[Bitcoin’s latest record high makes Satoshi Nakamoto the 247th richest person in the world]

Bitcoin’s latest record high makes Satoshi Nakamoto the 247th richest person in the world

Bitcoin recorded a new high today, hitting $5,991 on the benchmark CoinDesk price index. On major exchanges like Bitfinex and Bitstamp, the price briefly crossed $6,000 intraday.

While bitcoin bulls celebrate yet another milestone for the cryptocurrency, there is one major beneficiary to what has essentially been a nine year-long rally: bitcoin’s inventor, Satoshi Nakamoto. The pseudonymous creator is estimated to own 980,000 bitcoins, amassed from mining the cryptocurrency in its early days. The stash has remained untouched for years.
What is that worth today? At $6,000 a coin, Satoshi would be worth $5.9 billion. That would put him/her/they at number 247 on Forbes’ list of the world’s richest people. Satoshi is just below Wal-Mart heiress Ann Walton Kroenke and Samsung scion Jay Lee; and above Alibaba’s Joseph Tsai and María Asunción Aramburuzabala, who inherited the Corona brewery fortune.
That’s a good return for writing a piece of nine-year-old, open-source software. And arguably, even $5.9 billion is too small a reward for inventing “magic internet money.”

https://qz.com/1107843/bitcoins-btc-new-record-price-of-6000-means-satoshi-nakamoto-is-worth-5-9-billion/

If you thought you missed your chance to buy Bitcoin when the price broke $6,000 for the first time Friday, there’s one argument that might convince you otherwise.

It’s not for the faint of heart. But with the Bitcoin price up more than 42% this month alone, and up 20% from its low just three days ago, the cryptocurrency’s returns have beaten just about everything available on the stock market, defying repeated warnings from the likes of J.P. Morgan CEO Jamie Dimon and former Fed chair Ben Bernanke. As of midday Saturday, Bitcoin was trading at nearly $6,200. Now, investors are fretting they’ll miss out on the windfall of a lifetime if they wait any longer.

Historically, of course, legendary investors such as Warren Buffett have advised against buying assets when their price is high, arguing that the best way to make money is to buy low, and, ideally, sell high. Yet a chart created by an influential analyst and investor illustrates why he predicts the Bitcoin price could go higher still — and in fact, may reach as high as $7,400 before its next significant dip.



The Bitcoin chart relies on technical analysis, a field of investing that is somewhat controversial because buying decisions are based on the movement of a particular stock or other asset, rather than on the fundamental valuation or future opportunity of the underlying company or security. While some investors reject this approach as trying to time the market — a notoriously difficult task — there is evidence that it can sometimes pay off.

And if there were ever a time to use technical analysis, it might be with Bitcoin, whose price is not tied to any company, nor pegged to any other currency or asset, nor even related to an actual use case. What’s more, the Bitcoin price, which largely trades on hype and abstract visions of its long-term potential, is not only exceptionally volatile, but tends to trade in an unusual undulating formation that enthusiasts have come to call “waves” — where a correction of as much as 30% is common between new highs.

In this case, JC Parets, a chartered market technician who is the president and founder of All Star Charts, observed that the price of Bitcoin has moved upward at intervals resembling the Fibonacci sequence, a famous mathematical pattern that also occurs in nature in everything from the inner spiral of a seashell to pinecones.

“Talk about Fibonacci—I mean, dude, does it get any cleaner than this?” Parets said last week in a presentation at the Stocktoberfest conference, hosted by the financial social media site Stocktwits in Coronado, Calif. With Fibonacci, the length of the next segment is equal to the sum of the two preceding segments. In Parets’ chart above, he shows that Bitcoin’s rallies, since the price surpassed its 2013 high, have followed a similar pattern, where each new leg up corresponds to a percentage increase as predicted by the Fibonacci series.

“I mean, guys, this is like to the penny,” Parets added. He breaks it down further in the chart below.



The prediction only holds, Parets maintains, if the Bitcoin price remains above roughly $4,700. But as long as it does, he believes Bitcoin could rise to at least about $7,400, as indicated in the chart. For now, though, Parets is giving Bitcoin a more conservative price target: $6,500.

“I don’t care if Bitcoin triples or goes to zero, I really don’t care at all, but from a risk-reward standpoint, I love it long,” he said. “If we’re above $4,700, we want to be long with a target of $6,500 — that’s a great risk-reward, let it go to zero after that!”

One caveat: Parets’ Bitcoin price prediction does not have any timeline attached, which means it could happen imminently, or not for years — as long as it continues to mirror the Fibonacci sequence.

“Yes, theoretically, it can hit our targets tonight,” he told Fortune after Bitcoin passed the $6,000 mark. “Who knows?”

http://fortune.com/2017/10/21/bitcoin-price-chart/

Bitcoin one step closer to being regulated in Australia under new anti-money laundering laws


Bitcoin is one step closer to being regulated in Australia, with Parliament expected to this week vote on a bill to strengthen the nation's anti-money laundering laws.

That was almost a ten-fold surge from last October, when each unit was worth just $803 (or $US630). But even at that lower price, many people thought the digital currency was "over-valued

The proposed laws

If the new laws are passed, the financial intelligence regulator AUSTRAC will be given new powers to police digital currency exchanges — where traders buy and sell Bitcoin, Ethereum and other cryptocurrencies.

These exchanges like Independent Reserve and BTC Markets would need to be registered under the new regime.

It will also become an offence for an "unregistered person" to provide digital currency exchange services.

"Businesses that trade digital currencies for money, and vice versa, will be required to enrol and register with AUSTRAC," Justice Minister Michael Keenan said in a Parliamentary speech about the bill in August.

Mr Keenan said these businesses would need to "establish, implement and maintain an AML/CTF (anti-money laundering and counter-terrorism financing) program".

In addition, they would have to "report threshold transactions and suspicious matters to AUSTRAC, and keep appropriate records".

This is a softer approach compared to China, which banned initial coin offerings (ICOs) last month — a move which led to Bitcoin's value dropping by more than US$1,000 to $US3,226 (on September 14).

Digital currencies and crime

The Australian Criminal Intelligence Commission (ACIC) has been a strong advocate for regulating digital currencies.

"Virtual currencies, such as Bitcoin, are increasingly being used by serious and organised crime groups," ACIC said in its report on Australian organised crime, released in August.

"They are a form of currency that can be sold anonymously online, without reliance on a central bank or financial institution to facilitate transactions."

They can be used on darknet marketplaces like Silk Road 3.0 and Valhalla Marketplace to facilitate the sale and trafficking of illicit drugs, firearms, precursor chemicals and child exploitation materials.

They are also the currency of choice when it comes to cyber attacks.

The hackers behind the Wannacry ransomware attack, which infected nearly 100 countries around the world demanded their ransom be paid with Bitcoin.

That was also the case with the Petya cyber attack in June, which targeted the Cadbury chocolate factory in Tasmania.

But the buying and selling of Bitcoin and similar virtual currencies is currently unregulated in Australia due to a loophole in existing laws.

The loophole is that the term "e-currencies" is defined too specifically in the Anti-Money Laundering and Counter-Terrorism Financing Act.

"E-currencies" are defined as "an internet-based, electronic means of exchange" backed by something physical like a "precious metal" (gold or silver), or "bullion".

This problem was pointed out by the Attorney-General's Department's (AGD) submissions in submissions to the Senate.

