On December 7, the Bitcoin price achieved a new yearly low, as the valuation of the crypto market fell by $16 billion within a 24-hour span.

Bitcoin Price Struggles to Recover from New Yearly Low

Bitcoin (BTC) fell to as low as $3,210 on fiat-to-cryptocurrency exchanges like Bitstamp and Coinbase, which led other major cryptocurrencies and low market cap digital assets to fall by around 15 to 20 percent against the U.S. dollar.

bitcoin price

Since then, the Bitcoin price has rebounded from $3,210 to $3,455, by more than seven percent within merely 12 hours.

However, traders are cautious in regards to the short-term price trend of the dominant cryptocurrency given the intensity of its recent fall and the volatility the market has shown throughout the past two weeks.

Factors and Trends

Positive developments continue to surround the cryptocurrency market as large financial institutions in the likes of Nasdaq and Fidelity make big bets on emerging infrastructure providers like ErisX, a strictly regulated cryptocurrency exchange in the U.S. market.

Yet, the prices of major cryptocurrencies are falling at a rapid rate, in most cases with low volume, suggesting that many assets are free-falling without high sell pressure.

As technical analyst DonAlt said, Bitcoin still remains below an important resistance level at $3,700, and the failure to break out of it could result in the asset remaining in a low price range between $3,000 and $3,500.

The analyst explained:

“Decent day with quite a big bounce across the board. That said BTC is still below resistance. If BTC wants to turn bullish on larger time frames I’d really wanna see it manage to reclaim the lowest zone on the chart ($3,740).”

In a bear market, especially in crypto, the prices of major cryptocurrencies tend to drop by large margins, unaffected by developments in the sector. For instance, several reports claimed earlier this week that the delay of the Bitcoin exchange-traded fund (ETF) of VanEck by the U.S. Securities and Exchange Commission (SEC) caused the price of BTC to drop substantially.

However, the delay of the VanEck ETF to February was expected by many investors in the traditional financial market because the SEC does not have any motive to go out of its way to prematurely approve an ETF prior to its final deadline.

Even if a Bitcoin ETF was to be approved or rejected, the event would likely have minimal impact on the current state of the market, because the market is so overwhelmed.

For Bitcoin to recover, the market has to start demonstrating exhaustion and extreme fatigue from the steep sell-off. Historically, in 2010, 2012, and 2015, BTC dropped by around 85 percent, underwent a several-month-long consolidation and accumulation phase, before engaging in a proper recovery.

2019

The bear market of the cryptocurrency market will likely extend to 2019, and regardless of major developments that lay ahead including the VanEck Bitcoin ETF decision in February and the scheduled launch of the Bakkt futures market in January, the market will only begin to recover when bears and sellers lose momentum and control over the market.

Known for inventing torrenting (BitTorrent) in the early noughties, Bram Cohen might also end up getting famous for an entirely different thing – solving the electricity wastage problem of bitcoin.

Cohen’s newest creation, a cryptocurrency known as Chia which bills itself as ‘green money for a digital world’, is the very antithesis of bitcoin. Unlike bitcoin which uses the electricity-guzzling proof-of-work consensus mechanism, the chia cryptocurrency uses proof-of-space where the mining process uses the hard disk space.

Speaking to Breaker magazine Cohen stated that hard disk space is readily and widely available and most of the time unutilized:

The idea is that you’re leveraging this resource of storage capacity, and people already have ludicrous amounts of excess storage on their laptops, and other places, which is just not being utilized. There is so much of that already that it should eventually reach the point where if you were buying new hard drives for the purpose of farming, it would lose you money.

More Secure?

Besides reducing electricity usage, Cohen also claims that Chia cryptocurrency is relatively more secure compared to bitcoin.

bittorrent
Bittorrent’s creator is developing a new cryptocurrency.

According to Cohen who created the BitTorrent protocol in 2001 while still a student at the University of Buffalo, though it would be monstrously expensive to purchase the resources required to attack the bitcoin network, it is possible to do it. For the Chia network, per Cohen, not so easy though:

To attack Chia you’d have to get access to more resources than the network as a whole, which will be a huge amount of resources once everyone has signed up. The cost of acquiring them upfront would be huge, higher than the cost of the ASICs you’d need to attack bitcoin, so to overwhelm the system would be much more difficult.

While the proof-of-space consensus mechanism may appear more secure on paper, it also has its own limitations and this includes the possibility of a re-mining from genesis attack occurring.

Proof-of-time

With this sort of attack, a bad actor possessing significant network resources creates a new blockchain from the ground up with the goal of switching it for the original blockchain when it gets longer. When executed perfectly the bad actor gets into a position where they can get the new blockchain accepted by the majority of nodes while also taking possession of any number of coins and/or cancelling previous transactions.

