Will Ethereum Be The Next Facebook?

Authored by Kenneth Tan via Hackernoon.com,

2017 has been an amazing year for Ethereum.

Prices has hit an all time high of $800, and it is now the processing nearly double the number of transactions of bitcoin at a million a day.

As we enter 2018, I think Ethereum will be the next Facebook due to the massive amount of use cases that i am finding in major industries that benefit greatly from decentralization & transparency.

Ethereum is basically the app store for blockchain.

It allows creators to build and run apps without having to worry about the underlying “operating” system just like Apple.

Here are some of the areas to look out for:

Fundraising and ICOs

ICOs are the largest real world use case for ethereum. Traditionally, to fund your idea, you would have to borrow money from a bank, give up a lot of equity to a VC, or get an expensive loan from people lending sites. Basically, ICOs is a kickstarter on steroids.

As the founder of fundyourselfnow.com, I have worked with entrepreneurs all over the world on their product to get it ready for their ICOs. Many come from developing nations such as Indonesia (EagleCoin) and India (WandX) where it would have been extremely hard to raise significant funding for their idea due to lack of local investors.

ICOs are democratizing funding and spawning the next wave of innovation from young hungry entrepreneurs all over the world who will eventually contribute back to their local communities for a better future.

Payments & Lending

Currently, the crypto-currencies are quite hard to spend. Crypto credit card companies such as TenX, Monaco, Tokencard are stepping in to fill in the gap. All of them are built on the ethereum network. I personally hold a TenX Card and have used it to spend on daily goods and services using bitcoin.

Monaco in particular, has gotten official approval from VISA to issue cards to Singapore residents. Expect to see a huge increase in actual cryptocurrency spending & adoption 2018 as many of these crypto-card companies get official approval from VISA or MasterCard.

There has also been a rise of ethereum based lending solutions, such as SALT lending and ETHLend. The interest rates are expected to be fairer than getting from a bank, and people globally can gain access to financing even without a bank account.

I expect that 2018 will be the year where we will help lot of the unbanked get included in this new digital world.

Gambling

The gambling industry is ripe for disruption. 2017 started off with a very simple dice game, etheroll. You send ether to a smart contract and winnings are sent to you in a matter of minutes. Etheroll has over 260,000 ethers wagered so far (Around 2000m USD), which is incredible considering how simple and basic the game is.

Keep an eye out on Edgeless and Funfair in 2018 as one of them could potentially grow to become the largest online global casino. They have significant advantages over traditional real world casinos:

1. There is no capital controls


2. Anonymous, money doesn’t flow through the banking system


3. Trustless smart contract to process payouts and ensure fairness of game.

Gaming

The virtual nature of gaming lends itself incredibly well for the blockchain. Many successful gaming companies have started to include tokens in their games/product to fund their gaming ecosystem.

Here are some of the interesting ways tokens are used (not exhaustive):

Decentraland?—?Buy Land in their virtual world. Virtual worlds has been around since 2003 with Second Life and Ethereum might be the fuel that makes it finally takes off

Engin Coin?—?Used to create virtual goods that people that can on their marketplace. Instead of using “gold” in most games, expect games in 2018 to require you to use their own Ethereum game token to make & trade items.

CryptoKitties?—?Tokens represents a digital cat in the blockchain. Over 17m worth of cats were transacted since they launched early Dec , with the most expensive cat sold for more than 100k USD.

What more interesting is that with the use of Ethereum tokens for games, this could potentially mean that you could eventually trade items across games. For example, you can trade an Enjin Coin Item for land in decentraland through decentralized exchanges using the ENJ/MANA trade pair. Virtual worlds economies which are currently “silo-ed” could potentially change with the ability to “trade” across worlds.

Final Words

I see the money flowing into Ethereum and the overall cryptocurrency market as a positive. The technology underpinning Ethereum has a lot of real world usage that has yet to be unlocked and money is being funneled into innovative ethereum projects via ICOs at an incredible rate.

Mark Zuckerburg started facebook at the young age of 20 about 13 years ago, and it has completed changed the way we interact with our friends and family.

Vitalik, founder of Ethereum, started Ethereum also at the young age of 20 too about 3 years ago. I strongly believe that within the next 10 years, Ethereum will radically change the we interact with our world.

