If ICO’s Slow Can Ethereum Rise?

According to coinschedule October (~$400mm)had much less ICO issuance than November (~$800mm) Coincidentally the SEC is starting to go after the ICO scam artists, something thats been sorely needed as people (aka “Investors”) can’t be relied upon to do their own due diligence.  Regulation should help remove some scams and improve the quality of the ICO offerings.

While I had soured on the price of Ethereum as a result, it appears (its still VERY early) that if this ICO market can slow issuance the price of Ethereum could propel.

From a technical perspective you could argue a move through $350 would signal “breakout” and possibly higher prices.

Ethereum Price Chart
Ethereum Price Chart

Plus the Bitcoin fork is out of the way – it appears Bitcoin price was propelled by many looking to collecting a “free” bitcoin when the segwit2x for took place. Its common for traders to sell ethereum, litecoin or other “alts” to go long Bitcoin (and vice versa).

Ethereum Parity Bug

Ethereum wallet company Parity Technologies found a bug in their code that leaves hundreds of thousands in Etherum (millions in USD) exposed to “being deleted”. Read here if you want more on this.

Or, more succinctly:

Turns out Parity wallets were hacked in July of ’17, too (see here).

This is what happens when untested technologies are used in “production”.

This is not supportive for Ethereum’s price at a time when Bitcoin is exhibiting dominance and ICO’s are coming under intense scrutiny. It shouldn’t take away from the promising future of the technology.

Catalonia Crypto Isn’t #Bitcoin Bullish

“Catalonia is also considering adopting its own digital token or cryptocurrency” I saw this on zerohedge as an attempt to ascribe a reason to the Bitcoin price spike today.  First, not every single move in an asset must have news attached. Second, Catalonia isn’t even its own legal entity. So you could buy into this crypto and have the EU reject it or call it illegal. Also they are looking at an ICO:

From Coindesk

Blockchain experts in Catalonia have sought help from Vitalik Buterin, Ethereum’s founder, according to El Pais. Vitalik advised the Catalonians to create an ICO to offer a currency that would work in tandem with the financing of a business project for the virtual residence program. The e-residency ecosystem could create an economic community independent of a central bank.

Estonia recently proposed “Estcoin,” a national cryptocurrency. If the country follows through on this plan, it would be the first national government to launch an ICO.

Kaspar Korjus, managing director for Estonia’s e-residency program, posted a Medium blog in August claiming Estonia could offer Estcoins to residents. The coins could be managed by the Republic of Estonia, but accessed by anyone through the e-residency program. The program would launch an ICO to offer the coins.

Korjus also said the ability to start a location independent company is the main factor driving the growth of the e-residency program.

IF this were all to happen it would be competition for Bitcoin. Second there is no proof it would launch on Ethereum.

Any news like this is crypto-bullish but don’t read that to mean “Bitcoin bullish.”

3 Concerns about #Ethereum

While I own Ethereum and have belief in what the network can do I’ve come across a few recent developments that are casting shadows of concern as an “Investor” in Ether:

  1. Victim of its own success – I believe the ICO market is a huge bubble. This should be a short term problem as the market punishes those who commit fraud and don’t do their due diligence.  This report from Bloomberg shows that only 20 out of 226 ICO’s are actually running a network. The rest are pure speculation. However it also opens the doors to regulated competitors (here). I also think the ICO market is capping the current price of Ethereum as ICO’s cash out (they sell their ICO tokens for ETH, and then sell ETH for fiat). There is little to stop any exchange such as the Nasdaq form launching its own ICO market, just as Overstock has done with tZero.
  2. Competition – Private companies can launch their own private Ethereum network which does not require the use of Ether. Many love to point to the Enterprise Ethereum Alliance as proof that large companies are interested in Eth – and it is – but that does not mean this will have an impact on Ethereum price. On the contrary these companies seem to be getting a “free ride” in the public development of crypto/blockchain technology.
  3. Regulation – will governments crush the ICO market and make it impossible for ICO’s to crowdsource?

