‘Insider Trading Is a Non-Crime’: Roger Ver Bites Back as GDAX Re-Opens Bitcoin Cash Trading


 

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Outspoken bitcoin cash proponent Roger Ver downplayed accusations that Coinbase employees had engaged in insider trading prior to the public revelation that the company was adding full support for bitcoin cash.

‘Insider Trading Is a Non-Crime’: Roger Ver

Speaking with CNBC on Wednesday, the early cryptocurrency investor and entrepreneur — once known as “Bitcoin Jesus” — said that the answer to the allegations of insider trading is not asking the government to further regulate cryptocurrency exchanges.

As CCN reported, the bitcoin cash price rose considerably in advance of the announcement, leading many people to question whether Coinbase employees had, in violation of company policies, traded bitcoin cash before the news was public knowledge. There are also rumors — thus far unconfirmed by CCN — that the information had been leaked to at least one cryptocurrency trading group.

Once Coinbase did open bitcoin cash markets, the coin’s price was incredibly volatile, spiking to $9,500 and leading the company to suspend trading just minutes later. The exchange did not re-open the markets until Wednesday.

Coinbase said that it is investigating the allegations of insider trading and will terminate any employee who engaged in the practice, but the company nevertheless incurred significant criticism for the way it handled the rollout.

However, Ver said that the onus is on consumers to look out for themselves, rather relying on the government to protect them from external threats.

“At the end of the day, buyers need to beware of whatever service they’re using, whether it’s a Bitcoin exchange or a coffee shop…be careful, take a look at what you’re doing, and don’t depend on the government to keep you safe from everything out there in the world,” he said.

Bitcoin Core ‘One of the Worst Development Teams’ in Cryptocurrency

Unsurprisingly, Ver also took time in the interview to criticize the approach that Bitcoin developers have taken as they attempt to scale the network to accommodate larger numbers of users and transactions.

“So by those standards, I think they’re probably one of the worlds development teams in the entire crypto coin ecosystem,” he concluded.

This, he concluded,

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Mr. Anonymous puts $1 Million at Stake, betting Bitcoin Price will hit $50,000 in 2018


 

Right now, volatility is bitcoin’s second name. Regarding price swings, no other commodity dead or alive does it better than the world’s number one blockchain-based cryptocurrency. Bitcoin demonstrated how volatile it could be, when it kissed $19,666 earlier in the week, from just trading at less than $1,000 before January 2017.

However, the bitcoin price saw a heartbreaking correction that pulled back to just above the $10,000 price region on December 22. At the time of writing, the cryptocurrency has started showing signs of going back toward the all-time high, with the price near the $15,000 price region.

The $50,000 Bitcoin Bet

While a lot of skeptics are busy predicting the downfall of the king of cryptos, there is one man that has shocked the world by placing a one million dollar wager on the possibility of the bitcoin price hitting $50,000 by the end of December 2018. For even the most die-hard bitcoin enthusiasts, this has to be one of the the craziest plans of the year.

As reported by Fortune, the anonymous person or even people, purchased the options contracts of approximately $1 million, on the LedgerX derivatives exchange.

An insider of the exchange who witnessed the event has said: “the trade wagering on a move to $50,000 was the first of its kind on LedgerX… Just under $1 million was paid for the options in one or more trades that took place during the 24-hour period ending at 4 p.m. Eastern Time on Wednesday, the records show. It is unclear from LedgerX’s data who the buyer or buyers were or whether the purchasing was done in multiple transactions or just one.”

Whoever the investor is may have seen a crystal clear revelation of where the bitcoin price would be by December 2018. At least that’s how appears right now, considering the huge drop in the bitcoin price on December 23. However, if one takes a closer look at the level of popularity the cryptocurrency has gained presently, coupled with the disruptions that bitcoin and have brought to the world of finance, then you will realize that it is entirely possible for bitcoin to hit $50,000 in 2018.

It remains to be seen if the $1 million bitcoin bet will be a winning bet or a loser; come December 2018 BTCManager will be here to tell you the story.

