Bitcoin Magazine is the world's first magazine dedicated to the cryptocurrency. Founded in 2011, Bitcoin Magazine is the oldest and most trusted source of news, insight, reviews, guides, and price analysis on bitcoin, ethereum, blockchain technology, cryptocurrencies, the darkweb, and other decentralized technologies.
American crypto wallet and custodial firm BitGo has teamed up with Genesis Global Trading, a digital asset trading firm, to improve the crypto trading experience for its institutional investors.
Investors who use BitGo's custody service can now trade their assets directly from their BitGo custody account, without the need to move the assets to an exchange.
“Institutional investors want to put their assets to work and they want security,” Mike Belshe, BitGo’s CEO, told Bitcoin Magazine. “Until now, they've had to make compromises on one front or the other, choosing to trade off security for speed of withdrawals from custody. Now, as a result of our partnership with Genesis, they have access to multiple trading venues without ever having to move their assets from the security of cold storage."
The partnership will allow BitGo’s institutional clients to access instant pricing for buy and sell orders. For example, if an investor holds 250 BTC in storage with BitGo, they can get real-time pricing for buy and sell orders, execute transactions from within their BitGo account and have it settled same day.
In a statement, Belshe said, “Our partnership with Genesis, a FINRA and SEC regulated company, gives our clients access to liquidity through Genesis’ robust network of trading partners. And that solves the real problem which is the need to access liquidity — not the need to speed up withdrawals.”
The South Dakota Division of Banking granted BitGo a charter in September 2018 — an approval that allowed the startup to act as a qualified custodian of cryptocurrencies in the state.
Genesis, the subsidiary of blockchain venture capital firm Digital Currency Group, offers over-the-counter trading to its investors and it became the first New York-based firm to receive a BitLicense.
Genesis Global Trading recently revealed that the company saw a 50 percent increase in its OTC trading volumes for 2018, which shows that the company was not shaken by the effects of the bear market that started last year.
When the bubble pops, people don’t realize it at first. When the bubble pops, it’s always just another volatile day. “It’s just a correction. A road bump on the way up. Buy the dip! It’ll bounce back, just you wait.”
Until it doesn’t and it becomes painfully apparent that the bull run is over and it’s a long — a very long — way down. And not just for the red candle addled price, but for the network, its transaction counts, and general interest as well.
No one likes the bear. But here’s some solace: It acts pretty predictably. Network data and activity follow the price, things bottom out, the ecosystem re-achieves an equilibrium and then it makes another run — rinse and repeat. It’s happened several times before.
Here’s an infographic we made to illustrate what the numbers looked like when three big bitcoin bubbles popped.
This is the second instalment of reporter Colin Harper's "Living on Bitcoin" experience in San Francisco. Find out what happened to him on Day 1here.
I woke up on Christian’s couch stiff-necked and cotton-mouthed. A bit more fitting for the “living on internet money” survival vibe, yeah?
A friend of a friend of Christian’s roommates (who are starting a business and moving to LA today) was out cold on an air mattress next to a stripped Christmas tree, snoring into the streams of soon-after-sunrise light filtering through the window. Another blow-up mattress adjacent to the couch was vacant. Its former occupant, Julian Martinez, a copywriter at Quantstamp and Christian’s friend, had left early in the morning, politely folding his sheets before he left.
I trundled into the kitchen in search of coffee. Christian and his housemates grind their coffee and use a french press, which seemed rightly authentic for San Francisco. The Philz whole coffee beans were stashed in a cupboard along with some almond flour (also on point), spices and other ostensibly hipster culinary staples.
Christian came in and we prepped the press. Sitting down for a cup in the dining area, the view from his apartment window seat offered up a gorgeous morning landscape of the residential area with the bay at its back.
As he and his girlfriend left to pick up breakfast, I was confronted with the task of condensing the whole of yesterday’s events. In the flurry the day had become, I recorded the experience in scatterings between my phone, laptop and journal, typing or jotting whenever I had the time or inspiration struck. The words were distributed. It was just a matter of pulling them together and making them fit.
So most of Saturday was spent reconciling how to pare down the experience (2,900 words later, I didn’t do a very good job). Christian and his girlfriend brought me back a croque madame from a local bakery and the San Franciscan sourdough lived up to its reputation. I wouldn’t wrap up the first draft until probably 6:00 p.m. that night.
Of course, there were interruptions (like eating) that involved my careful attention and purchase planning. I still hadn’t done a point-of-sale (PoS) with bitcoin, and I thought I would have the opportunity at lunch with Curry Up Now.
