Tag Archives: Peercoin

Cryptocurrency Outlook

Coins

What is store for the cryptocurrency near-future? More ICO’s (Initial Coin Offerings) or a slow realization that public blockchains are risky?

In the realm of the digital, cryptography is definitely a contender for your money. Not unlike your retirement plans, savings accounts and the cash hoard under your mattress. You might also be surprised that cryptography is changing more than finance, however.

Cryptocurrency is creating its own financial vortex. An ever growing singularity threatening to unravel, not only the monetary systems in place today, but the social systems upon which they rely.

What would happen if the state money you have in your bank went the way of the Dodo Bird? Would you use gold, silver or a cryptocurrency to get you through the bad times? Perhaps a lesson is unfolding right before our eyes.

The average Venezuelan could tell you about bad times. Their economy continues to nose dive as their monetary system crashes. Social services, food, water, medicine? All hard to come by. And it is a result of policies that made their money evaporate. They simply “printed” too much and it — their entire social system — is dying as a result.

…cryptocurrency can be hidden much easier than silver coins.

Is bitcoin  propping up the average Venezuelan citizen today? Certainly, it is helping. Government agents cannot reach into the Bitcoin Bank and take your money. They can, however, force you to give up your passwords and make you transfer your funds to them. Unless you use a third party service. One in another country that refuses to release your funds.

In short, cryptocurrency can be hidden much easier than silver coins.

More specifically, it is in cryptocurrency that many of us place our hopes and dreams. But are our hopes misplaced? Is this new fin-tech space a mere blip in the larger scale of the Information Age?

If bitcoin cannot be “over-printed,” by design, what is it really? A steadily valuing asset, so long as we keep using and buying and trusting it? Trusting a digitized currency?

Many of us already know the risks involved with Bitcoin or any cryptocurrency. You can stand to gain, maintain, or lose your proverbial behind. Billions of dollars of real money have been made during this ongoing; and certainly speculative run up. Values continue to climb, then retreat, and most unfortunately, the system itself, especially the most popular cryptocurrency of all, bitcoin, is showing signs of strain.

We can make comparisons all day. The Dot.com bubble. Tulip Mania. Speculation. A craze. Decentralized money. Be your own bank. Smart contracts. The World computer(s) galore.

Every Tom, Dick and Harry has a new idea…

Every Tom, Dick and Harry has a new idea for a new cryptocurrency. Just as every new company has new stock. Whole countries are “testing” the waters, allowing the new non-state monies freer reign.

And choices are great. Eventually, however, the most efficient tech will surpass the rest. Just as large home computers gave way to tablets then smart phones, the fastest and most secure systems — the most trusted — will win.

Reliability is also key. You can fix it if it breaks, but you might lose your customer if it breaks for long. For example, I really liked Peercoin when it first came out. An unknown  developer (Sunny King) who sort of kept his or her distance. An energy efficient system. It seemed more decentralized, even if it was not private — meaning others could see my balances and purchases. All the same, when Peercoin broke — forked — I was ticked off. Never again did I invest. Well, maybe once or twice, but I steered clear of the software. Just traded it.

Central Control…

Central control is another concern. Central authorities like our various governments often step in to assert that money must be controlled. To protect us. Bitcoin itself was the antitheses to centralized control. Today, to state that Bitcoin is decentralized would be stretching it.

Large computational warehouses churn out Bitcoin’s life blood. Many are in China. The sheer amount of electricity used to continue this process is staggering. And China is by no means a free country, but are any countries truly free these days?

Power consumption. If we use the United States as an example it is estimated that Bitcoin miners worldwide use nearly the same amount of electricity as nearly 300,000 homes. An argument for Bitcoin’s value to be sure. Even so, this very fact makes the giant Chinese Mining warehouses targets.

Is Bitcoin money? Does it have a real value? Why does it continue to thrive? These are all great questions and many have chimed in — attempted to answer them. In truth, there is no simple answer.

So what happens next?

Will whole regions compete with their favored cryptocurrencies? Will the public blockchains rule or will private ones begin to take market share? Will governments give certain companies special rights to sell their wares, so long as they are complaint with all of the reporting requirements? Does this latter situation not break all the rules of cryptocurrency?

And the “next” is already occurring. The herd is moving in the fields, but the fields are fenced-in. Slowly, the acreage will be sectioned off. A divide and conquer strategy.

Will it be bad? Not initially. Not until the authorities begin to demand changes to the code to allow several things. Easier snooping and taxation. Eventually, not unlike Peercoin, the social engineers will ask the ultimate sacrifice: faster inflation. That will spell the end of it.

