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Richard Thaler is well-known for his expertise and work in behavioural economics, also, he’s a Nobel prize-winning economist. Recently while speaking to a Portuguese publication ECO, he stated that after taking a close look at the market, he thinks that “bitcoin and its sisters” seem like a bubble and despite his analysis, he doesn’t have any idea when this bubble might burst.

Thaler said, that he can clearly see a bubble in the debt markets, as the given rates are almost close to zero. Furthermore, he added, that the market to him seems like a bubble of “bitcoin and its sisters”. Also, the cryptocurrency ecosystem is also acting absurdly, according to Thaler.

Thaler highlighted the Long Island Iced Tea’s shares as an example, as the shares are surging above 300% following a blockchain rebrand to Long Blockchain Corp. According to Thaler, it doesn’t make sense that companies are adding blockchain to their name and by just doing that, their value is going up, and it just keeps going like this.

bitcoin and its sisters

Thaler had already paradoxically discussed the whole Long Island Iced Tea case on his Twitter account. It happened after he got the Nobel prize, for his work in behavioural economics that also warns us of the distinctions between the behaviour of reality and homo economicus.

By using the examples of the dot-com bubble and 1987 Black Monday crash, Thaler said, he didn’t try to anticipate when this bubble of “bitcoin and its sisters” will burst, because by looking at history, we can clearly see that awful things can happen when markets become irrational.

In normal markets, we don’t see extreme events like these as often as we do in the cryptocurrency markets – Richard Thaler

Last year, in an interview, he stated that it looked like he was living in the riskiest moment of his life, and the stock markets seemed to be napping, although he admitted that he couldn’t understand it. He also admitted that was anxious about the stock markets and when the investor gets nervous, then it’s obvious that he’s going to get agitated. However, he noted that nothing can spook the market.

It seems like that Richard Thaler doesn’t like bitcoin, however, he isn’t the only Nobel prize-winning economist who dislikes bitcoin. Joseph Stiglitz, who won the price in Economic Sciences in 2001, apparently doesn’t find any useful functions for Bitcoin and thinks that cryptocurrency could be regulated out of the existence. Robert Shiller (Nobel laureate), who won a prize for his work in Trendspotting in asset markets, back in 2013, predicted that we’ll see a bitcoin crash, although it won’t go to zero, but it will probably bring the cryptocurrency down.

 

 

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The Hidden Dangers of Bitcoin

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Hidden dangers of bitcoin

Leashing its way threatening the legacy powers, bitcoin has become a genuine innovation in the world of decentralized encrypted currency. Without the doubt carrying a number of untold valuable services, it has widely passed a conflict of biblical financial and economic proportions. With its revolutionary outburst on the internet and the disruptive potential at its first attempt, alongside other chains, bitcoin holds a chain of hidden dangers too. There is a widespread political power and economical threats bitcoin is adapted to. A lot of crypto user face bitcoin hidden dangers.

In order to purchase items, this digital currency can be traded from business to business or from person to person. Being owned by ‘nobody’, this sets it unlike from other financial institution, ‘brick and mortar’. Challenging the sovereignty of entrenched financial interests, bitcoin is bringing a number of conflicts.

Deflation

Bitcoin has come up with a lot of hidden cons. Establishing the third-party trust mechanism, this system is ready to obsolete central banks in a severe case. Challenging the monopoly of the banking world may result in a higher risk of opportunity than ever before. This Armageddon will trigger more conflicts and struggles in a result Deflation will be the utmost backlash of it.

But how is deflation a bitcoin hidden dangers? Reduction in the prices of daily items and purchases, reduced petrol prices is a ‘wowza’ for private citizens. Deflation may sound very promising and attractive to our ears but it will stop the cash flow to a great extent. Reduced prices mean reduction in the wages which eventually means the reduction in the collection of taxes. Getting a hold of the lesser amount of tax collectibles will definitely disturb the government and financial institutes. Keeping cash in hand, private citizens will be able to challenge the government on so many levels. This can create quite an alarming situation in itself. Though it is a no major harm to the private citizen, it is an alarming situation questioning the hold of the government and its entities.

