Tag: cryptocurrency

Cryptocurrency experts on Dimon’s critiques of bitcoin

| October 21, 2017 | 0 Comments
Jamie DimonChip Somodevilla / Getty Images
  • Jamie Dimon has been a vocal critic of bitcoin since its earliest days, but his most recent comments have ignited a conversation about digital currencies on Wall Street.
  • Two of the bankers’ main arguments against the cryptocurrency are that it is in a bubble, and it will ultimately be “crushed” by governments. 
  • We spoke with experts in the cryptocurrency space to examine those two critiques.
  • They said bitcoin’s underpinning blockchain technology can’t be easily jeopardized by governments and future use-cases justify its current value.

JPMorgan CEO Jamie Dimon sparked a conversation about bitcoin among top Wall Streeters.

Since he called the digital currency “a fraud” in September, a slew of top Wall Streeters from BlackRock’s Larry Fink to Morgan Stanley’s James Gorman, have weighed in on bitcoin, which is up more than 400% year-to-date.

Dimon said during JPMorgan’s earnings call Thursday he would stop talking about bitcoin. His vow of silence, however, ended prematurely. The very next day Dimon bashed bitcoin at a conference in Washington, D.C. He concluded his remarks by saying he was done talking about bitcoin.

Whether Dimon can keep his word remains to be seen, but what is certain is that his critiques of bitcoin and cryptocurrencies will continue to drive conversation in both crypto- and Wall Street-circles.

‘Worse than tulip bulbs’

BubbleScores of Wall Streeters have said bitcoin and the cryptocurrency market is in a bubble.Reuters/Mike BlakeWall Street is full of folks who think the over $160 billion cryptocurrency market is in a bubble. Dimon said it is “worse than the tulip bulbs,” alluding to the speculative bubble of newly arrived tulips in 17th century Europe.

In fact, the notion that some folks are just betting on the price of bitcoin and other cryptocurrencies is not even contested among bitcoin’s most fundamental followers.

Crypto-evangelists, however, would argue that such investors are in the minority, whereas the majority of cryptocurrency investors are betting on the underpinning technology of their coins and tokens, rather than just looking for a quick profit.

“There is certainly some speculation,” Ryan Taylor, a former McKinsey analyst and CEO of Dash, a top cryptocurrency. “But it’s being driven by the belief that future use-cases will come to fruition.”

Crypto-skeptics often rebuke the argument for future use-cases, which range from toll systems to peer-to-peer energy exchange networks, by saying they are too far off to warrant current valuations.

“The real world benefits are said to take years to materialize, even among evangelists,” wrote UBS, the Switzerland-based bank in a recent note. The bank says at the end of the day people are just looking to sell at a higher price.

Bitcoin enthusiasts respond by pointing to the utility of cryptocurrency’s network, which sees more than 200,000 transactions per day, as evidence of its inherent value. Here’s Stan Miroshnik, CEO and managing director, Element Group:

“The bitcoin economy is supported by all the goods and services you can buy with bitcoin, as well as the infrastructure investments made by thousands of people to support the distributed bitcoin network. All of this has fundamental value. I can pay in bitcoin faster, cheaper and more secure than with PayPal, this is a fundamental value.

PayPal did not respond for comment at the time of publication.

According to PayPal’s website, a bank transfer made through their platform takes approximately one business day. A bitcoin transaction typically takes under 30 minutes, although that number frequently fluctuates.

‘Governments are going to crush it one day’

Dimon doubled down on his position that governments would be a main impediment to the future growth of bitcoin and the overall cryptocurrency market on Friday, saying sovereigns will ultimately crush it once it becomes too big of a threat to their authority. Here’s Dimon (emphasis added):

The other thing I’ve always [said] about bitcoin, governments — and this is not a technological statement — governments are going to crush it one day. Governments like to know where the money is, who has it and what you’re doing with it, in case you haven’t noticed. Right?

China’s recent interventions into both currency- and crypto-markets best illustrates Dimon’s point. The country’s regulators in September deemed initial coin offerings, a red-hot cryptocurrency-based fundraising method, illegal. And currently there is a wide-spread crackdown on bitcoin trading underway in the country. China notably has also implemented restrictions on cross-border payments between its yuan and foreign currencies to keep renminbi from exiting the country.

China is an extreme case, but numerous countries, from the US to South Korea, have ramped up efforts to impose restrictions on the wild west of cryptocurrencies. This isn’t worrying most cryptocurrency enthusiasts.

Capture.PNGBitcoin is up more than 400% this year.Markets InsiderSamson Mow, the CSO of Blockstream, a bitcoin software company based in San Francisco, told Business Insider that governments may dislike crypto, but the degree to which they can impact the digital currency is limited.

“Cryptocurrencies by design cannot be “closed down” because first, they are decentralized, and second, they’re just information,” Mow said. “To even try to close them down, you’d have to shut down the internet, and even then it would only be a minor hindrance.”

The bitcoin markets seem to agree with Mow. Since China banned ICOs, for instance, bitcoin has rallied more than $1,000.

Josh Olszwicz, a bitcoin trader, told Business Insider the markets have ignored the news out of China because it is not something that impacts its underlying blockchain technology.

“If it doesn’t affect the protocol, then it’s not a real problem,” he told Business Insider.”The bitcoin cash shakeup was much more worrisome from my perspective, but even then the core bitcoin protocol remained unaffected.”

If a country were to completely ban bitcoin, the network would still be there for people to use. And it wouldn’t be too difficult for people to get away with using bitcoin or other cryptocurrencies, because the network is anonymous and transactions and trades are hard to trace.

Get the latest Bitcoin price here.

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This AI Blockchain Could Be The Most Disruptive Tech of the Year

| October 8, 2017 | 0 Comments

AI ICO

The idea of an Initial Coin Offering has entered the public parlance as part of the rise of cryptocurrency. Now, an ambitious artificial intelligence startup is using the funding strategy as a means of gathering the cash needed to jumpstart the development of a project: SingularityNET.

SingularityNET aims to prevent control of advanced AI from being entirely in the hands of Silicon Valley. Instead, it will use AI blockchain technology to distribute access to a wide range of AI algorithms, even enabling them to learn how to work in unison.

The 5 Weirdest AI Applications [INFOGRAPHICS]
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Companies and individual developers will be able to host their algorithms on the network, and anyone will be able to use SingularityNET-specific currency to utilize them, thanks to smart contracts.

COMPUTER BRAIN

At first, it’s expected that SingularityNET will be home to relatively simple AI algorithms, like computer vision technologies and translation services. However, there are hopes that this type of platform could allow these functionalities to become intertwined.

For example, if a user wanted to translate a document that includes images, SingularityNET could allow for the translation algorithm to request the services of the computer vision algorithm, to analyze what’s in the picture and supply a caption — with no need for human input.

“We want create a system that learns on its own how to cobble together modules to carry out different functions,” said project lead Ben Goertzel in an interview with Wired. “You’ll see a sort of federation of AIs emerge from the spontaneous interaction among the nodes, without human guidance.”

However, these are plans for the long-term, as Goertzel doesn’t expect the system to reach that kind of sophistication for some time. The project is set to launch in 2018, but the ICO will get underway in November 2017.

Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.

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This AI Blockchain Could Be The Most Disruptive Tech of the Year