There are no places to hide. Yes, companies can hock their wares — sell their crypto-goods — with governmental permission. They can report all account holders and take names. They can play the game.

Many of us will use these trusted public blockchains. Many of us will unknowingly use the current banking systems, unaware that they will soon be using Ripple or maybe Stellar Lumens or some other well researched, official and “approved” system.

There are a few cryptocurrencies remaining that, as of yet, have refused to comply with authorities — completely. They also have better reputations that most. Monero and Aeon. Their developers remain, mostly, anonymous. A good and bad thing. As a result, there are fewer markets. Fewer places to purchase these relatively private cryptocurrencies. But they are far more secure and private than most other competitors.

It reminds me of Prohibition in the United States beginning in the 1920’s and even the current laws against drugs today. What happens when people are told that they cannot buy and use something they want? In the end the price goes way up. A sort of “valuation wave.”

Is this what is in store for Monero and Aeon?


Image: Flickr

 

 

 

Advertisements

“Private” Digital Gold

Blog Updated: September 18, 2016


If you want to “pan” in private, it’s not Bitcoin.

What’s in your “pan?”

Digital Gold should be private.

So why would you “pan” for cryptocurrencies in full view of every person on earth? Wouldn’t it be nice if you could “pan” in private?

So which cryptocurrency is best?

But it depends upon your view of reality — your worldview.

If you feel that all financial transactions must be public, then Bitcoin, Litecoin – even Ethereum – are good choices. As is government cash.

Even physical gold is great — a sound money, unless it is confiscated by governments. Unless history repeats itself. What, you think you live in a perfect world?

How about I give you a gold coin and you give me, say $1200. Thing is, there’s risk involved. I need to carry my gold around with me. You need to carry your cash. Then we need to meet. All risky.

So we often just carry our cards. The little plastic things with microchips or magnetic strips. Still, there is risk. Theft, cloning, hacking into retail chain servers, etc.

And that harks back to your opinion of financial institutions, as well. In the modern era, even banks are extensions of government policy. Privatization has taken a back seat to the Welfare State.

Would not a cryptocurrency be better than one’s national currency? Sure it would, but which one?


Capital Flight v. Pump and Dump

As of June 9, 2016, Bitcoin is still in “surge mode” and the potential for profit is difficult to ignore. But it appears to be waning again. It’s off its highs…again.

Perhaps it is the capital flight from China. Maybe the problems in Argentina are giving Bitcoin the boost. Both assertions seem reasonable. But are they only temporary? It’s anyone’s guess — educated or not.

In the past, Bitcoin spiked in value. It was thought that the Cypriot mess caused the surge. It has also been suggested that false buying signals had been sent by large Bitcoin exchanges. Mt. Gox for example.

In any event, after Bitcoin spiked in 2014, it retreated. Still, it has not yet fallen to its previous lows.

When was the last time Bitcoin was valued under one dollar? Prior to 2014. Since that time, Bitcoins have consistently been worth hundreds of dollars each.

But it has only been a few years. Many concerns still exist.

The infamous “Pump and Dump” schemes bother many. Notorious when it comes to cryptocurrencies.

“Pumpers,” often called “whales,” purchase large amounts of a particular crypto and entice other buyers into the market. It’s an old game.

The “Pumpers” then sell hard, suddenly, if there is enough liquidity, and leave the “bag holders” slack jawed. Their bag of crypto-coins suddenly worth less than zero — since there are no buyers. Later the cryptocurrency goes belly-up and a few days later a new coin is hyped and “pumped.”


Regulation and the Taxman

Governmental regulation is another reality. Governments outlaw private currencies. Drive up the prices and thereby encourage the criminal elements – indeed, create criminals out of common citizens.

In a way, although not illegal in many countries, cryptocurrencies exist in a surreal world, where they are respected by the Fintech community, but often disdained as quasi-gamer monies, by parents yelling at their kids, who are up all hours each summer night trying to mine a few dollars worth of electronic wonder.

Taxation is yet another issue. How much will one owe (in the U.S. especially) when one sells, trades or uses Bitcoins? Can the revenue service track Bitcoins?

One new alpha stage cryptocurrency is even attempting to develop and “sell” a completely transparent altcoin. It’s called Taler for “Taxable Anonymous Libre Electronic Reserve.” It’s Richard Stallman’s project.

