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|Bitcoin Frequently Asked Questions
What is Bitcoin?
Bitcoin is a consensus network that enables a new payment system and a completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet. Bitcoin can also be seen as the most prominent triple entry bookkeeping system in existence.
Who created Bitcoin?
Bitcoin is the first implementation of a concept called "cryptocurrency", which was first described in 1998 by Wei Dai on the cypherpunks mailing list, suggesting the idea of a new form of money that uses cryptography to control its creation and transactions, rather than a central authority. The first Bitcoin specification and proof of concept was published in 2009 in a cryptography mailing list by Satoshi Nakamoto. Satoshi left the project in late 2010 without revealing much about himself. The community has since grown exponentially with many developers working on Bitcoin.
Satoshi's anonymity often raised unjustified concerns, many of which are linked to misunderstanding of the open-source nature of Bitcoin. The Bitcoin protocol and software are published openly and any developer around the world can review the code or make their own modified version of the Bitcoin software. Just like current developers, Satoshi's influence was limited to the changes he made being adopted by others and therefore he did not control Bitcoin. As such, the identity of Bitcoin's inventor is probably as relevant today as the identity of the person who invented paper.
Who controls the Bitcoin network?
Nobody owns the Bitcoin network much like no one owns the technology behind email. Bitcoin is controlled by all Bitcoin users around the world. While developers are improving the software, they can't force a change in the Bitcoin protocol because all users are free to choose what software and version they use. In order to stay compatible with each other, all users need to use software complying with the same rules. Bitcoin can only work correctly with a complete consensus among all users. Therefore, all users and developers have a strong incentive to protect this consensus.
How does Bitcoin work?
From a user perspective, Bitcoin is nothing more than a mobile app or computer program that provides a personal Bitcoin wallet and allows a user to send and receive bitcoins with them. This is how Bitcoin works for most users.
Behind the scenes, the Bitcoin network is sharing a public ledger called the "block chain". This ledger contains every transaction ever processed, allowing a user's computer to verify the validity of each transaction. The authenticity of each transaction is protected by digital signatures corresponding to the sending addresses, allowing all users to have full control over sending bitcoins from their own Bitcoin addresses. In addition, anyone can process transactions using the computing power of specialized hardware and earn a reward in bitcoins for this service. This is often called "mining". To learn more about Bitcoin, you can consult the dedicated page and the original paper.
Is Bitcoin really used by people?
Yes. There are a growing number of businesses and individuals using Bitcoin. This includes brick-and-mortar businesses like restaurants, apartments, and law firms, as well as popular online services such as Namecheap, Overstock.com, and Reddit. While Bitcoin remains a relatively new phenomenon, it is growing fast. At the end of April 2017, the total value of all existing bitcoins exceeded 20 billion US dollars, with millions of dollars worth of bitcoins exchanged daily.
How does one acquire bitcoins?
As payment for goods or services.
Purchase bitcoins at a Bitcoin exchange.
Exchange bitcoins with someone near you.
Earn bitcoins through competitive mining.
While it may be possible to find individuals who wish to sell bitcoins in exchange for a credit card or PayPal payment, most exchanges do not allow funding via these payment methods. This is due to cases where someone buys bitcoins with PayPal, and then reverses their half of the transaction. This is commonly referred to as a chargeback.
How difficult is it to make a Bitcoin payment?
Bitcoin payments are easier to make than debit or credit card purchases, and can be received without a merchant account. Payments are made from a wallet application, either on your computer or smartphone, by entering the recipient's address, the payment amount, and pressing send. To make it easier to enter a recipient's address, many wallets can obtain the address by scanning a QR code or touching two phones together with NFC technology.
What are the advantages of Bitcoin?
Payment freedom - It is possible to send and receive bitcoins anywhere in the world at any time. No bank holidays. No borders. No bureaucracy. Bitcoin allows its users to be in full control of their money.
Choose your own fees - There is no fee to receive bitcoins, and many wallets let you control how large a fee to pay when spending. Higher fees can encourage faster confirmation of your transactions. Fees are unrelated to the amount transferred, so it's possible to send 100,000 bitcoins for the same fee it costs to send 1 bitcoin. Additionally, merchant processors exist to assist merchants in processing transactions, converting bitcoins to fiat currency and depositing funds directly into merchants' bank accounts daily. As these services are based on Bitcoin, they can be offered for much lower fees than with PayPal or credit card networks.
Fewer risks for merchants - Bitcoin transactions are secure, irreversible, and do not contain customers’ sensitive or personal information. This protects merchants from losses caused by fraud or fraudulent chargebacks, and there is no need for PCI compliance. Merchants can easily expand to new markets where either credit cards are not available or fraud rates are unacceptably high. The net results are lower fees, larger markets, and fewer administrative costs.
Security and control - Bitcoin users are in full control of their transactions; it is impossible for merchants to force unwanted or unnoticed charges as can happen with other payment methods. Bitcoin payments can be made without personal information tied to the transaction. This offers strong protection against identity theft. Bitcoin users can also protect their money with backup and encryption.
Transparent and neutral - All information concerning the Bitcoin money supply itself is readily available on the block chain for anybody to verify and use in real-time. No individual or organization can control or manipulate the Bitcoin protocol because it is cryptographically secure. This allows the core of Bitcoin to be trusted for being completely neutral, transparent and predictable.
What are the disadvantages of Bitcoin?
Degree of acceptance - Many people are still unaware of Bitcoin. Every day, more businesses accept bitcoins because they want the advantages of doing so, but the list remains small and still needs to grow in order to benefit from network effects.
Volatility - The total value of bitcoins in circulation and the number of businesses using Bitcoin are still very small compared to what they could be. Therefore, relatively small events, trades, or business activities can significantly affect the price. In theory, this volatility will decrease as Bitcoin markets and the technology matures. Never before has the world seen a start-up currency, so it is truly difficult (and exciting) to imagine how it will play out.
Ongoing development - Bitcoin software is still in beta with many incomplete features in active development. New tools, features, and services are being developed to make Bitcoin more secure and accessible to the masses. Some of these are still not ready for everyone. Most Bitcoin businesses are new and still offer no insurance. In general, Bitcoin is still in the process of maturing.
Why do people trust Bitcoin?
Much of the trust in Bitcoin comes from the fact that it requires no trust at all. Bitcoin is fully open-source and decentralized. This means that anyone has access to the entire source code at any time. Any developer in the world can therefore verify exactly how Bitcoin works. All transactions and bitcoins issued into existence can be transparently consulted in real-time by anyone. All payments can be made without reliance on a third party and the whole system is protected by heavily peer-reviewed cryptographic algorithms like those used for online banking. No organization or individual can control Bitcoin, and the network remains secure even if not all of its users can be trusted.
Can I make money with Bitcoin?
You should never expect to get rich with Bitcoin or any emerging technology. It is always important to be wary of anything that sounds too good to be true or disobeys basic economic rules.
Bitcoin is a growing space of innovation and there are business opportunities that also include risks. There is no guarantee that Bitcoin will continue to grow even though it has developed at a very fast rate so far. Investing time and resources on anything related to Bitcoin requires entrepreneurship. There are various ways to make money with Bitcoin such as mining, speculation or running new businesses. All of these methods are competitive and there is no guarantee of profit. It is up to each individual to make a proper evaluation of the costs and the risks involved in any such project.
Is Bitcoin fully virtual and immaterial?
Bitcoin is as virtual as the credit cards and online banking networks people use everyday. Bitcoin can be used to pay online and in physical stores just like any other form of money. Bitcoins can also be exchanged in physical form such as the Denarium coins, but paying with a mobile phone usually remains more convenient. Bitcoin balances are stored in a large distributed network, and they cannot be fraudulently altered by anybody. In other words, Bitcoin users have exclusive control over their funds and bitcoins cannot vanish just because they are virtual.
Is Bitcoin anonymous?
Bitcoin is designed to allow its users to send and receive payments with an acceptable level of privacy as well as any other form of money. However, Bitcoin is not anonymous and cannot offer the same level of privacy as cash. The use of Bitcoin leaves extensive public records. Various mechanisms exist to protect users' privacy, and more are in development. However, there is still work to be done before these features are used correctly by most Bitcoin users.
Some concerns have been raised that private transactions could be used for illegal purposes with Bitcoin. However, it is worth noting that Bitcoin will undoubtedly be subjected to similar regulations that are already in place inside existing financial systems. Bitcoin cannot be more anonymous than cash and it is not likely to prevent criminal investigations from being conducted. Additionally, Bitcoin is also designed to prevent a large range of financial crimes.
What happens when bitcoins are lost?
When a user loses his wallet, it has the effect of removing money out of circulation. Lost bitcoins still remain in the block chain just like any other bitcoins. However, lost bitcoins remain dormant forever because there is no way for anybody to find the private key(s) that would allow them to be spent again. Because of the law of supply and demand, when fewer bitcoins are available, the ones that are left will be in higher demand and increase in value to compensate.
Can Bitcoin scale to become a major payment network?
