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Bitcoin Is the Red Pill of Freedom

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What is a “dollar”?

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One of the best-kept secrets of modern finance is the nature of money itself. I recall a televised dialogue between Ron Paul and Alan Greenspan, when the latter was the Chairman of the Federal Reserve Bank. He was asked by Ron Paul what exactly a dollar is. Greenspan’s answer was: “I don’t know.”

Now I ask this audience: Is it credible that the chairman of the Federal Reserve bank didn’t know what a dollar is? Is it not infinitely more likely he knew exactly what a dollar is, but had a compelling reason for not wanting to say it on the public record?

The simple fact is that for hundreds of years, a dollar was a measurement of weight, a specific number of grams of silver. So “one dollar” referred to X grams of silver. In his essay on the subject, Pieces of Eight, Edwin Vieira Jr. demonstrates beyond any doubt that the constitutional dollar of the United States is a “historically determinate, fixed weight of fine silver.” The Coinage Act of 1792 is but one source among many that makes this plain. It reads:

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“the money of account of the United States shall be expressed in dollars or units … of the value [mass or weight] of a Spanish milled dollar as the same is now current, and to contain three hundred and seventy-one grains and four sixteenth parts of a grain of pure … silver.”

That “a dollar” was a reference to a measured weight of silver and indirectly of gold, was understood by every American man woman and child for hundreds of years. That understanding has been lost over time, since America’s gold was confiscated from the American people by FDR in 1933.

America’s wealth was confiscated in 1933

That America’s gold was forcibly taken in 1933, under threat of huge fines and 10 years imprisonment, is a matter of public record. There is the question of where it went that needs to be understood, and why it was taken is an equally important question which is directly related to the first question. People were threatened with jail time and huge fines because otherwise few would have voluntarily given all their wealth to a government they understood to be their servant.

After all the real wealth was forcibly taken from American people, who was it given to, and why? Most people not only don’t know, they never even considered the questions. But rest assured that SOMEONE took ownership of it. Further, it doesn’t take genius to understand that the decision to confiscate all the accumulated wealth of every American was not made lightly. Most Americans did not give up their wealth voluntarily. There MUST have been a very compelling and dire situation that provoked such a desperate act on the part of the US government. We will discuss that shortly.

What did the American people get in exchange for the total accumulated wealth of some 250 years of American enterprise? In return for the wealth of a nation, the Federal Reserve gave the American people “green pieces of paper,” redeemable for silver (initially). The Indians who got trinkets for selling Manhattan got a better deal, actually. Those trinkets likely had some intrinsic value which paper does not have.

It is hard for the novice to grasp the concept that those green pieces of paper in our wallets are not actually ours. They were lent to the US government (which then distributed it to the population though various purchases and programs). Lending something implies that ownership remains with the lender. If one lends a neighbor a tool, he typically expects it to be returned. Understanding this point is critical.

Every one of those green pieces of paper still belongs to the Federal Reserve, which lent it to the US government. (It is called a Federal Reserve “note”, because a note is evidence of a debt, in Finance.)

So, the American people are using the legal property of the Federal Reserve to “facilitate commerce.” They have no viable choice but to use these pieces of paper to transact business, because real money has not been available since 1933. The central bank in question is privately owned by various persons and corporations, but ultimately there is but a very small group of shareholders of the bank. They are running their business first and foremost to maximize long-term profits for the benefit of the shareholders.

1913 was a fateful year

Beginning in 1913, the owners of the Federal Reserve began lending to the US government an essentially worthless currency which was nevertheless useful because people were willing to accept it in place of gold and silver coin. But despite lending mere pieces of paper, the owners of the Federal Reserve demanded interest payments in gold. Within 20 years, after borrowing so much money to fight WW1 and even more during the roaring 20’s, the US Government was unable to make its interest payments – so the owners of the Federal Reserve foreclosed.

FDR was only in office a couple of days before every bank in the country shut down and did not open again until after he agreed to essentially confiscate the gold of every American, to be given to the owners of the Federal Reserve bank, in payment of the accumulated interest on the government’s debt.

