cryptofutureblog-blog

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Here’s a neat little guide that loops together a ton of terms you’ll hear in a conversation about crypto. It’s relatively simple to understand, and should be a handy reference for crypto newbies and people who need a refresher on crypto terminology. It even has some of the popular meme terms, which are handy to know if you’re ever browsing a crypto-related internet message board.

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I don’t know about all of you, but Lord knows I could use a hand in reporting my crypto earnings. I conduct numerous trades each day and transfer funds across several platforms, and keeping track of every little number is insane. Aside from that, (I feel) the IRS is pretty unclear about just how you’re supposed to file taxes for cryptos. This article discusses a new startup called ClearTax that has a crypto tax advising service they are offering in conjunction with the Indian exchange ZebPay. I think that services like these will be critical to citizens worldwide when it comes to reporting their crypto earnings. As for India, this will likely help the government get a better grip on the markets, and help push the repealing of their crypto ban. Check out the article for more details!

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Indian citizens have immediately voiced their opinions in regard to the government’s decision to ban cryptocurrencies. As a result of the difficulty in reporting capital gains through cryptocurrency, India’s government is trying to eliminate crypto entirely. The petition, posted on Change.org, heavily criticizes the government’s hasty decision, and requests that the law be repealed immediately. They make several good points, such as the fact that the price drop alone caused by the ban has already harmed millions of citizens with crypto, and that successful exchanges are a boon for the economy. They also claim that India is choosing to lag behind the crypto revolution, and that crypto is an unstoppable force. Whether or not you feel this strongly, there is some truth to the idea of falling behind the rest of the world when it comes to future tech.

To play the devil’s advocate, I will note that some of the government’s reasons for the ban are not unreasonable. Fear over market instability, money laundering, and consumer protection are some of the primary reasons for the ban. The government has few regulations on cryptos, which means that people can dodge taxes or have currency stolen without the government being able to step in. The ban comes from the need for immediate action, and may help out by allowing the government to develop more regulations to protect the economy.

Before you decide that this may have been the right decision, there is word that the Indian government is looking to create its own cryptocurrency. Can you imagine if someone just decided to deny your money and force you to pick a new currency instead? That feeling is what has helped to raise over 20,000 signatures for this petition. As the article mentions, the government is not required to acknowledge a petition, it just shows public sentiment. The best thing that those of us in other countries can do is try to raise awareness and help our fellow investors in India, as their market is one of the biggest in Asia, and their downfall would be quite detrimental to the overall crypto market.

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It has been a rough journey for India’s crypto markets, as the government has recently banned virtual currencies outright. Many people have taken a stand against the legislation, which I will discuss in a future post. The main issue the government has is that it has had a great deal of trouble keeping cryptocurrencies in check, and instead of working to establish tax laws and regulations on exchanges, they said “screw it,” and are trying to eliminate the market entirely. This knee-jerk reaction has upset many people, as numerous banks and citizens have a large investment in the currencies. The ban does not help crypto’s worldwide case, so hopefully an agreement can be reached between India’s government and its citizens.

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It is interesting to see some actual statistics of traders around the world. Coindesk reports that Japan's Financial Services Agency has gathered data from 17 different crypto exchanges that shows at least 3.5 million individuals actively trade within the country. It is always good news to see that more and more people are getting involved with cryptocurrencies. I have high hopes for Japan with respect to the crypto market, as they have always been known for their advances in technology and their drive to enhance their society. They may turn out to be an early pioneer in the integration of crypto into everyday life. If this came to be, many other countries could follow suit and successfully secure crypto’s future.

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Even though I tend to side with the bulls when it comes to crypto, I agree with this story. Bitcoin reached almost $20,000 at an absurd rate, catching the attention of millions of new investors, young and old. Despite the fact that this is still one of the most volatile markets in history, it is less volatile now than when it was flying under everyone’s radar. The entire crypto market has declined at various paces since then, and usually falls again after climbing a little bit. The main issue that is still growing is the increased government regulation of the market all around the world. Crypto only holds the value that people give it, and if fewer people can use it, there’s no good reason why it would ever rise above the price during a time with little regulation.

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This was a pleasant surprise when I looked at the markets this morning. As is mentioned in the article, experts have had trouble pinpointing the cause of this sudden surge. Ethereum and LiteCoin have followed suit, as is typical of the smaller currencies. People have taken both sides of the field once again, with some claiming this is just a new bubble and others claiming this will drive the price past the 2017 high. I’d like to think that this will be good for the major cryptos, as the higher prices usually bring in a higher influx of new investors.

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Here is a recent collection of data regarding crypto ownership in the US. The study claims that roughly 8% of Americans currently own cryptocurrency, and another 8% plans to buy some in the future. Another study noted in the article provided a survey of why people choose not to, with the most common being that cryptocurrencies are too hard to understand. Others simply showed disinterest or felt it was too risky.