The Bitcoin network can already process a much higher number of transactions per second than it does today. It is, however, not entirely ready to scale to the level of major credit card networks. Work is underway to lift current limitations, and future requirements are well known. Since inception, every aspect of the Bitcoin network has been in a continuous process of maturation, optimization, and specialization, and it should be expected to remain that way for some years to come. As traffic grows, more Bitcoin users may use lightweight clients, and full network nodes may become a more specialized service. For more details, see the Scalability page on the Wiki.
Is Bitcoin legal?
To the best of our knowledge, Bitcoin has not been made illegal by legislation in most jurisdictions. However, some jurisdictions (such as Argentina and Russia) severely restrict or ban foreign currencies. Other jurisdictions (such as Thailand) may limit the licensing of certain entities such as Bitcoin exchanges.
Regulators from various jurisdictions are taking steps to provide individuals and businesses with rules on how to integrate this new technology with the formal, regulated financial system. For example, the Financial Crimes Enforcement Network (FinCEN), a bureau in the United States Treasury Department, issued non-binding guidance on how it characterizes certain activities involving virtual currencies.
Is Bitcoin useful for illegal activities?
Bitcoin is money, and money has always been used both for legal and illegal purposes. Cash, credit cards and current banking systems widely surpass Bitcoin in terms of their use to finance crime. Bitcoin can bring significant innovation in payment systems and the benefits of such innovation are often considered to be far beyond their potential drawbacks.
Bitcoin is designed to be a huge step forward in making money more secure and could also act as a significant protection against many forms of financial crime. For instance, bitcoins are completely impossible to counterfeit. Users are in full control of their payments and cannot receive unapproved charges such as with credit card fraud. Bitcoin transactions are irreversible and immune to fraudulent chargebacks. Bitcoin allows money to be secured against theft and loss using very strong and useful mechanisms such as backups, encryption, and multiple signatures.
Some concerns have been raised that Bitcoin could be more attractive to criminals because it can be used to make private and irreversible payments. However, these features already exist with cash and wire transfer, which are widely used and well-established. The use of Bitcoin will undoubtedly be subjected to similar regulations that are already in place inside existing financial systems, and Bitcoin is not likely to prevent criminal investigations from being conducted. In general, it is common for important breakthroughs to be perceived as being controversial before their benefits are well understood. The Internet is a good example among many others to illustrate this.
Can Bitcoin be regulated?
The Bitcoin protocol itself cannot be modified without the cooperation of nearly all its users, who choose what software they use. Attempting to assign special rights to a local authority in the rules of the global Bitcoin network is not a practical possibility. Any rich organization could choose to invest in mining hardware to control half of the computing power of the network and become able to block or reverse recent transactions. However, there is no guarantee that they could retain this power since this requires to invest as much than all other miners in the world.
It is however possible to regulate the use of Bitcoin in a similar way to any other instrument. Just like the dollar, Bitcoin can be used for a wide variety of purposes, some of which can be considered legitimate or not as per each jurisdiction's laws. In this regard, Bitcoin is no different than any other tool or resource and can be subjected to different regulations in each country. Bitcoin use could also be made difficult by restrictive regulations, in which case it is hard to determine what percentage of users would keep using the technology. A government that chooses to ban Bitcoin would prevent domestic businesses and markets from developing, shifting innovation to other countries. The challenge for regulators, as always, is to develop efficient solutions while not impairing the growth of new emerging markets and businesses.
What about Bitcoin and taxes?
Bitcoin is not a fiat currency with legal tender status in any jurisdiction, but often tax liability accrues regardless of the medium used. There is a wide variety of legislation in many different jurisdictions which could cause income, sales, payroll, capital gains, or some other form of tax liability to arise with Bitcoin.
What about Bitcoin and consumer protection?
Bitcoin is freeing people to transact on their own terms. Each user can send and receive payments in a similar way to cash but they can also take part in more complex contracts. Multiple signatures allow a transaction to be accepted by the network only if a certain number of a defined group of persons agree to sign the transaction. This allows innovative dispute mediation services to be developed in the future. Such services could allow a third party to approve or reject a transaction in case of disagreement between the other parties without having control on their money. As opposed to cash and other payment methods, Bitcoin always leaves a public proof that a transaction did take place, which can potentially be used in a recourse against businesses with fraudulent practices.
It is also worth noting that while merchants usually depend on their public reputation to remain in business and pay their employees, they don't have access to the same level of information when dealing with new consumers. The way Bitcoin works allows both individuals and businesses to be protected against fraudulent chargebacks while giving the choice to the consumer to ask for more protection when they are not willing to trust a particular merchant.
How are bitcoins created?
New bitcoins are generated by a competitive and decentralized process called "mining". This process involves that individuals are rewarded by the network for their services. Bitcoin miners are processing transactions and securing the network using specialized hardware and are collecting new bitcoins in exchange.
The Bitcoin protocol is designed in such a way that new bitcoins are created at a fixed rate. This makes Bitcoin mining a very competitive business. When more miners join the network, it becomes increasingly difficult to make a profit and miners must seek efficiency to cut their operating costs. No central authority or developer has any power to control or manipulate the system to increase their profits. Every Bitcoin node in the world will reject anything that does not comply with the rules it expects the system to follow.
Bitcoins are created at a decreasing and predictable rate. The number of new bitcoins created each year is automatically halved over time until bitcoin issuance halts completely with a total of 21 million bitcoins in existence. At this point, Bitcoin miners will probably be supported exclusively by numerous small transaction fees.
Why do bitcoins have value?
Bitcoins have value because they are useful as a form of money. Bitcoin has the characteristics of money (durability, portability, fungibility, scarcity, divisibility, and recognizability) based on the properties of mathematics rather than relying on physical properties (like gold and silver) or trust in central authorities (like fiat currencies). In short, Bitcoin is backed by mathematics. With these attributes, all that is required for a form of money to hold value is trust and adoption. In the case of Bitcoin, this can be measured by its growing base of users, merchants, and startups. As with all currency, bitcoin's value comes only and directly from people willing to accept them as payment.
What determines bitcoin’s price?
The price of a bitcoin is determined by supply and demand. When demand for bitcoins increases, the price increases, and when demand falls, the price falls. There is only a limited number of bitcoins in circulation and new bitcoins are created at a predictable and decreasing rate, which means that demand must follow this level of inflation to keep the price stable. Because Bitcoin is still a relatively small market compared to what it could be, it doesn't take significant amounts of money to move the market price up or down, and thus the price of a bitcoin is still very volatile.
Can bitcoins become worthless?
Yes. History is littered with currencies that failed and are no longer used, such as the German Mark during the Weimar Republic and, more recently, the Zimbabwean dollar. Although previous currency failures were typically due to hyperinflation of a kind that Bitcoin makes impossible, there is always potential for technical failures, competing currencies, political issues and so on. As a basic rule of thumb, no currency should be considered absolutely safe from failures or hard times. Bitcoin has proven reliable for years since its inception and there is a lot of potential for Bitcoin to continue to grow. However, no one is in a position to predict what the future will be for Bitcoin.
Is Bitcoin a bubble?
A fast rise in price does not constitute a bubble. An artificial over-valuation that will lead to a sudden downward correction constitutes a bubble. Choices based on individual human action by hundreds of thousands of market participants is the cause for bitcoin's price to fluctuate as the market seeks price discovery. Reasons for changes in sentiment may include a loss of confidence in Bitcoin, a large difference between value and price not based on the fundamentals of the Bitcoin economy, increased press coverage stimulating speculative demand, fear of uncertainty, and old-fashioned irrational exuberance and greed.
Is Bitcoin a Ponzi scheme?
A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money, or the money paid by subsequent investors, instead of from profit earned by the individuals running the business. Ponzi schemes are designed to collapse at the expense of the last investors when there is not enough new participants.
Bitcoin is a free software project with no central authority. Consequently, no one is in a position to make fraudulent representations about investment returns. Like other major currencies such as gold, United States dollar, euro, yen, etc. there is no guaranteed purchasing power and the exchange rate floats freely. This leads to volatility where owners of bitcoins can unpredictably make or lose money. Beyond speculation, Bitcoin is also a payment system with useful and competitive attributes that are being used by thousands of users and businesses.
Doesn't Bitcoin unfairly benefit early adopters?
Some early adopters have large numbers of bitcoins because they took risks and invested time and resources in an unproven technology that was hardly used by anyone and that was much harder to secure properly. Many early adopters spent large numbers of bitcoins quite a few times before they became valuable or bought only small amounts and didn't make huge gains. There is no guarantee that the price of a bitcoin will increase or drop. This is very similar to investing in an early startup that can either gain value through its usefulness and popularity, or just never break through. Bitcoin is still in its infancy, and it has been designed with a very long-term view; it is hard to imagine how it could be less biased towards early adopters, and today's users may or may not be the early adopters of tomorrow.
Won't the finite amount of bitcoins be a limitation?
Bitcoin is unique in that only 21 million bitcoins will ever be created. However, this will never be a limitation because transactions can be denominated in smaller sub-units of a bitcoin, such as bits - there are 1,000,000 bits in 1 bitcoin. Bitcoins can be divided up to 8 decimal places (0.000 000 01) and potentially even smaller units if that is ever required in the future as the average transaction size decreases.
