Daily Archives: May 3, 2021

Bitcoins domination of total cryptocurrency market value is declining as its next-biggest rival Ether reaches the $3,000 milestone.

The rise of Ether suggests theres room for more than one winner among digital tokens as the sector evolves. Bitcoin now accounts for about 46% of total crypto market value of $2.3 trillion, down from roughly 70% at the start of the year, according to tracker CoinGecko. Ether is up to 15% and a group of others outside the top few has doubled its share to 36%.

Bitcoin remains the biggest cryptocurrency but the momentum in other tokens is drawing increasing interest. Crypto proponents argue investors are getting more comfortable with a variety of tokens, while critics contend the sector may be in the grip of a stimulus-fueled mania.

Ethereum is rising and not much seems to be in its way, Edward Moya, a senior market analyst at Oanda Corp., wrote in a note Friday, adding that other tokens were also seeing fresh interest.

The current distribution of market share also reflects an April shakeout in the cryptocurrency sector. Bitcoin has yet to recover all the ground it lost after tumbling from a mid-April record of almost $64,870.

Last months listing of crypto exchange Coinbase Global Inc. in the U.S. is the latest sign of how more investors are embracing the sector despite risks from high levels of volatility and expanding regulatory scrutiny.

Ether is currently occupying the limelight. An upgrade of the affiliated Ethereum blockchain as well as the networks popularity for financial services and cryptocollectibles are among the factors cited for the rally.

Evercore ISI strategist Rich Ross has set a target of $3,900 for the token. Ether rose 6.6% to $3,167 as of 10:29 a.m. in London on Monday.

Other cryptocurrencies have jumped too. The price of Binance Coin is up 3,460% over the past 12 months, according to CoinGecko. Dogecoin, a token started as a joke in 2013 but now a social-media favorite touted by the likes of Elon Musk, has surged 15,000% to a market value of around $50 billion.

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

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Bitcoin Crypto Dominance Declines as Ether Soars Past $3,000 - Bloomberg

Bitcoin has beaten the stock market, but you might be shocked by how much.

It's been a wild ride for Bitcoin throughout its 11-year history, and that's been especially true over the past year. Not only did the COVID-19 pandemic drive Bitcoin's price lower initially, but it also seems to have helped accelerate investor interest in the leading cryptocurrency.

Here's a look at how Bitcoin has performed for investors over the past year and what has driven its performance.

I won't keep you in suspense. Bitcoin has increased in value by 612% over the past year, as of this writing. This means that a $1,000 investment in Bitcoin made one year ago would be worth just over $7,100 now.

During the same period, the S&P 500 index, which is generally considered to be the best gauge of overall stock market performance, has delivered a 50% total return. Several stocks have doubled and tripled over the past year as the market rewarded companies that benefited from the stay-at-home economy. But there are very few stocks that have delivered returns in the same ballpark as Bitcoin. So, it's fair to say that Bitcoin has been a big success as an investment over the past year for buy-and-hold investors.

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Obviously, we can't go through every positive Bitcoin news item that has happened over the past year. But there have been three big themes that seem to have driven Bitcoin higher.

Here's the billion-dollar question. If Bitcoin ultimately gains mainstream adoption as a currency or ends up becoming a mainstream store of value (digital gold), there's a solid case to be made that Bitcoin could ultimately rise to $500,000 or even more. On the other hand, if the mainstream-use case doesn't pan out, or if investor interest starts to fade, it could go the other way just as easily.

The bottom line is that no investment that can deliver 7x returns in a year is without significant volatility and risk. If you're looking to buy Bitcoin or other cryptocurrencies, make sure you know what you're getting into.

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If You Bought $1,000 Worth of Bitcoin a Year Ago, Here's How Much You'd Have Today - The Motley Fool

It seems safe to say that Berkshire Hathaway Inc. Vice Chairman Charlie Mungers cryptocurrency skepticism hasnt been softened by the rally in prices for bitcoin and other digital assets.

Of course, I hate the bitcoin success and I dont welcome a currency thats useful to kidnappers and extortionists, and so forth. Nor do I like just shoveling out a few extra billions and billions of dollars to somebody who just invented a new financial product out of thin air. So I think I should say modestly that I think the whole damn development is disgusting and contrary to the interests of civilization. And Ill leave the criticism to others.

Mungers remarks came in response to a question at Berkshires BRK.A, -1.29% BRK.B, -0.95% annual shareholder meeting on Saturday. Munger and Chairman Warren Buffett were asked about their feelings regarding rising cryptocurrency values given Mungers previous characterization of bitcoin as worthless, artificial gold.

