Bitcoin Denominations

As we move to crypro, there will be 2 price points on each item you buy, one n fiat money The other in crypto currency.

1 satoshi. Lowest denomination of bitcoin that makes up 100,000,0000 units to make 1btc. If 1 satoshi = 1penny...
submitted by ArtUnicorn to Showerthoughts [link] [comments]

Regulatory Dialogue (and complaints/protests)

Every once in a while I subject myself to reddit and try to post something on here. I think namely that one of the major issues is that reddit just doesn't have an advanced community. The lawyers and finance people are all on crypto twitter. But for the small handful of people who are business savvy here I will at least try to make a point in the interest of overall views and exposure.

Basically everything I chicken littled about on reddit last summer has come true. I made a lot of claims and told people that the Banking Secrecy Act and FATFA would be incredibly terrible. And the reality is I wasn't chicken littling.
I understand the laws and am good at legal research. And all the crypto lawyers will say what I have said. We are largely fucked. Unless we really mass protest and complain at the CFTC and SEC and members of congress, we are going to get bent over a barrel. Wallstreet likes excluding retail, they don't want competition from 'the poors' let's be fucking real, they don't want retail involved because they are making too much money backdoor. It is they who are allowing this, and allowing the US citizen to be excluded from 95% of the crypto ecosystem and subjected to .5% fees on coinbase.

They are already laying the groundwork to go after DEFI developers all over the world extrajudicially and will. There is virtually nothing anyone can do to stop FATF and the DoJ persecuting anyone with an admin key to any smart contract ANY where in the world. They do not fucking care about borders or sovereignty. This is america, we drone strike weddings.
If you have a business, if you are a trader, or any person educated and trained enough in legal and finance to have skin in the game and you aren;t just a reddit 12 year old person hurling insults because you don't have a penny to your name, you need, we need, to heavily heavily involve ourselves in regulator dialouge with the CFTC and SEC.
If non institutional entrepreneur and citizen in America do not start actively pressuring and speaking with the CFTC and SEC we are potentially going to be persona non grata in much of the world for crypto. Especially the CFTC. The obsession that retail has with the SEC is deeply misleading. It is the CFTC that has pushed most of the exclusion. Even if you do not trade derivatives, it will be cited as a reason for why you are being denied services, that is just the reality of the situation.

Moreover, I still believe that they are going to create a parrallel system of white listed and black listed bitcoins, and backdoor wallets and hardware wallets with KYC in the 39 FATF member country. I believe that at least 50 to 70% of the BTC supply is going to be taken out of these FATF countries through blacklisting. They will simply stop letting you cash out non white listed coin with chain analysis proof of history on FATF/G20 countries. Monero won't work, your mixers won't work. If you don't have a chain of custody you will be flagged, and they won't let you withdraw to a "wild" wallet.

They'll find a way to make sure that if you live in those 40 to 50 countries that you will not be able to spend a fucking penny of anonymous crypto, unless it is all under the table between merchants, who of course will be thrown in pentitentiary for violating the BSA as a VASP.
Grown ass adults want to do business, this lowest common denominator shit on reddit and hodl and Defi pie in the sky catch me if you can john mcafee arthur hayes shit is coming to an end-- so either get with the program and get congress to pass things like the Security Clarity Act and Digital Commodity Exchange Act, or get left out and banned from everything.
The rich in america get want they want. They will force this on the world and trade bitcoin on hedgefunds like treasury notes and default credit swaps between the rich without it ever seeing the light of day beyond coinbase, and it'll essentially be a speculative hedge for the mega wealthy, unless the public puts an extreme amount of pressure on US regulators. And frankly everyone outside of the US should put the pressure on US regulators, let's be fucking real people, US regulations on finance are GLOBAL regulations.
submitted by samdane7777 to Bitcoin [link] [comments]

LOEx Market Research Report on August 7: The release of the US dollar is the source of the bull market for gold and Bitcoin

LOEx Market Research Report on August 7: The release of the US dollar is the source of the bull market for gold and Bitcoin
[Today's Hot Tips]

1. [Polkadot Official: The project shall not split DOT until block 1248328 has been denominated]

In the morning of August 7, Polkadot officially released the "Announcement on the Change of the DOT Denomination of the Chinese Ecosystem".

2. [Chief Developer of Bitcoin ABC: Agree to implement the ASERT difficulty adjustment proposal]
On the evening of August 6, the chief developer of Bitcoin ABC, Amuary, published an article introducing the November improvement plan of the Bitcoin ABC full node software:
  1. Agree to implement the "aserti3-2d (ASERT)" proposal proposed by the developer, Jonathan Toomim, which has been supported by most BCH node software;
  2. Add a new coinbase rule, all newly mined blocks must contain an output that will allocate 8% of newly mined tokens to a designated address.
The focus of recent controversy in the BCH community is to improve the difficulty adjustment algorithm (DAA).
3. [Multiple BCH developers jointly declared that they will upgrade the implementation of the ASERT DAA algorithm on November 15]
According to Bitcoincash's news on the evening of August 6, multiple BCH developers jointly declared they will implement the aserti3-2d difficulty adjustment algorithm (ASERT DAA) on the Bitcoin Cash (BCH) chain on November 15, 2020. This algorithm was designed by Mark Lundeberg and implemented by Jonathan Toomim and other developers.
[Today's market analysis]
Bitcoin (BTC)BTC fluctuated upwards slightly in the early morning, rising to 11899 USDT, and fluctuating sharply around 5 o'clock. It fell below 11700 USDT in the short-term and fell to 11616 USDT at its lowest, and then rebounded slightly. At present, BTC is finishing in a narrow range around 11750 USDT. Most mainstream currencies showed a volatile downward trend in the early morning. BTC is currently trading at 11871.9 USDT on LOEx Global, an increase of 0.31% in 24h.
https://preview.redd.it/xj4ba3j2vif51.png?width=554&format=png&auto=webp&s=1d3aa1aa09afbe95ecffa8274e9482df8c89e73c
The price of gold has exceeded $2,000 per ounce. Many people in the currency circle may not understand the significance of the price of $2,000 to the gold market. This was once considered "the gate of never breaking through." Because more than a year ago, many people still thought that gold might be out of the market. In the future, gold will no longer be used as an important asset and currency reserve. Of course, it has been severely beaten now. This price is a bit similar to Bitcoin's original $10,000, but Bitcoin has broken through $10,000 again and again. Gold's $2,000 barrier is much stronger. However, things have changed and a miracle finally happened.
If Bitcoin's rise and fall to this day have nothing to do with the rise and fall of the US dollar as a global reserve currency, then the prospects of Bitcoin can basically be judged as finished. why? Because the value of Bitcoin is supported by the imagination and consensus that it can become a stored-value asset and reserve currency such as gold. Therefore, Bitcoin is related to the strength of the rise and fall of the US dollar, which is the correct development path. Therefore, the devaluation of the US dollar is the source of the bull market for gold and Bitcoin.
Operation suggestions:
Support level: the first support level is 11000 points, the second support level is 10800 integers;
Resistance level: the first resistance level is 12000 points, the second resistance level is 12500 points.
LOEx is registered in Seychelles. It is a global one-stop digital asset service platform with business distribution nodes in 20 regions around the world. It has been exempted from Seychelles and Singapore Monetary Authority (MAS) digital currency trading services. Provide services and secure encrypted digital currency trading environment for 2 million community members in 24 hours.
submitted by LOEXCHANGE to loex [link] [comments]

Medicine is no longer the Meritocracy it once used to be

...because Medicine has been besieged from all sides.
This pandemic has revealed gaping holes in our healthcare system, and no specialty has been spared. Frequently the topic of discussion on this sub, we have mid-level providers undermining the depth of our knowledge and experience while threatening to override our authority through lobbying and legislation. The oversight by the Insurance industry has grown such that we spend more time and effort proving the work we did with our patients in comparison to the work done itself. In the field of Psychiatry, this has come to dictate and limit the scope of treatments we can offer to patients. And from the top we are hounded by Administrative vultures anointed to manage the system “efficiently,” by either increasing revenue or cutting costs - so we're all seeing pay-cuts across the board. The list goes on with many players like the pharmaceutical industry pulling strings from the periphery.
The result is burgeoning liability bestowed upon physicians accompanied by ever-encroaching stress levels, leading to worsening conditions for those lowest in the hierarchy because inevitably “shit rolls downhill.” Thus, competence has been replaced by dominance in this hierarchy. Medical students and Residents – we’ve all been there; some of us are going through the worst of it as we speak. Why? Because it is easy to displace the problem onto those who cannot do anything about it; it is the same reason, for example, we pay inordinate sums for our licensing ($2,045 paid to the ABPN!) – only to crawl out of this hole and chip away at that loan we’ve been indebted to (may your good fortune continue if you have no loans), all in the name of providing a humanitarian service while we acquiesce the deepest of moral injuries (previously known as Burnout). Is it any wonder that medical students and residents receive require so much Wellness?
Did the medical profession bring this upon itself? In some ways it did, by failing to protect – or at least look out for – the innocent and the vulnerable: “You’re seeing how the sausage is made,” some residents were recently told when internal communications leaked in their system. In other ways, by allowing greed to corrupt towards maximizing profits in the Fee-For-Service Care models which, it can be argued, incentivized the recruitment of mid-level providers.
But when we zoom out, a systems level perspective highlights many pain points. If there were only one or two points of failure, the problem could be fixed – but that’s not how systems work. The one common denominator in all of this, and really the entire world, is Money. Money is what makes it all tick. No matter how noble the intentions and pure the motives, this fact is undeniable and so it is best to accept it because only then can we see how the system is fraught with perverse incentives that drive unproductive behaviors and subsequently, undesirable outcomes (highly recommend this for clarity: https://freakonomics.com/podcast/bad-medicine-part-1-story-98-6/).
What can be done about it? We are in the midst of a financial revolution that will bear witness to unprecedented degrees of wealth transfer as the concept of Money itself becomes redefined. Money has now become an idea that can be codified into social contracts executed by computers instead of middlemen, making it far more difficult for bad actors to break rules and cheat the system. As doctors of today and tomorrow, this technology will empower us to design our own kind of Money and restore the sanctity of our profession. But before we can do that, we must understand it. Knowledge gives you power, so it all begins with you.
The first iteration of this technology is Bitcoin. I've done my best to simplify it so at the risk of sounding like a shill for myself, I give you:
What is Bitcoin? A Paradigm Shift: The Trust Revolution
https://www.youtube.com/playlist?list=PLgYEpAvl66ZPpxst4cpayp9bQGhgk8sNw
What is Bitcoin? Evolution of Money
https://www.youtube.com/playlist?list=PLgYEpAvl66ZNnzw998IIYTsNxtpZ9LS5d

Welcome to the Rabbit Hole.
submitted by jagtapper to Residency [link] [comments]

Need GAMBLING money

How flippin pathetic right????
Well, I typically would use BTC for my occasional online gambling, but I definitely can’t afford any real gambling right now.
And fake gambling.... you know, “playing for fun”, just doesn’t quite scratch the itch for me!
However, my regular online casino takes doge as well (Never used it), but it looks like the denomination is a fraction of what BTC bets would be.
Basically, I could gamble minute amounts of real money, instead of uncomfortable amounts lol. (and example: if I were to play most any bets soft slot with bitcoin a spin at the lowest denomination possible would cost about .3 mBTC ($3) per spin... at the lowest!
Where is I could do a spin for a fraction of a penny with dogecoin (it appears)
————————————————————
I realize it’s a pathetic request, but cut me a little slack in the last six months my wife left me, took two kids, my mother died, and I walked away from a business I helped start with nothing in hand basically. Oh yeah, I’m getting evicted. It’s been a horrible year.
Spare me the fractions of pocket change would ya?
submitted by Chaseley1 to dogecoinbeg [link] [comments]

BTC VS BCH

I think something that BCH has going for it over BTC is the fact of the name. The terminology of incorporating "cash" into the name makes people more accepting from the get go. I think from a marketing and psychological perspective people feel more comfortable as it resonates with their old way of doing things, cash. I believe in terms of widespread adoption BCH has an advantage due to this marketing ploy, and when dealing with the masses or lowest common denominator, if we what widespread adoption then we need to target biases. Take the federal reserve for example, in no way is this a federal organization, however the majority of people believe this to be exactly that and have faith and trust in it.
I think this point should be kept in mind. Bitcoin is associated with volatility, get rich kick schemes and vagueness by those we need to adopt it in daily life. I believe these same people will see BCH cash as the "cash version" or " evolution" of bitcoin, something that holds authenticity and authority, that is in some way "cash" or linked/backed by cash. I believe we would be naive to forget about the psychological, emotional and biases held by the people.
Food for thought...
Also, thoughts?
submitted by EyeofHorus777 to btc [link] [comments]

Unpopular opinion: No need for satoshi symbol. Stick with Bitcoin, BTC, and ₿.

