Japan Considers Regulating Virtual Currencies as Conventional Currency Equivalents

Japanese legislators officially proposed handling virtual currencies as methods of payment on February 23, Nikkei reports. This would mean that virtual money, such as Bitcoin, would become the regulatory equivalent of conventional currency.

Legislators of the financial services industry believe that this move could potentially strengthen consumer protection and create growth in the virtual economy. At the moment, Bitcoin is recognized as “an object,” but it is not considered equal to more established forms of currency.

The proposed changes to the definition of virtual currencies would mean that items such as Bitcoin could be used to purchase goods and services. Additionally, they would be considered exchangeable for legal tender via trade or purchase.

However, acknowledging virtual currency as an equivalent to conventional currency would require certain institutions to register with the Financial Services Agency.

This is not the first time Japan has examined Bitcoin and its global use, as seen in apress conference held in 2014. At the time, Finance Minister Taro Aso addressed how Bitcoin has been treated in Japan, as well as around the world.

“The media may regard it as such, but it is not a currency that everyone recognizes as currency, so I don’t really know whether the Ministry of Finance or the Financial Services Agency should have jurisdiction over something that is not a currency, whether the Consumer Affairs Agency should have jurisdiction because it is used by consumers, or whether the National Police Agency should have jurisdiction because a crime may have been committed,” said Aso. “In Japan, the issue is quite advanced, so for quite some time I have thought that some actions might have to be taken in Japan, though I think that this time has come much earlier than expected.”

Currently, there are more than 600 forms of virtual currencies used around the world. As of February 24, one bitcoin holds thevalue of approximately 47,000 Japanese yen.

As the prominence of virtual currencies continues to grow, Nikkei reports that monetary authorities are attempting to institute regulations to address issues, such as money laundering.

In 2015, Aso addressed the use ofBitcoin and other virtual currencies for the purpose of funding terrorism and other crimes.

“I think it was at the G7 summit that discussions addressed the need to introduce regulations in order to prevent terrorist funding, tackle money laundering, and so on,” Aso said. “We’ve gathered a lot of information, and I think that the actual ways the currencies are used need to be properly reflected, and I think that studies need to continue concerning an approach.”

 

Bitcoin Core 0.12.0 Released: What's New?

Today marks the official release ofBitcoin Core0.12.0, the twelfth generation of Bitcoin's reference client as first launched by Satoshi Nakamoto seven years ago. Developed by close to 100 contributors over seven months, the latest version of Bitcoin Core includes more than 20 improvements, particularly regarding performance, security and usability.

These are the sixth most notable changes.

Memory Pool Limiting

Memory pools are the collections of unconfirmed transactions as stored individually by all full nodes. Memory pools fill up in between blocks as new transactions are transmitted over the Bitcoin network and are depleted when these transactions are included in blocks. But if a series of subsequent blocks remain full for an extended period – either due to legitimate transactions or spam attacks – memory pools might not deplete completely, and backlogs could build up. With no maximum limit, the backlog might even grow to the point where nodes run out of memory and crash. (This is the “crash landing” scenario former Bitcoin XT lead developer Mike Hearn feared.)

Memory pool limiting, as the name suggests, enforces a hard limit on the maximum size of memory pools to prevent this scenario. If the maximum is reached, nodes reject or clear their memory pools of transactions that offer the lowest amount of fees per byte.

Full node operators can configure their limits, but the default maximum size in Bitcoin Core 0.12.0 is set on 300 megabytes.

Blockchain Pruning for Wallet Users

One of the burdens of running a full node is the requirement to store the complete blockchain. This adds up to55 gigabytes at the time of this writing, and can grow another 50 gigabytes per year under the current 1-megabyte block size limit.

To decrease this requirement, Bitcoin Core 0.12.0 allows users to prune the blockchain, which means they can get rid of older data once their node has verified it. The amount of data to keep is configurable, though Bitcoin Core 0.12.0 will still require a minimum 2 gigabytes of disk space.

Pruning the blockchain does mean these nodes will no longer be able to share all the blockchain data with peers, such as full nodes syncing with the network for the first time.

