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Category: bitcoin – Page 64

Quantum Foundation Combines Bitcoin and Ethereum to Create Qtum

Nice try; no faith it will succeed long term with QC.

Singapore-based Quantum Foundation announced that it is working on a new project called Qtum, which combines the technology of both bitcoin and ethereum to facilitate blockchain technology adoption for corporations. Qtum is an open-source blockchain project that aims to build smart contract functionalities that can be implemented at an enterprise level.

The initial financial backing of $1 million by several industry leaders is a testament to the validity of the technology that the Qtum project is creating but also demonstrates full faith in its team of developers. Early-stage angel investors in the project include ethereum co-founder Anthony Di Iorio, Fenbushi partner Bo Shen, and OKCoin CEO Star Xu, among others. The Qtum project also intends to launch its native cryptocurrency to support the project through a crowd sale to raise further funds.

Cancer agency hacked for data won’t pay ransom

Pathetic. This is truly a new low for Ransomware hackers.

MUNCIE — An Indiana cancer services agency says it will replace and rebuild its data after a computer hack demanding a ransom.

Cancer Services of East Central Indiana-Little Red Door in Muncie says it was hacked Jan. 11 and the hackers demanded a ransom of 50 bitcoins, or about $43,000, for access to its data.

Executive Director Aimee Fant says most of the agency’s data is in cloud storage and it will replace its server with a secure, cloud-based system. She says it won’t pay a ransom when all of its funds must go toward serving cancer patients and their families and preventative screenings, and it will be back up and running at full capacity by the end of the week.

Can Bitcoin Flourish with a Capped Supply?

The answer may be counter-intuitive: Not only can Bitcoin be widely adopted under a supply cap, its trust and integrity are a direct result of a provably limited supply. As a result, it will flourish because it is capped.

Everyone Can Own and Trade a Limited Commodity, IF…

…if it is both measurable and divisible. Bitcoin has a capped supply just as gold has a capped supply. Although both assets will be mined for some time into the future, there is only so much that will ever be uncovered. Thereafter, the total pie cannot grow.

But the transaction units will continue to grow as needed, because the pie is divisible into very, very tiny units:

There will eventually be 21 million BTC and each coin is divisible into 108 units. This yields (21 million * 100 million), or 21 trillion exchangeable units. And, it can be divided further by consensus.

As Bitcoin is adopted—whether as a simple payment instrument, an investment asset or even as national currencies around the world—each unit of the limited supply simply rises in value. If thought of as a currency, with a value established by supply & demand, it leads to a deflationary economy.

But, Isn’t Deflation Bad for the Economy?

It’s common to associate deflation with economic ills. One need only glance back at the the last century to conclude that deflation coincides with wars, joblessness, recession and a crippling concentration of wealth. Perhaps, just as bad, the tools used to pull a nation out of deflation often force governments to cherry pick beneficiaries of stimulus spending.

But it is important to note that deflation plays no role in causing these things. On the contrary, it is an effect rather than a cause… In fact, when a supply cap is introduced as a designed control input for monetary policy, all sorts of good things follow. I address these in various answers at Quora. Dig in:

Philip Raymond co-chairs Cryptocurrency Standards Association. He was host and producer of The Bitcoin Event in New York. In his spare time, he edits A Wild Duck

US Government Escalates Push for Post-Quantum Cryptography

Federal agencies of the US government are expanding their calls for quantum computing resistant encryption methods. In effect, the National Institute of Standards (NIST) recently announced a request for public-key post-quantum algorithms. This action follows warnings from the National Security Agency (NSA) about the risks of potential quantum-based cyberattacks and the NSA’s appeal for developing post-quantum algorithms.

Also read: New Developments in Quantum Computing Impact Bitcoin

Moreover, in the near future, it might possible for anyone to manipulate the awesome power of quantum computing. The astronomical price of a quantum computer would not be a limitation because, for example, IBM is offering to the general public quantum computing via the cloud.

Bitcoin Arbitrage: Can you profit?

At Quora, I occasionally play, “Ask the expert”. Today, I was asked if the difference between quotes at various Bitcoin exchanges presents a profit opportunity.

In addition to my answer, one other cryptocurrency enthusiast offered pithy, one-line response: He said “Buy local, sell internationally and pocket the difference!” I tend to believe the opposite is more likely to generate profit: Buy internationally and sell locally. But, I am getting ahead of myself. Here is my answer [co-published at Quora]…

Question:
A Bitcoin exchange in my country quotes a different rate than
international markets. Can I profit from the price difference?

Answer:
Buying and selling a commodity with the intention of profiting from the difference in price in various markets, regions or exchanges is called arbitrage. Typically, the item must be widely traded and fungible. Although it can be a tangible item (one that must be delivered or stored, like gold, oil, frozen orange juice or soy beans), arbitrage is more practical when applied to an ‘item of account’, such as foreign currency, equity shares, stock futures, or Bitcoin.

