An AI that mimics how mammals smell recognizes scents better than other AI – Science News

When it comes to identifying scents, a neuromorphic artificialintelligence beats other AI by more than a nose.

The new AI learns to recognize smells more efficiently and reliablythan other algorithms. And unlike other AI, this system can keep learning newaromas without forgetting others, researchers report online March 16 in NatureMachine Intelligence. The key to the programs success is its neuromorphicstructure, which resembles the neural circuitry in mammalian brains more thanother AI designs.

This kind of algorithm, which excels at detecting faint signalsamidst background noise and continually learning on thejob, could someday be used for air quality monitoring, toxic waste detection ormedical diagnoses.

The new AI is an artificialneural network, composed of many computing elements that mimic nerve cells toprocess scent information (SN: 5/2/19). The AI sniffs by taking inelectrical voltage readouts from chemical sensors in a wind tunnel that wereexposed to plumes of different scents, such as methane or ammonia. When the AIwhiffs a new smell, that triggers a cascade of electrical activity among its nervecells, or neurons, which the system remembers and can recognize in the future.

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Like the olfactory system in the mammal brain, some of the AIsneurons are designed to react to chemical sensor inputs by emitting differentlytimed pulses. Other neurons learn to recognize patterns in those blips thatmake up the odors electrical signature.

This brain-inspired setup primes the neuromorphic AI for learningnew smells more than a traditional artificial neural network, which starts as auniform web of identical, blank slate neurons. If a neuromorphic neural networkis like a sports team whose players have assigned positions and know the rulesof the game, an ordinary neural network is initially like a bunch of randomnewbies.

As a result, the neuromorphic system is a quicker, nimbler study.Just as a sports team may need to watch a play only once to understand thestrategy and implement it in new situations, the neuromorphic AI can sniff asingle sample of a new odor to recognize the scent in the future, even amidstother unknown smells.

In contrast, a bunch of beginners may need to watch a play manytimes to reenact the choreography and still struggle to adapt it to futuregame-play scenarios. Likewise, a standard AI has to study a single scent samplemany times, and still might not recognize it when the scent is mixed up withother odors.

Thomas Cleland of Cornell University and Nabil Imam of Intel inSan Francisco pitted their neuromorphic AI against a traditional neural networkin a smell test of 10 odors. To train, the neuromorphic system sniffed a singlesample of each odor. The traditional AI underwent hundreds of training trialsto learn each odor. During the test, each AI sniffed samples in which a learnedsmell was only 20 to 80 percent of the overall scent mimicking real-worldconditions where target smells are often intermingled with other aromas. Theneuromorphic AI identified the right smell 92 percent of the time. The standardAI achieved 52 percent accuracy.

Priyadarshini Panda, a neuromorphic engineer at Yale University,is impressed by the neuromorphic AIs keen sense of smell in muddled samples.The new AIs one-and-done learning strategy is also moreenergy-efficient than traditional AI systems, which tend to be very powerhungry, she says (SN: 9/26/18).

Another perk of the neuromorphic setup is that the AI can keeplearning new smells after its original training if new neurons are added to thenetwork, similar to the way that new cells continually form in the brain.

As new neurons are added to the AI, they can become attuned to newscents without disrupting the other neurons. Its a different story fortraditional AI, where the neural connections involved in recognizing a certain odor,or set of odors, are more broadly distributed across the network. Adding a newsmell to the mix is liable to disturb those existing connections, so a typical AIstruggles to learn new scents without forgetting others unless its retrainedfrom scratch, using both the original and new scent samples.

To demonstrate this, Cleland and Imam trained their neuromorphicAI and a standard AI to specialize in recognizing toluene, which is used tomake paints and fingernail polish. Then, the researchers tried to teach theneural networks to recognize acetone, an ingredient of nail polish remover. Theneuromorphic AI simply added acetone to its scent-recognition repertoire, butthe standard AI couldnt learn acetone without forgetting the smell of toluene.These kinds of memorylapses are a major limitation of current AI (SN: 5/14/19).

Continual learning seems to work well for the neuromorphic systemwhen there are few scents involved, Panda says. But what if you make it large-scale?In the future, researchers could test whether this neuromorphic system can learna much broader array of scents. But this is a good start, she says.

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An AI that mimics how mammals smell recognizes scents better than other AI - Science News

I asked eight chatbots if I had Covid-19. The answers varied widely – STAT

U.S. hospitals, public health authorities, and digital health companies have quickly deployed online symptom checkers to screen patients for signs of Covid-19. The idea is simple: By using a chatbot powered by artificial intelligence, they can keep anxious patients from inundating emergency rooms and deliver sound health advice from afar.

Or at least that was the pitch.

Late last week, a colleague and I drilled more than a half-dozen chatbots on a common set of symptoms fever, sore throat, runny nose to assess how they worked and the consistency and clarity of their advice. What I got back was a conflicting, sometimes confusing, patchwork of information about the level of risk posed by these symptoms and what I should do about them.

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A chatbot posted on the website of the Centers for Disease Control and Prevention determined that I had one or more symptom(s) that may be related to COVID-19 and advised me to contact a health care provider within 24 hours and start home isolation immediately.

