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The court of Toronto, Canada has ruled the drug trader to give away his entire $1.4 million Bitcoin (BTC) holdings to the state Ministry of Attorney General. The amount of 281.41 BTC (worth around $1.4 million at press time) was utilized for performing illicit actions by the narcotics online named Matthew Phan. This is supposed to be one of the huge confiscation ever done in Canada, according to the report published on 3rd April by “The Star”.

Mathew Phan, was found guilty in December 2018 for smuggling and conducting mischievous activities such as importing weapons, drug trafficking, trading cocaine, and many unlawful activities.

Per the report, it is proclaimed that Justice Jane Kelly has ruled that the offender (Matthew Phan) should pay back 281.41 Bitcoins holding to the state. And the funds would be used towards the well being and prosperity of the region. Justice Kelly also remarked that the sinner had tried to convince the forum that the entire amount was not consumed for carrying out unlawful actions rather he employed some funds to perform legal operations like trading digital assets on various cryptocurrency exchanges.

Justice Jane Kelly stated in the report that:

“It is a reasonable inference to draw that payment for such illegal narcotics sales was made using Bitcoin that was found in the digital wallet on Mr. Phan’s computer”.

Kelly further added that, out of 288 Bitcoins, a sum of 7.23 Bitcoins worth around $36,000 was not considered to be the result of any criminal activity and hence the amount will not be forfeited. However, Phan is yet to be sentenced.

This court trial gained the attention of media and subsequently Quadrigacx, a trading platform disintegrated. The company is liable to pay approximately 190 million dollars to its stakeholders. Apart from this, the Canadian prosecutors have ruled to freeze $22 million in ICO tokens issued by Vanbex (local consulting firm) as it is reported that the high officials of the company are using the profits for their personal gains.



The recent Deconomy Conference held at Seoul saw the presence of crypto luminaries, including Ethereum Co-Founder Vitalik Buterin and the infamous crypto-skeptic Nouriel ‘Dr. Doom’ Roubini. The Hong Kong-based Digital Asset Exchange, ANXONE, recently tweeted that Roubini was satirizing when he stated that he was the real Satoshi Nakamoto, at the Deconomy forum held from between April 4-6.

Responding to ANXONE’s claim, Nouriel Roubini tweeted that he was the real creator of Bitcoin and that he incepted the digital asset to expose the inefficiencies of the legacy traditional institutions. He tweeted,

“What do you mean I satirized? I am the real Satoshi Nakamoto!! I created BTC to show a monetary and financial system that is even more inefficient, costly, corrupt, rent-seeking, greed-is-good biased, concentrated, oligopolistic, scammy, prone to manipulation than Wall Street!”

It was also reported that in the conference, which was titled the “Fundamental Value of Cryptocurrency and its Sustainability”, Buterin and Roubini got into a heated debate regarding the true value of digital assets.

The famous crypto naysayer claimed that the government and regulators would eventually take over the space. Vitalik held on to his stance and stated that one positive impact involving the creation of a new social expectation around privacy which, in the end, the authorities would have to adapt to.

This is not the first time that the duo has confronted each other. Prior to the latest stint, Dr. Doom had called Bitcoin “crap” and compared Vitalik Buterin to North Korean dictator Kim Jong-un.


Trading / CME Group Bitcoin Futures Hit Record Volume on April 4th
« on: April 07, 2019, 05:15:14 AM »

CME Group, the leading derivative market in the United States, reported that Bitcoin futures hit a record trading volume on Thursday, April 4th.

While cryptocurrency continues to trend in the bullish direction, the futures markets are heating up with both long and short positions. Compared to typical cryptocurrency exchanges, which allow investors to trade crypto with other investors based on agreed prices, the futures market allows for extended price speculation. Investors who wish to bet against the current bull trend for Bitcoin, or who may think the currency has already exceeded its market value can open short positions and cash in if the currency falls. Likewise, bullish investors can engage in long contracts in the believe that current market prices pale in comparison to future valuation.

According to a tweet published by the CME Group, Bitcoin futures hit an all-time high by a wide margin, with traders initiating 22,500 contracts worth over 112,000 BTC,

CME Bitcoin futures had a record trading day on April 4, hitting an all-time high volume of over 22.5K contracts (112.7K equivalent bitcoin), surpassing previous record of over 18.3K (64.3K equivalent bitcoin) on February 19

CME Group and the Bitcoin futures trading they provide has a historical legacy with the price of BTC. The group first opened Bitcoin futures trading to the public on December 17, 2017, during the last epic bull run for BTC that took the cryptocurrency to $20,000. However, the price soon curtailed and within a week of CME Group joining the scene BTC entered a steady free-fall in valuation.

Some investors have pointed to the presence of the futures market as curtailing the price growth of Bitcoin, particularly given the susceptibility of the crypto markets to manipulation relative to that of traditional stocks. Futures provide a way for investors to bet against the price of the currency, thereby capitalizing on BTC shorts, but it can also provide a source of manipulation if institutional clients start influencing the market.

Earlier in the week, Chicago Futures Trading Commission (CFTC) released its report on BTC trading positions, finding that the ‘smart money’ had overwhelming shifted against a continued cryptocurrency rally. According to the report, small-time investors were changing their future contracts to decrease shorts and increase longs. In comparison, larger institutional investors were steering in the opposite direction, increasing their short positions while pulling back on bullish future contracts for Bitcoin.

No one can seem to conclude the nature of the current Bitcoin market, with analysts equally claiming the coin is overbought and set to take off on another price rally. Fundstrat, a popular cryptocurrency analytics firm, pointed to Bitcoin trading above its 200-day moving average as an extremely bullish sign for the currency even with the massive gains BTC has accumulated thus far.

However, other analysts are beginning to point to $6000 as a substantial source of resistance for Bitcoin. BTC was trading around $6000 before the cryptocurrency market collapsed in mid-November 2018. GIven the glut of investors who lost money in the sudden market movement, there will likely be significant resistance at traders attempt to recoup from their position.


Crypto Discussion / Decentralization: The Big Problem For Blockchain
« on: April 07, 2019, 05:09:51 AM »

Decentralization is one of the buzzwords of blockchain technology: companies and web sites have sprung up that include this word as part of their name.

Decentralization has been touted as a most advanced feature in fintech. The acronym DLT (Decentralized Ledger Technology) has become a synonym for blockchain in the fintech permissioned environment.

