Saturday, October 26, 2013

Cryptocurrencies: Are they here to stay? Bitcoins, Litecoins & Alternative coins

As I have mentioned in my previous post, I believe that Cryptocurrencies are here to stay, and that Litecoins are a good buy right now. Before I explain why so, lets go through a little introduction on cryptocurrencies. Since Bitcoin's rise to fame, a myriad of alternative cryptocurrencies (altcoins) have come into existence.
There are over 30 altcoins available on Coinmarketcap.com, but most have meagre market capitalization as compared to Bitcoin. Litecoin is currently leading the altcoin market and is the coin to watch, as I will explain.
Alternative Crypto-Currency Market Capitalization Alternative Crypto-Currency Market Capitalization (Coinmarketcap.com)
Once that threshold is crossed, the difficulty in 'switching over' to an alternative cryptocurrency is minor for all parties.

One of Litecoin’s most significant claimed improvements over Bitcoin is that it allows transactions to be confirmed as legitimate much more quickly, says Charles Lee, who designed the currency, which is now maintained by him and a small group of other enthusiasts. It is also notable that Charles is currently working in Coinbase, which could mean that Coinbase may announce Litecoin integration anytime soon. In fact, Coblee (aka Charles Lee), posted on trollbox that Litecoin support will be available on several exchanges next week (see the post here).
Litecoin prices have been steadily declining since it boomed alongside Bitcoin earlier this year, and many people do think it will continue on this downtrend to its oblivion. However, it is interesting to note the similarity of Litecoin chart compared to Bitcoin chart right before it started climbing up to it's current level. See the comparison in this video below.
So what determines whether or not Litecoin prices will increase?
I believe that this is largely dependent on the availablility of services built ontop of Litecoin. As long as there remains no significant usage of Litecoins, it's price will continue to decline, possibly to the level of other altcoins. Hence, an example of good news for Litecoin would be trading platforms such as BTC China, or online wallets such as Coinbase integrating Litecoin into their systems.
In this recent Youtube video, the team at 'Let's Talk Bitcoin' discussed Litecoin and its potential which I highly recommend watching.
They mention two main problems faced by Litecoin, namely an infrastucture problem, and an adoption issue. In terms of infrastructure, the number of resources available to trade Litecoin as compared to Bitcoin is currently very minimal. Hence, Litecoin prices have been sliding (or stagnating) since its boom in April 2013. On top of that, adoption of Litecoin by major trading platforms has been non-existential. Even though trading platforms like MtGox have announced Litecoin integration back in May, it still has yet to do so. Until Litecoin sees an enhanced utilization and utility, we will unlikely see Litecoin prices grow. However, my guess is that once large trading platforms or wallets start to accept Litecoin, we may see a great boost in Litecoin prices.
Lastly, they also discuss how the future of cryptocurrency lies in the ability of the payment infrastructure to be cryptocurrency agnostic, that is, that one infrastructure will be allowed to accept different kinds of coins. Much like a packaged solution where vendors can integrate and accept every altcoin. This will allow markets to exist on its merits instead of its perceived value.

This is also in line with much of the discussion I have found on Bitcointalk, such as this one titled "Why the loss of confidence in Litecoin". Some of the comments by users are highlighted here:
hulk: "There isn't any good news for Litecoin. Wait till you see "MtGox Litecoin has arrived". Booom, litecoin at $20."
kokjo: "If an altcoin is to be able to coexist with Bitcoin, it must be different enough."
pankkake: "As long as there is no significant usage for litecoins available, it's eventually going to decline to the level of other altcoins."

