16 Blockchain Disruptions (Infographic)

Blockchain technology is claimed to be according to blockchain proponents to be one of the most impactfull discoveries in the recent history. It is promised to have a massive potential to change how we handle online transactions. Despite some skeptics, the majority of experts agree that blockchain has the potential to disrupt the banking and financial industry, and many other ones! To put it simply, blockchain enables decentralized transactions across a P2P network. There are applications where those propertied can be very useful, but there are many cases where blockchain migh not be the best solution even though it is hyped to be solution for very many application (remember to ask Do you need a blockchain? often).

This 16 Blockchain Disruptions (Infographic) by bitfortune.net tries to help you understand how the blockchain technology can and will improve 16 different industries, from music to government.

Infographic by bitfortune.net

330 Comments

  1. Tomi Engdahl says:

    ‘Dr. Doom’ economist Nouriel Roubini breaks down why bitcoin is neither a currency nor an asset — and is instead a giant bubble
    https://markets.businessinsider.com/currencies/news/bitcoin-price-outlook-nouriel-roubini-neither-currency-nor-asset-btc-2021-5-1030459289

    Bitcoin is not a currency, nor is it an asset, economist Nouriel Roubini told Goldman Sachs on Friday.
    Roubini reiterated his view that cryptocurrencies are in a bubble because their current prices far exceed their fundamental value.
    “Even the Flinstones had a more sophisticated system by using shells as a single numeraire to compare the price of different goods,” Roubini said.

    Economist Nouriel Roubini said bitcoin is neither a currency nor an asset and reiterated his view that cryptocurrencies are in a bubble, according to a Friday interview with Goldman Sachs.

    Roubini explained that a currency must have four qualities, including: a unit of account, a means of payment, a stable store of value, and act as a single numeraire.

    “Bitcoin and most other cryptocurrencies have none of these features,” Roubini said. Nothing is priced in bitcoin, it’s not a scalable means of payment, it’s not a stable store of value given its high volatility, and the prices of different items are not denominated in cryptocurrencies “because there are thousands of tokens and thus limited price transparency,” Roubini said.

    The economist highlighted that bitcoin can only complete seven transactions per second, compared to the Visa network which can conduct 65,000 transactions per second. 

    “Even the Flinstones had a more sophisticated system by using shells as a single numeraire to compare the price of different goods,” Roubini said. 

    While cryptocurrencies are not currencies, according to Roubini, they are also not assets.

    “Assets have some cash flow or utility than can be used to determine their fundamental value,” Roubini said, noting that bitcoin and other cryptocurrencies don’t have cashflow or utility.

    Because of that, cryptocurrencies are in a bubble, according to Roubini.

    “A bubble occurs when the price of something is way above its fundamental value. But we can’t even determine the fundamental value of these cryptocurrencies, and yet their prices have run up dramatically,” Roubini explained.

    Roubini remains doubtful that institutions will adopt cryptocurrencies en masse in their asset allocation models, given that the asset can drop by 15% overnight, according to the interview. And corporations adding bitcoin to their balance sheet seems far fetched due to that high volatility. Bitcoin has fallen 50% over the past two weeks alone.

    And as for bitcoin serving as an inflation hedge, Roubini remains skeptical, saying that just because something is scarce doesn’t mean it has a fundamental value.

    “It’s not difficult to create something with limited supply, and there’s no reason artificial scarcity is valuable in and of itself,” Roubini said.

    Reply
  2. Tomi Engdahl says:

    “Charlie Bit My Finger” To Be Removed From YouTube After Selling As NFT For $760,000
    https://www.iflscience.com/technology/charlie-bit-my-finger-to-be-removed-from-youtube-after-selling-as-nft-for-760000/

    The beloved video and meme “Charlie Bit My Finger” will be leaving YouTube soon, after it has been sold as a non-fungible token (NFT) for $760,999 (£538,000) by the original family who captured the moment on tape. After being put onto an NFT auction site by the Davies-Carr family, bids swarmed in as the auction fell into its’ final moments, and user “3fmusic’”took the crown with a final bid of over three-quarters of a million dollars.

    An integral part of many people’s internet upbringing, Charlie Bit My Finger is one of the most popular videos in history with over 880 million views on YouTube.

    Although it remains available for now, the purchase of the video as an NFT will give the owner exclusive rights to the original posted content. Creators can still choose to keep their content up even after it is sold as an NFT, but the Davies-Carr family has decided to remove it, deviating from the norm in sales such as this.

    Reply
  3. Tomi Engdahl says:

    Mary Jo Foley / ZDNet:
    Weeks after announcing plans to shutdown Azure Blockchain, Microsoft debuts Azure Confidential Ledger, adding a layer of security and scalability to blockchain — Microsoft is launching a preview of is Azure Confidential Ledger service, its new Blockchain-based secure ledger.

    Microsoft takes another stab at a Blockchain-powered ledger service
    https://www.zdnet.com/article/microsoft-takes-another-stab-at-a-blockchain-powered-ledger-service/

    Microsoft is launching a preview of is Azure Confidential Ledger service, its new Blockchain-based secure ledger.

    Reply
  4. Tomi Engdahl says:

    Se on loppu nyt! – Jatkuvat sähkökatkot liikaa, bitcoinin louhinta kiellettiin
    TIVI27.5.202108:23|päivitetty27.5.202109:02BITCOINDIGITALOUSKRYPTOVALUUTAT
    Bitcoinin louhinnasta aiheutuneet sähkökatkot saivat Iranin kieltämään louhinnan.
    https://www.tivi.fi/uutiset/se-on-loppu-nyt-jatkuvat-sahkokatkot-liikaa-bitcoinin-louhinta-kiellettiin/b33e5c21-cf5c-4e9a-b462-f91505eedc39

    Reply
  5. Tomi Engdahl says:

    After mass blackouts

    Iran bans bitcoin mining after mass blackouts
    https://www.independent.co.uk/life-style/gadgets-and-tech/iran-bitcoin-mining-ban-blackouts-b1854852.html

    Hassan Rouhani blames illegal miners for electricity outages in Tehran and announces four month prohibition

    Iran has moved to ban bitcoin mining after a number of its cities including Tehran suffered rolling blackouts due to the increased strain placed on the country’s ageing electricity infrastructure from accelerating demand.

    Speaking on state TV, Iranian president Hassan Rouhani said the ban would be in effect until 22 September, blaming the problem on unlicensed miners operating without an official permit.

    The country’s state-run power company Tavanir said on Wednesday that the country only has 50 licensed bitcoin farms and that 85 per cent of mining is carried out illegally, running on 95MW per hour of state-subsidised energy.

    Reply
  6. Tomi Engdahl says:

    China and Turkey have also made similar moves against the cryptocurrency this year after its popularity boomed during the pandemic, while it has increasingly attracted negative attention over its intensive energy demands and significant contribution to the climate crisis.

    Reply
  7. Tomi Engdahl says:

    Kellie Mejdrich / Politico:
    As big financial industry players like Fidelity Investments push SEC to approve Bitcoin-linked ETFs, crypto lobbying efforts meet resistance from US lawmakers

    Wall Street struggles to sell Washington on Bitcoin for the masses
    https://www.politico.com/news/2021/05/30/bitcoin-investment-wall-street-lobbying-491399

    Bitcoin is the biggest of the virtual assets, which unlike the dollar are distributed outside of government control and often operate on a decentralized basis.

    A strong push by Wall Street to open up access to Bitcoin investment is meeting resistance from a bipartisan group of lawmakers and regulators in Washington, setting up a lobbying fight over the future of digital currency.

    Major financial industry players including Fidelity Investments and Anthony Scaramucci’s SkyBridge Capital are pressing the Securities and Exchange Commission to approve their plans to launch funds on public stock markets that would let small investors tap into the rise of Bitcoin prices.

    Wall Street says it’s getting in the game and trying to launch so-called exchange-traded funds linked to cryptocurrency in response to surging demand, with the market for Bitcoin alone exceeding $670 billion. Firms are pouring money into lobbying to shape regulation and to convince skeptical policymakers that digital currency is viable for wider adoption for the masses.

    But lobbyists face an uphill battle that has gotten even tougher after dramatic price swings in recent days, with Bitcoin plunging nearly 40 percent since early May. The investor risks are building on broader concerns about whether cryptocurrency fuels money laundering, aids tax evaders and could threaten the safety of the financial markets themselves if broadly adopted.

    The debate over Bitcoin exchange-traded funds, or ETFs, will be an important indicator of how far Washington is willing to let digital currency markets flourish amid growing questions about whether crypto serves any value to society or is just a speculative fad that carries real risks for investors.

    Bitcoin is the biggest of the virtual assets, which unlike the dollar are distributed outside of government control and often operate on a decentralized basis. The pending proposals for Bitcoin ETFs would allow more investors to gain exposure to the digital currency without having to purchase it directly.

    The funds would essentially replicate the prices of Bitcoin and other cryptocurrencies. Investors could buy shares of the funds and sidestep the need to have so-called digital wallets to hold the digital currency. The complications of handling and trading the virtual assets would be left to fund managers.

