Centralization news

The concentration of control of an activity or organization under a single authority.

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Craig Wright and Nouriel Roubini agree that centralization isn’t a problem that needs solving

Crypto critic Nouriel Roubini faced off with some of the industry’s biggest proponents during the CC Forum conference in London but surprisingly found common ground with one of the most controversial figures in the space—Craig Wright. The two share the belief that the global financial system isn’t nearly as centralized as the crypto community believes it to be. A panel on the future of money quickly became a battleground for crypto While the crypto industry has been known to bring people from all backgrounds together, few could have expected that the industry’s loudest critic and its most controversial figure will be able to find common ground. During the CC Forum conference in London, economist and staunch crypto critic Dr. Nouriel Roubini found himself on the same wavelength as Craig Wright, the chief scientist at nChain and self-proclaimed Satoshi Nakamoto. Related: BitMEX Research and Charlie Lee denounce Craig Wright speaking at conference as Satoshi The two were part of a five-person panel discussing the future of money, which included former child actor and co-founder of Block.one Brock Pierce, former CEO of crypto exchange BTCC Bobby Lee, and crypto trader and former JP Morgan VP Tone Vays. The 45-minute long panel was meant to discuss the current status of the crypto industry but quickly turned into a heated, aggressive argument. While everyone except Roubini was, in one way or another, involved with cryptocurrencies, none of the panelists seemed to agree on what the best use for Bitcoin or blockchain was. Wright, who claims to be the original creator of Bitcoin, says it was envisioned as a transparent “tracing system” that enables people to access all of the information about their funds. Vays, on the other hand, believes Bitcoin to be a sovereign monetary system that is independent of any bank or government. Crypto’s most controversial figures find common ground The main enemies most of the panelists pointed at were governments and banks. A large part of the crypto community believes these centralized entities assert total control over their customers’ or citizens’ finances and create an unfair system that’s prone to censorship. But, Wright seemed to believe that centralization wasn’t nearly as big of a problem as it’s made to be. He went on to explain that there are”100 central banks” and “15,000 banks in the world”, all of which compete for a share of the market. Related: Nouriel Roubini accuses BitMEX CEO Arthur Hayes of ‘systematic illegal activities’ in latest op-ed He said that the argument that the centralization meant that a single entity was in control of all of the assets and money that go through it isn’t valid, adding that the central bank issues currency, but doesn’t control where the banknotes go. Roubini was the only one to agree with Wright, saying there what is often referred to as a “centralized system” isn’t actually centralized. The current global financial system currently has “thousands and thousands” of institutions and lots of means of payments, Roubini said, adding that there was a lot of competition in the market. However, despite his criticism of crypto and lack of belief in the problem of centralization, Roubini was adamant that he is not a “defender of the traditional financial system.” What he believes is that the system’s “many inefficiencies” should be solved with fintech, big data, artificial intelligence (AI), and internet-of-things (IoT), and not cryptocurrencies. The post Craig Wright and Nouriel Roubini agree that centralization isn’t a problem that needs solving appeared first on CryptoSlate.

Rare Joint Statement From U.S. Regulators Proves Crypto Centralization Is Here

The U.S. SEC, Fincen and CFTC issued a rare joint statement Friday addressing regulation of “activities involving digital assets.” Citing crypto’s perceived role in money laundering and terrorism, the regulatory power trio prescribed stricter adherence to anti-money laundering (AML) policies and know your customer (KYC) protocols. The statement is a highly visible product of the new crypto reality: for many, it’s no longer about Satoshi’s vision, but regulated, de-clawed digital assets for the obedient masses. Also Read: Telegram Awaits Court Hearing on SEC Case Against Its Token Sale Centralization of Decentralized Money For all the bluster about “Bitcoin revolution” that pervaded the cryptosphere not so long ago, permissionless money, along with calls for death to central banks, the once roaring lion of crypto opinion now seems to have been transformed into a skittish, whimpering kitten. Bitcoin maximalism has brought with it the unthinking zealotry common to religious fanaticism, and those who want to moon lambo as fast as possible are happy to hear about government adoption