Bitcoin is a tool to avoid police extortion in Nigeria, centralized social media is being censored amid Thai protests andFederal Reserve Chairman Jerome Powell said thecentral bank will readdress its previous 2% inflation target over the next decade.

Youre readingBlockchain Bites, the daily roundup of the most pivotal stories in blockchain and crypto news, and why theyre significant. You can subscribe to this and all of CoinDesksnewsletters here.

Top shelf

Police-resistantTocombat extortion and coercive policingin Nigeria, some, like Nigerian programmer Adebiyi David Adedoyin, are turning to bitcoin. Human Rights Watch has documented a trend in the country where police detain citizens, determine their life savings through force entry to their phones and seize it. It almost happened to Adedoyin. The money they collected to let me go in that case would have been a lot more if I had more money in my account. But I had most of my money in bitcoin, Adedoyin said. Police are less likely to look for a bitcoin wallet, he said.

Bitcoin fundFidelity Investments chief strategist, Peter Jubber, islaunching a new bitcoin index fund. Disclosed in a Wednesday morning filing with the Securities and Exchange Commission, Wise Origin Bitcoin Index Fund I, LP has a $100,000 minimum buy-in and is the latest example of Wall Street veterans warming up to bitcoin. Wise Origin links back to Fidelity Investments via Jubber and Fidelitys brokerage service and distribution subsidiaries, both of which are set to receive sales compensation from the new fund. It also shares a Boston office building with Fidelity, Danny Nelson reports.

Centralized censorshipThailands anti-government protests highlight thevulnerabilities of major social media platformslike Twitter and Facebook, CoinDesks Sandali Handagama reports. On Wednesday, Thailands digital minister Puttipong Punnakanta said authorities will continue an internet crackdown including Facebook censorship and potential interference on Twitter in an attempt to limit a groundswell of distributed political action in the country.

Exchange extortionTheNew Zealand stock exchange has halted trading for the third dayin a row as a result of criminal cyberattacks. Targeted disruption from malicious actors have knocked the NZX exchanges hosting service Spark has knocked it intermittently offline. The criminals, potentially connected to the Amada Collective and Fancy Bear cybergangs, are demanding bitcoin in order to cease the attacks. Over recent weeks, the group has also attempted to extort bitcoin from PayPal, MoneyGram, YesBank India, Braintree and Venmo, CoinDesks Sebastian Sinclair reports.

Blockchain on the LINEMessaging giant LINE haslaunched a wallet for users to manage digital assets and a blockchain platformwhere developers can issue their own tokens, tokenize digital assets and run decentralized applications (dapps). The wallet services are only available in Japan, at launch, where LINE is particularly well-known. The company, whose messaging app boasts 84 million users, aims to leverage its existing network to jumpstart the development of its token economies and accelerate adoptions of many dapps built on its proprietary blockchain platform setting it apart from other messaging app blockchain experiments.

Quick bites

At stake

Inflation watchFederal Reserve Chair Jerome Powellannounced new measures to control inflationat his annual speech on the U.S. central banks policy approach during the Jackson Hole symposium Thursday.

The Fed has left itself flexibility to change its monetary policy plans in the future, including letting inflation rise above its traditional 2% target. In his speech, Powell didnt rule out any use of its monetary policy tools, such as a broader expansion of its balance sheet to keep markets from tumbling if the economy worsens and bankruptcies increase.

Its a speech that may have long-term implications on both bitcoin andether, given the dollars relatively precarious position in the global financial system.

The implication for crypto is that the Fed will likely let inflation run hot for a few years, which could theoretically weaken the dollar and boost prices for bitcoin.

Thursday offers a reminder of just how dramatically once-slow-moving monetary forces have accelerated due to the devastating economic toll of the coronavirus pandemic. The national debt now stands at $26.5 trillion. Digital currencies are now being studied and pursued by central banks in China, the U.S. and just about everywhere else. Goldman Sachs recently warned the dollar risked losing its dominant reserve status, CoinDesks Bradley Keoun reports.

Market intel

Flat optionsBitcoins options marketforesees little price turbulence in the short term,CoinDesks Omkar Godbole reports. Bitcoins implied volatility on one-month options, a gauge of the markets expectations for price movements, fell to the lowest level since July 25. Short-term price expectations have declined sharply from 70% to 52% over the past two weeks. This wait-and-see approach is happening ahead of Federal Reserve Chair Jerome Powells Jackson Hole address, in which hes expected to signal tolerance for high inflation a move that could weaken the U.S. dollar and propel bitcoin higher.

Tech pod

Back to the Baseline?Baseline Protocol, wherecorporates can use the Ethereum public mainnet as a common frame of referenceamong different systems of record, has released its Version 1.0. The way enterprise blockchains typically work is by running data on-chain like a traditional workhorse database a grave error of judgment, John Wolpert of ConsenSys said. Announced Wednesday, the Microsoft-backed project developed by Paul Brody, blockchain lead at EY, and Wolpert uses Ethereum only for hashing and ordering events, CoinDesks Ian Allison reports.

DeFi debateDeFi Pulse, run by the Concourse Open Community, has becomethe chief source of knowledge in the decentralized finance(DeFi) space, pionering a metric called, Total Value Locked. TVL represents the dollar value of all the tokens locked in the smart contract of a given decentralized lending project. While a convenient way to rank projects, it also raises controversies around the value in locked-in value.

Op-ed

NFT games?Leah Callon-Butler, a CoinDesk columnist and director of Emfarsis, reveals the unknown world ofFilipinos using non fungible tokens (NFTs) to earn a livingduring the coronavirus pandemic. A popular Ethereum-based game, Axie Infinity, where players breed, raise, battle and trade adorable digital critters called Axies, is providing pathways out of poverty and helping spread the word about novel technology, she said. Its food on the table, its money for their families and its saving them when they cannot even leave the house during this pandemic, Gabby Dizon, the Filipino co-founder of mobile app development company Altitude Games, said.

