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You won’t guess which cryptocurrency performed best last month

We saw a massive rise in several cryptocurrencies last year, especially in December; then, those currencies suffered an equally massive decline in the beginning of this year. But whereas Bitcoin fell from $17,135.84 (reported on Jan 6, 2018) to $10,908.67 (March 1, 2018), Ripple fell from $2.93 (reported on Jan 5, 2018) to $0.9360 (March 1, 2018), and Ethereum fell from $1,448.18 (reported on Jan 13, 2018) to $861.98 (March 1, 2018), the value of Litecoin remained almost constant, with only a few ups and downs. The current value of Litecoin is $211.28, making it the best performing artificial currency in February.

Why did Litecoin’s value grow in February?

Before understanding why this artificial coin increased in value last month, let’s go through its history. Litecoin, which was launched on GitHub through an open-source client, was founded by Charlie Lee. In November 2013, this cryptocurrency reached a market cap of $1 billion. It became one of the first to adopt Segregated Witness last year in May. The first Lightning Network transaction was done in the same month through Litecoin and 0.00000001 LTC were transferred from Zürich to San Francisco within a second.

Then, in February 2018, Alza, an EU-based online retailer, announced that it is accepting Litecoin as a payment method. In addition to this, Alza declared that users can exchange the currency in automated branches in Bratislava and Prague as well. The general market of cryptocurrency saw a drop of 8.5% in February on month-over-month basis, but Litecoin saw monthly gains.

According to a report by Coindesk, the monthly gains in the value of Litecoin could be due to Lee’s belief that LTC could supersede bitcoin cash in market cap in 2018. Also, the artificial coin was in the spotlight due of the release of Litepay. LTC hiked 30% against the US dollar, outperforming all large cryptocurrency assets last month. Further, the Microsoft has acknowledged the Litecoin platform – along with Ethereum and Bitcoin – as a potential foundation for its decentralised identity system.

LitePay has potential, could be a game changer for Litecoin

“LitePay will be a game changer,” said Palwasha Saaim, a Research Analyst at Lombardi Financial. He added that users of LTC will be able to convert dollars to Litecoins and vice versa through the LitePay cards that are not only Visa compatible but can be used at all ATMs as well.

Another reason behind the hike in the value of LTC was the forking of the Litecoin blockchain into LCC (Litecoin Cash). According to Business Insider’s report, the owners of Litecoin would get 10 Litecoin Cash coins for each LTC unit they have when the forktakes place. The fork was profitable for Litecoin, as its value hiked and investors secured their share on the artificial currency in order to have more litecoin currency when the fork took place.

All in all, LTC performed really well in February, but it is still a long distance away from its all-time high of $365 (which it reached at the end of last year).

Of course, the market of cryptocurrency is very volatile, and the future is completely unpredictable.

Why Do You Need To Be Careful With Cryptocurrency?

Fascination with cryptocurrency has become the new norm. Cryptocurrencies are trendy with online users who consider it a way to access money from outside the usual financial systems of the non-digital world. Cryptocurrency is particularly popular with people who want to challenge the establishment by utilizing this decentralized ledger without influence by third parties.

Beginning with Bitcoin in 2009, Cryptocurrency has become a way for people to create financial systems parallel to the traditional one, which is extremely regulated and standardized. From the start, a major goal for Bitcoin and Cryptocurrency as a whole was to build a decentralized system among all its participants so that citizens are free to trade with each other without any intermediaries. Major Cryptocurrencies like Bitcoin do not depend on any government and they also do not add any exchange fees, money changing fees or other transaction fees.

“Well, this all sounds great!” you might be thinking to yourself. However, your excitement might be short-lived if you are not careful with how you invest in Cryptocurrency. In this blog post, we will look at how Cryptocurrency works, what the major advantages are, and why you should be careful with it.

How does it work? What are the main advantages?