and approval even if it means sacrificing core utility. Let’s be clear, Bitcoin as a technology cannot be centralized if people don’t want it to be, but if they fail to use freely, it can indeed be neutralized as such. It’s not a silver bullet or standalone cure-all. Bitcoin requires human action. In their joint statement, the U.S. regulatory groups assert: The leaders of the U.S. Commodity Futures Trading Commission, the Financial Crimes Enforcement Network, and the U.S. Securities and Exchange Commission (the “Agencies”) today issued the following joint statement to remind persons engaged in activities involving digital assets of their anti-money laundering and countering the financing of terrorism (AML/CFT)obligations under the Bank Secrecy Act (BSA). In and of themselves, such prescriptions for adherence to regulation are nothing at all new. Taken with the cropping up of new international regulatory bodies, calls for globalized tax regulations, and increasing talk of the necessity of KYC/AML policy, however, and a new picture emerges. One of an already operational crypto surveillance state. The polar opposite of what Bitcoin was designed to create. The World Financial Dragnet Major financial and economic regulatory bodies are becoming less and less confined to their own respective nations. The Joint Chiefs of Global Tax Enforcement (J5) is a coalition formed in 2018 by the United States Internal Revenue Service (IRS) consisting of the IRS and related agencies from Australia, Canada, the Netherlands and the U.K. The coalition was created in part to help fight “the growing threat to tax administrations posed by cryptocurrencies and cybercrime and to make the most of data and technology.” The J5 maintains: [We are] are committed to combatting transnational tax crime through increased enforcement collaboration. We will work together to gather information, share intelligence, conduct operations and build the capacity of tax crime enforcement officials. The existence of the J5 also makes another recent story all the more pertinent — the Organisation for Economic Co-operation and Development’s (OECD) call for a unified taxation approach. As the OECD’s recent proposal maintains: “In a digital age, the allocation of taxing rights can no longer be exclusively circumscribed by reference to physical presence. The current rules dating back to the 1920s are no longer sufficient to ensure a fair allocation of taxing rights in an increasingly globalised world.” In other words, major corporations and their digital revenue may soon be taxed internationally, regardless of physical presence in a country. This could make practices like relocation to avoid harsh economic conditions or sanctions less efficacious or outright impossible. With the current state of rampant KYC/AML requirements for individual users of centralized exchanges, one wonders how long it will be until individuals are taxed similarly on their own digital assets via similar “guidelines.” The proposal states openly: Once it is determined that a country has a right to tax profits of a non-resident enterprise, the next question is how much profit the rules allocate to that jurisdiction. A Decentralized Pushback Not everyone in the crypto space is standing in wide-eyed wonder at Bitcoin’s supposed acceptance from the “big boys” of Washington and Wall Street via vapid talk about the importance of blockchain and sensible regulation. Bitcoin was explicitly created to be a P2P cash system that was open to everyone. Cropping up in the face of the growing global dragnet are peaceful, permissionless solutions such as decentralized exchanges, peer-to-peer trading platforms, and privacy protocols. What first gave Bitcoin its value and meteoric rise to success was its decentralized, permissionless financial power. Heading right back to the same dying, unethical system cryptocurrency advocates were seeking to escape in the first place, and begging for its acceptance, is ultimately a dead end. Contrast this with the powerful adoption of crypto now happening worldwide in spite of obstacles, and there’s no need to “fight” the powers that be, per se. With enough people simply using crypto as cash peacefully, regardless of politicians’ scribbles, the old castle is set to fall under its own weight once a critical mass is achieved. Now that’s something Satoshi, surely, could be proud of. Op-ed disclaimer: This is an Op-ed article. The opinions expressed in this article are the author’s own. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the Op-ed article. Readers should do their own due diligence before taking any actions related to the content. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any information in this Op-ed article. Images courtesy of Shutterstock. Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The Local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here. The post Rare Joint Statement From U.S. Regulators Proves Crypto Centralization Is Here appeared first on Bitcoin News.
