Category Archives: Bitcoin

Bitcoin (BTC) began testing new support levels on Monday after an overnight rally paused at $52,000.

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD challenging $51,000 after breaking through the level for the first time in nearly four months.

In so doing, the largest cryptocurrency was likely testing the staying power of support, which had acted as resistance throughout the summer.

Strong weekly close for BTC, trader and analyst Rekt Capital commented on the one-week chart.

At the time of writing, BTC/USD was still above $51,000, preserving the level to hover in a range just below its local highs.

Cointelegraph contributing analyst Michal van de Poppe, meanwhile, highlighted a wider selection of support levels for Bitcoin to hold in order to preserve its momentum.

$47,000 remains to be the last low, so that is the one that you should be staying above if you want to avoid any breakdown, but we do see that we break about $50,000, so the previous resistance here is the level that you want to sustain, he said as part of comments in his latest YouTube update.

He added that should Bitcoin break into a range above Mondays highs, it could stay between there and Aprils all-time highs for weeks or even months.

Altcoins, meanwhile, offered a mixed bag in the face of Bitcoins consolidation, with Ether (ETH) and Cardano (ADA) both flat over the past 24 hours.

Related:BTC becomes legal tender in El Salvador: 5 things to watch in Bitcoin this week

The top 10 cryptocurrencies by market capitalization were led by XRP at the time of writing, XRP/USD gaining 6.25% on the day.

As long as $50,000 stays, the altcoins will start breaking out heavily as well, van de Poppe forecast.

An existing high flyer, FTX Token (FTT), preserved 15% returns and the newly claimed $70 level.

Continued here:
Bitcoin preserves $51K Here are the BTC price levels to watch - Cointelegraph

Major crypto tokens are trading at their highest level since May. Bitcoin was changing hands at more than $50,000 on Sept. 4, an increase of 20% from a month ago, according to CoinDesk data. Ethereum has risen around 40% to more than $3,900 during that span.

The hard part is explaining why prices are so high. Crypto assets tend to be highly volatile, with prices that pingpong around on the latest speculation. Here are some developments that may have given the popular digital tokens a recent boost.

Facebook executive David Marcus told Bloomberg in late August that the social network could provide support for non-fungible tokens on its digital wallet, known as Novi. (Facebook is also developing its own crypto asset, known as Diem.) NFTs are kind of a digital version of one-of-a-kind artworks or trading cards typically built on the ethereum blockchain. If Facebook helps make NFTs more popular, that could drive up demand for ether, which is used to pay for computations on the ethereum network. Visa also says its exploring NFTs.

The Central American nation will become the first country in the world to make the original crypto asset a national currency (alongside the US dollar). Some think this will spur further bitcoin adoption. The International Monetary Fund, on the other hand, thinks this type of thing could destabilize the economy and expose the government and regular citizens to additional exchange-rate risk.

Crypto miners, who power fleets of energy-intensive computers to process bitcoin transactions, are powering back up after getting banned in China. As the backbone for crypto computing capacity rebounds and is redistributed around the world, from Texas to Kazakhstan, some may see this as a sign of robustness for bitcoin and the broader world of digital assets.

Sometimes it seems likebitcoin is worth whatever Tesla founder Elon Musk says it is. Crypto hit the skids in May when Musk said the electric car company would stop accepting bitcoin as payment until it is produced using more sustainable sources of energy. Lately hes made nice noises about crypto, though, and he pointed out on Twitter that he owns bitcoin and some other digital assets and would like for them to flourish.

Not all the news is necessarily bullish. An item for the bears includes:

Gary Gensler told the Financial Times that crypto executives have to heed regulations if they want to be around in the coming years. He also suggested that so-called DeFi, or decentralized finance based on software that allows users to transact directly with each other, is still rather centralized, and perhaps not that different from the peer-to-peer platforms that sprung up years go. Last month, the SEC brought charges against two men who sold $30 million of securities using DeFi technology.

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Why crypto prices on bitcoin, ether have been climbing higher - Quartz

The crash in bitcoin and other cryptocurrencies Tuesday was a stark reminder of the dangers of overconfidence.

As podcasts, blogs and videos were filled with cant-miss predictions of bitcoin BTCUSD, -1.21% imminently hitting $100,000 or even $1 million, traders took on tremendous amounts of leverage to buy, buy, buy, convinced they could pick the next big winner.

When the crash came, some investors got wiped out, their heavily leveraged portfolios unable to bear a downswing that had seemed unimaginable days earlier.

Overconfidence is endemic to financial markets. Overconfident investors trade more frequently, and the more they trade, the more they underperform the market. They are also more likely to commit common investment errors such as under-diversification and overconcentration on familiar stocks, and investor overconfidence is often a contributing factor to market bubbles and crashes, like the 2008 financial crisis.

While there is a lot of academic research documenting overconfidence, pinpointing which types of investors are more overconfident (men, young people), and exploring the devastating consequences overconfidence can have on individuals and society, much less attention has been paid to why it is so prevalent.

