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Why I’m Joining Cointelegraph Magazine as Managing Editor

Over 4,400 people responded to a poll created by Nathaniel Whittemore on Twitter last week, explaining what they did before becoming involved in cryptocurrency.

A guy who designed helicopter manufacturing processes. A plumber. A prison inmate. A nutritionist.

Someone described a group of surgeons who brought a fund to life; someone else pointed out that the industry was flush with professional poker players. There was a yacht captain, a racehorse trainer, a student hustler, a taxidermist, someone who ran refugee centers in Greece.

Many of these people dropped everything to immerse themselves in a field about which they knew almost nothing. But they somehow recognized its potential, and set about educating themselves.

When I discovered crypto, my reaction was to share it. If Bitcoin was a great opening track, then blockchain was the mix tape I wanted to put together for the rest of the world. 

I co-founded Crypto Briefing within a month, and spent the next two years building and editing a publication with a mission to advocate for financial inclusion, data sovereignty, and personal empowerment.

And I did this from a farm in Missouri, not from an office on Wall Street or a skyscraper with a Bay view.

Which is at the heart of my point: this industry is for anyone, and for everyone. No matter where you are, what you do, and what your level of knowledge may be — there’s a place for you here. 

And here at Cointelegraph, I hope to bring that message to millions more people.

About Cointelegraph Magazine

Cointelegraph Magazine is an (almost) new publication that goes beyond the daily news and delves much more deeply into the stories, trends, and personalities that inspire cryptocurrency and blockchain conversations around the world.

People make the products that shape our lives. Mark Zuckerberg may be a hero or a villain, and he may be both — which is why we seek to understand Zuck when we try to decipher what Facebook brings to (or takes from) our lives.

Cointelegraph Magazine will be people-centric, delving into *why* the true believers of blockchain feel they can change the world (and why they think it needs to be changed). And equally importantly, it will illustrate how the implementation of this technology is affecting the lives of countless people — today, right now, not at some distant point in the future.

It will add context and history to topics that seem arcane: for instance, making the key concepts behind decentralized finance (DeFi) accessible and comprehensible to many more people.

It will also employ Cointelegraph’s considerable design and development talent pool to create more immersive experiences for the reader, when a data visualization may be worth a thousand words.

We intend to create a publication that explores this industry through long-form features, thoughtful analysis, and a little humor and satire. A magazine with a more leisurely approach to this rapid-fire business, combining a rewarding read with an opportunity to learn much more about cryptocurrency — and the various ways blockchain technology is contributing to the world.

I hope you enjoy it, at magazine.cointelegraph.com

P.S. Journalists — my inbox is open. jon@cointelegraph.com / DM @JonRiceCrypto on Twitter.

Twitter Adds Bitcoin Emoji, Jack Dorsey Suggests Unicode Does the Same

Twitter co-founder and CEO Jack Dorsey tweeted the newly added Bitcoin (BTC) emoji on Feb. 2 and tagged Unicode, the consortium managing the character standard, in an apparent suggestion to do the same.

Dorsey’s tweet showed that, now, whenever a Twitter user writes the Bitcoin or BTC hashtag, an image showing its symbol appears next to it.

Dorsey’s tweet showing the Bitcoin emoji

Dorsey’s tweet showing the Bitcoin emoji. Source: Twitter

Dorsey’s apparent suggestion that the symbol be included in the Unicode text encoding standard was appreciated by the community, with Lightning Labs co-founder Elizabeth Stark joining the request.

After Twitter added the emoji to its platform, many cryptocurrency personalities test-tweeted it, including Tron (TRX) founder and Bittorrent CEO Justin Sun.

The official accounts of major cryptocurrency exchange Binance used the emoji and suggested that the cryptocurrency community should join in using the hashtag to get it trending on Twitter. Binance CEO Changpeng Zhao also retweeted the message stating, “Let’s do this.”

Jack Dorsey’s involvement with crypto

This is not the first foray into crypto by Twitter’s co-founder, who is also the CEO and founder of crypto-friendly mobile payments application Square. In early December 2019, he also announced that Twitter has a dedicated team to develop a decentralized standard for social media.

Square, on the other hand, was recently awarded a patent for a technology that purportedly cracks a present barrier in cryptocurrency merchant transactions by providing a real-time system that exchanges crypto for fiat money. In November, the firm also issued a letter to shareholders showing that Bitcoin buyers on the app doubled in Q3 2019, but brought low profits.

Messaging Giant Line to Launch Link Token Trading for Japan in April

LVC Corporation, the crypto subsidiary of messaging giant Line, will launch trading of its proprietary cryptocurrency Link in Japan in April.

