Category: Bitcoin

A Review of Bitcoin’s and Crypto’s Rather Strange Week

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This week has been a pretty dull one for bitcoin especially with the dramatic price drops that unearthed some doubt about the hype that cryptocurrencies had created towards the end of 2017. It eventually recovered, but by doing so, it only reminded the world of how unpredictable decentralized digital currencies are. Furthermore, there have been reports that regulators are planning to toughen the market – this along with the reported evocations of the Great Depression in many ways made the week even more turbulent than expected.

Perhaps one of the biggest reasons for bitcoin’s price drop is the possibility of cryptocurrency trading being outlawed in some countries from various parts of the globe. One of the countries whose government has been hinting at such a move is South Korea. Earlier this week, Park Sang-ki, South Korea’s justice minister said that the country’s government had rather “great concerns” pertaining to digital currencies and was therefore “basically preparing a bill to ban cryptocurrency trading through exchanges”, especially because they think that crypto will make tax evasion easier.

While South Korea has since been seen to have softened its stance on the matter after a spokesperson of the Presidential Office said the possibility of a ban on crypto exchanges was simply “one of the measures prepared by the Ministry of Justice, but … not a measure that has been finalized”, investors are still panicking over the confusion caused by the uncertainty of how exactly the country intends to crack down on crypto.

There is a good reason for investor panic since even if the total ban on crypto exchanges does not come to pass, South Korea can still impose new regulations that could hugely impact the market – like bans on anonymous crypto trading accounts and underage investors, for instance. In a similar scenario, last September, the Chinese government shut down domestic changes and according to more recent reports, there are even going an extra mile to cut off access to all online crypto platforms and services operating from within or outside its borders.

Even Europe is Bursting Bitcoin’s Bubble

Financial watchdogs in Europe have begun to tighten the screws on cryptocurrencies as well in a bid to ease up the pressure of the price boom that is considered by many European economists to be nothing more than a bubble. Europe’s financial regulators watched cautiously as the price of bitcoin soared to nearly $20,000 last year. In the process, other cryptocurrencies also received a much-needed boost.

However, Europeans have hopped off of the back seat and they are now joining other policymakers from various parts of the globe in warning investors of the possibility that the crypto bubble could pop. French and German politicians, for instance, recently revealed plans to present a joint proposal that calls for the regulation of cryptocurrencies at March’s G20 summit.

There Are Only 4.2 Million Bitcoins Left to Be Mined

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Bitcoin has been receiving a significant share of attention since last year and this does not seem to be going away anytime soon. The previous weekend marked a great milestone for the decentralized digital currency since now it is reported that 80 percent of the cryptocurrency has been mined and is in circulation. There are only 4.2 million bitcoins left to mine which translates to the remaining 20 percent. The protocol that was put in place by bitcoin’s inventor(s) is one of the first that was based on digital scarcity which therefore means that soon enough this particular digital asset will become even harder to obtain than it already is.

So far, the capped supply and other pillars of the bitcoin framework have held on quite sturdily thanks to the miners who secure the network and have successfully managed to uphold the rules from changing with hash power. One such rule is bitcoin’s supply cap which was introduced by Satoshi Nakamoto and stands at 21 million bitcoins. However, there have been skeptics that believe that there could be a way of increasing the supply of bitcoin using manipulative tactics such as Sybil attack and 51 percent – but this is all just theoretical since in its decade-long existence no one has been able to successfully alter or break the rule on the 21 million supply cap.

What is Next?

Since there are only 21 million bitcoins, the digital asset’s limited supply will definitely make the asset harder to acquire as more people become aware of it. In nearly all cases, when an asset is limited with associated resources being harder to come by, the supply causes demand for the market. From what we can already clearly see, the supply of bitcoin shows a significant gap between the number of bitcoins in circulation and the number of people who want to get their hands on them.

Other than the obvious difficulty in accessibility that is already taking route, it is quite obvious that miners themselves are going to be forced to constantly deal with having to constantly increase their processing power. Depending on the hash rate speed, the next miner reward halving will be upon us in two years or less. The miner reward halving is part of the bitcoin protocol and it essentially means that in two years or less, instead of getting 12.5 BTC for every block that miners mine, they will get 6.25 BTC. It is a network consensus agreement that requires that halving is done every four years but everyone is bound to feel the pinch as it will be very difficult to obtain bitcoin even with the large data processors available in various warehouses all over the world.

