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Virtual currencies, Blockchain bitcoin
mullokintyre
post Posted: Jun 12 2021, 10:28 AM
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Us senator Elizabeth Warren, failed Presidential candidate, is one of those infuriating politicians for whom about 50% of her utterings, you shakes your head in wonder about the stupidity of the thing.
But for the other 50%, you say in varying degrees, I can't argue with that.
Her most recent railings against Bitcoin is a case of the latter.
From Wall Street on Parade
QUOTE
Cryptocurrencies have turned out to be a fourth-rate alternative to real currency. First, cryptocurrencies are a lousy way to buy and sell things. Unlike the dollar, their value fluctuates wildly depending on the whims of speculative day traders. You know, in just the last two months, the value of Dogecoin increased by more than ten-fold and then declined by nearly 60 percent. Now that may work for speculators and fly-by-night investors, but not for regular people who are looking for a stable source of value to get paid in and to use for day-to-day spending.

Second, crypto is a lousy investment. Unlike, say, the stock market, the crypto world currently has no consumer protection none. As a result, honest investors and people trying to put aside some savings are at the mercy of fraudsters. Pump and dump schemes are outlawed in the case of ordinary stock, but they have become routine in crypto trading. One study found that the level of price manipulation in cryptocurrency is and I quote unprecedented in modern markets.

And third, crypto has become a haven for illegal activity. Online theft, drug trafficking, ransom attacks, and other illegal activity have all been made easier with crypto. Experts estimate that last year more than $412 million was paid to criminals in ransom through cryptocurrencies. And unlike other payment systems that make it tougher to move money illegally, a key feature of crypto is its secrecy. So just in the past few weeks, cryptocurrencies made it possible for hackers to collect a ransom to release the Colonial pipeline hack and to free JBS, the worlds largest meat producer, from paralyzing cyberattacks. And every hack that is successfully paid off with a cryptocurrency becomes an advertisement for more hackers to try more cyberattacks.

Finally, there are the environmental costs of crypto. Many cryptocurrencies are created through proof-of-work mining. It involves using computers to solve useless mathematical puzzles in exchange for newly minted cryptocurrency tokens. Such mining has devastating consequences for the climate. Some crypto mining is set up near coal plants, spewing out filth in return for a chance to harvest a few crypto coins. Total energy consumption is staggering, driving up demand for energy. If, for example, Bitcoin just one of the cryptocurrencies were a country, it would already be the 33rd largest energy user in the world using more energy yearly than all of the Netherlands.

And all those promised benefits the currency that would be available at no cost to millions of unbanked families and that would provide a haven from the tricks and traps of big banks well, those benefits havent materialized.


The arguments could apply to almost all the digital currencies that exist that use mining and proof of mathematical concepts as validation.
However, there are others that do not require mining that also exist, and thus less likely to be blamed for the useless consumption of vast amounts of power.

As an aside, I was reading about the differences between mined versus non mined digital currencies (see Motley fool ), and read the following
QUOTE
Mining bitcoin requires specialized ASIC (application-specific integrated circuit) chips and massive servers, which can rack up expensive electrical bills. This means electricity costs come into play, which is a big reason China, a relatively low-cost country for electricity costs on a kilowatt-per-hour basis, is home to four out of five of the world's largest bitcoin mining farms.

I am not a big fan of the motley fool( just ask EB), so I often look for a secondary validation.
According to coinbase, the above statement may not be correct. It has a list of the 5 largest miners, and only one is in China ( see Coinbase
So much to learn about digital currencies, mining, distributed ledgers etc, and so little time.
Mick



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mullokintyre
post Posted: May 25 2021, 11:55 PM
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There seems to be a few ducks lining up hat may put the brakes on various forms of cryptocurrency, some political, some financial, some moral.
But now a new problem has emerged distributed ledger type currencies.
Google has announce plans for a commercial Quantum computer by 2029.
So, what would that do for crypto currencies among other things?
From Mishtalk

QUOTE
Let's explore quantum computing, problems it might solve, and what it will do to current security protocols and blockchain.What is a Quantum Computer?

The New Scientist answers the question What is a Quantum Computer?

Classical computers, which include smartphones and laptops, encode information in binary “bits” that can either be 0s or 1s. In a quantum computer, the basic unit of memory is a quantum bit or qubit.

For instance, eight bits is enough for a classical computer to represent any number between 0 and 255. But eight qubits is enough for a quantum computer to represent every number between 0 and 255 at the same time. A few hundred entangled qubits would be enough to represent more numbers than there are atoms in the universe.

In situations where there are a large number of possible combinations, quantum computers can consider them simultaneously. Examples include trying to find the prime factors of a very large number or the best route between two places.
Since Google announced that it achieved quantum supremacy there has been an increasing number of articles on the web predicting the demise of currently used cryptography in general, and Bitcoin in particular. The goal of this article is to present a balanced view regarding the risks that quantum computers pose to Bitcoin.

All known (classical) algorithms to derive the private key from the public key require an astronomical amount of time to perform such a computation and are therefore not practical. However, in 1994, the mathematician Peter Shor published a quantum algorithm that can break the security assumption of the most common algorithms of asymmetric cryptography. This means that anyone with a sufficiently large quantum computer could use this algorithm to derive a private key from its corresponding public key, and thus, falsify any digital signature.

The prerequisite of being “quantum safe” is that the public key associated with this address is not public. But as we explained above, the moment you want to transfer coins from such a “safe” address, you also reveal the public key, making the address vulnerable. From that moment until your transaction is “mined”, an attacker who possesses a quantum computer gets a window of opportunity to steal your coins.

In such an attack, the adversary will first derive your private key from the public key and then initiate a competing transaction to their own address. They will try to get priority over the original transaction by offering a higher mining fee.

In the Bitcoin blockchain it currently takes about 10 minutes for transactions to be mined (unless the network is congested which has happened frequently in the past). As long as it takes a quantum computer longer to derive the private key of a specific public key then the network should be safe against a quantum attack. Current scientific estimations predict that a quantum computer will take about 8 hours to break an RSA key, and some specific calculations predict that a Bitcoin signature could be hacked within 30 minutes.

There's much more to the article including some advice for Bitcoin holders about public keys that needs to be addressed now.

But if quantum computers ever become fast enough, the security of the entire blockchain will melt down.

Deloitte notes the only solution is ‘post-quantum cryptography’ to build robust and future-proof blockchain applications.

That caution applies not only to Bitcoin but to any existing application that uses public-private keys.

How Does This Work?

Post Quantum Cryptography

Wikipedia has an excellent discussion of Post-quantum cryptography

One of the simple proposed solutions is to double the key size but there are practical considerations.

A practical consideration on a choice among post-quantum cryptographic algorithms is the effort required to send public keys over the internet.

The Open Quantum Safe project was started in late 2016 and has the goal of developing and prototyping quantum-resistant cryptography. It aims to integrate current post-quantum schemes in one library.

The Open Quantum Safe project currently supports 6 algorithms.

Beyond that, Forward Secrecy allows the use of one-time keys, generated at random.

Forward secrecy protects data on the transport layer of a network that uses common SSL/TLS protocols, including OpenSSL, when its long-term secret keys are compromised, as with the Heartbleed security bug. If forward secrecy is used, encrypted communications and sessions recorded in the past cannot be retrieved and decrypted should long-term secret keys or passwords be compromised in the future, even if the adversary actively interfered, for example via a man-in-the-middle attack.

The value of forward secrecy is that it protects past communication. This reduces the motivation for attackers to compromise keys. For instance, if an attacker learns a long-term key, but the compromise is detected and the long-term key is revoked and updated, relatively little information is leaked in a forward secure system.

Things may not be quite as simple as simply saying double the key size.


So, did you get all that??
Mick



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nipper
post Posted: May 21 2021, 07:52 AM
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Federal Reserve will issue report on US digital currency

Federal Reserve chairman Jerome Powell said the central bank will launch a centrepiece research paper this [Northern Hemisphere] summer on digital currency and seek public input, as he and his colleagues weigh how to proceed in this area.
"We are committed at the Federal Reserve to hearing a wide range of voices on this important issue before making any decision on whether and how to move forward with a US CBDC," he said in a statement on Thursday (Friday AEST), referring to central bank digital currencies.

The announcement, during a week of intense volatility in cryptocurrencies, marks a shift in momentum on the CBDC topic at the Fed, which until now has mostly been a technological research project at its regional branch in Boston.

Bloomberg

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Bitcoin on bitstamp.net +4.2% to $US$40,219.20
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endorsement or kiss of death?




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
mullokintyre
post Posted: Apr 6 2021, 02:13 PM
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So it appears official now. China has announced that it will create a digital currency,.
From

Wsj

A thousand years ago, when money meant coins, China invented paper currency. Now the Chinese government is minting cash digitally, in a re-imagination of money that could shake a pillar of American power.
It rmight seem money is already virtual, as credit cards and payment apps such as Apple Pay in the US and WeChat in China eliminate the need for bills or coins. But those are just ways to move money electronically. China is turning legal tender itself into computer code.
Cryptocurrencies such as bitcoin have foreshadowed a potential digital future for money, though they exist outside the traditional global financial system and aren’t legal tender like cash issued by governments.
China’s version of a digital currency is controlled by its central bank, which will issue the new electronic money. It is expected to give China’s government vast new tools to monitor both its economy and its people. By design, the digital yuan will negate one of bitcoin’s major draws: anonymity for the user.
China has indicated the digital yuan will circulate alongside bills and coins for some time. Bankers and other analysts say Beijing aims to digitise all of its money eventually. Beijing hasn’t addressed that.

I am away with all the other grey nomads, been off the grid for days at a time, so have not taken much notice of markets. Can’t say I have missed it.
Happy to spend this years earnings.
Mick



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MaxwelSmart
post Posted: Mar 31 2021, 04:33 PM
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In Reply To: Pendragon's post @ Feb 11 2021, 04:28 PM

eToro. Zero transaction fees.


Said 'Thanks' for this post: Pendragon  
 
mullokintyre
post Posted: Mar 7 2021, 09:28 PM
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Following on from my last post about possible regulatory interference in bitcoin,

from Bloombergs
QUOTE
The Biden administration will soon have to settle a Bitcoin fight it didn’t even start, and its decision could have far-reaching implications for the virtual currency industry.

The battle concerns last-minute rules proposed by the outgoing Trump administration that would create new requirements for financial services firms to record the identities of cryptocurrency holders. The measures are meant to smother attempts to use Bitcoin and other cryptocurrencies for money laundering or to finance illegal activities. If adopted, they could cause cryptocurrency prices to plummet, according to some analysts.

Heavyweights from both K Street and Wall Street have mobilized against the rule, including the U.S. Chamber of Commerce, mutual fund giant Fidelity Investments and venture-capital firm Union Square Ventures. Cryptocurrency players like the Winklevoss twins, the Blockchain Association and Coinbase Inc. are also fighting the measures.

After President Donald Trump lost the election, the Treasury Department raced to issue the rules, which fell under its Financial Crimes Enforcement Network or FinCEN. The move generated thousands of negative comments and drew the threat of a lawsuit by a crypto trade group -- prompting a last-minute reprieve that pushed the final decision to the Biden administration and Treasury Secretary Janet Yellen. There’s no timetable for when a decision will be made.

The proposal threatens what some view as Bitcoin’s strongest feature: the ability to send money without the government watching. Users whose wallets now are only identified with codes would have their true identities recorded with the financial institutions they zealously avoided.

