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Sun, 04 Dec 2022 07:09:26 +0000

The Metaverse is not yet for everyone – that’s probably the most important lesson learned the hard way by the European Union after a party it threw that cost more than an arm and a leg ended up as a one major snoozefest. 

The gala was supposed to be “fun with music” and intended to spark the interest of young people on the digital and augmented reality realm.

On Tuesday, the foreign aid department went through with its “virtual party” that was burdened with the mission to invite the youth to explore the so called limitless potential of the metaverse.

Despite spending €387,000 (around $400,000), the department ended up having a humiliating experience as there were only six individuals who turned up at the metaverse party. 

Among them was Vince Chadwick, a Devex correspondent who minced no words in saying the activity was an “immediate flop.”

Sharing his experience, Chadwick said he encountered a total of five other participants whom he had puzzled  (more like Duh?) exchanges with.

The EU Metaverse party. Image: The Times

The correspondent also shared a short clip on Twitter showing some oddly shaped avatars dancing on a stage next to a tropical beach.

“The concert is just the same DJ spinning the same music,” said one of the messages on the screen while another was asking if there was “anybody out there.”

A Setback For An Ambitious EU Metaverse Plan

The lifeless virtual gala that leveraged the power of the Metaverse turned out to be a vital component of the Global Gateway Initiative of the European Commission aiming to devote funds of up to €300 billion to put up various infrastructures in developing countries by the year 2027.

With an official trailer that was dropped on social media as early as mid-October, the activity was supposed to be an exciting and out-of-the-ordinary means for the youngsters to explore the initiative.

The commission said they hoped that a series of hero stories in a virtual environment and drones carrying words such as “education” and “public health” as well as an open book art installation on a liquid floor and participants having the ability to walk on water would help their cause.

A spokesperson for the project disclosed that the project was targeting young individuals who spend much of their time on other social media platforms such as TikTok and Instagram as they want to increase their knowledge about what EU does on the global stage.

Seriously? There is a massive drought in East Africa, UNHCR doesn’t have enough funds for food for refugees in camps, etc etc and THIS is what you choose to spend money on?

— Birgit Habermann (@BirgitHabermann) October 26, 2022

Gala Already Doomed Even Before It Started

It turns out some internal staff of the department didn’t have confidence that the metaverse shindig would be a rousing success despite the amount of money spent to make it happen.

Accordingly, there were some insiders that went as far as to describe the metaverse party as “digital garbage” and “depressing and embarrassing.”

Moreover, when its trailer was released, some Twitter users bashed the idea and questioned the choice of the EU where to spend its money when there is massive drought in East Africa and the UNHCR having funding problems for camp refugee foods, among many more others.

Crypto total market cap at $808 billion on the weekend chart | Featured image from IndiaMart, Chart: TradingView.com
Category: virtual party
Sun, 04 Dec 2022 11:36:55 +0000

Bitcoin miners seem to be giving up on the prospect of holding the maiden crypto for long-term profit as they continue to sell large sums of the digital coin.

According to data shared by CryptoQuant, as of December 1, bitcoin miners have already dumped 10,000 units of BTC.

The number is significantly lower compared to what was observed on November 26 when the market witnessed an inflow of 2,569 units of the cryptocurrency that were also sold by its miners.

CryptoQuant analyst Joaowedson shared some insights regarding the matter and made mention of the current cost of Bitcoin mining and the slumping price of the crypto asset as reasons for this development.

“Faced with the current price of Bitcoin and the high cost of mining in several countries, miners are being forced to sell their positions,“ Joaowedson said.

Bitcoin Miners Already Deprived Of Profit Opportunity

The current situation spells doom for both the “producers” of the largest cryptocurrency in terms of market capitalization and the asset itself.

With the significantly lowered price of BTC and the cost it takes to produce one unit of it, Bitcoin miners face the possibility of not gaining any profit at all in their operations.

 

Bitcoin

Image: Twitter

Moreover, as they continue to dump the fruits of their labor in the market, there is always the possibility that the crypto’s price will decline and that its volatility will increase furthermore.

Mining revenue has also been affected by the past selloffs that the market has witnessed. According to data from Glassnode, at the time of this writing, the income of Bitcoin miners stood at 814.28 BTC.

With this, it only made sense to arrive at the notion that in terms of fees and rewards, Bitcoin had nothing much to offer for its miners.

A Quick Look At Bitcoin’s Performance

At press time, according to tracking from Coingecko, Bitcoin was changing hands at $17,025, with an increase of 3.5% in value during the last seven days.

For the past few days, the asset is consolidating at a narrow range and is not showing any signs of displaying the same kind of momentum it had towards the end of October when it surged to reclaim the $21K territory.

