Monthly Archives: July 2017

Navigating the treacherous cryptocurrency market is not for the faint of heart. While the gains over the past year have certainly been spectacular, the recent whipsaw reversal is a reminder of just how wrenching it can be.

As you can see, bitcoins BTCUSD, -0.02% path to recent nosebleed levels has seen its share of sizable drawdowns, including the current one.

So whats a trader to do? And in this case, whats a 13-year-old whos already turned $2,200 in profits dabbling in the crypto market to do?

Thats the question Sam of the popular Financial Samurai blog tackled after one middle-schooler asked for some help plotting his financial future.

Heres the letter he received:

Im 13, live in an upper middle-class family, have good grades in school, and want to start planning out my future now. I want to learn the major mistakes other people have made before I can even grasp the chance to do the same.

I run an eBay .account where I make ~$400 gross a month buying and reselling high tier shoes and clothing. The money usually ends up in my desk drawer, but I have been dabbling in the investment of cryptocurrency and I have turned around a $2,200 profit so far.

I know that money comes with work and gambling for it is the worst thing you could do. I want to be able to live a happy and wealthy life and I know I have all the utilities but I dont know what to do. I am willing to work and take risks to sustain financial growth but I dont know where to start.

If anyone is willing to give me three pieces of advice for my future I will take them with full consideration. Thanks! Daniel

Wise beyond his years, clearly. But its just as clear that Daniel has a lot to learn, and quite likely, a lot of lumps to take in the coming years.

First off, Sam, who acknowledges that he was much more interested in girls, skateboards and beer at that age, told Daniel to go ahead and be a kid while he can. Dont get too bogged down in real life just yet. Enjoy middle school while it lasts, then hit the books hard when high school rolls around.

People today who complain about life not being fair more often than not didnt take school extremely seriously. Education is what will set you free, he said. Get the best grades and test scores possible to give yourself as many options as possible.

His second piece of advice is to learn from the inevitable mistakes. At this age, Daniel can recover from any sort of hits he takes.

Investing in cryptocurrencies sounds like a great way to make and lose everything, Sam said. If you end up losing your $2,200 profit by not at least taking some profits, youll always be reminded about this loss before making more significant investments.

He explained that people who only started investing after 2009 are in for a rude awakening.

Never ever confuse brains with a bull market, he said. Study the previous bubble implosions to better prepare yourself for the next one.

Lastly, Sam tells Daniel to always focus on building his personal brand, and take care in crafting an online image that wont backfire. The internet never forgets.

Dont post compromising pictures of yourself that might come back to haunt you. Dont write hateful commentary, only love or nothing at all, he said. Focus on helping someone first before asking for help. Be resilient. And never fail due to a lack of effort. If you can consistently tilt towards the positive, you will surround yourself with other positive people in return.

And, of course, listen to mom and dad.

Any more advice for Daniel? Share in the comments section.

Read the rest here:
3 life pro tips for the teen cryptocurrency trader who's already made thousands - MarketWatch

On July 11, 2017, the United States Patent and Trademark Office granted Goldman Sachs a patent for a Cryptographic currency for securities settlement. The patent, which was originally filed in October 2014, includes a cryptographic protocol and a supporting virtual wallet that, in various embodiments, is a security and cash account for storing and managing the cryptographic currency.According to the document, the virtual multi-asset wallet possesses the ability to generate, manipulate, and store SETLcoins, a new cryptocurrency for exchanging assets, like securities, cash, and cash equivalents, through a peer-to-peer network.

For example, a virtual wallet can exchange (e.g., via a transaction method described below, such as a two-phase transaction) one or more SETLcoins for, e.g., U.S. dollars and/or other currency at a brokerage account, deposit account, bank account or other financial storage entity. Alternative or additionally, U.S. dollars and/or other currency at a brokerage account, deposit account, bank account or other financial storage entity can be exchanged for one or more SETLcoins in virtual wallet on the peer-to-peer network.

SETLcoins can house one or more securities. Using the wallet, traders can immediately exchange stocks in companies like IBM and Google for cryptocurrenciesby sending transaction messages. Each transaction message includes a transaction and digital signature. And once a message is broadcasted to the network, settlement is immediately processed by a two-phase commitment protocol and/or trusted node that both traders mutually agree to have act as coordinator (including each other).

SETLcoins are exchangeable for, e.g., other SETLcoins and/or other cryptographic currencies (e.g., peercoins). For example, a single IBM-S SETLcoin may be exchangeable for one or more "GOOG" SETLcoins (i.e., Google shares), for 13,000 USD SETLcoins, 100 litecoins, and/or for 5 bitcoins.

