Does Freedom of Speech Exist in Cryptocurrency Communities? – hackernoon.com

"A statement may be both true and dangerous. The previous sentence is such a statement." - David Friedman

Freedom of speech is a topic that many internet communities have struggled with over the last two decades. Cryptocurrency and blockchain communities, a major part of their raison d'etre being censorship resistance, are especially poised to value free speech very highly, and yet, over the last few years, the extremely rapid growth of these communities and the very high financial and social stakes involved have repeatedly tested the application and the limits of the concept.

In this post, I aim to disentangle some of the contradictions, and make a case what the norm of "free speech" really stands for.

A common, and in my own view frustrating, argument that I often hear is that "freedom of speech" is exclusively a legal restriction on what governments can act against, and has nothing to say regarding the actions of private entities such as corporations, privately-owned platforms, internet forums and conferences.

One of the larger examples of "private censorship" in cryptocurrency communities was the decision of Theymos, the moderator of the /r/bitcoin subreddit, to start heavily moderating the subreddit, forbidding arguments in favor of increasing the Bitcoin blockchain's transaction capacity via a hard fork.

Here is a timeline of the censorship as catalogued by John Blocke: https://medium.com/johnblocke/a-brief-and-incomplete-history-of-censorship-in-r-bitcoin-c85a290fe43

Here is Theymos's post defending his policies: https://www.reddit.com/r/Bitcoin/comments/3h9cq4/its_time_for_a_break_about_the_recent_mess/, including the now infamous line "If 90% of /r/Bitcoin users find these policies to be intolerable, then I want these 90% of /r/Bitcoin users to leave".

A common strategy used by defenders of Theymos's censorship was to say that heavy-handed moderation is okay because /r/bitcoin is "a private forum" owned by Theymos, and so he has the right to do whatever he wants in it; those who dislike it should move to other forums:

And it's true that Theymos has not broken any laws by moderating his forum in this way. But to most people, it's clear that there is still some kind of free speech violation going on. So what gives? First of all, it's crucially important to recognize that freedom of speech is not just a law in some countries. It's also a social principle.

And the underlying goal of the social principle is the same as the underlying goal of the law: to foster an environment where the ideas that win are ideas that are good, rather than just ideas that happen to be favored by people in a position of power. And governmental power is not the only kind of power that we need to protect from; there is also a corporation's power to fire someone, an internet forum moderator's power to delete almost every post in a discussion thread, and many other kinds of power hard and soft.

So what is the underlying social principle here? Quoting Eliezer Yudkowsky:

Slatestarcodex elaborates:

That said, sometimes there is a rationale for "safe spaces" where people who, for whatever reason, just don't want to deal with arguments of a particular type, can congregate and where those arguments actually do get silenced. Perhaps the most innocuous of all is spaces like ethresear.ch where posts get silenced just for being "off topic" to keep the discussion focused. But there's also a dark side to the concept of "safe spaces"; as Ken White writes:

Aha. So making your own safe space off in a corner is totally fine, but there is also this concept of a "public space", and trying to turn a public space into a safe space for one particular special interest is wrong. So what is a "public space"? It's definitely clear that a public space is not just "a space owned and/or run by a government"; the concept of privately owned public spaces is a well-established one.

This is true even informally: it's a common moral intuition, for example, that it's less bad for a private individual to commit violations such as discriminating against races and genders than it is for, say, a shopping mall to do the same. In the case or the /r/bitcoin subreddit, one can make the case, regardless of who technically owns the top moderator position in the subreddit, that the subreddit very much is a public space. A few arguments particularly stand out:

If, instead, Theymos had created a subreddit called /r/bitcoinsmallblockers, and explicitly said that it was a curated space for small block proponents and attempting to instigate controversial hard forks was not welcome, then it seems likely that very few people would have seen anything wrong about this.

They would have opposed his ideology, but few (at least in blockchain communities) would try to claim that it's improper for people with ideologies opposed to their own to have spaces for internal discussion. But back in reality, Theymos tried to "annex a public space and demand that people within the space confirm to his private norms", and so we have the Bitcoin community block size schism, a highly acrimonious fork and chain split, and now a cold peace between Bitcoin and Bitcoin Cash.

About a year ago at Deconomy I publicly shouted down Craig Wright, a scammer claiming to be Satoshi Nakamoto, finishing my explanation of why the things he says make no sense with the question "why is this fraud allowed to speak at this conference?"

Of course, Craig Wright's partisans replied back with.... accusations of censorship:

Did I try to "silence" Craig Wright? I would argue, no. One could argue that this is because "Deconomy is not a public space", but I think the much better argument is that a conference is fundamentally different from an internet forum.

An internet forum can actually try to be a fully neutral medium for discussion where anything goes; a conference, on the other hand, is by its very nature a highly curated list of presentations, allocating a limited number of speaking slots and actively channeling a large amount of attention to those lucky enough to get a chance to speak. A conference is an editorial act by the organizers, saying "here are some ideas and views that we think people really should be exposed to and hear".

