bitcoin

Money is Moving Faster. Time for you to Understand.

Posted on by Rand Preston
Image: CHUTTERSNAP

As the world move closer to widespread adoption of ISO 20022, the future standard for international transactions, what can we expect from the cryptocurrency world? For one, it is unlikely that major cryptocurrencies such as Bitcoin (BTC) will be used for conducting cross-border transactions. Not only is Bitcoin built on a proof-or-work consensus, but its transaction time is exceedingly slow compared to other projects in the fintech space. Bitcoin is also not currently an ISO 20022 compliant digital asset.

Of the thousands of cryptocurrencies in existence, the following currently comply with the ISO 20022 standard: (courtesy cryptopolitan.com)

One only needs to visit the ISO 20022 website to dive deeply in the guts of the project. Here, you can explore the many members of the standards committees across the five domains that the standard will address. The business domains are: payments, securities, cards and related retail financial services, foreign exchange, and trade services.

As far as the ISO standard’s syntax, the most widely used is eXtensible Mark-up Language (XML). This is not to be confused with the digital asset minted by Steller, the Lumen (XLM). The reason for using this syntax is simple, it is the most widely used method for encoding documents electronically.

Real Time Gross Settlement processing (RTGS) is speeding up the movement of money. It facilitates the electronic movement of money from bank to bank in seconds, settling out with near immediacy. This enhancement of transaction speed creates new levels of liquidity by freeing up funds that would otherwise be used as nostro/vostro or delayed settlement through old messaging systems, such as SWIFT MT. Follow this link to see a timeline of the adoption for ISO 20022 and RTGS across the globe.

Image Source: Compact

The ISO 20022 project is over a decade old and quickly approaching unilateral adoption across the global monetary system. Referring back to the five business practices gives you a good understanding of the impact that the world of finance will experience in the coming months. While many cryptocurrency projects are left seemingly unaffected, watch for the legal outcome of one particular company engaged in the global payment remittances sector, Ripple. While the US Securities Exchange Commission is trying to convince the legal system that the cryptocurrency XRP was sold as an unregistered security, the digital asset XRP does comply with the ISO 20022 standard and the company Ripple is on the ISO 20022 Payment Standards Evaluation Board as an expert for one of the five business practices: payments.

Best,

Rand

This is not investment advice. I am not an investment advisor. This is for entertainment and informational purposes. Consult a licensed financial advisor before trading.

How Fast is Money?

Posted on by Rand Preston

This will be a short one and really a question, at that. How fast is money? Why does that matter? What does it mean if it moves faster?

Money is an interesting idea. I think we can agree to that when we really stop and think about it. Over the centuries, it has taken on many forms: minted currencies, animal hides, jewelry, gold and silver, to good old “faith and credit.” It really boils down to a psychological acceptance of something that holds a value to receive something else in exchange.

That said, we believe in money. The United States has its dollar, the British kept their pound (says something about their feelings regarding the Euro), the Japanese have the Yen, and so on.

Money moves at a pace. Sometimes, longer than others. Likely for a reason that the average retail trader or average person doesn’t understand. It takes 3-5 business days for money to clear in a personal checking account. This is 2021 folks. We are purchasing tickets to fly Space X rockets and we have to wait 3-5 business days to get $100 in our checking account? I doubt the duration is the same for large institutions to move money from one to the other. Credit cards instantly record your spending, so why the delay in other applications? Money moves at different speeds.

Why does the speed of money movement matter? In the case of the retail end user, it matters the same as it does for the multi-national institution moving millions or billions of dollars. You want your money when you want it. The difference is, your $100 does not impact the economy the way $100 billion impacts the economy. We know that money can move at different speeds. It can post to your account instantly, but not clear immediately. It can be spent immediately at a store, or to pay a bill. It moves at different speeds when accounts are directly linked, you use a wire transfer, or deposit a paper check. Automation speeds up the movement of money. Digitalization facilitates faster than pen and paper.

