Category Archives: Bitcoin

Corporate support for the Enterprise Ethereum Alliance (EEA) is growing after 86 firms including State Street, Toyota, Merck, ING, Broadridge and Rabobank joined the collective that is seeking to use blockchain technology to run smart contracts at Fortune 500 companies.

Ethereum is an open-source, public, blockchain that anyone can use as a decentralized ledger. It has its own cryptocurrency called ether on the front-end, which is similar to Bitcoin, but the underlying Ethereum network is what is attracting companies' interest.

While the original Bitcoin blockchain has tended to be used for consumer payment transactions, the adoption of Ethereum blockchain technology by the corporate world means it could eventually be bigger than its early stage rival.

Ethereum technology is specifically intended to support smart contract applications that can automate complex physical and financial supply chain procedures and compliance processes involving multiple parties. It has numerous potential internal end uses such as reconciliation.

A smart contract on the Ethereum network is merely a way for people to make agreements and automate enforcement, all on a distributed network of computers. The contract is essentially an operating procedure that aids efficient management.

John Hancock Financial, for example, is experimenting with a tailored version of Ethereum to keep track of compliance with know your customer (KYC) and anti-money laundering (AML) regulations in its wealth management unit.

Meanwhile, European aircraft maker Airbus is testing to see if its supply chain management can be shifted to a blockchain that relies on Ethereum.

JPMorgan Chase, Microsoft, IBM, CME Group, BNY Mellon and other large multinationals are already EEA members, having joined when it was established in February 2017.

In a statement, Julio Faura, chairman of the EEA and head of blockchain innovation at Banco Santander, said, "the enthusiasm around EEA is remarkable".

He added: "Our new members come from varying industries such as pharma, mobile, banking, automotive, management consulting, and hardware."

Rival networks

The EEA is not alone in seeking to create standards for blockchain systems. Rivals include the R3 consortium, Digital Asset Holdings and the Hyperledger Project.

The latter is being used by the SWIFT global payment and securities messaging network for the third stage of its global payments innovation (gpi) project which seeks to make international payments as fast and easy to track as logistics deliveries. It is in the early stages of a distributed ledger technology (DLT), aka blockchain, proof of concept (PoC) that is not expected to come to fruition for many years yet.

In the meantime, Ripple has its own rival protocol for correspondent banks using Interledger that it hopes to attract volume to before SWIFT's PoC gains traction.

Challenges

As with any new technology a number of caveats apply to blockchain technology, principally that it is yet to be proven by anything other than small scale or pilot applications to date. Regulators will also need convincing that the networks are safe.

Convincing competitors to work together in a network that shares market information may also prove difficult. For instance, Goldman Sachs and Morgan Stanley left the R3 consortium last year to pursue their own blockchain projects and alternative collaborations, potentially harming its prospects of producing useful real-world applications of the still experimental blockchain technology.

If a chain or end use application offers a massive competitive advantage then certain groups may seek to hive off their own separate 'chains' to which they will control access, which is another destabilizing factor.

Permissioned v Permissionless chains

Arguments are raging over the degree to which public or closed access should be allowed on different blockchains, which are commonly referred to as permissionless or permissioned 'chains'.

Most corporates and banks favor permissioned chains as they can apply minimum security, compliance and other standards, while technology evangelists and fintech disruptors tend to favor the more open permissionless model as they believe the full network benefits of the technology accrue this way.

In the same way that the internet and specifically the later world wide web works so well because everyone has access to it and protocols such as the SSL security layer are shared the tech evangelists argue that the blockchain should be maintained as a public project for the benefit of all.

Only time will tell who wins the debate. But the net itself has already gone through numerous iterations and the public vs. private discussion is a constant theme in that field, as much as it is in the blockchain arena.

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Bigger than bitcoin? Enterprise Ethereum Alliance grows in size - CNBC

Bitcoin has blown through $2,100.00 seemingly on a one-way trip to infinity, and beyond. It may take a while for the crypto-currency to get to infinity. But, as its unabated pace shows it may actually get there. There are more reasons to pick up Bitcoin as news that a Japanese airline is going to allow Bitcoin as a form of payment. While Bitcoin is not widely accepted in the United States or elsewhere, it is turning a corner in other parts of the world. As more companies accept Bitcoin as a form of payment, it is a matter of time before there is a shift in the U.S. and other parts of the world. Bitcoin will continue its climb higher.