I would like to see this number at least triple before I begin to feel confident that crypto is here to stay. All things considered, this study probably isn’t completely accurate, given the sample size. I do think that it is important to note why people chose not to use it, however. Since so many people are afraid to get into something they don’t understand, it falls on those of us who have high hopes for crypto’s future to teach possible investors why they should get into it. The whole idea of crypto is that the people who use it will give it value, so having more people consider it worth something will only help our cause. Check out the article above to see the actual numbers, it’s a pretty interesting read!

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Here is a story that leans in the opposite direction of my ideas for crypto’s future. President of the Atlanta Federal Reserve Raphael Bostic has spoken out against the concept of cryptocurrency at the annual meeting of Hope Global Forums, a meeting concerning the well-being of poor communities. He makes some good points that are worth noting regardless of where you stand on crypto’s future. 

Cointelegraph quotes Bostic as saying, “Don’t do it… They are speculative markets. They are not currency. If you have money you really need, do not put it in these markets.” He is right about the markets being speculative, as they have immense volatility compared to something like a large cap stock. It is quite difficult to make a prediction of the market’s direction in most situations. As with any investment opportunity, you should never invest money that you can’t afford to lose. Even then, you wouldn’t want your entire portfolio to be in one asset, either. As for whether or not cryptocoins are a currency or not falls more into the opinion category at this point in the year. While the IRS considers it property, many small businesses around the world will accept crypto as payment. Once/if it begins to become integrated into larger businesses, it’s becoming a real currency will be even more likely. Whether or not you choose to take his warnings to heart is up to you, but it should serve as food for thought either way. Check out the article if you would like to read more about the subject.

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I will point back to my commentary on the story about google banning crypto ads for this one. Most of the ads are targeted at people who know nothing about crypto and seek to take advantage of them. Some are even reported to have malware included in them. The article notes that Twitter is the 9th largest digital ad provider in the world, and that this ban could possibly lead to a decline in the crypto market. It is also worth noting that Twitter is allowing some ads to remain, such as crypto management platforms and those posed by a publicly traded company.

As for the impact of this ban (I think of it more as cleaning out the bad ads), I still doubt that this will affect the market as badly as people might think. The market is made up of active traders and investors who already have a basic understanding of the system. If anything, banning bad advertisements will help foster more trust in the crypto system, as I noted in my previous post.

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While this may not relate directly to the crypto market, it is still significant in the greater scheme of things. If you weren’t already aware, the demand for GPUs (graphics cards for computers) has skyrocketed due to crypto miners buying so many for their rigs. My main GPU ran for $450 back in 2016 when I bought it. Most retailers are selling it at the inflated price of $1000 or so today. Yeah. This is terrible news for anyone looking to build a gaming PC, as you are paying MUCH more for the same level of quality. Every retailer I know runs out of stock mere minutes after getting a new batch of cards. As for how this relates to the market, I think that the continued purchase of cards shows that there are still many people who believe crypto has a future and are still making an effort to mine it. Cryptocurrencies are kept alive by the people who use them, as we are the ones who gave them value in the first place.

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As with any crypto related market drop, the cause here can’t really be attributed to any one reason for the crash. The markets for every major coin tend to move all together. I have been watching crypto go up and down throughout the past several months, and intense price fluctuations are typical. I can’t say whether it will rise again or not, but I prefer to look at the much bigger picture here. This blog considers whether or not cryptocurrencies have a future, and I think that they do. The price drops will hurt you if you are an active trader, but for those who are holding it for the long run, drops are to be expected. Just like with stocks, it is key to avoid letting emotion get the best of you when making investment decisions. Even if a coin’s value dropped to a dollar (ignoring mining costs and whatnot), it is still worth something, and if it becomes a part of the global economy, it could potentially become an incredibly valuable asset.

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This was posted back at the beginning of the year, and I chose it because it relates to the subject of crypto’s future directly. The author makes 4 interesting predictions as to what will happen to cryptocurrencies by the end of 2019.

Prediction 1: Bitcoin has a 50% chance to reach six figures by the end of 2019.

Now before I argue against this prediction, I will again note that this was made at the beginning of the year. Also, a 50% chance is not great odds in the first place. Bitcoin’s price was skyrocketing at the time and has since fallen for the time being. Either way, I think that it is far too optimistic a view, and that no cryptocurrency will reach that high of a price. Additionally, none of the currencies have managed to top their previous highs, due to increased government regulation of cryptos and sometimes due to outright bans on trading platforms. This leads on to CryptoBadger’s next prediction.

Prediction 2: Governments will increase regulation of cryptos.

This has already come true, as several countries have already shut down popular exchanges. The IRS is working to implement more tax laws on traders, and some South American and African countries have outright banned cryptos altogether.

