Bitcoin

Bitcoin’s Day In The Sun Dimmed By Dimon’s Bluntness

It’s almost become a cliche to say bitcoin had another wacky week. 

But when headlines like CNBC‘s (“Bitcoin spikes 70% in a month; nobody knows why”) hit the wires, it starts to stir up one simple question that bitcoin has yet to overcome: Can bitcoin ever overcome its volatility?

By its very nature, of course, the answer is also simple: No. 

On Tuesday (Nov. 3) of this week, the bitcoin community was abuzz as prices surpassed $400 and spiked up as high as $490. Bitcoin enthusiasts were calling for bitcoin to blow past $500 and break the $600 mark. This, of course, would still be $500 below bitcoin’s peak in 2013 when it topped $1,100. 

Well, bitcoin’s price didn’t deliver, and its price volatility showed its true colors as bitcoin’s price was floating around $385 midday on Thursday. 

So, what gives? Sure, bitcoin is wonky, but a price spike like that hadn’t come close since the Greek Debt Crisis got everyone talking about the potential of bitcoin in times of financial downturn. Well … it’s bitcoin, so there’s a theory or two. 

What has been trending the most this week is the Chinese demand for what’s been referred to as a Russian pyramid scheme. And no, this isn’t like Republican presidential candidate Ben Carson’s views on who built the Egyptian pyramids — although that’s another great conspiracy conversation

What’s gotten the Chinese chattering is a supposed “social financial network” called MMM. To join the network, members must buy bitcoin. MMM is a product of Sergey Mavrodi, who has his own fair share of controversy. He’s a former Russian parliament member who was jailed for fraud. To refresh, he was found guilty of defrauding investors out of 110 million rubles.

MMM claims that its practices are completely legal and says the scheme is simply to transfer money between people. What Mavrodi claims is that the purpose of the site is to protest the established financial order, claiming: “This is a community of ordinary people, selflessly helping each other, a kind of the Global Fund of mutual aid … The goal here is not the money. The goal is to destroy the world’s unjust financial system.”

But that seems to contradict what draws users into the scheme in the first place.

Once members buy into the bitcoin scheme, the MMM network promises a 30 percent return and extra funds to refer other members. 

Sounds like bitcoin fits in perfectly. 

Not that we’re drinking the bitcoin Kool-Aid or anything, but there’s not a lot of other explanations out there that suggest why bitcoin’s price shot up so high in just one day. The price jump, in fact, was 70 percent higher than it was a month ago. 

And so the volatility continues.

Dimon Calls Bitcoin ‘Waste Of Time’

JPMorgan CEO Jamie Dimon is far from shy — especially when it comes to sharing his thoughts on bitcoin.

Bitcoin, in his opinion, is a waste of time. That’s not to say he isn’t interested in its technology (blockchain), but for bitcoin, there’s no future for it or any similar virtual currency, he said while speaking at the Fortune Global Forum this week.

“There will be no real non-controlled currency in the world. There’s no government who is going to put up with it for long. It’s kind of cute now. There are a lot of senators in Congress who say ‘I support Silicon Valley innovation.’ There will be no currency that gets around government controls,” Dimon said. 

“The technology will be used, and it could be used to transport currency, but it will be dollars, not bitcoins.”

He views blockchain like “any other technology,” noting that “if it’s cheaper, effective, works and secure, then we are going to use it.”

But bitcoin? 

“Virtual currency, where it’s called a bitcoin vs. a U.S. dollar, that’s going to be stopped,” Dimon said. “No government will ever support a virtual currency that goes around borders and doesn’t have the same controls. It’s not going to happen.”

Looks like Dimon and PYMNTS are of one mind on this one.

Blockchain Elections?

Let’s face it, the U.S. voting system is behind the times.

That’s where one company, Blockchain Technologies Corp., believes it can use blockchain to create a more secure, open source voting machine.

Blockchain is most commonly talked about in financial situations, but now, however, the chatter is focused on blockchain-based elections that record votes via a blockchain in order to keep them more secure and less vulnerable to attacks. Instead of a traditional ballot, these ballots would have QR codes at the bottom, and each candidate would be given a unique address. Those votes are recorded using a blockchain. When those votes are calculated, each candidate gets votes based on a “vote unit” that is created using the blockchain machine.