But a symptom checker from Buoy Health, which says it is based on current CDC guidelines, found that my risk of a serious Novel Coronavirus (COVID-19) infection is low right now and told me to keep monitoring my symptoms and check back if anything changes. Others concluded I was at medium risk or might have the infection.

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Most people will probably consult just one of these bots, not eight different versions as I did. But experts on epidemiology and the use of artificial intelligence in medicine said the wide variability in their responses undermines the value of automated symptom checkers to advise people at a time when above all else they are looking for reliable information and clear guidance.

These tools generally make me sort of nervous because its very hard to validate how accurate they are, said Andrew Beam, an artificial intelligence researcher in the department of epidemiology at the Harvard TH Chan School of Public Health. If you dont really know how good the tool is, its hard to understand if youre actually helping or hurting from a public health perspective.

The rush to deploy these chatbots underscores a broader tension in the coronavirus outbreak between the desire of technology companies and digital health startups to pitch new software solutions in the face of a fast-moving and unprecedented crisis, and the solemn duty of medical professionals to ensure that these interventions truly benefit patients and dont cause harm or spread misinformation. A 2015 study published by researchers at Harvard and several Boston hospitals found that symptom checkers for a range of conditions often reach errant conclusions when used for triage and diagnosis.

Told of STATs findings, Buoys chief executive, Andrew Le, said he would synchronize the companys symptom checker with the CDCs. Now that they have a tool, we are going to use it and adopt the same kind of screening protocols that they suggest and put it on ours, he said. This is probably just a discrepancy in time, because weve been attending all of their calls and trying to stay as close to their guidelines as possible.

The CDC did not respond to a request for comment.

Before I continue, I should note that neither I nor my colleague is feeling ill. We devised a simple test to assess the chatbots and limited the experiment to the web- and smartphone-based tools themselves so as not to waste the time of front-line clinicians. We chose a set of symptoms that were general enough to be any number of things, from a common cold, to the flu, to yes, coronavirus. The CDC says the early symptoms of Covid-19 are fever, cough, and shortness of breath.

The differences in the advice we received are understandable to an extent, given that these chatbots are designed for slightly different purposes some are meant to determine the risk of coronavirus infection, and others seek to triage patients or assess whether they should be tested. They also collect and analyze different pieces of information. Buoys bot asked me more than 30 questions, while Cleveland Clinics and bots created by several other providers posed fewer than 10.

But the widely varying recommendations highlighted the difficulty of distinguishing coronavirus from more common illnesses, and delivering consistent advice to patients.

The Cleveland Clinics tool determined that I was at medium risk and should either take an online questionnaire, set up a virtual visit, or call my primary care physician. Amy Merino, a physician and the clinics chief medical information officer, said the tool is designed to package the CDCs guidelines in an interactive experience. We do think that as we learn more, we can optimize these tools to enable patients to provide additional personal details to personalize the results, she said.

Meanwhile, another tool created by Verily, Alphabets life sciences arm, to help determine who in certain northern California counties should be tested for Covid-19, concluded that my San Francisco-based colleague, who typed in the same set of symptoms, was not eligible for testing.

But in the next sentence, the chatbot said: Please note that this is not a recommendation of whether you should be tested. In other words, a non-recommendation recommendation.

A spokeswoman for Verily wrote in an email that the language the company uses is meant to reinforce that the screening tool is complementary to testing happening in a clinical care situation. She wrote that more than 12,000 people have completed the online screening exam, which is based on criteria provided by the California Department of Public Health.

The challenge facing creators of chatbots is magnified when it comes to products that are built on limited data and guidelines that are changing by the minute, including which symptoms characterize infection and how patients should be treated. A non-peer-reviewed study published online Friday by researchers at Stanford University found that using symptoms alone to distinguish between respiratory infections was only marginally effective.

A week ago, if you had a chatbot that was saying, Here are the current recommendations, it would be unrecognizable from where we are today, because things have just moved so rapidly, said Karandeep Singh, a physician and professor at the University of Michigan who researches artificial intelligence and digital health tools. Everyone is rethinking things right now and theres a lot of uncertainty.

To keep up, chatbot developers will have to constantly update their products, which rely on branching logic or statistical inference to deliver information based on knowledge that is encoded into them. That means keeping up to date on new data that are being published every day on the number of Covid-19 cases in different parts of the world, who should be tested based on available resources, and the severity of illness it is causing in different types of people.

Differences I found in the information being collected by the chatbots seemed to reflect the challenges of keeping current. All asked if I had traveled to China or Iran, but thats where commonality ended. The Cleveland Clinic asked whether I had visited a single country in Europe Italy, which has the second most confirmed Covid-19 cases in the world while Buoy asked whether I had visited any European country. Providence St. Joseph Health, a hospital network based in Washington state, broke out a list of several countries in Europe, including Italy, Spain, France, and Germany.

After STAT inquired about limiting its chatbots focus to Italy, Cleveland Clinic updated its tool to include the United Kingdom, Ireland, and the 26 European countries included in the Schengen area.

