Everything You Must Know About The Cryptocurrencies – A Beginner’s Guide

Everything You Must Know About The Cryptocurrencies – A Beginner’s Guide

Do you know what is Cryptocurrency? If no then you must be very well aware of the same as it is a modern way of doing transactions between two or more than two parties. Do you really want to know about starting with the cryptocurrency? Yes? If so, then yes, here is the complete beginner’s guide to let you know everything about such cryptocurrency. Let’s start with some of the basic details or information-

What is Cryptocurrency?

As this is a modern and digital era, everyone is using the digital forms in every field whether it is about making some urgent payments or anything else but still, a huge part of the population is not aware of the cryptocurrency. It is a kind or form of digital money which is designed to make the transactions to be more secure and easier. It is a kind of virtual currency which uses the concept of cryptography so as to safely verify the transactions and to control the creation of the possible scams. There are some specific terms and conditions in such concept and no one can change the entries in the database unless and until such terms and conditions may get fulfilled. Such a currency has been associated with the internet.

Concept used by the Cryptocurrency

The Cryptocurrency basically uses the concept of cryptography which is reckoned as a process of converting the kind of legible information into an uncrackable code. This uncrackable code is generally converted in order to track the purchases and different online transfers. Such a concept was introduced in order to make the communication system to be secure and to make the transfer of information easier than ever.

About the forms of Cryptocurrency?

The very first form of cryptocurrency was the bitcoin which was created earlier in 2009. It is reckoned as one of the best-known forms of currencies. During some of the recent days, the Bitcoin Currency has scored much more importance after losing about 30% of its value in the past days. The cryptocurrency is a kind of digital currency which is broadly used for the encryption techniques unlike the other fiat currencies such as US dollars, euros, and yen. The cryptocurrency is not usually regulated or controlled by any of the banks, governments, or other centralized financial authorities as well.

About the Bitcoin Currency

Don’t you know much more about such currency? It is a kind of cryptocurrency which as almost changed the way of doing the online transactions. Bitcoin is reckoned as one of the fastest and safest or freest ways of transferring the money and information from one place to any other place in the entire world. Generally, the Central Banks of the countries work to regularize the entire inflow or outflow of money within the country but there is no central control in this bitcoin cryptocurrency. Bitcoin is a perfect form of cryptocurrency which provides the unique chances to the businesses to easily transact with everyone and anywhere in the entire globe. Bitcoin has thus, reduced the need to follow a number of banking rules.

Bitcoin is a cryptocurrency form which does not usually discriminate against any single one background. This form and type of cryptocurrency always focus on making it very much sure that you will be able to do the secure transactions without facing any more risks or hassles. You just need an internet connection to identify yourself to this Bitcoin Cryptocurrency Protocol. You need not face any possible heartbreaks or inflation issues in such bitcoin cryptocurrency. About 21 million bitcoins are there in the entire marketplace. It is one of the truly global currencies which does not consider the facts such as your place to live or your work to do.

How are cryptocurrency records kept?

The cryptocurrency is a kind of digital public ledger system where you can record all the transactions which collectively known as the blockchain. Every single record or the series of records on the entire blockchain is known as a block. This block will then send to the network and then automatically added to the blockchain for a valid transfer. These blocks can’t then changed once get verified.

How can I buy and use cryptocurrency?

Cryptocurrency is a kind of volatile market which contains the fluctuating exchange rates. Bitcoin is the most valuable kind of cryptocurrency. You can get a digital key to address the currency on purchasing such Cryptocurrency. You can then access this key to validate or approve the transactions. It is a perfect place to keep your key to be safe and secure.

What can you do with cryptocurrency?

You can use the cryptocurrency in different forms such as buying goods or to invest the money. Let’s discuss some of the different uses of cryptocurrency-

1. Buying Goods and Services- Now, it is a modern era in which you can buy the goods by using the cryptocurrency. You can now pay for anything via online by using this cryptocurrency. You may find some difficulties while finding out the merchants who may accept the cryptocurrency. But surely, it is not a difficult task, you can easily find the merchants online and offline. Such merchants include the retailers and the local shop owners. Not only this but you can also pay for the flights, hotels, and many other things via such cryptocurrency. Numerous other digital currencies including the Ripple, Litecoin, and Ethereum are still not accepted.
2. Investing Money- Cryptocurrencies can provide you the high-risk investments. Numerous people are there who still don’t believe that Cryptocurrencies are the best and one of the hottest investment opportunities. Numerous other people are also there who have now become much more successful by investing in the bitcoins. It is one of the most recognizable kinds of digital currencies which was valued at $800 and this value exceeded to $7,000 in November 2017. Apart from this, you can also choose the Ethereum as the second most valued cryptocurrency whose value is continuously getting increased.

Is it really easy to buy the bitcoins?

Numerous different exchange systems are now easily available through which you can now buy the cryptocurrencies online. There is a huge share of cryptocurrency in the entire marketplace and the share has now fallen from about 90 to 40%. Numerous different currencies are now available in the market and most of them include the coin based currency system which is entirely known as the Bitcoin.

You just need a simple and easy way to store the cryptocurrency on buying it for only once. You need not store your exchanges or money amounts offline anymore as such time has now been passed away and the digital era is nowhere which has made it much easier to invest your valuable money in the online wallet exchange systems.

How to get started?

If you really want to start with the cryptocurrency then you need to understand such important terms-

1. Wallets- Such online wallets are just like the bank accounts and you can store your money in the same to be used during the online transactions.
2. Exchanges- Here, you will get the entire information related to the transfer of money online through different exchange systems.
3. Trading- You will get the information related to the ways or best methods to start trading by using the cryptocurrency in the markets.

Some other ways to start with the cryptocurrency is the management of your portfolio, some security and safety concerns, some common mistakes to avoid the losses, general tips and advice, and much more.

What are the wallets?

You can consider such online wallets as the crypto bank accounts where you can store your money online or in the form of tokens.

How to get such an online wallet?

Generally, numerous ways are there to get a wallet but one of the easiest and safest ways to get such an online wallet is to sign up for an exchange system by which you can easily buy or sell your cryptocurrencies in the form of tokens.

The system of exchanging the tokens through wallets-

Usually, every single wallet has its own unique address but you will get a totally different wallet address on starting your trade on about 3 different exchanges.

What are the different types of wallets?