To prevent this sort of attack, Cohen has introduced the proof-of-time consensus mechanism. While this does not prevent a bad actor from rewriting years of work, they would require a lot of time to pull it off.

Though it was supposed to be launched towards the end of this year, the world will have to wait a little longer for a ‘greener’ cryptocurrency as the rollout has been pushed forward.

There are thousands of pump-and-dump groups on popular messaging apps, a study conducted by the Social Science Research Network (SSRN) revealed Dec. 18.

Pump-and-dump is the fraudulent practice of perpetrators encouraging unwitting investors to buy an asset to inflate its price artificially, and then selling it when the price gets high enough.

This practice is not new, Cointelegraph having reported last year about Telegram groups organizing pump-and-dumps. The newly published data, however, “suggest that [the pump-and-dump] phenomenon is widespread and often quite profitable.”

According to an article on the study, published by Bloomberg Dec. 19, the researchers have identified 4,818 pump-and-dump attempts between January and July this year, studying data scraped from messaging platforms Telegram and Discord.

The academics admit that while the pump-and-dump schemes reviewed by them were conducted in a similar manner to those that already took place in the past, “the recent explosion of nearly 2,000 cryptocurrencies in a largely unregulated environment has greatly expanded the scope for abuse.”

The paper notes that “pumping obscure coins (with low volume) is much more profitable than pumping the dominant coins in the ecosystem,” but at the same time “Bitcoin is not immune from the pump-and-dump phenomenon.” The report has managed to identify 76 Bitcoin (BTC) pump-and-dump groups on Telegram and six on Discord.

As Cointelegraph reported this month, two bills addressing crypto market manipulation, dubbed “The Virtual Currency Consumer Protection Act of 2018” and “The U.S. Virtual Currency Market and Regulatory Competitiveness Act of 2018,” compiled in mid-November, are set to go before the United States House of Representatives.

The world’s second-largest stock exchange, NASDAQ, said in November that its market surveillance technology can “stamp out manipulation” in crypto markets. The first NASDAQ’s crypto client who adopted its surveillance system is Gemini, the crypto exchange owned by the Winklevoss twins.

A supposed Bitcoin (BTC) millionaire has been arrested in Hong Kong after “making it rain cash” on the streets, local English-language news outlet the Shanghaiist reported on Dec. 17.

On Sunday, a swathe of 100-Hong Kong dollar bills were thrown off a roof in Sham Shui Po, one of the poorest Hong Kong neighborhoods. Wong Ching-kit, a local cryptocurrency enthusiast, purported Bitcoin millionaire, and entrepreneur who owns the Epoch Cryptocurrency website, is reportedly believed to be responsible for the stunt.

In a video posted on Epoch’s Facebook page, he is seen asking “does anyone believe that money can fall from the sky?” before money starts falling from a high building behind him.

The description of the video details a competition wherein participants can allegedly win large cash prizes. In another video Ching-kit reportedly describes himself inside a luxury car as some kind of “god” that “steals from the rich and gives to the poor.”

According to Shanghaiist, the man was subsequently arrested by local police, reportedly before performing another publicity stunt. Shanghaiist reports that he was detained for “disorderly conduct in a public place” while live-streaming with a stack of cash in his hand.

Leo Weese, a member of the local crypto community, tweeted that Ching-kit is not a Bitcoin millionaire but is instead “running a pyramid-like scheme.” The police reportedly claim to have only recovered 6,000 Hong Kong dollars ($767) while “a popular Twitter post claims, unreasonably, that ‘100’s of millions of HKD’ was dropped from the rooftop.”

In May 2018, organizers of a blockchain conference in China were subjected to harsh criticism after they arranged a performance including a Mao Zedong impersonator. An actor dressed in a grey Mao suit gave a speech in the style of the Chairman, wishing success to the audience in an accent from Mao’s birth province of Hunan, declaring:

“You are worthy of being called the great sons and daughters of the Chinese nation, and I thank you in the name of Mao Zedong.”

The organizers reportedly broke a law prohibiting the use of the image of any past or present leader in promotional activities and television advertisements.

Earlier that same month, a Ukrainian initial coin offering (ICO) publicity stunt on Mount Everest resulted in the death of a sherpa. Social network ASKfm sponsored “crypto enthusiasts” to climb Mount Everest and place a Ledger wallet holding 500,000 in ASKfm tokens at the peak. The sherpa died during the descent.

Emotions were high during bitcoin’s block size debate (each side believing bitcoin would be damaged by the other’s triumph), and they’re high again in this year’s bear market. People are once again listening to the fortune tellers, who shape their crypto outlook on market sentiment, and while there are many that signal allegiance to the cause, some are just here for the quick rewards, both social and monetary.

