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Blockchain? Bah!

Why the blockchain won’t be Nirvana.

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Bernhard Mueller

Why the cryptocurrency experiment has failed. Heads up: This article is satire based on an 1995 article about the early Internet. It won’t age well.

Clifford Stoll — Photo by Newsweek

After one decade of blockchain, I’m perplexed. It’s not that I haven’t had a gas of a good time on Crypto Twitter. I’ve met great people and even caught a pump or two. But today, I’m uneasy about this most trendy and oversold community. Visionaries see a future of global financial inclusion, decentralized financial instruments and an objective “source of truth” for trust-less interactions without intermediaries. They speak of decentralized autonomous organizations and sound, private digital currencies. Monetary policy will shift from central banks to immutable distributed ledgers. And blockchain will make government more democratic.

Baloney. Do our computer pundits lack all common sense? The truth is no distributed ledger will replace your central bank, no trustless e-cash can take the place of credit card companies and no blockchain will change the way organizations operate.

Consider today’s crypto world. Ethereum, a smart contract platform, allows anyone to instantly raise funds for an idea. Tokens go out cheaply and instantly, leapfrogging financial regulators. Everyone can do it. The result? Shitcoins. The cacophony of scams more closely resembles the Tulip mania, complete with FOMO, shilling, and exit scams. When everything is a scam, almost everbody gets “rekt”. How about paying with crypto? At best it’s an unpleasant chore: The psychedelic colors of RadWallet replace the friendly swipe of a credit card. And you don’t get to collect any bonus points either. Yet Andreas Antonopoulos, author of several blockchain books, predicts that we’ll soon pay for coffee straight with crypto. Uh, sure.

What the crypto hucksters won’t tell you is that the blockchain is one big ocean of uncensored transactions, without any pretense of oversight. Lacking central authorities, blockchain has become a wasteland of unfiltered transfers of value. You don’t know what’s a useful transaction and what’s spam. Whenever I try to transfer Bitcoin, hundreds of other transactions show up, and it takes 10 minutes for the transaction to be confirmed. Lightning Network is faster, but my node periodically crashes with messages like “database corrupted” and I lose my Bitcoin.

Won’t the blockchain be useful in governance? Ethereum addicts clamor for decentralized autonomous organizations (“DAO”). But when the Ethereum community launched a DAO, how long did it take to get hacked? 1 month.
Not a good omen.

Point and click:
Then there are those pushing crypto into finance. We’re told that blockchain will make financial instruments accessible to anyone. Users will happily take out loans and trade tokenized assets on decentralized exchanges. Who needs loan sharks, banks and centralized exchanges when you can do everything on the blockchain? Bah. These decentralized apps are slow, insecure and difficult to use. Even if there were a trustworthy way to interact with other users on the blockchain — which there isn’t — blockchain is missing a most essential ingredient of finance: The human element. Can you remember even one smart contract you used in the past decade? I’ll bet you remember one or two great bank clerks who made a difference in your life.

Then there’s e-commerce. We’re promised instant payment with low fees — just point and click for great deals. We’ll pay for airline tickets with crypto, pay restaurant bills and settle sales contracts. Credit cards will become obsolete. So how come Visa does more transactions in a day than the entire Bitcoin blockchain handles in a month?

What’s missing from this decentralized wonderland? A controlling entity. Discount the fawning techno-burble about decentralized governance. A immutable monetary policy is a limp substitute for an expert group of central bankers. No peer-to-peer e-cash comes close to the safety and comfort offered by Visa and MasterCard. Decentralized networks give too much control to the common people. And who’d prefer a stagnating economy to a constantly growing one thanks to quantitative easing? While the blockchain beckons brightly, seducingly flashing an icon of economic freedom, this nonplace lures us to disenfranchise all our most trusted allies in central banks and government institutions. A poor substitute it is, this decentralized reality where the people are legion and where — in the holy names of freedom and privacy — benevolent corporations and banks are relentlessly devalued.