Furthermore, this Quora discussion titled "Do other crypto-currencies have a chance or is Bitcoin too far ahead?" generated more than a few interesting comments, as shown below:
Ben Mordecai, Bitcoin Hopeful (See the full comment here: http://qr.ae/NmnvS)
"The biggest hurdle is making it artificially scarce in a manner that is for all purposes, impossible to counterfeit. Also, there needs to be a way to ensure that you can't backup a copy so that you can spend it twice. The solution is the P2P bitcoin network. The divisibility is better than the dollar, so no problems there. Physical size isn't an issue, since it's digital. It doesn't deteriorate over time, provided you keep adequate backups and never lose them. The only real factor that's missing is an actual non-monetary value. Is it really possible to make a cryptocurrency that has a commodity value? Probably not. Yet then again, the United States uses Federal Reserve notes, which have no commodity value, along with almost every monetary system in the world. In my view, this is a mistake, but nonetheless, for all purposes the lack of a commodity value doesn't make them less spendable."
Ben Solmar (See the full comment here: http://qr.ae/Nmnsv)
"Any P2P cryptocurrency alternatives to Bitcoin need to offer a substantial improvement in order to justify their existence at scale.
Litecoin illustrates this principle well and in many ways is superior to Bitcoin. The most interesting difference is that LiteCoin's proof of work algorithm is Scrypt. Bitcoin uses SHA-256. This is a major change.
Litecoin's algorithm focuses on CPU oriented tasks, negating the advantages of the kind of custom hardware being created to mine BTC moving forward. An additional difference between LTC and BTC is the substantially shorter transaction time in LTC. This may prove critical for real-world transactions."

Lastly, I'd like to end off this post with a more controversial video, linking FIAT currency and a decreasing trust in Governments and Banking corporations, to the rise of Cryptocurrencies.

Cheers & have a great week trading. All the best, and stay tuned!

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Thursday, October 24, 2013

Bitcoin: Where does it go from here?

So you've heard about Bitcoins. Since its boom in April 2013, Bitcoins have garnered immense media attention and continued to show impressive strength, rising steadily and finally breaking the $200 psychological barrier today. Even the recent Silk Road closure couldn't dampen the demand for Bitcoins, as prices continued to rally after Baidu (the Google of China) announced its acceptance of Bitcoins as a payment mode.
The popularity of Bitcoins can be attributed to two characteristics of the currency; it is decentralized, and there is a finite amount of bitcoins that can be mined. As such, Bitcoins are very often said to be similar to be Gold. These two characteristics can be said to give Bitcoins their perceived value.
However, the question on everyone's mind is, what gives Bitcoins their intrinsic value (See a Reddit discussion on Bitcoin's intrinsic value here)? As a relatively new commodity that is still in its infancy stage, there have been attempts by a large number of parties to predict it's price, and to reason its market fluctuations with existing Economic theories. However, in attempting to analyse the Cryptocurrency market, we must keep in mind its infancy, and hence the significance of non-economic factors. The real problem is not what the price will be, but whether or not Bitcoin will even be here in five, ten years from now. The question we should be asking then, should be, what factors determine the viability of Bitcoins as an alternative currency?
In my opinion, the most important factor driving the demand of Bitcoins is its adoption by corporations. Basically, the more companies accept Bitcoins as payment for products and services, the better it will be for Bitcoin's future. However, this can turn into a chicken-and-egg issue, because corporations will never consider transacting in Bitcoins because of its instability. Until Bitcoins find a stable price, it is highly unlikely that this will happen. As MeldrumLaw pointed out in this Reddit discussion, "Bitcoin needs to stabilize (or all fiat alternatives need to simultaneously collapse) before widespread commercial adoption occurs."
It is true that Bitcoins have no intrinsic value, in the numismatic sense. Yes, Bitcoins solve some algorithmic problems through the mining process. However, these computations do not generate any kind of useful data, or solve any real life problems; there is a lack of "useful" input/output in solving alogorithms. Cryptocurrency needs to be more "useful" and solve a problem, in the same way that Duolingo translates the web while allowing users to learn a new language. With this in mind, I believe that a new cryptocurrency will emerge and overshadow Bitcoin, that actually solves a real world problem or generate useful data from all the computational data used. Imagine what could happen if Google is currently working on their own decentralized cryptocurrency?
Bitcoin prices skyrocketed during the financial crisis in Cyrpus as a result of people's distrust in FIAT currency and an increasing demand for an ungoverned and limited alternative.  Coupled with the large (and growing) number of services built around Bitcoins, I believe that Bitcoins, or at least Cryptocurrencies, will be here to stay for good.
In my next article, I'll be talking about alternative cryptocurrencies, and why Litecoins are a good buy right now. Stay tuned!
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Thursday, October 17, 2013

US Dollar is the biggest scam in the history of mankind

Have you ever stopped to question any of the 'norms' of this world? Have you ever though about how money was created, how the banks are creating money 'out of thin air'? Find out more about how the US dollar is the biggest scam in the history of mankind in the video below.

