News Bitcoin: World leaders embracing for fear of losing control

Bitcoin: World leaders embracing for fear of losing control


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President Vladimir Putin waves to participants of the 19th World
Festival of Youth and Students during the closing ceremony at the
Olympic Park in Sochi, Russia.


  • World leaders are embracing cryptocurrencies so that
    they have some say in its future.
  • Russian President Vladamir Putin pulled a complete 180.
    Last yea rthe country considered jailing bitcoin owners, but
    now has invested in crypto mining companies. 


may be one of the biggest threats to governments, security and
the entire financial system that we’ve ever seen. It can help
fund terrorism and its anonymity makes it almost impossible to
track. Most importantly, it is poised to revolutionize global
finance and banking.

But our new Enemy No. 1 can’t be fought; it can perhaps be
controlled. Banks have figured that out and are bringing crypto
currency into the fold.

The superpowers—U.S., China and Russia–will have to face the new
reality. They love to hate it and hate to love it. Regardless, if
they don’t embrace it, they won’t be able to control it. An enemy
you don’t control is a much bigger threat.

So, welcome to the new balance of power, funded by

“This will ‘uberize’ banking to the extent that the major banks
are spending billions to get into this Blockchain,” says Frank
Holmes, legendary gold investor, CEO of US Global Investors and
Chairman of HIVE Blockchain Technologies, the first
public company where investors can participate in the build-up
and infrastructure of crypto-mining.

is the catalyst for crypto-mining the way emails were for the
Internet. When we first heard about the Internet it was for the
‘dark world’, but with email, it exploded and became mainstream.
Ethereum takes crypto-mining further with smart contracts,”
Holmes told

The period of uncertainty is over

Russia is embracing it, with an eye to dominating it. China has
banned it. The U.S. is struggling to figure out how to regulate
it. But nothing can hold it back.

And now, many believe the uncertainty is over.

China tried to ban it in September, making it illegal for
residents to trade in cryptocurrencies or start-ups to raise
funds through ICOs, completely shutting down local cryptocurrency

Bitcoin’s price plunged 40 percent. Then it recovered almost

This was a reminder that cryptocurrency is an autonomous system
that can’t be knocked out.

“The ethos behind blockchain has been tested,” Ken Sangha, COO of
Open Money and the Open Project in San Francisco, told Forbes. “A central, organized and
powerful authority — China — said ‘no’ and we all have been
tested worldwide because of it. But the system flexed its
muscles. It’s doing what it was supposed to do.”

And its muscles are the envy of tangible currencies everywhere.
Bitcoin hit a record $6,000 per coin on 21 October. Naysayers
came out of the woodwork to say it couldn’t possibly last, and
definitely couldn’t go any higher. Wrong again. By the last week
of November it was approaching $10,000 a

Threats and opportunities

The potential security threats are clear and present, but let’s
put things like new avenues of terrorism funding into

At this point, terrorist groups are certainly eyeing their
options with cryptocurrency, and testing the waters. In January, we saw what appears to be the
first case, with the Indonesian government claiming that members
of the Islamic State were transferring Bitcoin to each other.

Terrorists could create a virtual currency that is even more powerful and untraceable—one that
can completely bypass the global banking system. It hasn’t
happened yet, but the potential is there.

While terrorist groups may be mildly courting cryptocurrency,
it’s not widespread. Speaking to Newsweek, the Rand Corp’s Joshua Baron, a
cryptographer and mathematician, says he doesn’t really see
Bitcoin as the “go-to currency for terrorists”—yet. “It does not
offer enough anonymity.”

While terrorism is a threat to the security of all states,
another threat to the U.S. is an opportunity for Russia:
sanctions busting.

The rise of digital currency means that Russian officials
sanctioned by the U.S. and the European Union have a way to send and receive money.

While the U.S. Treasury’s Terrorism and Financial Intelligence unit puts
sanctioned individuals on a blacklist that keeps them from doing
any business in U.S. dollars, cryptocurrency, which isn’t backed
or controlled by any state, makes it possible to bypass the

But even this pales in comparison to the bigger story here:
Bitcoin and its fellow cryptocurrencies are challenging the
foundations of the global banking system.  

Disruption of the global banking system at this point is
“inevitable”, Bala Venkataraman, global chief technology officer
of banking and capital markets for Computer Sciences Corp, whose
sister company runs the IT backbone of the National Security
Agency (NSA), told Newsweek.

“Cryptocurrencies could become the new driver of international
business and financial transactions, and that would be
transformative, if not revolutionary,” says Dr. Makarenko, whose
consulting firm advises Fortune 500 companies.

But here’s the problem:

“If we don’t truly understand how they are operating, who is
controlling them and how to avoid it being used for illicit
purposes, it may inadvertently turn out to be one of the most
innovative turning points in the underworld, whether it’s
organized crime, terrorism financing or corruption.”

