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SA leading the way as cloud computing uplifts Africa – IOL

By Dineo Faku Sep 3, 2020

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JOHANNESBURG - Cloud computing played a significant role in helping the government cope with the Covid-19 pandemic, according to the new Cloud in Africa 2020 report.

The study conducted by market research leaders World Wide Worx in partnership with F5, Dell Technologies, Digicloud Africa and Intel, found that 80percent or eight out of ten respondents believed that cloud computing had made a significant contribution to the government's efforts in dealing with the Covid-19 pandemic.

Presenting the findings, Arthur Goldstuck, the managing director of World Wide Worx and lead analyst on the project, said the single biggest benefit from cloud computing for the government had been remote working.

The second benefit was communicating with the public followed by crisis co-ordination.

A key element was whether the government embraced the cloud. Without the cloud, governments could not have carried on their duties as they did, but not having their systems cloud-ready before the crisis meant that the government systems were not agile enough to cope with the demand, said Goldstuck.

Findings in the cloud report come as auditor-general Kimi Makwetu yesterday released his report on the multibillion-rand Covid-19 relief funds.

Makwetus report found that IT systems used in the government were not agile enough to respond to the changes required to deal with the pandemic.

As part of the research, World Wide Worx interviewed technology decision-makers at more than 400 medium and large businesses across South Africa, Kenya, Zambia, Nigeria, Zimbabwe, Namibia, Botswana, and Malawi, to ascertain current and intended use of cloud technologies in the continent's major markets.

The report said cloud computing had become the front and centre of operating businesses due to Covid-19 pandemic lockdowns.

Goldstuck said during this time, historic perceptions of cloud being costly and risky had also largely dissipated.

As many as 84 percent of respondents now believed cloud computing was cost-effective and only 12 percent regarded it as inherently risky.

In terms of investing in the future, the report showed that 38percent of decision-makers increased their cloud services spend last year.

South Africa led the way, with 82percent stating that they had increased cloud spend, followed by 59percent in Zimbabwe, and 50percent in both Nigeria and Botswana.

According to World Wide Worx, cloud investment was also growing as a percentage of overall IT budgets, particularly in less mature IT markets.

For Zambian respondents, 71percent said between a quarter and half of their IT budgets were allocated to the cloud. The same is true for 59percent in Zimbabwe, and 56percent in Malawi. In Namibia, 65percent said more than half of IT budgets were focused on the cloud. In Botswana, 14percent reported that 100percent of budgets went to cloud-related IT.

BUSINESS REPORT

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Study Expands Types of Physics, Engineering Problems That Can Be Solved by Quantum Computers – HPCwire

Sept. 1, 2020 A well-known quantum algorithm that is useful in studying and solving problems in quantum physics can be applied to problems in classical physics, according to a new study in the journal Physical Review Afrom University of WisconsinMadison assistant professor of physicsJeff Parker.

Quantum algorithms a set of calculations that are run on a quantum computer as opposed to a classical computer used for solving problems in physics have mainly focused on questions in quantum physics. The new applications include a range of problems common to physics and engineering, and expands on the types of questions that can be asked in those fields.

The reason we like quantum computers is that we think there are quantum algorithms that can solve certain kinds of problems very efficiently in ways that classical computers cannot, Parker says. This paper presents a new idea for a type of problem that has not been addressed directly in the literature before, but it can be solved efficiently using these same quantum computer types of algorithms.

The type of problem Parker was investigating is known as generalized eigenvalue problems, which broadly describe trying to find the fundamental frequencies or modes of a system. Solving them is crucial to understanding common physics and engineering questions, such as the stability of a bridges design or, more in line with Parkers research interests, the stability and efficiency of nuclear fusion reactors.

As the system being studied becomes more and more complex more components moving throughout three-dimensional space so does the numerical matrix that describes the problem. A simple eigenvalue problem can be solved with a pencil and paper, but researchers have developed computer algorithms to tackle increasingly complex ones. With the supercomputers available today, more and more difficult physics problems are finding solutions.

If you want to solve a three-dimensional problem, it can be very complex, with a very complicated geometry, Parker says. You can do a lot on todays supercomputers, but there tends to be a limit. Quantum algorithms may be able to break that limit.

The specific quantum algorithm that Parker studied in this paper, known as quantum phase estimation, had been previously applied to so-called standard eigenvalue problems. However, no one had shown that they could be applied to the generalized eigenvalue problems that are also common in physics. Generalized eigenvalue problems introduce a second matrix that ups the mathematical complexity.

Parker took the quantum algorithm and extended it to generalized eigenvalue problems. He then looked to see what types of matrices could be used in this problem. If the matrix is sparse meaning, if most of the numerical components that make it up are zero it means this problem could be solved efficiently on a quantum computer.

