Bitcoin Miners Face Rising Difficulty

Bitcoin Miners face a huge challenge in making profits if more people get involved with mining. As difficulty increases, there is an increased likelihood for less revenue. As more mining hardware comes online, the mining difficulty will automatically adjust to ensure the time between blocks remains roughly 10 minutes apart.


See this chart here

The chart from Blockchain.info just how much difficulty has increased. Difficulty is up 4 times in one year from November 2016. When mining difficulty jumped sharply -- about 16% on Sept. 15, 2017, mining revenue declined. Mining revenue recently fell off 40% in this chart:

Bitcoin price, number of transactions also contribute to revenue to miners.

Disclosure: The author owns and mines Bitcoin.

Bitcoin Boom: Coinbase Adds 35,000 Customers Per Day

By Michael Hooper

The laws of supply and demand govern the price of things in a free market. At least in theory that is how free market economics work. Vast quantities of demand with limited supply will push up the price of anything. Well, that is what is happening with Bitcoin, which is up about 500 percent this year.

Laura Shin of Forbes recently reported that new money is coming into Bitcoin.  "Every day on Coinbase alone, about 35,000 new accounts open -- a figure that sometimes reaches 50,000 -- and thousands of people in South Korea and Japan, two countries where Bitcoin has taken off, are also bringing new fiat money into the system."

With the trend happening at Coinbase, it is likely to sign up 3.1 million new customers in 90 days (90*35,000 new accounts per day). And that doesn't count the thousands of accounts opening daily around the world.

This reminds me of when 1 million customers per month were signing up for America Online in the 1990s. After reading that fact in 1997, I bought shares of AOL, which shot up 36% in one month for me, before I sold it for a quick profit.

Today Bitcoin is all the rage. And the forces behind it are unshakable. China has cracked down on exchanges of crypto currency and introduced new laws to stop fraud in the ICO market in China. But that doesn't stop the price of Bitcoin. Fears of a proposed fork in Bitcoin over the summer caused Bitcoin's price to fall 30 percent ahead of the Bitcoin Cash split. Bitcoin's price quickly recovered and went onto to set new records.

A new fork is facing Bitcoin, I believe this is affecting the price. The Bitcoin Segwit2x fork is projected to take place on November 16th and will result in two bitcoin blockchains. Following the fork, Coinbase will continue referring to the current bitcoin blockchain as Bitcoin and the forked blockchain as Bitcoin2x, according to a letter from Coinbase to me.

Any customer with a Bitcoin balance on Coinbase at the time of the fork will be credited with an equal amount of the Bitcoin2x asset on the Bitcoin2x blockchain. No action is required—Coinbase will automatically credit your account. So, if you have 5 Bitcoin stored on Coinbase before the fork; you will have 5 Bitcoin and 5 Bitcoin2x following the event.

Coinbase said the Bitcoin Gold fork occurred on October 23rd. Information about this fork has been limited and there are concerns about its security and stability. As a result, Coinbase does not believe it is safe to allow support for Bitcoin Gold at this time. If the blockchain proves to be secure and valuable, Coinbase may choose to support it.

Meanwhile Bitcoin has fallen 7% from its high of $6145.38. I bought a little more BTC at $5600 and $5300. I think worldwide demand is going to outstrip supply and continue to drive up price. The economics are there.

Based on the current trends, I expect Bitcoin price to be extremely volatile with big run-ups of 10% to 20% but big falloffs too of 10% to 30%.

Bitcoin's price may fall off a bit ahead of the Nov. 16 fork from Bitcoin.

That's probably why we are seeing today some divergence away from Bitcoin, as other currencies like Ethereum and Litecoin are climbing.

Source: Coinmarketcap.

The 2017 momentum for cryptocurrency feels like 1998 when tech stock valuations were high but they went even higher in 1999 before crashing in 2000-01. Out of all that tech run-up of the 1990s we gained transformative technology like Google search engine and Amazon online shopping.

With Bitcoin, we will see a run-up and a crash, probably multiple times, but over the long term, BTC is here to stay. And Bitcoin will be transformative, just like the Internet was. Out of Bitcoin, we have a blockchain technology that is secure and reliable. These technologies for securing data and contracts will have far reaching effects on every person some day.

Why Bitcoin Is Better Than Gold

By Michael Hooper

For thousands of years, the world's inhabitants have had a currency for exchanging value between vendor and buyer. That currency was gold. No matter what country you were from or where you were brought up, gold was always welcome.

And in some ways, gold is still a store of value today. But gold has limitations. It is hard to exchange the value of gold into tiny fractions of an ounce. You don't buy a $2.60 candy bar with $2.60 worth of gold. It is impracticable.

