Bitcoin Fees Hit ATH, Transactions Slow Down after China Explosion
Bitcoin (BTC) transaction fees have hit an all-time high after an explosion in Xinjiang, China, drove miners offline last week.
According to data from BitInfoCharts, the average (mean) fee is now USD 58.42, eclipsing the former record of USD 55.16 set in December 2017.
The disruption is likely to continue in the short term.
"I've personally had a BTC transaction pending for the last nine hours, with no confirmation in sight. This is not fun," Mati Greenspan, Founder of Quantum Economics, wrote in his newsletter yesterday. "Unless we see a quick recovery in the hash rate, it seems safe to say that things are gonna be a bit slow for a while."
The mining difficulty of Bitcoin is adjusted around every two weeks (or more precisely, every 2016 blocks) to maintain the normal 10-minute block time. The 7-day simple moving average block time on April 19 was more than 12 minutes.
In the longer term, some figures within the industry are looking forward to a future where Bitcoin becomes less reliant on Chinese hashpower.
Barry Silbert, the Founder and CEO of the Digital Currency Group, championed non-Chinese mining pools on Twitter, claiming they would provide the “diversity” the industry “needs.”
According to the Cambridge Bitcoin Electricity Index, China’s share of the Bitcoin hashrate declined between 2019 and 2020, falling from 75% in Q3 2019 to 65% in Q2 2020 (the latest period for which it provides data).
This gradual decline may well have continued into 2021, with new mining pools such as Foundry USA, SBI Crypto and others coming online over the past year.
The drop in hashrate, which coincided with the increase in BTC mining difficulty, has caused a rise in unconfirmed transactions, resulting in an upsurge in fees as users outbid each other to have their transactions sent to the front of a fast-growing queue.
And with Bitcoin’s automatic difficulty adjustment not due to take place for around 11 days, these new record fees may persist for some time yet.
While mean Bitcoin network fees are at an all-time high, median fees have hit a three-year high of USD 26.89, per the same data compiler. That – in the current market – is equivalent to roughly BTC 0.00049.
This figure is still relatively high, and has been caused mostly by a blackout in Xinjiang.
Alex Zhao, the CEO of Standard Hashrate Group, explained that miners in Xinjiang would likely be out of action for at least a week.
He said,
“A malfunctioning substation exploded in an industrial development zone designated to receive electricity utility fee abatement. This triggered a mandatory week-long shutdown and a safety inspection of the entire industrial development zone, which currently hosts a significant portion of Bitcoin hashrate.”
Accounts of just how far Bitcoin’s hashrate fell following the Xinjiang gas explosion vary. Data from BitInfoCharts indicates that it has plunged by as much as 37.5% since April 15, although analysts who have studied data from mining pools suggest that the fall may actually be closer to the 20% mark.
Bitcoin (BTC) transaction fees have hit an all-time high after an explosion in Xinjiang, China, drove miners offline last week.
According to data from BitInfoCharts, the average (mean) fee is now USD 58.42, eclipsing the former record of USD 55.16 set in December 2017.
The disruption is likely to continue in the short term.
"I've personally had a BTC transaction pending for the last nine hours, with no confirmation in sight. This is not fun," Mati Greenspan, Founder of Quantum Economics, wrote in his newsletter yesterday. "Unless we see a quick recovery in the hash rate, it seems safe to say that things are gonna be a bit slow for a while."
The mining difficulty of Bitcoin is adjusted around every two weeks (or more precisely, every 2016 blocks) to maintain the normal 10-minute block time. The 7-day simple moving average block time on April 19 was more than 12 minutes.
In the longer term, some figures within the industry are looking forward to a future where Bitcoin becomes less reliant on Chinese hashpower.
Barry Silbert, the Founder and CEO of the Digital Currency Group, championed non-Chinese mining pools on Twitter, claiming they would provide the “diversity” the industry “needs.”
According to the Cambridge Bitcoin Electricity Index, China’s share of the Bitcoin hashrate declined between 2019 and 2020, falling from 75% in Q3 2019 to 65% in Q2 2020 (the latest period for which it provides data).
This gradual decline may well have continued into 2021, with new mining pools such as Foundry USA, SBI Crypto and others coming online over the past year.
The drop in hashrate, which coincided with the increase in BTC mining difficulty, has caused a rise in unconfirmed transactions, resulting in an upsurge in fees as users outbid each other to have their transactions sent to the front of a fast-growing queue.
And with Bitcoin’s automatic difficulty adjustment not due to take place for around 11 days, these new record fees may persist for some time yet.
While mean Bitcoin network fees are at an all-time high, median fees have hit a three-year high of USD 26.89, per the same data compiler. That – in the current market – is equivalent to roughly BTC 0.00049.
This figure is still relatively high, and has been caused mostly by a blackout in Xinjiang.
Alex Zhao, the CEO of Standard Hashrate Group, explained that miners in Xinjiang would likely be out of action for at least a week.
He said,
“A malfunctioning substation exploded in an industrial development zone designated to receive electricity utility fee abatement. This triggered a mandatory week-long shutdown and a safety inspection of the entire industrial development zone, which currently hosts a significant portion of Bitcoin hashrate.”
Accounts of just how far Bitcoin’s hashrate fell following the Xinjiang gas explosion vary. Data from BitInfoCharts indicates that it has plunged by as much as 37.5% since April 15, although analysts who have studied data from mining pools suggest that the fall may actually be closer to the 20% mark.
Coinbase Pro Lists Tether, Prompting Debates Over Meaning Of This Move
Coinbase Pro has listed the most popular stablecoin tether (USDT) days after the parent company of the exchange went public, while the company behind the stablecoin has been criticized for lack of transparency.
Starting April 22, inbound transfers for USDT are available in the regions where trading is supported, ahead of the start of trading set for April 26, if liquidity conditions are met, said the crypto trading platform owned and operated by Coinbase.
Support for USDT will generally be available in Coinbase’s supported jurisdictions, with the exception of New York. Also, USDT is not yet available on the Coinbase platform or via the mobile apps.
As USDT has been launched on multiple chains over the years, including OMNI, EOS, Tron (TRX) and, as was recently announced, Polkadot (DOT), the exchange stressed that they only support ERC-20 USDT running on the Ethereum (ETH) blockchain.
The company behind the stablecoin, Tether Limited, claims to hold reserves that fully back each USDT (its market capitalization surpassed USD 49bn), said the announcement. As reported, in a February settlement with the New York Attorney General's office, Tether was obliged to disclose how its stablecoin is backed in more detail. Its March independent accountant's report claimed that the company's assets exceed its consolidated liabilities as of February 28.
Analyst Adam Cochran's view is that this listing is the "most bullish piece of news" he's seen in a long time. "This strongly legitimatizes Tether, which underpins huge price action, and now makes arbitrage to non-fiat exchanges more direct which is huge for capital flows," he wrote.
Researcher and Tether critic Cas Piancey tweeted that it's "mind-boggling" that Coinbase waited until after its direct listing to list tether. "Either the greatest move to finally make skeptics shut up or the absolute worst introduction of systemic risk possible, or both."
And while Cochran claims this news legitimizes tether, Partner at Anderson Kill Stephen Palley opined that this move maybe "strongly delegitimizes Coinbase," adding that "it's a terrible move and injects systemic risk right into the heart of crypto."
Cochran agrees there's a risk, but that it's "orders of magnitude smaller." If odds are laid out, it's more likely that it's in favor than not. "With their stake in USDC, & institutional footprint, I don't think their upside for USDT is that large. So this risk they'd weigh for it has to be comparable," he said.
But Piancey argued that Coinbase has USD and "it doesn’t really matter how anyone feels about Tether and it’s backing now. They’re 100% easily tradable for USD (or USDC) on a US platform."
Coinbase Pro has listed the most popular stablecoin tether (USDT) days after the parent company of the exchange went public, while the company behind the stablecoin has been criticized for lack of transparency.
Starting April 22, inbound transfers for USDT are available in the regions where trading is supported, ahead of the start of trading set for April 26, if liquidity conditions are met, said the crypto trading platform owned and operated by Coinbase.
Support for USDT will generally be available in Coinbase’s supported jurisdictions, with the exception of New York. Also, USDT is not yet available on the Coinbase platform or via the mobile apps.
As USDT has been launched on multiple chains over the years, including OMNI, EOS, Tron (TRX) and, as was recently announced, Polkadot (DOT), the exchange stressed that they only support ERC-20 USDT running on the Ethereum (ETH) blockchain.
The company behind the stablecoin, Tether Limited, claims to hold reserves that fully back each USDT (its market capitalization surpassed USD 49bn), said the announcement. As reported, in a February settlement with the New York Attorney General's office, Tether was obliged to disclose how its stablecoin is backed in more detail. Its March independent accountant's report claimed that the company's assets exceed its consolidated liabilities as of February 28.
Analyst Adam Cochran's view is that this listing is the "most bullish piece of news" he's seen in a long time. "This strongly legitimatizes Tether, which underpins huge price action, and now makes arbitrage to non-fiat exchanges more direct which is huge for capital flows," he wrote.
Researcher and Tether critic Cas Piancey tweeted that it's "mind-boggling" that Coinbase waited until after its direct listing to list tether. "Either the greatest move to finally make skeptics shut up or the absolute worst introduction of systemic risk possible, or both."
And while Cochran claims this news legitimizes tether, Partner at Anderson Kill Stephen Palley opined that this move maybe "strongly delegitimizes Coinbase," adding that "it's a terrible move and injects systemic risk right into the heart of crypto."
Cochran agrees there's a risk, but that it's "orders of magnitude smaller." If odds are laid out, it's more likely that it's in favor than not. "With their stake in USDC, & institutional footprint, I don't think their upside for USDT is that large. So this risk they'd weigh for it has to be comparable," he said.
But Piancey argued that Coinbase has USD and "it doesn’t really matter how anyone feels about Tether and it’s backing now. They’re 100% easily tradable for USD (or USDC) on a US platform."
Central Banks Will Need To Rethink Monetary Policies - PayPal CEO
In ten years, the world will see a major decline in the use of cash, with all forms of payment collapsing into mobile devices, catalyzing the advent of digital currencies and forcing central banks to rethink their monetary policies, according to Dan Schulman, CEO of online payments giant PayPal.
Schulman predicts that the next five to 10 years will introduce more change in the global financial system than we have witnessed over the past one to two decades.
“Credit cards as a form factor will go away, and you will use your phone because a phone can add much more value than just tapping your credit card,” Schulman said in an interview with Time magazine. “And so when all of those things start to happen, then central banks need to rethink monetary policy as well, because you can’t just issue more paper money into the system because people aren’t using paper money.”
The latest statements come as Schulman’s company is accelerating its leap into crypto. Most recently, its peer-to-peer mobile payments app Venmo enabled its users to buy and sell bitcoin (BTC) and other cryptoasets. Last month, the payments giant allowed its users to pay with crypto, expecting the move will “significantly expand the utility of cryptocurrency”.
“Demand on the crypto side has been multiple-fold to what we initially expected. There's a lot of excitement," Schulman told Time, without providing any numbers.
Asked about the forms of payment that are likely to dominate the mobile market in the future, PayPal’s CEO forecasts there could be six to 10 superapps that will secure a large customer base across the world, serving as intermediaries to other apps.
