Events

A Summary Of Bitcoin’s Massive First Quarter

07/04/2021 by Idelto Editor

Stanislav Kozlovski walks us through the most important events for Bitcoin in the first quarter of 2021.

Gradually, then suddenly.

It is the way that Hemingway penned the process of going bankrupt: first comes a series of incremental steps which bring you closer to bankruptcy, until reality hits you and a sudden realization of what has occurred dawns upon you.

This process can be thought of as a universal one: it applies to many things in life, like achieving success, declining health or the once-in-a-lifetime emergence of a brand-new asset class.

Across the “gradually, then suddenly” spectrum, Bitcoin is inching closer and closer to the “suddenly” part—and this quarter is an immaculate example of that.

In this piece, we will provide a short overview of all the Bitcoin news in the first quarter of 2021. Let’s dig in.

Corporate Treasury Adoption

High-profile companies continued to accumulate bitcoin in their treasury, with Square buying $170 million worth of BTC and MicroStrategy performing the carry trade of the decade by taking out a $1.05 billion bond loan at 0% interest to buy bitcoin.

The biggest splash this quarter was made by Tesla’s surprise bitcoin investment when they put $1.5 billion (7.7%) of their cash holdings into bitcoin, started accepting bitcoin payments for their cars (promising to not convert the proceeds into fiat) and, to top it off, contributed an important security patch to the open-source ecosystem’s BTCPay Server project. Just like that, the company owned by the world’s richest man established itself as a Bitcoin ally—from zero to 100, in less than a quarter.

Other, smaller publicly traded companies also piled on: Marathon invested $150 million, Seetee with $58.6 million and Meitu with $17.9 million. It is reasonable to assume that more companies are accumulating bitcoin but do not plan to announce it. One such example is a New Zealand retirement fund which had allocated 5 percent to bitcoin back in October 2020 but was only recently reported or German company SynBiotic which did not disclose its holdings, just the intention to shift free capital into BTC.

A survey showed that 5 percent of finance executives plan to hold BTC this year which is certainly a much larger number than the handful of organizations that have publicly announced holdings so far.

Financial Institution Support

Like a set of dominos, every financial institution seems to be scrambling to announce support for bitcoin as their competition is rushing to do the same, resulting in a whirlwind of announcements.

Bank of New York Mellon, the world’s largest custodian with $41 trillion assets under management (AUM) and the US’ oldest bank announced that it will offer custody for digital assets like bitcoin.

A day after, news broke about the sixth largest European bank—Deutsche Bank—prototyping its own digital custody platform and aiming to roll out a minimum viable product in 2021.

Then news started flooding in:

JPMorgan made a SEC filing of a new product consisting of 11 stocks which have indirect exposure to bitcoin.
Goldman Sachs announced it will offer clients bitcoin investment vehicles, a bit after restarting its cryptocurrency trading desk.
Morgan Stanley made an SEC filing that revealed they want 12 of their institutional funds to offer exposure to bitcoin and additionally announced they will offer their wealthy clients access to bitcoin funds as well.
Citibank issued a long report “Bitcoin: At the Tipping Point”, describing how it is on the cusp of mainstream acceptance.
Fidelity issued a report, “Understanding Bitcoin”, which acknowledges it as a legitimate asset class and saying it is worth including in a portfolio.

Even popular payment networks rushed to announce support for digital assets:

Mastercard announced that they plan to integrate cryptocurrencies into their network.
Visa announced support for USD Coin to be used to settle transactions on its payment network. Admittingly on the Ethereum blockchain, this is a large step forward for the industry; it is not a stretch to imagine them extending support for lightning. CEO Al Kelly mentioned that they are working on enabling bitcoin purchases on Visa credentials.
PayPal launched a new service that allows US customers to seamlessly use bitcoin as payment to the company’s 29 million merchants while also signaling a desire to move into custody with their recent acquisition of Curv.

Smaller banks around the world are also converging on bitcoin support, just not making the news. For example, a small private German bank, Donner & Reuschel, which has been in business for 223 years, is offering cryptocurrency buying and custody or Blue Ridge Bank which became the first US commercial bank to provide access to bitcoin at its ATMs, allowing people to purchase directly from them.

Institutional Interest

Institutions continued to show interest for the asset throughout 2021, with BlackRock, the world’s largest asset manager, admitting it started to dabble in bitcoin and Soros Fund Management implying that they already own bitcoin.

Canada made headlines earlier this year with the approval of North America’s first bitcoin ETF, Purpose’s Bitcoin ETF, has amassed over $950 million ($1.2 billion Canadian dollars) of assets under management so far, beating Canada’s largest gold ETF which is at approximately $855 million (CA$1.08 billion) AUM. This product also broke the Canadian record for first-day trading volumes of an ETF by trading 10x the average first-day volume of an average Canadian ETF. Soon after, Canada saw two more bitcoin ETFs (Evolve and CI Galaxy) and is on track to have up to five ETFs with $1.6–2.4 billion (CA$2–3 billion) in AUM.

Meanwhile, over in the United States, the SEC is drowning in bitcoin ETF applications. A US-based bitcoin ETF seems imminent. There are six firms that have filed applications to the SEC proposing bitcoin ETFs that either track and hold the underlying asset directly or have more indirect exposure through funds which invest in bitcoin. As of writing, the firms who have applied are Fidelity, Goldman Sachs, NYDIG, SkyBridge Capital, Valkyrie and Cboe.

