It's tough not to compare BTC price to other currencies. People naturally measure consumptive goods against purchasing power. It's a rational mechanism to keep people from going hungry.

I understand what you mean, though. From a Bitcoin holder/investor standpoint, it should be based on subjective value. For example, I like the idea of a work contract being payable in a specified amount of BTC rather than USD. Whether the price rises or falls, I don't want to be paid any less BTC than I was contracted for.

Using mining cost doesn't work. That doesn't account for market demand.


Lightning is coming. Some vendors are even accepting mainnet Lightning payments already!

I was unpleasantly surprised a year or two ago when I realized that part of Bitfury's R&D was into blockchain analysis. It should come as no surprise that blockchain analysis is maturing as so much money continues to flow into Bitcoin and other coins.

But naturally, I no longer view Bitfury as a company to root for. They're working with the enemy now.


I don't think that's entirely true. I think that the privacy implications weren't entirely clear at the outset. The norm of using change addresses (including multiple change addresses per transaction) was obviously privacy-oriented. I think the point of Bitcoin's design was transparency, but I don't think that Satoshi necessarily intended for it to degrade user privacy.

The way this is framed is a bit misleading. There's no accounting for the degree of investment. Most exchanges enforce pretty low limits on credit cards due to the high likelihood of fraud. At least the authors made clear that this wasn't entirely representative of the situation.


You'd be surprised. Overstating income is common, and during the days of easy credit, I've known people that have received six-figure credit lines based on no proof of income. The real bottleneck is the low limits on credit card transactions allowed by exchanges.

I think that credit cards are more about fear of missing out than anything else. Wires can take several days or even weeks to process. I'm pretty sure you can buy instantly with credit cards.

FYI, Binance already re-enabled new user registrations by the time this article was published. Bitfinex and Bittrex still have registration disabled. So does Cryptopia.


They are trying, no doubt. What businesses do you know that were built to scale at this rate? Hundreds of thousands of new users a day?! This is exponential growth. No one was prepared for this, and it takes time to drastically increase engineering hires who can scale your platform safely.


What does closing registration have to do with censorship? Anyway, no cryptocurrency is uncensorable. At best, they are censorship-resistant.

That's easy to say when Morocco or Vietnam talks about banning Bitcoin. What if the USA, Britain, Australia and others coordinated a ban? Then your options to move abroad become much less attractive.

And such coordinated state attacks against the network should take a nice bite out of the price, too. I suspect that Bitcoin would still have market demand in that case, but not the type of demand we see today, which is based on speculation of Wall Street and mainstream adoption.

These bubbles aren't exactly foreign to bitcoin folks. It's just low-supply commodity market economics playing out. There's really no question at this point whether there will be a crash. Of course there will be! There always is. The interesting part is to see how high it goes first.

It's during bear markets that the ecosystem develops and matures, and people really get to work on coding and infrastructure. It may look like a "boom and bust" but it's healthy. In fact, I don't think price discovery can really happen any other way with an asset in such limited supply.

As for Tether.... the company is suspicious but I'm not convinced that their centralized USDT and opaque banking practices are capable of keeping the market in a bullish frenzy for a year. When crypto really moves, the buying pressure usually comes from Coinbase, Bithumb or Bitflyer. Not Bitfinex or Tether.

It's definitely a good thing. Concentration of mining power behind the Great Firewall has been a big concern for years, especially in the context of data propagation lag. China has had a majority of mining power for years, and it's much healthier if that hash rate is spread around the world. That way, no single government can drastically affect the mining ecosystem with official actions.

The primary concern is how smooth the transition is. I'd rather not see massive drops in hash rate if/when the hammer officially comes down. Fortunately, it seems like the larger Chinese miners have already been planning for this. Bitmain has been expanding their base overseas for years now.

As I've said elsewhere, I think it will take significant market share from those altcoins that are nothing more than payment protocols with faster confirmations and lower on-chain fees. That's a significant sector of coins.

