A Brief Introduction to Voluntaryism for Crypto Neophytes

The blockchain space appeals to freethinkers, entrepreneurs, and visionaries. Many of these iconoclasts practice voluntaryism, although a philosophy which new entrants may have not heard about. This is because they entered into the ecosystem from the financial realm, and their sole focus has been on accumulating more wealth. This is a shame. The impetus for cypherpunks to build encrypted technologies arose from a spirit of sovereignty – not just moneymaking schemes. 
Also read: Nvidia Misses Q3 Revenue Target as Cryptocurrency Slump Weighs on Business
What Is Voluntaryism?
Sovereignty denotes a yearning for absolute individual independence. It means many people involved in crypto prefer to live freely, without having to genuflect before someone who claims to rule them; before some king, politician, or governing apparatus. This is the crux of voluntaryism.

Voluntaryists believe all human relationships and interactions should be as consensual as far as possible. They place the notion of “consent” as the North Star of reasoning within the conduit of ethical thinking.
Consent means no human has the moral right to coerce or force another human being into acting against their volition. If someone uses force to sate their whims, that action would be considered immoral and unjust.
In some ways, this philosophy marches in perfect lockstep with the golden rule to treat others the way you wish to be treated. No one wants to be forced into behaving a certain way. No one wants to be harmed or mistreated. Everyone wants to act on their own will, without having to capitulate to others while under duress.
The Barbarian’s Paradigm
By virtue of their philosophy, voluntaryists do not believe government is a moral institution. The organization is at odds with voluntaryist philosophy. Government is non-consensual by nature. Every law, edict, and regulation is effectively a threat of violence against peaceful people. No one automatically consents to government laws. A law is an enforced mandate.
For instance, if someone disobeys a law, a costumed officer will attempt to issue them a ticket or arrest them. If that person moves to defend themselves from that act of aggression, the officer will murder them if necessary.
All government officials disregard consent. They issue or enforce laws regardless if everyone agrees. Therefore, coercive government is the barbarian’s paradigm for social order; it is uncivilized, violent, hysterical, and revels in cultism. It’s sadistic to the extent people are indoctrinated from birth to believe this paradigm of violence is synonymous with “civilization.” In reality, it is uncivilized barbarism writ large on the soul of men.
Logical Conclusion: Anarchism
Without doubt, this means the voluntaryist is an anarchist. Since governments operate without consent, they can never be an acceptable organization within the context of voluntaryist philosophy. Anarchism is thus the logical conclusion of voluntaryism. 
However, most people hear the word “anarchy” and they lose their cool. Images of picturesque horror scenes rife with explosions, corpses and gore galore erupt in colorful crescendo via their mind’s eye.
They panic and reject the term ‘anarchy’ as a synonym of disorder. They view anarchy as a form of Lovecraftian madness palatable only to fringe academics, disillusioned teenagers, and bohemian punk rockers with cockney accents.
In reality, anarchy just means “without rulers.” It means no person or group has the right to rule over the rest of humanity. It does not imply bloodshed, bazookas, and bombs.
Edward Abbey said, “Anarchism is not a romantic fable but the hardheaded realization, based on five thousand years of experience, that we cannot entrust the management of our lives to kings, priests, politicians, generals, and county commissioners.”
Bedfellows: Voluntaryism and Blockchain
It is no surprise the first technologists to think about using ciphers to ensure privacy and anonymity were voluntaryists. They were anarchists: crypto-anarchists. They built the architecture of technological anarchism, and they were heavily influenced by voluntaryist philosophy. From day one, they sought to use computational tools to generate more freedom.
Timothy May, the godfather of decentralized-encrypted technology, wrote his Crypto-Anarchist Manifesto while under the influence of Rothbardian thinking. May genuinely believed the ethics of voluntaryism. He set the tone for all future developments, including the creation of Bitcoin and all its anarchic features.
Rekindling the Flame of Freedom
To this day, charlatans with dollar signs in their eyes have eroded the voluntaryist vision of the crypto-anarchists. Instead of seeking to erase the barbarian’s paradigm, they focus on the sexual magnetism of “moon” and “Lambo.”
This is why internalizing the voluntaryist-anarchist roots of the crypto ecosystem is essential. Understanding this history will pave a path to a beautiful new world, and encourage people to embrace the purpose of the technology. It will help abolish government and put an end to the insanity of this uncivilized world. The voluntaryist mindset will act as a compass toward mass adoption and inspire true love of blockchain. In the process, it will rekindle the flame of freedom.
Are you familiar with voluntaryism? Do you still believe voluntaryism is important for the creation of novel technologies? 

Images courtesy of Twitter and Shutterstock

OP-ed disclaimer: This is an Op-ed article. The opinions expressed in this article are the author’s own. Bitcoin.com does not endorse nor support views, opinions or conclusions drawn in this post. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the Op-ed article. Readers should do their own due diligence before taking any actions related to the content. 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 information in this Op-ed article.
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Free Keene Activists Launch Bitcoin Embassy New Hampshire

