first cash now gold

First Cash, Now Gold? Another Bitcoin Hard Fork Is on the Way

Bitcoin, bitcoin cash, bitcoin gold?

There could be as many as four cryptocurrencies bearing the bitcoin name if a small group of miners and developers carry out a planned fork of the blockchain this month.

Styled as a rebellion of sorts, bitcoin gold aims to follow a similar launch plan as bitcoin cash – the blockchain that split from bitcoin this summer by way of a "hard fork." The idea of the project is to release an improved protocol, one that will challenge bitcoin cash in particular, and details are now starting to come come into focus.

Led by Jack Liao, CEO of Hong Kong mining firm LightningASIC, bitcoin gold is slated to launch on October 25, with its cryptocurrency being opened to exchanges on November 1.

Still, while whispers of the event are just beginning to spread, the importance of the project appears up for debate. Given that bitcoin cash produced an ultimately smaller bitcoin network, not to mention a cryptocurrency that's worth about 12 percent as much as bitcoin at press time, most seem to view the plan as another distraction in an already divided community.

For one, bitcoin gold looks like it could be even smaller that bitcoin cash, at least in that not as many miners seem to support it.

In remarks, BTC.Top founder Jiang Zhuoer and ViaBTC CEO Haipo Yang – two early champions of bitcoin cash – went so far as to downplay bitcoin gold as insignificant.
 

'Decentralized again'

But while those in the know might be skeptical of bitcoin gold, it does have a goal that many in the community may find attractive: creating a truly decentralized bitcoin.

Most notably, the developers behind the network hope to open up mining to more participants by replacing bitcoin's mining algorithm with one that will enable it to be mined with graphics cards. The idea is to make big miners – sometimes controversial figures on the network – less relevant.

"Bitcoin gold will implement a proof-of-work change from bitcoin's SHA256 to Equihash, a memory-hard algorithm that is ASIC-resistant and optimized for GPU mining," explained pseudonymous bitcoin gold developer "The Sorrow."

That the plan is being hatched in China, long the hotbed of bitcoin mining, only adds another layer to the story. Liao, whose mining hardware largely focuses on the litecoin network, is seen as one of the few voices domestically that can challenge the established order.

Yet, Liao was quick to name one mining firm in particular, Bitmain, as the reason that more bitcoin users should support the idea. A mining company that has been at the center of bitcoin drama over the last year, critics have long argued that the firm has too much of an influence over the network.

Still, creating a network that grows so popular as to remove miners is easier said than done, and some are skeptical that this would lead to the end goal that bitcoin gold advocates desire.

"GPU mining can't prevent centralization. GPU [markets] are controlled by Nvidia and AMD," Zhao Dong, a cryptocurrency trader and investor, argued in response to the plan.

Liao, however, argued the accessibility of the companies' products means the distribution of hashing power might evolve differently.

 

Bitcoin gold's unknowns

Again, though, even project leaders admit many of the details around the hard fork are fuzzy.

Bitcoin gold's pseudonymous lead developer "h4x" said that the project is "still evolving" and details such as exact block height of the hard fork are still up for discussion.

According to the original website text, bitcoin gold was even planning an initial coin offering (ICO) by which 1 percent of the bitcoin gold coins would go to the developer team, but these details have since been removed.

One thing is clear though about the funding: because of the nature of the split, every bitcoin user at the time will have an equal amount of bitcoin gold associated with their private key.

"It is a minimalist fork of the Bitcoin Core codebase in the spirit of litecoin – only a few conservative modifications," said h4x.

H4x went on to describe bitcoin gold in more abstract biological terms, arguing that it tests how well hard forks work and if they benefit the ecosystem.

He said:

"Organisms derive benefits from creating offspring. With bitcoin gold we are conducting an experiment to see if that principle holds true in the world of blockchains."

And this sentiment is largely in line with developers who have predicted that more bitcoin forks similar to bitcoin cash will come forth in the future.

After bitcoin cash forked earlier this summer, for example, Lightning Network developer Tadge Dryja argued that more forks would spring up, but for another reason: money.

With bitcoin gold in the works and another hard fork slated for November, it seems that prediction is slowly becoming reality.

 

Sep 27, 2017 at 08:00 UTC by Alyssa Hertig

 

Posted by David Ogden Entrepreneur
David Ogden Cryptocurrency entrepreneur

Early bitcoin investor Palihapitiya declares 'nobody can stop it'

Early bitcoin investor Palihapitiya declares 'nobody can stop it'

  • Social Capital's Chamath Palihapitiya was early in both Facebook and bitcoin and continues to back both.
  • "The idea that the government can put curbs on this is actually pretty specious," he said in response to JPMorgan Chase CEO Jamie Dimon's criticism of bitcoin.

Investors who followed Social Capital's Chamath Palihapitiya into the early stages of two investments he advocated would have made an awful lot of money.

Palihapitiya was early in both Facebook, the ubiquitous social network, and bitcoin, the disruptive crypotcurrency that has sharply divided investors who continue to argue over its legitimacy.

Even with the major gains both have made, Palihapitiya remains hot on tech stocks in general, and bitcoin in particular. The digital currency, despite some volatile times, has soared nearly 300 percent this year.

That has come even though JPMorgan Chase CEO Jamie Dimon has called it a fraud that is doomed to fail.

"Nobody can stop it because nobody can control it," Palihapitiya said in an exclusive CNBC PRO interview at the Delivering Alpha conference on Sept. 12. "The idea that the government can put curbs on this is actually pretty specious."

Rather than debate its status as a currency or its use for nefarious purposes, he said there should be a broader discussion about how to put it to better use.

"As far as I'm concerned, the genie is out of the bottle," he said. "Now the real question is how can we productively use it to solve some of society's issues around the financial services infrastructure."

