What’s With The Bitcoin Fever In Korea?

The South Korean government has repeatedly mentioned to cryptocurrency traders in the country that cryptocurrency trading is similar to gambling. This is because cryptocurrency cannot be considered as a legal tender or a form of currency because they are not a reliable form of storage. In fact, the South Korean government stated that these are simply virtual tokens. Due to the speculation mania which is ongoing in the country; the South Korean government is even considering to shut down the exchanges operating within their borders. When this announcement was made in January 2018, it shocked the investors, and it causes a price drop in the cryptocurrency market.

Of course, the price drop can’t be attributed to that announcement alone, but there is a reason to believe that South Korea plays a major role in the cryptocurrency market. When the South Korean government made the announcement, they directed this announcement especially to those young and old people that are investing in the cryptocurrency market without knowing the risks of doing so. When this group of people saw the price of cryptocurrencies such as Bitcoin going up, they immediately tested the water by investing in the market without thinking of the consequences of doing it.

 

Young people are the biggest fans

When it comes to cryptocurrencies in South Korea, the biggest group of investors come from young people. For these group of people, they saw cryptocurrencies as a way out so that they don’t have to work overnight and struggle to earn money. It quickly became apparent to them that cryptocurrency could be a way out from their financial troubles. This notion was mirrored across the nation as South Korean cryptocurrency transactions took up nearly 30% of the global cryptocurrency trading.

The average age of people trading in the cryptocurrency market is from the 20s and 30s. On top of that, South Koreans also trade a considerable amount of Bitcoins. Young people also took the chance on trading into alternative coins because they saw potential in making a profit faster compared to Bitcoin.

The reason behind the cryptocurrency infatuation

Young Koreans are attracted to cryptocurrency market for a simple reason. They saw that the cryptocurrency market provided an opportunity for them to have financial freedom. In Korea, the country has suffered from an economic slowdown which resulted in more young people is being unemployed. On top of that, some are overqualified for jobs, and it causes underemployment. The total number of unemployed people in Korea are about 1 million people and 40% of them are young people.

Due to the global financial crisis, young Koreans had to consider how they are going to improve their economic condition. Just about 50 years ago, Koreans were struggling as the generation at that time were very poor. Some of them could barely survive with the food regime provided by the United States and other countries. However, the country managed to turn its economy condition around by its successful economic development policies. As a result of this, Korea quickly turned into a high-tech IT society where nearly every one of its citizen has a smartphone.

Also, parents are more likely to spend on their children’s education to improve economic success and social status within the society. In fact, the average Korean is educated up till the university level. There are plentiful of college graduates within the country which is a result of families wanting their children to have a better life. Despite having a high-quality workforce, the job market has significantly narrowed down which creates serious social problems. On top of that, getting into universities is also increasingly difficult because everyone wants to get into them.

After graduating, graduates find it difficult to find jobs as well because applying for jobs is very difficult. These young Koreans are mostly interested in working at major companies in Korea. Even if they get accepted in the job, the average length of tenancy within the company will only be up to 7 years. Therefore, young people feel increasingly pressured by what is going on as the social structural problem has led to an increase in unemployment.

Then, came cryptocurrencies.

So, you can only imagine what happens when the media started telling stories about people are willing million to billion worth of Korean won from their investments. As young people are increasingly connected to the social media and different type of media platforms, a lot of them caught on the news. In fact, people in middle school also trade cryptocurrencies. A lot of them jumped onto the cryptocurrency trend and traded cryptocurrencies.

 

The Korean government is accepting cryptocurrencies

At the end of 2017, it seemed like the Korean government was going to ban the trading of cryptocurrencies. However, the government made an official announcement that it was determined to implement the blockchain technology to different areas of the country. This includes their electronic voting system, real estate industry, a management system for animal services and an online platform to support youth activities. On top of that, the government is preparing an allocation of funds especially for start-ups that develop a solution for these blockchain applications.

However, something good came out of the speculations which are ongoing in Korea as the Korean government is now implementing the usage of blockchain in their country. Therefore, the government is encouraging the development of blockchain to move from just being an infrastructure for supporting speculative cryptocurrencies to a find more practical applications in real life.

One of the reasons that this change happened was because a lot of young people complained to the presidential office about the possibility of exchanges shut down. On top of that, these young people threatened to object for the ruling party candidate in the next local elections. Moving forward, the next challenge for the South Korean government is how they will build blockchain technologies that can be applied in a useful manner.

This is highly likely to happen given the rapid pace that Korea is capable of as it has one of the highest Internet penetration rates in the world. On top of that, they also have an upcoming 5G communication technology that is going to be implemented in 2019.

 Vocal young Koreans protest against government crypto crackdown

In Seoul, South Korea, the government seemingly hinted that the Ministry is preparing legislations to ban cryptocurrency trading true exchanges. As the government is continuously implementing tighter virtual currency controls, South Korean cryptocurrency traders have a good reason to worry. After the threat to the ruling party that they won’t support the candidate in the upcoming election, the president of South Korea is left in a dilemma.

When cryptocurrencies were introduced much in South Korea, most people were trading at in the US or Europe. However, change came in 2017 when Japan and South Korea officially made their debut into the cryptocurrency trading world. After Japan announced that it recognized Bitcoin as a legal tender, this resulted in hundreds of thousands of Japanese merchants accepting Bitcoin as a form of payment.

South Koreans and their love for Ethereum

Yes, Bitcoin is a major cryptocurrency, but South Koreans have a good relationship with Ethereum. In fact, over 40% of the Ethereum traffic can be accounted to Koreans. The amount of love that Koreans have to with Ethereum is shown when they are willing to pay 40% premium to the rate deal cryptocurrency. It’s not as young Koreans which are infatuated by Ethereum. In fact, they are older adults were looking into investing in the cryptocurrency. One of the reasons that people love Ethereum is that some of them saw that it was too late for them to join in Bitcoin craze. So, Ethereum was the next best thing that they could get into.

Another important reason was that the founder of Ethereum personally met with a lot of Korean cryptocurrency enthusiasts which put a face to the cryptocurrency. Therefore, this inspires the confidence of Koreans with the cryptocurrency space. In fact, a lot of Koreans were lucky to make a lot of money when Ethereum rised in popularity. It was also largely influenced by mass media that help step Ethereum’s rise in value.

Why is Korea suddenly so interested in cryptocurrencies?

Although there is no easy answer for this, there are several possible scenarios that have made the cryptocurrency fever take over the country. Some of the people trading the cryptocurrency market largely come from wealthy Korean business owners that are trading using their parent’s money. Also, upper-class Koreans upper-class are discovering the potential profits of investing in the market. On top of that, the investment options within Korea have decreased over the past few years. In fact, the real estate market has been a safe option for Koreans to invest in but it has been increasing that it becomes unaffordable for the average Korean.

Therefore, when Bitcoin came around, it was seen as the opportunity for Koreans to take advantage of its high volatility. Therefore, high-risk traders started flooding the market and pouring the money into the Korean Bitcoin market. Once people started seeing this happening, everyone else follows.

