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Bitcoin Has ‘No Intrinsic Value,’ As U.K. ‘Moves Towards’ Crypto Ban

Bitcoin and cryptocurrency regulation has been pushed into the limelight over recent weeks, thanks to social media giant Facebook’s high profile plans to launch its own potential rival to bitcoin sometime next year.

The bitcoin price, which had been climbing on rumors that big technology companies were taking an interest in bitcoin and cryptocurrencies, has plateaued at around $10,000 per bitcoin after a number of countries rebuffed Facebook’s plans, unveiled in June.

Now, the U.K.’s financial services watchdog has warned potential investors that bitcoin and cryptocurrencies have “no intrinsic value,” with some taking the caution as a signal the country could be moving towards a bitcoin ban.

“This is a small, complex and evolving market covering a broad range of activities,” said Christopher Woolard, executive director of strategy and competition at the U.K. Financial Conduct Authority (FCA), which oversees London’s huge banking industry.

“Today’s guidance will help clarify which crypto-asset activities fall inside our regulatory perimeter,” Woolard added, with the FCA warning: “Consumers should be cautious when investing in such crypto-assets and should ensure they understand and can bear the risks involved with assets that have no intrinsic value.”

The FCA branding bitcoin and cryptocurrencies as without “intrinsic value” is likely to rile many bitcoin believers who have long argued blockchain technology, which underpins bitcoin and most other cryptocurrencies, gives the digital tokens value.

“It is technically true that cryptocurrencies have no ‘intrinsic value’ when compared to share ownership in actual companies, however there are many examples where a marketplace bestows value on an intangible asset,” Jon Ostler, of comparison site Finder.com, told the U.K.’s Telegraph newspaper. “For example, the brand of ‘bitcoin’ itself has value and although its future place in society is still unclear, it is one of the most likely coins to stay the course.”

The warning from the U.K. comes shortly after U.S. president Donald Trump unleashed a scathing attack on bitcoin and cryptocurrencies, comments that were then echoed by other senior officials in his administration, including Treasury secretary Steven Mnuchin who branded bitcoin and cryptocurrencies a “national security issue.”

It’s thought that Trump’s attacks on bitcoin and crypto were in direct response to Facebook’s libra cryptocurrency project, which, if successful, could undermine the international dominance of the U.S. dollar.

“Although not a ban, [the U.K.’s FCA warning is] a move in that direction,” said Herbert Sim, head of business development from Broctagon Fintech Group. “This lack of enthusiasm is shared by several countries; the U.S. with its scrutiny of libra, and India, who are looking to implement a similar ban on cryptocurrencies which are not state regulated. These movements could end up coming back to bite. The international competition on cryptocurrencies is heating up and there are huge risks in being left behind.”

Meanwhile, the watchdog warned investing in what it called “unregulated crypto-assets” will not be covered by the Financial Services Compensation Scheme, which pays out if the investment collapses.

“It remains possible in the future that if an unregulated token is subject to common acceptance and usage in the U.K. then either the FCA or the Bank of England will reconsider this position in order to ensure that adequate consumer protection exists,” said Tim Dolan, partner at law firm Reed Smith.

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I am a journalist with significant experience covering technology, finance, economics, and business around the world. As the founding editor of Verdict.co.uk

 

Source: Bitcoin Has ‘No Intrinsic Value,’ As U.K. ‘Moves Towards’ Crypto Ban

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US Lawmakers Are Realizing They Can’t Ban Bitcoin

Those who have been longtime critics of Bitcoin usually have one key theory in common, which is that governments will eventually ban Bitcoin and cryptocurrency will then cease to exist in any meaningful form. For examples of this point of view, just look at economist Nouriel Roubini and JPMorgan Chase CEO Jamie Dimon.

That said, implementing such a ban is no easy task. After all, Bitcoin was built by cypherpunks as a form of digital money that would be unaffected by the desires of politicians and regulators around the world.

Lately, it appears that lawmakers in the United States are starting to realize the difficulties associated with a potential Bitcoin ban.

