The creators of the world cryptocurrency to whom Bitcoin is obliged to success

Cryptocurrencies are a phenomenon at the junction of several areas at once, and that is why many find it so difficult to understand them. Even the term itself is more confusing than clear. However, on the other hand, this is precisely the strength of digital currencies.

When discussing cryptocurrency, we may be interested in the opinion of three types of specialists: cryptographers or computer science specialists, crypto-anarchists and financial experts, each of them having their perspective on the subject matter.

Bitcoin was invented and developed by the brilliant scientist Satoshi Nakamoto. Nobody knows his real name, but it is indisputable that he is an exceptionally experienced person in cryptography and software development (or a group of people).

Cryptography is a rather eclectic discipline where mathematical skills and programming skills are in demand. Satoshi is an excellent cryptographer and computer scientist, and this allowed him to find a solution to the problem that had long been tormented by many.

The problem of transferring valuables between distrusting parties for years has occupied the most brilliant minds — the invention of a mechanism for such transactions that do not require the trust of any agent could completely change the financial world.

Satoshi’s solution was called a blockchain – it is a distributed registry of all transactions that do not require participants to trust each other or third parties. And based on the blockchain a payment tool, Bitcoin (Bitcoin Bitcoin) was created.

Satoshi wrote about his discovery on a mailing list that brings together many of the world’s best cryptographers. Among them was Hal Finney, and he was one of the first to work with Satoshi. The first Bitcoin transaction in history was a test – Satoshi translated Finney’s cryptocurrency to check the correctness of the program.

Gradually, more and more cryptographers and scientists began to join the project, and in 2012, Satoshi suddenly disappeared. However, his colleagues continued to develop the protocol.

The second wave of enthusiasts of digital currency became crypto-anarchists – for them, Bitcoin became an opportunity to free the world from the power of governments and the financial system based on fiat currency. These people were idealists, unwilling to compromise with their principles.

This group rejects any attempts to regulate digital currency. For them, the main value is not in the possibility of enrichment or in making Bitcoin a generally accepted means of payment – they regard the network as a social and political movement.

Cryptanarchists are the heart and soul of Bitcoin, and they make every effort to keep the project decentralized and true to its underlying principles.

Somewhere at the end of 2013 cryptocurrency attracted the attention of specialists in finance. This group is usually less politically motivated and more inclined to compromise on issues such as regulation and taxation – their goal is to adopt universal cryptocurrency.

And in this financiers, many of whom have made a name for themselves on Wall Street, have achieved great success – with their help, bitcoin has largely infiltrated the traditional financial system, and as a result, the value of the digital currency has increased.

Some of them, for example, the Winkloss twins, tried to create an opportunity for ordinary investors to invest in Bitcoin, and although their application to create an exchange fund (ETF) this year was rejected, they have already appealed this decision. By the way, the recent staff changes in the Securities and Markets Commission may be in their hands.

Another example is Barry Silbert, who founded the Digital Currency Group, fully or partially owning several important Bitcoin companies, in particular, Grayscale Investments, which sponsors Bitcoin Investment Trust.

When it turned out that something was missing in existing cryptocurrencies, new ones started to be created, for example, Dash. Dash was founded by investment advisor Evan Duffield, who realized that bitcoin and other digital currencies lack a motivation system for network members.

Unlike Bitcoin, where full-fledged network nodes that store full copies of the blockchain, do not get anything for it, Duffield thought that reward should be paid for this and other work for the good of the network.

This summer, the Commodity Futures Trading Commission of the United States approved the application of LedgerX, which promises to launch a legal exchange for trading Bitcoin futures, which will facilitate participation by traditional investors and may also serve as a prerequisite for permission to register exchange funds.

Also in August, it became known that the Chicago Stock Options Exchange (CBOE) reached a partnership with Gemini crypto-gambling partnership, the purpose of which is to launch cryptocurrency derivatives trading in 2017.

Today, financiers are the main engine of accepting Bitcoin as a means of payment everywhere. With them, institutional investors’ money came into the world of cryptocurrency, and they continue to create new tools for investing in digital currencies.

At first glance, it may seem that the success of a cryptocurrency is due only to programmers and cryptographers, but this, of course, is not so – crypto-anarchists and financiers also played an important role.

What are the basics of the futures market

A futures contract is a type of obligation whereby the parties agree to transfer to each other a certain set of financial assets or commodities in the future at a predetermined price.

But futures trading does not mean that all market participants receive or supply goods – buyers and sellers of futures mainly use them for hedging and speculation, and not for exchanging real supplies. That is why futures are widely used not only by producers and consumers of raw materials but also by speculators.

The futures market is of great importance to the economy. It provides active competition between buyers and sellers and, more importantly, helps manage price risk. By its nature, the futures market is extremely liquid, risky and complex, but its work can be understood by breaking into pieces.

Futures are not suitable for risk-averse investors, but they bring great benefits to a wide range of people and companies. From this article, you will learn how the futures market functions, who works on it and what strategies it applies.

The futures market is a centralized platform for buyers and sellers from around the world. Here they meet and conclude futures contracts. Previously, futures prices were set on stock exchanges, now operations are mostly carried out electronically. The main characteristics of the contract – the price and delivery date. But, as mentioned earlier, almost all futures contracts do without the actual delivery of the underlying asset.