To scour the full continent, South America also approved its first ETF in Brazil and is set to go live in summer 2021.

A View of the World in 2021

Just as we were all ready to take a break from 2020, this year proved to be just as dynamic.

It all started with the capitol riots and massive censorship of sitting president of the United States Donald Trump, where several high-profile internet platforms acted in a coordinated fashion to completely remove him from the mainstream internet, with some banks also announcing they would stop doing business with him. Regardless of your political views, this massively unprecedented event sent shocks throughout the world by exposing the scary power that these centralized platforms have. It only goes to show that a censorship-resistant and permissionless currency is desperately needed in a world which can erase even the most prominent figure in a matter of days.

Countries burdened with inflation and a failing currency saw their bitcoin interest skyrocket, with Google searches for bitcoin in Argentina reaching peak popularity (300 percent-plus growth) and a spike in Turkey, where their currency lost 15 percent purchasing power in a single day. Bitcoin seems to be heavily favored compared to gold in such burdened countries, consistently surpassing gold’s Google search volume in Venezuela and Nigeria.

In a world which seems broken, everything seemingly continues to head downhill. Broad money supply was already set to increase 12 percent year over year just from the current planned Federal Reserve purchases ($120 billion a month) when the International Monetary Fund (IMF) urged every country to take on more debt and “spend as much as it can.”

This advice was seemingly taken, as the United States signed a $1.9 trillion stimulus package, followed up by immediately announcing a newly planned $2.3 trillion plan for rebuilding infrastructure. Modern monetary theory is in full effect, as the Federal Reserve is set to own more US treasuries than foreigners any minute now.

As always, inflation numbers are unlikely to reflect what’s actually happening, as official numbers can rarely be trusted. The Federal Reserve’s chairman Jerome Powell asserts this belief as he publicly states that the real unemployment rate is closer to 10 percent compared to the officially stated one of 6.3 percent. If a government official cannot trust the publicly reported numbers, how can an average citizen?

Fear, Uncertainty and Doubt

It all started with this anonymously published fear-provoking article about Tether’s alleged instability which might have scared some investors temporarily but ultimately culminated with Tether finally settling their case with the New York Attorney General and promising to issue quarterly reports of what’s backing the stablecoin.

This quarter we saw many government officials speak about bitcoin from Europe’s Christine Lagarde accusing bitcoin of being involved in “funny business” and the United States’ Janet Yellen suggesting curtailing use because cryptocurrencies are mainly used for “illegal financing.” Both of these statements are provably false by Chainanalysis’ latest report, which found that the criminal share of all cryptocurrency activity in 2020 was just 0.34 percent.

Later, US officials began presenting the energy narrative, talking about how bitcoin is “extremely inefficient,” how it uses a “staggering amount” of energy and continued to speak condescendingly about it, with the Federal Reserve’s Jerome Powell implying it is as useless as gold.

It is likely that officials are scared of the asset, as they know that banning it is futile.

History, this quarter including, has proven that countries cannot outright ban bitcoin; they can only temporarily ban their citizens from participating in the network. Some countries like Nigeria realized this inevitability and backtracked on their previous ban within a month after announcing it.

While noisy, this year did not bring any new content with relation to FUD, rather, it simply recycled old content that has long been debunked. Despite the unoriginal negative press, this quarter we saw many people write very eloquently and positively about bitcoin, in particular about its energy use.

Worthy mentions include Stone Ridge’s annual letter, which changed many people’s minds about how eco-friendly bitcoin mining is and can grow to be. Later, Seetee followed up with a letter from its billionaire Norwegian founder citing similar arguments. Both letters were certain that bitcoin will enable many more renewable-energy projects than otherwise would be possible, mainly due to miners’ location-independent nature.

Balaji Srinivasan also wrote an extensive piece about how India would be smart in canceling its proposed bitcoin ban and embracing the technology directly, going as far as to exhaustively describe what they should actually do.

Regulations

Some pro-bitcoin US politicians established key positions in the government, like Cynthia Lummis who joined the banking committee, Former TD Ameritrade Head of Digital Assets Sunayna Tuteja was named US Federal Reserve chief innovation officer and Gary Gesler, who has taught a blockchain course in MIT, is nominated for leading the SEC.

There was mixed news regulations-wise. As we started the year with the FinCEN proposal that had an unreasonably short comment period of 14 days over the holiday season, the onslaught of comments from the community made it so that they had to considerably extend it, with the new Biden administration significantly extending the comment period by some 75 days.

Throughout that period, there was a very positive regulatory change of the Comptroller of the Currency (OCC) providing guidance in having banks participate in public blockchain systems as another form of settlement infrastructure (like Swift and ACH).

Further, Kentucky signed a bill into law that incentivizes bitcoin mining in the state by allowing for tax exemptions on property and electricity used in mining.

