The U.S. state of Hawaii has authorized 12 cryptocurrency companies to start operating in the state without needing a money transmission license. No action will be taken against them for conducting unlicensed money transmission activities for two years.

Several cryptocurrency companies independently announced on Wednesday that they have been greenlighted to launch in the U.S. state of Hawaii. They have been admitted to the states Digital Currency Innovation Lab (DCIL), a program that allows digital currency issuers to do business in Hawaii without obtaining a state money transmitter license, the programs website reads. This regulatory sandbox is in partnership with the Hawaii Division of Financial Institutions (DFI).

The program, which runs from Aug. 19 to Dec. 31, 2022, accepted applications from cryptocurrency companies between March 17 and May 1. A total of 19 companies applied; 12 companies, including several crypto exchanges, fulfilled the conditions of the program and have been admitted. The website details:

The participating company will be given 2 years to engage in digital currency transactions. DFI has issued a no action message stating that no action will be taken against companies conducting what DFI would consider unlicensed money transmission activity, if they have been successfully admitted into the program.

The 12 companies admitted to the program are Apex Crypto, Bitflyer USA, Blockfi, Cex.io, Cloud Nalu, Coinme, Erisx, Flexa, Gemini Exchange, Novi Financial, River Financial, and Robinhood Crypto.

The DFI will monitor all cryptocurrency transactions taking place in the Digital Currency Innovation Lab. Participants will be required to provide updates, including the number and value of transactions. They are also required to provide information regarding the number of complaints received and any regulatory enforcement orders.

Participants that do not receive explicit approval to continue operations must conclude all cryptocurrency transactions when the two-year period is up. Per the participation agreement, companies must also execute on the wind-down plan and exit strategy. DFI will determine the appropriate licensing for the company to continue operations, if applicable, the website clarifies.

Hawaii previously had strict rules for crypto businesses, prompting a number of companies to exit the state. Coinbase, for example, ceased operations in Hawaii in early 2018 over requirements to hold fiat reserves.

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

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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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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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When dust settles in your home, you wipe it up. But what about when unwanted dust makes its way into your bitcoin wallet? Well, cleaning it up may not be so simple.

In Bitcoin parlance, dust is the technical term given to trace amounts of bitcoin that are considered too small to send in a transaction because the transaction fee would exceed the amount sent. Typically, dust is no more than a few hundred satoshis (a microunit of measurement for bitcoin).

Because sending dust is expensive relative to the transaction size, normal bitcoin users have no reason to transact with dust. But that doesnt mean other entities, like bad actors or blockchain researchers, dont have a use for it.

Letting the dust settle

Entities conducting blockchain analytics may use dust to deanonymize users and their wallet addresses. The idea is to create enough deterministic links between the analysis firms wallets and the recipient addresses. Once these links are created, the firm can run analysis using the data it collects to trace IP addresses to the recipient wallets.

When the dust is consolidated with the users other funds, it helps with chain analytics by making it easier to cluster addresses, Sergej Kotliar, the CEO of Bitrefill, told CoinDesk. If users dont consolidate the unspent transactions (UTXOs), then they dont need to worry about their anonymity. However, most wallets automatically consolidate UTXOs when a user creates a transaction, so this can be tough to navigate around unless you are choosing which UTXOs to spend manually.

CoinDesk reached out to Chainalysis and CipherTrace to ask if they use dust in their analytics. Both companies denied using this technique, though Chainalysis Manager of Investigation Justin Maile added that dusting is more often [used] by investigators to trace illicit funds. Maile continued that exchanges may use dusting to trace stolen funds following a hack.

Dave Jevans, the CEO of blockchain analytics company CipherTrace, told CoinDesk that hackers may use dusting as a strategy for identifying individuals who can then be phished or extorted.

The threat of anonymity aside, consolidating these UTXOs would mean spending more in fees than the dust is worth. The resulting dilemma then becomes: leave the too-piddling-to-spend UTXOs to clutter the wallet or consolidate them and thus compromise privacy. (Its not uncommon for users to have their wallets dusted more than once by the same entity, leading to significant clutter. Phil Geiger, the director of marketing at Unchained Capital, for instance, told CoinDesk he has had addresses dusted repeatedly.)

Some wallets, like Samourai and Bitcoin Core, let you freeze UTXOs, which would bar them from being consolidated in a new transaction. But Kotliar emphasized that most average users will not know how to navigate this feature.

Raising dust limits?

To mitigate the impact dust has on the network, Kotliar has suggested raising the dust limit as designated by the Bitcoin Core wallet. Currently, most wallets are designed to cap transactions at 546 sats (0.00000546 BTC, or roughly 7 cents).

Blocking these would be censorship, but maybe raising the dust limit makes sense, Kotliar said, adding that his proposal is a way to raise the topic and have other people weigh in on it.

If this limit were raised, then it would be more expensive to execute a dusting attack. But, of course, this comes at the detriment of honest users spending small sums. If bitcoin were to go up in price dramatically, then the dust limit would have to be recalibrated so as to not price out smaller accounts from sending transactions.

