Is Bitcoin or Other CryptoCurrency a Good Investment

Despite all denials of the techies, the Bitcoin continues to fly under the pressure of marketing that makes it a form of Russian roulette that benefits those who know the manipulation. Since March 26, the Bitcoin has increased from $ 973 to $ 2,795. A real explosion of prices which can only be explained by fraudulent maneuvers. It went from $ 16 billion to $ 43 billion.

But behind this surge, there are formidable manipulators who have means that are the exchanges of bitcoins of which several leaders are in prison. The founder of the world’s largest depository based in Bitcoins, now based in Zug, Switzerland, predicts that the value of a Bitcoin will surpass the million dollar mark in 10 years, taking by surprise the whole assembly and even the most Optimists in the sector. Some see the replacement of gold. We are in full delirium.

On several occasions, these dramatic increases came from the conversion of dirty money into Bitcoin. We do not know what causes these mood swings that fall quickly. Do they pose a fundamental question: Beyond the technology behind the object, from where comes the value of $ 32 billion?

No regulation of false rumors or manipulations

There is a lot of talk about the Bitcoin right now, as well as a few other crypto-currencies, but are they really good investments? Recently I read research which describes why Bitcoin are a good investment for the future. They also provide detailed analysis and data to showcase their study. So I am exploring based on that and my personal opinion on crypto-currencies.

I will divide this question into three points:

1. Are crypto-currencies really an investment?

2. What currency crypto choose?

3.Are crypto-currencies really an investment?

Nowadays, virtually everything is called an “investment”. In the case of crypto-currencies, trading (trading) and investment are again confused, even by financial professionals.

An investment is when you buy an asset that produces something, and that by extension creates income.

For example, if you buy a tractor and lease it, it will allow someone to dig to then put the foundation of a house, pull farm machinery, and much more. In exchange for the productivity of your assets, you receive an income.

The question is, therefore: does the crypto-currency produce something?

The main added value of crypto-money is that it can make anonymous transactions, so it increases economic activity (albeit generally illegal).

That said, it produces nothing tangible for you because its overall productivity is drowned in the pool of all transactions.

Your only hope is therefore that its overall productivity in the form of a currency function is growing so that you can “freak out” your crypto-currency.

Basically, crypto-currency does not produce income for you, and your only option to make money is that its demand increases.

When a profit is generated not by production but by the difference between the purchase price and the selling price, it is called trading and not an investment.

What does it actually mean that it is trading and not an investment?

Trading is speculation and it’s not complicated, 95% of people lose at this activity.

Investing is a much safer way to get rich. You simply need to be aware of what you are doing with your money, and not speculate in thinking that you are investing.

Which crypto-currency to choose?

Bitcoin? Zcash and Zcoin? SafeCoin? Syscoin?

Admitting that you understand that you are speculating, the only crypto-currency I would negotiate personally is the Bitcoin, for two reasons:

Reason # 1: Everyone knows the Bitcoin

This point seems banal and simplistic. However, it should not be forgotten that the value of crypto-currencies is based on people’s trust. Indeed they are “fiat currencies”, like the Canadian dollar, the US dollar, and virtually all currencies in the world.

People have a tremendous confidence in the Canadian dollar and particularly the US dollar, which is the world’s reserve currency. What about crypto-currencies?

How do people trust you, the Bitcoin, the Zcoin, or the Syscoin? Obviously, people have more confidence in the Bitcoin, and one can easily assume that it will only go by increasing over time.

However, there is always resistance, and people do not have enough confidence in the Bitcoin to move away from the Canadian dollar or the US dollar.

In particular, the critical point or the Bitcoin could explode in price is when people will have enough confidence to use another function of the currency: the reservoir of value.

When people have confidence in Bitcoin to use it as saving, as an entity where they can retain the value of their work, then everything will change.

But how could the Bitcoin reach this level? How to develop this trust? These questions lead me to the second reason.

Reason # 2: The Bitcoin is the only crypto-currency that has a real chance

The Bitcoin is the only crypto-currency that has a real chance of what? To become an official currency, endorsed by the government and the financial system.

A strong and unshakeable confidence in the Bitcoin can only exist if governments and the financial system give it their approval.

In fact, it seems that in Canada the government is increasingly ready to incorporate the Bitcoin into daily transactions. This is not cast in concrete, and the future is still vague at the legislative level.

One of the barriers to official currency status for Bitcoin is that the government cannot legalize a private currency, which would limit its ability to tax transactions.

Can another crypto-currency based on the blockchain possibly be adopted rather than the Bitcoin? Yes, but precisely, there lies the whole aspect of speculation: we must try to predict the future.

In summary, invest in crypto-currencies or not?

Honestly, the majority of people do not even have $ 2,000 in an emergency, according to an article I read, so I do not see myself buying Bitcoins.

In this situation, I would buy stocks, bonds, gold, and real estate well before buying Bitcoins.

So unless I have a full RRSP and a TFSA, stuffed with income-producing assets, I cannot justify buying crypto-currencies.

I understand the desire to hit a home run with the Bitcoin, the desire to make 10 times his initial bet. This may be suitable for some people, but I cannot endorse this strategy because it makes a lot more losers than winners.

The strategy to get rich that works for me and in general is to get rich in the long run, walking by walk, so surely find myself at the top of the stairs.

Aashish Sharma

The article above is quite interesting but many people do not realise you do not need to to purchase a wholw bitcoin, there are ways and means to earn bits for free completing surveys, or by investing in Trade Coin Club

David Ogden
Entrepreneur

David Ogden – Http://markethive.com/david-ogden

Crypto Asset Fund looks to raise $400 million to buy into blockchain frenzy

Timothy Enneking started a cryptocurrency fund in 2014, when the market was almost exclusively bitcoin. That's no longer the case.

The 58-year-old money manager is now aiming to raise up to $400 million for the Crypto Asset Fund, a diversified pool of digital currencies and assets that he expects to be in the tens of millions of dollars by the end of this year. Enneking filed with the SEC on Monday.

With the soaring value of ethereum, Ripple XRP and NEM, the top 100 cryptocurrencies combined are now worth more than $98 billion, according to CoinMarketCap. Bitcoin accounts for 46 percent of the total. Enneking said just six to eight months ago, the total value was in the low teens and 85 to 95 percent was bitcoin.

"We can actually now apply much more sophisticated tools to a portfolio of investments," said Enneking, who started managing money in Russia in 2002 and is now based in San Diego. "I don't think the world has seen but the pointy end of the spear in terms of what's going to happen in cryptocurrencies."

