November 30, 2017

NYU Plans to launch an Undergraduate Course in Cryptocurrencies

By Avi Mizrahi - December 01, 2017 (news.bitcoin.com)


This year’s incredible bitcoin rally has raised a lot of interest in the cryptocurrency and created huge demand from people to learn everything they can about the phenomena. One academic institution which tries to answer this call is New York University (NYU).

Bitcoin 101 at NYU


The Stern School of Business at NYU was the first major US academic institution to offer a course in cryptocurrencies to its graduate students back in 2014. Now the school plans to offer a new option for undergraduates to learn about the field as well, NYU professor David Yermack told the Financial Times.

This new course is likely to be a highly sought one among NYU undergrads. Starting out with just a few dozen students, the graduate course accommodated 100 this year with many more applying to get in, and is expected to reach about 300 graduate students next year. “We are moving it to our largest auditorium, with capacity for 350 students,” the professor exclaimed.

Challenges


Universities that wish to offer classes about bitcoin, blockchain and other cryptocurrency related material face two problematic issues at the moment.

First, as anyone who follows the news can tell you, these subjects are changing at an incredible speed and if you were to write a textbook about the latest developments it will be out of date by the time it is printed. As Prof Yermack said: “Year over year we’ll change well over half the course material. It keeps you young to be reading half the night just to keep up with the latest innovations.”

Secondly and more importunately, the field is suffering from an acute talent shortage. With a teeming market full of new projects raising funds via ICOs, established companies exploring how to harness blockchain technology for their needs, and Wall Street heavyweights racing to start bitcoin trading, the competition for knowledgeable individuals is fierce. “Our biggest challenge is finding enough people to teach the courses,” explained Prof Yermack.

If you are looking to learn about bitcoin, but can’t make it to NYU, there is no reason to worry. All of the material needed can be found freely on the internet. And if you desire an Ivy League seal of approval, Princeton offers a ‘Bitcoin and Cryptocurrency Technologies’ course on Coursera.

Images courtesy of Shutterstock.

Bitcoin Correction Back Below $10,000

By DataDash - November 30, 2017 (www.youtube.com)

Is there a possibility of Bitcoin going down to 5,000 or 6,000 level?

https://youtu.be/aF5zdVsjO6Q

Bitcoin boom draws record number of Indian investors according to exchanges

By Joshua Althauser - December 01, 2017 (cointelegraph.com)


India-based digital currency exchanges have claimed that the number of Indian investors who registered in their platforms to buy Bitcoin has increased considerably in the past few weeks as the value of the leading cryptocurrency surpassed the $11,000 level on November 29.

The unprecedented rise in the number of investors who want to invest their money in the most popular cryptocurrency was observed despite rumors that the country’s central bank may declare Bitcoin and other cryptocurrencies as illegal.

According to Unocoin co-founder and CEO Sathvik Vishwanath, the number of customers who registered on their platform in just one month has reached around 200,000 due to the sharp rise in the price of Bitcoin.

“It took us about three years to gather [100,000] registered customers and in last one month itself we have seen about [200,000] customers registering with us.”

Phenomenal performance of Bitcoin in India


Despite the negative views of the Indian government and banking regulator, the market for digital currencies in the country is booming. This is particularly true for Bitcoin, whose price has skyrocketed from Rs 459,047 on November 1 to Rs 860,049 on November 29.

According to Zebpay co-founder Sandeep Goenka, the extent of interest shown by investors in Bitcoin is phenomenal. He added that the number of users is increasing by 300,000-400,000 in the past few months compared to around 150,000 in June and July.

“The extent of interest in Bitcoins is at unprecedented levels. Every time prices increase, investors who were sitting on the fence and were skeptical do enter the ecosystem. This time it almost feels like mainstream adoption, something I have never experienced before, because now we are seeing interest coming in from even the conservative investors.”

Bitcoin is a vehicle for fraudsters, warns Goldman Sachs boss

By Angela Monaghan - November 30, 2017 (www.theguardian.com)

 Bitcoin reached $11,395 on Wednesday only to fall to a low of $9,000 on Thursday.
Photograph: Chesnot/Getty Images

CEO Lloyd Blankfein attacks cryptocurrency after value dives 20% in a day, saying bank will not get involved until it becomes less volatile.

Bitcoin reached $11,395 on Wednesday only to fall to a low of $9,000 on Thursday. Photograph: Chesnot/Getty Images


The boss of Goldman Sachs became the latest high-profile critic of bitcoin, claiming it was a vehicle to commit fraud as the value of the cryptocurrency plunged 20% in less than 24 hours.

Lloyd Blankfein, chief executive of the US investment bank, said: “Something that moves 20% [overnight] does not feel like a currency. It is a vehicle to perpetrate fraud.”


His comments came during another wildly volatile trading session for the digital currency, which plunged by over $2,000 in a 24-hour period. Having topped $11,000 to reach a new record high of $11,395 on Wednesday, it fell to a low of $9,000 on Thursday, before picking up slightly later in the day.

Blankfein said Goldman did not need to have a bitcoin strategy, adding the digital currency would need to be a lot less volatile and a lot more liquid to justify closer attention.

“When do I have to have a bitcoin strategy? Not today. Life must be really rosy if that is what we are talking about,” he said. “Bitcoin is not for me. A lot of things that have not been for me in the past 20 years have worked out, but I am not guessing that this will work out.”