Bitcoin is better than gold because one Bitcoin is broken down into 100 million parts. One Satoshi is equal to one/100 millionth of a Bitcoin. Another way to look at Bitcoin is in MiliBit = 1/1000th of a Bitcoin. So one MiliBit is equal to $5.96 with Bitcoin at $5960.

Bitcoin is a ledger of Bitcoin sales/buys since its inception. This ledger is maintained by noids or miners around the world. The code for Bitcoin was written by Satoshi Nakamoto and the first transactions of Bitcoin were in 2008. You can read Satoshi's White Paper here. He basically solved the double-spending problem for digital currency. That is why the ledger for Bitcoin is so widely trusted. You can't cheat the ledger, many hackers have tried, but failed. One rich man even paid hackers $100,000 to try and hack the system but they failed.

Like Gold, Bitcoin is outside of banking. You can trade gold or Bitcoin for goods or services without any connection to a bank or government currency.

The decentralized network of miners running the ledger of Bitcoin operate outside of government. People who mine gold get paid in gold. Same is true for Bitcoin. Bitcoin miners get paid in Bitcoin for processing transactions on the network.

The circulating supply of Bitcoin is 16.6 million, but there is a maximum supply of 21 million Bitcoin. After that no new bitcoin will be created. Miners will only be paid in transaction fees. If demand for Bitcoin remains strong, Bitcoin is likely to become more scarce after that last Bitcoin is minted. And that condition could drive Bitcoin's price even higher.

Steve Wozniak, co-founder of Apple, also believes Bitcoin is better than gold. In an interview here, he says he was drawn to Bitcoin for its mathematics, its finite number of 21 million. US government can always print more dollars and is kind of "phony" that way, Wozniak said.

With 100 million parts, Bitcoin can be purchased by anyone with a computer or smart phone with a connection to the Internet.

With Bitcoin's inflation economics (strong demand, limited supply), many people around the world see Bitcoin as a store of value, a place to hide their money. Look at Argentina, which has suffered high inflation for years, its peso has fallen dramatically against the U.S. dollar. The country worked to stop people from moving their pesos to dollars by imposing high fees on such transactions. Well there is no government connected to Bitcoin, it is run by computers. And the price of Bitcoin has a history of going up compared to the declining history of the peso. So many people, including high net worth Argentina natives like Wences Casares bought Bitcoin.

Because Bitcoin is trading 24 hours per day, seven days per week, the coin is becoming the world currency. Last April, Japan said it was OK for vendors to accept Bitcoin. Many vendors are now accepting Bitcoin.

Chinese investors like Bitcoin, but the government has been cracking down on digital currencies. But the government can't stop Bitcoin.

Bitcoin is gaining popularity all over the world. Every day on Coinbase alone, about 35,000 new accounts open -- a figure that sometimes reaches 50,000 -- and thousands of people in South Korea and Japan, two countries where Bitcoin has taken off, are also bringing new money into the system, Forbes reported.

No stock or mutual fund can provide what Bitcoin provides, and that is universal appeal, acceptability, use and store of value, in every country. At 100 million parts, you can break it down to pennies. You can send Bitcoin peer to peer so your fees on the transaction are minimal. Bitcoin started in the underground with cyber punks and geeks distrustful of government, launched during the height of the financial crisis in 2008-09. But since then, many people in Japan, Europe, South America and the United States have became attracted to the currency. As a result, institutional investors like Fidelity are looking into it. When more institutional investors get into Bitcoin, the price could go even higher. But Bitcoin has a history of huge volatility. There have been about 10 corrections of 10% or more in Bitcoin this year, but each time it declined, it always came back and went on to reach new highs. I'm holding onto my Bitcoin, and probably will be adding to my position with small purchases after 10% declines in price.

Disclosure: The author owns and mines Bitcoin.

Due Diligence: How to Evaluate an ICO Investment

The altcoin space is booming with more than 200 Initial Coin Offerings listed here. These ICOs are looking for financial support from investors. Investors face the daunting task of trying to figure out which ICOs will be winners. (If you are new to ICOs, read our Beginner’s Guide to Initial Coin Offerings.)

This article provides tips on doing due diligence to find a legitimate ICO with a solid business plan and a market that is hungry to adopt and support its coin. With any ICO, the worst case scenario is losing 100 percent of your investment. The best case scenario is that the coin doubles, triples, or even climbs 60,000 percent like Ethereum.

To Read more, click here

Three ICOs Backed By Gold, Housing & Crypto

Source Crypto20 Web Site

By Michael Hooper

Some initial coin offerings are nothing more than an idea under development. Their message is "send us money, we will build a block chain with a network of new users over the next two years." That message won't be enough to attract a thoughtful investor.

