Buy Bitcoin and other Cryptocurrencies Cheap Before The Rally, Hedgefund Manager

Pantera Capital’s Hedgefund manager, Dan Morehead says now is a good time to load up on “cheap” cryptocurrency, citing Bitcoin’s drop below is 230  day moving average as a good buy and safe investment.

Now as much as this sounds like great news he could be considered a bias source but he also predicted a massive correction around the 20K mark for Bitcoin.

His reason for investing more now is that “institutional, high-quality, regulated” investors will be coming into the market in a number of months and he expects this to drive a massive rally.

Actually we think he very well could be right.  Cryptocurrency, like any market has stagnated at different times and doom and gloom has filled some of our hearts but the fundamentals are a high-frequency, cyclical cycle of bearish and bullish runs.  We think the bulls are about to come in soon as cryptocurrency has been kept down since the end of 2017.

Source

Ethereum “Smart Contracts” are not smart, buggy and only for Kangaroo Courts, Says Critic

Everyone’s favorite critic Prof. Nouriel Roubini may have a point this time with one of his recent tweets targeting Ethereum:

“Smart Contracts” are neither smart nor contracts: they are extremely buggy -100 bugs per 1000 lines of code – & they are not contracts as no court can enforce them. The only courts in crypto land are the crypto developers’ kangaroo courts who randomly decide when to fork or not https://t.co/ZS48y5ZQMu

But as always let’s evaluate the merits of what is being said and not by who it is!

1 –  Mr. Roubini on Smart Contracts

He says “Smart Contracts” are not smart due to security holes in the code.  On this one we would agree, researchers have already confirmed most Ethereum Smart Contracts are vulnerable (think DAO style hacks where people lost all their coins due to insecure code).  We think Roubini is right on this one.

2 – Smart Contracts are not contracts and no court can enforce them

The jury is literally out on this one.  We are not aware of any court cases regarding Smart Contracts and whether they can be enforced as valid contracts so it is a matter of opinion.  Legal opinions differ and it also depends on the situation of course.  But some are of the opinion that self-enforcement cannot work for a lot of situations and there are many circumstances in an agreement that cannot be coded or solved without human interpretation or intervention down the line.  It’s too early to say what will happen with Smart Contracts, but there will inevitably be a lot of lawsuits over ICOs down the road and this might be the roadmap and key to unlocking where it takes us.  We think Roubini is making an opinion that is not based on facts or precedent of any sort so at this moment we feel he is wrong or at least there is no clear answer.

3- There are no courts in cryptoland except developers and hardforks

This is a bit of a loaded question.  Smart Contracts themselves, if we accept them (or at least some which meet the normal criteria) could be self-enforcing and therefore this is an idea of court where one party couldn’t back out of the agreement.  However, I believe this is his point.  There is no changing or fixing things in the event a mistake happens or to respond to significant events.  He then goes on to say the kangaroo courts in cryptocurrency are essentially the developers and whether or not they want to hardfork.  This is partially true, but it depends how we classify developers.  There are developers who are hackers, legitimate businesses and teams of legitimate cryptocurrencies.  He is right in the sense that they have a high degree of control and could hardfork to make significant changes.  Our concern is more so that hardforks are possible, it creates huge uncertainty over if a smart contract can survive the next “hardfork” of ABC currency and what happens if they don’t how do you seek relief?

Getting back to the answer this is a wide scope of a comment and question in one.  We’d say he is partially right and also pending any court cases over smart contracts it is hard to say.  If a court order ever becomes enforceable on a smart contract then things change quite a bit.

An interesting discussion about legal and business implications with smart contracts can be found here: http://knowledge.wharton.upenn.edu/article/what-are-smart-contracts/

 

Bitcoin Gold – Yet Another 51% Mining Attack

A lot of cryptocurrencies touted that they were safe and secure and the ones which were honest would say “an attacker would need to have at least 51% hashing power”. This has happened recently with Monacoin and now Bitcoin Gold. We’ve said since our inception that mining doesn’t secure the network, but is actually a huge security hole. Mining works on the premise that everyone is honest and that the majority of hashing power would never be under the control of a single entity (something that is far from reality with todays farms and mining pools).

