As China’s crackdown on cryptocurrencies broadens to bitcoin miners, some of the industry’s biggest players are shifting operations overseas.

Bitmain, which runs China’s two largest bitcoin-mining collectives, is setting up regional headquarters in Singapore and now has mining operations in the U.S. and Canada, Wu Jihan, the company’s co-founder, said in an interview. BTC.Top, the third-biggest mining pool, is opening a facility in Canada and ViaBTC, ranked No. 4, has operations in Iceland and America, their founders said.

The moves underscore how China’s once-dominant role in the world of cryptocurrencies is shrinking as policy makers clamp down.

After banning initial coin offerings and calling on local exchanges to halt virtual currency trading last year, Chinese authorities outlined proposals this week to discourage bitcoin mining -- the computing process that makes transactions with the cryptocurrency possible. Officials plan to limit the industry’s power use and have asked local governments to guide miners toward an “orderly” exit from the business, people familiar with the matter said.

While the moves are unlikely to have a noticeable effect on bitcoin transaction speeds, they could reshape the cryptocurrency mining industry. Miners have until recently flocked to China because of the country’s inexpensive electricity, local chipmaking factories and cheap labor. They now have little choice but to look elsewhere.

“We chose Canada because of the relatively cheap cost, and the stability of the country and policies,” Jiang Zhuoer, founder of BTC.Top, said in an interview. He also considered locations in Iran and Russia.

Bloomberg News reported the Chinese government’s planned curbs on Wednesday. The People’s Bank of China didn’t respond to faxed requests for comment.

Bitcoin, which surged 15-fold last year, climbed about 6 percent at 5:32 a.m. New York time.

Source

No matter what negative news rocked the community, what hard fork happened or what skeptics stated, bitcoin held strong in 2017.

This is due in no small part to Japan. While the wider community is what breathes life into any coin, Japan is now bitcoin's heart; the country that is at the center of its support. There used to be a concern about the longevity of bitcoin, the safety of using such a novel new invention.

2017 is the year that fear died – and Japan is a big part of that reason.

Where other countries have had knee-jerk responses to bitcoin and blockchain technology, Japan's Financial Services Agency (FSA) expertly analyzed the technology and developed clear and fair laws to regulate virtual currency exchanges. This is no small matter – bitcoin exchanges are the onboard ramp to both bitcoin adoption as well as the future of virtual currencies.

Coming home

With all the positive news this year from Japan, it's only appropriate to acknowledge the country's deep history with cryptocurrency. While we may never know for sure if he (or she) is (or was) Japanese, Satoshi Nakamoto is a Japanese name. Japan is bitcoin's home.

But though bitcoin has always had strong roots in Japan, it was also the center of its biggest controversy.

Some say that Mt. Gox's implosion, now nearly four years removed, was the worst event to ever happen to bitcoin. The numbers were staggering. 650,000 bitcoins, worth around $437 million at the time, were lost when the exchange abruptly closed. The company filed for bankruptcy. This affected over 127,000 customers around the world. Today, those lost bitcoins are worth nearly $9 billion.

Still, this event, while terrible, forced the Japanese regulators to step in and protect consumers.

That disruption, that explosion, is why Japan has become the most forward thinking jurisdiction for bitcoin and virtual currencies. The FSA's understanding of the technology, regardless of the bad or inexperienced actors early in the space, helped lay the foundation on which the rest of the world can begin to understand and fully accept bitcoin and other virtual currencies.

Starting on April 1 of this year, the Japanese government enacted an amendment to the Payment Services Act. These amendments, which BitFlyer helped establish, have been referred to as the Virtual Currency Act and alongside additional tax reform have provided three main pieces of regulation in 2017:

1: Legal clarification of bitcoin

The Virtual Currency Act described and identified what a virtual currency is, clarified that bitcoin is considered an asset and that bitcoin can be considered a payment method.

That act, however, did not declare bitcoin as a legal currency, as some have mistakenly professed.

2: Virtual currency exchange regulation

The Japan Financial Services Authority was granted the ability to both regulate, as well as issue licenses, to virtual currency exchanges in Japan. This cemented bitcoin as an established market in Japan, where the rules are clear and consumers can be protected.

BitFlyer was proud to be granted one of the first licenses of this sort earlier this year in September.

3: One additional piece of regulation from a different act

Lastly, while not part of the Virtual Currency Act, tax reform was pushed forward on July 1, which removed a consumption tax that dissuaded foreign investors from purchasing bitcoins on Japan's market. This opened up Japan’s markets to international investors.

Expanding bitcoin and blockchain usage

But while Japan has led the way, the rest of the world should learn from the regulations and research that has resulted.

Here, BitFlyer has been able to work closely with government organizations to provide research and information about the usability of bitcoin and blockchain technology. The research, just like bitcoin, is borderless and publicly available. BitFlyer has also been hard at work researching and developing a world-class enterprise blockchain called "miyabi." With a top speed of over 4,000 transactions per second, miyabi guarantees immutability, finality, Byzantine fault tolerance, low latency and has no single point of failure.

This work has not gone unnoticed.

The largest interbank clearing network in Japan has selected bitFlyer to demonstrate a proof of concept, utilizing miyabi to show how blockchain can be used to revolutionize the banking industry and create a much faster settlement platform. If adopted, the largest banks in Japan will be connected through blockchain and demonstrate to the world that enterprise blockchain can be implemented securely, creating a better and more united financial world.

These developments are why we believe 2018 will be another spectacular year for bitcoin.

Volume has been growing steadily through 2017, the price has been skyrocketing throughout the year, but most importantly, the last pieces for institutional investors to get involved with bitcoin are close at hand.

Even if a bitcoin ETF doesn't gain approval in 2018, the creation of futures products for bitcoin will allow for much more liquidity to enter the markets. Past just conventional derivatives, dozens of trading firms have sprung up over the last year to allow for boutique hedge funds, family offices, or even large-sized individual traders to access the virtual currency markets.