It disappoints me to see the toxicity in this small cryptocurrency community, but it doesn’t surprise me.

Specifically on Crypto Twitter, it’s the environment itself that rewards the group-think we’re seeing. Previously independent thinkers are rewarded for conforming and are punished for their dissent. While it’s easier to resist threats in groups, it’s harder to create and progress without being open-minded. We see similar patterns in politics and even in debates about nutrition.

All said, I must say that it is my experience that the Twitter toxicity does not transfer to offline interactions. I have met many bitcoiners from both sides of the block, and I can’t recall one time I felt any toxicity in person. In fact, the opposite is the truth, it’s always a treat. I would mention names, but I don’t want to blow their tough-guy covers.

To quote Ian Mackaye of Fugazi, the tough guys are all “ice cream-eating motherfuckers.” I mean that in the fondest of ways.

Instead of checking the daily graphs, it would better serve most crypto-enthusiasts to revel in cypherpunk writings such as Tim May’s Crypto Anarchist Manifesto and Wei Dai’s b-money paper. Both are great reminders of why we’re here in the first place. (If you’re going to look at a graph, make it the BTC:USD logarithmic graph. It has the best chance of predicting the future.)

Bitcoin is activism, not a get rich quick scheme or a startup platform. The point of bitcoin is to regulate bad laws and to democratize bad policies by way of circumventing harmful enforcement.

Any system, software or hardware, blockchain-based or otherwise, that contributes to these goals is worth paying attention to.

Equally, any software or hardware projects that fail in this manner are only of interest to me once they amend their fragility. In this regard, decentralized exchanges and ICOs are worthless in their current form, but DEX or ICO v2.0 or v3.0 may end up being decentralized and powerful tools for preventing oppression in all of its forms.

Go Gig (and Boring)

In 2012, my brother Josh and I printed up bitcoin postcards to give out at regional Students for Liberty events all over the East Coast. At the time, it was mostly the Libertarians embracing the infant technology and this was our activism.

For the International Students for Liberty Conference in early 2013, we decided to do something a bit wilder, we wanted to show these youngsters how bitcoin works. We built a little orange box that accepted cash notes and sent out bitcoin transactions. Not only was it a huge hit at the conference, it reached social media and we started getting interest from media and potential buyers.

This was our chance to take our passion for bitcoin to the next level. We founded Lamassu and started manufacturing bitcoin ATMs, a machine we like to now call “cryptomats.”

Fast forward almost six years and we’re still going strong, still advocating bitcoin and there’s a booming industry making machines that help people buy and sell bitcoin. From the get-go, our business has always been more about activism than pure short-term profit. The business decisions we make are a mix of what we need to do to succeed and how to stay in line with our techno-libertarian ideals of privacy and decentralization.

Our main goal has always been to introduce as many people to cryptocurrencies as possible. And so our software is free, open source and unlicensed. We don’t charge cryptomat operators any fees for machine usage, and they host their own servers. End-users who use the machines never have their coins stored for them by operators, but are required to actually use bitcoin to get it.

As a whole, the cryptomat industry is quite unlike others in the cryptocurrency ecosystem. There’s been very little drama of late.

We’ve seen healthy, steady growth. And the field is made of quality companies, such as our main competitors Genesis and General Bytes, that have endured radical bear and bull markets. All these are very important for the ecosystem, yet perhaps a bit mundane in terms of the news cycle. No ICOs, no mass hacks and the companies involved have at best millions worth of revenue, not billions.

But at the same time, I feel it’s the kind of boring the cryptoverse needs. Hundreds of thousands of ordinary people around the world are using cryptomats every month to get small amounts of bitcoin or other cryptocurrencies directly to their wallets. No banks, no third party custody, no waiting.

It’s still the easiest way for a first time user to get crypto, and the more cryptomats there are in the world, the more useful and reliable they become. Inch by inch, row by row.

BUIDLers on the Roof

The hardest part for bitcoin was getting to $0.10.

The exponential growth since has become the norm and would take something extraordinary to derail. As such, we have to think about what happens when a growing population of the world starts owning bitcoin. Will the next financial crisis be the one that pushes bitcoin to the mainstream? What if this actually does happen, but there’s still no good user interface to protect people from losing, misusing and failing to protect their funds? Will they end up trusting people to help them?

For me, this is still the biggest question in crypto. I don’t doubt the success of bitcoin and other key cryptocurrencies, but I’m concerned things will get messy when the central banks run out of tricks.

At Lamassu, we have been keeping our heads down, working to improve our corner of the still unsolved UI problem of crypto. We’ve been aggressively hiring coders and customer support staff and expanding our manufacturing facilities.

