Cryptoassets: Season 3: Episode 7 – The Birth of Altcoins

Guys! It’s been a long time since doing one of these, and it’s probably because I fell a bit out of the system.  However, I’m back and I’m giving you some information in terms of the other altcoins.  Lots of this information I came across was both interesting and head-scratching.

Within a couple of years of launching, it had become clear that bitcoin was the first fully decentralized cryptocurrency to gain significant adoption, but there were some aspects with which people were not fully satisfied.  For example, bitcoin’s 10-minute block time mean that, depending on when a consumer hit send, it could take up to ten minutes, sometimes more, for the transaction to be appended to Bitcoin’s blockchain.

The delays happened because of the merchant and consumers.  However, it got better as time progressed.

Bitcoin’s first darling…Namecoin

This was the first of its kind.  However, it was more about utilizing blockchain than being a cryptocurrency. There’s really nothing else to say about this coin.

Litecoin

Litecoin was released in 2011 and still remains the one that retains its significant value to this day.  It was developed by Charlie Lee, a graduate from MIT out there in Boston, Mass, who was a software engineer at Google.

He launched it in 2011 of October and was an immediate hit because it was much faster than blockchain’s transaction times.

Ripple

This was created in 2004.  I had no idea that Crypto was created that far back, but Ryan Fugger, a web developer in Canada, worked on this project before Satoshi and Bitcoin.  Ripple also didn’t have miners, but instead had its own algorithm that relied on subnetworkers.  Let’s just say these algorithms were part of a larger decentralized network.  That’s all.

Dogecoin

It’s arrival was in 2013, and being that it was just a joke, Jackson Palmer bought the domain named dogecoin.com and then he got the attention of a lot of people.   After it’s launch, it’s network grew to 70 million in only seven weeks.  Shortly after, it dipped below 20 million.

Dash

Dash, and it’s developer, Evan Duffield, got off to a rocky start.  The coins went on a significant surplus and the reliability had become bleak because the developer not focusing 100% of his attention on dash.

Zcash

Zcash was another cryptocurrency that had a lot of promise.  It reached $1k per coin rather quickly.  At one point, the value peaked at 1 zcash for 3,299 bitcoin, or 2$ million dollars at the time.  You can only imagine what WOULD’VE happened.

After the hysteria, Zcash calmed down and traded between a cool $40-50 bucks per share.

By the end of 2016, the price of bitcoin had reached a level just below $1,000 USD, and there were over 800 cryptoassets in a market that totaled over $17 billion.  At the time, the top assets in order of network value were: Bitcoin, Ethereum, Ripple, Litecoin, Monero, Ethereum, Classic, and Dash

The innovative investor may note from the list that Ethereum follows Bitcoin.

Podcast

Cryptoassets: Season 3: Episode 6 – Digicash & The Miracle of Bitcoin

Why Crypto

Sometimes the word crypto makes people shudder, perhaps because they associate it with illicit activity, but that’s a mental bias that is important to overcome.  Crypto is simply a tip of the hat and a shortening of the key technology underlying these systems: cryptography.  As discussed, it’s the science of securely transmitting data so that only intended recipients can make use of it.  Cryptography is used to ensure that cryptoassets are transferred to the intended recipients securely.  Given our digital world and the increasing prevalence of hacks, the secure transmission of resources is paramount, and cryptoassets have such security in spades.

As I’ve said before, there are lots of things that need to happen before crypto, in general, goes to the next level.  Hackers are going to have to be neutralized at some point in order for this to really work.

The Story of David Chaum

Does anyone remember DigiCash’s ecash? Well, basically in the mid-90’s, David Chaum founded a digital payment system called Digicash.  He was a technical genius, but lacked all other skills in terms of personal development (thus why I tell everyone that they better start learning ASAP). Bill Gates, who I’m not particularly fond of, came to him with a 100 million dollar offer — he turned it down.  Netscape also wanted to know about it, but they didn’t like Chaum’s attitude at all.  In 1996, Visa wanted to invest $40 million into the company but Chaum wanted 75 million.