 

 

Bitcoin Rockets Higher, Then Crashes Lower, Then Repeats

Written by Nathan McDonald, Sprott Money News

 

 

The Bitcoin markets are in utter turmoil at the moment - the cryptocurrency that has become the envy of all speculative assets, possibly one of the greatest in modern history, is experiencing extreme volatility.

 

 

Long familiar with extreme ups and downs, Bitcoin has a history of moving higher rapidly, and also crashing suddenly. This past 24 hours appear to be encompassing both of these directions as the markets engage in an active game of tug of war, with billions of dollars on the line.

 

 

Those who have only recently gotten on the cryptocurrency bandwagon, buying into the recent parabolic rise of Bitcoin, have to be vomiting in disgust as they watch their hard-earned money being beaten like a dirty rug, but this is it - this is what it looks like to be involved in the cryptocurrency space, and something that veterans of the markets have seen time and time again. It is not all peaches and cream.

 

 

It began yesterday, when Bitcoin surged higher, out of nowhere, rising to a high of $11,323 USD from a $9721 USD start of the day. This was a monstrous gain in less than 24 hours. However, it was not meant to last as it promptly plummeted downward to $9435 USD, causing many of the major Bitcoin exchanges to crash themselves and go offline, including Coinbase, which is the most well funded exchange within the sector.

 

 

Following this crazy few hours, Bitcoin began to climb higher once again, easily breaking the $10,000 USD mark in overnight hours trading, but this too was not meant to last.

 

 

 

Chart Source, CoinDesk

 

 

Seeing this extreme volatility has caused many holders of the cryptocurrency to take profits, pulling out their money and causing another rapid crash lower - which as of this writing, has Bitcoin resting around $9,362 USD.

 

 

Compounding these problems is the fact that prominent names within the precious metals space have recently come out and suggested that perhaps it is time to take some gains, as the price of Bitcoin has gone parabolic throughout 2017, shocking even some of its most stout supporters.

 

 

As I have previously mentioned, 2017 has been a phenomenal year for Bitcoin. For those who got in even at the start of the year, you should be congratulated, as you made the right call and are now looking at huge gains. But as I have also seen numerous times in the past, Bitcoin can evaporate the majority of your gains in the blink of an eye. This isn"t the first time, nor will it be the last time that Bitcoin suffers uncontrolled volatility.

 

 

It has been, and continues to be, a wild, uncontrolled and incredibly speculative asset - one that has the potential to either change the financial world for all time, or possibly be the greatest scam we have seen since the Tulip mania.

 

 

I lean towards the former, but remember this always: there are powerful forces actively working against Bitcoin and its success - forces that will not take this change and threat to their fiat power lying down.

 

 

 

 

Questions or comments about this article? Leave your thoughts HERE.

 

 

 

 

Bitcoin Rockets Higher, Then Crashes Lower, Then Repeats

Written by Nathan McDonald, Sprott Money News

 

 

Check out these other articles by our contributors:

Jeff Thomas - What Will Push Them Over the Edge?

Rory Hall - If You THINK About Taking Someone’s Golden “Pet Rock” It Would Be a “Declaration Of Financial War”

Stewart Dougherty - The War on Gold Intensifies: It Betrays the Elitists’ Panic and Augurs Their Coming Defeat (Part 1)

John Rubino - “The Money Is Just Sitting There…Doing Nothing for Society”

 

Ethereum Soars To Record High After South Korea Regulator Confirms "No Plan" To Regulate Cryptos

In September, South Korea surpassed China in total crypto trading volumes, and as the world’s second largest Ethereum exchange market, South Korea is evolving into an Ethereum powerhouse with a rapidly growing number of active developments, domestic projects and communities.

image courtesy of CoinTelegraph

As CoinTelegraph reported previously, the majority of traders in the South Korean Ethereum market are speculative investors and tend to be largely influenced by any movement in the industry that could lead to a decline in Ethereum price. However, a fairly large portion of investors are avid supporters of Ethereum as a technology and an infrastructure for decentralized applications.

At the moment, ICOs seem like the largest market for Ethereum. In the upcoming years, it is likely that the performance of decentralized applications will evolve as a major factor for the market cap of Ethereum. In an interview with JoongAng, a leading finance news publication in South Korea, Buterin emphasized that it could take two to five years for Ethereum to scale to a point in which decentralized applications with millions of users can be launched and sustained.

