I'm okay with that. We have to expect regulated markets to develop if Bitcoin adoption continues on its current trajectory. If there is demand from traditional and institutional investors, the big guys like the ICE and CME Group are going to want to profit from that. There's no way around it.

If you want to trade without KYC/AML, you can stick to decentralized, P2P and offshore exchanges. I don't think Wall Street is that interested in those.

That's an interesting question. Does a Bitcoin wallet actually contain your personal data? I'm not so sure. It contains keys and hashes and transaction history -- but are those yours? The keys were derived using an RNG, deterministic seed, etc. so I'm not sure it's personal data. The transaction history is tied to the addresses in the wallet, thus derived from the blockchain, not you personally.

Even if we could consider a wallet as personal data under the GDPR, how would blockchain.com verify that you're the data subject? You set up the wallet anonymously, right? I don't think there's any way to verify that you have the right to withdraw consent.

Ledger is a hardware wallet, which I don't think of as cold storage. Cold storage implies a device that never connects to the internet. Hardware wallets are intended to shield your private keys from your [potentially compromised] online device, but there are multiple known attack vectors -- firmware vulnerabilities, supply chain attacks, side channel attacks, etc.

HeRetiK's post breaks down Trezor vs. Ledger pretty well, if that's what you're looking for.

My cold storage is either on encrypted wallet.dats on offline storage mediums or in an air-gapped computer that's never been connected to the internet. Paper wallets (generated offline) are another option.

There's a pretty good Wikipedia entry that lists the legal status by country:
https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country_or_territory

Its status is certainly murky in some places, though. The Russian Prosecutor General once stated that using Bitcoin was illegal because "money substitutes" were prohibited under Russian law. Two years later, the national tax authority said bitcoins were "not illegal." Last year, the Deputy Finance Minister said it's "probably illegal" to accept cryptocurrency payments.

I don't think it's "hidden" at all. This is happening across the northern US and Canada, and local governments have been pretty upfront about the problem: Foreign mining businesses are setting up in town and taking far more than excess (unused) energy. As a result, they're driving up rates for residents and threatening the area with blackouts.

It should be no surprise if cities and utility districts answer to their residents rather than to foreign businesses threatening the local electricity grid for profit. Either residents need to pay for the privilege of allowing miners into town (by paying higher residential rates and/or lowering usage), or the miners need to pay for the privilege. Which would you prefer if you lived there?

I'm all for miners soaking up excess capacity, but if they're driving up electricity rates, they should pay the difference. Not residents.

The comparison is made because Bitcoin was intended to remove the need for trusted intermediaries -- like banks. That's where the saying "Be your own bank" comes from.

In actuality, I think the two will live in peace. I don't expect Bitcoin to facilitate the collapse of banking. I think it's just an alternative form of money that will become increasingly prevalent.

In fact, I expect retail banks to eventually offer Bitcoin deposits -- even though that would defeat the whole purpose.

The OP is apparently from India and was asking for our opinions...

I doubt there's much to explain as the law hasn't been amended and there are few official statements in the media. The government is apparently waiting for an RBI report on digital currencies to be released before doing anything.

That's because of miner speculation. Even in the face of falling price, miners are willing to bring new hardware online. Ultimately, this won't always be true if the long term price trend reverses. In late 2014 or early 2015, when Bitcoin was in a long term correction, the hash rate went sideways. If the market stayed bearish for longer, it probably would have started dropping. Eventually, in a falling market, miners will run out of capital to burn and won't be able to continue mining unprofitably.

That's how it goes -- decentralization has costs. The linear scaling model increasingly disincentivizes micro-payments as demand for block space rises. This is necessary because of Bitcoin's limited supply: Eventually fees, rather than block subsidy, need to incentivize miners.

The best solution seems to be offloading transactions onto exponentially scaling platforms that retain trustlessness. The Lightning Network is exciting in this respect, but it definitely has some drawbacks vs. the Bitcoin protocol. (e.g. you need to keep your private keys online)

Maybe that's the end goal. Thinking about cryptocurrency confiscation reminds me of the Gold Reserve Act of 1934, where private possession of gold was outlawed and US gold investors were forced to sell it to the Treasury.

Not a bad way to build national Bitcoin/cryptocurrency reserves, if you think about it.

If you take the position that "all altcoins are scams" then you're probably a Bitcoin maximalist. It's basically just a term used by altcoiners to describe people like that.

No, it proves you don't understand how things work. You literally said "if you shoot 10 runners.. the remaining 10 runners dont suddenly race at a 20 second average. the 100m is still completed in the same 10 second average." That's the same exact thing!

You're saying that if hash rate drops in half sans difficulty adjustment, that block time will remain unchanged. That's absurd and shows a complete lack of understanding of how difficulty works.

