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Showing posts with label zcash. Show all posts
Showing posts with label zcash. Show all posts

Tuesday, September 19, 2017

JPMorgan CEO warns he will fire any employee trading Bitcoin for being “stupid.”

 

 
Tough stand: Dimon has warned that he will fire JPMorgan traders who traded in bitcoin ‘in a second. For two reasons: It’s against our rules, and they’re stupid. And both are dangerous.’ — AFP

NEW YORK: JPMorgan Chase & Co chief executive officer Jamie Dimon said he will fire any employee trading bitcoin for being “stupid.”

The cryptocurrency “won’t end well,” he told an investor conference in New York on Tuesday, predicting it will eventually blow up. “It’s a fraud” and “worse than tulip bulbs.”

If a JPMorgan trader began trading in bitcoin, he said: “I’d fire them in a second. For two reasons: It’s against our rules, and they’re stupid. And both are dangerous.”

Bitcoin has soared in recent months, spurred by greater acceptance of the blockchain technology that underpins the exchange method and optimism that faster transaction times will encourage broader use of the cryptocurrency.

Prices have climbed more than four-fold this year – a run that has drawn debate over whether that’s a bubble.

Bitcoin initially slipped after Dimon’s remarks. It was down as much as 2.7% before recovering.

Last week, it slumped after reports that China plans to ban trading of virtual currencies on domestic exchanges, dealing another blow to the US$150bil cryptocurrency market.

Tulips are a reference to the mania that swept Holland in the 17th century, with speculators driving up prices of virtually worthless tulip bulbs to exorbitant levels.

That didn’t end well.

In bitcoin’s case, Dimon said he’s sceptical authorities will allow a currency to exist without state oversight, especially if something goes wrong.

“Someone’s going to get killed and then the government’s going to come down,” he said.

“You just saw in China, governments like to control their money supply.”

Dimon differentiated between the bitcoin currency and the underlying blockchain technology, which he said can be useful.

Still, he said banks’ application of blockchain “won’t be overnight.”

The bank chief said he wouldn’t short bitcoin because there’s no telling how high it will go before it collapses.

The best argument he’s heard, he said, is that it can be useful to people in places with no other options – so long as the supply of coins doesn’t surge.

“If you were in Venezuela or Ecuador or North Korea or a bunch of parts like that, or if you were a drug dealer, a murderer, stuff like that, you are better off doing it in bitcoin than US dollars,” he said.

“So there may be a market for that, but it’d be a limited market.”— Bloomberg


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JPMorgan CEO warns he will fire any employee trading Bitcoin for being “stupid.”

 

 
Tough stand: Dimon has warned that he will fire JPMorgan traders who traded in bitcoin ‘in a second. For two reasons: It’s against our rules, and they’re stupid. And both are dangerous.’ — AFP

NEW YORK: JPMorgan Chase & Co chief executive officer Jamie Dimon said he will fire any employee trading bitcoin for being “stupid.”

The cryptocurrency “won’t end well,” he told an investor conference in New York on Tuesday, predicting it will eventually blow up. “It’s a fraud” and “worse than tulip bulbs.”

If a JPMorgan trader began trading in bitcoin, he said: “I’d fire them in a second. For two reasons: It’s against our rules, and they’re stupid. And both are dangerous.”

Bitcoin has soared in recent months, spurred by greater acceptance of the blockchain technology that underpins the exchange method and optimism that faster transaction times will encourage broader use of the cryptocurrency.

Prices have climbed more than four-fold this year – a run that has drawn debate over whether that’s a bubble.

Bitcoin initially slipped after Dimon’s remarks. It was down as much as 2.7% before recovering.

Last week, it slumped after reports that China plans to ban trading of virtual currencies on domestic exchanges, dealing another blow to the US$150bil cryptocurrency market.

Tulips are a reference to the mania that swept Holland in the 17th century, with speculators driving up prices of virtually worthless tulip bulbs to exorbitant levels.

That didn’t end well.

In bitcoin’s case, Dimon said he’s sceptical authorities will allow a currency to exist without state oversight, especially if something goes wrong.

“Someone’s going to get killed and then the government’s going to come down,” he said.

“You just saw in China, governments like to control their money supply.”

Dimon differentiated between the bitcoin currency and the underlying blockchain technology, which he said can be useful.

Still, he said banks’ application of blockchain “won’t be overnight.”

The bank chief said he wouldn’t short bitcoin because there’s no telling how high it will go before it collapses.

The best argument he’s heard, he said, is that it can be useful to people in places with no other options – so long as the supply of coins doesn’t surge.

“If you were in Venezuela or Ecuador or North Korea or a bunch of parts like that, or if you were a drug dealer, a murderer, stuff like that, you are better off doing it in bitcoin than US dollars,” he said.

