In Toma v Murray,(1) the court declined to continue interim injunctions granted in respect of a 'coin depot account' holding bitcoin over which the claimants asserted a proprietary right. On this occasion, the balance of convenience in respect of continuing the injunctions did not lie with the claimants, including because damages would be an adequate remedy.

Background

In 2015 the two claimants, Mr Toma and Mr True, sold bitcoin to an account in the name of BTC OTC on LocalBitcoins, an online trading platform based in Finland. Although the claimants had initially been paid for the bitcoin, the relevant payments were reversed leaving them without the bitcoin or the relevant payments.

The BTC OTC account was controlled by the defendant, Mr Murray. Similar amounts of bitcoin had been transferred from the BTC OTC account to a coin depot account that he also controlled, giving rise to the inference that the claimants' bitcoin had been transferred from one account to the other. Murray's position was that his accounts had been hacked.

The claimants had obtained interim injunctions restraining the defendant from dealing with the bitcoin in the coin depot account and applied to continue those interim injunctions.

Relevant legal test for granting interim injunctions

The relevant legal test for interim injunctions was recently set out in cyber-fraud case AA v Persons Unknown(2) (more commonly known as Re Bitcoin) (for further details please see "Bitcoin is 'property' and can therefore be subject of proprietary injunction"):

On these facts, the court found that there was a serious issue to be tried. A full hearing would be needed to determine whether the defendant had committed a fraud; this was not a matter for an interim application where the court should not conduct a mini trial or even express a view on the merits of either party's case.

So, did the balance of convenience justify continuing the interim injunctions?

Balance of convenience

The court needed to consider:

As to the damages question, the claimants submitted that the significance of that question is reduced where there was a proprietary claim, citing AA v Persons Unknown and Madoff Securities International Ltd v Raven.(3)

The court held that those cases merely established that claimants would more readily be afforded interim remedies in such circumstances, not that they inevitably would. The cases could be distinguished on the basis that on their facts, if a proprietary injunction had not been granted, the claimants were likely to have had no realistic possibility of recovering any loss that they had suffered. In this case, the defendant was a known individual with a substantial unencumbered asset worth many times more than the value of the claim. Further, although the claimants' claim was put on the basis of a proprietary tracing claim, they were essentially seeking the value of the bitcoin contained in the coin depot account which was capable of being satisfied in monetary terms rather than necessitating a proprietary remedy.

Further, by the claimants' own admission, they would have had difficulty satisfying any cross-undertaking as to damages and therefore the defendant would potentially have been exposed to any loss suffered as a result of the injunctions being continued.

Finally, the court considered whether the injunctions might be continued with a protective mechanism added whereby the defendant would be able to sell the bitcoin in the cash depot account subject to the claimants' consent. However, the court did not consider this practical as a long-term solution given that obtaining consent expeditiously might be difficult, recognising that the volatile nature of bitcoin meant that its value could fall very quickly. The court also considered that the claimants could potentially use any requirement for consent as settlement leverage.

Therefore, the court concluded that the balance of convenience did not lie with the claimants and declined to continue the interim injunctions.

Comment

This case adds to the growing body of case law relating to the injunctive relief that may be granted in respect of bitcoin and other cryptocurrencies. It is interesting that bitcoin's characteristic volatility was one factor that the court considered militated against an injunction. It should be noted that while the court did not consider that an injunction containing a mechanism permitting the sale of the bitcoin by the defendant subject to the claimants' consent was a viable long-term option, it acknowledged that it might be an appropriate short-term solution where claimants were seeking an interim injunction on a without notice basis (as was initially the case here). Accordingly, claimants seeking short-term injunctive relief should consider making such a proposal to maximise the probability of obtaining such relief.

More generally, it is interesting to note the divergence between the court's approach in this case, where the identity of the defendant is known, and in AA v Persons Unknown where it was not. There is clearly a strong logical basis for providing claimants who do not know the identity of a potential fraudster with greater ammunition to protect their interests than those who do.

Endnotes

(1) [2020] EWHC 2295 (Ch).

(2) [2019] EWHC 3556 (Comm).

(3) [2011] EWHC 3102 (Comm).

Here is the original post:
No interim injunction over bitcoin account where damages would be adequate - Lexology

Bitcoin and cryptocurrency markets have been dominated by decentralized finance, often shortened to DiFi, over recent months.

The bitcoin price, up around 40% since the beginning of 2020, has been left in the dust by the gains made some DeFi project tokensincluding yearn.finance (YFI) that's up a staggering 3,500% in just a little over a month and has surged past bitcoin's late-2017 $20,000 all-time high.

Bitcoin remains the biggest cryptocurrency by total value with a market capitalization of over $200 ... [+] billion, however, individual yearn tokens are now worth far more than single bitcoins.

The price of yearn.finance tokens have soared from under $1,000 per YFI since it was created in mid-July to over $30,000 this weekend, passing the bitcoin price on Friday. The yearn.finance price came close to $40,000 on some bitcoin and cryptocurrency exchanges before falling back.

YFI is the governance token of DeFi protocol yEarn, designed to aggregate yields from other lending protocols. DeFi is the idea cryptocurrency technology can be used to recreate traditional financial instruments such as loans and insurance.

YFI holders can use their tokens to vote on proposals for network upgrades and it can be earned by putting cash into yEarn, a practice known as yield farming.

"The yearn.finance coin has become the altcoin star recently," Alex Kuptsikevich, FxPro senior financial analyst, said via email.

"In a month it has shown twentyfold growth, living proof that 'unicorns' still exist, at least in crypto. The rapid growth of the coin also reflects the popularity of the decentralized financial sector. The creators of the project decided to follow the bitcoin path, limiting the issue of only 30,000 YFI coins. Such limited supply spurs rapid price growth."

This price growth was not something planned by the YFI creator, however. Yearn.finance tokens were described as "completely valueless 0 supply token," by its creator Andre Cronje.

The yearn price has jumped by 26% in just the last 24 hours, adding to massive gains through August ... [+] and leaving the bitcoin price in the dust.

"We reiterate, it has 0 financial value," Cronje wrote in a Medium post last month outlining the project.

"There is no pre-mine, there is no sale, no you cannot buy it, no, it wont be on uniswap, no, there wont be an auction. We dont have any of it."