In one sense, it is surprising that investors tend to be overconfident, because trading provides so much feedback and opportunity for learning. If traders are not consistently beating the market, how and why do they maintain the belief that they will do so in the future?

Overconfidence is usually explained by appealing to information-processing errors such as confirmation bias. For instance, a trader might take credit for a winning trade but blame bad luck for a losing trade to maintain the belief in his or her trading prowess.

In new research published in the Proceedings of the National Academy of Sciences (PNAS), we highlight a different explanation: biased memory for past performance.

The link between traders faulty memories and overconfidence has been suspected for some time. Erik Davidson, a former chief investment officer at Wells Fargo, once said: Much like our human predisposition toward nostalgia about the past, where we only remember the good times and gloss over the bad, investors likewise tend to take a nostalgic view of their past winners but forget about their past losing investments.

It turns out he was right, and our work is the first to scientifically document this phenomenon.

In our research we asked investors to recall the performance of their most consequential trades both winners and losers over some time horizon, such as the past year. An investor might tell us that they bought and sold 100 shares of Apple for a 75% return, for instance.

Next, we asked them a series of questions to figure out their level of overconfidence and how frequently they trade. Overconfident investors were sure they would beat the market by a huge margin going forward and were likely to report making very frequent trades. Finally, we asked them to access their financial statements and tell us the true performance of those most impactful trades.

We then compared the figures they reported from memory and the true figures from their financial statements. We found two kinds of memory biases which we call distortion and selective forgetting. Distortion means that peoples reported returns from memory were positively biased on average. Winners were remembered as having a more positive return than reality, and losers as having a less negative return. Selective forgetting means that people were more likely to remember winners than losers.

Critically, we also found that participants with larger memory biases were more overconfident and traded more frequently. This result suggests that biased memory likely contributes to overconfidence. It also may explain why investors can maintain an inflated sense of their own abilities even in the face of evidence to the contrary: Their self-image is determined more by warped memory than actual results.

Our research also identified a possible remedy, a simple intervention that mitigates memory bias and thereby reduces overconfidence. In this study, half the investors simply looked up their actual returns at the beginning of the experiment instead of toward the end, providing no opportunity for biased memory.

We assessed participants overconfidence and gave some of them an opportunity to take part in a trading experiment with $500 to invest. They were asked to pre-commit to how many trades they planned to make in the experiment and had to pay $10 for each trade.

Participants who looked at their returns first were less overconfident and spent less of their $500 stake to pre-buy trades, indicating that they planned to trade less frequently. So just looking at past performance before making decisions appears to reduce overconfidence, though it didnt eliminate it completely.

This finding suggests that brokerages could mitigate overconfidence by making trading history and relevant comparisons more easily accessible when their customers are making trading decisions. They could, for instance, provide a data dashboard showing how past trading decisions have played out relative to some reasonable benchmarks like a buy and hold strategy or the performance of common indices like the S&P 500 SPX, -0.04% or Nasdaq 100 NDX, -0.23%.

In the past, many brokerages may have been disincentivized to do this because they made significant income from trading fees. With the proliferation of low- or no-fee trading atbrokers including Robinhood HOOD, -2.28% and TD Ameritrade , data provision like this is likely to be mutually beneficial to brokers and traders alike.

Its common for our view of the past to be overly rosy. For instance, memory distortion was found among college students who remembered their high school grades as being higher than they achieved in reality and among patients who recalled their cholesterol scores and cardiovascular risk categories as more favorable than shown on a recently viewed test.

Those effects are typically attributed to peoples desire to maintain a positive self-image, which, of course, is important. But the ego-boosting benefits of biased memory about investing performance carry a significant cost, and most investors weve spoken with would rather have accurate beliefs and better returns.

The implications are clear: Dont trust your memory. If you do so, you are likely to have an inflated sense of your own abilities, and this bias can lead to big mistakes, such as taking on too much leverage and failing to sufficiently diversify.

We recommend keeping track of past investing performance and studying your record on occasion, especially before making a big bet. You will be in a better position to protect and grow your wealth if you have an accurate view of your own abilities.

Nostalgia has its place, but it shouldnt determine how you manage your investments.

Philip Fernbach is a professor of marketing and the director of the Center for Research on Consumer Financial Decision Making at the University of Colorado. He is co-author of The Knowledge Illusion: Why We Never Think Alone. Daniel Walters is a professor of marketing and the director of the Marketing Insights Lab at INSEAD.

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If you lost money on bitcoin or other cryptos today, it might be because you can't trust your memory, according to new research - MarketWatch

Bitcoin enthusiasts, miners, and oil & gas execs gathered at a meetup in Houston to talk about the future of bitcoin mining.

HOUSTON On a residential back street of Houston, in a 150,000 square-foot warehouse safeguarding high-end vintage cars, 200 oil and gas execs and bitcoin miners mingled, drank beer, and talked shop on a recent Wednesday night in August.

