand and see opportunity,” he said.

Opportunity that already other areas of Telenor are looking into. For instance, Mark Briscombe, head of business modelling at Telenor has formally joined Hubii Network’s impressive advisory board, which includes former Reuters editor-in-chief David Schlesinger and John Paton, the former CEO of Digital First Media.

In that role, Briscombe not only provides business advice to Hubii, but also seeks to learn from the startup’s recent token sale.

And according to Hoigaard, Briscombe has been “talking about staffing up a team” to help WowBox understand the benefits of blockchain.

The unusual partnership between the startup and the incumbent has the telecommunications company moonlighting as a media outlet, serving local news content from Hubii’s approximately 560 third-party content creators to 50 million users each month.

But matching all that content to the best-suited audience, across multiple national borders in Southeast Asia (where the project has so far been implemented) – and doing so in real time – has provided quite a technological hurdle.

Hoigaard, who called the process a “nightmare,” now hopes the ICO will help Telenor figure out how to more seamlessly manage content creation and distribution, while also eliminating middlemen to get cheaper content for its news app, WowBox.

The middlemen the companies are trying to disrupt (as in other similar attempts to reimagine media with blockchain) in this process would appear to be the publishers themselves.

As news and video consumption increasingly comes to users via algorithms, media companies that pay reporters, bloggers and videographers a salary stand to be increasingly marginalized by self-executing smart contracts written on a blockchain.

Hubii Network value flow

By moving the functions of a traditional media house to a system operated using blockchain tokens and smart contracts, both Hubii and Telenor hope they can make money and cut costs by paying the creators for their content directly.

“I really want the original content and to use it as I want, in my context,” said Hoigaard.  “And we are willing to pay for it, because we know the users will be there.”

A secure token

However, Telenor’s exploration of blockchain technology goes beyond the Hubii partnership.

Already, Telenor issues tokens from a traditional, centralized database to its WowBox customers in Bangladesh and Pakistan. But they have proved easy to hack. When Googling “WowBox tokens,” three of the four most-watched videos show how to hack the app to receive unlimited tokens.

In this way, Hoigaard remarked that he sees a public blockchain with a tradeable token as an elegant solution:

“We are looking into using a blockchain and our own tokens for our millions of users. They will then get the actual token, on a blockchain, instead of just a database.”

From there Telenor hopes it can grow the program without roadblocks, and the company very much sees expansion on the horizon.

According to Hoigaard, of the 15 countries Telenor serves, Bangladesh, India and Thailand have “innovation houses [that] are looking into blockchain.”

China’s New Fundraising Rules Could Lead to ICO Investigations

Here we go again another ...Ponzi
Here we go again another …Ponzi

New rules being developed by the Chinese government against illegal financing may be used to crack down on initial coin offerings (ICOs).

A draft of the regulations has been released by the Legislative Affairs Office of the State Council, the executive Branch of the Chinese government. Officials are soliciting public comments over the next month before officially commencing the legislative process.

Though broadly focused on a range of fundraising activities, the fifteenth article of the draft ruleset identifies cryptocurrency-based funding efforts as potential targets for investigations.

The text states:

“If the department overseeing illegal fundraising activities found a fundraising without proper permission, or a fundraising that violates the relevant provisions of the State, and if one of the following circumstances is found, the department shall launch an administrative investigation. Other relevant departments shall cooperate with the investigation.
….
(2) to raise funds in the name of issuing or transferring equity, raising funds, selling insurance, or engaging in asset management activities, virtual currency, leasing, credit cooperation and mutual funds…”

The draft outlined that the government shall establish an interdepartmental committee to combat illegal fundraising. It also clarified, for the first time, that participants of illegal fundraising shall be responsible for their own losses.

There are currently two laws dealing with illegal fundraising in Chinese crime law system. The crime of fund fraud, which used to be punishable by death, now carries a maximum sentence of life in jail. The other one – the crime of illegally absorbing public deposits – carries a maximum sentence of 10 years in jail.

The new regulations also come amid a public outrage on pyramid selling scams. Last month, several college graduates were found dead after being imprisoned and assaulted by members of a pyramid selling organization in Tianjin, China.

Ledger Nano S Review – Bitcoin Wallet

Recently I attended the North American Bitcoin Conference in Miami. Ledger, one of the leading hardware wallets manufacturers were selling their merchandise at the event and I decided to finally do my Ledger Nano S review which I have postponed far too long.

So I bought myself a specially engraved Ledger Nano S created just for the conference and today I’m testing it out for the first time. If you’ve been an avid reader of 99Bitcoins you probably know I’m a long time fan of TREZOR, Ledger’s main competitor. But I’ve been hearing so many good things about the Ledger Nano that I decided to do a TREZOR vs Ledger type of comparison.

my Ledger Nano S

Before I begin my review a quick word about Bitcoin hardware wallets. Hardware wallets are probably the most robust form of security you can have for your Bitcoins or any other cryptocurrency. They allow you to send and receive Bitcoins on any computer, even one that is compromised with malware, with the knowledge that your transaction will still go through as intended. For more information about Bitcoin wallets in general watch out latest Bitcoin Whiteboard Tuesday episode.

