‘Rich Dad, Poor Dad’ Author Is Bullish on Bitcoin, Says USD Is a Scam

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Robert Kiyosaki, the author of the famous financial self-help book Rich Dad, Poor Dad, has described the US dollar as a scam, declaring that bitcoin and other cryptocurrencies are “currencies of the people” that will outlive fiat currency.

‘The Dollar is Toast’

Speaking with Kim Hughes on the Sane Crypto Podcast in which he excoriated the dollar, Kiyosaki also predicted an imminent stock market crash.

In his words:

“The US Dollar is a scam…I think the dollar is toast because gold and silver and cybercurrency are going to take it out…The US Dollar is gone…In the year 2000 there was one currency, the US Dollar. It was called the reserve currency of the world…and then came bitcoin or cybercurrency.”

Discussing his new book, Fake: Fake Money, Fake Teachers, Fake Assets, Kiyosaki revealed that he wrote about how gold, bitcoin, and other cryptocurrencies are a better hedge against an impending collapse of the financial market.

He said:

“In my new book… I talk about the three types of money today: God’s money, which is gold and silver, government’s money which is fiat currency, which is done by government decree which is the dollar… Then there’s the people’s money, which is cybercurrency on the blockchain technology. Gold is a hedge and I am expecting a collapse on the system…[and] which is why you are into cybercurrencies now… bitcoin and ethereum.”

Going further, he expressed a series of typically controversial financial opinions including a description of fiat currency savers as “losers” and calling for a return of the gold standard to the dollar following its 1971 removal by President Richard Nixon.

Doomsday Preacher?

Kiyosaki is no stranger to such opinions, having previously stated in an interview that another crash that will be “the biggest of all” is on its way following the crashes of 2000 and 2008.

He is not the only prominent public figure to hold similar opinions about fiat currency in comparison to bitcoin and cryptos. CCN reported in 2017 that Apple co-founder Steve Wozniak asserted that bitcoin is superior to USD, which he referred to as “kind of phony.”

Bill Gates and former Goldman Sachs manager Nomi Prins have also predicted a financial market crash, though they have not publicly expressed a preference for bitcoin or cryptos. Gates in particular has been bearish on bitcoin in recent interviews.

In April, when asked if the U.S. will have another financial crisis like that of 2008, Gates responded in the affirmative, describing it as a “certainty” despite being difficult to time.

Featured Image from Facebook/Robert Kiyosaki

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Not Playing Around: Decentraland to Invest $5 Million in Blockchain Gaming Startups

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Decentraland, a decentralized user-owned virtual world on the Ethereum blockchain, plans to invest $5 million to fund blockchain gaming projects built on the Decentraland platform. To this end, it created the Genesis Content Program, through which gaming developers can submit proposals for “blockchain games” and “interactive experiences” that can be built on Decentraland.

In a Medium post published recently, the company says it plans to “welcome larger and more ambitious projects” to its platform. The company says the new program will help encourage “innovation and growth in decentralized online gaming” in addition to $5 million in project financing, to be shared among top applicants.

With the Decentraland platform, game developers are presented with a new and unexplored opportunity for designing “virtual experiences” through blockchain based games. Developers can provide these experiences on the platform while monetizing them with tokens.

Using LAND

To build these blockchain games in Decentraland, developers have to control the LAND they host their games on. A LAND is a virtual piece of property that can be purchased through the Decentraland Marketplace. Game developers have to develop their games to “fit within the parcel boundaries” of their LAND as the “play space” each game takes up is limited. While the platform does make room for games that can be remotely accessed within the virtual city, developers will still require one LAND parcel, at the very least, to host and run the games.

Decentraland believes diversity will be encouraged in the games built on the platform, as there is distributed ownership. Unlike traditional MMO games or VR platforms that have central ownership, Decentraland offers a shared and “open source hub” for building distributed games that can be hosted across multiple parcels. The virtual reality company says it’s taking a “web-first” approach by following Google‘s lead in “incentivizing a low-poly aesthetic,” which will optimize the experience for users irrespective of the device used.

Decentraland has a list of genres that it believes are well suited to its platform, and these include scavenger hunts, loot crate games, crafting, and more.

Featured Image from Shutterstock

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Bears for Crypto, Bulls for ICOs: 2018 Market Positive Statistics

Disclaimer: This article does not contain investment advice or recommendations. Every investment and trading move involves risk, you should conduct your own research when making a decision.

The market data is provided by ICObazaar.

With the first half of 2018 now past, it is poignant to look back at the last seven months of data on the Initial Coin Offering (ICO) market — an important facet of the cryptocurrency ecosystem. Some predicted that the explosion of ICOs last year — with many failures and even more scams — would lead to a collapse in this area, but the statistics tell a different story.

The ICO phenomenon has followed an interesting path since its real boom, starting around May 2017. There has been growth, there has been regulation — as well as changing of sentiment.

2018 has been significantly bigger for ICOs than 2017, with the most successful month coming in March. The data over the last seven months indicates that ICOs continue raising huge sums of money, despite many thinking of them as scams. Additionally, the number of projects launching month by month are pretty steady, even showing growth.

Moreover, the stats suggest that the ICOs in 2018 are aiming for big numbers, with the most popular goals being set between $1 million to $10 million, as well as a significant portion at over $50 million.

Understanding the ICO ecosystem’s progression

Statistics show a definite spike in ICOs from April 2017, when $218 million was raised in that month alone. The rest of 2017 — until November, that is — ebbed and flowed, as 584 ICOs were raising $2.52 billion.

The ICO ecosystem — along with the underlying blockchain technology and digital currency tokens — makes up an important facet of the entire cryptocurrency ecosystem. ICOs are walking their own path in relation to regulation and public sentiment. But they are also affected by positives and negatives in the cryptocurrency markets.

Thus, when the SEC ruled that a decentralized autonomous organization (DAO) was a security, and when China decided to ban ICOs on Sept. 4, 2017 — many other state regulators started to take note of the financial risks associated with this form of capital raising.

When in December the fever pitch was reached by the end of the year — with suggestions that the G20 discuss cryptocurrency regulation — alongside Bitcoin’s race to $20,000, ICO capital raised hit a new record.

TOTAL AMOUNT

Against the odds, 2018 has been bigger

But January quickly broke December’s $1 billion record, with 254 projects raising $1.83 billion. 2018, thus far, has been a significantly bigger year in terms of the amount of money raised by ICOs. Additionally, the data shows an increase in the number of ICOs that raised this capital in comparison to 2017.