Won't Bitcoin fall in a deflationary spiral?
The deflationary spiral theory says that if prices are expected to fall, people will move purchases into the future in order to benefit from the lower prices. That fall in demand will in turn cause merchants to lower their prices to try and stimulate demand, making the problem worse and leading to an economic depression.
Although this theory is a popular way to justify inflation amongst central bankers, it does not appear to always hold true and is considered controversial amongst economists. Consumer electronics is one example of a market where prices constantly fall but which is not in depression. Similarly, the value of bitcoins has risen over time and yet the size of the Bitcoin economy has also grown dramatically along with it. Because both the value of the currency and the size of its economy started at zero in 2009, Bitcoin is a counterexample to the theory showing that it must sometimes be wrong.
Notwithstanding this, Bitcoin is not designed to be a deflationary currency. It is more accurate to say Bitcoin is intended to inflate in its early years, and become stable in its later years. The only time the quantity of bitcoins in circulation will drop is if people carelessly lose their wallets by failing to make backups. With a stable monetary base and a stable economy, the value of the currency should remain the same.
Isn't speculation and volatility a problem for Bitcoin?
This is a chicken and egg situation. For bitcoin's price to stabilize, a large scale economy needs to develop with more businesses and users. For a large scale economy to develop, businesses and users will seek for price stability.
Fortunately, volatility does not affect the main benefits of Bitcoin as a payment system to transfer money from point A to point B. It is possible for businesses to convert bitcoin payments to their local currency instantly, allowing them to profit from the advantages of Bitcoin without being subjected to price fluctuations. Since Bitcoin offers many useful and unique features and properties, many users choose to use Bitcoin. With such solutions and incentives, it is possible that Bitcoin will mature and develop to a degree where price volatility will become limited.
What if someone bought up all the existing bitcoins?
Only a fraction of bitcoins issued to date are found on the exchange markets for sale. Bitcoin markets are competitive, meaning the price of a bitcoin will rise or fall depending on supply and demand. Additionally, new bitcoins will continue to be issued for decades to come. Therefore even the most determined buyer could not buy all the bitcoins in existence. This situation isn't to suggest, however, that the markets aren't vulnerable to price manipulation; it still doesn't take significant amounts of money to move the market price up or down, and thus Bitcoin remains a volatile asset thus far.
What if someone creates a better digital currency?
That can happen. For now, Bitcoin remains by far the most popular decentralized virtual currency, but there can be no guarantee that it will retain that position. There is already a set of alternative currencies inspired by Bitcoin. It is however probably correct to assume that significant improvements would be required for a new currency to overtake Bitcoin in terms of established market, even though this remains unpredictable. Bitcoin could also conceivably adopt improvements of a competing currency so long as it doesn't change fundamental parts of the protocol.
Why do I have to wait for confirmation?
Receiving notification of a payment is almost instant with Bitcoin. However, there is a delay before the network begins to confirm your transaction by including it in a block. A confirmation means that there is a consensus on the network that the bitcoins you received haven't been sent to anyone else and are considered your property. Once your transaction has been included in one block, it will continue to be buried under every block after it, which will exponentially consolidate this consensus and decrease the risk of a reversed transaction. Each confirmation takes between a few seconds and 90 minutes, with 10 minutes being the average. If the transaction pays too low a fee or is otherwise atypical, getting the first confirmation can take much longer. Every user is free to determine at what point they consider a transaction sufficiently confirmed, but 6 confirmations is often considered to be as safe as waiting 6 months on a credit card transaction.
How much will the transaction fee be?
Transactions can be processed without fees, but trying to send free transactions can require waiting days or weeks. Although fees may increase over time, normal fees currently only cost a tiny amount. By default, all Bitcoin wallets listed on Bitcoin.org add what they think is an appropriate fee to your transactions; most of those wallets will also give you chance to review the fee before sending the transaction.
Transaction fees are used as a protection against users sending transactions to overload the network and as a way to pay miners for their work helping to secure the network. The precise manner in which fees work is still being developed and will change over time. Because the fee is not related to the amount of bitcoins being sent, it may seem extremely low or unfairly high. Instead, the fee is relative to the number of bytes in the transaction, so using multisig or spending multiple previously-received amounts may cost more than simpler transactions. If your activity follows the pattern of conventional transactions, you won't have to pay unusually high fees.
What if I receive a bitcoin when my computer is powered off?
This works fine. The bitcoins will appear next time you start your wallet application. Bitcoins are not actually received by the software on your computer, they are appended to a public ledger that is shared between all the devices on the network. If you are sent bitcoins when your wallet client program is not running and you later launch it, it will download blocks and catch up with any transactions it did not already know about, and the bitcoins will eventually appear as if they were just received in real time. Your wallet is only needed when you wish to spend bitcoins.
What does "synchronizing" mean and why does it take so long?
Long synchronization time is only required with full node clients like Bitcoin Core. Technically speaking, synchronizing is the process of downloading and verifying all previous Bitcoin transactions on the network. For some Bitcoin clients to calculate the spendable balance of your Bitcoin wallet and make new transactions, it needs to be aware of all previous transactions. This step can be resource intensive and requires sufficient bandwidth and storage to accommodate the full size of the block chain. For Bitcoin to remain secure, enough people should keep using full node clients because they perform the task of validating and relaying transactions.
What is Bitcoin mining?
Mining is the process of spending computing power to process transactions, secure the network, and keep everyone in the system synchronized together. It can be perceived like the Bitcoin data center except that it has been designed to be fully decentralized with miners operating in all countries and no individual having control over the network. This process is referred to as "mining" as an analogy to gold mining because it is also a temporary mechanism used to issue new bitcoins. Unlike gold mining, however, Bitcoin mining provides a reward in exchange for useful services required to operate a secure payment network. Mining will still be required after the last bitcoin is issued.
How does Bitcoin mining work?
Anybody can become a Bitcoin miner by running software with specialized hardware. Mining software listens for transactions broadcast through the peer-to-peer network and performs appropriate tasks to process and confirm these transactions. Bitcoin miners perform this work because they can earn transaction fees paid by users for faster transaction processing, and newly created bitcoins issued into existence according to a fixed formula.
For new transactions to be confirmed, they need to be included in a block along with a mathematical proof of work. Such proofs are very hard to generate because there is no way to create them other than by trying billions of calculations per second. This requires miners to perform these calculations before their blocks are accepted by the network and before they are rewarded. As more people start to mine, the difficulty of finding valid blocks is automatically increased by the network to ensure that the average time to find a block remains equal to 10 minutes. As a result, mining is a very competitive business where no individual miner can control what is included in the block chain.
The proof of work is also designed to depend on the previous block to force a chronological order in the block chain. This makes it exponentially difficult to reverse previous transactions because this requires the recalculation of the proofs of work of all the subsequent blocks. When two blocks are found at the same time, miners work on the first block they receive and switch to the longest chain of blocks as soon as the next block is found. This allows mining to secure and maintain a global consensus based on processing power.
Bitcoin miners are neither able to cheat by increasing their own reward nor process fraudulent transactions that could corrupt the Bitcoin network because all Bitcoin nodes would reject any block that contains invalid data as per the rules of the Bitcoin protocol. Consequently, the network remains secure even if not all Bitcoin miners can be trusted.
Isn't Bitcoin mining a waste of energy?
Spending energy to secure and operate a payment system is hardly a waste. Like any other payment service, the use of Bitcoin entails processing costs. Services necessary for the operation of currently widespread monetary systems, such as banks, credit cards, and armored vehicles, also use a lot of energy. Although unlike Bitcoin, their total energy consumption is not transparent and cannot be as easily measured.
Bitcoin mining has been designed to become more optimized over time with specialized hardware consuming less energy, and the operating costs of mining should continue to be proportional to demand. When Bitcoin mining becomes too competitive and less profitable, some miners choose to stop their activities. Furthermore, all energy expended mining is eventually transformed into heat, and the most profitable miners will be those who have put this heat to good use. An optimally efficient mining network is one that isn't actually consuming any extra energy. While this is an ideal, the economics of mining are such that miners individually strive toward it.
How does mining help secure Bitcoin?
Mining creates the equivalent of a competitive lottery that makes it very difficult for anyone to consecutively add new blocks of transactions into the block chain. This protects the neutrality of the network by preventing any individual from gaining the power to block certain transactions. This also prevents any individual from replacing parts of the block chain to roll back their own spends, which could be used to defraud other users. Mining makes it exponentially more difficult to reverse a past transaction by requiring the rewriting of all blocks following this transaction.
What do I need to start mining?
In the early days of Bitcoin, anyone could find a new block using their computer's CPU. As more and more people started mining, the difficulty of finding new blocks increased greatly to the point where the only cost-effective method of mining today is using specialized hardware. You can visit BitcoinMining.com for more information.
Is Bitcoin secure?