“So there may be a market for that, but it’d be a limited market.”— Bloomberg


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Wednesday, August 9, 2017

Bitcoin must not in your retirement financial planning portfolio


Bitcoin investments have undeniably become a trend among savvy investors in search of the golden goose, but one financial planner is against the use of it as part of the financial planning portfolio for retirement.

Max Growth Wealth Education Sdn Bhd managing director Nicholas Chu said one should not use bitcoin as part of the retirement portfolio and the public must be well aware of the risk in bitcoin trading before getting in.

“It is not asset-backed, it is very unsecure. It is, basically, you want to participate in the future changes. It’s not a proper financial planning way. It is just an experimental thing that you want to go through in this era, but it is not a proper investment product,” he told SunBiz.

“I definitely don’t agree if they use this for their financial planning. But for those who are able to try new ventures, they can go ahead provided they have extra money. If this doesn’t affect their existing financial planning, then I’ll leave it to them. We need to tell them the pros and cons of this investment. It’s up to the clients to do the final decision,” he said.

Chu cautioned on the uncertainties of bitcoin trading, which is driven by market forces. “It is beyond anybody’s control, all the participants contribute to the bitcoin value. From that, I can say that there are a lot of uncertainties in the future,” he said.

Nonetheless, with the setting up of a few bitcoin exchanges, Chu noted that there will be demand and supply with tradeable markets available.

Bitcoin was the best-performing currency in 2015 and 2016, with a rise of 35.8% and 126.2% respectively.

Year to date, bitcoin prices have leaped more than three times. It stood at US$2,840 (RM12,140) as at 5pm last Friday.

Bitcoins are by the far the most popular cryptocurrency, which exists almost wholly in the digital realm and has no asset backing it. Bitcoin generation, known as mining, while open to anyone with a “mining application” on their computer, needs a great deal of computing power to solve complex algorithms which are later verified with the entire bitcoin network.

Colbert Low, founder of bitcoinmalaysia.com, said the recent spike in bitcoin prices could be partly due to the legalisation of bitcoin by the Japanese government.

He is unsure if the sharp rise in bitcoin prices will create a price bubble, but stressed that one cannot judge its price movement based on the “old economic theory”.

“This is a new economy based on a different model. It’s very hard to say,” Low opined, noting that there has been a growing number of retail outlets that accept bitcoin.

He foresees the usage of bitcoin propagating, especially in different types of payment methods.

However, Low opined that there will not be any “big movement” in the local market if the regulators do not regulate bitcoin.

“Our new Bank Negara governor is forward thinking and he is very much into fintech, technology and innovation. So there would definitely be improvement,” Low said.

The positive development of blockchain will be a catalyst for the growth of bitcoin, he added.

“Blockchain is a real thing that will change the way the IP system is architectured. We need to go down to a deeper level to see how blockchain can change the current problem and solve it.

“There are a lot of projects right now, over 500 companies are looking at this (blockchain) right now. Even IBM, HP and Microsoft are looking at it.”

Blockchain refers to distributed database that maintains a continuously growing list of records, called blocks, secure from tampering and revision. Bitcoin is just an application or software that runs on blockchain technology.

“If you look at blockchain technology, government agencies like the United Nations, the World Bank and the International Monetary Fund are looking at it. This is the best way to secure your data,” Low said, noting that the usage of bitcoin will help reduce operating cost.

Currently, there are about 16 million bitcoins in the market and the number is capped at 21 million.

Bank Negara has said that it does not regulate the cryptocurrency and advised the public to be cautious of the risks associated with the usage of such digital currency.

Source: By Lee Weng Khuen sunbiz@thesundaily.com

Related Links:


Related posts:

Bitcoins As Digital Currency's Rally Crushed Every Other Currency in 2016



Bitcoin, digital currencies rally, caution prevails; virtual currency in property





What is a BitCoin? Explained - Tech Tip Irrational exuberance is alive and well. A textbook bubble in Bitcoin prices is developing... 

Bitcoin must not in your retirement financial planning portfolio


Bitcoin investments have undeniably become a trend among savvy investors in search of the golden goose, but one financial planner is against the use of it as part of the financial planning portfolio for retirement.

Max Growth Wealth Education Sdn Bhd managing director Nicholas Chu said one should not use bitcoin as part of the retirement portfolio and the public must be well aware of the risk in bitcoin trading before getting in.

“It is not asset-backed, it is very unsecure. It is, basically, you want to participate in the future changes. It’s not a proper financial planning way. It is just an experimental thing that you want to go through in this era, but it is not a proper investment product,” he told SunBiz.

“I definitely don’t agree if they use this for their financial planning. But for those who are able to try new ventures, they can go ahead provided they have extra money. If this doesn’t affect their existing financial planning, then I’ll leave it to them. We need to tell them the pros and cons of this investment. It’s up to the clients to do the final decision,” he said.