As this is a modern era, people are now preferring the online wallets to secure their money as such wallets are reckoned as the best & safest ways. Have a slight look at the different kinds of wallets-

1. Desktop wallets- Different software like the Cryptonator will then allow you to send and store the cryptocurrency to track the transactions. Such online wallets are generally created by the token developers.
2. Online wallets- Such cryptocurrency keys can be stored online through the exchanging platforms such as coinbase or circle. Such online wallets have now reduced the risk of hacks or other possible scams. You need not face anymore collapse of exchanges.
3. Mobile wallets- With the help of different apps such as the blockchain store and others, you can now easily make your payments online just by using your own mobile device. These are the app-based wallets and thus, you need to install it on your mobile device.
4. Paper wallets- Some of the reputed websites are also offering you the paper wallets by generating the pieces of paper with QR codes. Such QR codes generally contain the private keys such as letters and numbers with some special characters as well.
5. Hardware wallets- To utilize the hardware wallets, you can simply use a USB device so as to store the bitcoin in an electronic form. Hardware wallets are generally reckoned as the best ways to secure your token amounts.

What are the popular exchanges?

1. Coinbase- It is reckoned as one of the best, safest, newest, and largest Bitcoin exchanges based in the US. It is a kind of popular exchange which ultimately allows you to buy foud different cryptocurrencies such as Litecoin, Ethereum, Bitcoin, and Bitcoin Cash. You need not face any hassles as you can now simply buy such cryptocurrencies via your credit card with a weekly limit of about $250. If you want, then such limit can also get increased by paying 4% as the processing fee.
2. Bittrex- It is another popular exchange which provides you different opportunities to start the trade. There is no option to deposit any Fiat currency directly into the Bittrex exchange. Firstly, you need to buy the other kinds of cryptocurrencies such as bitcoin or Ethereum and then transfer them into this Bittrex so as to start trading.
3. Binance- Such an exchange was recently launched in 2017 and based in Hong Kong. The entire western part of the world is now getting numerous benefits of such platform.
4. Bitfinex- It is another large exchange system which is based in Hong Kong. It offers you the greatest Bitcoin value which usually targets the traders based in North America. It also offers you a wider range of altcoins.
5. Poloniex- This exchange is based in the United States and generally allows trading with a few dozen cryptocurrencies.

Some types of trades based on Binance-

1. Limit Trade-It is a kind of trade system which allows you to buy or sell your tokens at a fixed price by specifying your requirement of tokens at a particular point in time.
2. Market Trade- You need to buy some of the tokens on market rates if they may be based on the Binance. It is the best and quickest way to buy or sell the tokens on an urgent basis.
3. Stop Limit- It generally allows you to set a limit on which you can easily buy or sell your tokens at a particular period of time.

Some more things to affect or enhance the Cryptocurrency-

1. Managing your portfolio- It is an important step to consider if you really want to spread out different exchanges and dozens of wallets. You need to get the multitude of addresses and locations as your major chore. If you need to manage your portfolio then you can try by setting up an excel spreadsheet by syncing with all your important data. It is the best way to represent your actual gains and losses.
2. Blackfolio- It is one of the most popular apps which was earlier released with a single motive of managing your crypto investments. You must also set the price alerts to fetch all the related important information.

Related pros-

• This Blockfolio can track over about 2000 altcoins
• It can also make you able to set the price alerts
• It also supports different fiat currencies
• It is easily available iOS and Android

Related Cons-

• It allows you to do the manual transactions only
• The related graphs are not interactive

3. Delta- It is one of the safest and newest apps which allows you to manage all your crypto investments so as to represent your net gains and losses. You must carefully enter your manual transactions in order to calculate your profits. Delta UX is a perfectly designed and user-friendly interface.

Related Pros-

• It can also track over about 2000 altcoins
• Price alerts are also there
• Fiat currencies are also supported
• It is a much better option than the Blockfolio
• It is also available for both iOS and Android

Related Cons-

• You may find it difficult to track down your trade transactions accurately
• It may not allow the interactive graphs
• There is no section for the news
• It consists of the Matrix Portfolio

4. Other Security & Safety Concerns- You must also need to take care of the safety and security concerns while trading with the cryptocurrencies. Surely, you won’t have to face any possible additional inconveniences on taking a very well care of the safety and security concerns.

Some important things to consider-

• You must enable the two-factor authentication (2FA)
• Always focus on using the long passwords which may be secure
• Don’t log in again and again

Some common mistakes to avoid-

• You must take care of sending the tokens to any of the wrong wallet addresses
• Always take care of some general tips and advice
• Invest only in the best
• Don’t time the market
• Buying the dips
• You must also diversify your portfolio
• Make a strong research by analyzing your team, technology, token forms, timelines

Conclusion-

If you are really thinking about using the cryptocurrency or may start trading such currencies then you need to analyze all the things mentioned above. If you are very much concerned about such issues then you can now get the life-changing returns on investing your valuable money in the cryptocurrencies.

Original article and pictures take www.cryptobitcoinsguide.com site

Everything You Ever Wanted To Know About Bitcoins But Were Too Broke To Ask!

Everything You Ever Wanted To Know About Bitcoins But Were Too Broke To Ask!

Despite the fact Bitcoins were found to be the currency of choice for one online kingpin to conduct drug deals

on the Deep Web, and despite the fact the current market rate for ONE Bitcoin has risen from $0.75 in 2011 to an astronomical $1000 today - does not mean you shouldn't know as much as possible about this decentralized virtual currency.

Why Bitcoins?

Because like gold and silver, Bitcoins are a viable medium of exchange, since their value is dependent on real investment of human capital, labor and resources to produce peer-to-peer encryption algorithms forming a tangible currency - even though ironically you can't hold it in your hands - because it's all bit, and no coin!

According to Barry Elias at Money News, "the market value of the Bitcoin is determined by the global aggregate demand and supply, a decentralized platform that is less susceptible to centralized control, such as sovereign entities or powerful private interests."

Who Coined Bitcoins?

While the identity of the creator of Bitcoins is clouded in a mystery, computer visionary Ted Nelson thinks he's uncovered the answer. The person who coined "Bitcoin" and is thought to be its creator is "Satoshi Nakamoto." However like the fictional character Keyser Söze from the hit movie, The Usual Suspects," he's an enigma that's most difficult to pin down.

Satoshi Nakamoto

After supposedly producing thousands of lines of code and hundreds of posts on Bitcoin in 2009, Nakamoto sent a note to a developer in April 2011 saying that he had "moved on to other things." Later that year, the New Yorker and others tried to unravel the mystery, but came away empty-handed. In essence, Bitcoins are as cryptic as the crypto-currency itself.

Nelson's theory is that Satoshi Nakamoto is a pseudonym for Shinichi Mochizuki, a math professor at Kyoto University. However his explanation appears purely speculative and isn't backed up by facts. In this video, he goes as far to claim that he's looked where others haven't and has used deductive reasoning - to solve the mystery - similar to Sir Conan Doyle's Sherlock Holmes.

How does It Work?

Nakamoto is said to have wanted to create a currency immune to the predations of bankers and politicians - one that was the first time controlled entirely by software.