The once-foodtruck, now-local chain has become a sensation with its uncanny Indian-Mex and world food fusion fare. Chicken tikka masala burritos, deconstructed samosas and aloo gobi tacos coexist with Indian street food, pub food with a curried twist and even fried ravioli with masala dip.
At one point in time, they accepted bitcoin, and most resources (like coinmap.org) indicated as much. But when I called to confirm, a hurried employee shot down my hopes.
“No, I’m sorry we don’t,” she said, a bit short and stressed, with the commotion of a popular restaurant audible in the background.
Hanging up, I hoped it wasn’t an omen for the other restaurants I was planning to call.
Bummed as I was not to get to buy direct, the menu left me salivating so I ordered a tikka masala burrito with Uber Eats using my Bitrefill-bought Uber credit.
Amazingly, when it arrived, I managed to lock myself out of Christian’s apartment while he, his girlfriend and a future roommate went to lunch. At least I had food and rooftop access.
I took the mishap as an excuse to take a break from writing and go enjoy the view on the roof. Up top, I tore into my burrito (which is a divinely inspired culinary design, I’m convinced) and surveyed the vibrant view of a lazy Saturday.
I wasn’t too concerned by the lockening, mainly because I knew Christian and friends would be home shortly. Plus my phone had a healthy charge so I could get somewhere if I needed to, though my BRD wallet had been a glitchy cause for concern. But I wasn’t going to starve while they were gone, so locking myself out was more of a dunce-cap moment than a shot in the foot.
They got home when I was halfway through with my burrito. Great when life works out like that (sucks when it doesn’t though). Like the way transportation was panning out — and not just for me.
Running around in Ubers all week is going to beat up my wallet pretty good and already has. Christian offered to mitigate the problem by renting me his bike, so when he got back he took me to the house’s garage to dig it out.
When he opened the door, there was a pile of bikes chained together, none of which belonged to Christian’s house. They belonged to his neighbors, but their bikes were gone. Earlier, Christian had been griping about his roommate Matt leaving the cover off the rooftop grill — looks like he might have forgotten to lock up the bikes (and the garage), too. I wasn’t the only one with bike woes.
Sucks when it doesn’t though.
If I can buy a bike with bitcoin while I’m here, I intend to donate it to Christian’s house — a gesture of good faith for letting me shack up.
Maybe that will be my first IRL transaction in this tech city.
I stayed in the rest of the day, in part to write but also because there wasn’t much of a reason to go anywhere. If I needed food, I could order through Uber Eats. In fact I would have to, because day 2 was the day that I realized that most all of the places that used to accept bitcoin in 2013-14 no longer did. Almost all of the places I researched were either gone or had stopped taking crypto a while ago.
Hill tried to warn me, saying many of the places she visited were now out of business. The Cups & Cakes Bakery that garnered international media attention for being one of the first businesses to accept bitcoin, the sushi joint where she took the San Francisco bitcoin community out to dinner — both were gone. I’ve searched for the Buyer’s Best Friend grocery store, whose owner was inspired to take bitcoin after reading Hill’s series, but, as far as I know, its physical locations have vanished. Google suggests that there’s a delivery service that you can use, but the company’s website just redirects me to a 404 page.
I assured Hill that I had found other alternatives, some of which might have sprung up after her experiment. One by one, a series of disappointing phone calls discredited all of my research. All of the places that used to accept bitcoin no longer do. Some that I found on the resources I used (coinmap.org and finder.com) weren’t even in business anymore.
My fear after calling Curry Up Now was being confirmed. Apparently, the restaurant’s rejection of the cryptocurrency had been the unfortunate portent of a trend of restaurants that formerly accepted bitcoin but don’t anymore.
My expectations had been completely thwarted. There are fewer storefronts and restaurants that accept bitcoin now than there were in 2013-14. So far, Uber credit has been keeping me afloat. I had yet to actually completely an in-person transaction for anything (except for when I paid Christian for dinner but that doesn’t really count). The thought of it made me realize that I didn’t even need to be in San Francisco to do the experiment. I could have been back home — I could have been anywhere.
That frustrated and fascinated me. So long as I had internet, I could buy gift cards from Bitrefill and Paxful and credit to eat/travel/sleep. I could buy just about anything a traveler would need: flights, hotel rooms, and gift cards for food and groceries. If I really needed to, I could even subsist on the cheapest, most ubiquitous fast food, like buying McDonald’s gift cards to eat in the farthest corners of the world. There’s Subway, too, and other chains you’d find just about anywhere.
These services work even if you’re unbanked, something that was touched on in a podcast episode I had with Christian that night for POV Crypto. Speaking to the experience so far, I mentioned the trend of restaurants either no longer accepting bitcoin or going out of business after accepting it (whatever that represents).