Blankfein is the latest boss of a major bank to voice scepticism about bitcoin, after JP Morgan’s chief executive, Jamie Dimon, described it as fraud that would ultimately blow up and said it was only fit for use by drug dealers, murderers and people living in places such as North Korea.

On Wednesday, Sir Jon Cunliffe, a deputy governor of the Bank of England, said the digital currency was too small to pose a systemic threat to the global economy. He also cautioned that bitcoin investors needed “to do their homework”.

Despite the fall in bitcoin’s value on Thursday, it remained far higher than it was at the start of 2017, when it was trading at $998. It is the biggest gainer of all asset classes this year, prompting sceptics to declare it a classic speculative bubble that could burst.

Banks and other financial institutions remain concerned about bitcoin’s early associations with money laundering and online crime. Unlike traditional currencies, bitcoin is not issued or regulated by a central bank or government.


Lee Wild, head of equity strategy at online trading company Interactive Investor, said the volatility in bitcoin trading was “wild west stuff”.

“Cryptocurrency land’s extreme volatility is like catnip to high-risk traders, and even traditional investors are dipping their toe. Given there’s no logical way to value them with any accuracy, this remains wild west stuff.”

Analysts at the spread betting firm, City Index, said: “While traditional assets are experiencing historically low levels of volatility, the whipsaw action of the bitcoin is drawing the attention of traditional traders. Meanwhile existing traders and newcomers are increasingly interested in fear of missing out.”

November 29, 2017

“Avoid Bitcoin like the plague”, We’ll talk when it’s $100: Vanguard Founder

Another Wall Street giant joins the bitcoin bashing brigade.

By Samburaj Das - November 29, 2017 (www.cryptocoinsnews.com)


Wall Street magnate John Bogle has warned investors to keep their money away from the bitcoin industry.

Jack Bogle, a legendary investor and founder of Vanguard Group, an investment firm managing $4.5 trillion in global assets, has poured scorn on bitcoin as an asset at a time when the decentralized cryptocurrency is valued above $10,000.

At 88 years old, the now-retired chairman of the Vanguard Group was present at a Council on Foreign Relations event in New York on Tuesday when an audience member sought his opinion on bitcoin.

In remarks reported by Bloomberg, Bogle was sharp in his response, stating:

"Avoid bitcoin like the plague. Did I make myself clear?"

“Bitcoin has no underlying rate of return,” Bogle added, pointing to bonds relying on interest coupons, stocks with earnings and dividends. “Gold has nothing,” he added, before quickly turning to bitcoin again. “There is nothing to support bitcoin except the hope that you will sell it to someone for more than you paid for it,” he reportedly said.

Bitcoin has gone stratospheric this year, rising nearly 1,100% since the turn of 2017 after hitting a fresh all-time high of $10,948 (Coinbase) today.

Bogle is adamant in his belief that bitcoin is overvalued, opining that the value of the world’s first cryptocurrency could double before predicting a seismic correction.

“It’s crazy to invest in the digital asset,” he said, adding:

"Bitcoin may well go to $20,000 but that won’t prove I’m wrong. When it gets back to $100, we’ll talk".

Bogle is only the latest Wall Street figure to join the list of nearby naysayers. The most vocal and infamous quote of all came earlier in September when noted skeptic and JP Morgan Chase chief Jamie Dimon labeled bitcoin a “fraud” that will see someone “going to get killed.”

Featured image from YouTube/Morningstar, Inc..

Ripple Splash - TechCrunch Founder launches $100 Million XRP Hedge Fund

By Josiah Wilmoth - November, 29, 2017 (www.cryptocoinsnews.com)


TechCrunch founder Michael Arrington has announced the creation of a $100 million hedge fund that will be denominated in XRP, the native token of Ripple.

Arrington made the announcement at the Consensus: Invest conference in New York, revealing that the fund will be called Arrington XRP Capital. Significantly, investors will buy shares of the fund and receive distributions in XRP, the native currency of the Ripple Consensus Ledger (RCL) and the fourth largest cryptocurrency by total market cap.

“A year ago I was just a crypto enthusiast,” Arrington wrote in a blog post that accompanied the announcement. “Now I’ve altered my career path to focus entirely on cryptocurrencies and related technologies. And this isn’t just a short term focus. With this new fund I’m signaling my intent to spend the rest of my career on cryptocurrencies. There will be dramatic ups and downs along the way, but we’re in this for the long haul.”

The CrunchFund founder wrote that he and the other founding partners of Arrington XRP Capital chose to denominate the fund in cryptocurrency rather than fiat to make it easier for cryptocurrency holders and foreign investors to participate in the fund. They chose XRP due to its “super-fast and secure settlement infrastructure,” which has also been adopted by financial services heavyweights such as American Express.

Arrington said that this feature is not a mere gimmick but will be an integral component of the fund’s operations:

“We’ll pay our own fees and salaries out in XRP as well. We want to “eat our own dog food” and be active users of crypto currencies in as many parts of our fund operations as possible, not just investors. This will make us better investors,” he wrote.

According to Fortune, the fund — which has raised approximately half of its $100 million target — will invest primarily in cryptocurrencies and initial coin offerings (ICOs), although it may obtain small equity stakes in blockchain startups.

XRP traded up on the news, briefly cracking the $0.30 barrier for the first time since June. At present, XRP is trading at $0.286, which represents a 24-hour increase of six percent and gives the cryptocurrency a market cap of $11.1 billion.