Chu cautioned on the uncertainties of bitcoin trading, which is driven by market forces. “It is beyond anybody’s control, all the participants contribute to the bitcoin value. From that, I can say that there are a lot of uncertainties in the future,” he said.

Nonetheless, with the setting up of a few bitcoin exchanges, Chu noted that there will be demand and supply with tradeable markets available.

Bitcoin was the best-performing currency in 2015 and 2016, with a rise of 35.8% and 126.2% respectively.

Year to date, bitcoin prices have leaped more than three times. It stood at US$2,840 (RM12,140) as at 5pm last Friday.

Bitcoins are by the far the most popular cryptocurrency, which exists almost wholly in the digital realm and has no asset backing it. Bitcoin generation, known as mining, while open to anyone with a “mining application” on their computer, needs a great deal of computing power to solve complex algorithms which are later verified with the entire bitcoin network.

Colbert Low, founder of bitcoinmalaysia.com, said the recent spike in bitcoin prices could be partly due to the legalisation of bitcoin by the Japanese government.

He is unsure if the sharp rise in bitcoin prices will create a price bubble, but stressed that one cannot judge its price movement based on the “old economic theory”.

“This is a new economy based on a different model. It’s very hard to say,” Low opined, noting that there has been a growing number of retail outlets that accept bitcoin.

He foresees the usage of bitcoin propagating, especially in different types of payment methods.

However, Low opined that there will not be any “big movement” in the local market if the regulators do not regulate bitcoin.

“Our new Bank Negara governor is forward thinking and he is very much into fintech, technology and innovation. So there would definitely be improvement,” Low said.

The positive development of blockchain will be a catalyst for the growth of bitcoin, he added.

“Blockchain is a real thing that will change the way the IP system is architectured. We need to go down to a deeper level to see how blockchain can change the current problem and solve it.

“There are a lot of projects right now, over 500 companies are looking at this (blockchain) right now. Even IBM, HP and Microsoft are looking at it.”

Blockchain refers to distributed database that maintains a continuously growing list of records, called blocks, secure from tampering and revision. Bitcoin is just an application or software that runs on blockchain technology.

“If you look at blockchain technology, government agencies like the United Nations, the World Bank and the International Monetary Fund are looking at it. This is the best way to secure your data,” Low said, noting that the usage of bitcoin will help reduce operating cost.

Currently, there are about 16 million bitcoins in the market and the number is capped at 21 million.

Bank Negara has said that it does not regulate the cryptocurrency and advised the public to be cautious of the risks associated with the usage of such digital currency.

Source: By Lee Weng Khuen sunbiz@thesundaily.com

Related Links:


Related posts:

Bitcoins As Digital Currency's Rally Crushed Every Other Currency in 2016



Bitcoin, digital currencies rally, caution prevails; virtual currency in property





What is a BitCoin? Explained - Tech Tip Irrational exuberance is alive and well. A textbook bubble in Bitcoin prices is developing... 

Sunday, May 14, 2017

Bitcoin, digital currencies rally, caution prevails; virtual currency in property

Bitcoins As Digital Currency's Rally Crushed Every Other Currency in 2016
A collection of bitcoin tokens. Bloomberg—Bloomberg via Getty Images


Digital currencies rally, but caution prevails 


While investing in the future is the way to go, it comes with risks and rewards. The best strategy would be to not be in a rush. Do your homework.

THIS week, the rally in crypto currencies is at its all-time high.

Bitcoin, the pioneer in digital currency, surged to over US$1,700 per coin in anticipation of a reversal in United States financial regulators’ ruling to allow for an exchange-traded fund for Bitcoin and other factors.

Bitcoin was trading at US$935 on March 24. It rose 82%, pushing its market capitalisation to over US$28bil.

Ether, another such currency, surged from US$8 on Jan 1 to US$90 this week, gaining 1,125% in five months.

The market capitalisation of the 700-over currencies is over US$50bil. The promoters believe it is the currency of the future, hence the rise, but the naysayers believe it is entering a speculative bubble.

But there are some who are ditching gold to mine Bitcoins.

It is a fact that crypto currencies are gaining traction from their inception in 2009. Now, at least 150 organisations including Apple, Walmart, Sears, eBay, Overstock.com, Microsoft, Steam, Expedia and even Subway accept them in exchange for goods.

So, what is Bitcoin then?

It is a form of digital currency, created and held electronically, not blocked by any nation or government, not printed like dollars and ringgit but produced by people. Crypto currencies are digital currencies that use encryption to secure transactions and control how new coins are made.

You and I can get Bitcoins by “mining” computers that validate blocks of transactions using software to solve mathematical puzzles every 10 minutes. If you solve it first, you are rewarded with new Bitcoins.

Bitcoin is the mother of all crypto currencies – also known as virtual currencies, digital currencies and private currencies.

