Top Crypto News – 10/01/2018

Microsoft Removes Bitcoin as Payment Option for Microsoft Store

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In a blow for Bitcoin enthusiasts, Microsoft Corporation has removed the ‘Bitcoin’ payment option from its active payment instruments. The company was an early adopter, and former CEO Bill Gates had expressed his support for the cryptocurrency.

Microsoft’s decision has been confirmed through publicly posted chats with customer service representatives. The main cause of the cessation appears to be volatility and risk associated with the cryptocurrency.

Customers are still able to use Bitcoin to add money to their Microsoft account. Accounts can be used to purchase games, movies, and apps, but these funds are not usable in the Microsoft store. Furthermore, the funds are non-refundable.

Microsoft is one of the larger vendors to remove their Bitcoin payment option. Other companies like Square added Bitcoin support in 2017. However, with the substantial increases in price and volatility through the last quarter of the year, the risk for companies like Microsoft appears to have increased.

Bitcoin is down four percent on the day, according to Coinmarketcap.com.

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Written by CoinTelegraph

 

Several Bitcoin-related ETF Proposals Withdrawn at SEC’s Request

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Today, January 9, ProShares, Raffety Assets Management and VanEck all withdrew their Bitcoin-related ETF proposals from SEC consideration, at the regulator’s request. Rafferty Assets Management commented that the SEC “expressed concerns regarding the liquidity and valuation” of the underlying asset.”

None of the withdrawn proposals were actually Bitcoin ETFs, per se. An actual Bitcoin ETF is widely seen as the holy grail of mainstream financial acceptance, as it would require the purchase of actual Bitcoins in order to “back” investments in the ETF. All of the proposals withdrawn today were related to Bitcoin futures markets. Nonetheless, the proposed ETFs had been greeted with pleasure by the Bitcoin community, which saw them as a stepping stone to a true Bitcoin ETF.

Optimism challenged

Indeed, Bitcoin investors believed they had reason to be optimistic following the release of regulated Bitcoin futures markets last month. In rejecting the Winklevoss ETF proposal early last year, the SEC specifically left the door open to approving a Bitcoin ETF in the event that regulated futures markets emerged. The SEC’s unwillingness to consider ETFs based on these futures market is certainly a cause for concern.

Nonetheless, it’s wise to remember that the regulatory wheel turns slowly. Chris Concannon, CEO of Cboe, told Business Insider last month:

“A healthy market is a healthy underlying market, derivatives markets, and an ETF. That will take time.”

Written by CoinTelegraph

 

Kodak Sees Stock Price Soar Following Unveiling of KodakCoin

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Kodak, a company that seemed dead and gone with the advent of digital photography, just saw a surge today as it announced the creation of its own cryptocurrency. The so-called KodakCoin will be the token that powers the company’s new KodakOne platform. KodakOne will allow photographers to register their images, license them and search the web for unauthorized usage.

CEO Jeff Clarke explained:

“For many in the tech industry, ‘Blockchain’ and ‘cryptocurrency’ are hot buzzwords, but for photographers who’ve long struggled to assert control over their work and how it’s used, these buzzwords are the keys to solving what felt like an unsolvable problem.Kodak has always sought to democratize photography and make licensing fair to artists. These technologies give the photography community an innovative and easy way to do just that.”

Kodak’s stock doubled in value following the company’s announcement.

Here we go again…

Connecting one’s company to Blockchain or cryptocurrency seems to be the latest – and most sure-fire – way of increasing one’s stock value. Long Island Iced Tea company recently changed its name to Long Blockchain and saw its value increase five-fold. While Clarke is optimistic that the new cryptocurrency will revive Kodak’s flagging fortunes, the Financial Times calls the move a “last desperate bid for relevance.”

KodakCoin will be launched by ICO on January 31. The token sale is only open to accredited investors.

Written by CoinTelegraph

Bitcoin could ‘easily double’ in 2018, says Fundstrat’s Tom Lee

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One of Wall Street’s biggest bitcoin bulls says the cryptocurrency could “easily double” or even triple in 2018.

