Tag: Bitcoin

The truth about crypto crime

On By mehranmuslimiblogIn BitcoinLeave a comment

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At last somebody has had the guts to stand up at an international event, in this case Money 20/20 Europe and make a statement about crypto and crime.

Former U.S. Federal Prosecutor, Mary Beth Buchanan, speaking during a panel discussion at conference held in Amsterdam, suggested, “we need to get rid of the negative connotations” that currently surround the emerging crypto industry. There will be many blockchain evangelists who will be happy to hear somebody from ‘the law’ speaking up about this, because many are tired of hearing voices in the mainstream media constantly repeating stories about the connection between crypto and crime.

Prosecutor says more fiat money is used in crime

Buchanan told the audience that it was a fact that many more crimes have been committed using fiat currencies; a fact that seems to get lost in MSM reporting. The former prosecutor told Cointelegraph: “I served 21 years at the [US] Justice Department and it’s not fair to say there is a greater amount of crime with cryptocurrencies. In fact I would strongly disagree with that… [what’s more], cryptocurrencies can be traced, unlike fiat currencies [cash].”

Tools to track crypto activities

This may seem a somewhat counterintuitive statement, given that anonymity is one of the key features of cryptocurrencies, but Buchanan told Cointelegraph, “there are now many commercially available tools that law enforcement can leverage to trace how currency has moved on a blockchain.” Two of those tools that she is talking about are Elliptic and Chainalysis. Both firms prevent, detect and investigate cryptocurrency money laundering, fraud and compliance violations. As Elliptic says: “We are the people who find truth in data.”

Given that these tools exist, it seems that law enforcement agencies need to catch up with what is available to them and understand the digital environment better as well. Buchanan certainly seems to believe this. She said: “regulators will need to “update” their practices in order to “keep pace,” as the outdated legislation introduced in the early 20th century for traditional securities is proving itself an awkward fit for 21st century innovations.”

As a matter of interest, Buchanan is now General Counsel for Kraken, one of the leading crypto exchanges, and she strongly advocates for digital currencies, describing, “cryptocurrencies as a “wonderful tool” that provides a “cost-effective” means for the transfer of value globally.”

Lay the myth to rest

Perhaps we can start to lay the myth of crypto and crime to rest now. Yes, crypto has been used for criminal activities that are estimated to have a value of about $72 billion globally. But wait, how much fiat money was used in crime? According to a Cointelegraph report, in the same year that BTC valued at $72 billion was used in crime worldwide, $100 billion in fiat was used in the U.S. alone for the purchase of drugs.

Claiming that crypto is bad because it’s primarily used for criminal activities will soon become an outdated myth if the truth is told often enough.

 

The East-West ICO Divide

On By mehranmuslimiblogIn Bitcoin, Blockchain, ICOLeave a comment

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The saying “East is East and West is West” curiously even applies to ICOs. You might have assumed that there was a universal view of ICOs, but it isn’t so: in the West, enthusiastic support for an ICO is primarily based on the ‘ideas’ that the ICO platform brings to the blockchain party, while in the East they are much more concerned about the ICO’s ability to generate a return on investment.

The divide exists in other ways as well. For example, the Asian market took off on its own, informed by the ecosystems around bitcoin and ethereum but also distinct from them. Zhuling Chen, co-founder of Aelf, a cloud computing startup based in Singapore, attributes this to the fact that, “At the very beginning, the information coming from Asia to the US was very limited. We didn’t know what’s really going on.”

 

The differences between the Asian and U.S. ICO markets became more clearly visible during Blockchain Week in NYC. Brady Dale, writing for Coindesk says:

“If one common theme ran through our conversations about Asia, it was this: retail and institutional investors all want returns to realize much more quickly than investors do in the U.S., which may help explain why it has always had a vigorous ecosystem of exchanges.”

Another Asian investor explained it more succinctly: “Asians love to gamble.” Jason Fang told Coindesk:

“They don’t want long lockup periods like so many Western projects expect. Instead, they want to see tokens get released, listed and realize some of the gains that come from retail investors and market makers buying into a new coin.”

Another view, according to Ricky Li of Altonomy, one of Asia’s largest crypto funds, also pointed out that Asians want in and out quickly, and that they have a tendency “not to diversify their portfolios over time.” He also said:

“Chinese companies and their neighbors will raise funds in ether and largely maintain those positions, sometimes failing to lock in gain or riding volatility through their whole portfolio.”

A lack of software documentation in Asian languages has been another divider between East and West. But overall, it seems that the demands of ICO investors are quite different, and ICOs trying to please a global audience will need to take this into account when building their roadmap and strategy.

