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OMG

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Bitcoin is at $9,800 as of writing, with a lot of pinball price action happening over the past couple of weeks. We have heard nothing but good news. Wyoming is going to be defining a Token that is exempt as a security. This is what we have waited for. Yes, the Swiss had a Token ICO protocol come out, but American businesses are always the ones that wait until one of their own goes first. The Token definition bill is heading to State Congress from State Senate soon, and hopefully we continue to get some good news.

The reason I talk so much about American crypto is because, like it or not, all ICOs are working scared because of the SEC. Americans have not been allowed to launch ICOs easily, nor can they invest in them. This flood gate needs to open. We have a ton of talented people who don’t want to move to Timbuktu to launch a revolutionary idea. I would estimate that we have a crypto-friendly ICO state before the summer.

In the meantime, I am continuing my research on the coins that I hear a lot about. OmiseGO is one of the coins that comes up frequently in discussion. This is a Vitalik Buterin (Ethereum Co-Founder) initiative with a lot of big names and organizations behind it. Full Disclosure: OMG is one of the few coins that I own simply because it is related to Vitalik. I wanted to justify my investment by doing a little more digging on what’s going on behind the hood of the company, and what exactly the ecosystem is going to look like for the company.

Background

The Unicorn (first to achieve $1 billion market cap) of ERC-20 Tokens, OMG was launched in 2017 by its parent company, Omise.

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I would categorize Omise exactly like a blend between Ripple’s XCurrent and Xvia for the Asian market. It was founded in 2013, trying to input payment processing systems for organizations and individuals who need quick on-demand payment. An example customer is the e-commerce world. Omise’s software can imbed right onto your website, and you can begin to accept a suite of currencies, both fiat and crypto. The settlement will be in the currency that they have chosen to receive payment in. Sounds like XLM a little bit to me.

OMG token was the next step in the payment processing industry. Omise wanted to provide a way for Southeast Asian populations to be able to utilize the payment processing e-commerce services that they created for their corporate customers. In 2016, KMPG reported that only 27% of the 600 million people in the Southeast Asian region had access to a bank account. With such a tiny penetration rate of financial services, there needed to be a way for people in the region to get their cash on the internet to not only pay for goods and services, but also send money between each other both domestically and globally.

Team

Jun Hasegawa – CEO/Founder: This man knows payment processing. Starting his career in Japan, Jun has focused his 15 year career on figuring out ways to speed up the customer experience of paying for things. His expertise alone has secured over $50 milion in funding for the parent company, Omise. His success within Thailand has made him a key character in Thailand’s interest in blockchain innovation.

Donnie Harinsut – COO/Co-Founder: This guy has the hardest job it seems. He is going around the world to Omise’s different locations, and handling 130 employees. He recently posted a picture with Greylock Partners, a leading Silicon Valley Venture Capital firm. I always like that.

The rest of the Executive team has experience in banking/technology within Southeast Asia, with some being American/European ex-pats. I would say the team is probably the biggest draw to the coin. We already have our historical precedent with their parent company’s success, and they are boots on the ground in their Thailand headquarters. Banking the unbanked would be a little difficult if you are in a cushy Manhattan loft.

Tech Highlights

Decentralized “Plasma” Exchange: The exchange will eventually be freely available to the public, and not owned by any entity. This will allow a structure conducive to the community, where the users have control over their own holdings, and do not need to trust an entity to secure it. This is one of the many reasons why people like Bitcoin blockchain infrastructure so much. When no one is in control, there is inherently less risk.

SDK Wallet: This was the real eye popper during my reading. SDK stands for “Software Development Kit”. This is a wallet platform” you can develop your own white labeled wallet. This will be a way for corporations to have a stake in the blockchain game. They can set up a front-end application wallet that can accept a multitude of different coins/fiat currencies, and convert them into whatever is needed for the given payment or transaction. This is big. I am very excited to see the functionality of a wallet like this.