(It should be noted that pruning the blockchain was first introduced in Bitcoin Core 0.11.0, but was not yet available for users running Bitcoin Core as a wallet.)

Upload Traffic Limiting

Full nodes continually transmit and relay transactions and blocks to each other over Bitcoin’s peer-to-peer network. This typically requires a modest amount of data to be downloaded, but sharing that same data with several peers at the same time can add up to significant upload costs.

Bitcoin Core 0.12.0 introduces a configurable data cap for upload traffic. If this cap comes within reach, the node will seize uploading blocks older than a week, typically requested by nodes first syncing with the network. Additionally, any light clients will be disconnected and no longer served any block data.

Opt-in Replace-by-fee

As the number of transactions on the Bitcoin network increases, not all transactions might fit into blocks. As such, miners will probably pick the transactions sent by users who included most fees. This means that some transactions – from users that paid too low a fee – could never confirm at all. And since many full nodes and miners currently reject conflicting transactions (sent from the same inputs as an earier transaction), low fee transactions can get “stuck” on the network.

To solve this, Bitcoin Core 0.12.0 introduces opt-in replace-by-fee. If a transaction is sent using opt-in replace-by-fee, users can replace their own transaction with a newer transaction by including a higher fee. (This also means that miners can increase their income, as they get to pick transactions that include higher fees.)

The “opt-in” part of opt-in replace-by-fee means these types of transactions will not be the default, and will be flagged as replace-by-fee transactions on the Bitcoin network. Anyone relying on zero-confirmation transactions should want to monitor for these replace-by-fee transactions, as these could very easily be reverted until they are confirmed. (Of course, zero-confirmation transactions were never secure.)

Whether opt-in replace-by-fee will actually be useful depends on Bitcoin miners; they ultimately decide which transactions to include in blocks, and under what policies.

Tor by Default

While Bitcoin is often claimed to provide anonymity to users, this is not entirely true. Bitcoin users can be de-anonymized, for example, through the peer-to-peer network. If it is determined from which IP-address a transaction originated, this information can be used to identify Bitcoin users.

To protect users' privacy, Bitcoin Core 0.12.0 automatically connects to the Bitcoin network through anonymizing tool Tor (The Onion Router) – ifTor is installed on the same computer. Tor encrypts data and routes it through several nodes all across the world before broadcasting it. This makes it hard – perhaps impossible – to trace where a Bitcoin transaction originated.

(It should be noted that using Tor in itself might not be sufficient to protect a Bitcoin user’s identity. SeeBitcoin Magazine'sBeginners Guide to Bitcoin Privacyfor more information.)

Faster Signature Validation

Signatures are the cryptographic trick where private keys are “combined” with any other data to calculate a unique string of numbers. Corresponding public keys can be used to verify that the signatures were created using the private keys. In Bitcoin's case, signatures are effectively used to prove ownership of bitcoin, and, as such, to validate transactions.

But there are several ways to conduct this cryptographic trick, which could result in different signatures – all valid in their own way. And if different Bitcoin nodes apply different methods for validation, some nodes might consider certain transactions valid while other nodes do not, which could split the Bitcoin network.

Following up on a soft fork to solve this problem last year, Bitcoin Core 0.12.0 now switches all validation from the “OpenSSL” cryptographic library to “libsecp256k1”, developed by Dr. Pieter Wuille, Gregory Maxwell and other Bitcoin Core developers.

As an added benefit, this new signature validation scheme requires less CPU-power, lowering the cost of running a full node and significantly decreasing block validation time.

For a full list of improvements, see Bitcoin Core 0.12.0's release notes onGitHub.

Thanks to Bitcoin Core lead developer Wladimir van der Laan, andCiphrexCEO and Bitcoin Core developer Eric Lombrozo for proofreading and added feedback.

The Legal Marijuana Industry Needs Bitcoin Badly

Legal marijuana has been having banner year after banner year since various states havelegalized the sale and consumption of the plant and its derivatives starting back in 2012 within Colorado and Washington. It should be noted that the process of marijuana’s status as a demonized drug has been slipping for much longer than the past 4 years.

