How Blockchain Technology Will Change the World

The president of Venezuela announced last month
that the country will launch its own cryptocurrency.

Apparently the new monetary unit, called the “petro,”
will be backed by oil and gas reserves.

The move comes as the Venezuelan bolivar has collapsed
and U.S. sanctions have crippled the country’s ability to
trade and borrow.

The country is attempting to reset its financial slate by jumping
on the crypto bandwagon.

China, Russia and Ukraine are also seriously looking into
launching cryptographic versions of their own currencies.

However, these state-run cryptos will suffer from the same
problems their legacy currencies did.

That is, governments can still print as much money as they want.

The takeaway here is that countries will adopt this technology
because it’s superior to the old system.

It’s faster, cheaper and more secure.

But the beauty of real crypto is that it’s not controlled by central
banks or governments.

The number of coins can be hard capped.

Bitcoin, for example, will only ever have 21 million coins.

Bitcoin, the original cryptocurrency, is responsible for this budding revolution.

Its blockchain technology, which is open-source and free to use,
is set to change the world.

With blockchain, anyone can create and trade scarce digital assets.

So while nations will almost certainly attempt to modernize their
own fiat currencies by “going crypto,” the real action is happening
with independent cryptocurrencies.

Crypto Rising

There are now thousands of unique crypto assets
(cryptocurrencies and tokens).

The value of all these assets combined recently passed $500 billion,
with bitcoin currently making up 33% of the total as I write.

Each asset has its own purpose and niche.

Here’s a quick overview of the top two cryptocurrencies,
bitcoin and Ethereum.

Bitcoin is seen as “digital gold” – a new way to store and transfer value.

As the original coin (and the most liquid), it also acts as a sort of
“reserve currency” for the crypto world.

Ethereum, the second-largest digital asset, is more complex.

It’s a cryptocurrency, but it’s also much more than that.

It’s a platform for building decentralized applications.

It has its own coding language that can be used to create “smart contracts.”

The most common use of smart contracts today is initial coin offerings (ICOs).

ICOs are similar to IPOs, but for new cryptocurrencies and tokens.

Money is raised from the public to fund the development of new projects.

Most ICOs today take place on the Ethereum network.

In essence, you send Ethereum to a specific address and receive
the new coins in exchange.

The entire process is powered by smart contracts and hosted on the
Ethereum network, which is made up of thousands of powerful
computers around the world.

Gearing Up

Blockchain will likely go down in history as an invention comparable
in magnitude to the printing press.

The tools necessary to create and maintain digital assets are
now freely available to all.

Cryptocurrencies are leading the way, but the potential applications
of this technology are simply mind-blowing.

Here are a few:

  • Dividend distribution
  • Record keeping
  • Profit sharing
  • Voting
  • Loyalty programs
  • Health records
  • Digital identity services
  • Cap table management
  • Prediction markets
  • Options
  • Distributed web hosting.

There are multiple crypto projects tackling each of these gigantic areas.
And we’ve only just begun to explore the possibilities.

So when I hear someone call crypto a fad or a fraud, I chuckle.

What we’re seeing is the beginning of a technological breakthrough
the likes of which the world has never seen .



Winklevoss Twins Will Not Sell, Even if Bitcoin Price Hits $380,000


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Tyler and Cameron Winklevoss, better known as the Winklevoss twins, still believe bitcoin will remain as the best investment over the next few decades.

$8 Trillion Market Cap

In 2012, when Facebook went public, the Winklevoss twins received $45 million from the settlement of Facebook founder and CEO Mark Zuckerberg. In spite of their lawyers’ recommendation to take a cash deal of $45 million, the Winklevoss twins received the settlement in Facebook shares. By 2013, the Winklevoss twins amassed a fortune of $300 million, as the shares of Facebook skyrocketed.

After a successful exit from Facebook, the Winklevoss twins started to purchase bitcoin at $10, during a time in which only a handful of investors such as Roger Ver and Charlie Shrem had invested in the cryptocurrency. Over a span of a few months, the Winklevoss twins purchased 120,000 bitcoin at a $11 million valuation.