This is the scenario they are trying to cater to: Remember those 438,000,000 people in Southeast Asia who don’t have bank accounts? They can now access this wallet on their mobile phone, and deposit monies via gift/debit card. This is the same as “Topping up” on cell phone data and minutes. Any time that someone would want to send or pay anything, they would go to a location, “top up” their card with fiat currency, and deposit the contents of the card into their SDK Wallet. They now have complete access to a system that will process their transactions for pennies on the dollar compared to a Western Union. They also have access to pay for E-Commerce goods and services for the first time ever! Sending and receiving money to their families is great, but I really care about them buying stuff online for the first time. No one knows what would happen to the world if all of these people had a way to buy online. I am certainly excited to see it.

Partnerships 

There are too many to list. Once again, the theme I am seeing OMG as the Thai version of Ripple. The Omise team did the heavy lifting with developing these payment processing relationships within the country, with no blockchain included. Through the five years of operation, the level of trust has garnered the support of many corporations, to name a few: McDonald’s (Thai), Thai Airways, Thai Union (seafood producer), Allianz Ayudhya (Ilinsurance). The relationship between all of these companies is that they all want to start accepting things other than cash. Allianz, for example, will be one of the first financial services product providers that people in Thailand will use. As wages in these countries grow, they will want the same services developed countries have: life insurance, health insurance, vacations, and most importantly, savings. The OMG Plasma Network & the SDK Wallet provide that access.

Ecosystem

My most dreaded part of the research. The true value of the OMG token (not the OmiseGO network) is in staking. Staking is pledging your tokens to the network to validate transactions, and you will receive a return on the fees for the transactions. Because the blockchain is completely decentralized, no one controls how much one could theoretically make from pledging their coins. It is all based on supply and demand. If a staking user decides to only validate transactions above a certain fee level, that staking user may be waiting a long time, or forever.

This staking mechanism is not completely defined, as the network is in trials. I will be certainly writing a follow-up article once I have seen how the staking works, and the returns available. Remember: You can choose through OmiseGO how you would like to be paid (USD, EUR, OMG, etc.), which could be a game-changer for people with huge amounts of cryptocurrencies that don’t want to take them out of the market. There may be ways to already do this, but this brings a more commercial use-case, rather than crypto use-case.

The proof of stake system is allowing each of our tokens to act as a “miner” validating transactions. This doesn’t require extreme amounts of energy like bitcoin mining, which means you have the ability to make a passive investment 24 hours per day. I like the sound of this! However, I will wait until I have seen it in action before I make any significant investments/comments.

Conclusion

I love this company. Omise makes complete sense to me. They are a boots on the ground Thai company that has built relationships with partners who want to see their customer experience go into the 21st century. Through OmiseGO, remittance transactions will be cheap, companies can develop their own applications to accept payments for goods/services, and decentralized Proof of Stake ensures investment opportunities and unbiased functions.

I am waiting for the staking information to come out before I can categorize the size of the investment opportunity. OMG uses the Ethereum main net, so these two coins are working together. Just recently, we saw Vitalik with the Thai SEC talking about use cases of OMG. The Thai government has welcomed blockchain innovation with open arms. That can’t be said for many other countries with currencies operating within their borders. This is still very much a project, but it is one that I can’t seem to not be excited about.

 

None of what I have said is a recommendation to buy or sell cryptocurrencies. Please do your own research before investing. As an aside, please do follow me @raijincrypto on Twitter. I would love to know what coins you want more information on, so please do drop me a Tweet if you’d like. Best of luck.

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 27 rated postsMythological God of Lightning. Cryptocurrency/Blockchain writer, evangelist, and friend. May the odds be ever in our favor.




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  1. embersburnbrightly

    February 25, 2018 at 3:07 pm

    Very nice article; thank you!

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Market Overview

Comparing Nasdaq and Bitcoin: What Lessons Can We Learn?

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Bubbles

Over the past few months, lots of people have talked about the similarities between the .com bubble in the early 2000s and the bitcoin market today. It seems that the further down the bitcoin market goes; the more people are using this analogue to help them stay in the game for the long-run.

One of the influential people in the crypto space who often refers to this comparison is Teeka Tiwari at Palm Beach Research Group. While he usually compares the Nasdaq during the late 1990s with the total cryptocurrency market cap, we are here going to compare the Nasdaq during that same period with the market for bitcoin specifically.

Nasdaq vs Bitcoin

In the image above, the top chart is a weekly chart of bitcoin, while the bottom chart is a monthly chart of the Nasdaq 100 Index from 1989 to 2004.