Read: Berkshire Hathaway returns to quarterly profit on insurance and stock-market gains

Buffett, who over the years has previously described the crypto as rat poison squared and a delusion, with no unique value at all, said he would dodge the question, reckoning that the vast majority of investors watching the meeting online were likely bitcoin holders.

We probably got hundreds of thousand of people watching that own bitcoin, and we probably have two people that are short. So we got a choice of making 400,000 people mad at us and unhappyor making two people happy, and thats just a dumb equation, Buffett joked.

Munger, in contrast, was in no mood to hold back, saying that the question was like waving a red flag in front of a bull:

Bitcoin BTCUSD, +2.52%, which is notoriously volatile, has rallied over the past year, topping $60,000 for the first time in March before a pullback that took it briefly below $50,000 earlier this month. The digital asset was trading near $56,700 at midday Sunday, down around 1.7% over the last 24 hours, according to CoinDesk. Bitcoin traded at around $29,000 at the beginning of 2021 and for around $8,000 a year ago.

See: Ive learned how much I dont know about bitcoin, says investor Howard Marks

While this years event was the second in a row to be held virtually due to the COVID-19 pandemic, Buffett and Munger tackled a range of queries in a 3 1/2-hour question-and-answer session.

Barrons on MarketWatch: Berkshire Hathaways Earnings Show Warren Buffetts Company Is on a Roll

Many of the questions were specific to Berkshire, with Buffett pushing back against criticism of the companys sale of its stakes in airlines during the height of the pandemic. Other topics, included rising short-term trading activity by individual investors, the impact of special-purpose acquisition vehicles, or SPACs, on the deal-making environment, signs of inflation in the economy and the morality debate around share buybacks.

Read: Warren Buffett warns investors not to gamble on stocks

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Charlie Munger 'hates' bitcoin's rise: 'disgusting and contrary to interests of civilization' - MarketWatch

Bitcoin has exploded this year, with long-awaited institutional adoption being bolstered by retail investors pouring cash into all manner of cryptocurrencies (some looking like better bets than others).

The bitcoin price has soared as millions of potential bitcoin buyers get access to bitcoin markets via the likes of PayPal, Robinhood, Square's Cash App and Revolut.

Now, as PayPal and Robinhood continue to prevent bitcoin bought on their platforms from being moved elsewhere, a leaked blog post has revealed London-based banking app Revolut is gearing up to allow some of its users to transfer their bitcoin holdings off its app.

A leaked Revolut blog post revealed the banking app is gearing up to permit bitcoin withdrawal from ... [+] its app.

In a blog post that was deleted shortly after being published on Thursdaybut not before being spotted by eagle-eyed AltFi reportersRevolut announced that its top-tier paying users will next week get beta access to transfer their bitcoin off its platform.

"We're launching next Thursday, unfortunately the blog went up a little too soon," says a Revolut spokesperson, speaking over email. The blog post, uploaded "due to a scheduling error," sported a URL that includes "bitcoin withdrawals have landed" but now directs to a 404 error page.

"We're starting with bitcoin, but well be adding more tokens and upgrades in the near future," the post read. Revolut users, including in the U.S. where the banking app was launched in March 2020, can currently buy and sell 22 different cryptocurrencies, including bitcoin, ethereum, litecoin, and Ripple's XRP.

Meanwhile, it was reported Revolut employees were told of the pending update ahead of the leaked blog post's publicationwith management thanking bitcoin "for making all our dreams come true."

"Huge Revolut milestone to announce," Revolut staff were told in a company-wide communication, according to the Financial Times. "Our public beta for crypto withdrawals has now soft launched for all eligible users."

Meanwhile, restrictions on PayPal and Robinhood accounts preventing them from moving their bitcoin off the platforms have continued to grate on bitcoin and cryptocurrency devoteesmany of whom espouse the cryptographic mantra: "not your keys, not your coins," warning that if you let a bank hold your cryptocurrency for you it's vulnerable to loss or theft.

The bitcoin price bull run took off in October last year following PayPal's announcement that it ... [+] would begin supporting bitcoin and a handful of other cryptocurrencies.

"Buying bitcoin on Robinhood is not owning bitcoin. Buying bitcoin through PayPal is not owning bitcoin," NFL pro footballer and staunch bitcoin advocate Russell Okung said via Twitter this week.

