U.S. House minority leader Kevin McCarthy has argued for the use of blockchain networks in protecting users’ data from exploitation.
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Ron Paul: The U.S. Dollar Is In a Bubble, Bitcoin An Alternative
Former US presidential candidate and congressman Ron Paul is a regular critic of the United States Federal Reserve and of the country’s economic policy. In the past, the libertarian politician has spoken out in support of cryptocurrencies, suggesting that making the digital assets exempt from taxation could help avoid a “Fed-created recession.”
In a new interview, Paul further elaborates on how the Federal Reserve has created a bubble with the US dollar that is on the brink of a major crash, and how Bitcoin might be a suitable alternative that can alleviate the risks that government-back currencies pose to the greater global economy.
The US Dollar Will Self Destruct
Ron Paul and his Libertarian party’s belief system aligns well with the ideals that helped fuel the creation of cryptocurrencies like Bitcoin. Libertarianism emphasizes freedom of choice, autonomy, and a dose of healthy skepticism when it comes to government authority and power – or its abuse thereof.
That skepticism extends to the Federal Reserve, the central bank of the United States that Paul says is digging the country into a disaster at an ever-increasing rate.
Related Reading | Ron Paul Advocates for Cryptocurrencies to be Tax-Free While Criticizing US Fed
Paul claims in a new interview with Yahoo Finance that the US dollar is in a “bubble” and is expecting an impending financial crisis that will dwarf the 2008 great recession by comparison. The outspoken politician says that “trust” in the US dollar and the United States government has caused the bubble to “get bigger.”
A wealthy person gifts you ,000. You get to choose in which form you’ll accept the gift. But there’s a catch: You must keep the gift in the form that you choose for 10 years without touching it. In which form would you accept the gift?
— Ron Paul (@RonPaul) November 15, 2018
He compares the fiat currency to a ticking time bomb that is ready to “self destruct.”
Bitcoin is the Alternative
As for what could replace the US dollar, Paul speculates that Bitcoin could be “an alternative” to government-backed fiat currencies like the dollar. The dollar by design is inflationary, losing its value each time the Federal Reserve prints more money.
Whereas Bitcoin, which was designed in the wake of the 2008 economic crisis, is deflationary and due to each “halving” the supply of Bitcoin is diminished further. The sudden imbalance of supply and demand further drives up the price of the first ever digital asset.
Related Reading | Ron Paul Poll: 50% in Favor of Bitcoin as Long-Term Investment
Paul has even offered his supporters Bitcoin as an alternative to donating fiat in support of Paul and his son Rand’s political efforts. Rand Paul became the first ever presidential candidate to accept Bitcoin donations through his political foundation back in 2015.
Those Bitcoins that the Paul’s have had donated to them aren’t held, however. Paul says he owns no Bitcoin currently, and that all donations get immediately converted into fiat currencies in order to pay “bills.” But once bills can be paid in Bitcoin, maybe then the risk and global impact of impending collapse in the face the US dollar will finally be reduced.
Featured image from Shutterstock
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Is Ripple (XRP) the Liquid alternative of Tether or USDC?
- Ripple (XRP) prices slide 1.7 percent
- The rollout of xCurrent 4.0 is an opportunity for banks to upgrade and even adopt xRapid
That the World Bank and the IMF have Ripple Inc in their reports is bullish. At the core, Ripple Inc is introducing speed, efficiency and cost savings in the fund remittance sector searching for alternatives. Even so, the unregulated nature of XRP is slowing down adoption as prices range within a 4 cents zone.
Ripple (XRP) Price Analysis
Fundamentals
For the extended consolidation, Ripple (XRP) is said to be a “sleeping” giant. However, it’s not a deep snore but a snooze, a power nap. We can glean all this from significant developments in the last few weeks.
First, there is xCurrent 4.0 that is available for the more than 200 banks and financial institutions. Although David Schwartz brought to light technical reasons that could slow down adoption—and upgrade to xCurrent 4.0 automatically activating xRapid, there are other positive developments. Ripple Inc, despite “stable” prices, is partnering with banks and working closely with regulators.
