Category: Bitcoin

4 reasons to invest in Bitcoin this year

On By mehranmuslimiblogIn BitcoinLeave a comment

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Yes, Bitcoin price has lost almost 70% of its all-time highs. But the technology itself continues to develop, becoming stronger than ever! Here are 4 main aspects which help Bitcoin to remain a wise way to invest (despite of any corrections).

1⃣Transactions fees have dropped to their lowest levels in seven years 
Not since 2011 was it was so cheap to use Bitcoin, and it promises to become even cheaper in the future. Increasing expansion of the Lightning Network is expected to push fees below 1 satoshi per byte, so long-term transaction would cost nearly negligible amount.

2⃣Bitcoin’s hashrate climbed to its largest in history in May
Data from Blockchain republished on Twitter by trader and commentator CryptoYoda impressed users with theories including miners mining at a smaller profit in order to generate long-term holdings.

3⃣SegWit transactions
This year witnessed mass uptake of Segregated Witness (‘SegWit’) technology, which for Bitcoin users also means lower fees and faster confirmation times. SegWit transactions now make up a greater proportion of the total sent each week than ever before – almost 40%.

4⃣Worldwide bank system lacks trust
Italy and the Eurozone under political pressure and Australia and New Zealand lenders both suffering mass technical outages which cut customers off from their funds. By comparison, the Bitcoin network has experienced 99.9923% uptime since it was launched in 2009. Decentralized cryptocurrency becomes more and more attractive for investors, and that means, that Bitcoin market cap is destined to grow!

The crypto world is a blossoming to be a real game-changer that could change the way we do things. As we speak, applications are being developed to disrupt the current status quo, for the better. Imagine having transparent access to government or organizational activity at your fingertips, or allowing part of your computing power to be shared in the advancement of key scientific and medical projects. A decentralized system allows the masses to leverage each other’s resources and qualities to uplift the community. It is a force of good. Additionally, you can also get very rich investing in the ecosystem too. So what are you waiting for? If you think that it may be too late to invest, have a read here: Is it Too Late to Buy Bitcoin and Is It too Late to Invest in Cryptocurrency?

The East-West ICO Divide

On By mehranmuslimiblogIn Bitcoin, Blockchain, ICOLeave a comment

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The saying “East is East and West is West” curiously even applies to ICOs. You might have assumed that there was a universal view of ICOs, but it isn’t so: in the West, enthusiastic support for an ICO is primarily based on the ‘ideas’ that the ICO platform brings to the blockchain party, while in the East they are much more concerned about the ICO’s ability to generate a return on investment.

The divide exists in other ways as well. For example, the Asian market took off on its own, informed by the ecosystems around bitcoin and ethereum but also distinct from them. Zhuling Chen, co-founder of Aelf, a cloud computing startup based in Singapore, attributes this to the fact that, “At the very beginning, the information coming from Asia to the US was very limited. We didn’t know what’s really going on.”

 

The differences between the Asian and U.S. ICO markets became more clearly visible during Blockchain Week in NYC. Brady Dale, writing for Coindesk says:

“If one common theme ran through our conversations about Asia, it was this: retail and institutional investors all want returns to realize much more quickly than investors do in the U.S., which may help explain why it has always had a vigorous ecosystem of exchanges.”

Another Asian investor explained it more succinctly: “Asians love to gamble.” Jason Fang told Coindesk:

“They don’t want long lockup periods like so many Western projects expect. Instead, they want to see tokens get released, listed and realize some of the gains that come from retail investors and market makers buying into a new coin.”

Another view, according to Ricky Li of Altonomy, one of Asia’s largest crypto funds, also pointed out that Asians want in and out quickly, and that they have a tendency “not to diversify their portfolios over time.” He also said:

“Chinese companies and their neighbors will raise funds in ether and largely maintain those positions, sometimes failing to lock in gain or riding volatility through their whole portfolio.”