“You won’t have 50 apps on your phone, because you can’t remember 50 usernames and passwords; you don’t want to put in your financial information into every single one of them; you can’t remember the navigation system on all of them,” the CEO said.
As reported, PayPal is also planning to become a "superapp" - something akin to China’s AliPay, offering interoperability with a range of payment instruments. PayPal aims to almost double its customer base to 750m users by 2025.
In ten years, the world will see a major decline in the use of cash, with all forms of payment collapsing into mobile devices, catalyzing the advent of digital currencies and forcing central banks to rethink their monetary policies, according to Dan Schulman, CEO of online payments giant PayPal.
Schulman predicts that the next five to 10 years will introduce more change in the global financial system than we have witnessed over the past one to two decades.
“Credit cards as a form factor will go away, and you will use your phone because a phone can add much more value than just tapping your credit card,” Schulman said in an interview with Time magazine. “And so when all of those things start to happen, then central banks need to rethink monetary policy as well, because you can’t just issue more paper money into the system because people aren’t using paper money.”
The latest statements come as Schulman’s company is accelerating its leap into crypto. Most recently, its peer-to-peer mobile payments app Venmo enabled its users to buy and sell bitcoin (BTC) and other cryptoasets. Last month, the payments giant allowed its users to pay with crypto, expecting the move will “significantly expand the utility of cryptocurrency”.
“Demand on the crypto side has been multiple-fold to what we initially expected. There's a lot of excitement," Schulman told Time, without providing any numbers.
Asked about the forms of payment that are likely to dominate the mobile market in the future, PayPal’s CEO forecasts there could be six to 10 superapps that will secure a large customer base across the world, serving as intermediaries to other apps.
“You won’t have 50 apps on your phone, because you can’t remember 50 usernames and passwords; you don’t want to put in your financial information into every single one of them; you can’t remember the navigation system on all of them,” the CEO said.
As reported, PayPal is also planning to become a "superapp" - something akin to China’s AliPay, offering interoperability with a range of payment instruments. PayPal aims to almost double its customer base to 750m users by 2025.
Ethereum Exchange Inflows More Concentrated, Fewer Insiders Dominate
Ethereum (ETH) not only has fewer on-chain exchange users than bitcoin (BTC), but the inflows are also more concentrated. Also, a drop in competition amongst ETH sellers is signaling that fewer insiders dominate its decentralized markets than is the case with centralized exchanges, according to an analyst.
Ethereum inflows have become more concentrated since decentralized finance (DeFi) and decentralized exchanges (DEXes) became established, Chief Economist at Chainalysis, Philip Gradwell, said in his latest Market Intel Report.
According to him, prior to June 2020, the concentration of inflows to the top deposit addresses was similar across BTC and ETH. But afterwards, "the ten users who deposit the most ethereum on exchanges are responsible for 53% of all ethereum deposited, compared to 22% for the top ten bitcoin depositors," the analyst said.
Furthermore, the vast majority of centralized exchange users never transfer assets on the blockchain, preferring to interact with an exchange’s website instead.
Per the Chief Economist, the increasing concentration of ETH inflows is important because assets are usually sent to exchanges to be sold, therefore suggesting that "there is much less competition amongst sellers of ethereum on exchanges relative to bitcoin." Self-hosted assets, such as those held by private investors, account for 12% of ETH exchange inflows, suggesting that investors rarely send assets to exchanges to be sold, while traders provide the vast majority of liquidity.
The majority of exchange inflows are from other exchanges, the report said. For ETH, 61% of exchange inflows have been from exchanges since the start of 2020, showing "the opportunity that exists for those who provide liquidity across exchanges."
Besides exchanges, other services are the source of 27% of ETH exchange inflows. Two-thirds of the inflow from other services since the start of 2020 is from DeFi, Gradwell said, adding,
"The large spike in ethereum inflows in September 2020, and more recently this April, are from the flow of ethereum from DeFi to decentralized exchanges, which often then flows back to DeFi."
Comparing BTC and ETH, Gradwell argued that "many more" people deposit bitcoin on exchanges than they do ethereum, with exchanges having "far more" active deposit addresses for the former than the latter. Since the beginning of 2020, on average 132,000 users a day deposit BTC, and 23,000 users deposit ETH - meaning that bitcoin has five times the number of on-chain exchange users than ethereum.
Ethereum (ETH) not only has fewer on-chain exchange users than bitcoin (BTC), but the inflows are also more concentrated. Also, a drop in competition amongst ETH sellers is signaling that fewer insiders dominate its decentralized markets than is the case with centralized exchanges, according to an analyst.
Ethereum inflows have become more concentrated since decentralized finance (DeFi) and decentralized exchanges (DEXes) became established, Chief Economist at Chainalysis, Philip Gradwell, said in his latest Market Intel Report.
According to him, prior to June 2020, the concentration of inflows to the top deposit addresses was similar across BTC and ETH. But afterwards, "the ten users who deposit the most ethereum on exchanges are responsible for 53% of all ethereum deposited, compared to 22% for the top ten bitcoin depositors," the analyst said.
Furthermore, the vast majority of centralized exchange users never transfer assets on the blockchain, preferring to interact with an exchange’s website instead.
Per the Chief Economist, the increasing concentration of ETH inflows is important because assets are usually sent to exchanges to be sold, therefore suggesting that "there is much less competition amongst sellers of ethereum on exchanges relative to bitcoin." Self-hosted assets, such as those held by private investors, account for 12% of ETH exchange inflows, suggesting that investors rarely send assets to exchanges to be sold, while traders provide the vast majority of liquidity.
The majority of exchange inflows are from other exchanges, the report said. For ETH, 61% of exchange inflows have been from exchanges since the start of 2020, showing "the opportunity that exists for those who provide liquidity across exchanges."
Besides exchanges, other services are the source of 27% of ETH exchange inflows. Two-thirds of the inflow from other services since the start of 2020 is from DeFi, Gradwell said, adding,
"The large spike in ethereum inflows in September 2020, and more recently this April, are from the flow of ethereum from DeFi to decentralized exchanges, which often then flows back to DeFi."
Comparing BTC and ETH, Gradwell argued that "many more" people deposit bitcoin on exchanges than they do ethereum, with exchanges having "far more" active deposit addresses for the former than the latter. Since the beginning of 2020, on average 132,000 users a day deposit BTC, and 23,000 users deposit ETH - meaning that bitcoin has five times the number of on-chain exchange users than ethereum.
What are Bitcoin mixers, and why do exchanges ban them?
One of the original allures of cryptocurrency is the narrative that using them provides the sender or recipient anonymously, but this is a common misconception within the sector.
In reality, Bitcoin (BTC) and many other cryptocurrencies are easily traceable.
Proof of this came earlier this week when on April 27, U.S. authorities arrested the mastermind of Bitcoin Fog, a darknet-based BTC mixing service. Authorities were able to capture the operator after analyzing ten years of blockchain data.
One doesn't need to be a forensic analyst to know that every single transaction is tied up to addresses on the blockchain and that they will stay there forever. While government agencies cannot determine the IP address or personal data from the address, these coins usually end up being used for products or service payments. This is the trail that leads back to the sender and recipient.
In the case of Bitcoin Fog, law enforcement was able to identify server hosting expenses paid using digital currency. Bitcoin mixing services such as Bitcoin Fog allow users to mix their coins with other users, making it almost impossible to detect the destination addresses. This obfuscates the ties between the inputs and output addresses, providing a better level of privacy.
Mixing services are offered in a wide range of methods, including fully centralized solutions where trust is required, to Coinjoin mixers, which depend on a large group of users to self cooperate and act simultaneously. There's even the possibility of trading on decentralized exchanges (DEX) to virtually eliminate any possible tracing.
Centralized mixers offer the obvious single point of failure problem. Even if one trusts that the entity is using multisig addresses, if the service is willing to share its data or has been breached, their users will lose their privacy.
CoinJoin solved this problem by combining the inputs of multiple users into a single transaction. The service will then take those coins, craft them into a transaction, and have each participant sign before broadcasting it to the network. These transactions are then merged into one, and each user gets the original quantity in return. However, no one can see the origin of those coins, not even the entity that merges the transaction.
Even though CoinJoin isn't exactly untraceable, it provides plausible deniability, as no one can point out which entity owns each output. The larger the number of participants, the higher the degree of deniability.
While its infrastructure is technically centralized, its design assures that the operators cannot deanonymize users or steal any funds. At the moment, the Wasabi wallet is only available for desktop solutions, so as is the case with anything in cryptocurrency, beware of clones!
A similar service is provided by Samourai wallet, which also offers a Chaumian CoinJoin mixing service, called Whirlpool. To achieve a full-privacy solution, users have to connect the Samourai wallet to their own full Bitcoin node. However, it does offer desktop and mobile versions.
Even though these mixing services aren't illegal in most jurisdictions, some exchanges and services might refuse users linked to addresses associated with coin mixing activities.
As more people realize the importance of achieving a certain degree of privacy for self-protection, the fewer incentives companies will have to deny their clients to use mixers.
One of the original allures of cryptocurrency is the narrative that using them provides the sender or recipient anonymously, but this is a common misconception within the sector.
In reality, Bitcoin (BTC) and many other cryptocurrencies are easily traceable.
Proof of this came earlier this week when on April 27, U.S. authorities arrested the mastermind of Bitcoin Fog, a darknet-based BTC mixing service. Authorities were able to capture the operator after analyzing ten years of blockchain data.
One doesn't need to be a forensic analyst to know that every single transaction is tied up to addresses on the blockchain and that they will stay there forever. While government agencies cannot determine the IP address or personal data from the address, these coins usually end up being used for products or service payments. This is the trail that leads back to the sender and recipient.
In the case of Bitcoin Fog, law enforcement was able to identify server hosting expenses paid using digital currency. Bitcoin mixing services such as Bitcoin Fog allow users to mix their coins with other users, making it almost impossible to detect the destination addresses. This obfuscates the ties between the inputs and output addresses, providing a better level of privacy.
Mixing services are offered in a wide range of methods, including fully centralized solutions where trust is required, to Coinjoin mixers, which depend on a large group of users to self cooperate and act simultaneously. There's even the possibility of trading on decentralized exchanges (DEX) to virtually eliminate any possible tracing.
Centralized mixers offer the obvious single point of failure problem. Even if one trusts that the entity is using multisig addresses, if the service is willing to share its data or has been breached, their users will lose their privacy.
CoinJoin solved this problem by combining the inputs of multiple users into a single transaction. The service will then take those coins, craft them into a transaction, and have each participant sign before broadcasting it to the network. These transactions are then merged into one, and each user gets the original quantity in return. However, no one can see the origin of those coins, not even the entity that merges the transaction.
Even though CoinJoin isn't exactly untraceable, it provides plausible deniability, as no one can point out which entity owns each output. The larger the number of participants, the higher the degree of deniability.
While its infrastructure is technically centralized, its design assures that the operators cannot deanonymize users or steal any funds. At the moment, the Wasabi wallet is only available for desktop solutions, so as is the case with anything in cryptocurrency, beware of clones!
A similar service is provided by Samourai wallet, which also offers a Chaumian CoinJoin mixing service, called Whirlpool. To achieve a full-privacy solution, users have to connect the Samourai wallet to their own full Bitcoin node. However, it does offer desktop and mobile versions.