Miami, the hosting city of the Bitcoin 2021 Conference, proved to capture attention in the Bitcoin space with the prolific mayor Francis Suarez actively engaging with the industry through Twitter and in-person meetings with famous Bitcoin proponents like the Winklevoss twins. Suarez has also publicly pushed back on some of the negative comments from Janet Yellen and has said to be actively exploring investing part of the city’s treasury into bitcoin. He said that they are procuring a vendor to offer employees to get a percentage of their salary in bitcoin, allow Miami’s residents to pay for fees in bitcoin, potentially also allow taxes to be paid in bitcoin and rumours say they’re working on giving mining incentives to attract investment.

The city, which is aiming to become the crypto capital of the world, even hired a chief technology officer for the first time ever.

With all this positive news, there was bound to be some negativity. The intergovernmental Financial Action Task Force, consisting of non-elected officials, formed ill-detailed crypto regulatory guidelines, with the risk of the current interpretation prohibiting KYC-free use of decentralized networks.

Investments

Throughout Q1, the Bitcoin industry continued to see a large amount of investments:

Coinbase, in what is hailed as a watershed moment, has been gearing up for an IPO with the market valuing it over $100 billion: it is scheduled to do so on April 14, 2021.
Cipher Mining is set to go public via a SPAC in a deal that is set to provide them with $595 million.
Blockchain.com seemingly raised money twice, $120 million in a Venture Round in February 2021 and $300 million in a Series C in March 2021.
BlockFi completed a $350 million Series D round, valuing the company at $3 billion, and also recruited the World Gold Council’s director.
NYDIG, the firm which facilitated MassMutual’s bitcoin purchase, raised $200 million from large names like Soros, Morgan Stanley and New York Life.
Fireblocks, cryptocurrency custody infrastructure provider, raised $133 million in a Series C.
Jack Dorsey and Jay-Z invested 500 BTC into a fund to support Bitcoin development in Africa and India.
Federally chartered crypto bank Anchorage raised $80 million.
Compute North, a North American bitcoin American, announced $25 million in gross capital funding.
Unchained Capital closed a $5.5 million seed funding round, planning to build out bitcoin-native infrastructure.
Topic Square received a $4.7 million investment to develop an open-source security chip for use in popular hardware wallets.
Casa raised $4 million in a seed round.
Ledn raised a $2.7 million financing round.
MintGreen, a Canadian startup aiming to capture heat from bitcoin mining, closed a seed financing round.
A Pakistan province invested in two hydroelectric-powered mining farms.
Ukraine considered building a bitcoin mining center based on excess nuclear power.

Capitulations

Throughout Bitcoin’s history, many pundits have openly dismissed the asset while bitcoiners have always seen their incompetence through the fallacy in their arguments.

In a petty battle between Norwegian billionaires, Øystein Stray Spetalen was quick to reverse course after seeing the other Norwegian billionaire Kjell Inge Røkke’s company Seetee buy $58 million worth of bitcoin. In a conference in early March 2021, he expressed his negative views about bitcoin, but just a couple of weeks later, he realized he was wrong and bought some.

Many previously outspoken opponents of bitcoin reversed course this quarter, like The Motley Fool which capitulated and bought $5 million worth of bitcoin, or all of the large banks:

*Source: https://twitter.com/DocumentingBTC/status/1375893554741051396*

We’ve seen hugely respected names in the investment industry turn from skeptic to lukewarm, like Howard Marks who initially called bitcoin a pyramid scheme only to admit this year that he did not understand it. Ray Dalio has been trekking across the spectrum as well, most recently scheduled to speak at two crypto conferences: Texas A&M Bitcoin Conference inApril 2021 and Consensus in May 2021.

Bitcoin has the power to convert even the most faithful gold believers, like long-time gold bull Jeffrey Gundlach who turned neutral on his views on gold and the dollar, admitting bitcoin may be the better bet which is no surprise considering the Bank of Singapore implied the same thing in a research note.

Retail interest has been rekindled over the quarter as well, with many exchanges recording all-time high traffic and bitcoin-related social media seeing parabolic growth:

*/r/bitcoin subreddit subscribed growth. Source: https://subredditstats.com/r/bitcoin*

Conclusion

In the same way that people never notice the “gradually” part of bankruptcy and are left struggling with solutions once the “suddenly” part hits, today’s market participants are scrambling to establish their position in this new Bitcoin world, be it as a service provider, investor or anything in-between.

While the flurry of news can certainly seem like we are in the “suddenly” part of the spectrum, it is worth taking a step back, observing the bigger picture and realizing we still have a long way to go.

Today, bitcoin’s market cap is roughly 10 percent of gold’s market cap, a five-time jump from where it was in May 2020 but still a far cry away from its first milestone of surpassing gold. Bitcoin’s market cap is still significantly less than the whole $1.9 trillion stimulus package that the United States printed out of thin air. Nevertheless, since 2020, there have been clear signs that bitcoin demand is growing incredibly fast, much faster than the market demand for gold, despite being worth only a small fraction of gold’s market cap.

My intuition tells me that we are still a fair amount of time away from jaw-dropping adoption. Money, after all, is humanity’s most valued asset, as the whole world readily trades its scarcest resource (time) for it. Bitcoin is a global permissionless network consisting of the soundest money the world has ever seen. Any quarter which truly embodies the “suddenly” part of the market penetration of this global asset will surely not be able to fit inside a single sub-3000-word piece.

