What financial instruments are under development for Bitcoin?


I'm thinking here specifically of instruments that take a Bitcoin-like approach to trusted parties, eliminating them wherever possible and typically built with Bitcoin as their platform. (As opposed to simply having a real-world trusted entity issue a Bitcoin-containing or Bitcoin-related financial instrument in the traditional method).

Financial instruments include things like bonds, stocks, contracts, additional currencies, etc.

For example, I know jgarzik was working on smartcoin for a while (has development stopped?) and there are things like this you can do with coloured coins. Can anyone offer some insight on what is actually being developed re: these and other approaches, and especially what has reached an implemented, usable...

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Find answers to recurring questions and myths about Bitcoin.

Table of contents


What is Bitcoin?

Bitcoin is a consensus network that enables a new payment system and a completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet. Bitcoin can also be seen as the most prominent triple entry bookkeeping system in existence.

Bitcoin is the first implementation of a concept called "cryptocurrency", which was first described in 1998 by Wei Dai on the cypherpunks mailing list, suggesting the idea of a new form of money that uses cryptography to control its creation and transactions, rather than a central authority. The first Bitcoin specification and proof of concept was published in 2009 in a cryptography mailing list by Satoshi Nakamoto. Satoshi left the project in late 2010...

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There's been a lot of talk lately regarding Open-Transactions

as a "centralized system" (comparable to e-gold or MtGox.)

I wanted to clear up some of these misconceptions...

The vision is not of a central server you must trust.
Rather, the vision is of federated servers you don’t have to trust.

My goal with Open-Transactions is for the servers to be able to run on
anonymous networks.
For this to work, that means the users must be able to trust the system,
even if they do not trust the servers.

We must have LOW-TRUST SERVERS—and that is what I have been working
towards. The combination of low-trust technology with untraceable cash
is what will make it possible to run OT servers on anonymous networks,
at a profit.


Recent events have stimulated a lot of talk about security issues in Bitcoin,
specifically due to the use of centralized servers...

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If you want to know what bitcoin is worth, you can’t start with stars in your eyes. Check around on the Internet and you’ll find arguments that every single bitcoin already in existence (over 14 million of them) could be worth $1m. It’s that kind of price action which attracts speculators.

But it doesn’t do you any good to buy on the hype. You’re better off examining what has driven the price in the past. Then, you make sure you understand, from a financial perspective, what bitcoin actually is. Finally, you can look at some simple models that will tell you what bitcoin is actually worth.

Some say bitcoin is money. Others believe it is the new gold. You will hear my thoughts on both of those possibilities. You will also see how bitcoin behaves like a technology stock because it has created a network which is growing.

Creative destruction for money

If you have followed my last three pieces in Capital and Conflict, you will already know that I believe...

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As Bitcoin is set to post its first 3-day consecutive daily drop in nearly 4 months, digital currency traders will want to know more about the biggest potential development currently surrounding Bitcoin. The likely introduction of a “fork” -- a modification of the code aimed at addressing the need to scale Bitcoin blockchain network, is being widely discussed to address the issue of speed.

Soft Vs. Hard Fork

A “soft” fork would be a minor adjustment to the code, while a “hard” fork entails the splitting of the code, which would be a general update to the program. Either way, a fork – soft or hard – will impact value in the short term, yet needed in order for Bitcoin to survive as a currency.

A soft fork, also known as 'SegWit,' will not split the code, but it has fewer supporters as it would fail to effectively increase the block size (and transaction speed) as it would under a hard fork. Bitcoin insiders consider transaction speed as a major determinant of...

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2016 has brought more drama in the world of cryptocurrencies: the rise and the fall of The DAO, Ethereum’s controversial hard fork and subsequent emergence of Ethereum Classic, and the attack on Bitfinex, among others. Certainly, all of us would like to know what’s on the table now.

ForkLog is happy to shed some light on the future and proudly presents a fortune telling session with some prominent players of the cryptocommunity. Sharing their thoughts were Lasha Antadze, project manager of Ukraine’s biggest blockchain project Auction 3.0; Alex Fork, founder of Future Fintech and board member of Blockchain.Community; Andrei Zamovsky, Ambisafe CEO; Nestor Dubnevych, legal advisor at Juscutum; Anatoly Knyazev, executive director of online broker EXANTE; the entire Cyber.Fund team; and Marina Gurieva, the Head of Innovations at the Higher School of Economy.

Bitcoin Future

Many experts are sharing a common view that the cryptocurrency’s price is likely to grow...

