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Jack Dorsey: Bitcoin is becoming the Internets national currency – Decrypt

Twitter CEO Jack Dorsey on Thursday emphatically ruled out joining Facebooks Libra project, and reiterated his belief that Bitcoin and cryptocurrencies are the future of Internet money.

Dorsey was asked during a Twitter News Summit in New York whether Twitter would join the Libra Association, the suite of companies supporting Facebook in its cryptocurrency project.

Hell no, he replied, adding by way of explanation that Libra is not an Internet open standard that was born on the Internet.

It was born out of a companys intention, and its not consistent with what I personally believe, and what I want our company to stand for, he said.

Dorsey then took the opportunity to reiterate his belief in Bitcoin and other decentralized cryptocurrencies as the future of Internet money.

I think the Internet is somewhat of an emerging nation-state in almost every way, Dorsey said. It almost has a currency now in the form of cryptocurrency and bitcoin.

The Twitter CEOs belief in Bitcoin runs deep. Hes an investor in the cryptocurrencys scaling solution, Lightning Labs, and a fan of Tippin, the add-on that allows Twitter users to tip each other in crypto. Earlier this year, he announced plans to hire engineers and designers to work on open-source contributions to the Bitcoin ecosystem, reporting directly to him.

Back in June, Dorsey gave several reasons for his belief in Bitcoins supremacy over other cryptocurrencies including the power of its brand; the purity of the principles laid down by its inventor Satoshi Nakamoto, its scarcity (only 21 million bitcoin will be created) and its resilience in the face of the challenges and attacks the crypto has faced in the 10 years since its invention.

During yesterdays Summit, Dorsey further said that he had issues with Libra being described as a cryptocurrency. They use that label liberally I dont know if its a gimmick, but cryptocurrency wasnt necessary to make that thing work, he said.

Earlier this week, Facebook CEO Mark Zuckerberg was called before Congress, to answer further criticism of Libra. He provided assurances that: Facebook would withdraw from Libra, if it was not approved by U.S. regulators.

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Zuckerberg also admitted that, as a big company, Libra did not live up to one of the key tenets that define cryptocurrencies, namely decentralization.

As a big company, we are not going to do anything thats decentralized, he said. Later he attempted to backtrack somewhat, adding that decentralization was a future aspiration.

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Jack Dorsey: Bitcoin is becoming the Internets national currency - Decrypt

Latest Bitcoin price and analysis (BTC to USD) – Yahoo Finance

Bitcoin (BTC) is trading slightly above $8,200 after losing about 2% in value since last week, when BTC was hovering around $8,400.

BTC experienced a substantial dump earlier in the month, when the price crashed by 10%, from $8,800 to $8,000.

Following a number of lower highs, Bitcoin now seems to be in a short-term downtrend, with the price dropping below its 200-day EMA.

Will the price recover back to $10,000 and above? If so, when?

Lets take a look at Bitcoins chart.

BTC chart, by Trading View

As you can see from the chart above, BTC is now back to trading below its 20-day EMA, 50-day EMA and 200-day EMA. The price was swinging between the 20-day and the 50-day EMA during early to mid-September. However, since the last week of the month, we saw the price finally closing below all EMAs.

Last week, I stated Bitcoin should be bouncing back after the drop but we might have to wait for a few more weeks while it consolidates between $7,000 and $9,600. It seems were going on that direction.

BTC is now trading above the key $8,000 and I argue it will keep trading above during this next few days, as the coin is above key volume profile levels.

As history tells us, BTC is prone to huge drops between 30% and 40%, even during bull seasons. Hence, I dont advise to fight the trend, but to always surf it for as long as possible. Hopefully, within the next three to five weeks, we will see a major reversal after a period of serious accumulation by hodlers.

Volume has dropped from a peak of $27 billion earlier in the year to more than $15 billion now, although its currently on a positive trend towards $20 billion.

Bitcoins market dominance has also slightly decreased about 2%, since early October, from 68,5% to 66,7% according to CoinMarketCap.

As veteran traders and investors usually say, smart money buys when theres blood on the streets. Looking at the overall market behaviour, Im quite confident that were still in a bull run, but we should enjoy these consolidation periods and take the opportunity to scoop up some more BTC.

These drops wont last forever, and if you think traditional markets are currently on a massive bull-run I wouldnt be so sure the trend wont reverse.

How can the markets not push higher up throughout the year after the ECBs recent rate cuts, the continuous share buybacks from huge corporations, or the inverted bond yield shoving investors away towards riskier assets?

In addition, the repo market activity as in loans from central banks to commercial and investment banks has spiked to new monthly records. That adds up to another signal of weakness among most banks.

Safe trades!

Current live Bitcoin pricing information and interactive charts are available on our site 24 hours a day. The ticker bar at the bottom of every page on our site has the latest Bitcoin price. Pricing is also available in a range of different currency equivalents:

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In August 2008, the domain name bitcoin.orgwas registered. On 31st October 2008, a paper was published called Bitcoin: A Peer-to-Peer Electronic Cash System. This was authored by Satoshi Nakamoto, the inventor of Bitcoin. To date, no one knows who this person, or people, are.

The paper outlined a method of using a P2P network for electronic transactions without relying on trust. On 3rd January 2009, the Bitcoin network came into existence. Nakamoto mined block number 0 (or the genesis block), which had a reward of 50 Bitcoins.

If you want to find out more information about Bitcoin or cryptocurrencies in general, then use the search box at the top of this page. Heres an article to get you started.

As with any investment, it pays to do some homework before you part with your money. The prices of cryptocurrencies are volatile and go up and down quickly. This page is not recommending a particular currency or whether you should invest or not.

Disclaimer: The views and opinions expressed by the author should not be considered as financial advice.

The post Latest Bitcoin price and analysis (BTC to USD) appeared first on Coin Rivet.

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Latest Bitcoin price and analysis (BTC to USD) - Yahoo Finance

Oxford English Dictionary Recognizes Growing Adoption of Crypto by Adding ‘Satoshi’ – CryptoGlobe

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Oxford English Dictionary Recognizes Growing Adoption of Crypto by Adding Satoshi

oxford-english-dictionary-recognizes-growing-adoption-of-crypto-by-adding-satoshi

The Oxford English Dictionary (OED), which calls itself "the definitive record of the English language", has added the word "satoshi" to its database.

The Oxford English Dictionary is published byOxford University Press(OUP). The OED follows the development of the English language over the past thousand years, "providing a comprehensive resource to scholars and academic researchers, as well as describing usage in its many variations throughout the world."

Work on the OED began in 1857 and although the most recent printed edition (i.e. the 2nd edition) was published in 1989, an online version of the OED has been available since 2000, which is when the editors of the OED began the work of creating the third edition of the dictionary (expected to be ready by 1837 and only in an electronic form). Currently, the OED has definitions for over 600,000 words.

According to a blog post by the OED about its latestquarterly update,"satoshi" (a word that was "first used less than seven years ago") was the most recent addition. Here is the official definition:

The smallest monetary unit in the Bitcoin digital payment system, equal to one hundred millionth of a bitcoin.

And here is what the entry for "satoshi" says about the etymology of this word:

the name of Satoshi Nakamoto (reportedly born in 1975), to whom the introduction of the Bitcoin system is attributed, presumed to be a pseudonym for one or more unknown persons

As for the word "cryptocurrency", this is how is defined in the OED:

1. An informal, substitute currency. rare. 2. Any of various digital payment systems operating independently of a central authority and employing cryptographic techniques to control and verify transactions in a unique unit of account; (also) the units of account of such a system, considered collectively.

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Wonders Of The Blockchain-Enabled Supply Chain – Coinrevolution.com

Stuart Haber and Scott Stronetta were the very first individuals with the idea of cryptographically securing a block. The objective of their concept was to securely timestamp the documents in a way that it could not be tampered with.

But it wasnt until 2008 when Satoshi Nakamoto conceptualized the idea. He improved the system using methodology similar to hash cash. Bitcoin was born the following year. Still, nobody knows Satoshi Nakamotos true identity. A whole range of bitcoin conspiracies has erupted and gone dormant.

The technology underlying bitcoin is being widely used across industries to enhance the existing model of operations in various internal and external functions. As we approach the next generation, blockchain is estimated to be used as a platform for e-government, predictive analytics, artificial intelligence, security, and IoT. Supply chain is one of the areas that blockchain technology is seeing increasing usage.

Most companies use supply chain management and enterprise resource planning softwares. Now, despite these investments, the companies are limited invisibility when it comes to where all their products go at a given time.

The analogue gaps within the ecosystem of the supply chain are conspicuous. Production may be digitally recorded at the manufacturing point, but as soon as product is disbursed, visibility and tracking are restricted to tools like the RFID and PDF.

These technologies may have been relevant three decades ago, but not now. The creation of data where a pool of entities could agree was only possible through a middleman. Until blockchain rocked the scene.

The P2P technology has eliminated the need for a middleman and made it possible for companies in the ecosystem to share and agree on some pieces of information in the ecosystem.

There is no need for a central intermediary. All transactions and data are synchronised through blockchain and participants in the network can verify calculations and the work of others.

The same logic is being applied to the supply chain. Blockchain features such as security and redundancy of blockchain apply to things like inventory, which has resulted in the substitution of chain partners with banking nodes. It has created a foundation of an entirely new way of supply chain management using blockchain.

Essentially, the technology provides that there cannot be two locations of an inventory at the same time. When a product moves, it immediately reflects on the network as in transit. At the same time, users can track their traceability to its given point of origin.

Although the supply chain management system powered by blockchain is still nascent in the space, multinationals have been quick to adopt it and are still pilot testing the system.