According to a press release on Jan. 30, LVC is also developing a system meant for Link’s debut in Japan on its local cryptocurrency exchange BitMax. 

Line already began Link trading on its international BitBox cryptocurrency exchange in mid-October 2018. Due to stricter national cryptocurrency regulations in Japan, LVC had to wait to obtain a license from local financial regulators in September 2019 before launching its BitMax cryptocurrency exchange in the country.

According to its official website, Link allows its holders to access a wide range of services and decentralized applications, or DApps. 

Social messengers and cryptocurrencies

Line is not the only social application that is currently attempting to establish its own crypto economy. Other examples are messaging apps Kik, Telegram, Whatsapp and social media giant Facebook.

Both Kik and Telegram are currently struggling in legal battles with the United States Securities and Exchange Commission over the alleged sale of unregistered securities to U.S. citizens. Kik recently requested the formal definition of a trial date for its lawsuit with the SEC. The SEC also recently fortified its case against Telegram and suggested that its Gram tokens are worth less than donuts given their lack of intrinsic value.

Facebook’s Libra stablecoin has also faced pushback from regulators. However, even if it were never to see the light of day, the very idea of Facebook attempting to launch a global alternative to traditional currencies has started a wider discussion about digital currencies globally.

As Cointelegraph reported in late January, major global economists credit Facebook’s Libra with pushing the world to start reconsidering the United States dollar as the anchor currency.

Bitcoin Price Faces the Last Big Hurdle Before $10,000

Bitcoin price (BTC) kicked off 2020 with an incredible 37% gain in the month of January. Aside from that, support was found at $8,200 earlier this week. This support test resulted in a continuation of the upward momentum, leading the price towards $9,500.

Is the price of Bitcoin ready to face $10,000?

Crypto market daily performance

Crypto market daily performance. Source: Coin360

Bitcoin shows strong monthly candle for January

The monthly candle closed yesterday, which can only give a bullish conclusion. A potential new upwards trend has started, given that buyers stepped in during January at every support/resistance test. 

BTC USDT 1-month chart

BTC USDT 1-month chart. Source: TradingView

However, is it all sunshine and rainbows at the moment? Not completely. The price of Bitcoin has now moved towards the next resistance, and this one can be defined as a major hurdle, as shown by the following chart.

BTC USD 1-day chart

BTC USD 1-day chart. Source: TradingView

The resistance at $9,500 is massive, given that the price bounced multiple times on this level throughout the summer of 2019. If a breakout upwards occurs, continuation should be likely towards $10,900, and that would break the psychological barrier at $10,000.

Total market capitalization breaks a major resistance

Total market capitalization 1-day chart

Total market capitalization 1-day chart. Source: TradingView

The total market capitalization of cryptocurrencies is showing a clear test of the $215 billion levels for support, which was needed. After this, the market capitalization rallied towards another massive resistance. This level is found at $240-245 billion and is comparable to the level of $9,500 for Bitcoin.

However, there’s a difference here. The total market capitalization already broke above this level and is currently turning it in to support. Does this imply that altcoins are outperforming Bitcoin? 

It should be noted that there is also a bearish feature that can be observed on the chart. If the total market capitalization breaks below the $240 billion level, the potential bearish divergence becomes a confirmed bearish divergence. Another test of the $215 billion levels (the blue trendline) would be likely in this case. 

Altcoin market capitalization breaks the $80 billion barrier

Altcoin market capitalization crypto 1-day chart

Altcoin market capitalization crypto 1-day chart. Source: TradingView

The altcoin market capitalization is showing a similar chart as the total market capitalization. The critical level of $80 billion is broken to the upside, after which consolidation started. 

The same notions are also stated for the altcoin market capitalization chart. If there’s a break below the $80 billion levels again, the bearish divergence becomes confirmed, and retests of the $72 and $65 billion levels are likely to occur. 

However, on the bright side, if $80 billion is held as support, continuation towards $100, which is also the next resistance.

Bitcoin dominance still hovers below 68%

BTC Dominance 1-day chartBTC Dominance 1-day chart. Source: TradingView

The dominance chart for Bitcoin didn’t change much in the recent weeks as major altcoins are still facing significant resistances. Currently, the most prominent examples would be (XRP) and Ether (ETH). XRP needs to break a 2-year old downtrend, while Ethereum needs to break above 0.02 satoshis to continue higher. 

If either of these two movements occurs, a continuation to the downside is likely for Bitcoin’s dominance. However, if Bitcoin itself starts to run above $9,500, a selloff on altcoins wouldn’t be a surprise. Such a selloff frequently occurs when Bitcoin’s volatility increases. 

ETH USDT 1-day chart

ETH USDT 1-day chart. Source: TradingView

The primary indicator for altcoins is Ether, which also broke a 7-month downtrend, as the chart shows. 