Let’s say you decide to connect cable TV. As a buyer, you sign a contract with a company, according to which it undertakes to provide a viewing of a certain number of channels for a previously known monthly fee for the next year. The contract with the company is similar to a futures contract – you agreed to receive the product in the future at a fixed price and on known conditions. Even if the cost of a subscription to cable television grows in a year, you will still pay for the service at the old price. By signing a contract with the company, you protected yourself from the risk of price increases.

The futures market works similarly. Only instead of cable companies, it gathers producers and consumers of various commodities and other assets. For example, a farmer is interested in fixing the price for the next cereal crop, and the bakery is trying to determine the price of a potential purchase to determine how much bread can be baked and with what profit.

Thus, a farmer and a bakery can conclude a futures contract for the supply of 5,000 bushels of grain in June for $ 4 per bushel (a unit of volume in the American system of measures equal to 35.23 liters). By signing the contract, each of the parties fixes the price, which is considered fair in June. It is these contracts – and not the grain itself – that are traded on the futures market.

So, a futures contract is an agreement between two parties to a transaction. The seller takes a short position and undertakes to put an asset, the buyer takes a long one and undertakes to buy an asset. In the example above, the farmer is the seller, the bakery is the buyer. We will discuss the prospects of long and short positions in more detail in the strategies section; for the time being, it is important to understand that each contract includes two positions.

The characteristics of each future are known in advance the quantity and quality of the underlying asset, the unit price, the date, and the delivery method. The “value” of a futures contract is the future agreed price of the underlying asset. For example, in our example, the contract value is 5 thousand bushels of grain at $ 4 per bushel.

Gains and losses on a futures contract depend on market dynamics and are calculated daily. For example, the next day wheat went up to $ 5. The farmer lost $ 1 per bushel as the selling price increased. The bakery made a profit of $ 1 per bushel because the price it is obliged to pay is lower than the market.

At the end of the day, 5 thousand dollars ($ 1 * 5 thousand bushels) are debited from the farmer’s account, and the same amount goes to the bakery’s account. As prices change, these numbers are adjusted accordingly. Unlike the stock market, the balance of futures positions is calculated daily – the profits and losses from trading operations are immediately credited to the trader’s account. In the stock market, capital gains or losses are not counted until the investor closes his position.

Since the accounts of the participants are adjusted every day, most transactions on the futures market are recorded in cash, and the goods themselves are bought on the spot market. Prices in both markets usually move in parallel and are the same at the expiration date of the futures. When one of the parties decides to close its position, the contract will be redeemed. If the price of wheat at that time is $ 5 per bushel, the farmer will lose 5 thousand dollars, and the bakery will earn the same amount.

But after paying off a futures contract, the bakery will still need grain to bake bread, so it will buy it in the required amount on the spot market, paying $ 25 thousand ($ 5 * 5 thousand bushels). Taking into account the $ 5 thousand received under a futures contract, the bakery costs $ 20 thousand. The farmer will sell his grain on the spot market at $ 5 per bushel, however, taking into account the loss on futures, its revenue will be the same 20 thousand dollars. In other words, the farmer’s loss on the futures market is covered by a higher spot price – this is called “hedging”.

A futures contract is a kind of financial instrument. Now it is easy to imagine that both parties to the transaction are occupied not by a farmer with a bakery, but by speculators. In this case, the seller will lose 5 thousand dollars, and the buyer will earn the same amount. That is, after the expiration of the contract, neither the one nor the other will go to the spot market to buy or sell the underlying asset.

Since the futures market is both very active and important for world trade, it is a good source of valuable market information and information about investor sentiment.

Pricing Because of the high competition, the futures market has become an important economic tool in determining current and future prices based on supply and demand. Prices in the futures market depend on a continuous flow of information from around the world and require high openness. Factors such as weather conditions, military conflicts, defaults, refugee flows, land reclamation and deforestation can have a significant impact on supply and demand, and, as a result, on current and future commodity prices. All this information and the attitude of investors towards it constantly affects prices. This process is known as “pricing”.

Risk reduction. Futures markets also reduce trading risks. This is because the participants know in advance how much money they need to buy and how much they will receive when selling. Futures can reduce costs and reduce the risk that manufacturers inflate prices to the final buyer.

How to sell bitcoins

Sell bitcoins harder than buying. This guide contains all the information you need to successfully sell a cryptocurrency. First of all, the seller must choose the method of the transaction – via the Internet or in person. Both methods have their advantages and disadvantages.

To sell a cryptocurrency, on these sites you need to register as a seller. Also, you must provide proof of identity.

After registration, the user can place his offer and then receive notifications from the site when the buyer appears. From this point on, the interaction takes place only between the parties, bypassing the middlemen, and the service provides all the necessary infrastructure to complete the transaction.

You can sell bitcoins on the cryptocurrency exchange. To do this, you also need to register and provide personal data, but the transaction is easier.

The exchange acts as an intermediary who controls the means of sellers and buyers. Sellers place on it an application for sale, indicating the amount, currency and its value.

When the buyer appears, the service will automatically conduct the transaction. The cryptocurrency will be transferred from the seller’s account to the buyer’s account, and the seller will receive money.

The disadvantage of this method is that when selling bitcoins for ordinary money, the received amount will have to be transferred to a bank account. If the stock exchange lacks liquidity or problems with banks, the withdrawal process may take a long time.

