Category Archives: Bitcoin

Apple co-founder Steve Wozniak revealed he bought bitcoin when it was at at $700 during an interview with CNBC at eMerge Miami on Monday.

Wozniak didn't disclose how much he acquired, but the cryptocurrency surged above $3,000 over the weekend, meaning he gained $2,300 even if he just bought a single bitcoin.

"I remember getting interested in bitcoin some time ago," Wozniak said. "It was $70 for a bitcoin, man and I went online and you had to have a special bank account at a special bank and I couldn't buy any bitcoin so I gave up. Eventually I got some of them at the $700 stage and it went down to $350. I didn't invest, I did it so I could play with bitcoin."

Wozniak said he wanted to see what it was like to try to shop with bitcoin, at places like restaurants and hotels. "It's not that easy to do yet, but it's getting there. I was just playing around trying out how to buy and sell stuff and I didn't care I lost a ton of money, but now I'm way up," Wozniak added

Woz also touched on blockchain technology and why he thinks it's important. "I like the blockchain technology," he said. "Every single transaction is noted and saved, and that probably has a lot of good security and traceability and looking-back aspects to it ... That's probably why a lot of banks are interested in it."

Bitcoin was priced at about $700 in June of last year before losing value, and again in late October and early November before it began skyrocketing in value this year.

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Apple co-founder Wozniak bought bitcoin at $700 for fun: 'Now I'm way up' - CNBC

Forbes

Raoul Pal: Bitcoin Is Mania And Not A Store of Value... I Sold-Out ... Forbes The price of Bitcoin has risen by 210% since March to over $2900 and one of the world's most successful investment strategists is warning investors to stay ... and more »

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Raoul Pal: Bitcoin Is Mania And Not A Store of Value... I Sold-Out ... - Forbes

Fortunes are not picking up for hedge funds, or at least not for most of them. According to data compiled by Hedge Fund Research and reported by CNBC, the average hedge fund has brought in returns of only 3.5% from the beginning of the year through the end of May. That constitutes less than half of the gains that the S&P 500 has made. Nonetheless, some hedge fund have been able to stand apart from the rest of the field. Those funds focusing on technology and currencies tended to do better than the average fund. Key to the success of currency-focused firms, it appears, is an investment in Bitcoin. While most hedge funds have shied away from the digital currency, perhaps this will convince the industry that a bet on Bitcoin may be a good move.

According to the Hedge Fund Research report, "macro was led by the HFRI Macro: Currency Index, which vaulted +3.5 percent, the strongest month return since inception, bringing YTD performance to +8.2 percent." What was behind this outsized performance? "Contributions from Euro, Swiss Franc, New Zealand Dollar and Korean Won," but also, and perhaps more importantly, there were "strong contributions from exposure to digital currencies."

Given Bitcoin's performance in recent weeks, it's easy to see why those few hedge funds who hold the cryptocurrency would be outperforming others. In the past several weeks, the leading digital currency has posted a number of fresh all-time high records. Since the beginning of 2017, Bitcoin has almost tripled in value, thanks in large part to significant demand from Asia and growing expectations that it will lead a revolution in the way that banking and lending will be handled around the world.

The other category of fund that has seen success outside of the average gains reported by HFR are those focused on technology names. Tech funds have been centered around so-called "FANG" stocks as well as Apple (AAPL), bringing in average gains of 2.7% in May and YTD returns of 9.1%.

Other types of hedge funds may have the chance to make big gains if volatility spikes in the remainder of 2017. Kenneth J. Heinz, the president of Hedge Fund Research, indicated in the report that "the thematic drivers of performance for 2H17 have shifted to include not only the Trump and Yellen trades, but also the volatility reversal trade and the increased risk associated with terrorism and cybersecurity. Managers positioned tactically long and short which are able to navigate both rising and falling volatility market cycles are likely to lead industry performance in 2H17."

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Hedge Funds Trail S&P Unless They Have Bitcoin (AAPL) - Investopedia

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Bitcoins big surge continued on Sunday when the price per unit of the digital currency briefly broke the $3K mark.

That figure comes care of CoinDesks Bitcoin Price Index rival currency indexCoinMarketCap calculated the peak exchange rate at just a few cents short of $3,000. Because prices for bitcoin tend to vary across exchanges, there are slightly different ways to calculate the exchange rates hence the variation.

