Eight 100-meter-long metal warehouses in northern China are a case in point. Bitmain Technologies Ltd. runs a server farm in Erdors, Inner Mongolia, with about 25,000 computers dedicated to solving the encrypted calculations that generate each bitcoin. The entire operation runs on electricity produced with coal, as do a growing number of cryptocurrency “mines” popping up in China.
Turning Coal Into Bitcoin? The Dirty Secret of 2017's Hottest Market - Bloomberg
Japanese men in their 30s and 40s are driving the cryptocurrency market. They overtook their Chinese counterparts after regulators started to shut down exchanges. Many Japanese retail traders are engaged in leveraged trading, using borrowed funds, and a survey showed that they are generally less financially literate than their US counterparts.
One group of traders has risen to dominate bitcoin trading
We’ve said it many times before. As an actual payments mechanism, bitcoin sucks. It’s expensive to use and getting ever more so. It can be slow and unpredictable. It’s complicated and very user unfriendly (computer nerds will dispute this, but in doing so show how detached they are from the everyday needs of the average population). It depends on untested third parties for usability even more so than conventional electronic money. It’s prone to hacking. It demands users read Reddit all day every day to keep up with the latest exchange, transaction and wallet updates. It passes way too much responsibility to the average user (even the well-educated lose passwords). It sucks on the energy efficiency front. Its volatility makes it a crappy medium exchange. And finally, if not foremost, the more of a speculative asset it becomes the less useful it becomes as a currency.
Busting the myth that bitcoin is actually an efficient payment mechanism | FT Alphaville
At its lowest point, one bitcoin was equal to about $230. Given the currency's covert nature, the average person still may not understand how buying and selling actually works. Using the app Coinbase, which lets anyone trade bitcoins for a small fee, we decided to find out. A brief warning: If you're going to do this, tell your bank you're about to buy bitcoin. More on that later.
How to buy bitcoin: A step-by-step guide - Business Insider
Thiam won’t be paying with bitcoin. ‘From what we can identify, the only reason today to buy or sell bitcoin is to make money, which is the very definition of speculation and the very definition of a bubble.’ Tidjane Thiam Credit Suisse Group AG CS, +4.93% Chief Executive Tidjane Thiam made clear where he stands on bitcoin, joining a growing rank of high-profile bankers and financiers to scorn the soaring cryptocurrency.
Bitcoin is the ‘very definition of a bubble’: Credit Suisse CEO - MarketWatch
Bitcoin futures are set to begin trading Sunday at the CBOE and a week later at the CME, and retail brokerages are bracing. Interactive Brokers' founder Tom Peterffy said on CNBC's "Fast Money" on Thursday, his concern is that the cryptocurrency could continue to rise to $100,000 or more before crashing to zero, and could pull down small brokerages in the process. Bitcoin's price has skyrocketed just this week from $12,000 to $19,000 and back down below $16,000. Futures trading is only seen as further legitimizing bitcoin even as some prominent market participants say a dangerous bubble is forming.
Interactive Brokers warns of risk from bitcoin futures
Eight years since the birth of bitcoin, central banks around the world are increasingly recognizing the potential upsides and downsides of digital currencies. The guardians of the global economy have two sets of issues to address. First is what to do, if anything, about emergence and growth of the private cryptocurrencies that are grabbing more and more attention -- with bitcoin now surging toward $10,000. The second question is whether to issue official versions.
Here’s What the World's Central Banks Really Think About Bitcoin - Bloomberg
Are crypto pioneers looking to prove that laissez faire anarchic mechanisms are capable of creating a caveat emptor stateless decentralised utopia where every man is king of his own domain, and where the state is rendered entirely pointless? Or are they engineering a means by which the world’s dark markets, criminal networks, rentiers and tax-evaders can continue to suck on the productive population through opaque and shadowy parallel networks, while they continue to give nothing back in return? Because if it’s the latter, a steady campaign of propaganda to present what is effectively the reemergence of unregulated and predatory shadow banking systems — this time on steroids — as legitimate technical innovation would be necessary.
