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Bakkt is going live with testing in July

Crypto has changed forever, and the future is going to be very interesting.

 

After months of delays, Bakkt will finally go live – with user acceptance testing, but still live – on 22 July.

 

This is a big step, and the company has made a lot of it in their recent blog post. With more than a nod to the moonboy crypto community, they note that it’s two days after the 50th anniversary of the first landing on the moon, and call their platform a ‘moonshot’. While it’s ‘no small step’, in their words, they also make it clear that Bakkt is a grounded and down-to-earth solution.

 

They’re right about that. Bakkt is a big deal. It’s going to be the best way for institutional money to come into bitcoin. Institutional investors have already started to buy bitcoin, recognising the huge opportunity that lies in crypto. We have seen recent analysis that shows ‘Firm-sized accounts’ of 1-10k BTC picked up 450,000 BTC since the December 2018 bottom, clearly accumulating in anticipation of an ongoing bull market. But these are not the ‘institutions’ Bakkt is targeting.

 

The difference of Bakkt is that it offers an end-to-end regulated solution, including custody – actual storage of bitcoins. It’s fully compliant in every respect. That means any institution can use it without fear of the legal grey areas that plague other solutions. Think about it: if you’re a company looking into buying crypto, where do you go? There are a handful of semi-compliant solutions, but they’re not particularly accessible, the fees can be high and liquidity low, and they may not be workable for US-based firms. Bakkt will change that forever.

 

There’s an interesting dynamic about Bakkt that hasn’t been talked about much. It will pull supply off the market, but it won’t put much (if any) back on, not for some time anyway. Bakkt will access bitcoins from miners and the wider market – making sure they know exactly where they come from – but existing bitcoin holders won’t be able to sell their coins on Bakkt. Add that to the fact that the institutions using Bakkt will be first-timers who want a chance to get into bitcoin and can’t sell their BTC until they actually buy them on Bakkt in the first place, and you can see that there’s going to be a lot of net demand for bitcoins.

 

All of which means that 22 July may very well be the day bitcoin’s rocket launches, even if not when it actually lands on the moon.

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Big money has been accumulating crypto

Institutional investors have been scooping up ‘massive amounts’ of digital assets at depressed prices.

 

It’s been a rollercoaster ride for BTC, with April’s shock reversal leaving traders little time to pick up BTC at low prices. But it turns out that large investors – institutions, big money, smart money, call it what you want – has been accumulating crypto on a grand scale. As one analyst puts it:

 

According to a recent report for diar – a data analysis company which provides expert insights into the global digital currency industry, Bitcoin supply holdings have shifted ever since reaching the recent bottom. The most significant pattern that has emerged is that of Institutional investors scooping up massive amounts of digital assets at these discounted prices.

 

The transparent nature of the blockchain means it’s possible to track where bitcoins are moving, and the size of the wallets holding them. The report includes four charts that show the recent dynamics.

 

Firstly, the largest accounts – exchanges’ cold storage – have shed over 600,000 BTC since the December bottom. While small ‘Retail’ accounts of up to 100 BTC have collected some of these, the largest gainers have been the ‘Firms’ with between 1,000 and 10,000 BTC. They have added more than 450,000 BTC to their books overall.

 

Secondly, Firm-size addresses began piling in money at the end of last year, which showed up in the growth of larger addresses a few months back.

 

Thirdly, since the start of the bear market in January 2018, there has been a 26% increase in addresses with 1-10k BTC. Big money accumulates when the price falls, and sells when it rises – exactly the opposite of what retail traders tend to do.

 

Lastly, while Retail holders have held steady at around 38% of total BTC, exchange holdings have dropped from 20% to 16%, and Firms have picked up all of this 4%.

 

There are a couple of take-home messages from this.

  1. The rally has not been driven by Retail demand. Retail investors haven’t got back in yet – they probably won’t until at least $10k.
  2. Exchanges are distributing coins. What happens when their supply starts to dry up but Retail demand is increasing?

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Five things you can do with crypto

Critics say that cryptocurrency is a solution without a problem, but the reality speaks for itself. Here are five real-world use cases for crypto.

