Category Archives: Bitcoin

Initial public offeringsare yesterday's news. Who would want to buy a share of a company that's wildly unprofitableand whose days of racy growth may be behind it?

The alternative to the IPO?

The ICO

But there's now a geekier and greedier way to bet on a start-up: The ICO.

The Initial Coin Offering is the Bitcoin world's latest attempt to re-create Wall Street in its own image. Rather than exchanging dollars for shares, which usually come with a claim on profits and voting rights, an ICO sees the exchange of Bitcoin (or a rival like Ether) for an issuer's newly minted digital currency. That coin is somewhere between a currency and a stake in the business, asWired puts it, which can then be used to buy distributed computingpoweror labor hours.

Bitcoin's Investment Bankers

Recent initial coin offerings (ICO) as tracked by Smith + Crown

Source: Smith + Crown

The theory goes that if this business is a "Good Idea", its success will boost the value of its own tokens, enriching those who got in early at a discount. There's been the inevitable speculative rush, withICO buyers scrambling to flip their new coins at a premium on exchanges a few weeks later. This doesn't always work. There's also the potential for scams.

To a lot of people, this will sound less like a new threat to Wall Street and more like exchanging one set of magic beans for another. Bitcoin itself still feels "more virtual than real," the WSJ's Paul Vigna wrotelast week, as cautious regulators limit widespread investor acceptance and consumers shun a payment method that can slump 20 percent in a day.

The Risk-Reward Rollercoaster

Bitcoin's performance as tracked by an exchange-traded note in Sweden

Source: Bloomberg

That tells you something about the type of start-up willing to flog an even riskier token in return: Experimental, abstract and obsessed with all things decentralized and crypto-currency. It also tells you about the type of investor they're looking to attract: More than half of the $20 billion of Bitcoin in circulation are said to be owned by a small oligarchy spread across China and the hedge fund world, according to the Harvard Business Review.

This is not the kind of deep fundraising pool that's going to give Goldman Sachs a run for its money.

A Shallow Pool

The total market value of Bitcoin and Ethereum, the two biggest virtual currencies

Source: coinmarketcap.com

Where things get interesting is what this means for venture capitalists. Their job depends on taking big early-stage risks in return for juicy rewards when a company like Snap goes public. In terms of the money amassed, recent ICOs aren't far off an average Series B financing round, raising around $5 million to $15 million, according to research firm Smith + Crown.

And whereas a VC firm might end up owning 20 or 30 percent of a start-up in return for that money, an ICO might only mean one-time costs of less than $500,000, according to Stan Miroshnik, managing director of investment bank Argon Group. Free Bitcoin!

If the past is any guide, VCs will learn to co-opt this potential source of disruption in much the same way as Wall Street banks have funded, taken over and picked apart fintech rivals. One fund, Blockchain Capital, is adopting the ICO model itself to tap investors for $10 million alongside a traditional $50 million fund.

Trading tokens might also offer VC backers a nice option to cash out of an investment in a more convenient, liquid way than the sometimes trickier wait for the business to sell itself or go public.

If there is a silver lining in ICOs, it's unlikely to be its dream of rebuilding the financial world on open-source technology. It's more the hope that tech evangelists preaching digital disruption might have to face a bit of disruption themselves. And given the VC industry's role in hyping Bitcoin and Ethereum, that's probably fair.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

(A previous version of this story was updated to correct a typo in the headline.)

To contact the author of this story: Lionel Laurent in London at llaurent2@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net

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Want To Be a VC? Just Flip a Bitcoin - Bloomberg Gadfly - Bloomberg

Computer geeks packing away hard drives was never going to be quite as dramatic as sharp-suited bankers carrying boxes of their possessions and pieces of office art down Wall Street, but the collapse of the Bitcoin currency exchange Mt Gox in 2014 was widely seen as the alternative digital currencys Lehman Brothers moment.

The Tokyo-based exchange, which was handling 70pc of all Bitcoin transactions a year earlier, suspended trading and was eventually liquidated, with approximately $450mdisappearing. Earlier this month, Japan introduced legislation to protect users from being ever stung by a collapse again, while also making Bitcoin exchanges comply with anti-money laundering regulations and officially authorising it as a normal payment method.