These two groups of people may seem as though they are at opposite ends of the professional and social spectrums, but their worlds are colliding fast. As it turns out, the industries make for compatible bedfellows.

Just take Hayden Griffin Haby III, an oilman turned bitcoiner. The Texas native and father of three has spent 14 years in oil and gas, and he epitomizes what this monthly meetup is all about.

Haby started as a surface landman where he brokered land contracts, and later, ran his own oil company. But for the last nine months, he's exclusively been in the business of mining bitcoin.

As Haby describes it, he was "orange pilled" in November 2020 a term used to describe the process of convincing a fiat-minded person that they are missing out by not investing in bitcoin. A month later, he co-founded Limpia Creek Technologies, which powers bitcoin mining rigs with flared, vented, and stranded natural gas assets.

"When I heard that you could make this much money per MCF (a metric used to measure natural gas), instead of just burning it up into the atmosphere, thanks to the whole 'bitcoin mining thing,' I couldn't look away," Haby said. "You can't unsee that."

When China kicked out all its crypto miners this spring an exodus which Haby calls the "Chexit" that poured kerosene on the flames. "This is an opportunity we didn't think was coming," he said.

Haby tells CNBC they are already seeing demand rushing to Texas, and he is convinced that the state is poised to capture most of the Chinese hashrate looking for a new home on friendlier shores.

Bitcoin miners care most about finding cheap sources of electricity, so Texas with its crypto-friendly politicians, deregulated power grid, and crucially, abundance of inexpensive power sources is a virtually perfect fit. The union becomes even more harmonious when miners connect their rigs to otherwise stranded energy, like natural gas going to waste on oil fields across Texas.

"This is Texas, boys. We got what you need, so come on down," said Haby. "We are sitting on the energy capital of the world."

"I think Kevin Costner said it best: 'If you build it, they will come,'" said Haby.

An underground meetup of bitcoin miners and oil & gas execs was held at a 150,000 square-foot warehouse safeguarding high-end vintage cars.

Parker Lewis is one of Texas' de facto bitcoin ambassadors. Everyone knows him. Everyone likes him. And virtually any bitcoiner you ask refers to him as the future mayor of Austin.

Lewis is an executive at Unchained Capital, a bitcoin-native financial services firm. He isn't in politics yet but he is hustling across the state of Texas to spread the good word on the world's biggest cryptocurrency. In May, the Houston Bitcoin Meetup consisted of only 20 people in a fluorescent-lit conference room in an office. Then Lewis decided to get involved.

"I just knew Houston would be prime to explode because of the energy connection to mining if we organized a good meetup," Lewis told CNBC. "It's also key to Texas being the bitcoin capital of the world."

His efforts are paying off. Wednesday's meetup drew more than 200 attendees from across the state of Texas, as well as California, Colorado, Louisiana, Pennsylvania, New York, Australia and the UK.

The buzz was electric on Wednesday night. You had to shout to be heard. And no one in the room mentioned any cryptocurrency beside bitcoin. There was also an unmistakable air of stealth and FOMO. The people who showed up to this event did so, at least in part, because they didn't want to get left behind.

Capturing excess and otherwise wasted natural gas from drilling sites and then using that energy to mine bitcoin is still firmly in the category of avant-garde tech.

Haby, who's affable and an open book on most things, clams up when it comes to sharing the location of his company's mining sites. "West Texas" is as much as Haby would give CNBC, though if the name "Limpia Creek" is any indication, that would place them 100 miles due north of Big Bend National Park.

His secrecy was par for the course that evening.

Oilmen, turned bitcoin miners, Griffin Haby with Conner Murphree and Jordan Kuntz at one of their bitcoin mining sites in Texas.

Bitcoin miner Alejandro de la Torre was born in Spain, but he's spent years minting bitcoin all over the world, most recently in China. When Beijing cracked down on all things crypto, De La Torre got a call from his boss at 3 A.M. telling him he had to go to Texas. He was in Austin the next day.

Since then, he's been shipping his new-generation mining gear to the U.S. in bulk.

"It's all through ships and from the Pacific side," De La Torre told CNBC. "The port depends on the location of where the rigs will end up."

That was as much as De La Torre would divulge, because, as he explains it, any further details about the destination, or the gear itself, could give his competitors an edge.

Bitcoin believers care a lot about privacy, as do the oil and gas guys. Some cited non-disclosure agreements as a reason to speak to CNBC in vague platitudes about business deals. Others were only willing to share their thoughts on the condition of anonymity. And some attendees worried about their job security should their employer find out they were there.

These weren't tycoons -- they were mostly up-and-coming young execs, hungry to get ahead and make a name by taking a gamble on bitcoin mining.

For years, oil and gas companies have struggled with the problem of what to do when they accidentally hit a natural gas formation while drilling for oil. Whereas oil can easily be trucked out to a remote destination, gas delivery requires a pipeline.