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You can’t fix 51% attacks on Bitcoin without adding centralization, argues core developer

The ability to 51% attack Bitcoin indicates that it’s decentralized. It’s impossible to fix this vulnerability without adding centralization, argued Litecoin founder Charlie Lee and Bitcoin Core developer Gregory Maxwell. Characteristic of decentralization Decentralization is one of the most important attributes of blockchain technology according to some of the most prolific figures in the industry. Yet, critics have scrutinized Bitcoin and other proof-of-work projects for their susceptibility to 51% attacks. However, the opportunity for 51% attacks could be a fundamental characteristic of a decentralized public blockchain. “One cannot fix the 51% attack flaw of a decentralized system without adding centralization,” tweeted Litecoin creator Charlie Lee. “This is one of the keys to understanding Bitcoin, proof of work, and decentralization. Most people fail to grasp this.” Solving the double-spend problem Fundamentally, Bitcoin solves the double-spend problem—the issues around guaranteeing that digital money isn’t spent twice. With tangible cash this problem is trivial. A paper bill can’t be in two places at once. But, when money is represented digitally, what prevents people from ‘counterfeiting’ bills? Duplicating electronic data is trivial and difficult to police, as demonstrated by the proliferation of online piracy. Historically, electronic cash was overseen by trusted third-parties. Money held in a PayPal account is an example of digital cash managed by a corporation while the electronic balance held by a bank is a government example. “Centralized systems like Ripple, EOS, IOTA, Blockstream Liquid, etc. just have a single party use its idea of whatever came first and everyone else just has to accept its decision,” asserted Maxwell. But, in a decentralized system, who is the arbiter? First come first serve Bitcoin solves the double-spend problem by saying the first transaction to spend a coin is the valid transaction. Any subsequent attempts to spend that same coin are considered invalid. This might seem obvious but it’s a much trickier problem than it seems. Gregory Maxwell, the former CTO of Blockstream and a longstanding Bitcoin Core developer, explains why. “In a truly decentralized system ‘first’ is actually logically meaningless! As an inescapable result of relativity the order which different parties will perceive events depends on their relative positions, no matter how good or fast your communication system is.” In other words, which transaction is considered ‘first’ depends on who is asked. If two transactions to spend the same Bitcoin happened at the same time, how would the network decide which is first and which is second? Mining as a public election Bitcoin solved this problem through voting. But, there’s a catch. Most permissionless systems have it so their users can remain anonymous. Thus, it’s impossible to just ask ‘people’ to vote—that would require a centralized party to verify the identities of those people and determine who’s eligible to vote. Instead, Bitcoin tallies votes through computing power, which doesn’t require the help of a centralized party. Similarly, it’s possible to use another resource like coins (proof-of-stake) to count votes. Rigging elections Continuing with Gregory Maxwell’s election analogy, when people refer to a 51% attack they mean the potential to ‘rig’ elections to change Bitcoin’s transaction history. Even though it’s possible to make 51% attacks costlier or more inconvenient, it’s impossible to eliminate that possibility without introducing centralization, argues Maxwell. “People have cooked up 1001 complicated schemes that claim to do it without introducing centralization, but careful analysis finds again and again that these fixes centralize the system but just hide the centralization,” says Maxwell about cryptocurrencies that claim to solve the 51% attack issue. Delegating responsibility to masternodes, block producers, or superdelegates merely moves the potential for 51% attack to a smaller group of decision makers. Moving to proof-of-stake simply changes the underlying votes from computing power to coins. That isn’t to say these other projects are slower or less reliable than Bitcoin, they’re merely more centralized based on Maxwell’s theory. Protecting decentralization Maxwell makes an interesting final point. Critics seem to obsess over the risk of a 51% attack. But, the easy solution to that risk is to increase the number of block confirmations before considering a transaction final. A transaction on the Bitcoin blockchain gets exponentially more difficult to compromise the more blocks are mined on top of it. Thus, it’s still possible to transact even if a 51% attack is occurring by increasing the number of confirmations. “A far bigger risk to Bitcoin is that the public using it won’t understand, won’t care, and won’t protect the decentralization properties that make it valuable over centralized alternatives in the first place; a risk we can see playing out constantly in the billion dollar market caps of totally centralized systems,” concluded Maxwell. The post You can’t fix 51% attacks on Bitcoin without adding centralization, argues core developer appeared first on CryptoSlate.