PayPal's support of bitcoin and a handful of other cryptocurrencies, announced in October 2020, kickstarted the current bitcoin price bull run and sent bitcoin soaring well past its previous all-time high of around $20,000 per bitcoin set in late 2017.

However, PayPal immediately attracted criticism for failing to allow users to transfer the cryptocurrencies they bought off the platform.

Square, led by bitcoin believer Jack Dorsey, enabled bitcoin withdrawals via its Cash App in 2019 while investing app Robinhood has said it plans to do so in the future.

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Leak Reveals Millions Of PayPal And Robinhood Bitcoin Buyers May Soon Want To Make A Surprising Switch Amid Bitcoin Price Mania - Forbes

Albert Einstein reckoned the only reason we have time is so that everything doesn't happen at once.

If he was around today, he may have been forced into a rethink. Last year we saw one of the sharpest falls in financial markets ever, followed by one of the quickest recoveries.

Despite the globe still in the grip of a dangerous pandemic, the price of assets, commodities and financial instruments have continued their meteoric rise fuelled by massive amounts of stimulus, from governments and central banks.

The more they inflate, the higher pundits believe they'll go.

Analysts are sceptical of Bitcoin's meteoric rise. Here's why some are predicting a crash, and what that would mean.

It's the everything boom. Real estate, stocks, metals, agricultural products; almost anything you care to name. Except for debt instruments like government bonds that collapsed from record highs in February and March. And gold, the ultimate store of wealth during uncertain times for several millennia.

Nothing, however, can quite match the boom in cryptocurrencies. In the past year, led by Bitcoin, they have soared to ever greater levels, despite warnings from monetary authorities about their highly speculative nature, their use in criminal transactions and the ongoing threat of regulation.

They've been largely dismissed by the establishment until recently. Lately, there's been a surge of interest from institutions that have taken a fresh look at Bitcoin and the vast array of competing cryptocurrencies, and a reluctant acceptance. There's money to be made, after all.

But the vast bulk of the interest, and perhaps the driving force behind the huge price surge in the past year, has come from households; ordinary people who have jumped aboard the rapidly accelerating train in a quest for riches.

Source: Coindesk

Laszlo Hanyacz became an internet sensation for all the wrong reasons. Back in 2010, he bought two pizzas from a Jacksonville Florida pizza joint and paid in Bitcoin; the first time anyone ever used the electronic currency as payment.

As bitcoin passes its latest milestone, 'FOMO' has led to crypto sceptics piling in, as Tesla boss Elon Musk warns digital currencies should be treated as "speculation".

That alone should have been enough to put him in the history books. But his fame extends well beyond being a trailblazer. Poor old Laszlo forked out 10,000 Bitcoin for the doughy delight. In Australian dollar terms, based on yesterday's price, that would now be worth $753,510,000.

Let's hope he ordered the supreme. Or at least, the extra anchovies.

But Laszlo's misfortune has become one of the great obstacles in the acceptance of Bitcoin and other cryptocurrencies as a medium of exchange.

Consumers are unwilling to spend their Bitcoin;fearful they may end up like Laszlo. And merchants are nervous about accepting payment, given the incredible volatility around its pricing.

He was far from the first, but it was Elon Musk who kicked along the most recent boom when in February, he announced that Tesla, his electric car company, would be accepting Bitcoin as payment for vehicles.

Not only that, Tesla stumped up $US1.5 billion ($1.94 billion) for a slice of Bitcoin. In filings to the New York Stock Exchange last week, that investment now was worth $US2.48 billion.

Increasingly, cryptocurrencies are being seen as an investment, or a store of wealth with other big players adding Bitcoin to their balance sheets.

As the price of the cryptocurrency continues to skyrocket, Bitcoin miners are tapping fossil fuels across the planet. But can Bitcoin go green, or is climate change embedded in Bitcoin's code?

Payment systems Paypal and Square are exploring the currency as both a payment system and an investment while Twitter has debated whether to hold some on its balance sheet.

With big names dipping into the market, investment banks like Bank of NY Mellon have taken the plunge, forming a crypto division while JP Morgan has dipped its toe into the water in an effort to keep its clients happy.

For much of the past decade, crypto devotees have predicted the demise of fiat currencies; the system by which individual nations run separate currencies. They've argued the rise of the internet and the arrival of digital currencies would bypass traditional payment methods and undermine the network of central banks that regulate and run the global financial system.

There's no doubt the rise of these new cryptocurrencies will radically alter and dramatically improve the way we pay for goods and services. But central banks and governments are more likely to become players than victims of the revolution.

