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Bitcoin Whitepaper Anniversary | Hodler’s Digest

December 2, 2019


It’s been a whole 10 years since Satoshi
put quill to parchment and composed the Bitcoin whitepaper. However, founder of Bitcoin wallet
startup Xapo Wences Casares thinks Bitcoin is still at the early stages of development.
Casares earned the nickname “Patient Zero” because of his role in boosting cryptocurrencies’
popularity in Silicon Valley. He compares the leading crypto to the internet in 1992
and says it will take several years before we can assess whether its successful or not.
Well, for now, the crypto market is stable, while the stock market is actually volatile. However, there are major problems surrounding
crypto itself, in the U.S, a man faces 5 years imprisonment for trading over the legal amount
on Localbitcoins.com and Charlie Shrem, aka Bitcoin’s “First Felon,” is suspected
of stealing thousands of Bitcoin from internet entrepreneurs Winklevoss twins. Meanwhile
in Russia, the government think “blockchain” sounds too much like a reference to prison,
but that probably says more about them than blockchain. Also this week, a potential exit scam on a
Canadian exchange, the E-Krona may hit Sweden, Initiative Q, and Coinbase raises the big
bucks despite no IPO in sight. Ladies and gentlemen, here is your weekly
Hodler’s digest! Last Sunday, something very strange happened
in the land of the moose and the Biebs. Canadian Crypto exchange MapleChange suddenly announced
that $6 million worth of Bitcoin had been stolen, clients wouldn’t be refunded, and
they were shutting down their social media. Basically, they made like a Maple tree and
leave-d. The crypto-mounties, however, were suspicious, for them it had all the classic
signs of an exit scam. CEO of Binance, CZ among them, set about dissuading
crypto holders from trusting exchanges that don’t offer cold wallets. Prominent analyst and Cointelegraph contributor
Joseph Young also said: “There is no incentive for using small exchanges. Use established
exchanges that are regulated, & transparent. Small exchanges also focus on maximizing profitability,
not security or investor protection”. A few hours later, Maple, like their compatriot
Celine Dion, decided both their heart and their Twitter activity would go on, hitting
back at the scam allegations: “We have not disappeared guys. We simply
turned off our accounts temporarily to think this solution through. We cannot refund everyone
all their funds, but we will be opening wallets to whatever we have left so people can (hopefully)
withdraw their funds”. The fund launched a Discord server for customers
to issue refund requests and return some of the stolen crypto assets. However, the company
declared that Bitcoin and Litecoin funds, which made up the majority of the stolen amount,
cannot be refunded. In the meantime, independent researchers uncovered
and published the identities of those behind MapleChange in the attempt to hold them accountable. Joseph Young even got onboard publishing the home addresses of these people which caused them temporarily to be blocked from Twitter. He has since apologised. Sweden could be the first country to adopt
a national centralized digital currency. Riksbank, the Swedish Central Bank, is planning
to launch the E-Krona in 2019 in response to a country where the majority of transactions
are conducted via private banks that increasingly refuse to handle cash. So a battle is being
waged between the private banks and the central banks– but who wins, society or corporate
interests? 85% of Swedish people from ages 16-74 bank
online, compared to 51% of their E.U counterparts. A recent report by the central bank revealed
that only 13% of Swedes paid cash for their most recent purchases, compared to 39% in
2010. The Stockholm based SEB bank has 118 branches, only 7 of which actually handle
cash. Most private banks actually refuse to handle any cash at all. The E-Krona is touted as the answer to concerns
that private banks don’t offer secure payment systems. The centralized currency can be held
on a card or even on a mobile app. Following concerns that Sweden was moving
too fast, Riksbank actually conducted a consultation about a cashless society, with their conclusion
as the following: ‘It is our opinion that all banks and other
credit institutions that offer payment accounts shall be obliged to handle cash” Sweden might be the first, but it certainly
won’t be the last to adopt a centralized digital currency. And before these changes
become permanent, serious questions need to be addressed.