What’s being debated is really a deflation-driven re-denomination, but there is lots of precedence for inflation-driven re-denominations:
In a world where satoshis / sats are a useful pricing denomination, it would be clear from context whether denomination is “sats” (new) or “Bitcoin” (old) since there’s eight orders of magnitude difference.
During times of transition (now) there is confusion, but trying to introduce a new named “currency” (since it has a symbol) will only increase that confusion.
Also, I think it’s unclear whether the future “new Bitcoin” denomination should be sats vs bits/μBTC vs mBTC, and if either of the latter are the case, the sats denomination is all the more confusing.
Another analogy would be stock splits. When a company does a e.g. 7:1 stock split, it doesn’t get a new symbol.
My bias is that Bitcoin should be simple for new users and general public, and a new symbol for “sats” feels like a re-branding that dilutes mindshare and increases confusion.
That’s why I think successful re-denominations and stock-splits are useful analogies. As are the perils of re-branding consumer products, with the opposite implication.
Think the best counter-argument (to this unpopular opinion) is that the general public has lots of experience with fractional denominations, with the Latin-derived “cent” being the most common. But even here I think there is trouble because:
  1. While the general public is aware cents, in many countries there are fractional denominations which are only used by specialists and don’t have a symbol. For example in the US the lowest denomination established by law is the “mill” which is one-tenth of a cent and one-thousandth of a USD. Aren’t sats (especially now) more like these specialist denominations?
  2. In most countries, the general public does not use a symbol for “cent”, which is sometimes ¢, and instead just abbreviates the word (“25c.”) or uses a decimal in written contexts (“0.25”).
For everyone passionate about adoption and use of sats, I think it makes more sense to just use “s.” (as an analogue to cents) when working with sats (adding BTC / ₿ if unclear whether you’re talking about Bitcoin), and as Bitcoin use transitions to a new base denomination (whether it is mBTC, bits, or sats), that can become “new Bitcoin” (consensus-driven re-denomination).
EDIT: typos
submitted by colinhb to Bitcoin [link] [comments]

03-17 06:54 - 'BTC VS BCH: Thoughts' (self.Bitcoin) by /u/EyeofHorus777 removed from /r/Bitcoin within 34-44min

'''
I think something that BCH has going for it over BTC is the fact of the name. The terminology of incorporating "cash" into the name makes people more accepting from the get go. I think from a marketing and psychological perspective people feel more comfortable as it resonates with their old way of doing things, cash. I believe in terms of widespread adoption BCH has an advantage due to this marketing ploy, and when dealing with the masses or lowest common denominator, if we what widespread adoption then we need to target biases. Take the federal reserve for example, in no way is this a federal organization, however the majority of people believe this to be exactly that and have faith and trust in it.
I think this point should be kept in mind. Bitcoin is associated with volatility, get rich kick schemes and vagueness by those we need to adopt it in daily life. I believe these same people will see BCH cash as the "cash version" or " evolution" of bitcoin, something that holds authenticity and authority, that is in some way "cash" or linked/backed by cash. I believe we would be naive to forget about the psychological, emotional and biases held by the people.
Thoughts?
Could this come down to a marketing battle someday? When attempting to get mass adoption surely marketing will come in you play...
How could we get bitcoin to be more widely adopted. I've noticed a change already from " digital gold" to " The Currency of the future!"
Thanks! :)
'''
BTC VS BCH: Thoughts
Go1dfish undelete link
unreddit undelete link
Author: EyeofHorus777
submitted by removalbot to removalbot [link] [comments]

03-17 06:54 - 'BTC VS BCH: Thoughts' (self.Bitcoin) by /u/EyeofHorus777 removed from /r/Bitcoin within 37-47min

'''
I think something that BCH has going for it over BTC is the fact of the name. The terminology of incorporating "cash" into the name makes people more accepting from the get go. I think from a marketing and psychological perspective people feel more comfortable as it resonates with their old way of doing things, cash. I believe in terms of widespread adoption BCH has an advantage due to this marketing ploy, and when dealing with the masses or lowest common denominator, if we what widespread adoption then we need to target biases. Take the federal reserve for example, in no way is this a federal organization, however the majority of people believe this to be exactly that and have faith and trust in it.
I think this point should be kept in mind. Bitcoin is associated with volatility, get rich kick schemes and vagueness by those we need to adopt it in daily life. I believe these same people will see BCH cash as the "cash version" or " evolution" of bitcoin, something that holds authenticity and authority, that is in some way "cash" or linked/backed by cash. I believe we would be naive to forget about the psychological, emotional and biases held by the people.
Thoughts?
Could this come down to a marketing battle someday? When attempting to get mass adoption surely marketing will come in you play...
How could we get bitcoin to be more widely adopted. I've noticed a change already from " digital gold" to " The Currency of the future!"
Thanks! :)
'''
BTC VS BCH: Thoughts
Go1dfish undelete link
unreddit undelete link
Author: EyeofHorus777
submitted by removalbot to removalbot [link] [comments]

Help with this math puzzle

Question:There’s is a new colony established on MARS where you arrive. When you arrive you have been given a rupee note which is of the denomination “K”, in other words you have been given a K rupee note. However MARS has its own currency called “Bitcoin”. You can exchange K rupees with three notes of denomination k/2 rupees, k/3 rupees and k/4 rupees (rounded to the nearest lowest integer). And each rupee note can be exchanged with Bitcoin of the same denomination. What is the maximum number of bitcoins you can exchange your K rupees for. For example:If you are given a single 12 rupees note, then it can be exchanged for 6 Rupees (12/2), 4 Rupees (12/3) and 3 Rupees (12/4) = 13 rupees. 13 rupees can be exchanged with 13 bitcoins hence the maximum number of bitcoins you can exchange for 12 rupee note is 13. In the above example 3 rupees when exchange to 1 rupee (3/2), 1 rupee (3/3) and 0 rupee (3/4) = 2 rupees (3 rupees decreases to 2 rupees when broken down so it is not broken) You are always given a single K rupees note. What is the maximum number of bitcoins you can exchange it for?
submitted by uh_me to puzzles [link] [comments]

Wasabi Wallet just did a CoinJoin - with 92 Participants! (Cross Post)

Hey Wasabikas (& Bitcoincers!),
Just thought I would share this with you guys, since it looks like we are all excited about privacy in Bitcoin. Since the recent new release of the Wasabi wallet, the total number of peers that are required for registration is 100, but if more than a couple of hours go by without a CoinJoin, the peers do one anyway. This is quite a big leap from before the update, where Wasabi would wait for 70 peers.
So hopefully we will see some big CoinJoins in the next few days, but the biggest one (I have come across) is this beauty right here:https://blockchair.com/bitcoin/transaction/39f791a562f61a9ad19851429f92ffc45ea2ca18a799dea2738215427c5a30c0
This beast of a CoinJoin had an anonymity set of 92(!) for the lowest denomination of ~0.1 BTC, here are the anon sets for higher denominations: ~0.1 BTC = 92 Participants ~0.2 BTC = 29 Participants ~0.4 BTC = 15 Participants ~0.8 BTC = 8 Participants
If you spot a Wasabi CoinJoin with better numbers than this guy, post them in the comments. If you want, throw a lightning invoice for 1,000 Satoshis and I will happily pay it for your efforts.
Questions encouraged! Have a great day folks. Original post can be found on the wasabi subreddit. wasabiwallet - come check us out!
submitted by iLoveStableCoins to Bitcoin [link] [comments]

Wasabi Wallet just did a CoinJoin - with 92 Participants!

Hey Wasabikas,
Just thought I would share this with you guys, since it looks like we are all excited about privacy in Bitcoin. Since the recent new release of the Wasabi wallet, the total number of peers that are required for registration is 100, but if more than a couple of hours go by without a CoinJoin, the peers do one anyway. This is quite a big leap from before the update, where Wasabi would wait for 70 peers.
So hopefully we will see some big CoinJoins in the next few days, but the biggest one (I have come across) is this beauty right here: https://blockchair.com/bitcoin/transaction/39f791a562f61a9ad19851429f92ffc45ea2ca18a799dea2738215427c5a30c0
This beast of a CoinJoin had an anonymity set of 92(!) for the lowest denomination of ~0.1 BTC, here are the anon sets for higher denominations: ~0.1 BTC = 92 Participants ~0.2 BTC = 29 Participants ~0.4 BTC = 15 Participants ~0.8 BTC = 8 Participants
If you spot a Wasabi CoinJoin with better numbers than this guy, post them in the comments. If you want, throw a lightning invoice for 1,000 Satoshis and I will happily pay it for your efforts.
Questions encouraged! Have a great day folks.
submitted by iLoveStableCoins to WasabiWallet [link] [comments]

Craig Wright is a Fool

I'm not even invested in Bitcoin Cash, so when I dug into this issue, I didn't actually expect to get angry about it - but it makes me angry.

This post isn't about Bitcoin ABC being right, either. There have been some solid counterpoints to their proposals.

My Issue With Craig Wright

My beef is with how Craig Wright is going about this entire situation. His incendiary posts on Twitter are unprofessional at best and childish. They are counter-productive and they appeal to the lowest common denominator in the Bitcoin Cash community. This is also one of the key reasons for why BCHSV is trading at a fraction of the price of the Bitcoin ABC version on Poloniex (not sure why they'd be dumb enough to host the coin split anyway; its reckless and dangerous in this situation).

Another major issue that I have is with the outright lies that Craig Wright has told. He stated in one of this tweets that Bitcoin ABC is trying to convince everyone that "Bitcoin is broken" and that's not the case at all. They simply proposed a host of upgrades to the protocol (the majority of which BCHSV themselves had supported earlier THIS year).

If Craig Wright disagrees with the ABC proposal, that's fine - there's no problem with that. But publicly stating that you wish to initiate a series of actions that you believe will ultimately reorganize a planned protocol hard fork is reckless and stupid, on a public level.

The goal of Bitcoin Cash is to be an instantaneous payment system, right? Well, guess what - when November 15th rolls around *most people won't be transacting with Bitcoin Cash*. Why? Because there's an inherent 'risk' in doing so. In my opinion, that's one of the biggest issues with what's going on. It actually screws *every user* on the Bitcoin Cash protocol because of the uncertainty involved in the situation and it ultimately hurts the image of the coin and erodes community trust in its efficacy.

Here's the Reality

Bitcoin Cash already gets a bad rap from the outsized Bitcoin Core community. Whether you like it or not or agree with it (which I know most people here don't), that's the reality of the situation.

We also know that the goal of this community is to reach worldwide adoption and be acknowledged as the true version of Bitcoin.

This seems counterintuitive to that goal. I'm confident that Craig Wright could have went about this in a different way that wouldn't have resulted in a contentious hard fork. Even Roger Ver admits that the point of contention here is nowhere near what warrants a hard fork. This is not like the 2017 hard fork that created $BCH. Instead, this is a contentious hard fork that has essentially derailed the protocol entirely.

submitted by Randomshortdude to btc [link] [comments]

