Crypto, Bitcoin (BTC) included, is slow, expensive, and hard to integrate, cry this industry’s skeptics. While this argument has gained traction in recent years, especially as blockchains struggled to keep up with the transactional demand seen in late-2017, some aren’t all too convinced.In a recent tweet, Changpeng “CZ” Zhao of Binance explained why he believes it is economically, logistically, and socially logical for Internet-centric retailers and entrepreneurs to accept cryptocurrencies, whether it be BTC, Ether, or otherwise, as a bonafide payment method.Related Reading: Why This Billionaire Investor is Betting on a Project Bringing Bitcoin Payments to StarbucksCrypto As A Medium Of Digital Exchange Makes SenseZhao, a long-time participant in the crypto and fintech industries, recently noted how it doesn’t make sense to him that many Internet (non-brick and mortar) businesses don’t accept cryptocurrencies for payments.For any internet (non-physical) based business, I don’t understand why anyone would not accept crypto for payments. It is easier, faster and cheaper to integration than traditional payment gateways. Less paperwork. And reaches more diverse demographic and geography.— CZ Binance (@cz_binance) February 2, 2019In fact, Zhao, formerly of Blockchain.com and Bloomberg, noted that in his eyes, cryptocurrencies are not only more cost-effective, but easier to integrate and faster in terms of transaction finality, when compared to traditional payment gateways. Moreover, traditional digital payments, especially those routed through rent-seeking Silicon Valley darlings like PayPal, often require copious paperwork & KYC, while lacking the global accessibility that Bitcoin provides.The Binance chief’s comment comes after Jason Smith, a crypto investor, claimed that BTC is already used as a form of digital money. In an extended rant on Twitter, Smith noted that merchants on Dream Market, a darknet-based market, actively want to accept BTC, quipping that they have no intentions to liquidate their digital assets for U.S. dollars. Smith even went on to cite anecdotal evidence he has gathered to note that thousands of users on Gum Tree, Australia’s Craigslist equivalent, accept cryptocurrencies, even while the broader market has collapsed.And as such, the industry participant concluded that BTC “already is money,” and doesn’t need an exchange-traded fund or product of caliber to surmount that goal.Bitcoin Adoption In Commerce Is NearingCZ’s comment regarding crypto adoption with online merchant comes after Pat Chirchirillo, a financial advisor at Philadelphia-based McAdam Financial, lauded this nascent asset class for being much cheaper than processes executed via the legacy financial system.As covered by NewsBTC previously, Chirchirillo, who has seemingly expressed no love towards Bitcoin previously, noted that he was charged $10 by Bank of America for having made more than six transfers between his savings and chequing account within a month’s time. Although this wasn’t directly the fault of the Wall Street giant, as the fee was imposed by finance legislature, the financial advisor noted that the incumbent financial ecosystem was 3,233% more expensive than cryptocurrencies, which would have dinged him with ~$0.3 in fees for those same transactions.While cryptocurrencies have yet to see monumental levels of adoption on Internet portals/stores, this facet of this budding industry has already garnered some semblance of backing. BitPay, the foremost crypto-centric payment service provider based out of Atlanta, recently released its 2018 debrief. In a press release, the company revealed that over the course of 2018, it processed over $1 billion in payments for the second time, while also setting a transaction fee record by securing clients like Dish Networks, HackerOne, and the State of Ohio.Speaking on the matter with a positive tone, Stephen Pair, the chief executive at the long-standing blockchain upstart, stated:“To process over a $1 Billion for a second year in a row despite Bitcoin’s large price drop shows that Bitcoin is being used to solve real pain points around the world.”And with the launch of Bakkt — which isn’t only a Bitcoin futures provider, but a multi-faceted upstart too — being right around the corner, many believe that adoption in commerce will only continue in the years to come. The rise of the Lightning Network may also catalyze on-the-fence merchants to accept BTC, as the scaling solution, which recently passed a notable milestone, can facilitate instant, low-cost, and scalable Bitcoin transactions.Featured Image from Shutterstock
Archives for February 3, 2019
CCN had the opportunity to speak to FIO Protocol founder David Gold. The Foundation for Interwallet Operability is Gold’s brainchild and part of a larger effort to create a user-friendly blockchain experience.
The most notable aspect of FIO is that it provides decentralized naming services for blockchain wallets. In layman’s terms, it’s like a decentralized DNS for cryptocurrency.
Okay, that doesn’t work for some laymen. In the same way that DNS makes it so you don’t have to know the IP address of every website you want to visit, FIO will allow people and wallets to register human-readable addresses.
Gold says the idea occurred to him when he was still working as a managing director for Access Venture Capital in Westminister, Colorado. He handled many of the blockchain-oriented deals for Access.
“There’s certainly a lot of people who have their fingerprints on it now, but it was my idea. […] It was really through that experience [as a venture capitalist at Access Venture Capital] that the idea for the FIO Protocol came to be. I saw what was going on with blockchain and crypto. On the one hand, I was like, Wow, this is a big disruption that could be as big as the world wide web was. But at the same time I also felt similar to how I felt in the early 90s – while it has amazing potential, the technology has a long way to go. One of the big areas that jumped out at me was usability.”