The differences also included the symptoms they asked about and the granularity of information they were capable of collecting and analyzing. Buoys bot, which suggested I had a common cold, was able to collect detailed information, such as specific temperature ranges associated with my fever and whether my sore throat was moderate or severe.

But Providence St. Joseph asked only whether I had experienced any one of several symptoms, including fever, sore throat, runny nose, cough, or body aches. I checked yes to that question, and no to queries about whether I had traveled to an affected country or come in contact with someone with a lab-confirmed case of Covid-19. The bot (built, like the CDC one, with tools from Microsoft) offered the following conclusion: You might be infected with the coronavirus. Please do one of the following call your primary care physician to schedule an evaluation or call 911 for a life threatening emergency.

All of the chatbots I consulted included some form of disclaimer urging users to contact their doctors or otherwise consult with medical professionals when making decisions about their care. But the fact that most offered a menu of fairly obvious options about what I should do seemed to undercut the value of the exercise.

Beam, the professor at Harvard, said putting out inaccurate or confusing information in the middle of a public health crisis can result in severe consequences.

If youre too sensitive, and youre sending everyone to the emergency room, youre going to overwhelm the health system, he said. Likewise, if youre not sensitive enough, you could be telling people who are ill that they dont need emergency medical care. Its certainly no replacement for picking up the phone and calling your primary care physician.

If anyone would be enthusiastic about the possibilities of deploying artificial intelligence in epidemiology, Beam would be the guy. His research is focused on applying AI in ways that help improve the understanding of infectious diseases and the threat they pose. And even though he said the effort to deploy automated screening tools is well intentioned and that digital health companies can help stretch resources in the face of Covid-19 he cautioned providers to be careful not to get ahead of the technologys capabilities.

My sense is that we should err to the centralized expertise of public health experts instead of giving people 1,000 different messages they dont know what to do with, he said. I want to take this kind of technology and integrate it with traditional epidemiology and public health techniques.

In the long run Im very bullish on these two worlds becoming integrated with one another, he added. But were not there yet.

Erin Brodwin contributed reporting.

This is part of a yearlong series of articles exploring the use of artificial intelligence in health care that is partly funded by a grant from theCommonwealth Fund.

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I asked eight chatbots if I had Covid-19. The answers varied widely - STAT

Blow To Bitcoin As Russia Moves To Effectively Ban Crypto – Forbes

The bitcoin and cryptocurrency community is reeling from the sudden market downturn in the face of the coronavirus crisis, with bitcoin prices swinging wildly over recent days.

Earlier this month, many cheered India's decision to permit banks in the country to trade cryptocurrencysomething that was expected to boost the bitcoin price though the market collapsed amid coronavirus-induced panic.

Now, as potential bitcoin buyers are weighing whether to jump back into the market, a senior Russian official has warned its delayed bill on digital assets will include a ban on issuing and selling cryptocurrencies.

Bitcoin and cryptocurrency legislation has been moving at different places around the world with ... [+] some regions taking a much stricter approach to companies offering bitcoin services.

"We believe there are big risks of legalizing the operations with the cryptocurrencies, from the standpoint of financial stability, money laundering prevention and consumer protection," Russia's central bank head of legal, Alexey Guznov, told Russia news agency Interfax this week in comments translated to English via Google.

"We are opposed to the fact that there are institutions that organize the release of cryptocurrency and facilitate its circulation," Guznov said, adding the coming bill "directly formulates a ban on the issue, as well as on the organization of circulation of cryptocurrency, and introduces liability for violation of this ban."

The move echos China's tough stance on cryptocurrencies, with Beijing banning companies from raising funds by initial coin offerings, known as ICOs, and shutting down bitcoin and crypto trading platforms in 2017.

Russia's coming bitcoin and crypto trading ban was seen as all but inevitable by some cryptocurrency regulation experts.

"Representatives of the Russian central bank have repeatedly voiced their view: the rouble, as the law says, is the only legal means of payment in Russia," said Alex Kuptsikevich, senior financial analyst at FxPro.

"Attempts to define them with a status of 'digital financial assets' took so long because lawmakers were hoping that the crypto-boom would fade away, and they wouldn't need to create a new legal environment."

The bitcoin price has taken a beating in recent weeks, with cryptocurrency prices across the board ... [+] falling in line with traditional markets.

However, Guznov admitted that Russia would not be able to completely ban bitcoin and other cryptocurrencies.

"Nobody is going to ban owning cryptocurrencies, Guznov said, adding people will not be punished for owning crypto "if they made their deal in a jurisdiction that does not prohibit that."

The bill, which is meant to clarify rules on digital assets more broadly could be passed as soon as this spring, is seen as part of Russia's strategy to grow its digital services economy.

"The Kremlin set up a digital agenda as one of the most important national projects in the history of Russia," said Vladislav Ginko, an economist at Russian state think tank RANEPA.

"This national project is slated to outshine Stalin's industrialization and to capture the political faith of the modern youth to invigorate its enthusiasm to make the country a world digital superpower based primarily not on factories but on digital-based services."