But this warning hasn't stopped some of the biggest personalities in bitcoin and crypto from making outlandish predictions about the YFI price.

"One YFI [equals] $100,000," Arthur Hayes, the chief executive of the Seychelles-based bitcoin and cryptocurrency exchange BitMEX, said via Twitter, forecasting the yearn.finance price would continue to climb and hit $100,000.

Read more:
A Radical New Crypto Just Blew Past The Bitcoin Price All-Time HighUp A Shocking 3,500% In Just One Month - Forbes

When he first presented his research on Satoshis alleged treasure trove of untapped Bitcoin in 2013, Sergio Demian Lerner was met with a fair amount of pushback. Opponents felt that attributing some 1 million BTC to its creator would be prejudicial to the adoption of Bitcoin and anathema to the acceptive narrative of Satoshi as a benevolent creator, Lerner told CoinDesk.

Lest the image of Bitcoins immaculate conception be tarnished, Satoshis coins were better left untouched, both literally and empirically through research, the detractors argued.

That didnt deter Lerner, though, who didnt buy what he called the feeble arguments that these coins were simply lost to the wallet amnesia of early Bitcoin adopters.

So the IOV Head of Innovation and RSK designer has spent the past seven years decrypting the mystery of how many coins Satoshi may have mined and why his mining technique differed from his peers methods in Bitcoins early days. Lerners weekend project, as he calls it, has spawned a body of supporting research from anonymous community members, the research team at BitMex, Kim Nilsson and Jameson Lopp, among others.

Collectively, Lerner et al. have chipped away at the mysteries surrounding the hoard of some 1.1 million BTC mined in the first two years of the network and which remain stashed away, untouched. While most believe the $12.65 billion horde belongs to Bitcoins pseudonymous founder, Satoshi Nakamoto, Lerner ascribes it to Patoshi. Its Lerners way of signaling that, even with painstaking research, we cannot be 100% sure these coins belong to Satoshi.

Caveats aside, most researchers assume the Patoshi pattern, as its called, represents Satoshis mining activity. And while the total number of coins under Patoshis control has been subject to debate over the years as new evidence has come to light, this empirical researcher has led to other, more philosophical findings.

Principally, Satoshis mining activity in the early days was likely motivated more by ideology than by profit.

The miners time machine

Im looking for the truth, and with the forensic evidence we have today Im more convinced than ever that Satoshi cared about the network security much more than becoming bitcoin rich, Lerner wrote to CoinDesk over email.

His sentiment speaks to the results of his latest (and potentially final) research regarding the Patoshi pattern.

Most recently, Lerner decided to do something he originally wrote off: re-mine Bitcoins first 18,000 blocks with the hope of churning up new data on how Satoshi mined.

When he originally cooked up the idea in 2014, Lerner assumed that Patoshi would be using a software to mine Bitcoin similar to the public code in the first Bitcoin release. But as his (and others) research colored in the gray area of unknowns surrounding the Patoshi pattern, Lerner learned Patoshis mining software was nothing like the public [software] other early miners were using.

The degree of difference between Patoshis setup and everyone elses is at the core of Lerners recent research. One theory is that Patoshi was using 50 or so CPUs together in a less powerful, proto-form of the pooled mining that dominates Bitcoins ASIC-fueled mining landscape today. The other theory, which Lerners research corroborates, is that Patoshi was using a hashing technique known as multi-threading.

In Bitcoin mining, multi-threading is a process whereby a miner can search for multiple nonces at the same time (a nonce is the cryptographic number that miners are searching for when mining for a new block). This is accomplished either by using each core processor in a CPU individually to search for a blocks nonce or by processing multiple nonces through a Streaming SIMD Extensions (SSE) instruction, a technique for intensive computer processing.

Put simply, instead of using the CPU to do one sweep for the nonce, Patoshi used his CPU to conduct multiple sweeps.

Lerner came to this finding by re-mining the Bitcoin blockchains first 18,000 blocks. The idea is to re-scan the blockchain to find all of the nonces (solutions) that Patoshi did, while also discovering all of the solutions that they did not find (technical note: its possible that each block has more than one solution).

When this process is repeated thoroughly, Lerner explained, it gives you an idea of Patoshis own hashing patterns.

What I did is to uncover all solutions for every block in the first 18K blocks in order to detect the scanning direction of the algorithm Patoshi used, he explained.

More specifically, Lerner discovered Patoshis mining algorithm typically found higher value nonces rather than lower value nonces. This reveals the order in which the nonces were tested, Lerner said, lending credence to the theory that Patoshi was multi-threading to search for multiple nonces simultaneously given the pattern is unique to the blocks Patoshi mined.

Thats why we know Patoshi used a more powerful system than the rest. Not because he had a super-computer, but because he used his computer better, he told CoinDesk.

Mining for the common good, not for the goods

Lerner mentions in his research that Patoshis mining logic is the opposite [of] the Satoshi client version 0.1, the original mining software released with Bitcoin Core 0.1.0. In fact, the multi-threading Patoshi was using wasnt integrated into Bitcoins mining script until 2010, Lerner told CoinDesk.

So, assuming Patoshi is Satoshi, why did Bitcoins founder not bake multi-threading into Bitcoins initial client release? Looking back to Lerners second-most recent findings may help us find the answer.

In June, Lerner pointed out that Patoshi reduced his hashrate in several steps during the first year and that its likely he turned off his miner for five-minute intervals each time he mined a new block. Patoshi took these measures, Lerner posits, to foster healthy competition and to make sure he didnt hog all the new blocks.

Conversely, he may have multi-threaded in the early days to keep the network ticking, picking up the slack when blocks were not being mined on schedule, Lerner told CoinDesk.

I support Lopps thesis that Patoshi cared about the network security much more than the number of bitcoins mined. It seems he turned his miners only when the network wasnt producing blocks at the expected rate. It was also proven by OrganOfCorti that Patoshi reduced his hashrate on purpose on several occasions to let others mine more blocks, when he thought there was enough diversity of miners.

I conclude that the most plausible explanation is that he was protecting the network.