Crypto Asset is a trading fund, so it's not for the buy-and-hold investor. Enneking said that the minimum investment for the fund is $25,000 and that most of the institutions that are approaching him have between $100 million and $2 billion under management.

What Is Blockchain

The craze around cryptocurrencies stems from growing adoption of blockchain, a distributed electronic ledger that makes all transactions trackable. Banks are using it for payments and back-office functions, while companies in digital music, ride-sharing and cybersecurity are starting to use blockchain for tracking, sharing or protecting assets.

It's still very early and speculators abound. Start-ups built on blockchain are creating their own crypto-tokens and selling them to investors and prospective customers in initial coin offerings (ICOs). Buyers can hold the tokens in the hopes of price appreciation or, in some cases, use them as currency in the company's ecosystem. For example, a cloud storage company called Storj sold tokens that customers can use to buy digital storage space.

Enneking said he participated in an ICO for INTCoin, which calls itself "a next-generation decentralized currency that takes advantage of blockchain capabilities for instant transactions with a minimum fee."

'Less regulation'

As for the Crypto Asset Fund's strategy, Enneking said he's broken the market up into six pieces, ranging from the "blue chips" valued at above $2 billion all the way down to the currencies with so little value that they don't trade. There are currently four cryptocurrencies that fall into the blue chips category — bitcoin, ethereum, XRP and NEM — and another 22 in his large-cap group with coins outstanding valued at $200 million or more, according to CoinMarketCap.

Enneking spends much of his time educating investors about the market and trying to get them comfortable with the idea that crypto is just like any other asset, except it's moving much more quickly and the regulators have yet to become a presence.

That's a big part of the risk.

"It's not nearly as different as the average fiat investor thinks it is," Enneking said. "It's better, faster and with less regulation, which isn't always good."

Ari Levy

Senior Tech Reporter CNBC

If you do not have $25,000 to invest, you could go to Trade Coin Club where minimum starting investment is 0.35 Bitcoin

David Ogden
Entrepreneur

David Ogden – Http://markethive.com/david-ogden

The new cryptocurrency gold rush: digital tokens that raise millions in minutes

New York City

About a dozen rain-soaked people were crammed between the revolving doors and security barriers in the lobby of New York University’s Stern School of Business as torrents pelted down outside. All desperately wanted in to the hottest ticket in town, one that promised to make some of them overnight millionaires, if not billionaires. Among them was Dan Morehead, a former Wall Street titan turned bitcoin investor, and a dentist working on a blockchain startup who had flown in from Seoul.

“I don’t really care that you overbooked, it’s not my problem! I don’t care about a refund,” one agitated man seeking entry barked at two T-shirt clad twentysomethings on the other side, one of them clutching a clipboard.

“You can be upset and raise your voice, but we can’t change anything,” one of the gatekeepers replied.

“We have three clients down there!” another man interjected.

The clipboard holder dutifully scribbled down names. When it was my turn, she said NYU wanted to clear out the huddled mass blocking the building’s entrance: “The auditorium holds like 470 people. We have more than 500 people down there right now. NYU is calling security.”

Inside, a conference called “Token Summit” was in full swing. The event was the first to focus on a rapidly snowballing phenomenon called cryptocurrency token offerings—a new fundraising method that allows companies to raise millions of dollars in mere minutes.

The cryptocurrency world has gone mad for token offerings. These launches, popularly known as ICOs or initial coin offerings, have already raised more than $150 million this year, according to research firm Smith + Crown. They are seen as a disruptive new mechanism that could displace traditional venture capitalists from the fund raising process—a view that’s been endorsed by a coterie of brand name VCs themselves—and remake the internet’s business model with decentralized applications and cryptocurrencies. Take an outfit known as Gnosis, a decentralized prediction market, which raised $12 million in under 15 minutes, valuing it at $300 million. Investors had invested based solely on a PDF prepared by its founders (recently a firm called Brave raised $35 million in 30 seconds).

As cryptocurrency prices exploded, ICO fever gripped the over 2,700 blockchain tech enthusiasts who descended on New York in late May for a series of back-to-back industry conferences. Rumors flew about the fortunes being made, as the cryptocurrency ethereum climbed from $127 per unit of ether at the start of the week to $228 by Thursday. The head of an ethereum app development shop was said to hold 6 million ether, meaning he went from being a mere millionaire on Monday to an ether billionaire, holding $1.4 billion worth of the stuff, three days later. “Out of the 2,700 attendees there were at least 500 millionaires, and between zero to five billionaires,” said one longtime observer of the cryptocurrency scene, who wanted to remain anonymous.

Why are tokens a big deal?

The oracles of Silicon Valley say token offerings could reinvent the “freemium” business model of the internet, upending the huge centralized services—think of Facebook or Google—that have emerged. Instead of enticing users with free services, paid for by venture capital, and then eventually turning a profit by showing ads to those users, tokens offer a direct channel for capital to flow between user and the technologist.

The user would pay for a token upfront, providing funds for coders to develop the promised technology. If the technology works as advertised and gains popularity, it should attract more users, thus increasing demand for the token offered at the start. As the token value increases, those early users who bought tokens will benefit from appreciating token prices. Each token offering has different rules around the total supply of tokens and when they are released.

“This is a ‘better-than-free’ business model, where users make money for being early adopters,” write Balaji Srinivasan and Naval Ravikant, a partner at venture firm Andreessen Horowitz and the founder of investing platform AngelList, respectively. Ravikant has launched a platform called CoinList that will help accredited investors put money into token launches.

Token offerings could also correct an imbalance in the way financial rewards are distributed among technologists. Historically, the people who develop foundational technologies, such as protocols, have watched from the sidelines as others—firms that build the applications running atop those protocols—reap the riches. The Google search engine, for instance, is an application that trawls the world wide web, which is made up of a collection of open-source protocols. Yet it’s Google’s founders who are billionaires and not Tim Berners-Lee, who came up with the protocols that made not just Google, but the entire web, possible.

Cryptotokens could change that because protocol creators now have a way to be rewarded for the success of their technology, without having to create a hit application on top of it. “With tokens … the creators of a protocol can ‘monetize’ it directly and will in fact benefit more as others build businesses on top of that protocol,” writes Albert Wenger, a partner at Union Square Ventures.

This is the argument behind the “fat protocol” investment thesis: the protocols of the past were “thin” and unable to accrue financial value. The application layer resting atop those protocols were the ones to reap the rewards. But cryptotokens could enable the protocols of today to become “fat”—creating more wealth and value than even the enormously successful applications of the past. “These new ‘fat protocols’ may eventually create and capture more value than the last generation of Internet companies,” Srinivasan and Ravikant write.