In 2017, 1,069 ICO projects were launched for the entire year. However, in just the first half of 2018 there have been 2,131 projects raising a whopping $12.8 billion.

PROJECTS ON ICOBAZAAR

Hitting their goals

In the past two months — as a recent cut out to give context as to what ICO projects are aiming to raise — it is interesting to note the caps that projects have put up.

When an ICO puts up a cap, it is the maximum amount of capital that it aims to gather. Most of the up-and-coming cryptocurrency projects set their caps so high that they are unlikely to be reached.

However, that number gives insight into where the projects are aiming. Across June and July, the two biggest targets — in terms of the percentages of projects — were between $1 and $10 million, but there was another large grouping of ICOs whose target was to make it to $50+ million.

ICO CAPS

To give a little understanding of the funds raised by ICOs, there were five projects that managed to raise over $10 million in their ICO that ended in July. The top grossing one pulled in an impressive $30 million.

The focus of ICOs

With ICOs being a funding system for a business which is aiming to use the blockchain in some way or another, there are a number of categories where these ICO projects congregate on. Popular categories for ICO projects over 2018 include platforms and cryptocurrencies, but also business services, trading and investment companies.

TOP ICO CATEGORIES

But what has become notable as the year has gone on is that the two biggest categories are getting closer together. For example, in January, platforms accounted for a quarter of all ICO projects, whereas cryptocurrencies were only 15.6 percent. So, while there has been a small growth in cryptocurrency projects, there has been a bigger decline in platforms, as other categories also pick up their stake in the overall situation.

Money is key

While there are a host of different statistics and figures that can tell a story about the ICO ecosystem, the biggest and most important one is the amount of capital being raised, as well as the number of projects coming out monthly.

Looking at that information, the ICO space seems to be on the rise — which may be surprising to many, as regulations and scams should be making them far less attractive to investors. Yet, money coming in is up, and so are products for the first half of 2018.

However, the next few months will be critical to note, as July was the worst month in 2018 in terms of funds raised.

Kim Dotcom: Invest in Bitcoin Before U.S. Debt Spirals Out of Control

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Controversial Internet pirate and bitcoin advocate Kim Dotcom is urging everyone to invest in gold and bitcoin because the U.S. government is adding $1 trillion to its debt every year, which will never be paid. The debt will destroy the U.S. and create a global economic collapse, Dotcom argued in a tweet.

Dotcom also tweeted that U.S. President Donald Trump began his term with an empire on life support, and that leading economists agree the U.S. debt is not sustainable.

Dotcom’s Warnings Not Unfounded

While Dotcom is controversial, his warnings are perhaps not unfounded, given the fact that the federal deficit rose 20% in the last 10 months, according to a recent report from the Congressional Budget Office, as reported by The Hill. From Oct. 1 to July, spending surpassed revenue by $682 billion, which is $116 billion more than the same period for the prior fiscal year.

The expanding deficit has been driven by Pres. Trump’s tax cuts and a Congressional agreement to increase spending. Trump has claimed the tax cuts will lead to stronger economic growth, delivering more tax revenue and reducing the deficit.

While the U.S. economy grew by 4.1% in the second quarter, economists have noted that more growth is needed to cut the deficit.

Deficit To Rise

us debt bitcoin chartData Source: U.S. Government | Image Source: Wikimedia

The deficit is expected to hit $793 billion at the end of the year and approach $1 trillion in 2019. Interest payments to service the debt are forecast to become the fastest rising yearly expenditure. In 30 years, servicing the debt will outpace expenditures on defense and Social Security.

Also read: New Zealand court rules Kim Dotcom can be extradited to the U.S.

Tweeters Weigh In

Responses to Dotcom’s post ran the gamut.

One tweeter said a military junta will emerge to protect people. Some agreed with Dotcom and said the U.S. dollar is already worthless, while another tweeter said the solution is to eliminate the country’s central bank.

Yet another tweeter responded that the debt will be restructured and that in the meantime, a restoration of the “manufacturing hole” caused by the North American Free Trade Agreement will restore U.S. manufacturing and lead to stronger economic growth.

Dotcom, meanwhile continues his battle with the U.S. government. In 2012, Dotcom was indicted by a U.S. grand jury over his file-sharing site, Megaupload.

The FBI shut down the site and ordered a raid on Dotcom’s home, accusing him of copyright infringement, money laundering and racketeering. Dotcom has been fighting extradition to the U.S. from New Zealand.

Featured image from Wikimedia

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Interview: Blockchain Startup Havven Brings EOS its First Stablecoin

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Havven, a decentralized payment network and stablecoin, has decided to launch on the EOS blockchain and will airdrop half of its new HAV tokens on the EOS blockchain to existing HAV holders on Ethereum. Havven wants to ensure that the payment network’s success does not depend on one blockchain.

The Havven/EOSIO partnership was announced at the EOS Hackathon in Sydney, Australia as part of Havven’s plan to be blockchain agnostic and operate on several blockchains. Stablecoins such as Havven’s nUSD are designed to prevent price volatility and are used for enabling transactions across different projects.

Blockchain Agnostic

“Havven chose to launch on the EOSIO blockchain because we see the need to remain blockchain agnostic,” Garth Travers, Havven project manager, told CCN via email. “If all useful projects remain exclusive to any particular blockchain, it will create ecosystem fragmentation, which will cause friction to the adoption of decentralized systems.”

Nothing will change for the 100 million HAV tokens on Ethereum, which will stay on Ethereum, Travers said. There will also be 100 million HAV tokens on EOSIO, half of which will be airdropped to HAV holders on Ethereum. Havven has no plans to leave Ethereum.

Havven is open to launching on other blockchains in the future, Travers said, but there are no immediate plans beyond focusing on EOS.

A Scalable, Decentralized Stablecoin

EOS price RAM

Havven introduced nUSD in June as a scalable and decentralized stablecoin. The nUSD tokens are backed by the collateralized HAV tokens, and the nUSD transactions generate fees for HAV holders.

Launching on EOSIO marks the next step to support numerous decentralized platforms since nUSD has been live on Ethereum.

