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Bitcoin vs Davos, Reverse Crypto IPOs, McAfee Flees the IRS | Hodler’s Digest - YouTube
Channel: Cointelegraph
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This week, global elites met at the World
Economic Forum in Davos where discussion on
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crypto featured the usual FUD.
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Two high profile guests were absent from Davos,
namely the U.S president and the U.K prime minister:
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Donald Trump because of the government
shutdown, and Theresa May because of Brexit.
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On the surface, Brexit and funding a border
fence may seem unrelated, but if you look
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underneath, they are rooted in growing discontent
with the elites of the world spurring a wave
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of populism that has spread to Hungary, Italy
and even Brazil.
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While various world leaders and economists
were happy to dismiss crypto and question
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its existence, in fact it was the very existence
of the World Economic Forum that became front
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and center of the discussion
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After a Bloomberg
panel show went viral.
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Davos is a family reunion of the people, who
broke the world.
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The world we live in, that you cover, has
worked for a narrow slice of people.
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Tony Blair and Bill Gates were asked to respond
but were clearly caught off guard.
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People think, you know, communism works better
or something, I don't know.
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Pavel Durov, who has attended Davos in the
past, might be launching TON very soon.
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Sources close to the Telegram CEO revealed
to Cointelegraph that, following the $1.7
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billion ICO last year, the mainnet and token
for its blockchain-based TON platform could
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be launched as early as March this year.
[90]
In Venezuela, the future of the Petro is in
doubt and the country in turmoil, as the U.S
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formally recognized the opposition leader
as president after a semi-coup took place,
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whereas Russia and other allies are continuing
to stand by Maduro.
[104]
Also this week, McAfee is on the run, a Wyoming
crypto bill, and the Bank of International Settlements
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says Bitcoin must depart from
proof-of-work.
[112]
Ladies and gentlemen, I’m Molly Jane, and
this is your weekly Hodler’s Digest.
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Although the crypto market was relatively
stable this week, let’s still have a quick
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look at its weekly performance.
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Ahead of Davos, Adena Friedman, the president
and CEO of Nasdaq, posted online that crypto
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“deserves an opportunity to find a sustainable
future in our economy” and called
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“the invention itself a tremendous demonstration
of genius and creativity,”
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For her, the crypto winter is just another
example of the “classic invention life cycle”
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from its inception to a period of hype, the
proliferation of new market entrants, and
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then “a dose of reality.”
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Once in Davos, the conversation turned much
more negative.
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The crypto industry was represented this year,
albeit less so.
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There was some talk of Bitcoin going to zero
with the regular platitudes toward blockchain.
[180]
Kenneth Rogoff was there with his usual FUD,
in a panel discussion he again called crypto
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a bubble and assured everyone there that there
was zero chance of crypto overtaking fiat.
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On the bubble aspect, yes, it's absolutely
classic.
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I think the possibility of a cryptocurrency
taking over for fiat money, dollar, pounds,
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whatever, is basically zero.
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But I want to say, I don't think it's worthless.
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So, there are economists: "zero, it's absolute
zero".
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The US has set financial sanctions, heavy
financial sanctions on 12 countries include
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Russia, Iran, North Korea, many others.
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They don't necessarily have an incentive to
play ball here with everybody else.
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And so we could see a home there.
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I think if you take the crypto out of cryptocurrency,
so that you can do anonymous transactions,
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there's just no value added, compared to fiat
money.
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Under the current system, yes, if we had Venezuelan
inflation everywhere in the world it would
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look very attractive.
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He did, however, reveal that he once advised
his then 13-year-old daughter to sell 24 Bitcoins
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for a $60 Amazon voucher.
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In 2012, my daughter, who was just a little
over, maybe she was 13 at the time, somehow
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mined 24 bitcoin and she owned them.
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And she said: "Daddy, what should I do?
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Somebody has offered me a 60 dollar Amazon
gift card for them."
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And I told her to sell.
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I'd like to have told her, I told her to sell
in the end of 2017, but I didn't.