If a drilling site is right next door to a pipeline, they chuck the gas in and take whatever cash the buyer on the other end is willing to pay that day. "There's no choice. There's no middle finger. Whatever gas comes out that day has to be sold," explained Haby.

But if it's 20 miles from a pipeline, things start to get more complicated.

More often than not, the gas well won't be big enough to warrant the time and expense of building an entirely new pipeline. If a driller can't immediately find a way to sell the stash of natural gas, most look to dispose of it on site.

One method is to vent it, which releases methane directly into the air a poor choice for the environment, as its greenhouse effects are shown to be much stronger than carbon dioxide.A more environmentally friendly option is to flare it, which means actually lighting the gas on fire.

"Chemistry is amazing," explained Adam Ortolf, who heads up business development in the U.S. for Upstream Data, a company that manufactures and supplies portable mining solutions for oil and gas facilities.

"When CH4, or methane, combusts, the only exhaust is CO2 and H2O vapor. That's literally the same thing that comes out of my mouth when I exhale," continued Ortolf.

But Ortolf points out, flares are only 75 to 90% efficient. "Even with a flare, some of the methane is being vented without being combusted," he said.

This is when on-site bitcoin mining can prove to be especially impactful.

When the methane is run into an engine or generator, 100% of the methane is combusted and none of it leaks or vents into the air, according to Ortolf.

"But nobody will run it through a generator unless they can make money, because generators cost money to acquire and maintain," he said. "So unless it's economically sustainable, producers won't internally combust the gas."

A panel of bitcoin miners and oil & gas execs share what it's like to mine bitcoin in Texas.

Bitcoin makes it economically sustainable for oil and gas companies to combust their methane rather than externally combust it with a flare.

"There is no such thing as stranded gas anymore," said Haby.

But Ortolf has taken years to convince people that parking a trailer full of ASICs on an oil and gas field is a smart and financially sound idea.

"In 2018, I got laughed out of the room when I talked about mining bitcoin on flared gas," said Ortolf. "The concept of bringing hydrocarbons to market without a counterparty was laughable."

Fast forward three years, and business at Upstream, a company founded by lead engineer Steve Barbour, is booming. It now works with 140 bitcoin mines across North America.

"This is the best gift the oil and gas industry could've gotten," said Ortolf. "They were leaving a lot of hydrocarbons on the table, but now, they're no longer limited by geography to sell energy."

It is also helping to curtail the overall carbon footprint of some of these oil and gas sites. Recent production stats show that in the U.S. alone about 1.5 billion cubic feet of natural gas is wasted on a daily basis. And these are just the reported numbers, so the actual figures are likely higher.

Meanwhile, bitcoin miners get what they want most: cheap electricity.

The thing about all these grand visions for bitcoin mining to stay the course, it requires some manpower on Capitol Hill to safeguard its plan to scale.And right now, politicians in Washington are scrambling to figure out what and how to regulate cryptocurrencies and all the ancillary services that make up the wider ecosystem for digital currencies.

That's why another big topic of conversation at the Houston Bitcoin Meeting was political activism.

"Who knows a staffer or a representative?" one member of the crowd posed to the group. At least half a dozen people raised their hands and one stepped up to confirm they would reach out to their contact in Senator Cruz's office.

There was a sense of momentum in the audience.Several people made the point that the bitcoin contingent across the country had paralyzed a $1 trillion rubber-stamped, bipartisan bill, no small feat for a voting bloc which hitherto hadn't been viewed as much of a threat on the Hill.

But it's not just about being on the defensive for these tens of millions of voters and bitcoin faithful.They're going on the offensive by working to install like-minded people into office so that they can do something "before they do it to us," as one member of the audience said to the group.They're also teaching veteran lawmakers about bitcoin, as many representatives don't understand it.

"We need to target anyone who is anti-bitcoin. There are 45 million of us in America, and we are not silent," said this same attendee.

Excerpt from:
Bitcoin miners and oil and gas execs mingled at a secretive meetup in Houston here's what they talked about - CNBC

Saifedean Ammous and Peter St. Onge, in my opinion, are the thought leaders on the macroeconomic effects of adopting a bitcoin standard. The Austrian school of economics tends to shy away from making specific predictions and rather focuses on theory and grand outcomes. Mainstream fiat economists, who do tend to make these predictions which are consistently inaccurate dont understand bitcoin or its value proposition and thus only produce cringe-inducing views such as this.

This leaves a gleaming gap of confusion and uncertainty about what will happen as the world transitions from using fiat currency to adopting bitcoin.

This article will try to fill in that gap, to sketch a picture for the reader of what is possible and what is probable for our economic future on Earth.

I am not of the opinion that there is a major depression looming or that the world economy will at some point collapse, but I rather envision a long period of transition, or realignment. There already exists a parallel economy of people living and transacting only in bitcoin. This bitcoin economy will grow while the fiat economy will gradually become smaller as time passes and people transition.

