Coin News

Ripple Labs has named former National Economic Council director Gene Sperling to its board of directors.

It's time to welcome our robot overlords, says University of Manchester economist Diane Coyle in the Financial Times.

While there's a lot of fear out there about how machines will replace human jobs in the future, Coyle argues it's possible automation could be a really good thing for the economy.

This is particularly true if you are also worried about persistently low productivity growth, which Coyle connects with secular stagnation.

She's wrong on that point, but I'll get to that in a bit.

Coyle gives the historical example of the washing machine: very suddenly cleaning the household's clothes and linens went from a physically intensive, hours-long process to something that could be done more or less with the push of a button. That freed up women to use that time for other things, and their productivity went up in a way that people weren't expecting when laundry still had to be done by hand.

This isn't to say that as workers — particularly low skilled workers — become displaced by automation they won't have a tough time finding another job. But, Coyle says, anyone who is worried about secular stagnation should prefer the robots to anemic productivity growth.

Here's the thing: No one is quite sure that productivity growth is the answer.

Sure, if the robots come and take everyone's jobs, but then people find ways to work the same amount doing different things, productivity will increase drastically. The economy will probably boom. But this assumes that nothing blows up the global economy before we get to that point.

Here's Larry Summers, who has been beating the drum on secular stagnation, throwing some shade on this: 

The important point to recognize is that – as the experience of the US economy in the 1930s demonstrates – even with rapid innovation it is possible for economic performance to be very poor when finances are not successfully managed. Recent good news about the state of the US economy should not blind us to this reality.

If low interest rates continue to create asset bubbles that then pop dramatically — which seems to be the real fear of some people who are talking about secular stagnation — the economy could be in rough shape for a long time before the robot (or demographic) saviors come.

It is possible to be afraid of robots and of asset bubbles at the same time.

SEE ALSO: Bitcoin-Wallet Company Raises $75 Million As The Cryptocurrency Faceplants

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The previously leaked rumor of Coinbase raised $75 million is now confirmed. The company did, in fact, raise that much money and the investor list is juicy for speculators and bitcoin lovers alike. In their announcement, Coinbase said their fundraiser is something they’re honored to be a part of, stating the following: “Today’s fundraise gives […]

The post New York Stock Exchange and Former Citigroup CEO Invest in Coinbase appeared first on CryptoCoinsNews.

 In line with an earlier scoop we had, Coinbase announced that it has raised a serious $75 million growth round led by DFJ. Other participants include USAA Bank and NYSE, while existing investors including Andreessen Horowitz, Union Square Ventures, and Ribbit Capital also participated. It’s the largest funding round to date for a Bitcoin-focused company, and comes amid the… Read More

See? Bitcoin is not dead

Coinbase, the popular bitcoin wallet site, just raised $75 million in Series C funding. It is the largest funding round ever for a bitcoin-related company, according to Dan Primack, who reported the news.

A report from last week from Re/code suggests that the company's valuation is $400 million.

Current investors include Andreessen Horowitz, Union Square Ventures, Y Combinator, Funders Club, IDG Ventures, and others. The new round, according to Primack, is being led by DFJ Growth, and also includes the New York Stock Exchange, USAA, and former Citigroup CEO Vikram Pandit (the full list of investors is here).

Meanwhile, bitcoin has lost 75% of its value in the last year, and at a price of about $209 per BTC, is down to a little over 18% of its all-time high, $1145, which it hit in November 2013. Here's the all-time price chart: 

So what's with the continued faith in the cryptocurrency?

Primack spoke to Coinbase's founder, Fred Ehrsam, who had this to say: 

Ehrsam says that the price decline did not affect investor interest, and optimistically suggests that it will ultimately improve the Bitcoin ecosystem by teaching important lessons about cyclicality and expense management to cryptocurrency miners.

“Price volatility isn’t good for certain uses of Bitcoin but, in that same time period, we went from 600,000 users to 2.1 million users, so it hasn’t caused the number of people signing up on our site to go down,” Ehrsam says.

For Coinbase, it doesn't really matter what the price of bitcoin is, only how many people are using it. That continues to grow, according to them. 

Marc Andreessen recently tweetstormed about why bitcoin is still a great idea, despite the volatility: 

11/Bitcoin was specifically designed to use speculation early on to overcome the normal chicken/egg boostrapping problem for new networks.

— Marc Andreessen (@pmarca) January 5, 2015

12/Attacking Bitcoin for having speculative levels of volatility is missing the point of how the system was designed for this point in time.

— Marc Andreessen (@pmarca) January 5, 2015

13/Now, yes, in the long run, BTC does need to stabilize -- which I think will happen with a combo of scale + use of derivatives (hedging).

— Marc Andreessen (@pmarca) January 5, 2015

14/In the short run, Bitcoin is still highly useful as a transaction and trust network in many uses cases even with high volatility.

