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Back at $13K: Bitcoin Unfazed by Profit Takers After Rise to 2020 High

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How to Answer Your Family’s Bitcoin Questions This Thanksgiving

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Could bitcoin replace turkey as the object of everyone’s attention this Thanksgiving? 

It happened three years ago. The last time bitcoin went gangbusters, conversations in dining rooms across America were less about giving thanks than the fear of missing out. 

“Should I buy bitcoin?” your uncle may have asked. “And what’s this about icy ohs? (Can you pass the turnips, puh-lease.)” 

It’s evident things are different this time around – and not only because many will be clinking glasses over Zoom rather than their parents’ fancy china. Despite positively effervescent markets right now, it seems like the retail crowd isn’t buying. Or if they are, they’re being awful quiet about it. 

But that doesn’t mean Mom and Pop aren’t interested in your fixation with cryptocurrency. Bitcoin has made headlines in mainstream media for breaking a new market cap. Also, due to the relentless work of such Ethereum chroniclers as Cami Russo and Matt Leising, more people are familiar with terms like “the world computer.” 

Presuming your wallet is in profit, the folks may even want to hear more about this “Mr. Nakamoto” you’ve been working for. And just what is causing the value of this bitcoin to increase?

See also: What Is Ethereum?

“Paul Tudor Jones and Michael Saylor caused the value to increase,” Matthew Graham, an actual investor and chief executive at Sino Global Capital, said. “We control speculative buying through judicious use of such tools as FOMO and FUD.”

Meltem Demirors, the chief strategy officer of CoinShares, is crypto’s own caffeine-addicted, fun-loving bomb-thrower. Your parents may recognize her as a key figure in getting the colloquial (and scatological) synonym for small-capped cryptos added to the Congressional Record. 

Ouriel Ohayon, chief executive of ZenGo, a non-custodial wallet startup that produces research reports known to grind gears among bitcoin maximalists, started his career as a tech journalist, attempting to explain the French startup scene to the world. 

Kathleen Breitman is one of the co-founders of the community-governed, smart-contract-friendly blockchain Tezos. 

Matthew Graham is CEO of Sino Global Capital, a decentralized tech investment firm based in China. He will eat your hot pot

Ahead of this autumnal feast, we convened a panel of industry experts to answer the vital questions you might expect from family and friends who haven’t thought about bitcoin since they opened a Coinbase account in December 2017. 

Is Satoshi Nakamoto the Bitcoin CEO?

Demirors: No leaders. No rulers. No CEO.

Ohayon: To be the CEO, there needs to be a company. And Bitcoin is not a company, it’s a protocol. That’s point number one. Point number two is that it does not matter, at least, anymore. Ten years in, Bitcoin is widely decentralized enough to exist without a CEO … even if it is a company. 

Breitman: Is Moses the CEO of Judaism? 

Isn’t bitcoin illegal? If it isn’t, it should be.

Demirors: No. Software and math are not illegal, although governments are trying to change that … [F]unny story: Cryptography – the reason why you can securely use the internet – was briefly banned and considered a weapon. Did not last long for, ahem, obvious reasons.

Ohayon: Like everything in life, bitcoin can be used for legal or illegal purposes. A knife could be used to cut a tomato, but also to kill someone. Because every transaction on the Bitcoin network is public, it is a very bad idea to use BTC for illegal purposes. So actually, bitcoin is the best anti-illegal currency on the planet. 

Breitman: That would really increase its street cred.

Why would I need a world computer if my desktop works just fine?

Demirors: You won’t even know you’re using it. Do you really even know how your computer works?

If people can go around spending satoshis, why can’t I go around passing Monopoly money?

Demirors: You can, BUT, it will only work if people are willing to exchange goods and services for Monopoly money. Money is just collective fiction, even the dollar. 

Ohayon: It’s the difference between paper and math. With satoshis is that you can’t print as much as you want. No one is keeping count of the amount of Monopoly paper in circulation or where they end up. Satoshis are just the opposite, mathematically proven scarce, and therefore attributable and spendable.  

Breitman: I would encourage you to try that and see how far you get.

Graham: Why would you want to buy something with bitcoin?

Why are there so many coins? Dimes, pennies, nickels, quarters and the old half-pence will do.

Ohayon: Asking why there are so many coins is like asking why there are so many websites. It’s because every protocol brings a different utility and aspect to the digital economy. 

I always keep my wallet in my front left pocket. Aren’t you asking for trouble uploading it to the internet?

Demirors: Why have a physical wallet in the first place?

Ohayon: Money has been electronic for many years now. Banks, PayPal, credit cards and many other monetary intermediaries have gone digital. But now, with blockchain, money can not only be electronic, but digitally native. The advantage is that you have a more secure protocol and proof of ownership, so you know that your money is your money. 

Breitman: I bet you can fit two Ledgers in your front pocket!

Graham: You can try a safe deposit box but actually it’s a hard wallet.

I lost all my savings betting on bitcoin in 2017! My family didn’t eat for months. Now you want me to try again?

Demirors: Bitcoin isn’t betting. Please don’t bet on bitcoin. Be reasonable. Ish. (This is NOT financial advice, I’m required to say that.)