On Twitter Casa CTO Jameson Lopp pushed back against the notion that Satoshis mining advantage was leveraged in self-interest. Quite the contrary, Satoshis more sophisticated mining process likely protected the network in the early days when there were so few miners actively participating in block propagation. With so few actors on the network, Satoshi could have been playing watchdog to make sure the network was strong enough to sustain itself before allowing his mining activity to wane.

Lessons learned

Lerner agrees with this explanation, calling his recent research life changing for the understanding it has given him of Bitcoins founder and its earliest users.

The research on how Patoshi proceeded to decentralize Bitcoin taught me a lot about ideals. The first Bitcoiners were believers who cared a lot less about money that we all care now. Most of them mined to help the project see how far it could grow against all odds. Most of them donated bitcoins, received and paid with bitcoin to show its potential and never bother to speculate. Some of them mined just for fun.

The fun may be done for Lerner, though, who told CoinDesk that his years-long weekend project is drawing to a close with his recent findings. Hell instead turn his energy toward the work RSK and IOV are conducting in the realm of Bitcoin sidechains.

As for other outstanding mysteries his research didnt solve like the double-helix pattern Patoshis hashing strategy created from blocks 1400 to 1916 hell leave these to the community of gumshoes who have contributed to the Patoshi research thus far.

Because for Lerner, perhaps the most pressing question and the one that caused so much pushback when his research began has been answered: namely, why Satoshi mined so many coins in the early days, and why he had to use techniques that werent available to the rest of the fledgling Bitcoin community.

I think the discovery of the Patoshi pattern led to a more coherent conception of Satoshi as the person or group that was prepared to guard the network against 51% attacks during the first years, focusing on the long-term sustainability of the project and without selfish economic interest nor trading activity.

See the original post:
Protection Over Profit: What Early Mining Patterns Suggest About Bitcoins Inventor - CoinDesk - CoinDesk

Kraken's head of intelligence, Thomas Perfumo, and XBTO Group's head of trading, Paul Eisma, weigh ... [+] in on bitcoin's price falling if stocks crash again, as occurred in March.

Bitcoin (BTC) crashed in price largely alongside the stock market back in March 2020 around Covid-19 pandemic concerns and prevention measures. If stocks crash again, will bitcoin follow? The answer is part of a mixed bag, according to Thomas Perfumo, head of intelligence for crypto exchange Kraken, and Paul Eisma, head of trading at XBTO Group.

Weve observed a high positive correlation between S&P 500 and bitcoin this year, Perfumo told me via email correspondence on August 24, pointing toward bitcoins price action traveling in step with a popular mainstream financial market barometer. Longer-term, I dont see a stock market crash impairing the value of bitcoin, much like companies arent strictly impaired because their stock price goes down.

[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]

In March, the U.S. braced for the impact of the Covid-19 pandemic, putting restrictive measures in place in an attempt to slow the viral spread. In turn, the U.S. stock market suffered its harshest fall in more than 20 years. Between March 4 and 23, the S&P 500 fell approximately 30%a drastic decline for mainstream financial markets, based on TradingView.com data.

Bitcoin also spiraled downward in similar fashion, dropping around 58% between March 7 and 13. Although BTC often sees price moves much larger than mainstream markets, accounting for the asset dropping nearly twice as much as the S&P 500 at their bottoms, the two clearly fell in price around the same time period.

Bitcoin posted a fast recovery, however, bouncing approximately 162% in the 55 days following its crash, while the S&P 500 only bounced about 47% in 77 days.

Compared To Other Markets

What weve seen since March is outperformance in several safe haven, assets like gold, bitcoin, and even bonds, where equities havent matched, Perfumo explained. In equities markets specifically, the largest companies like AAPL, AMZN, GOOG, etc. are key contributors to the overall market performance, he said, referencing the stock ticker symbols for Apple AAPL , Amazon AMZN and Alphabet Inc. GOOGL , Googles parent company.

In fact, I think if you removed the performance attributable to the top ten constituents in many large indices, you may actually see more pain than the headline suggests, he added, referencing struggles faced by many smaller companies.

The crypto industry largely views bitcoin as a store of value asset, often compared to gold. As Perfumo noted, people view such assets as a hedge to stocks, cash, etc. Bitcoins place as a hedge independent from mainstream markets, however, still holds as a debatable concept, as seen in its correlation to other markets at times.

Correlation Metrics

Over at crypto finance company XBTO, Eisma has noticed mainstream market prices traveling in line with bitcoin. The recent correlation of equities and bitcoin is alarming, Eisma told me in an August 25 email. Correlations are stochastic, extremely challenging to model and even more difficult to trade.

Eisma pointed toward a measurement from data company Coin Metrics for tracking bitcoins price correlation with the S&P 500, while using the Pearson setting, which essentially reveals how similarly two things act. Looking over 2019, applying the 90-day setting, Eisma cited mixed results, seeing positive correlation between BTC and the S&P 500 for the first several months of the year, followed by negative correlation.

Correlations in 2020 were insignificant at around +1%, until the violentBlack Thursday/Friday the 13th selloff in March, when BTC sold off along with equites, driving correlations to approximately +50%, he said referencing bitcoins dramatic fall amid Covid-19 fears.

As explained simply in an April 2020 article from blockchain industry media and data site LongHash: A coefficient of 1 indicates perfect correlation, a coefficient of 0 means there is effectively no correlation, and a coefficient of -1 points to a perfectly inverse correlation.

The subsequent rally in risk and similar uptrend in BTC has stabilized correlations in the +35% to +45% range, Eisma said pointing out continued similar price action between the two assets. If the current rally in BTC occurred with flat to downwards equity/risk markets, this correlation dynamic would be less worrying, and the price action very bullish for BTC, he added.

Amid Government Economic Actions

During the majority of 2020 so far, governments have taken several actions, including money printing and a $2 trillion stimulus package, in an effort to solve the economic issues brought on by the Covid-19 pandemic. According to Eisma, such actions make bitcoin look appealing, given its proposed role as a store of value or hedge asset. Empirically so far this year though, when large equity drawdowns occur, BTC sells off, he added, which shows the asset is not acting as a hedge against traditional markets.

Eisma added:

There is discussion in the community about whether BTC is a risk asset or digital gold.At times bitcoin seems to have characteristics of both, but it cannot be bothor perhaps it's some new hybrid asset.Ultimately the characteristics that BTC provides to a portfolio are critical in driving institutional and retail investment.

