As Bitcoin and cryptocurrencies become more popular hackers and cybercriminals will devise ever more devious ways to exploit unsuspecting users and their computers. Facebook is probably home to the largest number of technology challenged people on the planet which makes it such an easy platform to disseminate malware. According to a report in The Independent,… View Article
Archives for December 22, 2017
Merry Christmas everyone and Merry Christmas Bitcoin! JB
Ari Paul, CIO of cryptocurrency hedge fund BlockTower Capital, recently sat down with Business Insider’s Sara Silverstein to discuss the three main risks associated with investing in cryptocurrencies. 1. Investment Risks The first area of risk, according to Paul, is investment risk, by which he predominantly refers to the volatility of cryptocurrencies. All anyone has… View Article
Photography can be doubtlessly regarded as one of the most thrilling inventions of modern times. The art dates back to the 19th century, where the earliest known surviving photograph captured by a camera was taken back in the late 1820s (either 1826 or 1827). Many regard this point in time as the birth of photography…. View Article
The government of Belarus has passed new statutes aimed in part at encouraging the development of companies around cryptocurrency and blockchain.
The idea of “Fedcoin,” a cryptocurrency sponsored by the U.S. government and managed by the Federal Reserve, has been around for quite some time. “Imagine that the Fed, as the core developer, makes available an open-source Bitcoin-like protocol (suitably modified) called Fedcoin,” a Federal Reserve VP speculated already in 2015. The idea gained traction also in Europe in connection with the financial crisis in Greece, and was notably discussed in a “Eurocoin” context by former Greek Minister of Finance Yanis Varoufakis.
Earlier this year, Nobel Prize–winning economist Joseph Stiglitz said he believes “very strongly” that the U.S. could and should move to a digital currency and get rid of physical currency. While Stiglitz is persuaded that “the main use of bitcoin has been to circumvent tax authorities and regulation,” he appeared to be in favor of digital currency technology for government.
“The technology underlying bitcoin could fundamentally change the way we think of money,” said Campbell R. Harvey, a finance professor at Duke University’s Fuqua School of Business, in the Washington Post. “It is only a matter of time before paper money is phased out.”
Phasing out physical cash — the reserve of drug dealers and black marketers — would be one of the main advantages of a national cryptocurrency, according to Harvey, since it would make it far more difficult for criminals to hide and launder money if all transactions could be recorded on the government’s blockchain.
The potential for privacy isn’t considered a desirable feature for state-owned cryptocurrencies. On the contrary, as Harvey argues, the introduction of digital currencies would be partly motivated by the desire to eliminate the anonymity of cash. On the other hand, even in a future Fedcoin-like, all-electronic economy, it’s easy to predict that there would be a strong black economy on the side, powered by privacy-oriented cryptocurrencies, including bitcoin, ether, Monero and other emerging alternatives able to offer stronger privacy.
“Despite the negative press about bitcoin being used for illegal transactions, bitcoin is not anonymous, and criminals who use it often do not understand that their transactions are being recorded,” notes Harvey. In fact, while a Bitcoin address isn’t explicitly associated with its owner, blockchain network analysis can often de-anonymize Bitcoin users. To support law enforcement, companies like Chainalysis and Elliptic offer sophisticated blockchain network analysis tools and services to trace Bitcoin transactions back to their participants and de-anonymize users.
In a recent presentation, Harvey defined Fedcoin as “a digital USD currency where the complete history of all transactions is visible to the Fed via a Fed blockchain.” That blockchain technology, initially thought of as a libertarian means to escape government control, could become a killer app for governments to have complete control over the citizens, and enforce compliance and tax collection, seems surreal to say the least.
Indeed, as Saifedean Ammous, an economics professor at the Lebanese American University, told Bitcoin Magazine, “The importance of Bitcoin is that it makes monetary policy and payment settlement according to predetermined software, free of third-party control. This defeats the point of having a central bank, and is anathema to central banks’ mission, to control monetary policy and supervise money flows.”
In the presentation, Harvey cited economist Kenneth Rogoff’s 2016 book “The Curse of Cash,” which proposes to gradually phase out cash, eventually leaving only small notes and coins in circulation, and move to electronic money, perhaps “a government-run version of the virtual currency Bitcoin.”
While Rogoff is not persuaded that the “potentially disruptive” technology of today’s cryptocurrencies is sufficiently mature, he thinks a next-generation “Bitcoin 3.0” could be a precursor to a government-controlled digital currency. “If the private sector comes up with a much better way of doing things, the government will eventually adapt and regulate as necessary to eventually win out,” says Rogoff.
Ammous disagrees with this sort of argument. “The only thing central banks can do with Bitcoin is accumulate it as a monetary reserve asset. At some point, central banks around the world will start asking themselves if they might be better off holding Bitcoin, with its apolitical monetary policy, than other countries’ national currencies.”
Central banks have as much to learn from Bitcoin’s operation as horses have to learn from car engines. It’s a technology meant to displace central control of money.
“The Fedcoin idea was presented by David Andolfatto, Vice President, Federal Reserve Bank of St. Louis, at the first P2PFISY workshop that I organized at the Bundesbank in Frankfurt, 2015,” Paolo Tasca, executive director of the University College London Centre for Blockchain Technologies, told Bitcoin Magazine.
“The idea of dispensing with cash in favor of alternative, more efficient means of payments is not new. Pre-1900 utopian thinkers devoted a lot of effort to finding a way to allow people to get rid of what Robert Owen called the ‘insane money-mystery.’ In more recent years, economists have also begun to study the implications of living in cashless societies, especially referring to the role of central banks and to the conduct of monetary policy.”