You should carefully examine the service with which you intend to work before transferring money. Examples of online exchanges are Circle, Kraken, and Bitstamp.

Also, there are stock exchanges where you can only change digital currencies. This method is used for arbitration purposes or if the store accepts other cryptocurrencies (for example, Bitcoin Shop now accepts litecoins and dogecoin’s as payment for goods).

Some services charge a fee. For example, BTC e withholds from the seller 0.2% of the transaction amount. You can compare the size of commissions in various cryptocurrency markets and trading volumes, for example, on CoinCompare and Bitcoin Charts.

Another subtlety is that the exchanges limit the maximum size of the account (it can vary over time). In any case, it is unwise to keep your money in the account of the exchange service, although for speculation this may seem the most appropriate option.

You are responsible for your funds – large sums should be stored on personal devices or offline since even the most reliable Internet services can be hacked one day.

Recently, sites like Brawker and Purse began to appear in Bitcoin space. Their goal is to bring people together with specific and complementary needs.

These are, for example, people who want to buy goods on sites that do not yet accept digital currencies directly. Another class of customers is those who want to buy bitcoins with a credit or debit card. Peer-to-peer platforms unite people with corresponding needs and allow one to buy bitcoins, others to get goods at a discount.

International bank transfers allow you to move money anywhere in the world. Most (if not all) online bitcoin exchanges support this withdrawal method. Besides, you can use the services of third-party payment systems.

While many of the sites mentioned here almost do not require special information from buyers, they require confirmation of identity from sellers. The laws do not yet oblige the Bitcoin platform to collect personal data, but they do it in a preventive manner in case such requirements arise soon.

To simplify the sale of bitcoins, confirm your identity at the registration stage on the site. This step will remove potential barriers to sales when the need arises.

The site may require scans of two utility bills with your name and address, as well as ID scans (passport or driver’s license). Some (for example, BitBargain) may even require a selfie with an open passport in their hands and the name of the site on a piece of paper!

What is value-based investing ?

Value-based investment (investment in value, value trading) is based on the ideas of Benjamin Graham and David Dodd, introduced in 1928. There are many interpretations of this approach, but in general, the concept is as follows.

A trader seeks to buy stocks cheaper than their actual value. It is calculated by discounting future cash flows. If the company’s share price is lower than its actual value with some margin of safety (usually around 30%), the paper is recognized as underexplored and promising for purchase. As a rule, companies that are temporarily in a difficult situation are among the undervalued assets – but the market reacts too strongly to the situation, therefore their securities are traded below the actual value.

Such traders rely on the help of financial analysts, statisticians, actuaries, macroeconomists, industry economists, market professionals, accountants, engineers, scientists, programmers, librarians, research assistants, etc.

The value-based approach is not very popular among traders since for it to work, you need to make significant efforts. The goal of traders, in this case, is to make money on cheap stocks. It is more complicated than it seems and requires a lot of patience.

Therefore, in the long run, not those who consider value investment easy win. Only traders who know that it is not easy to get high profits, but they continue to move towards the goal.

Investing in undervalued stocks, traders are more than others concerned about the essence and fundamental indicators of a business, rather than the influence of other factors on stock prices. They believe that fundamental factors, such as profit growth, dividends, cash flow, and book value, have a greater impact on the value of shares than the market. Such traders in a sense can be attributed to conservative investors because they usually buy securities of companies for a long time.

If the company’s performance is good, but stock prices are lower than their actual value, the trader understands the market valuation is wrong. He buys papers and waits for the market to correct its mistake.

Here are the indicators to look for when looking for potential investments. Of course, each trader has his approach, but he most likely includes the following factors for evaluating

Investing in undervalued stocks is working successfully, but the trader needs to be wary of companies whose business is declining. The pace of the introduction of new technologies is accelerating, the Internet is becoming an integral part of our life, the software is conquering the world. In such conditions, companies that do not want to apply new technologies and adapt to changing market conditions do not just slowly die, but break down into the abyss, dragging investors along with them.

With this approach, many traders have made huge fortunes. It is effective if you carefully approach the valuation of assets and buy paper companies for the future.

Cryptobunker Inside a secret bitcoin repository in Switzerland

My goal is to see with my own eyes the vault of Xapo. This is a unique structure in addition to the fact that Bitcoins are stored here (Bitcoin), the room itself is a decommissioned Swiss military bunker in a granite mountain.

Its exact location is kept the secret, and access is limited to a multi-level security system that would be too tough for even James Bond.

It is not known how many bitcoins are stored here, but the deposits of some customers exceed millions of dollars – from time to time, they organize tours of the vault.

It is a bit unusual to realize that virtual currency requires a completely tangible bank. But she, like digital photos, needs some kind of drive. Xapo was founded by Argentine entrepreneur Vincez Casares – a “zero patient” bitcoin fever with a focus in Silicon Valley.

The bunker does not store actual bitcoins, but private cryptographic keys. These keys are paired with public keys for user identification and access to the electronic account.

Modern hackers are talented guys, and to protect themselves from them, Xapo resorts to traditional banking methods. The security level in the company borders on paranoia, and this is not at all surprising, because, in the event of a leak of information, it is impossible to catch up with the intruders, alas, as well as to return the money.