There are many multi-billion dollar conglomerates and financial institutions in the Ethereum industry developing decentralized applications and platforms on top of the Ethereum protocol. The emergence of efficient and innovative scaling solutions will create a better environment for decentralized applications and will allow highly anticipated projects such as decentralized cryptocurrency exchanges and marketplaces to evolve.

If support and enthusiasm toward Ethereum in South Korea are sustained in the mid-term, it is highly likely that the South Korean Ethereum exchange market could evolve into an Ethereum powerhouse. As Buterin noted in the interview with JoongAng in the upcoming years, applications of Ethereum in a variety of industries will be tested and implemented.

Buterin explains:

“I would say that Ethereum’s main benefits are in its generality and in its utility to many kinds of industries. There are applications in finance, identity, supply chain tracking, health care, energy and many other areas. This is a result of Ethereum deliberately being designed as a general-purpose programming platform.”

And now, given the overnight news from South Korean regulators, it appears Ethereum has that chance...

As CoinDesk reports, the governor of a South Korean financial regulator has said it has "no plans" to supervise cryptocurrency trading, according to a report.

In remarks made to reporters today, Choe Heung-sik, chief of the Financial Supervisory Service (FSS), said that, since his agency does not view cryptocurrencies as "legitimate currency," the FSS does not intend to supervise trading of the digital assets.

According to a Korea Times report, Choe added the South Korean government believes that cryptocurrencies are used in speculation, not as payment tools. As a result, the watchdog considers that cryptocurrencies are not financial products, nor is trading them a financial service.

He said:

"Though we are monitoring the practice of cryptocurrency trading, we don"t have plans right now to directly supervise exchanges. Supervision will come only after the legal recognition of digital tokens as a legitimate currency."

The watchdog head"s comments come amid growing popularity of cryptocurrency trading in South Korea, and may have been prompted by the recent outage of major domestic exchange Bithumb, which recently experienced a technical outage that reportedly lost traders billions of won.

But his comments appear to have quelled any anxiety among speculators, as is clear by the reaction in Ethereum - the South Koreans" confidence is back...

 

Which leaves Ethereum solidly in 2nd place among crypto market caps...

Russia Launches $100 Million Bitcoin-Mining Operation

In what some have called a “watershed” moment for bitcoin, Bloomberg reports that a company co-owned by an aide to Russian President Vladimir Putin is seeking to expand Russia’s bitcoin-mining industry, leveraging Russia"s cheap energy to rival China as the world’s largest mining market.

The company, known as Russian Miner Coin, or RMC, is seeking to raise $100 million in an initial coin offering, promising buyers a right to 18% of the company’s mining revenue, according to a presentation cited by Bloomberg.

“Russian Miner Coin is holding a so-called initial coin offering, where investors will use units of Ethereum or bitcoin to buy new RMC tokens. These new tokens will have rights to 18 percent of the revenue earned with the company’s mining equipment, according to a presentation posted on its website.”

According to Brian Kelly, a frequent CNBC contributor, the announcement is a “watershed” development in the history of bitcoin because it suggests that Putin recognizes the value of the pioneering digital currency as a reserve asset. The Russian president has already expressed an interest in blockchain technology – particularly Ethereum. In June, he met with Ethereum founder Vitalik Buterin on the sidelines of the St. Petersburg Economic Forum and offered his support for Buterin’s plans to help local partners adopt the technology in Russia.

I guess sooner than I thought, this is effectively Russia beginning to "buy" Bitcoin as a reserve asset -->https://t.co/P5XufYR5n4

— Brian Kelly (@BKBrianKelly) August 8, 2017

If u r a nation w/ the exorbitant privilege of a reserve currency you MUST pay attention to this --> #bitcoin $dxy https://t.co/n3joAcSrF6

— Brian Kelly (@BKBrianKelly) August 8, 2017

To me this feels like a watershed event

— Brian Kelly (@BKBrianKelly) August 8, 2017

Russia offers several advantages for bitcoin miners: For example, its excess power capacity is substantial.

“Russia has 20 gigawatts of excess power capacity, with consumer electricity prices as low as 80 kopeks (1.3 cents) per kilowatt hour, which is less than in China, RMC said in the presentation."

The company plans to build its own mining hardware using computer chips designed in Russia.

“RMC plans to use semiconductor chips designed in Russia for use in satellites to minimize power consumption in computers for crypto-mining, Putin’s internet ombudsman, Dmitry Marinichev, said at a news conference in Moscow. Russia has the potential to reach up to 30 percent share in global cryptocurrency mining in the future, Marinichev said, adding that $10 million from the proceeds of the ICO may be spent developing the processors.”