Featured image from Shutterstock.

Bitcoin Futures Trading is coming to Nasdaq, the World’s Second Largest Stock Market

By Joseph Young - November 29, 2017 (www.cryptocoinsnews.com)


The $6.831 trillion stock market Nasdaq, the world’s second-largest stock exchange behind New York Stock Exchange, will enable bitcoin futures trading by mid-2018.

Nasdaq and Cantor to Integrate Bitcoin by First Half of 2018


A Wall Street Journal report revealed that Nasdaq and Cantor Fitzgerald & Co. will list bitcoin futures within the first half of 2018. The two financial institutions are “rushing” the integration of bitcoin given the cryptocurrency’s recent surge in price, to $11,441.

According to sources familiar with the Nasdaq’s plans for a bitcoin futures exchange launch, Nasdaq’s bitcoin futures and contracts will be listed on Nasdaq Futures. Through that, investors in the traditional finance sector and stock brokerages will be able to engage in bitcoin trading.

In an interview with WSJ, Cantor, a major US-based financial firm, also revealed that it intends to launch bitcoin futures and derivatives on its flagship exchange.

Shawn Matthews, chief executive of Cantor Fitzgerald & Co., stated that cryptocurrencies are a new asset class that “is not going away,” and that bitcoin is here to stay.

He stated:

"The asset class is not going away. If you look at the next level, it will be the institutions coming in and being larger participants in the marketplace, especially as liquidity gets better".

Cantor’s futures exchange has already been approved by the US Commodities and Futures Trading Commission (CFTC), and considering that CFTC has approved several bitcoin futures listings including the bitcoin options, derivatives, and futures exchange of LedgerX, regulatory hurdles of Cantor in listing bitcoin are expected to be minimal.

Nasdaq’s Bitcoin Integration Will Trigger Other Exchanges to Adopt Bitcoin


Other major exchanges including Nodal Exchange are actively investigating the potential of listing bitcoin futures on their regulated exchanges and trading platforms.

John D’Agostino, a former Nymex executive, told WSJ that every department of every regulated exchange is considering listing bitcoin futures, and that the number of bitcoin futures exchanges will drastically increase throughout 2018, as leading exchanges and markets such as CBOE, CME, Nasdaq, and Cantor move to implement bitcoin.

“Every research department of every regulated exchange is saying, ‘Can we do this?. The majority of costs associated with that are marketing. If people want to trade this thing, why wouldn’t you?. This is a gift from the heavens,” said D’Agostino.

In early 2017, the integration of bitcoin futures could have required marketing to a certain extent to attract investors within the traditional finance sector. Currently, the mere act of integrating bitcoin is an impeccable marketing strategy. Some reports revealed that if multi-billion dollar companies like Overstock switch their businesses to cryptocurrency-focused ventures, they are likely to see 70 to 100 percent increase in sales and market valuation.

Given the rapid increase in the mainstream adoption of bitcoin and the rise in demand for cryptocurrencies, every exchange in the US and in the global finance market is planning to integrate bitcoin in the short-term. Nasdaq’s listing of bitcoin futures will trigger more exchanges to pursue the path of bitcoin futures in the upcoming months.

Featured image from Shutterstock.

Billionaire Bull Novogratz - Bitcoin will be the ‘Biggest Bubble of Our Lifetimes’, And that’s okay

By Rebecca Campbell - November 29, 2017 (www.cryptocoinsnews.com)


Billionaire investor and hedge fund manager Mike Novogratz has made the claim that ‘bitcoin will be the biggest bubble of our lifetimes.’

Speaking at a conference in New York on Tuesday, Novogratz explained that there is a lot of fraud in something that’s ‘exciting’ as the crypto market, reports CNBC, adding:

"I think this [crypto] is going to be the biggest bubble of our lifetimes by a long shot. To be fair, this is a bubble and there’s a lot of fraud mixed in. We look at tons of projects. And some get funded, and they literally look like Ponzi’s".

However, unlike critics who have said dismissed the digital currency as a speculative bubble, the former Fortress manager wasn’t using his bubble comment as a negative connotation. In October, during an interview, Novogratz was asked whether bitcoin’s gains constituted a bubble. Even though he replied in the affirmative, he added that this wasn’t necessarily a bad thing, adding:

"Historically, manias or bubbles happen around things that fundamentally change the way we live. If it’s the railroad bubble or the Internet bubble, it really changed the way we live".


He added that in 10 to 15 years the blockchain and decentralised systems would be in use everywhere, claiming that this bubble is ‘going to be the great manias of all time.’

Since October, bitcoin has not only scaled the $10,000 milestone, but it’s continuing upward trajectory has pushed it up to its current value of $11,147, according to CoinMarketCap, pushing its market total to $185.7 billion for the first time.

The comments from Novogratz, who has compared to bitcoin to digital gold, come at a time when he recently stated that bitcoin could ‘easily‘ reach $40,000 by the end of 2018. Furthermore, he was reported yesterday as saying that the digital currency market cap will reach $2 trillion at the end of next year. At present, it’s worth an impressive $339.1 billion, making it more valuable than Visa and the Bank of America. Slowly, but surely, it’s steadily gaining on the market cap of JPMorgan Chase, at $343 billion, who’s CEO called bitcoin ‘a fraud‘ in September.

However, while Novogratz believes that the cryptocurrency will reach $40,000 by the end of 2018. he doesn’t think that the journey will be smooth sailing.

