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Economist Warns of “Bitcoin Aristocracy” Ruling the World

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Economist Warns of “Bitcoin Aristocracy” Ruling the World | Crypto Briefing



















Economist Dr. Jon Danielsson envisions a zero-sum game for Bitcoin where for crypto to “succeed,” the world must perish.


Shutterstock cover by tomertu

Key Takeaways

  • Dr. Danielsson stated that support of Bitcoin is based in “mysticism,” comparing Bitcoin to stamps or beanie babies.
  • He claimed that Bitcoin must be used for commercial transactions to be successful.
  • The article warned of wealth disparity created by high Bitcoin price points, ignoring the huge disparity of the world we already live in.

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Dr. Jon Danielsson, the Director of the Systemic Risk Centre at the London School of Economics, has written one of the most bearish takes on Bitcoin to date — but his argument may have missed a few key points.

BTC Is Not a Safe Haven

Danielsson wrote that “most of us would not want to live in a society where bitcoin [sic] succeeds.”

He stated that without providing a valuable service, investing in crypto is like “collecting stamps or beanie babies,” adding:

“The bitcoin [sic] enthusiasts are quite vague on what success means beyond rising prices, they seem more fond of arguments wrapped in mysticism than basic economic logic.”

Danielsson wrote that Bitcoin must be used in commercial transactions to be successful, saying all other use cases depend on it. He went as far as describing BTC’s success as a zero-sum game. It either replaces current transaction mediums like the Euro, Pound, Yen, and so on, or it utterly fails.

Use cases beyond this, such as a safe haven asset, are superfluous, according to Danielsson.

In his argument, he also cited Dr. Mohammed Cheema, a Senior Lecturer in Finance at the University of Waikato. In Cheema’s article, he pointed to research that crypto is viewed as risky, citing himself as his own source, before adding that BTC is not a safe haven — and he’s right.

There is little hard evidence that Bitcoin is currently a safe haven asset. Indeed quite the opposite.

During the March 2020 crash, BTC fell as hard as the rest of the global markets. Moreover, analysts within and without the crypto industry have reminded that a small allocation can improve a portfolio’s efficiency.

But does Bitcoin need to be commercially transacted like Visa to be successful? For many, a hedge against inflation suffices. And if one considers this objective, then BTC has certainly achieved its goal.

Of all assets, Bitcoin was the best performing in 2020.

Is Bitcoin Successful?

Danielsson clarified with Crypto Briefing that Bitcoin’s use case as a hedge against inflation requires people to continue to invest in Bitcoin, and this argument is perhaps more compelling.

However, this ignores Bitcoin’s other economic functions.

Bitcoin can be used to transfer value peer-to-peer at any time, day or night, circumventing the banking system’s weekend limitations. It has also played a key role in environments where financial censorship is common such as Russia, Belarus, and many other nations.

Though unpolished, Layer 2 solutions like Bitcoin’s Lightning Network also envision an effective payments solution for the leading cryptocurrency.

Danielsson’s colleague and head of research at Blockchain.com, Dr. Garrick Hileman, weighed in to point out some of the argument’s apparent flaws.

Hileman’s thesis makes sense in the context of large corporate investors like Tesla and MicroStrategy using Bitcoin to counteract the downside risk of fiat. Both CEOs have been vocal in their worries about asset and fiat inflation. They are not seeking a cash alternative in these investments, as Danielsson supposes.

He writes:

“The value proposition for bitcoin is that it will displace fiat money – the dollar, euro, renminbi and all the others – either fully or partially. As I argue below, I think it is inevitable that it will be ‘either, or’ – either full displacement or no displacement, complete success or failure.”

Finally, Danielsson issued a dire warning of a new global elite rising from Bitcoin’s success in this regard.

BTC Wealth Distribution Is Problematic

Danielsson envisioned a future in which Bitcoin has fully displaced fiat currency, saying:

“The current owners of bitcoin will become the wealthiest people in the world, rivalling the kings and emperors that ruled over empires in centuries past. They literally will own all the money. They can buy anything they want.”

This argument fails to mention the world currently operates this way. The richest 1% are on track to control two-thirds of the world’s wealth. In the United States, 1% of the population controls 38% of the wealth. Still, it cannot be denied that Bitcoin may follow a similar fate.

Wallet distribution metrics suggest that an outsized portion of BTC’s supply is in the hands of just 2% of wallets.

Source: BTC.com

Danielsson does outline one real problem with Bitcoin. Is it cash, or is it a speculative asset?

While the whitepaper envisioned a form of digital cash that would decentralize finance and perhaps shake up the balance of power, these days, Bitcoin’s role as a store of value and a hedge against inflation has seen the “M1” use case for the cryptocurrency take a back seat.

Unlike many traditional assets, however, it’s very easy for people from all walks of life to invest in BTC and trade it peer to peer or hold it as a store of value.

Disclosure: The author held Bitcoin at the time of press.

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Source: https://cryptobriefing.com/economist-warns-bitcoin-aristocracy-ruling-world/

Blockchain

Ethernity Chain Immortalizes Tony Hawk’s Last 540 Skate Trick With NFT

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[Press Release – Los Angeles, California, 12th May, 2021]

Iconic skater Tony Hawk will soon have his own NFT thanks to the Ethernity Chain platform. The new NFT collection will launch on Wednesday May 12 at 12PM ET and be available for 24 hours.

Hawk recently performed what he insists will be HIS last ever “540” skate trick, and the moment in time will be preserved for eternity as an authenticated NFT (aNFT). The winning bidder will also receive the actual skateboard and shoes used in the final trick.

The legendary skater’s last ever 540 constitutes just part of a coveted collection co-created by influential digital artist Ondrej Zunka, a boyhood fan of Hawk.