Blockchain and Wallet Agnostic
The naming service runs on a completely independent network. The security and operation of this blockchain will be funded with FIO tokens. Still in beta, FIO plans a public beta in the third quarter of this year. A number of wallets and one exchange have so far joined the foundation, however.
The composition of the foundation is important to its success. The reader will surely recognize at least one of the names on this list:
Coinomi and Mycelium alone are two of the most popular cryptocurrency wallets in use today. ShapeShift is the trailblazer of the concept of non-custodial token swapping.
“Without a solution like FIO, the visions around blockchain will never happen. They’ll never get beyond what I call ‘crypto gold.’ An alternative speculative investment. We’ll never get beyond that unless these usability problems are solved. And that’s what this cryptocurrency industry consortium is all about. It’s designed with industry players from the start.”
Industry Cooperation Pushing Usability Forward
Paul Puey of Edge wallet, which is a member, praised Gold and FIO (in a separate interview with CCN) for their approach to enacting the new convention. By approaching recognizable names in the industry and seeking co-operation, FIO is ensuring that the protocol will achieve some degree of success. FIO functions as a non-profit. Protocol usage will support the foundation and further development. Various services have costs associated with them, such as registering a new human-readable address. The majority of the funds will go to the nodes who support the network, while a smaller portion will go to the foundation.
“The FIO Protocol is a non-profit foundation. The FIO protocol will be completely open source and tokenized with the FIO token. The foundation will receive a share of the initial tokens out of the gate, so it will have a tokenized value from the beginning. The foundation also receives a small percentage of all of the inbound commerce. Most of the tokens that get sent out to pay for FIO services go out to the nodes on the delegated proof-of-stake network, but a small percentage goes to the foundation. So the foundation will always have a source of income to operate with.”
From The Dotcom Boom to the Crypto Gold Rush
Gold started his career as a NASA employee. During the dotcom boom, he was a successful entrepreneur. From there, he moved into venture capitalism with a firm called Access Venture Partners. After a long career, he stumbled onto crypto through his work as an investor.
When he looked at the way the technology works, he realized that the prospect of actually using cryptocurrency is daunting for new users, and decided to do something about it. Thus, FIO was born.
He didn’t go in with blinders on, however. Attempts have been made in the past to do what FIO does. He noted that a problem with the Ethereum Naming Service is that actual protocol-level changes had to be made in Ethereum for it to work.
Gold says of ENS:
“The other (maybe more important) problem with Ethereum Name Service is that it only works on the Ethereum blockchain… users will never be comfortable with a different user experience for different tokens/coins in their wallet.”
FIO will work without any changes to any existing blockchain. That’s the whole point.
Gold says that most in the crypto space have a “build it and they will come” mentality that doesn’t always match up with reality. This is why he chose to integrate industry partners from the beginning.
FIO Introduces Crypto ‘Pull’ Transactions
The FIO protocol introduces another important feature that cryptocurrency lacks: the ability to construct a “pull” transaction. Crypto’s design keeps users in control. However, FIO lets payment requests go directly to the wallet.
In this way, merchants and customers can be sure that the correct addresses are being used. There is an attack vector in cryptocurrency where very similar addresses can be covertly inserted to a user’s clipboard. If the user initiates the transaction after that point, they lose the funds unless they’re going to the correct address.
This vulnerability is eliminated in a world where such “pull”-type transactions are possible. Instead, the merchant sends what amounts to an invoice to the user’s FIO-enabled wallet and the user has the option to then send the funds. The protocol also makes refunds a lot easier by enabling “transaction context” for every blockchain.
“When we talk about ‘user-friendliness,’ we include merchants as users. The protocol will be integrated by crypto payment services as well. The FIO protocol won’t solve every issue merchants face, but it will solve a bunch of them. With merchants, it’s got to be easy to do a refund. They’ve got to be sure that very few users who pay with crypto have problems.”
The FIO protocol will be widely available when it eventually launches. Blockchains themselves don’t have to do anything to implement FIO. Wallets can make use of open SDKs from FIO to correctly implement the solution. Open source and decentralized, any wallet, exchange, or merchant that wishes to make use of it will be able to do so. Foundation members will be first to have the software ready for live beta testing later this year.
‘Most of What’s Happening in Blockchain is in Centralized Services’
Gold told CCN that the cryptocurrency space is years away from the vision it started with. This sentiment is shared by many crypto veterans at this point, some of whom predicted much higher market valuations and others, like this reporter, who once truly believed that by now we’d be able buy coffee with crypto just about anywhere.
“In fact, we’re in a world where most of what’s happening in blockchain is in centralized services. […] If crypto just keeps being an investment asset that has no real value in commerce, this is never going to go anywhere. The usability issue, again, is a core part of what has got to be solved for this to happen.”
Gold is doing his part. Some notable payment processors and other industry players like Coinbase have yet to cast their lot in with FIO. After studying the protocol, it’s hard to believe their doing so is anything but inevitable.
