Tag: cryptocurrencies

Feb. research: Pt 2

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As I am pretty pressed for time, I am going to do a little less in depth overview of other coins to watch in the short to mid term. You will need to do a little reading for this one.

Eternity (ENT)

Market Cap: 1.4$ million

Price:  0.35$ / 0.00003519 BTC

Purpose of coin: Payment platform.

Website: http://ent.eternity-group.org/

Quantum RL (QRL)

Market Cap: 70.6$ million

Price:  1.36$ / 0.0001350 BTC

Purpose of coin: Communication layer to tackle quantum computing threats.

Website: https://theqrl.org/

Edgeless (EDG)

Market Cap: 73.6$ million

Price:  0.89$ / 0.00008902 BTC

Purpose of coin: Ethereum based casino.

Website: https://edgeless.io/

Vibrate (VIB)

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Market Cap: 45.1$ million

Price:  0.27$ / 0.00002712 BTC

Purpose of coin: Community for musicians, venues, events, gigs, and contact info for music.

Website: https://www.viberate.com/

Deep Onion (Onion)

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Market Cap: 51.7$ million

Price:  4.95$ / 0.0004886 BTC

Purpose of coin: Privacy coin using TOR.

Website: https://deeponion.org/

Unify (UNIFY)

Market Cap: 2.8$ million

Price:  0.15$ / 0.00001555 BTC

Purpose of coin: Crypto ecosystem for crowdfunding.

Website: http://www.unify.today/

Sugar (SGR)

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Market Cap: 0.5$ million

Price:  0.14$ / 0.00001465 BTC

Purpose of coin: Crypto exchange.

Website: http://sugarexchange.io/

Nebulas (NAS)

Market Cap: 330.2$ million

Price:  9.30$ / 0.0009118 BTC

Purpose of coin: Crypto search engine.

Website: https://nebulas.io/

Icon (ICX)

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Market Cap: 1.7$ billion

Price:  4.64$ / 0.0004546 BTC

Purpose of coin: Decentralised network connecting real world businesses with blockchain.

Website: https://www.icon.foundation/

Maid Safe Coin (MAID)

Market Cap: 220.1$ million

Price:  0.48$ / 0.0000484 BTC

Purpose of coin: Data Storage network.

Website: http://maidsafe.net/

Two other coins with high potential are Cardano and NEO. There is a lot of information online about both of these projects. As these two projects are major coins they are more sound but offer longer hold positions.

  • Information presented here, including any ideas, opinions, views, predictions, forecasts or crypto picks, expressed or implied are for informational and educational purposes only. The coins posted should not be construed as personal investment advice.

“What is Bitcoin?”- The Beginning

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Sitting on the plane en route to Beirut, I have some time to think of the hundreds of questions I have been asked about bitcoin and cryptocurrencies.

One of the questions I am constantly asked is, ‘What is bitcoin?’
I often start by talking about the financial crisis in 2008.
That crisis played a central role in showing how fragile the present day monetary system is. It exposed how governments are willing to cover the biggest gamblers when they lose. It pointed at the elephant in the room: debt. It displayed how there is a need to fix that problem.

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I talk about Satoshi Nakamoto and how his nine page white paper outlined his vision of a decentralized, peer to peer electronic cash system, whereby every transaction is recorded on a public ledger visible to everyone on the network.
I continue on and talk about how it is mined and how there will only ever be 21 million coins….
And about that time, a lot of people say, ‘but what is bitcoin?’
Then, I say something, that does zero justice to bitcoin. I say something like, it is the internet for money.
And then, many people say, ‘oh I get it’, ‘It is like facebook or apple’.
Well, I guess if I have to start there,  I will.
If, we think bitcoin is to apple, then we should look at one of its’ most successful products; the iPhone.
Ok, so what was before the iPhone? Tha

nk goodness most people who ask me the bitcoin question were born when pay phones were in use.