Prediction 3: Slow deaths of worthless ICOs

I have not mentioned what ICOs (Initial Coin Offering) are yet in this blog, so we’ll just call them “new cryptocoins” for now. People offer their new coins in exchange for popular ones with the promise that the new one will be worth a lot in the future. The problem is that anyone can create a new coin, but rarely will those ever become worth anything significant. People buy into the hype and end up getting ripped off big time. CryptoBadger claims that the bad ones are going to die off, and I would have to agree with this. As the crypto community has become more educated, people have already begun to ignore the more radical ICO claims. I think it’s only natural that the market will root out the problems and make itself a healthier place to do business.

Prediction 4: Amazon will accept cryptocurrencies

This is a very interesting subject to me, as I would never expect Amazon to start accepting cryptos so soon. As volatile as cryptocoins are, it would be dangerous for Amazon to start treating them as legal currencies. On the other hand, if Amazon did accept crypto, then the entire market would receive a HUGE boost and start to quickly become a bigger part of society. While I can’t say I am as optimistic when it comes to Amazon’s acceptance of cryptos, I can say that this is the prediction I truly hope will come true. The future of crypto would be secured if large companies started accepting it.

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This article essentially claims that whether cryptocurrencies will last is based on what the world’s governments decide to do about them. Some countries have banned them entirely, out of fear of losing their authority over the coins. The US classifies them as commodities, and owned coins are taxed as such. This limits what regulation the US has over the currencies. Whether or not the government will act in favor or against cryptocurrencies I cannot say, but I would agree that the government will most likely have the final say in whether or not crypto is allowed to grow. What do you think? Will crypto grow even if it has restrictions placed on it? Will the government allow it to become an even bigger part of society? Let me know in the comments below!

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Google is taking measures to prevent people from advertising their products relating to cryptocurrency. This may seem detrimental to the market values of crypto coins, but I think that this will be beneficial in the greater scheme of things. There was previously an ad on YouTube that infected people’s computer with a bug that stole their processing power to mine coins. Many of the current ads are of a somewhat similar nature, leading to scams or shady websites trying to take advantage of people who are looking for a get rick quick scheme. I think that the benefit comes from people feeling safer dealing with cryptos, and not like someone is always out to get them. While Google has not stated their reasons for the ban yet, I am willing to bet that I am somewhere in the ballpark.

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What is Cryptocurrency?

I use Bitcoin as the primary example for simplicity, but these principals apply to most all types of Cryptocurrency.

What is Bitcoin?

https://www.coindesk.com/information/what-is-bitcoin/

Bitcoin is a decentralized currency based on mathematical proof rather than a physical object. Though you’ve probably seen pictures of coins with weird symbols on them when looking up crypto related information, there is NO physical representation of the coin in reality. It is represented by numbers and code, and that code is given a decimal value based on the amount of work you used to “mine” it. The main points of Bitcoin and Cryptocurrency in general is that:

-They are decentralized, meaning that no one person or group can control the currency

-They are (generally) based around anonymous transactions

-They are limited in supply. This means that at a certain point, there will no longer be any of the coin available to mine

These three points are the most significant to me personally, but the article I linked will provide more points and greater depth to their meanings.

How do I get some?

https://www.coindesk.com/information/how-can-i-buy-bitcoins/

-Mining

I always describe it to people like this. (This is not a literal representation, just the way I present the context of crypto to people). 

Imagine that there’s a treasure chest in front of you. Instead of a lock in the middle, the chest is covered in many complex math problems that make it impossible to open. You spend a long time working on it, but eventually solve all the math problems and open the chest. Inside, you find, say, 3 Bitcoins.

The chest is actually called a block. Instead of solving the problems by hand, you would assign different pieces of computer hardware to use their power to run a script (or, mine for currency)that works to solve the problems for you. The tricky part is that the math problems get harder and harder over time, and sometimes your computer will not be powerful enough to solve the whole block. There are other ways of getting a cryptocurrency, but those are not entirely relevant to the point of this blog.

-Purchasing directly from a market

https://www.coinbase.com/dashboard

https://www.gdax.com/

https://bittrex.com/

I only use Coinbase and GDAX, but Bittrex is also very popular. If you are not looking to actively trade and monitor the graphs of a coin’s performance, then I would recommend sticking to Coinbase, as it is the most consumer-friendly. There are many other exchanges, but I don’t associate much with them so I have not provided any more links.

You can also buy crypto on a trading market. They are generally quite safe, but its always good to know what you’re getting into when it comes to trading. Do your research before you go out and buy any crypto!!! The value of a coin can go from $1000 per coin to $580 to $1400 to $700 in a matter of hours! You also must know how to store and manage your coins. I will provide additional research websites to help you out with understanding some of these concepts.

TLDR: Bitcoin is an electronic currency that is “mined” using a computer’s power. It is not an actual coin, it is represented online using code. It can be sent from one user to another anonymously, and only has as much value as the people trading it give it. You can mine it yourself, or buy some from a market, but beware the volatility of new currencies like these.