Sprint's stock soars more than 70% after judge approves T-Mobile merger

New York (CNN Business)The $26 billion mergers between T-Mobile and Sprint has been approved, ending a years-long attempt to combine the United States' third- and fourth-largest wireless carriers.

A federal judge ruled Tuesday in favor of allowing the two telecom giants to combine, a decision that is expected to dramatically change the landscape of the United States wireless market. US District Court Judge Victor Marrero said in his ruling that he didn't envision the companies "would pursue anticompetitive behavior" and rejected the lawsuit brought by thirteen US states and the District of Columbia that sought to block the deal.

The merger will create three similarly sized competitors in the wireless business: the "New" T-Mobile, Verizon (VZ) and AT&T (T) (CNN parent company WarnerMedia is owned by AT&T). Satellite company Dish Network plans to use the deal as a catalyst to become a new wireless services provider.

The judge said that Sprint on its own likely couldn't "continue operating as a strong nationwide competitor." Sprint is currently in fourth place, but the company has been rapidly losing customers and claimed its path to deploying a nationwide 5G network without T-Mobile was uncertain. Marrero added that he believes Dish will enter the market and provide significant competition to fill the gap left by Sprint.

States' attorneys general argued that approving the merger would make wireless service and prices worse for Americans. But Marrero said he was ultimately unpersuaded by the states' economic theories and analytical modeling, writing that the two sides' claims ultimately came down to competing for crystal balls. He said he was relying substantially on his own "skills and frontline experience" to reach a decision.

"How the future manifests itself and brings to pass what it holds is a multifaceted phenomenon that is not necessarily guided by theoretical forces or mathematical models," he wrote.

Sprint's stock shot up a stunning 70% at the open. T-Mobile shares also spiked 12% early trading Tuesday.
T-Mobile CEO John Legere called the ruling a "huge victory" and said in a statement that the new company, which will retain the T-Mobile name, is "great for consumers and great for competition."

During the two week trial, Sprint and T-Mobile testified that combining would "supercharge" T-Mobile's Uncarrier strategy that has led to such perks for consumers as the end of wireless contracts, and would allow them to more quickly roll out superfast nationwide 5G, the crucial next-generation wireless network.

On Tuesday, the companies touted other benefits of the merger, including new jobs. They said the combination will ultimately employ 11,000 more full-time people than the standalone companies would have over the next four years. They said an additional 12,000 jobs will be created to staff 600 new stores and five new "customer experience centers."

The merger could be finalized in early April. A new website has been started to promote the combined companies at NewTMobile.com.

To alleviate antitrust concerns, Sprint and T-Mobile struck a deal with Dish Network (DISH), which plans to buy some wireless assets from the companies to create a new nationwide carrier. The companies hoped that would remedy the merger's effects on the market. They also promised not to raise prices for the first three years following the combination.

The merger saga between T-Mobile and Sprint has been ongoing since April 2018 when the current deal was proposed. Federal regulators, including the US Department of Justice and the Federal Communications Commission, already approved the merger last year. The states were the final hurdle, and Sprint (S) and T-Mobile (TMUS) battled for the deal's approval in a Manhattan federal court in December.

Both the FCC and the DOJ lauded the judge's decision. Justice Department antitrust chief Makan Delrahim said in a statement he was glad the judge agreed with the DOJ's decision to prop up Dish Network as a fourth wireless competitor.

FCC chairman Ajit Pai also said he was "pleased" with the decision, citing the companies' promise to expand 5G.

"This transaction represents a unique opportunity to speed up the deployment of 5G throughout the United States, put critical mid-band spectrum to more productive use, and bring much faster mobile broadband to rural Americans," Pai said in a statement. "This is a big win for American consumers."

Lingering concerns

The two attorneys general who led the states' fight against the merger were not pleased with the decision.
Letitia James, the AG from New York, said in a statement the reduced competition is "bad for consumers, bad for workers, and bad for innovation." She added that the states will examine a possible appeal.