Whether it hit, or almost hit, $3K, however it is undeniable that bitcoin has been on a epic run for about the last six weeks or so. Bitcoins price hit $1,400 in early May and has been on a steady upward climb ever since, despite the now-frequent protests that this latest spike in the price of bitcoin is a bubble.

Billionaire Mark Cuban managed to briefly throw some cold water on the price surge by noting his concerns about a bubble. And those fears are not just for crypto-currency naysayers central figures in the bitcoin community were warning of a bubble from the stage atthe Consensus blockchain conference in May.

The enthusiasm is driven by the idea that bitcoin and its enabling technology, the blockchain, can bring data security innovation to a wide variety of fields fromhealth care record management tosupply chain tracking. Hence, bitcoin is not the only digital currency seeing a spike the tide is also lifting rival blockchain-based currencies like Ethereum, Dash, and Litecoin, which are mostly rising in tandem with bitcoin.

But a speculation-driven market is also an emotionally fragile market, and as bitcoin has shown in the past, rapidly cooling sentiment in bitcoin land can cool the price of coins as quickly as increased passion can raise them.

So whats next? With bitcoin, its always hard to say. This time next month we could be writing about how the bubble burst and bitcoin is back to $200 or we could be writing that bitcoin has broken $4K.

Well keep you posted either way.

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Bitcoin Breaks $3K - PYMNTS.com

Is bitcoins price in a bubble? Those who say so believe people are buying the cryptocurrency is for speculative purposes versus its original purpose for transactions.

Nathan Martin, writing in Economic Edge, believes most are buying bitcoin because its a better store of value. Bitcoin provides a better store of value than assets that are controlled by banks, he claims, and it will continue to do so for the foreseeable future. Hence, the number of people using bitcoin will continue to increase.

People cannot earn anywhere near the pace of actual inflation by putting their money in traditional savings accounts. Central banks control the currencies most people use and are manipulating these currencies to keep interest rates low.

Stocks, bonds and real estate are all in a bubble, as is the U.S. dollar, Martin noted. Gold and silver are also being manipulated by central banks.

Hence, there is no good store of value. Retirees on fixed incomes simply cannot, and will not be able to keep up as the impossible math of the dollar debt continues on its vertical ascent, Martin wrote.

Bitcoin is a better store of value for the following reasons.

1. Bitcoin is decentralized. Martin and many others consider this the most important characteristic of bitcoin. No central power controls bitcoin. Central banks could indirectly manipulate cryptocurrencies by creating derivatives and exchange traded funds based on those cryptocurrencies. But this will not change bitcoins underlying store of value.

Should central banks create derivatives based on bitcoin, Martin encourages people to buy bitcoin directly. Banks cannot manipulate what they dont control.

2. Bitcoins supply is limited. There will only be 21 million bitcoins created, and 80% of this number has already been created. The more funds invested in bitcoin, the greater the value of each bitcoin. Other blockchain currencies could affect bitcoins value, but all the other cryptocurrencies combined are not yet equal to bitcoins market value. In addition, those cryptocurrencies that dont have limited supply will not hold their value.

3. Bitcoin is secure. Encryption and decentralization make it so. It can be stored in cyber vaults, where owners keep a hard copy of the encryption cipher. While a bitcoin exchange and a computer can be hacked, bitcoin that is in a vault will not reside in the exchange or the computer, and only the owner has the code to access the stored bitcoin. No one can confiscate it.

4. Bitcoin transactions are stored on a public ledger that lists all confirmed transactions. Decentralized bookkeeping is more secure than centralized ledgers.

Also read: Bitcoin is no bubble in climb to $3,000

Bitcoin will someday be in a bubble, but that time is far away, Martin noted.

One benefit of cryptocurrencies is that they coexist with other forms of money used for transactions. Bitcoin is not in a bubble. Instead, people are using it to park their dollars so central banks cannot destroy their value.

Volatility will continue for bitcoin, as nothing moves in a straight line. Martin believes cryptocurrencies will trade along with sovereign currencies and eventually replace them.

He will not be convinced that the growth of bitcoins price has stalled until its market cap rivals that of the United States money supply, which is $13.5 trillion.

Featured image from Shutterstock.

