Category Archives: Bitcoin (BTC)

Gunbot Crypto Trading 1: Starting With Gunbot

What is Gunbot?

Gunbot is an automated bot (robotic software) for trading cryptocurrencies, primarily trading Bitcoin with other crypto coins (‘altcoins’). It was coded by Gunthar De Niro (‘Gunthy‘) with support from the Bitcointalk community.

The theory for trading with Gunbot is relatively straightforward:

  1. You deposit some Bitcoin on a trading exchange.
  2. You request remote access to your account via an API Key and give the Key details to the bot.
  3. You setup the bot, using particular settings to specify how you want it to trade (e.g. what level of risk/reward, etc.).
  4. You start the bot. It runs 24/7 and when the trading conditions are right it buys and sells coins on your behalf using the Bitcoin in your account.
  5. The intention is that it will buy an altcoin at a low price, determined by its trading history, and hold on to it until its price goes above a certain threshold (allowing for trading fees) when it will sell it.
  6. In most cases this works well and makes a profit, and the bot is then ready to make the next trade.
  7. In a small proportion of cases the altcoin price goes down steadily and cannot be sold (this is known as ‘holding a bag’). At that point you need to step in and, in some cases, sell the altcoin at a loss.
  8. With good settings, and regular monitoring, in my experience trading with Gunbot will make more money than it loses and can produce a significant income over time.

 

Preparing to Use Gunbot

Before you use Gunbot for the first time it is worthwhile to learn about how it operates and what its features and limitations are.

  1. Spend some time in the Gunbot Wiki to get familiar with the bot, how it runs, what strategies it uses, etc.
  2. Read at least the last dozen or so pages of the Gunbot thread on BitcoinTalk to learn about recent changes, and any issues or bugs found. Join BitcoinTalk if you aren’t already a member.
  3. Do the same for the Gunthy forum.
  4. When you feel ready to take the plunge buy a copy of Gunbot from an authorised reseller.
  5. Get an API key for your exchange(s) and have it linked to your Gunbot licence by your reseller.
  6. Join the Telegram group to get support (the link will be provided once you’ve bought the bot).

When you’re ready, see my next blog post and learn how to install and setup Gunbot.

 

Why Bitcoin is Different

If you’re new to the Bitcoin space, the last few months have been pretty crazy.

There have been some steep climbs and heart-stopping drops making for a roller coaster of emotion that’s not easily controlled. The price action is both thrilling and at times, painful, so it’s easy to lose sight of what you’re investing in. All the coins seem to be running together, so what’s the difference? How is one coin to be distinguished from another? And more importantly, how is an investor to know what the long term value of a coin will be?

Bitcoin (Image: MichaelWuensch/Pixabay)
Bitcoin (Image: MichaelWuensch/Pixabay)

In this article, I’m going to make the case for what makes Bitcoin different, how Bitcoin is a system that, despite all the cloning, has yet to be truly replicated.

Real Innovation

To really understand the value proposition of Bitcoin, it helps to look at a bit of history. It’s tempting to think that the newest ICO or altcoin is the one that will finally “improve” Bitcoin and fix all of its problems and that Bitcoin will be relegated to the dustbin of history due to its lack of some “feature”. Indeed, nearly every altcoin, ICO or hardfork thinks that they’re being innovative in some fundamental way. What’s missed is that the biggest innovation has already happened.

Decentralized digital scarcity is the real innovation and Bitcoin was the first, and, as this article will make clear, continues to be the only such coin. All the other so-called innovations such as faster confirmation times, changing to proof-of-whatever, Turing completeness, different signature algorithm, different transaction ordering method and even privacy, are really tiny variations on the giant innovation that is Bitcoin.

It’s important to remember here that alternatives to Bitcoin have been proposed since 2011 and none of them have even come close to displacing Bitcoin in terms of price, usage or security. IxCoin was a clone of Bitcoin created in 2011 with larger block rewards and a premine (large number of coins sent to the creator). Tenebrix was an altcoin created in 2011 that tried to add GPU resistance and again had a large premine. Solidcoin was another altcoin created in 2011 with faster block times and again, a premine. About the only ones that survived (and not living out a zombie existence) out of that early altcoin era are Namecoin and Litecoin, which distinguished themselves by NOT having a premine.

Read more: Medium

Handing your Happiness to Mr. (Crypto) Market

Recently, in personal communications and small Telegram groups, I’ve noticed signs of quiet desperation growing as dreams of a quick reversal to new all-time-highs fade.

Meanwhile, Twitter is noisy with technicians, and egos attached to price predictions. Predictions are made with seeming conviction, because if right, egos will claim clairvoyance.

Here’s the truth: no one knows how far we’ll fall.

Bitcoin price chart (Image: geralt/Pixabay)
Bitcoin price chart (Image: geralt/Pixabay)

Certainly, we can make educated guesses based on technical indicators, and even predict points of support based on our early explorations of crypto fundamentals, but these are all educated guesses. Our techniques will mature over time, but reflecting on my career in the equity markets, everything will remain an educated guess. We’re predicting the behavior of humans, after all.

