Category Archives: Cryptocurrency

Hey! Have any of you seen a Bulgarian-looking woman who has a reputed magnetic personality and has just scammed thousands of investors out of 3.5 billion? No? Me neither. And were not likely to any time soon as the FBI are on her case.

Its no wonder folks steer clear of cryptocurrencies when scammers like the missing crypto queen turn up, sell snake oil, then disappear. Today, with so much regulation across continents, one would think that this kind of scam could never happen. But it has, and victims have lost their hard earned cash and savings.

Imagine the scene: a big event at a posh hotel or well known fancy gig. Youve seen an advert in a newspaper telling you that the hottest investment in town is coming. Shes a doctor with a super high intelligence quotient who is currently making her investors shed loads of bread. You do a bit of digging and find out that Dr Ruja Ignavota is an Oxford-educated serial entrepreneur. Its all starting to look very credible.

Her new invention OneCoin is going hell for leather, a rip-roaring success that is taking the world by storm. Her disciples and advocates are standing on stage in awe of her, now that they have made so much money on their initial investments. Its showtime and the fear of missing out is just palpable. Its now or never and shes convinced you to transfer your cash into OneCoin, her new digital currency.

Investments into thin air

Now youre part of the OneCoin cult. You wake up every morning and watch your investment rise. You flick to the OneCoin bookmark every few hours on your mobile phone. Then last thing at night, yep, its all looking good. You tell your friends and family about this once in a lifetime opportunity to get in fast before the whole world does. Still your investment goes up and up. But, unlike proper investments, your money is invested in thin air.

The story of OneCoin is one that I still cannot fathom. How did this nobody suddenly become a crypto guru conning people out of their cash. And where is she now?

Cryptocurrency is a dangerous beast. Bitcoin appears to be the safest bet. But, I wouldnt advise anyone to invest in it. Albeit it has some form of pedigree, but no fundamentals. Only this week Bobby Lee, a massive crypto bull stated that he believes Bitcoin will indeed surpass gold as the best place to invest cash in the future. Lee, who is launching a new cryptocurrency wallet for the less technically minded, has plotted that Bitcoin will hit $1m (780,000) after two more Bitcoin bubbles. The language itself is scary however, in using Bitcoin via Coinbase or Gemini, there is a piece of code that one actually owns on the blockchain.

Prevalence

Unfortunately, Dr Ignavota scammed OneCoin investors with no sign of a blockchain anywhere. There are heartbreaking stories of UK citizens losing big time as a result of investing in OneCoin. By March 2017, more than 3.5bn had been invested in the OneCoin system from 175 countries. It is thought around 100m of that came from the UK. That is a staggering amount of cash, leading to questions of how this could happen on such a scale. But the cult-like magnetism and selling tactics of OneCoin guru Ignavota meant that people were duped. Weve seen it all before and will no doubt see it again. But with the advent of mind blowing tech, it could become even more prevalent.

Its easy to rig up a credible website with logins, secure-looking banking software and fabulous graphics to hook you in. Some clever social media and a front man or woman and there is the structure of an investment vehicle. Oh, and dont forget the videos of disciples who have also invested and wax lyrical. That is just how quickly and effectively scammers can build an audience and cash piles to feed the frenzy. Of course, the investments are financial chimeras rigged to look real.

Dr Ignatova will resurface somewhere, but the damage has been done. I just wonder if the Bitcoin enthusiasts will suffer the same fate.

- Jim Duffy MBE, Create Special.

READ MORE: PureLiFi raises $18m to roll out LiFi-enabled phones, tables and laptopsREAD MORE: West Lothian entrepreneur puts six-figure sum into HR app

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Beware of cryptocurrency gurus like Dr Ruja and her OneCoin cult - Jim Duffy - The Scotsman

The unique incentive scheme would be a world first, as well as a remarkable turnaround in attitude towards digital currencies from a country that up until two weeks ago categorically stated it had no interests in bitcoin and its stablemates.Instead, Beijing insisted its interests were in the blockchain technology used to underpin cryptocurrencies after Chinas president Xi Jinping had seemingly endorsed cryptocurrencies while addressing a meeting of the Chinese Communist Partys Central Committee.

