Further details have been released regarding BitTorrent‘s BTT token airdrop scheduled to take place in six days’ time.
The BTT token has been introduced as a medium of exchange for BitTorrent users, enabling the purchase of downloadable media, giving users the opportunity to participate in crowdfunding on the platform. File sharing will also offer rewards to users of the platform. The company explained some of the other benefits:
“Existing BitTorrent clients will implement an optional set of backward-compatible protocol extensions which allow them to bid and receive bids for their bandwidth, working in tandem with a cryptocurrency wallet and bidding engine.”
The firm is airdropping free BTT tokens to TRON (TRX) holders and it has been announced that the airdrop will continue for six years until 11 February 2025. The first snapshot will happen when TRON’s block height reaches 6.6 million. The initial airdrop will be a supply of BTT 10,890,000,000, followed by BTT 990,000,000 each month from 11 March.
According to BitTorrent, “an additional BTT 99,990,000,000 will be airdropped to longtime TRX holders through online and offline events”.
It is widely expected that come 11 February, BitTorrent could come into immediate competition with similar file sharing outfits such as Upfiring, Flixxo, JoyStream, and LBRY, although a boost in funding through the airdrop could be significant for the company’s future.
Blockchain.com, a popular online Bitcoin wallet provider with over 30 million wallets, is conducting the largest cryptocurrency airdrop in history but will require full identification information from participants.
The airdrop does not occur automatically; users must sign up and then claim the airdrop through their email. This is to prevent XLM from being airdropped to inactive wallets since Blockchain.com users often have numerous accounts and throw them away over time.
Claiming to prevent people from gaming the system and getting more XLM than they are entitled to, Blockchain.com is requiring users to provide full identification information including name, address, date of birth, verified phone number, and a picture or video of themselves. These details were previously not required to use Blockchain.com wallets; in general, Bitcoin wallets allow users to maintain privacy.
The co-founder of Stellar, who is also co-founder of Ripple, Jed McCaleb, says, “Giving away lumens for free is an invitation to communities to design the services they need. By working with Blockchain to increase the availability and active use of lumens on the network, leveraging their almost 30 million wallets, we will increase the network’s utility by many orders of magnitude.”
This concept is thoroughly explained in the Blockchain.com airdrop white paper. This is the first in a series of airdrops to wallet users to increase decentralization, popularity, and user base for the cryptocurrencies that decide to get involved in this program. Further, airdrops are the easiest way for new users to enter the crypto space. Indeed, Blockchain.com is letting people create a wallet for the airdrop, and being a pre-existing user is not a requirement.
Blockchain.com CEO Peter Smith says, “Looking back at the last five years of crypto, one of my favorite things has been giving users their first USD 20 of crypto and watching them realize the power of a new financial system in their hand as they saw their first transaction. But you can only do this for so many people in that fashion. The genesis of this project was; how do we help millions of people make their first transaction?”
Many of the early Bitcoiners got their first coins from faucets. Faucets are similar to airdrops, and the first Bitcoin faucet gave out up to 5 Bitcoins per day, which at the time was actually worth much less than the USD 25 of XLM Blockchain.com is giving out. Today, those 5 Bitcoins are worth USD 32,000.
Bithumb is conducting season 1 of its ‘Super Airdrop Festival‘, where it refunds traders 120% of trading fees. It has set aside a limit of KRW 1 billion per day for the refunds, which comes out to KRW 167 million (USD 149,000) of rewards each day. Clever traders have seized this opportunity to make profits by conducting wash trading.
Wash trading is when a user sets up two accounts, placing a sell order on one, which is bought immediately by the other. This generates fake trading volume on crypto exchanges and is commonly used to inflate trading volume stats to push crypto exchanges up the CoinMarketCap rankings. Due to the Bithumb airdrop, users now have an incentive to wash trade, since they can make easy profits.
Doing the math, Bithumb charges 0.3% fees, yielding a rebate of 0.36%. Therefore KRW 278 billion (USD 247.6 million) of wash trading can produce the KRW 1 billion limit for trading refunds. And this is exactly what’s been happening – at the time the airdrop reward resets every day, there has been a KRW 252 billion spike in Bitcoin trading on average for a moment, representing one person or many people jumping on the opportunity to make easy money via wash trading.