For instance, Starbucks is set to use the DLT system powered by Azure Blockchain Service in achieving the traceability benefit. On the other hand, PepsiCo just tested project proton to test how blockchain-powered supply management can increase efficiency. They have discovered a 28% boost in supply chain efficiency.

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Wonders Of The Blockchain-Enabled Supply Chain - Coinrevolution.com

With 18 Million Bitcoins Mined, How Hard Is That 21 Million Limit? – CoinDesk

In a matter of hours, the 18 millionth bitcoin will have been mined and the worlds first cryptocurrency will draw one step closer to its hard-coded cap of 21 million coins.

The pie is shrinking. This [milestone] gives people some simple math to raise awareness about where were at in the [bitcoin mining] process, said Alex Adelman, CEO of bitcoin rewards platform Lolli, adding:

Its good for people to see the progress of bitcoin, to look back on everything that has been done and will be done for the next 3 million. You should pay attention to the next 3 million.

But dont worry, youll have 120 years to do so.

The next 3 million bitcoins will be progressively slower to mine as a result of block reward halvings which occur every 210,000 blocks (or roughly four years) and reduce new bitcoin supply by 50 percent. The final bitcoin is expected to be mined in 2140.

Or is it?

It seems blasphemous even to go there, given bitcoins value proposition as digital gold. But outsiders foresee a day when the 21 million cap might, gasp, come up for debate.

Eventually, once there are no more bitcoins left to mint, miners will rely solely on transaction fees, which are paid by users to transfer coins through the blockchain. This change gives cause for concern to some who view bitcoins block subsidies as integral to bitcoins incentive system.

To skeptics, this could undermine the structure that motivates miners to record validated transactions in the ledger.

All of your assumptions about incentives, risk and value go out the window, said Angela Walch, a research fellow at the University College London Centre for Blockchain Technologies. Please take the blinders off and stop assuming that everything will still work well once everything goes to a pure transaction-fees system as opposed to block [subsidy].

Currently, with each block, miners get a subsidy of 12.5 newly created BTC, worth roughly $99,370, plus any additional transaction fees, which normally dont totalmore than 1 BTC.

Along the same lines, Paul Brody, global innovation leader for audit firm Ernst & Young (EY), said bitcoins limited supply could limit the cryptocurrencys utility as a global reserve currency.

Pointing to situations such as the Great Recession where monetary policy interventions were needed to lift the U.S. out of economic turmoil, Brody said:

If bitcoin were to become a substantial part of the global monetary system, we would need to address [the hard supply cap] because a lot of economists agree deflationary systems are not necessarily the best thing.

Both Walch and Brody suggested that bitcoins 21 million supply cap might one day be subject to change. What if?

We need to acknowledge that the 21 million cap is aspirational, said Walch. If people decide to change that [supply] cap for certain reasons and enough people make that decision, the system will move to it. Its aspiration, not reality.

While technically feasible, a change to the supply cap would almost certainly be a non-starter for bitcoin users who cherish its gold-like properties. Indeed, bitcoins code has long been governed by a community with a bias toward retaining the coins original features as created by its pseudonymous founder, Satoshi Nakamoto.

Unlike ethereum, the worlds second-largest cryptocurrency, the bitcoin blockchain has rarely seen backward-incompatible, system-wide upgrades changing core code features.

In the rare instances it has, the bitcoin community has gone through fierce governance disputes such as the infamous scaling debates of 2017, which centered on a potential increase to bitcoins block size. The philosophical rift ultimately resulted in the creation of bitcoin cash in August 2017.

Still, a prospective hard fork that would change bitcoins 21-million-coin supply cap is conceivable, if perhaps heretical.

Its not a given that bitcoin has to stay at that 21 million hard limit, said EYs Brody (who, it should be noted, is building enterprise applications on top of rival chain ethereum). There is a governance mechanism to permit changes in bitcoin if the community agrees that would be good.

Even so, bitcoin advocate and author Andreas Antonopoulos stressed that governance drama surrounding bitcoins supply cap is nothing to lose sleep over especially since bitcoins transition to a purely transaction-fee rewards model will take 120 years.

Antonopoulos added that from the very launch of bitcoin in 2009, mining was always a marginally profitable endeavor never intended to stay constant.

[Mining rewards] dynamically adjust based on the network. Its a very complex economic environment. Its not as simple as people think, said Antonopoulos, adding:

There are half a dozen variables that determine miner profitability [right now] including the cost of electricity, their access to bandwidth transaction, the block subsidy, the transaction fees at the time, bitcoin price, their local currency exchange rate, the type of equipment and how efficient it is at converting electricity into mining.

As such, Antonopoulos says the concerns surrounding a transition from a block subsidy to purely transaction-based block rewards are grossly overblown.

Nothing magical happens when block subsidy drops to zero, said Antonopoulos. Its a very gradual and predictable change that happens over a period of 120 years. Its already happening and every day [miners] make their decisions.

While the 18th million bitcoin may not be the best reminder of the ongoing reality of a limited supply cap, the next upcoming milestone on bitcoins horizon assuredly will.

Viewing the next bitcoin halving as a far more notable event in bitcoins history, venture capitalist William Mougayar said:

In my opinion, [the 18 million] milestone is not that significant in relation to the next halving which occurs May 2020. On that date, the block [subsidy] will go from 12.5 BTC to 6.25 BTC.

Andreas Antonopoulos image via Christine Kim for CoinDesk

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With 18 Million Bitcoins Mined, How Hard Is That 21 Million Limit? - CoinDesk

2 Bitcoin Developers Explain How The Cryptocurrency Could Still Fail – Forbes

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In a few months, it will have been eleven years since the Bitcoin network was launched by Satoshi Nakamoto. The fact that the digital cash system has simply existed for this long is a grand achievement, but this is still an experimental project that could fail.

Bitcoin price predictions of anywhere from $42,000 by the end of 2019 to $100,000 by the end of 2021 have been made this year, but as Blockstream mathematician Andrew Poelstra has explained in the past, the developers behind the cryptocurrency are worried about just making sure the system doesn't completely fall apart more than anything else.

51% attacks are often brought up when it comes to ways in which Bitcoin could eventually fail, although improvements related to mining decentralization are in the works. Impending government crackdowns on Bitcoin are often talked about by skeptics of the digital cash system, but some U.S. lawmakers seem convinced they wouldn't be able to implement a Bitcoin ban.

So, what are the real threats to Bitcoin? MIT's Cory Fields and former Blockstream CTO Greg Maxwellboth of whom have contributed heavily to Bitcoin's development over the yearsrecently shared their thoughts on the matter in separate forums.

The Social Attack

Maxwell, who can often be found correcting people who are wrong about Bitcoin-related things on various subreddits, recently shared his view on one of the most pressing issues facing Bitcoin today in response to another Reddit user's question about 51% attacks. After explaining why Bitcoin's voting process for ordering transactions is necessary in the first place, Maxwell shared his view that 51% attacks may get more attention than they deserve.

"I think people obsess far too much about '51%' it has some kind of attractive mystery to it that distracts people," wrote Maxwell. "If you're worried that someone might reorder history using a high hash-power collusion just wait longer before you consider your transactions final."

According to the Blockstream co-founder, a social attack vector where the rules of the Bitcoin network are changed in favor of a more centralized model is a much bigger risk to the system.

"A far bigger risk to Bitcoin is that the public using it won't understand, won't care, and won't protect the decentralization properties that make it valuable over centralized alternatives in the first place," wrote Maxwell. "[A] risk we can see playing out constantly in the billion dollar market caps of totally centralized systems. The ability demonstrated by system[s] with fake decentralization to arbitrarily change the rules out from under users is far more concerning than the risk that an expensive attack could allow some theft in the case of over-eagerly finalized transactions."

It should be noted that Maxwell's concerns are not theoretical. In the past, proponents of two Bitcoin forks, Bitcoin Cash and Bitcoin SV, have declared their altcoins to be the true version of Bitcoin. That said, neither of those networks gained much traction in terms of being considered the "real Bitcoin" by cryptocurrency users.

Of course, this sort of attack could also pop up in the form of an altcoin that starts from scratch with a much more centralized model and overtakes Bitcoin's network effects to become the world's preferred form of digital money. For example, the innovations enabled by Bitcoin, such as its uncontrolled monetary policy and censorship-resistant transactions, would likely become useless if everyone decided to move over to Facebook's Libra cryptocurrency, which is likely to be much more easily controlled and regulated by governments.

Introducing a New Bug

Like Maxwell, Fields does not view a 51% attack as the most likely way in which the Bitcoin experiment could fail.

"My answer though is that the most likely sudden death scenario for a cryptocurrency like Bitcoin is an accidental bug that gets introduced internal to the system," said Fields during a recent talk at the 2019 MIT Media Lab Cryptoeconomic Systems Summit.

Fields's concerns are also not theoretical, seeing as critical bugs have been found in these sorts of systems in the past.

"There was a Bitcoin Cash bug that I found and disclosed and it kicked off a discussion about responsible disclosure in these systems and how to do it generally," said Fields during his talk. "I was a little smug for a few months until we were effected by a similar bug in Bitcoin Core which potentially would allow for money printing out of thin air."

At the end of his talk, Fields reached out to other Bitcoin developers to work with him on a ten-year plan for making it less likely that these sorts of bugs will find themselves in consensus-critical Bitcoin software again in the future.

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2 Bitcoin Developers Explain How The Cryptocurrency Could Still Fail - Forbes

Cryptocurrency: What to know about digital money – Fox Business

ThinkMarkets chief analyst Naeem Aslam on his outlook for Bitcoin.

Investors around the world have taken notice of Bitcoins rapid rise in price as well as some dramatic falls since it launched just a decade ago.

Buying and selling cryptocurrencies can feel like doing commerce in a sort of digital wild west. There are fortunes to be made, but also scammers and thieves ready to take advantage of the unprepared.

