Daily Archives: January 2, 2022

Billionaire Ray Dalio Insists Governments Could Outlaw Bitcoin

Billionaire Ray Dalio Insists Governments Could Outlaw Bitcoin

Billionaire Ray Dalio, the founder of the world’s largest hedge fund, Bridgewater Associates, has reiterated his warning that governments could outlaw bitcoin. “In history, they’ve outlawed gold and they’ve outlawed silver and so on, and they could outlaw bitcoin,” he stressed.

Ray Dalio Continues to Warn About Governments Outlawing Cryptocurrency

Bridgewater Associates founder Ray Dalio talked about bitcoin as he reiterated his warning that governments could outlaw the cryptocurrency on the Investor’s Podcast Network, published Saturday. Dalio currently serves as Bridgewater Associates’ chairman and co-chief investment officer. His firm’s clients include endowments, governments, foundations, pensions, and sovereign wealth funds.

Dalio warned that “there are regulatory issues” surrounding bitcoin. “When you have an alternative currency, that’s a threat to every government,” he elaborated. “Every government wants a monopoly in their own currency and particularly if you get a better currency because it doesn’t get devalued.” Dalio added:

In history, they’ve outlawed gold and they’ve outlawed silver and so on, and they could outlaw bitcoin.

Nonetheless, Dalio admitted that he has a small amount of bitcoin in his portfolio for diversification. “I’m Mr. diversification,” he said. The Bridgewater Associates boss also recently revealed that he also owns some ether (ETH).

Commenting on the recommendation by another famous fund manager, Bill Miller, who said that investors should hold about 1% to 2% of their portfolio in bitcoin, Dalio said, “I think that’s right.”

Despite the worry that governments may ban bitcoin, Dalio opined:

It’s very impressive that this concept was programmed something like 10, 11 years ago and has stood the test of time.

The billionaire previously said he does not believe that bitcoin will replace gold as some people have suggested. He also does not believe that the price of BTC could reach a very high number such as $1 million.

In contrast, Microstrategy CEO Michael Saylor has repeatedly said that bitcoin will replace gold. The pro-bitcoin executive also expects the price of BTC to reach $6 million. In addition, fund managers are increasingly opting to invest in bitcoin over gold, seeing the cryptocurrency as a better store of value.

The Bridgewater Associates founder has warned about governments banning bitcoin for quite some time. In September last year, he said that regulators will kill bitcoin if it becomes “really successful.” In addition, he said in May last year that the success of cryptocurrencies could bring tough regulations. For example, he noted regulators could impose “shocking” taxes on digital currency.

Do you agree with Ray Dalio? Let us know in the comments section below.

Power Outages in Russia’s Irkutsk Region Blamed on Home Miners

Power Outages in Russia’s Irkutsk Region Blamed on Home Miners

Russians mining cryptocurrency in their homes have been blamed for the problems with the electricity supply in Irkutsk. Power outages have become a frequent occurrence in the region which maintains the lowest electricity rates in Russia. Subsidized household energy has turned mining into a source of income for many locals.

Electricity Consumption Spikes Amid Spread of Home Crypto Mining in Irkutsk

Power grid operators in Irkutsk have been dealing with a growing number of outages. The region and the city are experiencing a tangible increase in electricity consumption that overloads the distribution network. Local officials claim this has been caused by cryptocurrency miners who mint digital currencies in their apartments, basements, and garages.

As a way out of the exacerbating situation, they are now proposing a set of measures to address the challenges. Authorities want to upgrade the capacity of the distribution network in Irkutsk Oblast, introduce higher tariffs for crypto miners and establish special platforms to host their activities, the Russian business daily Kommersant reported.

In December, various parts of Irkutsk experienced either planned or emergency outages, the publication reveals. Since June, there has been a sharp increase in the pressure on the grid in residential areas, the local utility told the newspaper.

“Despite the warm weather in November, the load increased by almost 40% compared to last year. The significant loads on the power networks and the growing number of outages are associated with the activities of miners,” the Irkutsk Electric Grid Company (IESC) explained. Its calculations show that consumption in the city of Irkutsk has surged by 108% for the whole of 2021.

IESC emphasized that coin minting is very energy-intensive as the equipment operates around the clock. Engineers warn that the existing electrical networks in towns and cities are not designed for the constant, “industrial” load that the mining hardware creates. The company has been forced to cut off the supply in many areas to replace fuses and install power lines with higher capacity.

Over 1,100 Cases of ‘Gray’ Crypto Mining Registered in 2021

Utilities in the region have been trying to locate the mining facilities responsible for the spike in consumption. “In Irkutsk, 21 electrical installations suspected of cryptocurrency mining were identified… Mining equipment is installed on balconies, in residential premises and basements of apartment buildings,” Irkutskenergosbyt announced.

During the raids, inspectors have found more than 1,100 cases of the so-called “gray” mining in the Irkutsk Oblast in 2021. A recent report unveiled that Irkutskenergosbyt utility has filed 85 lawsuits against people involved in home crypto mining with claims totaling 73.3 million rubles (over $980,000). It has already won nine court cases from which it expects to receive 18.7 million rubles ($250,000) in compensation.

In December, the federal government in Moscow allowed authorities in Russian regions to independently determine local electricity rates for the population. The measure is expected to increase the costs of amateur crypto mining. Subsidized household electricity in Russia is often used to mint digital currencies at homes.

Irkutsk, which has been called the mining capital of Russia, has the lowest rates in the country at only 0.86 rubles ($0.01) per kWh when the average tariff in Russia is six times higher. Calls have been mounting among officials in Moscow and regions like Irkutsk to recognize mining as a business activity, introduce higher electricity rates for miners and tax them. A working group at the State Duma is discussing regulatory proposals for the sector and other crypto-related activities.

Do you expect Russia to soon regulate cryptocurrency mining and raise electricity tariffs for miners? Tell us in the comments section below.