With this in mind, Bitcoin qualifies as a fungible item of account. If you see a different price at vaious exchanges (or if you believe that you can source personal sales at a higher price than the market spot price), then you have found an opportunity for arbitrage. But hold on! It is not so easy…

  1. The arbitrage opportunity is often illusory. For example, the cost difference that you observe in market quotes may be overshadowed by the bid/ask spread or by fees, which can be both fixed and a percentage.
  2. The arbitrage opportunity is transient. It is there for a few seconds and then it vanishes in the next quote. For this reason, successful arbitrage players must be very adept at day-trade techniques. To avoid massive risks, you need up-to-the-second quotes, fast trading tools, and the ability to simultaneously freeze your purchase and sale price.
  3. Trust is never golden! Even with these tools and promises, when a commodity begins to move in either direction, you will find that a buyer or seller often finds a way to renege on the agreed price. These are not random events…When a trading partner abandons a transaction, it always work against you.
  4. Some exchanges (and even some national regulatory agencies) prohibit rapid and repeated trading. This may be to discourage speculation or it may be designed as a circuit-breaker (a mechanism to avert the cascade effect that sometimes results from pre-programmed trades). These halts on quick trades can wipe out your gains, or worse. They can turn your investment into a horrible mess.
  5. Some big exchanges have built-in arbitrage mechanisms that quickly adjust prices and even buy and sell on their own account to keep their limit order books in sync. They are on the front lines and you aren’t! This fact, alone, should suggest give you pause. The opportunities for an outsider are severely limited by these ‘inside’, self-adjusting trades.
  6. Other legal risks: If the transaction is later deemed to be illegal in the jurisdiction of any party, your exchange accounts may be frozen or your privileges revoked. Unlike p2p Bitcoin transactions, exchange transactions can be reversed. Again, these legal snafus will always work against you. In fact, sometimes, they were pre-planned scams from the start!
  7. Finally , there are sometimes good reasons for different prices in different markets. For example, national and local regulations may burden to the consumer cost for an item, or the seller may be required to pay a fee or tax to some authority or regulatory agency. If you dodge these costs, you may be violating laws and subject to penalties or punishment. You may even put your customer at risk.

I am neither an arbitrage player nor a day trader. These are just a few warning bells that come to mind when I think about such activity. You can be sure that this list of risks only scratches the surface. Bitcoin is remarkably fluid and many people flaunt regulations. For this reason, I am confident that opportunities for profitable arbitrage are rare and very tiny (small gain for a big risk).

Have I scared you away from Bitcoin arbitrage? If not, proceed with extreme caution and don’t bet the family ranch! Once you have some experience, come back and post feedback below. I have dabbled in options arbitrage, but never with Bitcoin or any currency. Since I don’t have first-hand experience, your feedback will be appreciated.

Philip Raymond is co-chair of Cryptocurrency Standards Association,
host of The Bitcoin Event (New York), and editor at A Wild Duck.

Is it too late to get into Bitcoin and the Blockchain?

At Quora, I occasionally role play, “Ask the expert” under the pen name, Ellery. Today, I was asked “Is it too late to get into Bitcoin and the Blockchain”.

A few other Bitcoin enthusiasts interpreted the question to mean “Is it too late to invest in Bitcoin”. But, I took to to mean “Is it too late to develop the next big application—or create a successful startup?”. This is my answer. [co-published at Quora]…

The question is a lot like asking if it is too late to get into the television craze—back in the early 1930s. My dad played a small role in this saga. He was an apprentice to Vladamir Zworykin, inventor of the cathode ray tube oscilloscope. (From 1940 until the early 2000s, televisions and computer monitors were based on the oscilloscope). So—for me—there is fun in this very accurate analogy…

John Logie Baird demonstrated his crude mechanical Televisor in 1926. For the next 8 years, hobbyist TV sets were mechanical. Viewers peeked through slots on a spinning cylinder or at an image created from edge-lit spinning platters. The legendary Howdy Doody, Lucille Ball and Ed Sullivan were still decades away.

But the Televisor was not quite a TV. Like the oscilloscope and the zoetrope, it was a technology precursor. Filo T. Farnsworth is the Satoshi Nakamoto of television. He is credited with inventing TV [photo below]. Yet, he did not demonstrate the modern ‘cathode ray’ television until 1934. The first broadcast by NBC was in July 1936, ten years years after the original Baird invention. (Compare this to Bitcoin and the blockchain, which are only 7 years old).

Most early TV set brands died during the first 10 years of production: Who remembers Dumont, Andrea and Cossor? No one! These brands are just a footnote to history! Bear in mind that this was all before anyone had heard of Lucille Ball, The Tonight Show or the Honeymooners. In the late 1950s, Rod Serling formed Cayuga Productions to film the Twilight Zone in New York. Hollywood had few studios for dramatic television production, and the west coast lacked an infrastructure for weekly episode distribution.

Filo T. Farnsworth demonstrates an advanced television receiver

Through the 1950s (25 years after TV was demonstrated), there was no DVR, DVD or even video tape. Viewers at home watched live broadcasts at the same time as the studio audience.

The short answer to your question: No. Absolutely not! It’s not too late to get into Bitcoin and the blockchain. Not too late, at all. That ship is just pulling into the dock and seats are mostly empty. The big beneficiaries of blockchain technology (it’s application, consulting, investing or savings) have not yet formed their first ventures. In fact, many of the big players of tomorrow have not yet been born.

Philip Raymond is a Lifeboat columnist and contributor to Quora. He is also co-chair of Cryptocurrency Standards Association and editor at A Wild Duck.

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