What I showed is that there are certain types of generalized eigenvalue problems that do lead to a sparse matrix and therefore could be efficiently solved on a quantum computer, Parker says. This type includes the very natural problems that often occur in physics and engineering, so this study provides motivation for applying these quantum algorithms more to generalized eigenvalue problems, because it hasnt been a big focus so far.

Parker emphasizes that quantum computers are in their infancy, and these classical physics problems are still best approached through classical computer algorithms.

This study provides a step in showing that the application of a quantum algorithm to classical physics problems can be useful in the future, and the main advance here is it shows very clearly another type of problem to which quantum algorithms can be applied, Parker says.

The study was completed in collaboration with Ilon Joseph at Lawrence Livermore National Laboratory. Funding support was provided by the U.S. Department of Energy to Lawrence Livermore National Laboratory under Contract No. DE-AC52-07NA27344 and U.S. DOE Office of Fusion Energy Sciences Quantum Leap for Fusion Energy Sciences (FWP SCW1680).

For additional images, visit https://www.physics.wisc.edu/2020/08/25/new-study-expands-types-of-physics-engineering-problems-that-can-be-solved-by-quantum-computers/

Source: University of WisconsinMadison

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New evidence that the quantum world is even stranger than we thought – Purdue News Service

WEST LAFAYETTE, Ind. New experimental evidence of a collective behavior of electrons to form "quasiparticles" called "anyons" has been reported by a team of scientists at Purdue University.

Anyons have characteristics not seen in other subatomic particles, including exhibiting fractional charge and fractional statistics that maintain a "memory" of their interactions with other quasiparticles by inducing quantum mechanical phase changes.

Postdoctoral research associate James Nakamura, with assistance from research group members Shuang Liang and Geoffrey Gardner, made the discovery while working in the laboratory of professor Michael Manfra. Manfra is a Distinguished Professor of Physics and Astronomy, Purdue's Bill and Dee O'Brien Chair Professor of Physics and Astronomy, professor of electrical and computer engineering, and professor of materials engineering. Although this work might eventually turn out to be relevant to the development of a quantum computer, for now, Manfra said, it is to be considered an important step in understanding the physics of quasiparticles.

A research paper on the discovery was published in this week's Nature Physics.

Nobel Prize-winning theoretical physicist Frank Wilczek, professor of physics at MIT, gave these quasiparticles the tongue-in-cheek name "anyon" due to their strange behavior because unlike other types of particles, they can adopt any quantum phase when their positions are exchanged.

Before the growing evidence of anyons in 2020, physicists had categorized particles in the known world into two groups: fermions and bosons. Electrons are an example of fermions, and photons, which make up light and radio waves, are bosons. One characteristic difference between fermions and bosons is how the particles act when they are looped, or braided, around each other. Fermions respond in one straightforward way, and bosons in another expected and straightforward way.

Anyons respond as if they have a fractional charge, and even more interestingly, create a nontrivial phase change as they braid around one another. This can give the anyons a type of "memory" of their interaction.

"Anyons only exist as collective excitations of electrons under special circumstances," Manfra said. But they do have these demonstrably cool properties including fractional charge and fractional statistics. It is funny, because you think, 'How can they have less charge than the elementary charge of an electron?' But they do."

Manfra said that when bosons or fermions are exchanged, they generate a phase factor of either plus one or minus one, respectively.

"In the case of our anyons the phase generated by braiding was 2/3," he said. That's different than what's been seen in nature before."

Anyons display this behavior only as collective crowds of electrons, where many electrons behave as one under very extreme and specific conditions, so they are not thought to be found isolated in nature, Nakamura said.

"Normally in the world of physics, we think about fundamental particles, such as protons and electrons, and all of the things that make up the periodic table," he said. "But we study the existence of quasiparticles, which emerge from a sea of electrons that are placed in certain extreme conditions."

Because this behavior depends on the number of times the particles are braided, or looped, around each other, they are more robust in their properties than other quantum particles. This characteristic is said to be topologicalbecause it depends on the geometry of the system and may eventually lead to much more sophisticated anyon structures that could be used to build stable, topological quantum computers.

The team was able to demonstrate this behavior by routing the electrons through a specific maze-like etched nanostructure made of gallium arsenide and aluminum gallium arsenide. This device, called an interferometer, confined the electrons to move in a two-dimensional path. The device was cooled to within one-hundredth of a degree from absolute zero (10 millikelvin), and subjected to a powerful 9-Tesla magnetic field. The electrical resistance of the interferometer generated an interference pattern which the researchers called a pyjama plot. Jumps in the interference pattern were the signature of the presence of anyons.

"It is definitely one of the more complex and complicated things to be done in experimental physics," Chetan Nayak, theoretical physicist at the University of California, Santa Barbara told Science News.

Nakamura said the facilities at Purdue created the environment for this discovery to happen.