One main difference between Cryptocurrency and other currencies like US Dollars, Pound Sterling or Euros is that users, not governments, have made it. Unlike traditional currencies, Cryptocurrency cannot be subject to traditional inflation, as it is based on a collaborative creation model.  (Though its value can be subject to wild fluctuation based on speculation and unregulated markets). The production of cryptocurrencies is limited by values that are previously defined in the public domain. Advocates of Cryptocurrency argue that the security these currencies provide is based entirely on computer protocols, protecting users from piracy, possible theft and/or other frauds.

But. . .

All these advantages of Cryptocurrency sound great. Right?

Not necessarily. A few major issues with Cryptocurrency suggest that you should be very careful when dealing with these digital currencies. While Cryptocurrency is designed to build a secure, collaborative system, there have been cases of theft and piracy. Cybercriminals use  cryptocurrencies’ feature of making near-anonymous payments to perform untraceable transactions, asking for ransom or paying for illegal activities.

Verdict

The Cryptocurrency market is evolving and improving rapidly. It is crucial to be aware of the issues and participate sensibly and carefully. 

The continuous rise of BITCOIN

There were several digital cash technologies before the release of Bitcoin, like Stefan Brands and David Chaum’s ecash protocols, and hashcash of Adam Back. The domain name bitcoin.org was registered on 18th August 2008, and the network came into existence in January 2009 with the issuance of the first bitcoins and the launch of the first open source Bitcoin client. Satoshi Nakamoto (whose real identity is unknown to this day, though the subject of much speculation,) mined the first block of bitcoins, dubbed the “genesis block,” which had a reward of 50 bitcoins.

Bitcoin from $0.01 to $10576.34

In 2010, the initial price of Bitcoin was less than 1 cent. Nakamoto had mined almost 1 million bitcoins early on and handed over leadership to Gavin Andresen before disappearing. Andresen, who became the lead developer, is possibly the official public face of Bitcoin community. The technology behind this cryptocurrency was the blockchain, which is a largely anonymous, publicly visible, online ledger that records all BTC (Bitcoin) transactions. Blockchain works just like online transfers; it performs all the tracking functions, (checking whether the person has funds, then adding or subtracting bitcoins) but does so without a bank or any central authority.

The first Bitcoin transaction was negotiated on a forum and involved the payment of 10 thousand bitcoins to buy two pizzas that were delivered by Papa John’s.

Wikileaks and other organizations started to accept donations in bitcoin in 2011. The recognition of Bitcoin as a cryptocurrency expanded in 2011, when WeUseCoins published a video which had over 6.4 million views, and when Bitcoin Magazine was co-founded by Vitalik Buterin.

Coinbase sold US$1 million worth of bitcoins at over $22 per bitcoin in a single month in February 2013. Later the same year, the Internet Archive declared that it was accepting donations as BTC as well as giving employees the option to get portions of their salaries in BTC. After 2013, Bitcoin kept on rising. Popular companies like Microsoft started accepting Bitcoin to purchase Windows software and Xbox games.

Reason behind the exponential growth of BTC

It was estimated that over 160,000 merchants started accepting Bitcoin payments as of August 2015. Bitcoin did not have serious competition because it was by then time-tested, the best-known cryptocurrency and a valuable artificial currency. People viewed Bitcoin as the best vehicle for betting on the growth of cryptocurrency.  Japan, in 2016, recognized cryptocurrencies like BTC as having a similar function as real money. In addition to this, South African online marketplace Bidorbuy enabled the use of Bitcoin.

The new expectations and the new investors continued to drive up the price of Bitcoin. This has led to some naysayers.  According to Jamie Dimon of JPMorgan Chase & Co., Bitcoin, which saw an 11-fold increase last year, is a fraud.

Bitcoin’s success has drawn millions of dollars from hedge funds. Though it has dropped in recent months, not long ago the value of Bitcoin was $16000, making its market worth–$271 billion– more than that of Home Depot.

The future is never certain, especially with a new technology and a volatile market.  But Bitcoin is certainly worthy of public attention and study.

UK Small Business Owners Think Cryptocurrency Will Go Mainstream By 2020

A recent national study by PaymentSense revealed that UK Small and Medium Enterprise (SME) owners anticipate cryptocurrency going mainstream within the next two years. 

