Kvě 24

University Students Choose One Dollar Over One Bitcoin

YouTube channel, Capital Creators, performed an experiment offering students the choice of one dollar or one bitcoin. The overwhelming majority chose the dollar.


So this is the part where I mercilessly mock the US education system and berate US students for being so dumb, right? Well actually, no. It would seem far more productive to address why the students valued the dollar more, and help them to make the right choice next time.

Reasons One Might Choose $1 Over 00

Well, actually around $5400 when the video was shot, but you get the idea. Why did the majority of CU Boulder students want a dollar rather than a bitcoin?

One of the most common answers given was that the dollar was there and physical, and the respondent knew the value of it. So did the students think the value of a bitcoin was less than a dollar? Surely the majority must have been aware of bitcoin when it hit $20,000 and mainstream media? Did they really think it had dropped to nothing?

In reality, those asked simply didn’t understand or know enough about Bitcoin to assign it a value. The mainstream media’s generally negative or non-existent coverage meant that Bitcoin just wasn’t on their radar anymore.

Bitcoin Is Risky, But A Dollar Gets Me A Snack

One respondent vaguely knew that bitcoin is password-protected, and forgetting the password would mean losing her bitcoin. However, she reasoned that she wasn’t going to lose a dollar… because of course, nobody’s ever lost a dollar.

Many people reasoned that a dollar could get them immediate gratification in the form of a snack from the vending machine. This point is hard to argue… except of course a bitcoin is worth eight thousand of these dollars!

But aside from this, it does suggest that the micro-payments use-case is an important one when it comes to mainstream adoption. The sooner we can all pay for carbonated sugary beverages and snacks with a user-friendly and stable implementation of Lightning Network payments, the better.

And The Ones Who Chose The Bitcoin

One guy who chose the bitcoin explained that it was because he “followed bitcoin.” However, he had no way of receiving it because “he’d have to set up the app,” and was of the belief that “no-one ever trades it.” So even someone who ‘follows’ bitcoin, one would imagine through specialist media like Bitcoinist, didn’t have a wallet on his phone.

Another guy was aware that the price was going back up, and chose the Bitcoin. He had previously invested when BTC was going up, made $1,000 in a week and then lost it all. But he also had no way to accept bitcoin.

Of course, there may have been others who were more clued up but didn’t make the final edit of the video.

A Different Kind Of Bitcoin Bubble

As Bitcoiners, it’s sometimes easy to forget that outside of our little crypto-bubble is a whole world of no-coiners. If we want Bitcoin to reach mass adoption then we should consider it our duty to spread the word.

Whilst none of the participants in this experiment were ever actually going to get a bitcoin, the host did bring them up to speed. After hearing more about bitcoin’s value, utility, and how it works, the majority changed their choice.

The host also got them to download a wallet app and transferred them a token amount of bitcoin. This is exactly how I was introduced to bitcoin several years ago when our esteemed editor met me at a networking event. 20 minutes later I was the proud owner of $1 worth of bitcoin (worth over 30 dollars today!).

So I encourage you now to do exactly this. Offer everyone you know one dollar (few will refuse it), then help them to install a wallet and send it to them. Explain that they can just keep checking it to see its value, or they can add to and/or use it.

Oh, and tell them that if you’d given it to them six months ago it would be worth over two dollars by now.

What do you think of the students’ responses? Share your thoughts below!


Images via Shutterstock

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Úno 02

My Bank App is Better Than Bitcoin for Payments (And That’s Fine)

The cryptocurrencies are faster and cheaper narrative has fizzled out as banks have embraced digital payments in recent years, improving customer experience and usability. Sure, buying a beer with a QR-code may give you a warm and fuzzy feeling, but it isn’t the problem Bitcoin solves. It is much more than that.


Banks Go Digital

An all-too-common narrative a few years back was that Bitcoin (and other cryptocurrencies) would outcompete the likes of Visa and Mastercard with speed and cheaper transactions.

“Won’t somebody think of the merchants” was an often-repeated argument in 2014-215 because credit card companies typically charge around 3 percent service fee to process payments.

Fast forward a few years and merchants haven’t budged. Nor are they jumping on payment-focused coins either like Litecoin, Bitcoin Cash, Dash etc. So why didn’t they stick it to Visa and switch to ‘crypto’?