Where is Korea headed?

As of now, it doesn’t seem like the infatuation for cryptocurrencies is going to cool down anytime soon. However, the amount of premiums on cryptocurrencies in South Korea exchanges have decreased in the past few months. Korean still take up a huge portion of the cryptocurrency trading market and the love for Ethereum is still strong among Koreans. In the future, it may be possible for Korea to see blockchain applications in their daily lives as the government is funding this more blockchain start-ups. As more people know about the potential of the blockchain, it will undoubtedly increase the number of investors in the cryptocurrency market.

 

A Brief Guide To Cryptocurrency Taxation

It looks like 2018 will be another phenomenal year for IRS because they will be able to tax cryptocurrency gains. This is even more so since Bitcoin had its moment in the spotlight and investors gained a fat return from in 2017. The IRS treats cryptocurrency as a property. Therefore, there will be capital gain implications. The best way to minimize taxes is to buy and hold them for more than a year. This also serves to reduce the speculative action within the market.

Undoubtedly, Bitcoin had a great time in 2017. The rise in the price of Bitcoin towards the end of 2017, was the highlight of the cryptocurrency world. More people are mining, spending, airdropping and also trading their cryptocurrencies. All of these transactions are most likely to be taxable for United States tax purposes.

Investors should be on the lookout for steps on how to file their tax returns for the cryptocurrency gains. In this regard, taxpayers should think ahead of time to file their tax returns and take note of all the cryptocurrency transactions that they engaged in. If you wait until the announcement is made, it may be too late for you to try and file everything.

This will help them to stay ahead of the IRS  to do their duty as law-abiding citizens. Moreover, the IRS is lenient on taxpayers who volunteer to pay their taxes on their own. Therefore, being vigilant and doing some extra work now will help you to stay ahead of your taxes.

In regards to taxing cryptocurrency, hundreds of investors have come forth to report their cryptocurrency gains each year since Bitcoin’s launch. However, it is suspected that many cryptocurrency users are still trying to avoid paying taxes by not reporting their cryptocurrency transactions.

Despite this, one of the reasons that people are hesitant to pay taxes is that the IRS hasn’t provided much information on how people can tax Bitcoin. In the US, cryptocurrencies are defined as property. Therefore, any transactions that traders get into will be subject to capital gain taxes. This has been a matter of concern especially for traders that did not keep details of all their transactions.

Today, there are nearly 2000 alternative coins in the market. Bitcoin isn’t the only cryptocurrency in the market albeit being the most popular one. Therefore, this article applies to the taxation of all cryptocurrencies. Let’s take a look at specific cryptocurrency transactions and see what the impacts on taxation are.

What if you trade cryptocurrencies on an exchange?

When you trade your cryptocurrencies, you will be subject to capital gains taxes. However, making losses on your transactions will reduce your taxes.

What if you mined the coins?

On the day that you successfully mine Bitcoin, it will be considered as an ordinary income which is equal to the fair market value of the coin.

Does swapping from Bitcoin to another cryptocurrency incur taxes?

In cases where you used Bitcoin to swap it into another alternative coin, this is also taxable. In fact, the taxation system views it as property being sold which will then subject you to capital gains tax. Similarly, losses will reduce your taxes.

What if you receive wages or payments in cryptocurrency?

If you receive your salary or any sort of payments in cryptocurrency, it will be treated as an ordinary income.

What if you received a cryptocurrency from an Airdrop?

This will be treated as an ordinary income on the day that the airdrop happens. When it is sold or exchanged, it can be considered as a capital gain.

What if you spent your cryptocurrency at a store?

This is a taxable event, and you may have gains or losses.

It is most likely that the IRS will be using the first in first out treatment. However, investors have the choice of using which method of taxing their cryptocurrency income for now.

 

How to reduce taxes: hold your cryptocurrency in the long-term

The best thing for you to do to minimize being taxed in cryptocurrencies is to hold them for more than a year. This will make you a long-term cryptocurrency traders. Longer term gains will be taxed at a reduced rate compared to short-term gains. Given the volatility of cryptocurrencies, a lot of people may not be going down this path as they want to cash in on the profits that they obtained. One year may be too long to wait. With exchanges, things get more complicated because they are not regulated by the IRS. Some exchanges don’t allow transactions in terms of dollars. Instead, it is a prerequisite for the trader to own cryptocurrency to do transactions on their exchange.

Hence, it is recommended that you keep track of all the cryptocurrency transactions that you did on an exchange or your own. This will help you a lot when you’re trying to file your taxes. The necessary details that you need to include for your file keeping are the date that you entered into the purchase, the value of the coins at the time exchanging and also the sales that you receive. You can also use software can help you to calculate your gains and losses from cryptocurrency transactions.

Why The Cryptocurrency World Needs More Brilliant Minds

The cryptocurrency world is moving so fast that a lot of people cannot keep up with it. As a result of this, talent development needs to be upgraded in the cryptocurrency space. In fact, cryptocurrency developers and entrepreneurs within the space itself are concerned that the industry is lacking the necessary talent needed to bring the next level of change. With the rate of change that cryptocurrencies are in, the skill sets available today may no longer be relevant in just a matter of a few years. Although so, there have been sources denying that the cryptocurrency space lacks the necessary talent.

The main concern is that those who are capable of filling in these roles may lack the necessary education or connections to reach the right company. Is it possible for the cryptocurrency space to have more capable hands running these powerful innovations?

In a recent survey, it was revealed that most Bitcoin investors are anywhere between 18 and 34 years old. Therefore, this range of age provides a good idea of people who may have the potential to increase the value within the cryptocurrency space. In this regard, cryptocurrency companies and blockchain start-ups want to recruit talented individuals that can develop the technology that the company is building. Understandably, these individual don’t have to have an extensive level of understanding in cryptocurrency but it would be great if they could integrate cryptocurrency components to the theories that they have previously learned. Therefore, this will create a more innovative workforce that can enable the creation of a smarter cryptocurrency space.

In the cryptocurrency industry, there is a possibility that the technologies it creates can increase the accessibility to virtual education opportunities. Individuals who lack the necessary education for cryptocurrency now have access to different platforms around the world which are allowing them to learn in detail about cryptocurrencies and specific niche. This will benefit them when they want to search the job within the space. The increasing availability of e-learning utilities on the Internet can create a more educated workforce in the cryptocurrency space.

Therefore, anyone looking to join the cryptocurrency workforce should consider to go online and learn more about the space through e-learning. On top of that, these e-learning platforms can teach individuals a new skill that may not be available on a huge scale in the cryptocurrency world.

Companies fighting for talent

As the blockchain continues to grow at a fast-paced rate, companies can expect that the regulators around the world will intervene in their daily operations as more countries are trying to regulate the space. On top of that, there is a proliferation of blockchain and cryptocurrency within the market which only means that there is an increased amount of talent required to handle these innovations. Leadership roles within the space are important as they determine the future direction of a company or a cryptocurrency.