This time last year, BTC was trading with a value that is higher by more than 68% than its current price. It can be recalled that back in November 10, 2021, the king of all cryptocurrencies attained its all-time high of $69,044.

Today, it has lost 75.3% of that value and is projected to finish the year below the crucial $20k zone.

BTC total market cap at $326 billion on the weekend chart | Featured image - The Loadout, Chart: TradingView.com
Category: mining
Sat, 03 Dec 2022 00:00:40 +0000

The Bitcoin “delta price,” which has acted as the bottom during previous cycles, may once again hold the answers for a cyclical low this time as well.

Bitcoin Delta Price Currently Has A Value Of Around $12.8k

As pointed out by an analyst in a CryptoQuant post, BTC might still fall more in value before a bottom turning point is reached.

Before looking at the concept of the “delta cap” (which the delta price comes from), two other popular capitalization methods of Bitcoin need to be understood first. These are the “realized cap” and the “average cap.”

The first of these, the realized cap, calculates the cap of BTC by taking each circulating coin’s value as the price at which it was last moved, and then taking the sum of these values for the entire supply.

This is different from the normal market cap, which simply takes each coin’s value as equal to the current Bitcoin price.

The average cap, as its name already hints, is the mean of the market cap. Its value is calculated by simply dividing the current daily market cap with the total number of days BTC has been in circulation for.

Now, taking the difference between the realized and the average caps gives us what’s known as the “delta cap.”

The delta cap is a model that’s popularly used for spotting cyclical bottoms in the price of the crypto. Here is a chart that shows how this cap acted as the bottom in the 2018/19 bear market:

Bitcoin Delta Price

Looks like the normal market cap is near to this cap right now | Source: CryptoQuant

As you can see in the above graph, the Bitcoin delta cap acted as support for the market cap during the 2018/19 bear market.

A similar trend was also seen back during the 2014/15 bear. At present, the market cap is once again approaching this cap, but it’s not quite there yet.

To put things into better perspective, the “delta price” is used, which is obtained by dividing the delta cap with the total number of coins in circulation (just as the normal price can be derived from the market cap by doing the same).

Currently, the delta price has a value of around $12.8k, which means Bitcoin is still at some distance away from this mark.

If the bottom also forms at the delta price just like in the previous two cycles, then BTC will have to see more drawdown before the same condition is met.

BTC Price

At the time of writing, Bitcoin’s price floats around $16.9k, up 2% in the last week.

Bitcoin Price Chart

BTC holds strong around $16.9k | Source: BTCUSD on TradingView Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com
Category: btcusd
Fri, 02 Dec 2022 18:42:24 +0000

Crypto lender Celsius Network is undergoing the auction of its assets as part of the bankruptcy proceedings. The company was affected by the collapse of the Terra (LUNA) ecosystem and hedge fund Three Arrows Capital (3AC). 

While Celsius was forced to halt operations, other companies in the industry benefited and found value in the once-prominent lending and custody environment. In that sense, investment firm Galaxy Digital participated in the auction and acquired one of the crypto lender company’s valuable assets, GK8.

Today, @GalaxyHQ, a financial services and investment management innovator in the digital asset, cryptocurrency, and blockchain technology sectors, confirmed their intention to acquire substantially all of the assets, liabilities, and contracts of GK8.

— Celsius (@CelsiusNetwork) December 2, 2022 

Galaxy Growths In The Bear Market, Celsius Sells Custody Platform

According to a press release shared with Bitcoinist, Galaxy Digital announced their “intention” to acquire the institutional-grade self-custody platform GK8. A court must approve the purchase before completion as part of the Chapter 11 bankruptcy proceedings. 

The release claims that GK8 allows its customers to store their cryptocurrencies with “patented technology” and the “highest possible security.” Users can send transactions without connecting their hardware to the internet to benefit from an extra layer of security. 

Galaxy Digital will acquire the company and support its activities while the custody solution is integrated with GalaxyOne. The latter is a new initiative allowing institutions to trade, lend, and access margin-based crypto products. 

Galaxy Digital will implement a wide range of custodial options for the new platform. Talking about the acquisition, Mike Novogratz, Founder and CEO of Galaxy Digital said: 

The acquisition of GK8 is a crucial cornerstone in our effort to create a truly full-service financial platform for digital assets, ensuring our clients will have the option to store their digital assets at or separate from Galaxy without compromising versatility and functionality. Adding GK8 to our prime offering at this pivotal moment for our industry also highlights our continued willingness to take advantage of strategic opportunities to grow Galaxy in a sustainable manner.

