Category Archives: Bitcoin

The world is becoming increasingly volatile and uncertain. The assertion that inflation is the silent thief is becoming less relevant. In 2021, inflation has turned into a rather loud and brazen robber. Now, inflation is at its highest in the last forty years, already exceeding 5% in Europe and reaching 7.5% in the United States. The conflict between Russia and Ukraine affects futures for gold, wheat, oil, palladium and other commodities. High inflation in the U.S. and Europe has already become a real threat to the capital of tens of thousands of private investors around the world.

Last week at the Federal Open Market Committee (FOMC) meeting, Federal Reserve Chairman Jerome Powell said that he would recommend a cautious hike in interest rates. At the same time, Powell mentioned that he expected the crisis in Eastern Europe to not only result in increased prices on oil, gas and other commodities but boost inflation, too. Powell also explicitly reaffirmed his determination to raise the rate as high as necessary, even if it will cause a recession.

Many investors are looking for ways to protect their savings from inflation using cryptocurrencies.

Chad Steinglass, head of trading at CrossTower, is skeptical about cryptocurrencies as a defensive asset. Steinglass commented to Cointelegraph:

Indeed, cryptocurrencies differ from fiat currencies in their volatility. Even the most stable cryptocurrencies, Bitcoin (BTC) and Ether (ETH), which are of great interest to institutional investors, can rise and fall by tens of percent within a day.

Of course, there are more use cases for Bitcoin each day, and it already functions as a base layer for the emerging alternative financial system. In the longer term, this trend will develop which will not only increase the price of Bitcoin, but also result in a gradual decrease in its volatility.

To protect money from inflation, investors buy gold, cash or real estate. Speaking to Cointelegraph, Paolo Ardoino, chief technology officer at crypto exchange Bitfinex, compared Bitcoin to gold:

Jeff Mei, director of global strategy at digital asset platform Huobi Global, also shares this opinion. Mei said that Bitcoin is a great hedge against inflation because there is only 21 million Bitcoin available once theyre all mined.

Investors often use derivatives in traditional financial markets to protect savings from inflation. Rachel Lin, co-founder and chief executive officer at trading platform SynFutures, said that by using derivatives such as longing Bitcoin futures, investors could get exposure to BTC with much less capital and limit potential losses.

But, Ardoino does not recommend that investors use crypto derivatives to this end. He thinks that direct exposure to Bitcoin, which he calls the king of crypto, is more advisable.

In addition to Bitcoin, Mei singles out Ether as one of the most stable digital assets. He opined to Cointelegraph that Ethereums competitors such as Polkadot (DOT), Terra (LUNA) and Solana (SOL) could be viewed as a store of value as well.

Lin pointed out that if investors are simply looking for a way to earn fixed income, they could convert their fiat to crypto and deposit it on some of the larger centralized finance (CeFi) platforms or blue-chip decentralized finance (DeFi) protocols. Potentially, this gets a much higher return than depositing cash in a bank.

Steinglass remains skeptical about comparing cryptocurrencies to the dollar in the current situation now that the conflict in Eastern Europe caused the USD to spike in value relative to many other currencies as people scramble for stability. For the moment, demand for dollars has outstripped the fear of inflation. Steinglass added:

None of the experts interviewed by Cointelegraph mentioned gold-backed stablecoins such as PAX Gold (PAXG) as their preferred defensive asset. Historically, however, gold has been a traditional tool used to protect capital during times of financial turbulence. Gold constantly increases in price over time. Throughout all of 2021, the price of gold sat between $1,700 and $1,950 per ounce. It went up further to $2,050 an ounce in 2022.

Institutional investors have been showing an increased interest in gold-backed stablecoins, but the same cannot be said about the younger generation of retail investors. Perhaps the main problem with gold-backed stablecoins as a hedge against inflation is not technology but ideology. For many crypto folks, both fiat currencies and assets like gold represent old values.

It is clear that in 2022 inflation will remain a threat to investor capital, and the crypto industry has yet to find its answer to the question of combating this silent thief.

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Cryptocurrencies against the silent thief: Can Bitcoin protect capital from inflation? - Cointelegraph

In January 2020, Bitcoin Magazine published a description of Why Proof of Reserves is Important to Bitcoin.

The timing was no accident - the recent anniversary of the QuadrigaCXs implosion kept fresh in many of our minds the risks we were striving to allay, especially here in Canada.

Two years might not sound like a long time to the average person, but its a significant stretch of history in the world of cryptocurrencies - its more than one-seventh of Bitcoins entire existence. By looking at industry progress in terms Proof of Reserves, we can see just how much can happen in that span of time.

In that early 2020 piece, Mauricio Di Bartolomeo was joining the chorus of several voices already advocating for this opportunity to accelerate Bitcoins rise in legitimacy and professionalism.