Don’t discount Taler just yet. It appears to solve the taxation dilemma, but it’s still in development. It would be a perfect cryptocurrency for a country without privacy laws. If governments can peer into your every purchase, account, expenditure ad infinitum,  just where is Stallman going with this? Oh, “Big Brother.”


Bitcoin Tracking and Wealth Redistribution

Please tell me you knew that Bitcoins can be tracked as well, but not like Stallman’s brain child.

Aside from the ability to track many cryptocurrencies, what other human risks lurk in the digital universe? How about “fear?”

The fear of a crash. The fact that Bitcoin values can go to zero at any given time. This is perhaps the “Nightmare on Crypto Street” — unless you live in Argentina. There, the monetary nightmare has become a socioeconomic reality. Any crypto is a savior in a Welfare ‘Statist’ Regime.

As soon as the Argentinians and Chinese figure out that they are vulnerable to ‘tracking’ you may see a big switch in the CryptoNote systems. Monero for one.

But fear gives us that queasy feeling when we put cash in and receive crypto in return.

For those in Argentina, Bitcoin is a Godsend, however. The currency there is nearly worthless. One cannot do worse.

In China, where massive amounts of “paper wealth” has been accumulated and the Chinese government is devaluing the currency, thereby appropriating huge sums of money — that money is finding an escape valve: Bitcoin.

Certainly, Bitcoin is acting as a pressure relief valve for those who are being economically suppressed.

And in the U.S….

Recently, the government, seeing trillions of dollars just sitting in retirement accounts realized they could easy and legally ‘use’ that money.

Welcome, citizens. Your government, which is not bankrupt, has taken it upon themselves to ensure that all money market funds everywhere are safe and secure — in government bonds.

How did Uncle Sam do this? Simple: over-regulation. It is now fiscally sensible to use government treasury instruments. So most investment houses are towing the line — the ‘party line.’

Uncle Sam will soon have trillions of extra dollars and not need a “QE” for several more months; unless investors pull their money out or move away from money market instruments.

In other words, the money grab is going international. This fact will only serve to push crypto’s into the stratosphere.

 

Bigger questions lurk in the stratosphere as well.


Bitcoin’s Internal Organs

Can Bitcoin take the lack of pressure? Are other coins better suited to absorb the transaction volume, should savers come in droves?

In fact, it is well-known that Bitcoin may not be able to handle the ever-increasing volume of transactions. This is a hot debate, however.

The current developers of Bitcoin squabble over improvements and changes. Bitcoin’s internal organs, so to speak. The original developers have moved on, citing numerous concerns. They organized it and let it go.

Perhaps it’s high time to diversify into crypto. And keep some of your hard-won crypto’s, private.

When the first pizza was purchased with Bitcoin, many thought it was a fluke. Now you can buy almost anything with them – with no intervening bank.

Naturally, many of us want to get in on the ground floor of something great. Some even want to make sure that nobody knows where their crypto’s are, how many they have or where they send them.

Yes, one can send their Bitcoins through “mixers” where they are tumbled and jumbled – for a small fee. This is a bit of a pain and the fact that you do this can be tracked.

It’s time for something better. Something private, but from the “get go.” With no mixing service required. No possiblity that someone will abscond with your crypto at the “mixing service.”


It’s time for a Real Update

What is needed is an up to date, “with the times,” cryptocurrency. Luckily, it already exists.

Monero and AEON, are waiting. In my mind, they are the gold, silver and bronze of the “Crypto-Olympics.” This  might change if the speedy AEON operates as planned.

But these are only a few of the successful and promising “CryptoNote” based cryptocurrencies, with built-in privacy. Mixing services not required.

Only you know how much ‘money’ you have. Only you know where your ‘money’ is sent. Only you know where you keep your stash.

Compared to all the rest, the “CyptoNote” based ‘coins’ are much more stable than their “less private” counterparts. They are the next step in the revolution of digital currency.

It is not about the “Darknet.” It’s about you and your cash.

Remember, they are watching your Bitcoins, Litecoins, Ethers, Ripples, Dogecoins, Peercoins…and the list goes on.

It’s time to come to the “Private Side.”

Why give them all of your financial information voluntarily? Why provide every criminal on earth your account number and coin count?

Wouldn’t it be nice to be the only one with the knowledge? Where not even your bank can know your ‘financial picture.’

The time is now. Act while you still can.


Also see:


(Note: the contents of this blog are the opinions of the writer. Do not base any investment decisions upon said information. Do your own research.)


Sources/References:

Panning for Gold Picture compliments of: Tony Oliver from Denver, CO, USA (Prospector) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)%5D, via Wikimedia Commons