This was the fall of Digicash and they went bankrupt in 1998.  If not, ecash would have been integrated into all browsers and we wouldn’t have to make online payments with credit cards.

Amazing what happens when greed, selfishness, and a rotten personality (and romanticism over an idea) can do to your business and potentiality.

The Miracle of Bitcoin

So, the miracle of bitcoin is remarkable.  We know that.  We know that we can’t see it, touch it, or smell it, which is interesting because I’m still trying to figure out how miners actually work (and will in the later chapters). Paper currency has its value because it’s literally agreed upon.  Every member in society has agreed that this sheet of paper means money.  That’s why it’s famous.

When bitcoin launched, however, it had zero value.  The supporters valued bitcoin, though, and then it became big.

What does this mean? The power of it all lies in the hands of the people, and I truly think it’s unbelievably remarkable!

Podcast

Cryptoassets: Season 3: Episode 5 – The Taxonomy of Cryptoassets

As I was saying in the last blog, bitcoin had a hell of a spike in November of 2013, capturing the attention of the People’s Bank of China, which then slapped restrictions on bitcoin’s use. Shortly after, FBI captured the creator of the Silk Road, Ross Ulbricht,  and then the collapse of the biggest exchange happened.

Bitcoin’s price declined over the next two years; meanwhile, developers were building different gadgets to atop it.  When this happened, developers didn’t really want bitcoin; and instead, they would much rather want to use blockchain. Of course blockchain was underlying Bitcoin, and then there was the explosion in the blockchain technology space, catapulting other coins into the sphere.

The Taxonomy of Cryptoassets

As of March 2017, there were over 800 cryptoassets with a fascinating family tree, accruing to a total network value of over $24 billion.  At the time, bitcoin was the largest and most widely transacted of these assets by a wide margin, with a network value of $17 billion, accounting for nearly 70 percent of the total network value.  The next largest cryptoasset by network value was Ethereum’s ether at over 4 billion. – Author

You can see how fast crypto moves.  Potential investment opportunities are identified quickly by investors when they look into the digital siblings….and that’s why it’s time to dive into specifics.

Cryptocurrencies, commodities, and tokens

Cryptassets are either cryptocommodities or cryptotokens, which are finished digital goods and services.  Lots of this can become confusing, so my goal is to explain in simple English and how it relates to you.

If we look at money, which is in your wallet or bank, it’s made on paper that has no value; however, it has the illusion of value. If we look at what commodities are, they’re essentially oil, wheat, copper, steel — those are common commodities.

Digital commodities, on the other hand, are compute power, storage capacity, and network bandwidth.

These digital commodities, when provisioned via the blockchain network, become just as important and turn into cryptocommodities.

Cryptokens are in the beginning stage of it all.  Because they require currency and commodities, it will take longer to gain traction.

This is essentially what these are, and in the next podcast, I will be talking about the cryptocurrencies today.

Listen to “Cryptoassets: Season 3: Episode 5 – The Taxonomy of Cryptoassets” on Spreaker.

 

 

Cryptoassets: Season 3 – Episode 4 – Scammers on Apple’s App Store & The Beginning of bitcoin

Scammers: Apple’s App Store Compromised

So, it’s been probably a week + since I’ve done a podcast, but I’ve been monitoring a lot of news and it’s getting a little crazy in the crypto world.

Almost every week passes by and there are scams everywhere, which is why I’m telling people to hold back until regulations and other things are implemented to protect people who are actually investing.  For example, the Appstore (of course — on Apple), has a lot of fake apps that phish for users to scam them.  Face value it has a nice photo and great reviews, but again, all the reviews are fake and that’s why aesthetics always trump those who don’t know what they’re doing.

Because I love going over Bitcoin and everything about blockchain technology, I’m not encouraging anyone (who’s a beginner) to dive in a world that they could possibly be taken advance of.  It’s in the beginning stage, and there have been a number of victims who fall to “live” hackings by hackers around the world.  This is probably the biggest downside of bitcoin, because at anytime, virtual coins are unprotected and can be stolen.