    The SEC has long taken a skeptical view of the funds, going as far as rejecting earlier proposals by the Winklevoss twins — of Facebook fame — because of worries that the agency could not guarantee safeguards against fraud and manipulation.

    In addition to pending fund proposals backed by Fidelity and Scaramucci’s SkyBridge, One River Digital Asset Management is being advised by former SEC Chair Jay Clayton as it pitches a “carbon neutral” Bitcoin ETF.

    The SEC, which is responsible for allowing the funds to launch, appears to be in no hurry to expand access to Bitcoin investments. The agency’s new chair, Gary Gensler, has emerged in recent weeks as a clear crypto skeptic.

    Gensler has flagged fundamental concerns about the operations of the underlying cryptocurrency market that the ETFs want to track. He says exchanges that facilitate the buying and selling of digital currency aren’t adequately regulated and that market data is lacking.

    “Altogether, this has led to substantially less investor protection than in our traditional securities markets, and to correspondingly greater opportunities for fraud and manipulation,” Gensler said in House testimony Wednesday.

    Despite the growing industry enthusiasm, Wall Street is also split on the future of cryptocurrency. Some executives are dismissing the push to expand access even as their firms try to satisfy customer demand.

    JPMorgan Chase CEO Jamie Dimon said in House testimony Thursday that his company — the nation’s largest bank — was debating how to make it available in a safe way. But Dimon’s personal advice? “Stay away from it.”

    “That does not mean the clients don’t want it,” Dimon said. “It goes back to how you have to run a business. I don’t smoke marijuana, but if you make it nationally legal I’m not going to stop our people from banking it.”

    Six applications are pending with the SEC to list cryptocurrency ETFs on stock exchanges run by the New York Stock Exchange and Cboe Global Markets. Wall Street titans are lining up to provide services for the funds, including Morgan Stanley, Bank of New York Mellon and State Street.

    “Given the growth of the market and increased interest, the stakes are high as people compete to be the first approved,” Peirce said.

    Critics of moving forward with the funds say the SEC needs to first address underlying risks in the cryptocurrency market.

    “The regulatory concerns about Bitcoin and other cryptocurrency markets go far beyond ETF issues,” said Joseph Cisewski, senior derivatives consultant and special counsel to the Wall Street reform group Better Markets. “The crypto exchanges operate almost entirely in the dark, and we’ve repeatedly seen how risks increase and evolve when they are allowed to develop in the cracks of our regulatory system.”.

    Tillis said the fund applications “have to be scrutinized, mainly from a consumer protection perspective.”

    “We need to figure out how we deal with this,” said Sen. Jon Tester (D-Mont.), a member of the Banking Committee. “Otherwise you’re going to have a lot of people lose a lot of money.”

    Reply
  8. Tomi Engdahl says:

    Preventing financial crime and protecting consumers are key drivers of forthcoming regulation

    American And Swedish Authorities Signal Stricter Crypto Oversight As U.K. Banks Restrict Transfers To Digital Currency Exchanges
    https://www.forbes.com/sites/roberthart/2021/06/01/american-and-swedish-authorities-signal-stricter-crypto-oversight-as-uk-banks-restrict-transfers-to-digital-currency-exchanges/

    Financial regulators in Sweden and the U.S. both hinted at impending crackdowns on largely unregulated cryptocurrency markets over Memorial Day weekend, noting the absence of a consistent framework for the new technology, the specter of financial crime and the risks to consumers posed by crypto exchange platforms, which a number of U.K. banks reportedly blocked customers from transferring money to. 

    Michael Hsu, the new acting comptroller of the currency, told the Financial Times he wanted U.S. agencies to coordinate and set a “regulatory perimeter” for cryptocurrencies and take a more active role regulating the market, something he said there was appetite for. 

    Reply
  9. Tomi Engdahl says:

    Opinion: Bitcoin holders have no choice but to trust in Chinese crypto miners
    Last Updated: May 29, 2021 at 11:34 a.m. ET
    First Published: May 28, 2021 at 7:15 a.m. ET
    By Mark Hulbert
    https://www.marketwatch.com/story/why-bitcoin-holders-have-no-choice-but-to-trust-in-chinese-crypto-miners-11622167864

    Two-thirds of the world’s bitcoin mining power is based in China, leaving the cryptocurrency potentially vulnerable

    Which of the following two statements bests describes bitcoin mining in China:

    It represents the actions of individuals acting independently and anonymously, who just happen to live in China.
    Even if the Chinese bitcoin miners aren’t explicitly part of a team, the Chinese government is aware of who they are and they could be induced (forced?) to collude with each other.

    My question goes to the heart of one of bitcoin’s BTCUSD, -1.26% fundamental weaknesses. As you can see from the chart below, two-thirds of the world’s bitcoin mining power is based in China, which is a huge potential vulnerability for the cryptocurrency.

    That’s because China potentially could mount what’s known as a majority attack, or a 51% attack, which would sabotage bitcoin’s integrity and possibly cause its price to plunge. As acknowledged on the bitcoin Wiki: “Bitcoin’s security model relies on no single coalition of miners controlling more than half the mining power.”

    While Bitcoin has not suffered a 51% attack, that doesn’t mean it couldn’t happen. Such attacks have not infrequently taken place with other cryptocurrencies

    The standard comeback is that bitcoin is so large that a 51% attack would be prohibitively expensive. But, according to Eric Budish, a professor of economics at the University of Chicago, state actors could have a geopolitical or financial terrorism incentive to sabotage bitcoin — in which case the cost of an attack might be acceptable.

    A matter of trust

    In truth, no one knows whether China could sabotage the bitcoin blockchain. Bitcoin holders just have to trust that they couldn’t or they wouldn’t. There is much irony in this, since bitcoin supporters rally around the cryptocurrency’s alleged foundation on anonymous and decentralized trust. How is believing that China couldn’t or wouldn’t sabotage bitcoin different from trusting the Federal Reserve not to debase the U.S. dollar DXY, -0.11% ?

    It hardly seems as though bitcoin has really solved the trust problem that fiat currencies infamously face. Trust in China is but one of the ways in which bitcoin’s champions haven’t really sidestepped the trust problem plaguing fiat currencies.

    Most bitcoin transactions occur through exchanges, such as Binance, Huobi Global and Coinbase Global COIN, +1.01%. Such trading inherently relies on trusting those exchanges to do what they say they will. How is that different from trading with Bank of America or Goldman Sachs?

    Many, perhaps a majority, of those who trade bitcoin don’t truly understand the technical details of how it operates. They therefore are relying on little more than blind trust that bitcoin will work as advertised.

    Don’t be too sure that you are one of the few who understands bitcoin’s inner workings.

    Klement has degrees in theoretical and particle physics, mathematics, economics and finance. And yet, he wrote to clients, “Whenever I try to understand cryptocurrencies I am at a loss. Either, I manage to translate the jargon into something in plain English at which point I often end up with trivial conclusions, or I am unable to translate the jargon and technical terms into something that makes sense.”

    Claude Erb, a former commodities portfolio manager at TCW Group, draws a parallel between religious conviction and the trust and faith of bitcoin’s devotees. After all, he pointed out in an interview, no one has actually seen the bitcoin blockchain, and yet we have faith that it is all-knowing and benevolent. “Is that all that different from a belief in a ‘crypto God,’” he asks? “There are many leaps of faith required.”

    Pointing out bitcoin user’s reliance on trust doesn’t mean that fiat currencies don’t also suffer from profound flaws. They do.

    Reply
  10. Tomi Engdahl says:

    Someone actually built a hot tub that’s heated by mining Bitcoin
    Elon Musk said it’s a ‘great idea’ to build a hot tub that is heated by mining Dogecoin, so of course, someone has done it.

    Read more: https://www.tweaktown.com/news/79730/someone-actually-built-hot-tub-thats-heated-by-mining-bitcoin/index.html

    Reply
  11. Tomi Engdahl says:

    The 20% surge saw doge become the sixth most valuable cryptocurrency and overtake Covid vaccine maker BioNTech in value.

    Dogecoin Soars As Elon Musk Declares The Crypto’s ‘Inevitable’ Financial Takeover Following Coinbase Pro Listing
    https://www.forbes.com/sites/roberthart/2021/06/02/dogecoin-soars-as-elon-musk-declares-the-cryptos-inevitable-financial-takeover-following-coinbase-pro-listing/?utm_campaign=forbes&utm_source=facebook&utm_medium=social&utm_term=Gordie

    Dogecoin rallied more than 20% Wednesday morning following news it would soon be added to one of the world’s largest cryptocurrency exchanges and encouragement from billionaire enthusiast Elon Musk on Twitter, gaining nearly $10 billion in market cap but leaving it a long way off the all time high it reached ahead of Musk’s SNL appearance in early May.

    Dogecoin was trading at around $0.39 a coin early Wednesday morning—up from around $0.32 before Coinbase Pro on Tuesday announced its imminent availability on the platform.

    Musk responded to the Coinbase announcement by reposting an old tweet calling the rise of the dogecoin “inevitable,” later reigniting interest with another doge-based meme. 