Consensus Network EP36: Buy, Borrow and Die: Bitcoin Style

Catch the full episode: https://www.consensusnetwork.io/podcastepisodes/2019/10/5/ep36-buy-borrow-and-die-bitcoin-style-1
Buck: Welcome back to the show everyone. Today my guest on Wealth Formula Podcast is Zack Prince. He's Founder and CEO of BlockFi. BlockFi bridges the gap between blockchain and the basic financial products that you're used to including interest-bearing accounts and loans. Zack, welcome to Wealth Formula Podcast. I think you we might have had you on before as a Consensus Network replay but first time on Wealth Formula Podcast specifically, so welcome.
Zac: Yeah, excited to be here, Buck. Thanks for having me. And it's good to chat with you again
Buck: Yeah so remind me how you got into this you know Bitcoin stuff in the first place, I mean you were as I understand you were a traditional finance guy right so where did the blockchain part come in?
Zac: Sure so I was I was working at a company in the FinTech world that provided data and technology solutions to institutional investors that wanted to participate in some of the new online lending platforms, whether they were real estate platforms or consumer lending platforms, and I kind of became the FinTech guy amongst my friend group and people would ask me you know should I invest in these real estate deals on fund rise or buy loans from Lending Club and I started writing a blog to share the information more efficiently with my friends basically and I started expanding a little bit writing about Robo advisory and some other things that were going on in the FinTech space and that's what led me to Bitcoin, and this is back in early 2015. I didn't start BlockFi until 2017 because I started following the market in the background, still working in traditional financial services in FinTech and then in early 2017 it started to feel like mainstream adoption was starting to happen in the crypto ecosystem. I'm started going to some meetups in New York City because at a certain point my wife said Zac, you're talking about crypto all the time and you're talking to me about it and I don't want to talk about it so you should find some other people to talk about this with. And the meetup composition started to change and in 2016 when I started going to these meetups it was the early crypto adopters you know libertarians, computer scientists and then in early 2017 I started to see some venture capitalists, some guys who had just left their job at Wall Street still wearing a suit, some more entrepreneurs and it was a really exciting time in the ecosystem, things like the Enterprise Ethereum Alliance were getting announced which had participation microsoft and a lot of other you know fortune 500 companies and I had started to believe in it. I was drinking the kool-aid a little bit so I decided to find a way to get involved in the space full-time and that's what led me to start BlockFi.
Buck: So I have to imagine that the response you got from the traditional finance people around that time when you started talking about the blockchain space and when you started being more and more involved with that was probably not a very positive response initially or did you did you experience some of that sort of you know rejection initially to what you were doing?
Zac: Yeah absolutely. But you know throughout my career this is now kind of the third emerging technology industry that I've worked in. I was originally an advertising technology starting like you know 15 years ago and I was in FinTech specifically the online lending side of FinTech which in its early days was called peer-to-peer lending and now in crypto. So having to do a lot of education explain it you know why something isn't crazy and it might work and here's why and here's the value proposition and here's what it is, I've gotten very used to that and comfortable with it. But yeah there were a lot of people who are like you know I've heard Bitcoin is only used by drug dealers and money launderers. I've heard that I'm supposed to care about blockchain and not Bitcoin. And you know at BlockFi we’re providing financial products into the market so it's a heavily regulated business so we also had to communicate with regulators. We had to explain to state regulators, federal regulators why what we were doing with Bitcoin and other cryptos than when you're doing these same types of things with assets that they're more familiar with.
Buck: So when you were talking to people back in, I don't know I guess 2016/17 and it's not a long time ago, it's only two years ago, but I have to imagine that the response or the you know the approach that people take to you when you speak to investors is very different. Has it become more mainstream in that regard for you know for big money investors?
Zac: It's absolutely become more mainstream you know the end of 2017 Q3/Q4. Point was going on that parabolic run it started to get covered everywhere, I mean it was on CNBC every day it was in Bloomberg New York Times Wall Street Journal. If you were paying attention to the financial industry and markets you heard about Bitcoin at that time if you hadn't heard about it before. So from a baseline of awareness perspective it got a lot better and then in 2018 you had a number of positive developments for the sector including one that I think is probably the most noteworthy which is that Bitcoin futures were listed on the CME the institutional investor perspective that's massive. You now have a well regulated well known super trustworthy venue where you can get exposure to this asset class, you also had companies like Grayscale bringing products to the market which are accessible to certain types of investors and their low bridge accounts and you started to see some adoption from companies like FinTech companies like Robin Hood and Square making Bitcoin available on their platforms. So the conversation has absolutely changed a lot and it's become less about whether or not this is something that's going to continue to exist whether or not it's something that was just a bubble and is going to die and now it's more about ok how is it going to get used how big could it get what are the interesting applications of it and what could have potentially disrupt in the traditional financial ecosystem.
Buck: So you know we had obviously following this you know pop in 2017, you know I actually like you kind of really got into this early 2017 so timing was pretty good I guess now regards. Good or bad depending how you look at it but I was there before before the parabolic move. And then we have you know then we followed this up with a crypto winter and and you know who knows if we're done with it, I guess we certainly are much better off than we were. You know a unit buddy it's funny Zac I don’t know if you remember this but I was about to, we'll talk about BlockFi specifically in a minute but, I was about to use BlockFi for borrowing because I like this idea of borrowing you know collateralized debt and collateralized debt on assets and buying something else. So I was about to do it and then Bitcoin lost a clip and I was like literally and I remember I was just emailing with somebody somebody over there and I was like sorry dude I guess I just sold it, I just sold all that Bitcoin I had and you sent one email back to me and it said “capitulation” but it you know and so now we're looking back at these we go down from 3,000 back up you know been sort of flirting around this 10,000 and it seems like we're kind of maybe that we're stuck there, maybe we're kind of out of winter, maybe we're in a holding pattern but it seems like to me that since that two years not only is the awareness increase but the development of the ecosystem itself is so much further advanced than it was in 2017. Is this an unusual case where the technology and maybe even the infrastructure is actually outpacing the price?
Zac: You know it's really hard to say. I would argue that in some ways it's typical. In other industries that showed a lot of promise where investors could you know participate maybe a little bit ahead of the adoption curve you saw crazy price run ups with the tech bubble and you know ‘99-2000 being the one that's kind of top of mind in recent memory and then on the other side of things, are we behind where the price should be now? It's really hard to say because this is kind of like a commodity type asset built on a payment network and valuing that is challenging and there's not a perfect model for for doing it today. It's not as easy as something that's cashflow producing but I'm incredibly bullish. I'm on record as saying at the beginning of this year that Bitcoin has only had one year in its 10-year existence where it had a lower low than the year before and parted this year around the low price for 2018 and I predicted that we would in the year had a higher price than where we started the year pretty soon and now we're up and you know around 300 percent from where we started the year. As that happens in investing is people frequently look at things on a year-to-year performance basis and when people are looking at Bitcoin even if all we do is stay around 10 K from here when they're looking at how Bitcoin performed rather than other relative to other assets at the end of 2019 it's probably going to look fantastic. And you also have an event coming up and in the summer of next year called The Halvening where basically the supply that's produced by miners is going to get cut in half and so if you believe in the stock the flow type models of valuation for Bitcoin that is usually a very big driver of price appreciation.
Buck: I believe May of 2020, right?
Zac: That's right.
Buck: In May of 2020. Can you just talked a little bit about that just so people know because people hear about it, I've been talking about it but I don't think that it really explained it.
Zac: Yeah and you know I'm not I'm not a computer scientist so I can explain it in a you know in a very simple…
Buck: No one else here is either.
Zac: So basically the way that new Bitcoin is created is through this process called mining. And it's analogous to mining gold except instead of finding a place in the earth where gold exists and then getting your trucks and mining equipment and digging it out of the ground, the way bitcoin is mined is using this computer program and there is now specialized computer hardware that's built specifically and optimized for mining Bitcoin. And you have this network of machines around the world where the input is energy into the mining hardware and the output is new Bitcoin and those miners are what provides the power for the payment network a Bitcoin to run and when we say that there is this event called The Halvening, what that basically means is that the output that's built into the Bitcoin program that the miners are receiving as their payment for contributing energy to the network, is going to get cut in half. So the miners are going to have the same you know relative input but the amount that they're receiving is going to get cut in half for that input. This should, if the demand side for Bitcoin remains equal, it should drive up the price and historically Bitcoin has had three of these Halvening events in its lifetime so far I believe and around each Halvening you have seen you know six months before or six months after a pretty material run up in price.
Buck: Yeah so it also goes along with that sort of that the entire idea that Bitcoin unlike you know other assets including gold is it's a deflationary asset ultimately and and that's one of the things that makes that happening really significant. Apart from and I have one more question before we get to block five which is apart from the Halvening, you know thing that's happening, what is maybe the biggest development or upcoming thing that's coming up that makes you the most bullish on the future of Bitcoin or blockchain in general?
Zac: Sure so I think I wouldn't actually point to any one specific thing, I would point to two broad trends. So one is institutional adoption and participation in the asset class and the other is better ramps for retail participation into the asset class and just focusing here you know on the US market because it really is an international story but just in the US market. In September we should have Bakkt launching their futures platform. Bakkt is owned by ICE, the Intercontinental Exchange, and there's a big core difference between their futures and the current futures that are available on the CME in that futures on Bakkt platform are going to be physically settled so that means that actual Bitcoin is going to be needed to facilitate the trading on Bakkt’s platform which does not happen on CMEs exchange so that's that should be a very positive catalyst in terms of demand for physical Bitcoin that could have an impact on the price. Also on the institutional side this year I believe earlier this year, the first pension fund made an investment into an asset management vehicle that was focused on investing in Bitcoin and private equity opportunities in the Bitcoin and blockchain sector. So that will be a trend.
Buck: Which pension fund was it?
Zac: It was in North Carolina so I think it was like the North Carolina Firefighters and the group that raised the money from them was Morgan Creek Digital it’s actually invested in BlockFi by Anthony Pompliano Twitter and Mark Yusko so that's on the institutional side. And then on the retail side you've seen FinTech companies like Square and Robin Hood offer Bitcoin trading to their users. But soon you will also have companies like TD Ameritrade E-Trade and others offer Bitcoin to their users sometimes be a partnership sometimes because they've built it directly. You also at some point might see progress made in terms of an ETF getting approved that would give retail investors in the US market exposure to Bitcoin in a really easy and familiar way. All of those things are tremendously positive catalysts and the caliber of people working on them only continues to increase. Talent was attracted into the sector very, very rapidly these days.
Buck: You know one question that leads me to is that all of this is happening with Bitcoin for the most part. Are alt coins in your opinion is that market coming back or is that something that we're gonna see probably select you know group of tokens projects emerge and then the rest will kind of just get left in the dust, what do you think?
Zac: I mean I'll tell you exactly what I'm doing with my portfolio and then I'll provide a bit more color. So my asset allocation in the crypto side of my investing is I'm like 90% Bitcoin 5% Ethereum and 5% B&B; which is the Binance right. So I'm super bullish on Bitcoin. I think that you know there's a chance that Ether makes a comeback specifically I think that a lot of the stable coins that have been launched have been built on Ethereum if you're not familiar with stable coins it's basically the concept of a dollar but on a blockchain which could be really really powerful because it creates the opportunity for the delivery of US dollar denominated financial services at a global scale not using the traditional banking rails. And then B&B; I mean Binance is the biggest and most successful exchange they have a history of innovating, creating new products, going fast and so I'm taking a bit of a flyer with them but I'm 90% Bitcoin. I don't think that I'm not bullish on any of the other all coins frankly I struggle to see you know the big upside I have heard whispers in the community that there's kind of like a new wave of altcoins 3.0 might emerge, you know could see some some good returns similar to what some of the ICOs did in 2017 but it's not an area of focus for me. So that's my view.
Buck: Yeah let's talk about BlockFi. Remind us exactly what BlockFi is.
Zac: Sure so we're a wealth management platform for crypto investors. Today we have two products that we offer. One product is analogous to a savings account from a traditional bank where you're able to earn interest on your holdings except on BlockFi, the assets instead of being dollars are bitcoin and Ether and we don't have FDIC insurance so it's not exactly the same risk profile as a savings account at a bank, but conceptually you're able to hold Bitcoin and an account with BlockFi and earn interest on it paid in Bitcoin every month. That's one product that we have. The second product that we have which you are alluding to earlier offers our clients the ability to borrow dollars secured by the value of their cryptocurrency and it's analogous to a securities backed loan or a liquidity access line in the traditional world except instead of securities we're taking Bitcoin or other digital assets as collateral and lending it rates as low as four point five lending USD that rates as low as four point five percent a year.
Buck: I wanna pick these apart a little bit if you don't mind. In terms of this savings account first of all is it just bitcoin or is it bitcoin, Ethereum?
Zac: We actually support three assets in the interest account currently Bitcoin, Ether and GUSD which is the stable coin from Gemini.
Buck: Got it. And talk about the interest because it's not one flat interest rate right it's different depending on how much cryptocurrency actually is held?
Zac: Correct so there's a tiered interest rate structure. Currently on Bitcoin for balances up to ten Bitcoin, we offer a six point two percent annual yield and for balances above ten Bitcoin it's a 2.2 percent annual yield. On Ether, for balances up to two hundred Ether it's a 3.3 percent annual yield and balances above two hundred Ether is 0.5% annual yield and for GUSD the stable coin it's an eight point six percent interest rate with no tier so yeah those are the different rates.
Buck: Why did, I mean was it just a matter of like an issue with people dumping like a thousand Bitcoin and trying to get six you know 6% of that, was it just too hard to you know make that a long-term part of the business model or why did the higher levels end up changing to a lower rate?
Zac: Sure so I wanted to function of market conditions and to it's a function of supply and demand. So we launched the interest account in March of this year. We were just starting to come out of the bear market and one of the things that happened as we switched from being in a bear market to being in a bull market is the futures switched from being in backwardation to contango which basically means that our institutional borrowers the groups that we lend to that enable us to pay the rate to depositors had less of a need they had less demand to borrow and they were willing to pay lower rates to borrow crypto than they were when we were building and planning to launch this product. The second thing that happened is we were surprised to the upside in terms of the level of interest that we received from depositors and especially depositors with very large sums of cryptocurrency. So to give you an example you know within a day or two of making the product available publicly, we had a number of groups that were depositing 5, 10, 15, 20 million dollars worth of Bitcoin and so the supply-demand that we have to manage is, the amount that we have on deposit relative to the size of this market that will borrow Bitcoin size of the market that will borrow Bitcoin is partially a function of market sentiments partially a function of number of trading venues and the liquidity profile and it's partially a function of you know BlockFi’s efforts in terms of sales and client development relationship management. So the supply side got a little bit ahead of the demand side on deposit and how much there was available to borrow so we made a few tweaks. We want to keep the 6%, 6.2% rate on Bitcoin available to as many people as possible for as long as possible so that's why we went with the tiered structure where we made it available on balances up to 10 and reduced it for balances above that.
Buck: Got it and the interest on that, when you say 6.2 percent that six point like it's all denominated in Bitcoin, you're not paying cash out right?
Zac: Correct so to use round numbers to provide an easy example you start on January first with a hundred Bitcoin in an account, by the subsequent January first you will have 106 point 2 Bitcoin in your account.
Buck: Yeah and that that's kind of neat too because then you're you know you're also getting potentially the upside of that you know I mean they made 6% but if you if you're really bullish on the market you could be potentially looking at a lot more than 6% on your money. How about in terms of the, is there like a you know do you do it sort of a month-to-month or six month or month you know year-long contracts for these things?
Zac: It's month-to-month. So the rates are subject to change on a monthly basis. We provide notifications at least a week in advance before the end of one month on what the rates will be for the subsequent month and people are able to you know withdraw any time without penalty. We reserve up to 7 days to process withdrawals but we've never taken more than one business day to process a withdrawal so they're pretty quick but not instant for security reasons and yeah it's pretty flexible.
Buck: How about the lump in the lending side how does how does that work? So now I've got like 10 Bitcoin and so I would deposit that I guess and you guys I understand that maybe that that goes into like a Gemini account or something, is that still how it works?
Zac: Correct so we have a partnership with Gemini for custody. So when you log into a BlockFi account you'll have a deposit address. When you send Bitcoin to that deposit address it actually goes directly into storage with Gemini. Gemini was the first custodian in the crypto sector to receive insurance against cyber hacks on their platform. They were also the first custodian to get to complete a SOC 2 compliance audit and they have a really long track record of custody billions of dollars worth of crypto without ever having any issues. So it goes directly to Gemini and then you're able to interact with block-wise platform to take any actions that you might deem necessary. So you can view your interest payments you can withdraw you can deposit more you can also take out a loan. So in terms of taking out a loan, if you have ten Bitcoin that's worth roughly a hundred thousand US dollars at this point in time, you can borrow up to fifty percent of that value in a US dollar loan which can be funded be a wire or stable coin and then the structure of those loans is that you make interest-only payments on the amount that you borrowed throughout the duration and you can prepay at any time without penalty.
Buck: And what's the typical you said it was four point six.
Zac: We have interest rates as low as four point five. The interest rates on borrowing USD vary according to your initial loan to value ratio. So if you have a hundred thousand dollars worth of Bitcoin we actually have three loan-to-value ratio options. You can borrow at a 50 percent initial loan-to-value ratio which would mean you're borrowing 50k, the interest rate on that will be eleven point two five, if you borrow thirty five percent of the value so 35k the interest rate is seven point nine, and if you borrow twenty five percent of the value of the interest rate is four point five percent per year.
Buck: Got it. In terms of you know the technical, so you basically pay that on a month-to-month basis and then in terms of contracts, are those also month-to-month loans or how does that work?
Zac: Those are one-year term loans well now it's the ability to renew without repaying the principal at the end of the term at current rates and our rates for those loans have always come down so far. So it's a one-year term loan BlockFi committed for a year at that rate your payments stay the same but you can prepay at any time without penalty.
Buck: Right. When do you do when would you do an actual sort of I guess a cap will call like what loan-to-value because you can go up to say you're borrowing at you know you're borrowing at the lowest rate you know you're at 4.5% you're borrowing see you know just for round numbers 100 Bitcoin you borrowed or you said 10 Bitcoin hundred thousand dollars but you only borrowed twenty-five thousand dollars at four point five percent, what if Bitcoin you know loses 50 percent of its value then what happens?
Zac: Well you wouldn't have a margin call based on on that example. If your loan to value ratio hits 70 percent that's when we have a margin call and the way the margin call works is our clients have the option to either post more collateral, pay down the loan using USD or some of the collateral that's posted for the loan or take no action. If they take no action there's a 72-hour window where we'll wait to see if the price recovers, if it does then no action is required, if the price keeps going down further then we will initiate a partial collateral sale to rebalance that LTV to a healthy level at the end of that window.
Buck: So in terms of the clients that you see doing this kind of stuff, I mean who are you seeing borrowing because you don't have a cap I mean you can on the borrow side, I mean and the rates don't really change like if you're depositing a hundred Bitcoin you're getting the same rate differences as somebody who's depositing ten for borrowing right?
Zac: That's right.
Buck: So who are the people who are putting I mean what are these businesses that are putting are using these loans who are the typical clients?
Zac: Sure so it's a mix of retail and corporate. On the retail side we actually did a survey recently on use cases and the number one use case about a third of our borrowers expressed is that they were using the funds that they borrowed to start a business, which we were really excited about. So the other popular use cases were investing in real estate, investing in other types of traditional assets like stocks and bonds, home improvement, larger purchases, vacations were all used cases, paying down higher cost debt was another use case, and then on the corporate side the loans are used for operating capital. So we have some mining companies that borrow from BlockFi. Other types of companies who you know maybe have crypto denominated inventory like exchanges or crypto ATM businesses our frequent borrowers from BlockFi and our loan sizes rearranged from you know as low as five thousand dollars all the way up to seven figures. So it's a pretty diverse group of borrowers.
Buck: So recently it sounds like you guys partnered with another company called Casa. What is Casa and I guess how does that benefit both companies?
Zac: Sure. So Casa is a leader in fighting self sovereign storage solutions for cryptocurrency owners so if you're alone that owns Bitcoin and to use a gold analogy. If you want to own gold but you keep it in your vault or in your backyard you want to have physical possession of it yourself if you want to do that same type of custody with Bitcoin. Casa has a solution that makes that really easy. Our partnership with Casa provides mutual benefits to clients on either side. So Casa clients are able to receive some discounts in terms of accessing BlockFi products and vice-versa BlockFi clients are able to receive discounts in terms of accessing kasam products and over time we'll build some things in to the user experience specifically on Casa’s platform that will make it you know a bit more seamless to interact with BlockFi products while you're on their platform. In general that partnership strategy is something that you'll see more of we think there are in the ecosystem that are specializing in areas that BlockFi's not focused on and doing things where we can provide benefits to clients on both sides is a win-win for us then and our clients.
Buck: Last thing I want to ask you about, last time I spoke to you, you had talked about the idea of potentially Bitcoin backed credit cards meaning like you know getting Bitcoin back instead of miles or dollars back. You guys any closer to that, because I definitely want one of those cards.
Zac: I'm so glad you brought it up. We're definitely closer, but we're not you're not going to have the card until like Q3 of next year probably. It's getting worked on, these things you know for better or worse they take a long time launching a credit program is no small feat you know we're working on it. We've identified some of the key partners that we'll be working with to bring that product to market it is going to happen and I share your sentiment like I wish I had it now.
Buck: Yeah seriously that'd be great. Well listen it was great talking you. So it's BlockFi.com and it's spelled like block and then fi and tell us you know tell us the process of doing is pretty simple okay how long does it take to apply for these things…
Zac: Yeah I mean nothing takes any time really. So you could come in and start earning interest and get a loan from us all in under five minutes. And we also have a client service team that's super responsive in in terms of communication however you want to communicate with them, over email, over the phone, over text message so you know don't don't hesitate to reach out to us. We're also on twitter. My twitter handle is BlockFiZac and our company twitter handle is @therealBlockFi so we're very active on those platforms and happy to chat with you there as well.
Buck: Zac Prince, thank you very much for being on Wealth Formula Podcast today.
Zac: Thanks for having me, Buck, I appreciate it.
Buck: We’ll be right back.
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Wealth Formula Episode 179: Buy, Borrow and Die: Bitcoin Style