Venture firms who subscribe to this theory have wasted no time putting their money where their mouths are. This is why firms like Union Square Ventures and Andreessen Horowitz have backed funds like Polychain Capital, which invest exclusively in token offerings. While the tokens are being raised for digital services at the moment—things like storage, identity management, or chat room stickers—one can imagine them being used for offline products and services someday in the future, too.

Nor are tokens limited to new projects. The chat platform Kik, with 15 million monthly active users, launched its own token last week at the conference, in the hopes of seeding an “economy built around chat (pdf).” In practice this means Kik users can earn and spend on special stickers, images, or even entry to celebrity chat rooms using the chat app’s Kin token. Unlike traditional loyalty points issued by a merchant, however, the Kin tokens are decentralized because they are issued on top of ethereum (more on that below). The Kin digital currency could exist even if the chat app vanished after issuance—although it probably wouldn’t be used very much and would be worth little.

What are tokens, exactly?

At this stage, an explainer on what tokens are, exactly, is helpful. You can think of a token offering as a hybrid between a Kickstarter campaign and a stock market flotation. On one hand, the launch lets customers reserve a product or service before it’s completed and ready for the market—that’s the Kickstarter part. On the other hand, it also gives those customers a stake in the future of that product or service; if the service gains in popularity, the token should rise in price, enriching the original users, making it a lot like getting in on a hot IPO. However, one of those analogies puts token issuers squarely in the sights of securities regulators, so the distinction is crucial. More on that later when we discuss the legal gray area that tokens occupy.

Like the rest of the cryptocurrency industry, token offerings rely on a basic circular logic: A token has as much value as its users bestow on it, just as bitcoin rises in price so long as demand outstrips supply. But token boosters say their units of digital currency are different from bitcoin in one critical respect: they are programmable, and have been coded to perform various useful functions.

Tokens issued today are built atop ethereum, the second most valuable cryptocurrency on the market. Ethereum is like bitcoin because it is a tradable digital currency, which is called ether. It’s unlike bitcoin because it was designed with its own programming language—a significant departure from, and its creators say, an upgrade over, bitcoin. This language allows people to write “smart contracts” or automatically executed agreements on ethereum. A bond, for instance, might automatically pay out its coupon, without the need for an intermediary or paperwork.

It turns out that ethereum’s programming language is powerful enough that coders can write smart contracts that issue new units of digital currency, bound by their own rules. This is what the tokens offered today are: a series of complicated ethereum smart contracts. The ethereum network itself is being used as a giant token-issuing machine. “Right now ethereum is a token factory,” says Muneeb Ali, co-founder of Blockstack, a startup working on building tools for a decentralized internet.

The circularity of cryptocurrency economics is at play again here: Ethereum itself raised capital from its users by offering ether tokens in 2014, raising $18 million. The ethereum protocol then became a staging ground for experiments in token funding: A vehicle called the Decentralized Autonomous Organization managed to raise $150 million on the promise that it would be a new form of business structure, one that automated away managers using a combination of smart contracts and tokens. It was promptly hacked for millions and flamed out spectacularly.

An ethereum-based token is to ether as a concert ticket is to a US dollar, Peter Van Valkenburgh, director of research at the Coin Center think tank, suggests. “In the real world we often use all sorts of items rather like we use cash,” he writes. “We use tickets, coupons … and a variety of bearer instruments because they entitle the holder to different things.” These customized tokens can be traded on secondary markets, like exchanges, and have their own value, independent of the price of ether.

Orange groves and securities law

While the potential of token launches remains vague, though powerful, almost everyone I spoke to at the New York conferences agreed on one thing: The US government would crack down on the offerings eventually. No one seems to think the good times for ICOs will last.

The legality of tokens hinges on something called the “Howey test,” named after a Florida company in the 1940s that tried to raise capital by selling contracts against its citrus groves—a practice that the US Supreme Court ruled was similar to a stock offering. At the Consensus conference, the debate about whether or not ICOs were like citrus grove contracts was captured by an exchange between Van Valkenburg, who argued that tokens are like products and not securities, and Preston Bryne, a lawyer and founder of a blockchain company called Monax.

“It’s like buying gold … it’s not like buying a security in a gold mine,” said Van Valkenburg. Responded Bryne, “This is complete nonsense. Everybody knows what this is. It’s, in substance and form, the sale of investments that people are purchasing with expectation of profit at a later date.”

Of course, what really matters is the regulator’s opinion. The US Securities and Exchange Commission hasn’t weighed in on the matter yet. But an SEC official who spoke at the Consensus conference, Valerie Szczepanik, who heads its unit looking at blockchain tech, sounded a note of caution, according to Reuters: “Whether or not you are regulated by the SEC, you still have fiduciary duties to your investors. If you want this industry to flourish, protection of investors should be at the forefront.”

Token boosters await official intervention with a mixture of trepidation and relief. Take Stan Miroshnik, who was a veteran investment banker with Morgan Stanley in London. He now runs a firm called Argon that corrals big investors—like cryptocurrency “whales,” adventurous family offices, and hedge funds—into token launches to ensure they’re sold out.

When a group of coders wants to raise money for their project, Miroshnik hits Slack teams, Telegram groups, and gets press in the cryptocurrency trade media to rustle up business. “Having seen the technology boom in the 90s, this is just another emerging capital market,” he says. “It needs institutional grade providers like ourselves who come out of traditional investment banks. One day Fidelity is going to show up and say, ‘I want $4 billion of that token, help me buy it.’ You need someone who can, frankly, speak their language.”

For Miroshnik, the sooner the SEC steps in, the better. “I welcome it,” he says. “It would be helpful to figure out where the boundaries are.”

WRITTEN BY
Joon Ian Wong

David Ogden
Entrepreneur

David Ogden – Http://markethive.com/david-ogden

How to get started in the cryptocurrency game

As bitcoin reaches for $2,500 again, I thought this would be a good time to let readers know exactly how digital currencies work and how to get more information if you wish to partake in this alternative investment.

There will be only 21 million bitcoins created, and as of last month, roughly 16.8 million or 80 percent of all the bitcoins have been “mined,” or created. So unlike the paper currencies in the world today, no governing body can print more bitcoin to dilute its value.

To get started, the first thing you will need is a digital wallet.

The wallet can be thought of more like a bank account, which can reside on your computer, phone or other smart device. It is always advisable to have your wallet backed up in another location so that a crashed hard drive does not wipe out your bitcoins.

There are many wallets out there to choose from, depending on your security needs and whether you wish to be an active trader or a more passive buy-and-hold investor.