Podcast corner

Distributing dictators hordeRuben Galindo, CEO of the P2P network Airtm, joins the latest The Breakdown to discuss how thecrypto-powered network is teaming with Venezuelas opposition government to distribute $18 millionin funds the U.S. seized from the Maduro dictatorship.

Who won #CryptoTwitter?

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Blockchain Bites: What Rising Inflation Could Mean for Bitcoin and the US Dollar - CoinDesk - CoinDesk

Digital dollars and central bank digital currencies are fast becoming a reality, with China this month reportedly expanding a pilot program for its digital yuan.

While the U.S. has barely even begun thinking about a digital dollar, its potential implications have generated extensive debate, with a former governor of the Reserve Bank of India, Raghuram Rajan, saying bitcoin and Facebook's libra cryptocurrency may eventually be "in competition" with central bank digital currencies.

Central bank digital currencies, led by China, are poised to change the way countries distribute and ... [+] manage money, with some taking inspiration from bitcoin, Facebook's libra and other cryptocurrencies.

"I would like to think that [bitcoin and libra] are also in competition with the central bank digital currency," Rajan, who served as the International Monetary Fund's chief economist before taking the top job at India's central bank, told CNBCs Beyond the Valley podcast this week.

Central bank digital currencies, sometimes referred to as CBDCs, are expected to work just like regular coins and notes issued by central banks but exist entirely online, with the U.S. Federal Reserve potentially issuing digital dollars via Fed accounts.

The race to create a working central bank digital currency was kick-started by Facebook's announcement of its libra cryptocurrency last year, however the social media giant was forced to curtail its ambitious plans after central bank governors around the world balked at the idea.

"The worry with libra was that, in its early forms, it was on the one hand very ambitious in what it wanted to do but very vague in what the safety precautions would be," Rajan said, explaining Facebook wanted to "become a world currency" without telling anyone how data would be protected or what safety mechanisms it would use.

"That's the worst possibility for central bankers: something that's going to take over the world but we have no strong confidence in that risks would be contained."

Rajan expects competition between central banks will drive CBDC development over coming years, with countries worried rival currencies might displace their own if they don't keep upbut private currencies such as bitcoin and libra will continue to exist.

"Different private currencies will do different things and it may be bitcoin has value going forward just as a store of value," Rajan said, with Facebook's libra perhaps used for "transacting" while bitcoin is used as a "speculative asset," similar to gold.

Bitcoin's value has soared over recent years, with the bitcoin price climbing to around $20,000 per ... [+] bitcoin in late 2017. While the bitcoin price has fallen by almost half since then, it is increasingly being used a store of value by investors.

This is a view echoed by many in the bitcoin and cryptocurrency community, with bitcoin investors often championing it as "digital gold" and investors increasingly flocking to bitcoin in times of heightened risk.

"CBDCs and bitcoin represent opposite ends of a spectrumfrom centralized extensions of the legacy financial system to a trustless, decentralized alternative that derives value from broad consensus," Diogo Monica, president and co-founder of Anchorage, a cryptocurrency custodian and member of libra's governing council, the Libra Association, said via email.

"While competition is inevitable, it wont be winner-take-all," Monica added. "Well likely witness the adoption of multiple assets all along the spectrum based on their utility, as well as other geopolitical factors."

Rajan also expressed concern that CBDCs could result in government overreachsomething else that bitcoin supporters argue cryptocurrencies help to offset.

"The beauty of the cash in our hands is that it's anonymous," Rajan said, asking, "even if you're not doing anything illegal should the government know the details of every transaction you make?"

Read the rest here:

Digital Dollar To Be In Competition With Bitcoin - Forbes

NEW YORK CITY, NY, UNITED STATES - 2020/02/17: A view of an american multinational financial ... [+] services corporation Fidelity Investments logo. (Photo by Alex Tai/SOPA Images/LightRocket via Getty Images)

Yesterday, Fidelity filed paperwork with the U.S. Securities and Exchange Commission (SEC) to create a new fund dedicated entirely to bitcoin, which will require a minimum investment of $100,000.

CEO of Onramp Invest, Tyrone Ross, notes Fidelitys minimum investment size indicates they have no immediate plans to expand into retail offerings, but rather want to focus on the higher end institutional side of the business.

The likely logic behind Fidelitys decision is better margins and pre-existing formula for success via industry leader, Grayscale. Grayscales bitcoin trust caters to high net worth individuals and institutions, and has seen its assets under management balloon over the past few years, now topping almost $5 billion.

Tyrone Ross further comments that Fidelity also knows that they carry a brand legacy that other investment managers and custodians simply cant match. Fidelitys brand recognition could allow them to beat out first movers like Grayscale for the growing pie of institutional capital allocated to bitcoin and other digital assets.

https://www.coinbase.com/price/bitcoin

Additionally, the Boston investment giant has ~$8.3 trillion of assets under management, which in theory, if even a small portion of their clients bought into the new bitcoin fund, it would not take long before Fidelity would rival Grayscale. For example, 1% of client assets into their bitcoin fund would give it $83 billion in assets under management, i.e. greater than 16x Grayscale.

If Fidelitys fund proves successful, the price implications for bitcoin are quite clear. For example, back in June 2020, analyst Kevin Rooke determined that Grayscales trust was buying bitcoin faster than it could be mined post-halving.

Unbelievable.

Grayscale added 19,879 BTC to their Bitcoin Trust since last week (53,588 BTC since the halving).

Bitcoin miners only produced 7,081 BTC since last week (39,544 BTC since halving).

