Another week, and another roller coaster ride with cryptocurrencies. Ethereum is up 3000% in 2017 and looks like it could just be getting started. Every day we seem to see another launch of a new ICO coming out of the Ethereum ecosystem. Some of the reasons for this meteoric rise according to the article, are the founding of the Enterprise Ethereum Alliance (EEA). Another is the meeting between the founder of Ethereum and Vladimir Putin which I linked to last week. One more is of course the recent flood of new Initial Coin Offerings (ICO). Lastly, they mention demand coming out of South Korea. At the time of this writing 1 ETH = $374.
In my opinion, the biggest contributer to the ETH price hike are all of the ICOs. This is why Ethereum is up 3000% in 2017 and will most likely continue to rise. Just like with Bitcoin having the first mover and network effect advantage over clones and competitors, Ethereum I believe will have staying power much the same. There will be competitors to Ethereum in this space, but Ethereum was the 1st and has the history now making it better over time, surviving some potentially fatal setbacks like the DAO and subsequent messy/political hardfork. People can say all they want about tokens not being as valueable as blockchain native cryptocurrencies like ETH and BTC but the value they are already bringing to the table is starting to prove just how they will change the world. This is why Ethereum is skyrocketing and this is why Ethereum is the Bitcoin of decentralized applications and/or tokenized smart contracts.
While Ethereum seems to be taking the elevator up, bitcoin is climbing up the stairs. Last night bitcoin breached the $3000 mark for the first time ever! While many might wonder why BTC is still going up pointing to blocks being full resulting in longer transaction times and higher fees, others like me suspect that demand for BTC will continue. First off, bitcoin or BTC is still a major gate keeper to purchasing or investing in other altcoins, especially non Ethereum tokens. Another reason is the need for a “stable” cryptocurrency of sorts for trading pairs with cryptocurrency traders. You see, for traders looking to trade cryptocurrcy pairs like BTC/ETC or BTC/FCT or any other BTC/x altcoin, they need a relatively stable coin to trade against with these extremely volatile new altcoins. When using only cryptocurrency pairs for trading there are generally less fees and tax events occurring which make this attractive for cryptocurrency traders. Tax laws regarding cryptocurrencies still seem to be dangerously ambiguous in most countries, so traders beware.
Coinbase suffers more outages as volume picks up during another across the board price correction. Prices fell sharply on Monday, June 12th. Bitcoin was down as much as 23% but recovered back to a loss of about 15% at the time of this writing. Many users of Coinbase took to reddit with their frustrations. This is very concerning after their latest round of funding netting them $100,000,000 and giving them a valuation of around 1 billion dollars. I personally lost out on a buying opportunity today because I was planning on using Coinbase to execute an exchange. At the very moment I went to initiate a buy order I got this screen stating that the site was down for maintenance. To be fair one should not be using Coinbase to execute trades but it just happened to be where I had some money today. I really hope they take some of that new funding and improve on their ability to stay up and running during massive volume.
The popular wallet service Jaxx received a lot of negative press today for what appears to be a very concerning security flaw. One user by the name of ChuckSRQ shared a screen shot with ETH address reporting that someone had stolen his funds off of his Jaxx wallet and moved them out of his control. Seems like a bit of a stretch for some to publish articles reporting $400,000 being stolen, and all we have is a screen shot from ChuckSRQ. I’m not saying it is false, but with such a claim, could we please get a little more evidence? In any case, the vulnerability seems real but does seem largely to be a desktop/laptop Jaxx application issue. I will continue to use Jaxx on my mobile device for now but at this time I would not recommend people use the desktop Jaxx.io application. Remember folks, if you want to store any large amount of coins, store them in cold storage like a paper wallet or hardware wallet. I can’t stress this enough.
Here are some projects of interest this week: Shapeshift.io has announced its new project named Prism. With this new platform you can create your own cryptocurrency portfolio without any need of a third party. This could revolutionize the traditional exchanges we have today. With Prism, you create a fully collateralized, smart contract on the Ethereum platform and store access to all your cryptocurrencies in one place. There will be no more need to store your coins on an exchange or even use a wallet with this service. Here is the beta if you want to test it. Here is a video so you can see what it looks like.
Another very similar project is coming from Mr. Joseph Poon, creator of the proposed Lightning Network. Mr. Poon is working on a startup called Omise where there motto is “unbanking the banked“. The Omise exchange will use tokens that the holders get to collect staking rewards. There will be an ICO for this project. With such a brilliant developer as Poon on this team, OmisGO might be worth a look.