Stagnant Gold prices are not helping attract the professional players into the market. The price of Oil at a 4 year high trading over $70 dollars pulling some Wall Street Gold traders into a market with more upside potential and more volatility.
A stronger U.S. Dollar keeping a lid on any Gold rally and the price of Silver is just treading water at these levels.
Continued strong corporate earnings reported keeping the average investor in the equity market.
Overall compliancy has settled into the equity markets and unless something changes in that market or the U S dollar sells off significantly versus other currencies, the price of Gold has little chance of obtaining a sustained rally.
News From the Cryptocurrency Front
On Friday, Goldman Sachs became the first Wall Street Bank to announce that they are moving forward with plans to set up the first Bitcoin trading operation on the street. This is a move that could create more legitimacy to the cryptocurrency and lend further support to the CME’s decision to take on Bitcoin as a future’s cash settled contract.
While Goldman is not initially going to be buying and selling actual Bitcoins the Bank is going in that direction looking for the possibility of receiving regulatory approval and how to address the high risks associated with trading this type of product.
Since we have been receiving many questions regarding the Bitcoin craze and the new Blockchain platforms, I decided to once again write about the relationship between Blockchain and the Cryptocurrency.
In the past we had spoken about the practical applications in the Blockchain network and how Cryptocurrencies fit into these platforms.
I try to keep it simple. First let’s talk about how Blockchain network works. A Blockchain is a highly encrypted and verified shared document, in which each entry in the chain must be confirmed and verified chronologically before the process can continue. Picture it as a computer spreadsheet that is duplicated thousands of times across a network of computers. You can also call it an incorruptible program of anything of value.
What makes the Blochchain technology so exciting is the thousands of potential applications being developed. The Blockchain system is going to change everyone’s life from the way you transact business or manage your assets , to the way you use your computer applications, vote, rent a car, and eventually prove who you are.
Just think how this technology can transform banking transactions, personal hospital records and government data such as social security records and driver licenses. All these applications that you control who has the right to see them.
Currently, there are hundreds of developers working with private enterprises, corporations and governments starting to offer specific applications as needed.
Now to explain how Bitcoin relates to the Blockchain.
Bitcoin is a digital currency launched in 2009 with the intention of simplifying online transactions by bypassing government control of currency. It does this by storing and transacting the currency over a Blockchain network. Bitcoin is not a Blockchain in itself. Rather you can describe the Blockchain as the operating system and Bitcoin as one of the many applications on the Blockchain network.
Cryptocurrencies, or digital coins as they are also known, are bought and sold through an electronic network. You can buy or sell your Bitcoin or one of the hundreds of other currencies offered in the network. The Blockchain of cryptocurrencies is a community record across the globe where each node in the network records and verifies the data of each transaction that occurs in that network.
Each computer on the network competes on unscrambling the answers, and the winning computer adds this ‘block’ to the ‘blockchain’ in the order that the ‘block’ arrived. The winner broadcasts his proof to the rest of the network, which checks that proof and verifies it before queuing the ‘block’ to complete the transaction. Parties involved are assured that participants have screened and okayed the transaction.
For someone as old as I am, this is where I fall off the ship. I understand the concept, but how these transactions occur behind the scenes makes me uncomfortable. I’m an old brick-and-mortar guy. Nonetheless, it is important to understand the basics because Blockchain applications are here to stay and will affect everyone on the planet in the years to come.
I hope I gave you some understanding on how this works. To clear my head I’m going up to the attic to try and find my yo-yo and top. Life was much simpler then.
But before I do so I must end with a reminder. We all know that Dillon Gage a leader in the physical storage business. We are now offering our clients segregated cold storage for their Bitcoin and other digital asset holdings.
For further information in this regard please contact Mark Furmanek at: 972.386.2901.
Have a wonderful Monday.
Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.