Blog Archives

The WeChat Playbook – Mobilizing the Points Economy

Whenever a big player enters – or even considers entering the space – cryptocurrency markets swoon. Names like JP Morgan, Facebook, and Twitter provide a sense of validation for investors and hope that the good times are still ahead. But it was Mark Zuckerberg’s “A Privacy-Focused Vision for Social Networking”, which the Silicon Valley mogul posted on Facebook, that got Kik CEO Ted Livingston talking.

An Ecosystem of Value Transfer

Facebook intends to launch stablecoin powered remittances starting in India, utilizing their Whatsapp platform. In “Facebook Isn’t Going After Bitcoin, It’s Going After the Dollar,” Ted Livingston’s response to Mark Zuckerberg’s original post, he references WeChat’s success in the value transfer space, highlighting the “WeChat Playbook”. (more…)

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Gresham’s Law and Bitcoin

Gresham’s law holds that “bad money drives out good money,” meaning that given a choice of currencies (broadly speaking, “money” that serves as a store of value and a means of exchange), people use depreciating “bad” money to buy goods and services and hoard “good” money that is appreciating or holding its value.

As this dynamic plays out, eventually there is little “good money” in circulation and the economy suffers accordingly.

Correspondent AK recently submitted an insightful discussion of Gresham’s law and bitcoin:

1: Discussions surrounding Bitcoin and Gresham’s law immediately devolve into a debate about historical formulation or wording of Gresham’s law. Gresham’s law includes the notion that one or several currencies must be accepted at a defined value under legal tender law. However, the wider economic phenomenon that “powers” Gresham’s law is a universal phenomenon that is independent of any particular legal or cultural context.

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Do We Still Need Banks In The Age Of Fintech? (Video)

– When was the last time you set foot in the bank?
– What is the future for fintech startups?
– Unbundling and disruption wins

– What is the fintech hub to watch in 2019?
– Ireland become a fintech and blockchain hub? 

– Singapore, London, NYC, Silicone Valley, Zug?

Video recorded at MoneyConf 2018

Click here to read the full article on www.GoldCore.com

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Cryptocurrencies Are Under Attack but Interoperability Might Unlock a Synergy for Defense

Cryptocurrencies are under attack but it takes a discerning mind to identify the subtle, covert, and overt attacks against the industry. Cryptocurrencies are an interesting application of blockchain technology. They have shown an impressive ability to facilitate an unprecedented paradigm shift that could transverse the financial, political, and socio-economic landscapes globally. Simply put, blockchain technology and cryptocurrencies have the potential to usher in a new world order.

Cryptocurrencies such as Bitcoin, Ripple, Litecoin, and Monero have shown a potential to displace fiat currencies as a means of exchange, store of value, and as legal tenders. Blockchain such as Ethereum and NEO have shown impressive potential to power a smart-contract economy, eliminate middlemen, and to deliver an unprecedented level of trust in business.

The haters have arrived

Traditional financial institutions, governments, and critics have never hidden their displeasure with cryptocurrency and its potential to change the world. Last year, the SEC ruled that Bitcoin is not a currency, James Dimon of JPMorgan called Bitcoin an outright fraud, and government agencies all over the world started clamoring for increased regulation on the operation of cryptocurrencies.

As 2018 gets underway, the concerted efforts of critics and skeptics have had a combined effort of exerting downward pressure on the price and value of cryptocurrencies worldwide.

NYSE Bitcoin Index Level 2018

In the chart above, Bitcoin (blue) is down by a heart-breaking 40.8% in the year-to-date period. In contrast, Wall Street equities are up – the S&P 500 is up 1.47%, NASDAQ Composite is up 6.39%, and small caps in the Russell 2000 are up 2.28%. (more…)

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Bitcoin Warriors by Sketchaganda

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Is One Reason Why the Status Quo Disdains Bitcoin Is the “Wrong People Are Getting Rich”?

The psychology of money, wealth and speculative manias is endlessly fascinating. Most of what’s written on these subjects focus on the process of building wealth as if it were a quasi-science rather than a psychologically driven process. Only speculative manias attract a psychology-based analysis, usually characterized as some variant of the madness of the herd running off the cliff en masse.

But money and wealth are nothing but more sedate reflections of the same dynamics that drive speculative manias. Much has been written about cognitive biases and thinking fast and slow, but these explorations do not exhaust the psychology underpinning money, wealth and speculative manias.

Few things have unleashed the Monster Id of wealth and money quite like bitcoin and the cryptocurrencies. Compare the speculative manias of the dot-com era (1995 – 2000) and the housing bubble (2002 – 2007) with the crypto-mania: in the first two manias, the status quo embraced the mania as rational and justified: the Internet would continue growing for decades, housing never goes down, etc.

