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Madbyte News - October 1, 2020


What was Bitcoin's value over the last several years on October 1st? In 2012 it was super low at $11 USD, with the first halving only 2 months away. In 2013 it was at $127 and the Cyprus banking crisis hit the financial markets. Also, during 2013 was the first time Bitcoin passed the price of gold for a brief moment.
In 2014 it was valued at $387. By the end of the year it was given the title by The Guardian as the worst investment of the year. Mt.Gox exchange had failed and Ethereum did its ICO (Initial Coin Offering) and the silk road website was taken down. Tim Draper bought a good chunk of Bitcoins at auction and was predicting it to go to $10,000.
In 2015 it was lower at $238 but in 2016 the price was at $614 with the second halving having happened. During 2017 it reached a lofty $4404. 2017 also was when ICOs became popular with a few blockchain projects raising over $200 million. In 2018 Bitcoin was at $6601 and the ICO frenzy died. During 2019 it was $8334 and some exchanges continued to get hacked. Bakt opens futures trading and bitcoiners are talking about the third halving in 2020. And so today bitcoin is valued at about $10,600.
Most of those years saw massive changes up and down in value. For example, in 2013, there was a massive rise of 10,250% from $12 to $961 but in 2014 it dropped 52%. If you look at Bitcoin valuations from the October 1st lens it seems like a great time to buy especially after a halving.
We continue to see Bitcoin as the number one crypto for a portfolio even though almost every week we see another new cryptocurrency pop up. Some of them even hit the top 10 on Coinmarketcap very quickly. For example, UNI (Uniswap) is up over 2700% on Binance since it was listed on Sept.17, 2020. But history shows that most altcoins over the long term are not very successful.
Be careful of FOMO but happy investing, From the Madbyte Team.
-- In summary, Bitcoin, on October 1st was: 2020 - $10600 2019 - $8334 2018 - $6601 2017 - $4404 2016 - $614 2015 - $238 2014 - $387 2013 - $127 2012 - $11
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Price Discovery in Bitcoin exchange

About thirty days ago I shared a chart on Price Discovery in this sub. There was a lot of interest in it and I promised to explain in detail a Bitcoin price discovery algorithm.. I do so in this post.
*this text post is a slightly shorter version of what I wrote in my blog.

TL;DR

I applied price discovery algorithms to 5 Min OHLCV data from Bitmex and CME contracts and Bitstamp, Coinbase, HitBTC, Kraken, Poloniex, Binance, and OkEx BTCUSD/BTCUSDT markets from March 2016 to May 2020. Some exciting results I got was:

Introduction

Price discovery is the overall process of setting the price of an asset. Price discovery algorithms identify the leader exchanges whose traders define the price. Two approaches are most famous for use in Price Discovery. Gonzalo and Granger (1995) and Hasbrouck (1995). But they assume random walk, and a common efficient price. I do not feel comfortable assuming random walk and common efficient price in Bitcoin Markets. So I used this little know method by De Blasis (2019) for this analysis. This work assumes that "the fastest price to reflect new information releases a price signal to the other slower price series." I thought this was valid in our market. It uses Markov Chains to measure Price Discovery. Without going into the mathematical details the summary steps used was:
De Blasis (2019) names this number Price Leadership Share (PLS). High PLS indicates a large role in price discovery. As the sum of the numbers is 1, they can be looked at as a percentage contribution. I recommend reading the original paper if you are interested to know more about the mathematical detail.

Data

Andersen (2000) argues that 5 Minute window provides the best trade-off between getting enough data and avoiding noise. In one of the first work on Bitcoin's Price Discovery, Brandvold et al. 2015 had used 5M window. So I obtained 5M OHLCV data using the following sources:
Futures data are different from other data because multiple futures contract trades at the same time. I formed a single data from the multiple time series by selecting the nearest contract until it was three days from expiration. I used the next contract when the contract was three days from expiration. This approach was advocated by Booth et al ( 1999 )

Analysis

I can't embed the chart on reddit so open this https://warproxxx.github.io/static/price_discovery.html
In the figure above, each colored line shows the total influence the exchange had towards the discovery of Bitcoin Price on that day. Its axis is on the left. The black line shows a moving average of the bitcoin price at the close in Bitfinex for comparison. The chart was created by plotting the EMA of price and dominance with a smoothing factor of 0.1. This was done to eliminate the noise. Let's start looking from the beginning. We start with a slight Bitfinex dominance at the start. When the price starts going up, Bitfinex's influence does too. This was the time large Tether printing was attributed to the rise of price by many individuals. But Bitfinex's influence wanes down as the price starts rising (remember that the chart is an exponential moving average. Its a lagging indicator). Afterward, exchanges like Binance and Bitstamp increase their role, and there isn't any single leader in the run. So although Bitfinex may have been responsible for the initial pump trades on other exchanges were responsible for the later rally.
CME contracts were added to our analysis in February 2018. Initially, they don't have much influence. On a similar work Alexandar and Heck (2019) noted that initially CBOE contracts had more influence. CBOE later delisted Bitcoin futures so I couldn't get that data. Overall, Bitmex and CME contracts have been averaging around 50% of the role in price discovery. To make the dominance clear, look at this chart where I add Bitmex Futures and Perp contract's dominance figure to create a single dominance index. There bitmex leads 936 of the total 1334 days (Bitfinex leads 298 days and coinbase and binance get 64 and 6 days). That is a lot. One possible reason for this might be Bitmex's low trading fee. Bitmex has a very generous -0.025% maker fee and price discovery tend to occur primarily in the market with smaller trading costs (Booth et al, 1999). It may also be because our market is mature. In mature markets, futures lead the price discovery.
Exchange bitmex_futures bitfinex coinbase bitmex okex binance cme bitstamp okcoin kraken poloniex
Days Lead 571 501 102 88 34 12 8 7 6 4 1
 Table 1: Days Lead 
Out of 1334 days in the analysis, Bitmex futures leads the discovery in 571 days or nearly 43% of the duration. Bitfinex leads for 501 days. Bitfinex's high number is due to its extreme dominance in the early days.
Exchange binance huobi cme okcoin bitmex_futures okex hitbtc kraken poloniex bitstamp bitfinex coinbase bitmex
Correlation 0.809190 0.715667 0.648058 0.644432 0.577147 0.444821 0.032649 -0.187348 -0.365175 -0.564073 -0.665008 -0.695115 -0.752103
 Table 2: Correlation between the close price and Exchange's dominance index 
Binance, Huobi, CME, and OkCoin had the most significant correlation with the close price. Bitmex, Coinbase, Bitfinex, and Bitstamp's dominance were negatively correlated. This was very interesting. To know more, I captured a yearwise correlation.
index 2016 2017 2018 2019 2020
0 bitfinex 0.028264 -0.519791 0.829700 -0.242631 0.626386
1 bitmex 0.090758 -0.752297 -0.654742 0.052242 -0.584956
2 bitmex_futures -0.011323 -0.149281 -0.458857 0.660135 0.095305
3 bitstamp 0.316291 -0.373688 0.600240 -0.255408 -0.407608
4 coinbase -0.505492 -0.128336 -0.351794 -0.410874 -0.262036
5 hitbtc 0.024425 0.486229 0.104912 -0.200203 0.308862
6 kraken 0.275797 0.422656 0.294762 -0.064594 -0.192290
7 poloniex 0.177616 -0.087090 0.230987 -0.135046 -0.154726
8 binance NaN 0.865295 0.706725 -0.484130 0.265086
9 okcoin NaN 0.797682 0.463455 -0.010186 -0.160217
10 huobi NaN 0.748489 0.351514 -0.298418 0.434164
11 cme NaN NaN -0.616407 0.694494 -0.012962
12 okex NaN NaN -0.618888 -0.399567 0.432474
Table 3: Yearwise Correlation between the close price and Exchange's dominance index
Price movement is pretty complicated. If one factor, like a dominant exchange, could explain it, everyone would be making money trading. With this disclaimer out of the way, let us try to make some conclusions. This year Bitfinex, Huobi, and OkEx, Tether based exchanges, discovery power have shown a high correlation with the close price. This means that when the traders there become successful, price rises. When the traders there are failing, Bitmex traders dominate and then the price is falling. I found this interesting as I have been seeing the OkEx whale who has been preceding price rises in this sub. I leave the interpretation of other past years to the reader.

Limitations

My analysis does not include market data for other derivative exchanges like Huobi, OkEx, Binance, and Deribit. So, all future market's influence may be going to Bitmex. I did not add their data because they started having an impact recently. A more fair assessment may be to conclude this as the new power of derivative markets instead of attributing it as the power of Bitmex. But Bitmex has dominated futures volume most of the time (until recently). And they brought the concept of perpetual swaps.

Conclusion

There is a lot in this data. If you are making a trading algo think there is some edge here. Someday I will backtest some trading logic based on this data. Then I will have more info and might write more. But, this analysis was enough for to shift my focus from a Bitfinex based trading algorithm to a Bitmex based one. It has been giving me good results.
If you have any good ideas that you want me to write about or discuss further please comment. If there is enough interest in this measurement, I can setup a live interface that provides the live value.
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Consensus Network EP36: Buy, Borrow and Die: Bitcoin Style