Today, the 120,000 bitcoins purchased by the Winklevoss twins are worth $1.68 billion, and the Twins have netted the twins a profit of $1.669 billion within merely four years.

Bitcoin price trend from 2013 to 2017

While several analysts have stated that the growth of bitcoin is limited given its market valuation has already achieved $236 billion. However, the Winklevoss twins told Nathaniel Poppers of the New York Times that the price of bitcoin will likely increase exponentially throughout many years ahead, as it evolves into a major asset class, robust store of value, and medium of exchange.

The Winklevoss twins further emphasized that they will not sell bitcoin even when its market cap surpasses that of gold at $8 trillion or when its price surpasses $380,950. Tyler Winklevoss noted that bitcoin is better than gold because it is programmable as money and has many advantages over the traditional asset such as transportability, fungibility, security, and divisibility.

“In a funny way, I’m not sure we’d even sell there [when bitcoin price surpasses $380,950]. Bitcoin is more than gold — it’s a programmable store of money. It may continue to innovate,” Tyler told the New York Times in an interview.

More importantly, Tyler added that the Winklevoss twins are not affected by the high volatility and rapid price movements of bitcoin, because they believe in the long-term performance of the cryptocurrency and the technology behind bitcoin.

“We are very comfortable in very high-risk environments with absolutely no guarantee of success. I don’t mean existing in that environment for days, weeks or months. I mean year after year.”

Winklevoss Twins and Gemini

Apart from their success as early-stage bitcoin investors, since 2015, the Winklevoss twins have operated one of the most widely utilized cryptocurrency exchanges in the global market, Gemini.

As a fully regulated cryptocurrency exchange by the US government, Gemini has continued to serve professional traders and casual investors in the US market, accounting for a large portion of the USD-to-BTC trading pair.

Ari Paul, the co-founder of cryptocurrency hedge fund Blocktower and highly respected cryptocurrency analyst, explained that Gemini is an underappreciated exchange. Although it lacks the trading volume and user base of Coinbase and GDAX, Gemini remains as one of the few exchanges US-based investors trust.

“Gemini is an underappreciated exchange, one of the few exchanges I trust as a custodian,” said Paul.

Featured image from Flickr/TechCrunch.

Here’s Why You Will Not Get Paid From Your Job In Crypto

Cryptocurrency was designed to eventually replace traditional fiat currency, but there could be one vital part that is stopping this from happening. Your employer cannot currently pay you in cryptocurrency. Whilst this of course would likely change if virtual currencies started becoming more mainstream, but, at present, this is simply not the case.

Here are just some of the reasons why…

Some laws don’t allow it…

Physical Bitcoins on Black Background

This is particularly apparent in the US, stating in the Fair Labor Standards Act (FLSA) that employers must meet at least a portion of the minimum-wage requirements by paying workers in cash or cheques. This includes no cryptocurrencies. However; outside of these requirements, other forms of payment can be agreed, which could mean that the rest of the wages could be made up out of cryptocurrencies.

They may be deemed securities…

The Securities and Exchange Commission have released a statement that served to remind people that any investments that are associated with them crosses into other geographic boundaries without the owners’ knowing about it, increasing the risk.

The SEC also have the power to decide whether certain cryptocurrencies are designated as securities, which would mean that employers would then have to comply with any additional laws surrounding securities and the aforementioned wage related rules.

Some employers could end up feeling wary…

Tax on Wooden Block Letters Comic Style

Cryptocurrencies are known for being incredibly volatile, which could leave some employers feeling very nervous at the thought of having to pay their employees in this way. Combine this with the fact that they are not accepted everywhere, and it is easy to see why some employers feel on edge.

The tax implications vary in different countries…

Taxes work differently in different countries, meaning this could become a problem should an employer hire someone who works in one country, but pays taxes in another. At the moment, in the majority of countries, all earnings have to be reported in fiat currency as well, even if they have been earned in a virtual currency.

Bank Bans ‘Not Surprising’ Given Bitcoin Risks, Sweden Says

  • Swedish minister comments following Nordea’s employee ban
  • Finance unions have challenged such limits on staff freedoms

As Nordea Bank AB’s Bitcoin ban for staff has unions questioning the legality of the move, Sweden’s minister in charge of financial legislation says it’s understandable that the industry is resorting to such measures.

