Day: July 4, 2017

Recently, Pieter Levels, the founder of popular web and mobile-based platforms such as Nomad List, offered insights into the growing bubble-like ICO market.

Levels revealed that he was personally contacted by five developers that pitched an idea for an initial coin offering (ICO) for his most successful product Nomad List, which provides detailed guides to the best cities for digital nomads based on various factors such as cost of living and internet speed.

A message received by Levels read:

“Hey, why not create NomadCoin, a digital currency for nomads. People would be able to pay for co-workings, coffee, hostels etc. I can help you. You can even raise funds through an ICO / crowdsale.”

The above mentioned tasks such as buying coffee and paying rent can already be done with existing products and technologies such as cash and bitcoin. Thus, the ICO of such a project will not solve any existing problems and is not necessary to the industry. In response, Levels explained:

“The Ethereum/blockchain-based pump and dump scam: launching coins that don’t solve any problem but getting your audience to buy in. This is the 5th person who pitched this to me including Ethereum’s ex co-founder. It’s another dark internet scam robbing people of their money.”

For the most part, Levels is accurate in that the vast majority of ICOs and tokens being launched on top of the Ethereum protocol have minimal use cases and purposes. More to that, most blockchain-based products that are raising millions of dollars at extreme valuations don’t even have actual user bases and completed products; only untested code and pre-alpha software.

However, like most analysts, Levels understands that not all ICOs are “modern-day ponzi schemes.” Some projects that ran ICO campaigns have demonstrated working products that can be utilized to solve real problems such as bringing liquidity to the cryptocurrency sector.

For instance, upon the completion its ICO, TenX was criticized for lacking a viable product. Today, the company released a video of a TenX digital currency credit card user purchasing products at stores such as McDonalds with cryptocurrencies including Dash.

Bancor, the second most successful ICO to date that raised more than $150 million in its ICO, was criticized by bitcoin and security expert Andreas Antonopoulos and Augur co-founder Joey Krug for its 40 lines of code and untested software. Krug wrote:

“Dear God the free market just gave $150M to something we found out didn’t work in practice in the Augur beta.”

In essence, the Bancor Protocol offers a liquidation method for investors and traders looking to buy into ICO tokens. It balances buy and sell volumes and standardized the ICO market. However, some criticisms toward the Bancor Protocol were in relation to the establishment of yet another intermediary between the Ethereum protocol and ICOs because traders can simply utilize Ethereum’s native token Ether to purchase ICO tokens directly without the necessity of ICO tokens.

The Bancor Network itself and its liquidation platform is useful and wanted by the ICO market. The only issue with the ICO is that it the Bancor platform does not really need its own native token to function.

The same can be said for TenX. Its cryptocurrency-based credit card brings a high level of liquidity to cryptocurrency users that are aiming to use digital currencies to cover day-to-day expenses. Still, there exists no purpose for the distribution of TenX native tokens to fuel its network and product.

Despite the claims of most companies running ICO campaigns, admittedly, the ICO market has transformed into a bubble. Every startup and blockchain project are trying to run ICO campaigns to secure capital, often times more capital than they even need to take advantage of the growing market.

Bitcoin has reclaimed $2,600 once again as Litecoin pushes over $50 in renewed momentum.

Bitcoin P2P marketplaces are showing mixed results as new records mix with disappointing slumps.

The iDice ICO has ended after raising a total of 2.5 million USD in 2 weeks. iDice is the worlds first mobile gambling app powered by Ethereum. There are only a total of 1.5 million tokens in circulation. The iDice beta has already generated a total of X player profits and X bets all within … Continue reading The Hottest Investment for July

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The world of Bitcoin and cryptocurrency has seen many Ponzi schemes over the years. One of the more notorious cloud mining scams was called GainBitcoin. Its founder, Amit Bhardwaj, is a wanted man, despite there being no outstanding warrants for his arrests. He is still active in cryptocurrency to this very day, though. In fact, … Continue reading GainBitcoin Ponzi Scheme Operator Amit Bhardwaj Takes out ads on The Hindu’s Front Page

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These days bitcoin continues to outperform many traditional assets as the decentralized currency has become the premiere digital asset class of the 21st century. There are many ways individuals can obtain bitcoins and hold the appreciating investment themselves. However, there are also other traditionalized methods where people can invest in cryptocurrencies through trusts, self-directed IRAs, hedge funds, and other investment vehicles.

Also Read: Markets Update: Bitcoin Bulls Are Back Testing Key Resistance Levels

In 2017 Bitcoin Visibility Increases Among Mainstream Investors and Traditional Fund Managers

Bitcoin’s performance as an asset class continues to outshine traditional investments like stocks, precious metals, and the bond market. Just recently the well-known mainstream financial publication Bloomberg called bitcoin an “exchange traded fund (ETF) on steroids.” Furthermore, people have found that there are other ways to invest in bitcoin which are similar to traditional individual retirement accounts (IRA), or stock market investments. This includes cryptocurrency based investment trusts, exchange-traded notes and many more types of methods.