Other than Bitcoin and Ether, there is also Dogecoin, Augur, Chinacoin, Litecon, Dash, Waves and Zcash. There are over 40 exchanges globally to trade in Bitcoins.

All this came about because of fintech, the financial services technology that is disrupting the financial services sector with faster, cheaper and so-called “reliable” transactions for money transfers, bank exchange rates and other money-related transactions. The average clearance is a 12-hour period, which apparently the banks cannot match.

In Brazil, people use Zcash to pay for their taxes, electricity bills and purchases.

This week, Australia said there would be no double taxation for crypto currencies and to treat it just like other currencies from July 1, paving the way for greater usage.

Many are betting on crypto currencies because of the lure that they are the currency of the future. Would you?

Since 2009, there have been gainers and losers, so you decide.

All these digital currencies came about because of the Internet and data. The value of data and digital services is becoming more apparent, and in the digital era, data is the new currency.

Amid all this is blockchain, which is simply a digital ledger that keeps track of Bitcoin transactions and transfers it globally. It boasts of instantaneous transactions, transparent and cheaper than the traditional ways. This is why banks are hurriedly getting their acts together in the area of fintech so as to not miss the boat.

There is a growing number of mergers and acquisitions and crowdfunding for blockchains. Last month, music-podcast-video streaming service Spotify bought over blockchain technology company Mediachain Labs to help reward online content owners with royalty payments.

Other telcos and IT firms are getting into blockchain because they don’t want to miss out on anything. Other payment companies are getting into the act too. There is just too much interest in this new wave of doing things.

The journey of crypto currencies, however, is not without hurdles, and there are plenty out there that cannot be ignored. Even blockchain’s growth cannot be ignored, especially since it is being positioned by those championing it as the de facto technology of the future.

But will it really be all that or will it just add another layer to the overall cost?

All these transfers do not need regulation as yet, something that central bankers don’t like. In fact, Bank Negara is already in the thick of things where fintech is concerned.

While investing in the future is the way to go, it comes with risks and rewards. The best strategy would be to not be in a rush. Do your homework, as there is also the other side of Bitcoin – fake websites, fake online gaming sites, trading, etc.

I bet you would know of someone who has lost money mining Bitcoin or Ether. You honestly wouldn’t want to be put in a spot like those caught up in the recent forex scam and the earlier gold scam.

It would be good too to bear in mind that the sweet spot of crypto currencies has been linked to terrorism financing, money laundering, tax evasion and fraud.

Trust and transparency have been the bedrock of financial institutions all these years. Ensure your bedrock is solid, but at the same time, remember what the former US Federal Reserve chairman Ben Bernanke had said in a letter to US senators about virtual currencies, that they “may hold long-term promise, particularly if the innovations promote a faster, more secure, and more efficient payment system”.

Do you think blockchain will bring trust and transparency to the world of crypto currency? Share your thoughts with me at bksidhu@thestar

Source: The Star by b.k. sidhu

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China central bank holds meeting with bitcoin exchanges





  • It’s the blockchain not the bitcoin

  •  

    Property in a digital era


    WITH digital technology all the rage and taking the world by storm, we look at how science and automation has managed to change and revolutionise the way we do things, in this section, property.

    While the internet has changed the way we receive information and connect with others and the smart phone transformed the whole concept of a phone, we now look at the evolution of finance and how purchasing items, including a house, is going through reform with the introduction of bitcoin.

    Introducing bitcoin

    When people hear terms like "bitcoin" and "blockchain", many are vague while some may not even be familiar with these words. But for the technology industry adept, bitcoin and blockchain is common as these new-age technology concepts and modus operandi have been around, perhaps less widely known in Southeast Asia as it is in the West and China.

    For the uninformed and in the dark, bitcoin is a technology that has established a new electronic payment method using "digitised money" made with digital cryptography, otherwise known as cryptocurrency.

    This system of payment is carried out when a user uses "bitcoin currency" (or cryptocurrency) to pay for goods by transferring the currency to another user (seller) within the bitcoin community.

    Each transaction is recorded in a public data ledger known as "blockchain" and it is here where all the transactions that have taken place within the bitcoin community are stored.

    The amazing thing about this system is that anyone in the bitcoin community is able to validate transactions that take place without the need of an intermediary.

    Sound too good to be true and a little risky? Well, the reason there is no intermediate party necessary is due to the network bitcoin technology is regulated on.

    Modus operandi and more

    The bitcoin network is founded on a "peer-to-peer network system (P2P network)" which is explained as "a network of computers/ mobile configured to allow certain files and folders to be shared with everyone or with selected users".

    As a result, the "participants" are in control of their transactions, making everyone equal within the bitcoin community, which is also transparent.

    It is said that bitcoin technology was first created in 2008 by a person or a group of persons under the pseudonym "Satoshi Nakamoto" in a research paper. The research stated that there was need for a new electronic payment method, one using digitised money. The analysis also included the future of bitcoin, its benefits, capabilities and potential.

