https://geopoliticalfutures.com/russia-opens-door-cryptocurrencies/Russia has announced that it will legalize the use of cryptocurrencies. Official reports from the State Duma and the Finance and Economic Development ministries confirmed last week that a bill is being drafted to create the legal framework for trading in bitcoin, dash, ether and other digital currencies. This comes just a year after the same Russian institutions said that people trading in these currencies could be jailed. This raises two important questions: Why has the government made this U-turn, and what opportunities does it now see in this technology? The answers lie in Russia’s need to address serious problems in the banking sector and their impact on the economy.
The Russian economy has been under severe strain since 2014, when oil prices dropped and the United States and European Union imposed sanctions that have dried up foreign investment. As the costs of accessing money increased, the banking sector was also affected by the downturn. Against this backdrop, the Russian Central Bank has intensified its anti-corruption campaign meant to address dodgy, inefficient banks, some of which use money-laundering schemes to remove capital from the country. About 100 banks have closed in the last three years. Central bank head Elvira Nabiullina said the campaign would continue for at least two more years.
But closing banks is expensive – the process has so far cost the Deposit Insurance Agency (DIA) about $50 billion. In addition, the central bank needs to act carefully to avoid a liquidity crisis caused by closing banks. Local companies depend on banks for liquidity. Extended cash shortages in the country’s mono-industrial regions (many of these regions exist in Russia) could fuel social unrest, which the central government wants to avoid.
Moscow hopes to address some of its banking sector woes with new technology.
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http://reason.com/archives/2016/11/28/the-secret-dangerous-world-ofFour years ago, Alberto's career prospects were bleak. The 23-year-old Venezuelan had just graduated from college with a degree in computer science, but his nation's economy was already shredded by 13 years of socialism.
"There were job opportunities, but they paid like $20 a month, and we were used to traveling and buying things from abroad so we couldn't settle for that," his friend Luis recalls. Alberto and Luis—whose names have been changed for their own safety—teamed up to start a clothing business, but the venture floundered.
Then Alberto discovered bitcoin mining.
He read about it on an Argentinian gaming forum. An item posted to the site described a process of getting paid in a new internet-based currency denominated in strings of numbers and letters, in exchange for running computations on a home computer. His parents said that the whole thing sounded like a Ponzi scheme. Alberto, however, sensed that his life was about to change.
Four years later, his country is embroiled in a humanitarian crisis. The supermarket shelves are bare. Children are fainting from hunger in their classrooms. A mob recently broke into the Caracas zoo to eat a horse. Many Venezuelans subsist on a monthly government stipend equivalent to about $9.
Alberto, meanwhile, based on his own account, is earning more than $1,200 a day mining bitcoins and other cryptocurrencies.
...Bitcoin miners may have unique access to foreign goods, but they also live under constant threat. Many fear they'll be discovered by the Servicio Bolivariano de Inteligencia Nacional (sebin), the country's secret police force. SEBIN officers hunt for bitcoin miners and then extort them under the threat of arrest and criminal prosecution. There is loads more in that article - it's an indepth look at the Venezuelan situation and I recommend everyone click the link above to read it.
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The CEO of Overstock looks back at their decision to add bitcoin as a payment method in their online store in 2014: http://www.coindesk.com/into-the-war-room-overstock-looks-back-on-bitcoin-embrace/But despite all the excitement that move generated he had this to say: While bitcoin is responsible for less than 1% of our annual revenue, our experience integrating it with our website allowed us to understand the true potential of blockchain technology. Obviously he is really excited by blockchain tech etc etc etc - but the standout for me was that despite all the publicity and the hype, less than 1% of their revenue is paid for using bitcoin. At this rate this coin is never going to be used as a currency - the community is too small, and only a fraction of that community is willing to spend bitcoin as opposed to hoarding/saving it. |
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https://bravenewcoin.com/news/wells-fargo-sued-for-suspending-bitfinex-wire-transfers/The parent company of the Hong Kong-based bitcoin exchange, Bitfinex, recently filed a lawsuit against Wells Fargo & Company and Wells Fargo Bank. “This is an action for intentional interference with contractual relations and injunction relief arising from Wells Fargo's interference with plaintiffs' customer contracts,” states the court document.
Filed with the United States District Court of Northern District of California, San Francisco Division, the lawsuit lists four plaintiffs: iFinex Inc, BFXNA Inc, BFXWW Inc, and Tether Limited. A jury trial is demanded.
“Wells Fargo has suspended U.S. dollar wire transfer operations needed to remit to plaintiffs' customers U.S. dollars that the customers deposited with plaintiffs to purchase digital currency, causing imminent and irreparable harm to plaintiffs.”