Catch the full episode: https://www.consensusnetwork.io/podcastepisodes/2019/10/5/ep36-buy-borrow-and-die-bitcoin-style-1
Buck: Welcome back to the show everyone. Today my guest on Wealth Formula Podcast is Zack Prince. He's Founder and CEO of BlockFi. BlockFi bridges the gap between blockchain and the basic financial products that you're used to including interest-bearing accounts and loans. Zack, welcome to Wealth Formula Podcast. I think you we might have had you on before as a Consensus Network replay but first time on Wealth Formula Podcast specifically, so welcome.
Zac: Yeah, excited to be here, Buck. Thanks for having me. And it's good to chat with you again
Buck: Yeah so remind me how you got into this you know Bitcoin stuff in the first place, I mean you were as I understand you were a traditional finance guy right so where did the blockchain part come in?
Zac: Sure so I was I was working at a company in the FinTech world that provided data and technology solutions to institutional investors that wanted to participate in some of the new online lending platforms, whether they were real estate platforms or consumer lending platforms, and I kind of became the FinTech guy amongst my friend group and people would ask me you know should I invest in these real estate deals on fund rise or buy loans from Lending Club and I started writing a blog to share the information more efficiently with my friends basically and I started expanding a little bit writing about Robo advisory and some other things that were going on in the FinTech space and that's what led me to Bitcoin, and this is back in early 2015. I didn't start BlockFi until 2017 because I started following the market in the background, still working in traditional financial services in FinTech and then in early 2017 it started to feel like mainstream adoption was starting to happen in the crypto ecosystem. I'm started going to some meetups in New York City because at a certain point my wife said Zac, you're talking about crypto all the time and you're talking to me about it and I don't want to talk about it so you should find some other people to talk about this with. And the meetup composition started to change and in 2016 when I started going to these meetups it was the early crypto adopters you know libertarians, computer scientists and then in early 2017 I started to see some venture capitalists, some guys who had just left their job at Wall Street still wearing a suit, some more entrepreneurs and it was a really exciting time in the ecosystem, things like the Enterprise Ethereum Alliance were getting announced which had participation microsoft and a lot of other you know fortune 500 companies and I had started to believe in it. I was drinking the kool-aid a little bit so I decided to find a way to get involved in the space full-time and that's what led me to start BlockFi.
Buck: So I have to imagine that the response you got from the traditional finance people around that time when you started talking about the blockchain space and when you started being more and more involved with that was probably not a very positive response initially or did you did you experience some of that sort of you know rejection initially to what you were doing?
Zac: Yeah absolutely. But you know throughout my career this is now kind of the third emerging technology industry that I've worked in. I was originally an advertising technology starting like you know 15 years ago and I was in FinTech specifically the online lending side of FinTech which in its early days was called peer-to-peer lending and now in crypto. So having to do a lot of education explain it you know why something isn't crazy and it might work and here's why and here's the value proposition and here's what it is, I've gotten very used to that and comfortable with it. But yeah there were a lot of people who are like you know I've heard Bitcoin is only used by drug dealers and money launderers. I've heard that I'm supposed to care about blockchain and not Bitcoin. And you know at BlockFi we’re providing financial products into the market so it's a heavily regulated business so we also had to communicate with regulators. We had to explain to state regulators, federal regulators why what we were doing with Bitcoin and other cryptos than when you're doing these same types of things with assets that they're more familiar with.
Buck: So when you were talking to people back in, I don't know I guess 2016/17 and it's not a long time ago, it's only two years ago, but I have to imagine that the response or the you know the approach that people take to you when you speak to investors is very different. Has it become more mainstream in that regard for you know for big money investors?
Zac: It's absolutely become more mainstream you know the end of 2017 Q3/Q4. Point was going on that parabolic run it started to get covered everywhere, I mean it was on CNBC every day it was in Bloomberg New York Times Wall Street Journal. If you were paying attention to the financial industry and markets you heard about Bitcoin at that time if you hadn't heard about it before. So from a baseline of awareness perspective it got a lot better and then in 2018 you had a number of positive developments for the sector including one that I think is probably the most noteworthy which is that Bitcoin futures were listed on the CME the institutional investor perspective that's massive. You now have a well regulated well known super trustworthy venue where you can get exposure to this asset class, you also had companies like Grayscale bringing products to the market which are accessible to certain types of investors and their low bridge accounts and you started to see some adoption from companies like FinTech companies like Robin Hood and Square making Bitcoin available on their platforms. So the conversation has absolutely changed a lot and it's become less about whether or not this is something that's going to continue to exist whether or not it's something that was just a bubble and is going to die and now it's more about ok how is it going to get used how big could it get what are the interesting applications of it and what could have potentially disrupt in the traditional financial ecosystem.
Buck: So you know we had obviously following this you know pop in 2017, you know I actually like you kind of really got into this early 2017 so timing was pretty good I guess now regards. Good or bad depending how you look at it but I was there before before the parabolic move. And then we have you know then we followed this up with a crypto winter and and you know who knows if we're done with it, I guess we certainly are much better off than we were. You know a unit buddy it's funny Zac I don’t know if you remember this but I was about to, we'll talk about BlockFi specifically in a minute but, I was about to use BlockFi for borrowing because I like this idea of borrowing you know collateralized debt and collateralized debt on assets and buying something else. So I was about to do it and then Bitcoin lost a clip and I was like literally and I remember I was just emailing with somebody somebody over there and I was like sorry dude I guess I just sold it, I just sold all that Bitcoin I had and you sent one email back to me and it said “capitulation” but it you know and so now we're looking back at these we go down from 3,000 back up you know been sort of flirting around this 10,000 and it seems like we're kind of maybe that we're stuck there, maybe we're kind of out of winter, maybe we're in a holding pattern but it seems like to me that since that two years not only is the awareness increase but the development of the ecosystem itself is so much further advanced than it was in 2017. Is this an unusual case where the technology and maybe even the infrastructure is actually outpacing the price?
Zac: You know it's really hard to say. I would argue that in some ways it's typical. In other industries that showed a lot of promise where investors could you know participate maybe a little bit ahead of the adoption curve you saw crazy price run ups with the tech bubble and you know ‘99-2000 being the one that's kind of top of mind in recent memory and then on the other side of things, are we behind where the price should be now? It's really hard to say because this is kind of like a commodity type asset built on a payment network and valuing that is challenging and there's not a perfect model for for doing it today. It's not as easy as something that's cashflow producing but I'm incredibly bullish. I'm on record as saying at the beginning of this year that Bitcoin has only had one year in its 10-year existence where it had a lower low than the year before and parted this year around the low price for 2018 and I predicted that we would in the year had a higher price than where we started the year pretty soon and now we're up and you know around 300 percent from where we started the year. As that happens in investing is people frequently look at things on a year-to-year performance basis and when people are looking at Bitcoin even if all we do is stay around 10 K from here when they're looking at how Bitcoin performed rather than other relative to other assets at the end of 2019 it's probably going to look fantastic. And you also have an event coming up and in the summer of next year called The Halvening where basically the supply that's produced by miners is going to get cut in half and so if you believe in the stock the flow type models of valuation for Bitcoin that is usually a very big driver of price appreciation.
Buck: I believe May of 2020, right?
Zac: That's right.
Buck: In May of 2020. Can you just talked a little bit about that just so people know because people hear about it, I've been talking about it but I don't think that it really explained it.
Zac: Yeah and you know I'm not I'm not a computer scientist so I can explain it in a you know in a very simple…
Buck: No one else here is either.
Zac: So basically the way that new Bitcoin is created is through this process called mining. And it's analogous to mining gold except instead of finding a place in the earth where gold exists and then getting your trucks and mining equipment and digging it out of the ground, the way bitcoin is mined is using this computer program and there is now specialized computer hardware that's built specifically and optimized for mining Bitcoin. And you have this network of machines around the world where the input is energy into the mining hardware and the output is new Bitcoin and those miners are what provides the power for the payment network a Bitcoin to run and when we say that there is this event called The Halvening, what that basically means is that the output that's built into the Bitcoin program that the miners are receiving as their payment for contributing energy to the network, is going to get cut in half. So the miners are going to have the same you know relative input but the amount that they're receiving is going to get cut in half for that input. This should, if the demand side for Bitcoin remains equal, it should drive up the price and historically Bitcoin has had three of these Halvening events in its lifetime so far I believe and around each Halvening you have seen you know six months before or six months after a pretty material run up in price.
Buck: Yeah so it also goes along with that sort of that the entire idea that Bitcoin unlike you know other assets including gold is it's a deflationary asset ultimately and and that's one of the things that makes that happening really significant. Apart from and I have one more question before we get to block five which is apart from the Halvening, you know thing that's happening, what is maybe the biggest development or upcoming thing that's coming up that makes you the most bullish on the future of Bitcoin or blockchain in general?
Zac: Sure so I think I wouldn't actually point to any one specific thing, I would point to two broad trends. So one is institutional adoption and participation in the asset class and the other is better ramps for retail participation into the asset class and just focusing here you know on the US market because it really is an international story but just in the US market. In September we should have Bakkt launching their futures platform. Bakkt is owned by ICE, the Intercontinental Exchange, and there's a big core difference between their futures and the current futures that are available on the CME in that futures on Bakkt platform are going to be physically settled so that means that actual Bitcoin is going to be needed to facilitate the trading on Bakkt’s platform which does not happen on CMEs exchange so that's that should be a very positive catalyst in terms of demand for physical Bitcoin that could have an impact on the price. Also on the institutional side this year I believe earlier this year, the first pension fund made an investment into an asset management vehicle that was focused on investing in Bitcoin and private equity opportunities in the Bitcoin and blockchain sector. So that will be a trend.
Buck: Which pension fund was it?
Zac: It was in North Carolina so I think it was like the North Carolina Firefighters and the group that raised the money from them was Morgan Creek Digital it’s actually invested in BlockFi by Anthony Pompliano Twitter and Mark Yusko so that's on the institutional side. And then on the retail side you've seen FinTech companies like Square and Robin Hood offer Bitcoin trading to their users. But soon you will also have companies like TD Ameritrade E-Trade and others offer Bitcoin to their users sometimes be a partnership sometimes because they've built it directly. You also at some point might see progress made in terms of an ETF getting approved that would give retail investors in the US market exposure to Bitcoin in a really easy and familiar way. All of those things are tremendously positive catalysts and the caliber of people working on them only continues to increase. Talent was attracted into the sector very, very rapidly these days.
Buck: You know one question that leads me to is that all of this is happening with Bitcoin for the most part. Are alt coins in your opinion is that market coming back or is that something that we're gonna see probably select you know group of tokens projects emerge and then the rest will kind of just get left in the dust, what do you think?
Zac: I mean I'll tell you exactly what I'm doing with my portfolio and then I'll provide a bit more color. So my asset allocation in the crypto side of my investing is I'm like 90% Bitcoin 5% Ethereum and 5% B&B; which is the Binance right. So I'm super bullish on Bitcoin. I think that you know there's a chance that Ether makes a comeback specifically I think that a lot of the stable coins that have been launched have been built on Ethereum if you're not familiar with stable coins it's basically the concept of a dollar but on a blockchain which could be really really powerful because it creates the opportunity for the delivery of US dollar denominated financial services at a global scale not using the traditional banking rails. And then B&B; I mean Binance is the biggest and most successful exchange they have a history of innovating, creating new products, going fast and so I'm taking a bit of a flyer with them but I'm 90% Bitcoin. I don't think that I'm not bullish on any of the other all coins frankly I struggle to see you know the big upside I have heard whispers in the community that there's kind of like a new wave of altcoins 3.0 might emerge, you know could see some some good returns similar to what some of the ICOs did in 2017 but it's not an area of focus for me. So that's my view.
Buck: Yeah let's talk about BlockFi. Remind us exactly what BlockFi is.
Zac: Sure so we're a wealth management platform for crypto investors. Today we have two products that we offer. One product is analogous to a savings account from a traditional bank where you're able to earn interest on your holdings except on BlockFi, the assets instead of being dollars are bitcoin and Ether and we don't have FDIC insurance so it's not exactly the same risk profile as a savings account at a bank, but conceptually you're able to hold Bitcoin and an account with BlockFi and earn interest on it paid in Bitcoin every month. That's one product that we have. The second product that we have which you are alluding to earlier offers our clients the ability to borrow dollars secured by the value of their cryptocurrency and it's analogous to a securities backed loan or a liquidity access line in the traditional world except instead of securities we're taking Bitcoin or other digital assets as collateral and lending it rates as low as four point five lending USD that rates as low as four point five percent a year.
Buck: I wanna pick these apart a little bit if you don't mind. In terms of this savings account first of all is it just bitcoin or is it bitcoin, Ethereum?
Zac: We actually support three assets in the interest account currently Bitcoin, Ether and GUSD which is the stable coin from Gemini.
Buck: Got it. And talk about the interest because it's not one flat interest rate right it's different depending on how much cryptocurrency actually is held?
Zac: Correct so there's a tiered interest rate structure. Currently on Bitcoin for balances up to ten Bitcoin, we offer a six point two percent annual yield and for balances above ten Bitcoin it's a 2.2 percent annual yield. On Ether, for balances up to two hundred Ether it's a 3.3 percent annual yield and balances above two hundred Ether is 0.5% annual yield and for GUSD the stable coin it's an eight point six percent interest rate with no tier so yeah those are the different rates.
Buck: Why did, I mean was it just a matter of like an issue with people dumping like a thousand Bitcoin and trying to get six you know 6% of that, was it just too hard to you know make that a long-term part of the business model or why did the higher levels end up changing to a lower rate?
Zac: Sure so I wanted to function of market conditions and to it's a function of supply and demand. So we launched the interest account in March of this year. We were just starting to come out of the bear market and one of the things that happened as we switched from being in a bear market to being in a bull market is the futures switched from being in backwardation to contango which basically means that our institutional borrowers the groups that we lend to that enable us to pay the rate to depositors had less of a need they had less demand to borrow and they were willing to pay lower rates to borrow crypto than they were when we were building and planning to launch this product. The second thing that happened is we were surprised to the upside in terms of the level of interest that we received from depositors and especially depositors with very large sums of cryptocurrency. So to give you an example you know within a day or two of making the product available publicly, we had a number of groups that were depositing 5, 10, 15, 20 million dollars worth of Bitcoin and so the supply-demand that we have to manage is, the amount that we have on deposit relative to the size of this market that will borrow Bitcoin size of the market that will borrow Bitcoin is partially a function of market sentiments partially a function of number of trading venues and the liquidity profile and it's partially a function of you know BlockFi’s efforts in terms of sales and client development relationship management. So the supply side got a little bit ahead of the demand side on deposit and how much there was available to borrow so we made a few tweaks. We want to keep the 6%, 6.2% rate on Bitcoin available to as many people as possible for as long as possible so that's why we went with the tiered structure where we made it available on balances up to 10 and reduced it for balances above that.
Buck: Got it and the interest on that, when you say 6.2 percent that six point like it's all denominated in Bitcoin, you're not paying cash out right?
Zac: Correct so to use round numbers to provide an easy example you start on January first with a hundred Bitcoin in an account, by the subsequent January first you will have 106 point 2 Bitcoin in your account.
Buck: Yeah and that that's kind of neat too because then you're you know you're also getting potentially the upside of that you know I mean they made 6% but if you if you're really bullish on the market you could be potentially looking at a lot more than 6% on your money. How about in terms of the, is there like a you know do you do it sort of a month-to-month or six month or month you know year-long contracts for these things?
Zac: It's month-to-month. So the rates are subject to change on a monthly basis. We provide notifications at least a week in advance before the end of one month on what the rates will be for the subsequent month and people are able to you know withdraw any time without penalty. We reserve up to 7 days to process withdrawals but we've never taken more than one business day to process a withdrawal so they're pretty quick but not instant for security reasons and yeah it's pretty flexible.
Buck: How about the lump in the lending side how does how does that work? So now I've got like 10 Bitcoin and so I would deposit that I guess and you guys I understand that maybe that that goes into like a Gemini account or something, is that still how it works?
Zac: Correct so we have a partnership with Gemini for custody. So when you log into a BlockFi account you'll have a deposit address. When you send Bitcoin to that deposit address it actually goes directly into storage with Gemini. Gemini was the first custodian in the crypto sector to receive insurance against cyber hacks on their platform. They were also the first custodian to get to complete a SOC 2 compliance audit and they have a really long track record of custody billions of dollars worth of crypto without ever having any issues. So it goes directly to Gemini and then you're able to interact with block-wise platform to take any actions that you might deem necessary. So you can view your interest payments you can withdraw you can deposit more you can also take out a loan. So in terms of taking out a loan, if you have ten Bitcoin that's worth roughly a hundred thousand US dollars at this point in time, you can borrow up to fifty percent of that value in a US dollar loan which can be funded be a wire or stable coin and then the structure of those loans is that you make interest-only payments on the amount that you borrowed throughout the duration and you can prepay at any time without penalty.
Buck: And what's the typical you said it was four point six.
Zac: We have interest rates as low as four point five. The interest rates on borrowing USD vary according to your initial loan to value ratio. So if you have a hundred thousand dollars worth of Bitcoin we actually have three loan-to-value ratio options. You can borrow at a 50 percent initial loan-to-value ratio which would mean you're borrowing 50k, the interest rate on that will be eleven point two five, if you borrow thirty five percent of the value so 35k the interest rate is seven point nine, and if you borrow twenty five percent of the value of the interest rate is four point five percent per year.
Buck: Got it. In terms of you know the technical, so you basically pay that on a month-to-month basis and then in terms of contracts, are those also month-to-month loans or how does that work?
Zac: Those are one-year term loans well now it's the ability to renew without repaying the principal at the end of the term at current rates and our rates for those loans have always come down so far. So it's a one-year term loan BlockFi committed for a year at that rate your payments stay the same but you can prepay at any time without penalty.
Buck: Right. When do you do when would you do an actual sort of I guess a cap will call like what loan-to-value because you can go up to say you're borrowing at you know you're borrowing at the lowest rate you know you're at 4.5% you're borrowing see you know just for round numbers 100 Bitcoin you borrowed or you said 10 Bitcoin hundred thousand dollars but you only borrowed twenty-five thousand dollars at four point five percent, what if Bitcoin you know loses 50 percent of its value then what happens?
Zac: Well you wouldn't have a margin call based on on that example. If your loan to value ratio hits 70 percent that's when we have a margin call and the way the margin call works is our clients have the option to either post more collateral, pay down the loan using USD or some of the collateral that's posted for the loan or take no action. If they take no action there's a 72-hour window where we'll wait to see if the price recovers, if it does then no action is required, if the price keeps going down further then we will initiate a partial collateral sale to rebalance that LTV to a healthy level at the end of that window.
Buck: So in terms of the clients that you see doing this kind of stuff, I mean who are you seeing borrowing because you don't have a cap I mean you can on the borrow side, I mean and the rates don't really change like if you're depositing a hundred Bitcoin you're getting the same rate differences as somebody who's depositing ten for borrowing right?
Zac: That's right.
Buck: So who are the people who are putting I mean what are these businesses that are putting are using these loans who are the typical clients?
Zac: Sure so it's a mix of retail and corporate. On the retail side we actually did a survey recently on use cases and the number one use case about a third of our borrowers expressed is that they were using the funds that they borrowed to start a business, which we were really excited about. So the other popular use cases were investing in real estate, investing in other types of traditional assets like stocks and bonds, home improvement, larger purchases, vacations were all used cases, paying down higher cost debt was another use case, and then on the corporate side the loans are used for operating capital. So we have some mining companies that borrow from BlockFi. Other types of companies who you know maybe have crypto denominated inventory like exchanges or crypto ATM businesses our frequent borrowers from BlockFi and our loan sizes rearranged from you know as low as five thousand dollars all the way up to seven figures. So it's a pretty diverse group of borrowers.
Buck: So recently it sounds like you guys partnered with another company called Casa. What is Casa and I guess how does that benefit both companies?
Zac: Sure. So Casa is a leader in fighting self sovereign storage solutions for cryptocurrency owners so if you're alone that owns Bitcoin and to use a gold analogy. If you want to own gold but you keep it in your vault or in your backyard you want to have physical possession of it yourself if you want to do that same type of custody with Bitcoin. Casa has a solution that makes that really easy. Our partnership with Casa provides mutual benefits to clients on either side. So Casa clients are able to receive some discounts in terms of accessing BlockFi products and vice-versa BlockFi clients are able to receive discounts in terms of accessing kasam products and over time we'll build some things in to the user experience specifically on Casa’s platform that will make it you know a bit more seamless to interact with BlockFi products while you're on their platform. In general that partnership strategy is something that you'll see more of we think there are in the ecosystem that are specializing in areas that BlockFi's not focused on and doing things where we can provide benefits to clients on both sides is a win-win for us then and our clients.
Buck: Last thing I want to ask you about, last time I spoke to you, you had talked about the idea of potentially Bitcoin backed credit cards meaning like you know getting Bitcoin back instead of miles or dollars back. You guys any closer to that, because I definitely want one of those cards.
Zac: I'm so glad you brought it up. We're definitely closer, but we're not you're not going to have the card until like Q3 of next year probably. It's getting worked on, these things you know for better or worse they take a long time launching a credit program is no small feat you know we're working on it. We've identified some of the key partners that we'll be working with to bring that product to market it is going to happen and I share your sentiment like I wish I had it now.
Buck: Yeah seriously that'd be great. Well listen it was great talking you. So it's BlockFi.com and it's spelled like block and then fi and tell us you know tell us the process of doing is pretty simple okay how long does it take to apply for these things…
Zac: Yeah I mean nothing takes any time really. So you could come in and start earning interest and get a loan from us all in under five minutes. And we also have a client service team that's super responsive in in terms of communication however you want to communicate with them, over email, over the phone, over text message so you know don't don't hesitate to reach out to us. We're also on twitter. My twitter handle is BlockFiZac and our company twitter handle is @therealBlockFi so we're very active on those platforms and happy to chat with you there as well.
Buck: Zac Prince, thank you very much for being on Wealth Formula Podcast today.
Zac: Thanks for having me, Buck, I appreciate it.
Buck: We’ll be right back.
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Wealth Formula Episode 179: Buy, Borrow and Die: Bitcoin Style