The way the hardware wallets achieve maximum security is by storing your private key and signing your Bitcoin transactions offline so someone trying to “hack” your wallet remotely won’t be able to do so. Most hardware wallets also use a second screen / device to verify actions on your wallet such as signing transaction. This way, if a hacker gain control over your computer, he still can’t do any harm since he requires access to the physical device connected to your computer as well.

I’ve reviewed the former Ledger model, the Ledger Nano in the past. Back then I concluded that the added protection that a TREZOR wallet gives you with it’s second screen protection is superior to the Ledger Nano. However the Ledger Nano S now features a second screen feature as well. So this comparison is going to be interesting.

Design and user interface

Design-wise the products are pretty much the same. Both are small and compact, however the Ledger Nano S does have a slight advantage in the sense that its metal casing makes it more durable in my opinion (and also a bit sexier). Both wallets will both fit pretty easily into your pocket or hand as can be seen below.

Ledger Nano S vs TREZOR

The way the Ledger Nano S works is pretty similar to any hardware wallet. When you first set it up you will choose a PIN to protect the device from unwanted access. Later, you will receive a 24 word seed that will be used to create your private keys (this is what’s known as an HD wallet, more on that here). This seed should be written down in a safe place and NOT on your computer, as whoever knows this seed has control over your Bitcoins. A good suggestion would be to write this seed down using a Cryptosteel device.

The Ledger Nano S has two buttons that allow you to control it. The initial set up of the device is pretty simple and takes about 3 minutes. Most of the time is spent on writing down your seed.

This seed creation is one of the places where the second screen comes into play. If your computer is compromised a hacker will be able to see the seed if it’s displayed on your screen. This is exactly why the seed words are shown on the small device screen that is tamper-proof, so you know that only you see your seed.

Once the device is set up, all that’s left is to install an app that allows you to interface with the device (i.e. send and receive Bitcoins).

Ledger Nano S buttons

The app I used is a Chrome extension that gives you the following functionalities:

  • General account details
  • Sending Bitcoins from your hardware wallet
  • Generating your Bitcoin address to receive Bitcoins
  • Settings for your app (e.g. exchange rate, language, etc.)

The app is pretty similar to the one TREZOR uses although it has a sleeker design.

Ledger chrome app

The interface (as shown above) is pretty intuitive and doesn’t require any manual to get the hang of it. Also you can rename accounts and don’t have to call them in general names like “account #1”. TREZOR allows this as well but requires you to connect a Dropbox account.

The Ledger Nano S can also use existing Bitcoin wallets instead of the current chrome extension interface. Such wallets include MyCellium, Electrum, Bitgo, GreenBits, Copay and MyEtherWallet.

Here’s a complete review of how the device works done by BTC Sessions on YouTube:

Support of altcoins

The Ledger Nano S includes Bitcoin, Litecoin, Ethereum and Ethereum Classic companion apps, and other blockchain-based cryptocurrencies. Here are the current altcoins supported:

  • Bitcoin
  • Ethereum / Ethereum Classic
  • Litecoin
  • Dogecoin
  • Zcash (z-addresses are not supported)
  • Dash
  • Stratis

You can send and receive payments, check your accounts and manage multiple addresses for each currency from the same device.

TREZOR on the other hand recently announced that they have partnered with MyEtherWallet to support Ethereum on their device as well. Other currencies supported through TREZOR are Dash, Zcash and Litecoin (via Electrum LTC).

Company reputation

Ledger was founded in 2015 in France. The company has since gained substantial traction in the Bitcoin and cryptocurrency sphere and has grown to be a worthy competitor to SatoshiLabs (the creators of TREZOR). TREZOR on the other hand has been in the market since 2014.

Both Ledger and TREZOR use open source code for their apps, and both have demonstrated excellent customer support and stability in the past few years. Even though TREZOR is the more mature and respected company, it’s hard to say the Ledger falls behind.

Price tag

The Ledger Nano S sells for €58 (about $65) while the TREZOR sells for $99. This makes the Nano S a more attractive bargain since their features are almost identical. One can argue that the TREZOR can also act as a password manager but I’m not sure how useful this feature is at the moment.

So who’s the winner?

In all honesty, I think the Ledger Nano S wins due to the lower price. But both companies created a great product. The Ledger Nano S seems to have the upper hand in design and usability, while TREZOR’s reputation has more impact in the community (although not by much). Since most of us are price sensitive in this case the price tag tips the scale towards Ledger.