For example, all transactions will be traceable, that means the government can keep a close
eye on everything you do and could potentially block payments and freeze accounts of anyone
they choose. That means ordinary citizens have to rely on the good nature of those in
power, not to take draconian measures against them. If that sounds unrealistically dystopian,
take a look at China’s proposed social credit system, whose punitive actions include flight
bans and throttled internet speeds. Of course, Sweden is literally and figuratively
miles away from China, but the threat to personal freedoms is still there. As we move towards a cashless society, we
have to ask ourselves if this is what we want, or are big banks and government simply using
a technique behavioural economists call nudging where they make the alternative, cash for
example, so difficult to use it becomes obsolete. It might be the case that Bitcoin and other
cryptos are not entirely private nor entirely decentralized, but they are a hell of a lot
more so than the E-Krona and any other government and central bank backed digital currency that
we will see in the future. We spoke to Ivan on Tech, developer and popular
blockchain educator on Youtube We have a few private banks controlling the
entire economy.You cannot even buy food nowadays without having a credit card or be a bank
customer, so the central bank doesn’t want that. They want to have digital cash. You
don’t have to be a bank customer in order to do digital transactions. I do understand
the development. I do understand why they’re doing that but at the same time you realize
that if the state controls digital cash and they can exclude you from digital cash whenever
they want. What if you go to the wrong protest? What if you go to the wrong political party.
Who knows what government will have in the future. So in my view it might put too
much power in the hands of the government because if you’re not able to use the financial
system because the government doesn’t like you. You cannot buy food you cannot buy gas,
you cannot do any transactions at all. We might be in a dystopian place. People still have a very high trust in the
government and in the financial system, so that is why I think many Swedes do not ask
the critical questions. They don’t ask if maybe the government has too much power now;
and so this is something that the Swedish society is vulnerable against, every powerful
government, because we are not critical enough. You go to the US, Many people are very critical
of the central government. Swedish society is very digital like high
technology, we like new technology. A lot of tech companies are from Sweden so people
are very positive towards new developments and they adopt new technology quickly. And
so in that regard, I understand the argument that it might be the fact that the government
is pushing, and you know for them it is of course better if everyone uses digital cash
as well because you can track everything; there is easier control, you control the entire
system, but at the same time I wouldn’t say that the market is completely out of the picture.
The market is a very very strong force and people do not like physical cash. Sounds like a cult, could be a pyramid scheme,
one thing is for sure, Initiative Q is definitely not a crypto– but that hasn’t stopped people
from calling it the new Bitcoin. It was founded by entrepreneur Saar Wilf–whose
payment security company was acquired by PayPal in 2008–and economist Lawrence White. The
proposed payment network will use the currency Q, currently worthless, but early adopters
are being offered free Q’s in exchange for their email. The website currently boasts
over 2 million sign-ups, or suckers. who knows really?
Q is a private currency that uses a centralized database rather than blockchain to operate.
However Wilf promises should the project fail, no data will be sold but instead destroyed,
he promises, honestly. Currently, the only way to acquire Qs is via
an invite email–each person signed up can sign up 5 more people. Which has led to accusations
of a pyramid scheme, accusations that the founder Saar Wilf was quick to deny. It might technically, or more importantly
legally, not be a pyramid scheme, but it does certainly smell like one. For example, in
the invitation email it initially said early adopters could eventually stand to make $130k,
the reward figure eventually dropped to $85k. The economist behind it, Lawrence White, is
legit and a pretty serious guy who wants to see free banking and do away with the federal
reserve. So perhaps it’s not a get rich quick or a pyramid scheme, but it certainly
seems crazy. The main thing that is confusing here is that
when people see something that looks like an offer of free money, then that is like
the biggest red flag you can you can have. Unfortunately there is no other way for us
to explain this. We want to change the payment system and the monetary system that requires
that. That’s what I currently believe the only way to do that, is by issuing a new kind
of money. And the only way to get the world to adopt it, is by distributing it freely
to anyone who helps adoption of this system. So that’s the only way this can work. It does.