"We have the technology to grow the gallium arsenide semiconductor that's needed to realize our electron system. We have the nanofabrication facilities in the Birck Nanotechnology Center to make the interferometer, the device we used in our experiments. In the physics department, we have the ability to measure ultra-low temperatures and to create strong magnetic fields." he said. "So, we have all of the necessary components that allowed us to make this discovery all here at Purdue. That's a great thing about doing research here and why we've been able to make this progress."

Manfra said the next step in the quasiparticle frontier will involve building more complicated interferometers.

"In the new interferometers we will have the ability to control the location and number of quasiparticles in the chamber," he said. "Then we will be able to change the number of quasiparticles inside the interferometer on demand and change the interference pattern as we choose.

This research was supported by the U.S. Department of Energy, Office of Science, Office of Basic Energy Sciences, under award number DE-SC0020138.

About Purdue University

Purdue University is a top public research institution developing practical solutions to todays toughest challenges. Ranked the No. 6 Most Innovative University in the United States by U.S. News & World Report, Purdue delivers world-changing research and out-of-this-world discovery. Committed to hands-on and online, real-world learning, Purdue offers a transformative education to all. Committed to affordability and accessibility, Purdue has frozen tuition and most fees at 2012-13 levels, enabling more students than ever to graduate debt-free. See how Purdue never stops in the persistent pursuit of the next giant leap athttps://purdue.edu/.

Writer, Media contact: Steve Tally, steve@purdue.edu, @sciencewriter

Sources: Michael Manfra, mmanfra@purdue.edu

James Nakamura, jnakamur@purdue.edu

Journalists visiting campus: Journalists should followProtect Purdue protocolsandthe followingguidelines:

ABSTRACT

Direct observation of anyonic braiding statistics

Nakamura,1,2 S. Liang,1,2 G.C. Gardner,2,3 and M. J. Manfra1,2,4,3,5,

1Department of Physics and Astronomy, Purdue University 2Birck Nanotechnology Center, Purdue University 3Microsoft Quantum Purdue, Purdue University 4School of Electrical and Computer Engineering, Purdue University 5School of Materials Engineering, Purdue University

DOI: 10.1038/s41567-020-1019-1

Anyons are quasiparticles that, unlike fermions and bosons, show fractional statistics when two of them are exchanged. Here, we report experimental observation of anyonic braiding statistics for the = 1/3 fractional quantum Hall state using a device that is equivalent to a Fabry-Perot interferometer. Strong Aharonov-Bohm interference of the edge mode is punctuated by discrete phase slips that indicate an anyonic phase of anyon = 2/3. Our results are consistent with a recent theory for an interferometer operated in a regime in which device charging energy is small compared to the energy of formation of charged quasiparticles, indicating that we have observed anyonic braiding.

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How Andersen Cheng plans to defend against the quantum computer – The Independent

A

ndersen Cheng has a way with striking and memorable analogies. Boris Johnsons government is committing 1bn to building a Frankensteins monster, he says. Im trying to build a cage without any government funding to stop it running wild. The monster in question is the quantum computer, which is a hackers dream. The cage is what Post-Quantum was set up last year to create.

Cheng was born in Hong Kong but came to England to do his O-levels and A-levels. His parents sent him to a school in Devon. They wanted me to be as far from London as possible, he says. He duly learned to drive a tractor and milk cows, but went on to study engineering at Imperial College and do an MBA. When he started working in the City at the end of the Eighties as a computer auditor, there were only six portable compact computers in the whole company and disdain for the techies from people still using calculators.

Cheng became head of credit risk at JP Morgan in the midst of the dotcom bubble. He recalls how Boo.com burnt through $150m in 18 months. There just wasnt enough broadband speed for all those virtual mannequins spinning around, he says. After a spell in private equity, Cheng decided to break away and set up on his own as a consultant in the fast-growing realm of cryptography, working on top secret projects for the British government. It was so classified even the project name was secret, he says.

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Quantum computer to be hosted in Abingdon – ClickLancashire

The UK government has announced that it is backing the nation's first commercially available quantum computer to the tune of millions of pounds.

Quantum technology is estimated to offer 4 billion of economic opportunities globally by 2024 (and 341 billion through productivity gains in coming decades) - which will result in creation of new jobs, knowledge and skills in the United Kingdom, the government claims.

A Rigetti superconducting quantum computer is already commercially available in the Amazon Web Service (AWS) Bracket cloud, alongside other US-based systems using different approaches from D-Wave and IonQ. "This a key part of our plan to build back better using the latest technology, attract the brightest and best talent to the United Kingdom and encourage world-leading companies to invest here".

Pharmaceuticals, aerospace and transport are thought to be among the industries that will get maximum benefits from quantum computers. A recent BCG report projected the global quantum industry to reach 4B by 2024.

