Earlier this year, Kraken in partnership with The Economist, launched a contest that posed an important question to MBA programs across the country.UPDATE: Winners of the Kraken contest have been announced: You have $1M to invest across bitcoin and ether.You cannot touch your investment for the next 5 years.How much of that $1M do you invest in each?Kraken’s essential question is, “which is the digital asset of the future?” In response, 13 teams have participated by providing a detailed paper and a short video to express their findings.Through in depth research, detailed analysis, and educated speculation, each team has presented their case for Kraken and the crypto community to assess and vote on.Submissions will be judged on the following main points: Kraken has incentivized the contest with cash prizes valued at $21,000 (USD).The 1st place winner will receive $10,000, 2nd place will be awarded $5,000, 3rd place will retain $3,000, and the People’s Choice to receive $3,000 as well.

Each team was asked to quantify their results as a percentage, granting them free range in how much or how little they would potentially invest the one million into each currency.Below is a chart of the initial results of each participant.Determining the findings took shape as grading systems to which the results were scaled, tallied, and quantified.The teams also employed financial tools such as Monte Carlo simulations, to make accurate projections of growth for both currencies over the next five years.asic for litecoinNo one team held bias over their decision making but rather employed mathematical strategies that broke down fundamental attributes such as Upon reviewing the submissions, some distinct patterns began to emerge.bitcoin market arbitrageAll teams, with the exception of Ivey Business School at Western University, (no investment recommendation) invested some value into Ether.bitcoin tycoon game

With a low of nine percent investment from Tuck School of Business at Dartmouth, to a high 100 percent investment from Worcester Polytechnic Institute, all expressed some if not significant investment value in ETH.By scoring BTC and ETH through these attributes, teams were able to objectively manage data into their case studies, along with other real world factors such as commercial application, and projected growth affected by various trends in the crypto world.bitcoin billionaire iphone gameAlthough Bitcoin is currently the number one cryptocurrency today, most teams expressed Ether’s potential to replace bitcoin as the network grows.ethereum value calculatorWith bitcoin having certain non-tech advantages over ETH, mainly it’s time on the market and the public’s familiarity, teams adamantly expressed their belief to place some, if not most of the speculative one million dollars into BTC, over the next five years.bitcoin bot tumblr

The reasoning behinds this stands that BTC currently has a higher monetary value over ETH and is expected to increase as much as 600 percent by 2020.The decentralization of bitcoin also played a factor in determining the growth of the currency, making it a safer bet to invest in, according to certain teams.Ether did reign champion at Worcester Polytechnic Institute with 100 percent investment, with both Porto and Rutgers Business Schools tying in 2nd place with an 80 percent investment.Teams that assigned 50 percent or more of the one million into ETH, expressed Ethereum’s value as a whole rather than as mere currency.The consensus dictates that smart contracts and commercial monetization of the EVM (Ethereum Virtual Machine) make it a valuable commodity to invest in, an advantage over bitcoin.BTC was viewed as the more profitable currency, however it’s limitations beyond that was shared by many of the schools.“Ethereum’s nature makes it difficult for adaptors to understand the technology and for regulators to pass [legislation]”, according to BYU Marriot School of Management.

This sentiment was echoed in other papers and played a significant role in the investment strategy.For some teams, ETH’s short time in existence played a bigger role than others, while some saw the potential for Ethereum to become a major player not only as a currency, but also in part because of its unique ecosystem.Charts and diagrams broke down costs and trading trends over several years displaying exponential growth of ETH as much as 550 percent by 2020.Regardless of the final results of each team, the potential of ETH to become profitable was shared by most.We see this sentiment echoed in the paper from Worcester Polytechnic Institute: Nathaniel Popper and many others have referred to Bitcoin as the new, “Digital gold.” Ethereum on the other hand primarily seeks to provide a way to record and store transactions, and this difference is the primary reason why we believe Ethereum is the better investment over the next five years.With Bitcoin reigning in as overall champion at 55 percent of the total collective investment, the majority is in favor of investing more funds in BTC.

This isn’t a landslide victory however, Ether’s average stake at 45 percent signifies excitement, a solid faith in the currency, and its successful growth.Simply put, the potential of ETH to become a serious market player is prevalent in the papers and should not be disregarded.With many banks already employing SWIFT transactions like those executed on Ethereum, the mainstream adoption of ETH is anyone’s guess over the next five years.While some teams played it more safe with their ETH investment fund, other teams contend that Ether will be the king of future digital currencies./ and cast your vote.With bitcoin emerging from a shady past and setting new all time highs, it’s worth getting to know the king of cryptocurrencies.Here are ten things you may not know about bitcoin: Bitcoin (BTC) enthusiasts around the world will celebrate later this month with a slice or two of programmer fuel in honour of the first tangible bitcoin transaction.In 2010, when bitcoin was less than a year old, programmer Laszlo Hanyecz paid a fellow Bitcoin Talk user 10,000 BTC to order him two Papa John’s.