Catch the full episode: https://www.wealthformula.com/podcast/179-buy-borrow-and-die-bitcoin-style/
Buck: Welcome back to the show everyone. Today my guest on Wealth Formula Podcast is Zack Prince. He's Founder and CEO of BlockFi. BlockFi bridges the gap between blockchain and the basic financial products that you're used to including interest-bearing accounts and loans. Zack, welcome to Wealth Formula Podcast. I think you we might have had you on before as a Consensus Network replay but first time on Wealth Formula Podcast specifically, so welcome.
Zac: Yeah, excited to be here, Buck. Thanks for having me. And it's good to chat with you again
Buck: Yeah so remind me how you got into this you know Bitcoin stuff in the first place, I mean you were as I understand you were a traditional finance guy right so where did the blockchain part come in?
Zac: Sure so I was I was working at a company in the FinTech world that provided data and technology solutions to institutional investors that wanted to participate in some of the new online lending platforms, whether they were real estate platforms or consumer lending platforms, and I kind of became the FinTech guy amongst my friend group and people would ask me you know should I invest in these real estate deals on fund rise or buy loans from Lending Club and I started writing a blog to share the information more efficiently with my friends basically and I started expanding a little bit writing about Robo advisory and some other things that were going on in the FinTech space and that's what led me to Bitcoin, and this is back in early 2015. I didn't start BlockFi until 2017 because I started following the market in the background, still working in traditional financial services in FinTech and then in early 2017 it started to feel like mainstream adoption was starting to happen in the crypto ecosystem. I'm started going to some meetups in New York City because at a certain point my wife said Zac, you're talking about crypto all the time and you're talking to me about it and I don't want to talk about it so you should find some other people to talk about this with. And the meetup composition started to change and in 2016 when I started going to these meetups it was the early crypto adopters you know libertarians, computer scientists and then in early 2017 I started to see some venture capitalists, some guys who had just left their job at Wall Street still wearing a suit, some more entrepreneurs and it was a really exciting time in the ecosystem, things like the Enterprise Ethereum Alliance were getting announced which had participation microsoft and a lot of other you know fortune 500 companies and I had started to believe in it. I was drinking the kool-aid a little bit so I decided to find a way to get involved in the space full-time and that's what led me to start BlockFi.
Buck: So I have to imagine that the response you got from the traditional finance people around that time when you started talking about the blockchain space and when you started being more and more involved with that was probably not a very positive response initially or did you did you experience some of that sort of you know rejection initially to what you were doing?
Zac: Yeah absolutely. But you know throughout my career this is now kind of the third emerging technology industry that I've worked in. I was originally an advertising technology starting like you know 15 years ago and I was in FinTech specifically the online lending side of FinTech which in its early days was called peer-to-peer lending and now in crypto. So having to do a lot of education explain it you know why something isn't crazy and it might work and here's why and here's the value proposition and here's what it is, I've gotten very used to that and comfortable with it. But yeah there were a lot of people who are like you know I've heard Bitcoin is only used by drug dealers and money launderers. I've heard that I'm supposed to care about blockchain and not Bitcoin. And you know at BlockFi we’re providing financial products into the market so it's a heavily regulated business so we also had to communicate with regulators. We had to explain to state regulators, federal regulators why what we were doing with Bitcoin and other cryptos than when you're doing these same types of things with assets that they're more familiar with.
Buck: So when you were talking to people back in, I don't know I guess 2016/17 and it's not a long time ago, it's only two years ago, but I have to imagine that the response or the you know the approach that people take to you when you speak to investors is very different. Has it become more mainstream in that regard for you know for big money investors?
Zac: It's absolutely become more mainstream you know the end of 2017 Q3/Q4. Point was going on that parabolic run it started to get covered everywhere, I mean it was on CNBC every day it was in Bloomberg New York Times Wall Street Journal. If you were paying attention to the financial industry and markets you heard about Bitcoin at that time if you hadn't heard about it before. So from a baseline of awareness perspective it got a lot better and then in 2018 you had a number of positive developments for the sector including one that I think is probably the most noteworthy which is that Bitcoin futures were listed on the CME the institutional investor perspective that's massive. You now have a well regulated well known super trustworthy venue where you can get exposure to this asset class, you also had companies like Grayscale bringing products to the market which are accessible to certain types of investors and their low bridge accounts and you started to see some adoption from companies like FinTech companies like Robin Hood and Square making Bitcoin available on their platforms. So the conversation has absolutely changed a lot and it's become less about whether or not this is something that's going to continue to exist whether or not it's something that was just a bubble and is going to die and now it's more about ok how is it going to get used how big could it get what are the interesting applications of it and what could have potentially disrupt in the traditional financial ecosystem.
Buck: So you know we had obviously following this you know pop in 2017, you know I actually like you kind of really got into this early 2017 so timing was pretty good I guess now regards. Good or bad depending how you look at it but I was there before before the parabolic move. And then we have you know then we followed this up with a crypto winter and and you know who knows if we're done with it, I guess we certainly are much better off than we were. You know a unit buddy it's funny Zac I don’t know if you remember this but I was about to, we'll talk about BlockFi specifically in a minute but, I was about to use BlockFi for borrowing because I like this idea of borrowing you know collateralized debt and collateralized debt on assets and buying something else. So I was about to do it and then Bitcoin lost a clip and I was like literally and I remember I was just emailing with somebody somebody over there and I was like sorry dude I guess I just sold it, I just sold all that Bitcoin I had and you sent one email back to me and it said “capitulation” but it you know and so now we're looking back at these we go down from 3,000 back up you know been sort of flirting around this 10,000 and it seems like we're kind of maybe that we're stuck there, maybe we're kind of out of winter, maybe we're in a holding pattern but it seems like to me that since that two years not only is the awareness increase but the development of the ecosystem itself is so much further advanced than it was in 2017. Is this an unusual case where the technology and maybe even the infrastructure is actually outpacing the price?
Zac: You know it's really hard to say. I would argue that in some ways it's typical. In other industries that showed a lot of promise where investors could you know participate maybe a little bit ahead of the adoption curve you saw crazy price run ups with the tech bubble and you know ‘99-2000 being the one that's kind of top of mind in recent memory and then on the other side of things, are we behind where the price should be now? It's really hard to say because this is kind of like a commodity type asset built on a payment network and valuing that is challenging and there's not a perfect model for for doing it today. It's not as easy as something that's cashflow producing but I'm incredibly bullish. I'm on record as saying at the beginning of this year that Bitcoin has only had one year in its 10-year existence where it had a lower low than the year before and parted this year around the low price for 2018 and I predicted that we would in the year had a higher price than where we started the year pretty soon and now we're up and you know around 300 percent from where we started the year. As that happens in investing is people frequently look at things on a year-to-year performance basis and when people are looking at Bitcoin even if all we do is stay around 10 K from here when they're looking at how Bitcoin performed rather than other relative to other assets at the end of 2019 it's probably going to look fantastic. And you also have an event coming up and in the summer of next year called The Halvening where basically the supply that's produced by miners is going to get cut in half and so if you believe in the stock the flow type models of valuation for Bitcoin that is usually a very big driver of price appreciation.
Buck: I believe May of 2020, right?
Zac: That's right.
Buck: In May of 2020. Can you just talked a little bit about that just so people know because people hear about it, I've been talking about it but I don't think that it really explained it.
Zac: Yeah and you know I'm not I'm not a computer scientist so I can explain it in a you know in a very simple…
Buck: No one else here is either.
Zac: So basically the way that new Bitcoin is created is through this process called mining. And it's analogous to mining gold except instead of finding a place in the earth where gold exists and then getting your trucks and mining equipment and digging it out of the ground, the way bitcoin is mined is using this computer program and there is now specialized computer hardware that's built specifically and optimized for mining Bitcoin. And you have this network of machines around the world where the input is energy into the mining hardware and the output is new Bitcoin and those miners are what provides the power for the payment network a Bitcoin to run and when we say that there is this event called The Halvening, what that basically means is that the output that's built into the Bitcoin program that the miners are receiving as their payment for contributing energy to the network, is going to get cut in half. So the miners are going to have the same you know relative input but the amount that they're receiving is going to get cut in half for that input. This should, if the demand side for Bitcoin remains equal, it should drive up the price and historically Bitcoin has had three of these Halvening events in its lifetime so far I believe and around each Halvening you have seen you know six months before or six months after a pretty material run up in price.
Buck: Yeah so it also goes along with that sort of that the entire idea that Bitcoin unlike you know other assets including gold is it's a deflationary asset ultimately and and that's one of the things that makes that happening really significant. Apart from and I have one more question before we get to block five which is apart from the Halvening, you know thing that's happening, what is maybe the biggest development or upcoming thing that's coming up that makes you the most bullish on the future of Bitcoin or blockchain in general?
Zac: Sure so I think I wouldn't actually point to any one specific thing, I would point to two broad trends. So one is institutional adoption and participation in the asset class and the other is better ramps for retail participation into the asset class and just focusing here you know on the US market because it really is an international story but just in the US market. In September we should have Bakkt launching their futures platform. Bakkt is owned by ICE, the Intercontinental Exchange, and there's a big core difference between their futures and the current futures that are available on the CME in that futures on Bakkt platform are going to be physically settled so that means that actual Bitcoin is going to be needed to facilitate the trading on Bakkt’s platform which does not happen on CMEs exchange so that's that should be a very positive catalyst in terms of demand for physical Bitcoin that could have an impact on the price. Also on the institutional side this year I believe earlier this year, the first pension fund made an investment into an asset management vehicle that was focused on investing in Bitcoin and private equity opportunities in the Bitcoin and blockchain sector. So that will be a trend.
Buck: Which pension fund was it?
Zac: It was in North Carolina so I think it was like the North Carolina Firefighters and the group that raised the money from them was Morgan Creek Digital it’s actually invested in BlockFi by Anthony Pompliano Twitter and Mark Yusko so that's on the institutional side. And then on the retail side you've seen FinTech companies like Square and Robin Hood offer Bitcoin trading to their users. But soon you will also have companies like TD Ameritrade E-Trade and others offer Bitcoin to their users sometimes be a partnership sometimes because they've built it directly. You also at some point might see progress made in terms of an ETF getting approved that would give retail investors in the US market exposure to Bitcoin in a really easy and familiar way. All of those things are tremendously positive catalysts and the caliber of people working on them only continues to increase. Talent was attracted into the sector very, very rapidly these days.
Buck: You know one question that leads me to is that all of this is happening with Bitcoin for the most part. Are alt coins in your opinion is that market coming back or is that something that we're gonna see probably select you know group of tokens projects emerge and then the rest will kind of just get left in the dust, what do you think?
Zac: I mean I'll tell you exactly what I'm doing with my portfolio and then I'll provide a bit more color. So my asset allocation in the crypto side of my investing is I'm like 90% Bitcoin 5% Ethereum and 5% B&B; which is the Binance right. So I'm super bullish on Bitcoin. I think that you know there's a chance that Ether makes a comeback specifically I think that a lot of the stable coins that have been launched have been built on Ethereum if you're not familiar with stable coins it's basically the concept of a dollar but on a blockchain which could be really really powerful because it creates the opportunity for the delivery of US dollar denominated financial services at a global scale not using the traditional banking rails. And then B&B; I mean Binance is the biggest and most successful exchange they have a history of innovating, creating new products, going fast and so I'm taking a bit of a flyer with them but I'm 90% Bitcoin. I don't think that I'm not bullish on any of the other all coins frankly I struggle to see you know the big upside I have heard whispers in the community that there's kind of like a new wave of altcoins 3.0 might emerge, you know could see some some good returns similar to what some of the ICOs did in 2017 but it's not an area of focus for me. So that's my view.
Buck: Yeah let's talk about BlockFi. Remind us exactly what BlockFi is.
Zac: Sure so we're a wealth management platform for crypto investors. Today we have two products that we offer. One product is analogous to a savings account from a traditional bank where you're able to earn interest on your holdings except on BlockFi, the assets instead of being dollars are bitcoin and Ether and we don't have FDIC insurance so it's not exactly the same risk profile as a savings account at a bank, but conceptually you're able to hold Bitcoin and an account with BlockFi and earn interest on it paid in Bitcoin every month. That's one product that we have. The second product that we have which you are alluding to earlier offers our clients the ability to borrow dollars secured by the value of their cryptocurrency and it's analogous to a securities backed loan or a liquidity access line in the traditional world except instead of securities we're taking Bitcoin or other digital assets as collateral and lending it rates as low as four point five lending USD that rates as low as four point five percent a year.
Buck: I wanna pick these apart a little bit if you don't mind. In terms of this savings account first of all is it just bitcoin or is it bitcoin, Ethereum?
Zac: We actually support three assets in the interest account currently Bitcoin, Ether and GUSD which is the stable coin from Gemini.
Buck: Got it. And talk about the interest because it's not one flat interest rate right it's different depending on how much cryptocurrency actually is held?
Zac: Correct so there's a tiered interest rate structure. Currently on Bitcoin for balances up to ten Bitcoin, we offer a six point two percent annual yield and for balances above ten Bitcoin it's a 2.2 percent annual yield. On Ether, for balances up to two hundred Ether it's a 3.3 percent annual yield and balances above two hundred Ether is 0.5% annual yield and for GUSD the stable coin it's an eight point six percent interest rate with no tier so yeah those are the different rates.
Buck: Why did, I mean was it just a matter of like an issue with people dumping like a thousand Bitcoin and trying to get six you know 6% of that, was it just too hard to you know make that a long-term part of the business model or why did the higher levels end up changing to a lower rate?
Zac: Sure so I wanted to function of market conditions and to it's a function of supply and demand. So we launched the interest account in March of this year. We were just starting to come out of the bear market and one of the things that happened as we switched from being in a bear market to being in a bull market is the futures switched from being in backwardation to contango which basically means that our institutional borrowers the groups that we lend to that enable us to pay the rate to depositors had less of a need they had less demand to borrow and they were willing to pay lower rates to borrow crypto than they were when we were building and planning to launch this product. The second thing that happened is we were surprised to the upside in terms of the level of interest that we received from depositors and especially depositors with very large sums of cryptocurrency. So to give you an example you know within a day or two of making the product available publicly, we had a number of groups that were depositing 5, 10, 15, 20 million dollars worth of Bitcoin and so the supply-demand that we have to manage is, the amount that we have on deposit relative to the size of this market that will borrow Bitcoin size of the market that will borrow Bitcoin is partially a function of market sentiments partially a function of number of trading venues and the liquidity profile and it's partially a function of you know BlockFi’s efforts in terms of sales and client development relationship management. So the supply side got a little bit ahead of the demand side on deposit and how much there was available to borrow so we made a few tweaks. We want to keep the 6%, 6.2% rate on Bitcoin available to as many people as possible for as long as possible so that's why we went with the tiered structure where we made it available on balances up to 10 and reduced it for balances above that.
Buck: Got it and the interest on that, when you say 6.2 percent that six point like it's all denominated in Bitcoin, you're not paying cash out right?
Zac: Correct so to use round numbers to provide an easy example you start on January first with a hundred Bitcoin in an account, by the subsequent January first you will have 106 point 2 Bitcoin in your account.
Buck: Yeah and that that's kind of neat too because then you're you know you're also getting potentially the upside of that you know I mean they made 6% but if you if you're really bullish on the market you could be potentially looking at a lot more than 6% on your money. How about in terms of the, is there like a you know do you do it sort of a month-to-month or six month or month you know year-long contracts for these things?
Zac: It's month-to-month. So the rates are subject to change on a monthly basis. We provide notifications at least a week in advance before the end of one month on what the rates will be for the subsequent month and people are able to you know withdraw any time without penalty. We reserve up to 7 days to process withdrawals but we've never taken more than one business day to process a withdrawal so they're pretty quick but not instant for security reasons and yeah it's pretty flexible.
Buck: How about the lump in the lending side how does how does that work? So now I've got like 10 Bitcoin and so I would deposit that I guess and you guys I understand that maybe that that goes into like a Gemini account or something, is that still how it works?
Zac: Correct so we have a partnership with Gemini for custody. So when you log into a BlockFi account you'll have a deposit address. When you send Bitcoin to that deposit address it actually goes directly into storage with Gemini. Gemini was the first custodian in the crypto sector to receive insurance against cyber hacks on their platform. They were also the first custodian to get to complete a SOC 2 compliance audit and they have a really long track record of custody billions of dollars worth of crypto without ever having any issues. So it goes directly to Gemini and then you're able to interact with block-wise platform to take any actions that you might deem necessary. So you can view your interest payments you can withdraw you can deposit more you can also take out a loan. So in terms of taking out a loan, if you have ten Bitcoin that's worth roughly a hundred thousand US dollars at this point in time, you can borrow up to fifty percent of that value in a US dollar loan which can be funded be a wire or stable coin and then the structure of those loans is that you make interest-only payments on the amount that you borrowed throughout the duration and you can prepay at any time without penalty.
Buck: And what's the typical you said it was four point six.
Zac: We have interest rates as low as four point five. The interest rates on borrowing USD vary according to your initial loan to value ratio. So if you have a hundred thousand dollars worth of Bitcoin we actually have three loan-to-value ratio options. You can borrow at a 50 percent initial loan-to-value ratio which would mean you're borrowing 50k, the interest rate on that will be eleven point two five, if you borrow thirty five percent of the value so 35k the interest rate is seven point nine, and if you borrow twenty five percent of the value of the interest rate is four point five percent per year.
Buck: Got it. In terms of you know the technical, so you basically pay that on a month-to-month basis and then in terms of contracts, are those also month-to-month loans or how does that work?
Zac: Those are one-year term loans well now it's the ability to renew without repaying the principal at the end of the term at current rates and our rates for those loans have always come down so far. So it's a one-year term loan BlockFi committed for a year at that rate your payments stay the same but you can prepay at any time without penalty.
Buck: Right. When do you do when would you do an actual sort of I guess a cap will call like what loan-to-value because you can go up to say you're borrowing at you know you're borrowing at the lowest rate you know you're at 4.5% you're borrowing see you know just for round numbers 100 Bitcoin you borrowed or you said 10 Bitcoin hundred thousand dollars but you only borrowed twenty-five thousand dollars at four point five percent, what if Bitcoin you know loses 50 percent of its value then what happens?
Zac: Well you wouldn't have a margin call based on on that example. If your loan to value ratio hits 70 percent that's when we have a margin call and the way the margin call works is our clients have the option to either post more collateral, pay down the loan using USD or some of the collateral that's posted for the loan or take no action. If they take no action there's a 72-hour window where we'll wait to see if the price recovers, if it does then no action is required, if the price keeps going down further then we will initiate a partial collateral sale to rebalance that LTV to a healthy level at the end of that window.
Buck: So in terms of the clients that you see doing this kind of stuff, I mean who are you seeing borrowing because you don't have a cap I mean you can on the borrow side, I mean and the rates don't really change like if you're depositing a hundred Bitcoin you're getting the same rate differences as somebody who's depositing ten for borrowing right?
Zac: That's right.
Buck: So who are the people who are putting I mean what are these businesses that are putting are using these loans who are the typical clients?
Zac: Sure so it's a mix of retail and corporate. On the retail side we actually did a survey recently on use cases and the number one use case about a third of our borrowers expressed is that they were using the funds that they borrowed to start a business, which we were really excited about. So the other popular use cases were investing in real estate, investing in other types of traditional assets like stocks and bonds, home improvement, larger purchases, vacations were all used cases, paying down higher cost debt was another use case, and then on the corporate side the loans are used for operating capital. So we have some mining companies that borrow from BlockFi. Other types of companies who you know maybe have crypto denominated inventory like exchanges or crypto ATM businesses our frequent borrowers from BlockFi and our loan sizes rearranged from you know as low as five thousand dollars all the way up to seven figures. So it's a pretty diverse group of borrowers.
Buck: So recently it sounds like you guys partnered with another company called Casa. What is Casa and I guess how does that benefit both companies?
Zac: Sure. So Casa is a leader in fighting self sovereign storage solutions for cryptocurrency owners so if you're alone that owns Bitcoin and to use a gold analogy. If you want to own gold but you keep it in your vault or in your backyard you want to have physical possession of it yourself if you want to do that same type of custody with Bitcoin. Casa has a solution that makes that really easy. Our partnership with Casa provides mutual benefits to clients on either side. So Casa clients are able to receive some discounts in terms of accessing BlockFi products and vice-versa BlockFi clients are able to receive discounts in terms of accessing kasam products and over time we'll build some things in to the user experience specifically on Casa’s platform that will make it you know a bit more seamless to interact with BlockFi products while you're on their platform. In general that partnership strategy is something that you'll see more of we think there are in the ecosystem that are specializing in areas that BlockFi's not focused on and doing things where we can provide benefits to clients on both sides is a win-win for us then and our clients.
Buck: Last thing I want to ask you about, last time I spoke to you, you had talked about the idea of potentially Bitcoin backed credit cards meaning like you know getting Bitcoin back instead of miles or dollars back. You guys any closer to that, because I definitely want one of those cards.
Zac: I'm so glad you brought it up. We're definitely closer, but we're not you're not going to have the card until like Q3 of next year probably. It's getting worked on, these things you know for better or worse they take a long time launching a credit program is no small feat you know we're working on it. We've identified some of the key partners that we'll be working with to bring that product to market it is going to happen and I share your sentiment like I wish I had it now.
Buck: Yeah seriously that'd be great. Well listen it was great talking you. So it's BlockFi.com and it's spelled like block and then fi and tell us you know tell us the process of doing is pretty simple okay how long does it take to apply for these things…
Zac: Yeah I mean nothing takes any time really. So you could come in and start earning interest and get a loan from us all in under five minutes. And we also have a client service team that's super responsive in in terms of communication however you want to communicate with them, over email, over the phone, over text message so you know don't don't hesitate to reach out to us. We're also on twitter. My twitter handle is BlockFiZac and our company twitter handle is @therealBlockFi so we're very active on those platforms and happy to chat with you there as well.
Buck: Zac Prince, thank you very much for being on Wealth Formula Podcast today.
Zac: Thanks for having me, Buck, I appreciate it.
Buck: We’ll be right back.
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Increasingly Sophisticated Crypto Attacks Require Increasingly Sophisticated Defenses

