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

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!”.

G20 Summit Proposes To Adopt, Regulate and NOT Ban Cryptocurrency

From reading various news articles I’m going to summarize what I think are the few key take aways from the G20 summit in Buenos Aires, Argentina.

I’ve simplified these into two points although they could have been broken down I think it really boils down to two key conclusions.

Cryptocurrency Should Be Adopted

The G20 agrees that cryptocurrency is part of a transition to digital economy and that eventually fiat (cash) will die.  They also recognize the power of cryptocurrency to bring finance and banking to those who normally wouldn’t have had access.  In a way it is gratifying that they are essentially saying between the lines that cryptocurrency and being your own bank are a good thing for everyone.

I also think it is an act of desperation and I will get more into that in my conclusion.

Cryptocurrency Must Be Regulated

There were several discussions regarding the regulation of cryptocurrency.  As we can see and as I suspected, the main drive is to control and tax cryptocurrency.  They want rules around it so that they aren’t cut out of taxes and control as a middleman.  A strong focus was put on preventing criminal activity and money laundering (you know stuff that NEVER happens with our current financial system).

Why have they adopted this position?

I think it’s natural because as I’ve said companies and people will move to whatever country is friendly to them.  It is almost an act of desperation because I think regulators can see cryptocurrency could head underground and out of the reach of any regulators if they keep cracking down.  I am in no way equating cryptocurrency with piracy or illegal activity but I will say this a similar thing that happened in the days of filesharing such as Napster and Limewire etc… Authorities didn’t understand the new economy was digital and that people wanted to download digital copies of their favorite songs and videos.  Because that void was never filled by the RIAA and MPAA, piracy was rampant and their crackdowns only increased it.  Initially piracy was largely underground but then Bittorrent came out as a decentralized filesharing platform and it has not only made the problem worse but virtually unstoppable.

Cryptocurrency with money being at stake I think would become even larger if the crackdowns continue.  Cryptocurrency would then largely be traded directly without the involvement of fiat if regulators, governments or exchanges (such as Bittrex who recently moved overseas to Malta because they offered them a better deal than the threats they were receiving in the USA).

If Venezuela, Russia or China is more friendly in the end people will move their business and crypto to whatever country they trust.  This can happen in an instant so, really, the regulators should treat the relevant parties well or they can pack up with all of their money.  There is no option to “freeze their accounts” for political reasons like the days of the past.

The rough ride is probably far from over as there will be reasons that governments and regulators may make decisions that are contrary to the G20 logic but I think in the end, reason will win out.

Bitcoin Down 53%? Time to panic or time to be happy?

We’ve got to put this all into perspective when people come panicking and asking if you’ve sold all of your Bitcoin.  Just hold, the chart isn’t a lot different than a lot of stocks or commodities.  Let’s speak in terms of the chart since May of 2016.

 

BitcoinMay-2016-toApril-01-2018

Let’s first look back to May 2016 where it was worth about $423 USD.  Is today’s $6974.84 USD so bad?

How about April 20, 2017 whereit was worth $1216 is that so bad compared to today?

The time that makes people nervous is when Bitcoin went on a bullrun around November 1st, 2017 and was worth around $6700 USD to an all time high of around $19500 on December 16th.  I would expect like with any stock that there will be a digestion period or a pullback.

Am I worried yet?  No, unless Bitcoin drops below a year ago’s $1000 why would anyone worry?

Bitcoin on top of that now owns about 50% of the market with this drop so it has shown resiliency and leadership.

It’s not time to panic, it is time to hold steady and wait for the next bull run.  At the end of the day government policy can’t stop Bitcoin.  There will always be a country where it is legal and exchangeable.  If a blanket ban happens people will start trading directly with Bitcoin for other goods.  There’s no way people who have invested thousands of dollars in hardware and power will be throwing these coins away or walking away from them.

Donald Trump USA Bans Nicolas Maduro’s Petro Coin

The USA’s President Trump has officially banned the Petro Coin.  This is actually encouraging and not unexpected.  To me it speaks volumes that it can work but is working, otherwise there would be no point in banning it.  Apparently it will also be possible to exchange Petro for the Russian Ruble.  As I suspected I feel strongly that the initial funding largely consisted of China, Russia and Iran and that more support will be ongoing once the coin is launched.