    At its current value, dogecoin is worth more than Covid-19 vaccine producer BioNTech, Dollar General and Marriott International.  

    Reply
  12. Tomi Engdahl says:

    Paul R. La Monica / CNN:
    NortonLifeLock says it’s adding an Ethereum mining function to Norton 360, its paid antivirus software, initially to a small group of customers — New York (CNN Business)Mining for bitcoin and other cryptocurrencies is typically done by companies that own massive server farms operating outside of the United States.

    Cybersecurity firm NortonLifeLock will let customers mine crypto
    https://edition.cnn.com/2021/06/02/investing/nortonlifelock-crypto-mining-ethereum/

    Mining for bitcoin and other cryptocurrencies is typically done by companies that own massive server farms operating outside of the United States. But cybersecurity firm NortonLifeLock is hoping to bring mining to your desktop.
    NortonLIfeLock (NLOK) announced Wednesday morning that it is launching a new feature for a select group of early customers of its Norton 360 platform that will allow them to mine for ethereum, the world’s second most valuable cryptocurency, on their personal computers.
    “As the crypto economy continues to become a more important part of our customers’ lives, we want to empower them to mine cryptocurrency with Norton, a brand they trust,” said Vincent Pilette, CEO of NortonLifeLock, in a statement.

    NortonLifeLock is the consumer cybersecurity company formerly known as Symantec. The company changed its name after Broadcom (AVGO) bought the enterprise security software business (which focuses on big corporate customers) of Symantec in 2019.

    The new feature, dubbed Norton Crypto, will be available only to a small group of customers, but the company said it hopes to expand it to all of its nearly 13 million Norton 360 users in the coming months.
    “While the company will start slow, with a focus on helping customers safely mine Ethereum, NortonLifeLock is considering adding reputable crypto currencies in the future,” the company said in answer to questions from CNN.

    Mining isn’t for the faint of heart
    Crypto mining typically has been a dicey endeavor for average consumers. There have been concerns about people having their coins stolen after disabling their security in order to run mining software. Individual miners also run the risk of having ransomware planted on their PCs.
    There’s also the more mundane issue of people losing access to their crypto wallets due to lost passwords or hard drive failures.
    NortonLifeLock claims to have solved these problems with its Crypto Miner service because it features added security and also stores crypto earnings in a Norton Crypto Wallet that is stored in the cloud as opposed to an individual’s hard drive on their PC.

    “We are proud to be the first consumer Cyber Safety company to offer coinminers the ability to safely and easily turn the idle time on their PCs into an opportunity to earn digital currency,” said Gagan Singh, chief product officer at NortonLifeLock, in the press release.

    ough times for crypto
    The timing of the news comes at a tumultuous time for the world of cryptocurrency investing. Bitcoin, ethereum and other major cryptos suffered their biggest monthly drop in nearly a decade in May.
    Tesla (TSLA) CEO Elon Musk spooked investors last month when he announced that Tesla would no longer accept bitcoin as payment for its vehicles due to concerns about the environmental impact of bitcoin mining, which tends to require a lot of energy.

    Reply
  13. Tomi Engdahl says:

    Michael McSweeney / The Block:
    Google says it will allow ads for cryptocurrency exchanges and wallets in the US that meet certain requirements and are certified by Google starting August 3 — Google is expanding the scope of its crypto-related advertisement policy, the latest development in a years-long back and forth from the tech giant.

    Google is revamping its ad policy for crypto exchanges and wallets
    https://www.theblockcrypto.com/linked/106997/google-is-revamping-its-ad-policy-for-crypto-exchanges-and-wallets

    Google is expanding the scope of its crypto-related advertisement policy, the latest development in a years-long back and forth from the tech giant.

    In a policy statement published Wednesday, Google said that “[b]eginning August 3, advertisers offering Cryptocurrency Exchanges and Wallets targeting the United States may advertise those products and services when they meet the following requirements and are certified by Google.”

    To qualify, exchanges and wallets need to “[b]e duly registered with (a) FinCEN as a Money Services Business and with at least one state as a money transmitter; or (b) a federal or state chartered bank entity,” “[c]omply with relevant legal requirements, including any local legal requirements, whether at a state or federal level” and “[e]nsure their ads and landing pages comply with all Google Ads policies.”

    The new certification process will replace one that has existed for crypto exchanges since late 2018.

    In March 2018, Google made waves when it banned crypto advertising from its search engine, a move that came after Facebook undertook a similar policy shift earlier that year.

    Reply
  14. Tomi Engdahl says:

    China Has Triggered a Bitcoin Mining Exodus https://www.wired.com/story/china-bitcoin-mining-exodus/
    The promise of a crackdown is sending the country’s crypterati scrambling for the exit.

    Reply
  15. Tomi Engdahl says:

    MacKenzie Sigalos / CNBC:
    El Salvador’s president unveils a bill to adopt bitcoin as legal tender, partnering with payments startup Strike, in a bid to become the first nation to do so — – El Salvador President Nayib Bukele plans to introduce legislation that will make it the world’s first sovereign nation to adopt bitcoin as legal tender.

    El Salvador looks to become the world’s first country to adopt bitcoin as legal tender
    https://www.cnbc.com/2021/06/05/el-salvador-becomes-the-first-country-to-adopt-bitcoin-as-legal-tender-.html

    El Salvador President Nayib Bukele plans to introduce legislation that will make it the world’s first sovereign nation to adopt bitcoin as legal tender.
    Bukele broadcast his intentions on a video at the Bitcoin 2021 conference in Miami.
    Bukele said the country is partnering with digital wallet company, Strike, to build modern financial infrastructure using bitcoin technology.

    El Salvador is looking to introduce legislation that will make it the world’s first sovereign nation to adopt bitcoin as legal tender, alongside the U.S. dollar.

    In a video broadcast to Bitcoin 2021, a multiday conference in Miami being billed as the biggest bitcoin event in history, President Nayib Bukele announced El Salvador’s partnership with digital wallet company, Strike, to build the country’s modern financial infrastructure using bitcoin technology.

    “Next week I will send to congress a bill that will make bitcoin a legal tender,” said Bukele.

    “What’s transformative here is that bitcoin is both the greatest reserve asset ever created and a superior monetary network. Holding bitcoin provides a way to protect developing economies from potential shocks of fiat currency inflation,” continued Mallers.

    El Salvador is a largely cash economy, where roughly 70% of people do not have bank accounts or credit cards. Remittances, or the money sent home by migrants, account for more than 20% of El Salvador’s gross domestic product. Incumbent services can charge 10% or more in fees for those international transfers, which can sometimes take days to arrive and that sometimes require a physical pick-up.

    Bitcoin isn’t backed by an asset, nor does it have the full faith and backing of any one government. Its value is derived, in part, from the fact that it is digitally scarce; there will only ever be 21 million bitcoin in existence.

    This isn’t El Salvador’s first move into bitcoin. In March, Strike launched its mobile payments app there, and it quickly became the number one downloaded app in the country.

    Reply
  16. Tomi Engdahl says:

    Bitcoin falls after Elon Musk tweets breakup meme
    https://www.cnbc.com/2021/06/04/bitcoin-falls-after-elon-musk-tweets-breakup-meme.html?recirc=taboolainternal

    Bitcoin’s price fell Friday morning after Elon Musk posted a tweet suggesting he’s fallen out of love with the world’s top cryptocurrency.
    The cryptocurrency recovered slightly, but still remained in the red, after Square CEO Jack Dorsey tweeted on Friday morning that the digital payments company is considering creating a hardware wallet for bitcoin.
    Bitcoin was 3.6% lower at $37,170.97 as of 1:45 p.m. ET on Friday, while other cryptocurrencies including ether and dogecoin also sank.

    Bitcoin’s price fell Friday morning after Elon Musk posted a tweet suggesting he’s fallen out of love with the world’s top cryptocurrency.

    The billionaire Tesla CEO tweeted a meme about a couple breaking up over the male partner quoting Linkin Park lyrics, adding the hashtag #Bitcoin and a broken heart emoji.

    Reply
  17. Tomi Engdahl says:

    James T. Areddy / Wall Street Journal:
    A brief history of cryptocurrency mining in China as authorities crack down on mining operations and miners in other countries cut into China’s dominance — Crackdown warning highlights the cryptocurrency’s reliance on a hostile host; miners head west — Bitcoin enthusiasts prize …

    China Reconsiders Its Central Role in Bitcoin Mining
    Crackdown warning highlights the cryptocurrency’s reliance on a hostile host; miners head west
    https://www.wsj.com/articles/china-reconsiders-its-central-role-in-bitcoin-mining-11622865618?mod=djemalertNEWS

    Bitcoin enthusiasts prize the cryptocurrency as beyond the reach of any government. Yet up to three-quarters of the world’s supply has been produced in just one country, China, where a government push to curtail output is now causing global bitcoin turbulence.

    The amount of electricity needed to power vast numbers of computers used to create new bitcoin are at odds with China’s recent climate goals. The government, which manages its national currency with a tight fist, also frowns on cryptocurrency generally. No legal exchange of bitcoin has been permitted for years in China, even as the nation’s entrepreneurs emerged as the dominant source of its output.

