Tag Archives: bitcoin

Start-ups Take Two

Welcome to the future, again.

b2fMaybe it’s serendipity, things seem to be coming together for technical innovation these days. Maybe we’re experiencing the promise. Everywhere you look, literally, efficiency is being injected into our daily lives. Our PC and the internet in our pockets, in our cars, and at The Gap.

For those of us that lived through pets.com, boo.com, flooz.com, Napster, and the play by-play demise of these astronomically high valued companies on fuckedcompany.com, the ongoing optimism around  Twitter, Facebook, Bitcoin, Snapchat, and a myriad of others has taken me a bit by surprise. At the time (and for me personally) it was the tsunami of freshly minted marketing graduates descending on NYC that signaled the beginning of the end. The party was filling up with the uninvited. Time to cash out. Bye. France? Ok, why not. For those handing out the cash it was the start-up earnings that never came to the party. Time to apologize to our investors and move on.

This weeks Economist has a good piece on the whole start-up environment, it looks at funding, management styles, even the technology, which has evolved into something akin to a theoretical plug-and-play, or start-ups in a box. This time might be different they say, because the tools are available to create our craziest idea for next to nothing. The release cycle has turned into overnight – nothing ever leaves beta. In fact the cost of moving an idea into a fad like Snapchat takes place in the real world. That real world isn’t just Google or an internet site, it’s your phone, your car, your home, your entertainment and even your currency.

Andreesen’s op-ed piece in the New York Times, screaming Bitcoin is the future, reminds me of the excitement around mobile in 1999. Yes mobile. People forget that mobile was also all the rage even 15 years ago, very smart investors with vision and insight lost millions. They had to wait for the iPhone and the Apple’s app store to kick things off. The mobile promise has finally arrived,  open-source software is saving millions of dollars in development costs and today’s web 2.0 geeks are all enthusiastic about Bitcoin. And Marc Andreesen is probably right about virtual currencies,  but how’s his timing? Bitcoin is playing in a Keynesian sandbox full of politicians, central banks and federal governments. Napster pissed off A&M music, and lost. With Napster you could point the finger at three humans, Shawn Fanning, John Fanning and Sean Parker. There’s only the consumer to take to court with Bitcoin, and in it’s case, who will pay the lobbyists? Eventually the end-user is the only possible target as the Silk Road founder Ross Ulbricht can attest. The real question for Bitcoin believers is: will politicians and federal governments treat Bitcoin as financial terrorism? And who’s coming to the party?

*Update:  I just stumbled on Jamie Dimon’s comment  that Bitcoin is a terrible store of value… (here)

 

Bitcoin Parabolic

It’s hard for me to resist the Bitcoin story. A few months ago I calculated that mining Bitcoins would cost more than the electricity needed to run the mining computer (here).

Today that’s no longer the case. Look at this 5 day chart.

Bitcoin Surges

What should we make of this?

It’s starting to feel like 1999 – just different.

  • The S&P (and most indexes ) only climb
  • IPO Excitement – see TWTR
  • High School Kids Trade Forex and CFD’s
  • QE +++
  • Housing Bubble (This time is different)

Bitcoin is what makes this all extra amusing. The press has grown tired of the story. Why? I have no idea. I guess I’ll turn on the miner tonight…

Bitcoin Crashing

Time For Another Bitcoin Post – Down 40% in the last 2 hours

Bubble, no bubble? The markets are in rally mode and Bitcoin is tanking. I’m sure there’s no link, but still… MtGox is suffering under the weight and the exchange is having growing pains.

Bitcoin Crashing

So what’s a Bitcoiner to do? They just learned a few lessons, regular traders have been learning for decades.

  • What goes up goes down.
  • Weakness in the exchange creates a crisis of confidence.
  • Valuation is hard work.
  • Backstops limit volatility.

Good luck bitcoiner, cupcakes just got cheaper.

 

cool avatar

Bitcoin Virtuality – Who Owns My Avatar?

cool avatarVirtual objects, virtual pets, virtual lives have been common gaming currency since the inception of MUDs and MMORPGs (massively multi player online role-playing games). Virtual property has been around for even longer. But, who owns my avatar? In 1999 Linden Lab’s were on to something, when Second Life recognised a gamer’s intellectual property. They even invented Linden Dollars. Warcraft in 2004, Flyff, and dozens of other games have created virtual economies by exchanging virtual goods in the context of a ‘game’.

Avatar chasers, lawyers, the tax man and gambling regulators have been observing these economies for over 10 years, yet rest well behind the curve. And the secondary market for virtual objects within the context of these games has been largely ignored. If you can’t transfer your objects to other players for a fee, it seems you’re safe from big brother, but that’s no fun. Where are my bragging rights? On the other hand if you start selling what you earned, things start to look more like commerce/gambling. Still the secondary markets for virtual game currency is alive and well. Do a search for World of Warcraft Gold. It looks like I can get 10000G for about $10 in 5-15 minutes (I’m not sure why the time element is important). The site I’m looking at even as live 24/24 help in 4 languages.

