Korean bitcoin exchange Korbit raise $400,000 from Valley heavyweights

http://betech.asia / 2014 January 20 / By Nathan Millard

The bitcoin industry is starting to gain serious traction in Korea, and the support of these global investors demonstrate that Korean companies could be at the heart of Bitcoin’s expansion globally.

Korean bitcoin startup Korbit announced today that it has raised $400,000 in an angel round led by Tim Draper, founder of global venture capital firm DFJ. Joining Draper in this round is an A-list group of investors, with personal investments by Naval Ravikant of AngelList, David Lee of SV Angel, Pietro Dova of XG Ventures, Michael Yang, co-founder of mySimon, and Jay Eum, co-founder of Translink Capital. Barry Silbert’s Bitcoin Opportunity Fund and previous Korbit investor Strong Ventures also participated.

“Bitcoin’s growth in Korea is remarkable for the sophistication of the public dialog around its potential for innovation and wealth creation,” said Tim Draper, going on to say that “Korbit is setting a great example for Bitcoin companies around the world by laying a healthy foundation for digital currencies in the Korean economy. Korea can play a leading role in the future of global finance by capitalizing on innovations like Bitcoin.” - READ MORE

Cryptocurrencies as a Single Pool of Wealth

ieet.org / By Gennady Stolyarov II / Posted: Jan 18, 2014

For instance, if we make the simplifying assumption that the functional properties of Bitcoin and Litecoin are identical for the practical purposes of users, then the exchange rate between Bitcoins and Litecoins should asymptotically approach 1 Bitcoin to 4 Litecoins, since this will be the ultimate ratio of the number of units of these cryptocurrencies. Of course, at any given time, the true ratio will vary, because each cryptocurrency was initiated at a different time, each has a different amount of computer hardware devoted to mining it, and none has come close to approaching its asymptotic volume.

What implication does this insight have for the purchasing power of Bitcoin? In a world of many cryptocurrencies and the possibility of the creation of new cryptocurrencies, a single Bitcoin will purchase less than it could have purchased in a world where Bitcoin was the only possible cryptocurrency. The degree of this effect depends on how many cryptocurrencies are in existence. This, in turn, depends on how many new cryptocurrency models or creative tweaks to existing cryptocurrency models are originated – since it is reasonable to posit that users will have little motive to switch from a more established cryptocurrency to a completely identical but less established cryptocurrency, all other things being equal. If new cryptocurrencies are originated with greater rapidity than the increase in the real purchasing power of cryptocurrencies in total, inflation may become a problem in the cryptocurrency world.

The real bulwark against cryptocurrency inflation, then, is not the theoretical upper limit on any particular cryptocurrency’s volume, but rather the practical limitations on the amount of hardware that can be devoted to mining all cryptocurrencies combined. Will the scarcity of mining effort, in spite of future exponential advances in computer processing power in accordance with Moore’s Law, sufficiently restrain the inflationary pressures arising from human creativity in the cryptocurrency arena? Only time will tell. - READ MORE