California's AG Xavier Becerra said he is "prepared to fight as long as necessary to protect innovation and competitive costs."
The Communications Workers of America said in a statement Tuesday that the merger could put 30,000 jobs at risk.

"Throughout this process, regulators who are supposed to be protecting the public interest have ignored clear evidence that this merger would result in significant job loss for wireless workers," CWA President Chris Shelton said in the statement, adding that T-Mobile workers should be allowed to unionize if the merger is completed.

For consumers, the deal is likely to generate promotions and competitive offers from all three wireless giants in the short term, Forrester principal analyst Frank Gillett said in an emailed comment. But whether consumers are positively or negatively impacted in the long run will depend on Dish's ability to enter the market.

"The long-term question of whether there is sufficient competition for wireless service is up for debate," Gillett said."The answer will come from Dish Network and its CEO — if they follow through on promises to invest in a 5G network and become fully competitive over the next seven years, then there will still be four major options."

Dish has wanted to enter the wireless market for a decade, spending around $12 billion on wireless spectrum and promising the FCC that it will have a nationwide 5G network by 2023.

But there are big hurdles for Dish: it currently does not have its own network and would start out serving its own cell phone customers on T-Mobile's network infrastructure. It will also inherit only prepaid subscribers from Sprint as part of the merger deal, a type of customer generally considered less essential to wireless companies.

Dish CEO Charlie Ergen argued during the trial that his company is up to the task.

"This isn't some fantasy for us," Ergen testified. "We've wanted to get into this wireless business for the past 10 years. I've worked on it darn near every day. Now, the stars have aligned to allow us to do this and we know we can compete."

Blockchain startup Ripple buys $30 million stake in MoneyGram

Blockchain firm Ripple has bought $30 million worth of shares and warrants in MoneyGram International Inc, the two companies said on Monday, as they partner to use Ripple’s product for cross-border payment and foreign exchange settlement.

Ripple bought MoneyGram’s stock at $4.10 per share, representing a premium of about 183% to its Monday closing price. The partnership will initially be for two years, MoneyGram said.

Shares of MoneyGram surged about 77% to $2.56 after the closing bell.

Ripple may also buy additional common stock or warrants for up to $20 million at a minimum price of $4.10 per share, MoneyGram said.

The partnership will focus on Ripple’s xRapid, a platform for cross-border payments that uses XRP, a virtual currency powered by blockchain to send and receive currencies.

“Through Ripple’s xRapid product, we will have the ability to instantly settle funds from U.S. dollars to destination currencies on a 24/7 basis, which has the potential to revolutionize our operations and dramatically streamline our global liquidity management,” MoneyGram Chief Executive Officer Alex Holmes said in a statement.

Is Bitcoin Creator Satoshi Nakamoto Writing a Book?

A schism appeared within the cryptocurrency community around the time a new statement and book excerpt purportedly released by Satoshi Nakamotox
Satoshi Nakamoto
The pseudonymous name used by the original inventor of the Bitcoin cryptocurrency.

Learn moreHide all definitions, the pseudonymous creator of Bitcoin.

NakamotoFamilyFoundation.org, A newly-registered website launched June 26, 2018, captured the attention of both the mainstream media and the cryptocurrency community. The Nakamoto Family Foundation released the “first excerpt to a literary work consisting of two parts”, a sample of an upcoming book purportedly by Satoshi Nakamoto, the mysterious creator behind the cryptocurrency revolution.

Is Satoshi Nakamoto Back?

The Nakamoto Family Foundation website certainly reflects the mysterious persona of the creator of Bitcoin, providing readers within insight into the earliest days of Bitcoin development alongside a cryptogram that, when solved, provides the title of the two yet-to-be-released books: “honne and tatamae.”

The terms used as titles for the books, in a similar manner to the double entendre associated with the Satoshi Nakamoto pseudonym, are associated with a Japanese expression that “the contrast between a person’s true feelings and desires” and “the behavior and opinions one displays in public.”