Personally, I use a TREZOR, mainly because when I first started using hardware wallets Ledger wasn’t around yet. Today I think I may start using both, storing some of my funds on a TREZOR and some on a Ledger. I have to say that the progress Ledger has made in the past year is truly impressive, and there product shows it.

https://www.ledgerwallet.com/products/ledger-nano-s

Raft of AML violations lands bitcoin exchange a $110M fine

U.S. regulators slapped the bitcoin exchange BTC-e with a $110 million fine for a slew of alleged financial crimes from facilitating dark net drug sales to financing public corruption.

One of the site’s operators, a Russian national, Alexander Vinnik, was arrested in Greece this week and the Treasury Department’s Financial Crimes Enforcement Network assessed a $12 million penalty against him for his alleged role.

BTC-e is one of the world’s virtual currency exchanges by volume and has conducted over $296 million in bitcoin transactions, Fincen said Thursday. The company facilitated ransomware, computer hacking, identity theft, tax refund fraud schemes and drug trafficking, the agency said.

Fincen Acting Director Jamal El-Hindi
Making an example

The fine against BTC-e “should be a strong deterrent to anyone who thinks that they can facilitate ransomware, dark net drug sales, or conduct other illicit activity using encrypted virtual currency,” said Fincen’s acting director, Jamal El-Hindi.

The fine was the Treasury’s first action against a money-services business located in a foreign country, and the second against a virtual currency exchange. (Ripple was the first in 2015, but its six-figure fine pales in comparison to BTC-e’s.)

It was also the second action this week by a U.S. regulator in the cryptocurrency space. The Securities and Exchange Commission released an investigative report on Tuesday that concluded certain so-called initial coin offerings are subject federal securities laws, potentially cooling a white-hot funding market for startups and software developers.

The BTC-e action “should be a strong deterrent to anyone who thinks that they can facilitate ransomware, dark net drug sales, or conduct other illicit activity using encrypted virtual currency,” Fincen’s acting director, Jamal El-Hindi, said in a press release.
BTC-e failed to obtain required information from customers beyond a username, a password and an email address, Fincen said. It also did not prevent money laundering, as users openly and explicitly discussed criminal activity on BTC-E’s user chat, and gave advice on how to process and access money from illegal drug sales from dark net markets like Silk Road, Hansa Market and AlphaBay, the agency said.

From 2011 to 2014, BTC-e processed transactions totaling 300,000 bitcoin stolen from another bitcoin exchange, the now-defunct Mt. Gox, Fincen said. It also concealed its geographic location and its ownership, violating U.S. anti-money-laundering laws and regulations, the regulator said.

As of Thursday morning, the BTC-e site was down; a maintenance situation was cited.

Fincen worked with the U.S. Attorney’s Office for the Northern District of California on assessing the fine. The Internal Revenue Service’s criminal investigation division, the FBI, Secret Service and Department of Homeland Security conducted the criminal investigation.

IF YOU BOUGHT $5 OF BITCOIN 7 YEARS AGO, YOU’D BE $4.4 MILLION RICHER

Bitcoin completely dominates over the USD after increasing almost 800,000 times in the last eight years.

Ever had a case where you wished you had bought something in the past that eventually went up significantly in value? Perhaps a plot in a low-value district which is now worth ten times more? Does that ring a bell? Well, here are some amazing stories about people who bought Bitcoins for fun, and due to the enormous rise of Bitcoin in the past few years, have now officially made millionaires status.

Monday marked the seventh anniversary of what is said to be the first recorded instance of Bitcoins being used in a real-world transaction. Over the course of seven years, Bitcoin’s value has multiplied 879,999 times. If an investor had decided to spend five dollars on about 2,000 Bitcoins back then, that stake would be worth $4.4 million today. With $1,200 spent on some 480,000 Bitcoins, the investor would be worth at least $1.1 billion today.

Bloomberg interview with Bill Gates. “Bitcoin is the answer.”

At first, Bitcoin didn’t really catch on, and it was solely the domain of the early adopters. There were very few businesses which accepted bitcoin as a payment method, and it was something which was almost frowned upon by most governments. As more and more businesses and governments accepted bitcoin, it gradually went up in value, more and more people were starting to embrace the idea of a decentralized currency, and as more people jumped on board, the price began to rise. Since the beginning of the year 2017, the value of Bitcoin spiked after gaining legitimacy in countries like Japan.

“Bitcoin is better than currency.” – Bill Gates

The main advantage of bitcoin is that it is decentralized – meaning, there’s no central bank or government which controls it. This freedom is the main reason why Investors have come to see the currency as something of a safe-haven-asset in a problematic geopolitical world — and there’s been plenty of that in recent months in Europe, Russia, Brazil and the United States. There is also an additional advantage in Bitcoin – there is a mathematical limitation to the number of Bitcoins that can be created, which means – no printing money, so the rules of economy work perfectly. Where there is a limited supply of something, and the demand goes up, the price goes up along with it.

