Bitcoin Leads Cryptocurrencies
All-Time Highs Across Board, Scaling Remains Issue

    

Cryptocurrencies across the board have surged

in the past 24 hours to see many reach new all-time highs. The unprecedented rise, which will like fuel speculation of bubble-like behavior, saw Bitcoin $2,400, Ethereum breaks $200 and Litecoin challenge previous highs. The top 10 cryptocurrencies all posted gains in the run-up to press time Wednesday according to data from Coinmarketcap. Further down the charts, other huge movers came out, including a 54 percent rise for Stratis and 68 percent for the Lisk Foundation’s LSK token. At the same time, it is becoming more and more difficult to determine the underlying cause for the continued market buoyancy in both Bitcoin and altcoins.

Talk of a final SegWit deal for Bitcoin may have fueled its rise, yet with details have yet to be ironed out, talk is turning to U-turns from certain members of a group originally plugged by Barry Silbert as agreeing to implement SegWit by September. SegWit is the major preoccupation of the Bitcoin community on social media meanwhile, with price celebrations eschewed in favor of debate about the strength of Silbert’s plan and likely saboteurs. Price-wise, even commentators such as Vinny Lingham have implied the next significant barrier will not be until Bitcoin is within striking distance of $5,000.

Chuck Reynolds
Contributor
Please click either Link to Learn more about – Bitcoin.

As Bitcoin, Altcoins Fall, Coinbase Bows Out Due to Technical Problems

    

Degraded performance by Coinbase

Coinbase, the San-Francisco based digital asset exchange suffered an outage on May 25, 2017, and was still unavailable at the time of writing of this article. The popular digital exchange displayed a message of ‘Service Unavailable’ and informed users that the site was down for maintenance.

Degraded performance by Coinbase

Coinbase informed users on its status page that their website was suffering from a degraded performance. In a tweet, the company revealed, “Coinbase has experienced unprecedented traffic and trading volume this week. As a result, Coinbase.com has suffered a few outages and downgraded performance for some users this week. Our engineering and support teams are working around the clock to restore our site to normal performance.”

Meanwhile Bitcoin and Alt currencies in a sea of red

It should be mentioned that while Coinbase is busy repairing their broken website, Bitcoin was trading lower by 3.37 percent at $2,297 on the Poloniex exchange. Ethereum was lower by 6.69 percent at $171.27 and with the exception of Ethereum Classic, which was up by 4.64 percent at $17, every other major altcoin was in red.

Users lament disappearance during crucial market moments

The lack of a trading platform has left many users in the lurch and they have been complaining on Twitter. @callux tweeted, “You have money. Your fees are astronomical. Buy better infrastructure.” While @ed_baker tweeted, “So let's see: price tanks, Coinbase goes offline. This is at least the third time I've seen this happen since March.” Adding to the complaints @StoicFrog tweets, “ETH dropped to $164 and your crap site failed to allow me to buy. Odd how your site crashes at the most opportune time for sellers & buyers.”

Chuck Reynolds
Contributor
Please click either Link to Learn more about – Bitcoin.

Billy Draper’s Investment Tips – Cryptocurrencies, ICOs,
Bubbles: CT Exclusive

    

The Draper family is well-known to the Bitcoin community.

Tim Draper is one of the most active investors in the Bitcoin ecosystem: back in 2014, he bought 30,000 BTC as part of the government auction and up until now he is said to keep purchasing Bitcoin and to own Ether. Besides, he used his reserve of Bitcoin to fund the startups of Boost VC (with 300 BTC each), his son Adam Draper’s Virtual Reality, Blockchain and Bitcoin venture capital firm.

However, Tim has recently announced his readiness to take one step further in his relationship with the crypto world and participate in ICO – of a company called Tezos, a “new Blockchain platform launched by a husband and wife team with extensive Wall Street and in hedge fund backgrounds.” Not so long ago Boost VC also followed into his footsteps and wrote in a blog post that they were willing to invest directly in ICOs. In an exclusive interview to the Cointelegraph at Arctic15 in Helsinki, Billy notes that for the Drapers ICO is a new opportunity. “In the last month and a half, we have seen a lot of ICOs,” explains Billy Draper, Tim’s son and currently a Partner at Draper Associates. “Since Gnosis, in the last month we have seen six or seven opportunities either asking us to participate, or to market, or do something, but we’ve been still sorting it out.”

