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Andreas Antonopoulos: Blockchain Tech Cannot Be Uninvented or Stopped

Antonopoulos believes that the current volatility is an inevitable fact arising from the crypto market’s limited liquidity.

Andreas Antonopoulos is a well-known bitcoin (BTC) educator and crypto commentator, as well as a security and decentralized systems expert. His 2014 book, Mastering Bitcoin, gave an in-depth technical analysis of the top cryptocurrency and a solid foundation of the crypto revolution’s beginnings.

In a recent interview, Cointelegraph spoke with Antonopoulos on what he believes is the future of blockchain’s social impact, what’s going on with the current crypto market volatility, and what is still missing in the crypto space.

This interview has been edited and condensed.

Crypto market volatility: a problem or an inevitable fact?

Molly Jane Zuckerman: In your opinion, is the recent volatility in the crypto markets a positive development for overall crypto adoption?

Andreas Antonopoulos: Volatility is an inevitable fact that arises from the small size and limited liquidity of crypto markets at the moment. When it’s downward volatility, it creates panicked sentiment and losses. When it’s upward volatility, it creates a wave of fear-of-missing-out (FOMO) investors with very little understanding of the technology fundamentals or principles.

Fortunately, some of those investors stay through the cycle and try to learn more about the technology, building a more solid foundation of users for the next cycle.

This cyclical boom-bust pattern is part of the behavior of this technology and has now repeated more than 8 times in the last 10 years. It is dangerous for inexperienced investors, but it also provides the funding needed to develop each stage of infrastructure and technology. Caveat emptor!

MZ: What are concrete developments that you feel the Bitcoin blockchain needs in order to be more widely adopted?

AA: As new technology is developed at the protocol layer, it does not get adopted until it can be presented in a clear, unambiguous, secure and easy-to-use way as a user interface and user experience. This happens at the product/application design layer and it is where the greatest development is needed. The open blockchain space in general needs more design and creative people, not more software engineers.

Blockchain’s adoption and social impact

MZ: What, in your opinion, went wrong and what went well in the blockchain and crypto industry in the last year? Do you think we are closer to blockchain adoption now than we were a year ago?

AA: In bitcoin, the scaling debate has quieted down, as “forks” have given everyone a choice to pursue any scaling strategy they want. Unfortunately, this has created some confusion as more than one “fork” attempt to use the same name. In the end, the choice is up to users and the name is not as important as the rules of consensus each user chooses to follow.

In other open blockchains, the scaling debates are just beginning, as they encounter the same growing pains as bitcoin did in the last 3 years. Every blockchain will face these issues, despite claims to the contrary. Scaling requires deliberate design tradeoffs, against decentralization and security.

Many open blockchains try to claim they have solved this trilemma but they’re either lying or are unaware of the tradeoffs they have made to gain scalability. In this space, maturity and growth bring new challenges in scaling and eventually governance. All blockchains will face those challenges once they become big enough to matter.

MZ: What is the social impact you personally expect from blockchain technology in the years to come?

AA: The primary impact I see is open and disintermediated platforms and protocols for finance and governance. These can be incredibly empowering, especially for people who have limited access to financial services.

The lack of financial inclusion is not a “bug” of the traditional financial system. It’s a direct result of the regulatory architecture and the intermediaries policies.

An increasingly global world needs neutral, open and borderless finance and governance systems. Open public blockchains will provide those, even against the extreme discomfort, opposition and interference of nation states and corporations. The world needs this too much and the technology itself cannot be un-invented or stopped.

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Bitcoin Will See Global Need After Future Applications Emerge, Says Andreas Antonopoulos

The future of cryptocurrency development will transform Bitcoin’s status in an unimaginable way, says the educator.

South Koreans will need Bitcoin (BTC) once its as-yet-unknown applications have been developed, Andreas Antonopoulos told the ongoing Deconomy conference in Seoul on April 4.