- Bitfinex Vs Wells Fargo Complaint There is a thread on this on reddit, in which Mark Kapeles aka MagicalTux (of mtgox fame) popped up to say that suing intermediate banks was a waste of time. He had some other interesting things to say too. Here is the thread: https://www.reddit.com/r/Bitcoin/comments/647ojo/wells_fargo_sued_for_suspending_bitfinex_wire/
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http://www.coindesk.com/hidden-history-bitcoin-unlimited/In the midst of the scaling debate, it can be difficult to uncover the genealogical roots of the various competing projects.
The internet operates at a clip that renders analysis of how an open-source project emerged closer to detective work than it should be. Add into the mix rumors, innuendo and disinformation and one really has their work cut out for them.
...They are invariably people already involved with bitcoin for many years, and BU arose primarily from a single thread on Bitcoin Talk known as "Gold Collapsing Bitcoin Up". Like numerous such threads, debates were often heated, quite personalized, and partisan.
There are certain key figures at the time who seemed to have had a real impact on giving this new community a degree of confidence to expand beyond Core.
Dr Peter Rizun was clearly a significant voice and looks to have provided much of the intellectual weight behind BU's theoretical commitments, such as how transaction fees would occur within a network without a block size limit.
The BU operation played out on that thread through the summer of 2015, gathering pace as the bitcoin blockchain began to feature ever higher fees.
According to Rizun, the four-week transactional average recorded on June 2015 had grown 376 times greater than was seen in September 2010. Bitcoin Magazine reported tens of thousands of unconfirmed transactions as the block size strained to accommodate network usage.
A little later, a post by Rizun in July 2015 noticed the average block size had bloated to 70% capacity and was continuing to surge. Discussion on Bitcoin Talk escalated, but the thread was soon locked in what the BU community read as a form of censorship.
Unlimited supporters turned to r/btc that, of course, Core supporters have tended to consider heavily censored, resulting in a kind of intellectual split that, whatever the technical details, is riven with what can appear to the outsider as quasi-conspiratorial paranoia.
The takeaway is that, once untethered from the perceived pro-Core climate of Theymos-dominated media, Bitcoin Unlimited set out on its own path, allowing for a period of off-grid development that would quietly emerge just as Core supporters assumed Segregated Witness (SegWit) would be implemented.
This essentially meant that when a form of competition did emerge, Bitcoin Core was blindsided and broadly unprepared.
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https://www.forbes.com/sites/jasonbloomberg/2017/03/28/bitcoin-blood-diamonds-of-the-digital-era/#72915253492aBitcoin has long been the transaction currency of choice for drug dealers and extortionists, but this month, the IRS has upped the game. Just as tax evasion finally took down Al Capone, now the IRS is looking for tax evaders and other tax cheats who have been using Bitcoin in an attempt to hide their tracks.
The IRS recently subpoenaed customer records from Coinbase, a leading Bitcoin exchange. However, the subpoena is but the latest skirmish in a years-long war against criminals who have been leveraging Bitcoin for a wide variety of nefarious purposes.
The specifics of the IRS subpoena, however, make one thing clear: the majority of Americans who trade in Bitcoin are likely breaking the law.
Coupled with Bitcoin’s popularity among ransomware extortionists and all manner of other cybercriminals, we must now face a chilling realization: the underlying value of Bitcoin really has little if nothing to do with its artificial scarcity or popularity as a medium of speculation.
On the contrary – the only reason Bitcoin has value to anyone is because of the underlying value as a medium of exchange for lawbreakers. If we could flip a switch and eliminate all illegal uses of Bitcoin, there would be nothing left of the cybercurrency.
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http://coinjournal.net/op-ed-will-bitcoins-high-transaction-fees-open-door-altcoin-adoption/Altcoins have long been ridiculed as useless aspects of the bitcoin ecosystem that don’t offer much in terms of real value to anyone who uses them. While they often make vague promises about how they are “bitcoin with feature X or Y,” the number of them that offer any real use cases today approaches zero.
Having said that, the increasingly higher transaction fees on the bitcoin network may have opened the door for a few of them to achieve some sort of purpose in the form of low-value payments. It’s unclear how how many people desire this particular use case, but let’s take a closer look.
...Litecoin – Litecoin is the option that makes the most sense here. After all, it was Litecoin Iconmarketed as the silver to bitcoin’s gold when Coinbase Director of Engineering Charlie Lee first created it while he was still working at Google. Litecoin has the benefit of being around since 2011, and it was created with a singular focus on payments. In theory, Litecoin makes the most sense for low-value cryptocurrency payments right now.