In August 2017, Tom Lee, co-founder and head of research at Fundstrat Global Advisors, predicted bitcoin’s rally above $10,000 and declared that the digital currency would outperform equities through the end of the year. Sure enough, bitcoin rallied to a high near $19,800 in December, with its performance widely outpacing stocks.

Since that high, however, the cryptocurrency has fallen 25 percent, trailing stocks, gold and oil, which are up a respective 3 percent, 5 percent and 10 percent during that period.

Despite the drop, Lee is still pounding the table on the cryptocurrency.

“Even on a risk-adjusted basis, I think bitcoin is going to easily outperform the S&P,” Lee said Tuesday on CNBC’s “Futures Now.” “On a long-term basis, [the easiest way to look at bitcoin is] as a replacement or a store of value,” he said. “So as millennials discover and generate income, they’re going to use it as a replacement for gold.”

Investors have quipped that the bitcoin boom could be taking market share from gold. Over the last year as bitcoin surged about 1,535 percent, gold has been tethered around the $1,300 level.

“If [bitcoin] gets 5 percent of the gold market, that’s roughly $50,000,” he added. That’s a more than 200 percent move from where bitcoin is currently trading.

On a near-term basis, Lee expects bitcoin to reclaim its December high. “We think that by mid-2018, we’re going to be part of the way there, and that’s why we get [bitcoin to $20,000],” he said. “If [bitcoin] can actually rise close to [that $20,000 level] in the first half of this year, I think in the second half of 2018, we’ll see a move bigger than that,” Lee said. “So I think bitcoin is still something you should own [all year].”

Despite its underperformance in the past month, bitcoin is still up 15 percent in the first few days of 2018.

Written by CNBC

Quebec Lures Cryptocurrency Miners as China Sours on Industry

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Quebec was fishing for tech giants but caught bitcoin miners.

At least that’s how David Vincent, business development director at electric utility Hydro Quebec, describes the results of a campaign launched in 2016 to lure the likes of Facebook, Amazon and Microsoft to build their data centers in the Canadian province.

The sales pitch was simple: the province offers plentiful, cheap and renewable electricity, along with cold weather and a politically stable environment.

And while Hydro Quebec has gotten plenty of bites from traditional data center operators, the company also quickly discovered those same traits are equally attractive for cryptocurrency mining operations.

Nonexistent just six months ago, interest in Quebec from commercial-scale bitcoin miners has skyrocketed, Vincent said, amid the surge in cryptocurrency prices and political uncertainty in other jurisdictions.

For Hydro Quebec, 35 cryptocurrency mining organizations are asking the company for information regarding connecting to the power grid there. Those companies now account 70 percent of the total wattage capacity in Hydro Quebec’s development pipeline.

In an interview with CoinDesk, Vincent said:

“I have so much demand right now there’s no need for marketing. Pretty much every day I have a new one.”

And sentiments from others suggest what Hydro Quebec is seeing now is just the tip of the iceberg.

“Based on what I’ve seen in equipment purchase, real estate and power deals, things are exploding in Quebec,” said Austin Hill, the former CEO of Blockstream, who is now investing in and backing some of the mining projects looking to Quebec.

Cheap and abundant

Cryptocurrency mining – the energy-intensive process by which new transactions are added to a blockchain – generally requires specialized hardware (either ASICs or GPUs) to solve complex mathematical puzzles. Because of the vast amount of computing power that’s used, mining rigs generate a significant amount of heat, which is why mining operations look for colder environments to set up shop.

But it’s not only the cold weather that’s a draw for Quebec. The government’s aggressive effort, during the post World War II era, to build dams in its northern regions has proven enticing enough to pull mining operators away from existing bases that already have weather on their side.

Because of that work, Quebec has become one of the largest hydroelectric power producers in the world. Hydro Electric, with 37,000 megawatts of installed electricity capacity, routinely produces at surplus levels and is thus able to offer some of the lowest rates in North America to its commercial customers.