“EOSIO allows greater transaction throughput which means dApps can support significant volume,” added Kain Warwick, founder of Havven. “Our goal is to support these projects by providing a stable medium of exchange for them to build on. Many categories like decentralized marketplaces or gaming applications will open up further and be able to deliver comparable transaction numbers to centralized systems. Havven is well placed to be a stable payment token within these ecosystems.”

Also read: EOS block producers vote to raise RAM supply to lower cost of running dApps

Cross Chain Compatibility Needed

“At this stage cryptocurrency is still in its infancy, so it’s not clear which blockchains will manage to scale,” Warwick said. “For this reason, it’s important that projects providing blockchain infrastructure plan to provide cross-chain compatibility, so their success isn’t bound to the success of whatever chain they’ve chosen.”

“Supporting multiple blockchains will ensure that critical infrastructure projects are available to developers no matter which platform they choose,” Warwick continued. “Havven is committed to helping to avoid fragmentation within the decentralized ecosystem.”

“We are excited that one of the most successful Australian decentralized projects, Havven, is building on EOSIO, and it was great to have them as a guest at our Sydney hackathon,” said Serg Metelin, head of developer relations at EOS creator Block.one. “As an open-source initiative that provides unique features to DAPP developers, the Havven project is a welcome addition to the growing EOS ecosystem.”

EOS launched in June after raising $4 billion. Block.one has noted it will invest $1 billion in the EOSIO ecosystem.

Images from Shutterstock

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Bitcoin Magazine’s Week in Review: Getting Creative With Blockchain Solutions

This week’s top stories include two feature interview: one with Kavita Gupta, founding managing partner at ConsenSys Ventures; and another with electronic dance music DJ Justin Blau (aka DJ 3BLAU) who is launching a decentralized music festival. Bitcoiners have begun moving from Twitter to a new “instance” on Mastodon, the SEC has delayed yet another ETF decision, and some of West Virginia’s overseas service members may be able to vote using a blockchain-based mobile app this November.

Featured stories by Tanzeel Akhtar, Jimmy Aki, Matthew Breen and Colin Harper  

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ConsenSys Ventures Kavita Gupta Talks Tachyon and India

ConsenSys, the Ethereum production studio based in the U.S., launched ConsenSys Ventures last year selecting Kavita Gupta to run two funds of $50 million and $100 million. Bitcoin Magazine spoke with Gupta to discuss the launch of project Tachyon and the launch of ConsenSys India.

She spoke about their goal to attract a diverse cohort of up to 15–18 teams, within the accelerator they are offering three tracks: Blockchain for Social Impact track; the Ethereum Project track; and an Open Source, blockchain-agnostic, grant-driven track. Upon completion of the program, they will have a demo day that will be exclusive to the most prominent angel and venture capital investors with expertise and passion for the blockchain technology. Gupta also discusses their technological focus, how they identify projects and teams and how investments are allocated.

The SEC Is Delaying Another Bitcoin ETF Decision

The SEC appears to be in no hurry to review the pile of Bitcoin ETF filings it has been accumulating over the past year. Not three weeks since postponing its decision on five other Bitcoin ETFs, the SEC has indicated in a public statement that it will be delaying its decision to approve or reject SolidX Bitcoin Shares until late September. Each rejection or prolonged decision creates more headwind with regulators to secure its first exchange traded fund. Many believe such a listing would open the floodgates for institutional money.

Bitcoiners Losing Faith in Twitter Inspire an Exodus to Mastodon

Twitter has become a toxic, corrupt and censored space, in the opinion of a growing number of Bitcoiners. A mix of perceived censorship through shadow banning and lack of serious action to remove the notorious ether giveaway bots have aggravated calls for a decentralized alternative to Twitter.

Enter Mastodon, a distributed social media platform that shares some features with Twitter, plus it includes more granular privacy controls and up to 500 characters available for microblogging. Opendime’s Rodolfo Novak has since gone on to create bitcoinhackers.org, an “instance” on Mastadon, dedicated to Bitcoin maximalists with “no scams, no shitcoin, no impersonation, no begging and no illegal content.”

DJ Who “Turned Down Wall St.” Is On a Quest to Decentralize Music Festivals

Bitcoin Magazine interviews Justin Blau, aka DJ 3BLAU, a popular electronic dance music DJ. He chats about how a chance meeting with the Winklevoss brothers started him on his crypto journey. Soon after, he saw the many ways in which blockchain technology could disrupt the music business,  which led to him start up the world’s first blockchain-powered music festival coming on October 20, 2018, known as Our Music Festival (OMF).

West Virginia to Offer Blockchain Voting Options for Midterms

For the 2018 mid-term elections this November, West Virginia residents that are part of the military and serving overseas will be able to vote using the mobile voting platform, Voatz. The software uses facial recognition to match each user’s “selfie-style video of their face” to their government-issued ID. Once approved, voters will be allowed to cast their ballot on the app. Ballots will then be anonymized and recorded on the blockchain.

Bitcoin Opinion: Long Live The King

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If you’re wondering how you should treat Bitcoin, as an investment vehicle, allow me to share with you guys my non-expert opinion.

End of story, thanks a lot for reading.

See you next time.

–this article shouldn’t be taken as financial advisement as it represents my personal opinion and views. I have savings invested in cryptocurrency so take whatever I write with a grain of salt. Do not invest what you cannot afford to lose and always read as much as possible about a project before investing. Never forget: with great power, comes great responsibility. Being your own bank means you’re always responsible for your own money

Cryptocurrency investment is one of the hottest topics we can discuss today, as there are many different opinions on what the future might hold for Bitcoin.

Due to the regulatory bodies world-wide having different approaches towards the subject, while at the same time Bitcoin being decentralized and not belonging to a single entity/organization, investors usually feel uncertain towards the future use of digital cryptocurrencies.

An important point, however, is that from a money-making perspective, which is what matters at the end to any investor, Bitcoin is undoubtedly one of the strongest profit vehicles since it came to existence – probably the best asset ever created: digital gold.

The Bitcoin Timeline

First we grab a price level, like when Bitcoin was around USD 8200. Now, if you want to understand if that price level is interesting, consider the following: the likelihood of having invested in Bitcoin at any given point in time since its inception while actually profiting from it, is about 97%.

Sounds too good to be true, right?

Except, it’s not.

By doing a rough estimate, we can quickly see Bitcoin has only been above USD 8200 for about 137 days. As it is traded for about 1917 days, there’s a ~ 97% chance you bought Bitcoin when its price was lower than USD 8200.