Digital fiat payments have actually become not only more ubiquitous but also much easier and cheaper. Though the latter is partially due to costs being offset by selling customer info to advertisers (which is a topic for another article).

Banks have indeed upped their game as far as user-friendliness goes with mobile apps, contactless payments, in-app integration, you name it. In fact, it’s never been easier to part ways with your money than it is today.

contactless payment nfc pay to swipe card

My Bank Card Beats Your Favorite Coin

My card, given to me by my bank, is tied to an app on my phone so I can check my balance and track all my balance and transaction history. I was impressed when BTC wallets did this six years ago. But banks have caught up fast and are beating cryptocurrencies in this arena.

The card/app work seamlessly together enabling contactless payments in the store, on public transport, and pretty much anywhere Visa/Mastercard are accepted, which is literally everywhere.

Sure, discussing Bitcoin is fun and all. But sometimes I just want a quick coffee without proselytizing Bitcoin to a barista who obviously doesn’t care about censorship-resistance and decentralized consensus protocols.

I should also mention that my bank has excellent customer support. It knows who I am and will block anyone else from using my account with the press of a button on my smartphone. My bank will refund me any money lost due to fraud – which is very reassuring unlike that uneasy feeling of possibly sending BTC to the wrong address by mistake.

What’s more, I can send money instantly to my friends for absolutely zero fees. And why wouldn’t it be zero? My bank is using a good old database after all – not your blockchain that takes minutes to confirm.

In other words, big blocks, small blocks, medium-sized blocks – none of this can compete when it comes to the speed and efficiency of a centralized database for payments.

My bank app even has a QR-code option for in-person payments if I’m feeling extra Bitcoin-ish.

The Problem That Bitcoin Solves

Bitcoin, however, wasn’t meant to compete with Visa or Paypal. Digital payments were already gaining traction when Bitcoin spawned from the 2008 financial crisis.

Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model.

– Satoshi Nakamoto, Bitcoin Whitepaper

Bitcoin was instead designed as an alternative to the central banking system that has historically abused the public’s trust. One hyperinflationary episode is all it takes and the money becomes worth less than the paper it’s printed on.

Bitcoin’s monetary policy, on the other hand, is completely transparent, its supply and inflation rate is known, and it’s the hardest form of money to ever exist. Yes, even more than gold because mathematical scarcity beats perceived scarcity. 

These attributes make it a money technology that has never existed before – and more importantly, removes the need to trust any intermediary.

In an article titled The Problem That Bitcoin solves, economist and The Bitcoin Standard author, Saifedean Ammous, explains:

[Paul Krugman] seems, mistakenly, to assume bitcoin is competing with consumer payment networks like Visa or PayPal….that is not what bitcoin is best suited for. Rather, bitcoin is an international settlement network, one that competes with the central bank settlement systems that are the foundation upon which networks like Visa or PayPal depend.

Therefore, the ‘payments for coffee on the blockchain’ narrative is dying because paying for stuff and accepting digital payments today isn’t a problem for people.

However, the public is also slowly realizing why Bitcoin isn’t going away. Particularly as publications like Time magazine release articles titled ‘Why Bitcoin Matters for Freedom’ and places like Venezuela are demonstrating how Bitcoin is literally saving lives.

That’s not to say that payments aren’t important. This and other use-cases will be built as ‘apps’ harnessing the trustless Bitcoin blockchain (e.g. Lightning Network). But they’re secondary to what’s really at stake here in an increasingly authoritarian and cashless fiat system: financial sovereignty.

Do you agree that Bitcoin’s primary role is to preserve financial sovereignty? Share your thoughts below!


Images courtesy of Shutterstock

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Led 09

‘It’s Quite Cryptic’: Normal People Explaining Bitcoin Shows It’s Still Very Early

This video by Naomi Brockwell of ‘normies’ explaining Bitcoin reminds us there’s still a long way to go taking cryptocurrencies to the masses.


Let’s be honest. Between wild price swings, sensational hash wars, Ethereum forks, 51% attacks, and bearish regulators, it’s easy to get caught up in the crypto space. And it’s equally easy to forget that there’s a whole other world out there that’s blissfully unaware.

Brockwell is a TV producer, MC, and host of NBTV blockchain/tech show. She’s been making videos about Bitcoin since 2013 and was a policy associate at the New York Bitcoin Center from 2013 to 2015.