Former PokerStars Duo Launch Esports Betting Platform

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Lars Lien and Mike Stevens who are both former PokerStars ambassadors recently joined forces to launch a crypto-based Esports betting platform. The platform which is due to go live any time this year is going to be a Bitcoin-based startup where punters will be allowed to wager on professional Esports events. Furthermore, the platform that has been dubbed Luckbox.com, will allow users to make deposits using both in-game items and various cryptocurrencies, something that both Lien and Stevens believe will go a long way in opening up markets that are currently experiencing restrictions as far as payment services are concerned.

While a global roll-out is the ultimate goal of this endeavor, Lien and Stevens are hoping to obtain a license in the Isle of Man for the platform before they begin preparing to extend to other parts of the world. Soon, Luckbox.com will be launching an Initial Coin Offering (ICO) and the platform is already being aggressively marketed in various parts of the world including Africa. As of now, the two have raised 483.5 Bitcoin form strategic contributors and the ICO they are planning is intended to generate the remaining finances that they require to launch.

The Initial Coin Offering will revolve around the sale of a utility token that will be used on Luckbox.com and also traded by accredited investors to hold a ‘profit share’ token that will entitle the holder to about 20% of the company’s annual net income.

Luckbox.com will be issuing two tokens to its users once it goes live. The first is LuckCash which is a utility token for the platform and the second is LuckProfits which, like we mentioned earlier, gives the holder contractual rights to a share of the company’s net profits.

Lien and Stevens are among many other entrepreneurs who have seen the huge potential in emerging markets such as Esports. There is generally a whole lot to look forward to in this regard, that is, the development of smart contracts will lower transaction costs, and dispel the dependency on traditional bank accounts.

Mining Fees Surge as China Intensifies Crackdown on Bitcoin

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This week, the Chinese government intensified its efforts to stop bitcoin mining by calling for all the task forces to “actively guide” in the closure of bitcoin mining operations. According to a Wall Street Journal report, the notice by Chinese authorities called for an “orderly exit with no specific deadline. The report further stated that the reason for the intensification of China’s efforts against bitcoin mining was because it “consumes a large amount of electricity and also encourages a spirit of speculation in virtual currencies.” On the same note, the Chinese authorities believe that bitcoin mining is among a host of activities that are not particularly in line with the needs of the real economy.

Chinese government officials have been asked to wield a policy ax on bitcoin which implies that they will be required to cite or promulgate regulations to limit aspects of bitcoin mining such as land use, electricity consumption, environmental regulation and tax collection.

The Role of China in the World of Bitcoin

To put the importance of China in the bitcoin ecosystem into perspective, we can take a look at the last month of 2017 when China accounted for 80% of all the bitcoins mined in the world. These impressive percentages are mostly attributed to the numerous advantages that the country offers to bitcoin manners including cheap electricity as well as centralized mining operations, both of which are key sustainers of the price of bitcoin.

Will Global Bitcoin Mining Operations Take a Hit?

Regardless of all the perks of operating within China, bitcoin mining operations will not have a lot of trouble once the crackdown begins.

In fact, a number of renowned bitcoin mining operations have already exited China and moved to other areas that offer nearly the same advantages that China offered.  A great example is Bitmain, which is considered to be the largest bitcoin mining pool in the world, that recently set up shop in Inner Mongolia.

Some other mining operations are moving to cooler climes and according to numerous reports, Canada seems to be one of the locations that will benefit from the migration of mining operations. Meanwhile, since the Chinese government did not issue any strict deadline pertaining to the “orderly exit,” the price of bitcoin will not experience any radical volatility.

Blockchain Could Redefine the Sports Betting Experience

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Since 2017, a plethora of sports betting sites and apps have been shifting towards offering bettors the opportunity to place bets discretely from anywhere using their smartphones. The convenience that this provides has been a great marketing move that has paid off handsomely by attracting a staggering number of new users to online sports betting. However, there have been challenges when it comes to payment systems especially when it comes to traditional payment services and digital wallets who have always been circumspect about supporting online gambling. While this would have represented a dead end of sorts in the past, the utilization of specialized payment gateways in facilitating bankroll funding and payouts in online casinos took over.

