Alex Morris

Blockchain History: From Ancient Fei Stones to Disruptive Technology That Underpins Bitcoin and Other Cryptocurrencies

Blockchain history before Bitcoin and Blockchain history after Bitcoin: Learn more about the nascent technology, Blockchain’s history, and the technology’s future
Blockchain History: From Ancient Fei Stones to Disruptive Technology That Underpins Bitcoin and Other Cryptocurrencies
Contents

Introduction to the state-of-the-art technology

Blockchain is a disruptive technology that is making waves throughout the globe, revolutionizing a slew of industries (from banking to the global shipping industry). Many pundits, including Zillow’s CEO, believe that this nascent technology has more potential than the Internet, while Binance’s founder believes that the idea of mainstream decentralization is not that far-fetched. In this article, we will take a closer look at the history of Blockchain to eventually make a prediction about what the future holds for this technology.

Blockchain

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Decentralization: A 1,000-year-old concept

Before we begin discussing the history of Blockchain in detail, we would like to share with you an outlandish suggestion made by cultural anthropologist Natalie Smolenski, who believes that Blockchain could have actually appeared almost 1,000 years ago (of course, not in the form of a distributed ledger). Smolenski says this is one of the “old wine in a new bottle” situations when the already established transitions of some ancient tribes have a lot of in common with (you guessed it) Blockchain.  

“Like all breakthroughs, Blockchains are a profoundly new way of doing old things,” Natalie Smolenski

In 500AD, the tribe of the Yap Island used gargantuan Fei stones as their form of currency, but they had to tackle the problem of mobility: these stones were too bulky to move around. Subsequently, they came up with an idea to create what could be considered the very first decentralized ledger in history — every tribe member knew exactly who owned a specific stone, which would eliminate the need for further disputes.  

Remarkably enough, such ‘transactions’ lasted up to the 19th century on Yap Island. Then the villagers ditched this tradition and switched to the US dollar. It is also worth mentioning that such a practice was never adopted outside of the tiny island. It actually represents what exactly Blockchain is today; instead of a mental ledger, there is a mental one, which binds together millions of computers around the globe. Most probably, the Yap villagers never realized that they’d come up with a truly revolutionary technology.

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Philosophical and technical bases behind Blockchain  

While claiming that the inhabitants of the Yap Island might indeed be responsible for the emergence of Blockchain technology sounds far-fetched, the seeds of this state-of-the-art invention may go back directly to the 1940s. During the peak of the World War II, genius British cryptographer Alan Turing made a breakthrough by deciphering the Enigma machine.

1974 Nobel Prize winner Friedrich Hayek, who became famous because of his magnum opus ‘Decentralization of Money’, is considered to be one of the biggest philosophical influencers in the history of the cyberpunk movement. Ayn Rand was among other inspirations: she came up with the idea of ‘Galt’s Clutch’, a secluded community that would one to distance himself from corrupt institutions.

This magnum opus predicted the decentralization of money, which would help stomp out government-backed monopolies. Bitcoin, the first privately issued money, is a stepping stone for the implementation of Hayek’s vision.

When it comes to technical bases, Bitcoin — as well as the technology that underpins it — is based on cryptography (a huge chunk of information is shared between encrypted computers worldwide). In 1976, the Diffie-Hellman algorithm allowed securely exchanging cryptographic keys by dividing them into private keys and public keys. Ralph Merkle, in turn, is responsible for the creation of public-free cryptography (Merkle Tree). These inventions were essential for the establishment of Blockchain technology.

Philosophical and technical bases behind Blockchain

In 1991, way before Blockchain became the ultimate ‘buzzword’ of recent years, Haber and Stornetta published a paper entitled “How to Time-Stamp a Digital Document”. The document describes a tamper-proof method of time stamping, which would make it impossible to stamp an inaccurate date on a document. This seemingly groundbreaking technology went unused, and the patent expired in 2004, remaining a remnant of history.   