“Birdman” will also provide one of his own skateboards, modeled after the inverted handstand and represented as an aNFT. Ethernity plans to raffle the skateboard randomly to a buyer of the aNFT.

The collection is completed by Graffiti Wall, a colorful artwork featuring contributions from skating enthusiasts in the form of messages, drawings and slogans etched on a blank canvas.

“I spend a lot of time around skateparks and there’s always a lot of graffiti everywhere, so I made this public Graffiti Wall inviting friends, family and the public to add a note to Tony,” said Zunka.

“I’ve created a texture from all of these messages and projected them onto the ramps, so whoever participated is now part of these two NFTs.”

Ethernity, which is committed to bringing legendary figures, real world collectibles, and fan engagement to blockchain, recently released aNFTs of Muhammad Ali, Pelé and baseball star Fernando Tatlis Jr. As with Hawk’s collection, each auction also included physical collectibles such as custom baseball bats and gloves worn by the boxer.

About Ethernity

Ethernity is exploring applications for non-fungible tokens (NFTs) within the context of art and philanthropy. It provides a way for celebrities and public figures to endorse digital artwork created by renowned artists. Anyone can purchase each limited edition artwork, with a portion of the proceeds going to charitable causes that the celebrity supports. Ethernity was founded by early Bitcoin investor and NFT innovator Nick Rose Ntertsas.

Learn more: http://ethernity.io/

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Source: https://cryptopotato.com/ethernity-chain-immortalizes-tony-hawks-last-540-skate-trick-with-nft/

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Blockchain

BitMEX Executives to Face Trial in March 2022

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The executives of the derivatives trading platform – BitMEX – will face trial in March next year. The money laundering case will come 18 months after charges were first filed. The former members of BitMEX can face up to 5 years in prison and a $250,000 fine if found guilty.

The Trio Heads to Trial

Last year, US officials accused the CEO of the company Arthur Hayes, the co-founder Benjamin Delo, and the chief technology officer Samuel Reed of violating the Bank Secrecy Act. Moreover, the members of BitMEX were served with money-laundering charges.

On May 11th – 18 months after the first accusations against them – New York District Judge John Koeltl set the trial date for March 28th, 2022. Furthermore, Gregory Dwyer – BitMEX’s head of business development – also faces charges but will appear in court separately.

Even though the company’s headquarters are in the Seychelles, the US Department of Justice accused BitMEX of failing to apply anti-money laundering procedures while doing business with US-based customers.

Interestingly enough, the ex-CEO of BitMEX – Arthur Hayes – said that the exotic island was a more convenient place for business as it was much easier to bribe Seychelles’ authorities rather than the US ones. The former executives of the cryptocurrency exchange could face a maximum of five years in prison and a $250,000 fine.


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Where Was Arthur Hayes?

Attorney Jessica Greenwood told the court that Hayes has ”discussed a surrender date of April 6th, 2021 in Hawaii.” She added that ”the plan is to notify the Court in advance of that appearance and discuss logistics” around his submission.

As CryptoPotato reported, even after his remote announcement Hayes continued to reside abroad and explained that he would only visit the United States whenever has to face the trial in New York.

In the end, the former BitMEX CEO indeed turned himself in on April 6th, 2021. However, the officials released him on a $10 million bond pending the future court process.

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Source: https://cryptopotato.com/bitmex-executives-to-face-trial-in-march-2022/

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dotmoovs Raises $840,000 From Strategic Investors and Partners

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[Press Release – Tallinn, Estonia, 12th May, 2021]

dotmoovs, an NFT platform powered by advanced computer vision algorithms has successfully completed a private funding round of $840,000 from notable investors. Amongst the investors are Moonrock Capital, Morningstar Ventures, Spark Digital Capital, Ascensive Assets, Rarestone, Building Blocks, MarketAcross, AU21 and GBV Capital.

The sports industry needs a solution for giving everyone a real chance to earn from their skills. dotmoovs is designed to bridge the gap between physical and geographic limitations, assessment of skill and finally – monetisation. Our vision is to build a powerful sports platform where everyone can challenge their friends or any other similar skilled players in the World for a challenge in their favourite sport.

“We are proud to have such notable investors joining us in building the first crypto mobile worldwide sports competitive environment. We know they can boost our growth and provide industry specific insight and knowledge which will be a deciding factor for us” said Ricardo Martins Costa, head of growth of dotmoovs.

“Our vision is a robust platform powered by blockchain and a state-of-the-art AI system that can analyse videos of players performing sports challenges in real-time” Ricardo adds.

“Moonrock Capital and Morningstar Ventures have come together to assist in incubating and bringing the dotmoovs project together. We are grateful and honored by the trust shown by dotmoovs’ team to become their official incubators and lead investors. Working closely with the team for some time now, we are highly impressed with their professionalism, expertise, and what they’ve developed so far. We are very excited to see this ambitious and revolutionary project come to life – combining sports, blockchain, and NFTs with dotmoovs’ vision of growth. The level of their supporting technology is not something we see every day. For these reasons, we are thrilled to be a part of dotmoovs’ journey and helping them achieve their vision.” said Simon Dedic, Managing Partner Moonrock Capital, and Danilo Carlucci, CIO Morningstar Ventures.

About dotmoovs

dotmoovs is the first crypto mobile worldwide competitive environment. The platforms allow users to compete with others around the world just by bringing their skills, ambition, and smartphone. dotmoov’s AI-based video referee will assess their performance in real-time. Powered by blockchain technology, sport competition will enable fair challenges and access to unique digital assets.

Website | Twitter | Telegram | Telegram Announcements

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Source: https://cryptopotato.com/dotmoovs-raises-840000-from-strategic-investors-and-partners/

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