Wednesday, November 7, 2018

Bashing Bitcoin 🥊

November 7, 2018

Central Banker Bashes Bitcoin.. Again

Central bankers don't like Bitcoin

The Chief of the Bank for International Settlements, Agustín Carstens, is one of the most powerful, harshest critics of cryptocurrencies, especially Bitcoin. He recently spoke at a conference in Miami talking about reforms in payment systems.

Carstens argued that the reforms that the Bank for International Settlements has been making are more impactful than what cryptocurrencies have done for the world. He also ripped cryptocurrencies for being too volatile, which hasn't been true at all in the past months.

Carstens direct quote about cryptocurrencies was:

"The use of 'currencies' is misleading. Cryptocurrencies, such as bitcoin, ether, and tether, do not serve the core functions of money. No cryptocurrency is a true unit of account or a payment instrument, and we have seen this year that they are a poor store of value. Buyers of cryptocurrencies are buying into nothing more than a software algorithm."

Previous bashing

A few months ago, Carstens had a similar rant about Bitcoin. Carstens spoke with a Swiss newspaper about cryptocurrencies and warned "young people" to "stop trying to create money!". He claimed that the central banks are "trusted" and there is no need for a decentralized currency that was "created from nothing". Instead of trying to reinvent money, Carstens asks the young generation to focus on different innovation.

💡 What is the BIS? The Bank for International Settlements was established in 1930 and is headquartered in Switzerland. The institution "fosters international monetary and financial cooperation and serves as a bank for central banks". There are 60 central banks around the world that are members of the Bank for International Settlements.

RESEARCH

Difficulty Shorting Cryptocurrencies Could Be Holding Up Their Prices

In a new study released by University of Queensland finance professor Wang Chun Wei, findings suggest many cryptocurrency prices are being propped up because of the inability to short the cryptocurrency.

Instead, Wei holds that if investors were able to short, meaning to bet that the price of a cryptocurrency will fall, more digital assets would go to zero.

However, because short options in the market are only available for the top cryptocurrencies like Bitcoin and Ethereum, the optimists in the market tend to outweigh the naysayers.

Jokes and scams

To prove his hypothesis, Wei looked at two cryptocurrency categories that, in theory, should hold little to no value to investors: jokes and scams.

In the joke basket (yes these are real), Wei analyzed dogecoin, RonPaulCoin, and Useless Ethereum Token. As for scams, Wei included the infamous Bitconnect ponzi-scheme, Urocoin, and ParagonCoin.

Comparing the two categories, Wei found that prices tend to plummet much faster for identified scam cryptocurrencies than their joke counterparts. According to Wei, this happens because as soon as the cryptocurrency has no fundamental value to investors, all investor optimism is gone.

In contrast, for jokes, Wei reasons that since these cryptocurrencies had no malicious intent behind them, investors continue to hold them - suggesting that investors still have the hope of selling at a higher price despite the cryptocurrency having little to no fundamental value.

High on hopium

While jokes and scams provide a baseline for cryptocurrencies with low fundamental value, many other cryptocurrencies in the market also have little to show so far and still have massive market capitalizations.

For Wei, he believes the weight put on investor hope likely won't take a hit until short options become widely available across the market.

HACK

Canadian University Forced to Shut Down Network After Cryptojacking

Latest victim of cryptojacking

St. Francis Xavier University in Nova Scotia, Canada is the latest target of a cryptojacking attack. The University was recently victim to an attack that forced it to shut down its entire network infrastructure.

The attack started on November 1st, but the University did not realize that its network was compromised until the 4th. Once it came to the realization it was being attacked, University IT staff shut down all network systems to prevent the attack from continuing or spreading. Students were without WiFi, online course systems, shared networks, and more while IT attempted to fix the problem.

The University reported that no personal information was stolen by the attacker, but did urge that students reset their password as a precaution.

The attacker was seizing the University's vast computing power to mine a cryptocurrency. The cryptocurrency that was mined by the attacker was not disclosed.

Cryptojacking is running wild

The Cyber Threat Alliance recently published a report finding that there has been a 459% increase in the cryptojackings this year.

Cryptojacking is when a hijacker takes control of someone else's computer and uses the computing power to mine cryptocurrencies, most commonly Bitcoin or Monero. The hijacker then sends the mined funds to a wallet that they control. The computer owner often doesn't know this attack is happening to them.

Monero is the most popularly mined coin by hijackers, accounting for 85% of all illegally mined crypto. Obviously, attackers like Monero for its anonymity.

How you can protect yourself

It is important that your computer software is up to date along with any security patches that might be available. Use anti-malware software.

The way most people realize they are being cryptojacked is if their computer overheats and/or their fans start spinning quickly when their computer is seemingly under a normal load.

REVIEW

Clearing Up Confusion on the ETF Situation

On Monday part of the crypto community had open ears waiting for the U.S. Securities and Exchange Commission to make a decision on the nine Bitcoin exchange-traded funds (ETF) that were denied this summer.

However, a decision hasn't come yet since Monday, November 5th, was just the deadline for the general public to submit their comments to be reviewed by the SEC - not the deadline for the decision.

While many expect to hear in the coming days and weeks about an accepted ETF from this batch of nine, experts aren't getting their hopes up. Thus the spotlight is on the VanEck and SolidX ETF to get approved.

Know the dates

There is a lot of confusion surrounding the date of decision for the VanEck and SolidX ETF.

Here's your decision date cheat sheet:

The current deadline is December 29, 2018

however...

IF the SEC can't decide, they can delay the deadline to February 27, 2019.

Looking forward

While the community is hopeful a Bitcoin ETF will get approved, many believe the decision will likely get delayed for February. For now, the SEC will continue to review the public's comments on the nine Bitcoin ETFs that got denied and continue review with VanEck and SolidX to come to a solution.

BITS

But wait, there's more...

Salesforce has won a patent outlining how a blockchain-based platform can be used to prevent spam or other unwanted emails from hitting inboxes.
South Korea's leading virtual currency exchange Bithumb has partnered with Asian e-commerce giant Qoo10 to provide a cryptocurrency payment service.
Three Thai citizens who are currently being prosecuted for allegedly swindling $24 million worth of Bitcoin (BTC) have pleaded "not guilty" in the Criminal Court of Bangkok.

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