Reports of his comments appeared to send bitcoin into overdrive as the worlds largest crypto headed towards $10,000.

However, that run was dramatically halted when state-run news outlets responded with a new narrative that said China had no interest in cryptocurrencies just the technology behind them.

The rise of blockchain technology was accompanied by that of cryptocurrencies, but innovation in blockchain technology does not mean we should speculate in virtual currencies, affirmed a leader in The Peoples Daily.

Everything changed just a matter of days ago, though, when Beijing-based newspaper Xinhua ran a front page article exclaiming the hot topic of bitcoin, holding it up as the most successful application of blockchain.

Given the uncomfortably tight restrictions on reporting such matters in China, the article marked a significant change of attitude from a country where cryptocurrency trading is still banned.

Now, set against the backdrop of uncertainty over the governments true feelings about digital assets, another newspaper is suddenly reporting on how the countrys 2.5m military personnel could soon be receiving bonuses in cryptocurrency.

Politics and economics aside, its an idea that has been greeted with nods of positivity from several military observers in the UK.

Lee Clayton a former Major in the Army Air Corps, but now an advisor to the Ministry of Defence labelled the move unusual but not something to be dismissed as a bad thing.

Chinas approach to many things is often something that attracts instant derision from the West, and this is certainly the case when it comes to this business of will they, wont they? in terms of cryptocurrency, he said.

Although I think most people with an interest in digital finance which, I promise you, is something many soldiers have an eye on, would say Beijings smoke-and-mirrors approach really exposes the fact they are very keen to embrace crypto soon.

Major Clayton added that he believed having a Chinese newspaper talking about rewarding troops with digital tokens supported the notion that China was entirely behind cryptocurrency.

Look, China has an enormous army, he explained.

That level of commitment towards a tokenised rewards system means your government has to be pretty serious about it.

That aside, I think it's worth noting that motivational incentives in the grown-up military world go beyond medals and stripes give a soldier a financial incentive and I promise he or she would give you a serious return on that investment.

Coin Rivetis a website bringingnews, information, analysis, opinion and insight from the fast-moving blockchain world.

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China to reward troops with cryptocurrency bonuses - Express

The cryptocurrency market is a mixed picture on Wednesday. Bitcoin and all major altcoins are range-bound with bearish bias amid decreasing trading activity. The total cryptocurrency market capitalization dropped to $239 billion from $240 the day before; the worth of the digital asset of $67 billion change hands daily on average. Bitcoin's market share dropped to 66.0%.

BTC/USD has stayed mostly unchanged both on a day-to-day basis and since the beginning of Wednesday, changing hands at $8,730. On the intraday charts, the coin has peaked at $8,838 in Asia before reversing back below $8,800 handle. This resistance is strengthened by SMA100 (Simple Moving Average)on a daily chart. Once it is out of the way, the upside is likely to gain traction with the next focus on$9,000.

Ethereum, the second-largest digital asset with the current market capitalization of $20.2 billion, is moving within a short-term bearish bias within the recent range. The coin dropped below $186.00 to trade at $185.60 at the time of writing. Looking technically, ETH/USD has recovered from the recent low of $182.30, but the further upside is limited by $186.00 with SMA50 1-hour located on approach.

Ripples XRP has gained 1.2% since the beginning of Wednesday to trade at $0.2750 by the time of writing. The third digital coin with the current market value of $11.8 is moving within a tight range. The coin jumped above SMA50 (Simple Moving Average) and by the upper line of the Bollinger Band on a 1-hour chart. However, further recovery may be limited by SMA100 at $0.2760.

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The cryptocurrency market update: Bitcoin and major altcoins are vulnerable to further losses - FXStreet

An internet-of-things connectivity startup called Helium has both buzzwords and boldface names going for it. But the business model behind its vision of long-range, low-power, peer-to-peer networking still needs one ingredient: a way to put dollars into the bank accounts of the people building this system.

