Category Archives: mt. gox

Auto Added by WPeMatico

Bitcoin Unlikely to Crash After Mt Gox Payouts

Speculation that Mt Gox payouts will crash the Bitcoin markets has been gathering ever since creditors of the exchange began filing civil rehabilitation claims in August.

Specifically, one of the numerous Mt Gox creditors, Kim Nilsson, uses the very intense wording that the payouts will “completely crash the market”. Upon review, however, it appears that Nilsson’s claims aren’t likely to happen.

Japan-based Mt Gox was the biggest Bitcoin exchange during the early days of Bitcoin. It collapsed spectacularly after a hack in 2015, resulting in the theft of BTC 850,000 Bitcoins worth USD 473 million then but a whopping USD 5.44 billion as of this writing on 20 September 2018. Hope arrived for creditors when BTC 200,000 was found in a wallet used before 2011; these are today worth more than twice the amount in US dollars lost at the time of the hack.

While creditors will not recover lost Bitcoin, they stand to receive a full refund in US dollars with modest profits.

Speculation on the effect of these returns began when the recovered Bitcoin were liquidated for US dollars towards the peak of the Bitcoin rally in late 2017 and early 2018. After the liquidation, somewhere between BTC 138,000 and BTC 170,000 will be distributed to creditors. These payouts are what Nilsson is referring to, which won’t occur until February 2019 at the earliest when Mt Gox’s trustee will submit a payout plan to Japanese courts.

Even at the high-end estimate of BTC 170,000, which is USD 1.09 billion, there is no chance that the market would significantly crash when the payouts occur. As of September 2018, Bitcoin’s spot markets have USD 4 billion of trading volume daily, so that payout would only account for 25% of average daily trading volume.

Other mitigating factors are that creditors are unlikely to receive Bitcoin payouts at the exact same time. Some will also choose to hold Bitcoin due to its long-term profit potential, while others will use over the counter (OTC) markets as well as peer-to-peer trading networks to liquidate.

All factors considered, the Mt Gox payouts should only have a temporary, even negligible impact on the Bitcoin market price. If there is any noticeable impact at all around the time payouts occur, it will likely be from other traders and investors dumping due sell-off pressure.

 

Follow BitcoinNews.com on Twitter: @bitcoinnewscom

Telegram Alerts from BitcoinNews.com: https://t.me/bconews

Want to advertise or get published on BitcoinNews.com? – View our Media Kit PDF here.

Image Courtesy: Pixabay

The post Bitcoin Unlikely to Crash After Mt Gox Payouts appeared first on BitcoinNews.com.

P2P Exchange Bisq: “It Doesn’t Get More Decentralized Than This”

With a recent surge in so-called decentralized cryptocurrency exchange platforms, peer-to-peer (P2P) exchange platform Bisq appears to be one of the very few to attempt serious decentralization.

Once the favored method of exchange, P2P volume has fallen over the years but with increasing privacy and security challenges on centralized exchanges, some like Bisq see a revival in the concept of direct exchange via P2P.

Felix Moreno is one of just a few individuals who work on the decentralized P2P exchange platform Bisq openly. Most people working on it volunteer their services anonymously and for free. Why? Because, as Moreno told Bitcoin News, it is the ”holy grail” of decentralized cryptocurrency exchanges.

Bitcoin News caught up with Moreno to discuss the logistics of running a nearly entirely decentralized exchange, why they will have to fight tooth and nail to keep it that way, and why know-your-customer (KYC) regulations are really just a way for the government to get into your pockets.

Moreno’s experience

He has been in the Bitcoin world for a long time, suffered through the Mt Gox fiasco and various hacks and scams before, and now wants to do his part in minimizing these experiences for others.

”What do we need that can make exchanging as decentralized as the Bitcoin network itself? This is the closest we have gotten to that ideal,” he said. This is one of the most interesting projects Moreno says he has worked on, both making him understand what makes Bitcoin special and what potential decentralization can unlock, Moreno explains his belief that Bisq’s founders really try and live up to this standard.

A return to private exchanges between crypto users

Bisq founder Manfred Karrer shared these comments about the platform: ”To enable a privacy protecting exchange between fiat currencies and Bitcoin, it is crucial to keep your Bitcoin untainted. Protection of privacy is here directly related to security. There is a long list of hacks of centralized Bitcoin exchanges. In such events, your personal financial data including your residency address can end up in the hand of hackers and criminals. The only protection is to not store user data.”

