Correlation between cryptocurrency value and exchange listings: Expert Blog

By Munair Simpson - December 21, 2017 (cointelegraph.com)

There is a positive correlation between the value, or market capitalization, of a cryptocurrency and the number of exchanges that it is listed on. For the top 1,000 cryptocurrencies, the correlation is over 50 percent. Rudimentary data analysis indicates that the market capitalization of the coin or token crudely increases with exchange listings. However, correlation is not causation and it is not wise to conclude that simply listing a cryptocurrency on more exchanges always adds more value to the cryptocurrency.

Correlation

Correlation explains how much two variables are related. A correlation of 100 percent would mean that the positive change in one variable is perfectly related to the positive change in the other variable. If the correlation between cryptocurrency value and exchange listings was 100 percent, then it would possible to observe an exactly proportional increase in market capitalization with an increase in the number of exchange listings.

Since the correlation is over 50 percent, it might be tempting to list on as many exchanges as possible to maximize token value. Do not be tempted. Even though market capitalization and the exchange listings are somewhat linearly correlated, it does not mean that listing on more exchanges definitely results in an increase in market capitalization. Especially when a little more analysis reveals the presence of major outliers.

Outliers

Thanks to the Coin Market Cap API it is easy to observe outliers in the top 1,000 cryptocurrencies. Dumping the market capitalization and exchange listing data into Google Sheets or an RStudio dataset helps to explain a lot. Plotting value against listings shows that cryptocurrencies like Bitcoin are not normal in comparison to the majority of other cryptocurrencies.

Plotting the log of market capitalization against exchanges listed reveals roughly three different clusters of value in the cryptocurrency world.

Clusters of value

The first cluster includes Bitcoin, Litecoin, Ethereum and Bitcoin Cash. This group of cryptocurrencies are all listed on over 75 exchanges. The second cluster of cryptocurrencies are scattered between 15 and 55 exchange listings. The second includes DASH, Ripple, ZCash, and popular cryptocurrencies. Finally, the vast majority (~98%) of cryptocurrencies have 15 or fewer exchange listings.

Statistical summaries show that median cryptocurrency is listed on just two exchanges and the average is listed on just under four exchanges. Using a box plot to graphically describe the data shows the large number of outliers in relation to the majority of cryptocurrencies.

Box Plot of Exchange Listings. Data obtained from http://www.coinmaketcap.com on Dec. 10th 2017.

In general, the major outliers widely function as mediums of exchange and stores of value. To be globally valuable as intermediary instruments used to facilitate buying, selling or trading goods and services, these cryptocurrencies should be listed on many exchanges as possible. Currencies generally have more legitimacy the more widely they are used, and listing on many exchanges advances those network effects.

Not all of the outliers present in the dataset serve as money. Ethereum is an exception. Though it was designed with a different purpose in mind, the market decided that it too should function as a medium of exchange and store of value.

There are other exceptions in the first and second cluster of cryptocurrencies. Qtum and TenX were also not purposed as mediums of exchange, yet they are listed on over 15 exchanges.

Strategy implications

In spite of these outliers, analyzing the relationship between value and exchange listings has implications for cryptocurrency strategy. Further dividing cryptocurrencies into subsets and rerunning the analysis provides more meaningful information to can reinforce or redirect the intuition of a cryptocurrency strategist.

Knowing that the outliers are primarily used as stores of value or mediums of exchange, it only makes sense to list widely if planning to compete with cryptocurrencies used as money. There are always exceptions. However, if the purpose of a cryptocurrency is to be a better form of money, then it may need to be widely listed to in order to compete with the other widely listed currencies.

For example, cryptocurrencies competing to be a medium of exchange in Venezuela may increase their market capitalization through listing on a Venezuelan cryptocurrency exchange. With each new geographical market entered, it might experience additional increases in value.

This might not be the case with tokens. Since tokens usually represent an asset, the economics of valuation with respect to exchange listings may be different. Being listed on a Venezuelan exchange may add no value at all.

Security tokens may observe increased market capitalization with exchange listings, as investors will appreciate more trading options in the case there are problems at one of the major centralized exchanges. However, there will most likely be diminishing returns to increasing exchange listings.

The long tail

Focusing on cryptocurrencies with fewer than 15 listings makes sense for getting a rough idea of the relationship between value and exchange listings for average tokens. This subset is the third cluster of cryptocurrencies. They represent over 97 percent of the top 1,000 cryptocurrencies. This cluster also includes cryptocurrencies, like IOTA and NEM, which are not tokens but are highly valued and listed on fewer exchanges than their peers.

Top 1000 Cryptocurrency [Data Source: http://www.coinmarketcap.com]

Graphically, with the aid of a histogram, it is possible to observe the concentration of cryptocurrencies. The chart exposes the first and second clusters as the long tail cryptocurrency exchange listings.

Focusing third cluster makes it possible to notice that the linear correlation between market capitalization and exchange listings drops to 20 percent. That means that it might not really matter that much how many exchanges the average token is listed on. The correlation between the average token’s value and exchange listings is not very significant.

Summary

The ICO is becoming an increasingly popular fundraising vehicle. Traditional businesses are starting to look to this crowdfunding mechanism and bypassing other traditional forms of financing.

Nonetheless, planning an initial coin offering requires a lot of thought and thorough research. Even deciding which exchanges to list on and how many exchanges to list on requires careful research. Fortunately, there are already hundreds of cryptocurrencies out there that can help to determine if it is worth the time and effort to pursue a certain strategy.

There is a correlation between market capitalization, but it is not very strong. Be guided by that. Whenever in doubt about correlation and causation, just look at Litecoin and Bitcoin. Litecoin is listed on 94 exchanges compared to Bitcoin’s 88, yet Bitcoin is a magnitude larger in market capitalization.

Munair Simpson is a business strategist and the principal researcher at Useful Coin Research. Munair lives in South Korea and enjoys teaching Capoeira when not thinking about the future of finance. Munair graduated from the Wharton School with an MBA in Marketing.