That's almost 400,000 BTC under management for $GBTC pic.twitter.com/aMtSGHZnz2

— Kevin Rooke (@kerooke) June 25, 2020

Given bitcoin currently has a market cap of $208 billion and just underwent its third halving, the aforementioned scenario could easily happen again if Fidelitys fund gains traction.

Furthermore, it could be more potent this time around. Per GrayscalesValuing Bitcoinreport, only 37% of outstanding bitcoin are actually available for trading. The remaining amount has not been touched in over 1 year.

https://grayscale.co/insights/valuing-bitcoin/

There are numerous questions still unsolved from Fidelitys surprise announcement principally, can it gain demonstrable traction with its existing clientele? If so, Fidelity has the potential to be the next 1000 pound gorilla buying up more bitcoin than is being mined, thus a strong tailwind for price.

Disclosure: The author owns bitcoin and ethereum.

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Fidelity Is A 1000 Pound Bitcoin Gorilla In The Making - Forbes

Bitcoin (BTC) is getting most of its price support from the Federal Reserve itself, entrepreneur Tyler Winklevoss believes.

In a tweet on Aug. 25, the Gemini exchange co-founder argued that Fed policy is and will continue to bolster Bitcoins fortunes.

The reason, Winklevoss said, is that the fallout from coronavirus containment measures across the United States economy will mean that the central bank accidentally makes Bitcoin more appealing and the dollar less so.

On Thursday, Fed chairman Jerome Powell will deliver a speech that commentators expect will contain an announcement on letting inflation rise dramatically.

This alone makes Bitcoin, which has a fixed unalterable issuance and supply, instantly attractive.

The Fed, under the leadership of Jerome Powell, continues to be Bitcoin's biggest booster, Winklevoss wrote.

On Thursday, he will deliver a speech about how the Fed will begin targeting higher inflation.

As Cointelegraph reported, anticipation around the Fed inadvertently plugging safe havens such as gold and Bitcoin has been building as both assets see price surges in line with rises in central banks balance sheets.

Earlier this month, Edward Yardeni, president of Yardeni Research, said that heightened inflation targets would be wildly bullish for precious metals.

Bitcoin price, inflation and stock-to-flow chart. Source: Woobull

Meanwhile, Bloomberg reports that interest rates should remain near zero for five years, with the potential for longer periods not ruled out.

That would mimic behavior following the 2008 Global Financial Crisis, which saw rates kept unchanged at near 0% until the end of 2015.

I wouldnt be surprised if interest rates are still zero five years from now, ex-chief White House economist Jason Furman told the publication.

Fed interest rate historical chart. Source: Bloomberg

The Fed has so far steered clear of negative interest rates, diverging from a practice that has been present under the auspices of the European Central Bank (ECB) for several years.

In May, a report argued that Bitcoin was a natural focus for fund managers aiming to mitigate the impact of such a financial policy.

Read the rest here:

Tyler Winklevoss says US Fed is the biggest booster of Bitcoin price - Cointelegraph

Bitcoin, despite its growing mainstream popularity, is a favourite tool of cyber criminals, with one ransomware variant, known as Ryuk, thought to have stolen $61 million since it was created in 2018, according to the FBI.

Ransomware hackers, who encrypt their victims' files before demanding bitcoin or other cryptocurrencies to unlock them, began increasingly targeting hospitals and healthcare providers during the coronavirus pandemic, Interpol reported in April, with criminals taking advantage of an influx of remote workers.

Now, researchers who say they are concerned by this trend have compiled information that could be damaging to Binance, one of the largest bitcoin exchanges in the worldsuggesting the exchange is failing to prevent Ryuk hackers from turning the stolen bitcoin into cash.

Binance, now the world's largest bitcoin and cryptocurrency exchange by volume, was created by ... [+] Changpeng Zhao in 2017.

Researchers found that bitcoin worth over $1 million from several addresses connected to Ryuk ransomware attacks made its way to a wallet on the Binance exchange over the last three years, with the wallet still active as of this month.

"Out of the 63 sampled transactions worth around $5,700,000, it was found that over $1 million was sent from the hacking team wallets to the Binance exchange platform to cash out their ransom payments," the researchers, who asked to remain anonymous, wrote in a document seen by this reporter and shared with Binance.

"Thirteen other bitcoin addresses associated with Ryuk, containing a total of $1,064,865, followed a similar pattern. All were sent from the hackers wallets to several other addresses, and eventually to Binance, enabling them to cash out their ransom payments."

The remaining $4.7 million worth of bitcoin traced by the researchers is currently still being held at various off-exchange addresses, suggesting Binance is the cyber criminals' exchange of choice.

Asked about the report's findings, the Binance security team said that "fighting money laundering, ransomware, and other malicious activities is a never-ending endeavor at Binance."

"It is our top priority to ensure the safety of our customers and the integrity of the broader crypto space," Binance said, pointing to a number of "security features" and "engineering techniques" it uses to identify illicit activities, including "detection algorithms to flag potentially malicious activities."

"Unfortunately, when it comes to tracking illicit activity on-chain, attribution is not always black and white," Binance added, explaining "the recipient may be completely unaware of the fraudulent source of the transaction" and the exchange "has a wide variety of customers operating on its platform."

Binance chief executive, Changpeng Zhao, often known simply as CZ, has previously said the exchange relies on mixture of in-house "blockchain analysis" and social media reports to prevent hackers and cyber criminals using its services.

Cracking down on unlawful use of bitcoin exchanges is "truely a tough balance," one widely-respected blockchain industry expert said via Telegram, prefering to speak anonymously.

"If you clamp down with policies and procedures in order to try to slow these bad actors, it negatively affects all the innocent users. [There's] no easy answer."