The Bisq project is open source, operating entirely with the help of informal collaborators besides the founders. There was no initial coin offering held to raise funds; the few who helped contribute the minimal funds pre-launch did not do so expecting to see their money again. The mission getting these people so excited is an ambition to create a platform like BitTorrent but instead of offering music, offering a cryptocurrency exchange for all coins, between people and users instead of companies and banks.

Right now, you can buy and sell Bitcoin and altcoins using dozens of fiat currencies but with more users, this could potentially become hundreds. The platform uses multi-signature transactions on Bitcoin smart contracts to block in escrow the Bitcoins that people use as a security deposit, so there is a mutually assured destruction for both partners in the trade if they don’t complete it correctly.

The privacy measures do not much change the process of using the platform, Moreno detailed: ”There is a local wallet in your computer under your control so there is no way that runners of the project can access it. You can fund the wallet at the moment you want to make the trade by just scanning the QR code and depositing funds straight away.”

Bisq Founder Manfred Karrer

In terms of decentralization, what makes Bisq so different from other exchanges?

Bisq does not require you to have an account or share your information with a third-party company. Your information is stored locally in the Bisq Client, an application that you need to download onto your computer, and only the minimum of this is shared with the trade counterpart and nobody else. For example, if you are trading with fiat, your bank details will be shared. A Bitcoin-Monero trade, on the other hand, will not even share your name with the trading partner, only your wallet address.

”There is no way we could turn into a KYC financial surveillance company because there is no company, there is no one the SEC can send a subpoena to. There is no one in charge,” Moreno explained.

Privacy is crucial for them. Moreno outlined the main issue with centralized businesses: ”Big companies leak large amounts of user data every week, and the ones who are not leaking are the worst offenders, accumulating social media and search engine data to sell to advertisers in the best case scenario. The worst case scenario is something from (the book) 1984.’

Privacy, he added, is especially important with finances due to the risks of theft, fraud, and rich Bitcoin traders that could become susceptible to phishing scams if their data is shared. He also recognized that there are different degrees of decentralization with Coinbase at one end, Hodl Hodl somewhere in the middle, and then Bisq.

”Ideally, Bisq is so successful that it will be copied by a lot of people and because it is open source code this will be easy. I’m fine with that, that’s the spirit of open source,” he explained.

A dying kind

Moreno pointed out that even companies that have tried to offer decentralized platforms, such as Shapeshift, reach a certain level of success and then have to ”ignore the ‘no account needed’ hashtag”. They may not want to impose KYC, he said in the case of Shapeshift: ”I know Eric (Shapeshift CEO), he’s a great guy, really believes in privacy. But once you run a company with dozens of employees and investors you cannot take the legal risk. Shapeshift is incorporated in Switzerland so technically the SEC doesn’t have anything to say about it in theory, but in practice, the long reach of American regulators extends at least over half the world if not more… I don’t think he has a choice.”

Bisq Co-Founder Chris Beams

It is not perfect

There are risks to this level of decentralization and the platform itself is not perfect. For one, it exposes Bisq to scammers that in some other places can be stopped with an identity check, but it uses a set of incentives and smart contracts to minimize this risk. Moreno says he has used nearly every trading platform there is and has realized it is much more detrimental to scammers to have a security deposit there to lose than to ask for identification. Bisq has a double security deposit, which when trade is completed, both parties recover but if there are any issues they can lose their money.

One aspect that people may also not like is the fact you have to download a program to run on your computer.

”That’s like early 2000s, who does that anymore?” Moreno joked, clearly aware that this is a problem for some people. It is, however, the only way to exchange completely securely and to let people really have control of their own node, he said.

Some people might also not enjoy the fact that because they are completely in control of their own funds as any mistake is on the user: ”It’s like in the early days of Bitcoin when you send funds to the wrong address – you’re screwed. But that’s your responsibility and some people don’t want that.”

And then there is the issue of speed. You can not simply buy with one click when making a market order as you can on some centralized platforms; the multi-signature which is on the Bitcoin blockchain requires at least 10 minutes for confirmation. Then the speed depends on your payment network; some ways such as through a Revolut account will be quick, but international bank transfers can sometimes take five days or more.