From the main road, we turn onto an inconspicuous primer and find ourselves surrounded by cows grazing peacefully. In the distance, a lonely hiker stomps. Soon we drive to the foot of the mountain, where the massive three-meter gate rises. We are met by Deltalis employee Michael Strayf.

Details run a data processing center of almost 1,000 m², where the decommissioned bunker is now located. Server racks for storing keys fill a granite space 320 meters deep. The Swiss military built the facility in 1947, and during the Cold War it served as a secret army headquarters, reports Agence France Presse. Detailed maps on the walls and ancient radio electronics remind of the military past.

Strife escorts us to the entrance to the bunker – a concrete facade jutting out from a mountain slope. In the lobby, as in most office buildings, I sign for the entrance – however, there still need to show fingerprints and take pictures.

After that, I pass through the locked cabin – a cylinder made of bullet-proof glass the size of a telephone booth. I stay in it until the operator examines me and releases me.

Passing through the cabin, we attach passes to the sensor and pass through the revolving steel doors, and then walk along the 100-meter granite tunnel. It rests on two steel red doors, which, as I am informed, can even withstand a nuclear explosion.

I try to close one of them – nothing happens. “They are locked up every night,” says Strife and shows you how to get up and where to push so that the door will give way.

Then they lead me to the “private sector” Xapo – the territory of the center, which is carefully guarded. We pass through the second security cabin and find ourselves on the threshold of an ordinary white door. Unlocking it, Strife notes, “No one has gone so far apart from the Xapo employees.”

Inside – the size of a wardrobe. There are a refrigerator and another door. But that’s all, they don’t let me on. Taking pictures is also prohibited.

About everything that is behind this last door, I later learned from Carlos Rienzi, the head of Xapo security. Rienzi chose a room for Xapo, developed luggage storage and security protocols. His “threat model” is to protect the object from attacks by “well-funded terrorist groups or hackers”.

So, in this sector, there are two more compartments of the operator’s office and the so-called “cold room”. The cold room is surrounded by steel panels that form a Faraday cage – protecting equipment from external electromagnetic pulses (EMP), which can destroy protected data, and therefore the keys to bitcoins.

For digital assets like Bitcoin, not enough thick walls and a secret headquarters – you need to provide a screen against invisible attacks, such as an electromagnetic bomb.

No one, not even an operator, can enter a cold room. It is sealed with tape, like a crime scene, so that no one can go unnoticed. Here is the equipment that is used to sign Bitcoin transactions and never connects to the Internet. The signing of the transaction takes place offline.

The operator connects to the equipment using a special cable system and sends the encrypted data for signature. To resolve the transaction will require two more signatures from two other centers located on different continents.

I ask Rienzi if he is 100% sure of his security system, and he answers, “We are under threat 24/7. This is not a race, but a chess game – you need to try to anticipate the opponent’s next move. You can not relax.

What is the yield, value and market price of a bond

To understand what the bond rate depends on is not so easy. For many beginning investors, it becomes a revelation that the rate of bonds is changing every day, like any other securities traded on the stock exchange.

Yield is a measure of the profit you receive from a bond. The easiest way to calculate the yield is according to the following formula: yield = number of coupons/price. If you bought a bond at par, the yield is equal to the coupon rate. When the course changes, the yield also changes.

Example If you bought a bond with a 10 percent coupon rate at par value of $ 1000, the yield is 10% ($ 100 / $ 1000). Easy peasy. But if the price of a bond fell to $ 800, then its yield rises to 12.5%. This is because you get your guaranteed $ 100 for an asset whose value is $ 800 ($ 100 / $ 800). Conversely, if the price of the bond rose to 1.2 thousand dollars, its yield fell to 8.33% ($ 100 / $ 1200).

Of course, in reality, things are even more confusing. When investors talk about returns, they usually mean yield to maturity (YTM). YTM is a more complex indicator that shows the investor’s profit if he keeps the bond until maturity. It takes into account all coupon payments that you receive (and assumes that you reinvest the coupon payment at a rate equal to the current yield of the bond), as well as profit if you bought a bond at a discount, and loss if the purchase price was above par.

The formula for calculating YTM does not interest us right now. These are quite complex calculations that go beyond our learning text. Here it is important to remember that YTM is a more accurate indicator, and allows you to compare bonds with different redemption conditions and coupons.

The ratio between the price of a bond and its yield can be formulated so when the price rises, the yield drops, and vice versa. In other words, it can be said that the price of a bond and its yield are inversely proportional.

A popular question is which is better, high price or high bond yield? The answer depends on your point of view. If you buy a bond, you need a high yield. The buyer wants to pay $ 800 per share, priced at $ 1,000, which means a yield of 12.5%. On the other hand, if you already have a bond, your coupon rate is fixed and you hope that the price of the bond will grow. Then you can get the benefit by selling it in the future.

Now you know what face value, coupon, redemption, issuer, and yield are. All these characteristics of a bond play a role in determining the price of a bond. However, it is even more affected by the overall level of prevailing interest rates.

When interest rates rise, the bond rate in the market falls, increasing the yield of previously issued bonds and equalizing them with new bonds with higher coupon payments. When interest rates fall, the rate of bonds in the market rises, lowering the yield of previously issued bonds and equalizing them with new ones. bonds with less high coupon payments.

Not a bitcoin one How to make money in the currency market right now

Have you ever thought that there are more volatile instruments in financial markets than cryptocurrency? A year ago, digital asset speculation became an extremely profitable enterprise, overshadowing the trading instruments of classical markets.