Bithumb has experienced tremendous problems since it was hacked in June 2018, resulting in the loss of USD 31 million of crypto and the shutdown of the exchange. It has just become fully operational again and has opened registration for new users. Simultaneously, it launched the trading fee refund airdrop.
These events give Bithumb the appearance of having strong liquidity, which attracts traders. It has shot up to #5 in the world on CoinMarketCap with over USD 450 million of trading volume. That means Bithumb’s true trading volume is over USD 200 million per day, much higher than it was before the hack.
In fact, the USD 200 million of real volume generates USD 600,000 of profits per day from trading fees, which is more than enough to pay for the airdrop with a nice profit on top. Perhaps Bithumb will continue doing the airdrop long term, since it is attracting real volume to the exchange and is, therefore, a profitable strategy.
In a Bitcoin News exclusive, Bitcoin Venezuela founder Randy Brito reveals a wealth of ideas about how cryptocurrency can be used to combat the effects of extreme hyperinflation in Venezuela right now. He takes us on an insightful journey on the ground in the South American nation, uncovering deep skepticism from Venezuelans of both the Petro crypto token and an uncorrupted future for local cryptocurrency exchanges.
When Bitcoin News caught up with him, yesterday had been a crazy day. All API had stopped working (Bitcoin Venezuela’s API is popularly used by locals to keep track of crypto prices) but because the banks were already non-functional, people were more concerned about the latter.
”But Bitcoin is 24/7”, Randy critiqued, wondering why people didn’t care more about the APIs.
What is really happening in Venezuela?
Hyperinflation is hitting Venezuela hard, with consumer prices increasing 82,766% last month compared to July last year. What does this mean for the people of the country?
Randy described the scene in the streets as near chaos; workers desperately try to spend their wages as soon as they are paid on whatever they can find in the streets to store value, later trading their goods with others who have the products they need. People need to bring five bags of cash with them just to buy their weekly groceries. Yesterday, he said, with the new rates only one bank made their new ATM limits public at one million bolivars – nearly enough to buy one-third of a cup of coffee.
Those lucky enough to be in full-time employment are unable to take care of themselves sufficiently without going to the black market, he said, highlighting multiple issues: ”People don’t have bank cards, the banks don’t even have plastic to make new cards.”
Even when workers receive their wages in a bank transfer, they are required to pay a premium of several thousand per cent on anything they buy. Cash is far more valuable right now as there are many things that can only be purchased with physical money to avoid these costs.
As Randy sees it, cryptocurrency could provide a solution to at least some of these problems: ”Bitcoin could be a common currency denomination… it already has an international market traded against currencies. Bitcoin could create frictionless trades.”
It is also a way of getting around bank transfer limits. As of yet, however, it is difficult to find vendors or service providers willing to accept cryptocurrency payments. This is predominantly because people do not understand how the payment methods work but many more issues surround adoption.
The economic crisis in Venezuela means that many people are not equipped with the necessary tools to trade cryptocurrencies, as they lack smart devices with wallet applications to hold funds. Combined with a lack of relevant education or economic understanding, a Bitcoin revolution in the country is far from imminent. Not to forget also that it is illegal to accept any currency in Venezuelan stores other than the bolivar unless you accept the government imposed exchange rates, or face a fine or even prison. The rates the government has set are so high that nobody is willing to use them and suffer financially.
Randy believes that the people willing to accept cryptocurrency payments are those who have a history in tech or the digital trading of foreign currencies but it is his ambition to change that with his non-profit, Bitcoin Venezuela.
Nobody should trust Petro
For a Venezuelan like Randy, the Petro token is a laughable concept. He states frankly, “People don’t trust the government here on anything to do with economics or currency management because they have proven to be so bad.”
He believes the idea that each Petro is backed by a barrel of oil is simply not true: ”The Petro is not backed by anything, there is no way to back a digital currency to a physical asset like a barrel of oil without having to trust a third party. Here, that is that government, so I don’t think anyone that understands this concept believes that they are telling the truth.”