The first medical marijuana dispensary in the United States was in California back in 1996. As a business model, it’s hard to beat being a legal seller of pot, whether in a medical capacity or fully legalized manner. It’s common to see business owners and consultants cross-pollinating across state lines to be first in line to get licensed into new states as they pass legislation to legalize. But the green-rush to get into a successful marijuana business can be a headache because of some of the highly restrictive financial laws associated with running such an operation.

So, the question must be asked – is there a potential solution to this problem with Bitcoin?

Few of us could honestly complain about being too cash rich, right? Well, many of the owners of marijuana dispensaries have this exact problem. While fantasies about being surrounded by piles of green bills might seem appealing, there are several inherent problems with this.

Marijuana Is Legal within Certain States, Not the Entire United States

Marijuana had an almost revolutionary moment when people from certain states within the U.S. stood up collectively and declared that they weren’t going to be persecuted for the cultivation, sale and use of a plant that some believe to be not only not harmful, but beneficial. Regardless where these states stand on the subject of what place marijuana has in society, the fact remains that it is still very much illegal in the eyes of the Federal Government.

Sitting within the same scheduling class as heroin, ecstasy, and LSD, being caught with and prosecuted for being involved with marijuana in anyway can land you a major jail sentence and massive fines. Untold numbers of people in the U.S. have been locked away for years for being caught with small amount of marijuana on their persons. So, that’s quite a stark contrast between what’s happening within state limits and on a national level.

No Checks, No Cash Deposits and No Credit Card Transactions

For those who have never visited a marijuana dispensary, they can range from the atmosphere of a nightclub, to almost a sort of Persian tapestry showroom. The business and branding styles of dispensaries varies greatly and depends in large part on the owners and people working there. However, if you step into the back office room, you’ll notice something similar between virtually every dispensary. Besides computers which manage inventory and transactions and some videodisplays for CCTV, you’re likely to see a massive safe.

What lies behind the doors of that safe is cash – lots and lots of it. Due to the sheer illegality of marijuana under Federal law, dispensaries and any business directly associated with the production or sale of such products cannot write checks, deposit money into financial institutions and cannot accept credit card payments.

While you may have been to a dive bar, diner or food truck that was cash only, it’s likely that most businesses you use accept some form of electronic payment via Visa, MasterCard, Etc. However, you’ll never find that at any dispensaries. This causes a huge stockpile of cash in the operations of virtually every dispensary in business and causes big logistical headaches for the owners to manage that cash.

The Dangers of an All-Cash Business

In movie scenes where you see townie Boston thugs robbing a bank and somehow losing the cops in a car chase in a major U.S. city, it’s hard to imagine how actual bank robberies realistically happen anymore. It’s no secret how guarded banks are and at this point in time, it’s hardly worth the risk to anyone who isn’t completely desperate and on the run. However, cash-only businesses like marijuana dispensaries are a prime target for crime.

Many of these operations must be hyper vigilant just to keep internal employees honest and from skimming cash every chance they get. Never mind a brazen planned robbery on an unsuspecting dispensary which could lead to financial losses in the hundreds of thousands, if not millions, or even worse, injury or death of the business people.

The Time for Bitcoin Is Now

In an industry that’s slated to reach $6.7 Billionin total revenue within this year, there needs to be a solution to this cash-rich business problem being faced by dispensaries. It’s simply not safe or practical to be managing so much physical cash within a location that is a potential target for crime. Due to cash which is associated with marijuana sales not being eligible for circulation of any kind through financial institutions or through credit cards, Bitcoin is potentially a life-saving solution for the near-term and long term.

Bitcoin has no central authority, therefore there’s no immediate way for the government from a State or Federal level to intervene with dispensaries processing their transactions or cash through Bitcoin. While in theory, dispensary owners could take their mountains of cash to local Bitcoin ATM’s and after hours or even days finally deposit their cash into Bitcoins, a better solution would be for dispensary customers to purchase their products using Bitcoin. With this, as we’ve seen before in other industries, it’s going to largely be an educational challenge for dispensary owners and their customers.

Getting people on board to knowing how to securely purchase and store their Bitcoin and then use it transactionally is a challenge, but certainly a smaller one than figuring out how to safely move huge amounts of cash. While there’s always potential for the Federal Government to get involved somehow with attempted regulation and while the price of Bitcoin has potential to be volatile, the upsides to this solution seem to be too good to ignore.