 

Jeff Cox | @JeffCoxCNBCcom

 

Posted by David Ogden Entrepreneur
David Ogden Cryptocurrency  entrepreneur

Bitcoin's price is spiking by 7 percent as traders shake off China fears

Bitcoin's price is spiking by 7 percent as traders shake off China fears

The price of bitcoin is up nearly 300 percent year to date.

Bitcoin is still under the $4,000 level, which it broke through after JPMorgan CEO Jamie Dimon said on Sept. 12 that the cryptocurrency is a "fraud" that will eventually blow up.

 

The price of bitcoin rose sharply on Monday with its price spiking up 7 percent midday, according to CoinDesk market data.

The price of the cryptocurrency is up nearly 300 percent year to date.

Bitcoin's price is spiking by 7 percent as traders shake off China fears

Bitcoin is still under the $4,000 level, which it broke through after JPMorgan CEO Jamie Dimon said on Sept. 12 that the cryptocurrency is a "fraud" that will eventually blow up.

In addition, recent reports said regulators in China have ordered bitcoin exchanges to close hurt the digital currency's price.

"In my opinion, the markets overreacted to the China news. In the short term, it was bad news, but long term the fundamentals are unchanged," William Mougayar, author of "The Business Blockchain," wrote in an email.

-CNBC's Evelyn Cheng contributed to this report

Author: Tae Kim |

 

Posted By David Ogden Entrepreneur
David Ogden Cryptocurrency Entrepreneur

Why most ICO's fail

Why Most ICO’s Will Fail: A Cold Hard Truth

In this guide from Blockgeeks, you will learn why most ICO’s Will Fail.

On June 12, 2017, an Ethereum based called Bancor held its ICO. It raised $153 million in 3 hours. No, you are not reading it wrong, 153 million…..in 3 hours!!!

If that doesn’t get your brain melting, then how about this? The BAT ICO $35 million in 30 seconds!!! That’s near $1.2 million per second! And if that still doesn’t get your jaw dropping, then how about this? Have you heard of UET? UET had an ICO which raised $40,000 in just 3 days. Admirable if not particularly mind-blowing. Why do we bring it up after talking about Bancor and BAT?

Well, UET stands for “Useless Ethereum Token”, it is a “joke coin”.

Here is the sales pitch that they used, “UET is a standard ERC20 token, so you can hold it and transfer it. Other than that… nothing. Absolutely nothing.” And they raised $40,000 in 3 days! Welcome to the crazy world of ICOs! There is no doubt that ICOs have changes the financial landscape over the past 2 years. In the first half of 2017 alone they raised over $1 billion!

However, all these insane success stories tend to make us look at facts with rose-tinted glasses. The fact is, that around 99% of all ICOs out there will fail. And that’s not exaggerated doom and gloom, over the last few years, thousands of cryptocurrencies have been created and over 90% of them have failed. And the fact also remains that given the insane success of most ICO’s, scammers are flooding the market creating bogus dapps/coins to get their fill of the ICO pie and effectively create an “ICO bubble”.

So, keeping all this in mind let’s aim to answer this simple question: “Why are most of the ICOs going to fail?”

A quick disclaimer before we continue

Before we continue, we want to make something very clear. We don’t “hate” on ICOs. We believe that ICOs are truly revolutionary and will continue to evolve and will become an amazing vehicle for developers, entrepreneurs and investors who are looking to innovate and change the world by just showing their concept aka a whitepaper. (Well, we hope more than just a whitepaper) That’s truly brilliant. 🙂

With that being said, let’s start.

Why Most ICO’s Will Fail: A Cold Hard Truth

So, how does an ICO work?

Firstly, the developer issues a limited amount of tokens. By keeping a limited amount of tokens they are ensuring that the tokens itself have a value and the ICO has a goal to aim for. The tokens can either have a static pre-determined price or it may increase or decrease depending on how the crowd sale is going.

Tokens are basically native currencies that can be used in an environment (think of the arcade coins that you needed to play games in an arcade) or they give their owners various rights inside the native environment (Think of the wristbands that certain nightclubs use which entitles you to get a certain number of free drinks).

The transaction is a pretty simple one. If someone wants to buy the tokens they send a particular amount of ether to the crowd-sale address. When the contract acknowledges that this transaction is done, they receive their corresponding amount of tokens.

So, that’s a general idea on how ICOs works. But then why do most ICOs fail. The reason why most ICOs fail is that most developers/entrepreneurs do not pay any attention to the three pillars that make an ICO:

  • Cryptoeconomics.
  • Utility.
  • Security.

Pillar #1: Cryptoeconomics

It is funny how most developers forget the “cryptoeconomics” of their ICOs. There are two words that makeup cryptoeconomics: “cryptography” and “economics”. While most developers pay attention to the cryptography part, they hardly pay any attention to the “economics” part. As a result of which, it is very rare to find a token whose economic skeleton has been properly and thoroughly mapped out.

In order for the token to be decently valuable in the long run, there must be sufficient demand for it but that is not what is usually seen in the ICOs. What is seen is unsustainable token inflation which largely happens because of flawed economic models and the greater fool theory (more on that in a bit).

For these permanently inflationary tokens, their demand must always outpace their inflation for them to be valuable in the long run, which more often than not creates a Ponzi Scheme like scenario.

Before we go into all that, however, we need to understand where the fundamental problem of most ICO economic model lies.

One of the biggest advantages of ICOs is that anyone can come and raise money for their concept…not a finished product, a concept. There is still a long way to go before that concept can become a product and as with anything, there is a 90-95% chance that it will be a failure.