In the following video posted on her YouTube channel, she admits that she didn’t realize how little people outside of crypto knew about Bitcoin until now:

During the trip so far I have discovered that no one outside the crypto world knows anything about Bitcoin.

Here are some of the main takeaways:

There’s a Lot of Confusion About Bitcoin

Most people have heard of Bitcoin. But despite its price hovering around $4,000, that still doesn’t mean they know what it is. There’s still plenty of confusion generated upon hearing the word. “You can put any word in front of “coin” and you’ll get bitcoin,” said one interviewee.

He knew that it was money “on the internet,” but was unsure about how to send it, asking whether you could fax or email it to people. Perhaps his most interesting question of all was:

How do you get more than one bitcoin? Do they stack? Can you have more than one type of bitcoin?

There Are Plenty of Misconceptions

One of the participants in the car knew that Bitcoin is mined. However, he thought that you mined it through hitting blocks on the internet, like a Mario game. In fact, he believed that popular video game Minecraft was the way in which bitcoin was mined.

Another interviewee said “Bitcoin is like an IOU with no legitimate promise to be fulfilled,” and that the coin’s appearance was very Mario-esque; “there’s even a David Hasselhoff coin with a picture of his head on it!” he exclaimed… “These are all types of bitcoin.”

His answers began to sound almost plausible to the other passengers until he blew his cover revealing that he actually knew nothing about what he was saying with the words:

It is a cryptic currency meaning that currently, it’s quite cryptic.

When everyone began to shake their heads, he said that no one knew anything about Bitcoin:

It’s like a puzzle which has no answer inside.

All these responses lead Brockwell to conclude:

It is very clear that most people in the world are incredibly confused about Bitcoin and what it is and what cryptocurrency is.

However, People Want to Learn More

That there’s confusion among the mainstream should come as no surprise. Many people in the actual space are still grappling with their own learning curves. The media has played a helpful role in getting the word about Bitcoin and crypto out there.

However, it has also served to add to the confusion with incorrect facts and unclear statements, images of bitcoin as an actual coin, rather than a string of numbers and letters. 

But the encouraging takeaway from the video is that people want to learn more. When Brockwell asked, “what’s your interest level in Bitcoin?” one of the respondents replied that it was a 7. 

I feel like if someone taught me about Bitcoin I’d be really interested… But when I google Bitcoin I never get any answers.

Another added:

I’m really curious now, I’d like to know more about Bitcoin.

It’s pretty clear that there’s a lot of work to be done explaining Bitcoin to the masses. Although, we can also take some encouragement from the fact that Bitcoin has gotten so far without most of the world knowing what it is.

Perhaps while the community works on scaling solutions, technology upgrades, and security, Bitcoin educators should also work on tightening the narrative. 

What’s the best way to get started with Bitcoin? Share your thoughts below!


Images courtesy of Shutterstock

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Led 04

‘How to Use Bitcoin Anonymously’ Article Gets Banned on Medium

Publishing platform, Medium, has allegedly jumped on the censorship “ban-wagon”, after suspending an account which posted a Bitcoin anonymity guide. Whilst Medium has not confirmed the reason, several Twitter users have claimed previous account suspensions based on crypto-related content.


Storm In A Teacup

So what can have incurred the wrath of Medium so much that they felt it necessary to wield the ban-hammer? Fortunately, the author reposted the article elsewhere, so we can read it and find out. Even more, fortunately, I’m going to paraphrase it, so you don’t need to bother reading it yourself.

The article has the disclaimer that you may not agree with it, so are welcome to read something else instead. If only Medium allowed us the same freedom of choice to read it in the first place, eh?

Bitcoin Privacy

Let’s begin…

Privacy is a fundamental human right, although government agencies are increasingly trying to curtail this in the name of security. Because some people use bitcoin for nefarious reasons, they want to monitor all use… but only for your own protection, of course.

So how can we eschew their benevolent intentions and secure our own privacy?

Keeping Your Privates Private

The article recommends always using cash for buying in/out and never using a service that requires AML/KYC. These regulations just tie your physical identity to your Bitcoin address and do little to prevent money laundering. In fact, as confirmed by Bitcoinist on a regular basis, the vast majority of money-laundering occurs through banks.

