Monday, August 21, 2017

Is Bitcoin in a Bubble!


PETER SCHIFF - Bitcoin may look profitable, this is a trap that you should never be fooled by
Published on Aug 15, 2017

Is Bitcoin in a Bubble?
Silver Fortune
Published on May 23, 2017
The value of Bitcoin (BTC) has exploded in the past month, driving the price over $2000. Is Bitcoin in a bubble, or will it continue higher in the future? Thanks for watching!

Bitcoin SUCKERS RALLY now under way
Published on May 25, 2017

Recorded 5/24/2017: The Health Ranger explains why the current Bitcoin bubble is a speculative "irrational exhuberance" sucker's rally that's going to burn most of the noobs who are buying in.
Learn more at 
THE BITCOIN BUBBLE - Andreas Antonopoulos
London Real 
Published on Aug 25, 2015
Is Bitcoin In A Bubble? Yes or No?
by Matt Sherriff
Posted on June 14, 2017
Is Bitcoin in a bubble? That is question on many peoples minds, especially those reading certain headlines.
As Bitcoin continues on a bull trend the question of bitcoin being in a bubble continues to arise. There are multiple factors attributing to this and we are going to go through a balanced argument and come to some kind of conclusion. Everybody has their own opinion in the market, some argue for the bubble, some against, others are impartial.
Bare in mind, I won’t get to my opinion until the end. I am going to highlight some main arguments being made for both sides.
So let’s look into some things pointing to Bitcoin’s bubble.
Yes, There Is A Bitcoin Bubble
Historically when asset classes, stocks, companies etc rise at an alarming rate they are in for a harsh come down. There has been a lot of talk about the tulip mania centuries ago to explain what is happening. The story in short; there was a time where tulips became very popular and a hot commodity. High value was put on them and they were being traded for goods/services and certain individuals were even paying a high price for them just to have. The tulip bubble burst and they became a regular flower once again. Some are saying this is the same type of thing with Bitcoin, a time of hype and headlines driving the price. I will explain my personal opinion later but tulips make for a terrible form of currency, so it’s much different.
There is a lot of speculative investing going on. People are not getting into bitcoin for it’s first purpose; as it’s made for transactions and illuminating the middle man when moving value digitally. It is not being used for your morning coffee or bacon at the store. Many individuals are getting involved on the premise that it will continue to rise and not necessarily understanding its underlying purpose.
It isn’t real. Gold is physical, resilient and hard to lose. Bitcoin is in digital space, easy to lose and even if you cold store it (in a offline wallet) securely and is not that easy to use. This bubble stems from a lot of hype and there will come a pop once the trend dies off.
No, There Is Not A Bitcoin Bubble
Bitcoin is a true supply and demand platform that is not manipulated like central markets. The term ‘bubble’ has been applied to centralized markets which have been stretched and over leveraged through a fiat system which operates differently.
There is a limited supply. Scarcity is built into the bitcoin framework as there will only ever be 21 million mined. As I write this, just over 16 million have been mined, so stretching this network past a certain capacity is not possible.
The security of the blockchain is high level. The decentralized network works well with security and extremely difficult to hack because of how verification works in the network through consensus of machines all over the world. Security helps with trust. Trust is the aim of the game with any currency.
The world has never seen something like this, a decentralized value of exchange, which the world is slowly waking up to. The fact the market is reacting like this is something which could not be predicted.
My Conclusion | Is Bitcoin In A Bubble?
I see an interesting pyramid that has occurred over the years. Tech people are at the top of the pyramid as they have been pushing and holding cryptocurrency because they understood its value and the fact it is a solution provider. Those people understand code and crazy computer crypto graphical stuff. The next people are not the coders, but big picture thinkers that can see the power of this and get behind it, buy it and hold it. The next set of people are everyone else who waits for it to get big, or somewhat big, and then jump in. I believe I am somewhere in the sentence before the previous one. All things considered, we are still at the very early stages on this industry. Just like the internet in the 80s started out with a lot of hardship and different views, we are in a much different place with 4G data and wifi hot spots. The same change and innovation will happen with blockchain technology and decentralized currency, it’s just a matter of where it’s heading. The future is an exciting place.
**Don’t get me wrong, it is an amazing time to get into the cryptocurrency market. Speculation comes when this happens, “I’ll throw a little money in bitcoin because it seems to be doing well, let’s see how it goes in the future”. That is all well and good, but that’s speculative. What I am trying to say is that the uninformed using this as a pure investment tool could have a speculative mindset. For me, bitcoin is a borderless currency that governs itself, I like having some of the as my currency.**
Furthermore, more and more hedge funds are getting into this space to diversify their portfolios into the digital asset space. That’s always an interesting factor when looking at trends and money being injected into the market.
In that sense, I believe that Bitcoin is in some kind of bubble as I think a lot of people that are involved don’t truly understand what they have in their hands and they are speculatively investing because they see the hype, growth, upwards trend etc. That is why I make a lot of content to hopefully help people understand this space either before or after they get involved with cryptocurrency to know that there are a lot of factors in play going forward.
At the same time, Bitcoin is a beautiful supply and demand market that reacts very authentically with the factors attributing to it as it’s decentralized and cannot be manipulated. The term “bubble”, like I mentioned above, has always been applied to over stretched markets through our centralized systems. We have never seen this type of movement or market before. The housing market in 2008 collapsed because it was over stretched and was far from authentic or transparent. If the ‘Bitcoin bubble does burst’, it will be for very different reasons which is why I don’t think the general term ‘bubble’ can be truly tied to what we have here.