0.2 Zettahash: Bitcoin’s Hashrate Taps New Lifetime High, Mining Difficulty Nears ATH

0.2 Zettahash: Bitcoin's Hashrate Taps New Lifetime High, Mining Difficulty Nears ATH

Bitcoin’s hashrate tapped a lifetime high on the first day of 2022 reaching 209.39 exahash per second (EH/s). During the last 12 months, Bitcoin’s hashrate has increased by 47.92% from the 141.55 EH/s recorded on January 3, 2021.

Bitcoin’s Hashpower Reaches a New Milestone

The processing power and security dedicated to the Bitcoin (BTC) network has never been higher, and the network tapped a milestone in 2022. According to the one-year hashrate chart hosted on coinwarz.com, BTC’s hashrate tapped a high of 209.39 EH/s on January 1, 2022. At the time of writing, the hashrate is still coasting along the two hundred three quintillion hashes per second (H/s) zone, and 30-day statistics indicate the network briefly tapped 224.32 EH/s on Saturday.

Bitcoin.com News recently reported on the BTC network reaching 194.95 EH/s not too long ago on December 8, 2021. It’s also worth noting that the Ethereum (ETH) network also reached an all-time high tapping 1 petahash per second (PH/s).

On December 22, 2021, the Ethereum network reached 1.0122 PH/s and today’s metrics show ETH’s hashrate is still above the 1 PH/s on Sunday. On January 3, 2021, Bitcoin’s hashrate was 141.55 EH/s or 47.92% lower than today’s BTC hashpower statistics.

Hashrate Climbs Over 200% Since China’s Bitcoin Mining Crackdown, Mining Difficulty Nears All-Time High

Moreover, on June 28, 2021, China’s crackdown against BTC miners caused the hashrate to plummet to 69.11 EH/s. The network’s hashrate has grown ​​202.98% since that day as a great majority of mining operations relocated to other countries. At the time of writing, the largest bitcoin mining pool is Foundry USA with 19.45% of the global hashpower or 34.79 EH/s. The second-largest mining pool in terms of global hashrate is Antpool with 16.91% of the hashrate or 30.25 EH/s.

There’s only 11 known mining pools mining BTC today and 3.81% of the global hashrate stems from unknown hash or stealth miners. BTC miners have faced two bitcoin mining difficulty increases during the last two epochs. On December 11, the difficulty jumped 8.33% and on the 25th of December, it increased by 0.32%. Bitcoin’s next mining difficulty change will bring it awfully close to the difficulty’s all-time high at 25 trillion. In just over five days, the difficulty is expected to increase by 2.90% to 24.98 trillion.

What do you think about Bitcoin’s global hashrate growing 47% during the last 12 months and tapping an all-time hashrate high on January 1, 2022? Let us know what you think about this subject in the comments section below.

India’s Central Bank RBI Says Crypto Is Prone to Fraud and Poses Immediate Risks to Consumer Protection

India's Central Bank RBI Says Crypto Is Prone to Fraud and Poses Immediate Risk to Consumer Protection

India’s central bank, the Reserve Bank of India (RBI), has warned about multiple risks cryptocurrency poses to the country’s financial stability. “They are also prone to frauds and to extreme price volatility,” the apex bank claims, stressing that “cryptocurrencies pose immediate risks to customer protection and anti-money laundering (AML) / combating the financing of terrorism (CFT).”

RBI’s Assessment of Cryptocurrency

India’s central bank, the Reserve Bank of India (RBI), published its biannual Financial Stability Report (FSR) last week. The 144-page document includes a section on “private cryptocurrency risks.” The term “private” refers to all cryptocurrencies that are not issued by the RBI, including bitcoin and ether.

The central bank wrote:

The proliferation of private cryptocurrencies across the globe has sensitized regulators and governments to the associated risks.

“Private cryptocurrencies pose immediate risks to customer protection and anti-money laundering (AML) / combating the financing of terrorism (CFT),” the RBI stressed.

In addition, the central bank noted: “They are also prone to fraud and to extreme price volatility, given their highly speculative nature. Longer-term concerns relate to capital flow management, financial and macroeconomic stability, monetary policy transmission, and currency substitution.”

The report also references the finding of the Financial Action Task Force (FATF) which states that “the virtual asset ecosystem has seen the rise of anonymity-enhanced cryptocurrencies (AECs), mixers and tumblers, decentralized platforms and exchanges, privacy wallets, and other types of products and services that enable or allow for reduced transparency and increased obfuscation of financial flows.” The RBI emphasized:

New illicit financing typologies continue to emerge, including the increasing use of virtual-to-virtual layering schemes that attempt to further muddy transactions in a comparatively easy, cheap and anonymous manner.

Noting that the market capitalization of the top 100 cryptocurrencies has reached $2.8 trillion, the RBI warned that “In the EMEs [emerging market economies] that are subject to capital controls, free accessibility of crypto assets to residents can undermine their capital regulation framework.”

The report also addresses decentralized finance (defi), which “has recently been flagged by the Bank of International Settlements (BIS) as carrying the danger of concentration of power,” the Indian central bank pointed out, adding:

The rapid growth of decentralized finance (defi) is geared predominantly towards speculation and investing and arbitrage in crypto assets, rather than towards the real economy.

The RBI added that the limitation of AML and know-your-customer (KYC) provisions, “together with transaction anonymity, exposes defi to illegal activities and market manipulation and poses financial stability concerns.”

The Indian central bank has repeatedly said it has major and serious concerns about cryptocurrency. In its recent meeting of the central board of directors, the RBI called on the government to completely ban cryptocurrency, stating that a partial ban will not work.

Meanwhile, the Indian government has delayed introducing a cryptocurrency bill. A bill was listed to be considered in the winter session of parliament but it was not taken up. The government is now reportedly reworking the bill.