We have fierce competition, but it’s one of mutual respect. I know our competitors are doing it for the same reasons we are, a deep rooted ideology with bitcoin at its core, to free money and markets from powerful middlemen.

The whole point of bitcoin is for people to help themselves, but it’s our jobs as proponents to make that easy. The sooner people can actually use, store, and secure their own coins, the safer they’ll be when the bank runs hit. Lest we build skyscrapers of blockchains, with no elevators in which to ascend them.

Finnish tax authorities have handed over information on 2,700 bitcoin traders to its Danish counterpart, Skattestyrelsen (SKAT).

According to a press release, the traders used an undisclosed Finnish exchange to collectively purchase and sell some $15.65 million worth of bitcoin (102.7 million kronor) between 2015 and 2017. A handful of these investors traded amounts between $1,105 and $110,450 (10,000 to 1,000,000 kronor), while the overwhelming majority traded an amount equal to or less than $1,105. Very few traded amounts over $110,450.

“Right now we are identifying the individual citizens … If something does not match, we will contact them and ask for more information,” SKAT tax director Karin Bergen said in a statement.

“This is probably just the tip of the iceberg. Although it is a relatively small bitcoin exchange, the information is a very valuable source, which clearly shows trends and patterns in the area. The knowledge we gain about data mining, segments and methods in general will make us wiser in the area and benefit from our guidance and control work,” Bergen continued.

Bitcoin is a taxable asset under Denmark’s 1903 Tax Act, which requires that taxes be paid on any goods purchased and resold for profit, and it is subject to a 53 percent capital gains tax, a hefty sum in line with other investments.

The news calls to mind a 2016 order the IRS issued to Coinbase, which asked that the U.S.-based exchange turn over the trading records and personal information of more than 480,000 of its users.

After a 12-month legal battle Coinbase won a partial victory and recognition of its customers’ right to privacy. When the court proceedings came to a head, the original order was reduced from 480,000 customer records to 14,000 who traded above $20,000.

In 2014, the U.S. IRS declared that bitcoin was a taxable property that is subject to capital gains tax. In fact, any cryptocurrency trade, such as trading bitcoin for ether, is treated as a taxable event, something that crypto investors have grappled with ever since.

As Bitcoin approaches its 10th anniversary, its community, old and new, has begun taking stock of how a decade has come to alter or define the cryptocurrency — and what Bitcoin has done to alter or define the decade.

Ten years has invited room for undeniable change. Bitcoin has seen roughly half a dozen market cycles, spawned a secondary market of more than 2,000 altcoins and laid the foundations for a surging blockchain industry. It has evolved from the obscure interest of cypherpunks and crypto anarchists to a viable, private currency that has provided a financial lifeline to underbanked, underprivileged populations in floundering economies.

There are few voices so well equipped to reflect on the changes as Andreas Antonopoulos. One of Bitcoin’s chief evangelists and arguably its most vocal educator, Antonopoulos has spent the years following his industry entrance in 2012 traveling around the world to share his knowledge on the subject. His books, which include Mastering Bitcoin, The Internet of Money, Vol. 1 and 2 and the forthcoming Mastering Ethereum, are praised as some of the space’s most thorough and informative reads.

His impact on the space is something of a widely-recognized truth, one that has made him one of the industry’s most-respected and definitive thought leaders. While others were getting rich, he was enriching the community, reminding others that bitcoin is about much more than lambos and moon memes. A testament to his influence, the community rewarded him with donations amounting to about $1.6 million during the last bull run upon learning that he held little — if any — bitcoin.

In the following interview with Bitcoin Magazine, Antonopoulos reflects on the metamorphosis the ecosystem has undergone, the lessons learned from these myriad changes and why, after 10 years of challenge, the ethos of Bitcoin itself has doggedly persisted.

This interview is part of Bitcoin Magazine’s retrospective series for Bitcoin’s 10th anniversary. Starting from the white paper’s birthday on October 31, 2018, to Bitcoin’s launch on January 3, 2019, we’ll be publishing a series of interviews, op-eds and think pieces that reflect on where we’ve come from, where we are and where we’re going.

Bitcoin Magazine: Just going straight into it, what has changed?

Antonopoulos: So many things have changed. Where do I start?

Back in the day, when I first got involved, this was a very small community, a very tight-knit community, a very focused community. There was a lot of commonality of purpose, and it felt very tight-knit. And I remember at the time, the main thing I wanted to explain and persuade people about was that this was bigger than payments. This isn’t just PayPal; this is bigger than that. It’s not just a payment network.

