Ethereum Over $1000 and $100B Market Cap, BTC Dominance at 32% Record Low

This day might be remembered in the history books as a major milestone for cryptocurrency diversification or as another colossal indicator of the altcoin bubble. There are now three cryptocurrencies with over a $100 billion market cap each. Bitcoin, ethereum (ETH) and ripple (XRP) are worth today a combined total of about half a trillion USD.

Also Read: bitcoin-price-reaches-another-peak-crossing-15000Untitled-design-2-1068x1068

$100 Billion Club

Ethereum long term investors and short term speculators are celebrating alike today as the smart contracts altcoin has broken through the $1,000 per coin psychological barrier. Standing at about $1,040 at the time of writing, the overall value of all ETH in circulation is now over $100 billion. It is the third cryptocurrency in this exclusive club, behind only bitcoin and ripple.

And despite all the warnings about ripple being centralized and freezable speculators keep pouring in to XRP. After rising about 160% from just a week ago and 28% in the last 24 hours alone, its market cap is now well over $140 billion. With a price of just under $4 per coin, part of this movement has to be due to penny stock mentality of new traders seeking a “cheap bitcoin” to bet on.

Ethereum Over $1000 and $100B Market Cap, BTC Dominance at 32% Record Low Altogether, with bitcoin over $250 billion market cap, the three top cryptocurrencies are now worth just shy of $500 billion. Putting this mind boggling number into perspective, its just about 10% below the combined stock value of Visa (NYSE:V $265 billion), Mastercard (NYSE: MA $166 billion), American (NYSE: AXP $87 billion), and Discover (NYSE: DFS $28 billion).

Entering a Multi-Polar World?

Bitcoin has been able to maintain an impressive price level at $15,000 and a quarter trillion USD market cap in the face of this altcoin onslaught, but its market share has suffered. The BTC Dominance Index is now just above 32%, a new all time low, which means that bitcoin is for first time worth less than a third of the crypto market.

While some of ripple’s staunch supporters, as well as fans that heard about it a week ago, are cheering on for “The Rippening” maybe its time to forget about the term and any other Flippening. It is possible that we are simply seeing a paradigm shift in the market, from one leading cryptocurrency and a thousand copy cats to a top heavy, multi-polar landscape. This can probably only be validated in the next big correction, when all the short term speculators will scatter away and either bitcoin will remain alone at the top or not.

Ethereum Over $1000 and $100B Market Cap, BTC Dominance at 32% Record Low

Do you think that bitcoin will continue to lose its market dominance to altcoins in 2018? Share your predictions in the comments section below!

This Developer is Bringing Atomic Swaps to the Bitcoin Cash Network

Atomic swaps between blockchains have become a hot topic that has sparked a lot of interest due to the decentralized nature of the exchange process. This week a developer that goes by the name of “Deswurstes” or “MCCCS” has accomplished a successful bitcoin cash atomic swap test.

cashaa-1068x1068

Introducing Bitcoin Cash to the Atomic Swap Protocol

This Developer is Bringing Atomic Swaps to the Bitcoin Cash NetworkOn November 4, bitcoin cash (BCC) was tested using the Decred/atomic swap protocol by a developer named Deswurstes. The atomic swap Github pull request #37 states, “the first Bitcoin Cash atomic swap has been made! — Proof at the end of this pull request.” Deswurstes says he’s been interested in the scaling debate since mid-2016 and has been a bitcoin fanatic (as a small scale miner/holder, not a developer) since then. The test is one of the developer’s first contributions using the bitcoin cash code, and he plans to design friendlier-looking software to allow users to use it more efficiently.

“Atomic swaps are interesting topics, and there are many alt-to-alt exchanges, but none of them are safe; there’s nothing that prevents the exchange from stealing your money,” Deswurstes explains to news.Bitcoin.com.

When I found atomic swaps, it looked like magic to me. I thought it’d be cool if bitcoin cash had this feature. First I asked its developers if they were going to implement bitcoin cash support, but they were busy. One or two weeks later, I tried and succeeded in coding my atomic swap dream.

‘In the Future, All Altcoin-to-Altcoin Atomic Swaps Will be Instant’

The developer’s first test was a bitcoin cash-to-bitcoin cash atomic swap contract. He tested it like this because it enabled him to debug both initiate and participate commands at the same time, and each time he got closer to the working software. “Currently the software works awesome, however, it doesn’t have dynamic fee support,” Deswurstes explains to news.Bitcoin.com. “The command that makes the node software choose inputs for the transaction (fundrawtransaction) has different syntaxes in different node software.”