In particular, the AGD said this specific definition does not cover Bitcoin. That is because the digital currency is not backed by physical assets at all — but by a "cryptographic algorithm".

full: http://www.abc.net.au/news/2017-10-23/bitcoin-one-step-closer-to-being-regulated-in-australia/9058582

You can now purchase citizenship of the country with the world’s 34th most powerful passport with bitcoin.
The Vanuatu Information Center, which handles applications to the Pacific island country’s honorary citizenship program, announced this month that the center has secured government approval for taking fee payment in bitcoin. It’s the first citizenship investment program to allow payments in a cryptocurrency, the center noted in a statement. The immigration fee of $280,000 translates into around 58 bitcoins at the current market price of $4,843.
“Crypto-currency transactions are set to become very entrenched in global finance,” James Harris, managing director of the center and official representative for the investment citizenship program, told Quartz via email. “It makes sense for countries offering Citizenship by Investment Programs to respond to the inevitable adoption of crypto-currency for such transactions.”
Vanuatu citizenship entitles individuals to reside on the island, and travel to some 125 countries, including Britan, Russia, and nations in the European Union, without a visa. Digital currency transactions involve a fully traceable and encrypted ledger, which advocates say increases transparency and security. In this case, payment will be taken through a nominated bitcoin exchange. “We are ready to immediately commence the processing of applicants and fully expect that within days to receive the first application under this new payment system,” Harris wrote.

The news came amid global regulations against the cryptotoken frenzy worldwide in September. On the same day the Vanuatu government authorized the center to take bitcoin payment, South Korea announced a ban on initial coin offerings(ICOs), the virtual currency-based funding mechanism that has enabled firms to raise millions of dollars in minutes. China also halted digital currency trading services in mid-September. Meanwhile Vanuatu’s neighbor, Australia, released guidelines the same month to businesses raising funds through ICOs.
In 2014, Roger Ver, an investor known as the “Bitcoin Jesus,” announced he had set up a company to handle payments in bitcoin for real estate that would come with citizenship of the Caribbean island of St. Kitts and Nevis. The local government later said that they had never accepted bitcoin payment for citizenship and didn’t plan to.
Vanuatu doesn’t directly accept bitcoin either—the center has to convert the bitcoin it receives into dollars for the government. Harris thinks other investment citizenship programs are eventually likely to follow Vanuatu’s example of allowing investors to transact this way.
“We understand that there are significant numbers of bitcoin investors who have made significant returns (if you consider the 1,000% increase in value of bitcoin in the past 18 months),” he told Quartz. “We are creating a channel for these investors to realize some of their returns and convert their crypto holdings into a highly valuable personal asset for their future.”

https://qz.com/1099475/a-small-pacific-island-will-now-let-you-buy-citizenship-with-bitcoin/

   The New York Stock Exchange’s bid to list a bitcoin investment fund has been scuttled, in a further sign that regulation remains a hurdle for financiers attempting to bring digital currencies to mainstream markets.

The NYSE’s Arca platform, the most popular US venue for listing exchange traded funds, has withdrawn an application for regulatory approval to list shares of the four-year-old Bitcoin Investment Trust, according to the fund’s sponsor Grayscale Investments.

Grayscale, which trades the Bitcoin Investment Trust “over the counter” on less formal exchanges, said in a statement that it “does not believe there have been enough regulatory developments” to prompt the Securities and Exchange Commission to approve the application.

The NYSE declined to comment.

According to regulatory filings, Arca submitted the request for approval to the SEC on behalf of Grayscale in January 2017.

The Bitcoin Investment Trust, which had holdings of the digital currency worth $800m at the end of August, allows shareholders to “gain exposure to the price performance of bitcoin”, according to Grayscale’s website.

Attempts to introduce bitcoin funds to exchanges have come amid heightened interest in digital currencies.

The soaring price of bitcoin, meanwhile, has polarised opinion between those who view it as a speculative bubble and those who see the beginnings of a revolution in financial services, facilitated by the digital currency and its underlying technology.

The price of a single bitcoin topped that of an ounce of gold in March, and it has surged from below $1,000 at the start of 2017 to over $4,000 now.

However, trading of bitcoin, a digital currency that is not governed by a central institution, typically happens on markets that are lightly regulated or unregulated. Some digital currency exchanges, such as Coinbase, have obtained formal accreditation in the form of a BitLicence issued by the New York Department for Financial Services.

The SEC had already rejected two similar applications to list digital currency funds earlier this year, before Thursday’s decision on the Bitcoin Investment Trust.

Yet applications keep coming.

ProShares, a provider of exchange traded funds, on Wednesday filed applications to launch long and short ETFs that would hold bitcoin futures contracts — even though the Chicago Board Options Exchange says futures would not be offered until late this year or early next, and are pending regulatory approval.

The SEC’s resistance is being met with persistence. The regulator has agreed to review its earlier decision to reject the listing of a bitcoin fund backed by Cameron and Tyler Winklevoss, the twins famed for a bitter battle with Facebook founder Mark Zuckerberg.

And Grayscale, which is a subsidiary of the Digital Currency Group led by Barry Silbert, also signalled it was not giving up on listing the Bitcoin Investment Trust: “Grayscale intends to continue its dialogue with the SEC and to closely monitor regulatory developments in order to be prepared to proceed . . . although Grayscale cannot predict when this will be.”

https://www.ft.com/content/ace852ae-a486-11e7-9e4f-7f5e6a7c98a2

Watching the price of digital currency bitcoin is a roller coaster ride: It has surged more than five times in price this year to a record just above $5,000 in early September, but in two weeks crashed by $2,000. By Thursday morning, bitcoin was trading above $4,000, up more than 300 percent for the year, according to CoinDesk.

So Tony Robbins isn't sold on the idea yet.

"I think [bitcoin] is very iffy," Robbins tells CNBC's "Fast Money" Wednesday, speaking from the Iconic conference presented by Inc. and CNBC. "I don't have a clue. I look at that as it's like going to Vegas."

Watching the price of digital currency bitcoin is a roller coaster ride: It has surged more than five times in price this year to a record just above $5,000 in early September, but in two weeks crashed by $2,000. By Thursday morning, bitcoin was trading above $4,000, up more than 300 percent for the year, according to CoinDesk.

So Tony Robbins isn't sold on the idea yet.

"I think [bitcoin] is very iffy," Robbins tells CNBC's "Fast Money" Wednesday, speaking from the Iconic conference presented by Inc. and CNBC. "I don't have a clue. I look at that as it's like going to Vegas."


The volatilityin the value of bitcoin is one reason experts have voiced concern about investing in the cryptocurrency. Robbins says that even though some investments could make you a lot of money, they aren't predictable or steady. For him, bitcoin falls in that category.

Robbins advises thinking of investing in bitcoin like taking a trip to a casino — only bet what you can afford to lose. You might win and take home a prize, he says, but if you crap out, at least you only lost discretionary funds.

Robbins himself only devotes a certain amount of money to risky ventures and doesn't rely on them to work out. For those investments, his mentality is "I know it is just for fun I'm investing, I know I could lose, this is Vegas," he says.

For seriously planning for the future, he suggests a more stable approach: index funds.

"Index funds take a 'passive' approach that eliminates almost all trading activity," Robbins writes in his book "Unshakeable." "When you own an index fund, you're also protected against all the downright dumb, mildly misguided or merely unlucky decisions that active fund managers are liable to make."

https://www.cnbc.com/2017/09/28/tony-robbins-says-investing-in-bitcoin-is-like-going-to-vegas.html

(Reuters) - An effort to allow investors to trade digital currencies as easily as stocks stumbled when backers withdrew two proposals to list bitcoin funds.

Intercontinental Exchange Inc’s (ICE.N) NYSE Arca exchange on Wednesday withdrew an application with the U.S. Securities and Exchange Commission (SEC) to list Grayscale Investments LLC’s Bitcoin Investment Trust (GBTC.PK).