Jason Tyra had written several pieces between 2014 and 2015. Steven Roose of Blockstream put forth some proposed standards in early 2019, soon advocated for by Matt on a personal blog post and Nic Carter had been banging his own drum, publishing several articles and podcast interviews on the topic, as well as using his extensive public reach to signal-boost the other advocates.

But real-world implementations were still thin on the ground, with little to show since 2014, when Kraken had sought to prove its reserves after the Mt. Gox debacle.

How exactly Proof of Reserves would emerge as a real-world phenomenon, remained to be seen.

Proof of Reserves is the extension of a rather simple observation; a service that holds a publicly validatable asset like bitcoin on behalf of clients, can choose to publish independently verifiable proof of the asset reserves in their possession.

One of the two challenges Iaid out in Bitcoin Magazines previous piece involved growing pressure on custodial services to lend out their assets in order to generate yield. Indeed, this practice has positively boomed in the past two years. Rather than being seen by the industry as a tempting vice to be resisted, many Bitcoiners have embraced the development and sought to earn interest on their assets.

An on-chain Proof of Reserves purist from years past might have been troubled by this trend, seeing it as an growing obstruction of the precise form of industry transparency to be desired. But the idea of verifiably-balanced assets and liabilities can be applied to more than just 100% reserve custodial models.

Indeed, in January 2021, Ledn became the first lender in the Bitcoin industry to offer Proof of Reserves as a service to its clients. By engaging with third-party accounting firm Armanino LLP, which produced an anonymized Merkle tree where each leaf represented a client balance, clients could individually verify through the third-party firm that their assets were indeed accounted for.

The case was made clear: Proof of Reserves is a viable feature for customers, no matter the reserve model.

There had already been a modest start in 2020.

In May of that year, Gate.io provided proof of 100% collateral, the end result of a months-long effort beginning with a January 1 snapshot, and by September 2020, CoinShares was offering a real-time audit with Armanino as well.

But it was in 2021 that momentum really began to build.

As mentioned above, the year started with Ledns implementation, and the pace accelerated as the months wore on.

August was an eventful month in particular. Not only did Ledn make good on its intention to perform Proof of Reserves every six months by publishing its second attestation, but BitMEX entered the fray as the heaviest hitter yet (as measured by assets under management).

The BitMEX Research Desk published a characteristically thorough technical breakdown of the industry state of proof of liabilities and assets, and immediately followed BitMEXs own demonstration of full reserves, independently verifiable by any customer with a modest amount of technical skill.

By September, Nexo joined Ledn as the second lender to offer an attestation with Armanino, this time with a rolling real-time implementation.

In early February this year, Kraken offered proof of their bitcoin and ether holdings totalling $19 billion, ending an 8-year hiatus from their first Proof of Reserves published in 2014.

Suddenly, Proof of Reserves isnt just a twinkle in a visionarys eye, or even an exceptional feature provided by an industry forerunner or two.

It is becoming a feature that clients can, and should, expect.

Like Bitcoin itself, Proof of Reserves is much more than just a technological tool - it has ideological implications. It is the realization of the belief that transparency and individual verifiability is paramount, and that it need not end with self-custody.

If bitcoin is to become a global money, there will be custodians. There will be lenders. They fulfill essential roles on the road to mass adoption. Open-source wallets and specialized hardware are incredible developments for self-sovereignty and their importance should not be understated. But they will never comprise the entirety of Bitcoins economic activity.

Bitcoins openness and auditability allows its users to demand more transparency from bitcoin service providers. Instead of resigning ourselves to the risks inherent in custodial models, we can strive to standardize solutions and mitigations to alleviate those risks and ultimately help to drive faster and broader adoption.

Demanding Proof of Reserves from the services you use is one of the most powerful ways to do just that.

This is a guest post by Mario Gibney. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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Proof Of Reserves The Making Of A Bitcoin Industry Standard - Bitcoin Magazine

Back in 2017, before much of the general public had given cryptocurrency a second thought,Alessandro Stortini started accepting bitcoin as a form of payment at his local farmers market stand, La Pasta.

Since that time, virtual currencies have become mainstream as everyone from grandmas to pro athletes have jumped into the world of crypto. In fact, from 2017 to 2022, the number of crypto wallets went from under 12 million to over 81 million by January of 2022.

If youre like me, youd figure with almost seven times as many cryptocurrency wallets out there, the number of people looking to spend their virtual currency to buy pasta at their local farmers market would have gone up. Not so, according to Stortini.

We got way more customers paying with bitcoin in 2017, Stortini said.

Stortini told me the reason for that is because back in those early days, crypto owners were more willing to use it as a form of payment.

There was more buzz back then and more people not doing it as an investment, but instead just spending it.

According to Stortini, as bitcoin and other crypto markets crashed in 2017-18, many continued to spend their cryptocurrency as they tried to unload it. However, as cryptocurrency values hit the stratosphere in recent years, thats all changed.

More people are holding than ever, Stortini said. Its harder to get it out of people than back then.