If money moves faster, everything from your $100 check to a $100 billion transfer between banks, will effect global economies. If money, and I mean global money, in the realm of trillions in value can move and be utilized in seconds, rather than weeks, days, or even minutes, what kind of profound effect will that have? The United States has been issuing stimulus money over the course of the last year. (Disclosure: This is an exercise in the speed of moving money, not the politics of stimulus money.) We know that many people spend it as soon as it’s received. Reducing the time it takes to issue that money would effectively allow that money to be spent sooner, which in turn keeps money moving through the economy earlier than it did. This could be a game changer for a business that may close its doors if not enough customers came through their doors, or a mortgage payment was delayed because someone lost their job and was a month away from foreclosure.

All that said, if global money moved faster across all spectrums, what problems would that solve? How much does liquidity impact the different people, both linear and vertical in terms of value, across the financial spectrum? Does reducing the time it takes to move money from days or weeks to a matter of seconds mean something to you? I believe it does.

One such proponent of increasing liquidity is currently in a legal battle with the SEC. the outcome may be telling of which way finance is headed.

– Rand

All opinions are my own and should not be considered investment advice. I am doing this to provide entertainment.

Tweet = Control = Bitcoin Control?

Posted on by Rand Preston

Tweets from business leaders like Elon Musk reshape the landscape of assets like bitcoin in a matter of minutes. Be mindful, though. Elon is in the business of sustainable energy and mining bitcoin consumes massive amounts of energy.

Musk bought $1.5 billion worth of bitcoin only a short time before expressing that Tesla will no longer accept bitcoin for payment, pushing the price of bitcoin downward. If bitcoin mining operations in China were crippled by substantially lower the value of the cryptocurrency, it could pave the way for renewable energy companies like Tesla, controlled by Musk, to bring the operation to the United States.

Bitcoin miners need to have the asset at certain levels in order for the operation to be profitable, at least to break even. Each time bitcoin halves (May 2020), the value of the coin needs to appreciate in value for the operation to remain financially viable.

Gaining control in business sometimes requires making it no longer financially viable for a competitor to perform business operations. Digital assets is business, and big business at that. To give some perspective of where this decade old industry reaches today, we should include financial markets and institutions, energy, government regulators, consumers, and retail business across the globe. It is a world-wide part of the economy and to think it will not continue to progress is to be obtuse.

Musk, among other industry titans, have the opportunity to gain massive influence over the industry, and they know it. Post a “tweet” and sink the market? Effecting billions of dollars has never been so immediate. It also opens an opportunity to bring control of bitcoin mining operations to the United States amid a loosely defined regulatory period surrounding the cryptocurrency market.

Musk has a monumental opportunity to mine digital assets (those that require that activity) through renewable energy, rather than coal power currently deployed in other countries.

– Rand

All opinions are my own and should not be considered investment advice. I am doing this to provide entertainment.

#bitcoin #cryptocurrency #renewableenergy #elonmusk #bitcointweet #digitalasset

Surrounded by the Buzz of Bitcoin.

Posted on by Rand Preston

Bitcoin is the catch-all buzzword when it comes to most people talking about digital assets, and perhaps it deserves to be. It was the first one out of the gate to make huge headway in a new asset class. However, just as a copy is a copy and Xerox is a company that makes copy machines, though many people say, “make a Xerox,” we need to separate Bitcoin from being the all-encompassing digital asset.

Entry into this era of digital assets is a matter of timing, and that timing is left to you, the individual investor. My style of investing prefers to wait until investment vehicles, security, and regulatory actions are in place or close to becoming in place. It is a game of wait and see, hopefully having intelligently deduced what the final result will be that satisfies my objective.

I have been watching the regulatory environment, filed any crypto holdings or trades I had with my tax returns (because the IRS requires it), and heard from my bank that they “do not typically release funds to Coinbase.” Though they do eventually release the funds.

The average investor that wants to get in the digital asset market before the possible onslaught of major banking firms open the doors can look inside the United States.

For starters, Coinbase (San Francisco, CA), Uphold (Headquartered in Charleston, SC), Evercoin (Silicon Valley), and Bittrex (Seattle, WA) are US based firms that provide different investment vehicles and options for the digital asset investor.

