What is all the fuss about Bip148 and Segwit2x

appyFather's Day!

The Bitcoin scaling debate has been a hot topic for quite some time now and has been very present on all social media, youtube and every crypto forum out there, so let’s have a quick recoup on the key points that have been discussed so far in the community so that we can decide what are our options and what to be aware of.

First, let me outline where the problem lies and why we are facing a forking.
For quite some time now the Blockchain backlog of transactions is overwhelmingly large, at times exceeding 100 000 pending transactions, often waiting for days to receive confirmations and be completed. This results in a bidding-style competition between users, all trying to speed up their pending process and many choose to pay higher fees in order to “jump the queue”. Over the last year alone have seen the fees rise from $0.12 to $0.30, $0.70 and all the way up to $2.30 (and a number of reports point to a whopping $10 per transaction recently), something that threatens the user-adoption of Bitcoin as a currency and subsequently its future growth. One of its key USPs was cheaper and faster cross-border transacting but with the advance of the Alt Coins industry the usability dominance is seriously threatened in the longer term. The alts are out in full force and it’s only a matter of time until one or more of them take advantage in that area. If Bitcoin is to keep its place as the dominant crypto for both store of value and means of transacting, it needs to scale-up. Currently the size of each block is just 1MB and it has been so since the early days of its conception when the network was nowhere near the size it is today.

So, with that in mind, there have been a number of different proposals addressing the scaling issue but because of the decentralized nature of Bitcoin, it has been quite a challenge to implement any of them yet.

In 2015 one of the key Bitcoin developers Pieter Willier found a way to “squeeze”  more transactions into a block by reducing some of the data that is being attached to each transaction and this became known as the Segregated Witness proposal. The way it works is by removing some signature data from the transactions hash. The data is not lost or omitted, but the way it is counted in a way that It essentially introduces a new transaction format, thus freeing more space on the blocks and resulting in bigger number of transactions being recorded on each block. Segwit and the subsequent proposals that were building upon it, was first designed as a hard fork but later it was decided to be implemented as a soft fork which would allow backward-compatibility. However, the users community and the miners haven’t been very unanimous about it to date and the amount of nodes signalling for Segwit has not reached the necessary majority in order for it to be activated.

Back in November last year (2016) a proposal (BUIP) for a bigger block size started gathering a growing community of miners and later that became known as the Bitcoin Unlimited camp. Their proposal is for a bigger block size that can be determined by the needs of the network and allows for a gradual upgrade of the block size over time. It has been a popular proposal with a number of influential figures in the industry – Roger Ver of Bitcoin.com but it also did not capture a majority of the nodes and it was met with a strong resistance by the Bitcoin Core team which created a divide in the community.

Overall, it seems that Segwit became the popular choice among both users and developers alike. Only the miners so far have resisted it and because the Bitcoin network requires that 95% of the nodes signal for Segwit before it can be activated under the previous proposal (BIP141) we haven’t yet seen it coming into effect.

And here comes BIP148 – a UASF (user-activated soft fork) which calls for Segwit to be activated by Aug 1st. This is the first proposal that sets a fixed date with such a short notice and it will in effect cause a hard fork. It will exclude any nodes that are not signalling for Segwit and their blocks will not be added to the Blockchain thus splitting the chain to Segwit-activated and non-Segwit activated nodes. This is why BIP148 has been making waves in the community and causing a panic among users and miners on both ends of the argument.

The big fuss is mainly due to the fact that in a case of a hard fork, the chain is split into two separate divisions and the question will be which one will become the dominant chain. The one that attracts the majority of the nodes and users, therefore will become the longest and with the most hashing power and ultimately winning the race. This would mean a temporary price devaluation and great uncertainty in the market which inevitably will cause many losses and panic selling… all events that are not in the miners or users’ best interest. This is why BIP148 is in my opinion not the best solution. Segwit was intended as a Soft fork, one that will allow nodes to upgrade over time and was backward compatible, while BIP148 is calling for a hard fork by definition.

So far, it seems that Segwit itself is not the issue. Most of the community agree that Segwit is going to be beneficial and want to see it happen. The part they still disagree on is the block size. Many are calling for a bigger block size and this was precisely the focus on the latest proposal that was discussed at last month’s Consensus 2017 – where a compromise proposal came into light, now known as SEGWIT2X .

Segwit2x is possibly the best scenario, at least in my eyes. It combines activation of Segwit with a larger block size (twice the size of today’s 1MB) and it comes as a bolder and widely agreed-on project that aims to be implemented by July 21-24th which is a bit too close and to many it seems unrealistic. I for one prefer to see this happen and with as little truce as possible. We have already seen Bitcoin and the overall crypto market suffer 15-20% price correction in this last week, so the sooner we get over the Segwit debate, the better.

In the mean time, make sure you hold your Bitcoin in a safe place, most importantly, a wallet that gives you control over your private keys and hope for a quick passing of the storm. Even if the chain is to split, it will not be long till we find out which of the two is the more popular fork is and if it doesn’t split… then be ready for a quick price jump too. It can go either way, so watch the news and the forums daily and may the force be with you 😉

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Alt Coins – which ones to buy?

ALT COIN (2).pngIf you are a first-time buyer of crypto currencies you will probably ask this question. I get this in my inbox at least once a day lately, so I decided to write this blog and give you my piece of mind on this subject.

There is a big difference between choosing a crypto from an investor point of view to choosing it as a trader.

With trading you will be looking at charts and base your selection on trends, performance and price catalyst factors so that will be a topic of a whole other post. This time I will focus on the more passive investment approach, something that most people seem to be aiming for.

Trading is not an easy skill to master and it is extremely time-consuming, so I entered that marketplace as an investor first and later tapped into the trading world.

So, how do you pick the right crypto currencies to buy and hold?

The obvious start is with Bitcoin – the big daddy of the crypto world. The most valuable, most usable of all, most sought-after and so on.. you get the idea. As far as safety goes, the long term potential for growth is definitely high here.

So, what next?

  • Look for VOLUME

    Big volume means big capital is invested already, that also means popularity, usability, which basically tells us that the project is having a good potential for growth and longevity. Nothing is guaranteed and we are yet to find out how many of the current 1000+ crypto currencies are going to hang around for longer, but the ones that have a lot of volume are those with the highest chances at achieving that. The best place to find out how these compare by volume is to go to  https://coinmarketcap.com where you will see their quick stats and you can arrange them in order by a few indicators, volume being the default one.

  • Look for USP [unique selling point]

    Bitcoin is a crypto currency and so are most crypto coins. Some are application specific while some are purely crypto coins. Look out for those that are innovative. Those that offer something new, an improvement of sorts or something really different, are the ones with potential.

  • Look for popularity and media presence.

    If a crypto is talked about, if it has media coverage, a strong, identifiable brand, this would mean it is already quite popular and that also drives the price up. If a crypto makes it to the mainstream [or at least semi-mainstream] that brings a lot of new buyers, thus with a growing demand you can expect a jump in value.

  • Research thoroughly.

    There are so many sources these days, facebook groups, twitter, slackchats, telegram groups, forums [reddit, bitcointalk and more]… and of course each crypto currency is a project of a kind and as such they have their own website. Make sure you check out their website, read their white paper, check their development team and current+upcoming projects, what is the future plan for this project, is there a long-term vision and where does it lead to… these are just some of the criteria you should consider in your research.

  • Gather public opinion.

    Aside from the forums, where you will be getting a lot of public opinion from the users and fans or haters of the project, try to also find just general public opinion, through facebook and other social media that is not saturated with crypto fans, try to find what the average Joe knows and if they get excited about it, that would be another good indicator that the price will rise with time as the project/coin becomes more and more popular.

  • Did I mention RESEARCH?

    Yeah, I know. I just wanted to emphasize the importance of doing your own research and learning about the coins you are buying. After all, you wouldn’t  invest in stocks of a company without knowing enough about it, so same rule applies here. You must understand “why” and “if” your investment will bring you amazing return or not… You must also keep informed about any new development on the project that is supported by the coin, make sure that the development is not abandoned or any other internal or external factors that may change its course with time.

Where to start?

The most useful website for any crypto currency user is CoinMarketCap. This is where you can keep track on price, volume, ranking, popularity, performance and more. By default, the coins listed will be arranged by volume.

Another useful website that will facilitate your analysis is CryptoCompare which has a slightly more trading look and functionality.
To gather public opinion and feedback you can look into blogs, videos on youtube, twitter, telegram groups, facebook groups, steemIt network or slack chats which most crypto currencies have. Also check out these forums https://bitcointalk.org or reddit

Don’t forget to go to each project’s website. Many of the coins are only born out of a necessity to support the network and its developers so they will have a lot of information there to help you in your research.

For a start you should research each of the top 20 -30 coins. If you are going to be an investor, you might want to spread your capital and buy a few of these rather than go big on just one of them. Unless there is a strong reason for it, I would not advise to go big on any one coin because there might be a big potential in another coin that could surprise you. I bought Strat and Ripple very early on when I started and despite my passion for Dash or ETH, both Strat and Ripple gave me much more profit [at the time of writing this]. So even though I didn’t know much about Strat at first, the feedback I gathered about it pointed toward an uptrend [and that hasn’t stopped for the past 3 months now] and I’m looking at over 1000% profit from both XRP and STRAT. This is just an example. If I was a maximalist, I would have chosen Dash at the time, but today I am looking at 40% profit from it, which cannot compare to the performance of XRP and Strat.

This is why I would advise you to diversify and buy at least 10 of the top coins, the gain is always bigger than the losses [if any]. Doesn’t make sense? Let me elaborate.
Say you deposit 0.1 btc in Dash and 0.1btc in ETC [only hypothetical] and Dash plummets to -50% while ETC jumps by 100% [ which is very likely]. You will loose 0.05 but your gain would be 0.1 so you’re not loosing really. And what if you also had 0.1 in SC and that shoots up to 300% … you would have made 0.2 just from that so who cares about the 0.05 loss that Dash made… This is pretty much my strategy, except… I actually bought something like 30 coins in my first month and now my portfolio has grown to about 50. Only a quarter of them are long term for me, the rest are trading material.

 

 

What is an Alt Coin?

ALT COIN (1).pngAltcoin is a term given to all crypto currencies other than Bitcoin. It literally means alternate coin. Altcoins are alternative blockchains to Bitcoin, they use the same basic principals as Bitcoin but with some changes (e.g different mining algorithms or consensus rules etc…).

Most alt coins are forks on Bitcoin, some are built on the Bitcoin blockchain, others operate their own blockchains and offer diversity in functionality, innovation, niche-specific developments or just improvements on what is already there. For instance faster transacting, better privacy, easier coding or more popular and usable language (Bitcoin is built on C++ which is a computer language not very popular these days, while many of the new cryptos are written on Java or Microsoft’s .NET that attract vast communities of developers and freelances who work with these computer code languages).

Many alt coins are competing to be the next big success story but the market is already saturated and only a small percentage of the currently circulating cryptos are in fact worth looking into.

There are nearly 1000 crypto currencies currently in circulation and the ones that I am trading or investing in, are only the top 30 or so. The best way to find out how they perform is by going to https://coinmarketcap.com/ and see their current rating by volume.

But what really makes a cryto currency valuable and why some of these virtually unknown and brand new coins go up in price is determined by a series of factors outlined in my next post. But just before I leave you, please note that you should definitely avoid any crypto currency that involves heavy recruiting and is based on a deep multi level marketing system. The likes of Onecoin, Dascoin, Swisscoin, Scoin or The Billion Coin [TBC] are all in this category. These are not on the public exchanges and they only serve as community tokens system, therefore they are not easily spendable or tradable, if at all…

1 year anniversary in Video Marketing…

74b5530ce391564995cb338c55688334.jpgThis month [April] marks the first year anniversary since I started running my Youtube channel and I would like to take the time to reflect on my progress and share with you my journey.

