Daily Archives: February 22, 2021

The reflection of bitcoins in a computer hard drive.

Thomas Trutschel | Photothek via Getty Images

As bitcoin continues on its upward trek in 2021, one analyst says the regulatory concerns surrounding the cryptocurrency won't likely derail its momentum.

"The regulatory issues have been around for a long time, we've been dispelling them for a long time. At this point, our belief is: Bitcoin is not a question of if, but when," Meltem Demirors, chief strategy officer at digital asset investment firm CoinShares, said Monday.

"We certainly believe, you know, the best time to invest in bitcoin was yesterday the second best time to allocate is today," she told CNBC's "Squawk Box Asia."

Her comments came after bitcoin recently toppled another milestone, pushing past $1 trillion in market value last week, according to Coindesk.

Bitcoin has been on a tear since the start of 2021, and has risen more than 90% so far this year, according to data from Coin Metrics. Those strong gains have been attributed in part to increased adoption of bitcoin by major investors and companies, including Elon Musk's Tesla and theBank of New York Mellon.

If it's a currency, it's a ... horrifically bad currency ... bitcoin seems to be primarily a speculative game.

Aswath Damodaran

professor, Stern School of Business at New York University

"It's becoming increasingly difficult for the bitcoin naysayers to continue with their decade-old narrative that bitcoin will never be utilized by traditional financial institutions," Dave Chapman, executive director at BC Group, told CNBC's "Capital Connection" on Monday. "Frankly, I'm not sure how much more evidence one needs to conclude that bitcoin isn't going away."

Bitcoin last sat at $55,867.95 per coin as of 3:45 a.m. ET Monday.

Still, Demirors warned that investors should not be allocating "significant portions of their balance sheet" to bitcoin.

"Our research has found that in a traditional 60-40 portfolio, a 4% allocation to bitcoin balances the reward as well as the risk of drawdowns," she said. The 60% stock and 40% bond portfolio is traditionally a popular allocation strategy designed to generate steady income while guarding against volatility.

Aswath Damodaran from New York University was far more skeptical about investing in bitcoin.

"This is an ... incredible show to watch. But it's definitely not an investment," Damodaran, a professor of finance at NYU's Stern School of Business, told CNBC's "Street Signs Asia" on Friday.

"If it's a currency, it's a ... horrifically bad currency," he said, adding that bitcoin "seems to be primarily a speculative game" that has "behaved like a very risky stock."

"It's not an asset class. It's a failed currency, at least into this moment," Damodaran said. "Let's see whether they can fix it because ... I don't think that they have an incentive to do so."

CNBC's Jesse Pound, Lizzy Gurdus and Sumathi Bala contributed to this report.

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'The best time to invest in bitcoin was yesterday,' says strategist as the cryptocurrency soars - CNBC

internet security and data protection concept, cybersecurity

Now a trillion-dollar asset, bitcoin is paramount to cryptocurrency culture after its60%hike this month, surpassing any traditional asset in this record-breaking milestone.

Since its introduction to the financial market in 2009, this first-of-its-kind cryptocurrency has been marked by high volatility and price fluctuations. Being a highly speculative asset, U.S. Treasury Secretary Janet Yellen has stressed the need for regulating any institution that handles bitcoins and investor protection in a recent CNBC interview. Despite the lack of regulation and vulnerability to scams and illicit transactions, a mixture of social proofing and celebrity endorsements has catapulted its popularity among investors and the masses.

But behind bitcoin is the ingenious blockchain technology that enables this unprecedented digital asset. The symbiotic relationship between bitcoin and blockchain is so apparent that people often confuse the two. Simply put, without blockchain, bitcoin is useless. With each bitcoin transaction, a digital trail is created on a shared ledger. Though the transaction itself is open and public, the persons identity behind the bitcoin transaction is encrypted and remains private. As transactions are posted on this digital ledger, a perpetual chain of anonymous and real-time transactions is created.

Though blockchain technology is most prominently recognized with its application to bitcoin and other cryptocurrencies, other use cases are taking precedence, particularly within supply chain management.

As seen with Covid-19, supply chain disruption is a critical risk that has an enormous impact on a companys operations and bottom line, especially for those that operate very complex and global supply chains with multiple intermediaries. The slightest hiccup in production can disrupt supply chain operations in mass proportion, creating fluctuations in lead times that can either cause supply shortages or tie up money in excess inventory.

Even with the most sophisticated ERP software, there is still a potential for information to be locked in silos, disparate processes, unnecessary paper trails, miscommunication between partners, and untraceable documents and activities. Streamlining the entire supply chain network would require integrating all software and systems across various suppliers, retailers, manufacturers, financial institutions, logistic providers, and regions to speak the same language. Essentially, all parties would be required to integrate the same system of record for every step of the supply chain process, which is highly impractical.