In the UK, cryptocurrencies, as payment methods such as Bitcoin are known, still have a confusing legal status. But Japans move could act as a framework and catalyst for widespread adoption.

Dr Cathy Mulligan, co-director of Imperial College Londons Centre for Cryptocurrency Research and Engineering, who believes that insufficient regulation could be holding back startups and the growth of financial technology, rather than creating opportunities through lack of regulatory constraints, says: We have the situation in the UK where many startups are chasing the regulator to say, How are we going to be regulated? rather than the other way round.

Bitcoin in the UK is really treated as private money. If you tried to exchange Bitcoin for sterling you dont get charged VAT on the value of the Bitcoin but it is charged on, for example, the commission instead.

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Regulating Bitcoin: how new frameworks could be a catalyst for cryptocurrencies - Telegraph.co.uk

Here's a look at what we are focusing on in the bitcoin price this morning.

Here we go then, fresh out of the weekend and off on another weeks worth of trading in the bitcoin price, Things over the weekend were pretty good to us. After an initial run down towards the end of the week, and what looked as though it might be the start of some longer term fundamental weakness, the bitcoin price picked up its act a little as the weekend progressed, and we saw a nice turnaround.

What this says about action moving forward remains to be seen. Things arent quite as clear as they were a week or so ago. Theres no discernible trend (on the shorter timeframes, that is) and this makes it al little more difficult than normal to set up against a particular frame of risk management parameters.

Difficult, but far from impossible.

So long as we are able to outline some reasonable signal levels, then we should be ok. So, with this in mind, take a quick look at the chart below to get an idea of whats on this morning, and where we are looking to get in and out of the bitcoin price according to the rules of our intraday strategy. Its a fifteen minute (slightly wider than normal) candlestick chart, and its got our range overlaid in green.

As the chart shows, the range were looking at defined by support to the downside at 1202 and resistance to the upside at 1215.

If we see a close above resistance, well look at getting in long towards an immediate upside target of 1225. A stop at 1212 will define risk nicely. Looking short, a close below support will get us into a downside position towards 1190. A stop on this one somewhere in the region of 1206 will ensure that we are taken out of the position in the event that price reverses to trade against us.

Lets see how things play out.

Charts courtesy of SimpleFX

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Bitcoin Price Watch; Back On Top - newsBTC

Bitcoin gambling has taken off like a rocket in 2017 and one of the main reasons is because making deposits with this cryptocurrency is one of the most secure ways to make transactions online today. One of the main reasons is because it has the same security as major banks and government financial institutions while providing total anonymity at all times.

When you make bitcoin deposits, a unique key using an advanced encryption algorithm is generated. This algorithm scrambles the code which contains all of your account information to include deposits and makes this information unreadable. With this key, there is no way a third-party can track your payment information or make any possible attempt to steal your money.

If you are not already familiar with bitcoin and how to make a transaction, you will be happy to know that it is quite easy to set up. In order to start making a deposit, you must first set up an online bitcoin wallet to manage all of your deposits and other transactions. You can choose from a variety of different bitcoin wallet providers and they all come with different benefits.

After setting up your wallet, you will need to add funds to your account using your wallet provider. There are usually several ways to fund your bitcoin account whether you are using a bank transfer, credit card, PayPal, or various other forms of currency exchange. You can also buy bitcoins from other users who support the bitcoin community.

Once you have funded your bitcoin wallet, all you have to do is find a bitcoin casino that will accept the currency. For example, a highly trusted and top rated bitcoin casino site, Bitcoincasino.us, will accept only bitcoin through players who make a deposit by transferring their bitcoin from their wallet directly to the casino.

One of the biggest reasons more players choose bitcoin to make deposits over any other type of currency when gambling online is because there are little to no fees involved. It also eliminates the transaction being handled by a third-party processor which also provides more security since the money is being transferred directly from you to the casino. There is also no central controlling authority, unlike fiat currencies which are controlled by some type of government agency or regulatory body. In simple terms, bitcoin deposits allow your money to be transferred to online casinos in a peer-to-peer fashion without any interference or monitoring from a third-party.

