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Economics Nobel Laureate Robert Shiller Examines Bitcoin in Historical Context

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Economics Nobel Laureate Robert Shiller Examines Bitcoin in Historical Context

Economics

Professor Robert Shiller, who received the 2013 Nobel prize in economics and is famous for the Case-Shiller Index, published an article on Monday talking about the way the allure of bitcoin fits previous attempts to reinvent money.

Also Read:  Crypto Revolution Starts Reshaping Global Politics

Historical Precedents

Economics Nobel Laureate Robert Shiller Examines Bitcoin in Historical ContextThe main question Shiller was trying to answer is how cryptocurrency users can maintain a high level of enthusiasm in the face of constant warnings that it’s all just a big scam. Instead of comparing bitcoin to past technological solutions, as has been done many times before, he puts it in the context of time-based and electricity-backed experimental forms of alternative money.

Putting the technology of Bitcoin on the same level as primarily political movements, he also compared it to attempts to reshape how governments and economies operate. And while novel ideas by communist and technocratic thinkers have failed, the Euro – which was devised to help unite former warring nations – is still around.

Revolutionary Zeal Is Not Enough

Economics Nobel Laureate Robert Shiller Examines Bitcoin in Historical Context
Nobel Prize Laureate Robert J. Shiller

After reviewing these past examples, Shiller explains that: “Each of these monetary innovations has been coupled with a unique technological story. But, more fundamentally, all are connected with a deep yearning for some kind of revolution in society. The cryptocurrencies are a statement of faith in a new community of entrepreneurial cosmopolitans who hold themselves above national governments, which are viewed as the drivers of a long train of inequality and war.”

“And, as in the past, the public’s fascination with cryptocurrencies is tied to a sort of mystery, like the mystery of the value of money itself, consisting in the new money’s connection to advanced science. Practically no one, outside of computer science departments, can explain how cryptocurrencies work. That mystery creates an aura of exclusivity, gives the new money glamour, and fills devotees with revolutionary zeal. None of this is new, and, as with past monetary innovations, a compelling story may not be enough,” he concluded.

Whether it’s true or not that only computer scientists understand cryptocurrencies today, it is certainly accepted that having a story is not enough by itself, which is why bitcoin entrepreneurs continue to work on exciting use cases that are only made possible with this revolutionary technology.

What should the bitcoin community make of the professor’s observations? Share your thoughts in the comments section below. 


Images courtesy of Shutterstock, Bengt Nyman.


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Golix Exchange Files Lawsuit Against Reserve Bank of Zimbabwe’s Cryptocurrency Ban

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Golix Exchange Files Lawsuit Against Reserve Bank of Zimbabwe's Cryptocurrency Ban

News

On May 13 2018, the Reserve Bank Of Zimbabwe (RBZ) issued guidelines in a circular that detailed cryptocurrency activities taking place within the country are now banned. The RBZ further stated that domestic digital currency operations had sixty days to become compliant. Local reports now reveal the Zimbabwe-based cryptocurrency exchange Golix plans to take the central bank to court for banning digital assets, as the firm emphasizes that the RBZ has no authority to ban cryptocurrencies across the country.

Also read: How Bitcoin Cash Can Avoid the Same Mistakes as Bitcoin Core, Part 4 of 4

Reserve Bank Of Zimbabwe Faces Legal Backlash

Last week cryptocurrency enthusiasts and businesses in Zimbabwe got some bad news as the central bank decided to ban all digital currency activities. The RBZ warned about the ‘risks’ involved with cryptocurrencies and told financial institutions not to deal with digital asset businesses.

Golix Exchange Files Lawsuit Against Reserve Bank of Zimbabwe's Cryptocurrency Ban
The Reserve Bank of Zimbabwe released a circular which effectively banned cryptocurrencies this month.

The ban would affect Localbitcoins trades within the region alongside the country’s three exchanges Golix, Bitfinance, and Styx24. News.Bitcoin.com spoke with Golix representative Tawanda Kembo last month when the exchange installed a Bitcoin ATM. Our newsdesk also received an email from the Golix exchange shortly after the ban.         

“On Friday, the Reserve Bank of Zimbabwe issued a statement to all banks instructing them to stop providing bank accounts to cryptocurrency companies within the next sixty days,” the Golix exchange explains.  

This means that unless the central bank changes its position prior to the expiry of the sixty-day window, you will not be able to send or receive fiat currencies for cryptocurrency trades.  

Golix Exchange Files Lawsuit Against Reserve Bank of Zimbabwe's Cryptocurrency Ban
According to the regional publication Zimeye.net, Golix is taking the Reserve Bank of Zimbabwe to the High Courts.

Golix Files a Lawsuit Against the RBZ with the High Court

Shortly after the email, the regional publication Zimeye.net reported that Golix was now planning to “slap a lawsuit” against the RBZ for issuing a countrywide cryptocurrency ban. Golix says they are taking the central bank to the High Court and state that the RBZ governor has no experience with managing a local currency giving him no right to ban it. The exchange argues that the central bank has no authority to ban digital currencies and only parliament has the means to make such laws.  