 

  1. Payments

Many online and bricks-and-mortar retailers accept cryptocurrency payments. You pay using a mobile phone app, making it almost as fast and convenient as paying with a card or cash.

 

In order to acquire cryptocurrency to make your payment, you will need to sign up to an exchange, submit two forms of id and wait typically 7-10 days for verification, before making a bank transfer to the exchange and buying your crypto. You can then withdraw this to your wallet to spend anywhere you like (so long as the retailer accepts crypto)! Costs including bank transfer fees, exchange rates, trading fees and mining transaction fees will typically be no more than 5-10% of the total amount.

 

  1. Trade to make money!

Cryptocurrency trading can be incredibly lucrative. There are huge sums of money to be made by calling the markets right, especially if you use leverage to magnify your gains.

 

Warnings on popular trading sites suggest that 85-90% of day traders lose money, so you will need to make sure you are one of the 10-15% who don’t get it wrong. (This may take some years of training and practice.)

 

  1. Mix your funds to ensure your anonymity

You can send your bitcoins to a mixer to ensure that no one knows who owns them. Mixers combine your funds with many other people’s bitcoins, then pay them out to new addresses so that it is difficult or impossible to find out where they came from. Sometimes they pay them out to addresses owned by the mixer, rather than to their users, and occasionally Interpol raids them and shuts them down because their users are involved in money laundering. Assuming this doesn’t happen to you, you will be able to make completely anonymous transactions (until you cash out your crypto and need to give an exchange your personal details for KYC).

 

  1. Send encrypted messages on the blockchain

Blockchains aren’t just for cryptocurrencies! Some have advanced functionality that allows you to send encrypted messages to other users, meaning you can communicate in private.

 

Although the user experience isn’t quite as polished as existing encrypted messaging apps like WhatsApp or Telegram, it doesn’t take long to learn. The only real difference to the user is that you pay for sending a message using the blockchain.

 

  1. HODL

The easiest thing to do with your crypto is HODL it – in other words, buy it and do nothing with it for many years. Ideally you will simply forget about it.

 

In fact, forgetting about your crypto is good because if you lose your private keys you will not be depressed in 5 years time when BTC is worth $1 million.

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World Series of Crypto trading contest to launch on Waves DEX

Prize money is 5,000 WAVES for the top trader, with a total prize pool of 13,000 WAVES ($30,000).

 

Fed up with no one believing your trading skills? Want to show the world how good you are?

 

The World Series of Crypto (WSOC) trading competition will soon be kicking off on Waves DEX. The event is a free-to-enter, transparent contest powered by Waves’ smart tokens. Anyone can register and receive 100k demo USD (dUSD) in starting money. Then during the competition, participants will trade pairs of demo assets including dBTC, dETH, dWAVES and dUSD.

 

After a week of trading, the competition ends and all assets held by traders are converted to their equivalent spot price in dUSD. Anyone with over the starting money of 100k dUSD is entered into the prize pool. First place takes 5,000 WAVES – around $11,500 – with the other winners collecting a share of the pool.

 

One of the strengths of running a smart-token powered contest on a DEX is the level of transparency involved. Unlike on a centralised exchange, the competition cannot be rigged by the company and the cryptos cannot be manipulated without manipulating the entire underlying market. Waves DEX is almost as fast as a conventional exchange, and centralised matching with blockchain settlement means orders cannot be front-run but remain highly secure. However, just like a normal market, it’s otherwise a free-for-all. Bots are allowed – all that matters is that you are successful.

Applications are open, with registration ending on 19 June and the contest itself running from 20-27 June. You will need the browser plug-in Waves Keeper to participate. To find out more and register, visit https://wsoc.io.

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Bitcoin is the canary in the coal mine

Peter Boockvar, well-known goldbug and bitcoin watcher, says BTC is an early warning for major events.

 

Traders are always watching the news and the markets for hints about where the price of different stocks and commodities will go. The currency markets are driven by rumours about interest rates, economic growth, and geopolitical unrest or uncertainty. Now, Peter Boockvar, a goldbug and exec from wealth advisory firm Bleakley Advisory Group, has added bitcoin to his list of early indicators.

