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Thread: All Information About Bitcoin

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    IMF Head: Cryptocurrency Could Be the Future.

    Christine Lagarde sees a path ahead for cryptocurrency.
    The managing director of the International Monetary Fund, or IMF, talked up the potential of virtual currencies to supplant traditional monies in coming decades on Friday. Cryptocurrencies, or virtual currencies, are a new class of digital assets powered by blockchains, distributed ledgers that made their name underpinning networks like Bitcoin and Ethereum.

    Unlike JPMorgan Chase CEO Jamie Dimon and billionaire hedge fund founder Ray Dalio, who have recently disparaged Bitcoin, the world's most well known cryptocurrency, Lagarde shared a rosier vision of the general technology's future with attendees of a Bank of England conference in London. "In many ways, virtual currencies might just give existing currencies and monetary policy a run for their money," she said.

    "It may not be wise to dismiss virtual currencies," Lagarde told the audience. "Instead, citizens may one day prefer virtual currencies."

    Lagarde devoted a third of her talk, which envisioned how financial tech may reshape the world by the year 2040, to the subject of cryptocurrency. She noted that digital money could gain popularity as engineers work through technology issues related to processing more payments through blockchain networks in the future.

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    ‘Nasi kerabu’ stall cashes in on Bitcoin trend.

    A humble nasi kerabu stall in the backwaters of Kelantan is the latest to jump onto the virtual currency hype by offering customers the option to pay in Bitcoins.

    Jijah’s NK Stall in Kampung Pauh, Badang, located about 25km south-west of the city here, is on the global map of merchants willing to accept the digital cryptocurrency.

    Retired army personnel Safiin Mohamed, 65, who introduced the digital payment system at his wife Azizah Derahman’s stall recently, said he believes Bitcoins will be the future medium of exchange.

    However, he lamented that the bitcoin fad has yet to catch on here, saying the stall only got eight transactions in two months.

    “This is because the value of Bitcoins keeps appreciating fast,” he said, saying one Bitcoin was now worth RM18,701 compared to RM23 four years ago.

    “Although customers need only pay 0.00025 in Bitcoin for a packet of nasi kerabu with grilled fish worth RM5, most still prefer paying cash,” he said.

    Safiin said those using virtual currency need not fear being robbed.

    “One does not need to carry cash, and only needs to scan the QR code from our mobile devices to make payment. Buy, scan and leave without fear of being robbed,” he said.

    The enterprising villager said he learnt all about Bitcoins from Google.

    “If we do not keep up with future trends, we will be left behind,” he added.

    International Monetary Fund managing director Christine Lagarde said recently that virtual currencies have the potential to replace traditional notes in the coming decades.

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    South Korean Crypto Community to Push Back Against ICO Ban

    Last week, South Korean regulators said they would ban all initial coin offerings. They are imposing a “prohibition on all forms of ICOs.” However, they have not implemented this ban yet. Now, startups in the area are pushing back against the impending ban.

    Leaders in the regional blockchain industry have said an ICO ban has no legal grounding. A Forbes article clarified, “Local crypto industry leaders argue that the ban is legally groundless. They fear overregulation will push local talent and currency to more welcoming jurisdictions like Switzerland, Singapore and Japan.”

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    Taiwan Follows Bitcoin-Friendly Japan, Avoids China & Korea ICO Bans

    Taiwan will not regulate against initial coin offerings (ICOs) and cryptocurrencies like bitcoin and will avoid the hardline stance taken by the likes of China and South Korea.

    In significant news today, Taiwan’s Financial Supervisory Commission chairman Wellington Koo has told a joint session of the parliament and the cabinet today that Taiwan will not follow the paths of China and South Korea in an outright ban on crypto-related activity. Instead, the head of Taiwan’s financial regulator pledged to adopt a friendlier stance to support the development and adoption of both cryptocurrencies and blockchain technology in the country.

    As reported by The News Lens, Koo expressed the official stance following a request by legislator Jason Hsu, a congressman from Taiwan’s Nationalist party which has long adopted a deregulatory pro-FinTech stance.