Casino deposits are fast thanks to bitcoin. It takes just minutes to confirm each deposit transaction and some of them are done instantly in the blink of an eye. This allows players to have little to no distractions while playing and this was something that was a huge concern for online casino players in the past.

Many governments and jurisdictions view bitcoin as currency nonspecific. As a result, this is one of the few currencies that offer the possibility for players in locations, such as the US, to gamble on websites that would not be accessible using other forms of currency. This means that regardless of geographic location, a player can make a secure deposit from virtually anywhere.

When you visit reputable bitcoin casino sites like bitcoincasino.us, you will find that their transaction processing services are designed for speed. When you make a deposit at this bitcoin casino, you will instantly gain secure access to your deposit and begin playing games immediately. This trusted bitcoin site is an excellent example of how casinos use an aggressive business model to protect their players and always ensure that all deposits are secure and protected from any form of data theft.

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Depositing Is Secure With Bitcoin Gambling - newsBTC

Bitcoin users around the world are well aware of how governments will never see eye-to-eye when it comes to cryptocurrency. The Belgian Minister of Justice aims to make the use of bitcoin semi-illegal in the country by confiscating all of the coins in circulation. The plan is to draft a new legislative proposal that would apply to Belgium, and possibly the rest of the European Union as well.

For some unknown reason, politicians struggle with the concept of bitcoin and cryptocurrency. There is no way to confiscate coins unless the bitcoin wallet owner relinquishes control over their wallet. No one in their right mind will ever do so, as bitcoin is the only asset in the world that puts the owner in full control over their finances.

Koen Geens, the Belgian Minister of Justice, feels he can draft a legislative proposal to ensure people hand over the private keys to their bitcoin wallets. Moreover, he plans to expand the existing regulation related to cooperating with the justice system so it encompasses digital currencies as well. It seems evident this will incur some dire changes for all exchanges dealing with customers from Belgium in the future.

As one would come to expect, this decision is not entirely surprising. Koen Geens is one of those individuals who sees bitcoin as a tool that facilitates criminal behavior. While there may be some truth to that statement, there has never been overwhelming evidence to indicate bitcoin facilitates more crime than cash, wire transfer, or any of the legal anonymous payment tools in existence right now.

One thing that does need to be addressed, however, is the platforms who claim to offer bitcoins to investors. These Ponzi schemes- including the likes of Onecoin need to be weeded out sooner rather than later. Anyone using the concept of digital currencies in a criminal manner should be punished for their actions. It is expected Belgium may draft the first version of such a legislation, with the European Union taking a similar stance on this matter moving forward.

However, what is disconcerting is how the Belgian Minister of Justice plans to confiscate bitcoin. Right now, it is unclear if this can only happen in relation to a criminal investigation or just randomly. Moreover, drafting a new type of legislation to facilitate this type of behavior may not necessarily be the best course of action either. Until more clarity is provided, it is impossible to tell what will happen exactly.

In the end, it is good to see the Belgian politicians pay some attention to bitcoin, even if their message is coming out all skewed. Addressing the criminal aspect of bitcoin is a positive development, yet confiscating bitcoin in the traditional sense will not be as easy as people want it to be. For now, it will be interesting to see how this legal proposal will turn out in the end.

If you liked this article, follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin, cryptocurrency, and technology news.

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Belgian Minster of Justice Plans to Crack Down on Bitcoin Activity - The Merkle

With any new technology, you might wonder, if it can be trusted. Can people trust Bitcoins and new casinos? Here is the answer.

Online casinos, Bitcoin and websites are all inventions of the World Wide Web. None could exist without the Internet. Therefore, their initial trustworthiness is based on the Web.

Can you trust websites? Can you trust everyone? Do you leave you home door open? Do you lock your doors?

The World Wide Web is a reflection of the world around us. You will find good websites and bad websites. The same is true for online casinos. There are legitimate and fake online casinos. That is the cold, hard truth.

So far, much of the Internet remains unregulated, which includes online casinos. It is very difficult to regulate websites, because most people dont know where the servers are located. A Bitcoin Casino might be headquartered in one nation and have a server in another nation. That makes it difficult for governments to control.