“If banks have rules on what investments they or their employees are trading in, it is up to them,” Financial Markets Minister Per Bolund told Bloomberg. “I am not surprised some banks are setting up rules, considering the volatility in the cryptocurrency market.”

Asked specifically whether the ban was legal, Bolund said he “would leave that for the labor market parties and legal experts to assess.”

Bitcoin Taking Growing Regulatory Scrutiny, From Some, in Stride

Nordea said this week a decision to prohibit its roughly 31,000 employees from trading Bitcoin and other cryptocurrencies was prompted by a lack of regulation in the area. But finance unions in Sweden and Denmark were quick to characterize the move as a potentially unlawful curb on staff freedoms. Regulators have said they won’t intervene, arguing the matter is ultimately a question for politicians to resolve.

Nordea CEO Defends Bitcoin Ban Amid Fears Staff ‘Can Lose a Lot’

In Finland, where Nordea intends to move its headquarters this year to be inside the bank union, the local regulator says it’s a “political question.” Hanna Heiskanen, senior digitalization specialist at the Finnish FSA, says the agency is “closely” watching movements in the world of cryptocurrencies in coordination with international authorities.

But the regulatory hole is unavoidable. Heiskanen listed the laws and directives that the FSA can act on in overseeing transactions in currencies and other regulated instruments. But because “Bitcoin lies outside the definition of a financial instrument,” these regulations “don’t apply,” she said.

Finland’s banks have no industrywide self-imposed regulations concerning trading cryptocurrencies, though binding rules have governed member companies’ staff securities’ transactions since at least 2013. While trading in cryptocurrencies has been discussed at banking lobby Finance Finland, regulating the practice has not yet been broached, according to Head of EU Public Affairs Mari Pekonen-Ranta.

Bolund says Sweden’s government is aware of the risks posed by the rise of cryptocurrencies and is monitoring the developments to ensure that consumers aren’t put at risk.

“We need to avoid that the new development can be used by criminals and terrorists to evade existing regulation concerning money-laundering and financing of terrorism,” he said.

Bitcoin’s About to Get Easier for Wall Street Pros to Trade

Bolund pointed to a political agreement reached in Europe in December, requiring EU members “to subject virtual currency exchanges and wallet providers to anti-money laundering and counter-terrorist financing regimes.” He said that in Sweden, exchanges are already subject to anti-money laundering and counter-terrorist financing legislation “since the FSA treats them like payment service providers.”

“We will continue to follow this issue,” Bolund said. “We are following this issue and the consumer protection aspect of it. This as well as other issues are discussed on the international level.”

Robinhood’s Fine Print on Free Bitcoin Trades Is a Big Buzzkill

Robinhood Financial LLC’s fine print is a real buzzkill.

The broker, which already offers free stock trades, announced Thursday that some customers will get to place commission-free trades of Bitcoin and Ether starting in February. Its website promises 24/7 cryptocurrency trading with the headline “DON’T SLEEP.”

But scroll down, and things start sounding dire.

“Cryptocurrency trading may not generally be appropriate,” according to text written in a tiny font at the bottom of the page. “Cryptocurrency trading can lead to large and immediate financial losses.” Robinhood goes on to note that several U.S. regulators have highlighted the risks of trading these things.

Baiju Bhatt, a Robinhood co-founder, waxes optimistic.

“Bitcoin has a resiliency to it,” he told Bloomberg in an interview. “This is something that we also feel like really fundamentally aligns with the mission of the company — to make the financial system more accessible to the rest of us.”

See also: Robinhood is adding Bitcoin and other cryptocurrency trading

The website is far less sanguine:

“Trading in cryptocurrencies comes with significant risks, including volatile market price swings or flash crashes, market manipulation and cybersecurity risks.”

The warning hasn’t deterred the 150,000 people who signed up within a few hours to get early access to these new trading privileges.