“Sounds like you’re having to use a lot of infrastructure to survive,” he said in reference to how Bitrefill and Paxful have helped me out. “Which is still cool because even if you’re unbanked, you can use bitcoin to live.”
And he’s right about that. Even if I haven’t (and maybe can’t) pay merchants directly, bitcoin is still fulfilling its use case as a decentralized payment method. At once, it makes it difficult to survive on it in the physical world, but simultaneously, it makes it easy to survive online.
It’s either too easy or too impossible.
The rest of the night was filled with dinner, paid for by one of our coworkers, John Riggins. When I asked Riggins for his wallet address, he didn’t respond.
After grub, we (Christian, his girlfriend Michelle, Riggins and I) all sat down for a game of Catan. A trading game involving resource cards that represent imaginary wheat, lumber, ore and cattle really gives you perspective when you try to live on internet money.
It made me think that, even in the worst case, maybe I could barter my way along. Or that, just like the shifting economics of the game, when certain resource cards would become more valuable depending on situation or player, it made me think: Someone will eventually come along who will take my bitcoin for food or a service or anything, right?
I’m going to get out and about to really see for sure the next day.
Cryptocurrency payroll service Bitwage has partnered with Texas-based payroll and Human Relations firm Simply Efficient HR to help companies fund W2 Employees and payroll tax payments using crypto. The initiative, which launches today, January 16, 2019, is available in all 50 American states.
Essentially, this partnership allows companies across the United States and Puerto Rico to fund their W2 payrolls and payroll taxes in ether and bitcoin. At the other end, employees can choose what percentage of their wages will be paid in bitcoin or paid in fiat currency.
Apart from payroll funding, the service also provides U.S.-based companies with the ability to fulfill HR and payroll compliance obligations for the employer to the U.S. government.
According to Jonathan Chester, co-founder and CEO of Bitwage, companies that earn crypto often find it hard to pay W2 employees and taxes, as "traditional payroll and payroll tax systems are designed for the fiat world."
He added: “Companies with banking issues using cryptocurrency could only hire employees as contractors, because paying taxes on behalf of W2 employees in fiat was impossible. This new product release changes this.”
While some companies hold lots of crypto assets, they lack the means of paying employees, freelancers, vendors or tax agencies with local currencies.
"We are enabling BTC or ETH to be a part of this. The BTC or ETH gets converted into fiat to be able to interact with these traditional systems. The worker can choose to receive a portion of their wage in BTC at the end as well," Chester explained.
He noted that Bitwage does not yet include the option for companies to pay out in ETH, just pay in. “However, now companies such as ICOs and decentralized applications with a lot of ether can hire people as W2 employees/offer benefits and stay in compliance,” he said.
In addition, these companies can fund their crypto holdings and make payments to local and foreign vendors, with adoption in countries such as India, Argentina, Britain, Brazil and others.
“While the partnership is for U.S.-based payroll, tax, hr, benefits, we can also pay fiat to freelancers and vendors internationally,” said Chester.
Live Beta Results
Bitwage has been running a beta version of this service for peer-to-peer crypto marketplace Paxful, as it seeks to improve crypto acceptance and fiat currency payouts.
“Bitwage bridges the gap between Bitcoin and the traditional finance system,” said Hayel Abbassi, a Paxful controller based out of their New York office. “As a company that earns 100 percent of revenue in bitcoin, we are always looking for service providers who will accept digital currency … Bitwage has recently formed a partnership with a traditional payroll company who integrates into their platform to provide these services.”
Last week, two of the largest banking regulators within the European Union released reports calling for uniformity in the regulations of crypto assets and Initial Coin offerings (ICOs) across the continent.
The EBA Calls for Pan-EU Crypto Regulations
On January 9, 2019, the European Banking Authority (EBA) published its assessment of crypto laws. The document, which examines the sustainability of EU laws to cryptocurrencies, analyzed the use of digital assets within the EU, as well as some of the pan-EU laws that currently govern them.
In the report, the EBA decried the lack of uniformity in crypto laws. It stated that this lack of equilibrium means that companies can move operations to “crypto havens” and face less-stringent regulations.
Essentially, this could create an uneven competitive playing field. Certain countries such as Malta and Gibraltar have been known to enforce crypto-friendly rules. However, the EBA is looking to achieve a uniform regulatory environment in the zone.
Adam Farkas, executive director of the EBA, said, “The EBA calls on the European Commission to assess whether regulatory action is needed to achieve a common EU approach to crypto assets.”
The ESMA Discourages Crypto Legitimization
On the same day, the second regulator, the Europe Securities and Markets Authority (ESMA) also published its advice to various EU-based banking institutions on ICOs and crypto assets.