    The system was implemented on Jan 3, 2009. And after just a few years, bitcoin grew to become a whopping US$12 billion (RM52.7 billion) globalised economy.

    Bitcoin attributes

    While not much has been said about bitcoin in this part of the region, the system has been around, slowly developing and growing. Like many things that are cloudy and not often talked about, people are weary hence, there will be sceptics who dissuade others about the system they themselves are unclear about.

    With that, theSun's Brian Chung shares what he learnt of this new method of transaction and currency when he attended a talk by renowned entrepreneur, author and expert on bitcoin Andreas M. Antonopoulos.

    Below, Antonopolous shares important information on bitcoin.

    1) Bitcoin is an open system of payment: It is a system that anyone can access, participate and innovate, and does not require permission. Bitcoin allows anyone to join in and use the system, validate the transaction and create different kinds of cryptocurrency.

    2) Bitcoin is borderless: Like the internet, bitcoin is not restricted to a country's rules and regulations as it has its own protocol with no distinction across countries.

    3) Bitcoin is neutral: Bitcoin does not take the identity of the participant into any consideration. It only validates the transaction that takes place between participants. This attribute also allows participants to remain anonymous.

    4) Bitcoin is censorship resistant: Every transaction in the bitcoin network cannot be frozen, censored or canceled. Like the internet, the bitcoin system is a global digital economy with one currency.

    5) Bitcoin is a decentralised system: The bitcoin network has no central institution or centre point of control. This trait ensures that there is no one major target for hackers to concentrate their attacks on. Instead, hackers have to create attacks on every single participant's software with different forms of virus and codes to hack into one computer.

    6) Bitcoin is scarce and limited: Bitcoin is a system of value like gold but in digital form. This makes it a system that is not based on credit and debit. It also makes bitcoin a singular global currency with no exchange rate between countries.

    7) Every bitcoin transaction is permanent and immutable: The transaction of everyone in the community is verified by everyone in the system. Once it is verified, the transaction will be permanently recorded in the blockchain.

    8) Bitcoin is a constantly innovative technology: The open source nature of the bitcoin technology allows other people to further improve on it. There are many other cryptocurrencies based on the bitcoin technology. Moreover, the bitcoin technology is dependent on the internet, which makes improvement and innovation necessary.

    Bitcoin transactions can be done via smart phones and computers by downloading the application and software. Users do not need to register themselves to be part of the bitcoin network as all "participants" are referred to by codes and "signature of one's device".

    However, iPhone users need to remember their iTunes password to download the application. In addition, the device that one has downloaded the bitcoin software on must remain connected to the internet in order for one to use the bitcoin method of payment.

    Follow our column next week on the application of bitcoin in property.

    [Note: All charts courtesy of Bitcoin Malaysia.]

    The application of bitcoin in property



    WHILE last week, we introduced the term bitcoin to those oblivious of this new age cryptocurrency and system of payment, this week, we share bitcoin whiz Andreas M. Antonopoulus' insights on how this technology is applied in property. Here is what he had to say:

    Permanent records

    "One very common application is the registration of assets or ownership of tangible and non-tangible things like the registration of title over land and the ownership of assets like homes.

    When you record something on blockchain, it cannot be modified ... it is immutable. Once recorded on the blockchain, the system of trust prevents anyone from reversing or overwriting it. That makes a record on blockchain permanent, an immutable record which is really important in real estate transaction as it allows one to pass the title of a piece of land from person to person independently with no one being able to falsify the record or steal land through paper," Antonopoulos said.

    Moreover, he mentioned that this technology can benefit the industry tremendously as it is able to resolve a huge problem in real estate and property transactions – the falsification of strata titles and property documents.

    His view is further enhanced with the emergence of another bitcoin-based system, ethereum. Like bitcoin, ethereum has its own cryptocurrency known as ether. However, ethereum adopts a different technology that is based on the blockchain public ledger system known as Smart Contract.



    According to Antonopoulos, a smart contract is an electronic contract with all the contractual obligations of the buyer and seller. The contract is written and coded into an application, which will ensure both parties fulfill their obligations.

    Like blockchain technology that is built on trust and verification, these contracts are encoded in a public ledger in the ethereum community. If anyone tries to forge the contract, the ledger will reject it. As such, this smart contract cannot be rewritten and altered as it is a permanent and immutable contract.

    Direct transactions

    Besides the use of a contract, the technology will make transactions direct, fast and secure.

    Antonopoulos also shared about the removal of third parties and its altered role. He said, "Another example relevant to real estate application is the function of escrow. In order to do make transactions for real estate today, people have to use a third party agent, an escrow agent. This escrow agent charges a significant amount of money in most countries. During the process, that agent holds custody of the entire fund, which is dangerous. This means that the escrow agent has to be carefully vetted and have foresight.