The University of Edinburgh will develop new techniques to test the hardware and the performance of the programmes that will run on the computer. Phasecraft will develop algorithms for energy, materials design and pharmaceutical purposes, while Standard Chartered Bank will look at financial applications.

It still sounds like early days in the development of a UK-based quantum computer - yesterday's investment kicked-off a three year development program.

"Oxford Instruments" new Proteox dilution refrigerator will be used as the cryogenic platform. "I am sure this collaboration will open a new future for many more innovative applications, and these applications will require an ecosystem where skills development, design & engineering excellence, and technology partners all combine to enable new discoveries and solutions', Simon added".

"We are excited to deliver the UK's first quantum computer and help accelerate the development of practical algorithms and applications", affirmed Rigetti Computing CEO Chad Rigetti. By providing access to quantum hardware, the collaboration aims to unlock new capabilities within the thriving United Kingdom ecosystem of quantum information science researchers, start-ups, and enterprises who have already begun to explore the potential impact of quantum computing.

The funding for the project forms part of the government's Quantum Technologies Challenge, which itself is led by the UK Research and Innovation public body, according to the press release.

Oxford Instruments plc published this content on 02 September 2020 and is exclusively responsible for the information contained therein. And more research should bring us closer to advanced quantum technologies and the grandest goal of quantum information science, creating a fault-tolerant quantum computer that can indefinitely compute without errors. The company's contributions range from underpinning mathematics through to developing software on real or emulated quantum hardware. It is hoped the quantum computer will provide better or quicker ways to solve problems in complex United Kingdom industries like pharmaceuticals, aerospace, and transport.

With over 100 academics, 120 research staff and over 1,600 students from over 80 countries worldwide the University of Edinburgh's School of Informatics is the largest European centre of its kind. It will also provide access to quantum computers for both research institutions and businesses.It is based at the Harwell Science and Innovation Campus in Oxfordshire. Standard Chartered's Data Science & Innovation group, with a proven research track record in quantum computing and machine learning/AI, has been active in quantum computing since 2017.

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Assistant director of NSFs Computer and Information Science and Engineering to give virtual talk Sept. 11 – Vanderbilt University News

By Jenna Somers and Jane Hirtle

Margaret Martonosi, assistant director of Computer and Information Science and Engineering at the National Science Foundation, will speak at a virtual campus visit on Friday, Sept. 11, from 2 to 4 p.m. CT hosted by Vice Provost for Research Padma Raghavan. Faculty, students and staff are invited to register to attend the presentation and take part in an open discussion and Q&A session about CISE and its key focus areas, including cyberinfrastructure, computing and communication, computer and network systems and information and intelligent systems, as well as funding opportunities and NSF future directions in these areas.

Register for the event here. >>

I am pleased to welcome my close colleague Dr. Margaret Martonosi to Vanderbilt, said Raghavan, who serves as a member of the advisory boards for the CISE Directorate and the Office of Advanced Cyberinfrastructure. Margaret is a preeminent computer scientist who has made foundational contributions to computer architecture and hardware-software interfaces in both classical and quantum computing systems. Now as the assistant director of CISE, she stewards the development of strategy and programs to strengthen fundamental research and education in order to advance U.S. leadership in computing, communications and information science and engineering. I am delighted to welcome her to share her insights with the Vanderbilt community and join us in a roundtable discussion.

Under Martonosis guidance, CISE also strengthens innovation in research cyberinfrastructure and promotes inclusive, transparent participation in an information-based society to ensure the success of the computer and information technology workforce in the global market.

Along with the Office of the Assistant Director, CISE includes the Office of Advanced Cyberinfrastructure, Division of Computing and Communication Foundations, Division of Computer and Network Systems, and the Division of Information and Intelligent Systems. Each of these units manages a portfolio of proposal competitions and grants while collaborating across units and directorates to achieve the mission of CISE.

Noteworthy examples of CISE-funded programs include Broadening Participation in Computing Alliances, which aims to increase the diversity and amount of college graduates in computing and computationally-intensive disciplines; the Foundations of Emerging Technologies, which supports fundamental research in disruptive technologies and models in computing and communication; and the Big Data Regional Innovation Hubs, which engage state and local government officials, local industry and nonprofits and regional academic institutions to use big data research to address regional concerns.

Most recently, NSF partnered with the Department of Agriculture, the Department of Homeland Security and the Department of Transportation to launch the National Artificial Intelligence (AI) Research Institutes. As the name suggests, these institutes will serve to accelerate AI research nationwide, developing the U.S. workforce and protecting and advancing society across many aspects of daily life from education to natural disaster preparedness.