Blockchain solves this problem by greatly enhancing supply chain visibility and traceability within a complex supply chain network. All parties would have access to the blockchain with secure and synchronized data, including full transparency of every action being performed in real-time during end-to-end supply chain activity. As a result, leaders can quickly trace every single component of production and financial transactions, identify any existing bottlenecks, and quickly pivot to avoid certain risks that could cause disruption.

Blockchain is currently being used across various industries to transform supply chains ranging from food and agriculture, retail, aerospace, and even Covid-19 vaccinations!

Since theFDAauthorized the first emergency use of the Pfizer-BioNTech Covid-19 Vaccine to be administered in the U.S. in December 2020, the rollout of Covid-19 vaccines has been underway. Subsequently, decision-makers have been rallying to make the vaccination available to every adult in the U.S. by theend of summer 2021.The World Health Organization also announced its global effort to provide rapid and equitable access to2 billion Covid-19 vaccination dosesfor all countries by the end of 2021.

With this enormous feat, the deployment of advanced technology to enable vaccination logistics is essential. The vaccination supply chain has barriers that includea lack of transparency, traceability, and real-time information coordination. According to CDC Director Rochelle Walensky, one of the biggest problems right now is I cant tell you how much vaccine we have, and if I cant tell it to you then I cant tell it to the governors and I cant tell it to the state health officials.

Leveraging blockchain is a solution to this problem. In fact, two hospitals in the U.K. have already beenreportedusing blockchain to increase visibility into the supply chain logistics of vaccines by tracing temperature-controlled Covid-19 vaccinations and synchronizing data for real-time status updates on shipments for distribution and administration.

In the food industry, blockchain is being used to enhance traceability and transparency to reduce inventory loss by tracking the source of contaminated food, from farm and manufacturing to retail.Since 2019, Walmart and Sams Club made it a business requirement for suppliers to use IBM Blockchain as apart of their supplier agreements to allow transparent information among diverse suppliers in the supply chain network. Other names in the food industry who are using IBM Blockchain include Nestl and Tyson Foods.

Theretail and consumer goods industryalso uses blockchain to reduce losses due to counterfeit goods and allow supply chain partners to trace products in different locations. And in theaerospace sector, leaders leverage blockchain to streamline material traceability for parts acceptance from FAA and non-FAA certified sources and trace aircraft material requirements.

Though Bitcoin is the earliest application of blockchain technology, its implementation beyond cryptocurrencies positions it as one of the futures leading technologies that will transform the way businesses operate in years to come.

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The Technology Behind Bitcoins $1 Trillion Valuation And Its Application Beyond Cryptocurrency - Forbes

It is June 22, 2014. Jackson Palmer, a self-identified "average geek," is high in the stands at a Nascar race at the Sonoma Raceway in California. He is an Australian man in his 20s. He has zero interest in racing. Never in his wildest dreams did he imagine it would come to this.

He surveys the scene.

Below him: a tremendous crowd. The overwhelming blare of engines. Hurtling round at tremendous speeds: the #98 Moonrocket, a high-performance racing car. No different from the other cars on the track, except for one crucial detail.

On the bonnet of the car: a dog. A Shiba Inu, more commonly known as a "Shibe," the dog made famous in the Doge meme that was popular in 2013.

Emblazoned on top: the word "DOGECOIN" in all caps. Below: "digital currency".

Palmer describes the situation using words like "crazy," "surreal" and "nuts." He remembers this moment as a "reality check." Dogecoin was a tweet, then it was a cryptocurrency worth money in the real world. Six months later, he watched as a joke that he'd made in passing somehow manifested itself into something tangible. A Dogecar in full flight.

It reminded Palmer how insane the world could be.

This is the story of Dogecoin, the joke that became too real for its own good.

The Dogecar, in all its glory.

Dogecoin is a cryptocurrency, a form of digital money that, much like bitcoin, enables peer-to-peer transactions across a decentralized network. One important difference: bitcoin is the original blockchain proof-of-concept. Bitcoin is ground-breaking. Bitcoin is (some believe) world-changing tech with the potential to transform how money works in the 21st century.

Dogecoin is a digital coin with a picture of dog on it.

"It is a puzzle to me why Dogecoin is so highly valued," says Adrian Lee, a senior finance lecturer at the University of Technology in Sydney.

At one point Dogecoin was worth $2 billion. It's difficult to make sense of that.

"Dogecoin is an easily replicable coin," Lee said. "I don't know how it distinguishes itself from Bitcoin. I really think it has to do with being established early.