Binance's own analysis of the fund flows found the Singapore-based bitcoin and cryptocurrency exchange Huobi received around 400 bitcoin indirectly sourced from a combination of ransomware campaigns with the now defunct exchange BX Thailand also receiving some 140 bitcoin from the Ryuk ransomware.

Meanwhile, Binance this month helped Ukraine authorities take down a group of criminals involved in a global $42 million ransomware and money laundering operation.

The rest is here:

New Binance Exclusive Reveals The Bitcoin Exchange Might Have A Serious Problem - Forbes

Bitcoin is having its worst week in over three months. Is it a bargain? Lets review a common valuation model for perspective the stock to flow model.

The Stock-to-Flow model attempts to value BTC in a way similar to other scarce assets like gold and silver. Its basic concept is that widely produced commodities like oil, wheat and copper arent good stores of value because new supply is always coming online. But only small amounts of new BTC, gold and silver are regularly introduced. This theoretically makes their value more stable.

Also known as S2F, the model quantifies scarcity by taking the total global supply of a commodity and dividing it be annual production. A higher value means that less new supply is entering the market. That translates into more scarcity and less inflation.

An unnamed Dutch investor using the moniker PlanB released the initial S2F model in on the website Medium in March 2019. Its gained widespread following as a paradigm for valuing BTC, which has appreciated more than 300 million percent from its launch in January 2009.

The cryptocurrencys S2F is now about 56 times. Approximately 18.5 million BTC currently exist, and roughly 900 new coins are created each day. That translates into about 328,500 per year.

In comparison, golds S2F is about 62 times. Thats based on about 185,000 tons of existing supply and 3,000 tons of annual production. Silvers S2F is about 22 times, according to PlanB.

The S2F model then looks at historical values of BTC and projects where it might go over time. This brings us to the most important part of the model: limited supply.

BTCs claim to fame is that only 21 million coins can ever exist. This is totally different from fiat currency created by central banks. Its somewhat different from precious metals because gold and silver production can increase over time. (Mining is relatively stable but not fixed.)

Satoshi Nakamoto designed Bitcoin to ensure that new supply will shrink over time. Every 210,000 blocks, or about four years, the reward issued to miners get cut in half. The last of these so-called halving events was in May.

As a result, the flow portion (denominator) in the S2F model gets smaller. That increases the S2F ratio, making BTC more scarce as time goes on.

Based on historical prices, the S2F model originally estimated BTCs total value should be about $1 trillion. That would translate into more about $55,000 per coin about 5 times its current value. PlanB updated the model on April 27, 2020, to include more calculations based on gold and silver. He or she then raised their price forecast more than fivefold to over $288,000.

Due to the limited historical record of cryptocurrencies like BTC, were not able to assess the effectiveness of PlanBs Stock to Flow model. And, none of this article should be viewed as a recommendation of any kind. We simply wanted to outline a key concept being used for the worlds biggest cryptocurrency at a time when more investors are considering blockchain assets.

Keep reading Market Insights for more news and education on cryptocurrencies. Next time well dig into Decentralized Finance (DeFi), a key activity associated with Ethereum the second-biggest crypto.

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Explanation of the Stock to Flow Model as Bitcoin Pulls Back - Market Insights - TradeStation Market Insights

Thesis Summary

Bitcoin (BTC-USD) is seen by many as a dangerous and volatile asset. While there is a truth to this, given the current state of the financial system and economy, I argue it is more irresponsible not to have any exposure to cryptocurrencies. Allocating a small percentage of your portfolio to cryptos could help reduce overall volatility and potentially yield incredible returns. There is no true price of Bitcoin, but there is certainly a value, and we have to believe this will be reflected in the long term.

Source: Forbes.com

The most frustrating thing about explaining cryptocurrencies to people is that they are never concerned about how they work, but rather what the price will be. Should I buy it now? How much will Bitcoin be worth in 6 months? The truth of the matter is no matter how hard people try to determine the future price of Bitcoin, nobody knows. It may be worth nothing in 5 years. However, I recommend owning Bitcoin because, ultimately, it has value.

The same principle applies to stocks. Nobody knows for certain where stock prices will be in six months, but the principle of owning stocks is sound because you are buying a share of something that produces value. Companies are complex systems that use tools and human labor to create things we want. Likewise, Bitcoin can be seen as a tool, which does indeed fulfill people's needs to some degree.

While I struggle to understand the nitty-gritty of the matter, Bitcoin does have the functionality to replace a great deal of our monetary and financial system. Through blockchain technology transactions can be made quickly and accurately no matter where you are in the world.

In Zimbabwe and Venezuela Bitcoin has aided thousands if not millions of people to protect their wealth and even transact through bitcoin. To Americans, this may sound like a moot point, since we have incredibly liquid and deep capital markets and a financial system that sits at the center of the whole world. But does this mean we don't "need" bitcoin?

While the stock market has provided us an incredible rally over the last two decades, it has become increasingly clear to economists and regular fold alike that the system upon which this is built is on very shaky foundations. What was once labeled "extreme" and "temporary" has now become commonplace (ZIRP and QE). What before were levels of debt only ever seen during wartime periods, have now become normal, with many western countries including the U.S. surpassing 100% debt/GDP ratio.

The bottom line? The only way out of this much debt is either default or inflation. Given that the U.S. can print as much money as it wants, the latter is a much more likely scenario. Gold has already reached an all-time high, and the Fed even came out today and openly admitted it will happily "tolerate" higher levels of inflation. Inflation, however, may only be the tip of the iceberg. The backbone of the monetary system, banks, could soon face a systemic collapse much like in 2008. This could come from several places; derivatives, corporate debt, sovereign debt, and also emerging market debt.