It was exactly 50 years ago that gold was abandoned as the official foundation for global currencies.

For thousands of years, gold was used as a means of exchange, in coins, and as a store of wealth. Up until World War II, most countries fixed their currencies to a specified amount of gold. But the chaos of the period between the wars forced a shake-up and in 1944 the Bretton Woods system was instituted.

The US dollar became the global currency standard and all other currencies were priced against it. Gold, however, remained the foundation as the US dollar was fixed to the precious metal at $US35 an ounce.

Disgraced US president Richard Nixon called an end to the system in 1971 and abandoned the gold standard as inflation took hold in the aftermath of the Vietnam War.

But gold never really went out of fashion. Central banks continued to hold large stores of it, cementing its reputation as the bedrock for the financial system. Not surprisingly, investors would flock to it at the first hint of inflation or any other political or economic upheaval.

Gold always has been the ultimate store of wealth.

Why? For a start, it is rare. It also is attractive. And it has a relatively rare molecular structure that makes it incredibly stable. That makes it useful, not just in jewellery, but in high level industrial applications including electronics.

There are some uncanny similarities between Bitcoin and gold.

Like gold, Bitcoin is rare. The total supply has been limited to 21 million tokens. And the pace at which the tokens are released periodically is slowed, so that the final coin won't be minted until around 2140.

As a result, it becomes increasingly more difficult and more expensive to "mine" new Bitcoin. That has raised concerns about the impact on the environment, where the computing power required to "mint" new coins chews through enormous amounts of energy.

Professor Jason Potts from RMITs Blockchain Innovation Hub explains how digital money works.

Unlike gold, however, Bitcoin is virtual. It exists in the ether and has no utility or use other than as a means of exchange.

What it does have is an underpinning ledger system known as blockchain that enables data storage to be decentralised so that it cannot be controlled or manipulated.

Blockchain technology has applications far beyond cryptocurrency with potential uses in cars, financial services, voting, polling and even healthcare and is being widely adapted and adopted by a range of industries.

It's not just blockchain that unites cryptocurrencies. In recent months, a vast number such as Ethereum, Ripple XRP and even a joke currency called Dogecoin, all have soared on the back of the huge lift in Bitcoin.

Gold in contrast, has been on the decline since peaking in August last year. Even the chaotic slide on global bond markets in February and March this yearfailed to fire it up. Government bond prices cratered on fears of a return of global inflation, the kind of news that ordinarily would see gold spike.

The precious metal reacted as expected through most of last year though. It gathered strength from January on as the pandemic rippled around the globe.

Bitcoin, in contrast, tanked as stocks and most risky assets plummeted. It only gathered steam once vaccines were developed and as the US election result lit a fire under global stock markets.

Perhaps cryptocurrencies will replace gold as the ultimate store of wealth at some point. They may even become the currencies of the internet, enabling safe and secure transactions.

Judging from movements over the past year, they remain yet another speculative, volatile and risky investment. But their time may be rapidly approaching.

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Will Bitcoin replace gold as the ultimate store of wealth? - ABC News

Jack Taylor | Getty Images

LONDON Ether hit an all-time high Thursday as bitcoin's dominance of the cryptocurrency market declined.

The world's second-largest digital currency by market value surged to a fresh record of $2,800 on Thursday morning, according to data from Coin Metrics. Bitcoin, the top digital coin, was slightly lower at a price of $54,471.

The move comes after the European Investment Bank announced Wednesday that it had issued its first ever digital bond on the Ethereum blockchain, ether's underlying network. This led to speculation that the currency is gaining traction among mainstream financial institutions.

Most major cryptocurrencies were trading higher Thursday, boosted by ether's rise. Bitcoin, the most valuable digital coin, is down about 16% from its all-time high of almost $65,000 earlier this month. It has still had a stunning rally, though, climbing almost 90% so far this year, on the back of increased interest from institutional investors and corporate buyers like Tesla.

At the same time, some investors have warned of froth in the crypto market. Dogecoin, a meme-inspired digital token, rallied Wednesday after supportive tweets from celebrities like Elon Musk and Mark Cuban.

And plenty of other "altcoins," or alternative currencies, have also rallied this year. This led to bitcoin's dominance of the crypto market falling below 50% last week for the first time since August 2018, according to CoinMarketCap.

The first time bitcoin's share of the market sank below that level was in 2017, before a huge slump in crypto prices now referred to as a "crypto winter." But bitcoin bulls contend things are different this time, as the rally is being driven by institutional demand rather than retail investors.