Even though these mixing services aren't illegal in most jurisdictions, some exchanges and services might refuse users linked to addresses associated with coin mixing activities.
As more people realize the importance of achieving a certain degree of privacy for self-protection, the fewer incentives companies will have to deny their clients to use mixers.
CryptEx is throwing $350,000 ☄️ into Staking on May, 10
What is CryptEx?
CryptEx is a B2B set of security services for Binance Smart Chain projects. CryptEx charges customers, and 50% of the fees go to its holders.
How to earn 50% of the fees?
All you have to do is stake CRX from your wallet, and every time a client pays for CryptEx services, the stakers get 50% out of this payment. All the rewards are paid in 💰BNB
Ask any question in the official CryptEx telegram chat 👉 @cryptexlocker
What about $100,000?
Since February 20, CryptEx provided services to 52 projects, charging them a total of over $100 000. However, staking has been released only on May 2.
After May 10, CryptEx will distribute 50% out of earned income between all CRX stakers. APY SHOULD BE ON FIRE 🔥.
Also, CRX Stakers are getting 1 000 000 DROPS (more than $250,000)during the airdrop. The snapshot will be recorded after May 10, at a random time.
Tiсker: $CRX
Max Supply: 100,000 CRX
Current Price: $36.88
FD MCap: $3,687,867
Network: Binance Smart Chain
Where to buy: 1Inch, ApeSwap, PancakeSwap V1
Join the chat: 🔥 @cryptexlocker
What is CryptEx?
CryptEx is a B2B set of security services for Binance Smart Chain projects. CryptEx charges customers, and 50% of the fees go to its holders.
How to earn 50% of the fees?
All you have to do is stake CRX from your wallet, and every time a client pays for CryptEx services, the stakers get 50% out of this payment. All the rewards are paid in 💰BNB
Ask any question in the official CryptEx telegram chat 👉 @cryptexlocker
What about $100,000?
Since February 20, CryptEx provided services to 52 projects, charging them a total of over $100 000. However, staking has been released only on May 2.
After May 10, CryptEx will distribute 50% out of earned income between all CRX stakers. APY SHOULD BE ON FIRE 🔥.
Also, CRX Stakers are getting 1 000 000 DROPS (more than $250,000)during the airdrop. The snapshot will be recorded after May 10, at a random time.
Tiсker: $CRX
Max Supply: 100,000 CRX
Current Price: $36.88
FD MCap: $3,687,867
Network: Binance Smart Chain
Where to buy: 1Inch, ApeSwap, PancakeSwap V1
Join the chat: 🔥 @cryptexlocker
Taxman Comes Calling at Kraken – IRS Gets Hands on Data from 2016-2020
A branch of the California District Court has granted the American tax collecting body, the Internal Revenue Service (IRS), permission to issue a John Doe summons on the crypto exchange giant Kraken – in a bid to discover the identities of United States residents and citizens who have conducted high-value crypto transactions in the past four years.
The IRS is known to have been hoping to gain a favorable court ruling for several weeks, if not months. The move follows a warning last month from a tax expert – who wrote, prophetically: “Guys, file your crypto taxes. The IRS is coming” – after the tax body won the right to issue a John Doe summons on Circle.
A John Doe summons, in the IRS’ own words, permits the tax body to “obtain the names, requested information and documents concerning all taxpayers in a certain group.”
Per an official release from the American Department of Justice (DoJ), the IRS now has the power to force Kraken to reveal information about United States taxpayer customers who conducted USD 20,000 or more worth of crypto transactions in the period 2016 to 2020.
In the release, David Hubbert, the acting Assistant Attorney-General of the Justice Department tax division, stated:
“Those who transact with cryptocurrency must meet their tax obligations like any other taxpayer. Gathering the information in the summons approved today is an important step to ensure cryptocurrency owners are following the tax laws.”
And the IRS Commissioner, Chuck Rettig, stated that there was “no excuse for taxpayers continuing to fail to report the income earned and taxes due from virtual currency transactions.” He called the summons “part of our effort to uncover those who are trying to skirt reporting and avoid paying their fair share.”
The tax body claimed that its petition did not suggest that Kraken “has engaged in any wrongdoing in connection with its digital currency exchange business.”
However, the DoJ report added that the summons was on the hunt for information connected to the IRS-led “investigation of an ascertainable group or class of persons” that it “has a reasonable basis to believe” may have “failed to comply” with tax rules.
A branch of the California District Court has granted the American tax collecting body, the Internal Revenue Service (IRS), permission to issue a John Doe summons on the crypto exchange giant Kraken – in a bid to discover the identities of United States residents and citizens who have conducted high-value crypto transactions in the past four years.
The IRS is known to have been hoping to gain a favorable court ruling for several weeks, if not months. The move follows a warning last month from a tax expert – who wrote, prophetically: “Guys, file your crypto taxes. The IRS is coming” – after the tax body won the right to issue a John Doe summons on Circle.
A John Doe summons, in the IRS’ own words, permits the tax body to “obtain the names, requested information and documents concerning all taxpayers in a certain group.”
Per an official release from the American Department of Justice (DoJ), the IRS now has the power to force Kraken to reveal information about United States taxpayer customers who conducted USD 20,000 or more worth of crypto transactions in the period 2016 to 2020.
In the release, David Hubbert, the acting Assistant Attorney-General of the Justice Department tax division, stated:
“Those who transact with cryptocurrency must meet their tax obligations like any other taxpayer. Gathering the information in the summons approved today is an important step to ensure cryptocurrency owners are following the tax laws.”
And the IRS Commissioner, Chuck Rettig, stated that there was “no excuse for taxpayers continuing to fail to report the income earned and taxes due from virtual currency transactions.” He called the summons “part of our effort to uncover those who are trying to skirt reporting and avoid paying their fair share.”
The tax body claimed that its petition did not suggest that Kraken “has engaged in any wrongdoing in connection with its digital currency exchange business.”
However, the DoJ report added that the summons was on the hunt for information connected to the IRS-led “investigation of an ascertainable group or class of persons” that it “has a reasonable basis to believe” may have “failed to comply” with tax rules.
Tokyo Assemblyman Wants to Turn City into Crypto Powerhouse
A Tokyo city assemblyman has spoken out about ambitious plans to transform the Japanese capital into a crypto-powered financial hub – claiming that embracing cryptoassets could help put the city on a par with London and Hong Kong.
Speaking to Finders (via Yahoo Japan), Yuu Ito, a member of the Tokyo Metropolitan Assembly currently serving his third term, referred to plans laid out by the current Governor of Tokyo, Yuriko Koike, who has gone public with her plans to boost the city’s international financial standing.
But Ito claimed that it will be no mean feat to bring Tokyo up to the same kind of standing as London or Asian financial hubs like Macau and Hong Kong unless radical action is taken.
He stated that crypto-related business could give Tokyo the edge, but added that this would be far from easy considering that Japanese bitcoin (BTC)-to-yen ownership rates have dropped significantly in the past three years. The assembly member claimed that high rates of tax have likely frightened investors away from the market.
However, he claimed that moves such as the proposed redevelopment of the Tsukiji Market – a historic fish market dating back to the 1600s – could play a role. The huge market is now closed, and will be used as a transport depot in the forthcoming Tokyo Olympics this summer. But the city, which owns the site, has unveiled plans to redevelop the market into a high-tech complex with hotels and convention centers in the next 20 years.
And the assembly member explained that crypto could play a part here – becoming a “trading center for cryptocurrencies.”
Ito also claimed that “politicians need to tackle issues connected with monetary policy and BTC taxation” – and proposed creating “a special zone in Tokyo” where people could use bitcoin in a tax-free environment.
Cities that move fast with adoption plans like these will “win” the tech race, he added.
Although Ito will have a mountain to climb if he is to convince fellow assembly members to get on board with a project of this sort, at least one ally has already emerged. Speaking to the same outlet, assembly member Nobuko Irie agreed that blockchain-powered solutions could help in the short-term as well as the long-term.
She claimed that the technology could be used to help distribute coronavirus pandemic-related economic aid more effectively, and suggested that Tokyo should develop a space where non-fungible token (NFT) artworks could be traded.
She added that crypto and blockchain provided a unique opportunity for politicians, adding that if the Tokyo Metropolitan Assembly “takes the initiative,” Tokyo could rise to the fore on the global stage.
Ito added that blockchain technology should be used “as a growth strategy” to “generate wealth” for the Japanese capital.
Meanwhile, a Coin Post-conducted survey of 1,000 crypto enthusiasts in Japan has found that the token most respondents think will have a breakout 2021 is BTC – with almost 68% of votes. Bitcoin was followed by ethereum (ETH) in second place with 12.7% and NEM’s XEM with 7%.
In a press release, the media outlet stated that 90% of respondents claimed they already own crypto, while 60% began trading in the 2015-2017 period – and 6% stated they had invested USD 184,000 or more on cryptoassets.
A Tokyo city assemblyman has spoken out about ambitious plans to transform the Japanese capital into a crypto-powered financial hub – claiming that embracing cryptoassets could help put the city on a par with London and Hong Kong.
Speaking to Finders (via Yahoo Japan), Yuu Ito, a member of the Tokyo Metropolitan Assembly currently serving his third term, referred to plans laid out by the current Governor of Tokyo, Yuriko Koike, who has gone public with her plans to boost the city’s international financial standing.
But Ito claimed that it will be no mean feat to bring Tokyo up to the same kind of standing as London or Asian financial hubs like Macau and Hong Kong unless radical action is taken.
He stated that crypto-related business could give Tokyo the edge, but added that this would be far from easy considering that Japanese bitcoin (BTC)-to-yen ownership rates have dropped significantly in the past three years. The assembly member claimed that high rates of tax have likely frightened investors away from the market.
However, he claimed that moves such as the proposed redevelopment of the Tsukiji Market – a historic fish market dating back to the 1600s – could play a role. The huge market is now closed, and will be used as a transport depot in the forthcoming Tokyo Olympics this summer. But the city, which owns the site, has unveiled plans to redevelop the market into a high-tech complex with hotels and convention centers in the next 20 years.
And the assembly member explained that crypto could play a part here – becoming a “trading center for cryptocurrencies.”
Ito also claimed that “politicians need to tackle issues connected with monetary policy and BTC taxation” – and proposed creating “a special zone in Tokyo” where people could use bitcoin in a tax-free environment.
Cities that move fast with adoption plans like these will “win” the tech race, he added.
Although Ito will have a mountain to climb if he is to convince fellow assembly members to get on board with a project of this sort, at least one ally has already emerged. Speaking to the same outlet, assembly member Nobuko Irie agreed that blockchain-powered solutions could help in the short-term as well as the long-term.
She claimed that the technology could be used to help distribute coronavirus pandemic-related economic aid more effectively, and suggested that Tokyo should develop a space where non-fungible token (NFT) artworks could be traded.
She added that crypto and blockchain provided a unique opportunity for politicians, adding that if the Tokyo Metropolitan Assembly “takes the initiative,” Tokyo could rise to the fore on the global stage.
Ito added that blockchain technology should be used “as a growth strategy” to “generate wealth” for the Japanese capital.
Meanwhile, a Coin Post-conducted survey of 1,000 crypto enthusiasts in Japan has found that the token most respondents think will have a breakout 2021 is BTC – with almost 68% of votes. Bitcoin was followed by ethereum (ETH) in second place with 12.7% and NEM’s XEM with 7%.
