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Economics Professor Tyler Cowen Says Cryptos Useful as Hedges or Forms of Payments – ‘Not Both’

04/01/2021 by Idelto Editor

Tyler Cowen, an economist and professor at George Mason University, has suggested that the key use cases of cryptocurrencies are mutually exclusive. He argues that cryptos can either be important inflation hedging tools or useful forms of payment but not both.

The Regulation Threat

The professor adds that despite the popular assertions by some that bitcoin will replace the U.S. dollar as the world’s reserve currency, the digital asset remains too volatile to serve this purpose.

Writing in an opinion piece, the economist concedes that “there is a demand for a non-intermediated, direct payment asset, and crypto can serve that function.” However, Cowen, whose piece starts by focusing on stablecoins, explains that while these may seem appealing to users who wish “to transfer something dollar-denominated but with crypto-like features”, they still carry risks. Expanding on this viewpoint, Cowen says:

First, the stablecoin peg to the dollar may someday be broken, an old problem with pegged exchange rates that Milton Friedman often warned about. Second, to the extent stablecoins and other crypto-assets become a major part of the financial system, they will attract more regulatory interest.

Cowen believes that governments such as the one in the U.S. have already shown that they are against “a financial system that evolves outside the purview of its regulators.” Consequently, these governments will respond to the rise of stablecoins by imposing restrictions or regulations that “will limit many of their advantages over the traditional bank sector.”

Crypto Tax Evasion

Similarly, Cowen agrees that “crypto assets, such as bitcoin or ether” can be useful when hedging against inflation or as “speculation vehicles.” However, he argues that “you probably would not want to use them (BTC and ETH) as your dominant means of purchase.” Bitcoin and ether can only be used for “a modest portion of your purchases.” However, for large purchases Cowen warns:

It’s too risky to make them the bulk of your checking and savings accounts. The dollar, euro or, for that matter, the Mexican peso are not nearly so volatile.

Finally, in attempting to support his stance on cryptocurrencies, Cowen regurgitates the assertion that people are drawn to digital currencies because they want to evade paying taxes. Cowen warns that any such “crypto tax evasion is better suited to be a fringe rather than mainstream endeavour.”

The economist ends his opinion piece by pointing out that “the more utopian scenarios for crypto, whether proponents realize it or not, rely on the notion that crypto remains simultaneously fringe and mainstream. That will be a hard trick to pull off.”

What are your thoughts on Cowen’s perception of cryptocurrencies? Tell us your views in the comments section below.

The post Economics Professor Tyler Cowen Says Cryptos Useful as Hedges or Forms of Payments – ‘Not Both’ appeared first on Bitcoin News.

Filed Under: BTC, crypto assets, crypto tax evasion, cryptocurrecies, Economics, English, ETH, Exchange rates, Mexican Peso, News Bitcoin, savings accounts, Stablecoins, Tyler Cowen, US government

Over 5,000 Bitcoin Worth $97 Million from the 2016 Bitfinex Hack Spring Into Action

01/12/2020 by Idelto Editor

Over 5,000 Bitcoin Worth $97 Million from the 2016 Bitfinex Spring Into Action

As bitcoin surpassed its 2017 all-time high on Monday morning, a few hours later 5,045 BTC or $97 million worth of bitcoin from the 2016 Bitfinex hack was transferred. The hackers that stole the funds four years ago have moved the bitcoins numerous times this year.

The hackers that stole 119,756 BTC from the cryptocurrency exchange Bitfinex on August 2, 2016, have moved a number of stolen coins in 2020. The coins that were taken over four years ago are now worth around $2.3 billion using today’s exchange rates.

Following the Bitfinex hack, the breach crippled trader confidence that day as BTC slid more than 22% across global exchanges on August 2, 2016. The coins did not move for three years until the summer of 2019, the stolen coins started moving again.