The idea behind Helium is to provide a trickle of bandwidth to IoT devices that may not be anywhere near a power outletand to do so securely, without relying on proprietary technology, and at a cost almost too cheap to meter.

Those are things that arent possible today, says chief operating officer Frank Mong. The San Francisco firmcofounded in 2013 by Napster creator Shawn Fanning, with funding from such high-profile venture capital firms as Union Square Venturessees its only path in a peer-to-peer architecture.

Helium has no aspirations of building out a network like AT&T, Mong says. We cannot do it as a single, centralized entity.

Last week, the company announced that its decentralized network of 1,200-plus hotspots placed in peoples homes and offices had reached more than 425 cities spanning 45 of 50 states across the U.S., with a software development kit now available.

Each of those$495 rectangular hotspots shares a broadband connection via a wireless technology called LongFi that delivers a little data a long distance over unlicensed 900 MHz spectrum.

Weve seen it as far as 25 miles away, Mong says of LongFi range, although the companys site suggests 10-plus miles is more realistic. Thats allowed such early markets as Austin and San Francisco to get close to complete coverage, while Manhattan will need another 150 or so hotspots on top of the 100-plus already online there.

That range can set LongFi apart from 5Gs exceedingly limited coverage so far, while the decentralized buildout could allow the network to grow faster than such centralized, IoT-specific efforts as Sigfox.

(Technically, consumers who plug a LongFi hotspot into their network may be violating their terms of service: Most consumer internet providers ban resale of the connectivity they provide; Mong professes himself unafraid of protests from ISPs, saying any would be a sign of success.)

Data transfers over Helium are too slow for multimedia. But the company sees an opportunity in monomedia: connected-gadget data such as location, temperature, and pressure that require only a few bytes to transmit.

For example, Helium touts such early-adopter use cases as the InvisiLeash pet-tracking collar, Aguluss irrigation-monitoring sensors, and a DIY pollution tracker.

Helium isnt charging for access yet, nor is it providing any quality-of-service guarantees either. But eventually, customers will pay with data credits.

So why would someone spend $495 on a hotspot that helps Helium build out its network? Thats where the companys blockchain infrastructure comes in. Each hotspot, uniquely identified with an auto-generated three-word phrase ending in an animal name (for instance, Short Arctic Tuna), will mine the companysHelium Network Token (HNT) cryptocurrency as part of the computational process verifying the peer-to-peer networks integrity and reliability.

Mong says Helium opted for this approach to optimize for energy efficiencywe couldnt use bitcoin, because its too resource intenseand allow the hotspots to draw only five watts of electricity. The idea is that customers using Heliums networks to transfer data will buy credits in HNT instead of U.S. dollarsby buying Heliums tokens from the owners of its hotspots. The catch is that the exchanges to allow those transactions happen dont exist yet, and Helium cant set one up or even ask other parties to create one.

Instead, it has to hope that market forces drive an existing exchange to begin accepting HNT, or that somebody will create a new exchange for that purpose.

We hope it happens, Mong says. But he adds that because of security laws, Helium cannot be involved in soliciting exchanges to do that.

IDC research director for blockchain strategies James Westersays hes looked at Helium and thinks the concept can work. Its like franchising connectivity with cryptocurrency providing the mechanism for value exchange between those consuming that connectivity and those providing it, he writes in email. I buy a hotspota local franchiseand Helium provides the advertising, brand, back-end, etc.

But, Wester adds, he remains unclear about the long-term financial upside of buying a Helium hotspot. Im not sure what the value of that Helium token really is over time, he says. If I buy that hotspot with the intention of it turning into an investment that I can recoup over time, knowing that value over time is important.

Mong allows that there is some uncertainty for those early buyers: It is a leap of faith, for sure.

Correction: A previous version of this story said that Helium was working with Lime to track the latter companys scooters. Lime has denied this relationship and Helium has removed mention of it from its customer list.