Bitcoin Ban Deemed Unlikely During Congressional Hearings

On Tuesday, the U.S. Senate Committee on Banking, Housing and Urban Affairs held a hearing on cryptocurrency and blockchain technology regulation. During that hearing, Senate Banking Committee Chairman Mike Crapo (R-ID) shared his belief that the United States would not be able to succeed in banning Bitcoin.

“If the United States were to decide — and I’m not saying that it should — if the United States were to decide we don’t want cryptocurrency to happen in the United States and tried to ban it, I’m pretty confident we couldn’t succeed in doing that because this is a global innovation,” said Crapo.

This statement came in the form of a question to Jeremy Allaire, who is the co-founder and CEO of global financial services company Circle. In his response, Allaire explained the new reality created by the creation of Bitcoin.

“I think the challenge that we all face with this is some of these cryptocurrencies — they’re literally just a piece of open-source software,” said Allaire. “There’s nothing else. It exists on the internet, it’s open-source software, anyone can implement it, it runs wherever the internet runs, and these have a monetary policy where these assets are algorithmically generated . . . That is a challenge that every government in the world now faces — that money, digital money, will move frictionlessly everywhere in the world at the speed of the internet.”

These remarks made during Tuesday’s hearing follow comments made by U.S. Congressman Patrick McHenry (R-NC) from earlier in the month when he stated “there’s no capacity to kill Bitcoin” during an interview with CNBC.

Back in May, Congressman Brad Sherman (D-CA) claimed that Congress should implement a ban on Bitcoin, but Sherman did not share specific details as to how such a ban could be effectively achieved.

                                

The difficulties associated with implementing a ban on Bitcoin are behind one economist’s theory that the best way to kill the cryptocurrency would be for governments to become more competitive in terms of monetary policy and financial freedom.

Abra CEO Bill Barhydt has also pointed out that bringing forth a Bitcoin ban could be legally difficult for the U.S. Government. That said, there is growing support for bans on encryption-based technologies among various law enforcement agencies in the United States, in addition to the Trump White House.

On the other hand, more centralized cryptocurrency systems like Facebook’s Libra project, which is really a cryptocurrency in name only, would be much easier for governments to control.

It should be noted that extreme limitations on technology and financial freedom, such as the new cash-related bill making its way through the Parliament of Australia, may end up unintentionally educating more people as to why Bitcoin has value in the first place.

Follow me on Twitter. Check out my website.

I’m a writer who has been following Bitcoin since 2011. I’ve worked all over the Bitcoin media space — from being editor-in-chief at Inside Bitcoins to contributing to Bitcoin Magazine on a regular basis. My work has also been featured in Business Insider, VICE Motherboard, and many other financial and tech media outlets. I’m mostly interested in the use of Bitcoin for transactions that would be censored by the traditional financial system (think darknet markets and ransomware) in addition to the use of bitcoin as an unseizable, digital store of value. Altcoins, appcoins, and ICOs don’t make much sense to me. Find all of my work at kyletorpey.com. Disclosure: I hold some bitcoin.

Source: US Lawmakers Are Realizing They Can’t Ban Bitcoin

Warren Buffett: ‘Gambling Device Bitcoin Hasn’t Produced Anything’

Turns out 88-year-old Warren Buffett isn’t warming up to crypto after all. Speaking at what’s been dubbed the “Woodstock of Capitalism”, the billionaire investor told shareholders in Berkshire Hathaway how he really feels about bitcoin. His company’s annual shareholder event is being held in Omaha today, and he just couldn’t resist lamenting the digital currency that he just doesn’t understand. Buffett reportedly stated:

“It’s a gambling device… there’s been a lot of frauds connected with it. There’s been disappearances, so there’s a lot lost on it. Bitcoin hasn’t produced anything.”