Fighting to stay online, and why regulations are really there

While Bisq may avoid most regulations because of its decentralized structure, the path ahead for them is not easy: ”Bisq is going to have a very hard time surviving the way it is doing things… We will have to fight like hell and use every technological advantage to keep it up.”

If there is a company behind it, Moreno says, every exchange will get a call from local regulators who want first: full KYC and the source of funds for counterterrorism measures especially over certain amounts, and secondly: automatic data sharing like banks already have with tax authorities so they can ”go on phishing expeditions to see who isn’t declaring all their Bitcoin income or whatever”.

Moreno continued, ”KYC is not there out of the goodness of their hearts; it’s a slippery slope towards first identifying you, then getting money out of you. If tax authority lobbyists win, they will allow crypto activities to continue but they will be taxed and if financial industry lobbyists win, they will exclude competition so only big financial companies can run exchanges with proper licenses.”

Industry self-regulation

So is industry self-regulation the way forward? Well, Moreno thinks it could work.

He explained that now, more than ever, there is the opportunity to do it well by using smart contracts and setting up things such as automatic penalties for people who break the rules. ”That can get us very very far, much farther than all the preventative KYC regs”, he said, adding that reputation networks too have always worked because people care a lot about return trade.

”If people are completely anonymous, it’s very easy to have a selfish attitude, but if it’s someone you have some sort of relationship with, it’s only the psychopaths that are going to give that up for a short-term gain,” Moreno remarked.

Bisq Co-Founder Christoph Atteneder

Set the date: 20th September

Right now, trading volumes are comparatively very small: ”Bisq is at 183 on Coincap, it’s tiny.”

For euros and dollars, trading is decent but for some other currencies such as the Argentinian peso, there is hardly anyone on the platform offering pairs. ”Argentina really needs it but again, most people will not do the work of finding decentralized exchanges until they suffer a hack or find their account frozen,” Moreno noted.

To try and encourage traders, Moreno has planned a kick start virtual event on 20 September 2018. He is asking everybody who is interested to go on Bisq and place an ad.

”If you don’t want to trade just say ‘I’m here, I’m interested and when the time comes to buy and sell I will be here,’ especially for lesser used currencies. If we can get 4/5 people for these currencies, other people can see there are people trading around them.”

It may not be the fastest platform, the most accessible or provide some of the assurances that KYC compliant exchanges do, but as Moreno believes, ”Right now, Bisq is the best we have got by far.”

To find out more about Bisq, or to contribute to the platform, join the Slack or follow them on Twitter.

 

Follow BitcoinNews.com on Twitter: @bitcoinnewscom

Telegram Alerts from BitcoinNews.com: https://t.me/bconews

Want to advertise or get published on BitcoinNews.com? – View our Media Kit PDF here.

Image Courtesy: Bisq

The post P2P Exchange Bisq: “It Doesn’t Get More Decentralized Than This” appeared first on BitcoinNews.com.

Mt. Gox Collecting Creditors’ Lost Funds Claims

Japanese cryptocurrency exchange Mt. Gox began collecting civil rehabilitation claims on Thursday as it attempts to start restoring the creditors’ lost bitcoins.

The platform released an online claim submission process with Nobuaki Kobayashi as the acting trustee. The claimants will be able to respond until October 22. Detailed online is advice and a step-by-step guide on how exactly users can make their claims or access their Mt. Gox accounts to claim the ”return of cryptocurrency and money against MTGOX.” There is also an offline process that can be followed, should there be any issues or lack of information required to submit claims online.

In an online statement earlier this month, Mt. Gox officials warned that any proof of claim not issued by the deadline would be subject to disenfranchisement — a loss of the right to claim. It also detailed the Mt. Gox administration’s ambition to make the whole civil rehabilitation process as comprehensive and transparent as possible. The statement reads: ”The rehabilitation plan should be simple and the implementation thereof should have a high degree of certainty.”

These recent proceedings have been welcomed by users of the platform that failed to submit claims prior to its bankruptcy.

Mt. Gox’s controversial history

One of the earliest cryptocurrency exchanges, Mt. Gox, collapsed in early 2014 following the biggest Bitcoin theft to date: BTC 850,000, approximately USD 473 million at the time.

While BTC 200,000 were later recovered, they remained frozen in Mt Gox’s accounts as it fell into bankruptcy, leaving creditors waiting nearly four years to know whether or not to ever expect their funds returned.