Addressing to the crypto community, Billy notes:

“You have changed the whole dynamic of funding. You have taken the best parts of Kickstarter, the best parts of Venture Capital, the best parts of tech community, and you said: Hey, we are going to release a new token, this token is going to be used specifically for making predictions, and all the engineers who are interested in that come buy those tokens, and then you can increase the value of those tokens by building applications on our token.”

Billy Draper is the one responsible for seed-stage investments in companies such as Robinhood, Laurel & Wolf, Tempo Automation and LawTrades. He is in charge of sourcing and driving investments across all sectors, with some slant towards financial technologies, marketplaces and logistics. Prior to DA, he worked in Operations at Facebook and Product Design at ApartmentList. He was named to the 2016 Forbes '30 Under 30' List for Venture Capital. “And because you bought that application, the price or the value of that currency goes up,” he continues. “And there is something so beautiful about that – that is why we are excited about crypto in general and now we are actually starting to think about ICOs.”

Is it going to be Bitcoin and Ethereum forever?

Billy admits that cryptocurrencies are probably relatively small and it’s not the focal point of the fund yet even though they do look for deals in crypto – Bitcoin, Blockchain and ‘whatever the next token is’. “We know that there will be a sort of cryptocurrency revolution, it has already started, this is no longer a science project,” he says. “This is now huge multibillion dollar industry if you take a look at the the market cap of Bitcoin, Ethereum, and now Ethereum is worth a few billion dollars, and people are building token on top of Ethereum.” However, the question that comes – Is this going to be driven, is this sort of the revolution in crypto going to be driven by 25 different cryptocurrencies or a hundred different currencies? Or is it going to be the winner takes it all?

“The reasons why new tokens pop up is because they find problems with the old ones or perhaps not problems, but opportunities to build a currency more focused on solving one problem – governance, or smart contracts, or anonymity,” Billy continues. “Another thing I like about other currencies popping up is that now Bitcoin is the gold standard to buy into the other cryptocurrencies.” The Drapers do believe that there is something behind Bitcoin and Blockchain tech in general. On the one hand, they have inherited connections and wealth from their father and grandfather. But on the other hand, they have been raised with “anything-is-possible” mentality, the Silicon Valley’s spirit of individualism and relentless optimism.

Billy shares his optimism about cryptocurrencies:

“It is not because cryptocurrency is a cool new thing – it is because of there is an incentive structure, it’s because you are taking some of the smartest engineers in the world. The coins that fail are going to be those that don’t have real world applications, the ones that are going to be successful are the ones that fulfill the promise.”

For venture funds, it would be better if cryptocurrencies and ICOs were regulated because that would make investors feel safer. Right now there is no legal ground, so you can’t ask for your money back. “We would definitely be worried about the bubble, but there is also a fear of missing out, and you have to believe in the promise,” Billy notes. “Not necessarily in the whole market of crypto but you have to believe in the promise just like people now believe in the promise of Bitcoin and Ethereum. So yes we would be worried about the bubble but just like everyone. But I don’t think we could live our lives worrying about that.”

How to invest in ICOs and cryptocurrencies, what to consider

In the early 1980s, Tim Draper was exploring the opportunities of Silicon Valley – he had an engineering degree from Stanford and a diploma from Harvard Business School and so he was trying to figure out what to do next. He started his own firm, which later became the founding investor in Baidu and Tesla Motors and backed the likes of Hotmail and Skype. They say it is the ‘Draper luck’.

“If you talk to all the great venture capitalists in the history, all of their failures have been failures to act,” explains Billy. “It is not like I invested into something and It went to zero. Because you can invest in something that goes to zero, but then you can invest in something that goes to thousands, so one X downside, thousand X upside.” He points out that we could always talk ourselves out the investment, just like we are going to talk ourselves out of an ICO, or investing money directly into cryptocurrency, or a platform built around the cryptocurrency, but the potential opportunity we would miss is what would drive us crazy.

Right now ICOs are small projects with sometimes not very experienced teams who are doing mostly marketing, raising up millions of dollars without having a product. You can get the interest really high in the ICO: you do the offering, you limit the number of tokens, you create a supply on the marketplace and then you could drive up the price because of who is involved and who is building but eventually the apps have to be built. What is important is that the promise has to be fulfilled.