Featured Image from Shutterstock
A mysterious trader who made international headlines when he turned a $200 million profit trading Ethereum in a single month has agreed to speak with CCN regarding his latest investments and his outlook on the crypto market in general.
With his identity hidden from authorities, the trader goes by the moniker 200M_trader. An early investor in crypto who started buying Bitcoin in 2011, 200M_trader brought the hefty sum of $55 million to the table when he started trading Ethereum and managed to turn that into $283 million within 30 days. CCN got in touch to ask about how hard the crypto winter has hit him, his recent $4.5 million investment into the Roobee platform, and what his take on the bear market timeline is.
Crypto and the Bear Market: Keep an Eye on Halving
We asked the $200 million dollar man how he came to be involved in crypto originally:
Bitcoin. It all started with it in the end of 2011. I believed in this technology and that it could change the economic relationships throughout the world. At that time it was very difficult to buy Bitcoin with fiat money. I had to buy a lot of graphics cards and to mine it. Some amount I purchased privately through ads on Bitcointalk.
When asked about the current bear market, he stated that he had sold enough to live on during the last rally, taking Bitcoin profits at $10,000 – $12,000 and Ethereum profits at $4500 – $1,200, and claims to now be unaffected by the current market conditions.
I already had an experience of a big downfall of the market from 2013 to 2015, when the market rapidly went down at Bitcoin’s price of around $1,200. That time I did not sell anything. I have not made the same mistake this time. However, the downfall is always a possibility to stock up again, which I do now as well. The market has cycles, and it’s important to remember this during both the rapid growth and the strong downfall. It’s also just a matter of time when the big players will enter this market well and truly. We have this time for now and we need to act.
His thoughts on the timeline of the bear market were equally compelling, predicting a swift and even measurable end to crypto winter.
The next Bitcoin block reward halving will serve as an additional trigger for growth; perhaps not as explosive, but still growth. The closer this moment is, the closer is the end of the winter. I would advise you to count down the remaining days before halving, rather than count the number of days the bear market lasts, this figure will encourage optimism every day.
The next Bitcoin halving date is due in May 2020.
Other Investment Choices
The trader stated that he had invested in Ethereum, EOS, TON (Telegram Open Network) and other majorly successful projects, but rejected the notion that it was all about profits.
I fully support the movement. The point of no return has been passed – this technology won’t fully replace the traditional instruments, but will change them fundamentally, thus giving access to financial instruments to a wider range of people in the world.
This, he states, is the goal of the Roobee platform he has just invested $4.5 million. Roobee is an investment platform for retail investors on a blockchain, and the trader told CCN that he’s turning to it to solve issues like quick diversification, transaction security, and other features. He went on to point out something becoming increasingly clear in blockchain, which is that companies are no longer getting away with failure to deliver on products.
I only invest in projects that can reach a capitalization of $1bn within the time frame of 5 years. I see this potential in Roobee project, that’s why I invested $4.5 million into this blockchain-based investment platform. I’ve been following the same guidelines investing in Ethereum, EOS and other projects. In 2017 this strategy allowed me to transform $55m into $283m within a month. Moreover, I’ve seen a lot on the cryptocurrency market over the past three years, and in 2019 only products with tested business models, solving real tasks facing our world, take the lead.
Featured image from Shutterstock.
2020 US presidential candidate and alleged fugitive John McAfee is a hard man to reach these days.
He only speaks in 5-minute intervals on the phone, hanging up and returning to the call hours later from a different oceanic location on his yacht. This, he says, is to make it more difficult to trace the call and pinpoint his location.
But why would a presidential candidate need to do that?
Read More: Where do John McAfee and other 2020 US presidential candidates stand on crypto technology? Check out this comprehensive guide to find out.
John McAfee on Running for President [and from the Law]
I have not filed a tax return for 8 years. Why? 1: taxation is illegal. 2: I paid tens of millions already and received Jack Shit in services. 3. I’m done making money. I live off of cash from McAfee Inc. My net income is negative. But i am a prime target for the IRS. Here I am.
— John McAfee (@officialmcafee) January 3, 2019
As previously reported by CCN, McAfee took to Twitter recently to state that taxation is illegal and publicly declare that he hasn’t filed a tax return for 8 years, essentially goading the Internal Revenue Service (IRS) to come after him – and he claims that they have.
McAfee says that he and his wife have indicted for not paying their federal income taxes. On January 22, McAfee posted a video stating that the IRS had convened a grand jury in Tennessee to charge the McAfees and four campaign workers with “unspecified crimes of a felonious nature.”
He then announced that he would be running his presidential campaign on the run from the government while living on a yacht called the “Freedom Boat.”
The McAfee 2020 Campaign is, as of this day, in exile. I am being charged with using Crypto Cuttencies in criminal acts against the U. S. Government. More videos coming shortly. Stay tuned. pic.twitter.com/C75zcbnKTD
— John McAfee (@officialmcafee) January 22, 2019
No US presidential candidate in history has campaigned while on the run from the government, which raises the question – how is that going to work? The answer, according to the former enterprise security software mogul turned crypto pumper, is technology.