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Helium is building a peer-to-peer internet-of-things network - Fast Company

There is no time like the present, even in the cryptocurrency industry. Coinbase, a provider of exchange and wallet services, is now entering the IRA game.

This is made possible following a strategic partnership with Kingdom Trust and Regal Assets.

A cryptocurrency-based investor retirement account has been of great interest to many, yet few companies provide such a service.

The main purpose of these IRAs is how the cryptocurrency balances are safe from external factors.

Hackers or criminals looking to steal user funds will have a very tough day and ultimately be unsuccessful.

Furthermore, every account created through Coinbases IRA will be insured for up to $200m, courtesy of Lloyds of London.

For those who are on the fence about investing in cryptocurrencies, this might be the solution they have been waiting for.

Plenty of cryptocurrencies will be supported for these IRAs. The list includes Bitcoin, Stellar, Tezos, DAI, Augur, and several dozen other currencies.

Some notably absent projects include Binance Coin, Monero, and so forth. It is possible more currencies will be added once the service goes live.

Cryptocurrency investing is usually something one should engage in for the long term. An IRA seems to be the perfect vehicle to accommodate those needs.

On the other hand, putting ones retirement savings into cryptocurrency will always be a risky venture.

These markets are extremely volatile, and there is no guarantee all of the supported tokens will still be around decades from today.

Image(s): Shutterstock.com

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Coinbase Announces its Upcoming Cryptocurrency IRA - The Merkle Hash

Cryptocurrencies undergo constant change, but sometimes, there is opposition. Can these three forks preserve each coin's classic features?

It takes time to change a cryptocurrency. Usually, the community behind a coin must settle on new features. Then, miners and node operators must enact those changes by upgrading their software. However, not everyone needs to agree: individual factions can fork the blockchain and introduce their own set of changes.

Many forks aim to introduce new features to a cryptocurrency, but some aim to preserve existing features. The latter strategy has had mixed results: some classic forks have gained more support than others, and not all have been a success in terms of market performance. Here's how three "classic" crypto forks have played out.

Ethereum Classic was created in 2016 following an attack on Ethereum's DAO. This exploit could have cost the Ethereum ecosystem $70 million, so the community eventually agreed to fork Ethereum, creating a separate chain without the attack transaction. However, about 20% of miners dissented and continued the original chain.

This chain is now known as Ethereum Classic, and it has its own cryptocurrency, ETC (rather than ETH). Ethereum Classic mainly aims to ensure that transactions are final and free from interference. Additionally, it delayed its mining difficulty bomb, meaning that ETC mining will remain profitable even as Ethereum moves toward staking.

Ethereum Classic is still going strong: it weathered a double-spend attack in January, and it has just executed its Atlantis upgrade to improve interoperability with Ethereum. ETC has achieved a $550 million market cap, making it the 21st largest coin on the market. This gives ETC 1/36th of Ethereum's $20 billion market cap.

ZClassic was created to contest the financial model of Zcash (ZEC), a popular privacy coin. Zcash used slow start mining when it went live in 2016, which arguably devalued the coin for its early investors. In 2018, Zclassic forked away from Zcash and eliminated slow start mining in order to make its own coin (ZCL) more accessible to investors.

Zclassic also removes Zcash's Founder's Reward, which gives 20% of mining profits to the Zcash teaminstead, Zclassic miners get to keep all their earnings. However, Zcash will retire its Founder's Reward in 2020, so this distinction will lose relevance. Incidentally, another fork, Ycash, has reduced and extended its own Founder's Reward.

Finally, Zclassic is using the same trusted setup that Zcash used prior to its Sapling update. But despite its ambitions and a recently attempted re-launch, Zclassic has not performed well on the market. Zclassic is the 775th largest coin, with a market cap of $1.5 million. This is roughly equal to 1/180th of Zcash's own $280 million market cap.