The regulator pointed out that the crypto industry is quite small and presents little threat to traditional financial stability. However, it also expressed some concern over the risks posed to market integrity and the protection of investors.
The ESMA said, “Wider regulation of crypto-assets and related activities may have trade-offs, such as risking legitimizing crypto-assets and encouraging wider adoption.”
In addition, the report recommended that cryptocurrencies shouldn’t be legitimized, while also claiming that all digital assets should be subjected to anti-money laundering legislation.
The regulator warned about the significance of protecting the capital markets. Also, investors should be warned against buying crypto assets that aren’t financial instruments, as excess regulation could bring them “into a similar regulatory remit as the one for crypto-assets that are financial instruments.”
Gemini's Viral Ad
The sentiments of the two regulators seem to echo those of Gemini Inc., the crypto exchange owed by the Winklevoss twins.
Just last week, the company engaged in a viral, city-wide advertising campaign. Buses, taxi tops and bus stops carried signs with messages such as “Crypto Needs Rules” and “Crypto Without Chaos” being boldly displayed.
At the time, Chris Roan, head of marketing at Gemini, said, “We believe that investors coming into cryptocurrency deserve the exact same protections as investors in more traditional markets, adhering to the same standards, practices, regulations and compliance protocols.”
Also, while speaking about their ad campaign in an interview with Fortune, Tyler Winklevoss added, “The idea is that companies that build on top of things like Bitcoin should have a regulation that’s thoughtful and that doesn’t stifle innovation … People believe in the dream of crypto. They just don’t know how to engage in it without getting burned. We’re here to say Gemini’s a place you can do that.”
The Gemini ad campaign generated some to-be-expected reactions from the Bitcoin community, with many pointing out the folly in its approach to regulation.
In a tweet, Jesse Powell, CEO of Kraken, said, “Saying crypto needs rules is like saying the poor need sanctions. Here's a rule: no more rules.”
Nick Foley, a former support staffer at Coinbase, also stated that the rules required by crypto are already there — and based in mathematics. Foley took to Twitter to downplay the prospect of bringing complex regulations to the crypto space, calling most of these regulations unnecessary.
Rules like mathematics? Sure. Crypto needs that. Rules like "KYC AML licencing taxation Patriot Act bitlicense bullshit?" No. Crypto doesn't need that. pic.twitter.com/8azzqCKlwa
Bitcoin is an open-source protocol that anybody can interact with. It is getting attention and attracting participation in different ways, whether it is through speculation, investing and sending money, all the way to contributing to what’s underneath the hood. The entire Bitcoin repository is on GitHub, inviting any developer to see the protocol’s code and perhaps contribute toward solving existing problems if they can.
A noteworthy fact, however, is that the pool of developers today is quite small.
“It's not an easy field to get into,” Jimmy Song, author of Programming Bitcoin and instructor at Programming Blockchain, told Bitcoin Magazine. “Interestingly enough, the thing that makes Bitcoin hard to get started on is the cryptography, and that's hard because the math is not familiar to developers. Specifically, finite fields and elliptic curves.”
Some would argue, though, that the small number of developers in Bitcoin today is not too small. In fact, it’s perfectly fine at the size it is for such a new industry.
“Bitcoin has only been around for 10 years, and it only started getting a lot of mainstream attention in 2017, so it hasn't been a long time to build up an ecosystem of developers,” said John Newbery, a Bitcoin Core developer and Bitcoin engineer at Chaincode Labs.
“It’s something that we hear a lot, that it is difficult to find experienced Bitcoin engineers … [Bitcoin] really only started getting mainstream attention two or three years ago, so it’s as expected. We’re doing everything we can at Chaincode to widen and deepen that pool.”
Even outside of developer knowledge, there are many aspects of various fields of expertise that require a significant level of understanding in order to grasp Bitcoin all around. Since there are so many paths that need to be explored, the question is: Where do you start?
It is important to be realistic and realize that a complete understanding of the digital currency will always be unreachable.
“I don't think it's possible to understand all aspects of Bitcoin,” Newbery said. “The frontiers are continually being pushed forward so having 'proper education' that covers the entire Bitcoin space is a constantly moving target.”
Perhaps a better approach to answering this question requires going back to the very first Bitcoin educator himself, Satoshi Nakamoto. How did Nakamoto introduce something like Bitcoin for the very first time in his white paper so that as many people as possible could understand?
Nakamoto seems to have realized that the best way is to break down concepts separately, explain why they do or don’t work individually, and then tie all the strings together at the end.