After that fateful day there was no longer any gold in American circulation; there was no longer lawful money available to the American people (silver was still available, but the real store of wealth had been gold). How then could anything be bought or sold? Barter was not only unacceptable in practice, forcing the population to barter would plainly expose the horrific theft that had just taken place! So green pieces of paper, owned by a central bank not answerable to the US government, was substituted to facilitate trade.

Once the readers grasps that the central bank is a private corporation, it becomes clear that “Federal Reserve notes” are not different from “Chuck E. Cheese Money”, or “Disney Dollars”, with a picture of Chuck E Cheese or Mickey Mouse printed thereon. Pictures of dead Presidents are put on Federal Reserve notes to give an illusion of legitimacy. It is not real. It is a façade – an illusion, a deception.

It is important to reiterate that Federal Reserve notes remain the property of the Federal Reserve, and are lent to the American government at interest. As owners they are legally entitled to rental fees from those using their property, in the same manner that an apartment owner can justly demand rent from his tenants. These usage/rental fees are paid in the form of income taxes. Hence, the more of their notes one controls (i.e., the more money one makes), the higher the fees/taxes. This is the key to understanding why it was only after the government began borrowing Federal Reserve notes in 1913 that the income tax was deemed constitutional by the Supreme Court.

The wealth a very few men/families have accumulated from this lending arrangement in the past 100 years is staggering. It is said that less than 200 men own most of the world. The owners of the world are never in the newspaper, would not be recognized on the street, and likely do not even live in America.

In addition to rental fees (income taxes), the true owner of Federal Reserve notes can and does demand “terms of use.” It is no different from the EULA you must agree to, as a condition to use software or internet services these days. If you use the property or service you must agree to the terms. It is the same with Federal Reserve notes. The owners of the notes lay out any terms they think they can get away with. Limits on withdrawals from bank accounts, limits on deposits, limits on amount transported by plane or transmitted over the wires, etc, are routine. Once you understand the issue of ownership/rent/terms of use, so much begins to make sense.

Now the “New Deal” makes perfect sense

Chickamauga Dam spillway was built from 1936-1940 by the Tennessee Valley Authority, created by President Franklin Roosevelt.

Understanding the ramifications and implications of the nation renting its currency from a privately owned corporation, and thereby becoming subject to ALL MANNER OF REGULATION AND FEES, we can finally understand why the “New Deal” was implemented in 1933. Immediately after the banks re-opened in 1933, Americans were suddenly and for the first time ruled by all manner of bureaucrats in government agencies. They suddenly were informed they were required to get a license to do almost anything that involved earning those bits of green paper.

High school history students are taught that American society was radically transformed by the New Deal, but are never taught exactly why. In light of what we have now learned, it now makes perfect sense.

The Supreme Court initially objected to this violent upheaval of the American experiment, but FDR threatened to pack the court unless they accepted the terms of the bankruptcy proceedings he was facilitating. Faced with such a Hobbesian choice, the courts yielded and rubber-stamped the rental fees and regulations that came with using privately owned notes in commerce. In 1913, when the Federal Reserve first began lending to the government, income taxes were deemed constitutional by the court, but were only applicable to a very small group of people who directly benefited from those pieces of green paper. After 1933, an ever-increasing number of people were required to pay. Now we know why.

Voluntary Income Tax

It is often said that as a matter of law, income taxes are voluntary. We have all heard this. Yet, in the same breath, those that teach this maxim to us, tell us that we MUST nevertheless pay it. This obvious contradiction is never adequately explained. Virtually every tax protestor in the last 30-40 years, no matter how smart and eloquent, has lost his case. Many of them landed in jail for their valiant efforts, despite reminding the courts that we are taught that taxes are voluntary. How is this bizarre set of circumstances possible?

The tax courts are ruled by the presumption that using Federal Reserve notes is a voluntary act. If you don’t want to use them, you don’t have to. But if you do, then you must pay a usage fee (tax).

Those unfortunate incarcerated tax protestors did not understand that the Federal Reserve notes in their bank accounts are owned by the central bank. Simply having a dollar-denominated bank account in their name, or having a dollar-denominated credit card, was incontrovertible proof that the protestors owed a rental fee, which they refused to pay.

Of course, this arrangement is far from fair from the perspective of the people who use Federal Reserve notes in total ignorance of the terms of use, which is 99.999% of the population. Indeed, it could (and should) be argued that the contract is fraudulent, since the system has deliberately hidden these facts from the population. Does not a valid contract presume that both sides understand the terms of the contract? If one party deliberately hides pertinent details, is not the contract voided? I’ll leave that question to the lawyers, but I’m pretty sure we know the answer.

Global Control

As a result of these circumstances we were born into, the owners of the world’s privately owned central banks now essentially own and rule the world, as they dictate terms of use and rental fees for almost all currencies globally. At this point, almost no countries own their own central banks which are answerable to the elected government. The few countries that do are routinely vilified and targeted for “regime change”. So, the world has been living akin to “The Matrix”, where the populations of the world have lived in complete ignorance of their desperate situation as virtual serfs in a feudal hierarchy.

Title to Property

Understanding that there is no lawful money in circulation is also the key to understanding why one cannot get lawful title to their properties or even lawful titles to their cars. How can you actually pay for “real” items, with “fake” money? You cannot. (“Certificates of Title” certify that a title exists, but are not the title themselves.) And so, you only receive certificates of title to your home and car. Because the actual tile is held by the “true” owner of your house and car, you must register the car to drive it, and can be evicted from your fully-paid home for failure to pay “taxes”, which as discussed earlier, are usage fees. This is only possible when we don’t hold title to property.

ENTER CRYPTOCURRENCIES

Unlike fiat currencies, cryptocurrencies such as Bitcoin are not owned by the central banks. They are owned, wholly and completely, by the person who controls the address in which the bitcoin’s are registered. This is the reason that central banks are struggling to find a way to regulate Bitcoin and the lesser-known altcoins. The central banks have been hamstrung and limited to exercising a very modest degree of regulation over exchanges where cryptocoins are converted to and from fiat currencies. It is only the fiat currencies they are lawfully able to regulate, not the cryptocurrencies. But, by regulating the conversion to fiat they give the appearance of regulating the cryptocurrency. It is an illusion – they know it, and are hoping that the rest of us never figure it out.

It is a certainty that central banks want desperately to directly regulate and tax cryptocurrencies as freely as they do fiat notes. (The Bank of China is said to preparing a Chinese cryptocoin for that very purpose.) However, in the absence of a central bank-issued cryptocoin they will likely not do so directly. Why not? Because they are rightfully afraid that a successful court challenge would prohibit such regulation, and in doing so, the resulting publicity might inadvertently expose to humanity the real reason central banks are able to tax and regulate fiat notes.

The last thing the owners of the central banks want is for the public to learn that their retaining ownership of Federal Reserve notes has made them the de facto rulers of the world – far wealthier than the kings of old, the Tutors, or the popes, ever dreamed of. This well-guarded secret could be revealed to the public as a result of a successful court challenge to the illegitimate regulation of a currency they do not own. It’s not worth the risk – not yet anyway.

The Red Pill is available

For the first time in more than 100 years, the owners of the central bank are confronted with a means though which the people of the world might actually escape from their control. To date the central banksters have not figured out a way to stop it (without turning off the internet). They have successfully slowed down the inevitable by keeping the great masses of people ignorant of cryptocurrencies, and/or afraid of them, by stressing their volatility, by associating them with nefarious activities, etc. But a tipping point approaches.