With all of these developments, bitFlyer has realized an incredible opportunity to harness all the liquidity in Japan to fuel these new marketplaces and service new traders. BitFlyer's bitcoin trade volume (including leveraged trading) is the largest in the world. Regardless of the massive inflow of volume institutional firms can bring through derivatives, trading firms will need to trade actual bitcoin for delivery.

BitFlyer's global expansion (such as the recently launched bitFlyer US exchange) seeks to service these markets directly, by providing institutions and individuals everywhere with the ability to participate with the largest source of bitcoin liquidity in the world: Japan.

Source

Boom! pre-sale sold out. congrats to gatcoin team   if the price of eth break 1400$ before 14 jan there is no ICO and all remening tokens will distrubited to pre-sale participants.

Could you please accelerate my transaction!
https://www.blocktrail.com/BTC/tx/69ac52af611282973c713ac496da16b5caa3ff24751a507905642474487208b4

thanks in advance

Could you please accelerate my transaction!
https://www.blocktrail.com/BTC/tx/69ac52af611282973c713ac496da16b5caa3ff24751a507905642474487208b4

thanks in advance

Could you please accelerate my tramsaction!
https://www.blocktrail.com/BTC/tx/69ac52af611282973c713ac496da16b5caa3ff24751a507905642474487208b4

thanks in advance

Germany joined European governments pushing for global bitcoin regulation amid mounting alarm that the world’s most popular digital currency is being used by money-launderers, drug traffickers and terrorists.

Germany’s Finance Ministry said it welcomed a proposal by French Finance Minister Bruno Le Maire to ask his counterparts in the Group of 20 to consider joint regulation of bitcoin. The concerns are shared by the Italian government, which is also open to discussing regulation, while the European Union is bringing in rules backed by the U.K. that would apply to bitcoin.

“It makes sense to discuss the speculative risks of virtual currencies and their impact on the financial system at international level,” the Finance Ministry in Berlin said in an emailed response to questions. The next meeting of G-20 finance ministers and central bank governors would be “a good opportunity to do so.”

Signs of growing European concern came as bitcoin took another step toward acceptability with the launch of futures trading Sunday night at CME Group Inc.’s venue. That’s a week after Chicago rival Cboe Global Markets Inc. introduced similar derivatives on the volatile cryptocurrency that was created in the wake of the 2008 financial crisis as an alternative to banks and government-issued currencies. Bitcoin was closing in on a fresh record of $20,000 on Monday.

The Finance Ministry in Germany, Europe’s biggest economy, “monitors developments in the financial market very closely,” it said. “This also applies to the current development of bitcoin.”

While Europe’s concerns have been voiced before in select forums about a currency which is stepping further into the mainstream financial world, Le Maire made those worries public in a weekend interview with France’s LCI television.

“I don’t like it,” Le Maire said of bitcoin. “It can hide activities such as drug trafficking and terrorism,” and he has concerns for savers. “There is an obvious speculative risk, we need to look at it, study it,” he said.

Money-Laundering

Italian Finance Minister Pier Carlo Padoan would be ready to discuss Le Maire’s proposal, according to a government official in Rome who asked not to be named because the ministry has yet to receive any request from Paris.

EU lawmakers and representatives of the member states meanwhile agreed on a revision of the bloc’s anti-money laundering rules Friday, extending the framework to firms that “are in charge of holding, storing and transferring virtual currencies,” according to a statement from the European Commission. These companies “will have to identify their customers and report any suspicious activity.”

Stephen Barclay, Economic Secretary to the British Treasury, told lawmakers on Nov. 3 that new rules would “bring virtual currency exchange platforms and custodian wallet providers into anti-money laundering and counter-terrorist financing regulation.”

For the British government, digital currencies “can be used to enable and facilitate cybercrime,” according to a note from the Treasury. “There is little current evidence of them being used to launder money, though this risk is expected to grow,” the Treasury said. “That is why these regulations will help.”

Two Nobel economics laureates denounced Bitcoin last month. Joseph Stiglitz said it should be outlawed, and doesn’t serve “any socially-useful function.” Robert J. Shiller said the attraction of the currency was a narrative akin to a “mystery movie” that draws in people who want to outsmart the system.

Germany’s financial supervisor Bafin also warned last month of the risks of cryptocurrencies for consumers. Elisabeth Roegele, Bafin’s chief executive director of securities supervision, said in a Nov. 30 speech that regulation at a purely national level was not enough because of digital currencies’ international dimension. “The Internet in particular does not know national borders,” Roegele said.
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From aspirational billboards in Tokyo’s chicest districts to looped videos on commuter trains promising “a bright tomorrow”, the rivalry is intense but the underlying ambition shared. For this boom to keep firing, they need “Mrs Watanabe” — Japan’s semi-mythical household investor — to get trading cryptocurrencies. But who is she, how vital has she been to bitcoin’s price surge above ¥2.0m and will her investment interest survive the rival attractions of a strong run for the yen in 2018?

In a note published last week, Tokyo-based analysts at Deutsche Bank had a shot at answering the first two questions, starting with the observation that an awful lot of the global bitcoin trade is indeed driven by Japanese investors trading on margin. Some exchanges put Japan’s average daily share of global volume at 40 per cent, though on some days it exceeds 60. And, despite the platforms’ all-out efforts to seduce Mrs Watanabe, many report that their most active customers remain 30-49-year-old men — the same investor type that, crucially, already accounts for 54 per cent of the global market in leveraged forex trading.

Other explanations for Japan’s embrace of bitcoin include the observation that, since the government declared that bitcoin profits had to be filed in income tax returns, the Japanese have been reluctant to sell and realise gains. Analysts have also resurrected a 2016 survey by the Bank of Japan suggesting that the Japanese are less financially literate than their US counterparts, particularly among the age group thought to be the biggest bitcoin aficionados.

