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Bitcoin’s fate untethers from China

Bitcoin’s fate untethers from China

BI Intelligence

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Even as a number of smaller Chinese cryptocurrency exchanges suspended all operations last week, two of the country’s largest trading venues, Huobi and OKCoin, said they would only be suspending yuan-based cryptocurrency trading, allowing users to continue trading between different cryptocurrencies.

However, the two exchanges backtracked on Saturday, stating that they now plan to end all services for Chinese customers. Local media also reported that travel bans had been issued for the two exchanges’ executives, pending a government investigation into the venues.

Interestingly, this major shift didn’t have the predicted effect on Bitcoin prices. While news of the smaller exchanges shutting down last week sent Bitcoin prices tumbling by more than 40% from a high point of $5,000 earlier this month, there was no such outfall following OKCoin’s and Huobi’s announcements. In fact, Bitcoin prices recovered dramatically by 32% from a low of $2,983 on Friday to $3,926 at the time of this writing on Monday.

This suggests that China’s influence on the price of Bitcoin has been overestimated.Although the country’s cryptocurrency exchanges previously accounted for circa 90% of global Bitcoin trading activity, according to some sources, meaning prices reactedsignificantly to Chinese regulators’ moves, it seems that the cryptocurrency may now be diversified enough to insulate prices against events in China. It remains to be seen whether any one country will now fill this vacuum, or whether trading volumes will continue to become more geographically distributed. If the latter happens, we could see Bitcoin prices stabilize as the cryptocurrency becomes less dependent on a single country’s attitudes toward it.

Sarah Kocianski, senior research analyst for BI Intelligence, Business Insider’s premium research service, has compiled a detailed report on blockchain in banking that:

  • Outlines banks’ experiments with blockchain technology. 
  • Details blockchain projects at three major banks — UBS, Credit Suisse, and Banco Santander — based on in-depth interviews. 
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To get the full report, subscribe to an All-Access pass to BI Intelligence and gain immediate access to this report and more than 250 other expertly researched reports. As an added bonus, you’ll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now

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People thought they caught JPMorgan buying bitcoin after Jamie Dimon called it a ‘fraud’ — but that’s not what happened

Over the weekend, a tweet, which suggested JPMorgan was buying up a product tied to the value of bitcoin, sent shockwaves through the cryptocurrency community.

But like most outrage on the internet, it was unwarranted.

The screenshot, which was retweeted over 2,000 times, shows JPMorgan was among one of the largest buyers of a bitcoin exchange traded note trading on Nasdaq’s Stockholm exchange. Here’s the tweet:

twitter
oEmbedUrl
https://api.twitter.com/1/statuses/oembed.json?url=https://twitter.com/IamNomad/status/908831764457672709

Immediately Twitter erupted, lambasting JPMorgan CEO Jamie Dimon, who recently called bitcoin “a fraud” and said it was “worse than tulip bulbs,” as a hypocrite. Some questioned whether Dimon, whose comments triggered a sell-off of the coin, purposely bashed the cryptocurrency so JPMorgan could “buy low.”

twitter
oEmbedUrl
https://api.twitter.com/1/statuses/oembed.json?url=https://twitter.com/ChingYuTan/status/908969457829085184

Others wondered if Dimon would follow through on his promise to fire employees of the bank who traded the cryptocurrency. Here’s one tweet:

twitter
oEmbedUrl
https://api.twitter.com/1/statuses/oembed.json?url=https://twitter.com/AkadoSang/status/908834799028228096

Dimon probably won’t be firing anyone, but not because he’s behind some sort of bitcoin-related conspiracy. He won’t be firing anyone at the bank, because the orders weren’t placed by JPMorgan employees.

“They are not JPMorgan orders,” a spokesman said in an email to Business Insider.”These are clients purchasing third party products directly.”

In other words, JPMorgan asset managers weren’t buying this product for their clients. Rather, the bank’s clients were using JPMorgan’s pipes to buy it themselves.