What do you think about India’s central bank’s warning about cryptocurrency? Let us know in the comments section below.

13 Crypto Exchanges Custody 7% of the Crypto Economy, Coinbase Dominates With $56.2B AUM

13 Crypto Exchanges Custody 7% of the Crypto Economy, Coinbase Dominates With $56.2B AUM

As 2022 begins, 13 different cryptocurrency exchange platforms have more than a billion dollars each in digital currencies held in reserves. Between all 13 trading platforms, the group of exchange platforms hold a whopping $165.25 billion worth of bitcoin, ethereum, and tether.

13 Crypto Exchanges Hold a Billion or More in Crypto Equalling Over $165 Billion in Assets Under Management

At the time of writing, the crypto economy is worth $2.3 trillion and 7.10% of the aggregate or $168 billion is made up of stablecoins. Furthermore, statistics on January 2, 2022, indicate that 13 crypto-asset trading platforms hold a billion dollars or more in cryptocurrencies.

The 13 exchanges include Coinbase, Binance, Huobi Global, Kraken, Okex, Gemini, Bitfinex, Bittrex, Bitflyer, Coincheck, Bitstamp, and Bybit respectively. Coinbase is the leader, in terms of crypto reserves held on Sunday, with $56.2 billion in crypto assets under management (AUM).

$40.27 billion of Coinbase’s reserves is made up of bitcoin (BTC), with 853,530 BTC in custody. The second-largest exchange in terms of crypto AUM is Binance with $24.85 billion today. Binance has 370,390 BTC, 3.59 ETH, and 1.24 billion USDT under custody.

All 13 exchanges hold approximately 165.25 billion in crypto assets on January 2, 2022, which equates to 6.98% of the $2.3 trillion crypto economy. Bybit maintains the 13th position, in terms of crypto reserves, and holds $1.44 billion in digital assets.

10 Crypto Asset Trading Platforms Hold More Than $50 Million, 23 Exchanges Custody Over a Million in Crypto Reserves

Approximately ten crypto-asset exchanges command more than $50 million in crypto AUM. 23 exchanges hold a million dollars or more in crypto AUM and dozens of crypto exchanges have no available reserve data.

This report’s crypto exchange reserve data published on January 2, 2022, at 8:15 a.m. (EST) was recorded by Bituniverse, Peckshield, Chain.info, and Etherscan.

The only organization that surpasses the bitcoin (BTC) reserves Coinbase holds is Grayscale Investment’s Bitcoin Trust (GBTC), and the trust’s 648,069 BTC under custody. The Bitcoin Trust has 3.086% of the 21 million capped bitcoin supply.

Another entity that has more than 100K in BTC assets is Block.one with 140,000 BTC under management, while the publicly-listed company Microstrategy holds ​​124,391 BTC today. Grayscale, Block.one, and Microstrategy are the only non-exchange entities with 100K BTC or more.

What do you think about the 13 crypto exchanges with $165 billion under management? Let us know what you think about this subject in the comments section below.

Eminem Purchases Bored Ape Yacht Club #9055 for $452K, Shady’s Portfolio Holds 166 NFTs

Eminem Purchases Bored Ape Yacht Club #9055 for $452K, Shady's Portfolio Holds 166 NFTs

Marshall Mathers, known professionally as Eminem has joined the community of bored apes by purchasing a Bored Ape Yacht Club (BAYC) non-fungible token (NFT) collectible for 123.45 ethereum or $452K at the time of settlement.

Slim Shady Purchases Bored Ape Yacht Club #9055 for $452K

The Bored Ape Yacht Club (BAYC) NFTs have been very popular this year and the project saw more than $1 billion in volume worldwide, according to defillama.com metrics. Now Eminem has joined the BAYC bandwagon by purchasing BAYC #9055 for 123.45 ether on Thursday. The Detroit hip hop star shared the image on Twitter by using it as his social media bio picture.

Furthermore, the BAYC #9055 purchase indicates that the new owner is called “Shady_Holdings” on the Opensea platform and the portfolio also owns a number of Lil Baby Doodles X NFTs, Ditaggdogg#1 featuring a stencil image of the rapper, and Superlative Apes #3880.

Eminem also owns the NFTs SABC #2615, Shaq Gives Back #4077, and Adult Fantasy Sub-Dude (130/151). In fact, the Shady_Holdings address holds a myriad of ERC721 NFTs. Eminem purchased BAYC #9055 from the NFT’s owner Geegazza, who shared his excitement on Twitter. Geegazza said:

I sold Eminem his @Boredapeyc…

Eminem Holds NFTs From 32 Collections

According to dappradar.com metrics, Slim Shady owns 166 non-fungible token (NFT) assets from 32 collections. At the time of writing, the address holds 1.52 ether after purchasing BAYC #9055 for 123.45. Eminem got 124 ether from an account that uses the ENS name georgio.eth. That account holds 504 NFTs from 51 collections including Bored Ape Yacht Club #4936 and it spent 43.98 ether ($164,832) on two Cryptopunks.

Eminem’s NFT spending spree follows the recording artist’s beat-inspired animated NFTs for Stans in April. Eminem’s NFT sale took place on the NFT marketplace Nifty Gateway. Furthermore, in August, Slim Shady and Paul Rosenberg joined a slew of venture funds that injected $30 million into the NFT market Makersplace.

What do you think about Eminem’s Bored Ape Yacht Club (BAYC) purchase for 123 ether and the rapper’s NFT collection? Let us know what you think about this subject in the comments section below.

Turkey Reveals Scheme That Encourages the Conversion of Gold Deposits Into Lira Time Deposits

Turkey Reveals Scheme That Encourages the Conversion of Gold Deposits Into Lira Time Deposits

The Central Bank of the Republic of Turkey recently revealed it made the decision to provide incentives to gold deposit and participation fund holders that request to convert these into lira time deposits, a statement from the central bank has said.

