As EU Regulations Tighten, Crypto Options Exchange Deribit Moving from Netherlands to Panama

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As EU Regulations Tighten, Crypto Options Exchange Deribit Moving from Netherlands to PanamaDeribit, a cryptocurrency options exchange that does not currently require customers to identify themselves, will relocate to Panama from the Netherlands, the exchange says in a letter to customers obtained by Bloomberg.

According to the outlet, the Deribit communiqué says that new EU rules likely to be adopted in the Netherlands, “would mean that we have to demand an extensive amount of information from our current and future customers.”

Cryptocurrency fans typically prize privacy, but law enforcement, regulators and tax departments across the globe have become increasingly concerned in recent years about possible criminal use, money laundering, terrorist financing and tax evasion involving cryptocurrencies.

According to data obtained by Bloomberg from Skew, Deribit handles 80% of the world’s crypto options trades.

The outlet says Deribit has already moved its servers to London and, as of February 10th, “The exchange will be operated by DRB Panama Inc., a fully-owned subsidiary of the Dutch company Deribit B.V.”

Also in February, Deribit will reportedly start requiring users withdrawing up to 1 bitcoin every 24 hours to provide a name and address, though no government ID or passport scan will be required at that level.

Documents will have to be provided on withdrawals involving more than 1 Bitcoin, however.

Deribit decried the implications of the new rules:

“Crypto markets should be freely available to most, and the new regulations put too high barriers for the majority of traders, both regulatory and cost-wise.”

In March, Caspian, a crypto trading platform for professional traders and investors, integrated its platform with Deribit, and thereafter claimed to be the first institutional-grade platform to provide both options and futures trading of cryptocurrencies.

Caspian also claims it interfaces with all major crypto exchanges and OTC brokers.

It is not known how or if Deribit’s move will affect affairs at Caspian, which also appears to be a Netherlands company.

Caspian has been contacted and any comment they may forward will be appended to this article.

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Alon Goren, Partner at VC Firm Draper Goren Holm , Discusses Blockchain & Digital Securities

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Alon Goren, Partner at VC Firm Draper Goren Holm , Discusses Blockchain & Digital Securities

Alon Goren is well known in the Fintech space having been an early thought leader and supporter of the investment crowdfunding sector. When the JOBS Act was signed into law, Goren was in the thick of things seeing the opportunity of online capital formation.

Over the years, Goren’s focus has shifted to target blockchain or distributed ledger technology (DLT) as a disruptive force in the emerging sector of digital assets. Goren, along with partner Josef Holm, have created the LA-based Crypto Invest Summit (CIS). The Summit is the largest event of its kind on the West Coast. CIS has experienced the extreme highs of the crypto sector – and now the more earthbound expectations of blockchain technology. Recently, to reflect the evolving digital asset sector, CIS is now rebranding as the LA Blockchain Summit, a title that is more representative of industry sentiment.

Alon Goren, Partner at VC Firm Draper Goren Holm , Discusses Blockchain & Digital SecuritiesWhile organizing a series of successful conferences on the West Coast, Goren and Holm have also launched a VC fund – one that gained additional exposure when Tim Draper joined as a venture partner, a huge win for the young VC firm. Draper is a high profile billionaire VC who has long been bullish on Bitcoin and blockchain in general. This new relationship should help the Draper Goren Holm “Blockchain Venture Studio,” gain access to the most promising startups in the digital assets sector.

Today, the VC firm includes some well-known startup names in their portfolio including; Vertalo, Ownera, innovesta, CasperLabs and more.

Before the end of the year, Crowdfund Insider had a chance to catch with Goren. Our conversation is published below.


The blockchain sector has changed quite a bit in the past two years. You have experienced the rapid rise of ICOs to the shift to digital securities. What are your thoughts on that?

Alon Goren: Although all of my idealistic tendencies hope and wish that we can push everything closer to decentralization, I know that that is unrealistic for many or even most assets. What I know that we can definitely do is use technology to streamline the process and help people participate in the jurisdictions that are the least restrictive in a compliant and simple manner.

True digital securities have the potential to do this and so I’m very excited to support that shift.

As an active VC in the DLT / crypto space, where are you looking now? Protocols? Service providers? All of the above? Other?

Alon Goren: I love investing in the services that will support this new infrastructure and this new economy. That said, Ownera, one of our biggest bets is building the infrastructure later and we are looking for companies to invest in that will be building on top of that.

