Bitcoin vs Davos, Reverse Crypto IPOs, McAfee Flees the IRS | Hodler’s Digest

This week, global elites met at the World Economic Forum in Davos, where discussion on crypto featured the usual fud. Two high profile guests, however, were absent, namely the US President and the UK Prime Minister Donald Trump because of the government shutdown and Theresa May because of Brexit. On the surface, Brexit and funding a border fence may seem unrelated, but if you look underneath, they are rooted in growing discontent with the elites of the world, spurring a wave of populism that has spread to Hungary, Italy and even Brazil. While various world leaders and economists were happy to dismiss crypto and question its existence, in fact it was the very existence of the World Economic Forum that became front and center of the discussion after a Bloomberg panel show went viral.

Davos is a family reunion of the people who broke the world.

Take this, okay?

The world we live in, that you cover has worked for a narrow slice of people.

Tony Blair and Bill Gates were asked to respond, but they were clearly caught off guard.

Well, if people think communism works better or something, I don't know.

Pavel Durov, who has attended Davos in the past, might be launching the ton or ton very soon. Sources close to the Telegram CEO revealed to Cointelegraph that following the $1.7 billion ICO last year, the mainnet and token for its blockchain based TON platform could be launched as early as March this year. In Venezuel, Venezuela, the future of the petro is in doubt and the country is in turmoil as the US formally recognized the opposition leader as president after a semi coup took place, whereas Russia and other allies are continuing to stand by Maduro. Also this week, McAfee is on the run. A Wyoming crypto bill and the bank of International Settlement says Bitcoin must depart from proof of work. Ladies and gentlemen, I'm Molly Jane and this is your weekly Hodler's Digestion. Although the crypto market was relatively stable this week, let's still have a quick look at its weekly performance. Ahead of Davos. Adina Friedman, the president and CEO of Nasdaq, posted online that crypto deserves an opportunity to find a sustainable future in our economy and called the invention itself a tremendous demonstration of genius and creativity. For her, this crypto winter is just another example of the classic invention life cycle. From its inception to a period of hype, the proliferation of new market entrants and then a dose of reality. Once in Davos, the the conversation turned much more negative. The crypto industry was represented this year, albeit less so. There was some talk of bitcoin going to zero with the regular platitudes toward blockchain, Kenneth Rogoff was there with his usual fud. In a panel discussion, he again called crypto a bubble and assured everyone there was zero chance of crypto overtaking fiat.

On the bubble aspect, yes, is absolutely classic. I think the possibility of a cryptocurrency taking over for fiat money, dollar, pounds, whatever, is basically zero. But I want to say I don't think it's worthless. So their economist, zero. It's absolutely zero. The US has financial sanctions, heavy financial sanctions on 12 countries include Russia, Iran, North Korea, many others. They don't necessarily have an incentive to play ball here with everybody else. And so we could see a home there. I think if you take the crypto out of cryptocurrency so that you can do anonymous transactions, there's just not value added compared to fiat money under the current system. Yes, if we had Venezuela and inflation everywhere in the world, it would look very attractive.

He did however, reveal that he once advised his then 13 year old daughter to sell 24 Bitcoin for a $60Amazon voucher in 2012.

My daughter, who was just a little over, Maybe she was 13 at the time, somehow mined 24 bitcoin and she owned them. And she said, daddy, what should I do? Somebody's offered me a $60Amazon gift card for them. And I told her to sell. So she did. I'd like to have told her, said I told her to sell at the end of 2017, but I didn't.

Jeremy Allaire, one of the founders of Circle, was also on the panel and he hit back at Rogoff's comments.

The biggest issue we have with, with financial crime and with sanctions is with the US dollar. It's a $2 trillion criminal market in US dollars. It is by far the preferred choice of criminals, of sanctioned countries, of everybody. And in fact, the central bank of the US prints literally 360 billion physical dollar notes, half of which are $100 bills that are sent overseas. I wonder who's demanding those, those central bank dollars, that crypto's still too small and that the big guns are focused on the money that the Fed is giving out to countries around the world. And that's where the real problem is people, they really struggle with the idea that money's going to work the way.

That the Internet works elsewhere in Davos, Jamie Dimon sat down with CNBC to express the fact that he takes no joy From Bitcoin losing 80% of its value to despite his previously negative comments about the top crypto did you take.

Any satisfaction When Bitcoin dropped 80% or no?

No.

I think bitcoin is better than marijuana, isn't it Jamie?

It is, but we're not banking pot either.

Diamond added that he believes that blockchain is the future for some industries, just not all of them.

And it may be usable for certain things and not for others. It does cost money to maintain to process a transaction. So like for equity trades, if it costs $0.02 to process the black train and equity trade costs you a penny, you aren't going to use it for that.