The sample text provided by the newly-registered website runs 21 pages and represents a dramatic shift in writing tone and style. Over a meandering dialogue, the presented text outlines the supposed history of the Bitcoin creator, chronicling the nascent days of Bitcoin development and origins of the principles that drive cryptocurrency.

“The principles for bitcoin originated from the cypherpunks, a community I naturally gravitated to as a fourteen-year-old, a place where anonymity was as fundamental as breathing, where in order for genuine freedom of speech to exist in an open society one had to be able to fully and anonymously express themselves.”

Cryptocurrency Community Remains Unconvinced

While mainstream news platforms such as Bloomberg and Fortune are quick to declare the return of the Bitcoin progenitor, however, many long-standing members of the cryptocurrency community remain unconvinced.

One of the primary issues with the authenticity of the “new” Nakamoto release is the sudden divergence in writing style. Satoshi Nakamoto’s collected works and posts, available via The Complete Satoshi, are decidedly austere and terse in composition.

The cryptocurrency community is no stranger to “faketoshis” imitating the Bitcoin creator, with some cryptocurrency personas going so far as to claim the title of Satoshi Nakamoto while completely refusing to deliver proof — catalyzing angry reactions from crypto industry leaders such as Vitalik Buterin.

While the “Duality” except published on the Nakamoto Family Foundation is surely an interesting read with hypothetical answers to some of the longest-running questions within the cryptocurrency ecosystem, it’s impossible to determine the provenance of the information it offers.

Until the real Satoshi signs a message with any of the original keys used in previously published announcements or demonstrates ownership over the Nakamoto wallet, Occam’s razor dictates that this latest “update” from the Bitcoin creator is likely another impostor.

DogeCoin Hard Forks TO ‘DogEtherum’ Later in 2018

DOGECOIN’S ‘SERIOUS’ YEAR?

News that Dogecoin had become a test asset for Ethereum’s inter-coin Rinkeby testnet has sparked a project aiming to hard fork it later this year.

Dogethereum (DOGX), which shares its name with the Rinkeby project known as Dogethereum Bridge, is looking to branch off from the Dogecoin chain in fall. This would constitute Dogecoin’s first ever hard fork.

“Dogethereum is new decentralized digital currency, it will be founded on snapshot of popular Dogecoin, based on ETH algorithm with fastest speed of transactions, smart contracts,” developers describe on Bitcointalk Monday.

“Our goal it to push Doge currencies to the brand new direction, with no ASIC mining, speed and simplicity.”

Dogethereum Bridge came about as part of Ethereum’s truebit technology – a plan to help the largest altcoin scale to meet user demand.

On February 5, engineers managed to send DOGE to Rinkeby, marking a major step in cryptocurrency interoperation and sparking renewed interest in the altcoin many assumed was simply a meme in cryptocurrency form.

Circle, polo Knicks acquired / Germany "Bitcoin payments tax-free."

Password currency markets last week, went after a relatively steady flow ttimyeo overall gangbohapse. Bitcoin has had climbed by about 14 percent the previous week, the ripple was up nearly 30% recorded the biggest rise of the top coin.

Whereas the situation is dramatically reduced transaction volume due to the recent price stabilization. Block record low last weekend, Bitcoin transactions within two years after March 2016, according to the amount of about 195,500 pieces Chain Information Field. This is half the level of 370,000 at the time of the end of last year hit a record Bitcoin is the best $ 20,000.

Gwancheukga markets have interpreted as showing one aspect breather ahead of the release of the guidelines, governments reveal the look forward in earnest, after a roller-coaster rally and repeated changes from April from March. The news clipping passes the main news last week two.

1) Circle, password, currency exchange Knicks acquired Polo

Circle (Circle) are the Polo Nix (Poloniex) is a US-based large cryptocurrency exchange arguments about 4,350 one hundred million won money that we announce the 26th Fortune magazine has. This news circles is expected to grow as a powerful conglomerate that provides Exchange, wallets, cryptocurrency various services such as pay-bit coin database or page.