Also on Wednesday, Van Eck Associates Corp pulled a registration document for a bitcoin fund after saying the SEC told them they would not review the filing until futures contracts on the digital currency start trading.

“Although digital currency market regulation continues to rapidly evolve, at this time Grayscale does not believe there have been enough regulatory developments to prompt the SEC to approve the ... application,” Grayscale said in a statement. They said they would continue their dialogue with regulators.

The Bitcoin Investment Trust is currently traded “over the counter” in less formal exchanges than those used for typical stocks and at far higher prices than the bitcoin it holds.

Shares traded down 3.2 percent to $715.50 on Thursday, far higher than the issuer’s appraisal that its bitcoin assets are worth $386.60 per share.

GBTC shares gained nearly 500 percent this year, more even than the 332 percent rise of bitcoin BTC=BTSP to more than $4,100.

The currency’s meteoric rise prompted JPMorgan Chase & Co (JPM.N) CEO Jamie Dimon this month to call bitcoin “a fraud” that will blow up.

Bitcoin can be used to move money with relative anonymity, and without the need for a central authority, such as a bank or government.

SEC approval could bring more investors to the asset, yet the regulatory agency has expressed doubts over the bitcoin market being unregulated. The SEC declined to comment. NYSE could not be reached.

In March, the SEC blocked two potential bitcoin products, including one backed by Cameron and Tyler Winklevoss, twin investors best known for feuding with Facebook Inc (FB.O) founder Mark Zuckerberg. CBOE Holdings Inc’s (CBOE.O) Bats exchange, which wanted to host that exchange-traded fund, appealed the ruling.

A proposal to list a product based on ether, another digital currency, was pulled earlier this month.

Bitcoin-tracking products already trade in Europe and one is being considered in Canada.

Regulators have not weighed in on two other efforts to bring a digital currency to U.S. exchanges, including a proposal filed on Wednesday by ProShare Capital Management LLC for a fund that would short bitcoin futures, betting their prices will fall.

http://www.reuters.com/article/us-bitcoin-etp/backers-withdraw-two-proposals-to-list-u-s-bitcoin-funds-idUSKCN1C30CK

[Running Bitcoin uses a small city’s worth of electricity. Intel and others want to make a more sustainable blockchain]

Running Bitcoin uses a small city’s worth of electricity. Intel and others want to make a more sustainable blockchain

Bitcoin “miners” are electromagnetic alchemists, effectively turning megawatt-hours of electricity into the world’s fastest-growing currency. Their intensive computational activity cryptographically secures the virtual currency, approves transactions, and, in the process, creates new bitcoins for the miners, as payment.

And it does another thing, too: It uses an absolutely stunning amount of power. The ever-expanding racks of processors used by miners already consume as much electricity as a small city. It’s a problem that experts say is bad and getting worse.

“The concern that people continue to debate is, where does this end?” says Michael Reed, head of blockchain technology for Intel.

The Bitcoin leech sucking on the world’s power grids has been held in check, so far, by rapid gains in the energy efficiency of mining hardware. But energy and blockchain analysts are worried about the possibility of a perfect storm: Those efficiency gains are slowing while bitcoin value is rising fast—and its potential transaction growth is immense.

There’s a silver lining, though: This troubling energy picture is inspiring innovators such as Reed to come up with energy-saving approaches that would unleash the technology behind Bitcoin, allowing it to expand into applications for which it was never intended [see “Blockchains: How They Work and Why They’ll Change the World,” in this issue]. Developers of blockchains for such disparate applications as health care management and solar-power trading see Bitcoin’s energy-intensive design as a nonstarter and are now crafting more sustainable blockchains.

To understand these new blockchains, first consider the existing ones. A blockchain is a list of transactions—a ledger—maintained by a community of users, rather than a central authority. It’s called a blockchain because new transactions are bundled into “blocks” of data and written onto the end of a “chain” of existing blocks describing all prior transactions.

That process of chaining blocks together provides the security that has made Bitcoin hack-proof. But the process of writing new blocks, called mining, consumes a lot of energy, for several reasons. One is that each block of transactions must be encoded in an iterative process called cryptographic hashing, which is computationally intensive. It produces a hash, which is a string of characters of fixed length, and it must begin with a specific number of zeros.

Here’s why that takes a lot of computing. Blocks are created by transforming the data associated with a group of transactions. That transformational process, known as hashing, isn’t inherently computationally intensive. But to get a hash that starts with the required number of zeros—it changes (typically increasing) after every 2,016 blocks or roughly every two weeks—a miner has to tweak the data and then hash it, check whether the result has the proper number of zeros, and, if not, start over again. That process of hashing and rehashing usually goes on thousands of times and consumes lots of energy.

The first miner on the network to find a valid hash uses it to create a block, adds it to the chain, and is then rewarded for this community service with newly minted bitcoins. With many parties competing to win each block, no one party can gain control over the currency and its ledger.

Bitcoin’s mining-based ledger-writing process is aptly known as “proof of work.” In June, the world’s bitcoin miners were generating roughly 5 quintillion 256-bit cryptographic hashes every second, according to the all-things-Bitcoin website Blockchain.info. That’s a 5 with 18 zeros after it, every second. No entity tracks how much power it takes to sustain that level of computation. But estimates by independent researchers suggest it’s around 500 megawatts—enough to supply roughly 325,000 homes [PDF] —with the activity concentrated in China and a few other countries with cheap energy and, in some cases, loose regulations on emissions.

Because of all that calculation, the energy cost of Bitcoin is high in comparison with that of conventional financial transactions. For example, according to one estimate, processing a bitcoin transaction consumes more than 5,000 times as much energy as using a Visa credit card.

Mining power is high and getting higher, thanks to a computational arms race. Recall that the required number of zeros at the beginning of a hash is tweaked biweekly to adjust the difficulty of creating a block—and more zeros means more difficulty. The Bitcoin algorithm adds these zeros in order to keep the rate at which blocks are added constant, at one new block every 10 minutes. The idea is to compensate for the mining hardware becoming more and more powerful. When the hashing is harder, it takes more computations to create a block and thus more effort to earn new bitcoins, which are then added to circulation.

“If you try to work harder, the algorithm makes it more difficult,” says Harald Vranken, a computer scientist at Radboud University, in Nijmegen, Netherlands. “It’s a very circular game.”

Vranken says doing today’s calculations would “consume way more power than is generated on the entire planet” if it were done using the CPUs available when Bitcoin launched in 2009. What has prevented such disruption is a series of hardware upgrades: Miners began abandoning the CPU for the more-efficient graphics processing unit around 2011, and by 2013, chipmakers were producing application-specific integrated circuits (ASICs) just for bitcoin mining.

Today’s state-of-the-art Bitcoin ASICs complete a 256-bit hash 100 million times as fast and with one-millionth the energy of a 2009-vintage CPU, Vranken says. Yet more efficiency gains are possible by optimizing data centers from the ground up to power and cool bitcoin-mining ASICs [PDF] [see “Why the Biggest Bitcoin Mines Are in China,” coming soon in this issue].

The problem is that chip efficiency gains are slowing [see “Moore’s Law Might Be Slowing Down, But Not Energy Efficiency,” IEEE Spectrum, April 2015] and, according to Vranken, are losing ground against Bitcoin’s exponentially rising exchange rate and rates of hash computation. Another Dutch researcher, Sebastiaan Deetman, says an “enormous increase in hash rate” over the last year or so has likely pushed Bitcoin’s global draw closer to 700 MW.