It is a necessary groundwork for laying infrastructure that the cryptocurrency industry would find useful in days ahead. Towards their grand goal, institutional grade investors are investing in XRP as the Q1 2019 XRP report reveals. With mention from the IMF, the EU via INATBA, the World Bank and the startup’s links with the White House, it is easy to see Ripple Inc’s fundamental trajectory. Even so, traders must be patient.
Currently, XRP resembles a stable coin, but if FIs migrate to xCurrent 4.0, then it would be only about time before there is an explosion above 40 cents.
Candlestick Arrangements
Meanwhile, Ripple (XRP) is down 1.7 percent in the last week, trading along 30 cents and pretty much stable like it has in the previous 24 hours. Therefore, in light with today’s development, our XRP/USD trade plan is valid. However, the longer this consolidation is, the stronger the breakout would be.
Even so, despite the likelihood that XRP could sink, printing towards the dredges, the fact that there is no movement despite Bitcoin (BTC) gains supportive of bulls.
That lag is bullish, and unless otherwise there is a drop below 30 cents, then any break above 34 cents could spur demand with targets at 40 cents and 60 cents.
Technical Indicators
With prices consolidating within a 10 cents trade range, participants are yearning for volatility that would lift prices above 40 cents in a breakout trade. Accompanying that break—or drop, should be high volumes exceeding averages of 11 million or preferable 36 million, the mean value of Apr-24-25 draw-down.
Chart courtesy of Trading View
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SeedInvest Gains FINRA Approval as Alternative Trading System a Month After Circle Buyout
n Regulator approval for SeedInvest to offer secondary shares trading comes a month after its Circle acquisitionn
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Will A Future Decoupling See Alternative Crypto Dominate Bitcoin?
Following on from the recent price pump, optimism has returned to the markets. And once again, price is at the forefront of everyone’s mind. In consideration of this, Civic CEO, Vinny Lingham raised a pertinent point on the validity of altcoin prices. In his tweet, he states that price increases should come from improvements at the fundamental level. But instead, the close relationship between Bitcoin and altcoin prices distorts this underlying truth.
This means that as the Bitcoin price rises, so does the price of other crypto’s, irrespective of value. This is a key point – Bitcoin could double overnight, but does this mean other assets should too, even if nothing has changed on their end in term of development, network etc?
— Vinny Lingham (@VinnyLingham) April 10, 2019
The Correlation Between Bitcoin and Altcoins
The central premise for Lingham’s argument relates to Bitcoin being the main cryptocurrency. And as Bitcoin is the most paired coin on every exchange, it’s difficult to escape its influence in the broader crypto market. Coin Metrics calculated a Spearman’s rank correlation coefficient on Bitcoin versus thirteen major altcoins. 1 signifies a close correlation to Bitcoin, 0 means no correlation, and -1 indicates an inverse correlation. The data shows a strong overall correlation with the sample, where the majority of activity is above 0.
The Decoupling
Despite Bitcoin’s brand cachet and market cap dominance, its influence on altcoin prices seems wrong. Especially so, considering that Bitcoin is first generation, and therefore inferior to many altcoins from a technological perspective. And indeed, over time, there have been occasional signs of decoupling, but only ever in the short-term. For example, in the Coin Metrics chart above, Ethereum showed a significant inverse relationship around May 2016. But this soon returned to a more positively correlated pattern.
Ben Jones, writing for Medium, talks about the importance of gaining independence from Bitcoin:
“… the biggest reason for this, I feel, is that it is a sign of investor recognition — recognition that a particular cryptocurrency has its own real-world value that is entirely unrelated to Bitcoin. In other words, these investors are trading that coin or token based on its utility and not on its potential worth whenever it just so happens to be dragged up or down by Bitcoin’s roller coaster.”
He goes on to say:
“Until that happens, current prices are still highly hyped and speculative and have little else to latch onto other than the price of Bitcoin.”
Is Change Coming?
Some analysts have predicted a rise in altcoin prominence. According to Nik Patel, a seasoned analyst of crypto markets, he doesn’t see Bitcoin pumping to new highs in the immediate future. Or even breaking the k resistance level. Instead, he predicts that Bitcoin will continue to trade at an even level. While altcoins will rally and cut Bitcoin’s dominance.