Speaking at the event attended by a Cointelegraph correspondent, the celebrated Bitcoin educator and entrepreneur forecast a fundamental shift in Bitcoin’s presence on the world stage.

The largest cryptocurrency will usurp the current fiat-based banking system, Antonopoulos said, but only after developing the next generation of use cases will the true global need for Bitcoin become obvious for the average consumer.

“What we’re doing today is trying to simulate the existing system with fewer intermediaries and centralization, so that we can rapidly exceed and start doing applications that are absolutely impossible with the current centralized financial system,” he summarized. Antonopoulos added:

“And then — and only then — Koreans will need cryptocurrency.”

Antonopoulos highlighted the fact that, in contrast to the utopian visions of the future, current cryptocurrency usage remains either a niche hobby or a product of desperation with the banks.

At present, only a tiny fraction of consumers use Bitcoin: this is logical, he says, given the overall difficulty of crypto and the technical knowledge required to store and transact with it successfully.

Cryptocurrencies and open blockchains “are only being adopted in the places where the pain of the current financial system is so extreme that people are forced to use something that is difficult to understand, difficult to secure, with very poorly designed applications and with very difficult wording,” he said.

Nonetheless, with advances ongoing, Bitcoin is at least set to overtake extant payment systems such as Visa and MasterCard, in his opinion.

“We are poised to achieve ten thousand times their capacity,” Antonopoulos added, echoing findings from a report into Bitcoin as the future of payments released earlier this week.

As Cointelegraph reported, scaling solutions for Bitcoin should help take it to the status of preeminent world payment system in as little as ten years, research from software company DataLight forecast.

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Andreas Antonopoulos: A Bitcoin ETF is a “Terrible Idea”

Andreas M. Antonopoulos, one of the most respected and active personalities within the Bitcoin ecosystem, shared his impressions this week regarding the consequences that an approval of a Bitcoin ETF could have for the crypto ecosystem.

In his popular video series “Bitcoin Q&A”, Antonopoulos referred to the matter as a hot topic that was constantly addressed in his Patreon session, which took place on July 28th 2018.

In Antonopoulos’ words, an ETF facilitates financial operations for investors, without having to manage a specific asset:

“The idea here is to take a reserve of bitcoins and then make them tradeable instruments that can be traded on traditional markets like stocks. This is a custodial reserve system, where the custodian holds the actual bitcoin and what you’re getting is a share in their fund — not bitcoin.

It allows traditional / institutional investors to dabble in the bitcoin price, speculate on bitcoin, without actually holding bitcoin or having to open an exchange account and deal with complex things like keys, addresses, hardware tokens, and all of those things”.

Andreas Antonopoulos

The idea of a Bitcoin ETF raises great expectations in the community because it has the potential to attract a massive exposure of this crypto to large capitals. Based on past experiences (such as the gold market) the approval of an ETF has caused an increase in prices and trading volumes.

However, Mr Antonopulos questions the level of convenience of a Bitcoin ETF for the ecosystem. In the video he says such a proposal can be counterproductive even though his ideas may “burst the bubble” of many Bitcoin ETF promoters:

” I’m going to burst your bubble.

I know a lot of people really want to see an ETF happen because “to the moon and lambos!” But I think it is a terrible idea. I still think it is going to happen, I just think it is a terrible idea.

I’m actually against ETFs.I think a Bitcoin ETF is going to be damaging to the ecosystem.”

For Antonpoulos, the ease that ETFs provide in traditional markets represents a damage to the ecosystem of Bitcoin and any cryptocurrency over which a fund of similar characteristics is approved:

“ETFs fundamentally violate the underlying principle of peer-to-peer money, where each user is not operating through a custodian, but has direct control of their money because they have direct control of their keys.

Your keys? Your bitcoin. Not your keys? Not your bitcoin.

An ETF is a multi-billionaire dollar “not your keys, not your bitcoin” vehicle.”