Once you have set up your wallet, then you can go to one of the many digital currency exchanges to purchase a bitcoin.

Many exchanges now allow you to buy bitcoin with a credit card over the Web. Coinbase.com and Coindesk.com are two of the largest, and offer tutorials on digital currencies.

However, if you do not wish to use your bank account, there is one site called LocalBitcoins.com that allows face-to-face purchases.

Bitcoins are mined, or searched for, by using computing processing power in a distributed network to locate and solve mathematical problems to acquire the code for the “coin.”

This distributed network also provides the backbone to use bitcoin to purchase items or identify the bitcoin you hold.

There are a growing number of outlets that are accepting bitcoin for payment, including an Acura dealership in Valley Stream, LI, which offers pricing using bitcoin.

Bitpremier.com has an entire Web site dedicated to high-end Brooklyn real estate listing for $1.975 million or 809 bitcoin and other luxury items including a Peter Max print for $5,000 or 2.05 bitcoin all just a mouse click away.

As the value of bitcoin has skyrocketed, most bitcoin holders are investors, however, not consumers.

One year ago, bitcoin was trading at $525. It is now nearing $2,500, so at this point it does not make sense to purchase items using bitcoin until the price finds its level.

Like any other investment, there’s no guarantee that bitcoin will continue this rapid rise, but there are some aspects of bitcoin that point in that direction.

A bullish marker for bitcoin is that a vast majority of the planet does not know of, or is yet involved in, digital currencies, so as this news moves into the mainstream, more investors may jump in.

There are some very outlandish predictions for bitcoin’s value over the next three years due to its scarcity and a growing number of investors becoming aware. But as I said, no investment goes straight up.

As the value rises, a very important aspect to bitcoin is it can be divided into smaller parts. The smallest divisible amount is one hundred millionth of a bitcoin, and is called a “Satoshi,” after Satoshi Nakamoto, the software developer who founded bitcoin.

Remember, this is just a primer, and there are many resources out there to help you to study up on this new form of currency.

By Michael Gray

Once you have purchased you first bitcoin there is a way to continue to grow your number of bitcoin and that is to invest in Trade Coin Club which will help to continue to grow your wealth even if the price goes up or down.

David Ogden
Entrepreneur

David Ogden – Http://markethive.com/david-ogden

Will Investing in Cryptocurrency Make You Rich

Have you heard? Cyptocurrency is so hot right now. Bitcoin's price has been climbing for the better part of a year, topping $2,000 per coin for the first time in May, and rising to a record high above $2,500 — before dropping down just above $2,400 a coin as of Friday afternoon, per CoinDesk.

Those numbers mean nothing to you? This one might: If you had made a small investment in bitcoin back in 2010 — buying just $100 worth, when each unit was worth a fraction of a cent — your stash would be valued today at more than $70 million. Talk about an early retirement!

Even if you had been late to the party and bought bitcoin last year, you would be feeling pretty good. At one point, bitcoin prices were up roughly 180% for the year, as CNBC reported. Compare that with the broad stock market, which returned between 7.9% and 15%, depending on which index you look at.

Other cryptocurrencies have been on a tear as well. Ethereum, launched in 2015, is a software platform that has a cryptocurrency of its own, called "ether." Ether, or "ether tokens," hit a new all-time high Wednesday after climbing more than 35% in 24 hours, per CoinDesk. (There's also litecoin, which is similar to bitcoin but easier to obtain, more transactional, and seen as less valuable.)

So does that mean you should buy cryptocurrency today? Some say yes: One bitcoin proponent told CNBC he expects its value to keep rising and hit $100,000 within the decade. While digital currencies may seem alien now, it serves to remember that when Apple and other tech brands began gaining steam in the 1980s, people were skeptical anyone would have use for a personal computer. That story had a happy ending for early Apple investors.

Then again, hindsight can be 20/20, and just because an asset's price is going up doesn't mean it's actually getting more valuable. Just ask someone who bought U.S. real estate in 2007, or a tulip bulb during the infamous Dutch tulip bubble. If all that is driving prices to rise is hype, it's a good time to remember that what goes up must come down.

What are bitcoin and ether, exactly?

For the uninitiated, cryptocurrencies like ether and bitcoin are digital forms of money that live online, embedded in algorithms that record their movements. Bitcoin was the first major cryptocurrency, invented by an anonymous hacker known as Satoshi Nakamoto, in 2008. In a paper about the technology, Nakamoto envisioned a "peer-to-peer electronic cash system" that would let people conduct business directly, without the need of any outside institution.

The idea can be an exciting one: No more bank fees, for one, and you wouldn't need credit cards or debit cards, either. You also wouldn't need central banks or treasuries, since the price of currency would be set on the global stage by computers. Proponents of bitcoin, and its underlying technology, blockchain, hope that it could make most middlemen irrelevant by making all transactions instantly trustworthy and automated by Bluetooth.

If you needed a ride somewhere? You'd just summon your self-driving car, it would automatically read your digital wallet and take its fee, and you'd get out. It's a future that could save billions in transaction fees, protect identities and be a whole lot more sanitary. But we're not there yet, not by a long shot.

Currently, the system of using bitcoin relies on programmers to record transactions and build out what's known as a blockchain in exchange for a small bitcoin bounty. That process is called "bitcoin mining," and anyone can participate, although the reward will diminish over time

The case for investing in cryptocurrency

Cryptocurrency has come a long way from bitcoin's roots as the shadow currency favored by criminals on the Silk Road. Skepticism over bitcoin reached a boiling point in 2014, when Mt. Gox, the largest bitcoin exchange in the world, abruptly declared bankruptcy after than $460 million in bitcoin essentially disappeared.

Despite a rocky start, bitcoin has arguably entered the mainstream. For one, you can actually use it to buy stuff now. Many retailers, like Microsoft and Overstock, have started accepting bitcoin directly, and for the retailers that don't — notably Amazon — proponents have found a workaround by buying gift cards with their bitcoin and making purchases that way.

"The vast majority of bitcoin proponents are now either in finance or government," said Ian Bogost, an author, professor and game designer who has written about bitcoin for the Atlantic. "And for them, the speculative aspect is like a repurposing. The speculatists couldn’t give a shit what they’re speculating on, what the object is. Just that there is the possibility of substantial gain."

Ironically, given its roots, many of bitcoin's recent wins have been thanks to governments. Most recently, Japan voted to make bitcoin an officially sanctioned currency, and other countries like Barbados are looking into whether they should start purchasing bitcoin of their own.