When it comes to the latest war for talent, there are several factors that businesses have to take into account. One of the things is that they need to consider the impact on the current global labor market and which professional skills can address the gap in the market today. In nations that are resisting the growth of blockchain in cryptocurrencies, they may be losing out on an important competitive advantage that can propel their economy against other economies. As more top talent are looking to enter into this industry, they will simply move to another industry where they can provide their skills.

Nations also stand to lose out from not adopting the use of blockchain and cryptocurrencies into the country because they won’t be able to collect taxes from the corporate and personal income tax is that these companies provide. The implications of not adopting this industry into a country are obvious because the top talent will naturally go to another country or another region in which their talents are valued.

For the individuals, it is important that they equip themselves with the necessary skills to be appealing to cryptocurrency and blockchain companies. For instance, some companies are searching for specific skill sets in an individual that combines the usage of blockchain and cryptocurrencies in their resume. It is no surprise that larger corporations such as Starbucks, Google and Amazon are looking into cryptocurrencies to see where they can take this innovation with their company.

On top of that, there are already large corporations are approaching individuals about the possibility of hiring them into a cryptocurrency were adopting position within their company. On top of that, knowing about cryptocurrencies is also an added plus when working with companies as more of these corporations want to explore the capability of this innovative solution.

So, where are all the talents in cryptocurrencies concentrated?

There is a clear problem within the cryptocurrency market today. The blockchain start-ups and companies that want to incorporate the usage of blockchain need someone to steer the direction where cryptocurrencies and the blockchain can go within their company. Therefore, this creates a demand for people who understand the nature of this innovative solution to be incorporated into the company. There are top consultants in major global consulting firms that have a deep understanding of blockchains and cryptocurrencies.

Despite this, venture capitalists are favoring the someone who is experienced in another industry which has dealt with the application of blockchain firsthand. Consultants are generally not favoured because they have not had a personal experience with implementing blockchain solutions. Therefore, companies need to find a balance between someone with experience enough in finding someone who they can rely on for blockchain implementations within the company and also across industries.

With the increased amount of demand for these talents, it is no surprise that some of the main US universities such as Princeton, Duke, and MIT have introduced blockchain courses for their undergraduates. For corporations, there are already adopting nonexecutive advisory roles to assist them in their day-to-day operations and provide valuable input about the technology.

Finance experts moving to crypto

There is also a good reason to believe why the cryptocurrency space can take over the payment sector. This is because finance experts are quickly moving into the cryptocurrency industry. Although this is not mainstream yet, it is already a trend that is ongoing in the market. Therefore, financial institutions have another thing to worry about because the cryptocurrency industry is taking away their best assets in the business to develop something that can potentially disrupt their business model.

The good news for people who are searching for a job in the cryptocurrency world is the fact that the opportunities in the market are not very difficult to come by. In fact, most companies tend to post vacancies or new job rules to people. As regulation increases within the cryptocurrency space, there will be an increased demand for specific job roles which will focus on legally be and compliance. Therefore, there will always be other jobs in the cryptocurrency market the site those that focus solely on finance sector or technology called aspects.

For finance graduates, it is good news for them because most cryptocurrencies companies are searching for people who have the expertise. In fact, the accounting and investment banking part of their firm is highly important for finance graduates to fill.

A good example of this shift for finance experts to the cryptocurrency world comes in the form of a recent announcement that Coinbase made. In fact, they hired an employee from the New York Stock Exchange. By doing this, they increase the legitimacy of their platform as well as look to the prospect of maturing the cryptocurrency industry.

Blocktower, which is a cryptocurrency hedge fund has attracted the attention of institutional investors. As hedge fund investors are not exactly interested in the cryptocurrency space, this is a huge programme. Unlike what some people may think, the finance sector and cryptocurrency can coexist peacefully. In fact, we will still require a centralized bank institution for years to come as cryptocurrency is nowhere close to being a payment processor or an established financial system like central banks.

How can you secure a job in the cryptocurrency market?

One of the ways that you can do this is by taking up classes and also skill development opportunities to make your resume seem appealing. However, this has been a source of concern for people in the tech recruiting world. As more blockchain companies and tech companies are searching for people to hiring. Therefore, they get flooded with resumes in which it is filled with inappropriate candidates. On top of that, contacting references which are available on the resume is also highly tedious because job candidates can be dishonest in their job application.

One important tip when sending your resume is ensuring that it will fit in into one whole page. Most of these companies already have a lot of resumes to go through. In fact, a lot of companies are already incorporating the usage of blockchain to keep track of the credentials and records of an individual. Therefore, blockchain opens up an opportunity to create a new type of resume that automatically records the educational credential and professional requirements of an individual without having to go through it repeatedly. Therefore, job seekers can share information with people who are seeking for their skill set.

Using micropayments to source talents

AI Gaming is another platform which enables education and collaboration. For any users who have a certain level of artificial intelligence and coding experience, they can participate in the crowdsourced challenges that the platform has to solve the problems generated by partner companies. This is another way that you can improve your knowledge in the cryptocurrency world, and an incentive for you to do this is because the success of completing the problem will enable you to receive a crypto payment.

This brings about the aspect of micro-payments that cryptocurrencies can do so well. In fact, the blockchain ledgers available within the platform can keep track of people are providing good solutions within their environment. Therefore, these blockchain records can record contribution levels of each of the user. In the blockchain community, the presence of micro-payment can be very important. This is because a company may not be able to afford one developer to tackle a particular problem that they are having. Therefore, micro-payments present a solution for them to open up space for people to solve a particular problem by receiving a one time payment for it without having to commit to the company.

Therefore, the aspect of micro-payments can enable blockchain start-ups to crowdsource for solutions from people all around the world. As the process of hiring people can be very expensive, having a crowdsourcing solution for participation will enable the company to receive a diverse amount of solutions for their problem and even allow beginners to test out their knowledge in the cryptocurrency world

Does EOS Live Up To Its Hype?

Based on the market capitalization of cryptocurrency, EOS ranks at the ninth place. It has recently reached the valuation of $6 billion with the corresponding price of $8.15. For a cryptocurrency, EOS has reached an impressive feat because the market is currently in a bearish mode. In fact, EOS is proving to be a strong contender for other cryptocurrencies out there because it has shown relative stability through this turbulent period.

EOS was created by Block.One which is a blockchain start-up based on the Cayman Islands. The EOS platform aims to provide a decentralized my contract enabled platform that will make it easier for developers to build their decentralized applications. In fact, many have deemed EOS as a platform that will enable developers to do things they can’t do on the Ethereum platform. This is true to some extent because EOS is offering a fundamental solution is to flaws in issues on the Ethereum blockchain.

EOS is a highly unique cryptocurrency because it utilizes proof of stake which is a technology that uses less energy for mining. On top of that, they are going to be offering the platform with no transaction fees at all. At the moment, there has been an internal audit done on their system which proved that the platform could take up to 1000 transactions per minute. Despite this, the team believes that the platform will be fully ready to take up hundred thousand volumes per second. It also offers a parallel scalability which comes in handy for developers.