    In quotes reported by the publication, Hsu stated:

    Just because China and South Korea are banning, doesn’t mean that Taiwan should follow suit – there is a huge opportunity for growth in the future. We should emulate Japan, where they treat cryptocurrency as a highly regulated, highly monitored industry like securities.
    According to Hsu, today’s statements by Koo will also be followed by the successful passing of the “Financial Technology Innovation Experimentation Act’, in the same parliamentary session. If the bill passes, the legislation will effectively establish a fintech sandbox for cryptocurrency and blockchain startups in a deregulated space.

    Today’s comments from Taiwan’s regulatory chief represents a decidedly different approach to regulating cryptocurrencies and initial coin offerings (ICOs), a radical new form of fundraising powered by cryptocurrencies like bitcoin and ether.

    A little over a month ago, China’s central bank announced a blanket ban on all ICOs, deeming them to be an illegal method of fundraising. The draconian legislation snowballed and is leading to the shuttering of bitcoin exchanges in mainland China. A week ago, South Korea followed suit and banned ICOs regionally. Japan, on the other hand, moved to follow legislation that acknowledged bitcoin as a legal method of payment from April this year.

    Last week, Hsu described the crippling regulation lead to “a chain reaction” of warnings by regulators and watchdogs around the world.

    “I am worried that with both China and South Korea banning ICOs, all this hot money will flow into Taiwan’s stock market and real estate,” Hsu was reported as stating by the Financial Times last week. Any fears of Taiwan joining China and South Korea with blanket bans, as suggested by the FT report, have now been quelled by the friendlier regulator move by Taiwanese authorities today.

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    Bitcoin rallies to hit a one-month high but experts warn of a volatile upcoming event

    • The bitcoin price hit a one-month high on Monday after a rally over the weekend
    • Despite a crackdown on bitcoin in China, other markets like Japan have had a positive impact on the price of the digital currency
    • The cryptocurrency has had a volatile month after hitting an all-time high then falling below $3,000


    Bitcoin staged a rally over the weekend to hit a one-month high despite experts warning of a potentially volatile upcoming event for the cryptocurrency.

    The digital currency traded at $4,626.26 on Monday morning at 4 a.m. London time, its highest level since September 8, according to data from industry website CoinDesk. It was up over 5 percent from the start of trade on Saturday.

    Bitcoin has had a rocky few weeks. It hit an all-time high on September 2 of $5,013.91, before declining sharply to below $3,000 in the next two weeks.

    Investors were concerned about the sharp price rise of bitcoin but also some of the regulatory clampdowns by China. The world's second-largest economy banned initial coin offerings (ICOs), which is a new way for cryptocurrency start-ups to raise funds by issuing digital tokens. The largest bitcoin exchanges in China have also shut down their operations there.

    And at the same time, major business leaders have poured cold water over bitcoin. JPMorgan Chase CEO Jamie Dimon said bitcoin "is a fraud" last month.

    Japan boost

    But some of the negative sentiment has been offset by other positive developments in the industry.

    Japan appears to be filling the void left by China with supportive regulation. Earlier this year, Japan legalized bitcoin, with major retailers beginning to accept it as a form of payment. And last month, the country's financial services watchdog recognized 11 companies as registered cryptocurrency exchange operators.

    Institutional investors are also beginning to look at bitcoin more seriously. Goldman Sachs is considering the launch of a new trading operation focused on bitcoin and other digital currencies, a company official told CNBC last week.

    "Bitcoin's rally is continuing off the back of a more certain regulatory environment across the world, most notably in Japan. This has encouraged more institutional funds to enter the market and we are finally seeing the effect of this additional liquidity," Aurélien Menant, founder and CEO of Gatecoin, told CNBC by email on Monday.

    Volatility ahead

    Menant told CNBC last week that bitcoin could get close to $6,000 by the end of the year, but short-term volatility could be ahead. That's because earlier this year, bitcoin underwent a split or "fork" which created another cryptocurrency called bitcoin cash.