Somewhat similar to a monetary exchange market, every ten minutes or so, coins are distributed through a process that resembles a lottery. In so doing, the bitcoin software is said to release a total of twenty-one million Bitcoins over the course of the next twenty years.

For more on the machinations of Bitcoins, the Mashable Explains features a video covering everything from Bitcoin mining to other advantages and benefits for the well-healed Bitcoin trader.

Can Bitcoin transactions be made in Fractions?

Since the value of one Bitcoin at present is trading at $1000, the question that arises is how can you make small purchases using one Bitcoin. To understand how this works, it's important to be aware that Bitcoins corresponds to addresses, which occur in the Bitcoin block chain. In its simplest form, think of a big database of balances for each Bitcoin address. In turn, your wallet holds a private key for each address, which can be seen as the password needed to spend the balance that is accredited to the corresponding addresss.

When you spend some bitcoins, you send them from one of your addresses to another address. Only the person that owns the private key corresponding to those addresses can spend the bitcoins on its balance.

Now, that still does not explain how bitcoins can be divided into smaller amounts of fractions. Well to make it as clear as mud, the Bitcoin protocol does not really work with the unit Bitcoin, but with a smaller unit, called Satoshi (yes, an obvious reference to the supposed creator of Bitcoins). In actuality one Bitcoin equals 100,000,000 Satoshi. So, voilà, one Satoshi is the smallest amount you can send - so, yes you can trade in fractions of Bitcoins.

So are you still in the dark?

Don't worry - you are in good company. A recent survey from TheStreet.com reveals that 76 percent of consumers are not familiar with Bitcoin -- and 79 percent would never consider owning a currency like it.

The jury is out whether this virtual currency is a good investment or a speculative trap? According to a Forbes report, "since Bitcoin is not tied to any country, the currency is theoretically more stable and suffers from less political risk." And as far as users, Forbes themselves accepts Bitcoins as a form of payment, as well as the online game-maker Zynga, venture capitalist Marc Andreeson - and most recently even the Winklevoss twins -- who notoriously accused Facebook's Mark Zuckerberg of stealing their idea -- have been "in dialogue" with the SEC about opening the first Bitcoin exchange-traded fund. Hey, if Dweedle Dum and Dweedle Dee see its value, who are we to question its merits?

Some of the sites we link to are affiliates. We may earn a small commission if you use our links.

Original article and pictures take www.moarcoins.com site

Ethereum for Dummies

Ethereum for Dummies

What is Ethereum?

In a nutshell, Ethereum is a new innovation in computing built from technologies…

Original article and pictures take cdn-images-1.medium.com site

Elimina el sarro de tus dientes, tú mismo en casa, de manera fácil.

Elimina el sarro de tus dientes, tú mismo en casa, de manera fácil.

El sarro es esa placa mineralizada sobre los dientes, de color amarillo o marrón. El sarro se va acumulando en los dientes y si no lo quitas, puede causar una periodontitis. Por suerte, puedes remover el sarro de manera fácil y segura, sin ir al dentista.

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Vas a necesitar:

- Bicarbonato de sodio

- Palillo de dientes

- Sal de cocina

- Peróxido de hidrógeno (agua oxigenada)

- Agua corriente

- Cepillo dental

- Una taza

Paso 1. Mezcla una cucharada de bicarbonato de sodio con ½ cucharadita de sal en una taza. Enjuaga el cepillo con agua caliente y luego mójalo en la mezcla. Cepilla tus dientes y escupe. Todo el proceso debe durar cinco minutos.

Paso 2. Mezcla una taza de agua oxigenada con ½ taza de agua tibia, enjuaga su boca durante un minuto y escupe. Luego enjuaga con ½ taza de agua fresca.

Paso 3. Utiliza el palillo de dientes para frotar el sarro de los dientes. A fin de no irritar y dañar las encías, ten cuidado de no rascarlos.

Paso 4. Usa el enjuague bucal antiséptico por lo menos cada dos días.

Algunos consejos para tener los dientes sanos:

Las fresas y los tomates

Porque son ricos en vitamina C, son perfectos para mantener la salud bucal. Puedes frotarlos directamente sobre los dientes, dejandolos actuar por 5 minutos. De esta manera, el sarro se pone más blando.

Luego, enjuaga la boca con una mezcla de bicarbonato de sodio y agua tibia. Además, se puede aplicar el mismo procedimiento con otros alimentos ricos en vitamina C, como los pimientos, limones verdes o amarillos, papaya, naranja.

El queso

El consumo de queso cheddar o queso suizo antes de las comidas ayuda a neutralizar los ácidos que causan sarro. El queso contiene elementos que actúan como defensores de los dientes.

Busca por:

Original article and pictures take informao.com site

Electrum Bitcoin Wallets Were Vulnerable to Hackers for Two Years

Electrum Bitcoin Wallets Were Vulnerable to Hackers for Two Years

Image: Shutterstock. Composition: Jordan Pearson

For almost two years, hackers could have easily stolen your prized stash of bitcoins if you were keeping them in the popular software wallet Electrum, thanks to a critical security vulnerability that went unpatched until now.

The vulnerability allowed any website (and anyone controlling the site a victim browsed, like a hacker) to steal bitcoins stored using Electrum, as long as the software was running and there was no encryption password set up, according to security researchers. The bug was initially reported by Github user “jsmad” on November 24, 2017. Electrum, however, didn’t fully patch the bug until Sunday, January 7, and only after Google security researcher alerted them to how serious the bug really was.

“The bitcoin wallet Electrum allows any website to steal your Bitcoins,” Ormandy tweeted on Saturday. “I was gonna report it… but there was already an open issue from last year. I pointed out this is kinda critical, and they made a new release within a few hours.”

Mustafa Al-Bassam, a postgraduate researcher at University College London, told me over Twitter that the hackers could have exploited the bug since February 2016, almost two years ago, when developers released Electrum 2.6.

“[The bug] allows any malicious website to control your Electrum wallet, including stealing all your Bitcoin if the wallet isn’t encrypted with a password,” Al-Bassam told me via Twitter direct message. Even if the wallet does have a password, he explained, a hacker could still redirect bitcoins from the wallet to their address.

An initial patch for the bug was released on Saturday, but confusion ensued as the patch didn’t actually fix the whole issue, according to Electrum itself. The company said on Twitter that its initial patch (3.0.4) “did not completely address the vulnerability.” The final patch only came later, on Sunday.

Electrum’s founder, Thomas Voegtlin, explained over email that the company didn’t realize how critical the bug was back in November, because even the researcher who made the initial report didn’t know. “That is why we did not consider the initial bug report as critically urgent,” Voegtlin told me in an email.