NEO’s strategy of ‘pragmatic’ centralization

One of NEO’s competitive advantages over Bitcoin and Ethereum is its ‘pragmatic’ approach toward centralization, argues founder Da Hongfei. Leveraging centralization One of NEO’s main criticisms is its centralization, both politically and architecturally. Right now, the NEO Foundation and its related organizations—for-profit NEO Global Capital and non-profit NEO Global Development—hold enormous power. Moreover, final decision-making is largely up to co-founders Da Hongfei and Erik Zhang, and executive John deVadoss. Since inception, NEO has leaned into centralization. As said in the whitepaper, founding members and their team are “responsible for strategic decision-making, technical decision-making, and specific implementations. In other words, they have control. This is deliberate. From the beginning NEO has planned to start as a centralized protocol and decentralize over time. In an interview with CryptoSlate, Da Hongfei said: “To mitigate those centralized disadvantages with NEO, we have a very clear plan to shift from the current more centralized to a more decentralized model in the future. It will be beneficial to keep relatively more centralized for efficiency. NEO is not the first blockchain project in the world. We’re still catching up with leading projects.” The leading projects Hongfei is referring to? The two leading cryptocurrencies by market capitalization: “If we work the same way as Bitcoin or Ethereum we will be less efficient compared to today’s development. We have seen some leading projects already stall in terms of their technological advancement.” A different pace of development And he isn’t wrong. The rate of Bitcoin development is painfully slow. Soft fork upgrades like SegWit, which increases the number of transactions the Bitcoin network can handle, only recently achieved 50 percent uptake. This is for a popular initiative activated in August 2017. Although the pace of Ethereum development is comparatively faster, the speed is still glacial compared to the conventional software world. Though, these timeframes are expected given the necessary level of coordination and the economic stakes involved. As a result, critical upgrades like ETH 2.0 have been on the horizon for over two years. This poses a risk to Ethereum as other blockchains gain momentum. In contrast, NEO’s greater level of centralization has allowed it to implement major blockchain upgrades relatively quickly. The control the founders have over funding, development, and the network’s layout is an advantage, and a risk. Funding the NEO ecosystem The NEO Foundation has control of an impressive treasury. In the latest unaudited financial statements the organization reported assets totaling $871 million in June 2019. The bulk of these assets are in NEO tokens. NEO-related entities own a total of 43.7 million NEO tokens, worth $756 million at an assessed value of $17.3 per token. To date, the NEO Foundation has spent 5.85 million NEO to fund development, stimulate its ecosystem, and invest in other blockchain projects. These expenditures are worth roughly $100 million today at the price NEO Foundation assessed for its tokens. In current assets, the organization has $78.6 million in cryptocurrencies and fiat. In long term assets the organization owns investment and startup equity worth $46.7 million. As the single-largest token holder, NEO Foundation and its related entities have a lot of assets at its disposal. For reference, the Ethereum Foundation controls a treasury worth $130 million in Ether in addition to its cash assets on hand. Comparison to a massive corporation To better conceptualize these huge sums here’s an S&P 500 corporation for comparison. TripAdvisor was arbitrarily selected as one of the smallest corporations on the list with a market capitalization of $5.3 billion. The corporation had $901 million in cash and cash equivalents, and a total of $1.27 billion in current assets at its disposal according to its latest quarterly balance sheet—amounts comparable to NEO’s treasury. The assets NEO has at its disposal could accelerate the development of the project and help Da Hongfei and his partners build a robust ecosystem. But, token-holders run the risk of dilution (getting dumped on) if price growth is outstripped by increases in supply. As such, it’s critical investors and stakeholders hold the Foundation accountable for its spending. Development around NEO Another part of the organization’s strategy is funding core protocol and tooling development around the NEO blockchain platform. The NEO Foundation once had a relatively small group of globally distributed engineers. But, midway last year the project decided to hire dedicated engineers, marketers, and business developers, Da Hongfei told CryptoSlate. These employees complement the existing open-source community, he said. At the beginning of 2019, NEO set up a Seattle-based development operation, NGD Seattle, to expand the project’s access to talent. Microsoft veteran John deVadoss was brought-on to head the initiative. NGD Seattle currently has four lead developers based out of Seattle with three to four other remote developers/designers working under each of them, deVadoss told CryptoSlate. To date, 59 percent of NEO’s expenditures have gone toward core developer salaries for expanding the capabilities of the protocol. This makes sense, given NEO’s desire to become the “most developer-friendly blockchain.” The three major capability