Less well investigated, so far, is whether Japan’s extraordinary fascination with bitcoin arises, in significant part, because the yen has traded with such boringly low volatility this year after the Brexit-Trump high jinx of 2016. GMO Financial, one of Japan’s largest forex trading platforms, says that between January and the end of November, its margin forex volumes were 20 per cent down on the same period in 2016. Whatever Watanabe’s true age or gender, appetite for leveraged risk-taking is not diminished and as long as the yen is dull, bitcoin may remain the winner.
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As Bitcoin surges above $9,250 on the open this Sunday, I have to admit to having some real trepidation at these levels.

I have been a proponent of the view that Bitcoin and cryptocurrencies would benefit from the launch of ETFs and futures.  My view is that allowing for easier 'adoption' of Bitcoin will help fuel its growth as it lets new investors participate indirectly.  I should not limit that theory to just more traditional ways to invest, like ETFs and futures, but should also include easier ways to establish wallets and to own Bitcoin (and other cryptocurrencies) the 'traditional' way.  There are a growing number of 'easy' to use guides to getting Bitcoin (I have glanced at many but haven't followed through to verify how well they work of don't work).

I am convinced that ease of access and the potential for more mainstream products linked to Bitcoin has helped fuel its surge.

But now, I am concerned it has gone too far, too fast.

I have three major concerns that could slow the price rise or even cause it to have a significant correction (yes, I am converting from bullish Bitcoin to at best neutral).

Here are the three concerns:

1- Are all the ETF and Futures launches a 'sell the news' event?  Basically the question is, while I believe that easier adoption will lead to inflows, how much of that is priced in?  Have speculators loaded their electronic wallets with Bitcoin hoping to capitalize on the expected gains to the point, there won't be more expected gains?  Understanding when something is 'already' priced in is difficult at the best of times, let alone with something as complex and growing exponentially like Bitcoin, but, I can't help but wonder.  I have felt a switch in discussions I'm having over the last few weeks.  A subtle switch, but one where the Bitcoin bulls seem more eager to name ever higher price targets, while the agnostics seem more willing to do work and think about it more, rather than in a rush to get some money into Bitcoin.  The sort of behavior that may be indicating a 'sell the news' type of environment.
 
2- There are becoming too many competing investments which are causing some investors to question how 'real' the existing ones are.  Yes, I understand that ICO's aren't necessarily dilutive, if you can purchase them with Bitcoin, but it does start to appear odd when it seems like virtually every day, someone or some entity is announcing some new variation on the theme.
 
3- Fedcoin, the potential for the Fed could be classified within concern number 2, but is really only part of a larger, separate concern - that governments or central banks will push back.  I read this week, along with a lot of other people, an article describing that Bitcoin was now worth more than McDonald's.  While that sort of article is designed to 'shock' investors, especially more conservative investors, I think it represents a larger, growing concern that the 'establishment' has surrounding cryptocurrencies.  Whether the concerns are more focused on the potential for illegal funds to enter the system, taxation, controlling 'pump and dump' schemes or making your own job more difficult to manage, I'm sensing they are rising to the surface again.  I think we have hit another tipping point where to expect a response to attempt to slow down the growth and valuation of crytpocurrencies should be expected.  Something that has risen almost a 'ten-bagger' in less than a year is bound to attract attention.  Bitcoin rebounded strongly after the China crackdown, so this fear might be over-rated, but a more organized government or central bank crackdown shouldn't come as a surprise to anyone.  The bigger question, in my mind, is whether Bitcoin can withstand that - but that is a question for another day.

I am torn, because my thesis of 'ease of adoption' seems to be playing out and in general it is a long way from being fully played out, which by itself is supportive of greater price appreciation.  But, at the moment, my concerns are winning out and I'd be taking some chips, or bits, as the case may be, off the table.

Disclaimer: Any opinions expressed are those of Peter Tchir. This info is for educational and/or entertainment purposes only, so use at your own risk. He's not a broker-dealer or advisor of any kind.
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Central bankers say the success of bitcoin and other cryptocurrencies is just a bubble. But it keeps them awake at night because these private currencies threaten their control of the banking system and money supply, which could undermine the monetary policies they use to manage inflation.

With bitcoin smashing through the US$8,000 level for the first time this week after a 50 per cent climb in eight days, they are also worried they will be blamed if the market crashes.

This is why several central banks are advocating regulations to impose control. Others are even looking at whether to introduce their own digital currency and are testing payment platforms.

“The problem with bitcoin is that it could easily blow up and central banks could then be accused of not doing anything,” said Ewald Nowotny, an European Central Bank policymaker.



“So we’re trying to understand whether bank activity in relation to cryptocurrency trading needs to be better regulated.”

The global cryptocurrency market is worth US$245 billion, which is tiny compared with the trillion dollar plus balance sheets of the Bank of Japan, the US Federal Reserve or the ECB.

These institutions issue yen, US dollars and euros, by creating physical cash or by crediting banks’ accounts, as is the case with their bond-buying programmes.

Cryptocurrencies, however, are not centralised. They do not pass through regulated banks and traditional payment systems. Instead, they often use blockchain, an online ledger of transactions that is maintained by a network of anonymous computers on the internet.

This has raised concerns about their vulnerability to hackers, as underlined by a score of incidents in recent months, and their use to finance crime.

Cryptocurrencies holders also have a claim on a private, rather than a public entity, which could go bust or stop functioning.

For these reasons, and given their low adoption by retailers, central banks have dismissed cryptocurrencies as risky commodities with no bearing on the real economy.



“Bitcoin is a sort of tulip,” the ECB vice-president, Vitor Constancio, said in September, comparing it to the Dutch 17th century trading bubble. “It’s an instrument of speculation.”