Dit artikel is oorspronkelijk verschenen op z24.nl



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The creator of Ethereum thinks blockchain tech could steal business from Visa in a ‘couple of years’

The ethereum network could pose a real challenge to large financial institutions like Visa as soon as next year, according to Vitalik Buterin, the creator of the ethereum blockchain.

In a Q&A with AngelList founder Naval Ravikant at TechCrunch Disrupt on Monday, Buterin said that security is the biggest challenge to bringing blockchain technologies into the mainstream, and that once it’s sorted out, blockchain tech could steal business or even replace financial institutions like Visa in a “couple of years.”

Despite the hype around blockchain, most of the current applications that use the technology aren’t far enough along in development to be used widely, he said.But Buterin said that while he expects low-security prototypes to be introduced in the financial space by next year, it will be a few years before they have any weight.

Blockchain technologies like Ethereum are widely believed to be the next big disrupter for industries ranging from law to shipping.

Often described as smart contracts, the technology uses a decentralized computer network to send messages which create a universally accessible ledger that can’t be edited or modified. Theoretically, with blockchain technology, business and legal transactions can be executed with a lower risk of fraud.

While Buterin was optimistic about the role Ethereum could play in replacing Visa, he was less certain about its impact on cloud computing giants like Amazon Web Services (AWS). AWS sells space on Amazon servers to third party websites like Netflix, which host vast amounts of data on AWS servers.

To disrupt the cloud industry, applications running on the Ethereum network would have to convince private companies that its decentralized structure is secure enough to host proprietary or otherwise sensitive content. Buterin doesn’t see that happening anytime soon.

“In general, there’s always going to be this large set of applications where decentralized approaches don’t work that well,” Buterin said.


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The US is no longer the world’s largest Bitcoin market

The US is no longer the world’s largest Bitcoin market


Stanley Chou / Stringer / Getty
Images

Japan has risen above the
U.S.
in the worldwide rankings for the largest
bitcoinexchange market. The
country now accounts for roughly 48
percent
of the global market share, reaching a high of 51
percent over the weekend.

This is thanks in no small part to the Chinese
government’s recent rulings
on the cryptocurrency. The nation first issued a ban on initial
coin offerings (ICOs)
and then requested that exchanges and
trading platforms cease operations by the end of September,
granting an extension until October 30 for OKCoin and Huobi.

Those deadlines are still weeks away, but traders aren’t waiting
around. Many that were previously operating in China have taking
their activity to Japan, causing the spike in the nation’s market
share — and reducing China’s from 15 percent to less than seven
percent in just three days.

It remains to be seen whether Japan’s current position will hold
or is a fleeting surge. One Chinese official has claimed that the
country’s ban on ICOs is a temporary
measure
, but the country’s position in the cryptocurrency
market might be forever changed if the current situation drags on
too long.

Disclosure: Several members of the Futurism team, including
the editors of this piece, are personal investors in a number of
cryptocurrency markets. Their personal investment perspectives
have no impact on editorial content.

Get the latest Bitcoin price here.

Read the original article on Futurism. Follow Futurism on Facebook. Copyright 2017. Follow Futurism on Twitter.



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Gundlach says bitcoin mania can go on without him

Gundlach says bitcoin mania can go on without him

Markets Insider

Just about everyone has questions about bitcoin these days, including Jeffrey Gundlach’s 86-year-old mom. 

Gundlach, DoubleLine Capital’s founder, said she texted with a link to a story urging readers to buy bitcoin. She wanted to know whether she should get in the game. 

But the cryptocurrency is not something that Gundlach himself is ready to participate in. 

“I’m going to let this mania go on without me,” Gundlach said during a webcast with clients on Tuesday. He did devote the first slide in his section on Fed policy to a bitcoin price chart.

“I philosophically don’t believe it’s unhackable,” he said, adding that he’s received pushback from “smart 20-somethings.”