"There's just so much hype from the institutions coming in," Carol Alexander, professor at the University of Sussex Business School, told CNBC last week. "Bitcoin is almost like a sort reference point, the numeraire of crypto. I think there's going to be sustained demand as institutional investors become more confident about the market."

"Having said that, on the more retail side that used to be in bitcoin, it's not cool anymore," Alexander added. "Everyone knows about bitcoin and we want things to talk about. We don't want to talk about Covid all the time. So much of this is about market psychology. We've been shut inside and haven't had any news to talk about."

Skeptics of cryptocurrencies say that bitcoin and other digital coins are a speculative bubble. Stephen Isaacs, chairman of the investment committee at financial consultants Alvine Capital, told CNBC earlier this month that he thinks bitcoin is in a "bubble" that will burst, citing risks around regulation and climate change.

Ethereum may be coming afterbitcoin, but there are some key differences between the two.For one, Ethereum has several software developers building apps on its network. Ether is the native token of the Ethereum blockchain.

One popular trend in the so-called decentralized app space is NFTs, or nonfungible tokens, digital assets meant to represent ownership of rare virtual items like art and sports memorabilia.Many NFTs are based on Ethereum.

Ethereum is also going through a major upgrade that will push it further from bitcoin, in theory allowing for faster transaction times and reducing the amount of power required to process transactions. Both bitcoin's and ether's networks have attracted criticism from environmentalists over the impact of crypto mining on the climate.

"Post the network upgrade, Ethereum in particular is proving its use-case, and with developers piling on to the platform, it is little wonder it is gaining so much traction with investors," said Simon Peters, cryptoasset analyst for online trading platform eToro.

"Underlying this is demand from institutional investors. While they may now have some exposure to bitcoin, institutions are now diversifying their exposure and Ethereum is the natural next pick, and that leaves the second biggest cryptoasset by market cap well placed to benefit further."

Disclosure: CNBC owns the exclusive off-network cable rights to "Shark Tank," which features Mark Cuban as a panelist.

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Digital currency ether hits a record high, stealing bitcoin's limelight - CNBC

When the price of bitcoin declines, its common to see the terms crash and correction used more or less interchangeably. However, the two words actually mean different things.

Bitcoin crash

A crash is widely regarded in traditional finance as an over-10% drop in price over the course of a single day.

These are often fueled by impactful, sudden changes in the crypto market that cause panicked investors to exit en masse.

While technical factors can have dramatic effects on bitcoins price, large crashes seem to be catalyzed more by fundamental circumstances such as macroeconomic events, major company announcements and sudden changes to international regulations and policies.

The largest crash ever recorded on bitcoins chart took place on April 10, 2013, shortly after the U.S. Financial Crimes Enforcement Network (FinCEN) shut down crypto exchange Bitfloor and announced bitcoin exchanges needed to register as money transmitters. Bitcoin prices collapsed over 73.1% in 24 hours, according to Bistamp data, from a height of $259.34 to a low of $70.

During more recent times, the infamous Black Thursday crash of March 12, 2020, takes the top spot as the biggest crash after prices fell 40%, from $7,969.90 to $4,776.59, following the World Health Organizations declaring of the coronavirus a global pandemic.

Correction

A correction is characterized by a gradual decline where prices drop more than 10% over the course of several days.

These usually indicate bullish traders have become exhausted and need time to consolidate and recover. Exhaustion occurs when a majority of buyers has bought the underlying asset and there are no more new buyers appearing to support the uptrend. If sell orders continue to pile in without anyone on the other side of the order book buying them, prices start to fall.

Corrections can be influenced by minor events but tend to be initiated by technical factors such as buyers running into strong resistance levels, depleting trading volume and negative discrepancies between bitcoins price and indicators that measure its momentum like the Relative Strength Index (RSI).

High volatility

Bitcoin is known for being a highly volatile asset. This means its price tends to fluctuate significantly over a relatively short period of time compared to other assets. Its also why many traditional financial investors, including Warren Buffett and Carl Icahn, consider it a highly risky investment.

According to recent data, bitcoins one-year volatility stands at 32.7% significantly higher than the next most volatile assets and asset classes, which are oil, U.S. stocks and U.S. real estate (18.8%, 8.41% and 7.15%, respectively.)

While this high volatility has its upsides, particularly during bull cycles where prices can rise dramatically, it also means prices crash and correct on a frequent basis.

Since Jan. 1, 2021, there have been seven notable price moves on bitcoins daily chart trading against the U.S. dollar. Four of these movements have been to the downside (red boxes) with a mean average loss of 25.94%, while the other three have been to the upside (blue boxes) with a mean average gain of 58.36%.