Stortini operates at 18 different farmers market locations across the Puget Sound region per week and gets, on average, one or two cryptocurrency transactions per day at each location. The type of coin varies depending on the location.

Edmonds (a city north of Seattle) is the more heavy crypto market. Edmonds is all bitcoin. West Seattle and Capitol Hill are really obscure coins. A lot of Monero and trendy coins like Doge.

Stortini, whos helped a couple of his fellow farmers market vendors get set up to take crypto payments, says accepting bitcoin and other coins has just gotten easier over the years.

Its just like scanning a Venmo. A lot of the vendors at this point have a QR for their Venmo or for other things.

So what does Stortini do with the virtual currency he gets from his customers? Like other crypto enthusiasts nowadays, hes long on bitcoin and other coins.

Ive never cashed out any of this stuff weve taken through the business. But, with one or two transactions a day, its better to let it sit.

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This Farmer's Market Vendor Has Accepted Bitcoin for 5 Years. Here's How Things Have Changed. - The Spoon

Despite the fact that the crypto executive order bolstered the cryptocurrency market, there are still fears about rising inflation. The entire attention will be on the impending rise in U.S. inflation, which is projected to be exacerbated by the current geopolitical scenario.

The Federal Reserve (Fed) has historically had the largest impact on cryptocurrency markets, whilst European Central Bank (ECB) rate choices have had little to no impact. Thursdays statement, according to one observer, is crucial.

Bitcoin has risen above $40,000 twice in the last month, but it hasnt been able to hold this level for very long. The Federal Reserve of the United States can hike interest rates faster than expected in the face of rising inflation data, therefore volatility is likely to endure.

A seasoned trader who emerged into the crypto scene after correctly predicting Bitcoins 2018 crash is revising his thoughts on the leading cryptocurrency. After a significant bounce from $38,000 to over the $42,000 level, Peter Brandt feels BTC is developing an attractive pattern.

The investor informs his Twitter followers that the top digital asset by market capitalization is displaying an interesting technical setup. BTC Price has now climbed above a historic level of support and resistance around $41,757, while also posting a higher low after striking a bottom at $33,500, according to his analysis.

BTC is the king of digital assets, according to the senior expert, and traders who opt to diversify their BTC holdings into other crypto assets may regret it in the future.

Also Read : Bitcoin Primed to Breakout on 28th March, BTC Price May Hit $50K Very Soon!

With that in mind, Brandt says he isnt a fan of HODLing Bitcoin because of the dramatic drawdowns, which can compel traders to wait a long time for their holdings to be profitable.

Im NOT a fan of hodling Bitcoin. Bitcoin has a history of 80% declines, 4 in 11 years. A hodler needs 400% each time to return to [all-time highs]. I hate having to make the same money over and over and over again. Hard enough the first time.

As global markets continue to grapple with the economic consequences of the Russian-Ukrainian conflict, BTC has demonstrated a significant degree of price volatility this week.

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Here's Why Bitcoin (BTC) Price Might Drop To This Level In ...

The cryptocurrency market saw a short spike in value after details surfaced on President Joe Biden's new executive order aimed at adding a regulatory framework for digital assets.

The spike in value came after a statement from Treasury Secretary Janet Yellen was posted to The Treasury Department's website on Tuesday night. The statement from the Treasury Secretary revealed that the new executive order will strike the right balance between encouraging innovation in the space while also protecting investors. The statement from the website has since been removed, but not without publications such as Bloomberg picking it up and running the story, leading to the spike in Bitcoin's value.

It should be noted that Biden announced that the executive order doesn't lay out any specific positions the administration has taken on digital asset regulation but instead hands the task over to various agencies that will focus on creating a policy framework for six key areas: consumer protection, financial stability, illicit activity, US competitiveness, financial inclusion, and responsible innovation. Additionally, the Biden administration wants to explore "the technological infrastructure and capacity needs for a potential" digital version of the US dollar.

[It's] unequivocally bullish for the crypto ecosystem over all timeframes. It's easy to lose sight of how much ground this ecosystem has covered in the last two years in terms of legitimacy and stance from the US government, but this E.O. makes it clear the US government is not banning crypto, it is embracing it," said Travis Kling, CEO at Ikigai Asset Management.

For more information on this story, check out this link here.

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Bitcoin price spikes after details of Biden's new ...

The broader cryptocurrency market is once again staging a solid 5% recovery today. In a surprise move, Bitcoin (BTC) has bounced back 7% moving to $41,500 levels. The recent bounceback follows after the last weeks of strong volatility in the market.

It seems that the market is already giving a thumbs up to the upcoming executive order coming from the Biden administration. Bitcoin and the whole of the crypto market can play a very important role considering the current geopolitical situation emerging from the ongoing Russia-Ukraine war crisis.

