The New Bit Currency Crypto FX paradigm

globalintelhub's picture

(GLOBALINTELHUB.COM) — 10/15/2017 Dover, DE — The Bit Paradigm has arrived; with billions being thrown into projects that no one knows who are the founders, or if the profiles they use for their ‘team’ pages are guys working from home or have day-jobs at the local grocery store.  It is transforming the landscape so rapidly, we compiled a sequel to Splitting Pennies entitled Splitting Bits – Understanding Bitcoin and the Blockchain – available on Amazon Kindle for $2.99 and Paperback $9.99.

As Currency experts, we found nothing unusual in the Bit World, it’s just FX 2.0 and hopefully a catalyst for real global financial reform beyond the scope of the myopic Dodd-Frank Consumer Rip Off and Exploitation Regulation that have plagued the US consumer going on 5 years now.  As we’ve explained in our previous work, Splitting Pennies – FX is the basis for the global financial system.  Don’t forget that Bitcoin is denominated in US Dollars.  While FX is the least understood market in the world it is also the most important.

Just remember one thing – customers (business) need currency, they don’t need stocks or Crypto.  Take any business as an example, McDonalds (MCD) is always a great FX example – they need foreign currency as they accept it in more than 110 countries worldwide.

forex

And being based in Chicago, they need to repatriate those currencies into US Dollars, making them one of the biggest FX traders in the world.  So where does Bitcoin fit into all this?  At the moment, it doesn’t.  Of course that’s all changing – and changing quickly.  The news changes by the day – as the Bit Paradigm goes mainstream.  The current market cap of the entire CryptoCurrency Market is $170 Billion according to Coinmarketcap.com.

While that is still far away from traditional markets, the growth rate is beyond parabolic.  Skeptical traders should remember the late 90’s when fears about the Euro kept investors away.  Just take a look at this Monthly EUR/USD chart showing the Euro’s rise against the dollar from lows of .83 to highs of 1.58 before settling into the range that it’s been in recently:

Euro Historical

The Red line from .83 to 1.58 is about 190% or double – and traders should also bear in mind in FX there is a lot of leverage, so the 100% return in 6 years could have been 1000% or greater (many funds did profit from this simple trade).

Of course, the real money in FX is in algorithmic trading, what the banks learned the hard way.. But the Euro is a great example of a synthetic currency that was created artificially, and finally succeeded to be an alternative to the US Dollar as a world reserve.  Although the technicalities of Bitcoin are far different, the gestalt is the same – Bitcoin is a currency created artificially, backed by nothing, and is increasing in value because people believe that it will be used in the future and that the price will go up.  Just like there’s nothing behind Bitcoin, there’s really nothing behind the Euro – with one key difference.  It’s possible for the ECB to print (mint) as many Euros as they want, but it’s not possible to do this with Bitcoin because of the design (there is a limited number of Bitcoin) and because there’s no central bank behind it.

The big story of currency trading Crypto is of course, new alt-coins other than Bitcoin, which are being issued so rapidly it’s impossible to even keep track of them.  Coinmarketcap.com lists 1170 different Cryptocurrencies, you can see the full list here.

For a detailed breakdown of how you can profit from trading Bitcoin, checkout our new book Splitting Bits.

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Silver Savior's picture

Will holding a few Litecoin make me a millionaire? How about 7 Litecoin? I just bought some for the hell of it today. I am really deep into Ripple, Xlm, Xdg and I did the Plex coin ico. 

kanoli's picture

"Bitcoin is denominated in US Dollars" ???

Wrong.

globalintelhub's picture

Another user that needs to read a book on the subject!  www.pleaseorderit.com/bit

1.21 jigawatts's picture

Yeah, there's nothing backing crypto except a network of computers and cryptography. 

 

BallAndChained's picture

Blockchained Commodities versus
Blockchained NOTHING (cryptos)

Blockchained Commodities would use a network of computers and cryptography too. The only difference is one is backed by NOTHING and the other is backed by a hard REAL asset. One emperor has clothes and the other doesn't.

BallAndChained's picture

> It’s possible for the ECB to print (mint) as many Euros as they want, but it’s not possible to do this with Bitcoin because of the design (there is a limited number of Bitcoin) and because there’s no central bank behind it.

The crypto pumpers continue to perpetuate the Big LIE that the number of Bitcon can't be increased.