Supply and demand – Manipulate?

Due to its disruptive behavior, bitcoin can create a great deal of financial physical aggregation. This nature and outburst may cause financial bodies to lose control in managing the economy. There is no abstract nature attached to the bitcoin, making it market free. It has left it under no power or under no influence. This will result in central banking and government to lose its command and authority to manipulate supply and demand. It will power out the generation of money and control the interest rates. On average bitcoin challenges about 3.4 trillion dollars of the U.S based trusted services every year. Yes, we are talking about the trillions here. So how big do you think is the financial sector? Very big, right!

In other words, there is an unholy alliance invisible to majority citizens amongst the central banking and government. The political system and central banking depend on various levels on each other, supporting each other’s blacks and grays. Decentralization will make them lose their monopoly and hold over the system to benefit their causes too.

War- Expensive Hobby

A great perceived advantage to be accounted for is that bitcoin is anonymous. But is it really an advantage? It is concerned that it may be used for terrorism and crime. The world, if at war today would require a greater deal of fiat currency to fund military and to fight enemies. But what if the enemy is funded by the same mean? The globalization of the bitcoin will eliminate

  • bank freezes,
  • encrypted transactions
  • foreign transaction fees
  • the abundance of open resources
  • confirmed transactions

Government and central institutions and financial institutions need to make a lot of effort and strategy to keep the technology and its cons at bay. As the significant interests and welfares are increasing so are they economic threats regarding the mechanism.

Totalitarianism

A system that runs through the power and controls the resource distribution can hardly be in line with a decentralized system.

  • Democratic dictatorship
  • Socialism
  • Communism
  • Fascism
  • Welfare states

They are all under a great deal of threat by this abstract ‘bug-a-boo’ – Bitcoin.

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Cryptocurrency News: Putin’s Endorsement Gives a Boost to Ethereum

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As investors look for a safe place to store their assets, Ethereum – the second largest cryptocurrency after Bitcoin – is getting a boost, thanks to Putin’s endorsement of the currency.

The Main Story:

Ethereum continues to skyrocket after the Singapore government and the Russian president Vladimir Putin publicly showed their support to the currency. The latest Monday morning saw the currency trading at $407.10, a record rise of more than 5000% since the start of 2017, where Ethereum was trading at just $7.98.

The Russian president and Vitalik Buterin ­– founder of Ethereum – recently had a meeting during St. Petersburg International Economic Forum. According to some experts, the occurrence of this meeting suggests that Russia is willing to open its doors to using cryptocurrency in an attempt to make their economy less dependent on oil and gas.

“The digital economy isn’t a separate industry, it’s essentially the foundation for creating brand new business models,” said Putin at the forum.

The recent shift in Putin’s stance has had an immediate impact as the Russian entities such as the State Development Bank VEB, have agreed to use Ethereum.

Meanwhile, the government of Singapore has also released a report about their recent attempts of using Ethereum blockchain and creating their own digital currency.

Japan is also issuing new rules about making Ethereum a valid form of payment. Some major companies such as Microsoft and Toyota have shown their support for Ethereum too.

In conclusion, Ethereum is getting support from all across the globe and is likely to experience even more boost in the coming days. So, if you are looking for a safe digital investment option, Ethereum is the way to go.

Story Credits: vanityfair.com

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Bitcoin and Ethereum – The $80 billion question

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Bitcoin reached to new heights of its career, two months ago: after a rigorous time period of growth bitcoin’s value is exceeded to one ounce of the gold.

That seems like antique history, bitcoin current trading rate is 2574.10 US dollars and its cousin’s trading rate is $262.11. Both digital currencies’ values increasing by 1200% in last three months.

Is this the end of the crypto-rally? and what has pushed its growth in first place. In the crypto-currencies’ world, you will get the answer to these questions.

