Your Cryptocurrency Newsletter for February 06, 2021

If you are interested in cryptocurrencies, this newsletter is for you. [img]( [img]( [FeedBinary Newsletter]( Sponsored Content [Why India Should Buy Bitcoin — Balaji S. Srinivasan]( India should launch a digital rupee – and back it with digital gold. More broadly, India should champion decentralized cryptocurrencies like Bitcoin and Ethereum to safeguard national security, prevent deplatforming, attract international capital, strengthen monetary policy, deter financial fraud, accelerate technological development, and hasten India’s ascendance as a global power. We make this case below. But if you haven’t been following cryptocurrency closely, or India’s proposed ban, don’t worry. Our first step is to review the basics for folks new to the space before explaining why Prime Minister Modi should buy Bitcoin rather than ban Bitcoin, and how India can use crypto to regain its rightful place on the world stage. 1. Crypto is now a Trillion Dollar Industry Bitcoin was invented in 2009 by a pseudonymous engineer named Satoshi Nakamoto. His creation solved an unsolved problem in computer science and created a trillion dollar industry. Yes, you read that right: trillion. In June 2010 the value of all cryptocurrency worldwide was $0. As of today, it’s $1.1 trillion. Bitcoin alone is worth more than $600 billion. That’s more valuable than any of the tech unicorns founded in the last decade, more valuable than Uber, Airbnb, Stripe, and Slack combined. So in retrospect, Bitcoin was the most economically important technological innovation of the 2010s, like the internet was to the 90s. And like all great innovations, it’s led to the creation of remarkably valuable companies (like Coinbase, Binance, and Kraken) and technologies (like Ethereum and Zcash). But people still don’t get how large the space is. Let’s give some more numbers. - Ethereum, the number two cryptocurrency, is worth >$100B. It extends the concepts introduced in Bitcoin to permit so-called smart contracts, which allow engineers to write programs that can send and receive money. - Ethereum has given birth to an entire sector called decentralized finance (“defi”) which is to traditional finance (“tradfi”) what the internet was to paper-based media. Almost $30B in assets are now held in defi for the purpose of earning interest, taking out loans, or trading assets. - The Ethereum and Bitcoin networks were used to send >$1T in volume in 2020, more than PayPal. - So-called “stablecoins” built on Ethereum have allowed the transfer of stable US dollar equivalents to anyone in the world; they too transact billions of dollars in volume every 24 hours. - The website coinmarketcap.com has a higher Alexa ranking (#324 at last check) than the website wsj.com (last ranked as #440). In other words, a crypto website that lists the price of cryptocurrencies is more popular than the Wall Street Journal’s official website! And that flip first occurred in 2017. - The research paper describing Bitcoin has been cited at least 13,000 times by professors at places like Stanford, Harvard, and MIT, and cryptocurrencies have stimulated innovations in applied cryptography and distributed computing. - More than five billion dollars in venture capital has been invested in cryptocurrency and blockchain startups by the world’s top tech investors, including Marc Andreessen’s Andreessen Horowitz, Peter Thiel’s Founders Fund, and Fred Wilson’s Union Square Ventures. Thousands, millions, billions, trillions – the numbers start to stun after a while. So here’s some qualitative commentary from prominent people and institutions to supplement the quantitative barrage. - Elon Musk: The world’s richest man has said that Bitcoin is “inevitable” and changed his Twitter bio to simply “#Bitcoin”. - The IMF: Cryptocurrency could “completely change the way we sell, buy, save, invest, and pay our bills” and “could be the next step in the evolution of money.” - The World Bank: “Cryptocurrencies and blockchain protocols are part of a tidal wave of new technologies that is changing the way production and commerce are organized.” - Larry Summers, Former US Treasury Secretary: “Bitcoin is here to stay” and the “financial industry will adopt the technology underpinning bitcoin.” At this point you should realize that this crypto thing is kind of a big deal. And that there’s an enormous gap between the economic impact of crypto versus its portrayal in the popular press, and that it might seem a little hasty to cut India off from an emerging trillion dollar industry. But it’s actually even more important than that. Because crypto isn’t just an economic sector, it’s a civilizational advance on par with the internet, and – if embraced rather than banned – can actually solve many of the issues facing modern India. Starting with national security. 