Today, everything gradually returns to normal. The digital industry is no longer a hype, and investors who have lost their vigilance, focusing on Bitcoin alone, are missing out on great opportunities and lucrative histories of the traditional foreign exchange market.

Just a few days ago, a full-fledged economic crisis broke out in the Turkish economy, which led to a storm in the national currency market. Everything would be fine, but an analysis of the latest price trend of the Turkish lira indicates that its volatility exceeds the movement of Bitcoin.

We will immediately make a remark, unlike the founder of the crypto industry, whose movements are difficult to predict, the collapse of the Turkish currency is more than predictable and justified. The fact is that Turkey has become another victim of American sanctions and Donald Trump personally.

Given the state of its balance of payments, as well as the extreme form of dependence on American imports, the US sanctions policy immediately plunged the national economy into a state of crisis. The Turkish Lira (USD / TRY) almost collapsed twice, inflation went into double-digit territory, hitting consumer activity.

At the same time, the dollar began to grow, which is also more than predictable, given its protective properties. It is worth noting that the expensive dollar represents a serious threat to emerging markets. The more expensive a dollar is, the harder it is for countries to fulfill their debt obligations denominated in it.

The debt of same Turkey exceeds 200 billion dollars. Of course, the risk of default will continue to stimulate high rates of capital outflow, which at any time could lead to another wave of sales of the Turkish currency. We advise you not to miss this wave.

Turkey’s influence on the euro currency is due to concerns that the economic crisis could very quickly spread from Ankara to key countries of the currency bloc. Today, Turkey’s total debt to Spain, France, and Italy exceeds $ 150 billion.

Of course, if a full-fledged economic crisis breaks out in a country, then its potential default will be the reason why this debt will be placed in the category of bad and uncollectible.

Given the not the best financial position of the banking system of same Spain, liquidity problems may arise in the European Union. It is concerned about the safety of European assets in Turkey and acted as a catalyst for the breakdown of psychological support 1.15. Now, the bearish rally of EUR / USD is a self-sustaining process. The goal of the decline is supported 1.1.

American sanctions collapsed and the ruble. The new package of financial and economic measures (against banks and the possibility of deposits in OFZ) can really be a serious blow to the Russian economy. Russian banks will not be able to conduct standard dollar transactions through correspondent accounts in foreign financial institutions, in fact, their assets will be completely frozen

No less risk is the potential ban on non-residents from working with Russian debt, that is, bonds. Despite the fact that the restrictions will apply only to new issues, it risks provoking the exit of investors from earlier placements.

In other words, the Russian economy is also on the verge of a liquidity crisis, during which the USD / RUB (USD / RUB) rate may well settle above 75. We advise not to delay here.

All these transactions on the most favorable conditions, you can conduct a broker AMarkets. The company ensures the protection of traders’ accounts in the amount of up to 20 thousand euros, and also recently passed an audit by AMarkets, the largest consulting company Ernst & Young.

Opinion Blockchain – a solution to a non-existent problem

Zach Corman, the founder of Awesome Power, a financier, and programmer, shared his opinion on what problems the blockchain solves and whether we need this solution.

In my opinion, the blockchain will not be able to revolutionize the global economy or fundamentally change the existing corporate structures. Also, he will not be able to eliminate intermediaries. The fact is that the blockchain is a solution to a nonexistent problem.

The era of the blockchain began with Bitcoin (Bitcoin). At that time, the conviction prevailed that existing payment systems did not allow making irreversible payments online, which meant that micropayments were impractical. Bitcoin was supposed to be the solution to this problem. However, do not take my word for all of this in the introduction to the Bitcoin White Paper.

“Necessary intermediation of financial institutions prevents the implementation of irreversible transactions. The cost of these services increases the cost of transactions and sets their minimum price, making it impractical to carry out infrequent and small transactions. In addition, the absence of irreversible transactions increases the cost of services whose services are irrevocable. “

Blockchain allowed to create a payment system without financial intermediaries, in which the transaction can not be canceled. In theory, this would reduce costs and make micropayments possible.

The point is not that trust and intermediaries are necessarily bad or ineffective. Just the presence of a trusted intermediary calls into question truly irreversible transactions and leads to an increase in costs, making micropayments unprofitable.

But by the time I became deeply interested in this topic (in 2013), everyone seems to have forgotten about the original idea. As a payment system, Bitcoin was more profitable than credit cards. Most people associated with Bitcoin, at best, talked about the “inefficiency and obsolescence” of intermediaries, and at worst, predicted their complete disappearance from the market. As far as I can tell, no one has ever thought about the useful functions of intermediaries.

However, the blockchain did not save us from the need for intermediaries. In fact, they perform useful functions, and the idea behind Bitcoin was that sometimes we simply do not need these functions and the associated costs. Remember irreversible payments for irreversible services? Alas, it was a long time ago.

Suddenly, Bitcoin was the best way to buy on the Web just because you can save 2% on costs and still hope that the seller will still send the paid goods. Let me remind you that this system was designed to eliminate any need for the trust!