New Variety Of Cryptocurrencies:

It is essential to understand that Bitcoin is the biggest cryptocurrency in the world. It is not the only one digital currency, there are more than 600 active currencies but its value is high as compare to other. Accordingly, the Current market cap of all digital currencies is around $79 billion. And, only bitcoin’s market cap is $35 billion.  Cryptocurrency Ethereum and ripple’s market cap is $17 and $18 billion respectively.

The crypto-market cap is depending on your viewpoint. If you have confidence that bitcoin will eventually replace money, then $35 billion is pocket change. But in reality, its never happen, and let’s suppose it is done, bitcoin may be left behind.

Furthermore, Bitcoin comprises the both, digital currencies’ features and payment platform at the same time. But, new breeding of digital currencies such as bitcoin and ethereum is quite different. A software has the ability to solve the scaling issues. In addition, litecoin adopt SegWit, ethereum come up with advanced feature such as the smart contract. It aims to become blockchain-based foundation which is basically a new type of internet. how’s that for determination.

The value of cryptocurrency

There is always a good reason behind the rising value of a commodity or a currency doesn’t matter it is a cryptocurrency or traditional money. Apple’s stock price grows up in the case of a good quarter. In the world of the bitcoin cryptocurrency got double as a crypto-payment system.

But the recent news of the bitcoin is not good. Few areas of the United State decline the acceptance of the coin. In addition, from the last couple of the year’s Bitcoin community has divided. Whether bitcoin’s block size should be increased or not.

What’s happening?    

Charles Haytar says, “The Japanese have given bitcoin the green light as a currency and are looking to increase the rigor that their exchanges are subject to.” Japanese markets and other offer the opportunity for arbitrage, but old greed is going on.

Haytar added, “Lots of inexperienced investors are surging into the market, and it’s causing a bit of a bubble.”

Jörg von Minckwitz, Bitwala’s CEO pointed out that ethereum has got additional development due to the rise of ICO.

Mashable says, “Many crypto projects raise money from the Ethereum community to develop their projects and most of them use ETH to raise money. ETH set a standard, so it is way easier to start with ETH. The result is that many people buy ETH to be able to invest in the projects and many of the ICO projects hold the money afterward in ETH. That drives the price up.”

 

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Bitcoin Launch futures dragged down prices, Fed paper shows

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Bitcoins

A decentralized cryptocurrency- bitcoin is the most liquid form of currency in the digital world today. Stored in digital wallets existing in clouds, this facilitates the transfer of value without intermediation from banks or central authorities.

Bitcoin future

Validations performed by miners in a group of transactions are awarded coins. The follow a set of cryptographic rules which keeps the system balanced and stable. These transactions are verified in the digital public ledger, blockchains. How to get Bitcoins? To obtain these coins you can either exchange it in monetary value, get transferred or by performing Bitcoin mining. It can be bought or sold for fiat currency. It can also be invested in trading too.

These coins are being accepted for the means of transactions. There are a growing number of retailers who have currently started accepting bitcoins. The commercial usage and recognition are expanding swiftly day by day.

Bitcoin Futures

BTC is the U.S cash settled cash contract based on the reference rates. BRR are the reference rates settled once in a day against US Dollar price of single bitcoin. This rate aggregates the trade flow of calculated window in an hour trading in spot exchanges into the 1 Bitcoin to US dollar price.

A single BTC contract has a value of 5x the value of BRR Index. It is quoted in the amount of US dollar per 1 bitcoin($/Bitcoin). These tick movements are monitored and have a value of $US 25 per BTC feature tick movement.

The minimum quantity threshold of five contracts. BTC Futures expires every last Friday of every month. It follows a quarterly cycle every year in the nearest two months. And the next two months following will not be in the quarterly cycle. For example, if the active contract months are March and December, then January and February will be the nearest two active non-quarterly months. As the December contract expires, the June contract becomes active. And as the January contract expires, the April contract becomes active. This process continues throughout each year.

BTC Futures provides investors with transparency, price discovery and risk management capabilities. Bitcoin is quite a lot big portion of growing digital asset market. This contract allows participants to allow access to Bitcoin market and hedge any direct exposure to Bitcoin pricing.

