One decade and $1 trillion after the debut of Bitcoin, the environmental footprint of “mining” the cryptocurrency is still hotly contested. What’s certain, however, is that the amount of electricity the process requires is growing at a breakneck speed. Each time transactions are added to Bitcoin’s digital ledger, they have to be verified by its network, which requires “miners” to devote huge quantities of computational power to solving cryptographic problems. As more miners join the network — lured by the skyrocketing value of the bitcoin they receive in exchange for their work — the puzzles get harder, requiring ever greater amounts of processing power, and thus electricity, to solve.

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US authorities on Tuesday arrested Roman Sterlingov in Los Angeles, according to court records, and charged him with laundering more than 1.2 million bitcoins—worth $336 million at the times of the payments—over the 10 years that he allegedly ran Bitcoin Fog. According to the IRS criminal investigations division, Sterlingov, a citizen of Russia and Sweden, allowed users to blend their transactions with those of others to prevent anyone examining the Bitcoin blockchain from tracing any individual’s payments. He took commissions on those transactions of 2 to 2.5 percent. In total, the IRS calculates, Sterlingov allegedly took home roughly $8 million worth of bitcoin through the service, based on exchange rates at the times of each transaction. That’s before factoring in Bitcoin’s massive appreciation over the past decade. Ironically, it appears that the 2011 transactions Sterlingov allegedly used to set up Bitcoin Fog’s server hosting are what put the IRS on his trail.

“This is yet another example of how investigators with the right tools can leverage the transparency of cryptocurrency to follow the flow of illicit funds,” says Jonathan Levin, cofounder of blockchain analysis company Chainalysis.

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Starting on May 1st, users of sourcehut’s CI service will be required to be on a paid account, a change which will affect about half of all users.1 Over the past several months, everyone in the industry who provides any kind of free CPU resources has been dealing with a massive outbreak of abuse for cryptocurrency mining. The industry has been setting up informal working groups to pool knowledge of mitigations, communicate when our platforms are being leveraged against one another, and cumulatively wasting thousands of hours of engineering time implementing measures to deal with this abuse, and responding as attackers find new ways to circumvent them.

Cryptocurrency has invented an entirely new category of internet abuse. CI services like mine are not alone in this struggle: JavaScript miners, botnets, and all kinds of other illicit cycles are being spent solving pointless math problems to make money for bad actors. Some might argue that abuse is inevitable for anyone who provides a public service — but prior to cryptocurrency, what kind of abuse would a CI platform endure? Email spam? Block port 25. Someone might try to host their website on ephemeral VMs with dynamic DNS or something, I dunno. Someone found a way of monetizing stolen CPU cycles directly, so everyone who offered free CPU cycles for legitimate use-cases is now unable to provide those services. If not for cryptocurrency, these services would still be available.

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The founder of a popular crypto exchange in Turkey has disappeared, with media reports indicating that he has fled the country with $2 billion as roughly 300,000 frustrated users have suddenly lost access to their accounts.

In Turkey, the national currency lira has been in a secular decline for nine consecutive years, urging people to take some risks in a bid to protect their savings and maybe even earn something. As a result, the recent rise of cryptocurrencies predictably attracted many investors who hoped to protect their money and possibly gain some more. But things did not go well for them as Thodex, one of the country’s largest cryptocurrency exchanges, went bust.

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$7.6 billion in crypto long positions have been liquidated over the past hour as bitcoin’s price plunged to $52,000, data from shows.

Bitcoin’s price began to trend downwards early Saturday, but the steep plunge began around 3:00 UTC on Sunday.

Bitcoin’s price dropped by more than 10% over the past hour, from $58,000 to below $52,000, during which around $4.3 billion in bitcoin long positions were liquidated.

As of the time of writing, bitcoin’s price has bounced back to around $55,000.

Overall, $9.2 billion in crypto long positions have been liquidated in the last 24 hours.

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LGBT activists, NGOs and technology companies are increasingly looking to blockchain technologies as an effective way to provide tools for sexual minorities.

Turkey’s central bank banned the use of cryptocurrencies and crypto assets to purchase goods and services, citing possible “irreparable” damage and significant transaction risks in a move that cooled global bitcoin prices.

In legislation published in the Official Gazette on Friday, the central bank said cryptocurrencies and other such digital assets based on distributed ledger technology could not be used, directly or indirectly, as an instrument of payment.

