Cryptocurrency & Blockchain News and Discussions

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erowind
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Bored Ape Yacht Club, the second largest NFT collection by total volume^1 is a nazi dogwhistle.

1, Important because liquidity is razor thin in the NFT market meaning market capitalization is an inaccurate metric for determining value.
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Re: Cryptocurrency & Blockchain News and Discussions

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caltrek
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Democratic Lawmakers Ask Federal Agencies to Crack Down on Crypto Mining
by Justine Calma
July 16, 2022

Introduction:
(The Verge) On Friday, Elizabeth Warren and other Democratic members of Congress sent a letter to two federal regulators, urging them to take action on the explosion of Bitcoin mining in the US.

Sent to the heads of the Environmental Protection Agency and Department of Energy, the letter was spurred by preliminary investigation from lawmakers, which found that just a handful of cryptominers use an enormous amount of energy. In response, the lawmakers ask the agencies to require that crypto-mining companies share data on their energy use and emissions.

Seven of the biggest crypto-mining companies in the US have the collective capacity to use over 1 gigawatt of electricity, according to the letter. That’s the equivalent of two standard coal plants or, as the letter puts it, almost enough to power all the residences in Houston. That’s just the tip of the iceberg, since there are no federal measures in place to capture a complete picture of the environmental impact of the recent boom in US crypto-mining.

THAT’S JUST THE TIP OF THE ICEBERG

Crypto-mining has exploded in the US over the past year, driven in part by China’s 2021 crackdown on the practice in. The US is the biggest hub globally for mining Bitcoin, typically running data centers around-the-clock to mine the currency. These data centers are filled with specialized hardware racing to solve complex equations in order to verify transactions, earning Bitcoin in return. All that computing power gobbles up vast amounts of electricity — and produces pollution as a result.

Moving from China to the US has likely made the Bitcoin network even dirtier, with abundant hydropower in China replaced by coal and gas-derived electricity from the US grid.
https://www.theverge.com/2022/7/16/2322 ... department
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caltrek
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World's Second-Biggest Cryptocurrency to Make Radical Technological Shift
by John Quiggin

Introduction:
(The Conversation) Amid the continuous noise about cryptocurrencies, it's often hard to pick out what really matters. However this month, if all goes to plan, the energy-hungry digital sector will undergo its biggest shake-up in years.

Ethereum, the world's second-largest cryptocurrency, is tomorrow expected to start a technology changeover which, once complete, should cause its carbon emissions to plummet by 99 percent.
Further extract:
What the switch is about
Ethereum's project involves ditching the 'proof of work' model for a new one called 'proof of stake'.

Under this model, crypto transactions are validated by users, who stake substantial quantities of blockchain tokens (in this case, Ethereum coins) as collateral. If the users act dishonestly, they lose their stake.

Importantly, it will mean the vast network of supercomputers currently used to check transactions will no longer be required, because users themselves are doing the checking – a relatively easy task. Doing away with the computer 'miners' will lead to an estimated 99 percent drop in Ethereum's electricity use.
Read more here: https://theconversation.com/the-most-i ... et-189630
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Update on the ethereum upgrade Caltrek posted about above. It's happening in a few hours, there's a livestream put on by the Ethereum Foundation here starting around midnight EST if anyone is interested.



Bitcoin should really follow through in ethereums footsteps on this. If both blockchains switched to proof-of-stake it would effectively eliminate cryptocurrencies environmental impact and set an informal standard for all other cryptocurrencies to follow. In lieu of that I'd argue that proof-of-work crypto mining should banned or extremely regulated. If not entirely banned maybe only allowed in private homes not industrial scaled mining farms. And even in private homes there should be an energy limit on how much a person is allowed to use on crypto mining. Something comparable to other appliances, a 5-10kw maybe.
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The Ethereum Merge Is Complete. Here’s What Investors Should Know About It
by Megan DeMatteo
September 15, 2022

Introduction:
(Net Advisor) Ethereum, the most popular altcoin and second-largest cryptocurrency by volume, completed its long-awaited merge Thursday.

After years of being the number-one smart contract blockchain, the network upgrade will transition ethereum to a less energy-intensive technology. You may have previously heard of the planned updates as Ethereum 2.0 or Eth2, but the Ethereum foundation has called it the “Ethereum Merge” for months.

Industry experts have been closely watching every step leading up to the update, predicting it could significantly alter the second-largest cryptocurrency’s value. Ethereum’s price dropped below $1,500 Thursday morning in the hours following the completion of the merge. Along with the merge this week, next week’s Federal Reserve meeting could bring new volatility to ethereum’s price, with another federal interest rate hike expected.
How Will the Ethereum Merge Influence Your Crypto Investments?

Some experts say the update could spur growth for Ethereum after new blockchain projects ate into its market share over the past six months.