— Marc Andreessen (@pmarca) January 5, 2015

20/Two particular areas of focus today are A use outside the US where currencies + banks are often awful, and B machine-to-machine payments.

— Marc Andreessen (@pmarca) January 5, 2015

The idea seems to be that, right now, investors aren't really seeing bitcoin as a useful currency, but as a good method for making secure transactions. That's helpful in explaining interest from places like the NYSE. In that case, focusing on the volatility is missing the point.

The smart use of bitcoin isn't speculating in the price, but briefly converting whatever currency you have into BTC to make a transaction that you can be sure gets to the person you want it get to. In that case, it doesn't really matter what the price of bitcoin is that day (except, of course, when the price moves so much that you no longer have enough to cover your payment). 

On the other hand, the fact that there's been a massive bitcoin crash in the last few months is not a good thing, and no amount of arguing for the value of the blockchain as a technology is going to change that. A lot of people got burned in the nearly $1000/BTC price drop in the last 14 months, and as the price falls, so does the incentive to mine more bitcoin.

For this more cynical view of bitcoin, there's no one better than Izabella Kaminska: 

...unless a massive amount of new capital is transferred into bitcoin market sharpish — which is not impossible, since there are still a number of deep pocketed believers out there — it’s hard to imagine the asset class going any other way but south. Furthermore, it’s unlikely at this stage that either price rigging, mining cartels or lower energy costs will be able to reverse that trend.

The only hope the system has: increasing transaction fees (in a way that ironically limits its competitive advantage in the payment market), getting a big fat capital bailout or convincing miners that processing bitcoin transactions is a wonderful non-profit hobby to have.

Her entire post — actually her entire series of posts — on the fallout from the bitcoin crash.

SEE ALSO: A Lot Of Those People Who Left The US Labor Force Since The Financial Crisis Just Aren't Coming Back

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Bitcoin price is attacking overhead resistance and is advancing in a strong wave toward $218. Price has been rejected by a sloping trendline at this level for several days. Will it break through this time? This analysis is provided by xbt.social with a 3 hour delay. Read the full analysis here. Bitcoin Price Analysis Time […]

The post Bitcoin Price Moving Up By Moving Sideways appeared first on CryptoCoinsNews.

 Robots need ketamine too! And to supply their robot with drugs a group of Swiss techno-artists programmed an agent to randomly buy an item on a random darknet site with bitcoin, resulting in a cache of drugs and other contraband that, at first, was a fun art project and then caught the eye of the authorities. Called the Random Darknet Shopper, the robot simply found a random item and bought it. Read More

For a technology crowned as the biggest thing since the emergence of the Internet two decades ago, Bitcoin got off to an ominous start. As the preferred cryptocurrency of choice for Silk Road, the web site that served as an online black market, Bitcoin became a target of law enforcement. Officials from the FBI to Manhattan's District Attorney's warned of a "digital Wild West" should the currency go unregulated. The Securities and Exchange Commission warned investors to remain vigilant for scams. Mt. Gox, once one of the leading Bitcoin exchanges in the world, collapsed into bankruptcy last year, costing users hundreds of millions of dollars worth of bitcoins. Leading voices of the financial community like former Fed Chairman Alan Greenspan and JPMorgan Chase chairman Jamie Dimon also cast doubt on the currency's potential.

What Bitcoin started is metamorphosing into something bigger: a “crypto-tech” driven economy with its own value creation, not unlike the Web’s own economy. Welcome to the cryptoconomy. Contrary to what appears today, this cryptoconomy will not be born by attempting to take over the current financial services system, nor by waiting for

As we’ve been following for you here on CCN, Cloud Mining has been taking a beating with the precipitous drop in Bitcoin price over the lasts several months. The profit margins have become thinner and thinner, and now may be non-existent for many in the industry. Some reports have as many as 30,000 miners leaving the industry […]

The post Bitcoin Price Ruins Cloud Mining and here’s the Good News appeared first on CryptoCoinsNews.

Mike Hearn's decentralized crowdfunding app Lighthouse has officially launched in open beta.

In 2010, more than $5 billion was sent back home from Indonesian migrant workers across the world, up 2.44 percent from 2009 ($4.91 billion). That number may seem huge but, in the grand scheme of things, it’s very small. Through the process of remittance, $436 billion looked to be sent back home in total during […]

The post Bitcoin Remittance Services in Indonesia Could Save Migrant Workers $374 Million appeared first on CryptoCoinsNews.

 The Lizard Squad, the group of hackers credited with taking down Xbox Live and PSN over the holiday, have been compromised and much of their data leaked. Brian Krebs received a listing of the Lizard Squad’s LizardStresser customer database and noted that the group made about $11,000 in bitcoin serving up denial-of-service on demand. At the same time police arrested an alleged member of… Read More