For this to happen, not only must altcoins continue to meet roadmap goals, but there also needs to be changes in the way exchanges set up base pairs. And certainly, with the rise of stablecoins, and the increasing recognition of some altcoins, including XRP, this is a reality in the making.
We will be adding a couple trading pairs with XRP as the quote currency shortly.
And rename ETH markets to ALTS market. Running out of space on the UI.
Merry Xmas!
— CZ Binance (@cz_binance) December 24, 2018
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Industry Execs: Bitcoin Isn’t a Visa Alternative, BTC Will Surpass It
Since Bitcoin (BTC) garnered some semblance of traction, it has been touted as a viable alternative to traditional digital payment rails, like Visa, Mastercard, or PayPal. As ShapeShift Erik Voorhees said in a recent interview, BTC, unlike centralized digital monies, is free to use (accessible), borderless, and uncensorable — arguably making it a perfect substitute.
Related Reading: Crypto is Not Only a Hedge Against Inflation, But a Cashless Society Too
But one leading thinker and programmer in the industry has begged to differ. He claims that the crypto does (and shouldn’t) compete with global payment infrastructures. Is this really a logical argument though?
An Alternative To Western Union, Not Visa?
At the recent 2019 Bitcoin Expo at MIT, Peter Todd, a cryptographer who participated in friendly discourse with Satoshi contender Hal Finney as a teenager, revealed some surprising thoughts about the leading crypto asset. Per Forbes, the former contributor to the Bitcoin Core client argued that BTC being using in day-to-day payments in brick and mortar stores isn’t really its forte.
Remember MintChip? "Had this plan been approved, the world would have effectively had anonymous payments over the Internet that were difficult to shut down." https://t.co/VB51bHUtwD by @kyletorpey h/t @peterktodd via @ForbesCrypto
— Michael del Castillo (@DelRayMan) March 25, 2019
Todd explains that Visa and Mastercard, which have an effective iron grip over global payments, have “already won in many respects.” Surprisingly, the long-time Bitcoin pundit adds that the cryptocurrency doesn’t “have a hope” in Visa’s realm, presumably due to the minimal levels of adoption, the relatively slow growth of the Lightning Network, and other shortcomings.
Thus, Todd tells the crowd that Bitcoin should be seen as an alternative to rails where regulation decreases speed and increases costs, such as the remittance markets that many in lesser-developed nations rely on.
In his eyes, Western Union’s business model is entirely flawed, as the company purportedly relies solely on skirting regulations, paying fines, but continuing to operate globally, all while charging exorbitant fees and failing to make transactions quick. Attempting to convince his audience of this conviction, Todd stated:
“Of course, we don’t recognize [the company’s regulatory qualms] because we just go see the friendly Western Union agent, but that’s what’s actually happening in the background there, and it’s a constant for them for: How do we keep running in these crazy countries?”
And to many, Bitcoin’s viability in cross border payments makes total sense. (Maybe that’s why the institution purportedly halted crypto-related payments once upon a time.)
Sending 0 domestically in the U.S. through the service costs , and takes four business days with a bank account payment. With a credit or debit card, a 0 domestic Western Union transaction takes minutes, much like cryptocurrencies, but the fee tallies up to a jaw-dropping .49. In both cases, digital assets, like BTC, are better suited for the job, as transactions are finalized within minutes, fees are under .00 (whatever the transaction size), and governments cannot actively censor as they please.
What Todd is trying to claim is that these characteristics don’t exactly make Bitcoin ready to take on Visa or Mastercard.
Bitcoin Still To Overtake Visa
However, some are sure that with advancements like the Lightning Network, BTC could become a refreshed but decentralized version of Visa. As reported by NewsBTC previously, Morgan Creek’s Anthony “Pomp” Pompliano explained that the valuation of all BTC in circulation could surpass the market capitalization of both Visa and Mastercard within 36 months’ time.