Deswurstes says now, people can make trustless bitcoin cash payments, but the process of compiling the software and typing commands in the command prompt is complicated for average users. “When trustless, decentralized exchanges that have order matching come with good UIs, the atomic swap will replace the current exchanges — Especially BCC-BTC will have high volume,” the programmer explains.

In the future, all alt-to-alt atomic swaps will be instant — People will be trading BTC and BCC, which’ll be the highest volume trade, in a few seconds.

This Developer Aims to Bring Atomic Swaps to the Bitcoin Cash Network

Cryptocurrency Exchanges Will Have to Utilize Atomic Swaps, or No One Will Use Them

Deswurstes believes atomic swaps just need a good user interface (UI), and after a nice looking and easy to use UI is implemented there’s nothing that can prevent everyone from using atomic swaps, the developer explains. At the moment Deswurstes notes there are two startups working on friendlier atomic swap UI’s including Barterdex, and Altcoin.io.

“One day, all of the alt-to-alt exchanges will use atomic swaps, because of its safeness and it will be as convenient as the old style trades. There’s no reason for them not to use atomic swaps If they won’t, their users will no longer use them,” Deswurstes concludes.

What do you think about implementing atomic swap processes with bitcoin cash? Let us know what you think in the comments below.


Pakistan Set to Become a Major Bitcoin Hub

Pakistan is currently the seventh most populous country in the world with approximately 202 million residents. Today, the country exhibits many traits ripe for accelerated bitcoin adoption. Bitcoin.com discussed bitcoin trends in Pakistan with Danyal Manzar, the co-founder of Pakistan’s first and largest bitcoin trading platform, Urdubit.

 

Huge Freelance Market, but Payment Solutions Lacking

Despite having no access to Paypal, Pakistan still ranks among the top countries for freelance outsource workers. In fact, “Pakistan is ranked 3rd on freelance websites,”paypal According to the New York Times10,000 IT graduates in Pakistan are estimated to enter the Pakistan job market every year.

Remittances are also a “very big market” in Pakistan, . “We see about 20 billion USD coming in annually,” . “Since there are not enough jobs, the major remittance is seen from the UAE and Saudi Arabia followed by western countries.”

Despite the lack of jobs, however, life in Pakistan has been modernizing in recent years. Rapid lifestyle change, technological innovations, and increasing broadband access in Pakistan have all accelerated the number of Pakistani freelancers. However, “the payments are always a problem,” adding that:

Since the job market is also limited we see many freelancers turning to bitcoin, there is no Paypal in the country and no proper payment processor which could aid payments.

High Broadband Subscription Growth

Mobile broadband use is growing very fast in the country. The World Bank describes Pakistan as “leading the way in South Asia in digital finance” with 6% of adults having mobile accounts, compared to South Asia’s average of less than 2.6%.world bank

Last June, the number of 3G/4G subscribers in the country had reached 29.53 million, up from 14.6 million in July 2015. Total broadband subscribers grew 92% to 32.41 million from 16.88 million, according to the Pakistan Telecommunication Authority (PTA).

The World Bank also notes that about 100 million adults in Pakistan are unbanked, without access to formal and regulated financial services. Only 13 percent of adults there have a formal account and 27.5 million adults said the distance to a financial institution is a barrier to opening a financial account.

With so many unbanked, no access to Paypal, a huge freelancing industry, a major remittance destination, and so many subscribed to a high-speed mobile account, Bitcoin could find a huge home market in Pakistan.

Pakistan’s Bitcoin Market

Admittedly, the bitcoin market in Pakistan “is still very new,” but it is fast growing. Citing low banking penetration and “very limited POS terminals in the country,”Pakistan-flag-1068x712

Bitcoin provides a cross-board payments system, as well as local payment solution at a much cheaper cost.

www.easypaypakistan.com is a real-time bitcoin exchange using the blinktrade engine. According to Coinhills, www.easypaypakistan.com trading volume has been growing steadily in the last few weeks, and the exchange has the largest bitcoin trading volume in the country, twice  in a 24-hour period. “I would say our market share is 1/3 of the total market,” he explained. If he’s correct, that indicates Pakistan trades around 40 bitcoins each day, putting it somewhere around 27th place among all currencies in volume rankings.

However, he also admitted that there are still not many shops accepting bitcoin. Online, the situation is a bit better, since many websites in the country have started accepting bitcoin as a payment “due to quicker payment times and no charge backs.”

We believe it’s only a matter of time before we see Pakistan follow India and become a major user of bitcoin.

Meanwhile, the Pakistan government “hasn’t taken any stance on bitcoin as of yet,” blog.Easypaypakistan.com added. This company will soon be approved by the State Bank Of Pakistan. “They believe that bitcoin is a commodity and not a currency,”

Do you think Pakistan is ripe for bitcoin adoption? Let us know in the comments section below.