Incentives Intended to Boost Financial Stability

The Central Bank of the Republic of Turkey (CBRT) has announced the launch of an incentive scheme that encourages Turkish residents to convert their gold deposits and participation funds into lira time deposit accounts.

In a brief statement released in late December 2021, the central bank explained that this incentive scheme is intended “to support financial stability.” As has been widely reported, Turkey is in the midst of a deep economic crisis that has led to the sharp depreciation of the lira and the rising of prices.

In turn, this combination of a falling currency and a rising rate of inflation has seen more Turkish residents seek sanctuary in alternative stores of value like gold and digital currencies. As recently reported by Bitcoin.com News, the number of daily cryptocurrency trades in that country recently went past the one million mark. This milestone suggests that more Turkish residents are choosing to protect their savings with alternatives such as bitcoin and gold.

Conversion to Lira Time Deposits

Therefore, as part of the Turkish government’s latest attempt to halt the lira’s decline, the central bank explained in the statement that “deposit and participation fund holders” choosing to convert their funds into lira will get incentives.

“The Central Bank of the Republic of Turkey has decided to provide [an] incentive to deposit and participation fund holders in the event that their gold deposits and participation funds are converted into Turkish lira time deposit accounts at the account holder’s request,” read a statement released by the central bank on December 29.

The statement however does not share the details of how the CBRT is planning to reward residents that agree to have their gold or participation funds converted.

What are your thoughts about this story? Tell us what you think in the comments section below.

A Jacobin Podcast Review: Critiques on Crypto and Sterlin’s Response

The following opinion editorial is a Jacobin Podcast review written by the author Sterlin Lujan, the chief risk officer with Cryptospace. The Jacobin Podcast episode called: “Dig: Cryptocurrency w/ Edward Ongweso Jr & Jacob Silverman,” touches upon “cryptocurrency, NFTs, Elon Musk, the metaverse, meme stocks, and techno-utopianism amid the crushing reality of our neoliberal hellscape.”

Cryptocurrency isn’t fringe technology anymore. Over the last decade, it has become embedded into finance, culture, and even our social life. It’s drastically changing the way we think about money, economics, and human action. However, some people, primarily on the left, are skeptical of cryptocurrency. Many of them hate it, regardless of how much of a godsend it has been for many.

My friend, thought leader, author, and psychedelic visionary, Daniel Pinchbeck, pointed out a recent podcast episode of Jacobin called “Dig: Cryptocurrency w/ Edward Ongweso Jr & Jacob Silverman.” He asked me if I would listen to the podcast, and take the time to address their claims and concerns.

I would not typically use the time to do this — but Daniel is interested in furthering the discussion around crypto. I also believe a review and critique of the material will benefit others who want an insider’s opinion, as I have been working actively in the industry for 6 years. It’s my hope, then, that this in-depth response will create an evolutionary and freewheeling discussion about the benefits, capabilities, and fears behind crypto.

Notes: Moving forward, I refer to the podcast speakers and guests as the “Podcasters” for simplicity sake. All of their arguments are numbered and in bold. My response immediately follows each of their arguments. I also sometimes separate my use of “crypto” and “bitcoin.” I may use crypto to refer to the ecosystem generally, and I may use bitcoin to address a specific point they made about it. The context of each section and the argument I am addressing will help clarify. I have also left many links for follow-up research and to provide factual evidence.

“Crypto supporters believe these digital tokens are supposed to have value somehow.”

The podcasters believe “cryptocurrency” cannot or does not have value. They attempt to dismiss cryptocurrency by claiming it is not really a currency, but only “digital tokens” or digital faberge eggs.

The reality is these “digital tokens” do have value. They have literal value as demonstrated by their market capitalization and trading activity at exchanges. Even the podcasters reference the trillion-dollar valuation of the crypto markets throughout the podcast, undermining their own claims.

Naturally, their perspective leads them down the rabbit hole of believing crypto is not currency or money. Using semantics, they try to devalue cryptocurrency by dismissing or ignoring its impact, although their critique misses the reality of what’s happening in the world.

“Bitcoin (and other cryptos) are not “currency, because they can’t be exchanged for goods and services”

This claim is patently false. With a quick Google search, we can ascertain that roughly 15,000 businesses currently support accepting bitcoin for payment. This is not an insignificant amount. The number of businesses that accept crypto is also likely an underestimate, because many retailers also accept various alt-coins. To add an anecdote, I have personally exchanged crypto for goods and services…directly and on multiple occasions. So what is the point of the anecdote? You can disprove the podcaster’s claims yourself without having to strain too many neurons. Just navigate onto overstock.com, place some items into your cart, and proceed to pay with the crypto.

Here is another salient point. Not only can you purchase goods and services for crypto directly, you can also leverage various intermediaries to purchase goods with your crypto. With purse.io, you can use a middleman to buy your wares from Amazon and earn a 10 to 15% discount. Or, if you use Dash cryptocurrency, you can download dash direct app, buy gift cards, and then purchase from a variety of stores at a discount.

I mention these options and innovations to demonstrate the podcasters are ignorant of all the ways to purchase goods and services with crypto, or they are lying to support an anti-crypto agenda. I hope it’s the latter.

“Crypto is too volatile to support any kind of major use case.”

Cryptocurrency does suffer from violent swings on the market and seemingly excess volatility. But the podcasters missed the solution. The beautiful thing about crypto is innovation is not hamstrung by inefficient bureaucracies or sluggish banking regulators. In comes the stablecoin. It was invented as a way to mitigate market volatility.

Of course, many object to stablecoins as they are just pegged to the US dollar. It is certainly true many stable tokens are pegged to the dollar, but luckily stablecoins can be pegged to anything; silver, gold, oil, leprechauns (that is the beauty of programmable tokens). The point is stablecoins solve the volatility problem and allow crypto to morph into a stable unit of account when necessary.