BTC/USD chart

Knowing which downtrends are corrections and which ones are crashes can help you to better understand the market and how bitcoin traders react to certain fundamental and technical factors. In some events, crashes can foreshadow the arrival of a bear market and a prolonged period of cascading prices, whereas corrections can often be a sign of a healthy uptrend recovering to a support level before retesting a former high.

So the next time you see bitcoin prices dip into the red you should be able to tell if theres a correction taking place or a crash, and whether or not the market is going through a healthy recovery or likely reacting to a sudden announcement.

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Bitcoin Crash vs. Correction: Do You Know the Difference? - CoinDesk - CoinDesk

Peter Wolfendale is a philosopher based at Newcastle University in the United Kingdom. His interests range from metaethics to artificial intelligence. He was a founding voice in one of the truly original branches of thought that found expression on the internet, left-accelerationism, as well as a pioneering figure in the blogosphere. Suffice it to say, if its on the cutting edge, Wolfendale has thoughts about it.

CoinDesk reached out to Wolfendale for an interview about Bitcoin to ask why its a tool for emancipation, how it reproduces existing forms of prejudice and what it might mean for the future of capitalism.Here is what he had to say:

How does your interest in philosophy intersect with Bitcoin?

For the better part of the last decade, my work has been driven by the idea that philosophy of mind and philosophy of artificial intelligence are essentially the same thing: To understand what it would be to create systems that are generally intelligent and practically autonomous in the way we are is essentially to understand what we are ourselves.

This intellectual journey convinced me that philosophy of computer science isnt a niche subfield, but a lens through which the others need to be understood. Not only are individual human beings already computational, but so are the social, political and economic systems that weve built for and out of ourselves.

Its impossible not to be awed by the ambition of the cryptocurrency community: to reinvent money for the age of planetary-scale, distributed computation. Its also impossible to deny that its made a lot of concrete progress in a short space of time. But my job is to see if theyre guided by the right abstract questions about money and similar social institutions, and to tentatively suggest some better ones.

What are the most exciting things happening in crypto?

Some people are excited by crypto as a source of ROI (return on investment). Others are excited by it as a way of designing and implementing new sorts of social organization. These arent mutually exclusive, and a lot of people are motivated by both. But theres an understandable tendency to overestimate how compatible they are, and the resulting hype can push the ecosystem in questionable directions.

The obvious example here is NFTs (non-fungible tokens), which are really interesting from a technological perspective, but are caught up in exactly the wrong sort of excitement. Theyre a direct demonstration that scarcity is a precarious substitute for use-value. The really exciting things are better ways to handle anonymity, decentralization and coordination. From a feature perspective, that means the spread of zero-knowledge proofs, systems optimized for dapps and multi-chain interoperability, and mature proof-of-stake protocols with on-chain governance.

Youve said in the past that bitcoin is more or less recreating existing monetary phenomena from banks to bank fraud. Is there a way to develop an alternative monetary framework that doesnt repeat errors or make things worse?

People often say that money does three jobs: a medium of exchange, a store of value and a unit of account. Bitcoin started out as a decentralized medium of exchange, but its not really very good at that. Instead, its become popular as a store of value: not so much digital gold coins as a distributed Fort Knox.

This is predicated on the belief that at some point itll become stable enough relative to other assets to function as a unit of account. The problem here is that its less about bitcoin being good at this job, than a self-fulfilling prophecy driven by network effects.

Money also quantifies privilege. It gives you access to a certain share of the output of the whole system of production, a share you earn by having a stake in that system. These arent the only sorts of privileges that can be quantified. If you acquire shares in a company, you dont just get dividends, you get votes.

In liberal, democratic states, political control and economic activity are nominally separate, but your stake in the system as a whole gets you a non-transferable token you can spend in elections to rebalance its overhead (e.g., taxes and spending). A major reason this model is decaying is that monetary sovereignty is less and less able to manage this balance.

How and why are matters of extreme controversy. But its clear to me that any improved social contract, liberal or post-liberal, will need to rethink the relationship between currency, geography and accounting. Precious metals, printing presses and TBTF (too big to fail) banks arent going to cut it.

Youve said scarcity is a blunt instrument with which to build financial infrastructure. Considering the current macroeconomic landscape of easy money and low rates, what is the alternative?

The scarcity we should be interested in isnt in the money supply, but in the output of the economy: the goods and services we consume. Are we more interested in conserving our share of this output than in the quantity, quality and sustainability of that output as a whole?