In January, once Google researcher Ormandy explained the bug’s serious effects to Electrum, the developers rushed to patch it, releasing a partial fix as soon as possible and then a complete fix a day later. According to Voegtlin, this staggered rollout was the plan all along.

Read More: Ethereum Wallet Company Knew About Critical Flaw That Let a User Lock Up Millions

“When a zero day exploit is made public, it is important to address the vulnerability as soon as possible, because attackers are going to use the exploit,” Voegtlin wrote me in an email. “This is why we released 3.0.4 immediately, before password protection was ready.”

For some, however, Electrum’s slow turnaround in patching the vulnerability is bound to bring up bad memories. Last year, millions of dollars worth of Ethereum’s cryptocurrency was locked up forever, allegedly by accident, thanks to a bug that was known to the wallet developers but left unaddressed for months.

The Electrum bug is now fully patched, but there’s a chance hackers could still take advantage of it, if users haven’t updated their software. Electrum doesn’t automatically update, so many victims might be vulnerable unless they proactively check and apply the patch, according to Al-Bassam.

“I think this bug will be exploited for a while, since Electrum doesn’t have a built-in upgrade mechanism on Windows and Linux,” he added. Twitter user “h43z” showed how the bug can be easily exploited in a short proof-of-concept video showing a bare-bones site they developed to attack their own wallet.

The vulnerability was in Electrum’s JSON-RPC interface, which wasn’t properly secured. JSON-RPC is a simple protocol that allows data and other code to be exchanged between clients and servers, which is also used by several other digital wallets or software, such as wallets for Ethereum, a competing cryptocurrency.

It’s unclear if Electrum’s JSON-RPC vulnerability, specifically, was ever actually exploited by hackers. But in recent months, security researcher Dimitrios Slamaris and others noticed that criminal hackers have tried to find vulnerable Ethereum wallets by scanning the internet for JSON-RPC interfaces exposed on the internet. This interface, as Bleeping Computer reported, should in theory be only exposed locally, but if it is exposed to the wider internet then it can be used to steal cryptocurrency.

Given how much hackers love to steal Bitcoins and any other cryptocurrencies, if you use Electrum, you should probably patch your wallet app immediately.

Got a tip? You can contact this reporter securely on Signal at +1 917 257 1382, OTR chat at lorenzo@jabber.ccc.de, or email lorenzo@motherboard.tv

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Original article and pictures take bitnewsbot.b-cdn.net site

El martes 24, GDAX volver a permitir el trading de Bitcoin Cash a Euros

El martes 24, GDAX volver a permitir el trading de Bitcoin Cash a Euros

A finales del año pasado, Coinbase añadió a su Exchange Bitcoin Cash, algo que provoco una gran polémica, porque podría haberse dado un caso de información privilegiada por parte de alguno de sus trabajadores, que habrían filtrado información a cierto número de personas, algo que provoco que estas se beneficiaran de la subida de valor y ganando muchísimo dinero. Esta decisión afecto a GDAX, la versión de la compañía surcoreana destinada al mercado europeo, la cual reiniciara las operaciones de Bitcoin Cash a Euro en menos de 48 horas.

GDAX, es una casa de cambio que depende directamente de Coinbase y que ha publicado que abrirá de nuevo el trading de BCH/EUR el próximo miércoles 24 de enero a las 2:00 AM (PST). Esto permitirá a los operadores volver a trabajar de manera directa con Bitcoin Cash, sin tener que hacer el cambio a Bitcoin y luego pasarlo a euros, lo cual provoca que se paguen comisiones dos veces, lo cual supone reducir el coste.

Para evitar nuevos problemas, GDAX ha prometido realizar el proceso de manera gradual, para que no se dé ninguna saturación de la red, por lo que se iniciara el proceso en etapas, hasta que el servicio vuelva a entrar en modo completo. La duración de dichas fases, se debe a diferentes factores, como la liquidez y la volatilidad de los precios.

Ahora mismo, Bitcoin Cash, sufre una caída generalizada en el mercado, igual que la gran mayoría de criptomonedas. Pierde en estos momentos sobre un 10% y está por debajo de los 1.600$. Este ajuste es bastante importante, pero se podría volver a la normalidad en las próximas 48 horas. Estas últimas semanas el mercado tiene una gran volatilidad.

Original article and pictures take hardwaresfera.com site

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Don’t Ban Bitcoin – Russian Banker

Don’t Ban Bitcoin – Russian Banker

Russian state banker calls for Bitcoin acceptance.

Bitcoin and various altcoins have endured turbulent times in Russia as the government continually changes its stance on cryptocurrencies.

Last month, Russia announced that it would be issuing its very own cryptocurrency which would be regulated by its very own authorities. ‘Cryptoruble’ cannot be mined, but people would be able to trade the virtual currency with Russian Rubles.

A little over three weeks later, Russia’s communications minister Nikolay Nikiforov reiterated that Bitcoin trade would never be legalized in the country.

Russian statements

Despite all of this, there still seems to be a healthy appetite for Bitcoin and cryptocurrency in the country, with bank and financial institution heads making interesting statements on the subject.

German Gref, who is the head of Russian state bank Sberbank, believes that the acceptance of Bitcoin and cryptocurrencies by the masses cannot be ignored:

“Virtual currencies are a natural outcome of Blockchain technology. We may ban them; we may welcome them. It is trendy to urge people not to play with them. But they are a fact of our life.”

While the man on the street openly buys and sells Bitcoin, Ethereum and other altcoins, most financial institutions and governments remain wary of virtual currencies.

However, Gref believes that apathy is slowly changing.

“Protectionism is just the first reaction of the state. However, both the institution of private money and the states, which will dare to change the way currency is issued, will eventually find a place for cryptocurrencies in the economy.”

Cryptoruble proves a point

The fact that the Russian government intends to issue its very own virtual currency proves that global institutions are more than aware of the applications of Blockchain technology.

The Russian government will also tax profits made on the sale of Cryptorubles. Herein lies the rub.

Cryptocurrencies cut out governments and banks and that is one of the biggest reasons why authorities are so opposed to virtual currencies.

It’s incredibly difficult to tax and make profit off cryptocurrencies, and that is the biggest hurdle standing in the way of legalizing virtual currencies in various countries.

Secret symbol № 3: L

Original article and pictures take www.btcethereum.com site

Digital Currency and Bitcoins PSD Template

Digital Currency and Bitcoins PSD Template

Bitexch. is a PSD digital Currency Template, specially designed for Digital Currency, Ethereum Bitcoins, Crypto Currency, Share Market,Consulting Finance, Business, Corporate. You can use this beautiful template.

In addition, you are getting 16 Unique PSD layered files. 2 Different Home variation Everything is in Documentation file so that you can change anything easily.