"And also the dog."

If you've spent any time on the internet during the last decade, you've probably heard of the Doge meme. The iconic Shibe, his inner monologue expressed in comic sans with broken modifiers: "so scare," "much noble," "wow."

Now playing: Watch this: Dogecoin explained: The joke cryptocurrency worth serious...

1:48

At the peak of the meme's popularity near the tail end of 2013, Palmer, an Australian marketer for one of the world's largest tech companies, made a joke combining two of the internet's most talked-about topics: cryptocurrency and Doge. It was a joke taking aim at the bizarre world of crypto and bitcoin's multiple derivatives.

"Investing in Dogecoin," Palmer tweeted, "pretty sure it's the next big thing."

The tweet got a lot of attention.

For laughs, Palmer decided to keep the joke going. He bought the Dogecoin.com domain and uploaded a photoshopped Shibe on a coin.

He left a note on the site: If you want to make Dogecoin a reality, get in touch.

Animal Crossing, featuring the in-game currency "Bells".

On the other side of the world, Billy Markus, a video game-obsessed software engineer at IBM, saw Palmer's note. He'd just finished "Bells", a project he was working on in his spare time.

Bells was a cryptocurrency named after money used in the Nintendo game Animal Crossing. It was 2013, the original crypto gold rush. Markus saw that bitcoin's code was open-source. He decided to take a weekend and do something weird. He tried to create his own cryptocurrency for "sillies," as he put it.

Bells was weird as hell. The major difference between Bells and regular cryptocurrencies was the rewards: they were completely random. If you mined bitcoin, using a decently powerful home computer, the rewards were consistent.

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If you mined Bells, there was no telling whether the reward would be one Bell or 500 Bells.

And that's because Bells wasn't meant to be serious, it was a digital currency based on a video game about animals who live in a village and go fishing together.

The cryptocurrency community didn't really get the joke.

"People were just trashing it," laughs Markus, who quickly discovered there was very little crossover between crypto-obsessives and gamers.

"I was like alright, I retire," says Markus. "I don't need to do this anymore."

But then Markus read Palmer's message on Dogecoin.com. That was the moment Billy Markus decided to come out of crypto retirement.

When Palmer didn't immediately respond to Markus' offer to help build Dogecoin, he started working on it anyway.

"Dogecoin," says Markus, "from 'that seems like it's funny' to actually doing it, took about three hours. It's almost trivial to create a new cryptocurrency."

It was a find-and-replace job.

Ctrl+F 'Bitcoin,' replace with 'Dogecoin.'

Markus freely admits to finding large chunks of bitcoin's source code completely incomprehensible, but knew enough to change a few core elements for Dogecoin. For example, Markus created 100 billion dogecoins (as opposed to bitcoin's 21 million) and made them easier to mine. (Dogecoin is already close to being mined out, while bitcoin's final coin will be mined in 2140.)

He changed the font (to comic sans of course) and changed every mention of the word 'mine' to 'dig' (because dogs don't mine, they dig...).

And then, during his lunch break, Markus set Dogecoin live.

Premining: the act of gathering cryptocurrency before launching your coin into the public domain. Almost everyone serious about launching a cryptocurrency does this.

But Markus and Palmer didn't premine any Dogecoin. Because they weren't serious about launching a cryptocurrency.

"We thought it was this big joke that would die off," laughs Palmer.

And according to Markus, Palmer wasn't even sure how to mine a cryptocurrency.

Markus had a relatively powerful gaming PC, with two graphics cards, so he was officially the first person to mine Dogecoin. But given the the nature of mining (which gets increasingly difficult as the currency is mined) Billy's computer was no longer powerful enough to mine Dogecoin after about five minutes. Markus split what he'd mined 50-50 with Palmer and that was that. Both got about $5,000 of Dogecoin.

And that's all the Dogecoin either man would ever own.

In online crypto circles, Dogecoin became popular very quickly. Forum threads moved rapidly. The name Dogecoin echoed throughout dark corners of the internet.

But Reddit was almost certainly the main driver in Dogecoin's rapid rise to crypto stardom. The Dogecoin subreddit exploded almost immediately, and with that explosion came the infrastructure any cryptocurrency needs if it is to become successful: mining pools, services.

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"It was moving at light speed," explains Markus. "Within minutes we were like, 'Wow, this is way out of our control."

But it was the Reddit "tipping bot" that drove Dogecoin into the stratosphere.

If a user posted something to the effect of, "hey 'dogebot' tip this person five dogecoin," that Reddit user would automatically receive five Dogecoin. People were sending Dogecoin back and forth in a feel-good exercise that cost very little money in real-world terms.