Cryptography

Let’s just put it this way.  Every time we type in a password, pay with a credit card, or use WhatsApp, we are enjoying the benefits of cryptography.  This is implemented in the real world right now, but not in the crypto world, which is why so many people end up being scammed.

The other topics that are mentioned get into the technicalities of cryptography, which isn’t useful for “us” kind of people. It goes over blockchain, how it works and other variations of the system. So, time to get into the early years of Bitcoin.

Bitcoin’s Early Years

So, in the dawn of 2011, a software application was released that would make Bitcoin famous; but it was also the time that Bitcoin developed its dark reputation.

Silkroad

People would go so far to say it’s only a place to buy drugs, but this developed the dark/deep web even more.  Bitcoin was used as the main currency on the dark market, and it wasn’t only drugs, it was child slavery, all types of ammunition, hitmen.  You name it.  This is how it began.

This lead to the resurgence and life of bitcoin.  It drove bitcoin from a $10 price to a $30 price in just a week.  Two months later, it went from $30 – $230 in a month span.  There was a bailout of Cyprus that was associated with losses that citizens took on their bank account balances as the core driving point of why it spiked so high in a small amount of time.

While the spring of 2013 was notable, it was a preview of bitcoin’s grand opening to global attention.  This came six months later, in November of 2013, when increased demand for bitcoin in China along with interest from the U.S. Senate on the innovation led to a stratospheric ascent through $1,000 that grabbed international headlines.

Podcast

 

Cryptoassets: Season 3 – Episode 3 – The Birth of Bitcoin

Financial markets, as said in my last post, took the heaviest losses in United States History.  However, somewhere in the world was this many Satoshi formalizing what’s going to take the world by storm.

A day after publishing that white paper, Satoshi sent an email called “The Cryptography Mailing List”.

He later wrote: “you will not find a solution to political problems in cryptography….but we can win a major battle in the arms race and gain a new territory of freedom for several years.  Governments are good at cutting off heads of centrally controlled networks like Napster, but pure P2P networks like Gnutella and Tor seem to be holding their own.” – Satoshi

On the 9th of November in 2008, Bitcoin project was registered on SourceForge.net. Wall Street continued crumbling, Satoshi laid-low, and then nine days after that, the first ever transaction using bitcoin took place.

Fact: A dollar investment in Bitcoin in 2008 would’ve been worth around 1 million dollars at the end of 2017.

What I find so unbelievably fascinating about all of this is while the US government was injecting trillions into the system to fight off the significant deaths and greed of wall street, Bitcoin’s birth cost NOTHING.

Since Satoshi disappeared, Bitcoin has unleashed a tidal wave of disruption and rethinking of global financial and technological systems.  Countless derivations of Bitcoin have been created — systems such as Ethereum, Litecoin, Monero, and Zcash — all of which rely on blockchain technology, Satoshi’s gift to the world.  At the same time, many financial and technological incumbents have moved to embrace the technology, creating confusing around all the innovation unfolding and what is most relevant to the innovative investor.  – Author

And now it’s time to talk about the lower case b and upper case B.

  • Bitcoin equals software.
  • bitcoin equals currency.

The author of this book emphasized that to truly understand Bitcoin, one has to move beyond the thinking that the media has pressed upon their consciousness in terms of being a currency/software for criminals.

If we look at history, the majority of wars were funded by “physical” currency, so if Bitcoin/bitcoin is bad because it’s used on illegal markets, we should possibly do away with ALL CURRENCY.

Over 100 media articles have jumped the opportunity to declare bitcoin dead, and each time they have been proven wrong.

To jump just a little off topic, remember those tools on wallstreet before the great crisis of 2008 saying that “Tesla is a cold stock!”  Yeah, proven wrong.  Bitcoin allows transactions to be settled in an hour as opposed to a couple of days.