But as the world enters its second decade with crypto, traditional financial services and mainstream businesses have been examining how they can get in on it, and regulators have also taken note. As the market continues to evolve, here are five things to know about cryptocurrency:

Cryptocurrencies rely on a technology called blockchain, which is an open database of every transaction that verifies the security of transactions.

For Bitcoin, each block contains numerous transactions, and they are added to the blockchain by computers doing complex mathematical equations, a process called mining. The miners are then provided Bitcoin as transaction fees for the service.

The amount of Bitcoin rewarded to miners decreases by half for every 210,000 blocks confirmed, and theres a maximum amount of potential Bitcoin: 21 million. The ability to create Bitcoin will stop in the year 2140, when the supply reaches that limit.

A collection of Bitcoin (virtual currency) tokens are displayed in this picture illustration taken December 8, 2017. REUTERS/Benoit Tessier/Illustration (Reuters)

Other cryptocurrencies are tied to other systems. Some are even connected to physical assets like gold. Popular cryptocurrencies besides Bitcoin include Ethereum, Litecoin, Bitcoin Cash and XRP.

People store their cryptocurrencies in a wallet, an app that contains the mathematical signature proving ownership of the currency.

Cryptocurrencies can be bought and sold on exchanges. Popular ones include Coinbase, Binance and Gemini. Intercontinental Exchange Inc., the owner of the New York Stock Exchange, has announced plans to launch a crypto exchange called Bakkt.

The first - and to date - most popular cryptocurrency, Bitcoin, went live on Jan. 3, 2009. It was created by someone named Satoshi Nakamoto, who may actually be several people using a pseudonym. The first 50 Bitcoin were mined that day.

Bitcoinmarket.com, the first Bitcoin exchange, opened in March of 2010. Others soon followed.

On May 22, 2010, a man paid 10,000 Bitcoin to someone who ordered two pizzas for him from Papa Johns. As the market value of Bitcoin later skyrocketed, that Bitcoin would be worth millions of dollars.

Namecoin, the first alternative cryptocurrency called an altcoin was launched on April 18, 2011.

A customer feeds cash currency in to a Bitcoin ATM located in Flat 128, a boutique in New York's West Village, U.S. on August 22, 2014. REUTERS/Brendan McDermid/File Photo

Bitcoins market price hit $10,000 per coin for the first time on Nov. 28, 2017. It peaked less than a month later at its all-time high price of $19,783.21.

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In June of 2019, Facebook announced that it planned to launch a cryptocurrency called Libra.

The price of cryptocurrencies can fluctuate widely. Bitcoins price has previously dropped about $1,000 in a single day.

Bitcoin remains the most valuable cryptocurrency and has the highest market capitalization calculated by the number of currently available currency and the price. Other cryptocurrencies range in price from a few hundred dollars per coin to a fraction of a cent.

Exchanges like Coinbase keep track of the prices of various cryptocurrencies and provide a platform for trading them.

Cryptocurrency market statistics. Photograph of computer screen. (iStock)

The short answer is, Yes. But illegal activity can still be tied to crypto.

The IRS has treated cryptocurrencies as property for tax purposes since 2014. The U.S. Commodity Futures Trading Commission defines virtual currencies as commodities. The Securities and Exchange Commission says offers and sales of digital assets were subject to federal law.

In April of 2019, the SEC issued its framework on digital currencies that fall under the category of a security.

The SEC has recently announced several cases of litigation related to cryptocurrencies:

Cryptocurrencies are a rapidly evolving field.

One exchange, Mt. Gox, was shuttered after it lost hundreds of thousands of Bitcoin and went bankrupt. In May, the exchange Binance said hackers stole thousands of Bitcoin worth millions of dollars.

Some lawmakers are eager to add additional regulations, just as more traditional businesses like Facebook with its Libra are looking to get into the market.

Facebook CEO Mark Zuckerberg's face is visible on a mock "Zuck Buck" depicted on a screen as David Marcus, CEO of Facebook's Calibra digital wallet service, foreground, is questioned by Rep. Brad Sherman, D-Calif., during a House Financial Services C (AP)

Federal Reserve Chairman Jerome Powell said in early September that Libra will need to be held to a high standard.

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Libra would have to be held to the highest regulatory standards and supervisory expectations, he said.

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Bitcoin History Part 18: The First Bitcoin Wallet – Bitcoin News

Bitcoin users today are blessed with a panoply of feature-rich software and hardware wallets. When Bitcoin launched, however, there were no wallets. It took Satoshi Nakamoto to engineer the first desktop client, and his creation proved surprisingly resilient, serving the community faithfully for years.

Also read: Bitcoin History Part 17: That Time Mt. Gox Destroyed 2,609 BTC

The first bitcoin wallet was a full client, which meant you had to download the entire blockchain history for it to synch. This wasnt an issue to begin with, since there was precious little history to record, although the synchronization period swiftly expanded. Reviewing the wallet in 2012, Vitalik Buterin wrote: Because it is a full node, the client must download the entire (currently 6 gigabyte) blockchain to operate, which can take up to a few days the first time you start the client and several minutes to an hour every time you start the client afterward if you do not keep it running constantly. Today, the BTC blockchain is approaching 250 GB.

Satoshi began working on the first bitcoin wallet concurrently with his development of the Bitcoin protocol, and the Bitcoin-Qt wallet, as it was known, was released in February 2009. The private keys for the Qt wallet were stored in a file on the users desktop titled wallet.dat, prompting anguished stories over the years of individuals accidentally deleting this folder or having it accessed by malware searching for it specifically, resulting in the loss of tens of thousands of BTC. There was nothing inherently insecure about Satoshis wallet, though. In fact, given that it came with the option to create a fully encrypted backup, Qt was a highly secure wallet when optimally configured.

Bitcoiners who entered the space pre-2014 will fondly recall the experience of downloading the Qt wallet and watching in wonderment as their first coins arrived, as if by magic, into its receiving address. More often than not, those coins were then sent swiftly on to their final destination Silk Road.

The first build of the Bitcoin-Qt wallet, 0.1, was believed to have been lost to time until Hal Finney, by then virtually incapacitated with Lou Gehrigs disease, found the source code in 2012. Bitcoiners curious to see what the first BTC wallet looked like can download and run the Bitcoin-Qt client 0.1 on PC. Satoshis readme.txt file that accompanies the software explains:

To support the network by running a node, select: Options->Generate Coins and keep the program open or minimized. It runs at idle priority when no other programs are using the CPU. Your computer will be solving a very difficult computational problem that is used to lock in blocks of transactions. The time to generate a block varies each time, but may take days or months, depending on the speed of your computer and the competition on the network.

Ever the master of cutting through complexity, Satoshi finishes: Its not a computation that has to start over from the beginning if you stop and restart it. A solution might be found at any given moment its running. As a reward for supporting the network, you receive coins when you successfully generate a block.

While functionality was limited, the Qt wallet did have a few advanced features to it. In addition to sending and receiving coins and incorporating an address book, it enabled the user to digitally sign a transaction, proving that they were the owner of a particular public key.

Starting from version 0.9.0, the Bitcoin-Qt wallet became known as the Bitcoin Core wallet, following a proposal by Gavin Andresen, who opined that bitcoin core sounds strong and rock-like, which is what you want for something that forms the backbone of the network. Peter Todd demurred, responding that Bitcoin Core has the serious problem that it implies you need it, but the motion passed, and Qt became Core. History, however, would prove Todd to be right.

Despite bitcoiners today having access to an array of user-friendly SPV wallets, the Bitcoin Core wallet is still going strong. As Bitcoin.org, where it can be downloaded, acknowledges, It offers high levels of security, privacy, and stability. However, it has fewer features and it takes a lot of space and memory. Its survival is a credit to its creator, and to the Bitcoin developers who have devoted countless hours to improving it over the past 10 years and counting.

Bitcoin History is a multipart series from news.Bitcoin.com charting pivotal moments in the evolution of the worlds first cryptocurrency. Read part 17 here.

Images courtesy of Shutterstock.

Did you know you can verify any unconfirmed Bitcoin transaction with our Bitcoin Block Explorer tool? Simply complete a Bitcoin address search to view it on the blockchain. Plus, visit our Bitcoin Charts to see whats happening in the industry.

Kai's been manipulating words for a living since 2009 and bought his first bitcoin at $12. It's long gone. He's previously written whitepapers for blockchain startups and is especially interested in P2P exchanges and DNMs.

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Bitcoin History Part 18: The First Bitcoin Wallet - Bitcoin News

Bitfinex and Tether Face Class Action Filed by Lawyers Who Sued Craig Wright – CryptoGlobe

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Lawyers who successfully sued Craig Wright for billions of dollars in bitcoin are going after crypto exchange Bitfinex and its affiliated dollar-backed stablecoin Tether - both already facing existing legal claims.

Kyle Roche and Velvel Freedman filed a class-action lawsuit in the Southern District of New York alleging more than $1.4 trillion in damages suffered by plaintiffs David Leibowitz, Jason Leibowitz, Benjamin Leibowitz, Aaron Leibowitz, Pinchas Coldshtein and "all other similar situated".

The lawsuit claims that iFinex - parent company of Bitfinex - BFXNA Inc, BFXWW Inc, Tether Holdings Ltd, Tether Operations Ltd, Tether Ltd, Tether International Ltd and a number of related individuals used cryptocurrency to "defraud investors, manipulate markets, and conceal illicit proceeds". The claim continued:

Part-fraud, part-pump-and-dump, and part-money laundering, the scheme was primarily accomplished through two enterprises Bitfinex and Tether that commingled their corporate identities and customer funds while concealing their extensive cooperation in a way that enabled them to manipulate the cryptocurrency market with unprecedented effectiveness.