Other governments and central banks are considering their own versions of Fedcoin. Sweden’s central bank, the Riksbank, is considering whether the country should introduce a purely digital form of government-backed money, perhaps using distributed ledger technology (DLT). The proposed e-krona would be a digital complement to cash guaranteed by the state, and work as a means of payment, unit of account and store of value. It’s worth noting that usage of cash in Sweden is declining, and there are indications that the country could go entirely cashless in five years.
The Riksbank isn’t the only central bank to consider issuing its own digital currency. The central banks of Singapore, Papua New Guinea, Canada and others are considering similar moves. A recent research paper issued by the Bank of Canada, which considers a possible Bitcoin standard similar to the gold standard, is especially interesting. A discussion paper published by the Bank of Finland, which describes Bitcoin as a revolutionary, marvelous economic system, could indicate that the bank is considering with interest the possibility to someday launch its own digital currency. Even China’s central bank is cautiously testing a digital currency.
“Other central banks (Bank of England, Bank of Canada and European Central Bank, among others) are studying the idea of a Central Bank Digital Currency (CBDC) as a non-ordinary monetary tool that could improve the central banks’ ability to stabilize inflation and the business cycle, and as a new payment channel that could permit tracing the network of payments and record the payment history of each individual,” added Tasca.
Another reason for governments to like the idea of a national cryptocurrency, according to both Harvey and Rogoff, is the possibility to strengthen the power of monetary policy to help manage the economy, for example by making it easier to impose negative interest rates.
Harvey notes that, were the Federal Reserve to adopt its own cryptocurrency someday, it will become a major (and far less volatile) competitor to bitcoin and other digital currencies. “In fact, it’s not clear whether [F]edcoin would want that competition, and the Fed is in a position to impose a regulatory environment that tilts the playing field,” warns Harvey.
“So watch out, bitcoin.”
The post Fedcoin Could Be Coming Soon, But Would It Really Challenge Bitcoin? appeared first on Bitcoin Magazine.
The post Belarus Legalizes Cryptocurrency Payments & Initial Coin Offerings (ICOs) appeared first on CCN Belarus, a country wedged between Russia and the European Union, recently legalized cryptocurrencies and Initial Coin Offerings (ICOs), in a move that’s set to drive private sector growth and attract foreign investors to the country, a former communist republic that’s… View Article
There’s no doubt that we will look back on 2017 was one of the most exciting and important years for the digital assets ecosystem. Together we made significant progress and are even closer to a fairer financial future. We want to thank all of our customers, our team, and the industry for making 2017 such… View Article
Two days ago, I outlined a potential BTC-USD price breakdown due the broken hypodermic trendline. Since then, the price has dropped nearly $7,000 and is showing signs of further downward continuation. Let’s take a look at the chart from the last BTC-USD market analysis:
Figure 1: BTC-USD, 4-Hour Candles, Trend Prior to Breakdown
As you can see, the price was holding on by a thread near the red, hypodermic trendline. Once it managed to break this trend, the price immediately and aggressively dropped. Thus, the market signaled the end of the current parabolic breakout. Currently, it is finding support on the parabolic curve; but on the lower timescales, it shows signs it might take one last move downward before a proper bounce occurs. Since the hypodermic trend occurred once the market broke the linear trend, there is likely going to be very strong support there:
Figure 2: BTCU-SD, 4-Hour Candles, Hypodermic Breakdown
In the event that BTC-USD sees new lows, we can expect solid support in the upper $9900s to low $10,000s. From there we will likely see a bounce leading to a consolidation period, where the market will ultimately decide if it wants to resume the downtrend or break upwards. Given the fact that we broke out of a distribution trading range, it is likely that we will resume this down trend after any potential consolidation.
Distribution is the top of the market cycle and leads to a markdown in price once the trading range is broken. However, this is all up in the air right now and we will still have to see how bitcoin handles the next phase of consolidation. For now, I don’t anticipate any radical lows ranging beyond the linear trend support shown above.
At this point, it doesn’t appear we have reached a selling climax. Although the selling has been intense, there is nothing terribly notable on the macro view of last nights aggressive moves:
Figure 3: BTC-USD, 12-Hour Candles, Macro Volume
There was a lot of volume during last night’s moves, but there wasn’t a selling climax that would notably mark what we would expect from such a fantastic drop in price. Maybe I’ll be proven wrong, but I’m anticipating lower lows in the coming days and weeks.
Bitcoin broke down out of its hypodermic trend.
It is currently finding support on its macro parabolic trend.
Another shove downward is likely, but I believe it will lead to a bounce to a medium-term consolidation period.
Trading and investing in digital assets like bitcoin and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.
The post Bitcoin Price Analysis: Expect Some Lower Lows Before the Next Bounce appeared first on Bitcoin Magazine.
The post Analyst: Bitcoin Price Can Still Rally in the Short-Term, Despite Major Correction appeared first on CCN
Alan Silbert, a long-time bitcoin investor and analyst, has predicted a “gut-wrenching correction” to occur and the bitcoin price to decline in the short-term. On December 6, Silbert wrote: Next 12 months in #Bitcoin : (1) MSM: bubble! bubble! bubble! (2) BTC keeps going higher (3) Gut-wrenching correction (4) MSM: we told you so! (5)
The post Analyst: Bitcoin Price Can Still Rally in the Short-Term, Despite Major Correction appeared first on CCN