Let me give you another example.  Transferwise, which was launched maybe in the last couple of years, has overtaken Paypal.  Honestly, I should be able to transfer money from my KTB account to my friend’s B of A account in America in an hour.  However, those middlemen, who Gary Vee has talked about for so long, always gets a piece of the pie. Bitcoin and blockchain will take all of that away, and this is why so many services are terrified and shaking in their boots because it could mean the end of them.

Bitcoin has something arguably more impressive than uber, Airbnb, and LendingClub to be a multibillion-dollar companies in their own realms.  Bitcoin let’s anyone be their own bank. – Chris Burniske

Listen to “Cryptoassets: Season 3 – Episode 3 – The Birth of Bitcoin” on Spreaker.

Cryptoassets: Season 3 – Episode 2 – Satoshi Nakamoto & 2008 Financial Crisis

Welcome back to another Crypto blog and I first want to talk about this financial crisis on a scale you’ve never heard.  The amount of collapses that happened through banks and private companies in 2008 is UNHEARD of.

Let’s kick this off with Satoshi, Satoshi Nakamoto.  No on ein the world knows who he is.  He/they have remained anonymous…and still to this day, no one knows anything.  Apparently he’s living in Japan, there are stories of him being an Australian chap — which was later debunked — and the mystery goes on.

Why do I mention such a man? Well he’s the one that published a paper that founded Bitcoin and the basis of blockchain technology.  He’s the one that has showcased an array of different topics including cryptography, computer science, economics and others.  Nonetheless, he was completely away of Wall Street (a company that hasn’t been audited in 60 years)’s growing instability and was putting the final touches on the concept of Bitcoin.  In August of 2008, bitcoin.org, the home website for information on Bitcoin, was registered.

On Halloween day of 2008, Satoshi then released the Bitcoin white paper, which served as the genesis for every single blockchain implementation.

“We have proposed a system for electronic transactions without relying on trust.” – Satoshi

Notable 2008 Debacles

Bear Stearns got slammed by the house market’s downward-spiral, ultimately getting bought out for $2 a share by JP Morgan, just 1% of the value from a year before. 

Much of the crisis was born on the irresponsibility lending, known as subprime loans. 

Historically, when a bank issued a loan, the bank was on the hook for ensuring that the borrower repaid the funds.  However, in the case of many subprime loans, one these loans issued to borrowers, they were packaged, or securitized into complex CMO’s (collateralized mortgage obligations).

So basically this risk was passed on like a hot potato through the financial markets.  People didn’t know about the instability of CMO’s, but let’s just say they were outdated financial architecture.  What happened in 2008 was global investors, too, being involved with these garbage CMO’s.

Toxic assets plagued Fuld and other groups, significant losses occurred in the billions, and then CEO’s of the biggest investment banking groups had meetings at the Federal Reserve on what to do with the Lehman Brothers, a company that has been long standing for 164 years at the time.  Well, if Lehman filed for bankruptcy, financial firms that did business with Lehman would also lose billions, triggers financial armageddon.  And so it happened, Merrill Lynch was bought by Bank of America and Lehman filed for Chapter 11.

To sum this up, it got ugly real quick on wall street with global investors getting thrown into pure pandemonium.

However, The Birth of Bitcoin happened.

Listen to “Cryptoassets: Season 3 – Episode 2 – Satoshi Nakamoto & 2008” on Spreaker.

 

 

Season 3: New Book Series! Cryptoassets!

It’s been an absolute long time coming!  I was thinking about it while walking up and down the aisles of the bookstore at the shopping plaza where I work.  I asked people and my content writer some questions about what book should I dissect next.  Over the past few years, I’ve gone over a lot of things in terms of personal development: Lewis Howes, Dale Carnegie, Lisa nichols, Stephen Covey….you name it.  However, Tim Ferriss, which has had a lot of plays on my podcast, and Tony Robbins, which has also had a fair amount of plays, are the only books I’ve gone over in terms of money and time-management.

So, I think it’s time.  Yes, for those returning, I was dissecting the Tony Robbins: Unshakeable book for some time, but I do believe that the historical investing will become obsolete.  When the markets crash within a three year period, the American public will have had enough with how corrupted the system is.  I think now that we can control our own assets, and with the emerging blockchain, it’s time!