Tether appeared to anticipate news of further lawsuits against it. Just two days earlier in a blog post dated October 5, Tether - citing an unpublished research paper accusing it of market manipulation and fraud - said it expected "mercenary lawyers" to exploit the "deeply flawed paper" as evidence in the ongoing lawsuit.

Indeed, it appears that Roche and Freedman have used this paper as the background for the lawsuit, as point 13 of their filing to the New York District Court refers to Tether's October 5 statement. It read:

Fully aware of the incredible harm theyve inflicted on the cryptocurrency market, on October 5, 2019, Bitfinex and Tether published statements where they generally described the allegations contained herein, admitted that they 'fully expect' to be sued, and stated that they 'would not be surprised if just such a lawsuit will be filed imminently'.

The filing concluded that calculating the damages at this stage would be premature, but added:

There is little doubt that the scale of harm wrought by the Defendants is unprecedented. Their liability to the putative class likely surpasses $1.4 trillion US dollars.

Roche and Freedman were the principal lawyers acting on behalf of the Kleiman estate versus Craig Wright, the bitcoin investor and self-proclaimed to be bitcoin inventor Satoshi Nakamoto, winning a claim that is likely to be worth several billion dollars.

It was revealed in the summer that the ongoing legal battle both Tether and Bitfinex face against the New York Attorney General over claims Tether's dollar reserves were used by Bitfinex to plug a funding gap, has already cost the firms more than half a million dollars.

Featured Image Credit: Photo viaPixabay.com

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Bitfinex and Tether Face Class Action Filed by Lawyers Who Sued Craig Wright - CryptoGlobe

How Bitcoin Miners Fueled the Bear Market Trend of 2018 – BTCNN

When the financial industry was left astounded by the downward spiral of Bitcoin in 2018, questions as to the cause largely went unanswered even though some analysts had one or two things to say about it. Nevertheless, there is no need to search further as recent data has revealed who to hold responsible for the markets continued degradation, and that is Bitcoin Miners.

Token Analyst uploaded a new study that showed the role miners played in the fall of Bitcoin. The analysis, which was shared on social platforms on October 11, stated that the moment miners began to sell coins directly, things began to go wrong for Bitcoin.

It is not a coincidence that the moment BTC/USD crashed to$3,100 was the same time miners were orchestrating a massive sell-off. June andAugust recorded a massive transfer of coins to exchanges, which depreciatedeven further what was left of the Bitcoin price.

Token Analyst stated: We see miners taking advantage ofvolatility by sitting on their mined stash and then selling around large priceswings.

Already there are assumptions that point to miners as havinga hand at the collapsed Bitcoin price of 2018, and now, the data released by TokenAnalyst has confirmed them.

The unusual event is not also lost to the popular industrycommentators who have been following the issue for a long time now. One ofthem, PlanB, has shown via his stock-to-flow Bitcoin price model that theinfluence of miners over Bitcoin price should not be taken lightly.

Another group of commentators, which include Cole Garner,Filb Filb, and others, believe that miners encourage minimum BTC prices.

Garner, who is in support of the concept, has backed up hisbelief by repeating what Satoshi Nakamoto, the creator of Bitcoin, said back in2010, which is that production cost plays a vital role in the price of acommodity. He further added that:

If the price is below cost, then production slows down. If the price is above cost, profit can be made by generating and selling more.

Therefore, these statements may be geared towards preparingthe minds of the crypto community members for a new Bitcoin price floorprojected to be around $6,400, because it is improbable that miners will sellbelow the price.

The next block size halving expected to happen in May 2020will determine a lot of things for Bitcoin enthusiasts, just like it did in2016. With block reward dropping to 6.25 BTC per block, everyone should buckleup for new price highs.

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How Bitcoin Miners Fueled the Bear Market Trend of 2018 - BTCNN

Latest Bitcoin price and analysis (BTC to USD) – Coin Rivet

Bitcoin is desperately clinging on to the $7,800 level of support following a bearish daily and weekly candle close.

It now needs to break above $8,000 with a degree of conviction if it wants to have a chance of regaining price above $8,500.

The likely targets to the downside remain at $7,400, $6,750, and $5,900, all of which were levels of support during the 2018 bear market.

Current live Bitcoin pricing information and interactive charts are available on our site 24 hours a day. The ticker bar at the bottom of every page on our site has the latest Bitcoin price. Pricing is also available in a range of different currency equivalents:

US Dollar BTCtoUSD

British Pound Sterling BTCtoGBP

Japanese Yen BTCtoJPY

Euro BTCtoEUR

Australian Dollar BTCtoAUD

Russian Rouble BTCtoRUB

In August 2008, the domain name bitcoin.orgwas registered. On 31st October 2008, a paper was published called Bitcoin: A Peer-to-Peer Electronic Cash System. This was authored by Satoshi Nakamoto, the inventor of Bitcoin. To date, no one knows who this person, or people, are.

The paper outlined a method of using a P2P network for electronic transactions without relying on trust. On 3rd January 2009, the Bitcoin network came into existence. Nakamoto mined block number 0 (or the genesis block), which had a reward of 50 Bitcoins.

If you want to find out more information about Bitcoin orcryptocurrenciesin general, then use the search box at the top of this page.Heres an article to get you started.

As with any investment, it pays to do some homework before you part with your money. The prices of cryptocurrencies are volatile and go up and down quickly. This page is not recommending a particular currency or whether you should invest or not.

Disclaimer: The views and opinions expressed by the author should not be considered as financial advice.

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Latest Bitcoin price and analysis (BTC to USD) - Coin Rivet

Bitcoin Association and Cambridge Partner Over Bitcoin SV – Live Bitcoin News

The Bitcoin Association has joined hands with the Cambridge University Meta Net Society to sponsor a new study program that will allow students to learn about bitcoin SV (BSV).

Bitcoin SV has been something of a controversial coin since it first emerged roughly one year ago. First off, its a product invented by Australian bitcoin developer Craig Wright, who seems to have mustered up just as many enemies as he has fans. In addition, bitcoin SV is the child of bitcoin cash and resulted from the bitcoin cash hard fork that occurred around November of 2018.

Sadly, this hard fork has garnered a rather harsh reputation in the previous months, as many blame it for the sudden bitcoin crash that ultimately occurred a few weeks after it came to be. Bitcoin had spent much of the summer of 2018 trading at the $6,000 range, but the hard fork ultimately led to a massive drop in its price, and by the time Thanksgiving rolled around, bitcoin was trading in the mid-$3,000 range. It took approximately five months for the currency to show any signs of recovery.

Still, bitcoin SV appears to have garnered a few followers along the way, and the Bitcoin Association seems to be one of them. The group is planning to host events, meetups and conferences regarding bitcoin SV to help students better understand the properties of cryptocurrency and prepare them for careers in both crypto and blockchain.

Robin Kohze president of the Cambridge Meta Net Society explains:

Cambridge is traditionally a place to bring the bright and creative together to explore daring ideas and challenge the status quo. We thank the Bitcoin Association for its financial support, enabling us to host 22 events this academic year to teach and support a new generation of bitcoin developers that focus on real world utility applications.

The organization has already announced the first two speakers for the year: bitcoin SV creator Craig Wright himself, and Jimmy Nguyen, the president of the Bitcoin Association. Both will be featured at an event taking place on October 17.

Nguyen comments:

As bitcoins true power is finally being unlocked in bitcoin SV, we are thrilled to support bright, daring minds at Cambridge University and help them learn how to build the meta net. Their work will contribute to a future internet that truly rewards users for their data, creates monetary value in user online activity, and incentivizes higher quality content all only possible on BSV.

The Bitcoin Association supports bitcoin SV as the primary currency of the industry, stating it is exactly how Satoshi Nakamoto originally envisioned bitcoin to work. It says that the BSV blockchain is the only one in existence that appropriately scales and has robust utility.

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Bitcoin Association and Cambridge Partner Over Bitcoin SV - Live Bitcoin News

Analyzing the Bitcoin Phenomenon – ChartAttack

The popularity of Bitcoin has been increasing rapidly. It seems that the amount of people who become supporters of this cryptocurrency, or invest in it, is becoming bigger on a daily basis. However, the number of skeptical people has been increasing accordingly. Even though the story about Bitcoin provides many interesting and brilliant ideas, there are some things (like its mysterious creator, criticism regarding the unstable price, or the negative campaign in the media) which lead people to believe that the whole thing simply isnt worth considering.

The following article will try to analyze this phenomenon. Therefore, it will provide possible answers to questions such as:

The simple definition states that it is a digital and global money system currency. Furthermore, through this currency people use Internet in order to either receive or send money. The transaction can occur without the revealing of the true identity. The basis of the whole system is cryptography.

Created in 2009, it started to attract a great deal of attention, primarily because the inventor was unknown. All that was familiar about the creator of Bitcoin, was his/her name Satoshi Nakamoto. It was also speculated that this person doesnt even exist, and that the name is a pseudonym for a group of people. Therefore, who Satoshi Nakamoto really is, remains unknown to this day.

The opinions on this topic are divided. While some are passionately following the daily status of Bitcoin, others are completely rejecting it. Regardless of the strong affection or equally strong criticism, people seem to be highly engaged in the story. Why is it so?

Followed by a strong campaign, the new money system currency managed to shake the public opinion due to the modern and somewhat revolutionary ideas it proposed. Furthermore, the core of this system is related to the ideas which can potentially change the whole financial system we know today. As suggested on BitcoinTrader No banks, no fees, no inflation, the traditional banking system may not exist in the future.

It can be observed that people seem so engaged in this system due to the revolutionary and game-changing ideas it proposes.