And if the hash computations accelerate further? In that case, Deetman, who is a doctoral candidate in industrial ecology at Leiden University, sees Bitcoin power demand ballooning 20-fold—to 14 gigawatts—by 2020. If that happens, Bitcoin will be using as much electricity as Denmark.

In certain places, Bitcoin’s power drain may already be straining grids. Mining took off recently in Venezuela, where bitcoins make an attractive alternative to the bolivar, largely worthless now because of hyperinflation. Earlier this year, Venezuelan authorities shut down a mining operation whose 11,000 computers were allegedly running on power that was being siphoned illegally. The drain apparently caused a backlash amid the country’s severe electricity shortages.

Intel’s Reed says that Bitcoin’s sustainability in terms of power usage is tough to predict. He cites such factors as the periodic reduction in the number of bitcoins that miners earn for adding a block. “It’s a very complex set of inputs,” he says.

What Reed is sure of, however, is that the world’s power infrastructures could not handle many more blockchains running on Bitcoin’s computationally intensive proof-of-work mining scheme.

He notes that the leaders of Ethereum—the world’s second most popular cryptocurrency, which started trading in 2015—are planning a switch to a noncompetitive alternative algorithm called proof of stake. Instead of miners battling for block-hashing rights, the network would assign block-adding rights to “forgers” based on their relative holdings of Ethereum currency (known as ethers). This scheme would slash Ethereum’s energy footprint by eliminating the mining process and its computational arms race.

Reed’s team at Intel is working on a novel energy-saving blockchain system that relies on security features built into the chipmaker’s CPUs. Intel’s Hyperledger Sawtooth blockchain software randomly selects which users will write each block. Its proof-of-elapsed-time scheme idles all users’ code for randomly determined intervals. The first to awaken adds the latest transactions to the blockchain and wins compensation.

What prevents participants from tampering with the code to get a larger share of the blocks, says Reed, is that they must run Sawtooth code on Intel CPUs equipped with its Software Guard Extensions (SGX) technology. SGX combines protected areas of memory for code execution with a remote system for verifying its sanctity, enabling Intel to determine whether code has been tampered with.

Several blockchain application developers have signed on, Reed says, including PokitDok, a provider of platforms for sharing health care data. Ted Tanner, PokitDok’s chief technology officer and cofounder, expects several applications by the end of 2017, including an identity-validation system to link patients with their medical records and automatic adjudication of some health insurance claims.

At Cornell University, meanwhile, researchers are using Intel’s SGX to one-up the chip giant. Team leader Ittay Eyal says their system fixes an unintended waste-encouraging aspect of Intel’s blockchain scheme, which his team calls the stale-chip problem. Miners in Intel’s proof-of-elapsed-time scheme will have a financial incentive to use the cheapest SGX-enabled CPUs available, predicts Eyal. This will extend the use of outmoded, inefficient CPUs, he says.

Eyal’s team presented its alternative code [PDF] in May. In their proof-of-useful-work system, participants win blocks by getting credit for doing their own work-related computations within the SGX. A pharmaceutical firm, for example, could run simulations of molecules interacting and simultaneously establish its block-writing status. The firm would want to use the fastest chips available rather than outdated chips, Eyal argues. This preference, his group estimates, should make proof-of-useful-work blockchains at least 25 times as efficient as Intel’s.

Eyal says that lower-energy-consumption blockchains relying on secure hardware will support many applications. But he predicts that such blockchains will not find favor with security-obsessed cryptocurrency users. “The Bitcoin community will not be open to trusting Intel—or anyone else, for that matter,” Eyal declares. In other words, blockchain technology writ large may have a sustainable future, but the power-sucking Bitcoin leech will probably remain ravenous for the foreseeable future.

https://spectrum.ieee.org/energy/policy/the-ridiculous-amount-of-energy-it-takes-to-run-bitcoin

[North Korean hackers’ attempts to steal bitcoin are a huge wake-up call]

North Korean hackers’ attempts to steal bitcoin are a huge wake-up call

North Korea's attempts to steal bitcoin are a huge wake-up call   North Korea's attempts to steal bitcoin are a huge wake-up call 
10 Hours Ago | 01:02
For years, bitcoin critics have warned us about how the cryptocurrency provides way too much opportunity for criminals to launder money. Even JPMorgan CEO Jamie Dimon slammed bitcoin recently, saying it is a "fraud" that would be shut down at some point. But a recent report that shows North Korean hackers are increasing their attempts to steal bitcoin from South Korea may be the final straw that leads regulators to rein in bitcoin.

The report, from cybersecurity firm FireEye, found three attacks against South Korean cryptocurrency exchanges traced to North Korean hackers between May and July of this year.

"The ability of regimes like Kim Jong Un's North Korea to mine or steal cryptocurrencies such as bitcoin is a new reason to be cautious in treating these commodities as currencies," University of Georgia Professor Jeffrey Dorfman said in an email exchange. "While rogue states have practiced counterfeiting even longer than they have been computer hacking, counterfeiters are easier to catch. Once a cryptocurrency is stolen, it is virtually impossible to stop the new owner from spending it, and doing so in untraceable ways."

In other words, we're no longer talking about hypothetical and faceless criminals anymore. We've all seen the laughing faces of Kim Jong Un and his generals after every new missile test, including last month's most terrifying launch of an intercontinental ballistic missile.

Now, imagine if there was evidence Osama bin Laden had used bitcoin to finance the 9/11 attacks and that information came out in the first few days and weeks after those attacks. Remember the sense of urgency and even legal carelessness that characterized the drafting and bipartisan passing of the Patriot Act after 9/11?

How would the U.S. and other nations rein in bitcoin exactly? And who would do it? The simple answer is for the government to make sure bitcoin is forever treated like a commodity like gold, oil, or even fine art and collectible cars. Criminals and rogue states could still use bitcoin in many ways, but it would be much more cumbersome to use than physical or online cash.

For example, treating it as a commodity would mean that each bitcoin would have to be accounted for and taxed more accurately like gold bars. Those making the argument that bitcoin exchanges need a reserve requirement are also on the right track. That's because by imposing that reserve requirement, shadier bitcoin markets and exchanges would be forced out of the business. That too would further discourage criminal involvement.

Another commodity-like aspect that should be introduced into the bitcoin world is insurance. Just like you can insure jewelry and valuable art, encouraging bitcoin owners to insure their property would add a level of private scrutiny to the market that should also make criminal use that much harder to achieve.

The U.S. Commodities Futures Trading Commission, (CFTC), would be the logical government agency to take on the job of enforcing these changes, but bitcoin is such a major entity now that nothing short of a White House decree with the full backing of the Justice Department and even the Department of Homeland Security could set this process in motion.

"I think digital currency can have a bright future," former CFTC Commissioner Bart Chilton said in an email. "They just have not hit on the correct way to do it with various protections, portability of use, and of security in an underlying value (like commodities do provide)."

Making this change would also mean leaning on countries like Japan, that began accepting bitcoin as legal currency in April, to reverse or add new restrictions to that move. The fact that Japan is most squarely in Kim Jong Un's missile cross hairs, should make that argument somewhat easier to make in Tokyo now that we now of Pyongyang's bitcoin maneuvering.

But it would also mean focusing on the big fish first. A study issued in May by the Center for New American Security calls for law enforcement officials in all countries to prioritize their efforts on catching groups like ISIS, North Korea, and terrorists who are using bitcoin and other cryptocurrencies.

Doing these things could go a long way toward ensuring those innocent investors who are simply trading bitcoin as a commodity don't lose everything overnight. But let's face it, it could also be a huge disruption to bitcoin investors if the cryptocurrency suddenly ceased to be so accessible to criminal entities.