Bitcoin adoption will be brought about not by the public choosing to pay with bitcoin, but rather by producers and sellers preferring to be paid in bitcoin and thus incentivising customers to use it. Expect to see discounts for paying in bitcoin and sellers accepting only bitcoin.

This is not to say that there will not be turmoil. The fiat system has injected (2008) and re-injected (2020) the world economy with cheap money, causing malinvestment. At some point, there will be a large correction, or corrections a market crash.. When this will happen is impossible to predict. According to Austrian Business Cycle Theory, the longer it takes for the correction to occur, the more capital is malinvested and the more drastic the correction will be.

This will not draw a large part of the economy into bitcoin immediately. The BTC price might even initially fall as everyone panic sells everything. Central banks and governments will not simply roll over and submit defeat. There will be more money printing, stricter laws and higher tax rates, etc.

Hyperinflation will occur in some areas, but remember that bitcoin is right there to be used as a medium of exchange, store of value and unit of account. Weimar Germany and Zimbabwe did not have this luxury. They had to go back to a barter system and this is what decimated their economy as everything came to a standstill. Venezuela appears to be slowly getting into bitcoin and things there seem to have gone better than originally anticipated. They also didnt have a functioning bitcoin Lightning Network, which we already have today.

Some jurisdictions will choose to ban, outlaw, or heavily tax bitcoin, making it harder but not impossible for people in such a jurisdiction to transact in it. Productive people will slowly move from those areas to the areas that freely accept or embrace bitcoin, and these areas will flourish. Eventually, the areas who chose to go against bitcoin adoption will either have to start accepting it, or be turned into an unproductive wasteland as they are outperformed by the rest of the world. Imagine a region such as the U.S.S.R. eventually having to submit to a form of capitalism.

As has been happening for the last 10 years, whoever chooses to adopt the bitcoin standard earlier, will be wealthier compared to later adopters. This will become more evident as time passes. There will be individuals and institutions who refuse adoption for decades, eventually living in non-bitcoin enclaves.

The transfer of wealth will be significant, but probably not as spectacular as many bitcoin maximalists imagine. Real wealth is kept in assets, such as property, machinery, knowledge, goods, resources. Bitcoin adoption will not destroy this wealth; the prices of these will simply be denominated in bitcoin instead of fiat. This includes stocks.

Companies and industries that produce real-world value will flourish, such as The mining, manufacturing, technology, distribution, retail, etc, industries. Their share prices will take a hit when the correction(s) happen, but this has nothing to do with bitcoin. At this stage markets are overvalued when compared to historical data, and prices should readjust in the future.

One sector that will go through a massive transformation is banking. It is worth taking a closer look at what could happen in this space under a Bbitcoin standard.

It would be fair to argue that banking will be reduced to what it was under the gold standard. Banking is simply a dignified form of money lending, the banker having the advantage that the money which he lends is not his own but other peoples. It has been deposited with him for the sake of interest that he pays on it. The bankers business is to lend this money out again at higher rates of interest than he pays for it, pocketing the difference as a reward.

Banks perform an important and significant role in society. It is through their agency that capital is transferred from those who cannot or will not employ it in industry, to those who can. In this way, a banker increases not the total amount of capital in existence, but the total amount available for production. This is an important service for which the bank deserves to be paid.

Under a bitcoin standard, the income and value of banks will be largely reduced to whatever the market will be willing to pay for the above-mentioned service. Note that under the gold standard, the public paid a fee to the bank for the safekeeping of their capital. Because it is safer for an individual to secure her bitcoin herself rather than entrust it to a third party, banks or whoever will perform the capital distribution function will have to incentivise depositors in order to obtain their bitcoin deposits.

Who knows what novel capital distribution methods the free market will come up with when innovators are allowed to innovate in this space?

Whatever happens, in the long run, banking stocks will inevitably lose value in real terms as the space they are practising in with their regulation-laden oligarchies becomes smaller. Some banks may innovate and thrive the free market might even allow for some form of fractional reserve bitcoin banking if the risk appetite exists. But under the bitcoin standard, there will not be free money being handed out to the connected few.

Disclosure: I adhere to the Misesian view which follows that inflation is the increase in total money supply in the economy. Deflation would be the decrease in money supply. If the total money supply in an economy is suddenly reduced from previous levels, I wholly agree that this could and probably always will have devastating effects. This phenomenon should not be confused with a monetary units increase in value when compared to economic goods, which is also termed deflation, but will have many positive effects on the economy and on society.

Lets assume for a second it is the year 2035 and bitcoin is the worlds most widely-used currency. What could we expect inflation and interest rates to be?

Total value or market cap of bitcoin: I have zero doubt that BTC will eventually reach $10 million per coin. The problem is that at that stage a coffee might cost $5000, as the value of the U.S. dollar would be close to zero in todays terms. Thus, calculating the value of bitcoin in terms of future U.S. dollar prices is a futile exercise. Yes, when measured in U.S. dollars, bitcoins potential value really is /21m.