expansions NEO is working on include NeoFS, native file sharing—NeoID, native identity—and built-in oracles. Furthermore, NEO has continued its singular focus on developer tools. Everything from preconfigured toolkits, frameworks, libraries, debuggers, chain explorers, and detailed guidance to simplify and accelerate smart contract development. Although there is some open-source protocol development happening on protocol, that work is minor compared to the development funded directly or indirectly by the NEO Foundation. Control over the network At the moment, NEO MainNet still seven consensus nodes. Two of these nodes are operated by approved third-parties and the other five are operated by the NEO Foundation directly. The NEO Foundation reviews all proposals and selects candidates based on their “qualifications and potential contributions to the NEO ecosystem.” Successful applicants will then be voted in as a consensus node on the NEO TestNet. Given the Foundation’s ownership of 43.7 percent of the token supply elections on the TestNet are not usually contested. Given these criteria, participating in consensus on the NEO blockchain is permissioned. Though, the NEO Foundation does claim it will further “decentralize” its network. But, the Foundation will also be highly-involved in selecting which third-parties are trustworthy to run these nodes, again raising decentralization questions. Questions raised: NEO as an investment Given NEO’s dominant position in its ecosystem, investors and stakeholders are essentially trusting that the NEO Foundation will continue to act in good faith and stewardship. Unlike an equity stake in a company, tokens confer limited rights to investors in the decisions and cash flows related to a project. Token-holders are practically at the mercy of the issuers. Blockchain companies will claim that their interests are aligned with those of investors: ‘a higher token price means their holdings are worth more, too!’ This isn’t the whole picture, though. Most blockchain projects own the majority of tokens. These tokens are illiquid, and if sold in large quantities would cause the price to plummet. Given these circumstances, for example, if the NEO Foundation could sell its entire treasury while modestly pushing down NEO’s price, then that would be a success for the company but a loss for investors. In general, altcoin investors run the risk that issuers will squander or mismanage their tokens. Examples are abundant. Out of the five biggest ICOs by funds raised, three totally mismanaged the money they raised: TaTaTu, Dragon, and HDAC raised a total of $1.15 billion. All three wasted these investments on ill-conceived plans, like the floating Dragon casino in Macau. On average, investors lost over 90 percent of their investment on these projects. That said, Da Hongfei has made verbal commitments to token-holders that they will manage their funds judiciously. “The principle for the NEO Foundation is to spend its tokens. For every one token we spend it needs to have a higher return value than one token. It has to add value to the community, to the project.” Right now, four people control the majority of the funds distributed by NEO affiliate entities: Da Hongfei, Erik Zhang, John deVadoss, and director of ecosystem growth John Wang. That gives these people tremendous power. Considering these factors, should investors trust that the NEO Foundation will keep making good decisions? Question raised: token distribution Another major question centers around the distribution of the NEO token. NEO plans to make its token the base-unit for decision making on its blockchain. As such, it’s important that the token is distributed in a way that’s equitable, fair, and transparent to allow healthy governance to develop. Early on, proof-of-work protocols like Bitcoin, Ethereum, and Litecoin solved this issue through (relatively) decentralized mining. Early on, access to equipment was spread uniformly and margins were large enough that anyone could participate profitably. By tying a real-world cost—electricity and hardware depreciation—to token acquisition it gave tokens a baseline value and acted as a fair and permisionessless way to distribute tokens to interested participants. Right now, the NEO Foundation has control over how a near-majority of tokens are distributed. Obviously, loyalists and supporters will be the first ones to get funding, presenting risks of corruption and rent-seeking if left unchecked. How does the NEO Foundation intend to distribute tokens in ways that are fair and benefit the longevity of the protocol? Question raised: censorship resistance Centralization of the NEO blockchain raises serious questions around censorship resilience. Charlie Lee has expressed that censorship resistance is one of the primary advantages of decentralization. An attacker would find it difficult to undermine a project like Bitcoin or Litecoin because risk is distributed among thousands of stakeholders. One of the earliest successes Lee described for Bitcoin was its ability to circumvent U.S. online gambling restrictions because it has no single point of control In contrast, if the Communist Party of China put pressure on Da Hongfei to stop gambling on the NEO platform would he have to capitulate? Whether NEO could survive external pressure on its executives or nodes is still uncertain. This may seem like an outlandish scenario. But, the biggest advantage of decentralized blockchains are their ability to circumvent arbitrary