Every conference "censors" almost every viewpoint because there's not enough space to give them all a chance to speak, and this is inherent to the format; so raising an objection to a conference's judgement in making its selections is absolutely a legitimate act.

This extends to other kinds of selective platforms. Online platforms such as Facebook, Twitter and Youtube already engage in active selection through algorithms that influence what people are more likely to be recommended. Typically, they do this for selfish reasons, setting up their algorithms to maximize "engagement" with their platform, often with unintended byproducts like promoting flat earth conspiracy theories.

So given that these platforms are already engaging in (automated) selective presentation, it seems eminently reasonable to criticize them for not directing these same levers toward more pro-social objectives, or at the least pro-social objectives that all major reasonable political tribes agree on (eg. quality intellectual discourse).

Additionally, the "censorship" doesn't seriously block anyone's ability to learn Craig Wright's side of the story; you can just go visit their website, here you go: https://coingeek.com/. If someone is already operating a platform that makes editorial decisions, asking them to make such decisions with the same magnitude but with more pro-social criteria seems like a very reasonable thing to do.

A more recent example of this principle at work is the #DelistBSV ampaign, where some cryptocurrency exchanges, most famously Binance, removed support for trading BSV (the Bitcoin fork promoted by Craig Weight). Once again, many people, even reasonable people, accused this campaign of being an exercise in censorship, raising parallels to credit card companies blocking Wikileaks:

I personally have been a critic of the power wielded by centralized exchanges. Should I oppose #DelistBSV on free speech grounds? I would argue no, it's ok to support it, but this is definitely a much closer call.

Many #DelistBSV participants like Kraken are definitely not "anything-goes" platforms; they already make many editorial decisions about which currencies they accept and refuse. Kraken only accepts about a dozen currencies, so they are passively "censoring" almost everyone. Shapeshift supports more currencies but it does not support SPANK, or even KNC. So in these two cases, delisting BSV is more like reallocation of a scarce resource (attention/legitimacy) than it is censorship.

Binance is a bit different; it does accept a very large array of cryptocurrencies, adopting a philosophy much closer to anything-goes, and it does have a unique position as market leader with a lot of liquidity.

That said, one can argue two things in Binance's favor. First of all, censorship is retaliating against a truly malicious exercise of censorship on the part of core BSV community members when they threatened critics like Peter McCormack with legal letters (see Peter's response); in "anarchic" environments with large disagreements on what the norms are, "an eye for an eye" in-kind retaliation is one of the better social norms to have because it ensures that people only face punishments that they in some sense have through their own actions demonstrated they believe are legitimate.

Furthermore, the delistings won't make it that hard for people to buy or sell BSV; Coinex has said that they will not delist (and I would actually oppose second-tier "anything-goes" exchanges delisting). But the delistings do send a strong message of social condemnation of BSV, which is useful and needed. So there's a case to support all delistings so far, though on reflection, Binance refusing to delist "because freedom" would have also been not as unreasonable as it seems at first glance.

It's in general absolutely potentially reasonable to oppose the existence of a concentration of power, but support that concentration of power being used for purposes that you consider prosocial as long as that concentration exists; see Bryan Caplan's exposition on reconciling supporting open borders and also supporting anti-ebola restrictions for an example in a different field.

Opposing concentrations of power only requires that one believe those concentrations of power to be on balance harmful and abusive; it does not mean that one must oppose all things that those concentrations of power do.

If someone manages to make a completely permissionless cross-chain decentralized exchange that facilitates trade between any asset and any other asset, then being "listed" on the exchange would not send a social signal, because everyone is listed; and I would support such an exchange existing even if it supports trading BSV. The thing that I do support is BSV being removed from already exclusive positions that confer higher tiers of legitimacy than simple existence.

So to conclude: censorship in public spaces bad, even if the public spaces are non-governmental; censorship in genuinely private spaces (especially spaces that are not "defaults" for a broader community) can be okay; ostracizing projects with the goal and effect of denying access to them, bad; ostracizing projects with the goal and effect of denying them scarce legitimacy can be okay.

Originally published as On Free Speech with the WTFPL license

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We spoke to the UCL student who made 30,000 through cryptocurrency investments – The Tab

He made enough money to cover off his university debt in nine months

One student seems to have finessed student finances by investing his money into cryptocurrency. Thomas Bloor is a second-year Chemical Engineering student at UCL and by investing 3.5k in Bitcoin hes now made himself 30,000.

Bitcoin is a digital currency that forms part of an entirely decentralised payment system through which users can securely buy and store money electronically. Investing in Bitcoin and other cryptocurrencies, such as Ethereum, is something that has become increasingly popular ever since Bitcoin was first invented in 2009.

The Tab spoke to Thomas about how hes made his money and how hes done it alongside his degree.

Image via @thomasgeorgebloor

Thomas: My incentive for investing was my career aspirations. After university, I want to go into investment banking and I thought the best way to start that was by having my own portfolio. I was always told it was risky and difficult to trade in Bitcoin but I just saw this as another welcome challenge. I wanted to try and understand it for myself.