Monero is another privacy coin that has produced a few classic forks. Monero constantly changes its mining algorithm in order to ensure that specialized ASIC devices don't have an advantage over basic computers in terms of mining profits. However, some Monero miners own ASICs or believe that their presence is beneficial.

This has resulted in a few classic forks: Monero Classic, Monero Zero, and Monero Original all preserve ASIC-friendly algorithms. However, Monero itself will introduce the RandomX algorithm in November 2019, which will eliminate constant anti-ASIC upgrades. According to devs, this will not produce another new coin.

Most of Monero's classic coins have not fared well, though some have done better than others. Monero Classic (XMC) is the only classic fork with any significant market value, and it is the 390th largest coin on the market. This gives it a market cap of $6.2 millionroughly 1/150th of Monero (XMR)'s $963 million market cap.

Classic coins don't have much in their favor, even if they manage to receive support from their parent project. Ethereum Classic came into existence during a dispute that truly had two sides, but it is still overshadowed by Ethereum. Most other classic coins originated from minor disputes, and some have faded away almost entirely.

On top of this, classic coins often appeal to miners with the promise of continued mining profits. Yet in practice, mining is only profitable if the classic coin in question achieves high prices. This rarely happens: for example, it is not profitable to mine Monero Original or Zcash Classicat least, not under WhatToMine's default specs.

Finally, not all classic coins are trustworthy. The idea of "classic features" provides an easy way to create false ties to a legitimate projectthis occurred with XRP Classic, a seemingly fraudulent coin with no connection to Ripple. In short, the market for classic coins is not thriving, despite ongoing efforts to push the trend forward.

Disclaimer: information contained herein is provided without considering your personal circumstances, therefore should not be construed as financial advice, investment recommendation or an offer of, or solicitation for, any transactions in cryptocurrencies.

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Three Classic Coins That Attempt To Preserve Existing Cryptocurrency Features - Bitrates

Law Enforcement

The IRS and other tax enforcement agencies are touting big improvements in tracing the use of cryptocurrencies in tax evasion and other criminal schemes. They just don't want to talk about how.

On Friday, officials from the J5, a cooperative consortium of tax investigation and enforcement agencies around the world that includes Australia, Canada, the Netherlands, the United Kingdom and the U.S., wrapped up a week-long event in Los Angeles that brought together criminal investigators, cryptocurrency experts and data scientists.

The J5 was formed last year to help pool international tax enforcement resources and strategies. As the internet and the emergence of decentralized, pseudo-anonymous cryptocurrencies like Bitcoin have made it easier for tax evaders to move and hide their money, investigation and enforcement agencies around the globe have slowly realized they are dealing with a common set of challenges.

"The goal of the week was to remove some barriers and work together collaboratively to identify the most egregious tax offenders in the world," said Ryan Korner, executive special agent for the IRS field office in Los Angeles. "I want to emphasize that this week was not just a hypothetical training exercise; all of the participants ... worked together using real data to identify real criminals."

However, the agencies were more tight-lipped when it came to discussing what those leads are, how agencies are making new use of data and what tools they're leveraging. IRS officials said they developed new analysis platforms, generated "dozens" of new leads and were getting close to announcing operational results from the partnership, but offered few specifics on their work or what new capabilities they have developed to track cryptocurrency.

"I don't want to necessarily name any of them specifically, but we do have the tools in place today that we didn't have in place even six months to a year ago to take what was an anonymous form of payment and moving funds and really make it so it's not anonymous anymore," Korner told FCW.

IRS Special Agent Chris Hueston, the J5 project lead for the U.S., did cite enhanced data-sharing practices among partner countries as one of the reasons behind the improvement.

"We're able to use some of the data that we've seized through investigations, and we're able to rely on some of our J5 countries for data that they're able to share with us, so once we put those datasets together, as well as open sources and other information that we're able to share legally, those datasets become richer as far as putting a finer point on our targeting efforts for those criminals," he said.