However, many of the early adopters of ICOs have made a killing because of the low entry and the high profit. As a result of this everyone else developed a massive case of FOMO (Fear Of Missing Out) and started pouring millions into concepts that didn’t even have an alpha version ready. Look at this, for instance, ICOs made nearly $800 million in the second quarter of 2017 alone! Compared to that, Venture capital made just $235 million:

These are people who have little to no idea about how the blockchain works, they are just putting in money to make a quick buck. Seeing this trend, the developers shifted their focus. Instead of making Dapps/currencies which added something new and unique to the ecosystem, they started making products for the ICO.

Their end goal became: “Build a flashy enough whitepaper to get good money in ICOs”. Because of this rampant speculation and very little due diligence, the “Greater Fool Theory” came into play.

What is the Greater Fool Theory?

The Greater Fool Theory is an economic theory which states that the price of an object increases not because of the value that it brings in but because of the irrational beliefs attached to it. Art is a great example of the greater fool theory.

So let’s apply the same to ICOs. You have a bunch of dapps and currencies coming up which are bringing in nothing new to the ecosystem. However, because they have been hyped up so much and there so many ignorant investors around, their value increases anyway, and as a result, the tokens face an inflation.

So, let’s recap what we have learned so far:

  • Investors are investing millions into concepts that don’t even have an alpha version of their product.
  • Investors are desperate to put their money in because they think that ICOs are a way to get rich quick.
  • In order to cash in on this, developers are creating products more aimed towards ICOs than to give actual value.
  • Because of the “Greater Fool Theory.” the value of the tokens gets inflated

If this sounds suspiciously like a bubble then yes, you are right and the thing is, we have been here before, we have seen this play out. The whole ICO situation is scarily reminiscent of another wave that swept us in the late 90’s. They say that those who are not aware of history are bound to repeat it. So let’s do a quick history lesson and turn back the clocks.

 

The Dot-Com Bubble

Around 1997, the internet became big and tech companies began to emerge everywhere. Investors started putting in their money and flipping their investments into huge sums. Eventually, everyone who saw this started getting major FOMO (fear of missing out) and they began giving away their money to companies without even having any idea as to whether the business had the potential to work or not.

Common sense went out of the window and every random internet business was making a killing in the IPOs. Warren Buffet noted that:

“The fact is that a bubble market has allowed the creation of bubble companies, entities designed more with an eye to making money off investors rather than for them. Too often, an IPO, not profits, was the primary goal of a company’s promoters.”

BOOM!

He hit the nail right on the head, most of the companies that got millions from their investors failed and some turned out to be nothing more than scams. Eventually, the bubble burst in 2002. Companies crashed and lost millions within a year. One of the most infamous examples of this is Pets.Com which lost $300 million in just 268 days!

The parallels between the ICO bubble and the dot-com bubble are a bit frightening. Much like dot-coms, the ICOs have attracted a lot of investors who don’t want to miss out on the gold rush. Much like the dot-coms ALL the investing is done purely from speculation. You have to realize that most of the companies that you are investing in, in ICOs barely have anything ready. Most of them don’t have the alpha version of their end result, it is all based on speculation and the potential of the project.

As with anything, most of these projects will fail to get the end results. The reason why the Ethereum ICO worked so wonderfully was that it had a dedicated and driven team of talented developers who were a day in and day out to make it a success, same with Golem.

The parallels are very apparent and it can get real scary thinking about it. But we are not market experts. All we can do is speculate. We don’t know whether we are living in the “ICO bubble” or not, nor do we know whether it is a bubble that is going to pop.

What we do know is that unless developers stop with their “get rich quick schemes” and actually pay attention to launching ICOs which bring in true value and has a concrete economical skeleton, then we will be seeing patterns which are depressingly similar.

 

Pillar #2: Utility

What is the definition of Utility? Utility means the total satisfaction that is received by the consumption of the goods or services. Most of the ICOs do not maximize their token utility. The tokens should be absolutely integral to the ICO and must increase the overall value of your final product.

If you are an ICO developer, then ask yourself this question: If you take away your token does your business fall apart? If the answer is no, then you don’t need a token. There are only a few cases that make sense to tokenize. Most people get tokens only so they can “HODL” it and buy more bitcoin and ethereum in the future! Is that all that your tokens are worth?

If you do use tokens for your business, then you need to completely understand its role and maximize its utility. You have to understand that tokens can be multi-purpose tools which can bring in a lot of “oomph” to your business. Your business model should be such that you are exploiting your tokens to the maximum possible limit.

(Before we continue, we would like to give shoutouts to the inimitable William Mougayar and Kyle Samani for their brilliant work and research.)

As William Mougayar points out in his Medium article, there are three tenets to token utility and they are:

  • Role.
  • Features.
  • Purpose.

These three are locked up in a triangle and they look like this:

Each token role has its own set of features and purpose which are detailed in the following table:

Let’s examine each of the roles that a token can take up:

  • Right

By taking possession of a particular token, the holder gets a certain amount of rights within the ecosystem. Eg. by having DAO coins in your possession, you could have had voting rights inside the DAO to decide which projects get funding and which don’t.

  • Value Exchange

The tokens create an internal economic system within the confines of the project itself. The tokens can help the buyers and sellers trade value within the ecosystem. This helps people gain rewards upon completion of particular tasks. This creation and maintenance of individual, internal economies is one of the most important tasks of Tokens.

  • Toll

It can also act as a toll gateway in order for you to use certain functionalities of a particular system. Eg. in Golem, you need to have GNT (golem tokens) to gain access to the benefits of the Golem supercomputer.

  • Function

The token can also enable the holders to enrich the user experience inside the confines of the particular environment. Eg. In Brave (a web browser), holders of BAT (tokens used in Brave) will get the rights to enrich customer experience by using their tokens to add advertisements or other attention based services on the Brave platform.

  • Currency

Can be used as a store of value which can be used to conduct transactions both inside and outside the given ecosystem.

  • Earnings

Helps in an equitable distribution of profits or other related financial benefits among investors in a particular project.

So, how does this all help in token utility?