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Market Sentiment Like We’ve “Never” Seen It

In 1985 I graduated High School, in what at the time, I considered the sticks. In truth suburban Cincinnati wasn’t so far from London, New York, or Paris. Ask Nolwenn Leroy, all types of interesting people pass through Cincinnati.

Me

I’ve found myself in the sticks again, I’ve left Paris for some fresh air and space. I’ve moved to a charming valley, called the Vallée de l’Eure. This change after living in Cincinnati, New York, London, and Paris is refreshing, and exciting. The trading strategies I employ have nothing to do with the stress and noise of Paris, I’m hoping to be more effective here. For those of you who have followed this blog, you’ve seen what’s probably a classic novice trader’s chemin. My interests over the last year have focused on index futures, and option hedges. This year I’ll continue with these products.

A lot has been happening since I last spent a few hours ranting here on Brandnet and I have so many ideas bouncing around in my head that this first post of March risks being incomprehensible, beware.

Here are some of the contradictions that get me thinking:

  • Europe, and it’s place in the world economy – for that matter in my economy…
    • Italy and it’s comedy, specifically
  • Youth, Unemployment, Ambition
    • Subway
  • The media’s handling of politics and the economy
  • Bitcoin, Wealth, distribution
  • Market tempered euphoria
  • Trading strategy

Admittedly the white smoke, the pope, and the historic deconstruction of how Francis will move on 4 wheels takes a certain effort to avoid, but this too will pass, as Vatican punditry fades.

2Paragraphs has a refreshing perspective.

Dow_EURUSDStarting with Europe’s Spring head fake, Europe still hasn’t paid the piper. My last post, Will Europe Find Center Stage (Again)? rings true, still. The economic numbers continue to disappoint and the European markets continue to levitate, following the US markets to recent highs. Ten straight now. The flagrant disconnect in the EURUSD defies logic. Manipulation? Obviously. This divergence is tradeable, but when? You would expect euphoria, and all you sense is apathy, as if the smart money is dumb, and the dumb money is in hibernation.

The founder of Subway, Fred Deluca claims regulation would prohibit the creation of Subway if he tried to start-up today. The spin around this story, puts me in papal avoidance mode, yet the premise strikes a chord. I’m reminded of a grandparent saying how hard they had life, wearing that struggle as a badge of honor. That tale is turned on its head today. In fact life was easy for our Grandparents, or so we’re told. Ambitious youth, educated and indebted face an increasingly difficult journey.

Yet if you compare American youth to their Italian, Spanish, Greek, French and Portuguese brethren who live with nearly insurmountable under employment (though less debt), I have to ask where and when the social impact of this horror will appear on the nightly news. What would our Grandparents say? Or what should we say to our Grandparents?

The EURUSD chart above reflects a manipulated market and a manipulated currency. The ECB and the Federal Reserve are responsable, politicians are complicit, and many argue fully justified. Yet, since we left the gold standard for a fiat currency, currency manipulation, QE or whatever lever central banks choose to employ, is fully accepted as prudent economic theory. The gold standard debate is a can of worms, lets avoid it. But PhD’s assert sans fin, the brilliance behind financial structure, and the strategies employed to manage employment and inflation. That alone raises questions. The simple idea that currency shouldn’t be manipulated by central banks is a powerful idea. Simple = Smart?

Bitcoin is constantly catching my attention, I’m trying to grasp the disruptive potential. I absolutely love the pitch, but struggle to grasp the reality. A recent ‘bug’ caused major stress in the bitcoin market. (here) On the other hand, Argentina’s capital controls are a boon to bitcoin… This  just gets more interesting. My personal experience so far is limited and a ‘wallet’ that just never seems to be synchronised. It’s going to take some work to understand the utility, but the fact that we can buy cupcakes, and trade bitcoin as a unmanipulated currency keeps my attention. (One of my recent posts on Bitcoin.)

Good Trading.

bitcoin

Bitcoin Goes OWS

bitcoinRegular readers know I appreciate Grant Williams and his TTMYGH newsletter, his most recent, War Games prompts me to think out loud about Bitcoin.

Mr. Williams makes no reference to Bitcoin, but I’m sure it’s sitting in the back of his mind, much like OWS was sitting in the back of Lloyd Blankfein’s mind last year. Grant presses the dangers of global currency wars and presents an enlightening Asian example of currency influence on GDP, competitivity, even the rise and fall of corporate ’empires’. He links central bank profligacy, inflation, gold repatriation, and paints an ominous picture of our financial future. As usual it’s worth a read!

Bitcoin hit the mainstream media again this week when Bloomberg published, “Bitcoin’s Gains May Fuel Central Bank Concerns“. Zerohedge dutifully reacted with “Is The ECB Responsible For The Second Coming Of BitCoin?

 

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