The Bitcoin technology - the protocol and the cryptography - has a strong security track record, and the Bitcoin network is probably the biggest distributed computing project in the world. Bitcoin's most common vulnerability is in user error. Bitcoin wallet files that store the necessary private keys can be accidentally deleted, lost or stolen. This is pretty similar to physical cash stored in a digital form. Fortunately, users can employ sound security practices to protect their money or use service providers that offer good levels of security and insurance against theft or loss.
Hasn't Bitcoin been hacked in the past?
The rules of the protocol and the cryptography used for Bitcoin are still working years after its inception, which is a good indication that the concept is well designed. However, security flaws have been found and fixed over time in various software implementations. Like any other form of software, the security of Bitcoin software depends on the speed with which problems are found and fixed. The more such issues are discovered, the more Bitcoin is gaining maturity.
There are often misconceptions about thefts and security breaches that happened on diverse exchanges and businesses. Although these events are unfortunate, none of them involve Bitcoin itself being hacked, nor imply inherent flaws in Bitcoin; just like a bank robbery doesn't mean that the dollar is compromised. However, it is accurate to say that a complete set of good practices and intuitive security solutions is needed to give users better protection of their money, and to reduce the general risk of theft and loss. Over the course of the last few years, such security features have quickly developed, such as wallet encryption, offline wallets, hardware wallets, and multi-signature transactions.
Could users collude against Bitcoin?
It is not possible to change the Bitcoin protocol that easily. Any Bitcoin client that doesn't comply with the same rules cannot enforce their own rules on other users. As per the current specification, double spending is not possible on the same block chain, and neither is spending bitcoins without a valid signature. Therefore, It is not possible to generate uncontrolled amounts of bitcoins out of thin air, spend other users' funds, corrupt the network, or anything similar.
However, powerful miners could arbitrarily choose to block or reverse recent transactions. A majority of users can also put pressure for some changes to be adopted. Because Bitcoin only works correctly with a complete consensus between all users, changing the protocol can be very difficult and requires an overwhelming majority of users to adopt the changes in such a way that remaining users have nearly no choice but to follow. As a general rule, it is hard to imagine why any Bitcoin user would choose to adopt any change that could compromise their own money.
Is Bitcoin vulnerable to quantum computing?
Yes, most systems relying on cryptography in general are, including traditional banking systems. However, quantum computers don't yet exist and probably won't for a while. In the event that quantum computing could be an imminent threat to Bitcoin, the protocol could be upgraded to use post-quantum algorithms. Given the importance that this update would have, it can be safely expected that it would be highly reviewed by developers and adopted by all Bitcoin users.
Jan-19-2018 02:57:45 PM
|Facebook Investor and PayPal Co-founder Peter Thiel Bets Big on Bitcoin – and Wins
Facebook early investor and PayPal co-founder Peter Thiel bought millions of dollars’ worth of Bitcoin through his VC firm, Founders Fund, and that number is cited to be worth hundreds of millions today.
Venture Capitalists Jumping on the Bitcoin Bandwagon
Peter Thiel runs the Founders Fund, a venture capitalist firm. Reports are showing that the firm purchased somewhere between $15 and 20 million dollars’ worth of the Bitcoin throughout 2017, and thanks to the massive price surge that investment is now worth hundreds of millions of dollars.
The leading cryptocurrency is up over 1,400% since the beginning of 2017, with a recent all-time high of $20,000 being hit in early December. Since the original report, which was published in The Wall Street Journal, the price of Bitcoin has jumped just over 11%, topping out at $15,000 at the time of writing. It is unknown if the firm as sold any of its current holdings, but the Founder’s Fund Bitcoin portfolio is assumed to be the largest piece of the firm’s $1.3 billion venture fund.
Mainstream Adoption Continues
Many traditional financial institutions have turned away from cryptocurrency, with worries about volatile prices and overall legitimacy at the top of the list of their concerns. But in recent months, however, some have overcome their reluctance and are actually beginning to integrate Bitcoin and other digital currencies into their systems. CME Group and CBOE are only two such companies to do so, having launched Bitcoin futures trading on their respective exchanges in the last weeks of 2017.
Elsewhere in the world, some countries are looking to adopt existing cryptocurrencies while others have plans to launch their own state-sponsored versions. In Japan, Bitcoin is already treated as legal tender, while Russia is currently drafting legislation to regulate cryptocurrencies and ICOs. ICOs, in particular, have raised red flags in the past, and regulation could bring some stability to the crypto space. Belarus has completely legalized Bitcoin and ICOs, and on top of this made them completely tax-free for five years.
Jan-3-2018 09:21:53 AM
|Tech Investor Believes 2018 Could Be the Year That ‘Legitimizes’ Bitcoin
Legendary tech investor Roger McNamee believes that 2018 could be a decisive year for Bitcoin, allowing it to become fully legitimate in the eyes of the financial world.
While a number of financial analysts are bullish on Bitcoin, many others are still quite hesitant on the eventual fate of the cryptocurrency. Such doubters point to the crypto’s ongoing volatility and the number of major drops in value over the last year. However, tech investor Roger McNamee believes that the upcoming year could be a turning point for Bitcoin. In fact, he believes it’s quite possible that Bitcoin could become fully legitimate in the eyes of the business world.
2018 Could Make or Break Bitcoin
In an interview on CNBC, McNamee said that Bitcoin could be considered legit if is withstands a crash and sees enough gains in 2018. He elaborated by saying:
[Bitcoin is] still a very small market in the context of the larger financial world, but it has had a huge year. We’ve done it around a speculative mania. If a mania goes on long enough, it becomes self-fulfilling. Even after a crash, what follows is a legitimate industry.
McNamee goes on to say that the cryptocurrency needs to keep investors on their toes and has to stick around long enough to become accepted. He adds:
With the amount of activity going on around it, there are people willing to invest the kind of dollars it takes to make a thing like bitcoin into a long-term part of the financial market.
A Proven Track Record
Roger McNamee has proven to have great instincts. He was an early investor in Facebook and told Mark Zuckerberg that he should not sell the company back when it received a major offer of $750 million. Bill Gates considers McNamee a “great sounding board” for many of the Microsoft co-founder’s ideas. Then there’s the fact that he made venture capital investments in a small game company by the name of Electronic Arts, which is now the second-largest game company in Europe and the Americas.
As for Bitcoin, McNamee thinks that the cryptocurrency is still too new for many investors to understand. However, he thinks 2018 will open some eyes on how Bitcoin could play a role in the financial markets. Looking ahead to the new year and Bitcoin, he says:
You’ll have these big swings, up and presumably down, as well. And, you know, wherever that settles out I think will tell us a lot about the role of bitcoin long-term.
Overall, McNamee also thinks that, no matter how the year treats Bitcoin, it won’t be the end of the story for the virtual currency. It is refreshing to hear someone express pragmatic optimism on how Bitcoin could break through those final trust barriers that the financial world has erected. He fully understands that there are going to be ups and downs, but what is important is that Bitcoin continues to stick around and shows staying power.
Dec-30-2017 08:08:53 AM
|Investor Ari Paul Bets $1 Million That Bitcoin Price Hits $50,000 by 2018
According to Business Insider, Ari Paul, the chief information officer and co-founder of cryptocurrency hedge fund Blocktower, has purchased $1 million worth of options that offers a 30-fold payout if the bitcoin price hits $50,000 by the end of 2018, on behalf of Blocktower.
“On Wednesday, an unidentified entity made a $1 million bet on bitcoin trading above $50,000 by next December. The cryptocurrency hedge fund BlockTower Capital was behind the bet, people familiar with the matter told Business Insider.”
Blocktower’s $1 Million Bet
Immediately after the initial report on the $1 million bet placed on LedgerX by the Wall Street Journal, Paul tweeted
At the time, prior to the disclosure of the investors behind the call, LedgerX CEO Paul Chou hinted that an institution has made the call, not an individual.
“Without a doubt, there are institutions out there that are looking at these types of trades or have done these types of trades. It’s not an individual, let’s put it that way.”
In an interview with CNBC’s Fast Money, Paul explained that the option contracts Blocktower has purchased expire if the price of bitcoin fails to reach $50,000 by the end of 2018. But, if it does, it pays out the firm on a 30 to 1 odds. Hence, a $1 million bet on the LedgerX options platform on the price of bitcoin achieving $50,000 would generate Blocktower a $29 million in profit.
The option contracts Blocktower purchased expire by the end of 2018, but are available for cash in anytime throughout the year. If the price of bitcoin surpasses $50,000 earlier than December, the contracts can be cashed in.
“This call costs $3,600. If bitcoin settles anywhere below $50,000 next year, it will expire worthless. But if bitcoin goes to $100,000, it pays 30 to 1 [30-fold]. Bitcoin is volatile. This is a hyper volatile asset. Bitcoin is up more than 1,400 percent this year. It also falls 30 percent almost every other month. These calls are a bet that if its volatile to the upside we can easily see over $50,000 next year,” Paul explained.
Why are Investors so Optimistic?
If the price of bitcoin reaches $50,000, it would place its market valuation at over $1 trillion. Given that the market cap of gold is at around $8 billion, it would elevate bitcoin to an optimal position to challenge gold to evolve into the world’s premier store of value and currency.
