The Skim -Circuit Breakers Trip-

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.

8 thoughts on “The Skim -Circuit Breakers Trip-

  1. Coinbase is developing quite the reputation for being unavailable during high volume. I also get their status texts and they frequently are down for little reason at all. This is really disappointing and I hope Charlie Lee can get it figured out soon.

    I’m not sure if maybe Gemini has better uptime in high volume. They will likely be my next try during high volume.

    • Yeah totally agree Bryan. Tried to set up an account with GDAX, but not available in my state. Also was gonna give Gemini a try. I wonder if they will allow BTC/USD trading because that is what I am looking for right now. I use Poloniex but no USD trading there, which is great for swapping weird alts but looking to make a little $$ on the volatility days. I also have an account with Bitfinex and I know they allow USD trading there but their wire transfers have been down for a while now, gonna have to experiment with these exchanges I guess.

      • I just used Bitsquare (http://bitsquare.io) for the first time last week and i’m a huge fan. A decentralized p2p exchange desktop software. The intro video says it all. Before I traded, I poked around on review sites and forums, and i couldn’t really find any dirt or really negative experiences so it seems pretty legit.

        • On ICO’s, as much of a fan I am of the concept, i’m definitely taking a leaf out of Andreas’ book, and taking caution with who I give my money to and how much. I won’t hurl a paycheck at a newly launched company the same way i would at Ethereum or Litecoin, not only because disproportionate amount of trust you give to the CEO’s, but also because as I understand it, newly created coins, including ERC20 standard tokens, are incredibly vulnerable to hacking, compared to Bitcoin, especially when there are several million dollars of value attached to them.

          Here are a couple links of AA talking about this:
          https://www.youtube.com/watch?v=Plu_WX3Gs8E
          https://www.youtube.com/watch?v=vdaW8NtJXuQ

          I’ll still hop in a bit if a new coin is at a low price and looks really promising, but in this action for me, the statement “don’t invest what you aren’t willing to lose” is emphasized many times over.

          • Yeah its crazy right now. Bancor ICO the other day raised 150 million in 3 hours. Its crazy when untested code and no product can rake in money like that. I give it 3 months or less and we will see another DAO hack given the size and scope of these honeypots. You are smart to be very careful with these things. They will get better over time, they will fix vulnerabilities but right now its sort of guinea pig time. That being said and knowing the risks there also will be some very cool projects as well. As someone who is getting into day/swing trading, there will be volatility and that is a welcomed thing when you are looking for a trade. I found myself feeling a little FOMO the other day and had to pump the brakes again, so much hype right now. Good time to stay calm and focused and try to stay out of fear and greed.

        • What did you trade Soren? Looks cool but needs more orders on the books to be very liquid looks like. I like that they use Tor, cool feature.

          • True, very limited options for buying/selling as of now, but there is the option to create an offer yourself. I bought about a half a bitcoin with usd, transferring with Chase quickpay / Clearxchange directly to the seller. Needless to say, I got a call from Chase asking all about it.

          • Nice! Hey I’m trying to amass some info on friendly/unfriendly banks with BTC right now. How has your BTC buying experience been with Chase?

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