He added:

"There will be wild crashes in it because you’re going to get to levels so far ahead of where the technology’s at. It makes investing really, really exciting, but difficult".

Since the beginning of the year, bitcoin’s value has, so far, increased by more than 1,000 percent.

Featured image from Flickr/Acumen.

Investors ‘risk’ buying Bitcoin at high prices: ECB Vice President

By Rebecca Campbell - November 29, 2017 (www.cryptocoinsnews.com)


The vice president of the European Central Bank (ECB) has said that investors are taking a ‘risk’ by buying bitcoin at its high price.

Speaking to CNBC on Wednesday, Vitor Constancio, said:

"It’s a very particular asset, it’s a speculative asset by definition looking to the developments in its price. Investors are taking that risk of buying at such high prices".

Constancio’s comments come at a time when the digital currency is experiencing a surge in value. Earlier today, it was reported that bitcoin had risen to over $11,000 along with a rise in various alt-coin prices. To date, the cryptocurrency has increased by over 1,000 percent, a colossal undertaking considering it was trading at $1,000 at the beginning of the year, and has overcome numerous obstacles.

Some, though, are still expecting great things from bitcoin. Mike Novogratz, a billionaire investor and hedge fund manager, believes that it could ‘easily’ rise to $40,000 by the end of 2018. However, at a recent conference in New York, he stated that it wouldn’t be easy getting there, adding:

"There will be wild crashes in it because you’re going to get to levels so far ahead of where the technology’s at".

Central banks, though, have continually been reluctant to embrace the market. The ECB vice president said earlier this month that digital currencies will never replace the fiat system, adding that they were a ‘misnomer‘ merely used as a speculative asset.

At the time, he stated:

"The so-called private ‘cryptocurrencies’ can never prevail as general money substitutes".

Mario Draghi, the ECB President, has also spoken about the digital currency market, claiming that they aren’t ‘mature‘ enough for the central bank to consider regulating them. More recently, Draghi stated that they pose little threat to the central bank-dependent financial system, despite the rise in the cryptocurrency market.

Not only that, but Constancio believes that central banks don’t need to take the digital currency market seriously. During the interview, he said:

"… in the sense that we don’t have responsibility or even instruments that point to particular prices of particular assets, that is certainly not the role of central banks".

Yet, regardless of the fact that the crypto market, in particular bitcoin, have been criticised by various financial CEOs, it looks as though it has its foot firmly in the door and isn’t going away anytime soon. Not only that, but we may soon be reading headlines that the combined crypto market has become more valuable than JPMorgans.

Featured image from Shutterstock.

1 Million Yen, 100 Million INR – Bitcoin sets new price milestones on International Markets

By Samuel Haig - November 28, 2017 (news.bitcoin.com)


With all eyes on bitcoin’s meteoric break of $10,000, less attention has been paid to the price milestones recently established on leading international markets. In recent weeks, the CAD, AUD, NZD, and SGD pairings also surpassed $10,000, whilst a single bitcoin exceeds 500,000 RUB in Russia, 1 million JPY in Japan, 10 million KRW in South Korea, and 100 million IDR in Indonesia.

The Price of Bitcoin Exceeds 1 Million Yen in Japan


As Japan is currently host to more than 60% of global trading volume, reaching the seven-figure milestone on the JPY markets is a big deal for bitcoin. According to cryptocompare, bitcoin broke above one million JPY at approximately 7 pm on the 25th of November EDT. The current JPY/BTC price as of this writing approximately (1:30 am November 29th EDT) is roughly ¥1,300,000

Seven hours after bitcoin broke above one million JPY, the South Korean bitcoin markets reached 10,000,000 KRW for the first time ever. Currently, the Korean markets account for 10% of 24-hour trading volume, comprising the third-largest bitcoin market behind the United States. The current KRW/BTC price is approximately ₩12,600,000.

Bitcoin Tests $15,000 in Australian, Canadian, and Singaporean National Markets


With the exception of an anomalous spike in the AUD/BTC price at the end of October, cryptocompare’s price index indicates that AUD trade convincingly exceeded $10,000 for the first time on November 16th at 4 pm EDT. AUD trade comprises the fifth largest national market with roughly 0.45% of 24-hour bitcoin trade. The current AUD/BTC price is approximately $14,400.

Singapore hosts the seventh largest national bitcoin market equating for roughly 0.34% of total trade. The SGD/BTC price broke above $10,000 for the first time at 11 pm on November 15th EDT and is now currently trading for $14,300 approximately.

Canadian trade presently accounts for 0.2% of 24-hour trading volume, comprising the ninth largest national market. The CAD price of bitcoin broke above $10,000 for the first time at 2 am on November 17 EDT, with CAD/BTC currently trading for $13,300.

Other Major Price Milestones on International Markets


At approximately 11 pm on the 25th of November EDT, the price of bitcoin exceeding 150,000 ZAR in South Africa for the first time. ZAR trade comprises the eighth largest national bitcoin market – comprising 0.25% of 24-hour trade.The current ZAR/BTC price is approximately ZAR167,000.

Indonesia’s bitcoin markets comprise approximately 0.1% of 24-hour trading volume, currently making such the fourteenth largest national market. The IDR/BTC price broke above 100,000,000 rupees at 9 am on November 1st EST, and at approximately midnight on November 29th EDT established a new milestone of over 150,000,000 rupees.

