December 17, 2018

“Investors Carried Out Mental Gymnastics to Justify Bitcoin Prices” – Bloomberg Editor-in-Chief

Bloomberg co-founder and former Editor-in-Chief, Matt Winkler has likened speculation-driven bitcoin price movements to the dotcom boom of the mid to late 1990s, comparing the excuses given by investors for irrational market optimism at that time to the reasons given by modern day cryptocurrency speculators.

Speaking to Emily Chang on Bloomberg Technology, Winkler explained that cryptocurrency investors have attempted to use non-traditional methods to ascertain and justify optimistic valuations for digital assets, which according to him is actually nothing new.

bitcoin Market Compared With Dotcom Crash

Referring to a valuation metric used in the dotcom boom called ‘Cash Earnings’ – essentially an estimate of future revenues and profits for companies that sometimes did not even have a finished product – Winkler revealed that use of flawed arithmetic to arrive at a desired outcome is in now way new or unique to the crypto market.

In his words:

So [with regard to] Cash Earnings and bitcoin, there is a comparison that I think is valid, which is that where people can’t find standard ways to measure value otherwise known as intrinsic worth, they do all kinds of mental gymnastics to do that. bitcoin is a really good example of how everybody tried so hard to justify what it was doing when the closer they looked they couldn’t find it – even Warren Buffet said its a joke. So we’ve been in this picture before and I think the dotcom bubble that burst in 200 is a good example.

Asked whether bitcoin will recover unlike most dotcom stocks 2 decades ago, Winkler stated that while he is not clairvoyant, it is possible to reasonably predict future price movements by looking at the fundamentals and arriving at a roughly scientific picture of how much value it provides versus demand, and thus how much it should be valued at in the marketplace.

According to Winkler, the current state of volatility in the crypto market is a sign of “noise”, which means that the market is having difficulty finding the signal that indicates exactly how the assets should be valued. This situation he said, is going to persist and even intensify in the immediate future as the “noise” gets louder with increased cryptocurrency market activity taking place alongside regulatory ambiguity and a measure of existential doubt over the future of he asset class.

Winkler rounded up his interview by pitching his tent with the “blockchain over bitcoin” camp, stating that the utility of the bitcoin as a tool that people can use is in itself a definite and identifiable intrinsic value. This point of view is one that is shared by a number of prominent market voices. Earlier in December CCN reported that Morgan Creek CEO Anthony Pompliano stated that the use as the world’s most secure transaction settlement layer means that it “cannot be worth zero.”

Featured image from Shutterstock. Matt Winkler photograph from Twitter.

Get Exclusive Crypto Analysis by Professional Traders and Investors on Hacked.com. Sign up now and get the first month for free. Click here.

Advertisement

Published at Mon, 17 Dec 2018 22:43:28 +0000

You might be interested in …

April 5, 2018

Verge Cryptocurrency Hit By 51% Attack, Loses 250,000 Tokens

Verge Cryptocurrency Hit By 51% Attack, Loses 250,000 Tokens The cryptocurrency Verge — which prides itself on “security/anonymity/privacy” — was hacked yesterday. In a short period of time, the attacker made off with around 250,000 […]

September 8, 2017

An Interview With Kavita Gupta, ConsenSys’s Pick to Oversee Its New $50M Venture Fund

ConsenSys, an Ethereum production studio based in Brooklyn, NY, is launching a $50 million venture arm, and it has picked Kavita Gupta to run it. Gupta’s job will be to oversee the new venture and help structure deals with the startups.

It is not uncommon for companies with investment capital to form their own investment arm. For the most part, the goal is to fund startups that could drive value for the parent company down the line. And, as a strategic investor, ConsenSys Ventures will be actively involved in developing startups from an early stage.

bitcoin Magazine spoke with Gupta on the phone earlier this week. She was in New York getting ready to dash off to San Francisco. ConsenSys has offices in Brooklyn and in San Francisco, and Gupta will be splitting her time between both of those offices.

She explained she will be working closely with Joseph Lubin, the founder of ConsenSys and one of the early founders of Ethereum. And, she added, naturally, ConsenSys Ventures will be looking to invest in Ethereum-based startups.

