Thursday , January 28 2021
Home / Tag Archives: Bitcoin

Tag Archives: Bitcoin

Different bitcoins different prices

Not all bitcoins are the same. If someone steals 100 bitcoins from a cryptocurrency exchange and tries to sell them, they'll have to price them at a discount to the market price in order to compensate the buyer for the risk of laundering them. Different bitcoins different prices.This isn't just a bitcoin phenomenon. There are two wholesale markets for banknotes, too. The legitimate one is comprised of banks, retailers, and cash-in-transit companies like Brinks that exchange notes at par....

Read More »

18 things about Tether stablecoins

Before I start my list, a bit of introduction.Tether is a stablecoin. It happens to be the most popular stablecoin in the world.A stablecoin is a digital IOU that is implemented on a blockchain. In Tether's case, it takes the form of a U.S. dollar-denominated IOU implemented on the Ethereum blockchain. Tether holds U.S. dollars in a traditional bank account. It issues digital blockchain-based Tethers that are convertible into those bank account dollars at a 1:1 rate. This promise is what...

Read More »

Bitcoin is an account, not a token

When economists talk about payments, they often make a distinction between token-based and account-based payment systems. In a recent post at the New York Fed's Liberty Street blog, Rodney Garratt & cowriters argue that new payments technologies like bitcoin and central bank digital currency may not fit into these traditional categories. Perhaps it's time for a reorg? In an account-based system, some sort of database stores account information. For a payment to occur across this...

Read More »

Bitcoin is more like ham radio than the early internet

People in the bitcoin community often make fun of me as a nocoiner. That is, I don't have any bitcoins and am vocal about that fact. (Neither of which is true, by the way).The truth is that I have no problem with bitcoin. It is a solid protocol that has survived handily for eleven years. When I come off as being critical, it's usually because I'm attacking the various narratives, or fan fictions, that have sprung up around bitcoin. Don't get me wrong, all movements rely on some sort of...

Read More »

Why Fedcoin

Six years ago I wrote a blog post about Fedcoin. Fedcoin is a type of central bank digital currency, or CBDC. (I called it Fedcoin at the time, but it could be any central bank that issues it, not just the Federal Reserve.)So why Fedcoin?The rough idea was that it might make sense for the Federal Reserve to create a digital version of the banknotes it issues. To do so it would use a blockchain, much like the blockchains that power Ethereum or Bitcoin. Anonymous users all over the world...

Read More »

The bitcoin-to-salvia divinorum trade route

I am now writing editorial articles for Coindesk. In my first piece I explored Strike, a new app that intends to bring bitcoin payments to a mainstream audience. Coindesk allows me to repost articles after a delay. Rather than putting up the whole thing, I'm just going to take a few bits from it and try to create something new.We've been discussing bitcoin-as-money on this blog for almost eight years now. Since then the stuff has always been just one design flaw away from taking off as a...

Read More »

Transferwise, why so fast?

This post explores some of the technological advancements that have allowed remittances to be completed in seconds rather than days.If you follow me on Twitter, you'll often see me retweeting folks who have just made really fast remittances using Transferwise, a company that specializes in cross-border payments. Like this one: Australia to Thailand, less than a minute.Remittance providers can achieve speeds like this by stitching together domestic 24x7 real-time payment systems, in this...

Read More »

What happens when a 96 bitcoin ransom payment ends up on Bitfinex?

"Hello, to get your data back you have to pay for the decryption tool, the price is $1,200,000... You have to make the payment in Bitcoins."This is a snippet from a recent court case concerning ransomware that just crossed my desk. Companies that fall victim to ransom attacks fear the publicity it might attract, so the details of these attacks are usually swept under the table. But in this case, the ransom payer—a British insurer that traced the bitcoins to Bitfinex, a major bitcoin...

Read More »

Cryptocurrency in a land of strict gambling laws

Kim Jin-Woo, K-pop star jailed for online gambling [source] I recently read that South Korea will not be taxing capital gains on cryptocurrencies next year. Young Koreans who became paper multi-millionaires when XRP or some other cryptocurrency skyrocketed from 0.1 cents to 25 cents have reason to celebrate. They can sell without having to give up a single won of their winnings to the Korean tax authority. Letting off the crypto-rich may sound like a bad tax policy. In this post I'll make...

Read More »

Bitcoin and sanctions

I recently watched a video with Alex Gladstein on the importance of financial privacy. In general I agree. We should be working on expanding the scope for transacting privately, although I am conscious of the tradeoffs. Anonymity helps good people evade bad rules, but we need to be wary of how it abets bad people evading good rules. (See for instance my recent post on the good & bad of using prepaid debit cards to donate anonymously). In the above list, Gladstein intimates that...

Read More »