 

 

 

Mr. Anonymous puts $1 Million at Stake, betting Bitcoin Price will hit $50,000 in 2018

 

Coinbase Deems European Market Insufficiently Healthy to Trade Bitcoin Cash


coinbase logo

A lot of people were quite surprised to see Coinbase enable Bitcoin Cash trading a few days ago. Indeed, it was a pretty intriguing decision, although the altcoin has cemented its place in the world of cryptocurrency. Unfortunately, it seems European users will have to wait a while longer before they can buy BCH with their euros. According to Coinbase, that’s because European markets are “not sufficiently healthy.” It’s an interesting decision, to say the least.

No EUR/BCH Market for Coinbase

On one hand, it is good to see Coinbase make this smart decision well ahead of time. After all, it can’t afford to launch illiquid markets, especially not when they only just added another major trading market. Supporting Bitcoin Cash has been a smart decision, to say the least. Plenty of cryptocurrency enthusiasts had assumed this decision would be made at some point, although no one assumed it would happen this year. Then again, a lot of interesting decisions have been made by cryptocurrency exchanges throughout all of 2017.

For Coinbase, the decision to add Bitcoin Cash was not an easy one. Its goal is now to enable fiat currency trading pairs for BCH first and foremost. Before that can happen, the company will need to evaluate whether these markets possess sufficient liquidity. In the US, that was far less of an issue, as traders were more than willing to spend a lot of money on Bitcoin Cash when the new trading pair was added. The same cannot be said for the EUR market, unfortunately, but that isn’t really surprising either.

The Coinbase team has acknowledged the European markets are not sufficiently healthy to enable Bitcoin Cash trading right now. This means it is possible to buy BCH with US dollars, but not with euros at this point in time. It is a bit unclear why the European markets are not sufficiently healthy, even though we all know Europe is a very small player when it comes to cryptocurrency in general. For some reason, neither Bitcoin nor altcoins are very popular in this part of the world right now.

This doesn’t mean Europeans won’t be able to trade Bitcoin Cash against the euro in the future, though, as Coinbase still plans to enable this market as early as January of 2018. No specific date was announced at this time, but we should find out more in the next few weeks. It’s good to see Coinbase remain committed to enabling Bitcoin Cash trading for Europeans in the future. We can only hope this market gets added sooner rather than later.

Furthermore, Coinbase will continue to evaluate other “qualifying countries” in regards to support for Bitcoin Cash. It is obvious that demand for this particular altcoin has never been greater, and people are more than willing to spend fiat currency to obtain BCH. Moreover, Coinbase is still contemplating adding support for other cryptocurrencies as well. There are quite a few coins which could use fiat currency support right now, and which coins will be added to Coinbase remains to be seen.

It is also important to note that Coinbase users may experience some big delays when it comes to sending wire deposits and receiving withdrawals. According to the website, these can take up to five business days, which is not acceptable. At the same time, the massive influx of new users looking to buy and sell cryptocurrencies at this crucial time will impact the platform’s service in one way or another. Centralized exchanges are still problematic in this regard, yet it will be very difficult to bypass issues like these in the future.

The Hard Math Behind Bitcoin’s Global Warming Problem


Let me freak you out for a second. You know what is, right? I mean, no, but quickly, it’s a “cryptocurrency” that’s basically secret computer money. One bitcoin, which doesn’t actually have a real, physical form, is worth at this moment upwards of $16,000. But to get one, you either have to buy them from online exchanges or use specialized computing hardware to “mine” it. That last bit is where the freak-out comes in.

In a report last week, the cryptocurrency website Digiconomics said that worldwide bitcoin mining was using more electricity than Serbia. The country. Writing for Grist, Eric Holthaus calculated that by July 2019, the Bitcoin peer-to-peer network—remember BitTorrent? Like that—would require more electricity than all of the United States. And by November of 2020, it’d use more electricity than the entire world does today.

