Category Archives: Cryptocurrency

BitCoin, LiteCoin, etc.

How to Buy PotCoins Part 2: Make a cryptocurrency trading account at swissex.com to buy PotCoin – Video

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How to Buy PotCoins Part 2: Make a cryptocurrency trading account at swissex.com to buy PotCoin
You will need to go to: https://www.swisscex.com/ in order to follow this video. This video shows you how to buy PotCoins if you already have BitCoins. If yo...

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How to Buy PotCoins Part 2: Make a cryptocurrency trading account at swissex.com to buy PotCoin - Video

Could there be a $50,000 bitcoin?

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By David Z. Morris

FORTUNE -- In the last year, and with increasing intensity following the early December price spike that briefly put Bitcoin above $1,200, critics have sounded the alarm that the price is a bubble. Some, like Felix Salmon, have recognized the value of the cryptocurrency, but argued that it is simply overvalued, much like pre-2008 real estate.

Others haven't stopped there, claiming that bitcoin is all bubble, at the center of which is little or no intrinsic value -- something closer to a Dutch tulip mania than a real estate bubble. Those making the latter case have included Nobel Laureate Robert Shiller and former Federal Reserve Chairman Alan Greenspan.

It seems reasonable enough to be skeptical of a digital currency unbacked by any state or real-world goods. But bitcoin optimists argue that what "backs" bitcoin is the functionality of its frictionless, low-cost, decentralized payments system. As Circle CEO Jeremy Allaire put it at fact-finding hearings held by the New York Department of Financial Services in January, "The growth in the value of bitcoin is a put option on its adoption as a payments platform."

MORE:Bitcoin's no good, horrible, very bad few weeks

An anonymous viral e-mail circulating among bitcoin watchers and partisans lays out a few simple hypothetical usage and adoption scenarios, and their consequences for bitcoin's price. If Amazon.com (AMZN) adopted bitcoin for all payments, its volume of $38 billion, divided by a supply of (at the time of the email's writing) about 7 million bitcoin, would make each bitcoin worth $5,400. If $300 billion in international remittance was conducted in bitcoin, that volume alone would push the price to $42,000. Adding these, along with online poker and gas station transactions, would lead to a total transaction volume of $602 billion -- and a bitcoin, even at today's expanded supply of 12 million coins, worth $50,000.

"Those numbers are good ones to start with. In some sense, that's like a maximum," says Susan Athey, a professor of economics at the Stanford Graduate School of Business who has been studying bitcoin. Few would realistically argue that bitcoin will service 100% of even these silos in the near term, but the volume/supply ratio is the starting point for understanding bitcoin price -- as more consumers or organizations choose to use bitcoin, increased volume will drive the price up.

Building from that basic formula, Athey adds a variety of variables to build an analytic framework. The first is velocity -- how frequently a bitcoin can be spent. Because bitcoin, unlike paper money, is very low-friction, there's the possibility of a very high-velocity bitcoin, if, for example, vendors or traders only held bitcoin very briefly, cashing it in and out to government currencies on either end of transfers. That, Athey says, would allow a small volume of bitcoin to process a large volume of payments, keeping the price of bitcoin relatively low.

Then there are even less predictable and higher-risk variables. Obviously, bitcoin's future price depends hugely on the adoption rate of the cryptocurrency model. Athey believes that the cryptocurrency model of distributed ledgers is "a really simple, powerful technology that is superior to existing technology," and there are major drivers that point toward wide adoption.

One fascinating adoption scenario frequently floated among bitcoin adherents is specific to retail. Online retailers' razor-thin profit margins get a huge boost when they pay a bitcoin processor's fee of about 1% instead of credit card fees of 2-3%. How long will it be, some ask, before a major retailer offers a discount for those paying in bitcoin, as a way to maximize that increased profit margin? Such a discount could drive significant bitcoin adoption in a very short timeframe.

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Could there be a $50,000 bitcoin?

AMD graphics card pricing skyrockets due to cryptocurrency mining, could kill AMD’s gaming efforts

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Cryptocurrency-fueled demand has driven the price of AMD Radeon cards through the roof in recent weeks, and consumers are feeling the pinch. This is a trend weve remarked on several times in the past, but rocketing prices have hit new heights in recent days, with the price of the R9 290X briefly breaking $900 over the weekend. Considering the card carries an official $550 MSRP, thats a massive 64% over premium.

Prices seem to have come down slightly since yesterdays exuberance; the R9 290X is currently selling for a mere $800 at Amazon, while Newegg has a handful of cards in stock for $700.The R9 290 is selling for $600 a mere 1.5x markup on its $400 MSRP. (Oops: When I started writing this story, Newegg had a handful of cards in stock for $700. Now, it doesnt.)

The insanity, however, isnt confined to the highest-end cards. Heres a comparison of the official AMD MSRPs and the current selling prices.

Price %s over MSRP

Even the R9 270 cards are selling for 30-40% over MSRP, while the R9 280X a GPU thats supposed to cost $300 is actually selling for $489. We can zoom in on one particular card thanks to website price-tracker CamelEgg, and see the greater problem.

Save for a brief period in late November and immediately after Christmas, the gap between official selling price and street price on the R9 290 has been enormous. It also corresponds exactly with the rise of alternative cryptocurrency mining(Litecoin, Dogecoin, et al.) as Bitcoin became too difficult to work with.

This might sound like a great deal for AMD. Huge demand for video cards lifts prices, prices drive profits. Everybody wins, right?

Maybe. Unfortunately its not that simple. AMD hasnt changed its MSRPs, which means much of this price gouging is likely dropping into the pockets of Newegg and Amazon resellers, not Sunnyvale itself. Just because AMD hasnt changed its MSRPs, of course, doesnt mean it isnt quietly charging higher wholesale prices, but its ability to claim some of the bubbles earnings for itself is likely limited by previously agreed-upon contract prices as well as the volatile nature of the market. Add-in board partners (AIBs) wont pay huge premiums for chips when they know the market for those processors depends on something as volatile as the cryptocurrency markets.

Beyond making life fun for reviewers, who have to take practical cost considerations into account when evaluating different GPUs, theres another problem here. AMDs entire GPU strategy since October of 2013 has relied on steep price cuts to fuel sales. The Radeon R9 290 and R9 290X were killer cards partly because they equaled or bettered Nvidias GTX 780 or GTX Titan, but at far lower price points.

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AMD graphics card pricing skyrockets due to cryptocurrency mining, could kill AMD’s gaming efforts