“When it comes to ICOs, the criteria would be if you are an investor interested it is not hard to reach out to these people, if they have a white paper, they usually have contact, if they want questions, they want to be challenged,” says Billy. “You need to believe in the team and the team should be aware of that and the team shouldn’t try to hide behind wherever and more people do that. This is very encouraging, they publish a whitepaper saying hey contact us, this is how we are going to do this, how we are going to implement this, this is the background that we have.”

Billy also recommends investors to diversify and participate in several ICOs to make sure their crypto portfolio has some exposure to some other currencies. They should understand how the market is going to function, that this crypto could go to zero, it could fail, it could be dead, or there is a bigger risk, which we don’t typically have to deal with which is it could be stolen. “What I would do is probably work with the crypto expert, who I trust and ask him if he would consult me and make sure I do it in the right way,” he says. “You look at what applications could be developed for it, so why does this exist, what is the specific use for this that can’t be done elsewhere and if those applications were to be built, what is the market size of that, based on the market cap, then you would approach it the way we approach startups.”

Billy concludes by saying that team and real world application are the two criteria for a success, the real world applications that people need to connect. Previously, in the Cointelegraph we have covered several examples of how real world economy can benefit from the crypto economy. The latest case of such type of a project is Primalbase, which claims to transform traditional office rental into a new-generation community-based ecosystem where one can share, sell or rent out high-quality office spaces using Ethereum and Waves-based digital tokens. In other words, it’s distributed workspace for the tech community in the manner of WeWork but in crypto tokens.

Billy Draper says about it:

“That’s cool, they found a real world application, and that’s what we want to see – we don’t want to see more coins in the world. That is a game-changing thinking, the same with real estate. Renting out these tokens? That is how you start the real revolution, that’s how things will go from Bitcoin sort of still crypto community which is getting bigger.”

We end our conversation with Billy with asking for a general advice about cryptocurrency investment. And he tells us that the best way to start with is to learn about cryptocurrencies that you think are the most interesting, the specific ones. Then you should start trading them, in some small way – you don’t have to start with a huge million dollar investment in a cryptocurrency. You should start to feel and understand the volatility of the market, to understand what drives the market and how you can play into that.

He concludes:

“I would suggest just like with anything – make sure you know what you are getting into, so there are no surprises, and if the token goes to zero, that’s the risk to take. And on the upside make sure you are investing in a token you believe in. If you are trying to pick winners, make sure you pick winners that you feel very comfortable about what they are going to develop.The key is user education, just make sure you understand what you get into, there is a certain risk.”

Chuck Reynolds
Contributor
Please click either Link to Learn more about – Bitcoin.

Will Bitcoin ETF Ever Be Accepted by US Regulators?

    

One of the biggest questions most Bitcoin enthusiasts would have about the cryptocurrency

is whether or not Bitcoin exchange traded funds will be regulated by the US or other authorities abroad. While Bitcoin and other cryptocurrencies have already gained a lot of attraction from investors all over the world, many institutions such as government agencies, banks and other entities have yet to accept the digital currency. According to Ryan Radloff, head of investor relations at XBT Provider, it is really just a stalemate between banks and regulators, wherein banks will only start accepting the cryptocurrencies when the regulators do. Though this is the case for most countries, there are several countries such as Sweden whose Nasdaq has already included cryptocurrencies in their public exchange.

Bitcoin status in the US

Bitcoin’s status and classification as per the US regulators have still not been decided as of yet. The SEC has not made any comment in classifying Bitcoin yet and it seems like it will not happen anytime soon. The SEC has already rejected two entities that aim to provide Bitcoin ETFs to potential investors. From the legal side, it seems as though Bitcoin is not doing very well due to this hurdle. According to Radloff, it doesn’t look like Bitcoin will be accepted anytime soon following the two rejections that the SEC made, though this may all change in the future if the SEC becomes convinced by the cryptocurrency.

Bitcoin in other countries

Although the US is very stern with their decision on the Bitcoin issue, there are other countries that seem to be more open to the cryptocurrency. Other countries such as Sweden, Switzerland, Japan and Italy have accepted Bitcoin in their public exchange and already have regulations regarding it. Radloff also stated that in the future, he is expecting more countries to accept cryptocurrencies.