Interestingly, many fans of cryptocurrency argue that the real value might not be in the currency itself, but in the technology that enables it — ways to safely and securely move value, for example, or trustworthy ways to validate identity.

"Bitcoin basically operated in obscurity until 2012, when media began reporting on its pseudonymous payments on Silk Road and it hit $1,000 before crashing," said Amanda Gutterman, chief marketing officer of ConsenSys, a blockchain studio which builds products on Ethereum. "As interest picked up, there was a desire to create more sophisticated financial products."

Bitcoin started as an experiment in monetary theory, Gutterman said, but it has already started to inspire real technology. ConsenSys, for example, is working with the city of Dubai to leverage blockchain and make the city government paperless by 2020. Because it's easier to build products around, many experts believe Ethereum could soon supplant Bitcoin.

The case against buying cryptocurrency

While the price of cryptocurrencies might be going up, there are still a lot of reasons to be wary, not least because it's virtually impossible to determine what a fair price for bitcoin or ether might be.

Part of what makes currencies and other assets valuable is that they have a history of appreciation, which cryptocurrencies do not share. Then there's the fact that people don't exactly agree on what the rules for bitcoin should be. It's not really a currency, since currencies are backed by a government, which issues them. It's also not really like a stock, either — cryptocurrencies don't report earnings or generate profits, and earnings and profits are how people try to determine what a "fair price" for a given stock might actually be.

Now, a few people have developed formulas to figure out the fair price for bitcoin: The Financial Times spoke to one anonymous London financial analyst who developed a model for pricing bitcoin based on the assumption that its "core utility value" is as the currency for shadow markets. By comparing the total amount of money that's laundered around the world with the overall GDP, he estimates that bitcoin's current price is about 238% higher than it should be. Other skeptics say that bitcoin has no real underlying value at all.

Despite being embraced by corporations and governments, bitcoin is still associated with criminal activity: When the WannaCry ransomware attack hit computers all over the world in May, the hackers involved requested their bounties in bitcoin. That means that even as some governments embrace bitcoin, others are cracking down: In Florida, for example, the state legislature recently passed a law that would make it easier to prosecute criminals who use bitcoin for money laundering.

Somewhat paradoxically, these types of criminal activity might actually be part of what's making bitcoin more valuable at the moment. Confronted with a rise in bitcoin ransoms from hackers, Bogost noted that a very natural response for a company is to buy a little bitcoin in case it happens again.

Bogost said she fears that bitcoin is particularly susceptible to monopoly — as hackers have very successfully cornered the market in the past. "We’ve seen with these sort of ups and downs, these small groups of mostly Chinese pools end up with more than 50% of the capacity. And we don’t know anything about these organizations. Are they state controlled?" Bogost said. "The moment [there is too much consolidation in the mining pools] then effectively the platform is dead, at least as a currency."

Finally, there's the possibility people are unwisely romanticizing a future without middlemen. The people who lost their bitcoin in the 2014 Mt. Gox hack are still trying to get their money back, and are unlikely to. After all, when the value of your cash is held in anonymous, poorly-understood algorithms, it's hard to hold somebody accountable if you lose it.

If you still feel like investing a small amount of money in cryptocurrency, be sure not to dip into your emergency savings. It's rarely a good idea to buy something when its price is at its all-time high. And remember that there are a lot of horses in this race: In addition to bitcoin, ether, and litecoin there's also ripple, namecoin and peercoin.

How to buy and store cryptocurrency

If you have some "play" money and want to make a bet on cryptocurrency, you should absolutely feel 100% comfortable with the idea of losing all that money. Cryptocurrencies have crashed before, often, and probably will again in the future. They're also historically expensive — if you must buy some, you might be served by waiting a bit for prices to drop, so you're more likely to get a deal.

There are lots of ways to buy cryptocurrencies, and some countries have even set up ways to purchase them via an ATM.

Coinbase is one of the more well-known bitcoin brokers, and often recommended for beginners. Coinbase allows you buy bitcoin and other cryptocurrencies by linking to your debit or credit card account. Business Insider reports that the mobile app is buggy, and banks will sometimes lock a card after making these transactions. To that end, BI recommends letting your financial institution know before trying to make a purchase.

There are a few other options, though they have less of a track record: Kraken is one reputable alternative; it has been around since 2011 and works with a wide range of traders and governments. There's also Gemini, but it is not yet available in every state.

Finally, because exchanges, even the largest ones, have crashed abruptly, it's also important to get yourself a safe place to store your bitcoin, in case your provider goes out of business or suffers a hack. These devices are often referred to as bitcoin "wallets." Ledger is a popular option.

by James Dennin

David Ogden
Entrepreneur

David Ogden – Http://markethive.com/david-ogden

How Do Bitcoin Transactions Actually Work

Whether you’re interested in becoming a developer for blockchain applications, or you’re just looking to understand what happens under the hood when you send bitcoin to a friend, it’s good to have a working knowledge of what happens when you create and broadcast Bitcoin transactions to the Bitcoin network. Why?

Because transactions are a basic entity on top of which the bitcoin blockchain is constructed. Transactions are the result of a brilliant collision of cryptography, data structures, and simple non-turing-complete scripting. They’re simple enough that common transaction types aren’t overly-complex, but flexible enough to allow developers to encode fairly customized transactions types as well. Today we’ll take a tour of the former.

As a developer, how does your bitcoin client post a new transaction to the network (and what happens when it’s received)?

What exactly is happening when you send some bitcoin to a friend?

This post will assume that the reader has a basic understanding of hashing, asymmetric cryptography, and P2P networking. It’s also a good idea to have a good sense for what exactly a blockchain is, even if you’re unfamiliar with any specific mechanics.

Bitcoin Transactions and their role in the bigger picture

Bitcoin is comprised of a few major pieces: nodes and a blockchain. The role of a typical node is to maintain its own blockchain version and update it once it hears of a “better” (longer) version. Simply put, the blockchain has blocks, and blocks have transactions.

With this simplified but accurate picture in mind, you might be wondering what exactly a transaction is made out of.

How will understanding transactions help me to become a better blockchain developer?How do transactions allow me to transfer some bitcoin to a friend?

It turns out that the answers to these questions vary based on many things. Even assuming that we’re talking only bitcoin, we can use transactions in a number of creative ways to accomplish a variety of personalized goals. Let’s start at the beginning, that is, let’s take a look a good old-fashioned pay-to-PK-hash transaction type. After all, this type of transaction accounts for over 99% of all transactions on the bitcoin blockchain.