Keene, New Hampshire is well known city for libertarian philosophies and more recently as a hotbed for cryptocurrencies. On Monday, Nov. 12, crypto advocates from the region have announced the launch of a new educational center called the Bitcoin Embassy New Hampshire.
Also Read: Libertarian Hotspot the Free Keene Project Bolsters More Crypto-Adoption
New Hampshire Bitcoin Embassy Offers Free Bitcoin 101 Classes
Cryptocurrency and libertarian activists from Keene New Hampshire have been steadily pushing digital currency adoption for a while now. This past Monday the group of advocates from the region, who also run the city’s active cryptocurrency Meetup group, revealed the launch of the Bitcoin Embassy New Hampshire. The embassy will be an educational center dedicated to teaching people all about digital assets, explained the creators. Further, the organization now joins the other state embassies located in the U.S. like the Atlanta Bitcoin Embassy operated by the Austrian economist Jeffrey Tucker.
Additionally, the group from Keene have explained the new embassy will offer free “Bitcoin 101” classes for visitors. “With the goals of education, networking, and inspiration, head ambassador and instructor Chris Rietmann opened the doors to the Bitcoin Embassy NH in October and has already created a “Bitcoin 101” class that is free to take,” explained the Free Keene blog. “Donations are certainly welcomed if you find the class valuable and classes are also available for those looking to learn how to accept crypto at their businesses.”
Chris Rietmann Gives “Bitcoin 101” Class at Bitcoin Embassy NH.
Spreading Cryptocurrency Adoption Across the Free State
The crew from the Free Keene blog and members of the community have been spreading cryptocurrency adoption relentlessly lately on all fronts. Recently, the group got a number of merchants to accept digital assets in the city such as a dentist, Indian restaurant, hair salon, and vape shop. Then, this past August, news.Bitcoin.com reported on the group creating Cryptotip.org, a platform that allows users to create simple paper tips funded with bitcoin cash.
The Bitcoin Embassy New Hampshire has received positive media coverage within the region as well. The embassy’s members have explained that the story has been covered by NH Public Radio, the Keene Sentinel, and a front-page story in the Monadnock Shopper News. Additionally, the embassy had a discussion and presentation concerning Bitcoin’s first hash war that started on Nov. 15. 
The creators of the embassy state that the organization has more development plans for the future and people can discuss the embassy using Telegram. For people who want to visit the new Bitcoin Embassy New Hampshire, the center is open Tuesday through Sunday and is located inside Route 101 Local Goods in Keene, NH. Check out the video below at the Bitcoin Embassy NH in which members discuss the recent BCH hash war. 

What do you think about the Bitcoin Embassy New Hampshire? Let us know what you think about this subject in the comments section below.

Images via Shutterstock, Pixabay, and the Free Keene blog.

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Islamic Countries Challenge USD ‘Sanctioning Tool’ With Planned Common Cryptocurrency

Muslim countries around the world are planning to push back against the U.S. dollar’s long global dominance by creating a common digital currency for use in Islamic states. The dollar has evolved into a “sanctioning tool,” charged Erol Yarar, chairman of the Muslim-focused business lobby group International Business Forum (IBF). It has lost its purpose as an international trading currency, he said.
Also Read: Nvidia Misses Q3 Revenue Target as Cryptocurrency Slump Weighs on Business
 Breaking the Dollar’s Hegemony
Speaking to Turkish news agency Anadolu on Nov. 16, Yarar said a single cryptocurrency for Muslim nations will be designed primarily to undermine and challenge America’s established hegemony in the global financial system.

“The U.S. dollar is beyond a common currency, it has become a sanctioning tool,” Yarar stated. “In IBF this year we will discuss the term ‘monetary pluralism’ to create a fairer and healthier trade environment. We will make a cryptocurrency system, that will be used for international trade among Islamic countries, a current issue,” he added.
The strength of the dollar, in use as an international trading currency since the end of World War II, gives America immense financial and political leverage among perceived weaker states. It has often been used as part of an arsenal of economic tools deployed to punish nations that refuse to toe Uncle Sam’s line.
It is, perhaps, President Trump’s renewal of economic sanctions against Iran this month – even at the risk of alienating allies in the European Union – that Muslim business leaders under the IBF have been prompted to look for ways of neutralizing the dollar’s dominance in global trade.
A number of E.U. member countries are desperate to protect the Iran nuclear deal to help keep trade alive. They are currently in the process of creating a special purpose vehicle that would undermine the sanctions by redirecting payments away from the dollar and therefore away from the prying U.S. financial system. Again, America has reacted by issuing threats of dire repercussions.
But Iran is moving to protect itself against the crippling economic measures. It has announced the completion of the development of a state-backed digital currency, created specifically to circumvent the sanctions, which target the country’s oil, gas and shipping industries as well as the financial system. The system has already been hit after Swift, at the U.S.’s behest, cut off the Central Bank of Iran from the global banking ecosystem.

Following the Example of Iran
Yarar, the IBF chairman, told Anadolu Agency that it is prudent for Islamic nations to emulate Iran’s example by developing a common cryptocurrency system for use within like-minded religious countries. He detailed:
The U.S. keeps down money transfers, imposes sanctions on the international market, and causes crises in countries by using the dollar.
The planned Muslim-compliant digital currency will be used for pricing of goods by businesspeople, exchange markets and countries, he said, adding that Islamic nations should also consider setting up a fund emulating the International Monetary Fund business model.
“The fund, based on non-interest finance principles, will help countries facing an economic crisis. The fund’s name can be ‘International Islamic Cooperation Fund’,” Yara proposed.
His plans have triggered debate on whether countries currently under full, partial or covert U.S. sanctions such as Cuba, Venezuela, North Korea, Iran, Zimbabwe, Syria, Russia and Yemen could adopt virtual currency to bypass the stringent economic measures.
Venezuela recently launched its national cryptocurrency, the petro, while Russia and China are investing in blockchain technologies that will act as alternatives to the dollar in terms of global commerce.

U.S. sanctions work by placing bans on dealings and transactions with individuals, nations and companies. These restrictions are often enforced with the help of mainstream financial institutions. As such, the use of cryptocurrencies, which operate outside the established financial system, are regarded as key to helping economies under sanctions to continue transacting with other countries.
That means if a dependable cryptocurrency system to support financial transactions can be established, the power of sanctions will be diminished as the U.S. is incapable of blocking such transactions.
Binance Tells Iranians to Withdraw Their Money
In Iran, meanwhile, global cryptocurrency exchange Binance has reportedly told its remaining users in the Islamic Republic to pull out their funds from the platform in measures aimed at aligning with the American trade and economic embargo. “Iranians are not really able to trust cryptocurrency exchanges. That isn’t really something new,” Nima Dehqan, a researcher at the Tehran-based blockchain project Areatak, complained. Several exchanges, including Bittrex and Bitmex, have stopped providing services to Iranian investors on account of the sanctions.
Do you think the IBF will succeed in its plan for a common cryptocurrency for Muslim countries? Let us know in the comments section below.

Images courtesy of Shutterstock.

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One Day After the Bitcoin Cash Hard Fork: Takeaways and Latest Developments

Bitcoin Cash, the “big block” project that forked away from the Bitcoin blockchain in August 2017, “hard forked” (split) into two different coins: “Bitcoin Cash ABC” (BCH ABC) and “Bitcoin Cash SV” (BCH SV).At the time of writing, the Bitcoin Cash ABC chain has more accumulated proof of work, and its native currency, BCH ABC, is trading higher on (futures) exchanges. Most Bitcoin Cash ABC proponents, therefore, feel victorious — though many Bitcoin Cash SV proponents have not yet conceded defeat.Well over a day since the split, here are the main takeaways and latest developments.Checkpoint ControversyIt turns out that the Bitcoin ABC development team had a trick up its sleeve — and not everyone is happy with that. The developers included an unannounced checkpoint in their latest software release, which was distributed several hours after the fork.The checkpoint enforces inclusion of the first Bitcoin Cash ABC block as a new protocol rule. Any chain without this block would be considered invalid by this Bitcoin ABC software client. This has the effect that adversarial miners are unable to override (“re-org”) the entire Bitcoin Cash ABC chain — which was one of the potential threats posed by a “hash war.”The checkpoint is controversial, however, as it implies central control from the Bitcoin ABC development team over the Bitcoin Cash ABC chain. Where nodes usually follow the longest valid proof-of-work chain, a checkpoint is perceived to override this proof-of-work consensus mechanism.Of course, users ultimately decide which software they run and can opt to reject the checkpointed version of Bitcoin ABC. But this opens up the risk of the checkpoint causing another split — this time, on the Bitcoin Cash ABC chain, creating “Bitcoin Cash ABC Checkpoint” and “Bitcoin Cash ABC Classic.” (These names are just hypothetical, made up for the purpose of this article.)That said, such a split seems unlikely at the moment. According to forkmonitor.info, it would cost around $1 million to pull off at the time of writing this article.Future AttacksWhile Bitcoin Cash ABC proponents generally seem confident of their “victory,” many Bitcoin Cash SV proponents are not conceding defeat.For example, nChain chief scientist and the main man behind Bitcoin SV, Craig Steven Wright, tweeted that the “hash war” is a marathon, not a sprint: implying attacks are still coming. Coingeek and its owner, Calvin Ayre, similarly claim the hash war has only just started. Other Bitcoin Cash SV proponents also anticipate other types of attacks (like a type of spam attack dubbed “Satoshi’s Shotgun”). All this will eventually obliterate the Bitcoin Cash ABC chain, they say.There is no evidence of these types of attacks coming, perhaps with the exception of Satoshi’s Shotgun. The Bitcoin Cash network did experience a big spam-type of attack last week, and there was also much spam on the Bitcoin Cash network around the time of the hard fork. This may have been a precursor.It is also true that the status of the Bitcoin Cash ABC network was unusual for the past day, as an excessive amount of hash power was securing it (excessive relative to its respective profitability, which suggests miners were mining at a loss). This was in part because the bitcoin.com pool temporarily diverted its hash power from mining Bitcoin to mining Bitcoin Cash ABC.Over time, it is to be expected that the amount of hash power securing the Bitcoin Cash ABC chain will decrease to normal levels (normal relative to the expected profitability). The Bitcoin Cash ABC network would then also be more susceptible to 51-percent attacks.Name and TickersWith Bitcoin Cash split into two different coins, there is some contention about the names of both.What is clear, however, is that the two main software implementations are called “Bitcoin ABC” and “Bitcoin SV.”So far, BitcoinLinux has for the purpose of this article referred to the protocol and blockchain based on the Bitcoin ABC implementation as “Bitcoin Cash ABC,” while the protocol and blockchain based on Bitcoin SV has been called “Bitcoin Cash SV.” The respective currency tickers used have been “BCH ABC” and “BCH SV.” But not everyone uses these names and tickers.Many Bitcoin Cash ABC supporters in particular instead consider their protocol and blockchain to be “Bitcoin Cash,” and some probably even prefer “Bitcoin.” They also claim the ticker “BCH.”Many Bitcoin Cash SV proponents feel it’s too soon to rename anything, as they still think there will be only one chain left standing in the end: Bitcoin Cash SV, to be named “Bitcoin Cash” (or “Bitcoin”) with the ticker “BCH.”Others have come up with different names and (especially) ticker symbols altogether. These most notably include “BAB” for BCH ABC and “BSV” for BCH SV. And some exchanges don’t list BCH SV at all.For a more complete overview of the different names and tickers, see this article.For more information about yesterday’s hard fork, see this article.Thanks to Sjors Provoost for feedback and additional sources.

This article originally appeared on BitcoinLinux.

“We Did This With Gold”: Could VanEck Be Bitcoin’s Best Bet for an ETF?