Though, in the beginning, the firm will rely on Bitfury chips. Bitfury, a company that manufactures mining equipment and also operates its own mining operations, was founded by Valery Vavilov, a Russian-speaking native of Latvia.

“The company initially plans to locate mining computers based on Bitfury chips in individual Russian households to challenge Bitmain by using Russia’s lower power prices.”

Already, at least one Russian government entity is experimenting with blockchain tech. The Central Bank of Russia has already deployed an Ethereum-based blockchain as a pilot project to process online payments and verify customer data with lenders including Sberbank PJSC.

The vote of confidence from a close Putin associate has helped lift the bitcoin price to all-time highs, according to data from CryptoCompare.

 

Singapore Startup Launches Cryptocurrency Debit Card

A Singapore startup called TenX has designed a Visa card capable of debiting users’ cryptocurrency wallets, allowing them to pay for goods at brick-and-motor merchants with bitcoin, Ethereum and a handful of other digital currencies, according to Bloomberg.

The question now is: Will anybody use it?

TenX’s business model is straightforward: It allows its users to pay for goods in a given fiat currency, then “instantly converts” cryptocurrency from their wallet into the amount needed to cover the transaction.

To be sure, this isn’t the first digital-currency debt card: Two other startups, CryptoPay and Xapo, are selling similar products that focus exclusively on bitcoin. Being limited to bitcoin is obviously problematic for traders who don’t want to miss out on a single tick of the broad-based crypto rally, which Goldman believes will carry BTC to the moon (or at least to $3,600) by year’s end. But TenX’s promise of “instantaneous conversion” is already tempting users. The company says it’s processing 100,000 transactions a month, which is significant, considering bitcoin and Ethereum combined have a market capitalization of about $60 billion. The owners of most of this wealth treat it like an investment, not a system for payments – and it’s that attitude that TenX will likely find to be the biggest obstacle in its quest to 100x its current volume to $100 million a month.

Another flaw: Transactions are capped at $2,000 a year – though users can apply for a higher limit if they undergo identify verification, something that crypto enthusiasts might balk at. And with bitcoin’s future far from assured, picking the right mix of cryptocurrencies presents another business risk.

“TenX’s bid to make digital currencies easier to spend comes amid massive volatility and infighting within the cryptocurrency community. Bitcoin, the most popular, slumped after reaching a record in June amid concerns about a split in two, only to recover as fears faded. The company has built an app that serves as a digital wallet connected to the Visa card so that when it’s swiped at a cafe or restaurant, the merchant is paid in local currency and the users’ crypto account is debited.”

Despite its purported ease of use, even company officials admit that the network undergirding its system is complex – perhaps unnecessarily so. But on top of the 2% transaction fee it collects from merchants, customers only pay a 15 to 20 basis point conversion fee levied by the exchange.  

“’You’re mixing two worlds that are night and day,” co-founder Julian Hosp said in an interview. ‘When the user spends the cryptocurrency, we have to instantly switch these currencies to fiat and pay to Visa straight away. It’s a lot of pathways.’

Hosp said transactions are processed immediately and it doesn’t impose any charges on top of the conversion fee that is set by cryptocurrency exchanges, which typically is 0.15 to 0.2 percent. The card now supports eight digital currencies, including the lesser-known dash and augur, and aims to offer about 11 of them by the end of the year.”

TenX, like all companies working on payments solutions involving cryptocurrency, also risks being pushed out of the market by a larger rival with deeper pockets and more entrenched connections in the payments space.

“"TenX has an advantage in moving early, but the startup can expect competition in the future from major financial institutions and venture capitalists with deeper pockets and direct access to clients and databases," said Mati Greenspan, a Tel Aviv, Israel-based analyst at social trading platform eToro.

‘It’s an incredible concept,’ said Greenspan. ‘At the end of the day, it’s going to depend a lot on customer relations. Are they meeting the customers’ expectations? Can somebody else do it better?’”

Last month, the firm raised $80 million worth of Ethereum through an initial coin offering. It plans to spend half of that money to expand, and the other half to launch its own digital-currency exchange. Before that, it raised $120,000 from angel investors and $1 million Fenbushi Capital, which lists Ethereum creator Vitalik Buterin as a general partner.