Investors are highly optimistic in the price trend of bitcoin because of the exponential increase in its adoption. In 2017 alone, some of the global market’s largest financial institutions including the New York Stock Exchange (NYSE), Chicago Board Options Exchange (Cboe), Nasdaq, Cantor Fitzgerald, Goldman Sachs, and JPMorgan have publicly expressed their support for bitcoin.
Governments of leading bitcoin markets such as Japan, the US, and South Korea have implemented practical regulations to facilitate the growth of bitcoin businesses, instead of restricting it.
Until the end of 2017, the price of bitcoin has been able to reach $15,000 without the entrance of institutional investors. With tens of billions of dollars in institutional money expected to flow into the bitcoin market, investors have become extremely confident in the growth trend of bitcoin in the long-term.
Dec-28-2017 08:15:34 AM
|Bitcoin Futures Might Have Paved The Way For A Bitcoin ETF To Finally Hit Markets
The fight for a Bitcoin ETF might just have been reignited by the introduction of Bitcoin futures to the market.
The battle to get a bitcoin-based exchange traded fund (ETF) listed in the US has been a long and hard-fought one, with a number of different individuals and entities having mounted their own attempts over the past couple of years.
Perhaps most notably, the Winklevoss twins tried to get their Winklevoss Bitcoin Trust ETF past the US Securities and Exchange Commission but failed, when it was shot down in the latter part of March this year. Shortly before the Winklevoss’ efforts, the SolidX Bitcoin Exchange-Traded Fund was also turned down by the SEC. In both instances, the volatility of the underlying asset as well as the perceived lack of regulation in the sector was blamed for the agency’s decision.
The Winklevoss application is still reportedly under review, but it has been under review since April and (as of December 2017) we’ve seen no progress made towards a resolution. That is, perhaps, until now.
Futures Have Paved The Way For An ETF
With the advent of Bitcoin futures becoming available as tradable assets on mainstream US exchanges (first, through the CBOE listing that just took place and second, the CME Group listing that’s set to take place at the end of this week), the chances of the SEC in the US green-lighting a bitcoin ETF just increased dramatically.
And this isn’t going unnoticed in mainstream media.
According to an article published today in The Wall Street Journal, there is a crucial difference to the way any such SEC approved ETF would work, however, as compares to the structure that the Winklevoss twins went after and subsequently had turned down earlier this year – the ETF would use bitcoin futures as a derivative asset, as opposed to bitcoin itself.
What Is An ETF?
For anyone unfamiliar with the concept of an ETF, they are an index type asset that is designed to represent the price fluctuations of an underlying asset – more often than not, a commodity. With a gold ETF, as the price of gold rises, so should the price of the ETF. The same is true in reverse.
The difference between a bitcoin ETF and a bitcoin futures ETF, therefore, would be that the price of the ETF would be much more representative of speculative expectations, based on the fact that the futures pricing would be expectations based (as opposed to a major exchange daily clearing price, for example).
Regardless of the intricacies, we wouldn’t be surprised if the Winklevoss twins had another go at their application with the SEC very near term.
Dec-14-2017 07:03:13 AM
|Winklevoss Twins Predict a Multi-trillion Dollar Market Cap for Bitcoin
There is nothing wrong with being ambitious in the Bitcoin world. Especially when it comes to the Bitcoin price, the sky’s the limit. The Winklevoss twins are convinced this is only the beginning for the world’s leading cryptocurrency. More specifically, they see Bitcoin hit a multi-trillion dollar market cap sooner or later. If true, that would certainly shake things up quite a bit in the financial sector.
While Bitcoin has a lot of issues, its value is still soaring. Investors and speculators remain confident this currency will easily surpass $20,000 very soon So far, that seems not to be the case, but things can always change in this regard. The Winklevoss twins think it is only a matter of time. They can picture a world in which very Bitcoin is worth $100,000 or more. That is very, very ambitious, to say the very least. Then again, after the bullish year we’ve had, nothing is impossible it seems.
Winklevoss Twins Remain Bullish
A multi-trillion dollar market cap for Bitcoin would be quite spectacular. One has to keep in mind the value of all BTC combined was less than $30bn not that long ago. Right now, it is well over $225bn and climbing. Although the price has hit a major snag, there will be a rebound eventually. It will all depend on how the Bitcoin futures play out in the coming weeks. If successful, the trillion-dollar market cap for BTC isn’t too far away.
No one knows for sure how this plays out, though. While the Winklevoss twins remain ambitious, not everyone shares this sentiment. It is possible we have reached the glass ceiling for Bitcoin until the technology vastly improves. No one likes a store of value that’s nearly impossible to move around without paying an arm and a leg. There are a lot of problems which need to be resolved in the future. The longer this takes, the more problematic things will get for Bitcoin.
At the same time, the Winklevoss twins have been rather accurate with their predictions in the past. One can argue 2017 has been a fluke year, for all intents and purposes. Next year may be incredibly bearish, for all we know. Whether or not their prediction will come true, remains a big mystery. Even the Winklevoss twins don’t know if and when such a major milestone in market cap will be achieved. It’s good to have dreams, but we also have to address Bitcoin’s problems. So far, those have been seemingly largely ignored.
Dec-10-2017 04:26:20 AM
|California Law Firm Provides Legal Counsel to Crypto Users
Cryptocurrency enthusiasts are susceptible to losing funds in many different ways. Aside from human error, there are risks posed by failed ICOs, hacked exchanges, or other calamities. Taylor-Copeland Law is one of the first law firms specializing in these issues. We may be witnessing the creation of a new niche within the legal system as we know it today.
FOCUSING ON EXCHANGES AND ICO MISHAPS
It was only a matter of time until law firms started paying attention to cryptocurrency. Especially with all the issues arising over the past few years, there is a booming market for all companies specializing in cryptocurrency. With so many exchanges getting hacked, disappearing, or failing to provide optimal services, a lot of users are often left frustrated.
Moreover, the initial coin offering industry poses several major risks to consumer funds. No one knows for sure if any given ICO project is legitimate or how things will play out once money has been raised. The Tezos ICO is a good example of how things can go awry pretty quickly if problems aren’t addressed in a timely manner. However, there have often been no legal repercussions for exchanges or ICO teams that fail to deliver on their original promises.
That situation is finally changing, thanks to law firms such as Taylor-Copeland Law. The company has a dedicated page on its website explaining how blockchain technologies and cryptocurrencies will have an impact on our daily lives. However, with the regulatory and legal framework still making it difficult for businesses and individuals to comply with the law, something will need to change.
This is why Taylor-Copeland Law decided to provide the guidance investors may need when it comes to the intersection of law and crypto. They claim to specialize in aiding cryptocurrency traders harmed by exchange failures, including so-called “flash crashes“. Considering that we’ve seen a lot more of those crashes in recent months, there are a lot of legal disputes waiting to happen, by the look of things.
Furthermore, the company also provides services relating to initial coin offerings. A lot of investors are harmed by projects and teams which misrepresent their projects and intentions before or during their crowdsales. There need to be legal remedies in this regard as well, which is what this firm aims to provide. Additionally, they focus on the taxation of crypto investment gains and help companies check all the right legal boxes before they decide to organize an ICO.
It is expected that we will see even more law firms focus on these specific areas in the near future. There is a growing contingent of cryptocurrency users who will require legal counsel at one point or another. Whether or not all cryptocurrency users will decide to pursue that option is something else entirely. A lot of users may be somewhat ashamed to admit they were victims of an exchange mishap or a malicious ICO project.
Dec-4-2017 05:27:13 AM
|Bitcoin Investors See a Future in Cryptocurrency
When Bitcoin made its debut in 2009, its price was less than $1. The cryptocurrency has weathered regulations and hard forks to become a billion-dollar industry that makes up more than 50 percent of the total cryptocurrency market cap. While some investors bet on the short-term, there are those that see a long-term future.
Not All Bitcoin Investors are Mark Shulgasser
Mark Shulgasser is one of the investors who see a future in bitcoin. His journey into Bitcoin started in 2016 when he spent $1,200 on two bitcoins. Just like his hold on the long-term survival of Bitcoin, he has been perusing his computer screen since 2016 and enjoying his Delaware River waterfall.
When Bitcoin hit the $11,000 mark just this December, Mark’s net worth moved up to $22,000 with his 2 bitcoins. This keeps him glued to his computer screen more. He now invests in other cryptocurrencies and has cashed in $8,000 since he started navigating ICOs and cryptocurrencies, including NEO and Bitquence. Though he has never added any additional cash to his portfolio, he says his involvement in the cryptocurrency is a long-term vision.
Mark isn’t Alone – LendEDU Sees the Future Too
Mark isn’t alone. Between 9th and 13th November 2017, LendEDU surveyed about 564 American Bitcoin investors and found that 21 percent of them had a long-term view of Bitcoin and would hold it for 7 years or longer. 39 percent of them said they see a future in Bitcoin and will hold it for only 1 to 3 years. In effect, all is in the long-term when we consider the investment atmosphere. Interestingly, the average price at which the survey respondents said they would sell their Bitcoin is $196,165 per coin.