And so, in order to express that, I said that it’s a platform. You’ve got to think of this not just as bitcoin but broader: the blockchain. That backfired badly. I wanted to broaden it a bit to give people vision, but what happened then, over the next three years, was that people took hold of the word “blockchain,” rammed it right over, and threw everything and the kitchen sink in there — a lot of things that have nothing to do with it. So, in four years, I came full circle and released a talk called “Blockchain vs. Bullshit,” which is my number one talk.

So are you talking about the altcoin ecosystem?

And even broader than that. The distributed ledger technology, private blockchain, bank-chain, business-as-usual, slap a word on it, “pretend it’s decentralized when it’s not” type of ecosystem. Trying to embrace, extend and diverge — derail even — this industry by hijacking it. Subsuming it completely.

At the first conferences — even the first 2013 conference I went to — the suits had shown up and it was beginning to get that vibe. By the end of 2013, when the fourth or fifth bubble happened and the price hit $1,000, that’s when the suits really descended.

So it felt like a tight-knit community and then the sharks started circling around, and they were all trying to grab a bit of this grand phenomenon and monetize your influence. And there was all of this shilly, shitty, disengenuous, fake “Hey! I’ve got a project. We’re going to revolutionize real estate, we’re going to revolutionize exchanges, we’re going to revolutionize medicine.” And most of it’s bullshit. Most of it is completely naked profiteering.

So I had to turn it around and refocus it, try to figure out what is real, what is the real “killer app,” what are the real things that are happening.

And did you come to the conclusion that it’s bitcoin?

It’s not necessarily bitcoin. It’s about decentralized money and other decentralized things. But, of course, the core is decentralization. And money is a killer app in itself, if it’s decentralized.

So that changed.

The other thing that changed was that one of the things that attracts people to this space is the fact that it gives them the feeling of belonging to this kind of adventure — that goes against the grain, that is outside the mainstream, that is niche, and a bit of feeling that we’re the underdog fighting the great forces.

But as always happens in movements like that, eventually, you get divisions within, and then you have people who are fighting as the “underdogs” against “the establishment bitcoiners.” Like suddenly, Bitcoin is establishment and people will say, “Hey, this is Bitcoin 2. This is better than Bitcoin. This is an alternative chain that solves all the problems in Bitcoin.” So then you have a fragmentation, a splitting within the Bitcoin community.

So you think the space is cannibalizing itself?

Because some people feel the need to be the underdog and to always be fighting something. That drives their personalities. So it’s funny because when what you’re fighting for is suddenly getting recognition and IBM is doing it and whatever, the people who are insiders are now a part of it.

You have to find a new machine to rage against.

Exactly. And that’s what’s happened in the crypto space. So now there’s all this fragmentation, all these internal battles, both within Bitcoin but also between Bitcoin and other systems and between themselves.

No sooner had Ethereum raised its fist, like, “We will replace Bitcoin and the flippening will happen,” then, before you know it, they were looking over their shoulder because there are five wannabe-Ethereums that are like, “Ethereum’s the old guard and we want to be the solution.”

So it’s the Trotsky phenomenon. The counterrevolution starts within weeks of the revolution. Some revolutionaries can never settle down. And that’s not bad: having principles, being ideological, having political conviction. A lot of people see this as aggression, kind of disingenuous behavior. But, honestly, I see a lot of these people who I’ve known for the past four years who are raging against the new machine. I think they’re acting mostly in good faith.

To play on these dualities you’ve been talking about: It’s fighting a two-front war, in some regards. It’s fighting against a front of outsiders and it’s kind of fighting a war against itself.

Yes, which is typical; it’s human behavior. Ironically, to the outsiders, we’re all one bunch of weirdos. They don’t differentiate between the more business-friendly weirdos or the less business-friendly weirdos. We’re all weirdos. Because the system exists, it’s been running for hundreds of years and you’re not going to come and change it.

Of course, that’s what every system that got changed says. There is a simple way out of this: At some point, there is going to be a massive backlash. At some point, “the system” that we’re disrupting is going to fight back hard, but it hasn’t happened yet.

The funny thing is that, the day the system starts fighting back, those people will not differentiate between bitcoin cash and bitcoin, bitcoin and ethereum, ethereum and ripple, monero and zcash — as far as they’re concerned, we’re all a bunch of weirdo anarchists who are trying to help terrorists and drug lords defeat the financial order. They’re not going to differentiate. They’re going to backlash against all of us, and that’s going to be the great uniting moment.

As soon as we get attacked from the outside, everyone will circle the wagons and everyone will be friends again. You see this in divided countries, where all they need is an external enemy to refocus, and suddenly they’re all on the same side.

Talking about these forces from without, how have you seen governments respond to the space, especially in North America? Are we seeing any growth in the right direction or is it just pomp and pageantry?