The Moment of Truth for Bitcoin and the Cryptocurrency Market

December 22, 2017 (seekingalpha.com)

Summary

• The chorus of voices labeling Bitcoin a huge speculative bubble is growing louder.

• 2017 was a pivotal year for the future of cryptocurrencies, but 2018 is likely to be more insightful regarding their ultimate fate.

• Bitcoin's meteoric rise has ushered in a new era and represents the birth of a new asset class. How digital currencies mature remains an open question.

One of the most notable developments in financial markets during 2017 was the phenomenal rally in cryptocurrencies and their ascent into a new, unique asset class. Throughout the year the mainstream view remained dismissive regarding the prospects of Bitcoin and its crypto-rivals. Yet, it is becoming increasingly clear that this phenomenon has deeper roots and, notwithstanding the vertiginous volatility, it is unlikely to fade away.

Very few could have foreseen the almost surreal pace of appreciation that took place in the past twelve months. In fact, the surging momentum of the Bitcoin rally was unlike anything we have seen in the past. This lack of historical precedent makes it exceptionally interesting, as well as challenging to investigate what triggered this phenomenon and which drivers continue to fuel it.

Admittedly, the substantial correction we saw the past week in cryptocurrency price movements renewed an element of uncertainty about the longer-term direction and, essentially, the fate of Bitcoin.

As a result, the chorus of voices predicting an imminent collapse in the crypto-market grew louder, to some extent silencing the optimists who expect further acceleration amid this meteoric rally. In light of the unprecedented nature of this phenomenon, widely divergent views about what lies ahead are to be expected. Nonetheless, the view that the digital currencies’ massive surge this year is nothing but a huge speculative price bubble, while logical, is inherently flawed.

A more sober examination of what we are actually witnessing is the volatile phase that typically precedes broader acceptance of a newly introduced asset class. If indeed Bitcoin becomes broadly accepted as an alternative global currency, its market capitalization is bound to grow further over the longer term. Until then and until the coexisting -- at the time of this writing -- irrational exuberance and the fatalistic predictions of Bitcoin’s premature demise subside, extraordinary volatility spikes will dominate price action in the cryptocurrency market.

Let us not forget the key developments that transpired in 2017, such as the introduction of Bitcoin futures by CME Group and Cboe Global Markets, which point to a wider recognition of the role that cryptocurrencies have the potential to play in financial markets. Meanwhile, emerging economies as well as a host of technologically advanced countries, including Japan and South Korea, are increasingly adopting a more open stance with regard to Bitcoin transactions. This is, in large part, why 2017 will go down in history as a pivotal year for digital currencies. At the same time, blockchain technology continues to evolve, and it is reasonable to expect that future iterations will address existing security vulnerabilities and facilitate a swifter adoption process, providing a more complete, credible and accessible alternative payment method.

The relentless rise of Bitcoin has also been underpinned by the high degree of difficulty that funds faced in shorting the digital currency. This is gradually changing with the inception of Bitcoin futures, but up until recently it served as a deterrent for speculators to aggressively initiate short positions. It is also especially challenging to identify reliable hedges with sufficient correlation to Bitcoin price movements. As a result, the cryptocurrency market has been relatively sheltered from external forces that tend to cause ripple effects in financial markets. This fostered conditions favorable for “long-only” speculative strategies, which, combined with the current low-volatility environment that encourages increased leverage and momentum trading, served as an excellent propellant for Bitcoin to skyrocket the way it did. In the short term, this tailwind is about to gradually run its course, and that will likely translate into a trend reversal, potentially quite sharp.

The moment of truth for Bitcoin and the cryptocurrency market will arrive after the critical correction that will inevitably ensue. At that point, it will be easier to assess whether digital currencies possess the necessary resilience to survive a concerted onslaught of external market pressures. The reaction of short-term momentum traders -- who ostensibly dominate the digital currency market-- in the face of a technical reversal remains a crucial unknown factor.

It is important not to lose sight of the fact that cryptocurrencies are built on a technological foundation that grants them a unique and lasting advantage over traditional currencies. This is why the probability of an eventual widespread cryptocurrency adoption as an integral part of the financial system is significantly higher than currently anticipated. It is, however, far too early to predict which cryptocurrencies will actually survive the ongoing tectonic shifts that are likely to redefine the future monetary landscape. In that regard, 2018 will be quite interesting, eventful and, hopefully, insightful.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

Belarus legalizes cryptocurrency payments & ICO's

By Alexander Lukashenko - December 22, 2017 (www.ccn.com)

Belarus, a country wedged between Russia and the European Union, recently legalized cryptocurrencies and Initial Coin Offerings (ICOs), in a move that’s set to drive private sector growth and attract foreign investors to the country, a former communist republic that’s still dominated by its state, filled with inefficient enterprises, and dependent on its neighbor Russia’s money and subsidies.

Bitcoin’s current crash, that’s already led the cryptocurrency below the $11,000 mark before it bounced back to $12,401 at press time, seemingly didn’t put off the country’s president, Alexander Lukashenko, who signed the decree on Friday while on the move.

The decree notably gives cryptocurrency enthusiasts tax breaks and legal incentives, as its goal is to help turn Belarus into an international tech haven, Bloomberg reports. In a statement Lukashenko, a former collective farm manager who’s in the past labeled the internet “garbage,” said:

“Belarus will become the first government in the world that opens wide opportunities for the use of blockchain technology (…) We have every chance of becoming a regional center in this area.”

Designed to attract cryptocurrency entrepreneurs looking to avoid regulatory scrutiny over cryptocurrency transactions and ICOs, the decree also exempts revenue and profits from all operations using cryptocurrencies for the next five years.

Speaking to Reuters, Anton Myakishev, the head of Microsoft’s offices in Belarus, stated that “the decree is a breakthrough for Belarus” as it gives the industry the “possibility to make a leap forward in its development,” while allowing foreign capital to enter it in comfortable conditions.

Creating a “Tech Nation”

Earlier this month, Lukashenko said that his goal in signing the decree is to turn Belarus into a “tech nation.” Not only does it legalize cryptocurrencies and ICOs, it also allows local IT companies to partly operate under English law, so it’ll help foreign investors who struggled to navigate the country’s legal system.