"I liked it," says Markus. "At the time, Dogecoin wasn't worth anything, but getting five Dogecoin felt better than getting two cents."

Reddit users were sharing Dogecoin back and forth constantly, which expanded the user base of Dogecoin and, as a result, increased its value as a cryptocurrency.

"Pretty much everyone who used Reddit had Dogecoin," says Palmer. "I think that was key to its success."

The 2014 Jamaican bobsled team, holding Dogecoin t-shirts.

January 2014. Jackson Palmer is already three drinks deep at a trivia night at his local pub in Sydney. His phone starts buzzing. It doesn't stop buzzing.

Earlier that night, Palmer and the Dogecoin community had brainstormed a ridiculous (but completely brilliant) idea.

For the first time in a decade, Jamaica's bobsled team had qualified for the Winter Olympics, but it didn't have enough money to attend. As huge fans of the comedy "Cool Runnings," Palmer and the Dogecoin crew decided to do something about it.

They chucked up a Dogecoin address onto the subreddit and asked for donations. Hours later they'd raised $25,000.

That's when Palmer's phone started vibrating off the hook.

"I was like, 'Quick we need to get back to our computers,'" laughs Palmer.

So Palmer and friends stumbled home from the pub, picked up a six-pack of beer for good measure and set about figuring out how to send 26 million Dogecoins to the Jamaican bobsled team.

It was a gesture that symbolized the early spirit of Dogecoin.

In Markus' words, they were allergic to the word "invest." Both Palmer and Markus donated all their Dogecoin to these massive charity initiatives. They helped build water wells in Kenya and raised money to help train assistance dogs for autistic children.

"We wanted to create something that was a force for good," explains Palmer.

But as the community grew, the initial spirit in which Dogecoin was launched was difficult to preserve. People started to care about the price of Dogecoin. They were literally and figuratively invested in it.

And that terrified Markus.

"I don't mind if someone spends ten bucks and gets some Dogecoin," says Markus. "It's like buying a movie ticket or something, that's fun.

"But when someone puts $20,000 in? That makes me really, really uncomfortable."

Markus began clashing with members of the community. For him, Dogecoin was still crypto "for sillies," but here it was ballooning into a currency people were trading for real money. In his view Dogecoin was a silly thing that should remain silly. Many in the community disagreed.

Eventually he decided enough was enough.

"I was like, "Okay, this is dumb. I don't want to be the leader of a cult.""

Markus decided to bail on Dogecoin.

It was Moolah that pushed Dogecoin to the brink.

Palmer describes it as "PayPal for cryptocurrency." From the very beginning, Palmer was cynical.

Run by a British man calling himself Alex Green, Moolah was a cryptocurrency exchange designed to help people buy and sell Dogecoin. They infiltrated the Dogecoin community with startling efficiency.

Alex Green began by doling out Dogecoin in exchange for upvotes on the Dogecoin subreddit. He also donated generously to charitable causes the community were involved in, like $2,500 to a cancer charity, or $3,000 to help get the Dogecoin Nascar vehicle on the track.

The community loved it. Soon Moolah began hiring people from the Dogecoin community for key positions in the company.

"Alex Green started building his business on top of Dogecoin," says Palmer.

Markus, watching from afar, wasn't a fan.

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Despite removing himself from the day-to-day workings of Dogecoin, Markus attended a Dogecoin convention, organized in part by Palmer. He wanted to catch up with some of the old gang. By chance, he ran into representatives from Moolah, who were at the bar guzzling Cristal at $200 a bottle. They poured a glass for Markus.

"I was really uncomfortable," remembers Markus. "I said, 'whatever's going on here I just don't want any part of it.'"

"I just passed the glass to someone else."

Many key figures in the Dogecoin community shared Markus' suspicions, particularly Palmer, who was wary of Moolah from the beginning. But when concerns were raised they were mostly shouted down by a community that enjoyed the free currency being sent their way.

Later Moolah began soliciting the Dogecoin community for investment dollars and plenty donated Dogecoin to the cause. Why not? Moolah had been generous in the past. It made sense to repay the favor.

Moolah received over $300,000 from the Dogecoin community, across three separate rounds of investment.

And then it all came crashing down.

Months later, October 2014, Moolah went completely bankrupt. The Dogecoin community would end up losing every single cent they'd invested.

The situation got worse. An ex-girlfriend of Green got in contact with Palmer and other members of the Dogecoin community. She revealed that Green was actually Ryan Kennedy, who was notorious in the UK anime community for running companies terrifyingly similar to Moolah.