We are pretty general in terms of what we invest in, but I am actively looking for NFT/gaming companies because I am very passionate about that group but have not yet participated in it from an investment perspective. I would also love to find some companies solving identity problems…

What about outside the US?

Alon Goren: An amazing entrepreneur is an amazing entrepreneur where ever they are in the world!

The digitization of securities is a given but this will take time. How do you expect digital securities to evolve?

Alon Goren: I think it’s going to go to the trajectory of most consumer technologies… They will be adopted in the workplace by the enterprises and then followed by mainstream adoption.  In the digital securities space, I think this will manifest through large financial institutions digitizing large banking deals, existing portfolios, and assets and then later by smaller companies (through regulated financial institutions) and then mainstream adoption through things like a real estate crowdfunding and ownership of public stock, bonds, etc…

Josef Holm and Alon GorenI believe in the advent of “esoterics” – the securitization of assets that previously were not cost-effective to pursue. What are your thoughts on this concept?

Alon Goren: I love it! I just bought shares of a magic card through mythic markets and it was epic! When this scales, collectibles are going to be so much fun to buy and trade on the Internet even if they’re fractions of multi-million dollar pieces that we could not previously attain.

Any Predictions for 2020? Comments on 2019?

Alon Goren: I think that it has been a very impressive year in terms of technology build-out and institutional intentions and announcements. I think that there are going to be some big entrants in 2020 and although it will be a slow start and ramp up, we are going to get our marquee deals that are discussed in the mainstream and this industry will begin to start looking like a real industry! It’s going to be very exciting!

Before we know it, all securities will be digital securities just like all businesses are now what we would’ve called an Internet company 10 to 20 years ago. One in the same…


Before we know it, all securities will be digital securities #Blockchain #DigitalAssets

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Another Malicious Crypto Wallet App Stealing Private Keys and Data

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Another Malicious Crypto Wallet App Stealing Private Keys and DataHarry Denley, director of security at MyCrypto, “an open-source…tool for generating ether wallets,” has warned the public about a malicious crypto wallet app called “Shitcoin Wallet,” which, according to Zero Day, “was caught injecting JavaScript code on web pages to steal passwords and private keys from cryptocurrency wallets and cryptocurrency portals.”

Shitcoin Wallet reportedly became available for download at the Google Chrome web store on December 9th. At press time, the Shitcoin Wallet is no longer available at its Google Chrome address.

Denley says any funds run through the Shitcoin Wallet extension could be lost. The application also installs malicious JavaScript code designed to steal login details and private keys when people interface with 77 websites, including several popular cryptocurrency exchanges and storage applications.

Affected legitimate applications allegedly included:

  • MyEtherWallet.com, Idex.Market, Binance.org, NeoTracker.io, and Switcheo.exchange.

According to Zero Day, “Once activated, the malicious JS code records the user’s login credentials, searches for private keys stored inside the dashboards of the five services, and, finally, sends the data to erc20wallet[.]tk.”

As well, “It is unclear if the Shitcoin Wallet team is responsible for the malicious code, or if the Chrome extension was compromised by a third-party. A spokesperson for the Shitcoin Wallet team did not reply to a request for comment before this article’s publication.”

Shitcoin Wallet is one of many cryptocurrency-stealing “wallet apps” in circulation.

Several wallet scams are profiled in Harry Denley’s end-of-year crypto security blog post, including, “The CCB Cash extension…designed to steal your login credentials… (which) stole over 12 BTC.”

Denley also wrote about scams stemming from cryptocurrency airdrops, whereby exchanges or token projects give away free crypto tokens for promotion.”Unsolicited airdrops can be useful(?),” Denley writes, “but be vigilant to inform yourself as to what they are advertising. This story investigates a big airdrop campaign that ties into a fake MyEtherWallet UI to steal your wallet secrets!”

Denley also wrote about Android APK’s (Android Package Kits) impersonating the Trezor hardware wallet, MetaMask and My Crypto Android and, “designed to steal your wallet secrets (private keys, mnemonics, etc.)…”

Reactions to the news about Shitcoin Wallet have been varied, with Ted Ahern musing on Twitter: “If you can’t trust Shitcoin Wallet, who can you trust?”