Denis Alinikov, a senior partner at private law firm Aleinikov and Partners, who helped draft the decree, stated:

“We regularly faced legal problems. When a Western company buys a Belarussian company they try to structure the deal outside Belarus. Investors don’t want to deal with Belarussian legislation.”

The decree further establishes a direct legal link between token issuers and their obligations towards its holders. To protect against fraud, it sets capital requirement for cryptocurrency exchange operators, while introducing smart contracts in the country.

The IT sector is one of the few that’s thriving in Belarus, as it attracts foreign workers who work for about five times the country’s average wage in its so-called Hi-Tech Park. It’s arguably the most prominent sector of the country’s economy, which is set to grow by 1.7 percent this year, according to Reuters.

Notably, Belarus was home to popular messenger application Viber, as well as the online gaming service World of Tanks, which made its founder the country’s first billionaire.

In an interview, Vsevolod Yanchevsky , head of the Hi-Tech Park, said:

“The decree has been written exactly the way our tech community wanted it. Belarus will be one of the best jurisdictions in the world for cryptocurrencies and blockchain.”

Belarus’ move may have been influenced by its neighboring country Russia, who’s upcoming draft law on cryptocurrency and ICO regulations is set to come on December 28. The law will reportedly consider cryptocurrencies as “other property,” and introduce possible limits on individual ICO investments.

The bill, which will prioritize the protection of retail investors, is likely going to be passed in March 2018. Back in October, President Putin approved a timeline for a framework on cryptocurrency regulations. Reportedly, the country may also soon be launching its own state-sponsored cryptocurrency, the Cryptoruble.

Alexander Lukashenko image from Shutterstock.

Be Smart dont sell your Bitcoin or Steem cheap to the wallstreet traders

By bitcoincompany - December 21, 2017 (steemit.com)

Be smart guys wallstreet is trying to get some cheap bitcoin dont sell any of your coins for now holdd together and let them buy after us please share this..

please resteem upvote share if you love bitcoin and steem.

Closing summary: Bitcoin futures fall as CME trading begins

Time for a recap.

Bitcoin has made a subdued debut onto the world’s largest futures exchange, as a series of politicians and officials voiced concerns about the digital currency.

The Chicago Mercantile Exchange (CME) became the second exchange to offer bitcoin derivatives trading last night. And right now, bitcoin futures contracts which settle in 2018 have all fallen below their opening value.

The January 2018 contract, which initially spiked over $20,000, has now dropped back to $18,920 - having been originally priced at $19,500.

Contracts that mature in February, March and June are all in the red (although they’ve received little attention compared to the January option).
Bitcoin futures: all down today
Bitcoin futures: all down today Photograph: CME

Futures contracts allow traders to bet against an asset, so today’s moves could suggest that bitcoin’s stunning rally is running out of steam. But, less than 1,000 contracts have been traded today (each one is worth 5 bitcoins).

The spot price of bitcoin has also dipped, currently down 1.6% at $18,640 - having hit a new alltime high near $20,000 last night.

CME’s launch of bitcoin futures was accompanied by a series of warnings. For example:

Warning: Crypto whales selling to the little guy

By Stephen Alpher - December 21, 2017 (seekingalpha.com)

In keeping up with acceptable crypto-community behavior, many of the large crypto holders cashing out are portraying the move as noble act, writes Lionel Laurent.

The fact remains, however, that the Emil Oldenburg's and Charlie Lee's of the industry are selling after massive moves higher. The buyers are the little guys: Since the start of 2017, there's been an explosion of accounts holding tiny amounts of Bitcoin (0.1 or less), and a corresponding tumble in accounts holding sizable amounts.

Laurent: "It will be hard to ignore the niggling feeling that the latecomers piling into Bitcoin at the end of 2017 aren't quite as astute as the early birds who are getting out."

Ledger Nano S - the best Hardware Wallet by majority choice to keep your coins safe

If you are holding a large amount of cryptocurrency, it is not advisable to hold them on exchanges, mobile or desktop wallets. Exchanges could get hacked as it had happened so many times before; mobile and desktop wallets are safe so long as your mobile or PC is safe and protected from all kinds of malware that try to get at your coins. In this scenario, hardware wallets make life easy as they offer the best way to store cryptocurrency due to the great security associated with them. Further, hardware wallets can be relied upon even if they are connected to infected PC's -- But this should in no way be taken as a license for lax security measures on the part of the user. 

Ledger Nano S - the best Hardware Wallet by majority choice

Ledger Nano S, a leading hardware wallet, has earned top marks for its extreme reliability and competitive pricing. It comes on top for safely storing your crypto currency and even tokens. It supports many popular cryptocurrencies including Bitcoin, Ethereum, Ripple, Dash, Zcash. It connects to any computer (USB) and embeds a secure OLED display to double-check and confirm each transaction with a single tap on its side buttons.

Ledger Nano S hardware wallet features

LATEST GENERATION HARDWARE

When you own cryptocurrencies, you need to protect your confidential data and the access to your funds. With Ledger Nano S, secrets like private keys are never exposed: sensitive operations are isolated inside your hardware wallet within a state-of-the-art Secure Element, locked by a PIN code. Transactions can’t get tampered with, they are physically verified on the embedded screen with a simple press of a button.

PAY AND AUTHENTICATE

Ledger Nano S includes Bitcoin, Litecoin, Ethereum and Ethereum Classic companion apps, and other blockchain-based cryptocurrencies. You can send and receive payments, check your accounts and manage multiple addresses for each currency from the same device.

MULTI-CURRENCY

Ledger Nano S supports Bitcoin, Litecoin, Ethereum and altcoins: hold different assets in the same hardware wallet.

BUILT-IN DISPLAY

Check and confirm transactions on the display and confirm with using the physical buttons (anti-malware second factor).

SECURITY

Your confidential data is never exposed: it is secured inside a strongly isolated environment locked by a PIN code.

MULTI-APPS

Use companion apps such as cryptocurrencies wallets, and also FIDO® U2F, GPG, SSH or build your own applications.