Notably, there are exchange-traded Bitcoin products in Europe, but they aren't ETFs, they are exchange-traded notes, which are similar to ETFs but carry different risks. However, European investors and regulators are more accustomed to ETNs, said Radloff. The COINXBE and COINXBT ETNs are listed on the Nasdaq Nordic. Another ETN-style Bitcoin product was recently delisted from the Gibraltar Stock Exchange. Nick Cowan, managing director of the latter exchange, said he's expecting two similar Bitcoin products to be listed soon, as well as a third based on a basket of several cryptocurrencies.

Convincing the US

While the market is still relatively new, it has already gotten a lot of attention from investors who have drawn a lot of data from it. However, the only problem would be the government regulations and licenses. A report by the University of Cambridge’s Center for Alternative Finance stated that 46 percent of exchanges are not government regulated. This means that the other 54 percent are not operating with licenses.

While it may be difficult to convince US regulators to accept the digital currency, it is still possible as the US is looking for transparency and stability before they consider allowing it. The reason is that it involves a lot of money and it is quite a risk on their end. Nevertheless, it would seem as though the US will not be one of the next countries to accept the cryptocurrency. However, it will only be a matter of time before this event happens. When the US sees a lot of other countries doing it, they will most likely join in the fray.

Chuck Reynolds
Contributor
Please click either Link to Learn more about – Bitcoin.

BitConduite: Visualizing and Analyzing Activity on the Bitcoin Network

    

BitConduite is a visual analytics tool built to explore the activity of Bitcoin users over long-term periods.

Pseudonymous nature of transactions

With its position as the first and largest cryptocurrency, Bitcoin is attracting a plethora of different players among which are investors, governments, economists and researchers from all around the world. Transactions in Bitcoin are stored in an immutable distributed ledger that is accessible to anyone. However, this open data can be challenging to make sense of given its pseudonymous nature. Indeed, while transaction details such as the amount, the time and the sender and receiver addresses are publicly disclosed, no personal information is revealed on the identities of participants. Therefore, this abstract data does not lend itself easily to an exploratory analysis of the network actors. The increasing volume of transactions in Bitcoin is an additional challenge hampering the study of this network.

Analyzing the Bitcoin network

To visualize its billions of transactions, a team of researchers composed of Christoph Kinkeldey, Jean-Daniel Fekete and Petra Isenberg, are developing a tool to identify entities on the network from their public addresses, whether these entities are individuals or organizations. Dubbed “BitConduite,” this tool uses the network’s topology to estimate which addresses may belong to the same entity and classifies them following their activity patterns.

Since Bitcoin is used in diverse ways, from an investment asset to an illegal shopping payment system, the tool would allow us to know more about the main reasons behind Bitcoin use. Furthermore, while many argue Bitcoin is an influencing factor in world events, it is very difficult to assess such hypotheses. In 2012-2013, the financial crisis in Cyprus saw nervous cash-holders invest in Bitcoin to counter their banking system and be able to freely move their assets out of the country. Countries in crisis are no doubt raising the value of Bitcoin, but only a long-term analysis could shed light on the exact role of the cryptocurrency.

How does it work?

To make such an analysis possible, the researchers behind BitConduite extract raw data from the Bitcoin Core client and store it in a MongoDB database. This database is then tailored to visualization by using a column-oriented MonetDB database. Finally, input heuristics are applied to derive entities from pseudonymous addresses and cluster them. Analysts working with this tool can filter out entities with certain attributes, group the similar ones based on the factors of interest and visualize the number and volume of transactions of each cluster on a timeline. The development of the BitConduite tool is an ongoing work and we are very likely to see more analytics tools of this genre created to explore the use of other cryptocurrencies.

Chuck Reynolds
Contributor
Please click either Link to Learn more about –
TCC-Bitcoin.

Ben Ainslie's Great Britain are out of the America's Cup after New Zealand earned a 5-2 semi-final win.

americas cup 2017

Leading 3-1 overnight in the best-of-nine contest, New Zealand won the first of Thursday's three scheduled races to take them to the brink.

And although Britain won the next race, New Zealand took the third.

"Three and a half years ago a few of us were sitting around a table in London – what we have we have achieved is incredible," said Ainslie.

"I was really proud of the way the team sailed today. We will be back next time and we will be stronger."

It was a victory to savour for New Zealand after their catamaran capsized during racing in high winds on Tuesday.

After Wednesday's races were postponed because of high winds, New Zealand made a strong comeback to go 4-1 up on Thursday.

Great Britain had a 26-second lead at the first mark before their opponents came back to secure a 31-second victory.