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U.S. Law Firm Sued for Advising “Crypto Assets are Not Securities”

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U.S. Law Firm Sued for Advising "Crypto Assets are Not Securities"A Delaware-registered company called Digital Capital Management is suing law firm Faegre Baker Daniels for allegedly providing “erroneous” legal advice in 2017 that greenlit establishment of a cryptocurrency/digital token investment fund.

The story was broken by Bloomberg Law.

The fund, Crypto Asset Management LLC (CAM), and plaintiff Timothy Enneking were subject to an SEC enforcement action in 2018.

The SEC action alleged that Enneking and the fund raised more than $3.6 million USD, “from 44 investors, primarily individuals, residing in at least 15 states,” while failing to properly register as an investment company. According to earlier reports, after being contacted by the SEC staff, CAM apparently ceased its public offering and offered buy backs to investors.

Enneking alleges that Faegre Baker Daniels told him the “Funds should be offered under Regulation D via Rule 506(b) as opposed to Rule 506(c).” But the plaintiff allegedly received poor advice as to registering under the Investment Advisers Act of 1940.

As well, “Defendant further advised Plaintiffs that Crypto Assets are not securities and to structure CAF’s and the Fund’s business accordingly.”

Following the enforcement action, the legal malpractice suit claims, Enneking and his firm, “were censured and agreed, without admitting or denying the order’s findings, to pay a $200,000 civil money penalty to settle the SEC’s claims.”

The suit says Enneking paid, “various costs and fees, including but not limited to attorneys’ fees, in connection with CAM and the Fund…” and, as a result of the enforcement action, “sustained damages of more than $75,000.”

The plaintiff also claims to have, “sustained reputational harm and other damages.”

Enneking et al. seek relief, including “damages according to proof at trial,” “pre- and post-judgment interest at the applicable statutory legal rate(s),” “costs of this action,” and, “further relief as may be just and proper.”

A number of lawyers/firms moved into advising crypto startups and funds when the field spiked around 2014.

Some firms believed, or at least claimed, that the “digital assets” being sold would provide “future utility” on a computer software network yet to be built and were therefore more like “utility tokens” than securities.

Some lay commentators, including Tone Vays, scoffed at the idea, claiming that using a speculative token to access a (future) network was like, “buying things on Amazon with Amazon stock.”

How tokens should be legally defined proved perplexing for many, and many proceeded to market with tokens that the SEC later deemed securities.

Sellers of “cryptoassets” have argued that the SEC’s definition of securities is outdated and “stifles innovation.” Meanwhile, “blockchain” and other token-financed tech have yet to revolutionize various fields as promised.

Former SEC Chief of the Office of Internet Enforcement John Reed Stark has been very critical about the social harms cryptocurrencies enable.

At the end of a lengthy recent article, Stark called out “crypto lawyers” for enabling often unregulated cryptocurrency projects:

“Sadly, too many of the shamelessly self-anointed Fintech attorneys, who practice within the crypto-space, are of little help and have at times actually exacerbated an already dire situation. Some not only blindly facilitate the criminal norms of the cryptocurrency marketplace, but their law firms also blithely encourage cryptocurrency transactions by accepting Bitcoin as a form of payment for their legal services. It seems that some lawyers and their firms have become so desperate for fees that accepting Bitcoin blood money seems somehow justifiable.”

“This last point about lawyers and cryptocurrency hits home and bothers me the most. Because when ransomware gets worse (which it will) and people die as a result (which they will), someone somewhere will undoubtedly ask: where were the lawyers?”

“First formulated by the legendary Stanley Sporkin about corporate misdeeds decades ago when he was head of the SEC Enforcement Division in the 1970s and then as U.S. federal district judge from the mid-80s onward, this damning question has been repeated in every major financial scandal since.”

 

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Stocks Shrug Off World War 3 Risk, But Bonds, Bullion, & Bitcoin Surge To Start The Year

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World War 3 worries? Meh, we’ve got The Fed to handle that shit!!

