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Coinbase Alert: Amazon Is Coming

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Amazon is to the 21st century what Walmart was to the 20th century.  Slowly, Amazon is putting its imprint onto more and more areas of business.  Already AMZN is one of the world most valuable companies worth more than $725 billion.  Their sheer size allows them to go wherever they want. Last year’s jumbo acquisition of Whole Foods is a good example.

From these moves, it is clear that Amazon intends to avoid becoming the “one trick pony” that its rival Apple has succeeded in becoming.  That means that Amazon must forever be searching for giant technology centric markets. Cryptocurrency may be on the horizon.

Just yesterday the U.S. Patent Office issued # 9,947,033 to Amazon for software titled Streaming Data Marketplace.  CNBC first reported the headlines.  Here are some direct excerpts from the patent application:

Streaming analytics technologies hold the promise of making vast volumes of data available in a low latency fashion. However, while prior technologies may be able to provide data in a low latency fashion, the raw data may have low value (or have less valuable than the data could have) until the raw data is enhanced by correlating the raw data with additional data, such as by matching records using common values.

One example is a data stream that publishes or includes global bitcoin transactions (or any cryptocurrency transaction). These transactions are completely visible to each participant in the network. The raw transaction data may have little meaning to a customer unless the customer has a way to correlate various elements of the stream with other useful data.

For example, a group of electronic or internet retailers who accept bitcoin transactions may have a shipping address that may correlate with the bitcoin address. The electronic retailers may combine the shipping address with the bitcoin transaction data to create correlated data and republish the combined data as a combined data stream.

A group of telecommunications providers may subscribe downstream to the combined data stream and be able to correlate the IP (Internet Protocol) addresses of the transactions to countries of origin. Government agencies may be able to subscribe downstream and correlate tax transaction data to help identify transaction participants.

Translating Into English

Amazon filed this patent back in 2014 so it is obvious that cryptocurrencies were not the only application they had in mind for their Streaming Data Marketplace.  That doesn’t change the fact that crypto has evolved in value to over $300 billion and adoption of bitcoin by Amazon would be a major legitimizing force in the whole crypto movement.

The one big thing standing in the way of acceptance of a large number of relatively small value transactions is liquidity (speed) and Amazon vendors profits could be enhanced or completely wiped out by crypto volatility.  Before getting all excited, the Streaming Data Marketplace would need to address this issue.

Without trying to get into the techno garbodigook, one way to address the problem would be for Amazon to create their own massive crypto exchange that not only provided low latency transactions but serve as yet another Amazon service.  Just using the Amazon name would bring enormous credibility.

The Value Of the Data

After reading through the patent, it is obvious there are many applications to be developed. Helping regulators may be one of those. Here is what the patent application states.

For example, a law enforcement agency may be a customer and may desire to receive global bitcoin transactions, correlated by country, with ISP data to determine source IP addresses and shipping addresses that correlate to bitcoin addresses.  The agency may not want additional available enhancements such as local bank data records.

Good Or Bad For Bitcoin (And Others

Is having all of the additional data available to law enforcement and other regulators a good or bad thing?  After all, doesn’t this take away all the anonymity that attracted so many to cryptocurrencies in the first place?

There are arguments on both sides of this issue but I think the benefits are worth some consideration.  The biggest is that if Amazon and all of its vendors have a mechanism in place to accept payment in bitcoin, this is a huge plus.  The day this happens eBay and virtually every other online merchant will get with the game. And let’s remember we are talking about far more than just bitcoin.  The downside is that if you have obtained your crypto from some questionable activities or wish to maintain your anonymity, stay away from online shopping.

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 96 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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  1. bitsurfer

    April 20, 2018 at 1:29 am

    So whats makes this a Coinbase Alert? No mention of Coinbase in the article. Just clickbait?