Polo Knicks typical first-generation crypto Founded in January 2014 - has provided the meantime, services for the global users in over 100 countries (non-monetary exchange of legal tender only password as the key currency) crypto exchange. Once the former accounting for over 50% of the global volume and Polo Nix was ranked first in a long floating is a situation I pushed out of the top 14, while similar trading platform appeared, such as by Nance, a bit since last year, lex.

Founded in 2013 by Circle from large financial institutions, including Goldman Sachs attract investments totaling W150bn has emerged as "encryption pyegye Paypal. In order to expand the business into once commit financial services, "Bitcoin" and "block chain" of turning the existing entrance living deleted from the circle at the end of last year, its website has revealed the password to money markets will focus again.

Accordingly, it is also successively launch the existing P2P payment services, pay-circle (Circle Pay) by rebranding it to add a password to monetary payments Meanwhile, the coin-only OTC trading desk of 'Trade Circle (Circle Trade)'. According to Fortune Circle whether the trade is reaping such explosive growth in sales of 65 billion won ($ 60mln) to achieve the volume just launched two trillion won ($ 2bln) in one month and three months , we go out after a.

The acquisition Circle throws a full-fledged stock exchange business Chu Shi Biao. This year focusing on 'easy money invested app password, North Rhine-circle (Circle Invest)' to launch in the first half of the Knicks Polo combines Web-based transactions are expected to maximize the mutual scalability. In addition, the existing crypto - seems to be adding the court, including the crypto-based US dollar (USD), euro (EUR) currency pair to secure the liquidity and stability.

2) tax-exempt when used as Bitcoin Germany, payment method

Germany has stated that the government does not impose a tax to users with passwords currency as a payment method. According to the German Internal Revenue Service on Tuesday it announced a guideline "I said it would be considered as a case of Bitcoin uses a legitimate means of payment, that is equivalent to the legal form of currency.

The guidelines are to be based on a 'value added tax (VAT)' legal provisions enacted by the EU courts in 2015, is expected to provide a precedent for the future of Bitcoin taxation within the European Union member states. Germany's position is contrary to the position of the United States Internal Revenue Service (IRS) to treat Bitcoin subject to tax. If you pay for your coffee in the US Bitcoin, which is "regarded as a potential transfer target property sale income".

Whereas in Germany it is treated as if converted to Bitcoin for payment in legal tender "is equivalent to the legal form of payment does not arise because the immediate exchange gain occurred." In contrast, if the taxable transaction is subject, it should be proof of the profit generated by the difference between the seller when the transaction occurred at the time of the purchase price and Bitcoin prices as a "taxable japik".

The draft was also released guidelines for other industrial areas. If mine's not a taxable service is regarded as 'voluntary', as in the case of exchange operators buying and selling Bitcoin as a person who is a tax-exempt. However, the trading platform, ie exchange buying and selling services via the Web or app-based marketplace have said the tax exemption does not apply.

Ripple (XRP) Will Surpass Ethereum (ETH)

There is a growing sentiment among cryptocurrency traders that it’s a safer bet to buy Ripple (XRP) than Ethereum (ETH) or even Bitcoin (BTC). This is after some recent significant drops in value which hit the entire cryptocurrency market hard, as well as the rise of certain other cryptocurrencies which offer superior features than those of Bitcoin or Ethereum.

Recent struggles for those two has seen their market cap freeze, giving other coins the opportunity to catch or even overtake them. If Ripple could hit $3.89 in value, its market cap would place it on top of the pile. But how could it achieve this?

Cryptocurrency traders are slowly expanding their portfolios to move away from Bitcoin due to its volatility and its flaws as a long-term market prospect. Ripple is emerging as one of the leading alternatives, according to published market trends. What’s more, Ripple keeps grabbing the headlines for acquiring new partnership deals and adoption by companies, which furthers its credibility for the long term. It is showing signs of being a cheap, fast and secure blockchain money settlement system.

One of the big Ripple headlines recently has been its adoption by Chinese company AsiaATM Group. This has cemented the rise in demand for the cryptocurrency, and the price will continue rising alongside mainstream adoption. And this adoption is expected to happen quickly, as many international merchants move away from traditional financing solutions.