What is crypto’s agenda really? | FT Alphaville
Here’s a thought experiment. If I purchase 0.000,000,001 of a bitcoin from Kadhim for $100, should the value of one bitcoin now be considered to be $100bn per bitcoin? If not why not? Ah, you say. Because the vast majority of buyers would not be prepared to buy for that absurd valuation. But here’s the thing. Are the vast majority of “buyers” really prepared to buy for the current valuation? Or are they simply thinking in dollars worth rather than in bitcoin’s worth? The difference is important.
Bitcoin’s fractioning problem | FT Alphaville
It's really easy to buy and sell bitcoin, as I showed you in an earlier story, and fees through apps like Coinbase are low. That's probably another reason it's so attractive. It takes just a few seconds to enter in how much you'd like to purchase, for example, and you can sell it at a moment's notice. I sold mine on Monday morning after my investment hit a weekend low of $166 and returned back to $200 as bitcoin's value increased on news of bitcoin futures trading.
What I learned from owning bitcoin
A survey of over 200 board-level UK executives recently found that while over half of businesses sampled are planning blockchain initiatives, more than 40% of non-IT/data senior executives admit to not fully understanding blockchain technology. This lack of understanding, Radia says, is leading many to invest in variant blockchain applications that don’t adhere to the original concept of blockchain technology – to verify the order in which entries are made to a ledger, without any centralized authority. For Radia, blockchain is currently undergoing a ‘honeymoon’ phase that many new technologies before it have experienced; one where hype and FOMO (fear of missing out) are clouding people’s perception of what the technology actually is, and how it compares to other things. “I see lots of talks that treat blockchain as a black box that has magic properties. These people talk about all the applications it can be used for, assuming these magic properties,” said Radia. “But just because you can do something with it doesn’t mean it couldn’t have been done before using an already tested method. And it doesn’t mean it’s the best solution.”
Don’t get caught up in blockchain hype | APNIC Blog
France will propose that the G20 group of major economies discuss regulation of the bitcoin virtual currency next year, Finance Minister Bruno Le Maire said on Sunday.
French finance minister calls for bitcoin regulation debate at G20
In a note on Monday, Rochester forecast that bitcoin would have a growing impact on energy markets, particularly coal. Bitcoin mining requires a lot of electricity. And China, the world's largest coal producer and consumer, hosts about 71% of the cryptocurrency's mining pools, Rochester said. "Estimates were made in March 2016 expecting Bitcoin’s energy consumption to match that of Denmark by 2020," Rochester said. "Today bitcoin already has matched that, three years ahead of schedule. So if it’s not risk-off inspired price action from bitcoin that moves other markets how about higher energy costs?" Bitcoin's energy consumption stems partly from the fact that it's a proof-of-work cryptocurrency, meaning that miners are rewarded for solving mathematical puzzles on the blockchain, and for helping to prevent attacks on the bitcoin network. As the calculations get more complicated, more energy is required.
Bitcoin's price volatility could start moving energy markets - Business Insider
Bitcoin will surge past $20,000 and continue its meteoric march into six figures, according to independent research analyst Ronnie Moas. "Bitcoin is already up 500 percent since I recommended it in the beginning of July, and I'm looking for another 500 percent move from here," said Moas, the founder of Standpoint Research, a self-described "one-man operation" based in Miami. Over the summer, Moas put a $5,000 price target on bitcoin for 2018. At the time, the digital currency was trading at just $2,600. Since then, it has surged to $18,168 as of Monday, according to prices tracked on Coinbase.