• 16 PSD Files with Layer Styles
• 2 Different Home variation
• Currency Data market
• Modern and clean design
• 100% Fluid Responsive design
• Free Fonts used
• Well organised layer
• Easy & customizable PSD files
• Full width 1920px.
• Help File .
• 24/7 Great Support !!

Original article and pictures take public-assets.envato-static.com site

Deutsche Banken zurückhaltend beim Thema Blockchain

Deutsche Banken zurückhaltend beim Thema Blockchain

Die deutschen Kreditinstitute scheinen zwar Bedeutung und Potenzial der Blockchain-Technologie zu erkennen, betrachten sie jedoch aktuell noch nicht als Teil ihrer strategischen Ausrichtung.

Technologie ist nicht erst seit der Digitalisierung ein wichtiger Faktor für Finanzdienstleister. Im Bank Blog finden Sie Studien zu den wichtigsten Trends und Entwicklungen.

© Shutterstock

Blockchain-Technologien gelten als potenziell disruptiv für den Finanzsektor. Sie ermöglichen den dezentralen Austausch von Werten ohne Intermediäre, wie z. B. Banken oder Sparkassen. Die Wirtschaftsprüfungs- und Beratungsgesellschaft PwC hat rund 150 Führungskräfte deutscher Kreditinstitute zum Stand der Etablierung von Blockchain-Technologie in ihren befragt.

Infografik Blockchain im Überblick

Die folgende Infografik die Grundlagen der Blockchain-Technologie vor und stellt – neben einer Definition – die Vorteile und Herausforderungen sowie Anwendungsbeispiele vor.

Ein Kurzüberblick zur Blockchain-Technologie

Blockchain Potential weitgehend erkannt

Die deutsche Kreditwirtschaft hat erkannt, dass Blockchain-Technologien ihre Wertschöpfungsprozesse nachhaltig verändern können. Rund die Hälfte der Befragten bestätigt die Relevanz von Blockchain für ihr Institut und deren Geschäftsfeld. Im 10-Jahres-Ausblick sehen 63 Prozent der Befragten (54 Prozent sogar bereits im 5-Jahres-Ausblick) eine mittlere bis extreme Beeinflussung des Geschäftsmodells ihrer Bank durch Blockchain-Technologie.

Allerdings ist das Verständnis der neuen Technologie noch nicht überall vorhanden. 68 Prozent der Befragten sind nur wenig oder gar nicht mit ihr vertraut. In vielen Instituten gibt es zudem noch keine dezidierten Ansprechpartner für das Thema. Der Großteil der Institute setzt sich auch noch nicht konkret mit der Anwendung auseinander. 39 Prozent der Befragten werden sich im Jahr 2017 nicht mit dem Thema Blockchain beschäftigen. 76 Prozent werden die Technologie erst dann produktiv einsetzen, wenn andere Marktteilnehmer es ebenfalls tun; 25 Prozent sogar explizit erst dann, wenn der Großteil der Wettbewerber bereits für einige Zeit die Technologie einsetzt.

Blockchain noch nicht Teil der Geschäftsstrategie

Trotz der vorhandenen Erkenntnisse setzen sich bislang die wenigsten Banken strategisch mit Blockchain-Technologie auseinander. Bei 75 Prozent bildet Blockchain-Technologie keinen Teil der strategischen Ausrichtung. 58 Prozent beschäftigen keine Mitarbeiter, die sich regelmäßig mit dem Thema befassen. 72 Prozent weisen der Erforschung der Technologie kein Budget zu, nur 2 Prozent der Unternehmen investieren signifikant.

Interessanterweise beschäftigen sich kleinere Banken mit einer Bilanzsumme von unter 1 Mrd. € im Schnitt bereits länger mit der Technologie. 20 Prozent der kleineren Häuser stellen zudem ein eigenes Budget für Blockchain-Projekte bereit, während es bei großen Banken nur 5 Prozent sind.

Schlüsselfragen zum Thema Blockchain

Die folgende Grafik verdeutlicht die wichtigsten Fragen rund um den Einsatz von Blockchain-Technologien in Banken und Sparkassen:

Die wesentlichen Fragen zu einem Einsatz von Blockchain-Technologie im Banking

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Decentralization Trade-offs and the Extremism of Bitcoin Core

Decentralization Trade-offs and the Extremism of Bitcoin Core

Never a dull moment in crypto. This week we saw the launch of Bitcoin Cash, a forked version of Bitcoin, offering 8MB blocks and no SegWit. Although down from peak prices, at the time of this writing it commands a 3.4 billion dollar market cap and is the #4 coin… and mining has not started in earnest because the difficulty is still adjusting.

Meanwhile, Bitcoin is trading at all time highs and touched $3300. Good times!

I think this is great news for everyone. After a 4 year long debate over scaling, the various schools of thought will now be able to compete in the marketplace.

The Debate Has Mostly Been About Decentralization

There are good people on both sides of the debate, and I think that most of them simply support the plan that they believe will keep Bitcoin “decentralized”.

The small-block camp says that if we make blocks too large, then only huge data centers will be able to run nodes, which are then easily coerced and controlled by governments.

The big-block camp says that if we keep blocks small, Bitcoin will become a settlement layer. Ordinary users will be priced out of making direct blockchain transactions, and will be forced to use corporate banking solutions complete with AML/KYC requirements.

Both of these situations would obviously be bad and should be avoided if possible. So how do we do that? How do find the healthy middle ground and avoid the perils of centralization on both ends?

We Need to Look at the Realities of Technology

We cannot philosophize in a vacuum if we want to solve problems in the real world.

So, first let’s ask: what technologies are available to allow affordable on-chain scaling?

Well, we know that storage, Internet bandwidth, and computer processing are the 3 key resources that are required to scale. We know they are getting better all the time.

Even today, gigabit Internet speeds are already available for home users. A byte is 8 bits, so essentially a “gigabit/sec” speed means a gigabyte every 8 seconds.

Remember that 1MB (the current Bitcoin block size) is 1000 times smaller than a gigabyte. And consider that the block interval of 10 minutes (600 seconds) is 75 times longer than this 8 second duration!

Sidechains?

To be fair, we should also consider what technologies can be used to move transactions off the main chain without creating an obstructionist settlement network.

Sidechains/Drivechains seem like a possible way to move transactions off the main blockchain. However, the more transactions you move off of it, the weaker you make the main blockchain, since transaction fees are the source of security funding for the miners.

It might not be a problem to weaken it slightly, but if you want, say, a 10x off-chain scaling solution, that means weakening it 90%.

Healthy vs Unhealthy Approach to Decentralization

We should avoid decentralization at both extreme ends of the spectrum. We don’t want blocks so small that it fosters an era of “Banking 2.0” by moving things off chain before they need to. And we don’t want blocks so large that almost no one can download them.