regulations. “Permissionless innovation is extremely important. Satoshi Nakamoto could have never thought about how he impacted today’s blockchain ecosystem,” said Da Hongfei. How he fostered and ignited the revolution, the movement, and built something that is permissionless, open-sourced… I do think permissionless innovation will be the key that will advance the blockchain industry.” But, so far NEO seems squarely permissioned. If NEO isn’t sufficiently decentralized to resist censorship then what makes it competitive relative to incumbents? High performance is easily achievable on centralized systems, so for NEO to remain competitive it needs to continue making strides toward decentralization. And it plans to make these strides. NEO’s decentralization efforts are scheduled to pick up after NEO3 is launched, tentatively scheduled for Q2 2020. A strategy of centralization In two separate interview with CryptoSlate, Da Hongfei has iterated that centralization is a key part of NEO’s strategy. Unlike protocols like Bitcoin and Ethereum, which are encumbered by unwieldy governance and a painfully slow pace of development, NEO can remain nimble and use this advantage to “catch up.” “Bitcoin has its merits: decentralized, censorship resistant. NEO is quite different from Bitcoin. We’re not trying to invent a new asset class,” said Da Hongfei in a September interview. “NEO is not a digital peer-to-peer cash system. NEO is an open network for digital assets. To achieve that goal, we need to have different consensus mechanisms and a different technological design.” … “I also think variety is a good thing. We already have Bitcoin, Ethereum, their approach of governance, we should allow different governance model and see who will win out.” But, when asked on the specifics on NEO’s plans to decentralize, Da Hongfei didn’t have a concrete answer. Right now, NEO is making steps toward delegating more of its nodes to screened organizations and spending more of its treasury, saying such expenditures “diminish” its influence over the voting process (since they hold fewer tokens). As Da Hongfei has said repeatedly, decentralization on NEO will be a slow process: “We have already explained to the NEO community that it will take far more than a few months or weeks to completely realize decentralization, actually it will take several years.” But, when asked what his plans for decentralization were five years from now, he responded: “I think it will be very difficult to think five years into the future. We don’t have a specific plan. I know that [decentralization] is what will happen, and I’m completely okay with that.” But, mirroring concerns from U.S. Congress, if Libra defers its plan for decentralization until five years into the future, what is to say they will actually give up power? And, given the stakes for what NEO is trying to accomplish, the same question holds true. Now it’s time to see whether NEO will refocus its efforts on decentralization following the launch of NEO3. Credit to Dylan Grabowksi, editor at NEO News Today, for feedback and counterarguments. The post NEO’s strategy of ‘pragmatic’ centralization appeared first on CryptoSlate.
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CFTC Chairman: commodity can become security and vice versa

Commodity Futures Trading Commission (CFTC) chairman Heath Tarbet confirmed that a security can turn into a commodity and vice versa.  Tarbet made this remark on Monday at DC Fintech Week, when asked about a comment he made earlier this month that ether is not a commodity. At the conference, Tarbet emphasized that the Securities and Exchange Commission (SEC) is the entity that determines when something is a security, while the definition of commodities, which fall under the CFTC's jurisdiction, is broader.   Meanwhile, the SEC has dealt out a string of crackdowns on initial coin offerings (ICOs) of tokens that it deems as securities.   Earlier this month, the regulator filed an emergency action against Telegram and TON Issuer for failing to register the sale of their Gram tokens, which the SEC regarded as securities. This filing follows a settlement between the SEC and Block.one, the firm behind the EOS blockchain, for conducting an unregistered ICO. 
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Bitcoin Mining Moves to Texas, Bitmain Announces Partner for Massive New Facility

The Bitcoin mining giant Bitmain has just announced that it will work with a Canadian startup to help create a facility with potentially 300MW of power in Texas. DMG Blockchain Solutions Inc. will be providing the Chinese firm with project management services. The news comes less than a week after a different startup announced its intentions to also bring Bitcoin mining to Texas. Layer 1 aims to create an all-in-house mining facility and has received funding of $50 million to help it achieve this. Another Massive Mining Operation for Texas According to a press release, Bitmain has partnered with a Canadian startup to help it create a massive mining facility in Texas. The Chinese hardware manufacturer will be working with DMG Blockchain Solutions Inc. – a self-described “diversified blockchain and technology company.” DMG states that it was chosen following an extensive selection process. Bitmain initially started construction of a 25MW mining farm on a 33,000 acre site in Rockdale, Texas, last year. The firm has now announced that it will be at least doubling its size with the help of DMG. The site will be