Whew! As I drove into work as I do each day (an hour drive that really should only take 15 minutes with no traffic), I was listening to Andy Hoffman and Thomas Hunt (aka MadBitCoins), two of my favorite and most trusted BitCoin sources of the WorldCryptoNetwork on YouTube when the Tether news broke (although really the audit has been scheduled since December 6th). Things had been almost too quiet for the past week or so, an eternity in crypto, and just like the crappy Cleveland weather on my drive to work, when it snows, it blizzards! There is too much to go into to detail, so I will just leave a quick recap, and you can investigate the ones that interest you most. Here we go!
BitFinex exchange and the altcoin Tether face an audit from the Commodity Futures Trading Commission (CFTC). The origins of Tether are shrouded. Originally called "WorldCoin", it showed up on BitFinex shortly after the exchange was hacked for over $60M. Unable to repay the specific coin balances, Tether was issued to the victims. It is allegedly backed by the US dollar, and we know any tie to FIAT in the crypto world can be dangerous. Tether backers supposedly keep $1 in an escrow account for every Tether issued. That was all fine until the recent sell off of BTC caused Tether market cap to rise to over $2B! That's a lot of money to hold. So now the auditors want a look as they believe it is not a 1 to 1 ratio, but rather some fractional reserve lending. This is the top story and the FUD (maybe not all unfounded this time) has hit the market hard.
This leads to the next item, which I was initially happy about, but now am just more upset about the negative attention these issues bring to Crypto. The perpetrators of BitConneeeeeeect! are reportedly being sued for their involvement in this so called Ponzi scheme. Ok to be honest, I did throw a couple hundred bucks into BitConnect. It was just getting popular when I entered the Crypto realm, and I fell for it. I kind of thought it felt schemey, but thought hey I should be able to get my money back before my principal matured, so if they took it, eh I wouldn't cry. By the time details of their crookedness came to light, I couldn't get my initial money out, but always traded my earnings for BTC. Ultimately they gave back my "principal" (about 10% original value). I think the people behind it are predators and criminals, but there are people like this everywhere! I feel sorry for the people who lost out, but at the same time, it was their decision, common sense, more than you can afford to lose, etc etc.... Trevon James, Craig Grant, CryptoNick are up there, but not top of the chain. Those guys remained anonymous from day 1, presumably because they knew this was a potential outcome. Really this just brings a lot of negative attention to the idea that Crypto is all scams and is almost too dangerous for mainstream. We'll see what happens here.
CoinMarketCap relists the Korean exchanges! Sheesh, Brandon Chez who runs CoinMarketCap, didn't tell anyone when he pulled a "CoinBase" and just delisted all the Korean exchanges in the middle of the night to the horror of the entire market worldwide the next day. Korean Crypto markets trade at a premium and removing them had a huge impact on the steep BTC fall from $19,000. Well last night amidst all the other commotion, he decided to relist them. Had it not been for the Tether breaking news, today could have had a much greener outlook than it did. Just about everything I own is in the red today. Such is the life of a Steemian...
This one hasn't gained much traction, and I'm not sure exactly how I feel about this one, but there have been threats of a class action lawsuit against Brian Armstrong and our friends at CoinBase. From public block-chain information, it is possible to determine that CoinBase still sends their transactions one at a time, and all for the same fee. Any wallet worth half a Satoshi has a feature to adjust transaction fees. Most don't even mess with the setting, but it is what pays the miners to confirm the transaction. Of course they confirm the ones with the most "gas" first, and so users have some control over the speed of their transaction as it makes its way through the blockchain and out to the other side. Another great feature of BitCoin is the ability to batch transactions and send more than one at once, which greatly reduces fees and allows high volumes of transactions to be processed at the same time. Adopting SegWit and Lightning Network will also help this effort along, which CoinBase has taken no action on up to this point. The case can be made that they are not following their fiduciary duty to look out for their customers, and are in a sense are colluding to inflate costs and price-fix the market. Similar to what happened with banks and other lenders charging immense interest or overdraft fees, CoinBase may find themselves liable for a part of these exorbitant fees. I would love to see the fees reduced on CoinBase, it is a gouging! (You can use their sister site GDAX and make $0 trades, so you buy 1 BTC, you get 1 BTC). At the same time, an event like this will also bring heaping piles of FUD to the general public, and be another barrier to entry for some, thus delaying the mainstream adoption of BitCoin. Sigh.
Those are my top 4 issues for the day, nothing too shabby. I was engulfed with these three, and hope I didn't miss anything else. Always keep your eye on the ball in Crypto! Let me know if I missed an issue or important detail. What do you think of this turn of events? Is BTC going to hit $7,500 or lower as predicted by Judas's like Roger Ver? Will there be a new star to rise from the ashes of the Phoenix? Thanks for your feedback, I love to hear what you think!
CryptoHawk
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