Recently, commodity prices have been on the rise with Gold taking a center stage. On the other hand, risk assets like Bitcoin and equity have witnessed major downside. However, as per on-chain data provider Santiment, crypto discussions continue to gather pace.

In his latest report on Wednesday, March 9, DBS Holdings Group Ltd. Chief Executive Officer Piyush Gupta said that private cryptocurrencies like Bitcoin will continue to emerge as a meaningful store of value. He added:

Regulators and politicians will be loath to give up control of monetary policy and economic management tools, and will therefore be very circumspect about letting private money grow. Having said this, I do think that private money (crypto) will continue to grow as a meaningful store of value, much like gold is today.

The bounce back in the altcoin space is quite similar to that of Bitcoin. Ethereum (ETH) is up 6% and is currently trading at $2,708 levels with a market cap of $324billion.

Terras LUNA is leading the altcoin market rally with a solid 18% gain. As of press time, LUNA is trading at $94. Besides, LUNA has also shown strong resilience during the recent market turmoil thereby giving strong returns to investors. Analysts are expecting that LUNA can move past $100 and possibly touch a new all-time high.

Disclaimer

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

About Author

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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Bitcoin (BTC) Shoots 7% Back Above $41,000, Terra's LUNA ...

Bitcoin is not only the name of a digital currency but also an open payment system. With Bitcoin, you can send money - bitcoins - to anyone on the internet with no middle man. Bitcoin transactions are secured by military-grade cryptography and processed within minutes on a public network that doesn't discriminate against participants or transaction size. For further details visit https://bitql.org/.

BTC as Internet Cash

Bitcoin is often called "Internet Cash" because it's similar to paying someone with cash over the internet. Bitcoin works anywhere all the time.

Bitcoins are digital coins you can send through your computer or smartphone without needing to trust any third party for security. Bitcoin transactions are irreversible once broadcast onto the blockchain, so sellers don't need to worry about receiving fake BTC payment confirmations.

You're probably wondering how Bitcoin works under the hood. Bitcoin is different from what you know and uses every day. Before diving into Bitcoin, it helps to first understand some basic background information. Bitcoin is like the Internet of money - a network of devices (computers, smartphones) connected to the Bitcoin network that exchange bitcoins with each other.

This is how Bitcoin works: Bitcoin wallets store private keys, secret codes that allow you to spend your bitcoins on their own or give them away! Many people have more than one Bitcoin wallet because they sometimes need to send money between their wallets rather than sending an entire payment through each time.

When someone wants to spend his/her bitcoins, he/she uses a private key to sign a transaction and broadcast it onto the network. This transaction states how bitcoins are being spent, the number of bitcoins being sent to another Bitcoin address, and where they are coming from. These transactions are signed with a hash function which prevents alteration by anyone once it's been broadcasted. That means these transactions can be trusted as valid since it's impossible for someone to replace what you're sending with something else without knowing your private key!

The Bitcoin network is made up of devices running the Bitcoin client that all follow the same protocol to validate Bitcoin transactions. The Bitcoin client has more than one core component; each of which provides different capabilities to the system.

First, there is bitcoin, also called Bitcoin Core, which maintains a full copy of the transaction ledger (the blockchain), provides wallet functionality, and allows users/applications to interact with the Bitcoin network. Bitcoin Core uses a database called LevelDB which is optimized for fast key-value operations and parallelized data access across multiple CPU cores. Bitcoin nodes also need port 8333 open so they can accept incoming connections from other Bitcoin nodes communicating over the peer-to-peer bitcoin network.

The second core component, bitcoin, helps manage shared settings and provides command-line utilities that allow you to send Bitcoin protocol messages over a secure connection to another network device. For example, if you use Bitcoin Core as your wallet program, it will communicate with remote Bitcoin nodes using TCP port 8332 only when configured to connect through Tor.

Bitcoin transactions are validated by something similar to Proof-of-Work in commodity hardware. Bitcoin is based on a secure memory hierarchy and parallel transaction validation, which makes it difficult and expensive to produce an alternative chain with more total work. (See the Bitcoin whitepaper.)

Conclusion

Although Bitcoin has been around since 2009, very few people use Bitcoin for everyday transactions. Bitcoin ATMs aren't found on every corner like traditional ATMs - yet! Bitcoin can be used by almost anyone in any country because Bitcoin is an open payment system that requires no permission from anyone (such as a bank or government) to participate. The Bitcoin network consists of thousands of computers run by normal people all over the world that are voluntarily running 'mining' programs solving math problems in exchange for bitcoins.

Bitcoin mining was designed so there would only ever be 21 million Bitcoin created. Bitcoin mining is necessary because Bitcoin transactions are irreversible and Bitcoin is designed to be a scarce system resource - only 21 million Bitcoin will ever exist, so Bitcoin mining helps with the distribution of new bitcoins as well as processing Bitcoin transactions by setting up 'blocks' on the blockchain.