Of course this also means you only had a 3% chance of selling at the right time.

There’s always a dark-side to everything, right?

My point still stands: if we only take into account price and time, you’re actually way more likely to have made a bet at the right time, than the opposite.

I know these statistics are fun to play with, but they hardly bring you any real value. Knowing when you could have bought and sold it’s important from a learning perspective, although real investor education happens in a most peculiar way; usually, by making wrong bets and suffering through bearish seasons, that is.

What you desire to know is not how much money you could have made. What you, and everyone else, really want to find out is how much you can still make.

And today, that is what I’ll be discussing.

With a few twists, some side-track topics and the usual delightful shenanigans.

Before we go any further, please remember the below warning:

Anyone who tells you they’re not in it for the money are either lying or don’t need to care about money because they have so much of it, diversified over so many assets, their risk is quite low.

Back to what matters.

Is The Future Bright?

Depending on where your political and economic view-point stand, Bitcoin can either be the world’s savior or its demise.

In my humble opinion, as an economist, I think most of us are dead wrong on how we think money works . I won’t go into too much detail about the subject, as I really want to write an exploratory paper on how (I believe) money should be earned and accessed. The point worth extrapolating is that, much opposed to general belief, I do think there are many different ways to redistribute wealth properly and to create incentive systems for everyone being able to earn cryptocurrency.

Seems illogical that the biggest problem in cryptocurrency (adoption) could be easily fixed by creating ecosystems where users earn tokens for doing things. 

Literally anything at all.

Part 1: The Bitcoin Market

When we look at how the market has been evolving, since its birth, I would expect this “bubble” like behaviour to continue, maybe indefinitely.

There are many factors which will balance into the behaviour of price, especially market manipulation, regulatory actions and, of course, both institutional money and other financial investment vehicles (like Bitcoin futures or ETFs).

Historically speaking, Bitcoin has been kind to long-term investors.

Short-term investors cannot complain too much, as Bitcoin is one of the most (if not the most?) volatile assets out there.

Plus, I believe smart-money is coming full force, as it usually happens after every Bitcoin bearish season.

Remember what happened after the mini-crash in March 2017?

Want an expert opinion on the real value of Bitcoin and possible triggers for mass adoption?

Check this beautiful piece from Hacked’s one and only, Mati Greenspan.

As with everything in life, there’s the good and the bad (sometimes the ugly too); and Bitcoin is not an exception.

If there are many factors that could trigger a price increase, like mass adoption, there are others that can have quite an opposite effect.

Let’s check which triggers can potentially call for bear and bull markets.

Market price manipulation

To me this is definitely the grand-master behind the major price run we’ve seen in late December 2017 and January 2018. It did take me some time to truly understand why, but due to the amazing work of so many different people, we now have a better, clearer picture of what really happened.

Tether manipulated the markets by manipulating the price of Bitcoin. It wasn’t any technology advancement in neither Bitcoin, nor the large quantities of dumb money entering the market.

The key argument pointed out by Prof. Griffin on the research paper “Bit “, was that “When Bitcoin’s price fell, purchases with Tether tended to increase, helping to reverse the decline. But during times when Bitcoin rose, Griffin said he didn’t see the reverse occur.” Seems Tether was protecting the price of Bitcoin from crashing.

To accomplish this, large quantities of Tether were issued and used to buy Bitcoin on Bitfinex. Of course this wouldn’t be such a big deal if Bitfinex wasn’t owned by the same people who own and mint Tether. But that’s not even the worse. Consider this: wouldn’t you expect a company that claims they own reserves on a 1:1 ratio between Tether and USD, to be fully externally audited and show proof of those USD reserves?

Another huge red flag if you ask me.

To those who now claim “oh but some lawyer dudes just came out and said Tether bank accounts are fully backed so it’s all good”, please, I beg you to actually do some digging.

The only thing Freeh, Sporkin & Sullivan LLP (FSS) said about Tether was: “FSS is confident that Tether’s unencumbered assets exceed the balance of fully-backed USD Tethers in circulation as of June 1st, 2018.”

That doesn’t sound like a real assurance to me.

Especially when you consider the “official” news-source, that appeared unsigned by the FSS board on Tether’s website, also stated “procedures performed are not for the purpose of providing assurance”.

Bitcoin Futures

My view on futures is a bit blurry. I understand their purpose and I also recognize their effectiveness in taming markets, especially during the short-term. Does it work in the long-term?

In 1974 the first gold futures contract was traded on the COMEX exchange in New York. Trading started on December 31.

Fast-forward three years and gold was back rising to new highs.

That’s right. No one can tame the ambition of human beings to exponentially increase their wealth, time after time; there is no futures market that can ever stop speculation. Money talks louder and that means there will always be new smart-money coming into the actual asset, making its price go higher. What will happen is that those same people will have an extra incentive.

Smart-money

As we’ve seen in the past the usual trigger for adoption is smart-money coming into any market. Bitcoin, of course, is no different.

The logic is quite simple.

Smart-Money -> Media Hype -> Adoption

You might think this is oversimplifying how things work, but the logic is dictated by public perception of Bitcoin.

Is it a good investment vehicle? Should I store money in Bitcoin? Do other people actually accept it?

The answer to world-wide adoption is acceptance; but acceptance only comes with adoption.

It’s the chicken-egg dilemma. The most beautiful redundancy.

What this means is that both adoption and acceptance walk hand-to-had; one leads to the other and none can exist alone.

That is why market manipulation or Bitcoin’s futures, although being the bad are not that bad. Manipulation usually means high volatility, which in turns bring massive profits.

Sure, I get this isn’t helpful to the ultimate goal of cryptocurrencies – which to me is the ability to shift wealth redistribution.

I also can’t make exclude the hypothesis this feature of cryptocurrency won’t be the catalyst for its destruction; however, if we apply logic and reasoning taking into account the recent Bitcoin price history, we can clearly expect volatility to bring more and more people into the market.

Price Volatility

Ups and downs are usually a nice and easy way to help bubbles growing.

And, as you might know, bubbles have a certain tendency to pop.

History has taught us it usually isn’t a question of if, but when.

When downwards price movement dominates a market the only thing you can usually do is sit and wait. Cryptocurrencies, especially bitcoin, are prone to huge downfalls, yes; but we can also expect massive rebounds at some point.

