Tag Archives: bitcoin

bitcoin

The debt problem of the western world was never solved

The debt and obligations of the western world are now higher than ever and still increasing. Declining demographics and long term economic time cycles pointing down into 2022 / 2023 time frame indicating that the next few years might be the time of reckoning.

A work by the graffiti artist Banksy, in London
A work by the graffiti artist Banksy, in London

 

But what does bitcoin and crypto currencies in general have to do with it?

Our forecasting research of social trends indicates that the western world and specially Europe will introduce even more regulations related to cash, deposits, transfer of money, limits on withdrawals, etc. It is very easy for them to include Crypto Currencies by saying the same regulation apply.

We have reasons to believe that Crypto Currencies like Bitcoin will not be spared. Governments have collective decision making and they are slow learners, so things takes time. However, they do learn in the end and compliant exchanges in these regions with their clients deposits are “sitting ducks” for increasingly assertive and desperate western governments trying to put their hands on any cash they can, scrambling for dollars to pay for their ballooning debt and obligations that are at unmanagable levels.

In other words, more assertive western governments introducing draconian restrictions might be the biggest risk of all for Crypto Currency Exchanges and their clients over the coming years.

This can not happen in a “civilized” country, right?  Well, with fiat currencies this occurred in the seventies in the U.K., and is happening today in Argentina and Cyprus, just to mention a few well known countries as examples.

Geir Solem
Cryptor Trust Inc.

Bitcoin exchanges most overlooked risk

The use of bitcoin and exchanges (fiat to btc/altcoin) has awaken the controversy around topics like hacking, fraud, technical breakdown, to mention some. The events have proven that these areas must be taken care of in detail.

It has become a kind of luxury to discuss which exchanges provide the best service,  are the most user friendly, speedy and competitive on their fees.

BUT, one of the highest risk factors is often forgotten. The external risk attached to  the authorities that define the rules of the game also known as  “compliance”.

Source: Bex.io Blog
Source: Bex.io Blog

Record-breaking fines issued by regulators worldwide, notably in the US and UK, dominated the financial services landscape the last few years, with many Bitcoin exchanges closing for trade owing to non-compliance with regulatory requirements or exorbitant licencing related fees, making inviable to hold the exchange day to day operations. In other words many of these businesses were destroyed, with job positions and money lost.

As a consequence, the shutdown of these exchanges created a lot of stress on customers. This included businesses scrambling for alternatives in order to safeguard their continuing operation, often in need of taking their funds out in cash over a short time period. Then, when trying to deposit the funds cash to another bank, a new problem occurs: Cash Deposits. Large cash transactions are in practise now criminalized at least in the western world. You could easily end up with a lot of cash at home or in your office.

Crypto currency exchanges shouldn’t overlook at this issue, as in some regions complying with the rules and regulations could become a never ending wheel. If the exchange is based in Europe or the US, Canada, or Australia, they could be surprised after they have adopted and complied the best they can.

Bitcoin exchanges use banks, which carry very much of the same risks as the risk related to the authorities.

Our research has identified 10 major well known banks in Europe and the US that we think will fail over the next few years. The users, and that includes the exchanges using these banks are of course at high risk as well.  The debt problem of the western world was never solved.

Where to choose and/or base a bitcoin exchange?

We think some select countries in Asia and Latin America are the best due to the rising social mood trending in these regions over the coming decade. It is hard to believe, but regulations might even be relaxed in these regions the coming years, giving exchanges a brighter future.

Geir Solem
Cryptor Trust Inc.

The Bitcoin Miners – Bankers of the Bitcoin System

Miners are the Bankers of Bitcoin and make the system work. However, unlike Federal Reserve which is a centralized system, the mining system of Bitcoin is a decentrelized system.

Source World Bitcoin Network

The job of the miners are to create new bitcoins which are rewarded to them when they maintain the Bitcoin Blockchain by adding transactions. But for now, every day that goes by it becomes harder to solve the equation, so you need more and more computing power!

The Bitcoin Network system might be the worlds largest computer network systems.

Understanding why Satoshi needed mining is fundamental to understanding decentralization and bitcoin. The mining of Bitcoin’s is limited to 21 million Bitcoins as scarcity is key with any Monetary system.

Geir Solem
Cryptor Trust Inc.

Bitcoin is challenging the world’s leading payment systems

Bitcoin’s staggering rise is becoming a threat  to the worlds leading payment system providers.

ChartOfTheDay_1681_Daily_transaction_volume_of_payment_networks_n

The rise of Bitcoin. Data as of 4th quarter 2013. Click on the image for larger picture. Source The Statistics Portal.

Bitcoin surpassed Western Union in transaction volume in 2013, and is likely to overtake Paypal in 2014.

Geir Solem
Cryptor Trust Inc.

The Bitcoin Revolution – Future implications around the world

This is the eight video in our series called “Bitcoin as a Disruptor”.  What are the future implications of Bitcoin around the World? What should we think about Bitcoin with terms of Neutrality? Will Bitcoin become widely accepted around the World?

Presentation by Andreas Antonopoulos, The Bitcoin Foundation. Source Cryptorcurrencies

Andreas discusses the philosophy and the principle of Bitcoin Neutrality, as well as the main drivers towards mass adaption of the currency.

He also look at how banking actually works around the world, and how Bitcoin could evolve in the future to meet the needs of the unbanked.

Geir Solem
Cryptor Trust Inc.

The Revolution – The Bitcoin Protocol

This is the seventh video in this series called “Bitcoin as a Disruptor”. The Bitcoin protocol, a game changer beyond the Bitcoin currency itself, as it opens the door to innovation without permission. Decentralized consensus, were currency is only the first application…..

Presentation by Andreas Antonopoulos, The Bitcoin Foundation. Source ID GC

We continue to look at the even bigger picture, the jaw dropping changes that bitcoin could provide in what we would call a revolution.

Like the Internet itself, Bitcoin will change everything.

The concept of a decentralized network that could achieve consensus (agreement) without any central controlling authority was an unresolved problem in computer science called the Byzantine Generals’ Problem. The Bitcoin protocol solved this problem in 2008 and that in itself is truly revolutionary.

Bitcoin is the Internet of money and the Bitcoin currency is only the first application. At its core Bitcoin is a revolutionary technology that will change the world forever.

Geir Solem
Cryptor Trust Inc.

Why Bitcoin’s Growth is Normal & The S-Curves You Could Never See

Economists are up in arms, claiming that bitcoin’s 1000% annual growth is faster than anything they’ve ever seen.

Source World Bitcoin Network

Because of that, they lash out, calling bitcoin volatile, a bubble, a pyramid scheme, etc.

But don’t worry, we put on our investor glasses, compare the 4.5-year-old bitcoin to facebook, twitter, google at the same periods in their growth. The result is that Bitcoin’s growth is as exponential, as volatile and as normal as any enormous tech giant. And just for fun we threw in a little bit about rats reproducing on a desert island.

Geir Solem
Cryptor Trust Inc.