National survey of SMEs

A survey of 504 business owners was conducted by the card machine provider PaymentSense in January. Over 35% of them believed that payments using cryptocurrency would be normalized within two years. Over 21% were even more confident, believing that acceptance of cryptocurrency payments would happen within a year.

Others were more hesitant, with 25% believing that cryptocurrency payments would never become mainstream. Only one out of every 10 SMEs currently accept cryptocurrency payments. Those who do say it is a plus to have immediate settlements without a need for fees and centralized third parties.

Obstacles to mainstream adoption

Some obstacles remain before the use of cryptocurrency for payments becomes widespread. The main one is the volatility of prices. Small business owners, especially those operating in more traditional industries, rely on stability and certainty when it comes to methods of payment.

The volatility of prices does not seem to have discouraged SME owners from wanting to invest in cryptocurrencies. Almost 59% said they would consider investing and about 18% are already investing.

Positive developments

The speed at which transactions are settled can help to overcome concerns about high volatility. Bitcoin is developing a Lighting Network which will open up improved payment channels.  Segregated witness (SegWit) is being adopted gradually and will help with the problem of scaling. It allows the Lighting Network to run on top of the base blockchain layer so that unlimited numbers of immediate, low-fee transactions can occur. 

Positive developments are taking place in several countries, which indicate that cryptocurrencies are moving towards mainstream status. In Japan, for instance, the huge electronics retailer, Yamada Denki, is accepting Bitcoin on a trial basis at two of its Tokyo outlets. It plans to implement a nationwide rollout.    

Bitpay launched a wallet app last year that integrates with a prepaid Visa debit card. Litepay, a San Francisco based startup, allows retailers to accept Litecoin, which is settled in fiat.  Since November last year, Pundi X, POS (point-of-sale) solutions provider for South East Asian retailers, has been able to connect to the NEM (XEM) and Ethereum (ETH) blockchains. 

Most SMEs play a waiting game

There is no doubt that adoption of cryptocurrency as a payment method is becoming more popular. However, many small to medium business owners are still wary of accepting cryptocurrency payments. At present, many of them are uncertain of how to integrate them within their existing financial arrangements and whether they will be accepted by staff, suppliers and government agencies.

They also lack confidence in the safety and security of such payments. Working together with trusted merchant service providers or payment processors may help to address these concerns, allowing for improved security processes and the quick exchange of currency.

Entrepreneurs in emerging sectors may consider that using cryptocurrencies for payments is worth the risk. Others in more traditional, established areas will probably be playing the waiting game to see what developments take place during the next year or so.

How Might Regulators Handle ICOs?

Recently, Facebook announced its new policy concerning cryptocurrency and Initial Coin Offerings (ICOs):  It would ban all advertising relating to them, whether it was misleading or not.  This extremely broad policy undoubtedly made many crypto entrepreneurs undoubtedly that other social media platforms would follow suit.

It might seem like the days of the gold rush, as some crypto entrepreneurs seek to draw attention to their offerings. What they may not have realized is that they probably have more to worry about from regulators than social media platforms banning their ads.

Regulators are stepping into the fray

France’s stock market regulator issued a statement that it was likely to start curbing advertising on financial products related to cryptocurrencies, considering them to be derivatives. This is not surprising, as some ICOs are tapping into that desire for quick money and bypassing the strict regulatory requirements associated with stock offerings. Suspect advertisements in the ICO arena are not hard to find, and regulators are concerned that uninformed ICO participants are being duped. 

In the US, the Securities and Exchange Commission (SEC) is starting to react.  On January 24th, SEC Chairman Jay Clayton and CFTC Chairman J. Christopher Giancarlo published an opinion editorial in the Wall Street Journal entitled “Regulators Are Looking at Cryptocurrency. At the SEC and CFTC, we take our responsibility seriously.” In that opinion piece, they stated that their “task as market regulators is to set and enforce rules that foster innovation while promoting market integrity and confidence.”

They warned lawyers, trading venues and financial services firms that they were “disturbed by many examples of form being elevated over substance, with form based arguments depriving investors of mandatory protections.” By using language to keep certain ICOs out of the SEC’s jurisdiction, investors are currently without any protections.  They are living in the world of caveat emptor, or let the buyer beware.