That’s bad. It means Bitcoin emits the equivalent of 17.7 million tons of carbon dioxide every year, a big middle finger to Earth’s climate and anyone who enjoys things like coastlines, forests, and not dying of mosquito-borne diseases. Refracted through a different metaphor, the Bitcoin P2P network is essentially a distributed superintelligence utterly dedicated to generating bitcoins, so of course it wants to convert all the energy (and therefore matter) in the universe into bitcoin. That is literally its job. And if it has to recruit greedy nerds by paying them phantom value, well, OK. Unleash the hypnocurrency!

The idea of bitcoin still has the whiff of genius—a digital currency as untraceable and trustworthy as cash, unfettered from nationality and physicality, with egalitarianism and access built into its philosophical and technical firmware. But the reality, exposed by bitcoin’s remarkable run-up in value over the last three months, is that the science may not hold together. Which isn’t to say people aren’t trying to fix it.

The thing that makes Bitcoin bitcoiny is the blockchain, the secure ledger of all payments and trades. The point of the p2p bitcoin network is the generation and maintenance of that ledger, and technically anyone can contribute updates—those recordings of transactions are blocks in the chain. But there’s a catch. (This was the bit of genius in bitcoin inventor Satoshi Nakamoto’s pitch, whoever the almost certainly psuedonymous “Satoshi Nakamoto” is or are.) In order to contribute a block, you also have to solve some really hard math, a “hashing algorithm” called SHA-286.

Validate a bunch of transactions and do the math, and the system might choose your block to add to the chain; if it does, you win some bitcoin. That’s called mining, and the idea of imposing a cost to enter—that hashing math—is “proof of work.”

“The nice thing about proof-of-work is that there is no admission step,” says Emin Gün Sirer, co-director of the Initiative for Cryptocurrencies and Smart Contracts at Cornell University. “If you can come in and suddenly start solving these cryptographic puzzles at the heart of it, you can contribute to the upkeep of the ledger.”

You can’t trick your way into solving that math. The SHA-286 algorithm is designed, intentionally, to be so hard that it requires brute-force computing. Try as many computational answers as you can, as fast as you can. Which means you have to keep your computer turned on all the time, running the fan to cool off your hot, overclocked processor. “The energy consumption is a security feature. It’s a good thing,” Sirer says. “To take over the system, you’d have to spend at least as much as what the system is spending now. You have to own 51 percent of all the hashing power.”

This is a feature, not a bug (is what a distributed superintelligence would say). “If you described the model and said, ‘not only is nobody in charge but nodes can join or leave the network at any time, yet everyone establishes a consensus view on the blockchain,’ it wasn’t something computer scientists thought was possible,” says Joseph Bonneau, a computer scientist at NYU. “The fact bitcoin was able to do this at all was a big surprise and innovation. The cost is that it uses proof-of-work, and the point of that is to make the blockchain expensive to add to.”

So that’s where the egalitarian thing breaks down. In the beginning, cryptocurrency enthusiasts could run mining software on their home computers. That evolved. First people realized that graphics processing units were better at those hash computations than plain old CPUs. They used more power and required more elaborate cooling, but still. And then people started customizing Field Programmable Gate Array chips, bought off the shelf and then customized for mining. These days, the preferred hardware is Application-Specific Integrated Circuits, made to order in Bitcoin-specific configurations and installed in specialized datacenters.

Not only does that centralize Bitcoin mining, but it also screws up energy usage. The most advanced bitcoin miners now expend 0.3 watts per billion hash calculations, or “gigahashes.” Flip that math around and you get 300 Gh per second per kilowatt. So the sketch is basically 13,600 petahashes per second with 234 kWh consumed by every transaction, giving you 32.71 terawatt-hours consumed by the bitcoin network—or 0.15 percent of the total world consumption of electricity.

More efficient hardware won’t sove that problem. Between 2014 and 2017 the hash rate went from 300,000 to 2 million per second, and hardware efficiency went from 2,000 megahashes per joule to 10,000 MH/J, says David Malone, a computer scientist at Maynooth University. So it roughly cancelled out. In 2017 the hash rate went to nearly 12 million, Malone says, “but the hardware hasn’t improved much.”