Bitcoin has come a long way since its inception more than a decade ago. The asset has achieved a sizable audience of proponents, many of which lobby it as a store of value. Some parties still do not like the asset, however, such as financial commentator Peter Schiff, who prefers gold over bitcoin.

Disclaimer: I actively trade cryptocurrencies, as well as hold a small amount of BTC, ETH, LTC, XMR, NEO, ZEC, BEAM, BCH, DASH, LINK, XTZ andvarious insignificant other altcoin positions.

Read the rest here:
Will Bitcoin Dump If Stocks Have Another COVID-19-Scale Crash? - Forbes

Hacktivist Bitcoin developer Amir Taaki took aim at Ethereum co-founder Vitalik Buterin on Twitter recently for essentially writing off smart contracts inventor Nick Szabo as a right-wing crank.

Taaki wrote that this sort of attitude was typical of an Eth[ereum] culture which is about sparkling burner parties, privileged digital nomads, microdosing LSD, sex orgies and social-justice / vague doing-good.

Pretty much everyone had the same initial thought: Why arent I getting invited to these parties?

But Taakis comments also highlighted the political divisions between Ethereum and Bitcoin. Is it really as simple as Bitcoiners lean to the right and Ethereans lean to the left?

You can make up your own mind about Nick Szabos views, thanks to this obsessively curated list of his tweets. Buterin characterizes Szabos utterances as bad faith arguing and incholate yelling. He appears to regret naming a denomination of Ethereum after Szabo.

But Taaki, who is British-Iranian, took exception to white-leftypol Ethereans canceling Szabo because he doesnt fit their worldview and wrote in a tweet that they reminded him of white left (fake socialists) on an anti-rascist crusade.

Its neo-colonialist white saviour attitude, he wrote. Eth is exactly this.

To be fair, Ether isnt exactly like that, but there are definitely some elements that might lead you to draw that conclusion. To take one example, the man sometimes referred to as Ethereums chief economic thinker is self-proclaimed social liberal radical Glen Weyl, who founded RadicalxChange. Thats the sort of progressive, nonprofit outfit that thinks the No. 1 most crucial thing to inform new visitors to its website is not what it actually does some sort of think-tank stuff? but that it stands with the social justice movements Black Lives Matters and Global Pride. Buterin is a big fan of Weyls and sits on the board of RadicalxChange. The pair have held lengthy email exchanges about his societal engineering ideas, which include imposing a tax to penalize using standard white English or taxing masculinity to subsidize femininity. A proponent of a Universal Basic Income and quadratic voting, Weyl gave a speech at Ethereums DevCon that he described as a rally cry against extreme individualism and capitalism. At its conclusion, he explicitly asked for questions from women and minority groups first. Of course, Ethereum conferences are just as full of nerdy white men as the rest of crypto, but at least the first guy to ask a question had the good grace to apologize for that fact.

Try that kind of left-wing malarky at a meet-up for hardcore Bitcoiners, though, and you could bring a firestorm down on your head, as the author of Mastering Bitcoin: Unlocking Digital Cryptocurrencies, Andreas M. Antonopolous, found out when he asked his audience for a few suggestions of podcasts he could appear on that werent the stereotypical white, male, finance-focused podcasters he talks to endlessly, as he wanted to reach out to a broader audience.

This seemingly innocuous request outraged his fanbase (which may have some crossover with the Gamergate crowd) and caused a Twitter storm, with users complaining about how Bitcoin doesnt care about identity politics and getting their noses out of joint at his outrageous rejection of meritocracy by trying to chat to some different people. Even Bitcoin icon Hodlonaut questioned his focus on race and gender.

Antonopolous was unrepentant. I will not apologize for being an SJW, he wrote, characterizing the backlash as: A lot of whining because I didnt allow the implicit bias to drive 90% of my podcast interviews but only 75-80%. Oh the horror.

Bitcoiners and Ethereans clearly have differences, which is why Crypto Twitter is beset with largely pointless debates about supply gate and pre-mined coin scams. When Peter McCormack, the host of What Bitcoin Did, asked his followers What is BTC v ETH really about? influencer American Hodl summed it up as: Liberals do Ethereum and Conservatives do Bitcoin.

Its not quite that simple of course: Plenty of left-wing people are into Bitcoin, and plenty of right-wing people like Ether. Even Weyl cant be easily boxed into the left or the right, as he somehow manages to combine his love of socialism with a love of right-wing libertarian hero Ayn Rand. As Bitcoin.com founder Roger Ver told Cointelegraph Magazine: Both camps are so big now that there are people from every political persuasion involved now.And politics understandably comes a distant second when theres money to be made. As DeFi influencer Degen Spartan said when explaining that hes not a Bitcoin maximalist or an Ethereum maximalist: Im a profit Maxi.

But still, there is a widespread perception that those with conservative or right-wing ideas are more drawn to Bitcoin and those of a more progressive bent support Team Ethereum. A CoinDesk survey of 1,200 crypto users in 2018 lent weight to this idea, finding that 55% of Ethereans tended left, while 55% of Bitcoiners tended Right. A further 3% of Bitcoiners claimed to be nihilists, which may explain all those Pepe the Frog crypto edgelords on 4chan.

(As an interesting aside, the more hard currency focused the coin, the more right wing, with Monero coming in at 57% right wing, Bitcoin Cash (63%) and Litecoin (69%). The DASH guys must have cupboards full of MAGA hats and Tiki Torches because 78% of them are on the right.)

Quantum Economics founder Mati Greenspan says there are philosophical differences between the two leading cryptocurrency projects that help explain these tendencies.

It makes sense given the nature of what the coins do, he said. I would assume that most people that are into Bitcoin are people who advocate for less government intervention and especially less government intervention in money simply because thats what Bitcoin was built for.

As far as Ethereum is concerned, that has many more practical applications that dont necessarily have to do with governments or banking or even finance in general. It appeals to anyone whos into technology.

Greenspan cautions that hes not basing his views on hard data but says that from what hes observed: People who prefer Bitcoin are the type of people who are kind of set in their ways, or that are of a strong mind. Whereas people who use Ethereum and other altcoins are generally going to be more people who are more open to new ideas.