Britain managed to hang on with a near-perfect win in the next race after getting off to a strong start and, this time, maintaining their lead and matching their opponents for speed.

However, New Zealand's class shone through as they put Tuesday's troubles behind them.

"We struggled coming into this with a lack of speed but everyone has dug so deep to get us more competitive," added Ainslie.

The Kiwis will take on Sweden or Japan in the play-off final. Sweden need just one more win after a dramatic comeback.

They trailed Japan 3-1 at the start of the day but won all three races on Thursday to take a 4-3 lead.

Analysis – 'Hugs, tears and cheers'

BBC Sport's Tony Husband in Bermuda:

There were hugs, tears and cheers as Great Britain sailed back into the dockyard for the final time. They were facing up to the realisation that this 21st British challenge for the 'Auld Mug' had gone the same way as the others.

Britain's wait to bring sport's oldest trophy home goes on for at least another two years. Amid the despondency, there was a positive message from Ben Ainslie.

The man on whom so much rested certainly isn't the type to hide. He strode up to BBC Sport to give his first interview, despite the obvious pain that this deeply personal challenge had failed only minutes before.

"We will be back," was the emphatic message. In reality, he had probably known this moment was coming for a while.

Since the high of winning the World Series pre-qualifying event, it's been evident that the British bid was behind its rivals. Boat speed and control was often cited as an issue; practice races hadn't been encouraging.

They were also inconsistent throughout this regatta. Ainslie had proved almost unbeatable in the starts, but too often their rivals would reel them in.

The Kiwis are the strongest challenger, and despite dropping one race to Great Britain on Thursday, they showed no outward scars after Tuesday's dramatic capsize.

The inquest will be thorough and probably painful for Britain, but Ainslie seems far from done with the America's Cup.

What happens next?

Holders Oracle Team USA await the winners of the challenger final in the America's Cup.

The first to seven points wins the America's Cup, or the Auld Mug as the trophy is known, with a possible 13 races to be sailed on 17-18 and 24-27 June.

The America's Cup, the oldest competition in international sport, was first raced in 1851 around the Isle of Wight and has only been won by four nations.

If you believe that my message is worth spreading, please use the share buttons if they show on this page.

Stephen Hodgkiss
Chief Engineer at MarketHive

markethive.com


What Is Inbound Marketing?

Inbound marketing is an approach focused on attracting customers through content and interactions that are relevant and helpful — not interruptive. With inbound marketing, potential customers find you through channels like blogs, search engines, and social media. Unlike outbound marketing, inbound marketing does not need to fight for potential customers attention. By creating content designed to address the problems and needs of your ideal customers, inbound marketing attracts qualified prospects and builds trust and credibility for your business.

The Inbound Methodology

The best way to turn strangers into customers and promoters of your business.

The Proven Methodology for the Digital Age

Since 2006, inbound marketing has been the most effective marketing method for doing business online. Instead of the old outbound marketing methods of buying ads, buying email lists, and praying for leads, inbound marketing focuses on creating quality content that pulls people toward your company and product, where they naturally want to be. By aligning the content you publish with your customer’s interests, you naturally attract inbound traffic that you can then convert, close, and delight over time.

How to Interpret the Graphic

Along the top are the four actions (Attract, Convert, Close, Delight) inbound companies must take in order to obtain visitors, leads, customers, and promoters. Along the bottom are the tools companies use to accomplish these actions. (Note the tools are listed under the action where they first come into play, but that’s not the only place they’re applicable! Several tools, like email, can be essential in several stages of the methodology.)

Stages of the Inbound Methodology

 Create targeted content that answers prospects' and customers' basic questions and needs, then share that content far and wide.
 Lifecycle Marketing

Promoters don’t just materialize out of thin air: they start off as strangers, visitors, contacts, and customers. Specific marketing actions and tools help to transform those strangers into promoters.

 Personalization

Tailor your content to the wants and needs of the people who are viewing it. As you learn more about your leads over time, you can better personalize your messages to their specific needs.

 Multi-Channel

Inbound marketing is multi-channel by nature because it approaches people where they are, in the channel where they want to interact with you.

Integration

Content creation, publishing and analytics tools all work together like a well-oiled machine – allowing you to focus on publishing the right content in the right place at the right time.

Chuck Reynolds
Contributor
Please click either Link to Learn more about –
Inbound Marketing.

