Not Content Scamming $1.5 Billion, Bitconnect Wants Another $500 Million for ICO
The fall of Bitconnect was as certain as night follows day. A pyramid scheme wrapped inside a Ponzi with a side order of WTF, Bitconnect was as crazy as it was calamitous. The only miracle was that the racket lasted so long. When the ringleaders shut up shop on Wednesday, causing the token to plummet from $290 to $8, that ought to have been the end of the matter. Remarkably though, BCC continues to be actively traded, and has even recovered some of its value. The reason for the mini revival? Bitconnect is launching an ICO.
Also read: Autopsy of the Bitconnect Implosion: Ponzi, Centralization, Governance
Meet the New Boss, Same as the Old Boss
It was no secret, prior to its collapse, that Bitconnect was running an ICO. Its Bitconnect X website has been accepting contributions since January 10. When Bitconnect closed its doors a week later, after its original website had been offline for days, it was assumed that Bitconnect X would follow suit. After all, no one would be gullible enough to get fooled twice, surely. Apparently so. Not only is the Bitconnect ICO going ahead as planned, but investors are actively throwing money at it.
When Bitconnect announced that it was closing its lending platform on Wednesday, $1.5 billion worth of value was wiped off its market cap in less than two hours. Those losses weren’t borne by the company though – it was ordinary investors who were left out of pocket. Bitconnect’s execs were doing just fine, sitting on the stash of bitcoin they’d pocketed from investors in the months prior. But then, as Twitter traders eagerly watched to see the first altcoin drop to zero in real time, something strange happened. BCC stopped falling and started to climb.
The Ponzi Scheme That Just Won’t Die
On January 17, BCC was the worst performing cryptocurrency on Coinmarketcap. Incredibly, 24 hours later, it was the best performing coin on the site, up 410% in 24 hours to reach $43 a token. This revival will have been of little consolation to investors, who were still heavily in the red. Nevertheless, it showed that against all reason, people were still buying the coin. In the past 24 hours, $18 million of BCC has been traded and a coin that was written off as being utterly worthless is now changing hands for $28.
The reason for this is BCC can be used to purchase BCCX, the new Bitconnect token that’s being launched via an ICO. Each BCCX is priced at $50. To reiterate then: Bitconnect duped thousands of investors, selling them BCC coins at up to $290 apiece. It then crashed the market, and is now encouraging the same investors to exchange their BCC for BCCX at a ratio of 2:1 in an event that ought to be dubbed The Halvening.
Lambs to the Slaughter
By late 2017, it was apparent to Bitconnect that the Ponzi scheme they had constructed was on the verge of toppling. Not content with riding off into the sunset with their ill-gotten gains, they decided to have another bite of the cherry. The Bitconnectx.co domain was registered on the penultimate day of 2017, and the crowdsale commenced less than two weeks later. The company is seeking to sell 11.76 million BCCX, which will earn it $588 million. It will also retain another $145 million in coins, bringing its total assets to $733 million.
One of the first tasks on the Bitconnect X roadmap is to attain a listing on Coinmarketcap, which shouldn’t be a problem, as the site had no qualms about heavily promoting the previous scam. After that it will spend the summer performing vague tasks such as “adding more security layers in Exchange platform”, presumably while Bitconnect execs put as much distance between themselves and their creditors as possible.
Bitconnect Keeps Playing While the Titanic Sinks
In the days after the collapse of Bitconnect, the company’s social media account continued glibly tweeting bitcoin news, as if nothing had happened. Each new story it posted was met with hundreds of thunderous replies, until the account finally broke its silence to audaciously issue the following claim:
Before cryptocurrency was invented, gullible individuals were defrauded via Nigerian bank scams. After the mark had lost almost everything, and the princes’ fortune they’d been promised had failed to materialize, the scammer would go in for one last trick. They’d “come clean” with the victim and confess that they too had been duped. For a small fee, they could get the mark’s money back, and set everything right.
How long do you think Bitconnect X will last? Let us know in the comments section below.
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Russia Ready for Migrant Bitcoin Miners Influx
Despite some indecisiveness about cryptocurrencies on the part of centralized power, Russia has been quietly preparing for a wave of migrant crypto miners from East and West. It’s been said that the country has got what it takes to invite them. A third of the Soviet era power producing capacity is idling, after energy hungry industries were closed and scrapped in the 90’s. Experts, home and abroad, members of the local crypto community, all agree – Russia is ready to welcome bitcoin miners from China and Europe. That’s if Moscow says “yes”… or at least doesn’t say “no”.