 

Boockvar doesn’t hold bitcoin; he’s a card-carrying goldbug and, he says, would rather just buy that instead. But he has noted the correlation that bitcoin apparently has with gold, and is using that to inform his strategy. ‘I watch bitcoin as a signal, as an indicator, not because I want to own it as I’d rather own gold as an alternative currency,’ he told CNBC.

 

As a safe haven asset, gold is a key commodity to watch in the developing US-China trade war; if the world’s investors believe that this will be harmful to economic growth, they will pull money out of stocks and put it into gold as a hedge. And bitcoin, says Boockvar, is a good early warning for gold itself.

 

‘Over the last couple of weeks, we’ve seen this sharp rise in bitcoin and to me that was saying something in terms of what markets were thinking, about what the Fed was going to do, the turmoil created by the threatened tariffs,’ he explains.

 

Bitcoin has always been used by a minority of traders to park funds in times of trouble – fulfilling its reputation as digital gold – and to circumvent capital controls, most notably in China. But Boockvar’s analysis suggests that it is now used widely enough to factor into traders’ broader decisions, sending hints about where the market is heading.

 

In other words, bitcoin acts as a kind of hypersensitive warning signal for the markets – the ultimate canary in the coal mine when it comes to economic slowdown, downturn or recession.

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Warren Buffett to have lunch with TRON founder

Will rat poison squared be on the menu?

Here’s a fun development. TRON founder and BitTorrent CEO Justin Tron has paid over $4.5 million to sit down to a steak lunch with legendary investor Warren Buffett.

 

The prize of a meal with the world’s most famous investor was part of a charity auction for the Glide Foundation, which helps the poor, homeless and those with various addictions. Buffett has been involved with the charity for many years, and this is the twentieth year he has agreed to have lunch with whoever stumps up the most cash. So far so good. But here’s the really cool bit.

 

Buffett does not like bitcoin. He really, really hates it – though he has started to come around to the idea of blockchain potentially providing some useful service to society. Here are some of the things he has said about bitcoin and crypto in the past:

  • It’s nothing more than a ‘gambling device’.
  • It has ‘no unique value at all. It doesn’t produce anything. You can stare at it all day and no little bitcoins come out. It’s a delusion basically.’
  • It’s ‘rat poison squared’.
  • ‘Cryptocurrencies will come to bad endings.’

 

Buffett has admitted he doesn’t know much about how cryptocurrencies work. And Justin Sun has said he’s a big fan of Warren’s long-term value investment approach. So when he and seven of his crypto-industry friends sit down to a steak – presumably without rat poison – it’s going to be an interesting opportunity to educate the world’s most successful investor about blockchain.

 

In a Medium post, Sun writes:

The long-term value investment strategy and cryptocurrency, in my eyes, are one and the same. We in the community know we have a long road ahead of us to educate the mainstream on blockchain’s value and proper use cases. Rather than trying to get rich quick, we aim to counsel everyone that investment should be about vision and execution.

I look at the upcoming lunch with Buffett as an opportunity to seek mutual understanding and growth. To aid in the conversation and support the overall cryptocurrency and blockchain community, I will invite several industry leaders — with your input — to accompany me to New York City for the lunch.

 

From one perspective, it looks like Sun just paid $4.5 million for him and his mates to spend a couple of hours trolling Warren Buffett on bitcoin. From another, it’s an olive branch from a successful blockchain company to an insanely successful but skeptical investor.

 

We’re looking forward to seeing how this one turns out.

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Dr Robin and Professor Bär take battle for recognition as Bitcoin creator to court

The two were close friends throughout their childhood, but an acrimonious dispute over the origins of Bitcoin – fuelled by allegations of drug-taking and sexual rivalry – has driven a wedge between them.

 

While the crypto world is still trying to grasp the implications of recent claims concerning Satoshi Nakamoto, another battle is raging in the courts over the prize to become publicly accepted as Bitcoin’s creator. Edward Bär and Christopher Robin, once inseparable friends who lived and worked together, have become mired in a seemingly intractable legal battle concerning the origins of the world’s foremost cryptocurrency.