As a side argument, some people don’t view the volatility of bitcoin and crypto as a problem. There is a huge amount of volatility in the fiat and FX markets. However, a lot of the volatility is obscured by capital controls and other government meddling. In nature, nothing is consistently stable; there are waves and troughs; tops and bottoms; sine waves. Early crypto thinker Daniel Krawisz wrote a piece called I love Bitcoin’s Volatility over at the Satoshi Nakamoto Institute. Daniel elaborated poignantly on the volatility problem,

“To complain that no one will use Bitcoin because it is too volatile is therefore like saying, ‘Bitcoin’s adoption rate is so astonishingly fast that it will never be popular!’ It’s like saying, ‘This oven is heating up so fast that I’ll never be able to cook with it!’ It’s like saying, ‘This novel is so exciting that no one will ever read it!’

There is no evidence that Bitcoin’s volatility is hurting it. Any imaginable indication of Bitcoin’s adoption rate will show that its adoption rate is extraordinarily rapid. So how, exactly, can volatility be a problem? If Bitcoin were less volatile, would it have an even more rapid adoption rate? This is nonsense because Bitcoin’s price has to go up as more people start using it, and if a lot of new people start using it, then it has to go up fast (that is, be volatile).”

“Main use case for cryptocurrency is market speculation.”

I rebutted this claim earlier by addressing the idea that crypto has no use case as a currency. However, one may say the main use case is still speculation. I believe this argument is primarily a diversion or red herring.

Speculation is not a use case. It’s simply a byproduct of emergent technology. Saying that cryptocurrency’s primary use case is speculation is just like claiming the internet’s primary use case was speculation, which is what happened during the dot-com bubble. Of course, speculation is just investor activity, regardless of the merits or faults of that activity.

In reality, cryptocurrency (especially blockchain) has a myriad of use cases, but the main use case is money, which was the original utility of bitcoin as a result of Satoshi Nakamoto solving the double-spend problem. Other use cases (for crypto/blockchain) include utility tokens serving a governance function, as a stablecoin, as a coin powering prediction markets, or as a reward token fueling lending platforms. Use cases in the cryptocurrency ecosystem are legion, and anyone who thinks otherwise is out of touch.

For people requiring additional reading of all the real-world blockchain/crypto token use cases visit this link.

“Productive value of cryptocurrency is none. I can’t see it as a currency. It is for speculators. It is used to facilitate movements of funds from one pocket to another. Pump-up self-dealing assets (AKA rug pull).”

The podcasters continue to harp on the idea that crypto has no “productive value,” except to facilitate scams and pump-and-dump schemes.

I’ve already shown plenty of value and use cases in my previous rebuttals, but I want to address the notion that crypto is largely used for pump-and-dumps.

The podcasters have a valid concern regarding rug pulls and pump-and-dump schemes in the space. There have been enough of these that it has certainly tarnished the reputation of crypto in some circles.

However, this problem does not exist as a permanent scar within the ecosystem. It’s partially the product of new technology and ignorance. Scammers have emerged because newbies get involved in the ecosystem and fail to educate themselves. They fall for hype and get sucked into a rug pull or Ponzi scheme. When enough time passes, the ecosystem will mature and most of the scammers will be weeded out.

Many crypto companies are starting to warn users not to invest in crypto tokens they don’t understand and to educate themselves before diving in. This education mentality is becoming a sticking point in the industry, because — contrary to popular opinion — many industry players actually care about supporting users and customers. We will continue to see this trend grow as the ecosystem matures.

As a final point, I want to reemphasize the fact that crypto has massive “productive value.” Here is one example: The bitcoin cash community started a program called “Eat BCH.” They developed this program to feed the poor and destitute in Venezuela and South Sudan. To date, the BCH advocates have fed thousands of people in Venezuela. It makes sense people in the crypto industry would conduct such charitable initiatives, because fiat in countries like South Sudan and Venezuela are useful as toilet paper due to runaway hyperinflation.

The “Eat BCH” initiative is what I call “productive value,” and it’s these “selfish capitalist crypto bros” engaging in it.

“Currency needs to be tied to the state or some kind of political governance.”

The most asinine argument the podcasters on Jacobin made is that private money is dangerous and money should be tied to a state or political governance.

Currency maintained by governments, politicians, and despots has caused tremendous suffering. When governments control the money supply, they can (and will) print out as much of it as they want to fund endless wars, enrich their friends at the expense of the people, and inflate its value away. In effect, government-monopolized, centrally controlled money is the harbinger of death and destruction. This is not hyperbole. For more understanding of the perils and pitfalls of fiat currency, please read The Fiat Standard by Saifedean Ammous.

When the podcasters make the claim they want to see currency tied to a government, they effectively want to enslave the rest of mankind to a life of inflationary, debt servitude.

Bitcoin was invented on the heels of the 2009 financial collapse as an answer to reckless government spending, bank bailouts, and systemic corruption. It’s my belief if people, especially on the left, are educated on financial matters, they’d be more willing to embrace “private monies” without the fears they apply to them. To date, nothing has been more destructive and unproductive than the monopolization of money by a cartelized governmental system. In essence, currency should never be tied to the State or any organization of violence.

Bitcoin solves all the above problems by being impregnable to hyperinflation, by being peer-to-peer, and by being decentralized enough to prevent monetary censorship.

It’s no wonder the genesis block of the bitcoin blockchain is inscribed with this message:

Chancellor on brink of second bailout for banks.

“Currency side of blockchain is not emancipatory or economically liberating.”

The podcasters not only deny cryptocurrencies are “currency,” but they believe it cannot be emancipatory or economically liberating.