Hands on the wheel, eyes squinting against the winter sun, Lauren Miehe eases his Land Rover down the main drag and tells me how he used to spot promising sites to build a bitcoin mine, back in 2013, when he was a freshly arrived techie from Seattle and had just discovered this sleepy rural community.

The attraction then, as now, was the Columbia River, which we can glimpse a few blocks to our left. Bitcoin mining — the complex process in which computers solve a complicated math puzzle to win a stack of virtual currency — uses an inordinate amount of electricity, and thanks to five hydroelectric dams that straddle this stretch of the river, about three hours east of Seattle, miners could buy that power more cheaply here than anywhere else in the nation. Long before locals had even heard the words “cryptocurrency” or “blockchain,” Miehe and his peers realized that this semi-arid agricultural region known as the Mid-Columbia Basin was the best place to mine bitcoin in America — and maybe the world.

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Christian Bale from “The Big Short”

「The US government is inviting inflation with its MMT-tinged policies. Brisk Debt/GDP, M2 increases while retail sales, PMI stage V recovery. Trillions more stimulus & re-opening to boost demand as employee and supply chain costs skyrocket. #ParadigmShift

“The life of the inflation in its ripening stage was a paradox which had its own unmistakable characteristics.One was the great wealth, at least of those favored by the boom..Many great fortunes sprang up overnight…The cities, had an aimless and wanton youth”

“Prices in Germany were steady, and both business and the stock market were booming. The exchange rate of the mark against the dollar and other currencies actually rose for a time, and the mark was momentarily the strongest currency in the world” on inflation’s eve.

“Side by side with the wealth were the pockets of poverty. Greater numbers of people remained on the outside of the easy money, looking in but not able to enter. The crime rate soared.”

“Accounts of the time tell of a progressive demoralization which crept over the common people, compounded of their weariness with the breakneck pace, to no visible purpose, and their fears from watching their own precarious positions slip while others grew so conspicuously rich.”

“Almost any kind of business could make money. Business failures and bankruptcies became few. The boom suspended the normal processes of natural selection by which the nonessential and ineffective otherwise would have been culled out.”

“Speculation alone, while adding nothing to Germany’s wealth, became one of its largest activities. The fever to join in turning a quick mark infected nearly all classes..Everyone from the elevator operator up was playing the market.”

“The volumes of turnover in securities on the Berlin Bourse became so high that the financial industry could not keep up with the paperwork…and the Bourse was obliged to close several days a week to work off the backlog” #robinhooddown

“all the marks that existed in the world in the summer of 1922 were not worth enough, by November of 1923, to buy a single newspaper or a tram ticket. That was the spectacular part of the collapse, but most of the real loss in money wealth had been suffered much earlier.”

“Throughout these years the structure was quietly building itself up for the blow. Germany’s #inflationcycle ran not for a year but for nine years, representing eight years of gestation and only one year of #collapse.” Written in 1974 re: 1914-1923. 2010-2021: Gestation.」

I dunno about all this, BUT it sure makes you wonder what WW2 would have been like if Bitcoin were around.

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Every ten years or so, there’s a paradigm shift with the Internet. First, it was the transition from portal sites to Google. In the 2010s, social networks not only flipped how we interacted with each other, but how we consumed content. Could cryptomedia and NFTs indicate the next wave of how we consider and use the Internet? One where everyone, not just artists, stand to benefit as far as property ownership and profitability are concerned?

In recent history the mining, petroleum, and nuclear industries have all had their share of environmental disasters. These are household names that every school child learns: Chernobyl. Fukushima. Deepwater. Kingston. Valdez. However you may not know that as you read this, the tech industry is having it’s own environmental disaster moment and you may have heard its name: Bitcoin.

For those of you living in a monastery for the last decade, bitcoin is a computer protocol that provides a speculative digital pseudo-asset that is traded between individuals around the world. It is a system that aims to transcend borders, banks and laws. It’s notoriously difficult to frame bitcoin in traditional concepts because it defies many traditional terms. It’s not a currency, it’s not a payment system, it’s barely used to transact, it doesn’t support an economy, it’s not correlated to anything, and it’s unclear if there is any meaningful way to value it.

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Crypto protocols are meant to be governed by decentralized communities of stakeholders. Not because it’s more efficient, or important for ideological reasons, but because it’s necessary to unlock their core value proposition: that the underlying protocols will continue to run as designed, and will remain open to anyone who wants to use or build on them, without having the rules shift under their feet. 