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4 Reasons Why Bitcoin Is Not In A Bubble - CryptoCoinsNews

Concerned by rapid developments in quantum computing, a Malaysian network security expert has requested Bitcoin users to exercise caution. Read more...

Bitcoin users are warned well in advance against the threat posed by quantum computers. A well-known Malaysian cybersecurity expert and associate professor, Dr. Zuriati Ahmad Zukarnain recently explained about the developments in computing technology and its implications on cryptocurrencies in their current form.

Dr. Zukarnain, while speaking to a reporter from one of the Malaysian news publication stated that the rapid developments in quantum computing have now made it possible for hackers to compromise the private keys associated with Bitcoin wallet addresses. She said,

Quantum computers are able to create a large factorization and can detect the public and private keys used in Bitcoin transactions The threat is when the private key is sniffed by third parties, they are free to make transactions using a hacked account as the private key proves the ownership of a Bitcoin address used to send and receive the currency.

The professor, referring to certain studies, mentioned the growing usage of Bitcoin and other cryptocurrencies in Malaysia which, in the case of an attack might cause significant losses to many people in the country. Recently, the Russian Quantum Centre announced a successful trial of quantum proof blockchain solution for banking sector which they managed by coupling Quantum Key Distribution and post-quantum cryptography into the distributed ledger.

The Russian Quantum Centre intends to expand the deployment of its latest quantum proof blockchain solutions to various banking institutions across the country and eventually across the world. The warning against the threat of quantum computers comes well in advance, much before the computers could become readily available.

The threat must be taken seriously by the cryptocurrency community, and it will be better if the developers start working on blockchain upgrades for the respective currencies from now itself so that they are not caught by surprise when the problem becomes serious.

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Malaysian Security Expert Warns Bitcoin Users Against Cyber Attacks - newsBTC

Forbes

Bitcoin Will Make Many More Millionaires Before Diving Forbes Bitcoin has been flying high lately, making many investors overnight millionairesinvestors who poured money into the digital currency when it was trading at a tiny fraction of its current price. And it will make more millionaires, as it could reach ... You can't hold a bitcoin, but the web currency's value has skyrocketed. Why?Phys.Org 3 Reasons Volatility Is Still a Serious Concern for Bitcoin InvestornewsBTC all 6 news articles »

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Bitcoin Will Make Many More Millionaires Before Diving - Forbes

One of the biggest financial stories of 2017 has been the seemingly unstoppable rise of bitcoin, which has more than tripled this year and seems to make new records by the day.

Such a rally has inevitably raised questions over whether there is a bubble in the digital currency, or in the broader space of cryptocurrencies, which earlier this week topped $100 billion in combined market capitalization. Breaking that milestone was largely due to bitcoin BTCUSD, +1.78% which by itself accounts for nearly half the value of the still-nascent sector. However, a new measure of bitcoin valuation, one based roughly on the price-to-earnings ratio applied to stock valuation, suggests that rally still has room to grow.

Read: 3 reasons why bitcoins surge may not be a bubble

Opinion: Three reasons to fear the coming crash in bitcoins

Gauging whether bitcoin is overvalued is tricky, as it is divorced from many of the standard attributes that can measure a securitys fundamentals. Unlike a stock, bitcoin has neither traditional revenue nor profits behind it, ruling out such equity statistics as price to sales or earnings before interest, tax, depreciation and amortization.

And because it isnt backed by a central bank or government, viewing it in the way one might a currency isnt an apples-to-apples comparison. A commodity like oil can be measured based on the principles of supply and demand; bitcoin has no equivalent underlying asset. (The Internal Revenue Service classifies bitcoin as property rather than a currency, while the U.S. Commodity Futures Trading Commission classifies it as a commodity.)

However, some analysts have developed what could be considered a price-to-earnings ratio for bitcoin, one that suggests the recent surge may not have taken it to bubble territory.

Bitcoins P/E ratio looks at the digital currencys network valuethe number of outstanding bitcoins multiplied by price; this figure is currently $44.69 billionagainst its daily transaction volume.

The reason I call it a P/E ratio is because when I think about what a P/E signifies for equities, it is basically the function of market cap and earnings. The earnings are the underlying utilitythe cash flow of the company, explained Chris Burniske, a blockchain analyst at ARK Invest, who has helped to develop this metric.