A Few Examples in Action
One such solution that presents a similar approach has presented itself in the form of Justin Moon’s BUIDL Bootcamp, a grassroots effort by Moon that aims to educate “HODLers” about Bitcoin beyond the basics. Similar in structure to Bitcoin’s white paper, Moon’s four-project curriculum, starts with “How Bitcoin Works.” The first BUIDL Bootcamp class is already halfway complete.
Similar to how the white paper first introduces transactions, then explains timestamp servers and proof-of-work systems before putting all the pieces together, Moon’s curriculum takes a progressive, constructive approach.
Project 1 starts with students making what’s called a “PNG coin.” This is not a coin at all, instead it is a .png photograph of a paper signature with a message, like “I, Alice, issue 10 coins to Bob,” with a signature below it. Just as Satoshi Nakamoto introduces each of his concepts and proceeds to explain how alone they are subject to failure, Moon then shows his students how, with such a simple .png concept, it is easy to double spend transactions.
Eventually, the course introduces digital signatures to replace these image coins and introduces further concepts in a gradual fashion to teach similar lessons about why Bitcoin was built the way it was. All of this, is also only in project one out of four.
One of the most surprising things about the bootcamp is the extent to which people who had little programming experience were able to follow the course.
“We’ve had a few people that had no prior programming experience besides an introductory programming course, like Code Academy, and we’ve had them get all the way through building an 8,000 line ‘mini bitcoin’ that has all the main features,” said Moon.
The efforts at Chaincode are working toward a similar goal of educating about Bitcoin. Also a bootcamp-style learning course, Chaincode accepts a select number of applicants to go through a multiple-week course about Bitcoin-related technologies. Their developer-focused initiatives educate about the entire Bitcoin system, with residencies covering topics from the actual protocol to second-layer technologies like Lightning.
“We’ve done two versions of the residency focused on Bitcoin Core and Bitcoin, the protocol. And then we did the Lightning residency last year,” said Newbery.
Adam Jonas, who leads the education initiative at Chaincode, added, “We’re also planning a little bit longer residency this summer, a three-month residency, which is much longer than anything Chaincode has run in the past. It is probably an opportunity to sort of fuse both the lecture series and onboarding efforts that we’ve done, along with some project-based work. So hopefully getting the best of both worlds.”
“The point is to get people to think about bitcoin, not spend it. I don’t think it’s good for that. It’s not meant to be used like cash,” Jeremy Gardner, founder of Ausum Ventures, advised me.
“Satoshi created a decentralized store of value,” probably encapsulates his thesis that bitcoin is best unspent — better to hoard it like gold. To Gardner, using it as a currency is not only impractical. It is counterintuitive.
Well, I’m trying it anyway.
After all, journalist Kashmir Hill experimented with living on bitcoin as early as 2013, so it should be easier now, right? Well, it is and it isn’t. Nearly six years later, I’m discovering that, while bitcoin’s payment infrastructure has advanced, its use as a method of payment, at least in San Francisco, has seemingly regressed.
Before reporting to the conference I’m attending here in San Francisco, I had something important to do: I had to pay my respects to the pioneer.
Before leaving my home in Nashville to start my experiment, I reached out to Kashmir Hill, a former Forbes-gone-Gizmodo journalist who did this in 2013 (and again in 2014). She graciously took me up on my request to meet up so I could pick her brain and seek advice.
Getting to her was my first unbanked transaction. Transportation was a problem in her own experience until she got a bike, and even then, San Francisco’s hilly landscape is unforgiving, so it still wasn’t easy. It’s a way to get around, though, and I like the idea of being bike reliant for transport.
All of my attempts to buy or rent one on Craigslist haven’t come to anything yet, so that’ll have to wait.
I do have Paxful to buy Uber gift cards. Opting for this, I signed up for the exchange (where I had to give a phone number for authentication but no name) and transferred $25 worth of bitcoin from my BRD wallet. After executing a quick trade with one “Marxsmith,” I found myself with 25 bucks worth of Uber credit on my account.
Hill arrived at La Boulangerie shortly after my Uber dropped me off, immediately recognizable, thanks to the turquoise highlights that accentuated the tips of her hair.
When I thanked Hill for agreeing to meet with me, she replied she was naturally sympathetic to anyone who made the decision to live solely on bitcoin for a week. So sympathetic, she offered to pay my meal forward (the bakery doesn't accept bitcoin). I insisted on repaying her for the cheese danish and latte, but she said that she'd need to see if she remembered her Coinbase login to give me her public address.
"I wrote the articles and pretty much forgot about bitcoin," she joked.
It was during the first major media cycle that came along with the 2013 bubble that Hill experimented with living on bitcoin. Not many people knew what bitcoin was yet. A few mainstream journalists were starting to pump out articles about what was, to many, a novel experience in itself: buying bitcoin.
