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What Is Bitcoin and Is It a Good Investment?

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Bitcoin (BTC) is a new kind of digital currency-with cryptographic keys-that is decentralized to a network of computers used by users and miners around the world and is not controlled by a single organization or government. It is the first digital cryptocurrency that has gained the public’s attention and is accepted by a growing number of merchants. Like other currencies, users can use the digital currency to buy goods and services online as well as in some physical stores that accept it as a form of payment. Currency traders can also trade Bitcoins in Bitcoin exchanges.

There are several major differences between Bitcoin and traditional currencies (e.g. U.S. dollar):

  1. Bitcoin does not have a centralized authority or clearing house (e.g. government, central bank, MasterCard or Visa network). The peer-to-peer payment network is managed by users and miners around the world. The currency is anonymously transferred directly between users through the internet without going through a clearing house. This means that transaction fees are much lower.
  2. Bitcoin is created through a process called “Bitcoin mining”. Miners around the world use mining software and computers to solve complex bitcoin algorithms and to approve Bitcoin transactions. They are awarded with transaction fees and new Bitcoins generated from solving Bitcoin algorithms.
  3. There is a limited amount of Bitcoins in circulation. According to Blockchain, there were about 12.1 million in circulation as of Dec. 20, 2013. The difficulty to mine Bitcoins (solve algorithms) becomes harder as more Bitcoins are generated, and the maximum amount in circulation is capped at 21 million. The limit will not be reached until approximately the year 2140. This makes Bitcoins more valuable as more people use them.
  4. A public ledger called ‘Blockchain’ records all Bitcoin transactions and shows each Bitcoin owner’s respective holdings. Anyone can access the public ledger to verify transactions. This makes the digital currency more transparent and predictable. More importantly, the transparency prevents fraud and double spending of the same Bitcoins.
  5. The digital currency can be acquired through Bitcoin mining or Bitcoin exchanges.
  6. The digital currency is accepted by a limited number of merchants on the web and in some brick-and-mortar retailers.
  7. Bitcoin wallets (similar to PayPal accounts) are used for storing Bitcoins, private keys and public addresses as well as for anonymously transferring Bitcoins between users.
  8. Bitcoins are not insured and are not protected by government agencies. Hence, they cannot be recovered if the secret keys are stolen by a hacker or lost to a failed hard drive, or due to the closure of a Bitcoin exchange. If the secret keys are lost, the associated Bitcoins cannot be recovered and would be out of circulation. Visit this link for an FAQ on Bitcoins.

I believe that Bitcoin will gain more acceptance from the public because users can remain anonymous while buying goods and services online, transactions fees are much lower than credit card payment networks; the public ledger is accessible by anyone, which can be used to prevent fraud; the currency supply is capped at 21 million, and the payment network is operated by users and miners instead of a central authority.

However, I do not think that it is a great investment vehicle because it is extremely volatile and is not very stable. For example, the bitcoin price grew from around $14 to a peak of $1,200 USD this year before dropping to $632 per BTC at the time of writing.

Bitcoin surged this year because investors speculated that the currency would gain wider acceptance and that it would increase in price. The currency plunged 50% in December because BTC China (China’s largest Bitcoin operator) announced that it could no longer accept new deposits due to government regulations. And according to Bloomberg, the Chinese central bank barred financial institutions and payment companies from handling bitcoin transactions.

Bitcoin will likely gain more public acceptance over time, but its price is extremely volatile and very sensitive to news-such as government regulations and restrictions-that could negatively impact the currency.

Therefore, I do not suggest investors to invest in Bitcoins unless they were purchased at a less than $10 USD per BTC because this would allow for a much larger margin of safety.

Otherwise, I believe that it is much better to invest in stocks that have strong fundamentals, as well as great business prospects and management teams because the underlying companies have intrinsic values and are more predictable.

Disclosure: Victor Liang has has no positions in Bitcoins and has no plans to change his position in the next 72 hours.

Bitcoin

TA: Ethereum Lacking Bullish Momentum, Why ETH Holders Are Safe

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Ethereum

Ethereum started a steady increase above $3,050 against the US Dollar. ETH price could correct lower, but the bulls might remain active near $3,000 and $2,950.

  • Ethereum extended its increase above the $3,100 and $3,150 levels.
  • The price is now trading near $3,100 and near the 100 hourly simple moving average.
  • There was a break below a key bullish trend line with support near $3,150 on the hourly chart of ETH/USD (data feed via Kraken).
  • The pair could correct lower towards $3,000 or even $2,950 in the near term.