So far in 2016 and the past six months of 2017 cryptocurrency funds have soared in value considerably compared to traditional assets. Some of these traditional investment rails just offer bitcoin while others offer a basket of cryptocurrencies that can sometimes outperform one single digital asset if managed properly.

BK Capital Management

The BKCM investment asset fund was created by CNBC host and investment analyst Brian Kelly. The firm specializes in the macro-economics of digital assets and offers mainstream investors exposure to currencies like bitcoin. BKCM says its managers are fluent in “traditional capital markets, blockchain assets, and technology experience.” According to the company’s website, the fund focuses on “liquid exchange” digital assets. Kelly has been an active proponent of bitcoin and other emerging digital assets throughout many of his broadcasts on the network CNBC.

Grayscale’s Bitcoin Investment Trust

The Grayscale Bitcoin Investment Trust (GBTC) is a fund run by the Digital Currency Group’s (DCG) Barry Silbert. The DCG founder Silbert has been well known among investment circles when he created the brokerage firm Secondmarket and since then focused his efforts towards cryptocurrencies and blockchain startups. The publicly quoted GBTC is an easy way for investors to get exposure to bitcoin and can be purchased through traditional self-directed IRAs. The Bitcoin Investment Trust has outperformed the S&P 500, gold shares, and treasury bonds by gaining 220.59 percent this year. Moreover, GBTC shares trade at a premium compared to an individual purchasing bitcoin traditionally through an exchange. Alongside this, Grayscale also offers an Ethereum Classic fund that is similar to GBTC. The ECX Index is eligible to be held in an IRA, Roth IRA, and other investment accounts.

Ark Investment Management

Ark Innovation (ARKK) is a fund that invests in innovative technologies and companies, as well as funds like GBTC. Ark investment says they see the internet, mobile, and other technologies transforming the world’s business models. “We’re believers in bitcoin, the currency, and Bitcoin, the technology platform,” explains Ark’s Founder and Chief Investment Officer Cathie Wood. Currently, Ark has four ETF’s for investors to choose from which include the Industrial Innovation ETF, Web x.0 ETF, Genomic Revolution Multi-Sector ETF, and the Innovation ETF.

Self-Directed IRAs

There are other ways investors can add bitcoin to their portfolios like self-directed IRAs. The California-based company Bitcoin IRA allows you to purchase bitcoins or ethereum with traditional IRAs or a 401K. The firm’s offering is a modest interest bearing account that utilizes the high returns from ETH and BTC markets. Other self-directed IRAs can allow people to purchase bitcoin as well through companies like the Millennium Trust, Entrust Group, and Pensco. “Technology is having a transformative effect on our daily lives, and the alternative investment industry is no different,” explains Millennium Trust.

Mainstream Investment funds and IRAs That Include Bitcoin Are Prospering

There are many other ways mainstream investors can gain exposure to bitcoin rather than purchasing it directly, and more are popping up in great number. Just recently Bitcoin.com reported on Britain’s largest online trading platform, Hargreaves Lansdown, which has announced it will allow its customers to invest in bitcoin. The firm commands over £70bn of investors funds and will allow its 876,000 customers access to the decentralized currency. With cryptocurrencies performing so well and gaining in value exponentially many more mainstream funds and IRAs are likely to include digital assets for their customer’s portfolios. While there are no ‘official’ Securities and Exchange Commission approved ETFs at the moment there are still plenty of similar investment options in 2017.

What do you think about these funds and IRAs? Let us know in the comments below.

Images via Shutterstock, Pixabay, BK Capital Investments, GBTC, Google, Steemit, and Ark Invest.

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

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On July 1st Dentacoin launched its first public token presale. At the moment (03/07/2017), there are over 1K contributors to this new token. No big investors; solely crowd power. For people from the community this is news, since it promises a more equal distribution and no price manipulations.

Dentacoin is a new Ethereum-based token, which has taken over 3 years of team work between dental industry specialists, macroeconomists, developers and marketing specialists from UK, BG, IND, USA, DE, NL, F, RU and SA to create the concept and bring it to the public. This Saturday, July 1st at 8 a.m. GMT started the Exclusive Hard-capped Presale of Dentacoin.

The Dentacoin Foundation is an innovative structure, targeting the improvement of the global dental industry. The team behind it is in the process of developing various tools with different target audiences but devoted to the same purpose: to improve dental care worldwide.

These tools are the basis of a unique value-creating distribution mechanism: 40% of the total DCN supply will be distributed among millions of people who contribute to the mission of Dentacoin. This will result in creating millions of wallets, generating mass distribution and activating the crowd to use this token. The potential user group of Dentacoin extends far beyond the closed Blockchain community.

Due to DCN being forever limited in amount and thus – inflation-protected, the value is expected to increase in time, giving the involved parties even more benefits. This important feature is backed by a powerful deflation mechanism. The distribution strategy allows only a fixed percentage of the total pre-mined Dentacoins to be distributed annually.