Professor David Golumbia is the author of The Politics of Bitcoin: Software as Right-Wing Extremism. In the polemic, he argues that not only was Bitcoin borne out of the right-wing libertarian culture of the cypherpunks but that the technology itself is inherently right wing.

Theres little doubt that key figures in Bitcoins prehistory such as Eric Hughes, Timothy C. May and John Gilmore were staunch libertarians. They opposed big government and taxation and worried about privacy, the rise of the surveillance state and freedom of speech.

Golumbia says the ideas of right-wing Austrian economist Murray Rothbard, who coined the political philosophy anarcho-capitalism, were also very influential to Bitcoins early days. That extremely libertarian form of politics that advocates for the elimination of centralized states in favor of self-ownership, private property and laissez-faire style free markets obviously will sound familiar to anyone who has been around Bitcoiners.

It was born out of anarcho-capitalism, Golumbia says of Bitcoin. Rothbard has these ideas that there is a single thing called the State whose only point of existence is to enslave people. The only free individual is somebody who is free of government. And these people believed and they still believe that it was possible to use encryption technology to hide oneself from the state.

In Golumbias view, Bitcoin was designed to become the currency of this new realm, money outside of the control of the state. (Golumbias theory runs into trouble attributing this political ideology to Satoshi Nakamoto directly, and he barely mentions him in our hour-long chat.)

Needless to say, Golumbia is not a fan of the whole culture. He calls May the author of the Crypto Anarchist Manifesto a pretty racist, sexist, very disturbing guy and paints a portrait of the cypherpunk mailing list as a sort of alt-right techie version of the Tea Party.

It is really loud and vicious when you read it, full of hate directed at a lot of people. It intersects with a lot of other anti-government movements we have in the world, he said.

Needless to say, this view is highly contested. McCormack called it insulting when I described it to him.

They were certainly paranoid, and I think legitimately paranoid, said McCormack. But I wouldnt say right wing at all. I would almost imagine a lot of them apolitical. They just wanted to build a better world.

I consider them a group of freedom fighters who recognize the overreach of the state, the risks associated with lack of privacy, increases in surveillance, and abuse of the money system by corrupt politicians. They wanted to build tools and technologies to free themselves.

I think if anything, theyre a group of fucking heroes.

Bitcoin.com founder Roger Ver said that when he got involved in 2011, the early Bitcoiners were all libertarians with a strong belief in free markets. He doesnt see such views as right wing. Just read about the thoughts of early Bitcoiners like myself, Ross Ulbricht, Gavin Andresen, and others, he said. We were all libertarians, not conservatives or right-wingers.

Voluntaryism which is an offshoot of anarcho-capitalism was what motivated me and others to get involved and promote Bitcoin early on.

Bitcoin was made up and promoted by a bunch of anarcho-capitalists originally. Later, its development community was taken over by a bunch of blue-haired San Francisco leftists types. Most of the AnCaps have moved on to coins like BCH, or ETH.

Kain Warwick, the founder of Ethereum-based DeFi protocol Synthetix, said that no one involved in the early days of Bitcoin could correctly be called a conservative.

You couldnt be a conservative in the sense of trying to maintain the status quo in the legacy financial system. You had to see some problem that you thought needed to be solved in order for Bitcoin to make sense to you, he said.

Meanwhile, in San Francisco, those blue-haired leftists were gaining numbers. Buterin describes two strands of political thought growing together in Bitcoins early days. In the crypto space, as early as in 2010 or 2012, there were a lot of people interested in libertarianism, and a lot of people interested in socialism, Buterin said. There was this kind of idealistic energy.

While the two strands can be reconciled, Ethereans approach to rapid technological progress and evolving codebases is much more difficult to reconcile with Bitcoiners who are invested in protecting the fundamental properties of Bitcoin. successfully merge. As Bitcoins ideology around hard money, fixed supply, decentralization and security became stronger, the Bitcoin community became more resistant to changes to its fundamental properties. Something Ver discovered during the damaging block size debate that led to the creation of Bitcoin Cash.

Bitcoin Magazine co-founder Buterin also ran up against an unwillingness to experiment when he argued in 2013 that Bitcoin needed a scripting language for application development. When he failed to get support, he launched Ethereum in January 2014.

Viewed this way, the BitcoinEthereum battle is not so much Left vs. Right, but Progress vs. Stability. If, as Warwick said, no one in the early days of Bitcoin could be conservatives, then have Bitcoiners now become the new conservatives set on maintaining the crypto-financial order?

Jonathan Haidt, in The Righteous Mind: Why Good People Are Divided by Politics and Religion, makes the point that Liberals and Conservatives are both largely correct about their central concerns they just prioritize different values and dont understand where the other side is coming from. The same is probably true for Bitcoin and Ethereum. For many Bitcoiners, its all about hard money, stability, immutability and security, so theyre unwilling to risk whats been built. Why improve on perfection? That makes Ethereum a fail. But for many Ethereans, its all about experimenting in the name of making technological progress, which makes Bitcoin a fail. If a few things get broken along the way like the DAO hack, ICO scammers and DeFi smart contract bugs thats just the cost of progress.

Id rather avoid left and right wing, said Bitcoiner McCormack. Id rather say Bitcoin is conservative; therefore, its likely to attract more people with conservative viewpoints.

Move slowly. Dont fuck this up. This is the best money weve ever had. Its slowly, slowly simple, simple.

And yes, Ethereum you could argue is McCormack clearly couldnt bring himself to call Ethereum more progressive. Instead he said: I think Ethereum people just want to go out and experiment, kind of like scientists, experimental technologists. They want to do a lot more with it.

Warwick is one of those scientists who is comfortable with change. Synthetix began life as a stablecoin project, morphed into synthetic derivatives, and continues to reinvent itself once or twice a year as new ideas come along.

He attempted to integrate Bitcoin with online payments in 2012 but saw the technology as a starting point, rather than a finished product.

People who wanted to opt out of the legacy financial system, a lot of those people, you know, ended up in Bitcoin, he said. And then people who wanted to kind of extend the power of Bitcoin and extend the potential of what could be built ended up in Ethereum. If you didnt end up in Ethereum, almost by definition, you were someone who was kind of less open to innovation and more conservative.