Also read: Mining Operations Offered to India After Mixed Signals from Beijing
Russians Mean Business
“Hello, Invite Chinese miners to Russia!! Excess electricity capacity – 20 MW… 3 rubles/kWh (0.05USD; 0.32RMB)”. This is just one of many ads you can find in bitcoin forums these days. With electric installation to plug in the rigs – ready, internet cables stretched in a 5,000 m2 air-cooled building – check, fire alarm and CCTV cameras – installed, and 24/7 tech support – available, Russians mean business. The country is ready and even bragging about what it can offer to miners chased beyond the Great Wall, but not only, “Do you cooperate with European colleagues?” a question reads when you scroll down. “I’ll send the contract…”, the answer follows shortly after.
Dozens of applications to mine bitcoin in Russia have been received already from companies and individuals from China and the EU, as news.Bitcoin.com reported. The Russian Cryptocurrency and Blockchain Association has invited colleagues from China and Slovakia to help increase Russia’s appeal to relocating miners. Spanning 11 time zones, filthy rich with natural resources and cheap energy, the largest country has a lot to offer. It has been estimated that the mining industry can pour trillions of rubles into federal and regional budgets. And Russian experts say authorities must think about creating the right conditions to accommodate the market.
Intercepting Long Wave Radio Chatter
Government, business and crypto community have long recognized certain developments to the East and West of Russia. Signals from Beijing, Brussels, and Washington have been heard and are certainly being analyzed and interpreted. Not willing to sacrifice an inch of its “Sovereign Democracy” territory, Moscow, when it comes to cryptocurrencies, has been tempted to gain some ground, vacated by rivals and competitors.
“I don’t see any problem if the Chinese start relocating their mining farms to Russia”, Sergei Repetyuk, Economics Director at the Institute of Economics and Natural Monopolies, said, quoted by the agency. He also pointed out:
Even in peak times, up to 40% of Russia’s power generating capacity remains unutilized.
Repetyuk’s assertion was supported by Evgeniy Itsakov, associate professor at the Faculty of Economic and Social sciences: “There is a surplus of cheap electric energy in Russia, as the generating capacity has been designed to match the needs of the heavy Soviet industry”, he explained. Cryptocurrency mining is already a separate sector and will exist until something more effective, but just as reliable and anonymous, is invented, Itsakov added. Authorities must think about creating conditions for fair play on the market, he insisted.
Soviet Era Gear to Power Today’s Disruptive Technology
Crypto Mining needs a lot of energy. The proof of work for bitcoin has consumed more than 40 TWh of electricity in 2017, according to data released by Digiconomist and quoted by RIA Novosti. Processing Ethereum transactions spent more than 10 TWh by December. Up to 80% of the world’s mining capacity currently resides on Chinese territory. Potential energy shortages in provinces where the largest mining facilities are located, have reportedly worried Beijing. Authorities in two autonomous regions – Inner Mongolia and the Xinjiang-Uygur, and two provinces – Sichuan and Yunnan – have received recommendations from the capital to restrict electricity supplies to the miners.
Build to supply the inefficient heavy industry of the Soviet Union, Russia’s energy producing facilities are now far from being stressed to their limits. Even in peak hours, Russian homes and businesses consume about 60% of what Russian coal, hydro and nuclear power stations can produce. Their aggregate capacity is estimated at 236 GW, far more than what the country currently needs. RCBA’s experts have already calculated that some 1.7 trillion rubles ($30 billion) may enter the Russian economy, if the idling facilities produce 100 GW of electricity to power crypto mining projects. Chinese miners should be excited by the fact that a lot of this surplus is concentrated in Russia’s Far East. President Putin’s representative there, Yuriy Trutnev, has already proposed using the excess power to mine cryptocurrencies. Reserves in the Russian one third of Europe and the Ural Federal District have also been reported.
There are indications that a “Migration Period” has already started in Asia. Cool climate and cheap energy will be important factors for relocating miners. Russia and other countries in Eastern Europe, along with Canada and Iceland, have received media attention as mining destinations. Some of those countries are already competing to attract Chinese miners. Regions, like Québec, have announced readiness to welcome mining immigrants, promising low electricity rates and positive attitude.