Some major bitcoin bears, like Intellyx president Jason Bloomberg, insist its entire value would be wiped out if criminals could no longer use it easily. This spring, Bloomberg wrote: "the only reason Bitcoin has value to anyone is because of the underlying value as a medium of exchange for lawbreakers. If we could flip a switch and eliminate all illegal uses of Bitcoin, there would be nothing left of the cybercurrency."

Bloomberg may be exaggerating about that; he's at least ignoring the non-criminal advantages of using bitcoin like its very low transaction fees and faster transaction speeds. LIU Post economics professor Panos Mourdoukoutas says the digital currency won't disappear and bitcoin will simply return back to its, "old role: a collectible currency for tech savvy enthusiasts."

The words "collectible" and "enthusiasts" sure sound like the terms we use for commodities like rare coins, fine art, and sports souvenirs, don't they?

And that brings us back to protecting innocent investors. One could make similar arguments about gold coins or diamonds having a special allure for criminals trying to move their money out of the law's reach. But the market has long put an inherent value on gold and diamonds that transcends whatever nefarious purposes they can sometimes serve.

That doesn't mean bitcoin isn't in a significant bubble right now. And the warnings made to bitcoin investors about the possibility of the bubble bursting have been loud and numerous for some time.

But that's a far cry from saying it's worthless as anything but a tool for crooks, terrorists, and rogue dictators. There will be a drop in the value of bitcoin if it were more properly regulated and thought of as commodity, but investors wouldn't lose everything in that process. That seems like a win/win.

https://www.cnbc.com/2017/09/28/north-korean-hackers-attempts-to-steal-bitcoin-are-a-huge-wake-up-call-commentary.html

A major problem for bitcoin is its extreme volatility, which is a cause of concern for many investors. A lack of liquidity may be to blame for the cryptocurrency's volatile nature, an expert tells CNBC.

"The high volatility I think is due to the low liquidity we have on exchanges today," Cedric Jeanson, CEO of BitSpread, told CNBC's Street Signs on Thursday.

Bitcoin has attracted a lot of criticism in recent weeks from big names including JPMorgan's Jamie Dimon and Bridgewater Associates founder Ray Dalio. A common criticism is that bitcoin is too volatile to be an effective store of wealth, unlike gold.

The digital currency is currently trading at $3,883.76 per bitcoin. Year to date its value has risen by 289 percent, according to data on CoinDesk, but bitcoin also fell from a record high of around $4,991 at the start of September to as low as $2,989 by the middle of the month. That's a loss of 40 percent over less than two weeks.

Jeanson suggests that having more market makers, such as his company, can help to improve this liquidity problem.

"The important thing is to add market makers on these exchanges and have the appropriate rules, (such as) anti-money laundering and Know Your Customer, around those exchanges," he said.

Bitcoin's liquidity problem has repelled investors from the market for some time. Data from Morningstar published in May revealed only four out of 10,000 mutual funds in the U.S. held bitcoins in their portfolio. This aversion to bitcoin was attributed to the lack of liquidity.

"From a mutual fund perspective, liquidity is paramount," Todd Rosenbluth, director of ETF and mutual fund research at CRFA, told Reuters.

Rosenbluth suggested that more funds would invest in bitcoin if there was an exchange-traded fund (ETF) which held the digital currency. Shares in the ETF could then be easily bought and sold or used as hedge allowing investors to speculate on bitcoin's price movement without needing to directly own the digital currency.

For instance, many investors trade shares in the $34.32 billion SPDR Gold Trust ETF in order to gain exposure to gold.

Make way for market makers

BitSpread is a cryptocurrency wealth manager. One of its investment strategies, called Blockchain Wealth Active Growth, has grown 1,218 percent since its inception in June 2014, according to the company's website.

Jeanson says its funds are adding liquidity to some exchanges around the world. These exchanges are selected based on due diligence and whether they have the right rules.

"We are quoting at the moment something like half a billion dollars of bitcoin or digital currency every month. We became, I think, the biggest market maker on those selected exchanges," he said.

One other factor that may help to reduce volatility is greater regulation. Several countries, including Japan and China, are making moves to regulate crypto currencies. Market watches see these regulations as helping the market to mature and become more mainstream. Jeanson called this "great news" for digital currency.

https://www.cnbc.com/2017/09/21/bitcoin-volatility-how-digital-currency-can-overcome-wild-reputation.html

MUMBAI: The recent decline in Bitcoin prices should not rattle investors in India as its growing acceptance as an investment instrument foretells relevant local regulations that would provide a legal framework to the practice of trading in the cryptocurrency.

“New regulations may soon come up. The rising global acceptance of the blockchain technology by global financial institutions and government agencies has helped gain investor confidence,” said Praveenkumar Vijayakumar, CEO and Chairman at Belfrics Global. “Several government agencies are working on the evolution of blockchain and cryptocurrencies.”

Investments in the digital currency have been rewarding for investors, although the valuation slipped recently after Beijing regulators forced the closure of BTC China, one of the world's biggest exchanges for the Bitcoins. Otherwise, returns have quadrupled this year. The bitcoin-rupee swap rate is now trading around Rs 2.51 lakh, about four times higher than the December-end level of Rs 64,000, dealers said.

A Bitcoin is a digital currency created and held electronically. It is not printed or minted but produced by technocrats globally.
The market is now looking for central bank regulations on Bitcoins. Critics of the instrument point to inherent risk factors that may erode the investment value significantly.

Last week, the swap value dropped to Rs 2.2 lakh per Bitcoin from Rs 3.44 lakh beginning September. JPMorgan Chase CEO Jamie Dimon’s criticism of the crypto currency further dented the instrument’s price.

Yet, investors and traders remain enthusiastic. “In spite of China’s recent steps, Bitcoin has shown that it is a truly global asset and individual countries are not having influence over its price and sentiment,” said Sandeep Goenka, Co-founder, Zebpay. “We are optimistic that the government will realise the potential of this technology to make India a Global Fintech hub.”

http://economictimes.indiatimes.com/markets/forex/heres-how-bitcoin-can-reward-you/articleshow/60785692.cms

Let's say the bitcoin bubble has just burst.

From its peak of $4,921 earlier this month, the digital currency is already down 16 percent at $4,076. Over the next two months, imagine it continues to slump to barely more than half its peak valuation. After a brief recovery, the price slides again, until by the start of 2020 it's dropped by another third, to below $2,000. For 20 years it then languishes around that point, never to recover its September 2017 levels in inflation-adjusted terms.

Does that vision of the future show that digital currencies have no place in an investment portfolio, or that they do? The answer is worth pondering, because that's the trajectory gold followed after its peak in January 1980.

Full disclosure: I don't, and wouldn't, invest in either gold or bitcoin. Still, as someone once said, markets can remain irrational longer than you can remain solvent -- and trying to shake other investors out of their unreason is as pointless as fighting the tide. Rather than asking whether digital currencies make sense philosophically, we should be asking whether they stack up as investments.

As Gadfly argued last week, with a conventional market in digital-currency-settled derivatives emerging, the best argument for owning those currencies is the same as the best one for owning gold: Their potential to have negative beta, to rise when stocks fall and vice versa. If a negative correlation to equities can offset periods of underperformance in shares, they can go a long way to improving returns.

Suppose you bought a basket of digital currencies, and held them alongside gold as the negative-beta slice of an investment portfolio, valued at no more than (say) 3 percent of the total. Would that make sense?

If all digital currencies are going to be worth zero in five years, clearly not.