Predicting what the purchasing power of bitcoin against goods and services would be, and expressing that as a number in terms of U.S. dollar value today, is a far more complex and debatable topic,on which you will break your brain many times over trying to solve. I will attempt to discuss this in a future article.

Once the price of bitcoin stabilizes and is widely used as the worlds premier unit of account, a period of semi-permanent deflation (in bitcoin terms) will set in. That is, the value of your currency will appreciate when compared to goods and services. This will happen not because the total amount of currency is reduced but because the total amount of purchasable goods will increase compared to the total amount of currency in existence, and also because of technological advances that will cause goods to become more affordable. It is important to note that this is and was the natural state of the world, before governments and banks started to f*ck with your money.

Interest rates will be determined by the free market. Whatever rate a lender and borrower agree upon will be the rate paid.

Interest rates can be viewed as the cost of capital. On the free market, this has historically been between 3% and 6% per year. How does this all fit in with the deflation though? Lets assume an entrepreneur in the future wants to borrow bitcoin for a new project. He will find a willing lender probably through DeFi or some form of a bank and borrow the bitcoin at an agreed-upon interest rate. Lets say its 4%. If the entrepreneur expects that deflation will take place during the period of the loan, he will simply add the expected deflation to his cost of capital calculation.

Interest rate: 4%

Expected Deflation: 2%

Total cost of capital per annum: 6%

This will not decentivise the economy from growing or entrepreneurs from borrowing. Under the fiat standard, we have seen interest rates go up to 15% or much higher in some places, even when deducting the rate of inflation.

What will be drastically reduced is the fee that the middle man takes for arranging the loan, as discussed before. This is what we know today as the difference between the repo and prime rates. On a free market, whoever offers the lowest fee for arranging the transaction will outcompete the others, and with modern technology, this fee should be negligible.

Under a bitcoin standard and with modern innovation, the distribution of capital would be much more efficient, as someone in Africa for example, would be able to borrow from someone in Europe or the U.S.A. at the same rate as others. This will cause world-wide competition for capital and whoever is most efficient in allocating that capital will thrive.

This brings me to what I consider the single most beneficial aspect which a bitcoin standard brings to the world. Enabling free trade between those who choose to use it. The very fact that two parties choose to trade with each other willingly, implies that both parties benefit from the transaction. The more such trade happens, the better off everyone involved is. Being able to easily, instantly and cheaply pay anyone around the globe will enable more trade to take place, especially on the ground level for people who were previously unbanked.

I hope that reading this has opened your mind to the possibility of a prosperous and peaceful transition to the bitcoin standard. In the long run, the natural laws of society and economics will play out. What works and what does not work for society will become more and more evident.

May the best currency win.

This is a guest post by Handre van Heerden. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.

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Bitcoin: The Future Of Money And The World Economy - Bitcoin Magazine

Just as the Apple brand is to tech, McDonalds is to burgers, Nike is to sneakers and Coke is to cola, so is the Bitcoin brand to cryptocurrency.

Whoa hold the phone! you say. Bitcoin isnt a brand. It's a currency. Currencies arent brands!

Well, thats a traditional way of looking at it. And Bitcoin is anything but traditional.

Think of it this way: blockchain is a technology. Coins are an asset on the blockchain. Bitcoin is a brand that brings its unique selling proposition to blockchain.

To be clear, Bitcoin is not an ordinary brand. Its what I call a User-Generated Brand (UGB). Because Bitcoin lacks a centralized brand owner or chief marketing officer, it is molded by a large ecosystem of foundation members, technologists, investors, miners, commentators, thought leaders, innovators, journalists and more. Nevertheless, as a UGB, the cumulative effect of its brand assets stand for something.

Still skeptical? Consider this:

Moreover, what makes the Bitcoin brand so intriguing are some other less cut-and-dry factors:

Okay, so youre onboard: Bitcoin is a brand. A User-Generated Brand. Next question you may be asking is: so what? Consider these:

The Contract A great brand, at the end of the day, is a promise (a contract) that the sum total of it what it stands for and how it behaves will provide confidence and comfort that if you put your faith in it (by purchasing, investing, advocating, etc.), youll be rewarded. For all the reasons stated above, Bitcoin is in an enviable pole position, particularly as it relates to wooing institutional investors and their allocation committees who, once fully bought in, would represent a true tipping point in the race to bitcoin adoption. To propel this forward, as a UGB, it is incumbent on the communitys most vocal believers to not just talk amongst themselves (as they are apt to do) but to the masses in ways that will elucidate that promise to them.

The Community A great brand feeds off the passion of its most active users. In fact, passion is the fuel that ignites any brands fire. So while Bitcoin, as a UGB, may not have a chief marketing officer, it does have an army of de facto marketing officers (many of whom read this magazine). Collectively, they believe that Bitcoin and its underlying technology is a true force for good in democratizing finance and have many forums for sharing that point of view. For them, its important to spread the word: Bitcoins primary purpose is not about making money, its about making a change. And, as with any movement, the rubber meets the road when its story can be told in calm and simple terms, using analogies that everyone understands.

