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Bad crypto news of the week

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It’s been a good week for the crypto markets. Bitcoin finally burst through the $11,000 ceiling, and kept going. According to some experts, the coin could be on its way to a full 2017-style bull run. Other analysts have identified five events that could move the markets this week, including the election’s effect on the dollar, Europe’s struggles with Brexit and the coronavirus, and Bitcoin’s high hash rate.

The investment experts at Stone Ridge Asset Management have been paying attention. After executives had made personal investments in cryptocurrencies, the company created a billion-dollar spinoff with a $115 million investment in Bitcoin. Square has been just as forward-thinking. The payments company has now put 1 percent of the company’s assets—about $50 million—into Bitcoins. 

The growth in crypto’s popularity has led some people to speculate that crypto banks are likely to overtake fiat banks within the next three years. In Italy, the banking system is trying hard to stay ahead. Some 100 banks there now use the blockchain network Spunta to speed up data transfers and settlements. In China, the city of Shenzhen gave away $1.5 million worth of a digital currency controlled by the country’s central bank, the People’s Bank of China. And the Winklevoss twins’ Gemini exchange is continuing to roll out regulated payment options for customers in the UK.

Closer to home, things are… well, a bit more cautious. The G7 has said that it will oppose Facebook’s Libra project until more oversight is in place. And Elon Musk has denied that his Tesla Gigafactory has Bitcoin ATMs. 

In the world of DeFi, things are looking more fluid. Chainlink might be about to lose its leadership of the ecosystem. Competition is heating up. Constellation Network is building a DeFi project on its Hypergraph protocol and has announced the support of early backers, including FBG Capital and Alphabit Fund. 

Cornell University has revealed that the most downloaded dissertation over the last eight years is Adem Efe Gencer’s proposal for Aspen, an algorithm for spreading the workload over a peer-to-peer network. (If you’re looking for a good place to read that paper, you can do worse than choose the crypto cruise ship Satoshi. It will soon be moored in the bay of Panama.)

That certainly rounds off a good week.

Check out the audio here.

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



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Big Bitcoin prediction, OKEx spooks markets, Ripple exec’s big mistake

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Coming every Sunday, Hodler’s Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more — a week on Cointelegraph in one link.

 

Top Stories This Week

 

PayPal to offer crypto payments starting in 2021

When rumors started circulating in June that PayPal was planning to launch a crypto service, the fintech giant was tight-lipped.

But this week, PayPal was ready to show its hand, confirming that it will allow its 346 million active accounts to buy and sell cryptocurrencies.

It isn’t an exaggeration to say that this is a huge deal for the mainstream adoption of digital assets. This will introduce large numbers of everyday consumers to crypto for the first time.

Initially, PayPal will support Bitcoin, Ether, Bitcoin Cash and Litecoin. U.S. account owners are going to get this new functionality first, with “select international markets” to follow later.

No fees are going to be charged for conversions until the end of this year. However, merchants won’t be able to support crypto transactions until the first half of 2021.

Announcing the news, PayPal CEO Dan Schulman said digital currencies offer “clear advantages” when it comes to financial inclusion, payment speeds and enabling governments to distribute funds to citizens quickly.

Bitcoin blasts through $13,000 following PayPal’s entrance into crypto

Unsurprisingly, PayPal’s big news served as dynamite for Bitcoin. The world’s biggest cryptocurrency smashed through $13,000 on Wednesday, gaining more than $1,000. That’s only the third time that BTC has hit this level since its record high in 2017.

All of this helps strengthen Bitcoin’s position. Even before the announcement, BTC had enjoyed a sustained period in five-figure territory after spending most of the past three months trading above $10,000.

Mati Greenspan, the founder of Quantum Economics, said the PayPal link was undeniable: “There’s no doubt in my mind that this bit of news is almost solely responsible for today’s extended gains.”

other cryptocurrencies that PayPal’s going to support also enjoyed chunky gains on Wednesday. ETH was up 8%, BCH surged 9%, and LTC rose by a whopping 15%.

And it wasn’t just the crypto industry that was going wild. In the aftermath of the news, PYPL’s share price hit a record high. Unfortunately, the uptick wasn’t enough to prevent Bitcoin’s market cap from overtaking PayPal’s on Thursday.

