India’s Bitcoin Ban Challenged

It will be very interesting to see where all of this goes.  India is the only major country I am aware of that outright banned and outlawed Bitcoin and other cryptocurrencies.  I think this situation is worse than the SEC in the US.  Most countries who are aggressive have a clear motive which is “we want to regulate and tax cryptocurrency” but India has taken it a step farther which is alarming.  What some regulators don’t seem to understand or care about is that this huge amount of money from both investors and exchanges can be moved in an instant.  If it gets banned then people may just physically and virtually move outside of that jurisdiction and never return.  Banning cryptocurrency may seem like an upside to central bankers, but with short-term gain.  In fact I would argue that outlawing it will only make cryptocurrency gain in adoption and popularity.  The only doomsday scenario that would possibly be effective is if all major governments banned cryptocurrency which I don’t see happening, as it is literally shooting yourself in the head financially. I think these sorts of decisions will be seen in the future, as being extremely silly, inline with those who wanted to kill eCommerce and digital media purchases in the 90’s and early 2000’s.

With that all said I really wonder if the law would uphold this ban which I think under any country’s laws would be found illegal.  This is hard to say as India has recently invalidated some of its own notes.  It may be ultimately found illegal but if I were any of these firms I would have moved away by now and consider returning once the legal issues have been sorted out. But with India’s economy being so vast and strong the firms in question have a lot to gain by remaining and pushing for the legal acceptance of cryptocurrency in India.

 

 

 

Another Crypto Firm Challenges India’s Bitcoin Banking Blockade

Facebook Expands To Spy On The Workforce

Apparently Facebook is trying to be a better spy.  They’re integrating common workplace apps such as Microsoft Sharepoint and many other commonly used digital tools in the workplace.  This is a strategic move so they could sell this data to the highest bidder in order for another IT company to get an advantage over the competition.  With this new level of spying Facebook gets an idea of what tools people prefer since they already know more than we do about ourselves.  As with people data, data based on their work habits is extremely valuable as it filters up to knowing how their workplace functions.

I admit this was written nearly entirely with sarcasm but I’m really not joking.

Bitcoin Fails To Defend 10K Mark

Let’s let the chart do the talking for the past 3 months where it currently sits at $9327.65

Bitcoin-2018-02-05-PriceChart

Back in February BTC posted the maximum high for the past 3 months of just over 11K.  As you can see from March to April the lowest moves of the recent past were posted around the 7K mark.  To me this looks like a classic sideways trading that eventually breaks out.  You can see since April there has been a steady upward trend.

BTC hasn’t been able to defend the 10K mark but I do believe we have stability around the 9K mark.  Some indicators claim BTC is currently neither overbought or oversold.  But common sense has to tell you that if the price is going down it appears we have more sellers than buyers at the $10K mark.  It could be people cashing out for fear of wondering when does BTC return back to the 20K mark?

Many people have said this  spells disaster but I really do think we are just getting started with the BTC rally and I think much higher prices are around the corner in the near future.  There has been a lot of positive news from around the world that seems to be increasingly towards accepting that BTC is here to stay.

Perhaps some regulators thought twice and realized that “like it or not BTC is too big and risky to ban”.  Because people can move BTC at will and it cannot be frozen or truly banned.  I think regulators are finding just as the case is with exchanges, if you put undue pressure on owners of cryptocurrency they will simply just move away to a friendlier jurisdiction.  I would imagine they should favor BTC as it is not anonymous and is easily and fully trackable.  If people switched to more private based coins they’ll have little chance at regulation such as with Monero.

Google’s Co-Founder Sergey Brin Says Ethereum Mining Driving Computer Boom and Renaissance

This is very striking to me in that I find the statement makes no sense and with one word “SETI”.  SETI didn’t set off a computing revolution and still has limited participation.  SETI which is searching for signs of extraterrestrial life has used a sort of grid-computing through unused computing power of its supporters to help search through troves of data that the SETI researchers don’t have the power to do.  I admit back in high school I didn’t want to share my CPU cycles, nor did most other people.

I am drawing this comparison because SETI didn’t start off a frenzy of computer buying to “mine” SETI.  This is because there was no actual reward or benefit to doing it any practical sense.  Mining is only being driven by the hope of big rewards and profits, or in other words greed.  Yes, some computing enthusiasts are getting into mining but does anyone really think that this greed has turned people into computer enthusiasts?  Sales of GPUs would be flat if not for the profits.  If mining because unprofitable the same people who rushed in will rush out, they are speculators and investors, not computing experts or enthusiasts.

Aside from being extremely wasteful, inefficient and ineffective I believe PoW or mining is not sustainable and the long-term currencies that are to survive will be converting to PoS (Proof of Stake).

And this gets to the most ironic point.  Google has recently banned ALL cryptocurrency advertisements.  Maybe Sergey thinks “mining Ethereum is cool and so is cryptocurrency but not if you want to promote it on Google!”.