Pakistan Government to Put the Searchlight on Bitcoin Traders Says Local Media

Powerful Pakistan government and media officials appear to be contradicting the domestic population’s embrace of bitcoin.   

islamabad-1068x668

Pakistan Government on the Defensive, Maybe

Karachi, Pakistan’s Dawn, a widely circulated and read periodical and website in English, is rather cosmopolitan. Covering bitcoin, however, its website curation seems to have a decidedly negative slant.

Pakistan Herald Publications Limited is Dawn‘s owner, and its CEO is Hameed Haroon, noted regional journalist and member of a highly influential family in the country.

In one dispatch from Mr. Haroon’s flagship, reprinted all over the world, the headline announced, “FBR goes after bitcoin traders.”

Pakistan Government to Put the Searchlight on Bitcoin Traders Says Local Media
Faisal Khan’s only evidence Pakistan’s government is paying any attention to bitcoin.

FBR is Pakistan’s Federal Bureau of Revenue, its principal collector of tax.

“The top intelligence department,” the piece insisted, “is investigating cases where investors trade digital currencies probably to evade taxes or launder money.”

The sentence-inserted link refers to the site’s own coverage of bitcoin reaching 1000 USD early this year. Not a single reference to FBR nor an investigation.

“A senior tax official said people evade tax and launder money using cryptocurrencies,” the article asserts without a single quote or reference. “They buy bitcoin to launder their tax-evaded money […], adding that they park their black money out of Pakistan in many cases.”

Paraphrases are allowed, of course, but this drove news.Bitcoin.com to search relevant Pakistani government pronouncements on bitcoin specifically, cryptocurrencies generally.

Nothing.

The Dawn piece goes on in this manner, listing a veritable alphabet soup of agencies and investigators and laws employed to hunt bitcoin traders without citing a documented source.

Pakistan Government's and Street's Tensions with Bitcoin
Screen Shot of SBP by Faisal Khan, showing no reference to the bank’s position on bitcoin.

What Blogs and Independent Sites Know

Faisal Khan, financial technology scout for venture capitalists and payments consultant, based in Turkey, blogged his similar bafflement.

After he too read the Dawn piece, he “wanted to explore the basis under which these raids are being conducted and wanted to comment on this further.”

He searched and searched.

Mr. Khan writes, “I’ve searched […], trying to find any circular &/or notification, gazette, SRO, press release, etc. related to Bitcoin &/or Cryptocurrency – but I could not find it.”

His knowledge of Pakistan’s legal history is impressive, and he cites all the documents he examined.Pakistan Government's and Street's Tensions with Bitcoin

“For bitcoin to be considered for money-laundering,” Mr. Khan notes, “it has to be defined into an asset class whereby [bitcoin] has been declared [money] or some form of an asset as per ‘some’ legal definition in some law in Pakistan.”

He concludes, “Right now, the Government of Pakistan in no way recognizes [bitcoin] as legal tender or legal ‘anything.’ It has no legal standing under any law in Pakistan.”

Since the series of articles in Dawn, bitcoin seems to be capturing the attention of Pakistani rupee holders anyway.

Localbitcoins exchange activity in the region as of this writing has risen exponentially, matching a global pattern.

Citing Japan’s approach, long-time Pakistani commodity trader Shahan Rehman urged acceptance “by a country compels people to jump on the bandwagon, increasing its price massively.”

As of now, official government pronouncements are not available to the public.

Are Pakistan’s laws on bitcoin just not available digitally? Is the government on purpose holding back? Tell us in the comments below.

After the Boss Calls Bitcoin a ‘Fraud’ — JP Morgan Buys the Dip

JP Morgan executive Jamie Dimon calling bitcoin a “fraud” and claiming he would fire any employee from his firm who traded the digital currency for being “stupid.” Now it seems JP Morgan has been caught red-handed purchasing a bunch of XBT shares, otherwise known as exchange-traded-notes, that track the price of Bitcoin.

Screenshot_8

After a Few Harsh Statements from Executive Jamie Dimon, JP Morgan Ltd., and Morgan Stanley Purchase Bitcoin ETNs

According to public records of Nordnet trading logs, the two associated firms JP Morgan Securities Ltd., and Morgan Stanley bought roughly 3M euro worth of XBT note shares. Interestingly after the recent regulatory crackdown in China, and the statements from JP Morgan’s senior executive Jamie Dimon talking trash about bitcoin, his firm bought the dip on September 15. In fact, out of all the companies on the list, like Goldman Sachs and Barclays, the JP Morgan team of buyers purchased the most XBT notes.