Bitcoin acts as a "hedge" against inflation. It is naturally deflationary since the amount is limited. But Bitcoin can also act as a means of exchange, which is something we might also need one day if the financial system collapses. In other words, it acts as a hedge against a systemic collapse. This seems farfetched, but banks closed their doors in Greece in 2008, and in the U.S. during the 1930s.

Circling back to our stock comparison, it is not enough to buy a single cryptocurrency. The best option is to diversify your holdings amongst a few. Here are my top three picks:

First and foremost, Bitcoin remains the most popular and useful cryptocurrency by far. When it comes to currencies in general, widespread use is an important factor, and it is likely that if today the world were to turn around and start using cryptos daily, Bitcoin would sit at the base. Bitcoin can also be seen as the gold of cryptocurrencies. Other cryptos may be quicker in terms of processing transactions, but Bitcoin has the perception of being the most secure.

The second most important crypto to own is Ethereum (ETH-USD). If Bitcoin were to ever be displaced, Ethereum would be the one. This cryptocurrency can be seen as much more than an exchange mechanism. Ethereum is built on a much more robust platform which hosts thousands of decentralized apps and "smart contracts". Ethereum's uses go well beyond the monetary space, which makes it a must-own in my portfolio of cryptos.

Lastly, why not leverage the technology of cryptocurrency with the intrinsic value of an age-old store of wealth? This can be easily done with PAX Gold (PAXG). These can be seen as digital gold tokens backed by 1 troy ounce. Paxos is a New York-based company and the tokens are redeemable for LBMA-accredited London Good Delivery gold bars.

Bitcoin and other cryptocurrencies have made many people millionaires. While it will be hard for these coins to experience the same exponential gains, they have now become a viable and real alternative to centralized fiat currencies. They are the ultimate hedge against systemic collapse and incredibly secure ways of storing wealth if kept properly. (cold storage)

Disclosure: I am/we are long BTC-USD, ETH-USD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Here's Why Bitcoin Is A Must In Your Portfolio - Seeking Alpha

Bitcoin traders are hitting the sell button Friday while the ether options market loads up on lower prices.

After holding around $11,800 Thursday into Friday, bitcoin started to slide downward around 08:00 UTC (4 a.m. ET), dropping to a 24-hour low of $11,605. Spot volumes were lower to cap off the workweek. It was $138 million on major spot USD/BTC exchange Coinbase, lower than its $179 million average over the past month.

Over-the-counter crypto trader Henrik Kugelberg expects a bullish, if not record, fourth quarter ahead for bitcoin, even if the number of sluggish market days pile up. I expect a slower curve but would not be surprised if we reach a $15,000 BTC in October and somewhere around $18,000-$20,000 at year end.

Kugelberg points to the uncertain economy as giving people reason to swap fiat for crypto investments. Theres the falling value of the dollar to be priced in; we have not seen the end of the dollars fall that is for sure, he added. Indeed, while the U.S. Dollar Index, a measure of the greenbacks strength versus a basket of other fiat currencies, is up 0.52% Friday, its still at lows not seen since June 2018.

In the bitcoin options market, Neil Van Huis, director of sales and institutional trading at liquidity provider Blockfills, noted volatility decreased this week. Bitcoins at-the-money implied volatility, which is a metric to forecast movement in prices, has dropped from 71% Monday to 59% Friday. Looks like some normalization of volatile trading as of late, Van Huis said.

Opportunities in Ethereum-powered DeFi are taking some traders focus away from the bitcoin market, Kugelbrg told CoinDesk. The crypto community is in a total FOMO to DeFi-related altcoins, said Kugelberg. I believe the run-up for bitcoin may be slower than expected and fueled by retail sales to newcomers wanting a somewhat steadier haven.

Ether options market bearish

Ether (ETH) was down Friday, trading around $399 and slipping 3.8% in 24 hours as of 20:00 UTC (4:00 p.m. ET).

The ether options market is predicting prices by the end of 2020 wont be much higher than they are now for the worlds second-largest cryptocurrency. December 20 maturities only give ether a 25% chance of being over $520, a 38% probability of being over $420 and a 41% chance of being over $400, according to data aggregator Skew.

Despite the probabilities, Jean-Marc Bonnefous, managing partner for Tellurian Capital, which has been investing in crypto projects since 2014, is still bullish on ether. He doesnt see Ethereums fundamental issues, such as fees constraining the network, as anything but a speed bump on the fast-moving DeFi highway. Structurally, no, said Bonnefous. But short term, ether needs a new trigger to go higher.

Other markets

Digital assets on the CoinDesk 20 are mixed Friday. Notable winners as of 20:00 UTC (4:00 p.m. ET):

Notable losers as of 20:00 UTC (4:00 p.m. ET):

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Market Wrap: Bitcoin Dips to $11.6K, ETH Options Predict Price Below $400 by End of Year - CoinDesk - CoinDesk

Bitcoin (BTC) starts another week in a bullish mood as hurdles line up to shape price trajectory.

Cointelegraph presents five factors determining where BTC/USD may go in the coming days, and what traders should look out for.

Stocks saw records last week with the S&P 500 hitting all-time highs. Despite a lower overall impact on Bitcoin, moves on macro markets are still more than capable of spilling over into cryptocurrency.

Upward momentum continued on Monday, with stocks futures up but a sense of foreboding building about an upcoming speech from the United States Federal Reserve.

Markets were waiting to hear news about inflation, which rumors previously suggested could target up to 4%.

This would be a perfect storm for buoying safe havens, analysts said, in an environment which has already sent the U.S. dollar index to two-year lows and flooded the market with excess liquidity from quantitative easing.

The news will come from Fed Chair Jerome Powell during its annual Economic Policy Symposium, held in Jackson Hole, Wyoming on Thursday.