I don’t think it matters. It’s all pomp and pageantry. They want to appear hip and relevant and “of the time” and be pro-business or pro-innovation — and it’s all bullshit. Because, first of all, these systems are not yet having an effect that’s big enough to start disrupting established industries, at which point we’re going to start seeing governments realign, knowing where their bread is buttered, knowing who is paying the bills. And we’re not the ones paying the bills, right?

At that point, we’re going to see some overt hostility and disinformation against us. For the time being, they’re just playing the part of magnanimous regulators who are sober and considerate, but not hostile to innovation because they want the jobs. It’s all pageantry. It doesn’t mean anything.

And so, in the U.S., you’ve got an incredible amount of fragmentation — because you’ve got 15 federal regulators and then 50 state regulators and half of them are screaming, “I don’t want this, you regulate it!” and the other half are screaming, “It’s our domain! Step out!” And the same thing is happening across the world.

Is there any government that you think is doing a good job?

Does it really matter in the end? This isn’t the domain of government. The fundamental invention of governance by algorithm in a decentralized system, the first thing it disrupts, is regulatory compliance.

It disrupts regulators before anyone else because it says, “We’re regulating this way, so we don’t need to be regulated by institution, by committee, by whatever.” And people think that when I say things like that I’m questioning their authority. I’m not questioning their authority; they have all the authority in the world. I’m questioning their ability to enforce their authority.

And you’re questioning whether or not there’s even a place to enforce that authority.

Right. Exactly.

So, in your opinion, the space would be better off left alone to its own devices. You don’t need to try to find something to regulate with this.

Exactly. It’s already regulated; it’s regulated by math. It’s regulated in the most deterministic, predictable and highly-defined manner. This is a system in which the fact that it doesn’t have rulers doesn’t mean it doesn’t have rules. It has a lot of rules, and those rules are very specific.

What it doesn’t have is the ambiguity of human regulation. And people need to realize that the reason we don’t need to regulate cryptocurrencies is not because they don’t need regulation; it’s because they’re already regulated — regulated by algorithm.

If you want algorithmic regulation, this is the space to play. If you want human regulation, we already have that. That’s not new, and, in fact, that’s what we’re trying to fix.

I look at it in a very simple way: Most of the institutions we have for governance today are fundamentally creations of the industrialized era, the industrial revolution. That means they’re creations of the late 18th and 19th centuries. And they don’t scale anymore for a planet in which the shit that was spewing in the atmosphere in one place causes a hurricane across the ocean in another place.

We’re too interconnected to govern as little fiefdoms in separate jurisdictions with human governance and decision making. If you try to take the industrial era governance models and you try to simply scale them up and make bigger agglomerations — the European Union, the Russian Federation, the United States — very soon they become either corrupted, indifferent, incompetent or too slow to make decisions because they can’t scale to that size.

But the problems we’re facing require them not only to scale to that size but to scale to a transnational size. Which is horrifying because then it’d be one world government, and if my national government is not already working, then how bad is a transnational government going to be? We need a different model for governance. The industrial revolution will no longer fit our planet. So, that’s how I look at these systems.

Now, once governments realize that’s the game, that this is about changing the way we do governance and offering alternatives, I think we’re going to have some very different responses, some pushback, some resistance.

One more thing: I think we overestimate how much interest governments have in any of this. Their problems are so big and they’re so not related to what we’re doing. The dollar has its own problems, which are enormous.

That’s a good transition into another question. A lot of people — and they’re mainly retail investors, mind you — are looking for the next spark for the next bull run. People point to the ETF and say “Once we get that, we’ll get institutional investors and this will flood capital into the market.”

Be careful what you wish for.

This is exactly my point. You know, the majority of gold traded on the market today isn’t actual gold — it’s certificates. It’s fractional reserve lending. And with ETFs and bitcoin futures, you’re inviting the same thing.

You’re diluting the value.

Right. You’re trading contracts. So, is something like an ETF or bitcoin futures too antithetical to Bitcoin’s ethos?

It’s completely antithetical. Because what you’re talking about is centralized custodian holders who give you a fraction of the rights that having your own keys gives you. You have exposure to the monetary fluctuation. You don’t have any of the autonomy, empowerment, voting ability, participation ability, authority, and independent validation of transactions that you have as someone who holds the keys and uses bitcoin or any other cryptocurrency directly. This is a direct participation system.

When you’re investing in a secondary market like an ETF, you’re not a direct participant in this very direct participation system. You’re a second-hand citizen. You’re a second or third class citizen. You’re only getting one part of the rainbow of attributes of this system and capabilities.

And who has the rest? The custodian has the rest. The custodian now gets to decide which fork is the real fork — not you. The custodian gets to decide how to vote on the next soft fork decision — not you. The custodian gets to decide whether you want to switch to a different cryptocurrency or not or how to disperse them. All of these things dilute the value proposition.

