Čvc 24

London Police Proactive Against Alleged Cryptocurrency Money Laundering

After a warning from European law enforcement agency Europol earlier this year that billions of pounds are being laundered through cryptocurrencies, City of London officials have decided to take matters into their own hands. 


Transactions made in Bitcoin and other cryptocurrencies are notoriously complicated to trace due to the fact that users can generally generate unlimited numbers of wallets without providing any identifying information. Nevertheless, law enforcement agencies seem to have no trouble tracking down cybercriminals dealing in cryptocurrencies — as evidenced by the recent indictment of Russian intelligence officers who used Bitcoin to fund their interference with the 2016 U.S. presidential election.

Earlier this year, Europol officials arrested 11 individuals and identified 137 others allegedly involved in a large-scale network for laundering drug money with cryptocurrencies as a part of its Tulipan Blanca operation. The agency warned that there is currently three to four billion pounds ($4.1 to $5.5 billion) worth of digital currencies being laundered in Europe alone, though little evidence was provided to back this claim.

In contrast, the Hong Kong Financial Services and Treasury (FSTB) admitted in its “Money Laundering and Terrorist Financing Risk Assessment” report that it sees no evidence of Bitcoin or other cryptocurrencies being used to launder money or fund terror organizations whatsoever.

Still, accusations of crime in the cryptocurrency world persist.

The Deputy Governor of the Bank of England, Sam Woods — who is candidly wary of cryptocurrencies — wrote letters to the executives of financial institutions claiming (without evidence) that digital currencies “appear vulnerable to fraud and manipulation, as well as money-laundering and terrorist financing risks.”

London Police Getting Proactive

To stay ahead of the future generation of cybercriminals, the City of London Police Department is implementing a new cryptocurrency fraud course at their Economic Crime Academy beginning this fall, according to The Telegraph. A City of London Police spokesperson commented:

On successful completion of this course, participants will understand how to detect, seize and investigate the use of cryptocurrencies in an investigative context… It will be the first of its kind and has been developed in response to feedback from police officers nationally who felt there wasn’t enough training available in this area.

While Bitcoin cannot be blamed for financial transgressions any more than SMS can be blamed for infidelity, a select bunch of computer literate criminals has taken a liking to the new technology and it is to the advantage of law enforcement agencies and financial authorities around the world to keep their staff educated on the latest blockchain trends — whether they are being used to clean dirty money or not.

What do you think of the new programs to educate officials about digital money laundering? Will they be useful, or will the technology evolve quicker than they can adapt? Let us know in the comments below! 


Images courtesy of Shutterstock, Bitcoinist archives.

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Čvc 23

Gary Gensler: From CFTC Chair to Blockchain and Cryptocurrency Educator

Gary Gensler was chairman of the U.S Commodity Futures Trading Commission (CFTC) between 2009 and 2014, right after the global financial crisis. Today, Gensler is part of MIT’s Digital Currency Initiative, lecturing students on blockchain technology and cryptocurrencies.


Gensler was instrumental in dealing with some of the cleanup from the global financial crisis of 2008. He implemented new regulation whilst at the U.S CFTC for the unregulated swaps market which played a central role in the crisis. His work at the U.S CFTC was successful and the new oversights were implemented in advance of other regulators taking actions to mop up after the crisis.

Teaching Blockchain and Cryptocurrency at MIT

After leaving the CFTC Gensler became finance chairman for Hillary Clinton’s 2016 presidential campaign and bid. Gensler has now joined the Massachusetts Institute of Technology (MIT) Sloan School of Management and lectures on blockchain technology and cryptocurrencies.

Bullish on Blockchain

In a recent interview with The Wall Street Journal, Gensler confirmed he is “bullish” when it comes to blockchain, describing it as mimicking the distributed nature of society. However, his past work at the CFTC has left him with a “sober” eye on fast-growing financial technology.

Despite not being directly involved in U.S politics right now he has agreed to help both Republicans and Democrats in matters of cryptocurrency regulation.

Regulators Need to Bring Clarity

Regulators Need to Bring Clarity

Speaking at the MIT Technology Review’s Business of Blockchain conference in April 2018, Gensler said that government officials needed to look to regulate the larger cryptocurrencies as well as new ICO tokens.

“The SEC and regulators need to bring clarity,” said Gensler, many cryptocurrencies “are operating outside of U.S. laws.”

Gensler was quoted in a subsequent debate over Ripple describing it as a “noncompliant security” due to its centralized distribution model.

The CFTC is Better Placed to Regulate the Sector

Last week, July 19, 2018, Gensler spoke at U.S Congressional hearings on cryptocurrencies and blockchain technologies giving five reasons why he believes blockchain technology can make a real difference in the financial sector.

Gensler said blockchain lowers costs and risks and can give stability and prevent illicit activities if regulated. But, the U.S Securities and Exchange Commission (SEC) and U.S CFTC have a role to play as the ICO market is ripe with scams and fraud and there are gaps in U.S law, especially when it comes to exchanges.

Gensler also believes the U.S CFTC is better placed to regulate cryptocurrency markets.

Do you agree with Gensler? Who is better placed to regulate cryptocurrencies in the U.S, the CFTC or the SEC? Let us know what you think in the comments below.


Images courtesy of Shutterstock, Flickr

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Čvn 01

4 Lies Your Economics Professor Will Tell You About Bitcoin

· May 31, 2018 · 9:00 pm

Stop trying to reinvent the monetary wheel with Bitcoin, argues Robert Skidelsky, a member of the British House of Lords and professor emeritus of political economy at Warwick University.

[Note: This is an op-ed]


Old Man Yells at Bitcoin

In an article published last week, Skidelsky draws similarities between gold and Bitcoin, concluding that it’s incorrect to perceive flaws in money itself as the cause of “sick” economies. In other words, boom and bust cycles are natural occurrences, and the incumbent financial system is the best humans can do, if only the sluggish economies could just get it together.

Skidelsky argues:

The fact is that human societies have discovered no better way to keep the value of money roughly constant than by relying on central banks to exercise control over its issue and to act directly or indirectly on the volume of credit created by the commercial banking system. 

Old man yelling at Bitcoin

But let’s leave the Keynes versus Hayek debate for another article. Instead, what stands out like a sore thumb is not only the complacency and the knee-jerk reaction to defend the status quo, but doing so through ignorance of Bitcoin’s fundamental properties.