I ask, do you remember rotary phones and how you hated anyone or any taxi company that had a 9 or a 0 in their phone number? Yeah.
Then, I query, do you remember the first time you saw a portable phone? It had a big battery bag, a clunky appearance an

 

d a huge antenna? Yep. Whoever had one, could talk for a very short amount of time for a hefty price.

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Well, think a little bit after that. Soon enough, there were those cheap Nokia phones with grey screens and the pull out antenna. Battery power improved, the number of contacts you could store on the phone increased and you could talk for extended periods of time the calling time extended.
Then suddenly, there was this explosion of developments. The flip top, texting options, the orange, blue or green screen…. and games!
I still remember the first time I saw a phone that could capture a photo. Although grainy, it was a miracle. It ranked amongst human achievements like the creation of fire, the wheel, the number zero, landing on the moon or mayonnaise.
After that, all stops were pulled. We got higher pixilation, memory, games, videos and the holy grail: the internet became available to our phones!
We are now heading into the iPhone 8, 9, 10 and on and on.
So, now I drop the bomb.
I explain that bitcoin is not like the iPhone 7, nor the 8 plus. No, bitcoin is that old rotary phone.
That’s how much development stands in front of us. We can’t see that far down the road. But, like any road,we know it is there.
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One day, our grandchildren will probably sit around us like dinosaurs in a museum, in awe. They will probably say, “Grandpa, tell us again… did you really own one whole bitcoin?”
So what is a bitcoin? In essence, it is the financial leg of a much larger entity, which most people cannot fathom.
It is part of the Blockchain.
Now, most people ask me the real question… and you should too….
What is the Blockchain???

Mining Blues and the Law

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Over the past few days, I have been on a tremendous learning curve.

During the New Years holiday, a friend of mine jokingly said that, in the last 14 months, I have done the equivalent of a Master’s degree in crypto currency.  Everyday does seem like I am back in university. However, this time, I choose to eat the cheap ramen noodles, but not out of necessity.

Today’s blog is about scarcity, computational power, and legality.

Scarcity

At 3:00 a.m. this morning, Bitmain released a batch of  Antminer S9s, the world’s most powerful bitcoin mining machines. As I was asleep, I missed out on the sale.

https://twitter.com/BITMAINtech?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor

Later in the day, I got a tweet from Bitmain that said they would sell a second batch of machines at 12 o’clock noon.

Although I was awake for that sale,  Bitmain sold out all of the machines in under 5 (five) minutes!

What is going on? That is insanity! How could a company sell out thousands of machines in minutes? It sounds like the iPhone, Minecraft, Pokemon and the list of other hyper trending products. Keep in mind that here is no preorder selection.

However, the Antminer S9 with it’s 13.5 Th/s power is not a gadget that you can, or should, just simply plug into the wall and wait for cascades of money to shine onto you.

It is noisy. It runs at a very high temperature. It needs a clean environment, a steady supply of energy and internet connection.

Someone, or some groups are buying up all of the machines at an incredible rate. They are creating scarcity in the mining market that has not been seen so far.

And then, there is China…

First they allowed free market style investment in crypto currencies, mining and exchanges. Then they clamped down on ICOs (Initial Coin Offers) eventually banning it.

Recently, they shut down exchanges.

Now they are preparing to regulate power consumption.

What’s next? Will they create their own governmental crypto coin?? #chinacoin ??

https://www.cnbc.com/2018/01/03/bitcoin-mining-power-usage-comes-under-government-regulation-in-china.html

They are acting as legal wizards, answering the courts of Korea in hours!

Regulations on power consumption. The water is getting deep. I will explain this thought train later.

Computational power

Now that I have a few Antminer S9s bitcoin mining machines online, I am constantly looking at the Eh/s of mining, profitability and my Th/s.

Sounds like a physics lesson.

As we learned before, the bitcoin network will reward one miner 12.5 bitcoins if they are able to solve a mathematical algorithm.

So let’s break it down. One of my machines can make 13.5 Th/s… that is basically, 13.5 trillion guesses per second to find a combination to the padlock that holds the bitcoin.