After the Boss Calls Bitcoin a 'Fraud' — JP Morgan Buys the Dip

Image via @IamNomad on Twitter.

Bitcoin exchange-traded-notes (ETNs) are a popular investment vehicle for mainstream investors and financial management firms who want exposure to bitcoin. A few institutions offer ETNs, among them Denmark-based Saxo Bank, which sells notes called the “Bitcoin Tracker.” These bitcoin-based ETNs track bitcoin price movements against the Euro and USD. Bitcoin ETNs have done extremely well over the course of 2017 following suit with bitcoin’s meteoric price spike.

JP Morgan Applies for Blockchain Patent 175 Times

JP Morgan doesn’t just purchase bitcoin notes, but is also heavily involved with the ‘blockchain fever’ that has infected banks across the world. The financial firm has applied for a “bitcoin alternative” patent with the U.S. over 175 times in 2013. The company is also working on an ethereum-based blockchain alongside, according to people familiar with the matter, working with Zcash development as well. With the ethereum project called “Quorum,” JP Morgan has its own Github repo that explains how the permissioned blockchain does not need consensus mechanisms like Proof-of-Work (POW) or Proof-of-Stake (POS).

After the Boss Calls Bitcoin a 'Fraud' — JP Morgan Buys the Dip

The financial publication Zerohedge reports that JP Morgan applied for a “Bitcoin Alternative” patent in 2013 and was rejected 175 times.

Former JP Morgan Executives Leave the Firm for Bitcoin and Blockchain Projects

After the Boss Calls Bitcoin a 'Fraud' — JP Morgan Buys the Dip

Former JP Morgan derivatives executive, Blythe Masters, is all about the Blockchain hype.

Additionally, former JP Morgan executives are all about blockchain technologies these days and even bitcoin. The veteran commodities trader, Daniel Masters, joined JP Morgan right after graduating college and in 2014 announced he was starting a bitcoin-based hedge fund. Another former JP Morgan mogul, Blythe Masters, started her own blockchain startup Hyperledger which is now run by the Linux Foundation. Masters is still heavily involved with the blockchain project and has a seat on the governance board.

Whether Jamie Dimon wants to admit it or not his firm was trading bitcoin-based notes after his statements. Further, over the past few years, JP Morgan cannot hide the fact that they are infatuated with blockchain technology, just like the hundreds of other financial institutions hoping they won’t be replaced.

What do you think about JP Morgan Securities Ltd. purchasing bitcoin-based exchange-traded-notes? Let us know in the comments below. 

Markets Update: Bitcoin Price Dives Deeper in the Midst of ICO Shakedown

dip-1068x1068The price of bitcoin dropping over 8 percent immediately after the digital currency’s all time high of $4,980. On September 4, bitcoin dropped to a low of $4,140. Speculators now believe the price drop today may be due to the recent announcement from the People’s Bank of China banning Initial Coin Offerings (ICO).

 

Bitcoin Markets Shave a Few Billion Again

There’s a bearish sentiment throughout bitcoin markets, just as we predicted would happen two days ago in our last price analysis. At press time, bitcoin’s price is trying to hold above the $4,150 territory as the currency’s value dropped another six legs down on Monday, September 4. Volume is still pretty decent with over $2.4B traded over the past 24-hours, but most of the action is stemming from this morning’s huge sell off. Bitcoin’s price dip caused the entire top eighteen cryptocurrency market capitalizations to drop, slashing prices from 5 to 34 percent, as most altcoins right now are in the red. This past week’s sell off has been the largest to date since mid-July, and we are seeing a similar 25-30 percent total correction during the bearish cycle.

Markets Update: Bitcoin Price Dives Deeper in the Midst of ICO Shakedown

Bitcoin price 11:30 am EDT September 4, 2017. Prices are now below the sub-$4,300 range.

Technical Indicators

Right now technical indicators show the Relative Strength Index (RSI) continues to head downwards, confirming that sellers right now have the upper hand. Of course, over the past three days, the two Simple Moving Averages (SMA) crossed hairs, and the long term 200 SMA is well above the short term 100 SMA. This again assures traders the storm is not yet over, and there is great resistance down the road. Looking at order books on some of the most popular exchanges, there are monstrous walls between the $4,600-5,000 positions. If support holds steady in the $4,160-4,200 area, bulls will have some work to do to eat through the next wave of resistance levels.

Markets Update: Bitcoin Price Dives Deeper in the Midst of ICO Shakedown

Bitcoin price, September 4, 2017. 200 SMA (white trendline) is well above the 100 SMA (green).