However, he remarked on his conviction that a Bitcoin ETF would eventually be approved as there are enough economic interests to push for such instruments. Currently there are still some applications on which the SEC must rule in 2018, however it is very likely that the decisions will be postponed to 2019.

The creation of major ETFs, while harmful to the ecosystem, does not represent the death of Bitcoin, but opens the door for large institutional investors to manipulate prices on a global scale. They also allow the custodian of the Bitcoins exchanged in the ETF to have excessive voting power on key blockchain decisions.

“It’s not going to be the end of Bitcoin, it’s just going to cause manipulation of the prices. It is going to cause manipulation of the debates about scaling decisions, and if there are forks it is going to give these parties a very large determining voice in forks.

Eventually you’re going to see them split off and form their own corporate version of Bitcoin”

The custodians, by voting “on behalf of” the users, could make the most beneficial decision for their own interests, as they are the real holders of Bitcoin. Those who trade via an ETF only have instruments that emulate real Bitcoins.

Full video available here:

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‘Soft’ Crypto ETF Alternative Now Geared Towards U.S. Investors, Says Bloomberg

A Bitcoin (BTC)-based exchange traded note (ETN) listed on the Nasdaq Stockholm exchange is now being targeted towards U.S. investors, Bloomberg reports Wednesday, August 15.

As many in the U.S. clamor to see a Bitcoin exchange-traded fund (ETF) approved by regulators, this so-called “soft” alternative has been trading on the Swedish exchange since 2015, but is now being quoted in dollars under the ticker CXBTF as of Wednesday.

The product, dubbed Bitcoin Tracker One, is still technically listed and traded in Sweden, but many consider this latest move to be a gateway for U.S. investors. As CoinShares Holdings CEO Ryan Radloff told Bloomberg:

“Everyone that’s investing in dollars can now get exposure to these products, whereas before, they were only available in euros or Swedish krona. Given the current climate on the regulatory front in the U.S., this is a big win for Bitcoin.”

As Bloomberg notes, trading Bitcoin Tracker One is now “similar to buying an American depositary receipt, in that traders will see a foreign-listed asset in U.S. dollars.” To enable this, investors reportedly purchase so-called F shares, meaning that the ETN trades are executed in dollars, but all settlement, clearing, and custody takes place in the Swedish market.

Unlike a exchange-traded fund, an ETN is a debt instrument that is backed by an issuer — like a bank — instead of being tied directly to an asset. Bloomberg notes that the ETN could appeal to investors as an alternative to Grayscale’s Bitcoin Investment Trust, another form of passive investment instrument that is currently available to those who don’t want to actually store and hold the cryptocurrency itself.

As Cointelegraph has reported, there has been significant attention devoted to the pending approval of several high-profile Bitcoin ETFs by U.S. regulators. If approved, opinions are divided as to their future impact on the crypto space. CNBC’s Ran NeuNer has ventured that once such bridges to the mainstream financial sector are in, 2017’s bull run for crypto will come to “look like a warm-up.”

Bitcoin stalwarts Andreas Antonopoulos and Nick Szabo, meanwhile, both aired ETF skepticism this week, with the latter arguing that “Wall Street-managed money… might cause more problems than it’s worth.”

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Bitcoin Holds Above $6,000 While Industry Figures Warn Over ETF ‘Benefits’

Bitcoin (BTC) prices are up around .05 percent on Thursday, August 16, bringing the leading cryptocurrency solidly back over $6,000 after a market fall that had seen BTC dip below that psychological price point on August 14.

Market visualization from Coin360

Market visualization from Coin360

Data from Cointelegraph’s price tracker shows overall 2.5 percent monthly gains for Bitcoin as of press time, despite the latest correction from it’s weekly high of around $6,600, against weekly losses of almost 10 percent.

Continuing its trend of short-term volatility, BTC/USD is currently around $6,407, with commentators eager to see if support at $6,000 has solidified.