If you want to maximize the amount of utility that your token can provide then you need to tick off more than one of these properties. The more properties you can tick off, the more utility and value your token brings into your ecosystem. If the role of your tokens cannot be clearly explained, or if it doesn’t really tick off more than one of the roles given above, then your token doesn’t have any utility and you can do without it.

Now, let’s move onto another interesting concept called “Token Velocity”.

Token velocity in simple terms means: Are people going to hold on to the tokens for long-term gain or sell it off immediately? This is a problem with most ICO and token structures because they are being treated more as a vehicle for liquidation than as a store of long-term value. In fact, regarding this, Willy Woo did an interesting case study.

He plotted the performances of 118 coins, from the first day of their inception to the day he made the graph. His only qualification was this; the coin should have reached a market cap of at least $250,000 in any one year of its existence. Let’s see what he came up with:

Image courtesy: WooBull

See that red line soaring triumphantly over everyone else? That is bitcoin. It is the only crypto that has performed consistently and grown from strength to strength. (The blue line above the bitcoin line is a statistical aberration according to Woo).

In fact, Woo’s research becomes more interesting when you break it down even further. Here he has grouped the coins together according to the year of their inception. Let’s see how well the coins from each year group performed:

Image courtesy: WooBull

Yikes! That does not look good at all!

What this shows is that every year the coins are performing worse and worse. And the reason for that is simple. More and more scam ICOs are coming in and developers are not making valuable enough projects. As a result of which, we have tokens, which perform no other utility than being a means of liquidation and that is exactly why Bitcoin and Ethereum are so far and above everyone else. People realize their potential as a proper long-term store of values.

This is exactly why developers need to pay attention to token velocity. The reason why Bitcoin and Ethereum have such high values is because, they are low-velocity coins. Let’s quantify token velocity (TV):

Let’s quantify token velocity (TV):

TV = Total Trading Volume / Average Network Value.

So, more the trading volume aka more that coin is traded more the velocity. Consequently, less the network value, more the velocity.

Now if you examine this from the perspective of bitcoin, then you will know exactly why its velocity is less.

  • No other crypto has as much network value as bitcoin.
  • No one wants to trade off bitcoin because they know that there is value in holding it.

So, what should developers do to ensure that they have less token velocity? They need to work and re-examine their tokens. They need to understand whether a token is being fully utilized or not. They need to answer several questions, some of which are:

Does my project really need a token?

  • Am I fully exploiting the token and getting as much token utility as possible.
  • Is my token useful only for initial liquidation purposes?
  • Is there any value in holding my token long term?
  • Is my token ticking off as many roles as possible?
  •  

It is only when developers work on the utility of their tokens will they be able to bring something which can contribute significantly to the ecosystem
 

Pillar #3: Security

And now we come to the third pillar… security

During your ICO and immediately after your ICO you have a big target on your back. If you haven’t paid attention to your security, hackers will attack you and they will rob you. In fact, this is what Chainanalysis had to say:

“More than 30,000 people have fallen prey to ethereum-related cyber crime, losing an average of $7,500 each, with ICOs amassing about $1.6 billion in proceeds in 2017.”

In fact, Chainanalysis claims that there is a 1 in 10 chance that you will end up a victim of the theft! That is staggering.

The crimes that happen largely fall into three categories:

  • Faulty code.
  • Phishing Schemes.
  • Mismanagement of keys.

Faulty Code

Perhaps the most infamous example of this is the DAO attack.

The DAO aka the Decentralized Autonomous Organization was a complex smart contract which was going to revolutionize Ethereum forever. It was a decentralized venture capital fund which was going to fund all future DAPPS made in the eco-system.

The way it worked was pretty straightforward. If you wanted to have any say in the kind of DAPPS that would get funded, then you would have to buy “DAO Tokens” for a certain amount of Ether. The DAO tokens were indicators that you are now officially part of the DAO system and gave you voting rights.

If in case, you and a group of other people were not happy with the DAO then you could split from it by using the “Split Function”. Using this function, you would get back the ether you have invested and, if you so desired, you could even create your own “Child DAO”. In fact, you could split off with multiple DAO token holders and create your own Child DAO and start accepting proposals.

There was one condition in the contract, however, after splitting off from the DAO you would have to hold on to your ether for 28 days before you could spend them. And this was where the loophole was created. People saw this in advance and brought it up but the DAO creators assured that this was not going to be a big issue. They couldn’t have been more wrong.
 

The DAO Attack

On 17th June 2016, someone exploited this very loophole in the DAO and siphoned away one-third of the DAO’s funds. That’s around $50 million dollars. The loophole that the hacker(s) discovered was pretty straightforward in the hindsight.

If one wished to exit the DAO, then they can do so by sending in a request. The splitting function will then follow the following two steps:

Give the user back his/her Ether in exchange of their DAO tokens.

Register the transaction in the ledger and update the internal token balance.

What the hacker did was they made a recursive function in the request, so this is how the splitting function went:

Take the DAO tokens from the user and give them the Ether requested.

Before they could register the transaction, the recursive function made the code go back and transfer even more Ether for the same DAO tokens.

This went on and on until $50 million worth of Ether were taken out and stored in a Child DAO and as you would expect, pandemonium went through the entire Ethereum community. The price of Ether dropped from $20 to $13 overnight. This still remains the worst ICO hack ever. The aftermath of the hack was so extreme that it split Ethereum into two different currencies: Ethereum and Ethereum Classic.
 

Phishing Schemes

Here is something truly scary for you to wrap your head around.

Phishing scams have stolen up to $225 million in Ethereum related cybercrimes. In fact, as we have mentioned before, more than 30,000 people have fallen prey to ethereum-related cyber crime, losing an average of $7,500 each.

So, before we continue, what is phishing?