  2. Aeonblue

    April 20, 2018 at 10:25 am

    Hey I appreciate the article. Just so you know it’s gobbledygook

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CoinShares Bitcoin ETN Adds USD, Markets Rally

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Given the positive trend in the cryptocurrency market today, you might think that a bitcoin ETF somehow slipped through the cracks. While that isn’t the case just yet, you wouldn’t be too far off. CoinShares, a digital asset management firm domiciled in the Channel Island of Jersey, has announced a bitcoin exchange-traded note (ETN) product that Americans can now get their hands on more easily.

CoinShares chief Ryan Radloff is quoted in Bloomberg as saying: “Everyone that’s investing in dollars can now get exposure to these products, whereas before they were only available in euros or Swedish krona. Given the current climate on the regulatory front in the U.S., this is a big win for Bitcoin.”

As Fundstrat’s Tom Lee pointed out, the ETN, which is dubbed Bitcoin Tracker One (CXBTF), is “quoted in USD” despite the fact that it’s a Swedish-based product.  Traders went so far as to suggest that this new product was the catalyst for today’s “green candles,” and if retweets are endorsements, then Fundstrat’s Lee agrees.

Source: CoinMarketCap

The CoinShares ETN is not a new product and has been trading on Nasdaq Stockholm for several years. But now that it’s also based on U.S. dollars, the brokerage community can access it and offer it to U.S.-based clients. Lee likened it to Grayscale’s bitcoin investment trust (GBTC) and noted that it “trades at NAV, so returns are virtually identical to bitcoin.” Indeed, as CoinShares’ bitcoin ETN has shed more than half its value this year alongside the decline in the bitcoin price. Lee provided the following snapshot into Bitcoin Tracker One:

Bitcoin Rivalry

Meanwhile, if you ask CoinShares’ Radloff, the Grayscale product is flawed because of a premium attached to the bitcoin price. Radloff told Bloomberg that CoinShares’ products have managed to avoid the premiums while still providing liquidity.

Wall Street, however, may not be so keen to adopt the product. An investor tweeted that when he attempted to purchase Bitcoin Tracker One in his Merrill Lynch IRA, the product was blocked. This individual was willing to redirect his assets to another firm just to gain access to the ETN and tweeted: “Can someone point me to a new IRA provider that will let me trade this? I’ll move my funds over today.”

Just yesterday, former PayPal CEO Bill Harris said on CNBC that the bitcoin price was headed to zero. But with developments like this bitcoin-esque product making its way into the market, he may have to eat his words.

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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4.6 stars on average, based on 37 rated postsGerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. She owns some BTC and ETH.




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Coinbase Chief Brian Armstrong on Bitcoin Bubbles and Corrections

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It’s not often that you have two blockchain pioneers like Coinbase CEO Brian Armstrong and Ethereum Co-Founder Joseph Lubin address the market in the same week. But in recent days, the stars aligned, with Armstrong and Lubin both meeting with Bloomberg for separate interviews.

While each of them has their own take on the state of the market, they appear to agree on overarching themes that have gripped cryptocurrency investors of late surrounding digital currency prices and the bubble theory.

Coinbase’s Armstrong didn’t shy away from questions on bitcoin’s price, which has taken investors on a roller coaster ride since its December 2017 peak of more than $19,000 and recent dip below $6,000. Today, a corrective rally is in place in which the bitcoin price is up more than 6% on CoinMarketCap to $6,455. Armstrong suggested that it’s part of the evolution of the emerging technology.

“This technology is going through a series of bubbles and corrections. We’ve actually been through about four or five of them now where bitcoin made this big run-up in price and there was … irrational exuberance and it corrected back 60-70%. and each time it does that it’s at a new plateau,” said Armstrong.

Joseph Lubin, who in addition to co-founding Ethereum is at the helm of ConsenSys, seems to agree, adding in a discussion with Bloomberg that “each of these bubbles has the advantage to bring attention to our ecosystem.”

Coinbase and Crypto

Coinbase, which launched about six years ago, holds anywhere between $10 billion and $20 billion of clients’ cryptocurrency assets on a given day. In 2017, Coinbase transacted approximately $150 billion in cryptocurrency volume. Armstrong likened the bitcoin bubbles to the growth of Coinbase, which is the most popular U.S.-based cryptocurrency exchange.