Russian bitcoin prices broke above RUB 500,000 for the first time at 11 pm on November 25 EDT. RUB/BTC trading presently comprises the fifteenth largest national market, representing approximately 0.1% of 24-hour trading volume. Bitcoin is currently trading for approximately RUB 600,000 in Russia.

Images courtesy of Shutterstock



Samuel Haig

Samuel Haig is a cryptocurrency and economics journalist who has been passionately involved in the bitcoin space since 2012. Samuel has written about the disruptive potential of cryptocurrency with regards to the dialectical relations within contemporary neoliberal capitalism.

November 28, 2017

Bitcoin is a perfect currency, Beyond the reach of any nation-state or cooperative effort to defeat it - Max Keiser

By Ashour Iesho - November 27, 2017 (bitcoinist.com)


Although many experts still believe that Bitcoin, and the cryptocurrency market as a whole, may be in a bubble state, Max Keiser believes that Bitcoin still has room to grow. 

CAN BITCOIN REACH $25,000?


Bitcoin is making headlines – again – as it continues to shatter milestone after milestone. Most recently, the popular digital currency passed the $9000 mark and is quickly edging toward $10,000. According to a recent article by RT, well-known American TV broadcaster Max Keiser believes that Bitcoin still has the potential to climb as high as $25,000 before having a correction.

Keiser stated:

"Up until that price is achieved it looks like we’ll see a pretty strong upward move".

He also believes that the huge inflation rate of major fiat currencies like the US dollar is causing Bitcoin to rapidly rise.

"I think we are seeing fiat currencies in a hyperinflationary collapse against bitcoin".

Keiser posits that one of the reasons behind Bitcoin’s price surge is because it is the perfect alternative to traditional financial systems that are used by banks and other financial institutions:

"Bitcoin is a perfect currency, something that is utterly changing the global finance and market and is putting banksters and the central banks out of business".

Many banks have expressed their desire to work with blockchain technology, but most of them are not yet open to Bitcoin and other cryptocurrencies. The reason behind their reluctance is the fact that banks cannot regulate – and therefore cannot control – the popular decentralized cryptocurrency.

GOVERNMENTS CAN’T STOP IT


Another interesting use case for Bitcoin is bypassing government controls and sanctions. Since many countries around the world are currently under financial sanctions, Bitcoin is an easy and efficient way for them to surpass these restrictions. Max Keiser thinks that the fact that governments can’t stop Bitcoin, is giving it immensely value and trust.

"That’s something that no central bank or country will be able to stop, and it’s becoming a real scenario, a real threat".

An interesting remark that Keiser made in the article, is that Bitcoin might become a “financial black hole” where people are rushing to sell stocks and bonds and transfer that money into the decentralized cryptocurrency. If that happens, there is the very real possibility of a stock market or bond market crash, perhaps even both.


This new scaling layer could make payment channels ten times more effective

By Michiel Mulders - November 27, 2017 (bitcoinmagazine.com)


There is no disputing the fact that the Bitcoin network has scalability problems. Micropayment channels are a solution to increase the transaction rate and speed. Yet, this is not the golden solution. This micropayments solution needs a fixed amount of funds to be locked into each channel’s multisignature wallet and requires a transaction for each channel creation and closure. This hinders the Blockchain network from upscaling to a global payment system because Bitcoin’s capacity is limited.

A recently published research paper by a university in Zurich suggests implementing a new layer in between the blockchain and payment channels that enables off-blockchain channel funding to reduce stress on the Bitcoin blockchain.

What Are Micropayment Channels?


The paper mentions two challenges: “Micropayment channel networks create new problems, which have not been solved in the original papers. We identify two main challenges — the blockchain capacity and locked-in funds.”

Before we go any further into this proposed solution, it is essential to understand the concept of micropayment channels. Bitcoin’s blockchain network doesn’t allow you to send many micropayments of tiny amounts of bitcoin. Bitcoin’s block weight limit caps this at less than 10 transactions per second, on average.

Payment channels let users lock up a fixed amount of funds in a multisignature wallet controlled by the client and receiver. A channel can be opened by sending a transaction to the blockchain. Next, an unlimited amount of payments can be made between the client and receiver. These payments are performed off-chain and only exist between both participants.

Once a channel is closed, a final transaction containing end balances will be sent out to the Bitcoin network. This is the base implementation of micropayment channels; a more evolved implementation is the lightning network, which allows bidirectional payment channels.

Reducing many hundreds, thousands or even more transactions to just two transactions per channel are a drastic improvement. Still, it is not enough for bringing the Bitcoin network to the level of a world-wide payment system. A channel can only exist between two participants. So, if each person in a group of 20 wants to open five channels, this will require a lot of transactions — 200 to be exact. Besides that, there is no solution for when the amount of locked funds is exceeded for a specific channel.

Proposed Solution


The paper tells us about a new layer: “We introduce a new layer between the blockchain and the payment network, giving a three layered system. The new second layer consists of multi-party micropayment channels we call channel factories, which can quickly fund regular two party channels.”

The paper suggest a three-layered system in which the first and third layers already exist. The first layer locks the funds, and the third layer performs the actual transfers of currencies. The new second layer can be seen as a channel factory. It is responsible for creating multi-party micropayment channels and quickly refunding wallets when they are almost depleted. The paper calculated a savings of up to 90 percent for a group of 20 nodes with 100 channels in between them.