    Bitcoin can replace all of this by using multi-signature, which allows the seller and buyer to transact escrow programmatically, with the third party acting as mediator only in the case of a dispute.

    Buyer and seller will be able to execute a transaction on their own without the need of an escrow agent and without any of the parties having custody of the entire fund. Through bitcoin, you do not need to spend that additional one percent of the sale of the house – the escrow agent is no longer necessary.

    It can also change the speed of escrow by doing it in hours instead of a month and changes the security because no one of the three parties can run away with the money. It is faster, cheaper and secure. It can be done in other industries related to real estates like purchasing assets, corporation, mergers and acquisitions.

    International property purchase

    With the use of decentralised digital currency, one can assume that purchasing items and properties is a little easier, and it is.

    The chance of purchasing international property is further reinforced by the fact that bitcoin is not controlled by anyone, not even political and banking institutions. This attribute of bitcoin makes it easier for people buying property from another country. Although each country has its regulations, the use of bitcoin to purchase property abroad saves time and money as one does not need to change currency.

    The Australia Real Estate website has stated that there are properties in the United States and Latin America being sold using bitcoin. The Wall Street Journal wrote an article in 2014 regarding a Lake Tahoe property, which was sold for US$1 million in bitcoin.

    Follow our column next week for more interesting information on bitcoin, its challenges and how stable a cryptocurrency it is.

    By rian Chung

    Related articles:

    Bitcoin, digital currencies rally, caution prevails; virtual currency in property

    Bitcoins As Digital Currency's Rally Crushed Every Other Currency in 2016
    A collection of bitcoin tokens. Bloomberg—Bloomberg via Getty Images


    Digital currencies rally, but caution prevails 


    While investing in the future is the way to go, it comes with risks and rewards. The best strategy would be to not be in a rush. Do your homework.

    THIS week, the rally in crypto currencies is at its all-time high.

    Bitcoin, the pioneer in digital currency, surged to over US$1,700 per coin in anticipation of a reversal in United States financial regulators’ ruling to allow for an exchange-traded fund for Bitcoin and other factors.

    Bitcoin was trading at US$935 on March 24. It rose 82%, pushing its market capitalisation to over US$28bil.

    Ether, another such currency, surged from US$8 on Jan 1 to US$90 this week, gaining 1,125% in five months.

    The market capitalisation of the 700-over currencies is over US$50bil. The promoters believe it is the currency of the future, hence the rise, but the naysayers believe it is entering a speculative bubble.

    But there are some who are ditching gold to mine Bitcoins.

    It is a fact that crypto currencies are gaining traction from their inception in 2009. Now, at least 150 organisations including Apple, Walmart, Sears, eBay, Overstock.com, Microsoft, Steam, Expedia and even Subway accept them in exchange for goods.

    So, what is Bitcoin then?

    It is a form of digital currency, created and held electronically, not blocked by any nation or government, not printed like dollars and ringgit but produced by people. Crypto currencies are digital currencies that use encryption to secure transactions and control how new coins are made.

    You and I can get Bitcoins by “mining” computers that validate blocks of transactions using software to solve mathematical puzzles every 10 minutes. If you solve it first, you are rewarded with new Bitcoins.

    Bitcoin is the mother of all crypto currencies – also known as virtual currencies, digital currencies and private currencies.

    Other than Bitcoin and Ether, there is also Dogecoin, Augur, Chinacoin, Litecon, Dash, Waves and Zcash. There are over 40 exchanges globally to trade in Bitcoins.

    All this came about because of fintech, the financial services technology that is disrupting the financial services sector with faster, cheaper and so-called “reliable” transactions for money transfers, bank exchange rates and other money-related transactions. The average clearance is a 12-hour period, which apparently the banks cannot match.

    In Brazil, people use Zcash to pay for their taxes, electricity bills and purchases.

    This week, Australia said there would be no double taxation for crypto currencies and to treat it just like other currencies from July 1, paving the way for greater usage.

    Many are betting on crypto currencies because of the lure that they are the currency of the future. Would you?

    Since 2009, there have been gainers and losers, so you decide.

    All these digital currencies came about because of the Internet and data. The value of data and digital services is becoming more apparent, and in the digital era, data is the new currency.

    Amid all this is blockchain, which is simply a digital ledger that keeps track of Bitcoin transactions and transfers it globally. It boasts of instantaneous transactions, transparent and cheaper than the traditional ways. This is why banks are hurriedly getting their acts together in the area of fintech so as to not miss the boat.

    There is a growing number of mergers and acquisitions and crowdfunding for blockchains. Last month, music-podcast-video streaming service Spotify bought over blockchain technology company Mediachain Labs to help reward online content owners with royalty payments.

    Other telcos and IT firms are getting into blockchain because they don’t want to miss out on anything. Other payment companies are getting into the act too. There is just too much interest in this new wave of doing things.