2. National Security: Crypto means India can’t be deplatformed As noted above, a recent bill introduced in the Indian parliament proposes a ban of cryptocurrencies like Bitcoin in favor of a digital rupee. One of the likely justifications is to protect India’s national security. But as we’ll see, Bitcoin and allied decentralized technologies are actually essential to India’s national security. Bitcoin prevents financial deplatforming First, some definitions. A digital rupee would be a centralized currency controlled by the Reserve Bank of India (RBI), while Bitcoin and Ethereum are decentralized international cryptocurrencies that no single actor has control over. The administrators of the digital rupee at RBI would be able to issue wallets, freeze accounts, and reverse transactions. But Bitcoin is more akin to digital gold, and cannot be frozen or seized by any state. It is this property that makes Bitcoin so precious for safeguarding Indian national security. A network that cannot be shut down by any state is a network that India and its diaspora can rely upon in times of conflict. For the same reason that Germany recently repatriated 3,378 tons of gold from the United States, India should prioritize national support for digital gold as a financial rail of last resort in a situation like the 2008 financial crisis or the 2020 COVID crash. Ethereum prevents social deplatforming Similarly, for the same reason that Mexico, Germany, and France expressed concern over the deplatforming of a sitting US president and his followers by a collection of American tech companies, India should prioritize national support for decentralized platforms like Ethereum to create social networks and messaging apps that US corporations can’t shut down. Part of the solution will also be national replacements for Twitter, but non-Indians won’t be on Indian Twitter, and India will still need to get messages out to the world on neutral international platforms. That’s what crypto permits. Note that the risk of political deplatforming is not theoretical. Once you’ve banned the “most powerful man in the world”, it’s no big deal to ban anyone else. Every day brings another headline to this effect. Recall too (a) that the US already once banned then-Chief Minister Modi’s physical entry for many years and (b) that millions of Indians are currently dependent on American apps like Twitter, WhatsApp, Facebook, Gmail, PayPal, and Google Pay. Given sufficient negative press, American technology companies may ban the Indian Prime Minister or Indian citizens not just from entering the US, but from much of the internet itself. And not just from communicating over the internet, but from sending and receiving payments over US-controlled platforms like SWIFT, PayPal, or Google Pay. What could catalyze such an event? Well, America is excitable these days. A fake photo of a Brazilian rainforest fire was published in the New York Times and prompted a writer in the Atlantic to call for the invasion of Brazil. Cooler heads prevailed once the photo was revealed to be fake, but next time it’s India that may be the target of official misinformation. And digital hostilities may commence with little warning. In short, the threat of Chinese espionage against India is obvious and has already been acted upon with the TikTok ban, but the threat that arbitrary deplatforming by US corporations poses to India’s national sovereignty is in some respects even greater. Crypto fixes this, as decentralization defeats deplatforming. 3. Foreign Investment: Crypto brings capital to India A second concern often voiced as a rationale for the proposed crypto ban is that cryptocurrency will cause capital flight. But the opposite is true. After all, what do Elon Musk, Marc Andreessen, Jack Dorsey, Peter Thiel, Reid Hoffman, Naval Ravikant, Chamath Palihapitiya, and countless CEOs, founders, angels, and venture capitalists have in common? They all support Bitcoin. So do Russian and Chinese ancestry entrepreneurs like Pavel Durov and Changpeng Zhao. The value of Bitcoin is something leaders in the global tech community agree on, like the internet or open source. Estimates vary, but if and when Bitcoin hits $200,000 per BTC, my colleague Olaf Carson-Wee at Polychain Capital calculates that roughly half of the world’s billionaires will come from cryptocurrency. As such, if India bans cryptocurrency, it doesn’t just criminalize the holdings of countless innocent Indians. It repels a trillion dollars in crypto capital from coming to India in the first place. The proposed crypto ban would itself cause capital flight. And capitalist flight. Lest we forget, Indian entrepreneurs are highly mobile. Major crypto exchanges like Coinbase, Binance, and Kraken are already worth many billions of dollars; so are cryptocurrency mining companies and new digital currencies like Ethereum. All the Indian analogs to those services would happen overseas, as Indian founders are once again forced to move abroad. [Read more]( The post [Why India Should Buy Bitcoin — Balaji S. Srinivasan]( appeared first on [Feed Binary](. [Read Full Story]( ------------------ [Interest in 5 Altcoins Surging Among Traders, Reports Crypto Analytics Firm Santiment]( Crypto insights platform Santiment unveils a list of five altcoins that are surging on the back of growing interest among crypto traders. In a new tweet, the analytics firm names XRP, Uniswap (UNI), Voyager Token (VGX), Curve (CRV), and 1inch as the beneficiaries of soaring interest from crypto traders. “XRP, UNI, and midcaps like VGX, CRV, and 1NCH have led the altcoin charge over the past 24 hours. Crowd interest has (at least temporarily) shifted away from Bitcoin and Ethereum as on-chain fundamentals are being used to identify upcoming pumps.” Santiment is also putting the spotlight on UNI after the decentralized exchange (DEX) token printed a new all-time