In order to create a stable environment for a long-term increase in value, Dentacoin Foundation plans to implement a unique approach of indirect profit sharing for all Dentacoin holders. Once a year, the Dentacoin Foundation will buy back DCN from the market with 50% of its annual profit. Thereby, the global DCN supply will decrease and in return, the demand and the market price will increase.

This revolutionary approach is the fruit of solid macroeconomics understanding within the Dentacoin Team, which is already valued by many of the potential investors in the crypto market.

Last but not least, the potential for a fast global distribution is extremely high, as Dentacoin covers the requirements for a currency to be recognized as global. Next stop: General Healthcare? In order to join the Presale and contribute to Dentacoin Mission, please visit: https://www.dentacoin.com/presale/

In yesterday evening’s analysis, we noted that the bitcoin price seemed to have turned around – at least from a long-term perspective – and that we might see a return to the overarching upside momentum throughout the late session in Europe and as the Asian session kicked off early morning on Tuesday. We did see … Continue reading Bitcoin Price Watch; A Quiet Day Ahead

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An early bitcoin startup CEO looks back on the evolution of regulation in the US, arguing it has had a lasting negative impact on the industry.

Source

Hello and welcome to News BTC’s Market Outlook July 4. DASH/USD DASH continues to grind higher retirement pulls back, as the $170 level has offered support again. We crashed into the $180 level, and a break above the top of the candle for the day should send the market towards the $190 level. Ultimately, I … Continue reading DASH/USD and LTC/USD Technical Analysis July 4, 2017

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Diane Reynolds just penned an article in defense of the Lightning Network (LN) as an off-chain, decentralized payment solution. This article appeared in response to the piece written by Jonald Fyookball and a Reddit post by jstolfi. Both pieces claimed Lightning Network cannot remain decentralized over the long term for mathematical reasons. 

Also read: Delaware Passes Bill Recognizing Stock Trading via Blockchain Technology

Fyookball’s article specifically used various examples to demonstrate decentralization is unlikely to manifest over the long term. Diane responded more directly to a challenge issued by jstolfi. The user’s challenge said:

“There is a very simple way to shut criticisms like Jonald’s and mine. Just provide a hypothetical scenario for 10 million users with topology and numbers — how many customers, merchants, and hubs, how many channels and payments (per day or per month) per user for each pair of those user classes, and how much bitcoin each user commits to his channels, etc. Then anyone who doubts the viability of the LN can simulate it with those data, and conclude for himself. Any takers for this challenge?”

Reynolds’ Critical Analysis of Jstolfi’s challenge Using a Simulation

Reynolds responded with answers to the challenge. In the first part of Reynold’s analysis she mentions she ran some ocaml code to simulate a Lightning Network environment topology with 10 millions users. She used her model to create a situation that is reminiscent of proper lightning network transaction details. For instance, the payments were of all sizes, big, midsized and micro. She also made her code search for the least expensive channel for payments to be accepted.

One of the primary arguments for decentralization via Lightning Network is the notion that plenty of redundancy on the network de facto creates decentralization. Reynolds argues that so long as nodes can hop between and connect with different nodes the system cannot become centralized. She said,

A first possibility for edges is to use the binary representation of numbers from 0 to 9,999,999 (requiring 24 bits) and include an edge whenever the two bit sequences differ by exactly 1 bit (a Hamming graph). All nodes would be reachable with (many) paths of at most 24 hops, and 12 hops on average.

Analysis Continued

In her analysis, Reynolds describes the state of the network after simulating 400,000 transactions. At this point, Reynolds navigated through various transactions on the network in order to answer the original challenge. She determined that there were very few transactions failures across the network. However, she also said that there could be a problem if she continued doing simulations on her program.

“Among the 7 million channels used routing the almost 400,000 successful payments 294508 (4%) have 90% or more of the value on one side of the channel. This does not appear to be a problem yet, since this is still only 0.4% of the total available 70 million channels, but it might become a problem with longer runs of the simulator.”

Regardless according to Reynolds, it was a non-problem. There did not seem to be a significant amount of unbalanced transactions. There could perhaps be problems on the network simulation, but she could not pinpoint any issues.

Conclusion

In her final thoughts, Reynolds suggested that 10 millions users can be sustained on the network in a decentralized fashion. However, she mentions that this is not how Lightning Network is supposed to function, but that it is technically possible. She does mention that if anyone has stronger computing hardware, they can run the simulation with even more users and more channels.

Do you think Segwit will end up being centralized or decentralized if implemented? Let us know in the comments below.

Images via Shutterstock and Medium.com

Bitcoin is cool, and you know everyone wants in – even the ones who say they don’t. Show the world how cutting-edge you are with a bitcoin T-shirt, hoodie, bag, key-ring, even a Trezor hardware wallet. Shipping all over the world, quality merchandise and, of course, a payment system that makes people say “wow!”

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