Analyzing trends; supply is capped, demand is rising, security is crucial, trust is paramount so it’s interesting to think what will happen in Bitcoin’s future. Keep in mind, after every bear run (increase in price over time), what happens? The bear comes rolling down the hill (decrease in price). And there is nothing wrong with that, the market goes up and down, but thinking what will happen in the years to come is the real question?
Bitcoin has a bumpy road ahead of it as developments and innovation will take place to improve what it is. All I know is we are at the dawn of one of the largest transfers of wealth in human history, whether that is with bitcoin, or something else in this decentralized space.
Bitcoin’s Hidden Pitfalls and Dangers
By Tyler Cohen Wood
May 30, 2017
Last week brought news that Bitfinex, a leading Bitcoin exchange, lost an estimated $65 million due to a recent hacking incident. Bitfinex has stated that as a result, their users will lose 36% of their funds to make up for the losses incurred by the hack. Bitfinex is only one of the latest targets in hacks against a Bitcoin or online currency exchanges. Bitfinex has stated that they will eventually either reimburse users or offer stock options in their parent company to make up for the loss. Other exchanges have been forced out of business, leaving their users holding the bag. In the wake of the Bitfinex hack, people and businesses are getting concerned about the security and use of Bitcoins and other online currencies.
Bitcoin is an online digital currency that can be used to trade directly from person to person or from businesses or Bitcoin services like exchanges in order to purchase items. Subway, Overstock, PayPal, and many other legitimate companies accept Bitcoins and there are advantages to the online currency.  Bitcoin is the best known online currency, but it’s certainly not the only one.  Others include Litecoin, Peercoin, and Primecoin.
How Does Bitcoin Work?
Bitcoins are most commonly purchased using regular currency in “exchanges” like Bitfinex.  Bitcoin is a decentralized currency, meaning there is no one holder of all Bitcoins, which sets it apart from banks and other “brick and mortar” financial institutions.  If an exchange gets hacked and the losses are substantial, users run the risk of losing either a percentage of or all their Bitcoin balance in an exchange, as could be the case for users of the Bitfinex exchange. Cyberattacks on exchanges occur fairly regularly.
Most users access Bitcoins using a “wallet”. The wallet is a user interface that shows a user’s Bitcoin balance, can create user account addresses, and also contains the secure encryption keys that authenticate each transaction. Transactions are verified by the Bitcoin network and kept in a public ledger which is accessible to all users, sort of like a public bank statement. This ledger is called a “blockchain”. The ledger only shows the account number and the transactions but not sensitive details about the user, such as real name, credit card info or email.
Once a number of transactions have been made the block is encrypted and moves to the next block in the chain. As more transactions are made, new blocks are added to the public ledger, like a chain, hence the name “blockchain”. A blockchain is shared by all users of the Bitcoin network, so it is difficult for a middleman to tamper with a transaction without everyone being able to notice the discrepancy.
Keep in mind, the actual tally of coins or transactions is contained in the public ledger or blockchain and not stored in the actual wallet. Some Bitcoin experts recommend that a unique address should be used for each transaction to ensure the highest level of security. Most Bitcoin wallets will create a new address each time you initiate a transaction.
Why Use Bitcoin?
There are advantages to using Bitcoin.  Bitcoins can be used in any country. Also, exchanges often do not charge service fees and if they do, such fees are usually nominal. Users can send Bitcoins from person to person, without having to go through a bank or other clearinghouse. Bitcoin accounts cannot be frozen by governmental agencies or other authorities. There is no minimum balance required to maintain an account and no other monetary limits apply. When a user buys or sells Bitcoins or makes transactions using them, the transactions happens usually within 10 minutes. Another perceived advantage of using Bitcoin is that it’s anonymous, but the true anonymity of Bitcoin users depends on several circumstances, such as the wallet used, Tor and information supplied such as a fake name or email account. You do not need to register an account with a particular Bitcoin exchange or give personal details when opening an account.
Hacking isn’t the only danger to using Bitcoin.  Like most other online businesses, scammers work in the Bitcoin realm as well.  Some better known scams are:
In 2013, a New York man was arrested in the first federal securities fraud case involving a Bitcoin investment scheme.  It was a new take on an old scam—the criminal raised money from investors in the form of Bitcoins while promising incredibly high interest rates on investments, while in reality he was just repaying existing investors with new investors’ Bitcoins.
Fake Bitcoin wallet vendors seek to attract users by offering greater transaction anonymity than a legitimate wallet. But, if a user’s Bitcoin balance in a downloaded fake wallet rises to a certain level, the scammers steal the Bitcoins.
Phony Bitcoin exchanges offer better credit card processing rates than competitors but never send users the Bitcoins they purchased at the reduced rates.
Phishing schemes target and send links to people informing them that they have “won” a number of Bitcoins. The victim clicks the link and the hacker now has full access to their Bitcoin account.
It is critical that when using Bitcoin or any other online currency that you employ a security awareness mindset. If someone offers a spectacularly high return on a Bitcoin investment or very low transaction fee on purchasing Bitcoins, you should be suspicious. As with many things in life, if it sounds too good to be true, it probably is.
Also, realize that when dealing with online currency accounts, you’re not guaranteed any reimbursement protection in case your Bitcoins are stolen.  The Bitcoin industry is not regulated like mainstream banks and investment companies are.
As with any other online technology, make sure you educate yourself on the current threat vectors associated with that technology.  If you’re a business considering using online currency, make sure you and your employees know what you may be getting into.   And remember, there is no way to guarantee that your transactions will be anonymous.

For more information on how to stay cyber safe, check out our comprehensive, award winning security awareness program: