Peter Thiel, Bitcoin Astronaut, Moves Markets with Crypto Moonshot
Investor Peter Thiel has reportedly made an all-in, rather giant, bet on bitcoin. Mainstream financial press is reporting his venture capital fund purchased and held the digital asset through last year’s thousand percent-plus gains, making the decentralized currency one of his firm’s most valuable investments.
Also read: Jimmy Song Uses Andreas Antonopoulos Model, Open Sources Forthcoming Book
Peter Thiel’s Moonshot Bet
“Founders Fund, the venture-capital firm co-founded by Peter Thiel, has amassed hundreds of millions of dollars of the volatile cryptocurrency,” bitcoin, the Wall Street Journal is reporting. “The bet has been spread across several of the firm’s most recent funds,” they claim, citing unnamed sources, and include “one that began investing in mid-2017 and made bitcoin one of its first investments.”
Paypal? They chortled; we have credit cards! Won’t make money. Facebook? They dismissed; Myspace exists! Doomed to failure. Donald Trump? They howled; Hillary Clinton has it in the bag! There is no way he can become President. Bitcoin? They mocked; it’s used only by weirdos and geeks! It died in 2011.
Maverick investor Peter Thiel has made a career of going against conventional wisdom, and he’s at it again, venturing where few of his peers will dare. This time, he’s placing what’s been called “a moonshot bet on bitcoin.”
Mr. Thiel, 50, is best known as a venture capitalist, but he’s about as well-rounded as they come. He earned a law degree from Stanford, traded derivatives, clerked for a circuit court judge, and even wrote speeches for the Secretary of Education.
A principal focus these days is his Founders Fund, which he started in 2005 from San Francisco. It doesn’t have a mission statement – it has a manifesto, asking the question: “What happened to the future?” Its portfolio has contained everything from Spacex, Spotify, Lyft, Airbnb, to Facebook.
Markets Rocked
Speculation by the media has Founders Fund buying “around $15 million to $20 million in bitcoin, and it has told investors the firm’s haul is now worth hundreds of millions of dollars after the digital currency’s ripping rise in the past year,” and no one seems to know if they’ve begun to take profits.
Afternoon news of the bet shook markets, and though bitcoin’s price had been lethargic it suddenly began shooting up, reaching as high as 15,000 USD by this writing. Market reasoning can be many-faceted, but a venture firm buying bitcoin straight, no chaser, and holding it is something new. And the idea its “bitcoin investment is already estimated as the most valuable in the Founders’ most recent $1.3 billion venture fund,” according to reporting, is downright shocking.
The move is daring, even for Mr. Thiel, in an environment where bitcoin could literally go to zero, or something close. Boisterous, media-seeking venture capitalists such as Michael Novogratz spooked easily after late December 2017’s double-digit price drop, saying “we didn’t like market conditions for new investors” and postponed a planned crypto fund. Indeed, entire countries like China and South Korea, among others, are cracking down if not outright banning the world’s most popular cryptocurrency.
Whatever the case, Mr. Thiel’s reputation for unconventional thinking has won him many hundreds of millions as reward. And it appears the market, this time at least, wishes to bet on his hunch as much as bitcoin.
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Putin Wants to Use Cryptoruble to Evade Sanctions But Bank of Russia Skeptical
Russia’s president Vladimir Putin has reportedly commissioned work to create a cryptocurrency as a tool to circumvent international sanctions. His economic adviser explained that “no mining is possible” for the cryptoruble. Meanwhile, the country’s central bank and finance ministry have expressed skepticism about this “cryptocurrency.”
Also read: Russian Cryptocurrency Bill Is Ready – Regulators Share Details
Cryptoruble to Help Circumvent Sanctions
Putin is reportedly exploring ways to create a cryptocurrency that can help the country circumvent western sanctions. The Financial Times reported Moscow officials saying that Putin “has commissioned work on establishing a cryptocurrency.” Sergey Glazyev, an economic adviser to Putin, described at a recent government meeting that “a cryptorouble would be a useful tool to get around international sanctions,” the publication added and quoted him saying:
This instrument [cryptoruble] suits us very well for sensitive activity on behalf of the state. We can settle accounts with our counterparties all over the world with no regard for sanctions.
He added that this new currency would be “the same rouble, but its circulation would be restricted in a certain way,” thereby allowing the Kremlin to track its every move, the news outlet noted.
First Proposal of Cryptoruble
In October 2017, Putin ordered the creation of Russia’s national cryptocurrency, largely referred to as the cryptoruble, as news.Bitcoin.com previously reported.