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Blockchain’s public debut in Satoshi’s white paper  

Since then, the development of the Blockchain technology remained in limbo. In 2008, however, everything has changed for good with Satoshi Nakamoto introducing the white paper of Bitcoin, the first decentralized digital currency that later took the whole by storm. The rest is history.  

Blockchain’s public debut in Satoshi’s white paper  

(Source: Bitcoin.com)

Bitcoin became the first known use case of Blockchain technology in history (if we don’t count the aforementioned Fei stones). After the release of the white paper, the first open source client of Bitcoin appeared back in January 2009.

The term “Blockchain” made its first public appearance only in Satoshi’s ubiquitous white paper.  It is worth mentioning that Satoshi didn’t use the term ‘Blockchain’ in his work — the technology was actually represented by two separate words (‘block’ and ‘chain’).

While there were some remotely similar technologies, there is no doubt that Satoshi (whoever this elusive creator is) can be regarded as the founder of Blockchain. There is also an alternative opinion that Blockchain wasn’t created by anyone, and it simply represents an evolution of a technology that combines three elements (cryptography, distributed networks, and consensus protocols).

The thing is, Satoshi’s white paper actually suggests that Blockchain and cryptocurrencies are two inextricably connected notions, and there was no life for this technology outside of the digital money space (despite almost a decade-old history).

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Blockchain separates from Bitcoin

While Bitcoin remains the biggest use case of Blockchain, more and more companies and organizations are inching closer towards decentralization in order to increase their efficiency.

Blockchain separates from Bitcoin

(Source: Bitcoin.com)

The very first precedent was set by a startup dubbed Namecoin that wanted to democratize the current management system. The domain names are mainly controlled by centralized entities, and they have long been a matter of grave concern for Internet freedom advocates. There have already been a couple of occasions when the US government would seize the site’s domain. By storing all domains on a distributed ledger, Namecoin would make it impossible to correct the registration data. The government would need an encryption key in order to seize this domain.

As the popularity of cryptocurrencies began to grow, many people started confusing Bitcoin and Blockchain, the technology that underpins all decentralized digital assets. During 2013-2014, when Bitcoin started showing the first signs of mainstream adoption, Blockchain also appeared in the limelight, and many realized that its use cases might extend far beyond crypto with this technology being actively applied in a myriad of industries (healthcare, transportation, etc.). Individual companies and even whole countries started pouring money into Blockchain. For instance, the South Korean budget is set to allocate a staggering $925 mln to further develop the Blockchain technology (one of the biggest fintech-related investments in recent history).      

The rise of Ethereum

The next era in the development of Blockchain is associated with one name: Vitalik Buterin, one of the developers behind the Bitcoin codebase who decided to come up with his own project due to numerous programming limitations. While he saw the Bitcoin ecosystem forming a distinctive shape, he realized that many crypto projects that were still in a stage of inception needed the common ground to build on.

As a result, Ethereum, the second public Blockchain, appeared on the horizon along with a groundbreaking invention of the so-called ‘smart contract’. The 2013 Ethereum white paper already went down in history. In mid-2014, the Ethereum yellow paper was released, with Gavin Wood specifying the modus operandi of the Ethereum virtual machine (EVM).  

The rise of Ethereum

(Source: Getty Images)

The major advantage of the Ethereum Blockchain consists of the ability to record various kinds of assets, not being restricted strictly to cryptocurrencies. Smart contracts have already witnessed a widespread adoption with tech giants such as Microsoft using it to cut red tape. Even critics who argue that Ether (the currency) is doomed to fail, they admit that the Ethereum, which embodies the second-generation Blockchain system, is here to stay. There are hundreds of active projects that were built on the Ethereum Blockchain, representing a huge imprint on the history of the technology.     

Apart from smart contracts, Ethereum birthed the concept of the so-called decentralized organizations (DAO), which represent the whole corporations that are operating with the help of smart contracts.   

The creation of Ethereum eventually resulted in the ability of developers to create the applications that run inside it. Decentralized application (dApps) represents the next logical step in the development of the technology — there are already hundreds of such applications that are powered by Ethereum. Instead of Twitter or Spotify with a centralized governing model, dApps offer more freedom to users, enhancing stability and eliminating numerous censorship issues. Still, there are numerous caveats that are linked to their adoption: dApps fail to grow their user base due to their poor usability.  