Over 5,000 Bitcoin Worth $97 Million from the 2016 Bitfinex Spring Into Action

On Monday, November 30, 2020, the Bitfinex hackers transferred a large sum of bitcoins as approximately 5,045 BTC were moved. The action was caught by the blockchain parser Btcparser.com, a platform that crawls the BTC blockchain to catch old coinbase reward awakenings and addresses that stem from the Bitfinex hack.

Using today’s exchange rates, the 5,045 BTC is worth more than $97 million. Bitcoin (BTC) touched an all-time high on the exchange Bitstamp reaching $19,864 per coin.

Over 5,000 Bitcoin Worth $97 Million from the 2016 Bitfinex Spring Into Action

Data from Btcparser.com and the blockchain explorer Blockchair shows the 5,045 BTC was separated into separate addresses and some were combined. 14 transactions were sent and confirmed in blocks 659,373 and 659,374.

Blockchair’s Privacy-o-meter shows the transactions sent by the Bitfinex hackers were not very private, receiving a low score of 55. The tool shows whether or not a transaction is susceptible to some of the heuristics used by numerous transaction tracing tools. The bitcoins moved on Monday from the Bitfinex hack look as though if they were simply swept into a different address.

What do you think about the Bitfinex hackers moving 5,045 bitcoin stemming from the 2016 breach? Let us know what you think in the comments section below.

The post Over 5,000 Bitcoin Worth $97 Million from the 2016 Bitfinex Hack Spring Into Action appeared first on Bitcoin News.

Filed Under: $97 million, 120000 BTC, 2016, 5045 BTC, Bitcoin, Bitcoin (BTC), Bitfinex, Bitfinex Hack, Blockchain Explorer, blockchain parser, Blockchair, BTC, Btcparser.com, cryptocurrency, English, Exchange, Exchange Hack, Exchange rates, Hackers, News, News Bitcoin, Privacy-o-Meter

Currency Depreciation to Blame for 7.2% Drop in Global Remittances: World Bank Supports Digital Remittances

10/11/2020 by Idelto Editor

Currency Depreciation to Blame for 7.2% Drop in Global Remittances: World Bank Supports Digital Remittances

According to a new report, the depreciation of some currencies against the U.S. dollar is contributing to the declining international remittances. After touching an all-time high of $548 billion in 2019, the World Bank report now projects remittances to drop 7.2% in 2020 to $508 billion and a further decline of 7.5% to $470 billion in 2021.

Currency Depreciation to Blame for 7.2% Drop in Global Remittances: World Bank Supports Digital Remittances

Volatile Currencies

In its Migration and Development Brief 33, the World Bank details how the Covid-19 induced currency depreciation has affected the flow of global remittances. In the brief, the authors point to the exchange rate between the U.S. dollar and the source currencies for remittances. Detailing how this has affected the flow of remittances from Russia, the report says:

The weakening of the ruble against the U.S. dollar, by over 26% since the beginning of 2020, has reduced remittances from Russia in U.S. dollar terms. Remittances to Central Asia have therefore declined significantly.

The World Bank data indeed projects that remittances sent from Europe and Central Asia will register the sharpest decline (globally) of 16% in 2020. On the other hand, remittance flows to Latin America, and the Caribbean are expected to decline by just 0.2% in 2020.

Currency Depreciation to Blame for 7.2% Drop in Global Remittances: World Bank Supports Digital Remittances

Still, the report identifies the other “foremost factors” driving this decline as the “weak economic growth and uncertainties around jobs” particularly in the case of the United States and European countries. For oil-rich countries like Saudi Arabia and Russia however, it is the weak prices for the commodity that are driving down the flow of remittances.

Impact of Digital Remittances

Meanwhile, after detailing the impact of Covid-19 and the associated mobility restrictions, the World Bank report goes on to assert that formal recognition of “digital remittances” will help to keep funds flowing even in tough times. The report continues:

“Governments must support remittance infrastructure, including by recognizing remittance services as essential, reducing the burden of remittance fees on migrants, incentivizing digital money transfers, and mitigating factors that prevent customers or service providers of digital remittances from accessing banking services.”