Coinbase

A major digital currency exchange that allows for the deposit of $USD (fiat) from your bank account to a USD account within the Coinbase platform, or directly purchase Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), and Litecoin (LTC). The platform has been in the news recently as the Securities and Exchange Commission (SEC) and Wall Street have been gearing up for the digital asset revolution.

Uphold (Welcome to Uphold. The Internet of Money)

Feels more like a brick and mortar institution, in my opinion, for the digital currency space. To me, that is comforting. Here, you can buy and sell over 30 different assets that you can hold, exchange, or sell around the world. Currencies available for bank transfers include: US Dollar ($), Euro (€), British Pound (£), and Chinese Yuan (¥).
Uphold has also achieved the distinction of supplying a Cryptionary (like a dictionary) for users to facilitate an understanding of the language and buzzwords in the digital asset environment. This is an excellent tool and I suggest that you look at it to better familiarize yourself with the industry.

Evercoin

An exchange. Here, you can exchange currencies from one to another. For example, you want to exchange Litecoin from your Coinbase account to XRP that you hold in a digital or hard wallet, you can do it through Evercoin. Select the amount of one coin that you want to exchange for another and the application automatically sets the amount of the other coin you will receive. The exchange rate already includes all fees, so what you see is what you get. Very easy to use.

Bittrex

Has the look and feel of a professional trading platform and may be a bit scary for newcomers to the digital asset investment world. They are based in Seattle, WA and was founded by previous Microsoft security professionals. They host a massive number of cryptocurrencies with over 190 available.

Wallets: Hot and Cold

Hot wallets store your crypto on an internet enabled device. You also have the option of storing your assets directly on the exchange you are using, and should research the level of security, past breaches, and insurance coverage provided should a hack occur.
Cold wallets store your crypto offline. Currently, this is arguably the most secure way to store your digital assets. There are different manufactures of these devices and each device may NOT store the different digital assets that you are interested in purchasing. DO YOUR RESEARCH to learn which cold wallet will perform for your investment needs.

Examples:
Think of it like this:

HOT WALLET= connected to the internet (MultiBit, Armory (desktop wallets) MyCelium, CoPay (mobile wallets)
COLD WALLET= NOT connected to the internet (Trezor, Keepkey, Ledger Nano S)

All of the examples above; the exchanges, platforms, apps, and wallets have different user features, fees and account set up requirements. Be prepared to offer your personal identifying information in order the financial and banking regulatory rules be adhered to. These verifications vary from a copy of your driver’s license, to possibly more if you are a big investor. Do your own research and understand the risks associated, the assets you are interested in, and other details such as purchase and withdraw limits.

This post is meant to wrap your head around entering the digital asset investing world. There are many questions and regulations that need to be ironed out, and time will establish the system. My point is this; I believe that the digital asset is here to stay and where it took Amazon 20 years to reach its share price, the digital asset world will move more quickly. Technology and the digital world has become not only comfortable and familiar, but necessary. This is the next extension of the digital evolution.
I am not a financial advisor and you should perform your own research, due diligence, and obey tax and regulatory laws.

Best,

Rand

NOTE: As the domain name of this site suggests, the content my blog posts are opinion and not investment advice of any kind. Do your own research before making any decisions to invest (or not to invest). I am not a financial advisor. I am simply sharing information I gather from across the web, news, and media outlets and drawing my own possible conclusions.

The Noise can be Distracting

Posted on by Rand Preston

Just over ten years since the creation of Bitcoin, we have one of the most controversial presidents of modern times blasting the existence of Bitcoin publicly. Why would the president of the United States take time to cast opinion on something “based on thin air?”

One can only assume that cryptocurrency has been gaining traction behind the scenes and if the general public has just been brought into the loop from a political standpoint, you can be certain that the big players have already made substantial stakes and plans in the future of cryptocurrency. The confusion is being brought to the future retail investors and there is no better way to that than to politicize an effort.

Understand that the value of the US dollar is backed by the full faith and credit of the United States. It is no longer backed by physical gold. It is based on a form of psychological trust. This trust propels the economy and gets the honest person up in the morning to go out and make government backed money to support their living.

Honestly, it shows that if we really understood where the value of a dollar comes from, it should see magnificent swings in its value based on the majority party of any given election cycle, more so when a major change of party or leadership takes place.