Bitcoin never managed to fix the problem it was created to solve. Its costs are still too high for micropayments, and confirmation of transactions takes too much time. However, the attempt was really worthy – we must pay tribute to Craig Wright and Hal Finney (that is, Satoshi?) …

This does not mean that there will be no place for the blockchain in the future, but a healthy share of skepticism will not hurt. This is not to say that the blockchain simply eliminates intermediaries and the need for trust, and to end there. I need details. Why do I need to remove intermediaries? Why not trust any third party? Does the elimination of intermediaries really reduce costs, and will we not lose anything because of this?

Not surprisingly, virtually every proposed use of the blockchain does not answer any of these questions. Time after time I observe the same logical errors and omissions. I want to discuss some of them to try to answer at least some of the questions. The problem is not that the description is not complete enough, the authors do not think about these things.

The first common mistake is statements like “thanks to the blockchain, you can now …”. Usually, these words are spoken by a person who is convinced that his idea can be implemented only with the help of the blockchain. However, in most cases, it turns out that he simply did not consider alternative ways. Such statements will not work in any other technological area. It’s like saying that thanks to NoSQL (approaches aimed at implementing databases without the SQL language), we can finally store data.

Or imagine the following my car, which is already essentially a computer, enters into a lease agreement with a parking lot controlled by another computer. He “signs” the contract at the time of arrival. As a payment, the car transfers a small number of bitcoins to the parking wallet.

Computers control the whole process, so we will never forget to pay for parking. The only problem may arise when my car runs out of bitcoins. But she has a simple solution because the ignition is controlled by the on-board computer, the parking can simply give the order and turn off my car.

Scenarios like this are possible when the blockchain – a digital registry of transactions originally invented to verify Bitcoin transactions – will be used not only for payments.

In other words, your car will make its own payments … It all looks like a normal transponder, but with the ability to turn off my car if I don’t pay. As long as I can remember, I always had a transponder in my car. I don’t think it works on the blockchain. Perhaps the blockchain here would be useful and would allow reducing costs, but the essence is something else.

As I said, I need answers. This story perfectly illustrates the author’s reluctance to consider alternative ways of implementation and the associated subtleties. Here is another example. I constantly come across slides describing the advantages of the blockchain for small businesses, but I just can’t understand why these ideas can only be realized on the blockchain.

Traditional databases are maintained by some organization, and this organization completely controls the database, including changing information at its own discretion, prohibiting changes or adding data fraudulently. In most cases this is not a problem, since companies usually maintain their own databases and are not interested in falsifying their contents, however, there are cases (for example, a financial network) where the stored data is too important and the temptation to manipulate is too large to allow one organization to fully control them. . Even if we are confident in her honesty and know that she will never change the data in her own interests (already a rather bold assumption), there is still the likelihood of hacking and theft of information by hackers.

Of course, reversible payments are the case when the existence of a central governing body is a plus. There are many such examples. I am surprised that people are not intuitively aware of this. As a co-founder of a startup, I perfectly understand the negative reaction of people when I tell them that I cannot “fix” something on my website. They just want me to do everything that is necessary.

What will they think about the blockchain that no one can fix in the event of a breakdown? An indicative (and funny) example is the case with DAO. DAO, if anyone knows, was to become an investment fund in the Ethereum network, based on the rule of software code. However, the attackers found the vulnerability in it and stole millions of others, after which the furious investors demanded that they are found and brought to justice.

Another common misconception is the idea that all problems can be solved technologically. It is best illustrated by the following blockchain application in the energy industry.

The blockchain reduces transaction costs by storing a single logical copy of transaction records. As a result, there is no need for reconciliation and calculations. Due to its unique qualities, blockchain can play a significant role in the energy sector and potentially change it beyond recognition.

The technology will reduce utility bills or the need for working capital in the wholesale gas and electricity market. At the same time, the blockchain will allow millions of consumers (heating, ventilation systems, air conditioners, boilers, electric cars, batteries, solar batteries) to pay each other directly, providing support to operators of power grids and making it possible to integrate renewable energy sources with minimal costs.

This is an absolutely beautiful and sensible idea. However, she also became a victim of the delusion “now this is possible thanks to the blockchain.” Blockchain is not needed at all so that different devices can communicate with each other. However, the implicit assumption that the development of the energy market is hampered by the lack of advanced technologies is more important. In other words, if we can develop a more advanced system, it will be implemented, and everyone will benefit from it.

The blockchain may be excellent for the energy sector, but the allegedly impending economic revolution will be accompanied by active rule-making and advice. For the time being, people are responsible for everything, and you need to be prepared for this.

Blockchain is trying to solve a problem that you have never thought about the problem of a trusted intermediary. Being a programmer, I never went to Stack Overflow to ask “How to develop a system that functions as a database, but at the same time no one can control it, including the creator?”. And I never saw this question being asked by someone else. As a private consumer, I never thought “In this product/service I absolutely do not like a trusted intermediary.” Such thoughts simply do not arise in the minds of most people.

Satoshi these features were needed for very specific purposes. He also explained in some detail why these functions are necessary. His followers, who picked up the baton, seem to have forgotten about the original goals of the project. Suddenly, his main and self-sufficient task was to eliminate intermediaries.

In other words, the blockchain solves a far-fetched problem, and people who argue about the uniqueness of new technology do not understand this. The hype is likely to continue, but I hope that sooner or later we will understand all the drawbacks of the blockchain.