Bitcoin was near $4,500 per dollar when Gundlach got the text from his mom. It crossed the $5,000 mark briefly, but has since rolled back, to about $3,765 on Wednesday.

“So, I’m sure she’s not interested in buying it now that it’s falling,” Gundlach said. He added that he didn’t have a price target on bitcoin.

Although bitcoin could run into regulatory hurdles in key markets like China, where domestic exchanges reportedly risk being closed, some investors are betting that it will only get more popular. Tom Lee, the co-founder of Fundstrat, forecasts that bitcoin could hit $6,000 by mid-2018.

Not everyone agrees, including Mohamed El-Erian, Allianz’s chief economic adviser. He told CNBC on Wednesday that he didn’t think governments would allow the massive adoption that traders have priced in. Bitcoin should be worth “at least half” of its current price, he said.   

Gundlach spoke a few hours after Jamie Dimon, JPMorgan’s CEO, said he would fire any trader who was transacting bitcoin. Bitcoin is “worse than tulip bulbs,” Dimon said, referring to the infamous speculative market for tulips in 17th-century Europe.   

“It’s interesting that somebody that high-profile is out there with such an interesting statement,” Gundlach said about Dimon. 

Get the latest Bitcoin price here.

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2 of China’s biggest cryptocurrency exchanges shutting down trading, bitcoin soaring

2 of China’s biggest cryptocurrency exchanges shutting down trading, bitcoin soaring



Flickr/zcopley

NEW YORK – Two of the largest cryptocurrency exchanges
in China, OKCoin and Huobi,
have released statements saying they will
shutdown all trading between bitcoin
and yuan 
on their exchanges by October 31.

They released seperate announcements on their websites Friday
morning. Trading between digital coins will still be permitted
for the time being, however. 

Bitcoin, which was reeling amid reports Thursday of a crackdown
on Chinese cryptocurrency exchanges by regulators, is actually
rallying now. The cryptocurrency was up 14.1% at $3,706 a coin at
10:59 a.m. ET Friday.

The price of bitcoin collapsed 16% against the dollar on Thursday
and continued its slide until early Friday morning amid
uncertainty about the future of the cryptocurrency and other
digital coins in China, one of the biggest markets for
cryptocurrencies.

On Thursday, 
BTCChina, the second largest
Chinese exchange, said it would stop trading at the end of
the month. Yunbi, another cryptocurrency exchange, also announced
it would shut its trading operations on Friday, according
to CoinDesk
, the cryptocurrency news site.  

Thursday night, however, there were some signs that Chinese
regulators could have a change of heart. 

Charlie Lee, the creator of litecoin, one of the
largest cryptocurrencies by market cap, tweeted that
OKCoin and Huobi were set to meet with regulators on Friday.
Many people in the cryptocurrency community viewed this as
a possible turning point, hoping the exchanges would be able
to convince regulators to “change their tune.”

Li Lihui, a senior official at the National Internet
Finance Association of China and a former president of the Bank
of China, said on Friday that regulators from different countries
should collaborate on cryptocurrencies, according to
reporting by Reuters


Bitcoin
Markets
Insider




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How Bitcoin, Ethereum, and other cryptocurrencies compare

How Bitcoin, Ethereum, and other cryptocurrencies compare



Rotariu
uses Romania’s first bitcoin ATM in downtown
Bucharest

REUTERS/Bogdan
Cristel


Unless you’ve been hiding under a rock, you’re probably aware
that we’re in the middle of a cryptocurrency explosion. In one year, the
value of all currencies increased a staggering 1,466% – and newer
coins like Ethereum have even joined Bitcoin in gaining some
mainstream acceptance.

And while people like Jamie Dimon of J.P. Morgan and famed value
investor Howard Marks have been extremely critical of
cryptocurrencies as of late, many other investors are continuing
to ride the wave. As we’ve noted in the past, the possible
effects of the blockchain cannot be understated, and it could
even change the backbone of how financial markets work.