Because this technology and its progress is in uncharted waters its hard to pin down what happens next. While I’m hopefully we realize the full potential of the Ethereum network (and I make some $!) you have to watch every angle.

 

Edit: I hadn’t see this before Vitalik sees the ICO madness. He is an incredible guy and gives a lot of faith in the future of Ethereum:

The founder of the second most popular cryptocurrency in the world has always been skeptical about initial coin offerings, or when companies issue digital tokens to attract investment. Those digital tokens’ price is based only on the desire of people to have them, Mr. Buterin noted on the ETHWaterloo hackathon, dedicated, as one can guess from the title, to the structure of Ethereum.

As Vitalik Buterin believes, 90% of current ICO projects, even based on trusted ERC20 standard and even those listed on Coinmarketcap, will eventually crash. What we see right now is only the first version or first practical implementation of tokens, and “tokens 2.0” that will emerge somewhere between 2018 and 2019 will be much better. The hype around current token projects is doomed to fall, and after that, Buterin thinks, we all will finally understand which projects are worth investing and which are not. The ICO rating system is, indeed, one of the most serious problems the market is currently facing. But the market will mature, Ethereum founder assures.

Previously, when it became known to Buterin that independent Ethereum upgrade developers had launched an ICO, he immediately told this is not what he wants to see with his currency development and swiftly established a private fund that invests in decent Ethereum development projects.

#ICO launch Boosts Overstock Price #Ethereum

This ICO launch is not Ethereum what you think. It has nothing to do with ETHEREUM and highlights a potential issues with Etherum use in the future.

Shares of cryptocurrency pioneer Overstock.com climbed more than 5% on Tuesday after the company revealed that it will launch an ICO on Nov. 1 using its proprietary tZERO platform, a strategy that will allow Overstock to raise capital without diluting its float.

Overstock to launch ICO

tZero info here – it looks like one giant competitor to Ethereum’s ICO market – only it looks somewhat regulated. I dont see this as bullish for Ethereum.

This tZero has NOTHING to do with Ethereum – and if its successful will pave the way for other companies to go out and grab more cash. It also shows that Ethereum is just a guinea pig showing how much capital can be raised from pointless ICO’s. There is NOTHING to stop any copy from launching its own private Ethereum (or similar) network.

Another example of this is Microsoft launching private Ethereum networks. These networks dont require the use of Ether.

Which begs me to ask an open question: Is the general public that is buying Ethereum just paying for free development for major corporations and government?

Sure small companies can and will still launch using the Ethereum network but as for large companies using the public Ethereum network (and thereby driving up the price of ETH) its looking doubtful (I say this is a holder of Etherum).

 

ICO Nonsense Tops $3 Billion

According to CoinSchedule.com ICO sales have topped $3 billion on 201 “offerings”. As far as I can tell very little is being produced by any of the entities that cashed in on this craze. Sure, there are a few companies that might make it. Two problems with all these bets:

  1. The ICO’s you are investing are long shots to make it in and of themselves
  2. The ICO’s are (for the most part) launched on Ethereum which itself isnt guaranteed to survive.

So when investing in an ICO you’re making a bet on a bet. I’m not here to say it can’t all work out. But my feeling is that you have all sorts of gunslingers out there who want to get rich quick. Most people “investing” in ICO’s are looking to get rich quick and/or think they deserve a seat on Shark Tank. Most of these ICO’s don’t even give you equity or anything like a dividend. Essentially the ICO is a donation to the enterprise launching the token.

To me this all looks like a massive wealth transfer from guys who got it early on Ethereum and aren’t satisfied. The famous saying on Wall Street is “Pigs get slaughtered” and I fear thats what will happen here.

What annoys me most about all of this is that the ICO market threatens the respectability of Ethereum. I believe that Ethereum could be a game changer, but if ICO’s draw increased scrutiny and or regulatory issues it could hurt Ethereum in a major way. Not to mention there are some very interesting, sincere projects launching tokens which are being washed out by the noise of nonsense offerings.

The market will eventually regulate itself, punishing those who tossed money at bad offerings. Who knows when that happens or at what price – but the current state of things is unsustainable.

