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WiFi security hasn’t changed much since WPA2 came to be in 2004, and that’s becoming increasingly apparent when public hotspots are frequently risky and glaring exploits are all too common. It’s about to get a long-due upgrade, though: the Wi-Fi Alliance plans to roll out a WPA3 standard that addresses a number of weak points. For many, the highlight will be individualized data encryption. Even if you’re on an open public network, you won’t have to worry quite so much about someone snooping on your data.

You’ll also see safeguards even when people have terrible passwords, and a simplified security process for devices that have either a tiny display or none at all (say, wearable devices or smart home gadgets). And companies or governments that need stricter security will have access to a 192-bit security suite.

WPA3 should arrive sometime in 2018, and comes on the back of other improvements like more thorough testing to catch potential vulnerabilities before they require emergency patches. These initiatives aren’t going to guarantee airtight security when you’re at the coffee shop, but they could at least eliminate some of WiFi’s more worrying flaws.

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Today’s vision of a smart home has more to do with what’s technologically possible than what people really need.

Thus the endless parade of internet-connected wine openers, water bottles, meat thermometers and refrigerators, and a dearth of automation that would clean and fold our laundry, pick up things around the house or assist aging people as their physical strength wanes.

Not that some tinkerers aren’t trying to come up with life-changing tools. The annual Consumer Electronics Show, which opened in Las Vegas on Tuesday, is a showcase of the latest innovations from big corporations and tiny startups. Some of these inventions could soon be useful to consumers. Others look outlandishly impractical — or maybe it’s too soon to tell.

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His ultimate quest, though, was the automobile. The integration of the internet and self-driving, emission-free vehicles, he once said, would not only clean up the country’s polluted cities, it would free up millions of people to consume more of LeEco’s services on their commutes.

Visionary or reckless risk-taker? Self-made internet entrepreneur Jia Yueting once ranked among China’s richest men, but overexpansion and a funding crunch have him scrambling to save his sprawling tech empire.

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Titles are chosen by editors and not journalists or experts. I fought my editor over the above title. Yes, I address the teaser—and I explain a solid altcoin investment model. But, that comes after the break. The first part of this article should be titled “Why would anyone quote cost or value in Bitcoin?”. The subjects are highly related, so bear with me…

Today, a reader asked this question:

Some financial sites discuss value in Bitcoin terms, rather
than dollars or Euros. Why would I calculate the value of a
new car, my rent or an investment in this way? It’s hard to
understand how much money I need!

Answer: Your right! It’s difficult to estimate the value of a car or your rent in terms of Bitcoin. You are paid in dollars or Euros—and your landlord quotes rent in the same currency.

On the other hand, it’s natural to gauge the value of something by comparing it to a commodity that you earn and spend at a steady or predictable rate. Therefore, your assumption that it makes more sense to determine value on a dollar-basis is absolutely correct. No one determines the value of a new car by comparing the cost with a government’s national debt—or the number of donuts you would need to sell (unless you are a donut maker).

But, this assumption is transitory. It is based on a historical paradigm that is gradually changing. We are entering a bold new era. A big debate is shaping up over How gradual is the change? But make no mistake: This change is occurring in our lifetimes…

That change will eventually lead you to estimate, earn, spend and value things in Bitcoin or a similar cryptocurrency. One day soon, fluctuations in the value of the US dollar or Euro will cause you to wonder “What is happening with the dollar?” rather than shake your confidence in Bitcoin. Bitcoin (or something similar) will integrate into your mindset as the exchange medium, rather than fiat currency of a nation state.

Naturally, a series of dominos must fall, before you realize that Bitcoin is the money. I predicted this four years ago, and the process is already occurring. It is retarded by two unfortunate events, but these are both temporary setbacks:

  • Today, more people are hoarding and speculating rather than accepting or spending Bitcoin for goods and services. This delays the day that it can act as a useful, functional currency.
  • Miners, users, vendors and developers are chasing different goals. This makes it very hard to agree on necessary changes that will address several critical technical problems (i.e. transaction cost, speed, electrical demand, replay issues, etc).

Both of these problems have solutions, and we have already seen the solutions at work in altcoins. Think of forks and altcoins as beta tests…Bitcoin will fold in the best of these technical improvements and will very likely continue to inch toward becoming the world’s de facto currency.

Revenue Neutral Investing

To answer the question in the title, let’s look at this from a completely different angle. The individual who asked the original question went on to ask this:

Cryptocurrency sites compare and track the cost of altcoins in
terms of Bitcoin rather than dollars. What’s with that?! Do they
assume that we will all be selling Bitcoin to buy the new altcoin?