More clarity will no doubt be sought via this weeks Jackson Hole Symposium, Ben Emons of macro analysis firm Medley Global Advisors told Bloomberg on Monday.

U.S. futures were meanwhile up on the day, while Asia set a bullish tone thanks to Washington reassuring on not blocking Chinese social media network WeChat shares in owner Tencent rose over 4% as a result.

On short timeframes, Bitcoin was pleasing analysts as the week began. For Cointelegraph Markets analyst Michal van de Poppe, a run to lower levels was now less likely after BTC/USD avoided a retest of levels below $11,500 on Sunday night.

In a transaction analysis video on Sunday, van de Poppe added that in the event of a breakdown, the buy the dip level to look out for would nonetheless fall below $10,000.

The real level Im watching for buy the dip levels if we do break out is between $9,600 and $9,900, he summarized.

BTC/USD short-term analysis. Source: Michal van de Poppe/ Twitter

Concerns over a break below five figures had become less common among commentators, while Van de Poppe mostly discarded rumors of a pullback to below $8,000.

The last time that Bitcoin traded below $10,000 was at the end of July.

A mixed bag for Bitcoin fundamentals saw network difficulty adjust upwards 3% to hit new all-time highs, but hash rate trend lower.

According to data from monitoring resource BTC.com, difficulty increased by 3.6% on Monday to hit 18.17 trillion.

The new record suggests that miner participation in the network is stronger than ever, and competition is being reflected in how taxing it is to solve equations on the blockchain.

The difficulty adjusts automatically and is an essential feature of Bitcoin as self-regulating hard money. Issuance remains fixed regardless of how high or low difficulty is.

Meanwhile, the hash rate declined around 8% over the past seven days, estimates show, currently circling 119 exahashes per second (EH/s).

Bitcoin 7-day average hash rate six-month chart. Source: Blockchain

Given the imprecise nature of hash rate measurements, it is likely that the number will normalize after the difficulty adjustment, continuing a broad uptrend in place since just after Mays block subsidy halving cut miner revenues by 50% overnight.

The spotlight could fall once again on crypto derivatives this week as the month draws to a close and settlements near.

62,000 BTC ($730 million) worth of Bitcoin options will expire on Aug. 28, reminiscent of the end-of-month action from June.

Bitcoin options open interest expiry dates. Source: Skew

Traditionally, settlement junctures exert downward pressure on BTC price, but as Cointelegraph reported, Junes near-$1 billion expiry turned out to be a non-event for the market.

With every week that passes, however, futures reach a wider audience, evidenced by Grayscales record inflows in August.

At the same time, on-chain analytics resource Skew reported record short positions for CME Groups Bitcoin futures, something it described as most likely due to the profitability of the so-called cash & carry trades.

These are performed between the futures price and spot price of Bitcoin as a form of arbitrage.

Bitcoin investor sentiment is extremely greedy and getting greedier.

That was the conclusion from sentiment indicator the Crypto Fear & Greed Index, which on Monday remained firmly bearish on the overall market mood.

As Cointelegraph reported last week, the Index almost hit record greed before a slight retracement, nonetheless rebounding toward its maximum 100/100 over the weekend.

The Index uses a basket of factors to measure whether the market is oversold or conversely due for a correction.

Crypto Fear & Greed Index as of Aug. 24. Source: Alternative.me

In terms of volatility, using Bollinger Bands on BTC/USD likewise hints that fresh price action is incoming, but whether it will be up or down remains uncertain.

Last week, creator John Bollinger himself described the current Bitcoin rally as picture perfect.

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Fed, futures and fundamentals: 5 things to watch in Bitcoin this week - Cointelegraph

Micheal OLeary, the CEO of major budget airline Ryanair,has come out very bearish on Bitcoin (BTC).

Recently speaking to The Times, OLeary likened Bitcoin to a Ponzi scheme and advised investors to avoid it:

I have never, and would never, invest one cent in Bitcoin, which I believe is equivalent to a Ponzi scheme. [...] I would strongly advise everyone with any shred of common sense to ignore this false story and avoid Bitcoin like a plague.

OLeary was referring to an apparent crypto scam, Bitcoin Lifestyle, which claimed to have his approval in a promotional campaign.

A bogus article on a fake news outlet claimed that, in an interview on the Late Late Show, OLeary shocked audiences and the host Ryan Tubridy by showing how much money he was making with the Bitcoin scheme,which advertises itself as an automated trading system.

According to the scams campaign, the publicity stuntwas enough to drive National Ireland Bank to phone the show in anattempt to stop the bit from being aired.

One problem is that the National Ireland Bank does not exist.

Using the image of wealthy and famous people to promote cryptocurrency scams is a very common tactic to gain credibility among potential investors.In early April, a Bitcoin trading scam claimed the involvement of the Duke and Duchess of Sussex Prince Harry Charles Albert David and Meghan Markle.

In March, Janet Jacksons billionaire ex-husbandWissam Al Manademanded Facebook to reveal who paid for ads featuringhis image while promoting a crypto fraud.

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I would never invest one cent in Bitcoin, says Ryanair CEO - Cointelegraph

Cryptocurrency advocates have been recently discussing the mysterious Bitcoin inventor Satoshi Nakamoto as RSKs chief scientist, Sergio Demian Lerner, published a paper called The Patoshi Mining Machine. Essentially, Lerner simulated Satoshis mining experience. The findings estimate that Bitcoins creator used a single computer to mine an estimated 1 million bitcoin minted in the early days.

Sergio Demian Lerner is well known for publishing one of the first estimates backed by technical data in 2013 concerning Satoshi Nakamotos alleged stash of bitcoin.

During the last seven years, Lerner has published a few more papers about this subject and it is estimated that Satoshi mined 1.1 million BTC. Not too long ago in 2018, Bitmex Research published findings that estimated Satoshi may have only mined 700,000 BTC.