Catch the full episode: https://www.wealthformula.com/podcast/179-buy-borrow-and-die-bitcoin-style/
Buck: Welcome back to the show everyone. Today my guest on Wealth Formula Podcast is Zack Prince. He's Founder and CEO of BlockFi. BlockFi bridges the gap between blockchain and the basic financial products that you're used to including interest-bearing accounts and loans. Zack, welcome to Wealth Formula Podcast. I think you we might have had you on before as a Consensus Network replay but first time on Wealth Formula Podcast specifically, so welcome.
Zac: Yeah, excited to be here, Buck. Thanks for having me. And it's good to chat with you again
Buck: Yeah so remind me how you got into this you know Bitcoin stuff in the first place, I mean you were as I understand you were a traditional finance guy right so where did the blockchain part come in?
Zac: Sure so I was I was working at a company in the FinTech world that provided data and technology solutions to institutional investors that wanted to participate in some of the new online lending platforms, whether they were real estate platforms or consumer lending platforms, and I kind of became the FinTech guy amongst my friend group and people would ask me you know should I invest in these real estate deals on fund rise or buy loans from Lending Club and I started writing a blog to share the information more efficiently with my friends basically and I started expanding a little bit writing about Robo advisory and some other things that were going on in the FinTech space and that's what led me to Bitcoin, and this is back in early 2015. I didn't start BlockFi until 2017 because I started following the market in the background, still working in traditional financial services in FinTech and then in early 2017 it started to feel like mainstream adoption was starting to happen in the crypto ecosystem. I'm started going to some meetups in New York City because at a certain point my wife said Zac, you're talking about crypto all the time and you're talking to me about it and I don't want to talk about it so you should find some other people to talk about this with. And the meetup composition started to change and in 2016 when I started going to these meetups it was the early crypto adopters you know libertarians, computer scientists and then in early 2017 I started to see some venture capitalists, some guys who had just left their job at Wall Street still wearing a suit, some more entrepreneurs and it was a really exciting time in the ecosystem, things like the Enterprise Ethereum Alliance were getting announced which had participation microsoft and a lot of other you know fortune 500 companies and I had started to believe in it. I was drinking the kool-aid a little bit so I decided to find a way to get involved in the space full-time and that's what led me to start BlockFi.
Buck: So I have to imagine that the response you got from the traditional finance people around that time when you started talking about the blockchain space and when you started being more and more involved with that was probably not a very positive response initially or did you did you experience some of that sort of you know rejection initially to what you were doing?
Zac: Yeah absolutely. But you know throughout my career this is now kind of the third emerging technology industry that I've worked in. I was originally an advertising technology starting like you know 15 years ago and I was in FinTech specifically the online lending side of FinTech which in its early days was called peer-to-peer lending and now in crypto. So having to do a lot of education explain it you know why something isn't crazy and it might work and here's why and here's the value proposition and here's what it is, I've gotten very used to that and comfortable with it. But yeah there were a lot of people who are like you know I've heard Bitcoin is only used by drug dealers and money launderers. I've heard that I'm supposed to care about blockchain and not Bitcoin. And you know at BlockFi we’re providing financial products into the market so it's a heavily regulated business so we also had to communicate with regulators. We had to explain to state regulators, federal regulators why what we were doing with Bitcoin and other cryptos than when you're doing these same types of things with assets that they're more familiar with.
Buck: So when you were talking to people back in, I don't know I guess 2016/17 and it's not a long time ago, it's only two years ago, but I have to imagine that the response or the you know the approach that people take to you when you speak to investors is very different. Has it become more mainstream in that regard for you know for big money investors?
Zac: It's absolutely become more mainstream you know the end of 2017 Q3/Q4. Point was going on that parabolic run it started to get covered everywhere, I mean it was on CNBC every day it was in Bloomberg New York Times Wall Street Journal. If you were paying attention to the financial industry and markets you heard about Bitcoin at that time if you hadn't heard about it before. So from a baseline of awareness perspective it got a lot better and then in 2018 you had a number of positive developments for the sector including one that I think is probably the most noteworthy which is that Bitcoin futures were listed on the CME the institutional investor perspective that's massive. You now have a well regulated well known super trustworthy venue where you can get exposure to this asset class, you also had companies like Grayscale bringing products to the market which are accessible to certain types of investors and their low bridge accounts and you started to see some adoption from companies like FinTech companies like Robin Hood and Square making Bitcoin available on their platforms. So the conversation has absolutely changed a lot and it's become less about whether or not this is something that's going to continue to exist whether or not it's something that was just a bubble and is going to die and now it's more about ok how is it going to get used how big could it get what are the interesting applications of it and what could have potentially disrupt in the traditional financial ecosystem.
Buck: So you know we had obviously following this you know pop in 2017, you know I actually like you kind of really got into this early 2017 so timing was pretty good I guess now regards. Good or bad depending how you look at it but I was there before before the parabolic move. And then we have you know then we followed this up with a crypto winter and and you know who knows if we're done with it, I guess we certainly are much better off than we were. You know a unit buddy it's funny Zac I don’t know if you remember this but I was about to, we'll talk about BlockFi specifically in a minute but, I was about to use BlockFi for borrowing because I like this idea of borrowing you know collateralized debt and collateralized debt on assets and buying something else. So I was about to do it and then Bitcoin lost a clip and I was like literally and I remember I was just emailing with somebody somebody over there and I was like sorry dude I guess I just sold it, I just sold all that Bitcoin I had and you sent one email back to me and it said “capitulation” but it you know and so now we're looking back at these we go down from 3,000 back up you know been sort of flirting around this 10,000 and it seems like we're kind of maybe that we're stuck there, maybe we're kind of out of winter, maybe we're in a holding pattern but it seems like to me that since that two years not only is the awareness increase but the development of the ecosystem itself is so much further advanced than it was in 2017. Is this an unusual case where the technology and maybe even the infrastructure is actually outpacing the price?
Zac: You know it's really hard to say. I would argue that in some ways it's typical. In other industries that showed a lot of promise where investors could you know participate maybe a little bit ahead of the adoption curve you saw crazy price run ups with the tech bubble and you know ‘99-2000 being the one that's kind of top of mind in recent memory and then on the other side of things, are we behind where the price should be now? It's really hard to say because this is kind of like a commodity type asset built on a payment network and valuing that is challenging and there's not a perfect model for for doing it today. It's not as easy as something that's cashflow producing but I'm incredibly bullish. I'm on record as saying at the beginning of this year that Bitcoin has only had one year in its 10-year existence where it had a lower low than the year before and parted this year around the low price for 2018 and I predicted that we would in the year had a higher price than where we started the year pretty soon and now we're up and you know around 300 percent from where we started the year. As that happens in investing is people frequently look at things on a year-to-year performance basis and when people are looking at Bitcoin even if all we do is stay around 10 K from here when they're looking at how Bitcoin performed rather than other relative to other assets at the end of 2019 it's probably going to look fantastic. And you also have an event coming up and in the summer of next year called The Halvening where basically the supply that's produced by miners is going to get cut in half and so if you believe in the stock the flow type models of valuation for Bitcoin that is usually a very big driver of price appreciation.
Buck: I believe May of 2020, right?
Zac: That's right.
Buck: In May of 2020. Can you just talked a little bit about that just so people know because people hear about it, I've been talking about it but I don't think that it really explained it.
Zac: Yeah and you know I'm not I'm not a computer scientist so I can explain it in a you know in a very simple…
Buck: No one else here is either.
Zac: So basically the way that new Bitcoin is created is through this process called mining. And it's analogous to mining gold except instead of finding a place in the earth where gold exists and then getting your trucks and mining equipment and digging it out of the ground, the way bitcoin is mined is using this computer program and there is now specialized computer hardware that's built specifically and optimized for mining Bitcoin. And you have this network of machines around the world where the input is energy into the mining hardware and the output is new Bitcoin and those miners are what provides the power for the payment network a Bitcoin to run and when we say that there is this event called The Halvening, what that basically means is that the output that's built into the Bitcoin program that the miners are receiving as their payment for contributing energy to the network, is going to get cut in half. So the miners are going to have the same you know relative input but the amount that they're receiving is going to get cut in half for that input. This should, if the demand side for Bitcoin remains equal, it should drive up the price and historically Bitcoin has had three of these Halvening events in its lifetime so far I believe and around each Halvening you have seen you know six months before or six months after a pretty material run up in price.
Buck: Yeah so it also goes along with that sort of that the entire idea that Bitcoin unlike you know other assets including gold is it's a deflationary asset ultimately and and that's one of the things that makes that happening really significant. Apart from and I have one more question before we get to block five which is apart from the Halvening, you know thing that's happening, what is maybe the biggest development or upcoming thing that's coming up that makes you the most bullish on the future of Bitcoin or blockchain in general?
Zac: Sure so I think I wouldn't actually point to any one specific thing, I would point to two broad trends. So one is institutional adoption and participation in the asset class and the other is better ramps for retail participation into the asset class and just focusing here you know on the US market because it really is an international story but just in the US market. In September we should have Bakkt launching their futures platform. Bakkt is owned by ICE, the Intercontinental Exchange, and there's a big core difference between their futures and the current futures that are available on the CME in that futures on Bakkt platform are going to be physically settled so that means that actual Bitcoin is going to be needed to facilitate the trading on Bakkt’s platform which does not happen on CMEs exchange so that's that should be a very positive catalyst in terms of demand for physical Bitcoin that could have an impact on the price. Also on the institutional side this year I believe earlier this year, the first pension fund made an investment into an asset management vehicle that was focused on investing in Bitcoin and private equity opportunities in the Bitcoin and blockchain sector. So that will be a trend.
Buck: Which pension fund was it?
Zac: It was in North Carolina so I think it was like the North Carolina Firefighters and the group that raised the money from them was Morgan Creek Digital it’s actually invested in BlockFi by Anthony Pompliano Twitter and Mark Yusko so that's on the institutional side. And then on the retail side you've seen FinTech companies like Square and Robin Hood offer Bitcoin trading to their users. But soon you will also have companies like TD Ameritrade E-Trade and others offer Bitcoin to their users sometimes be a partnership sometimes because they've built it directly. You also at some point might see progress made in terms of an ETF getting approved that would give retail investors in the US market exposure to Bitcoin in a really easy and familiar way. All of those things are tremendously positive catalysts and the caliber of people working on them only continues to increase. Talent was attracted into the sector very, very rapidly these days.
Buck: You know one question that leads me to is that all of this is happening with Bitcoin for the most part. Are alt coins in your opinion is that market coming back or is that something that we're gonna see probably select you know group of tokens projects emerge and then the rest will kind of just get left in the dust, what do you think?
Zac: I mean I'll tell you exactly what I'm doing with my portfolio and then I'll provide a bit more color. So my asset allocation in the crypto side of my investing is I'm like 90% Bitcoin 5% Ethereum and 5% B&B; which is the Binance right. So I'm super bullish on Bitcoin. I think that you know there's a chance that Ether makes a comeback specifically I think that a lot of the stable coins that have been launched have been built on Ethereum if you're not familiar with stable coins it's basically the concept of a dollar but on a blockchain which could be really really powerful because it creates the opportunity for the delivery of US dollar denominated financial services at a global scale not using the traditional banking rails. And then B&B; I mean Binance is the biggest and most successful exchange they have a history of innovating, creating new products, going fast and so I'm taking a bit of a flyer with them but I'm 90% Bitcoin. I don't think that I'm not bullish on any of the other all coins frankly I struggle to see you know the big upside I have heard whispers in the community that there's kind of like a new wave of altcoins 3.0 might emerge, you know could see some some good returns similar to what some of the ICOs did in 2017 but it's not an area of focus for me. So that's my view.
Buck: Yeah let's talk about BlockFi. Remind us exactly what BlockFi is.
Zac: Sure so we're a wealth management platform for crypto investors. Today we have two products that we offer. One product is analogous to a savings account from a traditional bank where you're able to earn interest on your holdings except on BlockFi, the assets instead of being dollars are bitcoin and Ether and we don't have FDIC insurance so it's not exactly the same risk profile as a savings account at a bank, but conceptually you're able to hold Bitcoin and an account with BlockFi and earn interest on it paid in Bitcoin every month. That's one product that we have. The second product that we have which you are alluding to earlier offers our clients the ability to borrow dollars secured by the value of their cryptocurrency and it's analogous to a securities backed loan or a liquidity access line in the traditional world except instead of securities we're taking Bitcoin or other digital assets as collateral and lending it rates as low as four point five lending USD that rates as low as four point five percent a year.
Buck: I wanna pick these apart a little bit if you don't mind. In terms of this savings account first of all is it just bitcoin or is it bitcoin, Ethereum?
Zac: We actually support three assets in the interest account currently Bitcoin, Ether and GUSD which is the stable coin from Gemini.
Buck: Got it. And talk about the interest because it's not one flat interest rate right it's different depending on how much cryptocurrency actually is held?
Zac: Correct so there's a tiered interest rate structure. Currently on Bitcoin for balances up to ten Bitcoin, we offer a six point two percent annual yield and for balances above ten Bitcoin it's a 2.2 percent annual yield. On Ether, for balances up to two hundred Ether it's a 3.3 percent annual yield and balances above two hundred Ether is 0.5% annual yield and for GUSD the stable coin it's an eight point six percent interest rate with no tier so yeah those are the different rates.
Buck: Why did, I mean was it just a matter of like an issue with people dumping like a thousand Bitcoin and trying to get six you know 6% of that, was it just too hard to you know make that a long-term part of the business model or why did the higher levels end up changing to a lower rate?
Zac: Sure so I wanted to function of market conditions and to it's a function of supply and demand. So we launched the interest account in March of this year. We were just starting to come out of the bear market and one of the things that happened as we switched from being in a bear market to being in a bull market is the futures switched from being in backwardation to contango which basically means that our institutional borrowers the groups that we lend to that enable us to pay the rate to depositors had less of a need they had less demand to borrow and they were willing to pay lower rates to borrow crypto than they were when we were building and planning to launch this product. The second thing that happened is we were surprised to the upside in terms of the level of interest that we received from depositors and especially depositors with very large sums of cryptocurrency. So to give you an example you know within a day or two of making the product available publicly, we had a number of groups that were depositing 5, 10, 15, 20 million dollars worth of Bitcoin and so the supply-demand that we have to manage is, the amount that we have on deposit relative to the size of this market that will borrow Bitcoin size of the market that will borrow Bitcoin is partially a function of market sentiments partially a function of number of trading venues and the liquidity profile and it's partially a function of you know BlockFi’s efforts in terms of sales and client development relationship management. So the supply side got a little bit ahead of the demand side on deposit and how much there was available to borrow so we made a few tweaks. We want to keep the 6%, 6.2% rate on Bitcoin available to as many people as possible for as long as possible so that's why we went with the tiered structure where we made it available on balances up to 10 and reduced it for balances above that.
Buck: Got it and the interest on that, when you say 6.2 percent that six point like it's all denominated in Bitcoin, you're not paying cash out right?
Zac: Correct so to use round numbers to provide an easy example you start on January first with a hundred Bitcoin in an account, by the subsequent January first you will have 106 point 2 Bitcoin in your account.
Buck: Yeah and that that's kind of neat too because then you're you know you're also getting potentially the upside of that you know I mean they made 6% but if you if you're really bullish on the market you could be potentially looking at a lot more than 6% on your money. How about in terms of the, is there like a you know do you do it sort of a month-to-month or six month or month you know year-long contracts for these things?
Zac: It's month-to-month. So the rates are subject to change on a monthly basis. We provide notifications at least a week in advance before the end of one month on what the rates will be for the subsequent month and people are able to you know withdraw any time without penalty. We reserve up to 7 days to process withdrawals but we've never taken more than one business day to process a withdrawal so they're pretty quick but not instant for security reasons and yeah it's pretty flexible.
Buck: How about the lump in the lending side how does how does that work? So now I've got like 10 Bitcoin and so I would deposit that I guess and you guys I understand that maybe that that goes into like a Gemini account or something, is that still how it works?
Zac: Correct so we have a partnership with Gemini for custody. So when you log into a BlockFi account you'll have a deposit address. When you send Bitcoin to that deposit address it actually goes directly into storage with Gemini. Gemini was the first custodian in the crypto sector to receive insurance against cyber hacks on their platform. They were also the first custodian to get to complete a SOC 2 compliance audit and they have a really long track record of custody billions of dollars worth of crypto without ever having any issues. So it goes directly to Gemini and then you're able to interact with block-wise platform to take any actions that you might deem necessary. So you can view your interest payments you can withdraw you can deposit more you can also take out a loan. So in terms of taking out a loan, if you have ten Bitcoin that's worth roughly a hundred thousand US dollars at this point in time, you can borrow up to fifty percent of that value in a US dollar loan which can be funded be a wire or stable coin and then the structure of those loans is that you make interest-only payments on the amount that you borrowed throughout the duration and you can prepay at any time without penalty.
Buck: And what's the typical you said it was four point six.
Zac: We have interest rates as low as four point five. The interest rates on borrowing USD vary according to your initial loan to value ratio. So if you have a hundred thousand dollars worth of Bitcoin we actually have three loan-to-value ratio options. You can borrow at a 50 percent initial loan-to-value ratio which would mean you're borrowing 50k, the interest rate on that will be eleven point two five, if you borrow thirty five percent of the value so 35k the interest rate is seven point nine, and if you borrow twenty five percent of the value of the interest rate is four point five percent per year.
Buck: Got it. In terms of you know the technical, so you basically pay that on a month-to-month basis and then in terms of contracts, are those also month-to-month loans or how does that work?
Zac: Those are one-year term loans well now it's the ability to renew without repaying the principal at the end of the term at current rates and our rates for those loans have always come down so far. So it's a one-year term loan BlockFi committed for a year at that rate your payments stay the same but you can prepay at any time without penalty.
Buck: Right. When do you do when would you do an actual sort of I guess a cap will call like what loan-to-value because you can go up to say you're borrowing at you know you're borrowing at the lowest rate you know you're at 4.5% you're borrowing see you know just for round numbers 100 Bitcoin you borrowed or you said 10 Bitcoin hundred thousand dollars but you only borrowed twenty-five thousand dollars at four point five percent, what if Bitcoin you know loses 50 percent of its value then what happens?
Zac: Well you wouldn't have a margin call based on on that example. If your loan to value ratio hits 70 percent that's when we have a margin call and the way the margin call works is our clients have the option to either post more collateral, pay down the loan using USD or some of the collateral that's posted for the loan or take no action. If they take no action there's a 72-hour window where we'll wait to see if the price recovers, if it does then no action is required, if the price keeps going down further then we will initiate a partial collateral sale to rebalance that LTV to a healthy level at the end of that window.
Buck: So in terms of the clients that you see doing this kind of stuff, I mean who are you seeing borrowing because you don't have a cap I mean you can on the borrow side, I mean and the rates don't really change like if you're depositing a hundred Bitcoin you're getting the same rate differences as somebody who's depositing ten for borrowing right?
Zac: That's right.
Buck: So who are the people who are putting I mean what are these businesses that are putting are using these loans who are the typical clients?
Zac: Sure so it's a mix of retail and corporate. On the retail side we actually did a survey recently on use cases and the number one use case about a third of our borrowers expressed is that they were using the funds that they borrowed to start a business, which we were really excited about. So the other popular use cases were investing in real estate, investing in other types of traditional assets like stocks and bonds, home improvement, larger purchases, vacations were all used cases, paying down higher cost debt was another use case, and then on the corporate side the loans are used for operating capital. So we have some mining companies that borrow from BlockFi. Other types of companies who you know maybe have crypto denominated inventory like exchanges or crypto ATM businesses our frequent borrowers from BlockFi and our loan sizes rearranged from you know as low as five thousand dollars all the way up to seven figures. So it's a pretty diverse group of borrowers.
Buck: So recently it sounds like you guys partnered with another company called Casa. What is Casa and I guess how does that benefit both companies?
Zac: Sure. So Casa is a leader in fighting self sovereign storage solutions for cryptocurrency owners so if you're alone that owns Bitcoin and to use a gold analogy. If you want to own gold but you keep it in your vault or in your backyard you want to have physical possession of it yourself if you want to do that same type of custody with Bitcoin. Casa has a solution that makes that really easy. Our partnership with Casa provides mutual benefits to clients on either side. So Casa clients are able to receive some discounts in terms of accessing BlockFi products and vice-versa BlockFi clients are able to receive discounts in terms of accessing kasam products and over time we'll build some things in to the user experience specifically on Casa’s platform that will make it you know a bit more seamless to interact with BlockFi products while you're on their platform. In general that partnership strategy is something that you'll see more of we think there are in the ecosystem that are specializing in areas that BlockFi's not focused on and doing things where we can provide benefits to clients on both sides is a win-win for us then and our clients.
Buck: Last thing I want to ask you about, last time I spoke to you, you had talked about the idea of potentially Bitcoin backed credit cards meaning like you know getting Bitcoin back instead of miles or dollars back. You guys any closer to that, because I definitely want one of those cards.
Zac: I'm so glad you brought it up. We're definitely closer, but we're not you're not going to have the card until like Q3 of next year probably. It's getting worked on, these things you know for better or worse they take a long time launching a credit program is no small feat you know we're working on it. We've identified some of the key partners that we'll be working with to bring that product to market it is going to happen and I share your sentiment like I wish I had it now.
Buck: Yeah seriously that'd be great. Well listen it was great talking you. So it's BlockFi.com and it's spelled like block and then fi and tell us you know tell us the process of doing is pretty simple okay how long does it take to apply for these things…
Zac: Yeah I mean nothing takes any time really. So you could come in and start earning interest and get a loan from us all in under five minutes. And we also have a client service team that's super responsive in in terms of communication however you want to communicate with them, over email, over the phone, over text message so you know don't don't hesitate to reach out to us. We're also on twitter. My twitter handle is BlockFiZac and our company twitter handle is @therealBlockFi so we're very active on those platforms and happy to chat with you there as well.
Buck: Zac Prince, thank you very much for being on Wealth Formula Podcast today.
Zac: Thanks for having me, Buck, I appreciate it.
Buck: We’ll be right back.
submitted by Buck_Joffrey to u/Buck_Joffrey [link] [comments]