Ethereum Price Is Losing Pace

Ethereum started a steady increase and settled above the $3,000 level. ETH even broke the $3,100 level and settled above the 100 hourly simple moving average.

It traded as high as $3,173 and recently corrected lower. There was a break below the $3,150 level. Besides, there was a break below a key bullish trend line with support near $3,150 on the hourly chart of ETH/USD.

Ether is now trading near $3,100 and near the 100 hourly simple moving average. It is still trading well above the 23.6% Fib retracement level of the upward move from the $2,651 swing low to $3,173 high. An immediate resistance on the upside is near the $3,150 level.

Source: ETHUSD on TradingView.com

The first major resistance is near the $3,180 level. The main breakout zone could be near the $3,200 zone. A close above the $3,200 resistance could start another steady increase. The next major resistance might be near the $3,320 level. Any more gains may possibly open the doors for a move towards the $3,500 level in the near term.

Dips Limited in ETH?

If ethereum fails to continue higher above the $3,150 and $3,200 resistance levels, it could start a downside correction. An initial support on the downside is near the $3,050 level.

The next major support seems to be forming near the $2,950 level. Any more losses might call for a test of the 50% Fib retracement level of the upward move from the $2,651 swing low to $3,173 high at $2,912. A downside break below the $2,900 support zone could put a lot of pressure on the bulls.

Technical Indicators

Hourly MACDThe MACD for ETH/USD is slowly losing pace in the bullish zone.

Hourly RSIThe RSI for ETH/USD is now close to the 50 level.

Major Support Level – $3,050

Major Resistance Level – $3,200

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Will Crypto Market Aim For the Moon, After The Current Fall?

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Will Crypto Market Aim For the Moon, After The Current Fall?
  • Many cryptocurrencies hit record highs in April.
  • Few analysts believe this crash will eventually be overlooked.

With a new all-time high for Bitcoin, legislative discussions that may affect the sector, and more institutional buy-in from large businesses, the cryptocurrency market has gone through so much this year. Despite this, interest in Crypto has soared this year.

But the sector is young and growing. Long-term trends are difficult to forecast, but experts will focus on topics like regulation. Also, institutional crypto payment usage in the next months to better understand the industry.

This month’s crypto market collapse saw several major digital currencies decrease in value. Bitcoin, Ethereum, and other popular cryptocurrencies lost value in the recent market collapse.

Many cryptocurrencies hit record highs in April, with Bitcoin hitting over $50,000 before major falls during the summer.

According to Coinbase, Bitcoin’s value has increased 335.91 percent in the past year, despite the crypto collapses of May 19 and June 8. The total price is now far below the mid-April highs, but well over the same time last year.

In 2021, mainstream businesses across sectors showed interest in cryptocurrencies and blockchain. And some even invested. According to AMC, Bitcoin payments will be accepted before the end of this year. PayPal and Square, for example, are betting on Crypto by enabling consumers to purchase on their platforms.

The market wants to climb to the moon, according to Twitter Crypto Analyst and co-Founder of @PACcoinOfficial David Gokhshtein.

David’s Tweet:

Future of Crypto

Many analysts believe this crash will eventually be overlooked, and new highs will be made following the wide-adoption rate of Crypto in all sectors. 

NFT sales soared in August, according to the biggest platform for the burgeoning digital asset class, as investor’s wagered increasing interest in the arts, sports, and media. Many people, puzzled as to why so much money, spended on things that do not exist physically.

The demand and craze for the Crypto and increasing upgrades to DeFi. Along with nations starting to approve Crypto as a legal tender, shows the future of Crypto has a long way to go, and one can predict moon is not too far for the crypto market.

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TA: Bitcoin Revisits $45K, Why Dips Turn Attractive In Short-term

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Bitcoin

Bitcoin price extended its increase above the $44,000 level against the US Dollar. BTC traded close to $45,000 and it might correct lower in the short-term.

  • Bitcoin started a recovery wave above the $43,000 and $43,000 resistance levels.
  • The price is now trading above $44,000 and the 100 hourly simple moving average.
  • There is a key rising channel forming with support near $44,250 on the hourly chart of the BTC/USD pair (data feed from Kraken).
  • The pair could correct lower towards the $43,500 support zone and the 100 hourly SMA.

Bitcoin Price Extends Increase

Bitcoin price started a decent increase above the $43,000 level. BTC remained well bid and it managed to clear the $44,000 resistance level plus the 100 hourly simple moving average.

The price even climbed above the $44,500 level and traded close to the $45,000 level. A high is formed near $44,934 and the price is now correcting lower. There was a break below the $44,500 and $44,400 levels.