The Federal Reserve Bank

Until the recent advent of cryptocurrencies there has been no viable and effective way for the American people to be free of the debt-slavery feudal serfdom that using Federal Reserve notes has brought upon them. But cryptocurrencies are offering a way out of the matrix. The red pill. To make matters worse for the central banksters, cryptocurrencies are immeasurably more convenient than their “green paper” competitor. They can easily be sent to anyone without any government-mandated paperwork or oversight. No need to ask any bureaucrat’s permission. They are easily usable down to 8 places to the right of the decimal point. 0.00000001 bitcoins can be easily spent. The cryptocurrency is appreciating in value every year, whilst the green pieces of paper become increasingly worthless every year. How terribly inconvenient for the banksters. The solution to mankind’s slavery is also an infinitely better medium of exchange!!

When the day arrives that one can easily buy and sell virtually anything and everything without conversion to fiat, i.e., when most everyone understands and uses Bitcoin (or another altcoin) on a daily basis, to buy their coffee and donuts, to leave a tip for their waiter, etc, more than a centennial of tyranny will start to quickly unravel. The problem of title and ownership of real estate and other high value goods will still need to be worked out; but endless regulations, terms of use and rental fees will rapidly come to an end.
May that day come soon.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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5 stars on average, based on 1 rated postsJim has an MBA from the University of Southern California. He has had a long career in both Corporate Finance and IT. Along the way he discovered that trading was a vehicle with great promise, but struggled for a long time without a mentor. After having been knocked down many times and having struggled to get back up, he had an epiphany and realized that geometry was a solution. He shares his experience here. If you do well as a result of suggestions made here, feel free to say thank you :) BTC: 1FUq3GB1Q8zz2JpuBr7YHzVBKnaWoxgmya Follow him on Twitter (@jimfred1276) or email him at jimfred1276 at gmail.




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5 Comments

5 Comments

  1. Richard

    March 8, 2017 at 6:49 am

    And at the same time, A gold dollar was 28.5 grains of pure gold equaled one dollar.

    • Edward Talliot

      March 8, 2017 at 5:30 pm

      Do you think an ideal economy would consist of gold backed currencies? What are your thoughts on the current monetary system we have?

    • Jim Fredrickson

      March 9, 2017 at 4:43 am

      Yes.

  2. Jim Fredrickson

    March 9, 2017 at 4:52 am

    I think it’s clear that the present system is not simply unsustainable. It is exploitative to the point of being evil. Gold and other precious metals were/are a MUCH better system of economics than fiat.

    But cryptocurrencies, are (in my humble opinion) even better because they can be easily sent to anyone anywhere, and are divisible to 8 points to the right of the decimal point. Bitcoin could go to $1 million per coin, and $1 transactions could still take place. With adequate safeguards, they cannot be stolen by a pickpocket or burglar.

    None of these points are true of the metals.

    But I am not trying to pick a fight with the gold bugs. I agree with them wholeheartedly that if it were possible to get gold and silver back into circulation as money, that would be infinitely more just than the current system.

  3. derick

    September 18, 2017 at 10:47 am

    i don’t really understand. the process of calving a gold piece to accurately meet the specification of 1$. is it not the same process of making green piece of paper to fit specification of 1$. Why is it that the federal reserve can not do it for gold and still get away with the taxis as they do with the green papers. I mean the federal reverse could just say ” you want gold? ok …” and they start producing gold people use and still pay them their “rents”.

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Analysis

Crypto Capitulation Is Upon Us

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Capitulation: kuh-pich-uh-LEY-shuhn (noun) the action of surrendering or ceasing to resist.

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From their December peak, cryptocurrency assets have given back over $400 billion. This amounts to more than the GDP of many countries.  If this were values lost in the stock market whose worth is in the trillions, it would be called a minor correction. In crypto terms there is only one word to describe the carnage: capitulation.

As painful as it is, the point to be made here is the capitulation is a good thing.  Read on and I will share some thoughts for you to consider.

Mass Media Mania

First let’s take a look at some of the news that is causing such despair. Most recently the selling mania has been in response first to Facebook and more recently to Google.  Both of these mass social media giants have ban cryptocurrency advertising. Read closely and you won’t be shocked to realize that the target of their ire are the many ICOs.

