BitPay Accepts Bitcoin Cash

Although we have used Bitpay I didn’t realize it was available for brick and mortar physical transactions since we’ve never done any.   On that end it puzzles me how on earth anyone would ever use them?

Bitcoin can take minutes and even hours to confirm!  Can you imagine waiting at the restaurant held hostage because “your transaction is unconfirmed?”.  This is the advantage fiat processing still has.

But, really I think Bitpay should rebrand to use currencies that are actually usable for instantaneous transactions at retail or restaurant.

They should be using a currency like Ripple or Lumens which is nearly instant.  There are a few currencies that have these properties but any Bitcoin or Ethereum derivative is simply not going to cut it in my opinion.

Personally I don’t know a single person who has or would use any of these coins for payments, we all reach for the cash, debit or credit.  These are people like me, who are crypto enthusiasts but we also value convenience and what works.  And I think a lot of the cryptoworld is stuck in a dream world that simply doesn’t exist.  Now, for us in IT we and the customer can often wait over night for the transaction to be confirmed, but at a grocery store or restaurant neither the seller or customer would be impressed.

 

Federal Reserve Says Bitcoin Cannot Replace the US Dollar

The new chief of the San Francisco branch, of the privately held, Federal Reserve Bank has stated that Bitcoin cannot, and will not ever replace the US Dollar.  First of all, they are doing a fantastic job and understand their market and duties.  They cannot step into this job and say anything else and expect to keep it.

I get it, Bitcoin is printed without supposed backing, although it is backed by a lot of physical hardware assets and electricity.  Fiat currency, especially the US Dollar is printed and floated without any controls or restrictions.  Well, actually, the only control and restriction is that there is none.  The Federal Reserve prints at will and on demand, without limitation or backing of any sort, and they have long abandoned the gold standard.

The fact that the Federal Reserve would comment at all on this matter and mention Bitcoin, to me, is very telling that it is very much a possibility.  When you have this much money put into something that is being traded worldwide, every second, and such an ecosystem I think it is an excellent contender to the US Dollar and fiat currency in general.  Remember, fiat is backed by nothing as well and printed without any limit.  Most cryptocurrencies actually are limited in how many coins can be mined or minted at any rate.

Cryptocurrency is currently at a $421 Billion USD market cap and I think it won’t be long before it is in the trillion dollar range.  This is ultimately the worst nightmare for any central banker with so many competitors, of course your number one priority should be outlawing them and shutting them down.

On that end the Fed is right to do it and is doing their job well.  However, for people who don’t essentially control the fiat financial system, we would do well to root for cryptocurrency as an alternative system.  I think both systems can survive and work together, but if fiat pushes it too much, I think there may be a digital currency revolution that far surpassed the digital rights movement of the late 90s and early 2000s that caught the RIAA and MPAA by surprise.

Wikileaks Shutdown by Coinbase

Apparently Julian Assange’s Wikileaks merchant account on Coinbase was shutdown.  This is not at all surprising since PayPal, VISA, Mastercard and the banks did the same thing to him/them in the past.  In all fairness I don’t think Coinbase is to blame, aside from the fact they are a US based company and under the jurisdiction of the US of course.

PayPal came out and admitted they were forced to close down Wikileaks account, and I am certain the same thing has happened with Coinbase.

They have no say in the matter when the US government comes knocking.  Coinbase even recently had to give out information to the US tax department (IRS).

Of course users can still directly pay and donate to any wallets that Wikileaks controls.  As of now he lists addresses for Bitcoin, Litecoin, Ethereum, ZCash and Monero.  This is where things will heat up if he were to have a centralized currency like Ripple or Stellar Lumens.  The US government could possibly have those accounts in XRP/XLM frozen since they are a US based company.

This comes down to the wider issue of privacy, rights and freedom online and how cryptocurrency can prevent persecution for political reasons.  It also stands to reason that entities based in the US have very little say when the government comes knocking.  Coinbase and PayPal couldn’t have said no to the US government or by doing so they would be in seriously hot water.

I always advocate having some IT resources out of the reach of PRISM countries for reasons of privacy and freedom.  One of my current favorites are Singapore and Hong Kong in Asia.  Hong Kong I place particularly high value on because it has the British based system, yet it is under the protection of China.  Hong Kong is less likely to be influenced by a foreign entity than a smaller country like Singapore.  A good example of this is how Edward Snowden miraculously made it out of Hong Kong as a wanted fugitive.  Surely, Hong Kong was pressured and asked to hand him over, but somehow it never happened.