Recently, the price found support at $157 (green zone) and continued to rally. A similar support/resistance flip occurred at the $173 level, which makes me believe that a continuation towards $195 and $230 is likely.

As many charts are showing potential bearish divergences, a breakdown of Ether below $173 would generally mean a retest of $157-162 before further upward momentum. The key indicator for trends is still found in higher highs and higher lows. If Ether price breaks below $157, then the crypto market is in trouble. 

The bullish scenario for Bitcoin 

BTC USD 1-day bullish scenario

BTC USD 1-day bullish scenario. Source: TradingView

The bullish scenario is the main scenario at this point, given that the trend is moving upwards after the breakout of the 7-month downtrend. 

Key levels to watch are the $9,000 level and $9,500 level. The reasoning behind $9,000 is that it could be tested for support before the price continues to rally above $9,500. A retest of $8,750 and $9,000 is still healthy for the market structure, as the price of Bitcoin will still make higher lows. 

An apparent breakthrough of the $9,500 level would indicate a breakout above a significant resistance, as discussed in the article. 

If the price breaks through this level, targets will be found at $10,500 and $10,900. I don’t see resistance at $10,000 other than the fact that round numbers typically function as psychological barriers.

The bearish scenario for Bitcoin 

BTC USD 1-day bearish scenario

BTC USD 1-day bearish scenario. Source: TradingView

A bearish scenario would become valid if Bitcoin lost the $8,200 level. Losing this would signal that the momentum of higher lows is gone and further downward pressure would be expected.

Thus, what signals should traders look for in order to determine that Bitcoin has become bearish? If the price makes a retest at $8,750, the bounce should be severe enough to break back above $9,000. However, if resistance is immediately found and the price makes a lower high then continuation to the downside is warranted. 

But, price first needs to arrive at these levels to determine how traders and investors react. The momentum is up for now, and when the price of Bitcoin breaks above $10,000, FOMO (fear of missing out) could start to kick in. Especially given the halving is now just 100 days away.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Top 10 Books Recommended by Crypto Thought Leaders

At the end of 2019, Cointelegraph collected an interesting and sometimes unexpected selection of books from people without whom the world of cryptocurrency and blockchain would be completely different.

Tyler and Cameron Winklevoss, Changpeng Zhao, John McAfee, Grigory Klumov and the Cointelegraph team shared the most interesting books that they read in 2019. These recommendations are for those who want to immerse themselves in the crypto industry. They also aim to help readers understand the ideas that have influenced the worldview of these industry leaders.

Here are the top 10 books that the best crypto minds of our time recommend reading.

“The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution” by Gregory Zuckerman

“I was in hedge funds for more than a decade and read every single book I could find about them since it was a pretty secretive industry that protects it secrets to make money. So there is one outstanding track record in the space that everybody knows about fact wise but very little about actual secret sauce behind it. It was exactly the reason I liked the book ‘The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution.’ The story part is still strong and I would gladly advise it to anybody who follows markets, especially algo traders.”

Gregory Klumov, Stasis founder and CEO

“The Origin of Species by Means of Natural Selection” by Charles Darwin

“Charles Darwin’s ‘Origin of Species by Means of Natural Selection.’ It is the most detailed work ever on the mechanics of competition, survival, adaptation to changing environments and growth — the fundamentals of the business world. Businesses are composed of organized collections of individual members of the human species. Businesses therefore act in manners identical to the character of the human animal. They follow the same principles. Businesses begin, grow, flourish or disappear. They follow the laws of evolution exactly as species do. If you are in business and have not read ‘Origin’ from cover to cover multiple times, then you are a fool.”

John McAfee, cryptocurrency entrepreneur and founder of computer security company McAfee

“Bitcoin Billionaires: A True Story of Genius, Betrayal, and Redemption” by Ben Mezrich

“Bitcoin Billionaires is clearly our favorite book of 2019! Ben Mezrich masterfully captures the Wild West days of Bitcoin and the personalities who were ‘crazy’ enough to believe in, invest in, and build the crypto revolution over the past decade. It’s fast-paced, colorful, and distills the complexity underpinning crypto in an accessible way that gives the reader a fundamental understanding of this new technology that’s reimagining the world.”

— Tyler and Cameron Winklevoss, Gemini co-founders

Read Cointelegraph’s review of the book here

“The Cathedral and the Bazaar: Musings on Linux and Open Source by an Accidental Revolutionary” by Eric S. Raymond

Eric Raymond’s work on software development methods is based on an analysis of the Linux core development process and his personal experience managing the open-source Fetchmail project. This essay is often presented as a manifesto of the open-source movement.