Suddenly the UK police were involved. After a three-year investigation, Kennedy faces multiple charges of fraud and money laundering. At a preliminary hearing in Bristol Crown Court on September 2017 he denied all charges. A request for comment was sent to Kennedy's Defence Lawyer, but we've yet to receive a response.

But Kennedy had to answer to more serious, disturbing crimes. In May 2016, he was tried and convicted on three counts of rape with three separate women. According to press reports he smiled as he was being led from court.

"Ryan Kennedy convinced his victims they had no choice but to do as they were told," said senior prosecutor Ben Samples. "He was emotionally, sexually and physically abusive, putting his needs above all else."

Ryan Kennedy is currently serving an 11-year sentence in a UK prison.

In the months after Moolah's bankruptcy, Palmer struggled. He distanced himself from Dogecoin. From the community. From cryptocurrency as a whole.

"The energy I was putting into it wasn't helping me from a mental health perspective," he explains.

Read the original:
Dogecoin: The meme that became a real cryptocurrency - CNET

Ether (ETH) soared to new record highs Thursday, but an overheated derivatives market may suggest higher volatility is on the way for the short term.

The second-largest cryptocurrency by market value set the new lifetime high of $1,928 soon before press time, having first breached the previous peak of $1,821.49 reached on Feb. 13 early today, according to CoinDesk 20 data.

In the derivatives market, the average level of the funding rate across major exchanges offering ether perpetuals (futures with no expiry) has risen sharply from 0.069% just short of the early January record high of 0.21%, according to data source Glassnode.

It shows the derivatives market is overleveraged, Patrick Heusser, head of trading at Swiss-based Crypto Finance AG, told CoinDesk. With this current structure, I do not feel comfortable in running a lot of long exposure.

The funding rate is calculated every eight hours and represents the cost of holding long positions. When perpetuals trade at a premium to spot price, the funding rate is positive (longs pay shorts).Hence, a very high funding rate is considered a sign of leverage being excessively skewed to the bullish side (overbought conditions) and often injects volatility into the market.

Ether: Average funding rate

In such situations, holding longs at high costs is attractive only if the bullish momentum remains strong. A pullback or consolidation can trigger an unwinding of longs, leading to a more profound price drop and a pick-up in price volatility. As of press time, ether is showing no signs of price congestion.

However, the case for a continued steep rally looks weak, with spot market volumes falling on major exchanges such as Coinbase.

Ether daily chart

With the 10-day moving average of daily volume trending south, theres a question mark on the sustainability of recent gains. A low-volume price rise is often short-lived.

That said, a pullback, if any, could be shallow and brief, as on-chain fundamentals are biased bullish.

The number of coins held on exchanges has declined by 10% to 20.77 million in the past three months, according to data source CryptoQuant.It shows investors are either taking direct custody of coins or staking them into decentralized finance protocols, creating a sell-side liquidity shortage.

Ether exchange reserves (number of balances held in exchange addresses)

In the long-run, [the] ETH rally would keep going as long as ETH holdings in all exchanges are decreasing, Ki-Young Ju, CEO of CryptoQuant, told CoinDesk.

Other metrics also paint a bullish picture. For instance, the 90-day average of active addresses on Ethereums network has increased to a new lifetime high of around 450,000, surpassing the 2017 peak, according to Glassnode.

Ethereum: 90-day average of active addresses

When theres greater usage, theres more demand for the cryptocurrency, and that drives the price up, Philip Gradwell, chief economist at the blockchain intelligence firm Chainalysis,told CoinDesk.

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Ether Looks Overleveraged as Cryptocurrency Hits New High Over $1,900 - CoinDesk

The wild ride of Bitcoin has dominatedheadlines in recent weeks. The cryptocurrencys value stands around $50,000 forone Bitcoin this week compared to about $10,000 a year ago and around $400five years ago. Bitcoin is just one of thousands of cryptocurrencies inexistence - and many of those are also surging but it has by far the highestvalue.

Since Bitcoin first appeared in 2009as the original decentralized digital currency, i.e., not controlled by banks ora government, a handful of travel companies have come to accept it as a form ofpayment.

One of the first was online travelagency CheapAir, which began accepting Bitcoin in 2013. Originally the companyused a third-party processor to convert the Bitcoins into dollars which couldthen be paid to airlines and hotels since virtually all suppliers stillrequire payment in fiat currency. Eventually, the OTA built its own processingtechnology for Bitcoin to manage the exchange itself.

CheapAir co-founder and CEO Jeff Klee says that the needto exchange the cryptocurrency is one of the roadblocks to widespread adoptionin the travel industry.

It would be much easier for everyoneif the suppliers would accept crypto. Its a bit of an ordeal when the supplierdoesnt, so we have to exchange into dollars and pay the supplier separately,he says.