At the end of July 2020, the blockchain trackers and researchers from Whale Alert published a new research report which placed the figure around 1,125,150 BTC.

Lerners latest paper The Patoshi Mining Machine looks into whether or not the Patoshi pattern (Satoshis mining) was done by multiple computers or a single PC. Lerner simulated Satoshis mining experience by mining a large part of Patoshi nonce space scanning sequentially in the range.

The RSK chief scientist paper noticed a tendency while re-mining the old Satoshi bocks which reduces the nonce value.

It turned out that re-mining reveals a strong tendency of the Patoshi mining algorithm to choose higher nonces when scanning the inner nonce, Lerner discovered. This tendency suggests the nonce was being decremented, which is the opposite that the Satoshi client version 0.1 does.

Re-mining revealed some of the possible solutions chosen by the miner, Lerner detailed and one that exists in the blockchain, will be called the real solution.

The finding leads Lerner to believe that Satoshi didnt leverage 50 computers to mine the Patoshi blocks and its very likely the inventor utilized a single machine back then.

Lerner thinks that Satoshi may have been scanning subranges in parallel when he examined the nonce imbalance decreases. Since the nonce imbalance decreases when analyzing two subranges together, this suggests Patoshi was scanning the 5 subranges in parallel, but each subrange internally sequentially, Lerners paper notes.

The researchers study further adds:

This contradicts a theory that Patoshi deployed the first mining farm of 50 independent computers (or any other highly decoupled system) and supports the theory that Patoshi was simply multi-threading in a high-end CPU.

Lerner said that he attempted the re-mining process in 2014, but shelved the idea for a number of years. The researcher detailed that this year he re-mined with a standard CPU and re-mined the first 18K block only to check that the theory matched the reality (It does).

During the last few years, the search for clues about Satoshi has been a fan favorite and people continue to investigate his past movements and how the inventor jumped-started the Bitcoin network.

Lerners Patoshi papers have always lent credence to a number of theories about the estimated size of Satoshis bitcoin stash and how Nakamoto may have operated in the early days.

What do you think about Sergio Demian Lerner re-mining 18,000 blocks in order to discover Satoshis secrets? Let us know what you think in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons, https://bitslog.com

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Re-Mining Simulation Shows Satoshi Used a Single High-End PC to Mine 1.1M Bitcoin - Bitcoin News

The International Monetary Fund (IMF) has published a video explaining what cryptocurrency is. Besides suggesting that cryptocurrency could completely change the way we sell, buy, save, invest, and pay our bills, the video states that it could be the next step in the evolution of money.

The IMF tweeted a video explaining what cryptocurrency is on Sunday that instantly went viral. Referring to cryptocurrency as a special currency, the two-minute video attempts to outline its benefits in payments, such as by removing middlemen, lowering costs, and increasing transaction speed. It also warns of what it sees as risks, such as anonymity and volatility. The video has garnered more than 523K views at the time of writing; it has been retweeted 5.5K times, liked 8.2K times, and received 807 comments. The video ends with:

If we can counter the risks, then this new technology or some variation of it can completely change the way we sell, buy, save, invest, and pay our bills. And who knows, this could be the next step in the evolution of money.

The video references the IMFs F&D (Finance & Development) magazine, June 2018 edition, entitled Money, Transformed The future of currency in a digital world. When that magazine edition came out, the organization posted the above video on its Youtube channel, which received little interest at the time.

Many people in the crypto space view the IMFs video as bullish. Tweets such as IMF learning fast. Global adoption is on its way, This is a big deal, and They are finally understanding blockchain and cryptocurrency are not going away flooded Twitter. One user wrote: I still cant believe I see this. IMF shills cryptocurrencies, of course, not bitcoin yet, but that time will come too.

Since the IMFs crypto explainer video does not mention any specific cryptocurrency, many commenters took the opportunity to promote their favorite coins.

Some people, however, criticize the content of the IMF video, saying that the information is misleading and omits many important points, including mining. Many also believe that bitcoin should have been mentioned. Nothing about why people choose to store their wealth in a scarce currency like bitcoin instead of fiat currencies that are benign constantly debased by banksters and cantillionaires, one user tweeted. You forgot one fundamental difference between fiat and bitcoin. Fiat is printable by centralized entities like government & banks, whereas BTC is decentralized and has a limit cap to its supply where only 21 million will ever exist in this universe. All powered by blockchain, another wrote.

Some questioned who the bad guys in the video are supposed to be and frowned upon it referring to private keys as passwords. Some say the video gives the appearance that all cryptocurrencies share the properties of bitcoin, and some suspect that the IMF is planning to launch its own cryptocurrency. One user noted that this video is set up like a Prelude to their own crypto coin that will come out at some point fixing all the problems with crypto that the IMF has outlined in this video.

What do you think about this IMF video? Let us know in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons, IMF, Twitter

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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IMF Publishes Cryptocurrency Explainer, Saying It 'Could Be the Next Step in the Evolution of Money' | News - Bitcoin News

The rising value of the digital currency Bitcoin has helped fuel the growth of a South Florida Bitcoin ATM company and a statewide association that is working to create a friendly business environment for financial technology firms.

In 2016, Lee Hansen and his business partner Lennart Lopin started ByteFederal, a Venice-based company that manufactures and operates Bitcoin ATMs where people can trade the currency for cash.

CEO Mr. Hansen, 48, has worked as a financial advisor and software engineer. The companys chief technology officer, Mr. Lopin, 42, is also a software engineer with a special interest in computational linguistics and artificial intelligence.