Wences Casares has been called Bitcoin’s “patient zero” by the Silicon Valley elite. He got Bill Gates, Reid Hoffman, and countless other luminaries into Bitcoin at gatherings of the rich and famous such as Sun Valley.

Billionaire businessman Wences Casares says it’s not too late for people interested in Bitcoin.

The Argentinian-born Casares has founded an internet service provider, a video game company, and a bank, plus he sits on the board of PayPal, but it’s Bitcoin that Casares says he’s dedicating the rest of his life to, and he now runs a startup called Xapo that stores Bitcoin. At a dinner organized by the cryptocurrency policy group Coin Center in New York last night, Casares delivered the keynote speech, including some advice about how to get into Bitcoin.

 

The formula, according to Casares? Take 1% or less of what you own, buy Bitcoin with it, and then forget about it for at least the next five years; ideally the next decade. “You either lose one percent of your net worth, which most people can take, or you make millions.” he told a room of cryptocurrency advocates at the Westin in Times Square.

Experts predict a single Bitcoin will be worth $500,000 by the year 2030.

Casares pegs the odds of bitcoin failing completely and going to zero dollars at 20%. “If it fails, it will be worthless,” he says. “If it succeeds, in five to seven years a single Bitcoin will be worth more than a million dollars.” He puts the chances of success at greater than 50%.

Casares has an interesting reply for those people who believe they have already “missed out” on the bitcoin train and are afraid that they are joining too late. He said he’s seen people who bought bitcoin at cheap prices—as low as $13 who lost money because they tried to trade their way to profits, while those who bought at high prices even just a month ago have done “spectacularly well” by simply buying and holding.

So, what do you need to do if you want to invest a small amount in Bitcoin?

 Step One

Click this link to register a free account in Etoro. Why Etoro? It’s a fully regulated platform and a brand you can trust. There are endless reviews about Etoro world-wide, and people are very happy with their services. It is much safer to buy bitcoins with a regulated brand like Etoro than any other service.

 Step Two

Make the minimum deposit of $ 200 or more, depending on the amount you wish to invest.

 Step Three

Once you’ve made your deposit, enter in the top search bar the word “Bitcoin” or “btc.”

Hover

 Step Four

Click the “trade” button in order to buy the bitcoin currency. Since you’re not going to do any trading, do not touch any settings like “leverage.” Simply select the amount, for example, $200 or any amount for which you wish to buy bitcoins. Set the “stop loss” to let the system know the lowest price your bitcoin price can go to, and then set “take profit” at the highest price in which you’d like to convert back to your currency. For example, in the screenshot below, as soon as I make a $200,000 profit, I wish to sell my bitcoins and take the profit in US dollars.

 Step Five

Click the “open trade” button, and you’re done.

Congratulations! You are now part of the bitcoin community. If the price of the bitcoin rises – you can withdraw your money from Etoro as cash… whenever you want. Think about this – the most you can lose in the deal above is $250, but the profit you can make can be as high as $200,000 if the value of Bitcoin rises as expected. If you were to make the same deal 6 years ago, that same $250 you just put in would be now worth over $2,000,000. So how much will you have this time next year?

Tezos’ $232 Million ICO May Just Be The Beginning

Bitcoin tokens sit next to a collection of U.S. one dollar. Photographer: Chris Ratcliffe/Bloomberg

So far, 2017 is shaping up to be a historic year for the crypto space with nary a dull moment. If you’ve been moving around in cryptocurrency circles, you probably already know that there’s value to be found in rebelling against conventional wisdom. Bitcoin was built on a foundation that rebelled against fiat currencies and centralized financial authorities. We’ve seen the bust and boom cycles of Bitcoin – and the cryptocurrency has proved that it can survive alongside fiat currencies. We have also seen the rise (and occasional fall) of dozens of other cryptocurrencies. Now, braver folks are venturing beyond the shores of traditional cryptocurrencies to seek their fortunes in the “new way to invest”—Initial Coin Offerings (ICO).

See The Emperor’s New Coins: How ICOs Are Fueling A $100 Billion Bubble.

An ICO is simply a process by which cryptocurrency startups raise funds for new ventures. ICOs are similar to crowdfunding, except that they are almost always designed to raise funds for cryptocurrency projects, that might not be eligible for the capital-raising process of banks and venture capitalists. During an ICO campaign, enthusiasts and potential investors will buy some of the tokens of the new cryptocurrency project. Just yesterday, Tezos announced the largest ICO to date, raising $232 million worth of bitcoin (BTC) and ether (ETH) coins, making it the largest ICO to date. Tezos is just a part of the current wave of interesting companies who have already been through or are currently in the process of an ICO.

