A question that many readers ask is “why do we need or want crypto currency – isn’t there already enough currencies in the world?“

Understanding some of the benefits of crypto currency (CC) in a world of fiat currency helps us to see why developers came up with it in the first place, and keep coming up with more and better CC’s.  Let’s start with some of the problems with fiat currencies:

A. Governments can print as much fiat currency as they want, and throughout history there are many examples of currencies that have been inflated to death.  There are two reasons this cannot be done with crypto currencies …

   1. there is an upper limit on the amount of each coin that can ever be made.  With Bitcoin this upper limit is set at 21 million – no inflation possible here.

   2. governments do not control the issue of crypto currencies.

B. Fiat currency transactions are all centralized, and we all have to trust that our bank teller, our cheque clearing house, our currency broker etc, will do their job honestly and fairly, and at a reasonable cost.  There are several examples where this trust has been violated, and thus, the desire for something better was created.

Here is an illustrative example of a clear violation of consumer trust.  Wells Fargo, a banking giant in the USA, created about 3.5 million ghost accounts so that they could charge customers for services they did not ask for or need.  The unwary customers who did not notice the unwanted extra accounts would continue to pay the fees, trusting that their bank was taking good care of them.  It was later discovered that Wells Fargo was also signing up customers for unwanted insurance policies and again charging customers for services they did not ask for.  This is fraud on a large scale, and here is what was learned … We Cannot Trust the “Trusted” Intermediaries.

We also see that financial institutions have been making record profits for a long time, levying transaction fees that generate large profits.  It’s not hard to see the need for a new technology to enable secure, reliable, cheap, and transparent transactions without the potential for manipulation and rip-offs by governments and large financial institutions.  All of this is what blockchain technology can bring to the realm of financial transactions.

The key difference is that current systems are “centralized”, whereas blockchain is “distributed”.  What really matters is that “trust” is 100% transparent in the distributed model.  Blockchain technology is based on a distributed ledger (a distributed database). It is distributed in the sense that there are complete copies of the whole database scattered all around the world.

In today’s world, almost all financial institutions, companies, governments, and individuals keep their records in a centralized database, usually with a centralized back-up of that one database.  You only get to see the parts of that data that concern you, and you must trust that “privacy policies” are strong and that data integrity standards are high. These centralized databases can be manipulated, records can be altered, hard drives can fail, data can be lost, and the records represent only one party’s view of any given transaction.

In the world of blockchain (distributed ledger technology), the opposite is true. The transactions recorded on the ledger represent a transaction that takes place between the parties involved, and is confirmed by the blockchain network via a consensus. This is “trust” on a LARGE scale.  Once a transaction is written to the ledger, it is immutable – it cannot be changed.  The details of each transaction are visible to everyone, but the identification of the individual parties is protected by the use of private keys.  Private Key owners can identify their own transactions in the ledger, but cannot determine the identity of the parties in any other transaction. The conceptual diagram below shows the difference between a centralized, a decentralized, and a distributed network.

Vive le difference !!

It wasn’t long ago that the LIBOR scandal uncovered that many of the most “trusted” financial institutions in the world were manipulating interest rates for their own benefit.  Banks like Barclays, Deutsche Bank, JPMorgan Chase, UBS, Citigroup, Bank of America, and the Royal Bank of Scotland were found to be right in the middle of these manipulations.  The corruption and violations of trust are seemingly endless. Blockchain to the rescue !!

Crypto crash!

We have called the crypto sector the “wild west” and this past week was another great example of the volatility in this space. We saw how governments are paranoid about crypto currencies, as both China and South Korea expressed plans to clamp down, or even ban crypto currency trading.

The South Korean government officials warned that crypto currencies  encourage illicit behavior, such as money laundering, tax evasion, and gambling. It also stated that it needed to protect these investors from losing their money.

South Korea is one of the largest crypto currency traders alongside the US and Japan, and the news of a ban set off panic in the South Korean crypto markets. As we can see, the bitcoin price dropped from $14,444 to $9,477 before recovering some of the losses and trading at $11,275 at the time of this writing.

But it turns out South Korea is still evaluating the situation and has not made a decision. It is expected to deliver a decision sometime next week.

The threat of a ban has caused quite an uproar from the masses. As of today, an online petition on the website of the presidential Blue House had drawn more than 221,000 signatures opposing the move. Heavy internet traffic briefly crashed the site.

While we welcome a proper regulated oversight, we are not of the belief that politicians and bureaucrats are better qualified to tell the people what they can or cannot do with their hard earned money.