Few realize that decentralization is itself the problem, and has kept blockchain technology stalled for many years.

Let me explain:

In the 1960s, computer systems were centralized, or configured as a star network. Only in the early 1970s did the need to connect computers from multiple manufacturers become urgent.

At the time, the nodes of the few existing communication networks were typically organized hierarchically, but from the very beginning the protocols implemented in the nodes of the ARPA, RPCNET, PISA and other groundbreaker networks preceding the internet were designed with the general idea that no central node or authority should control, lead, be the center of, or own the network.

In other words, we knew that a centralized, star, multi-tier network, with its innate bottlenecks, was not going to satisfy even the 1970’s requirements of thousands of users. We also guessed that by reducing the number of bottlenecks through decentralization the problem would be reduced, but not solved. We knew that a solution would have to use a distributed, peer-to-peer model.

Since many organizations would be involved in the provision of nodes, links, and possibly-unreliable hardware and software, we had to assume that the network was unreliable. We did not know how a consistent set of data, or even a single transaction, could be maintained in multiple databases through an unreliable network when any node could generate a message or, in fintech terminology, a financial transaction. The problem was further compounded by the presence of deliberately malicious players.

Why blockchain technology has been hindered by the decentralization idea

In general terms, we recognize that a network is decentralized when the control of the network is shared among a subset of the network’s nodes.

A network is distributed when all nodes equally share responsibilities and run the same node software.

Decentralized (permissioned and leader-based) networks were often extensions of centralized networks deriving from application requirements, for example by the fintech industry.

The blockchain network software (basic system software) should not be designed according to application requirements, as these will change. We did not design the network precursors of the Internet and the Internet itself based only on the requirements of 1970’s applications. We could not have predicted what industries would develop based on the ability to share information globally.

In the same way, the underlying blockchain network should be as general, flexible and scalable as possible. The permissioned, client-server, and private network requirements can then be considered as special cases of a distributed network, for example by using the concept of Virtual Private (blockchain) Networks.

Distributed networks are more likely to be independent of any specific physical structure. Nodes can dynamically connect to each other and random connection procedures could possibly be used. Consensus solutions implemented on distributed networks can also be unpermissioned, majority- driven and recursive.

Distribution, not decentralization, should have been the main objective of crypto-network design.

Why we failed

The failure to investigate distributed consensus agreements partly derives from the 1982 formulation of the Byzantine Generals problem, which models how information integrity can be maintained in an unreliable environment. The Byzantine Generals problem has been studied by researchers for over thirty years.

The analogy of several allied army divisions holding a city under siege correctly assumed that no-one in the field could be trusted to deliver a message and that some of the generals themselves could not be trusted when issuing a command.

However, the formulation of the army analogy suggested at least two classes of troops: generals and soldiers.

Some people then restricted their thinking to a more specific case in which the generals issued commands that needed to be both carried to other generals and protected from tampering by attackers or traitors.

Eventually, this approach led to a limited definition of the consensus problem.

Leader-based consensus models such as Paxos and Raft were and taught in universities and adopted as models by designers of implementations of blockchain networks.

As a result, practical solutions of the Byzantine Generals problem focused on various methods for selecting a leader node, which would send a block of verified information to all other nodes, instead of seeking to achieve a consensus on the content of the block.

Missing the target

A consensus on which node should be the current leader does not solve the problem of trust. The current leader must be trusted. It must do the job of verifying and assembling blocks in a fair manner. Thus, the leader in current leader-based consensus protocols is required to provide some credentials: proof of work, proof of stake, proof of capacity or proof of anything else.

These “proofs” do not guarantee much more than a vested interest that leader nodes (or nodes aspiring to be leader nodes) may have in the network: the more interest they acquire, the less they will be willing to destroy their form of income.

These “proofs” guarantee that potential leaders have credentials, but do not guarantee that the information assembled in the block is correct, or at least that it has been verified by a majority of the nodes.

We have seen more than 60 proposed solutions based on leader-based models for various blockchain implementations. They suffer from a common fault: one node decides what every other node will store on the blockchain. The result is almost the opposite of what is required.

Summary of the disadvantages of leader-based protocols

Leader-based protocols have the following disadvantages:
  • They do not solve the problem of trust. The leader node may introduce faulty data, intentionally or not, in the block of information.
  • Rewards, associated with the work of verifying and assembling blocks, create an incentive for nodes to compete for the rewards and to be promoted to leadership positions. This incentive tends to create a special class of nodes. The network then morphs into a decentralized network. For example, Bitcoin started as a network of peers where every node could verify transactions and compete for a reward. Today it is a two-class network (miners and users) and is controlled by large pools of owners.
  • When the assembly of a block is left to one node, one of the major requirements of consensus theory is invalidated: the agreement is not based on a majority consensus about what information will be stored on the blockchain. The only agreement reached is the method for choosing a leader node.
  • A bottleneck, or single point of failure, is introduced: One node has to broadcast a block to every other node.
  • Efficiency is not the best: large blocks of data are more subject to transmission errors and re- transmissions of maximum size packets.
  • Redundancy is almost 100%: Each transaction included in a block has already been received by every node separately, when the transaction was initially issued.
A better analogy

When thinking about an analogy for the problem of reaching a common decision in an unorganized and unreliable environment, we could have used an analogy of an army without ranks, but it would not have been very intuitive.

A better analogy could have been the challenge of deciding the daily closing price on a stock exchange. In this analogy, a multitude of buyers and sellers determines the daily closing price of stocks using a stochastic process, without any particular person taking a decision for anyone else.

In the stock market there is no “right” answer for a stock price, just an agreed daily closing price.The stock market is a better analogy for distributed consensus

Similarly, in the composition of a block several variables, such as the order of the transactions, can determine the final block composition. There is no “right” block composition, just one that nodes agree on.

Consensus protocols based on a more distributed analogy could have avoided the tendency towards centralization and the requirement of intermediate nodes, typical of leader-based protocols.

Examples of intermediaries in a network are:
  • Miners, producers or verifiers, volunteering or engaged to provide a service to the network,
  • Special nodes of federated systems that have a stake in the success of the network,
  • Nodes elected with some criteria to perform network governance,
  • Nodes owned by trusted companies or institutions,
  • Special players, such as centralized Currency Exchanges holding user wallets.
What’s wrong with Intermediaries?