Bitcoin’s 7-day price chart

Bitcoin’s 7-day price chart. Source: Source: Coinmarketcap

The price performance comes as the cryptocurrency industry becomes increasingly indifferent to the potential effect of a Bitcoin exchange-traded fund (ETF) acceptance or rejection by U.S. regulators.

Previously hailed as a factor which could propel or deflate markets significantly, Andreas Antonopoulos joined Nick Szabo in fresh skepticism of ETFs this week, the latter arguing they “might cause more problems than they’re worth.”

In a Q&A session recording, Antonopoulos described ETFs as “a multibillion dollar ‘not your keys, not your Bitcoin’ scheme.”

Beyond Bitcoin, altcoin worries continue, with Ethereum (ETH) gaining slightly Thursday but still continuing weekly losses close to 30 percent and monthly ones approaching 33 percent.

At press time, ETH/USD traded around $292, several percentage points off earlier lows this week which marked the largest altcoin’s biggest plunge since September 2017.

Ethereum’s 7-day price chart

Ethereum’s 7-day price chart. Source: Coinmarketcap

Other major altcoins posted broadly flat growth, with the exception of Stellar (XLM), which is down around 3 percent on the day, trading at around $0.22 by press time. Another altcoin outlier is Ethereum Classic (ETC), whose addition to Coinbase may have sent prices soaring by over 16 percent on the day, with the coin currently trading around $14.09 by press time.

Total market cap is around $207 billion by press time, a number last seen in November 2017.

Total market capitalization

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Cointelegraph’s ‘Top People in Blockchain’ Rating Released

Cointelegraph ranks the top players of cryptocurrency and Blockchain, presenting the people responsible for making our more than $400 bln industry into what it is today.

What are the criteria, you ask? Without taking any liberties, we simply calculated the number of mentions each of the participants received in the mainstream ratings, such as Forbes’ and Fortune’s.

The story of cryptocurrency and Blockchain has been one of innovators and pioneers. While there has been no shortage of starts and stops, the industry has grown from humble beginnings to a global phenomenon in less than a decade.

Last year saw remarkable growth in interest towards crypto, driving prices in the markets to record-setting highs. At one point Bitcoin has gone beyond $20,000, while other coins such as Ethereum also saw massive gains.

We owe it to dozens of innovators and advocates for helping the industry grow and turn into what it is today. Among them you’ll no doubt find familiar faces.

Bitcoin guru Andreas Antonopoulos has brought Bitcoin to the masses with his book ‘Mastering Bitcoin”. Roger Ver was one of the first investors in Blockchain and helped grow the industry as a prominent advocate.

Vitalik Buterin, while having only spent 7 years in the crypto industry, has contributed massively, helping create the second largest cryptocurrency Ethereum in 2014.

We’ve also included people in the media affecting how the world is seeing and talking about cryptocurrencies and Blockchain technology. These include such prominent advocates like Laura Shin and Perianne Boring.

See how we’ve ranked the top influencers that are shaping the future of money.

Aaron Wood

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Study: 22% of Bitcoin Investors Used Borrowed Money For Trading, Not Recommended

According to LendEDU, a personal loan research firm, more than 18 percent of Bitcoin investors have used borrowed money to trade the cryptocurrency. In a global survey of 672 active Bitcoin investors, researchers asked traders the method they used to fund their cryptocurrency trading accounts. The majority of investors used banking systems such as credit cards and ACH transfers to fund their accounts.

But 22 percent of traders revealed that they have not paid off their credit and debit cards after purchasing Bitcoin, effectively investing in the cryptocurrency with borrowed money. The report read:

“The wisest and most frugal way to fund a virtual currency exchange account would be through an ACH transfer, which is completely free of charge. Only 18.60 percent of our 672 Bitcoin-invested respondents were paying for the cryptocurrency in this fashion.