Gabor Gurbacs is confident that the approval of a bitcoin exchange traded fund (ETF) is inevitable. And he’s optimistic that the VanEck SolidX Bitcoin Strategy will be the first to deliver one to the world.The director of Digital Asset Strategy at VanEck/MVIS, Gurbacs, as of late, has become a leading voice on the space’s ETF pursuit at a time when industry chatter on the topic has never been louder. If you haven’t found him extolling the benefits of a bitcoin ETF on Twitter, you may have come across his interviews on Anthony Pompliano’s podcast and Ran Neu-Ner’s Crypto Trader show for CNBC Africa.“America wants a bitcoin ETF,” he told Ran Neu-Ner, “We’re close. It really depends on the SEC whether or when they’re going to approve it.”To find out more about what an ETF is, what it would look like for bitcoin and who alongside VanEck is vying for one, check out our November cover story.As confident as Gurbacs may appear, some might say the director is too confident in his surefire predictions. Historical precedent isn’t exactly in his favor, after all. The VanEck SolidX Bitcoin Strategy is one of only two proposals, the other being the Bitwise HOLD 10 Cryptocurrency Index Fund, that hasn’t seen a decision.  As for the other filings, the SEC has rejected nearly every proposal that has come across its desk, although its last nine rejections, which were made at the staff level, are still pending review by the Commission.Even against these odds, Gurbacs believes VanEck and SolidX is poised to buck the trend, especially since the asset management firm has set its own precedent that Gurbacs thinks will swing odds in VanEck’s favor: a history of bringing institutional products to market.A History of Firsts“VanEck has a history of building international stock and gold investing, in the U.S. and abroad,” Gurbacs said in an interview with BitcoinLinux.VanEck introduced the first gold equity mutual fund back in 1968 (the VanEck International Investors Gold Fund, which is still around), at a time when the global gold market accounted for a little over $200 million and gold was fixed at $35 per ounce. Half a century later — and with the gold standard for currency backing now obsolete in the U.S. — gold is at $1,200/ounce with a $7.4 trillion market cap and is considered “a global safe haven asset,” as Gurbacs put it. He attributes this growth and the store-of-value status gold has enjoyed since the ’60s to the institutionalization that high-grade investment assets like an equity fund or an ETF provide to the market.As his favoritism toward gold might betray, VanEck’s founder, John van Eck, was actually a direct student of Austrian-American economist Ludwig von Mises, “one of the earliest gold bugs in the U.S.” In the 21st century, VanEck’s pursuit of a finite, globally recognized asset is proving to be generational. VanEck’s current CEO, Jan F. van Eck, John van Eck’s son, has been a pioneer of sorts, as well, leading the company to introduce what Gurbacs called “some of the first non-traditional ETFs” to the U.S. market. Under his direction in 2006, for instance, VanEck launched the VanEck Vectors Gold Miners ETF, a “comprehensive portfolio of global gold miners,” according to VanEck’s website.These gold-focused products were the successors both of the work John van Eck built with the world’s first gold equity mutual fund and of the philosophy his open attitude toward fringe assets instilled in his firm’s investment vision. Now, following in his father’s footsteps, Jan F. van Eck has taken to bitcoin with a similar forward-looking interest, just as his father did with gold decades earlier.Jan F. van Eck, among others in the wider investment community, sees bitcoin as “somewhat of a digital gold,” Gurbacs said, so it makes sense that VanEck is going for gold again in its efforts to win the SEC’s approval for the world’s first bitcoin ETF.VanEck’s interest in bitcoin also makes sense when you consider the market parallels between it and its old world predecessor. Much like its cryptographic counterpart, gold’s first investment vehicles were originally scrutinized as highly volatile, speculative assets, suffering from a stigma similar to the one that bitcoin has faced in its brief, nearly 10-year history.“Back then, gold wasn’t sexy. It was like bitcoin a few years ago,” Gurbacs quipped. A Bid to Make Bitcoin AppealingThe Bitcoin community and the crypto market as a whole seems to be clamoring for an ETF. But so far, the SEC has been holding off on giving its approval.Gurbacs finds that the agency’s rejections stem from the same set of problems that applicants time and again have failed to address, namely “pricing, custody, liquidity and manipulation of the underlying asset.”The sourcing data for these past filings comes from markets and exchanges that are too loosely structured for the SEC to take them seriously, as the underlying spot market is still unregulated on a federal level.“Regulators were very keen on the fact that spot platforms like Coinbase, Gemini and the like are technically regulated entities but not really meant to be brokers for commodities,” said Gurbacs. “In some regulators’ eyes, these entities aren’t regulated,” even though platforms like Gemini and Coinbase are regulated on the state level in New York.The cryptocurrency industry’s spot exchanges lack many of the investor protections that traditional markets feature by regulatory default, such as the surveillance-sharing strategies that the SEC has said are key prerequisites for getting an exchange trading product approved.Gurbacs explained that, in the U.S., equities, commodities, futures and the ETF market make it so that “all of the market data is accessible to regulators should they subpoena or flag any suspicious activity.”In an attempt to appease the SEC, applicants began to pivot toward the futures market in an attempt to give the regulator what it had been asking for: a market that is fully regulated under federal law.VanEck actually started this trend, applying for the first bitcoin futures ETF at the tail-end of last year before the CME and Cboe began trading futures (this is why the SEC promptly asked the firm to withdraw its application twice).The nine applications that were rejected at the staff level and then called up for revival by the Commission in September 2018 took a cue from VanEck, pricing their bitcoin futures ETFs from the now-live CME and Cboe futures contracts.But these futures draw their own prices from the underlying spot markets of popular exchanges, something that played into the SEC staff’s initial rejection rationale. “CME Bitcoin futures are based on the CME CF Bitcoin Reference Rate (BRR), which aggregates bitcoin trading activity across major bitcoin spot exchanges,” the CME website states. For its part, the Cboe sources pricing data from the Gemini exchange, which Gurbacs points out only accounts for “a small percent of daily bitcoin trading volume on a good day.”So, not only do these ETFs’ pricing sources lack a regulated market structure, but their transaction volume is too slim to guard against manipulation, the SEC’s thinking goes. And while they’re pending review by the Commission, Gurbacs thinks that, ultimately, there’s nothing novel enough about the filings to convince the SEC to change its mind.