Ethereum Forecast To Surpass Bitcoin By 2018

Back on  February 27, when bitcoin was trading in the mid-teens, we wrote "Step aside bitcoin, there is a new blockchain kid in town."

In recent days, the world"s second most popular digital currency, Ethereum, has been surging (despite its embarrassing hack last June when some $59 million worth of "ethers" were stolen forcing the blockchain to implement a hard fork to undo the damage), prompting many to wonder if some big announcement was imminent. It appears that yet again someone "leaked" because on Monday, an alliance of some of the world"s most advanced financial and tech companies including JPMorgan Chase, Microsoft, Intel and more than two dozen other companies teamed up to develop standards and technology to make it easier for enterprises to use blockchain code Ethereum - not bitcoin - in the latest push by large firms to move toward the holy grail of a post-central bank world in which every transaction is duly tracked: a distributed ledger systems.

Commenting on the sharp - for the time - rise in ETH price (which had moved from $13 to $15), we said "the move may be just the beginning if most corporations adopt Ethereum as the distributed ledger standard: Accenture released a report last month arguing that blockchain technology could save the 10 largest banks $8 billion to $12 billion a year in infrastructure costs — or 30 percent of their total costs in that area." Since then most corporations have indeed adopted Ethereum as the distributed ledger standard.

* * *

Three months later, and with Ethereum 15x higher at $230, Bloomberg today writes: "Step aside, bitcoin. There’s another digital token in town that’s winning over the hearts and wallets of cryptocurrency enthusiasts across the globe."

It"s not just the lede that is familiar, it"s everything else too, especially the forecast.

The value of ether - the digital currency linked to the ethereum blockchain - could surpass that of bitcoin by the end of 2018, according to Olaf Carlson-Wee, chief executive officer of cryptocurrency hedge fund Polychain Capital who was interviewed by Bloomberg.

"What we’ve seen in ethereum is a much richer, organic developer ecosystem develop very, very quickly, which is what has driven ethereum’s price growth, which has actually been much more aggressive than bitcoin," said Carlson-Wee, in an interview on Bloomberg Television Tuesday.

As we previously reported, while Ethereum suffered an embarrassing hack last summer resulting in the theft in millions of ether, the cryptocurrency has drawn the interest of industries from finance to health care because its blockchain does far more than let bitcoin users send value from one person to another. "Its advocates think it could be a universally accessible machine for running businesses, as the technology allows people to do more complex actions in a shared and decentralized manner."

Which is why ethereum is gaining increasingly more converts. Carlson-Wee wasn’t the first to forecast a bright future for ethereum. Fred Wilson, co-founder and managing partner at Union Square Ventures, laid out an even more ambitious timeline for the cryptocurrency in an interview earlier this month.

"The market cap of ethereum will bypass the market cap of bitcoin by the end of the year," said Wilson, who is also chairman of the board at Etsy.

In fact, if one looks at the relative market share of various cryptocurrencues, and extrapolates current trends, ethereum could surpass bitcoin in just a few months.

Bitcoin currently dominates a little less than half of the digital currency market, down from almost 90 percent three months ago, according to Coinmarketcap.com data. Meanwhile, ethereum has quadrupled its share, which now represents more than a quarter of the pie.

Indicatively, as of this moment, the market cap of Bitcoin is $37 billion, 75% higher than Ethereum. If the optimsitic forecasts are accurate, Ethereum, which is currently offered at $230, will cost roughly $400 next time we look at  it, if not more. What is more interesting is that while bitcoin hit an all time high of approximately $2900 one week ago, it has failed to recapture the highs, even as ethereum has continued surging ever higher, perhaps a sign of a broad momentum shift from the legacy "cryptocoin" to the "up and comer."

"We’re absolutely still in the infrastructure building phase," Carlson-Wee said. "But I do think within one to two years, we’ll start to see the first viral applications that are user facing."

In any case, for readers interested in putting money into either extremely volatile crypto, be prepared, in fact assume, a complete loss of your investment as chasing such speculative manias rarely has a happy ending. Then again, trying to time the peak of any bubble is a fool"s endeavor. Just look at the S&P.

Bitcoin’s growth has started to catch up to its fundamentals, which is likely what has been driving its astronomical gain as of late, he said. Others have attributed the surge to speculation, as well as increased interest in Asia and adoption by established companies.

Impressive performance aside, more than $150 has been knocked off bitcoin’s price since late last week amid concerns about transaction speed, safety and a possible price bubble.

Full interview below.