09-30 00:33 - 'BTC and Libra Coin and the New Digital Economy' (self.Bitcoin) by /u/wookiesvendetta removed from /r/Bitcoin within 194-204min

'''
Hi there!
TLDR: please read my MAIN QUESTION!
Just wanted to open a discussion re: BTC and the true decentralization of it (OK, well 97% decentralized, but let's not get into the miners 'control' it debate), versus huge intra-corporational projects like Libra.
Please go to their website and read a bit about it for a comparison.
My MAIN QUESTION is this, most of us are here because we like, value and believe in the tennents of decentralized, trustless, immutable, government free money/store of value. Essentially we believe in Bitcoin and what Satoshi meant for it to represent...
BUT, I feel like the banking system, and national governments more slowly, are taking stock of the rapid technological changes in finance/trade (cryptocurrencies) and are essentially upgrading the system. They're taking some elements of blockchain.
I know Libra is not a cryptocurrency like Bitcoin. But the question is, WILL THE PUBLIC ACTUALLY CARE? Will the average teen, or boomer or whomever actually care that Libra is controlled by 15 mega corporations? Or will they actually think this is a GOOD thing? (It's backed up by these corporations! They'll say. It's more safe, they'll say).
The intellectual concept of Bitcoin is a new framework. Projects like Libra cater to the lowest common denominator.
I feel like we're in the beginning of a monetary system upgrade... and that Libra will appeal to a lot of people that BTC might not.
Any insightful comments? Thanks in advance.
And of course, HODL strong everyone!
'''
BTC and Libra Coin and the New Digital Economy
Go1dfish undelete link
unreddit undelete link
Author: wookiesvendetta
submitted by removalbot to removalbot [link] [comments]

Named denominations for Moneroj like "bits" for 10^{-6} units

There's a lot of reasons to think having the standard units of Monero being so expensive (~$350) could be a psychological barrier to adoption. In 2006 a psychological concept was defined called "unit bias", where people tend to prefer to work with whole units. The original study actually found that people would eat larger amounts by weight of things like Tootsie rolls when offered a large as opposed to a small unit size (see: https://www.ncbi.nlm.nih.gov/pubmed/16771803). The takeaway is people like to work with whole units of things and it has measurable effects.
This unit bias is has come up repeatedly in how people like to interact with cryptocurrencies. For example, people look at Bitcoin and say "that's too expensive. I could never afford it." even though it's divisible. Some are not even aware that Bitcoin was not the lowest denomination. This is such a pain point that the Bitcoin community is debating doing away with Bitcoin as the base unit and instead going with "bits", which would be a microBitcoin. (BIP: https://github.com/bitcoin/bips/blob/mastebip-0176.mediawiki).
This issue is not limited to Bitcoin and seems affect coins whose price per standard denomination is above $1. I have seen hints of this in multiple contexts like Electronium claiming to have studied this and found users were more comfortable with owning whole units to cryptocurrencies with very small denominations being strangely popular despite offering no real advantages otherwise. I have heard of people saying one of the advantages of their cryptocurrency of choice is that there are "way more coins", and they were speaking to this as if it were an important feature. I am beginning to wonder if there is some truth to that.
I think it might make sense to come up with names for other denominations of Monero and consider using that as the standard. Specifically 10{-3} or 10{-6}.
Thoughts?
EDIT: This already exists at https://getmonero.org/resources/moneropedia/denominations.html
submitted by admin______ to Monero [link] [comments]

3 Stablecoins Enterprise Executives Need To Know And Why

3 Stablecoins Enterprise Executives Need To Know And Why

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The digital asset space is undergoing a transformation and is trying to adapt to new and wider interest from large non-financial companies like Facebook, Samsung, Walmart, BMW, Shell and Nestle. Those companies, along with large financial services institutional players like J.P. Morgan, UBS and Fidelity, create enormous demand for tradable assets running on both public and private blockchains. These non-financial companies are usually less risk-averse than are the experienced traditional finance institutions. Thus, to embrace the new technology, they must rely on stable, reliable and scalable instruments like stablecoins. These new assets are ideally suited to service the expanding payments industry, a primary blockchain use case, and digital assets exchanges.
Having price stability when trading and exchanging digital assets is important and effectively creates additional channels for global remittance as well as better price efficiency.
But what are stablecoins in a nutshell? They are digital assets designed to have a stable value and extremely low volatility. Usually, they are backed by fiat currency – in most cases, the US dollar, digital assets or a physical commodity like gold or silver. There are projects that aim to completely remove the need for physical collateral and that rely on algorithms to dynamically adjust supply. The goal is that the price should not drastically fluctuate at any moment in time.
Recently, several interesting stablecoin projects came out, and they are pushing the boundaries of digital assets. For example, the NYC-based exchange Gemini is issuing GUSD but also applying for an ATS (Alternative Trading System) license, which will create a unique opportunity for the GUSD to reach newly tokenized assets and private placements.
Another two projects coming from the corporate world are JPM Coin, run by the powerhouse J.P. Morgan, and Fnality’s Utility Settlement Coin, which is backed by a plethora of banks like UBS, BNY Melon, Barclays and HSBC. Both seem to have the same aims, a similar reach and the same potential customers. It will be interesting to see if they cooperate at some point.
  1. Tether
One of the most important benefits of stablecoins is that, if widely adopted by a large number of crypto exchanges, they create an opportunity for price hedging and risk management that is several times cheaper than hedging versus fiat. Currently, the most used in trading stablecoin is Tether. The USDT is pegged to the US dollar and widely used to create crypto markets on more than 25 of the most popular cryptocurrency exchanges. Founded in 2014 by the founders of the Bitfinex exchange, Tether is now the sixth most liquid crypto asset, with a market cap of $3.9 billion. The asset is available mostly on crypto exchanges that don’t have the New York-based BitLicense and reside mostly outside the US.