Hill's editor wanted to take the novelty farther: “Don't just buy bitcoin. Live on it for a week.” So she did.
"It was really on the fly — I got pretty lucky," she laughed, calling the planning and execution "lackadaisical."
If her approach was lax, the execution was anything but. She attended one of San Francisco's famous “Bitcoin at $100” meetups (along with Ross Ulbricht of Silk Road fame), she shacked up in the crack-house-turned-hacker-hostel/cypher community, 20Mission, and she even toured Coinbase when it was “three guys in an apartment," she put it.
As she mentioned this, a waiter brought our lattes. They were absurdly served in literal bowls about as big as my face.
At the end of it, she remarked that she had very much been assimilated into this community. Using the bitcoin that the community had tipped her throughout the week, she took about 50 or so of them out to a sushi dinner, an 8-something BTC meal that, in a few years, would have been worth an Ivy League education.
When I lived on Bitcoin in 2013, I treated a bunch of strangers to a sushi dinner that cost 10 bitcoin. At current valuation, that was a $99,000 sushi dinner!
The crypto community in 2013 was devout but scant, and so were the places Hill could spend bitcoin. Her entire experience was punctuated by a sense of getting by. This is best encapsulated by the final line of her 2013 series: “I survived.”
I compared notes with her about what I foresaw as being my biggest obstacles for the week, making mental notes to see if I could do more than “survive” and if 2013 might have actually been an easier year for the experiment.
As our conversation came to a close, Hill left me with a nugget of advice that I’d adopted as a mantra for my own iteration of the experiment.
“Don’t make the focus about yourself. Make it about other people, who the experiment allows you to access.”
Leaving La Boulangerie, I took an Uber back to the conference venue, where I made arrangements with Jeremy Gardner to visit a new project he’s working on and, of course, tour the infamous Crypto Castle.
We had a tight time frame; he was leaving for Park City, Utah, that night to go snowboarding.
“You can come by the castle tonight. Or later in the week, someone will let you in, show you around — I don’t care.”
We eventually settle on a 4:00 p.m. meeting outside of Monarch, a popular club wedged between San Francisco’s Mid Market and Tenderloin districts that accepts bitcoin by-the-bottle. It’s within walking distance of the conference which is good because my Uber credit was running low and the conference didn’t have any Wi-Fi for me to get on Paxful/Bitrefill to top it off.
The rest of the early afternoon was spent prepping for and moderating a panel, after which I scrambled around, looking for a USB-C charger to juice my phone and keep my financial lifeline alive (I had lost my charger that morning, of course). The conference tech staff was nice enough to lend me a charger, one of many acts of good will that seems to continually grace my experience.
When the time rolls around, Jeremy meets me with one of his business partners, Micah, who owns Monarch and another bitcoin accepting club in San Francisco, Great Northern. We hop one building over to their new project: a pawn shop that serves as the front for a speakeasy, both of which will accept bitcoin.
The shop had been a pawn for a while, Gardner said, buying, trading, selling and even offering loans and collateral for years before it shut down.
“All the snakey stuff,” he intimated.
Jeremy latched onto the speakeasy idea without much hesitation. He was disappointed that San Francisco only has two to its name and thought that the city ought to share with the rest of America in an emerging cultural trend (even Nashville has four or five).
“It’s more intimate and comfortable. It’s not the constant in-and-out traffic like at bars, so people stay longer.”
The pawn shop, with its display cases of cheap jewelry, tarnished silver and surprisingly intact china, is just a front, of course, but it adds an authentic element of secrecy to the bar. Jeremy wants to give the front its own distinguishing appeal. He wants it to only accept bitcoin.
“I’m imploring people to do that,” he said, breaking into a smile.
Micah scurried around, jotting notes and measurements before coming over to me and Jeremy and pouring us a glass of white wine (I’m not refined enough to know which type).
“Sorry, it’s just white,” he said.
“It’s alcohol, and that’s all that matters,” Jeremy replied.
Micah ran off to keep working, leaving Jeremy and me to a conversation on my experiment.
“Yeah, it’s an interesting one. People have done it before,” he said. “But I don’t think it’s good for that. It’s not meant to be used like cash but as a store of value. People don’t like volatility. They want certainty in their currency.”
He didn’t understand why I would spend my bitcoin and not hold on to it, and I told him I don’t see it as spending bitcoin but spending money I would otherwise have to on basic necessities. Jeremy said he’d be interested in a wallet that rebought spent bitcoin, but otherwise, he clings to the maxim that it’s better to hold than spend.
“The point,” he believes, “is to make people think about bitcoin — not spend it.”
We carried the conversation into an Uber on the way to the castle.