    Few governments have embraced bitcoin, but fallout from Beijing’s threats demonstrated how its grip on production left the cryptocurrency vulnerable.

    The 24/7 number crunching required to create, or “mine,” bitcoin relies on ample supplies of cheap electricity and equipment, some of the same elements China harnessed to become the world’s manufacturing hub.

    In their hunger for market share, China’s bitcoin miners took advantage of an underregulated and overbuilt electricity-generating sector. They set up mining operations adjacent to hydropower producers in the mountainous Sichuan and Yunnan provinces where turbines churn snowmelt and seasonal downpours into electricity. When river flows eased each winter, miners packed their computers and headed north to coal-rich Xinjiang and Inner Mongolia.

    Mining operations in China, sometimes tens of thousands of computers wired together solving complex computational puzzles, gorge on electricity. The bitcoin industry alone is on track to rank among China’s 10 biggest power users, alongside sectors like steelmaking and cement production, according to a peer-reviewed paper published in April by Britain’s Nature Communications. That would make China’s bitcoin producers bigger consumers of energy than the entire nation of Italy.

    That ravenous appetite has put bitcoin mining in conflict with Beijing’s political priorities. President Xi Jinping is determined to recast China as a climate champion and has set ambitious goals to reduce coal use. Beijing is also about to launch a national digital currency, controlled by the central bank and designed to counter cryptocurrencies.

    Chinese bitcoin production is reminiscent of the nation’s sway in other high-technology realms, from production of rare-earth mineral materials to video-surveillance equipment—with one main difference: Beijing’s distrust of cryptocurrencies.

    On May 21, China’s government vowed to “crack down on bitcoin mining and trading behavior,” a statement widely interpreted as a warning that the cryptocurrency’s multibillion-dollar supply chain’s days are numbered.

    In response, electricity producers are ejecting miners from grids and Chinese dealers are unloading computers designed to create bitcoin onto the secondhand market at huge discounts.

    Reply
  18. Tomi Engdahl says:

    Paul Vigna / Wall Street Journal:
    DeFi, which accounted for an estimated 40% of ether moved on the Ethereum network in the year ended April, is helping fuel the crypto boom and recent volatility

    DeFi Is Helping to Fuel the Crypto Market Boom—and Its Recent Volatility
    Decentralized finance differs from traditional banks because there is no centralized system. It can be risky.
    https://www.wsj.com/articles/defi-is-helping-to-fuel-the-crypto-market-boomand-its-recent-volatility-11622712602?mod=djemalertNEWS

    Dogecoin and NFTs have captured the public’s imagination, but money is also flooding into another hot, and risky, corner of the cryptocurrency market: DeFi.

    Short for decentralized finance, DeFi is an umbrella term for financial services offered on public blockchains. Like traditional banks, DeFi applications allow users to borrow, lend, earn interest, and trade assets and derivatives, among other things. The collection of services is often used by people seeking to borrow against their crypto holdings to place even larger bets.

    There are two key differences from mainstream banks: All services are for digital currencies instead of government-issued ones such as the dollar and the euro, and there is no intermediary or centralized system through which transactions are processed.

    Users typically access DeFi platforms through software known as dapps, or decentralized apps, most of which run on the Ethereum network. They connect their digital wallet to the app and select a service from a drop-down menu. Functions handled at a traditional bank by a loan officer or teller are automated.

    “It’s essentially banking for the blockchain space,” said Antoni Trenchev, co-founder and managing partner of Nexo Capital Inc., one of the largest firms in the DeFi industry.

    DeFi, however, has been a double-edged sword for the crypto market lately, helping to fuel a surge in volatility. Many traders have turned to derivatives and arbitrage strategies on DeFi apps for a chance to amplify their returns in a white-hot market. They can place outsize bets with only a small amount of money upfront, effectively taking on leverage, the practice of borrowing to amplify returns.

    Assets deposited as collateral on DeFi platforms, a measure known as total value locked, have grown to more than $100 billion, of which about $64 billion is on Ethereum, according to the website DeFi Pulse. A year ago, there were only about $1 billion of DeFi assets on Ethereum.

    The implosion of leveraged bets has been a key factor in accelerating a monthlong selloff in bitcoin and other cryptocurrencies. As prices tumbled, many bullish bets were automatically liquidated, adding more downward pressure on prices and leading to a vicious cycle of further liquidations.

    A similar boom in leverage is occurring in the U.S. stock market, where investors had borrowed a record $847 billion against their portfolios as of April, according to the Financial Industry Regulatory Authority.

    Although many DeFi platforms have collateral limits, some allow users to employ huge leverage. BitMEX, one of the earliest and most popular crypto derivatives exchanges, allows as much as 100 times leverage on some futures contracts, for example.

    It isn’t clear what percentage of assets are being lent and lent again across various DeFi platforms and other exchanges, a dynamic called rehypothecation. “Everything in crypto is rehypothecation,” said Alex Mashinsky, founder of DeFi firm Celsius Network. “Everything. Including the collateral.”

    For users, the appeal of DeFi is simple. There are almost no requirements to participate, except for having some form of crypto as collateral. Interest rates are attractive compared with traditional investment products. And because transactions are automated, settlement is virtually instantaneous, removing some of the traditional counterparty risk.

    Interest in DeFi has contributed to this year’s surge in the price of ether, the Ethereum network’s in-house currency and the second-largest cryptocurrency by market value behind bitcoin. Ether hit a record $4,383 in May, up from less than $200 a year ago. It has since fallen to about $2,750, part of a broader selloff in digital currencies.

    DeFi accounted for about 40% of the ether moved on the Ethereum network in the 12 months through April, according to research firm Chainalysis, up from 7% in the prior 12 months. Many NFTs, or nonfungible tokens, also run on Ethereum. NFTs are bitcoin-like tokens connected to a digital work of art or other real-world item and sold as a unique digital item.

    DeFi services using Ethereum competitors are growing too. Binance Smart Chain has about $26 billion in assets across about 60 apps, according to the website Defistation. Meanwhile, the largest startups offering DeFi services, Celsius and Nexo, have $21 billion and $15 billion in assets, respectively.

    DeFi is still an immature and highly risky market. In some cases, those running the apps are anonymous, making it harder for users to determine which platforms are reliable.The services aren’t regulated or insured, so if a platform fails there is no recourse.

    Another risk is security. With money pouring into the space, DeFi platforms are increasingly attractive to hackers. If the code behind a service isn’t sound, it can be exploited and money funneled out.

    Hackers stole about $120 million from DeFi protocols in 2020 in 15 separate attacks, less than half of which was later recovered, according to research and media firm Block Research. This year there have been at least 23 attacks to date that have netted the hackers about $411 million, according to data compiled by Rekt.news, a website set up to track thefts.

    In April, a hacker stole about $60 million of digital currency from a platform called EasyFi by targeting a single vulnerability: the founder’s computer. The hacker stole the access code and drained about 30% of its total funds. Another service, called Value Defi, has been hacked three times since November—twice in May alone—for losses totaling about $28 million.

    Reply
  19. Tomi Engdahl says:

    At one point worth more than $5 billion, MicroStrategy’s bitcoin holdings are now worth less than $3.5 billion.

    Bitcoin’s Biggest Corporate Backer Expects $285 Million Loss After Crypto Crash—But Wants To Raise $400 Million In Debt To Buy More
    https://www.forbes.com/sites/jonathanponciano/2021/06/07/bitcoins-biggest-backer-expects-285-million-loss-after-crypto-crash-but-wants-to-raise-400-million-in-debt-to-buy-more/

    After Bitcoin’s massive crash last month, business analytics company MicroStrategy, the cryptocurrency’s biggest corporate owner, warned Monday it expects to incur a loss of at least $284.5 million in the second quarter as a result of its bitcoin holdings, but the staunch bitcoin bull—helmed by billionaire CEO Michael Saylor—also announced it’s looking to raise more debt to double down on its volatile bitcoin investment.

    Reply
  20. Tomi Engdahl says:

    Crypto Markets Crash Again After DOJ Seizes $2.3 Million Bitcoin Ransom
    https://www.forbes.com/sites/jonathanponciano/2021/06/08/crypto-markets-crash-again-after-doj-seizes-23-million-bitcoin-ransom/

    After regulatory concerns in China crashed the market last month, cryptocurrencies plummeted again Tuesday morning after the Department of Justice said it seized $2.3 million in bitcoin as part of its investigation into a ransomware attack that shut down the nation’s largest gas pipeline, fueling concerns U.S. officials could ramp up their crypto oversight—something that’s helped spark a years-long bear market before.

    As of 9:45 a.m. EDT, the global crypto market had plummeted more than 11% over the past 24 hours, falling below $1.5 trillion to its lowest point since a flash crash in May pushed the market down to $1.3 trillion from an early month high above $2.5 trillion.

    The crash started Monday after reports surfaced that the DOJ had seized an unspecified amount of cryptocurrency related to the May 8 cyberattack on Colonial Pipeline and intensified overnight—wiping out more than $150 billion in market value by 9:45 a.m. EDT Tuesday.