Ohayon: 2017 was definitely not a great time to speculate on bitcoin, if that was your intention. When investing, I would not bet more than you can afford to lose. 

Breitman: Absolutely not! 

If I buy bitcoin, am I not just funding terrorists?

Demirors: No. The paper dollars in your wallet fund terrorism. The banks you hold your money with fund terrorism. Your own government funds terrorism with your tax dollars. When you own bitcoin in a non-custodial wallet, only you can spend that bitcoin. 

Ohayon: Bitcoin does not belong to anyone, so you’re not funding anyone. You are usually buying it from services like exchanges and wallets that are usually regulated companies. 

Breitman: No, sending money to terrorists is funding terrorists. 

Graham: I asked Tether but on the advice of legal counsel they have chosen not to answer.

How do you own part of a bitcoin?

Graham: The same way you can own part of a dollar. Only it’s a religion.  

See also: Still Don’t Get Bitcoin? Here’s an Explanation Even a 5-Year-Old Will Understand





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TSLA Stock Down 2% Now, Elon Musk Suggests Tesla Hatchback Model for Europe

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Speaking at a virtual conference on batteries hosted by the German government, Tesla CEO Elon Musk suggested that the company could launch a hatchback model for Europe.

Tesla Inc (NASDAQ: TSLA) stock is down approximately 2% during Wednesday’s pre-market after closing yesterday at $555.38, up 6.43%. All these movements come at the time of distributing the news that the company could launch a Tesla hatchback model in Europe.

Tesla stock has been among the best performing traditional stocks during the pandemic, whereby it has experienced over fivefold rally. Notably, the company has just surpassed the $500 billion market capitalization and stands at $526.24 billion at the time of writing.

With 947.9 million outstanding shares, Tesla has been able to raise substantial capital to fund its global market venture. Hereby capable of competing with Chinese EV companies that are not only springing up fats but also growing globally tremendously.

Nevertheless, Tesla investors are very optimistic that the company will emerge among the top winners in the post-COVID period. Supported by past performance, Tesla shares are likely to reach $600 according to different analysts’ predictions.

According to the metrics provided by MarketWatch, Tesla shares have rallied over 744% in the past twelve months. In addition, they have managed to add over 563% year to date, and are now up 37.26%, 30.78%, and 25.76% in the past three months, one month and five days respectively.

There are several fundamentals that are likely to affect Tesla stocks in the near future. One is the awaited ruling if Tesla shares will be added to the S&P 500 index by next month. If this happens, it will be a huge bull confirmation that will push Tesla stock beyond the current gains.

However, Tesla stocks have had a blick past history with whale investors that might cause its shrinking in the near future. Notably, sometime last month nearly 48 million Tesla stock shares, approximately 5% of the outstanding shares – worth more than $25 billion at current prices – were sold short. Whether this was a risk mitigation method as we approach the end of year holidays or not, it is a call for alarm in the Tesla stock near-future prospects.

Possible Tesla Hatchback Model for Europe

Speaking at a virtual conference on batteries hosted by the German government, Tesla CEO Elon Musk suggested that the company could launch a compact hatchback model for Europe. “Possibly in Europe it would make sense to do, I guess, a compact car, perhaps a hatchback or something like that,” Musk noted.

He further highlighted that a small compact model has a higher demand in Europe than in the United States that most people prefer bigger cars.

If Tesla manages to significantly penetrate the European market, its shareholders will greatly benefit. Apparently, Tesla’s rising market valuation continues to shrink the gap between it and Berkshire Hathaway.

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A financial analyst who sees positive income in both directions of the market (bulls & bears). Bitcoin is my crypto safe haven, free from government conspiracies.
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Long in China’s Shadow, the US Is Becoming a Bitcoin Mining Power Again

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When it comes to the energy- and capital-intensive process of mining cryptocurrency, people tend to think of China, where about 65% of global hash power is located.

But like many other closely observed metrics in crypto, American hashrate is a number that seems to be on the cusp of significant increase. 

Crypto mining, which harnesses data centers full of specialized computers to earn bitcoin by processing a so-called proof-of-work algorithm, is an industry that’s about to come out from under the radar in North America, say its proponents, and become new core infrastructure.

While the U.S. and Canada don’t have the cheapest energy on the planet, there’s plenty of underused power and energy infrastructure to repurpose. But the really deciding factor is stability, and with that comes access to capital markets and institutional investment.  

See also: Bitcoin’s Mining Difficulty Sees Largest Percentage Drop in 9 Years

There are at least 23 listed crypto mining companies, the majority of which are based in the U.S. and Canada. 

“U.S. equity markets continue to be the most favorable listing venue for mining companies,” Ethan Vera, CFO and co-founder of mining company Luxor Technologies, told CoinDesk. “They can raise through [at-the-market] offerings, which provide a very solid financing method for public companies looking to scale up their operations. Foreign companies have more limited financing levers and have a relatively harder time raising capital through equity.”

A prominent example is Nasdaq-listed Marathon Patent Group, which spent $50 million on a fleet of Bitmain’s state-of-the-art S19 Pro Bitcoin mining computers earlier this year. Marathon is building out a 105-megawatt (MW) mining facility in Hardin, Montana, as part of a venture with Maryland-based power provider Beowulf Energy. 