Thats what makes it unattractiveto a lot of travel intermediaries. Theres a lot of infrastructure you need,training you need for your frontline agents to support it when customers call.We decided to commit to it, so we built that infrastructure and its a big partof our training.

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Even with that commitment, Klee says cryptocurrencystill accounts for just single digit percentages of CheapAirs sales. But therehave been positive aspects.

We really value and appreciate our Bitcoincustomers. They tend to be very loyal, and they tend to buy more expensiveproducts ... first-class tickets and luxury hotel accommodations, he says.

Spain-based OTA Destinia has beenaccepting Bitcoin since 2014. Managing director RicardoFernndez says that while it only accounts for about 2% of the platforms globalsales, offering payment in Bitcoin has enabled the site to attract a niche ofcustomers around the world that own and want to spend cryptocurrency.

But, he says, that relationshipbetween holding versus spending cryptocurrency is changing, something echoed byKlee.

Until 2020 the relation between priceof Bitcoin and number of bookings was direct - the higher price, the higherbookings. In 2020 when Bitcoin started to go crazy, the relation started to beinverse. So if price is growing, the number of bookings is decreasing because peopleare now looking at it as an investment, Fernndez says.

That hasnt been the case for Travala, an Australia-based OTA founded in 2017 that offers more than two millionaccommodations around the world and in two weeks will add tours and activities.The sites primary cryptocurrency is Bitcoin, followed by its native AVA tokenand 25 other cryptocurrency options.

Co-founder and CEO Juan Otero says Travala is processing about one million dollars worth of bookings each month and about 70% of thatis paid in cryptocurrency, for which the company has built paymenttechnology to manage the exchange and payment in fiat to suppliers.

He says broader adoption of cryptocurrencyis inevitable.

We are just at the beginning of whatwill be a true financial revolution where people will move away from fiat andinto cryptocurrencies, Otero says.

When you pay with crypto, its nearto instant, its near to free, its privacy preserving everything thatblockchain technology offers you is something you have when you usecryptocurrency to pay. Plus no added credit card fees, or waiting for a paymentto be processed or denied. All the issues and costs with traditional creditcard payments are removed when you pay with cryptocurrency.

That doesnt mean cryptocurrency is withoutrisk, cautions Thomas Helldorff, vice president for airlines and travel at Worldpayfrom FIS.

If you accept a Bitcoin as a form ofpayment, then you have to live with the risk that by the time you accept it,then you eventually convert it to your currency, that Bitcoins value mayfluctuate up or down and that may significantly erode your margin, Helldorffsays.

Travel companies with a very thin margin are not in the game of speculating with currencies.

Thomas Helldorff - Worldpay from FIS

Travel companies with a very thinmargin are not in the game of speculating with currencies.

Instead, Helldorff says he would liketo see governments or central banks issue their own digital currency, whichwould facilitate more modernized payment processing while providing thestability of being backed by fiat currency. Currently, central bank digitalcurrencies are in various stages of exploration and development in countries includingChina, Singapore and Sweden.

Governmentally backed digital currenciesare simply a digital representation of the currency that they represent. Their valuedoesnt change, Helldorff says.

And it is a digitally certifiedpayment instrument that you cant alter, you cant fake, you cant change. Thatsthe next evolution.

Helldorff says airlines and othertravel suppliers should begin preparing for this shift now developing standardsand systems to connect a digital payment type to a travel record.

We all know it takes years for thesespecifications to be endorsed by IATA, by everybody, so I think its the righttime when we are not terribly busy while we are waiting for things to get better. ...We might use some of this time to think about whats the next big paymentoptions, get prepared and maybe be the first industry to be able to cross-borderaccept those currency units, he says.

By linking central bank digitalcurrencies to a smart contract a mechanism inherent to blockchain-basedcryptocurrencies the process of payments between travelers, intermediariesand suppliers would be faster and frictionless.

Helldorff says this automationcreates a significant advantage that will eventually motivate broad adoption ofsmart contracts and distributed ledger technology by the travel industry.

With a smart contract, there are definedrules for what happens in what situation and the money just bounces around becausethere is no need for clearing and settlement, he says.

Theres no invoicing and banktransfers and checks going forth and back to make that money flow work. Thebooking, the order itself, holds the financial value or access to the financialvalue and distributes the financial value as per order and moves the moneybetween the players as the services get executed or as the contract stipulates.

"This is how I see the future of settlements happening in the airlineecosystem.

Read more from the original source:
As Bitcoin surges, will cryptocurrency become an accepted form of payment in travel? - PhocusWire

Change doesn't come fast, or often, to institutions like Christies, a British auction house founded in 1766 predating American independence. But it has come all at once to Christie's, which is accepting cryptocurrency for the first time for its first purely digital artwork.