The Fed and central banks increase the supply using the same method as the centralized crypto developers: using a text editor/typing on keyboard.

globalintelhub's picture

bitcoin can't be increased, it was baked into the original design.  if you create your own crypto, then you can increase it if those are the rules you setup.  but yes, the mechanism is the same.  just another artificiality, but one key difference - one is backed by the fed and one not!

BallAndChained's picture

You use a text editor to change the code.

The developers are changing the code all the time. How do you think they are making the forks?

If you think the developers can't change the code, you will be in serious trouble if a bug is found. Bugs always occur in any large piece of code.

When the centralized Chinese miners and other miners run out of tokens to mine, they will demand the ceiling be raised, just like the debt ceiling.

They are not going to do it for free. And the users would complain if the transaction cost is raised too high.

BallAndChained's picture

3...2...1, tmosley goes to next crypto article to pump his extremely secure, distributed NOTHINGNESS.

Greenspazm's picture

mosely...peanutz...peeniz... communism--OLDBUGS

hotrod's picture

1170 Cryptos!!!!!!!!!!!!   Which one do I buy?   Only 1 gold.

King of Ruperts Land's picture

Soon there will be FX and commodities futures markets that are NOT denominated in $US. For instance right now to trade on a US commodities market you need to put up margin in US currency deposits or US treasury bonds.

What is right around the corner are peer to peer futures markets where margin deposits are in Bitcoin or other proven Crypto and commodities are "priced" in Bitcoin.

For the Newbies a veneer can be overlayed so that it appears to price things in Dollars or Yen, but these will be "synthetic" currency as the real underlying "money" at stake will be Bitcoin type money.

Any participant with legacy cash or cash deposits, a commodity warehouse/physical dealer or a commodity producer can tap into these protocols and create a spot price node thus a futures market for speculative and hedging parties.

Those who will ride their "legacy money" all the way to the bottom of the sea, pile on with your downvotes.. wait...wait... NOW!

Honest Sam's picture

How does one make the leap of faith-----having missed the extraordinary run from the intro of BTC ------when it could be bought (by essentially trading in some FRNs) ---about $13 to its current $5,800.00 price tag without feeling like a total idiot?  

It could well be that like many of my boneheaded moves of the past, you should short it, (or, since you can't, sell any you have at $5800) the second I fork over 5,800 of my precious FRNs to buy my first Bittercoin.

It's often said that the most bitter medicine is usually the most effective.  However, self-flaggellation is pretty painful too, but I can't see where in any way it would be a good thing to do to oneself, unless you are Harvey Weinstein, and want a naked Kate Upton to take a bullwhip and whack your pee-pee. 

messystateofaffairs's picture

Haven't you heard. BTC crashed to $5,500. I guess its over, the tulip boys were right all along. I'm going to go play some Tiny Tim reruns to console myself.

BallAndChained's picture

Are you sure that is $5,500 dollars?

But the other poster said Bitcon isn't denominated in US dollars, it is denominated in Satoshis.

So that means it crashed to 5,500 Satoshis?

NoCamelCase's picture

Of course you can short Bitcoin many places.

NoCamelCase's picture

Of course you can short Bitcoin many places.

King of Ruperts Land's picture

You will look suicidally stupid if/when it hits $1,000,000. Consider that risk. Consider looking stupid for NOT buying it. Its a risk (of looking stupid) vs. insurance cost.

Maybe 0.1, 1.0 or 10.0 Bitcoins that you buy and stuff away and tell no one about. (the 10.0 would be if you are already high net worth or forgo buying a boat for cash or such.)

If 10% of the worlds population, 600 million people decided to get into bitcoin, there might be only 0.01 Bitcoin available for each of them. I just guess that 6 Million Bitcoins of the 16 Million might be for sale. (Has anyone analyzed the "float")

They could only get $58.00 worth. And that kind of Demand would realistically create a huge rise in price.

Don't leap. Buy $580, $5800, $58,000 worth. You will be 10x, 100x or 1000x ahead of the worlds top 10% should Bitcoin really catch.

No one will ever know you did a stupid thing if you keep quiet. Unless It turns out to not be stupid, then brag about it.

BallAndChained's picture

$1,000,000 per Bitcon is living in a fantasy world. The same people who fantasize about sleeping with a super model, driving a ferrari, being a sports star, a rock star, billionaire, ...

Anybody who is crazy enough to pay $1,000,000 for a secure distributed piece of NOTHINGNESS deserves to lose all their money.

When anybody can download the FREE open source code and make as many fantasy tokens as they want.