However, this was not even the most pressing concern coming from the LendEDU poll. That recognition belongs to this data-point: 22.13 percent of Bitcoin investors did not pay off their credit card balance after purchasing Bitcoin.”

Exaggerated generalization

Lately, Binance, the world’s largest cryptocurrency exchange, revealed that it has been adding more than 250,000 active users on a daily basis, and were forced to stop adding new users temporarily as a result. Coinbase and Bitstamp have also been adding more than 100,000 users per day and at the time of reporting, Coinbase has close to 20 mln users.

In early December, Bitstamp Co-founder and CEO Nejc Kodrič stated:

“Please understand that we currently have over 100,000 new accounts opened daily. It is challenging to cope with such surge. We are expanding our capacity to onboard clients faster, but this takes a bit of time.”

Hence, 618 Bitcoin users, is nowhere sufficient to create generalizations about the entire global Bitcoin and cryptocurrency market.

But, it is important to acknowledge that a small portion of Bitcoin investors are still trading the cryptocurrency with debt to this date, despite the advice of experts and analysts to refrain from doing so.

Only invest amount that can be lost

In June, Bitcoin and security expert Andreas Antonopoulos strongly emphasized that he only invests an amount in cryptocurrencies that he is willing to lose, given the significant risk involved in cryptocurrency trading. While the risk of investing in Bitcoin is lower than others given the size of its market, the risk for other cryptocurrencies in the global market still remains substantially high.

“I own a few different crypto assets as part of a small but diversified portfolio. I only risk as much as I’m willing to lose,” said Antonopoulos.

In a presentation at Coinscrum, an event hosted by the Imperial College London, Antonopoulos also noted that he can lose all of his investments in cryptocurrencies and still have everything else because he has invested his career, intellectual capacity, and work in Bitcoin and the cryptocurrency market.

For casual investors and newcomers, it is extremely risky to obtain debt to invest in a particular asset and this is not exclusive to Bitcoin. It does not matter which asset it is, becoming in debt to invest in a particular asset or asset class is highly risky.

“My small savings that I do have are invested in Bitcoin. 100 percent [of it]. I actually have a tiny debt in US dollars that I’m still trying to pay off, so it is more than 100 percent in Bitcoin. Now, I’d like to emphasize again, that is not a recommendation to invest. Because I haven’t invested my money in Bitcoin, I invested my career, my intellectual capacity, my creativity energy, my passion, and my work in Bitcoin. The money is the least of the investment that I have made in Bitcoin and I could lose everything of it and I’d still have everything else,” Antonopoulos explained.

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JPMorgan Guilty of Money Laundering, Tried To Hide Swiss Regulator Judgement

JPMorgan CEO Jamie Dimon is facing irony this week after calling Bitcoin a fraud – as the bank’s Swiss arm is sanctioned for fraud.

Reports from local media outlet Die Handelszeitung relate how the Swiss regulator Finma had ruled JPMorgan was guilty of money laundering in June.

A legal battle then ensued, with Dimon’s giant attempting to prevent the publication of Finma’s judgment.

This month, however, the law ruled against it, but details of the extent of the wrongdoing remain sketchy.

The news is especially amusing to Bitcoin proponents, who watched as Dimon’s accusations that the virtual currency was a “fraud” sent it into temporary freefall in September.

Commentators such as Andreas Antonopoulos were quick to jump on the gratifying reversal of fortune, the cryptocurrency expert telling the audience during a Q&A session this week that “Jamie doth protest too much methinks.”

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“It’s interesting how the head of the largest investment bank in the world finds time in his very busy day to speak about a ‘nothing;’ an irrelevant little technology that has no impact on the world,” he added. “It’s almost disconcerting that he would pay so much attention.”

Dimon had followed his outburst against Bitcoin several weeks later with an announcement he would “no longer talk about it,” while other senior figures at the bank said it was “open-minded” in its treatment of the technology.