This is a guest post by Stanislav Kozlovski. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine

On September 19, Bear Arms N’ Bitcoin Will Host Full Stack Freedom

24/08/2020 by Idelto Editor

Although it represents a revolutionary step in individuals’ ability to gain financial freedom, Bitcoin in and of itself is not enough to achieve complete sovereignty from third parties or central governments. As many adopters of the technology know, Bitcoin is not private or anonymous.

For many, basic pseudonymity (as well as Bitcoin’s other advantages) is enough. But for some, Bitcoin is merely a tool in the privacy toolbox — something that helps achieve the freedom they seek as part of a larger suite of dissident solutions. The upcoming Bear Arms N’ Bitcoin conference is for those who are interested in a more robust exploration of the technology and tools that can protect freedom.

“The goal is to help people increase their financial and physical sovereignty and freedom,” Ragnar Lifthrasir, an event organizer, explained to Bitcoin Magazine. “To do that, you need more than just one technology, like bitcoin, or one self-defense tool, like firearms. You need a full stack that’s integrated.”

A Full-Stack Freedom Tech Conference

Bear Arms N’ Bitcoin, which is taking place in Austin on September 19 and 20, will explore topics including crypto e-commerce and legal strategies. But as the name implies, the primary focus will rest on Bitcoin — particularly anonymous and surveillance-resistant methods for using it — and firearms — particularly homemade guns and ammo.

Bitcoin-specific content will include presentations from Josh Humphrey, who has developed a privacy-focused framework for bitcoin e-commerce and open-source technology called “Mithril”; DiverterBTC, who will share a comprehensive and easily-understood guide to bitcoin mining and discuss coin mixing as two surveilance-resistant practices in Bitcoin; and Dr. Brian Gross, who will discuss the Blockstream satellite, which is an internet-provider-free way of confirming Bitcoin transactions and maintaining the blockchain.

The event will also feature discussions about DIY guns and ammo from leading designers who circumvent the traditional firearms retail industry by utilizing 3D printing, numeral control (CNC) of machining tools and electrochemical machining to craft their own. Attendees will visit a private gun range for target shooting on the second day of the event.

“Freedom tech is those tools that put control of one’s money, information, communication and meat space security under control of the individual, away from malevolent actors, be they public or private,” Lifthrasir said of the guiding content behind the event. “Freedom tech provides asymmetric defense against more powerful opponents. Guns and bitcoin are my favorite examples.”

Hosting An In-Person Privacy Event In 2020

Like any other in-person event organizer this year, Lifthrasir had to be nimble as he planned Bear Arms N’ Bitcoin. The event was originally scheduled to take place in Portland in June, but Oregon’s governor extended a state of emergency and the venue cancelled their contract.

The organizers decided to move to a state with more relaxed COVID-19 regulations, and while Lifthrasir emphasized that they are following all government health guidelines, cancelling the event outright is not an option.

“Everyone participating in the conference is allergic to government control, but we’re adapting,” he said. “Come hell or high water, Bear Arms N’ Bitcoin 2020 is happening.”

But in-person restrictions brought on by the spread of coronavirus are not the only unique organizational hurdles faced by Bear Arms N’ Bitcoin. For an event that emphasizes freedom, privacy, the absence of digitally-recorded personal data, etc., ticket registration and in-person attendance require some special considerations.

The event encourages attendees to purchase tickets using BTC, a pseudonym and an email address that’s not tied to any personal information. It is accepting payments through a self-hosted BTCPay Server and WordPress website, to prevent third parties from accessing attendee information. The organizers will not maintain a list of names or pseudonyms to confirm registrants at the door, but leverage the email list instead.

Photography and video at the event are prohibited, except for those who opt into photos. Face masks will be required at the event, and attendees are welcomed to supplement them with additional identity-obfuscating accessories.

Through these methods, Bear Arms N’ Bitcoin attendees will have the chance to celebrate Bitcoin, and their other favorite sovereignty solutions, at an event that’s been tailor made for them.

The post On September 19, Bear Arms N’ Bitcoin Will Host Full Stack Freedom appeared first on Bitcoin Magazine.

Bitcoin Cash Meetups Go Virtual in Japan to Combat Virus, Allowing Members to Choose

15/03/2020 by Idelto Editor

Due to the spread of the COVID-19 virus, BCH meetup groups in Tokyo and Osaka, Japan, have announced they will be offering a virtual option for those wishing to avoid crowded places and to participate digitally, while still supporting merchants. In Tokyo, physical venues will still be independently booked for those opting to meet face-to-face, allowing bitcoiners to choose their own experience. News.Bitcoin.com asked organizers some questions about the announcement, how it will work, and difficulties in coming to consensus on how to best navigate this challenge.

Also read: These Online Stores Will Sell You Masks, Gloves, Emergency Items for Cryptocurrency

Japan BCH Meetups Go Virtual

Finding a local Bitcoin Cash meetup group near you isn’t hard to do. As BCH enthusiasts are all around the world, a simple scan of Bitcoin.com’s Events page map can have you meeting up with your fellow crypto heads, chewing the fat, and supporting local BCH merchants in no time.