“I do believe that we will see a positive reaction in the markets post-merge,” said the YouTuber and crypto educator Hashoshi in an episode of his podcast “Crypto Over Coffee” earlier this year.
Read more here: https://time.com/nextadvisor/investing ... uld-know/
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Warren Says Crypto Empire's Collapse Must Be 'Wake Up Call' for Regulators
by Kenny Stancil
November 11, 2022

Introduction:
(Common Dreams) Soon after the troubled cryptocurrency exchange platform FTX filed for bankruptcy protection on Friday, Sen. Elizabeth Warren implored her fellow members of Congress as well as federal regulators to crack down on the digital asset industry that has cost customers billions of dollars while wrecking the planet.

"The implosion of FTX must be a wake up call for Congress and financial regulators to hold this industry and its executives accountable," Warren (D-Mass.) tweeted. "Too much of the crypto industry is smoke and mirrors. It's time for stronger rules and stronger enforcement to protect ordinary people."

Erstwhile FTX chief executive Sam Bankman-Fried, a 30-year-old multi-billionaire, resigned from his position but is expected to remain at the company during a transitional period of unspecified length.

As The Wall Street Journal reported: "FTX is the latest in a string of crypto companies seeking bankruptcy protection this year. Months ago, Mr. Bankman-Fried served as a lender of last resort to his industry, following the failure of other crypto companies. Its fortunes reversed in the past 10 days, after a CoinDesk report showed the depth of the relationship between FTX and Alameda, triggering a loss of faith in the platform by amateur and professional investors."

According to the newspaper, which in another article cited unnamed sources familiar with the matter: "FTX extended loans to Alameda using money that customers had deposited on the exchange for trading purposes, a decision that Mr. Bankman-Fried described as a poor judgment call... All in all, FTX had $16 billion in customer assets, the people said, so FTX lent more than half of its customer funds to its sister company Alameda."
Read more here: https://www.commondreams.org/news/2022 ... egulators

caltrek comment: I can't help but notice the irony of problems in the cryptocurrency industry coinciding with problems in Twitter. At the most general level, there seem to be some things in common. New technologies employed in novel ways that look good on paper, but somehow run into major problems in their implementation.

Twitter and cryptocurrencies are both things that I don't have as good an understanding of as I would like. It is difficult, at least for the moment, to descend from the 30,000 foot in altitude perspective and get down into the weeds.

Any thoughts?
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Dramatic Collapse of the Cryptocurrency Exchange FTX Contains Lessons for Investors but Won’t Affect Most People
by D. Brian Blank and Brandy Hadley
November 17, 2022

Introduction:
(The Conversation) In the fast-paced world of cryptocurrency, vast sums of money can be made or lost in the blink of an eye. In early November 2022, the second-largest cryptocurrency exchange, FTX, was valued at more than US$30 billion. By Nov. 14, FTX was in bankruptcy proceedings along with more than 100 companies connected to it. D. Brian Blank and Brandy Hadley are professors who study finance, investing and fintech. They explain how and why this incredible collapse happened, what effect it might have on the traditional financial sector and whether you need to care if you don’t own any cryptocurrency.

1. What happened?

In 2019, Sam Bankman-Fried founded FTX, a company that ran one of the largest cryptocurrency exchanges.

FTX is where many crypto investors trade and hold their cryptocurrency, similar to the New York Stock Exchange for stocks. Bankman-Fried is also the founder of Alameda Research, a hedge fund that trades and invests in cryptocurrencies and crypto companies.
Within the traditional financial sector, these two companies would be separate firms entirely or at least have divisions and firewalls in place between them. But in early November 2022, news outlets reported that a significant proportion of Alameda’s assets were a type of cryptocurrency released by FTX itself.

A few days later, news broke that FTX had allegedly been loaning customer assets to Alameda for risky trades without the consent of the customers and also issuing its own FTX cryptocurrency for Alameda to use as collateral. As a result, criminal and regulatory investigators began scrutinizing FTX for potentially violating securities law.
Read more here: https://theconversation.com/dramatic-c ... le-194692
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Re: Cryptocurrency & Blockchain News and Discussions

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caltrek wrote: Sat Nov 12, 2022 3:08 pm Any thoughts?
I want to provide some perspective on this as someone in the industry who keeps up with it all, though I don't post about it here much anymore.

FTX itself was a centralized custodial exchange, it's complete failure doesn't have any bearing on the technology itself or how various blockchain protocols do or do not work. Ethereum itself, and it's established protocols are still working and didn't have even a hiccup during this entire event. Makerdao is still providing decentralized loans and minting 1 to 1 backed US dollar denominated stablecoins. Uniswap is now the 2nd largest cryptocurrency exchange globally by volume and is completely decentralized, open source, and hardcoded to prevent glaring flaws like fractional reserve banking. The largest cryptocurrency exchange, Binance is a centralized exchange run out of the Cayman Islands with little oversight, this is a major problem.

https://decrypt.co/114665/uniswap-overt ... reum-today

So now we get into the detail and what regulation has to address in order to prevent this from happening again. Centralized financial cryptocurrency companies require the same level of rigorous regulation that traditional financial companies and banks do. FTX was running a fractional reserve and mixing its customer reserves with a hedge fund. This is completely illegal, a complete conflict of interests, and has been outlawed in traditional finance since the the Great Depression. In fact, current regulation that already exists makes it illegal for cryptocurrency exchanges too within the United States, though this clearly isn't enough. So what happened? Why was FTX not brought under scrutiny by the American government whereas a relatively innocuous and honestly harmless (by capitalist standards) cryptocurrency company like Library has been in a legal battle with the SEC for some time now?