Thomas: I knew about bitcoin ever since the bull run of 2017, a period in which there is an upward trend in cryptocurrency markets for an extended period of time.

My own opportunity arose during the March crash in 2020: I had spent the previous week learning about the space and saw a fantastic buying opportunity. I remember investing for the first time specifically on the 23rd of March because I did it in commemoration of my late twin brother, who would have encouraged me to give it a go despite the risks. Im glad I did. With a halving event that followed in May that year (where the reward for mining Bitcoin transactions is cut in half), as well as the rumours of institutional investment, and the start of a new bull run, I got in at the perfect time!

Thomas: You need to stay up to date with news regarding the cryptocurrency space but it doesnt require a lot of knowledge or skill.

Thomas: I suppose, yes. With every investment, there is a risk of losing all of it. I believe bitcoin has matured into an asset similar to gold. It is more scarce and has a high demand. Since investment in cryptocurrency has increased though, the risks are much smaller now compared to five years ago.

Thomas: I consider large market capitalisation cryptocurrencies to be fairly stable. Im involved with mainly Bitcoin and Ethereum. Whilst Bitcoin is considered gold, Ethereum is considered oil. They arent stable in terms of a consistent price, but the volatility is another reason why traders and investors are attracted to it.

Thomas: Ethereum is the king of all coins. It is the second-largest cryptocurrency by market capitalisation and has a much greater potential for bigger returns. I wanted to maximise the possible returns on my investment so I decided to invest in Ethereum at the same time as Bitcoin in 2020. Ethereum 2.0 was also rumoured to release that year and, due to the fact that the market capitalisation was tiny compared to bitcoin, I saw it as the perfect opportunity.

Thomas: Last year, I used the money to pay off my student overdrafts. Since then, Ive used the money to invest and I havent regretted it. I turned my 3.5K into 30K in nine months without any real effort! I plan to keep converting my cryptocurrency into a stable coin and then into yield farming this will allow me to keep getting returns of up to 30% per year.

Thomas: My advice would be to do your research. There are a lot of negative articles about cryptocurrency investing. You need to be willing to make up your own opinion and work out what information to listen to.

A good platform to use for investing would be SwissBorg. With a premium account, the rewards are as high as 28% per year. No other bank offers interest rates comparable to this.

I would also encourage people who are just starting out to use my referral link. It gives you $100 in bitcoin if you deposit $50 or more, which is a really good head start.

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The Potential and Reality of Cryptocurrency in Gaming – Wales247

Many trends keep coming up to redefine the gaming industry. Most of them are due to the continuous advancement in technology and the need to meet new demands of an ever-evolving market. Various sectors are always cautious not to accept those changes fast because they dont know their future impact.

Others also wait to see how they will impact the industries that are quick to adopt them. In short, they fear taking risks because they know that risk is mostly associated with losses. However, thats a different case in the casino industry.

We were lucky to have a session with our expert, Amy Martinsson (you can link up with her here), who shares her insights on gaming cryptocurrency and how blockchain will impact the entire gaming sector. The following are some of the things she noted:

If you have been actively gambling, you must have noticed that there have been changes, daily, weekly, monthly, and on an annual basis. The reason is that the casino industry believes in giving gamers the best experience.

That justifies why it keeps attracting new Swedish gamers and new companies every year. In fact, in recent years, the industry has been recording commendable growth in its revenue, making it one of the most valued sectors, not only in Sweden but globally.

One of the latest trends in the industry is the adoption of cryptocurrency. Much is being put in place to accommodate the use of cryptocurrency and also to provide a better platform for crypto gambling growth.

Probably you are hearing about cryptocurrency for the first time or second time, and you dont know the exact meaning. If that is your situation, you dont have to worry because you are in the right place. Read on to know the meaning and other interesting facts about it. You will be surprised by how beneficial it is.

If you have been using the other methods (cash, credit/debit cards, and bank transfer) to transact to pay for casino online Sverige, the concept of cryptocurrency might be new to you. However, Swedish citizens have been up to date. Some of the technological advancements that have been there in the past have been accommodated well, even by Swedish laws.

Cryptocurrency refers to a digital currency that is protected by cryptography. The currency exists in virtual form, making it intangible. Even though cryptocurrency is not as centralized as other forms of money, it relies mostly on blockchain technology. It utilizes the technology to enforce everything.

The most popular forms of currency include Ethereum and Bitcoin. Like the ordinary currency that we use in other transactions, bitcoins and other versions are also useful in crypto transactions. Most people love it because of the aspect of safety that they enjoy when doing their transactions.

After understanding what cryptocurrency entails, you may wonder how its applicable in gaming. The answer is that its a trend that most gaming companies are currently embracing. Below is how cryptocurrency gambling is becoming a reality.