The guide also stresses that the same Bitcoin address should never be used more than once.

Reusing [Bitcoin] addresses is the virtual version of spreading an STD

Whilst this is an amusing metaphor, it’s hardly contentious, and pretty much standard advice. Oh, and as we’re giving good advice; don’t use wallets with Bloom filters, and do use an anonymity network or VPN.

Medium Jumps on the ‘Ban-Wagon’?

We then move on to the methods used to compromise your privacy, namely Bitcoin forensic analysis, and heuristics. Heuristics are essentially assumptions that are not perfectly correct, but good enough to use, in this case for identification and tracking.

As these are just guesses, there are ways that we can make them unreliable, and minimize the risk. One of these that the article goes into in a great deal of detail is coin-mixing. It recommends staying away from centralized mixing services and gives some suggestions as to alternative CoinJoins.

The guide sits somewhere between basic good advice and perhaps slight overcaution for most users. However, there is little in terms of content that could be considered contentious, or worthy of a suspension.

This being said, the links in the article do all seem to hit pages with endless loading loops. Even typing in the website address to get to the homepage (or any page other than the re-posted article) suffers the same fate.

It is possible that these ‘questionable’ links could have caused a suspension, and it is not recommended to click any of them. Nevertheless, there seems to be a growing trend towards de-platforming by PayPal, Patreon etc. and it would be sad if Medium was also taking this path.

What other methods can you share for increasing Bitcoin privacy? Share them below!


Images courtesy of Shutterstock

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Pro 23

Bitcoin Price to $17K in 2020, Says ‘Unorthodox’ Mining Difficulty Prediction

An ‘unorthodox prediction’ of mining difficulty increases puts the bitcoin price somewhere around $17,000 in 2020 — due to the possible power law relationship between the two.


Bitcoin price and difficulty ‘power law relationship’

Twitter user @100trillionUSD is back again with another intriguing chart — this time plotting the relationship between BTC price 00 and expected bitcoin mining difficulty in the coming years.

The previous graph visualized the relationship between the bitcoin mining reward halving and its impact on price over time, plotting the months before the halving event took place. This time the focus was on mining difficulty and price, since many analysts consider it to be inextricably linked to network hash rate.

 “Price follows hashrate,” said Max Keiser earlier this year. Adding that it’s been his “mantra” since bitcoin was at $3.

Mining is undoubtedly profitable when the hash rate is rising. It also means miners are confident in the future of Bitcoin if they are adding hardware to scale up their operations. However, a high hash rate also causes the Bitcoin mining difficulty to increase. This makes the mining process more resource-intensive as more hash power is needed to achieve the same results as at lower difficulty levels.

If the hash rate is too high relative to the price at which miners can sell their mined bitcoin (as we’ve seen this year), the most unprofitable miners will likely drop out. They may sell their equipment or simply turn off their rigs until the price recovers or it becomes easier to mine as difficulty adjusts. 

“Based on the poll results on bitcoin difficulty and the possible power law relationship between bitcoin price and difficulty (see formula below), an unorthodox prediction of the 2020 bitcoin price would be: $17,317,” explains 100trillionUSD.

Overall, 85 percent of respondents believe the difficulty will increase 10-100 times in the next two years. Meanwhile, only 10 percent think this is the beginning of the end for Bitcoin mining frequently referred to as the ‘death spiral’ (more about this later).

The biggest share of respondents (59 percent) expects the difficulty to rise 10x between today and the end of 2020. A smaller group (27 percent), however, believe the increase could be as high as 100X, which would translate into a price above $28,000.

Granted, the poll sample size was rather small with just over 250 votes. Nevertheless, mining difficulty is an important factor to consider for not only predicting BTC price but also evaluating the state of the network as a whole.

Difficulty Drops But No ‘Death Spiral’

Bitcoinist recently reported that the Bitcoin network mining difficulty just had another downward adjustment to lower price. The biggest in seven years, in fact, amid a year-long bear market that saw an 85 percent drop in market capitalization from its all-time high in late 2017.

But contrary to many ‘experts’ equating a break in the trend to the start of a mining ‘death spiral,’ the difficulty adjustment is an important counterbalance for the Bitcoin network. In other words, the adjusting difficulty (every 2016 blocks) relative to hash rate is a feature that enables the Bitcoin network to find the equilibrium for mining profitability.