Standpoint Research’s Moas Sees Bitcoin Overpowering Gold
Standpoint Research’s Ronnie Moas, a big-time Bitcoin investment magnate, believes that the price expectations revealed in the LendEDU survey are a little ambitious compared to his own medium-term projects, but they aren’t altogether impossible to reach, either – it will simply take longer. After having recently raised his “split-adjusted” 2018 price target on Bitcoin from $11,000 to $14,000, he has raised it yet again from $14,000 to $20,000.
Moas’ prediction for Bitcoin’s long-term future?
Today, the value of all bitcoin is at about $130 billion (over $350 billion invested overall in cryptocurrencies), but the world has $8 trillion invested in gold right now. An argument can be made for bitcoin to have the same valuation.
Dec-4-2017 04:34:15 AM
|Bitcoin Breaks the $11,000 Mark After Climbing by $3,000 in a Week
Investors who bought Bitcoin just ahead of Thanksgiving certainly have something to be thankful for. Bitcoin prices breached $11,300 Wednesday for the first time, representing a rise of over $3,100 in a week.
It’s a stunning rise for the cryptocurrency, which only just broke the psychologically important milestone of $10,000 hours earlier—despite financial heavyweights voicing their concerns about an asset with limited regulatory clarity.
But several major governments, including the U.S., have signaled a willingness to regulate the cryptocurrency space rather than outright ban it. Meanwhile, institutional investors have also been jumping onto the bandwagon, with the Chicago Mercantile Exchange saying that due to client demand, it would launch Bitcoin futures by the end of 2017.
Then on Wednesday, the Wall Street Journal reported that both Nasdaq and Cantor Fitzgerald are looking to launch bitcoin derivatives. A futures market for Bitcoin would likely usher in more institutional investors, adding more liquidity — and potentially stability — to the cryptocurrency market.
“Demand pressure is essentially driven by two things. Firstly, the increasing awareness by both the public and investors that cryptocurrencies are here to stay, and secondly, the increasing professionalization of cryptocurrency trading,” said Daniele Bianchi, an Assistant Professor in the Finance Group at the Warwick Business School, in an email.
Bitcoin’s price has risen dramatically over the past year. While it took nearly four months to climb from $1,000 to a closing price of over $2,000, it soared to $10,000 from $9,000 in the course of about three days.
Nov-29-2017 05:48:27 PM
|“Not True”: Elon Musk Puts Satoshi Rumors to Bed
On November 26, 2017, we broke the news that a former SpaceX employee claimed Elon Musk was “probably” Satoshi Nakamoto, the founder of Bitcoin. Bitcoin was founded in 2008 and claimed under the pseudonym “Satoshi Nakamoto”, the rumored holder of over one million Bitcoins.
The mystery of Satoshi has been a hot topic in the cryptocurrency world, with entrepreneurs often claiming and denying responsibility. Many people jumped at the chance to elicit a response from Musk, with little success on the first day.
In less than 48 hours, the news reached Musk, who turned to Twitter to debunk the claims in true Musk fashion:
“Not true. A friend sent me part of a BTC a few years, but I don’t know where it is.”
The rumor originated from this Medium post from Sahil Gupta, a current student at Yale University and previous intern at SpaceX. The original coverage of Gupta’s post was widely covered across both traditional and niche media, bringing together a mix of supportive and skeptical reactions. Naturally, the majority of responses were skeptical:
“Obviously, and on the 7th day Musk rested.” – Phil Thompson
“Musk is a serial self-promoter. Had he come up with anything 1/1000 are groundbreaking we’d have known about it.” – Frayed_Knot
“I will debunk this right now. There is no way Elon Musk is Satoshi. He would never create a currency system that uses so much energy. One bitcoin transaction uses the amount of power an entire home uses in a full week. No way would he impact the environment like this.” – Adam W.
“Yes and no doubt one of his P.R. companies facilitated this article.” – Dave
The last comment can be reasonably debunked. Musk is capable of many things, but it is safe to say he did not create Bitcoin.
With Musk’s recent response, the mystery of Satoshi lives on and remains to be one of the greatest mysteries in the cryptocurrency world.
Nov-29-2017 02:02:59 AM
|$220 Million Hedge Fund to Join the Bitcoin Craze
As Bitcoin prices continues to reach new highs, major investors are thinking about getting some skin in the cryptocurrency game.
Many finance and tech experts have recently called Bitcoin a “bubble” and “tulip mania 2.0” but Bitcoin has managed to thrive despite these heavy accusations, and this week it hit a new all-time high price.
Many investors and hedge funds are now planning to invest in Bitcoin, ICOs, and other cryptocurrencies. One of these funds is Old Mutual Gold & Silver, which oversees $220 million of precious metal equities. According to a recent Bloomberg article, the fund has started to invest in the digital currency since April 2017. The fund has been steadily investing at least 5% in Bitcoin and then uses the profits to invest in precious metals like gold and silver.
Ned Naylor-Leyland, Manager of Old Mutual Gold & Silver, stated following in the report:
Bitcoin was explicitly designed to be digital gold. So if you’re going to have a small proportion of a fund in bitcoin, it should be in a gold fund, because that’s exactly the point. It’s about bringing the ownership of disciplined money into the modern world. Bitcoin is paving the way for the reintroduction of gold as global money.
Their unique strategy seems to be paying off since the cryptocurrency managed to climb from April’s price of $1240 to today’s $8203, which equals an impressive increase of over 550%.
Since Bitcoin’s meteoric rise, many investors have now started to primarily focus on cryptocurrencies and Initial Coin Offerings. Cryptocurrencies have given many investors stock and gold investors ‘fresh air’, and many experts believe that the market will grow even bigger in the next couple of months.
The famous investor Mike Novogratz, recently forecasted that Bitcoin may rise up to $10,000 and Ethereum as high as $500 by this year’s end. Analysts believe that once Bitcoin futures hit the markets, more institutional investors will pour their money into it and other digital assets.
Nov-24-2017 05:38:03 AM
|Bitcoin Breaches 8000, Asian Countries Recognize Advantages
Bitcoin saw an inversion of its low esteem and not just achieved its past highs. It has since seen its value bounce over the $8,000 mark with highs of $8,100, with various new records. The Bitcoin value has since retreated down to exchanging at 7,900-8,000 yet this seems to be impermanent.
Of course, inquiries have emerged from this, and interest over the most recent couple of long stretches of how to characterize the cryptocurrency has sparked. Having experienced sporadic vacillation before, nations are thinking that the predicament is hard to group. Bitcoin has seen itself recognized an item by a few markets due to some extent to its instability.
Despite this, many are lecturing of the utilization for bitcoins in Asia in cross-outskirt exchanges, which can be speedier and less expensive than those coursed through conventional channels on the grounds that bitcoin takes out mediator charges and time imperatives forced by outsider establishments.
Last year, in Hong Kong, running close by Future Bank Asia and Fintech Show Asia, Cards and Payments Asia was a gathering and display completely devoted to the Asian installments community highlighting fundamental subjects, for example, installment interruption and development, installments and the client encounter, advanced monetary standards and wallets, versatile Bitcoin wallet, Bitcoin and computerized monetary standards, information investigation and then some.
China, a giant in bitcoin mining, and Singapore, a known center for tech and backend services, are helping the development of the business in Asia. Even Malaysia is taking a gander at fintech. Bitcoins can be exchanged from the Philippines to Peru in minutes. There is no bank to back off the procedure, level expenses, or stop the exchange. You can pay your neighbors a similar way you pay an individual from your family in another nation. This is the cryptocurrency innovation, and it’s making huge leaps in Asia. It is only a matter of time before the rest of the world follow the suit.
Nov-22-2017 05:46:38 AM
|Mark Yusko Is Confident Bitcoin Can Reach a Value of $800,000
We have heard some very interesting Bitcoin price predictions over the past few years. Some individuals such as Boston University’s Mark T. Williams, better known as Professor Bitcorn, expected Bitcoin to die a few years ago. Others think now is only the start of a major Bitcoin price rally. No one knows for sure who is right and who is wrong in this regard. Morgan Creek Capital Management CEO Mark Yusko is confident that one Bitcoin will be worth US$800,000 someday.
WHAT IS THE TRUE VALUE OF ONE BITCOIN?
Surprisingly, this is perhaps one of the most difficult questions to answer right now. No one can deny there is a lot of value in Bitcoin, but there are also some big flaws which need to be addressed sooner rather than later. From a speculative point of view, Bitcoin could be worth millions of dollars, for all we know. Mark Yusko, CEO of Morgan Creek Capital Management, is only slightly less bold in stating that it could certainly reach US$400,000 in the long term.
Price predictions always get a lot of attention, and Yusko’s bold claim is no different. What with all of the Bitcoin Cash drama and the SegWit2x debacle, reaching US$400,000 per BTC may be difficult, to say the least. At the same time, we have seen the Bitcoin price suffer from some major volatility over the past few years and only come out stronger in the end.