For data centers, Hydro Quebec charges as low 2.48 cents (in USD) per kilowatt hour, and 3.94 cents per kilowatt-hour for bitcoin miners (the slight increase for the latter due to mining operations’ smaller job creation and economic development footprint), Vincent said. These rates are anywhere from 50 percent to three times lower than in comparable parts of North America, according to data compiled by Hydro Quebec.

Historical consistency in pricing over time, and the assurance that the rates are not simply teasers that will jump overnight, are a key part of the value proposition for cryptocurrency mining operations, Vincent said. He added:

“We always succeed at staying below inflation. It’s been like that since 1963 and it’s not going to change.”

And while some have argued that cryptocurrency mining is environmentally degrading, there’s a growing trend by these mining operations toward finding competitive advantage via greater energy efficiency and resource optimization.

“In some hotter environments, the current ASIC equipment ends up having a very short shelf life of around six to nine months because it gets so hot, and the cost of cooling it isn’t worth the cost of the equipment,” Hill, who heads the Montreal-based Brudder Ventures, said, adding:

“It’s just easier to run it super hot, throw it away and buy a new one. It’s hugely wasteful.”

And moving to cooler climates, like Quebec, could help.

Political stability

Another driver behind Quebec’s accidental emergence as a cryptocurrency mining hub is that miners are increasingly looking for stable political environments where they can deploy their capital investments and plan their business efforts four to five years in advance with a higher degree of confidence.

While several of Hydro Quebec’s interested parties are based in North America, a significant number of mining organizations hail from countries, notably China, where the landscape for cryptocurrency mining, and cryptocurrencies in general, has become cloudier.

In China, for instance, rumors have been surfacing that the government plans on withdrawing preferential benefits such as cheap electricity and tax deductions to bitcoin mining operations. Plus, the People’s Bank of China has been one of the more aggressive regulators in the world when it comes to cryptocurrency, most recently issuing a ban on initial coin offerings and moving to shut down bitcoin exchanges.

Notably, Vincent said mining interest in Quebec began to tick upward significantly last fall after these moves by China.

He told CoinDesk:

“They don’t say it like that, but the fact that the rush of the demand came at pretty much the same time they were having problems in their previous jurisdiction, we could think there was a correlation.”

These concerns, along with a steady flow of reports about mining equipment seizures, kidnappings and game-playing by corrupt public officials in places like Venezuela, could make setting up shop in places where these risks are minimal more important than ever for mining operators.

A good problem

While Hydro Quebec is still, admittedly, trying to fully grasp this new class of customers, it’s been more than willing to roll out the welcome mat for them because of the enormity of the requests, not to mention the 24/7 nature of their operations.

To show mining operation’s scale, Vincent compared them to Hydro Quebec’s other customers.

Its smallest commercial customers, such as the Montreal Canadiens’ hockey arena, require five megawatts of electricity and a typical data center requires 30 to 60 megawatts. By contrast, “the top-three to top-five miners in world, most of them are talking to us, and the demand that they have right now is around 200 to 300 megawatts,” he said. “It’s huge.”

But with an industry as volatile as cryptocurrency, nothing is fully set in stone, and as a risk-averse, publicly owned utility, Hydro Quebec is minimizing its exposure by requiring miners to foot the upfront cost of the power connection and arrange a line of credit from a third party large enough to offset any losses in the event of something dire.

“The question for us is: is this a trend that will continue to stay at least as strong as it is right now?” Vincent said.

But for now, the biggest problem facing Hydro Quebec is finding enough buildings and locations that are suitable to be used as mining farms, as well as hiring more people who can help meet all of the requests from these types of potential clients, as quickly as they are coming in.

“[The miners] have this impression that they’re losing money every day, so they’re asking for big buildings with big interconnections and they want it tomorrow,” Vincent said, concluding:

“We have the capacity, but we’re not used to having so much big demand like this. It’s a good problem to have.”

Written by CoinDesk

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