“I don’t expect the SEC to walk back on its decision over those 9 ETFs because none of the providers solved any problems related to market structure issues that the SEC clearly outlined. I’m glad they’re reviewing and doing their jobs, but I don’t see any change.”Forging the Way ForwardTo avoid stumbling into the pitfalls of its competitors, VanEck has been careful to follow all of the SEC’s directions. In sum, this involved creating a market structure with more structural integrity than the one pitched to the SEC in other filings.“We’ve met with regulators a few times and made sure we understand their questions, spending years — literally years — to answer those questions and build the proper market structure: what’s the right pricing, should surveillance be in place, how do you trade institutionally, how do hedge against market manipulation,” Gurbacs said.These steps involve guaranteeing institutional-grade insurance for the fund, setting up proprietary custody arrangements with an undisclosed bank and settling the ETF’s shares in cash, rather than in-kind with bitcoin because, as Gurbacs put it, “unfortunately, the U.S. prime brokerage system and custody system is not set up to handle physical redemption in bitcoin right now.”Proving its worth to the SEC also means that VanEck has to show that its pricing sources differ from competing applicants. To clear this hurdle, VanEck has built its own pricing source from the ground up, based on feedback from the SEC.According to Gurbacs, the source draws from three established over-the-counter (OTC) pricing feeds from regulated broker dealers or affiliates of regulated broker dealers, though he couldn’t disclose further information as its currently not public. However, it is similar to an index that one of VanEck’s subsidiaries, MVIS, created in league with CryptoCompare. MVIS also features indices for many mainstream investment products, and Gurbacs believes that its bitcoin pricing feed subjects the fund to the same “rigorous practices, regulatory-driven disclosures and client protection rules” that the SEC wants to see in a bitcoin ETF.The ETF EffectThe biggest underappreciated scaling platform for Bitcoin is the financial system.Given VanEck’s commitment to fully addressing the SEC’s feedback, Gurbacs is hopeful that the VanEck and SolidX’s filing will be the first to win over the regulatory agency, and he attributes this optimism toVanEck’s “over a half of a century of history with U.S. regulators” in working to bring products to market.Toward the end of our conversation, Gurbacs reiterated the company’s history of crafting first-of-their-kind products, returning to VanEck’s work with sponsoring the first gold equity fund in a nod to the commodities’ similarities to bitcoin. He hit on the meteoric growth gold enjoyed as a result of its institutionalization, and he stressed that bitcoin could experience a similar trend.But when asked to clarify if he thinks that a bitcoin ETF would catapult the asset to new heights, Gurbacs hesitated. Instead, he insisted that it’s not about the price effect an ETF would have, but rather, what it will mean for legitimizing bitcoin and freeing up avenues for adoption.“That’s tough for me. I’ll be up front: I do not like price prediction. I don’t think that’s the important part. Providing access to the assets in a regulated and globally accepted way is the important aspect of our efforts. I’m hoping that the impact is that people who previously couldn’t get involved with buying bitcoin will also get into the market; it’ll also help adoption.“Bitcoin does not need an ETF, but it would benefit from having an ETF. An ETF would help bitcoin survive for at least 100 years. And I’m not kidding with this. There was gold trading before a gold fund or a gold ETF, but when the first product came out, the gold market grew tremendously, practically from $200 million to $7.4 trillion, and toward the end of the spectrum (5-10 years), volatility dampened and gold established itself as a global store of value — a government hedge, a hedge against global markets. Bitcoin is just like gold. It needs financialization in order to get more liquidity and achieve the status of a true store of value. Financialization is good for bitcoin. It helps liquidity, it helps adoption, it helps with scaling. The biggest underappreciated scaling platform for Bitcoin is the financial system.”Bitcoin maximalists and the crypto community faithful might take issue with Gurbacs’ final statement. Some have made the argument that an ETF is fundamentally incompatible with bitcoin’s ethos. They have argued that instead of helping Bitcoin, an ETF would actually be a stain on the industry.It seems that this is one area where bitcoiners and the SEC can find common ground, seeing as they’re both likely to argue that bitcoin should not be subsumed by the traditional financial sector. But Gurbacs, who holds that the “ETF is, in some ways the most trust-minimized of all trading vehicles,” believes that there’s common ground still that both sides are ignoring.“We built our ETF so that it stays closer the core values of Bitcoin: holding physical bitcoin, providing verifiable, issued supply so there are no reserves that are unaccounted for.”He added: “Bitcoin maximalists don’t talk about the middle ground where Bitcoin does fit into the U.S. capital market — and on the regulatory side, arguments also always go that it can’t fit in it.”Rounding out our talk, Gurbacs echoed Hester Peirce’s own interview with BitcoinLinux, insisting that the demand for an ETF is too high to ignore. He also thinks that the SEC would be doing more harm than good by restricting free-market access to a sounder investment vehicle than is currently available on the market.“The SEC’s job is to keep a fair and orderly market and protect investors. Regulators shouldn’t say that ‘bitcoin is not a good asset and therefore we’re not going to let an ETF happen.’ They should evaluate whether the disclosures are right or not and let the market decide whether the asset has merit. I think regulators have made merit based decisions before, and regulators might have implied bitcoin has no merit. Given that this is a new asset class, they’re a little afraid.“Right now the regulatory environment not approving an ETF fosters this grey-area activity. Lightly regulated trading platforms, which often operate without investors having any regulatory recourse, force investors into a grey area, versus giving them something like an ETF, a fund structure that has decades of history and fits into a proper regulatory regime and has customer protections. My biggest frustration is: how is it possible that a well-constructed, insured, liquid ETF is not ok — but it’s ok for random technology companies, with often no license, to sell bitcoin in the U.S.? It’s kind of weird. So, by not making a decision and not letting an ETF set a higher standard, this gray area of activity is fostered and the whole U.S. principle of free market competition is also violated, and the SEC’s principles of protecting investors and ensuring fair and orderly markets is violated.”With VanEck’s current filing slated for a decision by December 29, 2018 — or February 28, 2019 at the latest, if there is a delay — Gurbacs might get his wish. Even if he doesn’t, the director insinuated that the firm will continue to wrestle for an institution-grade product, however long that may take.“We’ll continue to engage and fight this fight to do our part as an asset manager to help the digital asset space mature. So it may not be a short fight — I don’t know. But we have done this with gold in the ’60s, and hopefully now, we’re building the right basis that will stay true to bitcoin as well as integrate it into the U.S. capital markets.”