There are positives here, it looks like some brave entities in Europe have stood up for Wikileaks and at least for now, in France, Germany and Iceland there are some banks, foundations and even a University who are providing him access to the fiat system.

Just Keep Hodling Your Cryptocurrency Coins!

As of the time of this writing on 2018-04-15 coins have started a rally just before the weekend and they’re all up.  Could it be that there is some pumping going on from Soros, Rothschild and Rockefeller?  Or could it be an emotional reaction to their announcements that they will invest in crypto?

Coins are up between 3-16% at the time of this writing with the big news being that it looks like Bitcoin has strongly cleared the $8000 mark and is hanging there fairly well.  We are back to where we were later last year.  Could this be the next leg up of a bull run? No one can be sure since only the whales and FUD and FOMO can control the market but I’ve been hodling.

Ethereum, Ripple, Litecoin to me are key indicators of something big possibly heading our way.

 

2018-04-15-CoinsGoingUp

Trezor Hardware Wallet to Support Bitcoin Cash

A maker of hardware wallets for cryptocurrency has recently confirmed they will add support for Bitcoin Cash.  I’ve also been an advocate of not using these even before the Ledger Nano hack came out.

I suspect that some will lose their currency or at least have to try to recover it based on confusion over the two.  I really think it’s a bad idea since most currencies have no built-in protection to sending into the abyss to a non-existent address of another blockchain.

 

Swiss Researchers Forecast Sideways Trading and Downward Pressure on Bitcoin for 2018

They have based it on Metcalfe’s law which says at this point that Bitcoin could lose another 27%.  The group also cites the part I agree with, in that so far cryptocurrency prices are mainly driven by Bitcoin which means Altcoins (other than Bitcoin) have risen and fallen in direct correlation.

Where I am not sure if I agree or disagree is their theory that a lot of this is driven by fear in the news.  While I am sure it is, if the fear is unfounded why should bad news reflect on the long-term valuation?

A sensible market would be wise to react to say the hacks that have happened to Ethereum or the fact that illegal content has been inserted into the Bitcoin Blockchain.  That is bad news that has relevance since these issues potentially threaten the integrity of the entire blockchain.

While we’re on the topic of Metcalfe’s law, since cryptocurrency is a completely new and largely irrational market can we trust this is a valid predictor?  I am not aware that any other traditional models have successfully called any of the major events in cryptocurrency.

I do agree it was time for a significant correction but the same has happened in commodities and stocks before, yet the stock markets keep moving (albeit with a lot of money printing and manipulation-is that what regulators mean by regulation for cryptocurrency? :) ).

Only time will tell where things head but I do think that currencies that are efficient, secure and easy to use will stand the test of time (which admittedly are very few and I cannot think of a single one that solves all of the issues just yet).

Bitcoin Down 53%? Time to panic or time to be happy?

We’ve got to put this all into perspective when people come panicking and asking if you’ve sold all of your Bitcoin.  Just hold, the chart isn’t a lot different than a lot of stocks or commodities.  Let’s speak in terms of the chart since May of 2016.

 

BitcoinMay-2016-toApril-01-2018

Let’s first look back to May 2016 where it was worth about $423 USD.  Is today’s $6974.84 USD so bad?

How about April 20, 2017 whereit was worth $1216 is that so bad compared to today?

The time that makes people nervous is when Bitcoin went on a bullrun around November 1st, 2017 and was worth around $6700 USD to an all time high of around $19500 on December 16th.  I would expect like with any stock that there will be a digestion period or a pullback.

Am I worried yet?  No, unless Bitcoin drops below a year ago’s $1000 why would anyone worry?

Bitcoin on top of that now owns about 50% of the market with this drop so it has shown resiliency and leadership.

It’s not time to panic, it is time to hold steady and wait for the next bull run.  At the end of the day government policy can’t stop Bitcoin.  There will always be a country where it is legal and exchangeable.  If a blanket ban happens people will start trading directly with Bitcoin for other goods.  There’s no way people who have invested thousands of dollars in hardware and power will be throwing these coins away or walking away from them.

The Bitcoin “Bubble” May Pop But Rise Again

I know the news is in full panic mode and for partially good reason.  Not only has the market shrunk and fallen but it appears new investors are staying out.  The average investor in my opinion is still on the sidelines and they will be until things become more clear.