 

Dr Robin, now a well-known but controversial tech entrepreneur, claims that he created Bitcoin with Professor Bär shortly after the two left university, where they studied on the same higher mathematics course.

 

‘By claiming to be Satoshi Nakamoto, Bär has overstepped the mark once too often,’ commented Dr Robin in a rare public statement outside the London courthouse where the trial is being heard. ‘He has taken credit for my ideas too many times in the past, but claiming to be Bitcoin’s creator is beyond the pale.’ Asked why he does not simply prove it with a signed message using the keys from the Genesis block, Robin is clear: ‘This is about the law, not maths. It’s a matter of intellectual property, not sums. You don’t bring a knife to a gunfight. This is happening in court and “Pooh” as his few friends know him, is going down.’

 

‘Personal’ rivalries

Speculation about the acrimonious feud between the two friends have been fuelled by reports from sources close to the pair that their argument is personal as well as professional. ‘It started when they were living together in the same student flat,’ commented Ms Kinga Roux, who has known them both since childhood. ‘There was a lot of drugs and partying, and on at least one occasion Bär slept with Robin’s girlfriend. Robin was livid but did nothing at the time because they were working together on an early version of what would ultimately become Bitcoin. He needed Bär’s help.’

Professor Bär, for his part, claims that he was far more than the ‘helper’ to Robin: he was the chief architect of the project. He was the one who wrote the white paper and the original Bitcoin code, he maintains, while pursuing a successful career in academia. Robin was no more than an editor and occasional consultant, according to his version. ‘Robin stole the ideas for Bitcoin from me, pure and simple – #IamSatoshi’, he wrote in a recent tweet. ‘I have the private keys to the Genesis block, I could prove it whenever I wanted,’ he explained in a separate blog post. ‘But the world does not need cryptographic proof of the identity of Satoshi. It needs legally-enforced recognition. That’s all that matters.’

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Peter McCormack could be on the hook for £100k+ in CSW libel case

One of our favourite crypto voices, UK podcaster Peter McCormack, is being sued by Craig Wright for calling him a fraud over his Satoshi claims. Peter has a big decision to make before tomorrow about the direction he will take the case.

 

There are plenty of people who have called Craig Wright a liar, scammer and a fraud. Many have been anonymous, or attempted to remain anonymous – like @hodlonaut, a European who has also been the target of Wright’s legal rage. Others have lived in unfriendly jurisdictions. Peter McCormack, a bitcoin trader, blogger and podcaster, happens to live in the same jurisdiction as Wright: the UK. He’s a publicly-known figure, and he has publicly called out Wright about his claims to be Satoshi. As a result, Wright is suing him in the UK courts for £100k.

 

McCormack has a critical decision to make before tomorrow. As he writes in a long thread about the case on Twitter:

1/ People have been asking for an update on the legal case with CSW, so here it is. I am being sued for libel and have until Friday at 12.00 to make a decision. The claim is for £100k and includes a number of other requirements.

 

2/ The options at present are:

– Represent myself

– Represent with legal counsel

– Compromise through mediation

– Do not contest

 

3/ For full support from an expert lawyer, the cost for the initial defence is estimated at around £25k – £50k. If this goes to a full trial, the worst case to defend would be £500k – £750k. If I lose, it could be double that as I would have to pay CSW’s legal fees (£1.5m).

 

McCormack continues, explaining some of the issues around the case. It is difficult to prove a negative – that Wright is not Satoshi – and it appears that the UK legal system would not require Wright to prove that he is Satoshi to settle in his favour. Fighting the case will be expensive, and ‘9/ Many have offered money to support the case but I have never wanted to take the money from individuals. This is your Bitcoin and I did not want this to go to lawyers.’ Moreover, he is fighting people with ‘very deep pockets’ who will not hesitate to stoop to intimidation and harassment.

 

In short, Wright holds most of the best cards, merely because he has more money, thanks to wealthy backers like Calvin Ayre, who has a vested interest in maintaining that Wright is Satoshi. Due to the way the law works, other cases in the US cannot be used in the UK in this instance – even if they show that Wright is not Satoshi, or has lied in court (for example, by providing faked documentation).