Both the dollar and digital assets are based on trust in something. Albeit, one will not be hard pressed to find opposition of either asset class. Imagine the possibility of transferring trust from a politicized government backed currency to a system of checks and balances that resides on a global public ledger tracking all transactions without the ability to tamper. Take this notion even further and visualize a system of digital assets that improve and validate the flow of currency, real estate, contracts, goods and services globally in a regulatory framework that enhances transparency and accountability.

Let us see what October brings with various digital asset opportunities.

Best,

Rand

Words and opinions are my own. This is for entertainment purposes and to share my own opinions. This is not financial advice.

#digitalasset #cryptocurrency #digitalfuture

 

Cryptocurrency Investing is Surrounded by Powerful Information.

Posted on by Rand Preston

Let’s take a look at the hiring statistics for Coinbase:

Coinbase is arguably the fundamental route for cryptocurrency new-comers to get into the market. That is not to say that other options do not exist, perhaps even better options. Options that may spread more of the cryptocurrency universe at your fingertips or suite your particular style. Remember, Coinbase currently hosts only four currencies so far: Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), and Litecoin (LTC).

With the investment world still largely focused on technology firms such as Amazon and Apple, which have tremendous market capitalizations, expansion, and hiring trends, I think it wise to look at the growth of companies and industries surrounding the cryptocurrency market.

The hiring data from Coinbase as it is available on Linkedin.

Coinbase Hiring - Linkedin Stats

Certainly, we can look at this exponential growth as an indicator that this market segment is growing…quickly. In July of 2016, Coinbase employed just under 211. In two years’ time, they have grown at a rate of 170% to a current total of 570 employees.
As an investor looking for cues and educational instruments regarding the growth and stabilizing of an emerging market, employment data of leading companies in the sphere is a good place to start. This is not to say that it is the crystal ball, as we know that companies rise and fall with the times.

Let’s take a look at BlackRock.

This is a July 16, 2018 video clip from an interview with BlackRock’s Chairman and CEO, Larry Fink.

https://www.bloomberg.com/news/videos/2018-07-16/blackrock-s-fink-says-clients-aren-t-looking-to-buy-cryptocurrency-video

After being asked by Bloomberg interviewer Erik Schatzker, Mr. Fink says that none of his clients have expressed any interest in crypto. Meanwhile Schatzker states that Goldman Sachs, JP Morgan, and Morgan Stanley are building out crypto trading desks.
Mr. Fink again states that he has not heard from any clients that they want to be in crypto. You can develop your own conclusion about what he says, but I believe that he may not be showing all of his cards.

The Elephant in the Room: Insurance for Crypto Assets:

Bloomberg published an article recently uncovering the quite side of insurance for cryptocurrency storage. AIG, Chubb, XL, and Aon are a few of the tycoons quietly, and quickly, building their portfolios for insuring the cryptocurrency markets. Read the full article on Bloomberg.

Some quick market research on cryptocurrency topics show that this asset class is quickly becoming an allure to not only the original crew of techies, but to the financial institutions that our economies rely on.

The Final Take:

There is an incredible amount of information and misinformation to be found with regard to cryptocurrencies. From where I stand, I prefer to look at the digital asset’s underlying use case. Where is the news around not only the coin, but the institutions that play a part in making it available? Even then, some digital currencies exist today, that may not exist in the future. Regulators may come down with one fell swoop and knock some (or many) coins/ICOs/tokens out of existence.

If you are reading blogs such as this, you are obviously intrigued with the idea that the cryptocurrency market is ripe for the picking. It is my intrigue with this new asset class that has me writing this blog and providing the insights that I find.

Read. A lot.

I can tell you that with the onslaught of new cryptocurrencies and ICOs (Initial Coin Offerings), there are many bogus attempts to lure people’s money into worthless coin purchases. Look at the structure of the crypto asset and use your reasoning to determine which tokens you want to get into.