Can you imagine how long it can take you to make transactions from your Swedish bank account to a typical casino site? It can take hours before its activated. Sometimes your bank can notify you that the transactions cannot occur due to the banks networks downtime. That may, in turn, inconvenience you, especially if you needed the money urgently.

However, since the invention of cryptocurrency, delayed transactions have become a thing of the past. As long as you have a crypto wallet, you can make your transactions without a doubt that it will delay.

Technology has been helping in coming up with safety mechanisms. However, most hackers use technology to tap into private data as they take advantage of the loopholes in payment systems. With cryptocurrency, you can do transactions and even share data without fearing that they will leak because blockchain technology provides a secure way of doing transactions.

Therefore, cryptocurrency is a reality in gaming, and much more will happen. We expect more games with cryptocurrency and more industries embracing blockchain technology.

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Why people are so obsessed with bitcoin: The psychology of crypto explained – CNBC

Bitcoin fever is back.

Bitcoin hit a new high in early January, reaching a price of nearly $42,000. On Friday morning, the price of the notoriously volatile cryptocurrency was about 32,500, according to CoinDesk.

Even mainstream financial instituions are warming up: JP Morgan said, in the long-term, if the market cap gets high enough that it competes with gold, the price of bitcoin could reach $146,000, in a note published in January. (Bitcoin currently has a market value of over $600 billion.)

But more than just a cryptocurrency, bitcoin has become an obsession for many. Here are some of the behavioral and psychological reasons why.

Bitcoin is "more religion than solution to any problem," billionaire Mark Cuban told Forbes in December.

In fact, bitcoin aficionados have their own jargon full of acronyms and phrases from "HODL" to "whale," and (pre-Covid) bitcoin conferences would attract thousands of attendees. The crypto crow even has a preferred car to buy with their bitcoin: the Lambo (aka Lamborghini).

"The culture around bitcoin is part of the appeal," says Finn Breton, professor of science and technology at the University of California Davis and author of "Digital Cash: The Unknown History of the Anarchists, Utopians, and Technologists Who Created Cryptocurrency."

"When you buy bitcoin, you're actually buying into a whole scene," Breton says. "And it's a scene that can be a part of your identity."

Though bitcoin is getting more attention from some serious investors and mainstream financial institutions, it's still a somewhat subversive concept, so people who invest in it can view themselves as radical or participating in counterculture, Breton says.

From celebrities who invest in bitcoin, to a highly-engaged bitcoin community on Twitter, TikTok and Reddit, social media feeds into bitcoin's popularity.

"Suddenly, there's like a new way to see, finance and to have an identity of yourself as an actor in like the financial space," says Lana Swartz, assistant professor of media studies at the University of Virginia and author of "New Money: How Payment Became Social Media," tells CNBC Make It.

These social platforms can also drive behaviors, according to Utpal Dholakia professor of marketing at Rice University, who studies consumer financial decision-making. Research has shown that when people talk about their investments in online social environments, they tend to become more risk-seeking in the types of investments they make, he tells CNBC Make It.

"The same dynamic applies to a lot of investment decisions which are being made right now," Dholakia says.

Many smart investors, from Kevin O'Leary to CNBC's Jim Cramer, have likened buying bitcoin to going to Vegas. Berkshire Hathaway CEO and chairman Warren Buffett has been a longtime critic of bitcoin, saying that "cryptocurrencies basically have no value" and are a "gambling device."

And as with gambling, "some people certainly enjoy that thrill," Dholakia says.

Checking the price of stocks regularly is an activity that could get boring, says Tom Meyvis, professor of marketing at New York University's Leonard N. Stern School of Business. "With something like bitcoin, it's exciting because there's constantly something happening," he says. "You can check it 10 times a day and the price can vary wildly."

Also, many young people especially, who have grown up with video games and social media, are conditioned to want instant gratification and fast-paced cycles, Swartz says. Being drawn to high-risk high-reward investments like bitcoin "makes perfect sense," she says.

People get excited by the prospect of bringing a new, potentially life-changing, technology into the world. And with bitcoin bulls predicting the crypto's price couldgo as high $200,000 over the next decade, and with mainstream financial businesses from Paypal to Square getting into bitcoin, it's hard not to fear missing out.

Add to that the viral stories about people who have had success with bitcoin: There are enviable windfalls, from instant bitcoin millionaires to stories like the "Bitcoin Family," a Dutch family of five who liquidated their assets in 2017 in exchange for bitcoin (when bitcoin was priced at $900), moved into a van and traveled the world.

"People focus more on the upside than the downside," says Meyvis. So it's easy to get swept up in the possibilities that could come from bitcoin.

"Money is a technology that allows us to imagine futures," Swartz says.

The bitcoin excitement, particularly among young people, illustrates that people feel "locked out of the ability to have the kind of assets that would let them generate any form of wealth," Breton says. Millennials, those born between 1981 and 1996, controlled just 4.6% of U.S. wealth through the first half of 2020, according todata from the Federal Reserve.

