Wednesday, August 28, 2019
Monday, August 26, 2019
Sunday, August 25, 2019
Thursday, August 22, 2019
Nikkei Report Exposes PBoC’s Fear of Bitcoin
Bitcoin is giving the People’s Bank of China sleepless nights, according to a new report by the Nikkei Asian Review.
The media coverage highlights how people in China have shown a middle-finger to the capital control measures imposed by their central bank and government. They are purchasing bitcoins en masse and using them in offshore transactions, away from the prying eyes of regulators and lawmakers.
The trend is picking at such a speed that bitcoin is now part of a $88 billion capital flight, according to government records.
“This was close to the all-time record figure reached in the fourth quarter of 2017,” according to Chris Wood, equity strategist for Jefferies Hong Kong. “Beijing is trying to stem outflows and one of the main channels these days of such outflows is cryptocurrency.”
Bitcoin transactions require no confirmation or authentication from clearinghouses such as banks or centralized financial institutions. An extensive network of miners confirms them for senders and receivers. Those validators can be both inside or outside the jurisdiction of China, making it impossible for Chinese authorities to launch a crackdown on them.
That is very the same reason PBoC is finding it hard to tame the regional bitcoin industry. The central bank in 2017 outright banned the trading of all kinds of cryptocurrencies, which forced many local exchanges to shift base in haven countries, including a specially-administered Hong Kong.
Devaluation
But, as Nikkei points out, the elephant in the room is economic policies themselves. Bankers want to maintain their monopoly on financial systems and the tool that makes it happen is national currencies. Yuan lately has become the same – Beijing is devaluating it in the name of economic competition and hurting the very core that holds it as valuable asset: the people.
A section of Chinese population knows already that their best bet to safeguard themselves against a devaluating Yuan is Bitcoin. That explains why the cryptocurrency’s volume in China soared by more than 50 percent as US President Donald Trump announced tariffs on billions of dollars worth of Chinese goods.
“Bitcoin has the potential to perform well over the course of normal economic cycles as well as liquidity crises, especially those involving currency devaluations,” wrote the research department of Grayscale Investments, adding that it has “store-of-value characteristics similar to real assets like gold, with hard-money attributes like immutable scarcity.”
For all the good and bad reasons, bitcoin is becoming a go-to asset for people under severe control by their governments and other authorities. As Anthony Pompliano, a famous bitcoin bull, says: the virus is spreading.
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Monday, August 19, 2019
Bitcoin and Gold are Collectibles: Fund Manager
A fund manager associated with Pennsylvania-based investment management firm Valley Forge has questioned the safe-haven status of both Gold and its digital rival Bitcoin.
Dev Kantesaria said in an interview with Business Insider that both the assets are no less than collectibles.
“You are actually not buying any protection, you’re simply speculating,” the analyst noted. “To me, it’s no different than any other speculative activity in your life.”
Kantesaria criticized Bitcoin for its fundamental structural issues as safe-haven, the primary being its higher risk-reward ratio. The portfolio manager said people were selling valuables like cars, laptops, and even houses to purchase bitcoin, which is unproductive. He made the same argument against gold.
“You have to think about lost opportunity and lose buying power when buying gold,” he added.
Bitcoin Speculators on Rise
Kantesaria’s comments appeared after bitcoin impressed investors with its 200 percent price rally this year. The upside particularly borrowed fat from global economic turmoils caused by the ongoing US-China trade war, weakening Chinese Renminbi, flexible monetary policies, and the introduction of Facebook’s controversial payment project Libra.
In Q2/2019 alone, the bitcoin-to-dollar exchange rate rose by $6,666, or 162 percent, according to data fetched by CoinStats’ cryptocurrency portfolio management app. That made the cryptocurrency the best performing asset in the world, which made investors look at it as a safe-haven asset.
Nevertheless, bitcoin last week dropped despite weak economic data posted by export-rich economies like China and Germany. Even an inverted yield curve, which analyst believe signals a recession, did not make investors park their money in bitcoin. Instead, they hedged into government bonds, a low-risk, low-reward alternative.