FIDO® CERTIFIED U2F

Ledger Nano S supports the FIDO® Universal Second Factor authentication standard on Google, Dropbox, GitHub or Dashlane.

BACKUP & RESTORATION

Your accounts are backed up on a recovery sheet.

The CIO of a crypto hedge fund explains why the market will explode over the next 2 years

By Jacqui Frank, Kara Chin and Trevor N. Cadigan - November 28, 2017 (www.businessinsider.com)

Ari Paul, CIO of cryptocurrency hedge fund BlockTower Capital, talks with Business Insider executive editor Sara Silverstein about the value in cryptocurrency and where he thinks the market is headed in the next two years. Following is a transcript of the video. 

Ari Paul: I’m Ari Paul, CIO of BlockTower Capital and this is why there's value in cryptocurrency

Sara Silverstein: Why do you fundamentally believe that there is value in this cryptocurrency world?

Paul: So there are quite a few use cases. I think the biggest and clearest, and easiest to understand, is as a store of value that can't be censored and is resistant to seizure. And so, the really clear example of demand for this, that I see, is the offshore banking system. Which is roughly 20 trillion dollars today. And it's not just people trying to dodge taxes. Apple, Amazon, every billionaire on the planet, has wealth stored there. And firms like JPMorgan collect fees to offshore law abiding citizens’ wealth. And people want to store their wealth securely, in a way that no single judge could freeze all of their assets. Right? Amazon doesn't want their entire global business operation to be shut down by one judge in Brussels. They want to be able to go through a lengthy appeals process and keep their business operating. So cryptocurrency performs that same task of the offshore banking, of keeping wealth secure an order of magnitude better. So we see massive real fundamental demand for this use case.

Silverstein: And what other financial assets make sense to be on a decentralized database or why would they?

Paul: Yes, there’s a huge distinction between the money use case, store of value, and the blockchain use case, for other assets. And I think it’s useful to kind of separate those. So a blockchain makes a ton of sense to record in real-time legal title. So I was a treasury bond trader, for example, and an example in finance, that anyone who’s traded treasuries is familiar with, is: failure to deliver. So Goldman Sachs will sell a bond to Credit Suisse, who borrows it from JPMorgan, and the same bond, in a day, might trade across 12 banks. And if one back office fails, they fail to make delivery of that bond, you get what's called a cascading failure to deliver. Because no one knows who actually owns the bond. And that can take weeks to fix. So imagine if you just have a shared database, a database that each of those banks held, that was kept accurate in real time,  and that no one could maliciously change or manipulate. You would know who owns what bonds and you might be able to eliminate half of the existing back offices in big banks. So a massive cost savings.

Silverstein: So you believe in the blockchain as having a value in the future for us? How does that translate into value for cryptocurrency?

Paul: So, yeah. I think a really useful idea — a blockchain is just a type of database. It's a distributed ledger that in some use cases, like for a banking back office, is kind of like a database upgrade. So massive improvements in efficiency, but probably not that transformative or disruptive. When you take a blockchain and you make it public and decentralized, and then you add money to that — you add a cryptocurrency — then you're looking at something that is that first use case, that offshore banking system, that I think is fundamentally disruptive. And disruptive financially, economically, and even potentially politically.

Silverstein: Do you see any institutional money in cryptocurrency right now, and is that going to be a huge lever for these values to all skyrocket?

Paul: Absolutely, so we've seen this really clear path of adoption. The earliest adopters were engineers, self-described cypherpunks. Then you had a wave of kind of Silicon Valley tech elites, people who would have a successful exit, who had a high risk tolerance, and who liked taking risk on new technology. Then you had kind of an early wave of maybe people like myself with a little more of a Wall Street background, as well as high net worth individuals, who are a little bit risk-tolerant. What we’re seeing right now is a shift from small family offices to big. Venture capital firms are basically all in. So most of the famous venture capital firms, not only have they been in the space for a few years, they’re now directly investing in new cryptocurrencies. And of the ten largest family offices in the country at least seven of them on cryptocurrency. Maybe more, but seven I'm sure of. So the next wave is — in kind of the institutionalization of the space — is we’re having the CME futures that are likely to launch next month. There's a huge number of entrants who want to invest in cryptocurrency, but can’t. For security reasons, operational reasons, regulatory, but they can easily buy a future, that's on the CME. So that opens the door to groups like endowments and pensions. So far, endowments and pensions own zero cryptocurrency. You have an asset that has been the highest returning asset class over the last eight years and it’s uncorrelated to everything else. And while there’s certainly debate over the future prospects, it lines up as the holy grail for a portfolio. In the sense that, if you size it appropriately, if you size it small, the risks are idiosyncratic. It actually reduces the risk of a portfolio. So endowments and pensions, as they get comfortable with the space, in all aspects regulatory, compliance, as well as underwriting investment risk. They're going to get in. And that's a massive wall of money coming in to a relatively small asset class.

Silverstein: And what do you think the timeline is for that?

Paul: I think the first endowment is probably going to write a check in the next few months, a small check. Endowments won't be in size for probably six months and not in size by — from their perspective for probably 12 months. Pensions are probably 18 months away and the key — the reason given those dates is having third-party custody, that is a legal qualified custodian, is a huge hurdle particularly for pensions. You have issues like ERISA, that are actual fiduciary challenges. And having a third-party qualified custodian, for many crypto assets, is probably something like 12 months away, maybe 18 months away.

The cryptocurrency market is now doing the same daily volume as the New York Stock Exchange

By Oscar Williams-Grut - December 20, 2017 (www.businessinsider.com)

Traders on the floor of the New York Stock Exchange on December 6
REUTERS/Brendan McDermid

• Global volume in cryptocurrency markets has passed $50 billion, close to the average turnover on New York Stock Exchange.

• The comparison is inexact but highlights just how popular digital currencies have become.

LONDON — Global cryptocurrency markets are now averaging the same daily trading volumes as the New York Stock Exchange.

Twenty-four-hour trade volume in the cryptocurrency market passed the $50 billion mark on Wednesday, according to the data provider CoinMarketCap.com.

