Humaniq Project collected $1,300,000 in the first hour of ICO

Humaniq Project collected $1,300,000 in the first hour of ICO

Luxembourg City, Luxembourg &8211 April 6 &8211 Humaniq launched their ICO on the 6th of…nThe post Humaniq Project collected $1,300,000 in the first hour of ICO appeared first on Bitcoinist.com.n

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Litecoin Price Tops $11 Amid SegWit Euphoria, Coinbase Support

With Litecoin&8217s price rallying and SegWit activation around the corner, Bitcoin&8217s baby brother may soon…nThe post Litecoin Price Tops $11 Amid SegWit Euphoria, Coinbase Support appeared first on Bitcoinist.com.n

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CreditBit Finalizes 1st Round of Migration to Ethereum Blockchain, Launches App

n n n sponsoredn CreditBit, the licensed cryptocurrency projects expands into the Chinese market and launches the mobile app to be closer to their users.n

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FED Board President Does not Understand Bitcoin or the Nature of Trust

A recent editorial published by Bloomberg on April 4 had quotes from the Philadelphia Federal Reserve’s Patrick Harker concerning digital currencies. In the article, he demonstrates his ignorance about bitcoin’s volatility, the future of banks, and the concept of trust. 

Also read: Bitfinex Makes Good on Debt, 100% of BFX Tokens Redeemed

FED Board President Does not Understand Bitcoin or the Nature of TrustThe article’s author quotes Harker, saying that digital currencies will not replace banks. Harker said, “Digital currency won’t topple traditional, government-sanctioned money from its central role in the economy in the foreseeable future.”

Harker believes digital currencies will not delegitimize banking and the banking system as it stands. The article emphasized a dollar is a dollar, and people know the dollar will retain its value. Harker believes digital currencies cannot possess the same level of trust as a result of their volatility.

“A fiat currency like that in the United States, which is issued by a central bank in a secure and stable economy, works because we trust it,” explained Harker. “A dollar is a dollar. We all agree that it is and there’s not much that can undermine that faith. We experience inflation, sure, but not often in dramatic or abrupt ways.”

On the other hand, one of the things you’ll see with digital currency is how wildly the value swings. The question is will there ever be a digital currency that is stable enough to become as widely used as a government one.

One perspective on Trust and Stability in Digital Money

FED Board President Does not Understand Bitcoin or the Nature of TrustHarker’s argument that private, digital monies can never have trust because of their instability is misleading.

What Harker does not want people to know is governments are not the only factors that provide a currency with stability. It is true central planners can stabilize money by writing coercive laws, but a currency can also stabilize as a result of higher demand on a market.

The volatility experienced by bitcoin and other cryptocurrencies do not occur because people don’t “trust” them. The volatility occurs because of lack of adoption and usage. It means these currencies are still in what economists refer to as “price discovery phase.” In other words, the fact there is not much liquidity in the market causes the price to fluctuate violently.

However, this aforesaid view represents a traditional economic perspective. There is another, deeper idea to consider: maybe money stability is a myth.

Bitcoin Stability as a Necessary Pipe Dream

According to Daniel Krawisz, cryptocurrencies can be trusted FED Board President Does not Understand Bitcoin or the Nature of Trustwithout needing stability. In a fascinating article on nakamotoinstitute.org, Krawisz makes the case that Bitcoin could perform as a legitimate money while being “volatile.” Krawisz says that nothing in the universe is inherently “stable.”

He said:

Stability is about as real as the fountain of youth, love potions, or perpetual motion machines. It is not to be found anywhere in the universe but for some reason people act as if such a thing could somehow exist. Prices reflect the availabilities of things that we actually can have, so maybe we should all stop searching for chimera of stability and accept that if the world is unstable, than prices ought to be unstable too. Otherwise prices could not serve the function of enabling people to coordinate the allocation of scarce resources.

Krawisz makes a valid point. He provides the stimulating fact that politicians like Harker merely invite the gullible masses to accept that stability is necessary for a currency (or prices).

It makes sense if one considers the perspective of a petty tyrant or control freak. Politicians are constantly trying to “stabilize” and control everything. However, the stability they create through law or “monetary policy” is artificial. In reality, markets constantly shift. The universe is in an ongoing state of flux and transformation.

Indeed, we saw the artificial nature of government controls when the monetary bubble collapsed in 2007, which likely happened as a result of monetary controls and policies instituted by the Federal Reserve. In other words, government’s attempt to stabilize the market only backfired. Their idea that stability prevents problems was shown to be wrong.

In the end, stability may be a myth because it implies a currency does not need to be stabilized. Stability may not even matter when it comes to a cryptocurrency like bitcoin.

Conclusion: Harker is Wrong; Trust in the Eye of the Beholder

FED Board President Does not Understand Bitcoin or the Nature of TrustVolatility may just an inherent feature of money in a digitized, free market environment. If this is the case, Harker’s argument that digital money will not replace fiat currency because people do not trust it is doomed to failure.

Cryptocurrencies—whether bitcoin or an altcoin—will inevitably grow to replace fiat currencies if people use them. Additionally, what we have learned is that “stability” is not necessarily indicative of trust. If people are forced to use a currency, then “trust” is artificial.