A well-functioning Lightning Network could make coins like Litecoin obsolete if they don't re-brand with new use cases. I suspect that many altcoin developers will re-brand and pursue features that Bitcoin lacks: governance structure, node incentives (LN rewards for typical users are likely to be very low), alternative exponential scaling mechanisms like tree chains, consensus sharding and DAGs, and other full-service use cases like blockchain anonymity and decentralized exchange.

I'm not sure I follow. How often do you see gold and oil ETFs diverge significantly from the underlying asset? You can trade the swings just like any other swing trader in the spot markets, but the third party exchange risk is much lower. Sure, there are trading commissions, but it's customary in the regulated market to charge flat fees, so it'll be much cheaper to trade than the underlying spot markets. And yes, there are tax revenues, but what else would you expect here?


Too bad, no VelocityShares equivalent. A sweet long term 3x entry (tax deferred via retirement account) could be epic.

It doesn't make sense to introduce "dirty" fiat money into the cryptocurrency ecosystem in order to clean it. There is so much friction between fiat currency and cryptocurrency, and there isn't much volume in the markets to support large scale money laundering.

There are good ways to launder cryptocurrency itself (e.g. money you receive from the DNMs). Using VPN and the TOR browser and mixing your bitcoins is one way. Strong privacy coins like Monero are another method. But it's important to note in all cases that organizations like INTERPOL and the FBI are privy to much better blockchain analysis tools than the rest of us. There may be various privacy exploits that we don't know about yet. TOR and VPNs can be compromised. You never know. As someone mentioned, if you need to launder fiat money, there are better-established, more liquid, and safer methods to do it.

Tavis Ormandy, security researcher at Google, pointed out a critical vulnerability to the Electrum team earlier today. They immediately pushed a security update. It's advisable to shut down immediately if you are running Electrum.


It's a bit disappointing to see that the vulnerability was already an open issue from last year. I guess they didn't realize how severe it was.

It would depend on my perception of enforcement action. Are they packet sniffing on individual citizens? Would I get thrown in jail for making a Bitcoin payment? Most governments are stretched too thin for that and are probably just interested in a blanket deterrent if they institute a ban. The use of VPN and TOR might be enough to hide your activity.

The real problem is when the governments start banning VPNs and turning TOR into a honeypot. Decentralized mesh networks can't come soon enough, but at this point, they still feel like a pipe dream.

Let's keep this in perspective. Americans use more electricity to power their Christmas lights during the holiday season than the Bitcoin mining ecosystem consumes in a year. This will increase with time, but some of the environmental naysaying I've seen doesn't seem to account for scale.


It'll certainly attract the ire of environmental organizations. But again, it should be a matter of perspective. If Bitcoin is to complement (or potentially replace) physical gold and paper money, we should be considering the energy consumption of those industries. It's nothing to sneeze at.

As for government, I think the use of subsidized energy for mining will become a bigger issue. Other than that, it really depends on the economic effects. Bitcoin is apparently a boon for the Japanese economy, so I don't see them discouraging mining.

I think that initially, public adoption of Lightning will cause a bear market in most altcoins. It will probably cause a reversal to the falling trend of "Bitcoin dominance." And in the end, I think it will crush any altcoin that has no other selling point than fast/cheap transactions.

However, it's important to note than the altcoin realm is becoming much more diverse than simple payment/messaging protocols. We are talking about decentralized exchange protocols, privacy mechanisms that could take years to implement in Bitcoin, alternative governance mechanisms, decentralized lending, and and other protocols/suites that can offer lots of new use cases that Bitcoin doesn't address right now.

Rootstock did recently launch on Bitcoin. It's in limited release right now (not public), but it's on the mainnet and could offer scalable sidechain transactions and smart contract functionality in Bitcoin. That could cause even more downside pressure on the "fast/cheap transaction" altcoin niche as well as the Ethereum and Ethereum-clone "smart contract" niche. Interesting times ahead!

My take is that it's risky to rely on Gibraltar as a haven from outside regulatory action, or pressure from regulators. Whatever the underlying cause, Visa recently shut down WaveCrest's access to the Visa network. They were issuing cards for Xapo, Bitpay, and others. WaveCrest is licensed in Gibraltar.