Since April's legislative move in Japan to make Bitcoin a legal currency, the price has been a one-way move. Now, Bitcoin can add yet another reason to its upward price movement: A Japanese airline will begin accepting Bitcoin as a form of payment. This continues to legitimize

the crypto-currency. It starts out as just one company allowing acceptance of the coin. Then, others follow. Then, Bitcoin becomes a way of life as a form of payment. And, as the currency's demand increases so does its value. Keep in mind that there is a limited amount of coins; there are only 20 million coins in existence. However, you can use partial coins; you do not need to buy just one coin. This is why the coin's value continues to increase because of the limitation on the total coins in circulation while its widespread use and demand increases.

In an article last week, I talked about Bitcoin and its fundamentals. There were a couple of comments that brought this subject up and thought it was laughable. Perhaps in that individual's part of the world, Bitcoin has zero acceptability. But, that is far too narrow of a viewpoint. In Japan, the number of reasons to get into Bitcoin are too many to count.

In the United States, there was an attempt at an ETF that was turned down by the SEC - the commission is revisiting its decision. First, I do not believe that an ETF will have any impact on the crypto-currency, whatsoever. In fact, I see this as pushing on a string. The rationale behind denying the ETF was that the exchanges themselves have no guarantees, and I agree with that. I see problems with exchanges all the time. But, the widespread use of Bitcoin means that this will help alleviate these problems. If more and more users come to market then there is greater and greater volumes. Also, if there are any exchanges out there that are marginal they will either be pushed to make-or-break levels. Do your research about the exchanges you use.

However, and this is the most important thing, and the reason I think the SEC got it completely wrong: My wallet is secure. Your wallet is secure. Our transaction is secure. There is no intermediaries. The process works and we both agree on this process and the price of Bitcoin at that very moment. But, for whatever reason, the SEC looked at the exchanges as a hang up. Who cares about an exchange out in Bangladesh? I don't use that exchange so why is it a variable in the thoughts of the crypto-currency?

In Japan, the Bank of Japan is in the process of diluting their currency into oblivion. The Bank of Japan has been printing money in a process to increase inflation and stimulate the economy. They are not making much headway. In the meantime, Bitcoin offers an alternative to the Japanese yen that cannot be diluted. And, if people continue to repeat history, then the price of Bitcoin has one direction to go: Up. But, in comparison, the Japanese yen has one direction to go: Down. Both forms of payment are now legal. Your choice.

As far as diluting a currency goes, what is the difference between Japan and the United States? Mathematically, as it turns out, not a whole helluva lot. Here are the charts on the respective balance sheets for both the Bank of Japan and the Federal Reserve:

Just before the massive QE programs in Japan, the Bank of Japan had approximately 1.50 trillion in their balance sheet. They have now pushed their balance sheet up to 5 trillion a multiple of 2.33. In the United States, the Federal Reserve's balance sheet was $800 billion and now sits at $4.5 trillion, a multiple of 2.27. Hmmm... The difference is? Negligible. And, yet, Japanese citizens are pushing into Bitcoin at an unprecedented and impressive pace. These are fundamentals and they are formidable.

As for the United States and Europe, the countries are likely to simply ignore Bitcoin as long as they can until they can figure out way to make money off of it, read: Taxation. If you want to know how someone is going to respond look at their incentives. So far, the major government's of the world Have largely ignored Bitcoin. At some point, these governments may - or, may not - address the crypto-currency. I see it as an alternative to cash... With the added benefit that it just keeps going up simply because there is a set, limited supply. However, there are some 7 billion potential users of

which the percentage of actual users is likely to be in the tenth and hundredths, if not tenths of thousandths of a decimal point. In other words, the number of people using Bitcoin is minuscule at best, but going upward.

Last week, I thought for sure that Bitcoin would finally take a breather. Nope. More news comes out stating that there are more reasons to be long Bitcoin, not to mention the fact that Bitcoin may now become a hedge against risk in the world. With the price of Bitcoin at $1,725.00, I had gone long a risk reversal to the downside: I was long $1,650.00 puts, over short $1,800.00 calls (Both one-week). When the price dipped into the upper 1,600 handle a buddy of mine called in the middle of the night and implored me to cover the position. He is long and saw the futility of a short position in Bitcoin. I did not relent. Instead, I did a covered delta hedge going long .35 delta thinking that if the price drops the rest of my put position would be profitable and I could then sit on the long positions once the downside move was over with. That trade began to make a lot of sense to me.

