Jon Matonis, who helped found the Bitcoin Foundation in 2012, told Business Insider: “To the people who say bitcoin’s a bubble, I would say bitcoin is the pin that’s going to pop the bubble. The bubble is the insane bond markets and the fake equity markets that are propped up by the central banks. Those are the bubbles.”
Matonis, who spoke to Business Insider at the Innovate Finance conference in London earlier this month, believes we are entering the “post-legal tender age … that isn’t driven by central banks.” Decentralized cryptocurrencies like bitcoin will power this shift, he said.
“Hard coded into the original block zero genesis block of bitcoin was a headline from The Times of London saying: ‘Chancellor on the brink of second bailout for banks,'” Matonis said. “All they’re doing is papering over the bullshit infrastructure. That headline epitomizes what bitcoin is about, that’s why it was hardcoded in there.”
Matonis was a currency trader for the Japanese bank Sumitomo and Visa before he helped set up the Bitcoin Foundation in 2012. The non-profit was created to help compensate the core developers of the bitcoin protocol. Matonis sat on the foundation’s board from 2012 to 2014 and remains an executive director.
‘The regulators are so confused’
Despite his skepticism about the existing financial system, Matonis thinks it’s “wonderful” that big banks such as Goldman Sachs are considering entering the world of crypto.
“I think it’s fabulous that they’re getting into it because it brings in new liquidity,” he said, adding that the institutions will help “mature the market” and reduce volatility.
“They’re going to develop futures markets, options markets, I even think you’re going to start to see interest rate markets around bitcoin,” he said. “We’re used to hearing things about Libor, the index for bitcoin interest rates is Bibor.”
“I think we should operate in an environment of caveat emptor, let the buyer do his research,” he said. “This hopefully has forced a lot of investors to do more research. No one is forcing them to invest in ICOs [initial coin offerings]. If you’re worried about the risk, just walk away.”
He added: “The regulators are so confused, not just in Europe but in North America as well. They’re used to fundraising models that involve selling debt or selling equity.”
Matonis characterized bitcoin as a “third model for a startup to raise funds.”
“They actually issue utility tokens into the market that don’t represent equity, they don’t represent equity, they don’t represent debt, they represent a negotiable claim on the success of the token which is in effect, hopefully, linked to the success of the company,” he said.
“This is an entirely new model and it doesn’t fit in any of the regulator’s boxes.”
Share your thoughts on this topic in the comments below.
It seems that no matter which direction you turn, there is now talk of Bitcoin, Lambo’s and Mining just about everywhere.
Here’s the thing: Just about any device capable of banging a few numbers together can contribute to a cryptocurrency mining pool, and that means almost any device can technically mine any cryptocurrency you choose, even Bitcoin.
Thing is, it might take you a little while.
For our tests to figure out how long it might take you to make, say, $1,000,000 in Bitcoin using just a couple laptops, we used user-friendly mining pool NiceHash. Getting set up on NiceHash is as simple as creating an account and downloading a free software suite. Once it finishes installing, connect your NiceHash wallet by signing into the app, and then all you have to do is click start, and you’ll be rolling in bitcoins in no time!
A dip in the pool
To figure out how long it’d take for us to strike it rich mining with just a laptop, we used an Asus ZenBook UX330UA with an integrated graphics chip. Just in case, we also had a couple others standing by — a Dell Inspiron 15 Gaming, a Dell XPS 13, a Microsoft Surface Pro, and a MacBook Pro 15.
First, we ran the ZenBook on its own for about 24 hours to establish a baseline, but pretty soon after that we realized our little pool was going to need more power if we wanted to come anywhere close to our goal of $1,000,000 in bitcoin, so we fired up all of our laptops, bringing some serious horsepower to bear on the task.
Doing that was as simple as installing the NiceHash software on each laptop and connecting them all to our NiceHash wallet. After we left ’em running for another twenty-four hours, we were starting to see some real results.
How much did we make with all of our laptops toiling away in the bitcoin mines? Well, we made about nine cents a day with just one laptop, and with all of them running we made around forty cents a day, give or take, depending on the current price of Bitcoin. That means it would take us an excess of 6,800 years to become bitcoin millionaires from mining off just a couple laptops.
So, while you can mine Bitcoin — or any other cryptocurrency — from any old laptop, you probably shouldn’t. Unless you have a couple thousand years to spare.
What have you had success mining with? Share in the comments section below.
US technology company Intel has filed a patent for a Bitcoin (BTC) mining hardware accelerator that would reduce the amount of electricity used in crypto mining by “reducing the space utilized and power consumed by Bitcoin mining hardware,” according to a US Patent and Trademark Office patent application released yesterday, March 29.
The patent, originally filed on Sept. 23 of last year, seeks to solve the “challenge for miners” of “search[ing] through the entire nonce space in a brute force manner while minimizing energy consumption per hash and maximizing performance per watt.”
According to Intel, this can be done by “optimizing the critical paths in the computation intensive message digest and scheduler datapaths,” resulting in “extra time” that can “reduce switching capacitance or scale the supply voltage” to create a “35% combinational power improvement in the message digest logic.”
The mining of Bitcoin, which Intel refers to as the “most popular type of (e.g., unit of) digital currency used in the digital currency eco-system,” needs large amounts of electricity to solve algorithms to mine for the coin. Bitcoin mining energy has been called by some as as an “environmental disaster,” while the other side argues that the possibility of using leftover electricity and renewable energy makes mining a “non-issue” for the environment.