 

PayPal rumored to be eyeing acquisition of crypto custodian BitGo

Inevitably, attention now turns to what PayPal’s offering will look like, whether crypto exchanges need to be worried, and the company’s plans for the future.

We’re starting to get an idea of what to expect. PayPal has partnered with Paxos to deliver the service, and it has obtained a conditional cryptocurrency license from the New York State Department of Financial Services.

On Friday, reports from Bloomberg suggested that PayPal is looking to acquire a crypto asset custody firm, adding that the fintech giant is currently in talks with BitGo, which helps investors store digital assets securely.

However, that report added: “Talks could still fall apart and PayPal could opt to buy other targets.”

Meltem Demirors, the chief security officer of the crypto asset manager CoinShares, has predicted that PayPal will seek to launch a stablecoin “in the next six to 12 months.” This would be a sting in the tail for Facebook, given how PayPal left its embattled Libra project.

 

Not everyone in the crypto industry is thrilled about PayPal’s recent news

Yes, there has been enthusiasm over PayPal’s plans, with the analyst Willy Woo suggesting that the service could easily treble Bitcoin’s user base. But not everyone is cracking open the champagne.

People who buy crypto on PayPal won’t be able to withdraw it to a wallet off the platform, prompting critics to say it’s another case of “not your keys, not your coins.”

SatoshiLabs, the team behind the Trezor hardware wallet, wrote: “If millions of newcomers are onboarded to Bitcoin by PayPal, there could be a very serious information gap that jeopardizes their experience and undermines key principles of cryptocurrency.”

It is also concerned about how PayPal’s clout in electronic payments “will be interpreted as expertise in crypto.”

Given how Satoshi Nakamoto’s vision was to decentralize finance and remove middlemen, some crypto purists will also be horrified at PayPal wading into the space.

But there are other practicalities to worry about — and one of them is tax. Every sale of cryptocurrency becomes a taxable event, especially if it’s sold for more than it was bought for. It’s very possible that the implications of this could be lost on crypto noobs.

Meltme Demirors on the news

And in other news…

Of course, there was plenty of other news in the crypto and blockchain sector this week.

The Chicago Mercantile Exchange quietly overtook BitMEX to become the world’s second-biggest futures market — buoyed by rising institutional demand. All this came as the crypto fund manager Grayscale Investments increased its assets under management by $1 billion in the space of a week.

Data from Messari showed that daily transaction volumes on the Ethereum network are twice those of Bitcoin — putting the blockchain on track to process $1 trillion this year. And in news that’ll make exasperated DeFi users breathe a sigh of relief, a ConsenSys developer predicted that the Ethereum 2.0 beacon chain genesis will happen in the next six to eight weeks.

Speaking of DeFi, the funds locked in protocols surged by $1 billion as analysts predicted we could see a bull run following on from the U.S. election. Meanwhile, the U.S. acting comptroller of the currency predicted that DeFi could render the financial services offered by banks obsolete — just like email disrupted the postal service.

 

Winners and Losers

 

Top winners and losers of the week

At the end of the week, Bitcoin is at $12,994.86, Ether at $409.13 and XRP at $0.25. The total market cap is at $395,014,912,585.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Quant (47.26%), Reserve Rights (40.41%) and Ocean Protocol (33.23%). The top three altcoin losers of the week are Crypto.com Coin (18.81%), ABBC Coin (17.74%) and HedgeTrade (16.31%).

For more info on crypto prices, make sure to read Cointelegraph’s market analysis

 

Most Memorable Quotations

 

“There goes wBTC. The majority of wrapped Bitcoin is custodied by BitGo. PayPal is not a good actor in this space. Position accordingly.”

THORChain

 

“If millions of newcomers are onboarded to Bitcoin by PayPal, there could be a very serious information gap that jeopardizes their experience and undermines key principles of cryptocurrency.”

SatoshiLabs

 

“Crypto is about financial freedom. It’s modern money that anyone anywhere can truly control. While we’re excited to see a new audience gain access, a non-custodial approach limits opportunity to self-custody your crypto or transact freely.”

Peter Smith, Blockchain.com CEO

 

“This is definitely a bullish sign for Bitcoin and other cryptocurrencies. Crypto is all about trust, and PayPal has a very high level of trust with its users […] If the UI/UX of the service is done right, we will see millions of new users join each month.”