A lack of software documentation in Asian languages has been another divider between East and West. But overall, it seems that the demands of ICO investors are quite different, and ICOs trying to please a global audience will need to take this into account when building their roadmap and strategy.

 

 

 

 

A decentralised business is better for you

On By mehranmuslimiblogIn Bitcoin, Blockchain, FintechLeave a comment

The background of a magnificent city

Let’s start by looking at Equifax. This is a U.S. company, and one of only three, that provides credit reporting on American citizens. Last year there was a massive security breach, which meant that the personal information of at least 143 million was in the wrong hands.

The problem here is that your personal data is centralised when these big credit-rating companies have it, and that means it can be manipulated; by them or by other parties through theft.

If Equifax stored consumer data on a blockchain-based system, the information would not only be better protected, the company itself wouldn’t be able to mess around with it in any way.

The blockchain uses cryptographic hash functions that both encrypt your data and track historical changes to it. Therefore, at any point in time, if any piece of your data is tampered with, you personally will be able to immediately see where and when the information was changed.

However, security isn’t the only advantage decentralised storage of data can bring. The communities using decentralised ledgers are incentivised to show more respect and this contributes to more efficient operations.

The incentive of having a stake in the business

Some platforms, especially those decentralised ones that have utility tokens, engender a sense of community, because every person involved has something to gain by making sure the platform runs for the benefit of all. It also means that they literally have a stake in the company just through token ownership. Also, all the community members can see how a platform uses their personal information and the steps taken to protect it.

There will always be bad actors in any company, and sharing economies are no different, although you’d think that in this particular sector, people are less likely to take advantage of other community members, but we’d be naïve to believe everyone really gets the idea of ‘sharing’. However, in decentralised communities, any bad actors are actively disincentivised, because if things go well, the stakeholders all benefit. If a bad actor contributes to making the company less successful, then they are shooting themselves in the foot.

If you take the example of Uber, which is s centralised company; none of the Uber drivers have a stake in it. They have no incentive to act in a way that makes the company more successful, because all the benefits of success go to the founders and shareholders. If Uber was a decentralised business, with drivers having some form of stake in it, it would be a very different story.

We may see an increasing demand for companies to adopt a decentralised approach, because ultimately it benefits the consumer, and they could be the driving force that increases the use of a new decentralised business model.

 

 

 

Fundstrat bullish about Bitcoin for 2019

On By mehranmuslimiblogIn Bitcoin, Blockchain, Ethereum, FintechLeave a comment

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Fundstrat Global Advisors, co-founded by Tom Lee, has just published a report claiming that Bitcoin prices will reach $36,000 by the end of 2019. How has it arrived at such a bold prediction? Fundstrat says the answer is mining costs.

Fundstrat’s Quantamental Strategist, Sam Doctor, analysed the relationship between Bitcoin mining costs and price, to come up with the prediction that the price range will fall somewhere between $20,000 and $64,000 next year.

He based his calculations on a Bitcoin Price to Mining Breakeven Cost Metric, known as P/BE, which he claims has “proven a reliable long-term support level.”

A statement from Tom Lee, published on Twitter, said: “We expect the mining economy to grow over the next several years, and project a BTC price of ~$36,000 by year end 2019 based on the historical average 1.8x P/BE multiple.”

The Twitter statement also points out that the rise in electricity costs is slowing and use of power is becoming more efficient as larger rigs with a higher hash power per watt, are now appearing. Plus, mining operations are getting bigger, bringing the benefits of scalability to the scenario.

However, he did point out that there was one risk to the prediction: “a material shift in the trajectory of hash power could change the P/BE support level of BTC price.”

It is interesting that Tom Lee’s personal prediction for BTC was $25,000 by the end of 2018 and both Lee and Fundstrat have been bullish about BTC this year. They also issued a statement in April, saying that 82% of institutional investors believe the price had now bottomed out.

If you own BTC and both Fundstrat and Lee are correct than it will be worth holding on to them for some time to come.