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The problem is not that Facebook and Google are the only advertising platforms.  The problem is that they are considered mainstream media and without these two, the trend of cryptocurrencies gaining legitimacy is delayed.  That is right, I said delayed not blocked or prevented.

The World Has Changed

Five years ago, when bitcoin was unknown to most people, this might have been a fatal move. Today is a different story. I recently traveled to a remote mountain town in the interior of Mexico.  Everyone I met had heard about Bitcoin and eyes lit up with excitement when I ask if I could pay for lunch with bitcoin.  

Today are dozens of websites dedicated to cryptocurrencies, either holding them, exchanging them or just writing about them.  Probably the most effective advertising remains on Google, it is called Google Search and it is free.

If someone wants to learn about owning bitcoin or any other currency, there is a ton of educational information.

Of course it would be far better all around if Mark Zuckerberg and Eric Schmidt had taken a different approach such as banning only advertisements for ICOs, but that didn’t happen so supporters of crypto aren’t comforted in their beliefs that bitcoin is going mainstream in 2018.

The Flipside Is Being Ignored

Every argument has a flip side.  If the removal of ads contributes to cleaning up ICO scams, that is a good thing.  We can all agree on that point. And let’s be honest there is more than one problem the crypto community needs to clean up.

This adds to the ongoing regulatory news including March 7th ruling in US Federal District Court that cryptocurrencies are commodities.  As such they can be regulated by the Commodity Futures Trading Commission (CTFC).

On the same day the Securities & Exchange Commission issued the following order:

“If a platform offers trading of digital assets that are securities and operates as an ‘exchange,’ as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration,” the commission said in its “Statement on Potentially Unlawful Online Platforms for Trading Digital Assets.”

Not All Regulation Is Inherently Bad

The mere hint of added government regulation typically sends stock market investors heading for the exits and the same holds for investors in crypto.  But this raises the question, is some regulation of crypto a good thing?

If we examine the full spectrum of regulation to this point on a global scale there is one common target most everywhere.  That is the practice of exchanges. So far there has been little or not regulation, threatened or enacted, to protect investors from loss of funds due to security breaches.  

The question that needs to be ask is this.  Will SEC regulation result in better pricing and lower trading costs; if So, then this would provide a desirable outcome.  It is understandable if you laugh at the prospect of any government regulation having a beneficial outcome, but if you look at past SEC practices, you would come away with different conclusion.

So when the next regulation catches the headlines will it be to ban the existence of bitcoin, Ethereum, Ripple, Litecoin and others or to protect the investor from scams and excess costs?

Capitulation Is A Good Sign

Over the course of a pretty long investment experience, I have witnessed true misery on more than one occasion.  The pain is unbelievable, there is no perspective on the future and all you want is to take action to end the misery.  That is when you know the worst is happening and nothing is ever going to make it better. That is when major stock market bottoms are formed. It surely is painful these days for crypto investors. This is a good sign.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.4 stars on average, based on 81 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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What’s Behind Cardano’s Rising Popularity in South Korea?

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Cardano, better known as ADA in South Korea, pronounced as “aeda” in the local market, is growing at an exponential rate due to UpBit.

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UpBit, South Korea’s second largest cryptocurrency exchange behind Bithumb, is operated by Dunamu, a subsidiary company of Kakao, the operating company of KakaoTalk and KakaoPay. The two mobile applications, KakaoTalk and KakaoPay, have a market penetration rate of over 90 percent in their respective markets–financial technology (fintech) and messaging.

Although UpBit remains as the only cryptocurrency exchange that has integrated Cardano within the local South Korean cryptocurrency exchange market as of date, the popularity of Cardano on UpBit is increasing rapidly. According to CoinMarketCap, 75 percent of Cardano’s daily trading volume is processed in South Korea, by UpBit.

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Within its debut month, more than 3 million South Korean users signed up to use KakaoPay, the country’s most widely utilized fintech app. KakaoPay operates as a mobile bank, allowing users to send and receive money, obtain loans, and conduct financial activities. KakaoPay supports UpBit because a subsidiary company of Kakao in Dunamu operates UpBit.