Then, the price turned and just kept soaring higher, and higher, and higher and higher. It did this on formidable fundamentals. I had to begin the process of covering my short $1,800.00 calls and did so with delta hedging... And, Bitcoin kept going higher on a one-way ticket upward. There was an over $500.00 point swing. Because of my delta hedge, I was able to put on a bit of armor and protect the downside of my position, and in fact, after that $500.00 swing upward in price, I was profitable. I earned $1.00. I only wish that was a joke. I took that profit simply because of a bit of pride and a bit of a learning lesson.

Lesson learned?: Listen to your own analysis. I will remain long BTCUSD from this point forward, although, I will get out from time-to-time if the currency looks set to take a breather. But, I will not take the opposite side of this trade again. The fundamentals continue to improve in favor of more and more users getting into Bitcoin while there supply is limited... And, now I can use it to buy a plane ticket and travel throughout Asia.

Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in COIN, LONG BTCUSD over the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Bitcoin: To Infinity And Beyond? - Winklevoss Bitcoin Trust ETF ... - Seeking Alpha

A closely-watched fight between the Internal Revenue Service and a popular bitcoin exchange took a new twist last week, as senior Republicans in Congress sent a sharply-worded letter that suggests the tax agency is overstepping its powers.

The letter concerns an IRS investigation into possible tax evasion by customers who use Coinbase, a San Francisco-based company that many people use to buy digital currencies. As part of the investigation, which began last year, officials demanded that Coinbase turn over information for every one of its accounts.

Coinbase and its customers are currently in court trying to block the demand, saying it's too broad, and now the letter from the Republicans is likely to give them extra ammunition.

"The summons is estimated to affect 500,000 active Coinbase customers and would result in the production of millions of pages of associated records, many of which contain personally identifiable information ... Based on the information before us, this summons seems overly broad, extremely burdensome, and highly intrusive to a large population of individuals ," says the letter, which is signed by Sen. Orrin Hatch (R-Ut), Chairman of the Senate Finance Committee, and by Vern Buchanan and Kevin Brady, who head the House Committee on Ways and Means. (my emphasis)

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The Republicans' concerns echo those of Coinbase and its customers, who argue the IRS does not need every single Coinbase account to carry out its audit, and that the investigation sweeps in people who have clearly done nothing wrong.

The tax agency, for its part, has pointed out that only 802 Coinbase users filed a tax form related to bitcoin in 2015, which suggests large number of people have failed to declare capital gains related to bitcoin.

The IRS investigation also comes at a time when the price of bitcoin has been on an incredible tear, climbing from $13 in 2013 to a new high of over $2,000 last week. Those who profited from the higher priceseither by selling bitcoin for dollars or exchanging it for merchandiseare required to pay taxes on the gain.

Some Coinbase customers, however, have not sold any bitcoin at all while many others hold only a minimal amount, raising questions of why the IRS demanded information about every account.

One theory, according to a lawyer who spoke with Fortune late last year, is that the IRS's sweeping demand is a negotiating tactic to make Coinbase more cooperative, and that the two sides will reach an agreement to allow the agency to inspect some, but not all, of the accounts.

The letter from the Republicans, which asks the IRS to explain its strategy for enforcing tax payments on digital currency by June 7, is likely to put pressure on the agency to come to a deal with Coinbase.

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IRS Probe of Bitcoin Goes Too Far, GOP Warns - Fortune

Are you a Bitcoin miner or trader, butfind yourself lacking the compulsive need to checkexchange rates like thedrug-fuelled daytraders of Wall Street? Fear not you too canadorn your home or office with aBitcoin Price Ticker! The post is in Italian but you can read a translated version here.

Its a straightforward enough build an Arduinocompatible board with an onboard ESP8266 is hooked up with an HD44780-compatible LCD.Its then a simple matter of scraping the Bitcoin price from the web anddisplaying it on the LCD. Its a combination of all the maker staples, tied together with some off-the-shelf libraries its quick, and it works.