While serving as the assistant director of CISE, Martonosi is on leave from Princeton University, where she is the Hugh Trumbull Adams 35 Professor of Computer Science. Her research focuses on computer architecture and mobile computing. Martonosi has received numerous awards, including the 2019 SIGARCH Alan D. Berenbaum Distinguished Service Award, the 2018 IEEE Computer Society Technical Achievement Award, and the 2010 Princeton University Graduate Mentoring Award, among many others. Additionally, she is an elected member of the American Academy of Arts and Sciences and a fellow of the Association for Computing Machinery and the Institute of Electrical and Electronics Engineers.

Please visit CISE to learn more about its programs, funding opportunities and awards.

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If Bitcoin Crashes Below $10,000 Its All OverHeres Why – Forbes

Bitcoin has declined sharply this week, losing over 5% in under 24 hours and causing traders to nervously eye the psychological $10,000 per bitcoin level.

The bitcoin price lost $1,000 in a matter of hours, falling under $11,000 per bitcoin on Thursday morning with the U.S. stock market posting its biggest sell-off since June by the close of play as stocks retreated from all-time highs, led lower by tech giants.

Bitcoin and cryptocurrency market watchers, who have enjoyed a prolonged bull market since the March coronavirus crash, are now focused on the $10,000 line, with a bitcoin futures trading gap set in late July still open just below it.

The bitcoin price lost almost $1,000 per bitcoin in under 24 hours, sparking fears among bitcoin and ... [+] cryptocurrency traders of a wider sell-off.

Bitcoin's 2020 bull market, which has seen the bitcoin price surge from around $4,000 to $12,000, could be brought to an abrupt end if the price moves lower than $10,000 per bitcoin.

"Moving forward, it is important to keep an eye on the last zone of defense between $10,000 and $10,500," Joe DiPasquale, the chief executive of San Francisco-based bitcoin and crypto hedge fund BitBull Capital, said via email. "As long as this range is respected, bitcoin is unlikely to see a prolonged bearish spell."

The open trading gap, set on July 27, saw bitcoin futures on the Chicago Mercantile Exchange (CME) open higher after the weekend close, something some analysts think causes a disconnect with the underlying market. Technical analysis shows that 90% of such trading gaps are eventually closed, with the price sooner-or-later retracing back to the gap.

Elsewhere, bitcoin and cryptocurrency exchange data suggests there could still be "sell pressure to work through," according to Philip Gradwell, chief economist at blockchain intelligence firm Chainalysis.

"Bitcoin inflows to exchanges were 92,000 yesterday, highest in 37 days, as people rushed to sell at near $12,000 prices of September 1," Gradwell said via Twitter. "Trade intensity, how many times the inflowing bitcoin was traded, is low, suggesting there were not many buyers to match the sellers."

Meanwhile, bitcoin miners, those who secure the cryptocurrency's network in return for bitcoin rewards, "are moving unusually large amounts of bitcoin," according to analysts at data provider CryptoQuant, suggesting miners are looking to cash out their bitcoin rewards.

"The big level that everyone is watching is $10,000," Mati Greenspan, the founder of Quantum Economics, wrote in his popular daily newsletter, pointing to a U.S. dollar comeback as the reason for the recent move lower.

"The crypto market has broken a few psychological levels. When we broke above that level in late July, it was with such force that we never really got to test it as support. Well, this may just be our chance," Greenspan wrote, adding, "if things get really bad we may just get another chance to buy bitcoin below $10,000."

The bitcoin price has lost almost 6% over the last 24-hour trading period, with the bitcoin market ... [+] capitalization falling under $200 billion.

However, many in the bitcoin and cryptocurrency community remain upbeat despite the recent bitcoin price fall.

"$10,000 is the new $1,000," Charles Hayter, chief executive of bitcoin and cryptocurrency analytics platform CryptoCompare, said via email, adding: "2020 has seen leaps and bounds in terms of infrastructure, regulation and resilience across the ecosystem as it has evolved over the last three years."

The current bitcoin market is "similar to the first half of 2017," according to Hayter, who thinks "the perpetual dilution of fiat currencies is being challenged by bitcoins hard code cap" of 21 million bitcoin tokens.

Bitcoin, along with the wider cryptocurrency market and global stock markets, has been boosted this year by massive stimulus measures and unprecedented money printing that's carried out by the world's central banks, led by the U.S. Federal Reserve, in order to offset the economic damage wrought by the coronavirus pandemic.

"For most of 2020, short-term bitcoin price moves have been highly correlated to U.S. stocks," Cory Klippsten, the chief executive of bitcoin buying app Swan Bitcoin, said via Telegram, adding he expects "any dips under $10,000 to be bought up voraciously."

"Bitcoin has proven to be uncorrelated over the longer term. At a minimum it is a hedge against fiat inflation, but it also functions as a call option on a new global monetary system."