I Will Be Using Surrogates
Meme from David Sheridan. My clones, by the way, are getting organized. @yungkitty404 chose my face from a photo taken in Toronta. I’m kind of looking forward to all of this. pic.twitter.com/NHi0u5bqyG
— John McAfee (@officialmcafee) January 29, 2019
John McAfee’s proposal is extraordinary.
He told CCN of his plans to hire “surrogates” to attend events in his place, equipped with cameras feeding live video to his hidden location, wireless speakers to enable him to give speeches and respond directly to individuals during conversation, and, of course, wear a mask of his face to give the impression that it is McAfee himself standing on the podium or working the room.
“Yes, I am still running for president in the Libertarian party. I will be using surrogates. Debates, presentations, keynotes, etc. They will wear a mask of my face and be equipped with a small speaker attached to a smartphone. I will be able to see who I am speaking with and orally respond.”
‘I Do Not Intend To Be President’
Perhaps even more incredible is the fact that McAfee has no intention of actually becoming president.
He states that his singular goal is to liberate the American people from an “insane” and “controlling” government that has “become our master,” and strongly advocates the use of privacy-centric cryptocurrencies to take power away from the IRS and allow citizens to hide their incomes and refuse to pay taxes. McAfee told CCN that his constant criticism of the IRS is what has provoked the indictment.
“I have been speaking out more and more against the IRS, both in state when I keynote and also on my social media. I think they just had enough.”
“Privacy coins combined with distributed exchanges create an entirely anonymous and private economy. They cannot be shut down or regulated by any legislative or physical means. If a large percentage of the population adopts them then there will be no way for the IRS to levy income taxes.”
It is worth noting that his campaign does not have any other policies. As his website states:
“Do not ask me about immigration, foreign relations, education, etc. I have no idea. Those claiming that they do are lying to themselves, or if not, they are purposely lying to you. We must first be free. Freedom for The People is my only goal.”
When asked about the nature of his campaign, McAfee told us “I do not intend to be president,” adding: “If I won I would stay home.”
This is reflected in his unusual 2020 presidential campaign slogan which simply reads: “Don’t Vote McAfee.”
John McAfee image from AP Photo / Ng Han Guan
Since Bitcoin (BTC) began to stumble in early-2018, posting losses that would even make gamblers cringe, many skeptics of digital assets have claimed that the cryptocurrency is on a path of failure. In fact, cries that Bitcoin is in the midst of its death throes even sparked a scathing op-ed ‘exposé’ from MarketWatch, in which the author stated that Satoshi Nakamoto’s creation would enter a so-called “death spiral” to fall to $0.While Andreas Antonopoulos, along with some of the crypto sector’s other fervent crusaders, debunked this so-called FUD (fear, uncertainty, and doubt), some cynics are adamant in their belief that BTC and its altcoin brethren will plunge to zilch. In fact, at Davos’ recent World Economic Forum convention, blockchain venture investor Jeff Schumacher noted that the flagship cryptocurrency would likely fall to null, especially as its value is “based on nothing.”Related Reading: Why Does Mainstream Media Spread So Much Crypto FUD?Yet, a leading crypto trader recently made it abundantly clear that this bone-crushing bear season won’t last forever.Current Bitcoin Bear Season Now Longest EverA mere week ago, NewsBTC reported that Galaxy, a leading, well-followed crypto trader, took to Twitter to let his/her followers know that BTC was approaching the 420-day milestone of its current bear market. For those who missed the memo, the 2014/2015 downturn amounted to 420 days. And as such, Galaxy concluded that if history was to rhyme, BTC could move higher to start a bull rally in mid to late-2019.Yet, in a tweet posted Friday, Galaxy divulged that history has just been created, as BTC entered its [421st] day in the current bear season — “the longest since Bitcoin was born.”Today, we’re creating history with 411 days of bear market and the longest since #Bitcoin was born.
No one can tell us exactly when is going to end, but it is important to remaining focused on the long-term and remember that it cannot last forever. pic.twitter.com/IkDFwnnRN5— Galaxy (@galaxybtc) February 1, 2019This newfangled, disconcerting industry trend was only underscored by the fact that according to Bloomberg, BTC posted six months of consecutive losses for the first time… ever. Per a report from the outlet, according to data from Dow Jones, which dates back to July 2010, BTC started a renewed collapse in August and hasn’t stopped falling (from a monthly candle perspective) since.While history was seemingly made on Friday, Galaxy made it clear that while he can’t predict when this downturn will end, he is sure that it cannot last forever. Galaxy even added that it would be wise to focus on the long-term, rather than day-to-day price action.Galaxy isn’t the only industry insider to hold the belief that BTC won’t eternally be trapped in a death spiral or trend of similar caliber. According to previous reports from this news outlet, Alex Pack, the managing partner at Dragonfly Capital Partners, explained that while prices may not reflect his sentiment, the cryptocurrency achieved a major milestone in 2018.Pack explained that while BTC could fall to $2,000 or even $1,000, it would be preposterous to assume that the asset could collapse to $0, as the cryptocurrency has developed a material value proposition. The investor, who heads the aforementioned crypto-centric venture capital group, added that this non-zero chance that Bitcoin will always have value is a “milestone.”The Dragonfly managing partner noted that Bitcoin, a “landmark in the history of money,” has become a “dependable store of value.”Featured Image from Shutterstock
According to several reports, some funds from the missing $150 million holdings of Canada’s biggest crypto exchange QuadrigaCX could be moving.