PBOC: ‘No ICOs For You’

Market sentiment seems to be geared towards the recent announcement from China’s central bank concerning ICOs. Cryptocurrency markets were already battling through a significant correction after bitcoin reached new price highs. So speculators think the recent banning of ICOs in China adds uncertainty to these types of markets. Otherwise, bitcoin is running its course through a typical 25-30 percent correction, after rocketing close to the $5K levels. Other spectators believe banks are spreading ‘fake news’ about bitcoin right now, because cryptocurrency popularity has risen exponentially. The UK publication the Mirror reports that certain banks are spreading these phony news stories to “restore the status quo.”

Bitcoin’s dip redlines the top eighteen altcoins below bitcoin’s market cap.

The Verdict

Right now bitcoin is holding above $4,150, so it may consolidate in this territory and push higher this week with some bounce back. Most of the top ten altcoins below bitcoin’s market cap lost larger percentages than bitcoin, which is likely tethered to the ICO news. This has pushed bitcoin’s market dominance up to 48.5 percent among the hundreds of altcoin market caps in existence. After the lull, bitcoin could follow its typical trend of moving up higher than before after a deep correction. So far this has been a consistent trend this year for bitcoin’s price, but we should never place all of our bets on this trend, because it may not be the case going forward.

Bear Scenario: Bitcoin markets could drop lower if the $4,100 floor collapses, bringing the price into the $4,000-3,900 territory. Right now big players have stepped off to the sidelines to catch more satoshis from weak hands and wait to choose a better entry point. Most technical indicators like the Stochastic, RSI, SMA, and order books are showing a strong negative sentiment at press time.

Bull Scenario: Right now, we are either going to consolidate in the $4,125-4,200 range, or we are seeing a short term bull trap at the moment. Bitcoin needs to break upper-level resistance past the $4,600 territory, but right now walls are considerably high. Of course topping the $5K range again is not out of the question, but it’s going to take some significant time to get there again.

Where do you see the price of bitcoin heading from here? Let us know in the comments below.

AMD and NVIDIA Dive Into the Graphics Card Mining Business

Graphics card manufacturers NVIDIA and AMD are preparing to release models of their cards for cryptocurrency mining. They have began to eye the digital coin market, because customers have been buying up cards to the point of depleting their supply. 

shutterstock_422487562-640x425

According to a Videcardz press article, both companies plan on releasing a version of theirAMD and NVIDIA Dive Into the Graphic Card Mining Business cards in order to satisfy people’s hunger for mining cryptocurrencies. The site said, “NVIDIA is said to launch GeForce GTX 1060 with GP106-100 GPU, a custom edition for mining. This card would lack display connectors and most likely it would not support any gaming at all. According to our sources, these cards, unlike normal editions, would only have 90 days warranty.”

According to these circulating rumors; AMD is also planning to produce a Polaris model for mining, but there are currently no more details on the nature of this miner. Some good news is that the NVIDIA graphic card miners will be cheaper than their gaming counterparts.

AMD Stock Price Climbs

As a result of all the people desiring these cards for use in mining, the stock price of AMD has climbed 7% on Tuesday. According to various news sources, this increase stock price occurred as the demand for their product has skyrocketed. The demand comes, of course, as a result of people buying cards for the purposes of mining.

An AMD spokesperson provided CNBC with a comment,

“The gaming market remains our priority. We are seeing solid demand for our Polaris-based offerings in the gaming and newly resurgent cryptocurrency mining markets based on the strong performance we are delivering

GPU’s not Suitable for Bitcoin Mining; That’s “Fake Fews”

It is good to remember, however, that these GPU miners are not being used to mine bitcoin, but rather to mine ethereum and other altcoins. During the early days of bitcoin mining these GPU’s were hot products and almost always sold out.AMD and NVIDIA Dive Into the Graphic Card Mining Business

According to Jamie Redman,  “Back in the early days throughout 2010 through 2013 graphics cards were a hot item when it came to bitcoin mining accessories. During that time many manufacturers and suppliers constantly ran out of stock for AMD series graphics cards, Nvidia, and other types of GPUs. Since then within the current bitcoin mining environment, most miners have pivoted to using application-specific integrated circuits (ASICs)”

Also, a recent article came out from barrons.com suggesting that news sites have been releasing “fake news.” Allegedly, these sites are saying that the graphics cards have been being used to mine bitcoin. The article read, “Steves writes it’s ‘fake news’ that either Nvidia’s or cards from AMD are being used to mine Bitcoin.” The site continued, “Alluding to ‘reports’ to that effect, Steves writes today that ‘this is not the case as Bitcoins are mined using ASICs and without becoming too technical about the terms, mining Ethereum is ‘ASIC resistant’ making it unprofitable.’”. Even so, there have been some instances of ASICs or sorts directed toward Ethereum’s algorithm.