The Cathedral and the Bazaar has expanded our vocabulary with new terminology. It also predicted the end of the cascading model of software development and the decline of the era of large software companies, thanks to the popular movement for free software. The central thesis of the essay is Raymond’s statement that “given enough eyes, all errors pop up.” He calls it the “Law of Linus.” — suggested by Paolo Ardoino, Bitfinex’s chief technology officer.

“Blitzscaling: The Lightning-Fast Path to Building Massively Valuable Companies” by Reid Hoffman

Changpeng Zhao, known as CZ, became a leader in the crypto community of China when he founded cryptocurrency exchange Binance in 2017. Today, not one major crypto event can do without an energetic CZ. Recently, on his blog on Binance’s official site, he compiled a list of books that he recommended reading over the holidays. One of these is Blitzscaling by Reid Hoffman. CZ said that this book tells in detail how organizations of different sizes work, as well as some consequences when teams grow to different sizes. According to CZ, this was very useful for Binance when the company planned its growth as an organization. Also, the book talks about recent topics including cryptocurrencies.

“The Advantage” by Patrick Lencioni

Here is another book recommended by Changpeng Zhao. The author, Patrick Lencioni, describes how organizational culture contributes to the long-term success of a business and explains how to change the stereotypes that have developed in this area. This process requires considerable efforts from the owners of the company, but as a result, those who monitor “corporate health” become leaders, because such a unique advantage cannot be copied.

The book is based on the many years of Lencioni’s personal experience, who is one of the leading thinkers in the field of business. He describes in detail the tools necessary for serious and interesting work.

Recommendations from Cointelegraph

“The Age of Cryptocurrency” by Paul Vigna and Michael Casey

Wall Street Journal commentators Paul Vigna and Michael Casey write about the fears and rumors surrounding Bitcoin as a means of calculation and encourage readers to prepare for a new economic reality that will come.

In their book, they tell the story of Bitcoin and analyze the role of cryptocurrencies in the modern world: How they came from and where they came from, what functions they perform, and what you need to know to be ready for a new world based on cyber economics.

By eliminating the need for an intermediary, cryptocurrency technology supports an infrastructure in which strangers can conduct business with each other. This is achieved by transferring the most important function of maintaining accounting registers from centralized financial institutions to a network of autonomous ones.

“Growth: From Microorganisms to Megacities” by Vaclav Smil

Bill Gates, a famous entrepreneur, public figure, philanthropist and former shareholder of Microsoft, traditionally shares a list of the best books to read each year in order to start the next year on the right foot.

Vaclav Smil is one of Gates’ favorite authors. In the book, the author explores growth in nature and society, and discusses how we can save the planet. Gates also warned that some sections of the book resemble an engineering manual. 

In the book, growth is presented as the goal of sterilizing humans and all living organisms. The book discusses the problems of tracking the growth of empires and civilizations, explaining that we can outline the growth of organisms in the individual and evolutionary periods, but the progress of societies and economies, which is not so linear, includes both decline and renewal.

“The Art of War” by Sun Tzu

Despite the fact that the book is more than 2,500 years old, today it remains the reference book of many successful entrepreneurs. The laws and strategies described by prominent Chinese commander Sun Tzu are famously applicable in modern business conditions. The main thesis of the book is to know how to win before the start of the battle, counting all the moves, to know yourself and the enemy, choosing the right time, and using the whole range of tools and weapons available.

The main thing is to be able to comply with modern realities, know the main managerial positions, not be afraid of risk and apply effective strategic laws in practice. This is a good book on management strategy, reflecting the skills and thoughts of the Chinese commander.

“Super Pumped: The Battle for Uber” by Mike Isaac

One of the biggest business books of this year comes from Mike Isaac, a New York Times journalist who writes extensively on technology. This is a fascinating book that describes more than just recent events. The book describes almost the entire history of Uber, as well as the history of previous projects of Travis Kalanick, in which he earned a steady hostility to venture capitalists, which later expressed itself in relation to him in Uber. The book describes business details and the struggle with regulators. 

Recently, it came to light that Showtime is planning to launch a TV series on the company’s success story, based on this book, and Mike Isaac will directly participate in its creation.

Trezor Wallets Can Be Hacked, Kraken Reveals

Kraken Security Labs revealed on Jan 31. that Trezor hardware wallets and their derivatives can be hacked to extract private keys. Though the procedure is quite involved, Kraken claims that it “requires just 15 minutes of physical access to the device.”

The attack requires a physical intervention on the Trezor wallet by either extracting its chip and placing it on a special device or soldering a couple of critical connectors.

The Trezor chip must then be connected to a “glitcher device” that would send it signals at specific moments. These break the built-in protection that prevents the chip’s memory from being read by external devices. 