Bitcoin price: Ronnie Moas sees cryptocurrency at $300,000-$400,000
Riot Blockchain is just one of many companies that have seen a significant jump in market cap after announcing a pivot to the blockchain space. Over the past week, shares of LongFin Corp. soared as much as 2,400% after that company announced it had purchased Ziddu, a blockchain company specializing in business-to-business warehouse payments. Getting in on the area has been a hot trend as of late as companies look to capitalize on the booming cryptocurrency space. This past weekend, CME Group launched bitcoin futures, sending the cryptocurrency to a record high near $20,000 a coin. In total, the cryptocurrency universe has a market cap of more than $600 billion, according to CoinMarketCap.com.
Riot Blockchain: Citron Research says stock reached 'full mania' - Business Insider
The most bullish call for the digital currency bitcoin so far has been at about $1 million, while the most bearish call from those who dismiss it as a fraud or a bubble think it will crash to zero. Covering his bases, Teunis Brosens, a senior economist at ING, sees both extreme targets as possible. Although the most probable outcome, in his view, is for bitcoin to survive in a less high-profile way than it currently has. “The ‘true’ value of Bitcoin depends on its future use case,” wrote Brosens. “If users would, en masse, lose interest, then it could end at zero. On the other hand, in the unlikely scenario that Bitcoin takes over all worldwide payments, its value could rise beyond $1 million.” Brosens didn’t give a specific target, but suggested that over the long term, the digital currency “has little to offer a wider audience, and will likely return to being a niche product for a select group of enthusiasts.”
One economist says bitcoin could hit $0—or $1 million - MarketWatch
People may be flabbergasted by the idea of an illustration of a cat selling for more than $114,000, but CryptoKitties is more than that, according to its founders. It's a lesson in both blockchain and genetics wrapped up in a digital game. "There's no central organization that owns these things," said CryptoKitties co-founder Mack Flavelle. "These cats do a great job of explaining blockchain to people. There's a democratization of how to use blockchain."
CryptoKitties makes it easy to understand blockchain and genetics
We wrote our first and only newsletter on cryptocurrencies when the bitcoin price was still under $100. After a 100-fold appreciation, much has changed in the cryptocurrency world. And yet a disturbing amount has remained the same for bitcoin itself. The biggest winners from bitcoin so far are the inspired developers, early investors, exchanges, miners, money-launderers, and thieves. Bitcoin may continue to swell in value and become a universal, global currency, but it is still a dream. The future of viable blockchain applications lies elsewhere. I'm not going to tell you which cryptocurrencies are best to invest in, nor will I tell you when prices will collapse (it's not uncommon for prices to drop 80%-90% from their peak). I can tell you about the psychology driving bitcoin prices into bubble territory. Many rational value investors and financial analysts are proclaiming that there is no value in cryptocurrencies. But they are using the wrong toolkit. Analyzing cryptocurrencies with traditional valuation metrics is impossible. The psychological aspects of valuation contain the key to understanding bitcoin. Bitcoin's $285 billion market cap as of Dec. 12 certainly is a measure of value.
Bitcoin is still a good bet as long as greater fools are buying - MarketWatch
Other problems with bitcoin include: 1. Four mining pools provide half of bitcoin’s capacity, making it more susceptible to attack. 2. There are numerous and often-confusing blockchain forks. Bitcoin Cash is perhaps the most viable, but it also dilutes the brand. 3. Bitcoin transaction speed falls far behind bank transactions, and it cannot be fixed in its main branch. 4. Use of bitcoin in daily transactions is not increasing. Per this article: "The number of bitcoin transactions on a daily basis has been consistent in 2017." 5. By the number of the wallet, owner’s transactions can be tracked, which substantially undermines anonymity.
Bitcoin is still a good bet as long as greater fools are buying - MarketWatch
The lightning network is the highly anticipated second-layer payment network to be deployed on top of Bitcoin. And as an open protocol, it's relatively easy to deploy lightning network support for other cryptocurrencies that are forked from Bitcoin's codebase - like Litecoin. Interestingly, if the lightning network runs on different blockchains, these chains can effectively be linked together. If one or several peers on the network are willing to take one type of coin and forward another, it's possible to send bitcoins on one end of a channel that will end up as the equivalent in litecoin on the other end.