In a press release, the media outlet stated that 90% of respondents claimed they already own crypto, while 60% began trading in the 2015-2017 period – and 6% stated they had invested USD 184,000 or more on cryptoassets.
MoneyGram Goes Bitcoin After Ending Partnership With Ripple
Major US money transfer company MoneyGram has teamed up with bitcoin (BTC) kiosk business Coinme to facilitate buying and selling this most popular cryptocurrency with cash through a network comprising thousands of new point-of-sale locations in the US and select foreign markets this year.
Alex Holmes, Chairman and CEO of MoneyGram, said in a statement that the alliance “opens our business to an entirely new customer segment as we are the first to pioneer a crypto-to-cash model by building a bridge with Coinme to connect bitcoin to local fiat currency”.
In the second half of 2021, the partnership aims to expand to select markets abroad, according to the statement. The companies estimate there are currently around 20,000 cryptocurrency kiosks in the world which would make their venture a powerful market player. MoneyGram’s focus on cross-border transactions might further boost the partnership’s foothold in foreign markets.
Neil Bergquist, CEO of Coinme, commented that through integrating MoneyGram’s global infrastructure “with our licensed crypto exchange technology, we can enable the purchase and sale of cryptocurrencies across its system using cash.”
The achieved integration between MoneyGram and Coinme “will provide a fast and easy way for customers to purchase bitcoin with cash and withdraw bitcoin holdings in cash. It is specially designed for customers who may be interested in utilizing bitcoin for the first time,” the statement said.
Bergquist told Cryptonews that, starting today, Coinme is launching some 12,000 retail locations where customers will be enabled to buy and sell bitcoin with cash at select MoneyGram locations across the US.
“Our full MoneyGram US rollout will feature over 20,000 locations and should be fully operational in the coming weeks. We plan to launch the MoneyGram service internationally soon after,” the CEO said. “Currently, our Coinme-enabled Coinstar kiosks are available in over 6,000 locations throughout 47 states.”
The latest development comes after XRP-affiliated Ripple announced its partnership with MoneyGram ended for now. Under the expired deal, MoneyGram was using the XRP token in international settlement deals. However, as a result of Ripple’s legal woes with the US Securities and Exchange Commission (SEC), the money transfer business is now facing a class-action lawsuit based on an allegation that the company made false and/or misleading statements about its partnership with Ripple and XRP’s legal status.
Major US money transfer company MoneyGram has teamed up with bitcoin (BTC) kiosk business Coinme to facilitate buying and selling this most popular cryptocurrency with cash through a network comprising thousands of new point-of-sale locations in the US and select foreign markets this year.
Alex Holmes, Chairman and CEO of MoneyGram, said in a statement that the alliance “opens our business to an entirely new customer segment as we are the first to pioneer a crypto-to-cash model by building a bridge with Coinme to connect bitcoin to local fiat currency”.
In the second half of 2021, the partnership aims to expand to select markets abroad, according to the statement. The companies estimate there are currently around 20,000 cryptocurrency kiosks in the world which would make their venture a powerful market player. MoneyGram’s focus on cross-border transactions might further boost the partnership’s foothold in foreign markets.
Neil Bergquist, CEO of Coinme, commented that through integrating MoneyGram’s global infrastructure “with our licensed crypto exchange technology, we can enable the purchase and sale of cryptocurrencies across its system using cash.”
The achieved integration between MoneyGram and Coinme “will provide a fast and easy way for customers to purchase bitcoin with cash and withdraw bitcoin holdings in cash. It is specially designed for customers who may be interested in utilizing bitcoin for the first time,” the statement said.
Bergquist told Cryptonews that, starting today, Coinme is launching some 12,000 retail locations where customers will be enabled to buy and sell bitcoin with cash at select MoneyGram locations across the US.
“Our full MoneyGram US rollout will feature over 20,000 locations and should be fully operational in the coming weeks. We plan to launch the MoneyGram service internationally soon after,” the CEO said. “Currently, our Coinme-enabled Coinstar kiosks are available in over 6,000 locations throughout 47 states.”
The latest development comes after XRP-affiliated Ripple announced its partnership with MoneyGram ended for now. Under the expired deal, MoneyGram was using the XRP token in international settlement deals. However, as a result of Ripple’s legal woes with the US Securities and Exchange Commission (SEC), the money transfer business is now facing a class-action lawsuit based on an allegation that the company made false and/or misleading statements about its partnership with Ripple and XRP’s legal status.
Bitcoin May Double This Year Despite Energy Concerns - Pantera CEO
US-based major crypto investment firm Pantera Capital CEO Dan Morehead claims that the price of bitcoin (BTC) still might double this year despite the energy concerns.
BTC has been stuck in a trading range for a while now, and Morehead told Bloomberg TV that he thinks it will break out. In their earlier letter to investors, the company had forecasted that BTC would hit 115,000 this August, and "it's essentially on pace to do that," said the CEO, "it hit all the monthly milestones up through April."
"I do think it could double over the next five or six months. And I know that sounds crazy from your normal market standpoint ... but bitcoin has averaged more than tripping every year for ten years," he added.
Per Morehead, BTC has had "a very consistent" ten-year compound annual growth rate of 233% a year. And while there have been some bubbles and bear markets, "if you zoom out and look at it from any multi-year perspective ... the log growth has been very consistent," he said, adding that "over the next several months, definitely over the next years, it will resume its trend."
BTC is still well below its ten-year compound annual growth, so we're not in a bubble or an over-priced territory, therefore it may be a good chance to buy, he suggested.
The ESG (environmental, social and governance) concerns "have come up more in the past three or four months,” Morehead noted.
Bitcoin now-famously plunged on Thursday after Tesla chief's Elon Musk’s comments about Bitcoin’s energy use. Musk is "a mercurial person," changing corporate strategy pretty quickly in this case, but what's important to note, said Morehead, is that Tesla is staying long, not selling their BTC.
While it's important to think about the renewability of the resources used to secure the Bitcoin network, it's one of the many blockchains, and about 40% of the overall market capitalization, argued the CEO, while there are others that currently use no electricity or will switch to proof-of-stake (PoS) and use none. Therefore, the energy consumption discussions surrounding bitcoin shouldn't influence the industry as a whole.
In a separate interview with Bloomberg TV, major crypto exchange Coinbase President and Chief Operating Officer Emilie Choi also noted that the space is increasingly driving sustainable innovation, but added that she "wouldn't be surprised" if there was something bigger behind Musk's move.
This week, Reuters reported that Tesla is seeking to enter the multi-billion dollar US renewable credit market, hoping to profit from the Biden administration’s march toward new zero-emission goals.
Meanwhile, on-chain analysis firm Glassnode claims that "HODLing demand from both miners and long term holders as overall spending patterns remain bullish," but that there are indications that a portion of BTC capital is rotating, mostly into ethereum (ETH).
The rate of miner accumulation is "historically significant," with the current net position change comparing to only three instances in the last five years. Additionally, the demand by larger buyers exceeds available supply at the over-the-counter desks. Both trends align with the strong growth in institutional interest in the asset as a macro scale investment, the report said.
US-based major crypto investment firm Pantera Capital CEO Dan Morehead claims that the price of bitcoin (BTC) still might double this year despite the energy concerns.
BTC has been stuck in a trading range for a while now, and Morehead told Bloomberg TV that he thinks it will break out. In their earlier letter to investors, the company had forecasted that BTC would hit 115,000 this August, and "it's essentially on pace to do that," said the CEO, "it hit all the monthly milestones up through April."
"I do think it could double over the next five or six months. And I know that sounds crazy from your normal market standpoint ... but bitcoin has averaged more than tripping every year for ten years," he added.
Per Morehead, BTC has had "a very consistent" ten-year compound annual growth rate of 233% a year. And while there have been some bubbles and bear markets, "if you zoom out and look at it from any multi-year perspective ... the log growth has been very consistent," he said, adding that "over the next several months, definitely over the next years, it will resume its trend."
BTC is still well below its ten-year compound annual growth, so we're not in a bubble or an over-priced territory, therefore it may be a good chance to buy, he suggested.
The ESG (environmental, social and governance) concerns "have come up more in the past three or four months,” Morehead noted.
Bitcoin now-famously plunged on Thursday after Tesla chief's Elon Musk’s comments about Bitcoin’s energy use. Musk is "a mercurial person," changing corporate strategy pretty quickly in this case, but what's important to note, said Morehead, is that Tesla is staying long, not selling their BTC.
While it's important to think about the renewability of the resources used to secure the Bitcoin network, it's one of the many blockchains, and about 40% of the overall market capitalization, argued the CEO, while there are others that currently use no electricity or will switch to proof-of-stake (PoS) and use none. Therefore, the energy consumption discussions surrounding bitcoin shouldn't influence the industry as a whole.
In a separate interview with Bloomberg TV, major crypto exchange Coinbase President and Chief Operating Officer Emilie Choi also noted that the space is increasingly driving sustainable innovation, but added that she "wouldn't be surprised" if there was something bigger behind Musk's move.
This week, Reuters reported that Tesla is seeking to enter the multi-billion dollar US renewable credit market, hoping to profit from the Biden administration’s march toward new zero-emission goals.
Meanwhile, on-chain analysis firm Glassnode claims that "HODLing demand from both miners and long term holders as overall spending patterns remain bullish," but that there are indications that a portion of BTC capital is rotating, mostly into ethereum (ETH).
The rate of miner accumulation is "historically significant," with the current net position change comparing to only three instances in the last five years. Additionally, the demand by larger buyers exceeds available supply at the over-the-counter desks. Both trends align with the strong growth in institutional interest in the asset as a macro scale investment, the report said.
Maximalists at the movies: Bitcoiners crowdfunding anti-FUD documentary film
A crowdfunded effort aims to set Elon Musk and the mainstream media straight.
As the headlines pile up about Bitcoin’s calamitous environmental impact, one group of investors and supporters have stepped up to the plate to defend the world’s largest digital asset with the help of a crowdfunded, FUD-fighting documentary film.
First announced by investor, podcast host, and Bitcoin fanatic Brad Mills on Twitter, the goal of the film is to act as a “definitive” argument for “why Bitcoin will transition the world to renewable energy faster than governments.”
Mills’ choice of director is Jamie King, best known for STEAL THIS FILM — a documentary series about BitTorrent and one of the earliest examples of a crowdfunded, free-to-share effort. In an interview with Cointelegraph, King said that the narrative about Bitcoin’s energy consumption pushed him into action.
“The idea for this new project, which we're raising funds for right now, came about as a result of the increasing amount of attention being paid to Bitcoin's energy usage,” King said. “Obviously this came to a head with Elon's announcement about not accepting BTC for his cars for the time being -- but it's also a piece of 'FUD' we're seeing repeated with greater and greater intensity.”
Earlier in the week, billionaire Elon Musk Tweeted that his company Tesla would no longer accept Bitcoin for payments — a comment that set off accusations of hypocrisy, but whose contents were echoed loudly in the mainstream media.
Despite Elon’s gripes, specifics about how much “dirty” energy Bitcoin consumes is difficult to calculate, however, and even estimates based off of Chinese consumption may only paint a rough picture.