Meet some other interesting ICOs:

Augur

Augur is created to be a decentralized prediction market where people can bet on the possible outcome of events – a betting/forecasting platform of sorts. Augur has practically created a betting platform where you can bet on “everything from elections to the destruction of our solar system.” if your forecast/prediction is correct, you’ll earn rewards in the form of Augur’s Reputation (REP) tokens. Augur’s ICO helped the firm to raise more than $5.2M in a token sale, with $2.5M in the first three days. Augur has already rewarded its early investors as its REPs currently trade around $26 and the price may continue to rise as more people come on board to the betting platform.

Chronobank

Chronobank is another cryptocurrency startup that has found a way to fund its business by holding an ICO. Chronobank is simply the Uber of recruitments as it works on creating an ecosystem where freelance projects are bought and sold with cryptocurrency. When the ICO ended, ChronoBank had raised a total of $5.4M collected in seven cryptocurrencies and USD. Chronobank now has a market capitalization of more than 5,400BTC. The firm’s CEO, Sergei Sergienko notes that “we have the funds we need to launch a successful platform and forge the relationships to make ChronoBank a major disruptive force in the recruitment industry”.

Agrello

Agrello is yet to hold its ICO, however, it has the potential to become one of the biggest success stories in the cryptocurrency world for smart investors. Agrello is simply a platform for building legally binding smart-contracts, using AI without having any prior legal skills or knowledge of coding. The Agrello token is called Delta Δ and it is being offered with Tier 1 at 0.0001Ƀ, Tier 2 at 0.00011Ƀ, Tier 3 is set at 0.00012Ƀ, and Tier 4 is set at 0.00013Ƀ.

One of the key factors that hint at the potential success of Agrello, is its application across a wide range of industries. For instance, Agrello recently inked a partnership deal with Finnish manufacturing giant INCAP, to provide smart agreement prototyping for INCAP’s labor management process. Agrello also has a deal with ViewFibn to develop a digital identity engine.

New investment vehicles arrive

Investing in the cryptocurrency market sounds simple enough by buying cryptocurrencies at a low price and selling them off at a higher price. Sophisticated investors may also consider putting their money into ICOs in much the same way that traditional investors look for promising IPO in stocks.

However, as the cryptocurrency markets start to mature, new kinds of investment vehicles and opportunities are coming to the limelight. One of these investment vehicles is the cryptofund, which can be likened to a hedge fund owning different sorts of cryptocurrencies. A cryptofund is simply a portfolio that seeks to make gains by trading cryptocurrencies — some cryptofunds might also be engaged in the mining of cryptocurrencies.

If you want to gain a diversified form of exposure into the cryptocurrency market, cryptofunds can provide you with a smart tool to access these markets. For instance, eToro’s CryptoFund, provides access to six unique cryptocurrencies in order to offer a balanced exposure to the cryptocurrency market. The diversification of the fund allows investors to be uniquely positioned to record gains across multiple cryptocurrencies and it protects them against massive losses in any single cryptocurrency.

If you would like to invest directly in startups operating in the cryptocurrency market, you may want to consider investing in Pantera Capital. The firm seeks to provide VC funding to startups working in the blockchain and cryptocurrency industries. By investing with a firm such as Pantera Capital, you’ll get a chance to profit from price gains in cryptocurrencies and profit from the success of the firms behind such cryptocurrencies.

The prospects of cryptofunds going forward

Cryptocurrencies, tokens, and ICOs are already an integral part in the fast-growing decentralized economy. I strongly believe that ICOs are here to stay and we will continue to see growth and depth in the quality of ICOs and their ability to provide startups with much-needed funding. For one, the decentralized nature of ICO’s makes them open to regular investors and accredited investors. More so, the paradigm shift from traditional institutional financing to crowdfunded opportunities, that will help spread the word about blockchain technologies and ingrain cryptocurrencies, deeper into the economic fabric of the global financial markets.

The US Government Clamps Down on Ability of Americans To Purchase Bitcoin

The US Government Clamps Down on Ability of Americans To Purchase Bitcoin

Currencies / BitcoinJun 18, 2017 – 10:43 AM GMT

Currencies

You have to feel sorry for Americans. They are some of the most financially enslaved people in the world.

The bankrupt US government has been instituting capital controls for years now and have ensured that Americans can’t open a bank account nor even a bitcoin exchange account outside of the US through things like the Foreign Account Tax Compliance Act (FATCA) and just outright threatening to attack any bank or bitcoin exchange in the world who accepts Americans as clients.

This leaves Americans in the “land of the free” with very few options for bitcoin exchanges.

No exchange outside of the US will accept Americans as clients. They’ll accept North Koreans. Iranians. Russians. Chinese. Anyone… except for Americans.

And due to all the regulations in the fascist/socialist mixed US economy, it is incredibly hard to even operate a bitcoin exchange in the US.

While there are now a few other options, which we’ll discuss further below, until recently, there was only one option. Coinbase.

To be fair to Coinbase a lot of the issues with the exchange aren’t its fault directly. They are due to the myriad of rules and regulations that are strictly enforced in the US police state.