Smart and prudent lawyers are advising clients to focus on offerings that are compliant with securities guidelines.  Others are designing a variety of approaches designed to keep US investors out of their ICOs unless they are accredited investors.  Yet others are designing ICOs so as to make them not fall within the jurisdiction of the SEC.  For these reasons, the role of advertising linked to ICOs becomes that much more important.

Guidelines for advertising need clarification

Formal guidelines for advertising and marketing in this field have yet to be clarified. Some advertising is blatantly misleading. Last year, one crypto ad on Facebook used an image of a former New Zealand prime minister with a fake quote claiming that he invested in Bitcoin. However, most ICO advertising is not so easily identified as deceptive.

Then there are those crypto entrepreneurs who are concerned with self-regulating. They do not advertise low risks, large returns, etc. They avoid expressions that may be misleading. They realize that the innovative technology behind cryptocurrency does not mean that they are exempt from regulations that are designed to protect investors and regulate the market. 

Social media platforms react

Other social media platforms, like Twitter, have not yet followed in Facebook’s footsteps. Some crypto entrepreneurs say that the Facebook ban did little to affect them. They are riding the tide, and not much can hold them back.

Facebook has said it will revisit its policy as the situation improves. It apparently made its policy quite broad in an attempt to make it difficult for scammers to profit from being on the platform. It is encouraging people to report ads that violate its policy.

Russia’s equivalent to Facebook, VKontakte, banned crypto ads and then unbanned them. They still, however, reject ads that promote unsupported guarantees. Google has existing policies that apply to misleading advertising and says that these policies apply to cryptocurrency, too.

The future

The entire ICO market is still in the experimental stage, but one thing is for certain: advertisers and those profiting from advertisements need to exercise caution, as do the lawyers, trading venues and financial services firms linked to ICOs. As our experience with ICOs grows and regulation increases, many believe that the opportunity for crypto entrepreneurs will actually grow substantially because the uncertainty currently affecting ICOs will disappear.

Five Ways Cryptocurrencies Can Make the World A Better Place

Cryptocurrency is revolutionizing the way we think about money. It changes the way we store our money, do business and pay for services and products. As with all new technology, it has its supporters and detractors.

Some investors refuse to accept cryptocurrency because they feel it encourages speculative investment and they believe that the current bubble will burst. Others believe cryptocurrencies are here to stay and will change the world as we know it.

Cryptocurrency is a transfer of value that is stored digitally. Its movement is tracked using blockchain technology that stores transactions in chronological order and in a way that data can be seen but not changed. Bitcoin might be the most high profile name, but there are thousands of other cryptocurrencies gaining popularity. Here are some ways in which they can make the world a better place.

1. Revolutionizes money transfer

Cryptocurrency transfer does not require the same processes used by banks. Transfers do not require any fees and are tracked and stored securely by blockchain technology. Some bank transfers, by contrast, can take a week or longer to clear, especially when an international transfer is made.

2. Allows people control over their own money

Cryptocurrency takes the control of money from banks and puts it into the hands of people. High-interest rates and other fees charged by banks make people want to keep cash at home rather than using banks. Cryptocurrency could offer an alternative option, allowing individuals more control over their finances.   

3. Provides a stable solution in times of uncertainty

Economic crises in some countries cause concern about funds saved in banks. In countries where standard currencies are subject to extreme instability and inflation, switching to cryptocurrency could prove beneficial and provide more certainty and stability. 

4. Provides new ways to crowdfund

Crowdfunding is becoming a popular way for entrepreneurs to raise money. Their risk is mitigated by many people making small contributions.

ICOs (initial coin offerings) and other types of token sales are used as a source of capital for the startup of ventures centered on cryptocurrency. This gives entrepreneurs access to a wide pool of potential funders.

5. Promotes scientific advancements

Blockchain technology means that information and data can be stored and shared in a secure way. This can eliminate barriers to the sharing of knowledge and spread access to important data and information.