Bitcoin has existed since 2008. Its security is based on its Blockchain, which stores every financial transaction ever made. There is no monopoly of Bitcoin by any man, organization or nation.

This decentralized structure is one of the best attributes of Bitcoin. Because no single entity controls it, Bitcoin is tough to control or manipulate. Others can check the Blockchain and reveal any tomfoolery.

Bitcoin uses the Provably Fair Trading concept to demonstrate the trustworthiness of online casinos. Of course, you want to ensure that the numbers, cards or results are random and not rigged. The Blockchain hash is added to gambling results and summarizes what took place before it.

A key feature of a hash is that it is unpredictable; it is random. Thus, if you can begin to predict the next number in a sequence, you can prove that something has been rigged.

A hash can also not be tampered with, due to its unique characteristics. Thus, the online casinos cannot falsify this important record.

Just at their are bad used car salesmen, there are bad casinos. It could be due to laziness, poor graphics, slow speeds or slow Bitcoin withdrawal. You should read customer reviews on gambling websites ahead-of-time.

If you keep seeing the same complaint, then that is a red flag. There are so many great Bitcoin Casinos, that you dont need to settle for a bad one.

Bitcoin is a digital currency. If you understand how it works, then you might feel comfortable using it. Did you know that Microsoft, Sears and Lamborghini have all started to take Bitcoins?

There was even a Bitcoin initial public offering (IPO). If shareholders trust Bitcoin, shouldnt you?

Bitcoin miners have invested millions of dollars in software and hardware. They understand that by mining Bitcoins, they can gain leverage. They know there is a market for digital currencies.

The Internet is not going away. Everyday, there are more eCommerce transactions and all of these can be improved with Bitcoin and other crypto currencies.

Be careful of which Bitcoin Casino, you trust. But if you find a good one, you can have some good, clean fun. You also might be able to earn some healthy profits. Bitcoin is one type of money that keeps rising in value.

Excerpt from:
Can People Trust Bitcoins and New Casinos? - NewsBTC - newsBTC

Isnt it absurd that nearly 326 million people representing 80% of the adult population in Africa do not have access to bank accounts? This wretched situation denies countless of people financial freedom in the so-called dark continent. Bureaucratic tenors and economic exclusion inter alia have paved the way for the current phenomenon.

Last year a study of 10 African nations with unusual inflationary ratio had South Sudan registering an unimaginable inflation rate of 295 percent. Egypt had the slightest with 12.30 percent. African governments continue to plunder the riches of the African people through Inflation. This makes it considerably insurmountable for individuals to conserve their resources.

Moreover, public sector borrowing has crowded out the efficient private sector that can put credit to good use. The IMF estimates that averagely credit to the private sector is estimated at 30 percent of GDP in Sub-Sahara Africa.

CCN spoke to Werner van Rooyen, Head of Business Development and Growth at Luno, the biggest Bitcoin exchange in Africa about how Bitcoin and cryptocurrencies are naturally poised to offer Africans financial inclusion.

CCN: Has Bitcoin anything to offer Africa?

Werner van Rooyen: Absolutely. There is a huge potential for Bitcoin in Africa. Many Africans could move straight to a cryptocurrency, like Bitcoin, or a bank of the future, such as Luno. Much of the existing financial infrastructure is inefficient: banks and branches are expensive, currency transfers can often be expensive and slow and most of the developing world is still unbanked.

There is the potential for Africans to leapfrog some of the existing financial services, in the same way, that many Africans skipped the part of owning a cumbersome and expensive land line and went straight to owning a mobile phone.

CCN: Most African currencies are reeking of inflation, does this make Bitcoin attractive as a store of value to Africans?

WvR: Bitcoin has proven to be the best-performing currency in the world in 2016. I believe more investors in high-inflation countries are looking at alternative asset classes, things like gold or Bitcoin.

Bitcoin has been found to be largely uncorrelated to other asset classes. With most asset classes, there is a correlation (or inverse correlation), like when a countrys stock market goes down, the currencys exchange rate usually also follows, same for the housing market. Bitcoin is largely uncorrelated, meaning it is becoming an attractive alternative to many investors.