That's the argument made by those who say cryptocurrencies don't have any "fundamental value." Gold is genuinely useful in niche medical and electronic applications, and it's been coveted aesthetically since the dawn of civilization. Central bank bullion holdings are another 31,500 metric tons of proof that the yellow metal is more than just a fad.

What's supporting a floor price for digital currencies, though?

One answer to that question was given by JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon in his anti-bitcoin spray last week:

If you were in Venezuela or Ecuador or North Korea or a bunch of parts like that, or if you were a drug dealer, a murderer, stuff like that, you are better off doing it in bitcoin than U.S. dollars ... So there may be a market for that, but it’d be a limited market.

Not that limited, though. As demonstrated by the popularity of bitcoin in China, people living in countries with closed capital accounts show a great deal of interest in moving funds outside of official exchange controls. About 40 percent of the world's population and 20 percent of its gross domestic product are in such jurisdictions.

Other gray segments of the global economy suggest further sources of demand for anonymous transactions, as Bloomberg View's Aaron Brown argued this week.

More than $12 trillion is stashed in tax havens, according to the Tax Justice Network, an advocacy group. The trade in illicit drugs may be worth $320 billion, or close to 1 percent of global GDP. The 500-euro banknote, which most Europeans have never seen but is popular with criminals, still accounts for more than one-fifth of the value of euro notes in circulation, more than a year after the European Central Bank stopped printing it. Yes, digital currencies can be used to launder the proceeds of crime -- but so can JPMorgan.

Possible value of illicit drugs trade $320 billion
While this may seem unsavory, it cuts against the argument that demand for digital currencies can just go back to where it was in 2007, absent coordinated government crackdowns of the sort we've never seen.

The stronger argument against digital currencies is not that they're going to zero -- it's that they don't make a good hedge at all. Since 2010, gold and Treasury bonds have a negative correlation with the S&P 500; bitcoin, on the other hand, has a positive relationship, multiple regression analysis done by Gadfly shows. In addition, bitcoin moves so radically that you can't even construct a meaningful long-short strategy with your equity portfolio.

If you believe the bluster of bitcoin bugs, they're putting their money in code because they think the fiat-money economy is on the verge of collapse. Their revealed preference, though, is to punt on bitcoin whenever rising stock markets lift their risk appetite, and vice versa.

In principle, the biggest advantage of digital currencies is they have no connection to anything that's happening in the real economy. In reality, the two are intimately connected through that most powerful of conductors, investor sentiment. Only if that changes will virtual money really be able to bite off part of gold's domain.

http://economictimes.indiatimes.com/markets/stocks/news/bitcoin-isnt-wild-and-wacky-enough-yet-to-make-a-good-hedge/articleshow/60783142.cms

While Bitcoin dominates the headlines, its underlying blockchain technology has spawned a new ecosystem of alternative cryptocurrencies, known as “altcoins.” Following Bitcoin’s staggering 1,000% moonshot of the past 12 months, a fresh wave of capital has flooded the space searching for the next 10-bagger.

Altcoins arrived on the scene via a hot, new funding mechanism called initial coin offerings (ICOs​), which are like a hybrid of venture capital and initial public offerings for stocks. These crowdfunding campaigns involve the exchange of cash or cryptocurrency for the new coins, which then can be used within the specific altcoin​ network for purposes such as trading storage space, renting computational power or anonymous transactions.

According to coinmarketcap.com, the number of altcoins outstanding swelled from 64 in early 2014 to 869 today. This year alone, the total market capitalization of altcoins grew 4,700%, from $2.2 billion to a recent peak of $94.4 billion, before falling to $71.7 billion.

Like the dotcom bubble of the late 1990s, the current altcoin market likely contains the crypto versions of Google and Amazon, but it's also likely to contain a lot more duds a la Webvan and Pets.com. The recent surge has produced “blockchain for dentists” (DentaCoin) and “blockchain for Christians” (JesusCoin), which “boasts the unique advantage of providing global access to Jesus that’s safer and faster than ever before.”

Regulators have begun cracking down. Earlier this month, the Chinese government announced an immediate ban on ICOs for Chinese startups, claiming this new fundraising mechanism has “seriously disrupted the economic and financial order.” In the U.S., the Securities and Exchange commission concluded that altcoins would be treated as regular securities, and are subject to the same applicable securities laws that punish Ponzi schemes, boiler rooms and other fraudulent attempts to part investors with their hard-earned dollars.



Read more: 4 Top-Performing Alternatives to Bitcoin | Investopedia http://www.investopedia.com/trading/4-topperforming-alternatives-bitcoin/#ixzz4tQM9Jcd5
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Bitcoin's popularity has continued this year, with the price skyrocketing from around $600 to close to $5,000 in the space of just 12 months.

Supporters say the limited supply of bitcoin cements its status as a safe haven - such as gold - that will never lose its value and peak during times of political or economic turmoil.

Gold prices reached record highs at the height of financial crisis.

Jon Matonis, vice president at nChain, said: "Bitcoin will become the new gold and re-align the playing field of central bankers and commercial bankers.”

High profile celebrities have also backed bitcoin. Lingerie entrepreneur Michelle Mone said it is the "currency of the future".

Naeem Aslam, chief market analyst at Think Markets UK, said: "A safe haven is a precautionary trade which investors trade under heightened uncertainty.

"The ultimate safe haven trade for investors has been the yellow shining metal, however, a new popular safe derivative which is behaving like a safe haven is cryptocurrency."

But some financial experts say the digital currency is a bubble that is set to burst.

JP Morgan boss Jamie Dimon recently attacked bitcoin as a "fraud" and predicted the cryptocurrency will collapse.

And billionaire investor Howard Marks Another said the digital money is a pyramid scheme.

Bitcoin cannot be compared to gold, according to Adrian Ash, director of research at BullionVault.

He said: "Gold prices aren't guaranteed to rise in a crisis, but its ancient appeal as the ultimate store of value only grows when other, more complex and intangible assets start to fall.

"The contrast with today's bubble in cryptocurrencies like bitcoin could not be any starker.

"Gold's appeal as a store of value comes down to its simplicity.

"A physical asset, it cannot be created at will, making it very different to stockmarket shares or new QE money.

"Unlike debt it cannot be destroyed by default.

"Unlike real estate, it can be traded instantly, at full value, in a deep and truly global market."

http://www.express.co.uk/finance/city/857063/Bitcoin-latest-updates-price-gold-Cryptocurrency-news-forecast-safe-haven

I've lost count of the number of times I've been asked about Bitcoin as an investment. And it's no wonder – if the crypto-currency hadn't been invented by a shadowy tech guru, it could have been the stuff of a movie director's wildest imagination.

Take the aforementioned "inventor" of Bitcoin, who may or may not be one of the half-dozen people suspected of being behind the pseudonym Satoshi Nakamoto. Then, add in the fact that his invention came to prominence on the eBay-for-criminals website Silk Road, and that the libertarians love it because there's no role for government and you can't be identified.

I can almost see Matt Damon in the role of action hero Jason Bourne. Or Daniel Craig, on Her Majesty's secret service as Bond, trying to bring the bad guys down.

Then there's the legion of supercomputers "mining" new coins in China and Eastern Europe, and reports of people who threw out hard drives with Bitcoins saved on them, or who paid for two pizzas with Bitcoins that are now worth $20 million.

http://www.smh.com.au/money/investing/bitcoins-not-a-fraud--but-dont-risk-it-20170920-gylbno.html

In a remote corner of northwest China, Wang Hongyi plans to set up a bitcoin “mining farm” with 1,000 computer servers, hoping to take advantage of low electricity and operating costs to cash in on the boom.