Amusingly, Skidelsky even acknowledges that “the technical details of the new cash-generation systems are difficult to grasp; their inspiration is not.”

A person from the early 20th century might have also said that “the technical details of the airplane are difficult to grasp; their inspiration is not.”

Hence, the mere attempt to improve money is rebuked because all previous attempts have failed to come up with anything better than the paper mill that is today’s financial system. Skidelsky dismisses Bitcoin as merely the latest attempt to use new technology “to stop money from going bad.”

Let’s take a look at some examples of the erroneous statements made by the emeritus of political economy.

Lie 1: It’s Created Out of Nothing

Paradoxically, although it is created out of nothing, it will offer no possibility of money ‘creation.’

First, bitcoins aren’t created out of “nothing.” Second, since it’s already being accepted as a medium of exchange in many places online and across the globe for goods or services, then it’s de facto money. 

A Washington County is Taking Steps to Halt Illegal Cryptocurrency Mining

Furthermore, energy, coding skills, resources, and time spent on software and hardware development and production are just some of the components required to run and maintain the Bitcoin network. It is also underpinned by a globally distributed network of users who all agree to play by the rules of the network for their own benefit.

The more users in this network, the greater the value of Bitcoin will become, according to Metcalfe’s law

Lie 2: No Elasticity

Bitcoin will be ‘mined’ in diminishing quantities until it is exhausted in 2040, having delivered 21 million digital coins. In other words, there is no elasticity in the currency… [T]he currency will run into the same problem as the gold standard: not providing enough money to support a growing economy and population.

First, Skidelsky is off by a century as the last bitcoin will be mined in 2140, though most will enter the supply by 2030.

Second, the problem was never with gold itself but the debasement of gold and thus the distortion of value. For example, most scholars believe it was the “clipping” of gold coins that was largely responsible for the fall of the Roman Empire. The publicly verifiable and immutable ledger of bitcoin ensures that this monetary network can’t be tampered with, unlike with fiat. 

Third, unlike gold, a bitcoin is merely the name of a digital unit (whose value is determined by the market). This makes it highly divisible. In fact, the smallest possible unit is one hundred millionth of a single bitcoin (0.00000001 BTC) — called a ‘satoshi’— making it possible to send tiny fractions of a penny at current market prices. This can’t be done even with digital fiat today, let alone physical cash or metal coins.

This, in fact, makes Bitcoin the most elastic form of money ever created as the 21 billion digital units equal to roughly 2,099,999,997,690,000 (over 2 quadrillion) satoshis according to the calculations presented here. What’s more, new layer-2 applications built on top of the Bitcoin blockchain, such as the Lightning Network, will enable the ability to send even smaller amounts off-chain.

Lie 3: Deflation Will Lead to ‘Hoarding’

This [lack of money supply] would be exacerbated by any tendency to hoard bitcoins.

Hoarding is a pejorative term for saving. If there is no saving, then there is no capital. And there can be no capitalism without capital.  

The “deflationary death spiral” argument against sound money is an overblown theory perpetuated by Keynesian economists, which is refuted here.

In fact, some argue that saving actually leads to greater consumption in the long-run. Saifedean Ammous explains this concept in his book, The Bitcoin Standard, stating:

A society which constantly defers consumption will actually end up being a society that consumes more in the long-run than a low savings society, since the low time-preference society invests more, thus producing more income for its members. Even with a larger percentage of their income going to savings, the low time-preference societies will end up having higher levels of consumption in the long-run, as well as a larger capital stock.

You can also read more about the advantages of having a capped supply in a new report from BitMex Research here.

Lie 4: Inflation

Cryptocurrencies provide no security against inflation.

Skidelsky doesn’t specify which inflation he’s actually referring to – monetary supply inflation vs. price inflation. Though the two are correlated, the latter is an integral feature of fiat currencies whose value is guaranteed to depreciate over time as more money is printed.

inflation versus deflation

Sooner or later, the incentive for governments and central banks to print more money becomes irresistible to the detriment of the population. Inflation is also sometimes referred to as a “hidden tax” that is much easier to impose on citizens as opposed to direct taxation. 

On the other hand, Bitcoin’s monetary supply is not only controlled but is fully transparent and known to all. Even the gold supply cannot be as accurately predicted. Whereas the 21 million digital units that will ever exist are a key property of the Bitcoin protocol that cements its digital scarcity.

Put differently, the millions of people around the world who use Bitcoin today know the supply is capped, which results in more accurate price discovery for goods and services. It is also important to note that people who use bitcoin are doing so voluntarily to store their wealth and move their money.

Bitcoin Is a Revolutionary Idea

With the advent of cryptocurrencies, for the first time in history, humans now have the option to choose their money. This is nothing short of revolutionary since throughout history there was always some central authority, be it the state, the church, or a banking cartel, maintaining a monopoly over money by decree, and ultimately, by force.

Bitcoin is a revolutionary idea

Comparatively, it is fiat currencies that provide no security against inflation. In fact, fiat currency supply is specifically designed to grow indefinitely as emission rate is controlled by a handful of unelected bankers through the artificial setting of interest rates.

Rubber will meet the road as more people realize they can now opt out of this system by buying Bitcoin. The good news is that people now have a choice between trusting bankers or a voluntary decentralized monetary network with no one in charge.

What other myths have you heard about Bitcoin? Share them below! 


Images courtesy of Shutterstock, Pexels, Bitcoinist Archives

Disclaimer: The views and opinions expressed in this article are solely those of the author and do not necessarily reflect those of Bitcoinist.com. Claims made in this article do not constitute investment advice and should not be taken as such.

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Úno 25

NEO vs. Bitcoin – Key Similarities & Differences

· February 25, 2018 · 9:00 am

NEO and bitcoin are two cryptocurrencies which have risen to prominence since their inceptions. These coins possess some similarities, however, they also possess a number of important differences. Here is a closer look at the key similarities and differences between NEO and bitcoin.


Similarities

Popularity – Both NEO and Bitcoin are extremely popular. That is why both coins are in the top ten coins by overall market cap as of February 12th, 2018. NEO and bitcoin are joined in the top ten coins by ethereum, ripple, bitcoin cash, cardano, litecoin, stellar, eos, and iota. All of the coins in the top ten have developed strong support from cryptocurrency users.

