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Bitcoin in 2049

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future of bitcoin

This is a guest post submitted on CryptoTapas by Joey Bertschler


Like the U.S. dollar, Bitcoin is backed by nothing.

To keep up with demand, societies reduced the amount of precious metal in coins until they deteriorated in real value to nothing — other than a piece of paper with a promise attached.
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Given inflation, one could argue that the U.S. dollar has been going to zero ever since it was invented ($1 in 1862 $25.36 in 2019).

bitcoin vs dollarThe Bitcoin experiment has been a roller-coaster for many. From market manipulation to hacks, and the now long-awaited second “alt coin season,” the price has gone from virtually nothing to Lambos and back. With the fall of ICO’s, and new regulations in jurisdictions across the globe, security tokens seem to be set as the next big thing in digital investments. But where does this leave Bitcoin?

In 2018, the frenzied activity across multitudinous outlets such as Cointelegrah, Hackernoon, and various Forums (to list a few) gave the implication that Bitcoin could never reach “0”.

But one is ought to be cautious when using the word “never”.

Cointelegraph: “Many will compare Bitcoin to a company or stock, which can go to zero, as a reason not to invest in it. However, Bitcoin is decentralized and autonomous. There is not one man, group or board of directors that can run it into the ground.”

Hackernoon: “Bitcoin has indeed been declared dead 249 times.”

bitcointalk.org user: “If bitcoin returns to zero, I’m not afraid because I believe it will come back again.”

ccn: “With such a high percentage of coins parked in various wallets and places, a number of cataclysmic events would have to conspire for the price to ever actually reach $0.”

Let’s take a look at a few cases of “never” in finance we had in the past:

Great Depression of 1929, Black Monday of 1987, the 2008 financial crisis,and Greek government-debt crisis since 2009.

bitcoin - dollarHowever, can bitcoin be compared to conventional currencies, stocks, or even companies? Bitcoin is decentralized and autonomous. That much is known to the general public and even to most completely outside of crypto and finance by now.

What most people seem to focus on is market psychology and sentiment because that is more relevant when it comes to trading.

When bitcoin spiked at around $20,000 it was not because bitcoin underwent some sort of update or anything like that to increase its value. It was simply hype forming a bubble. Like all bubbles, they are not sustainable. People still traded, knowingly, to make a quick buck.

And while elements like retracement tools, often used by day traders, made it look like there was some math behind it — most trading was, and still is, at best based on an educated guess.

Back to the fundamentals.

Does bitcoin have intrinsic value? In traditional markets, the idea behind intrinsic value is that any asset traded on an open market, over time it will eventually trend towards its average (regression to the mean).

Real Money: “As a trader, I am a slave to price action. If I think I have some sort of edge I’m willing to trade an asset even if I think it has no real intrinsic value.

With a framework consisting of several assumptions, one may argue bitcoin to have intrinsic value as a medium of exchange and storage of value.

Investopedia: “It seems possible that bitcoin could eventually increase in price by orders of magnitude, but it all depends on bitcoin’s level of adoption. The most important question is “Will people use bitcoin?”

The equation of exchange — not for bitcoin

Bitcoin is a true currency in the sense that its value is based on trust and trust alone. It depends on the faith of the people. Without a government to back it, it relies on the sentiment of the masses.

What about the calculation of how much it costs to produce a single bitcoin?

(Cost of electricity and equipment based on the proof of work — floor value)

Also no. This logic comes from commodities where we try to estimate the floor value to produce a barrel of oil or a ounce of gold. However, bitcoin lacks industrial use-cases. It transfers value — and that is it.

Why it is so difficult

Bitcoin arguments often end in circular logic.

“What gives Bitcoin its value, is its ability to transfer value.”

“Bitcoin is valuable because people trust in it”

Conclusion

The most realistic way bitcoin could turn “0” (not literally, there would always be some collector value) is for the entire cryptocurrency space to fall apart. Not a very likely scenario.

The “Next Altcoin Season Won’t Be Until 2020,” bitcoin keeps swinging, the SEC deems virtually all utility tokens securities excluding Ether, and Security Token projects and offerings are on the rise because of it. Bitcoin will stay afloat and in the spotlight — at least for now.

Thank you for reading the article.