The problem, as I see it, is that the current “Bitcoin Core” team has not taken a healthy approach, and instead has chosen the lopsided position of keeping 1MB blocks for years. Even the “1.7” SegWit approach is a piddling increase.

At the same time, the “unworkably large” blocks scenario doesn’t seem to be a real problem unless we had MUCH MUCH bigger blocks (again, see above about gigabit Internet).

The pseudo conservatism of the Core mindset (“we want to do everything we can for scaling before we increase the blocks”) is therefore misguided or disingenuous. It actually represents an extremist position.

Let the Market Decide

Now that Bitcoin Cash is available and thankfully is generally perceived as a new valid “version” of Bitcoin rather than “just another altcoin”, I think the Core version of Bitcoin may hopefully get some real competition.

Since I own Bitcoin on both chains, this is a good thing :)

It’s important to keep talking about the issues, though. I am concerned many people do not understand what the implications of Bitcoin becoming a settlement layer really mean.

Even though the “debate” is over, the community should continue to have an open and honest dialogue on forums that allow it.

Original article and pictures take cdn-images-1.medium.com site

DBS David Gledhill says Bitcoin is a Ponzi Scheme

DBS David Gledhill says Bitcoin is a Ponzi Scheme

Many representatives of the traditional finance industry are continuing to criticize bitcoin. In recent days, CNBC has spoken with among others David Gledhill of DBS, Interactive Brokers’ Thomas Peterffy, and Morgan Stanley’s James Gorman – all of whom has made discouraging statements regarding bitcoin.

Also Read: Real Estate Listings Use Bitcoin to Garner Publicity

Representatives of Major Financial Corporations Are Continuing to Criticize Bitcoin

David Gledhill, the group chief information officer at DBS, has called bitcoin a “Ponzi scheme.” Also known as The Development Bank of Singapore Limited, DBS is multinational banking institutions headquartered in Singapore that services numerous countries in the Asian region. Mr. Gledhill criticized the fees associated with bitcoin transactions, describing such as “incredibly expensive.”

Mr. Gledhill told media “we don’t think DBS being in [bitcoin] right now is going to create a competitive advantage for us.” Rather, the DBS representative stated that “right now, it’s watch and learn.”

The Chairman and Chief Executive Officer of Morgan Stanley, James Gorman, has described bitcoin as “punching above its weight.” Mr. Gorman expressed his opinion that bitcoin “doesn’t quite deserve the attention it is getting,” however conceded that “as acceptance is growing with bitcoin, and usability is growing, clearly it’s not going away.”

“Is [Bitcoin] a Needed New Form of Stored Value? I’m Not So Sure.” – James Gorman, CEO of Morgan Stanley

Mr. Gorman criticized the highly speculative nature of bitcoin, stating “something that goes up 700 percent in a year – it’s by definition speculative. So anybody who thinks they’re buying something that it’s a stable investment is deluding themselves. It might go up another 700 percent, but it could easily not.”

Mr. Gorman also emphasized his concerns relating to the use of bitcoin by “people who want to use currencies on [an] anonymous basis for wrong purposes,” adding “will the regulators and the central banks just watch this from a distance? I’m not so sure.”

Thomas Peterffy, the chairman of Interactive Brokers, has stated that although he personally does not oppose individuals trading bitcoin, he believes cryptocurrencies should be separated from the “real economy.” Mr. Peterffy stated “I think bitcoin and other cryptocurrencies are great ideas. They should be allowed to be traded freely and used freely to find their appropriate role in the economy… What I am objecting to is linking bitcoin and other cryptocurrencies by federal regulations to the real economy, which would happen if we were to clear bitcoin along with other products in the same trading house.”

Mr. Peterffy Recently Took out a Full-Page Ad in the Wall Street Journal to Warn Against Cryptocurrency

Mr. Peterffy is concerned that embedding cryptocurrency into said “real” economy could expose traditional markets to the volatility of bitcoin. Mr. Peterffy stated “bitcoin has risen by 1,000 percent over the last year. It went from $700 to $7,000 – there is nothing to say it wouldn’t go to $70,000… It could bring down the entire economy.”

On the 14th of November, Mr. Peterffy took out a full-page ad in The Wall Street Journal to publish an open letter warning the Commodity Futures Trading Commission (CFTC) chairman Christopher Giancarlo as to the “dangers of clearing bitcoin and cryptocurrency derivatives in [the] same organization as other products” in reference to CME’s upcoming launch of bitcoin futures trading.

What do you think of the criticisms made regarding bitcoin? Share your thoughts in the comments section below!

Images courtesy of Shutterstock, DBS, Wikipedia, Interactive Brokers

Need to calculate your bitcoin holdings? Check our tools section.

The post DBS David Gledhill says Bitcoin is a Ponzi Scheme appeared first on Bitcoin News.

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Original article and pictures take bitcoinlove.xyz site

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Cryptocurrency Traders Owe Massive Taxes On Fat 2017 Gains

Cryptocurrency Traders Owe Massive Taxes On Fat 2017 Gains

I confirmed what the media has been reporting: Coin traders made fortunes in 2017. Now that the 2017 tax-filing season is underway, these traders should gather online tax reports if available, use a coin trade accounting program, and review the latest guidance on tax treatment.

Original article and pictures take www.scoop.it site

Cryptocurrency online investments. Learn, Discuss, Profit.

Cryptocurrency online investments. Learn, Discuss, Profit.

usi-tech.info

bitconnect.co

Bitcoin Fees: The Basics and What You Need To Know

Cryptocurrencies brought several new concepts and ways to earn money and to raise capital. One of these methods is one we know today as Initial Coin Offerings. That is a concept that is very similar to Initial Public Offerings. In an ICO, a newly forming company or project in the field of cryptocurrencies offer their …

Bitcoin is a great concept, we know that. It brings many new technologies and opportunities to the table as well as the promise to revolutionize the economy we know today. It has taken the world by surprised and established itself as a serious investment option for both regular speculators and big names in the financial …

Signup now and get inside news on my cryptocurrency journey from bitcoin buying to trading tips and investing strategies. At the end of each month i’ll send my detailed portfolio report, delivered direct to your inbox for FREE. Knowledge is power, don’t miss out on this valuable information.

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Cryptocurrencies Occupying Minds of Banks and Regulators

Cryptocurrencies Occupying Minds of Banks and Regulators

The next wave of mainstream adoption could have the banks and traditional institutions all mulling over cryptocurrencies.

With the rise of interest that hit its peak in late 2017 surrounding cryptocurrencies, it was only a matter of time before the regulators and their kin got stuck into the cryptocurrency world. Banks, central banks, regulators and other financial institutes are racking their brains about this phenomenon, and how to approach it.

