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As US Stock Market Crashes, Bitcoin’s Value Strengthens

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Threats and actions from governments and bankers to crush Bitcoin and other cryptocurrencies intensify. However, displaying one its finest features, resiliency, Bitcoin’s trajectory is once again retaking its ascending pattern, above $8,000 USD. Some experts believe that new technological developments will push Bitcoin’s value even higher.

Bitcoin Rebuffs Threats from Bankers, Governments, and the Powerful

Bitcoin rises once again above the $8,000 USD mark, snubbing formidable threats and actions from governments, bankers, and world financial authorities.

The most prominent banks have already taken concrete measures to damage Bitcoin. JPMorgan, Bank of America, and Citigroup are banning Bitcoin purchases made using their credit cards, alluding to high risk due to extreme price volatility.

Concurrently, world authorities are joining forces to destroy or rein in cryptocurrencies. For example, the French and German governments are requesting an opportunity to debate how to regulate Bitcoin at the upcoming G-20 summit.

Most recently, on February 7, 2018, Jim Yong Kim, President of the World Bank, questioned the legitimacy of cryptocurrencies, saying that they are like Ponzi schemes.

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Bubble or Not: Should You Buy Ethereum Now?

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From being digital money acknowledged by very few, cryptocurrency has turned into a lucrative investment opportunity now. For investors who are in search of expanding their portfolios, cryptocurrencies such as Bitcoin, Ethereum, and other altcoins offer a great option.  Ethereum, which is valued at around $1000 in 2018, is among the cryptocurrencies that are considered as a good investment. While there is a widespread belief that the cryptocurrency bubble is about to burst, is it wise to buy Ethereum now? Let us consider the pros and cons of investing in the cryptocurrency.

What is Ethereum and how it works?

Ethereum uses blockchain technology like Bitcoin, but it differs in the way it is utilized in different applications. Ethereum digital platform is a brainchild of Vitalik Buterin. Founded in 2015, the Ethereum token, Ether (ETH), started to be used for all transactions within the Ethereum blockchain. Ethereum is, therefore, a ‘financial system’ that is independent of government intervention and oversight.

Ethereum has an exclusive programming language that helps developers create software which is used to automate and achieve specific results by blockchain transactions. The software created is named as Smart Contracts.

Just like a conventional contract helps to lay down the specific conditions of an agreement, the Ethereum smart contract helps to ensure the terms are met with the help of code. The software executes an agreement when the predefined terms are satisfied. Thus the contract helps cut the costs and avoid delays that are often involved in manual transactions. While this is a basic concept, it can be expanded to encompass complex settings with endless potential for use in property, legal or financial services as well as insurance and other fields.

Advantages over Bitcoin and other cryptocurrencies

While Bitcoin is considered the most dominant cryptocurrency, Ethereum has the potential to grow well beyond Bitcoin and other altcoins because of the following factors:

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Robert Shiller Predicts an Interesting Future for Bitcoin

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There are numerous opinions on Bitcoin and other cryptocurrencies. Most financial experts see Bitcoin as a negative presence in the financial world. Robert Shiller, on the other hand, deems cryptocurrency to be an ‘interesting experiment”. He is mainly baffled by how difficult it is for investors to effectively short the Bitcoin price. Even so, it is safe to say BTC has gone viral as a currency.

Robert Shiller has some interesting opinions on Bitcoin and other cryptocurrencies. First of all, he is convinced Bitcoin is an interesting experiment, which leaves a lot of room for interpretation. Additionally, Shiller is concerned about the ongoing price instability. Volatile price swings have been a second nature for all cryptocurrencies as long as people can remember. it is doubtful that situation will come to a change in the near future, but one never knows what the future will hold in this regard.

According to Robert Shiller, Bitcoin is an attempt to change the concept of currency. Although it is a clever idea, there is no guarantee the world’s leading cryptocurrency will succeed. At the same time, there is a very real chance Bitcoin will become a success. Shiller is more interested in seeing governments emulate units of account constantly adjusted for inflation to maintain price stability. Bitcoin will never fit that bill by any means, mainly because of its lack of inflation. New coins are still mined, but the supply ends at 21 million coins.

Robert Shiller comments on cryptocurrencies as follows:

“I tend to think of bitcoin as an experiment. It is an interesting experiment, but it’s not a permanent feature of our lives. We are over-emphasizing bitcoin, we should broaden it out to blockchain, which will have other applications. We’ve just seen that both the Cboe and CME have both created futures markets for bitcoin and that might make it more stable.”

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Bitcoin 2018 Price Projection Using Monte Carlo Random Walks: ~50,000 USD

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Using the Monte Carlo statistical projection method, combined with what are known as random walks, Xoel López Barata developed some pretty fun bitcoin price scenarios for the end of this year. His projections are compelling because he follows data, revealing the difficulty being able to accurately prophesize much about the world’s most popular cryptocurrency’s path.

Monte Carlo Projection Method

Xoel López Barata recently published a pretty great thought experiment. Mr. Barata ran a simulated price projection for all of this year, attempting to figure out just where bitcoin will end in 2018. It is “my opinion and not investment advice,” he urges. And it’s always good to remind readers past performance is no indication of future returns, as life seems to always have other plans.

