McCaleb sold it to Karpeles in early 2011. That's 3 years before it collapsed. Karpeles would have been crazy not to migrate to new wallets when he transferred ownership. IIRC according to the WizSec report, the Mt Gox private keys were compromised in September 2011.

I'm not ruling out the possibility that McCaleb could have been involved in some way, just pointing out those facts...

Silvergate isn't the only player in this space, just the biggest. Metropolitan Bank has been banking with Coinbase and other cryptocurrency startups for years and they're actively pursuing partners in the space. I'm pretty sure there are others. There's too much opportunity for fledgling and niche banking institutions to ignore, and this is a time when cryptocurrency has much more mainstream legitimacy than years ago.

Speaking as a US resident, I think the banking squeeze for unregulated exchanges making international wires (like Bitfinex) will only get worse. For domestic users using MSB-licensed exchanges, you can hardly perceive any banking squeeze anymore. Bank transfers to/from Gemini or Coinbase are just like payroll transfers and bill payments -- fast with zero hassles.

Just like the cold weather advantage, it's really dependent on regional climate.

In the US, as prices for solar panel production keep falling, solar power will become increasingly relevant in the desert or California for the same reason renewable wind energy is such a staple there. There's just so much sun. The southwest isn't known for cheap energy prices but for businesses of scale it might make sense to set up a predominantly solar operation, especially when you account for incentives and tax breaks for using renewable energy. Those incentives will probably keep growing, given the political climate.

I've never heard of HadePay. Looking at their site, they should probably hire a new web designer. But their model seems pretty cool and it would be nice to see them gain some market share. It seems like they set up merchants for POS terminals with all the major processors (credit cards, Paypal, Square, Apple Pay) and then also with Bitcoin and LN capability. They process cryptocurrency payments at a flat 1% -- I think that's the same as Bitpay.

I'm leaning towards Brian Armstrong's analysis: They were hiding insolvency ever since the $15M ETH smart contract incident. They were able to continue like this during the 2017 bull market but were increasingly unable to fulfill withdrawals in 2018. This is their collapse, like Mt Gox a few years back.

I think Cotten's death may have been real, and it provided an easy out for the rest of the management who couldn't maintain the insolvent exchange for much longer anyway. Or he faked his death so he could disappear, to avoid answering for the insolvency.

I'm not sure about anything. I can't find any specific details about how it would work except that funds would be held at Bakkt, meaning no direct Bitcoin transactions at the time of purchase.

Of course Bakkt and Starbucks will have a settlement process like any other merchant/processor relationship. What I'm wondering about is how the POS process will work for customers -- how are they physically going to pay at the counter? Is Bakkt issuing a charge card or something? Or will it be integrated into the Starbucks gift card/app ecosystem?

That's a secondary effect of less general traffic and less interest in cryptocurrency investment during these times. I've actually noticed a recent uptick in BTC-paying campaigns launching, but interest in ICOs has been plunging for months and months. I'm sure that has a big effect on advertisers. I remember the altcoin market feeling this way ~ early 2015. It was a real doldrums.

I only see data going back six months. You would probably find similar results in 2014 or 2015, when interest in Bitcoin was similarly waning. It may not say much about future trends.

I'm also not sure if these are the best metrics for general interest in cryptocurrencies. Social media has become increasingly important over time. I'm guessing the forum doesn't have quite the same influence it once had.

The details are really vague. It may not even work like a direct payment processor like Bitpay.

It sounds like you might have to sell on Bakkt, then use the proceeds to buy stored value (like a gift card) that can be used at Starbucks.

That solves the issue of waiting for confirmations but it also means zero innovation beyond what's already happening now. People already buy gift cards with bitcoins all the time.

I think a core issue here is that Bitcoin's deflationary supply discourages spending. It creates strong incentives for people to save rather than spend, especially when contrasted against the inflationary fiat money burning holes in our bank accounts.

This is why some early altcoins like Freicoin introduced demurrage-like fees to discourage hoarding and ensure that currency remained in circulation.