Increasingly Sophisticated Crypto Attacks Require Increasingly Sophisticated Defenses

https://preview.redd.it/5tef4jw4dyo31.png?width=679&format=png&auto=webp&s=fa9ebddb44e9097538a3ae81a8ed577b441ad690
As the value and visibility of cryptocurrencies continue to rise, the industry is gradually being exposed to increasingly sophisticated security issues. While institutional players typically have the resources and expertise to fortify their assets under multiple layers of defense, retail investors must take it upon themselves to learn about different types of attacks and determine how to mitigate these risks. To that end, we’ve compiled some of the most common yet devastating security risks below:
  • Traditional Web Infrastructure Attacks
Digital currency exchanges, like other industries, run end-applications on web services which are oftentimes not built from the ground up with security considerations in mind. As a result, the legacy infrastructure of many popular online service providers is not sufficiently future-proofed against evolving web security risks, which can allow external parties to take remote control of a company’s server or crash the intranet. Compromised systems are susceptible to SQL injections and other similar attacks, which can modify a transaction address and reconfigure critical user authorizations, much like the ComboJack malware.
Even if a digital platform is generally well-constructed, the way it is tethered to the internet can still be exploited. Web hosts which expose network services to the Internet are relentlessly attacked, and multiple studies indicate that a publicly exposed host is typically discovered and attacked within minutes of being placed on the network. From there, malicious actors would be able to directly attack the exposed host and re-appropriate it for their ends.
  • Front-running Risks
Traditionally, front-running occurs when traders use insider knowledge or high-frequency trading algorithms to detect orders from rival traders, then rapidly inject their order in front of that trade, leading the rival to buy at a higher cost and increasing the value of the front-runner’s newly purchased asset. This is an issue in both cryptocurrency trading and stock trading, but while front-running in traditional markets is restricted by a variety of regulations, the cryptocurrency market is far less regulated and therefore more susceptible to market manipulation.
Front-running within the cryptocurrency space is particularly egregious, as there have been multiple cases where attackers use their funds to open a low position for a particular cryptocurrency while using funds stolen from a large exchange account to artificially inflate the currency price, pulling the compromised user up to the high position. As a result, the attacker’s positions are sold first, and the stolen user’s funds are then transferred to out of their account through the secondary market for a quick profit. These attacks were commonplace during the ICO craze due to the overwhelming public interest in the potential windfall ICOs insinuated, with little attention paid to the dangers imposed by such attacks. Furthermore, few cryptocurrency exchanges are willing to proactively announce these attacks due to the reputational damage it could incur.
  • Phishing Attacks
Although they are relatively low-tech, phishing attacks have grown increasingly sophisticated and are notoriously hard to prevent since they exploit social behavior to achieve their goals. BitcoinTalk’s network service provider was compromised by a successful phishing attack in 2015, and even Binance was forced to deal with the aftermath of a widespread phishing scheme last year, during which attackers used stolen funds to artificially pump and dump a variety of altcoins for their own gain.
In these cases, anonymous groups were able to identify key individuals with access credentials to multiple databases or servers, then implement a coordinated, high-precision phishing attack to acquire those credentials. As a result, the damage resulting from phishing attacks oftentimes extends beyond the initial victim, reverberating negatively throughout an entire system.
  • Collision Attacks
As more people create online crypto-related accounts and transact digital assets, the volume of inadvertent user information disclosures skyrocketed. This is mainly because most people are accustomed to using a fixed set of account passwords, which provides attackers with an opening. Sophisticated attackers can simply parse through entire libraries of leaked data, obtain potentially relevant identification credentials or partial digital signature information which they can then use to access and empty a user’s account.
Even without a full user password, more tech-savvy attackers are also able to exploit hash function collisions to bypass protocols such as MD5 and SHA-1, which are widely used to build authentication and integrity mechanisms in cryptographic protocols.
  • Temporary Network Hijacking
Temporary network hijacking utilizes military-grade tactics to replace the target network of close contact with the target network to achieve further attacks. Attacks of this nature typically involve a Trojan malware component designed to spread internally within an infected system, moving laterally from an internet-connected remote monitoring server to other devices and systems that weren’t meant to be exposed.
To date, network hijacking malware has been found in everything from government servers in North America to an operational technology network controlling water utilities across Europe. While within the context of crypto, these attacks have only involved relatively benign crypto-mining malware, coupled with more disruptive cyberterrorism tactics which are capable of shutting down large-scale national targets. The effects of a temporary network hijacking could severely compromise the entire internet architecture upon which the bourgeoning crypto ecosystem relies on.
As crypto assets take up an increasingly large portion of many investors’ portfolio, there is also an increasing need to understand the underlying principles of the blockchain and appreciate the importance of private keys. Every crypto investor needs to take digital asset protection very seriously, and at Cobo, our central motivation is to support secure and streamlined blockchain development and make it easier to own and utilize the crypto tokens of your choice. To this end, Cobo Wallet’s Hardware Security Module technology ensures that the vast majority of our user assets are stored in a fully offline, globally distributed system, and are further protected by multiple software layer protocols and a multi-signature mechanism which prevents funds from getting lost due to a single point of failure.
Cybercrime will continue to evolve in tandem with the cryptocurrency sector and industry digitization, and many online exchanges and even hardware custodial solutions are not equipped to repel the full spectrum of approaches and tools malicious actors can implement. As you take steps to safeguard your digital assets, it is imperative that you thoroughly research your crypto custodianship options, avoid making purchases from third-party distributors, and ensure that your wallet’s security mechanisms are pressure-tested against the worst possible scenarios.
submitted by Floris-Jan to Cobo [link] [comments]

batching in Bitcoin

On May 6th, 2017, Bitcoin hit an all-time high in transactions processed on the network in a single day: it moved 375,000 transactions which accounted for a nominal output of about $2.5b. Average fees on the Bitcoin network had climbed over a dollar for the first time a couple days prior. And they kept climbing: by early June average fees hit an eye-watering $5.66. This was quite unprecedented. In the three-year period from Jan. 1 2014 to Jan. 1 2017, per-transaction fees had never exceeded 31 cents on a weekly average. And the hits kept coming. Before 2017 was over, average fees would top out at $48 on a weekly basis. When the crypto-recession set in, transaction count collapsed and fees crept back below $1.
During the most feverish days of the Bitcoin run-up, when normal users found themselves with balances that would cost more to send than they were worth, cries for batching — the aggregation of many outputs into a single transaction — grew louder than ever. David Harding had written a blog post on the cost-savings of batching at the end of August and it was reposted to the Bitcoin subreddit on a daily basis.
The idea was simple: for entities sending many transactions at once, clustering outputs into a single transaction was more space- (and cost-) efficient, because each transaction has a fixed data overhead. David found that if you combined 10 payments into one transaction, rather than sending them individually, you could save 75% of the block space. Essentially, batching is one way to pack as many transactions as possible into the finite block space available on Bitcoin.
When fees started climbing in mid-2017, users began to scrutinize the behavior of heavy users of the Bitcoin blockchain, to determine whether they were using block space efficiently. By and large, they were not — and an informal lobbying campaign began, in which these major users — principally exchanges — were asked to start batching transactions and be good stewards of the scarce block space at their disposal. Some exchanges had been batching for years, others relented and implemented it. The question faded from view after Bitcoin’s price collapsed in Q1 2018 from roughly $19,000 to $6000, and transaction load — and hence average fee — dropped off.
But we remained curious. A common refrain, during the collapse in on-chain usage, was that transaction count was an obfuscated method of apprehending actual usage. The idea was that transactions could encode an arbitrarily large (within reason) number of payments, and so if batching had become more and more prevalent, those payments were still occurring, just under a regime of fewer transactions.

“hmmm”
Some sites popped up to report outputs and payments per day rather than transactions, seemingly bristling at the coverage of declining transaction count. However, no one conducted an analysis of the changing relationship between transaction count and outputs or payments. We took it upon ourselves to find out.
Table Of Contents:
Introduction to batching
A timeline
Analysis
Conclusion
Bonus content: UTXO consolidation
  1. Introduction to batching
Bitcoin uses a UTXO model, which stands for Unspent Transaction Output. In comparison, Ripple and Ethereum use an account/balance model. In bitcoin, a user has no balances, only UTXOs that they control. If they want to transfer money to someone else, their wallet selects one or more UTXOs as inputs that in sum need to add up to the amount they want to transfer. The desired amount then goes to the recipient, which is called the output, and the difference goes back to the sender, which is called change output. Each output can carry a virtually unlimited amount of value in the form of satoshis. A satoshi is a unit representing a one-hundred-millionth of a Bitcoin. This is very similar to a physical wallet full of different denominations of bills. If you’re buying a snack for $2.50 and only have a $5, you don’t hand the cashier half of your 5 dollar bill — you give him the 5 and receive some change instead.
Unknown to some, there is no hardcoded limit to the number of transactions that can fit in a block. Instead, each transaction has a certain size in megabytes and constitutes an economic incentive for miners to include it in their block. Because miners have limited space of 2 MB to sell to transactors, larger transactions (in size, not bitcoin!) will need to pay higher fees to be included. Additionally, each transaction can have a virtually unlimited number of inputs or outputs — the record stands at transactions with 20,000 inputs and 13,107 outputs.
So each transaction has at least one input and at one output, but often more, as well as some additional boilerplate stuff. Most of that space is taken up by the input (often 60% or more, because of the signature that proves they really belong to the sender), while the output(s) account for 15–30%. In order to keep transactions as small as possible and save fees, Bitcoin users have two major choices:
Use as few inputs as possible. In order to minimize inputs, you can periodically send your smaller UTXOs to yourself in times when fees are very low, getting one large UTXO back. That is called UTXO consolidation or consolidating your inputs.
Users who frequently make transfers (especially within the same block) can include an almost unlimited amount of outputs (to different people!) in the same transaction. That is called transaction batching. A typical single output transaction takes up 230 bytes, while a two output transaction only takes up 260 bytes, instead of 460 if you were to send them individually.
This is something that many casual commentators overlook when comparing Bitcoin with other payment systems — a Bitcoin transaction can aggregate thousands of individual economic transfers! It’s important to recognize this, as it is the source of a great deal of misunderstanding and mistaken analysis.
We’ve never encountered a common definition of a batched transaction — so for the purposes of this study we define it in the loosest possible sense: a transaction with three or more outputs. Commonly, batching is understood as an activity undertaken primarily by mining pools or exchanges who can trade off immediacy for efficiency. It is rare that a normal bitcoin user would have cause to batch, and indeed most wallets make it difficult to impossible to construct batched transactions. For everyday purposes, normal bitcoiners will likely not go to the additional effort of batching transactions.
We set the threshold at three for simplicity’s sake — a normal unbatched transaction will have one transactional output and one change output — but the typical major batched transaction from an exchange will have dozens if not hundreds of outputs. For this reason we are careful to provide data on various different batch sizes, so we could determine the prevalence of three-output transactions and colossal, 100-output ones.
We find it helpful to think of a Bitcoin transaction as a mail truck full of boxes. Each truck (transaction) contains boxes (outputs), each of contains some number of letters (satoshis). So when you’re looking at transaction count as a measure of the performance and economic throughput of the Bitcoin network, it’s a bit like counting mail trucks to discern how many letters are being sent on a given day, even though the number of letters can vary wildly. The truck analogy also makes it clear why many see Bitcoin as a settlement layer in the future — just as mail trucks aren’t dispatched until they’re full, some envision that the same will ultimately be the case for Bitcoin.