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Jeremy Allaire, one of the founders of Circle,
was also on the panel, hit back at Rogoff’s comments:
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The biggest issue we have with financial crime
and with sanctions is with the US dollar.
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It's a 2 trillion dollar criminal market in
US dollars it is by far the preferred choice
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of criminals, of sanctioned countries, of
everybody.
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And in fact the central bank of the US prints,
literally, 360 billion physical dollar notes,
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half of which are hundred dollar bills, that
are sent overseas.
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I wonder who is demanding those, those central
bank dollars.
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That crypto is still too small and that the
big guns are focused on the money, that the
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Fed is giving out to countries around the
world, and that's where the real problem is.
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People they really struggle with the idea,
that money is going to work the way that the Internet works.
[328]
Elsewhere in Davos, Jamie Dimon sat down with
CNBC to express the fact that he takes no joy
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in Bitcoin losing 80% of its value, despite
his previously negative comments about the top crypto.
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Did you take any satisfaction, when bitcoin
dropped 80 percent or no?
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No.
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I think bitcoin is better than marijuana,
isn't it, Jamie?
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It is but we are not banking pot either.
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Dimon added that he believes that blockchain
is the future for some industries, just not all of them.
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And it may be usable for certain things and
not for others.
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It does cost more to maintain to process a
transaction, so it's like for equity trades
[360]
it requests 2 cents to process a block trade
and equity trade costs you a penny.
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You aren't going to use it for that.
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With populism growing across the world, the
global elites might be worried they’re losing power
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So we have a bright future ahead of
us--where Bitcoin survives and Davos dies.
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Bithumb, the world’s second-largest crypto
exchange by trading volume, is planning to
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go public in the U.S. by means of a reverse
merger.
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Also known as a reverse initial public offering,
the term indicates that a private company
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will acquire a publicly listed company in
order to bypass the often lengthy process
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of conducting an IPO.
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In this case, Singapore-based Bithumb’s
holding company signed a legally binding document
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in which it states the intention to acquire
the already public company Blockchain Industries.
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The combination of the two companies will
be known as Blockchain Exchange Alliance and
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it will be the first publicly traded crypto
exchange in the U.S.
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The move will help Bithumb in expanding its
operations in North America.
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The CEO at Blockchain Industries, Patrick
Moynihan, said that the deal will bring “liquidity,
[420]
solidity and expansion” to the crypto industry.
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Bithumb is not the only company that opted
for a reverse merger as a backdoor to go public.
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Also this week, OKC Holding group, the parent
company of crypto exchange OKCoin, bought
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a controlling share in a Hong Kong publicly
listed company, becoming potentially eligible
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to be listed on the Hong Kong Stock Exchange.
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Last year, Mike Novogratz used the same method
to get his crypto-centerded merchant bank
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Galaxy Digital listed on a Canadian securities
market.
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Bitcoin will have eventually to abandon the
proof-of-work system, says a recent study
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published by the Bank of International Settlements,
which deemed the current PoW system intrinsically
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unsustainable.
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Proof-of-work, the protocol used to confirm
transactions on Bitcoin’s blockchain, is
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inherently expensive, the study says.
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High transactions fees are required as a means
to guarantee the network's security and, as
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the number of minable Bitcoin will increasingly
diminish, transaction fees will not be enough
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to sustain mining expenses.
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As a consequence, the whole network will eventually
slow down and become unusable.
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The authors note:
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“Simple calculations suggest that once block
rewards are zero, it could take months before
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a Bitcoin payment is final, unless new technologies
are deployed to speed up payment finality.”
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Despite the development of second-layer solutions
such as the Lightning Network, which could
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help in speeding up transactions, the paper
writes that they don’t represent a viable
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solution for the long term.
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The only fundamental solution, the paper says,
would be switching to another form of consensus
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mechanism, which “will probably require
some form of social coordination and institutionalization.”
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The Bank of International Settlements has
been critical of crypto in the past, and a
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recommendation for a higher degree of institutional
oversights over digital assets does not come
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as a surprise.