With that said I am HODLING and not panicking…….well except for ICOs based on Ethereum ERC20 Tokens like Finom, Tron, Bitclave, Bloom, all of who appear to have produced nothing so far.  In all fairness it takes time but my appetite for ICO and tokens is saturated.  I truly feel 99% are scams that will never produce anything and therefore the return will in the end be 0.  This is because those tokens are just an investment in what is often a bad idea or an idea that will never be executed or completed as advertised.   So for your tokens, I say it is time to panic and rightfully so.  That being said I am HODLING those too but wouldn’t hesitate to unload most of them should there be a good opportunity for return (unless I still believe in the project).

For cryptocurrencies that are usable and have real value I believe they will rise again just like the stock market regardless  of what happens.  There are a lot of remorseful people who sold their Bitcoins and Litecoins at very low levels when things weren’t looking up.  In all fairness in this new market it’s hard to be sure where things will end.

But I’m of the opinion that I will hold for years if necessary, the same discipline one should use for commodities in the stock market (unless an underlying valuation aspect has significantly or permanently changed).  From that perspective I think cryptocurrency is here, so there is demand, and it will continue to grow and be more popular.  The stock market has had far worse happen to it and recovered (however as a fan of Jim Rogers I do believe this next crash that Wall Street is due for may never recover or not for a long time).  Much like cryptocurrencies, we see the market on Wall Street can be artificially manipulated up or down.  I believe the same players are using these tactics in cryptocurrency, such as similar stock market scandals where the elite and wealthy trick people into selling short while they buy it all and sell high later on.

I am long on cryptocurrencies which involve and have a minimum bureaucracy that just get things done.  I’ve said it before but simple changes shouldn’t be debated or discussed, if a currency isn’t functioning properly then if the block size or time needs to be changed just do it!  Some things needn’t and shouldn’t be debated if they are necessary.  This is again where I disagree with hardforks and why they shouldn’t be possible.  If there is really an ideological split then the team who disagrees should start their own currency from scratch.

In reality though we just need teams around that know business, IT and security rather than expert marketers and sales people.  I think the industry will naturally head in that direction inevitably as a result of both regulation and genuine issues with the way things are done now.

For one, as a business it is still hard to integrate cryptocurrency and insecure (more on that in another article) but the revolution will come.  If the community does it, then the majority will benefit but if a government, bank or other large corporate entity does it, it will not benefit us.  So it’s time to check ourselves, pack up, roll up our sleeves and get to work!

300Billion in Market Cap Lost in Cryptocurrency in 2018

Now before we either all panic of HODL our funds I think it’s time to take a step back.  I don’t think cryptocurrency is going anywhere regardless of the bad news and government threats.

But with that said let’s take an even further step back and ask what has worked, what hasn’t worked and why has this happened to the market?

There are a lot of factors but I’ll speak about the ones that I think are most significant.

Bad News

The news is key here because a lot of family and friends are worried that all of us crypto holders have lost all of our money.  Even with Bitcoin around the $7-$10K mark, unless you bought in at the end of last year you’re still probably doing very well.  In general the market for most major currencies is up well over what it was in the first 3 quarters of 2017.  However, there is no denying that the charts look a little bearish but I think there will be a breakout in the coming months.

Government/Finance Manipulation

Much like the news, government and big financiers are having a big impact.  We know hedgefund investors have poured in billions.  Whether by intention or not a lot of them could be pulling money out of certain currencies to create an artificial crash and panic selling.

Too Many ICO Scams

I used to feel the word scam was used too liberally in the digital age of many honest IT companies.   However, in terms of ICO even the Ethereum Founder, Vitaly Buterik says 90% of tokens on his network are scams.  This is a very rational reason that will have a huge chill on investment. I would say blame a good portion of these problems on Ethereum honestly.  The unregulated and wild wild west of ICOs have brought government wrath and regulators banging on the door of all crypto stakeholders.

Lack of Common Sense and Proper Business and IT Practices

It is very clear to me in looking at how a lot of teams and ICOs operate that a good portion of people holding power in the cryptoworld have no clue.  If they did a lot of common sense things would be happening and they simply aren’t.

Such as Coinbase’s decision to open itself and its investors for huge losses and liability by selling Ethereum ERC20 Tokens.

The very idea of “free for all” in the cryptoworld reminds of the 90’s of the wild wild west of the World Wide Web and the lessons I thought we all learned.  Admittedly, and clearly, a lot of people have forgotten or were not old enough to be around for that.