The value of those pizzas today?Over 17 million dollars!In 2008 a whitepaper was posted to a discussion group by a mysterious character called Satoshi Nakamoto.This document (which, by the way, is only nine pages long and, apart from the very last chapter, is totally accessible to the lay reader) captured the imagination of the cryptocurrency community, and the system it described caught on very quickly.To this day, no one knows who Satoshi Nakamoto is, nor whether he, she, it, is dead or alive – or whether they’ve simply lost their private key and are too embarrassed to admit it.The likeliest explanation is that the creator recognised that their anonymity was an important part of the attraction and a truly decentralised currency could not have a ‘leader’ or single entity in control.As the bitcoin story plays out, the work of Satoshi Nakamoto seems more and more like an act of generosity and genius.Unlike government-backed ‘fiat’ currencies, that can be printed or quantitatively eased by those in power, the supply of bitcoin is fixed.

New bitcoins can only come into existence as rewards paid automatically to ‘miners’.The reward will halve every few years until, by approximately 2140, the hard limit of 21 million will be reached.So far, nearly 80% of available bitcoins have been mined.This scarcity is one of the reasons why the value of bitcoin against all other currencies has skyrocketed.In the early days of bitcoin, it was possible to ‘mine’ on a laptop.As things progressed, specialist hardware using dedicated processors took over and now it is only feasible to mine if you have ASIC (application specific integrated circuits) hardware, cooling systems, and access to a cheap supply of electricity.The economics of mining, complex and volatile, is an essential component of the bitcoin ecosystem.However, according to not-well-known Bristol-based cyber security expert ‘Zach’ (not his real name), “Satoshi never meant mining to be big-business profitable.The hardware arms race of recent years has meant that only well-funded businesses can mine, but now that race is reaching some limits.

All the main advantages have already been exploited, so the price of ASIC hardware will fall and become affordable, in line with Moore’s Law.We may in the future be able to buy ASIC heaters from B&Q to secure the world’s financial systems while keeping the home at a comfortable 21 degrees celsius.” Bitcoins definitely don’t look like this image: The ‘bitcoins’ in the images heading every bitcoin news story are just a fancy way of keeping the currency in cold (offline) storage.These physical coins were a novelty project by bitcoin user Casascius, available pre-loaded with bitcoin until 2013.Each one contained a piece of paper with a tamper-proof hologram protecting a unique, redeemable private key.They made a nice present but, if they’re too ‘bling’ for your tastes, you can make your own simple paper wallets.Paper wallets and goldy lookin’ coins are one way to store bitcoin but, if you want to actually use it for transactions, you need some kind of hot (online) wallet.

There is a huge range available, from the Bitcoin Core client – which can be compiled from source code and will take several days to synchronise with the network when you first run it – to hardware wallets for those with significant funds to store, to a new breed of ‘lightweight’ SPV (simplified payment verification) smartphone wallet apps (all free) that make good use of modern devices’ security features and offer a sensible trade-off of speed with ease of use and prudence.Don’t sweat it too much, particularly if you’re just looking to get started.You can always change your mind, and you can (and probably should) have multiple wallets.I recommend breadwallet (now available for iOS and Android).Unlike conventional financial transactions, which contain sensitive information and need to be transmitted over secure institution-owned networks, a bitcoin transaction is simply an instruction to the network.This means that you can send it via SMS or email and, if for some reason you needed to conceal a transaction, you could even encode it as a series of smiley faces, or in a single picture, as described by bitcoin guru Andreas Antonopolous in this presentation, Money as a Content Type.

This makes bitcoin almost unstoppable, even if a government decides it wants to shut it down.Most of us take access to financial services for granted but it’s worth noting that approximately 2 billion people worldwide are ‘unbanked’ and therefore excluded from playing a part in the global economy.Some countries, like Ghana, are leapfrogging third-party banking and embracing bitcoin as their primary means of transacting with each other – and their only means of trading with the wider world.Smartphone ownership is predicted to reach 6.1 billion by 2020 with a whole new population joining the party for the first time – on fairer terms than was ever thought possible.At the moment, the transaction fees for bitcoin transactions are high.The fees (separate from the mining rewards) are paid per byte, so for small amounts, the fees can be higher than the value of the transaction.This is disappointing because a lot of the early excitement was about bitcoin’s potential for ‘microtransactions’, such as direct tips for bloggers and Things of the Internet paying each other.

Bitcoin is currently a victim of its own success; the transaction blocks (limited to 1MB) are full, so the laws of supply and demand are in effect and only higher value transactions make economic sense.However, there are solutions to the scaling issue in the pipeline, and after much squabbling in the community about which one to implement first, a leaner way of handling the data, called Segregated Witness, is being rolled out across the network, which should make a higher volume of low-fee transactions possible.The bitcoin blockchain is a ledger of all bitcoin transactions since the very beginning when Satoshi Nakamoto gave the first bitcoins to itself in the ‘Genesis’ block.New blocks are added by the miners approximately every 10 minutes, and the file is now over 120GB.You can download it, or inspect it via a browser, such as blockchain.info.Numerous ‘altcoins’ exist, each with their own blockchain, and there is also much research into using the technology for other types of value, for example, the right to vote, health records and land registry.