Even though these services can be thought of as saviors to the online gambling scene, their involvement has in many ways amplified the risks of failure and fraud. The aforementioned payment gateways and services are always under threat from hackers and other cyber-criminals. Even handicapper sites and services that usually offer paid analyses to less savvy bettors do not always produce the wins that they promise to gamblers.

To address these issues, stakeholders in the online gambling industry are looking into blockchain technology. Several efforts are already being made in order to create better online betting experiences. Just to mention a few, HEROcoin is an effort that aims to decentralize sports betting, BlitzPredict through its aggregation service intends to provide gamblers with trustworthy insights and Electroneum’s token is designed to be used a digital currency in online gambling sites.

Facilitation of Easier Funding and Payouts

Unlike traditional means, payments made using blockchain are much faster as the tokens do not need to be routed through several financial institutions or clearing houses. In essence, this gives the users ultimate power over how and when they use their money. Furthermore, Electroneum which is a relatively new cryptocurrency has set a pace for allowing easy estimation of digital currencies and fiat currency by limiting its token to two decimal places.

Transparency

Blockchain powered platforms such as HEROcoin are offering great ways of achieving transparency and fairness by making betting a peer-to-peer and decentralized activity. Not only do users get to trace the flow of money and the terms but they also are allowed to define the conditions of wagers through smart contracts.

Trustworthy Insights

Services like BlitzPredict promote quality insights by allowing analytic enthusiasts to share their prediction models with other users. High performing models in BlitzPredict’s framework are rewarded with the platform’s own token which can then be used to place bets using the platform. This kind of rewards mechanism encourages gamblers to make data-driven decisions rather than relying on bad advice or hunches.

Zuckerberg: Cryptocurrency Could Come to Facebook in Future

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Facebook founder, chairman, and CEO Mark Zuckerberg has posted his annual challenge – this is usually a review of major events of the previous year and an appraisal of what’s to come. This year, Zuckerberg ended the post with something that will be very exciting to members of the cryptocurrency world that also happen to be Facebook users. In 2018, Facebook could be venturing into blockchain in a bid to “take power from centralized systems” by innovatively utilizing the underlying resources that included encryption and cryptocurrency.

In Zuckerberg’s Thursday posting, he reaffirmed the company’s commitment towards correcting persistent problems that have been dogged the popular social network with the most daunting being misinformation, fake news and hate speech.

Could Crypto Solve These Problems?

“There are important counter-trends to this — encryption and cryptocurrency — that take power from centralized systems and put it back into people’s hands,” Zuckerberg wrote. “But they come with the risk of being harder to control. I’m interested to go deeper and study the positive and negative aspects of these technologies, and how best to use them in our services.”

Evidently, Zuckerberg’s endeavor seems to point to a debate that has raged on for a while now, that is, centralization versus decentralization. He pointed out that he and most of his tech counterparts got into technology because they believed it would be a decentralizing force which would give the people more power. However, the people themselves have lost faith in tech companies especially because of reports of tech-based companies that are co-conspirators with authorities who gather large amounts of personal information.

The Facebook CEO acknowledged this problem in his post and he believes that encryption and cryptocurrency have the potential to take back power from centralized systems and give it to the people. While it is not clear what exactly Facebook intends to do with the technology, its entry into the crypto world will be very dramatic. Numerous tech gurus have suggested that crypto and blockchain could have a revolutionary impact that will surpass its current utilization in decentralized digital currencies. For instance, it would be very useful as a decentralized data store that will free information from the influence of companies such as Facebook itself.

As far as we can tell, Facebook is very serious about this venture. The company’s vice president of messaging products, David Marcus, also recently joined the Coinbase.Inc. board late last year. The Facebook executive has been a follower of cryptocurrencies since 2012 and he was very impressed by how Coinbase started to democratize access the new asset class. The prospects of what is come are clearly very promising.