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Recently, Tether was in the news when the New York Attorney General started a case against Bitfinex and its Hong Kong founding company iFinex for using Tether reserves to mask a missing $850 million. Strangely, this high-profile investigation had minimal effect on Tether’s stability. It dropped to $0.85 but recovered to its usual dollar parity of $0.99 – $1.01.
Being vital to the crypto trading ecosystem, Tether aims to be as widely available as possible. It is available on numerous networks like OMNI (Bitcoin), ERC20 (Ethereum) and Tron. To get a sense of how fragile everything is, last week Poloniex wanted to move $50 million between networks. However, instead of printing the needed amount, it issued $5 billion in new tethers, which surprised the whole market. Eventually, it was made clear that this was an issue with the decimals, or what the trading world knows as “fat fingers”.

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Why it is important: Considered by many to be the main driver behind the bull run of Bitcoin’s price, Tether is vital for the crypto community because it is widely spread and adopted by exchanges. It makes up 75% of the total Bitcoin trading market, so it is also regarded as probably the biggest liability in the industry. Many experienced traders are wondering what would happen to the Bitcoin price and volatility if USDT availability is restricted. The interested parties will watch closely on July 29th, which marks the next appearance in the New York courtroom.
  1. Facebook Libra Coin
The stablecoin that has taken all the attention lately comes from Facebook and is a vital instrument in the Libra Association’s plan for its new global payment infrastructure. Facebook’s grand vision is to establish a global payment network among the 18 million merchants on its platform and among its 2.6 billion users. Interestingly, the first companies invited to the Libra Association formation all seem familiarly related; well, you don’t start something that big with complete strangers, do you? Maybe the overall goal is to replicate the WeChat/Tencent model in the western world but instead of using CNY, Libra plans to use a basket of low-volatility assets (bank deposits and government securities) denominated in multiple currencies like USD, GBP, EUR and JPY.
Last week, its co-creator, David Marcus, was in front of the Senate Banking Committee and the House Financial Services Committee, answering tough questions about regulation, trust and privacy. Generally, the Senate and Congress were supportive of the innovation and technology direction that will position the US as the leader in payments. However, they remain highly skeptical of the governance and execution of the Libra project in relation to handling data privacy. With fresh memories of 2008’s financial crisis, most members of Congress were asking themselves, “What will happen if Libra goes down and we have to bail it out?” Which leads to the question: How do you bail out the finances of 2.6 billion people?
Another concern is the fact that the governing body of the Libra Association is being established in Switzerland. This creates the possibility of regulatory arbitrage between US and Swiss laws. For example, securities lawyers in the US might consider the Libra token to be a security, which might not be the case for their Swiss colleagues. With all the signs of ETF (Exchange Traded Fund) or Money Market funds, this can’t be too far. The Libra stablecoin reserve will grow based primarily on two sources: the investors who will initially buy the Libra Investment Token ($LIT) and any other retail users who would convert any type of fiat to use the payment network.
In comparison to another stablecoin issued by a large corporation (J.P. Morgan’s coin), the Libra carries a different sentiment. When J.P. Morgan announced its JPMC, nobody reacted too harshly. Of course, J.P. Morgan doesn’t have the same privacy issues that Facebook does and is generally known to do well in exactly this: banking services with currencies.
An interesting use for the Libra network, once live, will be to serve as the Layer 2 network to permissionless protocols like Bitcoin and Ethereum. This way, the open and trustless networks can communicate/exchange value and assets with the Libra permissioned stablecoin.
Why it is important: Libra is moving waters in DC. This last week, the President tweeted, US Treasury Department Secretary Steven Mnuchin held a press conference and two days were spent in Washington with the Senate and Congress. One thing is clear: cryptocurrencies, Bitcoin and blockchain received prime-time attention. In terms of what comes out of Libra, only time will tell. The sentiment is that it will be heavily regulated, maybe closer to being a bank. Thus, the Libra token will look like CBDC (Central Bank Digital Currency).
  1. Dai
Building on the Ethereum protocol, the team at MakerDao created Dai to be a stable and decentralized currency fueling the new wave of DeFi (Decentralized Finance) applications. It uses an instrument known as Collateralized Debt Position (CDP), which allows you to lock your Ether assets into their smart contract and receive a loan denominated in Dai from the MakerDao system. In essence, the Dai is pegged to the US dollar but backed by Ether. Having Dai on the Ethereum protocols enables many financial services applications which otherwise wouldn’t exist due to the cryptocurrencies’ high volatility. Having Dai issuance and usage completely open is key to trustless financial services.
Currently, many discussions are taking place about the protocol stability fee. This is the interest rate, currently at 20.5%, that all users must pay back to the system when closing their CDP positions. One might argue that this is too high and the current CDPs are overcollateralized. It seems like this is true. The current collaterization ratio is around 390%. For $81 million in debt, there is $320 million in collateral.

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The Dai is an important instrument in the DeFi ecosystem built on Ethereum. Currently, it is being used on protocols like dYdX, enabling decentralized margin trading; 0x Protocol, the open-source marketplace for crypto tokens; Uniswap, the exchange for swapping ERC20 tokens; Dharma, the open protocol for building apps that allow for the borrowing and lending of digital assets; and many more.
There are three main issues of which Dai users must be aware:
Why it is important: Nevertheless, piece by piece, the Open Finance infrastructure, with stablecoins at its core, is being built and is “eating up financial services” as we know them. Slowly but surely, all the existing financial tools will have their own open sources and trustless tokenized equivalents.
A growing concern about stablecoins is how they could be classified by agencies like the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). For example, Basis’s stablecoin, despite raising $133 million, couldn’t escape the SEC classification as a security and had to shut down. Depending on how one reads the current regulation, one could classify the stablecoins as "swaps" under the CFTC regulation or as "demand notes" under the SEC. If you talk to experienced securities lawyers, the answer is always “it depends”.
Still, similar to other markets in which we saw interesting and innovative financial instruments, not all stablecoin projects will survive. The winner will be the one with the most user adoption, highest volumes, largest liquidity and lowest volatility. Last but not least, it should operate within an approved regulatory framework which will guarantee exchange listings and wider organic exposure.
It will be interesting to see if Facebook’s Libra receives regulatory approval, as this might pave the way for the long-awaited Bitcoin ETF.

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Best Quotes from "The Bitcoin Standard"

