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Crypto-Currency Updates

Crypto-Currency Updates. Ben Best Past President – Cryonics Institute Employee – Life Extension Foundation. OSSLAP 2016 Recommendation: A t least 1% to 5% of portfolio cryptocurrency. (1) Diversified Portfolio (2) Prepare for the future of money (3) Bitcoin is a good store of value

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Crypto-Currency Updates

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  1. Crypto-Currency Updates Ben Best Past President – Cryonics Institute Employee – Life Extension Foundation

  2. OSSLAP 2016 Recommendation:At least 1% to 5% of portfolio cryptocurrency • (1) Diversified Portfolio • (2) Prepare for the future of money • (3) Bitcoin is a good store of value • (4) Profit potential • (5) Overcome fear/intimidation by cryptocurrency

  3. (1) Diversified Portfolio • Cryptocurrency prices are independent of activities on the stock or bond market • Cryptocurrency prices rise with increasing adoption • Cryptocurrency prices fall with negative government actions (although government actions can be positive) or defaults by exchanges (not the cryptocurrency)

  4. (2) Prepare for the future of money • Money is becoming increasingly digital • 90% of American dollars is digital • Denmark has declared there will be no paper or coins for money in that country within 15 years • Cryptocurrencies are world-wide digital assets rather than nation-specific, controlled by government “banks” • Current nation-specific fiat money should lose value compared to cryptocurrencies • Anyone wanting to preserve monetary assets without preparing for the future of money is putting their head in the sand

  5. (3) Bitcoin is a good store of value • Money functions both as a medium of exchange and as a store of value • Gold was historically the best store of value • Durability • Divisibility • Bitcoin is supported by worldwide computing power comparable to more than 1,000 Googles (durable) • Bitcoin is easily divisible into hundred millionths • Storing gold is expensive and risky • Bitcoin’s value does not depend upon any one government, but is distributed worldwide

  6. (4) Profit potential • In August 2015 I invested one-eighth of my net worth into cryptocurrencies • Currently that same investment has resulted in most of my net worth being in cryptocurrencies (despite many losses) • Google Trends indicates Bitcoin use is doubling yearly • Bitcoin supply is not changing much yearly • 16 million in 2017 => 21 million in 2045 (28 years) • When demand doubles, and supply remains the same, price generally doubles

  7. (5) Overcome fear/intimidation by cryptocurrency • Fear of the future and fear of technology is the reason many people do not adopt cryonics • Cryonicists will need to be adaptable if they expect to be living into hundreds of years in the future • Genetic engineering allowed for human insulin to be made by bacteria and could result in human rejuvenation • But very many people are afraid of all GMO foods and all genetic engineering • A young child afraid of cats could be given a small kitten • An investment of 1-5% of net worth in cryptocurrency would not result in much risk

  8. (5) Overcome fear/intimidation by cryptocurrency • Fear and intimidation by technology is an understandable emotion, which I experience almost daily • I do not understand the mathematics underlying Bitcoin cryptography when I have attempted to do so • Still, I believe that anyone who wants to live in an advancing technological society now or in the future should put effort into continuously adapting

  9. What if you had invested in bitcoin after last year’s OSSLAP? • Bitcoin price May 21, 2016 $443.50 • Bitcoin price April 8, 2017 $1,180.91

  10. Short primer on how Bitcoin works • Understanding a few technical details is helpful in evaluating cryptocurrency investment prospects

  11. Ben Best’s Bitcoin Address at Blockchain.info (with QR code)

  12. A Bitcoin transaction

  13. A Bitcoin transaction (technical version)

  14. Transactions are collected into blocks Creating blocks of transactions is called “mining” (analogy to mining gold) Thousands of “miners” all over the world compete in processing transactions

  15. The miner who first solves a puzzle adds his/her block of transactions to the Blockchain and is rewarded with a newly “mined” bitcoin A new block is “mined” every ten minutes “Mining” with computers consumes considerable electricity

  16. Transactions are collected by “miners” in a distributed network

  17. The miner whose first solves the cryptographic puzzle adds his/her block,which is chained to the previous block

  18. How Blockchain works

  19. Blockchain developments • Blockchains are an immutable data technology • Can’t re-write history • In February 2017 the nation of Georgia began registering property (titles, mortgages, rentals) on a government blockchain provable on the Bitcoin blockchain • Similar projects are in development in Sweden and Brazil