Citing data from blockchain research unit Diar, Pomp explained that Bitcoin’s miners were “paid a total of .8 billion in revenue in 2018.” While this number seems irrelevant in and of itself, the Morgan Creek Digital partner notes that considering revenue multiples (revenue to market cap ratio), BTC is undervalued when compared to Visa and Mastercard, which both operate a slightly higher multiple than the flagship cryptocurrency.
With that, he writes that “given the fast growth rate and historical premiums” of promising upstarts and networks and the antiquated nature of Visa, Bitcoin should begin to creep up on the value of the two financial giants within the next three years.
While Pomp never explicitly stated that Bitcoin is cut out for use as a daily transactional tool, it was heavily implied that he sees the crypto asset as an alternative, or better yet, something new and entirely better.
And this entirely better thing might just be a revamped backbone to the macroeconomy. Dan Held, a co-founder at Interchange, once wrote in a Twitter thread that those pushing the sentiment that “Bitcoin was first made for payments” are bonkers, so to speak. Held subsequently explained that Bitcoin was conceived to become an alternative to banks, hence the iconic headline that Satoshi embedded in the Genesis Block’s coinbase, not a new version of Visa. To back his claim, he drew attention to the network’s cardinal rules — 21 million BTC supply cap, ten-minute blocks, and block size caps — claiming that Satoshi could have altered these values to push the digital money narrative.
Featured Image from Shutterstock
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Survey Half of Alternative Investors Think Crypto Is Bubble
n A new survey prepared by the CAIS has shown that almost half of alternative investors believe that crypto is a bubblen
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Fed Chair Concerned About $22 Trillion US Debt, is Bitcoin a Viable Alternative?
The US national debt now stands at .974 trillion, a 10% increase since President Donald Trump took over the oval office. And according to Jake Chervinsky, bitcoin is just the needle people need to pop the debt bubble.
Fed Chair Jerome Powell, talking about the trillion US debt:
"I'm very worried about it, but from the Fed's standpoint . . . the long-run fiscal non-sustainability of the US federal government isn't really something that plays into . . . our policy decisions."
Buy bitcoin.
— Jake Chervinsky (@jchervinsky) February 1, 2019
The securities lawyer of Kobre & Kim LLP said Friday that investors should buy Bitcoin, a stateless digital asset, to protect their portfolios against the budget deficit. He advised after Federal Reserve chief Jerome Powell said at The Economic Club of Washington, D.C. that he was worried about the ballooning government debt.
“From the Fed’s standpoint, we’re looking at a business cycle length: that’s our frame of reference,” Powell said. “The long-run fiscal, non-sustainability of the U.S. federal government isn’t [really] something that plays into the medium term that is relevant for our policy decisions.”
Understanding the Debt Bubble
In retrospective, the national debt is a way of measuring what the US government owes to its creditors. Since the government always spends more than what it takes, the said debt continues to rise. For instance, under the Obama administration, the national debt had increased from to trillion – a spotless 100 percent.
In the past 60 years, the US government has struggled to balance the budget – by spending and earning at an equal level. Every passing administration left a higher debt burden for the next, starting with President Ronald Reagan via President Clinton to President Obama. The US never came out of the so-called debt bubble.
But it doesn’t necessarily mean that they cannot. After all, the US is sitting atop a dollar printing press.
Ideally, Uncle Sam can print its own money, unlike other nations. The size of their debts – arguably – does not matter because the government can pay its debt any day it wants. They would not have to impact the standard of living. According to the Bretton-Woods agreement, the World Bank and the IMF made US Dollar as the world’s only global reserve currency. That led governments across the globe to stash the greenback in their central banks. It created demand, and the US Federal Reserve limited supply.
As of now, there are approximately 1.2 trillion US Dollars in circulation. That is not enough to settle day-to-day global trades: to purchase oil, gas, coffee, corns, and even iPhones. Countries, on the other hand, are sitting atop larger dollar reserves. China, for instance, has trillion; Japan has over trillion – and so on.
Why Bitcoin?
The only thing that changed between then and now is the internet. The millennials now have information about the debt bubble. They understand how every dollar in their pocket is indebted. They also realize that their own national currency is indebted to an-already indebted US Dollar.