Regardless of the fake news, it is interesting to see these manufacturers starting to produce cards specifically for the purpose of mining altcoins. No telling where the future will go in terms of GPU mining setups.

What do you think of this graphic card use craze? Let us know in the comments section below

Bitcoin Solves Runaway Inflation by Undermining Trusted Third Parties

Bankers, governments, and other trusted centralized organizations require society to be steeped in runaway inflation. These fiduciary cartels thrive when they manipulate the money supply and cause drastic shifts in prices within the market economy they lord over. They believe the money supply must be regulated and controlled for the economy to function optimally, lest society collapses as a result of too little currency injection. 

shutterstock_565449664-640x360Bitcoin Solves Runaway Inflation by Undermining Trusted Third Parties

Luckily, bitcoin solves the dilemma of needing a trusted third party to control the money supply. Before delving further into why this is the case, everyone must possess a proper and clear grasp of inflation and deflation as economic concepts.

Inflation and Deflation Explained

Inflation refers to the rise of the cost of goods and services in a market environment and the decrease of the purchasing power of the prescribed currency.

Investopedia defined inflation,

Inflation is the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling. Central banks attempt to limit inflation in order to keep the economy running smoothly.

Conversely, deflation is the decline in the cost of goods and service resulting from contraction of a money supply within an economic environment. Deflation generally causes an increase of the purchasing power of a currency within circulation. According to some economists, excess deflation can cause market actors to horde money. However, inflation tends to be the more troubling and nefarious problem.

For example, if a currency is Bitcoin Solves Runaway Inflation by Undermining Trusted Third Partiesheavily inflated, and you travel to the local supermarket to buy groceries, you may notice an upswing in the price of bread. This price “inflation” could be the result of the grocer arbitrarily altering the price, but more likely it occurred as a result of an inflated currency. In other words, too much printing and distribution of the currency would have devalued its purchasing power and caused bread to appear more expensive. In reality, the bread likely has had the same value as always, but the decreased value of the circulated currency provided the illusion that the bread was more expensive.

With a basic understanding of deflation and inflation clearly in mind, it would seem obvious that central money manipulators are needed to keep the economy grounded in a state of equilibrium, where money is created with integrity and circulated for the betterment of society. However, there are several reasons why having a small trusted group of elites control society’s wealth is impractical, unneeded, and dangerous…and has only instigated economic woes.

The Problem of Central Money Manipulation by Fiduciary Cartels

In some places, governments and central authorities have caused such extreme runaway inflation that a currency has lost all of its value and become worthless.

Recent examples include Venezuela and Greece. Mass currency devaluation through inflation likely also occurred in the United States, which led to the Great Depression. The Austrian economists suggested that creation of the Federal Reserve bank and its manipulation of the currency supply directly caused the depression, among other, more recent economic catastrophes.

A Mises article on Greece captured the effects of credit expansion and money manipulation, then the subsequent runaway inflation:

When currencies collapse, price inflation usually picks up. More units of the currency must be offered to acquire goods and services. What had started with credit expansion and distortions in the real economy, then, may well end up with high price inflation rates and currency reform.

Another reason to avoid allowing a handful people control currency in a centralized manner is because it provides a subtle way for those individuals to “steal” value from everyone. Whenever central authorities inflate the currency supply, as mentioned, it causes the value or purchasing power of the currency to decline. This value is basically lost or “stolen” from the people.

In other words, one group caused another group to lose their property’s value. In most places, this activity by another name is called “destruction of property” or “theft.” However, currency devaluation is such an esoteric and ingenious form of theft or destruction that it goes unnoticed and unexamined by the majority of the population.Bitcoin Solves Runaway Inflation by Undermining Trusted Third Parties

A last major reason to reject central suppliers of money is more obvious and terrifying. When a small group of people have direct access to the wealth supply of whole economies, what prevents them from electronically keying that wealth into their own personal accounts? What stops them from making themselves richer and the rest of the world poorer? What stops them from taking that wealth and using it to start wars or harm people in the name of national defense or protection?

The short answer to these questions is nothing. Nothing stops them. These individuals can fill their coffers at a whim, and control the rise and fall of whole country’s by arbitrarily inflating and deflating a currency as they see fit…and the result of allowing this kind of trust to be placed in the hands of these elite few have been absolutely devastating. It has led to mass warfare, mass exploitation of the population, and in some cases to runaway inflation, mass starvation and death.

Thank goodness the solution to these problems is here. It is called bitcoin.

