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By Jemima Kelly<br><br>LONDON, Aug 10 (Reuters) - Bitcoin and other "cryptocurrencies" are big money, virtually as big as Goldman Sachs and Royal Bank of Scotland combined.<br><br>The price of a single bitcoin hit an all-time high of above $3,500 this week, dragging up the value of hundreds of newer, smaller digital rivals in its wake. Now some investors fear a giant crypto-bubble may be about to burst.<br><br>It has been a year of unprecedented growth for the largely unregulated market, with dozens of new currencies appearing every month in "Initial Coin Offerings" or ICOs. They have achieved value almost instantly, drawing in those who are eager to get in and make a quick buck.<br><br>At the start of 2017, the total value - or market cap - of all cryptocurrencies in existence was about $17.5 billion, with bitcoin making up almost 90 percent of that, according to industry data firm CoinMarketCap.<br><br>It is now around $120 billion - around the same value as Goldman and RBS together - and bitcoin makes up only 46 percent.<br><br>Bitcoin Cash, a clone of bitcoin that was split off from the original last week by a rival group of developers, was valued at more than $12 billion less than 24 hours after it had started trading.<br><br>"It's just created new value out of nowhere," said Rob Moffat, a partner at Balderton Capital, a London-based venture capital firm who focuses on fintech. "There's no fundamentals behind any of this - it's all based on public perception, so you can start to see some really strange phenomena."<br><br>For an interactive Reuters graphic of the top cryptocurrencies, click on: website<br><br>Cryptocurrencies - so-called because cryptography is used to keep transactions secure - allow anonymous peer-to-peer transactions between individual users, without the need for banks or central banks. They use blockchain technology, a shared record-keeping and processing system that means digital money cannot be copied and spent more than once.<br><br>Billionaire U.S. investor Howard Marks likens the market to the dotcom bubble of the turn of the century - whose demise he predicted. He said in a recent investor letter that digital currencies were an "unfounded fad ... based on a willingness to ascribe value to something that has little or none beyond what people will pay for it".<br><br>But advocates of cryptocurrencies say 2017 is just the beginning of bull run. They argue the finite nature of these currency units - there will never be more than 21 million bitcoin, for example - as well as the technological innovation that underpins them will ensure their enduring value.<br><br>"The idea of this thing being a bubble is silly. We're in the bottom of the first innings," said Miguel Vias of Ripple, the third-biggest cryptocurrency, who was previously global head of precious metals and metal options at CME Group.<br><br>DASH TO ETHER<br><br>Whichever way cryptocurrencies move, they are likely to move together because their values are highly correlated, feeding off each other and magnifying the market effect.<br><br>That's partly down to investor sentiment, but also because the start-ups issuing new coins in ICOs generally collect money in a more liquid cryptocurrency, such as bitcoin or, more commonly, Ethereum's ether - the second-biggest cryptocurrency in total value.<br><br>That has driven demand for ether, which has climbed over 3,000 percent so far this year and now has a market cap of around $28 billion.<br><br>Bitcoin, which was launched in 2009, was the first successful cryptocurrency and is still easily the biggest, with a market cap of over $54 billion.<br><br>Its price has shot up around 225 percent so this year, and performed better than any conventional, central-bank issued currency in every year since 2010 bar 2014.<br><br>The blockchain-based currencies that have been built since bitcoin - 842, at last count - vary hugely in terms of their credibility.<br><br>Sceptics say bitcoin and its rivals are not particularly useful as currencies, as they are still volatile and not accepted by most merchants. They are mostly just used for speculative trading purposes.<br><br>There are some signs of acceptance of the biggest players by the establishment, however; Ethereum has been piloted by the United Nations as a way to distribute funds to Syrian refugees. Ripple has been successfully used as a payment method between settlement systems in a Bank of England trial.<br><br>Some other, smaller cryptocurrencies such as Dash, Monero and Z-cash are seen as having real value by some users because they offer an even higher level of anonymity than the likes of bitcoin. Whistle-blowing website Wikileaks this week said it would accept Z-cash for online donations.<br><br>'DARWINISM IN REAL-TIME'<br><br>It is mainly the new "token" cryptocurrencies that are issued in ICOs with no regulatory oversight, which have exploded since the start of the year, that are causing the most anxiety.<br><br>One, the "Useless Ethereum Token", which appears to have been set up as a way of showing how worthless many of the ICOs really are, is nonetheless changing hands for 3 cents a unit. "No value, no security, and no product. Just me, spending your money," its website states.<br><br>"It's just so easy to raise money on an ICO right now, it just feels like there's a gold rush going on there," said Moffat. "Some of the new currencies - beyond bitcoin and Ethereum - could crash to zero."<br><br>By mid-July, about $1.1 billion had been raised in ICOs this year, roughly 10 times more than that in the whole of 2016, according to cryptocurrency research firm Smith + Crown.  If you cherished this article and you would like to acquire more info relating to bubble shooter pet i implore you to visit our internet site. (Graphic: website<br><br>The rapid ascent of ICOs prompted the U.S. Securities and Exchange Commission (SEC) to warn last month that some ICOs should be regulated like other securities.<br><br>This is new digital territory and how the rapidly proliferating cryptocurrency market will play out is anyone's guess.<br><br>While critics say the highly correlated nature of the currencies means the weakness of newer entrants could bring the whole house down; others argue market forces will ensure the best players prevail.<br><br>"Will some of these (currencies) go away? Of course," said Vias of Ripple. "We´re going to see Darwinism in real-time here. Only the strong will survive."<br><br>(Reporting by Jemima Kelly; Editing by Pravin Char)