There are always some unbreakable rules successful investors follow, in order to being able to succeed.

Again, please remember this is not financial advise

To me those are:

  1. Invest only what you can afford to lose;
  2. Buy when there’s fear, sell when there’s hype;
  3. The market behaves in waves. Be patient and wait.

Because I follow those rules I’m not afraid of bear-markets. Heck, just remember 2012-2013.

Whatever goes around comes around, so being passive is sometimes a better decision that getting ahead of everyone.

Just think: what are the chances you actually figured out how to beat the entire market?

That’s why I personally do not trade – yet envy those who successfully do it.

You need cunning, agility and balls of steel; otherwise emotion will most likely triumph over reason.

Anyhow, the chances you’ll get stuck at a really bad price-level (ie, if you bought bitcoin near USD 20,00.00) during an extensive amount of time, are not that great.

Yet, as time is a relative thing, our ability to be patient is also relative. Meaning what I consider to be an acceptable amount of time, you could see it as unbearable.

  • Would you wait 1 year to increase your portfolio in 100%?
  • What if you could increase it 500% over a space of 2 years?
  • Better yet, what if it grew 5000% over the course of 3 years?

Are you thinking “I’m sure could do it”?

Alright, then do a quick exercise:

Have you ever done anything long-term, during at least the amount of time you’re considering investing, which costs you time, money and doesn’t pay-off anything?

If so, then I would argue you can definitely succeed at hodling.

If not, maybe you should consider a different approach.

Patience isn’t an easy skill to learn when we live in an inflationary world: money of tomorrow will be worth less, meaning you need to keep getting more and more present value, instead of focusing on future value.

Faster Payments, fewer fees

Since the introduction of the Blockstream Store in January, the Lightning Network has grown tremendously. Around the announcement, the Lightning Network had a total of 46 open channels and 0.682 BTC in capacity. Nowadays, there are roughly 7,800 open channels with 26 BTC of capacity. That is a 16,856% increase in channels and a 4,084% increase in channel capacity in 6 months!

As the Lightning Network grows, additional integration options will become available that could provide exchanges and users with security and ease-of-use benefits beyond the two basic integration strategies described above.

  1. Exchange-specific, Lightning-driven apps

With Lightning, it can become possible to allow exchange users to make trades from within dedicated local apps, making deposits and withdrawals transparent to users. These apps can run on desktops, smartphones, or on more secure hardware devices such as the Ledger Blue. With exchange functionality integrated with a Lightning wallet, funds can be moved into an exchange’s control for the minimum time required for a trade to execute. Immediately after an order is filled or expires, the funds would be returned to the control of the user’s wallet/exchange app via Lightning. This could potentially create a simpler experience for users as well as reduce risk for exchanges in case of security breaches, as the amount of funds stored in hot wallets could be much lower.

  1. Deposits and withdrawals via the public Lightning Network

With the two integration strategies described above, it’s assumed that users will be opening channels directly with exchanges. This will be economical for larger-scale traders who move money in and out of exchanges often. However, as the Lightning network develops, it will be possible for users to have open channels into the public Lightning network and for those users to be able to route deposits and withdrawals via intermediary nodes. It will likely take some time before there is enough connectivity within the Lightning Network for this to work, but when this becomes possible, it will allow a user’s channels to be used for a variety of different kinds of payments as well as multiple exchanges. With channel setup costs spread across multiple applications and counter-parties, Lightning transactions will become cheaper and more convenient.

There are many ways to improve scalability and off-chains are a great way to accomplish that.

Why should increasing the block-size be a better solution, if it will put more stress onto small transaction due to increasing fees?

Scalability will happen, just a bit differently than you might expect.

We already have the unique piece that allows for scalability to happen: an underlying asset people can use a store of value.

Whatever is built on top doesn’t really matter if the underlying layer, bitcoin’s blockchain, is still used as the settlement layer.

From batching and Shnorr signatures, to the Lightning Network and atomic swaps, there are as many ways to improve transaction throughput, as far as our imaginations reach out. You could potentially have digital fiat-currencies redeemable for Bitcoin. You can have other side-chains that interface with a single wallet app, meaning if it’s easy to exchange your tokens and other cryptocurrencies for Bitcoin, you will still use it as a base-layer to store your “gains”.

The point is: let’s not focus too much on something that will eventually happen. Everyone (myself included, full disclosure) has been focused on technology and price so much, we forgot to take a couple of steps back and re-visit some core debates, crucial for the overall Bitcoin acceptance.

Part 2: Tokenomics, The Key To Adoption

If you wonder how tokenomics can foster user adoption, think of the best way you know to redistribute value. In Bitcoin, that is done through mining and selling the actual currency.

Right now most projects we see, spawning here and there, which actually try to implement a successful business models based in tokens, are forgetting some key aspects of the most important metric of all: purpose.

Andreas usually says: what can your business gain from decentralization?

I say: what can your business give to decentralization?

The reason is simple, if you create a system where you need to  “subscribe” or spend money for tokens in order to participate, then the system is not inclusive.

If you build a system where participants are rewarded for participating, like Bitcoin rewards miners for securing the blokchain, then you can build any incentive system which users may see as actual value.

By combining the power of fast payments with tokenomics, I can easily see a world where value is simply traded and earned through mostly everything we do.

Decentralization doesn’t mean “screw the middleman”.

Actually, decentralization depends much on the middle-man. Except we all can become that middle-man because as we spend time in a certain network, doing certain things, we get rewarded.

Decentralization means implementing systems which properly balance reward payouts, to all participants, in as many different ways possible.

The middleman is always welcomed, I highly doubt the world would survive without platforms and distributors and companies linking networks of producers and consumers, investors and start-ups, even creditors and debtors.

And all work must be paid in kind, isn’t that right?

If cryptocurrency uses its underlying technology properly, then there is no reason atomic swaps won’t allow for the emergence of many different middle-men, charging very  low fees, competing to hold the power to convert some crypto into another.

If cryptocurrency is easy to convert into other forms of monies, why wouldn’t we solely use cryptocurrency? Trust is backed by both the number of users in a network, as well as its internal ledger security.

As currently Bitcoin seems to be the most technological secure system out there, to store money, it’s just a matter of time until it also becomes the most secure and cheap way to transfer and use money.

However, do not expect the path to the bottom of the rainbow to be clear of perils.