Regulators, and by association, those in the financial sector, were caught very unaware by the crypto boom in 2017. However, with its adoption and interest at this all-time high, those behind the eight ball have had a chance to catch up.

Going beyond the nascent stage

Bitcoin, despite being over nine years old, can now really count itself out of its nascent stage. It has breached the mainstream barrier for investors – from Wall Street to the everyday man on the street.

Farzam Ehsani, Blockchain lead at Rand Merchant Bank in South Africa, demonstrates this simple by his title within a major bank in the country. He adds that cryptocurrencies will truly “emerge from the nascent stage of being at the fringe.”

“There isn’t any central bank or financial institution that isn’t thinking about this and what it means for the economy,” Ehsani said.

Regulators chance to throw their weight around

Because regulators are now taking Bitcoin and other cryptocurrencies seriously – as a threat or otherwise – as well as looking into Blockchain technology, they will start to flex their muscle.

It has been seen already with a threat coming out of Korea on a crypto ban, which proved to be false, still affecting the market.

Bitcoin is often in the limelight as the most well known and popular cryptocurrency, and thus the one that many regulators set their sights on, but there are over 1,000 others to deal with.

Hard work

Regulators may be mulling over what to do about cryptocurrencies and how to whip them into a shape that suits the traditional financial institutions, but it will be a tough task.

Ehsani expected greater regulation of cryptocurrency exchanges, where buying and selling took place, as well as of the interface between cryptocurrencies and regular fiat currencies. However, it has been more of a case-by-case situation.

A new wave of adoption?

The fact that dinosaur-type institutions have been forced to take cryptocurrencies seriously, even if a little late, is probably a positive in the long run.

It hands legitimacy to the cryptomarket, and despite even the best efforts of regulators, it would seem they cannot kill the entire thing. Regulation has always had a positive side to it and if that is reached the market may stabilize and be less volatile.

Original article and pictures take www.btcethereum.com site

Cryptocurrencies - Questioning The Value Proposition

Cryptocurrencies - Questioning The Value Proposition

Authored by Stephen Englander via Rafiki Capital Management,

Bitcoin is deciding whether this is the moment to crash and burn.

My conjecture is that cryptocurrency holders are trying to decide whether to abandon Bitcoin because its limitations mean it will be superseded by better products or bet that it can thrive despite them.

The dilemma is that once you stop pricing Bitcoin and its derivatives as new assets that will head to the moon, the pricing model is more conventional and much less breathtaking.

We discuss these issues below.

Below we go through some of the questions on why Bitcoin and cryptocurrencies have certain characteristics, and whether these characteristics are needed or even desirable.

1. Is Bitcoin Netscape?
2. How limited is the supply of cryptocurrencies?
3. If Bitcoin crashes what happens to other alt-currencies?
4. What asset market lacunae do cryptocurrencies fill?
5. Why mine?
6. Why distribute the ledger?
7. Do cryptocurrency transactions need coins or tokens?
8. Can you make cryptocurrencies KYC and AML compliant?​

1) Is Bitcoin Netscape?

Bitcoin emerged in the shadow of the financial crisis, when the reputations of the financial and economic policy community was at a post-1930s low. It is designed for a world in which there is no confidence in major fiat currencies. Bitcoin gives you pseudonymity

New York, 16th January 2018 (albeit imperfect), the distributed ledger means that transaction records are unlikely to disappear, the mining can take place anywhere and there are built-in incentives for miners to keep mining.

The question is whether there is a problem that the original Bitcoin solves in developed economies. Some Bitcoin characteristics superficially suit a ‘Mad Max/Hunger Games’ world, but add little now. My suspicion is that even in the Mad Max world, the value of Bitcoin will be de minimis since hard assets will be the currency, not an abstract string of code.

Bitcoin may nonetheless be optimized for parts of the world that have harsh capital controls or dysfunctional governments, and for illicit transactions (although even here better versions exist). The characteristics listed above are helpful in preserving capital where security of capital and asset ownership does not exist.

Pseudonymity, a distributed ledger and mining do not seem essential in developed economics and may even be drawbacks for many useful applications of the technology. It seems straightforward to design a cryptocurrency that is optimized for enabling cheaper transactions and recording of asset transfers and other transactions within the developed economy financial system. Some of these already exist and may be gaining on Bitcoin. Over time they may well supersede Bitcoin.

There are paths by which Bitcoin could remain dominant, helped by its first mover advantage. However, there are likely many more paths by which it becomes a footnote either by cryptocurrencies that have functionality in transactions but not as a store of value, or because competitor alt-currencies are just better.

2) How limited is the supply of cryptocurrencies?

One of the weakest element of the Bitcoin/cryptocurrency origin mythology is the limited supply. That argument is still used to justify pricing Bitcoin off gold and other stores of value. As if Bitcoin cannot be replicated cheaply and indefinitely. Forks are increasingly popular because it feels like you are getting additional cryptocurrency for free. But some may notice that is an arbitrary supply increase.

There are no barriers to entry on the crypto space, other than a good story about the niche that your coin is filling. The number of ICOs tells you that it is easy and cheap. There are big incentives to get in on the ground floor of a cryptocurrency that has even moderate acceptance.

3) If Bitcoin crashes what happens to other alt-currencies?

The possibility that Bitcoin is superceded by better alt-currencies has important implications for the class. In fact, it likely determines the future pricing structure of these currencies.

Bitcoin’s price does not have a floor because it does not have a fundamental pricing model like equities and bonds. If its price starts falling because other products are available and better, there is little to stop it. As a thought experiment, say Bitcoin was trading today at $14k and stayed there for three months. Six months from now it dropped to $14 and stayed there for three months. What would you look at to figure out which was the right price? The run-up in Bitcoin created a mystique of one-way trading which is being shaken but the pricing requires faith that there will always be demand. This is far from guaranteed given the existence of alternatives with better characteristics.

If Bitcoin crashes, investors in other alt-currencies will likely become more demanding in terms of the value proposition and link value to functionality, rather than faith. I can value a cryptocurrency that collects a fee for performing or recording transactions, but that value is likely to be different than as an alternative to gold or fiat money. This means pricing alt-currencies off credit card companies, depositories and other companies that provide similar transactions and recording services. That valuation is likely to be much more prosaic than the valuation now attached to cryptocurrencies as assets.

4) What asset market lacunae do cryptocurrencies fill?

If you are not afraid of a financial breakdown, confiscation of your assets or the feds, can you pin down the asset characteristics of a cryptocurrency that give them value? Do they allow you to hedge risk, choose a preferred point on the asset market risk-return curve, give you a share in some productive asset, or shift consumption from now into the future in a reliable way?