DAO Casino wants to use cryptocurrency to disrupt online gambling

Imagine an online gambling ecosystem that is decentralized, meaning that it cuts out the typical middleman between a game-maker or betting operator and the player or bettor. That’s the pitch of Russian company DAO.Casino, a decentralized platform for online gambling operators that runs on
the Ethereum blockchain.

                  In its white paper on the developer site Github, DAO.Casino
says it can solve common headaches of online gambling that afflict both game developers and game players, such as: fraud risk; hidden fees; high cost of entry for game developers; operational overhead; player access to funds; player withdrawal delays; and general lack of trust. If that sounds like a mouthful, let’s take a step back. In the cryptocurrency world, much of the press and attention right now is around bitcoin, since the price of bitcoin is flying: it’s up 200% in 2017 so far. But the price of a rival cryptocurrency, ether, has seen a bump as well: it’s up 174% in the past month, to $263. Ether is the currency of the Ethereum network, which is a blockchain for smart contracts.

Thereum smart contracts

While bitcoin runs on the bitcoin blockchain, a decentralized, permissionless ledger—and blockchain technology originated with bitcoin in 2009—Ethereum runs on its own blockchain specifically designed for smart contracts. Smart contracts are coded agreements that live in a permanent address on the Ethereum chain. These agreements can interact with other contracts to automatically enact functions. In other words, “smart contracts” is a fancy way of saying “computer programs.” For example: on Ethereum, we could exchange the title deed to a car, directly from seller to buyer. In a recent Cognizant survey of 578 financial service firms, 78% of respondents said their firm is exploring multiple blockchain platforms—of those, 49% listed the bitcoin blockchain, 42% said Ethereum.

While bitcoin is soaring as a speculative investment, there aren’t yet obvious mainstream uses for the currency beyond trading and holding it; many in the industry await the “killer app” for bitcoin. There is arguably more excitement right now around the uses of Ethereum, since it was created specifically for smart contracts (not for the currency, which is just an incentive token for developers). TechCrunch writes that Ethereum is “poised to overhaul open-source development.” And Ethereum founder Vitalik Buterin (just 23 years old) met with Vladimir Putin this week, who praised Ethereum.

DAO.Casino and initial coin offering

That brings us to DAO.Casino, one of the many startups that believes it can solve a problem using Ethereum. On June 29, DAO.Casino will launch an ICO (initial coin offering), a popular new way of raising money for cryptocurrency startups in which investors buy up the startup’s own coin and pay for it with a more established coin. Ethereum did its own ICO in 2014, in which investors bought ether using bitcoin. An ICO typically lasts for a month. Think of an ICO as the equivalent of a VC round for cryptocurrency startups. In DAO.Casino’s ICO, it will sell BET, its own token, in exchange for ether.

Just don’t associate DAO.Casino with The DAO, a leaderless, decentralized network that launched in May 2016 (via an ICO that exchanged tokens for ether) as a platform for Ethereum-based projects and was quickly hacked, one month later, to the tune of $50 million. The entire Ethereum blockchain had to perform a split known as a “fork” in order to restore all the funds stolen in The DAO hack.

DAO.Casino is not an actual casino itself, but an open protocol for online gambling companies (like an online casino, blackjack game operator, or sports betting site) to build on. (DAO.Casino will also build its own branded games.) It isn’t aimed at the end user—if an online betting site were to use it, the bettor wouldn’t have to know or see that they’re using a system built on Ethereum. (I could even develop my own gambling site on top of DAO.Casino’s protocol and pay out users in BET tokens, but rename them Dancoins.) The company’s hope is that online betting sites will integrate with its network to offer games without the casino, a middleman that takes a big cut and may not always be trustworthy.

Chuck Reynolds
Contributor
Please click either Link to Learn more about –
TCC-Bitcoin.

 

Save

    

If you're interested in getting invested in the digital currency world,

now seems to be as good a time as ever. Bitcoin has seen repeated record-setting price levels, and a host of other digital currencies are becoming increasingly popular around the globe. And yet, there are some reasons why even seasoned investors may be reluctant to get involved in direct investments relating to cryptocurrencies. Fortunately for those people, there is an exchange-traded fund focusing on Bitcoin in particular that can simplify the process. It is called the Bitcoin Investment Trust (GBTC) and it is provided by Grayscale Investments. Here are some of the basic details about the new ETF and its relationship to the digital currency itself.