Phishing is the process by which scammers get your sensitive information (like credit card details) by impersonating someone trustworthy and of notable repute. The scammers usually use email and in some cases, they use social media. In fact, someone has been trying to phish ICO developers by impersonating our very own Ameer Rosic!

As a developer, you need to be very very very careful of this. Imagine giving away your card details or, more importantly, your key details just before your ICO! Obviously, the investors get scammed more than the developers. One of the more popular ways of scamming investors is by creating a fake social media profile which somewhat resembles the real ICO page and then manipulating potential investors to send money to their address.
 

Mismanagement Of Keys

If you are a developer, then there are 3 questions that you need to ask yourself:

  • Where are you storing your private keys?
  • How are you protecting your wallets?
  • How are you protecting your customer’s tokens on your ecosystem?
  • Who are you sharing your multi-sig wallet keys with?

If you are a developer, then one of the many doubts and fears that you will face from your investors is what is stopping you from running away with all of their funds? Which is a very valid question. The way that you can allay these fears is by using a multi-signature wallet.
 

What is a multi-signature wallet?

The easiest way of understanding how a multi-signature (multi-sig) wallet works like is by thinking of a safe which needs multiple keys to operate. A multi-signature wallet is great for 2 purposes:

  • To create more security for your wallet and save yourself from human error.
  • To create a more democratic wallet which can be used by one or more people.

How does multi-signature wallet save you from human error?

Let’s take the example of BitGo, one of the premier multi-sig wallet service providers in the world. They issue 3 private keys. One is held by the company itself, one is held by the user and the third one is a backup that the user can keep for themselves or give to someone trustworthy for safe keeping.

To do any sort of transaction in a BitGo wallet you will need at least 2/3 keys to operate. So even if you have a hacker behind you, it will super difficult for them to get their hands on 2 private keys. And on top of that, even if you lose your private key for whatever reason, you still have that backup key that you had given to your friend.

Now, how does a multi-signature wallet create a more democratic environment? Imagine that you are working in a company with 10 people and you need 8 approvals in order to make a transaction.

Using a software like Electrum you can simply create a custom multi-sig wallet with 10 keys. This way you can make seamless democratic transactions in your company. And that is exactly how you will allay fears regarding the safety of the investor’s money. Suppose you publicly declare that 5 of those keys will be given to neutral parties who are reputable members in the crypto environment that will obviously create more trust among the investors.

However, despite all this, even a multi-sig wallet is prone to a hack attack. A wallet is only as secure as the code that makes it. On July 19th, a vulnerability in the Parity Multsig wallet was exploited and hackers made do with $30 million in ether.

So next time you are about to hold an ICO please make sure that you are taking care of your security. No one wants to see a tweet like this:

Conclusion

ICOs are the “in thing” now and the number of ICOs held per month is increasing exponentially:

Image Courtesy: Investopedia

 

If you are a developer then, and there is no easy way of saying it, you will most likely fail to create an end product. Does this mean that we hate ICOs? We don’t. Like we said, we really think that it is revolutionary. But, if you are a developer then it is your responsibility to you, your potential investors, and to the future of cryptocurrency itself to use the ICOs as a means of creating something truly meaningful rather a method of making a lot of cash.

  • Why are you doing your ICO?
  • Is your token something that will bring genuine value?
  • Are you sure you are not doing this just to make a quick buck?

If you cannot convincingly answer any of these questions then please, do not do your ICO. Don’t contribute to this “bubble”. Make something meaningful. Make something that will add to the environment, not exploit it.

 

Posted by David Ogden Entrepreneur
David Ogden Cryptocurrency Entrepreneur

 

Bitcoin Price Rises by 5% to $3,740 as the Cryptocurrency Market Gradually Recovers

Bitcoin Price Rises by 5% to $3,740 as the Cryptocurrency Market Gradually Recovers

Today, on September 23, the bitcoin price increased from $3,600 to $3,738, recording a daily increase of 4.88 percent. At today’s peak, the bitcoin price surpassed the $3,800 mark, showing signs of recovery from the largest price correction.

Bitcoin Price Rises by 5% to $3,740 as the Cryptocurrency Market Gradually Recovers

On September 20, less than three days ago, the price of bitcoin and most of the cryptocurrencies in the global market declined significantly. The bitcoin price plunged from $4,020 to $3,530, by $490, and the price of other leading cryptocurrency such as Ethereum also dropped by over 10 percent.
 

Bitcoin Remains Stable in $3,800 Region, Optimistic Indicators

In 2013, when the Chinese government banned bitcoin and trading activities around the cryptocurrency, the bitcoin price fell by over 40 percent and it failed to recover for more than eight months thereafter. The bitcoin price surpassed the $1,000 mark for the first time in December of 2016. However, when the Chinese government issued a nationwide ban on bitcoin, the bitcoin price was not able to surpass the $1,000 mark again until January of 2017.

In consideration of the impact the Chinese government and its ban on bitcoin had on the price of bitcoin in 2013, China’s nationwide ban on local bitcoin exchanges had significantly less impact on both the price of bitcoin and the state of the global bitcoin exchange market.

When the Chinese government requested major bitcoin exchanges and trading platforms including BTCC, OKCoin and Huobi to shut down, analysts expected the price of bitcoin to remain below the $3,000 mark for awhile, since the Chinese bitcoin exchange market was still a large market for bitcoin. But, as an increasing number of traders and investors began to realize that the Chinese market was only accountable for around 10 to 13 percent of global bitcoin traders, the international bitcoin exchange market started to demonstrate increasing demand from investors.

It is important to acknowledge that stability is most likely a far-fetched term to depict the recent performance of the bitcoin price. But, relative to previous events such as the 2013 ban on bitcoin by the Chinese government, bitcoin has done surprising well, showing resilience towards FUD and regulatory uncertainty in China.
 