Each block contains all transactions processed during that time frame; once each block has been solved (reached its maximum size limit), it can then be appended to the end of the chain of previous blocks which creates an unchangeable record for everyone who uses Bitcoin (the blockchain). One of Bitcoin's most innovative features is that this ledger containing every transaction ever conducted using Bitcoin is stored on every single device participating in the network!

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Bitcoin Payment System

Speaking on PBD Podcast on March 1, Michael Saylor claims that BTC should be defined as the worlds only actual scarcity rather than a commodity or security.

The Commodity Futures Trading Commission (CFTC) and the Securities Exchange Commission (SEC) have been at odds recently over who should have jurisdiction over cryptocurrency within the United States Each is arguing that crypto, and specifically Bitcoin, is either a commodity or security, with both vying for control of the $2 Trillion asset class.

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Like a lot of Americans, Sandy Carter has been getting into crypto. Shes already amassed an impressive assortment of cryptocurrency and NFTs, and she even has a Lazy Lion, an NFT illustration of a lion thats probably worth at least a few thousand dollars on its own. It was only recently, however, that Carter realized she didnt know what would happen to her small but growing crypto fortune if she unexpectedly died.

How do you go about planning for that, because its on the blockchain and its immutable? Carter, a former Amazon executive who recently joined a crypto startup, explained.

Carters not alone. If you dont own cryptocurrency yourself, odds are youre related to someone who does. Some 16 percent of US adults say theyve used crypto, and it feels as though these digital assets are everywhere now, from Super Bowl ads to Bachelor contestants Instagram stories. Crypto is new and exciting, and people want to get in early on whats supposed to be the next big investment trend. That means that things like Web3, NFTs, and decentralized autonomous organizations, or DAOs, are top of mind.

But new crypto investors arent necessarily thinking about what might happen to their digital assets in the event of an untimely death.

This is bad news for many because there arent currently established ways to ensure that crypto is passed on to the next of kin. Without a plan, crypto investors could die and leave their heirs locked out of a valuable source of financial support and no way to get it back. But even the crypto investors who are trying to plan ahead, along with a few crypto-minded tax lawyers and financial advisers, are running into logistical complications. Now theyre racing to figure out how to make inheritance work in the age of bitcoin a morbid reminder that even as crypto enters the mainstream, its still very new.

The nature of cryptocurrency makes it complicated to pass down. Cryptocurrency is usually stored on the blockchain, a digital ledger thats formed by a network of computers throughout the world that record transactions, including the exchange of cryptocurrency. People usually make these transactions by using public and private keys. Public keys work like bank account numbers, and serve as an address that you can use to send other people crypto. Private keys work like passwords, and are made of unique, extremely long strings of characters that unlock your crypto. Unlike other types of passwords, however, private crypto keys cant be recovered once theyre lost or forgotten. That means that without those keys, people who are entitled to inherit their loved ones crypto wont be able to get it.

Most of the time for the assets that we already know and love your car, your house, your clothes, whatever thats handled by law, Pamela Morgan, an attorney who has written a guide to crypto estate planning, told Recode. But with these cryptocurrencies, it doesnt really matter what the law says if you dont actually have access to transfer those assets.

Because theres no formalized way to pass down crypto, investors are coming up with their own sometimes bizarre protocols to guarantee that their heirs will get their digital assets. These plans can involve everything from locking their keys in secret lockboxes to hiring professional services to manage their crypto for their successors. But other crypto owners are still struggling with what to do, and have yet to find financial advisers who know much about crypto or who can even direct them to someone who does.

Technically, nothing. Again, cryptocurrency is stored on the blockchain, so theres a permanent record of it. That means your cryptocurrency will exist as long as the blockchain exists, and regardless of whether youre alive or dead.

How your loved ones will be able to use that cryptocurrency is a different question, one that largely depends on whether they know about it and if they know how to access it. Some people have taken an analog approach: writing down their keys on a piece of paper, and leaving that paper where a family member can find it. Other crypto holders are relying on exchanges like Binance and Coinbase, which allow people to trade and sell crypto on the internet. These platforms will hand over control of your loved ones crypto assets if you prove that youre legally entitled to them the same way a bank would. But some crypto holders dont like these exchanges, which are a consistent target for hackers. Some people also dont like the idea of ceding control of their crypto to a third party, as the concept undermines the reason why many people are drawn to crypto in the first place. Binance and Coinbase dont currently allow account holders to name beneficiaries directly on the platform, either.

Because neither of these approaches is ideal, some people have turned to startups that build tech specifically for crypto inheritance. These include companies like Safe Haven and Casa, which, essentially, allow people to lock their crypto keys within several layers of other private keys, which can then be dispersed across several different people. While this tech is supposed to make inheriting crypto easier, it can also lead to some elaborate procedures.