high of $20. The crypto intelligence platform looks at various on-chain signals to determine whether UNI is ripe for a correction. Santiment says that Uniswap remains the market leader in the (DEX) space in terms of volume and number of trades with no signs of slowing down even if the platform is no longer incentivizing users with yield farming rewards. While activity on the DEX continues to be strong, Santiment highlights that UNI’s price is surging amid a considerable drop in volume. The firm says the divergence suggests that a price reversal may be on the horizon. Santiment adds that UNI’s social volume has skyrocketed to its highest level in three months, which is another indication that a short-term top may be in place. “As usual, the crowd tends to FOMO in at the top, suggesting that this might be a local top forming for UNI.” The crypto analytics firm also notes that the increasing coin supply on exchanges does not bode well for UNI. “With the recent price rally, we are seeing a spike in Coin supply on exchanges, this should act as sell pressure for now but the next few days should show us a clearer picture of how things will do. Price tends to dip following any sharp spikes up in Coin supply on exchanges as observed in the past.” All in all, Santiment expects UNI to top out and dip as the threat of new supply entering the market could turn the crypto asset bearish. “A temp top might be forming as the crowd FOMOs in and some market participants sending their UNI to exchanges. [Read more]( The post [Interest in 5 Altcoins Surging Among Traders, Reports Crypto Analytics Firm Santiment]( appeared first on [Feed Binary](. [Read Full Story]( ------------------ [Forget Bitcoin: Inside the insane world of altcoin cryptocurrency trading]( Many altcoins don’t do anything, and some are scams. But average people are getting rich off them. It was a Saturday morning and Adam was feeling bold. He’d made thousands of dollars on a single trade the night before, and was feeling lucky. But Adam wasn’t trading on the NASDAQ, pumping GameStop stocks or investing in a startup. He was about to sink $2,500 into a cryptocurrency called DeTrade. It seemed safe. Adam had investigated the coin’s development team on LinkedIn, and watched a video of its CEO laying out a roadmap for the coin’s future. A newswire piece published on Yahoo touted DeTrade’s technology as advanced enough to disrupt cryptocurrency. Thanks to Bitcoin hitting an all-time high valuation of $40,000, almost tripling its value in two months, cryptocurrency is very much back in the zeitgeist. But while for many people Bitcoin is synonymous with cryptocurrency, it’s not what crypto traders like Adam are interested in. Beneath Bitcoin and Ethereum, the second-best-known currency, is a strange underworld of different cryptocurrencies. Called altcoins or, sometimes, “shitcoins,” these are essentially penny-stock cryptocurrencies. And they’re crazy. Bitcoin tripled its value recently, but many altcoins explode 30, 40 or 50 times over within days. Arguably the most famous is Dogecoin, which recently shot up thanks to a potent combination of Reddit and Elon Musk, but there are thousands of altcoins, forming an Indiana Jones-esque Cave of Crypto Wonders. The spoils can be life-changing, but there are traps around each corner. Fortunes can be made and lost in seconds. Cons and fraudsters are everywhere, with traders vulnerable to scams at each step of the process. Case in point: Adam’s foray into DeTrade. The touted technology behind it wasn’t real. Nothing about the project was. DeTrade, for all intents and purposes, didn’t exist. The LinkedIn profiles were fake, and the video of its CEO was a deepfake created with AI. It was a scam. Those behind it, operating in the unregulated world of crypto, vanished. Adam lost his $2,500, but he got off easy. In total, those behind the scam took in around $2 million. Just a regular day playing with altcoins, says Adam. Million-dollar joke Adam got into cryptocurrency in September. When we spoke, it felt like he’d crammed years of trading into two months. He put in $4,000 and lost it in days. Then he turned $3,000 into $90,000. After withdrawing a third of that and then losing just over another third, he now had around $20,000 in crypto. Adam had seen some tempestuous trading in recent weeks. One person managed to flip $2,000 into over $40,000 on two different occasions, but lost it all to scams both times. Another put $150 in a coin and doubled his money in 15 minutes. Decent result, but his $150 would’ve turned into $28,000 if he’d waited only one more day. But despite the community’s enthusiasm, there’s a small problem. Right now cryptocurrencies don’t really do anything. [bitcoin-graph.png] Bitcoin nearly tripled in price, from $15,000 to over $40,000, in two months. If you invested $1,000 in early November, you could have taken out $2,600 two months later. Investing in a stock means ascertaining its value — based on factors like competition, risks and, above all, profit generation — and then putting money into ones that are undervalued. If other investors follow you, the stock rises, giving you an opportunity to take profit. Speculation is naturally part of this: The Dot-com Bubble was all about pouring money into “pre-profit” companies in the hopes they’d make money someday. Cryptocurrency, however, takes