Bitcoin is the original embodiment of these concepts, creating the first internet-native money at scale. But they are equally applicable (and valuable) to other types of open financial primitives as well, including things like borrowinglendingtrading, and so on. Though the specific application may differ, the need for decentralized governance remains the same.

For crypto startups, transitions towards community governance are complicated, and raise difficult questions around ongoing development, voter participation, and incentive alignment between stakeholders. But they are ultimately necessary in order for the protocols to transcend their original developers and provide enduring value as open financial infrastructure. 

As committed stakeholders in many of these networks, we wanted to briefly expand on how we at a16z think about crypto governance, and how we see our role in it going forward.

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I recently saw an interesting interview with former Canadian prime minister Stephan Harper1, where the topic of Bitcoin briefly came up, and I noticed that he referred to Bitcoin as a “private digital currency”.

I think it’s wrong to call Bitcoin a private currency. In fact, I view Bitcoin as a type of commons, a digital commons.

The word “commons” comes from the Latin communis, the same root that gives us “commoner”, “community”, “communism” and “commune”, and describes something “belonging to all, owned or used jointly, general, of a public nature or character”2.

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Very fitting! This is exactly what one would expect Steven Seagal to get into.

Actor Steven Seagal was hired to promote the company, also known as “Bitcoiin2Gen” or “B2G,” and was ordered last year by the Securities and Exchange Commission to pay a $157,000 penalty, without admitting to any crimes.

DeMarr, on the other hand, made his first appearance in court on Feb. 1 to face one charge of conspiracy to commit securities fraud.

Have been reading “The Fabric of Reality” for several months now It takes me awhile to digest things, and I have a 2 year old, but also I can’t sleep after I read a chapter, and I can’t stop once I start (so I tend to tackle it when I feel up to it).

Last night I finished the “Quantum Computers” chapter. Like the previous chapters it is mind blowing. I already knew a little bit about quantum computers, but there was a revelation that just blew me away. Here’s my layman’s (probably incorrect in some way) takeaway.

There are an infinite amount of you in the multi-verse, but you just can’t interact with them. In the infinite amount of you, you just need to be able to interact with the ones that are doing the same thing as you to, quantum computers allow you to do that. They allow you to use interference that differentiates the subtle differences universe (like a proton interacting with a half-silvered mirror in one universe, and not in the other) to process computation across universes.

Here’s the chapter:

But, the point is that it stands to be falsified that there are an infinite amount of you that you can interact with through a computer. You can leverage an infinite amount of yourself to solve problems.

It also has profound implications for the internet (as you’ve probably heard before)—because the internet relies on cryptography that uses classical model physics for security. All private data on computers is protected behind a few large easy to multiply, but hard to factor numbers. It’s highly probable that in the next decade or so Shor’s algorithm will be used to factor some big number in minutes that would have taken all the classical computers on earth a million years.

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I initially covered Bitcoin in an article in autumn 2017, and was neutral-to-mildly-bearish for the intermediate term, and took no position.

The technology was well-conceived, but I had concerns about euphoric sentiment and market dilution. I neither claimed that it had to go lower, nor viewed it bullishly, and merely stepped aside to keep watching.

However, I turned bullish on Bitcoin in April 2020 in my research service at about $6,900/BTC and went long. It had indeed underperformed many other asset classes from autumn 2017 into spring 2020, but from that point, a variety of factors turned strongly in its favor. I then wrote a public article about it in July when it was at $9,200/BTC, further elaborating on why I am bullish on Bitcoin….

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In the modern nation state, courts (“justice”) operate with the threat of violence. The exact way a dispute is settled varies (jury, single judge, etc.), but the “finality” of the resolution they provide is based on the fact that the state asserts the final say, and if you don’t agree, it doesn’t matter, because they have men with guns. Importantly, they don’t just have some men with guns (that’s something you might have, too), they have an overwhelming number of men and increasingly large guns depending on how much you don’t want to accept their say.

If you are thinking “that’s a stupidly over-simplified way of thinking about modern justice systems”, then that’s fine; a lot of what follows is precisely about the finesse around this simplified view of the world.

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Beginning its current glorious bull run at the start of the second week of October when it was valued at $10,500, Bitcoin has today passed the $30k benchmark on a swift and unimpeded rise. Key milestones gave its network an early Christmas, with the price marching from $21,000 on December 16 to over $25,000 by boxing day.


Discussions about cryptocurrency.

Created on Oct 20, 2020
By @gurlic