Can Bitcoin Price Recover Beyond $4,000 In Upcoming Weeks?

Financial and bitcoin analysts including Max Keiser and Ben Verret reaffirmed that the bitcoin price is likely to increase in the upcoming days and weeks, considering that the weak hands have left the market. Earlier today, Keiser also emphasized his short-term price target of $6,000, given that the bitcoin price has been able to hold up and sustain momentum despite the uncertainty in regards to the Chinese bitcoin market and also, the country’s local bitcoin mining industry.

Since 2016, an increasing number of investors and traders have begun to seek bitcoin as a safe haven asset to avoid global markets volatility and weakening of reserve currencies. As the conflict between North Korea and the US continues to intensify, it is likely that more investors will seek out for bitcoin in the upcoming weeks.

More to that, as JP Vergne, a professor at Ivey Business School explained, developer activity around cryptocurrencies is the best indicator for price. Bitcoin development is booming with the emergence of Lightning-based applications and Segregated Witness (SegWit)-supporting wallet platforms.
 

Joseph Young on 23/09/2017
 

Posted by David Ogden
David Ogden Cryptocurrency Entrepreneur

Ethereum, Bitcoin Prices Slide as Market Sheds $10 Billion

Ethereum, Bitcoin Prices Slide as Market Sheds $10 Billion

The crypto markets took a steep downward turn on Friday, with more than 90 of the top 100 cryptocurrencies posting single-day price declines. The bitcoin price dropped nearly $400 after challenging the $4,000 level earlier in the week, while the ethereum price slipped below $260.

Chart from CoinMarketCap

The total cryptocurrency market cap–the combined value of all cryptocurrencies–dropped more than $10 billion for the day. After beginning the day at about $133 billion, the crypto market cap quickly dropped below the $130 billion threshold, where it languished leading into Friday morning. At present, the total crypto market cap is about $122 billion.

Chart from CoinMarketCap

Bitcoin Price Dips Toward $3,500

Bitcoin was at the head of the retreat, dipping nearly $400 from its Thursday morning mark of $3,900. Market manipulation or not, the bitcoin price has tapered quite a bit since its early-week recovery. In the past day alone, it has dipped 6%, despite the fact that a prominent industry figure said a trusted source had told him that China will not extend its bitcoin crackdown to mining. At present, the bitcoin price is trading at a global average of $3,564, which translates into a $59.1 billion market cap.

Bitcoin Price Chart from CoinMarketCap

Meanwhile, JP Morgan CEO Jamie Dimon has taken another potshot at bitcoin, claiming that it’s “worth nothing” just a week after calling it a fraud.

Ethereum Price Dips Another 6%

The ethereum price mirrored bitcoin’s decline, dipping 6% for the day. After entering the day above $270, the ethereum price struggled to hold above that mark. Ultimately, it dove through the $260 level, too, bringing it to a current price of $257. Ethereum now has a market cap of $24.4 billion.

Ethereum Price Chart from CoinMarketCap

Bitcoin Cash Posts Double-Digit Decline

The bitcoin cash price careened downward on Friday, posting the worst single-day performance of any top 15 coin. Within the past 24 hours, the bitcoin cash price has fallen by more than $50–a 10% drop. At present, bitcoin cash is trading at $407 and has a market cap of just $6.8 billion.

Bitcoin Cash Price Chart from CoinMarketCap

Altcoins Trend Down

The altcoin markets joined in the retreat, with nearly every top 100 cryptocurrency declining for the day. Fourth-ranked Ripple saw its price fall 5% to $0.17, while Dash slid 3% to $337.

Altcoin Price Chart from CoinMarketCap

The litecoin price fell 8% to just under $46. The 6th-ranked coin now sits at just 50% of the $92 record it set on September 2.

Litecoin Price Chart from CoinMarketCap

NEM–whose single-day trading volume is just $3 million–declined 6% to $0.204, while IOTA dropped 5% to $0.484. Monero, whose price approached $150 less than a month ago, is now trading at just $85 following Friday’s 7% skid. Ethereum classic rounds out the top 10 with an 8% decline that forced its market cap below $1 billion.
 

Author: Josiah Wilmoth on 22/09/2017

 

Postedby David Ogden Entrepreneur

Prominent Bitcoin Trader - Price is Heading Towards $100,000 in 2018

Prominent Bitcoin Trader – Price is Heading Towards $100,000 in 2018

Earlier this week, prominent bitcoin trader and investor Tone Vays provided technical analysis on bitcoin’s short-term trend, major price correction following the nationwide ban on Chinese bitcoin exchanges, bitcoin’s swift recovery, and the long-term future of bitcoin.

The analysis of Vays demonstrated the potential of bitcoin price to surpass the $100,000 mark by the end of 2018, which would provide bitcoin a multi-trillion dollar market cap. For many years, financial analysts and researchers in both the cryptocurrency and banking sectors such as RT’s Keiser Report host Max Keiser emphasized the possibility of bitcoin to surpass $1 trillion in market cap if and when it succeeds in evolving into an alternative financial network against existing banking systems and financial institutions.

Prominent Bitcoin Trader - Price is Heading Towards $100,000 in 2018

Based on the exponential growth rate of bitcoin regarding userbase, adoption, developer activity, trading volumes and market cap, a long-term price target of $100,000 is possible to achieve, especially if leading institutional and retail investors continue to endorse, embrace and adopt bitcoin. In 2017 alone, $90 billion investment bank Goldman Sachs and Fidelity Investments with $2.13 trillion worth of assets under management expressed their optimism toward bitcoin.

In August, Fidelity CEO Abigail Johnson stated:

“But I am still a believer – and it’s no accident that I’m one of the few standing before you today from a large financial services firm that hasn’t given up on digital currencies.”