In light of the current coronavirus health concerns, two of these meetups — until now canceled for the month of March — have announced they will be heading to the virtual realm to help protect their health and that of others, while still getting together to support Bitcoin Cash. In an announcement shared today by Tokyo Bitcoin Cash Meetup organizer Akane Yokoo, members were notified that both Osaka and Tokyo bitcoin cashers can now get together as one group online:

Our virtual meetups will start this coming Wednesday March 18th from 7:30pm and we plan to host every Wednesday at the same time when our physical meetups happen. To join, please RSVP on Meetup.com and we will send you instructions and links to join the meetup. We will also update details for each meetup on Meetup.com including the venues.

Organizers Weigh in on the Decision, Discuss Details of Virtual Meetups

Tokyo organizers Aaron Gutman and Akane Yoko, along with Osaka organizers Yumeno and Cheaplightning, answered some questions for news.Bitcoin.com, weighing in on the organization process.

“Most of us are already engaged in some form of remote work and are accustomed to using online collaboration tools, and some of us are pretty big on VR,” said Gutman. Yumeno of the Osaka group noted:

It will also give the somewhat small Osaka community a better opportunity to mix with the larger Tokyo community. I am looking forward to hearing the Osaka meetup community members perspective.

In her own read.cash post on the matter, Yokoo noted some of the potential difficulties and also possible opportunities of the virtual meetups, which will continue indefinitely until the virus situation normalizes. “One of the things we were concerned that we won’t be able to do with online meetups is it is hard to create an environment where people can talk to whoever they like, with the language they choose if the tool only allows certain people to talk at a time such as a zoom call.” She continued:

VR (Virtual Reality) should be able to solve these issues all together but it will be expensive to make this happen soon. We do hope to eventually offer the VR options, while allowing people without it to be able to join too.

When asked about struggles in addressing the challenging COVID-19 situation, she responded: “It had been frustrating because we wanted to keep hosting meetups because many of our members wished to continue the meetups but at the same time we did not want to encourage opportunities for people to get sick and spread it.”

Cheaplightning also expressed frustration with the difficult situation:

At our last meetup I had to really think about if it is rude to be wearing a mask and offer alcohol tissues to people. There is this weird stigma and sort of damned if you do damned if you don’t aspect to it.

In fact, though official meetups had been canceled for March, some resolute bitcoin cashers in Tokyo nonetheless ventured out and participated in their own meetups at bitcoin cash-friendly merchants for the first two weeks of the month. Yokoo clarified:

Even though we do not want to encourage members to go out and get sick, members should be free to do whatever they choose to do. If they choose to get together physically, the merchants are open for business as usual (look at our Meetup.com group to find which venues are scheduled for each meetup).

Cheaplightning of the Osaka meetup elaborates: “Of course people are free to still meet however they like, but we will not be organizing anything here ourselves for a while. I think of our community as friends. So it is certainly possible that we may meet a few of them.”

Gutman, for his part, stresses the virtual meetups should be preferred, saying, “I feel strongly that, regardless of whatever we do on our own accord, as a group we should always make positive social choices and demonstrate leadership. I urge those who have chosen to attend physical meetups to choose the virtual meetup.”

Supporting Merchants a Big Concern

One of the main concerns of members was how to continue supporting merchants, while some members choose to meet virtually. “We came up with a good solution for that,” says Yokoo, “For each meetup, we pick one venue and we provide a BCH address of that merchant to the virtual meetup participants. Members can feel free to donate BCH, as if they are buying drinks at actual meetups. I feel like this is a good solution for people who want to help the merchants but don’t want to go out, and the same way for the merchants.”

Yumeno notes: “I also feel bad for our regular BCH accepting merchants. Even at our last meetup the owner said that their customer numbers were low. I want to support them. Our members might come even with the danger as they are passionate. But it is putting more people at risk.”

While it may be debatable how big a risk factor people already out and about meeting up and taking the proper precautions is, supporting merchants is a critical concern that unifies the organizers.

Really enjoyed the #BitcoinCash meetup today. First time at this new place!😋

Even got some of the customers to download a wallet.

I look forward to onboarding more #BCH merchants to come this year.🎉 pic.twitter.com/vOSkAPqiwa

— Bitcoin Cast (@BitcoinCast) March 15, 2020

Meetups Around the World Going Strong

In spite of COVID-19 fears, bitcoin cash meetups worldwide are resilient, with new meetups emerging regularly. From newly announced groups in the Philippines, to upcoming events in Ghana which will help spur support for BCH House Ghana — an educational hub for crypto — permissionless, peer-to-peer cash is steaming forward. User Bitcoin Cast, tweeting about meeting at a new spot in Pasadena, California this week, said: “Really enjoyed the #BitcoinCash meetup today. First time at this new place! Even got some of the customers to download a wallet. I look forward to onboarding more #BCH merchants to come this year.”

In Venice, Italy, where the effects of the virus are being felt extremely heavily and the entire state is under quarantine, bitcoiners of the BTC variety are holding virtual meetups.

So whether meeting on the virtual plane as Tokyo and Osaka will now be able to, or in a local shop, bitcoin cashers can nevertheless see the indomitable power of peer-to-peer cash continue, even in these uncertain times, until meetups in these cities can resume as normal.

What do you think of the idea of virtual meetups in light of the COVID-19 situation? Let us know in the comments section below.

Images courtesy of Shutterstock, Graham Smith, fair use.

Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The Local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.

The post Bitcoin Cash Meetups Go Virtual in Japan to Combat Virus, Allowing Members to Choose appeared first on Bitcoin News.

Video: Trace Mayer on Proof of Keys, Sovereignty and Bitcoin Privacy

30/12/2019 by Idelto Editor

For almost a decade, Bitcoiners from all across the world have celebrated January 3 as Bitcoin’s bonafide birthday. It was on that date in 2009 that Satoshi Nakamoto mined Bitcoin’s genesis block and it was this first successful hash computation that defined the political purpose of Bitcoin with the embedded message: “The Times 03/Jan/2009 Chancellor on Brink of Second Bailout for Banks.”

Simply put, Bitcoin is an instrument that is specifically designed to resist the inflationary urges of monetary politics, and its qualities empower individuals to become sovereign. However, the business sector that developed and blossomed around Bitcoin has not always remained true to the cypherpunk origins that created it; Often times, exchanges and lending services impose withdrawal limits, freeze accounts and find other ways to arbitrarily restrict users’ access to their funds.

Long-time Bitcoiner Trace Mayer has observed how these businesses tend to restrict the concept of sovereignty that the technology was meant to protect, and his response to the phenomenon is the Proof of Keys event, held every year on January 3 to remind bitcoin holders of the ethos behind the technology.

During the “celebration,” as it’s described on the official website, participants seize back their bitcoin from any third parties they usually trust on their behalf.

“I started Proof of Keys as a celebration of our monetary sovereignty,” Mayer told Bitcoin Magazine in a recent interview. “If you have rights but never flex them, your muscles will get weak. With Proof of Keys, we just withdraw all of our crypto from any third party — be it exchange or lending platform. You withdraw to a node that you’re running (so you do your own validation without relying on somebody else) and you hold your own private keys.”

The event speaks to Mayer’s own noteworthy commitment to Bitcoin’s most cypherpunk ideals, including distrust of third parties, the utmost privacy and security and a relentless emphasis on taking every precaution available to retain control of his bitcoin.

Educating Newbies About Sovereignty

Going a step further for its emphasis on sovereignty, Proof of Keys makes a point to remind bitcoiners of instances when exchanges were hacked or other issues led users to irreversibly lose their funds — even if those bitcoiners haven’t experienced that themselves.

“We have so many people who come into the space and they didn’t lose money in Mt. Gox or other big exchange hacks that have happened over the years,” explained Mayer. “So they don’t necessarily have the ethos, experience and human capital to own their own keys. Proof of Keys is an annual event which helps everybody develop these skills and abilities. It will also help strengthen the network.”

Mayer, who has coined the term “HODLer of last resort” as a way of signalling individual sovereignty, has also expressed his concern over the increasing centralization of bitcoin ownership. In a recent tweet, he pointed out that almost 2,000 BTC are being kept in the custody of nine exchanges, and this trend of embracing trust in third parties is anathema to the philosophy and purpose of Bitcoin.

Proof of Keys acts as a test for exchanges to make sure that they have enough liquidity to handle massive withdrawals from participants and it also emphasizes an educational component. New Bitcoiners are encouraged to run their own nodes, learn proper key management and inherit the philosophical ideals of sovereignty.

“Proof of Keys is a celebration during which we exert our monetary sovereignty, we get to have a lot of fun, and we get to teach new people how to do it,” said Mayer. “It’s important to celebrate that we have this ability — because if we never exercise the ability or do it hazardously, we face the risk of taking exchange solvency for granted. You don’t want to learn and train yourself to become sovereign during a real emergency situation.”

In terms of hardware and software recommendations for individual sovereignty, Mayer is a big fan of general-purpose devices and Bitcoin Core. In his view, somebody who only owns small amounts of bitcoin should simply download and run Bitcoin Core, as it’s one of the most audited and tested pieces of software.

“Newbies in the space should run their own full node and take their cybersecurity very seriously,” he said. “If you deal with small amounts, then it’s recommended to use the Bitcoin Core software, as it’s a full node which allows you to hold your private keys. They built Core to be very secure and robust, and it’s free. As long as you have enough disk space on your computer, you can run it for free. Start from here, and withdraw a small amount to see how it works.”

For more advanced users who want even greater security, Mayer recommends the open-source cold storage bitcoin wallet Armory.

“Armory is like a Swiss Army knife: you can have multiple wallets, you can control the UTXOs on each one of them, and all of this is an upgrade in your ability to interact with the Bitcoin network,” he explained. “You can have your watch-only wallet on the new computer and a cold storage wallet on a computer that you never connect to the internet. Through this software, you don’t need to buy specialized hardware that leaks privacy.”

Other resources and protocols that Mayer endorses for custody and sovereignty are the Glacier protocol (a 90-page guide which explains best security practices) and Smart Custody by Christopher Allen.

Mayer’s recommendation for learning proper key management is practical. In his view, newcomers should approach Bitcoin just like a bicycle: By taking small, low-risk steps to learn and never feeling discouraged when failures happen.