Alaskan Schoolgirl’s Bitcoin Project to Pay for Her College

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Bitcoin has earned a reputation for being what the current generation calls a digital gold mine. However, as much as this claim may be true, it is quite clear that the early adopters of bitcoin stand to benefit most from it. Regardless, it is not too late to get into the trade – this is where relevant and accurate educational efforts come in. Already governments in countries like Thailand have seen the inevitability of bitcoin’s growth in popularity and they are taking steps to provide citizens with correct information regarding the decentralized digital currency that has taken the world by storm.

In 2014, as part of a class project, an Alaskan schoolgirl distributed 30 papers wallets containing bitcoin to her classmates – something that at the time just seemed to be an attempt at wowing her classmates with the wonders of bitcoin. The girl reaped more than just an excellent grade from the science fair project as she also pocketed 3.5 BTC which is currently equivalent to a neat sum of dollar bills.

With the help of her pro-bitcoin parents and some bitcoin donated by members of r/bitcoin, she drew up an information stand that had information about what bitcoin is, how it works as well as how it can be used. This earned her the first place prize at the Interior Alaska Science Fair. As of 2014, bitcoin was equivalent to about $850 which therefore implies that the kids who were smart enough to retain their wallets are now thousands of dollars richer.

The girl’s mother is very proud and regularly provides updates on her daughter’s legacy with the latest one saying: “Little Alaska group of crypto kids talking about decentralized banking, forks, and the current issues with bitcoin now when they hang out. All from this little science project in 2014.”

Bitcoin education is becoming rather important – as important as teaching young people about money and allowing them to develop a sense of financial freedom. The story here may seem like a fairy tale especially because of the high price value of bitcoin at the moment but it is always important to incentivize the next generation to develop an interest in cryptocurrency. It is, after all, the future of currency.

Thailand Ends Year with Push for Cryptocurrency Education

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The last week of 2017 has been abuzz with activity especially in the world of crypto. Amidst bitcoin’s crazy price fluctuations as well as the launch of several ICO’s, Thailand also made headlines when the country’s government announced that its major regulators would be teaming up in a bid to educate the people about bitcoin. While this is primarily motivated by their not so subtle worry and speculation of the possibility that bitcoin could be a Ponzi scheme, it is quite clear that the project will go a long way in helping people not to drown in the bitcoin frenzy. At the moment, bitcoin is not a legal tender in Thailand and its central bank issued reminders on the same – however, it should get better soon considering the tremendous efforts that Thailand has been putting into grappling with financial technology through various regulations.

Thailand is among the world’s top twenty economies, an achievement that was made possible by the outstanding GDP it quietly racked up over the years. The country is well on its way to becoming the fintech hub of its region – in fact, this is an official government policy. In the fall, its Securities and Exchange Commission sought out public guidance to assist their efforts to manage initial coin offerings. While this might seem like a move that seeks to choke out innovation, the true intention was to protect Thai citizens from the myriad of scams that have flooded the internet ever since the onset of the cryptocurrency hysteria.

Prime Minister Prayut Chan-o-cha reportedly wants to “educate people about the risks of bitcoin investment after the recent sharp surge in bitcoin’s trading value prompted him to worry that Thais would fall victim to cryptocurrency speculation.” Somchai Sujjapongse, a representative of Thailand’s Finance Ministry will see to this by joining forces with other authorities to educate people about bitcoin. Thais are quite eager to participate in the booming Bitcoin business as indicated by exchange volumes in the country that are at par with global trends.

According to Thai media, “There are 37 bitcoin brokers in Thailand registered on LocalBitcoins, some with more than 1,000 bitcoins in assets. Prices for bitcoin are about 13% higher in Thailand than in the US, a sign of high demand for this cryptocurrency.”

Still, we will just have to wait and see how this goes in 2018. Happy new year!

2017 Poker Wrap Up: Bitcoin, Hackers, and Ransoms

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As 2017 comes to an end we look back at some of the dark forces that afflicted the poker industry all through the year. When it comes to poker, it might still be too early to call it a year even if it is just a few more days to 2018 – it is one of the shakiest businesses in the world and anything can happen at any time. So, let us just delve into the events that shook the poker world most so far;

May’s Hack Jobs

The hackers targeted High-limit poker pros who they left defenseless by seizing control of their phones, Facebook and Twitter accounts. The poker pros who later publicly revealed that they had been the victims of hacking included Cate Hall, Dan Smith, Vanessa Selbst and Vanessa Russo. However, according to poker pro Doug Polk, the poker pros mentioned above were just a tiny fraction of the high-stakes community that had had their personal information stolen by hackers.