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As we all know, the crypto market tends to behave like the stock market on steroids. Moves are larger, and trends change faster in crypto compared to in stocks. It therefore makes more sense to compare these two charts using different timeframes, which is why I have chosen the monthly chart for Nasdaq while bitcoin is represented with a weekly chart.

There are a few interesting things to take note of regarding this comparison:

The Nasdaq found support following the crash in 2000 and 2001, and has later gained more than 600%. The Nasdaq has, in other words, returned more than three times as much for investors than the broader S&P500 index has done.

One explanation for why all financial bubbles have so much in common is that the one thing that causes them – human fear and greed – never changes.

What was different during the dot-com bubble back in the early 2000s was that communication was slow and ineffective compared to the high-speed Internet connections we have today on our phones and laptops. This is one of the reasons why it took the Nasdaq a few years to rise 1,700%, while bitcoin managed to achieve the same return in just a few months.

Similarly, it took the Nasdaq 30 months to fall 78%, while bitcoin lost 70% in just one and a half month.

Another thing both markets have had in common is that when they were down 70% from the top, many people completely lost faith in the future of these markets.

It has been pointed out by observers that even the arguments these people used against investing in the said markets were largely the same: No underlying value, too much volatility, too much regulations/lack of regulations/bad regulations, lack of social responsibility from the market actors, etc.

In hindsight, it has become clear that only the investors who had the mental clarity to ignore all this noise during the early 2000s were able to catch the 600% move that followed in the Nasdaq.

Diversification saved investors

When we are talking about ignoring noise and riding out the storm, let’s not forget that many of the companies that made up the Nasdaq in the early 2000s did eventually go out of business. Betting everything on a single company, in many cases, ended up being a catastrophe for the investor, despite the fact that the sector as a whole did incredibly well. This really made the benefit of diversification clear to everyone.

We can assume that the same is true for the cryptocurrencies of today. Some will emerge and become hugely successful, while others will slowly but steadily decrease in value and become irrelevant. Which ones they are is extremely difficult to tell at this early stage, but the lesson to be learned is clear: Diversification may be the only free lunch we will ever get in the world.

Featured image from Pixabay.

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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4.3 stars on average, based on 33 rated postsFredrik Vold is an entrepreneur, financial writer, and technical analysis enthusiast. He has been working and traveling in Asia for several years, and is currently based out of Beijing, China. He closely follows stocks, forex and cryptocurrencies, and is always looking for the next great alternative investment opportunity.




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Op-Ed

Is Manipulation Behind Bitcoin Cash’s Absurd Rally?

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Although you wouldn’t know it by today’s prices, bitcoin cash (BCH) has topped the crypto market leader board this month. The digital currency more than doubled over the span of 18 days, and in doing so far outpaced the broader market. But a closer examination of the value drivers suggest manipulation could be partly responsible for the rally.

As a reminder, the author has no vested interest in smearing BCH as I believe it to be one of the more advantageous coins on the market today. That said, the circumstances surrounding the most recent rally are peculiar to say the least.

What’s Up with Bitcoin.com?

A Hacked user informed me earlier this week that Bitcoin.com has been using the “BCH” ticker next to the word “bitcoin”. Normally, the ticker “BTC” is reserved for bitcoin, which is the original blockchain we all know about. Instead, the website quotes “BTC” next to the term “bitcoin core”.

In other words, BCH is quoted next to bitcoin and BTC is referred to as bitcoin core. See here for yourself:

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For most readers of Hacked, the distinction is easily discernible, but for new traders the difference isn’t easily gauged.

The first question I have is, how many people bought bitcoin (BCH) thinking they were receiving actual bitcoin (BTC)?

Bitcoin.com describes itself as the “premier source for everything bitcoin.” Although the website doesn’t appear to offer a full-fledged trading platform, users can purchase bitcoin and bitcoin cash using the following link.

It is unclear how long the website has been referring to BCH as bitcoin. For those of us who’ve been following the market for some time, the way BTC and BCH are quoted is certainly strange.

Antpool

A large cryptocurrency mining group by the name of Antpool has also been accused of pumping BCH in recent weeks. The pool announced about six days ago that it is responsible for confirming more than 8% of all bitcoin cash transactions. In addition to confirming those, Antpool is also said to be burning BCH on a daily basis in order to reduce supply and boost prices.