However, even with the excitement and action that comes with the
space, a major problem still exists for the layman: it’s really
challenging to decipher the differences between cryptocurrencies
like Bitcoin, Ethereum, Ethereum Classic, Litecoin, Ripple, and
Dash.

For this reason, we worked with social trading network eToro to come up with
an infographic that breaks down the major differences between
these coins all in one place.

A description of major coins

Here are descriptions of the major cryptocurrencies, which make
up 84% of the coin universe.

Bitcoin

Bitcoin is the original cryptocurrency, and was released as
open-source software in 2009. Using a new distributed ledger
known as the blockchain, the Bitcoin protocol allows for users to
make peer-to-peer transactions using digital currency while
avoiding the “double spending” problem.

No central authority or server verifies transactions, and instead
the legitimacy of a payment is determined by the decentralized
network itself.

Bottom Line: Bitcoin is the original
cryptocurrency with the most liquidity and significant network
effects. It also has brand name recognition around the world,
with an eight-year track record.

Litecoin

Litecoin was launched in 2011 as an early alternative to Bitcoin.
Around this time, increasingly specialized and expensive hardware
was needed to mine bitcoins, making it hard for regular people to
get in on the action. Litecoin’s algorithm was an attempt to even
the playing field so that anyone with a regular computer could
take part in the network.

Bottom Line: Other altcoins have taken away some
of Litecoin’s market share, but it still has an early mover
advantage and some strong network effects.

Ripple

Ripple is considerably different from Bitcoin. That’s because
Ripple is essentially a global settlement network for other
currencies such as USD, Bitcoin, EUR, GBP, or any other units of
value (i.e. frequent flier miles, commodities).

To make any such a settlement, however, a tiny fee must be paid
in XRP (Ripple’s native tokens) – and these are what trade on
cryptocurrency markets.

Bottom Line: Ripple runs on many of the same
principles of Bitcoin, but for a different purpose: to serve as
the middleman for all global FX transactions. If it can
successfully capture that market, the potential is high.

Ethereum

Ethereum is an open software platform based on blockchain
technology that enables developers to build and deploy
decentralized applications.

In the Ethereum blockchain, instead of mining for bitcoin, miners
work to earn ether, a type of crypto token that fuels the
network. Beyond a tradable cryptocurrency, ether is also used by
application developers to pay for transaction fees and services
on the Ethereum network.

Bottom Line: Ethereum serves a different purpose
than other cryptocurrencies, but it has quickly grown to displace
all but Bitcoin in value. Some experts are so bullish on Ethereum
that they even see it becoming the world’s top cryptocurrency in
just a short span of time – but only time will tell.

Ethereum Classic

In 2016, the Ethereum community faced a difficult decision: The
DAO, a venture capital firm built on top of the Ethereum
platform, had $50 million in ether stolen from it through a
security vulnerability.

The majority of the Ethereum community decided to help The DAO by
“hard forking” the currency, and then changing the blockchain to
return the stolen proceeds back to The DAO. The minority thought
this idea violated the key foundation of immutability that the
blockchain was designed around, and kept the original Ethereum
blockchain the way it was. Hence, the “Classic” label.

Bottom Line: As time goes on, Ethereum Classic
has been carving out a separate identity from its bigger sibling.
With similar capabilities and a different set of principles,
Ethereum Classic could still have upside.

Dash

Dash is an attempt to improve on Bitcoin in two main areas: speed
of transactions, and anonymity. To do this, it has a two-tier
architecture with miners and also “masternodes” that help the
network perform advanced functions such as near-instant
transactions and coin-mixing to provide additional privacy.

Bottom Line: The innovations behind Dash are
interesting, and could help to make the coin more
consumer-friendly than other alternatives.