Greenspan makes the point that Bitcoin is also much bigger, which limits its ability to turn on a dime.

Bitcoin is a whale compared to Ethereum, which is more like a fly but you know, flies can move a lot faster than whales can, he said. They can do different things. Sometimes theyll keep running into a window in the hope of finding an exit, whereas whales are pretty predictable. Theyre not going to suddenly turn around and go the other way.

Warwick believes that the Ethereum community embraces more progressive politics.

The Crypto Twitter that Im in is very deep Ethereum Twitter, he explained. There is an awareness of societal issues outside of just financial infrastructure. I think that people are much more open to these things and some questioning of the structure of society and how its evolved, he said.

This political bent shares some similarities with Silicon Valleys left-wing, utopian politics, where technology is seen as something that can kind of solve all of the worlds problems.

I am very sympathetic to that view, Warwick said. One of the interesting things about Ethereum is this idea of restructuring the financial infrastructure of the world to make it more open and transparent, and lower barriers to entry. I think its really powerful. Technological progress could be one of the biggest levers that weve ever seen in terms of improving the world. So, I still am hopeful and optimistic about technological progress.Which isnt to say many Bitcoiners dont also dream of a better and brighter future due to Bitcoins innate properties. But theres also considerable focus on Bitcoin as an insurance policy against hyperinflation and the collapse of fiat, which is an altogether more dystopian future.

McCormack has a much less positive view of Ethereums grand ambitions. I think theres a lot more interference on the left, a lot more desire for rules about what you can, you cant do, for that kind of stupid equality of outcome, he said. I think, I think you may find that a little bit of that in the Bitcoin versus Ethereum thing. I have noticed that Vitalik tends to express more socialist opinions, which is perhaps why Ethereums monetary policy is looser than that of Bitcoin.

Having an undisputed leader like Buterin in a decentralized project also sees Ethereum accused of top-down control and centralized planning. Bitcoin maximalist Samson Mow from Blockstream attacked Buterin on McCormacks podcast in mid-August for saying years ago that the internet of money should not cost five cents a transaction.That is very anti-free market, Mow claimed. Thats a Soviet-type economic event. Thats a central planning agency that sets the levels of production wages and prices of goods, whereas I think most Bitcoiners are very free market and capitalists, which is, you know, transactions will cost what they cost.On HackerNoon, journalist Kay Kurokawa wrote of Ethereum that its leftist tendency is made clear by the grandiose plans of its developers and the actions it has taken to resolve difficult situations such as the DAO hack. Their proposed move to proof of stake will certainly move Ethereum even further to the left.But for all of this criticism of Ethereums politics, its not a particularly ideological project. McCormack himself made this point at the end of the Buterin/Samson Mow debate.

For me, I think whats really missing in Ethereum is a strong philosophical backbone, he said. And thats what Bitcoin has, and why we dont have yield farming and YAMs and all this bullshit existing on Bitcoin because its very simple and just focused on one thing, which is what I like about it.

In the end, what unites people in the blockchain world is arguably more important than what divides us. One thing that almost everyone interviewed for this piece agreed on was that there continues to be a wide streak of libertarianism running through crypto culture. Although what is known as Libertarianism is most closely associated these days with guns and freedom lovers on the American right, there have been plenty of left-wing libertarian movements over the years from the peace and love hippies to anti-authoritarian punk rockers. Libertarianism is probably best described as a preference thats at the opposite end of the scale to authoritarianism.

I think a lot of the people who are building the space truly believe that there are fundamental flaws in the status quo and want to fix them, and I think that most of the time, or quite often, that does come from some sense of anti-authoritarianism or being against the establishment, said Warwick.

At a deeper level, anti-authoritarianism seems baked into the design of blockchain itself. Authoritarian elements on the far left and the far right might want to impose their crackpot ideologies by force, but that cant happen with a genuinely decentralized blockchain project because there is no central authority able to impose it.

Decentralization is a libertarian concept by nature. For sure, said Greenspan.

Visit link:
Is Ethereum left and Bitcoin right? Cointelegraph Magazine - Cointelegraph

The CEO of financial advisory firm Devere Group believes that 2020 will be a breakout year for bitcoin, fueled by the U.S. presidential election and the weak dollar. Amid political uncertainty and the Feds new inflation policy, investors will pile into safe-haven assets not tied to any specific country, such as bitcoin.

Devere Group CEO Nigel Green predicted last week that the U.S. presidential election and a weak dollar will drive the price of bitcoin for the rest of 2020. Following the Federal Reserves policy shift on inflation, he also warned about investing in the stock market. Devere Group, established by Green in 2002, describes itself as one of the worlds leading independent financial advisory organizations with more than $10 billion under advice from 80,000 clients in 100 countries.

Noting that Bitcoin is already one of the best-performing assets of the year, up around 70% year-to-date, Green asserted, We can expect the worlds largest cryptocurrency to be further fuelled for the rest of 2020 by the U.S. presidential election and the weakness of the U.S. dollar, which will serve as high-octane price drivers. The price of bitcoin stands at $11,613 at the time of writing.

A U.S. presidential election always stirs uncertainty but 2020 is seen by many as particularly important as not only will whoever wins be the CEO of the worlds largest economy, they will be in that role as the world economically readjusts following the global fallout of coronavirus, Green opined. As uncertainty heightens, investors will pile into safe-haven assets, in particular those not tied to any specific country, such as bitcoin and gold.

Recently, news.Bitcoin.com also reported that analyst and consultant Dan Popescu predicted how the outcome of the November presidential election could lead to a dollar collapse and a boost in the gold market. While the 2020 presidential election polls currently show Joe Biden in the lead, the analyst explained that the U.S. dollar stands to lose regardless of whoever wins the election and becomes the next president of the United States.

According to Green, Bitcoin is currently realising its reputation as a form of digital gold. Up to now, the precious metal has been perceived as the ultimate safe-haven asset, but bitcoin which shares its key characteristics of being a store of value and scarcity could potentially in the future knock gold from its long-held top spot as the world becomes driven by the tech revolution Decentralized, non-sovereign, secure digital currencies, including bitcoin, will become more attractive to investors as they will offer a hedge against turbulence in traditional markets.