Bitcoin Solves the Problem of Runaway Inflation, while Abolishing the Need for Centralized Trust

Bitcoin is a cryptocurrency that is automated by a consensus network algorithm. This algorithm, which was predetermined by creator Satoshi Nakamoto, has a set supply of bitcoins that will be distributed over the long term. This number is currently set to 21 million units of bitcoin.

This mathematically encoded Bitcoin Solves Runaway Inflation by Undermining Trusted Third Partiesnumber of bitcoin means that no central group or fiduciary cartel can control the currency. In other words, they cannot inflate or deflate a currency to the detriment of the population. In this sense, bitcoin is naturally deflationary or disinflationary. This denotes Bitcoin has utility in the sense that it neither inflates or deflates on a whim or caprice. No human actor can make changes to the protocol without achieving consensus.

In this regard, users of bitcoin have hedged themselves against control, against the small groups of trusted elites who can manage the flow or circulation of money across a population. When a currency like bitcoin is protected from artificial manipulation, it prevents people from using the creation and control of money to exploit and defraud others. It is the solution to the problem of runaway inflation and all forms of monetary control.

Some people think that bitcoin is naturally inflationary as a result of its algorithm. It is true the protocol specifies the minting of new coins via mining, but this is not the same as arbitrary inflation that causes ungodly increases in price of goods and services. The protocol was built to create coins in such a way that both heightens the value of bitcoin and does not allow for the market to be flooded. It is enough to keep the market humming, yet not overburdened.

Bitcoin, then, is the most obvious solution to stopping the fiduciary cartels and other central entities from lording over everyone and causing massive undue harm to millions. It prevents runaway inflation. It stops theft through that inflation. It thwarts loss of monetary value caused by unscrupulous actors. It kills the evil of greed. It is the economic panacea par excellence. Time to open a bitcoin wallet and take the power back.

Do you think bitcoin or other cryptocurrencies are a hedge against runaway inflation and the banking cartels? Let us know in the comments below. 

Britain’s Largest Broker Offers Exchange-Traded Bitcoin Investments

Britain’s leading brokerage firm, Hargreaves Lansdown, now offers bitcoin exchange-traded products to its 876,000 customers. These investments are available for regular brokerage accounts as well as self-invested personal pension accounts.

shutterstock_557025706-640x426

Largest British Broker

Britain's Largest Broker Offers Exchange-Traded Bitcoin InvestmentsHargreaves Lansdown plc is a financial service company based in Bristol, a city in South West England. The company “is the UK’s number 1 ‘investment supermarket’ for private investors,” according to its website. With 876,000 clients and more than £70 billion traded, the company currently offers “more than 2,500 funds, UK, US, Canadian and European shares, ETFs, investment trusts, bonds and gilts.”

Different types of accounts are available through its investment platform, also known as the Vantage Service. They include regular brokerage accounts, tax-efficient Individual Savings Accounts (ISA) and Self-Invested Personal Pension (SIPP) accounts.

Bitcoin Investments Available

Britain's Largest Broker Offers Exchange-Traded Bitcoin InvestmentsOn Thursday, June 1, two bitcoin investments were added to Hargreaves Lansdown’s platform; Bitcoin Tracker One and Bitcoin Tracker Eur. Listed on Nasdaq Nordic in Stockholm, the former is denominated in Swedish krona (SEK) and the latter in the euro (EUR). Both are issued and managed by Stockholm-based XBT Provider AB, with Global Advisors (Jersey) Limited as the guarantor.

Both instruments are bitcoin Exchange-Traded Notes (ETNs) which are debt securities backed by the credit of the issuer. They track the price performance of bitcoin, giving investors exposure to the digital currency. However, investors do not own the bitcoin itself. Danny Cox, Head of Communications at Hargreaves Lansdown, told the Telegraph that “We have seen a handful of clients asking for the ETN.”

XBT Provider describes its products:

The certificates will provide an exposure to the performance of the digital currency bitcoin as priced in USD on the Primary Marketplaces. Holders of certificates will have exposure to both the performance of bitcoin and the fluctuations in the relevant foreign exchange rate.

The primary marketplaces listed in the ETNs’ prospectus are Okcoin, Kraken, Bitstamp, Bitfinex, Itbit, Gemini, Gdax, and Gatecoin. The foreign exchange rate risk for Bitcoin Tracker One is USD/SEK whereas it is USD/EUR for Bitcoin Tracker Eur.

While the certificates are denominated in SEK and EUR, they track the price of bitcoin in USD. “As the BTC/USD market is the most liquid bitcoin market widely available for trading, we regard it as the most suitable underlying asset in a bitcoin product,” the company explained.