Exponential growth – NEO and bitcoin have both seen periods of exponential growth. 2017, in particular, was a year that was tremendous growth for both cryptocurrencies. In 2017, bitcoin rose from having a price of around $1,000 per coin to having a price of almost $20,000 per coin in December 2017. NEO rose from having a price of just a few cents in 2017 to having a price of over $100 by the start of 2018. 2017 was a very strong year for both coins, and in fact, both NEO and bitcoin were some of the best investments that anyone could have made in 2017.

Limited quantity – There are only a certain amount of coins for both the NEO and bitcoin cryptocurrencies. For NEO, the limit is 100 million coins. For bitcoin, the limit is 21 million coins. So, there is a finite amount of both coins. This means that if more people become interested in cryptocurrencies, this scarcity could drive up the price for both coins significantly higher than their prices already are in early 2018.

Differences

Age – Although the entire cryptocurrency industry is new, bitcoin is significantly older than NEO, relatively speaking. Bitcoin was created in 2009, whereas NEO was created in 2014. Because of the fact that bitcoin was created five years before NEO was, it had a five-year head start over NEO and many other cryptocurrencies. This helped it benefit from the first-mover advantage, and to gain market share before many competitors even existed.

Overall market cap size – Despite the fact that both cryptocurrencies are in the top 10 for overall market cap size, bitcoin’s market cap is much larger than NEO’s. As of February 12th, 2018, the market cap for bitcoin is $149,160,858,393. The market cap for NEO on the same date is $7,318,805,000. This is a difference of more than $140 billion.

Creators – The creators of NEO are known. NEO was created by two Chinese developers: DA Hongfei and Erik Zhang. The creator of bitcoin is a complete mystery. This is because the person (or group of people) who created bitcoin used an alias. This alias is Satoshi Nakamoto. There have been many guesses as to who Satoshi Nakamoto might be. Some people speculated that it was Elon Musk, founder of Tesla, PayPal, and other major corporations. However, Musk has denied these claims, and the mystery of bitcoin’s creator lives on.

Function – Since 2009, when it was created, bitcoin has slowly become positioned as a long-term store of value, and a type of “digital gold.” It is the king of cryptocurrencies and it is the mark by which many other cryptocurrencies are judged. NEO, on the other hand, is designed to be both a cryptocurrency and as a platform for facilitating smart contracts and decentralized apps, or DApps. Technically, smart contracts can be facilitated with bitcoin, however, bitcoin is not known as the go-to platform for such contracts. NEO and ethereum have taken this role primarily.

Conclusion

NEO and bitcoin are similar in that they are both popular, have experienced exponential growth at times, and have a limited quantity. They are different in terms of age, overall market cap size, creators, and function. However, despite their differences, both NEO and bitcoin saw tremendous gains in 2017, and could potentially see them again in 2018.

If you are interested in investing in or trading NEO, bitcoin, or other cryptocurrencies, you can do so on the eToro platform. Etoro is the world’s social trading network. With eToro, you can not only invest in and trade cryptocurrencies, but you can also copy the moves of top traders. This can be extremely beneficial.

What is your outlook for NEO vs. Bitcoin? Let us know in the comments below!


Images courtesy of eToro, Shutterstock

Bitcoinist does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. Readers should do their own research before taking any actions related to the company.

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Zář 15

2017 Blockchain Global Summit – Shape The Future

· September 14, 2017 · 8:00 pm

The BitKan “2017 Shape the Future” Blockchain global summit has changed its location, it will now be held in Hong Kong instead of Beijing and will take place later this month on September the 20th and 21st. Tickets for the event are still available to purchase.


BitKan has changed the location of their “2017  Shape The Future“summit from Beijing to Hong Kong, where it will now be held in the Grand Hyatt Hotel where it will run from September the 20th until the 21st. Tickets start at 1888 RMB. Anyone with tickets to the Beijing event will still be entitled to use them in Hong Kong.

BitKan ,founded in 2012, have seen the development of the Chinese Bitcoin industry since the coins early days. After 5 years of growth they now have a global user base numbering in the millions. They provide useful digital currency news, OTC trading, Bitcoin wallets, mining pool monitoring and more. The company is devoted to promoting the concept of Bitcoin and the block chain within the mass media.

The “Shape the Future” Global Summit




The event will provide a platform for guests and companies to introduce the latest Bitcoin technology and products associated with Bitcoin as well as bringing their individual vision of a Bitcoin future. BitKan state that they will have over 80 guests from top tier companies, with an audience of 800 including over 200 key influencers in the media world.  Speakers include Bitmain CEO Jihan Wu, the CEO of bitcoin.com Roger Ver, John McAfee and CEO of Huobi Lin Li. The schedule has day one labelled as “Shape The Future Summit”, with day two labelled as “Blockchain Tech Sessions”. For a full, up to date line up of the guest speakers, see the Bitkan website.

The Bitcoin Documentary

The event will also see a screening of the Bitcoin “Shape the Future” documentary which witnesses the history of BTC in China. Starting from Satoshi Nakamoto’s paper in 2008, it will chart how BTC has evolved into a 40 billion USD digital asset. It will focus on what has happened over the last 9 years of Bitcoin development and the role that China has played within the BTC industry.

Have you got your tickets? What do you think of the lineup? Let us know in the comments below?


Images courtesy of BitKan, Shape the Future




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Čvc 28

HODLing Bitcoin? Got an Email Address? Here are 3 More Ways to Get Free Money

· July 28, 2017 · 4:45 pm

A few days ago, we showed you how to grab some extra cryptocurrencies for free by simply holding Bitcoin. Today, we’re going to show you that you can do so not only by holding Bitcoin but also by simply having an email address.


Previously, we explained how you could claim free lumens from Stellar and bytes from Byteball. Those are just two methods of getting free money. This time, we’re bringing you three ways!

Free Money? Tell me more!

Free ICO Tokens Just for Signing Up

Currently, two upcoming Initial Coin Offerings are distributing free tokens to users that sign up for their platform. Although this is usually a practice used by pyramid schemes or multi-level marketing schemes, in this case, there doesn’t seem to be any danger involved at all.

Digital Currency Exchange

WCX is a platform with an upcoming ICO and it brands itself as being a “Global Low-Cost Digital Currency Exchange” that aims to “offer a pro experience and 10x lower fees”. WCX is an interesting concept – users will be rewarded with 50 WCX tokens – roughly $5 USD – when they sign up. Although this platform doesn’t have a whitepaper yet, the most interesting part about the project is that they plan to distribute part of their fee profits as dividends to WCX token holders, so why not hodl on and see what happens?