I asked Jeremy whether he considered himself a Bitcoin minimalist (he had made the somewhat common comparison between Bitcoin and Friendster earlier in our talk).
“Nah, I’d say I’m more of a shitcoin minimalist.”
Finally, we arrived at the castle. It lived up to its reputation. The outside was as unassuming as any of the nicer, multi-story boarding houses in the city’s Potrero Hill neighborhood, but the inside belied the true spirit of the castle: an eclectic, anything-goes hub of itinerant millennials who live free-of-charge thanks to a benevolent but prodigal 27-year-old member of the crypto riche.
“We had a self driving AI car startup here.” Jeremy gestures to the basement when we enter. “They got a couple mill in funding and moved out,” he added casually.
Up the staircase, the second floor hallways curled away from the stairwell with innumerable ownerless rooms.
“Vitalik has slept in this room a bunch of times,” Jeremy told me as he’s no doubt told countless before me.
“Bu this is where the magic happens,” he said as he came to the third floor. Up top, a lounging area with felt couches, a gas fireplace and a kitchen with a sticker-covered refrigerator that intrigued Business Insider and the New York Times when they profiled the place during the 2017 bullrun. The walls were hung with various print pieces, including a few of Banksy’s. I nearly asked, as a joke, if they were originals but held my tongue.
Jeremy had left to pack his things when Liz, a young realtor boarding at the house, joined me and Rachel, another border. Neither of them were particularly involved in crypto.
“Some of us don’t do anything with it, but others do,” she tells me. “It’s a healthy mix.”
We get on the topic of the experiment, and I bring up Jeremy's latest venture. Rachel, who is seemingly Jeremy’s romantic interest, apparently had no idea and congratulated him when he returned to say goodbye.
“Oh yeah, it’s pretty cool,” he enthuses. He leans in to give Rachel a peck on the cheek.
“When will you be back?” she asks.
“I don’t know,” he admits. “Probably one to two months.”
Later, I asked Rachel if Jeremy meant what he said as he rushed off to catch an Uber to the airport.
“Absolutely. He means everything he says.”
Liz, aka the Queen of the Castle, has given me permission to stay a few days, and I think I’ll take her up on it later in the week. For the remainder of my initial visit, though, I charged my phone (still struggling here) and used Bitrefill to get more Uber credit. This was much quicker and easier than Paxful. The most KYC they ask is an email, and you can send the bitcoin from any wallet to retrieve the gift card code (Paxful requires you to deposit bitcoin into your account's wallet to trade).
I spent the remainder of the night with my buddy and coworker Christian, who bought me dinner at the Irish Bank, a pub which I erroneously thought accepted bitcoin (I did pay him back in bitcoin). The goodwill of friends and fellow crypto geeks has been essential and I anticipate it will continue to be so throughout the week.
The rest of the night was a blur of exhaustion as we finished dinner and headed back to Christian’s apartment. I had been up since 6:00 a.m. From coffee with Hill to the conference to Jeremy’s speakeasy and Crypto Castle to pub to apartment, I had covered a lot of ground and met a great many people — some interactions and people I haven’t had time to cover in this sprawling account, including a few Crypto Castle residents who were building a rig to mine grin.
I got around, but I spent little bitcoin — unfortunately, none of it directly with any merchants. Hill covered my breakfast, though if she gives me a wallet address, I intend to reimburse her. The conference covered lunch. Bitcoin did buy me dinner, even if indirectly through Christian, and it did buy me Uber credit for transport — another indirect use, but as Christian pointed out to me, I was still supporting a use case and infrastructure.
I crashed on the couch around 12:30 a.m. and was content to know that I would have access to coffee in the morning.
Chinese crypto mining juggernaut Bitmain has taken a substantial hit in the recent crypto crash, leading to negative consequences for the company on many fronts. Just today, a source has confirmed with Bitcoin Magazine that the company is shutting down its offices in Amsterdam.
Throughout December 2018, for example, like many companies in the crypto space, Bitmain appeared to be gearing up for a wave of layoffs. With employees taking to semi-anonymous, Chinese forums to describe their experiences, reports claimed that entire departments were completely shuttered, and about half of the entire workforce was due to be sacked. Indeed, Bitmain began the month by shutting down all operations in Israel, despite success in that country since 2016.
In December, a Bitmain spokesperson told Bitcoin Magazine: “There has been some adjustment to our staff this year as we continue to build a long-term, sustainable and scalable business. A part of that is having to really focus on things that are core to that mission and not things that are auxiliary. As we move into the new year we will continue to double down on hiring the best talent from a diverse range of backgrounds.”