Rudy Steenhoek, an information manager in the Netherlands, is using a strategy thats sometimes called the dead mans switch. Steenhoek has given his wife a hard drive with a special type of key, and if she uses this key, Steenhoek will receive a notification. If he doesnt respond to that notification within a certain amount of time, the tech will presume hes incapacitated or dead, and his wife will automatically gain access to information she can use to find his crypto assets. While this sounds complicated, his wife wont need to convince any bank, or even Safe Haven the company providing the tech that shes his rightful inheritor.

Ultra wealthy people can afford an approach that isnt as jerry-rigged, and have turned to one of their favorite ways to protect their money, like trusts and family offices. These people most of whom have either gotten rich by investing in crypto early or have since bought crypto as part of their broader investment strategy are storing their crypto with specialized financial institutions that focus almost entirely on managing the crypto assets of the financial elite. Hundreds of families have taken this path, Diogo Mnica, the president and co-founder of Anchorage Digital, one of the main firms providing this type of service, told Recode.

While these approaches vary, theyre all supposed to protect against the nightmare scenario: blocking families from their loved ones crypto forever. Without these keys, families can find themselves searching sometimes for years for their loved ones digital assets. Across the internet, there are pleas for help from people looking for their loved ones crypto. Some families have even hired digital forensic researchers to help them find the lost funds, hoping that they find a clue into where their loved one might have stored a record of their key before they died.

If you dont create a copy of that key and put that key in a safe place where the people that you trust can find it and know what to do with it, then the wealth that youve accumulated in crypto is just going to sit there, Matthew McClintock, an attorney who specializes in cryptocurrency estate planning, told Recode. It just is locked away, stored in its address, and nobody can get to it.

Families have been locked out of enormous fortunes because they couldnt find their loved ones keys. A man named Michael Moody was unable to unlock the bitcoin that belonged to his son, Matthew Moody, who died in a plane crash in California. Matthew Moody was an early miner of bitcoin, which means his crypto would be worth a lot of money today. Similarly, lawyers for the estate belonging to the late American businessman Matthew Mellon, who had a reported $193 million worth of a cryptocurrency called XRP, were locked out of his crypto estate because they couldnt find his private keys, which Mellon had stored on devices scattered across the US before he died. Lawyers were only able to eventually access that crypto because XRP happens to be run by a company that was willing to unlock Mellons crypto a little at a time. This approach wouldnt work for most people, or even for most types of cryptocurrency, including bitcoin and ethereum.

Theoretically, crypto is supposed to put peoples wealth in their own hands. Because you control your private key and your crypto is backed up on the blockchain you dont need to rely on any financial institution to access your money. You can control your crypto entirely on your own, which is why some crypto investors say theyre their own bank, or even self-sovereign.

In this way, inheritance strikes at the root of cryptos libertarian ethos. If you want to pass your crypto on, you need to trust someone, somewhere, with your financial information. If you access crypto by using an internet-based exchange like Coinbase, youve left your key with Coinbase, and youre relying on that companys employees to hand over your crypto when your heir asks for it. Leaving your private key in a lockbox for your spouse might seem simple enough, but you have to trust that your spouse knows what to do with it.

Basically, you have to decide how much you care about your cryptos security when youre still alive, and how much you care about your familys access to that crypto once youre dead.

Striking that balance isnt easy. Some people have shared their keys with their family members for safekeeping, only for that family member to turn around and steal their crypto, Paul Sibenik, a case manager at the blockchain forensics firm CipherBlade, told Recode. And while putting your crypto key information in your will might seem like an easy alternative, these documents sometimes become public during probate, so theres a risk that your crypto key and the ability to spend your crypto becomes public too. Theres also the fact that many Americans havent written a will at all.

Ask anyone that owns stock on the street: What happens to your stocks when you die? They dont know. They havent prepared, said Tyrone Ross, a financial adviser and founder of 401STC, a storytelling consultancy. Crypto is no different.

Theres no perfect solution: Anyone who owns crypto could run into problems passing down crypto if they dont make a plan. In the meantime, cryptos value continues to grow, which means the stakes are only getting higher. Ten years ago, bitcoin was worth a few hundred dollars; last fall, it reached a record high of $68,000. That means even just one bitcoin is now enough to cover expensive medical bills, college tuition, or even a downpayment on a house. In fact, crypto is so valuable that you might even owe taxes on it. The IRS considers virtual currency a form of property, so you might owe the government money if you sold crypto after inheriting it.

At the same time, that people are inheriting crypto is just another sign that cryptocurrencies have become a real part of everyday finances. After all, you can now access crypto from ATMs, mobile payment apps like Venmo, your credit card company, and even your job. So many people have crypto that these digital assets are even popping up in divorce proceedings. Since crypto has become such a big part of life, it makes sense that it would become a part of death, too.

But in many respects, the uncertain state of cryptocurrency estate planning is evidence that we still dont know what role crypto will ultimately play in our lives, and that were still figuring out how to even use it. What we do know is that none of us live forever, even if our crypto might.