It actually makes sense to value altcoins in terms of Bitcoin—even today. How so?…

This growing trend provides very useful information. This method of quotation helps the reader to determine the relative change in value between the two currencies and compare it to fundamentals that they learn from news and research. The information can then be used to hedge an investment or even craft a revenue-neutral investment strategy. Allow me to explain…

I am long on Bitcoin. This is not likely to change. So I keep a significant fraction of my wealth in this form.

But, I also understand that the use and market for cryptocurrencies is young and very immature. A very few other forks and altcoins are the real deal. They have solved some major technical flaws with Bitcoin and they have the potential to become a credible, functional currency. This isn’t the place to explain my favorite coins, but the strategy is relevant.

Since I already have a substantial position in Bitcoin, I wish to avoid further exposure in the market. Therefore, I invest long and short at the same time (for example, using puts and calls)* on certain coins that are likely to perform better than other coins. This reduces risk, by leaving me without a loss, if the entire market rises or falls. The only way I might lose is if I get it exactly wrong! That is, if the coins that I believe are scams do better than the ones that I feel are well-designed and with a solid adoption trend. (Remember: The risk reduction strategy is to invest on the difference between an overvalued dog and an under-performing beauty).

To avoid the downside scenario (i.e. getting it exactly wrong), focus on fundamentals and not the cost of a unit, short term trends, emotional zeal, or other technical issues. Don’t follow the crowd! Bet on value and bet against hype. (TIP: The take-away, here, is to do both at once!). Investors who consider only asset cost and trends are in a craps shoot. The smart money determines which coins are likely to be a better functional instrument than other coins and then sticks with a dollar cost averaging plan for months at a time.

Want to learn more? Want to know which coins I admire? Reach out. Let’s talk. I don’t bite.

* A regulated financial exchange for puts and calls does not exist for altcoins. But, with a little research, you can create an nearly equivalent futures contract or options instrument. You may need to be a bit creative.

Philip Raymond co-chairs CRYPSA, publishes A Wild Duck, hosts the Bitcoin Event and kicked off the Cryptocurrency Expo in Dubai. Click Here to inquire about a live presentation or consulting engagement.

Most of the cryptographic methods that keep important data secure use complex encryption software, and as a result, consume large amounts of power. As more and more electronic devices are being connected to the internet, there is a growing need for alternative low-power security methods, and this is often done by basing the security on hardware rather than software.

One of the most promising approaches to hardware-based, low-power security is to derive cryptographic keys from the randomness that inherently and uncontrollably emerges during the of nanoscale devices. These methods, called “physical unclonable functions” (PUFs), convert the random variations in the physical devices into the binary states of “0” and “1” to create unique, random cryptographic keys. These keys can then be used to encrypt data into cipher text, as well as decrypt it back into plain text, in a process that remains secure as long as the key remains private.

However, one of the biggest challenges facing PUF technology is its vulnerability to harsh environments. Since the physical randomness that forms the basis of the key usually arises from variations in electrical characteristics, and electrical characteristics are affected by external factors such as high temperatures and radiation, these devices often do not preserve their states when exposed to such conditions.

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Oh, Cheez…We’re back to this question, again!

As a Bitcoin columnist, I get this question a lot. Today, an answer was requested at Quora.com, where I am the lead contributor on cryptocurrencies:

“Clearly, some people value Bitcoin. But How can
this be? There is nothing there to give it value!”

Many individuals, like the one who asked this question, suspect that Bitcoin was pulled out of thin air—and that it is not backed by gold, a government, or an authoritative redemption guaranty. After all, it is just open source code. What stops me from creating an ElleryCoin using the same code?!

Let’s start with the short answer:

  • Indeed, it was pulled out thin air
  • It isn’t backed by an asset, government or promise
  • You could easily clone Bitcoin (the entire mining ecosystem) and distribute it yourself. It would be exactly like Bitcoin. Yet, Bitcoin is clearly valued by everyone, and your new coin is unlikely to generate interest or adoption.

A More Complete Answer: What is value?

Bitcoin has more intrinsic value than a government printed paper bill. The value arises from a combiation of fundamental properties:

  • It has a capped supply
  • It is widely recognized, liquid, and resistant to legislation
  • It has attained the robust supply-demand of a growing, 2-sided network.
  • It is open and transparent. This elevates user trust
  • Unlike cash and credit, Bitcoin requires no back-end settlement. That’s because it is not a payment instrument. Rather it is money itself.
  • Finally, it’s value is likely to be durable, because it is not printed by a country that has racked up debt. In fact, it can never be inflated.