The EOS blockchain supports the process of creation verification of several decentralized applications. The proof of stake protocol that the platform adopts will assist in the decentralization of independent organizations. Dan Larimer which is a chief technical officer of EOS has been fully credited as the mastermind behind this concept because he has massive experience with cryptocurrency algorithm. On the EOS software, users can also expect to utilize the new blockchain infrastructure which allows parallel and horizontal scaling. On top of that, EOS also offers users capability to authenticate any use the database to schedule several pounds across the platform. Therefore, the result of EOS is a highly integrated blockchain infrastructure that is useful for developers.

For developers, they may consider EOS as a possible platform for them to develop their ideas and there are no transaction fees, and there is a quick implementation of decentralized applications. Since the creation of Bitcoin back in 2008, this has created opportunities for the blockchain technology to be improved. Therefore, the EOS developers believe that is important to generalize the usage of the technology by diminishing the transaction fees and also providing widescale support throughout the platform.

Despite this, there are still critics that are analysing the potential of EOS within the cryptocurrency space. Therefore, the capabilities of EOS has gained huge attention especially from venture capitalist and large corporations that are interested in the blockchain. In fact, there have been several large-scale partnerships created with EOS which makes it on its way to becoming one of the most powerful blockchain enabled platform.

One of it comes from a cryptocurrency exchange called Bitfinex which recently announced that they would establish a decentralized exchange which will be based on the EOS blockchain. Before you pledge your support for EOS, it is important to understand several key features of the platform.

  • It has been accused of centralizing its operations

In the cryptocurrency community, it is important to analyze the developer behind the creation. Underlying the creation of EOS is a man called Dan Larimer. He is one of EOS developing team member and he is popular in the cryptocurrency space, but he has an important point to make. It matters a great deal for cryptocurrency members to know more about an individual will create a cryptocurrency because their vision is reflected in their creation.

 

When asked to explain more about EOS to the cryptocurrency community, Dan stated that he had no time to explain everything to people who don’t believe in his idea. However, the cryptocurrency community disagrees with the notion brought about by Dan Larimer because the cryptocurrency is all about initial coin offering and creating a community around it. On top of that, EOS is a very new coin any requires the support of the community around to provide feedback and create a solid community for it to grow.

Therefore, cryptocurrency enthusiasts have looked into Dan Larimer’s career very closely and found out that he had two very successful products which are Bitshares and Steemit. In fact, these are his creations before he went on to create EOS. So, people think that Dan brought his capability from his previous creations into EOS because his track record is good. A lot of investors think that Dan can change the cryptocurrency space. However, we may have to think again. In the world of cryptocurrency, it is important that decentralization is a key feature to any coins being released. This is the reason why privacy coins such as Monero and Zcash are gaining mainstream acceptance because it protects the identity of the user’s until the end.

The whole point of the cryptocurrency world is that nobody can gain access information about every other user. The main concern that the cryptocurrency community has about EOS is the fact that it utilizes a proof of stake mechanism. Using this method, it brings the number of nodes which are needed to do calculations to only 21 nodes. Unfortunately, this means that the cryptocurrency could be centralized. For cryptocurrency enthusiast, this is bad news.

Ethereum, which is a strong contender within the cryptocurrency space says that EOS is completely centralized. In a normal cryptocurrency system, the nodes required are infinite, and there is no fixed number. Therefore, it is clear to see that EOS may have some problems there will be upcoming in the future. However, all of this conversation about EOS makes it a much more interesting space for the cryptocurrency community as controversy thrives in the space. Therefore, you need to make your own choice about whether you want to believe in a cryptocurrency that utilizes only and number of nodes compared to others.

  • It has brilliant minds in its team

Perhaps one of the greatest supporters of growth in EOS is the fact that it is being spearheaded by a visionary team that has a proven track record of making ideas into execution. For instance, the CEO of EOS which is Brendan Blumer had started selling virtual assets even when he was 15 years old. In fact, he has been actively involved in the blockchain industry for the past four years. As we mentioned earlier, the chief technical officer, Dan Larimer is an experienced blockchain enthusiast that has founded several of his blockchain projects.

  • Highly capitalized team

EOS is one of the blockchain projects that is possibly the richest one in the world in terms of funding records. Even before they started out their ICO, they already have a huge amount of fun prepared for an investment. All of the funds that they receive goes back towards progress in the community and the committed $1 billion worth of funds which will be used to support people that develop projects on their ecosystem. On top of that, the fund is managed by a team of venture capitalists in different parts of the world to attract more people to join in the EOS project.

  • Strong community

For a cryptocurrency to be successful, it needs to have a strong community built around it. This typically signals an in-depth commitment that is instrumental to the success or failure of the blockchain project. On top of that, EOS already have a strong global community which is pushing for the global adoption of the platform. It is creating hackathons which are hoped to incentivize the growth of the community. At the moment, EOS has about 131,000 active followers on Twitter.

  • Can process millions of transactions

On top of having all of these features on their side, an important part of succeeding in the cryptocurrency world is also able to prove the worth of the technology behind a coin. Therefore, EOS excels in this part because they can prove the superiority of their technical features compared to their other rival cryptocurrencies. However, it currently lacks in the smart contracts department. Despite this, EOS remains optimistic that they will be able to process millions of transactions per second. The transaction fees which are being removed is also a huge factor which attracts developers to supporting their platform.

 

 

Cybercriminals Are Targeting Cryptocurrencies

It seems like just a few years ago that cryptocurrency was confined to the world of dark web market and extorting ransom payments. From there onwards, the progress for a Bitcoin have been amazing. It has made impressive strides towards achieving legitimacy within the recent years. As a result, more cybercriminals are following the trails of these Bitcoins to have a shot at stealing them from people. In the future, the growth of Bitcoin is expected to get a lot better. In the future, the banking industry stands to benefit over $1 billion dollars worth of business value from the use of blockchain.

However, this is a double-edged sword for investors. On the one hand, it advances the need for people to have access to a decentralized method of transaction. On the other hand, the continued endorsement of cryptocurrencies will only increase the security risks associated with digital transactions. This is on top of all the risks that are shouldered by investors when the enter into the cryptocurrency market. Fortunately, there are some ways that organizations and consumers can keep the cryptocurrency investments safe.

How did Bitcoin rise to fame?

If you had only known Bitcoin three years ago, the reality is cryptocurrencies have been around for almost a decade. Bitcoin is one of the many cryptocurrencies, which are in the market today. Understandably, Bitcoin is the most popular cryptocurrency because it’s the most widely used currency. It was launched in 2019. Initially, its value did not increase as much as it did last year, but it shot up in value a few years after it was released. The main reasons why people are attracted to this cryptocurrency because it’s easy to use and it also allows anonymous transactions.