    That split happened due to technical changes in the underlying technology behind bitcoin, known as the blockchain. But that change, which is currently being implemented, could be rejected by a large section of the bitcoin community, which could actually lead to another fork.

    "The forthcoming bitcoin fork in November will result in greater volatility and risk for this new asset class," Menant said.
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    Bitcoin suffers mystery flash crash on popular cryptocurrency index

    • The digital currency had hit a high of $4,867 early on Monday, according to industry website CoinDesk, its highest since September 2.
    • But the same index showed that it dropped by over $600 to a low of $4,200 at roughly 9:00 a.m. London time.
    • CNBC checked the four exchanges that make up the CoinDesk bitcoin price index, but none showed any sign of a flash crash.


    Bitcoin appeared to have a flash crash on Tuesday morning after falling over $600 in a few minutes, but only one index logged the price move.

    The digital currency had hit a high of $4,867 early on Monday, according to industry website CoinDesk, its highest since September 2. But the same index showed that it dropped by over $600 to a low of $4,200 at roughly 9:00 a.m. London time.

    It was down some 12 percent for the session but quickly recovered within moments and was trading at $4,787 by 9:10 a.m. London time.

    The CoinDesk bitcoin price index is made up of the average price from four exchanges: Bitstamp, Coinbase, itBit, and OKCoin. Other indexes like Brave New Coin's bitcoin liquid index showed no flash crash. Nor did CryptoCompare.com.

    CNBC checked the four exchanges that make up the CoinDesk bitcoin price index, but none showed any sign of a flash crash. CNBC has reached out to CoinDesk to see whether it may have been a problem with its own index.

    At around the same time as the crash, the Russian central bank proposed fresh restrictions on exchanges selling the cryptocurrency.

    Sergei Shvetsov, the first deputy governor at the Russian central bank, described the currency as "dubious" on Tuesday morning, according to Reuters.

    "We can not stand apart. We can not give direct and easy access to such dubious instruments for retail (investors)," Shetsov said, according to the news agency.

    Shvetsov, speaking at a conference in Moscow, said that Russia will block access to the websites of exchanges that offer cryptocurrencies such as bitcoin.

    But it's thought unlikely that any regulatory change in Russia would move the price that much given that the country accounts for a very tiny portion of the entire bitcoin market.
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    4 Things That Can Push Bitcoin Price to $5,000 and Beyond

    Those with even the shortest memory will recall that Bitcoin price just about broke the $5,000 mark in early September, before a substantial sell-off coincided with some vitriol from Jamie Dimon, and China cracking down on ICOs.

    Now, however, the digital currency has bounced back and is well on its way to $5,000 again. There are a few factors that’ve got it here - none more so than the fact it was the best performer through the third quarter.

    However, there are still a few factors that are pushing it, and a few reasons why $5,000 is on the horizon, if not even higher.

    The return of the buzz
    There is no doubting the fact that China’s approach, and Jamie Dimon’s attack, caused a perfect storm for Bitcoin belief. It was the coming together of the digital currencies’ two big enemies - institutionalised money and regulators - who were flexing their muscle in a show of perhaps fear.

    However, those attacks have come and gone, and Bitcoin is none the worse for them, as there’s a buzz returning. What will really catalyse it will be a rollback of China’s ban - something that’s possible with an upcoming Communist party election - or perhaps Jamie Dimon to have a change of heart.

    Financial crisis
    Bitcoin has already shown that it laughs in the face of impending global disaster when the global market fell almost a percent as tension between the US and North Korea spiked.

    "Bitcoin is a safe haven that is unaffected by normal market factors, and as these factors continue to escalate there could be a bigger trend towards digital currencies."
    Internally, countries like Zimbabwe and Venezuela are hedging their bets on Bitcoin as their markets crumble around them.

    Wall Street stamp of approval
    While there’s a major dividing line on the allegiances of Wall Street bankers and institutions, many more are coming over to the digital currency side, leaving Dimon and Jordan Belfort stranded.

    It was the arrival of institutionalized investors after the Aug. 1 split that saw Bitcoin tear off on another rally, and another big boost of endorsement from these trusted investors could be a tipping point.