No one can deny Bitcoin has pleasantly surprised a lot of people. After the major price crash of 2014, a lot of speculators and investors assumed it would soon be game over for Bitcoin. Surprisingly, that is not what happened at all, and the Bitcoin price eventually reached an all-time high of over US$7,600 not long ago. It has been an uphill battle ever since, mind you, but the world’s leading cryptocurrency has not given up by any means. Whether or not we will see a new all-time high later this year is highly debatable, though.
Yusko has explained why he made such a bold prediction at this point in time. It seems he’s been coming across the name Bitcoin a lot more often since 2011, which clearly indicates the cryptocurrency is doing something right. He is also a big Bitcoin investor, although he’s never clarified how many bitcoins he actually holds right now. It is evident a rising Bitcoin price would be in Yusko’s best interest as well.
Bitcoin has proven to be a disruptive force which can’t be ignored whatsoever. Banks and financial institutions all over the world have been attempting to discredit Bitcoin for many years now, but they are starting to display a more open mind towards the world’s leading cryptocurrency these days. Bitcoin may be a bubble in the minds of some people, but the rest of the world seems to vastly disagree. Then again, no one should expect banks not to oppose Bitcoin either, as it is something that genuinely threatens their business model.
Yusko’s current high level of confidence in Bitcoin is somewhat unexpected, though. He feels confident about Bitcoin’s price increase mainly because the internet of money is a very real thing. He also thinks Bitcoin is as important as the internet was back in the 1990s. It is certainly true Bitcoin may be here to stay, but only time will tell whether or not that is actually the case. To be sure, most people wouldn’t mind seeing a Bitcoin price of US$800,000 in the coming years.
Nov-14-2017 04:01:38 AM
|Ahead of the Curve: Traditional Stocks Capitalizing on the Bitcoin Boom
With the crypto craze seemingly only beginning, a few non-crypto companies have leveraged themselves to capitalize early. And it’s these companies’ stocks that are reaping the benefits of such first-mover status in the explosive crypto space.
Early Birds Get the Worms: CME, Graphics Processors Companies Are Ones to Watch
Graphics Processing firms like AMD and NVIDIA have had strong performances in the stock market so far in 2017 courtesy of an explosion of user interest in mining cryptocurrencies in general, particularly the ASIC-resistance Ethereum blockchain.
And in 2018, the shares of the Chicago Mercantile Exchange Group (CME) look poised to enjoy the “crypto bump” – a potential forthcoming investment boon on the heels of the CME’s fresh announcement that they’ll be listing Bitcoin futures in Q4 2017.
Indeed, the three aforementioned firms are among the first in the world whose shares are being increasingly tethered to, and boosted by, the performance of the ever-wild cryptocurrency space.
For CME’s part, they’re among the largest futures and options exchanges in the world, meaning they’ll be well positioned to take advantage of the increasingly rocketing interest in cryptos in mainstream and institutional circles.
And for GPU manufacturers like AMD and NVIDIA, 2017 has already been a fruitful year – mainly thanks to the unprecedented interest in GPU mining that’s materialized over the past 11 or so months.
This booming interest is exemplified perfectly by the performance of NVIDIA’s shares, rising more than 50% between January and August alone. The crypto-boost was a sight for sore eyes for the firm, as their bread-and-butter gaming sales were down more than expected in Q1 and Q2.
NVIDIA CEO Jensen Huang told Marketwatch in August that cryptocurrencies’ effects on the stock market aren’t going anywhere anytime soon:
Crypto is here to stay, and the market will grow to be quite large. It’s not likely to go away anytime soon. There will be more currencies to come – they will come from different nations. We stay very close to the market, and understand the dynamics very well.
Perhaps the interesting aspect of investing in shares like NVIDIA’s or CME’s, then, is that doing so allows investors to capitalize from the periphery of the crypto community without actually having to get down into the nitty-gritty of cryptocurrencies – especially at a time when the space is still premature and volatile in “the trenches,” as it were.
Traditional, more risk-averse traders might find these crypto-related, but not crypto-based, stocks attractive alternatives to investing in cryptocurrencies themselves in 2018 and beyond.
Goldman Sachs Among Darkhorse Stocks for Crypto-Watchers to Look Out For?
With a recent report out of the ever-reputable Wall Street Journal claiming powerhouse trading firm Goldman Sachs is looking to start their own Bitcoin trading operation, there could be a flight of speculative investors to Goldman’s shares in the weeks ahead.
Nothing is official yet, of course, but Goldman Sachs’ CEO Lloyd Blankfein hasn’t exactly been mum on the topic of cryptocurrencies as of late.
In a recent interview with CNBC, Blankfein explained that “I wouldn’t preclude” setting up a Bitcoin trading desk at Goldman Sachs.
And that would be a titanic legitimizing move for the entire crypto space if it really were to materialize. All eyes are on Blankfein and Goldman Sachs for now.
Nov-13-2017 05:24:16 AM
|Are Millennials Beginning to Prefer Bitcoin Over Stocks?
According to a recent survey by Blockchain Capital, 1 out 3 Millennials would rather invest in Bitcoin than traditional stocks.
Most millennials nowadays aren’t thinking about financial investments and savings yet. The stock market might not be the most popular topic for millennials, but social media apps like Snapchat and Instagram are. Data shows millennials aren’t investing as much in stocks and bonds like baby boomers do.
A recent article in Barron’s states that most millennials prefer cash over stocks as investments. Experts are blaming this phenomenon on the famous dot-com bubble and the big stock market crash of 2008. Apparently, these major events are the reason why millennials aren’t trusting the stock market as their parents did. Stocks may seem too risky for most millennials, but some think that Bitcoin might be an alternative investment form for them.
Bitcoin over Stocks
Bitcoin has drawn a lot of attention over this year. Recently, the digital currency hit a new all-time high price of $7751 and a total market cap valuation of over $129 billion. As Bitcoin is rapidly growing, more and more traditional investors are looking to invest into the cryptocurrency. Some of these investors include young millennials.
According to a new survey done by noted Bitcoin venture capital firm, Blockchain Capital, 27% of the questioned millennials would rather own $1,000 worth of Bitcoin than stocks. These results might not be as surprising as it seems since Bitcoin has outperformed every other future, commodity or stock this year. The survey also showed that 42% of the questioned millennials are familiar with Bitcoin, and 15% of people over 65 were somewhat familiar with Bitcoin and cryptocurrencies.
A security called Bitcoin Investment Fund, that is tracking the bitcoin price, has already risen this year by as much as 661%. Experts believe that as Bitcoin ETFs officially become available, more and more people will start investing in the digital currency.
Nov-13-2017 04:56:40 AM
|Bitcoin Hovers at $6,300 as Bitcoin Cash Soars, and Bitcoin Classic Shuts Down
Bitcoin Hovers at $6,300 as Bitcoin Cash Soars, and Bitcoin Classic Shuts Down
Treasury Sec. Mnuchin Says ‘We’re Looking Closely’ at Bitcoin, Cryptocurrencies
Silk Road Secret Service Agent Sentenced to 2 Additional Years After Stealing More Bitcoins
Bitcoin Price Falls $1200 As Bitcoin Cash Steals Fork Limelight
BitcoinBitcoin CashBitcoin PriceMarkets and PricesNewsNews teaser
Defiantly, Bitcoin struggles to keep itself above $6,300 USD after the Segwix2x hard-fork flop. Indeed, after the cryptocurrency dropped below $6,273 USD on November 11, 2017, Bitcoin staggers and crouches, as if to gather the impulse to break the $6,500 USD psychological resistance level again. Still, at $6,300 USD, Bitcoin remains poised to become the undisputed best-performing currency for 2017 with a colossal gain of over 750 percent.
Concurrently, Bitcoin Cash reached an all-time high above $1,300 USD. Moreover, Bitcoin Classic shut down, and Bitcoin Gold is getting ready to be launched on Sunday, November 12, 2017.
Bitcoin Cash Reached an All-Time High and Bitcoin Classic Shuts Down
In the aftermath of the Segwit2x flop, many significant events have occurred. For example, the calling off of the Segwit2x hard-fork, which was to take place on November 16, 2017, caused Bitcoin’s price to plunge to below $6,300 USD from an all-time high of $7,770, which was reached on November 8, 2017.
Additionally, and most notably, during the last 24 hours, Bitcoin Cash has been attracting all the attention as its price surpassed the record high of $1,310 USD, on November 11, 2017.
Bitcoin Holders Have Already Received Bitcoin Cash Coins
Bitcoin holders at the time of the hard-fork that created Bitcoin Cash on August 1, 2017, received an equal number of Bitcoin Cash coins. That is, at the time of the hard-fork, if you owned two Bitcoins, you received two Bitcoin Cash coins after the hard-fork.
However, Coinbase Bitcoin exchange subscribers will have to wait. They will not receive their equivalent of Bitcoin Cash until January 1, 2018. In this connection, Coinbase issued the following directives soon after the hard-fork, on August 2, 2017:
Both Bitcoin and Bitcoin Cash remain safely stored on Coinbase.
Customers with balances of Bitcoin at the time of the fork now have an equal quantity of Bitcoin Cash stored by Coinbase.
We operate by the general principle that our customers should benefit to the greatest extent possible from hard forks or other unexpected events.