”I submit that the ban in effect outlaws and classifies as illegal Applicant’s operations,” a Golix official said to the Zimeye publication.

The respondents are in fact purporting to classify the trade in cryptocurrency as illegal. That will amount to law making, a function that belongs to the legislature and not the respondents. Respondents are thus clandestinely usurping Parliament’s law making powers.

Golix Has Yet to Receive Instructions From Their Bank — Continues Business as Usual

News.Bitcoin.com reached out to Golix for further information on this lawsuit but has yet to hear back from the exchange. According to other reports, even though the RBZ has issued a ban in its circular to banking institutions concerning virtual currencies, Golix is still organizing an initial coin offering (ICO). “Thus far we are yet to receive instructions from our bank as to what will happen, if at all anything. Once we do, we will update,” an official from the Golix exchange detailed.

What do you think about the Golix exchange slapping a lawsuit against the Reserve Bank of Zimbabwe? Let us know your thoughts on this subject in the comments below.


Images via Shutterstock, Pixabay, and Golix. 


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Bitcoin Owning Contractors With U.S. Security Clearance May be Flagged ‘Risky’

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Bitcoin Owning Contractors With U.S. Security Clearance May be Flagged 'Risky'

News

According to multiple reports, the Pentagon and the Defense Department are debating on whether or not cryptocurrency ownership is a problem for those who have U.S. security clearances and those applying for these privileges. The U.S. agencies may define digital currency owners as a ‘security risk’ in order to protect foreign and domestic classified information.

Also read: BCH Miners Discuss Funding Development With a Fraction of Block Rewards    

If You Own Bitcoin and Have U.S. Security Clearance Then You Might Have a Problem

Bitcoin Owning Contractors With U.S. Security Clearance May be Flagged 'Risky'American bureaucrats are deliberating on whether or not they should flag cryptocurrency investors who have special security clearances to classified government information. An individual who owns a cryptocurrency like bitcoin or ethereum, may be considered “risky” in the eyes of the Pentagon. This past February the Defense Security Service (DSS) and the Pentagon revealed they were working on guidelines for reporting cryptocurrency ownership. According to another report published on May 22, the debate is currently being argued and government contractors are already upset about the backlog of other security clearance issues.

A director for Financial Services Innovation at Carnegie Mellon University, Param Vir Singh, believes cryptocurrencies do have security risks.      

“There are a lot of good things about cryptocurrencies, but at the same time there are these security risks,” explained Param Vir Singh this week.  

Think about a knife: It could be used for good things and it can be used for bad things as well.

Bitcoin Owning Contractors With U.S. Security Clearance May be Flagged 'Risky'

DSS Recommends Cryptocurrency Owners With Security Clearance Should Report Their Virtual Currency Holdings 

Further, the columnist Adam Reese recently reviewed an email by a DSS employee named Chad M. Campbell — which indicates that the security specialist recommends individuals who apply for U.S. security clearance need to report their cryptocurrency holdings on the agency’s Standard Form 86 (SF86). Additionally, the reporter received a reply from Defense Security Service Public Affairs which stated:   

“DSS has fielded a number of questions from industry as to whether ownership of cryptocurrencies, such as Bitcoin, should be reported by cleared persons or security clearance applicants,” explains the Defense Department.   

There is no current Department of Defense guidance related to the reporting of ownership of cryptocurrencies. DSS is working with DoD policy offices for further clarification and once such guidance is issued, DSS will ensure the widest dissemination to industry. Additionally, the email [Campbell’s email] was an internal discussion document which was not intended to serve as policy guidance.

University of California Researcher: ‘Bitcoin Owners Deserve Suspicion’

Individuals and organizations see the security clearance/cryptocurrency discussion as a controversial subject as opinions differ depending on who is discussing the matter. Steve Aftergood of the Federation of American Scientists believes holding cryptocurrencies or other behaviors don’t necessarily make a person risky. “I don’t know if the government has a clear understanding of what makes a person actually a security risk — Instead they look at proxy factors like excessive debt, drug use and contact with the criminal justice system, which don’t necessarily translate to risk,” Aftergood explains.

However, a researcher at the University of California, Nicholas Weaver, disagrees and thinks digital currency holders should be suspects. “Since Bitcoin’s only real use is to buy drugs, etc., it deserves suspicion,” Weaver said this week. It’s also worth noting that some of these DSS and Pentagon officials who firmly believe cryptocurrencies are a ‘security risk’ have no problem with defense contractors who shill centralized blockchains. The DSS is not calling blockchain projects sponsored by Booze Hamilton Allen or the company’s employees suspicious — Nope just bitcoin and public blockchains seem to be a threat at the moment.

What do you think about the DSS and Pentagon’s discussion about bitcoin classification and raising suspicion against cryptocurrency owners? Let us know in the comments below.  