    Free money
    At the end of October there is another fork coming to Bitcoin in the form of Bitcoin Gold, however, the term ‘fork’ is used quite lightly in this instance.

    "It’s more of an air-drop than a chain split. Everybody that owns Bitcoin will also own Bitcoin Gold once the network goes live, but transactions on the Bitcoin Gold network won’t affect Bitcoin’s network, or vice versa."
    Thus, many think that Bitcoin is booming - and altcoins declining - because there’s a chance of doubling your haul when this fork comes at the end of the month.

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    Bitcoin now bigger than Bayer, Goldman Sachs & Nike

    The value of the world’s largest cryptocurrency bitcoin has broken the $5,800 mark, hitting another all-time high before retreating to the $5,600-$5,700 level, still close to the maximum.

    Its market capitalization is approaching $97 billion. If bitcoin were a company, its market cap puts it in the same league as some of the world's biggest corporations.

    The cryptocurrency would be in 77th in PwC's list of the top 100 corporations, bigger than Bayer, Goldman Sachs, UPS, Nike, and Mitsubishi.

    Bitcoin is up over 480 percent year-to-date.

    The reason behind the rally is talk China may reverse the ban it imposed on cryptocurrency exchanges last month. The Chinese central bank also declared initial coin offerings (ICOs) illegal and banned fundraising through ICOs.

    After the Chinese ban, the Japanese yen consolidated the global trade volume, with 57 percent of bitcoin’s fiat exchange volume. The US dollar and South Korean won follow.

    Some investors say bitcoin bulls could test a new ceiling of $6,500. They are also buoyant that banking giant Goldman Sachs is likely to start trading bitcoin.

    Mike Novogratz, Galaxy Investment Partners, recently told CNBC that bitcoin can hit the $10,000 mark soon, but with a warning.

    “Remember, bubbles happen around things that fundamentally change the way we live,” he said.

    “The railroad bubble. Railroads really fundamentally changed the way we lived. The internet bubble changed the way we live. When I look forward five, 10 years, the possibilities really get your animal spirits going.”

    Bitcoin is likely to become "the biggest bubble of our time," he added.

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    Wikileaks founder Assange claims he made 50,000% return on bitcoin.

    • Julian Assange thanked the U.S. government after it pushed companies like MasterCard to block payments to Wikileaks in 2010
    • This forced Wikileaks to accept payment in bitcoin

    Wikileaks founder Julian Assange claims his organization has made a 50,000 percent return on bitcoin after investing in the cryptocurrency in 2010 — and it's all thanks to the U.S. government.

    In a tweet over the weekend, Assange posted a screenshot of bitcoin prices on July 18, 2010 and October 14, 2017 on industry website CoinDesk. In this period, the price of bitcoin went from $0.06 to around $5,814. This represents a 9,689,900 percent increase.

    Assange, however, said that he has made a 50,000 percent return, presumably investing in bitcoin over the six-year period.

    And the Wikileaks founder said this was because the U.S. government forced payment companies like Visa and MasterCard to carry out "an illegal banking blockade" against his organization.

    Wikileaks founder Julian Assange claims his organization has made a 50,000 percent return on bitcoin after investing in the cryptocurrency in 2010 — and it's all thanks to the U.S. government.

    In a tweet over the weekend, Assange posted a screenshot of bitcoin prices on July 18, 2010 and October 14, 2017 on industry website CoinDesk. In this period, the price of bitcoin went from $0.06 to around $5,814. This represents a 9,689,900 percent increase.

    Assange, however, said that he has made a 50,000 percent return, presumably investing in bitcoin over the six-year period.

    And the Wikileaks founder said this was because the U.S. government forced payment companies like Visa and MasterCard to carry out "an illegal banking blockade" against his organization.

    In 2010, MasterCard blocked its products being used to pay WikiLeaks. Paypal also restricted the account used by WikiLeaks after it said the group has violated its policy.

    Assange said that this is the reason WikiLeaks invested in bitcoin. The cryptocurrency allows anonymous payments and can be moved around the world easily. It is, however, very volatile.