Author: Joey BertschlerJoey Bertschler (Vice President)
Joey Bertschler balances multiple high-level roles across the Security Token Alliance, bitgrit and Cosmology.
Joey Bertschler is the Vice President of the Security Token Alliance, the world’s largest think tank for the Security Token industry with over 70 partners, Advisor to the World Data Science Forum, and Brand Manager at bitgrit and Cosmology Inc. He has reached audiences of over 1 million on social media channels and is involved in a plethora of marketing campaigns in APAC and CE.

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Crypto News

Crypto News Today #53

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A rather slow week in the crypto space.  

Bitcoin on track to $100,000 by 2025

A Bloomberg report titled “Bitcoin Trend, Adding Zeroes” predicts that $100,000 by 2025 is on track.  “Bitcoin could continue doing what it has for most of its nascent existence, appreciating in price on the back of increasing adoption, but at a slower pace as we see it. The first-born crypto has had a tendency to add zeros to its price from around $10 in 2011. It took about four years to go from $1,000 to $10,000 in 2017, so doubling that time frame for maturation could get the price toward $100,000 in about five more years. Or the new technology could fail, but our demand indicators are positive. With the exception of stable coins, the rest of the crypto market is subject to excess supply and competition,” report read.

Another company joins the $100 Million Bitcoin club

Stone Ridge created a subsidiary called New York Digital Investment Group (NYDIG) to act as the custodian of its own customers bitcoin.  The move was prompted by the growing demand from customers who were willingly investing 1% to 5% of their portfolio in Bitcoin.  Forbes reported that “Stone Ridge Holdings Group revealed NYDIG is acting as custodian of 10,000 of the parent company’s bitcoin, valued at $115 million at today’s price.” “The two largest funds currently managed by NYDIG are the $190 million Institutional Bitcoin Fund LP, disclosed in regulatory documents in June and the $140 million Bitcoin Yield Enhancement Fund LP disclosed in May,” the article revealed.

Coinbase lost 5% of its workforce, got over 1000 requests from FBI

coinbase best exchangeAbout 5% of the workforce left Coinbase due to its ‘no politics at work’ stance. At the same time, it has allegedly received more than 1000 requests from agencies, mainly FBI, regarding crypto transactions. While these news are unrelated – Reddit and other social media channels are flaring up with anarchists rhetoric calling crypto users to move away from the capitalists Coinbase. We are indifferent on the matter.

Thank you for reading and sharing this article. We appreciate you.

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Top 5 Cryptocurrencies 2020

 

IMPORTANT DISCLAIMER

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We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

 

 

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Crypto News

Crypto News Today #52

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On ramps are being built to pave the world’s businesses to the blockchain. Latest in this trajectory is EY, one of the world’s big 4 accounting firms, who has built a solution to onboard businesses onto blockchain.

EY launches Ethereum Solution ONP

OpsChain Network Procurement (ONP) which is expected to help convert the procurement contracts into digital smart contracts and automate volume discounts/rebates has been launched by Ernst & Young (EY) on Ethereum Blockchain. EY is one of the Big 4 accounting firms in the world that has been eyeing to be at the forefront of blockchain technology and this ONP is a great addition to its forte. “EY OpsChain Network Procurement supports network-level business processes by moving those business processes outside of any single ERP system and into a shared blockchain-based smart contract. It builds upon EY experience with other procurement activities, such as software royalty calculations, where shifting to blockchain-based contracts has compressed cycle times by more than 90% and cut costs by 40%,” according to the press release.

KuCoin hack hauls $130 Million, creates a stir re: decentralization

KuCoin got hacked during the week for 100s of millions of dollars.  However, according to the KuCoin CEO Johnny Lyu substantial part of those stolen funds have been recovered. Over $200 Million in stolen funds have been recovered. While many crypto maximalists were furious at the fact that KuCoin and the projects supporting KuCoin were able to freeze the funds in the suspected accounts, some argued that the key tenet of blockchain and cryptocurrencies is the ability to be not shut down by an external force. Say what may – this recovery of funds has been welcomed by those who use KuCoin. In a clear twist of the plot, KuCoin was able to turn these things around and instill confidence in the exchange. The latest in this hack thriller is that KuCoin claims to have located the hackers and are now working with the authorities to take the legal action.