Johnson also revealed that the company has been experimenting with bitcoin through mining the digital currency and by providing a bitcoin investment platform to its clients. Last month, Fidelity partnered with Coinbase to enable Fidelity clients and portfolio managers to access their bitcoin wallets and accounts directly from the main Fidelity investment platform.

Goldman Sachs analysts further emphasized in a note to its clients and investors that bitcoin and the cryptocurrency market can no longer be ignored, even by institutional investors.

“The debate has shifted from the legitimacy of the ‘fiat of the Internet’ to how fast new entrants are raising funds,”

said Goldman Sachs. More to that, Goldman Sachs chief technician Sheba Jafari also offered technical analysis on bitcoin’s mid-term price trend, stating that he strongly believes bitcoin will surpass the $4,800 mark before the end of 2017.

said Goldman Sachs. More to that, Goldman Sachs chief technician Sheba Jafari also offered technical analysis on bitcoin’s mid-term price trend, stating that he strongly believes bitcoin will surpass the $4,800 mark before the end of 2017.

Already, two of the US market’s largest exchanges and bitcoin service providers Coinbase and Gemini have started to develop trading platforms for large-scale institutional investors, focusing on building a more robust and efficient investment channel which can provide sufficient liquidity for retail investors. Gemini entered into a strategic partnership with the Chicago Board Options Exchange (CBOE), the largest options exchange in the US, to serve instituitonal investors.

Gemini CEO Tyler Winklevoss stated:

“Gemini’s key concerns in the cryptocurrency ecosystem have always been security, compliance and regulatory oversight. By working with the team at CBOE, we are helping to make Bitcoin and other cryptocurrencies increasingly accessible to both retail and institutional investors.”

Upon securing a $100 million funding round at a valuation of $1.6 billion, Coinbase CEO Brian Armstrong also promised its users and investors to provide a platform for institutoinal investors in the US and overseas markets.

With an increasing number of instituitonal and retail investors showing interest in bitcoin and global mainstream adoption of bitcoin increasing generally, $100,000 is an achievable long-term target for bitcoin.

 

Author Joseph Young on 21/09/2017

 

Posted by David Ogden Entrepreneur
david ogden Cryptocurrency Entrepreneur

Wall Street Journal Argues Bitcoin Is “Probably worth Zero”, Joins Obituary List

Wall Street Journal Argues Bitcoin Is “Probably worth Zero”, Joins Obituary List

One of the Wall Street Journal’s most read articles of the day implies that bitcoin’s volatility reveals that the cryptocurrency is “probably worth zero.” The author of the piece starts by stating that a borderless digital currency out of the government’s reach that allows for semi-anonymous transactions sounds good, but that he’s not really a bitcoin fan because of the small number of transactions it can handle, and the amount of power necessary to maintain the network.

Bitcoin is scalable and can eventually reach and surpass VISA’s volume of, on average, about 2,000 transactions per second (tps). As CCN previously reported, SegWit’s activation on both the litecoin and bitcoin networks enables cross-network transaction swaps between the two cryptocurrencies, facilitating a host of other innovations, making it clear that, in the future, the problems that currently haunt the cryptocurrency won’t be there anymore.

The author then uses Gresham’s law, the principle that “bad money drives out good money” to argue against bitcoin. The article reads:

“Given the choice of spending inflationary government-issued money or something which holds its value, everyone would spend the bad paper stuff and hoard the bitcoin.”

In his argument, he says that no one wants to be the person that once bought two pizzas for 10,000 bitcoins, when the cryptocurrency was nearly worthless. The point being that if no one spends the currency while waiting for it to gain value, it will never really get established as a currency. Then again, no one in Venezuela wanted to see their currency’s value decrease, but the people didn’t have much of a say in that and, as such, were forced to use bitcoin to survive.

Then, unpacking the idea of bitcoin being based on illegal transactions, the author uses math done by Dan Davies, a bank analyst at Frontline Analysts in London, to assume that all drug dealing moves online, so as to get to $571 per bitcoin. The argument adds that drug dealers might put up with bitcoin’s current problems – which I addressed above – as laundering dollars is harder and more expensive than transacting in bitcoin.

Given that various studies already clarified that criminals aren’t using bitcoin that much, the value would be much lower, according to WSJ’s article. As such, the author concludes that bitcoin’s current price, of nearly $4,000, is mostly speculation and that JP Morgan’s Jamie Dimon was right to compare it to the 17th-century Dutch tulip bubble.

Basing the cryptocurrency on illegal activity neglects that hundreds, if not thousands, of legitimate businesses already accept bitcoin, so much so that it’s possible to live on bitcoin. Plus, the cryptocurrency is mostly used for legitimate purposes by those who simply want to be in charge of their own money, not those who have something to hide.

 

Bitcoin as Digital Gold

WSJ’s article goes on to imply that bitcoin’s true believers cling to the idea of it being digital gold that will maintain its value if a government currency collapses, and that this idea is supported by history’s examples of it happening.

The article points out that gold has had thousands of years and a history of being used to back fiat money to support its current position. Bitcoin has had less than a decade to prove its worth and most people just only heard of it. A recent study by YouGov revealed that 34% of Americans never even heard of bitcoin, and that 29% thought the cryptocurrency was just used to purchase illegal goods or services.

Still, bitcoin’s potential to replace gold led to a $5,500 price per coin, switching Thomson Reuters GFMS’ estimate of 2,155 metric tons of gold held in exchange-traded funds to the cryptocurrency. If bitcoin was to completely replace gold coins and bars, given GFMS’ supply estimate of 24,000 metric tons bought for investment in the past half-century, we would get $61,000 per coin.

Finally, the author states that bitcoin’s volatility can somewhat be explained by it either succeeding or failing in completely displacing gold, implying that the cryptocurrency is either extremely precious, or worthless. The article reads:

“Based on the simple choice between total success and failure, we can very roughly say that bitcoin at 70% of the gold ETF-derived price suggests a 70% of displacing so-called paper gold as society’s chosen emergency store of value, and a 6% chance of displacing physical gold. Even digital dreams should accept that is far too high.”