Coin Starter logo

Coinstarter is a platform which aims to be the Kickstarter for ICOs and crowdfunding campaigns related to cryptocurrency. Ironically, they haven’t even launched – they’re planning their ICO soon. They will reward you with 50 Coinstarter Tokens (technically equivalent to 0.0625 BTC, or $168!) if you simply sign up for the platform. There is no need to invest any BTC or ETH to receive this bonus – it is virtually risk-free.

Altcoins That Give You Coins if You Hold Bitcoin

How to Get Your Free CLAMS

CLAM is an altcoin created back on May 12th, 2014. If you held any BTC/LTC/DOGE at that time, you’re in luck! CLAM had a unique distribution method: All BTC, LTC and DOGE addresses that held coins back on that date are entitled to 4.60545574 CLAM – which is equivalent to about 0.0065 BTC, or around 17 USD. The CLAM project explains their reasoning behind this as being:

Giveaways are notoriously susceptible to cheating and bias those who happen to hear of them. We DON’T like tit-for-tat arrangements.

Many intelligent people are aware that Bitcoin’s most valuable asset is the blockchain itself. The blockchain represents the combined efforts, commitment, and participation of the entire community. It is the revolution that sets cryptocurrency apart from other value systems. It is trust-less and wonderful. We DO like the trust-less blockchain.

So! We took the BTC, LTC, and DOGE blockchains, found every address with a balance above dust, and sent each and every one of them a little over 4.6 CLAMS. It isn’t perfect, but it includes everyone.

Despite this, please note that this method of claiming ‘free money’ does involve risk – even though their wallet is open source and their code has been deemed to be safe, you have to expose your private key, so it would be advisable to move your coins elsewhere before claiming the CLAMs.

All you have to do is download their wallet from here, and import your BTC/LTC/DOGE wallet.dat or private key.

Download the CLAM Wallet

That’s all there is to it to obtain your free money! If you received more than 4.6 CLAM, don’t be too surprised; remember that every address that held coins on the date above will receive this reward. This means that if you were using many addresses at the same time, you would probably receive a lot of CLAMs!

What do you think about these new methods of getting free money? Are you going to try them, or are you skeptical? Let us know your thoughts below!


Images courtesy of WCX, CoinStarter, the CLAM Project, iStockPhoto

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Kvě 18

Bitcoin is Still Illegal in These 6 Countries

· May 18, 2017 · 9:30 am

As the Bitcoin revolution continues to spread throughout the world, there are still some places where buying or using Bitcoin is illegal and can get you in trouble.


Bitcoin Still Illegal in Some Countries

As Bitcoin’s popularity continues to grow throughout the world, some governments are beginning to realize its benefits and potential and are integrating Bitcoin and cryptocurrencies in their economy, rather than trying to punish those that use it with restrictive policies and exaggerated taxes.

Japan, for example, has recently passed a law that makes Bitcoin a legal form of online payment, removing taxes and setting up a regulatory framework for Bitcoin-based businesses. Australia has also taken a stance in favor of cryptocurrencies and removed the double-tax that was penalizing average Bitcoin users.

However, not all countries are as forward thinking especially when it comes to cryptocurrencies. Believe it or not, Bitcoin is still illegal in some countries, which says a lot about Bitcoin as a disruptive technology.

To be clear though, the world’s first decentralized cryptocurrency is not illegal because it poses any risk to the citizens of the countries we will list. Rather, it provides an alternative, open, P2P monetary system — and an exit for some  — which is seen as a threat to their centrally-controlled, legacy monetary system.

All of the countries listed below banned Bitcoin in 2014, following the Mt. Gox disaster. As Bitcoin begins to gain traction throughout the world, it’s possible that these countries may eventually change their stance on Bitcoin and digital currencies.

Vietnam

Although Bitcoin can be freely used by citizens, the State Bank of Vietnam issued a statement in February 2014 warning against the use of Bitcoin and prohibiting credit institutions to deal with the cryptocurrency.

The statement reads:

All bitcoin exchanges that allow users to trade anonymously, therefore, can be used to launder dirty money, sell drugs, hide from paying taxes, exchange and pay for illegal activities.

In December 2016, the government of Vietnam stated that it will consolidate cryptocurrency regulations as its current provisions “fall short.”

Iceland

Bitcoin’s legality in Iceland is not very clear. According to a statement issued in March 2014 by the Central Bank of Iceland, dealing with Bitcoin may violate the Icelandic Foreign Exchange Act, which specifies that Icelandic currency cannot leave the country and that foreign currency cannot be used in the country.

iceland

Bitcoin mining is legal in the country and so is transacting with Bitcoin, but apparently if those Bitcoins cannot be purchased from a foreign exchange or have to be mined in Iceland. This leaves a lot of room for questions. The statement reads:

There is no authorization to purchase foreign currency from financial institutions in Iceland or to transfer foreign currency across borders on the basis of transactions with virtual currency. For this reason alone, transactions with virtual currency are subject to restrictions in Iceland.

Bolivia

In May 2014, the country’s central bank, El Banco Central de Bolivia, officially banned any and all currencies not issued and/or regulated by the government, specifying Bitcoin, a few other altcoins and any other currencies that do not belong to a state or economic zone.

The statement reads:

It is illegal to use any kind of currency that is not issued and controlled by a government or an authorized entity.

Ecuador

Ecuador not only banned Bitcoin and all other cryptocurrencies, but it did so while establishing guidelines for the creation of their own virtual currency.

The National Assembly of Ecuador passed a bill that amends the country’s monetary laws in July 2014, banning cryptocurrencies and allowing the government to issue and transact in its asset-backed “electronic money.”

Kyrgyzstan

In Kyrgyzstan, using Bitcoin as a form of payment is illegal, although no law prohibits users from buying, selling and using. In August 2014, the National Bank of the Kyrgyz Republic, issued a statement in which it noted that the use of Bitcoin and other cryptos as a form of payment is illegal given that the only legal tender in the country is the country’s Kyrgystani Som (KGS).

The statement reads:

Under the legislation of the Kyrgyz Republic, the sole legal tender on the territory of our country is the national currency of Kyrgyzstan som. The use of ‘virtual currency’, bitcoins, in particular, as a means of payment in the Kyrgyz Republic, will be a violation of the law of our state.