Unfortunately, these are also the same reasons that cybercriminals are interested in cryptocurrencies. Cybercriminals have been using cryptocurrencies as a method to extort people’s money. None of the earlier electronic currencies ever achieved wide adoption but when Bitcoin managed to do so, they saw an opportunity to gain a quick profit. Suddenly, a ransom demand could be made in Bitcoin with a reasonable chance that the victim can figure out how to pay. In fact, the industry has seen an increase in the attempts to hack an attack infrastructure that contains cryptocurrencies. This directly coincides with the period that Bitcoin shot up in value.

Although the dark past and the recent volatility with cryptocurrencies are well known, what is less known is that it has a growing acceptance among banks and other financial institutions as consumers get involved in the cryptocurrency market. For instance, platforms such as Coinbase allow people to pay their apartment rent using Bitcoin.

Meanwhile, another significant trend around cryptocurrency adoption is from large investments from fintech companies that are trying to hedge against future ransomware attacks. Ransom attackers always asked for ransoms in cryptocurrency, so these institutions always buy them earlier in large quantities at lower prices.

Hackers becoming smarter with stealing cryptocurrencies

When it comes to cryptocurrencies, major ones such as Bitcoin require mining to maintain its infrastructure. To mine Bitcoin, this requires an enormous amount of computing power. In fact, countries around the world have warned against the warning mining of Bitcoin because it may cause residential areas to lack power, especially for those that mine in smaller cities.

As a result, business networks have become a popular target among cryptocurrency hackers. The cybersecurity research team recently identified, tracked and dismantled a massive botnet. The botnet included individual companies with thousands of compromised endpoints, all working surreptitiously to mine cryptocurrency and spread the infection further across the corporate network.

Cybercriminals are always quick to follow the money, especially with the exploding popularity of cryptocurrencies. They did it in a few ways. For isntance, Russia, China and North Korea have dedicated teams that run illegal cryptocurrency mining rights. Among the targets include Android phones and Windows servers.

On top of that, hackers are also using email pishing as a method. Using this method of hacking others, these hackers will try to steal the private keys to a cryptocurrency wallet to enable them to have access to cryptocurrency funds. On top of that, criminals are also targeting other cryptocurrencies besides of Bitcoin. For instance, Monero and Ethereum offer a greater privacy compared to Bitcoin which makes it a favourite among cyber criminals.

How can cryptocurrency traders protect themselves?

As we are facing intense attacks from people targeting cryptocurrency investors, here are some precautionary measures you should follow. It is important that any consumers of cryptocurrencies make it a priority for them to ensure their credentials remain intact. If you are investing in an ICO, make sure that the address someone gives you matches the one available on the official website. To be sure, you should always contact vendors through their established emails especially when you receive an unexpected notification from the exchange and what services. On top of that, online wallets should never be used to store cryptocurrencies.

  1. Implement secure technology solutions

In the organization, make sure that your systems are updated and patched as this helps to make sure that systems in computers are constantly fixed, and the security is being strengthened after each update. Technology solutions play an important role as it stops cryptocurrency related email attacks before they reach their intended victims. If your computer is working slowly, this can be a minor infection.

  1. Educate your workforce

If your business deals with cryptocurrencies, it is not enough to warn your workforce about the risks. In fact, you let your staff know how to identify and report potential threats. You can’t just rely on technology as it can be manipulated. Instead, you should teach your staff on how to maintain a more secure work environment.

  1. Forecast potential targets

Cybercriminals don’t always go for the big shots in the market. Although the top management of your company’s most probably going to be targeted by those were most unsuspecting are also targets. Therefore, teach your staff how to handle sensitive information that deals with cryptocurrency information.

Concluding remarks

Think of cryptocurrencies as cash. The only difference is that it doesn’t have a physical representation and it is In a wallet. However, as it doesn’t have physical representation, any losses you make will be less likely to be detected and impossible for you to retrieve.

As the number of crimes in the cryptocurrency space is increasing, you should be smarter about how you store your cryptocurrencies. On top of that, you must know the financial risks and security risks that you are getting yourself into by involving yourself in the cryptocurrency space. Be a smart investor and research on the best ways you can protect your cryptocurrency assets.

Is Bitcoin A Property Or A Currency?

As cryptocurrency grow more popular, the IRS and other government agencies will become more adamant in wanting investors to pay taxes. There is already an increased level of scrutiny within the cryptocurrency industry. Therefore, if you made a considerable amount of return on cryptocurrencies last year, you must consider filing your tax returns. Don’t think that you can run away from paying taxes because the US government is asking for exchanges to provide information about investors that made more than $20,000 during the financial year.

With cryptocurrencies, governments around the world are in limbo. The anonymous nature of cryptocurrencies makes it easy for people to go on exchange as without having to provide identification. However, this was only available during the initial state of cryptocurrency introduction to the world. After it got uncontrollable, the government made compulsory for people to identify themselves if they want to open a cryptocurrency account. In fact, this is one of the ways that the government ensures people will pay their taxes.

As we move into 2018, more governments realise that people are not filing in the tax returns that they receive from the Bitcoin boom. According to Credit Karma, only 0.4% of the total tax returns were reported for cryptocurrency transactions. Therefore, there is a huge discrepancy considering that the market capitalization of the cryptocurrency world is now nearing $1 trillion. According to the US government, cryptocurrency is defined as a property and cannot be a currency. This is for taxation.

As a result of this ruling, any gains or losses you make on your cryptocurrency transactions must be reported. On top of that, if you exchange your currency for another currency, you will have to pay taxes on the gains that you made. Hence, you will have to identify every virtual currency transactions that you made, how you acquired it and the profits that you made from it. If you trade cryptocurrencies on a daily basis and you didn’t keep up with your transactions, this process can be a nightmare.

Cryptocurrency investors believe that if they change a cryptocurrency from one to another cryptocurrency, they will not be taxed. However, due to the tax reform, this possibility no longer exists. Coinbase which is the world’s most popular cryptocurrency exchange losses in a legal battle to defend their customer’s records. Therefore, they are required to provide details about their US users.

What about cryptocurrency miners?

If you want to trade cryptocurrencies, you will still be taxed. Mining is a process that helps the blockchain to get maintain and is miners at new blocks to the blockchain. On top of that, if the mining activity constitutes a trade or business, the mining activity will not be undertaken by the taxpayer as an employee.

Bitcoin mining is no longer something foreign in the cryptocurrency world. In fact, it is well-known that Bitcoin miners use a lot of computing power to mine cryptocurrencies. In this area, some practitioners disagree with the approach that IRS is implementing to tax miners. They argue that just because somebody finds the precious metal or asset, it doesn’t mean that it is a taxable event. For precious metals to have value, they have to be sold first. Through the tax reform, even if the money is received into miners online wallet, it can be considered a taxable account.

People further argue that this may not be the right move. When there is an exchange, there need to be two parties. However, when a Bitcoin miner receives the coin, all this does is expanding the number of that coin in circulation. Therefore, no gain is being made until the miners sell the Bitcoins. This is a major flaw in the taxation system that needs to be addressed by the IRS.