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Source: https://blog.goodaudience.com/blockchain-bah-2afda19f7f1?source=rss——-8—————–cryptocurrency

Blockchain

Indian government cautious about crypto-adoption, CBDC is a possibility

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Indian traders and exchanges might be bullish about the crypto market, but the Indian  government doesn’t seem keen on rushing into the scene. At least, not until studying its homegrown fintech industry and the anti-Bitcoin protests in El Salvador.

Tracking global news

Indian finance minister Nirmala Sitharaman in a recent interview with Hindustan Times explained why the country seemed to be falling behind when it came to crypto adoption.

Though she admitted, El Salvador wasn’t “the best example,” Sitharaman said,

“You’d think common people don’t care about digital currency; but the public took to the streets against the move. It’s not a question of literacy or understanding – it’s also a question of to what extent this is a transparent currency; is it going to be a currency available for everyone?”

Sitharaman referred to CBDCs as a “legitimate” cryptocurrency and admitted there could be a “possibility,” in hat regard. She noted that India held the “strength of the technology” and acknowledged the need to formulate a Cabinet note. However, Sitharaman wondered if India was ready to follow El Salvador’s way.

Facts on the ground

Though accessibility is a pressing concern, more Indians have discovered crypto than perhaps expected.

Nischal Shetty, CEO of the Indian crypto exchange WazirX – a subsidiary of Binance Holdings – has stated that WazirX sign-ups from India’s tier-two and tier-three cities overtook those from tier-one cities this year. Even so, sign-ups from tier-one cities themselves saw a 2,375% rise. Furthermore, WazirX added one million users in April 2021 alone.

Adding to this, the cost of electricity and Internet data in India are relatively cheaper, which could boost both crypto trading and mining in the future. However, at the last count, there was only one Bitcoin ATM in the whole country.

As per data by Useful Tulips, which combined data from Paxful and LocalBitcoins, India saw transfers worth around $4,502,369 in the last two weeks.

Could anti-Bitcoin protests happen in India?

There is evidence to support both sides. India has a strong history of mass protests, with the farmers’ protests against the government’s agricultural laws being one such example. The 2016 demonetization of part of the country’s paper currency still haunts many, and Internet penetration is yet to cross 50%.

However, India also has the largest diaspora in the world, with approximately 18 million people living outside the country. Crypto innovation could lead to hundreds of millions of dollars being saved on remittance charges as money is sent across borders.

But for the time being, it seems India’s urban residents are more bullish about crypto than its government.

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Source: https://ambcrypto.com/indian-government-cautious-about-crypto-adoption-cbdc-is-a-possibility

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A Deep Dive Into The Bitcoin Wallets Of U.S Congress Members, And Why Bitcoiners Are Strongly Against Them

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A Deep Dive Into The Bitcoin Wallets Of U.S Congress Members, And Why Bitcoiners Are Strongly Against Them

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Key takeaways

  • U.S. Congress’ split disposition towards cryptocurrencies raises concerns among market participants.
  • Bitcoin proponent, James Loop goes digging into the financial disclosures of Congress members.
  • His findings revealed only three Congress members have ever disclosed that they hold Bitcoin.

The United States is a key base for innovation and adoption in the cryptocurrency industry. According to data from Crunchbase, there are at least 1,135 organizations founded in the U.S. that provide various cryptocurrency-related services.

Despite the broad adoption of the asset class by the country’s citizens, the government is still divided on opinions about the growing cryptocurrency industry. This can be seen in the U.S. Congress where members of Congress are split between those who support and those who do not support Bitcoin, the most prominent cryptocurrency.

This polarised disposition of Congress has been a pain point for Bitcoiners. Bitcoin market participants have pointed out several issues that emanate from the fact that there are still members of Congress who have not shown themselves to fully understand Bitcoin.

The sentiment is that Congress members who do not fully understand the asset, having not used it, should not be responsible for making laws about it. Additionally, market participants also think it will be a conflict of interest if members of Congress who oppose Bitcoin are found to be holding Bitcoin or if those who support it do not own any. 

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Jameson Lopp, the co-founder, and chief technology officer of Casa – a leading provider of Bitcoin self custody solutions, has gone digging into the United States Senate Financial Disclosures portal. The investigation was carried out to identify Congress members who have declared holdings of cryptocurrencies, and Bitcoin in particular, in their portfolios. 