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One of the easiest ways to profit from the Bitcoin craze is by trading binary options. Here’s what you need to know. There are two different ways to use your Bitcoins for binary options trading. The first is as a payment method at a standard binary options broker – you deposit your Bitcoins at the site and trade using the various assets. This is similar to playing at a Bitcoin casino – your Bitcoins are the currency and you trade/play in the same way as someone using USD or EUR as a deposit. The second method is trading Bitcoin as an asset. Several brokers offer this option as one of their many assets, while others deal solely in Bitcoin trading. Both types of broker are often referred to as a bitcoin binary options broker.

Top Bitcoin Binary Options Sites:

What are Binary Options

Also called digital options, a binary option is essentially a bet on whether a particular asset will increase or decrease in price. This is always for a...

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Bitcoin, the decentralized, peer-to-peer digital currency, has seen increasing attention and adoption over the past few years. While its growth is impressive, the technology underlying the system – the blockchain and mining effort to confirm and validate transactions on the blockchain – is potentially even more exciting and valuable than the currency. Bitcoin mining serves a dual purpose: it creates new bitcoins to increase the money supply and simultaneously secures and verifies the blockchain, which is a public ledger of every transaction.

While this functionality serves to keep internal bitcoin-bitcoin transactions valid, it can also be used to confirm and validate external, non-bitcoin specific transactions. In other words, this enables the application of decentralized public ledgers for purposes other than digital currencies. These applications are referred to as Bitcoin 2.0 or sometimes more generally "crypto 2.0.” In other instances, they are referred to as...

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Video transcript

But what I wanted to do in this video is talk about what a bitcoin is in more general terms and what differentiating characteristics they have compared to other approaches. So for starters, bitcoin is just an electronic payment system. By electronic payment system, I mean it's just a vehicle, a conduit, by which two parties can transact over the internet. I call these parties Alice and Bob. And let's say Alice for whatever reason wants to give money to Bob over the internet. And this may be because she owes Bob money, or maybe Bob is a merchant and Alice is buying something from Bob. Or maybe Bob is a not-for-profit, and Alice is making a donation to Bob. So there could be many reasons why Alice is trying to pay Bob over the internet in some capacity. Now, if Bob is willing to accept bitcoins, which are a form of electronic payments, then Alice can go ahead and send Bob some value in bitcoins. And really, a bitcoin transaction between Alice and Bob amounts...

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The financial world can be a confusing place full of strange terms, unusual forms of currency, and endless trading options. Unfortunately for those who are not so tech savvy, the integration of the internet into our daily lives has allowed the financial world to evolve. In addition to extensive banking, payment, and stock options that have become the norm online, there are also new currencies that have been created.

These cryptocurrencies, digital currencies with encryptions to maintain security and validity, feature a real value and can be exchanged for USD, GBP, or any other type of physical currency through online options.

The most popular type of virtual currency is known as Bitcoin and has steadily begun to rise in popularity and strength over the years. At first glance, Bitcoin may sound confusing, however below are ten facts that will truly explain in layman’s terms what exactly bitcoin is and how it came to be.

No one single entity controls this currency....
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Bitcoin and its underlying technology blockchain are game-changing technologies that are reshaping and revolutionizing the world economy. (1)

Often hidden behind the headlines of Bitcoin’s meteoric rise in market value and blockchain’s technological promise is a basic understanding of what these two technologies are and where they come from.

This brief article examines the digital currencies Bitcoin and Ethereum and introduces Blockchain, the technology that facilitates the digital transfer of value and much more.

Bitcoin: The Beginning?

“I think the internet is going to be one of the major forces for reducing the role of government. The one thing that’s missing, but that will soon be developed, is a reliable e-cash.” — Milton Friedman, ‘99’

In 2008, a person or group of people acting under the pseudonym Satoshi Nakamoto published a white paper titled Bitcoin: A Peer-to-Peer Electronic Cash System. The paper introduced a solution to two puzzling...

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The Usage of Bitcoin

Bitcoin has been around for almost a decade now, introduced back in 2008, the principal of Bitcoin being to remove intermediaries.

The U.S Treasury has identified bitcoin as a virtual currency, while it’s more commonly described as the first cryptocurrency and the largest of its kind by total market value, currently being $19.2bn.

The general consensus was that Bitcoin would take the world by storm, but we have yet to see the storm, which was also seen to uproot commercial banking as we know it today, a material decline in sticky bank depositors a negative for bank top line revenue.

As things stand, well-known companies that accept Bitcoin for payment include Amazon, Apple Expedia, Overstock, Subway, Reddit, Microsoft, Dell, Tesla, Bloomberg.com, Kmart, Sears, Gap, Victoria Secret.

Figures on Bitcoins are few and far between, but with over 100,000 merchants and vendors accepting bitcoin as payment, the numbers suggest that...