Why is there a difficulty adjustment algorithm that retargets block time to 10 minutes? According to you, block time is always magically 10 minutes, regardless of hash power or difficulty.


That's only relative to other miners. You're not accounting for the actual likelihood of blocks being mined.

If difficulty remains the same and computing power drops in half, the chances that any block will be found across the network will drop in half. It doesn't matter if there is "less competition" because difficulty hasn't dropped at all. It hasn't become any easier to find blocks, but half the miners are gone.

Bitcoin doesn't really compete with altcoins. In fact, I think the relationship is quite symbiotic.

You'll notice that any time Bitcoin crashes, altcoins crash harder. This is because market confidence in Bitcoin is of fundamental importance for altcoins. Bitcoin's reliability is a boon for alts; it's what encourages people to take risks in the altcoin market. If the market lost all faith in Bitcoin, altcoins would surely follow.

At the same time, the existence of altcoin markets draws BTC supply to the altcoin markets (rather than BTC/fiat markets). By lowering available supply on the BTC/fiat markets, the price of BTC is driven higher. This is why altcoins are generally good for Bitcoin.

Yes, more or less. If Bitcoin follows the trajectory of other widely adopted technologies -- like televisions and cell phones -- then it's still very early. At most, 5-10% of people in developed countries own cryptocurrency, and the numbers are far lower in undeveloped countries. We still have a long way to go.

Only Tether and Bitfinex will redeem USDT for USD. That's where it's worth $1. All the other exchanges just allow you to trade with it, which means that it can -- and does -- fluctuate above and below $1.


That's the interesting thing about this conundrum. Normally, we think of "FUD" as having a negative effect on price. With Tether FUD, it can drive cryptocurrency prices up as people exit back to BTC.

That's incorrect. If hash rate drops in half, then on average, block times will double. A reduced hash rate = lower chances of finding blocks. This increases block times, which increases the time before the next difficulty adjustment.

This is why the difficulty adjustment algorithm exists at all -- to retarget block time to 10 minutes when increases or decreases in hash rate change the average block time.

Think about it. What you're saying means that if 99.9% of miners shut down, that the 0.01% hash power left can still crank out blocks every 10 minutes.

How did they let it fall apart? Poloniex had already lost the vast majority of its volume by summer/fall of last year. It was a ghost town. I don't think it's declined significantly since Circle took over. They just haven't, well, done anything with it yet.

The timing does seem off. Maybe they ran into regulatory roadblocks. Maybe they just timed things badly and/or overpaid because they were caught up in the hype last year like everyone else. I do think that launching a totally unknown exchange seems difficult in this environment -- it's a really saturated market. I also wonder how valuable Poloniex's database might be for launching new products.

I view things differently, largely because of what I learned from Satoshi years ago. He once said:


You say that 95% of cryptocurrencies are useless. Why does that really matter, and what does that have to do with market value?

The fundamental value of money -- including Bitcoin -- comes from its network, not its "use cases." People can use seashells as money (and they have). What use do seashells have? They're completely useless, and it doesn't even matter because they're scarce and transferrable. That's the beauty of Metcalfe's Law.

Too many people are stuck in an old world mentality -- they say "money must be physically backed, otherwise it must be backed by usefulness." That's a bunch of nonsense that nobody could possibly prove, and history is awash with examples that prove otherwise. The best money is actually useless because it makes supply more predictable. Carlton Banks made a great point about this once:


If you believe that sound money is decentralized, then you ought to value what the market says -- not personal opinions about what's "backing" cryptocurrencies. The people that say "altcoins are scams, they're going to zero" are employing the same logic that says "Bitcoin is a scam, it's going to zero."

That's why I always smile when I see people get worked up over how "useless" altcoins/tokens are. They remind me so much of Bitcoin skeptics.

There's still a $300 difference between Bitfinex and the other exchanges. New deposit system or not, it seems like faith in Bitfinex hasn't been entirely renewed.

And deposits aren't the only issue. Bitfinex said yesterday that fiat withdrawals were operating "without the slightest interference" but people are complaining across social media about missing bank transfers. Supposedly, they're working through a backlog.

If fiat withdrawals start flowing again, prices should return to normal.

There's no "safe" exchanges because they're trusted 3rd parties. They could get hacked or run off with your funds at any time.

I use Electrum for day-to-day transactions. It's lightweight and easy-to-use, but keeps you in control of your private keys. It's also easy to sign transactions offline with Electrum, giving you an extra layer of security by not keeping keys online.


Coinbase is probably safe from being shut down by the US government, but they're definitely not safe from being hacked.

When I use exchanges, I deposit funds, trade, and then immediately withdraw funds. I don't "store" funds on exchanges.