Libra - Facebook's Cryptocurrency Implications

Facebook Inc. (FB) is making a bold move that stands to have vast implications across its business model and its user base via launching its cryptocurrency called Libra. Cryptocurrencies are still in a nascent stage in terms of adoption, acceptance, application, and full understanding of these virtual coins. The cryptocurrency market thus far has been speculative, volatile, and met with skepticism from users and governments alike. Despite the tumultuous albeit short history of cryptocurrencies, these alternative forms of currency have vast implications. These implications include potential disruption of central banks, destabilizing government-backed currencies, reshaping the financial transactions space (i.e., banks and credit cards) while displacing central database infrastructures via blockchain (i.e., banks, clearinghouses, credit card networks). Facebook’s Libra stands to address the unbanked (those without traditional bank accounts) segment of its user base in a major way. The President and Jerome Powell, along with many others in government have either voiced concerns or publically made clear that they’re not embracing this move by Facebook. Government officials are concerned about appropriate regulatory framework being in place considering the company’s past privacy scandals. Nonetheless, will this cryptocurrency bode well for Facebook moving forward?

What is Libra?

Libra will be dissimilar from Bitcoin in its underpinning blockchain technology and mining. Libra will not run on a decentralized disturbed blockchain ledger, and no mining of any additional coins will occur. The blockchain is permissioned and will be managed by the Libra Association, which is a membership organization that consists of 27 payment, technology, telecommunication, online marketplace, venture capital, and non-profits. Libra is planned to be launched sometime next year 2020. Libra will allegedly be backed by financial assets such as a basket of currencies and US Treasuries to circumvent volatility. Unlike Bitcoin, which isn’t backed by anything and can highly volatile, Libra’s value should be anchored and less variable. Each member of the Libra Association will add $10 million, so the cryptocurrency has full asset backing. The supply of Libra will expand and contract based on demand; if demand is high, then the association will purchase more of the underlying assets and create new Libra. If users want to cash out of the cryptocurrency, the association will pay them and destroy the equivalent amount of Libra. Continue reading "Libra - Facebook's Cryptocurrency Implications"

Chip Maker Hits Target, Beats Rivals and Bitcoin

Last November I shared a promising trading opportunity to play on the Modern “Gold Rush” For Cryptocoins. Like the Great Gold Rush, I thought that those who sell equipment could benefit from new a “tulip mania” as this crypto buzz was called in the media.

I selected three chip makers, which were well known for the broad use of their products in the “mining” of cryptocoins. These companies are NVIDIA Corporation (NVDA), Advanced Micro Devices, Inc (AMD) and Taiwan Semiconductor Manufacturing Company, Limited (TSM). Firstly, I made the same comparative chart analysis of their stocks as I usually do for the classic mining stocks; it is funny that the word “mining” I used here has a totally different meaning.

We were on the right path as despite the market euphoria there was one stock, which lagged behind the others and the gap was significant. The laggard Advanced Micro Devices (AMD). It was the only one, which showed the negative price dynamics for the first ten months of 2017 with a -2.71% loss compared to +104.58% for NVDA, +43.94% for TSM and +14.62% for S&P 500. Continue reading "Chip Maker Hits Target, Beats Rivals and Bitcoin"

Square Just Made It A Lot Easier To Own Bitcoin

Matt Thalman - INO.com Contributor - ETFs


A few weeks ago, Square’s Cash Application began allowing users to buy, sell, and hold the crypto-currency Bitcoin. Square’s Cash App, which is generally used to transfer money, has now unofficially endorsed the crypto-currency with what is essentially a trial offering to a limited number of Cash App customers. It should be noted that Square has allowed customers to use Bitcoin as a form of payment for nearly two years now, but customers needed to purchase their Bitcoin’s through other methods in the past.

In a statement, a Square spokesperson said, “We’re always listening to our customers, and we’ve found that they are interested in using the Cash App to buy Bitcoin. We’re exploring how Square can make this experience faster and easier, and have rolled out this feature to a small number of Cash App customers. We believe cryptocurrency can greatly impact the ability of individuals to participate in the global financial system and we’re excited to learn more here.”

Square’s Chief Executive Officer Jack Dorsey is a believer in crypto-currencies and the blockchain technology they are built on. He recently told an interviewer that blockchain is “the next big unlock.” The interview went further, and Dorsey disclosed that friends and family had asked him how they could buy Bitcoin, which may be an insight into why he has moved Square in its current direction. Continue reading "Square Just Made It A Lot Easier To Own Bitcoin"

The Modern Gold Rush: These Three Stocks Could Benefit

Aibek Burabayev - INO.com Contributor - Metals


History repeats again and again as human beings don’t change; they only change on the surface. There is a good lesson learned from the Gold Rush in the 19th century – there were some lucky diggers, who made a fortune, at the same time many merchants who were selling equipment and jeans became rich. But many adventurers left broke.

These days we have the Crypto-Mining Gold Rush led by Bitcoin with a market share of more than 60% and market capitalization over $124 billion. This coin is worth as much as the Hungarian GDP and exceeded the market cap of NVIDIA Corporation (NASDAQ:NVDA) – one of those “merchants” selling “shovels” to modern “diggers” aka miners.

Today, as long ago, the competition gives an advantage to cooperated mining pools with the most advanced equipment, lowest electricity, and labor costs. That’s why there is no surprise that the top mining pools are located in China (70% of the Bitcoin hashrate).

There are two main types of suppliers to the crypto mining industry: electricity suppliers (up to 70% of all mining costs) and equipment suppliers. The massive demand for mining equipment attracts nimble middlemen, for instance, they resell the ASICs (application-specific integrated circuits, microchips) for 2x-3x of the original price tag, making relatively risk-free money on modern “diggers” that risk a lot. Continue reading "The Modern Gold Rush: These Three Stocks Could Benefit"

Modern Paradox: As Large As Goldman Sachs But Has No Intrinsic Value

Aibek Burabayev - INO.com Contributor - Metals


The Riddle

This riddle could be paraphrased as “It is almost worth the gold reserves of France (World #5), it is what all want now at the price of 2016, you would be eager to have it as a gift last Christmas, it stands at 14 GDPs of Kyrgyz Republic (my motherland)”. Yes, you got it right, it’s a Bitcoin - notorious, attractive and, of course, risky.

Last week the market cap of this coin hit an all-time high at the 99+ billion dollars increasing ten times from what it was just a year ago.

Chart 1. 1-year dynamics of Market Cap of Bitcoin in USD

Dynamics of Market Cap of Bitcoin in USD
Chart courtesy of blockchain.info
Continue reading "Modern Paradox: As Large As Goldman Sachs But Has No Intrinsic Value"