The Coattails Versus The Contrarian Project founders, foundations and decentralized autonomous organizations of every size and shape have a decision to make: regardless of their technical or functional relationship, do they ride Bitcoins coattails or cast it off as a fine but flawed product that is ripe for disruption? It will vary from case to case for sure, but contrarians should be forewarned: brands with the community, contract, passion and purpose that Bitcoin has are formidable. While a small group of insurgents may rejoice at the thought of dethroning the king, most of these contrarians efforts will be rejected entirely by the Bitcoin community, as proven by previous hard forks.

The Conventional Wisdom Dominant brands are typically expected to act in conventional ways. In fact, it can be argued, it is the shackles of category conventions that box them in, allowing challengers to erode or overtake their position. So is Bitcoin a conventional player in an unconventional category? Hardly. Conventional behaviors come with time and a sense of dominance that is considered an impenetrable moat. This leads to a risk-averse, defensive posture and possible stagnation. But Bitcoin is still in its infancy and is at the center of a tsunami of innovation. To the UGB community that is pushing boundaries and challenging the status quo I say, Rock on!

To summarize: to some, the very thought of traditional, centralized marketing in the Bitcoin space is antithetical to the category. As with any radical change in conventions and norms, this is to be understood. But, even as a User-Generated Brand, the marketing of Bitcoin most certainly is influential in ways that will certainly evolve over time. As advertising veteran Regis McKenna famously said, marketing is everything, and everything is marketing.

Today, while metrics such as Reddit subscribers, social comments per hour, Twitter followers, website traffic and community size dominate the discussion of brand health (and are closely watched by investors), there will certainly be other, perhaps more influential metrics, as the roles, bullhorns and motivations of key voices decentralized and centralized in the ecosystem evolve.

As it does, you can be sure that Bitcoin will be at the forefront of this evolution. Because if it looks like a brand, acts like a brand and works like a brand, then it is a brand. That its a UGB simply means that you cant expect the same rules that governed branding and marketing over the past 25 years to hold.

This is a guest post by Rich Feldman. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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Yes, Bitcoin Is A Brand. Heres What That Means. - Bitcoin Magazine

Fourteen suspects allegedly behind a cryptocurrency scam have been arrested in Taiwan. According to the countrys Criminal Investigation Bureau, the scheme has defrauded investors out of millions of dollars.

The countrys Criminal Investigation Bureau (CIB) explained that the crypto scam allegedly defrauded more than 100 people out of about NT$150 million (US$5.41 million) over the past year. The suspects now face charges of fraud, money laundering, and breaches of the countrys Organized Crime Prevention Act, the Taipei Times reported Sunday.

Kuo Yu-chih, the CIB investigator in charge of the case, explained that a businessman with the last name Chen is believed to be the mastermind behind the fraudulent crypto scheme. He added that the scheme focused on cryptocurrencies ethereum, tronix, and tether. Chen also led the Taipei-based Azure Crypto Co., which offered cryptocurrency and other investment services.

The investigator detailed that Chen promoted crypto investments on social media, promising high earnings. He elaborated:

Chen and his staff set up websites and allegedly used photographs of pretty women to attract mainly male victims, many of whom were in retirement with substantial savings.

The attractive images drew the victims to the websites where they were persuaded to invest via interactions with whom they believed to be the attractive women, Kuo said. Chen and his staff claimed to be financial advisers specializing in cryptocurrency mining.

The bureau revealed that investigators seized ledgers containing the details of more than 100 people who invested in the scheme.

Prior to the arrests, the police monitored the schemes activities and online transactions for several months after receiving complaints. The bureau subsequently conducted raids late last month at the companys office and the residences of Chen and his staff.

What do you think about this crypto scam in Taiwan? Let us know in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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14 Suspects in Cryptocurrency Investment Scam Arrested in Taiwan Featured Bitcoin News - Bitcoin News

The chairman of Nigerias Economic and Financial Crimes Commission (EFCC), Abdulrasheed Bawa, has singled out the growth of cryptocurrencies as something that now poses a far greater danger to the world economy. Therefore, in order to deal with such dangers or threats, Bawa advocates for a collective and collaborative approach by authorities around the world.

According to a report by Vanguard, the EFCC chairman made these remarks while speaking at a symposium organized by the Centre for International Documentation on Organized and Economic Crime (CIDOEC). Meanwhile, at the same meeting which was organized to discuss the cost of economic crimes and who should foot this bill, Bawa is quoted explaining why countries must collaborate on this. He said:

[Economic crimes] affect the vital structures of global economies, causing significant damage to the global financial system and depriving developing nations of the needed resources for sustainable development.