For instance, as the bitcoin price has traversed this series of bubbles and corrections, Coinbase’s growth has performed in a similar trajectory, with the number of daily new users rising on the heels of major market corrections.

Armstrong is in the camp of comparing cryptocurrencies to the internet of 2001, pointing to “a lot of good companies that got started in the trough as well,” such as Facebook, for instance. While the expectations for the cryptocurrency prices may be “all over the map,” he said that “the real world adoption and usage is pretty steadily increasing.”

While adoption and usage may be on the rise, don’t expect to walk into your local Starbucks and pay with bitcoin any time soon, at least not in the U.S. The reason, Armstrong suggests, is that payments aren’t a major “pain point” in the U.S. unlike some developing economies. As much as 90% of cryptocurrency usage surrounds investments, leaving a mere 10% for “real world usage.”

Armstrong, who more than once likened Coinbase to the New York Stock Exchange, also addressed topics like regulation and ICOs, saying of the latter that the exchange “is not trying to list everything under the sun.”

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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4.6 stars on average, based on 37 rated postsGerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. She owns some BTC and ETH.




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ETFs

Winklevoss Twins Shift Crypto Focus to Retail Investors, not Resentment

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If anyone in the world has good reason to feel resentment toward Wall Street regulators for rejecting their bitcoin ETF application, it’s Cameron and Tyler Winklevoss of the Gemini cryptocurrency exchange. Their bitcoin ETF product was rejected by the U.S. SEC not once, but twice, the most recent decision of which was responsible for igniting the crypto market meltdown that was exacerbated by the VanEck bitcoin ETF delay.

Instead of harboring feelings of resentment, however, the brothers only seem to be empowered by the development, as evidenced by their decision to focus on the one client group in which they can depend — retail investors, according to a Bloomberg report. If investors could adopt a similar big-picture perspective, perhaps we wouldn’t be in the current situation in which more than $20 billion has been shaved off the total value of the cryptocurrency market over 24 hours.

In fact, for Cameron and Tyler Winklevoss, it’s not only business as usual but it’s more business than usual by the retail segment.

“Wall Street is taking cryptocurrencies seriously, however, the vast majority of Wall Street firms are still not participating in the cryptocurrency market, which remains primarily a retail-driven market. This will change over time, but it will take time,” Tyler Winklevoss told Bloomberg.

Winklevoss isn’t the only one to feel this way. Adam White, vice president and general manager at Coinbase, a rival exchange to Gemini, recently told CNBC: “What’s so unique about cryptocurrencies, and in many ways this asset class, [is that it] was driven by retail investors — not institutions,” characterizing the interest among institutional investors as “profound.”

OTC Market

Meanwhile, a report by Tabb Group earlier this summer revealed that trading volume in bitcoin’s over-the-counter (OTC) market exceeded that of exchanges as much as threefold, which would attach a value of $12 billion in OTC bitcoin trades every day. Here’s the tweet by crypto industry engineer Eric Wall –

A report on Yahoo Finance concluded that the dramatic selling in the cryptocurrency markets on the heels of the Winklevoss bitcoin ETF rejection could have been the result of bitcoin whales selling not on exchanges like Gemini, where the adjusted trading volume over the last 24 hours hovers at $69 million, but instead the OTC market. This inserts a bit more uncertainty into the drivers of cryptocurrency prices.

Nonetheless, it appears clear that the market is placing a great deal of emphasis on a bitcoin ETF, or lack thereof currently. Such a product could open up the asset allocation of large pension funds, for instance, to crypto.

And as for the Winklevoss twins, they already have a “first” in this market. They were behind the maiden Bitcoin Futures Contract (XBT) on the CBOE last December. And if the CBOE has its way, it will be part of the inaugural bitcoin ETF, as well.

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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4.6 stars on average, based on 37 rated postsGerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. She owns some BTC and ETH.




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