Bitcoin, Blockchain, Battlestar Galactica

Oh, and barring any being returned, Germany is now out of Bitcoin having sent their last 3000 to traders. Good going Germany.

 

The formerly Indian now Dubai exchange WazirX was hacked for $230 million. That's about half their holdings. Looks like the North Koreans.

 

I'm sure lol is an inappropriate response, but...well...
LOL

 

That is an entirely appropriate response, except for the North Korean part.

Crytpo is mostly criminal and evil, and if there are any parts of it that are not they serve the criminal and evil parts either indirectly or (like this) directly.

 

The price of Bitcoin has been pumped really hard the last week as exchanges get ready for the Mt. Gox distribution. But miners are taking advantage and are selling very hard too. In the last month they have sold 170% of the coins they earned as they tap into their reserves to keep going in the face of dwindling revenues after the halving.

 

Continuing the story of Riot, one of the largest Bitcoin miners (post, post) as they are public and have to release information that most miners don't. They released their earnings report, and it was pretty bad. They lost $84 million in the quarter, and even worse they had a 50% decline in the number of Bitcoins mined thanks to the halving and worldwide competition heating up. They survive by continually issuing new stock, and I keep saying that can't last forever but it there seems to be a never-ending demand for the things from morons so who knows. It basically costs them almost $70,000 (only electricity and computers - not including things like the CEO's mansions) to mine a single Bitcoin, which is Bitcoin's high this year.

Does this mean Riot is going to be slowing down? No, they have opened the Corsicana Facility last April and will be finished later this year. By year end this facility is going to consume a full gigawatt - enough to power 90,000 wasteful American homes. To make random numbers.

 

Customers Bank - the bank that took over handing cypto once Silvergate and Signature banks folded - has now been issued enforcement action by the Federales. This happened to Silvergate and Signature just before each of them collapsed.

Crypto needs a bank to provide a connection to the existing financial network while running the software backbone of intra-crypto cash trading that shields them from Know Your Customer regulations. If enough keep falling no one is going to want to pick up the baton. Maybe Axos bank, who also run that kind of software (everyone is using Customers Bank's CBIT software currently).

 

The lost $200 million on the quarter (most of which was marking down their now worthless old computers), and produced 30% fewer Bitcoins then last years' quarter (which isn't that bad considering the halving). But they were in the news recently for buying $100 million Bitcoins and they promised they won't sell any in the near future. So they need cash to run, they don't sell what they produce, and they use a big block of cash to buy more stuff they won't sell.

A frequent joke in Leverage happens when the poor people they help say they can't pay. The Leverage people say "we operate on an alternate revenue stream". Marathon seems to operate on an alternate revenue stream. When I figure it out I will tell you.

 

Just so telling us doesn’t involve Leverage spoilers. The Mrs. and I have that on our list

 

I don't know if Leverage is the kind of show that can be spoiled. Doesn't really have twists and the grand arcs of seasons 3, 4, and 5 are barely there.But it's tremendously fun. One of my favorites.

 

The main reason we want to check it out is that it was developed by the same team that did The Librarians, which is pretty good.

 

Oh, and the continuation of the show, Leverage Redemption on Amazon's free channel is just as good.

 

The remains of Celsius, currently under bankruptcy, has famously started claw-back procedures against their customers who withdrew money just before the collapse. Well, add another one to that.

Because they are suing Tether for $2.4 billion. Tether lent a lot of tether tokens to Celsius with Bitcoins backing the loan. Celsius defaulted on the loan at the time of their collapse and Tether collected all the Bitcoins automatically (smart contract and all that). Celsius want to claw those coins back to properly distribute them according to bankruptcy rules.

Tether has two big problems here. First, it clearly says in their terms of service that they won't issue tether tokens for crypto - only hard money. That strongly weakens their case that the Bitcoins are theirs, plus opens them up to fraud charges (this is exactly what they were found guilty of in New York years ago). Worse, the court case is probably going to reveal a lot of Tether internals through discovery.

 

They're just in the news again. They are offering $250 million in convertible senior notes (debt that can be converted to shares) and they say they are going to buy more Bitcoin. They want to become a new Microstrategy. I am flabbergasted.

 

But it's tiny compared to the size of the Bitcoin transactions. It's a Bitcoin ETF proxy with a rump software component. If you look at anything Michael Saylor says about MicroStrategy it's always about Bitcoin, and the stock moves with Bitcoin, not with the larger market.

Even when they were a pure software company they were more about the finance than the product. The collapse of their skyrocketing stock was the trigger for the 2000 Dot Com crash.

 

No it isn't.

 

If you are wondering how the Mt. Gox distribution is going, they have already sent around $6 billion to people's accounts on exchanges (although the exchanges have been slow in giving customers the ability to do anything with it) and they have just sent around $700 million more. There's around $3 billion left.

If you are wondering how the crypto world is going to handle that, Tether has been making tokens out of thin air like crazy. They have created $3 billion Tether tokens last week alone. Basically, this acts like a giant buffer. If a bunch of customers wanted to sell their Bitcoin for cash on BitGo, BitStamp, or Kraken right away, these exchanges don't have the cash to do it. But they convert to Tether first and then convert to money, they have the entire (mostly illegal) world-wide economy of Tether to draw cash from.

 

Tether doesn't allow conversion (which is what a real stablecoin does), but there's so much worldwide trade (almost all illegal) going on with Tether so you can get your dollar back pretty easily.

 

One of the largest exchanges, Kraken, got some bad news yesterday. On the 23rd a US district judge denied Kraken’s motion to dismiss a SEC lawsuit which claims some of Kraken’s cryptocurrency transactions could be classified as securities. This is a big deal because if the transactions could be put to the test (and now they will be), it is pretty much certain they will be found to be securities.

This means, among other things, that wash trading and pumps and dumps on those tokens would be illegal. The ones affected are pretty much everything except Bitcoin, Etherium, and the big stablecoins. Exchanges mostly get money from alt coin trades (not to mention they heavily use alt-coins for re-arranging the deck chairs to look like they are still afloat).

 

The US dominates in crypto fraud per capita. Almost 40% of losses were by folks 60 and older.

https://jabberwocking.com/america-is-the-crypto-fraud-capital-of-the-world/

 

Hopefully the ex went through with her plan to invest in bitcoin with her half of the house sale.

That would warm my heart

 

According to a Coindesk article, crypto crime is about 1/10 of all financial fraud in the US, but it's half the total losses.

And that is probably far under-reported, too.