Analysts have been questioning golds safe-haven status and Goldman Sachs recently warned that the U.S. dollar risks losing its status as the worlds reserve currency.

The Devere Group CEO added, Printing of historic sums of helicopter money thats pushed into the financial system has devalued the dollar and prompted inflation fears, emphasizing:

You cant just print bitcoin.

On Thursday, the Federal Reserve announced a major shift in policy to push up inflation. Many investors will pile into equities, Green noted, warning of the lack of balance in the stock markets. This will add fuel to global equities which are already on fire, Green described, adding that In this climate, holding bonds and sitting on cash will simply not provide the returns investors seek.

The market has been expecting this inflation policy announcement by the Fed, prompting some companies to move cash reserves into bitcoin to hedge against inflation. One of them is the Nasdaq-listed Microstrategy, which moved $250 million of its cash reserves into bitcoin. The Feds new policy is also expected to boost the price of bitcoin, which some predict could be driven past $500K.

As for the U.S. dollar, Green continued: The greenback could be in for a short-term boost, but in the longer term there are expectations its on a downward trajectory and that it could ultimately lose its global reserves status and this environment will provide a powerful boost for the price of bitcoin. The CEO concluded:

This explosive combination together with a growing number of millennials and Gen Z investors moving into digital assets could provide the perfect landscape for a multi-year bull market History will show that 2020 was a breakout year for bitcoin.

Do you agree with Green? Let us know in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons, CNN

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

View original post here:
Bitcoin Will Break Out This Year, Says Devere CEO | News - Bitcoin News

Bitcoin mining is big business. In just ten years, bitcoin mining, where bitcoin tokens are rewarded to those that maintain the bitcoin network, has morphed from a bedroom-based, money-making hobby into a billion dollar industry.

Digital Currency Group, a venture capital company that owns digital currency investing firm Grayscale, digital currency prime broker Genesis, and bitcoin and crypto news outlet Coindesk, this week unveiled its new subsidiary, Foundryand will invest $100 million into mining bitcoin in North America over coming months.

With bitcoin miners in China dominating the network, the move is expected to go some way to rebalance the distribution of those that maintain the bitcoin networkthough Foundry chief executive Mike Colyer doesn't see China as "a major threat" to bitcoin, despite recent warnings from some in the crypto industry the Chinese government could "effectively block or reverse [bitcoin] transactions."

China accounts for around 65% of the bitcoin network computing power, but Digital Currency Group is ... [+] investing $100 million in bitcoin mining in North America to change that.

"Over the past three or four years the story has been on China dominating [bitcoin mining]," Colyer said, speaking over the phone.

In May, research from University of Cambridge revealed China, where bitcoin mining pools have prospered thanks to cheap, renewable electricity, accounts for 65% of the bitcoin network's computing power, with the U.S. the second-largest bitcoin mining country, contributing 7%.

"I personally don't view that as a major threat to bitcoin," Colyer said. "The economic investment that [an attack on bitcoin] would require is immense."

It's thought it would require almost $700,000 per hour to launch an attack on the bitcoin network, according to calculations made by Crypto51.

Last week, the executive chairman of payments network provider Ripple, Chris Larsen, warned in an opinion piece published in The Hill that as the majority of bitcoin network computing power is located in China, the "Chinese government has the majority needed to wield control over those protocols and can effectively block or reverse transactions."

Others in the bitcoin and cryptocurrency community have dismissed the idea.

"Just because there are mining operations in China, it does not mean that hardware can be seized," Samson Mow, chief strategy officer at bitcoin development company Blockstream, told the BTC Times.

Meanwhile, Colyer expects interest in bitcoin mining, which is currently driven by energy and infrastructure costs, to surge over the next three years.

"This isn't about the U.S. dominating the hash rate, that will never happen," Colyer said. "There are going to be nation states that want to participate [in bitcoin mining], especially those countries that have access to low-cost energy infrastructure and a great investment environment."

Digital Currency Group is betting that Foundry, which it says it "quietly" formed last year, can succeed where other bitcoin mining hopefuls have failed.

China-based bitcoin mining giant Bitmain had planned to create hundreds of mining jobs in Rockdale, Texas, in 2018 before abandoning the idea.

Just this year, Layer1announced it raised $50 million to build a bitcoin mining operation in the U.S. but has recently been accused of misleading investors about the makeup of its "founding team."

More here:
China Is No Threat To Bitcoin, Promises Foundry CEO After $100 Million Bitcoin Mining Bet - Forbes

Bitcoin has struggled through August after leaping higher at the end of July.

The bitcoin price has repeatedly tried and failed to gain a footing over $12,000 per bitcoin but is currently stuck trading around $11,800.

Now, as a number of high-profile investors turn to bitcoin amid unprecedented coronavirus stimulus spending, the biggest bitcoin and crypto wallet apps, including Coinbase, Blockchain Wallet, Crypto.com, BRD, and Binance, saw record combined downloads in Julysuggesting to some bitcoin is "in the early stages of another bull market."

Downloads and users of bitcoin and cryptocurrency apps have surged in recent months, with some of ... [+] the most popular, including Coinbase, hitting all-time highs.

In July, the top 10 crypto wallet apps increased net new installs around 81% year-on-year, according to research carried out by app data website Apptopia.

"At the start of quarantine, we noticed an uptick in new installs for some of these apps, but didn't think much of it because this market tends to be quite volatile anyway," Apptopias Madeline Lenahan wrote in a blog post alongside the data, adding it "looks like the growth we saw was, in fact, real and lasting."

Coronavirus pandemic lockdowns as well as the growing popularity of bitcoin and cryptocurrency in emerging markets were found to be apparently driving the increase in bitcoin and crypto wallet downloads.

The bitcoin price surge at the end of July, taking bitcoin to its highest level since June last year, triggered a bitcoin retail trading boom with exchanges around the world reporting sky-high bitcoin trading volume.

The sudden wave of fresh interest in bitcoin from both institutional and retail investors has caused some to make parallels to bitcoin's massive 2017 bull run that saw the bitcoin price soar from under $1,000 per bitcoin to around $20,000 in under 12 months.

Some of the most popular bitcoin and cryptocurrecy wallet apps have surged in popularity over recent ... [+] months, according to Apptopia research.