Christies has never offered a new media artwork of this scale or importance before, Noah Davis, specialist in Post-War & Contemporary Art at Christies in New York, said in a release. Acquiring Beeples work is a unique opportunity to own an entry in the blockchain itself created by one of the worlds leading digital artists.

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The auction house is accepting payment in the cryptocurrency Ether, hosted on the open-source blockchain Ethereum, via a digital wallet transfer although not for the buyer's premium (the fee you pay for winning the bid, in addition to the bid).

I almost look at it now like Im a political cartoonist, Mike Winkelmann, known online as Beeple, said about the work, which is a compilation of digital pieces one created each day for 5,000 days. Except instead of doing sketches, Im using the most advanced 3D tools to make comments on current events, almost in real-time.

Beeple, who has created digital artwork for everyone from Ariana Grande to deadmau5, has 1.8 million followers on Instagram, where he posted the first installation in the series on May 1, 2007, a picture of his Uncle Jim, nicknamed Uber Jay.

America is changing faster than ever! Add Changing America to your Facebook or Twitter feed to stay on top of the news.

"I probably would have spent more time on this, had I known it would eventually be part of a piece auctioned by Christies," he told the auction house.

There's another from the morning his first child was born, a bad bout of food poisoning and even one inspired by the fly that landed on former vice president Mike Pence's head during a debate last year.

The winning bidder won't be taking it home with them, at least not in the traditional way. The digital work will be sent using blockchain technology, which will use a non-fungible token encrypted with the artists unforgeable signature a unique identifier for the original. The starting bid is at $100, but if you don't have the cryptocurrency to afford the work, you can still see it online, with the rest of the plebeians.

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Christie's becomes first major auction house to sell cryptocurrency-based artwork | TheHill - The Hill

In this photo illustration, visual representations of the digital cryptocurrency, Bitcoin are arranged on January 4, 2021 in Katwijk, Netherlands.

Yuriko Nakao | Getty Images

GUANGZHOU, China Bitcoin could rise to $1 million over the long term to become a reserve currency for the world, according to one asset manager.

But JPMorgan warned of risks ahead as the cryptocurrency continues to rally.

Anthony Pompliano, co-founder and partner at Morgan Creek Digital Assets, said bitcoin could hit $500,000 by the end of the decade. It could eventually reach $1 million per coin, he added, without giving a timeline.

"I think that bitcoin will eventually rise to become the global reserve currency. I think bitcoin will eventually be much much larger than the gold market cap," he said during the latest episode of CNBC's "Beyond the Valley" podcast.

Meanwhile, global central banks have been easing monetary policy such as lowering interest rates and buying assets through the so-called quantitative easing program to help cushion the blow to economies hit by the coronavirus pandemic.

"There were trillions of dollars that were printed and injected into the economy and everyone from individuals to financial institutions and corporations ran around the world looking for the best way to protect their purchasing power, they ultimately decided it was bitcoin," Pompliano said as he discussed what was behind bitcoin's surge.

(Bitcoin) will eventually take that seat at the kingdom of being that global reserve currency of the internet generation.

Anthony Pompliano

Morgan Creek Digital Assets

The bitcoin bull's prediction that bitcoin could hit $1 million is based on a few factors including the scarcity of the cryptocurrency which has a cap of 21 million coins, as well as the decentralized nature of the technology.

There is no central authority like a central bank that controls bitcoin.

Instead, the so-called bitcoin network is made up of miners who process transactions. These miners operate a vast array of specialized computers required to carry out the bitcoin mining process.

As there are many different miners, no single entity can control the network. And because the computers they use are often very powerful machines, bitcoin proponents claim the network is one of the strongest computer networks in the world.

"As more and more people come into the market, there is more liquidity. As there is more liquidity, there is more utility. As there's more utility, there's more stability in the price you get kind of this evolution," Pompliano said.

"If you think about that internet economy, there is no native currency (bitcoin) will eventually take that seat at the kingdom of being that global reserve currency of the internet generation."

In January, JPMorgan released a note to clients putting a "theoretical" long term price target on bitcoin of $146,000 as bitcoin begins to compete with gold.

Gold is broadly accepted as a "safe haven" asset where investors flock to in times of political strife or financial market turmoil. Bitcoin is now beginning to develop such a reputation.

"Bitcoin is competing with traditional gold, bitcoin is a form of digital gold," Nikolaos Panigirtzoglou, global markets strategist at JPMorgan, told CNBC's "Beyond the Valley."