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Blow To Bitcoin As Russia Moves To Effectively Ban Crypto - Forbes

The Puell Multiple Is Turning Bullish on Bitcoin – CoinDesk – CoinDesk

Bitcoins (BTC) recent sell-off has pushed prices on the top cryptocurrency by market capitalization into a historically attractive zone, according to one indicator.

Prices fell from $10,200 in mid-February to 12-month lows below $4,000 last week, dashing many hopes for a strong rally ahead of the May 2020 mining reward halving.

However, with the price slide, a key indicator called the Puell Multiple has declined to levels suggesting the value of newly issued bitcoins on a daily basis is quite low compared to historical standards.

Put simply, this signals appears to show the cryptocurrency is now undervalued.

The Puell Multiple is calculated by dividing the daily issuance value of bitcoins in U.S. dollar terms by the 365-day moving average of the daily issuance value.

Daily issuance refers to new coins added to the ecosystem by miners, who receive coins as rewards for validating blocks on the blockchain. Miners usually cover mining costs by selling coins into the market.

The Puell Multiple slipped to 0.41 on March 16, the lowest level since Jan. 17, 2019 and was last seen at 0.47, according to data provided by the blockchain intelligence firm Glassnode.

The metric is now hovering in the green zone or the range of 0.3 to 0.5, which has marked bear market bottoms in the past.

Historical data also shows the indicator enters the green zone in the last leg of the bear market following which the bearish momentum weakens.

2018 bear market

Bitcoins bear market from the record high of $20,000 reached in December 2017 ended at lows near $3,200 in mid-December 2018, with the Puell Multiple hitting a low of 0.30.

The indicator entered the green zone during the last leg of the bear market, which began on Nov. 14, 2018, when prices fell below the long-held support of $6,000 and slipped to $4,000 by Nov. 20.

On that day, the Puell Multiple fell below 0.5, signaling undervaluation. The selling pressure ebbed in the following days, allowing a recovery from $3,400 to $4,400 in the last week of November.

While the bounce was short-lived, the sellers could not do much damage, as evidenced by prices bottoming out just $200 below November's low of $3,400 on Dec. 15. Thats when the Puell Multiple was hovering near 0.30.

Going back more than half a decade, bitcoins downward move from the November 2013 high of $1,100 came to an end near $150 in January 2015. The Puell Multiple also bottomed out near 0.30 in mid-January. Similarly, the preceding bear market had ended in November 2011 with the indicators drop to 0.30.

Is the bear market over?

The latest under-0.50 reading on the indicator suggests the worst is behind us. Other metrics like the market value to realized value (MVRV) Z-score are also indicating undervaluation.

However, the cryptocurrency might not be out of the woods yet, as the Puell Multiple hasnt dropped to 0.30 the level which has marked bear market lows in the past.

If history is a guide, we may see one more bout of selling, which could likely push prices back to the $5,000-$4,000 range and the Puell Multiple down to 0.30.

"We can certainly retest recent lows once or twice," Mike Alfred, CEO of Digital Assets Data, told CoinDesk, while adding that dips below $5,000 will be short-lived, courtesy of strong demand from long-term holders investors who bought bitcoins before the massive rally from $6,000 to $20,000 seen in the fourth quarter of 2017 and during the last five weeks of 2018.

Bitcoin is currently trading near $6,550, representing a 69 percent from recent lows under $4,000. Prices hit a high of $6,907 early Friday, according to CoinDesks Bitcoin Price Index.

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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The Puell Multiple Is Turning Bullish on Bitcoin - CoinDesk - CoinDesk

Bitcoins Magic Is Fading, And Thats A Good Thing – Forbes

As bitcoin's price appears to be correlating with traditional markets, it's undergoing an identity ... [+] crisis that could kill it, or see it evolve.

Bitcoin is no longer the magic internet money that its long been branded. There are no dark forces causing it to behave the opposite of traditional markets. There is no algorithm that forces it to zig when the rest of the world zags. In large-part, there are just a lot of freaks and weirdos, disenfranchised idealists, citizens of countries with untrustworthy central banks, doing things that traditional investors think are crazy.

From the outside, all these seemingly irrational early bitcoin owners doing unorthodox things with an asset that doesnt rely on any central bank or securities depository, gave the appearance that bitcoin wasnt correlated to traditional markets, or even safe-havens like gold. After all, when the S&P 500 dropped, bitcoin shot up. When banks in Cyprus collapsed, bitcoin was bolstered. And it was a narrative bitcoin puristsperhaps foolishlypropagated. If normal people, the enfranchised, the folks in countries with stable currencies, started buying, it could only drive the price of the scarce asset higher, or so was the thinking.

Then came the coronavirus, wreaking havoc on global finance, and everything changed. Or to be more accurate, people started to see what bitcoin really was. Starting around March 11, as concerns about the coronavirus escalated closures of everything from some of the largest companies in the world, including Apple and Tesla, to local bars and restaurants, the price of the S&P 500 and other global markets collapsed by 10%, taking bitcoin with it. Bitcoin, the digital asset that had come to be identified with its non-correlation, was broken, many warned, and if it was correlated with traditional markets its use and value were gone.