Some concrete numbers. If 2018 truly echoes 2014, then we could very well be in for another ~50% drop from here.

Upset that I said that? Already typing FUD!!!! in the comments? Wait until the end; discussing that reaction is the entire point of this post.

Read more: Medium

Why America Can’t Regulate Bitcoin

Hearings on Bitcoin and its derivatives are being held in the USA on a regular basis, and invariably the expert witnesses fail to properly describe the actual processes going on.

If they used the correct language and excluded all analogies, the only possible conclusion would be that America cannot regulate Bitcoin under its current legal system. The Constitution guarantees the inalienable rights of American citizens, and therefore Bitcoin is a protected form of publishing. The only way Bitcoin can be made regulable is if the Constitution is changed; and that does not mean adding a new Amendment, it means removing the First Amendment entirely. Inevitably the anti-Bitcoin protagonists will face a robust and ultimately successful legal challenge that will remove the possibility of any sort of “BitLicense” or interference from the CTFC, FinCEN or any other agency. It will also remove any possibility of interference at the State level. The consequence of adhering to the basic law of the United States will cause America to become the centre of all Bitcoin business for the entire world.

Let me explain why this is the case.

Bitcoin Network (Image: MaxPixel)
Bitcoin Network (Image: MaxPixel)

Some say that Bitcoin is money. Others say that it is not money. It doesn’t matter. What does matter are three things; that Bitcoin is, that the Bitcoin network does what it is meant to do completely reliably, and what the true nature of the Bitcoin network and the messages in it are.

Bitcoin is a distributed ledger system, maintained by a network of peers that monitors and regulates which entries are allocated to what Bitcoin addresses. This is done entirely by transmitting messages that are text, between the computers in the network (known as “nodes”), where cryptographic procedures are executed on these messages in text to verify their authenticity and the identity of the sender and recipient of the message and their position in the public ledger. The messages sent between nodes in the Bitcoin network are human readable, and printable. There is no point in any Bitcoin transaction that Bitcoin ceases to be text. It is all text, all the time.

Bitcoin can be printed out onto sheets of paper. This output can take different forms, like machine readable QR Codes, or it can be printed out in the letters A to Z, a to z and 0 to 9. This means they can be read by a human being, just like “Huckleberry Finn”.

At the time of the creation of the United States of America, the Founding Fathers of that new country in their deep wisdom and distaste for tyranny, haunted by the memory of the absence of a free press in the countries from which they escaped, wrote into the basic law of that then young federation of free states, an explicit and unambiguous freedom, the “Freedom of the Press”. This amendment was first because of its central importance to a free society. The First Amendment guarantees that all Americans have the power to exercise their right to publish and distribute anything they like, without restriction or prior restraint.

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

This single line, forever precludes any law that restricts Bitcoin in any way.

Read more: HackerNoon

The Bullish Case for Bitcoin

With the price of a bitcoin surging to new highs in 2017, the bullish case for investors might seem so obvious it does not need stating. Alternatively it may seem foolish to invest in a digital asset that isn’t backed by any commodity or government and whose price rise has prompted some to compare it to the tulip mania or the dot-com bubble. Neither is true; the bullish case for Bitcoin is compelling but far from obvious. There are significant risks to investing in Bitcoin, but, as I will argue, there is still an immense opportunity.

Genesis

Never in the history of the world had it been possible to transfer value between distant peoples without relying on a trusted intermediary, such as a bank or government. In 2008 Satoshi Nakamoto, whose identity is still unknown, published a 9 page solution to a long-standing problem of computer science known as the Byzantine General’s Problem. Nakamoto’s solution and the system he built from it — Bitcoin — allowed, for the first time ever, value to be quickly transferred, at great distance, in a completely trustless way. The ramifications of the creation of Bitcoin are so profound for both economics and computer science that Nakamoto should rightly be the first person to qualify for both a Nobel prize in Economics and the Turing award.

Bitcoin Cryptocurrency (Image: MaxPixel)
Bitcoin Cryptocurrency (Image: MaxPixel)

For an investor the salient fact of the invention of Bitcoin is the creation of a new scarce digital good — bitcoins. Bitcoins are transferable digital tokens that are created on the Bitcoin network in a process known as “mining”. Bitcoin mining is roughly analogous to gold mining except that production follows a designed, predictable schedule. By design, only 21 million bitcoins will ever be mined and most of these already have been — approximately 16.8 million bitcoins have been mined at the time of writing. Every four years the number of bitcoins produced by mining halves and the production of new bitcoins will end completely by the year 2140.

Read more: Medium

An Open Letter to Banks about Bitcoin and Cryptocurrencies

Dear Mr Bank Manager,

This is not an easy letter for me to write. I have been a customer of yours for over 20 years. You were there with a loan for me when I bought my first car; you helped arrange the mortgage when I bought my first house, and you even helped me launch my first business. We have been through so much together.

And I’ll let you into a little secret?