First of all, it is a question of cost: If the intermediaries are doing useful work, for example verifying transactions, then they need to be rewarded.

It is also a question of trust: customers using a network with intermediaries need to trust:
  • that the intermediary is not giving preference to certain users or transactions,
  • that the intermediary has not been, or will not be, taken over by a malicious attacker,
  • that the intermediary’s system is not experiencing a blackout, or targeted by a DoS attack, or experiencing a system failure, or any other cause that will affect or delay customer transactions,
  • that intermediarys’ system software and data are reliable, so that data integrity and security are guaranteed.
  • that they are really connected to a trusted system and not to an impersonator (e.g., some other system pretending to be a trusted intermediary), and
  • that no other unpredictable event will happen. Recently, for example, the owner of the Canadian currency exchange Quadriga died or disappeared. As a result millions of dollars of customers’ funds are missing.
Finally, it is a question of data availability. If a network has a privileged or restricted class of nodes managing the blockchain, then the majority of nodes do not have immediate access to the current replica of the blockchain. This may preclude the development of real-time applications, such as automated trading applications.

Is it too late to change the model for blockchain consensus?

Most experts will tell you that a major function of consensus protocols is to maintain the security of the network. This view confuses two issues. Security is certainly needed, but it is a completely different requirement that can be solved by other means.

Still, many developers are stuck with the ideas that consensus means choosing a leader and that consensus is needed to maintain security.

With hindsight, if we had thought of a better distributed analogy, the research could have turned towards a different direction, suggesting stochastic approaches and possibly could have led us to the earlier development of better distributed solutions without intermediaries.

This is now an education issue, more than a technical issue. Most researchers, consultants and experts on crypto-networks are proficient in all the details of PoW, PoS, DPoS and several dozen alternatives, all based on the same leader-based model.

The few solutions that are not leader-based, are not blockchain solutions: they are solutions in which each transaction is handled separately.

On the positive side, most people and 95% of companies, according to a recent poll, understand the potential of blockchain technology.

A transition from a decentralized to a distributed model is urgently required to unlock the blockchain’s true potential, to solve the problems of scalability and to run the blockchain on any user device without intermediaries.


Trading / Top 5 Crypto Performers Overview: BCH, LTC, DASH, NEO, XEM
« on: April 07, 2019, 05:02:26 AM »

The surge in Bitcoin on April 2 pulled most altcoins northwards. A number of altcoins soared, bringing back memories of the 2017 bull phase. Many altcoins outperformed Bitcoin, which shows that the market participants are accumulating the select beaten down cryptocurrencies at low prices.

Does this mark the end of the bear phase and the start of a new uptrend in cryptocurrencies?  Fundstrat Global Advisors co-founder Thomas Lee certainly believes so. According to him, Bitcoin is now in a bull market. He said that the whales, some of whom had sold in 2018, have started to buy again.

In a tweet, the CME group revealed that Bitcoin futures hit a record volume of 22,500 contracts on April 4. The previous record volume was 18,300 contracts, which occurred on Feb. 19. This shows that shorts were forced to throw in the towel and aggressive bulls entered long positions.

The sharp rally from the bottom is a positive sign that indicates demand at lower levels. However, to confirm a bottom, most digital currencies will have to successfully retest the breakout levels and then resume their recovery. Until then, the risk of a double dip remains. We shall get a confirmation within the next few weeks.


Bitcoin Cash (BCH) turned out to be the best performer among the major cryptocurrencies in the past seven days. The digital currency tends to rise vertically when the sentiment of the sector turns bullish. Recently, Crypto Facilities, a subsidiary of the San Francisco-based exchange Kraken, reported a sharp increase in Bitcoin Cash futures. The travel portal Bitcoin.Travel added support for Bitcoin Cash, bringing the total number of cryptocurrencies accepted to seven. Can the rally continue or will the digital currency again plunge towards the lows? Let us find out.

The BCH/USD pair traded in a tight weekly range for 11 weeks before skyrocketing higher. The sharp up-move has carried the pair above the 20-week EMA for the first time since May of last year. While the sharp up-move is a positive sign, failure to close (UTC time frame) the week with strength shows profit booking at higher levels.

This increases the probability of a minor consolidation or correction for the next couple of weeks as the bears try to reverse direction and sink the price back below $200 levels. However, if the price rebounds from the support zone of $265.14 to $241.97, a rally towards the 50-week SMA at $514 is possible in the medium-term. 


Even before the crypto rally began across the board, Litecoin (LTC) had increased about 101.22 percent in the first quarter, which shows that the traders had been gradually accumulating the cryptocurrency. The halving, expected to occur in early August, has also supported the rise. Swedish exchange Nordic Growth Market has listed exchange-traded products that track the value of Ripple and Litecoin, and these products will be available to European investors. Can the virtual currency continue its stellar run or will it hit a roadblock? Let us find out.

The LTC/USD pair has formed a rounding bottom pattern that will close on a breakout and weekly close above $91. The price has risen above both the moving averages, which is a bullish sign: it indicates a likely change in trend. The minimum target objective of the rounding bottom is $159. If this level is crossed, the rally can extend to the next critical resistance of $175.

Our bullish view will be invalidated if the bears defend the overhead resistance at $91. In such a case, a few weeks of consolidation cannot be ruled out. The trend will turn in favor of the bears if the prices sink below $62 once again.


Dash (DASH) has made strong inroads in the crisis that hit Venezuela and is now attempting to increase its presence in Columbia. Latin American cryptocurrency exchange Daexs has added Dash, which will help investors buy the digital currency in the Colombian peso. Dash is slowly expanding its presence in Thailand as well, as about 100 Dash online transactions were recorded in March. The team is also trying to enter countries like Zimbabwe and Turkey where hyperinflation has increased the use case for cryptocurrencies. Let’s see how the market views these events.

After trading in a tight range of $56.214 to $103.261 for 16 weeks, the DASH/USD pair broke out and closed (UTC time frame) above the range in the previous week. It has followed it up with a sharp up move this week. The pair has broken out of the 20-week EMA and is on target to reach the 50-week SMA at $176. Above this, the recovery can stretch to $224.

Our bullish view will be invalidated if the digital currency turns down from the current levels and plummets below $103.261. In such a case, a few more days of range bound action is possible.