    It’s unclear how the DOJ obtained the private key, but experts, including Dr. Nicholas Weaver, a cybersecurity professor at the University of California at Berkeley, have suggested federal officials effectively hacked the hackers in a show of unprecedented government intervention in the cryptocurrency space.

    The developments rocked all major tokens, with bitcoin, ether and binance coin falling 10%, 12% and 14%, respectively, Tuesday morning.

    More government intervention. On Sunday, two senators on the Intelligence Committee suggested lawmakers should take increased measures to regulate and trace cryptocurrencies. “The only way you can begin to get on top of the pervasive” ransomware problem is “to develop a pattern,” Sen. Roy Blunt (R-Mo.) told NBC News’ Meet the Press, calling cryptocurrencies the “ransom payment of choice” for hackers and saying lawmakers shouldn’t allow cryptocurrencies to operate “behind the scenes.”

    Reply
  21. Tomi Engdahl says:

    China-backed ‘Ethereum killer’ cryptocurrency Vechain sees price surge nearly 2,000%
    https://www.express.co.uk/finance/city/1445211/ethereum-price-latest-bitcoin-price-china-cryptocurrency-vechain-vet-bull-run-market

    BEIJING’S “close ties” with Ethereum competitor Vechain has seen the Chinese-based cryptocurrency’s price soar by nearly 2,000 percent in one year.

    The ruling Communist Party of China is notoriously suspicious of technologies and organisations that lie beyond its control, hence their recent clamp-down on bitcoin and other major cryptocurrencies. However, one cryptocurrency project that is seeing support from Beijing is Vechain (VET), a domestically developed decentralised finance operation that is similar to the Ethereum blockchain network. China’s President Xi Jinping is desperate to keep a firm hand on the inroads that the cryptocurrency revolution is making into the world’s second-largest economy.

    All signs now point to Beijing working with Vechain (VET) to aid the development of China’s digital version of their domestic currency, the Yuan.

    Speaking to Express.co.uk George of Cryposrus said: “Most likely China is already working on their digital yuan with Vechain.

    Reply
  22. Tomi Engdahl says:

    Ryan Browne / CNBC:
    Bitcoin slid 7%+ to $32,936 after US seized most of the Colonial Pipeline ransom and is down ~50% from its all-time high of ~$63K; ether and XRP also fell 7%

    Bitcoin falls after U.S. seizes most of Colonial ransom
    https://www.cnbc.com/2021/06/08/bitcoin-btc-price-slides-as-us-seizes-most-of-colonial-ransom.html

    Bitcoin accelerated its slide to fall below the $32,000 level late Tuesday morning, according to Coin Metrics data.
    U.S. officials said Monday they have seized $2.3 million in bitcoin paid to hacker group DarkSide.
    The FBI was able to access the “private key,” or password, for one of the hackers’ bitcoin wallets.

    In April, 2021 was looking to be a banner year for digital assets, with bitcoin having topped $60,000 for the first time ever. But a recent plunge in crypto prices has shaken confidence in the market. Bitcoin sank to nearly $30,000 last month, and is currently down roughly 50% from its all-time high.

    The digital currency is now up only about 12% since the start of the year, though it’s still more than tripled in price from a year ago.

    U.S. recovers most of Colonial ransom

    On Monday, U.S. law enforcement officials said they had seized $2.3 million in bitcoin paid to DarkSide, the cybercriminal gang behind a crippling cyberattack on Colonial Pipeline.

    According to a court document, the Federal Bureau of Investigation was able to access the “private key,” or password, for one of the hackers’ bitcoin wallets. Bitcoin has often been the currency of choice for hackers demanding ransom payments to decrypt data locked by malware known as “ransomware.”

    Crypto media outlet Decrypt reported there were unfounded rumors that the attackers’ bitcoin wallet had been “hacked,” an unlikely scenario.

    DarkSide, which reportedly received $90 million in bitcoin ransom payments before shutting down, operated a so-called “ransomware as a service” business model, where hackers develop and market ransomware tools and sell them to affiliates who then carry out attacks.

    According to blockchain analytics firm Elliptic, the seized funds represented the bulk of the DarkSide affiliate’s share of the ransom paid out by Colonial.

    John Hultquist, vice president of analysis at Mandiant Threat Intelligence, called the move a “welcome development.”

    “It has become clear that we need to use several tools to stem the tide of this serious problem, and even law enforcement agencies need to broaden their approach beyond building cases against criminals who may be beyond the grasp of the law,” said Hultquist.

    “In addition to the immediate benefits of this approach, a stronger focus on disruption may disincentivize this behavior, which is growing in a vicious cycle,” he added.

    Crypto crackdown

    A number of issues are weighing on cryptocurrencies, including fears of a regulatory clampdown and recent tweets from Tesla CEO Elon Musk.

    Chinese authorities last month called for a crackdown on crypto mining and trading. Once a major player in the market, China has since moved to stamp out speculative investment in cryptocurrencies, banning a fundraising method known as initial coin offerings and shuttering local exchanges.

    Meanwhile, Elon Musk has gone from a supporter of bitcoin to seemingly falling out of love with it in a matter of months. Musk’s electric car firm stopped accepting bitcoin as a payment method last month due to concerns over its environmental impact, resulting in a crypto market sell-off.

    “Bitcoin bulls have been chastened by the market pull back and perhaps are feeling once bitten, twice shy,” Charles Hayter, CEO of digital currency data firm CryptoCompare, told CNBC.

    “The euphoria has worn off to some extent in the retail frenzy, as regulators have moved to temper manias,” he added. “Data is showing continued cornering of the market by institutionals.”

    Last week, thousands of bitcoin investors descended on Miami for an event billed as the biggest bitcoin event in history.

    The conference had a few bizarre highlights, including El Salvador President Nayib Bukele announcing plans for the country to accept bitcoin as legal tender.

    Reply
  23. Tomi Engdahl says:

    Need a motherboard with 32 SATA ports for cryptocurrency mining? Onda has the very thing.

    New Motherboard for Chia Mining Includes 32 SATA Ports
    https://www.extremetech.com/computing/322365-new-chia-mining-motherboard-includes-32-sata-ports?utm_campaign=trueAnthem%3A+Trending+Content&utm_medium=trueAnthem&utm_source=facebook

    Motherboard manufacturers in China are getting in on the cryptomining craze surrounding Chia, a new cryptocurrency available to mine in May. We’ve talked about Chia several times now, including rumors that hard drive demand has spiked artificially because buyers in certain areas are hoarding drives, hoping to drive up prices.

    Drive hoarding may be partially responsible for high prices, but clearly, motherboard manufacturers expect storage mining to catch on. A new platform from motherboard manufacturer Onda, the Chia D32H-D4, offers no fewer than 32 SATA ports.

    These aren’t standard SATA ports; they’re SATA backplane connectors

    At a guess, however, these plugs are designed for cables (as opposed to mounting nearly three dozen hard drives in a vertical configuration). The motherboard uses SATA backplanes to provide power and electricity simultaneously. The manufacturer behind this motherboard, Onda, is reportedly offering it with a custom chassis and an 800W power supply.

    This motherboard won’t fit in any standard chassis.

    Bullshit Is Coming
    If you had a vague plan to buy storage in the next few months, we recommend buying it now. It’s possible that all of the hype around Chia is smoke and mirrors intended to scare up rumors of shortages to promote the cryptocurrency itself. Even writing disparagingly about the cryptocurrency arguably feeds the hype cycle by improving Chia’s brand awareness.

    The problem is, ongoing cryptocurrency shortages continue to break things. GPU prices and availability may not come down until the end of the year, though we’re hoping that new mining limits on future Nvidia cards will help improve availability for gamers, reducing the impact of ongoing shortages. Storage is another problem altogether. It may be possible to stop a GPU from mining, but good luck preventing a hard drive from storing data.

    That’s where Chia is such a potential issue. Other cryptocurrencies based on storage solutions use a solution called proof of capacity. Proof of capacity allows a user to re-use the same hard drive space. Chia uses proof of spacetime, which requires that an end-user maintain or add capacity over time in order to increase payout rates. Your payout is calculated based on the percentage of the total storage pool that belongs to you. Should Chia take off, it could drive shortages in storage the way Ethereum mining has caused shortages in GPUs.

    It’s possible that all of this will still come to nothing. Problem is, if it doesn’t, storage could be pricey for months, even a year or more.

    Reply
  24. Tomi Engdahl says:

    El Salvador has become the first country in the world to officially classify Bitcoin as legal currency.

    Bitcoin: El Salvador makes cryptocurrency legal tender
    https://www.bbc.com/news/world-latin-america-57398274

    El Salvador has become the first country in the world to officially classify Bitcoin as legal currency.

    Congress approved President Nayib Bukele’s proposal to embrace the cryptocurrency, with 62 out of 84 possible votes on Tuesday night.

    The president said the government had made history, and that the move would make it easier for Salvadorans living abroad to send money home.