Etherium is FREE open source
https://github.com/ethereum/

Bitcon is FREE open source
https://github.com/bitcoin

Monero is FREE open source
https://github.com/monero-project

Litecon is FREE open source
https://github.com/litecoin-project

Ripple is FREE open source
https://github.com/ripple

etc.

What is the most you paid to use FREE open source code?

Has anybody ever paid anywhere near $6000 to use FREE open source code?

King of Ruperts Land's picture

You demonstrate your ignorance when you say " FREE open source" and equate that to making coins for free. Bitcoin source code is free also, but you cannot make "free" coins with it. It takes much computing and is generally a break even with capital and electricity and rapid mining machine obsolescence figured in.

Further you must have up voted yourself. I cannot believe another ZHr would also be that out of touch with reality.

If Bitcoin ever reached the current market cap of gold, which is many fold LESS than the market cap of fiat money and fiat money debt. Then Bitcoin would be near $400,000. That is more than wish full fantasy. It is is a realistic possibility as is overshoot to $1,000,000.

BallAndChained's picture

You demonstrate your ignorance when you say "It takes much computing and is generally a break even with capital and electricity and rapid mining machine obsolescence figured in."

When you start your own Bitcon, it is the easiest to mine. The mining difficulty increases by the number of miners on the network. Being a single miner on the network when you are at the top of the Pyramid, it is easy to mine millions of tokens. In addition, the mining reward gets halved as time passes, making the creator the most profit. That is why this Pyramid designed into the code is a SCAM.

How do you think Satoshi mined so many tokens lol. Satoshi didn't need huge computing power and electricity.

For a Bitcon pumper accusing others of being ignorant, you sure are ignorant. Do research into your own crap you are buying.

Why are you crying about votes?

> If Bitcoin ever reached the current market cap of gold

If tulip bulbs ever reached the market cap of gold, tulip bulbs would cost a lot too.

If toothpicks ever reached the market cap of gold, toothpicks would cost a lot too.

If pieces of NOTHINGNESS ever reached the market cap of gold, NOTHINGNESS would cost a lot too.

King of Ruperts Land's picture

I am talking about the "Bitcoin" not some new coin you start up. Many "new" coins have been started up as bitcoin knockoffs. Usually they change some simple parameter like the block time interval or the mining reward or total coins. They never amount to anything. Their prices always approach zero. Note that any lesser coin (including "forks") that uses Bitcoin's double sha256 hash algorithm is not secure do to its susceptibility to the 50% rule. A large miner from the dominant coin could come over to the lesser coin and do double spends or otherwise mess with the smaller coin by having >50% of the hashing power.

I am not a "bitcoin pumper". I am not totally positive on bitcoin. It has problems. I have written on them. I am an astute observer, and have watched the developments in E-cash, since reading some of the papers and proposals in the late 1990s.

In the early days of mining bitcoin they were worth zero. There was no market for it. It was done for technical interest, and to test it. So how can you claim they were making big profits? They were making zero. They bought a pizza with a large number of bitcoin. You assume they all knew it would work and be worth thousands each and so saved it. Easy for you in hindsight. Some people may have got lucky and mined some and kept them. I bet there are many thousands of bit coins lost in the early days.

I dare you to actually go through the history of Bitcoin and find when they really made a lot of profits when mining it. The difficulty kept increasing so fast that the mining rigs would become obsolete then some faster graphics cards would come out and they would barely pay for themselves before some asics would come out and then barely pay for themselves and then faster ones would come out and the difficulty just kept climbing.

There is a reason to compare bitcoin to gold as it is designed to be a type of money. Tulips, toothpicks may have a "price" but they are not intended to have a monetary function. Neither tulips nor toothpicks have a history of being treated as money by pirates. Both gold and bitcoin have.

So I suggest you educate yourself on the subject before mouthing off.

BallAndChained's picture

> So how can you claim they were making big profits?

It is easily seen which addresses hold the most Bitcons. At current price, they are valued at Billions. Satoshi and buddies can be holding many of those addresses. It is wishful thinking if you think they spent it all on pizza LOL. From the large amounts in those addresses, they obviously didn't spend it all on pizza. They can hold as many addresses as they want. It is easy for them to take profit on smaller addresses while not selling their larger addresses.