But the status quo has not embraced cryptocurrencies with the same ardor–why? Instead of endless justifications for valuations, the status quo is filled with reports that 97% of all economists view bitcoin as a bubble, and endless articles decrying the bitcoin bubble as a fools game that will deservedly burst, and soon.

Why did the status quo embrace irrationally exuberant bubbles in the 1990s and 2000s, but views the exuberance of cryptocurrencies with disdain? I think this is a fruitful topic to explore, largely because nobody seems to be asking this question.

Here are my suppositions:

1. The status quo reviles cryptocurrencies because the wrong people are getting rich.

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Regulating Cryptocurrencies–and Why It Matters

There’s a great deal of confusion right now about the regulation of cryptocurrencies such as bitcoin. Many observers seem to confuse “regulation” and “banning bitcoin,” as if regulation amounts to outlawing bitcoin.

Further confusing things is the regulation of cryptocurrency exchanges, where cryptocurrencies are bought and sold.

In China, for example, cryptocurrencies are not outlawed, but exchanges were shut down until regulators could get a handle on how to deal with the potential for excesses such as fraud, misrepresentation, etc.

A Wild West free-for-all is conducive to scammers, and so some thoughtful regulation that protects users is to be welcomed.

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Could Central Banks Dump Gold in Favor of Bitcoin?

Exhibit One: here’s your typical central bank, creating trillions of units of currency every year, backed by nothing but trust in the authority of the government, created at the whim of a handful of people in a room and distributed to their cronies, or at the behest of their cronies.

And this is a “trustworthy” currency?

Exhibit Two: central banks can’t become insolvent, we’re told, because they can create as much currency as they want, whenever they want. And this is a “trustworthy” currency?

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Interest in Bitcoin Surpasses Interest in Gold as Conservative Investors Join the Fray

bitcoin gold central banks

Bitcoin is not slowing down despite the fact that traditional Wall Street analysts and institutional investors tend to be somewhat wary of its long-term prospects. Bitcoin has consistently broken resistance points in its ascent and the cryptocurrency is trading in a range between $11,400 and $12,000 per BTC.

Interestingly, some people seem to believe that Bitcoin is another passing fad akin to the tulip bulb mania of the eighteenth century. In fact, JPMorgan CEO, James Dimon doesn’t miss an opportunity to rile the cryptocurrency – he even went as far as calling Bitcoin a fraud in September.

Yet, the reality is that Bitcoin seems to be waxing stronger with each passing day. In fact, many traditional investors who had previously warned against the speculative nature of Bitcoin are starting to consider the possibilities of profiting from the cryptocurrency.  (more…)

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What Is Money? (Yes, We’re Talking About Bitcoin)

What is money? We all assume we know, because money is a commonplace feature of everyday life. Money is what we earn and exchange for goods and services. Everyone thinks the money they’re familiar with is the only possible system of money—until they run across an entirely different system of money.

Then they realize money is a social construct, a confluence of social consensus and political force– what we agree to use as money, and what our government mandates we use as money under threat of punishment.

We assume that our monetary system is much like a Law of Nature: since it’s ubiquitous, it must be the only possible system.

But there are no financial Laws of Nature for money. In the past, notched sticks served as money. In other non-Western cultures, giant stone disks (rai, a traditional form of money on the island of Yap) and even salt served as money.

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Did Anyone Do Even a Minimal Check on the Sensationalist Bitcoin Electrical Consumption Story?

Let’s start with a primer on how to write a sensationalist story that can be passed off as “journalism:”

1. Locate credible-sounding data that can be de-contextualized, i.e. sensationalized.

2. Present the data as “fact” rather than data that requires verification by disinterested researchers.

3. Exaggerate the data as much as possible and set the tone and context with emotionally laden words: “shocking,” etc.

4. Select a context that sensationalizes the conclusion.

Now let’s take a look at a story that has been swallowed whole, with little to no fact-checking or disinterested inquiry: bitcoin’s electrical consumption, i.e. the electricity consumed by mining/maintaining bitcoin’s blockchain.

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My Crazy $17,000 Target for Bitcoin Is Looking Less Crazy

I think we can all agree that bitcoin (BTC) is “interesting.” One of the primary reason that bitcoin (and cryptocurrency in general) is interesting is that nobody knows what will happen going forward.

Unknowns and big swings up and down are characteristics of open markets.It’s impossible to forecast bitcoin’s future price because virtually all the future inputs are unknown.

We’ve lived so long with managed markets that only loft higher that we’ve forgotten that unmanaged markets are volatile and full of unknowns. We’ve forgotten that markets are reflections of all sorts of things, from human emotions to herd behavior to changes in the underlying Mode of Production, i.e. how stuff gets done, made, distributed and paid for.

Last May, when bitcoin was around $580, I distributed a back-of-the-envelope forecast of $17,000 per bitcoin to my subscribers and patrons ($5/month or $50 annually). 

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