This article originally appeared on BitcoinLinux.

Progress Report: Lightning Network Surpasses $1M BTC Capacity, 4,000 Nodes

The Lightning Network continues to post steady growth.According to data from 1ML, the network is now supported by roughly 4,070 nodes, which house just over 12,500 payment channels, an average of 10.91 channels per node (at time of publication). Most of this growth has come in the later half of 2018, as the average age of each node is just 137 days old.With infrastructural growth, the network is also seeing an uptick in liquidity. At the time of writing, the network’s collective capacity now stands at 223.65 BTC, which, at bitcoin’s current price, means the Lightning Network holds over $1.2 million worth of bitcoin for the first time in its less-than-one-year history. The average capacity for each node and payment channel comes in at 0.114 BTC ($633) and 0.019 BTC ($107) respectively, and with transaction fees at 1 sat (roughly $0.000056), the network’s promise to deliver low-cost microtransactions is holding up.A long-awaited development in the cryptocurrency space, the progress of the Lightning Network has been watched with great interest by the community. Heralded as a potential solution to Bitcoin’s the scalability problem, the Lightning Network operates as a secondary layer on top of Bitcoin’s base network. After its launch in early 2018, the Lightning Network saw immediate interest from developers, who began building various Lightning applications on the network. Alongside its use as a secondary layer for micropayments, many developers have taken notice of the Lightning Network’s potential impact on the world of smart contracts as well. Disclaimer: The data presented here may not constitute a holistic picture of the Lightning Network’s current makeup, as 1ML points out on its website, “[These] statistics are aggregated and calculated from multiple nodes within the Lightning Network. Due to the decentralized nature of the Lightning Network, the numbers observed are approximations and nodes that don’t broadcast their state are not included.”This article was updated to include a more accurate figure of the network’s bitcoin capacity at the time of publication.

This article originally appeared on BitcoinLinux.

SEC Settles Charges With Two ICO Issuers

The U.S. Securities and Exchange Commission (SEC) has settled charges with two initial coin offering issuers. These cases are the commission’s first to impose civil penalties “solely for ICO securities offering registration violations.” Both companies have agreed to refund investors, pay penalties, and register their tokens as securities.
Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space
Charges Settled
On Friday, Nov. 16, the SEC announced “settled charges against two companies that sold digital tokens in initial coin offerings (ICOs).” The agency explained that Carriereq Inc. (aka Airfox) and Paragon Coin Inc. both “consented to the orders without admitting or denying the findings,” elaborating:

These are the commission’s first cases imposing civil penalties solely for ICO securities offering registration violations. Both companies have agreed to return funds to harmed investors, register the tokens as securities, file periodic reports with the commission, and pay penalties.

The two companies’ tokens are neither registered with the SEC nor qualified for an exemption to the registration requirements.
Stephanie Avakian, co-director of the SEC’s Enforcement Division, emphasized that “companies that issue securities through ICOs are required to comply with existing statutes and rules governing the registration of securities.”
The SEC further detailed:

The orders impose $250,000 penalties against each company and include undertakings to compensate harmed investors who purchased tokens in the illegal offerings.

These two cases follow the agency’s first non-fraudulent ICO registration case of Munchee Inc. The SEC did not impose a penalty in that case because the company stopped its offerings before delivering any tokens and promptly refunded investors.
The Two Companies
Both Airfox and Paragon conducted token sales last year after the SEC warned that ICOs can be considered security offerings in its DAO report, a landmark paper that serves as the defining document for ICOs to avoid being categorized as securities in the U.S.
Boston-based Airfox raised approximately $15 million by selling 1.06 billion of its tokens to more than 2,500 investors globally through various websites that it controls. The company claims that the funds would be used “to finance its development of a token-denominated ‘ecosystem’,” the SEC described.
Established in July last year, Paragon sold its tokens to approximately 8,323 investors, including those in the U.S. The company “raised approximately $12 million worth of digital assets to develop and implement its business plan to add blockchain technology to the cannabis industry and work toward legalization of cannabis,” the commission noted.
Paragon issued a statement on Friday confirming that it has reached a settlement agreement with the SEC after working on it with a team at the commission for over a year. CEO Jessica Versteeg calls it “a very positive agreement … that will effectively put an end to the uncertainties of the legal status ” of her company’s token.
What do you think of the SEC settling charges with the two ICO companies? Let us know in the comments section below.

Images courtesy of Shutterstock and the SEC.

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The post SEC Settles Charges With Two ICO Issuers appeared first on BitcoinLinux.