The patent application writes that “because of the large amount of power utilized, and the relatively high cost of that power, mining Bitcoins can be a very costly endeavor. In some embodiments, the cost to mine a single Bitcoin may exceed the value of the mined Bitcoin.”
Intel’s patent application notes that it refers to ASIC implementations for “convenience,” although their system could apply to “any other logic device […] including, but not limited to Processors, SoCs, and FPGA platforms.”
This patent application is not Intel’s first foray into the crypto sphere. In May of last year, Intel partnered with healthcare transaction service provider and software development firm PokitDok in order to utilize Blockchain technology in the healthcare industry.
In September 2017, Intel announced a collaboration with Chinese media and technology firm Tencent for working on an Internet of Things (IoT) Blockchain solution, and in October, Intel partnered with virtual currency hardware startup firm Ledger in order to use their Blockchain platform for storing crypto holdings.
Investors in Bitcoin, Ripple, Ethereum, and other major cryptocurrencies should closely watch the Federal Reserve to get a sense of how fast and how far U.S. interest rates will climb. For an obvious reason: higher interest rates could deflate the price of these assets, as they did back in early 2000 with dot.com stocks.
Bitcoin Ripple, Ripple, Ethereum, and other cryptocurrencies have turned scores of investors who placed their bets into these investments into millionaires. But cryptocurrency investors can lose their millions faster than they made them, and then some, if the market momentum turns in the wrong direction.
That’s what is usually the case for investors who make decisions based on emotions rather than intelligence—including Sir Isaac Newton, who lost a small fortune in the South Sea Bubble.
To be fair, it isn’t known whether an asset is in a bubble territory — until the bubble bursts and investors lose a great deal of money.
Meanwhile, some cryptocurrency experts believe that the Fed’s policies won’t have a big impact on cryptocurrency prices. Shidan Gouran, President and COO of Global Blockchain, is one of them.
“Higher interest rates won’t crush Bitcoin, but they will certainly have an effect on it,” says Gouran. “This is the case for two reasons. The first reason is the slightly more obvious one; low interest rates have made traditional investment vehicles less attractive. This is exactly what made ‘alternative’ investment methods such as Bitcoin appealing in the first place. Higher interest rates will alleviate this disadvantage for traditional forms of investment, which does stand to displace some investment in Bitcoin. The second reason has to do with a side effect of Bitcoin’s popularity. As Bitcoin’s value began to spike in December, people started taking out second mortgages on their homes to fund Bitcoin purchases. A rise in interest rates will likely cause a lot of panic selling, because the second mortgages (which have higher rates than first mortgages) will soon become too expensive to service, and investors will likely seek to recover their capital by selling their Bitcoin, even at a loss.”
Darren Marble, CEO of CrowdfundX, agrees with Gouran that higher interest rates won’t have a big impact on the price of cryptocurrencies. He worries more about the uncertainty surrounding cryptocurrency regulations than he does about the prospect of rising interest rates.
“I do not believe higher interest rates will crush Bitcoin anytime soon,” says Marble.“The Fed is raising interest rates. But it’s doing so cautiously. As we have seen over the past couple months, uncertainty around regulation has been a much bigger factor in the price depreciation of Bitcoin than interest rates might have.”
Meanwhile, David Drake, CEO of LDJ Capital, sees Bitcoin and other cryptocurrencies as “a hedge against increasing interest rates as a new investment asset.” But he warns investors not to place a big portion of their savings in the digital currency.
After a prolonged correction, Bitcoin is back big time. The “people’s currency” has been gaining momentum again as it test the $9000 resistance point.
Is this comeback for real?
Hard to say, as there are hardly any “fundamentals” to judge whether Bitcoin is undervalued or overvalued at these levels. Still, there are a couple of bullish signs for the digital currency worth noticing.
One of them is that Bitcoin is beginning to behave like the ‘new gold,’ shining in times of extreme uncertainty that take over Wall Street.
There was a time when gold would shine as Wall Street faltered. That was long time ago, when it was the hedge against uncertainty. It was the asset where investors could park their cash in times of political and economic turmoil.
Now Bitcoin is taking its place, as evidenced by the performance of the two assets overtime.
Bitcoin, for instance, rallied last week, as conventional gold and stocks faltered, due to anxiety over the direction of interest rates and world trade. The “people’s currency” gained 13.95% in early in the week and 22.81% in the last 30 days. Meanwhile, the SPDR Gold Trust lost 2.31% and 2.51% over the same period, and the S&P500 lost 3.53% and 4.93%.
SPDR Gold Trust
SPDR S&P 500
Bitcoin displayed a similar pattern last year. It rallied as North Korean dictator Kim Jong-un was launching missiles over Japan, and as China was trying to write its own navigation rules in South China Sea.
That’s why Bitcoin is often referred to as the new ‘gold.’
Another bullish sign is that Bitcoin is beginning to respond positively to SEC’s efforts to fight fraud in the cryptocurrency markets. Last week’s rally, for instance, came as SEC cracked down on certain Initial Coin Offerings (ICOs).
That’s quite different from last July when Bitcoin headed south on the news that the SEC was getting ready to regulate ICOs.
Apparently, Bitcoin investors are getting it right: government regulation is good for the digital currency. It helps build trust among market participants, while limiting the supply of competing coins.