"It appears to many that we're in the early stages of another bull market for bitcoin, this time against a macroeconomic backdrop that seems almost scripted for bitcoin to shine," Cory Klippsten, tech investor and founder of bitcoin buying app Swan Bitcoin, said via Telegram, pointing to the big new user percentage increases seen by a "new crop of bitcoin-only services like Coinfloor in the UK, Bitaroo in Australia," and his own Swan Bitcoin in the U.S. which are "all seeing growth through the roof."

"No one can predict the future, but if the pattern of 4-year bitcoin market cycles continues, we're looking at a peak sometime around the end of 2021. More people are dipping their toes into bitcoin every day, and the ones that are already here are gaining conviction and buying more."

Read more here:
Bitcoin In The Early Stages Of A Bull Market, Crypto Wallet Data Reveals - Forbes

Venezuelans have become increasingly interested in cryptocurrency as their country faces dire economic crisis and hyperinflation, a new study by blockchain data analytics firm Chainalysis shows. The firms Global Crypto Adoption Index ranks Venezuela third as The country has reached one of the highest rates of cryptocurrency usage in the world.

Chainalysis published its study of Venezuelas bitcoin usage Thursday, which is part of its upcoming 2020 Geography of Cryptocurrency Report.

Venezuela is suffering through one of the worst economic crises in modern history, with its national currency, the bolivar, becoming practically worthless, the firm wrote. Under these circumstances, cryptocurrency has taken on an important role in Venezuelas economy As the Venezuelan bolivar has lost value in the midst of hyperinflation, Venezuela has become one of the most active cryptocurrency trading countries on earth. The firm elaborated:

The country has reached one of the highest rates of cryptocurrency usage in the world, placing third on our Global Crypto Adoption Index, as many Venezuelans rely on cryptocurrency to receive remittances from abroad and preserve their savings against hyperinflation.

Most of the crypto activity in Venezuela is driven by peer-to-peer (P2P) exchange activity, specifically on Localbitcoins, Chainalysis noted. Venezuela is the third-most active country on the platform, or second-most active when we scale by the number of internet users and purchasing power parity per capita. Venezuela ranks 3rd for P2P trading volume in USD, after the U.S. and Russia. Venezuelans are also using Bitcoin.coms P2P marketplace to buy and sell bitcoin cash.

Chainalysis also discussed Venezuelas national cryptocurrency, the petro, launched by the countrys contested government, led by OFAC-sanctioned Nicolas Maduro and known for its corruption and human rights abuses. In May, the U.S. put a $15 million bounty on Maduro and charged a number of top Venezuelan government officials with narco-terrorism, corruption, drug trafficking and other criminal charges.

Superintendencia Nacional de Criptoactivos y Actividades Conexas (Sunacrip) is the regulator of crypto activities in Venezuela. So far, seven crypto exchanges have been licensed to trade the petro. According to the Maduro government, petro adoption has been rising significantly. Recently, 305 Venezuelan municipalities agreed to collect tax in petro.

One of the approved exchanges is Criptolago. According to financial intelligence provider Sayari, the exchange is owned by Venezuelas Zulia state, with the states governor, Omar Prieto, occupying a top management position. Prieto is a staunch Maduro ally who is personally under U.S. sanctions for refusal to deliver humanitarian aid, Chainalysis asserted.

Over the last year, Criptolago addresses received more than $380,000 worth of bitcoin over 3,916 transfers and sent more than $360,000 worth over 2,297 transfers. While the platforms transfer volume grew over 13x in the past year, it doesnt appear that Criptolago is helping the Venezuelans struggling most, the Chainalysis claims. The firm pointed out that crypto transactions worth $1,000 or more accounted for more than 75% of total transfer volume, but the average Venezuelan earns just 72 cents per day, meaning very few of them could afford such transfers. Furthermore, the overall number of transactions was under 1,000 per month.

An expert on Venezuela told the firm that Criptolagos transaction activity suggests the platform may be used primarily by individuals connected to the Maduro regime seeking to launder funds or move them out of Venezuela. Nonetheless, Chainalysis affirmed:

We do however, have a lot of anecdotal evidence that people in Venezuela have become increasingly interested in cryptocurrency.

That fits with our interviews of cryptocurrency experts on the ground in Latin America users not just in Venezuela, but in other countries facing harsh economic conditions, turn to cryptocurrency to preserve their savings in the face of monetary devaluation, the firm emphasized. News.Bitcoin.com has also reported on several crypto initiatives to help people in Venezuela.

What do you think about Venezuelas crypto adoption? Let us know in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons, Chainalysis

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Read the original post:
Venezuela's Bitcoin Use Soars Amid Hyperinflation: 3rd on Global Crypto Adoption Index | News - Bitcoin News

Bitcoin is back in the news. The virtual currency has nearly tripled over the past six months, but could there be further gains in store? To understand what could happen next, we need to look back at an earlier rally.

If you were following bitcoin in the second half of 2017, you might remember a rally that pushed the virtual currency higher by about 700% in less than six months. That rally is represented by the green dotted line.

In 2017, investors became obsessed with bitcoin, which formed a parabolic curve, shown in blue. A parabolic curve is the market's way of telling us that a trading instrument has become detached from reality. Bitcoin started June of 2017 trading near $2300, but by mid-December it had reached $19,600.

Parabolic moves are inherently unsustainable, and this one was no exception. By February, bitcoin had lost two-thirds of its value, falling back to $6000.

Fast forward to 2020. Bitcoin has formed a massive ascending triangle pattern. In order to break out of this formation, bitcoin needs to climb above $13,000, represented by the red dotted line.

The bottom line: Based on the sheer size of this pattern, if bitcoin can close above that $13,000 level, there is no serious resistance until the $19,000 area. In other words, if bitcoin breaks above $13,000, it could challenge its all-time highs.

Is there a stock, commodity, or currency that you'd like to see analyzed on Ponsi Charts? Feel free to leave a message in the comments section if you have a request.

Ed Ponsi is the managing director of Barchetta Capital Management, and is the author of three books for publisher Wiley Finance. A dynamic public speaker, Ed has made appearances around the world, in such diverse locations as Singapore, Dubai, London, and New York. For more information about Ed and his work, click here.

Read more here:
Is Bitcoin About to Explode? - TheStreet