Russia could be joining the race if intentions, like those of Moscow regional authorities, win support from the federal government. A muted, but intense debate in Moscow has exposed some institutional fault lines. The Ministry of Finance supports legalizing crypto derivatives trade but is lukewarm towards the crypto-ruble idea. The Central Bank has been pushing for a national digital currency, but is reluctant to allow trading of coin-based financial instruments on traditional exchanges. And the Kremlin is unlikely to reveal its true intentions before the presidential elections in March take place. Russia, though, may like the idea of hosting crypto mining because it does not necessarily imply adoption of cryptocurrencies. It just looks like a safe way to say “yes” to bitcoin and the rest, without actually uttering anything.
Do you think that Russia will welcome Chinese miners and offer them incentives to invest? Tell us in the comments section below.
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Tether Printing Press In High Gear, Issuing $400 Million in Four Days
Bitcoin has had a rocky week to say the least. At its lowest point, the cryptocurrency dipped to $9,200 before a rising green candle sent it scurrying back into the safety of five figures. That candle was sparked by the release of $100m worth of tethers – surrogate US dollars – and was followed by another $100m issued for the next three days in a row. Tethers are propping up the bitcoin market right now, but what happens when the music stops? Should regulators wade in or Tether shut up shop, the loss of fresh capital could be cataclysmic.
Also read: While Tether Critics Grow More Vocal, Belief in the 1:1 Tightrope Remains
Tether – Savior or Sinner?
The bitcoin community have decidedly mixed feelings on Tether. On the one hand, this ersatz fiat currency is instrumental in shoring up prices. But if that supply line were to be cut off, the crypto markets would be starved of new money. While Bitfinex, which controls Tether, is in charge of issuing these dollar-pegged tokens, other exchanges are also reliant on them including Kraken and Bittrex. What happens to Tether affects everyone.
Don’t Stop Believing
In the short-term, the issuance of tethers serves as a form of quantitative easing that keeps the markets ticking over, even amidst negative news and regulatory uncertainty. As one commenter pointed out, “Tethers aren’t really ‘backed’ by USD fiat, but rather by confidence in Bitfinex itself. Similarly the USD isn’t ‘backed’ by hard assets, but rather confidence in the US economy. What happens to USD if the Fed shuts off the insane volume of their printing press?”
So long as we collectively believe that tethers are real, they are real, or at least as real as any other global currency that’s magiced out of thin air, which has generally been the case ever since the gold standard was dropped. But what are markets if not manifestations of human psychology; global sentiment etched into every line, chart, and candle? No one, at this stage, realistically believes that Tether is receiving $100 million a day in customer deposits via its diminutive Polish bank and then converting these into USDT. That just ain’t happening.
Beware the Changeling
In folklore, a changeling was a child that fairies were reputed to leave in cradles after snatching the human baby. It looked like the cradle’s original inhabitant on first glance, only to prove to be anything but. If the fairies performed the old switcheroo, unexplained diseases, disorders, and failed crops were sure to follow. Tether is valued like a real dollar and works like a real dollar – at least until the time comes to cash out. In the past month alone, over $1 billion of tethers have been issued. If Tether doesn’t hold a corresponding amount in its bank, the whole house of cards could come tumbling down, destroyed by a changeling swaddled in the mantle of the US dollar.
Do you think the volume of tethers entering the market is cause for concern? Let us know in the comments section below.
Images courtesy of Shutterstock and Wikipedia.
Need to know the price of bitcoin? Check this chart.
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Letter from SEC Reveals Outlook Not Good for US-based Bitcoin ETFs
The US Securities and Exchange Commission (SEC) has issued a letter to two Washington DC firms seeking guidance on bitcoin exchange-traded funds (ETF) applications, of which a dozen are pending. In it, the regulator openly worries about cryptocurrency volatility and whether future potential listings have done enough to protect investors. The letter is widely believed to be a major blow in the quest for Wall Street’s mainstreaming of bitcoin.
Also read: Ditch University and High Transaction Fees!
Bitcoin ETF Major Setback
In a Staff Letter: Engaging on Fund Innovation and Cryptocurrency-related Holdings of 18 January, signed by newly appointed Director Dalia Blass from the Division of Investment Management, the SEC wrote to the Investment Company Institute and Asset Management Group Securities Industry & Financial Markets Association (SIFMA) about the prospects of bitcoin ETFs.
The outlook is not good, especially if the letter’s import carries weight within the agency.
The letter is clearly written for an audience beyond its two addresses (how many letters have footnotes?). It begins with SEC history and mission statements, outlining its jurisdiction. It also offers up saccharine lines before dealing a deadly sentence. The SEC “stands ready to engage in dialogue with sponsors regarding the potential development of these funds.” And then the phrasing heard around the world: “We believe, however, that there are a number of significant investor protection issues that need to be examined before sponsors begin offering these funds to retail investors.”