Bitcoin Gold itself has been marred in scandal and accusations of fraud after their hardfork/counterfeit came out and they never released any first party wallets. They had one made by a third party or lead developer (depending on who you ask) “John Dass” who the Bitcoin Gold team advised was safe to use. However, people lost a lot of money, the wallet that the team recommended stole people’s coins and no proper explanation or update has ever been provided. To this day, many believe it wasn’t a hack or an accident and many questions surrounding their team have continued to circulate.

Fast forward to the 18th of May, 2018 where their communication team advised they suffered a 51% attack. The good news is that they were only were only able to steal about 388K (thousand) BTG coins after taking control of the network. Now, the bad news is that people and exchanges lost millions. Once the attackers gained control of the network they did double spending, both sending coins to their own wallets and sending the same coins to exchanges. Because they had the most hashing power they were able to broadcast these false transactions, defrauding exchanges of millions of dollars for what ended up being fake/reversed transactions.

We ask again, how is blockchain that allows random strangers to control everything from the network and processing of transactions secure and immutable when false transactions can be broadcasted in the first place? The answer to us has always been “no” it is not safe and these attacks will continue to be the norm.

It’s completely unrealistic to think that everyone will act honestly and that those who don’t act honestly “don’t have enough incentive to throw millions of dollars at defrauding others or breaking a cryptocurrency”. This is just the beginning, if state and large corporate actors try such an attack on other chains it is in our opinion only a matter of time. The repercussions will reverberate throughout the industry and it will cause a massive drop in the values of virtually all coins.

We don’t want to be accused of spreading FUD but what many of the promoters of cryptocurrencies said is no longer true “no one has done a 51% attack”. Well, it has happened twice this month alone and it certainly won’t be the end.

Cryptocurrency is the new and more attractive ecommerce or online banking to target and cryptocurrencies will have to evolve and adopt proper security practices regardless of who it upsets. We either have to adopt proper security protocols or have cryptocurrency fall into the hands of the elite bankers.

We still believe Sonajin is the key as we have designed our coin as described in our whitepaper to solve these problems. Untrustworthy nodes, people, mining and public permissionless blockchain are a thing of the past and must be resolved if we are going to have secure, stable and fast cryptocurrencies that work reliably into the future.

Robert Shiller – Nobel Prize Winning Economist Predicts Bitcoin Failure

Robert Shiller has been extremely critical and pessimistic on Bitcoin and cryptocurrency in general.  But do his past examples remain relevant today and do they really apply to Bitcoin and cryptocurrency as a whole?

Sonajin – Analysis of Robert Shiller's Bitcoin Failure Prediction

 

He’s made comments that “no one understands how cryptocurrency works”.  This may be true, but this would be true of the majority of technology today that has been working successfully for a long-time.  No one understood how power or cars worked initially either but we are sure they were predicted as doomed to fail by those who didn’t understand.

In one sense he is right but we haven’t seen him cite the specific technical issues with Bitcoin.  We would argue it is a horrible payment system that is slow, expensive and difficult to use and impossible to replace your current banking and payment systems today.  This would apply to many cryptocurrencies but he doesn’t pick on these issues or appear be aware of them.  He seems to be focusing on the idea as a whole that he sees people who believe in cryptocurrency as some sort of uneducated rebels who are fighting the banks and government.  Now, certainly many involved in cryptocurrency are passionate about ending the banking cartels but there are just as many of us who just want alternatives to our bank that simply work.  Being smart consumers doesn’t make the adoption and use of cryptocurrency worthless, but on the contrary we’d argue the ecosystem will ultimately change finance, investing and banking at the same time and it already is.  If it wasn’t, the governments and financial regulators wouldn’t be talking about it if there was no chance that cryptocurrency could change things.