Regardless, King and crew aren’t trying to argue that Bitcoin is clean, green tech.
“I think it's important to acknowledge Bitcoin uses energy. A lot of it. That's part of its design,” says King. “The question we need to ask is: is it worth it.”
King said that those who instinctively answer “no” to that question likely haven’t done their research, and that “in a broader social, political and economic context” the case for Bitcoin’s energy consumption is self-evident.
So far the community has responded warmly, raising .5 BTC in just 48 hours. King also notes that while Bitcoin’s Lightning Network hasn’t seen the adoption some hoped for, after the project opened up to Lightning donations small backers began pouring in.
“I guess what we can see is that Lightning is very real for small Bitcoin donations, I’m glad to say,” he joked.
In the end, King’s goal isn’t to fling mud back at the FUD-sters, but instead to educate and elevate.
“I don't just want to counter the idea that this is a 'waste of energy', but make something that inspires people about just what an amazing thing Bitcoin is. FUD-busting with a higher purpose!”
A crowdfunded effort aims to set Elon Musk and the mainstream media straight.
As the headlines pile up about Bitcoin’s calamitous environmental impact, one group of investors and supporters have stepped up to the plate to defend the world’s largest digital asset with the help of a crowdfunded, FUD-fighting documentary film.
First announced by investor, podcast host, and Bitcoin fanatic Brad Mills on Twitter, the goal of the film is to act as a “definitive” argument for “why Bitcoin will transition the world to renewable energy faster than governments.”
Mills’ choice of director is Jamie King, best known for STEAL THIS FILM — a documentary series about BitTorrent and one of the earliest examples of a crowdfunded, free-to-share effort. In an interview with Cointelegraph, King said that the narrative about Bitcoin’s energy consumption pushed him into action.
“The idea for this new project, which we're raising funds for right now, came about as a result of the increasing amount of attention being paid to Bitcoin's energy usage,” King said. “Obviously this came to a head with Elon's announcement about not accepting BTC for his cars for the time being -- but it's also a piece of 'FUD' we're seeing repeated with greater and greater intensity.”
Earlier in the week, billionaire Elon Musk Tweeted that his company Tesla would no longer accept Bitcoin for payments — a comment that set off accusations of hypocrisy, but whose contents were echoed loudly in the mainstream media.
Despite Elon’s gripes, specifics about how much “dirty” energy Bitcoin consumes is difficult to calculate, however, and even estimates based off of Chinese consumption may only paint a rough picture.
Regardless, King and crew aren’t trying to argue that Bitcoin is clean, green tech.
“I think it's important to acknowledge Bitcoin uses energy. A lot of it. That's part of its design,” says King. “The question we need to ask is: is it worth it.”
King said that those who instinctively answer “no” to that question likely haven’t done their research, and that “in a broader social, political and economic context” the case for Bitcoin’s energy consumption is self-evident.
So far the community has responded warmly, raising .5 BTC in just 48 hours. King also notes that while Bitcoin’s Lightning Network hasn’t seen the adoption some hoped for, after the project opened up to Lightning donations small backers began pouring in.
“I guess what we can see is that Lightning is very real for small Bitcoin donations, I’m glad to say,” he joked.
In the end, King’s goal isn’t to fling mud back at the FUD-sters, but instead to educate and elevate.
“I don't just want to counter the idea that this is a 'waste of energy', but make something that inspires people about just what an amazing thing Bitcoin is. FUD-busting with a higher purpose!”
Disclosed: Ethereum 'Lived' With a Major Threat for 18 Months
Here's what we knew: Ethereum (ETH) executed the Berlin hardfork last month. Here's what we didn't know: it came with a solution that lowered the risk of a major DoS attack, looming over the network for more than a year and a half.
According to the May 18 post written by Ethereum developer Péter Szilágyi and the Security Lead at the Ethereum Foundation Martin Holst Swende, the Foundation "officially disclosed a severe threat against the Ethereum platform, which was a clear and present danger up until the Berlin hardfork."
This vulnerability has been an "open secret" for a long time, they said, publicly disclosed by mistake at least once. As the Berlin upgrade is done, and Geth nodes are using snapshots by default, "we estimate that the threat is low enough that transparency trumps, and it’s time to make a full disclosure about the works behind the scenes," said the report.
They added that it's "important that the community is given a chance to understand the reasoning behind changes that negatively affect the user experience, such as raising gas costs and limiting refunds."
Furthermore, as the network grew, new Ethereum Improvement Proposals (EIPs) were introduced to increase the gas prices for operations that access the trie, and to protect against DoS attacks. One of these was EIP-1884, activated in December 2019, during the Istanbul upgrade.
But in October 2019, an exploit was 'weaponized' by Ethereum security researchers Hubert Ritzdorf, Matthias Egli, and Daniel Perez, and submitted to the Ethereum bug bounty program. It was then discovered that "the changes in EIP 1884 were definitely making an impact at reducing the effects of the attack, but it was nowhere near sufficient."
Developers from Geth, Parity, and Aleth were informed about the submission that same day on a channel dedicated to cross-client security, said the report, adding that Ethereum Classic (ETC) developers also received the report. But Parity Ethereum soon left, and a new client coordination channel was created with Geth, Nethermind, OpenEthereum, and Besu.
There were two approaches to a solution:
trying to solve the problem at the protocol layer, preferably without breaking contracts and without penalizing 'good' behavior, but managing to prevent attacks;
solving it through software engineering, by changing the data models and structures within the clients.
On April 15 this year, after several rejected proposals, EIP-2929 and its companion EIP-2930 went live with the Berlin upgrade - which do not break any contract flows and which raised gas prices "only for things not already accessed" to prevent the attack.
It's relevant to note that this isn't the first time we're seeing a threat disclosed a couple of years after it had been discovered, and developers argue it's for a very good reason.
As reported, in September 2020, a research paper revealed that Bitcoin (BTC) had harbored a severe denial-of-service vulnerability - which was discovered and patched back in June 2018, without the public knowing for two years.
Per developers speaking at the time, keeping software bugs a closely guarded secret - swiftly notifying only a few essential developers/code owners or maintainers via encrypted messages - at least until a fix is rolled out, is in the best interests of the network and its users.
Here's what we knew: Ethereum (ETH) executed the Berlin hardfork last month. Here's what we didn't know: it came with a solution that lowered the risk of a major DoS attack, looming over the network for more than a year and a half.
According to the May 18 post written by Ethereum developer Péter Szilágyi and the Security Lead at the Ethereum Foundation Martin Holst Swende, the Foundation "officially disclosed a severe threat against the Ethereum platform, which was a clear and present danger up until the Berlin hardfork."
This vulnerability has been an "open secret" for a long time, they said, publicly disclosed by mistake at least once. As the Berlin upgrade is done, and Geth nodes are using snapshots by default, "we estimate that the threat is low enough that transparency trumps, and it’s time to make a full disclosure about the works behind the scenes," said the report.
They added that it's "important that the community is given a chance to understand the reasoning behind changes that negatively affect the user experience, such as raising gas costs and limiting refunds."
Furthermore, as the network grew, new Ethereum Improvement Proposals (EIPs) were introduced to increase the gas prices for operations that access the trie, and to protect against DoS attacks. One of these was EIP-1884, activated in December 2019, during the Istanbul upgrade.
But in October 2019, an exploit was 'weaponized' by Ethereum security researchers Hubert Ritzdorf, Matthias Egli, and Daniel Perez, and submitted to the Ethereum bug bounty program. It was then discovered that "the changes in EIP 1884 were definitely making an impact at reducing the effects of the attack, but it was nowhere near sufficient."
Developers from Geth, Parity, and Aleth were informed about the submission that same day on a channel dedicated to cross-client security, said the report, adding that Ethereum Classic (ETC) developers also received the report. But Parity Ethereum soon left, and a new client coordination channel was created with Geth, Nethermind, OpenEthereum, and Besu.
There were two approaches to a solution:
trying to solve the problem at the protocol layer, preferably without breaking contracts and without penalizing 'good' behavior, but managing to prevent attacks;
solving it through software engineering, by changing the data models and structures within the clients.
On April 15 this year, after several rejected proposals, EIP-2929 and its companion EIP-2930 went live with the Berlin upgrade - which do not break any contract flows and which raised gas prices "only for things not already accessed" to prevent the attack.
It's relevant to note that this isn't the first time we're seeing a threat disclosed a couple of years after it had been discovered, and developers argue it's for a very good reason.
As reported, in September 2020, a research paper revealed that Bitcoin (BTC) had harbored a severe denial-of-service vulnerability - which was discovered and patched back in June 2018, without the public knowing for two years.
Per developers speaking at the time, keeping software bugs a closely guarded secret - swiftly notifying only a few essential developers/code owners or maintainers via encrypted messages - at least until a fix is rolled out, is in the best interests of the network and its users.
Moving to Green Bitcoin May be Moving To a Two-Tier Bitcoin
Given the recent and increasing developments over the so-called 'green' bitcoin (BTC), it seems that the industry might be moving to a two-tier BTC.
As Tesla chief Elon Musk and quite a few others criticized Bitcoin over its energy consumption and the potential impact on the environment, Twitter CEO Jack Dorsey, along with active management firm Ark Investment, have argued quite the opposite - that bitcoin incentivizes renewable energy. (And Musk agreed with this before he started criticizing BTC mining.)
Meanwhile, Blockchain and crypto company DMG Blockchain Solution’s operations in British Columbia already rely on cheap hydropower from dams. In March 2021, DMG and crypto mining company Argo announced the establishment of a Bitcoin mining pool powered by hydropower - calling it the first one to be powered by green energy exclusively.
As reported, the Terra Pool will initially consist of both Argo's and DMG's hashrate, and it represents "the first-ever opportunity for the creation of 'green bitcoin'."
"We already have interest from financial institutions in those coins," DMG CEO Sheldon Bennett, said Nymag this week. Their pool is expected to be launched in a month or two.
This comes at the time when institutional interest in bitcoin rises, along with the pressure for the crypto they're interested in to be 'green' in accordance with many companies' environmental policies.
Additionally, Bennett is investing in a solar installation, expecting to begin reaping returns on that investment in a few years. Pushing into renewable is a logical way to go for them, he said. "It’s natural and logical for me to put a solar plant up because that would give me the lowest-cost power."
And Nymag concluded,
"In the future, you could imagine that bitcoin mined with coal or fossil fuels will be seen as the crypto equivalent of blood diamonds — with perhaps a premium market for those created in environmentally friendly ways. That there are cleaner and dirtier varieties of bitcoin mining might even help explain Elon Musk’s complicated views on the subject."
Curiously, this potentially reminds of the so-called virgin bitcoin - the freshly mined BTC that has not been used for any transaction, that is, that doesn't have a transaction history. As reported, some industry players claim that both reputable institutional investors and money launderers are competing to hold these "clean" bitcoins in order to be on the safe side, as there is no history to track.
The argument over the green BTC matter continues: some argue that as more miners join, the network will consume more energy, others say that each institution that buys BTC is actively increasing energy usage/CO2 emissions, while defenders claim that the critics who discuss Bitcoin's increasing footprint as the usage grows don't understand how Bitcoin works.
Now, Musk argues that audits of renewable energy used by the largest Bitcoin miners could help lessen these worries.