 

 

 

 

Fundstrat bullish about Bitcoin for 2019

On By mehranmuslimiblogIn Bitcoin, Blockchain, Ethereum, FintechLeave a comment

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Fundstrat Global Advisors, co-founded by Tom Lee, has just published a report claiming that Bitcoin prices will reach $36,000 by the end of 2019. How has it arrived at such a bold prediction? Fundstrat says the answer is mining costs.

Fundstrat’s Quantamental Strategist, Sam Doctor, analysed the relationship between Bitcoin mining costs and price, to come up with the prediction that the price range will fall somewhere between $20,000 and $64,000 next year.

He based his calculations on a Bitcoin Price to Mining Breakeven Cost Metric, known as P/BE, which he claims has “proven a reliable long-term support level.”

A statement from Tom Lee, published on Twitter, said: “We expect the mining economy to grow over the next several years, and project a BTC price of ~$36,000 by year end 2019 based on the historical average 1.8x P/BE multiple.”

The Twitter statement also points out that the rise in electricity costs is slowing and use of power is becoming more efficient as larger rigs with a higher hash power per watt, are now appearing. Plus, mining operations are getting bigger, bringing the benefits of scalability to the scenario.

However, he did point out that there was one risk to the prediction: “a material shift in the trajectory of hash power could change the P/BE support level of BTC price.”

It is interesting that Tom Lee’s personal prediction for BTC was $25,000 by the end of 2018 and both Lee and Fundstrat have been bullish about BTC this year. They also issued a statement in April, saying that 82% of institutional investors believe the price had now bottomed out.

If you own BTC and both Fundstrat and Lee are correct than it will be worth holding on to them for some time to come.

 

 

 

 

 

 

Crypto tribes threaten power of unity

On By mehranmuslimiblogIn Bitcoin, Blockchain, Ethereum, FintechLeave a comment

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The crypto sphere is becoming a little like a football league table. Owners decide to give their allegiance to a particular ‘team’: let’s say Bitcoin is Real Madrid, and that’s your main team, and your friend likes ETH, let’s call it Arsenal. However, is being part of the Bitcoin fan club, and therefore competing with ETH supporters a healthy way to develop the potential of cryptocurrency?

People have a tendency to take a ‘tribal’ approach to pretty much everything, from dietary choices, to coffee brands, to football teams. But, it isn’t very helpful for crypto. Here’s why.

The cypherpunks had a beautiful idea

Privacy, free speech, and the ability to act as an autonomous individual are increasingly under attack, but decentralisation can protect these. Let us not forget that blockchain technology arose out of a community of cypherpunks who wanted more freedoms. Yet, it looks as though the crypto community now is just going to bow its head to the centralised institutions and retreat into the same old narrow-minded worldview.

As Kent Barton describes it in Medium: “The prevailing question has insidiously morphed from “how can we make the world a better place?” to “how can we defeat other blockchain platforms?”

He also argues that tribalism in the crypto sphere, “distracts the community from the crucial work of building scalable technologies that people will want to use.” And he adds, “Personal attacks and outright trolling make the environment uncomfortable or even untenable for newcomers.”

Social media channels have developed an “Us vs Them” discourse and influencers, like rocks stars, with their adoring fans fight it out with other influencers for the Top Dog spot.

Let’s show some respect

Measured and respectful discussion about the merits of various cryptocurrencies have been replaced with increasingly emotions attacks form the ‘opposition.’

Bartons says: “To an outsider, it must seem ludicrous to watch countless smart minds working on blockchain technology — developers, entrepreneurs, and other enthusiasts gifted with an ability to think outside the box and see a vision for a better future — descend into internecine bickering.”

And all the while the team battles are at the forefront of activity, the less time is being devoted to advancing the blockchain, and it is probably fair to say that this boils down to it being all about the money; not about cryptocurrency itself, but making millions and billions of fiat currency out of cryptocurrency. And that takes everyone back to the status quo before the blockchain emerged as tool for a real revolution that could make the world a better place and take power away from those who have had control of it for too long.

Say goodbye to the zero-sum game

Tribalism in crypto, particularly the desire to see one platform emerge as the winner at the expense of another will mean that we continue to be the slaves of power-holders, rather than channelling the power of the blockchain so that the people can reclaim power for themselves – at least some of it.

We will miss this opportunity by only supporting one team – it’s time to be an O.G. crypto fan and support the whole blockchain ecosystem rather than continue this zero-sum game.