£0.00
The market for cryptocurrencies has matured, especially in the case of now well-established ones like Bitcoin, which has been in circulation since 2008.
As a result, many of those who were once very sceptical about the concept of digital currencies are now slowly being won over.
Some are even beginning to toy with the idea of investing in Bitcoin themselves. A great example of this is famous billionaire George Soros.
“Cryptocurrencies are a typical bubble” – George Soros
Mr. Soros has denounced Bitcoin several times in the past, and one of the reasons he has given is that cryptocurrencies will help foreign dictators in the same way that they aid criminal activity in the West.
On this subject, Mr. Soros has said:
“There’s also as very innovative blockchain technology, which can be used for positive or negative purposes. Currently it’s used mostly for tax evasion and for people and the rulers and dictatorships to build a nest egg abroad.”
Another reason Mr. Soros has given for not caring much for Bitcoin, and cryptocurrencies in general, is that they are not currencies at all.
According to him, cryptocurrencies are nothing more than pure speculation with no intrinsic value:
“Cryptocurrencies are a typical bubble, which is always based on some kind of misunderstanding. Bitcoin is not a currency, because a currency is supposed to be a stable store of value, and the currency that can fluctuate 25 percent in day cannot be used, for instance, to pay wages, because wages could drop by 25 percent in a day. So it’s a speculation, it’s based on misunderstanding.”
A change of tune from George Soros
Now, however, things seem to have changed for the billionaire tycoon.
He has been indirectly involved with Bitcoin since August 2017, which makes his comments above very interesting, given that they came after his involvement with cryptocurrencies.
Overstock.com branded itself as the first major retailer to accept Bitcoin, and Soros is the third biggest shareholder of that company.
That alone is an indication that the businessman has changed his tune when it comes to blockchain technology and digital currencies.
The plot thickens
Things are now becoming much more interesting in the Soros camp.
Bloomberg reports that Soros Fund Management will now be investing in cryptocurrencies, ICOs, and blockchain technology directly.
Thus, Soros joins the ranks of many billionaire investors who have begun to speculate in digital currencies, such as John Burbank (who starting his funding round in January), and Alan Howard (who makes a significant personal income from cryptocurrencies and blockchain technology).
The example of George Soros perfectly describes the changing attitude of seasoned businesspeople and investors all over the world.
They have not achieved their status as moguls in the world of investment because they made foolish decisions.
Sometimes it pays to take it slow, and consider your options before making a leap of faith into a new market.
What do you think of the veteran investors changing their opinion on cryptocurrencies? Will this add to the credibility of the market? Or will they simply push out some of the early movers?
Leave your thoughts in the comments section below!
Anyone following the news about cryptocurrencies will be aware that the market is extremely volatile at the moment – perhaps more than it has ever been before.
This means many things. First of all, crypto-miners are having to revise their strategy (and energy bill) when it comes to the feasibility of their mining gig.
Secondly, day-traders are losing both money and interest in the market, as trading Bitcoins and other currencies are no longer as profitable as it used to be.
Conversely, long-term investors are now losing their scepticism and are showing a renewed interest in cryptocurrencies as a long-term investment.
Overall, many once-promising Bitcoin millionaires are now left with a bleak outlook on an uncertain future as the market is seemingly all over the place.
But this only holds true for the West. In the East, cryptocurrencies are perhaps as strong as ever.
Eastern Promises
For companies like BitPay, who, despite the massive drop in cryptocurrency value of the last few month, have somehow managed to secure over $70 in funds, the East shows a lot of promise in terms of expansion.
As a matter of fact, Asia is BitPay’s fastest growing market.
Not only are Asian business thrilled by the prospect of being able to have their invoices paid in one day, as opposed to the long process of traditional banking systems, but Asian consumers are increasingly using Bitcoin to pay for goods and services.
On top of the fast transactions, Asian businesses trading internationally are also happy to see a reduction of transaction fees down to a meagre 1% – much less than would be the case with regular bank transfers.
From China to Japan
In China, the all-around versatile app WeChat has now launched WeChat Pay, which is essentially a QR code that can be used as payment in almost any restaurant or retailer.
In Japan, Bitcoin has been accepted as legal tender for over a year now, and Japanese banks are in the process of developing their very own cryptocurrency called J-Coin.
One of the reasons why investors and entrepreneurs alike see an opening in Asia is that credit cards are not being used as widely there as it is here in the West.
This means that there is ample opportunity to start spreading the use of cryptocurrencies as an alternative form of payment.
Challenges ahead
There are of course challenges to be dealt with as well as opportunities to be seized.
One of the challenges is the fluctuating value of Bitcoin and other cryptocurrencies. Although the Asian market seems more enthusiastic about the technology, they are, like any other markets, not immune to the volatile nature.
Another challenge is whether or not technological advancement can keep up with the demand for cryptocurrencies – if there’s only a few places to pay with Bitcoin, it will lose some of its appeal.
What do you think of the Asian approach to cryptocurrencies? Do you feel like the West could learn a thing or two about the Eastern mentality? And what about the challenges? Will Asian investors and entrepreneurs face the same issues as Western ones?
