As of yesterday. Good news. You will pay a small premium. The Ethereum people have cleverly called this premium the gas price, as if there is fuel needed to make the transaction. Are we really getting rid of trusted 3rd parties or are they just being renamed? Where's the true peer-to-peer transactions we're all waiting for.

Ethereum price seems to be going up, while Bitcoin is slipping. Current ETH price 50.88, BTC price 964. The ETH/BTC ratio is 18.94 and it might go lower. It may not be the time to sell your BTC, but it's definitely time to buy ETH, (actually anytime before last week would have been an even better time).


 
 
I've been trying to buy Ethereum for 4 days, (meanwhile it doubled in price).
First I tried Coinbase, who advised me they are not quite ready yet to offer Ethereum in New Yorks state. NY is apparently the only state that has a law against me buying Ethereum, for my own protection no doubt.

Next stop was ShapeShift, a company whose CEO I have heard speak and I really admire him. As soon as I hit their website a message popped up saying it looks like you are in New York or North Korea, sorry no Ethereum for you.

After some serious research I ended up at Ethereum.org. This has got to be the place. It looked a little too technical and was just a bit  forbidding, but hey, I've been researching blockchain for over a week already.  There was a
nice download that seemed perfect for my Mac. No problem, I got a base account established.

Messages informed me I would be able to hold, send and receive ETH but I would not see incoming transactions. As soon as my base account has at least 1 ETH I could then create a wallet and create contracts. I was very anxious to do this, although I don't have a clue yet about creating a contract. So the first step is to fund my account. I tried the button that said buy with credit card, but it would not let me - not sure what the reason was there.

Then I saw it, a neat button in the middle of the screen that said buy with bitcoin. This was for me! I immediately clicked. A transaction screen appeared that advised me to send bitcoin to an address I had not seen before, then the bitcoin would be exchanged for ETH and deposited to my account. Sounded great, I immediately send .15 BTC to the address, (a little over $150, I didn't want to look like a cheapskate). Then I waited.

When you login to Ethereum.org's application, a message come up that says your account is syncing then the message disappears, I figgured I was synced when the message went away - little did I know.  I did notice the grayed out header that kept changing the number of peers and the blocks left which always seemed to be in the two millions. Interesting, I wonder what that was about.

I waited two days. Nothing. I noticed on one of the screens that my transaction had been facilitated for Ethereum.org by ShapeShift. I contacted their help desk and opened a ticket. Over the next day a very nice person named Megan patiently checked the transaction and found it had gone through, (I knew this because the bitcoin had flown out of XAPO almost immediately. Anyway, Megan guided me through the learning process that those two million blocks had to be downloaded before my account would be synced. Then my ETH would magically appear.

I tried for the next two days to sync my account and never got above 10% - the blocks were adding faster than I could clear them. Ethereum.org doesn't seem to have a help desk, just a community chat, where everybody posts and hopes for an answer.  I was pretty bummed when I realized that about every fourth or fifth post was about the time it takes to sync, or transactions that never went through. That's what I get for thinking I can play with the big boys.

But I'm not giving up.
I decided my Mac was just too slow, (it's a mid-2007 iMac, I know, I know it should have been replaced 6 years ago).
I'm now on my fourth attempt to establish a new base account on a Windows 64 bit Intel i7 7th generation laptop. It's not working so far. I did read that it's possible to transfer accounts to a different machine if you have the keyfiles.

I've also begged Megan to help again, I'm not sure if it's the $150 that's frustrating me or the fact that I just may not be smart enough to get involved in this blockchain business.


 

Ethereum

03/03/2017

1 Comment

 

Ether, (ETH) is the second cryptocurrency based on blockchain technology that we will tackle. Founded by Vitalik Buterin, a Russian-Canadian programmer and launched just one year ago, Ethereum  already has a total value of about $1 billion, second only to Bitcoin's $10.5 billion among the world's hundreds of cryptocurrencies. 
Ethereum applications are built with the use of smart contracts - computer algorithms which execute themselves, based on incoming data from the network. The self-fulfilling nature of such applications allows them to run without reliability issues associated with human operators or trusted third party to enforce them. Smart are executed by machines making them efficient and reliable.

Ethereum Classic is one of two separate versions of Ethereum's Blockchain, the other being Ethereum itself. The split occurred after The DAO, a decentralized autonomous organization based on Ethereum, got hacked in June 2016, and $50 million worth of its funds were stolen. Because The DAO was crowdfunded, this event has resulted in a large number of people losing their stakes. After several weeks of heated debate, the community has decided to conduct a "hard fork" of Ethereum's Blockchain in order to "code" the stolen money back to its owners. In order to perform the hard fork, the majority of the users had to simultaneously take all the transaction records prior to the point of the hacking, and start anew from there, while discarding all transactions which have happened after that, including the hackers'. That doesn't mean that anything has happened to the previous version of the Blockchain - on the contrary, the hardfork resulted in two versions existing simultaneously: Ethereum (ETH), which is the new one, and the old one, which was renamed Ethereum Classic (ETC).

Several internet articles claim that Ethereum activity is very heavy in South Korea, up to 10% of all Ethereum activity. Could be just traders or some sort of corporate involvement.

Recent  Bitcoin and Ethereum activity in South Korea
 
Currency            Price           24hour volume ($)    24 hour Percentage (%)
Bitcoin  (BTC)      $1330.06       $6,719,420             58.99 %
Ethereum (ETH)    $19.86          $4,444,800             39.02 %
Classic (ETC)         $1.46            $227,360                2.00%

Data Source:
http://coinmarketcap.com/exchanges/korbit/#USD


 
 
Bitcoins are transacted on an ongoing basis and around the clock. About 62,000 Bitcoin transactions are conducted daily with an average volume of $50mil per day.

Transactions over the Bitcoin network do not directly affect the market price of Bitcoin. In the sense that an active Bitcoin network reflects a healthy protocol enjoying plenty of usage and demand, there is an indirect influence. Only where bitcoins interface with other currencies – at exchanges – is there a direct impact on the price of Bitcoin. And that impact responds to supply and demand just like they taught you in basic Economics


Buying Bitcoin from an exchange

Every bitcoin exchange transaction that involves the purchasing of bitcoin via another currency, whether fiat or cryptocurrency, has the effect of pushing the bitcoin price up. Because the bitcoins are changing hands – from the exchange’s wallet to the buyer’s wallet – there is an accompanying Bitcoin network transaction. However, it is the exchange transaction that counts toward an uptick in the Bitcoin exchange rate. Routine purchases are made daily, for various purposes, and typically increasing toward month-end:

    Company salaries
    Wallet balance replenishment
    Buy-and-Hold investment purchases
    Incidental purchases destined for paying merchants
    Purchases intended for transmission



Selling Bitcoin to an exchange

Every exchange transaction that involves the selling of bitcoin, i.e. exchanging for fiat or another cryptocurrency causes a downtick in the price of Bitcoin. Let us consider the last example listed above, namely usage of the Bitcoin network as a means of money transmission.

Someone working in the US, and paid in US Dollars, wants to send money to their family in Zambia. Instead of using the illustrious Western Union, they opt for the Bitcoin payment network. No queues, no forms to fill in, no proverbial rubber gloves, and no extortionate fee. They purchase bitcoin via an exchange that offers BTC/USD, send the bitcoins to a relative’s Bitcoin address, and 30 minutes later the relative in Zambia redeems some (or all) of the bitcoin for Kwacha via a local exchange offering BTC/ZMK.