But, I am one of thousands of miners. And we all have many machines… How many guesses are we all making? At the present moment, the network is running at 1.7 Eh/s or… 1,7000,000,000,000,000,000 guesses per second.  Please remember that one hash is one guess at the combination to the padlock.

What does that mean?

Well here it goes:

  • 1 TeraHash/ is 1,000,000,000,000 (one trillion) hashes per second.
  • 1 PetaHash/is 1,000,000,000,000,000 (one quadrillion) hashes per second.
  • 1 ExaHash/ is 1,000,000,000,000,000,000 (one quintillion) hashes per second.

That is an incredible amount of information. It is almost like a lottery. However, in this lottery, there is a guaranteed winner every 10 minutes.

It’s not like guessing where to mine for gold in Peru or Indonesia.

This mining operation is real, with real calculable guaranteed returns.

When one looks at traditional mining, there are trucks, workers, pollution, disruption of local environments, corruption, destruction of indigenous people’s lifestyles and on and on.

Read all you want about how bad bitcoin mining is, but you will not find a 5 year old child working in a mine. A Chilean miner will not be in a trapped in a collapsed mine and workers will not develop cancer from their work in bitcoin mines.

Then I came across something from an economics lesson.

Metcalfe’s Law – https://www.computerhope.com/jargon/m/metcalfe.htm

Basically, the value of the network is worth the square of it’s size.

So, if I had 10 machines, the value of the network be 10^2, or a value of 100.

With 1.7 Eh/s^2 the value of the bitcoin network should be 2.89 Eh/s. I will only pretend that I, as a Kindergarten teacher, I am able to do that kind of math.

And Legality

Now this part really is interesting to me…

https://news.bitcoin.com/korean-lawyers-take-government-to-court-over-crypto-regulation/?utm_source=OneSignal%20Push&utm_medium=notification&utm_campaign=Push%20Notifications

I cannot vouch for the the firm, but their logic is sound.

Currently, the South Korean Government does not recognize bitcoin or other crypto currencies as legal tender.

This creates interference in cryptocurrency trade, as well as an invasion to people’s property rights.

So, what’s next?

As of a result, Korean lawyers are fighting to change the conduct on the cryptocurrency trading.

Because financial law is not applicable to digital currency, bitcoin should be considered as a commodity. A commodity like rice, cheese or crude oil.

That means: freedom of trading!

 

 

 

 

 

 

 

I am going to be a miner.

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Today I got an email that gave me shivers.

I was not expecting it so soon, but Bitmain sent me confirmation that my first batch of Antminer S9s had been shipped from China.

There is a long road ahead before I officially become a miner, however this is the biggest hurdle to cross.

What is mining?

In a traditional sense, governments decide when to create money and put it into circulation.

With bitcoin, transactions on the network are placed in a type of box called a “block”. If, for example, I bought a cellphone from BIC camera in Japan, my transaction would be put together with transactions that other people made at the same time.

Those “blocks” have a virtual padlock on them. Miners use special software to find a key that will unlock the block. As they find the key, they get rewarded with small amounts of bitcoin.

Finding a key can be very difficult. At the present time a miner would have to make 1,873,105,475,221 attempts to actually find a key and get the bitcoin reward. The process of discovering bitcoin in this manner is called mining.

As more miners start to mine, the network increases the difficulty depending on how fast the keys are being found.

Development of mining.

The development of mining has changed over time. On January 3rd, 2009 Satoshi Nakamoto started the first transaction on the bitcoin network, paying himself 50 bitcoin.

In the early days you could have mined bitcoin with your laptop using your CPU. Your computer only needed 45 attempts to find a key back then. However, as bitcoin became more popular, miners discovered that using gaming processing chips (GPU) were more efficient at mining bitcoin.

As the difficulty increased, the need for more powerful machines also increased. GPUs were made obsolete by FPGA chips and ultimately ASIC chips have become state of the art.