As an investor I am a bit frustrated with this ICO (as I am with most these days) because it took way too long to find information about it and individual investors have been locked out.  They really do risk alienating the audience they were targeting as I am getting frustrated and losing interest fast.  However, the prospects for this first state backed coin remain high and will either boom or bust I predict.  And there will probably be a lot more booming considering what is at stake and the support that Venezuela has.

If the US thought the Petro Coin would be worthless and had no hope of succeeding it’s unlikely they would ban it.  Regardless of what we may personally feel, this is a strategic tactic by the US to stop the first country to try to evade sanctions placed on it.  It will be another precedent if Petro succeeds and other sanctioned countries can freely trade in this similar way or ecosystem created by Venezuela.

Ironically Venezuela is helping to keep the cryptocurrency dream alive which is becoming your own bank and that no one has the right to freeze, take or prevent the spending of your money.

How Governments Should Handle Crypto and ICOs

First of all after seeing so much confusion, panic and misinformation in the news, it is about time each country made a dedicated website for cryptocurrency.  The winners will be the countries who clearly communicate their policy, laws and intentions on handling cryptocurrencies.

Now in all fairness things are moving so fast, governments have genuine reason to fear cryptocurrency (aside from illegitimate reasons…) with most ICOs being absolute scams.  The real reason is of course is that governments can no longer vote or control who can fund themselves, the internet and public will judge.  However, there are still good reasons to have regulation or at least accountability so ICO fraudsters cannot hide overseas and disappear with the coins they collect.  This is my position where I feel the majority of token ICOs have no intention of completing their projects.

Getting back to what government should do, it’s not only ICOs but also the laws surrounding the purchase, use and trade around cryptocurrency.

The first country(s) to make fair, easy and favorable laws surrounding ICOs and cryptocurrency may find itself literally walking into digital gold and could be the next Hong Kong or Singapore of the crypto-finance world.  It’s up for grabs until countries clarify and cement their policies with crypto.

The first step if I were a regulator would be to hold public consultation and establish a staterun/government website domain to encourage discussion.  I also imagine it will be a hard case for government going after their citizens or businesses because they could simply leave the country with their crypto.  I think this is one element that business and government doesn’t like, that they can no longer control what people do with their money.  Typically governments and banks work hand in hand to achieve specific goals but with cryptocurrency, much like the world-wide web (initially) they are trying to find a balance and also ways to reign in control.

This time is very different, there is a lot at stake for governments, banks, people and business.  If a government moves too aggressively against the crypto world it could find itself sidelined and in financial ruin while their citizens and businesses will flock to countries that treat them better.

One of the first known examples of staterun conspiracy to harm cryptocurrency is Poland’s recent Youtube campaign: https://cryptoslate.com/polish-central-bank-caught-funding-anti-cryptocurrency-youtube-campaign/. They can’t be the only one and we know because of the well-timed press-conferences from various countries that threaten to ban ICOs or the currency outright.  On that note, as an investor this gives me more confidence than ever.  If crypto isn’t a big thing, then governments wouldn’t be talking about it.  The fact they warn so much about crypto suggests that governments and banks are well aware it is here to stay.

It could be that some governments are just playing games and waiting to see how things play out.  Perhaps internally if they see their attacks on crypto don’t kill it then they’ve already accepted that they will stop the fight against crypto.  Personally I think they are well aware that they cannot stop it and are maybe buying time so they can launch their own like Japan, Russia and China have announced.

I don’t think there’s a direct comparison but this standoff reminds me of the anti-piracy fight.  It used to be a fringe and underground element, but with crackdowns it actually has become more prevalent and easy for people to engage in piracy. Don’t get me wrong, crypto is not at all illegal or wrong (as compared to piracy) but the governments are essentially treating the crypto world the same way.  Much like the rule of investment after your strategy fails, trying again “won’t be different this time” I believe.

What do you think, how can governments handle crypto better and how would you react to bans and other aggressive action against crypto and related businesses?