Instead of sending a blockchain transaction for each channel creation or closure, the paper suggests a system where just one transaction is needed to open multiple channels without further blockchain contact. Funds are locked into a shared wallet between a group of nodes instead of a specific channel. Furthermore, funds can be moved between groups with just an attached message with further details such as a receiver address. All of this happens off-blockchain.

The only addressed risk is that a user within a group can close the channel factory: the second layer. This induces a higher mining fee because more blockchain space is used. While this is not a big risk — a user won’t gain personal advantage by doing so — it does limit the usefulness of large groups.

Next, it is possible that the receiver doesn’t sign a transaction. The paper introduces the use of either timelocks or punishments for dishonest parties. They will focus on timelocks because they think it performs much better. After a timelock has elapsed, the current status of the channel will be broadcasted to the blockchain and the channel will be closed; no punishment is applied.

There is no risk in securing the funds. The multisignature wallet has a many-to-many constraint containing all signatures of the involved actors. Funds can only be spent when all actors have signed the transaction, so no one can be deprived of funds without signing for it themselves.

Bitcoin use in Iran welcomed by nation’s High Council of Cyberspace

By Avi Mizrahi - November 28, 2017 (news.bitcoin.com)


Iran is probably not the first country to pop into your head when thinking about official bitcoin endorsement. In the Middle East alone, the immensely rich Arab emirates of the Gulf are much likelier candidates as they have a tendency to race one other to obtain the latest technological marvels as displays of wealth. Despite this, Iranian government authorities have consistently signaled that they are open to the idea of allowing bitcoin use in the country – as they did once again a few days ago.

Welcome to Iran


Abolhassan Firouzabadi, secretary of Iran’s High Council of Cyberspace, told the Iranian news agency ILNA that his institution supports the use of bitcoin in the country albeit in a controlled fashion. He said: “We welcome bitcoin, but we must have regulations for bitcoin and any other digital currency. Studies are necessary for considering a new currency.”

Such studies are currently underway as a joint effort by both the High Council of Cyberspace and the Central Bank of the Islamic Republic of Iran as the authorities are preparing for bitcoin use inside the country. An official document detailing what the regulators have learned about the virtual currency is expected by September 2018 according to the Iranian daily Financial Tribune.

The secretary also acknowledged that without the government’s stated approve, already “many in Iran are dealing with bitcoin, be it purchasing, selling or mining it, and even dealing with it in exchange shops, creating content and establishing startups”.

Pros and Cons



From the point of view of the Iranian government, bitcoin must seem like a double-edged sword.

The economy of Iran has long suffered from economic sanctions meant to cut it off from the global marketplace. Having a method to bypass the established international financial system could greatly help the country’s exporters and importers safeguard themselves from outside interference. This is especially true now with hostile actors, such as Saudi Arabia’s new leader and US president Trump, publicly contemplating further punitive measures against Iran.

On the other hand the country’s leadership must be thinking about how to keep its control over the economy, as governments are wont to do, and also to prevent bitcoin from empowering dissidents. The young generation in Iran is considered to be one of the most educated in the region and is especially tech-savvy. Iran famously blocked Twitter during its 2009 presidential elections to slow the spread of protests the government said were instigated from abroad. This will not be an easy option with bitcoin, even if the government were to discover that foreign entities were using it to fund NGOs in times of political crisis.

“Our view regarding bitcoin is positive, but it does not mean that we will not require regulations in this regard because following the rules is a must,” the HCC secretary added in his recent interview.

Images courtesy of Shutterstock.

How to calculate Bitcoin Transaction Fees when you’re in a hurry

By Kai Sedgwick - November 28, 2017 (news.bitcoin.com)


Calculating transaction fees is like riding a bike or rolling a cigarette: simple when you know how, but frustratingly complex otherwise. UX improvements over the last few years have made bitcoin easier than ever to send and receive, but fee calculation is still something of a dark art. The following resources make fee calculation a doddle.

Taking a Byte out of Your Satoshis


In this life, nothing comes for free. You wanna send bitcoin, you’ve got to pay the piper, namely the miners whose machines secure the network and confirm the hundreds of thousands of transactions that pass through it every day. Back in the day, when one bitcoin cost tens or hundreds of dollars, no one paid too much attention to fees; they were so small as to be unimportant, which is why sites like Satoshi Dice were able to flourish, permitting idle bitcoiners to send scores of micro-transactions over the blockchain with scant regard for fees.

Fee calculation isn’t as easy as the experts would have you think.


Where Do Transaction Fees Go?

The less blockchain congestion
there is, the faster your transaction
will be confirmed.
In addition to earning a reward for solving the next block, miners receive the fees attached to any transactions on that block. The current reward per block is 12.5 BTC, but the miner may receive a figure closer to 13 BTC by the time fees have been added on. Although there is technically no obligation to attach fees to a transaction, there is also no obligation for the miner to include any transaction in the block they’re confirming. Thus it makes sense to include a fee to incentivize the miner to add the transaction to the block.

Miners prioritize transactions with the highest fee per byte, which is why senders who are in a hurry will pay a surcharge to push their transaction to the front of the queue. Pay the highest possible fee and your transaction should be confirmed within the next block, which will take an average of between 5 and 15 minutes. Pay lower fees and your transaction should be confirmed within the next three blocks, which will generally take between 10 and 30 minutes.