The emergence of decentralized, pseudo-anonymous cryptocurrencies have created new challenges for financial regulators and tax enforcement agencies, who initially struggled to track and trace payments. A 2017 survey of 564 Bitcoin investors conducted by The Motley Fool found that more than one-third reported they did not plan to report their earnings for capital gains taxation. Federal Reserve Chairman Jerome Powell told Congress that new currencies like Facebook's Libra raise "serious concerns regarding privacy, money laundering, consumer protection [and] financial stability."

While IRS officials were reluctant to discuss what tools they're using, there is evidence that law enforcement agencies are getting better at tracking cryptocurrencies. For example, the Department of Justice has cited the tracking of virtual currencies as a key component for takedowns of a massive child exploitation ring in October.

The use of new commercial software and algorithms may be fueling that improvement. At least two agencies, the FBI and Drug Enforcement Administration, have engaged in sole-source procurements in recent years with contractor Chainalysis for proprietary software and training on how to track the use of virtual currency. In both cases, the agencies argue the contractor is the only company capable of providing the services.

"The vast majority of FBI personnel investigating conduct involving virtual currency only have access to Chainalysis to perform bitcoin tracing," the FBI wrote in an August 2018 sole-source justification.

About the Author

Derek B. Johnson is a senior staff writer at FCW, covering governmentwide IT policy, cybersecurity and a range of other federal technology issues.

Prior to joining FCW, Johnson was a freelance technology journalist. His work has appeared in The Washington Post, GoodCall News, Foreign Policy Journal, Washington Technology, Elevation DC, Connection Newspapers and The Maryland Gazette.

Johnson has a Bachelor's degree in journalism from Hofstra University and a Master's degree in public policy from George Mason University. He can be contacted at djohnson@fcw.com, or follow him on Twitter @derekdoestech.

Click here for previous articles by Johnson.

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Cryptocurrency tracking improves -- but how? - FCW.com

As Senator Romney has recently been in the news on his criticism of the President as impeachment proceedings, it seems the former Presidential Candidate and Republican Senator from Utah might want to impeach cryptocurrency from the United States based on the threat level it may pose to national security.

During a hearing in the U.S. Senate Committee On Homeland Security And Governmental Affairs, Senators asked leaders from the FBI, Homeland Security, and the National Counterterrorism Center questions on Threats To The Homeland, Senator Mitt Romney (R-UT) raised the prospect of whether the U.S. needed to take action on cryptocurrencies or not worry about them. The FBI took no time in responding how cryptocurrencies are a significant problem that will get bigger and bigger.

WASHINGTON, DC - September 23: Senator Mitt Romney (R-UT) speaks to journalists before votes on the ... [+] Senate floor on Capitol Hill in Washington, DC on Monday September 23, 2019. (Photo by Melina Mara/The Washington Post via Getty Images)

Im not in the Banking Committee. I dont begin to understand how cryptocurrency works. I would think it is more difficult to carry out your work when we cant follow the money because the money is hidden from us and wonder whether there should not be some kind of effort taken in our nation to deal with cryptocurrency.

While the Senator invited all three of the witnesses to respond to his question, FBI Director Wray jumped in to note how big of a problem cryptocurrency already is. The FBI Director stated, Well certainly for us cryptocurrency is already a significant issue and we can project out pretty easily that its going to become a bigger and bigger one. Whether or not that is the subject of some kind of regulation as the response is harder for me to speak too.

FBI Director Wray, while being careful not to provide any policy or regulatory recommendation, noted the issues of cryptocurrencies and how they are used by terrorists is part of a larger issue involved with our enemies increased capabilities in using tech and the ability to process anonymous transactions.

...it is part of a broader trend...in terms of the terrorist threat in terms of our adversaries of all shapes and sizes becoming more facile with technology, in particular various types of technology that anonymize their efforts...