"When we look at the fever around bitcoin, we really need to see it like in part as a demonstration of the fact that this is happening because there are not reliable, non-speculative mechanisms whereby people who don't already have access to a chunk of wealth could produce wealth over time," he says. "And that's a real indictment of the way things are currently set up for younger people."

Check out:Thinking of buying bitcoin? What experts say about big crypto concerns: You have to be mentally prepared

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Janet Yellen Will Consider Limiting the Use of Cryptocurrency – WIRED

Cryptocurrencies could come under renewed regulatory scrutiny over the next four years if Janet Yellen, Joe Biden's pick to lead the Treasury Department, gets her way. During Yellen's confirmation hearing on Tuesday before the Senate Finance Committee,Senator Maggie Hassan (D-New Hampshire) asked Yellen about the use of cryptocurrency by terrorists and other criminals.

"Cryptocurrencies are a particular concern," Yellen responded. "I think many are usedat least in a transactions sensemainly for illicit financing."

She said she wanted to "examine ways in which we can curtail their use and make sure that [money laundering] doesn't occur through those channels."

Blockchain-based financial networks are attractive to criminals because they do not require users to identify themselvesas the law requires most conventional financial networks to do. Because no individual or organization controls these networks, there's no easy way for governments to force them to comply with money-laundering laws.

So instead of trying to force the networks themselves to comply, regulators in the USand many other jurisdictionshave focused on regulating bitcoin exchanges that help users trade between dollars and cryptocurrencies. Once a bitcoin exchange identifies who initially received a particular bitcoin payment, law enforcement can often trace subsequent payments through a blockchain network's open payment ledger.

In December, Trump's outgoing team at the Financial Crimes Enforcement Networka unit of the Treasury Department focused on money launderingproposed a new set of rules to tighten the screws on cryptocurrency-based money laundering.

Under the new rules, cryptocurrency-based exchanges would need to file transaction reports with FinCEN any time a customer made a cryptocurrency transaction worth more than $10,000. This would mirror existing rules requiring conventional banks to report when customers make cash withdrawals or deposits worth more than $10,000.

Even more controversial in the cryptocurrency world, FinCEN wants to impose new record-keeping requirements for transactions involving users who manage their own private keysdubbed "unhosted wallets" by FinCEN. Under FinCEN's proposal, if a cryptocurrency exchange's customer sends more than $3,000 to an unhosted wallet, the exchange would be required to keep a record of the transaction, including the identity of the customer who initiated the payment.

These new rules didn't take effect before Trump left office, so theincoming Biden team will need to decide what to do with them. The Biden administration couldsign off on the existing rules, rewrite them, or scrap them altogether. Yellen's comments on Tuesday suggest that she is unlikely to scrap the rules. If anything, the Treasury Department is likely to consider additional regulations of the blockchain economy over the next four years.

This story originally appeared on Ars Technica.

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Crypto Crime Fell Sharply to Only 0.3% of All Cryptocurrency Activity in 2020 Featured Bitcoin News – Bitcoin News

A study by blockchain analytics firm Chainalysis finds that cryptocurrency-related crime has fallen significantly. The criminal share of all crypto activity fell to just 0.34% in 2020. This contradicts recent statements by U.S. Treasury Secretary nominee Janet Yellen and ECB President Christine Lagarde that cryptocurrencies are mostly used for illicit financing.

Chainalysis shared some findings from its 2021 Crypto Crime Report this week. While acknowledging that cryptocurrency remains appealing for criminals as well due primarily to its pseudonymous nature and the ease with which it allows users to send funds anywhere in the world instantly, the blockchain analytics firm detailed:

The good news is that cryptocurrency-related crime fell significantly in 2020 In 2020, the criminal share of all cryptocurrency activity fell to just 0.34%, or $10.0 billion in transaction volume.

In comparison, the firm explained that in 2019, criminal activity represented 2.1% of all cryptocurrency transaction volume, or roughly $21.4 billion worth of transfers. Last year, One reason the percentage of criminal activity fell is because overall economic activity nearly tripled between 2019 and 2020, the company noted.

Chainalysis noted that darknet markets were the second-largest crime category. It accounted for $1.7 billion worth of cryptocurrency activity, which was an increase from $1.3 billion in the previous year. Ransomware accounted for just 7% of all funds received by criminal addresses, which was just under $350 million worth of cryptocurrency. While small, ransomware saw a 311% jump over 2019.

The findings by Chainalysis contradict the recent statements made by Joe Bidens pick for the U.S. Treasury Secretary, Janet Yellen, and ECB President Christine Lagarde. Yellen said Tuesday that many cryptocurrencies are used mainly for illicit financing. Meanwhile, Lagarde said last week that bitcoin has conducted some funny business and some totally reprehensible money laundering activity.

Several people in the crypto industry have pointed out the error of their statements, including a well-known economist who called Lagardes statement outrageous. He emphasized, we all know that the vast majority of money laundering globally is conducted in fiat currencies, particularly in U.S. dollars and euros.

What do you think about the falling rate of crypto crime? Let us know in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

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.