If the destructive action is cheaper than a constructive one, then we should fix it. In Bitcoin, we dont have a way of censoring things we dont like, but we can change these defaults to make it more expensive.

Another fix, proposed some time ago by Bitcoin Core developer Peter Todd, involves wrangling dust UTXOs and spending them in a CoinJoin transaction to preserve privacy. In a back and forth on Twitter discussing Todds dust-b-gone proposal, a representative for Samourai indicated the privacy wallet is seriously considering adding such a feature in the future.

The dust piles up

Theres no guarantee that raising the dust limit would clean this problem up for good.

Im not sure that raising the dust limit would prevent this, Ergo, a pseudonymous analyst for OXT Research, told CoinDesk, though it would certainly [be] a deterrent.

Blockchain analysts, for example, may still be willing to stomach the premium to send dust if the limit is raised, especially if they have high-dollar contracts with government agencies.

Still, it may deter some bad actors from wasting block space on trivial transactions. Bitcoins blockchain keeps a record of every transaction ever executed on the network, and theres only so much space per block to accommodate new transactions; dust, then, causes unnecessary bloat on Bitcoins transaction ledger because blockspace that may have been used to accommodate legitimate, larger transactions is instead devoted to transactions worth pennies.

And the pennies (or satoshis) add up. In the most recent dusting attack to hit the Bitcoin network, for instance, Ergo has traced some 84,000 dust outputs from 146 transactions to an entity that appears to be advertising an obscure Bitcoin SV messaging application. Each transaction includes a message directing users to the application. (Kotliar noted, This does not appear to be a malicious attack.)

The apparent advertising campaign has cost the BSVers roughly 1.147 BTC, according to the most recent figures produced by Ergo, and the attackers have spent three times more on fees than the dust itself. Ergo told CoinDesk that this round of dusting began on Aug. 4 and has been fairly consistent.

Jensen mentioned that promotional dustings like this are not uncommon. At the end of 2018, for instance, 100,000 addresses were dusted as a way to advertise the now-defunct mixing service Bestmixer.

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The researchers and analysts from Tokeninsight published its 2020 Q2 Cryptocurrency Mining Industry Report which shows the industry has grown exponentially during the last six months. The findings indicate cryptocurrency mining has expanded a great deal but Chinas bitcoin mines suffered a great impact in H1.

Tokeninsight published its 2020 Q2 Cryptocurrency Mining Industry Report and the study shows a lot has happened in the bitcoin mining industry during the first half of 2020.

The new research paper discusses a number of topics that affected the bitcoin mining industry this year and the countries that are welcoming these operations. For instance, Tokeninsight highlights that the Uzbekistan government established a national mining pool in January.

After that announcement, Quebecs Hydropower Agency of Canada allowed bitcoin miners to obtain 300MW of electricity.

In February the Ukraine government said bitcoin mining does not require government supervision and intervention. The following month, Missoula County, Montana, created new regulations for bitcoin miners.

In May, The Acting Minister of Energy of Ukraine told the public bitcoin miners might be able to draw nuclear energy. In April, the local government officials in Sichuan approved the Hydropower Consumption Demonstration Enterprises.

News.Bitcoin.com recently reported on the second-batch of consumption enterprises approved in Sichuan. In June, the Parliament of Kyrgyzstan said it plans to tax and supervise digital asset miners.

Tokeninsight said that China has been the hardest hit in 2020 as the country has seen a significant impact from a variety of reasons.

The Tokeninsight researchers mentioned that Covid-19 caused mining rig shipment delays, the bitcoin halving cut revenue in half for Chinese miners, internal disputes from mining machine manufacturers like Canaan and Bitmain, and the report also mentions mining policy changes in Sichuan.

Moreover, Tokeninsight has noticed a trend of new players entering the bitcoin mining rig manufacturing sector.

In terms of the mining machine manufacturing sector, new players are eager to enter the field, and the old overlords are also trying their best to update the technology to manufacture leading products in the market, the paper notes. In the first half of 2020, new generation mining machines including Bitmains S19 and S19 Pro, WhatsMiner M30 series, and Canaans A1146 Pro and A1166 Pro have been launched one after another.

The report further adds:

From the data published by several manufacturers, the new generation of mining machines has been greatly optimized and improved in terms of performance and power consumption.

The study says that the core competition between mining rig manufacturers is semiconductor research and development (R&D).

A number of mining rig manufacturers leverage 10-7nm chips and the Tokeninsight researchers highlight that chips will improve in the coming years.

At the current chip research and development level, Samsung and TSMC have deployed 3nm chips, and both plan to mass produce 3nm in 2022, the paper explains. Although 3nm is said to be a node approaching the physical limit, TSMC has already planned for 2nm and is conducting research and development with mass production in 2024.

Mining hardware is facing an accelerated iteration period, and the field of AI chips will become a battleground, the Tokeninsight researchers add.