The Lightning Network Now Supports Transactions Across Blockchains - Nasdaq.com
According to a report by CNBC, the Lightning Network would potentially allow for transactions and microtransactions utilizing Bitcoin to take place instantaneously. Aurélien Menant, the founder and CEO of cryptocurrency exchange Gatecoin, described the network as "a game-changing innovation," saying that it "utilizes smart contract technologies to enable instant micropayments using cryptocurrencies such as Bitcoin." Analysts view the lock-in and implementation of the SegWit protocol as an essential step toward the implementation of the Lightning Network, which would constitute a sort of added layer of framework which could be grafted on to the existing Bitcoin network.
What is the Bitcoin "Lightning Network?" | Investopedia
Cryptocurrencies like bitcoin provide a unique service: Financial transactions that don’t require governments to issue currency or banks to process payments. Writing in the Atlantic, Derek Thompson calls bitcoin an “ingenious and potentially transformative technology” that the entire economy could be built on — the currency equivalent of the internet. Some are even speculating that bitcoin could someday make the U.S. dollar obsolete..
Bitcoin could cost us our clean-energy future | Grist
Today, each bitcoin transaction requires the same amount of energy used to powernine homes in the U.S. for one day. And miners are constantly installing more and faster computers. Already, the aggregate computing power of the bitcoin network isnearly 100,000 times larger than the world’s 500 fastest supercomputers combined. The total energy use of this web of hardware is huge — an estimated 31 terawatt-hours per year. More than 150 individual countries in the world consume less energy annually. And that power-hungry network is currently increasing its energy use every day by about 450 gigawatt-hours, roughly the same amount of electricity the entire country of Haiti uses in a year..
Bitcoin could cost us our clean-energy future | Grist
A recent report suggests that at current prices, Bitcoin miners will consume an estimated 8.27 terawatt-hours per year. That might sound like a lot, but it’s actually less than an eighth of what U.S. data centers use, 1 and only about 0.21 percent of total U.S. consumption. It also compares favorably to the currencies and commodities that bitcoin could help replace: Global production of cash and coins consumes an estimated 11 terawatt-hours per year, while gold mining burns the equivalent of 132 terawatt-hours. And that doesn’t include armored trucks, bank vaults, security systems and such. So in the right context, bitcoin is positively green.
Bitcoin Is Greener Than Its Critics Think - Bloomberg
About 58 percent of the world’s large cryptocurrency mining pools were located in China, followed by the U.S. at 16 percent, the researchers said. China is the biggest producer and consumer of coal, and server farms in provinces such as Xinjiang, Inner Mongolia and Heilongjian are heavily reliant upon the fuel.
Coal Is Fueling Bitcoin’s Meteoric Rise - Bloomberg
“The ‘true’ value of Bitcoin depends on its future use case,” wrote Brosens. “If users would, en masse, lose interest, then it could end at zero. On the other hand, in the unlikely scenario that Bitcoin takes over all worldwide payments, its value could rise beyond $1 million.” Brosens didn’t give a specific target, but suggested that over the long term, the digital currency “has little to offer a wider audience, and will likely return to being a niche product for a select group of enthusiasts.”
One economist says bitcoin could hit $0—or $1 million - MarketWatch
The entire spectrum of investors — from those who believe bitcoin is a fraud to those who argue that its price will reach $1 million — agrees that the blockchain is a transformational technology that will increase the speed, efficiency, cost, and transparency of many transactions. But many of these investors do not see a connection between blockchain the technology and the cryptoassets. They do not see how the holders of cryptoassets (including bitcoin) will benefit financially from blockchain becoming a dominant technology.
The blockchain economy is coming, with or without bitcoin - MarketWatch