Dubai Establishes Business Blockchain Registry

This is the first I’ve heard of it but Dubai has made a business registry out of blockchain and what’s more they want all government services to be blockchain powered by 2020.  It has been setup to help companies establish themselves in Dubai and also as a well of getting direct investment from overseas.

I am having trouble finding the technical details but it certainly sounds like a very interesting application of blockchain technology.

The only other thing mentioned is that it appears IBM is behind the blockchain being used or at least involved:

 

Amr Refaat, general manager, IBM Middle East said: “IBM is proud to collaborate with DED, Smart Dubai Office and Dubai Silicon Oasis on this journey to revolutionize the business ecosystem in the UAE. Dubai is a leader in innovation with many ambitious projects that have already become a reality. With the first phase of this project already in place to form the first active Blockchain commerce registry network, there is keen interest from other public and private entities to join the network.

Your Car, TV, Phone, Computer and Other Devices Spy On You

Years ago this would be called a “conspiracy theory” but now that the CIA’s “Vault 7” hacking tools have been released this is an established truth.  What’s more scary is the revelation applies to pretty much all computing devices and all OS’s.   The CIA has found exploits and used backdoors into the various devices.  I suspect the backdoors and some vulnerabilities were forcefully injected by the US government.  To make it more scary we have the NSA’s PRISM and this combined with the CIA dump is alarming because those entities combined with other governments surely have a lot more than what has been revealed.  It is not a stretch but rather insane to believe you are not likely being watched and listened to.  We haven’t even covered well funded, private hacking groups.

There are two issues here.  The first one is companies who willingly create vulnerabilities and backdoors at the request of governments and private groups.  The second issue is compounded by the first one where on top of that many products and companies also spy on their customers and also share that data with third party companies and governments at will without any disclosure or regulation.

It’s more than just following where you’ve gone and listening and watching you, the new smart vehicles can be hacked and likely have government mandated malware or backdoors.  Imagine if a government doesn’t like someone and they suddenly have a tragic accident.  There is absolutely no reason why this shouldn’t be the case and perhaps one day we may learn of cases of bizarre traffic accidents that were not really accidents at all.

On an interesting note the “Marble Framework” was released which is essentially an anti-forensic tool to make it difficult for malware and virus experts to attribute the code to the CIA or the US government.  The framework would essentially make it look like enemies of the US such as China, Russia, Iran, or North Korea were responsible for cyberattacks and malware that the US itself had created.

With all this it sounds hopeless but it is not, Edward Snowden famously stated “do not give up on encryption” as clearly not everything is hackable and compromised, there are steps we can take to prevent ourselves from being hacked by the government.  Edward Snowden’s comments and actions are of particular use, the fact that he still says to use encryption means there are ways to be secure.  We should also remember that he used the Tails distribution for communication and used OpenPGP, so it appears at least in the recent past, this was a secure and unbreakable way of communicating.

“What last year’s revelations showed us was irrefutable evidence that unencrypted communications on the internet are no longer safe. Any communications should be encrypted by default,” he said. — Edward Snowden

How can you protect yourself?  There are steps we can take but avoiding the usage of free, insecure services to communicate such as gmail,facebook,whatsapp and also avoiding products that spy on us.  Try to get an older TV or if you get a newer one rip it open and disable the microphone, wifi etc.  If you drive a vehicle consider again seeing if it is possible to disable some of the spying features on it or drive an older vehicle without technology that logs and calls home.  It’s time to get armed and follow certain procedures, avoid certain products and make it as a difficult as possible to be spied on.  Although the programs and hacking methods, groups like the CIA possess are incredible, not all are guaranteed to be successful especially on those who do not run default or standard settings.

Bitcoin vs Bitcoin Cash

This has been one of the most controversial issues in cryptocurrency.  The Bitcoin Cash Hardfork emanates from this issue of what amounts to basically a setting in a config file.

The issue was real back then with Bitcoin only having a 1MB (megabyte) blocksize.  You would think 1MB could store a lot of transactions and this was fine until Bitcoin exploded and began to be used by millions worldwide (something not exactly expected or planned for by the original devs).  Bitcoin can only do 7 transactions per second which is way too slow and what was happening is that the entire block was already fully utilized as soon as it was mined.  It would be like your banks ATM or POS machine crashing before you could do a transaction.  In other words Bitcoin was overloaded and couldn’t keep up with the transactions that were being demanded causing slow processing that could take days to send some Bitcoin!

Some of the devs felt that this wasn’t an issue and wanted to keep things the same as Satoshi created them (with the 1MB blocksize). They felt Bitcoin was never meant to be used for payments such as a cup of coffee and that very slow transactions weren’t an issue.  They also voiced concerns that a larger blocksize would stop people from running full nodes and increase centralization since a larger blocksize requires more computing power.

The Bitcoin Cash team disagreed and did a hardfork which is essentially a copy and counterfeit of the original Bitcoin.   The only real change they made was the blocksize to 8MB which means faster and cheaper transactions than the original Bitcoin.