The agency does “appreciate that proponents of cryptocurrencies and related products have identified a range of potential benefits.” However, “concerns regarding transparency of information, trading, valuation and other matters related to the nature of the underlying assets” seem to be dominating the SEC’s current position. Revealingly, the letter admits “the innovative nature of cryptocurrencies and related products, as well as their expected use and utility in our financial markets, means that they are, in many ways, unlike the types of investments that registered funds currently hold in substantial amounts.”
The climate surrounding bitcoin ETFs has gone from frustration to excitement in recent months with the entrance of heavy mainstream exchanges such as Cboe and CME trading futures contracts (and even the appointment, ironically, of Ms. Blass, who was seen as a pro-ETF attorney). It was believed if things went smoothly at these venerable institutions, bitcoin ETFs were a sure thing. Something like a dozen proposals for listings on the New York Stock Exchange Arca have been filed, and not one is approved.
The letter continues, “we have, at this time, significant outstanding questions concerning how funds holding substantial amounts of cryptocurrencies and related products would satisfy the requirements of the 1940 Act and its rules.” The rather lengthy missive goes on to ask a laundry list of questions, to “facilitate the start of our dialogue,” and it’s not entirely made understood the agency is really waiting for a response.
Questions Demanding Answer
Given their volatility, “Would funds have the information necessary to adequately value cryptocurrencies or cryptocurrency-related products[?]” the agency asks. “How would funds develop and implement policies and procedures to value, and in many cases ‘fair value,’ cryptocurrency-related products?”
They even get into nitty-gritty crypto inside baseball: How “would they address when the blockchain for a cryptocurrency diverges into different paths (i.e., a ‘fork’), which could result in different cryptocurrencies with potentially different prices?” And the questions deepen and go on like this for a few pages.
They ask intriguingly, “What policies would a fund implement to identify, and determine eligibility and acceptability for, newly created cryptocurrencies offered by promoters (e.g., an ‘air drop’)? How might a fund account for those holdings if the fund chooses to claim such cryptocurrencies?”
“Until the questions identified above can be addressed satisfactorily, we do not believe that it is appropriate for fund sponsors to initiate registration of funds that intend to invest substantially in cryptocurrency and related products, and we have asked sponsors that have registration statements filed for such products to withdraw them,” the letter concludes, suggesting contact persons for future reference.
What do you think about the prospects of a bitcoin ETF? Let us know in the comments section below.
Images courtesy of Pixabay, SEC.
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PR: Essentia.one Launch Set to Revolutionize the Way We Access the Web with Decentralization
This is a paid press release, which contains forward looking statements, and should be treated as advertising or promotional material. Bitcoin.com does not endorse nor support this product/service. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the press release.
Essentia.one launch set to revolutionize the way we access decentralization.
That’s right, this new product will change the way we access, manage and operate the new web. It was designed to simplify the complexity that was turning people away from decentralized technologies.
Starting as an underground project a long time ago, Essentia founders Matteo Gianpietro Zago, Mirco Mongiardino, Vladimir Holubovych shared the same vision. As early Bitcoin adopters, they knew about the strengths of decentralization but realized its weakness in usability. Now, after years of extensive research and development, a polished and perfected Essentia is ready for its launch.
What sets Essentia.one ahead of the league is its ability to provide a single access point to the entire decentralized web. How? Through the seed. Every Essentia user creates a unique seed which grants access to the whole Essentia framework.
The framework allows safe storage and access to a complete collection of DApps, wallets, assets data and identities, all in one place. It also fronts itself with a super easy to nativage user interface.
But it really is more than that, it has a bucket load of useful applications for businesses and individuals. Here’s a closer look at some of its key features:
Logins:
Essentia.one removes the pain of remembering and re-entering passwords every single day. The seed grants instant access to all personal and business logins for both decentralized and centralized accounts.
Identities:
This is a big one, Essentia provides the ability to store identities with custom profile settings making it possible to control the amount of personal information shared with third parties. Users can choose between anonymous, pseudo-anonymous or KYC compliance for specific use-cases.
Multiple wallets and multi-currency:
In one place? Yup, no need to bounce between multiple wallets. Essentia has integrated with the big cryptocurrencies like Bitcoin, Ethereum, ERC20 Tokens, IOTA, Litecoin, and Ripple. The framework provides the ability to also monitor assets in cold storage.