I know it sounds to people like very suspicious, free money, but there’s just no other way
this can work. A new study published in the journal Nature
Climate Change predicts that Bitcoin usage will raise global temperatures above 2 degrees
Celsius by 2033. It must be noted that in fact, the transport
and agriculture industry are the leaders when it comes to the production of harmful emissions
like CO2, and the report has been met with some criticism; for example, that the bitcoin
energy crisis has been hyperinflated, as it is based on the assumption that carbon emission
derives from mining activity and will remain the same for the next hundred years. In the IT world, things can change overnight.
So that’s why I’m very wary of these extrapolations. Beyond a year or two at any time, people trying
to extrapolate even 10 years with I.T., I think are almost always going to be wrong.
It’s irresponsible and reckless. Everyone agrees we should track new end uses
and we should try to understand their emissions intensity. But let’s get the numbers right.
Let’s not overestimate. Bearish trends in the market haven’t scared
away investors of late; in fact, quite the opposite– Dapper labs, the company behind
Cryptokitties, raised $15 million in a new round of funding this week. Elsewhere, Coinbase announced a $300 million
funding round on Tuesday. The company, valued at 1.6 billion dollar in summer 2017, is now
worth $8 billion. Coinbase will use the additional funds to “accelerate the adoption of cryptocurrencies
and digital assets”. Commenting on Coinbase’s expansion, Asiff
Hirji stated: “We see Coinbase’s growth as validation that the ecosystem will only
continue to grow in size, influence and impact — ultimately ushering in a more open financial system for
the world.” Coinbase plans to build infrastructure between
fiat and crypto in regulated markets around the world, as well as to offer more cryptocurrencies
on its platform. The company also said it wanted to bring more institutional funds into
the market. Despite rumors Coinbase was “going public”,
Hirij said that an IPO won’t happen anytime soon. The expansion of Coinbase seems to reflect
a broader phenomenon, affecting the whole crypto exchange sector.
On October 29th, Bitstamp was acquired by NXMH, a Belgium-based investment company and
majority stakeholder of South Korean crypto exchange Korbit.
Earlier in October, South Korea’s largest crypto exchange, Bithhumb, became part of
BK Global a Singaporean consortium. Many see Coinbase’s expansion as a sign
that the crypto market is finally stabilizing: speculative trading is declining and there
is a growing interest in crypto from traditional finance. For many, Coinbase is becoming the
main point of entry for traditional finance in the crypto market.
We asked Lauren Cohen, professor of Business Administration at Harvard Business School,
to evaluate this new trend. What you’ll see is that traditional finance
companies and large storied merged companies even in the U.S. are starting to get into
this. Now in the US is still trickier given regulatory uncertainty. But the big players,
such as Fidelity, are making fairly large moves into this space. And so I do think it’s
only a matter of time until nearly every financial institution has some foot in this race. Now,
what foot they’re going to take is unclear. Whether they’re going to do partnerships,
whether they are gonna try to develop their own systems or whether they’re going to acquire
existing firms. I think there’s still volatility left. Telling
you that it’s going to be a straight line upward, I would be a fool. And so I certainly
don’t think that that’s what’s going to happen but I think the trend is going to be upward.
The trend is going to be upward in terms of adoption and the trend is going to be upward
in terms of solutions that are developed to enhance widespread adoption. Both widespread
adoption on the institutional and retail level. This week saw dedications and celebrations
for the anniversary of the Bitcoin whitepaper, it described a protocol but symbolized a disruptive
technology that would change the world. Here are some of the highlights: Of course, not everyone was so complimentary,
on the eve of the anniversary Mr. Jamie Dimon himself was quoted as saying: ‘I don’t
give a shit about Bitcoin’ Post your whitepaper dedication in the comments
below And as always like, subscribe, and hodl

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