What makes the build extra nice is the use of custom characters on the LCD. The HD44780 is a character based display, and this project appears to use a screen with twolines of sixteencharacters each. However, a custom character set has beenimplemented in the display which uses several characters on the screen to createa single number. Its a great wayto make the display more legible from a distance, as the numbers are much larger, and the Bitcoin logo has been faithfully recreated as well. Its small touches like this that can really set a project apart.Wed love to see this expanded to display other financial market information and finished off in a nice case.

If youre wondering what you can actuallydo with Bitcoin, check out the exploits of this robotic darknet shopper.Oh, and Microsoft will take them, too.

Go here to see the original:
Bitcoin Price Ticker - Hackaday

Photograph by Getty Images

The digital currency bitcoin is on another remarkable run, soaring nearly 65% in the last month, and smashing the symbolic $2,000 mark for the first time ever this week. Bitcoin has gone on tears in the past, but never quite like this.

So what's behind the latest bull run? It's hard to say for sure, since bitcoin is so unpredictable, but here are three factors that are contributing to bitcoin's boom:

The $2,000 bitcoin milestone comes amid a larger trend of investors clamoring for crypto-currency of all sorts. While digital money was once seen as the province of cranks and computers geeks, it's now so mainstream that investors see it as a new asset class and are creating hundred million dollar hedge funds to acquire it.

Meanwhile, others see digital currencies as an asset like gold, which can hold its value amid times of government instability. Recent political upheaval in Brazil and the United States, which led to drops in the dollar and the real, may have contributed to the recent uptick in bitcoin buying.

Finally, bitcoin may be benefiting indirectly from a recent explosion in the value of other digital currencies like Lumens, Ethereum and Litecoin . While it's possible to buy these currencies with dollars or other traditional currencies, it's often simpler to use bitcoins (which is the easiest digital currency to acquire) to buy them. In other words, more people may be buying bitcoin as a vehicle to invest in more exotic currencies.

At the start of April, regulators in Japan introduced new rules that treated bitcoin less like an outlaw currency and more as a part of the banking system. That change led to a burst of trading activity in the country investors rushed to swap yen for bitcoin. The effect on price has been predicable.

And in China, where the authorities have long had a love-hate relation with bitcoin, it appears the country is growing more tolerant once again. As CNBC reported, analysts are pointing to a big drop in the difference in bitcoin prices between U.S. and Chinese exchanges. This suggests bitcoin-related investments in China are less risky:

In other words, a whole lot of Asian investment is causing bitcoin to soar.

If you've followed bitcoin for a while, you know the currency is prone to spectacular crashes. The crashes followed flurries of press reports about the value of bitcoin, which created a hype cycle, and in turn drew the attention of mainstream investors who helped inflate the price.

It sure feels like we're in the midst of a hype cycle now. Social media is buzzing about the incredible surge in the value of crypto-currency assets. And this year's edition of Consensus , a three-day trade show in New York, promises to be the splashiest yet with big names like IBM and Microsoft appearing alongside a long list of venture capital firms.

There a lot of good reasons for the hypenot least because digital currency and blockchain technology (an online ledger system that relies on multiple computers) has gone mainstreambut also reasons for caution. As with past hype cycles, there are far more people cheering for bitcoin than against it. This is partly because there are few people who truly understand digital currency, and most of those who do own a large amount of it, so skeptics are in short supply.

As of Sunday afternoon, the value of a bitcoin was $2,020, according to Coinbase.

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3 Reasons Why Bitcoin Broke $2000 - Fortune

Bitcoin Price Key Highlights

Bitcoin price might need to make a correction before sustaining its climb past the $2000 mark.

Technical Indicators Signals

The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. This short-term moving average is also close to the rising trend line thats been holding since the start of May, adding to its strength as support.

In addition, applying the Fibonacci retracement tool on the latest swing low and high shows that the 38.2% to 50% levels line up with the trend line and a former resistance area that might now hold as support. If so, bitcoin price could resume its climb past the swing high around $2070 and climb to $2100 next.

RSI is turning lower from the overbought zone to show a return in selling pressure. A bit of divergence can be seen as this oscillator made lower highs since May 10 while price had higher highs then.

Stochastic is also heading south from the overbought zone to show that sellers are taking control of bitcoin price action. Once the oscillator hits the oversold region, buyers could get back in the game.

Market Factors

Rising volumes in Japan are still seen to be the major drivers of the bitcoin price gains, but the increase in geopolitical risk is also sustaining the climb. Last week, the focus has been on the uncertainty generated from the ongoing investigation on Trumps intelligence information leak to Russian officials.