Bangladesh

Bitcoin is not legal in Bangladesh. Transacting with any type of decentralized cryptocurrency can get you up to 12 years in jail and it has been so for almost three years.

In September 2014, the Bangladesh Bank issued a statement regarding the use of Bitcoin and warning that it is punishable by law. Bank officials said that anyone found guilty of dealing with Bitcoin or any other cryptocurrency could be jailed for up to 12 years under current anti-money laundering laws. The central bank went as far as to request citizens not to “spread information about it.”

The statement reads:

Bitcoin is not a legal tender of any country. Any transaction through bitcoin or any other cryptocurrency is a punishable offense.

Do you believe these countries will change their stance on Bitcoin and build a regulatory framework around it? Let us know in the comments.


Images courtesy of Shutterstock

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Dub 13

Why National Cryptocurrencies Will Never Beat Bitcoin

· April 13, 2017 · 2:00 pm

National cryptocurrencies will never be able to compete with Bitcoin because no one will trust a system that requires advance permission from and which is controlled by a government to use it. 

[Note: This is an op-ed, edited by Allen Scott] 


National Cryptocurrencies Will Never Be Global

News is just in that the mint of a very important, historic sovereign nation has just hired a company in a separate nation to help it launch its own “Blockchain not Bitcoin” attempt to ride the Bitcoin wave. This is extraordinary in several ways, and allows a general principle to be explored.

First off, this mint doesn’t understand how Bitcoin works. That is clear. They’ve made the common error of believing what computer illiterates in well regarded newspapers mistakenly repeat verbatim about Bitcoin; that you can have “Blockchain without Bitcoin”. And this is only the first of their many errors in this project.

Even if their technical and economic assumptions were correct, there is no way that their private money system can beat the market. The Russians and the Chinese will never accept domination of a global e-money by a single foreign nation coded by a second party.

They will at a minimum, launch their own central bank altcoin, or more likely, settle on Bitcoin as the civilized global standard. These people have made the fundamental error of thinking that they can beat the market. It is the same error the Americans made thinking that everyone would use CDMA instead of GSM.

This new money will never be international. No one will trust a system that requires advance permission from and which is controlled by a government to use it, that can exclude any actor based on arbitrary rules of a hostile government when Bitcoin is available. There is no logical reason to trust anyone when Bitcoin exists; any system that is tainted by the requirement of trust is inferior to Bitcoin, and will make rational actors choose Bitcoin over those other, broken systems every time.

There are other problems with this new project, some of which will be of concern to the State. With a software simulation of money, the company providing the service is the mint, with absolute control over the money and its operation, not the mint.

In order to be the mint, you must directly control the levers of the machinery, you cannot outsource that control to other men, and certainly never to men from a foreign country; these foreigners de facto control everything if no one in the mint can understand how anything works. They seem to have forgotten what the word “Sovereign” means.

If you’re going to outsource the creation of a new e-money, and cede control over its development to foreigners, why not go all the way and give it to the global experts: Bitcoin Core?

You get all the benefits of the hundreds of developers working on Bitcoin, and access to the global Bitcoin network, its first mover advantage, huge ecosystem and its network effects. You are already willing to give up control, so you may as well give it up for something and not for nothing.

Outsourcing Sovereignty?

This is another example of the global Computer Literacy Crisis, where the ‘aparatchicks’ don’t understand how anything works, and are rendered helpless, delegating all responsibility to software developers who are now one of the top global powers on Earth as a class.

We saw this with government departments around the globe accepting Microsoft Windows as “the standard” for decades, with the late realization that this gives control (and back-door NSA espionage access) to a foreign company. Much better to use Linux that belongs to no one, is transparent and infinitely more secure and controllable. Just like Bitcoin.

For 7 years I’ve been talking about the book “Good Money” by George Selgin:

If you are interested in Bitcoin and why “private Blockchain” is junk, you should read this book. What is fascinating about this news of a sovereign mint hiring a foreign company to create a system for them is that the private money vs State money is turned on its head in the Bitcoin era.

In the 1700s, button makers switched to minting coins for private use, because the Royal Mint couldn’t supply the demand for small change. Now, government mints are turning to bespoke “Blockchain not Bitcoin Tokens” while Bitcoin becomes the sovereign money of the world.

The picture is entirely reversed; the state is minting private money to fill an (imaginary) need while Bitcoin is the money everyone uses but has trouble getting a hold of. Azteco is a service that aims to solve that problem.

Like many projects with no hope of traction because they are fundamentally flawed, this new platform has put its software up on GitHub, hoping to attract developers to work on it for free. This will not happen.

Bitcoin Devs Won’t Waste Time With Other Blockchains

First of all, the number of developers with the skill to hack cryptocurrencies in C is extremely small, and all of them are working on Bitcoin. They’re all doing so mostly without compensation, for the good of society, just like Linux kernel developers do. There is no way you are going to persuade these ethical men to stop working on Bitcoin and to devote that time to a bogus “permissioned ledger” project run by a company on behalf of a nation state.

Bitcoin devs simply aren’t going to split their limited time between projects like Corda or any anti-Bitcoin project. And of course, Corda has conceded defeat and given up on “making blockchains programmable” and other fanciful hand-waving nonsense.

“GitHub Open Source” isn’t a magic wand that will cause men to flock to your repo and software to be written for you for nothing, and no, you can’t hire developers to do this work either; there are none available.

Developers at this skill, experience and knowledge level are an extremely rare breed, and they are all working on Bitcoin, and will never contract to work on unethical software, for any amount of money.

Every year the State wastes time on vanity projects they can’t even understand, Bitcoin grows, spreads and strengthens. The number of new, fundamental features coming to Bitcoin is not matched by any other project, and how these will synergise is anyone’s guess.

(From The Elements Project, new features coming to Bitcoin https://elementsproject.org/elements/ SegWit will activate, on Litecoin first and then Bitcoin. Then everything will change.)

Every software project has a use case. The developers are eager to make their case so they can gain users. When they won’t make the case clearly, something is very wrong. There is no use case for a sovereign nation to launch its own altcoin that is inferior to Bitcoin.

Its like launching a new mobile phone network standard; no manufacturer is going to incorporate another set of protocols, chips, transceiver and antennae into its phone to accommodate you, and yet, this is exactly what these people believe they can do with Bitcoin. All rational nation State actors are now running to embrace and profit from the inevitable domination by Bitcoin and not betting against it.

