Bitcoin Is Here to Stay

By Andy Waldock

The next phase in the Bitcoin revolution will be the standardization of the exchanges where the coins are traded. Bitcoin is currently in the Wild West prospector days of its evolution. The world has agreed that a Bitcoin provides a stored measure of value in the same way that gold and silver have throughout the ages. Like gold and silver, Bitcoin is only worth what the other person is willing to pay you for it. This has led to cheating since trading began. Crooked scales and filled ore all became part of the norm as both the miners and the assayers sought to pad their bottom lines. This led to governmental oversight and the creation of centralized exchanges.

The Bitcoin dream has been to police its own community and remain beyond the physical scrutiny of any global government. The Utopian dream was shattered a month ago when Mt. Gox, by far the largest Bitcoin exchange, shut down due to a security breach and theft of approximately $300 million worth of Bitcoin. Customers who had Bitcoin on deposit with Mt. Gox still do not know how much they'll get back. The issues at Mt. Gox lay bare the cyber security argument. Surprisingly, Bitcoin as a currency has shown remarkable resilience. This resilience could very well be just the boost needed to legitimize the currency and the lean towards governmental involvement that may actually help this fledgling store of value soar to its mainstream potential.

The timing of the Mt. Gox incident may prove to be a boon for the currency. Tera Group, out of Summit New Jersey, already had proposed a bilateral agreement to the Commodity Trading Futures Commission (CFTC) to begin trading Bitcoins through a swap-execution facility or, centralized exchange. The vast majority of commercial currency trading is done through swaps agreements, which is why we follow the commercial traders in our own trading. A swap agreement is basically an insurance policy that provides a guaranteed value at a specific point in time to protect against currency fluctuations. It's what the commodity exchanges are founded on. The swap markets are the superhighways of the financial industry. They process massive volumes while collecting a small toll on each transaction. Therefore, the cost on the individual swap is small but the sheer volume of swaps processed makes it a huge revenue source for all of the major banks.

The CFTC has yet to comment on Tera Group's proposal. We commented in November that Bitcoin had transcended novelty status and that the revenue pool was becoming too big for global banks to ignore. Bitcoin's resilience in the face of the Mt. Gox debacle is a testament to the power of a global grassroots movement. Bitcoin should have plunged across the globe as owners of Bitcoins tried to exchange them for hard currency. The market's response turned out to be very orderly. While prices did fall across the board, the market seemed to understand that it was an individual company's problem and was therefore confined to Mt. Gox customers' ability to get their money out. As a result, Bitcoin prices have stabilized around $585.

Read more

Forex Brokers Should Have These 5 Things

By Ferry Herlyantoro

Daily Forex market capitalization is up to $4 trillion, makes it the world's biggest financial market. Daily price fluctuation is up to 100 to 200 pips in normal market condition, which equals to about $1,000 to $2,000. If you entered the market in the right side, you could gain a lot of money.

That is one of the reasons why Forex trading has become very popular. In line with the popularity, hundreds of Forex brokers are appearing from all over the world, you just have to choose one. Unfortunately, there are so many Forex scam cases. By reading this article, I hope you will get more information about how to choose the right broker.

1. Check the legality
In Indonesia, the government regulates Forex trading in Act Number 10 Year 2011 about Amendment to Act Number 32 Year 1997 about the Commodity Futures Trading. I believe that all countries have their own law that regulates Forex trading activity.

Every brokerage company operating in Indonesia must have permission from an agency called the Commodity Futures Trading Regulatory Agency. It is illegal to operate a Forex broker company in Indonesia without permission from this agency. United States of America has Commodity Futures Trading Commission (CFTC). United Kingdom and Australia also have their own agencies that regulate Forex trading activity in their country, called the Financial Services Authority (FSA) and Investments Commission (ASIC) respectively.

2. Check the account details
Usually, each broker sets different terms and conditions on trading accounts. Among those are:

Commission and spread - Brokers get profits from commission and spread. You should calculate commission and spread as "trading cost". Smaller is better. Here is some illustration: Broker X takes $50/lot as commission, with 1 pip spread. Assume that 1 pip equals to $10. It means total "trading cost" at Broker X is $60/lot. On the other hand, Broker Y only takes $5/lot as commission, with 2 pips spread. It means that "trading cost" in Broker Y is only $25/lot, cheaper than Broker X. Read more