This Week in Bitcoin: Kraken, Korea and a Whole Lotta Crazy
This week in bitcoin was all about Korea, although every week in bitcoin is all about Korea. Markets dropping? Blame Korea. Markets soaring? Credit Korea. Zero fee trading sends a pointless altcoin pumping? You bet it comes from Korea. While real news, fake news, and news whose legitimacy is a matter of dispute emanated from the east, there were big stories breaking stateside, like the Miami bitcoin conference that can’t take bitcoin.
You Heard It Here First
We’re not prone to back slapping at news.Bitcoin.com, as smugness is never a good look. It would be fair to say however that a lot of this week’s biggest bitcoin stories started here before being picked up by the mainstream media, including European bank Nordea banning employees from owning cryptocurrency. Welcome to Miami where your dirty crypto’s no good, we reported, in another scoop, after the city’s annual bitcoin conference stopped accepting bitcoin, citing fees and congestion.
Bitcoin haters had a field day with that one including famed economist Paul Krugman, which gave us an opportunity to dredge up his most famous quote for posterity:
By 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s.
That one never tires. It wasn’t just bitcoin conferences that declared they were no longer handling bitcoin; Microsoft also announced that it had stopped accepting bitcoin for similar reasons, before reneging and declaring that it’s now accepting bitcoin again. Glad we’ve cleared that one up.
Korean Gloom and Japanese Cheer
There were so many stories emanating from South Korea this week in bitcoin it’s hard to know where to start. It all started with officials urging other nations to support them in curbing crypto trading, and from there morphed into the country’s banks being forced to stop serving South Korean crypto exchanges. For more information on South Korean developments – as well as those originating in Brazil, Venezuela, and Japan – our trusty scribe Kevin Helms has got you covered. It was he who broke this week’s most uplifting story, about Japan’s virtual currency girls, writing:
Their songs incorporate reminders, advice, and warnings related to cryptocurrency trading. The girls receive their salaries in bitcoin and the show’s tickets and merchandise are also sold for the cryptocurrency.
You love, you lose. Another story from the east was that of Malaysia issuing a cease and desist order on the Copycash ICO. These events are becoming commonplace now, and not just in Asia; a few days ago the SEC suspended trading in a dubious blockchain firm with no product. It would be fair to say the prevailing mood in bitcoin this week was one of uncertainty, with developments in Asia, as always, dictating market sentiment.
Rumors of China banning bitcoin mining and South Korea shutting down exchanges for being complicit in money laundering have abounded. Despite these stories having been refuted or at least shown to be exaggerated, the fear has manifested in the markets, with bitcoin dropping to around $13,000 at its lowest point, and many of this year’s most hyped altcoins – ripple, tron, and stellar – losing as much as 25% of their value.
Ripplets were still seething over last week’s story about XRP gateways freezing customer funds, and thus didn’t take kindly to Monday’s piece on vaporware – cryptocurrency projects with market caps worth billions of dollars but no working product – in which tron, ripple, verge, and cardano were pilloried. That was this week’s second most popular story, second only to one about bitcoin diamond casually doing a 40x – and then predictably plummeting.
Release the Kraken
On Thursday, Kraken went down and then stayed down for no less than 40 hours while it chased down a pesky bug in the system. Upon its return, Kraken promised fee-free trading for all by means of apology. 48 hours since returning to life, Kraken still hasn’t enabled withdrawals however. It wasn’t the only exchange to experience problems this week. A number of cryptocurrency exchange oddities have surfaced lately, although the craziest tales, as always, come from the weird and wonderful world of ICOs.
There was the story about the porn ICO CEO who did a ghost with contributors’ funds, and, in the same article, the tale of Dadi’s demise. That ICO was being shilled as one of the hottest tickets in town until it emerged that, like Tron, large chunks of its white paper had been plagiarized. Desperate not to be left behind, Kodak also plunged itself into the ICO game and yet another stagnant company invoked the blockchain word to give itself a lift.
The trouble with all this ICO madness is that applying rational thinking to projects doesn’t always work. This week, for example, the Peatcoin ICO was launched, promising “Tokenized investment in peat processing and extraction”. It would be easy to dismiss the project out of hand, as this writer did with Dentacoin earlier this year. The trouble is, the dental industry’s proprietary token now has a $2.5 billion market cap that fleetingly placed it higher than Zcash earlier this week. What a time to be alive.
Written by Bitcoin.com
No, You Don’t Have to Buy a Whole Bitcoin
“How much is bitcoin?”
“Well, that’s too expensive. I can’t afford that.”
It’s a conversation that has surely happened thousands of times over the past several months as a new swarm of people find themselves enchanted by the cryptocurrency space and its tremendous gains.
And it reveals not only a misunderstanding, but also a psychological barrier that many face stepping into the scene for their first time.
Since so much emphasis is placed on how much “one” bitcoin is worth across the industry, new users often come in thinking that if they want to participate, they’ll have to fork over tens of thousands of dollars to buy a whole bitcoin.