    Wikileaks is notorious for publishing classified government documents. Assange was fighting a legal battle with Swedish prosecutors who accused him of rape, a claim he denied. Earlier this year, Sweden dropped its investigation into Assange.

    In 2012, Assange was granted asylum in the Ecuador embassy in London and has holed up there ever since.

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    TOP STRATEGIST: Bitcoin will soar to $25,000 in 5 years

    In the first episode of "the bit," FundStrat Global Advisor co-founder Tom Lee explains different methodologies for valuing bitcoin. Lee shares his short-term and long-term bitcoin price targets based on these valuation methods. Following is a transcript of the video.

    Tom Lee: I'm here with Sara to talk about why we believe bitcoin could reach $25,000 in 5 years.

    Sara Silverstein: So you actually have a few research notes about this.

    Lee: Yes.

    Silverstein: And you’re — can you talk about your short-term model first. Where do you see bitcoin going and what valuation method are you using?

    Lee: Yeah, in the short-term we think bitcoin has really followed very closely the idea of acting like a social network. Meaning the more engagement there is, the greater the value rises. And in the short-term, we think bitcoin will reach at least $6,000 by mid-2018.

    Silverstein: And you’re using Metcalfe’s Law, can you explain that?

    Lee: Yeah, so Metcalfe’s a professor. He actually came up with a theorem based on George Gilder, which is the value of a network is the square of the number of users. And so if you build a very simple model valuing bitcoin as the square function number of users times the average transaction value. 94% of the bitcoin moved over the past four years is explained by that equation.

    Silverstein: Wow. Just to use an example, so this explains the network effect. Like one fax machine is worthless because there's nobody you can fax. But once all of your friends have fax machines, it becomes very valuable. So has this been effective in valuing things, in the past, that have a strong network but weren't producing any money?

    Lee: Yeah, so three use cases — or businesses — where Metcalfe’s Law really explain the growth of the market value, is Facebook, Alibaba, and Google. And these are all examples where the number of users — like if you double the number of users, you're more than doubling the utility value. It's a little bit like the commercial in the 70s, you know, Prell. When you tell your friends, and they tell their friends, and so on.

    Silverstein: And so your long-term valuation model — you’re looking at it — bitcoin, as a substitute for gold, as an alternative currency?

    Lee: Yes, that’s right, and it's really — what we were trying to do is recognize that the creation of value in the future is in the digital world. I mean, all future great business are going to be digital. And with that concept, bitcoin represents a store of value because it's an encrypted — personal encrypted database, that for seven years hasn't been hacked. I mean, that is a way to store value. And if personal information is our gold, bitcoin is our digital gold. So we think that the gold market, which is 9 trillion, and for a generation of investors gold was their store of value. I think this next generation of young people view bitcoin as their store of value. And if it captures 5% of the gold market, it's worth at least $25,000 per unit.

    Silverstein: And that’s the big number, that your — the $25,000 per unit hinges on the 5% of the money going into gold, going into bitcoin. So how do you come up with the 5%?

    Lee: We explain this in our research. It's a very — it's actually the most conservative collection of elements to get to the 5%. Because number one, we assume that gold only appreciates essentially a nominal GDP. So there's no inflation. And we assume that money supply grows at slower rates than it has historically. And then the 5% number, really reflects the assumption that investors will allocate in their blended portfolio only 5% to alternative currencies. Today, that allocation is much greater, it's closer to 10% or 15% in some portfolios. So, but at a 5% allocation that would value bitcoin at $25,000. You could easily get to $100,000, $200,000 numbers.

    Silverstein: Is bitcoin special or is this just about all cryptocurrencies?

    Lee: It's both. I mean, I think what’s unique is bitcoin is the dominant coin, or token, in a growing universe. I mean, there are 630 tokens out there now. But what we found in our research is that the more coins that are being issued, the more are using bitcoin as their master ledger, which means bitcoin's value is actually growing as there's more coins.