Best Quotes from Saifedean Ammous book "The Bitcoin Standard"
  1. "Bitcoin can be best understood as distributed software that allows for transfer of value using a currency protected from unexpected inflation without relying on trusted third parties"
  2. "While Bitcoin is a new invention of the digital age, the problems it purports to solve - namely, providing a form of money that is under the full command of its owner and likely to hold its value in the long run - are as old as human society itself"
  3. "People’s choices are subjective, and so there is no “right” and “wrong” choice of money. There are, however, consequences to choices"
  4. "I like to call this the easy money trap: anything used as a store of value will have its supply increased, and anything whose supply can be easily increased will destroy the wealth of those who used it as a store of value"
  5. "For something to assume a monetary role, it has to be costly to produce, otherwise the temptation to make money on the cheap will destroy the wealth of the savers, and destroy the incentive anyone has to save in this medium"
  6. "The monetary media that survived for longest are the ones that had very reliable mechanisms for restricting their supply growth - in other words, hard money"
  7. "The choice of what makes the best money has always been determined by the technological realities of societies shaping the salability of different goods"
  8. "Human civilization flourished in times and places where sound money was widely adopted, while unsound money all too frequently coincided with civilizational decline and societal collapse"
  9. "Whether in Rome, Constantinople, Florence, or Venice, history shows that a sound monetary standard is a necessary prerequisite for human flourishing, without which society stands on the precipice of barbarism and destruction"
  10. "History shows it is not possible to insulate yourself from the consequences of others holding money that is harder than yours"
  11. "Some of the most important technological, medical, economic, and artistic human achievements were invented during the era of the gold standard, which partly explains why it was known as la Belle Epoque, or the beautiful era, across Europe"
  12. "World War I saw the end of the era of monetary media being the choice decided by the free market, and the beginning of the era of government money"
  13. "Government money is similar to primitive forms of money and commodities other than gold: it is liable to having its supply increased quickly compared to its stock, leading to a quick loss of salability, destruction of purchasing power, and impoverishment of its holders"
  14. "With the simple suspension of gold redeemability, governments’ war efforts were no longer limited to the money that they had in their own treasuries, but extended virtually to the entire wealth of the population"
  15. "Had European nations remained on the gold standard, or had the people of Europe held their own gold in their own hands […], history might have been different. It is likely that WorldWar I would have been settled militarily within a few months of conflict"
  16. "The cause of the Great Crash of 1929 was the diversion away from the gold standard in the post-WWI years, and the deepening of the Depression was caused by government control and socialization of the economy in the Hoover and FDR years"
  17. "All spending is spending, in the naive economics of Keynesians, and so it matters not if that spending comes from individuals feeding their families or governments murdering foreigners: it all counts in aggregate demand and it all reduces unemployment!"
  18. "In essence, Bretton Woods attempted to achieve through central planning what the international gold standard of the nineteenth century had achieved spontaneously"
  19. "Hyperinflation is a form of economic disaster unique to government money. There was never an example of hyperinflation with economies that operated a gold or silver standard"
  20. "With government money, whose cost of production tends to zero, it has become quite possible for an entire society to witness all of its savings in the form of money disappear in the space of a few months or even weeks"
  21. "Hyperinflation is a far more pernicious phenomenon than just the loss of a lot of economic value by a lot of people; it constitutes a complete breakdown of the structure of economic production of a society built up over centuries and millennia"
  22. "Even if the textbooks were correct about the benefits of government management of the money supply, the damage from one episode of hyperinflation anywhere in the world far outweighs them"
  23. "Hanke and Bushnell have been able to verify 57 episodes of hyperinflation in history, only one of which occurred before the era of monetary nationalism, and that was the inflation in France in 1795, in the wake of the Mississippi Bubble"
  24. “The constantly increasing supply means a continuous devaluation of thecurrency, expropriating the wealth of the holders to benefit those who printthe currency, and those who receive it earliest. This is termed the CantillonEffect”
  25. “Whether it’s because of downright graft, “national emergency,” or an infestation of inflationist schools of economics, government will always find a reason and a way to print more money, expanding government power while reducing the wealth of the currency holders”
  26. “It is ironic, and very telling, that in the era of government money, governments themselves own far more gold in their official reserves than they did under the international gold standard of 1871–1914”
  27. “A sound money makes service valuable to others the only avenue open for prosperity to anyone, thus concentrating society’s efforts on production, cooperation, capital accumulation, and trade”
  28. “The twentieth century was the century of unsound money and the omnipotent state, as a market choice in money was denied by government diktat, and government-issued paper money was forced on people with the threat of violence”
  29. “Sound money is an essential requirement for individual freedom from despotism and repression, as the ability of a coercive state to create money can give it undue power over its subjects, power which by its very nature will attract the least worthy, and most immoral”
  30. “Sound money is a prime factor in determining individual time preference, an enormously important and widely neglected aspect of individual decision making. Time preference refers to the ratio at which individuals value thepresent compared to the future”
  31. “Economist Hans-Hermann Hoppe explains that once time preference drops enough to allow for any savings and capital or durable consumer-goodsformation at all, the tendency is for time preference to drop even further as a“process of civilization” is initiated”
  32. “Microeconomics has focused on transactions between individuals, and macroeconomics on the role of government in the economy ; [...] the most important economic decisions to any individual’s well-being are the ones they conduct in their trade-offs with their future self”
  33. “The better the money is at holding its value, the more it incentivizes people to delay consumption and instead dedicate resources for production in the future, leading to capital accumulation and improvement of living standards”
  34. “The move from money that holds its value or appreciates to money that loses its value is very significant in the long run: society saves less, accumulates less capital, and possibly begins to consume its capital”
  35. “Civilizations prosper under a sound monetary system, but disintegrate when their monetary systems are debased, as was the case with the Romans, the Byzantines, and modern European societies”
  36. “What matters in money is its purchasing power, not its quantity, and as such, any quantity of money is enough to fulfil the monetary functions, as long as it is divisible and groupable enough to satisfy holders’ transaction and storage needs”
  37. “The best form of money in history was the one that would cause the new supply of money to be the least significant compared to the existing stockpiles, and thus make its creation not a good source of profit”
  38. “Had government money been a superior unit of account and store of value, it would not need government legal tender laws to enforce it, nor would governments worldwide have had to confiscate large quantities of gold and continue to hold them in their central bank reserves”
  39. “The fact that central banks continue to hold onto their gold, and have even started increasing their reserves, testifies to the confidence they have in their own currencies in the long term”
  40. “Sound money is money that gains in value slightly over time, meaning that holding onto it is likely to offer an increase in purchasing power”
  41. “Unsound money, being controlled by central banks whose express mission is to keep inflation positive, will offer little incentive for holders to keep it”
  42. “With unsound money, only returns that are higher than the rate of depreciation of the currency will be positive in real terms, creating incentives for high-return but high-risk investment and spending”
  43. “Savings rates have been declining across the developed countries, dropping to very low levels, while personal, municipal, and national debts have increased to levels which would have seemed unimaginable in the past”
  44. “One of the most mendacious fantasies that pervades Keynesian economic thought is the idea that the national debt “does not matter, since we owe it to ourselves”
  45. “Only a high-time-preference disciple of Keynes could fail to understand that this “ourselves” is not one homogeneous blob but is differentiated into several generations -namely, the current ones which consume recklessly at the expense of future ones”
  46. “The twentieth century’s binge on conspicuous consumption cannot be understood separately from the destruction of sound money and the outbreak of Keynesian high-time-preference thinking, in vilifying savings and deifying consumption as the key to economic prosperity”
  47. “It is an ironic sign of the depth of modern-day economic ignorance fomented by Keynesian economics that capitalism - an economic system based on capital accumulation from saving - is blamed for unleashing conspicuous consumption - theexact opposite of capital accumulation”
  48. “Capitalism is what happens when people drop their time preference, defer immediate gratification, and invest in the future. Debt-fueled mass consumption is as much a normal part of capitalism as asphyxiation is a normal part of respiration”
  49. “The only cause of economic growth in the first place is delayed gratification, saving, and investment, which extend the length of the production cycle and increase the productivity of the methods of production, leading to better standards of living”
  50. “This move from sound money to depreciating money has led to several generations of accumulated wealth being squandered on conspicuous consumption within a generation or two, making indebtedness the new method for funding major expenses”
  51. “As H. L. Mencken put it: “Every election is an advanced auction on stolen goods””
  52. “As politicians sell people the lie that eternal welfare and retirement benefits are possible through the magic of the monetary printing press, the investment in a family becomes less and less valuable”53.“The majority of the technology we use in our modern life was invented in the 19th century, under the gold standard, financed with the ever-growing stock of capital accumulated by savers storing their wealth in a sound money and store of value which did not depreciate quickly”
  53. “The contributions of sound money to human flourishing are not restricted to scientific and technological advance; they can also be vividly seen in the art world”
  54. “In times of sound money and low time preference, artists worked on perfecting their craft so they could produce valuable works in the long run”56.“Modern artists have replaced craft and long hours of practice with pretentiousness, shock value, indignation, and existential angst as ways to cow audiences into appreciating their art, and often added some pretense to political ideals, usually of the puerile Marxist variety”
  55. “As government money has replaced sound money, patrons with low time preference and refined tastes have been replaced by government bureaucrats with political agendas as crude as their artistic taste”
  56. “The Use of Knowledge in Society, by Friedrich #Hayek, is arguably one of the most important economic papers to have ever been written”
  57. “In a free market economic system, prices are knowledge, and the signals that communicate information”
  58. “Prices are not simply a tool to allow capitalists to profit; they are the information system of economic production, communicating knowledge across the world and coordinating the complex processes of production”
  59. “Any economic system that tries to dispense with prices will cause the complete breakdown of economic activity and bring a human society back to a primitive state”
  60. “The fatal flaw of socialism that #Mises exposed was that without a price mechanism emerging on a free market, socialism would fail at economic calculation, most crucially in the allocation of capital goods”
  61. “In an economy with a central bank and fractional reserve banking, the supply of loanable funds is directed by a committee of economists under the influence of politicians, bankers, TV pundits, and sometimes, most spectacularly, military generals”
  62. “Creating new pieces of paper and digital entries to paper over the deficiency in savings does not magically increase society’s physical capital stock; it only devalues the existing money supply and distorts prices”
  63. “Only with an understanding of the capital structure and how interest rate manipulation destroys the incentive for capital accumulation can one understand the causes of recessions and the swings of the business cycle”
  64. “The business cycle is the natural result of the manipulation of the interest rate distorting the market for capital by making investors imagine they can attain more capital than is available with the unsound money they have been given by the banks”
  65. “Contrary to Keynesian animist mythology, business cycles are not mystic phenomena caused by flagging “animal spirits” whose cause is to be ignored as central bankers seek to try to engineer recovery”
  66. “Economic logic clearly shows how recessions are the inevitable outcome of interest rate manipulation in the same way shortages are the inevitable outcome of price ceilings”
  67. “Monetary history testifies to how much more severe business cycles and recessions are when the money supply is manipulated than when it isn’t”
  68. “A capitalist system cannot function without a free market in capital, where the price of capital emerges through the interaction of supply and demand and the decisions of capitalists are driven by accurate price signals”
  69. “The central bank’s meddling in the capital market is the root of all recessions and all the crises which most politicians, journalists, academics, and leftist activists like to blame on capitalism”
  70. “Imagining that central banks can “prevent,” “combat,” or “manage” recessions is as fanciful and misguided as placing pyromaniacs and arsonists in charge of the fire brigade”
  71. “Central planning of credit markets must fail because it destroys markets’ mechanisms for price-discovery providing market participants with the accurate signals and incentives to manage their consumption and production”
  72. “It is typical of the #MiltonFriedman band of libertarianism in that it blames the government for an economic problem, but the flawed reasoning leads to suggesting even more government intervention as the solution”
  73. “Only when a central bank manipulates the money supply and interest rate does it become possible for large-scale failures across entire sectors of the economy to happen at the same time, causing waves of mass layoffs in entire industries”
  74. “In a free market for money, individuals would choose the currencies they want to use, and the result would be that they would choose the currency with the reliably lowest stock-to-flow ratio. This currency would oscillate the least with changes in demand and supply”
  75. “It is an astonishing fact of modern life that an entrepreneur in the year 1900 could make global economic plans and calculations all denominated in any international currency, with no thought whatsoever given to exchange rate fluctuations”
  76. “The combination of floating exchange rates and Keynesian ideology has given our world the entirely modern phenomenon of currency wars”
  77. “Hard money, by taking the question of supply out of the hands of governments and their economist-propagandists, would force everyone to be productive to society instead of seeking to get rich through the fool’s errand of monetary manipulation”
  78. “Under a sound monetary system, government had to function in a way that is unimaginable to generations reared on the twentieth-century news cycle: they had to be fiscally responsible”
  79. “For those of us alive today, raised on the propaganda of the omnipotent governments of the twentieth century, it is often hard to imagine a world in which individual freedom and responsibility supersede government authority”82“. The fundamental scam of modernity is the idea that government needs to manage the money supply. It is an unquestioned starting assumption of all mainstream economic schools of thought and political parties”
  80. “Having the ability to print money, literally and figuratively, increases the power of any government, and any government looks for anything that gives it more power”
  81. “By placing a hard cap on the total supply of bitcoins, Nakamoto was clearly unpersuaded by the arguments of the standard macroeconomics textbook and more influenced by the Austrian school, which argues that the quantity of money itself is irrelevant”
  82. “Societies with money of stable value generally develop a low time preference, learning to save and think of the future, while societies with high inflation and depreciating economies will develop high time preference as people lose track of the importance of saving”
  83. “With sound money, the government’s war effort was limited by the taxes it could collect. With unsound money, it is restrained by how much money it can create before the currency is destroyed, making it able to appropriate wealth far more easily”
  84. “Unsound money is a particularly dangerous tool in the hands of modern democratic governments facing constant reelection pressure. Modern voters are unlikely to favor the candidates who are upfront about the costs and benefits of their schemes”
  85. “Unsound money is at the heart of the modern delusion believed by most voters and those unfortunate enough to study modern macroeconomics at university level: that government actions have no opportunity costs”
  86. “It is no coincidence that when recounting the most horrific tyrants of history, one finds that every single one of them operated a system of government-issued money which was constantly inflated to finance government operation”
  87. “Unsound money makes government power potentially unlimited, with large consequences to every individual, forcing politics to the center stage of their life and redirecting much of society’s energy and resources to the zero-sum game of who gets to rule and how”
  88. “In the world of fiat money, having access to the central bank’s monetary spigots is more important than serving customers. Firms that can get low-interest-rate credit to operate will have a persistent advantage over competitors that cannot”
  89. “Banking has evolved into a business that generates returns without risks to bankers and simultaneously creates risks without returns for everyone else”
  90. “In a world where central banks allocate credit, the larger firm has an advantage in being able to secure funding at a low rate which its smaller competitors cannot get”
  91. “Bitcoin was the first engineering solution that allowed for digital payments without having to rely on a trusted third-party intermediary. By being the firstdigital object that is verifiably scarce, Bitcoin is the first example of digital cash”
  92. “Whereas in a modern central bank the new money created goes to finance lending and government spending, in Bitcoin the new money goes only to those who spend resources on updating the ledger”
  93. “Difficulty adjustment is the most reliable technology for making hard money and limiting the stock-to-flow ratio from rising, and it makes Bitcoin fundamentally different from every other money”
  94. “Bitcoin is the hardest money ever invented: growth in its value cannot possibly increase its supply; it can only make the network more secure and immune to attack”
  95. “The security of Bitcoin lies in the asymmetry between the cost of solving the proof-of-work necessary to commit a transaction to the ledger and the cost of verifying its validity”
  96. “The Bitcoin ledger of transactions might just be the only objective set of facts in the world”
  97. “Bitcoin is the first example of a digital good whose transfer stops it from being owned by the sender”
  98. “Bitcoin presents a tremendous technological leap forward in the monetary solution to the indirect exchange problem, perhaps as significant as the move from cattle and salt to gold and silver”
  99. “Without a conservative monetary policy and difficulty adjustment, Bitcoin would only have succeeded theoretically as digital cash, but remained too insecure to be used widely in practice”
  100. “Bitcoin’s volatility derives from the fact that its supply is utterly inflexible and not responsive to demand changes, because it is programmed to grow at a predetermined rate”
  101. “As the size of the market grows, along with the sophistication and the depth of the financial institutions dealing with Bitcoin, this volatility will likely decline”
  102. “As long as Bitcoin is growing, its token price will behave like that of a stock of a start-up achieving very fast growth. Should Bitcoin’s growth stop and stabilize, it would stop attracting high-risk investment flows, and become just a normal monetary asset”
  103. “Bitcoin is the cheapest way to buy the future, because Bitcoin is the only medium guaranteed to not be debased, no matter how much its value rises”
  104. “The strict digital scarcity of the Bitcoin tokens combines the best elements of physical monetary media, without any of the physical drawbacks to moving and transporting it. Bitcoin might have a claim to make for being the best technology for saving ever invented”
  105. “Any person who owns Bitcoin achieves a degree of economic freedom which was not possible before its invention”
  106. “For the first time since the emergence of the modern state, individuals have a clear technical solution to escaping the financial clout of the governments they live under”
  107. “Bitcoin, and cryptography in general, are defensive technologies that make the cost of defending property and information far lower than the cost of attacking them”
  108. “If BTC continues to grow to capture a larger share of the global wealth, it may force governments to become more and more a form of voluntary organization, which can only acquire its “taxes” voluntarily by offering its subjects services they would be willing to pay for”
  109. “Contrary to popular depictions of anarchists as hoodie-clad hoodlums, Bitcoin’s brand of anarchism is completely peaceful, providing individuals with the tools necessary for them to be free from government control and inflation”
  110. “The invention of Bitcoin has created, from the ground up, a new independent alternative mechanism for international settlement that does not rely on any intermediary and can operate entirely separate from the existing financial infrastructure”
  111. “Bitcoin can be seen as the new emerging reserve currency for online transactions, where the online equivalent of banks will issue Bitcoin-backed tokens to users while keeping their hoard of Bitcoins in cold storage”
  112. “Bitcoin’s advantage is that by bringing the finality of cash settlement to the digital world, it has created the fastest method for final settlement of large payments across long distances and national borders”
  113. “Bitcoin can be best understood to compete with settlement payments between central banks and large financial institutions, and it compares favorably to them due to its verifiable record, cryptographic security, and imperviousness to third-party security holes”
  114. “BTC, having no counterparty risk and no reliance on any third-party, is uniquely suited to play the same role that gold played in the gold standard"
  115. “If Bitcoin continues to grow in value and gets utilized by a growing number of financial institutions, it will become a reserve currency for a new form of central bank"
  116. “The first central bank to buy BTC will alert the rest of the central banks to the possibility and make many of them rush toward it. The first central bank purchase is likely to make the value of BTC rise significantly"
  117. “While central banks have mostly been dismissive of the importance of BTC, this could be a luxury they may not afford for long. As hard as it might be for central bankers to believe it, BTC is a direct competitor to their line ofbusiness”
  118. “The modern central bank business model is being disrupted. Central banks now have no way of stopping competition by just passing laws as they have always done. They are now up against a digital competitor that most likely cannot be brought under the physical world’s laws”
  119. “If the modern world is ancient Rome, suffering the economic consequences of monetary collapse, with the dollar our aureus, then Satoshi Nakamoto is our Constantine, Bitcoin is his solidus, and the Internet is our Constantinople”
  120. “Should it achieve some sort of stability in value, Bitcoin would be superior to using national currencies for global payment settlements, as is the case today, because national currencies fluctuate in value based on each nation’s and government’s conditions”
  121. “Bitcoin is the only truly decentralized digital currency which has grown spontaneously as a finely balanced equilibrium between miners, coders, and users, none of whom can control it”
  122. “After years of watching altcoins get created, it seems impossible that any coin will recreate the adversarial standoff that exists between Bitcoin stakeholders and prevents any party from controlling payments in it”
  123. “It is high time for everyone involved in BTC to stop concerning themselves with the question of the identity of Nakamoto, and accept that it does not matter to the operation of the technology, in the same way that the identity of the inventor of the wheel no longer matters”
  124. “No single altcoin has demonstrated anything near Bitcoin’s impressive resilience to change, which is down to its truly decentralized nature and the strong incentives for everyone to abide by the status quo consensus rules”
  125. “Contrary to a lot of the hype surrounding Bitcoin, eliminating the need for trust in third parties is not an unquestionably good thing to do in all avenues of business and life”
  126. “A non-Bitcoin blockchain combines the worst of both worlds: the cumbersome structure of the blockchain with the cost and security risk of trusted third parties”
  127. "“It is no wonder that eight years after its invention, blockchain technology has not yet managed to break through in a successful, ready-for-market commercial application other than the one for which it was specifically designed: Bitcoin”
  128. “The most common potential applications touted for blockchain technology - payments, contracts, and asset registry - are only workable to the extent that they run using the decentralized currency of the blockchain”
  129. “All blockchains without currencies have not moved from the prototype stage to commercial implementation because they cannot compete with current best practice in their markets”
  130. “Any application of #blockchain technology will only make commercial sense if its operation is reliant on the use of electronic cash, and only if electronic cash’s disintermediation provides economic benefits outweighing the use of regular currencies and payment channels”
submitted by shibley to Bitcoin [link] [comments]

Zcoin Development Update 27 May 2019

Zcoin Development Update 27 May 2019
https://preview.redd.it/70a0pz4j8q031.jpg?width=1200&format=pjpg&auto=webp&s=f35dc166fc79ba6887f6b60cd4a60cd6b05e2d05

Sigma

  • Feature freeze.) Release candidate aim for 7 June 2019.
  • Mints to honor coin control to review and merge
  • Confirm to add two more denominations 0.05 and 25.
    • Significantly brings down both the average and max number of mints needed to fulfill any amount as confirmed through knapsack tests.
    • 0.05 denomination is to make the lowest Sigma spend fee cheaper without tainting spends.
  • HD Mints completed and awaiting review. Allows wallet backups to include mints.
  • Completed Electrum wallet and Electrumx server Sigma support along with update to latest Electrum code. One remaining issue when dealing with re-orgs with Electrum wallet.
  • Conversion tool from Zerocoin mints to Sigma mints to be finalized by this week.
  • To complete chain reorganization regression tests
  • RPC commands for Sigma completed
  • For wallet to prompt for full reindex if upgraded after Sigma has upgraded.
  • For DDoS or inflation protection purposes to enforce consensus limits for Sigma spends
    • Per transaction 35 spends or 500 xzc
    • Per block 50 spends or 600 xzc
  • Features that won’t make it into first mainnet release but will be added on later
    • Batch verification of Sigma spends
    • Showing total amounts of unspent mints in each denomination

Exodus


  • Exodus is Zcoin’s smart asset token layer that is based off Omni
  • Discussion on implementing Sigma features in Exodus layer allowing smart assets to also have Sigma feature set. This means that tokens can be issued on Zcoin’s blockchain with privacy features
  • To look into ideal OP_return script size limit for this feature.