The trick allows the attacker to read critical wallet parameters, including the private key seed.

Though the seed is encrypted with a PIN-generated key, the researchers were able to brute force the combination in just two minutes. 

The vulnerability is caused by the specific hardware used by Trezor, meaning that the company cannot easily fix it. It would need to completely redesign the wallet and recall all existing models.

In the meantime, Kraken urged Trezor and KeepKey users to not allow anyone to physically access the wallet.

In a coordinated response published by Trezor, the team minimized the impact of the vulnerability. The company argued that the attack would show visible signs of tampering due to the need to open the device, while also noting that the attack requires extremely specialized hardware to perform.

Finally, the team suggested users activate the wallet’s passphrase feature to protect from such attacks. The password is never stored on the device as it is added to the seed to generate the private key on the fly. Kraken also noted that this is a viable alternative, though researchers referred to it as “a bit clunky to use in practice.”

The feature also adds significant responsibility to each user. The passphrase needs to be complex enough to not be easily brute forced as well, and forgetting it would completely lock users out of their money.

Cointelegraph reached out to Kraken for additional details, but had not received a response as of press time. The article will be updated as more information becomes available.

Overstock’s tZERO to Launch Broker Dealer in First Half of 2020

Overstock’s blockchain arm tZERO aims to launch its cryptocurrency and digital asset broker dealer service in the first half of 2020.

In a letter to investors released on Jan. 30, tZERO CEO Saum Noursalehi provided a recap of the company’s progress over the last year and highlighted tZERO’s goals for 2020. One of the main objectives of the company is to roll out a digital assets broker dealer in the first half of the current year, dubbed tZERO Markets.

Noursalehi said that the company is working closely with regulators on the matter, and further added that “this is an important initiative as it will allow us to integrate our web and mobile app experiences in the future, enabling investors to trade digital securities and cryptocurrencies on one platform.”

As previously reported, tZERO’s Boston Security Token Exchange filed an application with the SEC to approve the launch of a market for publicly traded registered security tokens, in October 2019. The exchange asked asks the commission to “adopt rules to govern the trading of equity securities on the Exchange” which “would operate a fully automated, price/time priority execution system for the trading of ‘security tokens.’”

Broker dealers receive the green light from the SEC

Last November, Harbor, a digital platform for alternative assets, received a transfer agent license from the SEC. The license enables Harbor to maintain financial records of security token ownership, track account balances and pay out dividends while attracting blockchain companies that are looking to conduct Reg A+ offerings.

The blockchain-based startup Blockstack was the first-ever digital token offering to receive the go-ahead from the SEC to run a $23 million investment round under Regulation A+. Founders of Blockstack Muneeb Ali and Ryan Shea reportedly spent 10 months and approximately $2 million to get approval from the SEC for a Reg A+ offering.

Crypto Upstages Other Mobile Payments in US Congressional Hearing

Congress clearly has crypto on the brain, with the question of regulation being a matter of when.

At a Jan. 30 hearing before the Fintech Task Force, a body within the United States House of Representatives, lawmakers were focused on bringing crypto into the conversation. 

The basics

The hearing — entitled “Is Cash Still King? Reviewing the Rise of Mobile Payments” — featured testimony from witnesses with backgrounds spanning payment providers, consumer advocates and financial inclusion non-profits. 

While some of the written testimony provided by the witnesses before the hearing mentioned cryptocurrencies, the degree to which the industry occupied the hearing was surprising. The members of the Fintech Task Force are clearly looking seriously at cryptocurrencies and blockchain technology as answers to issues of financial inclusion and a sluggish payments process.

The representatives thinking crypto

A name familiar to many Cointelegraph readers, Rep. Tom Emmer (R-MN), the ranking member of the task force, was the first to breach the subject of crypto. In his opening remarks, Emmer commented that “Apple Pay, Zelle, Square Cash and even Bitcoin are now household names.” Earlier today, Cointelegraph reported on Emmer’s emphasis on cryptocurrencies and the need to support innovation. 

In contrast to Emmer’s interest in existing cryptocurrencies, Rep. French Hill (R-AR) centered his questions around a “blockchain-based rail” in the banking system, asking the witnesses: “Can we have an approved regulatory payment rail that’s blockchain-based, that’s available to banks and non-banks equally?” 

Kim Ford, executive director at the U.S. Faster Payments Council, answered that such a system would be primarily a regulatory problem: “I don’t think it would be a limitation of technology being able to support that rail, it would actually come down to whatever policy limitations are in place.” She continued to say, “There is inconsistency in the way that blockchain is regulated today.” 