When Ark Investment director of research Brett Winton said that "bitcoin minting could allow solar + battery systems to economically scale to provide a larger share of grid energy," Musk agreed that it could be done over time, but that "recent extreme energy usage growth could not possibly have been done so fast with renewables."
He added that "this question is easily resolved if the top 10 hashing orgs just post audited numbers of renewable energy vs not."
Given the recent and increasing developments over the so-called 'green' bitcoin (BTC), it seems that the industry might be moving to a two-tier BTC.
As Tesla chief Elon Musk and quite a few others criticized Bitcoin over its energy consumption and the potential impact on the environment, Twitter CEO Jack Dorsey, along with active management firm Ark Investment, have argued quite the opposite - that bitcoin incentivizes renewable energy. (And Musk agreed with this before he started criticizing BTC mining.)
Meanwhile, Blockchain and crypto company DMG Blockchain Solution’s operations in British Columbia already rely on cheap hydropower from dams. In March 2021, DMG and crypto mining company Argo announced the establishment of a Bitcoin mining pool powered by hydropower - calling it the first one to be powered by green energy exclusively.
As reported, the Terra Pool will initially consist of both Argo's and DMG's hashrate, and it represents "the first-ever opportunity for the creation of 'green bitcoin'."
"We already have interest from financial institutions in those coins," DMG CEO Sheldon Bennett, said Nymag this week. Their pool is expected to be launched in a month or two.
This comes at the time when institutional interest in bitcoin rises, along with the pressure for the crypto they're interested in to be 'green' in accordance with many companies' environmental policies.
Additionally, Bennett is investing in a solar installation, expecting to begin reaping returns on that investment in a few years. Pushing into renewable is a logical way to go for them, he said. "It’s natural and logical for me to put a solar plant up because that would give me the lowest-cost power."
And Nymag concluded,
"In the future, you could imagine that bitcoin mined with coal or fossil fuels will be seen as the crypto equivalent of blood diamonds — with perhaps a premium market for those created in environmentally friendly ways. That there are cleaner and dirtier varieties of bitcoin mining might even help explain Elon Musk’s complicated views on the subject."
Curiously, this potentially reminds of the so-called virgin bitcoin - the freshly mined BTC that has not been used for any transaction, that is, that doesn't have a transaction history. As reported, some industry players claim that both reputable institutional investors and money launderers are competing to hold these "clean" bitcoins in order to be on the safe side, as there is no history to track.
The argument over the green BTC matter continues: some argue that as more miners join, the network will consume more energy, others say that each institution that buys BTC is actively increasing energy usage/CO2 emissions, while defenders claim that the critics who discuss Bitcoin's increasing footprint as the usage grows don't understand how Bitcoin works.
Now, Musk argues that audits of renewable energy used by the largest Bitcoin miners could help lessen these worries.
When Ark Investment director of research Brett Winton said that "bitcoin minting could allow solar + battery systems to economically scale to provide a larger share of grid energy," Musk agreed that it could be done over time, but that "recent extreme energy usage growth could not possibly have been done so fast with renewables."
He added that "this question is easily resolved if the top 10 hashing orgs just post audited numbers of renewable energy vs not."
Bitcoin and Ethereum Gain Traction, Altcoins Surge
Bitcoin price started a strong recovery wave from USD 31,150. BTC broke the USD 35,500 and USD 36,500 resistance levels. It is currently (12:20 PM UTC) showing positive signs, but it must clear USD 38,000 for a sustained upward move in the near term.
Besides, most major altcoins are gaining bullish momentum. ETH recovered above the USD 2,000 and USD 2,250 resistance levels. XRP/USD is gaining momentum and it might attempt a break above the USD 0.900 level.
After setting a new monthly low, bitcoin price started recovering above USD 35,000. BTC jumped above the USD 36,500 level and it even surpassed USD 37,000. If it settles above USD 38,000, there is a chance of a break above the USD 40,000 resistance level in the near term.
On the downside, the USD 36,500 level is an initial support. The first key support is now near the USD 35,000 level, below which the price might restart its decline.
Ethereum price recovered over 15% and it gained pace above the USD 2,200 level. ETH even surpassed USD 2,300 and it might test the USD 2,450 resistance level. The next major resistance is near USD 2,580, above which the price might rise towards the USD 2,800 level.
If the price fails above USD 2,500, it could start a fresh increase. The first key support is near USD 2,200 level, below which the price might revisit USD 2,000.
Binance Coin (BNB) gained over 20% and it broke the USD 285 resistance. BNB even cleared the USD 300 level and it is showing positive signs. To continue higher, the price must clear the USD 320 and USD 325 resistance levels.
Litecoin (LTC) reclaimed the USD 150 pivot level. LTC even broke the USD 160 level and it is now eyeing an upside break above USD 175. The next key resistance is near USD 180, above which the bulls could aim for a test of the USD 200 level. On the downside, the bulls might remain active near USD 150.
Dogecoin (DOGE) is back above the USD 0.300 and USD 0.312 levels. The bulls even pushed the price above the USD 0.330 level, but the main hurdle is still active near the USD 0.350 level. Any more gains could open the doors for a move towards the USD 0.400 level.
XRP price started a strong increase from the USD 0.650 support. It broke the USD 0.70 and USD 0.80 resistance levels. The bulls are now aiming for a break above the USD 0.90 level and a test of the key USD 1.0 resistance.
Many altcoins climbed over 20%, including MATIC, MKR, FTM, ONE, RUNE, HNT, BAKE, CAKE, ATOM, XLM, REV, TEL, VET, LUNA, LINK, YFI, and OMG. Out of these, MATIC surged over 55% and it broke the USD 1.40 level.
To sum up, bitcoin price is showing positive signs above USD 36,500. If BTC settles above USD 38,000, it could increase the chances of a push above USD 40,000.
Bitcoin price started a strong recovery wave from USD 31,150. BTC broke the USD 35,500 and USD 36,500 resistance levels. It is currently (12:20 PM UTC) showing positive signs, but it must clear USD 38,000 for a sustained upward move in the near term.
Besides, most major altcoins are gaining bullish momentum. ETH recovered above the USD 2,000 and USD 2,250 resistance levels. XRP/USD is gaining momentum and it might attempt a break above the USD 0.900 level.
After setting a new monthly low, bitcoin price started recovering above USD 35,000. BTC jumped above the USD 36,500 level and it even surpassed USD 37,000. If it settles above USD 38,000, there is a chance of a break above the USD 40,000 resistance level in the near term.
On the downside, the USD 36,500 level is an initial support. The first key support is now near the USD 35,000 level, below which the price might restart its decline.
Ethereum price recovered over 15% and it gained pace above the USD 2,200 level. ETH even surpassed USD 2,300 and it might test the USD 2,450 resistance level. The next major resistance is near USD 2,580, above which the price might rise towards the USD 2,800 level.
If the price fails above USD 2,500, it could start a fresh increase. The first key support is near USD 2,200 level, below which the price might revisit USD 2,000.
Binance Coin (BNB) gained over 20% and it broke the USD 285 resistance. BNB even cleared the USD 300 level and it is showing positive signs. To continue higher, the price must clear the USD 320 and USD 325 resistance levels.
Litecoin (LTC) reclaimed the USD 150 pivot level. LTC even broke the USD 160 level and it is now eyeing an upside break above USD 175. The next key resistance is near USD 180, above which the bulls could aim for a test of the USD 200 level. On the downside, the bulls might remain active near USD 150.
Dogecoin (DOGE) is back above the USD 0.300 and USD 0.312 levels. The bulls even pushed the price above the USD 0.330 level, but the main hurdle is still active near the USD 0.350 level. Any more gains could open the doors for a move towards the USD 0.400 level.
XRP price started a strong increase from the USD 0.650 support. It broke the USD 0.70 and USD 0.80 resistance levels. The bulls are now aiming for a break above the USD 0.90 level and a test of the key USD 1.0 resistance.
Many altcoins climbed over 20%, including MATIC, MKR, FTM, ONE, RUNE, HNT, BAKE, CAKE, ATOM, XLM, REV, TEL, VET, LUNA, LINK, YFI, and OMG. Out of these, MATIC surged over 55% and it broke the USD 1.40 level.
To sum up, bitcoin price is showing positive signs above USD 36,500. If BTC settles above USD 38,000, it could increase the chances of a push above USD 40,000.
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Community of crypto and cybersecurity enthusiasts united to keep not only themselves but also their friends and family safe.
Official Discord: https://discord.gg/hacken
🔸$HAI: https://hai.hacken.io
DeFi news.
Dispersion Holdings, a publicly-traded decentralized finance (DeFi) fund established by the co-founders of listed crypto mining firm Argo Blockchain, made its debut on London’s Aquis Stock Exchange Growth Market (AQSE). The shares are traded under the ticker symbol DEFI, said the press release. The company was admitted to the access segment of the AQSE following a placing and subnoscription that raised a combined GBP 9m (USD 12.5m), and a pre-IPO fundraising that raised GBP 2.2m (USD 3M), before expenses. On admission, the company received 612.5m ordinary shares in issue, valuing Dispersion Holdings at a market capitalization of approximately GBP 18m (USD 25m).
Inverse Finance’s governance has approved a proposal to acquire Tonic Finance in a USD 1.6m deal. The members of the Inverse Finance DAO voted on a proposal to acquire Tonic and hire its founder and lead developer Tony Snark, quickly surpassing the 4,000 token approval mark. It seems that no votes were cast against the proposal. Inverse described the event as "the first on-chain DAO acquisition vote in the history of crypto."
Automated market makers (AMMs) have catalyzed the explosion of DeFi over the past year, but they are burdened with problems, wrote Haseeb Qureshi, an investor at Dragonfly Capital. What market makers needed was a platform to let them efficiently serve DeFi order flow, said Qureshi, introducing Hashflow - a protocol that connects users on-chain to the top crypto market makers. He describes it as a decentralized shadow brokerage — it connects users with the "world’s most elite market makers," thus creating a portal to all of the liquidity in centralized finance, and doing so cheaper as well, he claimed. Dragonfly co-led Hashflow’s seed round.
Dispersion Holdings, a publicly-traded decentralized finance (DeFi) fund established by the co-founders of listed crypto mining firm Argo Blockchain, made its debut on London’s Aquis Stock Exchange Growth Market (AQSE). The shares are traded under the ticker symbol DEFI, said the press release. The company was admitted to the access segment of the AQSE following a placing and subnoscription that raised a combined GBP 9m (USD 12.5m), and a pre-IPO fundraising that raised GBP 2.2m (USD 3M), before expenses. On admission, the company received 612.5m ordinary shares in issue, valuing Dispersion Holdings at a market capitalization of approximately GBP 18m (USD 25m).
Inverse Finance’s governance has approved a proposal to acquire Tonic Finance in a USD 1.6m deal. The members of the Inverse Finance DAO voted on a proposal to acquire Tonic and hire its founder and lead developer Tony Snark, quickly surpassing the 4,000 token approval mark. It seems that no votes were cast against the proposal. Inverse described the event as "the first on-chain DAO acquisition vote in the history of crypto."