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John McAfee was running on a pro-crypto platform
and now he’s literally running away.
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On Tuesday, he claimed to be fleeing the U.S,
but his actual whereabouts are never confirmed
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and he does have a flair for victimhood and
theater.
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His alleged flight came after he was indicted
by the IRS.
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But don’t worry, if you are tired of Trump
or don’t believe in Biden, his presidential
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campaign will continue from his boat.
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He recorded his current escapades on Twitter
for the world to see, here is the best of it:
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Good evening, ladies and gentlemen.
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You're probably wondering how I'm going to
manage my presidential campaign from a boat.
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I have with me on this little speaker my campaign
manager Rob Loggia in New York.
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So what's actually happening here, people.
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Every so often and very rarely a clash of
old and new cultures.
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Brought about by technology changes, civilization.
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Cryptocurrencies is one of these technologies
and, probably, the most traumatic to have
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occurred in human history since the invention
of fire.
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A new crypto-friendly bill was introduced
last week in Wyoming.
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If approved, Wyoming will become the first
U.S. state allowing local banks to provide
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custodial services for digital assets, in
the same way they do for mainstream securities.
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Also, digital assets will be classified as
one of the following: securities, assets or
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currency, thus enhancing the clarity of cryptocurrency’s
status in Wyoming.
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In an interview with Forbes, Wyoming Senator
and proponent of the bill Tara Nethercott said:
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“The time is now to provide the pathway
for blockchain and cryptocurrencies, and Wyoming
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has the nimbleness and responsiveness to the
needs of these industries to respond accordingly
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to the growing and adapting landscapes of
cryptocurrency.”
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According to Caitlin Long, co-founder of the
Wyoming Cryptocurrency Coalition, the introduction
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of the bill is an important step towards Wyoming
becoming a sandbox for the crypto industry.
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We reached out to Caitlin and asked her to
comment on the issue.
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What we're hoping is that the industry migrates
here.
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It's got the by far the best laws and that's
exactly what the intent is, that folks come here.
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So the institutional piece of that is just
a small piece of it.
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I think a lot of folks seemingly this week
were really surprised to learn that there
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is a very active lending market, for Bitcoin
especially, but all virtual currencies.
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And of course that's not happening on the
blockchain.
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So that's all happening in traditional centralized
databases.
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There are a number of startups in this field
and every one of them is taking a lot of legal risk.
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So what we're aiming to do is just by clarifying
the legal status of the assets.
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It gives them less legal risk and they're
more likely to come to Wyoming as a result.
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Probably the most meaningful impact of all
of that is that virtual currencies get the
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same transferability rules as money.
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So there were some folks who picked up and
said: “wait a minute, virtual currencies are money”.
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Technically no, that's not the case of the
States.
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The States, In the United States cannot determine
what a legal tender is in the United States.
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By Constitution we can't do that in the States.
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But what we can do is apply the same transferability
rules as money.
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And so that's a big deal because no other
State has done that.
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And what it means is, it improves the negotiability
of Bitcoin and other virtual currencies as assets.
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You may be wondering, “what the heck is
this?
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Not your keys, not your coins.
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Why would anyone ever want to custody their
coins in an institution?
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We are trying to get away from institutions”.
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And the answer is, of course yes.
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As an individual, you should never hold your
Bitcoins or crypto currencies on any exchange
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or institution longer than you have to.
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The challenge is that institutional investors
by law in most countries, not just the United States,
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are not allowed to self custody their
assets.
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And so until we can actually change those
rules, what's going to happen is, as institutional
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investors come into this industry, they're
going to have to have custodians.
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Therefore, given that custody is going to
form in this industry, how can we do it in
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a way that that keeps with the ethos of the
industry and the peer to peer nature of the technology?
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That's what Wyoming's aiming for.
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What do you guys think about Davos, should
it be canceled next year?
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Have the global elites really destroyed the
world?
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Comment below.
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And, as always, remember to like, subscribe
and hodl!
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