Jamie Dimon’s company changes its mind

J.P. Morgan is considering whether to provide its clients access to CME’s new Bitcoin product through its futures-brokerage unit.

Oh Jamie…

The irony of the announcement, of course, is that Jamie Dimon has been the most outspoken critic of Bitcoin on Wall Street, calling it a ‘fraud’ and saying that anyone who invests in Bitcoin is ‘stupid’. Dimon also said he would fire anyone caught investing in it – a promise which he has yet to fulfill.

The strongly negative leanings of some Wall Street pundits have been matched by the positive outlooks from others. However, whether Jamie gets in or not, Bitcoin futures will likely become a reality in early December, powerfully increasing adoption.

So guess what? Like Bill Gates who famously didn’t get the internet to start with, as ever the smart people realise when they have to change their minds.

As a result, wealth managers around the world are being bombarded by Bitcoin requests, according to a new report by Bloomberg. The spectacular rise in value of the cryptocurrency has caused a run on the investment, with a huge number of investors seeking positions in the new asset class.

Mainstream adoption for Bitcoin, which until this year was still widely considered a black market currency, has grown at remarkable rates. The explosive price increases have led to new vehicles for investment such as Bitcoin futures on the Chicago Mercantile Exchange (CME) and others.

There’s a statistic I like about Bitcoin. There will only ever be 21 million. And as of right now, there are 35 million millionaires in the world. In other words, not every millionaire can have a Bitcoin. In any event saying you have .1 of a Bitcoin doesn’t mean anything to anyone (even though it’s worth about £650). How much better to say, “Hey, you know what? I have 45,000 Scotcoin!” That MEANS something.

bitcoin cryptocurrency

What will shape future demand for Cryptocurrencies?

bitcoin cryptocurrencyIn the past year, we have seen an explosion in the value of the global cryptocurrency market. Bitcoin’s price has increased by 850%, Ethereum’s by 2900%; and the market capitalisation of the cryptocurrency market has increased from around $13 billion to over $200 billion. Such a rapid increase reflects uncertainty surrounding the value of global currencies and increasing faith among investors in cryptocurrencies as an investment vehicle. While financial institutions and regulators now accept that crypto is here to stay, future demand will depend on widespread adoption and the response of policymakers. Read more

Cryptocurrency FAQs

What is block chain and what is cryptocurrency? Is there a difference?

Blockchain is the enabling technology that underpins cryptocurrency. Cryptocurrency is money based on trust in cryptographic, mathematical proofs.

 

Why has block chain and cryptocurrency become so popular?

Crypto currencies are not inflationary. They are cheaper to transact and do not rely on third party involvement – it is straight peer to peer . Negative perceptions of future monetary trends have accelerated acceptance.

 

How many people are currently involved in cryptocurrency and will interest keep rising?

Approximately 16 million Bitcoin wallets and at least the same again in other crypto currencies. These figures are rising exponentially all the time. Interest will continue to rise as adoption and use continues to rise.

 

How safe is block chain?

Blockchain is based on incredibly complex cryptography. Mathematically it is safer than the chances of finding one specific grain of sand not just on earth but in the entire universe.

 

What is the difference between cryptocurrency and the money in my wallet?

The value of a crypto currency does not rely on issuance of money by governments or Central banks – hence no quantitative easing and falling value over time of your wallets content.

 

Will Cryptocurrency overtake money as we know it?

Indications are that it may eventually – growth will be exponential then explosive. Actual cash transactions are already disappearing fast.

 

What is an e-wallet?

A piece of software that allows you to transactyour crypto coins – it does NOT store them. A crypto wallet (e.g. freewallet.io) enables you to store and spend them.

 

Where can I spend my cryptocurrency?

Dell, Microsoft, Overstock, Expedia etc, all accept Bitcoin. Scotcoin will shortly be accepted in over 2000 places in UK. It was recently used to buy a flat.

 

How can I use my cryptocurrency?

With your crypto-wallet (e.g. freewallet.io)

 

Do I need to pay CGT on any gains made?

Yes HMRC treats any gains from any source in exactly the same way. Around 1000 people in the USA paid tax on their Bitcoin earnings last year.

 

Can I leave cryptocurrency in my Will?

Yes, make sure your beneficiaries get your pass phase(s) at the appropriate time. Lose the pass phrase and you lose the wallet and its contents. THERE IS NO RESET.

 

 

bitcoin vs scotcoin

Bitcoin versus Scotcoin

bitcoin vs scotcoinI’ve been busy recently with all the work going on in respect of our new private blockchain. Bitcoin of course has continued to rise (and may I say, I told you so every time it “crashed” it was going back up).

But the rise in Bitcoin has had a profound effect which is now changing the very nature of Bitcoin. The last two transactions I have wanted to do have resulted in a charge equivalent to nearly USD 5. That rules Bitcoin out as a currency, and certainly for any transaction less than around $1000. Your cup of coffee at $4 looks rather different when it becomes $9 by the time you pay for it.

Bitcoin transaction charges

How has this happened? It’s all a result of the continuing rise and success of Bitcoin. Not that long ago Bitcoin was way under $1000 – but let’s just take $1000 as the price. The other issue here is the sheer rise in the number of transactions over time – as Bitcoin has continued to soar in value, the absolute number of transactions has as well. The standard charge for a transaction in Bitcoin was (and is) 0.0005 Bitcoin. That equates to 0.50 cents per transaction at $1000 per Bitcoin. True you could pay a higher fee for a quicker transaction or a lower fee if you were not too bothered about when it was confirmed.

Now, with Bitcoin over $7000, although the standard charge is around $3.50, the problem is when you try to do this, the screen will tell you it will take 99 blocks to confirm. What? 99 blocks? That’s up to 17 hours – at least. Everyone wants it quicker so they pay 0.0006 or $4.20. That’s only 15 blocks. OK what about 0.0007, that’s $4.90, and should get you confirmed in 2 to 5 blocks. Great for Miners but absolute rubbish if you are a trader.

Beating Bitcoin charges – Scotcoin’s answer

Sadly, at the moment, Scotcoin has to suffer the same problem as we are part of the Counterparty protocol, running on the Bitcoin Blockchain. One of the reasons for changing to our own private blockchain is to get beyond this bottleneck. I’m not giving too much away to say we have tested transactions in mere seconds on our new blockchain and at a tiny fraction of the costs associated with Bitcoin. There’s still a long way to go to say that this will pertain at full scale capacity, but our transaction speed is already going to be a huge magnitude better than the 7 transactions per second on Bitcoin.

So please bear with us as we do our best to improve the world’s experience of digital currencies. We will get there and you will love it.