Batching
  1. A timeline
So what actually happened in the last six months? Let’s look at some data. Daily transactions on the Bitcoin network rose steadily until about May 2017, when average fees hit about $4. This precipitated the first collapse in usage. Then began a series of feedback loops over the next six months in which transaction load grew, fees grew to match, and transactions dropped off. This cycle repeated itself five times over the latter half of 2017.

more like this on coinmetrics.io
The solid red line in the above chart is fees in BTC terms (not USD) and the shaded red area is daily transaction count. You can see the cycle of transaction load precipitating higher fees which in turn cause a reduction in usage. It repeats itself five or six times before the detente in spring 2018. The most notable period was the December-January fee crisis, but fees were actually fairly typical in BTC terms — the rising BTC price in USD however meant that USD fees hit extreme figures.
In mid-November when fees hit double digits in USD terms, users began a concerted campaign to convince exchanges to be better stewards of block space. Both Segwit and batching were held up as meaningful approaches to maximize the compression of Bitcoin transactions into the finite block space available. Data on when exchanges began batching is sparse, but we collected information where it was available into a chart summarizing when exchanges began batching.

Batching adoption at selected exchanges
We’re ignoring Segwit adoption by exchanges in this analysis; as far as batching is concerned, the campaign to get exchanges to batch appears to have persuaded Bitfinex, Binance, and Shapeshift to batch. Coinbase/GDAX have stated their intention to begin batching, although they haven’t managed to integrate it yet. As far as we can tell, Gemini hasn’t mentioned batching, although we have some mixed evidence that they may have begun recently. If you know about the status of batching on Gemini or other major exchanges please get in touch.
So some exchanges have been batching all along, and some have never bothered at all. Did the subset of exchanges who flipped the switch materially affect the prevalence of batched transactions? Let’s find out.
  1. Analysis
3.1 How common is batching?
We measured the prevalence of batching in three different ways, by transaction count, by output value and by output count.

The tl;dr.
Batching accounts for roughly 12% of all transactions, 40% of all outputs, and 30–60% of all raw BTC output value. Not bad.
3.2 Have batched transactions become more common over time?
From the chart in 3.1, we can already see a small, but steady uptrend in all three metrics, but we want to dig a little deeper. So we first looked at the relationship of payments (all outputs that actually pay someone, so total outputs minus change outputs) and transactions.

More at transactionfee.info/charts
The first thing that becomes obvious is that the popular narrative — that the drop in transactions was caused by an increase in batching — is not the case; payments dropped by roughly the same proportion as well.
Dividing payment count by transaction count gives us some insight into the relationship between the two.

In our analysis we want to zoom into the time frame between November 2017 and today, and we can see that payments per transactions have actually been rallying, from 1.5 payments per transaction in early 2017 to almost two today.
3.3 What are popular batch sizes?
In this next part, we will look at batch sizes to see which are most popular. To determine which transactions were batched, we downloaded a dataset of all transactions on the Bitcoin network between November 2017 and May 2018from Blockchair.
We picked that period because the fee crisis really got started in mid-November, and with it, the demands for exchanges to batch. So we wanted to capture the effect of exchanges starting to batch. Naturally a bigger sample would have been more instructive, but we were constrained in our resources, so we began with the six month sample.
We grouped transactions into “batched” and “unbatched” groups with batched transactions being those with three or more outputs.

We then divided batched transactions into roughly equal groups on the basis of how much total output in BTC they had accounted for in the six-month period. We didn’t select the batch sizes manually — we picked batch sizes that would split the sample into equal parts on the basis of transaction value. Here’s what we ended up with:

All of the batch buckets have just about the same fraction of total BTC output over the period, but they account for radically different transaction and output counts over the period. Notice that there were only 183,108 “extra large” batches (with 41 or more outputs) in the six-month period, but between them there were 23m outputs and 30m BTC worth of value transmitted.
Note that output value in this context refers to the raw or unadjusted figure — it would have been prohibitively difficult for us to adjust output for change or mixers, so we’re using the “naive” estimate.
Let’s look at how many transactions various batch sizes accounted for in the sample period:


Batched transactions steadily increased relative to unbatched ones, although the biggest fraction is the small batch with between 3 and 5 outputs. The story for output counts is a bit more illuminating. Even though batched transactions are a relatively small fraction of overall transaction count, they contain a meaningful number of overall outputs. Let’s see how it breaks down:


Lastly, let’s look at output value. Here we see that batched transactions represent a significant fraction of value transmitted on Bitcoin.


As we can see, even though batched transactions make up an average of only 12% of all transactions, they move between 30%-60% of all Bitcoins, at peak times even 70%. We think this is quite remarkable. Keep in mind, however that the ‘total output’ figure has not been altered to account for change outputs, mixers, or self-churn; that is, it is the raw and unadjusted figure. The total output value is therefore not an ideal approximation of economic volume on the Bitcoin network.
3.4 Has transaction count become an unreliable measure of Bitcoin’s usage because of batching?
Yes. We strongly encourage any analysts, investors, journalists, and developers to look past mere transaction count from now on. The default measure of Bitcoin’s performance should be “payments per day” rather than transaction count. This also makes Bitcoin more comparable with other UTXO chains. They generally have significantly variable payments-per-transaction ratios, so just using payments standardizes that. (Stay tuned: Coinmetrics will be rolling out tools to facilitate this very soon.)
More generally, we think that the economic value transmitted on the network is its most fundamental characteristic. Both the naive and the adjusted figures deserve to be considered. Adjusting raw output value is still more art than science, and best practices are still being developed. Again, Coinmetrics is actively developing open-source tools to make these adjustments available.
  1. Conclusion
We started by revisiting the past year in Bitcoin and showed that while the mempool was congested, the community started looking for ways to use the blockspace more efficiently. Attention quickly fell on batching, the practice of combining multiple outputs into a single transaction, for heavy users. We showed how batching works on a technical level and when different exchanges started implementing the technique.
Today, around 12% of all transactions on the Bitcoin network are batched, and these account for about 40% of all outputs and between 30–60% of all transactional value. The fact such that a small set of transactions carries so much economic weight makes us hopeful that Bitcoin still has a lot of room to scale on the base layer, especially if usage trends continue.
Lastly, it’s worth noting that the increase in batching on the Bitcoin network may not be entirely due to deliberate action by exchanges, but rather a function of its recessionary behavior in the last few months. Since batching is generally done by large industrial players like exchanges, mixers, payment processors, and mining pools, and unbatched transactions are generally made by normal individuals, the batched/unbatched ratio is also a strong proxy for how much average users are using Bitcoin. Since the collapse in price, it is quite possible that individual usage of Bitcoin decreased while “industrial” usage remained strong. This is speculation, but one explanation for what happened.
Alternatively, the industrial players appear to be taking their role as stewards of the scarce block space more seriously. This is a significant boon to the network, and a nontrivial development in its history. If a culture of parsimony can be encouraged, Bitcoin will be able to compress more data into its block space and everyday users will continue to be able to run nodes for the foreseeable future. We view this as a very positive development. Members of the Bitcoin community that lobbied exchanges to add support for Segwit and batching should be proud of themselves.
  1. Bonus content: UTXO consolidation
Remember that we said that a second way to systematically save transaction fees in the Bitcoin network was to consolidate your UTXOs when fees were low? Looking at the relationship between input count and output count allows us to spot such consolidation phases quite well.

Typically, inputs and outputs move together. When the network is stressed, they decouple. If you look at the above chart carefully, you’ll notice that when transactions are elevated (and block space is at a premium), outputs outpace inputs — look at the gaps in May and December 2017. However, prolonged activity always results in fragmented UTXO sets and wallets full of dust, which need to be consolidated. For this, users often wait until pressure on the network has decreased and fees are lower. Thus, after transactions decrease, inputs become more common than outputs. You can see this clearly in February/March 2017.

Here we’ve taken the ratio of inputs to outputs (which have been smoothed on a trailing 7 day basis). When the ratio is higher, there are more inputs than outputs on that day, and vice versa. You can clearly see the spam attack in summer 2015 in which thousands (possibly millions) of outputs were created and then consolidated. Once the ratio spikes upwards, that’s consolidation. The spike in February 2018 after the six weeks of high fees in December 2017 was the most pronounced sigh of relief in Bitcoin’s history; the largest ever departure from the in/out ratio norm. There were a huge number of UTXOs to be consolidated.
It’s also interesting to note where inputs and outputs cluster. Here we have histograms of transactions with large numbers of inputs or outputs. Unsurprisingly, round numbers are common which shows that exchanges don’t publish a transaction every, say, two minutes, but instead wait for 100 or 200 outputs to queue up and then publish their transaction. Curiously, 200-input transactions were more popular than 100-input transactions in the period.


We ran into more curiosities when researching this piece, but we’ll leave those for another time.
Future work on batching might focus on:
Determining batched transactions as a portion of (adjusted) economic rather than raw volume
Looking at the behavior of specific exchanges with regards to batching
Investigating how much space and fees could be saved if major exchanges were batching transactions
Lastly, we encourage everyone to run their transactions through the service at transactionfee.info to assess the efficiency of their transactions and determine whether exchanges are being good stewards of the block space.
Update 31.05.2018
Antoine Le Calvez has created a series of live-updated charts to track batching and batch sizes, which you can find here.
We’d like to thank 0xB10C for their generous assistance with datasets and advice, the people at Blockchair for providing the core datasets, and David A. Harding for writing the initial piece and answering our questions.
submitted by miguelfranco1412 to 800cc [link] [comments]

5 most promising Altcoins for long-term investments | Coinscapture

5 most promising Altcoins for long-term investments | Coinscapture

After the success of Bitcoin and the rise in the price of the first-ever cryptocurrency, many new coins were developed in cryptoworld. In simple words, any coin other than bitcoin is termed as “Altcoins”. These coins are created by tweaking the Bitcoin's or any other existing cryptocurrencies protocol. In the growing world of cryptocurrency, there are more than 3000 cryptocurrencies which came into existence and so it is a tough job to choose the right Altcoin to invest in it. Here are the 5 most promising Altcoins that can help you to narrow your search.
Disclaimer: This guide should not be considered as financial advice. It is highly recommended to do appropriate market research before any investments.

Litecoin

After the successful launch of Bitcoin, Litecoin was the next one to enter the Cryptoworld in 2011. Charlie Lee - a computer scientist created Litecoin by making some technical changes in the bitcoin’s source-code and made it the fastest peer-to-peer currency that enabled instant, near-zero cost payments to anyone across the world. Also, litecoin has a total supply of 84 million with an average block mining time of 2.5 minutes.

Reasons why to choose Litecoin as a Long-Term Investment

  • Improved: Litecoin algorithm is generally easier to mine but difficult to crack The bitcoin mining is highly processed intensive requiring, application-specific integrated circuit devices with high processing capabilities, while Litecoin mining is memory-intensive requiring less cost-intensive graphics processing units (GPU).
  • Faster block-processing rate: The technical changes done on Bitcoin’s source-code allows Litecoin to processes a block at a much faster rate and giving out rewards to the miner faster in every 2.5 minutes as compared to Bitcoin which processes a block in every 10 minutes. Litecoin network have more capacity to handle the transactions than bitcoin's network
  • SegWit upgrade: Litecoin's SegWit upgrade boost the capacity of the number of transactions a block can hold in litecoin's blockchain, thereby speeding up the transaction settlement times and lowering transaction costs.
  • Higher trading volume: The trading of Litecoin has begun since 2011 and since then it was in the top 10 list of coins. The popularity of Litecoins is so much that you won't face any problem selling them in the future which brings less fear of having risk as compared to other new coins.

Ethereum

Ethereum is the second-largest digital currency introduces Vitalik Buterin in late 2015. It has been a popular choice in many industries as its cool feature named Smart Contracts helps developers to build decentralized applications (dApps) on top of its (i.e. Ethereum's) blockchain which helps to avoid fraud, downtime, and control or interference from a third party. Ethereum can also be used for banking and financial service contracts, ICOS, prediction markets, replacing escrow, identity management. The Enterprise Ethereum Alliance founded in 2017 has over 200 organizations that are testing on various versions of Ethereum's blockchain in different industries. Ethereum has a circulating supply of 106,376,346 ETH, the market capitalization of $26,307, 580,992 and faster transaction of 6 minutes as compared to Bitcoin.

Reasons why to choose Ethereum as a Long-Term Investment

  • Multi-purpose usage- Other than trading Ethereum can be used for ICOs, prediction markets, building tokens and many more ways that very few cryptocurrencies can do as good as Ethereum.
  • Safety: The apps built on Ethereum’s blockchain termed as dApps or decentralized apps are significantly safer and more resistant to hacking than the software you use now.
  • Smart contracts: The smart contract feature offers significant business benefits over more traditional conventional forms of cloud computing and transaction-clearing.
  • Initial Coin Offerings: Ethereum is used ICOs (Initial Coin Offerings) that means it acts as a launchpad for new tokens which thereby makes it a valuable platform and price will increase with its use.

Ripple

Ripple is the hot choice in banking and financial institutions as it can be used as an intermediary for quick transaction-processing and settlement service; allowing to transact directly and instantly across national borders. XRP currently has a fast transaction processing time of about 4 seconds and a cheap transaction fee about $0.004 per transaction (which is less than half a cent). It has a circulating supply of 42,181,995,112 and a market capitalization of around 17 billion USD.

Reasons why to choose Ripple as a Long-Term Investment

  • Well distributed: Ripple is an open-source technology, built on the principles of blockchain with an increasing set of validators.
  • Highly Scalable: XRP has the potential to handle 1,500 transactions per second, 24x7, and can scale to deal with a similar throughput as Visa.
  • Highly Stable: The most stable record of Ripple makes it ready for institutional and enterprise use.
  • Global Bank partners: Ripple has partnered with over 100 banks like Bank of America, UBS, Standard Chartered, Barclays, JP Morgan, Santander, and American Express.

Stellar

Stellar offers the fastest and the cheapest online payment and cross-border payment services as compared to the other large companies. Also, it does not use proof of work verification which is time and energy consuming which allows processing a transaction in approx 5 seconds. It has a market capitalization of $2,378,213,121 and a circulating supply of 19.331,689,641.

Reasons why to choose Stellar as a Long-Term Investment

  • Low-cost transactions: Stellar’s payment protocol prioritizes profit, the low transaction time and high operational efficiency translates to a lower cost of transactions.
  • Currency exchanger: Stellar’s platform also acts as a currency exchanger between government-backed currencies, such as dollars to euros.
  • Creating tokens: Launching a token on the Stellar platform is super easy because of the simple programming.
  • Tech elements: Stellar can integrate with elements such as blockchain smart contracts, and multi signatures that enhances the functionality of the payment protocol

Binance Coin

Binance coin is the official coin of the Binance platform that offers a stage for trading cryptocurrencies. Binance is soon launching its own decentralized exchange, Binance DEX that would be available on all platforms, such as Windows, Linux, Mac OS, iOS and Android. BNB has a market capitalization of 4 billion USD and a circulating supply of 141,175,490.