It's a toss-up. Nobody knows how any of this will play out. One example that comes to mind is Antigua and Barbuda's support of online gaming, including offering services to US residents in the face of the UIGEA passed in 2006. In the end, the WTO sided with Antigua and Barbuda against the US, and Antigua continues to lobby for hundreds of millions of dollars from the US for unlawful enforcement of the UIGEA against free trade agreements.

So I am very curious to see how this plays out:

It's a pretty frustrating situation. Some tax consultants and CPAs have stressed that fork coins may be taxable whether or not you claim them or sell them. There was a recent thread that discussed the issue here.

As far as US taxpayers go, this seems to be the common take on fork coins: https://www.forbes.com/sites/greatspeculations/2017/08/04/how-to-report-bitcoin-cash-and-avoid-irs-trouble/#3d0f03b13066

Forks like Bitcoin Cash and Bitcoin Gold probably count as "other income" with a cost basis based on the value when markets launched. After that, normal capital gain/loss taxes apply. It's frustrating because claiming these coins comes with malware and privacy issues. And dealing with the smaller forks? The risks are even greater. So I'm curious how taxes might apply to smaller/riskier forks. I haven't seen many opinions on that.

But you can show the origin. It's right there on the blockchain. Even if Mintpal is gone, why can't you claim the coins are from Mintpal? Why can't you claim trading records based on that? Tax authorities are interested in taxable income. You're paying that, yes? By paying taxes on cryptocurrency trading income from a defunct non-KYC exchange, you are going far beyond what most people are doing.

You may not be able to prove that the addresses belong to Mintpal, but if they truly did, I wouldn't worry about it. It can be easily determined by blockchain analysis companies (or possibly even Walletexplorer) that they did. You can sign a message from the address that you sent 1 BTC from. You can sign an address that held 5 BTC withdrawn from them.


That's why you should probably report income that is easily trackable. This makes it very important to avoid linking wallet addresses together. You should consider how you spend UTXOs and how that links your BTC holdings together on the public ledger.

You might be surprised. Personally, I'm not enamored with the idea since I don't see eye-to-eye with most bitcoiners, politically and socially. But one thing I've learned watching the political system in the US is that raw campaign expenditures are much more important than any other factor in deciding winners. In 9/10 cases (or more), the candidate that raises the most money wins, and the mere appearance of money in the coffers causes opponents to drop out.

If Bitcoin ends up going to $1MM, there will be a lot of pro-crypto folks sitting on unprecedented profits. I wouldn't underestimate their capability to influence politics on that basis alone.

That seems unlikely. VISA and Mastercard (and to a lesser extent, Amex and Discover) are the gatekeepers.

The fundamental problem here is that debit cards funded with cryptocurrency defeats the entire purpose of cryptocurrency. What's the point of "being your own bank" if you need to convert to USD or EUR just to use the gatekeepers' payment networks?

Bitcoin was literally created to displace centralized middlemen like VISA. We don't need alternatives to WaveCrest. We need to stop using these stupid debit cards in the first place. To boot, you need to sacrifice significant privacy to use them.

If you deposited and withdrew BTC from Mintpal, those transactions are permanently recorded on the blockchain. It doesn't matter what transactions took place on Mintpal's internal database.

You sent BTC from Address A (which you can prove control of). You received a higher amount of BTC at Address B (which you can prove control of). The difference is your BTC profit, but what matters for taxes is the USD profit. Each trade on Mintpal is taxable, and the net of those gains determines your taxes due.

The fact that Mintpal no longer exists just makes it harder to disprove the records you provide for your Mintpal trades. That's why any good faith effort to pay taxes on the gains made between Address A and Address B is probably good enough. You made 4 BTC profit, which had a USD equivalent when you bought back BTC. That's your taxable gains.


How can they definitively link addresses together? Personally, I am extremely careful about linking wallet addresses together, even if it means paying higher fees to consolidate outputs.