People watch those large addresses, and if they start selling, that can cause a plunge. Just because they haven't sold yet does not mean they NEVER will. Only wishful thinking people would bet their life savings on a HOPE that some anonymous person or unknown shady organization (possibly NSA) will NEVER sell. They got those large number of Bitcon from the Pyramid scheme designed into the code. Pyramid schemes are illegal. A scam hidden by techno babble is still a scam.

> I dare you to actually go through the history of Bitcoin and find when they really made a lot of profits when mining it. The difficulty kept increasing so fast that the mining rigs would become obsolete then some faster graphics cards would come out and they would barely pay for themselves before some asics

Huh? I just told you it is easiest to mine at the beginning when there is only one miner. The Pyramid scheme is designed into the code. Satoshi didn't need huge computing power. How do you think they accumulated those large number of Bitcon in the largest addresses? The top several addresses combined are valued at Billions.

You sound like you are denying reality, wishing that just because it is hard to mine now, that it was also hard for Satoshi to mine. That obviously is not true.

> Tulips, toothpicks may have a "price" but they are not intended to have a monetary function.

A lot of common things have been intended to have monetary function, including sticks, sea shells, beads, paper. They all became worthless. Just because it was intended to have monetary function does not mean they are valuable in the long run.

Blockchained NOTHINGNESS created from thin air is not rare either, no matter how you try to make NOTHINGNESS artificially rare with a text editor.

Blockchained NOTHING (Bitcon) versus
Blockchained Commodities

Eventually people will start to ask the UNCOMFORTABLE question "Why am I paying so much for Blockchained NOTHING when I can buy Blockchained REAL commodities for so much cheaper?"

For the same reason that if people had a choice between
Currency backed by NOTHING versus
Currency backed by gold, only a fool would choose NOTHING.

Eventually the greater fool will realize one emperor has NO clothes.

So I suggest you educate yourself on the subject before mouthing off.

(You crypto cultists always like to end your posts saying "you are so ignorant, i am not because i hold crypto tokens" LOL)

PumpherDumper's picture

Those who fall into the trap of limiting Bitcoin, and other digital assets, into associations with fiat currencies are really missing the entire point.  Obviously this author has been stuck in the old paradigm just a bit too long.

globalintelhub's picture

You obviously don't understand Bitcoin that well.  Suggest:  Read our book!  http://www.pleaseorderit.com/bits 

globalintelhub's picture

what are you talking about?  you can't buy bread with Bitcoin.  

King of Ruperts Land's picture

I will sell bread for bitcoin.

Homemade Bread 0.001 BTC/loaf.
Fresh Beer 0.0005/mug
House Wine 0.001/ large glass
2 eggs toast and coffee 0.001 BTC
Lunch 0.002 BTC
Dinner 0.004 BTC
fast Women (when available) 0.005 / BJ 0.020 and up / date
Come to my house. Private invitation required.

King of Ruperts Land's picture

What, prices too high? Go fuck yourselves then.

OpenThePodBayDoorHAL's picture

It's a "currency" when it's in "current" use. Bitcoin is not. 9 years after launch there are only 300,000 Bitcoin addresses with > 1 Bitcoin in them. One of those addresses would be Coinbase and their 10 million + customers. These customers are not using Bitcoin, they are customers of a Bitcoin bank they are trusting to hold Bitcoin on their behalf. Morgan Stanley surveyed the top 500 e-commerce companies a year ago and the number that were accepting Bitcoin as payment: 5. They did the survey again this year, the number: 3.

So it's definitely a thing that can go up, but it's not a currency. Sorry tmosely.

globalintelhub's picture

it's not a currency - and coinbase is not a bank.  it's an unregulated bitcoin operation.  they are a 'money exchanger' with a remittance license and as you stated bitcoin is not currency therefore coinbase is unregulated.  and it's not a bank.

Arnold's picture

We fit square pegs into round holes daily.
The wheel has already been invented, the last 2500 years has just shown incremental improvements over the initial prototype...

Slomotrainwreck's picture

Bitcoin is denominated in US Dollars

Ummm, no. Bitcoin is denominated in satoshi's, period. All crypto's are denominated in Bitcoins.

King of Ruperts Land's picture

Like gold is denominated in weight. Traditionally measured in Troy oz. priced in $US and other major Currencies.

I would say that the cryptos are "priced" in Bitcoin.

The dollar is a fiat unit denominated by 1s and 0s in a federal reserve book keeping computer. It used to be denominated in a physical dollar a Spanish silver dollar coin in common circulation and other similar silver coins such as the German "thaller"

How the hell did we get from the former to the later?