Reasons why to choose Binance Coin a Long-Term Investment

  • Discounts: BNB can be used not only to pay сommissions for transactions on the exchange and also to get additional discounts for each purchase and exchange via Binance
  • Team: BNB has a great team that is ambitious and experienced in the cryptocurrency world
  • Referrals: BNB coin offers a smart referral scheme which attracts many users and thereby grows the platform’s adoption
  • Loyalty: BNB coin is the only cryptocurrency that rewards customers for their loyalty and creating a fair ecosystem within Binance
    https://coinscapture.com/blog/5-most-promising-altcoins-for-long-term-investments
submitted by coinscapturecom to u/coinscapturecom [link] [comments]

The Growth Of Crypto Exchanges

The Growth Of Crypto Exchanges

https://preview.redd.it/3j0ncan5cme31.jpg?width=1920&format=pjpg&auto=webp&s=bb4084dbb21b395146d9ef152a6aaba3f76a868e
Bitcoin was created in 2009, since then a whole industry has emerged around it. One major group of players in the industry are the crypto exchanges. Even though it did not roll out in 2009 with Bitcoin, this sector is responsible for a lot of the development that has happened around Bitcoin and crypto. By taking a look at the growth of crypto exchanges, you will understand how the entire industry has evolved.
First of all, let us consider the existing crypto exchanges and how they have evolved over the years. Here is a list of some of the major exchanges and their launch dates (year):
Exchange Launch Dates (By Year)
  • 2010 – Mt Gox
  • 2011 – BitPay, BitStamp, BTC-e, Kraken
  • 2012 – Bitfinex, Coinbase, LocalBitcoins.
  • 2013 – Bitcoin Suisse AG, BitGo, BitMain, BitPesa, Bittrex, CEX.IO, Coinfloor, Huobi, ShapeShift.
  • 2014 – BitMex, Coincheck, OKEx, Xapo, Poloniex, KuCoin
  • 2015 – Bitwala
  • 2016 – BuyUcoin
  • 2017 – Binance
The above list is not exhaustive, however, a closer look at it reveals a trend that has been key to how Bitcoin has developed over the years. This trend, which coincides with the growth of crypto exchanges reveals how important that singular sector has become in the life of Bitcoin and cryptocurrencies.
2013 Was an Important Year in the History of Cryptocurrencies
The year 2013 has the highest number of new exchanges that came to life. This is the year that we can attach to the initial boost in the awareness of Bitcoin. Even the infamous Mt Gox, which started in 2010, became very popular in 2013. By this time, it was handling over 70% of all Bitcoins worldwide.
Bitcoin’s first attempt at the $1,000 mark was also in 2013. It was after this rise that it entered into the first crypto winter which lasted until the second half of 2016. That was when the biggest boom kicked in, dragging us through 2017 until an all time high price was achieved in January 2018.
A lot of other exchanges that are not listed above have also come into existence, especially after the 2017 exceptional price surge. Having coincided with the ICO boom era, the price surge happened when many projects were still in incubation. Among them were also a lot of exchanges.
New Generation Exchanges
Between 2017 to date, what we will choose to call a new generation of exchanges have made their presence known and contributed to the growth of crypto exchanges. Some of them include LAToken, Shortex, Bitforex, BitMax and many others. What these exchanges have been able to achieve is expansion in the industry and increased accessibility to users across the globe.
As many as they are, even as their primary goal is to provide access for users in the industry, the kind of services that the exchanges provide vary. It is the uniqueness of their services that determine the class of customers that particular exchanges attract. Some of them offer margin trading services, while others don’t. Some are strictly cryptocurrency exchanges, while others allow fiat transactions. The variations are too numerous to mention and can be confusing to users at times.
The good thing today is that platforms like tap have found solutions that harmonize the activities of the numerous exchanges and allow users to access them from a single point. Be it crypto-to-crypto trading, or crypto-to-fiat transactions, all can be executed on fiat.
The crypto-enabled transactions and other related services that tap offers cannot be exhausted in this post. However, it is interesting to note that for traders, or those who make use of the tap prepaid MastercardⓇ, the platform ensures that the best prices are provided for them. This is achieved through a software that scans through multiple exchanges to select the most competitive price whenever a trade or transaction is initiated.
Innovations such as this, and many more that we are seeing today all contribute to the growth of crypto exchanges and the expansion of the industry at large.
https://www.tap.global/the-growth-of-crypto-exchanges
submitted by OliAustin101 to Cryptochillout [link] [comments]

Coin-a-Year: Raiblocks

Howdy, folks! ♫Welcome back to the show that never ends!♫
I've decided it's high time I did a Coin-a-Year on Raiblocks. This is a special feature I do to recycle old material revisit past coins I've covered of special note a year or more later. I originally posted my Coin-a-Day feature about Raiblocks on this subreddit March 7th, 2016; it didn't get much attention then, but I have a strange feeling people might be slightly interested to see the difference now.
Below is the original report. I'll strike out what is wrong now, and add [bracketed notes] for updated commentary.
I'm no expert on the current state of Rai by any means. I'd honestly thought the coin was dead later in 2016; just didn't check back into it. And now here we are.
Bias note: I got a significant bit of Rai from the original faucet. I have sold a fraction of that this year but still have a lot of it. I'm biased both by holding it and from selling it.
Hello, y'all! I saw a comment pointing to this coin as being designed for free transactions, which is a core interest to me, so I decided to look into it a little bit and do a write-up. Enjoy!
Summary
Today's coin is Raiblocks (RAIXRB), which are designed to support free transactions and no block rewards. The coins will be initially distributed by a CAPTCHA controlled faucet with an annual halving rate.
[Faucet now closed.]
Initial creation: October 15th, 2015 [1]
Coin supply: 4.8 x 1012 rai current supply in circulation; 3.4 x 1014 rai maximum supply [2]
[XRB is the new standard base unit which was Mrai before (and still I suppose). Also, supply is distributed. So we now have about 133 million XRB as the outstanding and max supply.]
All-time high: Not yet traded as far as I know. [3]
[About $37.5 or 0.0028 per CMC max so far, about two days ago]
Current price: Not yet traded as far as I know. [3]
[Depending on the exchange and moment, somewhere around $30-35 currently or about 0.002-0.0022 BTC]
Current market cap: Not yet traded as far as I know. [3]
[Somewhere around $4 billion]
Block rate (average): Unlimited [4]
Transaction rate: ? [5]
[I'm too lazy to find this right now. Maybe someone will chime in with it in the comments.]
Transaction limit (currently): None [6]
Transaction cost: Free [7]
Rich list: ? [8]
[https://raiblocks.net/page/frontiers.php - Top 100 own ~63%]
Exchanges: None yet. [3]
[Bitgrail and Mercatox have been the two main. Kucoin just added it and Binance has it in its voting which is ending shortly.]
Processing method: Proof-of-stake [9]
[Above refers I believe to dispute resolution (double spend). There's also a minor PoW for send/receive.]
Distribution method: Faucet [10]
Community: New-born [11]
[Fairly strong and growing. Good memes. Slightly drunk on euphoria currently.]
Code/development: Active development at https://github.com/clemahieu/raiblocks
Leadership: Colin LeMahieu
Innovation or special feature: Protocol designed without a limited throughput or block rate, as well as not supporting block rewards nor transaction fees.
Description
Raiblocks is, as far as I know, the first cryptocurrency designed from its start to not support any block reward or transaction fee. In addition, it has no block size or rate limit. Further, all coins will be initially distributed through a captcha-controlled faucet on the main site. It's a bold attempt, going against the conventional wisdom of what is possible.
Edit: I should mention a couple things. First, there is a PoW attached to transactions as an anti-spam defense. This PoW can be attached by the recipient rather than the sender as well, which means that large automated sends could be done without the PoW if needed and the recipient could attach that.
Also, the natural question coming from how all the rest of the cryptocurrencies work is "how does it work without an incentive to run a node?" The idea presented in the whitepaper is basically that operating a cryptocurrency has a lot of expenses, and most of them are paid "out-of-band", so why not have funding nodes be that way too? It leaves it open to whatever other incentives there may be, of which the most obvious are first: that there are only full nodes so far, so if one wants to use the coin, then one is going to run a node. More long-term, even after SPV, presumably large holders might choose to operate one regardless. Someday, if merchants accept it, they would presumably run one. And enthusiasts. It sounds very tenuous, and this is why this is such an audacious attempt in my opinion.
After six months running, the number I heard for the blockchain size was about 20 MB, which is insanely small, but the coin has gotten so little attention that I suspect there hasn't been significant load yet. I'm very curious to see how it will perform under load. I think its design actually makes it more efficient when there aren't transactions, because nothing is added to the blockchain (actually termed block lattice here, but using blockchain generically to refer to any cryptocurrency's core data), unlike in the conventional / Bitcoin model where blocks are being generated whether or not there are transactions in them. Of course that doesn't matter much when there are tons of transactions, as on Bitcoin currently, but, for instance, in Nyancoin, we accumulate tons of empty blocks all the time, where Raiblocks would just wait for more transactions. However, again, under load perhaps it could start growing "too quickly" by some metric, or eventually reach the point where it starts losing users because of the requirements of running a full node.
I think it will be very interesting to see how this turns out in practice.
[And it's certainly going to be interesting to see how it goes. So far, it's still working. Which is better than I'd hoped or expected.]
Community
The coin is relatively young but even for a young coin it's not a huge community. But there is clear discussion and interest both on BCT and on their Google Group. It looks like a healthy start to me.
[As per my comment above: Fairly strong and growing. Good memes. Slightly drunk on euphoria currently. Seems well-intentioned generally: looking to try to have some caution mixed in and putting up a bug bounty and that sort of thing. Still has a little bit of some of the common negative characteristics in crypto communities but this may be due to growth from outside communities overwhelming the local culture temporarily more than anything.]
Footnotes
[1] https://bitcointalk.org/index.php?topic=1208830.0 - Initial announcement, didn't get much attention apparently. Also, this thread mentions a built-in block-explorer with a rich list. I don't have a working client to access this at the moment but that's pretty cool.
[2] There are 2128 total units, and a rai is 1024 total units, so total supply should be about 3.4 x 1014. https://github.com/clemahieu/raiblocks/wiki/Distribution-and-Mining Distribution has been going since about November 2015, so I would expect about one-third of the initial 50% to be distributed. The block explorer seems pretty primitive; it just takes a hash. No overall stats. So I'll use that one-third of the initial 50% estimate. So about 5.7 x 1013. Note by comparison that the faucet gives 108 coins at a time currently.
Actually, this comment puts the amount of rai in circulation as 4,763,023...that can't be right, that many Mrai I think? Yeah, 1030 stated as divider there. So 4.8 x 1012 rai in current circulation.
[3] https://groups.google.com/forum/#!topic/raiblocks/PSbX_onjLfU - This topic discusses it a bit. Also comments from meor in this thread
However, I have also paid 100 NYAN for 100 Mrai. This is basically a test transaction, but 1 NYAN for 1 Mrai (106 rai) would imply a marketcap of 4.8 million NYAN, or about 0.34 BTC in current circulation. I had initially thought this was higher before recalculating with the actual amount circulating as per [2]; may also have screwed up the math initially or here.
[4] https://docs.google.com/document/d/13s6BKzRq9oD5Me55JBRzR7BdvjJ44QKqPu2lf-JsAlU/edit - whitepaper ; each transaction could be thought of as its own block if I am grokking this right. It goes through as fast as the network can handle it. There is no fixed interval or period.
[5] I believe https://raiblocks.net/#/block-explorer is the only block explorer so far and it only supports entering a hash, so I don't have a way to determine the transactions in the last 24 hours.
[6] https://docs.google.com/document/d/13s6BKzRq9oD5Me55JBRzR7BdvjJ44QKqPu2lf-JsAlU/edit - The protocol is designed without a limit if I understand correctly.
[7] https://docs.google.com/document/d/13s6BKzRq9oD5Me55JBRzR7BdvjJ44QKqPu2lf-JsAlU/edit - The protocol is designed without transaction fees or block rewards.
[8] As per [5], the block explorer does not support this. There area couple addresses known to be the initial generation which will go into the faucet, but beyond that I don't know the distribution. There's supposed to be a rich list available in the built-in explorer, but I was unable to get a client running on my out-of-date systems (32-bit Windows (64-bit Windows client only), and CentOS 6 (glibc too old)).
[9] In general all full nodes are maintaining their own copies of all the information, but as I understand it the dispute resolution is based on voting by ownership of rai.
[10] All rai will be distributed through https://raiblocks.net/#/start as per https://github.com/clemahieu/raiblocks/wiki/Distribution-and-Mining
[11] There's been some discussion on BCT as well as on the google group: https://groups.google.com/forum/#!forum/raiblocks ; there's a new subreddit /raiblocks, but it's still set on private for some reason at the time of writing this footnote (just wrote a comment to meor noting this).
Further reading
https://raiblocks.net - Main site
https://github.com/clemahieu/raiblocks - Repo with documentation on the github wiki.
https://docs.google.com/document/d/13s6BKzRq9oD5Me55JBRzR7BdvjJ44QKqPu2lf-JsAlU/edit - whitepaper
https://groups.google.com/forum/#!topic/raiblocks - Google group
https://bitcointalk.org/index.php?topic=1219264.0 - Block lattice discussion
Disclosure, disclaimer
Disclosure: I have made an agreement to purchase 100 Mrai and have paid 100 NYAN for this. I have no other financial interest in Raiblocks currently, but I do intend to get a client ultimately (my current OSes are incompatible from being too old (one is 32-bit Windows; other CentOS 6 with too old glibc)) and get free coins from the faucet and play with this more.
Disclaimer: This writing is intended for edutainmental purposes only. Any accurate information conveyed is purely incidental. No warranty of fitness for any fit purposes is implied. This column known to the State of California to cause cancer. Cave canum. Carpe carp. Caveat lector.
Up next:
Tell me what coin to write about next by sponsoring an article! A sponsored article would likely have more discussion than I did here, and less than my Coin-a-Year report on Nyancoin.
Edit: /RaiBlocks is now public! New subreddit, but hopefully it'll build up a bit over time. :-)
Edit 2: Added more than the stub discussion discussion section I'd initially done.
Okay, so those last links are generally outdated and old information and I stopped commenting through all that. Go to https://raiblocks.net/ and/or /raiblocks if you want to learn more. :-)
Again, I'm heavily biased from having gotten incredibly fortunate from this price rise and having been fortunate enough to have been introduced to the coin early on. I'm not giving trading advice. The market is crazy but I have no idea if it'll go up, down, sideways, or loop-de-loop.
Have fun and stay safe!
submitted by coinaday to CryptoCurrency [link] [comments]

What is AhrvoDEEX?