No technological advancement, which promoted checks and balances to avoid power and decision-making centralization, has ever been received in kind.

So why would the world be different towards cryptocurrencies?

How the financial system views cryptocurrency

When we hear countries banning cryptocurrencies, exchanges being blocked by the rule of man (like India), attacks to promote hype and fear across small-time investors, that is the time we know they are afraid.

Decentralization means breaking concepts and views of the world as we never thought possible.

Companies building crypto-payments or savings apps, crypto-messaging apps, decentralized storage and infrastructure sharing crypto-tokens, or any other crypto-enabled system, will soon realize the easiest way to bring value is by giving value.

Yes, go ahead, create your own money.

It has no value, they say?

It’s of no use, they say?

Terrific! Then nobody will mind if you just give it all away. Like bitcoin did.

The More You Give To People, The Better

If a company has a product which holds value and then decides to distribute a token with a clear purpose within that product’s or organization ecosystem, why wouldn’t people consider that token valuable?

If everything holds value just because we believe it holds value, I see no reason for Bitcoin to have a limited growth.

As long as the network of users continues to grow, price will eventually grow.

Because of its deflationary properties, if people continue to say bitcoin has value (by purchasing it), then I see no reason for a price ceiling.

*Maybe we really are going to the moon!

My opinion could be wrong, Bitcoin might disappear into oblivion someday and we keep stuck with fiduciary currency.

If that is not the case, then the likelihood of Bitcoin’s pricing skyrocketing someday should be incredibly high, simply because it has happened a gazillion times in the past – and history has a tendency to go around in cycles.

I know: past performance does not indicate future performance. However, I haven’t heard of any network which grew in numbers and not in price.

If you were to gamble on the success of cryptocurrency, would you bet in a system no single nation or group of people controls, or in a fiduciary system based on a pyramid logic?

Hope you’ve enjoyed the article!

Give it a like down below and leave a comment. Tweet me @febrocas

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Cryptos See Widespread Green, But Total Market Cap Remains Close to 3-Month Low

August 12: Crypto markets are seeing solid gains today in a fresh attempt at recovery following recent losses.

Bitcoin (BTC) dominance –– or the percentage of total crypto market cap that is Bitcoin’s –– is continuing to see a 2018 record-high percentage, at close to 50.9 percent. After the leading coin decoupled from the wider market yesterday –– holding its gains while other cryptos floundered –– healthy growth has today been distributed across virtually all of the major cryptocurrencies, as Coin360 data shows.

Market visualization from Coin360

Market visualization from Coin360

Bitcoin (BTC) is trading at around $6,310 at press time, up a strong 3.45 percent on the day, according to Cointelegraph’s Bitcoin price index. The top coin has seen a 24-hour high of $6,455, but has failed to break through $6,500 resistance, trading sideways within the $6,300-400 range for most of today. Having dipped briefly down to a low around $6,209, Bitcoin has recovered in the couple of hours before press time to hold just above the $6,300 price point. Weekly losses remain at about 10 percent, while on the month Bitcoin is up around 1.42  percent.

Bitcoin’s 24-hour price chart

Bitcoin’s 24-hour price chart. Source: Cointelegraph Bitcoin Price Index

Ethereum (ETH) is currently trading around $322, up  a solid 5.31 percent on the day. After plummeting as low as $306 in evening trading hours yesterday, the altcoin saw a strong push upwards to test the $330 mark. These fleeting attempts to break to a higher price point failed to hold, and the altcoin has since retraced towards the $320 mark. Ethereum’s losses on its weekly chart are at a little over 20 percent, with monthly losses heftier still, at almost 25 percent.

Ethereum’s 24-hour price chart

Ethereum’s 24-hour price chart. Source: Cointelegraph Ethereum Price Index

On CoinMarketCap’s listings, all of the top 25 crypto assets by market cap are seeing a healthy flush of green, with gains on the day pushing as high as around 5-6 percent.

Among the top ten coins by market cap, Stellar (XLM) and  Litecoin (LTC) are up the most, both seeing almost 6 percent growth on the day.

Although a Facebook spokesperson yesterday denied  rumors that the social media giant had been considering a potential partnership to build a Facebook variant of a Stellar blockchain, the asset is nonetheless riding positive momentum, which has been particularly strong on the XLM/USD chart.

Stellar’s 24-hour price chart

Stellar’s 24-hour price chart. Source: CoinMarketCap

Another leading performer among the top ten coins is anonymity-oriented altcoin Monero (XMR), in 10th place by market cap, up almost 4 percent and valued around $93.66 at press time.

Among the top twenty coins by market cap, IOTA (MIOTA), number 11th, is up 4.44 percent and is trading at $0.54 at press time. As seen across the crypto markets, the altcoin is still down on its weekly chart, but has seen a burst of upwards momentum as of evening trading hours August 11.

IOTA’s 24-hour price chart

IOTA’s 24-hour price chart. Source: CoinMarketCap

Still within the context of the top twenty ranked coins, NEO and Tezos (XTZ) are seeing stronger-than-average growth, both up around 4 percent.

As noted, for the second day running, Bitcoin’s share of the total market cap is above 50 percent and is pushing 51 percent at press time. BTC dominance has been consistently on the rise as of mid-May, while the second-ranked crypto, Ethereum, has seen a downtrend on the month in terms of its total market cap share, down to around 15 percent today.

3-month chart of cryptocurrencies by dominance

3-month chart of cryptocurrencies by dominance. Source CoinMarketcap

Total market capitalization of all cryptocurrencies is around $214.7 billion at press time, close to its lowest levels on the three-month chart, only hitting lower points in the past two days, and up slightly from yesterday’s low around $207 billion. As compared with $410.6 billion in mid-May, the market is coming bearishly close to a 50 percent decline.

3-month chart of the total market capitalization

3-month chart of the total market capitalization of all cryptocurrencies from CoinMarketCap

Alongside retail and institutional HODLers, crypto miners are feeling the pinch of the protracted bear market. Analysts have this week forecast that graphic processing units (GPU) manufacturing giant Nvidia will see a decline in its revenue from sales of crypto mining hardware, which had accounted for over 9 percent of overall revenue in its 2018 Q1 report.

Meanwhile, the director of the U.S. Financial Crimes Enforcement Network (FinCEN) this week revealed that the agency has seen a surge in filings of crypto-related Suspicious Activity Reports (SARs), which now reportedly exceed 1,500 in number per month.