    Reply
  25. Tomi Engdahl says:

    1% of Bitcoin’s total supply, or $6 billion worth has been locked away
    https://www.tweaktown.com/news/79871/1-of-bitcoins-total-supply-or-6-billion-worth-has-been-locked-away/index.html

    Bitcoin has reached a new milestone as a manager of a crypto custody firm has announced 1% of BTC’s total supply has been wrapped.

    Read more: https://www.tweaktown.com/news/79871/1-of-bitcoins-total-supply-or-6-billion-worth-has-been-locked-away/index.html

    Reply
  26. Tomi Engdahl says:

    Overlooking the Chinese regulatory concerns, bitcoin prices are surging 15% Wednesday amid historic adoption in El Salvador.

    China’s Crypto Crackdown Intensifies With New Mining Ban And Censorship—But Bitcoin Is Rallying
    https://www.forbes.com/sites/jonathanponciano/2021/06/09/chinas-crypto-crackdown-intensifies-with-new-mining-ban-and-censorship-but-bitcoin-is-rallying/

    China’s cryptocurrency crackdown, which crashed markets last month, intensified Wednesday with another province ordering all crypto-mining operations to shut down just hours after popular Internet companies started censoring searches for three of the nation’s largest crypto exchanges, but bitcoin prices are skyrocketing after El Salvador’s historic adoption measure—in hopes that other countries will follow suit.

    On Wednesday, China’s Qinghai became at least the third province in the nation taking steps to curb cryptocurrency mining operations due to environmental concerns, barring local officials from setting up or permitting crypto-mining projects and ordering them to update the provincial government on implementation measures by June 20.

    Despite Chinese regulatory concerns crashing crypto markets last month, tokens largely rallied Wednesday afternoon, with bitcoin prices skyrocketing 12% over the past 24 hours as investors lauded El Salvador’s successful vote to make the world’s largest token a form of legal tender.

    Reply
  27. Tomi Engdahl says:

    How to Use Raspberry Pi to Farm Chia Coin
    By Les Pounder 26 days ago
    Make your own low power Chia Coin farming system.
    https://www.tomshardware.com/how-to/raspberry-pi-chia-coin

    Reply
  28. Tomi Engdahl says:

    Epic villain shit

    El Salvador Government to Mine Bitcoin with Volcanic Energy
    https://www.tomshardware.com/news/el-salvador-plans-mine-bitcoin-volcano

    El Salvador President Nayib Bukele said yesterday that he’s planning to use volcanic energy to mine Bitcoin. This latest effort builds on the country’s fascination with Bitcoin: Earlier this week, El Salvador became the first country in the world to consider the cryptocurrency legal tender.

    Reply
  29. Tomi Engdahl says:

    Cryptocurrencies
    Goldman Expands in Crypto Trading With Plans for Ether Options
    By Anchalee Worrachate
    14. kesäkuuta 2021 klo 18.56 UTC+3
    Investment bank intends to offer options and futures on Ether
    Crypto chief says clients see recent rout as good entry point
    https://www.bloomberg.com/news/articles/2021-06-14/goldman-expands-in-crypto-trading-with-plans-for-ether-options

    Goldman Sachs Group Inc. is moving beyond the world of Bitcoin and expanding into Ether.

    The bank plans to offer options and futures trading in Ether, the coin that fuels the Ethereum network, in the coming months, according to Mathew McDermott, head of digital assets at Goldman.

    ADVER

    Reply
  30. Tomi Engdahl says:

    Paul Vigna / Wall Street Journal:
    Companies with bitcoin on their balance sheets face an accounting risk as they often have to record impairment charges when its value falls

    Bitcoin on the Balance Sheet Is an Accounting Headache for Tesla, Others
    https://www.wsj.com/articles/bitcoin-on-the-balance-sheet-is-an-accounting-headache-for-tesla-others-11623663001?mod=djemalertNEWS

    Tesla and other companies that hold the notoriously volatile cryptocurrency often must record impairment charges when its value falls

    Elon Musk reignited his curious Twitter relationship with bitcoin on Sunday, giving the cryptocurrency a small boost.

    More pertinent to Tesla Inc. shareholders, however, is the hit to the company’s bottom line this quarter from Mr. Musk’s sometimes hot, sometimes cool attitude toward bitcoin.

    Mr. Musk is widely blamed by investors for starting the digital currency’s most punishing slide of the year after announcing on Twitter that Tesla would stop accepting bitcoin as payment for its electric vehicles. He added fuel to the fire earlier this month, tweeting breakup memes with “#bitcoin” and a broken-heart emoji. Bitcoin had slumped 30% since the original May 12 tweet.

    On Sunday, Mr. Musk said Tesla would resume bitcoin transactions when miners increase use of renewable energy sources.

    The price jumped about 8% from its Friday 5 p.m. EDT level to trade at about $39,816 Monday. He also said that Tesla had sold only about 10% of its bitcoin holdings earlier this year to confirm that the cryptocurrency “could be liquidated easily without moving market.”

    Tesla had about $1.3 billion in bitcoin parked in its treasury at the end of the first quarter and announced the bitcoin purchase in February to “diversify and maximize returns on our cash.”

    Software developer MicroStrategy Inc. and a handful of other companies, including payment app provider Square Inc., have made similar investments. Some have touted bitcoin as a store of value, or a more modern version of gold.

    But companies holding bitcoin in their treasuries face an accounting risk: Because bitcoin and other digital assets are considered “indefinite-lived intangible assets,” rather than currencies, any decrease in their value below what the company paid for them—even a temporary one—can force a company to write down the value and take an impairment charge.

    Such assets must be tested for impairment at least annually, or if the price falls below the company’s carrying value. The volatile nature of bitcoin makes quarterly revaluations routine. Once the company takes the charge, that resets the fair value of the asset.

    Conversely, if the price has gone up, the company can’t record a gain. It can do that only when it sells the asset.

    “The accounting is a little bit incongruous with the underlying purpose,” she said.

    Few other companies have been eager to jump into bitcoin. A February survey from research firm Gartner found only 5% of chief financial officers questioned planned to hold bitcoin as a corporate asset this year. Of the finance chiefs surveyed, 84% said they never planned to hold it.

    Tesla will likely take an impairment charge on its bitcoin holdings this quarter, said Wedbush Securities analyst Dan Ives.

    He added that the company was likely buying across January and at least some of those holdings are now being held at a loss.

    “If bitcoin is below $30,000, or in the low $30,000s [at the end of the second quarter], the impairment would have to be large,” he said.

    Tesla wouldn’t be the first company to take a big charge on its bitcoin holdings.

    MicroStrategy, which sells business software and holds about 92,000 bitcoins valued at more than $3 billion, already has posted quarterly losses because of this accounting treatment, both in last year’s third quarter and this year’s first.

    “This looks risky to a person who doesn’t understand bitcoin,” he said, “but it is by far the least risky way to grow the company.”

    The company’s bitcoin strategy has made Mr. Saylor a hero in cryptocurrency circles but has also made MicroStrategy’s stock as volatile as bitcoin.

    Reply
  31. Tomi Engdahl says:

    When the GDPR Meets (Public) Blockchains: Looking through the Lens of Public Communications to Users
    https://pentestmag.com/when-the-gdpr-meets-public-blockchains-looking-through-the-lens-of-public-communications-to-users/

    As a very recent regulation, the GDPR introduces a number of new principles and legal requirements to the landscape of data protection law. Examples include ‘the right to erasure’ (also known as ‘the right to be forgotten’), the requirement for explicit consent, and a significantly increased maximum penalty fine for non-compliance, which have been key highlights in public media. Some data protection principles and legal requirements defined in the GDPR have led to a tension with some new and emerging technologies. One such technology is about distributed ledgers, more commonly known as blockchains.

    A blockchain is a distributed (peer-to-peer) database where data is stored not on a central server, but among all its users. A distributed consensus protocol (e.g., proof of work) and some special incentivisation mechanisms (mostly in the form of a cryptocurrency) are normally used to encourage participation of users to make the system self-sustainable. Blockchains follow the distributed trust model and embrace transparency (all can see the data), security and anonymity (the use of cryptography and pseudonymous IDs for addresses).

    The first and the most widely used blockchain system (and cryptocurrency) is Bitcoin, which was invented and implemented by someone with the pseudonymous name Satoshi Nakamoto in 2008. Since Bitcoin, many blockchain systems and cryptocurrencies have emerged, mostly after the second half of the 2010s, e.g., the currently second largest blockchain system Ethereum went live in 2015. According to who can read and write to the distributed ledger, blockchain systems can be classified into three major categories: public (permissionless) – anyone on the blockchain network, permissioned – only a number of privileged nodes with the right permission, and private – a single or several private users.

    One unique technical feature of almost all existing blockchain systems is that, once a piece of data is stored on chain, it will remain there permanently. This feature is particularly important for public blockchains due to the lack of a centralised trusted party. It cannot be easily fixed by tweaking a blockchain system’s design and implementation details. This immediately leads to a direct conflict with the right to be forgotten defined in the GDPR, and users would have to give up this right forever if they want to use a blockchain system.