He’s one of many Chinese investors seeking to profit from the popularity of the digital currency, which was worth less than US$600 a year ago and peaked at US$4,950 on the first day of this month.

Nearly 70 per cent of all new bitcoin are mined in China – miners use computer hardware to find bitcoin by creating new links in its blockchain, which is essentially a huge digital ledger.

Wang’s planned farm in Gansu – one of the poorest provinces in China – will cost about 10 million yuan (US$1.52 million) to set up.

Initially he was confident he could turn a profit because the site is located right next to a hydropower station and that will cut electricity fees – a key operating cost – to about 0.25 yuan per kWh.

He estimates he will need five staff to manage the warehouse of computers running around the clock.

But after the Chinese government last week began an all-out war on bitcoin and other digital currencies, Wang, who is in his early 30s, is having second thoughts about opening his mining farm.

Fundraising through initial coin offerings has been banned and all digital currency exchanges in China will be shut down. Some in the industry fear Beijing might go further and target mining.

“If we start this business and the government says it’s illegal, then it will be impossible for us to recover our investment,” Wang, who was in Hong Kong for a cryptocurrency conference on Wednesday, told the South China Morning Post.

Bitcoin trading platforms rush to contain damage

While the Chinese government has told cryptocurrency exchanges to stop trading bitcoin, it has not explicitly banned possession and production of the digital currency – offering hope to miners that they can continue to dig out bitcoin and sell them on overseas platforms.

Electricity is the main cost for bitcoin miners – it costs about 10,000 yuan to mine one bitcoin in China,

according to Leon Liu, chief executive of BitKan, which organised the Hong Kong conference.

Bitcoin is currently valued at about US$3,900. But if it goes back up to more than US$4,000 it would take about four months for Wang to recover his set-up costs – making it a lucrative investment.

full: http://www.scmp.com/news/china/economy/article/2112085/chinas-bitcoin-miners-limbo-after-beijing-shuts-down-exchanges

Even if you're skeptical about cryptocurrencies, the ICO, or initial coin offering, has been one of the hottest trends in tech this year.

Startups that raised money through ICOs have accumulated a record $2.2 billion this year alone, according to Coinschedule.com.

Unlike a stock IPO, where companies sell shares, an ICO lets investors buy digital "coins" used on cryptocurrency platforms. Companies built on blockchain, a digital database for recording financial transactions, raise money by selling these tokens, which can be used to pay for goods and services on their platform or can be stashed away as an investment.

So what's causing the ICO craze this year?

Charles River Ventures' Rafael Corrales, an early investor in Blockchain, a bitcoin wallet maker with $70 million in funding, narrowed it down to three main drivers:

    First platform shift in many years: There hasn't been a major tech platform shift in nearly a decade since the launch of the iPhone in 2007. Voice technology is emerging but it's still very early, Corrales said. But the blockchain, the underlying technology that enables ICOs and cryptocurrency transactions, is proving to be one of the most meaningful new tech ideas that could fundamentally change finance. "There hasn't really been anything super interesting in the last few years," he said.
    Not many entrenched competitors: The tech industry has very large incumbents, including Apple, Amazon, Facebook, Google, and Microsoft, who have their feet in almost every emerging space imaginable. But they have not jumped into the cryptocurrency space in any serious way yet, opening up a lot of opportunities for smaller players. "The big tech companies are not setting the rules here," he said.
    Democratization of financing: You don't have to be a sophisticated investor from a large institution to make a bet on ICOs. That allows any individual to invest in a startup running an ICO, unlike the traditional startup world where VCs took the lion's share of investing opportunities. "Now all of a sudden, an individual can invest in an interesting concept," he said.

Corrales said the ICO space still has a lot of problems, like the lack of proper regulation. And he pointed out that the fact that startups are raising a lot of money at once, instead of in separate stages, like more traditional startups do, is concerning. Still, he expects the ICO craze to continue until some credible regulatory body like the SEC or IRS comes down hard on a select group of people that they will try to make an example of.

But in aggregate, he says the exuberance in the space is a good thing because it lays the groundwork for the industry to mature. And eventually, he hopes to see the next big tech company come out of this space, much like the 90's dot com bubble led to the creation of Google and Amazon, among others.

"It's just noisy right now because of a Cambrian explosion that's happening. But I do think there will be a handful of important companies and innovations that will come out of it," he said.

https://www.cnbc.com/2017/09/20/initial-coin-offerings-rafael-corrales-crv-why-icos-are-hot.html

Bitcoin and Ether token prices climbed on Wednesday, as both digital currencies added to recoveries from a plunge this month.

Bitcoin dropped more than 30% during the first two weeks of September in the wake of threats by Chinese authorities about closing cryptocurrency exchanges and a ban on so-called initial coin offerings, which have been deemed illegal in the region by Beijing regulators.

Opinion: Here’s a reason why China would want to shut down bitcoin

The September selloff earlier was exacerbated by negative comments from J.P. Morgan Chase & Co. JPM, +0.70%  CEO Jamie Dimon, who described the bitcoin as “a fraud” and a bubble.

Bitcoin peaked at more than $5,000 in early September, but tumbled to a low of $2,951 last Friday.

Bitcoin experienced a 34% plunge earlier this summer, when the cryptocurrency was expected to split into two different versions following a software update known As Segregation Witness or SegWit that would speed up its network. That split created a parallel blockchain currency Bitcoin Cash.

Bitcoin is facing another split sometime in November, which would create a third version of the bitcoin that would increase its block size to 2 mega byes from the current 1MB.

Despite such extreme volatility, bitcoin prices are up more than 300% since the start of the year, compared with the Dow Jones Industrial Average DJIA, +0.19% and S&P 500 index SPX, +0.06%  which are up 13% and 12%, respectively, over the same period.

A single bitcoin BTCUSD, -1.88%  was worth about $3,987 on Wednesday with its market vale rising to $65.7 billion. Last week its value declined to as low as $59.3 billion, according to research site Coinmarketcap.com.

As digital currencies continue to recover, so do criticisms from Wall Street heavyweights and regulators.

On Tuesday, Ray Dalio, the founder of the world’s largest hedge fund, said bitcoin has all the makings of a bubble based on the firm’s criteria for the market phenomenon.

“Bitcoin is a highly speculative market. Bitcoin is a bubble,” Dalio said.

Meanwhile regulators in the U.S. are growing concerned about consumers investing in so called ICOs, a form of fundraising in exchange for tokens that can be eventually used for purchasing products of the company or traded on secondary markets. The Securities and Exchange Commission recently issued a report warning investors about the perils of ICOs, comparing them to Ponzi schemes.

Read: What is an ICO?

Meanwhile, Ether tokens, trading on the Ethereum blockchain, were also attempting to recover from last week’s decline. One Ether token was buying $289 in recent trade.

Ether’s value was at $27.4 billion, compared with a recent low at about $21.6 billion last week.

Across the broader digital-currency segment, the total market value of an array of cryptocoins was at $137.8 billion, with bitcoin representing about 52% of that value, Coinmarketcap data show.

http://www.marketwatch.com/story/bitcoin-ether-stabilize-after-september-selloff-2017-09-20

[The Meltdown of April 2013]

September has been a wild ride for bitcoin owners: the digital currency began the month nudging an all-time high of $5,000 before losing nearly 40% of its value in a spectacular crash. Now, a recovery has seen bitcoin pop back over $4,000 as of Monday morning.
To put this in context, Fortune offers a closer look at this month's crash and four other major price shocks—as well as likely explanations for all of them. Taken together, this account can provide some insight into why bitcoin is so volatile, and whether it can survive in the long run.
(The data is from the Winkelvoss index, which blends prices from different exchanges. Note this survey doesn't include crashes from the early days of bitcoin, which journalist Tim Lee recounts here).
The Meltdown of April 2013
What happened: In the spring of 2013, a ghastly collapse saw the price of bitcoin fall from $233 to $67—overnight! That's a 71% drop. It would take seven months to recover.

