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A South Korean broadcast television channel has produced and broadcasted a reality TV show where two movie stars competed to live on bitcoin for a week. Set in South Korea and San Francisco, the actors were challenged to find merchants who accept bitcoin directly.

The South Korean mainstream broadcast TV station, Asia Economic TV, has produced and broadcasted a reality show that challenged two movie actors to live solely on bitcoin for a week each. The name of this survival challenge show is loosely translated as “Stay alive for a week with bitcoin.” It took place in two countries with very different levels of bitcoin adoption.

Actor Kim Bo-sung spent a week living on bitcoin in South Korea, while painter and actress Yun Song-ah did the same in San Francisco, United States. Their Wikipedia pages show that Kim has been in 34 movies and 13 TV series, while Yun has been in 8 movies and 10 TV dramas. They have also both won numerous awards.

The show contrasts how the two stars survived on bitcoin in the two locations. The rules stated that they must find merchants that accept bitcoin directly and only use bitcoin for the week. The show followed them as they spent it on food, shelter, travel and all other activities during that time.

Kim Bo-sung described himself as a “Bitcoin outlaw,” BNT News reported, adding that the program showed him using bitcoin such as at an optician’s office, a florist, a campground, and a chiropractor. It often took him a while to find a vendor that accepts bitcoin in South Korea.

Yun Song-ah, on the other hand, enjoyed the high adoption rate of merchants in San Francisco. She was able to find many stores that accept bitcoin as well as bitcoin ATMs to get dollars out to spend. She “sketched the Golden Gate Bridge, took-in sightseeing at Fisherman’s Wharf, felt the hippie culture in the streets of Mission Street and Hate & Ashbury Street, and visited the Coppola Winery, run by Francis Coppola,” the news outlet described.

The producer explained that the show demonstrates completely different survival styles since San Francisco is among the places where bitcoin is widely used, whereas it is the opposite in South Korea. The last episode of this series was aired last week.

Source:news.bitcoin.com

As hedge funds rush to enter the cryptocurrency space, the landscape for retail cryptocurrency investors is fundamentally changing before our very eyes. Marcel Chuo from news.Bitcoin.com sits down with Guy Zyskind, CEO of Enigma to discuss how his team is helping hedge funds that utilize artificial intelligence and automated bot trading enter the crypto space. Guy breaks down the implications of this fundamental shift and we discuss how the community can prepare for the rise of AI in crypto trading.

To understand the extent in which AI is taking over hedge funds, we need only to look at the statistics. AI is set to replace 90,000 asset management jobs and 45 thousand sales and trading jobs by 2025. Famous hedge funds that are already employing AI in their trading are Renaissance Technologies, Two Sigma, and Bridgewater Associates.

Hedge funds that replace their human workers with AI ones are greatly outperforming their traditional counterparts. In fact, Renaissance Technologies, the hedge fund that is one of the most reliant on AI, has a Medallion Fund that has been giving positive returns of between 20% – 98% from 2002 to 2016. During the 2007-2008 financial crisis, Medallion Fund gave annual returns of 85.8% and 98.2% respectively. These are very impressive returns for the legacy financial markets.

Since AI is taking over the hedge fund industry in the legacy financial system, the rush of hedge funds into the cryptocurrency space will inevitably bring AI trading technology into the crypto markets as well. To understand more on the AI phenomena, I interviewed Guy Zyskind below.

Marcel: News.Bitcoin.com posted an article recently detailing the now 124 new hedge funds dedicated purely to cryptocurrency investing. Just a couple of months ago, Business Insider posted an article looking at 50 hedge funds in crypto. So hedge funds are rushing into the crypto market, but the development of Catalyst suggests that hedge funds can’t just jump into trading, they must back test and simulate trading strategies before entering the markets. Can you shed some light on this issue?

Guy: It is important to understand the history of equity markets to understand how the crypto markets will evolve. Fifteen years ago, financial markets were less sophisticated, and you had traders on every floor. Traders bought stocks and they did some re-balancing from time to time. That was pretty much it. Now, computers and machine learning process the data and execute trades, not traders. Hedge funds in the financial markets today predominantly use algorithms and quantitative trading. We are going to see the crypto markets evolve in that same direction, but crypto will evolve 10 times faster than the way it did in the traditional equity markets.

Marcel: What does the time frame look for a hedge fund that tries to get into crypto trading using AI and bot trading?

Guy: That depends. So if hedge funds want to build their own platform so that they can back test trading strategies and all that, it takes 3 months to get something basic off the ground. If hedge funds traded crypto like how they traded traditional financial markets 15 years ago, it would be instantaneous. But old school is not the way most hedge funds work today. Our platform, Catalyst is meant to help hedge funds save all that time of aggregating data. So hedge funds download Catalyst, install it, simulate trading, get results within minutes and can immediately run live trading. The most time consuming part of the process would be for the hedge fund to develop trading strategies, but that is what the hedge funds are for, figuring out effective trading strategies.

Marcel: Back in the day you used to be able to manually arbitrage coins across different exchanges. When automated bot trading came, it made it almost impossible for retail investors to do this. How do you think AI and automated bot trading will change the crypto markets for retail investors?