Leave your comments below!
For those in the know, mining cryptocurrencies, like Bitcoin, demands a lot of processing power from your computer, and will also very quickly rack up your electricity bill.
Students are ‘dropping out’
For this reason, university students in the US have been at an advantage, because their electricity bill is often included in the rent for their dorm rooms.
This hasn’t changed, but what has changed is the increase in mining costs, combined with a fall in many of the cryptocurrencies being mined.
Crypto-miners are not alone in facing these issues – it affects avid gamers too. The rising cost is linked to the graphics cards used in computers, and these graphic cards alone can easily cost as much as the average person spends on a whole laptop.
Is mining still feasible?
Whereas university students were making quite a lot of money off of mining in the past, these days it can yield as little as $100 per month – which, if they paid for the electricity themselves, would not be a feasible business for the students.
One student reported that he last year managed to mine .00027 Bitcoins daily, but that it cost him 24 kilowatt of electricity to mine. With the soaring price in Bitcoin back then, it seemed like a great idea – these days, it’s a less attractive option.
The simple reason why crypto-mining is becoming more expensive is due to the fact that currencies like Bitcoin are inflation-proof: the system is set up in a way that there is a limit to how many Bitcoins can be in circulation at any one time.
This means that mining Bitcoin, for example, becomes more difficult as time passes. The equation computers need to solve to yield Bitcoins become harder the more Bitcoins are in circulation.
As the amount of Bitcoins comes closer to the limit, mining will only be possible for those with the most sophisticated computers – and those who can afford the incredibly expensive energy bill.
Mining costs around the world
The price of mining Bitcoins varies depending on where you are in the world. In South Korea, for example, the price of mining a Bitcoin is double of what Bitcoins are currently worth. Anyone mining in South Korea would therefore have to be very confident that the value of Bitcoin will go up.
In Venezuela, conversely, the government subsidizes the energy, and so the price for mining one Bitcoin is only around $500 – around 1/20th of the current value of Bitcoins.
The US falls somewhere in the middle – depending on which state you’re in, mining a Bitcoin will cost you around $3,000-4,000. So for the US citizens, mining is still a profitable business.
For those considering to begin mining Bitcoins, there are some good news on the horizon, however. Intel is currently working on a solution that will lower the power consumption of computers used for mining.
Have you been affected by the rising cost in mining? Leave your comments below!
bitcoin, bitfenix, Blockchain, crypto, cryptocurrency, dai, gold, investments, oil, ripple, stablecoin, tether
There are many ways to describe the market for cryptocurrencies and blockchain, but “stable” is not one of them. One only needs to glance over any news relating to the popular currencies to see that the coin values go up and down, round and round.
New types of cryptos constantly emerge, and some only last a few months before they fade back into obscurity. Investors bite their fingernails and tear their hair out, as they watch their once-promising investments plummet in a split second – just before they rise in value again.
No, the market for cryptocurrencies is anything but stable.
Why many are still reluctant about investing
Compared to traditional markets, the market for cryptocurrencies is extremely volatile. On the stock exchange, you can maybe see stocks move up or down one percent. On the cryptocurrency market, that number is five times as high.
This alone is one of the reasons why many are still choosing to stay far away from cryptocurrencies. Players in traditional markets know better: the bigger you are, the harder you fall. Investing in a market as unstable as cryptocurrencies means taking too many risks, at too high a cost.
Another reason many stay away is that cryptocurrencies are not tied to anything physical, anything tangible, outside the digital world.
Is Stablecoin the solution?
Enter Stablecoin. A cryptocurrency that comes with the promise of solving this issue. Two of the main players in this space are DAI and Tether. The latter of the two, for example, is tied to the US dollar. That means that every Tether coin is, in effect, worth around $1.
Tether supports this by having one actual real dollar for every Tether coin issued. This concept is much more palatable for those who are used to having the reassurance that they stocks can be redeemed for something physical, that there is a guarantee their currencies will be worth something down the line.
But tying cryptocurrencies to a national currency is far from the only option on offer when it comes to stablecoin. Others are offering, or will be offering in the near future, cryptocurrencies tied to traditional assets like gold and oil.
What this also means is that it is possible to exploit the volatility of cryptocurrencies that are not tied to anything. So if you sell a coin like Ripple (worth $100, for example) for 100 Tethers, and Ripple then falls to $20, you can buy five Ripples back. In this way, many investors are making big bucks.
But is Stablecoin safe?
However, not everyone are equally optimistic about stablecoin. Tether as a company has been the subject of some controversy, and many claim there is a conflict of interest between Tether and Bitfenix– they have the same founder.
Doubt has also started to spread as to whether there are any actual US dollars to backup the enormous amount of Tether coins being issued.
Finally, Tether has, as a company, been reluctant to release their accounts, which has raised further suspicion about their legitimacy as a company.
What do you think about Stablecoin? Are they the solution or just another scam? Leave your thoughts in the comments below!