Testimonials

Newcomers often try to wiggle their way into the world of accepted financial tools.  Most fail miserably.  But cryptocurrency and its accompanying blockchain technology have made their mark and will likely have an ongoing impact on how we all do business.  Burniske and Tatar (authors of this book) have written an increidble comprehensive book that explains what you need to know about this new asset class. – Douglas Goldstein

Cyptoassets provides a one-stop shop for learning about this new asset class.  You’ll learn about their colorful histories, how to apply fundamental valuation techniques, and practical tips to navigate the at-times turbulent markets. – Matthew Goetz

This book is a must-read for an financial advisor who wants to stay on top of the shifting asset and technological landscape.  Advisors would be wise to familiarize themselves with cryptoassets before their innovative clients approach them for an intelligent cryptoasset discussion! – Fred Pye

Chapters

  • Bitcoin and the Financial Crisis of 2008
  • The Basics of Bitcoin and Blockchain Technology
  • “Blockchain, Not Bitcoin?”
  • The Taxonomy of Cryptoassets
  • Cryptocommodities and Cryptotokens
  • The Importance of Portfolio Management & Alternative Assets
  • The Most Compelling Alternative Asset of the 21st Century
  • Defining Cryptoassets as a New Asset Class
  • The Evolution of Cryptoasset Market Behavior
  • The Speculation of Crowds and “This Time Is Different” Thinking
  • “It’s just a Ponzi Scheme, Isn’t It?”
  • Fundamental Analysis and Valuation Framework for Cryptoassets
  • Operating Health of Cryptoasset Networks & Technical Analysis
  • Investing Directly in Cryptoassets: Mining, Exchanging & Wallets
  • “Where’s the Bitcoin ETF?”
  • The Wild World of ICOs
  • Preparing Current Portfolios for Blockchain Disruption
  • The Future of Investing Is Here!

With so much information out there with people talking about Crypto from online blogs, this is really going to be the best breakdown because I got the book of the ages on my hand.  Stay tuned for the introduction Friday!

Podcast

 

 

Tony Robbins: More Chatter on Index Funds & Mutual Funds

“But how do you pick the right funds? There are certainly enough to choose from. As we mentioned earlier, there are about 9,500 mutual funds in America—more than double the number of publicly traded US companies! So it’s safe to say the mutual fund market is a tad saturated. Why do so many companies want to be in this business? Yup, you got it: because it’s fabulously lucrative!
The trouble is, it tends to be much more lucrative for Wall Street than for actual customers like you and me. Don’t get me wrong. I’m not suggesting that the industry is consciously out to screw us. I’m not suggesting that this is a business full of crooks or charlatans! On the contrary, the majority of financial professionals are intelligent, hardworking, and thoughtful. But Wall Street has evolved into an ecosystem that exists first and foremost to make money for itself. It’s not an evil industry made up of evil individuals. It’s made up of corporations whose purpose is to maximize profits for their shareholders. That’s their job.”

Excerpt From: Tony Robbins. “Unshakeable.” iBooks. https://itunes.apple.com/us/book/unshakeable/id1146849403?mt=11

Scary, isn’t it? Was asked a question recently about “how can we take a leap of faith when we live in such an uncertain world?” It’s an excellent question.  If you look at the Crypto markets right now, we’re heading for a some really nasty times — maybe? Some of the investors are still amazingly optimistic, but I’m still a bit terrified about it.

That’s when we get into Index Funds…and the reassurance in this chapter glistened my eyes.