On Saturday, CCN reported that QuadrigaCX lost more than $190 million in funds stored in both crypto and fiat as the CEO, who had sole control over user funds passed away.
In a strange turn of events, some industry experts have expressed skepticism toward the case as wallets connected to the exchange’s hot wallets started to move.
Inconclusive Evidence, Not Definitive if it is QuadrigaCX’s Cold Wallets Containing Crypto
A Reddit user with an online alias “Palhello” studied all major wallets that interacted with the exchange’s hot wallet. The user discovered that several wallets have initiated transactions fairly recently after QuadrigCX’s case was publicized.
The user claimed that the four addresses evaluated in the research have been controlled by QuadrigaCX in the past.
“Any address that has input into the hot wallet are wallets that are fully in control of Quadriga (could also be an address that belongs to a Quadriga user whose private key belongs to Quadriga),” the user said.
The user added that regardless of the situation if the private keys held by the CEO were lost, the wallets should not be able to initiate outgoing transactions. The user said:
If these are really cold addresses there should be no outgoing transaction from them if private key is lost. Regardless, the addresses posted are or at least used to be controlled by Quadriga.
However, it cannot be said definitively that the four wallets which interacted with QuadrigaCX’s hot wallet are cold wallets.
Those wallets could be big hot wallets owned by customers of the company or potentially wallets that are not under the control of QuadrigaCX.
Until the official investigation from the local police is complete, it will be difficult to prove that the wallets which interacted with QuadrigaCX’s hot wallet are the exchange’s cold wallets.
Jesse Powell, the CEO of Kraken, a major crypto exchange that operates in both the U.S. and Canada, said:
We have thousands of wallet addresses known to belong to QuadrigaCX and are investigating the bizarre and, frankly, unbelievable story of the founder’s death and lost keys. I’m not normally calling for subpoenas but if the Royal Canadian Mounted Police are looking into this, contact Kraken.
Peter Todd, a Bitcoin expert and an applied cryptography consultant, emphasized that until the investigation is complete, all possibilities have to be considered.
“The people trying to pull off a QuadrigaCX exit scam could actually be the family and other employees, by hiding the fact that the cold wallet keys are known. Not saying this is happening, but need to consider all possibilities fairly in the investigation,” Todd said.
It is entirely possible that the cold wallets of QuadrigaCX are currently not moving but rather wallets that were associated with the exchange previously, which are not related to the company, are becoming active again.
The time frame of the transactions have led analysts to become suspicious toward the case but there is not enough evidence to state that the cold wallets that were in control by the CEO, are moving.
The Situation Could Have Been Prevented
As said by Cornell professor Emin Gün Sirer, QuadrigaCX previously claimed to be using a multi-signature system.
A multi-signature system allows many organizations or individuals to hold private keys to a wallet and access it once the keys are combined.
A 3-5 or a 5-7 multi-signature system which requires the presence of the majority of keys to gain access to funds prevent unfortunate events from leading to the loss of user funds.
Quadriga previously claimed to have multisig wallets.https://t.co/3hsrLZw4ZY
— Emin Gün Sirer (@el33th4xor) February 3, 2019
If the company had implemented a proper multi-signature system, $150 million in user funds would have remained safe.
The Doomsday Clock is 2 minutes from nuclear midnight.
President Donald Trump announced Friday that the United States would be pulling out of the 1987 Intermediate-Range Nuclear Forces Treaty, giving rise to fears of a new atomic arms race between the former Cold War rivals.
It’s a move Trump threatened in October:
Until people come to their senses, we will build it up. Russia has not adhered to the agreement. This should have been done years ago– until people come to their senses. We have more money than anybody else by far. We’ll build it up until they come to their senses. When they do, then we’ll all be smart and we’ll all stop. And by the way– not only stop– we’ll reduce, which I would love to do.
Citing years of alleged Russian non-compliance with the landmark Cold War-era nuclear agreement, Trump said the U.S. will suspend its obligations under the treaty in six months until “comes back into compliance by destroying all of its violating missiles, launchers, and associated equipment.”
Democrats in the party establishment, as well as their sympathizers within the mainstream media, have painted Trump somewhere on a spectrum from overly-friendly with Russian President Vladimir Putin, to a total puppet of the Kremlin.
But Donald Trump won’t let his cozier stance toward Russia stand in the way of his nuclear ambitions. As a presidential candidate, and after being elected president, the Donald has startled national security advisors with his cavalier attitude toward the world’s most destructive arsenals.