CCN: What do you make of some African governments tagging Bitcoin as a tool for terrorism and money laundering?

I think this is mostly fueled by incorrect data, click-driven media hype and lack of understanding about Bitcoin. Firstly, I should say that the biggest facilitator of organised crime, including money laundering and terror financing, is cold hard cash.

Many other modern inventions, such as the Internet, Twitter, cars and cellphones, are currently being used to facilitate crime. It doesnt mean that we should shut these technological advances down (I doubt anyone is seriously proposing it), but rather that the good that comes with it outweighs the bad.

Lastly, there is very little proof that Bitcoin is currently being used for these nefarious purposes. Remember: Bitcoin is only pseudo-anonymous: all Bitcoin transactions ever conducted are recorded in the Blockchain.

Studies by the UK government looking into the best channels for laundering money has consistently found the risk of Bitcoin being used as very low.

CCN: Adoption in Africa is irritatingly slow. How do we push penetration?

WvR: Education and user experience. At Luno, were doing a lot to tackle this. Our aim is to make Luno the easiest place to buy, sell and learn about Bitcoin. Something which is no trivial task, but were seeing fantastic growth in Africa, especially for our mobile wallet. Weve also created a Learning Portal to help new people with some basic concepts about Bitcoin.

CCN: Do you think Africans will finally embrace Bitcoin?

WvR: I dont think they will, I think they already have! We are seeing fantastic adoption in places like South Africa and Nigeria and Im sure it will ripple to other African nations too.

CCN: What makes Bitcoin expensive in Africa than elsewhere?

WvR: Bitcoin is a very liquid instrument: its easy to move around the world. This, in theory, means that it can and will trade at roughly the same exchange rate, wherever it is available.

Obviously, there are many factors at play, but since the price is determined by supply and demand, it means that in some places where the demand is low, it may trade at a lower price (and vice versa).

Another issue is connectivity: to transact in Bitcoin, you need an Internet connection and ideally a smartphone. Many places are still underserved by the telcos, but this is changing fast. The price of smartphones is also continuously getting cheaper.

CCN: Could you paint a picture of the future of Bitcoin in Africa?

WvR: Its really too soon to tell, but what were seeing already today is really fantastic and I believe Bitcoin has a lot of potential in emerging markets in Africa and abroad.

Featured image from Shutterstock.

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Bitcoin in Africa: Insights from the Continent's Biggest Bitcoin Exchange - CryptoCoinsNews

In a surprising move, F2Pool, which has around 9% network hardware share, began signaling for segregated witnesses (segwit), a controversial proposal that aims to increase capacity while facilitating layer two protocols such as the Lightning Network and sidechains.

Unlike in litecoin, where the market rallied after F2Pool began signaling segwit, there was no price reaction in bitcoin, which may indicate the market doesnt think there has been any change as segwit still requires another 65% of miners.

Moreover, the signaling began after a somewhat peculiar series of events. Firstly, F2Pool started signaling segwit in litecoin, then surprisingly said he was re-considering, then Charlie Lee said F2pool will keep signaling, Wang Chun, F2Pools co-founder, confirmed, but further suggested he will keep signaling because I scare DDoS too much.

Thats just the starters or just the warm up if youre into exercising. Wang Chun then went on to say in a statement that could not possibly make his views any more clear:

Segwit will be a disaster. I am not going to support it on BTC because I am a bitcoin HODLER. Meanwhile, I do not have a single litecoin.

Youd rationally conclude thats that then, but it seems Wang Chun was still hungry and wanted some dessert which took the form of asking his followers a fairly peculiar question: Should miners stop signaling segwit by the end of current activation period and switch to UASF?

Miners cant quite signal for a UASF, otherwise known as a flag-day soft-fork. That is, after block X segwit is activated. In such scenario, miners either upgrade or dont upgrade. Plus, there is no difference between the two as far as miners are concerned because for miners all forks are hardforks.

Here comes the twist: As 56% from the poll in favor of segwit & agreed UASF is bad. Well respect ur opinion and implement segwit on both BTC & LTC soon. Thanks.