Index funds take a “passive” approach that eliminates almost all trading activity. Instead of trading in and out of the market, they simply buy and hold every stock in an index such as the S&P 500. This includes companies like Apple, Alphabet, Microsoft, ExxonMobil, and Johnson & Johnson—currently the five biggest stocks in the S&P 500. Index funds are almost entirely on autopilot: they make very few trades, so their transaction costs and tax bills are incredibly low. They also save a fortune on other expenses. For one thing, they don’t have to pay enormous salaries to all those active fund managers and their teams of analysts with Ivy League degrees!” – Tony Robbins

“When you own an index fund, you’re also protected against all the downright dumb, mildly misguided, or merely unlucky decisions that active fund managers are liable to make. For example, an active manager is likely to keep a portion of the fund’s assets in cash, ready to invest if an enticing opportunity arises—or ready to meet redemption requests if lots of investors decide to sell their shares in the fund. Keeping some cash on hand isn’t a bad idea, and it’s handy when the market falls. But cash doesn’t earn a return, so it will underperform stocks over time, assuming that the market continues its general upward trajectory. Ultimately the resulting “cash drag” tends to have a negative impact on the returns of actively managed funds.
What about index funds? Instead of sitting on cash, they remain almost fully invested at all times.”

 

Tony Robbins: Goldman Sachs + What To Do Next: Hidden Fees and Halfway Truths

Foreword about Goldman Sachs – By Jiun Ting Yong

Do you know what is Goldman Sachs? A very well – known investment bank in Manhattan, Wall Street in New York, the USA. An investment bank that was well – known for their job in analysing economics and financial markets for investors and potential investors to invest their money in the stock markets, bonds and emerging markets. They are so good with their jobs in underwriting bonds for potential investors to buy their clients’ bonds and some even involved government backed bond funds. Goldman Sachs started back in the 19th century by Marcus Goldman where he was joined by his son – in – law Marcus Sachs that became today well – known name.

As a typical investment bank normally they underwrite bonds and writing financial reports for investors who are looking at doubling their assets; mostly would read their report to make themselves rich. However, some of their trade can be very controversial. Remember the 2008 Global Recession which was the cause of excessive spending through mortgages where the middle class signed  mortgage deals with low – level interest rates?  Be careful — it isn’t that a huge sums — but if you were unable to serve the interest, then you needed to pay for ‘additional interest’ known as the penalty. That’s the root of all problems when you are unable to serve your loan, the investment bank and commercial bank would just forfeit your home by repossessing it, except for the Obama piece of legislation that managed to fight against these huge sums of forfeiture where people lost their home.

Yikes! So now you guys got the rundown of what Goldman Sachs is about, unfortunately.  I saw it recently in a movie where an ego-maniacal character played a banker from Goldman, rudely telling commuters to get away from him and demeaning the lower-middle class individuals on this train.

I then did some research and it says that Goldman is the main reason to why the financial crisis happened to begin with.

So, when I started reading about all this, I got even more scared about investing because that particular individual worked for Goldman, who’s a banker/investor, who handles our money and looks to make themselves rich by hitting us with massive penalties.

“I often ask people “What are you investing for?” I get a variety of answers: from “high returns,” to “financial security,” to “retirement,” to “a beach house in Hawaii.” But before long, nearly everyone’s answers begin to rhyme. What most people really want, regardless of how much money they have today, is freedom. Freedom to do more of what they want, whenever they want, with whomever they want. It’s a beautiful dream, and an achievable one. But how can you sail off into the sunset if your boat has a hole in it? What if it’s slowly but surely taking on so much water that it’ll sink long before it reaches its destination?”

“I hate to tell you this, but most people are in exactly this position. They don’t realize that they’re doomed to disappointment because of the gradual—but ultimately devastating—impact of excessive fees on their financial well-being. What kills me is that they have no idea this is even happening to them. They have no idea that they are victims of a financial industry that is surreptitiously but systematically overcharging them.
Don’t just take my word for it. The nonprofit organization AARP published a report in which it found that 71% of Americans believe that they pay no fees at all to have a 401(k) plan. That’s right: 7 out of 10 people are entirely unaware that they’re even being charged a fee! This is the equivalent of believing that fast food contains no calories. Meanwhile, 92% admit that they have no idea how much they’re actually paying. In other words, they’re blindly trusting the financial industry to look out for their best interests! Yup, that’s the very same industry that brought about the global financial crisis! You might as well just hand over your wallet and the password to your debit card.”