Of course, crypto pumps do not require such elaborate setups to achieve their goals. Pump-and-dumps can be orchestrated rather easily through a chat group on social media. But Antpool does have a large and privileged position in the BCH ecosystem, which has raised suspicion over its recent actions.

Bitcoin Cash is Overbought, According to Tom Lee

Fundstrat’s Tom Lee recently weighed in on the bitcoin cash phenomenon, concluding that the cryptocurrency was overbought. In his view, investors should stick with bitcoin if they had a choice between Core and Cash.

In a segment on CNBC’s Fast Money, Lee said:

“I prefer not to pick winners and losers when we’re looking at cryptocurrencies like bitcoin/bitcoin Cash… Both have merits but if I was putting new money to work today… I would be a lot more interested in buying a lagger that could attract inflows rather than something that’s potentially overbought.”

Bitcoin cash added around $1,000 to its value between Apr. 6 and 23, with prices peaking near $1,600. The cryptocurrency corrected sharply lower on Wednesday and was still declining as of Thursday’s early-morning session. At the time of writing, BCH/USD was down 4.6% at $1,268.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

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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4.5 stars on average, based on 455 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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Decentralization

JP Morgan’s Surprise Cryptocurrency Fees are a Reminder of Why Decentralization Is Sorely Needed

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JP Morgan Chase & Co has been hit with a class-action lawsuit by cryptocurrency traders over allegations of unannounced fees and higher interest rates on purchases of digital currencies. Though the allegations have not been proven, extra fees are a tactic routinely employed by traditional banking institutions. In the case of JP Morgan, this has karma written all over it given the way its chief executive has ridiculed digital assets by associating them with fraud.

Class Action Lawsuit

Traders from across the United States are seeking statutory damages of $1 million for unannounced interest charges and fees on cryptocurrency transactions between January and February of this year. The named plaintiff in the lawsuit is Brady Tucker, an Idaho resident who paid a total of $163.91 in fees and surprise interest charges over a six-day stretch.

According to information obtained by Reuters, the lawsuit accuses the bank of violating the U.S. Truth in Lending Act, a piece of legislation that requires credit card issuers to inform customers in writing of any notable change in fees.

The lawsuit asserts that Tucker tried to resolve the dispute by calling Chase’s customer support service directly. His request was turned down, prompting him to seek legal help. According to Bloomberg, the case in question is Tucker v. Chase Bank USA NA, 18-cv-3155, U.S. District Court, Southern District of New York (Manhattan).

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The Growing Case for Decentralization

Depending on who you ask, the allegations against JP Morgan are akin to cryptocurrency fraud not unlike the kind Jamie Dimon talked about while ridiculing bitcoin. But the irony in Dimon’s comments extend far beyond Chase’s latest dealings.

As the actions of Chase bank and other financial institutions have clearly demonstrated over the years, those who control the size and growth rate of fiat money cannot be trusted to do the right thing. As Nassim Taleb argues in The Black Swan, banks have a tendency of losing as much money as they make in the long run due to shady business practices and high-risk ventures. Decisions like these are easy when you are Too Big to Fail.

Decentralization, like the kind advocated by blockchain startups and cryptocurrencies, allows users to trade directly with each other without having to go through a (predatory) middleman. Decentralized systems not only help participants avoid unnecessary fees, red tape and other forms of unwanted intervention, they are virtually impossible to shut down. In this vein, decentralized currencies give people a fighting chance in their battle against never-ending inflation. As we’ve argued before, this is not only a prudent fight, but a noble one as well.

Cryptocurrencies that rely on decentralization offer society a unique value proposition unlike anything we’ve seen in recent history. What’s more, their adoption is not contingent upon us leaving the realm of traditional finance – at least, not yet. That’s because cryptocurrency started off as an obscure and esoteric asset class but has since become a value store for investors. Tomorrow, it will become a viable medium of exchange accepted worldwide.

That said, we are still in the very early days of the crypto revolution and it may be a while still before we can conclusively prove people like Dimon wrong. But crypto backers and investors should take comfort in knowing that big banks rarely lead in disruption these days. They have the resources to play catch-up, which they are clearly doing with blockchain.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

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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4.5 stars on average, based on 455 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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