CoinMarketCap provides an extensive listing of available coins. Currently, there are 1,656 coins listed and prices range from fractions of a cent to thousands of dollars. However, not each of the coins listed is available through the same platform. In some cases, you need to discover an exchange method for purchasing a specific coin. This could very likely mean buying a token on a platform like Coinbase and exchanging that coin for another coin, which you hold in a wallet. This is a major reason why people are finding it difficult to get in the crypto currency asset pool.

The cryptocurrency market is global, but regulated differently by the country you reside in. You may be able to set up some accounts in one country that you are unable to use in another.

For example, DX.Exchange is an institutional and individual trading platform sitting on NASDAQ’s technology. Though NASDAQ is based in NYC, DX.Exchange is based in Estonia and will be regulated by the Estonia Financial Supervision Authority. The regulatory issues keeps the US usability of this platform at zero, as of now.

Best,

Rand

NOTE: As the domain name of this site suggests, the content my blog posts are opinion and not investment advice of any kind. Do your own research before making any decisions to invest (or not to invest). I am not a financial advisor. I am simply sharing information I gather from across the web, news, and media outlets and drawing my own possible conclusions. 

In the Bit-ginning…

Posted on by Rand Preston
Photo by Moose Photos from Pexels

When I first heard about cryptocurrency, I had a gut feeling that it would somehow become something big. The problem was, I was uncertain about how to get possession of it in late 2010, early 2011 when Bitcoin moved to around $1.00.

Fast forward six years when I asked a good friend of mine who works in the tech industry what he thought about Bitcoin, and he said, “I looked into it about 3-4 years ago, but never ended buying into it.” In late December of 2016 when this conversation was had, Bitcoin was around $800.

Even more of a stinger, when I finally learned how to set up for proper investing in the cryptocurrency market, Bitcoin had just touched $17,900…per coin. Hindsight being 20/20, it is the risk-reward scenario that both entices investors and leaves others sitting on the sidelines. The other aspect of sitting on the sidelines is lack of information.

Those that got on board early enough to realize a price swing of $17K in under ten years are the exception. The rest of the investor community can decide to educate themselves and develop an investment strategy early, get into the game late, or not at all. I say set realistic expectations, educate yourself, know your limits, and if you decided to get in the game, go long.

The fact is, in 2011, very few people knew how to enter the digital asset market. It was the wild-west of investing and it went square in the face of the regulated banking industry. Investment platforms were unknown, untested, and uncertain in the level of security they provided . Realistically, that was the perfect timing for a decentralized monetary system to come into the picture. Banks, big business, and governments across the world were sinking and when Bitcoin went live in 2008, it was making a statement in a huge way. A decentralized, peer-to-peer currency system. The belief in the banking system was at an all-time low and an opportunity to capitalize on the system’s failure was to be exploited.

We are ten years from the “Great Recession,” and have watched the stock markets rally to all-time highs. When the “whales” decide that they want to take their profits, the house of cards will fall swiftly. We have seen this with the meteoric rise and fall of crypto prices through 2017.

Simultaneously, we are witnessing the dawn of a new asset class: digital.
Remember how I said the early years of cryptocurrency were the wild-west and the digital asset community was standing square in the face of regulated banking? A decade later, we see a concerted effort to bring the digital asset community into the same system of regulation that fails at least once in a generation, if not more. That’s just how it goes. The US government is in play when it comes to the digital currency market with regulations, tax law, and policies. Many in the cryptocurrency world believe that a decentralized approach is best. Other minds see the regulating authorities as the appropriate method to bring economic stability

Fortunately, we are at the very beginning of instituting this new class of investment vehicles, and that can have long-term benefits. We may or may not see the hyper price increase that was seen with Bitcoin over the past ten years. Many would state that the prices were wildly manipulated to achieve such highs. Others, however, believe that we are just at the beginning and the coin market will see a “flippening” where Bitcoin (BTC) loses its current spot as the number one token. I suggest reading the following thoughts on the possibility of a Bitcoin ETF as the SEC prepares to approve or deny its listing in the next couple of months.

Best,

Rand

 

NOTE: As the domain name of this site suggests, the content my blog posts are opinion and not investment advice of any kind. Do your own research before making any decisions to invest (or not to invest). I am not a financial advisor. I am simply sharing information I gather from across the web, news, and media outlets and drawing my own possible conclusions.