Why Bitcoin is Going Up & Alts Are Not

Bitcoin is on the move, up around 5% today while Alts (Ethereum, Litecoin, etc) have been stuck in the mud. As you can see here in this chart of Ethereum priced in Bitcoin, Ethereum has been going down. Why is this?

Bitcoin is Outpacing Ethereum

I’m going to add my speculation – my guess is that Bitcoin will continue to move up faster than Ethereum or litecoin for the foreseeable future. Don’t be a fool and trade on my opinion.

  1. Ethereum is “all about the ICO’s”. ICO’s creating selling pressure as people buy tokens, and those tokens are transferred back into Ethereum and sold for fiat. That fiat is used by the “businesses” which issues the tokens. In my opinion this creates major selling pressure on Ethereum.
  2. Litecoin – I just don’t get why we need it. At least yet. This whole pitch of “its Bitcoins silver” makes no sense. Bitcoin is still in its infancy. Yes its the gold standard of crypto but is it really not meeting peoples needs at this point? Lets face it – Litecoin was created as a competitor to BTC and Bitcoin is kicking its @$$.
  3. No other ALT has created that “killer app” or that “must use” case. Therefore its all just speculation. Bitcoin is the household name when it comes to crypto and that’s where the money – the big money – is going to be flowing.
  4. I think the more Bitcoin outperforms the more investors will be running to it as opposed to the alts. However if Bitcoin tanks you can bet selling will happen in the alts. Inherently this boosts Bitcoin the best crypto bet.

Thats my analysis. Could be (probably) wrong, but hopefully thought provoking.

Pirate Bay Leverages Torrent Network to Mine Bitcoin – Thieves Not Happy

I have to hand it to Pirate Bay for thinking this scheme up. It makes sense for them. Hilariously the users of Pirate Bay are complaining. The people stealing digital content are unhappy they are being taxed.

Im also curious why Pirate bay wouldnt move to an ethereum model where users pay in ether what they download. Seems more inline with what they are doing versus bitcoin mining. Maybe thats stage two.

When it comes to the Pirate Bay, it’s usually movie studios, music producers and software creators that get annoyed with the site — you know, copyright and all that. But in an interesting twist it is now users who find themselves irked by — and disappointed in — the most famous torrent site in the world.

So what’s happened? Out of the blue, the Pirate Bay has added a Javascript-powered Bitcoin miner to the site. Nestling in the code of the site is an embedded cryptocurrency miner from Coinhive. Users who have noticed an increase in resource usage on their computers as a result of this are not happy.

The issue is a very new one, with users only noticing a CPU spike starting later on in the day yesterday. Needless to say, the reaction has not been good — even from the Pirate Bay’s own moderators. Over on Reddit, there are complaints about “100% CPU on all 8 threads while visiting TPB,” and there are also threads on the PirateBay Forum.

As noted by TorrentFreak, a quick delve into the HTML of the PirateBay reveals what’s going on.

An administrator and “supermod” on the PirateBay Forum, Sid is far from impressed:

ffs [That’s addressed to Winston not you lot.]

That really is serious, so hopefully we can get some action on it quickly. And perhaps get some attention for the uploading and commenting bugs while they’re at it.

He offers the following advice for anyone concerned about the latest addition:

Until it is fixed (and I would expect it to be fixed sooner rather than later) noscript will block it from running, as will disabling javascript.

Blocking/disabling javascript will compromise site functionality in several ways:

– scrolling back though pages of comments won’t work

– posting comments won’t be possible

– viewing the file list won’t work

The website for the Javascript miner even recommends against doing what the Pirate Bay is doing — that is, sneaking the miner in under the radar without telling anyone:

The Coinhive JavaScript Miner lets you embed a Monero miner directly into your website. The miner itself does not come with a UI — it’s your responsibility to tell your users what’s going on and to provide stats on mined hashes.

While it’s possible to run the miner without informing your users, we strongly advise against it. You know this. Long term goodwill of your users is much more important than any short term profits.