With populism growing across the world, the global elites might be worried they're losing power. So we have a bright future ahead of us. Where Bitcoin survives and Davos dies. Bithub, the world's second largest crypto exchange by trading volume, is planning to go public in the US by means of a reverse merger, also known as a reverse initial public offering. The term indicates that a private company will acquire a publicly listed company in order to bypass the often lengthy process of conducting an IPO. In this case, Singapore based BitHub's holding company has signed a legally binding document in which it states the intention to acquire the already public company Blockchain Industries. The combination of the two companies will be known as Blockchain Exchange alliance, and it will be the first publicly traded crypto exchange in the US the move will help Bithub in expanding its operations in North America. The CEO of Blockchain Industries, Patrick Moynihan, said that the deal will bring liquidity, solidity and expansion to the crypto industry. Bithub is not the only company that opted for a reverse merger as a backdoor to go public. Also this week, OKC Holding Group, the parent company of crypto exchange OkCoin, bought a controlling share in a Hong Kong publicly listed company, becoming potentially eligible to be listed on the Hong Kong stock exchange. And last year, Mike Novogratz used the same method to get his crypto centered merchant bank Galaxy Digital listed on a Canadian securities market. Bitcoin will eventually have to abandon the proof of work system, says a recent study published by the bank of International Settlements, which deemed the current system intrinsically unsustainable. Proof of work the protocol used to confirm transactions on Bitcoin's blockchain is inherently expensive, according to the study, High transaction fees are required as a means to guarantee the network's security and and as the number of mineable bitcoin will increasingly diminish, transaction fees will not be enough to sustain mining expenses. As a consequence, the whole network will eventually slow down and become unusable, the authors note. Simple calculations suggest that once block rewards are at zero, it could take months before a Bitcoin payment is final unless new technologies are deployed to speed up payment finality. Despite the development of second layer solutions such as the Lightning network, which could help in speeding up transactions, the paper writes that they don't represent a viable solution for the long term. The only fundamental solution, the paper says, would be switching to another form of consensus mechanism, which will probably require some form of social coordination and institutionalization. The bank of International Settlements has been critical of crypto in the past, and so a recommendation for a higher degree of institutional oversight over digital assets does not come as a surprise. John McAfee was running on a pro crypto platform and now he's literally running away. On Tuesday, McAfee claimed to be fleeing the US but his actual whereabouts are never confirmed. And he does have a flair for victimhood in theater. His alleged flight came after he was indicted by the irs, reportedly. But don't worry if you were tired of Trump or don't believe in Biden, his presidential campaign will continue from his boat. He recorded his current escapades on Twitter for the world to see. Here is the best of it.

Good evening ladies and gentlemen. Gentlemen, you're probably wondering how I'm going to manage my presidential campaign from a boat. I have with me on this little speaker, my campaign manager Rob Loggia in New York. So what's actually happening here, people? Every so often and very rarely, a clash of old and new cultures brought about by technology changes, civilization. Cryptocurrencies is one of these technologies and probably the most dramatic to have occurred in human history since the invention of fire.

A new crypto friendly bill was introduced last week in Wyoming. If approved, Wyoming will become the first US State allowing local banks to provide custodial services for digital assets in the same way they do now for mainstream securities. Also, digital assets will be classified as one of the securities assets or currency, thus enhancing the clarity of cryptocurrency's status in Wyoming. In an interview with Forbes, Wyoming Senator and proponent of the bill, Tara Nethercroft said the time is now to provide the pathway for blockchain and cryptocurrencies, and Wyoming has the nimbleness and responsiveness to the needs of these industries to respond accordingly to the growing and adapting landscapes of cryptocurrencies. According to Caitlin Long, co founder of the Wyoming Cryptocurrency Coalition, the introduction of the bill is an important step towards Wyoming becoming the sandbox for the crypto industry. We reached out to Caitlin and asked her to comment on the issue.

What we're hoping is that the industry migrates here. It's got by far the best laws. And that's exactly what the intent is, that folks come here. The institutional piece of that is just a small piece of it. I think a lot of folks, seemingly this week were really surprised to learn that there is a very active lending market for bitcoin, especially about all virtual currencies. Of course, that's not happening on the blockchain. That's all happening in traditional centralized databases. There are a number of startups in this field and every one of them is taking a lot of legal risk. What we're aiming to do is just by clarifying the legal status of the assets, it gives them less legal risk and they're more likely to come to Wyoming as a result. Probably the most meaningful impact of all of that is that virtual currencies get the same transferability rules as money. There were some folks who picked up and said, wait a minute, virtual currencies are money? That technically. No, that's not the case. The states in the United States cannot determine what legal tender is in the United States by constitution, we can't do that in the states, but what we can do is apply the same transferability rules as money. And so that's a big deal because no other state has done that. And what it means is it improves the negotiability of bitcoin and other virtual currencies as assets. You may be wondering, what the heck is this? Not your keys, not your coins. Why would anyone ever want to custody their coins in an institution? Aren't we trying to get away from institutions? And the answer is, of course, yes. As an individual, you should never hold your bitcoins or cryptocurrencies on any exchange or institution longer than you have to. The challenge is that institutional investors, by law in most countries, not just the United States, are not allowed to self custody their assets until we can actually change those rules. What's going to happen is as institutional investors come into this industry, they're going to have to have custodians. Therefore, given that custody is going to form in this industry, how can we do it in a way that keeps with the ethos of the industry and the peer to peer nature of the technology? That's what Wyoming's aiming for.

What do you guys think about Davos? Should it be canceled next year? Have the global elites really destroyed the world. Comment your opinion below. And as always, remember to like subscribe and hodl cointelegraph like subscribe and hodl.