I could say more but it’s so clear that essential business and IT practices have been thrown to the wind.  This is a huge impact on a lot of the issues the cryptoworld has been facing.

The Coming

I am still very optimistic about the long-term crypto outcome, but there are a lot of self-created and external factors at this moment.  I do think it is temporary but a dot bomb in crypto will certainly be repeated and appear.  The currencies and teams who didn’t learn from the 90’s will likely be the first ones swept away, leaving way for the next generation of cryptocurrency that simply just works for people and business.

We Need A Better Coin Now!

Cryptocurrency today as of the time of this writing is in a bit of a flux and identity crisis.  Part of this is due to a well directed campaign in the news via government and banking entities.  However, I will always give credit where it is due and many of the flaws that have been pointed out by these entities are completely true.  In fact, from a business, security and IT standpoint I find that most cryptocurrencies are almost impossible to use.  There are coins that individually address “some of the issues” but I have never seen a coin or team that “just seems to get it”.

Whether it’s how an ICO is run, basic functionality, security, privacy, getting out information it seems apparent to me that the vast majority of teams and coins do not sufficient combined IT and Business Knowledge to make things work.

There are just so many issues with a lot of the top coins that could kill them, let me name a few in no particular order.

Speed – 99% of cryptocurrencies are extremely slow taking minutes, hours or several days to complete a transaction!

Expensive – A lot of times you can spend a small fortune just sending a small amount of coin to someone (you could spend $100 to send $5 of coins with some Ethereum tokens for example)!

Security – Most coins are by default completely insecure.  Any coin that has a public ledger is insecure and has 0 privacy.  This allows for replay attacks and all kinds of nasty things.  It also means your activities are easily tracked and traced.  Imagine if your competitors can see exactly who is paying and who you are paying including the full amounts?  It would put your business at a huge disadvantage.  Having “public, permissionless blockchain” such as Bitcoin, Ethereum, Litecoin etc..  will mean the coins can never be secure when the whole public is involved.

Hardforks – Most coins are easily counterfeited, hard or softforked where basically anyone can copy an entire coin and just rename it and call it their own, while confusing and devaluing the original coin holders.  This should never be able to happen just for the reason of sanity, continuity and integrity.  There have already been scams like the BTG Scam and replay attacks.

PoW/Mining – It is absolutely crazy that mining still exists, as cool as it originally was, mining is now a hindrance in many ways to the cryptocurrency community.  Not only is it wasteful in terms of energy resources, it is unsustainable in both environmental, monetary and functional terms.  Returns are so slow with most major coins that it is almost not worth it unless your power is cheap or free.

To top it off why on earth should we let transactions be controlled by “miners finding the next block”.  It doesn’t secure the network anymore and that is because coins like Bitcoin were created before ASICs and assumed “no one would party would hold more than 10% hashing power”.  Of course single pools in China have way more than 10% power and so do some mining farms possibly.  This means that pools and large farms could work together to defraud people by sending false transactions and confirming it among themselves.  By the time the scam is realized the parties who initiated the scam would already have escaped with the money.

Mining also leads to centralization, the very thing that cryptocurrency was meant to avoid.  This inevitable because as difficulty increases, only large corporate or government players with deep pockets can continue.

The same applies with running full nodes, large organizations will be the one running them.

Usability – Most coins are unusable because they are slow and insecure but to make it worse there’s more.  The current coins are not easily integrated in a secure way.  You shouldn’t have to run a full Litecoin, Bitcoin or Ethereum node on a huge mega server with tons of RAM and HDD just to create receiving addresses and receive payments.  This not only inefficient, it is insecure because the same computer that generates the receiving addresses is usually the one that holds the wallet/funds.

To top it off you can send to a wrong or non-existent address and lose your money forever with virtually all currencies.  Blockchain is just a big database, couldn’t some query be done to make sure the address actually exists?!  On top of that there is no feedback, send by e-mail or notifications by e-mail you always need to keep your wallet open to notice.  It would be much easier if these different functions are kept separate.  However this is a problem too because most cryptocurrencies are admittedly not secure if you don’t sync the entire chain.  And that’s another issue, syncing is a huge issue with coins like Ethereum it is extremely slow and takes a ridiculous amount of CPU cycles.  Imagine paying someone from Craigslist in person  and one of you says “hold on mate sorry I have to wait for my wallet to sync for hours or days!”.