Both ETNs are currently available for Hargreaves Lansdown investors with regular brokerage accounts or SIPP accounts, but not tax-advantaged ISA accounts. The brokerage firm charges £11.95 per trade to start investing in these instruments but the cost decreases with the number of trades.

Bitcoin Investment Trust No Longer Available Online

Britain's Largest Broker Offers Exchange-Traded Bitcoin InvestmentsBarry Silbert’s Bitcoin Investment Trust (GBTC) also used to be available for online trading on the Hargreaves Lansdown platform for regular brokerage accounts, but not SIPP or ISA accounts.

However, the brokerage firm has posted a notice on its website which reads: “Bitcoin Investment Trust NPV cannot currently be traded online. For further information about trading this security, or to obtain a current price, please telephone our dealers.” This restriction is likely due to the trust having applied to list and trade on the NYSE Arca exchange. Its application is now pending approval by the U.S. Securities and Exchange Commission (SEC) as a bitcoin Exchange-Traded Fund (ETF).

What do you think about Hargreaves Lansdown offering bitcoin ETNs to its customers? Let us know in the comments section below.


India’s Government Divided Over Bitcoin Legalization

As the period for public comments regarding the regulatory framework for bitcoin comes to an end, a debate heats up among members of the Indian Parliament about the legalization of digital currencies. Meanwhile, bitcoin trading volumes remain strong in the country.

shutterstock_116872921-640x426

Parliament Members Divided Over Bitcoin

India's Government Divided Over Bitcoin LegalizationAt a Parliamentary Standing Committee of Finance meeting last week, a heated discussion erupted among members of the Indian Parliament about bitcoin.

A number of Parliament members, including BJP member Kirit Somaiya, “cautioned the finance ministry officials present at the meeting against any move to legalise bitcoin,” according to The Economics Times, India’s leading business newspaper.

A source told the publication:

Members feared that it [bitcoin] could become a parallel instrument for cycling black money and dodgy transactions and also be a source of terror financing.

India's Government Divided Over Bitcoin Legalization
Kirit Somaiya

They wanted the government to look into the vulnerability of bitcoin. Somaiya who has repeatedly spoken against the digital currency, calling it “illegal” on numerous occasions, raised a series of questions.

He asked the officials why the government was being ambivalent about this instrument, citing that they have not clarified whether it was a legally permissible instrument or not.

He also demanded to know whether officials are properly briefing the prime minister about the risks of bitcoin.

Bitcoin Could Soon Be Regulated in India

Currently, the same government has been considering legalizing the digital currency. Last week, the Finance Ministry started soliciting comments from the public on how to best regulate bitcoin. The deadline for submissions is May 31, and 3,357 comments have been submitted at press time. The majority of them are in support of regulating bitcoin.

India's Government Divided Over Bitcoin Legalization“Regulating bitcoins will address many such concerns and queries, including market acceptance, customer trust, investment security, money laundering, hawala, etc,” Hesham Rehman, co-founder and CEO of Bitxoxo Bitcoins Online, was quoted by The Times Group as saying. “For instance, regulations like strong eKYC and penalizing bitcoin trading in cash will help proper transaction records which will negate all the chances of any sort of illegal activity.”

Karthik Iyer, India’s Ambassador of the blockchain think tank P2P Foundations, also offered his viewpoint on the situation:

The government should think about treating cryptocurrencies as a commodity if not a full-fledged currency with exchange value. There is a lot of arbitrage in the markets and it can generate a great deal of wealth for India’s crypto traders.

India’s Bitcoin Volume

India's Government Divided Over Bitcoin LegalizationMeanwhile, bitcoin trading volumes in India have exploded. Last week, the price of a bitcoin skyrocketed globally. During that spike, it traded at nearly a $1,000 premium in India as supplies to the country have been limited.

This month, leading Indian bitcoin broker Zebpay announced that it had reached a milestone of over 500,000 app downloads and is adding more than 2,500 users daily. Struggling to keep up with the surge in new users and volume, Zebpay announced, “we have put a temporary buy limit of Rs 50,000 per day due to the shortage of bitcoin stock.”

India's Government Divided Over Bitcoin LegalizationNew user growth was also the cause of the downtime experienced at leading Indian bitcoin exchange by volume, Coinsecure. “We have been experiencing exponential growth of users on our website, causing slowness and stress on our systems,” according to a statement from CEO Mohit Kalra to Coinsecure’s customers.

Meanwhile, on the peer to peer Localbitcoins exchange, trading volumes in Indian rupee hit record highs as well, with nearly double the previous week’s volume of rupees traded for bitcoin.

India's Government Divided Over Bitcoin Legalization

Do you think that the Indian government will listen to their people and regulate bitcoin? Let us know in the comments section below.