World’s Best Nuclear Power. So Nuclear, Amazing.
Shortly before the 2016 elections, Trump reportedly shocked a foreign policy expert who went to consult with the Republican presidential candidate, by asking him three times in an hour brief why the U.S. can’t use nuclear weapons.
Several months ago, a foreign policy expert went to advise Mr. Trump… Trump asked three times, in an hour briefing, ‘why can’t we use nuclear weapons?’
Then after becoming elected president, Donald Trump tweeted his intentions with regard to the United States’ governments nuclear armaments:
The United States must greatly strengthen and expand its nuclear capability until such time as the world comes to its senses regarding nukes
— Donald J. Trump (@realDonaldTrump) December 22, 2016
Then in the summer of 2017 Donald Trump alarmed the entire national security establishment when he improvised remarks directed at North Korea, saying:
North Korea best not make any threats to the United States. They will be met with fire and fury like the world has never seen. He has been very threatening beyond a normal statement. And as I said they will be met with fire, and fury, and frankly power the likes of which this world has never seen before.
Did Donald Trump realize what he was saying at the time?
During the Korean War, the United States actually dropped more bombs on North Korea (635,000 tons) than it dropped on the entire Pacific Theater during WWII.
In three years three million civilians died.
The U.S. did it ostensibly to oppose the spread of communism in the world, but that was right after electing Franklin D. Roosevelt president four terms in a row.
We’re lucky no one bombed us.
Dropping Bombs in North Korea
The U.S. actually literally already has unleashed fire and fury like the world has never seen on North Korea, and they have not forgotten. It’s part of why North Korea is extremely paranoid and mistrustful of the outsider world, earning it the moniker, The Hermit Kingdom, because of its isolation in the global community.
Provoking the latest country to acquire nuclear weapons and the ability to deploy them at intercontinental range with a statement like that was reckless in the extreme.
People living in Seattle or Honolulu should resent Trump for exposing them to so much risk to make his brash statements for the camera.
Giving what has happened to North Korea already just a generation ago, and what the Kim family has watched Washington do to Iraq and Libya’s regimes, it’s understandable why they would want a nuclear deterrent.
Though the U.S. has been wargaming a North Korea invasion for years, it’s completely out of the cards now that Kim Jong Un can pop an ICBM off and hit One Microsoft Way.
Frankly, I think this qualifies Kim Jong Un for at least a nomination by the Nobel Peace Prize committee. And as a libertarian worth his salt, I believe in Kim Jong Un’s right to bear arms to defend himself from an oppressive U.S. government just as much as I believe in that same right for Ted Nugent or the Duck Dynasty guys.
Russia has a right to produce and deploy a nuclear deterrent as well and has China to consider as much as the U.S. does, a rising world power that has never signed on to the Intermediate-Range Nuclear Forces Treaty.
The U.S. nuclear arsenal of nearly 7,000 warheads and a formidable array of methods to deploy it globally is already the greatest deterrent to war that any country has ever had in human history. Spending billions or even trillions on more doesn’t make the world any more safe than it already is. It’s just overkill.
A nuclear buildup, as Trump has planned, would waste massive amounts of resources that could actually go toward enriching the people who created those resources and the rest of us. It will likely postpone the day if there will ever be one, that the world completely denuclearizes.
And as AI rapidly takes over the planet, it is more urgent than ever before that we do everything we can to make sure that day comes sooner than later.
The Doomsday Clock is two minutes from nuclear midnight.
After Trump’s announcement, there may only be a minute left to spare.
While most major tech stocks in the likes of Intel and Nvidia had a bad start to 2019, one industry has performed exceptionally well, sustaining the momentum of the Dow Jones and the U.S. stock market.
In the fourth quarter of 2018, the oil industry had one of its best years to date. Exxon Mobil Corp and Chevron Corp reported strong earnings in the latter half of last year, generating record profits.
The expectations toward oil giants dropped as oil prices declined by 38 percent approaching the end of 2018.
Despite falling oil prices, the oil industry demonstrated resilience to a wide range of geopolitical risks that heavily affected the electronics and technology sector.
BP and Total Set to Record $84 Billion Annual Profit, Dow Jones to React Positively
Following the positive earnings reports of Exxon and Chevron, more large oil conglomerates including BP and Total are set to release their earnings in the upcoming days.
Early estimates put the yearly profits of the two companies at $84 billion, up $10 billion than four years ago, as reported by The Wall Street Journal.
Exxon and Chevron generated profit in the range of $3 to $6 billion in the last quarter of 2018, recording a 10 to 19 percent increase in profits from the previous year.
Edward Jones analyst Brian Youngberg said:
These companies have figured out how to operate in this new environment, and they have adjusted well. The key going forward will be maintaining discipline. This is now a low-growth industry, so you’ve got to invest well.
The solid rebound of Exxon in the last several months of 2018 was crucial for the oil industry as the company experienced a plunge in its share price by 24.27 percent from its yearly peak in October.