What’s more, this is similar to what central banks do by raising and lowering interest rates with changing market conditions. However, in Bitcoin’s case, the adjustment is entirely baked into the code and thus, entirely predictable. 

Is mining difficulty a good metric to consider when predicting price? Share your thoughts below! 


Images courtesy of Shutterstock, blockchain.info, @100trillionUSD.

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Pro 16

Gab Says Bitcoin is The Clear Solution as ‘Free Speech Money’

Censorship-free social media platform, Gab, took to Twitter to proclaim the gospel according to Bitcoin. Describing the grandaddy of cryptocurrency as “free speech money,” it pledged to educate its near million-strong community.


The Next Evolution Of Online Payments

In recent tweets, Gab calls for the next evolution of online payments, in the form of un-censorable money. This must take payment processing online out of the hands of a small number of gatekeepers. Touting Bitcoin as “the clear solution,” Gab cites Silicon Valley’s inability to de-platform it from using the cryptocurrency.

Gab sees its role now as being to make Bitcoin easy to purchase and use. Something it says it can (and will) achieve with enough education and time. Gab:

We aren’t doing it because it’s hip or cool or the latest technology fad. We are doing it out of necessity.

All well and good, but Gab is hardly the first to the ‘championing of Bitcoin’ table. What does it think it can bring with it which is different?

A Community Of Almost A Million People (And Growing)

Taking a clear swipe at what it calls “vaporware crypto startups,” Gab mocks their relative lack of interest from users. Despite raising tens of millions of dollars, these startups cannot match Gab’s highly engaged community, according to the tweets.

Gab claims its users have been “put through the ringer for years,” for standing by its mission of delivering free speech. It adds:

Bitcoin is inherently pro-liberty and pro-freedom. It is free speech money. Gab has the distribution to introduce it to a huge and growing community.

A million people doesn’t sound all that impressive though, next to over 35 million authenticated users, already using cryptocurrency. And it’s rather telling that Gab chose Twitter to spread its message, rather than its own platform.

No Room At The Inn

Gab’s championing of Bitcoin comes on the back of its recent banning from PayPal. Despite this, Gab starts the tweet-storm praising PayPal’s achievements in initially breaking down barriers to online payments.

Ironically, Gab has repeatedly found itself de-platformed, often as a result of its refusal to de-platform those who have been barred from other major platforms. This has led to a reputation as a haven for hate speech.

Despite this latest missive, Gab has not always had the smoothest of paths regarding Bitcoin. Earlier this year, it had its Coinbase account closed without warning. This led it to describe centralized exchanges as “cancer,” and “contradictory to everything crypto stands for.”

The social media platform has since switched to the self-hosted BTCPay Server solution, reducing its dependence on third-party payment processors such as Coinbase and BitPay.

Gab now claims it “…has the power and community to reverse the current bear market. That’s not an understatement.”

Holding your breath while waiting for that to happen is not, however, recommended.

Will Bitcoin be increasingly used by de-platformed entities? Share your thoughts below! 


Images courtesy of Shutterstock

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Říj 27

10 Years On: Five Things Needed for the Mass Adoption of Bitcoin

It’s been ten years since Satoshi Nakamoto published the Bitcoin White Paper and introduced cryptocurrencies to the world. His radical vision of a decentralized peer-to-peer electronic cash system was groundbreaking, as it sought to rebuild the structures that upheld our global financial institutions. A decade on, the cryptocurrencies market is now worth $209 billion globally, and there are more than a thousand separate tokens in circulation.


[Note: This is a guest op-ed article submitted by Samuel Leach, Founder of Yield Coin]

Despite this success, Nakamoto’s vision is yet to be fully realized. Although “cryptos” and associated phrases have entered the popular language, and awareness of them is at an all-time high, uptake has been restricted to a narrow subset of society.

Bloomberg estimates that around a thousand users own approximately 40 percent of all bitcoin currently in circulation and cryptos have failed to supplant fiat currency. Before we see the mass adoption of cryptocurrencies, there are a number of obstacles that first need to be overcome.

Regulation

While regulation is often treated as a pariah among many in the crypto community, if executed properly, it will bring beneficial change for all. Cryptocurrencies have only been in existence for a relatively short amount of time meaning many governments are still figuring out the best way to regulate them. The result of this has been a crypto market structured in a laissez-faire fashion. While it can be argued that this has fostered further innovation, it has undoubtedly led to several negative side effects.