Now, that doesn’t mean they damage cryptocurrency.

If this was about investment, then the idea of bringing in more investors would make the thing better. But this isn’t about investment. This isn’t an investment; it’s a technology. And bringing more people into a technology, especially when that technology isn’t ready for another influx of people, it doesn’t make it better; it makes it worse (temporarily). Because all of the problems are magnified by a whole influx of newbies.

When AOL joined the internet, AOL called it a “golden moment.” The internet called it “Black Monday,” because they dumped 3 million noobs right into the middle of our nicely defined internet, which had “netiquette” and common standards of behavior and useful applications — all of which broke because it wasn’t ready for the scale of people or for the new culture of people who are not trained in the culture.

In a recent talk, you say the idea of a “personal bank” looks ridiculous right now (in hindsight) because of gaps in user experience, usability and technical gaps. And you said complexity is the greatest user vulnerability. But once we have more intuitive designs and secure applications, then we will see the adoption we’ve been asking for.

It’s not so much that we’ll see adoption. At that point, it’ll be possible to help the people who actually need this technology. We have to remember: Not everyone needs this. There is 5-10 percent of the human population that already has representative democracy, working institutions and working banks. We’re the privileged ones — we’re not the primary focus. We need it long term because our democracy is eroding faster than we can save it, but we don’t need it in the short term to buy coffee.

So, in the long term, what do developers and educators need to do? What does the community need to do to guide cryptocurrency through this growth spurt?

First, recognize that not everybody needs it and don’t try to sell to people who don’t need it. Not everybody is ready or should be part of this, right? I mean, I know I’ve evangelized a whole bunch of people. My friends got involved. And maybe they made some investments. Maybe they’re happy today, maybe they’re not happy today with me. That’s a double-edged sword.

But the real impact of this technology is on the other 6 billion: the unbanked, the underbanked, the politically oppressed. And it’s using this as a tool that magnifies personal power, especially defensive power, to help people defend themselves against large, corrupt institutions, whether state institutions or private institutions. That’s the power: It’s giving people freedom.

Now, not everybody needs that right now, and we’re not ready to just bring a billion people on board a system that isn’t ready to scale.

You said that not everyone needs it. Do you think that there will be a time when everyone is using cryptocurrency?

Absolutely.

Do you think that will come in the form of private currencies or nationally backed currencies?

All of the above. Every form you can imagine: nationally backed, private-backed, government-issued, privately issued. I think that, fundamentally, nationally issued cryptocurrencies are business-as-usual. They don’t change the fundamental problem. The fundamental problem is centralized control and no government is going to issue a cryptocurrency that is not centralized. So they are just moving around the deck chairs.

And they’re certainly not going to release one that has a cap on supply.

Right. Exactly. Or one where they can’t censor or control borders and do verification of identity. Because surveillance is more important.

So those things will happen. They’re just not particularly interesting. The thing that is interesting is the open, borderless, neutral, censorship-resistant, global system or systems that give people choices even if their own government doesn’t want them to happen.

The whole borderless thing always takes me back to Marxism, this idea that Bitcoin is borderless, it denies centralized control, and it gives purchasing power and voting power back to the people.

I think people tend to reflect onto Bitcoin their preconceived politics. And that’s because it has this mirror-like capability to be what you want it to be or look like what you want it to be. In the end, it’s not Marxist or capitalist. It’s crypto. And that’s interesting because both Marxism and capitalism and all of the systems we have today were invented in the late 19th century. They are systems that are fundamentally born of the industrial revolution.

Bitcoin is post-modern. This is something that doesn’t fit into any of the existing buckets because we’re making new buckets. Because this is redefining governance and political systems. So the fact that to some people it looks Marxist, to some people it looks capitalist, to some people it looks Libertarian, to some people it looks anarchist is because they are trying to slap one of their traditional labels on it.

Your frame of reference has to be reinvented in order to label this thing. Is it an asset, is it a bond, is it a currency, is it stock? It’s a cryptocurrency. And what is that? It’s the new thing that isn’t any of those but all of those simultaneously. It has characteristics of precious metals, bonds, stocks, currencies, contracts — it has all of those characteristics. But it’s not any one of those things.

Blockchain startup Civic has appointed Apple veteran Phillip Shoemaker as executive director of Identity.com, its Ethereum (ETH) blockchain-based, decentralized identity platform. The news was announced in a press release published Dec. 13.

Identity.com is Civic’s open-source, decentralized and tokenized digital identity ecosystem that uses smart contracts to provide on-demand, blockchain-based identity validation.