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In general, the evolution of Blockchain could be described in several stages:

Stage 1: Bitcoin

At first, the Blockchain was solely used as an underlying technology for Bitcoin (and later other cryptocurrencies). Bitcoin became the first decentralized digital currency in history.      

Stage 2: Ethereum Blockchain

With the implementation of smart contracts, a slew of assets could be recorded on a distributed ledger. Furthermore, the technology gave a huge boost to the adoption of Blockchain outside of cryptocurrencies.

Stage 3: DApps

Blockchain is inching closer towards run-of-the-mill users with decentralized applications that are supposed to come as a viable replacement for traditional applications.   

Stage 4: Cross-Blockchain

The scenario when Blockchain finally becomes usable in the real world, disrupting many industries.  

Transition to proof-of-stake Blockchain consensus algorithm

If you are somehow familiar with cryptocurrencies, you are definitely now new to the concept of cryptocurrency mining. This is a process of cooperating Bitcoin many nodes on the network. Blockchain technology allows recording all the data on a distributed ledger, which basically means that it is stored on a gargantuan number of computers around the globe. For the whole network to function properly, there should be a robust consensus mechanism in place.

The original consensus mechanism is called Proof-of-Work (PoW). The peculiar thing is that the PoW mechanism dates back to the 90s, long before Satoshi came up with a ubiquitous Bitcoin white paper (the actual term was proposed by Markus Jakobsson). Still, this consensus algorithm became commonly known along with Bitcoin. According to the white paper, PoW would help solve security concerns, preventing the much-feared 51 percent attack. There is a block reward involved for every cryptographic puzzle solved by an individual miner or a group of miners.

However, due to numerous disadvantages of PoW (huge energy consumption, geographical limitations, etc.), a new consensus algorithm emerged on the horizon: Proof-of-Stake (PoS). When it comes to proof of stake, the creator of a new block is defined based on his stack of coins.

Transition to proof-of-stake Blockchain consensus algorithm

The currencies that are based on this consensus algorithm do not presuppose a block reward; miners profit off transaction fees. Hence, the PoS algorithm is a significantly more cost-effective option. PoS-based coins help to tackle the problem of energy saving that has always been an issue as far as Bitcoin mining is concerned. As U.Today reported earlier, Bitcoin mining has such a great impact on the environment that it could potentially boost climate change.

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Tackling the scalability trilemma with altcoins

The next logical step in the history of Blockchain development consists of finding new scaling solutions. Some naysayers bash Blockchain because transactions take a very long time to be conducted compared to more established financial systems (VISA, Swift). With Bitcoin Blockchain, it is only seven transactions per second (TPS). Ripple, on the other hand, shows much more impressive results with 1,500 TPS, but there is still much homework that needs to be done in order to match the processing power of the VISA network that is able to process 24,000 TPS (although, Ripple is already six times faster than PayPal). Ripple shouldn’t be confused with the actual cryptocurrency (XRP) — it’s a Blockchain-powered startup that is currently getting a big number of banking clients on board with its new xRapid product.  

Coming up with a scalable Blockchain solution is an easy feat due to what is known as the scalability trilemma. The essence of this trilemma is that the Blockchain network is only capable of having only two out of the following three features: decentralization, security, and scalability. Blockchain and Ethereum put emphasis on the first two, which takes a toll on the speed of transactions. Still, a scaled Blockchain that would be able to outperform them — conducting millions of transactions in a snap — is yet to be done in history, but some promising projects are already in the offing.

Altcoins with separate Blockchain seems like a plausible solution to the scalability problem since it would significantly reduce the user base. Notably, there is a full stack of scalable Blockchains in the offing, with Ethereum 2.0 leading the way. Cardano, on the other hand, is already here: the reputed project spearheaded by Charles Hoskinson is considered to be the third generation of Blockchain because of its scalability and interoperability.