I first tapped into network marketing some 10 years ago but at the time I was focused on my photography career and did not follow through with it. Fast forward to 2014, I had just found myself with a little bit of spare cash in my pocket and I decided to look for ways to invest my savings and grow my capital online. Somewhere late that year I found a website that offered pretty much what I was looking for: 120% return on investment (ROI) and a growing memberbase, I learned about Alexa rankings, compounding your earnings, becoming an affiliate, earning commissions, little by little I realised I have gotten myself into another network marketing business although I viewed it as an investment. For a long time I did not want to promote and refer people into it because my network was predominantly art creatives, fashion and design professionals who are in a completely different frequency to the world of network marketing. It took me about 9 months until I decided to take the first step and I started a blog. It was just a diary of my progress with that program, kind of a record of my progress and what I learned. Soon I was hooked into courses and webinars and live events, all the elements of the network marketing industry that set up the road which you’re taking. I tried a bit of affiliate marketing, quickly realised direct sales was not my thing, then I joined more revshares, some hyips, tried binary options, spread betting, looked into forex, didn’t think it’s for me tried product based MLMs, digital-based MLM, more revshares, then came the matrices, the cyclers, I even helped design a matrix-style peer-to-peer program back in October 2016 when my friends Lubos Hollan and Tousif Parvez reached out to me for advice while I was holidaying in the South Of France ( I was already making a very decent online passive income and I had my first major hack attack on my accounts during that trip so it will not be easily forgotten. I lost a few thousand dollars because of being naive and using the same password for everything. Big mistake). I was grateful that this happened when I was already making money online and not earlier when I was still loosing… I have to mention here that I started my online journey with an initial investment of $5000 and by the end of my first year I had lost all of it, so then I had to start afresh.

All in all, I went through a lot in just one year. I seemed to had it all figured out when the first business I was invested in came crumbling down, a month after that the second followed suit, another few weeks went by and the third also disappeared from the online space. I just kept looking for new opportunities. With each loss I learned a new lesson, I got better equipped for the next challenge and I started playing it safe, working with smaller amounts of seed money to minimise and spread out the risks. I also started being more selective and used my experience to warn others about the dangers and the obvious scams out there. At this point my marketing profile was growing and my audience too. I had achieved one of my goals. Having an audience and the real difference came just after that April when I started my videos. That happened last April, exactly a year ago when I joined a video challenge for a business that I had just added to my portfolio called Ford Ad Pays. We were a group of enthusiastic marketers learning to use the power of videos in online marketing. Each day we had a topic that we had to discuss in our videos and one day we had to talk about our goals and this is a video that I am referring to here in my post below. I was in London last week to meet with the directors of a company that I just added to my business portfolio and I took the time to visit my old street, where I was living at the time when I started this online journey and I am proud to say that the tasks I laid out in my video exactly 1 year ago have now been achieved and mainly my re-location plan. I had just decided to try and move to Spain when I recorded this video and at the time it seemed like a distant thought, nothing too serious, just something I would like to be able to do. Well, I am really happy to say, I am writing this post from my new home, in Barcelona, Spain, I moved here just three months ago and it’s the place I asked for exactly one year ago. Target achieved. I am living the laptop lifestyle, making 100% of my income online, no more physical work, I am my own boss. Dreams do come true. If you work hard and keep believing in yourself you can achieve your goals but you need to be consistent and have a plan. Establish some discipline and routine and stick to your targets. Here’s my video message, keep working hard and don’t give up, no matter how hard it gets. Persistence will prevail.

Bitcoin Forking Simplified

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There has been a lot of noise lately in the media and on all social media about the possible Bitcoin hard fork, some say it will be a soft fork, others are calling for no fork whatsoever…but what the heck is this all about and why all the panic?