More powerful machines meant more power to run the machines. The Antminer S9 requires about 100$ of electricity a month to run. With  bitcoin at 15,000$, the Antminer S9 will hopefully be my best investment in 2018.

 

 

 

Don’t panic!

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About 14 months ago a friend asked me where I would invest my money.

I said, if I had 10,000$ that I could potentially win or lose, I would invest in bitcoin. After buying bitcoin, I would then diversify into Monero, Dash, Ethereum, Zcash, Auger and Ripple.

My difficulty at the time was finding an exchange that I could join while living in Saudi Arabia as a Canadian citizen.

As my friend had a bank account in Europe he was able to purchase bitcoin. We bought some bitcoin and started into the wonderful cryptocurrency world.

I studied each coin and platform trying to see which one had the greatest potential.

My answer was Ripple. “Ripple provides a way to connect banks, exchanges, and corporations to send money globally on the RippleNet.” I translated that into English and it roughly meant, Ripple had created an improved version of SWIFT or wire payments. I watched Ripple and saw a number of Japanese banks join Ripple. Soon banks in Europe, Central America and even my own bank in Canada joined Ripple.

At the time Ripple cost 0.5 cents.

When Western Union joined Ripple we saw the price of Ripple begin to rise. It went UP! It seemed like FOMO* to an extreme I had never witnessed before. When Ripple hit 7 cents my friend was calling every five minutes telling me to sell. I said to wait because I felt Ripple could easily be worth a dollar. In the end I sold out his share of Ripple and he walked off with 4000$ of profit.

Below is the proof.

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I held on and watched Ripple develop its price after the correction.

Not more than a month later it seemed word was spreading about Ripple. Japanese exchanges added Ripple to their markets and a large number of investors in Japan and Korea got behind Ripple.

Ripple was gaining support from everywhere. The bank of England was ‘testing’ the Ripple network. Although there has never been an official announcement, I felt that Ripple could be the vehicle to settle Brexit payments.

Ripple absolutely exploded!!! Up and up, all  the way to 42 cents!!!

Looking at the graph below you can see how the initial rush to 7 cents was dwarfed by the second wave of investors.

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At this point I put more money into Ripple. My notion that Ripple could reach a dollar was not far off. Some other friends were getting interested in this and began investing.

Over a long summer of watching other coins succeed Ripple seemed to loose support. There was no way to get out, so I just put it out of my mind and believed in my original forecast.

I kept reminding myself that on January 1st many banks announced that they would start to use Ripple for cross boarder payments.

Then it happened. With the massive surge in bitcoin and all other cryptocurrencies Ripple also got the exposure it needed. It went white hot reaching as high as 1.05$.

It makes me laugh to look back at the 7 and 42 cent levels on the graph.Screen Shot 2017-12-25 at 9.47.18.png

Bitcoin and other cryptocurrencies became the talk of the town.

Another friend invested in bitcoin and with the recent correction, he is asking if he should just get out of the market with the losses he has incurred.

Below is the graph of bitcoin and its first major correction. It could just be an incredible coincidence, but doesn’t this graph look a lot like the first spike in Ripple?

Are all these predictions about a 100,000$ bitcoin actually possible?

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Free money!

 

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I was recently asked by a friend, who is new to cryptocurrencies, “Is there only one bitcoin?”

That was an excellent question, because I didn’t even know how many versions of bitcoin have been created.

To think about it in simple terms, I explained to my friend to imagine bitcoin like the first automobile ever invented.

Although the first automobile was an amazing invention, users and developers quickly found areas for improvement.  The same holds true for bitcoin.

When a developer thinks, ‘I believe that adding lights to the automobile will help it be able to drive at night’ they do not go out and try to create a new automobile. They simply build on the original idea. The same holds true for bitcoin.

When a new development is created for bitcoin, it is called a ‘Fork’. When a fork happens, the original bitcoin is not destroyed; it just co-exists with the new coin that was created.

Much like the Model A was not destroyed when the Model T went into production.

So how many forks have there been?