So power consumption went up, and bitcoin miners are now building ASIC clouds in places where electricity is cheap, like Iceland (where thermal energy is plentiful) or China (where electricity is underwritten by the government and bitcoin is a good way to speculate without regulation). Because that’s where they can bring more servers on line to mine more Bitcoin.

“Now, let’s be fair to bitcoin, without minimizing the problem,” Sirer says. “The energy costs of using any other mechanism for keeping track of assets, for reconciling them, for ensuring that books are well-ordered, or the energy costs of running a cash-based economy, printing money, handling cash, pulling banknotes out of circulation and printing new ones—they were about comparable when I looked at this a year ago.” So mmmmmaybe. Digiconomy estimates that the entire Visa credit network uses about a three-thousandth the total energy of Bitcoin. That doesn’t take into account the electricity used by Visa offices, but on the other hand unlike Bitcoin you can actually buy things with Visa. Oh, and Google—all of Google, the whole Google—used only 5.7 TWh in 2015 and went completely renewable in 2017.

Miners took advantage of faster, more efficient hardware not to use less electricity but to do more mining. That’s how people always deploy more energy-efficient technologies. It happened with steam. It happened with oil. It’s happening with LED lights—they’re more energy efficient, but their introduction hasn’t reduced overall power used for lighting. People have just installed more, brighter lights. “The greater the value of a bitcoin, the more electricity people will be willing to spend to compete for it,” says Michael Taylor, a computer scientist at the University of Washington. “Increasing the energy efficiency of bitcoin SHA-256 mining hardware helps only sublinearly, as improving energy efficiency simply means people can deploy more miners at the same operating cost.”

Proof of work is a problem. So maybe you could get rid of it. Cryptocurrency researchers are thinking about other approaches. One, Resource Efficient Mining, lowers the workload but uses trusted hardware to do it. Another, proof-of-stake, trades computational work for prior value. “You just kind of let people create blocks in proportion to the currency they hold, so the big currency holders make most of the blocks,” says Bonneau. In other words, instead of making mining computationally expensive, you just make it expensive. “It would possibly drive the power consumption down to almost zero, but we haven’t really—” he pauses here “—there’s a couple of research teams working on this,” Bonneau finishes.

Does a bitcoin aristocracy sound good, though? “It’s not clear that it’s worse than giving the ability to create a block to whoever is willing to burn the most electricity,” Bonneau says, “which is just operators in the Chinese desert getting subsidized power, or wherever else in the world.”

All right, then, let’s take a different tack. Right now, the hash algorithm is useless work, intentionally. It’s burned. How about making it do something useful? It’s a p2p network doing collaborative computation. What about making it find signals from aliens, or figure out how to make proteins useful to medical science, or solve real-world crypto problems and prime factorization? And but no. “I’ll tell you why that didn’t happen, and it’s perverse,” Sirer says. “Had bitcoin been mined by doing something useful, then there would be a correspondence between useful work and the number of bitcoins you get…That creates a mental anchor point in people’s mind for how much a bitcoin should cost.”

See, right now, the cost of a bitcoin floats arbitrarily. It’s socially determined. Right, because you wouldn’t want an international currency to have a logical exchange rate, becauhheyyy waitaminute. Money is supposed to have exchange rates with other money! That’s one of the things that makes it money. And the computational work of transnational p2p network shouldn’t just be bullshit, right? “I initially thought, it still should have been more useful, but there you are,” Sirer says. “Why couple your fate to something like protein folding? What happens when protein folding becomes easy to do by other means? You end up intertwining the fate of your brand-new system with other technologies.”

You can’t get rid of proof-of-work. You can’t make the work useful. (Or if you did either of those things, you might have some other cryptocurrency, but you wouldn’t have bitcoin.) Making the hardware more efficient doesn’t help. But come on. Let’s not say Bitcan’t. Let’s say Bit can.