China and South Korea, where cryptocurrency speculation is popular, banned fundraising through token launches, whereby a new cryptocurrency is sold to finance a product development.

Russia’s central bank said it would block websites selling bitcoin and its rivals while the ECB told European Union lawmakers last year “they should not seek … to promote the use of virtual currencies” because these could “in principle affect the central banks’ control over the supply of money” and inflation.

Yet Japan in April recognised bitcoin as legal tender and approved several companies as operators of cryptocurrency exchanges, but required them to register with the government.

The ECB, the BOJ and Germany’s Bundesbank are already testing blockchain, admitting it may have a future use for the settling of payments.

The BOJ last year set up a section in charge of fintech to offer guidance to banks seeking new business opportunities, and joined up with the ECB to study distributed ledger technology (DLT) such as blockchain. They concluded that blockchain was not mature enough to power the world’s biggest payment systems.

Commercial banks have so far been lukewarm to existing digital currencies.

But with electronic payments already supplanting cash, they are alert to the danger that they would lose business if their clients decided to switch to them.

For this reason, Swiss banking giant UBS is leading a consortium of six banks trying to create its own digital cash equivalent of each of the major currencies backed by central banks.

This would allow financial markets to make payments and settle transactions more quickly.

This poses risks for central bankers as the guardians of the banking and payment systems.

“(We could) wake up one day and most of the big banks have been eviscerated and most of that activity has moved elsewhere,” the St Louis Fed president, James Bullard, said recently.

This could lead to a financial crisis if regulators lost sight of the activity, he said.

Some central banks such as Sweden’s Riksbank and the Bank of England are also looking at the merits of introducing their own digital currency.



Holders would have a direct claim on the central bank – just like with banknotes but without the inconvenience of storing large amounts of cash.

In Sweden, where most retail payments are electronic, the Riksbank said it was looking into an e-krona for small payments between consumers, companies and authorities.

“An e-krona would give the general public access to a digital complement to cash guaranteed by the state and several payment services suppliers could connect to the e-krona system,” the Riksbank said.

A central bank digital currency could also change the way monetary policy is carried out by allowing central banks to inject liquidity directly into the real economy, bypassing the financial sector, if they want to boost inflation.

This could help make monetary policy more effective, according to a study by economists at the Bank of England.

But it could also be risky if depositors were tempted to convert their bank deposits into central bank money during a banking crisis, accelerating any run on commercial banks.

A senior BOJ official said last week that although technology was revolutionising banking, digital currencies will not replace physical money any time soon.

“It’s too far off,” Hiromi Yamaoka, the head of the BOJ’s payment and settlement systems department, said on the sidelines of a forum on financial innovation hosted by Thomson Reuters.

“It would change the banking system too drastically.”
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Sweden is Evolving into the Next Major Bitcoin Industry and Mining Market

Claire Ingram Bogusz, a researcher at Stockholm School of Economics, noted that Sweden’s bitcoin market is growing at a rapid rate, due to friendly regulatory frameworks for fintech startups and cryptocurrency mining.

“Sweden is among the leaders in the global bitcoin market. There’s a very high-level of knowledge about it here, and a high-level of digital competence in the Fintech space. We may not be the size of Hong Kong or London, but it’s hard to find that level of digital competence in other financial centres,” said Bogusz.


Sweden is already the second largest fintech hub in Europe, with venture capital firms, practical policies, and startup accelerators in place. According to Bogusz, investors in the Swedish fintech market have started to move over to the local bitcoin market, which has seen an exponential increase since the beginning of 2016.

More importantly, an increasing number of bitcoin miners and mining center operators have started to relocate to Sweden, given its cold climate that provides a naturally cool environment for bitcoin miners which tend to overheat, cheap electricity, and low-cost hydroelectric power.

Another region with cheap electricity and cold climate is the mountainous region of Northeastern China. Some of the world’s largest mining centers are already based in that region, due to the cost effectiveness of establishing business in an area in which electricity is cheaply supplied and abundant.

However, Chinese miners have already started to consider relocating to other regions given the uncertainty of the Chinese bitcoin and cryptocurrency markets. Cui, a founder and executive of a major bitcoin mining pool, who asked to remain anonymous in an interview with South China Morning Post due to the current regulatory stance of the Chinese government, stated:

“Many of us have already paid visit to Vietnam, Laos, Thailand, Russia and the US, negotiating electricity prices with local authorities and buying sites for future use. The business blueprint is bound to go overseas, even if there’s only a 1 per cent possibility that China’s crackdown against bitcoin would extend to mining.”

Cui, who participated in an interview with three other major bitcoin mining pools and their operators declined, further emphasized that the Chinese bitcoin mining industry deals with corrupt grid operators and electricity providers. He noted that bribery is common in the Chinese mining scene, as electricity providers have absolute control over their decision to restrict power supply to certain businesses that fail to comply with their demands.

“No one brags about it because it’s best to make a fortune in silence,” he said.


Liquidity has also become an issue for Chinese miners, as the Chinese government imposed a nationwide ban on cryptocurrency trading in October. It is more challenging for bitcoin miners to sell or distribute bitcoins they have produced.

In regions like Sweden that have electricity that is as cheap as China, colder climate that is necessary to operate mining pools, and friendly regulatory frameworks, bitcoin miners and mining centers can operate more efficiently with freedom, without having to deal with restrictions from local authorities.
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The electricity used to mine bitcoin this year is bigger than the annual usage of 159 countries



. New bitcoin is created by computers solving complex cryptographic problems, a process known as "mining."
. PowerCompare.co.uk says the amount of electricity used by computers mining bitcoin so far this year eclipses the annual   usage of countries like Ireland and most African countries.
. Bitcoin's electricity usage is coming under increasing scrutiny.

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LONDON — The amount of energy used by computers "mining" bitcoin so far this year is greater than the annual usage of almost 160 countries, according to new research.