His findings paint a dismal picture as the majority of the members of Congress who have been vocal in supporting Bitcoin have not held the asset at all according to their financial disclosures for the year ending 2020.

According to his findings, only 3 Congress members have disclosed that they own Bitcoin. The now-retired Representative Bob Goodlatte of Virginia was the first Congressman to disclose the ownership of Bitcoin, doing so in 2017 even before laws were passed to make disclosure mandatory. According to his disclosure, he owned between $1,000 and $15,000 of Bitcoin at the time.

Among currently seated Congress members, only Senators Cynthia Lummis and Pat Toomey have reported Bitcoin holdings in their portfolios in 2020. Senator  Lummis reported owning $100,000 – $250,000 of bitcoin in 2020 making up between 0.6% and 2.75% of her net worth. Similarly, Senator Pat Toomey reported purchasing $1,001 – $15,000 of GBTC in June 2021. The GBTC investment is between 0.01% and 0.7% of his net worth.

The sleuth however concedes that he did not have the time and resources to go through the financial disclosures of all 535 congressional members. Nonetheless, it is telling that of the ones he checked, even members of caucuses in Congress that are affiliated to cryptocurrency and members that have drafted bills that will provide clarity for the industry do not hold Bitcoin or other cryptocurrencies as their financial disclosures show.

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Source: https://zycrypto.com/a-deep-dive-into-the-bitcoin-wallets-of-u-s-congress-members-and-why-bitcoiners-are-strongly-against-them/

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China Again? — Why The Crypto Market Lost Over $300 Billion In Hours And What To Expect

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China Reemphasizes It's Not Yet Done With Clamping Down On Bitcoin

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Key takeaways:

  • Crypto-market records over s$1 billion worth of Crypto liquidations in hours. 
  • Liquidated long positions significantly surpass shorts.
  • Fundamental factors pose serious threat to the market, but the road to recovery is near.

The crypto market has been hit with yet another massive liquidation. Within the last 24hrs, a whopping $1.03 billion worth of long and short positions have been liquidated, as reported by the aggregate derivative exchange platform ByBt.

When traders are long on a particular asset, they are simply gaining exposure to the cryptocurrency in question, in hopes that prices will surge significantly at a later time. It appears that a lot of investors were bullish on crypto for the most part, as long positions were significantly higher than shorts. Precisely $946.10 million worth of crypto was liquidated, while $6.56 million short positions were liquidated.

Liquidations usually take place in the crypto market when a trader’s leveraged position is forcefully sealed by an exchange when the trader’s initial margin is partially or totally lost. Futures and margin trading is usually where liquidation is common.

Many market pundits have warned against over-leverage, which they point to as the case of repeated liquidation. However, despite cryptocurrencies being high-risk due to the intense volatility, leveraging provides an opportunity for investors to generate significant profit. For this reason, liquidations are imminent.

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On a larger spectrum, the question at hand is how the market will be affected going forward. Although no one can accurately predict, recent events hint that the dip could go even deeper, no thanks to fundamental factors like the ongoing Evergrande crisis.

“The Hong Kong stock market plummeted, triggering a decline in global markets and cryptocurrencies. The main reason is Evergrande, China’s largest real estate company with nearly 2 trillion debts.” wrote Chinese journalist Colin Wu.

Thus far, leading assets like Bitcoin, Ether, Solana, Cardano, and many others have dropped in price value and are, at this time, still going downwards. Bitcoin has plummeted to $42,928. While losing more than 7% in value today. Ether, XRP, SOL, DOGE, and Cardano are likewise seeing an extensive decline.

In response to the dip, analysts have responded to their previous sentiments on Bitcoin especially, saying that the expected floor price for this month remains at $42,000 and that a bounce will follow a while later. Altcoin analysts are also keeping their fingers crossed to see how the next 24hrs play out before predicting the market’s trajectory.

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Source: https://zycrypto.com/china-again-why-the-crypto-market-lost-over-300-billion-in-hours-and-what-to-expect/

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