Bitcoin enthusiasts project the digital currency as a solution to beat down the dollar hegemony. It expects millennials to exchange their national fiats for a technology that is independent of the US debts, government policies, Federal rate hikes, and whatnot.
Vinny Lingham, the founder of Civic, said that bitcoin’s intrinsic attractiveness against the debt bubble would attract more wealth.
“More wealth will be created in crypto over the next 10 years, than over the prior 10 years,” said Lingham. But remember, like any success story, it’s not going to be a straight line up. Keep believing and just be patient.”
Erik Voorhees, the founder of Shapeshift, hoped that the world would hedge their savings into bitcoin once the next financial crisis hits.
When the next global financial crisis occurs, and the world realizes organizations with trillion in debt can't possibly ever pay it back, and thus must print it instead, and thus fiat is doomed… watch what happens to crypto.
— Erik Voorhees (@ErikVoorhees) November 8, 2018
“They,” Voorhees said while referring to cryptocurrencies like Bitcoin, “may drop during the early phase liquidity crunch, but ultimately the world will move away from fiat money (printed without end, trending toward zero) toward crypto money (known, transparent, fixed supply, not subject to politicians’ opportunism).”
At the same time, economists have a different opinion. Nouriel Roubini, a New York-based financial expert, said that bitcoin was a mother of all scams. He added that cryptocurrencies were a wet dream of individuals with zero financial literacy. Warren Buffet, a Wall Street investment giant, refused to consider Bitcoin as an investment.
“If you buy something like bitcoin or some cryptocurrency, you don’t have anything that is producing anything,” Buffett said in an interview with Yahoo Finance. “You’re just hoping the next guy pays more. And you only feel you’ll find the next guy to pay more if he thinks he’s going to find someone that’s going to pay more.”
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Spurred by Censorship, Jordan Peterson Makes Patreon Alternative – Why Not Bitcoin?
The controversial Canadian psychologist and right-wing thought leader Jordan Peterson has announced he will be launching an alternative to the popular content creation funding platform, Patreon. Peterson will be working with Dave Rubin and atheist intellectual Sam Harris on the project.
The decision to abandon Patreon to form a new platform has been largely driven by what the three claim to be the inconsistent censorship of those using the service. However, they are overlooking a perfectly adequate payment network that already exists and is powerless to ban users – Bitcoin.
Bitcoin is Incapable of Pushing an Ideology
According to a report in The Federalist, Patreon has similar terms of service to Twitter. The publication alleges that these terms of service are being selectively enforced and serve to silence conservative voices.
The three thought leaders proposing the new platform are all amongst Patreon’s highest earners. Their decision to go it alone will therefore have a large impact on their ability to monetise their content in the immediate future, at least.
The incident that ultimately drove the three rightist intellectuals to create the Patreon alternative was the banning of Carl Benjamin “without any recourse or semblance of due process.” Rubin commented:
“The banning of Carl [Sargon of Aarkad] for doing something that was not on the Patreon platform that wasn’t even done on his channel, because of a word he said … is a massive move of that line of what’s acceptable … the fact that this guy got booted with no chance of recourse, with no warning, just like that, is just an extension of everything else we have been talking about.”
Peterson offered further explanation of the new project:
“I’ve been working on a system for months to allow authors and other people who engage publicly on intellectual issues to interact more effectively with their readers, viewers, and listeners.”
That's why it's particularly exciting to see @jordanbpeterson and @RubinReport setting up a company to compete with Patreon. Here's their announcement: https://t.co/MJEb2jxSih
— Yoram Hazony (@yhazony) December 17, 2018
However, as one Twitter user hinted, there is already a perfectly usable, entirely censorship resistant payment network sitting right under the three thought leaders’ noses – Bitcoin:
Jordan Peterson is seemingly standing on the edge of the #bitcoin rabbit hole..
https://t.co/PuV3ZmYCqs
Donations accepted here
https://t.co/Ci5usvYQpu
(Pssst..Jordan..You're aware that you can post your bitcoin address in your twitter-bio, right?