Breach of privacy

Previously, cryptocurrency traders believed that they would have complete privacy because they are protected by the blockchain. However, they forgot the fact that the government can still subpoena the exchanges to provide them with necessary information about people who engage in transactions online. As a result, the IRS now has information of all of these traders.

The next step than the IRS is doing will be giving out warnings were noticed as to why the person didn’t report the transaction. Subpoenas were given to companies and promoters were involved in issuing cryptocurrency. One of the SEC’s main concern at the moment is to protect the interests of investors from scammers in the ICOs.

Why Are Cryptocurrencies Becoming So Popular In Estonia?

Back in 2011, Estonia was the poorest country in the Eurozone. In fact, the people in Estonia were struggling to increase their economic development. Fast forward in 2018, it is at the forefront of the world are one major reason. The company boosted its economic growth using cryptocurrencies.

On top of that, this region has one of the lowest taxes and friendly business environment which pushes the growth of the cryptocurrencies industry. If you are in Estonia, it’s easy to find a wireless connection on nearly every street. With these factors, almost any business would want to be set up their business in this country. Businesses that want to set up shop in this country only has to register online. Using their e-residency registration program, it will take half an hour to complete it.

This registration process ensures that the business will remain compliant with the taxes, banking and covers the whole process of business incorporation. Things are looking good for Estonia since it embraced cryptocurrencies in early 2017. Even when it did not embrace cryptocurrency before 2017, it did not go around to overtax people that hold cryptocurrencies. Any cryptocurrency traders and businesses within Estonia will not be subjected to the VAT tax.

Only cryptocurrency exchanges are regulated in the crypto space. It is the main reason why it isn’t something unusual to see a lot of cryptocurrency mining companies within Estonia. They are freely operating within the business-friendly environment of Estonia. On top of that, the cost of setting up your business in this country is also low. Also, they do not restrict the business based on nationality. For the cryptocurrency investments you make, there is no limit on the amount that you can make. Also, cryptocurrency mining companies like Estonia because it has low electricity rates.

How is Estonia’s relationship with initial coin offerings?

In the country, initial coin offerings are not regulated as much as any other country. In fact, the Estonian government has expressed their plans to launch a state-sponsored initial coin offering which increases legitimacy for initial coin offering within the country. Their cryptocurrency would have a name of Estcoin in which, it will help to promote the country is the residency program.

This is great for cryptocurrency developers who are looking to launch an initial coin offering, but it is not allowed in their own country. Hence, this has resulted in many cryptocurrencies start-ups registering in Estonia and running an initial coin offering there.

How is the legal framework in Estonia?

Estonia’s legal framework was built with the purpose to attract investors globally. Of course, it has one of the most attractive programs which is in the e-residency program. It makes things easier for people that want to move their operations to Estonia as you can get incorporated for an affordable price. As a result, many small blockchain start-ups call Estonia home.

However, this country has recently clarified that they will regulate the initial coin offerings to prevent money laundering from happening. Understandably, this move was anticipated from Estonians as other governments around the world are tightly regulating the initial coin offering space due to allegations of it being used as a financing method for terrorism and many other criminal activities. The last thing that Estonia wants to do in the cryptocurrency environment is to encourage more criminal activities by not regulating the space at all.

How are the legal authorities in Estonia react to cryptocurrencies?

For most blockchain start-ups, they need to have a good relationship with legal authorities. The reason why Estonia is such a favorite among cryptocurrency enthusiast is that the government is highly approachable and they are willing to talk with the cryptocurrency companies. As long as the company is following the country’s rules, the regulators in Estonia are willing to communicate with them face-to-face. Hence, for any blockchain start-up, it is important to have the support from the government to ensure that they will operate smoothly.

What about the tax policy?

Among all the countries in Europe, Estonia offers one of the most competitive tax policies. In fact, none of the cryptocurrency subject investments are subjected to VAT tax. However, businesses in Estonia do have to pay normal business taxes. Anyone who wants to launch an ICO in Estonia will also find this country highly favorable because their offerings will not be taxed by income taxes which makes Estonia one of the best places in the world to create an ICO.

 

 

How much would it cost to run a business in Estonia?

It does not cost as much as any other country to start a business in Estonia. Also, this is a good reason for blockchain start-ups to start businesses within Estonia. As we mentioned earlier, the cost will add up to roughly €4500 in total. Also, Internet connection is available everywhere.

Thanks to the low cost of running a business in Estonia, many businesses are preferring to work in the country as compared to other countries which may have cheaper energy, but higher taxes. For instance, China was the ideal country for start-ups. However, as the Chinese government is becoming more stringent with their cryptocurrency policies, more people are moving to Estonia.

Does Estonia have any competitors?

Besides, Estonia, there are several other countries which also have similar advantages to Estonia, which makes them highly appealing to blockchain developers or any cryptocurrency enthusiast. One of these countries is Switzerland. If you know about Ethereum, this cryptocurrency originated from Switzerland. One of the best features of Switzerland is it has minimal regulations with the blockchain space.

Australia is another country company which is appealing to blockchain developers and also start-ups. That said, the cryptocurrency regulations aren’t exactly minimal, but the country has shown their support for the blockchain industry.  Hence, cryptocurrency start-ups are seeking to incorporate their business in the country in large numbers.

Among other countries that have shown their willingness, the blockchain industry in Canada as they offer cheap electricity. Also, South Korea is a strong contender in the cryptocurrency market as they contribute to a large global cryptocurrency trading volume. Also, the United States has extremely tight regulation on high energy costs, but they are still open to initial coin offerings and blockchain companies.

Concluding remarks

Today, we see more companies and governments around the world, loosening their stance on cryptocurrencies. Despite this, there are few countries around the world can say that they have implemented the things the way Estonia has done to boost the economic growth. With Estonia, the government supports cryptocurrency or blockchain start-up companies which are highly important as companies want to operate with a peace of mind. That said, we can expect to see more cryptocurrency companies making their way to Estonia.

Can Bitcoin Find A Way To Reduce Its Intensive Energy Mining Needs?

Cryptocurrency mining is quickly causing the price of electricity in small towns to go up. In the future, is there a possibility that Bitcoin would be less energy intensive or will the future of cryptocurrency be found in another currency? David Bowman is a Bitcoin miner that has been setting up shop since 2014. He runs his mining operations in New York in a small city located upstate. If he were to set up its operations somewhere else, he wouldn’t have raised red flags. However, his cryptocurrency mining business has been the center of a growing energy debate within the city.

Bitcoin was initially created in 2009. It is supported by an underlying infrastructure called blockchain. One of the reasons that people were highly supportive of Bitcoin was that it does not require a central authority to complete the transactions. As such, the person who is required to maintain the transactions on the blockchain is called a miner. In return for maintaining the blockchain, miners will be provided with Bitcoin. Miners need to have a high computing power to solve the mathematical algorithm within the blockchain.