The problem Bitcoin faces right now is one of scale-ability. The current block size is limited to 1MB – a cautionary measure implemented early on in the Bitcoin development after the blockchain suffered numerous hacking attacks. This was supposed to be a temporary limit on the block size but it was never lifted and we now face a big backlog on transactions, some days amounting to 100 000+  pending transactions for hours on end. Which in effect brings the fees up with many companies allowing their customers to pay higher fees and speed up their transactions processing. Currently, the daily revenue of fees on Bitcoin transactions is $350 000. Each day….

At the same time there are new coins, most of which are soft forks on Bitcoin in a way and offer improvements like instant-pay [by DASH] or higher privacy [Zcash, PIVX] or superior blockchain [Ethereum].

Many argue that if Bitcoin is to stay the dominant crypto currency, it has to be able to evolve and rise to the challenges of the times. The debate about the possible forking is not new, but it was reignited in December last year [2016] when the news about Bitcoin Unlimited began circulating.

What exactly is a Fork?

Forking is used as a term to describe a split in the system.  In simple terms, we see a proposal of a diversion from the current software that will enable size blocks to . There are two ways to do this.

“Hard Fork”is a permanent change in the block chain, where only the new software is accepted in the network. It means that every node – miners, merchants and users – has to upgrade to be able to validate the new blocks. Old nodes will not be able to validate new blocks. This will cause a split in the blockchain [version A and version B].

“Soft fork” does not cause a split in two blockchains because it is backwards-compatible and self-correcting in that only a majority of miners need to update to the new consensus rules. Old nodes will then see the new blocks as valid.

SegWit [ Segregated Witness] is one solution proposed for upgrading the block size to 2MB without the need to split the blockchain and it’s effectively a soft fork. This is not met with agreement by all miners unfortunately as some are in support of a bigger scale-ability of the blocks.

In the occurrence of a “Hard Fork” the result will be two development groups which is a split into:

  • Bitcoin Core [the current network]
  • Bitcoin Unlimited [the new version of the network with up-scaled block size].

BTC Vs BTU

Bitcoin Core [BTC] is the current version of Bitcoin that we know and use. It supports 1MB blocks and has the ability to support SegWit but does not agree with proposed upgrades by BTU

Bitcoin Unlimited [BTU] is a group of miners who propose a change in the software that allows for greater size of the blocks to be determined by market demand [and accepted by consensus of the miners]. The change is, however, incompatible with the current Bitcoin software and would therefore create a “new coin,” while carrying over the entire transaction history of the currency. BTU was developed by software engineer Andrew Stone and is supported by a minority but headed strongly by one of the biggest Bitcoin PR faces – Roger Ver, CEO of Bitcoin.com

Under normal circumstances, a change of rules would only occur if the whole network would agree on the new rules. Only one coin would emerge, causing no problem. However, as this split is caused by the very disagreement on the rules, initiated by Bitcoin Unlimited, it is very unlikely that Bitcoin Core would give in and would move to Unlimited.

If more than 51% of the nodes agree on the changes proposed by BTU, a hard fork will be possible and there would be two coins, each adhering to their own rules and the public opinion is that BTU forming as an Alt Coin. Many Alt Coins are just different versions of Bitcoin. My research shows that BTU is not very well-received in the Bitcoin community and most people would prefer that a split did not happen.

How would this affect us?

At times of uncertainty we usually see a price-dip and this is already quite noticeable this week. Bitcoin is currently standing at $950-970 per coin, down from $1200 in February. In the short term this is expected and it could be a trend that will last for a few more weeks. As soon as we see the end of this debate or at least some stability in the market, we will expect a recovery and some readjustment back to the higher numbers. Many speculators will take advantage of this lower price and the media hype that surrounds this topic only feeds the panic that causes a big dump at the exchanges which will make those buyers very happy. Some are diversifying their holdings with Alt Coins, others prefer to convert to USD for a short time and buy Bitcoin at a lower rate.