Mr. Barata used what’s known as a Monte Carlo method. The nerdiest among us will really enjoy following his inputs on Github. He uses daily returns, price variants, but doesn’t assume a normal distribution and instead notes “extreme events have a higher probability of happening.” The Monte Carlo method is usually attributed to a WWII Greek-American scientist Nicholas Metropolis.

Nicholas Metropolis worked with Robert Oppenheimer, Enrico Fermi, and Edward Teller at Los Alamos. There, he delivered a paper said to have simulated liquid numerically. Bitcoin is often compared to water in its resiliency, though is completely unrelated here. Named for its loose relationship to the gambling icon Monte Carlo, the algorithms rely upon random sampling, and appear to have been initially used in mechanical engineering applications.

In finance, however, “we assume that the future behavior of the price of an asset will be similar to its past behavior, and we generate a lot of random versions of that future, called random walks, similar to the past. That’s done taking random samples from the past and stacking them together to build each one of those random walks,” Mr. Barata explains.

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Capital Management Founder: Now Is the Time to Invest in Bitcoin

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The price of bitcoin has yet to deliver a turnaround in value, but with this downward trend now is the time to buy, says the founder of Capital Management.

Speaking to CNBC, Brian Kelly, portfolio manager of the BKCM Digital Asset Fund, said:

Now, when everyone is saying … it’s over, that’s it, bitcoin is dead, for the 175th time. Now’s the time you start looking at it, on the buy side.

According to Kelly, we are in a ‘hands-off’ period as uncertainty remains over the crypto market. With heightened interest from traders brings more global regulatory pressure. South Korea’s government is reportedly planning to hit digital currency exchanges with tax bills while the country’s banks are expected to ban anonymous cryptocurrency trading accounts by the end of January. As a result, these two factors alone are producing an impact on market prices.

Yet, despite regulatory uncertainty within the market and fluctuating values, the money is still coming in, said Kelly, adding:

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Loapi mining malware could murder your mobile

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This year’s surge in crypto interest has inevitably attracted a more sinister side, cybercrime. With newbie traders and hodlers flocking to the crypto scene the number of exploits and vulnerabilities will increase granting greater opportunities to hackers.

Browser mining is nothing new and has been around since 2013 however it is getting more sophisticated. Just last week malware was discovered embedded in Chrome extensions for Facebook Messenger. The most common software is Coinhive which can be embedded into websites to start mining using reader’s computing power whenever they access the site. It runs surreptitiously in the background and leeches off the CPU which will slow the machine down considerably causing additional wear and tear, not to mention the electricity consumption.

As smartphones have developed into hand held computers with multi-core processors and plenty of RAM they too have become targets for cybercriminals and malware. Cybersecurity firm Symantec have reported a 34% increase in malicious mobile mining apps. Most of them are set to mine Monero because of its privacy and anonymity protocols.

Russian cybersecurity firm Kaspersky has discovered another form of mobile mining malware called Loapi which is even more sinister. Researchers used a test phone in their lab to run the malware for studies however after just two days the device had been destroyed;

 “Because of the constant load caused by the mining module and generated traffic, the battery bulged and deformed the phone cover,” 

Android users get infected via compromised adverts or fake content such as anti-virus products or adult apps.  The Loapi Trojan will install itself and take Admin rights over the device, often masquerading as an anti-malware app itself. In addition to crypto mining Loapi will plague the device with unwanted ads, sign up to paid subscriptions, use mobile bandwidth to launch DDoS attacks and download additional modules. The Kaspersky blog went on to state;

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Ethereum Price Tops $900 on CEX, Possible Haven for Investors

Almost every single crypto-currency has seen massive gains in the past few months, Ethereum included. But with the recent news about Bitcoin Cash being listed on Coinbase, much uncertainty has been thrown into the market.

The Biggest Smart Contract Platform

Ethereum has more than tripled in the past three months, with the market price at $255 just three months ago to over $800 today. The rally appears to not be stopping, however, as some exchanges are posting numbers well above market price. On one exchange, CEX.io, the price broke through the $900 barrier. While it has dropped since, it’s clear that as people start researching Bitcoin and digital currencies in general, altcoins are valid options for those looking to diversify.

Ethereum has been around since 2014 and its native currency is the “Ether.” It touts itself as a “Smart Contract Platform,” as opposed to Bitcoin being a payment platform. A smart contract is simply a piece of software that executes an action, and once executed cannot be stopped/altered. Since it is all code, the contract can be audited and verified that it will do exactly what the developer says it will do.

An example smart contract on Ethereum. Source: https://www.ethereum.org/token.

Here is a very simple example of a smart contract. Let’s say I’m a YouTuber, and you’re a company looking to advertise on my videos. I put a short ten-second ad at the beginning of each of my videos, and in return, you’ll pay me $1 for every 1000 views. Now I could trust you so that when I reach a view threshold, you’ll pay me. Or we could get a third party involved to ensure I get paid. But with a smart contract, it could automatically pay me. It could check the YouTube video statistics for views every so often, and pay me accordingly. All in a completely trustless way.

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