At present, anyone could set-up a new cryptocurrency and raise significant capital without having to face repercussions if they fail to implement their plans. This has reduced overall confidence in the market, as it can be difficult to differentiate legitimate projects from nefarious ones. This is also preventing many institutional investors from entering the market, as the lack of regulatory guidelines will lead to compliance issues on their part.

Volatility

A daily price swing of 10-20 percent is not uncommon among most cryptos, making them exceptionally volatile in comparison to fiat currencies; in comparison, the pound lost 4 percent of its value against the dollar on the infamous Black Wednesday. Finding a way to temper this instability would go some way to certifying cryptos as legitimate currencies.

Bitcoin Price Volatility

At the moment, it would take a very brave consumer and equally brave merchant to conduct a transaction using cryptocurrencies. The inherent volatility of most cryptos means consumers run the risk of massively overpaying and similarly, the outlet risks the value of the crypto received being eroded.

Practicality, Usability & Accessibility

While cryptocurrencies have seen some mainstream usage among investors interested in day trading and investing, this uptake hasn’t been reflected by everyday consumers.  This is mostly due to crypto’s impracticality for day-to-day usage. Some of this is due to its price volatility but a more central factor is the lack of businesses who are willing to accept it as a form of payment. If individuals are unable to find a legitimate use case for their crypto, then its value as a form of electronic cash is zero. Further, the process of acquiring crypto itself is difficult, meaning uptake has been restricted to a tech-savvy subset of the overall population.

It should be noted, however, that while numerous solutions are in place allowing the spending of bitcoin via third-party services such as gift cardsBTMs, etc. — this often adds friction and introduces more middlemen into the experience.

BTCPay is a Better (and Cheaper) BitPay, Says Core Developer Nicolas Dorier cryptocurrencies

Security

In the beginning, cryptocurrency related crime was almost non-existent, but as the market has grown, it has attracted the attention of organized scammers and hackers. Earlier this year, criminals stole $530 million worth of crypto from the Coincheck exchange, and there have been many other examples of large-scale thefts.

With ‘traditional’ financial systems, when a payment is made, third parties ensure that the transaction goes through and if anything does go wrong, they are liable for recovering the funds. Similarly, if your credit or debit card information is stolen, then you aren’t responsible for any transactions made. With cryptos, however, it is the user’s responsibility to ensure that all the data associated with a transaction is correct. If a user’s private key is stolen, then crypto can be stolen with a low chance of recovery.

Understanding

Research has found that 38 percent of the British population do not ‘understand’ cryptocurrency. With the commonly held misconception that it is a tool for criminals to launder money being the most cited reason for mistrusting it. While those involved in the community understand the revolutionary possibilities of cryptos, the wider public still needs further education on the potential benefits.

For those not familiar with trading concepts, the notional value and artificial scarcity that underpins crypto may be hard to grasp.  Further, the existing way in which money has been exchanged for goods has been long established, and cryptocurrencies will require people to think about transactions in an entirely new way.

Without a doubt, the introduction of cryptos has been revolutionary. However, whether we are within the midst of a complete reconstitution of the financial system remains to be seen. If the engineers and developers involved with cryptos can find a way to deal with the intense volatility and lack of widespread understanding around cryptos, then their benefits will be able to be enjoyed by all.

Do you agree with these barriers to adoption? Are there more? Share your thoughts below!


Images courtesy of Shutterstock

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Zář 09

Intercontinental Exchange May Be a Blessing and a Curse

There are few traders who aren’t aware that the Intercontinental Exchange (ICE) joined the cryptocurrency party several weeks ago. It turned into some of the biggest news of the year so far. What exactly does this mean for the crypto and global markets?


Don’t Trust Everyone With Your Money — Ask a Top World University.

Few institutions are more entitled to discuss technology than MIT. That’s exactly why the MIT Technology Review has just published a piece on this major event for both crypto and global markets. According to the Review, a mass of institutional investors in waiting for a sign to bring money to the table have just received the sign. Perhaps the ICE will provide just the controlled environment they needed in order to boost their confidence in cryptocurrencies.