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Andreas Antonopoulos: ICOs Are ‘Total Shit Right Now, Revolutionary In 15 Years’

ICOs will “ripple out like a tsunami” and disrupt the entire financial industry in 15 years, Andreas Antonopoulos has said. He also described “99.999 percent” of ICOs currently on the market as “shit.”

Speaking at the Advanced Digital Innovation Summit in Vancouver earlier this month, the celebrated educator said that the current climate of knee-jerk regulation was ultimately a “futile” attempt at controlling participation in the “revolutionary” new investment model.

“It is unstoppable, it is enormous and it is going to shake the world,” he said.

“…99.999 perent of ICOs right now are shit. They are complete junk; they will return nothing.”

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Antonopoulos made the comments Sept. 12 amid fresh revelations from China, which had just issued a blanket ban on ICOs and required completed sales to return funds to investors.

The knock-on effect saw South Korea also voice strong concerns about digital token offerings, while other international regulators reiterated the need for offerings to undergo vetting on a case-by-case basis.

Taking in the longer-term picture, however, Antonopoulos remained convinced the phenomenon was only getting started, and that regulators “do not have the means” either to keep up with it or enforce their requirements.

“The rules as they exist cannot possibly keep up with the volume, liquidity and movement of innovation in this space,” he said.

“… Regulators are being disrupted more than anything else; they are rapidly being ‘obsoleted.’ They have the desire, they have the authority; they do not have the means.”

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Why Millennials Keep Bitcoin for Rainy Days

Bitcoin has a huge appeal to millennials who dream of a cashless future, and now they’re putting savings into Bitcoin rather than traditional funds.

The digital currency has already turned early adopters into millionaires, been marketed by Ashton Kutcher and Paris Hilton, and stands for everything that millennials are jaded about in terms of traditional markets and investments.

Foundations of old finance shaken

While those who are using and involved in Bitcoin still make up less than a percent of the population, there’s a growing number of young people in the millennial generation who are turning away from traditional financial empires.

If this trend continues, it could spell the eventual end of the banker, as they go the same way as the travel agent and the library.

Roshaan Khan, a 20-year-old senior at Virginia Commonwealth University, is one of those millennials. Khan recently invested in Bitcoin and Ethereum — another form of cryptocurrency — and is encouraging his friends to do the same.

“All of my net worth is in cryptocurrencies, because I see them as the best way to escalate my ability to be financially secure and pay off my student loans,” Khan said. “I like the idea of decentralization, the fact that there’s a lot less corruption and political ties. That idea appeals to me … Not having to go through banks. Having financial control over our lives again.”

No bankers go to jail

Andreas M. Antonopoulos, the author of Mastering Bitcoin and The Internet of Money, is familiar with this mistrust. The idea of Internet money makes sense in today’s world and appeals to the new generation, but more than that, it is a system that has not betrayed millennials.

“When you talk to millennials who have been thoroughly disappointed by every single social institution — the government, the church, the politics, the parties — they can’t trust anyone anymore,” Antonopoulos said.

“They remember 2008, because it was the first big crash they’ve had, and many millennials have been unable to find work. They saw no bankers go to jail.”

In control of investments

There is still some way to go until even the most hardened millennial is totally free of traditional banking and money institutions, but they can control their own future in relation to investments.

“It feels better to run my own savings plan by investing and reinvesting in new technology,” said Emil Thorsplass, a 24-year-old musician from Norway:

“I still have my regular pension fund and my bills still have to be paid through a bank account, but cryptocurrency investments have become a central part of savings for me.”

Fear of volatility?

Thorsplass adds, in relation to a question that always crops up with regards to investing in Bitcoin, how he deals with the volatility.

“I don’t get very nervous about the volatility anymore,” Thorsplass, who’s made close to $5,000 since investing in 2015, said. “I think that when you are in your twenties, with limited responsibility, investing most of what you have into something isn’t that dramatic compared to what it might be for more established adults. I’m used to taking risks, so when I have a gut feeling I like to pull the trigger.”