Images via Pixabay, DSS, and Shutterstock.

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CFTC Publishes Advisory On Listing Cryptocurrency Derivatives

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CFTC Publishes Advisory On Listing Cryptocurrency Derivatives

Finance

The United States Commodity Futures Trading Commission (CFTC) has issued an advisory for exchanges and clearinghouses providing guidance pertaining to the assessment and listing of cryptocurrency derivatives.

Also Read: Bitcoin in Brief Tuesday: Crypto Revolution Starts Reshaping Global Politics

CFTC Issues Advisory Regarding Cryptocurrency Derivatives

CFTC Publishes Advisory On Listing Cryptocurrency DerivativesThe CFTC’s Division of Market Oversight (DMO) and Division of Clearing and Risk (DCR) have issued a “joint staff advisory that gives exchanges and clearinghouses registered with the CFTC guidance for listing virtual currency derivative products.” In addition to providing guidance regarding “listing a derivative contract based on virtual currency,” the advisory “clarifies the CFTC staffs’ priorities and expectations in its review of new virtual currency derivatives to be listed.”

Amir Zaidi, the DMO director, stated that “The CFTC staff is committed to providing regulatory clarity as much as possible. As the virtual currency market continues to evolve, CFTC staff will seek to provide additional guidance to help market participants keep pace with innovation while complying with CFTC regulations.”

The advisory specifically outlines requirements pertaining to “Enhanced market surveillance,” “coordination with CFTC staff”, “Large trader reporting,” “Outreach to […] market participants,” and “risk management.”

Brian Bussey, the DCR director, said: “CFTC staff is providing this information, in part, to aid market participants in their efforts to design risk management programs that address the new risks imposed by virtual currency products. In addition, the guidance is designed to help ensure that market participants follow appropriate governance processes with respect to the launch of these products.”

CFTC Chairman Discusses Advisory at NASAA Conference

Christopher Giancarlo, the CFTC chairman, mentioned the guidance for cryptocurrency derivatives during a recent speech at the North American Securities Administrators Association (NASAA) conference.

Mr Giancarlo Mr. Giancarlo described the CFTC as having “been at the regulatory horizon on virtual assets,” and stated that the “CFTC staff advisory […] reflect[s] CFTC staff’s current thinking based on our growing experience with virtual currency derivatives,” adding that “As new products are brought forth, staff will reevaluate and revisit the advisory, as necessary, to address any new and emerging issues.”

Do you think cryptocurrency derivatives will be considered a mainstream financial product in ten years? Share your thoughts in the comments section below!


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CNBC Shows Bitcoin Cash (BCH) Love, Predicts Mooning

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CNBC Shows Bitcoin Cash (BCH) Love, Predicts Mooning

News

CNBC’s Fast Money hosts and panel were on the defensive during a recent broadcast, as some viewers accused the network of shilling for bitcoin cash (BCH). And, truth be told, CNBC has been showing the decentralized cryptocurrency an inordinate amount of love lately. A segment by a popular analyst, where he forecasts even bigger things for BCH, only added fuel to some trolls’ fire. Chairman Mow is not amused.

Also read: Roger Ver and Ryan X. Charles Reveal the Future of Cash

CNBC Predicts Bitcoin Cash to Moon, and Soon

Wednesday in the US is known colloquially as Hump Day, the point at which the weekend seems closer. It’s also the day more and more cryptocurrency enthusiasts are tuning in to CNBC’s Fast Money program, a self described “post-market show,” hosted by Melissa Lee with contributions from well regarded traders.

Trader Brian Kelly, founder and CEO of BKCM LLC, was asked to detail just why it is he’s so bullish on bitcoin cash. In introducing his plasma-fronted segment, Ms. Lee read what appears to be a month-long trend, describing bitcoin cash as having “vanquished” the likes of bitcoin core (BTC), down 5%, litecoin down 9%, and ripple down 21% while BCH remained positive at 6% price growth.

CNBC Shows Bitcoin Cash (BCH) Love, Predicts Mooning

Mr. Kelly asked viewers to simply look at what he refers to as catalyst factors, aspects of a digital asset, no matter what the asset, that might have caused it to gain traction in price going forward. In the case of bitcoin cash, Mr. Kelly cheered the latest development among its mining community to pool portions of rewards toward building a fund for future development. He compared it to an app store where devs pile on uses for a smartphone previously unthought of or dreamed of but not implemented. BCH, he insisted, wasn’t the only project to do something like this, and he even managed to sandwich in the word “potentially” when describing price prospects.

He also equated more on-chain development with potential use cases, and use cases, then, with, well, usability and appeal to more people in the eventual hope of more adoption. Curiously he described the mining community’s latest move as a kind of cartelization, though benevolent, words and phrases that immediately rile most cryptocurrency enthusiasts. He acknowledged it, however, as a potential negative.