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What’s the Best Cryptocurrency Stock? It Might Be CME Group – The Motley Fool

2020 was a seeming conundrum in financial markets. In the midst of the pandemic, many investors turned a tidy profit. In particular, owners of bitcoin and other cryptocurrencies had a banner year. Bitcoin increased over 300% in value. Congrats if you called it and got in ahead of the boom. And as cryptocurrencies are a scarce resource, there could be more long-term upside in crypto prices.

But I'm not here to make that call. Instead, I'm talking about stocks that will benefit from the long-term increase in usage of digital assets. And CME Group (NASDAQ:CME) could be the best business for investing in the trend.

Image source: Getty Images.

Cryptocurrency prices are not the best measure of how useful a digital currency actually is. Rather, they're a short-term measure of supply and demand. This is the case with any asset price in the short term, stocks included. Think back to your Econ 101 class: All resources are finite in supply, so changes in demand dictate the price of said resource. If demand exceeds supply, then prices go up; if demand dips below available supply, prices go down. Cryptocurrencies -- embodied by bitcoin -- were in very high demand in 2020 relative to the limited supply of digital coins in actual circulation. (Of note, most bitcoins in existence are not actually in circulation, as explained by fellow Fool.com contributor Sean Williams.) In 2018, it was the opposite situation.

Data by YCharts.

But these wild fluctuations in price don't exactly measure digital money's (and the underlying blockchain technology's) usefulness -- that is to say, how many (or how few in this case) consumers and businesses are using bitcoin in their daily activities. For many investors, myself included at the moment, a lack of utility makes cryptocurrencies a hard pass after their epic run in the last year.

But is there a way to bet on the long-term growth in acceptance of digital currency (the true measure of any currency's worth as a storage of value) without needing to worry about wild swings in cryptocurrency prices themselves? Yes, and I think the ticket is CME Group.

CME Group is the world's largest marketplace of derivatives contracts -- options and futures (a pre-agreed-upon price for delivery of an asset at a future date) for a long list of things from company stock to commodities like oil and agricultural products to fiat currencies like the U.S. dollar. While derivatives have a bad rap in some investors' minds (thanks to the wild speculation they can help enable), contracts like options and futures have been in use for centuries as a way for people and organizations to manage risk and from which to discover information about expectations within the economy.

By and large, it's for this risk mitigation that options and futures contracts are used. And CME is an efficient and very profitable facilitator of risk transference. The marketplace generated free cash flow (revenue minus cash operating expenses and capital expenditures) of $1.77 billion on revenue of $3.73 billion through the first nine months of 2020 -- an incredible margin of 47%. The company has a nearly two-decade-long track record paying a steadily rising quarterly dividend (currently $0.85 per share each quarter in 2020, yielding 1.8% at Friday's prices) and often pays a special dividend at the end of the year to distribute excess cash. For 2020, the one-time special dividend was $2.50 per share, boosting the stock's effective annual yield to 3.1%.

But what's all this to cryptocurrency? CME launched futures contracts on bitcoin in 2017, expanded the market to include bitcoin futures options in early 2020, and will add a new cryptocurrency marketplace via Ether futures (a unit of Ethereum, the second-largest crypto behind bitcoin) in February 2021. Derivatives contracts on the two largest crypto assets are a big deal if you believe adoption of digital currency will increase over time. Derivatives can help make a market for an asset more stable and could encourage businesses and organizations to accept their use. And CME earns a small fee every time a contract is traded.

For example, let's say a retailer wants to begin accepting bitcoin or Ethereum as a form of payment from customers, but it needs to report financial results and pay its bills (including taxes) in U.S. dollars. Derivatives can help it hedge against loss from possible declines in crypto prices on the revenue it collects. CME is helping make such risk mitigation possible, and adding legitimacy for bitcoin and Ethereum as a form of payment along the way.

By expanding its steadily growing marketplace into digital assets, CME Group could benefit from continual adoption of cryptocurrencies in the economy -- not just yielding its growth from how many investors want to buy or trade the digital currencies themselves at any given point in time. Over the long term, this could be an important area of growth for CME if digital assets like bitcoin and Ethereum gain momentum as a form of payment and blockchain technology finds other areas of use.

It would be a mistake to draw a hard comparison between the current phenomenon occurring with bitcoin prices and bubbles in the past (like, say, the tech bubble of the late 1990s). However, a current lack of mainstream adoption of digital assets gives me pause before investing directly in bitcoin and other cryptocurrencies. That isn't to say there isn't actual use of cryptocurrency in the economy -- and I think there's a very high chance adoption will continue to expand in the decades to come. But if you want to bet digital currency usefulness will increase over time, I think CME Group is a great place to start.

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Bitcoin briefly tumbles below $30,000, falling 12% so far this week – CNBC

Bitcoin prices fell sharply amid the global sell-off in equities.

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Bitcoin briefly tumbled below $30,000 on Thursday, as the cryptocurrency continued a slide from record levels.