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If Bitcoin Crashes Below $10,000 Its All OverHeres Why - Forbes

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Can You Have Your Bitcoin And Eat It Too? – Forbes

Debating the opportunity costs of earning on your Bitcoin.

Crypto Twitter, like many Twitter-spheres, is as full of self-affirmation and choir preaching as it is of internal holy-wars (not too unlike those described on this post). We can characterize two camps within the crypto/digital asset space. This is a gross oversimplification to be sure, but paints a picture of the space where there are a spectrum of competing ideas.

One group is financial and technically more conservative; this group wants the hardest monetary policy, extremely high levels of computational security, and the ability to self-verify everything. They might see the benefit of more complex functionality, but think this functionality must be built on top of a highly reliable and trustworthy base layer. These folks value minimizing attack vectors, self-auditing, backwards compatibility, and privacy. The Bitcoin Maximalists fit into this group.

The second group is more liberal; they are interested in rapid innovation, maximal flexibility and functionality, and often have higher risk tolerances. While they still value security and decentralization, they are comfortable with a larger set of concepts and designs. There is substantial internal diversity among the members of this group, but many of them envision a future with many successful interconnected projects (rather than a single base layer).

As an example, we recently watched the Bitcoin Maximalists spar with the Ethereum community over issues such as cost to run a full node and auditing a networks total supply in a debate dubbed #supplygate (1, 2).

What if you could benefit from additional functionality without compromising on security?

There is a middle ground forming under the term Bitcoin Centrist. The centrist understands the benefits of both camps ideologies.

Putting Your Crypto to Work

DeFi, or Decentralized Finance, is arguably the hottest subject of 2020 within the crypto space. This new buzz word describes the broad set of protocols which enable decentralized financial product/service applications (acknowledging that there isnt complete consensus on what fits into this category). I aggregated and parsed unique documents mentioning the keyword DeFi using NTerminal in Splunk. We can see an increase in buzz over the course of 2020:

Sentiment Analysis for the Keyword "DeFi"

People are interested in DeFi both for its potential in Reinventing Global Finance, and as a way to make massive investment returns. DeFi applications include systems such as automated market making, derivatives, and lending. Yield Farming is the process of utilizing DeFi protocols to generate yield on ones digital assets.

YFI (the token for Yearn Finance), for example went from trading around $4,000 at the start of the month to a price of over $36,000, surpassing $1 billion in marketcap:

YFI-USD Reported Price & Volume on FTX and NLP mentions by Sentiment

These protocols, of course, are far from being risk-free, and this market activity does not appear to be sustainable. In some ways the DeFi craze mirrors what we saw in 2017 with the ICO boom, when projects were pulling millions of dollars before anyone had time to find the associated white paper.

Yam Finance Marketcap Aug 11-17

Yam Finance (with the symbol YAM) was an unaudited project started in just 10 days (start to finish according to them) which was launched on Aug 11th. According to Coingecko, it hit a market cap of almost $60 million on Aug 13th. Then, a bug was discovered which locked up ~ $750,000 in Curve y tokens and the price immediately plummeted.

But what about tokenized Bitcoin?

The amount of Bitcoin locked on Ethereum has exploded over the last month. The USD value locked in WBTC and RenBTC, the two leading methods of locking your BTC into Ethereum transactions have outpaced the production of Bitcoins earned by miners:

Total Value Locked (USD) in WBTC

Total Value Locked (USD) in RenVM

Each of these methods carry a unique set of risks. WBTC is an ERC20 token backed 1:1 with BTC which involves a custodian, and the KYC that comes with it.

The renBTC token uses the Ren Virtual Machine to mint BTC to an Ethereum smart contract. This method avoids the counterparty risk, but could be void of any way of retrieving trapped funds.

In addition to counter party and/or smart contract risks, users must pay outrageously high gas prices on their transactions (which could fail), navigate the various platforms which enable the minting of these tokens, and make sure they avoid scams and user errors along the way.

Conceptually, locking your assets into smart contracts which allow you to put your money to work is great. If it is possible to generate income without compromising the financial sovereignty offered by permission-less and censorship-resistant money like Bitcoin, it would benefit both the Maximalists and Yield Farmers alike.

Today, however, Bitcoin (as well as Yams and Sushi) still abides by the same rules as cake. While there are now various ways of putting your digital money to work, there are important risks and trade offs associated with them. I expect the Bitcoin Centrist camp to grow as these trade offs are reconciled by developers and users.

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Can You Have Your Bitcoin And Eat It Too? - Forbes

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First Mover: As Bitcoin Falls for Second Day, Long-Term Holders Probably Won’t Care – CoinDesk – CoinDesk

Youre readingFirst Mover, CoinDesks daily markets newsletter. Assembled by the CoinDesk Markets Team and edited by Bradley Keoun, First Mover starts your day with the most up-to-date sentiment around crypto markets, which of course never close, putting in context every wild swing in bitcoin and more. We follow the money so you dont have to. You cansubscribe here.