Let the Market Decide

Ultimately it all comes down to the market, Mr. Kelly noted. He turned to charting, where over the past year or so BCH has followed the broader crypto market with incredible highs back in late 2017, a precipitous drop in 2018, and a recent stabilization if not slight uptick. Drawing a horizontal line across the screen, Mr. Kelly described bitcoin cash as mostly holding support levels for the moment, a good sign. He called his squibbles and markings “a good looking chart” and a “place I want to buy.”

Ms. Lee then peppered Mr. Kelly with questions from viewers. Asked if he was in to bitcoin cash for the long term, he turned diplomatic. He reminded viewers he was a trader, moving in and out of positions quickly. He wants to invest in the coin that eventually becomes the global currency, living up to crypto hype. For now, Mr. Kelly said, bitcoin core (BTC) has a massive network effect advantage, but that could change.

CNBC Shows Bitcoin Cash (BCH) Love, Predicts Mooning

Yet another viewer asked if Mr. Kelly had ever actually used BCH to buy something, and if not then what is its use? Mr. Kelly said he had not used bitcoin cash, but that his interest is only in its speculative value. He did say he’d used bitcoin core to buy things and to send money, and so he understands its ultimate power. The final question in the segment got Mr. Kelly laughing, as a person asked if he was indeed Roger Ver. When Ms. Lee effectively ended the spot, she was keen to emphasize CNBC and her program take exactly no money to promote anything on the show, and how no one has any connection to BCH beyond an investment.

The strangest reaction by far came from BTC ambassador Samson Mow. Mr. Mow’s personality in the debate between BTC and BCH is often dismissive, above-it-all. He knows, you don’t, and you simply need to get in line. Humorless. Uncharitable. Superior. That’s all excusable, and there’s always been such an element in tech (the more obnoxious sort tend to come from Silicon Valley), but his reaction to the CNBC segment described above places him in rarified air. With a picture of a shadowy figure behind bars, Chairman Mow typed, “Collecting some gems for @SEC_Enforcement @SEC_News to take a closer look at @CNBCFastMoney @CNBC pumping and dumping altcoins on their viewers. Enough is enough. If you have more tweets, post below and I’ll add them to the Moment.” That’s right, a lower-level crypto spokesperson is advocating use of jail to punish opinions different from his. Yikes.

Trader sees bitcoin cash breaking out, here’s why from CNBC.

Are you excited about BCH adoption and innovation? Let us know what you think of this subject in the comments below.


Images via Pixabay, CNBC


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70+ Investigations: 40 Regulators Crack Down on Suspicious Crypto Schemes

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70+ Investigations: 40 Regulators Crack Down on Suspicious Crypto Schemes

Regulation

Forty regulators in the US and Canada are reportedly collaborating in the largest coordinated crackdown on cryptocurrency scams to date by state and provincial officials. The operation has triggered over 70 investigations so far, with 35 cases completed or pending.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Mass Crackdown

The North American Securities Administrators Association (NASAA) said Monday that US and Canadian securities regulators have launched nationwide investigations on suspicious cryptocurrency investment schemes, the Washington Post reported. This is “the largest coordinated crackdown to date by state and provincial officials on bitcoin scams,” the news outlet wrote. CNBC elaborated:

More than 40 state and provincial watchdogs are participating in ‘Operation Crypto-Sweep,’ which has triggered at least 70 investigations so far.

70+ Investigations: 40 Regulators Crack Down on Suspicious Crypto SchemesNASAA is a voluntary association whose members are securities administrators from states, provinces, and territories in the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Canada, and Mexico. According to its website, the association is the oldest international organization devoted to investor protection.

The association, which helps coordinate Operation Crypto-Sweep, confirmed that “as many as 70 investigations have been opened in the sweep, with more expected in the coming weeks.” Furthermore, the Washington Post detailed, “As many as 35 cases are pending or already completed, with some resulting in cease-and-desist letters warning the alleged schemes that their unregistered activity violates state securities law.”

The efforts focus on “unregistered securities offerings that promise lucrative returns without adequately informing investors of the risks” as well as initial coin offerings (ICOs), the regulators explained.

Fighting Fraud

By posing as members of the public, the NASAA task force found roughly 30,000 crypto-related domain name registrations, the news outlet described, adding that “Many of the alleged scams use fake addresses, slick marketing materials and promises of over 4 percent daily interest,” the news outlet described. “A few have even used unauthorized photos of high-profile individuals, such as Supreme Court Justice Ruth Bader Ginsburg, to portray themselves as aboveboard.”

70+ Investigations: 40 Regulators Crack Down on Suspicious Crypto SchemesThe director of enforcement at the Texas State Securities Board, Joseph Rotunda, was quoted saying, “Although the international task force’s work is far from complete, my suspicions have already been confirmed: The market for cryptocurrency investments is saturated with fraud, and our work is only revealing the tip of the iceberg.”