That is close to the average daily volume of trade on the New York Stock Exchange this year. Daily trading volumes on the London Stock Exchange hover at about £5 billion, or $6.7 billion.

The comparison is inexact, as the cryptocurrency market is arguably closer to the foreign-exchange market, which has daily volumes of over $5 trillion.

But it highlights just how hot the cryptocurrency market has become in 2017. Unlike the foreign-exchange market, cryptocurrency trading is largely done by small-time, retail investors, making it closer to the stock market (though some huge institutions are playing in the market.)

Investors have flocked to cryptocurrencies in 2017 because of the eye-catching returns of bitcoin, which has grown by about 1,500% against the dollar. A boom in so-called initial coin offerings, in which startups issue their own cryptocurrencies to raise money, has created a raft of other digital assets for investors to speculate on. There are now more than 1,300 cryptocurrencies in circulation, according to CoinMarketCap.com.

But many people within the financial industry have expressed concern about the largely unregulated market. The UK's top financial regulator warned earlier this month that people should be prepared to lose all the money they invest in bitcoin, and JPMorgan CEO Jamie Dimon has called cryptocurrencies a "scam."

How Ripple (XRP) stacks up against other digital assets

By Team Ripple - December 11, 2017 (ripple.com)

Everyone is talking about the digital asset space. Wild price fluctuations, new XRP capital funds and Bitcoin (BTC) forks have made it virtually impossible for consumers or the financial industry to ignore the popularity and proliferation of these assets.

In fact, the digital asset landscape has grown so much that there are more than 1,300 types of assets on the market with a collective market cap of $450 billion as of this posting.

We examined the top digital assets for payments while comparing their speed, cost and scalability. Here’s what we found.

Which digital asset is the best for payments?

XRP is the only digital asset with a clear institutional use case designed to solve a multi-trillion dollar problem – the global payment and liquidity challenges that banks, payment providers and corporates face. In order to effectively solve this problem, speed, cost and scalability are of extreme importance. When you line up the top digital assets for these attributes, it’s clear that XRP is the winner.

XRP is part of a bigger vision

XRP is a key enabler of the Internet of Value — Ripple’s vision for making money move at the speed of digital information. XRP’s speed, transparency, and scalability help financial institutions move money like information moves today — in real time.

It’s no wonder that real institutional customers are using and finding value in XRP and governments, regulators and central banks are increasingly recognizing the role it could play in the global system.

For more information about XRP, visit our XRP Charts or learn how to buy XRP.

Whales at play - Pumps and dumps and Altcoin volatility

Cointelegraph - December 19, 2017 (www.youtube.com)

WARNING: This is an observation not FUD, HODL till the end.

All cryptocurrencies going from green to red in an hour is not a coincidence.

In the last 24 hours the cryptocurrency market has seen massive gains and then in the span of an hour, huge losses.

Is Wall street to Blame? Is it Whales from China? Or a new Mega Pump and Dump Group on Telegram.

Best place to keep your coins is a hardware wallet.

Ledger Nano S is the majority choice:

Coinbase adds Bitcoin Cash as price soars, Bitcoin dips

By Jon Buck - December 20, 2017 (cointelegraph.com)

After a veiled suggestion from president Asiff Hirji that Coinbase would potentially add other assets, the exchange has officially launched support for Bitcoin Cash (BCH), according to the company’s blog post.

The addition is a welcome Christmas gift for those who held Bitcoin (BTC) in Coinbase wallets on August 1 when the BCH fork occurred. Users who had BTC at the time of the fork have received an equal amount of BCH in the newly created wallets.

After previously refusing to support the coin, the company promised that BCH support would come before the end of the year.

The blog post also made clear that Coinbase employees have been restricted from trading BCH on the site for a number of weeks prior to the announcement. Nevertheless, accusations of insider trading have hit Twitter.

hey @coinbase , @GDAX and @brian_armstrong by being part of a product index for @CMEGroup you agreed to certain rules. Since bch news was clearly leaked around 2:30pm CST to certain parties. this qualifies as insider trading. Hope you enjoy the incoming complaints.

— I am Nomad (@IamNomad) December 20, 2017

Price jump, confusion

After the announcement, Bitcoin Cash’s price almost immediate jumped to over $3,000 on huge volume.

Interestingly, GDAX, the Coinbase affiliated site for trading, showed a startling price of $9,500 per BCH, though trading on the site was halted.

The Coinbase site showed the more widely published pricing. At press time, BCH was trading at $3,185, per the Coinbase site.

At press time, Bitcoin was trading at $17,000, having dropped from $19,000 to a low of $15,700 before partially recovering.

What are the best desktop and hardware wallets for Ripple (XRP)?

Rippex Desktop Wallet

When it comes to the desktop wallets for Ripple, Rippex is the most trusted and easiest way to store your Ripple (XRP) coins.

Many cryptocurrency enthusiasts prefer to store their coins on desktop wallets rather than on exchanges as this gives them complete control over them. Since Rippex is an open source wallet, it has a better trust score due to the fact that if there had been some security issues, it would have been noted by other advanced users.

Rippex wallet comes for Windows, Linux and Mac systems.

Following link gives a detailed information on installing and the use of Rippex wallet. Topics explained include, 

• Create New Rippex Account
• Deposit XRP to your Rippex Wallet
• Sending XRP from Rippex Wallet
• Viewing your Rippex Wallet
• Questions/answers on some key points like "Regular Keys". (Ripple accounts can use Regular Keys. Regular keys can be created and revoked, and they allow Ripple users to use their accounts without exposing their master keys).

How to Guide for Using Rippex Wallet for Storing Ripple (XRP):-

https://cryptorum.com/threads/rippex-guide-for-storing-ripple-xrp.89/

Ledger Nano S Hardware Wallet

Desktop wallets are generally safe as long as your computer is not infected with malware like key loggers. However, if you are holding a large amount of Ripple (or any other cryptocurrency) it is advisable to go for a hardware wallet. Hardware wallets are one of the best ways to store your cryptocurrency safely, as they offer great security with ease of use.