Bitcoin BTC BTCUSDTBTC’s price moving sideways on the 4-hour chart. Source: BTCUSDT Tradingview Galaxy Improves Its Custodial Solutions, Looks Into The Future

In addition to its products, Galaxy will bring in over 40 people from the custody company and an office in Tel Aviv. The founders of GK8, Lior Lamesh, and Shahar Shamai, will stay at the company’s helm. The founders added:

We are excited by the prospect of joining one of the leading providers of financial and digital asset services to institutions who truly understand the impact of GK8’s custody technology on the future of blockchain. With the backing of Galaxy (…).

In the wake of the collapse of significant crypto companies, the narrative around self-custody is growing stronger. Many prominent figures in the crypto space are asking investors to learn how to remove their assets from exchanges and to practice a form of custody. 

Data from Glassnode indicates that the Bitcoin balance on exchange platforms returned to its 2019 levels. As a result, millions of dollars in digital assets left centralized exchanges over the past month. This downside trend represents a lack of confidence from users in centralized trading venues.

Celsius Galaxy Bitcoin BTC BTCUSDTBitcoin balance on exchange is dropping, but without positively impacting BTC’s price. Thus hinting at a lack of confidence from BTC investors on exchanges. Source: Glassnode

In this environment, self-custody platforms such as GK8 might provide value for Galaxy Digital. In particular, if the lack of confidence in centralized trading venues increases in the long run. 

Category: CELUSDT
Sun, 04 Dec 2022 06:04:18 +0000

The crypto market’s overall performance has not been impressive, including memecoins like SHIB. The prices of almost all crypto assets declined over the past few weeks. But then, the story changed just when it seemed like the market was to witness high volatility.

With the strong influence of the bears, the value of digital assets took to the south. In addition, the recent collapse of one of the world’s prominent crypto exchanges, FTX, spiked an unfavorable shift in the space.

Following the trend in the market, the leading memecoins have shown strength in their movement. Though the entire market suffered, memecoins fared more positively than most crypto tokens.

Over the last week, Dogecoin (DOGE) rose by almost 14%. On its part, Shiba Inu (SHIB) has given a tremendous upward movement. This new strength in SHIB is raising eyes if the token could make more positive progress in the coming weeks.

Will SHIB Record A Price Jump Soon?

Despite the prevailing bearish market trend and other negative factors, SHIB displayed an impressive record. Several top whales have had massive SHIB holdings through the thin period.

As per data from Whalestats, Shiba Inu recorded up to 500 Ethereum whales that hold more than $76 billion worth of SHIB. Furthermore, it reported that the past two weeks had not significantly changed the SHIB holdings of the top 100 whales on the Ethereum chain.

Shiba Inu gathered more value as Elon Musk took over Twitter. This created a spike in the value of SHIB, causing the coin to hit a new ATH in October 2022. After Musk’s acquisition, Shiba Inu was competing favorably against Dogecoin. As a result, arguments erupted online over which memecoin between SHIB and DOGE will hit $1 first.

Even though the collapse of the FTX crypto exchange drained what the memecoin accrued during the period, there’s still hope for it.

SHIB, One Of The Safest Crypto Coins?

The crypto space has been facing growing fear and doubts with the collapse of FTX and the twists of events that followed it. As a result, investors now desire safe investment options in the crypto market to secure their funds.

A report from Santiment Insights highlighted Shiba Inu as one of the safest coins for investment in the current crypto market.

On-chain, data revealed the transfer of about 1.8 trillion SHIB coins in several exchanges early this week. Also, there were similar transfers of Shiba Inu from giant whales following the collapse of the FTX crypto exchange.

SHIB Price Trends Sideways, Will It Surge Anytime Soon?Shiba Inu price grows with over 1% gains l SHIBUSDT on Tradingview.com

According to Santiment, Shiba and Uniswap are historically within the assets group with the lowest purchasing risk. However, they are at the bottom among the top 10 tokens based on Market Cap versus Realised Cap (MVRV) calculations.

Featured image from Pixabay, chart from TradingView.com
Category: SHIBUSDT
Sun, 04 Dec 2022 08:49:14 +0000

XRP, the 7th largest cryptocurrency with more than $19.74 billion market capitalization, appears to be poised for a healthy surge.

Unfortunately for traders, investors or prospective buyers of the crypto asset, this upward movement will be temporary and the bears are expected to take control shortly after the altcoin registers an uptick in its price.

XRP has already lost almost 14% of its value over the last 30 days The altcoin could jump all the way to the $0.44 level Whales have already moved over 150 million XRP tokens

At the time of this writing, according to tracking from Coingecko, the digital coin is changing hands at $0.3932, down by only 1.4% during the last seven days.