Ahrvo is a $0 commission social trading platform that provides daily rankings for over 8000 stocks and ETFs. Ahrvo’s proprietary ranking system exploits and capitalizes on patterns found in the historical and projected stock market and company-specific data in order to consistency find the best stocks. Ahrvo’s patent-protected software integrates quantitative and social investing. Fostering an environment where users can make profitable trades and engage other participants within the Ahrvo community to discuss trading strategies. Ahrvo Fantasy Investing League (AFIL) awards cash prizes monthly to the top finisher in its investing competition. Participants can create public or private investing leagues to compete against family and friends. Features include real-time prices and stock alerts, Wall Street consensus data, quantitative company profiles, proprietary buy and sell signals, 300 ranked investment themes, among others. The platform is currently available on iOS and Android.
About AhrvoDEEX Company Overview Ahrvo is a financial technology company created in March 2017. Ahrvo’s proprietary multi-factor ranking system and resulting AhrvoScoresTM help investors and traders of all backgrounds discover stock market winners and make timely and profitable investment decisions among more than 8000 stocks and ETFs. Ahrvo’s proprietary equity scoring model uses predictive analytics and data mining techniques to uncover and exploit patterns found in historical and projected stock market data in order to find the best stocks. AhrvoScores are derived using the four main drivers of stock price performance -- Quality, Value, Growth, and Momentum. Each factor adjusts to stock market conditions creating consistently robust AhrvoScores. It is simple: stocks with high AhrvoScores consistently outperform the market; stocks with low scores underperform. This streamlines the stock discovery process as a group of top rated investment ideas is curated for users daily.
Problem Clearinghouses and other intermediaries cost the brokerage industry billions of dollars a year, creating bottlenecks that limit order-matching transparency and settlement speed. Wall Street lacks objectivity and often produces inaccurate equity ratings and price targets. For example, in 2017 only 5% of the 500 S&P companies were rated ‘sell’. This leaves investors and traders without a roadmap to find stocks that are suitable for investment. A study conducted in 2016 found that from 1981 to 2016 the top 10 percent of stocks analysts were most bullish (optimistic) about generally performed worse than the 10 percent of stocks analyst were bearish (pessimistic) about. In fact, an investor who bought stocks analysts were bearish on over that time period would have gained 15% in excess return over the following year relative to the stocks analysts were bullish on.
Solution AhrvoDEEX is a peer-to-peer decentralized equity exchange that enables profitable trading by using multifactor ranking systems and deep learning algorithms to create smart equity scores and price targets that streamline the decision-making process. AhrvoDEEX transaction speed is comparable to centralized exchanges and much faster than Bitcoin and Ethereum. Centralized exchanges settle in 1 to 3 seconds. Ethereum DEX transactions take ~3 minutes. Bitcoin transactions take 10 minutes to settle but can often take longer. Transactions on AhrvoDEEX settle in ~3 to 5 seconds. Ahrvo’s proprietary equity scoring model looks at over 4 dozen subfactors that are highly correlated with price performance, subsequently grouping them into four main factors. For the past ten years, our system has consistently outperformed the stock market (benchmark Russell 3000 w/dividends). The model's performance results were created by a 3rd party firm, EQM Capital LLC.
Competitive Advantage
Patent Protection Ahrvo is building the first blockchain-based decentralized equity exchanged powered by artificial intelligence. Over the past two years, Ahrvo’s management team has garnered the necessary protection for its growing suite of investing and trading solutions. Ahrvo has filed two provisional patents (March 2017/November 2018) and one utility patent (March 2018). Pending patents cover existing and upcoming products and features that are under-development or slated for release. In addition, native aspects of the network's protocol and integration of multifactor ranking systems and neural networks into a peer-to-peer equity exchange are covered.
Traditional Broker Experience An advantage of being a traditional broker instead of a tokenized exchange is the ability to custody and onboard traditional equities. Tokenized platforms frequently state, “we are only a software firm and do not participate in regulated activities such as custodial or clearing services, order execution, investment advice, asset management, and other such financial services.” We believe this is to their detriment. Ahrvo’s custodian platform will offer front and back office services for firms. By focusing on a larger market (equities vs. cryptocurrency), AhrvoDEEX growth should exceed tokenized competitors.
Competent Blockchain Developers Ahrvo is working with a seasoned team of blockchain developers. The development firm is CMMI Level 3 and ISO 9001: 2015 certified. In total, we have access to a team of 35 blockchain developers but will be working with a team of 4-5 developers initially. Their experience includes: launching public and private blockchain by forking, creating native coins, changing specifications like reward logic, inflation rate, etc., and configuring mining tools.
Infrastructure Current market participants (mainly Ravencoin and Equibit) are forks of Bitcoin. We view this as a structural impediment given the nature of the industry (high transaction volume). The consensus protocol of their blockchains is Proof of Work (POW). In POW, miners require a lot of energy to validate transactions. The implicit and explicit cost associated with bitcoin-based platforms has become apparent when transaction volumes rise with the price of the underlying cryptocurrency. Ahrvo’s blockchain will be forked from Stellar, and use Proof of Stake (POS)- a more cost-efficient and environmentally friendly consensus protocol.
EXCHANGE LIST
Binance
Kucoin
Bibox
Huobi
SECURE WALLET
Ledgerwallet
Trezor
Ellipal
submitted by icoinformation2021 to AhrvoDEEX [link] [comments]

Initial Coin Offerings (ICOs)