Their “argument” is a falsehood and error; a comedy of errors. It’s not only tragic because the podcasters are wrong, but because they’re ignoring potential economic salvation. They are also misleading others about the liberatory capabilities of crypto.

Let’s look at Africa as a case in point. In Nigeria, the unemployment rate has hovered around 27%, and most people struggle to make ends meet. When bitcoin gained popularity in 2017, a number of people learned how to earn a profit from trading. This foray into the crypto markets helped them escape poverty. Bitcoin directly and intimately impacted them in a financially positive way. It may have even saved them from suffering the pains of abject poverty. For anecdotes and facts about bitcoin in Africa, read this Coindesk article. Similarly, crypto-fueled emancipations have occurred in Venezuela, Sudan, and Colombia.

Some will agree that bitcoin can liberate people in third-world countries, but what about in the U.S.? It is true people are wealthier and have easier access to financial services. However, people in the US have also built themselves a better life as a result of their crypto endeavors. Here is a personal anecdote:

Before bitcoin, I was working as a salaried manager at Walmart — making 38k a year (less with taxes) — and spending hours languishing at work. I was selling my labor to effectively live there. It was grueling. I could have been a poster child for communist resentment. Then I discovered bitcoin and crypto. I learned about emergent tokenized platforms like Steemit.

Steemit provides crypto rewards for publishing content. I was an early adopter, and I posted my thoughts with zeal. I earned Steem tokens galore. I traded what I earned for bitcoin when it was $1200 per coin. This move lessened my debt and pulled me out of workaday 9-5 drudgery. The innovative and novel feature about using Steemit is that I was “working for the community.” I didn’t have a boss or some “evil capitalist” looming over me with a whip. Blockchain and crypto saved me from living a strenuous, check-to-check lifestyle.

The Steem platform still exists, but the platform went through some community drama and ultimately became a Chinese platform. You can still view my posts here.

My story is not unique. A lot of early crypto adopters in the US did not come from a privileged background. They just happened to get into it before everyone else. This is what’s led to one of the largest transfers of wealth that history has ever known, and it is amazing.

Leftists, syndicalists, and communists still tend to be extremely skeptical of crypto. Many of them outright hate it. They see it as another oppressive form of “money,” with the exception of a few blockchain use cases. But as I have demonstrated, people have leveraged cryptocurrency to escape poverty and earn a living. In some cases, they even became wealthy. Crypto has created more economic equality and opportunity than any other technology. Ironically, instead of seeing this as a beautiful tool to fight oppression, leftists erroneously view it as a tool of the oppressors. This boggles my mind, but I believe it is the result of leftists not wanting to work, innovate, or build a path to financial abundance. They’d rather take from others; they’d rather steal bread than bake it. It’s the philosophy of envy, so they can just call all the poor people who pulled themselves out of destitution with crypto the new “rich.” Matter of fact, the podcasters even admitted it when they said all crypto did was “reshuffle power relations.” I find their views intellectually lazy and exhausting.

“Crypto people use utopian rhetoric.”

The podcasters claim a lot of crypto supporters leverage “Utopian rhetoric” when they discuss the benefits of the technology. Their claim is a way to devalue or dismiss the paradigm-shifting implications of the tech. It’s a way to downgrade the utility, benefit, and power of crypto. In reality, people fully engaged in crypto promote it as a way to benefit the world, help equalize the playing field, and eventually stop tyrants from lording over the money supply. This “rhetoric” is not “Utopian.” It’s the language of disruption and decentralization and disintermediation. The term “Utopian” implies the perfection of society or perfect social order. No proponent of crypto believes the technology will perfect society or create a society devoid of anthropocentric pitfalls and problems. Issues will always exist, but the idea is that crypto is provably making society a better place.

“Crypto can’t be overcome. It is firmly embedded in finalization. Most of the use cases solely to advance esoteric forms of commoditization. More ways to launder money. More ways to speculate. Leftists can’t roll it back. Get rid of it altogether?”

There is a lot to unpack, but the podcasters are accurate in the primary point: crypto is here to stay. Pandora’s Box has been emptied; or as Max Borders said, the djinn has escaped the lamp.

The podcasters, however, inject a ton of fear into crypto. They speak about how crypto will be embedded into “esoteric forms of commoditization,” which just means it will be used by the elite to trade or manipulate strange tokens that represent some other asset, I.E wrapped tokens, governance tokens, etc.

These fears are not true, though…unless the nerds in grandma’s basement or the average Joe living in his apartment are the new elites.

What’s actually happening is normal people are learning how to trade crypto, leverage decentralized finance (defi) networks, and play around in various markets. They are participating in an ecosystem that has been traditionally managed and puppeteered by elite financial gatekeepers. Now everyone can play, frolic, and dance in the realm of “high finance” without needing privilege or resources to engage; without needing permission from someone wearing a pompous suit or tacky hairpiece.

So here is the burning question: why would leftists — or anyone else for that matter — want to “liberate” the world from crypto? That would be worse than “rolling back” the internet. Not only is it impossible, but it’s also a puerile notion festering with Luddism.

The podcasters mentioned their concern that crypto is allowing for more money laundering to take place. These are the same kind of arguments people marshaled at the birth of the internet, saying it would only be used by criminals, thieves, pederasts, etc.

Not only are these kinds of arguments wrong, they conveniently forget about other facts. In the case of crypto being used for criminality, naysayers obfuscate the truth that a massive amount of financial crime occurs in the fiat world (substantially more than in crypto). There is a darker side as well. In the fiat system, the elite get to launder money, hyperinflate the currency, type their balance into their bank accounts, and control the credit supply on a whim.