Theres a couple problems with that narrative though. If bitcoins value was being driven by it being a non-correlated asset, then the moment it did correlate, its value should have gone down towards zero. Nevertheless, bitcoins price has already started to recover, right along with traditional markets, increasing by 16% over the most recent 24-hour period. If non-correlation was core to bitcoins value, why was it increasing right along with traditional markets? Second, people were buying, and more importantly, using bitcoin long before traditional investors started talking about bitcoin being non-correlated at all.

Early bitcoin users bought bitcoin for largely ideological reasons. In loosely chronological order, they used it because: it was fun and weird; it let them buy things online without needing to use a bank, much less a central bank; it let them buy things online, like drugs, that they couldnt use a credit card for; it couldnt be seized if their government found them unsavory for any reason; it couldnt be manipulated by printing more. And thats just to name a few.

There was no talk of hedging in those early days. There was no talk of diversifying a portfolio, and what percent one should have on hand. Back then, they werent even really called investors at all. They were holders. To be sure, fortunes were made, and lost, due to lack of those considerations. Accidental millionaires were created, as was complete financial devastation.

Then, over the counter trading became a thing. Grayscale paved the way in 2015 by securitizing bitcoin and other cryptocurrencies, letting accredited and institutional investors who might not otherwise be legally allowed to touch the asset gain exposure. Then traditional financial institutions like Fidelity and CME Group got involved, not only making it easier for traditional investors to participate in the nascent economy, but expanding the kinds of behaviors exhibited by the people who own bitcoin. These were the hedgers, the portfolio makers, the day-traders. The frenzy caused by such vaunted interest in part helped drive the price of bitcoin to nearly $20,000 at the end of 2017, before it collapsed to $4,000. By June 2019 the price had recovered to $13,000.

Then, in the Fall of 2019, something happened. Were still not sure what it was, but it appears a bunch of new investors started buying bitcoin, according to data created by cryptocurrency data firm, CoinMetrics and others. Very little is known about this spending spree, but from September to December, those investors filled up their coffers with crypto. The price rather benignly moved from $10,000 to $7,100 over the same time. A relatively small movement, especially for seasoned bitcoin traders who were used to seeing that kind of action in a single day.

However, we wouldnt learn about this new breed of investor until March 11, that fateful day when fears over coronavirus started to reach a frenzied note. That day, 281,000 bitcoin that its owners had held for a mere thirty days were sold, according to CoinMetrics, while only 4,131 bitcoin that had laid dormant for a year or more moved, indicating that the vast majority of the volatility was almost certainly from new buyers.

The following day, those actions had aligned bitcoins movements with the S&P 500 more than it had ever been before, based on CoinMetrics calculation of what is called the Pearson correlation, which shows the similarity between two sets, and has stayed at about that level for the past five days, according to the firm. A separate analysis by financial services firm Unchained Capital found that over a longer time period, from March 11 to March 15, a majority of the volatility, or about 458,000 bitcoins, came from accounts that were between one month and one year old.

To be clear, we dont know anything about the investors who triggered the sell-off, or what were their motives. All we know is their accounts were new, they all started selling at about the same time, either corresponding with, or triggering the tightest market correlation with the S&P 500 bitcoin has ever experienced. Even as they were making their trades though, whispers of buy the dip could already be heard among the old-school bitcoin holders.Cryptocurrency exchange Kraken has actually seen an 83% increase in the amount of account signups over the week of the collapse, compared to the week beforepeople looking to capitalize on the low price.

In the fall-out surrounding coronavirus, banks once again started printing money to create the liquidity thats crucial to keeping the global financial gears lubricated. Could bitcoins limited supply still prove to be an antidote? Some asked. Might bitcoin evolve into something else entirely? For an open-source currency, constantly being recreated by the very people who own it, anything is possible. Until then though, dont be surprised when bitcoin behaves exactly the way its owners do.

So, if bitcoin isnt magic, what is it? At its core, its underlying blockchain technology is just the ability to prove that a digital item is only in one place at a time. That ability laid the foundation for it to possibly, someday, acquire value, which it has. But unlike other assets, its also a payment rails, a way to move that value. How much is an asset with its own native payment rails worth? Right now its worth $6,200 per bitcoin for a total market value of $113 billion, not counting the vast infrastructure in place to support it.For some comparison though, Visa and Mastercard together are worth about $500 billion dollars.

Really though, what makes bitcoin different, is it was the first financial innovation ever adopted by cooky retail investors first. And when traditional investors, used to seeing their own image reflected in innovation, saw something else, they assumed it was magic. When all it really was, is a payment system, and dare I say, a store of value, that lets people own the asset and the infrastructure. Everything else is up in the air.

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Bitcoins Magic Is Fading, And Thats A Good Thing - Forbes

Does Bitcoin Have Intrinsic Value or Is It Based on Thin Air? – Cointelegraph

In early March, the Bank of Englands governor-designate, Andrew Bailey, said that Bitcoin has no intrinsic value. He controversially stated that any investor that holds Bitcoin should be prepared to lose all of the money. Bailey said, If you want to buy it, fine, but understand it has no intrinsic value. It may have extrinsic value, but there is no intrinsic value.