Price Point

Bitcoin was down early Thursday to about $11,250, extending Wednesdays sell-off and falling to its lowest price since early August.[Update: At press time prices had slumped further to around $10,850.]

The cryptocurrency tumbled 4.4% on Wednesday, the most in a month, leading to a heightened level of margin calls and position liquidations. Prices appeared to fall in sync withgold and silver prices, which tumbled as the dollar reboundedfollowing a recent slide.

Failure to hold at the $12,000 level has turned the milksour, the crypto trading firm Diginex wrote in a note to clients. Leveraged longs have been forced to drink it.

Market Moves

With stocks soaring to new records after a decade-long climb, traders in traditional markets are asking how much higher theycango in the midst of a global pandemic, openly discussing whether the market is justpropped up by government stimulus checks and Federal Reserve money injections.

The conversation around bitcoin is very different. The assumption among many digital-asset investors is the cryptocurrencys price will definitely, inevitably go higher, much higher. Its only a matter of time.

Cameron and Tyler Winklevoss, who run the cryptocurrency exchange Gemini, wrote last week thatbitcoin prices could reach $500,000, in an extensive analysis that somehow relates to adatabase of 600,000 asteroids.

Nobody really knows if any of that will pan out, of course. Whats clear is a lot of investors have bought bitcoin because they see it as a deep out-of-the-money option (with no expiration date) on financial Armageddon, severe currency debasement or at the very least an inflation rate well above the Federal Reserves 2% annual target. According toCoinDesk Researchs monthly review published this week, bitcoins price appears to be rising whenever the dollar falls in foreign-exchange markets.

Bitcoin costs $11,200 now, and it might be possible to lose it all, but it also might be worth $500,000 at some point. Thats the general gambit anyway.

Invented just 11 years ago, bitcoin is exceedingly difficult to value partly because it has such a short track record. Similar to gold and many other commodities, the cryptocurrency offers no yield,so bond math wont work. Bitcoin has no earnings or dividend, so stock analysis wont work either.

Philip Bonello, director of research for the money manager Grayscale (owned by CoinDesk parent Digital Currency Group), says his favorite chart for thinking about bitcoins price trajectory might be one showing holders versus speculators. A holder in this case is defined as a bitcoin that has not moved for one to three years, while a speculator coin has moved in the past 90 days.

An increase in holders is considered likely bullish, while an increase in speculators is likely bearish, according to arecent Grayscale report. The idea is that its positive for the market if more investorsappear to be holding the cryptocurrency for the long term, versus those who merely appear to be in it for a quick volatility ride.

Right now, the chart shows holders increasing and speculators decreasing. According to Grayscale, its a similar structure to that of early 2016, just before bitcoin went on a bull run toward its all-time high around $20,000.

Its reassuring, Bonello said Wednesday in a phone interview, that the sentiment of the investor base is growing day by day. The holders appear to have been unfazed by the volatility witnessed in March, when the spread of the coronavirus quickly sent bitcoin prices swooning from above $9,000 to below $5,000. Its probably unlikely that theyre going to sell right now at $11,000, Bonello said.

All of this might mean nothing for the future price of bitcoin. It just shows that a growing number of investors are holding onto their tokens in a bet that the cryptocurrencys price will or even that it might eventually go up. By a lot.

Bitcoin Watch

Token Watch

Ether (ETH):Open positions in Deribits ether options hitrecord high above $500 million.

Bitcoin Cash (BCH):Proposed changes by development team couldreduce rewards for miners, splitting community support.

OKB (OKB):OKEx CEO says foundation burned 3.8 million of its utility tokens, just over 1% of total supply, deepening commitment to deflation at time when central banks around the world are ceaselessly printing money.

Theta Network (THETA):Decentralized streaming network says DeFi could be used to pay content providers who arejust starting out, with few followers.

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Private Capital And Institutions Are Piling Into Bitcoin And Other Digital Assets But You Need To Know Where To Look – Forbes

Many in the crypto and digital assets markets have been claiming that institutions are moving into this space and are now banging down the digital door to get access to this asset class. They may finally be onto something.

By many measures, the market for digital assets is growing at a pace that appears primed for broader adoption by more sophisticated players in the markets like private capital, pensions funds, endowments, traditional hedge funds, and banks.

The crypto derivatives market is a leading example of this. It has been growing faster than the spot market over the past three years and is now estimated to be 40% of the top global exchange volume according to CryptoCompare in their July Exchange Review Report.

"In the last two years we have seen traditional pension funds likeFairfax Countys Virginias Police Officers Retirement System, traditional banks like JP Morgan, Signature Bank, and multiple billion dollar family offices across the country holding and investing in Bitcoin and other crypto currencies," says Kavita Gupta, visiting scholar at Stanford University.