    The journey of crypto currencies, however, is not without hurdles, and there are plenty out there that cannot be ignored. Even blockchain’s growth cannot be ignored, especially since it is being positioned by those championing it as the de facto technology of the future.

    But will it really be all that or will it just add another layer to the overall cost?

    All these transfers do not need regulation as yet, something that central bankers don’t like. In fact, Bank Negara is already in the thick of things where fintech is concerned.

    While investing in the future is the way to go, it comes with risks and rewards. The best strategy would be to not be in a rush. Do your homework, as there is also the other side of Bitcoin – fake websites, fake online gaming sites, trading, etc.

    I bet you would know of someone who has lost money mining Bitcoin or Ether. You honestly wouldn’t want to be put in a spot like those caught up in the recent forex scam and the earlier gold scam.

    It would be good too to bear in mind that the sweet spot of crypto currencies has been linked to terrorism financing, money laundering, tax evasion and fraud.

    Trust and transparency have been the bedrock of financial institutions all these years. Ensure your bedrock is solid, but at the same time, remember what the former US Federal Reserve chairman Ben Bernanke had said in a letter to US senators about virtual currencies, that they “may hold long-term promise, particularly if the innovations promote a faster, more secure, and more efficient payment system”.

    Do you think blockchain will bring trust and transparency to the world of crypto currency? Share your thoughts with me at bksidhu@thestar

    Source: The Star by b.k. sidhu

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    China central bank holds meeting with bitcoin exchanges





  • It’s the blockchain not the bitcoin

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    Property in a digital era


    WITH digital technology all the rage and taking the world by storm, we look at how science and automation has managed to change and revolutionise the way we do things, in this section, property.

    While the internet has changed the way we receive information and connect with others and the smart phone transformed the whole concept of a phone, we now look at the evolution of finance and how purchasing items, including a house, is going through reform with the introduction of bitcoin.

    Introducing bitcoin

    When people hear terms like "bitcoin" and "blockchain", many are vague while some may not even be familiar with these words. But for the technology industry adept, bitcoin and blockchain is common as these new-age technology concepts and modus operandi have been around, perhaps less widely known in Southeast Asia as it is in the West and China.

    For the uninformed and in the dark, bitcoin is a technology that has established a new electronic payment method using "digitised money" made with digital cryptography, otherwise known as cryptocurrency.

    This system of payment is carried out when a user uses "bitcoin currency" (or cryptocurrency) to pay for goods by transferring the currency to another user (seller) within the bitcoin community.

    Each transaction is recorded in a public data ledger known as "blockchain" and it is here where all the transactions that have taken place within the bitcoin community are stored.

    The amazing thing about this system is that anyone in the bitcoin community is able to validate transactions that take place without the need of an intermediary.

    Sound too good to be true and a little risky? Well, the reason there is no intermediate party necessary is due to the network bitcoin technology is regulated on.

    Modus operandi and more

    The bitcoin network is founded on a "peer-to-peer network system (P2P network)" which is explained as "a network of computers/ mobile configured to allow certain files and folders to be shared with everyone or with selected users".

    As a result, the "participants" are in control of their transactions, making everyone equal within the bitcoin community, which is also transparent.

    It is said that bitcoin technology was first created in 2008 by a person or a group of persons under the pseudonym "Satoshi Nakamoto" in a research paper. The research stated that there was need for a new electronic payment method, one using digitised money. The analysis also included the future of bitcoin, its benefits, capabilities and potential.

    The system was implemented on Jan 3, 2009. And after just a few years, bitcoin grew to become a whopping US$12 billion (RM52.7 billion) globalised economy.

    Bitcoin attributes

    While not much has been said about bitcoin in this part of the region, the system has been around, slowly developing and growing. Like many things that are cloudy and not often talked about, people are weary hence, there will be sceptics who dissuade others about the system they themselves are unclear about.

    With that, theSun's Brian Chung shares what he learnt of this new method of transaction and currency when he attended a talk by renowned entrepreneur, author and expert on bitcoin Andreas M. Antonopoulos.

    Below, Antonopolous shares important information on bitcoin.

    1) Bitcoin is an open system of payment: It is a system that anyone can access, participate and innovate, and does not require permission. Bitcoin allows anyone to join in and use the system, validate the transaction and create different kinds of cryptocurrency.

    2) Bitcoin is borderless: Like the internet, bitcoin is not restricted to a country's rules and regulations as it has its own protocol with no distinction across countries.

    3) Bitcoin is neutral: Bitcoin does not take the identity of the participant into any consideration. It only validates the transaction that takes place between participants. This attribute also allows participants to remain anonymous.

    4) Bitcoin is censorship resistant: Every transaction in the bitcoin network cannot be frozen, censored or canceled. Like the internet, the bitcoin system is a global digital economy with one currency.