Guy: It’s good and bad. Quantitative and high frequency trading has done wonders in providing liquidity for the equity markets. One of the biggest problems with the crypto markets today is that it is illiquid, especially for the small cap coins. Introducing bots increases liquidity. Retail investors can trade more easily, and the market will not be moved by small trades (relative to equity markets). That’s the good thing.

The bad thing is that retail investors will have to be more sophisticated to stay in the game, especially when competing with an AI that trades. Retail investors have to adapt, or they will lag behind and disappear. They need to get into the game of more quantitative trading, more data driven decisions.

Marcel: It sounds like AI and automated bot trading will also decrease the intra-day volatility for the coins.

Guy: A lot of the intra-day volatility comes from speculation and that decreasing is a good thing.

Marcel: Makoto, one of the earlier core developers for NEM, told me that, “People always think that when AI beats a human at like GO or in trading crypto markets, that it is a machine beating a human. It’s not, it’s about the entire software development team beating one human person.” As a company developing your own AI, where do you stand on this issue?

Guy: I like it, very interesting thought and I would add to that. When you compare an AI to a human, the AI is the sum of all the experience of many other humans combined, not just the development team. The data, the experience, the wisdom of the crowd is very easily learnt by the machine and is then pitted against a human expert. So Makoto is half right, it is a machine that beats a human, but a machine that learns from the collective wisdom of the crowd.

Do you think that hedge funds will bring artificial intelligence into cryptocurrency trading too? Will you change your trading strategies as an investor? Tell us in comments below! 

Photos courtesy of: Shutterstock, Bloomberg and LinkedIn.

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Tulips are a reference to the mania that swept Holland in the 17th century, with speculators driving up prices of virtually worthless tulip bulbs to exorbitant levels. That didn’t end well.

In bitcoin’s case, Dimon said he’s skeptical authorities will allow a currency to exist without state oversight, especially if something goes wrong. “Someone’s going to get killed and then the government’s going to come down,” he said. “You just saw in China, governments like to control their money supply.”

Dimon differentiated between the bitcoin currency and the underlying blockchain technology, which he said can be useful. Still, he said banks’ application of blockchain “won’t be overnight.”

The bank chief said he wouldn’t short bitcoin because there’s no telling how high it will go before it collapses. The best argument he’s heard, he said, is that it can be useful to people in places with no other options -- so long as the supply of coins doesn’t surge.

“If you were in Venezuela or Ecuador or North Korea or a bunch of parts like that, or if you were a drug dealer, a murderer, stuff like that, you are better off doing it in bitcoin than U.S. dollars,” he said. “So there may be a market for that, but it’d be a limited market.”

To be sure, Dimon later noted that his daughter purchased some bitcoin.

“It’s interesting that somebody with that high profile of the establishment is out there with that bold statement,” Jeffrey Gundlach, chief investment officer of DoubleLine Capital, said on a webcast Tuesday after Dimon’s remarks. 

Gundlach said he doesn’t have a view on bitcoin but that he’s concerned it may be more vulnerable to manipulation than enthusiasts admit. “Maybe I’m just too old, but I’m going to let this mania go on without me.”

One place where cryptocurrencies and traditional finance are coming together is at CBOE Holdings Inc., the owner of the Chicago Board Options Exchange. Last month, the firm teamed up with Gemini Trust Co. -- the startup created by the Winklevoss twins made famous by the 2010 Facebook film “The Social Network” -- with a plan to offer bitcoin futures.

CBOE’s chairman and CEO, Ed Tilly, defended such efforts after Dimon’s remarks.

“Like it or not, people want exposure to bitcoin,” Tilly said. Believers can bet on its rise, and Dimon is welcome to take the other side, he said. “We’re happy to be the ones in the middle.”

Chinese media has reported that the Beijing Operation Management Department of the People’s Bank of China has issued a notice to financial institutions prohibiting the provision of financial services to ICOs. The notices states that “financial institutions and non-bank payment agencies shall not provide service or product like account opening, registration, trading, clearing and settlement for token financing and virtual currency”.

This week, China began to carry out a sweeping crackdown on ICOs. China’s central bank described ICOs as “an unapproved illegal public financing behavior,” and has suspended all ICOs operating within China, and banned the practice of fundraising through token sales. Chinese authorities have also mandated that initial coin offerings operating in China provide full refunds to Chinese investors.

Additionally, the notice requires that banks and financial institutions carry out daily monitoring of accounts associated with initial coin offerings. “Individual accounts related to… ICO platforms must be identified. Large amount or frequent deposit and withdrawal will be restricted. Immediate restrictive measure should be taken on accounts that are in line with suspicious [anti-money laundering] reporting standards and report to authority timely.” The reporting requirements are expected to remain in place for the foreseeable future, with an anonymous source telling Chinese media that “requiring banks and payment agencies to report… will continue for a long time”.

China’s ICO crackdown comprises the most aggressive governmental response to initial coin offerings thus far. By contrast, the United States, Canada, Singapore, andHong Kong have issued statements articulating a desire to regulate the issuance of unlicensed securities through ICOs through existing financial authorities, implying that the distribution of utility tokens through initial coin offerings will not run afoul of current financial regulations.