But actually, that isn’t the case – it’s possible to buy a half of a bitcoin, a quarter of a bitcoin or even a fraction of a percent of a bitcoin.
Yet, that’s not always clear to new people entering the market, and many believe that’s why a handful of altcoins – including dogecoin and dentacoin, both of which recently reached market caps of more than $1 billion – are seeing a pump in their price, as they offer an affordable way to get into the cryptocurrency markets in whole units.
And this confusion is (partly) why developer Jimmy Song argues some standardization should occur in what the industry calls smaller units of bitcoin.
Toward this goal, Song released a standards proposal that seeks to express one one-millionth of a bitcoin (about one cent at today’s prices) as a “bit.” And he’s nudging wallet providers, exchanges and other bitcoin businesses to support the proposal.
If widely adopted, he hopes it will put an end to this confusion, and make new crypto users more apt to purchase bitcoin, if even in tiny amounts, instead of cryptocurrencies that he thinks might come back to bite them, since many of the cheap altcoins don’t have much technical merit to back them up.
Rise of the ‘bits’
The problem now is that more traditional dollar units, such as $5, when converted to bitcoin look daunting and messy – at 0.000345 bitcoin.
But with Song’s proposal – which he’s released in the form of a bitcoin improvement proposal, or BIP – that dollar value would instead be 345 bits, still a mental juggle, but arguably less confusing, since it’s in whole numbers and not decimals.
“For whatever psychological reason, normal people have trouble understanding decimals and fractions. $0.002 is weirder than $200.00,” said Erik Voorhees, co-founder and CEO of ShapeShift, which supports Song’s proposal, adding:
“For bitcoin to be a global, commonly used currency, it would certainly be helpful to have a denomination that allows people to express prices in integers (2,000 bits for a coffee) rather than a decimal.”
Adding to the mental benefits, Song also said the standardizing “bit” would remove what he calls “unit bias.”
According to Song, people don’t like having what looks like such a small amount of bitcoin, or money in general for that matter. Bitcoin’s price rise at the end of 2017, only exacerbated that problem, adding even more zeros in between the positive numbers and the decimal.
Poking fun at all the recent bitcoin forks, Song said, a group of people could have success enticing a new wave of crypto buyers by splitting off bitcoin with the goal of moving bitcoin’s decimal system six positions.
While others have proposed similar unit changes in the past, Song’s proposal seems to be gaining transaction with exchanges and other companies, which is all the proposal needs to succeed – getting businesses to use the unit to display not only how much bitcoin is in an individual’s wallet but also, within merchants stores, how much things cost.
And even though, Song’s proposal is targeted at bitcoin, it could serve as an outline for how other cryptocurrencies, such as ethereum, could update their units to be more user-friendly.
Although the idea of the proposal is to limit confusion, it’s garnered its fair share of criticism, with those against claiming it could add to the confusion instead.
The critics say, for instance, that if not all companies roll out the standard at the same time – and ShapeShift uses “bits,” while Coinbase sticks with “bitcoin” – when sending bitcoin from one wallet to another, they could either think they somehow earned money or lost money.
Voorhees, for one, even agreed this was a concern, but argued that it shouldn’t stop bitcoin companies from eventually adopting the standard.
“There will undoubtedly be some mistakes and friction as the new term gains usage, but for the purpose of language and mathematical simplification, the net result should be beneficial to bitcoin’s adoption,” he said.
Meanwhile, Song stressed that even though he thinks it would be a move in the right direction, like most things in the cryptocurrency world, it’s up to the community to decide if they want to adopt the system or not.
Still, many more exchanges and businesses would need to adopt the change to get the ball rolling. Song has been tweeting at various exchanges and companies – including CoinMarketCap, one of the most popular sites for checking cryptocurrency prices – suggesting they move to “bits.”
“This is meant to be a community-driven initiative and the benefits will hopefully be obvious to businesses.”
Written by CoinDesk
Bitcoin Halts Week-Long Slide But Battles With Regulatory Pressure
After four days of straight losses from Monday to Thursday, Bitcoin seems to have leveled off somewhat. However, 2018 has not started well as this marks the second week in a row of poor performances.
While Bitcoiners have become accustomed to spikes and rallies, this flattening out of the price graph should still be seen as a positive. It comes over news of the South Korean justice minister’sbacktracking of a proposal to ban local cryptocurrency exchanges in the country.
Regulators have long been behind the eightball when has come to controlling digital currencies as they work on a case-by-case basis. Time has now moved along swiftly as governments and officials have had their chance to put plans together which have affected the market.
A week of lows
The past four days have seen Bitcoin down as much as 23 percent at a point in his second week of 2018, but far from being a dip, it has been a steady decline – far more nerve-wracking.
Cryptocurrencies across the board have had some tough times in general, as Bitcoin price is inexplicably linked to most of the top altcoins.
Talks of a bear market brewing due to patterns derived in the graphs have many searching for answers as to why the cryptocurrency has taken such a plunge since the highs of mid-December last year.