NEO rallied over 31 percent in the past seven days to emerge as the fourth-best performer among the major coins. There were no major events that caused the rise: every rally need not be preceded by a piece of news. In a bear market, the fundamental developments and the price appreciation happens with a lag. When the sentiment improves, the cryptocurrencies play catch up and price in the positives.

The NEO/USD pair had been stuck in a tight range of $5.48080-$10.00 for 17 weeks. It managed to close above the range in the previous week, but it could not scale the 20-week EMA. The sharp move up this week has propelled it above the 20-week EMA. It can now rally to $17 and if this level is crossed, it can move up to the 50-week SMA at $23.

The trend remains in favor of the bulls as long as the price sustains above $10. A successful retest of $10 will confirm that the downtrend is over and a bottom is in place. But if the pair breaks down below $10, it can result in a drop to the lows at $5.48080.


The NEM foundation has launched the roadmap for the upcoming core engine release named Catapult. It promises to improve speed and scalability and bring in a number of new features hitherto unseen in any decentralized system. NEM will be accepted in a major convenience store and select shops in Taiwan through RapidZ payment system.

The XEM/USD pair is struggling to break out and close above the 20-week EMA. Unlike the other pairs, it is yet to stage a smart recovery from the lows. Even after the rally, it has only risen about 106 percent from the lows, which shows that the bulls have been slow to get into the pair. If the price turns down from the current levels, it can again drop towards the yearly lows.

But if the digital currency can rally and sustain above $0.07790717, it will indicate that the markets have rejected the lower levels and a rise to the top of the range at $0.13125258 is probable. This level is likely to attract selling as the 50-week SMA is also located close by.



The problem is not too much money printing, the problem is too little debasement because inflation remains very low.

So argued Nouriel Roubini, a left leaning economist who effectively in one sentence has somewhat summarized a new Modern Monetary Theory (MMT) that is gaining traction among the Davos men.

“The experience with the money printing of the central banks in the past decade has led to a rethinking for many observers. Although central banks have pumped trillions of dollars into the markets and have created new debt for states, companies and households, inflation is slowing down and interest rates are still at extremely low levels.

Not a few experts demand a general inventory of economic theories of money in the face of paradoxical conditions. The printing of money by the central banks and debt of the states is no longer a danger in this brave new world, but rather a promise. The new formula that combines both is MMT. That stands for Modern Monetary Theory.”

So says one of the Davos men according to a rough translation. This new theory is somewhat old and goes back to Georg Friedrich Knapp, the man accused of giving intellectual cover to the detachment of money from gold as a base.

These new economists, who cite as intellectual inheritance such distinguished men like Karl Marx and John Maynard Keynes, argue that:

“The balance sheet of the government does not include any domestic monetary instrument on its asset side; it owns no money. All monetary instruments issued by the government are on its liability side and are created and destroyed with spending and taxing/bond offerings, respectively.”

That is, the government creates money and according to John T. Harvey, the word borrowing is a misnomer when it comes to a sovereign government’s fiscal operations, because what the government is doing is accepting back its own IoUs, and nobody can borrow back their own debt instruments.

They are saying that the current view which states the Fed controls inflation and unemployment by setting interest rates is incorrect because the effect the Fed would have would depend on the demand for money/loans.

Such demand can come from the government which can create as much money as it pleases and can use taxation or debt issuance to destroy the money created and thus to lower supply if inflation increases. According to a summary:

“A sovereign government typically has an operating account with the country’s central bank. From this account, the government can spend and also receive taxes and other inflows. Each commercial bank also has an account with the central bank, by means of which it manages its reserves (that is, the amount of available short-term money that it holds).

When the government spends money, the treasury debits its operating account at the central bank, and deposits this money into private bank accounts (and hence into the commercial banking system). This money adds to the total deposits in the commercial bank sector. Taxation works exactly in reverse; private bank accounts are debited, and hence deposits in the commercial banking sector fall.

Virtually all central banks set an interest rate target, and conduct open market operations to ensure base interest rates remain at that target level. According to MMT, the issuing of government bonds is best understood as an operation to offset government spending rather than a requirement to finance it.

In most countries, commercial banks’ reserve accounts with the central bank must have a positive balance at the end of every day; in some countries, the amount is specifically set as a proportion of the liabilities a bank has (i.e. its customer deposits). This is known as a reserve requirement.

At the end of every day, a commercial bank will have to examine the status of their reserve accounts. Those that are in deficit have the option of borrowing the required funds from the central bank, where they may be charged a lending rate (sometimes known as a discount rate) on the amount they borrow.

On the other hand, the banks that have excess reserves can simply leave them with the central bank and earn a support [savings] rate from the central bank. Some countries, such as Japan, have a support rate of zero.

Banks with more reserves than they need will be willing to lend to banks with a reserve shortage on the interbank lending market. The surplus banks will want to earn a higher rate than the savings rate that the central bank pays on reserves; whereas the deficit banks will want to pay a lower interest rate than the interest rate the central bank charges for borrowing.

Thus they will lend to each other until each bank has reached their reserve requirement. In a balanced system, where there are just enough total reserves for all the banks to meet requirements, the short-term interbank lending rate will be in between the savings rate and the interest rate.

Under an MMT framework where government spending injects new reserves into the commercial banking system, and taxes withdraw it from the banking system, government activity would have an instant effect on interbank lending.

If on a particular day, the government spends more than it taxes, reserves have been added to the banking system. This will typically lead to a system-wide surplus of reserves, with competition between banks seeking to lend their excess reserves forcing the short-term interest rate down to the savings rate (or alternately, to zero if a savings rate is not in place). At this point banks will simply keep their reserve surplus with their central bank and earn the savings rate.

The alternate case is where the government receives more taxes on a particular day than it spends. In this case, there may be a system-wide deficit of reserves. As a result, surplus funds will be in demand on the interbank market, and thus the short-term interest rate will rise towards the Fed’s interest rate level.

Thus, if the central bank wants to maintain a target interest rate somewhere between the savings rate and the interest rate, it must manage the liquidity in the system to ensure that there is the correct amount of reserves in the banking system.

Central banks manage this by buying and selling government bonds on the open market. On a day where there are excess reserves in the banking system, the central bank sells bonds and therefore removes reserves from the banking system, as private individuals pay for the bonds. On a day where there are not enough reserves in the system, the central bank buys government bonds from the private sector, and therefore adds reserves to the banking system.