(Library, or LBRY is a decentralized youtube competitor.)

https://www.reuters.com/legal/transacti ... 022-11-07/

https://lbry.com/

The answer like most things in this country is blatant corruption. The CEO of FTX Sam Bankman-Fried and his top Deputy Ryan Salame donated over 63 million dollars to America politicians with Fried's "donations" totaling ~40 million dollars and mostly focused on democratic politicians. Salame's "donations" totaled ~23 million dollars and focused mostly on republican politicians. Like with everything else in this country that goes wrong I repeatedly will point out that America is not even remotely a democratic country, this is legal corruption, and even if this particular case is found illegal, 99% of cases won't be. Elections are a complete fiction until money is removed from politics. Whatever was left of the United States as a country died the moment citizens united determined that political bribes were protected "free speech." No citizen should simply be able to buy laws, legislation, favor, or elections.

Moreover, I highly doubt that any of these politicians will face justice of any kind. The bribes in question are so widespread that they span a significant portion of both major political parties in the United States. Fried was the 2nd largest "donor" to the democratic party, not 2nd largest within the cryptocurrency industry, the 2nd largest within any industry.

https://fortune.com/crypto/2022/11/21/c ... donations/

https://fortune.com/2022/11/10/sam-bank ... est-donor/

And now we get to the "progressive" lying corporate lapdog that is Elizabeth Warren. As if her past acceptance of millions of dollars in bribery doesn't disqualify her completely from commenting on the regulation of the cryptocurrency industry, ( https://www.opensecrets.org/2020-presid ... =N00033492 ) Warren herself has indirect yet intimate ties to Fried!

Here you can find Warren thanking Joe Bankman, Sam Bankman Fried's father for his help in drafting an IRS reform bill.
The legislation has been endorsed by dozens of law professors and economists including… Joe Bankman of Stanford University.
https://www.warren.senate.gov/oversight ... tax-filing

At no point in any of Warren's ramblings on regulation of the cryptocurrency industry does she make mention of Fried's donations or the donations of FTX executives to the democratic party. This is a clear conflict of interests alongside her association with Joe Bankman.

So what's the conclusion? That centralized cryptocurrency exchanges and financial services need to be highly regulated like any financial service. That lawmakers in washington don't understand the industry at all and will likely make sensationalist arguments and legislation that is more likely to harm the industry and risk targeting functioning decentralized protocols that have nothing to do with the collapse, which, will only force Americans overseas where they are even more likely to be harmed. Moreover, the reason they don't understand the industry is because instead of spending time researching it and governing properly they would rather take bribes from complete frauds and look the other way while attacking "harmless" crypto corporations that don't carry any financial risks in the same way that an exchange, hedge fund, or financial service does.

This whole ramble for me is in context of thinking capitalism at large is a failure, as you all know about me. But even with that in context it's still very frustrating to see corrupt politicians running damage control and targeting the wrong things. Library (LBRY) is a problem to for a leftist like myself, but not for the reasons the SEC is purporting, it's no more harmful than any other capitalist business. Whereas something like FTX is Lehman Brothers levels of fraud and danger and it's a complete joke that regulators and politicians were literally working with FTX directly while the corporation stole billions of dollars from everyone they did business with. In any functioning democracy this would just be another reason along with the thousands of others to completely gut every politician involved with either major party and ban both parties from the political system entirely, among other direly needed radical reconstructions of a better political system.
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FTX Customers Sue Bankrupt Crypto Company, Allege Racketeering
by Natalie Hanson
November 23, 2022

Introduction:
SAN FRANCISCO (Courthouse News) — A new federal lawsuit alleges that one of the world’s largest cryptocurrency exchanges, now going bankrupt, misappropriated millions of customers' funds and committed "one of the great frauds in history."

In a 45-page complaint filed Wednesday, depositor Stephen Pierce accuses FTX CEO Sam Bankman-Fried — who announced Friday he is resigning and filing for bankruptcy after failing to raise cash to solve liquidity issues — of violating the Racketeering Influenced and Corrupt Organizations Act (RICO).
The RICO action says Bankman-Fried’s cryptocurrency empire has collapsed, “and it has become clear that Bankman-Fried and his lieutenants misappropriated billions of dollars of their customers’ assets.” Pierce plans to form a class action of other depositors to sue the company for damages.

After the company's sudden collapse over just a few days, the money in customers’ accounts is now frozen. The CEO and his paid celebrity endorsers were handed two other lawsuits Tuesday in the Southern District of Florida, accusing FTX of devising a fraudulent scheme to "take advantage of unsophisticated investors from across the country," causing $11 billion in damages and committing securities fraud, conspiracy and unfair business practices.
Read more here: https://www.courthousenews.com/ftx-cus ... eteering/
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