First, let’s build a mental model. It’s tempting to think of bitcoin as an account-based system. After all, when I send bitcoin to somebody, that person receives money and I’m left with a remaining balance. In the real world though, things are represented a bit differently. Generally speaking, when I send money to somebody I am sending spending all of that money (minus transaction fees). Some of that money will be spent back to my own personal account if there exists a remaining balance. The point is that all of the money moves every single time.

How Do Bitcoin Transactions Actually Work?Save

This was somewhat confusing to me when I first saw it, so I’ll elaborate a bit. When I post a transaction, I’m essentially “claiming” an output and proving that I have permission to spend the amount of money at that output. So if I’m Bob and I want to pay Alice, those inputs are my proof that I have been given a certain amount of money (although this might just be a portion of my total balance), and the outputs will correspond to Alice’s account. In this simple case, there would be only a single input and a single output.

A deeper look into Bitcoin transactions

Let’s understand the mechanics of a real bitcoin transaction. We’ll use the image above as a reference.

If you were to cut open a typical bitcoin transaction, you’d end up with three major pieces: the header, the input(s), and the output(s). Let’s briefly look at the fields available to us in these sections, as they’ll be important for discussion. Note that these are the fields that are in a so-called raw transaction. Raw transactions are broadcast between peers when a transaction is created.

The Header

hash: The hash over this entire transaction. Bitcoin generally uses hash values both a pointer and a means to check the integrity of a piece of data. We’ll look at this more in the next section.

ver: The version number that should be used to verify this block. The latest version was introduced in a soft fork that became active in December 2015.

vin_sz: The number of inputs to this transaction. Similarly, vout_sz counts the number of outputs.

lock_time: We’ll look at this more in later articles, but this basically describes the earliest time at which a block can be added to the blockchain. It is either the block height or a unix timestamp.

Input

previous output hash: This is a hash pointer to a previously unspent transaction output (UTXO). Essentially, this is money that belongs to you that you are about to spend in this transaction.

n: An index into the list of outputs of the previous transaction. This is the actual output that you are spending.

scriptSig: This is a spending script that proves that the creator of this transaction has permission to spend the money referenced by 1. and 2.

Output

value: The amount of Satoshi being spent (1 BTC = 100,000,000 Satoshi).

scriptPubKey: The second of two scripts provided in a bitcoin transaction, which points to a recipient’s hashed public key. More on this in the last section of this article.

Transaction verification

One of the jobs of a bitcoin node is the verify that incoming transactions are correct (data hasn’t been tampered with, money isn’t being created, only intended recipients spend UTXOs, etc). A more exhaustive list can be found online, but I’ll list out a few of the important ones here:

All outputs claimed by inputs of this transaction are in the UTXO pool. Unspent outputs can only ever be claimed once.

The signatures on each input are valid. More precisely, we’re saying that the combined scripts return true after executing them one after the other. More on this in the last section.

No UTXO is spent more than once by this transaction. Notice how this is different than the first item.

All of the transaction’s output values are non-negative.

The sum of this transaction’s input values is greater than the sum of its output values. Note that if the numbers are different, the difference is considered to be a transaction fee that can be claimed by the miner.

A basic pay-to-PK-hash transaction

Bitcoin has its own custom (Forth-like) scripting language that is powerful enough to allow developers to create complicated and custom types of transactions. There are five or so standard transaction types that are accepted by standard bitcoin clients [5], however, there exist other clients that will accept other types of transactions for a fee. We’ll just cover the mechanics of pay-to-PK-hash here.

For any transaction to be valid, a combined scriptSig/scriptPubKey pair must evaluate to true. More specifically, a transaction spender provides a scriptSig that is executed and followed by the scriptPubKey of the claimed transaction output (remember how we said inputs claim previous unspent transaction outputs?). Both scripts share the same stack.

In the interest of efficiency, let’s use (official bitcoin wiki) a reference as we discuss. When you visit the link, go about halfway down to find a table containing 7 rows. This table shows how the scripts are combined, how execution occurs, and what the stack looks like at each step.

One thing to note is that, because bitcoin addresses are actually hashes (well, it gets even a bit more complicated. See ), there is no way for the sender to know the actual public key to check against the private key. Therefore, the Redeemer specifies both the public key and private key, and the scriptPubKey will duplicate and hash the public key to make sure that the Redeemer is indeed the intended recipient.

During execution, you can see that constants are placed directly onto the stack when they are encountered. Operations add or remove items from the stack as they are evaluated. For example, OP_HASH160 will take the top item from the stack, and has it twice, first with SHA-256 and then with RIPEMD-160. When all items in our script have been evaluated, our entire script will evaluate to true if true remains on the stack, and false otherwise.

All in all, the pay-to-PK-hash is a pretty straightforward transaction type. It ensures that only a redeemer with the appropriate public/private key pair can claim and subsequently spend bitcoin. Assuming that all other criteria are met (see the previous section), then the transaction is a good one and it can be placed into a block.

David Ogden
Entrepreneur

David Ogden – Http://markethive.com/david-ogden

Russia is looking to regulate bitcoin but still doesn’t see it as a currency

Russia is looking to regulate bitcoin but still doesn't see it as a currency

Russia is looking to regulate bitcoin but still doesn’t see it as a currency

Russia is exploring ways to regulate bitcoin, the country's central bank governor has told CNBC, but sees "doubts" over the benefits of the cryptocurrency and even questions whether it should be considered a virtual currency at all.

In an interview with CNBC, Elvira Nabiullina, governor of the Russian Central Bank, explained that she views bitcoin as a digital asset rather than a currency, and this is the way it should be thought about with regards to regulation.

When asked whether the Russian Central Bank is looking to regulate bitcoin, Nabiullina said that the authority is "analyzing" the possibility and needs to "understand more about this internalization of bitcoin and our regulatory systems." She added that there are "risks" with the cryptocurrency.

"We don't consider that bitcoin can be considered as a virtual currency. It's more digital assets with the regulation of assets," Nabiullina told CNBC in a TV interview.

The central banker did not elaborate on what specific regulation would look like and said she is in no rush to put any policy into place. The governor said that the central bank does have doubts about bitcoin.

"We have some doubts, we don't see some huge benefits from introducing digital assets in our economy," Nabiullina said.

Bitcoin recently hit a record high of $2,791, according to data from industry website CoinDesk, marking around a 180 percent rally year-to-date. There's bullishness in the market with some predicting the price could go as high as $6,000 this year and even $100,000 in a decade.

With surging prices and a market capitalization of around $38 billion, governments are becoming increasingly interested in ways to regulate the digital currency, especially as more retail investors are getting involved in the market.