“The hackers have infiltrated bank accounts and tried to initiate wire transfers, used credit cards to rack up charges, gotten into Dropbox accounts containing copies of passports, credit cards, and tax returns, and extorted victims using incriminating information found in their email accounts,” Polk said in his popular YouTube channel.

Extortion

This was a result of hacking but this time it is not just individual players who were affected but a whole site – America’s Cardroom. The hacker demanded ransom forcing the site to cancel all ongoing tournaments and refund all player buy-ins in early September. The standoff which lasted for three days, however, played out in favor of Winning Poker Network CEO Phil Nagy who refused to pay the hacker saying:

“We had the attacker get on chat and say I am gonna attack you in one minute and he does the attack, but I will never pay an attacker I won’t pay a ransom, I won’t do it because once you let the bully get your lunch money, he’s taking your money all the time. Once they make you a bit*h, you are a bit*h, and I don’t like the idea of being a bit*h.”

Well Played!

Enter Crypto

Decentralized digital currencies have gained a lot of popularity in poker circles this year thanks to the buzz bitcoin has been creating. Cryptocurrencies have proven in a very short time that they are the key to turning an average poker bankroll into a massive pile of real money. In fact, a number of online poker sites are already supporting cryptocurrency transactions which come with the added advantages of reliability and unmatched processing speeds.

Still, we have to acknowledge the downsides of this particular arrangement by putting into consideration the unpredictable volatility of these cryptocurrencies – case in point, bitcoin. Crypto might be a savior thanks to the exceptional security associated with blockchain technology but a lot of this security is compromised when the decentralized currencies are hosted on centralized networks like poker sites. We wouldn’t that now, would we?

Blockchain Technology Hits Land-Based Casinos

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Very many online casinos have warmed up to the idea of integrating cryptocurrencies to their payment systems with nearly all of them investing millions in the rapidly developing crypto market. While the fact that casinos are embracing bitcoin and other cryptocurrencies should come as no surprise, the rate of its growth has been somewhat overwhelmingly good. TheBitcoinStrip, an international analytic resource, estimates that currently about 60% of transactions in the Bitcoin network can be attributed to bets. It also estimates that the number of transactions made by gamblers every second is now well over the 337 mark. The escalation in the popularity of cryptocurrency in the gambling world is inevitable since gamblers will certainly prefer the security, absence of additional commissions and the unlimited withdrawals that bitcoin offers.

According to SmartPlay.tech the appearance of bitcoin, as well as other cryptocurrencies, is enough to completely revolutionize the casino industry both in the online space and in brick-and-mortar casinos;

“In order to completely revolutionize the gambling industry, it is necessary to integrate new generation technologies such as Blockchain and Lightning Network, which will make casino activities more profitable for the operator and attractive to the player. We have a technical solution based on the ready-made software, which we can offer to big players in the offline market in the form of full-fledged equipment.”

SmartPlay.tech recently announced its intention to unveil to land-based casinos a full line of new SmartBox machines that will connect a variety of games such as bingo, online slots, poker, and blackjack.

Basically, a SmartBox configuration will consist of a touch screen gaming table, a QR scanner for connecting crypto wallets and a terminal that will allow users to deposit fiat money. The most significant highlight of the boxes is the gambling software that they use – it is based on the principles of blockchain technology and has been successfully tested on a wide range of SmartPlay.tech products. Casino operators are particularly very impressed with the model of operational efficiency that the SmartBox machines present, that is, it ensures that profits are always higher than the costs incurred by the casino by optimizing transaction commissions to minimum market prices of a few cents.

The first batch of test machines has already been deployed for closed testing in a land-based casino where the performance indicators of blockchain technology in a real-world gambling environment will be measured. The tests’ deliverables include actual data that will include average spending, game time, turnover, number of players as well as the conceptual portrait of the target customer. If the results are as promising as they seem to be, then full-fledged production of SmartBox machines will commence.