It'll be a while. They're actually planning to implement a new POW algorithm to replace Ethash with something more ASIC-resistant. It looks like the EIP has just been accepted. Some ETH miners won't be happy about this.

Have Casper developers even established a strong theoretical basis for the full proof-of-stake implementation? Anybody have some links to their research? I've seen a lot more work coming from the Cardano camp than from Ethereum.

If that's their basis for rejecting futures markets, why would they want to allow an ETF? How is it any less based in speculation?


Indeed, I'm sure their over-regulation is the reason Japan's share of global volume has plummeted. It might have a positive effect on US regulators' position towards future ETF approval, but I doubt it would greatly affect the market.

I think it's less about fraud and more about terrorism, and secondly, money laundering. That's why the Department of Homeland Security makes the most requests of any agency. Their main task is dealing with terrorism.

Even altcoin-only exchanges like Poloniex and Bittrex started mandating KYC last year, so it's not just fiat exchanges.

Gresham's Law is relevant here. If "bad money drives out good" then we should expect people to spend fiat currencies and less valuable cryptocurrencies before Bitcoin. Bitcoin has stronger monetary properties, therefore it's rational to hoard it rather than spend it assuming one has other money at his disposal.

Without scarcity of block space, there is no post-subsidy income guaranteed to miners. So we might have free transactions, but transaction security would evaporate, so the incentive system underlying Bitcoin would be broken. That would inevitably destroy its value as money.

I figure Zcash must be more transparent (easier to analyze). I know that shielded transactions are rarely used on the network, so maybe that factors into it.

Both Gemini and Coinbase obviously make a legal distinction between shielded and unshielded transactions. Since Monero mandates anonymous transactions at the protocol level, I assume this means Gemini and Coinbase will never list it. Coins like XMR will probably be relegated to the lower tier and offshore/unregulated exchanges.

Ah, I didn't even notice Coinbase listed Zcash too.

I assumed the issue would be depositing from shielded addresses since that would hide previous transaction history and possibly raise AML policy issues. Why would Gemini/Coinbase care about withdrawing to shielded addresses? Couldn't customers just use shielded transactions after the initial withdrawal, or does that compromise their privacy?

I was really surprised Gemini had the balls to list Zcash last year. Who knows, with Coinbase hinting at an altcoin/token listing spree, maybe they'll add a privacy coin themselves.

The Japanese government is known for having an authoritarian streak. It'll be interesting to see how things play out in the states by comparison.


In the context of fiat exchanges, governments like the US can always come after rogue exchanges through the banking system. But crypto-only exchanges in unfriendly jurisdictions are much harder to target since the US has no way to get its hands on the money. This is the ideal context for privacy coins until DEX protocols are more robust.

Most sanctions are directed at individuals and entities, not entire countries. That's the case in Russia. There are lots of other countries affected by sanctions -- like Yemen, Venezuela, Somalia, ​Nicaragua, CAR, etc. -- who aren't included in this "high-risk" category. It's hard to say what sort of criteria Binance is using here.

The details are really minimal here. I can't figure out exactly what he's being charged for. "Commercial trading" is a term usually employed by the CFTC to characterize traders that use futures markets to hedge their business activities:


Commercial traders are required to register with the CFTC and make periodic disclosures. "Trading authorization" usually refers to clients granting authority to brokers to places trades on their behalf. It sounds like Boden was running a brokerage of sorts and dipping into customer accounts without the proper authority.

However, that doesn't explain why the DHS and FBI are involved as opposed to the CFTC or SEC. I don't really get it.

Venture capital is a high-risk area, but I think you're right. This is a huge investment from a bunch of high profile VC firms. I don't think we'd see this magnitude of investment without a high level of confidence that Bakkt will get the green light.


I don't have the same level of confidence with an ETF. There's precedent for CFTC-regulated markets -- both cash settled and physically settled. There's no such precedent for an ETF, and the SEC seems like they have much more stringent standards.

Maybe he's a pawn in a larger game; the DOJ is alleging organized crime connections. Obviously, the details are scarce here and nobody really knows what's going on. It sounds like it goes a lot deeper than merely operating a low-volume exchange and skimping on AML/KYC:


$3.68 million annual turnover is pretty paltry, but if the entire exchange was a front for an illegal operation, maybe it was enough to get their attention.

That seems to imply that the OTC market plays an important role: It absorbs real supply and demand, which inevitably affects spot prices.


I don't get it. Let's take an example.