Japan recently passed a law to legalize payments in bitcoin which helped boost the price, with major trading volumes now coming from the country.

The stance of Nabiullina marks a changed view from Russian authorities who have been trying over the years to ban bitcoin. If Russia somehow regulates bitcoin, this could potentially affect the price, especially if more investors get involved in the asset.

Sean Walsh, a partner at Redwood City Ventures which invests in bitcoin and blockchain companies, said that further regulation could boost the price of the cryptocurrency and get rid of the handful of "bad actors" using it for illegal things.

"I agree with the view that for retail and professional investors greater regulatory structure is very supportive because it adds to the legitimacy of the whole network," Walsh told CNBC in a phone interview.

Taxation plan?

Still, it's unclear where Russia plans to go with bitcoin regulation. The country's Deputy Finance Minister Alexey Moiseev recently said the authorities hope to recognize bitcoin and other cryptocurrencies as a legal financial instrument in 2018 in a bid to tackle money laundering.

"The state needs to know who at every moment of time stands on both sides of the financial chain," Moiseev told Bloomberg in an interview.

"If there's a transaction, the people who facilitate it should understand from whom they bought and to whom they were selling, just like with bank operations."

The Russian Central Bank's Deputy Chairwoman Olga Skorobogatova has also reportedly revealed plans to tax the cryptocurrency.

"(Digital currencies already circulating in Russia will see) certain regulations with regard to taxes, monitoring and reporting, as a digital commodity," Skorobogatova said, according to news agency Interfax.

Blockchain in focus

Bitcoin has traditionally been known to allow users to make payments and money transfers anonymously. So it may seem that any taxation policy from the authorities could be difficult. But Walsh said some developments in the bitcoin community could make this policy feasible.

Firstly, bitcoin transactions have become slower and more expensive. This makes the practice of trying to split up transactions to cover your tracks very difficult. Secondly, several start-ups have emerged that are able to use algorithms to track transactions on the blockchain – the public ledger of bitcoin activity. This could allow authorities to see who owns bitcoin.

While Nabiullina admitted there were still risks with bitcoin, she expressed the Russian Central Bank's interest in blockchain technology. Because of the way blockchain technology can create a tamper-proof ledger of activity, many major banks are looking into how it can be used for tasks such as trading.

"I think it's more important to understand (the) benefits of new technologies … like blockchain which is on the basis of bitcoin," Nabiullina told CNBC.

David Ogden
Entrepreneur

Authors :
Arjun Kharpal Technology Correspondent
Geoff Cutmore Anchor, CNBC

David Ogden – Http://markethive.com/david-ogden

Is China Waking up to Ethereum

On May 27, Huobi, one of the three leading bitcoin exchanges in China alongside BTCC and OKCoin, officially integrated support for Ethereum trading. The Huobi development team announced that users will be able to trade Ethereum starting from May 31.

In its announcement, Huobi revealed that the company has come to a consensus to integrate support for Ethereum due to its exponential growth, high market liquidity, stability and increase in the demand toward Ethereum in both China and internationally.

Local sources including CNLedger reported that Huobi’s integration of Ethereum was an important milestone for the Chinese Ethereum community and market as the market liquidity for Ethereum within China was substantially low due to the lack of support from local exchanges.

Previously, exchanges including OKCoin did express their enthusiasm toward Ethereum and hinted at the possibility of integrating Ethereum support in the near future. In fact, OKCoin representatives told CNLedger that OKCoin has been planning to list Ethereum and that the company plans to integrate Ethereum at an appropriate time.

Thus, it is likely that other major bitcoin exchanges such as OKCoin will soon integrate Ethereum support following the footsteps of Huobi, which serves millions of users in China alone.

Although Ethereum has been enjoying an exponential growth in Asian markets including Japan and South korea, Ethereum is relatively unknown to the majority of Chinese cryptocurrency traders that have been investing in bitcoin and Litecoin. Cryptocurrency traders have only begun to take interest in Ethereum after the formation of the Enterprise Ethereum Alliance and the Ethereum Foundation’s visit to the country.

Earlier in May, Consensus Systems (ConsenSys) head of global business development Andrew Keys attended the Global Blockchain Financial Summit with other members of the Ethereum Foundation including Ethereum co-founder Vitalik Buterin. Prior to the Global Blockchain Financial Summit, Keys and the rest of the Ethereum Foundation visited Ethereum communities in Beijing, Shanghai, Nanjing and Hangzhou.

Keys discovered that the Ethereum adoption throughout China has been increasing at a rapid rate. Large conglomerates have started to build applications on top of the Ethereum protocol and universities have been researching into Ethereum’s potential within the finance market.

Even government-owned companies including the Royal Chinese Mint, the subordinate unit of China Banknote Printing and Minting, have started to utilize Ethereum to digitize the RMB. Keys explained that the Royal Chinese Mint is currently utilizing the ERC 20 token standard and Ethereum smart contracts to digitize the RMB.

More to that, CryptoCoinsNews also reported that Ant Financial, the subsidiary company of e-commerce giant Alibaba, is also utilizing the Ethereum protocol to develop various applications and platforms. Ant Financial is the company behind the $60 billion financial network Alipay, which is used by 450 million users in China.

Keys noted:

“The services provided by Ant Financial and its affiliates cover payment, wealth management, credit reporting, private bank and cloud computing. Ant Financial is experimenting with Ethereum technology to improve their global payment platforms.”

The rapid rise in the demand toward Ethereum and the adoption of the Ethereum smart contract technology could allow China to become one of the larger Ethereum exchange markets in the world. At the moment, South Korea is the largest Ethereum exchange market with over 40 percent of the global market share. If China continues to sustain such growth rate, it will see its Ethereum market outpace other regions.

Ethereum Foundation members including Vitalik Buterin are actively encouraging companies and users in China to utilize the Ethereum protocol to build decentralized applications.

David Ogden
Entrepreneur

Author:Joseph Young

David Ogden – Http://markethive.com/david-ogden

The Cryptocurrency Market Is Growing Exponentially

Bitcoin dominates over other digital currencies today, but the data suggests its market share will drop significantly in the next few years.
When it comes to the future of money, there is a growing consensus that cryptocurrencies are set to play a major role. One cryptocurrency, in particular, has entered the public lexicon as the go-to digital asset: Bitcoin.

But the cryptocurrency market is significantly more complex than the public lexicon might suggest. And while there have been plenty of studies examining the role and future of Bitcoin, there have been few that explore the broader cryptocurrency market and how it is evolving.