Could blockchain be the future of elections? Probably not yet, but it’s an interesting thought.

Santander Puts Weight Behind Blockchain Innovation

Speaking of blockchain (where the bitcoin conversations are being refocused), Santander InnoVentures has put up another big chunk of change to spur blockchain innovations.

The group — a $100 million FinTech venture capital fund of Santander Group — has created a competition that brings about early stage startups who are using blockchain — or distributed ledgers — to innovate the financial services industry.

Santander has been a big backer of blockchain’s tech as it recently tossed $4 million toward Ripple, a distributed ledger company.

“Distributed ledger technologies will create huge value for customers, banks and entrepreneurs who create new businesses around it. The Challenge will spark and accelerate that process for FinTech startups,” said Mariano Belinky, managing partner of Santander InnoVentures.

Bitcoin Exchange Hit With Cyberattack

OKCoin, the bitcoin exchange, announced it has shut down some of its services following a cyberattack.

While there aren’t many details on the hackers, the company said users began experiencing server problems and could not access accounts. That hack left users unable to withdraw or deposit funds for hours.

“There is always an inherent third-party risk for traders using exchanges, and obviously in times of price spikes, any exchange with high volumes is a honey pot for thieves,” Alena Vranova, cofounder and director at SatoshiLabs, told CoinTelegraph.

Bitcoin’s Future As A Currency?

Dimon may not be so warm to bitcoin, but there’s some in the industry that are suggesting that bitcoin has a future as a currency. Industry insiders have suggested that it will become the sixth-largest global reserve currency in 15 years.

In a survey by U.K.-based Magister Advisors, which interviewed leading bitcoin companies, it was determined that roughly $1 billion will be spent by major financial institutions on blockchain-related projects during the next two years.

“We have now reached a fork in the road with bitcoin and blockchain. Bitcoin has proven itself as an established currency. Blockchain, more fundamentally, will become the default global standard distributed ledger for financial transactions,” Jeremy Millar, partner at Magister Advisors, said in a news release.

Bitwala Makes Bitcoin-PayPal Payments Possible

Bitwala has launched a new feature that allows its users to send a bitcoin transfer to any PayPal account in Europe.

This option eliminates the need for a bank account or credit card and enables bitcoin users to use services like PayPal. Bitwala claims it can top up PayPal accounts using any currency.

“Bitwala is the link between conservative and new payment options. Since PayPal is one of the biggest payment network[s] in the world, our mission was clear from the very beginning. We don’t only want all currencies on Bitwala but also all major payment providers,” the company wrote in a blog post.

“Integrating bitcoin to PayPal is another step towards Bitwala’s goal to make everything and every service accessible to bitcoin users,” the company wrote.

Bitcoins Up For Auction — 44,000 Of Them

The Silk Road lives on. At least, through its bitcoins.

The U.S. Marshals Service has kicked off its auction of 44,341 bitcoins that were seized from its leader, Dread Pirate Roberts, whose real name is Ross Ulbricht. He is currently serving life in prison for his multiple federal criminal convictions. He is appealing that sentence.

This latest batch of bitcoins up for auction are just a piece of the 144,000 bitcoins that were collected during the investigation. This is the fourth auction from the Silk Road case.

Tip With Bitcoin Using ChangeTip

ChangeTip is changing the way micropayments are done — via mobile.

And now, it’s changing up the tipping scene some more with its new iOS app that allows a person to tip anyone around the world in either bitcoin or USD.

ChangeTip, a social tipping and micropayments platform, launched the new mobile app earlier this week (Nov. 2) to continue its mission of merging offline and online payments by enabling anyone with a phone number, email address or a Facebook or Twitter account to both send and receive money using an app — and they can do so internationally.

As consumers around the world continue to gravitate toward being cashless, mobile applications have stepped in to solve one pain point of a cashless society: being able to make small payments to friends or make small payments for social causes while on the go.

The app can transfer funds via USD, or even bitcoin, and users’ accounts can seamlessly be topped off by mobile while on the go. The benefit from a bitcoin standpoint, of course, is that the money is moved quickly and cheaply between accounts. Bitcoin’s blockchain technology enables ChangeTip to allow for instant transactions between the two parties.

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