As seen in cities around the world, Bitcoin supported commerce ecosystems are certainly possible, but it requires dispensaries to be bigger stewards in their communities and put efforts in that they probably didn’t need to before. Imagine a co-working space that was sponsored by a dispensary with a cafe, small restaurant, and a few Bitcoin ATM’s where people could go, congregate and help support a movement beyond their own medicinal interests into a radically different and better local economic system around Bitcoin.

Inside Bloq's Bid to Bring Bitcoin's Code to Enterprise Businesses

Long-time bitcoin developer Jeff Garzik and industry investor Matt Roszak have teamed up to launch Bloq, a new startup ambitiously billed as a "Red Hat for blockchain", in a nod to the $1bn open-source software company.

Backed by $250,000 in capital from Roszak’s firm Tally Capital, co-founders Garzik and Roszak said that Bloqaims to provide a engagement layer for enterprises companies that may otherwise be uncertain about dedicating resources to engineering and strategy efforts that leverage open-source blockchain technology.

Though the company debuted in a high-profile article onBloomberg, the article was perhaps short on how Bloq would implement its vision, and in particular, its theses on the underlying tech for which it would offer services.

In a new interview, Garzik framed Bloq's vision as one that sees the industry evolving toward a "multi-chain, multi-token" ecosystem in which bitcoin will serve as the "root of an Internet of chains".

As such, Bloq's products take advantage of bitcoin’s features, including its secure blockchain, well-developed code base and global community.

Garzik framed Bloq as a startup aiming to emulate the tested formula created by Red Hat, which he contends was able to successfully mediate between a sometimes divided Linux community and businesses that wanted to build on the open-source operating system that ecosystem had developed.

"Red Hat stepped in," Garzik, who is himself a 10-year veteran of that company, explained. "Red Hat was the commercial enterprise that could listen to [enterprise] needs, plot them on a long term roadmap and manage the engineering and development of those features with the rough-and-tumble Linux community."

The common theme in Bloq’s products, Garzik said, is that they will come with the support that large companies require when seeking to leverage open-source tech, adding:

"Enterprise customers need more than a volunteer, ad-hoc support effort. They need contractual deadlines for responses. Professional 'this feature by X date' product management and more."

To date, Bloq has already scored high-profile partnerships with industry startups Circle and Noble Markets, and is in discussions with PwC about its offering. PwC said it is still evaluating a more formal engagement with the startup.

Roszak said that Bloq so far boasts 12 employees, and that it will seek to double its staff as it scales its operations. Apart from Garzik, notable saffers include Andreas Schildbach, who today runs the Java-based application development library Bitcoinj.

"We are just about to build out a more formal sales and marketing initiative, but it’s going to be calibrated. We're building a company for the next 20 years," Roszak said.

Product line

At launch, Bloq is billing itself as an "enterprise-grade blockchain" service, with initial products including BloqEnterprise, BloqSuite and BloqThink.

Garzik described BloqEnterprise as offering supported access to the bitcoin network, clarifying that it is best considered a "bitcoin specific" product.

Specifically, BloqEnterprise includes a supported version of the command-line interface bitcoind; libraries such as the bitcoin network’s replacement for OpenSSL, libsecp256k1; and bitcoinJ, a client library written in Java. Garzik said that a Python library is also on the way.

Additional products at launch include BloqSuite, its proof-of-concept development offering; and BloqThink, its strategic advisory and consulting service.

Both, he said, are aimed at striking a balance between high-level strategy and low-level engineering, and are more agnostic in how they will approach working with blockchain technologies other than bitcoin.

"BloqThink is 'default bitcoin'," Garzik said. "[It's] bitcoin-centric, but not bitcoin-required. We can handle Ethereum-related proofs-of-concept."

Roszak similarly said that Bloq is focused on helping enterprises build an "Internet stack" in the same way that they built e-commerce platforms in the 1990s.

"We’re seeing a world where you’re going to have a constellation of chains, whether it's Ripple, Ethereum or bitcoin, there's going to be connective tissue of common software layers," he said. "If we want that ecosystem to scale, we need to give [enterprises] those common denominator tools."