Bitcoin P/E is composed of similar concepts. Instead of market cap, you have network value. Thats then divided by the underlying utility of bitcoin, which is its ability to move money. Thats bitcoins core utility, same as a companys core utility is earnings.

This metric currently gives bitcoin a ratio of roughly 50, which is under its long-term average and well below past peaks, which have been above 200, and one time spiked to nearly 450.

On a stock, a P/E ratio of 50 would be pricey, Burniske noted, but I dont know if it should be considered pricey for bitcoin. It looks to be in a comfortable range, it isnt an outlier and right now the broad takeaway I have is that it doesnt look like were due for a mean revision.

He added that over time, cryptocurrencies would find a base range for valuation on this metric, one that lets investors know what would be reasonable to pay based on the cryptos daily utility.

While high P/E ratios are often seen as sell signals for stocks, Burniske suggested that any kind of extreme reading on this metric could signal a bitcoin selloff.

This ratio drops when bitcoin is in the late stages of rallies, because investors would take profits or move their money between exchanges out of nervousness. That leads to a lot of transaction value, which makes the denominator higher. Thats why its important to me, from a valuation standpoint, that it isnt high or low.

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Is bitcoin in a bubble? This metric suggests there's more room to grow - MarketWatch

Bitcoin is like gold in many ways. Like gold, Bitcoin cannot simply be created arbitrarily. Gold must be mined out of the ground, and Bitcoin must be mined via digital means. Linked with this process is the stipulation set forth by the founders of Bitcoin that, like gold, it have a limited and finite supply. In fact, there are only 21 million Bitcoins that can be mined in total. Once miners have unlocked this many Bitcoins, the planet's supply will essentially be tapped out, unless Bitcoin's protocol is changed to allow for a larger supply. Supporters of Bitcoin say that, like gold, the fixed supply of the currency means that banks are kept in check and not allowed to arbitrarily issue fiduciary media. But what will happen when the global supply of Bitcoin reaches its limit?

It may seem that the group of individuals most directly effected by the limit of the Bitcoin supply will be the Bitcoin miners themselves. On one hand, there are detractors of the Bitcoin limitation who that say that miners will be forced away from the block rewards they receive for their work once the Bitcoin supply has reached 21 million in circulation. In this case, these miners may need to rely on transaction fees in order to maintain operations. Bitcoin.com points to an argument that miners will then find the process unaffordable, leading to a reduction in the number of miners, a centralization process of the Bitcoin network, and numerous negative effects on the Bitcoin system.

This argument assumes that transaction fees alone will be insufficient to keep Bitcoin miners financially solvent once the mining process has been completed. On the other hand, there are reasons to believe that transaction fees and mining costs will even out in the future. Looking ahead by several decades, it is not difficult to imagine that mining chips will become small and highly efficient. This would reduce the burden placed on miners and would allow mining to become an activity with a lower threshold of initial cost. Further, transaction fees may increase, and this could help to keep miners afloat as well.

Bitcoin has already seen massive hikes in price in just the past few months. While no one is entirely sure how Bitcoin will continue to spread to the larger financial world, it seems likely that a limited supply of the currency may cause prices to continue to increase. There are also stockpiles of inactive coins that are held around the world, the largest supply of which belongs to the person or group who founded Bitcoin, Satoshi Nakamoto. Perhaps this supply, consisting of roughly one million Bitcoins, is intentionally being saved for a time when the global supply is facing increased levels of demand.

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What Happens to Bitcoin After All 21 Million are Mined? - Investopedia

Forbes

Bitcoin Is At An All-Time High, But Is It About To Self-Destruct? Forbes The bitcoin price has been on a tear recently, more than doubling to about $2,900 over the last three months. (It didn't hurt that Sunday, the popular Tim Ferriss podcast released a two-and-a-half-hour episode on the subject.) But its meteoric rise ... Business Expert Asserts That Bitcoin is Not CurrencyFuturism Mark Cuban's Twitter Trolling Sent Bitcoin Prices TumblingFortune Will Bitcoin ETF Ever Be Accepted by US Regulators?CoinTelegraph CNBC -Bloomberg -The Merkle all 59 news articles »

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Bitcoin Is At An All-Time High, But Is It About To Self-Destruct? - Forbes