This is new to me, but here you go:

Jan. 3, 2009 – Bitcoin Genesis

Dec. 27, 2014 – Bitcoin XT

Jan. 15, 2016 – Bitcoin Unlimited

Aug. 1, 2017 – Bitcoin Cash (BCH)

Nov. 1, 2017 – Bitcoin Gold

Dec. 28? 2017? – Bitcoin Segwit 2X (B2X)

How do forks work?

Here is the strange part about bitcoin. When bitcoin experiences a fork, there is a new coin created. If you hold bitcoin at the time of the fork on an exchange that supports the fork, you will get paid out one to one in the new currency.

So, for example, if you had 2 bitcoin when the Bitcoin Cash fork happened, you would automatically receive 2 Bitcoin Cash for free.

Imagine if you had 2 Model As when the Model T came out. You would get to keep your two Model As and get two Model Ts for free!!!

WOW, I love the cryptosphere!

When can I get my free money?

The B2X fork is planned to occur on December 28th.

If you want to get free B2X coins, you can do so by putting your bitcoin on an exchange that supports the B2X fork before December 28th.

By the way (at the time of this blog) B2X price estimates are around 650 US$ per coin.

If I had 3.2 bitcoin on an exchange that supports B2X, I would get 3.2 B2X coins, roughly worth 2,000$, for free.

So to answer my friend, “Yes, there is only one bitcoin.”

But, there are many more opportunities for growth, development and stability to bring this technology into our daily lives, even if we sometimes get some free money.

 

 

 

 

 

Bitcoin and its meteoric… fall?

 

 

Over the past four days we have seen bitcoin rocket into the 19,000$ range and then take a big dump all the way down to the 11,000$ territory.

If you are new to cryptocurrencies, this kind of swing would have you climbing the walls. Is it normal for a cryptocurrency to drop so much in such a short time?

The answer is yes and no.

While trying to search for an answer as to why bitcoin dropped so much, I ran across many plausible theories. However, there does not seem to be one smoking gun. Perhaps there are a few guns hanging around the room.

BTC and BCH

This again? Yes. As I noted before Coinbase added Bitcoin Cash to its exchange. However, it has come to light that the price of Bitcoin Cash rose on several other exchanges hours before Coinbase made its official announcement. This halted Bitcoin Cash on Coinbase and an investigation was launched into possible insider trading.

Of all things the crypto space does not need is even the slightest whiff of corruption or wrongdoing.

This could possibly have sent investors into a panic and made them FUD* the bed.

Whale Soup?

Recently, Bloomberg** reported that approximately 1000 people own roughly 40% of the bitcoin market. You can just run through the scenarios in your mind if you owned 100,000 bitcoin.

A whale could pump the market with volume trades and when it reached a certain level, the whale could dump. Oh no!! That would make other less experienced investors FUD their pants and trigger a panic sell. Obviously, with the money you sold your bitcoin for at the ATH (All Time High) you could buy back your position with an enormous profit.

It is a good thing that CME futures entered the market with massive shorts on bitcoin just before the price fell.

Mass Communication                              (don’t forget the M is silent)

Everyday I google the word ‘bitcoin’ just for fun.

A year ago there was almost nothing being said about bitcoin. When it hit parity with gold there were a few articles. After that there was not much focus on bitcoin. However, when bitcoin passed the 3,000$ mark, more and more attention was given to bitcoin. As it approached the 5,000$ mark, I was being given a daily history lesson about tulips and the dot.com bubbles. “The bubble of all bubbles” read one article.

Words like terrorism, illicit drug sales and tax evasion made me have 24 hour Tourette’s syndrome. I found myself blurting out words like “Paradise Papers” and “Iran Contra scandal”.

The (M)ass media was playing with the psychology of the small potatoes. When the price went south, there must have been many little investors that FUDed on the floor.

So, do cryptocurrencies drop so much in a such a short time?

Yes they do. And no they don’t.

Expect to see news about some ‘suspicious’ activity connected to this recent price plummet because something is not right in the state of Denmark.