Randy said he finds it shocking that anybody from the cryptocurrency or tech community would get excited about it or actually believe the idea, putting it down to either ignorance of how assets actually work or an attempt to do more harm than good. Just as currency traders are unwilling to buy the bolivar, they are unwilling to invest in Petro; there is no trust in the government to produce a barrel of oil in exchange for a Petro as theoretically promised.
While oil production is several times lower than it was ten years ago, what is being produced is being done so to pay off debts. Randy sees Petro as a ”digital bond so they can get debt issued” as it is being offered to countries such as India, who have already refused to use or accept Petro for anything it exports to Venezuela, demanding strong fiat currencies instead.
The issue the government faces now, Randy detailed, is that it needs to produce something that can be exchanged for a stable fiat currency in order to import needed goods.
”Printing another good looking bolivar is not the solution,” he said.
Too early for airdrops
The Bitcoin Venezuela humanitarian aid project began around two years ago, initially raising funds of around USD 200 per month in cryptocurrency. Randy is trying to increase this substantially now, as they are currently feeding over 2,000 Venezuelans a day in their soup kitchens. While he would like to send cryptocurrency directly on the ground to citizens, the current climate does not allow for that.
”People have old cheap phones because of the crime. That’s what is safe to take out on the streets,” he said, referencing the lack of proper tools people have to access cryptocurrency.
According to Randy, the few that have been organized by those like the Bitcoin Cash and Nano communities have been small, and the organizers of the bigger ones scheduled in the near future have apparently just been learning that most people don’t have any way to store or spend the cryptocurrency. So whether they really happen or not, or what good they can do is still a question.
Instead, he has different ideas about how cryptocurrency can positively impact change in the country. Ideas that span around empowering people to have their own economic independence before airdrops can really work.
Crypto-driven humanitarian aid
Randy’s non-profit, open source project for cryptocurrency has an objective of improving the tools for people themselves. This involves adapting and translating user interfaces to reach Venezuelans, researching solutions like Bitcoin’s Lightning Network to launch in the country when it is ready, and creating a cryptocurrency index price in bolivar based on the real market price.
Right now, he said, cryptocurrency value is based on the black market dollar with a guide changed manually on a computer just once a day via Bitcoin Venezuela’s API. Randy has coded and rewritten this himself and it has been working pretty well… minus yesterday’s API crash incident.
Another innovation they are working on is the development of cheap, interconnected devices that anyone can set up in their house or around the city that works on a network alternative to the internet. This is to solve problems such as what happened last week when everything crashed: ”People couldn’t make calls, send SMS, or access the 3G mobile network.”
They are currently trying to recruit more help and funding so they can launch these devices, with the ambition of enabling people to transact cryptocurrencies with one another regardless of the country’s poor infrastructure and rid the need of spending bolivar altogether.
A sketchy future for crypto exchanges
Right now, Localbitcoins is the only exchanging pairing Bitcoin with the Bolivar, offering just enough volume to calculate the index price and real market price, as well as having an appealing escrow system. Randy noted that Paxful is looking to enter the market after the last two or three exchanges got shut down for operating without governmental permission that they were required to pay for. He commented, ”This is what Venezuela is about: paying people to do things that you are supposed to be able to do freely.”
With around 16 exchanges planned to open in the country next month, Randy shared some local rumors that they would be run by government officials and their families. As well as this, each exchange apparently had to fund the government by buying Petro tokens and pairing Bitcoin with Petro on the platform.
He speculates that the government hopes to create liquidity for Petro so people around the world might want to actually start buying and selling it themselves, potentially making it the much-needed commodity to export for strong fiat currency.
Changing the perception of crypto
One of the ongoing issues in the cryptocurrency industry is the negative attention it receives in the mainstream press, which often labels it as a tool for illicit activities. As Randy has shown, there is much more to it than that.
”There are people actually using crypto as a tool for solving peoples problems, or at least teaching them how to solve their own problems. Almost no one wants to talk about this because it’s not a good story to put in the news sites, you don’t get something that is clickbait enough and they don’t want to talk about the economics behind it,” he said.
Randy believes that press coverage of humanitarian program such as Bitcoin Venezuela is crucial to getting the positive message about cryptocurrency out there.
To read more about Bitcoin Venezuela or to donate to their humanitarian efforts, visit the website or follow them on Twitter.