Automated market makers (AMMs) have catalyzed the explosion of DeFi over the past year, but they are burdened with problems, wrote Haseeb Qureshi, an investor at Dragonfly Capital. What market makers needed was a platform to let them efficiently serve DeFi order flow, said Qureshi, introducing Hashflow - a protocol that connects users on-chain to the top crypto market makers. He describes it as a decentralized shadow brokerage — it connects users with the "world’s most elite market makers," thus creating a portal to all of the liquidity in centralized finance, and doing so cheaper as well, he claimed. Dragonfly co-led Hashflow’s seed round.
Bitcoin Mining Difficulty Set For Sharp Drop This Weekend
Bitcoin (BTC) mining difficulty may be knocked out of its just recently gained all-time high this weekend, back to a March level.
If this adjustment goes as currently (16:00 UTC) estimated by mining pool BTC, mining difficulty - which is the measure of how hard it is to compete for mining rewards - will drop 13.58%. This will land it to 21.64 T, the lowest it's been since mid-March.
This would be only the third drop in the mining difficulty this year, and the largest one.
Additionally, it comes after the latest all-time high (ATH) of 25.05 T, hit during the last adjustment two weeks ago. This was the strongest move upwards since October 2017.
All of this is happening amidst the latest selloff seen in the crypto markets, which pulled BTC down by 43% from its April 14 ATH of USD 64,804 (per CoinGecko) to USD 36,813 at the time of writing.
Meanwhile, according to BitInfoCharts, hashrate, or the computational power of the network, had dropped around 21% between the previous adjustment and May 24. In the three days after that, the 7-day simple moving average hashrate went up 3% to nearly 130 Eh/s.
The mining difficulty of Bitcoin is adjusted around every two weeks (that is, every 2016 blocks) to maintain the normal 10-minute block time. The 7-day simple moving average block time on May 27 was just above 12 minutes.
Looking at the data provided by ByteTree, miners have spent more coins than they held in the past several weeks. In the past day, however, they held BTC 38.
Bitcoin (BTC) mining difficulty may be knocked out of its just recently gained all-time high this weekend, back to a March level.
If this adjustment goes as currently (16:00 UTC) estimated by mining pool BTC, mining difficulty - which is the measure of how hard it is to compete for mining rewards - will drop 13.58%. This will land it to 21.64 T, the lowest it's been since mid-March.
This would be only the third drop in the mining difficulty this year, and the largest one.
Additionally, it comes after the latest all-time high (ATH) of 25.05 T, hit during the last adjustment two weeks ago. This was the strongest move upwards since October 2017.
All of this is happening amidst the latest selloff seen in the crypto markets, which pulled BTC down by 43% from its April 14 ATH of USD 64,804 (per CoinGecko) to USD 36,813 at the time of writing.
Meanwhile, according to BitInfoCharts, hashrate, or the computational power of the network, had dropped around 21% between the previous adjustment and May 24. In the three days after that, the 7-day simple moving average hashrate went up 3% to nearly 130 Eh/s.
The mining difficulty of Bitcoin is adjusted around every two weeks (that is, every 2016 blocks) to maintain the normal 10-minute block time. The 7-day simple moving average block time on May 27 was just above 12 minutes.
Looking at the data provided by ByteTree, miners have spent more coins than they held in the past several weeks. In the past day, however, they held BTC 38.
Jamie Dimon Says Stay Away From Cryptocurrencies – Is He Worried About The Transparency That Crypto And Blockchain Bring?
Jamie Dimon, CEO of JP Morgan, the largest bank in the US, said in a congressional hearing last Thursday that people should “stay away” from cryptocurrencies, even whilst admitting that his bank is exploring ways to enable clients to buy and sell them. However, he did not touch on the subject of how his bank has been repeatedly fined for manipulating markets.
It was reported last Thursday that JP Morgan CEO Jamie Dimon had warned investors to stay away from cryptocurrencies, and had urged regulatory authorities to scrutinise them more closely.
Dimon admits that his bank is preparing to provide a Bitcoin fund for the benefit of its private wealth clients. This seems quite a turn-around for a man who stated that he would fire any of his traders in a second for trading it. He also called it a “fraud” back in 2017.
He does say though that his views on Bitcoin and crypto “do not weigh” on the services that JP Morgan offers to clients – an odd statement to make, considering that he is the CEO of the bank.
He stated that in his view cryptocurrency could benefit from a more rigid regulatory framework. Therefore, it might also be wondered whether he would think the same of his own bank in relation to manipulating markets?
As recently as last September JP Morgan was fined a record amount of nearly a billion dollars for manipulating gold, silver and treasuries markets. This involved “spoofing” which was explained in a Bloomberg article released at the time:
“Spoofing typically involves flooding derivatives markets with orders that traders don’t intend to execute to trick others into moving prices in a desired direction.”
In 2019 JP Morgan and three other banks were fined a total of 1.07 billion euros for rigging foreign exchange markets. The group were dubbed the “Banana Split” Cartel.
EU Commissioner Margrethe Vestager, said at the time:
“Today we have fined Barclays, The Royal Bank of Scotland, Citigroup, J.P. Morgan and MUFG Bank and these cartel decisions send a clear message that the Commission will not tolerate collusive behavior in any sector of the financial markets. The behavior of these banks undermined the integrity of the sector at the expense of the European economy and consumers,”
The Los Angeles Times reported back in 2015 on how JP Morgan and four other banks pleaded guilty on U.S. felony charges for rigging foreign currency exchange rates. The fines in this case amounted to $5.7 billion.
Attorney General Loretta Lynch said after the case:
“The penalty all these banks will now pay is fitting considering the long-running and egregious nature of their anti-competitive conduct,” she said at a Washington news conference.
“It is commensurate with the pervasive harm done. And it should deter competitors in the future from chasing profits without regard to fairness, to the law or to the public welfare,”
A quick search on the internet can find many unethical or criminal cases involving Jamie Dimon’s JP Morgan. His bank has managed to get away with so much wrong-doing due to the obscure nature of banking. It might be supposed that the advent of blockchain and the cryptocurrencies that run on top of it will bring a massive degree of transparency to proceedings. Might this worry Mr Dimon?
Jamie Dimon, CEO of JP Morgan, the largest bank in the US, said in a congressional hearing last Thursday that people should “stay away” from cryptocurrencies, even whilst admitting that his bank is exploring ways to enable clients to buy and sell them. However, he did not touch on the subject of how his bank has been repeatedly fined for manipulating markets.
It was reported last Thursday that JP Morgan CEO Jamie Dimon had warned investors to stay away from cryptocurrencies, and had urged regulatory authorities to scrutinise them more closely.
Dimon admits that his bank is preparing to provide a Bitcoin fund for the benefit of its private wealth clients. This seems quite a turn-around for a man who stated that he would fire any of his traders in a second for trading it. He also called it a “fraud” back in 2017.
He does say though that his views on Bitcoin and crypto “do not weigh” on the services that JP Morgan offers to clients – an odd statement to make, considering that he is the CEO of the bank.
He stated that in his view cryptocurrency could benefit from a more rigid regulatory framework. Therefore, it might also be wondered whether he would think the same of his own bank in relation to manipulating markets?
As recently as last September JP Morgan was fined a record amount of nearly a billion dollars for manipulating gold, silver and treasuries markets. This involved “spoofing” which was explained in a Bloomberg article released at the time:
“Spoofing typically involves flooding derivatives markets with orders that traders don’t intend to execute to trick others into moving prices in a desired direction.”
In 2019 JP Morgan and three other banks were fined a total of 1.07 billion euros for rigging foreign exchange markets. The group were dubbed the “Banana Split” Cartel.
EU Commissioner Margrethe Vestager, said at the time:
“Today we have fined Barclays, The Royal Bank of Scotland, Citigroup, J.P. Morgan and MUFG Bank and these cartel decisions send a clear message that the Commission will not tolerate collusive behavior in any sector of the financial markets. The behavior of these banks undermined the integrity of the sector at the expense of the European economy and consumers,”
The Los Angeles Times reported back in 2015 on how JP Morgan and four other banks pleaded guilty on U.S. felony charges for rigging foreign currency exchange rates. The fines in this case amounted to $5.7 billion.
Attorney General Loretta Lynch said after the case:
“The penalty all these banks will now pay is fitting considering the long-running and egregious nature of their anti-competitive conduct,” she said at a Washington news conference.
“It is commensurate with the pervasive harm done. And it should deter competitors in the future from chasing profits without regard to fairness, to the law or to the public welfare,”
A quick search on the internet can find many unethical or criminal cases involving Jamie Dimon’s JP Morgan. His bank has managed to get away with so much wrong-doing due to the obscure nature of banking. It might be supposed that the advent of blockchain and the cryptocurrencies that run on top of it will bring a massive degree of transparency to proceedings. Might this worry Mr Dimon?
US Financial Advisers Up Crypto Recommendations as Interest Rises
US-based financial advisers are increasingly recommending investments in cryptocurrencies to their clients, and less exposure to legacy finance investment products such as exchange-traded funds (ETFs) and individual stocks, according to a recent survey.
This approach is in line with the rising interest demonstrated by their customer base, the report by the US-based Financial Planning Association (FPA) and the Journal of Financial Planning said.
The report comprises a survey that was fielded in March 2021 (or before the strong market correction in April and May), and prepared based on the 529 online responses collected from financial advisers who offer clients investment advice and/or implement investment recommendations.
The survey indicated that, while US financial advisers remain cautious on digital assets, "it seems they may be shifting to embracing them due to a rising client demand."
Cryptocurrencies were first added to the survey in 2018, said the report, when 1.4% of the then surveyed 223 advisers said they were currently using or recommending crypto with clients,” according to the association.
While in 2019 and 2020 that percentage dropped to below 1%, it then increased to 14% of the 529 surveyed advisers indicating that they are using or recommending cryptocurrencies in 2021.
And the number may increase.
“More than a quarter (26%) of advisers indicated in the 2021 survey that they plan to increase their use/recommendation of cryptocurrencies over the next 12 months," said the report. This is up from 0% indicated in 2020.
It further found that 49% of advisers indicated that, in the last six months, clients have asked them about investing in cryptocurrencies. This is up from 17% in 2020.
In contrast with cryptocurrencies, legacy finance investment products, such as ETFs, saw a lower rate of recommendations this year. Some 64% of financial advisors said they suggest investing in ETFs to their clients this year, down from 85% in 2020.
Cash and equivalents, as well as individual stocks, are also less popular in 2021, down from 75% to 57%, and 51% to 44%, respectively.
Among the vehicles currently used/recommended to clients, only three saw a rise in the percentages since last year: cryptocurrencies are leading by far, followed by precious metals (5% to 9%) and private equity funds (9% to 12%).
Further findings include that:
1.8% in the 2018 survey said cryptocurrencies were a viable investment option that has a place in a portfolio, compared to 28% of respondents in 2021;
18% in 2018 said it was a fad that is best avoided, compared to 6% this year 2021;
24% in 2018 said it was "a gamble," while 28% said the same this year;
48% read the occasional news stories on cryptocurrencies and are somewhat comfortable conversing about it, 33% actively educate themselves on the topic and are comfortable conversing about it, and 4% said they don’t know anything about cryptos and don’t talk about them with their clients.
US-based financial advisers are increasingly recommending investments in cryptocurrencies to their clients, and less exposure to legacy finance investment products such as exchange-traded funds (ETFs) and individual stocks, according to a recent survey.
This approach is in line with the rising interest demonstrated by their customer base, the report by the US-based Financial Planning Association (FPA) and the Journal of Financial Planning said.