“There is no substitute for getting on the bicycle and riding it,” Mayer said. “You might fall and scrape your knee — if it happens, just get up and get back on the bicycle. Start out small, as you have no business locating to bitcoin more capital than you’re ready to lose. And when you deal with third parties, remember that you will inevitably be disappointed and it will cost you money. The golden rule in Bitcoin says that you can’t trust these third parties: they become massive honeypots and there’s a lot of value to be stolen in terms of both assets and data. At least we have Proof of Keys to generate some discussion, otherwise most people remain ignorant. The price of being ignorant in the Bitcoin space is very expensive.”

What’s the Matter With Hardware Wallets?

Hardware bitcoin wallets are affordable devices that use cryptography and physical security features in order to provide a safer way of holding private keys. Yet in spite of their rising popularity and relative user friendliness, Mayer remains skeptical and critical.

“First of all, I don’t like bitcoin-specific hardware wallets like Ledgers and Trezors — you put a lot of trust in these companies,” he said. “They know that you’re going to be using that device for bitcoins, Amazon knows that it’s in your permanent purchase history, so think about it.”

Mayer’s main concern in regards to hardware wallets isn’t coin security but privacy. As he explains, “Ledger and Trezor can be uniquely identifiable through a serial number, and when they report back home they leak all types of information about your addresses, connection and transactions.”

If the hardware wallet manufacturers store information about how many bitcoin their clients are holding, they become honeypots for hackers and eventually threaten those who trust third parties with their financial security.

“Put on your criminal hat: If you want to figure out where you can find some bitcoins, you go compromise the databases of Ledger or Trezor, and simply go for the people whose devices hold most coins. It’s not very difficult,” argued Mayer.

What’s Wrong With Full Node Products?

In recent years, the concept of “financial sovereignty in a box” has become increasingly popular among newbies. Instead of synchronizing the Bitcoin blockchain on their computers and running complementary applications on top of it, some community members prefer to purchase dedicated plug-and-play hardware. However, Mayer is not a fan of these products due to the fact that users need to blindly trust in the good faith of the service providers.

“I don’t think that you need to spend money on a node,” he said. “I have several old computers and I run Bitcoin full nodes on them. In addition, I can run Bitcoin Core on any of my new computers too.”

As with hardware wallets, Mayer is concerned about leaving permanent trails in regards to interacting with the Bitcoin network (and potentially owning coins). In this regard, he recommends using generic multipurpose computers and hardware that nobody would suspect to be running Bitcoin.

“I like using general-purpose hardware because the sellers from whom I acquire it don’t necessarily know how I’m going to be using it. With a random number generator, it’s less likely to be compromised and it’s less likely that the person who sold it to me will know that I use it for Bitcoin,” said Mayer.

Exchanges, Lending Services and the Importance of Privacy

Mayer recommends that Bitcoiners choose their exchanges with great precaution and also review their privacy policies. While security is very important for traders, the way financial data gets handled is of equal importance.

“You need to be extremely careful with the exchanges that you use, the way that you interact with them and the data that you’re leaking to them,” Mayer said. “We must also remember that Bitcoin is an immutable blockchain and the transactions are there permanently. If you’re leaking data such as IP address, email address or passport scans and it gets attached to different bitcoin UTXOs, you’ve got to be careful and aware of the immutability. The data gets shared around with other companies in the space such as Coinbase, Bitstamp and Chainalysis, so precaution when signing up with your data is essential.”

Furthermore, Mayer presented an essential principle: Third parties can’t be trusted with too much data and the only bits of information that are truly safe from hackers are the ones that never get shared on the internet.

“I like to give to these exchanges and operators the least amount of information and the least amount of privilege. If you don’t give up the data in the first place, it can’t get hacked or spread around,” he said.

Lending services didn’t escape from Mayer’s scrutiny either, as the Bitcoiner has questioned their business models in relation to liquidity, solvency, data retention and commercialization.

“How can lending services pay 7 percent interest while charging only 6 percent for loans?” he asked. “It’s because they most likely also sell data, or don’t deal with their own money. When you demand back your bitcoins from the lending services, you’re going to find out whether they have them or not. When you withdraw your coins from exchanges, you also see if these companies are fair and solvent. This is very important information that you don’t learn until you enforce it.”

The Problem With CoinJoins and Skepticism for Bitcoin Privacy

After attending most of Ross Ulbricht’s trial hearing, Mayer became aware of the U.S. government’s ability to trace transactions on the open Bitcoin ledger and differentiate between coins that have been used for criminal activities and “clean” ones. Consequently, he became very much aware of the importance of UTXO cleanliness and developed a habit of holding taint-free coins.

“I’m not really interested in engaging in CoinJoins because that only complicates the KYC/AML situation and I know that my bitcoins are clean,” he explained. “So why would I want to mix them with someone whose bitcoins are dirty? All of this KYC/AML data has effects on the fungibility of satoshis and you don’t want to become a person of interest in criminal investigations.”

Mayer also implied that anonymity on a very small scale is inefficient and easily breakable, and privacy should exist by default even for users who aren’t aware that they’re using it.

“I think that privacy and fungibility have to be there in the base layer for everybody,” Mayer explained. “Privacy can’t be opt-in — if three out of 100 people are wearing a mask, then it’s simpler to use scrutiny and figure out who the masked people are. But if everybody is wearing a mask, identification becomes more difficult.”

In regards to Confidential Transactions, Mayer suggested that the ability to audit the Bitcoin blockchain and guarantee the limited supply is more important than concealing transaction data.