Alex Mashinsky, Celsius CEO 

Chamath Palihapitiya

“We are eager to work with central banks and regulators around the world to offer our support, and to meaningfully contribute to shaping the role that digital currencies will play in the future of global finance and commerce.”

Dan Schulman, PayPal CEO

 

 

Prediction of the Week

Bitcoin price rise to $500,000 is inevitable, Winklevoss twins say

Unsurprisingly, the Winklevoss twins were brimming with enthusiasm in the wake of PayPal’s announcement.

Tyler Winklevoss tweeted: “PayPal is an important bridge between the mainland and the island of crypto. The diaspora from legacy finance is happening and this is the kind of infrastructure that will help make that happen. Soon there will b a flippening and crypto will b the mainland & fiat the island.”

This week, the twins doubled down on their prediction that Bitcoin will eventually hit $500,000, telling podcast host Peter McCormack that it’s a matter of when, not if.

“I would sort of contend that $500,000 Bitcoin is actually pretty conservative and the game hasn’t even really started,” Cameron noted.

 

FUD of the Week

 

First ransomware attack in 2020 election hits voting infrastructure in Georgia

A ransomware attack targeting the government systems of Georgia’s Hall County impacted key voting infrastructure, it has been revealed.

“Critical systems” within its networks were affected, and CNN says the incident may be the first ransomware attack in the 2020 election.

Officials said the county’s voter signature database and voting precinct map were heavily impacted by the hack but stressed that the voting process for citizens is unaffected.

Brett Callow, from the cybersecurity firm Emsisoft, told Cointelegraph: “There is a very real risk that they may shake voter confidence in the integrity of the vote, especially as confidence may already be quite low.”

 

 

OKEx’s lips remain sealed on its sudden crypto withdrawal freeze

There’s still no sign of OKEx’s cryptocurrency withdrawals returning to normal — nine days after they were suddenly suspended.

The ongoing suspension has been puzzling to many, but the exchange’s representatives maintain that the move was solely because one of the company’s private key holders has been cooperating with a Chinese public security bureau.

OKEx CEO Jay Hao has told Cointelegraph that the company is determined to reinstate withdrawals as soon as possible, adding: “We wholeheartedly apologize for this.”

Some users are starting to warn that their patience is wearing thin, expressing frustration at the lack of transparency surrounding what’s going on.

One tweeted: “Where is your CEO Jay Hao? He has to interact and give updated info frequently. When something happens with Binance, CZ tweets every hour.”

And another wrote: “It’s a bit weird one of the biggest exchanges in the world isn’t letting us withdraw money for so long.”

 

Filecoin creator denies strike allegations

The creator of the blockchain-based data storage platform Filecoin has dismissed allegations that miners of its token have gone on strike as “nonsense.”

Refuting the claims, Juan Benet claimed on Twitter: “What is happening is that miners are growing slower than before launch. This is in great part because the network is no longer subsidizing their pledge and fee costs — fees cost real money now, and miners need to match growth rate to token flow.”

It had been reported that five of the largest Filecoin miners turned off thousands of rigs to protest the blockchain’s economic model, which means that miners are required to stake FIL as collateral when producing a block. The problem is that many miners are apparently coming up short in the number of tokens needed.

Best Cointelegraph Features

 

Regulation will keep PayPal’s new crypto services from looking anything like crypto

Cointelegraph’s Kollen Post says that, for now, PayPal’s crypto payments are more about satisfying regulators than providing users with crypto capabilities.

 

How to build a crypto mining rig in 2020 to earn Bitcoin and Ether

Mining with home rigs is back, so Elena Perez takes a look at what those interested need to know to put together their own rig at home.

 

Frozen out? Bitcoin price correlation to other assets still undefined

Fidelity’s report claiming Bitcoin is a non-correlated asset has sparked discussion, but as Benjamin Pirus reports, not all agree with the assessment.





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Coinbase CEO prompts furious accusations of hypocrisy as he pushes political misinformation

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Less than a month after Brian Armstrong declared Coinbase should “be laser focused on achieving its mission,” he seemingly violated his own policy by tweeting a political post riddled with falsehoods… during business hours. 

In an Oct. 23 tweet from Armstrong’s personal account, the Coinbase CEO posted a link to a blog written by Rob Rhinehart on Kanye West’s presidential run with the tagline “epic post.” 