Weakness in early going in stocks – due to the potential for global war after Soleimani’s killing – were nothing but an opportunity to buy the f**king dip once again today…(as the machines used VWAP as support)…

Stocks Shrug Off World War 3 Risk, But Bonds, Bullion, & Bitcoin Surge To Start The Year

As the market immediately priced in a Fed rate-cut to save the world…

Stocks Shrug Off World War 3 Risk, But Bonds, Bullion, & Bitcoin Surge To Start The Year

Source: Bloomberg

Oil prices spiked but ended only around 3% higher on the day…

Stocks Shrug Off World War 3 Risk, But Bonds, Bullion, & Bitcoin Surge To Start The Year

Of course, defense stocks soared…

Stocks Shrug Off World War 3 Risk, But Bonds, Bullion, & Bitcoin Surge To Start The Year

Source: Bloomberg

But bonds and bullion were bid as safe-havens…

Stocks Shrug Off World War 3 Risk, But Bonds, Bullion, & Bitcoin Surge To Start The Year

On the week, only Nasdaq is notably higher…

Stocks Shrug Off World War 3 Risk, But Bonds, Bullion, & Bitcoin Surge To Start The Year

And since the start of 2020, only Small Caps are red…

Stocks Shrug Off World War 3 Risk, But Bonds, Bullion, & Bitcoin Surge To Start The Year

VIX and stocks remain decoupled…

Stocks Shrug Off World War 3 Risk, But Bonds, Bullion, & Bitcoin Surge To Start The Year

Source: Bloomberg

Credit markets widened notably today, relatively more than equity protection…

Stocks Shrug Off World War 3 Risk, But Bonds, Bullion, & Bitcoin Surge To Start The Year

Source: Bloomberg

Treasury yields collapsed since the start of 2020 with 30Y yields down 13bps…

Stocks Shrug Off World War 3 Risk, But Bonds, Bullion, & Bitcoin Surge To Start The Year

Source: Bloomberg

The 30Y Yield dropped to 4-week lows…

Stocks Shrug Off World War 3 Risk, But Bonds, Bullion, & Bitcoin Surge To Start The Year

Source: Bloomberg

The yield curve flattened dramatically…

Stocks Shrug Off World War 3 Risk, But Bonds, Bullion, & Bitcoin Surge To Start The Year

Source: Bloomberg

The dollar rallied for the second day in a row (despite some volatility today)…

Stocks Shrug Off World War 3 Risk, But Bonds, Bullion, & Bitcoin Surge To Start The Year

Source: Bloomberg

Cryptos were notably bid today following the Soleimani killing…

Stocks Shrug Off World War 3 Risk, But Bonds, Bullion, & Bitcoin Surge To Start The Year

Source: Bloomberg

After another drop below $7k, Bitcoin surged today…

Stocks Shrug Off World War 3 Risk, But Bonds, Bullion, & Bitcoin Surge To Start The Year

Source: Bloomberg

Copper tumbled today as gold and oil rallied…

Stocks Shrug Off World War 3 Risk, But Bonds, Bullion, & Bitcoin Surge To Start The Year

Source: Bloomberg

Gold topped $1550 – back to its highest in 4 months…

Stocks Shrug Off World War 3 Risk, But Bonds, Bullion, & Bitcoin Surge To Start The Year

And as Bloomberg reports, heightened Middle East tensions are boosting bets on further gains for gold as a haven asset. Volatility in call options giving holders the right to buy futures at a pre-set price reached the highest in almost three months against puts, which provide the right to sell the metal.

Stocks Shrug Off World War 3 Risk, But Bonds, Bullion, & Bitcoin Surge To Start The Year

The skew shows that investors are increasingly bullish on bullion, even with prices already near a six-year high in the wake of the U.S. air strike that killed a top Iranian commander.

Source: Bloomberg

Finally, US macro data is negative and disappointing notably (today’s ISM at 10 year lows) with stocks just shy of record highs…

Stocks Shrug Off World War 3 Risk, But Bonds, Bullion, & Bitcoin Surge To Start The Year

Source: Bloomberg

And some remember what happened last time…

Stocks Shrug Off World War 3 Risk, But Bonds, Bullion, & Bitcoin Surge To Start The Year

Source: Bloomberg

 

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Facebook’s Libra Compels Governments to Ensure Competition, Not Create State Cryptocurrency

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Facebook's Libra Compels Governments to Ensure Competition, Not Create State CryptocurrencyJens Weidmann, President of Germany’s central bank (Bundesbank) and a governing councilor at the European Central Bank (ECB), told Handelsblatt this week that much needs to be understood before central banks should get into issuing a digital currency like Facebook’s Libra or Bitcoin, commonly referred to as “Central Bank Digital Currencies” or CBDCs.

“First of all, it’s about understanding the positive and negative sides of digital central bank money,” Weidman told the German business news outlet. “Then it can be decided whether it is needed and the risks can be controlled.”