Digital Currencies Creating ‘Frenetic Activity’ in Millennial Investing: Brokerage Firm CEO

Retail investor activity is on the rise, claims the CEO of brokerage firm TD Ameritrade, thanks in part to heightened interest in digital currencies and pot-related securities.

Speaking on CNBC’s ‘Closing Bell,’ the chief of Ameritrade, Tim Hockey, said that there has been ‘frenetic activity from a retail point of view.’

According to Hockey, boosting that growth is the millennial population. In terms of new entrants to the market place, Hockey explained that they are experiencing 72 percent on year-over-year growth with those new accounts.

Helping to fuel this rise of interest in millennial trading is reportedly due to the increasing attention on digital currencies such as bitcoin and the legalisation of marijuana in various U.S. states.

In Hockey’s opinion in the last full quarter of 2017, digital currencies and marijuana made up around seven to eight percent of the 726,000 trades on TD Ameritrade. A year previously they only accounted for around two percent.

With December came a peak in cryptocurrency prices with bitcoin within touching distance of $20,000 for the first time.

Hockey added:

We all saw it, right? We went to holiday parties. Everybody was asking about your opinion around cryptocurrencies, blockchain.

However, since then, values in the market have abated slightly with bitcoin currently trading at $11,143, according to CoinMarketCap. Yet, regardless of this dip in price amid regulatory uncertainty and fears of a bubble, TD Ameritrade is still trading high. According to Hockey, the company is doing around 975,000 trades a day.

He said:

If you took out all of the blockchain, all of the cryptocurrencies, and all of the cannabis-related stocks that number would still be just shy of 900,000. So there’s great general interest as well.

TD Ameritrade is extending trading hours on its platform to 24 hours, five days a week for major popular exchange-traded funds. In Hockey’s opinion, this is the right move as market-moving events often take place overnight.

According to Brian Kelly, portfolio manager of the BKCM Digital Asset Fund, now is the right time to invest in digital currencies. Speaking on CNBC, Kelly explained that during this period of ‘hands-off’ as uncertainty remains over the market regarding regulation, ‘now’s the time you start looking at it, on the buy side.’

With money still flowing into the cryptocurrency, ‘this is not the end of bitcoin,’ he explained. While the market may be in a dip at the moment interest still remains. And for those aged 35 years and under, now seems to be as good a time as ever.

A Look at Who Owns Bitcoin (Young Men), and Why (Lack of Trust)

  • 71 percent of digital coin’s owners are male, survey says
  • Mistrust of government, growth outlook cited as reasons to buy
 Five Reasons ‘Bitcoin Jesus’ Loves the Digital Currency

Chances are, you’ve heard of Bitcoin. But the odds are much smaller that you actually have a stake in it.

Nearly 60 percent of Americans have heard or read about the world’s largest cryptocurrency, according to a joint SurveyMonkey and Global Blockchain Business Council poll of more than 5,700 adults conducted in January. But only 5 percent of people actually own the digital coin.

Those few Bitcoin investors are of a fairly consistent demographic. An overwhelming 71 percent of them are male. The majority — 58 percent — are young, between the ages of 18 and 34 years old. And unlike the broader U.S. population, nearly half of them are minorities.

The Breakdown of Bitcoin Buyers

Majority of cryptocurrency’s owners are younger males, near half are minorities

Source: SurveyMonkey/GBBC Data

When asked why they bought the crypto asset, investors answered that a combination of a lack of trust and an opportunity for return are at play. About one-third of Bitcoin owners said it was a means to avoid government regulation — 24 percent also said they trust Bitcoin more than the U.S. government in a separate question — and about two in 10 saw it as a hedge against crashes in traditional assets. More than 60 percent also said that buying the digital coin was seen as a growth investment.

Last year, that investment largely paid off. The cryptocurrency skyrocketed more than 1,400 percent in 2017, reaching a high of more than $19,500 last month. But much of that gain has been given back — Bitcoin has fallen by almost half since December, now trading near $11,000, according to Bloomberg composite data.

Roughly 70 percent of those surveyed this month said Bitcoin will be worth somewhat to significantly more five years from now. But 38 percent also said they see it as a bubble that’s poised to pop this year. Around 41 percent of Bitcoin owners said the same.