BONUS: Bitcoin Cash

Although not included in the graphic, we also wanted to add a
quick word on Bitcoin Cash. This new currency “hard forked” from
Bitcoin about a month ago, as a result of miner disagreements
about the future of Bitcoin. Here’s a detailed summary of the announcement.

Read the original article on Visual Capitalist. Get rich, visual content on business and investing for free at the Visual Capitalist website, or follow Visual Capitalist on Twitter, Facebook, or LinkedIn for the latest. Copyright 2017. Follow Visual Capitalist on Twitter.



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Ethereum plunging after reports China could ban cryptocurrency trading

Ethereum plunging after reports China could ban cryptocurrency trading




Ethereum is plunging.
MI

Ethereum is plunging on Thursday afternoon, trading down over 17%
to $228 per token, following reports that
Chinese regulators are taking steps to shut down the country’s
bitcoin exchanges and possibly ban all trading of digital
coins

BTC China, the second largest Chinese bitcoin
exchange, tweeted
Thursday
that it would stop trading of bitcoin on September
30.

“After carefully considering the announcement published by
Chinese regulators on Sept. 4, BTC China Exchange will stop all
trading on Sept. 30,” the exchange said.

On September 4, Beijing made
initial coin offerings, a red-hot cryptocurrency-based
fundraising method, illegal. ICOs often run on ethereum’s
blockchain to create new cryptocurrencies. Beijing also
suggested it would ban all cryptocurrency
trading. 

In an ICO, a company issues a new digital currency
that can either be spent within its ecosystem, a bit like
Disneyland dollars, or used to power part of the business. They
have help some companies raise millions of dollars in a matter of
seconds. 

Ethereum has been sliding since the announcement of the
Chinese ICO ban. 

According to
Reuters
, China plans to shut the country’s
cryptocurrency exchanges by the end of the month per
reporting from Yicai, a Chinese news outlet. The website

Crypto Coins News
 on Thursday
morning reported a local newsletter that said banning
exchanges was “certain.”

In February,
China blocked traders from withdrawing their bitcoin
.
They were eventually allowed to resume withdrawals in
June. 

The cryptocurrency market has come under pressure as of late. Its
market cap has slumped nearly $60 billion from its record high at
the beginning of September to $110 billion on Thursday.



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Pythagoras Pizza CEO Evan Kuo wants to create a new cryptocurrency for his workers

Pythagoras Pizza CEO Evan Kuo wants to create a new cryptocurrency for his workers



Pythagoras Pizza CEO Evan
Kuo

Evan Kuo

The main way that Silicon Valley companies keep employees loyal
is with
stock options
. Stick around for a year or two, and you get a
small slice of ownership in the company. It’s a good
incentive for workers to do their bit to increase the company’s
value.

It doesn’t really work that way in most other jobs though,
especially if you’re not an office worker. No matter how many
burgers you flip or skim-milk lattes you serve up, you won’t own
any of the company. And when employees aren’t sharing in any
of the value they create for a company, morale suffers and
turnover increases. 

Now, Evan Kuo, the CEO of San Francisco
venture-backed pizza-on-demand
startup Pythagoras Pizza, thinks he has a
clever plan to bridge those two worlds.

Kuo wants to create a new digital currency, to be
called “fragments,” that would give workers a piece of the
pie. The new currency would be sort of like Bitcoin, except that
it would be linked to the valuation of Pythagoras
Pizza itself.

If this plan works, Pythagoras drivers will earn
some fragments every time they deliver a pie. Every
order that a Pythagoras chef cooks up also generates
fragments. Even Pythagoras customers will be able to get in on
the action, with every friend referral resulting in a bounty of
fragments. 

The better Pythagoras’ business performs, the more each fragment
will be worth. It means that whether you work for Pythagoras
for two weeks or two years, you’re earning some kind of stake in
the company’s future performance, commensurate with your
contribution.