If the goal is to reduce the energy load, what about doing something more interesting with the hardware? “A good short-term solution would be to recover the waste heat for heating,” Taylor says. He points, for example, to Stockholm’s effort to heat homes with exhaust from datacenters. To the extent that a city was going to burn fossil fuels to heat homes, this is an environmentally friendly solution that gets more value.”

True, but it also has the something-for-nothing vibe that makes physicists nuts. It also requires building a whole new infrastructure around ASIC clouds, even though everyone knows that mining hardware improves and changes. The fact is, the cheapest, highest-density energy comes from climate-change-causing fossil fuels, and the Bitcoin mining system incentivizes the cheapest energy. I like, a little bit, the idea of sticking a thermoelectric couple onto the outside of a bitcoin mining system and turning the heat directly into electricity, like a Biolite stove, but still—thermodynamics says you only get what you pay for.

If mathematics and physics won’t help, maybe economics will. Bitcoin miners run hardware for only as long as the rewards—bitcoins mined—can pay for the electricity. If the value of the bitcoins goes down or the price of the electricity goes up, off go the servers. The hash problems get exponentially harder, and every four years the size of the reward cuts in half. It’s 12.5 bitcoins per block right now, but “the next drop is in June 2020,” Taylor says. “As the price of bitcoin stabilizes, then the net worldwide energy because of the block reward will start to decrease rather than increase.”

The declining rewards put a cap on the total number of Bitcoins that can ever be in the world. It’s 21 million, and the current trendline leads to them being all mined out around 2032. Once that happens, transaction fees will be the only reward built into the system. Some other cryptocurrencies, maybe more energy-efficient ones, will start looking more competitive. Right now, bitcoin looks increasingly like a tool for speculation rather than a viable, mainstream currency. And one scientific law that math, physics, and economics all share is this: Bubbles pop.

Disney-Fox Deal: 10 Biggest Questions – Variety


Disney and Fox are racing towards the finish line.

The two media companies are expected to announce a $60 billion-plus pact this week that will see Disney snap up much of Fox’s television and film holdings. If completed, the deal will dramatically reshape the entertainment landscape, bringing together for the first time two of Hollywood’s “Big Six” studios under common ownership, all to give Disney the bigger arsenal of programming it needs to do battle with Netflix and other new entrants in the content business.

Details of the plan and deal points are being closely guarded. There are also many uncertainties about who will run the combined companies, how the government will react to the prospect of consolidation among Hollywood studios, and what it all means for the creative community. Here’s a look at key questions that need to be addressed.

1) Will the Murdochs be involved in Disney?

Yes, they’ll have their own company to run, but will Rupert, Lachlan, and James be satisfied overseeing Fox News, the Fox broadcast network, and Fox Sports in such a pared-down form? They’ll also, as part of the deal, receive a small stake in Disney. But could they somehow leverage the merger into a seat at the table for father or sons? Disney chief Bob Iger is expected to extend his contract as CEO beyond its current mid-2019 expiration point to preside over the integration of the Fox assets. But he’ll eventually need to find a successor. As the Disney board has had no traction with internal candidates, they might be inclined to look at Fox’s formidable team. James Murdoch’s name has been mentioned as making the transition to Disney, spurring succession talk, but sources on both sides of the talks caution that there is no such stipulation in the deal.

2) Will Fox continue to make movies?

On Monday, Fox grabbed a leading 27 Golden Globe nominations, double the number racked up by any other major media company, for fielding the likes of “The Shape of Water,” “Three Billboards Outside of Ebbing, Missouri,” and “The Post.” These are gutsy, auteur-driven movies that are geared at adults. They’re also exactly the kind of movies that Disney no longer makes. The studio instead focuses on animated fantasies, Star Wars sequels, and Avengers spin-offs; big-budget offerings that appeal to all ages. Moreover, Disney got out of the indie movie game when it sold Miramax in 2010. Does it have any interest in Fox’s art house label Searchlight?

With Disney looking to launch a streaming service, there’s an argument to be made that it needs as much content as possible to attract customers. If Disney wants to create a Netflix killer, that won’t just require having access to Captain America and Luke Skywalker. It may mean offering up a few R-rated movies. Fox knows how to do that.