Last week, the Wall Street Journal published a study showing that out of 1,470 ICOs, 271 were found to contain “red flags that include plagiarized investor documents, promises of guaranteed returns and missing or fake executive teams.” Investors have poured more than $1 billion into these 271 ICOs, the publication added. In addition, a Chinese government-backed industry organization also published its fake crypto analysis last week, claiming that its monitoring system has detected 421 fake cryptocurrencies.

Massachusetts’ Secretary of the Commonwealth, William Francis Galvin, emphasized on Monday:

Not every ICO or cryptocurrency-related investment is fraudulent, but we urge investors to approach any initial coin offering or cryptocurrency-related investment product with extreme caution.

NASAA president and the director of the Alabama Securities Commission, Joseph Borg, explained that “consumers face higher risks of being misled at a time when the intense demand for bitcoin has prompted many retail investors to take extreme steps to gain exposure to the currency, such as taking out a bigger mortgage.”

What do you think of Operation Crypto-Sweep? Let us know in the comments section below.


Images courtesy of Shutterstock and NASAA.


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Crypto Scams Comprise 0.6% of Fraud – Australian Consumer Watchdog

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Crypto Scams Comprise 0.6% of Fraud - Australian Consumer Watchdog

Featured

The Australian Competition & Consumer Commission (ACCC) has released a report on trends within the scam economy during 2017. The report identifies cryptocurrency related fraud to comprise less than 1% of the scam activity recorded in Australia last year.

Also Read: Ross Ulbricht Continues to Fight for Freedom With Supreme Court Petition

Cryptocurrency Scams Responsible for 0.6% of Australian Losses to Fraud in 2017

Crypto Scams Comprise 0.6% of Fraud - Australian Consumer WatchdogThe ACCC has published its annual report on the Australian scam economy. The report provides insight into “emerging trends and techniques employed by scammers.”

During 2017, the ACCC, and other pertinent Australian government institutions received “over 200,000 scam reports” corresponding to “losses exceeding $340 million [AUD]” (approximately $258 million USD) – an increase of 13.3% compared with 2016’s total losses.

During 2017, the ACCC attributes $2.1 million AUD ($1.59 million USD approximately) in losses to cryptocurrency scams – a megre 0.617 percent of Australia’s combined losses to scams.

Cryptocurrency Scams Peak During December 2017

Crypto Scams Comprise 0.6% of Fraud - Australian Consumer WatchdogThe report states that the prevalence of reported cryptocurrency scams was closely correlated to the speculative frenzy surrounding virtual currencies last year.

The states that “In the fourth quarter of 2017, the value and popularity of cryptocurrencies increased worldwide [….] Between January and September 2017, about $100,000 was reported lost per month to scams which had a cryptocurrency angle. However, in the month of December 2017, reported losses to Scamwatch exceeded $700,000 and the average reported loss had jumped from $1885 in January to $13,205.”

The report also states that “With the increased popularity of cryptocurrency speculation in the last quarter of 2017, fake initial coin offerings and other cryptocurrency-related scams were reported […] to the ACCC.”

Many Victims Recommended Scams by Friends

Crypto Scams Comprise 0.6% of Fraud - Australian Consumer WatchdogThe ACCC describes a variety of different scams involving cryptocurrency that were reported during 2017. In addition to “fake initial coin offerings,” the report states that other scammers “capitalized on the general confusion about how cryptocurrency works and instead of people discovering how to directly buy cryptocurrencies, many found themselves caught up in what were essentially pyramid schemes.” The report adds that “A number of reports showed that victims entered into cryptocurrency-based scams through friends and family who convinced them they were onto a good thing, a classic element of pyramid schemes.”

The report also states that “Not all cryptocurrency-related scams involve victims attempting to invest in stocks or initial coin offerings. Many scammers also ask for payment through cryptocurrencies for a variety of scams because it is easier to remain anonymous while receiving payment. Ransomware scammers for example, commonly ask for payment through Bitcoin.”

Crypto Fraud Dwarfed by Losses Incurred by Other Scams

Crypto Scams Comprise 0.6% of Fraud - Australian Consumer WatchdogThe ACCC report states that losses to investment scams exceeded $64 million AUD (approximately $48.6 million USD) in 2017 – a 33% increase from 2016. The report also estimates that dating and romance scams accounted for over $42 million AUD (roughly $31.9 USD).

The ACCC also states that “Australian businesses were targeted by business email compromise scams” – resulting in over $22.1 million ($16.8 million USD approximately) being transferred to scammers.

Do you think that the mainstream narrative surrounding cryptocurrency and scams is balanced or embellished? Share your thoughts in the comments section below!


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Moon Missions and Custom Wallets: Bitcoin Community Celebrates Pizza Day

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Moon Missions and Custom Wallets: Bitcoin Community Celebrates Pizza Day

News

On May 22, the bitcoin community celebrated the second most important date in its calendar. No other date, save for January 3, 2009 when Satoshi mined the genesis block, is more symbolic. It was on May 22, 2010 that Laszlo Hanyecz purchased two pizzas for 10,000 BTC. Eight years on, the occasion has become part of bitcoin’s mythology.