The man who called banking system a scam buys his first Bitcoin

The UK politician whose speech against the banking scam has been referred to by crypto communities, Godfrey Bloom,  has tweeted that he made his first purchase of Bitcoin. 

 

Thank you for reading and sharing this article. We appreciate you.

We have been tracking the most important news in blockchain and crypto space since 2017. You can check out all the chronicled news here.  

Consider subscribing to our newsletters to receive these news updates in ONE neat email per week along with other freebies that we give away once-in-a-while.

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Top 5 Cryptocurrencies 2020

 

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We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

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Crypto News Today #51

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This week people are reminded why Blockchain and cryptocurrencies are needed.  An expose by Buzzfeed reviewed the FinCEN files to show that major financial institutions have been assisting and facilitating illicit affairs to earn their fees.

$2 Trillion scandal shows why we need blockchain now

Standard Chartered, HSBC, Bank of America and many of the world’s biggest financial institutions have been secretly mining money in the form of fees for the world’s most dangerous individuals and entities.  “A huge trove of secret government documents reveals for the first time how the giants of Western banking move trillions of dollars in suspicious transactions, enriching themselves and their shareholders while facilitating the work of terrorists, kleptocrats, and drug kingpins,” reports Buzzfeed which ran an expose on the whole matter.  This reminds us one more time that the number one choice of criminals is not bitcoin or cryptocurrency which remain quite traceable.  Criminals use cash and also major bank accounts in broad daylight for their illicit affairs.

OCC issues clarification for banks regarding stablecoins

Office of Comptroller of the Currency issued clarification about banks holding cryptocurrencies, specifically, stablecoins.  Essentially, OCC gave greenlight for banks to hold stablecoins as long as they have 1:1 reserve.  “A bank providing services in support of a stablecoin project must comply with all applicable laws and regulations and ensure that it has instituted appropriate controls and conducted sufficient due diligence commensurate with the risks associated with maintaining a relationship with a stablecoin issuer. The due diligence process should facilitate an understanding of the risks of cryptocurrency and include a review for compliance with applicable laws and regulations, including those related to the Bank Secrecy Act (BSA) and anti-money laundering,” OCC letter clarified.

Cryptos are part of Visa’s future strategy

Digital assets and blockchain technology are going to be important parts of Visa’s future,” was the conclusion of an exclusive Forbes interview with Terry Angelos, SVP global head of fintech at Visa and Cuy Sheffield, senior director, head of crypto at Visa. “We are seeing significant interest in demand from crypto companies that want to work with Visa and connect their clients to our network of 60-plus million merchants,” Terry mentioned during the interview. Visa expects to be part of broader cryptocurrency adoption and also work closely with the world’s major banks in the CBDC adoption.

EU announces plan to regulate cryptocurrencies

European Commission is working on introducing a framework to regulate cryptocurrencies.  It could potentially take a year or more for these regulations to come out.  Investor protection and enabling innovation will be cornerstones of these proposed plans.  The new plan will mean that crypto-asset companies authorized by one of the 27 EU countries will be able to provide its services across all the other member states, according to the CNBC.

Gemini is expanding into United Kingdom

Winklevoss brothers brainchild, Gemini, is expanding into the UK as it received the electronic money license from the Financial Conduct Authority (FCA).  This move will allow residents of the UK to buy bitcoin using a debit card on the Gemini platform.  According to the article in Bloomberg, Gemini is looking to expand into Singapore next.  

Fun Fact: Norway, Blackrock and Vanguard hold Bitcoin, indirectly

The Norwegian Government Pension Fund, which owns 1.5% of MicroStrategy, effectively owns roughly 577 bitcoins. Blackrock and Vanguard also own shares in Microstrategy which in turn makes them indirect holders of Bitcoin. Source: Forbes.

Thank you for reading and sharing this article. We appreciate you.

We have been tracking the most important news in blockchain and crypto space since 2017. You can check out all the chronicled news here.  

Consider subscribing to our newsletters to receive these news updates in ONE neat email per week along with other freebies that we give away once-in-a-while.

Stay safe and healthy!

Top 5 Cryptocurrencies 2020

 

IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

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