Given that Cardano is one of the most popular cryptocurrencies on UpBit in terms of daily trading volume, naturally, as general consumers in the traditional finance market using KakaoTalk and KakaoPay move to the cryptocurrency market, the first few cryptocurrencies they are introduced to are bitcoin, Ethereum, and Cardano.

Cardano is also receiving significantly more mainstream and local media coverage than other alternative cryptocurrencies, specifically because the South Korean media has portrayed Cardano as a direct competition to Ethereum. Because Cardano is a smart contracts protocol, it is structurally similar to Ethereum.

The two key differences between Cardano and Ethereum are that Cardano uses a proof-of-stake (PoS) consensus algorithm and it also has two layers that are used for smart contracts processing and payment settlement.

In South Korea, cryptocurrency mania has swept across most major industries. 5 out of 10 people on the streets, in subways, buses, and cafes talk about bitcoin, cryptocurrency, and blockchain technology on a regular basis. As such, the majority of investors are more technical than other regions.

Most investors of Ethereum in South Korea understand that the Ethereum Foundation and its open-source development team has been planning a PoS update via Casper. When Cardano debuted with a PoS protocol, it led South Korean investors to believe Cardano is a more innovative platform and has a technical edge over Ethereum.

January 31

For cryptocurrencies with strong followers in the South Korean market, January 31 is an important date to keep track. On January 31, local cryptocurrency exchanges are expected to open account registrations to new users and six major local banks are set to provide banking services to cryptocurrency exchanges.

Consequently, on January 31, it is likely that a massive amount of Korean won will flow into the local cryptocurrency exchange market. The recent cryptocurrency exchange ban fiasco, which turned out to be false, further increased the presence and popularity of cryptocurrencies in South Korea.

Cryptocurrencies like Cardano, EOS, Qtum, and Ethereum that have strong bases in South Korea will likely increase in value throughout late January and early February.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.4 stars on average, based on 3 rated postsJoseph Young is a finance and tech journalist based in Hong Kong. He has worked with leading media and news agencies in the technology and finance industries, offering exclusive content, interviews, insights and analysis of cryptocurrencies, innovative and futuristic technologies.




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Fidelity Investments is Mining Cryptocurrency

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Fidelity Investments is a multi-billion dollar brokerage  that just so happens to be mining cryptocurrency. In fact, it has been at it for three years, using its own computers to harvest bitcoin and Ethereum.

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Profitable Experiment

CEO Abby Johnson recently told Fortune that its U.S.-based mining operation is “making a lot of money.” This comes despite running a relatively modest operation.

Hadley Stern, Senior VP of Fidelity Labs, described his company’s venture as an “experiment.”

The real reason we began mining, and still do, is to learn how the network works, how consensus works, how difficulty levels work,” he said in reference to the mining process.

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The key to profitability has been the dramatic rise in cryptocurrency over the past year. Bitcoin and Ethereum are the world’s No. 1 and 2 cryptocurrencies by market capitalization, and no-one else comes close.

Well Ahead of the Pack

The fact that Fidelity has been at this for three years speaks volumes about the company. Other, much bigger players are still dipping their toes in the market, but are unsure about how to proceed. Goldman Sachs is reportedly on the fence about starting a cryptocurrency trading operation, while J.P. Morgan has already begun handling customer orders for bitcoin-based instruments.

Fidelity is doing a lot more than just mining tokens. Earlier this year, it reached an agreement with Coinbase to let customers view cryptocurrency prices alongside other assets on their Fidelity homepage.

Coinbase is the world’s most funded cryptocurrency exchange with more than 7.4 million users.

Cryptocurrency Prices

The cryptocurrency market ended the week on a firm note, with bitcoin (BTC/USD) reaching a session high of $4,425.00. At press time, the index was up 1.6% at $4,368.

Ether is also trading higher against the dollar, with the ETH/USD rallying more than 3% to $305.

Ripple (XRP) lost momentum on Friday, but still managed a weekly gain of 21%.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 452 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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