Some of Mr. Shiller’s comments:

  1. Attempts to reinvent money such as bitcoin often create excitement, but achieve little
  2. In 1827, Josiah Warner opened the “Cincinnati Time Store”, which sold merchandise in units of hours of work, relying on “labour notes,” which resembled paper money. The new money was seen as a testament to the importance of working people, until he closed the store in 1830.
  3. Robert Owen, sometimes described as the father of socialism, attempted to establish in London the National Equitable Labour Exchange, relying on labour notes, or “time money”, as currency. Here, too, using time instead of gold or silver as a standard of value enforced the notion of the primacy of labour. But, like Warner’s time store, Owen’s experiment failed.
  4. Karl Marx and Friedrich Engels proposed that the central communist premise – “abolition of private property” – would be accompanied by a “communistic abolition of buying and selling”. Eliminating money, however, was impossible to do, and no communist state ever did so. Instead, as the British Museum’s recent exhibit, The Currency of Communism, showed, they issued paper money with vivid symbols of the working class on it
  5. During the Great Depression of the 1930s, a radical movement, called Technocracy, associated with Columbia University, proposed to replace the gold-backed dollar with a measure of energy, the erg. In their book The A B C of Technocracy, published under the pseudonym Frank Arkright, they advanced the idea that putting the economy “on an energy basis” would overcome the unemployment problem. The Technocracy fad proved to be short-lived, though, after top scientists debunked the idea’s technical pretensions.
  6. Parallel with Technocracy, in 1932 the economist John Pease Norton, addressing the Econometric Society, proposed a dollar backed not by gold but by electricity. But while Norton’s electric dollar received substantial attention, he had no good reason for choosing electricity over other commodities to back the dollar. At a time when most households in advanced countries had only recently been electrified, and electric devices from radios to refrigerators had entered homes, electricity evoked images of the most glamorous high science. But, like Technocracy, the attempt to co-opt science backfired. Syndicated columnist Harry I Phillips in 1933 saw in the electric dollar only fodder for comedy. “But it would be good fun getting an income tax blank and sending the government 300 volts,” he noted.

Our response:

  1. This statement appears highly biased and contrary to the reality today where banks and governments are adopting cryptocurrency and blockchain technology.
  2. Josiah Warner’s Cincinnati Time Store that sold merchandise based on “labour notes” which value is derived from hours of work didn’t work even though it tried to replace money. Another key difference is that of course you had to work to get that currency. With cryptocurrency you could have mined it (yes proof of work but not with actual labor) or an investment and purchase of cryptocurrency. However, Mr. Shiller seems to overlook the fact that this was implemented on a micro scale in a single city, in a single business and without the globally connected internet community we have today. Cryptocurrency is being used as we speak to buy, sell and trade and it is freely convertible from both and into fiat currency.
  3. Robert Owen’s scheme sounds a lot like Josiah Warner’s so there is no surprise it had the same result.
  4. Karl Marx is on a wider scale so we will give Mr. Shiller part of this one. However the parallels he uses are questionable. Marx tried to eliminate money and he couldn’t do it. We argue that cryptocurrency is a digital money replacement for fiat (cash) money.
  5. The Technocracy that wanted to replace the dollar with a measure of energy failed because it was debunked by scientists. Cryptocurrency is not an idea, it is here now, today and working as real currency.
  6. Once again Mr. Shiller uses almost two identical examples, much like the Technocracy, John Pease Norton tried to do something almost identical and it of course failed.

He seems to be missing the key point that cryptocurrency is not an idea, it is digital money that has significant value on the market today (we can argue it is a bubble and some are overvalued) but the fact that millions of people around the world are buying, selling and trading in cryptocurrency, including banks and large investors should signal that it is here to stay.

He is right to say there are issues with cryptocurrency which is in its infancy still. But we aim to resolve those issues and as a hedge against his bet, we will be creating a market that solely trades in XSJ. If Cryptocurrency is to be a replacement to your bank or fiat cash, it must function in a similar way.

We also think he underestimates the internet community.  Back in the days of Napster, the RIAA instead of understanding that people wanted digital music, tried to fight the revolution and has lost, just like the MPAA. Now we are not saying we condone piracy, but if governments try to ban cryptocurrency it is unlikely it will die. There is also little evidence that the main governments of the world want to ban cryptocurrency, but rather, it is clear that they want to regulate, tax and control it, and that would give it nearly defacto currency status.