Unrivaled support

Roszak estimated that, today, Bloq has a dozen customers who see value in its model because of its ability to allow businesses to access open-source blockchains, without having to hire full-time developers to help adapt the protocol to their needs.

"They don’t want to hire five Core devs because they want to manage this wallet or a private chain, they want to build applications for vertical markets, whether it’s health records or clearing and settlement," Roszak said.

Unique to its offering is that Bloq aims to offer 24/7 support to its clients, in an effort to better assuage concerns about working with open-source tech. Bloq engineers will also implement features needed by clients into bitcoin’s code, in a similar fashion as industry startup Blockstream.

Garzik described this work as implementing the "scaffolding" that has perhaps so far led enterprise businesses to seek to create private blockchain solutions.

"Open-source projects can be of very uneven quality," Garzik said. "That's really what the Red Hat model is all about – working with the community, yet taking it up a notch, bringing enterprise clients the support that open source doesn't by default provide."

He further described private blockchains as "inevitable", but posited that using bitcoin's code for such projects may be the best way to ensure there is compatibility between all blockchain and distributed ledger systems.

Ex-factors

Of course, given the budget and experience of the Red Hat team, Garzik and Roszak also addressed the need for a company like Bloq even if Red Hat were to enter the market.

Roszak said Bloq would benefit from an imbalance in the amount of interest in the space and the amount of qualified professionals who can work with the new technologies needed to carry out this vision.

Because of the early stage of the technology, however, he said he believes companies like Oracle and Red Hat are unlikely to offer such solutions in the near-term, and that they may even become customers of Bloq given its collected expertise.

"We look at ourselves as partners to these companies in terms of our go-to market and how we view the ecosystem," he said.

Garzik also addressed why he is not concerned about building Bloq as a service focused on the bitcoin blockchain, even amidst the current turmoil in its development community.

Though Garzik is one of the developers working onBitcoin Classic, an effort seeking to scale the bitcoin network's transaction capacity through a hard fork, he sees Bloq as "policy neutral".

"We are very happy to support customers with Bitcoin Core or Bitcoin Classic consensus rules, and that is what we will do moving forward," he said.

Garzik pointed to past posts in which he stated he believes both versions of the bitcoin software suffer from governance issues, but that ultimately, Bloq's function is not to present problems to technical debate, but provide choice to customers seeking to navigate such decisions as necessary to their business

"We provide the choice, and then step back and let the customers choose," Garzik said, concluding:

"Fortune 100 customers shouldn't have to worry about all the minute details of bitcoin forking. They should have a menu of informed options, and choose from there."

Benson Samuel from Coinsecure Speaks about the Bitcoin Landscape in India

India’s Bitcoin Industry is growing at a full pace. As the second most populated country in the world, India is now one of the biggest cryptocurrency consumer industries around the globe. The country financial landscape is teeming with business opportunities and many entrepreneurs are becoming aware of the incredible potential this new technology has to offer.

With the rising interest in the bitcoin technology, along came a big wave of funding and investment made into the crypto Industry. A lot of startups have been opening its doors and up until now the government and the country banks have had a friendly approach to this recent phenomenon.

Companies like Coinsecure, Zebpay, Unocoin and many others have been trying to raise bitcoin awareness; by focusing on bringing this new technology to schools, colleges and other industries, these companies are aiming to educate and inform people about digital currency across the country.

These bitcoin industry actors are connecting the country to this new technology, and finding new solutions to enable the common masses to come on-board Bitcoin and on spreading further awareness and to reduce barriers that are an impediment forBitcoin’s progress in India.

In order to learn more about how digital currency is conquering the financial landscape in India and to know some more on the country’s current crypto panorama, NewsBTC had a chat with Benson Samuel, founder and CTO of Coinsecure, one of the oldest and most prominent bitcoin companies in India.

 NewsBTC – Coinsecure works pretty much like Coinbase, and is one of the leading exchanges in India. What can you tell us about Coinsecure?

Benson – Coinsecure is an algorithmic trading platform, and a Bitcoin Wallet. We have spent a lot of time and emphasis on functionality, ease of use and security for all our users. We are a fast growing service and have been watching and working on India’s growing Bitcoin demands.