ByteFederal now operates 125 ATMs in 15 states, with 38 locations across Florida. The companys website allows you to search for local businesses that host its ATMs, such as Fire Vape Smoke Shop in West Palm Beach, Friendly Market in Naples, Down T Liquor in Fort Myers, and PGI Liquors in Punta Gorda.

A ByteFederal Bitcoin ATM. The company manufactures and operates Bitcoin ATMs across Florida and in 14 other states at local businesses such as Down T Liquor in Fort Myers, Fire Vape Smoke Shop in West Palm Beach, Friendly Market in Naples and PGI Liquors in Punta Gorda. EVAN WILLIAMS / FLORIDA WEEKLY

In 2018, Samuel Armes and Mr. Lopin co-founded the Florida Blockchain Business Association. Blockchain is a digital architecture that allows Bitcoin to work by keeping a public ledger of all transactions, but it has potential applications across many other industries.

Mr. Armes serves as president of the association. He and other members have supported two bills signed in to law by Gov. Ron DeSantis. The first created a 13-person Florida Blockchain Task Force, which held its first meeting last September in Tallahassee. The second, signed by Gov. DeSantis in July, created a fintech sandbox for blockchain and cryptocurrency companies.

According to the Blockchain Business Association, this fintech sandbox creates an environment where companies that disrupt the status quo are provided regulatory flexibility to operate and provide new types of products and services.

It allows the Office of Financial Regulation to waive certain licensure requirements for FinTech companies to offer innovative services in Florida while ensuring OFR has sufficient authority to protect consumers.

VERLEY

Overall, the fast-rising value of Bitcoin has helped lift business efforts. But at the same time, Bitcoin is still widely considered a volatile, high-risk form of currency in which investors should be prepared to lose their money.

The price of Bitcoin quickly recovered since losing half its value as investors initially fled in a flash crash during the beginning of the pandemic. But in recent weeks the price continued to rise from a low this year of below $5,000 to upwards of $12,000, suggesting that more investors see this form of digital currency as a safe haven not unlike gold, say Bitcoin industry professionals and enthusiasts.

Bitcoin is often called digital gold because only a finite number of Bitcoins, about 21 million, will ever be created. It is by far most popular form of cryptocurrency, though there are others. The idea and design of the Bitcoin system was created by an anonymous person in 2009 using the pseudonym Satoshi Nakamoto.

Over the last five years, its value went on a rollercoaster ride from about $400 per coin five years ago to an all-time high of $19,665 in 2017 before coasting down below $4,000 in 2018 and then rising again above $11,000 in 2019, according to CoinDesk.

ByteFederal makes money on transaction fees at its ATMs, and businesses where the ATMs are placed get a cut of the fees.

Starting a business based on cryptocurrency in a system its designed to disrupt was an uphill battle, Mr. Hansen and Mr. Lopin said. They interviewed with more than 400 banks before finding one that would take them on.

It took us years, Mr. Lopin said. It was a very, very difficult journey just to get a bank account.

As a financial services company they are also monitored by the Financial Crime Enforcement Network, a division of the Treasury.

Once they began, though, their business grew along with the price of Bitcoin. Now, the pandemic appears to have had a positive effect on business.

Weve seen a significant uptick in transaction volume throughout the entire process, Mr. Hansen said.

He attributes that to a renewed interest for many people in Bitcoin as a potential safe haven for money and a possible future alternative to central banking.

For those interested in exactly how Bitcoin works, its many implications or its mysterious history, Mr. Lopin recommends what he calls an instant classic in the world of Bitcoin called The Bitcoin Standard. There are also numerous YouTube videos explaining it. Bitcoin is touted as an alternative to our current system in which we trust a central banking system to handle our transactions and make sure we dont cheat.

The major innovation behind Bitcoin was to create a monetary system that can be trusted without any central authority. This decentralized system relies on computers throughout its network to provide checks and balances and keep a public ledger on every transaction. The ledger is managed within a digital architecture called a blockchain.

It is all still relatively new technology, Mr. Lopin points out. And Bitcoins volatile price, like the stock market, can reflect many factors including inflation, hype, media influencers, political events, pandemics, and how many people use it.

Other members of the Blockchain Business Association that Mr. Armes started are pursuing their own projects in South Florida.

A liaison for the Association in Palm Beach County and an SEO and digital marketing consultant, Lenny Mauricio started an initiative to convince businesses along Clematis Street, a shopping and entertainment destination in West Palm Beach, to take Bitcoin and other cryptocurrencies from customers as a payment option.

He hopes to have 20 or more businesses signed up over the next sixth months with an app that allows them to use the digital currency system. After the system shows success along Clematis, he plans to take it to other cities such as Miami.

Were not trying to eliminate the current financial system, all were trying to do is give them an alternative, he said.

Mr. Armes worked for a lobbying firm before deciding to start his own crypto lobbying firm, which grew in to the Blockchain Business Association.

Now age 23, Mr. Armes recalls being introduced to the world of Bitcoin when a friend bought him some in high school about seven or eight years ago.

How is that investment doing now?

Its doing pretty damn good, he said, though he didnt name an exact figure.

A Southwest Florida cryptocurrency enthusiast, as well as a filmmaker and photographer, among other activities, Justin Verley, 24, delved in to Bitcoin as an investor starting in 2016. He has worked as a Bitcoin miner people in the cryptocurrency system who record transactions on a public digital ledger and are thereby rewarded with a fee for doing so. He plans to go back to school to further study blockchain and its applications.

He pointed out that using Bitcoin is relatively germ-free compared to money and that Bitcoins price has gone up in correlation with the federal government printing massive amounts of money to help with the pandemic economic downturn.

If anything, Id say COVID-19 is a driving force for Bitcoin in terms of price and usability, he said.

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Bitcoin's presence in South Florida is growing - Key West Florida Weekly