Bitcoin vs Davos, Reverse Crypto IPOs, McAfee Flees the IRS | Hodler’s Digest

October 7, 2019

This week, global elites met at the World
Economic Forum in Davos where discussion on
crypto featured the usual FUD.
Two high profile guests were absent from Davos,
namely the U.S president and the U.K prime minister:
Donald Trump because of the government
shutdown, and Theresa May because of Brexit.
On the surface, Brexit and funding a border
fence may seem unrelated, but if you look
underneath, they are rooted in growing discontent
with the elites of the world spurring a wave
of populism that has spread to Hungary, Italy
and even Brazil.
While various world leaders and economists
were happy to dismiss crypto and question
its existence, in fact it was the very existence
of the World Economic Forum that became front
and center of the discussion
After a Bloomberg
panel show went viral.
Davos is a family reunion of the people, who
broke the world.
The world we live in, that you cover, has
worked for a narrow slice of people.
Tony Blair and Bill Gates were asked to respond
but were clearly caught off guard.
People think, you know, communism works better
or something, I don’t know.
Pavel Durov, who has attended Davos in the
past, might be launching TON very soon.
Sources close to the Telegram CEO revealed
to Cointelegraph that, following the $1.7
billion ICO last year, the mainnet and token
for its blockchain-based TON platform could
be launched as early as March this year.
In Venezuela, the future of the Petro is in
doubt and the country in turmoil, as the U.S
formally recognized the opposition leader
as president after a semi-coup took place,
whereas Russia and other allies are continuing
to stand by Maduro.
Also this week, McAfee is on the run, a Wyoming
crypto bill, and the Bank of International Settlements
says Bitcoin must depart from
Ladies and gentlemen, I’m Molly Jane, and
this is your weekly Hodler’s Digest.
Although the crypto market was relatively
stable this week, let’s still have a quick
look at its weekly performance.
Ahead of Davos, Adena Friedman, the president
and CEO of Nasdaq, posted online that crypto
“deserves an opportunity to find a sustainable
future in our economy” and called
“the invention itself a tremendous demonstration
of genius and creativity,”
For her, the crypto winter is just another
example of the “classic invention life cycle”
from its inception to a period of hype, the
proliferation of new market entrants, and
then “a dose of reality.”
Once in Davos, the conversation turned much
more negative.
The crypto industry was represented this year,
albeit less so.
There was some talk of Bitcoin going to zero
with the regular platitudes toward blockchain.
Kenneth Rogoff was there with his usual FUD,
in a panel discussion he again called crypto
a bubble and assured everyone there that there
was zero chance of crypto overtaking fiat.
On the bubble aspect, yes, it’s absolutely
I think the possibility of a cryptocurrency
taking over for fiat money, dollar, pounds,
whatever, is basically zero.
But I want to say, I don’t think it’s worthless.
So, there are economists: “zero, it’s absolute
The US has set financial sanctions, heavy
financial sanctions on 12 countries include
Russia, Iran, North Korea, many others.
They don’t necessarily have an incentive to
play ball here with everybody else.
And so we could see a home there.
I think if you take the crypto out of cryptocurrency,
so that you can do anonymous transactions,
there’s just no value added, compared to fiat
Under the current system, yes, if we had Venezuelan
inflation everywhere in the world it would
look very attractive.
He did, however, reveal that he once advised
his then 13-year-old daughter to sell 24 Bitcoins
for a $60 Amazon voucher.
In 2012, my daughter, who was just a little
over, maybe she was 13 at the time, somehow
mined 24 bitcoin and she owned them.
And she said: “Daddy, what should I do?
Somebody has offered me a 60 dollar Amazon
gift card for them.”
And I told her to sell.
I’d like to have told her, I told her to sell
in the end of 2017, but I didn’t.
Jeremy Allaire, one of the founders of Circle,
was also on the panel, hit back at Rogoff’s comments:
The biggest issue we have with financial crime
and with sanctions is with the US dollar.
It’s a 2 trillion dollar criminal market in
US dollars it is by far the preferred choice
of criminals, of sanctioned countries, of
And in fact the central bank of the US prints,
literally, 360 billion physical dollar notes,
half of which are hundred dollar bills, that
are sent overseas.
I wonder who is demanding those, those central
bank dollars.
That crypto is still too small and that the
big guns are focused on the money, that the
Fed is giving out to countries around the
world, and that’s where the real problem is.
People they really struggle with the idea,
that money is going to work the way that the Internet works.
Elsewhere in Davos, Jamie Dimon sat down with
CNBC to express the fact that he takes no joy
in Bitcoin losing 80% of its value, despite
his previously negative comments about the top crypto.
Did you take any satisfaction, when bitcoin
dropped 80 percent or no?
I think bitcoin is better than marijuana,
isn’t it, Jamie?
It is but we are not banking pot either.
Dimon added that he believes that blockchain
is the future for some industries, just not all of them.
And it may be usable for certain things and
not for others.
It does cost more to maintain to process a
transaction, so it’s like for equity trades
it requests 2 cents to process a block trade
and equity trade costs you a penny.
You aren’t going to use it for that.
With populism growing across the world, the
global elites might be worried they’re losing power
So we have a bright future ahead of
us–where Bitcoin survives and Davos dies.
Bithumb, the world’s second-largest crypto
exchange by trading volume, is planning to
go public in the U.S. by means of a reverse
Also known as a reverse initial public offering,
the term indicates that a private company
will acquire a publicly listed company in
order to bypass the often lengthy process
of conducting an IPO.
In this case, Singapore-based Bithumb’s
holding company signed a legally binding document
in which it states the intention to acquire
the already public company Blockchain Industries.
The combination of the two companies will
be known as Blockchain Exchange Alliance and
it will be the first publicly traded crypto
exchange in the U.S.
The move will help Bithumb in expanding its