It is important to note that the central bank buys bonds by simply creating money—it is not financed in any way. It is a net injection of reserves into the banking system. If a central bank is to maintain a target interest rate, then it must necessarily buy and sell government bonds on the open market in order to maintain the correct amount of reserves in the system.”

Rather than a modern theory, this is effectively the priests coming out of their guilds to tell the masses how the monetary system works.

They argue for example that the textbook multiplier of savings, as in banks can lend 10 dollar for every dollar in savings, is deceptive.

They argue so very rightly because the Bank of England itself has come out to say that commercial banks, like Goldman Sachs, create money out of nothing when they approve a loan.

In summary, in the current monetary system every entity, except for commercial banks and governments, transacts with money created by commercial banks when they make a loan.

So if you borrow $100 form Goldman Sachs, at that point $100 is created from thin air. This $100 is then destroyed when you pay it back, but where interest goes or where it comes from has not been explained.

When the bank creates this money out of nothing and gives it to you, it demands a further $20 as interest payment on that $100.

Fed has stated that if the public knows how this $20 works, there is “a high risk that it will trigger political controversies.”

We suspect this $20 becomes central bank money (or reserve money as they call it), meaning in effect commercial banks create central bank money from nothing.

While we all transact with each other on Goldman Sachs IoUs, commercial banks transact with each other only with central bank money.

The central bank is the banker of commercial banks and the government. Goldman Sachs likewise borrows from Fed and the moment it does, new money is created that Goldman Sachs can now use to transact with other commercial banks.

Just as we get savings accounts, Goldman Sachs too can park “its” money on Fed and get a savings rate increase of money.

So far, what the MMT theorists are saying is quite obvious. For new money to be created, there has to be demand for new loans. If there is no such demand, money might be destroyed more quickly than created. They argue the government should then step in at this point and create such demand by investing in infrastructure or whatever.

But we are not yet finished with this in a nutshell explanation of the current monetary system at least as far as we understand it because there is another base layer.

While we transact with each other through commercial banks and commercial banks transact with each other through central banks, the central banks transact with each other through the Bank for International Settlements (BIS).

This is the most secretive institution in existence and here central bankers meet in private, ranging from the semi-communist China, semi-authoritarian Russia, Arab monarchies, the free European nations and the Fed, as well as every other nation’s central bank.

In these closed door meetings they coordinate global monetary (and otherwise) policy, including such mundane things as: from now on cryptocurrencies should be called crypto-assets according to a South African central bank official.

While we transact with each other in commercial bank money and commercial banks transact with each other in central bank money, central banks transact with each other in gold.

That is why they stock pile gold and that is why USA was willing to let free some ISIS fighters in return for $2.1 billion worth of physical gold.

That $2.1 billion number misleads. Physical gold is far more scarce, but the point is the current financial system does still have some basis in reality. It is not completely make believe. That is why when banks went under they had to take our wealth, rather than just print new money which they did in addition anyway.

That is why the MMT neo-chartists (charta being a token in latin) or Keynesians or perhaps even Marxists, are open to criticism, but in many ways they are just stating more clearly how the current monetary system works above the BIS level.

It is the case that the central bank can create money out of nothing depending on demand for loans or depending on its willingness to buy government debt from commercial banks. About 6% of the profit from this operation then goes to Goldman Sachs and other commercial banks, with the rest going to the Treasury.

It is also the case that the government itself doesn’t own any money for money is a very abstract concept that begins by the central bank creating it from nothing with its only constrain being whether it needs to pay in gold another central bank.

Thus in the very abstract, the government can create as much money as it likes with the practical constraint being how much it can tax and thus how much of the created money it can destroy through taxation to keep in check inflation, which is just another way of saying the taking of monetary supply out of circulation.

This is very much how the system works and it is one reason why some think the American economy is somewhat communistic for the state through its supply and contraction of money – whether directly or indirectly – can control the entire economy and since the state obviously can’t possibly know the right level of supply or contraction, we get depressions, we get banking collapses, and we get hyperinflation.

Bitcoin, cryptos, and the idea of free market money more generally where everyone is free to issue a currency and to manage it, are an alternative to this command economy because the value of money here is not implemented by the force of taxation, fines, or licensing requirements, but by the free choice of potentially billions of actors around the globe who by the regard of their own interest judge every second whether the service cryptos provide is useful to them or otherwise.

The control of our economy through certain gigantic corporations that do work with the government has been stated for long as a danger of certain communistic ideas that took root last century with Friedrich Hayek pronouncing a few decades ago in the Denationalization of Money that if we do not have free market money, like bitcoin, we will end up in a state economy like USSR.

MMT, therefore, is more of a brazen dive in that direction rather than something the current priests of economics are not currently preaching in any event.

As far as these pages are concerned, not one economist has our ear until they explain how interest is meant to operate in any fiat system, whether current or modern, but judged somewhat impartially, as far as the fiat system is concerned and within its constraints – regardless of whether we agree with the system itself or otherwise – MMT does appear to be at least more transparent.

We can vote out our elected politicians, while Fed’s secret meetings have no accountability.

Fed interest rate rises and their crashing of the economy over a century, April 2019.

As much as we think representative democracy has quite a few faults – they did elect Hitler after all – we can at least shout at whoever happens to be the President or Prime Minister and through pressure, including by taking to the streets – thus putting their heads on the line – we can potentially have the option of changing course.

As we have seen recently in the Trump v Fed battle, that still applies to some extent, but if things go wrong a niche would blame Greenspan (or obviously current Fed chair Powell) rather than perhaps the entire civil service.

MTT at least in a way brings some accountability. We’ll know to blame the government and vote them out. While as it stands you have Greenspans running the economy for so many years regardless of whether the politicians change for Fed remains completely unaccountable unless the president himself shouts at them.

So within the very limited constraints of the current financial system, we have no interest in taking any position regarding MTT. But if the view is enlarged to include potential alternatives, it appears somewhat clear that MTT – or whatever other centrally commanded fiat system – will go wrong and as that is the case, then it appears somewhat clear that cryptos are at least an insurance which guarantees freedom for there is no abstraction here beyond: let it be 21 million coins.



The Lightning Network is growing stronger every day. In addition to seeing the number of nodes double in a few months, a new project has added another element of crypto infrastructure: an account-free, non-custodial cryptocurrency exchange.