The digital currency dropped as much as 17% to $29,246.77, wiping out about $100 billion from the market, according to data from CoinDesk. It's since pared losses slightly Friday, climbing back above $30,000 after trading beneath that level for over an hour.

Bitcoin was last trading down around 3% at a price of $31,668. It's fallen more than 12% so far this week, and is now down roughly 25% since peaking at $41,940 earlier this month.

The latest plunge, which comes without any clear reason, underscores the volatility of a currency that's become a popular investment for day traders in recent years even as it still has limited real-world application. Bitcoin rose over 300% in 2020, closing the year just above $29,000.

Ether, the digital currency that's second to bitcoin in total value, dropped even more on Thursday, declining 22% to $1,053.80. It's since recouped some of its losses, off 3% at a price of $1,204, but still 16% below its high from earlier this week, according to CoinDesk. Ether rose 471% last year.

President Joe Biden picked Gary Gensler, the former chairman of the Commodity Futures Trading Commission and an ex-Goldman Sachs banker, to be the next chair of the Securities and Exchange Commission. Gensler taught about cryptocurrencies at the Massachusetts Institute of Technology, starting in 2018.

However, Biden's choice of Treasury Secretary, formerFederal ReserveChair Janet Yellen, is a crypto skeptic who warned earlier this week that the government may need to "curtail" the use of virtual currencies to prevent illicit activity.

- CNBC's Ryan Browne contributed to this report.

WATCH: Crypto market sheds $100B as investors await Biden's regulatory approach

Nominations are open for the 2021 CNBC Disruptor 50, a list of private start-ups using breakthrough technology to become the next generation of great public companies. Submit by Friday, Feb. 12, at 3 pm EST.

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Bitcoin briefly tumbles below $30,000, falling 12% so far this week - CNBC

7 SPACs To Play The Rise Of Bitcoin, Cryptocurrency Stocks – Benzinga

The rise in the value of Bitcoin and media coverage of cryptocurrencies could make the industry ripe for startups going public in 2021. One of the methods for cryptocurrency companies to go public could be through a special purpose acquisition company.

Coinbase is considering a 2021 initial public offering, but could also be a candidate for a SPAC deal. Here is a look at some SPACs that could target cryptocurrency companies or have already announced a deal in the space.

GS Acquisition Holdings II (NYSE: GSAH): The Goldman Sachs (NYSE: GS) SPAC raised more than$700 million in its offering. The company has been linked to eToro after the cryptocurrency exchange talked to Goldman about a potential IPO. Goldman is also said to beexploring entering the cryptocurrency market soon, which could mean it pursues partial ownership of a cryptocurrency-related company via this SPAC.

Related Link: 10 SPACs Trading Under $11 For Investors To Consider In 2021

Burgundy Technology Acquisition Corp(NASDAQ: BTAQ): Led by the former CEO of Hewlett Packard and SAP SE (NYSE: SAP), Burgundy Technology Acquisitionis targeting technology or enterprise software. The company has mentioned Israel as an area of focus, which could make eToro a potential target company for this SPAC.

Lefteris Acquisition Corp (NASDAQ: LFTR): Targeting the fintech space, Lefteris Acquisitioncould merge with a cryptocurrency-focused company. The management team includes former management from TD Ameritrade and Etrade. Asiff Hirji, who is attached to the SPAC, was the Coinbase COO from December 2017 to June 2019. Hirji also works for blockchain startup Figure as its president since January 2020.

Ribbit Leap(NYSE: LEAP):This SPAC from Ribbit Capital is targeting a company in the fintech space. Ribbit Capital is an investor in several fintech companies yet to go public including Coinbase and Robinhood. The SPAC is led by two current Ribbit Capital executives and couldconsidera cryptocurrency company.

Far Peak Acquisition Corporation(NYSE: FPAC): Led by former New York Stock Exchange President Tom Farley, Far Peak Acquisitioncould be a SPAC that goes after a cryptocurrency company. The NYSE invested $75 million in Coinbase in 2015, which was the largest investment ever made in a Bitcoin company at the time. The NYSE also launched a Bitcoin Index that same year. Farley called Bitcoin a growth market then and could still be bullish on the industry.

VPC Impact Acquisition Holdings (NASDAQ: VIH): Shares of VPC Impact Acquisition Holdings surged on reports it was acquiring cryptocurrency exchange Bakkt. The companies formally announced the merger being done at a $2.1 billion valuation. Bakkt launched the first regulated Bitcoin futures exchange and first fully-regulated options contract for Bitcoin. Shareholders of the SPAC will own 8% of the new company. Intercontinental Exchange (NYSE: ICE) will own 65% of Bakkt after the merger.

Diginex (NASDAQ: EQOS): Former SPAC, now trading as Diginex, is the first full digital asset ecosystem comprising a cryptocurrency exchange to be listed on the Nasdaq. Diginex traded under $10 after the SPAC merger until December when it was seen as a Bitcoin play. The company offers a cryptocurrency exchange and OTC trading operation. Diginex is launching a derivative product with Bitcoin perpetual futures contract in January. The company is planning on expanding its operations from Europe and Asia to enter the United States market.