The fact is that Bitcoin has reached a huge level of popularity, which led to it becoming a worldwide phenomenon. Since 2012, its presence in the media has been more and more prominent, and it doesnt seem to stop anytime soon. Not only is it popular among the consumers, but it is also used by companies. Therefore, it can be concluded that the Bitcoin phenomenon, other than its creator and original idea, has been influenced by numerous factors such as the consumers, media, excellent campaign, etc.

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Analyzing the Bitcoin Phenomenon - ChartAttack

Latest cryptocurrency news and prices, 09 October 2019 – The South African

Bitcoins price continues to hold onto to the $8,000 support area, while the top 20 cryptocurrencies experienced another day of mixed signals. Here are your latest cryptocurrency news and prices.

Close to 7% of the entire circulating supply of Bitcoin (BTC) is held in the wallets of eight major cryptocurrency exchanges as per data from The Token Analyst, a popular crypto-Twitter commentator.

Read more here.

(Trading at $8,245.32 at 14:00 09 October 2019)

For ethereums critics in the bitcoin community, last month brought a gotcha moment.

Joseph Lubin, co-founder of the second-largest cryptocurrency by market cap, acknowledged onstage at Ethereal Tel Aviv that the network, in its original form, wasnt built for mass adoption. We knew it wasnt going to be scalable for sure, the ConsenSys CEO said.

Predictable cries of scam from ardent bitcoiners followed. But Lubins statement wasnt scandalous in the least to the ethereum fans at Devcon the communitys largest and most influential annual gathering where roughly 3,000 attendees gathered this week in Osaka, Japan.

Even those who knew the first version wasnt scalable dont see early marketing claims as misleading. They see iteration as an inherent process.

Read more at coindesk.com

(Trading at $182.72 at 14:00 09 October 2019)

Yesterday, there was a strong upward move in ripple price above the $0.2650 resistance against the US Dollar. XRP price even broke the $0.2720 and $0.2750 resistance levels. Moreover, there was a break above the $0.2800 level and the 100 hourly simple moving average. Finally, the price tested the $0.2850 resistance area, where the bears took a stand. A high was formed at $0.2855 and recently the price started a downside correction.

It broke the $0.2800 and $0.2750 support levels. However, the $0.2720 area acted as a decent support. A low was formed near $0.2710 and the price is currently consolidating. It traded above the 50% Fib retracement level of the recent decline from the $0.2855 high to $0.2710 low. However, it seems like the $0.2800 level is now acting as a solid barrier.

Read more at newsbtc.com

(Trading at $0.278890 at 14:00 09 October 2019)

Bitcoin Cash (BCH) proponents have recently been discussing the amount of value participants have been sending onchain. For quite some time now, statistics show the BCH chain has been moving more money than the ETH network in terms of USD value sent per day. With extremely low network fees, a good portion of people are choosing to move funds onchain with the Bitcoin Cash network.

Read more at news.bitcoin.com

(Trading at $233.90 at 14:00 09 October 2019)

A new complaint accuses the owners and companies behind the Tether cryptocurrency of market manipulation. The accusations claim that Tether is the main culprit for the largest bubble in financial history, with over $265 billion worth of cryptocurrencies disappearing from the market.

A handful of investors filed the complaint in the U.S District Court for the Southern District of New York. According to investors who made the accusations Tether, despite being a stablecoin, successfully manipulated Bitcoins price. Furthermore, Tether organization is also owning the Bitfinex crypto exchange, meaning that the companies behind the exchange can place Bitcoin buy orders with unbacked by fiat Tether tokens.

Tether is supposed to be fully fiat-backed, but Tether owners implied that they could use other forms of assets to support Tethers price. Unbacked buy orders can push trading volumes and pump up Bitcoins price.

Read more at cryptobrowser.com

(Trading at $1.01 at 14:00 09 October 2019)

Litecoin price recovered above the $55.00 and $56.50 resistance levels. However, LTC price struggled to gain momentum above $58.50 and remained well below the key $60.00 resistance area. The price is currently correcting lower and it may perhaps test the $55.00 support area.

Read more at newsbtc.com

(Trading at $57.94 at 14:00 09 October 2019)

EOS price climbed higher recently and tested the $3.250 resistance area, where sellers appeared. The price is currently correcting lower and is trading below the $3.200 level. If there are more downsides, the price could test the $3.050 support area in the near term.

Read more at newsbtc.com

(Trading at $3.22 at 14:00 09 October 2019)

Cryptocurrency exchange Binance has announced the launch of the eighth phase of its lending product on Oct. 7.

In this phase, Binance will start offering 14-day fixed-term lending products. The subscribers will be accepted on a first-come, first-served basis. The subscription period begins on Oct. 10 and ends on Nov. 10, while interest will be paid immediately after the term matures.

Read more at cointelegraph.com

(Trading at $16.98at 14:00 09 October 2019)

Bitcoin Association announces its title sponsorship of the Cambridge University Metanet Society for the 2019-2020 academic year to support study and development of Bitcoin SV. The Society will use the financial support to conduct events that educate and promote the powerful capabilities of the BSV protocol, blockchain, and cryptocurrency.

Bitcoin Association is the global industry organization for the business of Bitcoin. It supports Bitcoin Satoshi Vision (BSV) as the only cryptocurrency with a blockchain that significantly scales (now), has robust utility (now), and is committed to a set-in-stone protocol for developers to build enterprise-level applications (now). BSV is also the only project that adheres to the original design of Bitcoin creator Satoshi Nakamoto. In short, BSV is Bitcoin.

Read more at coingeek.com

(Trading at $84.78 at 14:00 09 October 2019)

Stellars Lumen slipped by 0.41% on Tuesday. Partially reversing 7.87% rally on Monday, Stellars Lumen ended the day at $0.062087.

Tracking the broader market, Stellars Lumen rallied to an early morning intraday high $0.064129.

Falling short of the first major resistance level at $0.06480, Stellars Lumen slid to a late intraday low $0.060934.

Stellars Lumen came within range of the first major support level at $0.0593 before finding support.

Read more at fxempire.com

(Trading at $0.062703 at 14:00 09 October 2019)

For your daily top cryptocurrency news and price updates, be sure to check in daily at 14:00.

Read more here:

Latest cryptocurrency news and prices, 09 October 2019 - The South African

Alipay Claps Back at Binance, Reaffirms Ban on Bitcoin & Other Cryptocurrencies – BlockPublisher

Alipay, the digital arm of the famous Chinese e-commerce giant Alibaba, is the latest to declare an outright ban on transactions related to Bitcoin (BTC) and other cryptocurrencies.

Based in China, Alipay is a third-party mobile and online payment platform and since its establishment back in 2004, it has managed to become one of the most popular financial services companies. The platforms success was granted considering it is a part of the Alibaba ecosystem, the multinational conglomerate company that has managed to capture the market well beyond the Chinese border.

On October 11th, in a series of tweets, Alipay announced its anti-crypto stance loud and clear. In the Twitter thread the financial services platform warned its users that the company keeps a close eye on over-the-counter transactions in order to detect any irregular behavior and to ensure compliance with relevant regulations

If any transactions are identified as being related to bitcoin or other virtual currencies, @Alipay immediately stops the relevant payment services

Cryptocurrencies have come a long way since Satoshi Nakamoto launched the first decentralized cryptocurrency, Bitcoin back in 2009. However, they havent been entirely accepted by several regulatory authorities and governments, China being one of them. The country declared war with the crypto ecosystem back in 2017 when it enforced a blanket ban on all initial coin offerings (ICOs), crypto trading and exchange operations as well.

READ ALSO:Bitcoin Ransomware Attackers Tasted their Own Medicine

Considering the facts that China is at odds with the crypto ecosystem and that Alipay is a Chinese platform, the question arises what fueled such reports in the first place that the platform had to publicly denounce cryptocurrencies.

Did it spring out of some FinTech gossip or a simple word on the street? Quite the contrary, it can be charted back to one of the most popular cryptocurrency exchange platforms of the industry, Binance.

The exchange platform, in a recent attempt to spread crypto adoption and to bring in more revenue from Chinese consumers, it supposedly added support for two new fiat on-ramps, through popular messenger service WeChat, and through payment platform Alipay.

According to reports on October 9th, the platform announced the launch of a P2P crypto trading service, with support for trading BTC, ETH and USDT against CNY (Chinese Yuan). Additionally, the new payment options will be accessible on the Binance mobile app. The rumors started the moment Binance CEO Changpeng Zhao (CZ) victoriously unveiled the news on Twitter.

READ ALSO:Alleged Hack in a Blockchain Voting App, Was Blockchain the Culprit?

However, it seems that Alipay was not onboard and strongly rebuked the exchange giant for attempting to implement it as a fiat on-ramp, in an all caps NO on twitter, a virtual slap on the face of the crypto spheres largest exchange platform.

READ ALSO:Zuckerberg Vs Congress 2.0 Testifying for Project Libra

Following the Twitter thread, Alipay also went on to share an official statement on its Weibo account. Crypto venture capitalist Dovey Wan took a snapshot of the platforms announcement and translating it in her tweet that read:

Alipays rather harsh response to Binance might be because of the pressure from the Chinese government. Reports claim that even local police is taking various actions against crypto and Bitcoin transactions, it is highly likely that the platform did not want be caught in the crossfire, which could hurt its business in the end.

Be that as it may, Alipay did publicly clap back at Binance, clearly leaving CZ slightly ruffled and he tweeted back an explanation claiming that the announcement got lost in translation, which blew way out of proportion. His clarification tweet read:

Some confusion by some news outlets.@Binanceis not working directly with WeChat or Alipay. However, users are able to use them in P2P transactions for payment.

It was a tough day for Binance, as soon after being torched by Alipay, WeChat joined in. The Chinese multi-purpose messaging, social media and mobile payment app, reaffirmed their stringent position on cryptocurrencies.