This “wild west” show is going to remain volatile for quite a while. For those who do wish to invest in crypto currencies, this volatility just gave them another opportunity to get in at much lower prices.

If you are ready to make a speculative investment into this disruptive technology, and want to receive all current and future recommendations from Crypto TREND Premium, we are keeping our Early Bird Special offer open for a little longer, to give our readers the opportunity to get started at a $175 discount. To take advantage of this special offer, click here.

Stay tuned!

Here is a question that comes up often:  How do I choose which crypto currency to invest in – aren’t they all the same ?

There is no doubt that Bitcoin has captured the lion’s share of the crypto currency (CC) market, and that is largely due to its FAME.  This phenomenon is much like what is happening in national politics around the world, where a candidate captures the majority of votes based on FAME, rather than any proven abilities or qualifications to govern a nation.  At Crypto Trend we acknowledge Bitcoin’s FAME, which in many ways is well earned.  Bitcoin is the pioneer in this market space and continues to garner almost all of the market headlines.  This FAME does not mean that it is perfect for the job, and it is fairly well known that Bitcoin has limitations and problems that need to be resolved, however, there is disagreement in the Bitcoin world on how best to resolve the problems.  As the problems fester, there is ongoing opportunity for developers to initiate new coins that address particular situations, and thus distinguish themselves from the approximately 1300 other coins in this market space. Let’s look at two Bitcoin rivals and explore how they differ from Bitcoin, and from each other:

Ethereum (ETH) – The Ethereum coin is known as ETHER.  The main difference from Bitcoin is that Ethereum uses “smart contracts” which are account holding objects on the Ethereum blockchain.  Smart Contracts are defined by their creators and they can interact with other contracts, make decisions, store data, and send ETHER to others.  The execution and services they offer are provided by the Ethereum network, all of which is beyond what the Bitcoin or any other blockchain network can do.  Smart Contracts can act as your autonomous agent, obeying your instructions and rules for spending currency and initiating other transactions on the Ethereum network.

Ripple (XRP) – This coin and the Ripple network also have unique features that make it much more than just a digital currency like Bitcoin.  Ripple has developed the Ripple Transaction Protocol (RTXP), a powerful financial tool that allows exchanges on the Ripple network to transfer funds quickly and efficiently. The basic idea is to place money in “gateways” where only those who know the password can unlock the funds.  For financial institutions this opens up huge possibilities, as it simplifies cross-border payments, reduces costs, and provides transparency and security.  This is all done with creative and intelligent use of blockchain technology.

At Crypto Trend we strive to provide you with up to date and useful information in the quest to understand this new world of crypto currencies.  The mainstream media is covering this market with breaking news stories almost every day, however, there is little depth to their stories … they are mostly just dramatic headlines.

The Wild West Crypto show continues…

The 5 stocks crypto/blockchain picks are up an average of 109% since December 11/17. The wild swings continue with daily gyrations. Yesterday we had South Korea and China the latest to try to shoot down the boom in cryptocurrencies.

On Thursday, South Korea’s justice minister, Park Sang-ki, sent global bitcoin prices temporarily plummeting and virtual coin markets into turmoil when he reportedly said regulators were preparing legislation to ban cryptocurrency trading. Later that same day, the South Korea Ministry of Strategy and Finance, one of the main member agencies of the South Korean government’s cryptocurrency regulation task force, came out and said that their department  does not agree with the premature statement of the Ministry of Justice about a potential cryptocurrency trading ban.

While the South Korean government says cryptocurrency trading is nothing more than gambling, and they are worried that the industry will leave many citizens in the poor house, their real concern is a loss of tax revenue. This is the same concern every government has.

China has grown into one of the world’s biggest sources of cryptocurrency mining, but now the government is rumoured to be looking into regulating the electric power used by the mining computers. Over 80% of the electrical power to mine Bitcoin today comes from China. By shutting down miners, the government would make it harder for Bitcoin users to verify transactions. Mining operations will move to other places, but China is particularly attractive due to very low electricity and land costs. If China follows through with this threat, there will be a temporary loss of mining capacity, which would result in Bitcoin users seeing longer timers and higher costs for transaction verification.

This wild ride will continue, and much like the internet boom, we will see some big winners, and eventually, some big losers. Also, similar to the internet boom, or the uranium boom, it is those who get in early who will prosper, while the mass investors always show up at the end, buying in at the top.

If you would like to step into this wild, but potentially very profitable sector, our Early Bird Special Offer is still available. We offer you Crypto TREND Premium at $175 off the regular rate of $699.95, so you pay only $525.00.

Click here to take advantage of this offer.

Stay Tuned!

Stay Tuned!