  20. State regulation of cryptocurrency exchanges • New York and Hawaii have such onerous regulation that most exchanges have been driven out • Hawaii requires that exchanges keep in reserve a US Dollar amount equal to the Dollar value of the cryptocurrency holdings • In March 2017 New Hampshire made cryptocurrency exchanges exempt from money transmitter licensing • Deregulation of cryptocurrency exchanges in NH • Texas has declared a “right” to own bitcoin

  21. National Bitcoin policies • In February 2017 the Bank of Philippines declared bitcoin a legitimate form of payment • Many Philippinos work abroad and remit money back to the Philippines using bitcoin • Bitcoin became a legitimate form of payment in Japan as of April 1, 2017 • Hundreds of thousands of merchants will be accepting bitcoin in Japan by the summer of 2017 • Digital payment (like Apple Pay or Android Pay) is much more common in Japan and China than in the USA

  22. Bitcoin suffers from success • Bitcoin blocks are limited to One Megabyte in size • Transaction capacity is becoming overloaded • The Bitcoin community is acrimoniously divided between two major possible solutions • (1) Bitcoin Unlimited (BU) – increase block size to 16 Megabytes immediately, with more increases as needed • (2) Segregated Witness (SegWit) • Fixes a bug in Bitcoin • Increases block capacity up to 2-4 times • Allows for implementation of Lightening Network • Instantaneous transactions • Unlimited volume • Requires trusted third party

  23. Bitcoin dominance of cryptocurrencies • On January 1, 2017 Bitcoin was 87% of the cryptocurrency market by market capitalization • Currently Bitcoin is two-thirds of the cryptocurrency market by market capitalization

  24. April 7, 2017 Top 7 Cryptocurrenciesby Market Capitalization(price comparison with May 21, 2016)

  25. Ethereum (Ether, ETH) • Ethereum is a highly efficient blockchainfor smart contracts (14 second confirmation time) • Contracts executed automatically when conditions are fulfilled • Good for gambling and prediction markets • Ether (ETH) is a fuel for network function • Not designed for use as money • In summer 2016 a big smart contract was hacked • Ethereum network was forked to save the money • The other fork became “Ethereum Classic” (ETC) • ETC has been modified to be used as money

  26. April 7, 2017 Top 7 Cryptocurrenciesby Market Capitalization(price comparison with May 21, 2016)

  27. Ripple • Ripple (XRP) tokens can be used for exchange of fiat (government) money, cryptocurrency, or other assets (gold, frequent flier points) • Nearly instant confirmation (3-5 seconds) • Ripple’s price doubled on March 31, 2017 when a major Japanese bank announced it would use the Ripple network

  28. April 7, 2017 Top 7 Cryptocurrenciesby Market Capitalization(price comparison with May 21, 2016)

  29. Litecoin • Lightcoin was designed to use less expensive and specialized computers for mining than Bitcoin • Lightcoin has a 2.5 minute confirmation time • Lightcoin’s price doubled in a week (late March, early April, 2017) when it became apparent that SegWit would soon be adopted on the Litecoin network

  30. April 7, 2017 Top 7 Cryptocurrenciesby Market Capitalization(price comparison with May 21, 2016)

  31. Dash & Monero • Both have encrypted transactions/blockchains that cannot be publically read (greater privacy) • Both are more difficult to implement on mobile wallets • In August 2016 Monero was adopted as an alternative to bitcoin on AlphaBay • AlphaBay is the largest darknet market for illegal drugs • Monero has a 2 minute confirmation time • A Dash app has a 1-4 second confirmation time • Enables cell phone purchase from a vending machine • Is being implemented on a credit card

  32. COINBASE makes crypto buying and selling easy and secure • Open an account at COINBASE.COM • Can purchase and store Bitcoin or Ether • Can use bank account or credit card • COINBASE has never been hacked • Can store cryptocurrencies offline (in a “vault”) • Secure against any possible hacking • Can transfer back to US Dollar bank account

  33. Cryptocurrency news • COIN TELEGRAPH • www.cointelegraph.com

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