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To make outsized returns or avoid some nasty losses in investing, you have to go against the grain.

There are few people who live that principle more than Reggie Middleton, the CEO of fintech company Veritaseum.

On his independent research website BoomBustBlog, he called the demise of Bear Stearns, Lehman Brothers, and Blackberry maker Research in Motion, the subprime market, and a correction in Apple. Now Reggie is betting on bitcoin to become the infrastructure of our future financial system.

In this exclusive interview with Epoch Times, Mr. Middleton spoke about how bitcoin is more than digital money, and how he wants to revolutionize the way we trade stocks with Veritaseum.

Epoch Times: Bitcoin is a different market, independent from central banks. You have been active in the space for some time, can you explain to our readers what the digital currency is all about?

Reggie Middleton: Bitcoin is a protocol-based consensus network. Think of it...

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Panelists: Jeremy Almond is the CEO of PayStand, a business to business focused digital payment company. Jeremy started his career as an engineer at nanotech startup Digital Instruments, later acquired by Veeco (Nadaq: VECO). At Veeco he led the enterprise architecture, helping shrink massive computers down to devices that now fit in our pockets. Since then Jeremy has worked as an operator and investor at a number of startups & established companies to drive improvements in digital commerce, ERP, and payments. He holds a computer engineering degree from the University of California and masters from the University of Massachusetts, where he did his thesis on how technology can help drive positive change in a broken financial system.
Jae Kwon, Tendermint is a blockchain software architect and cryptoeconomist. After graduating from Cornell in 2005 with a B.S. degree in computer science, he worked as a professional programmer in Silicon Valley, including at Alexa/Amazon, and at...

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Download CryptoArbitrager inside this course!


Want to rest while your bitcoins work for you?

We are introducing CryptoArbitrager, a trading robot that allows you to profit from exchange rate differences between bitcoin and litecoin.

How does it work?

At cryptocurrency exchanges prices of bitcoin and litecoin rise and fall depending on many factors: laws, new vulnerabilities, politicians’ statements, rumors, and so on.

All this is very unpredictable, and will have different impacts on the rates. However, when all cryptocurrencies in general are becoming attractive for investment, prices are rising, and when demand declines—they fall. So there is cointegration and interdependence between the courses.

When cointegration appears, the rate of one cryptocurrency may respond differently to...

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Sponsored by: Newnote Financial (CSE: NEU)

The mainstream adoption of bitcoin has started to snowball and many financial institutions have taken note. In fact, the influence of bitcoin is so strong that a senior Central Bank of Ireland official has gone on record to state that, “virtual and digital currencies can challenge the sovereignty of states.” Equally as impressive, last month Google and Yahoo added the price of Bitcoin to their finance networks.

That said, what we have seen thus far is likely just the tip of the iceberg. Many VCs, including Marc Andreessen, believe the future of the blockchain and cryptocurrency to be extremely bright. Bitcoin and altcoins are empowering users by eliminating, or minimizing, many financial intermediaries. This has the potential to be a massive disruption and opportunity.

Bitcoin is P2P, decentralized, and open source. Hundreds of startups and entrepreneurs are finding new ways to build upon Bitcoin and blockchain...

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On November 1, 2008, a man calling himself Satoshi Nakamoto posted a research paper to an obscure online cryptography email list describing his design for a new digital currency.

No one had ever heard of him and it was obvious that it was a pseudonym. After the cryptography experts gave up on trying to find information about the anonymous poster, they realized he or she cracked a problem that stumped cryptographers for decades.

Nearly eight years later, the identity of the creator nay have been revealed as an Australian man facing tax charges, but by then it was just a footnote to the larger story.

The Bitcoin system – convenient, untraceable, open-sourced, and completely independent from government or bank oversight – mattered far more than its provenance.

One of the biggest challenges of designing a digital currency involves the "double-spending" problem, and bitcoin elegantly solves it.

If you are dealing with pure information, free from any...

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Poland’s deputy finance minister Wojciech Kowalczyk has released a document confirming that under the country’s existing financial regulations, bitcoin can be considered a financial instrument.

The statement follows a previous inquiry from Michal Pacholski, an opposition member of Parliament for the liberal Twoj Ruch (Your Movement) party. At the time, Pacholski asked Poland's Ministry of Finance to explain the legal status of bitcoin transactions. Specifically, his query focused on whether or not "options and futures contracts can be considered as a financial instrument" if they are denominated in a digital currency.

The Finance Ministry replied that bitcoin fits within that legal framework, stating:

“Options or futures contracts which are based on [bitcoin] as a base instrument can be considered as derivative instruments, and as such, they can be considered as financial instruments, according to the bill on financial instruments.”

Bitcoin's legal...

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