3) Will the Justice Department OK the deal?

Rupert Murdoch has friends in high places (namely a certain Oval Office occupant), but it’s tough out there for media mergers. Just ask the folks at AT&T and Time Warner. That pact is currently being held up by the Justice Department over anti-trust concerns. That deal is a vertical one, meaning that the two companies operate at different stages of a product’s supply chain and have very few overlapping operations. The Disney and Fox deal is a horizontal merger, in other words that they are in the same business. Historically, horizontal mergers have faced more hurdles in getting government approval because they have a greater chance of creating monopolies. It remains to be seen how this corporate marriage will be greeted in Washington and if Disney and Fox will have to jettison any television or film holdings in order to appease the government.

4) Will Iger stay longer?

Iger’s tenure at Disney has been a dramatic one. He’s shown a willingness to make bold bets, snapping up Pixar, Marvel, LucasFilm, and, now, Fox. Managing all these fiefdoms takes talent. Iger is currently slated to step down in 2019 when his contract expires. But there’s no successor in place, and the pressure will be on him to sign up for another tour of duty. That may mean putting his (not so secret) presidential ambitions on the back burner.

5) Will the X-Men team With the Avengers?

Fanboys and fangirls don’t seem to care about monopolistic niceties or the end of the era for the Murdoch gang. They’re more interested in seeing Wolverine hanging out at Avengers HQ. Those dreams could soon come true. After all, the Fox purchase does give Disney, and in particular Marvel, its comic book division, rights to several superheroes that it had licensed to Fox. Not only does the company now have the ability to make X-Men movies, but it can also reboot the Fantastic Four. There’s a whole new world of mutants and costumed heroes just waiting to join the MCU. That leaves only Sony’s Spider-Man films existing outside of Disney and Marvel’s direct control.

6) What does this mean for Netflix?

Buckle up. Netflix has fashioned itself into the de facto subscription streaming service, luring tens of millions of customers to its platform. But Disney wants in on the business. The company has already announced plans to build a standalone streaming service by 2019, and with the Fox deal, it will not only be able to offer films and shows from Pixar, Marvel, and LucasFilm. It can add programming from the likes of FX and National Geographic, along with movies such as “Alien” and “Avatar” from the Fox studio catalogue. Plus, by purchasing Fox’s assets, Disney will have majority control of Hulu, giving them even more access to those digital dollars.

7) What happens to the Fox lot?

Fox’s Century City sound stages are the stuff of Hollywood history. Will Disney get the 50-plus acres of production and post-production facilities that sit on incredibly valuable Westside real estate? It may not want them. Given that the company already has its own substantial studio lot in Burbank, does it want to maintain offices on both sides of the 134 freeway?

8) What becomes of the Fox Broadcast network?

The upstart network that broke up the hegemony of the Big Three networks in the late 1980s may be in for a dramatic makeover. The word is the Murdochs intend to refocus Fox Broadcasting around news and sports. Fox has been struggling to gain traction with scripted programming in recent years. With the network’s sibling studio on its way to Disney, it’s hard to see how Fox can invest big bucks on high-end dramas and comedies. It would be just like the Murdochs to zig while the rest of the industry is zagging in the Peak TV era.

9) How will producers and creative talent under contract at Fox react to the Disney takeover?

Ryan Murphy could soon be working for Disney. Fox’s TV and film divisions have a long list of production pacts with top filmmakers, writers, producers, and directors. Disney has a approach to content, which may not be a fit for everyone. In the short-term, however, 20th Century Fox and its units will operate autonomously, at least until the deal is completed.

10) How much synergy savings will Disney promise Wall Street?

 Analysts have zeroed in on about $2.5 billion in potential streamlining and elimination of redundancies within a few years after the deal is completed. That sounds like a big human toll, but for an operation the size of Disney, particularly after it has swallowed up the Fox assets, there may be less painful ways to squeeze out economies of scale.