The crypto ‘embrace’ is all about control

Just last year, Russia was toying around with throwing Bitcoin
owners in prison, characterizing cryptocurrency as
an infectious pyramid scheme.

Now, Vladimir Putin’s Russia is ready to embrace
cryptocurrency—if only to control it.

The real push started in July, when a Putin aide unveiled his
cryptocurrency mine: an industrial-scale server farm called
Russian Miner Coin. In September, the company held an initial coin
offering (ICO), raising over $43 million in Bitcoin and Ethereum.

Then came the regulatory push. After all, Russia has lost an
estimated $310 million this year alone due to
lack of ICO regulation.

In late October, Putin issued five presidential orders for controlling
cryptocurrency. This means everything from taxing coin miners and
regulating initial coin offerings (ICOs) to creating legislation
for new blockchain tech and setting up a single payment space,
presumably with the Central Bank.

Still, the Russian government is not entirely unified on the issue. The Central
Bank thinks blockchain is cool, but isn’t keen on cryptocurrency
itself. They’d like to have something like a crypto-ruble that
could track transactions from cryptocurrencies into rubles.

It’s far more than a fad. Cryptocurrencies are becoming
increasingly visible across Russia. Mining is becoming so
pervasive, in fact, that computer stores are having a hard time
keeping graphic and video cards in supply.

The Russian Finance Minister, Anton Siluanov, has even gone as
far as to say that cryptocurrency will soon be treated like
regular financial securities.

There’s no point in prohibiting this reality, says Siluanov.

The U.S. might be of the same mind—broadly speaking, but it’s
moving at a slower pace in the race to control the world’s new

And it’s its own worst enemy in this scenario, says Dr. Tamara
Makarenko, managing director of West Sands Advisory, a UK-based
global consulting firm. 

But Russia, for one, is much more motivated. Cryptocurrency is a
great way to skirt sanctions.

 “The U.S. is rightfully concerned about cryptocurrencies,
but like anything that may have a negative impact on national
security, there are way too many stakeholders that need to be
brought to the table to discuss, so the U.S. is not capable of
acting quickly,” Dr. Makarenko told

“The right conversations are taking place, but at the end of the
day, it is in the U.S. interest to secure the value of the global
position of the dollar.”

So, while China is banning cryptocurrency and the U.S. is still
trying to figure things out, Russia seeks to dominate.

But just like China’s ban will be largely ineffective, so too
will Russia’s move to dominate. Cryptocurrency is stateless, and
that is its real power. It can be regulated, but not enslaved.

Resilience Proven, Investors Flock to the Future

Right now, about 85 percent of the world’s bitcoin trading
volume comes from China. Countries with heavily subsidized energy
are obvious ether mining haunts, but now the colder countries
have something to offer that has nothing to do with the
government, and doesn’t involve any legal gray areas that will
come under scrutiny.

With even Putin’s IT advisor getting into the great game, hoping
to challenge China’s hegemony in Bitcoin mining,
the race is on in full force. They’re hoping to capture 30 percent of the global
cryptocurrency mining share in the future.

Japanese billionaire Masatoshi Kumagai, co-founder of giant GMO
Internet, announced plans recently to invest over $90 million in a new Bitcoin mining
business that will operate as a fund, partially by soliciting
capital from investors and repaying them in cryptocurrency.

In North America, billionaire backing is going into HIVE, via
Lionsgate Entertainment and Goldcorp superstar Frank Giustra, a legendary mining figure known
for being in the right place at the right time—and always in
front of a trend.

The new Great Game is virtual reality, and while governments are
busy trying to figure out how they can control it, investors are
busy sinking billions into what is fast becoming a story of
industrial-scale cryptocurrency mining.

Now that everyone’s seen how resilient Bitcoin is, not only are
things moving to the industrial phase, but everyone’s weighing
the best venues for mining. Because even though this is virtual
reality, location still matters.

That’s why HIVE has set up in Iceland, where Mother Nature’s
natural cooling is friendly to these massive computing
facilities, and where the massive energy required to mine
cryptocurrency—in this case Ether–on an industrial scale is
cheaper thanks to plentiful hydroelectric and geothermal sources. First,
HIVE put $9 million into Hong Kong-based Genesis Mining Ltd., which just built the
biggest ether-mining facility in the world—Enigma. Genesis acquired 30% of HIVE in the deal. A
second deal in mid-October saw HIVE close a $30-million bought deal financing, completing
a $7-million investment by Genesis Mining, acquiring a second
data center in Iceland.

And now HIVE is setting up in another ‘cold country’—Sweden—with Genesis.

From China and Russia to North America, virtual is the reality.
It’s no longer a question of whether cryptocurrency will survive.
It’s a question of what it will disrupt on its way to the top of
the global finance chain.

Get the latest Bitcoin price here.>>

Read the original article on Copyright 2017.

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