Record highs, record heists: Where is crypocurrency heading?

Two of the World's largest cryptocurrency theft's happened in Japan. Mt. Gox... 850,000 bitcoins were stolen. Now CoinCheck... roughly $530 million in cryptocurrency. So what does this tell you? The Japanese... are crap at security and software. I think the Coincheck job was an "inside" job. Here is probably what happened. A Yakuza group... identified individuals at Coincheck and compromised one of them. They do this by befriending one and treat him to whores and drinking establishments. Slowly the let the individual realize that he is dealing with some very tough individuals. Once the person is in "too deep"... they threaten the person and his family with bodily harm. They then lay out their plan and execute it. Along with Russian organized crime... Japanese organized criminals are up there when it comes to technology and theft. They even have a word for it in Japan... it is called "shinogi".

Ponzu scheme. beware.....

In the dead of night, hackers stole $530 million in Japanese virtual currency from Coincheck, sending prices plunging and underlining the vulnerability, and volatility, of cryptocurrencies.

An exchange getting "hacked" has nothing to do with the vulnerability of cryptocurrencies, but with vulnerability of the code running the exchange and the way they handle the data. That's like saying if a bank keeps its vault unlocked and consequently gets robbed, it's a vulnerability of fiat currency. Taro Aso is right in saying the following:

Coincheck "did not store the important things separately. I think they lacked fundamental knowledge or common sense," he said.

Anyone who's been in crypto for a while knows better than to leave any significant amount of money on an exchange longer than is necessary. As soon as it leaves a wallet for which you control the private key, it's no longer under your control, and therefore subject to getting stolen from the third parties holding it that have sub-par security or knowledge, or indeed as part of an inside job.

The cryptocurrency space is not for the faint of heart or those unwilling to invest the time to educate themselves before just dumping money into it expecting a quick, easy buck. The volatility and personal responsibility for safety isn't for everyone, especially those who aren't particularly tech-savvy, but if you can handle those two things it's probably the best investment opportunity you'll have in the next few decades.

I agree with Burning Bush about Bitcoin's dominance waning (for good reason), but the cryptocurrency space is much bigger than just Bitcoin. The problem arises when people new to it don't bother to research and understand the underlying technology, but just blindly dump money into Bitcoin because it's currently in the news spotlight, and they expect it to just keep going up forever.

Investing that way into pretty much anything is a recipe for disaster.

Coincheck "did not store the important things separately. I think they lacked fundamental knowledge or common sense," he said.

Don't want to hear that from you, Aso.

To ensure client safety and improved use of the technology, virtual currency exchanges should face strict regulations like banks and brokerages, he suggested.

That will add costs to using exchanges.

How about let the exchanges differentiate themselves from competitors by coming up with whatever protection measures they are able to think of? Let the best survive.

It's not like Aso has a clue about how to run a crypto-currency exchange safely.

I was watching an interesting interview with Warren Buffett, he said he would never invest in crypto currency and pointed out how intangible the currency really was, he has been investing longer than I have been alive so I would believe his judgment more than this risky crypto currency buzz.

The problem arises when people new to it don't bother to research and understand the underlying technology, but just blindly dump money into Bitcoin because it's currently in the news spotlight, and they expect it to just keep going up forever.

That probably describes the vast majority of new cryptocurrency investors (short-term speculators) since last year. This is why prices bubbled up so high. 

I remember thinking bitcoin was a bubble before I even bought any, at the beginning of last year, and after what I did buy doubled, I sold it thinking I'd buy more on a dip, because that's what you should do with things in bubbles.

A dip never came, and it doubled another 10 times after that, before coming off the boil (interestingly, since bitcoin futures were launched).

Bitcoin etc and the underlying technology is all well and good, but I think the bubble price action fooled some evangelists into believing that cryptocurrencies are more valuable than they really are.

Warren Buffett, he said he would never invest in crypto currency

He has never been big on new technology, if he doesn't understand it. He likes companies that earn money, where as cryptocurrencies are just an instrument of speculation - they pay you no income or dividend like a stock does.

Cryptocurrency as an investment, before it stabilizes will be high risk high reward. Once it stabilizes it will be low risk low reward. It’s really not any better than any other Fx trading. Cryptocurrency as a speculative trade is not the most effective use of your money.

The supporters of these " currencies " will never admit it, but this is just a pyramid scheme , making some rich and costing others a lot of money.  I don't feel sorry for those, as its greed only driving them. That has nothing to do with what once was the principle of investment : To provide companies or services with the possibility to grow its businesses, revenue and profits , and by doing that, share in those profits as an investor. 

Now, the stock markets themselves are casino's and bitcoins and simular schemes are basically illegal casino's.  Governments have waited much too long to forbid them or regulate them just like they do with other financial instruments. 

We are heading for a major stock market crash in 2018, because there is almost no more relation between business and its performances and the stock market. And signs are there for anyone to see.  Apple sales down and will continue to go down, Fuji Xerox fires 10,000 , NEC 3000 and closes one or more factories, mobile phone shipments from china down....

Claiming that cryptocurrencies are a pyramid scheme shows you either don’t understand how cryptocurrencies work, or you don’t understand how a pyramid scheme works.

Cryptocurrencies are not the problem. It's the fact that the exchanges, where you are forced to buy, trade, sell and store them, either have poor levels of maxed security or set themselves up for hacking by leaving servers/storage always online. If people are/were allowed to buy the cryptocurrency of their choice and download it wholly into their own digital wallet which they can leave on an external hard drive (for example), and leave that offline and not plugged into computer - it would be safe.

Forget India, China and South Korea. Japan, the way the economy is forecast and the social demographic tsunami on the way, just run with it. Be an open crypto friendly experiment. Great way to energize the tech savy youth , create an alternative chick currency. What do you have to lose really? If the LDP let this happen it may buy back some respect and savy. Do it! When LINE gets on board and the conbinis and vending machines too! Forget about it. Then you could hit tourism too.

Once it stabilizes it will be low risk low reward.

If it stabilizes :)

I'm not sure it will, any time soon. Even fiat currencies issued by central banks, used widely in the world's largest economies can be somewhat volatile.

Cryptocurrencies still have relatively limited uses in the real economy, and their volatility these days is likely to prevent most economic actors from wanting to use it as a means of exchange or store of value.

When one looks at the way that things like futures markets in agricultural products developed, it was because producers of those things wanted a way to manage risks to their business. So futures contracts developed, by which they could lock in a price to sell their good at, and on the other side buyers could lock in a price at which to purchase their goods in. Later, speculators came to play a role in these markets by willingly taking on board those risks, for the chance of windfall returns.

With cryptocurrencies, it's almost in reverse. The demand from speculators to be able to take risk on cryptocurrencies has come before any real economy needs to lock in future cryptocurrency prices, so far as I can see. Perhaps if you were a cryptocurrency miner, then such futures contracts might be useful to lock in a price, but mining cryptocurrencies is probably even more hit and miss than growing a crop of corn or coffee beans is. All it takes is someone with more computing power to come along, and you'll mine nothing. If you have a corn field or a gold mine, you can have a higher degree of certainty that you will actually have a product to sell.

So, so long as cryptocurrency trading exists primarily to the purpose of speculation, I expect it to continue to remain extremely volatile.

Governments have waited much too long to forbid them or regulate them just like they do with other financial instruments.

Personally I couldn't care less about people who decide to blow their money away trading cryptocurrencies or sea shells or tulips or whatever they want to do. I don't want government to spend my tax money trying to protect people from their own moronic behaviour. Otherwise they'll never learn for themselves.

We are heading for a major stock market crash in 2018, because there is almost no more relation between business and its performances and the stock market. And signs are there for anyone to see.

There could be a decent correction perhaps (might have started this last week), but I am not expecting a full-blown crash. If there is a full-blown crash, I will be buying stocks with everything I've got, around 3-6 months after it happens.

 Apple sales down and will continue to go down, Fuji Xerox fires 10,000 , NEC 3000 and closes one or more factories, mobile phone shipments from china down....

A few old companies in Japan winding down is a good thing, long term. Free up the capital so that it can be put to work in new businesses that are relevant in the 21st century. Fuji "film"? "Xerox" machines? That stuff is so last century.

If anything, I think the global economy looks good right now.

I was watching an interesting interview with Warren Buffett, he said he would never invest in crypto currency and pointed out how intangible the currency really was, he has been investing longer than I have been alive so I would believe his judgment more than this risky crypto currency buzz.

I respect Buffet, but he also says he doesn’t invest in Apple or other technology companies because he doesn’t understand it.

Buffet could be a bitcoin know-it-all and then he still wouldn’t invest in it. It yields nothing, why buy something like that for the long term? He is also negative on gold for similar reasons.

get your money out now. all crypto coins will go down to below $100 before the end of the year.

If it stabilizes :)

I'm not sure it will, any time soon. Even fiat currencies issued by central banks, used widely in the world's largest economies can be somewhat volatile.

That's actually a good point. It may never really totally stabilize, but I think it will become much more stable that it is right now. At the moment, it's clear to many people that it has some value, but being so new people are still not sure what that value is. Some people are claiming there is none (which is ridiculous, as there wouldn't be anyone attributing any value to it at all if that were the case), while others are claiming it could be worth as much as $100,000/coin, which again seems pretty ridiculous, as it's not some magic solution that is here to save humanity.

The market being what it is, I figure it will self-assign a value to it that is realistic, as people become more aware of what cryptocurrency is (it's amazing how many commenters try to make comments showing that they have a clue as to what it is, while completely exposing their ignorance as to what it is through those same comments). Once it has mostly stabilized, it will then become more usable on a daily level.

get your money out now. all crypto coins will go down to below $100 before the end of the year.

Quick everyone, some dude made a comment without anything whatsoever to support their assertion. Believe them! Make your life decisions based on what they say!

It appears Worldwide, more and more Credit card companies are not allowing purchases of Crypto-currencies through their Services. And Governments are stepping in to either curtail trading in it or push their local markets to a quasi regulated state. So, what's the value of Bitcoin ? From what I can see, there is no way to determine its value, other than how much someone else is willing to buy one off you for... so it's value is anywhere between 0 and the maximum value someone predicted (400k US$?).