WASHINGTON, DC, UNITED STATES - 2018/06/28: Christopher A. Wray, Director of the Federal Bureau of ... [+] Investigation, at the House Judiciary Committee in the Rayburn Building at the US Capitol. (Photo by Michael Brochstein/SOPA Images/LightRocket via Getty Images)

The FBI Director did note that Were looking at [cryptocurrencies] from an investigative perspective including tools that we have to try to follow the money. He also noted that it is not just cryptocurrency but various types of technologies that, if the U.S. doesnt get its act together, could result in the FBI being walled off by technology from doing their jobs in the future.

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Senator Romney Considers Action As A Nation On Cryptocurrency Threat To Homeland Security - Forbes

On an otherwise sleepy morning in the cryptocurrency market, most of the major currencies trade within a few percentage points of their value 24 hours ago. Stellar Lumen breaks with this calm trend, trading 18% higher as of 9:20 a.m. EST. There's a fairly simple explanation for why this particular cryptocurrency is surging today, and it's a twist on the familiar theme of share buybacks aimed at controlling dilution.

Stellar Lumen is one of the largest cryptocurrencies on the market today. Sporting a market cap of $1.6 billion, according to CoinMarketCap.com, it's the 10th-largest cryptocoin both by market value and by daily trading volume.

Technically speaking, Stellar is a money transfer protocol designed to simplify transactions across international borders in a variety of local currencies. That core idea is very similar to the larger service known as Ripple. The two crypto networks were both founded by industry bigwig Jed McCaleb, who left the Ripple project amid disagreements with the rest of the company to start Stellar as a fairly direct alternative.

While the Ripple corporation works closely with banks around the world in an attempt to disrupt international payments at the professional level, Stellar is organized as a nonprofit foundation with the goal of achieving similar cross-border transparency for ordinary people.

"For example, using Stellar, a family in Venezuela can keep some of its savings in dollars, or in euros, and protect itself from local economic upheaval -- without having to keep bills 'under the mattress' or operate through a gray market broker," according to an official statement found on Stellar's web site.

Like Ripple's XRP token, Stellar uses the Lumen token to achieve its technology goals. This cryptocoin, traded across the Stellar network, can be translated into different real-world currencies for a near-zero transaction fee.

You can't mine Lumen, creating new tokens on the fly as you do in other popular systems such as Bitcoin. Instead, and again just like Ripple, Stellar created 100 billion tokens at the launch of the new cryptocurrency. The foundation keeps most of these tokens stacked away, allowing a trickle of new supply to reach the open market at a tightly controlled pace.

And that's where we find the reason for today's big jump. Stellar just made a big change to the supply of Lumen tokens.

Image source: Getty Images.

Remember the finite supply of Lumen, set to 100 billion units from the start? Well, that changed last night.

The Stellar foundation destroyed 55 billion Lumen tokens, permanently and irrevocably. Out of the 17 billion Lumens that were allocated to the foundation's operations, 5 billion tokens were destroyed. Reserves for various giveaway programs dropped from 44 billion to 6 billion units. Partnership programs now have access to 12 billion Lumens, down from 25 billion.

It's like an utterly massive share buyback that reduced the total share count by 55% in a regular stock structure, or firing over half of the world's gold into the sun. The underlying ideas are different here but the effects are similar. Lower supply equals higher prices for the units that remain.

The Stellar foundation says that the new supply structure more closely aligns with the foundation's mission.

"We owe it to the ecosystem, to the network, and to ourselves, to be as efficient as possible in our work," the official announcement stated.

We should only keep what we're confident we can actually use. And use relatively soon, at that -- in the next ten years. That's the proper scope for the Foundation. The ecosystem is already moving ahead on its own, alongside [the Foundation] rather than driven by us. We were never meant to be and would never want to be a perpetual custodian for Stellar's programs. Getting to our goal and still having Lumens at the end would serve no purpose.

Spoken like a true nonprofit organization with big dreams and a limited mandate. To be clear, it would be kind of crazy to see a publicly traded company performing a similar move in the form of a supermassive share buyback. But for a nonprofit whose assets are closely tied to a noncash cryptocurrency under its own control, it actually makes sense.