    In addition, blockchain systems, especially public ones, also have other tricky GDPR compliance issues to address, such as how to define the data controllers and data processors (who are responsible for data protection), how to obtain explicit consents and support withdrawal of consents, etc. It deserves noting that, due to the distributed and (pseudo)anonymous nature of most public blockchain systems, and according to the territorial scope of the GDPR (see the 2019 dedicated guidelines from the European Data Protection Board), the GDPR should apply because data subjects and/or data controllers/processors can be from the EU or EEA.

    The tension between blockchains and the GDPR has been noticed by the blockchain community. In October 2018, the EU Blockchain Observatory & Forum published a thematic report “Blockchain and the GDPR” to summarise the collective understanding of the community on this issue. This report acknowledges that the problem is particularly problematic for public blockchains, and recommends storing personal data off chain when possible or at least in an encrypted/anonymised form. The report also recommends that blockchain system developers and service providers should “be as clear and transparent as possible with users”

    Reply
  32. Tomi Engdahl says:

    Tim Bradshaw / Financial Times:
    Sir Tim Berners-Lee is auctioning his original source code for the web as an NFT, the first time he would be able to raise money directly from his invention — Sotheby’s sale will be first time creator has been able to raise money directly from invention — Sir Tim Berners-Lee is auctioning …
    https://t.co/Bbzi8iKBs5

    Reply
  33. Tomi Engdahl says:

    Christopher Palmeri / Bloomberg:
    Fox Corp. creates a $100M creators fund for the NFT market, as part of a broader effort that includes Blockchain Creative Labs, a new business unit to sell NFTs — – New blockchain unit will sell and manage digital goods — Dan Harmon’s ‘Krapopolis’ animated show is first project
    https://www.bloomberg.com/news/articles/2021-06-15/fox-creates-100-million-fund-for-the-nonfungible-token-market

    Reply
  34. Tomi Engdahl says:

    The idea that a nation like El Salvador could convert otherwise useless electricity (isolated power plant, no power lines) into Bitcoin was floated here three months ago. I don’t know where the idea originated. Another option is to export electricity as aluminium like Iceland does.

    Bitcoin as Battery
    https://www.nickgrossman.xyz/2021/bitcoin-as-battery/

    One of my favorite things about crypto is that, every so often, your conception of what it is changes.

    Bitcoin at first was “weird internet money” and then it was “a protocol” and then it was “digital gold”. Ethereum is “ICOs”, or maybe “DeFi”, or maybe “Web3”, or maybe all three, or maybe something else. Crypto wallets are a place to hold money, or maybe they’re also your digital identity. Crypto protocols like Maker, Compound, Helium, Arweave and Uniswap are marketplaces, or maybe APIs, or maybe inverted companies, or maybe ecosystems, or all of the above. The IRS sees crypto as property, the SEC as securities, the CFTC as commodities, FinCEN as currencies. And on and on.

    One area where I think we are going to see our conception of Crypto change dramatically over time is its relationship to energy.

    The narrative today is, overwhelmingly: crypto mining (specifically: Proof-of-Work mining for Bitcoin and Ethereum) is a dangerously large consumer of energy. Where I expect the narrative to move to over time is: crypto mining is driving the energy transition from fossil fuels to renewables.

    To explain why, let’s start with Iceland.

    Iceland has vast amounts of accessible, inexpensive renewable energy in the form of geothermal. But you can’t build power lines in every direction under the Atlantic. So instead of selling it directly, you convert the electricity into aluminum and you ship that around the world. In other words, you convert stranded renewable energy into value.

    In a sense, the aluminum coming from Iceland is like a battery. What is a battery? A way of shifting both the location and the time-of-use of energy.

    Dams are batteries; gasoline is a battery. And in a way, aluminum is a battery. Of course, while traditional batteries start and end with energy directly, aluminum’s battery is economic, converting energy to value. And that value can be re-used elsewhere (even converted back into energy!)

    Which brings us back to crypto mining. Crypto mining converts electricity into value, in the form of crypto assets (BTC, ETH, etc). Those assets, like the aluminum produced in Iceland, can then be moved, transferred and transformed. But unlike aluminum, which must be physically shipped to its final destination, crypto assets are programmable, and can move there instantly via an internet connection.

    So, if we think of Bitcoin as a battery, what can we do with it?

    The key properties of Bitcoin’s battery are: 1) always on and permissionless (no need to find customers, just plug and go) and 2) naturally seeking low-cost electricity: it will always buy when the price is right.

    Reply
  35. Tomi Engdahl says:

    How to Start Disrupting Cryptocurrencies: “Mining” Is Money Transmission
    https://www.lawfareblog.com/how-start-disrupting-cryptocurrencies-mining-money-transmission

    Bitcoin arrived on the scene just two years after the iPhone, and in that time it has helped facilitate a whole lot of bad things. All cryptocurrency assets, not just Bitcoin, are zero sum. So every dollar “made” in cryptocurrency was simply provided by someone else. And any volatile cryptocurrency, Bitcoin included, will always be inferior for legal payments.

    Now, with the rise of “big-game ransomware,” it is time to explore different methods that different governments, including the U.S. and others, can use to disrupt the Bitcoin and larger cryptocurrency ecosystem. There is no silver bullet, but there are a lot of things that can throw sand in the gears, degrading Bitcoin and other systems into unusability.

    Reply
  36. Tomi Engdahl says:

    Podcast: Hyvä, paha govcoin mistä kansallisissa digivaluutoissa on kyse?
    https://ulkopolitist.fi/2021/06/19/podcast-hyva-paha-govcoin-mista-kansallisissa-digivaluutoissa-on-kyse/
    Lohkoketjuihin perustuvien kryptovaluuttojen rinnalle on noussut uusi
    ilmiö: “govcoinit” eli valtioiden omat digivaluutat. Mitä se merkitsee, ja onko ilmiöllä itse asiassa paljoakaan tekemistä kohuttujen kryptojen kanssa?

    Reply
  37. Tomi Engdahl says:

    Officials told state media they have halted 90% of the country’s bitcoin mining operations.

    Major Cryptocurrencies—Including Bitcoin, Ethereum, Dogecoin—Plummet As China Widens Crackdown
    https://www.forbes.com/sites/roberthart/2021/06/21/major-cryptocurrencies-including-bitcoin-ethereum-dogecoin-plummet-as-china-widens-crackdown/

    The value of major cryptocurrencies—including bitcoin, ethereum, cardano and dogecoin—plummeted Monday after Beijing renewed efforts to rein in the sector and severed power to bitcoin mines in Sichuan province over the weekend, one of the country’s largest producers of the digital currency. 

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  38. Tomi Engdahl says:

    Global Times:
    China’s Sichuan Province closes crypto mines, following Xinjiang, Inner Mongolia, and Yunnan; an estimated 90% of China’s mining capacity has now been shut down — Many Bitcoin mines in Southwest China’s Sichuan Province – one of China’s largest cryptocurrency mining bases – were closed as of Sunday …

    China to shut down over 90% of its Bitcoin mining capacity after local bans
    https://www.globaltimes.cn/page/202106/1226598.shtml

    Many Bitcoin mines in Southwest China’s Sichuan Province – one of China’s largest cryptocurrency mining bases – were closed as of Sunday, according to after local authorities ordered a halt to mining in the region on Friday amid an intensified nationwide crackdown against cryptocurrency mining.

    The ban also means that more than 90 percent of China’s Bitcoin mining capacity is estimated to be shut down, at least for the short term, as regulators in other key mining hubs in China’s north and southwest regions have taken similar harsh steps.

    Some industry players had hoped that regulators in Sichuan, where hydropower is abundant, could take a softer approach. But the latest ban underscores Chinese regulators’ determination to curb speculative crypto trading to control financial risks, despite certain benefits to local economies, observers said.

    “The exit window is closing, and we’re scrambling to find overseas mines to place our mining devices,” a Sichuan-based industry insider

    Northwest China’s Xinjiang Uygur Autonomous Region, North China’s Inner Mongolia Autonomous Region and Southwest China’s Yunnan Province have all announced rules curbing Bitcoin mining.

    “That means that more than 90 percent of Bitcoin mining capacity, or one-third of the global crypto network’s processing power, will be suspended in the short term. As a result, Chinese miners must form alliances to migrate overseas, to places such as North America and Russia,” Shentu noted.

    He added that the price of mining machines could take a dive in the short term, as many crypto miners would dump the processing equipment, but market willingness to digest the oversupply would remain lukewarm. That would also “hammer” upstream supplies.

    Wang Peng, an assistant professor at the Gaoling School of Artificial Intelligence at the Renmin University of China, told the Global Times on Sunday that the Chinese authorities’ move is in line with global financial regulators’ tightened scrutiny of digital currency trading, to prevent systemic financial risks and illegal activities such as money laundering.

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  39. Tomi Engdahl says:

    Bitcoin price crash: Crypto market dramatically drops amid new fears over China regulation
    https://www.independent.co.uk/life-style/gadgets-and-tech/bitcoin-price-crash-crypto-china-b1869629.html?utm_content=Echobox&utm_medium=Social&utm_source=Facebook#Echobox=1624263737

    The crypto market has dropped dramatically amid new fears over China regulation.