Throughout the past several years, many high-profile investors and government officials such as billionaire Mark Cuban, Berkshire Hathaways Warren Buffett and United States President Donald Trump have criticized Bitcoin for its lack of real value.

In July 2019, President Trump echoed the sentiments earlier shared by Buffett and his business partner Charlie Munger when he claimed that the value of Bitcoin is based on thin air, implying that it has no intrinsic value. At the time, President Trump said:

I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air.

The argument for the lack of value in Bitcoin derives from its origin: a decentralized and peer-to-peer network of miners, users, developers and node operators that has been running since 2009 without the presence of a central entity or a group that oversees the blockchain protocol.

Hence, the concept that a decentralized and completely open-source network, which in theory is software, is foreign to many investors. In 2018, Berkshire Hathaway vice chairman Charlie Munger said that Bitcoin is worthless, artificial gold, describing it as a piece of clever computer science. Munger told CNBC:

Bitcoin reminds me of Oscar Wildes definition of fox hunting: The pursuit of the uneatable by the unspeakable.

Most of the negative stances towards Bitcoin and the skepticism about its value stems from its distributed structure and the digital nature. But, cryptocurrency industry executives and prominent investment firm operators perceive the value of Bitcoin differently.

In an interview with Cointelegraph, BlockTower Capital chief investment officer Ari Paul explained that the value of Bitcoin comes from the control it gives to users that own the asset. The non-confiscatable characteristic of Bitcoin provides users with an unprecedented level of financial freedom when compared with traditional assets.

Safe haven assets like gold, for instance, which investors foresee Bitcoin would compete against over the long run, have seen many instances wherein gold held by individuals were seized by governments in the past. Paul told Cointelegraph:

BTC is many things: its value comes as the only way to pay for Bitcoin blockchain space (aka censorship resistance as a service), but Id argue far more of its value comes from its seizure resistance. If I want to store $1 of wealth in a way that can't be arbitrarily seized by governments, I need to own $1 of BTC, regardless of BTCs price per dollar. With that framing, its vaguely comparable to the offshore banking system which is roughly $30 trillion.

The argument that the value of Bitcoin comes from its seizure resistance goes in line with the sentiment of Wences Casares, the CEO of crypto custody and wallet provider Xapo. In an essay titled, The case for a small allocation to Bitcoin published in March 2019, Casares suggested that every $10 million portfolio should have at least $100,000 invested in Bitcoin with a long-term investment thesis.

Casares explained that growing up in Argentina, he saw his family lose their savings three times over, and the last time was due to unfair confiscation of assets.

Related: Crypto Traders Explain What Caused the Bitcoin Price Plunge to $3,000s

Founder of Quantum Economics Mati Greenspan told Cointelegraph that whether Bitcon has any intrinsic value purely depends on the perception of an investor of Bitcoin and the entire asset class. By definition, the term intrinsic value refers to the true, inherent and essential value of an asset, commodity or currency. But value is subjective and oftentimes changes significantly based on varying circumstances.

As an example, before President Richard Nixon essentially eliminated the gold standard by disallowing the Federal Reserve to reclaim dollars with gold, the intrinsic value of the dollar came from the backing of gold. But when the gold standard was abolished, other countries started to print money and the inflation rate of reserve currencies began to rise.

A case can be made that the intrinsic value of a reserve currency is the government or the country behind it, but the value of it can change rapidly depending on varying factors, according to Greenspan:

Intrinsic value is defined as an investors perception of the assets value, so whether Bitcoin does or does not have it depends entirely on the perspective of the prospective investor. Perhaps it holds no value for Mr. Carney at this time, but it certainly has value to millions of other people around the world.

Despite the emergence of trusted custodians and strictly regulated exchanges that have contributed to the establishment of a rapidly improving infrastructure supporting the market, Bitcoin is still an emerging asset.

Since the Dow Jones fell sharply on March 12 due to heightened levels of fear from the coronavirus pandemic, Bitcoin has shown a high level of correlation with the U.S. stock market. This tight correlation has devalued the image of Bitcoin as a safe haven asset. Prior to March 2020, BTC was never tested under an environment where the global financial market started to crash and show signs of extreme uncertainty.

Related: Bitcoin Price Correlates With Traditional Assets, but Not Entirely

The volatility of BTC and its correlation with stocks this month primarily stem from the fact that its market capitalization is still hovering at around $116 billion. That is merely 1.37% of the $8 trillion market cap of gold.

As the market cap of Bitcoin increases over time, it will show less volatility and increased levels of stability, which would allow it to be seen as a safe haven asset in times of global market slowdown. Tyler Winkelvoss, the billionaire CEO of U.S.-based crypto exchange Gemini, said recently on the matter:

Bitcoin is not a hedge to pandemics, it is a hedge to fiat regimes. A sudden, negative demand shock in the global economy will affect every asset, including gold, in the short term. The world will get through this, but at what long-term, Faustian bargain? Bitcoin is not making any deals right now. It has the resilience and endurance to last in the infinite game.