Now, the 55% supply cut did not double the street price of Lumens right away. The market reaction was muted by several factors, including the limited availability of Lumen tokens on the open market and the fundamentally unstable nature of cryptocurrency valuation in this evolving market. The Stellar foundation hopes that this drastic move will move the whole Stellar Lumen project closer to its stated mission of providing global banking tools for the unbanked masses, but only time will tell.

Until then, remember that any cryptocurrency comes with a massive amount of risk to investors. It's a promising market for sure, and the Stellar Lumen currency has increased 25-fold in value since its launch in 2014. But the coin could just as easily drop to zero in the long run, Stellar's good intentions notwithstanding.

Be careful out there, and only invest money you could afford to lose in these risky cryptocurrency vehicles.

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Why Is the Stellar Lumen Cryptocurrency Up 18% Today? - Motley Fool

Jrg Molt is the new self-proclaimed Satoshi Nakamoto

Canadian exchange goes dark with over $12 Mn user funds

Bitcoin rich list has grown richer by 30%

Satoshi, the pseudonym used by the creator of Bitcoin has been officially added to the Oxford Dictionary. However, who is Satoshi? Only Satoshi perhaps knows. However, given the popularity of Bitcoin today, Craig Steven Wright and many others have claimed themselves as Satoshi, yet failed to provide compelling proof.

The latest entrant to claimers is Jrg Molt who also claims own 250K Bitcon. Molt, however, has been badly trolled on internet since then. While his Twitter account @bitcoin_cofound is currently deactivated, according to reports, The self-described co-founder of Bitcoin has four kids from three women and never paid and still does not pay for any of his kids child support. He was convicted several times by German law by not paying his legal obligations.

By the way, 250K Bitcoin is currently worth $2.2 Bn.

Gavin Andresen, who Satoshi had asked to lead Bitcoin.org after departing had once even supported Wrights claim as Satoshi just to retract later. Andresen in his blog later clarified,

So, either he was or he wasnt. In either case, we should ignore him. I regret ever getting involved in the who was Satoshi game, and am going to spend my time on more fun and productive pursuits.

Back to the present and the future of cryptocurrency, while Indias finance minister Nirmala Sitharaman has extended her support to the draft Banning of Cryptocurrency & Regulation of Official Digital Currency Bill 2019, Indias largest bank State Bank of Indias chairman Rajnish Kumar has recently commented,

The way the world is moving towards digitisation, at some stage, a regulated cryptocurrency would be a better bet than an unregulated oneLets see. Because theres a dark side of the internet also. There can be a misuse of digital currencies. That is why regulation is a must.

According to BitInfoCharts, the number addresses holding over 1,000 BTC has grown by 30% over the last 12 months. The 2,148 addresses contain more than 1,000 BTC, amounting to just 0.01% of all Bitcoin addresses, reported Yahoo.

David Marcus, the mastermind behind Facebooks Libra, Calibra has expressed that Bitcoin is digital gold, but its not a good currency for transactions. Speaking at The New York Times DealBook Conference, Marcus also clarified that he wont be heading the Libra Association.

The Search Committee at Libra Association is currently looking for a leader who could represent all the members. I am definitely not going to be that person.

On Bitcoin, he said, I dont think of Bitcoin as a currency. Its actually not a great medium of exchange because of its volatility..I see it as digital gold.

In a recent US Senate Committee on Homeland Security And Governmental Affairs hearing, Federal Bureau of Investigation (FBI) Director Christopher Wray, however, maintained that cryptocurrency is a concern thats going to become a bigger and bigger one.

After having failed to attract investors, Vancouver-based crypto exchange Einstein Exchange has suddenly downed its shutters, $12.1 Mn user funds in two. This is in contrast to the exchanges statement to the British Columbia Securities Commission (BCSC) that it would be shutting down within two months.

The BCSC which has now applied to the Supreme Court of British Columbia stated that an interim receiver Grant Thornton Ltd. entered and secured the premises of Einstein Exchange on Nov. 1.

The step has been taken after BCSC received numerous complaints from investors who were not able to access their funds.

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