We can be sure of this. No “permissioned,” “BlockChain,” alt-coin reality denying project launched by a Nation State that has outsourced development of its software to a private company in a foreign land can ever hope to outperform Bitcoin on any level.

Incredibly, the lessons of the doomed and fundamentally flawed Canadian “Mint Chip” have not been learned yet. This is a good thing, believe it or not. The longer Bitcoin’s enemies think they can reinvent the wheel and beat Bitcoin, the better it is for Bitcoin. By the time they figure all of this out, it will be too late. In fact, it already is too late.

KYC/AML is Dying

There has been some very good news on the Bitcoin perception front. Another judge, this time in of all jurisdictions, New York, has ruled that Bitcoin is not Money.

[…] a federal judge in New York has recommended that money-laundering charges be dropped in a local case, based on his determination that Bitcoin doesn’t qualify as money. Instead, U.S. Magistrate Judge Hugh B. Scott has opined that Bitcoin more closely resembles a commodity. While he noted that Bitcoin might one day become so acceptable that it could be considered as money, Scott suggested that it currently has more in common with collectibles – like trading cards and other novelty items.

I wrote about this several times previously.

Any business in Bitcoin, if it is run by competent men, should now destroy their “compliance” data and stop all KYC/AML work immediately. They can rely on these two judgements as pretext, and if any prosecutor or three letter agency wants to take them to court, they should accept the challenge, because they will win.

Coinbase, for example, has been asked for a database dump of all their customers who transferred Bitcoin from 2013 to 2015. They are going to fight this in court, and it may cost them millions to defend this outrageous attack.

Instead of going to court to defend handing over customer data, Coinbase should permanently destroy the data, and fight in court to prove Bitcoin is not money, and not subject to any law any more than Linden Labs “Linden Dollars” are.

Doing this, they will forever be unable to hand over data they don’t have, and will not be asked for it again. They will streamline their service, and increase their profitability. Or burn rate. Either way, the way out of their current problems is to embrace these two judgements and amplify them so that the entire industry is both protected and relieved of onerous administrative burdens simultaneously.

Stopping KYC/AML will increase on ramp speeds, increase profits, increase Bitcoin throughput and midwife “The Transformation”. You are already in a fight with the State, who are using your own data against you; data that you did not have to collect in the first place, that you volunteered to collect, expecting a pat on the head.

Doing this will also turn you from an unethical company into an ethical one. Its a no brainer.

For the Lulz

Finally, for some lulz. People love predicting the collapse of things. Its like a perverted spectator sport, where you’re betting on which gladiator is going to die first. Y2K hysteria Twitter and even the internet have been predicted to “collapse” and these predictions failed.

We all remember Clifford Stoll. No surprise then, when people pop up to predict that Bitcoin will have a “complete and total collapse” for no given reason whatsoever.

What we can see emerging is the fact that the vast majority of men have reached their intellectual limit in 2017. Most of the things are incomprehensible to them. Bitcoin is one of those most things. As time goes on, this problem is going to get much worse. Its like the familiar tale of Artificial Intelligence making new versions of itself that man has no capacity to understand.

The problem isn’t that people don’t understand new technology. This has always been true since man started forging steel, and of course, everyone is entitled to their own opinion. The problem is that these ignorant people insist on forcing other people who do understand the new tools, to conform to their mistaken ideas of how they should work with them and present it to the market.

Bitcoin has been suffering this for a few years now, but with the recent court decisions, Japanese “Legitimization” (remember when everyone kept saying “legitimacy” is what Bitcoin needs? Now its “adoption” and “scale”) and increase market penetration through great services like Local Bitcoins, it is now clear that Bitcoin will win. No matter what you want.

Lastly…

Finally, some good news. Samson Mow, notorious milliner, Bitcoin thinker, expert analyst, conference organizer, East West bridger, Ubisoft expander, organizer of the “Scaling Bitcoin” event and meme manipulator extraordinary, has just been hired by Blockstream.

Normally hirings of this sort would not be worth comment, but this one is given what is under discussion in this piece. Some were calling for this very useful man to be fired over his very amusing tweets and totally accurate analysis. This is not good thinking.

Because people conflated Bitcoin with money, there is an underlying assumption that the men involved in Bitcoin must emulate the behavior of stuffy, stiff, humorless bankers. Nothing could be further from the truth.

We know that Bitcoin is not money and in properly designed businesses, no one needs to be trusted; Bitcoin itself is the infallible guarantor. All the social signals that men used to use to assess trust (ties, logos, and all the trappings of banking) have been replaced with software. This leaves people behind the levers to “let it all hang out” and be totally honest, because the software is what you trust, not the men who wrote it. This is another benefit of Bitcoin, that is slowly starting to emerge.

The people stuck in the 20th Century are the same ones who never encrypted their email and think that Bitcoin is for buying Starbucks on chain. They’re the ones doing the speech policing, and calling internet culture “toxic.”

Samson Mow being hired is an explicit rejection of these wrong ideas; he is being hired because he merits the job, and nothing else. Bitcoin is not about illusions, it is about MATHEMATICAL FACTS.

[Full disclosure: The author of this piece is the founder of Azteco]

Do you agree with this assessment of Bitcoin? Share your thoughts below! 


Images courtesy of elementsproject.org, Twitter, Shutterstock 

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Dub 12

‘The Blockchain and Us’: A New Documentary on Bitcoin Tech Changing the World

· April 12, 2017 · 7:00 am

A new documentary film called The Blockchain and Us was released last week exploring how Blockchain technology can change the world in a meaningful way.


Documentary: ‘The Blockchain and Us’

A documentary film dubbed “The Blockchain and Us” by Manuel Stagars has been released last week. The 8-part documentary focuses on what blockchain technology is and the social and economic impact it can have in the world, if its potential is successfully harnessed.

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The preview description reads:

Economist and filmmaker Manuel Stagars portrays this exciting technology in interviews with software developers, cryptologists, researchers, entrepreneurs, consultants, VCs, authors, politicians, and futurists from the United States, Canada, Switzerland, the UK, and Australia.

The 30-minute long documentary features cuts from several interviews with industry leaders like Christian Decker from Blockstream, Perianne Boring Founder & President at the Chamber of Digital Commerce, Taylor Gerring Co-Founder at Ethereum, Matthew Roszak Co-Founder & Chairman of Bloq, and many more.