I like a business with the ability to get funded and underway and making money in a short amount of time. I want a business plan that is self-sustaining, preferably with a history of proven results. I want to see a strong market behind a coin, people who appreciate the coin's opportunities and culture and are willing to pony up their own money to be a part of it. Owners usually make better caretakers. As a value investor, I want to see a hard asset behind the coin with experienced staff who know their market.

Here are three coins with hard assets behind their coins.

Crypto20

Crypto20, based in the Cayman Islands, is a closed-cap, tokenized cryptocurrency portfolio that autonomously tracks the top 20 cryptocurrencies with weekly rebalancing to a maximum component weight of 10%.

I like index investing. The core of my stock portfolio is 33% weighting of S&P500 because it is the dominant large cap stock index, with an excellent track record beating most fund managers.

Crypto20's maxium component weight of 10%, may limit performance in the fund with Bitcoin, the most dominant crypto currency at 54.6% dominance over all other crypto currencies, up from 47% dominance a month ago.

The CRYPTO20 team has completed the development of its trading system. The ICO funds (98%) will go towards purchasing the underlying assets. A small allocation (0.5%) is made for legal fees to ensure that CRYPTO20 is compliant with regulation upon commencement of exchange trading and a complete audit of received funds by a major auditing firm. CRYPTO20 and its cryptocurrency diversification value proposition will be heavily promoted to retail investors and a 1.5% allocation is made to facilitate this. Any unused funds from the 2% operating expense allocation will be utilized in a discretionary capacity once CRYPTO20 has commenced on-going trading. - 1.5% Continued Marketing Pre-Exchange Listing - 0.5% Legal Fees and Post-ICO Audit - 98% Underlying assets.

Crypto20 plans to raise $75 million in its ICO. The pre-sale generated $7.5 million. ICO runs through November 2017. Once the ICO is completed, an audit will be conducted. Once the audit is completed and made public, the management team will begin acquisition of coins for its Crypto20 coin index. The coin will be listed on exchanges in January 2018

The 0.50% annual fee will support the administration of the business.

There is a good interview with  Daniel Schwartzkopff, founder and CEO of Crypto20 here.

Schwartzkopff said the team is eight guys, with a fairly large advisory council.

Crypto20 is offering a rebalanced fund in a single token. There are thousands of coins, investors don't know where to start and make that decision. Too much to sift through, Schwartzkopff said. This is the best of old world financial system, the index, applied to cryptocurrencies. That gives investors some confidence that risk has been minimized.

"We're hoping to bring crypto currency investing to the mainstream," Schwartzkopff said.

He said Crypto20 is based in the Caymans mainly because the location is very popular for hedge funds, there is regulation to support that, lenient on taxes, this makes it easier to offer low fees, less expenses in running the fund.

OneGram

OneGram is a crypto currency that represents one gram of gold. OneGram founders, based in Dubai, saw an opportunity to liquify gold into a digital asset (OGC). OneGram is targeting Islamic finance community, who follow Sharia law. Gold is a prized and popular possession in that market. OneGram has a business plan that makes sense, with funding for sustainability and increasing the value of each OneGram coin over time.

Each OneGram transaction generates a 1% transaction fee, up to a maximum of 1 OGC, according to its White Paper. Unlike other cryptocurrencies, in OneGram, 70% of this fee is reinvested to buy more gold and increase the amount of gold that backs each token. As transaction volume increases, more gold gets added to the vault and all OneGram owners share in the profit. So, over time, the value of each OneGram rises by design. This makes OneGram a unique asset whose value increases perpetually. 25% of this fee will be used for development & Operations. 2.5% will be donated to Charities and 2.5% will reward miners (POS staking).

OneGram sold 12,400,786 coins in its ICO. Test network for OGC transactions will take place in January. OGC wallets also will debut in January. OGC will be distributed to owners and listed on popular crypto currency exchanges in January.

ICO participants paid gold spot price plus 10% for each OneGram. The 10% premium is being used to develop the business plan. The worst downsize for investors is the loss of their 10% premium. But it is possible the OGC coin will trade above the spot price of gold. Investors will see an increase in the value of the coin as transaction fee revenue is used to buy more gold in the future.

KexCoin

KexCoin uses blockchain technology to operate a student housing investment business. KexGill Group, a UK owner of student housing in England and Germany, is partner and manager in this project. KexCoin investors will benefit from KexCoin's strategy of buying back coin from rental profits, thus increasing the value of the outstanding coin. The group estimates returns of 8%-15% in the student housing market.

Disclosure: The author does not own any of the coins featured in this article and has no plans to purchase them. He owns Bitcoin, Ethereum and Ripple.