Mining kings Who led the cryptocurrency mining market

The days when it was possible to mine Bitcoin on an ordinary home PC were irretrievably gone. Now mining has become a process requiring special hardware and software. Let’s see what kind of equipment, who produces it and what is better to use now for mining.

It was possible to mine for quite a long time on ordinary home computers, but then the evolution of the equipment began to involve using video cards for this purpose in calculating the hash function for closing the CPU block is not particularly effective, unlike the GPU.

To increase the income from mining with the help of standard components, rigs began to be assembled – powerful computers with several video cards specifically for mining cryptocurrencies. Because of this, the demand for graphics chips has greatly increased – and that’s when major players, manufacturers of graphics chips, drew attention to the mining market.

Advanced Micro Devices (AMD NASDAQ) is one of the old-timers in the microprocessor market. Now the company is among the largest manufacturers of processors (both central and graphics) and chipsets for motherboards.

The so-called red Radeon video cards from the AMD RX480 and RX580 series are widely used for mining in terms of price and characteristics, they are optimal for this. AMD also cares about the support of its devices, constantly releasing software that allows you to more effectively manage mining processes.

In 2018, many computer hardware manufacturers – ASROCK, MSI, ASUS, Sapphire, Rajintek, Biostar and TUL – presented ready-made mining solutions based on chips from AMD. They are focused on various mining needs and differ in their characteristics.

Although AMD had previously stated that it was not focusing on the sale of mining equipment in its commercial activities, recently the importance of blockchain technology has been emphasized on their official resources. It can be concluded that AMD is not going to leave the market.

The most popular mining cards for NVIDIA were and remain GeForce GTX 1050Ti, 1060, 1070, 1080, 1080Ti. There are new versions of 2060, 2070, 2080, 2080Ti. And the company has released special chips for mining graphics cards P 104−100, P 106−100. Their video cards, by the way, because of the color contrast with AMD, are usually called green.

However, in general, in the mining area, NVIDIA’s business was not rosy. Red AMD video cards have a higher power, although greens consume less power.

High expectations of the company from the mining sphere did not materialize. Due to the long-term decline in the crypto-market, sales of mining equipment did not reach the forecasted figures. The shares sank, and as a result, the company announced the termination of the production of special mining lines.

Of course, the rest of NVIDIA’s video cards remain on the market, and miners can buy them, but it seems that the victory in the battle of the red and green seems to be for the red.

Intel (NASDAQ INTC) is probably the most famous manufacturer of computer processors. Their equipment was previously used exclusively for CPU mining. For example, the company developed mining chips for 21 Inc (later 21 Inc was renamed Earn.com and sold to Coinbase).

But lately, this type of mining is not the most popular classic cryptocurrency lined on GPU and ASIC. Those coins that can be mined on the CPU are not so profitable and popular. And the complexity of computing top-end cryptocurrency is constantly growing, which means that we need more computing power. And the increase in the price of electricity, which is consumed in abundance by a powerful processor, has not been canceled.

But the company decided to go the other way and made a real breakthrough last year. Intel received a patent for a mining device that combines a hardware accelerator of mining, a processor and special software. This patent is issued by the United States Patent and Trademark Office only under the condition of strict requirements, the equipment is an invention, has novelty and industrial applicability.

Thus, Intel will present an innovative device that can change mining as such. This accelerator will allow a 35% increase in power when searching for a hash. It combines a hardware device and a software upgrade for computing hashes. This method can work in conjunction with ASIC (application specific integrated circuit, special purpose integrated circuit – in general, it is a chip specialized for solving a specific problem, in this case for mining), and with FPGA, and with CPU, and even with network protocols SoCs.

It quickly became clear that mining was going to become a serious and promising industry. Mining equipment has a certain specificity, and manufacturers of “iron” quickly picked up the trend. Many companies engaged only in mining equipment have already firmly established themselves in the market.

Standard ASIC is not amenable to firmware and works “as is.” It is completed with one or several processors, power units, coolers, and it will not work to use it for anything other than mining.

Perhaps the most famous manufacturer of mining equipment – Bitmain. This Chinese company is quite young (founded in 2013), but has already managed to go from a small startup to a market leader. According to various estimates, at the end of 2018, Bitmain controlled from 75% to 85% of the ASIC miner market.

The most popular miner Antminer S9 is their design. In terms of hash rate and power consumption, this is the best choice, but it cannot be called the most affordable Bitmain. This line is updated quite often, but many miners are in no hurry to upgrade their equipment, guided by the principle “work – do not touch”.

And the company itself, it seems, is not limited to this principle. First, Bitmain introduced a router with the mining function of litecoin Antrouter R1 LTC, and then supplemented the line of such devices – Antrouter R3 DASH with mine Dash, and Antrouter R3 SIA – Siacoin.

By the way, Bitmain could become a monopolist not only because of its equipment. The company also owns the large mining pools Antpool and BTC.com (they share the first place in bitcoin mining).

Like Bitmain, Canaan Creative is young (it has been running since 2013) and is based in China. Its creator has developed chips designed specifically for mining. The first ASIC was produced precisely at Canaan Creative.

At the end of 2018, Canaan Creative, according to experts, occupied about 15% of the market for ASIC miners. Its flagship line includes the miners of the Avalon series, one of the most popular – AvalonMiner 821, and just recently the new flagship AvalonMiner A10 was announced. The company is famous for the stability of its equipment.