Handelsblatt reporters asked Weidman to address a popular recent narrative that, “Libra threatens to create a private monopoly in the area of ​​digital currencies. So it is legitimate to oppose it with a public monopoly.”

Weidman did not concur that the state’s first response to Libra should be to create a state cryptocurrency.

Instead, he stressed the importance of ensuring competition. “In a market economy, regulation and competition law should first be applied consistently in order to enable fair competition.”

He also said characterizing Facebook’s Libras as a currency may be inaccurate. “I would be careful with the concept of currency. Facebook is planning a digital form of payment, tied to a basket of multiple currencies such as the euro and the US dollar.”

He also said Libra could pose risks to users, “This creates an exchange rate risk for users,” and said the Euro has a track record of being well-managed, “We have stable money with the euro that has proven itself over the past decades.”

Weidman said regulators responded promptly to Libra because, “Payment transactions are a field in which network effects and size play a decisive role.”

In the event of an unregulated roll out of Libra, Facebook would start out with an unprecedented advantage, said Weidman.

“Facebook brings more than two billion possible users,” Weidman said. “This would give Libra the potential to become a dominant player right from the start.”

In March, Augustin Carstens, General Manager at the Bank for International Settlements (BIS), told an audience in Dublin that central banks should not get into the business of issuing a central bank digital currencies or “CBDCs” to the public.

The BIS is the so-called “central bank of central banks.” Weidman also sits on the board there.

Carstens said at the time that cryptographic tokens and ”blockchains” do not outperform current systems. He also said direct central bank involvement in retail banking and lending, traditionally the provinces of private sector banks, would worsen bureaucracy and increase instability.

Castens gave four main reasons why retail CBDCs should not be pursued:

“(a) (T)he introduction of CBDCs would have a major impact on the financial system

(b) (T)here is not yet a noticeable and widespread fall in the demand for cash

(c) (C)entral banks do not feel compelled to face a major change in the way they conduct monetary policy.

Also, “research and experimentation have so far failed to put forward a convincing case…”

Weidman elaborated on some of the risks of a CBDC in his interview with Handelsblatt:

“Digital central bank money can change the fundamentals of the financial system and make it more insecure. Depending on the design, customers might switch from bank deposits to digital central bank money on a large scale and deprive banks of an important source of finance. The risk of a bank run in a crisis situation could also increase.”

Weidman also said the Bundesbank is “testing a blockchain as a supplement to the previous central, account-based solution,” but said that, “In our special context with a few business partners we know, the blockchain is initially no more efficient than central processing.”

Weidman did not rule out that blockchain may yield positive features around organizing different and perhaps more complex types of value distribution in the future:

“(Blockchain) enables automatic functions for so-called smart contracts to be built in. For example, the transfer of a security could then trigger a payment.”

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Monero transactions untraceable, says Europol analyst

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Certain transactions made through the privacy coin Monero are untraceable, found Europol’s European Cybercrime Centre. 

In a webinar, Jerek Jakubcek, a strategic analyst at Europol, spoke of a suspect who conducted Monero transactions through the privacy browser, Tor. Tor scrambles IP addresses by rerouting traffic through its network, making it difficult for law enforcement agencies to track web history.

“Since the suspect used a combination of Tor and [Monero], we could not trace the funds. We could not trace the IP-addresses. Which means, we hit the end of the road,” Jakubcek told audiences.

“Whatever happened on the Bitcoin blockchain was visible and that’s why we were able to get reasonably far. But with Monero blockchain, that was the point where the investigation has ended. This is a classical example of one of several cases we had where the suspect decided to move funds from Bitcoin or Ethereum to Monero,” he said.

But those hoping to evade authorities by obscuring transactions through a combination of Monero and Tor ought to think twice; if the police can’t analyze transactions, governments can introduce regulations that make them difficult to use. 

For instance, when Germany’s Federal Ministry of Finance determined Monero transactions to be untraceable back in October, it announced plans to amend German legislation according to the new European money laundering directive that’ll go out this month. 

The new legislation requires “obligated parties”—like crypto exchanges, wallet providers, or other companies who process crypto transactions—to take steps against money-laundering. Be careful what you wish for.

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EXCLUSIVE Craig Wright: What I’ll do with Satoshi Nakamoto’s billions

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Craig Wright has said a bitcoin fortune worth somewhere around $7 billion should revert to him in January 2020. Will that happen? If it does, what will happen next? We have no clue.