Apart from spurring demand for non-traditional assets like bitcoin, it has also led to lower demand for the dollar on weakening Fed rate hike expectations for next month and declining US bond yields. Even if the Fed does tighten, the lack of progress on fiscal reform could weigh on the odds of future rate hikes for the year.

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Bitcoin Price Technical Analysis for 05/22/2017 Can It Go Past $2000? - newsBTC

NEW YORK: It is worth more than an ounce of gold right now, it is completely digital and it is the currency of choice for the cyberattackers who crippled computer networks around the world in recent days. When the attackers ransomware sprang into action, it held victims hostage by encrypting their data and demanding they send payments in bitcoins to regain access to their computers. Bitcoin has a fuzzy history, but it is a type of currency that allows people to buy goods and services and exchange money without involving banks, credit card issuers or other third parties. Here is a brief look at bitcoin: How bitcoins work Bitcoin is a digital currency that is not tied to a bank or government and allows users to spend money anonymously. The coins are created by users who mine them by lending computing power to verify other users transactions. They receive bitcoins in exchange. The coins also can be bought and sold on exchanges with US dollars and other currencies. How much is it worth?One bitcoin recently traded for $1,734.65, according to Coinbase, a company that helps users exchange bitcoins. That makes it more valuable than an ounce of gold, which trades at less than $1,230. The value of bitcoins can swing sharply, though. A year ago, one was worth $457.04, which means that it is nearly quadrupled in the last 12 months. But its price doesn't always go up. A bitcoins value plunged by 23 percent against the dollar in just a week this past January. It fell by the same amount again in 10 days during March. Why bitcoins are popular Bitcoins are basically lines of computer code that are digitally signed each time they travel from one owner to the next. Transactions can be made anonymously, making the currency popular with libertarians as well as tech enthusiasts, speculators and criminals. Who is using bitcoin? Some businesses have jumped on the bitcoin bandwagon amid a flurry of media coverage. Overstock.com accepts payments in bitcoin, for example. The currency has become popular enough that more than 300,000 daily transactions have been occurring recently, according to bitcoin wallet site blockchain.info. A year ago, activity was closer to 230,000 transactions per day. Still, its popularity is low compared with cash and cards, and many individuals and businesses will not accept bitcoins for payments. How bitcoins are kept secureThe bitcoin network works by harnessing individuals greed for the collective good. A network of tech-savvy users called miners keep the system honest by pouring their computing power into a blockchain, a global running tally of every bitcoin transaction. The blockchain prevents rogues from spending the same bitcoin twice, and the miners are rewarded for their efforts by being gifted with the occasional bitcoin. As long as miners keep the blockchain secure, counterfeiting shouldn't be an issue. How bitcoin came to beIt is a mystery. Bitcoin was launched in 2009 by a person or group of people operating under the name Satoshi Nakamoto. Bitcoin was then adopted by a small clutch of enthusiasts. Nakamoto dropped off the map as bitcoin began to attract widespread attention. But proponents say that does not matter: The currency obeys its own internal logic. An Australian entrepreneur last year stepped forward and claimed to be the founder of bitcoin, only to say days later that he did not have the courage to publish proof that he is.