Storage:
Essentia has integrated powerful decentralized storage systems to the framework. The big names such as Swarm, Ipfs, Storj, provide access to the new backbone of digital storage where data is encrypted, persistent and censorship-resistant.
Exchanges:
The partnership and integration with Ether Delta and Flyp.Me has empowered decentralized prosperity. Access to multi-chain minimizes downtime and secures assets across safe, decentralized networks.
Any platform. Any device.
Your entire digital life is accessible at your fingertips with Essentia, it’s made easy on any platform, be it via a browser, desktop app, mobile app, or command line interface
Integration
Native integration has been confirmed with Ethereum, Bitcoin, IOTA, Status.im, EtherDelta, IPFS, Swarm, Storj, Flyp.me and Aragon. With many more partnerships to be announced within the coming weeks.
It appears Essentia is set to become a big name in the crypto industry. With unparalleled expertise in blockchain development, the team has made it possible for everyone to harness the power of decentralization.
Token sale details will be announced very soon at Essentia.one
Connect or Contribute
Twitter: https://twitter.com/Essentia_one
Telegram: https://t.me/essentia_one/
Website: https://essentia.one/ Whitepaper:https://essentia.one/whitepaper.pdf
Contact Email Address
[email protected]
Supporting Link
www.essentia.one
This is a paid press release. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.
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Bitcoin for Beginners: Which Hardware Wallet to Use
Hardware wallets are all the rage. Part of the “cryptocurrency starter kit”, these ultra-secure devices for storing cryptocurrency have become hugely popular as interest in bitcoin has boomed. With a number of different models to choose from, beginners may be wondering which one is best – and indeed whether they need a hardware wallet at all.
Also read: Bitcoin Hardware Wallet Maker Ledger Raises $75 Million from VC Investors
Real Hodlers Use Hardware Wallets
But for anyone who balks at the cost of purchasing a hardware wallet, it’s possible to achieve the same result on a budget. There’s nothing to prevent you from installing a wallet onto a thumb drive, or better still a pair of them to ensure redundancy, and encrypting them. Similarly, an old iPhone with Bread wallet or the Bitcoin.com wallet installed makes for a durable cold storage device. Note down your recovery seed and then keep the device offline, save for when you need to access the wallet.
For anyone determined to use a dedicated device, however, these are the main options:
Trezor
Trezor dubs itself “the original and most secure hardware wallet” and it’s highly regarded by hodlers. Available in black or white for around $109 a pop, the device will allow you to store all your ERC20 tokens together with almost two dozen coins including BTC, BCH, LTC, DASH, and ZEC. Water-resistant and sturdy, the Trezor features a small display for confirming transaction details, 2FA, password manager, and a bunch of other features.
Ledger Nano S
Small and lightweight, the Nano S by Ledger will hold bitcoin, ethereum, and several other altcoins. Like the Trezor, the Nano S is highly rated by the crypto community, and this week Ledger celebrated selling its one millionth Nano S. The device uses a small OLED display and side buttons that are pushed to confirm transactions. If you want to get your hands on one you’ll need to be patient though – the next units aren’t scheduled to ship until late March.
The company also makes the Ledger Blue, an enterprise-grade hardware device, which has a larger screen, added security features and a $330 price tag. Like its sibling, the Nano S, the Ledger Blue is currently out of stock, with no confirmed shipping date.
Keep Key
Although not as trendy as Ledgers or Trezors, the Keep Key wallet is another capable contender. It allows for storage of bitcoin, bitcoin cash, ethereum, litecoin, doge, and dash, with more coins due to be added. There’s also the ability to exchange between cryptocurrencies directly from the device using Shapeshift. It retails for $129, and is available for pre-order only, with no confirmed shipping date.
Bitlox
Bitlox looks a bit different from the rest of the wallets featured here. Rather than connect to your laptop via USB, it uses Bluetooth only. The wafer thin device, which resembles a smart card, can store bitcoin and retails for around $100. Support for altcoins is coming soon.
Digital Bitbox
A hardware wallet that’s as minimal as it gets, Digital Bitbox eschews a screen altogether in favor of compactness. It uses a micro SD card, is Tor and Tails compatible, and has optional 2FA. The Swiss-made device crams an impressive amount of security features into a very small space. Just don’t lose it.
What’s your favorite hardware wallet and why? Let us know in the comments section below.
Images courtesy of Trezor, Ledger, Digital Bitbox and Keep Key.
Readers should do their own due diligence before taking any actions related to the mentioned company or any of its affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
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