But beyond that, we need to ask, how will this ever affect me?
Learning this will change your life, because it will change the choices that you make. If enough people learn it, it will change the world... because it will change the system . For this is the biggest Hidden Secret Of Money. Never in human history have so many been plundered by so few, and it's all accomplished through this...The Biggest Scam In The History Of Mankind.

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Wednesday, October 9, 2013

US Dollar Collapse Imminent, where is the safe haven?

Jeff Berwick is a Canadian entrepreneur, economics, finance, and investment writer, and libertarian and anarcho-capitalist activist. He believes that we are going through a significant market shift. He goes on to say that the excessive printing of money will lead to hyperinflation, and adds, this is exactly what the Federal Reserve is doing now. They have been printing 10% of the money every year, for the last 5 years. He believes that the economic (US dollar and Stock markets) collpase is imminent, and that we should look towards alternate forms of wealth such as Gold or Bitcoins.
Bitcoin, the first free-market non-localized private money, is seen as a great threat to the Government's monopoly of money. However, the recent economic collapses in smaller regions (think Cyprus), have spurred the rise of Bitcoin and its non-centrality as an alternative to the FIAT currency.

Dan Popescu, a global markets strategist and gold expert, shares his thoughts about Gold and China. He talks about a 'black swan event' that is at our doorstep and how that can make the price of gold 'explode' in a day. Gold is important because it is a "hard currency" that has value, as opposed to the FIAT currency which is not backed by anything.
China is a major buyer of gold, and their strategy is to gather a large deposit of gold to be able to properly back up their currency, unlike any other currency now. If the Chinese can successfully back up their currency with gold, they will be able to give credibility to their currency.
The world is becoming increasingly dissatisfied with the current system. He believes, within the next 3 to 5 years, that "we'll have a currency crisis with a new international monetary system, and gold will defnitely be part of it." Gold will shoot up in a shock, surprise move, and he "won't be surprised" if gold goes above US$2000/oz within a year.

Another video also highlights that 90% of market movement will come in the last 10% of time. Click here to watch the full video: Silver - 90% of the move comes in the last 10% of the time
Last video I want to share with you is from Ned Goodman. Ned is a Canadian billionaire with a unique perspective on the world economy. He starts off in the video by saying that "the dollar is about to be dethroned as the world's de facto currency".
He justifies his claim by explaining how the US dollar is backed by nothing, but still has a strong power in the world, because all oil in the middle east is traded with US dollars. That is how the dollar got to where it is today. However, China has recently made deals with Russia to buy oil in Chinese Yuan (RMB), opening the path to international partnership between these two big players. It was also obvious from the tension in Syria, that China and Russia are on the same side. We are heading into a period of "stag-flation" as the Federal Reserve loses its power to print money at will.
We buy things to protect our future purchase power. To continue doing so today, he emphasizes the need to start buying hard assets.

For those of you who are still unsure about what FIAT currency means, or how the US dollar is not backed by anything, I'll end of with one of my favourite videos that very aptly answers these questions.
Or watch it on YouTube: When Will The Economy Collapse?


Thank you for reading, and I hope you gained some value from this post. Be safe and all the best!

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Monday, October 7, 2013

Jim Rogers goes for Gold, Sugar, Chinese RMB, and Russian ETFs

Jim Rogers, touted as a legendary commodities investor, is an investor and author based in Singapore. In his recent interview on FOX Business, Rogers outlined several investment opportunities:
  1. Gold, if it goes below US$1000 per ounce
  2. Sugar as a commodity, and Sugar companies
  3. Chinese RMB
  4. Russian Exchange-traded Funds (ETFs)



In another video, Rogers talks about the artificial stimulus package introduced in the United States, and believes that America will "default (on its debts) one way or the other". When that happens, he believes that the Dollar will lose its place as the World currency.


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Saturday, October 5, 2013

Time for Commodities: Silver, Gold, Chinese Yuan RMB, and Bitcoins

In light of the recent US Government Shutdown on 1st October 2013, and upcoming Debt Ceiling talks, I have decided to stop my Forex Trading with the Leo EA. If you are currently trading in the Forex or Equity markets, please be safe! Nothing is for certain in this economy.
With that said, I will be looking to move my investments towards 3 main products:

  1. Silver & Gold
  2. Chinese Yuan (RMB)
  3. Bitcoins

Will share my own thoughts and reasons for this decision over the next few posts. So stay tuned!
In the meantime, diversify your portfolio and do your research into what's going on in the world today.
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