The bottom line

Ethereum is stagnating as a preferred coin for traders. An increasing number of people are diversifying their cryptocurrency portfolios, and Ripple is emerging as the go-to coin due to its impressive technology and potential markets. This potential is galvanised by almost daily announcements of new partnerships, and it is inevitable that we will see more surges in its value as this trend continues. If Ethereum continues to stagnate, and Ripple continues fulfilling its potential, then Ethereum is looking likely to be knocked off its pedestal.

Ripple (XRP) and Porsche: A Partnership Waiting to Happen?

Ripple (XRP)–In a recent interview with the Deutsche publication of CoinTelegraph, Porsche, the German-based sports car manufacturer, is looking to become one of the first car companies to implement blockchain and cryptocurrency into their vehicles. While the particular announcement contains details on a partnership with Berlin-based startup XAIN, the overall emphasis is on exploring the possibility of crypto/blockchain based applications and other novel-implementations.

XAIN could develop its own blockchain-based technology to integrate into the vehicles, but it’s likely the development team could look to an already established cryptocurrency and network to do the bulk of work.

Here are just a few reasons why a partnership between Ripple and Porsche could be destined to happen:

Top of the Market Utility for XRP

Of all the currencies currently on the market, Ripple has the best network features and usability for a transacting currency. For Porsche to integrate a cryptocurrency into its luxury, top of the line vehicles, it would require a stable currency with a network capable of handling instant, and essentially free transactions. Ripple is that currency.

1. Nonexistent fees. 0.00001 XRP is all that is consumed per transaction. While other currencies require paying miner fees to expedite or initiate an exchange, a minuscule amount of XRP is consumed as part of the process of ensuring security and consensus on the Ripple blockchain. At current price levels, one penny would net you 1000 XRP-related transactions. Put another way, by current Ripple guidelines, 1 XRP will always give you 100,000 transactions. Even at a bullish 10 USD per coin, you could have a lifetime worth of Ripple transactions for about the cost of coffee at Starbucks.
2. Scalability. In 2018 and beyond, currencies that can scale will survive. The rest are going to be forced into a steady decline or outright collapse. It does Porsche no good to implement cryptocurrency–even as an alluring, high priced side project–if their customers are unable to use the feature due to network congestion. Imagine Bitcoin implementation, with 7 transactions per second, and you start to see the limitations for usability. Ripple can process 1500 tx/s, with the possibility of even greater scale by the development team.
3. Speed. The person buying a 100,000 USD, 370 horsepower, legal race car is going to prioritize speed in every facet of their life. Cryptocurrencies with average confirmation times in the minutes and hours are simply not going to make the cut. Ripple has under-five second confirmations. The reality of clicking a button on your phone and having near-instant access to a crypto-related feature on your car is only possible through a handful of currencies, with XRP being the front runner.

Novel Car Uses for Ripple

We have written before about XRP distancing itself from the rest of the market in terms of usability. The intrinsic utility of XRP, backed by the development team at Ripple the company, creates an infinite amount of use for the cryptocurrency–the current limitation being imposed by imagination and a lack of entrepreneurial interest. That cold change with growing adoption of Ripple and integration of cryptocurrencies into mainstream technology, thereby filtering through mainstream lifestyles. A luxury brand like Porsche could help bridge the gap between cryptocurrency, and Ripple, being removed from general use due to complexity, and the lifestyle integration of something as ubiquitous as cell phones. The complexity of a smart phone was both cost and technologically-prohibitive to the average person fifteen years ago. That all changed in the span of five years, with the introduction of iPhones becoming the industry standard. Ripple could follow along a similar trajectory if companies are willing to find ways to assimilate cryptocurrency into every day use.