In the “gig
economy
,” where independent contractors bounce between
organizations on a job-by-job basis, Kuo’s plan could create
a framework to align workers’ interests with those of the
platforms they serve.  Kuo goes so far as to liken it to the
American Dream. Or at least, he says it could prove to the world
that cryptocurrencies like Bitcoin have more to offer the world
than just a
never-ending debate on whether or not there’s a bubble
.

Pizza miners

Like Ethereum, Bitcoin Cash, or any of the other digital
currencies inspired by the rise of Bitcoin, Kuo’s “fragments”
would be created and distributed using blockchain
technology. Anyone can create their own digital currency based on
blockchain; the blockchain provides a decentralized database that
keeps track of the currency.  

The trick is creating a currency that has a
value.

Kuo plans to give the fragments a base value
by pre-selling tokens to select, US-based investors. Those
tokens’ value will then be tied to the pizza business’ monthly
revenue. The better the business does, the higher the value of
each fragment. 

You can read Kuo’s in-depth proposal for
fragments here
.

Technically, what Kuo is proposing is a novel way to “mine”
cryptocurrency — the term for adding more currency to the
total pool of currency available.

In
Bitcoin, 

mining
is accomplished by having supercomputers solve ever-more-complex
math problems

. With Pythagoras Pizza, you’re mining a
new fragment every time you put a pizza in the oven.


pythagoras pizzaPythagoras
Pizza

This isn’t 
quite 
the same
as equity: Fragments won’t equate to any kind of ownership in the
company, and wouldn’t give you any voice in corporate matters.
But Kuo sees it as a way for workers, even part-time workers and
seasonal employees, to profit from the value they create for
Pythagoras. 

Right now, this is all theoretical. And there are a lot of big
ifs.

For one thing, digital currency is currently under the regulatory
microscope. This year has seen a glut of “initial coin
offerings,” or “ICOs,” where companies will issue a new digital
currency, sell it to credulous strangers to finance what they
promise is a game-changing new product, and then often vanish
with the money. Kuo says that he’s working with lawyers and other
experts to make sure that Pythagoras is on the up-and-up from the
jump.

“The expectation is that with the right up-front work, we
can get to a top level of compliance,” says Kuo.

Fresh from the oven

Kuo, who graduated from Berkeley with a robotics degree in 2006,
founded Pythagoras in 2015 after a stint
working at Yahoo and experience launching various
startups. 

He says that Pythagoras is enjoying 48% margins on an
average order size of $35 and steadily expanding its operations
across San Francisco. Pythagoras already has funding from
prominent Silicon Valley firms like Social Capital and Slow
Ventures.

However, Kuo says, the company’s growth curve looks more like a
“mom and pop shop” or a local San Franciscan restaurant, not a
“sexy, hot, on-demand startup,” says Kuo.

“It’s become a normal business,” laments Kuo. 

With fragments as an incentive, he foresees Pythagoras attracting
(and keeping) more employees, improving service and attracting
more customers. 

Then, says Kuo, the goal is to “get the city of San Francisco
mining fragments.”

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Bitcoin China exchange ban is certain, report says

Bitcoin China exchange ban is certain, report says

Bitcoin
continued to tumble Thursday after reports in Chinese
media showed the country’s regulators were moving closer to
shutting down exchanges.

Reports from
Bloomberg
and the Wall Street Journal on Monday first
indicated that China planned to ban trading of bitcoin and other
virtual currencies on its exchanges.

According to Bloomberg’s
Lulu Yilun Chen
, China Business News reported that the city
of Shanghai has verbally halted bitcoin exchanges. The website

Crypto Coins News
further cited a local newsletter that said
banning bitcoin exchanges was “certain.”

Bitcoin was down by about 6.6% to $3634.82 per dollar at 8:13
a.m. ET. It fell earlier this week after
JPMorgan CEO Jamie Dimon
said it was a fraud. 

The cryptocurrency has surged nearly 300% this
year. Markets
Insider

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