Transaction Fees Made Easy


As bitcoin has risen, so have the corresponding fees (for reasons that aren’t always related to the price of BTC it should be noted). Who’s gonna pay for their skinny turmeric latte with bitcoin if the fee costs more than the coffee? Thankfully that’s not always the case; fees rise and fall, and there are ways to push through low-cost transactions. If you’re sending from a segwit address and aren’t in a hurry, fees of under $1 are achievable. Perhaps not ideal if you’re still chasing that coffee, but for medium to large transactions, still doable.

Search “how to calculate bitcoin fees” and you’ll be presented with mind-boggling explainers like the following:


Online explanations, while accurate, aren’t much use to the average layman.

Fee Calculation Without the Calculator


Turn to some of bitcoin’s more experienced heads for fee advice, and you may emerge with more questions than answers. “What do you mean you don’t know how to calculate transaction fees? It’s simple: all you gotta do is work out the size of your transaction in bytes, multiply it by the median byte size, take the answer in satoshis, divide it by 100 million (or 1e8 on a scientific calculator), get the answer in bitcoin and then convert to USD. Piece of cake.”


Thankfully there’s an easier way. Many hardware and web-based bitcoin wallets already come with built-in fee calculators which do a pretty good job. But not all wallets are similarly equipped, and the majority of sites, from cryptocurrency exchanges to deep web stores, still leave it to the customer to calculate fees. In such situations, the following tools are invaluable:

Estimatefee.com is a simple website that calculates the cost (in satoshis and USD) for a bitcoin transaction based on how much of hurry you are to move your coins from A to B. At the time of publication, fees are between $3 and $6 for sub-1-hour transactions.

Bitcoinfees.info displays slow/medium/fast fees in USD with no muss and no fuss.

Bitcoinfees.earn.com is another prediction tool, but you’ll need to be fluent in satoshis to grasp this one. For those who are still mystified by satoshis and what they mean in fiat terms, this satoshi to USD converter will come in handy.


It may seem frustrating that there isn’t a simpler way of determining fees, but due to the way bitcoin works, the price you pay depends on a number of factors including the size in kilobytes i.e the amount of data that makes up the transaction. That’s why segwit sends are generally cheaper: because you’re transmitting less data over the network. The blockchain is a bit like a highway in that it can get congested at peak times. If you’re not in a hurry, wait till the number of unconfirmed transactions in the mempool drops, taking the average transaction cost down with it.

If you’re new to bitcoin, fees can be fiendishly tricky to get your head around. Use an online fee estimator to do the math and leave the minutiae of satoshi per byte calculations to the experts or to your wallet’s built-in estimator.

Images courtesy of Shutterstock, and Satoshi Dice.

Kai Sedgwick

Kai's been assembling words for a living since 2009 and bought his first bitcoin at $19. It's long gone. He's previously written white papers for blockchain startups and is especially interested in P2P exchanges and DNMs.

November 27, 2017

Bitcoin now worth more than Nike, Disney, McDonald's and IBM

By Jeff Francis - November 27, 2017 (bitcoinist.com)


Derided by most financial analysts for years, Bitcoin has surged dramatically in 2017 and now has a higher market capitalization than most corporations, such as Disney, Mastercard, Boeing, IBM, and McDonalds.

One measure of financial worth for a person is computing the sum total of the monetary value of everything they own. In the high-flying world of finance and huge corporations, this is done by figuring out what is called market capitalization, which is a fancy term for the market value of a company’s outstanding shares. For many financial analysts, it must be galling to acknowledge that Bitcoin now has a higher market capitalization than most major corporations.


Bigger than the Mouse House and Mickey D's


For those lucky enough to have bought Bitcoin at the start of the year, the current price of Bitcoin is a very good thing indeed. Bitcoin had been worth roughly $800 at the end of 2016, but it recently broke $9,000 and now sits at $9,700.

So, what does that roughly $10,000 per Bitcoin translate into when figuring out the cryptocurrency’s market capitalization? The full worth of Bitcoin now sits at a staggering $160 billion USD. While this total does not put Bitcoin into the Top Ten companies with the largest capitalization, it does put them at number 35 in the entire world.

If it's a fraud, then Bitcoin is a $160 billion fraud


That sound you hear is the gnashing of teeth by many financial speculators and analysts that have denigrated Bitcoin for a long time. (They’re probably scrambling on how to get some digital currency as part of their investment portfolio now.) While Bitcoin’s market capitalization is not as big as Apple ($873 billion), Alphabet (Google – $715.8 billion), Microsoft ($640 billion), or Amazon ($531 billion), it’s still larger than many companies you’re likely very familiar with.


So, which major corporations have a smaller market capitalization than Bitcoin? Here’s a sampling for you to savor:

Mastercard ($158 billion)
Pepsico ($156.8 billion)
Boeing ($152.5 billion)
Disney ($151 billion)
IBM ($143 billion)
3M ($137 billion)
McDonalds ($135 billion)
Nvidia ($124 billion)
Nike ($96 billion)
Electronic Arts ($33 billion)
Target ($30 billion)

It does appear that some financial analysts are still wrapping their heads around the rise of Bitcoin. A senior market analyst at ETX Capital, Neil Wilson, said this after the Chicago Mercantile Exchange announced it would launch Bitcoin futures in December:

"The legitimacy this gives bitcoin as a tradeable asset is very important. The market cap of bitcoin now exceeds that of IBM, Disney [or] McDonald’s".

But he also added:

"But for traditionalists, it’s hard to fathom. Rather than a commodity or currency, bitcoin is like owning stock in a company that will only ever issue 21m shares and never pay a penny in dividends.