Real trust is generated through growing use of a currency. It is also generated through the knowledge that central planners will not manipulate their money to the point of devaluing it.

In this sense, Harker’s last words, “No matter what happens in the world of fintech, you still need a trusted broker of money,” ring false on all levels.

He has no idea what “trust” means; and ironically, does not realize that many no longer trust the banking empire he supports. The reality is that trust is in the eye of the beholder, and not signaled only whenever a bureaucrat waves a magic wand.

Do you think Bitcoin or other cryptocurrencies will eventually overtake the fiat empire? 


Images courtesy of Shutterstock 


At Bitcoin.com there’s a bunch of free helpful services. For instance, have you seen our Tools page? You can even look up the exchange rate for a transaction in the past. Or calculate the value of your current holdings. Or create a paper wallet. And much more.

The post FED Board President Does not Understand Bitcoin or the Nature of Trust appeared first on Bitcoin News.

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Darknet Market Operators Who Stole 40 Thousand BTC Face Prison Time

This week the accused thieves from the infamous Sheep Marketplace have been indicted by prosecutors from the Czech Republic. The charged suspect Thomas Jiřikovský may face up to 18 years for firearms charges, theft, and drug trafficking. The Sheep Marketplace was a popular darknet market much like the Silk Road but only lasted a few months due to the operators ceasing operations in an alleged exit scam.

Also read: Lightning Network Used to Sell Beer at Room77

Two Suspects From the Sheep Marketplace Await Jail Time in the Czech Republic

Sheep Market Operators Who Stole 40 Thousand BTC Face Prison TimeIn March of 2015, Thomas Jiřikovský was arrested in the Czech Republic for allegedly stealing millions of dollars in bitcoin from the darknet market, Sheep Marketplace, which was located on the deep web in 2013. The market is notorious for shutting down after a few months of operations due to a so-called vendor who stole $6 million worth of bitcoins.

“We are sorry to say, but we were robbed on November 21, 2013, by vendor EBOOK101,” explained the Sheep Marketplace at the time. This vendor found bug [sic] in our system and stole 5400 BTC – your money, our provisions, all was stolen.”

According to regional reports, Jiřikovský and his wife Eve who was allegedly Sheep’s programmer have been going through the motions of trial and will likely be sentenced in the near future. “He faces 10 to 18 years in prison,” said Hynek Olma, a spokesman for the regional prosecutor’s office.

“We filed the indictment for crimes of unauthorized production and the handling of narcotic and psychotropic substances, theft and illegal possession of firearms. The woman was charged with the crime of legalization of proceeds from crime,” explained Olma.

Olma added that Eve was facing three to eight years in prison for being an accomplice.

Sheep Market Operators Who Stole 40 Thousand BTC Face Prison Time

Sheep Marketplace Accomplices Arrested in Florida Last Year

The U.S. had also arrested two individuals connected with Jiřikovský and his wife back in May of 2016. Nathan Gibson and Sean Mackert tried to convert the funds via Coinbase and were caught by government agencies in the state of Florida. Coinbase at the time received a subpoena and revealed Gibson had deposited over 842 bitcoins with the company.

Czech police caught Jiřikovský purchasing a house near Hodonín, Czech Republic with his portion of the funds. The prosecutor’s office detailed the home was seized alongside the suspect’s bitcoin stash and computers. Jiřikovský and his wife also put a large sum of money into the couple’s grandfather’s home, but police were already following the money trail. According to investigators Jiřikovský and Eve used Bitstamp to convert his bitcoins into crowns.

40,000 Bitcoins Stolen During the Biggest Exit Scam in History

The Sheep Marketplace was considered one of the biggest exit scams in the history of darknet markets as the operators were accused of stealing 40,000 bitcoins from customers. Users had complained of suspended withdrawals one week prior to the $6 million dollar vendor theft incident and the website shut down for good immediately after the announcement, along with all the existing customer funds.

Czech prosecutors have not disclosed what will happen to the seized properties and the remaining bitcoins.

What do you think about the Sheep Marketplace operators facing jail time? Let us know in the comments below.


Images courtesy of Shutterstock and Pixabay. 


Do you agree with us that Bitcoin is the best invention since sliced bread? Thought so. That’s why we are building this online universe revolving around anything and everything Bitcoin. We have a store. And a forum. And a casino, a pool and real-time price statistics.

The post Darknet Market Operators Who Stole 40 Thousand BTC Face Prison Time appeared first on Bitcoin News.

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Japan Accepts Bitcoin as Legal Payment Method. Whats Next

&8230nThe post Japan Accepts Bitcoin as Legal Payment Method. What&8217s Next appeared first on CryptoCoinsNews.n

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Bitcoin Romania Partners Smith & Smith on Unique Payment Service, Bringing Customers to the Digital Age

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Bitcoin Could Soon Be Accepted at 260,000 Stores in Japan

Over a quarter of a million stores could be accepting bitcoin by summer this year.nThe post Bitcoin Could Soon Be Accepted at 260,000 Stores in Japan appeared first on CryptoCoinsNews.n

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UK Looks to Strengthen FinTech Ties with India

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Bitcoin Should be Declared Illegal Demands Indian Politician

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