The Downfall

After climbing the highest peak of its life of nearly up to $20,000, the sudden downfall of the currency is not seen as a complete coincidence. According to the researchers, the Feds at most, this sudden peak and rapid fall is tied directly to the launch of the futures market. But many believe that this trading behavior accompanies the futures markets’ introduction commonly. Trading has been thin from the week prior to the opening of this futures market. The gradual fall is undoubtedly a result of lack of attention or willingness entering the first week of trading.

This digital asset, cryptocurrencies are considered as one of the biggest opportunities of our generation. This currency can be easily and profoundly used for international remittance. The salient feature that it eliminates the middleman in any transaction in financial services has managed to grasp the interest of a lot of companies now.

But how is Bitcoin taking its biggest fall? According to another perspective, this digital currency is worth only as much as anybody else (coin holders) is willing to pay for it. Can the investors and holders trust these bounces? Being so volatile, moving too much too fast makes Bitcoin very unpredictable. The optimists meanwhile are ready to fuel the blockchains with the cryptocurrency. They are not ready to guard down the expectations and faith on this open software anytime soon.

Applications approving the usage of bitcoin exchange and the gradual increase in the practice day by day proves its increasing importance and value in the market. It cannot be denied. But do the billionaires bashing on bitcoin makes it a better thing to buy?

The future of the bitcoin is as volatile and unpredictable as its peak has been. But the future value and prices of the currencies largely also depends on the recognition and investment of any of financial institutions in the currency. And only if they more willing to accept bitcoin as their means of payment and encourage its usage.

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What Are Some Simple Ways to Buy and Invest in Bitcoin?

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how to earn bitcoins

Bitcoin is a peer to peer, decentralized, the digital currency which is designed for users to make online transaction anonymously. In simpler words, it’s a virtual currency which was created by a group of unknown programmers in 2009.

During this short period of time, bitcoin has accumulated worldwide recognition as well as contention as an alternative to USD and Euros.

Journey Towards Popularity:

Bitcoin first came into circulation in 2009. The currency didn’t gain much attention in world business during the first couple of years. The first it gained recognition was the year 2011-12 when it grew over 300%. The next year also proved to be quite fruitful as the currency saw more than 400% growth in its value.

Due to its incredible rise, the investors and venture capital around the world invested $57 million in the first quarter, followed by an investment of $73 million in second quarter.

A Guideline to Invest in Bitcoins:

The easiest way to get bitcoins is to shop for bitcoins. There are numerous established firms in the US and around the globe that are involved in trading bitcoins. These firms are abbreviated as BTC.

Coinbase and BitStamp are two of the top players of the game.

Coinbase:

Coinbase is the “go-to” place to trade coins if you live in the US. The Coinbase provides its clients with bitcoins at an estimated markup of 1% over the existing market price. It also gives you the option to sync your bitcoin wallets and bank accounts; which ultimately reduces the trouble factor in your future payment transfers.

Another unique option that Coinbase offers to its users is “auto-buy”. For example, if a user buys $100 in bitcoins at the start of each month, the company will him an option to set up an “auto-buy” for that amount.

Here you can learn more about how to buy bitcoin through Coinbase.

Bitstamp:

Bitstamp acts as an intermediary between users. This means that users can trade with each other but not the company itself. At BitStamp, the liquidity is higher and there is always a good chance to find a trading partner.

Local Bitcoins – An Alternative Way to Purchase Bitcoins:

If you are having troubles exchanging bitcoins online, Local Bitcoins is a good option to buy them offline. However, offline buying is not always considered to be safe. To be on the safe side at the time of a transaction, it is often suggested to have a meet up with the seller at a public place and let a friend/family member tag along for protection in case things turn ugly.

The Final Word:

There are numerous ways to take a dive into Bitcoin investment. Coinsbase, BitStamp, and Local Bitcoins are few to name. The most important thing to remember here is to do your homework and take your time before entering the sphere of bitcoin investment and you will be fine.

Find out what our experts have to stay about how to make a Bitcoin investment.

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