Other third-generation Blockchains to watch in 2018:

  • Zilliqa;

  • EOS;

  • ArcBlock;

  • Aion.  

Each of the aforementioned third-generation Blockchains aim to tackle the main issues of Bitcoin and Ethereum in their own way with a major emphasis being placed on scalability.   

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The growth of Blockchain: talking numbers

According to one of Deloitte’s research papers — which aims to illustrate the evolution of Blockchain with the help of GitHub data — there have been more than 87,000 Blockchain-related projects. Perhaps the most striking finding actually pertains to the number of currently working projects; the longevity in the Blockchain industry is very poor, with only 8 percent of projects still being maintained by their developers.

Nevertheless, there is still a very positive trend when it comes to the number of projects developed by  commercial organizations: it has skyrocketed since 2009, serving as a clear indicator of wider Blockchain adoption. It is especially important for the industry because such projects tend to be updated more often while holding more significance.  

The growth of Blockchain: talking numbers

However, Blockchain adoption is still rather snail-paced with regulatory uncertainty being the main issue. A new PwC survey showed that 27 percent of CEOs think that lack of legal clarity remains the main hindrance with lack of trust among users coming in second place (25 percent).

The future of Blockchain  

As mentioned above, a lot of banking institutions (including such behemoths like Morgan Stanley, are already jumping on board with Blockchain adoption since the technology has the potential to increase the efficiency transaction processing. However, it doesn’t stop there — dozens of industries are already unitizing it. Whether it’s giving refugees a chance to restore their identity or preventing food poisoning, there’s one ‘magic wand’ that helps to modernize everything with the help of decentralization.
Since no one is able to alter data on a Blockchain, it’s a perfect solution for record keeping, and there is a myriad of future use cases where Blockchain could come in handy. Ironically, there’s even a Europe-based startup called Kapu that puts the whole history on a Blockchain in order to have a risk-proof source of all kinds of historical data.   

With that being said, Blockchain has many critics (and their list not limited to the unhinged Bitcoin opponent Nouriel Roubini). They claim the technology is overhyped, and cryptocurrencies still remain the only major use case. dApps (decentralized applications) fail to get a grip of a real user base while many Blockchain-related projects are only in a trial phase. While it is partially true, it is quite reasonable to assume that the mass adoption of Blockchain won’t happen overnight – it would take years or even decades for the technology to catch up, and there has been a lot of progress since the inception of Bitcoin. Case in point: it took the Internet almost four decades for this technology to break into the mainstream (its foundations were created as early as in the 60s).  

Meanwhile, the US — the current leading market for Blockchain development — is expected to cede ground as early as 2023. China, which retains its hawkish stance towards crypto, is betting big on Blockchain, going as far as issuing Blockchain-related guidelines for its officials. Remarkably, the UK’s current 5 percent share in the crypto space is expected to shrink to just 2 percent.

The future of Blockchain  

One also cannot exclude the possibility that Blockchain might not be the same technology that we know today. A lot of companies, for instance, are already trialing so-called ‘private’ Blockchains that allow sharing data only within a small circle of individuals, and there is always a chance that another groundbreaking invention will turn Bitcoin and Ethereum into history.

No matter what future holds for Blockchain, one thing is crystal clear: the world will never be the same after its invention.

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Ripple Enters the Chinese Market

The last few days have been very slow for XRP/USD, and now the pair is stuck in a tight range between 0.50 support and 0.52 resistance
Ripple Enters the Chinese Market

A joint venture between American Express (AmEx) and LianLian Group received approval to process card payments in China. This made AmEx the first American company to gain direct access to the Chinese e-commerce environment and to process transactions in Yuan.

What’s the connection with Ripple? Both American Express and LianLian are members of RippleNet, and the joint venture will use Ripple’s ledger to provide fast and safe transactions, which will most likely have an effect on Ripple’s native cryptocurrency, XRP.

Charts at a Glance

Charts at a Glance

The last few days have been very slow for XRP/USD — similar to many other cryptocurrencies — and now the pair is stuck in a tight range between 0.50 support and 0.52 resistance. As shown by the bullish trend line on the chart above, the price is currently in an uptrend, but until the 0.50 – 0.52 channel is broken decisively, we will probably get more of this ranging, choppy movement.