This rising figure was presented as a positive indicator, with the director emphasizing that compliance with regulatory obligations is increasingly important given that “harm can be done with devastatingly increasing speed, breadth, and obscurity in the digital world.”

$43 Billion Wiped Out of Crypto in 5 Days as Bitcoin Price Rebounds

Bitcoin price rollercoaster
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Over the past 24 hours, Bitcoin, Ethereum, and Bitcoin Cash recovered by around four percent, as the crypto market added $8 billion to its valuation.

On August 11, the crypto market lost more than $12 billion of its valuation as major cryptocurrencies recorded large losses. Since then, the market has slightly recovered but the momentum of major digital assets still remains weak.

Drastic Turn of Momentum in Five Days

On August 7, the value of the global cryptocurrency market hovered at around $257 billion, supported by stability in the price of both Bitcoin and Ether, the native cryptocurrency of Ethereum, at $7,300 and $400 respectively.

Since then, within less than five days, the price of Bitcoin and Ether fell to $6,300 and $320, reaching $5,980 and $305 at their lowest points on August 11. In five days, more than $43 billion were wiped out of the market.

It is evident, given the steep decline in the valuation of the crypto market, that major cryptocurrencies have faced a strong downtrend over the past few weeks. Apart from Bitcoin, the most dominant digital asset in the market, almost every major cryptocurrency and token lost a significant chunk of its value.

Ether, for instance, has been one of the worst performing digital assets throughout August, despite demonstrating momentum throughout January to July. Some analysts have attributed the steep drop in the price of Ether to the sell-off of ETH by initial coin offerings (ICOs) and blockchain projects.

Dumping of Ether on public cryptocurrency exchanges by large-scale blockchain projects explains why one of the better performing cryptocurrencies in 2018 lost more of its market valuation than any other major digital asset over the past week.

For the cryptocurrency market to experience a reversal in trend and momentum, not merely a 1 to 5 percent increase in value but a 40 to 50 percent surge in its value, a drastic change in its volume and price trend will have to be recorded, meaning that Bitcoin would have to secure momentum at major resistance levels.

In the short-term, considering the overly strong downtrend of the market, it is difficult to see even large cryptocurrencies recording corrective rallies to be at a better position to initiate a mid-term rally.

At this point, a more plausible situation is major cryptocurrencies bottoming out at the lower price range, building stability for a few weeks, and then initiating a strong rally. The probability of cryptocurrencies suddenly increasing in value by 10 to 20 percent, as Bitcoin has done in late June, is low.

Bitcoin is in a Better Position?

Willy Woo, a respected cryptocurrency analyst who predicted the price of Bitcoin to bleed out slowly from $9,000 to $6,000 in late may, said:

“Just looking at Chris’ chart you can see BTC is much stronger this time around. (Comparing OBV indicators over the same time frame is a great way to see of this more clearly.) There’s a lot of buying going on behind the fear and capitulation.”

As mentioned above, it is of utmost importance for BTC and other cryptocurrencies to build momentum and stability, to support the next rally in the mid-term.

Featured image from Shutterstock. Charts from TradingView.

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Hodler’s Digest, August 5-12: You Can’t Actually Buy A Frappucino With Bitcoin, But You Can Ship More Things On Blockchain

Coming every Sunday, the Hodler’s Digest will help you to track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions, and much more — a week on Cointelegraph in one link.

Top Stories This Week

US Security And Exchange Commission Postpones Bitcoin ETF Until Fall

The U.S. Securities and Exchange Commission has delayed its decision on the listing and trading of a Bitcoin exchange traded fund (ETF) until September 30. The SEC is in the process of considering a rule change that would allow the fund, which is powered by investment firm VanEck and financial services company SolidX, to be listed on the CBOE BZX Equities Exchange.

WSJ Reports Price Manipulation In Crypto Conducted By Organized “Trading Groups”

According to this week’s article by the Wall Street Journal, cryptocurrency price manipulation is mainly conducted by organized “trading groups” that create “pump and dump” schemes on services like Telegram. According to the article, these groups can either create millions of dollars for themselves or be stung by the losses once all of the group dump a certain asset at the same time.

US DEA Agent: Ratio Of Criminal Activity To Legitimate BTC Transactions Has Flipped

U.S. Drug Enforcement Enforcement Administration agent Lilita Infante, who is a member of the Cyber Investigative Task Force, said this week that the number of illegitimate Bitcoin transactions has dropped to just ten percent of transactions. Infante added that she wanted people to keep using the blockchain, as it made them more easily identifiable.

Starbucks Denies Bitcoin Payment Method Hype After Misleading Media Reports

U.S. coffee chain Starbucks will not be accepting Bitcoin as payment for Frappuccinos or other drinks after a week of misleading article titles implied the opposite. After last week’s announcement by the operator of the NYSE that they would be creating a new digital asset ecosystem with Starbucks as a partnered, a wave of news reports falsely represented that Starbucks would accept crypto for coffee, while really customers will rather be able to convert BTC into fiat which can then be used at Starbucks.

Jamie Dimon Breaks Crypto Silence, Calls Bitcoin A “Scam”

JPMorgan CEO Jamie Dimon said this week that Bitcoin is a “scam” and that he has “no interest” in it, while speaking at the Aspen Institute’s 25th Annual Summer Celebration Gala. According to Bloomberg, Dimon further “suggested governments may move to shut down the currencies [cryptocurrency], because of an inability to control them.” Dimon had told reporters last October that he wasn’t going to talk about Bitcoin anymore after a series of negative crypto comments in the fall.

Most Memorable Quotations

“The potential for an [exchange-traded fund] is causing investors to decide that bitcoin is the best house in a tough market,” — Tom Lee, Fundstrat’s head of research

“The main thing to remember is that bitcoin is very early-stage venture, but has real-time price feed — and that’s a unique thing. People get excited about the price and overreact,” — Dan Morehead, CEO of Pantera Capital

Laws And Taxes

Judge Advances Securities Class Action Case Against Tezos Creators

A U.S. District Judge has refused to dismiss a suit against the husband and wife duo behind blockchain project Tezos, who are currently accused of violating U.S. Securities and Exchange Commission (SEC) regulations through the sale of unregistered securities in the U.S. Although the Tezos creators maintain their fundraiser took place in Switzerland, outside of U.S. jurisdicion, the judge has disagreed.