If Yellen moves forward with the rules, crypto proponents say some virtual-currency services will become more costly and some uses of such currencies could disappear completely. If she doesn’t, some fear criminals will be free to circumvent U.S. surveillance to hide money or finance terrorism.

If adopted, the regulations could cause a sharp fall in the prices of virtual currencies like Bitcoin, said Matthew Maley, chief market strategist for Miller Tabak & Co., adding that he thinks Bitcoin’s price will continue to rise in the long term. On Thursday at 5 p.m. in New York, one Bitcoin cost $47,919, up 5.7% from the end of February, but still nearly 18% below its peak on Feb. 21.

“Bitcoin is very risky and very volatile and it’s going to continue to be that way. If you add something like a new regulation, it’s going to be very vulnerable to a correction,” Maley said.

Regulatory threats haven't dampened Bitcoin's price.
At issue is a FinCEN proposal meant to make it harder for Bitcoin users to hide their identities. One part of the rule would require banks and money services businesses, like cryptocurrency exchanges, to file a report to the Treasury when a customer moves at least $10,000-worth of virtual currency into a wallet not hosted at an exchange. Those so-called unhosted wallets can be kept offline and are hard to track. Banks send such reports under anti-money laundering rules when customers withdraw $10,000 in cash.

The second part of the regulation would require banks and exchanges to keep a record whenever their customers send $3,000-worth of virtual currencies to someone else’s unhosted wallet. The record would have to include the identity of the counterparty, something that Bitcoin advocates said would be expensive and sometimes impossible to verify.

Normally, such rules undergo a lengthy public process that involves months of feedback and revisions. But when FinCEN published the rule on Dec. 18, it said it wanted to move swiftly and allowed only 15 days for comments -- during a time period that included both Christmas and New Year’s Eve. As a rationale, FinCEN officials said the lack of oversight on some transactions was a national security threat.

The truncated comment period took Bitcoin advocates by surprise, said Kristin Smith, who leads the Blockchain Association, a cryptocurrency trade group. Smith said she had expected the Treasury to take several months, but it suddenly became an “all-hands-on-deck situation.” The organization in December threatened to sue Treasury for rushing the process.

Crypto advocates flooded FinCEN with comments, arguing that the process was rushed and the rules were unworkable. FinCEN to date has received about 7,600 public comments.

The U.S. Chamber of Commerce wrote that the rule would have “unintended long-term consequences” on the virtual currency industry. Hedge-fund manager Mike Novogratz’s Galaxy Digital Holdings LP also submitted comments excoriating the proposal.

Gemini, a crypto exchange founded by Cameron and Tyler Winklevoss -- the twins who settled a long-running dispute with Facebook Inc. founder Mark Zuckerberg over who had the idea for the social media network -- wrote that FinCEN’s proposal could actually increase money laundering by encouraging criminals to move all of their crypto activities to unregulated markets outside the U.S.

Republican lawmakers, including former Representative Cynthia Lummis, who is now a Wyoming senator; Arkansas Senator Tom Cotton and Democratic Representative Tulsi Gabbard of Hawaii, also reached out to Mnuchin in letters and phone calls to criticize the rule and short comment period.

Fight for the Future, a digital rights advocacy group, set up a website, called “Stop Financial Surveillance,” that said FinCEN’s proposal would “facilitate extremely intense financial surveillance on an unprecedented scale.” The site included a web form for users to easily send a comment to the Treasury, which product director Dayton Young said has been used more than 3,000 times.

Some individual virtual currency owners who didn’t give their names told FinCEN the rule would unfairly expand surveillance of American citizens.

The Treasury Department in January yielded to the pressure and ultimately extended the comment period to the end of March, leaving the matter to the Biden administration, which could make a decision later this year.

That for us was our moment of victory,” said Smith. “Crypto won.”

The Biden administration plans to keep a close eye on Bitcoin’s rise in the market. Gary Gensler, Biden’s pick to chair the Securities and Exchange Commission, at his confirmation hearing on Tuesday said the SEC under his watch would ensure cryptocurrency markets “are free of fraud and manipulation.”