Institutions often cite regulatory uncertainty as one of the main reasons for not allocating to crypto and digital assets, and they have a point. Most tokens and coins fall under a legal grey area that has yet to be clarified by most major securities authorities. Derivatives are a different breed.

The US Commodities Futures Trading Commission (CFTC) is considered one of the planets toughest regulators, and they have approved several crypto futures contracts for trading like CME's Bitcoin Options, NYSEs Bakkt, and LedgerX. This approval comes despite their refusal to approve a Bitcoin ETF as they judge the spot market as unreliable and manipulated to a much higher degree than most people realize.

The widespread availability of these derivatives has led to private capital and institutions allocating to them, seemingly setting or matching new records with each passing month. Open interest in Bitcoin contracts hit an all time high of $2.1 billion on July 31st and then nearly matched that mark with the August expiry that passed just last week.

In the U.S. alone, anyone with a TD Ameritrade or Robinhood account can invest in crypto options just as easily as buying a share of Apple AAPL or Tesla TSLA , and this has likely contributed to the explosive growth seen in options trading volumes this year. The rumour in the professional COVID-19 work at home community in the global financial services sector is that the vast numbers of new homeworkers has contributed to the retail volume of derivative trading.

It helps to have traditional heavyweights like the CME and NYSE behind these contracts, and while growth started slowly and intermittently, it is now moving at a steady pace. According to a recent research report by Tokeninsight, derivatives trading volume is rising steeply, up 100 percent from the same period one year ago as spot volumes have seen a drop, down 18% in Q2 but still have yet to pass spot trading volumes.

There are also venues like Huobi, Bitmex, and Deribit, and investors are flocking to them not only because they are seen as safer by some, but also because of the flexibility and creativity found in derivatives markets.

Denis Vinokourov, head of research for digital assets prime broker Bequant, recently commented in CoinTelegraph, Options are a very efficient way to hedge exposure to the underlying product, be that Bitcoin or Ethereum spot or even futures/perpetuals. In addition, it is easier to structure products that would offer yield, and it is this that has been particularly appealing to market participants, especially in the wake of sideways market price action.

Crypto assets are growing and the markets are maturing at a remarkably fast pace given their relative infancy. Bitcoin is increasingly gaining mainstream awareness as public companies and central bankers discuss it with stablecoins, central bank digital currencies (CBDCs), and the Digital Yuan, increasingly as a prolonged economic downturn caused by the COVID-19 pandemic looks increasingly likely.

Last month a publicly traded company MicroStrategy MSTR became one of the single biggest individual holders of Bitcoin when it bought about $250 million worth of BTC because it is a reasonable hedge against inflation that is superior to cash.

This led to a short-lived rally, but this was less important than the initial indications that larger firms are now starting to seek out alternatives to the US Dollar, and in this case, one was confident enough in Bitcoin to convert nearly all of its cash reserves into the cryptocurrency.

This phenomenon is global with Asian companies not to be outdone. This weeks announcement by the Singapore Exchange about its entry into digital asset products is a telling barometer for institutional interests globally.

This is no surprise as Asian institutions make up the lions share of trading volumes in spot, futures and derivative products, said James Harris, at CryptoCompare, expect more to come, especially in the Asia Pacific region, and soon.

A number of larger exchanges around the world are also long on digital assets including the London Stock Exchange Group, Nasdaq and the Swiss Stock Exchange (SIX-Group) who is building a full digital exchange, SDX, in partnership with R3 and are also exploring platforming the Swiss National Banks (SNB) digital currency.

Spot markets have since rallied sporadically but are struggling to stay above $12,000, trading mostly in a narrow range between $11,300 and $11,800 while DeFi coins like YFI have surged in unprecedented parabolic runs that have made instant millionaires overnight only to see some of those lose all their gains almost as quickly, as in the case of YAM.

A likely contributor to this tentative price action is the weariness traders have that another storm cloud is often on the horizon. Ethereum Classic (ETC) had three 51 percent attacks last month alone. This week saw South Korean regulators raiding the offices of BitThumb, one of the worlds largest crypto exchanges, over allegations of fraud related to an IEO and a potential buyout offer.

Bitcoin fell nearly five percent and other digital assets were dragged down with it. In an orderly market, circuit breakers would be triggered. Trading would be suspended, and investors would have been protected.

These measures dont exist in digital asset spot markets and flash crashes lead investors of all types to incur losses they otherwise wouldnt in traditional, fully regulated markets. Until the risk of this unpredictability can be better managed, it might be a while before more sophisticated investors look too far beyond traditional derivatives markets which are, after all, notionally the largest market in the world.

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Private Capital And Institutions Are Piling Into Bitcoin And Other Digital Assets But You Need To Know Where To Look - Forbes

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