The Minister of Communications and Mass Media, Nikolay Nikiforov, subsequently submitted the first proposal of this new currency a week later. “These are technological proposals,” he said at the time without elaborating on the details.
In November, Deputy Finance Minister Alexei Moiseev hinted that the proposed cryptoruble may not be an actual cryptocurrency, suggesting that its name should change from cryptoruble to cyber-ruble.
Glazyev’s Version of Cryptoruble
Last month Glazyev independently proposed his version of the cryptoruble and suggested using for settlements between the state and corporations. He told Kommersant that the cryptoruble will be issued by the authorities and that “no mining is possible,” adding that:
It’s just a decision of the authorities to issue a non-cash form of a discrete stream of monetary units… The digital ruble guarantees us full protection – from fraud, from theft…Wherever there is a demand for the targeted use of money, be it government spending, budget investment, the work of banking structures and corporations, it can be applied.
No Support from Central Bank and Finance Ministry
While Glazyev is a proponent of creating the cryptoruble as soon as possible, the finance ministry and the Bank of Russia are skeptical. Each has stated they do not see a need for the cryptoruble.
During the meeting where the bill for the regulation of cryptocurrencies and initial coin offerings (ICOs) in Russia was presented, Moiseev said the ministry of finance is in no hurry to create the cryptoruble. Last week, Interfax quoted him saying:
To be honest, I do not even understand what a cryptoruble is…I understand what an electronic ruble is. I understand what ‘a Yandex-purse’ is … If you declare that we renounce the constitutional principle that the issue is produced by the central bank, then, of course, we can make a cryptoruble.
Meanwhile, the central bank’s first deputy governor Olga Skorobogatova said that the bank “does not think this [cryptoruble] is advisable from the point of view of the macroeconomics of the population.”
However, she revealed that the bank is considering “a supranational digital currency within the BRICS or the Eurasian Economic Union (EAEC).” According to her, the Bank of Russia believes that:
The issue of a common cryptocurrency for a number of countries is very promising, more than that for a single nation.
What do you think the final form of the cryptoruble will be? Do you think it will be good for the crypto community? Let us know in the comments section below.
Images courtesy of Shutterstock, Criticatac, and RT.
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Gibraltar Launches Regulation to Protect Cryptocurrency Value and Reputation
A mechanism tailored to protect customers of cryptocurrency businesses in Gibraltar, and its own reputation, went into effect on January 1. The regulation targets blockchain technology – companies storing and transmitting value must now be licensed by the Financial Services Commission (GFSC).
Also read: Malta Bitcoin Schizophrenia: Government and Banks Send Mixed Signals
Gibraltar – “World’s First”
The Digital Ledger Technology (DLT) Regulatory Framework has been introduced after last month the Legislature of Gibraltar approved a bill designed to update its financial services regulations. It laid down the foundation for new legislation governing the cryptocurrency sector in the territory with financial services and online gambling still considered the major pillars of the economy.
“We are really excited to finally welcome applications from DLT providers. We expect to be very busy in the coming months”, Nicky Gomez, head of GFSC’s Risk and Innovation Department, said, quoted by the International advisor. “We are looking forward to working on some interesting and innovative ideas with applicants”, he added.
Gomez pointed out that GFSC had become the first regulator to introduce a DLT Regulatory Framework in collaboration with the financial services industry and the government of Gibraltar. “It is a very encouraging time and we are looking forward to the challenge”, the official said.
True, Unrivaled in Europe
Being a British overseas territory, Gibraltar has a legal system that is quite independent from the United Kingdom. That has allowed it to develop its own government policies and economic priorities. Gibraltar has attracted financial companies and online sports betting and gaming businesses in its jurisdiction with corporate tax incentives and relaxed regulations, unrivaled by others in the EU.
In December the 17-member local parliament modernized the territory’s financial services legislation with a newly adopted bill. It paved the way for a comprehensive set of rules addressing challenges presented by cryptocurrencies and governing operations of companies in the sector. In doing that, Gibraltar has progressed on fulfilling its intentions to position itself as an attractive location for crypto businesses. They may actually build a brand new pillar to support its economy. And Gibraltarians, in their turn, may completely forget the times when the old British naval dockyard accounted for more than half of their economy.
For God, Queen… and Territory
In its latest move along these lines Gibraltar has laid out certain principles designed to protect consumers’ rights and interests, as well as its own reputation. All licensees will have to follow them. For example, every DLT provider should communicate with its customers in a way which is fair, clear and not misleading and have proper regard to risks to its business and customers. Companies must also have effective arrangements in place for the protection of client assets and money, including “contingency, disaster recovery and crisis management plans”.