Person A puts a sell order for 300 BTC on Bitfinex's OTC trade desk. Person B puts a sell order for 300 BTC on Bitfinex's exchange order book. Both orders get filled.

What's the difference?

If we consider this logically, it wasn't really the halvings that caused bullish trends. The Bitcoin supply is inflationary -- each halving merely reduces the amount of inflation added to the market. For the price to actually rise, we need constantly growing demand. A halving might factor into someone's decision to buy, but there are a multitude of other reasons that people buy -- for cross-border or censorship-resistant payments, to avoid the banking system/retain privacy, because of the growing network size/utility (Metcalfe's Law), general speculative investment or altcoin investment, to use as currency or in the Lightning Network, etc.

Whether it's an ETF or Bakkt or the halving, people are always trying to rationalize why other people are buying or selling. The truth is, we have no idea why people buy or sell. Everyone has their own reasons. The halving is somewhere down on the list, but it's not that important.

This is the key right here. Nobody should be using exchanges to store funds. They aren't wallets. Any coin you want to hold long term should be held in a secure wallet where you control the private keys. Day trading or running trading bots requires keeping funds on exchanges, but one should always withdraw any excess funds that aren't being used for trading.

This goes for fiat money as well -- there's no reason to hold USD on an exchange for months at a time. People should withdraw to their own bank accounts in case their exchange suffers hacks, legal problems, or in case they exit scam.

Indeed, it doesn't work well under today's dynamics, where Bitcoin has only a fledgling economy and most trading is done through a limited number of centralized fiat gateways. Decades from now, things might look very different -- blockchains interoperable with Lightning and atomic swaps, DEXs that are actually decentralized, greater liquidity and a more robust ecosystem of local and P2P exchanges, and hopefully a more self-sufficient economy that isn't wholly dependent on fiat gateways.

You realize the USD is the world reserve currency, right? It's the basis for international settlement. It's usage far surpasses the US population. The yuan pales in comparison, both in terms of usage and liquidity. The yuan is known for its extremely tight liquidity since it is so tightly controlled by the Chinese government through state-run banks.

The best store of value is about utility -- and the USD has much, much further reach than the CNY. It's much more useful. This parallels the ideas behind network value vis-a-vis Metcalfe's Law in cryptocurrency networks.


If that were true, network liquidity would move to Litecoin and it would become more valuable. Inevitably, though, Litecoin -- like virtually all altcoins -- would run into the same scalability bottlenecks as Bitcoin. If the market needs to find that out the hard way, so be it. It's a free market. C'est la vie.

What you don't seem to appreciate is that people will have a multitude of options. If they need superior security, they'll use Bitcoin. If they don't, they'll use something cheaper. This is a fundamentally good thing; Bitcoin doesn't need to monopolize the entire market.

I don't think they have much choice after OFAC's statements in November. The Treasury Department made clear that cryptocurrency exchanges may be subject to secondary sanctions if they transact with designated individuals. If secondary sanctions were placed on Binance, it would cut them off from the entire US market!

We knew these policies were coming since almost two months ago when Binance explicitly told Iranian customers to withdraw ASAP:

Bitcoin development is so decentralized that Google's algorithms can't figure out who they are.


I feel the same way. I'm all for trying to steer newbies in the right direction, but there's a steep learning curve with Bitcoin. Many people simply won't learn until they pay for their mistakes -- leaving funds on exchanges or online wallets, putting all their faith in crappy altcoins, etc.

Regardless of any asset's features, the store-of-value question ultimately boils down to the faith of its users. The best store of value has the biggest network of users and the most market liquidity -- this parallels the idea of Metcalfe's law. It'll be interesting to see how Bitcoin's market share compares to gold in a decade or two. I don't think Bitcoin will necessarily be bigger just because it's superior.

I love this explanation from Satoshi, especially that last line -- "I think people would still take up something." Like, it's not about intrinsic value or anything like that. It's just about what people choose to use as money.

Your arguments never have any substance. You just baselessly refer to LN nodes as "banks" and expect people to believe you.

Counterparties in LN can only co-sign changes to channel state. They don't have control of the underlying funds. Any attempt to steal underlying funds can easily be thwarted by broadcasting the last state to the blockchain.

Peers in LN don't have the power to stop you from making payments. At most, they can cause a delay by not signing counterparty transactions or refusing to route them. There are no incentives for them to censor transactions, but there are incentives for them to route them.

Worst comes to worst, you settle to the blockchain. There's no comparison to banks.