Disclosure: The author hasa long position in shares of GSAH andBTAQ.

Related Link (You Tube Video):What SPAC Could Take Coinbase Public?

2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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BuyUcoin Cryptocurrency User Data Allegedly Affecting Lakhs of People Leaked on the Dark Web – Gadgets 360

Banking and KYC information of lakhs of users of BuyUcoin, which trades bitcoin and other cryptocurrencies, has allegedly been leaked on the dark web. The details included the names, email addresses, mobile numbers, order information, and deposit history of users, according to a security researcher. The data dump available on the dark Web also appears to have bank details including bank names and account numbers, as well as know-your-customer (KYC) information that includes PAN and passport numbers of the people using BuyUcoin platform. The company has however denied the leak and said the surfaced data dump was of some dummy accounts.

Cybersecurity researcher Rajshekhar Rajaharia told Gadgets 360 that he found the data dump on the dark Web earlier this week. It included the details of more than three lakh BuyUcoin users, he said. The Delhi-NCR-based company claims to have over 3.5 lakh users in total.

The researcher said BuyUcoin appeared to have faced a data breach in September last year that resulted in the latest leak on the dark Web. Alongside user details, the data dump included a folder with admin credentials that could be used to access the server, he noted.

Rajaharia stated that the dump was posted on the dark Web by Shiny Hunters, the hacker group that allegedly leaked the data of BigBasket and JusPay in the recent past.

The leaked data could be used by bad actors to run fraudulent attacks against individuals, the researcher said. He also added that the data could also enable hackers to understand the credit score of the victims using transaction details.

BuyUcoin CEO and Co-founder Shivam Thakral denied the leak. We would like to reiterate the fact that only dummy data of 200 entries was impacted which was immediately recovered and secured by our automated security systems, he told Gadgets 360 over email.

However this might not be correct, as a person whose data was revealed in the data dump came forward to Gadgets 360 and said that their bank and KYC details were revealed.

What if a bad actor would use any of the leaked user accounts in any illegal crypto activity? asked Rajaharia while countering the company's rejection of the data leak. Who will be responsible in such a case? Crypto data leak may become a very serious issue as the data could be used in illegal activities in many ways in such cases. It's the company's responsibility to inform affected users and protect data instead of making any false claims.

Thakral however denied the leak again, and responded by saying that it was just a hoax to defame the company.

These people who reached out to journalists are friends of hackers, they are just showing our email IDs are there, he said. This doesn't make sense to me. But a part of the data dump, as seen by Gadgets 360, contained these details for a huge number of users, so it appears to be a real dump, and hopefully the company is investigating the matter.

Update, 5PM, Jan 22: In a mailed statementBuyUcoin noted: This incident remains an ongoing investigation. We will keep all the stakeholders updated about the proceedings and conduct a major cybersecurity overhaul throughout 2021 to upgrade platform security. You can see the full statement below.

No bitcoins or any other cryptocurrencies appear to have been stolen in the leak. However, in the past, there have been instances of cryptocurrency exchanges and wallets getting hacked and bitcoins being stolen.

In April 2020, a hacker exploited a security flaw in Bisq bitcoin exchange and stole more than $250,000 (roughly Rs. 1.82 crores) worth of cryptocurrency from users. Binance, one of the leading cryptocurrency exchange platforms, also saw a data breach in May 2019 in which hackers were able to steal over $40 million (roughly Rs. 290 crores).

Regarding the recent media reports, we are thoroughly investigating each and every aspect of the report about the malicious and unlawful cybercrime activities by foreign entities in mid-2020. Every BuyUcoin user with active portfolio has 3 factor authentication enabled trading accounts. All our user's portfolio assets are safe within a secure and encrypted environment. 95% of user's funds are kept in cold storage which are inaccessible to any server breach.

BuyUcoin platform has following features to ensure that customer account remains safe and secure from any kind of cyberattack:

1. Strong password and account OTP verification.

2. Google 2 Factor Authentication (enabled from security section under customer's profile)

3. Trading Pin (Under the security section, customers can enable trading pin a six-digit code for transaction verification)

4. Also, as an extra security step, every transaction requires an OTP from customer's email.

However, this incident remains an ongoing investigation. We will keep all the stakeholders updated about the proceedings and conduct a major cybersecurity overhaul throughout 2021 to upgrade platform security. BuyUcoin stands in solidarity with other companies who have faced such unlawful cyber-attacks recently. There is an urgent need to revise the current cybersecurity policy to counter such attacks. BuyUcoin is more than willing to work with industry peers and other relevant stakeholders to protect the financial technology ecosystem.

What will be the most exciting tech launch of 2021? We discussed this on Orbital, our weekly technology podcast, which you can subscribe to via Apple Podcasts, Google Podcasts, or RSS, download the episode, or just hit the play button below.

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