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Tech and business bros in a bubble. REUTERS/Albert Gea <br><br>For the last year, the tech industry has been fretting about a bubble.<br><br>Investors on all sides argued over whether valuations were too high or whether the tech sector as a whole was still undervalued. <br><br>Yet while Silicon Valley was obsessing over the startup bubble, it collectively failed to realize it was living in a completely different kind of bubble: a political bubble. <br><br>As the reality struck late Tuesday night that Donald Trump would be the next US president, tech leaders found themselves reeling.  <br><br>Y Combinator President Sam Altman, who had compared Trump to Hitler but kept Trump-supporter Peter Thiel as a YC partner, tweeted that it felt like "the worst thing to happen in my life." <br><br>Hyperloop One cofounder and early Uber investor, Shervin Pishevar, started a plan to get California to secede from the union.  <br><br>Yes, there was a bubble in Silicon Valley — one that insulated it from the experiences and beliefs of half the nation. <br><br>A unified front?<br>Before the election, finding a Trump supporter in Silicon Valley was exceptionally rare.  <br><br>It shouldn't have been. Almost half the voters in the United States supported Trump on Tuesday. In San Francisco, one in 10 votes was cast for Trump. In Santa Clara county, home to a lot of  giant tech companies, one in five votes went to Trump. <br><br>If you adored this short article and you would certainly such as to receive even more facts relating to bubble shooter pet kindly check out the website. As a Silicon Valley reporter, I personally spent over a month trying to find someone who would speak about supporting Trump. The one senior software engineer at a big tech company I did find refused to be identified publicly. He had already faced contempt and shunning after telling his teammates at work.  <br><br>Most of the time when I asked a venture capitalist or a tech CEO if they knew anyone who was for the Republican Presidential nominee, I was met with laughter or a quick dismissal: "Oh no, I don't know anyone who would support him." <br><br>Many Silicon Valley leaders tried to stop a Trump presidency, and most thought it had worked.<br><br>The push started in the early fall when more than 140 members of the tech elite signed a memo on how Trump would be a disaster for innovation. Several others, including LinkedIn founder Reid Hoffman and Facebook cofounder Dustin Moskovitz, mobilized voting campaigns or donated millions. It seemed like a foregone conclusion Hillary Clinton would win, until it wasn't. <br><br>Silicon Valley awoke to a world that hadn't downloaded its message. <br><br>A scene from a Silicon Valley Fashion Week in 2014. Business Insider<br><br>"The biggest people in technology, media, and finance were all trying to figure out how to stop Donald Trump and he still won," Kik CEO Ted Livingston told Recode right after the results. They "have been saying to the public, ‘No, no! You don't get it!' Yesterday, the public turned around and said to them, ‘No, you don't get it.' They underestimated how much a big chunk of the country is hurting.<br><br>Inside the cozy bubble<br>Anybody who's looked closely at Silicon Valley over the last couple years should not have been surprised that a lot of its leaders are completely out of touch with reality in a lot of the country. <br><br>A startup Juicero raised $130 million and told the world it was going to solve the "produce gap" in which people don't eat enough fruits or vegetables. Its first product? A $700 wi-fi enabled juicer that looks great on a kitchen counter but does very little to help the very real problem of affordable access to fruits and vegetables, especially in food deserts.  <br><br>Then there's the litany of other "problems" Silicon Valley is solving: private chefs on-demand, a startup to take out your trash for you, or an app that connects people who are down to lunch.  <br><br>The silly ideas are easy to write down to the age-old differences between the rich and the poor, between Palo Alto and podunk USA. <br><br>But it's more than cultural dissonance.<br><br>Silicon Valley missed that people from rural towns to disenfranchised urban cores are truly hurting, in part because of an industry that they've created.  <br><br>The death of manufacturing jobs in the US is well-documented. Silicon Valley pundits tell the people who are losing jobs to technology and automation to learn new skills. Better yet, become an Uber driver or rent out your spare bedroom on Airbnb.  <br><br>Meanwhile, tech leaders are already spinning the next wave of tech-induced job loss as job creation. Uber CEO Travis Kalanick said that the rise of self-driving cars and trucks will mean more jobs, as people will be needed to maintain the fleets and step in when the machines can't handle it. But that won't be enough to account for the fact that truck driver is the most common job in 29 states as of 2014, according to NPR. <br><br>the self-driving truck is all but in mass production at the moment and I just remembered this map pic.twitter.com/3oCkiyHNdn <br><br>— Findom De Siècle (@griph) November 10, 2016

