The Weekend Read: Jan 16

Bitcoin-Price-Ride
1. Bitcoin price action: not as bad as EUR/CHF!

Lots of questions regarding the why behind the recent bitcoin price drop. My view is that this sort of thing happens to thin, concentrated markets with access to leverage. Thin: “exchange” volume is still small and Bitstamp was offline for most of last week. Concentrated: 21% of all bitcoins are held in only 100 of the richest addresses. Access to leverage: margin trading at high leverage and loose risk management is growing by the day.

I found that this piece from WSJ was the best at trying to explain the drivers in the price drop, as it expands upon the opinion that underwater miners are driving down the price due to opex issues, while this article by Simon Taylor takes a longer view but makes some great points on the need for stability and growth thru industry consensus.

For those so inclined, I dusted off the chart pencils to do a quick technical study:

bitcoin chart

2. IBM ADEPT Practictioner Perspective – Pre Publication Draft – 7 Jan 2015

In other (more important) news, the IBM ADEPT white paper was quietly released. I urge everyone to read it as the concepts and potential described in it are fascinating and I dare say inspiring.

We believe that distributed systems like ADEPT will make our planet smarter, more efficient, and open up a huge range of economic opportunities. We believe these technological changes represent the biggest revolution since the origin of general purpose computing and transaction processing systems.

3. The Blockchain: What It Is and Why It Matters by The Brookings Institute

“Blockchain proponents often describe the innovation as a “transfer of trust in a trustless world,” referring to the fact that the entities participating in a transaction are not necessarily known to each other yet they exchange value with surety and no third-party validation. For this reason, the Blockchain is a potential game changer.”

4. COST? TRUST? SOMETHING ELSE? WHAT’S THE KILLER-APP FOR BLOCK CHAIN TECHNOLOGY? by (my man) Richard Brown

“Imagine we’re living five or ten years in the future. Perhaps we have a securities block chain that records ownership of all securities in the world. Perhaps we have a derivatives smart contract platform that records (and enforces?) all derivatives contracts? Maybe, even, there will be a single, universal platform of this sort.”

If you are in Miami at TNABC please stop by to say hello. And my condolences to all those stuck in the NYC winter!

-Todd

1 reply
  1. Matthew Mellon
    Matthew Mellon says:

    I think what the interesting play is the new ASIC’s chip which produces 4 times the hash rate for less power.. With the threat of the Chinese controlling 73 percent of the hash rate this puts us in very interesting position to turn the table’s around.Miami was a massive success! Look forward to seeing you all very soon!
    Best,
    Matthew

    Reply

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