To wit, the detractors only condemn crypto for its criminal uses when it serves their agenda. Luckily, the podcasters don’t have much to worry about. We have facts on how much crypto transactionality is used for criminal or illicit purposes. According to a Chainalysis study in 2019, criminal activity only represented a modicum of crypto transactions. A Forbes article summarised the study:

The majority of cryptocurrency is not used for criminal activity. According to an excerpt from Chainalysis’ 2021 report, in 2019, criminal activity represented 2.1% of all cryptocurrency transaction volume (roughly $21.4 billion worth of transfers). In 2020, the criminal share of all cryptocurrency activity fell to just 0.34% ($10.0 billion in transaction volume).

“Crypto is very concentrated in a small number of accounts. Wealth inequality is the greatest. Gestures toward egalitarianism are either facetious or wrong.”

In any market, especially technology, there will always be early adopters and investors. That means there will be people who get “luckier” as a result of their financial knowledge and future-scoping acumen. Likewise, there will always be laggards and a late majority who get in at the end as a result of their inaction or ignorance. This is called the technology adoption lifecycle, and it’s typically plotted out on a bell curve with early adopters and laggards making up a small percentage of the total population.

The technology lifecycle adoption explains why some people, especially the few, acquired crypto earlier and became wealthier. It’s natural inequality as a result of investor or entrepreneurial skills. In this sense, it’s not “wrong” or “immoral” for a few to have more than the rest. It’s a function of how the market erupted, congealed, and eventually settled. It’s true a few previously wealthy entities and people bought into the market later, but this is also not a detriment to the space, but rather a boon. When people buy into the market, it benefits the ecosystem as a result of “network effects.”

A network effect by definition denotes that a community or network gains in value as more people use it and as more money pours into it. The larger the network effect, the more the users of that network gain and prosper. So having more people and capital enter the ecosystem represents a net positive for crypto. It means even the “poorer” people gain additional value in their holdings.

Besides “inequality” being a natural function of the market, pointing out “inequality” in crypto behaves like a red herring. Even if the few possess more crypto than the rest, it does not diminish the fact that crypto has raised people out of poverty and improved their quality of life, as I previously argued. So why should anyone focus on inequality when crypto has helped so many people? Why worry about inequality when crypto actually equalizes the playing field? In my mind, the argument from inequality is a tired bromide that is largely based on an envy mentality. It has nothing to do with the facts, especially within crypto, where the benefits are tangibly felt by many people“

“Any sense of decentralization is specious.”

The podcasters make the case that wealth is so centralized in the crypto economy that decentralization is largely a chimera.

The problem with their concern is they are using “decentralization” erroneously. Decentralization does not mean the disbursement of wealth or distribution value. Wealth in crypto does not also automatically equate to control over an ecosystem. Control over a blockchain is dependent upon its governance model and technological architecture.

Decentralization means the networks involved in various blockchains are distributed to the extent they can withstand an attack and they don’t have a single point of failure. It means they are not honey pots susceptible to attack by bad actors. A byproduct of decentralization is censorship resistance.

A person can send crypto from their wallet to another person, and they don’t have to worry about those funds being rerouted, stolen, frozen, or otherwise “censored.” A properly decentralized system is therefore also resistant to censorship.

With that said, not all blockchain infrastructures are created equal. Some of them are indeed scams and lack any kind of decentralization. But the beauty of engaging in crypto is that we can opt-in and out of blockchains we wish to use. It’s a voluntary ecosystem, thanks largely to the beautiful innovation of computerized decentralization.

“Crypto operates like an MLM.”

I often hear people make the claim bitcoin is an MLM scheme or functions like an MLM. This argument is a reach at best, and willful ignorance at worst. The podcasters made this claim as well.

An MLM is a multi-level marketing scheme. In an MLM, a pyramid forms in which an enterprise or business gains revenue from a non-salaried workforce selling its goods. When they sell these goods they typically earn a commission. They also earn money by recruiting others into the organization. Sometimes, these MLMs are fraudulent schemes where no legitimate business or organization exists.

Without getting into the details, it is true some “cryptos” have been pyramid schemes as I have admitted previously. However, I also agree they were detrimental to the ecosystem and have tarnished crypto’s reputation.

The problem is many crypto naysayers want to throw the baby out with the bathwater and generalize the whole ecosystem as being an MLM. They even call bitcoin an MLM.

This claim is demonstrably false. Bitcoin is not a “business” or “organization.” It does not require recruiters. It’s just digital money or digital gold (depending on who you ask). It gains its value from network effects — from developers, entrepreneurs, and visionaries working in the community and allocating capital to innovate in and around the ecosystem. Of course, this entrepreneurial activity is not contingent on any kind of recruitment or similar claims made by any person or entity. It’s not a pyramid either, because no business organization exists. The network is decentralized, peer-to-peer (P2P) and network-driven.

The argument simply lacks intellectual rigor and is typically marshaled against bitcoin by people who have not done ample research and come to understand the technology. It’s almost like a last-ditch effort to throw shade at an innovation that is making tremendous headway into the mainstream economy.

What do you think about Sterlin Lujan’s Jacobin Podcast review? Let us know what you think about this subject in the comments section below.

Sberbank Launches First Blockchain ETF in Russia

Sberbank Launches First Blockchain ETF in Russia

Russian banking giant Sberbank has presented the country’s first exchange-traded fund (ETF) giving investors access to the blockchain space. The new instrument holds securities of companies dealing with cryptocurrencies and the technologies that underpin them.

Sberbank Introduces ETF Tracking Blockchain Economy Index

The largest banking and financial services provider in Russia and the post-Soviet space, Sberbank, has announced the launch of a blockchain ETF. The new product, called ‘Sber – Blockchain Economy,’ aims to provide Russian investors with an opportunity to profit from the crypto sector without the need to get involved directly in the development, acquisition, storage, and sale of digital assets.

The ETF tracks the Sber Blockchain Economy Index which includes securities of companies operating with cryptocurrencies and blockchain technologies. “Today, they are used in a variety of industries and solve a variety of problems — from protecting personal data and confirming copyright to creating platforms for the internet of things and online voting,” the bank explained.