But Wright said a few things in our last interview that suggested he will give Satoshi’s billions away.

[Editor’s Note: Having long claimed to be Bitcoin inventor Satoshi Nakamoto, nChain founder and Bitcoin SV backer Craig Wright has said in court and out that the million-plus bitcoins mined at the beginning of the blockchain are locked away in the Tulip Trust. 

Worth about $7 billion at press time, Wright has said the trust is encrypted with multiple keys held by a variety of people. Enough to open it is scheduled to be delivered to him in January 2020. He’s also said that he won’t get enough keys to open the encryption by himself—one of the discrepancies that led to a judge calling him a liar recently.

A great many people in the cryptocurrency community believe Wright’s claim to be the pseudonymous author of the Bitcoin whitepaper is a lie. They have been waiting anxiously this month to roll around to see if the bonded courier Wright has said will deliver the key codes actually shows up. This would—theoretically—allow Wright to move one of those bitcoins. Doing so would go a long way towards proving he really is Satoshi Nakamoto.

Wright is being sued by the brother of his late partner, Dave Kleiman, who believes Wright stole his brother’s half of those bitcoins. So, if Wright does have control of those bitcoins, he’ll have to access them at least to the satisfaction of the court.]

Brendan J. Sullivan: I have a question that might sound naïve. Why are you fighting this lawsuit? You’re not American, you don’t even like this country that much. You didn’t have to show up in Florida [for the Kleiman trial]. 

Craig Wright: I like New York. I just don’t like all the South. 

Whether you say it or not, I believe in the rule of law. I believe you go through a lot of shit in court cases but eventually everything gets sorted. Unfortunately, it becomes a media spectacle in this world, which it shouldn’t be. 

Will he give Satoshi’s billions away?

BJS: You and I talked about this over the years. The amount of money they’re talking about now is not a healthy amount of money for people to own. Maybe [$7 billion at current prices. –Ed.] is what we’re talking about. 

CW: Worse, [it’s a] liquid cash type asset. It’s horrible. 

BJS: You can’t go on vacation again and hike up a mountain without worrying about getting kidnapped. What is the toll of this on you and your wife?

CW: I go to large conferences and you’ll see two large guys slinking in the background somewhere. We go to things and have security guards. Life is different. It was much better when I was anonymous.

BJS: What would you want out of life now? 

CW: Exactly the same, I’d want to keep creating. I’ve got things to build and I’ll build them. I’ve got patents to file and inventions to finish. That’s it. I’ve got my family, who I love, and my inventions to keep going with. What more do people want? I don’t know about you but that’s enough for me. I couldn’t stand the idea of stopping work. If I had to stop working, I think I’d jump off a building. 

BJS: So, is it fair to say that the reason you’re fighting this [lawsuit] so hard is because your career is on the line, or your ability to freely invent things? 

CW: No, I just don’t think it’s right. 

EXCLUSIVE Craig Wright: What I’ll do with Satoshi Nakamoto’s billions
The Carnegie Library of Homestead, Pa. is particularly magnificent…

BJS: One thing you said to me was “Once upon a time the billionaire class of the world would be responsible for caring for people, so in ancient Rome, you know, this or that rich person would pay for the aqueduct. So now it’s like, Mark Zuckerberg should be kicking in for the world.” 

CW: Yes. As I’ve said before I’ve always been Wesleyan. Wesleyan Methodist [Church of Australia], the Uniting Church. It’s the same sort of views as Andrew Carnegie. Basically, it comes down to, “Work as hard as you can. Earn as much as you can. But, give away as much as you can.” 

So, you spend your life creating, and leave something. That’s the Wesleyan philosophy. 

BJS: My local library is a Carnegie library. I love it, it’s beautiful. 

CW: People don’t seem to understand, they talk about him like he’s this evil robber-baron. This evil robber-baron that built most of the libraries in the U.S. And universities, and all these other things.

People don’t understand that if you have a single-minded focus to achieve, like creating patents and technology, building companies, etcetera, you become single-minded. 

I had to learn many different areas with Bitcoin, but it’s all one encompassing area. If you want to be truly successful, then you give up all those other things people think make life rich. It’s concentrating and owning that one part of existence that you’ll be good at.

I am the Greatest!