Welcome to Gibraltar! Oh, and don’t feed the monkeys, please!
Do you think Gibraltar will manage to attract cryptocurrency businesses and customers? Tell us in the comments section below!
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South Korea Expected to End Anonymous Crypto Trading by January 20
The South Korean government has been working on a system to enforce real-name identity verification on cryptocurrency traders. This system is expected to be implemented around January 20, thus ending the current practice which allows for anonymous crypto trading.
Also read: Russian Regulators Draft Law to Restrict Crypto Mining, Payments, and Token Sales
Government’s Real-Name System
The Korean government announced last week its decision “to implement a virtual currency trading real-name system as a special measure to eradicate virtual currency speculation.” According to Yonhap, sources familiar with the matter said on Tuesday:
The South Korean government has been developing a system that is likely to start banning the use of anonymous accounts in cryptocurrency transactions from around Jan. 20.
So far, Koreans have been able to trade cryptocurrencies anonymously through the use of virtual accounts, which are issued by banks for crypto exchanges to assign to their customers. However, the regulators believe that these accounts are “used as virtual currency trading accounts to disseminate speculation and hinder transparency in financial transactions.” The issuance of new virtual accounts have now been prohibited, which major crypto exchanges have already complied, as news.Bitcoin.com previously reported.
Other Crypto Regulatory Plans
The government also announced that it will “strengthen banks’ anti-money laundering obligation on virtual currency exchanges.” This will require financial institutions to report suspicious transactions related to crypto exchanges to the authorities. Banks must also “exclude financial services for unhealthy exchanges that do not follow the government’s emergency measures,” the regulators described.
Furthermore, “the prosecutors and police have set up a plan to crack down on virtual currency-related crimes in 2018.” They will investigate illegal acts such as market manipulation and arrest the people in charge, the government explained.
At the meeting last week of the Korean National Economic Advisory Council, presided over by President Moon Jae-in, the Minister of Strategy and Finance Kim Dong-yeon announced the country’s “2018 economic policy direction.”
It includes plans for the National Police Agency to intensify the crackdown on illegal crypto activities. The Korea Customs Service, the prosecutors’ office, and the police have been put in charge of investigating actual violations of the Foreign Exchange Transactions Act. Meanwhile, “the Ministry of Science and Technology and the Korea Communications Commission will periodically check cryptocurrency exchanges,” the regulator detailed.
What do you think of the government’s real-name verification system and other regulatory plans? Let us know in the comments section below.
Images courtesy of Shutterstock and the South Korean government.
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Bitcoin Adoption in Africa Hinders EAC Plans for a Unified Currency
Due to a declining economy and eroding national currencies, the East African Community (EAC), an intergovernmental central bank organization composed of six countries in eastern Africa have plans to adopt a unified currency. However, the growing popularity of bitcoin and other digital currencies are hindering the East African central bank’s abilities to establish a harmonized EAC currency.
Also Read: Bitmari Becomes First Bitcoin Company to Partner With an African Commercial Bank
‘The Objective of the Bitcoin Founder Is Quite Different from That of the EAC Member States’
Mr. Bernard Dadi, the BOT’s National Payment System Director, revealed the EAC nation states are still in the process of creating the unified currency, but digital currencies have presented new challenges.
“The objective of the bitcoin founder is quite different from that of the Community Member States on establishing a single currency — As we’ve said, the process to have a single currency is still underway with consideration of available challenges including the growth of bitcoin.”
The EAC Member States Are Researching Digital Currencies Before They Decide to Approve, Regulate, or Ban Them
According to Mr. Dadi, the BOT is working with cryptocurrency experts from the UK and have attended digital currency workshops. BOT management and senior staff officials are still going over the process of whether they will approve the use of virtual currencies based on the workshop results. Mr. Dadi details that EAC member states have issued warnings about bitcoin and more recently the central banks of Kenya and Tanzania have issued warnings to retail investors.
“Not just in Kenya … South Africa, Swaziland, Namibia, Uganda and other African nations have since warned their people about bitcoin,” Mr. Dadi emphasizes.