Bitcoin Classic Disappears and Bitcoin Gold Gets Ready to Enter the Stage
Another consequence of the Segwit2x failure is that Bitcoin Classic will cease to exist. Tom Zander, the Release Manager of Bitcoin Classic, issued the official statement announcing the closure of Bitcoin Classic on November 9, 2017.
On the other hand, a new fork of the Bitcoin blockchain, Bitcoin Gold, is scheduled to go live on November 12, 2017. According to the website, the purpose of Bitcoin Gold is not to compete with Bitcoin but to “make Bitcoin mining decentralized again.”
These are revolutionary times and several critical events are affecting the cryptocurrency ecosystem. In this regard, the battle for supremacy among Bitcoin, Bitcoin Cash, and now Bitcoin Gold is intensifying. However, as of this writing, Bitcoin is once again displaying how astonishingly resilient it can be. Perhaps, after this crisis, Bitcoin might emerge even stronger.
Nov-12-2017 04:31:38 AM
|Update From Altcoi
Greetings to Altcoi loyal members.
When presented with a platform to empower and improve yourself financially, it is imperative that you utilize it the best way you can. Here at Altcoi we greatly appreciate your support and your trust in us, in extent we thank you for the positive response you haven shown towards our vision. This message is a reflection of our gratitude and with this notice we aim to disclose back-end information that is important to you as a cryptocurrency/bitcoin investor.
In the past 16 days from our launch we have been able to successfully register over 400 investors, over $53 158 Invested, over $11 045 processed withdrawals. In the journey of building Altcoi we have also realized that Plan 1 is not going to work for us or for any of our investors, thereof we shall take it down and remain with only 3 successful investment plans. This is due to the fact that Plan 1 has a minimum deposit of $5 while also the bitcoin transaction fees cost almost or above $5, the highest fee we have paid recently was $7, we have experienced this when receiving and sending plan 1 funds. from hereon we planned to also set our withdrawal limits to $15. All members invested with plan 1 will still accumulate their profits.
Our experts have been working closely together and have been giving positive signals that ensure lucrative outcomes. As a company, we hold ourselves on the highest standards through innovative strategies that ensure sustainable benefits. We are yet to include much more beneficial programmes that will empower you as an investor, so stay put, remain loyal and trust that Altoi will take you to greater heights.
We truly believe in our business model and we can prove its usefulness with an ever increasing growth of members who strengthen Altcoi as an investment unit.
Nov-11-2017 01:00:40 PM
|How Bitcoin Price Could Reach $10,000 by the End of 2017
Highly regarded investors and financial analysts including billionaire investor Mike Novogratz and RT’s Max Keiser firmly believe that the bitcoin price could achieve the $10,000 mark in the short-term.
The basis of the $10,000 interim price target of leading analysts and investors like Keiser and Novogratz are based on the entrance of large-scale institutional and retail traders into the bitcoin market.
Analysts predict that the launch of bitcoin futures exchanges by CME Group and CBOE, two of the largest options exchange in the world by trading volume, would drastically increase liquidity for institutional and retail traders, potentially leading to tens of billions of dollars being invested in bitcoin in the short to mid-term.
It is important to acknowledge that the liquidity of bitcoin has increased significantly over the past few months, with only a handful of multi-billion dollar institutional investors and hedge funds in the bitcoin market. The daily trading volume of bitcoin is on par with Apple (NASDAQ: AAPL), the most liquid stock on earth, at around $3.4 billion.
The SegWit2x hard fork, which was supposed to occur on November 16, was canceled by its supporters and leading businesses including Blockchain, Xapo, ShapeShift, and BitGo. SegWit2x presented uncertainty to investors and traders within the bitcoin market, given that a sell-off from B2X dividend-expecting investors was a certainty. Several analysts expected a drop of around 10 percent.
Upon the cancellation of SegWit2x, the price of bitcoin surged to a new all-time high at $7,900, prior to plunging to $7,200. But, the major correction that occurred on November 9 should be seen as a positive indicator for the short-term growth of bitcoin, given that the major correction or sell-off from B2X-expecting investors had already occurred and it barely impact the price trend of bitcoin.
Bitcoin Futures and Mainstream Adoption of Bitcoin in Japan Will Push Price to $10,000
A price target of $10,000 by the end of 2017 is a possibility that cannot be ruled out, considering that the US market, the second largest bitcoin market with over 25 percent market share, is extremely optimistic in regards to the futures exchange launch of CME and the impact it will have on the bitcoin market in the long run.
Additionally, as NewsBTC reported earlier today, Japan has been experiencing a rapid mainstream adoption of bitcoin and the cryptocurrency market, triggered by the Japanese government’s practical regulatory frameworks and the implementation of bitcoin as a payment method by leading conglomerates.
If the Japanese and US markets continue to perform at the current pace in the upcoming months, $10,000 is a likely short-term target. The adoption of SegWit by major bitcoin businesses like BitGo could also act as a minor factor in shaping the upward momentum of bitcoin price in the upcoming weeks.
Nov-11-2017 04:47:53 AM
|Naspers Invests Over $5M into Coins.ph to Target the Unbanked
Productive venture firm Naspers is making a push into bitcoin and money related administrations after it sponsored Philippines-based startup Coins.ph to the tune of $5 million. Coins.ph is centered around offering money administrations for the unbanked in the Philippines and Thailand. It utilizes the blockchain as its hidden innovation to encourage exchanges and settlements. It declared the new financing — which comes by means of the Naspers Ventures division — as an augmentation to the $5 million Series A round that it shut last October.
Naspers, in the interim, needs little presentation: the South Africa-based firm works in online business and buyer organizations in developing markets over the world. Its speculations incorporate Tencent, Asia’s most noteworthy esteem tech firm, India’s Flipkart, and now-Amazon-possessed Souq.com in the Middle East among numerous others. Its essential nearness in Southeast Asia is through worldwide web based business firm OLX, yet it put cash into Singapore-based bitcoin startup BitX in 2015.
Extension is precisely the arrangement, agreeing Justin Leow, head of business operations for Coins. Leow told TechCrunch in a meeting that the organization is currently hoping to convey its administrations to new markets, despite the fact that he declined to get particular on future goals.
The account management inlet is for sure gigantic. Southeast Asia as a locale houses more than 600 million shoppers. Its web economy is gauge to reach $200 billion every year inside the following decade however money related frameworks are a key prerequisite to get that going. Right now, only 27 percent of the area’s populace has a financial balance, as indicated by a KPMG report distributed a year ago, and that is the place Coins is hoping to have an effect.
The startup right now offers a scope of administrations that incorporate credit, fundamental keeping money, charge installments, best up and settlement installments, none of which require a client to have a financial balance. As opposed to offering administrations straightforwardly, it works with accomplices to serve clients.
Nov-10-2017 03:52:34 AM
|South Korean Movie Stars Try to Survive on Bitcoin for a Week
A South Korean broadcast TV slot, Asia Economic TV, has delivered and communicated an unscripted television show where two motion picture stars contended to live on bitcoin for seven days. Set in South Korea and San Francisco, the performing artists were tested to discover dealers who acknowledge bitcoin specifically. The name of this survival challenge is inexactly interpreted as “Stay Alive for a Week with Bitcoin.” It occurred in two nations with altogether different levels of Bitcoin selection.
On-screen character Kim Bo-sung spent seven days living on bitcoin in South Korea, while painter and performing artist Yun Song-ah did likewise in San Francisco, United States. Their Wikipedia pages demonstrate that Kim has been in 34 motion pictures and 13 TV arrangement, while Yun has been in 8 motion pictures and 10 TV shows. They have additionally both won various honors.
Stay Alive for a Week with Bitcoin
The show differentiates how the two stars made due on bitcoin in the two areas. The guidelines expressed that they should discover shippers that acknowledge bitcoin straightforwardly and just utilize bitcoin for the week. The show tailed them as they spent it on sustenance, safe houses, travel and every single other movement amid that time.
Kim Bo-sung depicted himself as a “Bitcoin outlaw,” BNT News announced, including that the program indicated him utilizing bitcoin, for example, at an optician’s office, a flower specialist, a campground, and a chiropractor. It regularly took him a while to discover a seller that acknowledges bitcoin in South Korea.
3 Times a Week with Bitcoin
Yun Song-ah, then again, delighted in the high appropriation rate of shippers in San Francisco. She could discover many stores that acknowledge bitcoin and additionally Bitcoin ATMs to get dollars out to spend. She “sketched the Golden Gate Bridge, took-in sightseeing at Fisherman’s Wharf, felt the hippie culture in the streets of Mission Street and Hate & Ashbury Street, and visited the Coppola Winery, run by Francis Coppola,” the news outlet depicted.
The showrunners clarified that the show exhibits totally extraordinary survival styles since San Francisco is among the spots where bitcoin is generally utilized, while it is the inverse in South Korea. The last scene of this arrangement was publicized a week ago. The head of South Korea’s national bank has precluded characterizing bitcoin as a cash, contending that digital currencies are a type of ware.
Get the latest in Asian Bitcoin news at Coin News Asia.
Nov-10-2017 03:49:06 AM