Let’s consider Porsche for a moment. We are all experienced with using a key to open a car door and start the ignition. Cryptocurrency could function as a new form of key. The private key to a wallet address, like the physical apparatus, could function in the same way. Given the below-five second speed of transaction and negligible fee, a person could use XRP for both unlocking a car and starting the ignition. Imagine sending an XRP coin, from a designated private key address that only you hold, which is then recognized by a similar wallet inside the car to green-light the unlock and ignition. The 0.00001 XRP consumed in the transaction would serve as an added step in security, while the Ripple blockchain would keep a ledger for the transaction. It seems like a lot of steps to avoid using a physical key or key fob, but it also eliminates the need for keys all together. The car could function entirely through a wallet held on a phone or watch (or other wearable/implantable device), thereby making one more physical “product” obsolete. It also opens the door for interesting uses for XRP integrated with the vehicle. Paying tolls, fees and taxes automatically through a wallet held in the car, or integration with apps that consume minuscule amounts of XRP through instant, free transactions. Would you pay 0.001 XRP per minute for the world’s best GPS or satellite radio app? What about cheap data streaming on the go?

Again, we reiterate the point: the novel uses for Ripple (and all cryptocurrency) is boundless. The myopic focus and expectation placed upon price valuation is severely hampering an industry that could be doing much more to change the world. It would be as if a person from the 1990’s thought Candy Crush was the only use for cellphone apps. Sure, it’s popular. And yes, it’s fun to trade coins on exchanges and make profit through speculation. But the stranglehold on cryptocurrency by speculative investors is sending the industry in the wrong direction.

A move like Porsche adopting Ripple for car integration could be just the novelty we need to get cryptocurrency ingenuity going again.

Ripple XRP & Google Pay Partnership Could Sky Rocket The Price!

One of the more noticeable and predictable Ripple trends recently has been a reasonable increase in the value of XRP every time a new partnership is announced. After news of collaborations with three of the five largest remittance providers in the world, analysts were tentatively predicting an end of year target of $10 for the currency – but some very recent speculation could help XRP to easily surpass this. Just what’s in store for Ripple, and how much could the cryptocurrency be worth in the future?

Google Pay implementation

Ripple already has a history of partnering with companies in emerging markets such as Brazil, India and China. By partnering with one of the world’s largest technology firms, Ripple continues to stake a claim in these areas – where Google’s Android technology is more likely to be adopted by smartphone and tablet users on account of its greater affordability in comparison to its biggest rival, Apple.

Efficient global payment systems

Ripple’s technology is currently being implemented by many of the world’s largest financial institutions. Its creators appear to have played the long game in cornering the market, with Google likely to be targeted next. By becoming an integral part of Google Pay in addition to its partnerships with MoneyGram, Western Union and large banks, the Ripple system could essentially be considered the chassis powering the four wheels of global finance – and the end result? A huge leap in the value of XRP.

Experts predict that the cryptocurrency could reach highs of at least $600 if the speculation regarding Google implementation appears to be true. Google has spent much of the past decade also targeting emerging markets in the same areas Ripple is concentrating, and the amalgamation of RippleNet’s fast, affordable global transactions is a very worthy opportunity for the tech giant streamline to its services.

Mutual goals

Both companies offer technologies which complement each other, making the possibility of a partnership increasingly likely. Ultimately, this makes here and now the best opportunity to invest in XRP – even if it doesn’t hit the dizzy heights on $600, it’s still likely to help investors turn a healthy profit by the end of the year.

Amid Bitcoin Frenzy, SEC Warns Against Risky Cryptocurrency Products

If you're tempted to join the cryptocurrency bandwagon, regulators say you should take a pause before you click "buy."

Following bitcoin's meteoric price rise in 2017 — from just under $1,000 in January to nearly $20,000 in December — there's been a rush to cash in on cryptocurrencies and the blockchain technology that makes them possible.

Numerous investment vehicles have been created to meet this surge in consumer demand.

In December, bitcoin futures began trading on two exchanges, the Chicago Board Options Exchange and the CME Group. In January, Kodak saw its shares rise on the announcement of its "KodakCoin" digital currency. Even Venezuela is making moves into digital money, with President Nicolas Maduro announcing the development of a "petro cryptocurrency" backed by the country's oil and gas reserves.