Downside and Risks

But wait! What about the long transaction delay and high cost? There are sharp disagreements anong miners, users and developers concerning block size, transaction malleability, and replay issues. Aren’t these a deal killers? And what about wild volatility in the exchange rate? Doesn’t this retard adoption as a functional currency?

These are transient issues associated with a new technology. Although Bitcoin is weathering growth pains that arise from a new and distributed governance technology (democracy can be messy!), all of these issues have sound solutions. We have already witnessed and tested the solyutions with various forked coins. Think of them as beta tests. Even if current problems delay the day when you can spend bitcoin at every retail establishment—it is already sucking liquidity from national currencies and becoming the world’s de facto reserve currency.

Many individuals find all of this hard to accept. That is because we have been conditioned to think that ‘value’ arises from assets with ‘intrinsic’ value, the promise of redemption, or by edict. This is not true. In all things, (including gold, a Picasso painting, or your labor) value arises from simple supply and demand.

Some individuals claim that all other factors are secondary. But, even this statement is false. All other factors are irrelevant. They may be related, but they are not the source of value.

I recognize that this answer may seem smug or definitive. So, allow me to suggest related questions with answers that are a bit more interesting, because they are subtle. Unlike the question of value, these two questions are open to analysis and opinion: (1) “Will people continue to value bitcoin in the future?” — And (2) “When will Bitcoin stop swinging wildly in value?” (measured by its exchange rate with other currencies).

This is fun! Let’s explore…

Philip Raymond co-chairs CRYPSA, publishes A Wild Duck and hosts the New York Bitcoin Event. Last month, he kicked off the Cryptocurrency Expo in Dubai. Click Here to inquire about a live presentation or consulting engagement.

Let’s say that you no longer trust your currency exchange to host your Bitcoin wallet and you don’t trust a Trezor or Nano hardware wallet. You don’t trust your memory and you don’t trust your kids. And you certainly know better than to keep your wealth in your PC or phone. That would be downright crazy—right? What can you do?!

A growing number of people are printing paper wallets. It is the ultimate form of security. Some individuals even delete their cloud wallet, leaving everything to a string of hex characters or a QR code printed onto a slip of paper. (NB. You had better be certain that you and a few trusted individuals know how to find that piece of paper!)

But here’s an interesting mystery. If you print the paper wallet off-line and delete your other wallets, then how can the blockchain ‘know’ that you have changed wallets? The short answer: It doesn’t and you haven’t!

Let’s explore a bit deeper…

  • The deed to your house is stored and maintained by a registry. It is housed in a court house or other government building.
  • With a bearer bond, a certificate in your posession is the actual item of value.

But, in both cases, the fact that you made a photocopy of your deed or corporate bond is not of any consequence to others. It is the same with a Bitcoin wallet. (In this case, the ownership record is netiher in a government warehouse nor in your posession. It is crowd-sourced).

Printing out a paper wallet does not change your wallet ID. The paper wallet is simply another method of storing and retrieving the proof that you own a part of a mathematical solution set—That is, you know the solution to a problem.

Your paper wallet is just a copy the keys to your wealth. Of course, you may choose to destroy the other keys, that’s your business. No one knows or verifies that you still have access to your stored knowledge or how you stored it. It’s up to you to maintain access to the “document”. The blockchain only records a transfer of ownership from one wallet to another at the time of a payment transaction.

Got it? I hope you like the metaphors. I am fairly proud of myself for this explanation.

Philip Raymond co-chairs CRYPSA, publishes A Wild Duck and hosts the New York Bitcoin Event. Last month, he kicked off the Cryptocurrency Expo in Dubai. Click Here to inquire about a live presentation or consulting engagement.

China has unveiled three-year plans to increase the country’s economic competitiveness by developing “key technologies” in nine industrial sectors, from robotics to railways.

Other areas include smart cars, robotics, advanced shipbuilding and maritime equipment, modern agricultural machinery, advanced medical devices and drugs, new materials, smart manufacturing and machine tools.

The aim is “to make China a powerful manufacturing country” and upgrade the nation’s industrial power through “the internet, big data and artificial intelligence”, the commission said.

To achieve that goal, the agency has laid out specific targets to develop key technologies and guide research and the flow of funds in each sector.

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