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Your bitcoin and crypto may outlive you, so plan ahead - Vox.com

Satoshi Nakamotos invention was made to be apolitical.

It was made for users to avoid being held monetary hostage to rulers who didnt approve of their transactions or their political defiance. Its existence means that despicable dictators cant take funds from you or stop you from transacting over its apolitical payment rails.

Flashy words like uncensorable and without a trusted third party might not mean much to rule-abiding Westerners who have never had their accounts seized, their payments blocked, or their assets sanctioned. For some of the millions of people living under questionable regimes worldwide, the lifeline that Bitcoin provided has been the difference between life and death, survival and starvation. The ability to get out, and to avoid the controls that rulers place on you, was always Bitcoins greatest promise.

In recent years, the examples where Bitcoin has excelled in humanitarianism are plenty and Bitcoiners have proudly treasured this, showing how the orange coin was above the rest of the cryptospheres memes and pump-and-dump schemes. Bitcoin has allowed individuals and small, marginalized groups to stand up to dictators, finance Belarusian insurgents, let Nigerian web designers bypass their corrupt regime, allow Argentinians a workable store of value and let them avoid capital controls and fix Palestinians monetary headaches. Salvadorians have since last year been able to remit funds back to El Salvador better and cheaper than they could before.

Simply put: Bitcoin fights monetary colonialism. It is freedom money.

We got a preview of that point earlier this year with the Canadian truckers and their crowdfunding hassles. A government with a strong political agenda turned the apparatus of the state onto the protesters of which its leaders so aggressively disapproved calling them names, prosecuting them for made-up charges, blocking payments, voiding insurance policies, and seizing funds.

Bitcoiners hailed to the rescue, proudly displaying how Bitcoin is above such pesky political conflict: as an apolitical money, it can step into the monetary void, even when the powers of government and a captured banking system stood against the protestors.

A few weeks later, it was time for another test and a much bigger one: the sanctions imposed by coordinated Western powers onto Russia for its attack on Ukraine. With Bitcoin poised to play center stage against pundits who think they can shape the world by words, sanctions, virtue-signaling, and self-flagellation, reality is a harsh mistress. In The Fiat Standard, Dr. Saifedean Ammous correctly argues that Bitcoin is a shattering blow to the worldview of those who think reality comes out of fiat by which he means, among other things, government rules and legal proclamations. The centralizing mindset which thinks you can merely issue some government edicts, speak some words, and justice be done, will have a hard time arguing with the cryptographically obstinate nature of Bitcoin.

BTC doesnt care about your opinions, or who you think should be financially cut off from the rest of the world. Instead, it works: confirming block after valid block that contains transactions that you may or may not approve of.

Now that the shoe is suddenly on the other authoritarian foot, we quickly learn who held Bitcoins principles consistently and who were merely using them for some other undisclosed end. The problem with (vast) government power is that eventually some distasteful person will turn those powers on you by which time its too late for you to regret ever supporting the expansion of its influence.

No, Bitcoin Wont Save Russia From Western Sanctions, we learn from Matthew Pines and David Zell at the Bitcoin Policy Institute, and one quickly wonders what happened to all the high-flying ideals of two minutes ago. If Bitcoin cant overcome government sanctions, if Bitcoin isnt capable of offering refuge from currency collapse, if Bitcoin doesnt offer an escape from all-encompassing government powers what good is it?

They offer a few reasonable predictions the most convincing of which are the China connection and that Russia holds lots of gold. While tricky to ship abroad in exchange for goods and services, gold, explains Zoltan Pozsar to Odd Lots ... doesnt have to be sold; it can be repod just like any other financial instrument. All you need is a willing financial system somewhere, happy to ... reverse-in gold in a repo transaction for you to make payments.

Their two substantive points on why Bitcoin cant help a censored country escape sanctions is that

The second point is the least convincing. The entry of a new big buyer would make BTCs volatility worse? Besides: compared to what? On the sanctioned SWIFT payments, the option is no commodity revenue management at all.

The first point sounds clever, but is simply conflating two factors that have no necessary connection. Market cap is a stock and exports are a flow, so comparing the two makes no sense. Even if it did, onboarding an entire countrys industry would probably both increase price (and so market cap) and induce some prior holders to dispose of some of their coins. Thankfully, Bitcoins velocity is not measured at 1 (and its very close to the velocity measures for the dollar): a given amount of sats can circulate many times in an economy. Besides, the relevant trade goes in the opposite direction of what Pines and Zells argument requires: sanctions with or without the access of chain analysis firms dont prevent a Dutch or Chinese importer from acquiring bitcoin, taking it off the exchanges, and then sending it to industry giants like Norilsk Nickel or Gazprom in exchange for copper and oil shipments.

Can ships be intercepted, oil pipelines cut off, copper deliveries seized? Sure. There is even some indication that, privately, global shipping companies are refraining from doing business with Russian counterparts. Thats a real-world interception that Bitcoin could never address; all Bitcoin does is getting around the monetary obstacles you so naively put in Russias way.