Although the World Bank report fails to specifically identify cryptocurrencies as one of the digital remittances it is touting, studies and reports already show the increasing use of crypto assets when remitting by some migrant groups.

For instance, a news.Bitcoin.com report suggests that there is a growing use of cryptocurrencies as rails for remitting funds across borders. A different report also shows a marked growth in peer-to-peer trade volumes after countries imposed lockdown restrictions.

Covid-19 restrictions may have inadvertently increased the appeal of cryptocurrencies. The second wave of growing infections and the resultant restrictions will only reinforce their place in this new normal. As the World Bank has advised, countries can reduce the impact of such restrictions by embracing digital remittances.

Do you agree that digital remittances can halt the declining flow of funds? Tell us what you think in the comments section below.

The post Currency Depreciation to Blame for 7.2% Drop in Global Remittances: World Bank Supports Digital Remittances appeared first on Bitcoin News.

Filed Under: COVID-19, cryptos, currency depreciation, depreciation, digital remittances, Economics, English, Exchange rates, international money transfers, lockdown, MIgrants, News Bitcoin, oil rich, remittances, World Bank

Hackers Transfer $28 Million Worth of Bitcoin from 2016 Bitfinex Breach

28/07/2020 by Idelto Editor

Hackers Transfer $28 Million Worth of Bitcoin from 2016 Bitfinex Breach

Around 2,500 stolen bitcoins ($28 million) from the 2016 Bitfinex breach were transferred from the hacker’s wallet on Monday.

The last time the Bitfinex hackers moved funds from the hack four years ago, they moved around $5 million worth of coins on June 24. This time around, the top crypto asset by market capitalization touched new price highs for 2020 on July 27.

At 6:15 p.m. (ET) on Monday, bitcoin (BTC) reached $11,379 per coin on Bitfinex. The hackers moved the $28 million worth of BTC in various fractions six hours prior to the price high, according to statistics from the BTC transaction tracker Whale-alert.io.

⚠ 174.44 #BTC (1,815,092 USD) of stolen funds transferred from Bitfinex Hack 2016 to unknown wallet

Tx: https://t.co/VA64OqmQKT

— Whale Alert (@whale_alert) July 27, 2020

Whale Alert saw a number of large BTC transfers on Monday afternoon, but these bitcoins, in particular, stemmed from the 2016 Bitfinex hack and were sent to unknown wallets.

Some transactions were anywhere between 85 BTC to 174 BTC, while some were above 400 BTC in a single transaction. The series of BTC transactions stemming from the Bitfinex hack occurred at precisely 12:41 p.m. ET and another set of transfers at 1:49 p.m.

Hackers Transfer $28 Million Worth of Bitcoin from 2016 Bitfinex Breach
At 6:15 p.m. (ET) on Monday, bitcoin (BTC) reached $11,379 per coin on Bitfinex.

The Bitfinex hackers moved a grand total of just over 2,550 BTC and at the time, BTC was only trading for $10,350 a coin. The bitcoins came from the security breach Bitfinex experienced back in August 2016 when the exchange lost 120,000 BTC.

At the time the entire stash of stolen BTC was only worth roughly $72 million, but today those coins are worth $1.3 billion at current prices. Bitfinex is still a popular exchange and it paid customers back by creating an exchange-backed token.

The Bitfinex stolen bitcoins have always been a fan favorite to monitor and people are always watching the funds with great interest. The bitcoins have been moved more recently but sat for years prior to the first moves.

With the last move on June 24, the hackers also moved coins on June 11 as well. The Bitfinex hackers transferred roughly $5 million worth of BTC in 20 separate transactions. The $28 million worth of bitcoin transactions on Monday has been one of the largest moves yet.

What do you think about the Bitfinex hackers moving $28 million worth of BTC? Let us know in the comments section below.

The post Hackers Transfer $28 Million Worth of Bitcoin from 2016 Bitfinex Breach appeared first on Bitcoin News.

Filed Under: 120000 BTC, 2016, Bitcoin, Bitfinex, Bitfinex Hack, Blockchain Explorer, BTC, Coinjoin process, cryptocurrency, English, Exchange, Exchange Hack, Exchange rates, Hackers, News, News Bitcoin, OTC desk, Whale Alert

Bitcoin Worth $282K from the 2016 Bitfinex Hack on the Move

23/05/2020 by Idelto Editor

Bitcoin Worth $282K from the 2016 Bitfinex Hack on the Move

The cryptocurrency community has noticed a number of bitcoins from the August 2, 2016, Bitfinex breach has been moved. A small 30 BTC transaction ($282,000) from the stash has moved from the hacker’s address to an unknown bitcoin address. The last time coins from the Bitfinex incident moved was June and August 2019, as the bitcoins hadn’t transferred for three years since then.

On August 2, 2016 the popular cryptocurrency exchange Bitfinex was hacked for approximately 119,756 BTC, which is worth a touch over $1 billion using today’s exchange rates. The breach crippled trader confidence that day, and the price per BTC slid 22% immediately after the event.

After the incident, the value of bitcoin staged a modest comeback a week later and Bitfinex promised customers they would be paid back. Those stolen coins were moved to an address that anyone can follow using a standard blockchain explorer. The bitcoins sat for three years and didn’t move until June and August 2019. When a BTC transaction in August took place, the transaction monitoring account Whale Alert notified the public on Twitter that roughly 300 BTC ($2.7M) was moved in ten transactions.

During the first week of June 2019, the hackers also moved around 170 bitcoins worth more than $1.5 million using today’s exchange rates. At the time, BTC prices were much higher and came awfully close to touching $14,000 per coin. It is common for hackers to move digital assets when prices are higher than usual.

Armchair sleuths and observers have noticed this type of trend taking place with the Plustoken scammers as well. When the prices of bitcoin and ethereum are higher, the Plustoken bandits start moving coins to different wallets. No one knows if these stolen coins are being exchanged on a well known trading platform, but it is suspected that it’s more likely coins like these are sold using an over-the-counter (OTC) desk after being mixed.

Bitcoin Worth $282K from the 2016 Bitfinex Hack on the Move
30 bitcoins from 3CA1UDYQy47Z46HKCVqRV8b1XVduocWAcW moved on May 21, 2020, @ 19:41:16 UTC. At the time of publication those 30.667 BTC would sell for $282,466 USD.

On May 21, 2020, 30 coins from the August 12, 2019 move, had been transferred once again to another unknown address. Back when Bitfinex was breached in 2016, the going exchange rate for BTC was around $600 per unit. The moved coins on Thursday saw approximately 30.66754180 BTC or $282,000 moved and back then they would only be worth $18,000.

It is also common for hackers to move coins into smaller increments and they may not have been sold on the market. This type of method is noticed because the 30 coins moved on Thursday, stemmed from the 300 BTC ($2.7M) transfer that was done in 10 separate transactions.

Blockchain surveillance firms and law enforcement officials have these addresses flagged and it becomes difficult to move a stash of 119,756 BTC without being seen. Unless of course you split up the stolen bitcoins and possibly mix the UTXOs using the Coinjoin process.

What do you think about the recent 30 bitcoin ($282,000) move from the 2016 Bitfinex hack? Let us know what you think in the comments below.

The post Bitcoin Worth $282K from the 2016 Bitfinex Hack on the Move appeared first on Bitcoin News.

Filed Under: 120000 BTC, 2016, Bitcoin, Bitfinex, Bitfinex Hack, Blockchain Explorer, BTC, Coinjoin process, cryptocurrency, English, Exchange, Exchange Hack, Exchange rates, Hackers, News, News Bitcoin, OTC desk, Whale Alert

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