On its month-to-date (MTD) performance, XRP registered a decline of 13.6%. However, the pattern currently being followed by its price action is indicating a minor upward movement.

Technical Indicators Slightly Favor XRP

Over the past few days, the cryptocurrency has already tested its resistance trendline on two different occasions while it revisited its support trendline multiple times.

Source: TradingView

In doing so, XRP’s price action has made it caught in an inverted flag pattern which is a bearish model but offers a chance for a minor bullish breakout.

Currently, the $0.39 zone is a crucial support level for the altcoin as failure to hold it would mean a continuation of the ongoing downward trend for the crypto.

However, in the event that XRP manages to hold that particular line, there’s a good chance that the inverted flag pattern will provide a window of opportunity for the asset to surge all the way up to $0.443 to tally an impressive 12.5% jump.

The decline in trading volume of the cryptocurrency will eventually cool it down and pull it back to a bearish state all the way to $0.36.

Whales On The Move

Just a few days ago, Bithomp, an XRP-focused whale tracker shared some information about an unusual transfer of large sum of the XRP token.

According to the data, around 143 million units of the altcoin worth more than $56.5 million was moved by a crypto whale from Binance to Bittrex, a major U.S. exchange company.

Large investors have been active recently, getting involved in movement of millions worth of XRP from an anonymous wallet to another for purposes of selling or facilitating withdrawal through a cold wallet.

As of posting time, it is believed by the tracker that over 150 million of the altcoin has already been moved by whales.

XRP responded with this development with a minor price increase although its gains remain temporary as it cannot sustain its upward trajectory.

XRP total market cap at $19.5 billion on the weekend chart | Featured image from CryptoCoin Spy, Chart: TradingView.com
Category: xrp
Sat, 03 Dec 2022 05:09:30 +0000

This week saw a positive recovery in some crypto assets, Ethereum included. It is gaining momentum and preparing for a bullish rally in the days to come. Although Ethereum is still below $1,300, some factors suggest a possible increase to $1,350 and $1,550.

The crypto market has been filled with FUD (fear, uncertainty, and doubt) in the past weeks following the FTX crisis. Crypto investors are left speculating whether to buy or sell holdings as assets plunged deeper. For example, reports show that Ethereum lost nearly 39% in a couple of weeks.

The crypto market has been anticipating news of the U.S. Federal Reserve dropping its bullish stance on interest rate hikes from December. As signals point towards this expectation becoming a reality, some assets started showing signs of recovery. However, despite the bullish trend, Bitcoin remains down due to miners’ capitulation, while Ethereum is rising.

Factors Indicating Massive Ethereum Price Surge

Coinglass’ crypto derivatives data shows that Ether futures open interest on Binance has reached an all-time high of 2.01 million. It amounts to a 9% increase in Open Interest in the last 24 hours, indicating a high probability that Ethereum will increase in the coming weeks.

On-chain data from Glassnode also revealed that the total value of the Ethereum 2.0 deposit contract hit an all-time high of 15,492,407 ETH. Ethereum validators’ revenue has also reached a 1-month high of 11.310%.

EthereumImage Source: CoinGlass.com

These records have got players and analysts reacting. For example, Michael van de Poppe believes ETH is exhibiting strength as it rose from the $1,150 level to the current price. The analyst predicts that a break above the $1,225 level would trigger a rally toward $1,350 and maybe $1,550.

Traders look forward to holding their Ether if it remains above the support level of $1,200. Analysts also believe the ETH price increase will rub off on other altcoins.

ETH Price Journey

Many traders were bullish about Ethereum’s price increase after the completion of the merger. However, Ethereum neither surpassed nor bounced back to the $1,700 level after the merge. With the macroeconomic situation, the asset continued falling and went below the $1,500 physiological.

Whale accumulations saw ETH price drop from $1,661 to $1081 in one month. Whales saw the price declines as an opportunity to accumulate ETH holdings. Whale accumulations are often indicators of an asset’s bullish recovery. However, it didn’t seem so initially for Ethereum, whose price dipped to $1,081.

Now the tables are turning, and Ethereum seems to gain bullish momentum, rising towards $1,350. Ethereum is trading at $1,283 with a 24-hour trading volume of $6,205,108,773.

Ethereum Price To Reclaim $1,300 Throne, What Are The Possibilities?Ethereum price ready for another bull run l ETHUSDT on Tradingview.com

With the ETH price above the critical support level of $1,225, there may be hope for more increase. The price surged nearly 2% in 24 hours and 8% in the past week.