The documentary does not focus on the technical aspects of blockchain technology and should not be viewed as an introductory video. Instead, the film seeks to give a high-level view of the blockchain “far from hype” and “starts a conversation about its wider implications” in several aspects of our society.

Chapter 1: First Contact With The Blockchain

In the first segment, the interviewees describe their first contact with blockchain technology. An experience that has changed many lives but usually starts off with a pinch of disbelief. Most people were quick to dismiss Bitcoin and the blockchain once they run into it for the first time, but many return to it after understanding how it works and the potential it has to change the world.

Matthew Roszak Co-Founder & Chairman of Bloq, shared his experience:

I did what most people do the first moment they are exposed to Bitcoin. I discounted it. I thought this was silly internet money, you could mine it, it’s like a golden goose and it took me about an year to really re-explore the technology…

Chapter 2: Blockchain Technology

Here, the documentary delves into a high-level explanation of what blockchain technology is and what makes it tick, and what we can do with it.

Image result for R. Jesse McWaters

R. Jesse McWaters Financial Innovation Lead at the World Economic Forum, explained:

You have the ability to create records that are indelible. You have the ability to transfer value by making updates to those records. And you have the ability to automate updates to the records through these things called smart contracts. That means potentially that you could transform the structure of financial services.

Chapter 3: Influence Of The Blockchain

This chapter focuses on how blockchain technology can influence various industries and aspects of our society like financial inclusion, identity, and IoT.

Image result for Rik Willard

Rik Willard, Founder & Managing Director at Agentic Group, said:

As the blockchain became more influential in our thinking we began to realize that it was a profound shift in how the Internet could be used to create new forms of value and how it could be used to enfranchise and include people in global finance.

Chapter 4: New Business Opportunities

Chapter 4 talks about the infrastructure that is being built around blockchain technology, the business opportunities that arise from it and how traditional industries are dealing with and adapting to this disruptive new technology.

Image result for Paul Meeusen

Paul Meeusen, Head Finance and Treasury Services at Swiss Re, stated:

We are all, also in the financial services industry trying to recognize that we don’t have to be defensive but we rather have to embrace not just this technology but this enabler that it brings us to access a vastly underutilized or undiscovered market that we have to do business with on an eye-to-eye level.

Chapter 5: The Blockchain and Banks

This segment explores how big financial institutions will implement blockchain technology through slow upgrade processes and how some of these institutions are reluctant to accept this technological shift, while others are actively researching and testing the technology to stay ahead of the curve.

Image result for Caitlin Long

Caitlin Long, Chairman of the Board & President at Symbiont.io, explained:

I know how big financial institutions work. They’re not going to do something reckless with technology. This is people’s money and livelihood they’re working with.These are slow upgrade processes. These systems, once they get implemented, will run in parallel with the old systems for a while before you have a switch over to the new one. That’s standard in technology upgrade.  knew this was going to take time. But there are antagonists, players who are threatened. It’s the AT&T/Verizon/Kodak analogy again. Their business model is threatened by this and they’re going to do things to slow down and water down the transformational networks. There is a game theory approach to how the technology is being rolled out in the markets, for sure.

Chapter 6: The Blockchain And Financial Inclusion

An estimated 74% of the world population (according to the World Bank) do not have access to basic financial services provided by Banks. Chapter 6 explores how Blockchain technology can drastically change the financial inclusion landscape and allow people to interact with the world economy in a much more meaningful way than micro-finance institutions and other alternatives.

Eric Van der Kleij, Founder OF Adeptra, London Tech City, Level39 and adviser to the UKGovernment expressed his opinion on the subject:

I don’t like to think that we’re creating so much prosperity for the less than one percent. I like to think of purpose-led businesses. By the way, that’s the trick, I think, for large corporations: to understand that the cost/efficiency of embracing this new technology will potentially widen their accessible markets at a cost, that’s reasonable. That in itself will create prosperity in different areas. Something that we should think about.

Chapter 7: The Real Revolution

Blockchain technology can be considered the fourth technological revolution. With it come the same concerns, which is the loss of jobs due to automation. Blockchain technology has the power to cut out institutions that act as intermediaries or “middlemen”, including banks themselves.

This chapter delves into this concern and how various people perceive it. Dolfi Müller, Mayor of the City of Zug stated:

It’s called the ‘fourth technological revolution’ and I think we are at the beginning of such a revolution just now. That’s why we don’t close our eyes. Some people say ‘There will be much trouble, people will lose their work,’ and so on. I’m sure it will happen but it’s better we face it than deny it.

Chapter 8: The Blockchain and Us

In the eighth and final chapter of the Blockchain and Us documentary, interviewees express their thoughts on how blockchain technology can be implemented on a larger scale and how it can affect our lives. From an idea to a full-scale revolution, blockchain technology is here to stay and has the potential to change the world in a meaningful way.

Guido Rudolphi, Founder of Cryptocash:

Everything will change. In my opinion, the possibilities are endless.

The documentary can be seen here.

Full interviews can be seen here.

Do you think Blockchain can truly change the world for the better? Share your thoughts below!


Images courtesy of Angel.co, Linkedin, Blockchain-newyork.com, Caitlin-long.com, Twitter, Shutterstock

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Bře 26

7 Ways Criminals Can Steal Your Bitcoins

· March 26, 2017 · 3:00 am

Cybercriminals are becoming more sophisticated. We have compiled a list of  7 ways criminals can steal your Bitcoins and how you can protect yourself from them.


Top 7 Threats to You Bitcoin

One of the defining aspects of Bitcoin is that it puts you in charge of your own finances. No one but you will dictate where you can spend your money or who to send it to. There is no censorship, there is only complete financial freedom. But freedom comes at a cost. If you lose your Bitcoins, send them somewhere by accident or if they’re stolen, there is no entity that will return them to you, they are lost for good.

This is one of the reasons why Bitcoin has become a hub for all types of scams and cons. Cyber criminals are now becoming more sophisticated and finding new ways of stealing your hard-earned bits out from under your nose. Long-time users have seen their fair share of scams and are usually not drawn to them, but new users may be easily fooled by the prospect of making an easy profit.