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  40. Tomi Engdahl says:

    Coco Feng / South China Morning Post:
    As China expands its crackdown on cryptocurrency mining farms, analysis shows the price of GPUs has fallen on many e-commerce platforms in the country — Graphics cards from companies including Nvidia and Asus saw prices fall by as much as two-thirds on e-commerce platforms amid China’s …

    Bitcoin crackdown sends graphics cards prices plummeting in China after Sichuan terminated mining operations
    https://www.scmp.com/tech/policy/article/3138130/bitcoin-crackdown-sends-graphics-cards-prices-plummeting-china-after

    Graphics cards from companies including Nvidia and Asus saw prices fall by as much as two-thirds on e-commerce platforms amid China’s sweeping bitcoin crackdown
    Sichuan, which relies heavily on renewable hydropower, has ordered cryptocurrency mining operations to close down, following Inner Mongolia and Xinjiang

    Reply
  41. Tomi Engdahl says:

    Israel has already tested a digital shekel cryptocurrency
    https://www.jpost.com/jpost-tech/israel-has-already-tested-a-digital-shekel-cryptocurrency-671639

    The concept of issuing such a currency has been in discussion since 2017, but it decided to accelerate its research and preparation for the potential issuance.

    Israel has already conducted a pilot test of a digital shekel cryptocurrency, Bank of Israel Deputy Governor Andrew Abir said, perhaps inadvertently, at a recent conference of the Fair Value Forum of IDC Herzliya.
    Toward the end of a panel discussion, Abir said the Bank of Israel had already run a digital currency pilot. Another member of the panel seemed surprised and asked: “You have already issued a coin?” Abir responded in the affirmative.
    However, Abir said he was not optimistic that such a central-bank digital currency (CBDC) would ever be launched.
    “I had previously estimated that the chance of having a CBDC within five years is 20%,” Abir said. “My estimate has increased a bit in the last year, mainly because other countries are advancing with it too. But still there is less than a 50% chance.”

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  42. Tomi Engdahl says:

    China Tells Its Banks to Not Settle Bitcoin Transactions, Shuts Down Mining
    A crackdown on Bitcoin is underway. And the stage is set for further actions.
    https://mishtalk.com/economics/china-tells-its-banks-to-not-settle-bitcoin-transactions-shuts-down-mining

    Reply
  43. Tomi Engdahl says:

    Omkar Godbole / CoinDesk:
    Bitcoin falls to around $30,000, its lowest level since January 28 after a $64,000 peak in mid-April, as China continues to crack down on mining

    Bitcoin Price Drops Below $30K for the First Time Since January
    https://www.coindesk.com/bitcoin-drops-below-30000

    The decline brings the year-to-date gain down to just 3%, according to CoinDesk 20 data.

    Reply
  44. Tomi Engdahl says:

    Aislinn Keely / The Block:
    Elliptic report: US regulators, led by SEC, have levied $2.5B against various crypto projects since 2009, mostly from unregistered securities offerings

    Elliptic report shows SEC leads U.S. regulators in enforcement actions
    https://www.theblockcrypto.com/linked/109155/elliptic-report-shows-sec-leads-u-s-regulators-in-enforcement-actions

    A new report from Elliptic shows that the Securities and Exchange Commission (SEC) leads U.S. regulators in monetary penalties against crypto firms by a wide margin.

    Since bitcoin’s creation in 2009, regulators have levied $2.5 billion in enforcement actions against various crypto projects. Most of that comes from unregistered securities offerings, according to Elliptic’s research.

    Of the $2.5 billion, $1.69 billion came from actions brought by the SEC. Most of the SEC’s total, $1.38 billion of it, resulted from unregistered securities offerings.

    The first major action from the SEC came in 2014 when the agency ordered Bitcoin Savings and Trust to pay more than $40 million in penalties related the Ponzi scheme.

    Still, the bulk of the $2.5 billion comes from the close of the Telegram case this year, when TON Issuer Inc. settled with the SEC over its alleged unregistered securities offering. The firm agreed to return over $1.2 billion to investors and pay an additional $18.5 million in penalties.

    Reply
  45. Tomi Engdahl says:

    What we know about China’s cryptocurrency crackdown
    Miners in the country are starting to get worried
    https://www.theverge.com/2021/6/23/22544367/china-crypto-crackdown-bitcoin-mining-sichuan-ban-hydro-cryptocurrency-trading

    This week, Bitcoin dipped below $30,000 for the first time since January. That’s half what it was worth just three months ago, and it’s coming amid fears that China, the world’s biggest Bitcoin mining country, is trying to ban cryptocurrencies outright. Is it? Here’s what we know as of today.

    While we haven’t seen any reports of China flat-out outlawing cryptocurrencies, the government started issuing warnings about trading and mining cryptocurrencies in May, and told the country’s financial giants they would have to stop dealing in crypto. Since then, we’ve seen the top three mining regions in the country start making moves against miners, and the government reportedly met with major banks again just this week to reiterate that banks can’t be involved with cryptocurrency transactions.

    CHINA’S BIGGEST MINING HUBS ARE ALL CRACKING DOWN

    the University of Cambridge estimated in April of 2020 that China provided 65 percent of Bitcoin’s hashrate, with three main provinces making up the bulk of that computing power. Those three regions seem to be following the government’s example by working to curb crypto — Xinjiang, the region with the most mining on average according to Cambridge’s provincial breakdown, has shut down a major mining hub, according to The Block, and Inner Mongolia has reportedly started the process of a instituting a total mining ban. Last week, the province of Sichuan instituted a ban on mining, telling electricity companies to cut power to any mining operations they discovered.

    The Yunnan provincial government has also reportedly told its power companies to stop making side-deals with miners.

    Xinjiang’s massive role in global crypto mining was driven home in April 2021 when a single coal plant in the region flooded and shut down for a weekend, reportedly reducing worldwide Bitcoin mining capacity by around 35 percent. How much will China’s crypto output be reduced by if these regions all go offline? “More than 90 percent of Bitcoin mining capacity, or one-third of the global crypto network’s processing power, will be suspended in the short term,”

    Both miners and the market have reacted to the tightening regulations

    Since the government’s proclamations in May, graphics card prices in the country have fallen noticeably, according to the South China Morning Post, as demand for mining GPUs has fallen. The price of major cryptocurrencies like Bitcoin and Ethereum have also dropped sharply since China made those moves

    The Chinese government says it’s acting now because of concerns around crypto’s volatile price, and its potential use for money laundering and illegal dealings, according to Reuters. There’s also speculation that the Chinese government may be concerned about optics: crypto mining’s reputation as an environmental disaster

    The Chinese government has been tightening the screws on Bitcoin for years

    China isn’t the only country that’s been making policy moves around cryptocurrencies — Iran issued a temporary ban on mining during the summer months, and India is potentially making ownership of crypto illegal. El Salvador has gone the opposite direction, becoming the first country to make Bitcoin a legal tender.

    Reply
  46. Tomi Engdahl says:

    The #Bitcoin #blockchain is secured by an energy-intensive protocol called proof of work. There are other ways to secure a blockchain, though. Proof of stake, proof of capacity, and proof of burn can also work—and use far less electricity.

    Cryptocurrency Blockchains Don’t Need To Be Energy Intensive
    https://spectrum.ieee.org/computing/networks/cryptocurrency-blockchains-dont-need-to-be-energy-intensive

    Blockchain is a generic term for the way most cryptocurrencies record and share their transactions. It’s a type of distributed ledger that parcels up those transactions into chunks called “blocks” and then chains them together cryptographically in a way that makes it incredibly difficult to go back and edit older blocks. How often a new block is made and how much data it contains depends on the implementation. For Bitcoin, that time frame is 10 minutes; for some cryptocurrencies it’s less than a minute.

    Unlike most ledgers, which rely on a central authority to update records, blockchains are maintained by a decentralized network of volunteers. The ledger is shared publicly, and the responsibility for validating transactions and updating records is shared by the users.

    Blockchain consensus mechanisms decide which user gets to create the next block in the chain, prescribe how other users can verify the block is valid, and ensure users add only genuine transactions through incentives, deterrents, or both.

    The granddaddy of all consensus mechanisms—behind Bitcoin, Litecoin, Monero, and (for the time being at least) Ethereum—is called proof of work. Essentially, PoW makes adding transactions to the blockchain computationally—and therefore financially—very expensive, so as to discourage fraudulent activity. At the same time, users who go to the trouble of creating valid blocks, known as mining, are rewarded with cryptocurrency.

    Blockchain consensus mechanisms decide which user creates the next block, prescribe how blocks can be verified, and ensure only genuine transactions can be added.
    The only way miners can game a PoW system is if they control over 51 percent of the blockchain’s mining power, which is almost impossible for a large network like Bitcoin. The downside to PoW is that it requires huge amounts of electricity to power all these computations, which is both inefficient compared with other financial systems and bad for the environment.

    Each alternative, of course, has its own upsides and downsides. The three consensus mechanisms outlined here—proof of stake, proof of burn, and proof of capacity—each consume far less energy than PoW.

    Reply

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