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Tab Sweep – 6 March 2018

Bitcoin Blackmail by Snail Mail Preys on Those with Guilty Conscience – extortion for extramarital affairs, with ransom to be paid in Bitcoin. In the USA this is mail fraud.

Bitcoin Is the New Gold – Noah Smith writes an interesting piece, because he thinks it isn’t going to replace fiat money (lots of businesses have stop accepting it as a payment method), and neither is it going to zero.

Technological limitations:

Technologically, Bitcoin tends to be slow and laborious to use because it verifies transactions in small blocks. That problem isn’t particularly hard to overcome – just use bigger blocks, or use a form of temporary credit to ease the burden on the network. More ominously, Bitcoin relies on people known as miners to verify all transactions, and compensates them by creating new Bitcoins. But soon, this will stop, since the total number of Bitcoins is capped at 21 million – at that point, transaction fees will be needed to pay miners.

Economic limitation:

Things that are good financial investments don’t make good currencies, and vice versa.

if you got your paycheck in stock, or real estate, or Bitcoin, you wouldn’t even know at the beginning of each month if you’d be able to afford your rent, food and other necessities at the end of the month.

Cogent arguments, read the whole thing.

Prediction #4 — Bitcoin stays crazy until traders learn it is not a currency – Robert X. Cringely says, “It means Bitcoin isn’t a currency at all but traders are pretending that it is. 2018 will see investors finally figure this out.” And has some advice:

If you notice Bitcoin is down, buy it. When you’ve made as much profit as you need, sell it, then wait for Bitcoin to inevitably go back down again. Those who have a very high risk tolerance or think they can time the market will hold on longer and be more likely to lose their shirts. It’s a much better Bitcoin trading strategy to not be greedy, living instead on the crumbs of oligarchs and conmen.

Decentralized Blockchain-Based Electronic Marketplaces

NYT reports Bitcoin Thieves Threaten Real Violence for Virtual Currencies.

In the beach resort of Phuket, Thailand, last month, the assailants pushed their victim, a young Russian man, into his apartment and kept him there, blindfolded, until he logged onto his computer and transferred about $100,000 worth of Bitcoin to an online wallet they controlled.

“This is now becoming more pervasive and touching more law enforcement divisions that deal with organized crime and violent crime on a local level,” said Jonathan Levin, the founder of Chainalysis, which has worked with several law enforcement agencies on virtual currency crimes.

From a more personal view, this part made me a little sad:

The Thai police tracked the victim’s laptop, which was also stolen, to Kuala Lumpur. That’s where the trail went cold.

Michael Arrington writes, THE REAL HISTORY OF TECHCRUNCH. The interesting part here is about Keith Teare, whom:

But more recently Keith has gotten into the cryptocurrency world, and he has been wholesale selling out to advise, from what I can tell, over a dozen companies during their token sales. Sometimes they list him as the founder of TechCrunch (as above), sometimes as the cofounder.

He is neither founder nor co-founder.

From Malaysia: Cryptocurrency a tax headache for regulators.

In Malaysia, cryptocurrency transactions are currently tax-free as digital currencies are yet to be recognised for tax purposes. Nevertheless, there have been several cases of businesses and individuals using digital currencies as payment.

These include the recently suspended Proton dealership in Seri Kembangan, Selangor, which went viral on social media after it announced that it would be accepting bitcoin and ethereum as a form of payment for car purchases, to the chagrin of national carmaker Proton Holdings Bhd.

Just remember that there is no capital gains tax in Malaysia, with the exception for property. The article talks about how the USA and Australia handle crypto taxes, touches a bit on Luno’s bank account freeze, but the reality is there’s no such treatment for taxation (yet? forever? will there be a GST? Only time will tell).

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