Since the introduction of bitcoin in 2008, the popularity of cryptocurrencies and blockchain technology has increased tremendously in the financial service industry. Due to a sizeable market cap and wide array of sought-after options like Ethereum, Litecoin, NEM, and Ripple, the cryptocurrency market is becoming more attractive as an investment opportunity for financial magnates. This has led banking giants like Goldman Sachs to begin analyzing the market for clients and concentrating investments in technologies, like SETLcoins, that bridge cryptocurrency and blockchain technology with the financial sector.

Dan is a US Army veteran and Los Angeles-based writer passionate about science and technology, current events, human rights, economic impacts, and strategic calculus. Dan is a full time staff writer for ETHNews and holds value in Ether.

Read more:
Goldman Sachs Awarded Cryptocurrency Patent - ETHNews

Tezos, a new cryptocurrency network that could compete with Ethereum, raised a record-breaking $232 million in a nearly two-week-long token sale that closed on Thursday.

Although the first version of its network has yet to launch, Tezos has piqued the interest of major investors and cryptocurrency experts. It promises to support smart contracts and offer innovations in governance for decentralized systems that could prevent the sort of infighting that has consumed the bitcoin community for more than a year.

Among those who see value in it are venture capitalist Tim Draper and Olaf Carlson-Wee, formerly the first employee at Coinbase and now the founder and CEO of Polychain Capital, a San Francisco hedge fund that focuses exclusively on blockchain assets. Zooko Wilcox, the founder and CEO of privacy-focused cryptocurrency Zcash, serves as a Tezos adviser.

Tezos's founders, the husband-and-wife team Arthur and Kathleen Breitman, have been developing the technology since mid-2014, when they published the white paper describing what they hoped to accomplish. Between them, they have backgrounds at Goldman Sachs, Morgan Stanley and R3, a blockchain consortium of which dozens of banks are members.

When Tezos's token salea special kind of crowdfunding campaign also known as an "initial coin offering," or ICOfinally launched on July 1, it inspired a mad dash among investors. The project ultimately took in 65,627 bitcoins and 361,122 ether, according to its website.

The value of both cryptocurrencies has fallen sharply in recent days, but, even at relatively low current prices, Tezos raked in enough digital money to smash the previous ICO record of about $150 million set by another blockchain project, Bancor, in June.

Thanks in large part to Bancor and Tezos, the amount of money raised by blockchain startups through ICOs has far surpassed the amount raised through traditional venture capital in 2017. Because of the extreme volatility of the cryptocurrencies used to fund ICOs, it is tough to pin down a round number for the total amount raised so far this year, but it appears to be more than $700 million at then-current prices.

Most of the projects that have raised funds through token sales are built on top of an existing blockchain, usually Ethereum's. But Tezos will be an entirely new protocol with its own rules.

Tezos is also one of the few token projects that has gained support from traditional investors. Tim Draper participated in the ICO and also invested an undisclosed sum in Dynamic Ledger Solutions, the Breitmans' startup that is behind Tezos.

Participants in the crowdsale will be given Tezos network tokens, known as "tezzies," in exchange for their investment, but not until the network launches. That is expected to happen in four months or so. Investors are betting that as the network grows and proves its worth, the exchange value of their tokens will riseperhaps exponentially.

Ethereum's own crowdsale raised about $18 million in 2014. The total market capitalization of ether is now more than $19 billion, according to CoinMarketCap, which tracks the fluctuating value of blockchain assets.

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Tezos raises $232 million for new cryptocurrency project - American Banker

It comes with the territory that digital currency will be susceptible to digital threats. Hacking and theft have almost grown up side by side with things like Bitcoin, and, as the popularity and value of the digital currency rises, its attraction to thieves also grows.

The most recent major hack has seen one of the top five biggest Bitcoin and Ethereum exchanges, Bithumb in South Korea, fall prey to hackers. The hack was confirmed July 5 when information, as well as hundreds of millions of South Korean won, were been made off with in an attack with a difference.

Most exchanges know they are susceptible to network intrusion via their internal systems, but the entry point in this instance was through the personal computer of one of the exchange's employees. Thus it was not the standard network compromise, rather a more sophisticated phishing attack that led to the information heist.

It was personal information, such as names, email address and phone numbers of clients that were predominantly taken luckily no passwords but this was enough for the hackers to target customers and drain their accounts of their cryptocurrency.