Featured image from Pexels, chart from CoinGlass and TradingView.com
Category: glassnode
Tue, 29 Nov 2022 18:00:00 GMT
Visiting El Salvador, It’s Clear That Bukele’s Bitcoin Country Is Neither Utopian, Nor Totalitarian

After a week in El Salvador, it’s clear that state-run Bitcoin adoption is a slow but critical foundation for revitalizing the country.

This is an opinion editorial by Shinobi, a self-taught educator in the Bitcoin space and tech-oriented Bitcoin podcast host.

I recently spent a week in El Salvador to attend Adopting Bitcoin and decided it might be worthwhile to summarize my perception of things having actually had the chance to visit the country myself.

Since the announcement of the Bitcoin legal tender law in 2021, the topic of El Salvador has been a deeply divisive one in this space. On one hand, you have people blindly cheering on President Nayib Bukele and treating all criticism as FUD and misinformation generated simply to attack Bitcoin and the use of it. On the other hand, you have people blindly decrying him as a dictator and violator of human rights and treating anything positive he is accomplishing for his country as irrelevant in the face of his disregard for law.

Obviously, I am not a Salvadoran. I have never lived in the country and the short amount of time I have now spent there is by no means enough to truly acquire a deep insight into what life is like in El Salvador, or to really appreciate the nature of the problems people face there. Nevertheless, seeing things for that short time in person has given me a very different perspective than the one I had purely informed by reading things over the internet.

Adoption Has Been Slow, But The Seed Is Planted

I was very skeptical of the Bitcoin law when it was first proposed. My first article for Bitcoin Magazine was actually about my worries over ways the law could cause negative consequences and effectively implode on itself if adoption of Bitcoin took off too fast early on. I saw the promise of conversion to USD by the government of El Salvador as something that could fail catastrophically if Bitcoin became a major vehicle for remittance payments, effectively bankrupting the trust established for conversion on the dollar side. Thankfully, that did not happen.

Adoption seems to be a very slow-moving wave in the country, and according to many people I talked to when I was there, many businesses that used to accept bitcoin have actually stopped accepting it over the last year or so. Chivo is still dealing with problems, to the point that even today there are still issues with the ATMs during attempts to sell, and horrible UX flows make paying at the few businesses that accept BTC an annoying experience. It is by no means "Bitcoin country," as people constantly call it, in the sense of being able to use Bitcoin everywhere. But the opportunities to use it in El Salvador do far exceed those of any other physical locality I have ever traveled to myself. The plant hasn't quite sprouted yet, but the seed is clearly in the ground.

Bukele Is Going Beyond Bitcoin

Beyond the debates over Bitcoin use and adoption though, Bukele has done quite a lot in the last year. I feel like people in this space pontificating on the internet lose sight of this in arguing over the adoption of Bitcoin in El Salvador, but what is being done in the country goes beyond just Bitcoin. Bitcoin is a part of the plan, yes, but this is a nation of more than six million people for whom President Bukele is responsible. His concern isn't, and should not be, purely to benefit Bitcoin with his actions in office. He has the citizens of El Salvador and their wellbeing to concern himself with. That is his primary concern.

When I was in El Salvador for Adopting Bitcoin, I met someone who has been living in the country for the last 10 years who only recently got into Bitcoin because of the Bitcoin Law passed by Bukele a year ago. He had almost a decade of experience living in El Salvador as it was before Bukele, and the reality of it as he described was much more brutal than any statistics could paint: street merchants being murdered over not being able to afford 16 cents of protection money, widespread racketeering and robbery, corruption all across the government. Gang members would commit a murder, get arrested, and be out on the street within a few months due to how easy it was to bribe officials. He would regularly go to sleep listening to gunshots from rival gangs fighting over territory the block over from his house. It was completely unbridled anarchy.

I cannot even truly imagine living in such an environment, and I have lived my entire life in one of the most dangerous cities in the United States. All of that changed this year with President Bukele's declaration of martial law and an all-out war on the gangs of the country. Almost 60,000 gang members have been arrested during the course of the year, and the results have been pronounced.

The murder rate has plummeted, people are going out at night where before most people would not consider that a risk worth taking and tourism is growing. I am no stranger to living places where you have to keep your head on a swivel and pay attention to your surroundings, but not even for an instant in my week there did I feel like there was even a slight chance of something bad happening. As an outsider, it felt perfectly safe to me, and the man I met who has lived there for a decade described the El Salvador of today as an entirely different country compared to the one he moved to 10 years ago.

Have there been cases of false arrests? Yes. Is there an existential issue in sweeping aside due process to deal with the problem of violence in the country? Yes. But what would be the alternative solution anyone else would offer?