WeChat will never support cryptocurrencies trading, and has never integrated with any crypto merchant We welcome any whistle blower to report such behavior.

This whole debacle if anything, reaffirms Chinas stance on cryptocurrencies and their acceptance. A while ago the crypto community was expecting that the Peoples Bank of China will launch its own central bank digital currency (CBDC). But the bank put those expectations to bed denying that the country is ready to roll out the new financial asset, and it will not be ready for it any time soon by the looks of it.

READ ALSO:NBAs Sacramento Kings To Launch its Own Fan Token

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Alipay Claps Back at Binance, Reaffirms Ban on Bitcoin & Other Cryptocurrencies - BlockPublisher

AI, The Great Depression And Satoshi Nakamoto: Robert Shillers Narrative Economics Is A Cautionary Tale For Our Times – Forbes

Yale Universitys Nobel laureate professor of economics Robert Shiller has published a provocative new book advancing the idea that stories or narratives that spread like epidemics have a bigger impact on our economy than most in his professionwho are typically constrained by rigid quantitative techniquesconsider in their theories. He believes that the so-called dismal science should be taught with a bigger dose of the humanitiesnamely history and psychology. Many successful investors have long known that a good story can move markets, and in fact, many of the manias of recent years, like the housing bubble of the early 2000s and the bitcoin craze of 2017, as Shiller points out in his book, relied on narratives that had a significant impact on economic activity. Shiller, of course, is well known for a previous bestseller, Irrational Exuberance, which essentially predicted the dot-com and housing bubbles (in its first, then second edition) and for his Case-Shiller Home Price Indices.

Shillers new book, Narrative Economics: How Stories Go Viral & Drive Major Economic Events (Princeton University Press, 2019), is especially timely in the current social media-obsessed era, because narrativesboth real and falsecan spread globally with just a few swipes, affecting not just economic activity but ultimately the balance of geopolitical power.

Below is a transcript of a recent discussion with professor Shiller where we hit on topics ranging from bitcoin and the French and Indian War to artificial intelligence and Karl Marx.

Nobel laureate Robert Shiller of Yale

What made you write Narrative Economics?

When I was 19, I was taking both economics and other courses, I think a history course. The professor assigned a book about the 1920s published in 1931, about the beginning of the Great Depression. And I thought, theres something here Im not hearing in my econ courses. There is something about how people think, observations of how they think. And sometimes they have ideas that look a little silly, but maybe theyre not. They dont look respectable, but it might affect their thinking. And all my life, since then, Ive been a little bit disappointed. I like economics, and I like mathematical economics, but I felt a little disappointed. You never talk about what people are saying or thinking. In trying to analyze events like the Great Depression. It seems like youre missing something. And then, the next thing is to read about epidemiology. Theres a big medical literature, so ideas spread like epidemics.

It goes back in my lectures. I taught a course called Behavioral and Institutional Economics, a graduate course, for many years. And I got students from all over the university. It was more of a humanistic [approach]. I guess I was influenced by C.P. Snow. He wrote an essay, a short book, in the 1950s called Two Cultures. In that book he argued that academia is split between the scientists and the humanists, and they cant comprehend each other. And thats kind of what I was getting at; that historians are humanists. Although now there are some experts in cliometrics. Clio is the goddess of history, so they invented cliometrics, which is quantitative history. They look for numbers and do statistical analysis, which is fine, but I was looking at another aspect of history. That the world is viewed differently at different times in history and in different cultures. And I think you do better as an economist if you take that into account.

So you think that economics has leaned more towards the metrics, the science, the numbers?

Especially when I was in graduate school, in the second half of the 20th century, mathematical economics of a very pure type was very prestigious.

Was that Samuelson?

Yes, I had Samuelson as my teacher, and I liked him a lot, and he wasnt doctrinaire at all. There was a behavioral economics revolution, which started around 1990, that was bringing in psychology. So maybe my book is part of that revolution. On the other hand, it suggests a different research in general. The typical behavioral economist will do some experiments, hell put 20 students at computers and ask them to trade, and theyll manipulate something to reveal something about human nature and how people play games. That is really good, but its not exactly what I call narrative economics.

Im thinking that narrative economics will come into its own in the coming years because it can exploit digitized text. And its already becoming a fad, in a sense. A lot of it is aimed at marketing or stock picking, but I think it could be more thoroughly blended into economics. So I actually, with George Akerlof, had a series of seminars called Behavioral Macroeconomics. Youd think that psychology would matter for business cycles, but it hasnt taken off yet. But I think it will.

Has social media and the ubiquity of instant information had an impact on your decision to write the book now?

Yes, social media couldnt be more prominent. With our tweeting president, for example, and the immediate responses. It speeds things up. But Im arguing in my book that the epidemic quality of narratives goes back thousands of years. Its not new. It did move history even thousands of years ago. But one thing thats different now is that with social media, people find like-minded people to befriend more easily, so it involves more splinter groups that have more idiosyncratic views. Because you can choose to associate with people who share a fascination with something, it can cause radicalization. So I mean the obvious example right now is mass shootings.

How do you determine which narratives actually will have significant economic impact and which ones are just noise?

Im working on that. What Im doing now is studying history and looking at things that were often mentioned. And to get the actual causal link, so what caused the Great Depression? Im inspired to not give up because I dont think people know. Theres been so much written about the Great Depression, but what caused it? There are theories, but theyre no more convincing than my theories.

Do you suspect that the Great Depression might have had a narrative that may have contributed to the Great Depression?

Multiple narratives. See, the Great Depression was great because it was like a perfect storm, a number of narratives all encouraged people to cut back on their spending. So I talk about some of them in the book.

Was the Great Recession also narrative-driven?

I think so. In both the cases of the Great Depression and the Great Recession, the preceding decade had a bubble narrative that eventually collapsed. There were skeptics who werent heeded during the 1920s and the 1990s, up till 2007. But then they eventually got contagious enough. Its not possible to just be a skeptic when youre talking to true believers in the economic new era. They may just not be interested, you cant get their attention. You need a concrete narrative that is viable. Those things are inventions. So talk of the housing bubble in the case of the Great Recession began around 2005, a couple of years, and it took a while to take root, I should say, to become fully contagious.

The difficult thing, especially for policymakers or market players, is to determine when a narrative should be taken seriously or when to take action based on a narrative?

Right. Well, I think there was some intuitive feel for that. In the Great Depression it generated narratives about bank runs. People thought bank runs were cured by the Federal Reserve (established in 1913); the Federal Reserve wouldnt let it happen. But here it was happening in the 1930s again, so it brought back an older, 19th century narrative. And it was catastrophic in 1933 when the bank holiday had to be declared. And then they created deposit insurance, and that was supposed to cure these things. But then people noticed there was a maximum amount that was insured. If you had more than that you could still lose in a bank run. So thats the kind of thing you had with Britains Northern Rock in 2007 and then in other banks in the United States in 2008. It was the old narrative coming back. They tend to recur. You can forget about them for a while, but theyre in the background, and something happens and it looks plausible again. So we almost had a bank run, then the Fed had to take extreme measures, and to justify these measures they had to talk tough about a possible depression. And thats what happens when the narrative of the Great Depression was brought up again sharply in 2007. People didnt know all about the Great Depression, they just remembered people that were destitute, they were selling apples on the street corner, they made a bare sustenance living. They remember that ... Apples 5 Cents. They had a little sign that said Apples 5 Cents, help me Im unemployed I need help. That was a visual image. So that had a lot of contagion.

Its just like the visual image we have of people jumping out of buildings during the Great Depression. The thing is now we have false narratives and memes reinforcing them. Narratives can take hold, and it seems like our president is a master of narratives.

How do you create policy or deal with something like that?

The problem is that a narrative that has taken flight that the mainstream media is lying and deceitful and is controlled by the deep state, who tells them what to say. This narrative already has different forms, but it encourages skepticism at the same time that we have alternative news media that appeal to narrow groups.

In your book you discuss Keynes theories, where fiscal stimulus creates the multiplier effect of economic activity. Is Narrative Economics a revision of this theory, instead of say, fiscal stimulus, the stimulus is in the form of a widely accepted narrative or idea?

Yeah, I talk a little bit about this in my appendix in the book. The multiplier theory was part of Keynes General Theory. Economists liked it because it involved no psychology. Its just mechanical re-spending, multiple rounds of expenditure. It obviously has an element of truth to it. Many times. But its a feedback loop, thats the Keynes theory. If the government spends money, it creates income for some people who are using the services. And then they spend money and that becomes income for someone else, it multiplies up. But I think there are other kinds of multipliers, or feedbacks. An epidemic model is a kind of feedback model. Somebody gets sick with a rare illness and then conveys it to someone else, and then theres a second round of sickness that is then conveyed. So I use the term pro-epidemic, a term from epidemiologists. There are also disease epidemics that feed back into each other. So if you catch AIDS, that makes you vulnerable to tuberculosis. And so you start spreading tuberculosis, and now you have two epidemics interacting with each other. And I think thats kind of the way macro events are. So if the government creates some fiscal policy for a depression, they have to announce it and they have to say something. Unfortunately, what they say matters, Im arguing. If they say, we are panicking because it looks like a coming depression so were trying to stop it, that might actually offset the advantage of the new policy. People who are getting the round of expenditure wont spend it.

So its almost like the economics of spin. In what way do you foresee economic narratives as being a tool for the prediction of major market developments, including recessions? How reliable is the data, given that news often follows events.

I wrote a paper in the Brookings Paper in 1984 called Stock Prices and Social Dynamics. And in that paper, I was already talking about epidemics. I dont know if I used the word epidemic, but it was sort of in there. And I was confronting the idea that market efficiency shows that markets are not bubbly. That they are responding, that they are incorporating information. I had an idea that it could be, in fact, that markets are not responding to information about anything fundamental, they are reacting to information about people and their psychology. And it was still hard to predict the market in the short run. So that was an important element in my thinking.