“As a public company, everything we do is transparent,” said Marathon CEO Merrick Okamoto on Tuesday at Bitmain’s Mining and Investment Summit 2020. “There are disadvantages to letting everybody know what you’re doing, but it’s also a benefit. It gives us unique access to capital markets. We’ve done two financings in the last year.” 

Ruthless algorithm

China may have lorded it over the crypto mining space until now thanks to cheap labor and a massive over-build in dam and hydro generation infrastructure. But the U.S. has begun catching the attention of Chinese players looking to diversify, according to Peter Wall, CEO of London Stock Exchange-listed Argo Blockchain. 

“I’ve had conversations with people in the mining industry in the last few months about Chinese miners coming over to North America,” Wall told CoinDesk. “There’s been talk about it for years, but it really now does appear to be a trend we’re seeing. Miners are always looking for more stability, which North America offers, and power and hosting costs in North America are competitive and sometimes even cheaper than Chinese options.”

The obvious geopolitical implication is that the U.S. could eventually take on China in this nascent arena. But the mining community would rather couch this in terms of greater decentralization, whether that means geographical spread or selling mining company shares to the public.

See also: Peter Thiel Backs $200 Million Valuation for Renewable Bitcoin Mining in the US

“Everybody loves the geopolitical angle,” said Mike Colyer, CEO of Foundry, a crypto mining investment company owned by Digital Currency Group (which is also the owner of CoinDesk). “But the goal is not for the U.S. to dominate bitcoin mining. That’s not gonna happen. The goal here is to decentralize it throughout the world.”

That said, Colyer anticipates a muscular market in the U.S. As well as the growth afforded public mining companies, there’s a bank of interesting opportunities available regarding private investment plays in the U.S. coming from the likes of hedge funds and private equity firms that own infrastructure. 

“A lot of the power in the U.S. is deregulated, and private equity or hedge funds own a lot of power-generation facilities,” said Colyer. “They’re starting to recognize the idea they can make a lot of money mining bitcoin, and it also helps make their overall power generation more efficient. They actually save money on their core power generation, plus they can make money on bitcoin.”

Bitcoin mining comes in for some stick thanks to its gargantuan energy consumption, but less attention is paid to the fact it’s also at the forefront of energy innovation. Colyer calls the Bitcoin system’s mining algorithm “ruthless” in always driving for the lowest cost possible, which is generally towards renewables like hydro-power – the reason for a migration of up to 40,000 Chinese mining rigs at the end of Szechuan’s wet season.

Also on the renewable energy push is Layer1, the West Texas-based wind-powered mining operation backed by Peter Thiel.  

Cogeneration

A combination of smart investing and energy innovation is demonstrated by Greenidge Generation, a natural gas power plant in upstate New York converted into a crypto mining facility earlier this year by its owner, private equity firm Atlas Holdings.

Greenidge is a “cogeneration” facility where bitcoin mining can be used to add stability to the grid. Being connected to the Millennium Pipeline system, a very liquid forward, or over-the-counter, market, also allows Greenidge to hedge out input variable costs over multiple years, Tim Rainey, Greenidge’s chief financial officer, said at the Bitmain summit.

“We have positions all the way to mid-2022, so that’s a vehicle we use to lock in our mining economics,” said Rainey, adding that “25% of our overall capacity is dedicated to mining. Then the rest of it we use for sending power to the grid when it’s needed. So, prior to bitcoin mining, it would take us 12 hours to start up and put megawatts to the grid in periods of high demand. But now we can ramp up to full 100-megawatt power within an hour. So this provides additional stability to the grid as well as mining bitcoin.”

See also: China’s Crypto Miners Struggle to Pay Power Bills as Regulators Clamp Down on OTC Desks

The U.S and Canada currently account for 15%-20% of global crypto mining hash power, with the rest split among Russia, Kazakhstan and the Nordic countries. There are around 15 mining facilities operating at scale in North America (above 50 megawatt), estimates Taras Kulyk, senior vice president, Blockchain Business Development at Core Scientific, the largest crypto mining operation in the U.S.

North America is now on a precipice of real growth, Kulyk says, thanks to its regulatory certainty and the huge amount of infrastructure built in the 1970s and 1980s in anticipation of growing manufacturing that never came. Now that people are starting to realize crypto mining is not some shady enterprise, the U.S. is better positioned at the boardroom level.

“The operational costs are a little bit more expensive in the U.S., but when you’re sinking $100 million or even a billion dollars into an ecosystem for infrastructure you’re looking at stability,” said Kulyk. 

Some government support would also be helpful, said Kulyk. To this end, Core Scientific has put together a policy paper and will be working with the Chamber of Digital Commerce to get the word to the U.S. government.

“We want the folks in Washington, D.C., to understand that digital asset mining is not bad and that there’s a right way to do it,” said Kulyk. “I’m into crypto mining but I’m a ‘greenie’ at heart. I think the right way is through renewable power sources done at scale. The larger that becomes, the lower the burden on the environment.”



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