We favour a bullish breakout above 0.52 mostly because Ripple (XRP) is benefiting from the positive news. In addition, the pair has bounced twice at 0.50 support and shown increased bullish pressure.

Support zone: 0.50 followed by the bullish trend line

Resistance zone: 0.52

Most likely scenario: break of immediate resistance and move towards 0.57 (during several days)

Alternate scenario: the pair remains inside the horizontal channel (0.50 – 0.52)

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Bitcoin Google Searches on the Rise — What Does it Mean for Cryptocurrency Market?

Google searches have always been key to Bitcoin’s price gains, and amid the bloodbath, there is actually an uptick in interest
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Contents

There is a very strong correlation between the price of Bitcoin and how often it is being searched. The graph of its change in price from about June to December of 2017 almost mirrors that of its Google search.

This makes a lot of sense as the cryptocurrency market is still very new and mostly unknown, but more than that, it is a speculator’s market. People often hear about Bitcoin and its price gains, research more, buy into it, which drives up the price and the interest again — known as a Satoshi cycle.

Now, however, with the price of Bitcoin dropping to lows, and ceasing its volatile nature — up until very recently, that is — there has been less interest and thus less google searches, which again correlates with the price of the cryptocurrency.

However, looking at the Google trends of certain Bitcoin related search phrases, there seems to be an uptick in interest again, but what can be read into this is very much up for debate.

“Bitcoin”

eToro Senior market analyst, Mati Greenspan, tweeted about the uptick in interest for the term Bitcoin.

He is highly optimistic in the tweet that this is positive news, but his range of search is from March to present — which is a key factor. Looking at a graph for the same phrase over the past 12 months, it shows barely any change in interest.

 change in interest

This is because the uptick in interest which is being viewed from March is devoid of the peak interest which was seen over December.

More so, the term ‘Bitcoin’ is a bit ambiguous in simply determining what the searches are about. Like any good mainstream media source, there is huge reporting on the recent downfall of cryptocurrencies, and this could be fueling the Google searches.

“Buy Bitcoin”

Alistair Milne, CIO of the Digital Currency Fund, tries to decipher this trend a little more by looking at the phrase ‘buy bitcoin’, and he notes that there is no noticeable uptick on this phrase. But again, he has opted for a graph that looks at the last 12 months.

When one takes the same range as Greenspan and his ‘Bitcoin’ search, and applies it to ‘buy Bitcoin’ there is a small, but noticeable, uptick, in the search results.

True to form

Currently, Bitcoin has managed to bounce back up from a floor in the mid $3,500 mark, and as such, the Google results are showing this increase in price which — considering how nonvolatile BTC has been these past few months — is a big jump.

It is hard to say that Bitcoin is now back on track and hauling in millions of potential investors who are starting to search for it again, but there is indeed a uptick in search for the popular cryptocurrency again.

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Bitcoin Profit Review: Too Good to Be True

Bitcoin Profit may offer everything and more, but it looks like a textbook example of a cryptocurrency scam
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If you do not have any experience in trading, seeing a candlestick chart with a bunch of trading tools can be intimidating. On the flip side, one cannot help but envy those who make fortunes because of the high volatility of cryptocurrencies.   

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Those who want to jump on the crypto bandwagon as soon as possible do not want to take the time to learn how to successfully trade cryptocurrencies. They look for easy ways that would let them get involved in crypto trading in a snap (from automated trading bots to Bitcoin yield investment programs).  

In this review, we will cover BTC Profit — a website that specifically caters to the desire to profit big off of cryptocurrencies in practically no time. Whether one makes quick millions with little to no efforts has something to do with the reality of cryptocurrency investment.

Understanding Bitcoin high yield investment programs (HYIP)  

Before we get down to the actual review, let’s quickly grasp the concept of a Bitcoin high yield investment program (HYIP) that allows conducting trading on your behalf.