operations in North America.
The CEO at Blockchain Industries, Patrick
Moynihan, said that the deal will bring “liquidity,
solidity and expansion” to the crypto industry.
Bithumb is not the only company that opted
for a reverse merger as a backdoor to go public.
Also this week, OKC Holding group, the parent
company of crypto exchange OKCoin, bought
a controlling share in a Hong Kong publicly
listed company, becoming potentially eligible
to be listed on the Hong Kong Stock Exchange.
Last year, Mike Novogratz used the same method
to get his crypto-centerded merchant bank
Galaxy Digital listed on a Canadian securities
Bitcoin will have eventually to abandon the
proof-of-work system, says a recent study
published by the Bank of International Settlements,
which deemed the current PoW system intrinsically
Proof-of-work, the protocol used to confirm
transactions on Bitcoin’s blockchain, is
inherently expensive, the study says.
High transactions fees are required as a means
to guarantee the network’s security and, as
the number of minable Bitcoin will increasingly
diminish, transaction fees will not be enough
to sustain mining expenses.
As a consequence, the whole network will eventually
slow down and become unusable.
The authors note:
“Simple calculations suggest that once block
rewards are zero, it could take months before
a Bitcoin payment is final, unless new technologies
are deployed to speed up payment finality.”
Despite the development of second-layer solutions
such as the Lightning Network, which could
help in speeding up transactions, the paper
writes that they don’t represent a viable
solution for the long term.
The only fundamental solution, the paper says,
would be switching to another form of consensus
mechanism, which “will probably require
some form of social coordination and institutionalization.”
The Bank of International Settlements has
been critical of crypto in the past, and a
recommendation for a higher degree of institutional
oversights over digital assets does not come
as a surprise.
John McAfee was running on a pro-crypto platform
and now he’s literally running away.
On Tuesday, he claimed to be fleeing the U.S,
but his actual whereabouts are never confirmed
and he does have a flair for victimhood and
His alleged flight came after he was indicted
by the IRS.
But don’t worry, if you are tired of Trump
or don’t believe in Biden, his presidential
campaign will continue from his boat.
He recorded his current escapades on Twitter
for the world to see, here is the best of it:
Good evening, ladies and gentlemen.
You’re probably wondering how I’m going to
manage my presidential campaign from a boat.
I have with me on this little speaker my campaign
manager Rob Loggia in New York.
So what’s actually happening here, people.
Every so often and very rarely a clash of
old and new cultures.
Brought about by technology changes, civilization.
Cryptocurrencies is one of these technologies
and, probably, the most traumatic to have
occurred in human history since the invention
of fire.
A new crypto-friendly bill was introduced
last week in Wyoming.
If approved, Wyoming will become the first
U.S. state allowing local banks to provide
custodial services for digital assets, in
the same way they do for mainstream securities.
Also, digital assets will be classified as
one of the following: securities, assets or
currency, thus enhancing the clarity of cryptocurrency’s
status in Wyoming.
In an interview with Forbes, Wyoming Senator
and proponent of the bill Tara Nethercott said:
“The time is now to provide the pathway
for blockchain and cryptocurrencies, and Wyoming
has the nimbleness and responsiveness to the
needs of these industries to respond accordingly
to the growing and adapting landscapes of
According to Caitlin Long, co-founder of the
Wyoming Cryptocurrency Coalition, the introduction
of the bill is an important step towards Wyoming
becoming a sandbox for the crypto industry.
We reached out to Caitlin and asked her to
comment on the issue.
What we’re hoping is that the industry migrates
It’s got the by far the best laws and that’s
exactly what the intent is, that folks come here.
So the institutional piece of that is just
a small piece of it.
I think a lot of folks seemingly this week
were really surprised to learn that there
is a very active lending market, for Bitcoin
especially, but all virtual currencies.
And of course that’s not happening on the
So that’s all happening in traditional centralized
There are a number of startups in this field
and every one of them is taking a lot of legal risk.
So what we’re aiming to do is just by clarifying
the legal status of the assets.
It gives them less legal risk and they’re
more likely to come to Wyoming as a result.
Probably the most meaningful impact of all
of that is that virtual currencies get the
same transferability rules as money.
So there were some folks who picked up and
said: “wait a minute, virtual currencies are money”.
Technically no, that’s not the case of the
The States, In the United States cannot determine
what a legal tender is in the United States.
By Constitution we can’t do that in the States.
But what we can do is apply the same transferability
rules as money.
And so that’s a big deal because no other
State has done that.
And what it means is, it improves the negotiability
of Bitcoin and other virtual currencies as assets.
You may be wondering, “what the heck is
Not your keys, not your coins.
Why would anyone ever want to custody their
coins in an institution?
We are trying to get away from institutions”.
And the answer is, of course yes.
As an individual, you should never hold your
Bitcoins or crypto currencies on any exchange
or institution longer than you have to.
The challenge is that institutional investors
by law in most countries, not just the United States,
are not allowed to self custody their
And so until we can actually change those
rules, what’s going to happen is, as institutional
investors come into this industry, they’re
going to have to have custodians.
Therefore, given that custody is going to
form in this industry, how can we do it in
a way that that keeps with the ethos of the
industry and the peer to peer nature of the technology?
That’s what Wyoming’s aiming for.
What do you guys think about Davos, should
it be canceled next year?
Have the global elites really destroyed the
Comment below.
And, as always, remember to like, subscribe
and hodl!

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