 

This is a classic case of the little guy getting smashed by the big guy, even though he is right and everyone knows it. We hope that Peter will change his mind about crowdfunding his defence. We hope that he will accept the goodwill of the crypto community who want to see Wright taken apart in public and ultimately have this matter settled, once and for all.

 

This ‘I Am Satoshi’ nonsense has gone on long enough.

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Signs your crypto might ‘default’

Finnish researchers have looked at the factors that can predict the failure of a cryptocurrency project – or, as Forbes’ writer puts it, its default.

 

This won’t come as a big surprise to many in the crypto space, but there are certain things you should look for in a crypto if you want it to be around in a few months or years’ time. Researchers from the University of Vaasa in Finland have looked at the chances of a cryptocurrency ‘defaulting’, as Forbes’ Simon Moore, an investment writer, puts it – showing very little understanding of what a crypto is or how it works. To ‘default’ suggests the currency has an obligation to repay you something, and then doesn’t, or that it has assets that it loses somehow… It’s 2019, and the state of journalism around cryptocurrencies is better than it was when we started. But some of these guys. ‘Default’, seriously? But we digress.

 

The paper pinpoints a number of factors that decrease a currency’s long-term chances of success (see how you can put it a different way that still makes total sense, Simon?). These include:

 

  • A strong first day of trading. And Day 1 really is the most important day – after this, the beneficial effects of volatility seem to reduce. A busy first day on the exchange and then a period of stability seems to be one of the marks of a coin that will last the distance.
  • A low pre-mine. A no-brainer, though the research suggests a very low threshold – somewhere in the region of 0.5% pre-mine seems best. (The study includes only PoW-mined coins, not PoS.)
  • A public team is better than having an anonymous founder. Bitcoin is an exception here – usually founder anonymity is a bad sign. Again, it makes it easier to slip away, with or without the money, without facing the consequences.
  • Lower rewards are a good sign. Counter-intuitively, higher rewards point to less chance of a coin lasting – perhaps because ‘investors’ rush in for the short-term benefits, and don’t care about much else.

 

Tick all these boxes, and there’s a decent chance your crypto will last for at least 4 years. And that it won’t ‘default’.

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New York Post want Trump to fix bitcoin

Donald has better things to do with his time, but would be upset that it’s even harder to control a decentralised online protocol than it is to get North Korea to be nice.

 

John Crudele does not like bitcoin. The chap is a ‘columnist and business journalist’ who writes for the New York Post. In the past, he has written several articles about bitcoin – or about his opinion about bitcoin, which is predictably mainstream. This conventional thinking can be seen growing increasingly shrill over the recent months, culminating in this article asking US President Donald Trump to investigate the source of manipulation in the bitcoin markets.

 

Donald probably has better things to do with his time, like the burning need to tame North Korea, and his hair, so it’s unlikely we’ll get Crudele’s wish any time yet – which is an investigation by ‘the Securities & Exchange Commission, the Justice Department, the IRS, Homeland Security and any other agency that will eventually get in on the action.’

 

But if there was an investigation, then what? The US has already legitimised bitcoin itself, with the sale of the Silk Road coins (the US government doesn’t sell illegal goods it seizes, like drugs). And it has created the BitLicense, New York’s regulatory framework for crypto, which many other states are following. So sure, it could make trouble for exchanges on which manipulation occurs, assuming they’re in its jurisdiction. But bitcoin is here to stay: that’s now the official position of the US.

 

Crudele wants bitcoin to disappear. He writes:

‘Federal Reserve Chairman Jerome Powell has said ,’There are investor and consumer protection issues as well’ with bitcoins, Powell told the House Financial Services Committee a year ago. Powell also said cryptocurrencies are not real currencies because they have no intrinsic value. I’ve said the same thing when a bitcoin was selling for $20,000. And still was saying it when it plunged to $4,000. Its real worth: $0.

 

There are always those who are going to be on the wrong side of history. Crudele can share the company of Nouriel Roubini and Warren Buffet.

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Ethereum 2.0 Planned For Launch on the 3rd of January 2020
#Ethereum, #blockchain, #crypto, #cryptocurrency

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