PayPal’s head of global public policy Usman Ahmad noted that on some scales, this already exists, saying “For smaller-amount payments I think you are seeing some blockchain-based payments.” Regarding the prospect of greater adoption, Ahmad told Cointelegraph later that “It’s still very up in the air as to what happens in this space.”

Speaking with Cointelegraph after the hearing, Rep. Hill was more confident, saying: 

“A payments system that has a regulatory rail that’s blockchain, that’s open to banking companies and non-banking companies to offer a payment alternative, is where we’re headed.” 

Specifically, Hill was bullish on the prospect of a digital dollar that would facilitate a wide spectrum of transactions “The idea that we have a dollar mechanism that is a token for commercial or consumer transaction is appealing.”

Witness Aaron Klein, a fellow at the Brookings Institute, noted in his testimony that “Our legal and regulatory framework completely assumes that payments are tied to banking.” Rep. Warren Davidson likewise saw the current payments system’s dependence on traditional financial institutions like banks as a matter of convention rather than law. He told Cointelegraph that: 

“There’s nothing in current law that requires payment systems to be anchored to banks. They largely are, but as the presence of Paypal, Venmo show, you don’t really need a bank to do that, but it’s hard to pull off without one.”

Davidson continued to present crypto as an alternative. “The crypto space spooks a lot of people because banks have become so integrated into the payment system,” He said. “I don’t know where it’ll go, but the architecture needs to change. I think tokens are a great way to do it.”

Regulation as the choke point

A general consensus emerged throughout the hearing that, whatever the solution, U.S. payments were simply falling behind. Several commentators saw regulation as the sticking point rather than technology. “American adoption of mobile payments continues to lag,” said Christina Tetrault of Consumer Reports. “Unfortunately, payments law is an irrational mess.” 

As to the innovations of fintech firms like Venmo and Paypal that put global transmitting power on the smartphones of regular consumers, Tetrault pointed out that the actual transaction framework is not that revolutionary. “There’s nothing truly new with some of these technologies that are passed off as new,” Tetrault told Cointelegraph. “When it comes to the way that stuff is actually moving, it’s almost half a century old.”

Aaron Klein compared American progress in payments unfavorably to that in China. “It pains me to say this, but China’s system is much more efficient, much faster, and has reached a level of adoption that is somewhat mind-boggling,” he said. 

When asked about whether the shortcomings of the payments systems in the U.S. were due to technology or regulation, Rep. Stephen Lynch (D-MA) split the difference, telling Cointelegraph “I think it’s both.”

So is crypto regulation inevitable?

Like Hill, Fintech Task Force Chair Rep. Lynch sees crypto as an inevitable component of the conversation. Lynch told Cointelegraph, “I think the answer’s out there, some of it is technology, some of it is maybe light-touch regulation, but it’s a conversation we’re going to have.” Regarding Bitcoin specifically, Lynch was similarly cautious but forward-looking:

“I think there are some open questions about energy consumption for a proof-of-work system, such as Bitcoin. Right now, the adoption hasn’t got to the level where people are using it for daily transactions, necessarily, but we’re early in this process.”

As to prospects for blockchain, Lynch said: 

“Blockchain and other technologies — tokenized systems — present the opportunity for instantaneous settlement. It’d be very disruptive of the system, but you lower the cost.”

Regulation or innovation to facilitate financial inclusion

The principal legislation under discussion was the Payment Choice Act of 2019, sponsored by Rep. Donald Payne (D-NJ), which would fine cashless retail businesses. The basic argument of the bill is that cashless businesses exclude lower-income and minority demographics. These groups are often excluded from financial services and so generally more cash-dependent.

As Rep. David Scott (D-GA) summarized, “Are we doing enough to make sure we address this fundamental problem? According to the most recent statistics there are 58 million unbanked or underbanked individuals out there.” 

Rep. Lynch agreed, in his closing statements telling a personal anecdote about leading an ironworker union in Boston that had trouble accessing banks because the banks told them that their accounts did not earn enough money to cover the cost of cleaning the mud that they tracked in. Lynch summarized: “The banking industry has tended to gravitate toward the needs of the wealthy.”

Specializing in this area was witness Deyanira Del Rio, a co-executive director for the New Economy Project, specializing in financial access in New York City. She commented that the ongoing conversation “needs to look at some of the more predatory continuing practices in our system.” As an example, Del Rio pointed to New York State’s strong anti-usury provisions, which she said keep payday loan operators, among others, out of New York city. 

Del Rio was, however, not particularly optimistic about the role of technology in solving these issues. In one scathing comment, she said that “For decades companies have evoked innovation as a smokescreen, frankly, to avoid regulation.” 

Takeaways

There was a surprising amount of consensus among witnesses and representatives as to the problems facing the unbanked, access to financial services in the U.S. and inadequacies in our current systems for making payments and settling transactions. The differences in opinion seemed to be primarily those of which concerns took priority. 