He said that the value of gold held by the private sector, solely for the purpose of investment, is around $2.7 trillion. For bitcoin's market cap to reach that, it would need to hit a price of around $146,000.

But there are caveats, the biggest one being the volatility in bitcoin's price. The digital coin is known for wild swings in price. Panigirtzoglou said bitcoin is "five times more volatility than gold."

The key to bitcoin's volatility converging with gold is institutional adoption, the JPMorgan strategist said.

"The faster the pace of institutional adoption, the quicker that convergence in volatility will take place," he said.

Still, there are risks ahead for the current rally. While it has been driven by institutional investors, retail participation has also been high.

"The biggest risk is that the flow impulse we've seen over the past months slows materially from here," Panigirtzoglou said.

"In particular when the economies reopen, people go back to the office, they have less time to trade at home, and as a result some of that, retail flow impulse slows from here," he added.

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Bitcoin at $1 million? Some analysts are bullish but others warn of risks ahead - CNBC

The recent rally in Bitcoins price is often attributed to institutional buying support, with many publically traded companies adding the digital asset to their balance sheets Tesla being the one that grabbed the maximum eyeballs.

However, Bitcoin and blockchains story begins more than a decade ago when the cryptocurrency was first released by an anonymous person or group of people known only as Satoshi Nakamoto.

Regardless of whether you think cryptocurrencies like Bitcoin are in a bubble or not, the underlying technology called blockchain that powers them is objectively groundbreaking.

The iGaming industry was one of the early adopters of Blockchain and cryptocurrency. In this article, we take an in-depth look at blockchain and cryptocurrency, how they are used in the iGaming industry, and where they might be heading in the future.

A blockchain is a database where information is stored in different blocks and chained together via cryptography methods.

Bitcoin introduced blockchain to create a decentralized network that could operate trustlessly. You do not need a third-party to validate a transaction between two parties; instead, the transaction is validated through a decentralized consensus-building process known as mining.

In the case of Bitcoin, there is no single entity keeping track of the entire blockchain database. Instead, it is maintained by a massive network of miners who validate new blocks by competing against each other to win rewards.

Cryptography techniques are used to protect the system and enable the competitive mining process, which is why Bitcoin is called a crypto currency.

Since the database is decentralized and validated by a large number of computers worldwide, it is not possible to alter previous transactions recorded in the ledger because to do that, the majority of miners will have to agree to change the transaction in the history of the ledger; this removes a central point of failure and makes the ledger immutable.

Additionally, since the entire blockchain data is available to the public, every Bitcoin transaction in history can be viewed by anyone, providing transparency since all the information is publicly available.

As people kept researching blockchain technology over time, several developments have been made like smart contracts, which allow you to run applications on a decentralized network using Blockchain. Private centralized blockchains also became possible as an excellent way to store data and prevent the chances of fraud securely.

It is important to note that blockchain technology and cryptocurrencies overlap but are not the same thing. For example, blockchains are also used to improve Supply-Chain Communications and Proof-of-Provenance, which has nothing to do with Bitcoin or any other cryptocurrency.

In 2018, it was estimated that 50% of all Bitcoin transactions were related to online gambling. One of the earliest gambling websites that used cryptocurrency was SatoshiDICE, where players could use Bitcoin to bet on a game of Dice. The company was eventually sold to an unknown buyer in 2013 for 126,315 BTC (worth $11.5 million at the time).

Today, blockchain is used for many purposes in the iGaming industry other than just for processing payments. Here are some functional areas where blockchain can help iGaming companies:

Additionally, gaming regulators may also start using Blockchain technology in their licensing procedures to ensure better compliance and bring more transparency.

The entire platform runs using a smart contract, which means the whole process is decentralized, and no centrally controlled entity stores the funds. It also leads to lower commission costs for the operator and faster transaction speed.

Additionally, white-label solutions for sports betting like Bethereum bring the benefits of using a blockchain to sports betting.

One of the significant benefits of using cryptocurrency payments is that it allows people to deposit money quickly, mainly if the online casino is located offshore and doesnt support any convenient traditional payment option for the player.

In countries with an unregulated online casino industry like India, many highly-ranked online casinos allow payments to be processed via cryptocurrency.

However, given the nature of cryptocurrency, it is likely that cryptocurrency would be regulated if not outright banned in the emerging markets. Ironically, these markets stand to gain the most from cryptocurrency payments as international transactions usually carry a hefty fee and take a long time to be processed.

Regardless, it is pretty clear that blockchain and cryptocurrency will play a much more significant role in the iGaming industry over the years to come.

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How Blockchain and Cryptocurrency Became a Vital Part of the iGaming Industry - Dazeinfo