BJS: I’m reading a book right now that I think you’d enjoy. This is Muhammad Ali’s autobiography, “I Am the Greatest!” 

CW: Let me get something. 

BJS: [Wright returns with a framed print of the famous photo of Muhammad Ali knocking out Sonny Liston.

CW: I find him very inspiring. 

BJS: I do too. “I hated every minute of training. But I told myself, ‘Don’t quit. Suffer and live the rest of your life as a champion,’” [Ali said.]

CW: That’s a good one. It takes a lot to be an athlete at that level. 

I mean, I’ve had to sacrifice in terms of education, which is better in a way because I don’t get whacked in the head. To be an athlete at that level you have to train extensively. You don’t get this “I don’t feel like training today.” You get up and you train. 

That’s what people don’t get. If you want to be great, if you want to change the world, if you want to be remembered, if you want to do anything like that, then forget having that day off where you lie in in the morning. Forget having that horribly fattening breakfast or that extra glass of wine. I don’t think it’s something many people can understand. All these things you choose to give up. 

BJS: Muhammad Ali had to train mentally. The human being who thinks they can accomplish [something] is usually the one who gets it done. 

CW: Exactly. 

BJS: Training mentally is important. If I read every “Do as I say, the way I do it” [trolling tweet], if I followed through with that, it would really start to mess with me mentally because it would rewire me. 

CW: So, they sit there going, “We think blockchain should be this, we think Bitcoin should be that.” 

And my response is: “So what?” 

Learning sacrifice

BJS: What sacrifices do people not see, then? 

CW: Let’s take, for instance, the nature of doing courses, getting an education, whatever else. 

Over the years I did forty courses. Including travel, the actual course, everything else, and then the actual examinations, each of them [took] almost a whole week of my life. So effectively nearly a whole year of my life has just been on that technical education. On top of that, around $15,000 including the travel, the accommodations, and the $6,000-$7,000 course [fees]. That’s enough for most people to buy a house. 

EXCLUSIVE Craig Wright: What I’ll do with Satoshi Nakamoto’s billions

Then, I’m working on my 19th or 20th degree—I don’t even know how many degrees I have. I’m doing two PhD.’s at the moment. I have a PhD already so I don’t need to get “doctor” up on my name again, I want the education. I’ve done multiple masters degrees. Most people get a single masters degree and they stop. 

Each of those cost between $20,000 and $40,000 U.S. dollars. All these things I could have been spending money on, could have been having holidays when I was younger, but I didn’t.  All that went to education, to buying books on topics I wanted to learn. 

To get 10 degrees costs a lot of money. [Editor’s Note: He said 10 degrees here, as opposed to the “19 to 20” referenced above.] I have over $1 million worth of investment in myself. All of which, I don’t think people understand. Rather than paying off your house, you’re paying off another degree. You’re basically sinking more and more money into doing more and more things. Buying the textbooks. 

BJS: I’ve never been able to figure this out on my own [even though] I’ve had to research you for 50 stories over the years. What are your degrees in, that you can remember? 

CW: All sorts of topics. Computer science, economics, theology, law—I’ve got a masters in law, and I’m actually working on my doctorate in law at the moment. I’m a second-year PhD. student at Leicester University here in the U.K. 

[I’ve got a] master of science, master of science and engineering, master of engineering management, master of management, some wacky ones, like a BA in art history. Undergraduate-level psychology, Econometrics, Finance…

Chemistry, but I haven’t figured out a use for that one yet. I enjoyed it because I did well in school. But since the ‘90s I haven’t had a single use for a Chemistry degree other than blowing stuff up when I had a farm. 

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MakerDAO co-creator donates $1.4 million in MKR to Carnegie Mellon

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Nikolai Mushegian, a former chief architect for the MakerDAO project, has donated $1.4 million worth of MKR tokens to Carnegie Mellon University to fight the flood of blockchain patents he fears will drown innovation.

A private research university on par with MIT and Stanford, Pittsburg’s Carnegie Mellon will use the 3,200 MKR to support blockchain-based distributed finance design.

Mushegian, who graduated from CMU with a bachelor’s in computer science in 2014, said in a blog post Wednesday that the funds will sponsor masters and doctoral students in key areas of research, such as algorithm design and game theory, to further the field of decentralized finance, or DeFi for short. 

“Over the next few weeks we will set the research agenda and publish a concrete plan of action,” he wrote. 