In addition to the problems with Covid-19, supply chain delays, and government rules, Chinas bitcoin mining industry is feeling the pressure from the 2020 monsoon season in Asia. Excessive flooding in Sichuan during the last five days caused 20% hashrate losses for a number of Chinese bitcoin mining operations on Tuesday, August 18.

What do you think about Tokeninsights Q2 mining report? Let us know what you think in the comments below.

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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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Bitcoin rallied on Monday, advancing past $12,000 to its highest level in a more than a year amid a wider risk-on rally in equity markets.

The worlds largest cryptocurrency rose as much as 5.3% to around $12,473 in New York, the highest since July 2019. Crypto peers including Bitcoin Cash, Litecoin and Monero also gained, with the Bloomberg Galaxy Crypto Index rising to its highest since June 2019.

After trading sideways for much of the summer, Bitcoin has re-gained its mojo as a rally in the stock market nudges the S&P 500 to near a new all-time high. And in an environment of ultra-low rates, a number of analysts and crypto fans say Bitcoin -- along with other assets such as gold -- could potentially act as an inflation hedge, should prices start to rise.

Inflation is currently low but real yields are across the board negative -- negative real yields and the monetary stimulus/spending has driven investors to seek out inflation hedges such as gold, said Seamus Donoghue, vice president of sales and business development at METACO. Given its limited supply and growing institutional acceptance, Bitcoin will also likely benefit from the market seeking inflation hedges.

At the same time, some Wall Street veterans have taken a greater interest in the coin. Paul Tudor Jones made waves when he said hes been buying Bitcoin amid central bank money-printing, while Michael Novogratz, founder of Galaxy Digital Holdings, told Bloomberg Television last week that about 25% of his net worth is tied up in the cryptocurrency.

Bitcoins advance past $12,000 makes it one of the best-performing asset classes this year. Its gained about 70% since the end of December and is up more than 100% since mid-March, when it briefly traded below $4,000. This years surge still leaves it about 40% below the all-time-high of almost $20,000 reached in December 2017.

And technical indicators painted a positive outlook for the token: Bitcoins surge took it to the upper limits of its trading envelope indicator, a measure that smooths moving averages to map out higher and lower limits. While a breach of this level typically indicates a reversion to the mean -- and, therefore, a price decline -- technicals suggest this time might be different. Bitcoin, with a 14-day Relative Strength Index (RSI) reading of 69, isnt overbought, signaling that further gains could be ahead.

The best analogue for today is perhaps the Great Depression, said Nicholas Pelecanos, head of trading at NEM. From the conclusion of this crisis to the years that followed, the price of gold more than doubled, rising with inflation, and it is this macroeconomic backdrop that makes Bitcoin so appealing to investors.

With assistance by Kenneth Sexton

Before it's here, it's on the Bloomberg Terminal.

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New virtual money concept, Gold Bitcoins

Bitcoins recent price rise may convince some investors it offers a better chance of making a million than UK shares. However, the long track record of growth from indexes such as the FTSE 100 and FTSE 250 suggests that stocks can produce impressive returns over the long run.

In fact, by investing regularly in a basket of high-quality stocks after the recent market crash, you could build a 1m portfolio. Not only could it deliver higher returns than Bitcoin, it may offer less risk than the virtual currency.

Although Bitcoin may have outperformed UK shares over recent months, in the long run the stock market provides significant growth potential. For example, indexes such as the FTSE 100 and FTSE 250 have produced annualised high single-digit gains since their inceptions. And this trend looks set to continue in the coming years.

In fact, investing in a diverse range of stocks could produce even higher returns than the market average due to the recent market crash. Many high-quality businesses are currently trading on exceptionally low valuations. In fact, significantly below their historic averages. With the stock market having always recovered from its lows, they could offer strong turnaround potential. Through buying them now while theyre priced at low levels, you could generate some impressive returns as they recover.

Even though Bitcoin may outperform UK shares in the short run, its lack of fundamentals means that investors have no way of knowing whether it offers good value for money. Therefore, its current price may already factor in its long-term growth prospects. This could mean that buying it today proves to be a relatively risky decision.

By contrast, the financial figures for many companies suggest they offer wide margins of safety at the present time. Investors can access these figures freely and without charge online. This enables them to build a diverse portfolio that offers less risk than Bitcoin. And at a time when the outlook for the economy continues to be very uncertain.

Story continues

Assuming that UK shares produce an 8% return a year, as per the FTSE 100s annual returns since its inception 36 years ago, investing 500 per month could produce a portfolio valued at over 1m within 35 years. However, since many stocks appear to be undervalued at the present time, they could produce even higher returns in the coming years.

Therefore, now could be the right time to buy a selection of them on a regular basis. They may have experienced a disappointing 2020 so far by comparison to other assets such as Bitcoin. But, when it comes to their risk/reward appeal, they appear to be significantly more attractive than the virtual currency.

The post Forget making a million with Bitcoin! Id invest 500 a month in UK shares to get rich appeared first on The Motley Fool UK.

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