But where some see opportunity, regulators are preaching caution. Last week, the Securities and Exchange Commission shot down proposals from two exchange-traded funds seeking to offer investors a way to trade in cryptocurrencies on more traditional exchanges.

ETFs have exploded in popularity in recent years and offer a simple way for individuals to diversify their investments. The funds hold a basket of investments, and investors can then buy and sell the ETFs like normal stocks.

In this case, the two funds proposed investing in cryptocurrencies. They would allow investors to trade shares of the funds, with fund managers handling the selection and purchase of the underlying crypto assets in their portfolios.

Cryptocurrency markets "feature substantially less investor protection than traditional securities markets, with correspondingly greater opportunities for fraud and manipulation," SEC Chairman Jay Clayton said in December.

For the SEC, cryptocurrencies are still too new and poorly understood to allow them onto more conventional exchanges.

But the agency's reluctance to allow crypto trading on stock exchanges has done little to curb investor enthusiasm. Aspiring investors can still trade bitcoin and other currencies on a host of online exchanges. (Earlier this month, bitcoin prices plummeted and it was trading at around $11,000 on Thursday.)

Investors can also participate in "initial coin offerings," where new coin developers sell their digital coins in exchange for startup capital. Unlike traditional IPOs, most ICOs do not give investors a stake in the company. As a result, ICO curators claim that their activities fall outside of the SEC's regulatory authority.

The SEC is not so sure. "Fraudsters may entice investors by touting an ICO investment 'opportunity' as a way to get into this cutting-edge space, promising or guaranteeing high investment returns," the agency said in an investor bulletin.

On Monday, SEC Chairman Clayton called out the financial advisers and lawyers behind many ICOs, saying "they can do better."

Crypto investors do not need to look far to see what the SEC is warning about. Last week, BitConnect, an online platform that guaranteed returns of up to 40 percent per month, collapsed.

BitConnect failed shortly after receiving cease-and-desist orders from authorities in North Carolina and Texas.

Some prominent figures in cryptocurrency, including Ethereum co-founder Vitalik Buterin and hedge fund manager-turned-crypto-investor Michael Novogratz, called this "too-good-to-be-true" venture a Ponzi scheme. Over the course of a few days, BitConnect's coin lost more than 90 percent of its value. Investors were left with no way to withdraw their funds as the platform announced that it was shutting down. Those who could found that their investments had shriveled to a fraction of their initial value.

The problem isn't limited to BitConnect. New research from Ernst & Young reveals that over 10 percent of the funds generated by ICOs are either misplaced or seized by hackers. These attacks exploit flaws in the code of new cryptocurrencies, many of which are rushed to market without meaningful review. It's often impossible to recover stolen funds because blockchain transactions are irreversible. According to Ernst & Young, this 10 percent represents a loss of about $400 million in investor money.

Despite the risks, investors continue to flock to ICOs and projects that utilize blockchain technology. Even famously contrarian billionaire Mark Cuban is getting on board, with his announcement last fall of a $25 million investment in the esports-betting cryptocurrency Unikrn. Speaking to crypto newsletter CoinDesk, Cuban called the ICO opportunity "a perfect fit."

As for BitConnect, representatives of the company have not responded to multiple NPR requests for comment. But they have announced that they are still going forward with an ICO for a new project, BitconnectX. Whether any investor will still trust them remains to be seen.

What Is A Cryptocurrency?

It wasn't long ago that very few people had heard the word “cryptocurrency,” and even less knew what it meant. These days, the word is ubiquitous; the dramatic rise of bitcoin’s price raised the level of interest in that and other cryptocurrencies to amazing heights.

Now seemingly everyone wants to know more about cryptocurrencies, or just "cryptos" for short.

What Currency And Cryptocurrency Is

First, let’s look at the word itself. Digital currencies are secured using cryptography and combining that with their role as a currency gives us the compound word cryptocurrency.