Adoption

Commonwealth Bank of Australia To Issue Bond On Blockchain Per World Bank Mandate

The largest bank in Australia, the Commonwealth Bank of Australia (CBA), has been mandated by the World Bank to arrange a bond issue entirely on a blockchain. The Blockchain Offered New Debt Instrument (bond-i) will be issued and distributed on a blockchain platform under the operation of the World Bank in Washington and CBA in Sydney. For now, the two organizations are using a private Ethereum blockchain, but the CBA noted it was open to alternatives.

Study Shows ICO Market Has More Than Doubled Since Last Year

A study conducted by independent rating agency ICORating has found that the Initial Coin Offering market has more than doubled in a year. According to the agency’s report, ICOs in 2018 have already raised over $11 billion in investments, a figure which it purports is ten times larger than the sum of investments from ICOs in Q1-2 2017.

Goldman Sachs Reportedly Plans to Offer Custody For Crypto Funds

Sources told Bloomberg this week that Goldman Sachs is planning to offer its clients custody for cryptocurrency funds, as the bank says that it remains “undecided” on its cryptocurrency plans. A spokesperson for the bank said that they are exploring “various digital products” in response to client interest.

Chair Of U.S. House of Representatives Judiciary Committee Reveals Crypto Ownings

Congressman Bob Goodlatte, a Republican representing Virginia, disclosed that he owns between $17,000 and $80,000 in cryptocurrency in what may be a first for a member of Congress to publicly report their crypto holdings. According to his release, the Congressman has principally invested in Bitcoin (BTC), with some holdings in major altcoins Ethereum (ETH) and Bitcoin Cash (BCH).

Another Swiss Bank To Accept Cryptocurrency Assets As Market Demand Increases

The Maerki Baumann private bank will become the second Swiss bank to accept cryptocurrency assets, citing the new market demands and the rise of cryptocurrencies’ popularity. The private Zurich bank has decided to accept crypto assets from payments received for services rendered, as well as those earned from crypto mining, but notes they are not ready to provide direct cryptocurrency investments.

Mergers, Acquisitions, And Partnerships

UK Financial Authority Launches International Initiative For Fintech Cooperation

The UK Financial Conduct Authority has announced the creation of a global initiative, made up of 11 financial authorities and related organizations, to work together in in order to help fintech firms interact more easily with regulators from different countries. The Global Financial Innovation Network (GFIN) aims to consult on topics such as the growth of technologies like distributed ledger tech and artificial intelligence (AI), as well as the regulation of securities and Initial Coin Offerings (ICO), among others.

Maersk, IBM Launch Global Blockchain-Based Shipping Solution

IBM and Danish transport and logistics giant Maersk have launched their global blockchain-enabled shipping solution, made up of 94 organizations. The global supply chainplatform, TradeLens, has already captured 154 million shipping events, and its dataset is reportedly growing at a rate of close to one million shipping events a day.

Winners And Losers

The crypto markets are still in the middle of their slump this week, with Bitcoin trading at around $6,583 and Ethereum at around $324 by press time. Total market cap is now at around $215 billion.

The top three altcoin gainers of the week are InflationCoin, Jesus Coin, and Galaxy eSolutions. The top three altcoin losers of the week are Artex Coin, VeThor Coin, and Network Token.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

FUD Of The Week

Wall Street Analyst Says Bitcoin Is “Game Over” If It Breaks Year-To-Date Support

Renaissance Macro Research’s head of technical research Jeff deGraaf concluded it may be “game over” for Bitcoin (BTC) in a new analysis if the cryptocurrency breaks its year-to-date support. In a note to clients, deGraaf, also claimed that Bitcoin’s price movements suggest the largest cryptocurrency is “permanently impaired.”

Bitcoin ATM Malware Found Available For Purchase Online

Tokyo-based security software manufacturer Trend Micro has found Bitcoin (BTC) ATM malware available for purchase from an “apparently established and respected” user on a darknet forum. For the price of $25,000, criminals could purchase Bitcoin ATM malware accompanied by a ready-to-use card with EMV and near-field communication (NFC) capabilities. The software exploits a BTC ATM vulnerability, allowing fraudsters to receive the BTC equivalent of up to 6,750 U.S. dollars, euros, or pounds.

Research Shows Twitter Crypto Scam Bots Number Around 15,000

An analysis of 88 million Twitter accounts has revealed more information on infamous phenomenon of cryptocurrency-related Twitter accounts advertising fake “giveaways,” finding a network of at least 15,000 scam bots. The researchers looked at the latest 200 tweets from each account, unearthing a mesh of 15,000 bots at work spreading fake competitions and impersonating some of the cryptocurrency industry’s best-known figures and businesses.

Chinese Bitcoin Trader Sues OKCoin Over Alleged Prevention Of BCH Release

A Chinese Bitcoin trader has sued the crypto exchange OKCoin for reportedly not permitting him to withdraw Bitcoin Cash after the Bitcoin forked. A local news agency reported that this is the first legal action in China that involved last year’s fork of Bitcoin. According to the lawsuit, the crypto investor has accused the exchange of blocking him from receiving 38.748 BCH that he was due after Bitcoin’s August 2017 hard fork.

UK Financial Regulator Warns Against Two Crypto “Clone Firms”

The U.K. Financial Conduct Authority (FCA) has warned investors about two so-called “clone” companies this week, i.e. companies that carry out business activities under the pretense that they are a firm registered by the FCA. One clone, Fair Oaks Crypto, allegedly aims to hoodwink potential scam victims by claiming that they represent Fair Oaks Capital. The other named rogue firm, Good Crypto, was giving out “false details or mix[ing] these with some correct details of the registered firm,” which in this case was London-based Arup Corporate Finance.

Best Features

How to Lose $3 Billion of Bitcoin in India

Bloomberg takes its readers through a complex tale of cryptocurrency fraud, alleged extortion, kidnapping, and more involving a series of business partners, policeman, and even a former politician.

Blockchain: A Manifestation of the Borg?

A humorous comparison of how blockchain technology and the fictional alien race featured on the original Star Trek, the Borg, are actually quite similar due to their hive mentalities, strive for perfection, and ability to disrupt. In the author’s words: “The Borg’s catch phrase, ‘Resistance is Futile’, might as well be applied to blockchain.”