Boltz has just announced the alpha launch of their exchange, making it easier to exchange on-chain coins with the Lightning Network. In an announcement published to Medium, developers said they wanted to solve the “glaring issues” of Bitcoin’s scaling system.

Instead of entrusting coins to the exchange, Boltz uses ‘Submarine Swaps’ to exchange coins from Lightning Channels to the blockchain. Submarine Swaps are special smart contracts that tie ownership of transaction data to whether or not an invoice on the Lightning Network has been paid.

The Alpha release is focused on releasing Boltz tech to the cryptocurrency community, and currently offers instant swaps for the Bitcoin and Litecoin Lightning networks. Later milestones on the roadmap will focus on increased functionality, an improved frontend, increased security measures, and further currency options for atomic swaps.

The Lighting Network has already seen rapid expansion since its inception, as new nodes jump online every day. Though not flawless, it does provide some of the missing pieces to the Bitcoin puzzle like transaction speed and scalability. With the integration of atomic swap exchanges like Boltz, the Bitcoin protocol will only get stronger.



BlockFi, a leading cryptocurrency lending platform, had captured multiple headlines in the space, first with a decrease in the offered interest rate and then the backlash that they received because of it. In a recent interview with BlockTV, Zac Prince, the CEO of BlockFi, cleared the air about the decisions taken by the company as well as sought to explain its target audience.

Prince explained that a large adoption rate came from groups that weren’t the target audience. He stated that the real focus was on retail investors who were not affected by the change massively. In his words:

“We found out that institutional investors who possessed assets north of $10 million was not our focus group. The company also did not want to provide a 6.2 percent yield in a concentrated way across the book. We dropped the interest rate from 6.2% to 2% only in April and till March everyone got the exact rate as promised. Our main aim was and still is the retail market.”

The CEO then spoke about the benchmark for interest margins in the space and claimed that as of now, there is no real benchmark. Prince added that the recent bearish to stagnant to bullish behavior of the market displayed the difficulty in creating a set benchmark. According to him:

“ If there is a benchmark, it will depend on the futures market yield as well as the credit market.”

Zac Prince also touched on the accusations levied against the company after the interest rate was lowered. After the initial allegations of fraud, Prince had said:

“We didn’t launch with a 6 percent rate with the intention of changing it one month later and pulling a big gotcha on everybody. That would be really bad business.”

During the recent discussion, the BlockFi official stated that despite the fraud claims made against the company, the data and the experience tells a different story. He went on to elucidate:

“ The clients who were affected the rate change were able to withdraw the deposits without any extra fees. And out of the rest of the clients, almost 70 percent stayed on with the platform. Whatever withdrawal requests we had received were handled quickly and with no overhead charges.”



Crypto whale watchers are following large movements of XRP from Ripple.

In the last day, the company has moved 85,299,895 XRP worth more than $30 million across five separate transactions.
  • 10,000,000 XRP worth $3.5 million from Funding Wallet 1 to unknown wallet
  • 19,999,895 XRP worth $7.2 million from Ripple OTC Distribution wallet to unknown wallet
  • 20,000,000 XRP worth $7.2 million from Ripple to XRP II wallet
  • 15,000,000 XRP worth $5.4 million from Ripple to unknown wallet
  • 20,300,000 XRP worth $7.3 from Ripple to Ripple OTC Distribution wallet
Since Ripple typically sells XRP from its OTC distribution wallets, one of the transactions appears to be a sale of $7.2 million XRP to a third party.

At the start of the month, Ripple released one billion XRP worth more than $300 million from escrow to make the funds available to sell to crypto exchanges and other institutions.

Meanwhile, Ripple co-founder Chris Larsen is sending what’s being described as one of the largest donations ever made in a digital asset to a US university.

Larsen and his wife Lyna Lam say they will give $25 million to San Francisco State, with most of the donation denominated in XRP.

Larsen is an SF State and College of Business graduate. The university will use the gift to boost programs helping students learn about global entrepreneurial and fintech ecosystems.

“This groundbreaking gift will position the College of Business as an evolving, distinctly diverse and industry-relevant epicenter of business innovation and entrepreneurship. Chris, Lyna and Rippleworks are innovators, and their gift will inspire our students to creatively and strategically approach the business and tech landscapes to become the next generation of entrepreneurs and global business leaders.”

In 2017 Berkeley accepted its first Bitcoin donation, valued at more than $50,000. According to a report by Bloomberg, MIT and Cornell have both accepted undisclosed amounts in crypto donations.

Ripple is also using its new University Blockchain Research Initiative (UBRI) to donate $50 million to more than a dozen universities around the world, promoting education of blockchain and crypto.

The company has also created a social impact effort called “Ripple for Good” and recently donated $1 million to help struggling families in the San Francisco Bay Area.



Over past one-week Bitcoin has again been in the mood of its own and has entered the volatile zone. While the up move has made the bulls happy, neither fundamentally nor technically there was any clear reason for this price climb. As these spikes make the street happy, SFOX the prime crypto dealer draws a line of caution as it recent report states such moves just add to the volatility of Bitcoin.

The volatility in March was subtle but expect April to be more vigorous
SFOX, the prime crypto dealer recently released its monthly volatility report where captured critical data from exchanges around the globe for March 2019. Providing a comprehensive analysis of the volatility of leading crypto coins the report concluded that
  • The SFOX Multi-Factor Market Index shows a mildly bullish trend entering April 2019
  • LTC, BCH, and ETC all showed noteworthy volatility movements that weren’t obviously related to BTC, suggesting that the industry at large may be growing beyond BTC.
  • March highlighted the sustained focus on blockchain and crypto development in an increasingly low-volatility environment.
Explaining the March sentiment and volatility, the report stated:

“While some outlets such as The Wall Street Journal expressed bearish sentiment about the state of the market, several major coins showed significant growth in transaction volume, and companies such as Visa and Facebook expressed sustained interest in crypto and blockchain technologies. The data suggest that growth is still happening where it counts, as institutions continue to be interested in crypto and the sector’s infrastructure continues to mature”

The report further goes on to give a complete analysis of how the coins performed in March 2019, it does give an insight into how the month of April 2019 could turn out to be. The report believes conferences, futures expirations, and general uncertainty would potentially impact volatility in April 2019. The report acknowledges that the first few days of April have already taken the price of Bitcoin up by 25 %. Comparing it back to the 2017 rally, the report states that

“the sharp movement in BTC’s price without a clear cause could potentially lead to greater market uncertainty, which, in theory, could drive volatility upwards.”