This has led to countless complaints about how difficult it is to open an account at Coinbase. Many have said that it is just as difficult to open an account at Coinbase as it is to open a bank account in the US… which usually requires a phone book stack of documents and needing to report in each morning with what you ate for breakfast.

And there have been countless reports of people saying that Coinbase closed their account without reason or notice. And many others have reported that their bank accounts have been closed once the bank noticed they were doing business with Coinbase.

Matters were made worse when late last year the IRS requested a John Doe summons as part of a bitcoin extortion-evasion probe, seeking to identify all Coinbase users in the US who “conducted transactions in a convertible virtual currency.”

After all, the thieves at the IRS expect to get their cut.

To add to that, the US federal government is pushing a bill called “Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2017” – which we talked about a few days ago.

This bill takes a further step to target bitcoin and wants to put any business which “issues” cryptocurrency under this umbrella of anti-money laundering regulations. Also, it will include bitcoin on the list of monetary instruments that must be reported when entering or leaving the US.

As you can see, trying to do anything related to bitcoin in the “land of the free” anymore is becoming more and more difficult. This combined with the SEC turning down a bitcoin ETF months ago has all but ensured that many Americans missed out on massive gains in the rise of bitcoin and other altcoins in the last year.

All in the name of protecting Americans, of course!

Lately, the site has also been plagued by technical issues as it is unable to handle the demand from customers.

There have been numerous website inefficiency and maintenance issues which rendered buy and sell orders useless for extending periods of time.

Plus there were extended periods of time when the site couldn’t be accessed at all, which left users unable to move their funds into other wallets. It’s worth noting as well that the majority of these instances occurred during periods of massive price movement which probably costs users millions in potential profits and losses.

As if all that weren’t enough to make its users furious, it just came out that Coinbase disabled the fundraising account being used to pay the incarcerated founder of the Silk Road, Ross Ulbricht’s defense attorneys.

Ross Ulbricht, for those who don’t know, was given numerous life sentences for having a website in the, need I say again… “land of the free.” Here was my recent interview with his mother on the massive injustice done to him.

This happened not long after Coinbase hired the former Silk Road’s federal prosecutor, Kathryn Haun.

Wait a sec… why in the world is Coinbase hiring US government criminals?

Many libertarians were going to give the boot to Coinbase after hearing this… but it turns out this prosecutor was the one who put the corrupt FBI agents who stole Ross’s bitcoin in jail.

So, she may not be totally evil. We aren’t passing judgement just yet.

And, yesterday, Ross’s account was enabled again:

So, Coinbase saved some face this time.

But, if they can’t somehow lessen their adherence to the millions of US government regulations and fix their site technically they will lose customers to competitors.

At this time we are only aware of two other bitcoin exchanges operating in the US that will allow users with American bank accounts to exchange fiat for bitcoin.

There is New York-based Winklevoss twin’s Gemini exchange and the San Francisco-based Kraken exchange.

We recommend Americans at least consider them as alternatives to Coinbase.

That’s just being prudent.

As always, though, ignore Mike the Health Ranger Adams on anything to do with bitcoin.

He recently put out an article entitled, “Bitcoin wallet COINBASE now seizing accounts of Americans… users rage against ‘total ripoff’ as their Coinbase accounts VANISH,” saying that Coinbase stole everyone’s money.

This, as usual from Mike, is completely untrue. Please stick to vitamins Mike… we got the cryptocurrency space covered over here.

You can tell Mike doesn’t understand what he’s talking about in his article because he refers to Coinbase as a “popular bitcoin wallet”. Of course, it provides users with different wallets for different currencies, but only an inexperienced user would refer to an exchange as a “wallet.”

Mike goes on to quote an issue Coinbase is having with Wyoming users saying Coinbase is stealing their money;

“Although we strive to provide continuous access to Coinbase services, Coinbase has indefinitely suspended its business in Wyoming and we regret that we cannot currently support services in Wyoming. You can find a further explanation of our account suspension policy here. We hope to restore service in Wyoming soon, so please check back again.”

While it is true that many users in the state of Wyoming experienced this issue, Coinbase hasn’t yet stolen the funds Mike, let’s not jump to conclusions. And, as I said earlier, this issue is caused yet again by the egregious labyrinth of laws in the “land of the free”, not by Coinbase.

It seems like lately Mike seems to be jumping at any opportunity to incite more bitcoin-based fear propaganda, maybe he’s upset he sold his bitcoin at such a low price level?

In any case, one thing is clear through all of this. As an American, it is becoming harder and harder to get access to bitcoin.

This should be a wake-up call to many. The US government is bankrupt. The US government is installing capital controls to ensure Americans cannot leave the country with their money.

And, they are making it harder and harder for Americans to convert their US dollars into bitcoin.

The writing on the wall is clear. And if you haven’t begun to get at least some of your assets outside of the US you should be running not walking to do so.