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Now I want to share some cool info on the purpose and role of tokens within the Blockchain ecosystem at the ICO stage.
Initial Coin Offerings (ICOs) History
Initial Coin Offerings (ICOs) are a means of fundraising for the initial capital needed to get new projects off the ground within the cryptocurrency ecosystem. More often than not, Bitcoin and Ethereum, are used to buy a quantity of project tokens. However, new projects are also being launched on alternative Blockchain platforms such as NEO or WANchain, wherein the “parent” chain’s tokens will be used to fund these ICOs. Pre-launch, ICO tokens are endorsed as functional currency in the project ecosystem. After a project’s ICO, it is available on exchanges, and then the market determines the value of those tokens. The main benefit of using the ICO funding system is that it avoids the prohibitive amount of time and expense incurred by launching a startup in the conventional method, by way of Initial Public Offering (IPO). The lengthy and costly process of ensuring regulatory compliance in different jurisdictions often makes the IPO format unfeasible for small companies. Thus, the ICO method of fundraising is far more attractive as a means of crowd funding for the project. But at the same time, an ICO is certainly riskier for the investor.
It is important to note the different stages of the token sale. Token prices generally escalate the closer the token gets to its listing date. Projects often seek funding from angel investors even before the date of the private pre-sale is set, though some ICOs do go straight to pre-sale. After potential initial investment has been sought from angel investors, pre-sale begins. Usually there will be a 15–30% discount from the public sale price. The main-sale begins after the pre-sale has concluded. At that time, normal everyday crypto enthusiasts, with no connections to the team, may buy into the project at pretty close to the ground floor price. Angel investors and pre-sale investors sometimes receive quite large discounts from main sale prices, but their tokens are locked up for varying amounts of time, to prevent dumping, or selling all their tokens for a quick profit at the time of listing. Today the vast majority of ICOs make use of the Ethereum blockchain and the ERC-20 token. The very first token sale was arranged by Mastercoin, a Bitcoin fork, in July 2013. Ethereum soon followed in early 2014, raising 3700 BTC in only 12 hours (equivalent to $2.3 million at that time, and just under $35 million today). Before late 2015 there were sporadic ICOs, with Augur, NXT and Factom all successfully raising funds. 2016 was the year that the ICO format grew to truly disrupt the Venture Capital industry. There were 64 ICOs in 2016 which cumulatively raised $103 million USD.
Tremendous Success & Why Real World Case Study
The ICON (ICX) Initial coin offering is an example of a project that reaped the rewards of a token sale done with precision of execution and clarity of vision. The project promised to build a world-wide decentralized network that would allow Blockchains of different governances to transact with one another without a centralized authority, and with as few barriers as possible. ICX offered fair and clear tokenomics, with 1 Ether buying 2500 ICX, and with 1 ETH costing approximately 250 dollars when the ICO began on September 18th. 50% of the total amount of tokens were put up for public sale, 400,230,000 out of a total of 800,460,000, equating to a fundraising goal of 150,000 Ether. One of the core reasons for the project’s spectacular success was the incredibly distinguished background of those involved, and the foundation the project had in many years of stellar achievement. ICON was originally a project developed by “The Loop”, a joint venture between DAYLI financial group and three Korean Universities. They lead the Korea Financial Investment Blockchain Consortium, one of the largest organizations of its kind in the world, boasting members including Samsung Securities. The Loop had already implemented Blockchain solutions for high profile clients well before ICX was born, including completing a KYC/AML authentication smart contract platform for Korea Financial Investment Consortium.
Real World Example of Failure & Why Case Study
The risk involved in starting your own company is huge. Over 75% of startups eventually fail, according to the Harvard Business School study by Shikhar Ghosh. The study’s findings show the rate of failure for new companies is roughly 50% after 5 years, and over 75% after 10. Shikhar Ghosh identifies the following issues as the most common factors in start-up failure: -Insufficient Market Demand -Insolvency -Wrong Team -Got beat by competition -Pricing/Cost issues -Poor Product -Need for or Lack of business model -Ineffective Marketing -Disregarding Customer desires The statistics concerning rate of failure for conventional business startups pale in comparison to the number of crypto startups that fail according to Tokendata. They are one of the most rigorous ICO trackers, recording 46% of the 902 ICO crowdsale projects initiated in 2017 as failing by the time of writing. Of these 46%, 142 collapsed before the end of the funding stage, and a further 276 had either “exit scammed” (took the money and ran) or slowly faded into eventual obscurity. With no shortage of failed and abortive projects to look into, we thought it would be more helpful to look into an ICO that was mismanaged and unsuccessful in terms of its execution, rather than being fraudulent, or terminally mismanaged.
Real World Example of Failure & Why §3
Tezos was designed as a “new decentralized Blockchain that governs itself by establishing a true digital commonwealth”. The project was a partnership between the husband and wife team of Kathleen and Arthur Breitman, and a Swiss foundation run by Johann Gevers. They had a novel idea of “formal verification”, a technique that mathematically proves the veracity of code governing transactions and heightens security of smart contracts. That idea was wholeheartedly endorsed by investors, resulting in $232 million USD raised in the 2017 crowdsale. Trouble arose after the Breitmans asked the head of the Swiss foundation they were in partnership with to step down. In Gever’s words, the Breitman’s were attempting “to bypass Swiss legal structure and take over control of the foundation”. The resulting 6 class action lawsuits that were spawned from the wreckage of one of the most successful ICOs of all time have yet to be fully resolved at the time of writing, though Gevers has stepped down and a new leadership team is in place. The Tezos Network has a prospective launch date of somewhere around Q3 2018. The debacle, though not terminal to the prospects of the Tezos network, provides a cautionary tale about the need for a clearly defined leadership structure and plan for the allocation of funds after an ICO. It is entirely possible that the Tezos project could have ridden the late 2017 market euphoria to sit near the top of the cryptocurrency hierarchy if boardroom strife could have been avoided.
Real World Example of Failure & Why §4
Projects often also “pivot” from one focus or project to another. More often than not, teams change the project name entirely, even while retaining the same core team, to try for a successful venture one more time. One such project is Chain Trade Token (CTT) which, while technically speaking, not yet a “deadcoin”, shows all the signs of shutting down operations within a few months, and “pivoting” into a new project. The CTT project aimed to be the “first blockchain-based platform for the trading of futures and options on food and raw materials (aka commodity derivatives)”. But through a combination of a non-existent social media presence, and a distinct lack of urgency in securing listings beyond decentralized exchanges, the lofty ambitions of the top-level team were left unrealized. The team has supposedly split their operations from solely Chain Trade, to a former business endeavors, and the Nebula Decentralized Exchange. The project leaders then offered a 1-for-1 token swap which has been accepted by the vast majority of CTT holders.
The ICO Process
Before even researching the particular strengths and weaknesses of any specific project in which you may want to invest, it is important to know the overall processes of the ICO crowdfunding method. This will allow you to avoid any potential pitfalls if you do decide to move forward and invest money into a particular idea or project. How does an ICO happen? Stage One: Token sale details are set: This takes place usually after release of the whitepaper, and the presentation of a project to prospective investors in forums and on social media. Stage Two: Whitelisting for private sale begins: The vast majority of all ICOs have instituted KYC checks for investors which usually involve uploading a photograph of your passport or driving license along with a selfie holding the ID. Did you know? Participation in ICOs has proven to be a regulatory nightmare in some localities. Most token sales restrict contributions from investors in China and the USA entirely, though accredited investors may participate in the USA in some cases.
Stage Three: Private/Pre-sale states: Typically, 10% of tokens will be offered to early investors at a 10–30% discount. These select few investors will likely have a close association with the team. But not all projects have a pre-sale round, some go straight to public sale. Stage Four: Whitelisting for Public/Main sale starts: The same format used for pre-sale investors is used for public sale investors, though it is a regular occurrence to see main sale KYC checks closed early due to overwhelming demand. An investor must then register a contribution wallet address. That is the address used to send cryptocurrency from, to buy the ICO tokens, and then also into which you will receive your purchased tokens. This wallet address must be a non-exchange wallet, like Blockchain.info bitcoin wallet, or MyEtherWallet for ERC-20. You already understand from the prior lesson that making a mistake with your wallet address may mean you lose the tokens forever as well as the BTC or ETH you used to purchase them. Copying and pasting your cryptocurrency public key into the whitelist wallet form is the next task to complete. And then, as the investor, you wait for confirmation of successful ICO registration from the team.
Stage Five: Public sale starts: Commonly on a specific date, though sometimes for a specific period of time. If you are interested in participating in an ICO, it is important to make your contribution as quickly as possible, or you risk sending your ETH or BTC after the hard cap has been reached, resulting in your funds being sent back. This refund can sometimes take many days, or even weeks in times of high market activity. Did you know? In 2017 it was not unheard of to find ICOs that had originally scheduled their ICO period for many weeks, but then they met with such high demand that they could close their crowdsale in a matter of hours or even in just a few minutes!
Stage Six: Tokens are allocated to successful participant investor wallets, and trading can begin on some decentralized exchanges like IDEX, or EtherDelta in the case of Ethereum based tokens. Tokens will be sent to and received by the wallet addresses from which the investor contributions were made. Stage Seven: Tokens are listed on mainstream exchanges: The tokens will then be listed on the exchanges with which the teams have negotiated listing, prior to or during the sale. It can cost huge amounts of money to list on large exchanges like Bitfinex Bittrex, Huobi or Binance, so usually smaller projects will not be listed on top 10 exchanges so quickly. As tokens are listed on more and more exchanges, their price usually rises because more and more investors are exposed to opportunities to buy that particular token.
Evaluating a Blockchain Use Case
Evaluating a particular use case for Blockchain technology, and thus how successful an ICO project’s ambitions might be in a particular market, is not a simple endeavor. As demonstrated in the graphic below, Blockchain technology has nearly limitless potential to be applied to a great variety of business areas, but as an ICO investor, you are looking for projects that have the potential to deliver significant long-term success. In the currently saturated ICO environment, some use cases have more potential than others. Ascertaining which use case is likely to have long term success is a key distinction. Also, we must recognize that businesses and corporate entities may be overeager to experiment with this new Blockchain technology, whether or not usage of the technology is actually advisable or profitable for their particular purpose. The main questions to ask when analyzing specific solutions proposed by the project are: What are the problems posed and the solutions offered? Does this particular area of business need a Blockchain solution? That is, is a Blockchain solution in fact superior to the current way this particular business operates? Is the use of Blockchain in this specific instance feasible and applicable? What are competitors doing about Blockchain projects in this same area?
A Blockchain network provides a shared, replicated, secured, immutable and verifiable data ledger. The implication for use case analysis: Shared and replicated: participants have a copy of the ledger and many people can view it or work on it Secured: Secured through cryptography Verifiable: Business rules are associated with all interactions that occur on the network Immutable: Transactions (records) cannot be modified or deleted, therefore a verifiable audit trail is maintained by the network So, with all this considered, what should we look for with regard to a possible business use case that would be best solved using Blockchain technology? 1. Data exchange that has trust issues i.e. businesses transacting with one another. Trust must be established through a multitude of verification processes with regards to employees and products. These processes increase operational cost. Example: Digital voting. 2. Any potential business process involving data storage, or compliance and risk data that get audited. Blockchain solutions would provide the regulators a real-time view of information. Example: Supply chain solutions like VeChain or WaltonChain. The possibility of close to zero operational loss would of course be attractive to any business. 3. All kinds of asset transactions. A Blockchain network, with its tamper-proof ledger, validating traceable and trackable transactions, could save many different industries untold amounts of money. Example: Tokenization of assets e.g. Jibrel Network or Polymath
Purpose of Tokens
Within the cryptocurrency ecosystem, the definition and role of a token iswidely understood. They represent programmable units of currency that sit atop a particular Blockchain, and they are part of a smart contract “logic” specific to a certain application. In the business sphere, a token can be defined as a unit of value that a project or business venture creates to enable it to self-govern. And the business venture also allows token users to connect and collaborate with its business products, while facilitating the sharing of rewards to all of its stakeholders. A token can also be described in a more general sense as a type of privately issued currency. In the past it was solely within the purview of governments to issue currency and set the terms of its governance. With the advent of Blockchain technology we now have businesses and organizations offering forms of digital money over which they, not the government or central bank, have control of the terms of operations and issuance. Wide scale adoption of these mechanisms could fundamentally alter the global economy. This is like the creation of self-sustaining, mini-economies in any sector of business or life, via a specific token or currency.
Fun Fact: Tokens of the particular Blockchain upon which the project is launched will usually have to be bought in order to be exchanged for ICO tokens, hence it is important for traders and investors to be aware of the schedule for upcoming ICOs. ETH is usually the token used for exchange because the majority of ICOs launch on the Ethereum Blockchain. But this is not always the case. During January 2018, two NEO token ICOs, both the Key TKY and Ontology ICOs, were being carried out, and this caused the NEO cryptocurrency to spike to its all-time high in excess of $160 USD. Since the product or project is more often than not in its embryonic stage at the time of the ICO crowdfunding process, the ICO token’s true function and purpose is in most cases yet to be realized. At the ICO stage the tokens can usually be grouped together into one of three categories. Knowing how to distinguish these categories involves determining the specific nature and function of the token around which the project is centered. The main and crucial distinction, is whether or not a token is a security, and therefore subject to securities registration requirements.
ICO Stage Token Categories
Howey Test: This is the test created by the US Supreme Court to ascertain whether certain transactions qualify as “investment contracts”. If they are found to fall within this classification, then under the Securities Act of 1933 and the Exchange Act of 1934, those transactions are considered “securities” and participants must adhere to registration and disclosure requirements. One of the most important and amazing considerations of the effect of Blockchain technology is that normal people with a computer science background are now empowered to make decisions and offer products and services that previously only licensed financial institutions were able to do. This is a very complex and complicated situation with serious ramifications for anyone involved. One thing to note well is that ordinary participants and actors in this arena can easily commit white-collar crime, violating serious securities laws, without even realizing it. If a token falls within the US legal definition of “Investment Contract” then you must adhere to US regulations. For that reason, many ICOs simply do not want to sell to US based investors, perhaps until all the rules and regulations are clarified.
Security Tokens
The broad and varying definition of the term “security” is a regulatory minefield. This has always been true for traditional financial products, and now it is especially true for the as yet unregulated cryptocurrency market. In the case of SEC V. Howey, parameters were established to determine whether or not a particular financial arrangement could be classified as a security and thus be subject to securities regulations. Cooley LLP Fintech Team Leader Marco Santori has said, an arrangement is a security if it involves “an investment of money, and a common enterprise, with the expectation of profit, primarily from the efforts of others.” Investors have the option of accessing a huge range of security tokens through ICOs. Prime examples are the gold backed DigixDao (DGD) and CProp (still in crowd funding stage). A security token is fundamentally different from the currently available ICO project tokens in that it provides a legal and enforceable ownership of a company’s profits and voice in its governance much like common stock traded on any exchange. If security tokens are the next step in the evolution of crypto-finance, real estate, stocks, venture capital, and commodities can all be tokenized. The traditional markets could be fully connected to the Blockchain. Financial assets would available to anyone in the world, not just licensed or accredited investors. That is one aspect of Fintech, the financial revolution taking place today, as Blockchain technology clashes with traditional finance.
Equity Tokens
One exciting application of smart contracts on the Ethereum Network is the potential for startups to distribute equity tokens through initial coin offerings. That would reduce the hurdles that an average person has to face in order to take part in the early stages of a company’s development. And, democratic governance of a project could be conducted in a transparent manner through voting on the Blockchain. As of yet, few startups have attempted to conduct equity token sales for fear of falling afoul of the Securities and Exchange Commission (SEC) in the US. But many Venture Capital insiders are bullish on the prospect of equity tokens taking a central role in the crypto finance industry, when and as the legal issues are resolved. For example, the Delaware State legislature recently passed a bill enabling companies to maintain shareholder lists on the Blockchain. That is one major step to enable Blockchain based stock trading. Lawyers also generally believe it is only a matter of time before the regulations are clarified. Did you know? Important consideration: The Sarbanes-Oxley Act of 2002 made it unfeasibly expensive for smaller companies to be listed on exchanges, causing a halving in the number of IPOs between 1996 and 2016 (7322 to 3671). In 2017 there was an almost 5-fold increase in the number of ICOs, from 43 to 210, with the 2017 volume already being eclipsed in the first 5 months of 2018.
Utility Tokens
However, given that this area is still a regulatory nightmare for people planning to issue security and equity tokens, many projects attempt to ensure that the tokens within their specific model fall under the definition of Utility Tokens rather than securities, so as to avoid the SEC regulations altogether. If a token is imbued with a certain functionality and use within the Blockchain infrastructure of that particular project, the token can avoid being labelled as a security, and thus render SEC regulations inapplicable. Just this week in fact, the SEC made the long-awaited and momentous decision that Ether was not a security. In the words of William Hinman, director of the Securities and Exchange Commission division of corporate finance, “Putting aside the fundraising that accompanied the creation of Ether, based on my understanding of the present state of Ether, the Ethereum network and its decentralized structure, current offers and sales of Ether are not securities transactions.” This means that Ethereum, in fact, fails the Howey test, which is exactly the decision the crypto world wanted. Hinman said, “When the efforts of the third party are no longer a key factor for determining the enterprise’s success, material information asymmetries recede,” Hinman said. “The ability to identify an issuer or promoter to make the requisite disclosures becomes difficult, and less meaningful.” We will now cover various use cases that projects have been adopting up to now in order to get their tokens classified as utility tokens rather than securities.
Voting Rights
Some coins portray themselves as a company with tokens being held in a way that is analogous to voting shares of a stock. One coin held is equal to one vote. This form of token utility has a major flaw in that so-called whales (people with huge amounts of a particular cryptocurrency) can manipulate any poll conducted. The cryptocurrencies Aragon and Lykke are examples of projects that have written voting rights into the structure of their code. In-App Reward: Another common tactic to evade the security label has been the addition of in-app rewards to the functionality of a particular token. The Basic Attention Token (BAT) is the unit of currency for use with the project browser named “Brave”. The BAT is a unit of account for the advertisers, publishers and users of the platform. Filecoin, the cloud storage project that raised a record $257 million through their ICO, pays other people or companies for use of their spare storage space. Some of the many rights afforded to token holders in various Blockchain projects are described by the graphic below.
Token Roles Function
The token can be used as a mechanism through which user experience is enhanced, enabling such actions as connection with users, or joining a broader network. It may also be used as an incentive for beginning usage or for on-boarding. Examples include Dfinity and Steemit. Value Exchange: In its most basic usage, a token is a unit of value exchange within a specific app or market. This usually is made up of features that allow users to earn tokens through real work or passive work (sharing data, allowing use of storage space) and to spend them on services or internal functions within the specific market ecosystem created by that organization. Augur and KIK, amongst countless others, are projects that have implemented this functionality into their tokenomics. Toll: The token can also be used for getting onto the Blockchain infrastructure, or for powering decentralized applications run on that particular Blockchain. This ensures that users have “skin in the game”. Tolls can be derived from running smart contracts, paying a security deposit, or just usage fees. Examples include Bitcoin and Ethereum. Currency: Seeing as the particular platform or app is designed with a view towards functioning in synergy with a particular token, the token is an extremely efficient means of payment and transaction engine, resulting in frictionless transactions. This means that companies can become their own payment processors and no longer have to rely on the often unwieldy stages of conventional financial settlement involving trusted third parties in the form of banks and credit card companies.
Rights: Owning a token bequests certain rights upon the holder, such as product usage, voting, access to restricted markets, and dividends (e.g.: GAS for holding NEO). Though most businesses are trying to avoid fitting the definition of a security laid out in the Howey Test, the right to real ownership of a particular asset is sometimes granted as a result of holding a token, for example DigixDAO or Tezos.
Comparison to Traditional IPO and Equity Capital Raisings
Despite the similarity of the acronyms and the derivation of one from the other, Initial Coin Offerings and Initial Public Offerings are very different methods of fundraising. The distinction is not limited simply to the fact that IPOs are used in conventional business, and ICOs are associated with cryptocurrency. Through ICO’s, companies in their early stages issue digital tokens on a Blockchain and those tokens act as units of value for use within the ecosystem created by the project. They have many other uses, but it is also fair to say they are analogous to shares offered in an Initial Public offering.
In an IPO, shareholdings are distributed to investors through underwriters, usually investment banks. But in the case of ICO token sales, companies often do not even have an actual product to show. Often, all that there is a whitepaper, evidence of the partnerships involved and the particular social-media infrastructure they have established. IPO’s take place when a more well-established company floats shares on a stock exchange. The company would have a well-established history of success and significant reasons to expect a bright future. In the vast majority of cases, an ICO is used for a new company with no such history, just trying to get off the ground.
Another important difference is the expected return in exchange for the investment. Companies engaging in IPOs may offer participants dividend paying stocks which result in various levels of return depending on the success of the company after the shares are issued. An ICO however can offer no such guaranteed return. When buying tokens in an ICO, you do so with no promise of return. An investor who holds the tokens of a particular project does so with the promise, rather than an assurance, of future success. The main benefit to investors taking part in Initial Coin Offerings, compared to Initial Public Offerings, is the need for only basic Know Your Customer checks in the case of the ICO, compared to the costly, complex and time-consuming regulatory obstacles that must be traversed in an IPO. In the case of Initial Public Offerings, a business must obtain authorization from a number of entities before the act of “going public”. Prior to an IPO, companies are not obliged to disclose so much of their internal records or accounting. It is not so complicated to make a private company in the United States. But in the run up to going public, the company must form a board of directors, make their records auditable to the relevant authorities in one or more jurisdictions, and prepare to make quarterly reports to the SEC (or equivalent).
Relevant Factors to Consider in ICO process
When analyzing the chances of success for a specific project, and the likelihood of a favorable return on investment in the long term, it is essential to break down the project into its constituent parts, and evaluate the strengths and weaknesses of each part individually. An effective investigation and analysis would start with the team and white paper. Consider the stage the project is at,and VC investments in the project. That would lead to a good initial idea of the actual progress thus far. Next, evaluate the social media presence and the credentials of the community that has formed around the core team. If a compelling case is made by the team, (e.g.: via an in-depth dive into the use case), and the tokenomics, distribution schedule, potential competitors, as well as the team’s awareness of any future business or regulatory concerns all check out; then the ICO might present a good opportunity for investment. In the following slides we tackle each of these considerations in order so you will be able to evaluate an ICO’s worth and assign a grade for the success of each project.
Relevant Factors to Consider in ICO process
The Team First and most important, we need evaluate the background and experience of the team, the people involved in the project. Well-established developers, for example, will likely have LinkedIn profiles demonstrating their previous endeavors and occupations, from which we can judge their suitability to the project and the likelihood of the team’s success. The LinkedIn profile is a point of reference for professional accomplishments and official positions. But we can also learn more about a person from their personal accounts on Twitter, Facebook, and Medium etc. That is also a good way to follow along with the progress of the project. By investigating team members through as many means as possible, you will know how long they have been involved in cryptocurrency. If they have been around and active for a long time, they are that much more likely to be knowledgeable and capable of making better quality decisions in this business. It goes without saying that it is a huge red flag if it is too difficult to find information about the team members online, and worse still if the team members are anonymous.
Relevant Factors to Consider in ICO process
A good Whitepaper gives a detailed description of the project, the problems the team is going to solve, the timeframe projected, and methods to be used in the implementation of their ideas. If, in answering the question about what the project actually does, it seems the team is presenting ideas that are too complicated or advanced to understand, then you simply should not invest until you are satisfied you have been given the requisite level of insight to understand the concepts described. It is always possible that the whitepaper is nothing more than a salad of buzzwords and technical language intended to give the impression of competence while really doing nothing but obfuscate the truth. The whitepaper should clearly and concisely present the problems and the solutions needed. The whitepaper must give a solid and coherent answer as to who needs this project and why. Also, if the team have put no effort into explaining why a Blockchain solution is needed for this particular problem, or why such a solution is superior to its “real-world” equivalent, it is likely they are only in it for the money. We have more to say about red-flags later.
While 2016 raised a comparatively small amount in comparison to the proceeding years, there were a few specific projects that raised significant amounts of capital. These are respectable amounts of money, even by today’s standards, and especially impressive when contrasted with the immaturity of the ICO market at the time, and relative to amounts raised in traditional IPOs. Waves ($16.4mill), Iconomi ($10.6mill) and Golem ($8.6mill) were the three largest fundraisings of the year. 2017 was the year of the ICO whales. Hdac ($258mill), Filecoin ($257mill), EOS Stage 1 ($185mill) and Paragon ($183.16mill) were the largest that year. To be able to raise so much money, so quickly, in such a new market, using such a new mechanism is truly incredible. 2017 was the year that proved ICOs are for serious individuals and institutional investors as well. We have also had some phenomenal amounts raised so far in 2018. Telegram ($1.7bill), Dragon ($320mill), Huobi ($300mill) and Bankera ($150mill). Telegram might be the first mainstream example of an ICO, not only by raising close to $2billion, which would be beyond incredible and impressive even by traditional IPO standards; but also, because it is one of the first ICO companies to tangibly put a product in the hands of hundreds of millions of users, and successfully compete against traditional companies such as Facebook (MessengeWhatsApp), Microsoft (Skype) and Tencent (WeChat).
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Bitcoin + IRS, SEC Bitcoin ETF, Binance In China, Ethereum Use Case & Bitcoin Price Rise Bitcoin Btc Binance This Model Helps Predict The Rise And Fall Of Bitcoin! The Crypto J-Curve Explained Bitcoin Price Jumps +15% - What's next? Altcoins’ Correlation With Bitcoin to Increase  Crypto ... Here’s What Could Propel Bitcoin to $7K  BTC Price After Halving, Coronavirus and Decentralization

A long-term technical line, which served as strong price resistance four years ago, is capping the upside in bitcoin’s (BTC) price. That line, the 50-week moving average (currently at $5,477) was breached earlier this week. The breakout, however, was short-lived with prices falling more than 5.5 percent to hit a low of $4,991 yesterday, possibly […] Bitcoin Price Sees First ‘Golden Crossover’ Since 2015 View Bitcoin’s daily chart is reporting a “golden crossover” – a bull cross of the 50- and 200-day moving averages – for the ... A 2015 study found a strong correlation between the Google Trends data and BTC price, while a May 2017 study concluded that when the U.S. Google "Bitcoin" searches increased dramatically, BTC ... Bitcoin price has risen to new monthly highs. The price made a historic jump in January. It has risen about 10% this week alone and about 30% since December. Recent data points to the Bitcoin ... Bitcoin Price Future. It is still uncertain about the future of bitcoin and bitcoin’s price, it could rise up to $1,000,000 or it could fall back down to $0. It is actually not a known fact by anyone. Judging from history though, the digital currency has been extremely volatile. But if one was to look at its recent boom, and a forecast made ... Bitcoin’s price action this year may be dismal, but it might not be without precedent.. Having hit a record high near $20,000 di bulan Desember, the world’s largest cryptocurrency began 2018 backed a wave of optimism.Dari dulu, namun, it hasn’t translated this into gains for investors. Agak, the price appears to be following a pattern last seen ahead of a bullish reversal from September ... Bitcoin’s price action this year may be dismal, but it might not be without precedent.. Having hit a record high near $20,000 i december, the world’s largest cryptocurrency began 2018 backed a wave of optimism.Siden da, imidlertid, it hasn’t translated this into gains for investors. Hellere, the price appears to be following a pattern last seen ahead of a bullish reversal from September ...

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Bitcoin + IRS, SEC Bitcoin ETF, Binance In China, Ethereum Use Case & Bitcoin Price Rise

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