 What can you tell us about the options Coinsecure provides?

We provide the most fluid and transparent Bitcoin Exchange in India. We are a peer to peer exchange, so our users discover their favored prices and execute their trades. Our Onchain wallet, is a hybrid system that uses accounts and addresses to help manage and store users Bitcoins for easy spending. We also have a comprehensive API, that literally allows others to build their own trading platforms, apart from several other features. We have 2 applications scheduled to launch for the Android Platform over the next few weeks which will enable users to access our wallet and exchange services from a native application rather than the web.

What can you tell us about the cryptocurrency ecosystem in the country?

The Ecosystem is in a quickened build up phase at the moment, Lots of recent positive events, such as the RBI positive note about Blockchain usage as well as the Zebpay funding, show that India is very involved with Bitcoin.

India is one of the countries where bitcoin is growing at a fast pace. What can you tell us about adoption in India?

It has been a bit slower than other countries though, but we are hoping to see adoption increase as merchants get onboard the system and start witnessing the power of Bitcoin. The numbers below should definitely give you a picture of the growth speed and prospect of Bitcoin in India:

January 2015 -> 4779600000, February 2015 -> 5775800000, march 2015 -> 1558200000, April 2015 -> 2571200000, may 2015 -> 10450200000, June 2015 -> 9484200000, July 2015 -> 8998400000, august 2015 -> 13551200000, September 2015 -> 32437800000, October 2015 -> 95154200000, November 2015 -> 153623400000, December 2015 -> 267698600000

With all this industry activity what has been the government reaction?

The government issued a cautionary note in 2013, post which, there has been little or no word from them in an official capacity. As advised by Nishith Desai Associates, most Bitcoin companies in India do follow strict KYC norms and ensure sufficient self-regulation to ensure growth and scalability.

A lot of digital currency-related business have been popping up in the country. What have been the major issues new companies have been facing regarding regulation?

Regulations have been better defined and allocated in recent times, We have noticed several new licenses coming in to enable payment banks, apart from others. These allow for a better entry into the Indian Payment Industry. The cost prohibitive nature of these licenses is a bit of a showstopper for a lot of the players who wish to get into the field.

Do you see a bright future for the digital currency in India? Will it have a great social impact?

Absolutely! Even the RBI Governer had mentioned the benefits of Digital currencies and the importance of the role that they will occupy in India. Most importantly, the large population of India and the need for redistributing currencies can be streamlined a lot more when digital currencies start to become the norm.

We would like to hear your view on the future of digital currency and the blockchain technology.

The future does lie in mass adoption and usage of digital currencies. There is still a long way to go before confidence can be invested by users. Blockchain technology is on the rise, either a fancy or a simple implementation, some of the largest names are looking into the integration of private Blockchains to simplify, and enable better transparency within their entities.

Volatility of Bitcoin Price Consistently Declined Since 2010

Since its birth in 2008, financial experts and institutional investors have criticized the viability of Bitcoin as an independent currency, due to its highly unstable volatility rate.

According to data provided by the Bitcoin Volatility Index, however, the volatility of bitcoin price against major currencies such as US Dollars have declined significantly since 2010. More importantly, the rate of volatility has decreased at a consistent pace, dropping at an average rate of 25% per year.

At the beginning of 2011, the standard deviation of daily returns (volatility rate) recorded around 8.5%. Towards the end of the year, the volatility rate of bitcoin measured by the standard deviation of daily returns in trading recorded 5.36%.

At the end of 2012, the volatility rate of bitcoin recorded a significantly lower 1.57%, showing a staggering 71% decline in volatility since the past year.

As the volatility continued its declining trend, Bitcoin surpassed the growth rate of both emerging market and dominant major currencies including Indonesian Rupiah, Malaysian Ringgit, US Dollars and Pound Sterling.

2010: US$0.07 to $0.29 (314% increase)2011: US$0.29 to US$6.18 (2031% increase)2012: US$6.18 to US$13.41 (117% increase)2013: US$13.41 to US$817 (2882% increase)2015: US$314 to US$431 (37% increase)

Bitcoin has consistently outperformed all of the world’s reserve currencies while maintaining a declining volatility trend over the past five years.