The report states that there a four major conferences in the month of April that can drive the prices based on their outcomes. This includes New York High Tech & Innovation Family Office Meeting (April 10th), Palm Beach Global Finance Form (April 10th) Paris Blockchain Week (April 13th-19th) Blockchain Expo Global, London (April 25th-26th).

The Other drive of prices and volatility in April would be around April 26 which is the last day for CME Bitcoin futures. Crypto volatility typically moves around the time of futures expirations. With CBOE backing off from BTC futures, for the time being, the date of CME’s futures expiration may potentially impact volatility more than usual.

The report has clearly given out events that could impact the volatility and price of cryptos in April 2019. These are good enough signals for one to beware of what could lead to sudden declines or rise in the coming month.



The team behind Radar, a startup that raised $10 million last year and operates a decentralized cryptocurrency exchange on the Ethereum network, has recently unveiled a suite of tools for developers working on Bitcoin’s layer-two scaling solution, the lightning network.

According to CoinDesk, the tools are going to be released at the Boltathon hackathon, and will include a configuration helper to set up a lightning network node, an invoice ‘playground’ in which users can test if their nodes can connect to others, and a liquidity tool to help them send and receive payments.

The tools, the news outlet reports, are part of Radar ION, a site operated by the startup that helps onboard users onto the Lightning Network. This was notably the team’s first move branching out into the BTC realm, as Radar is known for creating a decentralized ether and ERC-20 token exchange called Radar Relay.

Speaking to CoinDesk Brandon Curtis, Radar’s product lead, stated:

We’re constantly scanning the horizon for groundbreaking technologies, last year our R&D team identified lightning as promising technology, with the potential for more than just payments. While an ethereum [decentralized application (dapp)] was our first product, our parent brand Radar is focused on building products for our next financial system.

Radar is reportedly planning to keep on focusing on the flagship cryptocurrency’s layer-two scaling solution, as it’s reportedly eyeing making it easier for developers to make apps for the Lightning Network.

Bitcoin’s layer-two scaling solution, as CryptoGlobe has been covering, is growing rapidly. Last month it reached a $3 million capacity, and at press time according to 1ML data it’s capacity is already over the $5 million mark. The network has over 7,800 nodes, and over 39,000 open payment channels.



EOS, the sixth largest cryptocurrency on CoinMarketCap, reported significant growth over the past few days, proving to be a strong competitor for Binance Coin [BNB], Litecoin [LTC], and Bitcoin Cash [BCH]. Apart from the performance in the market, EOS also set a new record for the most cryptocurrency actions processed in one single day.

Source: Block Activity

According to, an action is an instruction given from one account to perform on another special account running a smart contract.

Daniel Larimer, the CTO of, who developed the EOS protocol, tweeted about the development:

“#eos recently set a record of over 70m actions processed in one day. An average of over 810 actions per second. Our team is making great strides in further optimization and scaling. #B1JUNE”

According to data available on Block activity, the record of operation amounts to 83,797,783 and the data made available by EOS Titan indicated that over the past 24 hours, the most actions came from pornhashbaby contract, which was over 6.7k, and from the eosio.token transfer, which was calculated to be almost 3k.

According to another analysis conducted on the unique user accounts per hours for the past day, it was noted that pornhashbaby was the most used contract and was followed by eosio.token. This statistic and the performance of EOS might help drive more adoption for the cryptocurrency.

At press time, EOS was valued at $5.25 with a market cap of $4.76 billion. It noted a 24-hour trading volume of $2.22 billion and a seven-day rise of 23.69%. EOS observed a fall of 0.20% over the past day and dipped by 0.34% within an hour, at press time. EOS was highly traded on Bibox via the EOS/ETH pair, with a recorded volume of $190 million. ZBG followed Bibox noting a trading volume of $179 million with EOS/USDT pair. IDAX took the third place via the EOS/ETH pair and noted a volume of $124 million.



After the recent launch of the Cosmos Hub, a highly anticipated proof-of-stake (PoS)-based network that primarily aims to facilitate blockchain interoperability, or communication between independent chains, the platform’s developers have released some important updates.

Although transfers involving ATOM, Cosmos’ native token, have not yet been enabled, more than 50% of the ATOMs in circulation “are now bonded to just under 100 validators.” This, according to a blog post published on April 5 by “Chjango Unchained,” a Medium account operated by the head of communications at Tendermint (an organization involved in the development of Cosmos).

Blocks Being Generated “Every 6 or 7 Seconds”

Chjango Unchained’s blog mentioned that the nearly 100 transaction validators on Cosmos are currently generating new blocks at the rate of “every 6 or 7 seconds.” This activity can be tracked through an informative website that contains links to important data and real-time updates related to the development of the nascent Cosmos ecosystem.

Those contributing to the growth and adoption of the Cosmos Hub, including Sunny Agarwal and Ethan Buchman, have been covering specific topics such as “the launch, staking, governance, [and] app development” on the platform. These discussions are being held and uploaded to EpiCenter.

Decentralized Governance On Cosmos

As noted in Chjango Unchained’s post, the “first governance transaction” on the Cosmos network “came a week after” the platform’s mainnet was launched. This was reportedly done “in the form of a proposal” which aims to “align the expected block time of 5 seconds” with “the observed one of at least 6.5 seconds.”

Currently, approximately “80% of the bonded stake has voted” (almost all for “Yes”) and the Cosmos network’s participants are more carefully examining “proposals for the activation of ATOM transfers.” So far, there have only been two ATOM transfers while “voter participation” on the network remains “relatively high,” Unchained’s post states.

Going on to cite important governance-related challenges that other decentralized networks have faced, the post notes: “Will Voter apathy be a concern for Cosmos? Only time will tell.”

Those looking to learn more about how the governance process on Cosmos works can read this detailed article about its “mechanics.” Moreover, as the Cosmos network continues to grow, its community members will be developing “social norms” around the platform’s “governance practices.”

Key Development Updates For Cosmos

Ledger support for Cosmos App release v1.1.1 has been updated and those using the Ledger line of hardware wallets have been requested to install the latest version of the Ledger firmware (v1.5.5). This latest version, which includes key upgrades to the Cosmos App, must be installed if users are planning on transferring ATOM tokens to their Ledger Nano S devices.