It seems like Shiller in one vein makes sense, but his historical comparisons in our opinion lack context and the globalized nature of cryptocurrency and its acceptance by millions of users around the world.

Monacoin Mining Attack – PoW Does Not Work

Monacoin was recently exploited via mining attack that enriched the hackers with $90K USD.   It has been described as “selfish” but in our opinion it is essentially fraud, theft and unjust enrichment but also shows the inherent weakness of PoW mining.  Too much assumption is placed on the participants in public, permissionless blockchain to be honest actors without incentive to do something nasty, cheat or defraud others (which isn’t how the world works unfortunately ).

Apparently the attacker or attackers worked for more than 6-months to achieve more than 50% of the hashing power of Mona Coin (centralization and he who has the most hashing power controls the network including the ability to broadcast false transactions and other nasty stuff).  Once they had their 50%+ hashing power they mined a new block but did not announce it, and continued to secretly mine more blocks without announcing it.  Obviously all this throws off a lot of transactions and raises the issue of the whole system being a problem.  Suddenly you have “confirmed transactions” that are now unconfirmed or essentially invalidated in this case.  The attackers then suddenly broadcast the new chain with the most blocks and suddenly the previously correct blocks are unconfirmed and orphaned.  It is the equivalent of having a bank wire or deposit reversed through no fault of your own.  This behavior in PoW in our opinion begs the question of what is really and truly immutable when mining attacks like these can erase a large amount of transactions.

The other problem with PoW is the assumption that attackers wouldn’t obtain enough hashing power or be willing to spend enough money to cause harm to the network, other users or commit fraud.  Whether it is a group of cybercriminals looking to profit or a competing currency or even a government or banking organization, there is enough money and motivation for people to invest both time and money to cause all of the above.

With other chains such as Cryptonite, Verge and many others being hit with similar and various mining attacks it is our opinion that not only is mining unsustainable but it simply doesn’t work, slows things down and is a huge security risk.  For this reason we will continue to develop our project using PoS (proof of stake).

Sonajin’s XSJ Coin and network cannot be attacked in this manner because we do not process transactions by mining, but rather by PoS and our network validates all transactions.

Original Link.

Don’t Worry About Bitcoin’s Value

There is always lots of news about the value of Bitcoin and the Altcoins but we look at it differently and for the long-term.  Whether Bitcoin is $8500 today or $95000 tomorrow does it matter?  Well, of course to investors and HODLers yes of course it matters.  But there is a greater issue at hand and that is are the valuations of coins and tokens appropriate and where will they be months and years from now?

To answer that question we only have to look at the tech bubble of the 90’s AKA the dot-bomb era.  Not many of those companies are around, but the ones that are around are the ones that actually produced value and delivered on their promises.

We believe cryptocurrency is heading to the same direction and ultimately despite the many flaws and issues with Bitcoin, its valuation will continue to appreciate.  Bitcoin does face a lot of challenges including slow transactions, child porn on the blockchain, centralization through asic mining farms and pools and high fees to name a few.  To top it off a big factor we feel will continue to stifle valuation are the endless hardforks taking money away from the original Bitcoin.  This is one reason that we disagree with and will be preventing all hardforks from Sonajin/XSJ.

We believe the answer is in the functionality that brings users and business together in a seamless way that works better than the rest.  This is essentially what Sonajin is about, solving and improving cryptocurrency with a single coin the XSJ!

Monero, ZCash, and Dash Delisted in Japan by Coincheck

The story is that Coincheck was under intense pressure and scrutiny by Japan’s FSA (Financial Service Authority) after the heist of NEM coins.  The FSA said that they have inadequate security to prevent laundering and terror-ism.  Both of course are serious issues but is it just us or are there much higher standards that governments hold cryptocurrency to?  Most of us who have ever bought cryptocurrency or signed up for an exchange can attest that you could open a bank account or even get a loan more easily!