Research by energy tariff comparison service PowerCompare.co.uk shows that the amount of energy expended mining bitcoin globally has already exceeded the amount used on average by Ireland and most African nations.

PowerCompare.co.uk used stats from Bitcoin and cryptocurrency data provider Digiconomist, which estimates that 29.05 TWh of electricity was used to mine bitcoin, compared to an estimated 25 TWh of electricity per year used by Ireland.

You can see a full list of the 159 countries whose energy usage is eclipsed by bitcoin here or see it visualised below (the orange countries are those that use less electricity than bitcoin mining):

 Bitcoin is a cryptocurrency that was created in 2009. It is designed to not be controlled by any one party and is underpinned by a system called blockchain, which records transactions.

To ensure transactions are not falsified or records of ownership changed, participants of the bitcoin network must sign off on transactions in "blocks" (hence, blockchain).

To incentivize people to do this work, which involves computers completing complex cryptographic problems, people who verify blocks are rewarded with freshly created bitcoin. Hence, this process is known as bitcoin "mining."

However, the creators of bitcoin designed the system so there would only ever be a limited supply of bitcoins to be mined (a maximum of 21 million). To ensure the longevity of the system, the cryptographic problems involved in the mining get progressively harder, meaning it takes longer to earn them.

Miners are turning to more powerful computers to complete these tasks and earn bitcoin. As a result, mining (and on the flipside, bitcoin transactions) are sucking up greater and greater amounts of electricity. Bitcoin transactions now use so much energy that the electricity used for a single trade could power a home for almost a whole month, according to Dutch bank ING.

The bulk of Bitcoin "mining" is done in China, where energy costs are comparatively cheaper than in places like the UK or US.

"The top six biggest mining pools from Antpool to BTCC are all largely based in China," Mati Greenspan, an analyst with trading platform eToro, said in an email earlier this month. "Some rough estimates put China's hashpower at more than 80% of the total network."

However, there is growing concern about what the environmental impact of all this electric usage could be. Most of the electricity generated in China comes from CO2 emitting fossil fuels. Greenspan said: "We need to be mindful of how that energy is created."
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Just as gold bars are lost at sea or $100 bills can burn, bitcoins can disappear from the Internet forever. When all 21 million bitcoins are mined by the year 2040, the actual amount available to trade or spend will be significantly lower.

According to new research from Chainalysis, a digital forensics firm that studies the bitcoin blockchain, 3.79 million bitcoins are already gone for good based on a high estimate—and 2.78 million based on a low one. Those numbers imply 17% to 23% of existing bitcoins, which are today worth around $8,500 each, are lost.

While others have speculated about the number of lost bitcoins, the Chainalysis findings are significant because they rely on a detailed empirical analysis of the blockchain, where all bitcoin transactions are recorded.

As the graphic above shows, Chainalysis’s conclusions rely on segmenting the existing bitcoin supply based on age and transaction activity. For some segments, the company used statistical sampling to determine the amount lost.

The segment “Mined Coins” reflects bitcoins mined in 2017 (which are presumed not to be lost), while “transactional” refers to those that have moved or spent in the last year—very few of which are lost. Likewise, the category of “Strategic Investors,” who have held their bitcoins for 1-2 years represent a very small share of the losses.

Here’s the data in another format, which shows how “Out of circulation” bitcoins—those mined 2-7 years ago and belonging to long-time investors known as “hodlers”—and those from the early days of bitcoin in 2009 and 2010 account for the vast majority of the lost coins:



These figures reflect bitcoins that are truly lost, and not hacked or otherwise stolen—in these cases, of course, the bitcoin is not lost since the thief has control of them.

Note the numbers above are based on the high estimate, and that the low estimate, which is based on only a 30% loss in “hodler” coins, puts the number of lost bitcoins at 2,767,468. Also, both estimates make a critical assumption that coins belonging to bitcoin’s inventor, Satoshi, are gone for good (more on that below).

In the future, more bitcoins will be lost. But the rate at which they disappear will be much lower than in the past since, now that they’re so valuable, people will be more vigilant about keeping track of them (unlike this poor fellow out who threw away a hard drive with the key to 7,500 bitcoins). Meanwhile, there is a question of whether the Chainalysis findings mean bitcoin is more scarce than people assume—or if the market has already priced the missing coins into the currency’s current value.

“That is a very complex question. On the one hand, direct calculations about market cap do not take lost coins into consideration. Considering how highly speculative this field is, those market cap calculations may make it into economic models of the market that impact spending activity,” said Chainalysis CEO Jonathan Levin. “Yet the market has adapted to the actual demand and supply available – just look at exchange behavior. Furthermore, it is well known monetary policy procedure to lower or increase fiat reserves to impact exchange rates. So the answer is yes and no.”

Lost Bitcoins and the Secret of Satoshi

Chainalysis, whose clients include the IRS and Europol, has made a name for itself in the bitcoin world because of its abundant data and sophisticated study of blockchain wallets. Law enforcement agencies rely on the company to provide detailed insights into who owns the currency and how it moves around.

Chainalysis’s overall methodology is confidential, but a spokesperson shared certain details about how the company assesses which bitcoins are lost. An important clue comes when there is a “fork” in the blockchain, such as the one this summer which led to the creation of a bitcoin clone known as Bitcoin Cash. Such events can lead to the owners of wallets that have been inactive for years to conduct a transaction, providing an opportunity for statistical analysis.

These sort of clues help inform the Chainalysis figure for the “hodler” category—wallets belonging to people who got into bitcoin before it hit the big time, and which represent the biggest source of uncertainty as to whether bitcoins are lost or just being hoarded.

As for the 2% of “‘transactional” bitcoins that Chainalysis determined to be gone, Levin says this is based on scraping the Internet for reports of lost coins. He added that the estimate of such losses, which can arise from a misdirected transaction or the loss of a private key through death or carelessness, is not based on statistical extrapolation and will be refined further in coming years.