Mushegian has also “informally committed” to donating another 6,800 MKR tokens over the next one to three years. That’s currently worth about $3 million. He warned against speculating on what those coins would be worth at that time though. 

“You definitely shouldn’t use the current market price for those future donations,” he told Modern Consensus, adding that these are just funds he has set aside. “In theory, I could change my mind,” he said.

Fighting off rent-seekers

Mushegian has two motives for the donation. First, he wrote in his post, he believes it is simply “good karma” to give away the money. Second, he admitted to being “very concerned” about what he called “increasing rent-seeking behavior” from banks and tech giants.  

The pace of blockchain patents sought has been growing rapidly, meaning more and more blockchain technologies and tools are off-limits without paying the patent holder for permission to use them. In 2017, about 3,700 blockchain patent applications were filed in the U.S, according to patent law firm Harrity & Harrity. Despite the Crypto Winter, 8,200 were filed in 2018, the firm reported.

“I think software patents do not reward innovation, they reward bean counters,” he told Modern Consensus. 

Mushegian said he fears that “the big banks and tech giants quietly watch and patent the marginal improvements, which the real innovators just skip over because they think it’s too obvious.” 

He gave the example of patenting sending cryptocurrency over email.

Mushegian didn’t specify how he intended to keep any technology the Carnegie Mellon researchers create open source. He did say that some of the details of the sponsorship still need to be sorted out. 

MakerDAO, an open source project built on top of Ethereum, was one of the central projects in last year’s decentralized finance boom. It was behind DAI, a multi-collateral stablecoin that officially went live in November.  

An unstablecoin

MakerDAO’s main cryptocurrency is the DAI. The project is also behind MKR, a separate token that plays a complicated role in governance and keeping the value of DAI pegged to $1. However, unlike DAI, MKR is anything but stable. 

On the contrary, it has seen huge fluctuations in price since its entry into the world in early 2017. For instance, MKR climbed to a high of $1,600 in January 2018 before dropping to a low of $325 in November 2018, according to CoinMarketCap. Currently, it is worth about $420, according to research firm Messari. In April, it was just shy of $820.

Mushegian knows a thing or two about stablecoins. According to his website, he worked on the core mechanics of the original contract system specifications for the DAI stablecoin system. 

“You could call me the technical co-founder and/or chief architect,” he told Modern Consensus. “We had a culture where we didn’t really use titles though.” 

He cut his teeth in stablecoins in 2014, when he worked on Bitshares, a project started by Daniel Larimer, who is currently CTO of Block.one, a company involved with the development of the cryptocurrency EOS.  

“I joined the bitshares team after graduating because I was excited about bitUSD,” said Mushegian.

The first stablecoin ever created, BitUSD is a crypto-backed stablecoin issued on the Bitshares platform.

Mushegian has already begun fielding inquiries about the Carnegie Mellon grant.

“Any students or researchers who are interested should just DM me for now,” he tweeted. “I’m particularly interested in people looking to do a thesis in algorithms or game theory.” 



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YouTube competitor DLive joins BitTorrent

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BitTorrent today announced that the blockchain peer-to-peer content sharing platform DLive will migrate to the TRON blockchain, and use BitTorrent’s decentralized file-sharing system, BTFS, for storage. In addition, BitTorrent will merge its own streaming platform, BLive, with DLive. 

The reshuffle puts the YouTube competitor onto the ecosystem of BitTorrent, the peer-to-peer file-sharing giant with over 100 million monthly users. 

DLive is currently hosted on the Lino blockchain, and will continue to do so until the transition to the TRON blockchain is complete. It’ll merge its account systems with BitTorrent’s in the first quarter of this year, and will integrate its content to BitTorrent and uTorrent sometime mid-year. 

In October, DLive partnered with Theta Network, a company which produces a decentralized video streaming protocol, to further reduce costs. 

Justin Sun, CEO of both BitTorrent and TRON, said, “DLive is a great solution for live media producers. Think of how valuable live streaming content is already to centralized social media platforms who take ownership and advantage of their users’ hard work.”

Since its launch, DLive has attracted the likes of YouTube megastar PewDieDie, who streams exclusively on the service to almost 700,000 followers.

DLive claims that the service has over 5 million monthly users, meaning adoption of the service has increased fifty-fold since December last year; at the time of writing, though, streamers have a combined viewership of around ten thousand. However, Tron’s price did little to reflect the news.

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