    Silverstein: And you mentioned to me earlier that if some big investors get interested in bitcoin that the price could skyrocket really quickly?

    Lee: Yeah, that’s right. It's — what's interesting is bitcoin is uncorrelated to other asset classes right now, and I think it really speaks to the fact that it's not institutionally held. It's really held by miners, and enthusiasts. Most of them are what they call hodlers. You know, they're not sellers of the coin. So the liquidity of bitcoin is deceptively small. So if you can imagine, you know, there was recently of a very well-known portfolio manager starting at a $500M hedge fund. If he employs typical leverage, he's buying $2.5B of bitcoin. There isn't $2.5B of bitcoin available to purchase. So I think you can easily see a liquidity-based move in bitcoin that's much beyond our target prices.

    Silverstein: How much beyond?

    Lee: Well that's getting into the realm of — nothing I would officially endorse — but, you know, when you think about liquidity spikes. Look what happened to oil. Remember oil went to $300 on a liquidity spike. So it probably would be easy to imagine that bitcoin could be $75,000 or something like that.

    Silverstein: And can you help me understand what bitcoin is? Is it a currency? Is it an asset? Why do we compare it to gold? Like, why is that a fair comparison? And what is gold? Is it a commodity or a currency?

    Lee: Yeah, it's a great question, because I think, as a primer someone has to finally accept what bitcoin represents. And what it is, is at the core, it is just a very well designed database. One that because of the way the encryption is built into it, is very hard to crack. So, unlike typical databases where the encryption key is held by central entity, bitcoin has this thing called miners and nodes. That each of the nodes keeps a copy of the database, and therefore you need 51% of the nodes to agree on a transaction to say it's valid, otherwise it'll say it's a spoof transaction. Which means that bigger the database grows, and the more miners there are, the harder it is to crack. So bitcoin is encryption, but the encryption strength grows as there's more miners. And today, it’s estimated that it would cost about $31B to create one fake coin.

    Silverstein: Wow.

    Lee: So it's easier to break into a central bank, like Swift in Nigeria, and steal $50M from there, than it is to try to get one fake bitcoin.

    Silverstein: And do you think it's fair — I know that it’s very hard to understand the valuation of something like a bitcoin. Do you think it's fair to look at the blockchain, that it represents, and say let's look at the value of this, and the bitcoin is what keeps us going, and keeps it secure, and so that's where the value comes from?

    Lee: Yeah, actually, that’s a really important point. That by design — bitcoin was designed to be what they call a fat protocol. Which means the protocol error, which is the encryption, is trying to reward users of it. And it's rewarded through paying miner fees. It's a little bit like — imagine if — remember Facebook's value is its users, but all of the upside in owning Facebook was the investors. Bitcoin said okay look let's reward Facebook users. That the more there are, the more money you get. That's how bitcoin’s designed.

    Silverstein: And the more externalities you create by participating in Facebook, the more you'll get paid, basically?

    Lee: That's right and also, because of the nature of bitcoin, it means the applications that you build on top of it aren't as valuable. Because if you try to build a banking system on bitcoin — well it has better encryption than an application. So bitcoin itself will always have more value than the applications built for it.

    Silverstein: So, this is 100 grams of gold, which at the time that I got it was worth about the same as a bitcoin. Which you think is a better store of value? Do you think that I should switch my bitcoins for gold or my gold for bitcoins?

    Lee: There's a whole generation of young people — including my daughter who’s a CS major — that would say they don't understand why gold at all represents a store of value. And it's important to keep in mind, you know, for many years, gold’s price never even moved when it was – when the dollar was on the gold standard. So I would say I would easily change that for a bitcoin.

    Silverstein: Great, and when gold started trading freely — you point out in one of your notes — that the volatility looked just like bitcoin, and then eventually it settled down?

    Lee: That's right. You know, when people talk about bitcoin’s volatility today, they're forgetting that when we went off the dollar — the gold standard on the dollar, gold’s volatility for 4 years was about the same as bitcoin’s volatility today.

    Silverstein: Great, thank you so much.

    Lee: Yeah, thanks for having me.

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