Nonetheless, as far as crypto is concerned, it seems clear that it has become a forefront concern for many members of the Fintech Task Force. 

It’s worth noting that, given its area of specialization, this task force is at the forefront of national conversations on blockchain. Nonetheless, it’s safe to say that these representatives, at least, are working on at least establishing a coherent set of definitions and groundwork of understanding, strongly indicating that regulation is, in fact, coming.

Tesla Stock Outperforms Bitcoin in 2020 as $10K Bull Run Continues

Bitcoin (BTC) investors face double disappointment from Elon Musk this month as data shows Tesla is the one investment outdoing BTC in 2020. 

Figures from Cboe tracking $TSLA stocks against Bitcoin confirm that while BTC/USD has sealed 30% gains since Jan. 1, the former is up more, at 38%.

Tesla hits all-time high

Against the expectations of many, Musk’s firm has become the star of stock markets this month, defying macro pressures to reach all-time highs of $589 on Wednesday.

Tesla stock versus Bitcoin, Jan. 1, 2020-present

Tesla stock versus Bitcoin, Jan. 1, 2020-present. Source: Mati Greenspan/ Twitter/ Cboe

The progress follows recent comments by Musk, who previously hinted he was a major fan of cryptocurrency. As Cointelegraph reported, he now says he is “neither here nor there” on Bitcoin, and has shared concerns about its use for illicit purposes.

While BTC/USD has appeared to feed off current geopolitical pressures centered on China’s coronavirus outbreak, its returns have still failed to beat Tesla’s.

“Apparently not the best performing asset this year,” Cointelegraph Markets analyst Mati Greenspan summarized comparing the two assets.

…But BTC clinches long-term gains crown

Fellow Cointelegraph analyst Michaël van de Poppe highlighted the similar market capitalizations of Tesla and Bitcoin, as $120 billion and $170 billion respectively.

“Just to give perspectives of how small our market is,” he summarized on Twitter.

Zooming out, Bitcoin’s ten-year performance remains king. At nearly 9 million percent, Tesla’s rise to current levels from around $20 in 2010 provides little competition. 

Musk has kept quiet on advancing the Bitcoin cause in a manner that differentiates him from other tech industry figures. 

Notably, Twitter CEO Jack Dorsey has gone public with support for Bitcoin, including participating in the Lightning Torch transaction relay last year.

Bitcoin Ain’t What It Used To Be, Pioneer Investor Says

A millionaire by age 18, early Bitcoin (BTC) investor Erik Finman said the environment around Bitcoin has significantly changed since 2011 — and not for the better. 

“It just ain’t what it used to be,” Finman told Cointelegraph in a message on Jan. 26, 2020.

Recounting the early days, Finman explained:

“Bitcoin, when it first came out, was incredible. It wasn’t just cutting edge technology – it was bleeding edge! You just felt the energy in the air. That this was the real deal. Everyone felt united in this cause — this mission. Those were some of the most beautiful moments of my life.”

Investing in 2011

Finman made headlines over the past several years for his success as a young Bitcoiner. Finman invested $1,000 into BTC in 2011, turning him into a millionaire by the age of 18 due to Bitcoin’s dramatic price increases, Cointelegraph detailed in June 2017. 

In late 2018, however, Finman expressed his thoughts on Bitcoin’s eventual demise based on several factors, including community infighting, etc. 

Changing tides

The atmosphere seen in Bitcoin’s early days is now gone, Finman told Cointelegraph. Adding to his reminiscence of the asset’s beginnings, he noted:

“[T]hose times of ‘unity’ & ‘cutting edge’ technology seem to be left in the past. I really care about Bitcoin – but the community can’t seem to get it together in my opinion. I’ve tried to get involved within the community to fix it – but it was very hostile. There is still wonderful people in the community and incredibly smart people working on the technology problem.”

Looking toward the future

A popular opinion in the crypto space sees Bitcoin hitting a $100,000 price tag at some point.   Finman sees no real chance for a $100,000 or $1 million Bitcoin if the community does not change, barring any drastic global disruptions, he explained.  

“Even if the world were to destabilize, Bitcoin isn’t necessarily THE CRYPTOCURRENCY for people to put their money in, in a time like that,” he said, noting Monero and Zcash as potentially better options.

Relating the situation to the death of a popular social media entity, Finman added, “Bitcoin is the next MySpace if the community can’t make drastic changes.”

Growing older

Finman has been in the Bitcoin game a considerable length of time, so his comments carry weight. Finman first invested in Bitcoin at the age of 12, so his views on the overall situation in 2011 may have differed from adults who bought it at the same time.