The rule of thumb is that any platform that offers high returns in a snap can be considered a scam. Do Bitcoin HYIP websites belong to the same crowd? Well, kind of.

Each Bitcoin HYIP site has its one lifespan which consists of several stages:

Stage I (the start)

The new website gets launched, and it further cooperates in order to lure in investors. At this stage, the administration behind this website has to shell out its own money in order to get the whole thing going.

Stage II (the peak)

As more and more investors find an easy way to make quick dollars, the website continues booming. The amount of profit rises, but the creator of the website covers the daily payments to investors.

Stage III (the downfall)  

The last stage of the site's lifespan involves investors leaving the website in droves while the administration wants to rake in the biggest profit possible by simply refusing to pay its users the daily reward.

The consensus is that you do have the ability to make quick dollars on such websites, but do not expect to get a steady long-term return on your investment.

The modus operandi of such websites is quite similar to cryptocurrency pump-and-dump-schemes. You are only able to make a profit if you are not late to the party. Otherwise, you will have to look for other ways of how to successfully trade cryptocurrency.    

How to spot a Bitcoin HYIP website?

The Securities Exchange Commision (SEC) offers a clear guidance on factors that help recognize such schemes:

  • guaranteed gargantuan returns;

  • fake financial instruments;

  • little to no information about the owners of the website.  

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BTC Profit

BTC Profit is yet another example of such a website. All you have to do is to put money into their platform for them to trade crypto on your behalf.

The website starts with a highly bullish prediction about people making millions by trading crypto, and the site assures that you can always join the exclusive club of Bitcoin millionaires despite the crypto rout.

BTC Profit

The video on its website states that everyone has already made millions by investing in Bitcoin (which is an outright lie). The good thing is that they don’t even try to hide it, so any person with common sense will be able to grasp the idea that their promised investment returns are too good to be true.

The website cannot be trusted, and it's a typical get-rich-quick type of site. The company's software looks absolutely bogus, and it clearly won’t help you to learn how to trade cryptocurrencies. Their primary goal is to get your email address and spam you with letters.  

$10 actors

The BTC scam hired gig actors with poor acting skills to make it seem like what was supposed to look like real investors. In the screenshot below, you can see one of the alleged investors who offers his service on Fiverr.

$10 actors

$10 actors

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Fake comments  

Not to mention the cheap Screenshots on their website. Like, did they even try to make them believable? These advertisements simply scream a scam.

Fake comments  

An elusive creator

Despite the site claiming that it was created by prominent crypto investor John Mayers, there is no actual information about the real owner of this site (this is a typical “feature” of all Bitcoin HYIP websites, no matter how fraudulent they are).

Is this a scam after all?

As you can see, BTC profit is a salient example of a scam. We do not rule out that you can make some short-term profit on this website, but it looks very likely that it represents the bottom of the barrel of Bitcoin yield websites. Despite many fake reviews with too much flowery, it is absolutely clear that BTC profit is not a legitimate trading system, but you will still be able to make quick money.

Ironically, the website has a disclaimer pertaining to potential earnings, claiming that individual results can “vary”. On top of that, all information presented on the website is entirely fictitious.

Is this a scam after all?

Becoming a real trader

OK, you won’t likely have thousands of dollars falling right into your lap just because you stumbled upon BTC profit. Remember that nobody is going to make money for you (while there are numerous AI-powered trading tools, they are not accurate enough to ensure a trader’s success). Hence, you have to learn how to trade cryptocurrencies on Reddit or any other crypto-related source.   

Before picking a specific coin, you have to analyze the white paper of this asset, and then choose the most appropriate exchange where you would like to trade it. If you are looking for the so-called “entry-level” exchanges, Coinbase would be the most suitable option for you since you can purchase cryptocurrencies directly with the help of a credit card or wire transfer. Robinhood would be a good option if you are curious to trade cryptocurrency without fees.   

The last thing you have to do is choose the most appropriate form of your cryptocurrency wallet (whether it’s the hardware or software wallet one).