Bawa also warned that developed countries, just like their less developed counterparts, are not immune from a scourge that has been magnified by the proliferation of cyber-crimes which threatens the stability of global financial institutions. To drive home this point, Bawa uses the example of how criminals are now choosing to transact or receive illegal monies [such as ransom money]for cyber-attacks in cryptocurrencies.

In the meantime, the EFCC chair also delved into the topic of who should bear the costs of economic crimes. The report quotes Bawa explaining his viewpoint on this matter. He said:

As the victims of crime continue to suffer globally from the effects of financial crimes, either directly or indirectly as part of a social system, the determination of who pays or who should pay becomes a critical measure of the criminal justice system in place.

Still, the EFCC chairman is adamant that perpetrators and not the victims should be made to pay for the crimes.

Do you agree with Bawas remarks about cryptocurrencies? Tell us what you think in the comments section below.

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Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Chairman of Nigerian Economic Crimes Commission: Crypto Growth Is a 'Far Greater Danger to the World Economy' Economics Bitcoin News - Bitcoin News

The International Monetary Fund (IMF) says that crypto assets, like bitcoin, are privately issued with substantial risks, and Making them equivalent to a national currency is an inadvisable shortcut. The crypto community disagrees.

The International Monetary Fund tweeted about crypto assets on Saturday, asserting that they are privately issued, come with substantial risks, and are inadvisable for use as legal tender. The IMF wrote: Privately issued cryptoassets like bitcoin come with substantial risks. Making them equivalent to a national currency is an inadvisable shortcut.

The IMFs tweet references a blog post written on July 26 by two of its legal counsels, as Bitcoin.com News previously reported. In the blog post, titled Cryptoassets as National Currency? A Step Too Far, the authors warned of the risks of making bitcoin legal tender as El Salvador did. One of the concerns mentioned was that monetary policy would lose bite, since Central banks cannot set interest rates on a foreign currency.

Many people on social media mocked the IMF for calling bitcoin privately issued. One Twitter user pointed out that the IMF is framing BTC (a public, open-source protocol) as a privately issued asset to discredit its legitimacy over national currencies, which are actually privately issued.

Some argued that fiat currencies come with more substantial risks than bitcoin. Government-issued fiat assets like the U.S. dollar come with substantial risks. Especially when they are loaned out by intergovernmental organizations with a history of bankrupting countries, one Twitter user opined.

Noting that bitcoin and crypto are competing as an international reserve asset, a third Twitter user described:

The IMF is getting nervous because companies and individuals are diversifying their wealth into bitcoin and cryptocurrencies instead of their special drawing rights (SDR).

Some people stated that the IMF is becoming an irrelevant organization. DTAP Capital founder Dan Tapiero predicted: The IMF wont exist within 10 years.

What do you think about the IMFs statement on bitcoin? Let us know in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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IMF: Bitcoin Is Privately Issued Crypto With Substantial Risks, Inadvisable as Legal Tender Regulation Bitcoin News - Bitcoin News

Bitcoin's soaring popularity and value since its inception in 2009 is a curious case for many investors. Like the Internet boom, cryptocurrency also took only a few years to become a mainstream topic, and it is growing now more than ever. Many investors, as well as professionals, have made cryptocurrency investment a part of their portfolio. But Bitcoin and other cryptocurrencies, unlike fiat currency, aren't a physical asset. These digital currencies do not follow a centralised system and don't rely on banks. Their transactions happen through a decentralised network of computers.

So, are we investing in anything at all? Or are we just speculating some returns that may happen only in the far future?

In 2018, business magnate Warren Buffett had publicly denounced Bitcoin as not an investment. Three years since, the world has seen a lot happening on the cryptocurrency front. On one hand, there are business giants investing in these digital assets. On the other hand, crypto scams have left wreckage behind them.

We should perhaps stop asking whether buying Bitcoin is speculation. Instead, let us focus on the simple rules to follow in the cryptocurrency market for the ones who would like to turn it into a real investment.

1) Long-term or short-term profits

Speculation is when we are engaging in a risky transaction, hoping for a short-term profit. Instead of being a speculator, become a real investor by focussing on long-term goals. It's a thumb rule not to invest an amount that we can't bear losing. Cryptocurrency risks are as real as they can get. So, we should weigh the risks and goals that suit us best.

2) Cryptocurrency quality

It's better to stay away from flashy and risky projects while buying coins. The promise of a quick profit may often leave us hoping for returns for eternity. But if we want to really invest in a coin, we should check the red flags. Profits may not be as quick, but it'll save us in the long run. Bitcoin price in India has increased manifold since its inception.

3) Diversify holdings

Don't put all the eggs in the same basket. Diversify the portfolio, so that, in case a coin fails in the market, all isn't lost. That's better than stocking up on one cryptocurrency and speculating that things get better. Real investment is when we prudently choose a safe ground in a volatile market.

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Cryptocurrency Investments: Is Buying Bitcoin Investing or Speculating? - Gadgets 360