If/when Bitcoin usage is ubiquitous in society, it will be widely demanded among merchants. Consumer payments don't need to be the catalyst for mass adoption, though. That's where I think people have it wrong when they put all the focus on consumer and merchant adoption. Bitcoin is a new form of money, not just an attempt to compete with Mastercard.

If more people want to buy bitcoins than are for sale, the price will rise. That's all "shortage" really means. The price may rise significantly over the years because of Bitcoin's built-in scarcity.

There's plenty of bitcoins to go around, though -- they are divisible down to the satoshi. And with bearer instruments, LN, etc. people will have ways to use small amounts of coins without incurring on-chain fees.

Perhaps, but it's also a reality we should have expected. The design of Bitcoin and most other cryptocurrencies incorporates scarcity. You can't have a scarce commodity undergoing exponential growth in usage without the price being driven to the moon. In that context, with so much money pouring into the markets, it's only reasonable to expect a lot of greed. That's just human nature right there.

It's not necessarily a bad thing. Greed is a strong motivator for adoption.

I was drawn in by greed myself in 2013, and I was chasing altcoins back then because "Bitcoin was too expensive." I think a lot of people who came to get rich end up getting fleeced after the bubble pops and eventually leave. The ones that stick around do so because of an appreciation for the technology and design.

Must be nice!

I guess he's putting his money where his mouth is. If he really thinks Bitcoin will be the internet's "native currency" then there's really only one direction this thing can go.

I assumed the case was getting thrown out as frivolous because they had to pay Shrem's legal fees, but I guess not. This is related to their lawyer obstructing the last hearing. These were punitive actions against the Winklevoss twins and their lawyer -- apparently they don't say anything about the facts of the case. The trial is still set for June.


Shrem has been evangelizing Bitcoin for many years as well.

It didn't work last time and it won't work this time, either. It's just a little Twitter drama among the usual suspects and their limited followings. This blunder will be forgotten relatively quickly. Most of Coinbase's market will never think about this stuff.

I'm also slightly amused that people are acting all surprised and insulted. This is par for the course when it comes to Coinbase.

I always have a good tax attorney look my returns over each year, but I also need to track and estimate throughout the year on my own to make sure I can cover my tax liabilities and also so my quarterly estimates are fully paid. I saw Turbo Tax launched a product for cryptocurrency, and I'm glad to see this from EY too. I've already done the nitty gritty work on last year's taxes but I'll probably opt to use one of them in the future.

Stay away from H&R Block and business like that, though. They're a ripoff and incompetent as well.

It sounds like people will be selling and storing in a fiat-denominated account at Bakkt. That's just straight forward capital gains taxation. Or if it's a Bitpay-style payment processing situation, it's still taxable under the current code.

There have been at least two bills proposed -- one is currently under consideration -- that would exempt capital gains taxes up to $600 yearly that are incurred through buying goods and services. No changes yet, though.


Accepting Bitcoin directly doesn't sound ideal for consumers anyway unless they'll be accepting 0-confirmation or using Lightning. Can you imagine waiting around for a confirmation so you can buy a cup of coffee?

I'd be curious what your findings are if you pursue it further. I always thought Chipmixer's approach was superior to the traditional script methods because those can be extensively analyzed and repeated. With Chipmixer, outputs are broken into generic amounts and users extract private keys that aggregate to [deposit amount - donation]. Those keys can be sweeped at any time. This seems much harder to analyze.

This story about WEX doesn't surprise me at all given BTC-e's history. I remember reading the press release when BTC-e was indicted -- ransomware activity was the first mentioned criminal activity. There were no AML checks or account reviews and the withdrawal system was completely automated, so it was a paradise for laundering cryptocurrency. It sounds like WEX operated exactly the same, at least until they shut down withdrawals and quietly scammed their users.

It could definitely happen in our lifetimes. It's basically a given at this point that ECDSA will be broken by quantum computers sometime in the 2020s. The theoretical breakability of SHA-256 is not as clear cut as with elliptic curve cryptography, but any breakthrough in generic quantum collision search algorithms could quickly change this. I think we should probably assume that all cryptographic functions underlying Bitcoin will eventually be broken, and plan for those contingencies.