There were problems initially with potential reply attacks since to get this Bitcoin Cash you have to use your real Bitcoin wallet/private keys to receive it.  This meant that nefarious wallet creators could steal your coins from the real Bitcoin network if you didn’t move your original coins to another wallet first.  There is also the threat of a replay attack.  Replay attacks work on the fact that both chains are identical.  If you send a transaction on one chain, an attacker could see it and then broadcast the transaction on the other chain to their own address.

This is one big reason I don’t like hardforks aside from the confusion, scams and devaluation, it’s one more huge problem to have a reply attack.

These issues are why I believe hardforks shouldn’t be possible.  If it means the blockchain is not 100% open source and permissionless then this is acceptable.  Open Source is currently what makes most currencies vulnerable.  Let’s take it back to the secure, traditional IT methods of a secure server vs client model (where the secure server should be Bitcoin or whatever currency we are talking about).

My money is on the real Bitcoin.  Bitcoin Cash could have been interesting if they did more than just increase the blocksize and didn’t copy the blockchain.  I pick the original Bitcoin for the long run.

Nasdaq Plans To Become Cryptocurrency Exchange

This is huge news with the CEO of Nasdaq saying they would consider becoming a cryptocurrency exchange.   One caveat is that Adena Friedman said she is waiting for the market to mature.   I anticipate she sees the threat to cryptocurrency as the fact that we don’t know for sure which currencies will be around in the coming years.  She is waiting for the dot-com like bubble to burst which is an excellent strategy for managing the risk.

The fact that Nasdaq would even contemplate this plus the big money from Wall Street going into cryptocurrency is a very positive sign of where the industry is heading.  The coins that survive the bust will become incredibly valuable and I think Bitcoin is one of them dispute its many issues and drawbacks.  It is a tricky call, with one risk of course being hardforks.  After more Bitcoin scams and hardforks will people possibly lose interest in Bitcoin or will it increase interest in the real Bitcoin?

Either way it may be a bumpy and turbulent ride, but cryptocurrency is looking like its about to create its own economy.  Trading cryptocurrency is not the issue though, as we still wait the “messiah coin” which will hopefully resolve the many issues that we have today.  I’d like to see a coin that does everything right or most things right rather than focusing on just a single aspect.

The time will come and the market will follow.  Everyone hold on things are about to keep getting interesting in 2018!

BitPay Accepts Bitcoin Cash

Although we have used Bitpay I didn’t realize it was available for brick and mortar physical transactions since we’ve never done any.   On that end it puzzles me how on earth anyone would ever use them?

Bitcoin can take minutes and even hours to confirm!  Can you imagine waiting at the restaurant held hostage because “your transaction is unconfirmed?”.  This is the advantage fiat processing still has.

But, really I think Bitpay should rebrand to use currencies that are actually usable for instantaneous transactions at retail or restaurant.

They should be using a currency like Ripple or Lumens which is nearly instant.  There are a few currencies that have these properties but any Bitcoin or Ethereum derivative is simply not going to cut it in my opinion.

Personally I don’t know a single person who has or would use any of these coins for payments, we all reach for the cash, debit or credit.  These are people like me, who are crypto enthusiasts but we also value convenience and what works.  And I think a lot of the cryptoworld is stuck in a dream world that simply doesn’t exist.  Now, for us in IT we and the customer can often wait over night for the transaction to be confirmed, but at a grocery store or restaurant neither the seller or customer would be impressed.

 

Federal Reserve Says Bitcoin Cannot Replace the US Dollar

The new chief of the San Francisco branch, of the privately held, Federal Reserve Bank has stated that Bitcoin cannot, and will not ever replace the US Dollar.  First of all, they are doing a fantastic job and understand their market and duties.  They cannot step into this job and say anything else and expect to keep it.

I get it, Bitcoin is printed without supposed backing, although it is backed by a lot of physical hardware assets and electricity.  Fiat currency, especially the US Dollar is printed and floated without any controls or restrictions.  Well, actually, the only control and restriction is that there is none.  The Federal Reserve prints at will and on demand, without limitation or backing of any sort, and they have long abandoned the gold standard.

The fact that the Federal Reserve would comment at all on this matter and mention Bitcoin, to me, is very telling that it is very much a possibility.  When you have this much money put into something that is being traded worldwide, every second, and such an ecosystem I think it is an excellent contender to the US Dollar and fiat currency in general.  Remember, fiat is backed by nothing as well and printed without any limit.  Most cryptocurrencies actually are limited in how many coins can be mined or minted at any rate.

Cryptocurrency is currently at a $421 Billion USD market cap and I think it won’t be long before it is in the trillion dollar range.  This is ultimately the worst nightmare for any central banker with so many competitors, of course your number one priority should be outlawing them and shutting them down.

On that end the Fed is right to do it and is doing their job well.  However, for people who don’t essentially control the fiat financial system, we would do well to root for cryptocurrency as an alternative system.  I think both systems can survive and work together, but if fiat pushes it too much, I think there may be a digital currency revolution that far surpassed the digital rights movement of the late 90s and early 2000s that caught the RIAA and MPAA by surprise.