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Cryptocurrency Newcomers Cope With Wild Swings

"We are not it in it to become bitcoin millionaires,"

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A Bitcoin logo is shown at a Bitcoin trading store, Dec. 21, 2017. VOA

After researching digital currencies for work last year, personal finance writer J.R.

Duren hopped on his own crypto-rollercoaster.

Duren bought $5 worth of litecoin in November, and eventually purchased $400 more, mostly with his credit card. In just a few months, he experienced a rally, a crash, and a recovery, with the adrenaline highs and lows that come along.

“At first, I was freaking out,” Duren said about watching his portfolio plunge 40 percent at one point. “The precipitous drop came as a shock.”

The 39-year-old Floridian is part of the new class of crypto-investors who do not necessarily think bitcoin will replace the U.S. dollar, or that blockchain will revolutionize modern finance or that dentists should have their own currency.

ALSO READ: Here is guide to start your own cryptocurrency

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Dubbed by longtime crypto-investors as “the noobs” — online lingo for “newbies” — they are ordinary investors hopping onto the latest trend, often with little understanding of how cryptocurrency work or why they exist. Pexels

“There has been a big shift in the type of investors we have seen in crypto over the past year,” said Angela Walch, a fellow at the UCL Centre for Blockchain Technologies. “It’s shifted from a small group of techies to average Joes. I overhear conversations about cryptocurrencies everywhere, in coffee shops and airports.”

Walch and other experts cited parallels to the late-1990s, when retail investors jumped into stocks like Pets.com, a short-lived online seller of pet supplies, only to watch their wealth evaporate when the dot-com bubble burst.

Bitcoin is the best-known virtual currency but there are now more than 1,500 to choose from, according to market data website CoinMarketCap, ranging from popular coins like ether and ripple to obscure coins like dentacoin, the one intended for dentists.

Exactly how many “noobs” bought into the craze last year is unclear because each transaction is pseudonymous, meaning it is linked to a unique digital address, and few exchanges collect or share detailed information about their users.

A variety of consumer-friendly websites have made investing much easier, and online forums are now filled with posts from ordinary retail investors who were rarely spotted on the cryptocurrency pages of social news hub Reddit before.

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Reuters interviewed eight people who recently made their first foray into digital currency investing. Many were motivated by a fear of missing out on profits during what seemed like a never-ending rally last year. Pexels

ALSO READ: Is investing in Bitcoin safe? Get the basics first!

One bitcoin was worth almost $20,000 in December, up around 1,900 percent from the start of 2017. As of Friday afternoon, it was worth about $10,000 after having fallen as much as 70 percent from its peak. Other coins made even bigger gains and experienced equally dizzying drops over that time frame.

“There was that two-month period last year where all the virtual currencies kept going and up and I had a couple of friends that had invested and they had made five-figure returns,” said Michael Brown, a research analyst in New Jersey, who said he bought around $1,000 worth of ether in December.

“I got swept by the media frenzy,” he said. “You never hear stories of people losing money.”

In the weeks after Brown invested, his holdings soared as much as 75 percent and tumbled as much as 59 percent.

Buy and ‘Hodl’

Investors who got into bitcoin before its 2013 crash like to refer to themselves as “OGs,” short for “original gangsters.”

They tend to shrug off the recent downturn, arguing that cryptocurrencies will be worth much more in the future.

“As crashes go, this is one of the biggest,” said Xavier Levenfiche, who first invested in cryptocurrencies in 2011.

“But, in the grand scheme of things, it’s a hiccup on the road to greatness.”

Spooked by the sudden fall but not willing to book a loss, many investors are embracing a mantra known as “HODL.” The term stems from a misspelled post on an online forum during the cryptocurrency crash in 2013, when a user wrote he was “hodling” his bitcoin, instead of “holding.”

Mike Gnitecki, for instance, bought one bitcoin at around $18,000 in December and was sitting on a 43 percent decline as of Friday, waiting for a recovery.

“I view it as having been a fun side investment similar to a gamble,” said Gnitecki, a paramedic from Texas. “Clearly I lost some money on this particular gamble.”

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Some retail investors who went big into cryptocurrencies for the first time during the rally last year remain positive. Pexels

ALSO READ: Status of Bitcoin in India

Duren, the personal finance writer, is also holding onto his litecoin for now, though he regrets having spent $33 on credit card and exchange fees for a $405 investment.

Didi Taihuttu announced in October that he and his family had sold everything they owned — including their business, home, cars, and toys — to move to a “digital nomad” camp in Thailand.

In an interview, Taihuttu said he has no regrets. The crypto-day-trader’s portfolio is in the black, and he predicts one bitcoin will be worth between $30,000 and $50,000 by year-end.

His backup plan is to write a book and perhaps make a movie about his family’s experience.

“We are not it in it to become bitcoin millionaires,” Taihuttu said. (VOA)

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Cryptocurrency-Focused Subsidiary Shut Down by Telegram

Telegram shuts down cryptocurrency-focused project after a legal battle in the US

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Telegram's cryptocurrency-focused project put at rest after legal battle in the US. Pixabay

After a legal battle in the US, instant messaging app Telegram has finally decided to withdraw its cryptocurrency-focused subsidiary, Telegram Open Network (TON).

Making the announcement in his channel on Tuesday, Telegram Founder and CEO Pavel Durov said that “a US court stopped TON from happening”.

The TON project was similar to Facebook’s Libra project which is also facing scrutiny from regulators around the world.

“Telegram’s active involvement with TON is over,” he said, while cautioning people not to trust sites using his name or the Telegram brand or the “TON” abbreviation to promote their projects.

Telegram engineers had been working on the blockchain platform called TON and a cryptocurrency they were going to name Gram for the past two-and-a-half years.

But the project also faced scrutiny from the US Securities and Exchange Commission (SEC).

The SEC in an order last October asked Telegram to stop sales of its Gram cryptocurrency following the company’s failure to register an early sale of $1.7 billion in tokens prior to launching the network, The Verge reported on Tuesday.

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Telegram has decided to withdraw its cryptocurrency-focused subsidiary. Pixabay

The Telegram Founder slammed the decision in his announcement to withdraw TON.

“Perhaps even more paradoxically, the US court declared that Grams couldn’t be distributed not only in the United States, but globally,” he said.

“Why? Because, it said, a US citizen might find some way of accessing the TON platform after it launched. So, to prevent this, Grams shouldn’t be allowed to be distributed anywhere in the world — even if every other country on the planet seemed to be perfectly fine with TON,” he said.

Durov urged others to keep fighting for decentralisation, balance and equality in the world.

Also Read: 2020 Sees a Steep Drop Of 8% in Global IT Spending Due to COVID-19: Gartner

“You are fighting the right battle. This battle may well be the most important battle of our generation. We hope that you succeed where we have failed,” he said. (IANS)

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Micro Blogging Site Twitter Adds New “Bitcoin Emoji”, CEO Jack Dorsey Uses It in Bio

A number of high-profile Crypto Twitterites tweeted to test the new feature

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Twitter
The introduction of the Bitcoin emoji caused quite a bit of excitement on crypto Twitter. Pixabay

Micro blogging site Twitter has finally added a Bitcoin emoji, which appears when users write a hashtag alongside the word “Bitcoin” or the letters “BTC” and a Bitcoin emoji appears next to it.

Jack Dorsey, the Chief Executive Officer and co-founder of Twitter, showed off the platform’s newest feature. This is demonstrated in his Twitter bio as well, which contains nothing but the hashtag and the symbol.

Dorsey also tagged Unicode, the consortium that manages character standards, in his tweet in what seems to be an effort to suggest that it does the same thing, Finance Magnates reported on Monday.

Meanwhile, according to an observation from Jason Yanowitz, who pointed out that 12 hours after the hashtag emoji was added, Bitcoin was a top trend for him on Twitter (it isn’t clear if it was a personalised trend or global trend), with many in the community publishing tweets with the fresh-faced hashtag, according to Crypto Slate.

Twitter
Micro blogging site Twitter has finally added a Bitcoin emoji, which appears when users write a hashtag alongside the word “Bitcoin” or the letters “BTC” and a Bitcoin emoji appears next to it. Pixabay

The introduction of the Bitcoin emoji caused quite a bit of excitement on crypto Twitter.

ALSO READ: Amazon CEO Jeff Bezos Sued by Girlfriend Lauren’s Brother Over Defamation

A number of high-profile Crypto Twitterites tweeted to test the new feature, including Changpeng Zhao, the Chief Executive Officer of cryptocurrency exchange Binance, the Finance Magnates report added. (IANS)

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Twitter Planning Bitcoin Payments as Tips on its Platform

Dorsey has also hired Bitcoin developers for his payments company

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Twitter is a social media app that encourages short tweets and brief conversations. Pixabay

Twitter is considering a feature that would allow users to tip one another – in Bitcoins though.

The Information reports that the micro-blogging platform is working on implementing a new payment feature to let people send money to each other.

It is not yet clear whether the Twitter tipping feature would integrate with Jack Dorsey’s other company, Square, which is a financial services, merchant services aggregator, and mobile payment company based in San Francisco.

Dorsey has made absolutely no secret of his love of Bitcoin over the years.

NewsBTC has reported on the Twitter CEO opining that Bitcoin will one day be the currency of the internet and his company Square integrating cryptocurrency payments.

Business, Twitter, Invest, Investment, Start-up, Kochi
A man reads tweets on his phone in front of a displayed Twitter logo. VOA

“Dorsey has been a major investor in the Bitcoin micropayments solution Lightning Network,” said the report.

Dorsey will move to Africa for three-six months this year to “define the future”.

“Sad to be leaving the continent for now. Africa will define the future (especially the bitcoin one!). Not sure where yet, but I’ll be living here for 3-6 months mid-2020. Grateful I was able to experience a small part,” said the Twitter CEO.

Also Read: Apple to Sell 80-85mn iPhones with 5G Connectivity

Dorsey has also hired Bitcoin developers for his payments company.

He is an advocate of digital currency bitcoin but he also says it is “not functional as a currency”. (IANS)

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