ICO Issuers Settle Registration Charges With SEC

The U.S. Securities and Exchange Commission (SEC) has agreed to settle charges with two startups that sold tokens through Initial Coin Offerings (ICOs) in 2017. The companies were charged by the SEC for running their ICOs after the regulator clearly defined such offerings as unlicensed securities in its DAO Report of Investigation. The startups indicted by the SEC are Boston-based Airfox, which sold $15 million worth of tokens, and Paragon Coin, which raised $12 million selling tokens. “We have made it clear that companies that issue securities through ICOs are required to comply with existing statutes and rules governing the registration of securities,” Stephanie Avakian, co-director of the SEC’s Enforcement Division, explained in a release. “These cases tell those who are considering taking similar actions that we continue to be on the lookout for violations of the federal securities laws with respect to digital assets.”The two cases happen to be a first for the commission where civil penalties were imposed for “ICO securities offering registration violations,” and they follow the commission’s first non-fraud case against Munchee Inc. in 2017, when it stopped the startup’s token offerings and instructed the company to return proceeds to investors.The companies involved have, however, agreed to settle the case without admitting to or denying the findings from the regulator. Each company will pay a $250,000 fine to the SEC and compensate investors who purchased the tokens. Both startups are also required to register their tokens as securities and to file periodic reports to the SEC.Steven Peikin, co-director of the SEC’s Enforcement Division, believes the new model affords investors the ability to be compensated for purchasing unregistered securities.“By providing investors who purchased securities in these ICOs with the opportunity to be reimbursed and having the issuers register their tokens with the SEC, these orders provide a model for companies that have issued tokens in ICOs and seek to comply with the federal securities laws.”This is the SEC’s second settlement in less than 30 days. Just last week, it reached an agreement to settle charges leveled against the founder of decentralized exchange EtherDelta, Zachary Coburn. Coburn, who had been accused of running an “unregistered national securities exchange,” agreed to pay more than $300,000 in penalties. As detailed in its end-of-the-year report, 2018 has been a busy year of enforcement for the regulatory agency as it continues to crack down on unregistered cryptocurrency companies.

This article originally appeared on BitcoinLinux.

After the Fork: Here’s How Exchanges Are Dealing With Bitcoin Cash

The smoke is still clearing from Bitcoin Cash’s hard fork, but exchanges have already moved in to add support for the products of the skirmish.On November 16, 2018, what was intended to be a routine hard fork upgrade of the Bitcoin Cash blockchain became a struggle for hashing power and chain dominance as Bitcoin Satoshi’s Vision (SV), led by Craig S. Wright, attempted to wrestle control over the Bitcoin Cash blockchain from its original client, Bitcoin ABC.Bitcoin ABC (thus far) has strong-armed Bitcoin SV with its mining power and held onto its position as the dominant chain, but yesterday’s showdown still culminated in a coin split that left the network with two rival coins, which, for the purpose of this article, we’ll refer to as BCHABC and BCHSV.And this split has left a mess of potential markets for exchanges to manage. In the aftermath, they’re stuck with either choosing to support both coins, default to the ABC chain as the real BCH or sit tight until they feel comfortable making a decision either way. Not every exchange is on the same page for what each coin’s ticker should be either, and some seem content to ignore the forks’ janus-faced by-products and carry on with their usual bitcoin cash trading.Varying Levels of SupportA handful of exchanges have announced that they will be supporting both coins for the time being.Some, like Poloniex, HitBTC and Bittrex got ahead of the game by offering futures trading between the two coins before the hard fork even took place. Announced on November 7, Poloniex first featured futures in the run up to the fork and, since the coin split, it has integrated support for coins under the tickers BCHABC and BCHSV in the form of BTC and USDC trading pairs.
We’ve finished converting all BCH balances to BCHABC and BCHSV. The BCH market is now disabled. BCHABC/BTC, BCHSV/BTC, BCHABC/USDC, and BCHSV/USDC markets are open. Deposits and withdrawals of BCHABC and BCHSV are still paused, and will remain paused until the networks stabilize.— Poloniex Exchange (@Poloniex) November 15, 2018

HitBTC revealed in a blog post on November 9 that it would open pre-fork trading for both BCHABC and BCHSV. On November 13, top-5 exchange Bitfinex also followed the trend, noting that it would roll out pre-fork trading for ABC and SV in the form of chain-split tokens (CST). These before-the-fact trading vehicles could be created by or redeemed for bitcoin cash at any point and, since the fork, they have been replaced with the actual forked coins under the tickers BAB (for ABC) and BSV (for SV) on Bitfinex and BCHABC and BCHSV on HitBTC.Other top exchanges, like Binance and Bittrex, played the fork patiently, waiting to see if the Bitcoin Cash network would split before restructuring its bitcoin cash trading. Binance, for instance, waited for the conflict to die down before blogging that it would open markets for BCHABC and BCHSV against BTC and USDT.Unlike its peers, Bittrex is waiting a bit longer before it treats SV with the same gravity as its BCH predecessor. On November 7, the exchange published a blog post that said it would default to ABC’s implementation as the main chain leading up to the fork, while also assuring customers that their accounts would be credited with the split BCHSV coins following the fork. So far, BCH remains as the only coin with trading support on the exchange, as it is waiting for further clarity before it decides to restructure its markets.“The ‘BCH’ ticker will remain the Bitcoin ABC chain before the hard fork block. Bittrex will observe the Bitcoin Cash network for a period of 24 to 48 hours to determine if a chain split has occurred and the outcome,” the post reads.Kraken took Bittrex’s (tentative) support of ABC as the main chain a bit further. Announcing in a November 10 blog post that, “[initially, it] will only support Bitcoin ABC.” Kraken went on to reveal that it would not automatically accommodate chain-split coins. Instead, users would have to claim these manually by moving their coins off the exchange.“We will not support any alternative chains for funding or trading on the day of the fork. We will then monitor the situation in the weeks and months after the fork and evaluate whether or not any changes to our stance are warranted, including the possibility of supporting an alternative chain. However, we make no promise or guarantee that any alternative chain will be supported … If you want the option to preserve/claim tokens on alternative chains, you must withdraw your BCH from Kraken prior to funding being disabled on November 15th. By leaving your coins on Kraken through the upgrade, you are potentially forfeiting any coins on alternative chains that might otherwise be available to you,” the post reads.In the same post, Kraken signaled that, above all else, it would err on the side of caution, writing, “After the fork we will not enable BCH funding until we think it is safe to do so, and we do not know in advance how long this may take.”As Binance, Bitfinex and Poloniex’s actions suggest, in the comedown of the forking euphoria, some exchanges have surrendered to the reality of Bitcoin Cash’s network now housing two competing coins. Others, like Bittrex and Kraken, are biding their time to see how this continues to unfold — after all, the fork isn’t even 24-hours old yet.Still other exchanges have also opted to wait to see how they should proceed, many of which have suspended deposits, withdrawals and trading for BCH until the dust settles. Coinbase announced that it will “ensure that customers have access to their funds on each chain” if they’ve left their BCH on Coinbase platforms.This article will be updated periodically to include other exchange support news as the story develops.Update, November 16 [20:39 UTC]: According to a tweet by Jack C. Liu,  a handful of Chinese exchanges are referring to BCHABC as “Wu Bitcoin” and BCHSV as “Astralia Bitcoin.”
Some Chinese exchanges listing ABC as 吴比特 – Wu Bitcoin and SV as 澳比特 – Australia Bitcoin pic.twitter.com/mi1fXyhTcn— Jack C. Liu [Bitcoin SV] (@liujackc) November 16, 2018