With a larger market cap, stronger infrastructure, higher liquidity, clearer regulatory frameworks and increased levels of mainstream awareness, the value proposition of Bitcoin can improve significantly over the next decade. And eventually, the argument that Bitcoin lacks intrinsic value is likely to weaken, as its non-confiscatable characteristic, decentralized nature, and fungibility will add to the assets value.

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Does Bitcoin Have Intrinsic Value or Is It Based on Thin Air? - Cointelegraph

Bitcoin Rally Leaves Stocks In The Dust – Forbes

Bitcoin rose sharply today, while major stock indices languished.

Bitcoin prices surged today, climbing roughly 20% as the major stock indices experienced substantially weaker gains.

The worlds most prominent digital currency rose to $6,393.76 around 1:45 p.m. EST, according to CoinDesk data.

At this point, the cryptocurrency was up 19.8% for the day, and had climbed more than 60% from its recent low of less than $3,900 reached on March 13th, additional CoinDesk figures show.

In contrast, major U.S. stock indices have not shown compelling gains today, with the S&P 500 Index and the Dow Jones Industrial Average up less than 1% since opening, Google Finance data shows.

[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]

A combination of factors are driving the market higher today, said analyst Denis Vinokourov, head of research for London-based digital asset firmBequant.

Specifically, he pointed to profit taking flow in the options market as well as some degree of stabilisation of the liquidity conditions, with the cost of liquidity continuing to come off the extreme levels observed over the recent sessions.

He also spoke to the vastly different performance of bitcoin and stocks, which had been falling together recently.

While Bitcoin may have been trading in lockstep with risk assets and in particular S&P500, it is not the first that the the digital asset has established some degree of correlation to traditional assets, said Vinokourov.

Everytime, this correlation proved to be short lived, he noted.

This deviation is another win for an asset that prides itself on its non-correlated and asymmetric performance, Vinokourov stated.

Catherine Coley, CEO of Binance.US, also weighed on the recent changes in the global asset markets.

Last weeks nosedive in crypto markets was part of a universal rush to cash among investors in response to unprecedented panic and uncertainty, but Bitcoins appeal as a safe haven and deflationary asset is once more apparent amid the raft of fiscal and monetary stimulus from governments and central banks around the world, reminding investors just how precarious the existing financial system really is, she said.

Paolo Ardoino, CTO of Bitfinex and Tether, took a different tack, describing recent events as providing validation for the entire space.

"The blockchain industry can and will survive through tremulous current events, he stated.

The current situation shows that the global economy needs transparency and blockchain, noted Ardoino.

You can not keep printing money out of thin air leaving our children to pick up the debt. Bitcoin is the answer, he stated.

Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether and EOS.

Original post:
Bitcoin Rally Leaves Stocks In The Dust - Forbes

Contrary To Popular Belief, Bitcoin Isn’t Consistently Correlated To Anything – Forbes

Sometimes bitcoin's price moves with the stock market, and sometimes it doesn't. (Photo by Bryan R. ... [+] Smith / AFP) (Photo by BRYAN R. SMITH/AFP via Getty Images)

[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]

As a borderless digital asset not controlled by governments or centralized companies, bitcoins price should, in theory, travel its own path, independent of other currencies and markets. Cryptos pioneer asset, however, has seen varied views suggesting correlations to traditional markets, such as stocks, safe-haven investments such as gold, or even arguments that bitcoin is not correlated to anything. Available data shows no firm answer, as bitcoins correlation seems to change with the wind, while a number of experts have varying thoughts on the matter.

I believe that bitcoin does have a correlation with traditional stock markets because they are both private assets, analyst and trader Tone Vays told me in a March 18 comment. Bitcoin benefitted a lot from the ten year bull market because people got generally wealthier, and they were more willing to speculate on something like bitcoin, Vays added, mentioning the thriving market seen over the last decade.

Vays expects a positive reaction from bitcoin during relatively uncertain economic times, such as a countrys withdrawal from the eurozone for example. People will be scared, but they still have their jobs and theyre looking for a place exit, he said, referencing people prospecting for investment opportunities.

The analyst, however, said the current situation differs. When it comes to a major situation like we have now with the markets crashing, and people worrying about their jobs, theyre not going to speculate on bitcoin, Vays said. As an asset that has only been in existence for roughly 11 years, the analyst explained bitcoin is not yet primed to take the place of cash across the globe.

Amid global coronavirus fears and oil trade wars, recent days have seen traditional markets plummet. The Dow Jones Industrial Average (DJI), a common barometer for market health, fell more than 20% from its 2020 highs by March 11, and faced continued decline in the days following. Bitcoin suffered similar carnage around the same time frame, diving from $10,500 on February 12, down to $3,870 by March 13.

Between March 12 and 13, BTC fell from $8,000 down to $3,870, while the Dow fell from 22,840 to 21,150, according to TradingView.com price charts. The Dows March 12 drop totaled over 7% which is less damage comparative to bitcoins dump, but still a severe market loss by traditional market standards.

Bitcoin Sometimes Travels Its Own Path

Bitcoins price has not always travelled in line with traditional markets, however. Based on bitcoins chart, compared to the S&P 500 index, another popular mainstream benchmark, cryptos pioneer asset has acted oppositely at times.