Bitcoinist_Security Vulnerabilities

This is a huge problem for Bitcoin. Although variations of the same scams also exist with national currencies, these have a certain trust factor that is provided by the government that issues them. No one will stop using a national currency like the US Dollar just because they were scammed out of their dollars. With Bitcoin, however, users may feel like the fault is in the network and distance themselves from it. 

Bitcoinist has compiled a list of the most common methods cybercriminals use to steal your Bitcoins. If you’re getting started with Bitcoin, then this article may save you some money and heartache.

Ransomware

We’re going to start off with what can be considered one of the most profitable practices for cyber criminals, ransomware. Ransomware is not new, but Bitcoin has made it popular among hackers due to its efficiency as a decentralized payment system.

So, what is Ransomware? Ransomware is basically a virus that will encrypt all (or part of) your files. The program will then give you the option of paying a certain amount of money in order for the files to be decrypted. This type of malware has become highly popular due to its effectiveness and could even leave Vegas with you.

hackers-hacking-hacks

Hackers will usually target companies or organizations that cannot afford to be unavailable to their customers, ensuring a high success rate for the cyber criminals. 

However, anyone can fall victim to ransomware and individual users may be more vulnerable to them as they will often lack the tools or knowledge to try to decrypt their files on their own. Remember to always backup your important files and not to open or download any suspicious file. Having a good antivirus program in place is also advised.

Fake Wallets

This method is much less popular but has successfully scammed unknowing users out of their coins. Fake wallets are basically apps that initially look like a real wallet until it has the chance to steal your coins. These fake wallets are usually endorsed as being another legitimate wallet, often using the real wallet’s logo and name to fool users. They are basically like phishing (which we’ll also talk about) for wallets instead of websites or emails.

Bitcoinist coin wallet

Some fake wallets have even appeared on Apple’s App Store after successfully slipping through its vetting process. These misleading apps give both the real wallet and Bitcoin itself a bad name. Users can avoid this by downloading only from trustworthy sources like the wallet’s website and by confirming the name of the apps closely before downloading them. If you’re unsure, you can always ask the community on Reddit, Bitcointalk, and so forth.

Bitcoin Phishing

Phishing is basically a means of extracting sensitive information from victims. There are variations to the scheme but the most common ones are e-mails and fake websites. Scammers will try to trick the victim into giving them sensitive information regarding their Bitcoins like login details from an exchange or online wallet.

They will often do this by sending an email from an email address that looks official or by buying a domain name that is almost identical to the real website. An example of this would be the fake blocklchain[.]info.

Ponzi Schemes

Yes, Bitcoin and other cryptocurrencies are riddled with popular Ponzi schemes also known as pyramid schemes. These involve getting people to invest money and inviting more people to invest money, thus creating the pyramid effect. The new money is used to repay old investments and “the wheel keeps turning” until it can turn no more.

Pyramid / Ponzi Scheme

At a certain point, the scammers will walk away with everyone’s money. The best time to leave is usually accessed by the amount of money that the cybercriminals are currently holding and by the reputation the website has earned so far.

These schemes come in all shapes and sizes but they all have one thing in common, they want your coins and promise high returns for them. Two of the most popular disguises for these schemes are cloud mining websites that offer unrealistic returns and websites that claim to be employing some sort of automated trading algorithm to earn money on every trade.

To avoid being tricked by these, simply stay away from websites that seem to have unrealistic returns like 1% per day or 100% per month and so on. Avoid any vague business model that doesn’t really explain how the company makes profit and only trust websites after doing intensive research. There are ways of earning interest on your bitcoin like margin or p2p loans, but these will never yield as much as promised by pyramid schemes.

Fake Cryptocurrencies

There are some scams like this out there, the most famous of which is Onecoin. This scheme works by convincing victims that they are buying units of a successful cryptocurrency when they are in fact just paying for numbers to show up on a website. There is no actual Onecoin blockchain or network of miners.

onecoin

Fake cryptocurrency schemes will often sell coins in the form of educational packages or mining spots and they will also offer nonsensical promotions like splitting coins to double them. Although it sounds ridiculous, many users have fallen victim to this scam and some have lost entire life savings to it.

If you’re looking for a cryptocurrency to invest in, choose wisely and don’t be swayed with “developers” that promise the price of the coin will increase x times. A good rule to avoid these scams is to check if the coin exists on comparison websites like CryptoCompare or Coinmarketcap.

Scam ICOs

ICO, short for Initial Coin Offering, is a type of crowdfunding mechanism that is becoming increasingly popular within the blockchain space. The team behind a certain project will launch an ICO to sell tokens related to their project in exchange for Bitcoin, fiat or other cryptocurrencies. These tokens are usually equity based or they act like fuel to the platform, like Ether in the Ethereum platform.

Given the momentum that ICOs currently have, it’s no wonder that some cyber criminals are trying to trick investors with fake projects. Scam ICOs can be hosted by scam artists with no more than a convincing logo, website, fictional team and a few other tricks.

crowdfunding-for-events

Often times, the “company” will be able to gather considerable amounts of BTC without an actual product or nothing more than vaporware. A perfect example would be DeClouds, a scam that managed to steal 300 Bitcoins from unknowing investors who though they were investing in a cryptocurrency backed by precious metals.

Avoiding scam ICOs can be tricky and there are several things to look out for – Check out this guide on how to avoid scam ICOs.

Scammers on P2p Exchanges

These scams take place on peer-to-peer exchanges like LocalBitcoins and Paxful and they basically consist of people trying to rip you off during a currency exchange. These p2p exchanges allow users to trade coins directly between themselves using an external payment system like cash deposit, PayPal, credit cards and others. Unlike Bitcoin, these payment methods usually allow the user to dispute a transaction for various reasons.

Scammers will often use these markets to cash out hacked PayPal accounts or stolen credit cards in these markets. Some users will even use their real accounts but since most payment systems don’t offer seller protection for digital items, there isn’t much you can do in case of a chargeback.

This has created a market, where some users will sell Bitcoin for a considerable premium. However, users that do this have experience with these scams and have methods for verifying the buyer’s identity and so on.

To avoid this, only sell Bitcoin to established p2p traders and try to stay clear of chargeback-enabled payment methods like PayPal and Skrill. Remember that only those who control their private keys control their bitcoin. 

For a comprehensive list of fraudulent Bitcoin-related website, you can check out the Bad List here.

Are we missing any methods employed by cyber criminals? If so, let us know in the comment section.


Images courtesy of Shutterstock, AdobeStock

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