“We are looking at companies already, and we are going to deploy this as soon as we get green signals from a lawyer on the structure. Everything else is place,” said Gupta, who will be talking more about the fund at Women in STEM in San Francisco on Monday.

When asked about the overall goals of the venture, she responded, “I think, to Joe, being one of the co-founders of Ethereum, what really matters is how to basically accelerate this revolution. He wants the smartest entrepreneurs to create applications on it, to use it and start ingraining that work into our ecosystem to create companies.”

To that end, ConsenSys Ventures will be looking to invest in pre-seed, seed, and equity stage companies, she explained, adding that the fund will also be investing in pre-token sales, if the entrepreneurs decide to go the initial coin offering (ICOs) route.

Gupta described her role as overseeing the entire process while also being deeply involved with structuring deals. “Like any managing partner, I will be basically doing due diligence, looking at the companies, and structuring the deal. And, at the same time, making sure all the fiduciary duties are done,” she said. “With respect to making the decisions, it is going to be me and Joe working very closely.”

She indicated, finding good startups to invest in would not be an issue. “Once you are in ConsenSys, which is pretty much the center of the blockchain space, you don’t really have to go out looking for great companies,” she said, adding that the team was currently “looking deeply” at four to five startups, but nothing had been finalized yet.

She said she will leave the decision as to whether or not a startup should launch an ICO, up to the entrepreneurs themselves. “We help them create a business. We help them create an idea. I don’t think we are really pushing or saying that every company has to go for token sales. It makes sense for some companies, and for others, it doesn’t make sense. We want to support the entrepreneurs in whatever they do.”

Strategic funding is different than straight venture capital funding, she emphasized. “We want to believe that it is different than the traditional investment because it is sort of like a VC hedge fund. All of the companies are coming to you at a very early stage, and we want to be involved in shaping the company, with respect to business, operations, hiring, and how they are going to make money.”

As part of that, the ConsenSys Ventures will offer a range of support. “We also work as a strategic investor, helping you out both with respect to the technology solutions, because we have access to the ConsenSys ecosystem, and also to deliver the company, because a lot of people forget they have to deliver the company after that.”

She also pointed out that ConsenSys Ventures was part of a natural evolution. Two years ago, ConsenSys launched as a way to build out ideas on top of the Ethereum network. Earlier this year, ConsenSys launched ConsenSys Academy to start training engineers in how to do that work on their own. Now, ConsenSys Ventures is sort of a middle ground, offering support, but still letting entrepreneurs do their own thing.

“Now across the world, entrepreneurs are capable of building and designing — coding their own systems on Ethereum. They don’t necessarily need ConsenSys 100 percent, so how do we collaborate with them? I think Consensys Ventures is the best way to do it.”

A native of India, Gupta is a 2015 recipient of the U.N. Social Finance Innovator Award. In addition to working at the World Bank, where she headed the organization’s youth innovation fund, she has more than 10 years of experience in impact investment across a variety of companies, including McKinsey, HSBC and International Finance Corp.

She has worked in the U.S., the Middle East, South Asia and Africa. She most recently led mission investing for the family foundation of Alphabet Inc. executive Eric Schmidt.

The post An Interview With Kavita Gupta, ConsenSys’s Pick to Oversee Its New $50M Venture Fund appeared first on Bitcoin Magazine.

November 17, 2017

How to Secure Your Cryptocurrency Wallet: 16 Simple Tips for Beginners

Literally millions of people have joined the world of cryptocurrencies recently. For example, Coinbase, one of the biggest cryptocurrency exchanges, has added around 2 million new clients within two months. Blockchain.com, the major electronic wallet, found its client base increase by 1.8 million during the same time frame.

Most of these people are newbies, unacquainted with security issues and risks that surround complex but currently profitable cryptocurrency realm. This makes them easy targets for cybercriminals and thieves.