An article from Cointelegraph compared historical price data between 2018 and 2019 from the S&P 500 and bitcoin, showing inconclusive data for any firm trend. At times, bitcoin did not react, or acted oppositely when the S&P 500 moved sharply. During other periods, the two seemingly moved in sync.

According to Vays, bitcoins price does not follow traditional markets during times of decreased price swings, also known as low volatility, sometimes seen when markets are level or marginally trending upward. If the volatility of the stock market isnt huge, bitcoin is not correlated at all, he said. When the market is going up very quickly, or when the market is crashing, I believe there is a correlation to bitcoin because theyre both private assets.

In recent days, amid the mentioned traditional market fears and falling prices, bitcoin has held rather steady. Specifically, on March 16, the Dow suffered another red day, while bitcoin traded largely sideways, ranging between $4,450 and $5,370, rather than posting new 2020 price lows like the Dow. The asset has held strong since March 16, regardless of traditional markets, sitting at a press time price of $6,648.

Cryptos Largest Coin Stated As A Non-Correlated Asset

Morgan Creek Digital cofounder and crypto aficionado Anthony Pompliano noted bitcoins comparative action in a March 16 tweet. Bitcoin is basically flat today and the stock market is down double digits, he said.

Don't hear many people yelling about BITCOIN IS CORRELATED! today, Pompliano added. Truth is correlation doesn't matter over short periods of time. Over months and years, bitcoin remains a non-correlated asset.

Over the years, Pompliano has piped up many times, defending his stance of bitcoin as a non-correlated asset. Bitcoin is definitely a non-correlated asset, Pompliano told CNBC in a December 2018 interview. If you look at the correlation between the digital asset and the S&P 500 over the last 180 days, its at zero, he noted. If you look at it compared to the dollar index, its near zero, he added.

As of a January 2020 interview with Cointelegraph, Pompliano said his position on the matter had not changed. The most important part of bitcoin, when it comes to the global hedge, is the fact that its a non-correlated asset meaning that, as stocks go up or down, bitcoin doesnt have correlation to that, he told the media outlet.

Centralized Investor Population

Emmanuel Goh, CEO of crypto analytics company Skew, explained bitcoins price action relative to stock market investors. The top 10% wealthiest households own 84% of available U.S. stocks according to a 2016 report from the National Bureau of Economic Research (NBER). Goh told me Baby Boomers comprise most of these numbers while holding almost no bitcoin. Millennials who own bitcoin also have a small allocation to stocks, he added.

That should make, in theory, bitcoin more immune to liquidations and margin calls during a global sell-off, Goh explained. Bitcoin was still down 10% in sympathy today - a muted reaction in our view given the context for global markets and bitcoin high volatility, he said on March 9, noting a relatively small move for bitcoin given its regular tendencies.

As bitcoin continues to age, gaining further recognition with time, the asset may develop a more predictable correlation or lack of correlation to traditional markets or world events. At this point, however, cryptos pioneer asset appears to be finding its way one step at a time, changing its correlation at times.

Disclaimer: I actively trade cryptocurrencies, as well as hold a small amount of BTC, ETH, LTC, XMR, NEO, ZEC, BEAM, BCH, DASH, LINK, XTZ andvarious insignificant other altcoin positions.

Read more from the original source:
Contrary To Popular Belief, Bitcoin Isn't Consistently Correlated To Anything - Forbes

Bitcoin Price Analysis: The 6K level looks vulnerable to another downside break – FXStreet

Bitcoin had been trading higher for most of the session but just recently some selling pressure has put it into negative territory. The top of the consolidation period at 5,985 could act as support but 6K looks to be doing a good job at the moment. The price is also above the 55 SMA and this indicator does also sometimes provide support.

Looking at the chart now, the MACD histogram has turned negative but the signal lines are still above the zero line which is still positive. 7K seems to have been just a step too far for the Bitcoin bulls as there was a firm rejection at that level along with a bearish candlestick formation.

The target could be 5,285 to 5,300 which is the middle of the consolidation period and could be considered the mean value area. The overall trend is also down so shorts could be in favour at the moment.

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Bitcoin Price Analysis: The 6K level looks vulnerable to another downside break - FXStreet

Bitcoin’s Difficulty on Track for Historic Drop, but There Is Silver Lining – U.Today

The cryptocurrency market continues to see a lot of indecision as bulls and bears continue to wrestle over control. However, if Bitcoin breaks below $6,000 once again, the latter could score a resounding victory.

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Trader Big Cheds recently tweeted that the bulls were 'working hard'to hold the $6,000 level. The top coin is currently changing hands at $6,139 at press time.

The bears did manage to push the price lower on multiple occasions today, but they are yet to get behind the wheel.

Must Read

If the BTC price breaks below the above-mentionedonce again, it will most probably resume its downtrend, according to trader Cred. After that, he expects the orange coin to be stuck within its previous intraday range.

As reported by U.Today, BTC rocketed to nearly $7,000 on March 20, but this move was followed by a 20 percent pullback.

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Bitcoin's Difficulty on Track for Historic Drop, but There Is Silver Lining - U.Today