Several data points do, however, line up with Finman’s comments on community disagreements, including the Bitcoin Cash (BCH) fork in 2017, and the birth of Bitcoin maximalism.

Cardano founder Charles Hoskinson has also expressed issues with Bitcoin. “One of the biggest problems with Bitcoin, […] is that it’s blind, deaf and dumb and that was by design,” Hoskinson said in October 2019 in an interview on Anthony Pompliano’s Off the Chain podcast.

SEC Tells Telegram Its Crypto Is Worth Less Than Donuts

On Jan. 27., the Securities and Exchange Commission (SEC) fortified its case against Telegram, saying its Gram token is worth less than donuts. 

The SEC’s counter

In the latest in their battle with Telegram and the Telegram Open Network (TON), the SEC argued in a memo to the Southern District Court of New York:

“Telegram offered and sold Grams as securities when it promised to deliver them in exchange for funds pursuant to the Purchase Agreements. That reality will not have changed if the Court permits Telegram to deliver Grams to the Initial Purchasers as part of a broad public distribution, which is in violation of Section 5, and which the Court should enjoin”.

In the memo, the SEC included a few barbs against the instant messenger service. It called out Telegram for doing “a two-step around the registration provisions” and performing “sleight of hand” by fabricating the difference between a purchaser’s investment in Grams and their delivery of the Grams, which would allow them to withhold info normally in regulatory statements. Pavel Durov’s creation, the document contends, gave a “strawman” argument about “existence” since “Grams will never be tangible.” The SEC put the frosting on when it wrote: 

“Telegram’s attempt to avoid this economic truth by labelling Grams ‘commodities’ also fails. Grams are not commodities. Unlike gold, comic books, and Krispy Kreme donuts —  commodities Telegram compares to Grams — Grams have no intrinsic value.”

Background

Cointelegraph reported on the start of Telegram’s legal woes last year, when the SEC filed an emergency action to freeze the company’s sale of Gram tokens.

Per the allegations, Telegram would have sold Grams only to accredited investors in the initial offering. But holders could then have resold them — a violation of Rule 506(c) according to the SEC: 

“Once Telegram delivers the Grams to the Initial Purchasers, they will be able to resell billions of Grams on the open market to the investing public. Telegram and/or its affiliates will facilitate these sales on digital-asset trading platforms. Once these resales occur, Telegram will have completed its unregistered offering with billions of Grams trading on multiple platforms to a dispersed group of investors.”

Fearing Revolt, Roger Ver’s Bitcoin.com Backs Down From Proposed BCH Mining Tax

According to a statement earlier today, Jan. 28, Roger Ver’s Bitcoin.com is backing down from the 12.5% mining tax on Bitcoin Cash they proposed along with other major BCH mining pools owing to the community’s overwhelming negative response to the proposal. 

Bitcoin.com’s position

Last week, Bitcoin Cash (BCH) personalities proposed a 12.5% tax on mining rewards that would ostensibly go to funding network development. Now Bitcoin.com has rejected the proposed mining tax unless serious alterations are made:  

“As it stands now, Bitcoin.com will not go through with supporting any plan unless there is more agreement in the ecosystem such that the risk of a chain split is negligible. We think it is clear that the existing proposal does not have enough support.”

In the post, Bitcoin.com urged transparency, flexibility and unity.

Bitcoin.com suggests that a lack of ecosystem agreement risks a split in the chain, though they seem to be looking for ways to fund further development: 

“We will be working to come up with a plan that is profitable for all the relevant parties and which preserves the fundamental economics of Bitcoin Cash.”

The post ends with a call for more flexibility: 

“A permanent proposal would be in effect a carte blanche on development and would incentivise “development for development’s sake,” which would defeat the purpose of the fundraising […] to create fast, reliable, digital cash upon a stable, largely unchanging, economically rational Bitcoin protocol.”

Critics attack the proposal

Cointelegraph reported last week on the proposed tax published by Btc.top CEO Jiang Zhuoer. The “infrastructure funding plan” would have miners send 12.5% of mining rewards to an entity in Hong Kong. The co-signing entities repped 27% of hashrates. Most controversially, the proposal included “orphaning” non-compliant miners — the practice of removing blocks from the chain that resembles a 51 percent attack.

Critics underscored the routing of funds to a corporation instead of a nonprofit and the absenting of a voting procedure, which would mean company owners would control BCH development. Other complaints included Chinese government interference and profitability since the tax would affect miner revenues. 

In other news on cryptocurrencies looking to fund development, Litecoin’s Charlie Lee pitched that miners donate 1% of their rewards to development on Jan. 24.

Cointelegraph.com reached out Roger Ver for comments but hadn’t received any at press time.