One factor that has historically laid big blows on Bitcoin has been regulatory stirrings. The announcement by China that it would be banning ICOs and then following that exchanges, sent the market spiraling.
This week, there were similar fears realized – albeit falsely – when the South Korean Ministry of Justice announced independently that they would be banning trading in cryptocurrency. This was done without the consent of the Ministry of Strategy and Justice and other government agencies involved in the South Korean cryptocurrency regulation task force.
The market however reacted to the news which has since been clarified by the Blue House, the executive office and official residence of the South Korean President.
According to a spokesperson from the South Korean cryptocurrency task force, there are no plans to ban cryptocurrencies.
“The South Korean government has no other choice but to follow the regulatory frameworks and trends established by other leading governments. While there certainly exists a negative reputation attached to the cryptocurrencies, the government’s stance is to allow what has to be allowed, for the benefit of the South Korean market.”
China’s third strike
After banning ICOs, and then exchanges, Chinese regulators are now looking to go after minersin the Socialist Republic, a country that holds the majority of Bitcoin mining power.
The reason for China being a powerhouse of mining has to do with the cheap and often subsidized power, which miners tap into. The plans are now to make this essential power more expensive, cutting into the profit margins.
In the US, the SEC, which has had a bit of a history in the cryptocurrency space already, is starting to make a lot more noise in its attempt to regulate.
Fears of money laundering and the use of cryptocurrencies for other fraudulent uses, has seen Commodity Futures Trading Commission Chairman J. Christopher Giancarlo take up the mantle of federal overseer of digital currencies.
It’s only weakness
Regulators, even in China, have never been able to kill off Bitcoin. However, it is clear that they have a lot of clout when it comes to affecting the market price.
This latest bout of regulatory muscle-flexing shows that there is a need for some parity between the regulators and the digital currency economy before things can continue on their merry way.
Written by CoinTelegraph
5 Tips For Finding The Next Bitcoin, Ethereum, And Ripple
Bitcoin, Ehereum, Ripple, Litecoin, and a few other high visible cryptocurrencies have made early investors very rich, very quickly. And they could make many more investors rich, provided that they continue to rise at the recent feverish pace that parallels big lottery Jackpots.
But that’s unlikely, as these investments cannot defy the numbers game. This means that would-be rich investors must look for the next lucky coin elsewhere on the cryptocurrency list, while the hype for the digital currencies lasts.
Source: Coinmarketcap.com, Saturday, January 13, 2018, 10.30am
Still, picking up the next winners in the cryptocurrency space is a very difficult thing for a couple of reasons. One of them is that there are more than 1000 cryptocurrencies to choose from—1426 to be precise. Another reason is that there are no “fundamental” metrics to appraise the “intrinsic” value of each coin, as is the case with conventional assets. The only thing available is a site with a promise the coin holds to change the capitalist world, should it be adopted to replace national currencies in day-to-day transactions.
Here’s a quote from Eric Pichet, a KEDGE professor, regarding the “fundamentals” of Bitcoin, which applies to other cryptocurrencies. “Bitcoin has some of the attributes of a headless currency. Nevertheless, it has no intrinsic value ‒ not even as a collector’s item because it is intangible,” emphasizes Eric Pichet. “Nor is it a financial asset like a stock or bond because it has no returns. Its only investment value lies in the possibility of appreciation bestowed on it by those who hold it: it is an asset with no underlying.”
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment. Disclosure: I don’t own any cryptocoins or tokens.]
- Look for cryptocurrencies trading at less than a dollar. That’s important for a couple of reasons. One of them is that a price below a dollar creates the illusion that the cryptocurrencyis “cheap,” especially for investors with little funds to invest. Another is that smaller numbers can more easily double and triple than larger numbers can, adding to hype that could eventually create a cascade. That’s consistent with the astronomical gains we have seen in cryptocurrencies trading a couple of decimals behind zero. Like RubleBit, which trades at 0.038, up 522% in the last seven days. And CYDER, which trades at 0.082, up 7,412%–see table.
- Check cryptocurrency websites to assesswhich coins are most promising. In terms of their potential to be adopted as a currency, that is. In fact, this method can be used to estimate the “intrinsic” value of each coin, once it reaches a certain level of adoption, by using the quantity theory of money.
- Check Reddit to find out which coins have a community following. Reddit communities consist of “innovators” and “early adopters.” Though small, these groups help spread the buzz to a larger group the “early majority,” stimulating demand for the coin. And that means higher prices, when coupled together with a fixed supply.
- Look for cryptocurrencies with a high circulated supply versus the maximum supply. For an obvious reason: these cryptocurrenciesare more likely to rise in price with rising demand, as there’s little supply left to match it.
- Check cryptocurrency volume and price charts. You want to consider cryptocurrencies with a chart of accelerating price and volume growth, as this kind ofchart is a confirmation of momentum for these currencies.
- Of course, these tips should be taken with extreme caution. Investing on hype rather than fundamentals is an extremely risky game, as it’s hard to predict when the hype will fade, and coins will become near-worthless.
Written by Forbes