It was a common occurrence for people to be murdered over sums of money so small that here in the United States, many would just tell a cashier to keep it because they don't want to carry that small amount of change in their pockets. Yes, due process is a core tenant of a stable society, but isn't the ability to live without worry over being murdered for pocket change more important? I think it is very easy for people far removed from a situation to lecture those who aren't about how to handle them, to treat the situation as some intellectual exercise that should be approached with the goal of a perfect solution. But the real world doesn't work like that. Life is messy, and perfect solutions are almost never attainable.

Removing the massive gang presence in the country is a prerequisite to actually enabling economic growth. You can't have a growing economy if gangs are going to swoop in and extort money from people every day. No one from outside of the country is rationally going to want to take their money and invest it in such an environment. However imperfect the solution being implemented is right now, it is a solution, and it is showing results. NOTUS Energy from Germany stated its intent to invest $100 million in energy infrastructure in the country, specifically citing improvements in security in recent years as a factor. If Bukele and the current government continue the path they are on, it is very likely interest in similar investments will continue to grow.

Not An Intellectual Exercise

The Bitcoin Law has not led to instant prosperity in El Salvador, but it is laying the foundations of that to come. Chivo still has its issues, but given time, those can be improved and private solutions can be built and tailored to meet the needs of people in El Salvador. The use of Bitcoin hasn't exploded through the entire country, but the seeds of it have been planted. Similarly, the crackdown on gangs this year has not magically turned the economy and country around, but it has planted the seeds of something. Removing the gangs from the street has created room for that economic growth to happen where it otherwise would not have had the space. Things are moving in the right direction.

People looking in from the outside have tried to paint Bukele and his efforts as either unspeakable totalitarianism or an already-complete process of sculpting a utopian dream. In my opinion, they are neither. He is a man laying the foundations to allow Salvadorans the room and freedom to create their own economic prosperity.

Will it happen overnight? No. Is it guaranteed to have a positive outcome? No. But he is trying as best he can to clean up the mess left over from 30 years of corruption and violence after a brutal civil war. Bitcoiners need to step back and realize that this is a real country with real people and not some intellectual exercise to argue about on the internet.

Things seem to me to be moving in a positive direction, and I hope they continue to do so.

This is a guest post by Shinobi. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

Enclosure: Array
Category: Opinion
Sat, 19 Nov 2022 13:00:00 GMT
Regulations Will Lead To A Two-Tiered Bitcoin Society

FTX is the greatest excuse, whether planned or not, to further control bitcoin on-ramps and take away the possibility of self-custody and true ownership.

This is an opinion editorial by Thibaud Marechal, builder of Knox bitcoin custody provider.

There has been a lot of coverage around the FTX catastrophic failure, with current developments and warning signs from the past. Will this have an influence on bitcoin in the coming years? I don’t care about shitcoin casinos, as most of them will probably be regulated as securities exchanges or shut down due to outright fraud or insolvencies. This is almost a done deal. But what about bitcoin?

Let’s play and game and speculate on the effect FTX will have on the future of bitcoin.

Bitcoin usage is going to split — gradually then suddenly. It’s been in the works since the genesis block was produced on January 3, 2009. There will be two ways to use bitcoin: as a black market good or as paper bitcoin on regulated exchanges. This future has almost always been true, but the distinction will become more clear-cut soon enough. What do I mean by that?

Regulators are going to regulate; that’s what they do. Bitcoin cannot be regulated, but custodial ramps such as exchanges, brokers and lenders can and they will be attacked. Self-custody is most likely going to be regulated out of the market for most buyers. It will become very hard to buy bitcoin and take full custody of it on these venues — maybe even close to impossible. This date is coming soon.

Quick, anon! You still have time before the on-ramps are closed, but how much? Three years or six months? The timeline is unclear. It will soon be impossible to buy bitcoin on an exchange and move that bitcoin into self-custody where you hold your own keys. Most custodial entities — which are trusted third parties — will be prevented from allowing users to withdraw under the disguise of regulatory compliance and consumer protection. You will buy paper bitcoin, aka fake bitcoin: These are IOUs to get artificial exposure to the price of bitcoin. You will not be able to claim that IOU and redeem it. Want to hold that bitcoin with keys that you control? Forget it, because it will be very hard. Few exchanges will allow users to self-custody and fewer will fight for the right of financial sovereignty. All they will do is sell paper bitcoin or stop operations for most businesses.

On one end, people will buy bitcoin IOUs on custodial entities giving up full KYC (know-your-customer) details, automated tax reporting and zero privacy. Bitcoin is going to be used as the underlying asset to the global financial surveillance network, the likes of which we have not yet seen. Regulated companies will form a network of compliance on top of Bitcoin and prevent you from holding what could have been truly yours. Perhaps they will even wrap it into a central bank digital currency (CBDC) to protect you against the volatility of bitcoin. You will buy paper bitcoin and you will be happy.