Initial Coin Offering Evaluation of MyBit

The Quick Pitch

MyBit enables fractional ownership of infrastructure for energy and artificial intelligence. MyBit owners can buy a percentage stake in a device that generates revenue and in return receive a portion of the revenue produced by the machine. MyBit sees a big market in energy assets like solar panels. 

To read more click here

Ripple CEO Brad Garlinghouse Credits Teachers, Family & Kansas For His Success

By Michael Hooper
Photos by Heather Hooper

Three Kansans inducted into the Topeka High School Hall of Fame had much to say about the influence of teachers on their lives.
Brad Garlinghouse, Raymond L. Powers and Pam McComas were inducted into the Topeka High School Hall of Fame on Oct. 1, 2017,with official ceremony.

Topeka High School Principal Rebecca Morrisey, Brad Garlinghouse, Pam McComas, Raymond L. Powers.

Powers, a longtime manager with Hallmark, became the first African American to serve as a vice president for Hallmark. He credited a teacher at Topeka High School for inspiring him to go to college.

Brad Garlinghouse thanked several teachers for helping him along the way. Pam McComas praised multiple teachers and administrators for supporting her.

Brad Garlinghouse

Garlinghouse has led an extraordinary career in business, communications, technology, once making the front page of The Wall Street Journal for his Peanut Butter Manifesto about Yahoo spreading itself too thin.

Garlinghouse, son of Kent and Susan Garlinghouse, was a 1989 graduate of Topeka High School, the University of Kansas and Harvard University. Today he is CEO of Ripple, which is a San Francisco-based company that uses blockchain technology for sending money globally, its digital currency Ripple (XRP) is the third largest market cap digital currency behind Ethereum at No. 2 and Bitcoin No. 1. Garlinghouse’s leadership at Ripple is the perfect match of his technology, communication and management skills. His history of leadership goes back to his days at Topeka High School, where he served as editor of The World newspaper, and president of the Student Council. At KU he was elected student body president.

In his remarks during the ceremony, Garlinghouse said he has lived in California for 20 years, but he always thinks of himself as a Kansan first. Kansas is home. “Topeka High is an indelible part of who I am today,” he said.

Working in Silicon Valley, life can get crazy. Being from Kansas gives him a touchstone to the real world. Throughout his professional career he has interviewed hundreds of people. He always asks two questions. His first is “where are you from?” He is excited if they say they are from the Midwest. He finds Midwest people work hard, are humble and work well with others. 

His second question is on a scale of 1:10 how lucky are you? The reason for this question is you don’t want to work with someone who is unlucky, it says a lot about someone.  The question will illicit the person’s level of gratefulness. Danny Manning said luck is when opportunity meets skill.

“I believe I am one of the luckiest people on the planet,” Garlinghouse said. He listed a dozen people whom he was “lucky” to meet and learn from over the years. He said he was lucky to have parents like Kent and Susan Garlinghouse and their support. He said he was lucky to have his wife Kristen and their three children, and his sisters Megan and Kim who showed him how strong women can make everyone around him better.

Raymond Powers said he grew up in East Topeka near Ripley Park. Lived in poverty and attended East Topeka Junior High School where he was voted most likely not to succeed. His mother said she didn’t care what he did as long as he did his best. He served in the Army for two years after high school graduation in 1964.

At Topeka High School a teacher asked him what he was going to do with his life. He said he would work at Kansas Neurological Institute. The Teacher suggested he go to college, which in his lifetime, he earned several college degrees including a bachelor’s in Graphic Arts Technology Management from Central Missouri State University and a Master’s in Management from Baker University. Moving to Kansas City, he gained additional responsibilities working for Hallmark. He became production manager at Leavenworth and next plant manager in Kansas City. In 1995, Hallmark promoted him to Vice President - North American Production. and later Vice President of Manufacturing, he retired in 2007.

Powers thanked his Lord and Savior Jesus Christ, his family, his friends, his wife and his children and grandchildren.
“Thank you so much, I’m so thankful, I’m so humbled,” he said. 

McComas earned a reputation for excellence, her students won multiple state and national awards for speech and debate. 
 
McComas said she was surprised to learn she was being inducted into the Hall of Fame because she lacks certain traits like being “warm and fuzzy.” She was fierce in demanding her students perform their best. She credited two teachers with “fortune telling magic” to see her potential. It’s those individuals who push and tug and prod you to your next level, she said.
 
Pam McComas said she had worked for USD 501 for some time, but resigned in 1978. But later that summer she was called back to work at Topeka High School, where she worked until her retirement in 2014.

"Excellence is never an accident," she said. "It is achieved by high intention and sheer effort, excellence represents a choice, not a chance.”