One popular crime which is conducted on cryptocurrency traders is the phone-porting attack. Crooks monitor social media in search of cryptocurrency discussions wherein people publish their emails and phone numbers for quick connection. After that, hackers use various social engineering techniques and posing as a victim, call the telephone provider and trick the customer support rep into transferring the telephone number to a phone they control. As soon as hackers take charge of the telephone number, they log in to the victim’s wallet or exchange account, reset the password and subsequently snatch all funds from the account.

A phone number is not the only security weak point. Hackers may get hold of your home PC too. Phishing attacks, Ponzi schemes, and ransomware are all widespread forms of cryptocurrency fraud and theft. Nothing teaches a person about security quicker than cybercriminals hacking his account and running off with $5,000 worth of Bitcoins. Once this happens, people tend to get really serious about their security.

So, what is the best method to safeguard your cryptocurrency assets from hacks? We must confess there is no ideal approach to the problem. In this digital age, hard drives, laptops, and phones are becoming the brand new bank vaults. Real-world experience and understanding of how to protect money from thieves are not sufficient for the virtual money.

How to Secure Your Crypto Wallet Like a Boss

The following tips can be used as a security guide for new cryptocurrency aficionados:

Securing your software wallet is similar to protecting any data on your computer. You have to be a little more paranoid while browsing the Internet, clicking on links and email attachments.
Mobile users may take advantage of Google authenticator with a single IP in its whitelist, which should be the VPN to access the online exchange.
It is important to select an exchange that is not only flexible and easy to use but also reputable and secure. Try to follow the news. If industry leaders disengage from a project it should be a worrying signal. Repeated technical problems and strange policies are additional points of concern. bitcoin withdrawal difficulties will always be a red flag also.
Do create backups. Kept in a secure place, a backup of your cryptocurrency wallet may save you from hardware failures and a lot of human slipups. It will also let you restore your wallet in case your PC or telephone gets stolen.
Encrypting the wallet or your hole device enables you to create a password for those attempting to take out any money.
Although passwords and encryption can protect from thieves, it is not able to put a stop to key-loggers or another malware. It is important to install and keep up-to-date leading antivirus and antimalware solutions. Many of them are free to use.
Prior to creating an account on any exchange, set up a new email box that you will be using for that specific exchange account.
Be sure to choose a very difficult and lengthy password, desirably a passphrase. Write it down on paper and store that piece of paper in a secret place.
Turn on two-factor-authorization not only for login but for any transaction procedures.
While on social media or forums, do not mention what cryptocurrency exchange or wallet you use.
Contact your phone carrier and order all possible levels of security they can offer. Add passcodes, secret questions, pins, etc. Additionally, enable the “do not port” option for any new SIM card.
Web exchanges and wallets all claim they treat security very seriously and implement all necessary protection technologies to prevent breaches and unauthorized transactions. Do not trust these words. Such companies are not banks; they often do not have the same level of security. And even banks get robbed often.
Do not store all Bitcoins in one wallet or exchange. Diversify your risks. It is extremely difficult to steal money from several wallets at once, particularly when you set different email accounts and passphrases for each of them.
Consider keeping big cryptocurrency sums in cold wallets off the Internet. The cold wallet is a technology of keeping Bitcoins offline on hard drives or even paper. Hackers will not be able to reach your funds. On the contrary, the hot wallet is linked to the Internet. It should be used for everyday transactions and is like a checking account, whereas cold wallet may represent your savings account.
Consider examining decentralized exchanges. The difference between decentralized and centralized exchanges is that decentralized exchange does not store your funds. Nobody can gain access to your money except you.
Tell your peers and especially close friends and relatives to embrace the same attitude and mindset. Ecosystems, where all participants treat security seriously, are less attractive to cybercriminals.

Try to always help beginners to buy and sell with security. This territory is new and we should assist people who are trying to find their way. Fortunately, you do not have to be a cryptography professional to make the first security steps which will save you from most of the problems.

Do you take any additional wallet security measures that are not on this list? Let us know in the comments below.

Images courtesy of Wikimedia Commons, AdobeStock

The post How to Secure Your Cryptocurrency Wallet: 16 Simple Tips for Beginners appeared first on Bitcoinist.com.