Shoemaker joins the initiative after working over seven years as senior director of the Apple App Store Review team, which he reportedly built “from the ground up, taking his team from 4 to over 300 employees,” under the company leadership of founder Steve Jobs. Since leaving Apple in 2016, he has worked advising multiple blockchain projects and startups.

The company has said the appointment comes at a “key time” as it prepares to add external organizations to its ecosystem, “both as collaborators and participants.”

According to the press release, Shoemaker’s responsibilities will include managing identity.com’s objectives and team growth, “defining the parameters around the Civic relationship,” and taking charge of establishing a “governance structure” for the ecosystem that prioritizes “trust and transparency.”

Shoemaker’s other past experiences include a role as developer relations director at the open-source, neuroscientific software engineering firm Numenta, which has been working to reverse-engineer the neocortex to study how the brain works and evolve approaches to enhancing machine intelligence.

As previously reported, Shoemaker is not the only Apple veteran to embrace blockchain innovation; in October, the tech giant’s co-founder Steve Wozniak was announced as a co-founder of recently launched blockchain-focused venture capital fund EQUI Global, having made a solid endorsement of Bitcoin this summer, arguing that it is the only “pure digital gold.”

In October, Civic announced that credit report repair service Progrexion, along with its subbrands law firm Lexington Law and consumer advice portal Credit.com were set to use its blockchain identity solution, with the Civic (CVC) native token surging 22 percent in value following the news.

As of press time, CVC is trading at $0.050, down just over 6 percent on the day, according to CoinMarketCap.

A suspected scam which threatens to blow up buildings unless recipients pay a Bitcoin (BTC) ransom caught the attention of the United States’ government Dec. 13.

The scam, which centers on anonymous emails demanding payment of $20,000 in Bitcoin or face a “mercenary” detonating a device in “your building,” has appeared throughout the world.

Now, the U.S. National Cybersecurity and Communications Integration Center (NCCIC) opted to release dedicated advice to victims, advising the only action necessary on receipt of an email was to inform the FBI.

The NCCIC is “aware of a worldwide email campaign targeting businesses and organizations with bomb threats,” it said.

“The emails claim that a device will detonate unless a ransom in Bitcoin is paid.”

Prior to the government acknowledgment, media sources had reported on the scheme, including cybersecurity publication and research outlet Krebs On Security, which published the full text of the email.

“My mercenary keeps the building under the control. If he notices any unusual behavior or emergency he will blow up the bomb,” an excerpt reads.

“I can withdraw my mercenary if you pay. You pay me 20.000 $ in Bitcoin and the bomb will not explode, but don’t try to cheat -I warrant you that I will withdraw my mercenary only after 3 confirmations in blockchain network.”

Multiple campaigns continue to target unwitting internet users both within and outside the cryptocurrency community.

As Cointelegraph reported, 2018 has seen an almost 500 percent rise in the number of flagged hacking schemes known as “cryptojacking” — the process by which a device is commandeered to mine or steal cryptocurrency.

Phishing scams — hackers masquerading as known entities to trick users into transferring coins to a fake address — have spread from emails to social media platforms such as Twitter en masse this year.

Crypto exchange Binance has added Circle’s USD-pegged stablecoin USD Coin as a quote asset for several new trading pairs in its combined Stablecoin Market (USDⓈ). The exchange has announced this in an official post published Dec. 14.

USD Coin (USDC), first announced by Goldman Sachs-backed Circle this May, and released in September, is one of a host of new stablecoins notionally pegged 1:1 to a major fiat currency.

This November, Binance, currently the world’s largest crypto exchange by daily trade volume, had rebranded its Tether (USDT) Market as the combined USDⓈ market to allow for the support of more trading pairs with different stablecoins offered as a base pair.

Today’s latest development will add six new trading pairs with USDC as a quote asset: native exchange token Binance Coin (BNB/USDC), Bitcoin (BTC/USDC), Ethereum (ETH/USDC), Ripple (XRP/USDC), EOS (EOS/USDC) and Stellar (XLM/USDC). In addition, Binance is also adding a USDC trading pair with fellow stablecoin Tether.

According to the announcement, the exchange will replace and delist its former USDC/BNB and USDC/BTC trading pairs, which had just been launched mid-November.

Just ahead of Binance, major United States’ cryptocurrency exchange Coinbase had made USDC the first stablecoin available for trade on its platform in October.

With the proliferating issuance of fiat-backed stablecoins, major exchanges have stepped in to list the new coins: both OKEx and Huobi recently opted to list four USD stablecoins at once.

Earlier this week, Binance launched a collection of educational content comprising almost 500 articles in order to provide “unbiased” information about crypto and blockchain, as part of its Binance Academy initiative, which launched this summer.

According to CoinMarketCap, the exchange has seen $464,404,519 in trades over the 24 hours before press time.