Bitcoin entrepreneur Erik Finman, who became a millionaire by age 18, wants to bring crypto to the masses through a new investing platform called CoinBits.
In fact, Finman is so confident in his concept that he projects he’ll be able to onboard one million customers within the next 12 months.
FINMAN: COINBITS IS BETTER THAN COINBASE
“The goal of the application is to make cryptocurrency not just more accessible, but to make cryptos and blockchain technology tangible and more tactile. I really think a million users within a year is realistic.”
time investments. Users can set up their accounts to match their financial risk profiles.
“Some 98% of the bitcoin are in cold storage, or not kept on online, making them less vulnerable to data breaches, in theory.”
The approach is similar to those used by investment apps like Acorns and Stash, which let you automatically invest spare change from your debit and credit card purchases.
Finman says he wants CoinBits to become “the Acorns of bitcoin,” and in so doing make crypto more accessible to the average person.
“I think so many people have attempted to make bitcoin simple, but I don’t feel like anyone has fully achieved that yet.”
ERIK’S STORY HAS BECOME CRYPTO LEGEND
Erik Finman’s unlikely story of becoming an overnight bitcoin millionaire has become the stuff of crypto legend.
The teen phenom used $1,000 that his grandmother gave him when he was 12 to buy his first bitcoin. At the time, the obscure virtual currency was trading at a mere $12 a token. Six years later — by age 18 — Finman became a millionaire, thanks to bitcoin’s meteoric price spikes.
Not surprisingly, Finman is a bitcoin perma-bull who believes it’s the wave of the future. However, for every bitcoin success story, there are numerous cautionary tales. One example is crypto podcaster Peter McCormack.
As CCN reported, McCormack lost $1 million during the crypto bear market. McCormack started investing in bitcoin in 2016, after the London advertising agency he managed shuttered. He says he started with an initial investment of £5,000 (US$6,400).
As prices rose, he bought up even more BTC. When the value of his holdings spiked to $300,000 in the spring of 2017, McCormack was hooked. Looking back, he admits that he got caught up in the hype and wishes he had taken everything out before the bubble burst.
CRAIG WRIGHT IS SUING PODCASTER PETER MCCORMACK
By December 2017 — when the bitcoin price soared to almost $20,000 — McCormack’s portfolio had ballooned to $1.2 million.
McCormack says media hype of the then-budding crypto market fueled bitcoin mania. Its erratic price swings commanded countless headlines. Like other newbie investors who get rich quick but lack money-management skills, McCormack admits he spent money carelessly.
Fast-forward to today, and Peter McCormack is still a crypto bull. But he has downsized his lifestyle and gets by as a podcaster.
If McCormack sounds familiar within crypto circles today, it’s because he’s being sued by self-proclaimed Satoshi Nakamoto, Craig Wright.
As CCN reported, Wright accused McCormack of defaming him when he called him “a fraud.” In April, Wright filed a libel lawsuit against McCormack, seeking damages of £100,000 (or roughly $130,000).
Bitcoin transactions leveraging SegWit hit an all-time high
Bitcoin payments leveraging SegWit hit an all-time high of 50.47% on September 15th. The Segregated Witness aka SegWit protocol was developed by Pieter Wiulle in December 2015, separates [or segregates] the digital signatures from the transactions to reduce processing fees and time for Bitcoin to solve the scalability issue.
For the most part of 2018 and early 2019, SegWit adoption figures on Bitcoin blockchain was low. According to data on transactionfee’s website, Bitcoin transactions using the protocol, on 1st January 2019, accounted for only 40.55%. Notably, an increase of 24.46% was noted in the last nine months.
Securing approval for the implementation of SegWit was not a problem for Litecoin which required 75% approval. Bitcoin, however, needed 95% support from network miners who were reluctant to switch and hence failed to acquire support initially. Litecoin took the lead and after SegWit’s successful activation, Bitcoin followed suit in a couple of months.
Despite its activation at block 477,120 on 21 July 2017, what held back its adoption on the Bitcoin network, was the backward-compatibility nature of the scaling upgrade or the soft fork. This meant that the non-upgraded users could still use their existing full node software.
Despite receiving a warm welcome from major wallet providers, the upgrade failed to attract leading crypto exchanges to switch to SegWit as they already had a huge customer base and did not mind paying high fees. The leading crypto platforms, like Binance, Blockchain.com, BitMEX, and Bittrex are yet to implement SegWit.
Recently, OKEx, the Malta-based cryptocurrency exchange, announced support for SegWit addresses of Bitcoin as well as Litecoin on its platform. Gemini was the first major exchange to roll out support for the protocol.
Bitcoin Forecast and Analysis September 16 — 20, 2019
Bitcoin BTC/USD ends the trading week at the level of 10313 and continues to move as part of the correction and the formation of the «Triangle» model. Moving averages indicate a bullish trend. At the moment, we should expect an attempt to continue to decline and test the support area near the level of 9535. Where again we should expect a rebound and an attempt to continue the growth of the Bitcoin rate with a potential target above the level of 14050.
Bitcoin Forecast and Analysis September 16 — 20, 2019
In favor of raising the BTC/USD quotes in the current trading week September 16 — 20, 2019, a test of the ascending trend line on the relative strength index (RSI) will come out. The second signal will be a rebound from the lower boundary of the «Triangle» model. Cancellation of the Bitcoin growth option will be a fall and a breakdown of the 8850 area. This will indicate a breakdown of the lower border of the pattern and a continuation of the fall of BTC/USD with a potential target below the level of 5655. A confirmation of the development of the upward trend will be a breakdown of the upper boundary of the Triangle model and closing quotes above the level of 11650.
Bitcoin Forecast and Analysis September 16 — 20, 2019 implies an attempt to the support area near the level of 9535. Then, the cryptocurrency will continue to grow to the area above the level of 14050. An additional signal in favor of the Bitcoin exchange rate will be the support line test on the relative strength index (RSI). The cancellation of the growth option for Bitcoin cryptocurrency quotes will be a fall and a breakdown of the area of 8850. In this case, we should expect continued decline with the target at the level of 5655.
Hodl Hodl Wants You to Clone Its Bitcoin Exchange
Hodl Hodl plans to make its software freely available so anyone can launch their own version of the peer-to-peer bitcoin exchange.
Announced Saturday at the Baltic Honeybadger conference in Riga, Latvia, the plan is, in part, a recognition that Hodl Hodl’s business model is vulnerable to regulatory crackdowns.
“History teaches us that if a government wants to shut you down, it will,” Hodl Hodl CEO Max Keidun told CoinDesk.
Open-sourcing the code for its smart contracts, which Hodl Hodl intends to do sometime next year, is a way to deal with the threat, Keidun said, explaining:
“Let’s imagine, our domain gets blocked — some activist would be able to just take the code from Github, fork it and launch something new.”
Already, people in Africa, Asia and Latin America have reached out to the company, asking about such an opportunity, he said. “Peer-to-peer is something emerging markets, in particular, are interested in.”
Hodl Hodl is a rare animal in the 2019 crypto world: as a matter of principle, it focuses on bitcoin (the only cryptocurrency that the company’s founders trust), it doesn’t do know-your-customer (KYC) checks and it has no plan to start.
Why not? “Because we don’t like three-letter abbreviations,” Hodl Hodl’s CTO, Roman Snitko, joked in a slide for his presentation to the Riga conference.
In all seriousness, Hodl Hodl is averse to holding the sensitive personal information that financial institutions are mandated to collect from customers under global anti-money-laundering (AML) regulations.
“We think KYC/AML does more harm by exposing law-abiding users to fraudsters and criminals,” Snitko told CoinDesk. “The information and documents users upload to exchanges has been stolen many times in the past. It also does very little to prevent actual money laundering and criminals from using those services. They always find ways.”
Yet regulators across the globe are tightening the screws on the industry to identify the parties to transactions. Most notably, the Financial Action Task Force (FATF), an intergovernmental body, has directed its member countries to make exchanges collect and store information about who their customers trade with.
Winds of change
Hodl Hodl’s founders believe they don’t have to identify customers because the exchange never takes custody of users’ funds.
Rather, it lists offers to buy or sell bitcoin and provides an escrow service in which the seller locks bitcoin in a multi-signature smart contract until the buyer sends fiat. Releasing the bitcoin requires 2 out of 3 signatures, belonging to the buyer, seller, and Hodl Hodl (which steps in as a referee when there’s a dispute).
“We don’t touch the crypto, don’t match users automatically and don’t keep funds in our wallets,” Keidun said. “We create multisigs in a public blockchain,”
In the same June guidance, the FATF said even peer-to-peer platforms may be subject to such regulations in cases “where the platform facilitates the exchange.” It’s unclear whether Hodl Hodl’s escrow service counts as “facilitating.”
But the founders see the way the wind is blowing.
“We’re not switching to the open-source model exclusively because of the regulatory pressure,” Snitko told CoinDesk. “In fact, we haven’t experienced any due to the fact that we’re a non-custodial exchange. However, we do foresee regulators becoming more desperate in their attempts to contain the spread of bitcoin and we refuse to be the victims of desperate actions.”
Passing the reins
At some point, Keidun and Snitko might hand management of Hodl Hodl to others so they can focus entirely on supporting and upgrading the code. (The exchange says it has no head office; employees work remotely, serving 10,000 users worldwide.)
“We want to create a community around us, so that at some point we could pass the reins to other people,” Keidun said. There is no timeframe for that yet.
In his Riga presentation, Snitko also announced Hodl Hodl’s intention to open “a bitcoin smart contract app store.”
Another way people can utilize the code is payments for e-commerce, and in the coming months, the team will focus on making the technology plug-and-play, so people who are not proficient coders can easily deploy it in their online store and accept bitcoin.
“We want to launch a platform for bitcoin smart contracts, so that anyone who wants to sell homes online or do [over-the-counter] trades could use it,” Keidun said, adding that it might be a multi-sig with more than three signatures and it can be used for multiple use cases.
Aside from bitcoin-to-fiat trades, Hodl Hodl’s multi-sig escrow is used in a peer-to-peer predictions market when people bet on things like the price of bitcoin or publicly traded stock, sports results and other measurable outcomes. A real estate platform is also in the works, with a launch tentatively scheduled for 2020, Keidun said.