The banking ecosystem is responsible for securing value in the physical and social infrastructure that lets us live our lives. Its pretty obvious to many of us that its no longer doing this job well. Its progressively geared towards creating opportunities for rent extraction and minimizing risk for protected classes of investors. Theres no real trust in these institutions, even if weve no choice but to rely on them.

Money is power and power has a nasty tendency to ratchet itself

If DeFi (decentralized finance) wants to be better, it needs to do more than guarantee our share of the pie will remain stable as the pie slowly rots over time.

Theres not one simple trick for doing this. But here are two lines of thought riffing on existing organizational forms:

Tokens are more versatile than legacy units of account, and we should use them to build more decentralized and transparent successors to the fractional reserve model.

Is bitcoin actually a tool for reducing inequality?

Not as far as I can see. Any currency system which is optimized to fight inflation and act as a store of value is going to preserve and heighten inequalities in the long run. And this is before we talk about relative energy costs and related environmental externalities.

At the end of the day, money is power, and power has a nasty tendency to ratchet itself unless its checked in some way. Decentralization isnt a sufficient check all on its own.

Youve been critical of some aspects of the bitcoin worldview, which requires a high degree of individual responsibility. This is perhaps best exemplified by the phrase be your own bank. What are the issues of switching responsibility for personal wealth from banks to individuals, or of trust minimization across the web?

The problem is that most people cant be their own banks. One aspect of this is technical competence, which can be mitigated by better software and cultural change. The other is physical protection and insurance. Though cryptography and software verification can seriously narrow down the range of possible attack vectors on your assets, they cant eliminate them entirely. Anonymity helps, but only so much. Were social creatures, after all.

The old adage that crypto is a playground for market-oriented libertarians has been challenged by the recent bout of conservative corporations (like insurers) and Wall Street giants buying up bitcoin. How will this trend play out? Will there be room for cypherpunks in 10 years?

Honestly, its hard to say. But the two types of excitement I talked about earlier are going to increasingly pull apart, and this is going to feed into a much wider debate about cypher-politics. Current arguments are split between three camps: 1) the market is good, and big business can be trusted with your data (cypher-capitalists); 2) big business cant be trusted with your data, but big government can be (cypher-liberals and cypher-tankies); and 3) neither of them can be trusted with your data, and its up to you to find the tools needed to protect your own privacy (cypherpunks).

I think what may be missing is a model of government that, rather than protecting your privacy by monopolizing your data, protects your privacy by providing the tools and infrastructure for you to do so yourself (cypher-socialism). For example, keeping track of your own purchasing history and media selections and running recommendation algorithms yourself, rather than depending on Amazon or Spotify.

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Why Care About Bitcoin? Here's One Philosopher's Take - CoinDesk

Bitcoins Taproot update has finally begun its Speedy Trial.

Todays difficulty adjustment kicks off the first phase of activation for the upgrade, Bitcoins biggest in years which (among many things) will make Bitcoin multi-signature transactions cheaper, more private and easier to deploy.

Starting today, miners who wish to adopt the upgrade can signal their support by including special data in the blocks they mine called a signal bit. If 90% of the blocks mined during this difficulty period include the Taproot signal bit (or any of the other roughly two week difficulty periods that occur between now and the August 11 timeout), then the upgrade is locked in for activation in November of this year.

Unlike a centralized network that can be changed unilaterally, a decentralized network like Bitcoin requires coordination from a global userbase to make substantial changes to its code, and it also requires intensive coordination among stakeholders to deploy these changes (as evidenced by the months-to-year-long discussions, not on the uncontroversial upgrade, but on how to bring it online).

Taproot when?

So if everything goes as planned, Taproot will be live on Bitcoins blockchain before the holiday season. If the network doesnt achieve the 90% threshold before the timeout, then the upgrade fails and we are back to the drawing board.

This isnt likely, though. Miners have already pledged their support for Taproot, so its really a matter of when, rather than if, said Poolin VP Alejandro del la Torre, who ran the original mining pool survey to gauge Taproot support among the mining community

I am confident it will happen, he told CoinDesk, adding that up to now, there has not been one complaint from our miners at Poolin about our wish to upgrade to Taproot.

Suredbits and Bitcoin Core developer Ben Carman told CoinDesk that the network will pass [the signaling threshold] most likely in the second difficulty period.

Previous soft forks, besides SegWit, all activated near the very beginning of their activation window, and that was all with needing 95% of miners now we only need 90%, he said.