Last week, Yellen echoed some of the fears expressed by her predecessor, Steven Mnuchin.

“I don’t think that Bitcoin -- I’ve said this before -- is widely used as a transaction mechanism,” said Yellen at an online event hosted by the New York Times’s DealBook. “To the extent it’s used, I fear it’s often for illicit finance.”

Regulators have long been wary that virtual currencies are used to skirt sanctions or finance terrorism. Crypto exchange Coinbase in a securities filing last week disclosed that it had responded to subpoenas and voluntarily disclosed information on some transactions to the Treasury’s sanctions enforcement agency.

Mnuchin personally pushed hard to try to ensure that the new rules would be in place before the end of the Trump administration, despite the hesitancy of some staff members inside FinCEN, said two people familiar with the matter. Mnuchin said in response to a request for comment that the interim rule was supported on an interagency basis. He said he briefed Yellen on the proposal as she took over the department. A Treasury spokesperson didn’t respond to requests for comment.

Now, virtual-currency associations and executives are trying to convince FinCEN staff to eliminate parts of the rule, said the Blockchain Association’s Smith, adding that they are unsure when Yellen or other Biden appointees will decide how to proceed.

Beyond lobbying, organizations like Fight for the Future are holding public events on Reddit and YouTube to try to convince more virtual-currency enthusiasts to weigh in and run up the comment-count at FinCEN even more.

“We’re trying to spread the news so people recognize the gravity of the situation,” said Peter Van Valkenburgh, director of research at Coin Center, a nonprofit virtual currency advocacy organization.


There are obvious ways around this stupid proposal, transfer your money to an offshore account with a non US bank and buy cryptos in a jurisdiction not covered by US law.
But I don't think this is the main game. Its a softening up process to bring in some sort of regulation that they really want.

Mick





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mullokintyre
post Posted: Feb 23 2021, 09:07 AM
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A little while ago i wrote about the potential of various authorities deciding that digital currencies were likely to be become regulated, and thus ripe for manipulation by the wealthy.
From KITCO
QUOTE
Could increased scrutiny from the U.S. officials trigger even a bigger selloff?

Recently, Treasury Secretary Janet Yellen has been speaking about the importance of bitcoin regulation while focusing on illicit financing risks. Yellen has also been referring to bitcoin as a very volatile and "highly speculative asset."

"I think it's important to make sure that it is not used as a vehicle for illicit transactions and that there's investor protection. And so regulating institutions that deal in bitcoin, making sure that they adhere to their regulatory responsibilities, I think is certainly important," Yellen told CNBC last week.

Earlier in February, Yellen told the Treasury's innovation policy roundtable that the "misuse" of cryptocurrencies like bitcoin is "a growing problem."

"I see the promise of these new technologies, but I also see the reality: cryptocurrencies have been used to launder the profits of online drug traffickers; they've been a tool to finance terrorism," she said.


This sounds suspiciously like the groundwork being laid for some sort of interference by regulators into what is really the only truly free market investment area left.
Don't say you were not warned.
Mick




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royco
post Posted: Feb 15 2021, 10:10 PM
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In Reply To: Pendragon's post @ Feb 11 2021, 04:28 PM

bitpanda, blockchain.com
probably many more. look for the ones that have been around since the early days.
they might even offer you some seed coins when opening a wallet. may look stupid and silly now bit so did 100 btc back in 2009.




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royco
post Posted: Feb 15 2021, 08:48 PM
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https://news.yahoo.com/jay-z-twitter-ceo-jack-235440963.html



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macdtrader
post Posted: Feb 11 2021, 09:20 PM
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In Reply To: Pendragon's post @ Feb 11 2021, 04:28 PM

A friend who mines Litecoin suggested coinspot.
I bought mine via CFD.
IG @ 10% margin
CMC @ 5% margin.
Interest very high @ 25% pa

 
 


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