As Bitcoin becomes more popular, so does the practice of mining. Surely, the creator of Bitcoin never imagined that people would be creating mining farms which have dedicated hardware simply to mine Bitcoins. Gone were the days when people could mine cryptocurrencies by using a laptop. Today, the mining of cryptocurrencies require Application-Specific Integrated Circuit (ASIC) hardware which is special hardware made to mine cryptocurrencies. In fact, the price of graphics cards has been increasing globally due to the increased demand. Today, mining cryptocurrencies are quickly becoming an arms race.

The race for the reward

The Bitcoin system works by providing cryptocurrencies to the miner that can solve the complex maths problem. Anyone who can successfully create a block of the transaction will be rewarded with cryptocurrency. However, many criticised this action because it takes up too much electricity and it can be an unsustainable operation. In fact, some even argued that Bitcoin is in a bubble and is waiting to crash.

With the value of Bitcoin fluctuating, the increasing prices of the Bitcoin brought investors together to spend millions in the pursuit of mining Bitcoins. However, the byproduct of this activity is a massive mining operation that takes up too much energy.

How much energy does Bitcoin use?

When it comes to Bitcoin’s energy use, this is a highly debated topic. The global mining revenue is estimated to be anywhere around $7 billion. Meanwhile, the cost of running these mining firms ranges around $3 billion. This is the exact reason why people are willing to mine cryptocurrencies.

Bitcoin is an energy-intensive infrastructure. Now, we have to figure out where this source of energy is coming from and whether these miners are paying their fair share of the system costs. You will be surprised at the length of these miners are willing to go to reduce their operating costs. For instance, miners are willing to move to places with colder climates such as Switzerland to set up their mining operations. European countries are popular destinations for miners to take advantage of the low renewable energy costs. Meanwhile, in China where Bitcoin mining is increasingly rampant, miners are utilizing the cheap coal energy source.

If estimates are right, most of the world’s power consumption from Bitcoin mining originates from China. Miners have an economic reason for moving to China. The fossil fuel power there is cheap. However, some are optimistic that the increasing amount of Bitcoin mining will drive up the investment in renewable energy to maximize the potential. In the Sichuan province, there is cheap hydroelectricity available for Chinese miners.

Can Bitcoin’s energy use be more efficient?

By now, it is clear that Bitcoin requires a lot of energy to maintain the blockchain. This has caused it will be under fire by environmental is that believe this method of doing business is not sustainable. For miners, the cost of energy can take a huge portion of their mining costs. In fact, this can go up to 25 percent of their total cost.

To answer the question, it is possible to make Bitcoin more efficient. In fact, there needs to be a shift in perspective. Instead of looking at wastage of energy, this is the main reason why it is so difficult to manipulate the blockchain. If anybody wants to rewrite the blockchain, it will be very expensive and time-consuming.

A lot of the cryptocurrency mining energy use is utilized to keep the computers cool. One of the proposed solutions is for these miners to move to a colder climate. For miners, they are also considering geographical location to be a determining factor for their location. Some of the most popular locations at the moment are China, Europe, and the United States. Despite this, popular locations such as Iceland are looking more appealing to miners because it has cheap electricity and a cold climate which will make it easier for the hardware to remain cool.

What are the possible alternatives?

There are over 2000 alternative cryptocurrencies in the market. Hence, Bitcoin isn’t the only option that you have when it comes to trading in the cryptocurrency market. However, it is the most popular cryptocurrency in the world. An alternative to Bitcoin is being created by the Ethereum network. The network will utilize proof of stake which will reportedly take up less energy. However, it is not fully implemented yet.

In the years ahead, investors can expect to see a new breed of cryptocurrencies emerging. Also, consumers can also expect to see the usage of smart contracts utilized to automate transactions. Today, there are already ideas to allow users to borrow computing power or Internet bandwidth without having to pay to the Internet provider. Hence, there will be trading of solar energy or anything that is tradable within the system.

Despite the possibility of cryptocurrency mining to become more efficient, the industry today is still taking up a lot of energy. As more miners are moving to smaller villages, the impact of their operations will be felt by the villagers that may not be involved in the operations. An increase in the amount of money charged to miners is inevitable. After all, why should someone else pay a higher amount for bills when someone else is driving up the costs?

In fact, Plattsburgh became the first ever city in the United States to temporarily ban new cryptocurrency mining operations. At the moment, they are still trying to figure out some ground rules when it comes to mining businesses. These miners have to consider the impact on smaller communities where there is always the smaller amount of low-cost power available. The real concern is if miners use cheap energy and not give back to the community.

Bitcoin And Blockchain Will Cause A Huge Disruption To The Financial System

Would you be willing to receive your wages in cryptocurrencies? As the growth of cryptocurrencies is increasingly rampant, there are already companies which are offering this method of wages payment to their employees. Back then, it would have been impossible to think about receiving your wages in cryptocurrencies.

Companies that offer this method of paying wages provides the option to their employees whether they want to receive it in full or only a portion of their wages in cryptocurrencies. Despite this, one of the major disadvantages of cryptocurrencies is the fact that it is a highly speculative investment. Hence, the value can easily crash to zero at any time.

Although Bitcoin and its digital currency are increasing in popularity, this is not be reflected in proportion to their everyday use. When Bitcoin was initially created, it was created to cater to transactional purposes. However, people picked up cryptocurrencies as investment vehicle because it can provide high levels of return within a short time. The payment processors Stripe recently cut off ties with Bitcoin because it claims that the platform has a slow transaction time and there are high fees that are associated with Bitcoin transactions.

With the myriad of problems that Bitcoin is having, it is clear that Bitcoin and it cryptocurrency counterparts are not ready for their debut into the mainstream world. In fact, the infrastructure is nothing compared to established payment processors such as MasterCard or Paypal that can process thousands of transactions within a second. In comparison, Bitcoin can only process single to double-digit transactions per second.

However, it is clear that the generation ahead of us is leaning towards the growth of digital currencies because most of us will live a digital cash lifestyle. This is why blockchain has grown in popularity as it opens up the opportunity to create secure and efficient peer-to-peer transactions. Here are the possible things that could happen to cryptocurrency future.

What can we expect from cryptocurrencies in the future?

First and foremost, it could come from the Federal Reserve which is trying to issue their digital currency. In fact, many other companies such as Amazon, and Walmart are trying to explore the concept of creating these currencies to pay for their services. However, it is expected that the cryptocurrency that they create can only be used within their system. For instance, the coins can be used to pay for Amazon goods. This is a good proposition because more people are more willing to buy from these corporations which are giants in their respective industries.

In addition, this will surely inspire trust in cryptocurrencies. As these retail giants start to accept cryptocurrency into their system, the value of their currency can go above the current major cryptocurrencies because it already has a huge user base before the cryptocurrency adaption. This would be a breath of fresh air because we have not seen a cryptocurrency being used so widely for a method of transaction.