powered with electricity sourced from the Electric Reliability Council of Texas (ERCOT). The CEO of DMG, Dan Reitzik, stated the following of the deal between the two companies: “Being chosen by the world’s leading bitcoin mining company is a great testament to the capabilities of DMG’s mining team. Over the past several months, Bitmain visited many large facilities throughout North America including DMG’s flagship facility in British Columbia, Canada.” The release says that there is currently 50MW of power available for the planned Texas site. There is also the potential to increase this to 300MW. This would make it one of the largest Bitcoin mining facilities on the planet. DMG says that it will be handling management of the new facility but will not be adding to the funding of the project. Sheldon Bennett, COO of DMG, commented on the firm’s suitability for its new management position: “Having led large projects in Alberta and recently completing DMG’s 60MW facility, this 300MW facility is an exciting opportunity for DMG to truly demonstrate economies of scale. While the task of managing what we believe will be the world’s largest bitcoin data centre is daunting, we are confident that together with Bitmain, we will complete on time and on budget.” Don’t Bitcoin Miners Like the Cold? The news follows the recent announcement by another Bitcoin-focused startup. Layer 1, launched in 2018, originally positioned itself as an “activist fund for cryptocurrencies.” However, last week the firm announced that it had just completed a $50 million funding round. Amongst those backing the venture is US entrepreneur Peter Thiel. Layer 1’s plan is to perform almost all tasks relevant to the operation of a Bitcoin mining facility itself. This not only means manufacturing the chips but also creating a power substation and developing advanced cooling methods to deal with the intense Texas heat. Typically, Bitcoin miners have preferred cooler climates for their operations. This allows them to save money on systems systems needed to cool hundreds if not thousands of powerful computer systems working day and night in the same space. Bitmain’s Rockdale Lead Project Manager, Clinton Brown, explained why firms were starting to turn to Texas for Bitcoin mining: “We are excited to launch this facility, which is significant to Bitmain’s global expansion plans. The stable and efficient energy resources in Texas are fundamental to the inevitable scale of growth for the cryptocurrency mining industry.”   Related Reading: Russian Scientists Fined for Mining Bitcoin on Hijacked Supercomputer Featured Image from Shutterstock. Bitcoin Mining Moves to Texas, Bitmain Announces Partner for Massive New Facility was last modified: October 21st, 2019 by Rick D.The post Bitcoin Mining Moves to Texas, Bitmain Announces Partner for Massive New Facility appeared first on NewsBTC.

Bitmain’s Jihan Wu Talks Mining and Industry Growth With Bitcoin.com’s CEO

At the World Digital Mining Summit in Frankfurt, Germany, Bitcoin.com’s CEO Stefan Rust sat down with Jihan Wu, cofounder of Bitmain Technologies and Matrixport. The two discussed how cryptocurrencies being used for payments is spreading and how Bitmain is doing after the bear market last year. Also read: SEC Wants Second Look at Bitwise Bitcoin ETF Proposal A Virtual Economy at Work Approaching Critical Mass The World Digital Mining Summit (WDMS) is a two-day mining conference that hosts an assembly of industry leaders, mining rig manufacturers, cryptocurrency pool operators, and other individuals passionate about crypto. During the event, Bitcoin.com’s CEO, Stefan Rust, had the privilege of sitting down with Bitmain cofounder Jihan Wu and discussed a wide variety of subjects. At first, Wu explained how he got into Bitcoin and that while working for an investment firm, he happened to read something about Bitcoin and found it “really interesting at that time.” After looking into it for two days straight he decided that bitcoin was a good idea. Wu was actually the first person to translate Satoshi’s Bitcoin white paper into Chinese for residents living in the region. “I was the first one to translate the [white paper]. At that time in the Chinese media said Bitcoin was either a scam or it does not work,” Wu explained to Rust. “I happened to understand economics and some high-level principles of computer science so I knew [Bitcoin] works in both economic ways and in computer science ways. So I translated the white paper and tried to get more positive feedback from Chinese social media.” While recalling his old QT wallet, Wu emphasized that it’s been an amazing journey. “I still remember back then no one knew about bitcoin and right now there are 20 million or 40 million users around the world and almost everyone now more or less have heard about bitcoin — I believe there are actual users getting involved in the cryptocurrency economy and those [individuals] are really starting to use cryptocurrencies for payments. A way to store their cash account — I believe this kind of user base will increase more and more.” Wu continued: This is a virtual economy at work and it’s quite difficult in the beginning but I think we are almost near critical mass. The Bitmain cofounder remarked that he believes the 40 million crypto users globally had initially stemmed from investor types, but nowadays he sees more ordinary people joining the economy and “especially young people.” “[Individuals] are really pushing cryptocurrency into the