NEW YORK: It is worth more than an ounce of gold right now, it is completely digital and it is the currency of choice for the cyberattackers who crippled computer networks around the world in recent days. When the attackers ransomware sprang into action, it held victims hostage by encrypting their data and demanding they send payments in bitcoins to regain access to their computers. Bitcoin has a fuzzy history, but it is a type of currency that allows people to buy goods and services and exchange money without involving banks, credit card issuers or other third parties. Here is a brief look at bitcoin: How bitcoins work Bitcoin is a digital currency that is not tied to a bank or government and allows users to spend money anonymously. The coins are created by users who mine them by lending computing power to verify other users transactions. They receive bitcoins in exchange. The coins also can be bought and sold on exchanges with US dollars and other currencies. How much is it worth?One bitcoin recently traded for $1,734.65, according to Coinbase, a company that helps users exchange bitcoins. That makes it more valuable than an ounce of gold, which trades at less than $1,230. The value of bitcoins can swing sharply, though. A year ago, one was worth $457.04, which means that it is nearly quadrupled in the last 12 months. But its price doesn't always go up. A bitcoins value plunged by 23 percent against the dollar in just a week this past January. It fell by the same amount again in 10 days during March. Why bitcoins are popular Bitcoins are basically lines of computer code that are digitally signed each time they travel from one owner to the next. Transactions can be made anonymously, making the currency popular with libertarians as well as tech enthusiasts, speculators and criminals. Who is using bitcoin? Some businesses have jumped on the bitcoin bandwagon amid a flurry of media coverage. Overstock.com accepts payments in bitcoin, for example. The currency has become popular enough that more than 300,000 daily transactions have been occurring recently, according to bitcoin wallet site blockchain.info. A year ago, activity was closer to 230,000 transactions per day. Still, its popularity is low compared with cash and cards, and many individuals and businesses will not accept bitcoins for payments. How bitcoins are kept secureThe bitcoin network works by harnessing individuals greed for the collective good. A network of tech-savvy users called miners keep the system honest by pouring their computing power into a blockchain, a global running tally of every bitcoin transaction. The blockchain prevents rogues from spending the same bitcoin twice, and the miners are rewarded for their efforts by being gifted with the occasional bitcoin. As long as miners keep the blockchain secure, counterfeiting shouldn't be an issue. How bitcoin came to beIt is a mystery. Bitcoin was launched in 2009 by a person or group of people operating under the name Satoshi Nakamoto. Bitcoin was then adopted by a small clutch of enthusiasts. Nakamoto dropped off the map as bitcoin began to attract widespread attention. But proponents say that does not matter: The currency obeys its own internal logic. An Australian entrepreneur last year stepped forward and claimed to be the founder of bitcoin, only to say days later that he did not have the courage to publish proof that he is.

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What is bitcoin? A look at the digital currency - Arab News

With President Trump's problems and political grandstanding dominating the daily news cycle, several major stories have been pushed out of the spotlight. A global cyberattack that covered 150 countries, 200,000 computers and major institutions like FedEx (FDX) , the U.K. National Health Service and the Russian central bank has received comparatively limited coverage. At the same time, the alternative digital currency, Bitcoin, which was born in cyberspace, has reached all-time highs. Gold gets honorable mention as a safe haven, but not much more. But where does the real risk, as well as the real value, lie?

In view of the severity of the latest cyberattack, it is only prudent to examine cybersecurity in relation to our financial system. The central bank of Russia, Bank Rossii, was one of the victims of this latest attack, but the Federal Reserve Bank of New York was also a victim of cybertheft as recently as February 2016. That heist of $81 million was linked to Bangladesh and possibly North Korea.

With these types of large international players constantly attacking the core of banking and finance, how safe are all the digital dollars that we have stored in cyberspace? Cybersecurity experts estimate that there are over 200 million attacks on the system daily. Although very few of these attacks succeed, their severity continues to grow, exposing the inherently fragile nature of our highly interconnected financial system. This risk underscores the value of holding a real asset whose value is not dependent upon the financial system.

Bitcoin has got everyone talking these days. Even though it is a relatively new phenomenon (it's only been in existence since 2009), it has captured the imagination of many in the financial community. With an eight-year track record, bitcoin has demonstrated that it has value. The question is, how much value and value measured by what?

Bitcoins can be attained by digitally mining for them or in exchange for other currencies. Its value lies in the qualities it possesses. Like other forms of money, it is a medium of exchange, unit of account and store of value. According to a research produced by Cambridge University in 2017, there are 2.9 million to 5.8 million unique users actively using a cryptocurrency wallet, most of them using bitcoin. Clearly bitcoin has a use as a medium of exchange and unit of account, but will it perform as a store of value? Only time will tell.

Currently bitcoin is valued at 1 bitcoin to roughly $1,850. Quite a valuation for a currency backed only by an algorithmic data mining process married to the good faith and trust of its users. The question remains, will bitcoin users be able to reach into the cybersphere and grab those bitcoins in times of financial stress, or will that wealth simply vanish in a haze of government intervention, cybertheft or internet malfunction.

Where does gold fit into this modern crypto world of finance? For the answer, we return to the basic properties of money. Gold clearly is a unit of account. It is measured and valued against all other major currencies daily. Gold is a medium of exchange. Gold remains a staple of all major central bank reserve assets. It remains valued as a medium of exchange in global trade especially in times of stress. This has been demonstrated most recently by Iran, Venezuela and Greece using gold to settle debts.