At the end of the day, bitcoin’s value, just like the value of other cryptocurrencies, depends on its users as it is the first free market backed currency, and its growth is consistent with its userbase increase. A quick look at Google Trends shows us that interested in the cryptocurrency is still surging.

At the end of the day WSJ’s article is just one more to add to the bitcoin obituary list.

 

Author: Francisco Memoria on 20/09/2017

Posted By David Ogden Entrepreneur
David Ogden Cryptocurrency Entrepreneur

Bitcoin Mining Could be China's Next Target - Why It Does Not Matter

Bitcoin Mining Could be China’s Next Target – Why It Does Not Matter

 

Several sources including the Wall Street Journal have reported that the Chinese government and its regulators may target bitcoin mining operators in the region following the imposition of a nationwide ban on cryptocurrency and bitcoin exchanges.

Experts in the cryptocurrency sector and mining industry including John McAfee strongly believe that the Chinese government will not order a crackdown on bitcoin mining centers and operators. As Cryptocoinsnews previously reported, McAfee revealed that Jihan Wu, the co-founder of Bitmain, the world’s largest bitcoin mining equipment manufacturer that is reportedly valued at billions of dollars, told McAfee in a meeting with Roger Ver that the Chinese government is not planning a ban on mining centers.

But, in a statement, ViaBTC CEO Haipo Yang explained that if the Chinese government decides to ban bitcoin mining centers and operators, it will be the end of the Chinese bitcoin mining industry. Yang wrote:

“Technically, China can’t ban bitcoin traffic, we have our own sync network. But if the Chinese government says mining is illegal, we are fucked.”

As Yang noted, it is possible for the Chinese government to target bitcoin mining operators in many methods. For instance, the Chinese government could decide to nationalize bitcoin mining centers and announce them as the property of the Chinese government.

For the Chinese mining industry, the crackdown on bitcoin mining by the government will lead to financial turmoil. More specifically, companies like Bitmain that recently secured multi-million dollar funding rounds will not be able to serve their biggest markets, which are domestic miners and mining centers.

Earlier today, through its a PBoC-owned financial news publication, PBoC researcher and Central University of Finance and Economics professor Huang Zhen explained that the central bank of China perceives bitcoin as a threat. More importantly, Zhen emphasized that the government plans to release a government-issued national digital currency in the future, as a rival currency to bitcoin.

If the intention of the government is to eliminate bitcoin in the Chinese market in order to promote and issue its own digital currency, the Chinese government will likely ban aspect of bitcoin. But, in contrary, if the Chinese government is not ready to release a digital currency of its own, it will re-instate bitcoin trading platforms and prevent from issuing any further restrictions and regulations on bitcoin miners.

“The central bank has set up a research group and a digital money research institute to explore the digitization of sovereign money. After this round of virtual money markets supervision, we expect under the auspices of the Chinese central bank to launch our own sovereign digital currency as soon as possible to help maintain China’s leadership in the development of global digital finance,” Zhen wrote.

Ultimately, even if the Chinese government does ban bitcoin mining centers and operations in China, in the mid-term, it will not pose a major threat to the global bitcoin mining industry primarily due to the emergence of multi-billion dollar Japanese conglomerates that are developing their own ASIC miners and manufacturing independent bitcoin mining equipment to mine the digital currency.

 

Author: Joseph Young on 19/09/2017

 

Posted By David Ogden Entrepreneur.
David Ogden Cryptocurrency Entrepreneur

Bitcoin Price Technical Analysis for 09/19/2017 – Can Bulls Keep It Up

Bitcoin Price Technical Analysis for 09/19/2017 – Can Bulls Keep It Up

Bitcoin price seems to have completed a large correction and is ready to resume its long-term uptrend.

 

Bitcoin Price Key Highlights

  • Bitcoin price has bounced off a long-term area of interest after its recent sharp drop, signaling that the uptrend could still resume.
  • Applying the Fib extension tool on this major correction could indicate how high bulls could take bitcoin from here.
  • Technical indicators on the daily time frame also suggest that the long-term climb could carry on.

Bitcoin price seems to have completed a large correction and is ready to resume its long-term uptrend.

 

Technical Indicators Signals

The 100 SMA is above the longer-term 200 SMA on the daily chart, signaling that the path of least resistance is to the upside. The gap is also gradually widening to reflect strengthening bullish momentum. Also, the 100 SMA has recently held as dynamic support as it lined up with the rising trend line connecting the lows since April.

Stochastic has pulled up from the oversold region to show that buyers are regaining control of bitcoin price action. RSI is also turning higher and appears to be heading north so bitcoin could follow suit.

The next potential resistance is at the 38.2% extension just past the $4000 major psychological barrier. The 50% extension is at $4637, the 61.8% extension at the $5000 handle close to the record highs, and the 76.4% extension at $5464. The full extension is around the $6200 level.

Bitcoin 19th September

Market Factors

Chinese regulators have confirmed that they are stepping up their efforts to crack down on the cryptocurrency, following rumors that authorities are already shutting down exchanges in the country. However, investors seem to have moved on from this news as other markets like Japan and South Korea are taking majority of the market share and activity.

Meanwhile, the US dollar is giving up some ground to bitcoin price ahead of the FOMC decision, during which the central bank would likely keep rates on hold and downgrade growth forecasts on account of the recent hurricanes. A press conference will also follow and Yellen’s responses will be scrutinized as traders hunt for clues on December tightening.

Author Sarah Jenn on 4:23 am September 19, 2017

Time to ride the tiger

Posted by David Ogden Entrepreneur
David Ogden Cryptocurrency Entrepreneur