local payment network and people start to use it,” Wu said. Rust also brought up spending bitcoin cash (BCH) in Slovenia where there are hundreds of merchants that accept digital assets for products and services. “Lots of people still today believe [Bitcoin] is undoable or it’s out of their imagination how cryptocurrency can be really adopted by real life use cases,” Wu replied. “I think it’s a miracle, I think it’s amazing and lots of miracles are happening nowadays.” Bitmain Continues to Produce Next Generation Mining Rigs and Chips After discussing cryptocurrency adoption, Wu also explained how Bitmain was doing this year. “After the bottom of the bearish trend last year we’ve seen a very fast recovery in the money industry and we can see the hashrate growing very fast. Bitmain’s sales volume increased a lot and we released a new generation of mining rigs and mining chips.” Wu detailed that the company also released new artificial intelligence (AI) chips. He further explained that Bitmain’s mining pools mined different cryptocurrencies and remain top-ranking mining pools. Wu stressed: It’s a good year for Bitmain. Additionally, Rust and Wu talked about regulations in China and how roughly 60% of the world’s hashpower is located in the country. The two executives discussed the possibility of China banning bitcoin mining and how the Chinese government is dealing with oversight. The Bitmain cofounder and Bitcoin.com CEO conversed about a slew of other subjects like the ecological impact of bitcoin mining, the reward halving, and a lot more insights from someone who’s seen the cryptocurrency mining industry grow immensely, first hand. If you want to check out our exclusive interview with Bitmain’s Jihan Wu, check out the video below. What do you think about Jihan Wu’s perspective of the mining industry and cryptocurrency ecosystem? Let us know what you think about the interview in the comments section below. Image credits: Bitcoin.com. Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here. The post Bitmain’s Jihan Wu Talks Mining and Industry Growth With Bitcoin.com’s CEO appeared first on Bitcoin News.
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BANK OF AMERICA: Companies are crushing earnings season so far — but the firms missing forecasts are being punished more than usual (BAC)

Third-quarter earnings season is a couple weeks underway, and Bank of America Merrill Lynch analysts found that companies that missed sales and profit expectations are getting hit more than usual in next-day trading. The companies that fell short of expectations for revenue and earnings underperformed the S&P 500 by 3.9 percentage points, the analysts found, compared to the 2.4 percentage point historical average. The worse-than-usual performance by such companies suggests investors may not be confident enough in long-term outlooks to forgive third-quarter performance, Bank of America said. Visit the Business Insider homepage for more stories. Third-quarter earnings season is underway, and the performance of 75 S&P 500 companies to already report brings fresh insight into investors' economic outlook. Of the companies to report, 43% have beaten analyst expectations for both revenue and earnings, according to Bank of America Merrill Lynch analysts. The figure lands slightly above the second-quarter average of 41% and the year-ago average of 40%. Yet the companies that missed analyst estimates in both categories were clobbered more than usual in public trading, underperforming the S&P 500 by 3.9 percentage points in next-day trading, the analysts found. Historically, companies underperform the index by 2.4 percentage points when they miss sales and earnings estimates. Read more: Goldman Sachs says these 5 trades can help investors make a killing during a crucial earnings season The companies beating both estimates outperformed the index by 1.6 percentage points, falling in line with the historical average. The worse-than-usual punishment could reflect a lack of long-term confidence among traders, with third-quarter misses signaling a prolonged downturn. The analysts also found mentions of words like "better" or "stronger" against "weaker" or "worse" hitting the lowest gap since 2009, which could be a result of continued trade tensions and souring global economic outlook. Earnings of the 75 companies to report were 2% above consensus estimates, with healthcare and consumer discretionary companies delivering strong beats. Banks performed in line with estimates despite macroeconomic indicators warning otherwise and recent Fed rate cuts squeezing profit margins. The current trends are subject to change, especially with 36% of S&P firms slated to report their third-quarter earnings in the week starting Monday. Mega-cap stocks like Microsoft and Amazon will announce their latest figures, and more than half of communication services and energy companies will report as well. Now read more markets coverage from Markets Insider and Business Insider: Wall Street is sounding the alarm as a key source of stock-market buying evaporates The Fed's $60 billion monthly cash injections aren't enough to solve recent money-market stresses, JPMorgan says Billionaire Howard Marks gives his best advice for navigating an anomalous market where 30% of the world's debt has a negative yieldJoin the conversation about this story » NOW WATCH: A 45-year-long study discovered trends in successful hyper-intelligent children
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