Since the highly publicized Mt. Gox hack in 2014, in which 800,000 bitcoins were stolen, exchanges have boosted their security astronomically. Mt. Gox almost spelled the end of Bitcoin as people lost a lot of faith as well as a lot of money in the security systems of cryptocurrencies.

While security has been boosted in recent times, and thievery and hacking is far less common, it is still a threat that is ongoing and sometimes hidden.

In fact, Bithumb customers had forwarded complaints on a Korean social media site about threats of attacks, yet not much extra was done on the part of the exchange to try and quell these worries or protect clients.

The exact figure stolen is still unknown as Bithumb is trying to play it off as less of a hack and more of a phishing attack for information. However, despite what they are trying to convey, Bithumb has to admit that the 30,000 customers whose information was compromised were victims of a dangerous cryptocurrency attack.

The Korean exchange has come forward and said it will be compensating those whose data was compromised. Even those customers who would have lost nothing other than data will be getting paid 100,000 Korean Won, which is equivalent to around $86.50 USD for the inconvenience. The hope for Bithumb is that they will be able to retain some of these clients who surely will be feeling much more vulnerable and less trusting.

Bithumb's transactions with bitcoin make up almost 3 percent of the entire market, but it is its share of ether transactions thats its major claim to fame: 13.5 percent of the total ether market goes through Bithumbs exchange.

It is a major blow for a big player in the exchange game, and it is a blow that will be felt in the global digital currency sphere. Trust has slowly been rebuilt for those who have lived through the teething stages of Bitcoin security, and, as the door opens on new and mainstream markets, hacks like this can cause adopters to have second thoughts.

However, one aspect of digital security that has changed since bitcoin has been accepted by a much wider audience is that governmental agencies are taking it under their wing.

There are differing stages of regulation for digital currencies, but these arguably bring with them added security. In the case of Bithumb, Koreas Internet and Security Agency has plans to initiate a probe into this cyber attack with a full investigation to follow.

Continued here:
Latest Cryptocurrency Exchange Hack Highlights Need for Better Security Protocols - Bitcoin Magazine

News wallets and exchanges

In anticipation of the upcoming user-activated soft fork on the Bitcoin blockchain, Japans Cryptocurrency Business Association is creating guidelines for virtual currency exchanges to protect customer investments.

According to a report by Nikkei Asian Review, Japans Cryptocurrency Business Association (JCBA) has begun preparing for the looming bitcoin fork that is expected on August 1. The association brings together leaders from banks, securities firms, exchanges, and other virtual currency businesses in Japan. It counts board members from Kraken, Coincheck, and Money Partners among its ranks. The association is chaired by director Tadayoshi Okuyama (Japanese: ).

Ahead of the user activated soft fork on the Bitcoin blockchain, the JCBA has issued guidance to key stakeholders and association members. Through a freeze, the association hopes to protect customer assets. The halt in trading may last anywhere from one day to a full week.

However, the report by Nikkei attests that some exchange operators (including Bitbank and Tech Bureau) will allow trading to continue, simply suspending deposits and withdrawals until the dust has settled from the fork. As of this publication, the countrys largest bitcoin exchange, BitFlyer, has not chosen a course of action.

As demonstrated by the GDAX flash crash, thin trading books could threaten investors. With this in mind, its vital for bitcoin exchanges (in Japan and worldwide) to plan for a few contingencies.

First, companies ought to keep their customers apprised of the forks implementation and the timeline for exchange freezes, if applicable. Next, the exchanges should provide customers with sufficient time to withdraw their investments if desired. After the fork, companies ought to provide a roadmap for which chain (or chains) they will support. This will help restore investor confidence and ensure that customers receive exactly what they are due. Coordinating disbursement of fork funds may prove challenging initially, so its crucial to keep customers in the loop.

The US-based GDAX has already taken that step, posting on its blog about the companys intentions to implement safeguards for addressing the fork.

Fortunately, for the most part, Japanese exchanges also appear to be proactive in their preparation. At this point, its virtually impossible to determine which Bitcoin blockchain will become dominant or how market share will be impacted. Still, investor protection should remain a priority for all.

Matthew is a writer with a passion for emerging technology. Prior to joining ETHNews, he interned for the U.S. Securities and Exchange Commission as well as the OECD. He graduated cum laude from Georgetown University where he studied international economics. In his spare time, Matthew loves playing basketball and listening to podcasts. He currently lives in Los Angeles.

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Freeze! Japan Cryptocurrency Business Association Prepares For Bitcoin Fork - ETHNews