Since late December, Exxon has recorded a 15 percent increase in valuation as the oil sector recovered as a whole.
With the oil sector fueling the positive sentiment around the U.S. economy, the Federal Reserve vowing to be patient with regard to increasing its rates, and U.S. job growth increasing steadily, the pressure on the Dow Jones and U.S. stock market is dropping gradually.
“We added 304,000 jobs, which was a shocker to a lot of people. It wasn’t a shocker to me.” pic.twitter.com/hHzogMtXG5
— The White House (@WhiteHouse) February 1, 2019
But, as it is for virtually every major industry in the U.S., the ongoing trade talks with China remains an interest for oil companies.
In an unlikely event that a comprehensive trade deal is not achieved by the U.S. and China by March 1, Dr. Philip K. Verleger, Jr. explained in a column that it could drive crude prices down and hurt the oil industry.
“Those in the oil market also worry about China. The country’s economic growth has been a key driver of global crude oil consumption,” Verleger, Jr. wrote, adding that there exists a possibility it may negatively affect the growth of international markets.
Verleger, Jr. noted:
The danger occurs because lower oil demand growth in China comes just when independent refining capacity there is rising. The capacity growth has been financed primarily by debt, most likely supplied by China’s alternative lenders. As demand slows, these refiners will turn to international markets, dumping products in Singapore, the Americas, or Europe to earn hard cash.
General Optimism in U.S. Markets
U.S. President Donald Trump has reassured investors that the trade talks with China are seeing progress and that both countries do not want to increase tariffs from current levels.
China’s top trade negotiators are in the U.S. meeting with our representatives. Meetings are going well with good intent and spirit on both sides. China does not want an increase in Tariffs and feels they will do much better if they make a deal. They are correct. I will be……
— Donald J. Trump (@realDonaldTrump) January 31, 2019
With major industries in the U.S. outperforming the expectations of Wall Street and various factors fueling the recovery of the Dow, the short-term outlook on the U.S. stock market remains positive.
If the trade talks with China move smoothly over the next four weeks, the oil, technology, and car manufacturing industries are all projected to rebound and retain momentum.
One of the most important rules for trading financial markets is cutting losses quickly and letting winners run.
Generally, you want to let your trades that are in the green run as long as the market is willing to provide.
Conversely, you should cut your losses and exit the position to preserve your capital when you immediately identify that a trade is going/staying south. In other words, the trade is not going to come through and you’d be better off cutting your losses and reducing your risk exposure.
The idea is to provide those trades that are in profit with room to develop without self-sabotaging your own position. Doing so while conditions are favorable is key, rather than closing on a trade prematurely and losing out on potential gains.
Sounds simple right? Well, it’s not always so easy.
That losing feeling
This fundamental rule set for trading winners and losers is widely known, but it is often forgotten by both novice and professional retail investors alike, as emotions tend to take charge.
“Sure” you say, “I can manage that and keep my emotions in check,” but the reality is that no one is that robotic in nature, and nobody knows 100 percent of the time the correct direction that the price will take.
As human beings, we are prone to “loss aversion” – a tendency to ignore or avoid losses. Hence, we tend to let our losers run, in order to avoid taking a loss.
Identifying when a trade is heading south is the difference between stubborn financial ruin and modest success (with the latter obviously being the preferred option).
However, research suggests that despite knowing the obvious and most logical course of action to take, people will sometimes deviate from that path and experiment. Yet, experimenting with your money or your trades is a one-way ticket to “wreck city” when making investments.
Instead, work on a series of rules/guidelines that you follow – and stick to them. By vetting any inconsistencies that don’t align with the mantra of “cut your losses,” you can severely limit your risk and exposure to the market.
In essence, successful traders possess a very particular type of personality and mental psychology that allows them to look at a piece of information without snap judgement.
The instinct to know when to cut or exit a trade comes from experience and the ability to cultivate value from your stringent trading rules is what separates the novice from the professional.
Confirmation bias also presents a problem, wherein you attempt to be “right” as opposed to remaining objective and on course with following the aforementioned rules.
The toxicity of emotions in trading cannot be overstated, so cut those losses and let your winners ride a little while longer, especially if you see no reason to end the trade then and there.
So what to do?
Here are some rules that could help you master the art of letting winners run and cutting losers:
Trading is the opposite of investing: Both trading and investing involve seeking profit, but they pursue that goal in different ways. Investing essentially involves betting on an idea that is likely to lead the economic growth, say 10 years from now. So, hope is an inherent part of investing.
Hope, however, has no place in trading, as it usually involves leverage. As a result, holding onto loss-making positions on the hope that it would eventually recover lost ground only yields deeper mark-to-market losses (ask a futures trader).
Remember you are a trader: When in a loss, most traders go from being speculators to long-term investors in no time, citing sound long-term fundamentals. That kind of a sudden role switch often leads to trading disasters, as speculative bets usually involve high leverage. So, eventually, a big drawdown forces a trader to accept their folly and move out of markets.