Canaan Creative went even further than Bitmain and introduced the world’s first Bitcoin TV AvalonMiner Inside, equipped with artificial intelligence. His hash rate is 2.8 Th / s.

According to Canaan Creative, the company is not going to stop on what has been achieved, the line of home appliances with the possibility of mining will expand, because the era of the blockchain and AI has already come, and users should be ready for it. Future products of the company will be included in the “Internet of Things” sphere. So, already announced a mobile mining farm and a heater with a cloud computing function.

The full name of this company is Zhejiang Ebang Communication Co., Ltd., but outside of China, it is known simply as Ebang. Ebang has been on the market for nine years, it was founded in 2010, but earlier the company was engaged in the production of telecom equipment.

In the mining market, Ebang has already forced itself to be considered a series of Ebit Miner E11 is extremely competitive. These miners consume a lot of electricity, but it pays for a high hash rate.

All mentioned manufacturers make ASIC for bitcoin. Founded last year by Canaan Creative engineer Chen Min, the Chinese company Linzhi set itself a more ambitious task to create an ASIC for the broadcast. This is how a miner working with the ProgPoW algorithm appeared.

Unfortunately, experts agree that such ASICs for broadcasting are not worth much attention having risen at some point, the hash rate again collapsed, and the efficiency of the devices themselves is at the level of video cards, which, unlike ASIC, can be sold or used for other purposes. .

Not to mention the fact that no one specifically fights Bitcoin ASICs, but in the case of the ether and some other cryptocurrencies, special algorithms are used, the same ProgPoW, which prohibits mining of these currencies on the ASIC.

Why does a crypto trader need a trading plan

Before opening a market position, it is important for a cryptocurrency trader to answer a series of questions. The responses to them develop a trading plan that every trader should have. It should be written on paper (or printed in Word). This can save the trader from making unreasonable, unprofitable transactions.

Strict adherence to the trading plan – will be the basis for competent trading. Rejection of it will lead to wasted time behind the monitor, excessive emotion, erratic actions and in 99% of cases, the deposit will drain.

It is a clear trading plan for each transaction that will become the “holy grail” that traders all over the world hunt. Many of them have heard of a certain trade plan, which supposedly should be followed, but only a few realize that it really is.

During the development of a work plan for a transaction, the trader answers a series of questions. This allows you to transfer information obtained from charts and news to the reflex level. When realizing a trading situation, memory at certain moments gives and extracts the necessary fragment, and this is how a sense of the market is developed. It takes time to memorize typical market situations.

At first, the results may be inconspicuous, so traders ignore this kind of trading and turn to entry points and a number of special techniques. Progress will appear after 1-2 years of daily practice, and the first results can be expected at least in 5-6 months. Few people are willing to wait for success for so long, although a lot of money in trading can be earned by experience. Consider the stages of work on the TG.

The idea is primary. It must be confirmed or not. For a trader, a hint should show the current market situation. You shouldn’t invent anything “from the ceiling” and “suck out of your finger” only because of the analysts’ messages.

The answer here should not be “What if it turns out …”. This is a blunder that can only lead to a sink. It is important to remember that position outside the market is also acceptable. Perhaps even more acceptable than the position in the market, and certainly more acceptable than the “blind trade”.

Many cryptocurrency traders are trying to predict where the market will go. This is a blunder that makes us not to analyze, but to choose between the two opposites, which leads to a drain on the deposit.

Each idea has several conditions for implementation. If a large operator is absent, and COT reports show an uncertain picture, the market has entered the range position – it does not matter whether to buy or sell, you need to open a position in the direction indicated by the market itself.

After opening a trade, it is important to determine the level of risk that arises when checking a trading idea. It is necessary to determine the position in which to open the opposite transaction. This is the stop-loss point.

The question of whether or not the market breaks through this particular level is erroneous. To close a position there must be a real reason, a condition that the market will demonstrate. To leave the transaction “just like that,” for no reason, because it is “hard to sit”, because it is scary, it seems that the volume of the transaction is large, the market has gone too high, is a gross mistake.

“The trading formation is important, the specific conditions for entering the position and understanding at what point in time you need to enter. It is better not to open new positions after dinner – it will be either a false figure, or the position will not work. All of this, including the temporary discrepancy, should be fixed, ”says Mark Sorokin, an analyst at MINE crypto corporation.

Important here is the knowledge of trading formations. Most often this is the shortage of tops and lowlands or the formation of a double bottom with the overcoming of daily lows (highs). It is important to fix them in the form of drawings. In the event that this is a long accumulation, one must wait for the output from the side and fixing the price – and one can join the movement.

In the latter case, preference is given to the outboard of a duration of three days. This is a sufficient accumulation with which to work in the future. Until the price comes out of the outset, one cannot say for certain where the market will go.

If the opening of the transaction is not in priority, but you need to trade, the lot can be split up, for example, by 1/10 of the average standard, or you can close part of the position, if possible. Even if the market goes into plus, but we can expect a correction, a 50% position is fixed. Thus, the lot is transferred to breakeven.

It is necessary to correctly assess trade risks for each specific transaction. In the traditional market, this figure does not exceed 1%, for cryptocurrency – 3-5%. If the risks are higher, the transaction should be abandoned.

Important points should be fixed so that they are always before your eyes and constantly re-read. You can write in notebooks, smartphones for these purposes are less convenient.