“What is more important: having a limited supply or the privacy and fungibility?” he asked. “For the first network effect of speculation, I think having a limited amount is more important. In hindsight, I also think that the limited supply is more important for monetary sovereignty than privacy and fungibility. This doesn’t mean that privacy and fungibility aren’t important and it doesn’t mean that we shouldn’t try to take territory through them whenever we can.”

An Airdrop for Proof of Keys Participants?

In order to incentivize Bitcoiners to withdraw their coins from exchanges through Proof of Keys, Mayer thinks it may be a good idea to airdrop special altcoins as a gift.

“I think having an airdrop for Proof of Keys participants would be great,” he said. “These events don’t cost the bitcoin holders anything and you get a new asset. And if these airdropped assets have any value at all, you can always sell them and get more BTC.”

Though he hasn’t fleshed out a complete plan for such an incentive, Mayer thinks that these airdrops can work in two ways: They reward users for withdrawing their coins, but also reward exchanges for proving that they hold all the required liquidity to operate. The resulting altcoin might acquire market valuation and help traders acquire more bitcoin.

“I haven’t put a ton of thought in this idea of having a Proof of Keys airdrop, but if we could use this concept to squeeze value out of the exchanges that don’t provide the keys, then that would be a way for us to perhaps even make some money,” Mayer explained. “The illiquid exchanges that can’t process all withdrawals won’t get the airdrop, so the scarce assets received by the good players can even be liabilities for the exchanges.”

In defense of noncontentious altcoins, Mayer said that they can serve two important purposes that support Bitcoin: They offer a testnet for Bitcoin features (as was the case of Litecoin with SegWit) and also raise the cost of blockchain analysis operations.

“If more coins exist, then Chainalysis must adapt to the magnitude of the market,” Mayer concluded. “We don’t know how profitable it is for them to spy on people at such a great scale, but we can increase the amount of work that they need to do so they can have greater costs.”

The post Video: Trace Mayer on Proof of Keys, Sovereignty and Bitcoin Privacy appeared first on Bitcoin Magazine.

The Bolt-A-Thon Sequel to Spark Lightning Innovation

18/11/2019 by Idelto Editor

From December 6 to 8, 2019, the second edition of the Bolt-A-Thon will take place in the natural habitat of Bitcoin and the Lightning Network — the internet. The Lightning-centered hackathon and conference is a follow-up to the inaugural event in April 2019, where many creative ideas were presented and many Lightning-focused projects made tangible progress — for instance, after the multi-platform payments service Bottle Pay won the Bolt-A-Thon, it went on to raise $2 million to boost development.

Speakers at the event, who will be making their presentations via livestream, include Lightning Labs Infrastructure Lead Alex Bosworth, Blockstream researchers Christian Decker and Rusty Russel and c-lightning developer Lisa Neigut.

A Decentralized, Inclusive Conference Fit for the Technology

For a participation fee of only 100,000 satoshis (about $8.30), Lightning enthusiasts from all around the world can purchase single-session tickets to watch these presentations via Zoom. The event has eight sessions (one for each speaker), so the total cost of watching all presentations will amount to 800,000 satoshis. The event’s ticket page allows attendees to choose sessions individually.

In the true spirit of the Lightning Network, signup only requires payment to generate a participation code used to join the livestreams, with the option to submit an email address as well. There is no mandatory KYC process, no requirement to use a real name and no way to discriminate among potential participants. The price is low enough to encourage enthusiasts from all around the world to learn more and engage with the Lightning community.

“Our goal here is to offer an alternative to physical conferences,” Bolt-A-Thon co-founder Andrew Yang told Bitcoin Magazine. “I’ve witnessed situations where tickets were very expensive, and I also had to take into account housing and travel costs — these were usually more expensive than the ticket. The Bolt-A-Thon allows people from all over the world to participate either by creating a Lightning project or attending sessions.”

Building Innovation at Bolt-A-Thon

Participants in the hackathon will need to pay just 100 satoshis (about $0.0083) and also prove that they’re running a Lightning node. In the final day of the event, they will have to make five-minute presentations about their projects and vote for the participants whose work they consider to be innovative and game changing. Criteria for excellence include theme adherence (must use the Lightning Network for payments), applicability as a real-world use case (the practical dimension) and “wow” factor (an aspect that may woo mainstream audiences and spread adoption).

The winning efforts will be awarded with prizes that amount to 0.45 BTC: 0.2 BTC for first place, 0.15 BTC for second place and 0.1 BTC for third place. Furthermore, the hackathon could serve as a platform for interesting projects to secure external funding from investors and companies interested in innovation — as Bottle Pay did.

The decentralized and merit-based nature of the event means that an innovation from anywhere in the world could receive a spotlight.

“During the first conference, we had attendees from Brazil, South Africa, Thailand, Spain, Argentina, Nigeria and the U.S.,” Yang said. “Bitcoin events, presentations and hackathon opportunities shouldn’t just be for the first-world countries. Bitcoin is for the whole world and that’s why we think making it virtual enables us to reach and foster the global development of Bitcoin and Lightning.”

The post The Bolt-A-Thon Sequel to Spark Lightning Innovation appeared first on Bitcoin Magazine.