Ledger Nano S, a leading hardware wallet, has earned top marks for its extreme reliability and competitive pricing and comes on top for safely storing your crypto currency and even tokens. It supports many popular cryptocurrencies including Bitcoin, Ethereum, Ripple, Dash, Zcash. It connects to any computer (USB) and embeds a secure OLED display to double-check and confirm each transaction with a single tap on its side buttons.

Ledger Nano S hardware wallet features:

LATEST GENERATION HARDWARE

When you own cryptocurrencies, you need to protect your confidential data and the access to your funds. With Ledger Nano S, secrets like private keys are never exposed: sensitive operations are isolated inside your hardware wallet within a state-of-the-art Secure Element, locked by a PIN code. Transactions can’t get tampered with, they are physically verified on the embedded screen with a simple press of a button.

PAY AND AUTHENTICATE

Ledger Nano S includes Bitcoin, Litecoin, Ethereum and Ethereum Classic companion apps, and other blockchain-based cryptocurrencies. You can send and receive payments, check your accounts and manage multiple addresses for each currency from the same device.

MULTI-CURRENCY

Ledger Nano S supports Bitcoin, Litecoin, Ethereum and altcoins: hold different assets in the same hardware wallet.

BUILT-IN DISPLAY

Check and confirm transactions on the display and confirm with using the physical buttons (anti-malware second factor).

SECURITY

Your confidential data is never exposed: it is secured inside a strongly isolated environment locked by a PIN code.

MULTI-APPS

Use companion apps such as cryptocurrencies wallets, and also FIDO® U2F, GPG, SSH or build your own applications.

FIDO® CERTIFIED U2F

Ledger Nano S supports the FIDO® Universal Second Factor authentication standard on Google, Dropbox, GitHub or Dashlane.

BACKUP & RESTORATION

Your accounts are backed up on a recovery sheet.


For more info, please click the image below:-

What is a Smart Contract?

Smart Contracts - Part 1: What is a Smart Contract?

• A great video explaining Smart Contracts at the level of detail/abstraction a novice could understand.

By Kevin Healy - August 10, 2017 (www.youtube.com)

An introduction to smart contracts in ethereum. What accounts are in a simpler currency only blockchain, how ethereum introduces a second type of account: a code controlled account (aka smart contract). This type of account does not have a private key but instead is controlled by code. It can store ether, just like user accounts, or it can keep a balance of 0 and be used to deliver some other function within the context of an application. Also, examples of how you can use smart contracts.

Part 2: https://www.youtube.com/watch?v=TC-bDQZbXd0

Why some claim Ripple isn’t a 'Real' Cryptocurrency

By Joe Liebkind - December 14, 2017 (www.investopedia.com)

• founders of Ripple recommend not using their creation as a currency for speculation

• ReRipple has no mining and transactions are powered through a “centralized” blockchain to make it more reliable and fast

• Ripple may be the dividing line that separates two distinct products of cryptocurrencies : assets and solutions

There are many cryptocurrencies out there, each of which gained inspiration from bitcoin, the ancestor to them all. Bitcoin was humanity’s first definition of what it means to be a cryptocurrency, but it is a complicated creature that relies on many special functions and components. For instance, bitcoin has a decentralized blockchain ledger, on which its millions of participants organize and save a record of their transactions. It also has cryptographic hashing, so that traders can use a system of public and private keys to safeguard their identities.

Bitcoin’s transactions are processed by miners, a supportive and incentivized community that keep everything running smoothly. Relevantly, it also has a finite supply. These characteristics have made it easy to transact safely, store value, and even speculate.

Should a cryptocurrency exhibit each of bitcoin’s traits or can any kind of digital money be labeled as such? These are logical questions, but ones that haven’t often been asked, largely because most of bitcoin’s peers have generally stuck to their collective predecessor’s model.

Ripple is a currency gaining popularity after years of living in bitcoin’s shadow, bereft of interest from traders due to its traditional infrastructure that makes a greater compromise between crypto and fiat money. Some in the community have refused to consider Ripple a real cryptocurrency because it’s so different. Are they correct? (See more: Ripple Is Back: Here's Why.)

Ripple: The Strange Hybrid

Ripple wasn’t designed to be a coin, or a normal cryptocurrency by the standard definition. While bitcoin and comparable cryptocurrencies give the value of the coin equal priority with network security, speed, and applicability, Ripple does away with the idea of XRP as any kind of investment asset and instead focuses on making the blockchain as strong as possible. This is primarily for the good of the institutional entities that Ripple serves, like American Express or Santander Bank. To achieve this goal, the Ripple Foundation created XRP but tweaked each traditional component of cryptocurrency into an almost unrecognizable state.

Miners Be Gone

Ripple has no mining or miners whatsoever. Instead, transactions are powered through a “centralized” blockchain to make it more reliable and fast. Mining is a core tenet of most other cryptocurrencies, and each uses their own system to determine how much power the miners have. Some, like bitcoin, use Proof-of-Work, but there is also Proof-of-Stake and Proof-of-Importance.

In cryptocurrency, miners are incentivized to process network transactions with the currency itself, but this has created some issues that Ripple deems untenable. In a solution built for big banks, there should be no separate group with its own special motivations for running the network.

While this idea has helped other cryptocurrencies to remain decentralized, it has also slowed them down: a problem Ripple cannot afford. This lack of mining affects other aspects of Ripple as well, taking it further from the standard.

Plug in the Printing Press

Besides processing transactions, miners are also rewarded with cryptocurrency. This is essentially how it’s created. Ripple’s exclusion of miners naturally throws a wrench into the machinery in this regard. Ripple is not finite, and can be “printed” on-demand, which makes it much more reliable for payment processing, money exchange, and other institutional activities. When it’s used, it’s simply destroyed.

The Ripple Foundation already created the 100 billion XRP currently in circulation, giving it a stable, non-volatile character perfect for its biggest clients. However, this also removes one of the biggest factors in any true cryptocurrency: the ability to accumulate and store value as only a deflationary asset can.

A Centralized Blockchain?