On the other end, bitcoin will flourish as the tool that it always ought to be: black market money. This will be the beginning of a new era for Bitcoiners who have zero fiat, i.e., the Bitcoiners who run full nodes, have full privacy and pay peer-to-peer for stuff with their hard-earned sats. CoinJoins will be the norm for most users to only share what they want with whom they want in order to protect their personal information from being surveilled by chain analysis companies. Some will call it a circular economy, others will call it the black market. It will operate 100% on webs of trust. Bitcoin will be bought without KYC between peers, using cash or bank wires when possible. It’ll be a small breath of fresh air in the era of digital surveillance and it will last until the rest of the fake Bitcoin network, choked by regulation, ultimately collapses under its own weight due to massive amounts of fractional reserves. Bitcoin will have succeeded in freeing itself from any state intervention and financial parasites, but that road will be long and sinuous.

Until then, the bitcoin price could be severely suppressed for many years and self-custody may be demonized, with hefty fines and government-sponsored intimidations similar to Executive Order 6102. Are you ready, anon? Don’t miss out. This is your chance to redeem yourself and choose what’s right for you and your family. Until then: tick tock, next block.

This is a guest post by Thibaud Marechal. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine. 

Enclosure: Array
Category: Culture
Tue, 22 Nov 2022 01:55:54 GMT
How The FTX Collapse Could Leave Blockfolio Users Exposed

The data necessary to analyze previous Blockfolio entries is now mixed up into the massive cryptocurrency exchange’s collapse.

This is an opinion editorial by Morgan Rockwell, founder of Bitcoin Kinetics.

I'm not concerned with Sam Bankman-Fried allegedly getting a loan from Alameda, which was actually FTX customer funds wired through Alameda to be credited on FTX. I'm not concerned with the moral compass of the celebrity investors who gave billions to a kid they didn't really know or understand, yet endorsed with wealth and credibility. I'm not very concerned with the financial and market effects upon the many companies, exchanges and traders who for some reason depended on FTX in any form.

I'm most concerned with Sam Bankman-Fried getting the personal identification information of millions of customers, and using that data to do chain analysis on the Blockfolio app he purchased which was used by many Bitcoiners and cryptocurrency holders as a tracking tool of Bitcoin, Ethereum and other watch-only cryptocurrency wallets.

Source: Google Images

If you aren't aware, Blockfolio was an app that was used by many Bitcoin holders and other cryptocurrency holders to keep track of the exchange rate or the prices of their coins held in cold storage or on wallets that they only wanted to be watching and not have actively on a hot wallet on their mobile device. Storing the wallet addresses actually were not even needed on the app. You could just put in a amount of a certain cryptocurrency that you wanted to watch and say that you had — but there was also a feature to connect to exchanges to keep track of all of your coins across all of the exchanges you had them on in one app. This was the beauty of Blockfolio as it didn't necessarily ask for too much personal identification information other than an email to help keep track of your account so you can log in from multiple devices.

Most of us like myself became aware of Sam Bankman-Fried because of the purchase of Blockfolio by a newly formed entity called FTX. Over several weeks the Blockfolio app was rebranded as the FTX app which now had its own exchange. It also had a new set of Know Your Customer rules, Anti-Money Laundering policies, a new Terms of Service, as well as its own custodial wallet held by FTX, we assumed.

Here you can see the Terms of Service at Blockfolio from June 30, 2017:

Source: Blockfolio Privacy Policy 2017

Blockfolio avidly argued that they were not and would not ever sell user data. Blockfolio even attempted to de-identify users with a hashing mechanism for IDs to not even let themselves identify and connect user portfolios to email addresses; this apparently never happened after the purchase and transformation into FTX.

Here you can see the stark difference in the new FTX Privacy Policy:

Source: FTX Privacy Policy 2022

Here is what little is mentioned about personal identifiable information within the FTX Terms of Service, which is a different document than the Privacy Policy.

Source: FTX Terms Of Service 2022

For reference, if you have never read a Terms Of Service or Privacy Policy of a company before, I strongly recommend you grab a strong beer and enjoy this word soup!

This all has brought up questions around this merger and the acquisition that happened in the cryptocurrency industry only a few years ago. I am concerned because after the fallout of this exchange, FTX going bankrupt and all of its assets potentially being put up for auction, I would like to know the state of the personal identification information that FTX had been forced to gather because of KYC and AML laws. My concern is the vast amount of information gathered including passports, phone numbers, IP addresses, home addresses, cryptocurrency wallet addresses, email addresses, passwords and government IDs. All of these could be sold at auction as customer data or customer profiles to whoever finds them valuable.