Not as surefire but still voicing similar sentiments, prolific Bitcoin developer Matt Corrallo said he is cautiously optimistic.

Anyone wishing to track the percentage of Taproot-signalled blocks per period can visit Taproot.watch.

Fork in the road

A release candidate for Bitcoin Core 0.21.1, which contains Speedy Trials activation logic, is now available on GitHub.

Two weeks before this software release for Bitcoin Core (the client that runs ~98% of the Bitcoin network), Bitcoin developer Bitcoin Mechanic released an alternative Taproot activation client in concert with others like renowned yet controversial Bitcoin developer Luke Dashjr.

This version is compatible with Bitcoin Core up to a point; if miners signal, then Taproot activates network wide no issue, but if miners dont, this alternative client includes a flag day for mandatory activation in October of 2022.

This user activated soft fork (UASF) scenario allows node operators to reject blocks from miners who dont signal for Taproot to essentially force the upgrade.

Bitcoin stakeholders couldnt come to consensus on whether or not to include a UASF in Bitcoin Cores activation, hence the months of debate. Critics argued that theres no need for such extensive deliberation, given that miners have shown no opposition to Taproot, unlike the way they did with SegWit (a 2016/17 upgrade which required the threat of a user activated soft fork to bring to fruition).

People are shadow boxing casper right now lol, Lightning Labs CTO Olaoluwa Osuntokun said at the time, suggesting the calls for a UASF come from PTSD from the SegWit saga.

Proponents of the UASF say that its necessary to reinforce the precedent that node operators ultimately decide upgrades, not miners. (Miners may run nodes and provide an necessary utility for the network, but shouldnt have outsized sway, the argument goes.)

Judging by the data and sentiment we have now, though, it probably wont have to come to a UASF, but well know for sure come August.

Read more from the original source:
Bitcoin Taproot Upgrade Has Started Its Speedy Trial - CoinDesk

At CNBCs Stock Draft, an annual stock-picking competition, bitcoin was the number one pick. Tim Seymour, the founder of Seymour Asset Management, believes that the government will come out with regulations that support bitcoin. He is confident that the cryptocurrency will take him to the top this year.

CNBCs 2021 Stock Draft, an annual stock-picking competition, began last week. There are 10 contestants or teams of different professions. Each team makes 2 picks from a list of 60 stocks and other investments.

The teams are led by asset manager Tim Seymour of Seymour Asset Management, professional poker player Maria Ho, Olympic swimmer Ryan Murphy, Shark Tanks Kevin OLeary (aka Mr. Wonderful), and The Stock Guy Jason Frank. Also competing are mentalist Oz Pearlman, supermodel Petra Nemcova, Tiktok star Josh Richards, professional basketball player for the Miami Heat Andre Iguodala, and Chief Investment Strategist and Portfolio Manager at Hightower Stephanie Link.

The founder and chief investment officer of Seymour Asset Management, Tim Seymour, won a drawing to make the first pick for the competition this year. The last time he got to make the first pick was in 2019 when he picked General Electric.

As an experienced investor in the cannabis space who manages Amplify Seymour Cannabis ETF (CNBS), Seymour was expected to pick a cannabis stock first. However, he chose bitcoin as his top pick this year, stating:

It wasnt easy. Theres no Trevor Lawrence out there [but] Im happy to say no cannabis. Im taking the bitcoin talents to South Beach. Thats right. Number one pick: bitcoin.

The winner of the Stock Draft competition will be the one whose stocks have the highest average price appreciation between the closing price on April 29 and the close on Feb. 11, 2022.

Regarding the bitcoin chart, which some say looks troubling at least in the near term, Seymour replied, Im not worried about the near term and weve seen multiple pullbacks in bitcoin. While admitting that he would have loved to have bought BTC at $20K ago, he said, the sense for me is that we are starting to see much broader institutional adoption.

Seymour further opined:

I expect a policy to follow through that is going to be very supportive of bitcoin Bitcoin is going to take me to the top.

Seymours second pick was Tilray, a global leader in cannabis research, cultivation, processing, and distribution. Kevin OLeary, another bitcoin proponent who has 3% of his portfolio in the cryptocurrency, picked Alphabet and Palantir.

Do you think bitcoin will outperform other investments and help Seymour win this years Stock Draft competition? Let us know in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons, CNBC

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Bitcoin Is Number One Pick Asset Manager Confident BTC Will Take Him 'to the Top' in Stock Draft Competition Bitcoin News - Bitcoin News