Rhinehart’s Twitter account is no longer available for unknown reasons, although its absence may be related to the inaccuracies and outright falsehoods contained in the post — even if it were written as satire, as some have speculated. 

These lies include the claim that Democratic presidential candidate Joe Biden’s son “killed himself” — in fact Beau Biden died from brain cancer in 2015. Twitter previously locked the New York Post’s account for an article making unverified claims about Hunter Biden. 

The blog post, entitled “Why I am Voting for Kanye West,” also seemingly goes against Armstrong’s stance on expressing political views at the crypto firm. 

Do as I say, not as I do

In September, Armstrong wrote a controversial blog post claiming Coinbase’s mission did not include advocating “for any particular causes or candidates internally that are unrelated to our mission because it is a distraction from our mission.” 

“We won’t debate causes or political candidates internally that are unrelated to work,” stated Armstrong at the time. He added that Coinbase employees should not “expect the company to represent our personal beliefs externally.”

Members of the crypto community moved between accusing the Coinbase CEO of outright hypocrisy for making a political statement — at 12:12 PM PST on a business day, assuming Armstrong works similar hours to those of his employees.

“Calling this ‘epic’ shows very poor judgment,” said Josh Elman, a board member at venture capital group Greylock Partners. “It is filled with propaganda, false claims, and nonsense. 

Having trust in the judgment of our leaders (even if we don’t agree with their decisions) is important in a CEO as well as president. This undermines trust in you.”

Other users on Twitter assumed the post was deliberately misleading.

“That article has got to be satire, right? If not, it’s one of the most tone deaf, cruel, and grossly counterfactual load of tripe I’ve ever seen,” said Twitter user jray. “I’d honestly be quite embarrassed to work with/for someone who believed this.”

Ironically, the controversy surrounding Armstrong’s recent tweet is exactly what he said he hoped to avoid by making Coinbase an “apolitical culture.” 

“There is a blurry line between moral statements and politics. We could use our work day debating what to do about various unrelated challenges in the world, but that would not be in service of the company or our own interests as employees and shareholders.”

Sixty Coinbase employees, or roughly 5% of its staff, reportedly left the crypto firm following the September announcement. Armstrong claimed in an Oct. 1 meeting that a “silent majority” of employees sided with him on keeping politics out of Coinbase. However, some who stayed have allegedly felt their freedom of speech has been stifled, with staff being required to erase certain politically-themed correspondence posted internally on the Slack messaging platform. There is no constitutionally mandated right to free speech within private companies, however. 

“If your original ‘no politics at work’ rule hasn’t driven out smart folks from your company, describing this rambling idiocy as ‘epic’ certainly will,” said Twitter user Gleb Bahmutov.





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Commodity trading gets sweeter with blockchain-based sugar exchange

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The world’s largest sugar refinery, Al Khaleej Sugar, officially announced the application of blockchain technology in its recently launched sugar trading platform, DigitalSugar.io.

Users of the UAE-based platform will trade the spot price of sugar via tokens tied to “up to 100,000 tonnes of raw sugar,” with its peg assured by the Universa blockchain who will be issuing electronic warrants of ownership with the tokens. Traders will be able to hold tokens representing between 1 kg to 1M tonnes, and will pay .4% in exchange fees as well as a 2.5% yearly storage fee.

The platform, launched in partnership with the flagship Free Zone and Government of Dubai Authority on commodities trade (DMCC) and Universa Blockchain, will be the first global exchange to offer traders and investors raw spot sugar trades on an immediate basis, rather than the more common options or futures offered by other current exchanges.

Jamal Al Ghurair, Managing Director, Al Khaleej Sugar, said that the launch of a blockchain-based sugar trading platform is in line with the wider goals of UAE Blockchain Strategy 2021, which Highness Sheikh Mohammed bin Rashid, Vice President and Prime Minister of the UAE and Ruler of Dubai, launched in 2018.

The Emirate Blockchain Strategy 2021 outlines an ambitious plan to migrate at least 50% of government-related transactions onto distributed ledger technology (DLT) platforms before the end of this year.

Sheikh Mohammed said of the Strategy: 

“The adoption of this technology will reflect on the quality of life in the UAE and will enhance happiness levels for citizens. 50 percent of government transactions on the federal level will be conducted using Blockchain technology by 2021 … This technology will save time, effort, and resources and enable individuals to conduct most of their transactions in a timely manner that suits their lifestyle and work.”



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