speculation into the stratosphere. For the most part, cryptocurrency is pure speculation. People are investing in technology that produces nothing, and has no practical application. As I write this, a coin called Meme is selling for $517. That’s a little over four times the price of an Apple share. Doge, a coin marketed after the internet slang for “dog,” doubled in value earlier this month after a pornstar tweeted about it. After the price settled, it then rocketed once more when Reddit wanted to make it the GameStop of cryptocurrency. This disconnect between price and purpose has made many experts understandably skeptical. David Gerard is one such skeptic. He became interested in Bitcoin in 2013, when it first hit $1,000, and has since written two books on cryptocurrency. His most recent focuses on Libra, Facebook’s ill-fated attempt at digital currency. “The driving force of Bitcoin and cryptocurrency is nothing to do with technology,” he told me during a Skype call. “It’s all about the chance that people might get rich for free. All of this is about the psychology of get-rich-quick schemes.” In his years working as an IT systems administrator, Gerard’s job has been to examine new technology and discern what’s useful and what’s not. Cryptocurrency, he told me, is not. “Bitcoin burns a whole country’s worth of electricity for the most inefficient payment network in human history,” he said. [Price fluctuation for the Meme cryptocurrency] After launching at around $8 in August, the obscure Meme coin briefly reached a valuation of over $1,750 in September. If, with fantastic luck, you invested $1,000 at $8 and sold at $1,750, you’d be up $217,000. This is the allure of “shitcoins.” That’s no exaggeration. Cryptocurrencies are mined using powerful computers, and many enterprising types put together farms of computers used solely for the purpose of mining Bitcoin. As a result, Bitcoin is responsible for more energy consumption than Switzerland. Gerard says the only thing you can do with Bitcoin is buy it and sell it. He’s even harsher on altcoins. “They’re absolutely useless objects. Even by the standards of Bitcoin, altcoins are useless,” he said. This is precisely what makes them so fascinating. Seemingly, all they can do is get internet punters to bet on their success. But this enables average people to become rich. That Meme coin I mentioned before? It was listed at $2.72 and a month later hit an all-time-high price of over $2,000. Imagine becoming a millionaire from a joke internet coin. Risk and reward Crypto Spider has made millions with altcoins. Crypto Spider isn’t his real name. Like most people in the cryptocurrency community, he goes by a pseudonym. He’s gained renown in some Telegram groups over the past few months thanks to a “2K to 1M” challenge, where he endeavored to see how quickly, and with how few trades, he could turn the first number into the second. In cryptocurrency, you can follow someone’s portfolio if you have their wallet number, so the community was able to watch this challenge play out in real time. Within two months, that $2,000 had grown to over $2 million. Much of that money was made off one trade: He chucked $50,000 into a project which, in the space of around a week, magnified 35 times in value, netting him $1.75 million. After passing $2 million, he cashed out. “You won’t ever see that type of explosive growth if you don’t trade in altcoins,” he told me, though he also said “95% of these coins are going to be nonexistent in the future.” Like Adam, Crypto Spider has no background in finance or trading. He lists college courses in game theory, basic algorithmics and some economics as useful to his crypto exploits — but in essence he’s a self-taught amateur. He declined to tell me his specific age, only that he was “20ish” when he first got into cryptocurrency in 2017. He admits he was attracted by the “pretty numbers,” by seeing coins magnify in value 30, 40 and 50 times within a short period. He was enthusiastic enough to start a university club around cryptocurrencies, and how they’d be used in the future. Crypto Spider says cryptocurrency will play a “major part in the future of finance,” and speaks with the passion of a believer. He breathlessly transitions from how cryptocurrency is a part of the internet’s evolution to the possible use cases of blockchain, the technology behind Bitcoin, in the next 10 years. But despite his enthusiasm, I couldn’t help but notice how chunks of what he said echoed Gerard. [Racks of servers illuminated by blue and green lights] Cryptocurrencies are mined using powerful computers. More emissions are produced by global Bitcoin miners than by the entire country of Switzerland. For one thing, he looks back at all the projects he was excited about in 2017 and realizes most were almost entirely vaporware, technology that’s advertised but never delivered. [Read more]( The post [Forget Bitcoin: Inside the insane world of altcoin cryptocurrency trading]( appeared first on [Feed Binary](. [Read Full Story]( ------------------ Sponsored Content [fb](  [tw]( ------------------ You received this email because you operate or create content for a website/service and based on your website it seemed like this could be important information to you and your users. Want to change how you receive these emails? [Update your preferences]( or [Unsubscribe](