The only way it has value is if the next guy is willing to pay you more for it – the greater fool. With no intrinsic value to bitcoin, it’s hard to see this as anything other than a giant speculative bubble".

Still, there’s no denying the madcap ride that Bitcoin has been on in 2017. Who would have thought a few years ago that Bitcoin would have a greater worth than companies like IBM, Boeing, Disney, or Mastercard?

Images courtesy of PxHere, Flickr, and Vimeo PRO.

Regulation Round-up - Kenya, Ghana and Algeria Fudding and Fighting Bitcoin

By Samuel Haig - November 27, 2017 (news.bitcoin.com)


Governments across Africa are striking a firm tone regarding bitcoin and cryptocurrencies, with Algeria’s congress expected to ban all cryptocurrencies, and Kenya’s central bank warning against the risks of cryptocurrency, and an advisor to Ghana’s ministry of communications describing “fear of the unknown” as the principal barrier to greater adoption of virtual currencies. In other news, a Kenyan man has negotiated to pay the ‘goat portion’ of his dowry using bitcoin.

Kenyan Central Bank Fears Bitcoin May Comprise “Ponzi Scheme”


The Governor of the Central Bank of Kenya (CBK), Dr. Patrick Njoroge has warned Kenyans against the risks and lack of protections afforded to cryptocurrency traders. Referring to a previous warning issued in 2015, Dr. Njoroge stated that the CBK “warned everybody that this was a risky venture and the consumer is not protected. It could very well be a Ponzi scheme of a kind, I think you have seen how the prices have gone up and down in various places. Our point is that there is risk and it is important that everybody knows that those risks can come back to haunt us and could have financial stability concerns.”

Despite the warning, Dr. Njoroge recently expressed his hesitance to rush to regulate cryptocurrencies, describing the CBK as being “open” to innovations in financial technology. Speaking at the recent Global Financial Forum in Dubai, Dr. Njoroge stated: “If you’re the regulator, you have to be careful that all risks are taken care of, including in cryptocurrencies, but we’re very open to innovation.”

Kenyan Citizen Arranges to Partially Pay Dowry Using Bitcoin Rather Than Goats


The topic of bitcoin has been in Kenya’s news cycle recently, following Kenyan citizen, Anthony Mburu’s decision to pay a portion of his dowry using bitcoin. The young bitcoin miner negotiated to pay the ‘goats portion’ of his dowry using bitcoins – and has so far paid the equivalent of 25 of the 100 required goats.

The 26-year-old Mr. Mburu quit university in 2010 only one semester into an engineering course. Mr. Mburu recently discussed his decision with Kenyan media, stating “Formal education is good. It will give you an average life. You’ll eat, have your mortgage, car loan and all that — live an average life; struggle through life to the end.” Since discovering the cryptocurrency, Mr. Mburu states that his entire life has come to revolve around bitcoin. “Everything is bitcoin. Where I live, bitcoin; what I drive, bitcoin; investment, bitcoin. It will be a bitcoin wedding,” he said.

“Fear of the Unknown” Hinders Ghanan Bitcoin Adoption


Ghana’s cybersecurity advisor to the ministry of communications, Albert Antwi Boasiako, has described “fear of the unknown” as the principal barrier to greater cryptocurrency adoption throughout the African nation. Speaking at the recent Ghana Blockchain Conference, Mr. Boasiako stated “We have our fears about cryptocurrency but discussions are still going on. Our country is still hesitant to adopt Bitcoin as a legal tender is the fear of the unknown.”

Mr. Boasiako emphasized the need for Ghana’s tech community to mobilize in order to demystify cryptocurrencies, stating “We are battling fear, the state doesn’t want to move forward because it doesn’t know what’s there. To demystify cryptocurrency, we need a community-driven agenda. We need to strategically demystify the misconceptions around cryptocurrency and get it integrated into the government digitization agenda.” Mr. Boasiako suggested the establishment of a “working group on cryptocurrency that has members from stakeholders like the Bank of Ghana,” recommending that such a body should closely monitor developments in the sphere of cryptocurrency regulation in other jurisdictions.

Algeria Expected to Ban All Cryptocurrencies


Last month, it was reported that Algeria’s congress had begun to consider new financial legislation that would see all cryptocurrencies banned throughout the country. The ‘2018 Finance Bill’ states that “The purchase, sale, use, and holding of the so-called virtual currency is prohibited. The virtual currency is the one used by Internet users through the web. It is characterized by the absence of physical support such as coins, banknotes, payments by check or bank cards,” specifying that “Any violation of this provision is punished in accordance with the laws and regulations in force.”

An accompanying memorandum emphasizes the concerns that bitcoin’s potential anonymity sparks among Algerian lawmakers, stating “Algeria hopes to establish a stricter control over this kind of digital transaction, which can be used for drug trafficking, tax evasion, and money laundering thanks to the guaranteed anonymity of its users.” The document asserts that despite cryptocurrencies having “long been the prerogative of illegal transaction,” they are able to “get rid of their bad reputation in democratizing and attracting a wider audience.”

Images courtesy of Shutterstock, Wikipedia

Samuel Haig

Samuel Haig is a cryptocurrency and economics journalist who has been passionately involved in the bitcoin space since 2012. Samuel has written about the disruptive potential of cryptocurrency with regards to the dialectical relations within contemporary neoliberal capitalism.