An immediate support is near the $44,300 level. There is also a key rising channel forming with support near $44,250 on the hourly chart of the BTC/USD pair. The pair is also well above the 23.6% Fib retracement level of the recent wave from the $39,580 swing low to $44,934 high.

Source: BTCUSD on TradingView.com

On the upside, an immediate resistance is near the $44,800 level. The first major resistance is near the $45,000 level. A clear break above the $44,800 and $45,000 levels could start another increase. The next major resistance is near the $46,200 zone, above which the price could rise towards the $47,000 resistance.

Dips Limited In BTC?

If bitcoin fails to clear the $45,000 resistance zone, it could start a fresh decline. An immediate support on the downside is near the $44,300 level.

The next major support is near the $44,250 zone and the channel trend line. A downside break below the channel support could lead the price towards the $43,500 support zone or the 100 hourly simple moving average. Any more losses could lead the price towards the 50% Fib retracement level of the recent wave from the $39,580 swing low to $44,934 high at $42,250.

Technical indicators:

Hourly MACD – The MACD is slowly losing pace in the bullish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is still above the 50 level.

Major Support Levels – $44,250, followed by $43,500.

Major Resistance Levels – $44,800, $45,000 and $46,200.

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Bitcoin.org Hacked By Scammers For A Few Minutes. Someone Sent Them 0.4 BTC

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Bitcoin.org hacked website

Hackers took over the Bitcoin.org website and displayed the classic double your money scam for a few minutes today. Apparently, it was a DNS hack. Luckily, the Bitcoin community took notice and alerted Cobra, the pseudonymous website owner, as well as the company that hosted the domain. A few minutes later, Bitcoin.org was down. Sadly, a credulous person was faster than them and sent 0.4 BTC to the displayed address… or did he?

The transaction exists, but there’s a rumor that it might’ve been the scammers themselves, trying to make the operation look reputable. Just like a busker who put some change in his hat to encourage others to contribute. However, that’s just a rumor. Someone might’ve been scammed.

Related Reading | Old Bitcoin Miner Proves Craig Wright has No Access to 145 Tulip Trust Addresses

In any case, everybody else should thank Matt Corallo, a Bitcoin Core contributor who took it upon himself to contact the domain name registrars and managed to convince them to temporarily take down the site before some catastrophe happened. 

What Does The Bitcoin.org Owner Think About All Of This?

When Cobra announced the Bitcoin.org hack, he or she said, “Currently looking into how the hackers put up the scam modal on the site.” So far, there’s no information on that. Cobra also said that Bitcoin.org “May be down for a few days,” but luckily that wasn’t necessary.

Earlier in the day, Cobra contacted via Twitter their new hosting company Cloudflare and told them that the website has never been hacked, and now that he moved to their servers, this happened. The company responded, and eventually, the original tweet disappeared.  

BTC price chart for 09/23/2021 on Bittrex | Source: BTC/USD on TradingView.com

Does This Have Anything To Do With Craig Wright AKA Faketoshi Nakamoto?

A few months ago, both Cobra and Bitcoin.org made worldwide news. Craig Wright, Australian entrepreneur and Satoshi Nakamoto cosplay artist, got a UK court to order the website to remove the Bitcoin Whitepaper from its servers. At the time, Yahoo! finance informed:

“Cobra, the pseudonymous creator of the Bitcoin.org website, has been ordered by London’s High Court to discontinue hosting its copy of the Bitcoin white paper.

Citing copyright infringement brought forward by nChain Chief Scientist Craig Wright, the judge had no option but to rule a default judgment because Cobra chose not to make an appearance.”

Does the hack have anything to do with Craig Wright? There’s not a single clue to indicate that, but, rumors are flying. He’s the only one incentivized to attack Bitcoin.org, they say. However, 0.4 BTC is a pretty great incentive. Maybe the scammers were just interested in scamming.

Related Reading | Craig Wright Wins Lawsuit On Bitcoin.org Hosting Bitcoin Whitepaper

In any case, to close all the loops, Yahoo quotes Cobra explaining why he chose not to make an appearance in court:

“Unfortunately the court rules allowed for me to be sued pseudonymously, however, I couldn’t defend myself pseudonymously. So I was put in an impossible situation of losing my privacy or losing the case in a default judgment.”

So, to sum it all up, Bitcoin.org is back up again and no one scammed you. All is well that ends well. 

Featured Image: Screenshoot from the hacked website | Charts by TradingView

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Bhutan Partners With Ripple to Deploy Central Bank Digital Currency (CBDC)

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Bhutan Partners With Ripple to Deploy Central Bank Digital Currency (CBDC)