Ripple does have a wallet, but getting access to the blockchain is tough. Retail participants aren’t supposed to have access because it introduces risky, strange elements into an otherwise sterile environment. The Ripple blockchain isn’t open like those of other cryptocurrencies. XRP can be safely stored and kept, and uses cryptography to protect participants, but the nodes it’s protecting aren’t individuals but “trusted” operators registered in the Ripple network. This allows the currency to use the advantages of the blockchain ledger, but in a closed ecosystem that makes it more efficient.

While bitcoin claims to be “trustless,” it’s just created a precarious house of cards whereby everyone has some incentive not to let it topple. Miners can still shut off their computers and freeze the network if they wanted to, but not with Ripple.

Putting a Title on Ripple

Much like the many questions surrounding bitcoin cash, even the founders of Ripple recommend not using their creation as a currency for speculation because it isn’t one. Ripple resembles a fintech platform more than anything else and has simply combined the best elements of fiat money and blockchain cryptocurrency.

Not a “true” cryptocurrency by the standard definition, Ripple may be the dividing line that separates two distinct products to emerge from the cryptocurrency revolution: assets and solutions. While assets can serve as investments placing faith in a decentralized community and the deflationary properties of mining, solutions will dispense with the speculation and instead create platforms that are “technically” cryptocurrency, but not traditionally viewed as such.

Blockstream is using satellites to beam Bitcoin down to Earth

By Alyssa Hertig - August 15, 2017 (www.coindesk.com)

Sounds fantastical? Maybe, but Blockstream swears it isn't as crazy as it sounds.

Today, the bitcoin infrastructure company is launching Blockstream Satellite, an ambitious attempt to use leased satellites to beam bitcoin nearly anywhere in the world. Now in beta, bitcoin users in Africa, Europe, South America and North America can already use the satellites to download a working bitcoin node capable of storing the network's entire transaction history.

But while complex conceptually, the company believes its end result can solve a real issue facing the $66 billion network – without internet, you can't access bitcoin.

And this poses a problem for bitcoin proponents who believe the cryptocurrency could be especially beneficial to people without internet, who also generally live in areas with economic instability.

So, Blockstream decided to set its sights on a solution, and found it in space.

According to Blockstream CEO Adam Back, the project is all about putting bitcoin into the hands of those who "desperately need" it.

He told CoinDesk:

"There is some coincidence between countries with poor internet infrastructure and unstable currencies. The people who are in direct need of bitcoin are those who currently have unstable access to bitcoin. This project will address that problem, and, we hope, will allow many more people to use bitcoin."

The vision

While running a full node is a cumbersome process, it's nonetheless the most secure and trustless way of using the digital currency, and for individuals dealing with political and economic instability, this process could prove crucial.

But because full nodes require an Internet connection and 160 GB of free space, they are a rarity in some regions of the world. There's allegedly only one man running a full node in all of West Africa, for example.

While Blockstream is now taking care of a way to download a full node, there are a few other choice technologies those that want to take advantage of the satellite will need.

Users will need a small satellite dish – if they already have a TV satellite, they could use that – and a USB to connect the satellite to a personal computer or a piece of dedicated computer hardware such as a Raspberry Pi. The rest can be accessed through free, open-source software, such as GNU Radio for establishing a radio connection.

"The cost to entry is extremely low," said Blockstream's head of satellite, Chris Cook. According to him, the package of equipment costs "a little under $100."

Then, once users have those tools, they can pull bitcoin blocks from the satellite, building a bitcoin full node.

Cheaper technology

But while they'll now be running a full node, it still takes some sort of Internet connection to make transactions over the network.

While many users in the areas Blockstream is targeting won't be able to afford mobile data connection plans to initiate transactions, Back argued cheaper communications technologies, such as SMS or bi-directional satellite, could be used instead.

Transactions, he said, take up about 250 bytes, which wouldn't cost more than one penny to transfer using such technologies.

In this way, Back's vision of the satellite as bringing bitcoin even to people completely off-the-grid is theoretically possible. He offered the example of a small hut on the side of the road in the Sahara Desert in Africa, adding:

"With a perpetual generator out back with a satellite dish, a Raspberry Pi by the generator, a local wi-fi hot spot, and the necessary software set up, you could be transacting globally with bitcoin."

Sounds like a lot, but Back argued that it would be pretty cheap, especially if costs are pooled between multiple people, like if an entire village shared the costs of setting up the infrastructure that they could then all use.

Monetizing space bitcoin

While it's ambitious as is, Blockstream is taking that mission even further, adding more satellites as the year goes on, with the hope the most people on earth will be able to access a bitcoin satellite by the end of the year.

"The only people that won't be covered are those in Antarctica," Back said.

While the project is technically feasible, though, is it financially so?

Bitcoin is admittedly a different beast, but other Internet space projects don't have a great track record so far. Although, Blockstream does have plans to monetize the satellite.

According to Back, Blockstream will eventually release an API for developers and companies to send data over the satellite connection for a small bitcoin fee.

He concluded:

"That might allow a smartphone wallet that sends messages to send it via satellite or some application to send messages via satellite. That's a way to monetize the infrastructure and to expand to more services on it."

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Blockstream.

Satellite image via Blockstream

What is Ripple and why is it beating both Bitcoin and Litecoin?

By Chris Morris - December 14, 2017 (www.bitcointalkradio.com)

Forget Bitcoin. So long Litecoin. There’s a new cryptocurrency on the rise.

Ripple, which was designed for banks and global money transfers, has seen the value of its XRP digital currency skyrocket in the past three days. On Dec. 10, the company had a market capitalization of just over $9 billion. As of Wednesday morning, that market cap had more than doubled to $18.1 billion.

Prices for an individual Ripple XRP are considerably more affordable than its alternatives, making it even more attractive to cryptocurrency speculators. As of late Wednesday morning, a single XRP cost just 47 cents, a 66% jump from yesterday’s close, according to CoinMarketCap.

This surge has pushed Litecoin down to the fifth most valuable cryptocurrency. Both Ripple and Litecoin are still far below Bitcoin and Ethereum, however.

What is Ripple?