Revenge trading is a big no: Revenge trading is that irrational desire to win back losses in the shortest possible time and usually from the same market that you lost money in. That again leads to traders taking quick profits and letting losers run, leading to even deeper drawdowns. The best thing to do after a big loss is to sit on the sidelines for a few days.
Avoid win-rate fixation: Most traders, especially beginners, are always looking for a high win rate in the ratio of wins and losses. From our childhood, we are rewarded for being right, so having a high win rate is more satisfying. That obsession with having a high win rate, however, is what drives traders to take quick profits.
If we take quick losses and allow the winners to run, our win rate might be between 50 to 60 percent. However, we would be making more money on our good trades compared to what we would lose on bad trades.
Remember, the captain of Titanic was only wrong once. It is the size of the mistake that matters and not the number.
Disclosure: The author holds no cryptocurrency at the time of writing.
Stock chart image via Shutterstock
Mike Novogratz — the CEO of cryptocurrency merchant bank Galaxy Digital — admits that the Crypto Winter will probably last longer than he had anticipated. However, the Goldman Sachs alum still believes that institutional investors will eventually enter the market, and remains an avowed bitcoin bull.
Mike Novogratz ‘Very Confident’ of Institutional Entry
Novogratz tweeted: “Don’t think we head north for at least a few more months. Always take longer for institutions to move. Very confident they will. Tons of activity under the hood. Stay the course.”
Realizing having tweeted about crypto in a while. It’s a grind. Don’t think we head north for at least a few more months. Always take longer for institutions to move. Very confident they will. Tons of activity under the hood. Stay the course.
— Michael Novogratz (@novogratz) February 1, 2019
Had Set $20,000 Bitcoin Price Target for 2019
The protracted market slump has caused many a crypto enthusiast to scale back their exuberance. And Novogratz is one of them.
In November 2018, Novogratz boldly set a $10,000 bitcoin price target for the end of the first quarter of 2019. He also predicted that bitcoin would top $20,000 this year.
But as the market slump continues with no signs of an immediate reversal, Novogratz has now apparently adopted a more sober outlook.
Bull Call: Novogratz Says Bitcoin Will See Record Highs in 2019 https://t.co/JiGEZCre5q
— CCN.com (@CryptoCoinsNews) November 6, 2018
Crypto Executive: Stop Freaking Out
That said, don’t expect bitcoin stalwarts to jump ship anytime soon. We’re at the beginning of February, and there’s still almost 11 full months left in 2019.
Crypto evangelists like Dan Morehead — the CEO of bitcoin investment firm Pantera Capital — say it’s time for those with short-term mindsets to stop freaking out. Why? Because the industry has weathered bear markets before, and this one is different from the others, Morehead insists.
In the previous one, I had more of a worry in the pit of my stomach about whether blockchain was actually going to work.
With this one, the underlying fundamentals are much, much stronger than they were in the 2014-2015 Crypto Winter.”
Here’s Why Pantera Capital Thinks This Bitcoin Bear Market is Different https://t.co/QtVDxNwK1h
— CCN.com (@CryptoCoinsNews) February 2, 2019
The Few Who Do Versus the Many Who Talk
Critics may say that bitcoin bulls like Dan Morehead, Mike Novogratz, the Winklevoss twins, and Circle CEO Jeremy Allaire are unrealistically optimistic. That’s probably because they have skin in the game.
They’re not just talking the talk; they’re walking the walk. They have invested a lot of their own money in the success of the industry. Therefore, they are highly motivated to ensure it thrives.
Last month, Novogratz increased his holdings in Galaxy Digital to 79.3% after acquiring an additional 2.7% of its outstanding shares for $5.4 million. He previously held a 76.6% stake.
The former Wall Street banker is now Galaxy Digital’s single largest shareholder, with 221 million shares. If that’s not a sign of conviction or personal accountability, it’s hard to say what is.
Trader: Bitcoin Will Crater Into Extinction
Meanwhile, skeptics are betting that the crypto market will crater into extinction. Not surprisingly, the most vocal opponents are people from traditional financial institutions and legacy banks whose existence is threatened by the rise of the crypto industry.
Three weeks ago, futures trader Anthony Grisanti predicted that the bitcoin price would soon tank below $3,000 amid a mass sell-off.
Grisanti is an analyst at CNBC who previously traded energy futures at Bear Stearns. Like other crypto naysayers, Grisanti believes it’s only a matter of time before bitcoin totally collapses.
He claims that whenever the bitcoin price rallies a little, it’s because people are liquidating their positions. “Whether or not they’re liquidating outright or the futures, they are liquidating,” Grisanti claims.
CNBC Analyst: Bitcoin Fans Are Clueless
Grisanti’s fellow CNBC commentator, Scott Nations, also blasted bitcoin, saying it has no value. He also dissed millennial crypto fans, saying they’re too inexperienced to understand that they’re witnessing a bubble that’s bursting.
If you are in your 20s, you have never seen an asset bubble. You were a teenager during the housing bubble. You were not even a teenager during the dotcom bubble. Well, baby, this is a bubble! And right now, it’s coming unglued.”