Finally, there’s the question of what became of the bitcoins belonging to Satoshi, the pseudonymous creator of the crypto-currency, who has not been not been heard from since 2011. Chainalysis says wallets associated with Satoshi represent about 1 million bitcoins (the company will provide a more specific figure later this year), and that its model assumes that those coins—which date from a time when it was easy to mine 50 bitcoin with a laptop—are gone forever. This assumption is a big one and, if it proves to be incorrect, the number of circulating bitcoins could suddenly increase significantly and deliver a shock to the market.

Fortune asked Levin about what he found most surprising about the lost bitcoin findings.

“Firstly, we floated our findings to a few people and they all had different reactions about how surprising the figure was. But what I found most surprising/interesting was how when you unpack what it means to be “lost” things get even more confusing.” he said.
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Mark Cuban: Only invest in bitcoin if you're prepared to lose your money

There are some strong opinions when it comes to bitcoin, which has surged seven times in price this year.

Some of the biggest names on Wall Street are starting to embrace the digital currency, including Fundstrat's Tom Lee and value investor Bill Miller, who is running a fund with nearly a third of its assets in bitcoin.

One Dutch family even bet all they have on bitcoin.


Others are not fans at all. JPMorgan Chase CEO Jamie Dimon called bitcoin a "fraud," adding "it's worse than tulip bulbs. It won't end well." Billionaire investor Howard Marks called it a "pyramid scheme."

And then there's the camp occupying the middle ground, who don't say it's the best investment, but also don't say it's the worst investment.

Billionaire Mark Cuban seems to be among that group. As he told Vanity Fair, it's OK to invest up to 10 percent of your savings in high risk investments, including bitcoin and ethereum. You've just "got to pretend you've already lost your money," he said, adding that it's like throwing "the Hail Mary."

Tony Robbins has his own analogy for investing in bitcoin: It's "like going to Vegas," he told CNBC's "Fast Money."

Cuban and Robbins advise only betting on what you can afford to lose. If you win, great; if you don't, at least you only lost discretionary funds.

As for the best way to invest your money right now, go with a cheap S&P 500 SPX fund, says Cuban.
Source: https://www.cnbc.com/2017/11/22/mark-cuban-only-invest-in-bitcoin-if-youre-prepared-to-lose-your-money.html

South Korea’s financial watchdog has “no plans” to monitor cryptocurrency trading, according to a new report that circulated in local media. This will continue to be the case until South Korea recognizes cryptocurrency as a legitimate form of money.

FSS Not Likely to Monitor Cryptos
Head of the Financial Supervisory Service (FSS) Choe Heung-sik has made it clear that the oversight body has no intent to monitor or regulate the crypto markets. Choe was quoted by the Korea Times stating: “Though we are monitoring the practice of cryptocurrency trading, we don’t have plans right now to directly supervise exchanges. Supervision will come only after the legal recognition of digital tokens as a legitimate currency.”

The watchdog’s position alleviates some concerns that Seoul was planning to clamp down on the digital currency market. South Korea has quickly emerged as a central hub for cryptocurrency trading, but even that hasn’t stopped policymakers from shutting down initial coin offerings (ICOs). Coin offerings are a highly popular but controversial crowdfunding campaign that have generated well north of $3 billion this year.

Despite being one of the world’s most liquid bitcoin markets, South Korea has a track record of charging a higher premium for the digital asset. According to CCN, the premium was as high as $500 earlier this month.
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The country is home to some of the world’s biggest cryptocurrency exchanges, such as Bithumb, which recently experienced an outage that cost investors billions of won. As CCN states, every single cryptocurrency that was listed by Bithumb has succeeded, including Zcash and Qtum.

Valued at $1 billion, Qtum is the world’s twelfth largest digital asset by market cap. Meanwhile, Zcash clocks in at no. 15 with $836 million. A total of twelve digital currencies are valued at $1 billion or more, according to CoinMarketCap. The total value of all 1,200 or so digital currencies in circulation is more than $250 billion.

Daily trading volumes on South Korean exchanges has reached 2 trillion yuan, which is equivalent to roughly $1.4 billion USD. Industry data shows that the yuan is the third most traded fiat currency following the Japanese yen and U.S. dollar.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Source: https://hacked.com/south-korea-remain-laissez-faire-bitcoin-according-fss/

The global average bitcoin price has surpassed $8,300 earlier today, on November 24, as the South Korean market demonstrated trades with a premium rate of around 5 percent.



Since then, the price of bitcoin has fallen to $8,150, experiencing a slight correction. However, in the South Korean bitcoin market, the third largest market in the world behind Japan and the US, bitcoin is still being traded at a price of $8,450, with a $300 premium.


Historically, the South Korean bitcoin exchange market has demonstrated high premiums amidst strong bitcoin rallies. A surge in the price of bitcoin usually triggers general consumers and investors on major exchanges like Bithumb to invest in bitcoin, even with a substantial premium.

Last week, when the price of bitcoin plummeted from $7,200 to $5,600 and the price of Bitcoin Cash surged from $1,200 to $2,900, Bithumb processed twice as much as daily trades as the South Korean stock market KOSDAQ.

Although South Korea remains as a leading bitcoin market with high liquidity provided by Bithumb, Coinone, and Korbit, a sudden surge in demand for bitcoin initiated by an increase in the price of bitcoin triggers investors to buy bitcoin in a short period of time, causing premiums to appear.

Earlier today, when the bitcoin price reached $8,300, bitcoin was being traded at around $8,500 in South Korea. When the price of bitcoin recorded a slight correction and fell to $8,150, the $8,500 price remained in South Korea, as more traders rushed into invest in bitcoin.