The poll didnt ask whether his followers are in favor of segwit or otherwise, but gave a choice between segwit or UASF which also implements segwit. So, between segwit or segwit, with the only real question asked being whether segwit should be activated at a threshold of 95% of miners or whether it should just be activated regardless of how many miners support it.

This, of course, just two days after he said segwit will be a disaster. Now, to make some rational sense of this isnt easy, but some suspect F2Pool isnt really neutral. They implemented full-rbf, for example, at the advice of Peter Todd, then backtracked after a huge backlash by users.

Theyve never really mined on any other client, but Bitcoin Core, except for that one time when they pretended to give their users a choice by making mining with Bitcoin Classic as difficult as possible which led to just one block in a week or so despite the pool at the time having some 25% network share.

On the other hand, it may well be the case that the decision is actually purely made to avoid any DDoS as Wang Chun says or implies. F2Pool is a classic pool, running no hash of its own, and is a fairly small operation, therefore may not have the resources other pools do.

In that case, it doesnt seem like a smart move to reveal DDoS-ing has so much effect on his pool. Nor does it sound like a good idea for miners to keep using F2Pool when their profits can so easily be affected by a DDoS either from competitors or segwit supporters.

Their hash has fallen to around 9% in the past four days, with segwit and Bitcoin Unlimited now very much neck and neck, both having around 36% network share. That suggests bitcoin is fully split.

As such, after two years, there is still no resolution in sight, while bitcoins fees reach all-time high, above $1, with users yesterday complaining about unconfirmed transactions.

Maybe some new proposal will be able to bridge the divide, but what well probably see is a repeat of the same old story. Firstly, nitpick every little thing in showing strong opposition, then smear the proposals name, then its devs, then whoever supports it, then DDoS.

This time, though, all of it is getting far too boring, like those Hollywood movies that keep repeating the same story-line.

Featured image from Shutterstock.

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F2Pool Starts Signaling for Segwit in Bitcoin - CryptoCoinsNews

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Bitcoin After Eight Years: More Virtual Than Real? - Wall Street Journal - Wall Street Journal (blog) (subscription)

Bets that the bitcoin price will fall have surpassed bets that it will rise for the first time since February on one of the worlds largest digital currency exchanges, stoking contrarian speculation that the digital currency could headed for a new all-time high.

Open short interest on Bitfinex surpassed long interest on Thursday for the first time since February. The last time shorts eclipsed longs, the bitcoin price gained nearly $300 over the following three weeks, rising from $993 on Feb 13 to an all-time high of $1,285.

Bitfinex, a top digital currency exchange by trading volume, is also one of only a handful to allow customers to trade on margin.

In financial markets, short interest is sometimes viewed as a contrarian indicator because it leaves assets vulnerable to whats known as a short squeeze. In a short squeeze, investors who bet against the asset are forced to buy it back to close out their positions at a loss, causing the price to move sharply in the other direction.

The buildup in shorts proves that the bitcoin scaling debate isnt over yet, said Chris Dannen, a founding partner at Iterative Instinct, a small New York-based private-equity fund that trades crypto-assets.

Dannen was referring to a rift in the bitcoin community over how to upgrade bitcoins software to allow the network to process transactions more quickly and efficiently.

That debate has quieted down in recent weeks as bitcoin miners have backed away from a controversial proposal called bitcoin unlimited that wouldve raised the limit on how much transaction data can be stored in each block of the bitcoin blockchain.

Investors feared that, if support for the proposal passed a certain threshold, but fell short of unanimous adoption, it could split the network into two different coins.

Amith Nirgunarthy, director of marketing and high net-worth partnerships at Bitcoin IRA, was reluctant to read too much into the shift in positioning.

Theres been a lot of good news in the cryptocurrency space as of late, he said.

Earlier this week, Blockchain Capital, a venture fund focused on blockchain initiatives, closed its $10 million initial coin offeringthe first of its kind in the U.S.after just six hours.

A blockchain is a decentralized, cryptographically secured ledger that powers digital currencies like bitcoin.

The bitcoin BTCUSD, +0.43% price retreated on Thursday after touching its highest level in three weeks. One coin was recently trading at $1,165.

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Bitcoin bears ramp up bets virtual currency will fall - MarketWatch