)@jordanbpeterson pic.twitter.com/kTiItGbXbI
— Brand7
(@The1Brand7) December 25, 2018
Peterson already uses Bitcoin to receive donations at his official website. However, he seems much more preoccupied with creating his own Patreon alternative. This is a curious decision considering that whatever he creates will likely promote the same kind of censorship directed at the opposing side of the political spectrum that he has criticised Patreon for. In the interest of true intellectual freedom, surely content creators such as Peterson should be pushing Bitcoin harder. Alternatively, they could help fund or develop better on and off ramps to make cryptocurrency’s mass adoption more likely.
Without a single central authority controlling the Bitcoin network, censorship is quite literally impossible no matter what the political views of the user. Pushing on with creating a new platform instead of using something that serves the purpose of neutral payment network far better than any centralised system therefore seems like an effort to create a network under the control of favourable ideologues with the ability to play the censorship card against alternative viewpoints. Oh, and there is also the matter of network fees, which will presumably go directly to the platform’s creators.
Bitcoin’s History Circumventing Bans on Centralised Payment Networks
Bitcoin is no stranger to providing controversial figures an alternative funding method. Perhaps the most famous example of this was one of the incidents that brought the digital currency closer to the mainstream in its very early days. Back in 2011, infamous whistle blower Julian Assange appealed for Bitcoin donations after he was banned from using traditional payment networks to receive donations for his Wikileaks website.
Additionally, the UK’s far-right poster boy, Tommy Robinson, utilised the permissionless qualities of Bitcoin to help fund his legal defence fund earlier this year. The #FreeTommy campaign received over £20,000 in BTC.
Related Reading: Real Reason Why China Doesn’t Want Blockchain: Strict Censorship
Featured Image from Shutterstock.
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Plasma Halted as Ethereum Seeks Alternative Scaling in zk-SNARKs
Ethereum’s Achilles heel has always been scaling. Since its inception, developers have been researching different ways to scale the blockchain in order to increase network capacity and speed.
Back in August 2017 Ethereum co-founder, Vitalik Buterin, released an initial draft of the Plasma project which provided an off-chain layer 2 scaling solution. By spawning child-chains the work is carried out off the root chain which will alleviate the pressures on it under heavy load (think back to CryptoKitties).
Plasma Problems Preventing Progress
Developers have already built five different versions of the protocol but have run into various problems and the system has not been functioning as expected. Each new iteration of Plasma has created a new set of problems and cross version compatibility issues. Implementation of Plasma, along with other scaling solutions such as sharding has been slow, complicated and somewhat unpredictable. Plasma needs what is known as an ‘exit’ for funds to be recorded back on the root blockchain and this requires some highly complex mathematics to function.
Researchers and developers are now turning towards an alternative scaling solution, one pioneered by privacy-centric crypto currency Zcash (ZEC). The use of zk-SNARKs (zero knowledge Succinct Non-Interactive Argument of Knowledge) is a method of cryptographically proving knowledge of something without revealing what that something is. An example would be proving that you have enough Ethereum to make a transaction without revealing exactly how much ETH you actually have.
At the recent Devcon4 Buterin proposed using zk-SNARKs which would enable the proof of knowledge that entire batches of transactions are correct. This would enable the network to process more transactions in batches than individually thus increasing its speed. Buterin said that the network could achieve 500 transactions per second in the near future. Ethereum currently supports about 15 transactions per second.
This would work in the short term while developers focus on the longer term solution known as Serenity, Shasper, or Ethereum 2.0, though this is still likely to be a couple of years away. Prediction platform Gnosis is already exploring the use of zk-SNARKs to power a decentralized exchange using ‘snapps’ or ‘snark dapps’. Gnosis CTO, Stefan George, said that this approach has the potential to be more decentralized than Plasma, is far less complicated, and is ready for deployment in the near future.
There is some overlap in the two technologies as zk-SNARKs could be used to make Plasma more private; however, this is also a few years down the line. Currently it seems that Ethereum’s short term scaling solution will come in the form of zk-SNARKs as Plasma gets sidelined for the time being.
Image from Shutterstock
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