For those who already know the basics of cryptocurrency trading, take a look at these main recommendations that will help you become a successful trader:

  1. Don’t buy the coin when it’s hot. Case in point: Ripple surging to $0.67 in September and then falling. When you see a steady surge, it will most likely be followed by a steady decline.

  2. Don’t listen to the advice of other investment-gurus. While it seems rather obvious, beginner-level investors might be tempted to buy into the lies of YouTube talking heads that are simply paid to promote projects. Avoid FUD by all means by properly researching the coin of your choice.

  3. Find the best trading strategy. Before dipping your toes in the obscure world of cryptocurrency trading, you have to determine your trading strategy — whether you join the ‘HODLer’ crowd, keeping your assets for dear life, or become a day trader who always has to keep his hands on the pulse of the market. After reading tutorials on how to day trade cryptocurrencies, you can also try margin trading (not beginner-friendly).

  4. Always keep up with the latest crypto news. U.Today will definitely help you stay informed.

Our verdict — no pain, no gain

While reviewing this website, we've come to the conclusion that it is really worth investing money in if you are a risk taker who's looking to make a quick profit. However, remember that you are walking on thin ice, and earning money as a cryptocurrency trader requires more than simply creating an account with a scam-ish website that promises you quick profits.

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🤷 Opinions Rajarshi Mitra

Anarchy and Cryptocurrency: The Relationship That Never Was

Opinions
Cryptocurrencies in their current form are definitely not following the anarchist principles
Anarchy and Cryptocurrency: The Relationship That Never Was
Contents

When Bitcoin first entered the market nearly a decade ago, it was thought of as the perfect tool for anarchists. Several so-called crypto-anarchists groups sprung up, hailing Bitcoin as the “path” to self-reliance and getting out of government control.

However, as it turns out, cryptocurrencies, in their current form are definitely not following the anarchist principles. In fact, there is an argument to be made that cryptocurrencies and pure anarchy were never really meant to be “partners-in-crime” in the first place.

So, before we get into all that, let’s first define what anarchy really is.

What is anarchy?

Merriam-Webster defines anarchy as one of the following five states:

  • Absence of government

  • A state of lawlessness or political disorder due to the absence of governmental authority (e.g. the city's descent into anarchy)

  • A utopian society of individuals who enjoy complete freedom without government

  • Absence or denial of any authority or established order (e.g. anarchy prevailed in the ghetto)

  • Absence of order

Now, that’s the dictionary definition. The word itself, however, is shrouded in a lot of negative connotations. If you put it in a positive light, the real meaning of anarchy is a society that has attained the highest order of consciousness. Members of this society have such high levels of self-discipline and empathy that they do not need an authority figure to keep them in check.

Unlike what many wrongly think, anarchy doesn’t mean getting rid of the government: it means elevating yourself up to a level where you don’t need one.

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Cryptocurrencies and anarchy

Back when Satoshi Nakamoto created Bitcoin and opened the floodgates for decentralized cryptocurrencies, people were wondering if this was the ideal tool that anarchists had been waiting for. Think about it, finally people had a currency system which didn’t rely on a centralized entity to take care of it.

In fact, way before Bitcoin even came out, cypherpunks and old school cryptologists already identified cryptography as a method of attaining proper anarchy. Timothy May, one of the original crypto-anarchists, wrote a report back in 1994 titled, “Crypto Anarchy and Virtual Communities.” In the report he explains:

“The combination of strong, unbreakable public key cryptography and virtual network communities in cyberspace will produce interesting and profound changes in the nature of economic and social systems. Crypto anarchy is the cyberspatial realization of anarcho-capitalism, transcending national boundaries and freeing individuals to make the economic arrangements they wish to make consensually.”

That pretty much set everything up for cryptocurrency systems and other encryption-based technologies.

Bitcoin leveraged Blockchain technology to create an ecosystem in which two people could transact with each other without getting involved with a bank. For the first time ever, you, and only you had full control over your own money.

Early adopters of Bitcoin, especially the ones who were coining themselves “crypto-anarchists”, had a big responsibility of spreading the word around to create this crypto-anarchic ecosystem; however, their attitude changed as soon as the market conditions improved, and the value of their assets swelled exponentially. They inevitably became whales, i.e. they just sat on their money and started to accumulate more wealth, failing miserably in the process at what they were originally supposed to do.