At least Buffett didn’t call it “rat poison squared” like he did last year. His partner in crime, Charlie Munger, reportedly once compared crypto trading to “dementia.” Buffett’s shareholders probably come to Omaha just to hear what he’ll say next about the crypto revolution taking the economy by storm.

bitcoin

The bitcoin price is barreling for $5,700. | Source: CoinMarketCap

BITCOIN ‘ISN’T AN INVESTMENT’

Buffett didn’t stop there. He went on to insult investors who not only have benefitted from the peer-to-peer nature of bitcoin but he also suggested that it’s not an investment at all. Tell that to the 100-million strong crypto community, many of whom have seen their portfolios balloon since the bitcoin price hit a new 2019 high this week. Buffett is digging his own grave, so to speak, saying:

“It doesn’t do anything. It just sits there. It’s like a seashell or something, and that is not an investment to me.”

Bitcoin’s market cap is now $101 billion; it’s increased from $89 billion in the past two weeks or so. If that’s a seashell, then take us to the beach so we can start collecting them.

berkshire hathaway

Berkshire Hathaway shares are underperforming the S&P 500 year-to-date. | Source: Yahoo Finance

WARREN BUFFETT’S BUTTON ICO

He went on to seemingly poke fun at ICOs next because he couldn’t possibly mean bitcoin when he says:

“I’ll tear off a button here. What I’ll have here is a little token…I’ll offer it to you for $1000, and I’ll see if I can get the price up to $2000 by the end of the day… But the button has one use and it’s a very limited use.”

Hmm, let’s see. Bitcoin is a store of value that rivals gold. It is a peer-to-peer digital currency that gives migrants a way to send money to their families faster and cheaper than any money-transfer service without the blockchain can do. And it’s decentralized, so it’s not subject to the whims of any central bank or government that turns on the printing press and causes inflation.

IMF to crypto: “please be gentle with our house of cards” https://www.cnbc.com/2019/04/11/cryptocurrencies-fintech-clearly-shaking-the-system-imfs-lagarde.html 

Cryptocurrencies are ‘clearly shaking the system,’ IMF’s Lagarde says

IMF Managing Director Christine Lagarde said Wednesday that new technologies like digital assets and cryptocurrencies are having a clear impact on the banking sector.

cnbc.com

Whether he realizes it or not, Buffett is spreading FUD about bitcoin and the blockchain, saying:

“Blockchain…is very big, but it didn’t need bitcoin. J.P. Morgan, of course, came out with their own cryptocurrency.”

Blockchain pioneer Wences Casares once said that people who fail to recognize the value of bitcoin but believe in blockchain tech demonstrate an “ignorance for how the system works.” We’ll leave Warren with Wences’ words of wisdom:

“Blockchain doesn’t exist without bitcoin…If you were to remove the bitcoin, miners would disappear and so would the blockchain.”

Source: Warren Buffett: ‘Gambling Device Bitcoin Hasn’t Produced Anything’

$3.2 Million From Cryptopia Hack Liquidated on Major Crypto Exchanges

The infamous Cryptopia hack of January 14, which led to over $16 million in stolen Ethereum (ETH) and ERC20 tokens, has been under close investigation by New Zealand police and specialists worldwide.Thanks to the open nature of cryptocurrencies on the blockchain, analysts and investigators have been successful in tracking the stolen crypto funds, leading major cryptocurrency exchanges to liquidate $3.2 million in stolen tokens on February 4…………

Source: $3.2 Million From Cryptopia Hack Liquidated on Major Crypto Exchanges

10 Year Anniversary of Hal Finney’s Running Bitcoin Tweet: Rapid Growth

The late cypherpunk and cryptographer had just become the first person to receive the digital currency from its creator Satoshi Nakamoto himself. But more importantly, he had become the first person to trust bitcoin for its immense potential. He would run its code, review its anonymity and environmental drawbacks, suggest changes, and would entirely immerse himself to support an open-source project that would one day grow up to challenge the status-quo of mainstream finance.

Source: 10 Year Anniversary of Hal Finney’s Running Bitcoin Tweet: Rapid Growth

Bitcoin Continues Descent to $3600 as Hackers Steal 200 BTC from Electrum Wallet

https://www.pivot.one/share/post/5c259b1d595ce7158982996b?uid=5bd49f297d5fe7538e6111b6&invite_code=JTOJYV

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