As a direct impact of the situation, it may threaten the sanctity of current monetary policy and the national currencies that we have. In fact, it is easy to see why people would prefer to use cryptocurrencies daily. People reduce the risk of theft by ensuring that their virtual assets are kept on the blockchain. The convenience level associated with virtual currency also makes it a highly preferred platform compared to real cash.

This is perhaps one of the reasons why many tech entrepreneurs and investors are turning to blockchain startups to invest in the technology. However, not everyone believes in the potential of cryptocurrency. For instance, JP Morgan’s CEO has been very vocal about how he believes that Bitcoin is a fraud. Warren Buffet also projected similar negative opinions about cryptocurrency.

In the future, commercial banks will still have to play an important role to consumers. As our lives are mainly governed by centralized currencies, it will continue to provide a stable form of value for our daily transactions. It will take some time before cryptocurrencies can completely take over the job of a centralized bank. In addition, governments also try their best to avoid cryptocurrencies taking over the national financial system because it is not a sustainable way to do daily transactions.

 

 

Central banks want to issue their cryptocurrency

Central banks are among the stakeholders who are interested in issuing their digital currency. In fact, there have been several banks that are looking into this possibility. It is believed that having a centralized digital currency can help to make monetary policy is more flexible and even allowing for negative interest rates. Moreover, it is simple to store these centralized currencies into a digital wallet. It is also traceable in the sense that any frauds done using the cryptocurrency can be tracked down to a particular individual or entity.

Bank of England has recently revealed that having a centralized cryptocurrency can help to boost the GDP by 3%. This mainly comes from reducing the cost transaction. However, the bank has to think twice before they want to adopt the centralized cryptocurrency because they will disrupt the source of capital that they have through the transaction fees.

Cryptocurrencies growth in a nation is highly dependent on a nation’s stance. There are different ways that cryptocurrency regulations can play out. Firstly, the government can take a blanket approach like China which completely banned the trading of cryptocurrencies. The government can also steal the spotlight from cryptocurrency by issuing their centralized cryptocurrencies.

Another big player for cryptocurrencies

Despite this, experts remain optimistic about the potential of cryptocurrency models if there were trusted bodies that were backing them up. For instance, Starbucks could be a potential company that adopts the usage of cryptocurrencies. As they have strong branding, this will inspire trust within the cryptocurrency that they release. Despite this, Starbucks has been reported not investing as much into the cryptocurrency future as of now.

Amazon as a key stakeholder in cryptocurrencies

Another corporation which has been reportedly taking an active interest in cryptocurrency as Amazon. It is believed that they will be accepting Bitcoin or any of its digital rivals as a method of payment. In addition, Amazon has also registered several domains which are related to cryptocurrencies. Therefore, is no wonder why people believe that Amazon is going to announce entering the cryptocurrency space soon.

Let’s assume that Amazon will want to reward their customers in the form of cryptocurrencies. One potential situation is that customers will hoard these coins instead of using it to redeem a reward. The effects on sales and profits may go the other way than what was intended. Moreover, if a digital currency were to gain wide acceptance from retailers, the issuer will have to act like a central bank. In this regard, Amazon presents itself as a good body to potentially become the central bank. If this was to happen, can people count on Amazon?

Wrapping it up

Central bankers seem to be feeling agitated with the presence of cryptocurrencies. With the value of the dollar declining, more people are losing their faith in the dollar. As a result, more people are turning to investments such as cryptocurrencies. To think of it from another perspective, competition to central banks could help central banks remain on their toes and prevent any runaway inflation.

Could Bitcoin’s Price Crash Soon?

When Bitcoin started trading on the Chicago Mercantile Exchange (CME), there is a lot of enthusiasm because it shows that Bitcoin is establishing its position among the traditional investment assets. In fact, the decision to create Bitcoin futures contracts can attract more retail investors into the industry as there is a layer of the provision for the trading of Bitcoin. However, Bitcoin futures have been available for quite some time. Now that it is trading with a more reputable platform, it is getting a greater audience. With the CME being the world’s largest futures exchange, it is undeniable that people have more optimism about the future of Bitcoin.

The price of Bitcoin had grown phenomenally from $900 at the beginning of 2017 to nearly $19,000 at the end of 2017. It doesn’t seem like the craze around Bitcoin is going to die out any time soon. There are even some analysts that expect the price of Bitcoin will go up to $60,000 in 2018. Due to the limited supply of the industry, this can easily drive the price of Bitcoin up easily.

However, one must keep in mind that the value of Bitcoin is mainly driven by speculation. This is why there is an economy that believes the coin is currently in a bubble. Here is the reason why Bitcoin may very well be in a bubble.

 

 

 

  1. Release of the Bitcoin futures

Surprisingly, this is the financial instrument that has helped to solidify Bitcoin’s position in the first place. However, there may be some downsides to it being a Bitcoin future. For one, people are criticising and the fact that people are betting against ups and downs of Bitcoins without needing to purchase a Bitcoin. As futures contracts are classified as derivatives, investors can bet against the movement of Bitcoin the rule of the derivative.

If we were to look at it positively, investors could profit off the fluctuations of Bitcoin without having to store these cryptocurrencies themselves. Due to the huge security risk that comes with cryptocurrencies, this provides a unique method for people to profit off Bitcoin. However, this can mean the demand for the actual cryptocurrency can decrease which can drive the prices down. With the Bitcoin futures, the bubble that Bitcoin is in can pop very soon.

  1. Threat of regulations

A big reason why people are interested in Bitcoin is that it is highly unregulated and is anonymous. This is a huge advantage especially for people that don’t want the government to know what they are doing with their money. However, it also creates an important flaw. Due to the anonymity of cryptocurrencies, governments will most likely regulate the space to tax the profit that investors get. In fact, the presence of cryptocurrencies can potentially affect how our financial market will function. Governments such as China has already banned the trading of cryptocurrencies domestically because they don’t want capital to flow outside of the country.

Besides the fear that capital will flow outside of the nation, there is a good reason for government regulation. In cryptocurrencies, it is entirely up to the investor to protect their investment. In other words, investors are not protected if their money goes missing. Therefore, investors are susceptible to a high level of fraud.

However, some may disagree. Some believe that the government should not even be monitoring cryptocurrencies because it is not classified as the security. Whatever the opinions may be, the government is keeping their eyes open on any progress done in the cryptocurrency market. As many institutions are sitting back and watching where the cryptocurrency is going next, we can expect government regulations take place in the near future.

  1. Scalability issues

Think about it. Have you ever seen any other currency that moves the way Bitcoin does? However, the main concern about Bitcoin lies in the scalability issues of its infrastructure. Platforms such as Bitcoin and Ethereum have the issue of not being able to scale to a commercial level. In fact, Bitcoin can only process a handful of transactions per second. If we compare this to established processors within the industry such as Visa, Bitcoin pales in comparison. Therefore, Bitcoin still has a lot of work to do with its infrastructure if it wants to be considered a serious contender as a payment processor.