Also read: Ross Ulbricht Continues to Fight for Freedom With Supreme Court Petition

Remembering the $83 Million Pizza

Moon Missions and Custom Wallets: Bitcoin Community Celebrates Pizza DayOn May 18 2009, Laszlo posted a thread on the Bitcointalk forum entitled “Pizza for bitcoins?” In it, he explained: “I’ll pay 10,000 bitcoins for a couple of pizzas.. like maybe 2 large ones so I have some left over for the next day.  I like having left over pizza to nibble on later. You can make the pizza yourself and bring it to my house or order it for me from a delivery place, but what I’m aiming for is getting food delivered in exchange for bitcoins where I don’t have to order or prepare it myself, kind of like ordering a ‘breakfast platter’ at a hotel or something, they just bring you something to eat and you’re happy!”

Laszlo then went on to list his favorite toppings, before specifying “just standard stuff no weird fish topping or anything like that”. Within days he had a buyer and the deal went through on May 22. The event is symbolic, not so much for the value of those 10,000 BTC today, but because it marked one of the first public instances of bitcoin being used as a means of payment. The pizza thread, like the value of BTC, has since grown and grown, and today runs to 73 pages, having been viewed around 750,000 times.

Pizza Wallets and Pizza Moon Missions

Every year on May 22 the bitcoin community now competes to despatch the best pizza tweets and branded products, all tied to that then-minor but now massive day in 2010 when bitcoin proved its worth. It hasn’t stopped proving it ever since. To mark the occasion today, Bitstamp has calculated how far $83m of pizzas would stretch, using the following formula:

10,000 BTC * 8,400 USD (1 BTC) = 84 million USD
84 million USD / 15 USD (1 pizza price) = 5.6 million pizzas
5.6 million pizzas * 14 inches (diameter of a large pizza) = 1237 miles
1237 miles / 248 miles (average altitude of the ISS) = 4.9

Hardware wallet manufacturer Ledger has gone one better, creating a limited edition Pizza Day Nano S. Just 1,337 of the units will be issued, each coming in a special Laszlo’s Pizza box complete with a sachet of red chilli pepper oil, for those who like to spice up their cold storage.

Moon Missions and Custom Wallets: Bitcoin Community Celebrates Pizza Day

As for the man who made this infamous anniversary come about, history records that Laszlo sold most of his bitcoins at around $1 apiece but, having contributed to its early source code, and done his bit to ensure real world adoption, he regrets nothing. In the crypto community, Laszlo Hanyecz’s actions will always be the ultimate “Florida man” story, destined to be commemorated faithfully every May 22 forevermore.

Would you buy a limited edition Pizza Day wallet? Let us know in the comments section below.


Images courtesy of Shutterstock, and Ledger.


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How Bitcoin Cash Can Avoid the Same Mistakes as Bitcoin Core, Part 4 of 4

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How Bitcoin Cash Can Avoid the Same Mistakes as Bitcoin Core, Part 4 of 4

News

The following opinion piece on Bitcoin Cash was written by Jonald Fyookball

We’ve already discussed 3 reasons why the bitcoin project was subverted: lack of education, lack of clarity, and centralized development. Today I will proffer two more: censorship and propaganda were allowed to run rampant; miners didn’t understand their power and responsibility. Last Friday, Coingeek.com held a fantastic conference in Hong Kong on the topic of blockchain commerce. The conference concluded with a panel discussion featuring 3 of the most well-known thought leaders in the Bitcoin Cash community: Roger Ver, Dr. Craig Wright, and Jihan Wu. Each of them said something important that pertains to these topics.

Also read: How Bitcoin Cash Can Avoid the Same Mistakes as Bitcoin Core, Part 3

Bitcoin Cash Avoiding Censorship

Censorship is an obvious barrier to an educated community and is motivated by a desire to control the narrative. Thus, it goes hand-in-hand with propaganda and the active promotion of misinformation.

How Bitcoin Cash Can Avoid the Same Mistakes as Bitcoin Core, Part 4 of 4

In Hong Kong, Roger shared that his biggest mistake was underestimating how effective censorship can be. He explained why: while established community members can easily dismiss misinformation, newcomers cannot. And since the community is a fast-growing one, the misinformed newcomers become a majority.

You can read more about the history of censorship in Bitcoin here.

Mindful Miners

In a recent “AMA”, former Bitcoin Core developer Mike Hearn pointed out that historically, BTC miners haven’t been rational economic actors. He said they’ve been incapable of disobeying the authority of the devs.

But we may be turning the corner on this. At the Coingeek conference, Bitmain CEO Jihan Wu expressed that the miners have learned from previous mistakes, and are starting to take more responsibility for understanding the protocol and making intelligent decisions.