You were my first! Don’t worry, I know I wasn’t yours. I think this is why this relationship means so much more to me than you.

You may not have noticed that our relationship has changed, you have been so busy since that big financial crisis that we are doing less together. I got my last loan from my supermarket as they had a better rate and my last mortgage from another bank. These days I am only using you to hold money for me and pay my bills.

Bitcoin (Image: Antana/CCBY-SA2)
Bitcoin (Image: Antana/CCBY-SA2)

We are like passing ships in the night and I am worried that if we don’t talk we might have to separate.

Recently I made this new friend called Bitcoin; a form of Cryptocurrency, I call her Crypto, you have probably heard of her. She is fresh and exciting, and I want you to get to know her too. I want you to make her part of our relationship.

I know I am neither a bank manager nor an economist and you have all these arguments for why Crypto will fail, but I am someone using Crypto in my daily life and I know that this is going to be an ever-increasing need for me, and I want us to share this experience.

I know you are scared, or maybe you just don’t understand it. Maybe you think Bitcoin is a Ponzi scheme and everyone buying it is only doing so to make a quick buck. Sure, some of us are, like some of us who bought shares during the Dot Com boom and lost money when it crashed. But look what happened after that, we got some of the most significant companies in the world: Amazon, Google and Facebook.

Read more: HackerNoon

Bitcoin Will Be the ‘One Online Equivalent to Gold’

Peter Thiel has once again endorsed bitcoin, which he recently argued is tantamount to digital gold.

And much like gold, the billionaire co-founder of PayPal conjectures that the cryptocurrency is destined to be a store of value rather than a means of payment.

Bitcoin (Image: MichaelWuensch/Pixabay)
Bitcoin (Image: MichaelWuensch/Pixabay)

“It’s like bars of gold in a vault that never move,” he told a CNBC reporter during a conversation at the Economic Club of New York last week, adding

“It’s sort of hedge of sorts against the whole world falling apart.”

He also struck a bullish tone on bitcoin in particular – versus other cryptocurrencies – suggesting that the largest cryptocurrency by market capitalization will maintain its position.

“There will be one online equivalent to gold,” he reportedly claimed, “and the one you’d bet on would be the biggest.”

Read more: CoinDesk

Cryptocurrencies as Portfolio Diversification

As Bitcoin and cryptocurrencies gain more and more media coverage, investors who have never been involved in crypto are increasingly asking the question of whether cryptocurrencies could provide meaningful portfolio diversification to the traditional portfolio asset allocation.

In order to answer this question one must look both backwards and forwards: backward looking to determine past correlations and risk-reward profile; and forward looking to understand the real risk of central bank policy mistakes and government debasement of fiat currencies.

Open bank vault (Image: ahobbit/Pixabay)
Open bank vault (Image: ahobbit/Pixabay)

Diversification of portfolio focuses on how the volatility of an underlying security plus their correlation with core market assets impacts a portfolio’s risk-return characteristics over the long-term or during periods of extreme macroeconomic or market stress.

Diversification drivers

The main reasons why Bitcoin provides portfolio diversification are: investability, politico- economic features, correlation of returns, and risk-reward profile.

Read more: CoinTelegraph

BCS Northampton: Blockchain Lecture

This evening I attended an interesting lecture on Blockchain at the University of Northampton, presented by Drs Ali Al-Sherbaz and Scott Turner. It covered the basics of blockchain, include hashing, mining, signing, creating blocks, and so on.

It then covered particular examples of blockchain projects within the University, including one on social interactions and one on network activity logging. Apparently Blockchain is one of the key topics the University will be addressing in its future development strategy.

What wasn’t covered, however, was Bitcoin and in general most comments were dismissive of cryptocurrency. I think that will prove to be shortsighted. Most of the criticisms and limitations levelled at Bitcoin and other cryptocurrencies during the event were demonstrably false or at least incomplete and a more detailed discussion would have demonstrated that.

Personally I think cryptocurrencies are here to stay, with Bitcoin taking the role of the reserve cryptocurrency, and their positions will get stronger and stronger over time. Whether they will eventually replace fiat currencies is less clear, but I certainly wouldn’t dismiss the possibility.

For sure they will massively disrupt the banking and financial sectors (see, for example, Bank Of America: Our ‘Inability To Adapt’ Could See A Failure To Compete With Crypto).

Australian IT Employees At Bureau Of Meteorology Suspected Of Illicit Crypto Mining

The Australian Federal Police (AFP) are investigating two employees at the Bureau of Meteorology for allegedly using the bureau’s computers to mine cryptocurrencies, the Australian Broadcasting Corporation (ABC) reports today, March 8.

Bitcoin mining (Image: Pixabay)
Bitcoin mining (Image: Pixabay)

The AFP appeared at the Bureau of Meteorology last week, Feb. 28, with a search warrant and questioned two IT employees, one of whom has since gone on leave. ABC reports that no charges have yet been filed, and both the AFP and the Bureau of Meteorology have declined to comment pending the ongoing investigation.

Read more: CoinTelegraph