But, according to Evan Kuo of digital asset protocol Ampleforth, a global economic slowdown continues to be bitcoin’s best use case as a hedging instrument. The CEO told Business Insider:
“In a slowdown, since the economy is so interconnected, there are only a limited number of assets that are isolated.”
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Will the Real Satoshi Please Stand Up
The big secret at the core of Bitcoin is the identity of its creator, the pseudonym known as Satoshi Nakamoto. There have been many who claimed they created the benchmark cryptocurrency protocol – and failed.
The most popular claim is from an Australian cryptographer Craig Wright – who literally sues anybody who questions him. However, not a single person has provided proof-of-identity – the ownership of first-ever mined bitcoins.
Joining the list of so-called fakes is another Satoshi Nakamoto. On Sunday, the UK-based Pakistani man posted a long, intriguing post, declaring himself as the original creator of Bitcoin. In quite a Dan Brown mode, he deciphered the meaning of the name ‘bitcoin’ – derived from Bank of Credit and Commerce International (BCCI), a global banking firm which the Times called the world’s sleaziest bank back in 1991.
The new Nakamoto provided three proofs to prove his identity. First, he referred to the first bitcoin domain, Bitcoin.org, stating that he registered it on the 18th of August in 2008. Calling himself a numerology believer, the new Nakamoto said he created another domain named after BCCI on the 18th of November.
Yes, that’s all. This is his first proof.
The second proof focused on the name of Satoshi Nakamoto himself. In yet another Dan Brown-ish style, the new Nakamoto described the origin of his name using magical numbers.
“It has been said that numbers are bits of information that carry an intrinsic energetic quality and that by studying numerology, you can gain a better understanding of the deeper meaning and purpose underlying our experience.
The new Nakamoto said his nickname is Shaiko, which adds up to create the number 24 in Chaldean numerology. Accidentally, the name ‘Satoshi’ also makes 24. Bingo.
“The names Shaikho and Satoshi are a perfect match in the Chaldean system.”
And that sums up the second proof. So far, so catchy.
One has to give in to the new Nakamoto for at least making Craig Wright’s claims look better. On the whole, the third proof could be anything about sun signs, or poop colors. Not that we are excited anyway, but will the real Satoshi please stand up (just to shut up the fakes).
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Friday, August 16, 2019
Wednesday, August 14, 2019
Tuesday, August 13, 2019
New Zealand Legalizes Wages Paid in Bitcoin
Companies based in New Zealand can now pay salaries in cryptocurrencies like bitcoin, according to a new ruling.
The New Zealand Inland Revenue announced on August 7 that companies which choose to pay their employee in cryptocurrencies can file for tax deduction under the existing scheme. The move verified bitcoin as a legal wager-payment method, same in the line of Visa, PayPal, MasterCard, or wire transfers.
As a part of the ruling, companies must pay employees only in those cryptocurrencies that can be pegged to at least one sovereign currency. They should also ensure that cryptocurrencies can be easily liquidated into another form of payment, such as cash.
The Inland Revenue also clarified that their new law bars self-employed personnels from accepting cryptocurrency as payments. The move would likely impact blockchain developers and cryptocurrency content marketers that typically accept native tokens as payments.
Despite a few shortcomings, cryptocurrency enthusiasts welcomed the Inland Revenue’s take on bitcoin. One user on Reddit said:
“Great, one more step towards full crypto integration around the world.”
Renowned market analyst Rhythm Trader said New Zealand gets bitcoin, adding that their move would inspire more countries to accept the cryptocurrency. Excerpts:
“We’re going to see more and more countries participate in the new financial revolution. Bitcoin adoption should be the next space race.”
A New Legal Framework for Bitcoin
The tax authority’s new ruling appeared amidst a time when regulators are finding it difficult to define bitcoin. Wellington’s Inland Revenue termed the cryptocurrency as property, stating that it cannot be money because it is not a legal tender.
However, the New Zealand taxman considers bitcoin as money, now making it available to be used to pay taxes and salaries.
Bitcoin surged by more than 200 percent this year after establishing a bottom near the $3,100 level. Reports suggest that investors are beginning to consider the cryptocurrency as a haven asset, especially against the ongoing US-China trade war, and an economic epidemic promised by Brexit this Halloween.
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