However, there is something important to know.

Bitcoin is the gold standard for all cryptocurrencies at the present time. All cryptocurrencies will rise and fall with bitcoin. Bitcoin is connected to blockchain technology and that technology is not going away anytime soon.

So look for a rebound.

*FUD = https://en.wikipedia.org/wiki/Fear,_uncertainty_and_doubt

**Bloomberg article – https://www.bloomberg.com/news/articles/2017-12-08/the-bitcoin-whales-1-000-people-who-own-40-percent-of-the-market

Some thoughts about BTC and where it is headed in 2018.

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Mania

With the recent mania surrounding bitcoin and it’s march to 20,000$, there is no doubt that it is becoming recognized as a modern day solution to gold, as a store of value.

Unfortunately, at 20,000$, I made a transaction and ended up paying the equivalent of 26 USD for it. So, bitcoin with its popularity is not viable as a medium of exchange like dollars. It is just too expensive in its present form. I will not be using bitcoin to buy things, while it is so volatile and expensive. But, that makes me think. If I am finding the fees too high, won’t merchants, vendors, and exchanges also run into the same problem?

The answer is yes.

BTC vs BCH

So, what if anything does that mean? First off, today we saw a massive drop in the price of bitcoin. Why did that happen? Well, Coinbase, one of the biggest exchanges, started to accept Bitcoin Cash. That was a clear sign to small potatoes, like me, that the big exchanges needed to find a way to make transactions without paying massive transaction fees. Bitcoin only has 2MB of storage for its transactions. As the system gets congested, people are willing to pay more to have their transaction completed quicker. Bitcoin Cash, on the other hand has 8MB of storage for its transactions. Bitcoin Cash has 4 times the storage, 8 times faster and 8 times cheaper…

Which one would you choose to use?

And that leads to, what could possibly be in store for bitcoin very soon.

As the cryptosphere grows I can see how 8 MB may only be a short term solution. Just like Coca-cola was the granddaddy of all soft drinks, it was pushed aside by diet Coke, Coke Classic,  Caffeine free Coke and the list goes on. In a similar fashion, bitcoin is headed to more and more forks. It will be a volatile year. As the forking goes on, I can see how bitcoin will be plunged into a civil war. In the short run Bitcoin Cash has a leg up on bitcoin, Bitcoin Gold, Bitcoin B2X and others. It is no wonder, Bitmain, the worlds largest mining pool, and producer of the strongest bitcoin mining machines is behind Bitcoin Cash.

Stability and Privacy

Stability is a major roadblock to the functionality of bitcoin in the real world. By late spring or early summer we should see some stability arrive to the aid of the cryptosphere. The coins with stability should be able to rise as they will fulfill bitcoin’s downfalls. Zcash, Monero, and Dash all have the potential to become major players in this arena. A secondary area of concern is privacy. If you are a person living in an area of the world experiencing turmoil, it could be to your benefit to be able to make transactions that will protect you from religious, racial and or financial risks. Coins that offer privacy will grow in areas of the world where they are needed. Add Pivex and Verge to the previous three that I mentioned.

And…

After a period of growth, stability, privacy, and functionality should be established in the crypto world.

And is that the end of the story? What about late 2018? No kids, there is more to come.

Though I do not have magic eight ball sitting around, we can probably draw lines back to the areas of the world experiencing turmoil. Is it not too far off to imagine that nation states may start to make their own crypto currencies to lend legitimacy to them? Dubai has made it clear that they want to be the first Blockchain society in the world. It is even conceivable that nation states may start their own national mining operations. If bitcoin is the new gold… and Bitcoin Cash a better version, wouldn’t it be better to just mine for that stuff, for a considerably more reliable payout than mining for physical gold????

The Bottom Line

Congestion is pushing the market towards Bitcoin Cash

Forks will be the front line of a bitcoin civil war

Privacy and Stability will give rise to Zcash, Monero, Dash, Pivex and Verge

Watch mining grow around the world