Last week, sources reported that Bitmain’s co-founders and co-CEOs Wu Jihan and Micree Zhan are preparing to step down from their control over Bitmain.
The South China Morning Post (SCMP) corroborated these reports regarding Bitmain’s co-CEOs, claiming that Bitmain “is poised to name a new CEO to replace company co-founders Wu Jihan and Zhan Ketuan.”
Director of Product Engineering, Dovey Wan, has suggested that there are several possible candidates for successor to the CEO position. According to Wan, Wang Haichao, who has been with Bitmain since 2017, is a prime candidate.
The SCMP report also supported this story, saying that their own source claims the “potential successor is Wang Haichao, who currently holds the position of product engineering director at the Beijing-based company, but has already taken over duties from co-CEO Wu and Zhan in a transition period that started in December.”
When asked about the future of Bitmain’s CEOs by Bitcoin Magazine, a representative of Bitmain would neither confirm nor deny these reports, stating, “Unfortunately, there is no information we have to share on this issue at this moment.”
Major cryptocurrency exchange Bittrex will launch an over-the-counter (OTC) trading desk today, January 14, 2018, by 18:00 UTC. The service will allow investors to trade nearly 200 digital assets currently offered on the Bittrex trading platform.
OTC trading is popular with institutional investors who trade in large volumes of cryptocurrencies. This form of crypto trading happens between two parties, and it takes place away from the exchanges. OTC trades are often handled via brokers, who offer high-volume traders a trading desk to execute large trades with a faster settlement and lower fees.
Bittrex will offer users “guaranteed pricing” for large block trades starting at $250,000 or more.
In a statement released to the media, Bittrex CEO Bill Shihara said the OTC service would “further advance the adoption of blockchain technology worldwide,” while providing high volume traders with much needed “price certainty and a fast and easy way to trade large blocks of digital assets.”
Having opened an international trading platform for non-U.S. traders in October 2018, Bittrex is poised to serve large-scale traders with its OTC trading desk. The exchange follows in the footsteps of other U.S.-based digital asset platforms, who have an OTC trading desk dedicated to large volume traders. This list includes Coinbase, Bitfinex and Poloniex.
Coinbase launched its over-the-counter crypto trading desk in November 2018, but the service is only accessible to Coinbase Prime customers. Coinbase head of sales Christine Sandler noted that the service would allow the exchange's clients to “leverage both our exchange and our OTC business.” She also speculated about the future integration of the OTC service with Coinbase Custody.
Earlier this month, cryptocurrency finance firm Circle said it executed 10,000 OTC trades in 2018, accumulating $24 billion in notional volume, per a Medium post.
"At the other end of the spectrum, our OTC trading business, Circle Trade, has continued to expand despite a tumultuous year for the industry: we onboarded a record number of new institutional clients."
Not only did this move occur on high spread, it occured on high volume. This level of supply and overall lack of demand is nothing something you would want to see if you are feeling bullish regarding bitcoin’s market structure. Currently, we are sitting right on top of daily support levels and have yet to close a new low:
Figure 2:BTC-USD, Daily Candles, Current Support Level
While the volume and spread were pretty intimidating, it should be noted that the most immediate support level (shown above in blue) is currently holding. However, should this support level break, we should fully expect to revisit the support levels toward the bottom of the range in the low $3,000s. Until we see a daily close below the current support level, the trend model remains somewhat neutral. Although the market is swinging 10% in a day, the overall structure is neither bullish nor bearish.
It should be noted, however, that expansion of volume and price spread leading into support tests is often a sign of market distribution. A potentially bearish slant to the current downward impulse is present in the Bollinger Bands (BBands):
Figure 3:BTC-USD, Daily Candles, Bollinger Band Squeeze and Expansion
The BBands have been squeezing inward for days, which indicates the market has been consolidating — no surprise there since the market hasn’t really moved from its well-defined range. Looking at the daily BBands though, we do see the beginnings of a BBands expansion, indicating the market is done consolidating and is ready for its next major move.
In our case, the BBands are hinting toward a downward continuation. If we manage to break the blue support level shown above, we could potentially see a strong continuation of the macro downtrend.
As I stated before, I would like to see a close below the current support level before I go full-blown bear. Although the current market structure is neutral, it is starting to show the early signs of a strong bearish continuation. It’s also important to note that we are still in a bear market. Just because bitcoin saw a couple of weeks of strong demand, that does not negate the months and months of downward pressure.
Bitcoin dropped 11% in one day as it finds itself testing its macro support level.
We have yet to close a new low, but the BBands are showing the market is coiled and ready for its next major move.
If we close below our current support level, the next logical test would be of the previous support level in the low $3,000s.
Trading and investing in digital assets like bitcoin is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.