Is there work being done on models to use your Narrative Economics to either help predict economic moves or as a policymaking tool possibly?

Well, there are a lot of people, its hard to summarize all of them. Theres a lot of statistical analysis of digitized text, and often these people are trying to predict the markets. I think thats great. I do that too.

Because hedge funds, for example, will now monitor Twitter and monitor narratives. Theyll trade off those narratives, and they have been for a long time. It just seems like now more than ever there is a lot of risk of certainly false narratives given these, as you say, echo chambers that are established.

I think that what Im trying to do in this book is describe whats happening in the future in economics. That there will be more of this, and I think it should be, and probably will be, not so focused on stock picking and marketing, because it infects all of economics. The economists like to use the paradigm actually first clarified by Samuelson. That well describe people as intertemporal utility maximisers, with a consistent utility function and never change their mind about it. Part of what happens is that they even change their case in response to narratives. So in the book I talk about the Great Depression, and I quote various people from back then. And I say that in the depression it just didnt feel right to consume a lot of luxury goods, even if you could afford them. So new car sales in the Great Depression fell catastrophically. Between 1929 and 1932, I think it was. In the book, there was an 86% drop in Ford car sales, new Fords. And I think the reason is, if you live in a neighborhood where next door there is someone who is out of a job and they are having trouble feeding the kids, you dont buy a shiny new car and park it in your driveway.

Its the conspicuous consumption dilemma?

Yes, so Therstein Velben wrote a book in 1899, called the Theory of the Leisure Class. By 1930, he had become radicalized. But the original book was influencing a lot of peoples thinking. People will view consumption as show-offy. But it kind of was not so prominent in the 1920s. You could show off. The Roaring 20s. Everyone was having fun, a great time. Not everyone though.

Our president has a history of showing off his wealth. So perhaps there will be a return to that?

He wrote about it. He and his coauthors wrote about it in various books. He advises its good business sense to show off. I found an essay in the ancient world, in Greece, by Lucian. A professor of public speaking. Second century. And he tells you to behave like Donald Trump, its amazing. He says, when you show up at a Forum to give a speech, always show up with a retinue. You dont just go in by yourself, and he said, you want to make it look like women are fawning over you. Keep that image going. So it worked in ancient Greece.

Do you think that these narratives could also be used as a policy tool going forward?

Yes, I think they already are. Fed Chairman Ben Bernanke, when there was a first bank run in the United States (during the financial crisis), was aware that the narrative would come back in the economic contagions. Narrative economics is not something that he espouses, but on the other hand he does take a look at history. He wrote a whole book on the Great Depression, and he does have some appreciation of the effect of narratives. Its kind of common sense that you dont want people to panic. And so if you are panicking, you want to be reassuring. So unfortunately youve also got to, in order to justify what youre doing, paint a picture of danger, dont worry. But you want to be reassuring about it.

How are policymakers influenced by economic narratives? Do you believe that they tend to follow them in order to appeal to voters?

Yes, thats a problem.

Theyre not just policymakers, theyre politicians.

They have to be. Another theme is that the famous names that we have, the celebrities, are products of epidemics. There is something contagious about what they do and what their story is. So, for example, a story has to be just right to be contagious. A Congressman in 1896 gave a speech in Congress, and there were reporters there, and William Jennings Bryan was in the audience, its known. And he made this dramatic statement in his speech about the gold standard and he said, Thou shalt not crucify us on a cross of gold, referring to the gold standard. Nobody paid any attention to that quote. But WJBalready known for his orationson his accepting his Democratic nomination for president at a Democratic Convention in 1896, at the very end of his speech he rose his arms like this in some sort of religious symbol: Thou shalt not crucify mankind on a cross of gold, and the audience, reporters and convention looked stunned and silent for a minute, and they broke into a round of cheers and they carried him off the stage like a hero. That was a contagious story. And people still remember that quote today. Its not just enough to say it; it has to be said by the right person at the right time and part of a story. He didnt win the election. It wouldve changed history if he did.

What narratives are going to shape the future? What big narratives will change economic activity?

This is the real question, how to predict that. One such narrative that strikes me as possibly important if we do have a recession is the technological unemployment narrative thatIm using the name for it that prevailed during the Great Depression. The idea is that machines are replacing jobs at such a pace that only a few lucky people will be able to have employment. There is a lot of talk now about artificial intelligence and about rising income inequality. But it hasnt really gotten people scared yet. Consumer spending is good. Theyre not afraid to buy a new car.

People are thinking about their own prowess in playing computer games or something. So it feels empowering. Im just saying I cant predict what the next big narrative, damaging narrative will be, but it could take a turn.

Princeton University Press

What about cryptocurrencies and bitcoin narratives?

Cryptocurrencies are a fascinating invention. They create a temporary, at least, equilibrium of created value out of nothing. The question is where is it going? I dont answer that question in the book. I think that computer scientists and certainly passwords, if you think about crypto-something, is unfortunately a very large part of our lives. I dont know if bitcoin will ever be used as a currency. But what I talk about in the book is the reason for the excitement about it, and why did it create so much value?

You would think the original paper by Satoshi Nakamoto would be a kind of nerdy, technical paper that didnt interest anyone. But people are fascinated by it. I think its because the story links into some deep fears, or emotions, and also because it has good story quality. The story quality is that nobody can find Satoshi Nakamoto. It becomes a mystery story. Why did he do it? Where is he? Is he one of the richest people in the world? And why doesnt he show himself? People like mystery stories. Its a genre.

Like religious narratives are often mysterious.

Right. That was emphasised by Pascal Boyer in his book Religion Explained. Dont read it if youre religious. He says that things that sound impossible actually propel religion because people like to tell controversial stories.

In your biography, you talk about your love for science from an early age. Does your theory of narrative economics have good science in it? Does it satisfy your need for scientific rigor?

It is a little bit on the humanistic side. Its arguing against pseudoscience. You know, people want to pretend that this is theoretical physics and theyre finding that its not. I dont want to use the term pseudoscience too aggressivelya lot of it is very good, I like it. Its just that we have to recognize it doesnt quite fit the information. I thought as a core premise of science that youre going for the truth. And you do have to make simplifications, and youll test models that dont fare out completely. Still there has to be some impulse towards accommodating facts into your models. And so there is still work to be done. And it seems that professions develop a professional esprit that diminishes other fields too much.

How has the academic community responded to Narrative Economics?

Well, I believe Im getting a positive response. It seems that people are interestedand even though I havent created a groundswell of new research yet. But I think people have already been doing research, and it legitimizes itself. Im encouraging them also to think less mechanically. Somehow, it seems to me like narratives in this stage in history still have to be a bit of human judgement. About whether it might be motivating people. So why did consumption crash after the 1929 stock market crash? Christina Romer has a famous paper about the 1929 crash that found that October 28-29, 1929, and she found that retail sales cut off almost immediately. And she said that cant be the multiplier effect because their income hadnt fallen yet. So it seems like there was a directI looked up why would it fall after Monday and Tuesday of that week or the next week or the next week. So I looked up church sermons, and they tend to be moralizing and interpreting it as the day of judgement or something. So [if] there was anyone who didnt listen to the radio, and didnt hear about the crash, would be warned about it from their church.

And then there was a widespread pullback in spending?

There was a widespread pullback right away. And I interpret that as also partly the building of a counter-narrative that was taking place already in 1929. So there was talk of high unemployment already before the 1929 crash, it was starting to come up. It was commonly attributed to technological unemployment.

When researching the book, what was most fascinating/interesting/surprising narrative you came across?

What fascinates me, what comes to mind, is I found a letter to the editor, it says, letter to the printer of a newspaper in 1765 by a manI think its a pseudonym Alexander Windmill, about all the talk that was going on in 1765, and that was a recession year. Its not in the NBER list of recessions because they dont start until 1854. This was almost 100 years earlier. And it took place, that the recession was caused as the aftermath of the French-Indian war, also called the Seven Years War. Which you may have never heard of. Anyway, there was a recession after the war. You heard this expression There is no money so many times, everyone must be saying this. And he described how a person was saying it. He said in the colonies, before the United States of America, he estimated that this phrase is repeated 50 million times a day. I was impressed by that, that he would come up with a number that big. Because I think there were only about 3 million people in the Colonies. So they would have to be saying it an awful lot. I think maybe he exaggerated. It was, in my mind, kind of vivid, that when you think of pre-revolution America, you think of the Pilgrims. But actually they didnt have social media for sure, but they could talk and ideas could spread. Maybe it was only 1 million times a day. And I dont know what they meant, but There is no money. Some monetarist theory.

Are the implications of narrative economics that the biggest and strongest of storytellers are most effective at spreading ideas will have the most impact on economic activity?

I dont want to be too pessimistic, you know, we do have modern society which does respect it. And Im thinking of the medical profession. How often do they do worthless stuff? Someone wrote a book, I cant remember who it was, explaining that the good stuff physicians do began to outnumber the bad stuff around the middle of the 19th century. Before that, youd be better off not going to the doctor. They would not use sterile equipment. But now its pretty clear that medical physicians expanded life spans, and you trust them when they say you need an operation. You just do it. And thats a sign that there is an element of truth that is recognized, even if they cant explain to you why you need this operation. Its subtle. But on the other hand, there is, especially when you move away from the professions and you get to things people dont know much about, they certainly are vulnerable to fake news.

So youre saying that eventually the narratives become more truthful? And that the risk of negative consequences is less or the way of verifying will get better?

Well, I dont have any optimistic tone that things will get better. Im a little worried at this time of the proliferation of social media that we may be going in a bad direction.