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http://www.newsbtc.com/2017/03/09/41578/Mounting bitcoin transaction fees make this payment method far less appealing as of late. Things have gotten so bad BitPay made some intriguing changes. As of today, the company charges a minimum transaction fee. This new invoice minimum is a direct response to the increasing cost of miner fees. Not a positive development for the bitcoin sector by any means.
...The decision by BitPay will receive a lot of criticism, though. The minimum invoice amount is now US$1 instead of US$0.04. In most cases, this will not make much of a difference. However, it sets a dangerous precedent for the future, Then again, with transaction fees rising, it will still cost US$2 to make the US$1 payment. Solving this transaction fee problem will be a different matter entirely, that much is certain.
BitPay refers to this decision as a result of fees having increased to bid for the limited supply of space per bitcoin block. While that is certainly true, it seems a solution is further away than before. With competing branches of development, no real progress is being made. Rather than trying to work together, both concepts continue to oppose each other. Until common ground is found, bitcoin fees will continue to mount at an accelerated pace.
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http://www.nasdaq.com/article/something-odd-is-happening-at-bitcoins-largest-mining-pool-cm756139Something Odd Is Happening at Bitcoin's Largest Mining Pool
Blocks on the Bitcoin network have been increasingly full lately , except for some of the ones mined by AntPool , which is the largest mining pool on the network . In the past 24 hours from the time this article was written, every non- empty block mined by someone other than AntPool was practically full of transactions, nearly up to the 1 MB limit.
Let's take a closer look at the details regarding these smaller blocks.
Recently, AntPool has been mining a number of blocks with sizes of around 99 KB, 369 KB and 860 KB. There were dozens of blocks mined around these specific sizes during the month of February. During the times these blocks were mined, everyone else on the network was filling blocks with transactions up to the 1 MB capacity limit.
In addition to the non-full blocks mined by AntPool, the mining pool also created 16 empty blocks in the month of February. The total amount of transaction capacity lost by the network during this time as a result of AntPool's small blocks is not difficult to estimate. Numbers shared by BitFury's Alex Petrov show AntPool's average mined block size in February was around 100 KB less than other mining pools of comparable size.
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http://www.coindesk.com/bitcoin-investor-roger-ver-to-push-for-okcoin-liquidation-in-court/Roger Ver’s fight against Chinese bitcoin exchange OKCoin is intensifying as the noted bitcoin investor attempts to have the business liquidated in a Hong Kong court.
The move comes after months of legal wranglings that have already seen the exchange lose one court case. OKCoin's alleged lack of response to the judgement has now prompted Ver to take further action that could ultimately see the company closed.
Ver first sued OKCoin in September, seeking $570,000 plus unspecified damages in a breach-of-contract suit tied to a dispute over the Bitcoin.com domain.
That conflict deepened amid accusations of forgery, as well as impropriety on the part of OKCoin – allegations that exchange representatives swiftly denied.
In the end, Ver went to court, suing OKCoin's Hong Kong entity. At the same time, Ver and attorney Daniel Kelman prepared a suit against the exchange, as well as its chief executive, Star Xu, over the alleged forgery of Ver’s signature. That suit is pending trial.
According to court documents obtained by CoinDesk, OKCoin never responded in court to the breach-of-contract suit. On 17th November, the court handed down a final and interlocutory judgment awarding the $570,000 to Ver.
Yet, according to Ver and Kelman, OKCoin has yet to respond to both the court's decision, as well as further entreaties.
As such, the two say they intend to go ahead with a request for the Hong Kong court to liquidate OKCoin's local entity in a bid to obtain the funds.
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Article from Financial Times. : https://www.ft.com/content/821ae69a-f0d1-11e6-8758-6876151821a6Hedge funds in the US and Japan have devised a daring wager on the future price of bitcoin as the Tokyo courts continue to wade through the aftermath of the Mt Gox exchange collapse and one of the biggest digital heists in history.
According to people with direct knowledge of the situation, at least four hedge funds have begun buying or offering to buy claims from the many thousands of former trading account holders who lost bitcoins and cash when Mt Gox — then the world’s biggest bitcoin exchange — declared bankruptcy in February 2014.
None of the 24,000 or so claimants is expected to get back more than a quarter of the lost bitcoins and cash in their accounts. But the payout will eventually come entirely in the form of bitcoins, so the potential advantage is huge.
Nobody knows how long it will take for claims to be settled but there is the potential for it to be at least another year while five other Mt Gox-related legal disputes are resolved.
Hedge funds are offering claimholders a shortcut that lets them sell their claim now and receive 15 per cent of the yen value of each claim in cash. The hedge funds, meanwhile, are gambling on a bitcoin windfall at some point in the future.