How Bitcoin Cash Can Avoid the Same Mistakes as Bitcoin Core, Part 4 of 4

In the past, miners have followed Bitcoin Core almost unconditionally — perhaps overly fearful of “breaking” the network should their guidance not be followed to the letter. While its sensible to consult experts for their opinions, Bitcoin is not on the same order of complexity as nuclear engineering.

(Incidentally, nuclear engineering has been the very metaphor used to incorrectly suggest that the community should abandon independent thinking and blindly follow developers).

Bitcoin is an Economic System

One of the thematic ideas presented by Dr. Wright in Hong Kong (and in previous talks) is that Bitcoin is NOT a cryptographic system. It’s an economic system that happens to use cryptography.

This is the kind of revelation that’s obvious after you hear it expressed so succinctly. In my own words, it means that Bitcoin’s economic incentives are the foundation of what makes Bitcoin work. The cryptography is secondary to that. The economics are the “what” and the cryptography is the “how”.

If you investigate one of Bitcoin’s predecessors, Wei Dai’s b-money, you may be surprised at how similar it is to Bitcoin. The one major element that’s missing is the set of economic incentives.

Miners, Users, and the Public Discourse

Miners and users have a symbiotic relationship. Users don’t have a network without miners, and miners don’t have economic incentive without users.

In theory, miners are rewarded by providing the network that users want.

How Bitcoin Cash Can Avoid the Same Mistakes as Bitcoin Core, Part 4 of 4

But what if the miners don’t know what users want because the public discussion is being censored and brigaded with propaganda? What if they’re listening to the devs instead of the users, or they simply don’t understand enough about Bitcoin to make good choices?

Unfortunately, miners can participate in the system and earn rewards for securing the network without understanding anything about Bitcoin. But its quite dangerous for miners to be ignorant because they’re the ones directly responsible for making the bottom line decisions about consensus rules.

It’s therefore really encouraging to hear that miners are much more educated and involved than they were several years ago.

The Role of Developers

In the (flawed) Bitcoin Core paradigm, Bitcoin developers were the wizards and rulers. They handed down the proclamations from their ivory towers for the users and miners to follow. If you didn’t like it, you were told you could “fork off”, even as those developers denied they wielded influence over the protocol.

In the actual economic model of Bitcoin, miners set the consensus rules with the ultimate consent of the users who give economic value to the system.

Developers, although important, serve a tertiary role and are not directly part of the incentive model.

Development Funding

If developer groups need to compete (as we discussed in a previous article), then the obvious question is “what incentivizes that competition?”

How Bitcoin Cash Can Avoid the Same Mistakes as Bitcoin Core, Part 4 of 4

In the past, this has been a conundrum. How can we make sure there’s enough development resources and talent in a free, open-source software project?

Yet, if we look honestly at the incentive model of Bitcoin, the answer is clear: it’s ultimately the miners’ responsibility to pay for the software they are going to run.

Maybe that means mining pools directly sponsor development teams (which seems to be something that’s been irrationally shamed or presented as a conflict of interest)

…Or maybe it means miners should formulate some kind of system to donate a portion of the block rewards to protocol advancement, as was proposed in a recent strategy meeting.

Conclusion

How Bitcoin Cash Can Avoid the Same Mistakes as Bitcoin Core, Part 4 of 4

Bitcoin Cash is on the right track and will stay on the right track by following these 5 principles:

  1. Knowledge and education must be valued and promoted. Understanding Bitcoin is not the exclusive realm of wizards.
  2. Bitcoin (BCH) is peer to peer electronic cash. Anyone can send money to anyone else in the world, quickly, cheaply, reliably, and without permission. We can disagree on many things as long as we agree on this.
  3. We must never allow censorship, because we know propaganda and misinformation are sure to quickly follow.
  4. There needs to be multiple independent teams of developers and multiple protocol implementations. No one group should have control of the protocol.
  5. The mining community must be engaged, informed, and willing to make logical decisions that align with their own economic interests.

What are your thoughts on educating the BCH community? Share your thoughts in the comments section below.


Images courtesy of Shutterstock.


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Johannesburg Gets a New Crypto ATM, Ban Threatened Harare May Lose One

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Johannesburg Gets a New Crypto ATM, Ban Threatened Harare May Lose One

Economy & Regulation

A new crypto teller machine is now operational in South Africa’s largest city, Johannesburg. The ATM, which supports several digital coins, has been installed at a supermarket in the north-western part of the city’s metro area. It is the latest addition to a growing number of terminals offering automated crypto-fiat exchange services in the country and across the continent. Not all is rosy in the region, however. A crypto ban in neighboring Zimbabwe may deprive Harare of its bitcoin ATM. Nevertheless, crypto teller services are spreading in Africa.   