The South Korean finance industry tends to follow the trend established by other leading regions like the US and Japan. For instance, the Wall Street Journal’s report in regards to JPMorgan’s plan to trade bitcoin futures upon the launch of CME’s bitcoin futures exchange on December 11, was relayed by nearly every mainstream news publication within South Korea, further increasing the demand for bitcoin from the public.

JPMorgan is the largest investment bank in the world, with a $341 billion market cap. Previously, when JPMorgan CEO Jamie Dimon falsely claimed that bitcoin is a fraud and that any trader within the firm who initiates in bitcoin trading will be fired, the South Korean finance industry reacted negatively and the demand for bitcoin decreased, until enthusiastic announcements from CME, Man Group, and other major financial institutions were released.

Hence, when the WSJ report was released, the South Korean finance sector along with its cryptocurrency community demonstrated optimism towards the mid-term growth trend of bitcoin.

More to that, the report of Choe Heung-sik, chief of the Financial Supervisory Service (FSS), revealed that the South Korean government will not impose strict regulations on cryptocurrency exchanges in the foreseeable future.

“Though we are monitoring the practice of cryptocurrency trading, we don’t have plans right now to directly supervise exchanges. Supervision will come only after the legal recognition of digital tokens as a legitimate currency,” said Choe.

Source: https://www.cryptocoinsnews.com/bitcoin-price-hits-new-time-high-south-korea-8450/

Old Mutual Global Investors, the UK-based asset manager, is taking positions in cryptocurrencies, such as bitcoin, through its Gold and Silver Fund, Bloomberg reports.

The fund, which manages $216m in mostly listed equities, started buying bitcoin in April, with a mandate to allocate up to 5% to cryptocurrencies, manager Ned Naylor-Leyland told Bloomberg on Thursday. The plan was to take profit from bitcoin as the price rose and reinvest it in gold and silver assets.

The bitcoin price exceeded the gold price for the first time in March. While the price of gold is up 8.7% over the past year, bitcoin has shot up 1,000%. This has caused many to label the cryptocurrency a bubble, although pundits point out that less than 1% of the world’s population owns it, suggesting that the price could rise further.

“The more the value of bitcoin goes up, the more seriously people are taking it,” said Chris Becker, an economic strategist at Investec Bank. Domestic fund managers were not yet investing in cryptocurrencies, although some global hedge funds were beginning to, he said.

It made sense to hold bitcoin in a precious metals fund, as the cryptocurrency’s characteristics were based on the same underlying principles as gold’s, said Becker. “Bitcoin’s supply curve declines geometrically over time, and although it’s not widely accepted as a medium of exchange, it could be used as a store of value. One is still exposed to high-price volatility, which is a feature of all nascent and shallow markets.”

Bitcoin could compete with gold as a global reserve or settlement asset, he said.

“Where gold is cumbersome to physically trade across the world, making large value payments in bitcoin is almost as easy as sending an e-mail.”

It was likely that the Old Mutual Gold and Silver Fund was taking a position in bitcoin to enhance its overall returns, Becker said.

Deon Gouws, chief investment officer at Credo Wealth, said the decision was “peculiar and not true to label. A typical gold fund investor wouldn’t invest in bitcoin, and vice versa.”

While Gouws owned the cryptocurrency in his personal capacity, it was not included in Credo Wealth’s basket of funds, which were targeted at conservative investors who wanted to protect their wealth rather than “get rich quick”.

Bitcoin was trading at $8,230 late on Wednesday, up from $736 a year go.
Source: https://www.businesslive.co.za/bd/companies/financial-services/2017-11-23-old-mutual-gold--silver-fund-is-now-trading-bitcoin--to-buy-more-gold-and-silver/

Cryptocurrencies “Too Far Off” to Kill Physical Cash: Bank of Japan Official

The head of the Japanese central bank’s payments department doesn’t see digital currencies like bitcoin replacing physical cash anytime in the near future.

Speaking at a FinTech forum in Tokyo on Wednesday, Bank of Japan (BOJ) senior official Hiromi Yamaoka revealed he doesn’t see the conventional banking industry under any immediate threat from digital currencies. Yamaoka, who heads the Japanese central bank’s payment and settlement systems department, opined physical cash is here to stay despite major disruptive gains led by financial technologies in recent years.

The central bank official is quoted by Reuters as stating:Yamaoka offered similar remarks last year, when stating digital currencies won’t replace the physical cash printed by central banks – particularly in countries like Japan with an ‘established financial infrastructure.’ Earlier in March this year, the official confirmed the central bank would “seriously consider” the prospect of issuing its own digital currency, an effort undertaken by several counterparts in China, Singapore, Canada and Russia, among several others.

ICOs: “Tremendous” Hype

Sticking with his opinions on the cryptocurrency industry, the central bank official claimed the hype surrounding initial coin offerings (ICOs), a hugely popular and radical new form of fundraising powered by cryptocurrencies, was “quite tremendous”.

He went on to add that blockchain technology, the underlying innovation of decentralized cryptocurrencies like bitcoin, aren’t mature enough to power the world’s biggest payment rails. Contrary to the central banker’s remarks, a number of Japanese banks are already testing blockchain-powered domestic fund transfers to replace ‘Zengin’, the current national payments clearing platform that restrictively allows money transfers between 8:30 AM and 3:30 PM in the country.

Despite its stature as one of the world’s leading economies and contrary to the notions of a technology-forward society, Japan is lagging behind China and Korea when it comes to cashless digital payments. The current adoption rate of digital payments in the country is a measly 19%, compared to both China and Korea at over 50%.

As a result, the government of Japan has mandated a FinTech growth strategy to double the adoption rate of digital payments, aiming to hit 40% to pull level with the United States within the next decade. Japan’s embracive stance toward financial technologies has already seen bitcoin recognized as legal tender in the country, following legislation that came into effect in April. Furthermore, Japan’s financial regulator recently granted regulatory licenses to 11 bitcoin exchanges to operate in the country.