Significant Returns Possible, But Are They Likely?

The Bitcoin Investment Trust sported a tremendous 248% increase in the month of May. This far surpasses the gains of 72% overall for the Bitcoin-U.S. dollar currency cross. With that figure in mind, investors may be jumping to get access to GBTC shares. However, there are other factors to consider as well. First, May's performance seems to be a relative anomaly for the ETF. For the three months prior to May, Bitcoin performance superseded ETF performance two months. This suggests that the two are actually more neck-and-neck than May's figure would suggest. Second, investors looking to buy into GBTC should keep in mind that the shares of the ETF are currently trading at more than double the cost of Bitcoin itself, according to a report by Business Insider.

Why the Huge Premium for GBTC?

Potential investors are likely wondering why GBTC shares can be found at such a high premium over Bitcoin. The issue seems to lie in supply and demand. While Bitcoin demand has skyrocketed, GBTC has kept its shares outstanding close to 1.7 million in the two years that it has existed. In fact, the ETF seems unlikely to change the number of total outstanding shares in the future, according to the company's head of research, Ihor Dusaniwsky. He explains that "with the operational risk of buying and holding actual Bitcoins to support ETF creation very high, and difficult and expensive to insure, it is unlikely that GBTC's outstanding share amount will climb above 1.7 million anytime soon."

It is useful to note that GBTC didn't always seem this expensive in comparison with Bitcoin. Before Bitcoin's price spiked in the past several weeks, the ETF traded on an average premium of just 10% above the cryptocurrency in 2017. The issue seems to have come about when Bitcoin's demand blew up and GBTC's supply did not change. As Bitcoin continues to spread further into the financial world, it will be interesting to see where GBTC's share prices go as well.

Chuck Reynolds
Contributor
Please click either Link to Learn more about – TCC-Bitcoin.

New Bitcoin-Inspired Project From Gavin Andresen, Former Bitcoin Lead Developer

    

Charles Dearing is a veteran tech journalist with over 15 years of experience

using words to move people to act. He has written for various publications such as ProBlogger, Big Think, Apps World, to name a few. You may connect with him on Twitter. Gavin Andresen, known as the former lead developer of Bitcoin, has recently broken his long silence on his Twitter account with the following tweet mentioning a recent project that is known as the Random Sanity Project.

Security breaches

While the Random Sanity Project’s (RSP) main vision is to secure the Internet by verifying sources of randomness that comes from different entities, Andresen also aims to solve the problems that monetary software systems like cryptocurrencies experience due to the lack of available data on the Internet.

Andresen also mentioned that he is well aware of the importance of the security of cryptocurrencies like Bitcoin. Once the security has been breached, people will lose money which will result in a lot of users reacting violently. Andresen makes this claim as he has been keeping tabs on Bitcoin and has observed a lot of system problems that have stemmed out, such as faulty data generation. Even the smallest mistake and small breaches like these have already negatively affected the whole Bitcoin community.

Such security breaches were seen in an incident in August 2013, where Bitcoin wallets operated on Android became vulnerable to security breaches. Two years later, in May 2015, there was another fault in the Bitcoin wallet system which caused a lot of Bitcoin investors to lose significant amounts of money. This was caused by the random number generator which provided insufficient data to be used with Android operating systems. This is the exact thing that the RSP project is designed to address. While the RSP is beneficial to Bitcoin, as it will aid in preventing potential security breaches, it is not directly associated with Bitcoin at all. Rather, it is an independent project for helping digital monetary systems.

Status of the RSP project

Andresen has already been working on this project for more than six months and is steadily making progress. When the project is complete, Andresen states that he would not want to make it into a profit generating project. Rather, he wants to make it a free system like Linux wherein there will be a sponsor behind it.

Verification system

The RSP works as a verification system that will tell the user whether random bytes are “true” or “false.” The system does that by determining whether the numbers are random or not. If they are random, they are classified as “true.” This is a very important aspect of how systems work their data because if bytes lose their randomness, the data could become invalid. There are, in fact, a lot of factors that can affect randomness such as software and system upgrades. Other factors include work from a third party person or a breach. The RSP aims to check for randomness in the bytes so that developers will be able to prevent any disasters in the system. This is beneficial to a lot of people, especially those who deal with investing in digital currencies like Bitcoin.

Chuck Reynolds
Contributor
Please click either Link to Learn more about –
TCC-Bitcoin.