This is what every country on Earth does just before their currency hyperinflates into worthlessness or the government defaults. Just ask people in Greece. The government there has just decided they will begin taking people’s homes and the contents of their safety deposit boxes in order to keep the country from bankruptcy.

People like Peter Schiff have been warning people to stay out of bitcoin since it was $20. And now the Health Ranger is warning you to stay out of it too.

You have to wonder what is the motivation of these people who should be smart enough to know that we are on the verge of a collapse of the US dollar to warn people away from alternatives that could save them.

Cryptocurrencies have a lot of risks and we wouldn’t recommend anyone put all their assets into them. But we do recommend you begin to use them, put a small percentage of your assets into them and learn more about them.

For that I have created a free four-video webinar on the importance of cryptocurrencies which you can view HERE. And we’ll even send you your first $50 in bitcoin if you accept our offer to get more information in the videos.

To summarize, Coinbase has a lot of issues, but most of the issues are just because it operates in the US. It still, however, is the largest exchange in the US and does offer an excellent bitcoin ATM/debit card. And you can get $10 in free bitcoin if you signup using this link.

Americans can expect to have more and more problems as the US government bankruptcy and Federal Reserve hyperinflation of the dollar nears closer.

My advice is just to get out of the US for much freer places across the world where you can trade easily in bitcoin.

But, if you can’t, or won’t, you should be at least ensuring your assets are kept out of the easy reach of the world’s largest terrorist organization, the US government and the world’s largest extortion racket, the IRS.

Bitcoin is just one easy way to do that. You can find out more in my free four-video webinar here.

Anarcho-Capitalist.  Libertarian.  Freedom fighter against mankind’s two biggest enemies, the State and the Central Banks.  Jeff Berwick is the founder of The Dollar Vigilante, CEO of TDV Media & Services and host of the popular video podcast, Anarchast.  Jeff is a prominent speaker at many of the world’s freedom, investment and gold conferences as well as regularly in the media.

 

What is Bitcoin Backed By?

 

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Bitcoin and The Chinese power manufacturers

Wondering what bitcoin is backed by? The answer is nothing at all, but that’s actually not a bad thing. Like most modern currencies bitcoin is not backed by gold or other precious commodities. In a sense, bitcoin’s value is derived from our common belief that bitcoin has value. The same is true of the American dollar, the British pound, and the European Union’s euro, as well as nearly every other modern currency.

Historically speaking, up until August 15th 1971 most currencies were backed by a commodity, usually gold or silver. In fact, before the invention of paper money, most currencies were coins fashioned from precious metals. Further, following World War II and up until 1971, most of the world’s countries operated under the Bretton Woods agreement, currencies were backed by gold.

The Bretton Woods Agreement and the End of Commodity Backed Currencies

In order to understand the current system, it’s important to understand the old system. Under the Bretton Woods system, central banks would be able to trade gold amongst one another, and currencies would be tied to the value of gold, and pegged against one another. When an exchange rate is pegged, this means its value is set. So if the American dollar buys .75 British pounds, that is the value that it is set at. Most peg rates are actually adjustable peg rates, meaning that policy makers can adjust the value when needed.

The Bretton Woods system was designed to reduce the currency fluctuations seen in the 1920’s and 1930’s. During this period currencies were moving rapidly and uncontrollably, which caused international instability, and helped to worsen the Great Depression, and create the conditions that led to the outbreak of World War II. While the Bretton Woods system worked well for awhile, it eventually caused disruptions of its own.

The End of Bretton Woods and the Rise of Fiat Currencies

The Bretton Woods succeeded in creating stability in the years immediately following the second World War. By the end of the 1960’s, however, serious faults in the system were beginning to emerge. Among the biggest faults was that the U.S. dollar was too strong, which caused disruptions in international trade. For this reason, among others, governments decided to abandon the agreement, and to use “fiat” currencies instead.

Basically, a fiat currency is a free floating currency that is not backed by any sort of commodity. In the past, your dollars or other currencies would have been worth a certain amount of gold or another commodity. In practice, trading in dollars for gold was often highly restricted, still dollars were at least hypothetically worth a certain amount of gold.

Now, the dollar is no longer tied to gold. Of course, you can still buy gold with your dollars, but their values are independent from one another. Most major currencies are also not pegged to one another, but instead are allowed to float. Exchange rates can thus vary between different currencies. A few years ago, a euro could have bought about $1.4 American dollars. Now? A euro will buy only about $1.13 dollars.

Bitcoin is sort of a Fiat Currency, but So What?

Like the dollar and the euro, bitcoin and most other digital currencies are somewhat fiat. They are allowed to float in the market, and their value is determined by the market. In sense, you could even say that digital currencies and their value are determined by consensus.

Unlike traditional fiat currencies, however, there are several key factors that make bitcoin’s value potentially more reliable. First, bitcoins must be mined through computers, which requires an investment of time and money. As it becomes more expensive to mine bitcoins, it is likely that the value of the bitcoins themselves will slowly increase.