Is that part of the reason you chose to write the book?

Why did I write the book? It came out of a book I wrote with George Akerlof called Phishing for Phools. It also came out of another book I wrote in 2000 called Irrational Exuberance. Its broader. I call it an adventure in consilience. Theres a chapter on that. Consilience is the unity of knowledge. Im thinking that the perceptions of the economy take into account information from a number of fields.

Irrational Exuberance was prescient in terms of predicting two bubbles. What bubbles do you see now, that narrative economics might affect?

Well, the bond market has been especially salient these past few days. The yields have gotten very low. And so that could burst. Theyve [interest rates] been going down since 1981, but there is a zero lower bound, maybe go a little bit below zero.

Cryptocurrencies might be another bubble, I suggest that. Maybe theyll find Satoshi Nakamoto, and he wont be an impressive guy at all. Or maybe he will be, I dont know.

Given your research, what are the most important factors shaping narratives that drive change or markets?

Well, this is a question for the people in the literature department. But what comes to my mind is a visual image, like in the case of the Laffer curve, of a man writing in on a napkin. I dont know why its so powerful an image. Or the visual image of George Washington chopping down a cherry tree. Why is that such a famous narrative. Ill never understand, except it has a visual of a little boy chopping down a tree. And other things are celebrity attachment. You can take an old narrative and attach a celebrity to it, and it becomes more viral. I mentioned the example of Williams Jennings Bryan. But there are other examples in the book. Well, Karl Marx is often quoted as saying, For each according to his abilities, to each according to his needs, but in fact he was quoting Louis Blanc, a philosopher already famous for that quote. But Blanc got shoved aside as he wasnt famous enough. Also, Louis Blanc was not an impressive looking man, he looked like a little man.

Karl Marx was [more impressive looking.] According to historians, Karl Marx received a gift of a bust of Zeus. So Karl Marx was a little bit famous. He had a beard. A friend of his said, You know, you look like Zeus, the Greek god, the king of the gods, and he gave him the bust of Zeus and said, look at that, isnt that you? And the story is that Marx was thinking, I do look like the king of the gods. Hes a big, tough man. And he grew his beard out even bigger. So it was really an obnoxious beard. And that visual image still lives today.

Originally posted here:

AI, The Great Depression And Satoshi Nakamoto: Robert Shillers Narrative Economics Is A Cautionary Tale For Our Times - Forbes

John McAfee on Libra, Satoshi Nakamoto, and the Binance Ban [BeInCrypto Interview] – BeInCrypto

If you were wondering whether or not John McAfee is still going to eat his you-know-what following a sub-$1 million Bitcoin in 2020 well, he is.

BeInCryptos Partnerships Manager, Max, sat down with McAfee live from his top-secret communications bunker to talk about some of the most frequently-discussed topics in the cryptocurrency and blockchain space for our new [IN]sider series.

Aside from expressing his thoughts on what freedom means and updating us on the development of his official McAfee Freedom Coin, the enigmatic businessman is confident in Satoshi Nakamotos true identity, skeptical about the launch of Libra, and vocal about Binance CEO Changpeng Zhaos decision to ban customers in the United States from using Binance.

All this and more much more in our exclusive interview!

Let us know what you think of our exclusive interview with John McAfee in the comments below!

Originally posted here:

John McAfee on Libra, Satoshi Nakamoto, and the Binance Ban [BeInCrypto Interview] - BeInCrypto

Block.ones SEC settlement over EOS ICO is shockingly weak say critics – Decrypt

The SECs meager $24 million settlement with Block.one over its $4 billion ICO has shocked the crypto industry. An agreement that sees one of the biggest ICOs ever end up paying less than 1 percent of the token sale as a fine, an amount smaller than it paid for a single web domain.

This is the same SEC that drove ParagonCoin into the ground with millions of dollars in legal fees over its ICO and is currently warring against messaging app giant Kik for its ICO of the Kin cryptocurrency, a fight that has resulted in the Kik platform shutting down with 80 percent of its workforce set to be laid off. So, after being so determined that all ICOs are securities, and pushing so hard on countless other projects, it remains to be seen why the fine was simply so low.

It's entirely unclear how a $24 million settlement effectively penalises a $4 billion offering, blockchain critic David Gerard told Decrypt, adding, The order against EOS is very short, compared to every other SEC order on an ICOit's only seven pages, and without a section setting out the SEC's legal reasoning. These are curious omissions.

Even Nic Carter, a Bitcoin bull and partner at Castle Island Ventures, thought the SEC should have gone further. He said the settlement was, Shockingly weak. Im surprised the SEC went for the easy win on this one. So much so that I wonder if theres not another agency waiting in the wings that the SEC handed the baton to on this casebe it [the Department of Justice] or [the Financial Crimes Enforcement Network].

If this is the totality of it then Im a little disappointedthe SEC has insisted that a standard exists and has failed to follow through on their warnings. It makes them look weak and opens up lots of moral hazard, he said.

Ever the contrarian, ShapeShift CEO Erik Voorheesand long-time libertarianargued just the opposite. He tweeted, Really sad to see so many in the crypto world upset that Block.one wasn't fined even more by the SEC. They had $24 million taken from them. Some of y'all are more like Elizabeth Warren than Satoshi Nakamoto.

Crypto advocacy group Coin Center, on the other hand, took the middle ground, praising the SEC for its decision not to deem EOS a security in its action against Block.one: While some may be vexed by the size of the fines involved, the policy here is sound. We are very gratified that the SEC continues to take a reasonable approach to providing investor protection in this space, Coin Center Research Director Peter Van Valkenburgh wrote in a blog post today.

Its possible that the deal was a result of long drawn-out negotiations between Block.one and the SEC; Decrypt reported a year ago that negotiations with hundreds of ICO-funded startups were underway behind the scenes. But whats unclear is how Block.one managed to achieve such a small settlement. And more, does it provide carte blanche for a new wave of EOS-like ICOs?

The EOS token sale had one key difference from your typical ICO (apart from being one-year long). Block.one had a cunning maneuver to run the ICO with one set of tokens before swapping them all for another set of tokens. And, like a magicians trick, after it raised the money, nobody was left holding any of the original ERC-20 tokensthe ones tainted by the ICO.

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Instead, they now hold EOS tokens, which the SEC did not address and avoided making any judgement as to their potential status as securities. Could this bring the ICO back to life (again)?

Blockchain legal expert Stephen Palley doesnt think so. The only precedent that the EOS settlement sets is that you might get a better deal if you don't kick the SEC in the shins, start a settlement fund online and say sue me, he said, in reference to the Kik ICO.

He tweeted, If you think it's a sign that ICO's are green-lit in the US you're wrong.

Preston Byrne, a partner at Byrne & Storm, echoed Palleys sentiment, telling Decrypt that This is not a green light to other companies to begin printing tokens in the U.S. with abandon. Any entrepreneur considering doing so is more likely to share the fate of Paragon or Protostarr, or worse, than of EOS.

Entry into this settlement will make it difficult for EOS to argue that what it did in 2017 wasn't an offer and sale of securities in subsequent litigation, said Byrne.

But given that ICOs brought in $22 billion in their existence, and that the second wave of ICOs (the IEO) raised $1.6 billion, you can see why some people are hoping for a new chance at a fast track to millionaire status.

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Block.ones SEC settlement over EOS ICO is shockingly weak say critics - Decrypt

Bitcoin has a massive carbon footprint. This clever new cryptocurrency doesnt – Digital Trends

Bitcoin is undoubtedly exciting, but, as much as it might promise to solve some of the problems associated with global finance, its also responsible for creating problems of its own. The most concerning of these is the environmental impact of mining cryptocurrency due to the huge amounts of electricity it requires. This, in turn, results in tens of millions of metric tons worth of carbon dioxide being pumped into the atmosphere.

Thats a big cause for concern, and its something that researchers at Switzerlands Ecole Polytechnique Fdrale de Lausanne have been working to come up with a solution for. In contrast to the large electricity consumption and carbon footprint of Bitcoin, they are developing a new approach to cryptocurrencies they hope could lead to a near zero-energy alternative.

We developed an algorithm that enables payment in a secure and efficient manner, Guerraoui Rachid, a professor in the School of Computer and Communication Sciences, told Digital Trends. Essentially, unlike Bitcoin and its alternatives, the algorithm we propose does not require reaching global agreement about the ordering of all transactions.

But how does it do this? The answer involves a fundamental rethink of the traditional Bitcoin model, first described more than a decade ago by mysterious Bitcoin pioneer Satoshi Nakamoto. That approach involves a consensus distributed system in which all players must agree on the validity of transactions, which involves the execution of complex and energy-intensive computing tasks.

The alternative approach, called the Byzantine Reliable Broadcast, works by assuming participants in the system are good actors and only ignoring them if they are seen to be abusing it. In doing so, the researchers behind the project think safe cryptocurrency transactions could be achieved with just a few grams of CO2 rather than an estimated 300 kg for a current single Bitcoin transaction. Thats more like sending or receiving an email.

The problem we are solving is called double payment, and it is the main problem posed by Nakamoto in his seminal paper defining Bitcoin, Rachid explained. We basically looked carefully at the problem and realized that you do not need a heavy consensus-based solution. If, hypothetically, Alice wants to send money to Bob, it is enough for Bob to ask around if Alice was not trying to cheat and give the same money to somebody else.

The work was selected as the best paper at the International Conference of Distributed Computing (DISC). Theres still a long way before this work ever gets turned into an actual cryptocurrency approach, however if, indeed, it ever does.

Im not sure whether Id do that, Rachid continued. I would rather open-source it and have people use the algorithm for exchanging goods in a frugal manner.

See the rest here:

Bitcoin has a massive carbon footprint. This clever new cryptocurrency doesnt - Digital Trends


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