Today that changes thanks to the work of Abeer ElBahrawy at City University in London and a few pals who have examined the cryptocurrency market as a whole and say that it is significantly more complex and mature than many had thought. The evolution of this market even bears a remarkable similarity to the evolution of ecosystems in many other areas, providing some insight into the way the cryptocurrency market might change in the future.

First some background. The big challenge with digital currency is to prevent unauthorized copying. Cryptocurrencies use two mechanisms to prevent this. The first is to publish every transaction in a public record and to store numerous copies of this ledger online in a way that allows them all to be automatically compared and updated. This prevents double spending—using the same bitcoin to buy two different things.

The second mechanism is to protect the ledger cryptographically. Every update collects together a range of new transactions and adds them to the existing ledger. But to do this, the earlier version of the ledger is first frozen and encrypted.

The new version of the ledger—called a block—includes the encrypted copy of the earlier ledger. Anybody can use this encrypted data to generate a number that can be used to check the veracity of the block. However, it is extremely hard to generate this number computationally in an attempt to game the system. It is this feature—that the blocks are easy to check but extremely hard to copy—that secures the system.

Of course, as the ledger continues to be updated, new blocks must be created, piggybacking on the old ones and creating an unbroken chain of blocks. Hence, the term blockchain technology.

Bitcoin is by far the most famous of these cryptocurrencies. It is also among the oldest, having first emerged in 2009. But it is by no means the only cryptocurrency. So an interesting question is how the cryptocurrency market is evolving.

To find out, ElBahrawy and co analyzed the behavior of 1,500 cryptocurrencies that have emerged since 2013 and say that some 600 of them are actively traded today. They say this market has recently entered a period of exponential growth and is currently worth $54 billion. (By comparison, the total amount of money in the world is about $60 trillion.)

But while this cryptocurrency market is growing rapidly, ElBahrawy and co show that certain aspects of it are stable. For example, the number of active cryptocurrencies has remained about the same since 2013 as has the market share distribution, which follows a well-known power law.

The team also shows how this distribution can be reproduced using a standard model of evolution in which they plug in figures for the rate at which currencies emerge and die away.

This power law distribution occurs in a wide range of systems. For example, the same law describes the size of religions, of languages and even of wars (by number of deaths). In none of these systems is there are any favored religion or language or war. But all things being equal, they all form this type of distribution.

The fact that size distribution of cryptocurrencies follows the same law is significant. It implies that as far as the market is concerned, all currencies are essentially the same. “The fit with the data shows that there is no detectable population-level consensus on what is the ‘best’ currency or that different currencies are advantageous for different uses,” say ElBahrawy and co.

Whether that is true is up for debate. Various critics have pointed out a number of technical limitations associated with Bitcoin, and this has inspired a new generation of cryptocurrencies, such as Ethereum. Whether this will influence the market remains to be seen.

While this exponential growth is ongoing, Bitcoin’s market share is falling. The top five biggest currencies—Ethereum, Ripple, Litecoin, Dash, and Monero—now account for 20 percent of the market. And the trend for Bitcoin is clear. “This would predict Bitcoin market share to fluctuate around 50 percent by 2025,” say the team.

Another factor in the market is that cryptocurrencies aren’t used only as currency. Bitcoin is also widely used for speculation and can also be used for nonmonetary uses such as timestamping.

For many of these applications there is a clear benefit to having a single currency that everyone agrees on. “While the use of cryptocurrencies as speculative assets should promote diversification, their adoption as payment method (i.e., the conventional use of a shared medium of payment) should incentivize a winner-take-all regime,” say Bickell and co.

But experience with other ecosystems suggest that this is by no means certain to happen. For example, a single computer operating system has never been able to outcompete all others, regardless of the ruthlessness of its deployment. Neither has any human language or religion or fashion wiped out all others.

That’s not to say it can’t happen. But unless there is significant external manipulation of this market, the likelihood is that there will be significant diversity in the cryptocurrency market for the foreseeable future.

David Ogden
Entrepreneur

David Ogden – Http://markethive.com/david-ogden

Bitcoin Price Officially Doubles That of Gold

Bitcoin Price Officially Doubles That of Gold, Experiences Minor Correction

Until May 26, Bitcoin price remained at around $2,550, demonstrating a value that is double that of gold.

Gold is being traded at $1,267 in most major markets. For two straight days, from May 24 to May 26, Bitcoin was being traded at a price that is double that of gold, in the $2,600 region. In other Bitcoin exchange markets such as Japan and South Korea, Bitcoin price peaked at $4,000, demonstrating a price that is three times higher than the value of gold

Since then, Bitcoin price has experienced a minor correction from its strong rally and upward momentum. Bitcoin price dipped below $2,400 earlier today, stabilizing at around $2,350.

Factors driving the value

Analysts have attributed Bitcoin’s price correction to the strengthening of the US dollar and the strong performance of global stock markets. Bloomberg analysts specifically noted that the weakening oil market has led to an increase in the value of the US dollar. Although US stocks stumbled as markets closed this week, major stock markets recorded all-time highs and a strong six-day rally throughout this week.

“Markets ultimately found the renewed deal among OPEC and friends underwhelming. Essentially, the market consensus seems to have come around to a view that regardless of what effect on global inventories the deal may have for now, OPEC and its partners have little insight as to what to do later on,” said Sberbank strategist Cole Akeson.

Previously, the strengthening of the US dollar led to an increase in the demand toward Bitcoin in leading Asian Bitcoin exchange markets such as China, Japan and South Korea. China, in particular, was heavily affected by the performance of the US dollar as it influenced the value of the Chinese yuan and ultimately, the demand toward Bitcoin.

When the Chinese yuan weakened, local Bitcoin exchanges experienced a surge in daily trading volume and orders.

Overall, on a weekly basis, Bitcoin price has still recorded a 20 percent increase, which is a staggering increase in short-term value for a $40 bln financial network and digital currency. Seven days ago, Bitcoin price averaged at $1,900 in most major markets

Reasons behind the explosive growth

As Cointelegraph previously reported, there exists a few reasons behind the explosive growth and increase in demand toward Bitcoin while the demand for gold has remained relatively low over the past few years.

Bitcoin offers key advantages over gold: transportability, high liquidity and absolute proof of ownership. Bitcoin’s high liquidity is especially important for casual traders and conventional investors who can’t afford to hold investments in the long run. There could be investors purchasing Bitcoin to avoid economic uncertainty and financial instability.

In the upcoming weeks, as scaling sees progress and Bitcoin regains momentum, Bitcoin price will most likely recover and potentially achieve its previous all-time high price.

David Ogden
Entrepreneur

Author:Joseph Young

David Ogden – Http://markethive.com/david-ogden