The most important use of gold, however, could very well be its property as a store of value. For more than 5,000 years, gold has been synonymous with wealth. Its inherent physical properties have been universally valued. Gold is not tied to any country, financial system or counterparty. It is no one's liability.

In fact, it is the only tangible, liquid, non-financial asset that is practical to own outside the financial system while remaining marketable at transparent prices across the world's financial centers.

This is where the real value of gold lies. It is a store of wealth outside the digital, crypto and cyber worlds of finance. Physical gold greatly reduces, if not totally eliminates, this new, unknown cyber risk. Gold will never just vanish into the ether or be stolen by a phantom hacker on the other side of the planet. So as I watch the news and assess where the risks to wealth lie, I think physical gold is a pretty good place to be. And it sure is nice that it's cheap now relative to most other asset classes.

David Yoe Williams Jr. is a principal at Strategic Gold, a Naples, Fla.-based firm that buys and stores physical gold for investors.

Original post:
Is Bitcoin Safer Than Gold? - TheStreet.com

I had planned to put out our research on "Will there be an ETF Bubble?", but two things came up:

One: This is so outrageous, I had to write about it. In my mind, the only way you can treat absurdity is by laughing at it. See article, unless you have no sense of humor.

Two: I have a couple quoted comments from experts coming in, that will be weighing in on ETFs.

So, next week: "The ETF Bubble"

Now, about Bitcoins: Here's a quick guide: (italics and bold, mine)

What is it:

Crypto-currency

What actually is that? A made up name?

Who invented it? Satoshi Nakamoto (an alias)

When did it debut?

2009 - An actual fact.

What's the hook about it?

It's the first decentralized peer to peer payment network that is powered by users with no central authority or middlemen.

Is it a network or a currency, or what? No controls, no backing and no regulations about it.

Who owns/controls it?

Nobody

Is that anarchy or chaos or both?

Where do you get them? There are about 50 Bitcoin exchanges, 2 in the US, 7 "international," the rest in somewhat civilized countries, including one in China. Comfortable yet?

Where do you use it?

It's hard to tell. It's up to the individual businesses. No directories I could find. About 20 countries may have businesses that take it. There is a Crypto-Currency Foundation in Russia. Um not much help, there.

How is its use protected?

There's a Full Node. I can't even go there, it's too easy.

Is it safe?

The Royal Bank of India has been repeatedly flagging concerns on virtual currencies like Bitcoins, stating that they pose potential financial, legal, customer protection and security-related risks. In recent cyber attacks, "ransomware'' hackers held victims hostage by encrypting their data and demanding them to send payments in bitcoins to regain access to their computers. (Economic Times, 5-17-17). So the answer is:

No.

Is it widely used?

Between 3-6 million people use them.

That's a lot of dupes.

So, how do I get them, then?

"Mining"

Get a shovel, in more ways than one.

Who "runs" it?

Somebody named Gavin Andersen, formerly Gavin Bell; maybe Satoshi Nakamoto, who knows?

Is it a good investment?

Stanford and Princeton say bitcoin has volatility seven times greater than gold, eight times greater than the S&P 500, and 18 times greater than the U.S. dollar. My answer:

No.

Some of the hype tossed by Bitcoin sellers include:

Buy bitcoins with your IRA

Seriously? Sure, reverse mortgage your house while you're at it.

It's a new kind of money

Wait, I thought it was a network?

Buy bitcoins in 30 seconds. So I can lose money at the speed of light. We can double your bitcoin value in 100 hours

You just write it down and give it to me, right?

Earn .025% in daily interest

Is that FIDC insured?

Worldwide payments

To whom?

A control against fraud

Wanna Bet?

Low processing fees.

It costs money to use "money."

Fast peer to peer transactions.

Spend it at the speed of light.

If you're a vendor you can sign up to receive bitcoins.

Then what do I do with them?

The Bitcoin network never sleeps.

You can pay for them anytime.

Choose your own fees.

WHAT? How about -0-?

Some effort may be required to protect your privacy

That's reassuring.

Trust and Integrity, not like banks

Enough, already!

So, here's the worst part:

Last month, the SEC trashed an application to list a Bitcoin ETF. Under corporate pressure (from the financial firms, now). NOTE: IF YOU KNOW OF A WORSE IDEA, PLEASE LET ME KNOW. I'M RUNNING OUT OF MATERIAL.