The coins in question are all essentially anonymous and untraceable so presumably this is why they were delisted.  But why delist them?  There is demand for them and unless someone is proven to be using them for illegal purposes what is the issue?  Fiat currency is used for illegal purposes all the time and is extremely difficult to trace.

Coincheck and any exchange or government who takes this stance is simply losing out on business and alienating its customer base to move elsewhere.  Don’t get us wrong, it is good to prevent illegal activity but why are there such double standards that are applied to cryptocurrency vs fiat?

We think bankers and governments feel the impending threat that their banking and debt cartel could soon come to an end.  They are right, but ironically, all of these bans and delisting are just quickening their own demise.  It’s time to cut out the middleman and be our own bank.

It looks like governments only find value in cryptocurrency if they can monitor, trace and control it.  They can try to ban and devalue coins like ours but there will always be demand we will do our best to keep things moving with our own marketplace that uses XSJ.

Kazakhstan Wants UN Global Regulation of Cryptocurrency and a Full Ban

The Kazakhstan President says he wants the UN to implement “Global Regulation of Cryptocurrency” and he wants it banned.  No offence to Kazakhstan but why is this such a big priority?  Our guess is that it is not so much voluntary priority as it is being influenced by large banks and governments.

Why would anyone but bankers benefit from global regulation of cryptocurrency?  Surely there is a better way and the world has hopefully learned from the slow train wreck known as the “Euro”.   All countries should set monetary policy and any regulation on cryptocurrency in a way that reflects the conditions and benefits of its people and not the other way around.

Sonajin’s privacy, security and marketplace will ensure long-term stability for XSJ no matter what the bankers and governments want to do with cryptocurrency.

Original Source.

Big Banks Continue To Centralize Cryptocurrency

“Steve Chiavarone, a portfolio manager at Federated Investors, a US-based investment firm that oversees $364 billion in customer assets, stated that blockchain technology will drive the fourth industrial revolution……

Blockchain startups like Bluzelle have already built trusted blockchain networks for large-scale conglomerates such as HSBC, KPMG, Microsoft, and MUFG, which have also continued to leverage blockchain networks like Ethereum and Ripple through several blockchain consortia.”

It is clear that more than ever, big money and big banks are entering the cryptocurrency world, both through direct investing, mining and even node running.  When investment firms with billions of dollars in assets are jumping in what do you think will happen?  We think it is irresistible because they can just spend millions and began to have huge influence on the market in both buying and selling (the long term valuation) and also directly via mining and node running.  The system of PoW, permissionless, public blockchain was designed to make it fair but these days it is all but that.  Whoever buys the most coins and hardware is really who controls the major coins.

It’s time for the community to centralize and insulate ourselves for the possible demise of major coins like Ripple’s XRP who works with banks and has been accused of planning to dump it in the future.  It’s not limited to Ripple though, since you don’t need a relationship when it comes to mining and running public nodes.

Sonajin’s XSJ being PoS, and without the public permissionless blockchain is the only coin which is immune to this sort of attack.  The only possible attack are the typical market tactics of buying and selling, but the Sonajin network can never be controlled by banks  or large investors no matter how much money they have.

Source.

Childporn on Bitcoin Blockchain!

A recent article mentioned the fact that some images and links to child porn are present in the Bitcoin blockchain:  https://www.coindesk.com/child-porn-bitcoin-blockchain-what-it-means/

The question for us is this really what Satoshi envisioned?  In our view, Sonajin and the XSJ blockchain is only for payments.  Essentially at a high-level the only thing we accept from the user as input is a number which represents how many XSJ will be sent or received.  If a coin is acting as a currency and accept arbitrary data into the blockchain, we can see it is a serious security and potential legal risk.  The question now comes to the point is Bitcoin node or wallet running and mining illegal due to illegal content on its blockchain?

This is why Sonajin doesn’t allow arbitrary data on the blockchain it must be validated as “valid data” and not just “that X amount of nodes and miners confer on bad data”.  Sonajin is the solution to the many problems with today’s public permissionless blockchain system!