    5) Bitcoin is a decentralised system: The bitcoin network has no central institution or centre point of control. This trait ensures that there is no one major target for hackers to concentrate their attacks on. Instead, hackers have to create attacks on every single participant's software with different forms of virus and codes to hack into one computer.

    6) Bitcoin is scarce and limited: Bitcoin is a system of value like gold but in digital form. This makes it a system that is not based on credit and debit. It also makes bitcoin a singular global currency with no exchange rate between countries.

    7) Every bitcoin transaction is permanent and immutable: The transaction of everyone in the community is verified by everyone in the system. Once it is verified, the transaction will be permanently recorded in the blockchain.

    8) Bitcoin is a constantly innovative technology: The open source nature of the bitcoin technology allows other people to further improve on it. There are many other cryptocurrencies based on the bitcoin technology. Moreover, the bitcoin technology is dependent on the internet, which makes improvement and innovation necessary.

    Bitcoin transactions can be done via smart phones and computers by downloading the application and software. Users do not need to register themselves to be part of the bitcoin network as all "participants" are referred to by codes and "signature of one's device".

    However, iPhone users need to remember their iTunes password to download the application. In addition, the device that one has downloaded the bitcoin software on must remain connected to the internet in order for one to use the bitcoin method of payment.

    Follow our column next week on the application of bitcoin in property.

    [Note: All charts courtesy of Bitcoin Malaysia.]

    The application of bitcoin in property



    WHILE last week, we introduced the term bitcoin to those oblivious of this new age cryptocurrency and system of payment, this week, we share bitcoin whiz Andreas M. Antonopoulus' insights on how this technology is applied in property. Here is what he had to say:

    Permanent records

    "One very common application is the registration of assets or ownership of tangible and non-tangible things like the registration of title over land and the ownership of assets like homes.

    When you record something on blockchain, it cannot be modified ... it is immutable. Once recorded on the blockchain, the system of trust prevents anyone from reversing or overwriting it. That makes a record on blockchain permanent, an immutable record which is really important in real estate transaction as it allows one to pass the title of a piece of land from person to person independently with no one being able to falsify the record or steal land through paper," Antonopoulos said.

    Moreover, he mentioned that this technology can benefit the industry tremendously as it is able to resolve a huge problem in real estate and property transactions – the falsification of strata titles and property documents.

    His view is further enhanced with the emergence of another bitcoin-based system, ethereum. Like bitcoin, ethereum has its own cryptocurrency known as ether. However, ethereum adopts a different technology that is based on the blockchain public ledger system known as Smart Contract.



    According to Antonopoulos, a smart contract is an electronic contract with all the contractual obligations of the buyer and seller. The contract is written and coded into an application, which will ensure both parties fulfill their obligations.

    Like blockchain technology that is built on trust and verification, these contracts are encoded in a public ledger in the ethereum community. If anyone tries to forge the contract, the ledger will reject it. As such, this smart contract cannot be rewritten and altered as it is a permanent and immutable contract.

    Direct transactions

    Besides the use of a contract, the technology will make transactions direct, fast and secure.

    Antonopoulos also shared about the removal of third parties and its altered role. He said, "Another example relevant to real estate application is the function of escrow. In order to do make transactions for real estate today, people have to use a third party agent, an escrow agent. This escrow agent charges a significant amount of money in most countries. During the process, that agent holds custody of the entire fund, which is dangerous. This means that the escrow agent has to be carefully vetted and have foresight.

    Bitcoin can replace all of this by using multi-signature, which allows the seller and buyer to transact escrow programmatically, with the third party acting as mediator only in the case of a dispute.

    Buyer and seller will be able to execute a transaction on their own without the need of an escrow agent and without any of the parties having custody of the entire fund. Through bitcoin, you do not need to spend that additional one percent of the sale of the house – the escrow agent is no longer necessary.

    It can also change the speed of escrow by doing it in hours instead of a month and changes the security because no one of the three parties can run away with the money. It is faster, cheaper and secure. It can be done in other industries related to real estates like purchasing assets, corporation, mergers and acquisitions.

    International property purchase

    With the use of decentralised digital currency, one can assume that purchasing items and properties is a little easier, and it is.

    The chance of purchasing international property is further reinforced by the fact that bitcoin is not controlled by anyone, not even political and banking institutions. This attribute of bitcoin makes it easier for people buying property from another country. Although each country has its regulations, the use of bitcoin to purchase property abroad saves time and money as one does not need to change currency.

    The Australia Real Estate website has stated that there are properties in the United States and Latin America being sold using bitcoin. The Wall Street Journal wrote an article in 2014 regarding a Lake Tahoe property, which was sold for US$1 million in bitcoin.

    Follow our column next week for more interesting information on bitcoin, its challenges and how stable a cryptocurrency it is.

    By rian Chung

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