If Bitcoin works only with the regimes permission, it isnt working. And if you think thats a good idea in this conflict or any other per Aleks Svetski you should probably sell your bitcoin.

What the Russian sanctions are reminding the world and the Canadian truckers crowdfunding issues a few weeks ago as a warm-up is that money you thought was yours might not be, when your accounts get frozen and payments blocked by those who dont like you. Even ostensibly self-custodial bitcoin held through MetaMask is now subject to some restrictions as its provider Infura has said that they will uphold U.S. sanctions.

Sure, whatever. Bitcoin doesnt care.

All monies are for enemies, and the more despicable the enemy, the greater the proof of bitcoins viability. Whatever the crimes of this masculine, horse-riding strongman, its the talking heads with outsized control over the USD monetary system that just showed how terrible and contingent their money is. When push comes to shove and you irk them once too many times, theyll just limit your usage. They may swiftly and brutally decide that the money you thought was yours no longer is.

All of the things that make crypto appealing to those under siege apply to those doing the sieging as well, as Rebecca Heilweil and Emily Stewart report for Vox. Bitcoin doesnt take sides:

Whether its good or bad in wartime, crypto is doing what its proponents say it does giving people a way to work outside of traditional financial institutions and theres no sign that will change anytime soon.

For years, Iran has successfully used bitcoin to avoid sanctions, in a testament to the apolitical nature of BTC. North Korea allegedly uses all kinds of cryptocurrency to circumvent the obstacles the rest of the world has placed against its regimes. Only time will tell if in this conflict Russia its people, companies, banks, and government can follow suit.

In the last week or so, sanctions ostensibly designed to punish Russia for its behavior have been implemented. As policy tools to inflict economic damage on your opponent, it is not clear that they work especially for a large, commodity-exporting, surplus country like Russia.

For Bloomberg, Jenny Paris writes:

... the risk of hurting global investors and other innocent bystanders more than the intended target is very real. European banks, companies and countries that rely on SWIFT for fuel transactions would feel the impact along with ordinary Russian citizens.

Whats so ironic about the tough guy stance taken by most international organizations is that last time around Crimea, 2014 writing for NATO Review, Edward Hunter Christie concluded that falling oil prices were evidence that sanctions worked. Back then, Russias gross domestic product fell and low oil prices severely hurt its export revenue. What, one might ask, does that imply about this round of sanctions? Oil prices have been on an absolute tear, aluminum setting an all-time record, and nickel at an 11-year high are we sure these policies are designed to impoverish Russia and not enrich it?

Even more ironic are the many announcements by Western investors and companies with interests in Russia that theyre ridding themselves of these assets at no or any price. The worlds largest fund, the Norwegian oil fund, wants out of any and all Russian exposure at rock-bottom prices; the British oil and gas company BP announced on February 27 that it exits its stake in Russian energy company Rosneft, a loss of assets worth some $25 billion followed by similar exits from Exxon and Shell.

But to whom are you selling? Theres no buyer; brokers and clearing institutions wont touch your shares. Maybe you just write off the loss or simply tear up the shares (or for maximum trolling: donate them to a Ukrainian charity); maybe they become a cheap entry for deep-pocketed and less moralistic others, say, the Qatari wealth fund. Exxon, for instance, seems keen on just handing back the shares of their Russian ventures. How does that hurt Russia, or prevent her from waging war?

Thank you kindly, says whoever ultimately buys their stakes as well as the Russian companies now in full control of their oil-processing facilities. No longer needing to revenue-share with Western counterparts, its hard to see that this was a loss for anyone but shareholders of Western oil companies. The always sharp Matt Levine reflects:

... if you own Russian bonds it seems increasingly plausible that you might not get paid interest, because it might be illegal in Russia for the issuer to pay interest, and illegal in the West for intermediaries to pass along that interest.

And even better:

I suppose the last time major land wars were fought in Europe the settlement system for funding those wars consisted in some sense of moving around piles of gold, and you sort of knew what you were getting. Perhaps the next time major land wars are fought in Europe the settlement system will consist of transparent uncensorable transfers on the blockchain, and you will sort of know what you are getting. But the current settlement system for international financial transfers consists of book entries at regulated and somewhat policize-able central intermediaries, and its not clear anyone quite knows how theyre supposed to respond to a war.

Bitcoin doesnt take sides. Bitcoin doesnt care about your opinion, or the opinion that others have of you. Bitcoin cares about its consensus rules, whether the proposed block is valid and the transactions therein made by entities wielding their private keys.

If you truly desire uncensorable freedom money, some despicable types are going to use it. And thats a good thing.

This is a guest post by Joakim Book. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

Link:
Bitcoin Was Made For This: The Apex Of Apolitical - Bitcoin Magazine