Revision as of 11:57, 9 October 2017

Tech and business bros in a bubble. REUTERS/Albert Gea

For the last year, the tech industry has been fretting about a bubble.

Investors on all sides argued over whether valuations were too high or whether the tech sector as a whole was still undervalued.

Yet while Silicon Valley was obsessing over the startup bubble, it collectively failed to realize it was living in a completely different kind of bubble: a political bubble.

As the reality struck late Tuesday night that Donald Trump would be the next US president, tech leaders found themselves reeling. 

Y Combinator President Sam Altman, who had compared Trump to Hitler but kept Trump-supporter Peter Thiel as a YC partner, tweeted that it felt like "the worst thing to happen in my life."

Hyperloop One cofounder and early Uber investor, Shervin Pishevar, started a plan to get California to secede from the union. 

Yes, there was a bubble in Silicon Valley — one that insulated it from the experiences and beliefs of half the nation.

A unified front?
Before the election, finding a Trump supporter in Silicon Valley was exceptionally rare. 

It shouldn't have been. Almost half the voters in the United States supported Trump on Tuesday. In San Francisco, one in 10 votes was cast for Trump. In Santa Clara county, home to a lot of  giant tech companies, one in five votes went to Trump.

If you adored this short article and you would certainly such as to receive even more facts relating to bubble shooter pet kindly check out the website. As a Silicon Valley reporter, I personally spent over a month trying to find someone who would speak about supporting Trump. The one senior software engineer at a big tech company I did find refused to be identified publicly. He had already faced contempt and shunning after telling his teammates at work. 

Most of the time when I asked a venture capitalist or a tech CEO if they knew anyone who was for the Republican Presidential nominee, I was met with laughter or a quick dismissal: "Oh no, I don't know anyone who would support him."

Many Silicon Valley leaders tried to stop a Trump presidency, and most thought it had worked.

The push started in the early fall when more than 140 members of the tech elite signed a memo on how Trump would be a disaster for innovation. Several others, including LinkedIn founder Reid Hoffman and Facebook cofounder Dustin Moskovitz, mobilized voting campaigns or donated millions. It seemed like a foregone conclusion Hillary Clinton would win, until it wasn't.

Silicon Valley awoke to a world that hadn't downloaded its message. 

A scene from a Silicon Valley Fashion Week in 2014. Business Insider

"The biggest people in technology, media, and finance were all trying to figure out how to stop Donald Trump and he still won," Kik CEO Ted Livingston told Recode right after the results. They "have been saying to the public, ‘No, no! You don't get it!' Yesterday, the public turned around and said to them, ‘No, you don't get it.' They underestimated how much a big chunk of the country is hurting." 

Inside the cozy bubble
Anybody who's looked closely at Silicon Valley over the last couple years should not have been surprised that a lot of its leaders are completely out of touch with reality in a lot of the country.

A startup Juicero raised $130 million and told the world it was going to solve the "produce gap" in which people don't eat enough fruits or vegetables. Its first product? A $700 wi-fi enabled juicer that looks great on a kitchen counter but does very little to help the very real problem of affordable access to fruits and vegetables, especially in food deserts. 

Then there's the litany of other "problems" Silicon Valley is solving: private chefs on-demand, a startup to take out your trash for you, or an app that connects people who are down to lunch. 

The silly ideas are easy to write down to the age-old differences between the rich and the poor, between Palo Alto and podunk USA.

But it's more than cultural dissonance.

Silicon Valley missed that people from rural towns to disenfranchised urban cores are truly hurting, in part because of an industry that they've created. 

The death of manufacturing jobs in the US is well-documented. Silicon Valley pundits tell the people who are losing jobs to technology and automation to learn new skills. Better yet, become an Uber driver or rent out your spare bedroom on Airbnb. 

Meanwhile, tech leaders are already spinning the next wave of tech-induced job loss as job creation. Uber CEO Travis Kalanick said that the rise of self-driving cars and trucks will mean more jobs, as people will be needed to maintain the fleets and step in when the machines can't handle it. But that won't be enough to account for the fact that truck driver is the most common job in 29 states as of 2014, according to NPR.

the self-driving truck is all but in mass production at the moment and I just remembered this map pic.twitter.com/3oCkiyHNdn

— Findom De Siècle (@griph) November 10, 2016