Among those covered by the index are producers of crypto mining hardware and software, entities issuing crypto assets, and businesses providing consulting services in the field of blockchain, the state-owned bank added. Well-known names in the space, like crypto exchange Coinbase, blockchain software developer Digindex, and crypto financial services provider Galaxy Digital, are on the list.

Sberbank emphasized that its blockchain economy ETF (ticker: SBBE) is the first of this kind on the Russian stock market. The fund’s currency is U.S. dollars but investors can buy shares with Russian rubles through the Sberinvestor application or with the help of any Russian broker, the bank detailed. The price of shares starts at 10 rubles.

The crypto-related instrument is being introduced after the head of the Central Bank of Russia, Elvira Nabiullina, stated in October that the monetary authority is not prepared to allow the trading of a bitcoin ETF in the Russian Federation. In December, the governor reiterated the regulator’s hardline stance on cryptocurrency investments and a report revealed that the CBR wants to block card payments to crypto exchanges.

“We don’t see a place for cryptocurrency in the Russian financial market,” Nabiullina’s deputy, Vladimir Chistyukhin, was quoted as saying by Russian media. Earlier this year Bank of Russia advised stock exchanges to avoid the listing and trading of instruments tied to crypto assets, changes in crypto indices, as well as the value of crypto derivatives and securities of cryptocurrency funds.

Do you expect to see other offerings such as Sberbank’s blockchain ETF in Russia? Tell us in the comments section below.

Kevin O’Leary Reveals Crypto Strategy, Why He Prefers Ethereum, Says NFTs Will Be Bigger Than Bitcoin

Kevin O'Leary Reveals Crypto Strategy, Why He Prefers Ethereum, Says NFTs Will Be Bigger Than Bitcoin

Shark Tank star Kevin O’Leary, aka Mr. Wonderful, has shared his cryptocurrency investment strategy and which coins he owns. He also discussed crypto market bubbles, diversification, regulation, and why he thinks non-fungible tokens (NFTs) will be bigger than bitcoin.

Kevin O’Leary Discusses His Crypto Investments, Market Bubbles, and NFTs

Shark Tank star Kevin O’Leary discussed cryptocurrency, his investment portfolio, diversification, market bubbles, meme coins, and non-fungible tokens (NFTs) in a recent interview with Forbes, published Friday.

He explained that he views “the entire crypto industry as software development teams,” adding that he is betting on “really strong creative software engineers.” While talking about his cryptocurrency holdings, he revealed:

Ether is my largest position, bigger than bitcoin.

“It’s because so many of the financial services and transactions are occurring on it,” the Shark Tank star described. “Even new software is being developed like Polygon that consolidates transactions and reduces the overall cost in terms of gas fees on Ethereum.”

O’Leary then mentioned some of the cryptocurrencies he owns, stating:

I own hedera, polygon, bitcoin, ethereum, solana, serum — these are bets on software development teams and there are many, many use cases for them.

Moreover, Mr. Wonderful added that he holds “a significant and material position in USDC,” noting that he is “starting to pay for assets and get paid in the stablecoin.”

“At the end of the day, what determines the platform’s success and value is the speed and level of adoption. That occurs when the team has developed a platform that solves an economic problem,” he opined.

O’Leary proceeded to offer his opinion about meme cryptocurrencies. Noting that “long term coins that have no economic value are that because they don’t solve anything or create any value,” he cautioned:

I’m very skeptical of meme coins long term.

The Shark Tank star was also asked whether he thinks bitcoin or other cryptocurrencies are in a bubble. He replied: “The thing to realize is, the market is the market. No one person can manipulate it, even though people claim they can … It’s millions of decisions being made every second in terms of what something is worth. And it applies to every market, whether it’s tulips, watches, bitcoin, real estate or gold.”

Noting that “Over the long run, it’s a fool’s game and you can’t win,” he stressed:

You can’t know when it’s a bubble, you simply can’t. And if you think you do, you’re absolutely wrong.

O’Leary believes in portfolio diversification. The cryptocurrency portion of his portfolio has been growing. He detailed that at some point cryptocurrency “might get to 20% of my operating company — but right now, it’s about 10.5%.” He clarified:

Within that portfolio, there’s no one token coin or chain that’s more than 5% of that portfolio. So yes, I am actively adding and trimming based on volatility.

In addition, he said that he is doing a lot of staking. “Most of my positions are now being staked,” he confirmed, noting that he’s using the crypto exchange FTX for staking. Mr. Wonderful announced in October that he is taking an equity stake in the crypto exchange and will be “paid in crypto to serve as an ambassador and spokesperson for FTX.”

When asked whether there is a chance that the U.S. Securities and Exchange Commission (SEC) could determine some of the cryptocurrencies he owns to be securities and what he will do if that happens, O’Leary promptly replied:

The minute that information gets out, I will want nothing to do with them. If I had a position I would sell it. I have no interest in going into conflict with regulators over my crypto portfolio. I want to be 100% compliant.

He said the same about XRP in November. XRP is the subject of an SEC lawsuit against Ripple Labs and its executives, Brad Garlinghouse and Chris Larsen. “I have zero interest in investing in litigation against the SEC. That is a very bad idea,” he stressed.

O’Leary also discussed non-fungible tokens (NFTs). “They offer so much value around authentication, inventory management, and all kinds of use cases in different asset classes,” he described, adding:

I think non-fungible tokens are going to be bigger than bitcoin.

He proceeded to draw attention to his NFT project. “I prefer NFTs tied to hard assets, physical assets; the one that I’m working on developing a white paper for is the watch industry,” he said. “I made a material investment in Jordan Fried’s company, Immutable Holdings, which owns nft.com, which he’s launching in January, as well as Wonderfi.”

What do you think about Kevin O’Leary’s comments? Let us know in the comments section below.