Update, November 16 [20:45 UTC]: An unconfirmed post on the r/btc subreddit has begun compiling a list of exchanges that, thus far, have defaulted to assigning the BCH ticker to the ABC fork’s rule set. Among those allegedly acting in league with Bittrex and Kraken are Coinbase, Coinone, Bitstamp, Bithumb and Upbit.

This article originally appeared on BitcoinLinux.

A New Approach to Thwarting “Selfish” Bitcoin Miners

Selfish mining is an attack on the Bitcoin network that has been known to be possible for several years. By propagating new blocks slowly (on purpose or by accident), a loophole is opened for miners to unfairly increase their profits in relation to other miners.However, researchers Cyril Grunspan and Ricardo Pérez-Marco claim that by broadcasting the presence of orphan blocks, selfish mining can become a thing of the past.Grunspan, a professor at Paris’ ESILV graduate school of engineering, and Pérez-Marco, the director of research at the National Center for Scientific Research (CNRS) in Paris, have authored a report on the costs of selfish mining and its profitability, which they believe have been largely ignored by the Bitcoin community. As former mathematicians, both men were introduced to Bitcoin in 2011 and developed a lasting taste for it. The authors have worked hard to increase awareness and adoption throughout France and recently organized the Paris Cryptofinance Seminar, which took place in October 2018. Speaking with BitcoinLinux, Pérez-Marco describes selfish mining as a “block-withholding strategy,” and says it was first discovered in 2012 in the BitcoinTalk Forum. Rogue (selfish) miners do not publish mined blocks as indicated by the Bitcoin protocol, but instead try to build an advantage with respect to the official blockchain so they can invalidate a maximum number of honest blocks when releasing their secret chain. Pérez-Marco says the duo has made two main contributions to the analysis of this problem. “The first one is to build a correct model for the profitability of the strategy that was lacking, based on the iterative games (inspired from other gambling problems) that account for the profit and loss per unit of time.” Based on this model, Pérez-Marco says that without a difficulty adjustment, the honest mining strategy still ranks as the most profitable one, as selfish mining tends to be a somewhat costly procedure. Thus, it follows that most selfish miners do not attack the Bitcoin network itself, but rather attack the difficulty adjustment algorithm, making it easier for them to garner equal rewards with honest miners while using less computing power. “From this, it became clear that a major bug in the Bitcoin protocol resides in the difficulty adjustment formula,” he comments. The second contribution they’ve made involves using “martingale theory” to compute the exact formulas for the profitability once the difficulty adjustment formula is accounted for. Martingale is an algebraic principle in which the values of all random variables are equal to each other, so the value of X1+X2 would be equal to Y1+Y2 and Z1+Z2. “We could also derive new closed-form formulas for the profitability of other block-withholding strategies, like stubborn mining or trail mining that were only studied before numerically,” Pérez-Marco says. He and his counterpart Grunspan believe an improvement to the Bitcoin protocol to make it immune to selfish mining is necessary. In the paper, the authors introduce a method that they claim can divert many of the effects of selfish mining. “It is all very simple, indeed,” Pérez-Marco asserts. “Since the damage of selfish mining is done by invalidating or orphaning honest blocks to lower the difficulty artificially, it would be enough to examine this wasted hash rate in the formula for the adjustment of difficulty. We propose a way to do that. Then, the selfish miner will not be able to lower the difficulty, and his strategy will remain non-profitable compared to honest mining.” In the document, the proposed countermeasures involve peers broadcasting headers of new orphan blocks. These are blocks that get validated but are not included on the official blockchain, and thus represent wasted hash power. Miners then incorporate these headers into their blocks, and the difficulty adjustment formula then integrates the overall production of orphan blocks. “In this way, the difficulty parameter reflects the true and total hash rate of the network as it was intended by Satoshi Nakamoto,” Pérez-Marco states. “The theorem we proved — that without difficulty adjustment, all other non-honest strategies are non-profitable strategies — is a remarkable fact. To prove this theorem, there was a need for a proper analysis of the profitability. It is hard to imagine how Nakamoto could have foreseen this.” Pérez-Marco believes that, in the long term, the Bitcoin network will steady itself, and no difficulty adjustments will be necessary. He refers to this idea as the “Bitcoin Stability Theorem” and says that, by using the analysis of their paper, developers can propose BIPs that prevent selfish mining and other block-withholding strategies in the future. To view their full report, click here.

This article originally appeared on BitcoinLinux.