Znodes


  • Confirm Chainlocks to be implemented during Znode code upgrade for 51% attack protection. To be worked on after Sigma deployment.
  • To look into Znode creation wizard to simplify process

MTP


  • New ccminer release is faster than CryptoDredge with OhGodAPill. Matches T-rex but slower in 20 series Nvidia GPU.
  • To look into changing the way memory is accessed for further speed ups.

Research


  • Research is to keep up to date on improvements in the space and understanding developments in blockchain. Does not necessarily lead to improvements to Zcoin.
  • Review Spartan
  • Review RingCT 3.0
  • Review Sonic
  • Exploring some ideas to scale Lelantus
  • Understanding FloodXMR. Current status is Monero Research Labs is in contact with authors of paper to ascertain accurate costs.
  • Quadratic voting and how it may be applicable to Zcoin governance structures
  • Dynamic Znode collaterals
submitted by Muggles_XZC to zcoin [link] [comments]

Have another perspective about Electroneum supply and decimal points! (RE-POST/reformat)

Argument 1: It is wrong that less number of decimals = less supply
Let starts with the background of the debate:
Hypothesis 1: Electroneum (ETN) has less supply than Bitcoin (BTC)
Hypothesis 2: BTC has less supply than ETN
The argument of Hypothesis 1 is that BTC has 8 “decimal points” and ETN only 2 “decimal points” which bring the argument to something like this:
1 satoshi = 0.00000001 BTC
1 mETN = 0.01 ETN
Max supply of BTC is 21 Million, which is equal to 21 * 1014 satoshi.
Max supply of ETN is 21 Billion which is equal to 21 * 1011 mETN.
Which means ETN’s total supply is 1/1000 of BTC’s.
The argument of Hypothesis 2 is that the “decimal points” is just “fractional notation” and it is not significant in the calculation of supply.
Max supply of BTC is 21 Million BTC
Max supply of ETN is 21 Billion ETN
Which means BTC’s total supply is 1/1000 of ETN’s.
At the beginning when Richard Ells explain about the 2 decimal points, I immediately thought: “No, you can’t do that!” “The fraction is insignificant; how can you include that into the calculation of total supply?”
So, for quite a while, just the same as other people I tend to believe Hypothesis 2 is right and this is quite disturbing to think that ETN has this “flaw”.
Then I came to a realization that I am thinking in technical/engineering formula concept and try to forced it into a dynamic currency calculation.
This is a big flaw in hypothesis 2 argument, because we are using Math (as in pure Math calculation) perspective instead of the understanding of how Currency behaves or works.
In Math, the unit of numbers is a standard, where 1 (100) is the lowest denominator, and decimal points are just the “fraction of the unit”, which gives the argument that no matter what is the length of the fraction, 21 Million will still be less than 21 Billion.
But we are not talking/discussing about “just numbers” here, we are talking about a Currency.
Currency has what is called as “circulating denomination unit”, and every currency has the lowest circulating denomination unit. For US Dollar and UK Pound, it is 1 cent or a penny. In Australian Dollar and Canadian Dollar, it is 5 cents (5 cents coin).
So, when we talk about BTC has 8 decimal points and ETN has 2 decimal points, we are not just talking about fraction of unit, we are talking about the “lowest circulating denomination unit” of a currency.
Consider this:
Let say that ETN and BTC mining is getting harder and harder. The lowest unit a miner can earn is 0.01 ETN in Electroneum supply and 0.00000001 BTC in Bitcoin supply (we are not talking about price at the moment, but focus on supply).
With 0.01 as the lowest unit that can be mined in ETN, that means for ETN to reach max supply is 21 Billion/0.01 or 21 * 1011.
With 0.00000001 as the lowest unit that can be mined in BTC, that means for BTC to reach max supply is 21 Million/0.00000001 or 21 * 1014.
Which simply means ETN will reach max supply faster, hence lower supply (or vice versa).
If we are talking about token, then arguably Hypothesis 2 can be right, because tokens are just token; and they are not designed to be a currency, there are significant differences.
Electroneum is designed as a currency and projected to be the “de-facto mass adopted” currency. So, think about it as a currency, NOT token.
Let’s get further into this with some examples of “real” (i.e.: fiat) currencies.
We know that currently US Dollar is one of the most (if not the most) dominant and popular currencies (fiat currencies). At the time of writing, these are the exchange rates of USD (US Dollar) to some other currencies (source: xe.com):
1 IDR (Indonesian Rupiah) = 0.0000736762 USD (US Dollar)
1 USD = 13572.90414000722 IDR
1 VND (Vietnamese Dong) = 0.0000440036 USD (US Dollar)
1 USD = 22725.4133752693 VND
Argument 2: The 2 decimal point in Electroneum is a flaw?
Now, let’s talk about the lowest transactional/circulating denomination unit of USD. It is $0.01 USD, which is represented by a penny or 1 cent coin.
Have you ever heard anyone say: “Hey, because USD lowest denomination unit is $0.01, this doesn’t make sense, this is a flaw. How am I going to exchange 100 IDR to USD? Because based on the exchange rate, 100 IDR is 0.0073762, it is not even 1 cent USD.
The answer is you don’t. People (currency users) behaviour change, and they adjust to it.
Currency is dynamic and involves people’s behaviour, not a static Math numbers.
If you go to Bali (Bali is in Indonesia), the most common lowest denomination unit of IDR in circulation is Rp.500 (IDR). There might be 200, 100, 50 IDR in circulation, but people don’t use them much. I saw some drivers (Taxi or Uber) using 500 IDR as “parking fee” or as “small change”, some “parking operators” even say that 500 IDR is not enough for parking fee, it has to be 1000 or 2000 IDR or even more.
Let say you come back from Bali with 10000 IDR left in your pocket. So, you go to bank to convert 10000 IDR to USD. You will get a weird looking face from the Teller trying to say “Are you serious?”
Why? Because it is not practical or common practice to exchange 10000 IDR to USD (in cash), as it is less than 1 USD (not including fee/commission). They EXPECT you to exchange a much larger amount of IDR.
Argument 3: The 2 decimal point will limit the price of Electroneum to something like $100, so 0.01 ETN will still be $1
Consider this:
I never heard anyone say: “Oh no, this 2 decimal points in USD will limit the price of USD, so 1 USD will never go beyond 100 or 1000 IDR.
The fact is, in the 90’s, 1 USD was around 1000 IDR or maybe even less, and now it is more than 13000 IDR.
How can a 2 decimal points affect the price or limit the price of a currency? I cannot understand the argument.
And this is just a fiat currency, as we all know that crypto currency is more “explosive” in creating price trend.
Borrowing some examples from fiat currency again, does this mean that people will never use calculation that is beyond 2 decimal points (like 3 or more decimal points)?
No, not necessarily, I believe more decimal points (something like 4 decimal points or even finer) are used in calculation of interest, loans, in exchanges, etc. Yet, it doesn’t deny the fact that the circulating denomination unit only has 2 decimal point.
Currency is dynamic, people and businesses will find one way or another to adjust with the price and denomination unit.
For example, in the old days when cash was king, when someone buy something in a shop with price of 80 cents, paid with 1 dollar bill. Then, the owner of the shop realized that he/she runs out of 20 cents coin and other less value coins. The owner of the shop will try to offer candy or chocolate or other cheap items as replacement for the change. The buyer might actually be happy with that because the buyer might appreciate candy or chocolate more than the spare change or coins.
In some payment systems, they mathematically rounded the number to the closest denominator units, like 5 cents or 10 cents.
In term of ETN, if necessary, when the price is skyrocketing. I believe, there will be some options, including creating “sub-currency”, akin to “Dollar coins”. You can buy something in ETN and get the “sub-currency” as a change. The sub-currency can either be pegged to ETN value or not, that can be defined later in the dynamic.
Argument 4: Technology affects the price of currency. Really?
Consider this article or infographic: https://illicittrade.com/infographics/worlds-most-counterfeited-currencies/
US Dollar is considered as the one of the world’s most counterfeited currency.
Then, consider another article: https://www.investopedia.com/financial-edge/0412/the-most-counterfeit-proof-currencies.aspx
“ International Association of Currency Affairs (IACA) holds an awards ceremony for currencies and individuals that have made great leaps in protecting the integrity of currencies and the technologies that go into creating and manufacturing them. In 2011, the IACA voted the Bank of Uganda as the winner of the best new banknote.”
Yet, 1 UGX = 0.000277417 USD. How come? Based on some arguments, that the more advanced the technology a currency has, the more valuable is the currency. Then, it supposed to be 1 USD = 0.000277417 UGX, not the opposite, right?
How about Bitcoin? At the moment, BTC has relatively the least technological advantage to other coins. Then why its price is the top of the chart?
Yes, you don’t want a currency that is very easily counterfeited that it is become “public secret” that everyone can counterfeit the currency at will. But you also don’t need the most secure anti-counterfeit technology to give value to the currency or make the currency as the most valuable currency.
Consider this:
  • US Dollar, EU Euro, Japanese Yen, UK Pound, Australian Dollar, Canadian Dollar and Swiss Franc, why are they perceived as valuable currency to people, investor and trader?
Because they are the most traded currency in the world. I understand there are fundamentals factors affecting the value, but it cannot be denied that people perceived the most traded currencies are more stable and valuable.
“Analyst says 94% of bitcoin's price movement over the past four years can be explained by one equation”.
That equation is about mass adoption or network effect. Put it simply, it shows that the success of Bitcoin and its price are NOT because it is the first, it is the most advanced technologically, it has the most unique features, etc. But because it gets the biggest mass adoption among other crypto currencies, at least for the time being.
  • Currency is dynamic. It involves people and people’s behaviour, not a static Math numbers or Technology features.
  • There are significant differences between crypto that is projected to be just token and the one that is projected to be currency.
When we talk about currency, people give value to currency because of “the fundamentals” value (because currency relates to the fundamentals of a country, policies and its users) and because it is the top traded/used currency in the world.
But when we talk about crypto currency, I think many people agreed it is hard to understand “the fundamentals”, so I believe the easiest to understand the value is how it will be mass adopted. The fundamentals values, I believe, will be easier to see at later stages as they will become more tangible.
These include relationships/partnerships, networks, how it will scale, how the team will keep progressing and keep making improvements (including technological improvements), the progression and manifestation of the planned roadmap, how agile is the team to respond to changes and challenges, and for ETN specifically, is the “ETN Community”. ETN community is a big asset for Electroneum like no other crypto currency has.
So, what’s the deal with 2 decimal points?
At the beginning, I thought this “2 decimal points” can be a drawback for ETN, but now I think it is a brilliant idea. Consider the following advantages of using 2 decimal points for ETN:
  • Easy to understand, human friendly notation.
Why is this important? In order for a currency to be widely adopted, people need to be comfortable enough to use it and understand the transaction quickly and easily. People are already accustomed to 2 decimal points in currency. People mindset are already trained to calculate in cents as in 0.01 and not more decimal points. Thus, this will greatly help mass adoption
  • Businesses’ accounting or business model are setup around this mindset of 2 decimal points or cents of currency.
So, if the business community wants to adopt a crypto currency like ETN, it is “just natural” adoption.
For examples, some little things like, how are you going to invoice customer with a number that has 8 decimal points? It will take longer for the business to adapt and adjust with 8 decimals. It looks like simple thing, but if you try to implement it in the business model, then it can be huge.
Another example, Businesses don’t need to adjust the format in their receipt/docket, because their current format is already 2 decimal points, just change the currency name to ETN, compare this with if the Business has to change the format of the purchase docket/receipt in 8 decimals. I am quite sure it will be quite chaotic in the first few weeks of implementation.
Then how about the data format in the database, reconciliation process, etc, etc. The list can be very long just trying to adapt with 8 decimals.
  • When Electroneum tries to create business partnerships and relationships with other big Enterprise, entity, organisation, network, etc. They don’t need to “overhaul” their system for ETN to be included in their systems.
Thanks to 2 decimal points, which comes natural in every system that uses fiat currency, these integrations can be done faster and more easily.
I think most IT people and developers understand how mind blogging it can be to change whole system just because we need to adapt with 8 decimal points and 2 decimal points at the same time.
The key here is the integration of the systems can be done faster and easier.
  • One of the target of Electroneum is to be adopted by the unbanked people, which means ETN will become one of the main currency for the payment system, which might involves, at least at early stage, features for exchanging between ETN and local currency.
You can see as ETN comes naturally with 2 decimal points, just like other fiat currencies. Integration of payment system and legacy point of sale (POS) systems can be done much easier, because ETN behaves similar to other fiat currency in term of calculation (decimal points).
The only differences (or benefits) are ETN is a crypto currency with faster transaction settlement, cheaper transaction fees, no country boundary (cheaper transfer fees), with no “middle man” like banks, no complicated registration to bank accounts, and has privacy features.
So, Electroneum community and ETN HODLers, we can look forward to the full realization of Electroneum’s potentials in the near future. I got the “feeling” that Electroneum community will play significant roles like in no other crypto currency.
Cheers,
PS: In using some currencies as examples, I am not undermining the currencies or users of the currencies. I have some friends and relatives from some of these countries whom I know are richemuch richer than average people in developed countries (in terms of Dollar wealth). It is just for the sake of example. I hope no one get offended by this.
Disclaimer: I am not affiliated with Electroneum, but I am an ETN ICO investor and HODLer. This is my personal opinion and perspective regarding the matter and NOT to be seen/taken as advise or suggestion in any kind.
submitted by CryptoDeluge to Electroneum [link] [comments]

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