Bitcoin Adoption Continues to Grow in Eastern Africa But Removes the Focus Away from the EAC Unified Currency Objectives
The EAC members believe the trending popularity of digital currencies like bitcoin is making things difficult for the unified currency plans. Patrick Njoroge, the governor of Kenya’s central bank, says that the EAC nation states economies have gotten much better due to the partnerships of the six-country intergovernmental organization. The London School of Economics, bilateral trade relations have improved since the EAC’s union began. However, alternative currencies like bitcoin are leading residents in another direction, and its a path the EAC organization believes is not helpful to the unified currency plans.
Meanwhile, bitcoin use in the six EAC countries is growing, and interest in the decentralized currency is trending in Africa particularly in Uganda, Kenya, and Tanzania according to Google Trends data. East African bitcoin enthusiasts are using exchanges like Localbitcoins, Remitano, Bitpesa, and Xapo. Localbitcoins trade volumes in the EAC region have also seen all-time highs over the past few months.
What do you think of the EAC nation states saying bitcoin is hindering the creation of a six-country unified currency? Let us know what you think in the comments below.
Images via Shutterstock, the African Digital Banking Summit, and the EAC.
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Jimmy Song Uses Andreas Antonopoulos Model, Open Sources Forthcoming Book
Jimmy Song, well-known bitcoin core developer, has embarked on writing a book for technical publisher O’Reilly. Programming Bitcoin is different with respect to not only the subject matter but also the way it is being constructed. Using the successful model outlined by world renowned educator Andreas Antonopoulos, he will expose each chapter to the ecosystem, open source, and allow the community to contribute.
Also read: Bitcoin’s “Value — Like Beauty — Is in the Eye of Beholder”
Song Uses Antonopoulos Model
Bitcoin core developer Jimmy Song will open source write his book, Programming Bitcoin, to be published by O’Reilly in the Fall of 2018. Mr. Song acknowledges and tells of his discussion with noted bitcoin evangelist Andreas Antonopoulos about the best way to put together a book of this kind. Mr. Antonopoulos’ Mastering Bitcoin was also put out in open source as it was being written, allowing for comments, corrections, additions by the ecosystem. It too was eventually published by O’Reilly. In fact, Mr. Antonopoulos wrote the publisher, explaining why Mr. Song was the appropriate choice for the project.
Jimmy Song is a staple on the cryptocurrency/bitcoin speaking circuit. His talks are well regarded, and whenever there is a dust-up or controversy, Mr. Song is thought of as a less polarizing voice. As a developer, he has seventeen commits.
Currently, Mr. Song is a Youtube program host, an advisor to decred, an altcoin project, and was formerly Armory’s VP of Engineering. He’s a prolific blogger, and teaches a two-day course, Programming Blockchain, of which his forthcoming book is largely based.
His goal is to condense the seminar in an effort to reach more people. He’s passionate about creating more developers, making the ecosystem stronger as a result, and more “anti-fragile.” He describes his deadline for delivering the book as “aggressive” (this May). His plan is to write a chapter, place it on Github, and then allow the community to contribute.
Learning to Build Civilization
Mr. Song tells of how “gracious” and “generous” a person Andreas Antonopoulos was in sharing insights. The open source idea was something appealing to the developer in Mr. Song, but Mr. Antonopoulos’ Mastering Bitcoin is a reference-type book, covering more topics. Mr. Song’s Programing Bitcoin is language specific, he explains, and he sees the two books as complementary.
Programming Bitcoin will start at “basics” such as finite fields and elliptic curves, working toward SPV and segwit transactions. Readers will learn to write a Python library from scratch, coded through exercises. He stresses his is more of a “learning book,” whereby it isn’t meant to be exhaustive. A key problem with technical books, especially on bitcoin, is the minute they’re published, the cliche goes, they’re already out of date.
To avoid completely falling into this trap, Mr. Song is aiming to craft a “process book” on bitcoin, how to think about bitcoin. As with Mr. Antonopoulos’ deal, Mr. Song negotiated with O’Reilly for a Creative Commons license. The “minute” it is published it will be available online for free. He doesn’t believe the book will generate much in the way of revenue, and for now plans to use whatever is earned from sales to pay those who contributed.
If it sounds Gandhi-esque, Mr. Song is quick to point out that if his book makes bitcoin better and stronger, so will his personal financial investment as well. Response is strong, especially for a technical book. The Github is active, and contributors are helping it along. Mr. Song believes bitcoin is bringing sound money to the world, and is helping to improve and build civilization. He hopes his book will live up the encouragement he’s been shown by the bitcoin community.
What do you think of open source writing of a book? Tell us in the comment section below!
Images via Pixabay, Jimmy Song, Andreas Antonopoulis.
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