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Current state of cryptocurrencies

As cryptos have gotten more and more mainstream, it looks like they have also lost that anarchic streak that made them so desirable when they first entered the market.

To set the record straight, we still believe that cryptocurrencies have the capability of disrupting the financial sector for good. Nonetheless, it goes without saying that the entire system is becoming more and more businesslike these days, and it looks like this is not going to change any time soon.

With more and more people coming in, newer investors are getting extremely jumpy around price volatility. Concurrently, in order to protect their interests, governing bodies like CFTC and SEC have entered the fray as well. Investors have become increasingly open to regulated investment opportunities like ETFs, Bakkt, etc. Big crypto exchanges have been pressurized into adding KYC regulations; in fact, Andreas Antonopoulos recently expressed his dismay on Shapeshift opting for KYC. He sees Lightning Network, Decentralized Exchanges, and Atomic Swaps as possible future replacements:

Andreas Antonopoulos

The idea that “we will go with the government in the beginning and then branch out on our own” never really works out in the long run. Once the government has their clutches on something this disruptive, it will be hard to see them let go.

So, as you can see right now, the current crypto space is definitely not anarchic. Be that as it may, this is where we need to ask ourselves another question.

Were cryptocurrencies ever meant to be anarchic?

True anarchy is against the usage of any form of currency since money is a commodity controlled by the government. Nevertheless, even if money wasn’t under the government’s control (like with cryptocurrencies), the value that a capitalistic system itself puts on money is the biggest problem, and this doesn’t change with decentralized currency either.

The anarchist community advocates changing the money economy to a gift economy, wherein people get paid with gift vouchers in return for their services. However, there are certain schools of anarchist thinking that don’t have a problem with having currency.

Deeper than just “anti-government”

From whatever we have shown so far, one thing becomes very clear.

The cryptocurrency space has never been anarchic, in the purest sense of the word, and never will be. Sure, it offers a decentralized currency which can be used trustlessly for daily transactions; however, the concept of anarchy goes deeper than just being “anti-government.”

The core idea of anarchy is to be self-sufficient and competent enough on your own as a society that does not require government’s intervention. Old school anarchy believes that the idea of money, be it in its physical form or its decentralized cryptic form, can seriously threaten this core concept.

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Thomas Hughes

Litecoin Volume Buffs Up. What’s Next?

According to Bitinfocharts, more than $1.1 billion worth of LTC was transacted over the Litecoin network on Nov. 30
Litecoin Volume Buffs Up. What’s Next?

According to Bitinfocharts, more than $1.1 billion worth of LTC was transacted over the Litecoin network on Nov. 30, but the volume started to climb even before that (almost $600 million worth of LTC transacted on Nov. 29).

Considering that the average daily volume for Litecoin is much lower, we can safely assume we are dealing with a whale or group of whales moving their assets. And if we were to speculate, we could say that an entity like the Bakkt exchange is preparing for their early 2019 launch.

Chart Analysis – LTC/USD

Chart Analysis – LTC/USD

Litecoin gave up the gains made a few days ago and dropped after reaching a high at 37 against the US dollar, disappointing most of its fans who were expecting a stronger recovery towards $40.

Currently, the pair has established support on the bullish trend line seen on the chart above and is trading around 32, but below the 2 Exponential Moving Averages, which are still crossed bearish (i.e. 50 EMA-red is above 20 EMA-blue).

The pair has printed a higher low, which is a bullish sign but also a lower high, which is a bearish sign and all these paints a blurry picture, like most other cryptocurrencies, which are showing the same behaviour. A breakout above or below the triangle formation seen on the chart will most likely trigger an extended move.

Support zone: bullish trend line followed by 27 – 28 area

Resistance zone: bearish trend line

Most likely scenario: move outside the triangle; we slightly favour the long side because the downtrend is overextended

Alternate scenario: tight range, move outside triangle without momentum or clear direction

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