Source: https://www.cryptocoinsnews.com/cryptocurrencies-far-off-kill-physical-cash-bank-japan-official/

On September 12, Jamie Dimon caused a stir (and selloff) within the cryptocurrency community when he lashed out at bitcoin, calling it a "fraud" which is "worse than tulip bulbs, predicting "it won't end well", will "blow up" and "someone is going to get killed." Oh, and just to make it clear, "any JPM trader caught trading bitcoin" would be "fired for being stupid."

After briefly plunging, since then the price of Bitcoin has doubled, and earlier today, Bloomberg quoted money manager David Kotok who said that "clients bring up bitcoin all the time. They think it’s cool. It has the newness, which is attractive to some people, though others would say newness is a risk they don’t want to take." For banks, as Lloyd Blankfein learned over the past month, this means they have a choice: either get with it, and make money on the latest investing craze, or stand aside and make nothing.

And now, none other than JPMorgan is "getting with it", because as the WSJ reports, despite Dimon's guarantee of a pink slip for any trader caught transaction in bitcoin, the bank is now looking at business opportunities in the planned bitcoin-futures market, which the CME has said it will launch by the end of the year. Specifically, J.P. Morgan is considering whether to provide its clients access to CME’s new bitcoin product through its futures-brokerage unit. That, the WSJ reports, means the bank’s customers could use it to trade bitcoin futures while J.P. Morgan collects fees for such services, seemingly in violation of its fiduciary duty considering its CEO just two months ago called the product a "fraud."

Oops.

The reversal is not definitive yet, and the process has involved assessing whether there is demand among J.P. Morgan’s customers for the proposed CME bitcoin contract, according to the WSJ source, although judging by the reverse inquiry, there clearly is.

And where JPM goes, others are sure to follow:
But, as everyone knows courtesy of repeat media appearances by the outspoken CEO, none of those banks has chief executive who has been as critical of bitcoin as Dimon, who has blasted it as a “fraud” and compared it with past financial bubbles. “If you’re stupid enough to buy it, you will pay the price for it one day,” he told a conference last month.

And now, in delightful irony, JPM is preparing to make money by offering this "fraud" to clients. This, also, just days after JPM was busted for assisting money laundering in Switzerland after accusing bitcoin of being used as a tool for money laundering.

Here, we naturally commisserate with the JPM chief: In a world in which as Mike Novogratz said earlier, retail interest in equities has been waning over the past decade as "investors no longer trust financial institutions", the only alternative to grip the public's trading and investing interest has been the very bitcoin (and other digital currencies) so loathed by establishment commercial and central banks, especially since the "money" is printed not by some central bank, but the universe of users themselves: a lack of control central banks would never willingly cede.

JPM's looming decision about whether to let customers trade bitcoin futures underscores the challenges that Wall Street firms face as the cryptocurrency emerges from the shadowy margins of the financial markets and draws growing investor interest. Meanwhile, CME CEO Terrence Duffy said in a CNBC interview this month he expects trading in bitcoin futures to begin the second week of December. Launching futures would bring the virtual currency a big step closer to the financial mainstream, making it easier for both large financial firms and retail investors to trade it.

Furthermore, as we showed in September, J.P. Morgan already gladly collects commcision for handling client trades of Bitcoin XBT, an ETN trading in Europe and tracking bitcoin. While the bank has said it doesn’t take positions in the note and simply routes customers’ buy and sell orders electronically to exchanges, it wouldn't be the first time JPM has lied about it considers prop trades (see the London Whale).

In any case, brokering trades in bitcoin futures would be similar, as JPM would be happy to collect a spread every time a client buys or sell the "fraud." And once in, JPM will have no choice but - as a matter of ego - to be the biggest. J.P. Morgan is the second-biggest futures broker in the U.S., second only to Goldman, CFTC data show.

And as more and more Wall Street firms scramble to offer the retail public access to bitcoin, last week IB CEO Thomas Peterffy, warned that CME needs to ring-fence its system for clearing bitcoin futures trades from the rest of its markets, or else losses in bitcoin could end up rippling through the broader financial system.
Ironically, this legitimate warning appears to have only cemented JPM's resolve to become a bitcoin middleman, and soon, principal. Which brings us to a question we first asked two months ago: "which is it Jamie?"

Source: http://www.zerohedge.com/news/2017-11-21/jpmorgan-capitulates-may-help-clients-trade-bitcoin-futures-fee

Bitcoin infrastructure company Blockstream has expanded its strategic partnership with Japanese IT firm Digital Garage.

Aimed to foster blockchain development in Japan, the multi-year technology partnership comes following the pick-up in interest around bitcoin and blockchain technology in the country, said Kaoru Hayashi, group CEO of Digital Garage, in a press release.

According to Dr. Adam Back, CEO of Blockstream:
With the news, Blockstream has announced a new investment from the DG Lab Fund – a collaboration between Digital Garage and Daiwa Securities Group. The funding brings Blockstream's total raised so far to over $80 million, the release states.

DG Lab, along with Japanese inter-dealer broker The Tokyo Tanshi, will collaborate with Blockstream to issue local currencies using blockchain technology, as well as enter the over-the-counter (OTC) cryptocurrency market.

Enthusiasm for blockchain and cryptocurrencies is rapidly growing in Japan, and a number of companies and institutions have moved to explore the use cases of blockchain technology in various sectors.

Digital services company GMO Internet announced a blockchain know-your-customer (KYC) tool last month, designed to allow banks to verify the identity of new customers. Additionally, the nation's utility giant TEPCO revealed in October that it is exploring the technology to lower risks of over-centralized energy sources, among other use cases.

A number of financial institutions, including Bank of Yokohama and Mizuho Financial Group, are also trialing blockchain as a technology to lower the costs of money transfers.

Source: https://www.coindesk.com/blockstream-digital-garage-team-up-to-foster-blockchain-in-japan/