The report comprises a survey that was fielded in March 2021 (or before the strong market correction in April and May), and prepared based on the 529 online responses collected from financial advisers who offer clients investment advice and/or implement investment recommendations.
The survey indicated that, while US financial advisers remain cautious on digital assets, "it seems they may be shifting to embracing them due to a rising client demand."
Cryptocurrencies were first added to the survey in 2018, said the report, when 1.4% of the then surveyed 223 advisers said they were currently using or recommending crypto with clients,” according to the association.
While in 2019 and 2020 that percentage dropped to below 1%, it then increased to 14% of the 529 surveyed advisers indicating that they are using or recommending cryptocurrencies in 2021.
And the number may increase.
“More than a quarter (26%) of advisers indicated in the 2021 survey that they plan to increase their use/recommendation of cryptocurrencies over the next 12 months," said the report. This is up from 0% indicated in 2020.
It further found that 49% of advisers indicated that, in the last six months, clients have asked them about investing in cryptocurrencies. This is up from 17% in 2020.
In contrast with cryptocurrencies, legacy finance investment products, such as ETFs, saw a lower rate of recommendations this year. Some 64% of financial advisors said they suggest investing in ETFs to their clients this year, down from 85% in 2020.
Cash and equivalents, as well as individual stocks, are also less popular in 2021, down from 75% to 57%, and 51% to 44%, respectively.
Among the vehicles currently used/recommended to clients, only three saw a rise in the percentages since last year: cryptocurrencies are leading by far, followed by precious metals (5% to 9%) and private equity funds (9% to 12%).
Further findings include that:
1.8% in the 2018 survey said cryptocurrencies were a viable investment option that has a place in a portfolio, compared to 28% of respondents in 2021;
18% in 2018 said it was a fad that is best avoided, compared to 6% this year 2021;
24% in 2018 said it was "a gamble," while 28% said the same this year;
48% read the occasional news stories on cryptocurrencies and are somewhat comfortable conversing about it, 33% actively educate themselves on the topic and are comfortable conversing about it, and 4% said they don’t know anything about cryptos and don’t talk about them with their clients.
El Salvador Hitches Economic Wagon To Crypto: President Announces Support To Make Bitcoin Legal Tender
Earlier today, President Bukele announced his support for legislation that is set to make Bitcoin legal tender during the Miami Bitcoin conference. He also took to Twitter to further elaborate on his decision.
He stated,
“#Bitcoin has a market cap of $680 billion dollars. If 1% of it is invested in El Salvador, that would increase our GDP by 25%.”
This means that the citizens of El Salvador will be able to use Bitcoin as valid payment in exchange for goods and services. This landmark decision could put El Salvador on the global crypto map by shifting a largely cash-based economy to an inclusive and transparent digital economy, where the people’s bank account would be on their phones. This would be a turning point for the country’s economy, considering the fact that over 70% of the population do not have bank accounts.
Further, President Bukele also stated that by using BTC as legal tender the amount received by more than a million low-income families will increase in the equivalent of billions of dollars every year, thus improving lives across the country.
President Bukele also explained that with the entire population of El Salvador using BTC for their transactions, Bitcoin would have a potential of 10 million new users.
According to Blockstream CEO Adam Back,
“It was an inevitability, but here already: the first country on track to make bitcoin legal tender. Another milestone for Bitcoin and El Salvador. We're pleased to help El Salvador on its journey towards adoption of the Bitcoin Standard,”
This could be the next big milestone for BTC, as banking systems around the world would likely treat it as any other foreign currency.
If the legislation is passed by El Salvador Congress, then BTC would legally become money under US law.
According to Founder & CEO of Avanti Financial Group, Caitlin Long,
“IF #ElSalvador does pass legislation to recognize #bitcoin as legal tender, #BTC would v likely become MONEY under US commercial law.”
She also stated that this could be a work-around the fact that it is not possible to make BTC a legal tender anywhere in the United States without amending the constitution. According to Long, if BTC becomes legal tender in El Salvador, then the US would be able to consider the crypto as ‘money’ under commercial law and as ‘cash’ under accounting rules.
American venture capital investor, and founder of Draper Fisher Jurvetson, tweeted that “Entrepreneurs and investors will be on the next flights to El Salvador. Brilliant government move.”
Investor and Entrepreneur Anthony Pompliano believes that this is just the start for countries to start legalizing Bitcoin. He tweeted,
“This is the first country to take such a courageous step, but it won’t be the last…Bitcoin is inevitable.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Earlier today, President Bukele announced his support for legislation that is set to make Bitcoin legal tender during the Miami Bitcoin conference. He also took to Twitter to further elaborate on his decision.
He stated,
“#Bitcoin has a market cap of $680 billion dollars. If 1% of it is invested in El Salvador, that would increase our GDP by 25%.”
This means that the citizens of El Salvador will be able to use Bitcoin as valid payment in exchange for goods and services. This landmark decision could put El Salvador on the global crypto map by shifting a largely cash-based economy to an inclusive and transparent digital economy, where the people’s bank account would be on their phones. This would be a turning point for the country’s economy, considering the fact that over 70% of the population do not have bank accounts.
Further, President Bukele also stated that by using BTC as legal tender the amount received by more than a million low-income families will increase in the equivalent of billions of dollars every year, thus improving lives across the country.
President Bukele also explained that with the entire population of El Salvador using BTC for their transactions, Bitcoin would have a potential of 10 million new users.
According to Blockstream CEO Adam Back,
“It was an inevitability, but here already: the first country on track to make bitcoin legal tender. Another milestone for Bitcoin and El Salvador. We're pleased to help El Salvador on its journey towards adoption of the Bitcoin Standard,”
This could be the next big milestone for BTC, as banking systems around the world would likely treat it as any other foreign currency.
If the legislation is passed by El Salvador Congress, then BTC would legally become money under US law.
According to Founder & CEO of Avanti Financial Group, Caitlin Long,
“IF #ElSalvador does pass legislation to recognize #bitcoin as legal tender, #BTC would v likely become MONEY under US commercial law.”
She also stated that this could be a work-around the fact that it is not possible to make BTC a legal tender anywhere in the United States without amending the constitution. According to Long, if BTC becomes legal tender in El Salvador, then the US would be able to consider the crypto as ‘money’ under commercial law and as ‘cash’ under accounting rules.
American venture capital investor, and founder of Draper Fisher Jurvetson, tweeted that “Entrepreneurs and investors will be on the next flights to El Salvador. Brilliant government move.”
Investor and Entrepreneur Anthony Pompliano believes that this is just the start for countries to start legalizing Bitcoin. He tweeted,
“This is the first country to take such a courageous step, but it won’t be the last…Bitcoin is inevitable.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
'Locked-Out' Users Sue Coinbase For North of USD 5M
Six Coinbase users are taking the crypto exchange giant to court to seek more than USD 5m in compensation for themselves and other users who were allegedly locked out of their accounts for several months or longer at a time.
According to a complaint filed on Friday in San Francisco, USA, federal court, and first reported by Decrypt, the plaintiffs - Michael Leone, Joseph Treseder, Travis Reece, David Beavers, Fazal Us Saboor Ali, and Keisha Pinkney - accuse the exchange of preventing them from accessing their accounts for arbitrary reasons and prolonged amounts of time, as they have been unable to “invest, spend, save, earn, and use or even withdraw their funds” from the platform.
The exchange violated its “duty to provide access to the Coinbase platform to conduct authorized transactions,” they claim.
Therefore, they seek "any and all available relief, including equitable relief and recovery of damages caused by Defendants’ actions," said the document, adding that "the amount placed in controversy by the Complaint exceeds, in the aggregate, USD 5 million, exclusive of interests and costs."
The case highlights ongoing reported Coinbase's customer support issues. All plaintiffs claim that they, after they were barred from using the service, they contacted customer support, which, in most cases, responded with an automated response which said that their issues were “under review.”
In some cases, customers were forced to go through the identity verification process once more, while other claims revolve around login issue, as some of the plaintiffs claim to have received error messages when trying to log in to the platform - even though the support staff claimed that the account issues had been solved, they said.
In some cases, the plaintiffs claim, they had regained access to their accounts but found that they had no crypto funds, or their accounts were erased without explanation.
As a result of such "negligence," the plaintiffs and class members were locked from trading and in some cases, regained access only when the value of their cryptoassets has dropped significantly.
“Defendant’s conduct amounted to gross negligence where they breached the duties as alleged herein and by failing to create and enforce an adequate plan to prevent security breaches and lock outs that prevent Plaintiffs and the Putative Class from accessing their Coinbase accounts and/or funds where they know that, “as a newer asset class, crypto is widely considered to be volatile –with the potential for significant upward and downward movements over shorter time periods,” and knew or should have known that their breaches would likely inflict substantial damages upon its consumers,” the complaint reads.
In late March, Alesia Haas, the company’s chief financial officer (CFO), said that the exchange is hiring new customer support agents, as well as making investments on the product side "to reduce the friction that we see a lot of customers call in and offer complaints about."
Six Coinbase users are taking the crypto exchange giant to court to seek more than USD 5m in compensation for themselves and other users who were allegedly locked out of their accounts for several months or longer at a time.
According to a complaint filed on Friday in San Francisco, USA, federal court, and first reported by Decrypt, the plaintiffs - Michael Leone, Joseph Treseder, Travis Reece, David Beavers, Fazal Us Saboor Ali, and Keisha Pinkney - accuse the exchange of preventing them from accessing their accounts for arbitrary reasons and prolonged amounts of time, as they have been unable to “invest, spend, save, earn, and use or even withdraw their funds” from the platform.
The exchange violated its “duty to provide access to the Coinbase platform to conduct authorized transactions,” they claim.
Therefore, they seek "any and all available relief, including equitable relief and recovery of damages caused by Defendants’ actions," said the document, adding that "the amount placed in controversy by the Complaint exceeds, in the aggregate, USD 5 million, exclusive of interests and costs."
The case highlights ongoing reported Coinbase's customer support issues. All plaintiffs claim that they, after they were barred from using the service, they contacted customer support, which, in most cases, responded with an automated response which said that their issues were “under review.”
In some cases, customers were forced to go through the identity verification process once more, while other claims revolve around login issue, as some of the plaintiffs claim to have received error messages when trying to log in to the platform - even though the support staff claimed that the account issues had been solved, they said.
In some cases, the plaintiffs claim, they had regained access to their accounts but found that they had no crypto funds, or their accounts were erased without explanation.
As a result of such "negligence," the plaintiffs and class members were locked from trading and in some cases, regained access only when the value of their cryptoassets has dropped significantly.
“Defendant’s conduct amounted to gross negligence where they breached the duties as alleged herein and by failing to create and enforce an adequate plan to prevent security breaches and lock outs that prevent Plaintiffs and the Putative Class from accessing their Coinbase accounts and/or funds where they know that, “as a newer asset class, crypto is widely considered to be volatile –with the potential for significant upward and downward movements over shorter time periods,” and knew or should have known that their breaches would likely inflict substantial damages upon its consumers,” the complaint reads.
In late March, Alesia Haas, the company’s chief financial officer (CFO), said that the exchange is hiring new customer support agents, as well as making investments on the product side "to reduce the friction that we see a lot of customers call in and offer complaints about."