Second, while governments can increase their money supply at any given time, thus depreciating the value of individual currency units, bitcoin’s supply is tightly regulated, and the number of new bitcoins entering the market is slowing decreasing. Bitcoin is not subject to the whims of government officials or anyone else for that matter. It is a free and independent currency.

What “Backs” a Currency is Irrelevant, Perception is What Matters

Since the end of the Bretton Woods agreement, the idea that commodities are needed to back currencies has become irrelevant. Instead, public perception and economic policies are what matter. Money has value because we believe it has value. This is true of the dollar, the euro, the pound, and yes even bitcoin.

We can trade our money for goods. Many retailers now accept bitcoin as payment. In fact, when evaluating new “exotic” currencies like bitcoin, adoption rates, the ability to buy goods and services, established history, and community size are arguably the best indicators of a currency’s value. Are people using it to buy goods? Is the community itself large, sustainable, and established? For bitcoin, the answer to these questions is yes.

Many people think of bitcoin as more of an investment asset than a true currency. Part of the reason for is because bitcoin prices tend to swing somewhat dramatically. The value of all fiat currencies can swing also dramatically, however. This is true even for government-backed currencies, which are subject to the whim of government policies. The British pound, for example, has lost much of its value over the past few weeks following the Brexit vote.

In some cases, hyper inflation can even strike with money becoming nearly worthless. Consider Zimbabwe, where inflation got so bad a few years ago that the government started printing up 100 billion dollar bills. When the currency was phased out, 35 trillion Zimbabwean dollars equaled 1 American dollar. More recently, in April the IMF reported that Venezuela would suffer inflation of approximately 500% this year, and 1,800% next year. As this inflation unfolds, Venezuelan money will quickly lose its value.

More often than not, the rapid onset of inflation is caused by government mismanagement and the over-printing of money. This is why bitcoin aims to be government free. People create their own money through mining. Then, bitcoin is allowed to be freely traded in the market. Further, since the money supply itself is limited and already set, policy negotiations are no longer possible. So while it’s true that bitcoin isn’t tied to any commodity, and that it is dependent on our collection perception, like most modern currencies, the P2P currency is arguably a more reliable currency than government-backed fiat currencies.

South Korea is Becoming Bitcoin and Ethereum Powerhouse

South Korea is Becoming Bitcoin and Ethereum Powerhouse

South Korea is becoming a Bitcoin and Ethereum powerhouse in terms of trading volumes, liquidity and activity.

Over the past few months, South Korea’s three largest digital currency exchanges Bithumb, Korbit and Coinone have added support for Ethereum traders by integrating Ether. In a relatively short period of time, South Korea has become the largest Ethereum exchange market with a $335 mln daily trading volume and 38 percent market share.

In fact, the ETH/KRW pair processes more trades than the ETH/BTC pair, which used to account for over 50 percent of all Ethereum trading.

The largest Bitcoin exchange markets in the world

South Korea has also become one of the largest Bitcoin exchange markets in the world. Although South Korea is currently the fourth largest Bitcoin exchange market behind the US, China and Japan, a month ago, its trading volume and market share was larger than China and Japan and secured its spot as the second-largest Bitcoin exchange market for awhile.

South Korea is becoming a / powerhouse.

– Largest Ethereum Exchange Market
– 4th Largest Bitcoin Exchange Market

South Korean investors within the cryptocurrency market are very easily moved and influenced by the media. Ethereum’s recent Enterprise Ethereum Alliance deals with large conglomerates such as Toyota and JPMorgan have further validated the value of Ethereum to more local investors and have shifted the trend from Bitcoin to Ethereum.

Eyes set on altcoin

More importantly, because Bitcoin has become a conservative asset amongst other cryptocurrencies, investors in South Korea have started to look into altcoins such as Ethereum and Ripple that are supported by local exchanges.

Most South Korean exchanges are funded by multi-billion dollar corporations within the country. Korbit, South Korea’s second-largest exchange, is invested by SK Telecom, the largest telecommunications company in the country.

Therefore, when exchanges add support for cryptocurrencies such as Ethereum and Ripple, immediately, investors dive into altcoins. Particularly, investors that believe they missed Bitcoin’s rally invest in altcoins for large short and mid-term gains.

The demand toward Bitcoin has increased to the point where there always exists a huge arbitrage opportunity for overseas traders. Bitcoin is being traded in South Korea with a premium price of $2,800. That is a 21 percent premium over the global average price and other major markets such as the US.

While it is still possible to purchase Bitcoin outside of South Korea with other options such as credit cards to avoid premium rates, it is difficult to trade large amounts of Bitcoin without being flagged by anti-money laundering systems.

If the current growth rate of the South Korean Bitcoin and Ethereum exchange markets can be sustained over the next few months, South Korea could become a powerhouse for both the Bitcoin and Ethereum markets.