When the claims were lodged in 2014, the Mt Gox trustees calculated their value using an exchange rate of just under $450 per bitcoin. After gains throughout 2016 the market price of one bitcoin in January surpassed $1,000 for the first time since the Mt Gox collapse, and on Monday was trading just above $1,012. |
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http://www.nasdaq.com/article/bitcoin-meets-starbucks-ipayyous-bold-bet-goes-live-cm747580 Launched in May of 2016, iPayYou is an online platform and digital wallet that promotes the viability of Bitcoin as a method of payment. It immediately saw early success through a unique feature known as Pay-by-Twitter — the first online platform site for peer-to-peer payments over Twitter (TWTR).
Now in a bold bet sure to deliver a caffeine jolt to the retail sector, iPayYou this past December introduced Bitcoin Direct to Starbucks (SBUX), a new way for coffee aficionados to pay for those espressos and other drinks through the use of Bitcoin.
This feature allows users to seamlessly transfer bitcoins from their existing iPayYou Bitcoin wallet to their Starbucks mobile app. They select how much (in USD) they wish to transfer before prompting Bitcoin Direct to Starbucks to automatically withdraw that amount from their iPayYou account. Once deposited into that person’s Starbucks account, purchases can be made via the mobile app at any Starbucks location.
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https://themerkle.com/haobtc-to-shut-down-bitcoin-exchange-operations-soon/The recent string of new requirements by the PBOC has made life a bit more difficult for Chinese cryptocurrency exchanges. Some services even started delaying bitcoin withdrawals by several days, as they are working on implementing new anti-money laundering requirements. HaoBTC was one of the few exchanges seemingly unaffected by the announcement, even though they made some significant changes as well.
Just last week, the company announced they would introduce new deposit fees for their exchange business. A 5% fee would be charged for all deposits, which is quite steep, to say the least. It appears this was only a sign of what had yet to come as Chinese sources claim HaoBTC will shut down their exchange service very soon. All of their other bitcoin services, including the mining pool and online wallet will continue to operate without delays or issues.
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http://www.coindesk.com/charts-etf-approval-impact-bitcoins-price/ This infographic of bitcoin's price is something I've been pondering today.
It tells bitcoin's often dramatic price story in fundamental trend lines that abstract away some serious doses of speculative activity.
There's a lot in this chart, so lets break it down:
In late 2015 through to May 2016, we saw a three cats and a moon consolidation pattern play out over six months after a multi-level marketing (MMM) pyramid scheme took bitcoin price action through some exciting times.
By early June 2016, we saw a speculative bubble (marked in green above) as the market sought to price in the upcoming block reward halving event. This was to be the second halving event, slashing payout and therefore the supply of new bitcoins from 25 BTC every 10 minutes to… well, exactly half to 12.5 BTC.
Leading up to this, many people were afraid miners would exit (taking their protective hashing power with them), and that the block processing would slow and the price could crash. This did not happen. What happened was simply that the markets saw less sell-side pressure from miners who had fewer newly minted coins to sell. (The blue trend shows the steeper rate of price appreciation this had on the markets.)
Finally, what we may be seeing from Q4 2016 to present is the market undergoing a much larger and longer speculative phase for the upcoming bitcoin ETF decision. If approved, hundreds of millions at a minimum are expected to be poured into bitcoin. Understandably, the blue-shaded area in our infographic would then be drawn out. There is a lot more in this article - I highly recommend people click and read it.
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http://www.investopedia.com/news/wa-regulators-considering-bitcoin-ban-marijuana-industry/Washington state has introduced a measure to ban the use of Bitcoin in transactions with its burgeoning legal marijuana industry.
According to GeekWire, a state senator has introduced the bill claiming that the cryptocurrency is not transparent enough for marijuana sales.
Marijuana businesses have flocked to Bitcoin as an alternative to holding on to large sums of cash, since many banks will not service the pot industry as marijuana is still classified as an illegal substance at the federal level, despite being legal for medicinal and recreational use in many states. The ban on Bitcoin would force marijuana entrepreneurs back to square one when it comes to holding on to cash, which brings with it security risks and expenses.
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http://fortune.com/2017/01/27/bitcoin-firm-switzerland/Bitcoin wallet provider Xapo said it has received conditional approval from Switzerland's financial market watchdog to operate in the country in a regulatory breakthrough for companies that provide safekeeping for the virtual currency.
"After almost two years of substantial effort and investment, Xapo has received conditional approval from the Swiss Financial Market Supervisory Authority (FINMA) to operate in Switzerland," Xapo CEO Wences Casares said in a blog on the company's website.
The approval depended on several factors, including membership of a "self-regulatory organization," Casares said, but added that the company was optimistic of meeting the conditions and being able to serve non-U.S. customers from Switzerland.
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The Chinese exchanges applied trading fees of 0.2% for the first time on January 24th 2017. You can see the effect in the following chart:  |
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