Notably, Cosmos’ validator app, known as the Ledger Validator App, allows transaction validators on the platform to “use their Ledgers as hardware security modules (HSMs).” The validators' apps will reportedly “remain in developer mode since this software is meant to be used specifically for devops engineers.”

Other notable updates include those made to Lunie, an “open beta” (previously known as Voyager) which “supports delegating, re-delegating, and voting via the Ledger Nano S.”



Earlier this week, Brian Armstrong, Co-Founder and CEO of Coinbase, held an Ask Me Anything (AMA) session on YouTube. This article looks at some of the main highlights:

What Is Needed for Crypto Achieve Mainstream Adoption?

"I think there's three things in my mind. First one is volatility. Second one is scalability. Third one is usability.


If crypto is wildly swing all over the place, it's going to be harder to use as a real medium of exchange. And stablecoins are helping with that. The other thing that's going to help with that is more and more real uses in the real world happening so that these crazy bubbles that go up and down and all the speculation in crypto will kind of get dampened out if we drive the utility phase.


So, luckily, there's now 5-10 really well-funded teams out there working on all kinds of solutions from layer 2 solutions like Lightning Network to next-gen protocols, and so a lot of these are going to be coming out and continuing to grow in the next 6-12 months. I think once we do that, we need crypto be not just, you know, 5-10 transactions a second, but in the order of 500-5000 a second to be like PayPal or Visa levels. That would allow us to get an app with 100 million people using crypto.


There's still a lot of challenges there. You can imagine in a lot of these apps that are out there... It's still too complicated to go there, be able to sign in... It should work like WeChat or something like that where when you go to the app, it already knows who you are and it has your payment method already attached and with one tap, you can then complete an action or complete a payment..."

Why Doesn't Coinbase Pro Provide More Advanced Yet Relatively Basic Trading Features Such As Average Position Entry and P&L?
"Well, that's a great point. P&L is on the roadmap. That's something we've been trying to get on there for a long time. You know, some of these other ones, like average position entry, if you all want to see it, we'd love to hear it."

What Are Your Thoughts on the Future of Crypto Mining and Proof-of-Work?

"Proof-of-Work is still the most trusted thing that came out, and it stood the test of time. That was like a brilliant invention in the original Satoshi white paper that kicked off this whole revolution. So, I don't think that's go away anytime soon, especially in Bitcoin, but a lot of these next-gen protocols are experimenting with Proof-of-Stake, and you know, there are some benefits there -- the energy usage or the scalability -- so, my hope is that as industry, we can just keep innovating."

Who Are You and What Motivates You to Stay in Crypto?

"I'm basically nerd that likes to build stuff with technology... At this point, I'm just enjoying the process of learning. I am also a lifelong learner. Coinbase has been this crazy wild ride. We have 750 employees now. Every month, I have to learn some new skill... So, in that sense, it's been really rewarding."

Why Add Assets That Tarnish the Brand?

"Here's the way I think about this now. I think about it a lot like Google or Amazon... The general idea is everything that's not a scam or harmful to people should be added, but we should give people ratings and ways for them to evaluate these different tokens and coins."



The Nasdaq, which plunged in value following both the dotcom bubble and financial crisis, more than doubled in value in the following five years of post-bubble recovery. Like the Nasdaq, bitcoin could recover rapidly in the medium-term, analysis suggests.

The Nasdaq more than recovered from both the dotcom bubble crash and the financial crisis. | Source: Yahoo Finance

With the 200-day moving average of bitcoin reversing its trend for the first time in 16 months and various technical indicators demonstrating a positive near-term trend for the asset, many industry executives and investment firms like Pantera Capital believe bitcoin has bottomed out.

As suggested by Bloomberg’s emerging markets analyst Michael Patterson, if bitcoin found its bottom at $3,122 in December 2018, the dominant cryptocurrency may be en route to a strong upside price movement in the years to come.

“If Bitcoin has in fact bottomed out, history suggests there could be further upside. The Nasdaq more than doubled in the five years after its post-bubble low and has since reached record highs that are well above its peak during dot-com mania,” Patterson wrote.”

Since hitting its 12-month low, the bitcoin price has rebounded to $5,000, recording a staggering 60 percent increase in value within less than four months.

Bitcoin is up 60 percent since December. | Source: CoinMarketCap

Previously, former International Monetary Fund (IMF) economist Mark Dow said that bitcoin investors should head for the exits if the asset fails to recover to the $5,000 to $6,000 region, as it would lead the asset vulnerable to a potentially large downside movement.


Earlier this week, economist and global markets analyst Alex Krüger said that whether bitcoin has reached its bottom at $3,122 or not is not up for debate.

Purely based on technical indicators and data, Krüger emphasized that when the bitcoin price crossed $4,200, it broke out of its 16-month bear trend.

He said:

“The crypto bear market has been over for three months now. BTC breaking above $4,200 will mark the end of the bear trend that started in January 2018. Going to miss this big fellow.”

“This is not a call. Not a matter of aging well or not. A break above 4200 technically ends the bear trend that started Jan 2018. Facts don’t care about opinions. If strong selling resumes later on, that would represent a different trend.”

Moreover, fundamental analysts have said that there exist billions of dollars waiting on the sidelines in the cryptocurrency market to be allocated to crypto assets in the future.

The caution of strategists in the financial sector is that in the 1990s when Japan’s Nikkei plunged during an intense correction, it struggled to recover until 2009.

However, it is difficult to compare the price trend of bitcoin and major stock markets because of contrasting environments.

As seen in previous bull runs of the cryptocurrency market, cryptocurrencies tend to move in cycles. When the market is on an upside trend, parabolic movements are often spotted. When the market initiates a downward movement, it often suffers intensified volatility.


Thomas Lee, the head of research at Fundstrat Global Advisors, said that bitcoin tends to record its biggest gains in a 10-day time frame of every year.

As such, the way bitcoin and the rest of the cryptocurrency market behave in terms of short-term price movement is drastically different than how major markets such as the stock market of Japan moves.

Industry executives remain confident that bitcoin has established its bottom because of the level of activity in the cryptocurrency and blockchain industry across all leading markets including the U.S., Japan, and South Korea.


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