21 Million for Billions

The price of Bitcoin has slowly declined over the past few months despite many developments and signs of consumer and merchant adoption.

This past summer it dropped from:

  •  $620 to $520 from July 20th – August 20th,
  •  $500 to $420 from August 20th – September 20th,

and most recently a drop of $30 US Dollars (13%) on this past Friday, September 19th to under $400.

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The Alibaba IPO resulted in the most recent price drop.

Alibaba raised $25 billion in its debut, making it the largest IPO in history. It is a massive company with many internet subsidiaries such as Taobao Marketplace, Tmall, eTao, AliExpress.com and Alipay. In the month of August, the Chinese Yuan represented 70% of all Bitcoin trade volume. It makes sense that international and domestic investors sold some of their Bitcoin to invest in the largest IPO in history. On a side note, people also probably sold some Bitcoin to get the new iPhone 6 and 6+.

The price is still sitting in the hundreds but the recent decline has everyone in the ecosystem wondering what app needs to be developed or what company needs to start accepting this as payment for Bitcoin to get back that comma? What about  all of the projected price targets for the end of 2014 of $1,400 or upwards of $1,800?

Originally, with Bitcoin any news was good news to get to word out regarding this new developing digital currency. Now positive sentiment seems to not have as drastic an effect on the price. The most recent exception, PayPal’s announcement that it would integrate Bitcoin payments for digital goods brought the price back up from $395 to $445.

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In addition there PayPal’s subsidiary, Braintree, also announced a few weeks ago that they would also be integrating Bitcoin payments into their SDK.

The scale and reach of our various digital mediums make any sort of news or event nowadays is immediate global news. The fact that we are inseparable from our mobile devices means any change in sentiment can have  immediate effects on the price of any type of market or commodity because people can trade from their mobile devices. This is especially true with the Bitcoin market given its volatility.

The price a year ago, September 20th, 2013 was $123 US dollars. It now is sitting over $400 and people are actually considering this a low! This is great news, and here is why. Despite the sell and downward market movement over the past few months, Bitcoin is still heavily being invested in and developed in the form of:


Blockchain APIs 

First to market or best in class.

The power is in the software, the mathematics that govern the distribution rate of new coins.

  • September 2014- There are currently 13 million of 21 million coins in the market with 25 new BTC mined  every ten minutes.
  • September 2016- 15 million of 21 million coins in the market releasing 12.5 BTC every ten minutes. THIS
  • September 2020- 18 million of 21 million coins in the market for 5 billion people connected to the Internet.

Machines “the Internet of Things” also connected can use Bitcoins as flow control payment for operations.


On September 15, 2014   87,120 transactions took place, the top 5 highest ever in one day; A few days before the price drop.  The only other time was in November of 2013 when Bitcoin was around 1,000 US dollars. The price across exchanges follows transaction volume for good or for bad. If there is enough limit order volume in the book, the order gets filled at the same price of the last transaction. If there is not enough order volume, the next best price in the book fills the order.

There is a lot going on behind the scenes that price and the general public sentiment doesn’t reflect. Things like the Alibaba IPO show Bitcoin is here to stay. The LARGEST IPO in the history drove the price down only 30$ dollars. Bitcoin is extremely responsive  international market in this sense. It is just the beginning for this type of international network. The software is open source, it reaches anywhere in the world with internet. It’s borderless divisible internet substance in the sense that half of a Bitcoin or even a 1,000th of a Bitcoin is still Bitcoin. Half of a penny, the physical object… isn’t still money. 21 million coins for billions of people, all whom will have have mobile banks in their pocket.

 

Metcalfe’s Law and the Network Effect

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Metcalfe’s Law is related to the number of unique connections in a network of a number of nodes(n) expressed as n(n-1)/2.

More Bitcoin nodes, more efficient relay of transactions throughout the network. There are currently around 7,000 reachable nodes in the world. The future of Bitcoin has already arrived in this sense. The software just takes time to be evenly distributed to everyone around the world. As Bitcoin becomes easier to use, and I mean easier than using a piece of plastic and signing your name the price will follow the value of this network.

Moore’s Law 

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The network is exponentially increasing. Miners are being built on chips down to 16nm and 14nm.

 

Node.js

Installed npm package for:

  • Bitcoin.js + browserfy + uglify
  • Express
  • Redis
  • Jasmine
  • Karma
  • Supertest
  • Chain API
  • nforce
  • Bitcore

 

Salesforce1 and Bitcoin

Salesforce.com is the leader in customer relationship management (CRM). The Salesforce.com1 platform allows you to make you own applications on the Salesforce platform. These enterprise grade solutions and CRM applications could spark a new wave of business-to-business applications for merchants and retailers that would make Bitcoin a more seamless and secure payment system.

Salesforce1 + Heroku 

The ability to record data and know your customers is intrinsically valuable to any company. These things can be done using the Salesforce1 platform and Heroku.

The biggest concern regarding Bitcoin exchanges and wallet providers from a regulatory standpoint is that they are considered money transmitters and therefore need to abide by the existing federal and state Financial Service Laws of fiat currency.

Node.js

The underlying technology of Bitcoin enables so much accessible data on transactions to be pulled using Blockchain APIs from companies like Chain.

The Salesforce.com1 platform can push and pull data from the Blockchain APIs used on the web application built on Heroku with Node.js.

Using the CRM software, businesses that operate with a Bitcoin License can generate reports on their customers, their Bitcoin transactions, their tax requirements on capital gains; and pull all of this data from blockchain APIs.

The combination is this:

Enable small and medium size business that want to accept Bitcoin as a payment either online or in-store to use applications built on the Salesforce1 platform to organize transaction data from the Blockchain, know their customer and be able to provide this data in the form of generated reports to those who need it to ensure state and federal regulatory compliance.

The power is in the endless capabilities of Salesforce1 and the real-time data intensive transaction data built on Node.js. There is so much data available from the Blockchain.

Salesforce can scale these Bitcoin Enterprise applications via their appexchange store to companies around the world and in doing so create a Bitcoin ecosystem that doesn’t stifle innovation due to regulatory concerns.

Efficient and effective Bitcoin Transaction Management Software on the Salesforce1 Platfrom for SMEs.