Excerpt From: Tony Robbins. “Unshakeable.” iBooks. https://itunes.apple.com/us/book/unshakeable/id1146849403?mt=11

Since this is going to be a hell of a long story, I do suggest that all of you tune into the podcast down below.

 

The Volatility of The Cryptocurrency Exchange Wallet (longread)

By Jiun Ting Yong

The price of Bitcoin and its other cryptocurrency competitors will plummet; and after a few weeks, the price of Bitcoin will increase. These trends are normal for people who are involved in trading Bitcoin and other alternative cryptocurrencies, unlike investors who invested in Bitcoin for its value.

The major reasons why cryptocurrency is so volatile is because of bad news (which isn’t always true) that stops people from adopting Bitcoin. Trading in Bitcoin is unlike trading in stocks because Bitcoin is volatile to bad news — just recently, the American FBI had closed a criminal organisation that stored their assets in Bitcoin that took the American FBI years to track them down in the dark internet market for their drug trade. When the FBI shutdown the Silk Road marketplace, it caused the prices of Bitcoin to plummet. Then people wondered about the trust of Bitcoin among the investors.

As the prices fluctuated based on free market forces, the bad news lead to uncertainty, which lead to traders receiving the news and end up losing a lot of money.  However, some people recognised that the drop in prices was an opportunity to buy Bitcoin at low prices, then sell it with a huge amount of money when prices are ripe for them to sell.

The second reason why Bitcoin will fall is a breach of security of cryptocurrency wallet exchanges like the recent breach of security in the Ethereum wallet exchange company that caused the prices of Ethereum drop significantly — just like the Hong Kong bitcoin exchange, Bitfinex, that created a turbulent wave of confusion. It caused many traders to panic and sell off their cryptocurrency with the right prices to minimise their risk of losses. These breaches only became a cause of concern by people who questioned the protocols. As a result, people seem to be less confident about the usage and hampered them from adopting them as a form of currency for day to day transactions. This is because Bitcoin and other cryptocurrencies were built on open source software. Therefore, the protocol allows other independent software developers to change the source code of a protocol for a cryptocurrency.

Another major reason will be the tax treatment of an authority against Bitcoin and other cryptocurrencies, which are also affected by the volatility, too. This is because the governments began declaring that investing in cryptocurrencies and Bitcoin will be considered an asset. Therefore, they are subjected to taxations and those cryptocurrencies exchange wallets, like the London based cryptocurrency exchange wallet company, Luno, was subjected to Malaysian Inland Revenue Board for tax evasion investigations. However, offshore banking hub like Switzerland is massively adopting cryptocurrency as an instrument of investment and blockchain into their financial services system by incorporating new types of investment companies like a cryptocurrency assets management firm because they aspired to become the centre of cryptocurrency investments and blockchain. This move isn’t new because Dubai, UAE and Malta were adopting blockchain technology just like their counterparts, Japan, South Korea, as well as American banks in Wall Street.

Furthermore, the volatile of cryptocurrencies in the market was caused by foreign direct investments in high inflation countries like Argentina. This is because people can use Bitcoin to offset the high inflation rate by denominating them into Argentine Peso from outside of Argentina. Therefore, funders could earn a higher yield return on their investment. Also, the Venezuelan government did denominate their own cryptocurrency known as the ‘Petro dollar’ to raise some funds for to pay for their country’s debts that drove the country into a state of chaos; because the country was on the verge of bankruptcy due to excessive wastage of state’s finances.

Overall, all of these are the causes of what’s happening and what will probably continue happening, but it doesn’t really hamper people from adopting Bitcoin and other cryptocurrencies. This is because when you look closely, many people are adopting Bitcoin and other cryptocurrencies in a slow and fast pace dating a few years back after Brexit had gone viral, there were Bitcoin ATM machines popping up in London as well as in some parts of Australia. They are on the way to becoming mainstream where it will be denominated to the USD and it is going to happen as soon as we thought! The future is exciting and filled with massive innovation.