Mass bitcoin sell-offs by Mt. Gox has characterized the exchange’s practices since November 2017, often allegedly causing markets to become unsettled. In June, however, Kobayashi stated that he would make sure this came to an end.

Follow BitcoinNews.com on Twitter: @BitcoinNewsCom

Telegram Alerts from BitcoinNews.com: https://t.me/bconews

Image Courtesy: Pixabay

The post Mt. Gox Collecting Creditors’ Lost Funds Claims appeared first on BitcoinNews.com.

Trump Aide Mulvaney Says Hands-Off Bitcoin Approach Will Push Market

Mick Mulvaney, acting director of the Consumer Financial Protection Bureau, says a “Goldilocks moment” needs to be found in any regulation of the cryptocurrency ecosystem, reports Coindesk.

John Michael Mulvaney is an American politician of the Republican Party serving in President Donald Trump’s cabinet as Director of the Office of Management and Budget and Acting Director of the Consumer Financial Protection Bureau since 2017. He was a founding member of the blockchain caucus back in 2016 claiming then:

“Blockchain technology has the potential to revolutionize the financial services industry, the US economy, and the delivery of government services.”

Mulvaney, a self-confessed conservative in fiscal matters, has nonetheless expressed concerns about over-regulation in the cryptocurrency industry, claiming that to do so would discourage interest in the burgeoning marketplace:

“We knew at an early point in Bitcoin that as with any developing financial technology we needed to find that sweet spot… if Mt Gox became a regular occurrence it dramatically undermines confidence in the markets and prevents innovation. And if we over-regulate and discourage people from entering the marketplace, that has bad consequences too.”

He made the comments at the Future of Fintech conference hosted by research and analysis firm CB Insights when  he made his sugary reference, saying that a kind of middle path was the right approach to regulating the market; a “Goldilocks” route, arguing that it is also important to consider the protection of investors as well as companies and not weigh them now with unnecessary laws:

“It’s a new and innovative technology, it’s a nonbanking system, it’s whatever. If people still can’t get access to their own money, that’s a problem. So the law’s functioning correctly there.”

President Trump’s personal view regarding digital currencies is fairly obscure, considering he appears to a have a view on everything else. However, apart from Mulvaney’s appointment, some of his other selections to prominent roles in government back in 2016 had cryptocurrency links, such as Milo Yiannopoulos, the technology editor for Breitbart News and a Bitcoin supporter, and Peter Thiel, a vocal Bitcoin advocate and an investor in cryptocurrency startup BitPay, according to Forex News Now.

 

Follow BitcoinNews.com on Twitter at https://twitter.com/bitcoinnewscom

Telegram Alerts from BitcoinNews.com at https://t.me/bconews

The post Trump Aide Mulvaney Says Hands-Off Bitcoin Approach Will Push Market appeared first on BitcoinNews.com.

Marco Santori – Bitcoin Law In The U.S., Part I

Marco Santori – Bitcoin Law In The U.S., Part I:

Marco Santori, Chairman of Bitcoin Foundation (@BTCFoundation)’s Regulatory Affairs Committee, gives a basic primer on the state of US law as it applies to digital currency entrepreneurs.  Excerpts of the post on Coindesk:

If the last few months have taught us anything, it is that there will soon exist a new and evolving body of law: The Law of Digital Currency, or, as some would prefer it: Bitcoin Law.”

”[…] ‘virtual currency’ is something of a loaded term, and bitcoin may not even be best described as a currency at all.”

“[In addition to regulators FinCEN and the SEC, the] consensus among legal professionals is that two more government agencies might soon have a hand in the market as well: the Commodity Futures Trading Commission (CFTC) and the Consumer Financial Protection Bureau (CFPB).”

“Some have called [FinCEN’s issuance of guidance] bitcoin’s ‘watershed moment’ because of its clear, unequivocal positive message: bitcoin is not illegal. The negative consequence, though, was just as obvious: Many bitcoin businesses models are illegal.”

“In effect, the [Bank Secrecy Act (BSA)] deputizes financial institutions, requiring them to act as the government’s foot soldiers in its war on money laundering.”

 – http://www.coindesk.com/bitcoin-law-what-us-businesses-need-to-know
 – http://bitcointalk.org/index.php?topic=276614.0 (Further discussion of the article)

All News – Daily E-mail Subscription – Twitter: @BitcoinNews