To understand what a cryptocurrency is, rather than just the what the word means, you first must think a bit about the nature of a currency itself. Money, like cash money, is simply a token we use to exchange for goods and services. There is no inherent value in the pieces of paper we carry in our wallets, purses or pockets. It only has value because we believe it does.

In the modern age, however, there is no need for that token to be a physical one. For a long time now, many transactions have not involved the transfer of actual cash. Even before computers, writing a check meant allowing a bank to reduce your balance and increase somebody else’s by updating a ledger, and debit cards are a more modern version of that. No cash changes hands in these transactions.

Cryptocurrencies are in many ways just a version of that, updated to allow for the widespread use of the internet, but with a couple of crucial differences.

cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange that uses cryptography to secure its transactions, to control the creation of additional units, and to verify the transfer of assets. Cryptocurrencies are classified as a subset of digital currencies and are also classified as a subset of alternative currencies and virtual currencies. Cryptocurrencies use decentralized control as opposed to centralized electronic money and central banking systems. The decentralized control of each cryptocurrency works through a blockchain, which is a public transaction database, functioning as a distributed ledger.

Bitcoin, created in 2009, was the first decentralized cryptocurrency. Since then, numerous other cryptocurrencies have been created. These are frequently called altcoins, as a blend of alternative coin.

How Are Cryptocurrencies Different?

First, they are not issued by the government. They are created and controlled by computer programs, or algorithms. Those algorithms lay out how transactions are made and recorded, and how new coins or tokens are found and released. People and organizations known as miners keep records of every transaction and attempt to solve complex computer problems that, when solved, reward them with new coins as payment.

In effect, it is the users themselves and their vast combined computing power that record transactions directly between peers, rather than through banks or other intermediaries. That system is known as a blockchain and the transactions, and even the currencies, are sometimes referred to as “peer-to-peer.”

The second major difference, and one that must be understood to appreciate the value of cryptos is that, unlike conventional currencies, the total amount that can ever be in circulation is limited. Government-issued currencies such as the U.S. dollar are created at the whim of those who are in power. As the economy grows, more dollars are created to allow for that growth. Simple economics tells us that as the supply of something is increased, the value of each unit falls.

That explains why, for example, a house that cost a few thousand dollars a few decades ago will now cost hundreds of thousands of dollars. It is what is known as inflation, and conventional currencies work on an inflationary model.

Cryptocurrency, in contrast, works on a deflationary model. Because the total supply of the currency is restricted, you do not use more coins to pay for goods and services, but less. Something that costs one coin now will cost only a fraction of a coin in the future as the economy (the supply of goods and services) grows, but the number of coins in circulation remains essentially static.

Common Cryptocurrencies

The above concepts are hard for many people to grasp but the other bewildering fact is that there are over 1,300 cryptocurrencies in existence. Each has subtle differences, but the largest by market cap and therefore the most commonly used are Bitcoin, Ethereum, Ripple and Litecoin. Let's take a very quick look at each:

Bitcoin is the big daddy of cryptos and the one that most people are aware of. It was created in 2009 by the still mysterious and pseudonymous Satoshi Nakamoto. There are actually now two types of Bitcoin, the original and Bitcoin Cash which came about as a way of solving the high transaction times on the Bitcoin network.

Ethereum also known by the name of its token, Ether, is similar in that it uses a blockchain, but was created more with an eye to what are known as “smart contracts,” rather than use by everyday consumers. Smart contracts replace the need for paper contracts between parties to an agreement and remove the need for signing and amending contracts written on paper.

Ripple is aimed at payments made between financial institutions. These payments have until now typically taken days to process and have been expensive, particularly when they involve low-value, high volume payments. The blockchain makes those transactions faster and cheaper.

Litecoin is probably the closest to Bitcoin in that it is designed as a general use currency. Adherents will tell you that it is an improved version, as it allows for a greater volume of transactions and performs them faster.

As we've seen, the price of all cryptocurrencies will fluctuate, often violently. Some, no doubt, will not survive, but with big companies and Wall Street institutions getting involved, it is clear that cryptos are here to stay.