The Meltdown of April 2013

What happened: In the spring of 2013, a ghastly collapse saw the price of bitcoin fall from $233 to $67—overnight! That's a 71% drop. It would take seven months to recover.

Why it happened: The crash of April 2013 came after bitcoin's first big brush with the mainstream. The currency had never crossed $15 before 2013 but a flood of media coverage helped drive it well above $200. The crash, which followed two smaller jolts in March, reflected in part a correction to speculator exuberance. Some also attribute it to an outage at Mt. Gox, the most popular (at the time) exchange for buying and selling bitcoin.

Pop Goes the 2013 Bubble

What happened: Bitcoin spent most of the rest of 2013 around $120. Then prices jumped ten-fold in the fall: Bitcoin hit a high of $1,150 in late November and then the party ended abruptly, and prices tumbled below $500 by mid-December. It would take more than for years for bitcoin to reach $1,000 again.

Why it happened: The crazy price run up of late 2013 appears to have been a classic bubble as amateur investors rushed into bitcoin for the first time. The frenzy was helped by regulators taking a more positive view of bitcoin (in the early years, most regarded it as criminal—if they had heard of it at all), and by U.S. exchanges like Coinbase that made it easier for average people to buy bitcoin. When the bubble popped, prices would likely have recovered more quickly but for what happened next.

The Mt. Gox Calamity of 2014

What happened: The price of bitcoin had been making big gains after the bubble pop of 2013 when, in February, the price fell from $867 to $439 (a 49% drop). This triggered a doldrums period for bitcoin that lasted until late 2016.

Why it happened: The February crash came after the operator of Mt. Gox—long the go-to trading place for longtime bitcoin owners—announced the exchange had been hacked. On February 7, the exchange halted withdrawals, and later revealed thieves had made off with 850,000 bitcoins (which would be worth around $3.5 billion today). The incident, which created existential doubts about the security of bitcoin and undercut liquidity in the currency, likely harmed the currency's value for years.

Summer Selloff of 2017

What happened: Fast forward to the go-go days of 2017. In early January, bitcoin broke $1,000 for the first time in years and started climbing like crazy. By June, the currency nudged $3,000—but then lurched back all of a sudden, falling 36% to $1,869 by mid-July.

Why it happened: Even as bitcoin boomed anew, many worried something was wrong with the code under the hood. Specifically, bitcoin was slow compared to other crypto-currencies like Litecoin and Ethereum, and its core developers couldn't come to an agreement on how to update the software. This raised the prospect of a "fork" (which would produce two versions of bitcoin's canonical blockchain) and future schisms, which in turn appeared to give rise to market jitters and the big fall in price. Ironically, such a fork did materialize in August in the form of rival Bitcoin Cash—but this seems to have done no longterm harm to bitcoin.

The Great China Chill

What happened: After fears over the fork subsided, bitcoin went on another crazy tear: It climbed close to $5,000 at the start of September before plunging 37% by September 15, shaving off over $30 billion from bitcoin's total market cap in the process. A recovery is already underway, though, as prices climbed above $4,000 three days later.

Why it happened: While bitcoin price moves can be inscrutable, the prime reason for the latest crash can be summed up in one word: China. After it cracked down on so-called "Initial Coin Offerings," there have been widespread rumors the Communist government is going to ban trading crypto-currency altogether. In response, the most prominent exchange, BTCChina, said it will end trading this month. This crackdown, combined with questions about China's de facto monopoly on bitcoin mining, explains the recent price swoon.


Lessons Learned From 5 Crashes

A look back at bitcoin price swings in the last five years, which include several stomach-churning tumbles of 40% and even 50%, makes it clear the world's most popular crypto-currency was—and is—extremely volatile.
It's also apparent that most of the bitcoin crashes coincide with speculative run-ups coupled with exogenous shocks, such as a major hack or a government crackdown. Also, in most cases, bitcoin has bounced back from the crashes in months or even weeks—suggesting nervous bitcoin buyers will be okay if they are holding for the long run. On the other hand, the crashes of late 2013 and early 2014 are a cautionary tale—recall it took years for those who first bought bitcoin at $1,000 to see their investment recover.
As for whether bitcoin could fall all the way to $5, note how Lee (who wrote an earlier history of bitcoin crashes) said in 2013 "it's simply too early to tell." Today, the crytpo-currency market is so much bigger, and has proved so resilient, it appears a safe bet that bitcoin's floor price will always be well above $5.
The question now, for investors, is to choose a narrative that explains bitcoin's longterm place in the world: Should they take the view bitcoin is nothing more than niche—or, in Jamie Dimon's view, a modern-day version of tulip bulbs? (If so, they can short it). Or should they take the view, espoused by Bloomberg View columnist Mohamed A. El-Erian, that bitcoin and other cryptoassets are now a permanent part of the invest landscape and will have a role alongside precious metals as longterm sources of value? Either outcome seems plausible—and so does a future crash.

http://fortune.com/2017/09/18/bitcoin-crash-history/

[Bitcoin Price is Headed to $25,000 Despite Recent Setbacks: Researcher on CNBC]

Bitcoin Price is Headed to $25,000 Despite Recent Setbacks: Researcher on CNBC

The value of Bitcoin may now be compared with that of gold as it’s likely to be heading $25,000 in five years according to Tom Lee, Head Research of Fundstrat Global Advisors and Former Managing Director of JP Morgan Chase.

He said it in his recent interview with CNBC’s Fast Money program.

Bitcoin suffers
Although Bitcoin has suffered from recent negative news from countries like China such as banning of ICOs and planning to shut down the Bitcoin exchanges by the end of the month, Lee thinks there are still advantages to the situation.

According to Lee, there are two factors in the issue - liquidity effect and perspective of the people. According to him, Chinese exchanges operate with 30 percent of Bitcoin value. If they decide to shut down the digital currency, obviously there is gonna be force selling.

It's safe to point out that there have been seven times already that the crypto world has seen a setback of this magnitude.

The second factor is the perspective of the people on Bitcoin. Our society tends to see Bitcoin as a bubble and a fragile currency so everyone should be on the other side of that.

“Well for instance, you know number one Bitcoin is not what people think... We have some data, there's only 300,000 holders of at least $5,000 so think about that that's like saying the iPhone was a bubble in 2007 four days into the sale because there were 500,000 of iPhones. So it's not that many holders of Bitcoin you know when you think about how many wallets there are today that holds $5,000, it’s huge so I think it's still very early stages.”

Bitcoin is different from other technologies, so the actual network itself is generating the value so that the visa of Bitcoin is going to be as valuable as the Blockchain network itself.

According to Lee, fraud transaction cannot happen on this digital currency as it will cost $30 bln dollars to create on fake Bitcoin, so it's a very secure trusted network because of the nature of Blockchain.

“I think it can be very threatening to financial institutions to see that hey, trust is created on the network and on the distribution network by the way from generation perspective I think people under the age of 30 think that makes perfect sense.”

Bitcoin is still the best tech framework of today.

Just like gold, it is worth investing on. One cannot measure its value in the future with just one look but needs a total analysis on the market. Nevertheless, it still promises a positive, valuable outcome.

https://cointelegraph.com/news/bitcoin-price-is-headed-to-25000-despite-recent-setbacks-researcher-on-cnbc