Source: FTX Privacy Policy (disclosure in the event of merger, sale, or other asset transfers)

Now the assets held by FTX whether they were actually real cryptocurrency such as bitcoin or made up tokens built on another layer one network such as ethereum are not too important in this conversation in my opinion. What is important is the data, the privacy data, the data mining operation that could have or will be done on all of this data FTX had gathered on customers either it was done by them or it will be done by whomever buys this data at auction. Even more so, the jurisdiction of that data is open to anywhere on earth.

Source: FTX Privacy Policy (international data transfers)

As someone who has personally worked on coin analysis concepts and technology for the United States Military, as well as consulted on this for the Department of Defense as a so called "subject matter expert," I can personally attest that it is very easy to correlate a person to their Bitcoin wallet address using nothing more than the amounts of bitcoin held on specific addresses, as well as the device data that is keeping track of those specific amounts on specific addresses — this is simple SIGINT, MASINT or HUMINT, all of which are different forms of intelligence gathering.

Source: Wikipedia Search For HUMINT

If you are keeping track of any bitcoin on any wallet over any Bitcoin explorer that is looked through a browser or app on any device, phone, laptop or tablet, there is now a record that will be connected to the IP address, the MAC number, the SIM phone number, the VOIP number, credit card number, home address and any other personal identifying information that is attached in any way to this device. I know this because Edward Snowden leaked documents showing that the NSA had a program called XKEYSCORE and applications were used like OAKSTAR and its subprogram MONKEYROCKET to specifically keep track of Bitcoin users at the NSA.

Source: https://theintercept.com/2018/03/20/the-nsa-worked-to-track-down-bitcoin-users-snowden-documents-reveal/

Now what I'm getting at is this data that FTX was forced under AML and KYC law to be gathered. This is potentially one of the largest gatherings of this type of data in the cryptocurrency industry ever done in history. This data, combined with coin analysis information related to bitcoin, ethereum and other cryptocurrency amounts being tracked by the previously titled Blockfolio app has created a situation where KYC data personal identifying information can be now superimposed over Blockfolio email addresses, UTXOs and watch addresses that plenty of people used on Blockfolio without any personal information being divulged to the app.

So this means that people that used Blockfolio to keep track of the amount of cryptocurrency they had, wanted to buy or were keeping track of for whatever reason will now be able to be correlated to very detailed personal identification information. The concern I have is not whether FTX and its hundreds of subsidiaries were keeping track of this information from Blockfolio or using it in any way, but that their vast new pool of customer information and data will be binded in the future to the Blockfolio data. I don't assume FTX was intelligent enough to do this for any purpose such as advertising, or data sharing with a hedge fund like Robinhood was caught doing, but I do assume that they may have considered selling this data to law enforcement agencies, to advertisers or to actors in the intelligence community as SBF said there was an open door to regulators and law enforcement agencies at FTX.

What we need to think about now is when the assets of FTX go up for auction, which they will, that not only the digital currencies and tokens as well as the licenses will be sold to some new party, but it will be the customers themselves, personal identifying information and the massive data mining that could have been or will be done with that data.

I was never an FTX user, I never created an account with FTX or FTX.us and I never wired any money to Alameda. Unfortunately, because of my longevity in the Bitcoin space, I used Blockfolio like many Bitcoin users before me to keep track of the amounts of Bitcoin I had in multiple locations and their total value. Now that data that I thought was private will be connected to KYC data of anyone I know, interacted with over a wire and any device they used, especially if through multiple connections it leads back to FTX in any way.

What we need to do now is ask the serious questions and not focus on the financial obligations or mishandlings of SBF and FTX. But we must ask who has this data? What has been done with this data and who will be owning this data in the future? The reality is FTT dissolving into nothing isn't a "Force Majeure Event," so most of the users are screwed.

Source: FTX Terms Of Service 2022

If this at all concerns you or involves you, I would suggest we all find the proper channels to protect ourselves from the worst case scenario from this fallout of data. This is the biggest problem with KYC and AML laws,because after all of this financial chaos, there is now a criminal-run exchange that is in possession of millions of people's personal information about their devices, their homes, their financials and more, all available to the highest bidder.

Notes:

The Blockfolio TOS & Privacy Policy go to dead links on the FTX.com website, but I found a 2017 version.
You must sign in through Zendesk to view the missing Blockfolio TOS/PP as well as the new FTX TOS/PP which means I had to give an email and PPI to even see the documents.

This is a guest post by Morgan Rockwell. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

Enclosure: Array
Category: Business