However, a surprise may be in store as ICE attempts to apply the same rules used for financial markets to crypto. Yet, the two are fundamentally different. Don’t forget the roots of Bitcoin as an alternative to everything that money, banks, and finance represent: it is the opposite of many facets typically related to money and stocks. In fact, Bitcoin — and cryptocurrency as a concept —  solve many of the issues and anomalies presented by stock markets. Wall Street and blockchain savvy “evangelist” Caitlin Long explained why Bitcoin’s “perfection” can turn into a major disadvantage for those who treat it as a common stock or asset.

Cryptocurrencies Are the Answer Where the Stock Market Fails

Cryptocurrencies Are the Answer Where the Stock Market Fails

  • Cryptocurrencies are owned and managed by the trader him/herself, while stocks and assets are possessed by market mediators (e.g. exchanges), really;
  • Cryptocurrency transactions and related operations run on a distributed, (most often) decentralized ledger, and are therefore immutable. Wall Street companies can manipulate transaction/asset ownership in order to appear as if stocks were their own.
  • The blockchain solves the double-spending problem. When stocks, transactions, and markets are managed by centralized institutions, the trading process is exposed to a variety of technical vulnerabilities. Some are quite serious. MIT points out to the case of Dole Foods in 2015-2016 when the company apparently sold 33% more share than it actually had for sale due to a glitch in the trading process.

Remaining Optimistic

To end on a positive note, Long also pointed out the advantages this move will bring to the market in an earlier article in Forbes. Long thinks that ICE’s upcoming cryptocurrency exchange provides a solution to the custody issue encountered by big investors (managing >$150 million) who are required by the SEC to collaborate with a qualified custodian. The exchange will also add a certain degree of confidence, and a note of “mainstream adoption.”

Finally, the fact that cryptocurrencies solve some problems of stock markets may determine how companies raise their capital through ICO’s. “I doubt it will be very long before major corporate issuers join Telegram and Eastman Kodak in raising capital via these markets,” was Long’s conclusion.

What do you think about the possibility that cryptocurrencies will solve the problems encountered by the financial and stock markets? Let us know in the comments below!


Images courtesy of Shutterstock.

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Srp 30

Venezuela Shatters Bitcoin Trading Records With 500,000,000 Bolivars Per Week

Trading between Bitcoin and the Venezuelan Bolivar (VES) has beaten all records to pass 500 million for the first time last week.


7 Days, Half A Billion Bolivars

Data from Coin Dance, which tracks volumes on P2P platform Localbitcoins, confirms that the seven days ending August 25 saw BTC/VES achieve volumes never seen before.

The results come the same week Venezuela revalued the bolivar to create the new Sovereign Bolivar, lowering the currency’s value by 96 percent in the process.

For the week, Localbitcoins processed 506.3 million VES, a figure which dwarfs the previous all-time high of 175.8 million seen the week before.

In Bitcoin terms, the figure was also the highest ever, at 1143 BTC.

The Venezuelan government has come under extensive criticism for rolling out its Sovereign Bolivar project, which is tied to its national cryptocurrency Petro. As Bitcoinist reported, both Petro and the VES have received broad votes of no confidence, sources describing the latter as a “scam on top of another scam” last week.

Following conversion day August 20, the government in the meantime has even released a dedicated app to help citizens calculate how much money they actually own.

Rampant hyperinflation, which Caracas claims the new currency will help calm, is contributing to the confusion and ever-decreasing purchasing power of ordinary Venezuelans.

Government Clampdown ‘Will Affect’ Bitcoin Users

While Bitcoin has been gaining popularity in line with the deteriorating economic situation, the latest decisions by authorities appear to be fuelling interest and uptake.

Venezuela: Record Bitcoin Buying Spree Continues Amid Hyperinflation

As Purse.io head of support Eduardo Gomez, who is a Venezuelan national, noted on Twitter August 27, citizens traveling abroad will now have to notify banks of their intention to leave the country. This, according to documents, is a result of the government forcing them to reveal the IP addresses of those who access their banking setup from abroad.

“Many Venezuelans who live outside the country use their national bank accounts to send money to family members and to purchase local currency from traders by selling USD,” Gomez commented.

“Bitcoin users will be directly affected by this. Many (Localbitcoins) traders live outside the country.”

What do you think about Venezuela’s trading volumes? Let us know in the comments below!


Images courtesy of Shutterstock

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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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