While it wasn’t released until 2012, Ripple is actually older than Bitcoin. The original version of the company was created in 2004, according to Bitcoin Magazine. It never really went anywhere, though, until it put a professional management team in place, which included E-Loan co-founder Chris Larsen and Jed McCaleb, founder of MtGox.

Ripple’s cryptocurrency has been adopted by banks and other financial institutions. Those companies believe Ripple’s system offers both better prices and is more secure than other digital currencies, including Bitcoin. It allows users to send, receive, and hold any currency in a decentralized way via the Ripple network. The company is cash-flow positive and holds a vast store of XRP, which it periodically releases into the market.

But the real appeal of Ripple’s XRP for banks is its liquidity.

“The liquidity needs of banks today is managed with literally ten trillion of float that sits in these nostro and vostro accounts. We believe very strong this is an inefficient model. You can use digital assets to fund liquidity, and Ripple is uniquely positioned to capitalize on that. Bitcoin takes four hours to settle a transaction. XRP takes 3.6 seconds,” Ripple CEO Brad Garlinghouse told Fortune earlier this year.

Why is Ripple surging?

Ripple’s rise seems to be a (pardon the pun) ripple effect from the surge of interest in Bitcoin. Investors who believe cryptocurrency may be reaching a peak are looking for others that could provide a greater return in the long term. The company has hit some notable milestones in recent months, though.

As of October, Ripple had licensed its blockchain technology to over 100 banks. Last month, American Express came on board. And Michael Arrington’s $100 million cryptocurrency hedge fund will be valued in Ripple’s XRP.

How much has Ripple grown in 2017?

Year to date, Ripple’s XRP has seen its value jump more than 7,000% and its market cap increase by nearly 7,700%.

The Bitcoin bubble – how we know it will burst

December 07, 2017 (theconversation.com)

Ready to pop? Adam Dachis/flickr, CC BY

In the last year, the price of Bitcoin has increased from less than US$800 to more than US$12,000. This huge spike in value has many asking if it is a bubble or if the high price today is here to stay.

Finance defines a bubble as a situation where the price of an asset diverges systematically from its fundamentals. Investment mogul Jack Bogle says there is nothing to support Bitcoin, and the head of JP MorganChase, Jamie Dimon has called it a fraud “worse than tulip bulbs”.

Like any asset, Bitcoin has some fundamental value, even if only a hope value, or a value arising from scarcity. So there are reasons to hold it. But our research does show that it is experiencing a bubble right now.

Together with Shaen Corbet at Dublin City University, we took as the fundamentals of Bitcoin elements of the technology that underpins it (and other cryptocurrencies). We looked at measures, which represent the key theoretical and computational components of how cyrptocurrencies are priced.

New Bitcoin is created by a process of mining units called blocks. Bitcoin is built on blockchain technology – a digital ledger of transactions – which enables the currency to be traded independently from any central banking system, without risk of fake or duplicate Bitcoins being used. Instead of having a bank verify pending transactions (a “block”), miners check them and, if approved, the block is cryptographically added to the ever-expanding ledger.

So the first measure we examined relates to mining difficulty. It calculates how difficult it is to find a new block relative to the past. As per the Bitcoin Protocol, the number of Bitcoin is capped at 21m (there are currently 16.7m in circulation). This means that as more people mine for Bitcoin and more blocks are created, each block is, all things being equal, worth less than the previous block.

Bitcoin mining affects the cryptocurrency’s values. shutterstock.com

The second measure we looked at relates to the “hash rate”. This is the speed at which a computer operates when mining. To successfully mine Bitcoin, you must come up with a 64-digit hexadecimal number (called a “hash”), which is less than or equal to the target hash. The faster you can do this, the better chance you have of finding the next block and receiving payment.

The third measurement was “block size”. This relates to how large the chain is at any given time, with larger chains taking longer to mine than shorter ones.

And lastly we looked at the volume of transactions conducted. Any asset, in particular any currency, which is more widely used will be more valuable than one which is used less frequently.

In our study, we examined data from Bitcoin’s early days – from July 2010 to November 2017. The price of one Bitcoin did not rise above US$1 until April 16, 2011, then to US$10 on June 3, 2011 and US$100 on April 2, 2013. Since then the price rise has clearly been exceptional.

Price of Bitcoin

Source: Data: investing.com

We then applied an accepted method that is used to detect and date stamp bubbles after they burst. In essence, this involves identifying the existence of an explosive component in a series. As the series, here the price of bitcoin, “explodes”, it runs the risk, like any explosion, of flying apart.

A possibly counter-intuitive result of this approach is that if a fundamental driver and the price of an asset both show an explosive component, we might not conclude a bubble is present. A bubble is when something deviates from its fundamental value. If the fundamental value is itself growing explosively then the price would also.

Think of dividends on a stock. If, somehow, these were to grow at an explosive rate we might expect to see the price do the same. While unsustainable, this is not technically a bubble. To overcome this, we then date stamp a bubble as being present when the price shows an explosive component and the underlying fundamentals do not.

Here are the results of the analysis:

The Bitcoin Bubbles. Authors own calculations

The orange lines denote when the price is showing explosive behaviour. We also see a period where the hash rate was growing explosively – the blue columns in late 2013 and early 2014. This is also an indication of a price bubble, which went on to burst.

So there are clear points where bubbles are visible – including now. The price of Bitcoin at present shows explosive behaviour in the absence of anything similar in its fundamentals. We see the price moving upwards in a manner that is not related to the technical underpinnings. It is a clear bubble.

A weakness of these tests and indeed all bubble identification tests is that they take place after the bubble has burst. Even this test, which can be redone as swiftly as new data arrives, is such. Bubbles by their nature grow in a compound manner – so even a day or two delay in addressing the situation can make a bubble significantly worse.

What is not yet available is an accurate advanced warning bubble indicator. In its absence, this approach may be the best. Unfortunately, we cannot use this approach to determine the extent of the bubble. There is no well-accepted model that suggests a “fair” value for Bitcoin. But whatever that level is, it is almost certain that, at present, it is well below where we are now.