Also read: Coinsource Installs 20 Bitcoin ATM Machines Around Washington DC

Multicurrency ATM Installed in a South African Supermarket

Johannesburg Gets a New Crypto ATM, Ban Threatened Harare May Lose One
Johannesburg

The Republic of South Africa, the continent’s economic powerhouse, and neighboring Zimbabwe, one of Africa’s most troubled nations, have at least one thing in common – the growing interest in cryptocurrencies, although under different circumstances. In recent years, both countries have been experiencing their own versions of crypto development. The process has led to improved access to the crypto ecosphere but now their paths may diverge again.

A South African outlet reported this week that the nation has got its “first” cryptocurrency ATM in its largest city. The teller machine has been installed at a store in Northwold, part of one of the biggest retail chains in the country – Spar. The automated terminal is a multicurrency device, according to Business Insider South Africa. Customers can buy bitcoin (BTC), ethereum (ETH) and litecoin (LTC) with fiat cash. Unfortunately, it supports one-way transactions, which means only purchases of cryptocurrency are available.

Of course, “the first” is almost always a doubtful label. Unsurprisingly, right after the report came out, the breaking news information was corrected by other media. “While this is undoubtedly a forward-looking move, it is most certainly not the first cryptocurrency ATM to go live in South Africa,” Mybroadband wrote in a piece putting forward another example. According to member of the local crypto sector, multiple cryptocurrency ATMs are operating in South Africa. Jacques Serfontein, CEO of mining hardware supplier Bitmart, said his company has installed one last year at its store in Nelspruit, east of Johannesburg. It supports multiple cryptocurrencies, as well, including bitcoin, ethereum, litecoin, dash, and zcash. Serfontein added he knew of several other crypto ATMs in Johannesburg, Cape Town, and Midrand.

The new Johannesburg’s ATM may not be the first in the country after all, nevertheless, it’s arguably the first one in Northwold. The good news is that the residents of another South African neighborhood will be able to buy digital cash with a simple QR scan and a fiat payment. The teller machine has been installed by the Spar store manager, George Neophytou, who is a crypto enthusiast and entrepreneur. “I asked permission to use this location because I work here. What better place to set it up, so that if a user required help, I’d be on-site to help,” Neophytou said. His initiative was supported by Vendibit, a company developing software and hardware blockchain solutions, and his partner, Daniel Cappiello, director of the Danish firm Copencoin.

Johannesburg Gets a New Crypto ATM, Ban Threatened Harare May Lose One

The future of cryptocurrencies in South Africa is still unclear. A “self-regulatory approach” has been mentioned as part of the solution for the country’s crypto sector, while the central bank is expected to formulate a comprehensive regulatory framework. In April, the South African Revenue Service announced it expected residents to declare crypto gains on their tax returns, although cryptocurrencies are not regarded as currencies for income tax purposes. Despite the uncertainty, cryptos have been gaining popularity both as investments and as means of payment. Last year, the country’s second largest supermarket chain, Pick n Pay, started testing bitcoin payments. It has been reported that drivers can pay tickets with cryptocurrency.

South Africa – Not the First and Only in Africa

The teller machine in Johannesburg is definitely not the first to offer automated crypto teller services on the continent, as well. Bitcoin has been gaining ground in SA’s neighbor Zimbabwe, where cryptocurrency exchange Golix has recently installed a BATM in its Harare office, as news.Bitcoin.com reported. Another local trading platform, Styx24, has announced plans to introduce a second machine in Gweru. Neither of the two companies, however, are licensed to provide these services. Besides, Zimbabwe’s central bank issued this month a circular effectively banning all crypto-related activities.

According to recent reports by local media, some of Golix’s bank accounts have been closed already and the Reserve Bank of Zimbabwe has ordered the company to cease all crypto-exchange operations. If the trading platform shuts down, residents of Harare will probably lose the only bitcoin ATM in their city, which Golix has installed in its office.

Johannesburg Gets a New Crypto ATM, Ban Threatened Harare May Lose One

Further north, an ATM in the Kenyan capital Nairobi supports four cryptocurrencies – bitcoin (BTC), ethereum (ETH), litecoin (LTC), and dogecoin (DOGE), according to data provided by Coinatmradar. Again, only crypto purchases are available. To the east, the tiny nation of Djibouti in the Horn of Africa offers a crypto teller machine operating 24/7. Customers can both buy and sell bitcoin (BTC) through the ATM located at the Appart Hotel Moulk in the capital city.

The Spanish Canary Islands, situated off the west coast of Africa, have at least three crypto teller machines. The one in Santa Cruz de Tenerife, capital of the largest island, offers support for two cryptocurrencies – BTC and LTC, but it’s a “buy only” terminal. The other two BATMs, in Costa de Adeje and Las Palmas de Gran Canaria, can be used for both purchases and sales.

Undoubtedly, many more cryptocurrency ATMs operate in Africa and its neighboring regions. Naturally, it’s up to local crypto communities and crypto media to spread the news about them.

Do you think ATMs increase the availability and popularity of cryptocurrencies? Tells us in the comments section below.


Images courtesy of Shutterstock.


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