According to San Francisco-based digital currencies focused investment firm Pantera Capital, one-year volatility reached its all-time low in 2015, reaching around 52% in July and dropping to below 50% in November and December.

Furthermore, unstable reserve currencies such as the Russian Ruble had a higher volatility rate as of July 2015, with over 50% 30-day annualized volatility.

Based on the chart provided by Pantera Capital, Bitcoin has consistently maintained a low volatility rate since January of 2015, outperforming precious metals, assets, and currencies including crude oil and gold,

While gold has decreased by around 11% amid the federal reserve’s announcement of new interest rates implementation, the price of bitcoin has increased to around US$430.

“We think we are in a structural bear market, not only in gold, but across the commodity complex, as the individual commodity stories are reinforcing to one another, creating a negative feedback loop,” saidJeffrey Currie, global head of Commodities Research in the Goldman Sachs Global Investment Research (GIR) Division.

Currie further stated in an interview that gold, as a store of value has become less significant over the past few years. He explained that the number of individuals and businesses using gold as assets or trades have substantially decreased.

“With the more positive outlook on the dollar, and with debasement risk starting to fade, the demand to use gold as a diversifying asset against the U.S. dollar becomes less and less important.”

Although investors and traders have always criticized bitcoin for being too volatile as an asset or as an independent digital currency, the volatility rate of bitcoin has declined at a rapid pace since 2011. Because of the stability of bitcoin price in the past year, an increasing number of traders and investors in the public markets are purchasing Bitcoin ETFs – like Bitcoin Investment Trust – as a major part of their investment portfolio.

How A Cryptocurrency Is Created

Cryptocurrency is a buzz word for many. Most people who are already part of the bitcoin or any altcoin community have a fundamental knowledge about these digital currencies (if not in-depth technical knowledge and know-how to create or manage on their own). However, this article is apt for those who are either new to cryptocurrencies or still seeking more information about it.

Cryptocurrency — Well the name says it all! These are digital tokens built over cryptographic functions. In other words, cryptocurrencies are sequence of encrypted bits transmitted and stored over a network. Just like the way we have multiple fiat currencies in the real world (eg. USD, GBP, EUR, INR, RMB etc), there are multiple cryptocurrencies as well. These digital currencies are developed using different cryptographic functions and have different values based on its creation date, number of users, extent of the network and transaction volumes. Bitcoin is the USD of cryptocurrencies, it is the gold standard or more like the reserve currency in crypto-world. There are many other cryptocurrencies like dogecoin, litecoin etc which are valued in relation to bitcoin.

Creating a Cryptocurrency 

Creating a cryptocurrency is not a hard task for those who have an understanding of coding. They can easily build it upon existing codes, as most of theplatforms are open source and the source code is readily available for download and modification on code sharing platforms like GitHub. Developers can choose the algorithm they wish to develop upon and make use of respective source code to create a fork and develop their own altcoin. SHA-256, CryptoNightand CryptoNote are some of the algorithms used for the development. Those who are not so familiar with coding and still want to have their owncryptocurrency can always make use of services to create, host and maintain it for a fee.

Some of the cryptocurrency generating services includes Cryptolife and Wallet Builders for example. With majority of altcoins (a reference for cryptocurrency other than Bitcoin) being decentralized, it is very important to have a good network of users contributing the processing power and conducting transactions of the new altcoin.

However, the hardest part of creating a cryptocurrency is to gain adoption. Without adoption, or a network affect any cryptocurrency is worthless. Most of the altcoins are built around an idea, toencourage something, or solve some real world problems or problems associated with othercryptocurrencies itself. But without people using it, it is never going to work out. This means, a lot of time, effort and even resources have to be dedicated towards gaining traction and adoption.

Once the altcoin gains enough traction and people start making transactions with the new cryptocurrency, it can be listed on various exchanges. These cryptocurrency exchanges will allow users to sell and buy the new altcoin against a trading pair(s). These trading pairs are other cryptocurrencies or fiat currencies which others can spend to obtain the new altcoin from these exchanges.

Once all the required parameters are met, and the altcoin can be used for the purpose it was intended for.