If you are not an active trader but holding Bitcoin for longer term, I would advise to just do nothing. Hold it but make sure you are using a cold storage. [like Ledger or Trezor] so you are the owner of your private keys. This way you can benefit from the choice of what version you will use in the future while some vendors and wallet providers might only choose to work with one of the two versions. Trezor and Ledger both give this response to the question about the splitting of the blockchain:

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This might not be the case if you are holding your coins in an online wallet. Most cloud storage wallets might not offer a choice to customers, so we see warnings issued by Coinbase, Circle and other providers to their customers.


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Further reading:
http://www.coindesk.com/preparing-bitcoin-hard-fork/
http://bitcoin.stackexchange.com/questions/30817/what-is-a-soft-fork
https://cointelegraph.com/news/bitcoin-hard-fork-will-be-felt-deeper-than-ethereums-experts
https://blog.coinbase.com/update-for-customers-with-bitcoin-stored-on-coinbase-904dea08ac5f#.khru1mle3
https://arstechnica.com/business/2015/08/op-ed-why-is-bitcoin-forking/
https://blog.trezor.io/contingency-plan-bitcoin-hard-fork-b6ce85cde028#.s2g11vixi

Bitcoin ETF rejected today. Price dips by 15%

Bitcoin had been soaring in recent days on the anticipation of a ruling by the SEC on the listing of a bitcoin backed ETF. It jumped to $1279.00 in the last hour before the result was announced. Then moments later it was down to $1150.00 and later reached as low as $1060.00

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The event today was an important ruling by the U.S. Securities and Exchange Commission (SEC) that rejected the proposed Winklevoss Bitcoin ETF [a trading exchange similar to Forex and the stock market]

The reason the ETF was not approved, according to the SEC, was because bitcoin is “too susceptible to fraud due to its unregulated nature.”

This is quite wry coming from the ultra-corrupt and anti-free market SEC. The market needs no regulation by an outside and violent entity (government) operating through the use of stolen funds (taxes) to manipulate, extort and attack people who do not pay enough bribes (political donations).

Bitcoin, in fact, is perfectly regulated the way it should be. By the blockchain itself. Bitcoin is 100% regulated by the blockchain which is a ledger system that is completely transparent, available to all, and unchangeable by any one entity.

In fact, “regulation” in and of itself is a tool used by branches of crime syndicates such as the SEC. Luckily, bitcoin cannot actually be regulated by the SEC, which makes it far more secure and less susceptible to manipulation and corruption.

Many in the bitcoin community were quite happy to hear that the SEC did not approve the ETF. Aside from not wanting the blessings of a corrupt, criminal entity they also said it limits the ability of some to manipulate the market, via shorting and other means that would be made easier via the ETF.

We now live in a very digital world. The largest population today is not China’s. It’s the internet. The largest economy in the world is not the United States. It’s the internet. The largest postal carrier is not the DHL, UPS or FEDEX. It’s the internet.

Bitcoin is internet’s money. It’s the defacto currency adopted by those on the internet. It has no state nor borders. No bank can control it. It’s not about “what country will adopt bitcoin first”. It’s about bitcoin not needing a country to exist.

That is what makes bitcoin so valuable. And, it is not going away anytime soon.

If you aren’t yet using Bitcoin, you are missing out on a very swift, easy and cheap way of transacting money. If you have not yet purchased any Bitcoin yet, you are missing on a massive earning potential. In the past year alone, the price of Bitcoin tripled, that’s 300% gain for those who had it already. In the coming year it will possibly reach around $2500-$3000 and then it will continue to rise due to its limited supply and ever increasing demand.

This is just a projection, but one that has been agreed and shared by almost every financial expert in the field. Make no mistake, Bitcoin is a must-have in any online entrepreneur’s portfolio. Don’t let it pass you by.

Bitcoin or Gold?

February 24th 2017 will be remembered as the day when Bitcoin finally reached that pivotal point of beating its own record price that was set back in 2014. With this came the inevitable question : Is Bitcoin better than Gold? A touch question if we talk about value in the long run, but I do have a very clear idea about its short term performance…

If you are looking to get your hands on some Bitcoin, my top choice for a beginner is dfinitely Coinbase – the biggest Bitcoin wallet and exchange. Here is my review and tutorial about Coinbase: