Feb 212019

Hundreds of millions gone missing affecting 115,000 clients

The country’s most widely used crytocurrency trading platform, QuadrigaCX, recently filed for creditor protection as it had lost access to nearly $200 million in Bitcoin and other cryptocurrencies. Altogether including Canadian cash, the company owes $250 million in assets to its 115,000 customers. Jeebus! 😮

According to statements from his family last month, Quadriga’s 30 year old CEO, Gerry Cotton allegedly died suddenly in December due to complications of Crohn’s disease while traveling in India. Cotten’s wife, Jennifer Robertson, claims her husband was the only person with access to the company’s cold wallets. Cold wallets are similar to savings accounts, used for storing and accumulating currency. On the other hand hot wallets are like checking accounts, used for frequent transactions. People who hold cryptocurrencies often have both. Hot wallets are connected to the internet and are used to facilitate transactions. Quadriga has some of its clients money in hot wallets for liquidity purposes, like when someone wants to withdraw funds. But it keeps most of the assets offline in cold storage, to avoid hacking.

This is roughly how QuadrigaCX's wallets operate.

Cotten basically ran the exchange on his encrypted laptop. He was the sole person responsible for transactions between the company’s hot and cold wallets. And apparently only he knew the passwords and recovery keys to access the cold wallets.

Court documents revealed the company had been recently facing liquidity problems. The website went offline at the end of January and clients can no longer log in to their accounts. Currently the only content on the site quadrigacx.com is a letter from the company.

Unfortunately any attempts at trying to access Cotten’s laptop to retrieve the keys to the wallets haven’t been successful. But in the latest twist of this unusual story, last week Ernst and Young (EY), the monitor of the QuadrigaCX case, stated that an additional sum of Bitcoin had disappeared from the company. This is because QuadrigaCX “inadvertently” transferred $468,675 worth of Bitcoin to cold wallets controlled by CEO Gerald Cotten, who is supposed to be dead.

Continue reading »

Dec 132017

How high can it go?

Back in Sept I blogged about buying some cryptocurrencies, and posted my Ethereum purchase transaction. At that time ETH was trading at $230 US. Today the price is over $700 US. Sweet mother of mammaries! 🙂 And just last month when Bitcoin was trading at $7,300 US I tweeted that the price would climb to $10,000 US, which would be a 37% increase.

Within a month Bitcoin had hit $10,000 US, lol. 😀 Unlike NASA, Bitcoin may not return back to earth once it reaches the moon. 😎 As I’ve written in the past I started to buy Bitcoin, Ethereum, and Litecoin earlier this fall and have been regularly accumulating them. My biggest winner appears to be Litecoin. For example I purchased some when it was $80 CAD. And now each Litecoin is worth over $400 CAD.

However, after the dramatic rise of the cryptocurrency market capitalization during the last 30 days I believe this asset class may be overvalued now. So I have decided to lower my financial risk by moving some money from cryptocurrencies to the stock market.


Why I’m Taking Some Profits

Since we are nearing the start of a new year, I want to collect some cash to fund my retirement account. When January comes I will have additional contribution room in both my RRSP and TFSA.  This is why I have decided to divest my cryptocurrency investment. Earlier this week I took some profits by selling roughly a third of my digital currency holdings. Doing this has freed up a few thousand dollars of capital. I can use this new cash (minus capital gains tax) to begin funding my registered investment accounts in the new year. 🙂 As far as I know there is no way to hold cryptocurrencies inside an RRSP.

I’ve used this effective investment method before with my marijuana stock, Canopy Growth Corp (WEED), where I bought 300 shares at $2.55 and sold at $12.10.  But instead of selling all my WEED stocks I kept 200 shares and continue to hold them today. A partial sell of a position like this accomplishes 2 things:

  1. First, it reduces the risk of my initial investment. I’ve already recouped all my money back, plus a tidy gain. Thus, it is now impossible to lose money on this investment as a whole, even if the future value of the stock drops to $0.
  2. And second, if the pot stock continues to climb in price then I stand to make additional money due to my continued long exposure to it. 😉

In other words, there are no bad outcomes here. That’s why I have used the same strategy with my cryptocurrency holdings.

Continue reading »

Oct 192017

The following is a post by staff writer, Peter.

A million headlines have captured bitcoin’s dramatic climb in value and occasional price dips over the past 18 months, a period in which the cryptocurrency has escalated in value from under $500 USD to over $4,000 USD.

This constant onslaught of news has certainly made bitcoin a household name and put it on the tips of investors’ tongues around the globe.  All the commotion leaves many wondering if and when they should put their money into bitcoin as a long-term investment.

Hesitation on the part of investors to dive into bitcoin is understandable.  Cryptocurrency represents a quantum leap forward with how we perceive money as it upends centuries of government issued and regulated fiat currency.

It’s an exciting paradigm shift for bold, forward-thinking investors, but the same diligent consideration of stability and safeguards inherent in traditional investments can be taken when approaching bitcoin.

The sustained, upward trend of bitcoin’s appreciation and increasing availability as a payment method for goods and services should bolster investor confidence.  Bitcoin and blockchain banking are legitimate and here to stay.

Bitcoins provide an incredible investment opportunity for those looking to build their portfolios.  Many predict bitcoin will only continue to rise in popularity and value over the coming years.

Bitcoin’s secure method of removing middle parties that often take portions of funding during traditional financial transactions makes it attractive to investors desiring more control and profit out of their portfolio. Trading and exchanging bitcoin currency allows these investors to cut out the middleman and exchange money on a peer-to-peer basis.

Purchasing bitcoin now while the market is still growing may provide exponential growth in value as investors and consumers of the cryptocurrency surge.  It’s the old Economics 101 principle of supply and demand, and bitcoin has an eventual supply limit of 21 million bitcoins that will ever circulate.  Analysts project that 80% of that total will be mined by 2018.  As initial coin offerings (ICO) become more commonplace, so does demand.

But wading through the vast sea of bitcoin information on the internet and separating fact from fiction is a daunting task.  Investors want straightforward answers delivered in a timely manner.  They deserve a trusted partner who will help navigate the cryptocurrency  rapids while keeping their bitcoin investments secure and appreciating in value.

The needs of investors presents a unique challenge in how best to provide banking capability that offers the convenience and trust of traditional financial institutions combined with the protocol requirements, such as blockchain and smart contracts, for cryptocurrency.

The logistics of investing in bitcoin are made easy and effortless thanks to Bankera, which will offer the traditional style banking services customers love for cryptocurrencies.  It’s banking in the blockchain era with button click simplicity.

If you are looking to buy larger amounts of bitcoin, trade exchanges may be a better option for you when it comes to acquiring this currency. These sources offer smaller service fees allowing you to save money while you change over your funds. Similar to starting a new bank account, consumers are able to open accounts with these trade exchanges allowing change over funds conveniently as needed.

Overall, bitcoin provides an incredible investment option for any consumer or investor looking to grow and develop their investment portfolio. Providing the world with a decentralized form of currency exchange, bitcoins allow consumers to exchange funds without the hassle of third party organizations that ratchet up service fees and surcharges for their involvement transactions.

With an impressive track record of returns and a sunny forecast for appreciation, including bitcoin in your comprehensive financial strategy makes good sense. There may be no time like the present, and investing now is a great place to start if you’re looking to grow your portfolio in the coming months and years.

Sep 182017

What is a Blockchain?

A blockchain is basically a digital and decentralized ledger that can record virtually any type of transaction between 2 parties in an efficient, verifiable, permanent, and secure way. The first blockchain was conceptualised by Satoshi Nakamoto in 2008 and implemented in 2009 as a core component of the digital currency Bitcoin, where it serves as the public ledger for all transactions. 🙂 Since the creation of Bitcoin, the tech community has found other potential uses for blockchain technology. It can also assign title rights by providing a record that compels offer and acceptance.

The Rise of Blockchain Technology

Each of the Big Four accounting firms is testing blockchain technologies in various formats. Ernst & Young has provided cryptocurrency wallets to all (Swiss) employees, installed a Bitcoin ATM in their Switzerland office, and accepts Bitcoin as payment for all its consulting services. The CEO of Ernst & Young Switzerland stated, “We don’t only want to talk about digitalization, but also actively drive this process together with our employees and our clients. It is important to us that everybody gets on board and prepares themselves for the revolution set to take place in the business world through blockchains, [to] smart contracts and digital currencies.” PricewaterhouseCoopers (PwC), Deloitte, and KPMG are all currently testing private blockchains.

Buying Cryptocurrency

One way to ride the blockchain train is to invest in cryptocurrencies that use this technology. There are many to choose from, but the most popular ones are Bitcoin, Bitcoin Cash, Ethereum, Ripple, Litecoin, and Dash. They are all a little different. Bitcoin, for instance, is mostly used as a payment platform and may not be particularly scalable beyond being used for payments. However, Ethereum may have considerably larger aspirations because it’s an entire platform that enables savvy developers to build and deploy decentralized applications and smart contracts. With no central point of failure and secured using cryptography, applications are well protected against hacking attacks and fraudulent activities. The digital token used to buy for services on the Ethereum network is called Ether. There’s a saying that Ether is to Bitcoin as silver is to gold.

So last week I decided to buy 4 Ether. 🙂 I think the Ethereum platform has a lot of potential, but speculating in the nascent cryptocurrency market is akin to gambling due to its high risk nature. This is why I didn’t buy much.

Continue reading »