The SEC said they will review that decision.

An ETF that tracks a mythical digital currency bitcoin that has no financial fundamentals, no earnings except for the collectors, and a handful of peculiar markets.

Based on what I read from the proponents, "Bitcoin is a virtual currency that can be used to move money around the world quickly and with relative anonymity, without the need for a central authority, such as a bank or government. A fund holding the currency could bring more professional investors to the asset and push its price higher."

All in the name of profits, right. Do you think the description is self-serving?

What about risk? SEE "VOLATILITY, ABOVE. At least with Krugerrands, there was a country involved; and, they're GOLD! I could not find Bitcoinistan on any global map.

It is virtual.

There's nothing behind it.

What about cyberscamming or cyberstealing?

Governments have not rushed to endorse it, although some merchants have.

China is going to endorse it as a currency. Does that give you comfort?

It apparently sells for something like $1250 or so, now. Did I hear "BUT, IT MAY GO UP THROUGH THE ROOF. I NEED TO OWN SOME"?

Still, some people will buy it as an "investment." In my opinion, Monopoly money is safer.

Next week: "The ETF Bubble" (with experts)

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I do have serious exclusive research, analysis and opinions on the Marketplace as: The Fiduciary Sale: In Search of the Ethical Advisor. Also see somebodyelsesmoney.com. Thanks.

Excerpt from:
Bitcoins - Are You Kidding Me? - Seeking Alpha

Bitcoin has now shown about eight weeks of consecutive buying, leading into new all-time highs (ATHs) for the past three weeks. Trying to stay objective with mild to extreme euphoria in times like this can be difficult. As someone who was a new trader during the 2013 bubble, the chart is beginning to look very similar.

Market capitalization and trading volume both on exchanges and over-the-counter markets have hit ATHs as well.

Despite being in price discovery mode, there is an established, longstanding trend we can compare the current price against, as well as the entire left side of the chart. Past results dont always predict the future, but they can influence it.

There are a few questions we can investigate:

Is the price near an interim top?

Is the price nearing parabolic conditions?

Will the price continue on the previous trend at the same rate?

Looking at the monthly Bitstamp chart, there have not been too many candles of this proportion. This would suggest we are nearing bubble-like conditions.

Price has also begun to close outside of the longstanding trend. This weekly candle has not closed yet, but if it does close outside of the diagonal, it will be the first weekly candle to do so. This again points to breaking the trend strongly to the upside.

Fibonacci retracement and extensions are admittedly partly magic voodoo, but there are plenty of traders who use and watch them to make the resistance and support levels legitimate. Drawing this Fibonacci from the local high established on March 10, 2017, to the low on January 14, 2015, several Fibonacci extensions emerge as well.

These can be seen as resistance levels, the next being the 1.618 at $2,088. Although the horizontal levels are arbitrary, we can confidently predict resistance based on the fit of the previous horizontals. Most of the prior Fibs match the price. This should be seen less as curve fitting and more as levels that just make sense. Based on the Fibonacci levels alone, there is not necessarily evidence for top or bubble just yet.

We can tease apart the trend even further by using the Fibonacci tool on each previous high and low.

In the trend, a consolidation from the previous high to low has yielded a price that has seen resistance at the 2.272 Fibonacci extension. Currently, the price has exceeded the previous 2.272 Fibonacci extension and shown it was supported based on the multiple candle touches. This suggests price is moving faster than the previous trend as well as closer to bubble-like conditions.

For low-timeframe, intra-day trading, there was a long entry signal when the price cleanly broke the consolidation triangle. On the next correction, pullback or consolidation event, Id expect the support diagonal (green) to remain the same.

Remember that splashy gold parity headline? BTC is now sitting several hundred dollars above it.

Summary

Bitcoin is making ATHs by almost every available metric: price, market capitalization, volume, hashrate, difficulty and fee per transaction.

Although $2,000 is the next milestone and resistance target, the price will likely exceed that level based on the strength and rate at which the price is exceeding current trends.

Watch for signs of a large pullback or correction in the near future, two to three months at the latest, based on previous price history.

Trading and investing in digital assets like bitcoin is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTCMedia related sites do not necessarily reflect the opinion of BTCMedia and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.

See the rest here:
Bitcoin Price Analysis: Nearing a Bubble...but We're Not There Yet - Bitcoin Magazine