There are assets that are not much good in transactions (gold, the S&P ETF that you own) and transactions vehicles that are not great as assets (your VISA card, cash, the ATM at the corner dive that spares you the trouble of going to the bank). For now focus on the asset side and ask how capital in developed economies is better allocated because cryptocurrencies exist. (We discuss transactions functionality below.)

Enabling young people to invest in human capital without the rationing, naivete and moral hazards of current student loan programs would concretely improve savings-investment efficiency. I am trying to think of an analogous asset market problem that crypto assets help resolve.

The blockchain and other innovations associated with Bitcoin potentially could make transactions quicker, cheaper and less risky. However, this relates to their transactional functionality but is not here or there with respect to their desirability as an asset.

If you believe that capital controls are immoral, you can argue that coin and other cryptocurrencies allow you to protect your assets by skirting such controls. That is not a big issue in G10 economies, but there could be a genuine debate elsewhere. If you believe that taxes are not moral or that arms/drug dealing is, you can make a similar case for cryptocurrencies link. Most of us need a lot of convincing before we swallow that.

So I still struggle to determine a DM asset market problem that it solves. South Korea and a couple of other countries are rumored to be taking actions to limit or stop speculation in cryptocurrencies on the view that it is a waste of time and resources and does not contribute to the public good.

A similar motivation was behind Montreal banning pinball in public for decades after 1955. I was a personal victim of the ban in my youth. There is an element of paternalism in limiting a very narrow and specific set of transactions, while allowing you to blow your fortune on horse races or at the casino. However, most of us have a hard time discussing our ‘investments’ at the race track or casino.

5) Why mine?

Mining in Bitcoin and its clones provides incentives to maintain the distributed ledger. It is also extends the analogy between Bitcoin and gold, which is a very effective marketing device. It is clear there is a colossal waste of energy link.

Digiconomist estimates that USD2bn worth of energy is being consumed to mine USD14bn of BTC. That means that the electricity cost is 14% of maintaining the blockchain and almost 1% of the Bitcoin market cap and likely to rise. It looks increasingly that cryptocurrency mining will be heavily concentrated in the locations where electricity is grotesquely mispriced.

Originally the mining was probably intended to deal with the collapse of fiat currencies. You would have a bunch of miners and maintaining a bunch of blockchains and manipulation would be close to impossible. Mining has now become so concentrated that there is a possibility that the transaction record could become corrupted by collusion among big miners, or that transactions costs could be artificially elevated.

Talking about large numbers of independent, decentralized cryptocurrency miners is like talking about the family farm in US agriculture. It’s a nice image but nowhere close to reality. Stories of individuals buying power plants to mine cryptocurrencies further weaken the narrative of a decentralized system that is coalition-proof link.

The only reason to have mining now is because it has become a defining characteristic of cryptocurrencies, even though it has no real purpose, except to jump start interest in new currencies by offering high returns to the initial miners. Given the huge built-in inefficiency of mining process, the question is can you get the benefits of a cryptcurrency without the mining process. Some altcoins do not have mining and this is likely the direction future coins will take.

6) Why distribute the ledger?

The distributed ledger solves the problem of how to maintain the integrity of a decentralized system. It doesn’t establish a need for such a decentralized system or justify the costs that are associated with it.

What is the marginal benefit of the 51st ledger out there? You must fall back on the Mad Max world to really need so many replicative ledgers. Then you must believe that computer systems will be running.

One of the selling points on public blockchains is that their dispersion would make them impervious to hacking and corruption. With mining operations so specialized and concentrated, that argument has gone be the boards. I have seen discussions in which it is argued that the gaming the blockchain would be self-defeating and will not happen, but that is not the same as demonstrating that it cannot happen.

For many purposes private blockchains are likely to be more efficient. The need for replication is limited. Whether the security of the distributed blockchain exceeds that of private blockchains is unclear, as are the relative costs. Especially when there are a lot of transactions concentrated among a small number of participants, we are likely to see private rather than public blockchains dominate. My expectation is that we will come to see blockchains as clubs, rather than villages.

7) Do cryptocurrency transactions need coins or tokens?

My credit card enables me to transact across states and countries. But it doesn’t require that I buy a credit card asset or token. Say cryptocurrencies make cross-border transactions or asset transfers less expensive, or we use a blockchain to record transactions and contracts. It is obvious that fees will be charged for this service, just as the credit card company charges. But do we need a tradable asset with a fluctuating price as the medium for such transactions or records You can simply pay a fee to have the sale of your house or your employment contract put in the registry? Having a coin or token associated with these transactions doesn’t improve functionality.

Once you accept the view that cryptocurrencies will make it easier to execute and record transactions, but are not themselves assets or a store of value, coins or tokens have as little inherent value as the token used by children to establish their right for a ride on the merry-goround. The firms that perform the transactions will have a value, just as credit card companies do, but that doesn’t mean that the coin linked to the service will have anything but a momentary value.

8) Can you make cryptocurrencies KYC and AML compliant?

Cryptocurrency exchanges within developed economies all have some form of AML and KYC compliance. There are some AML compliant cryptocurrencies but my sense is that the ones that promise complete anonymity are far more popular. It appears that Bitcoin and most clones are not quite as anonymous as once advertised, but it also takes some effort to de-anonymize. So, if you are trying to hide from your partner how much you paid for the Rangers playoff tickets, you are pretty safe. However, if the authorities were interested in your particular transaction, they are likely to be able to figure it out as well.

Outside of DM economies it is likely that KYC and AML are not observed meticulously. Public blockchains record these transactions so they are not invisible, but they are harder to track than those made within organized DM exchanges with strict KYC and AML vetting. The question is whether the coexistence of a legitimate DM core and potentially shady non-DM spokes (or maybe a shady core and legitimate spokes) is feasible in the long term. My conjecture is that the coexistence will break down and that there will be a growing distinction between cryptocurrencies that operate fully within the global financial system and those that facilitate outside the system transactions.

Concluding comments

Cryptocurrency technology is likely to serve as the basis for executing asset transfers and storing the record of transactions and contracts. Mining, anonymity, and the distributed ledger are not relevant for most of these purposes. The case is not really made that cryptocurrencies are assets and that means that the current pricing proposition is shaky. It is possible that a private issued ‘fiat’ cryptocurrency will trade alongside other assets, but it is still not clear what would give it value.

The underlying proposition is like the Marxist interpretation of history. The intellectual breadth and audacity are breathtaking. The ability to think through ex ante how a new, decentralized currency asset could be constructed and maintained is remarkable. But that doesn’t mean that the underlying premises are correct, or that it solves a problem anyone really worries about.

Original article and pictures take www.zerohedge.com site