Image Image Image Image Image Image Image Image Image Image Image Image

| February 22, 2019

Scroll to top

Top

Everything Archives -

Everything You Should Know About Bitcoin Address Formats

February 18, 2019 |

Everything You Should Know About Bitcoin Address Formats

A wallet address, comprising a string of 26-35 alphanumeric characters, is all it takes to send and receive bitcoin. Any bitcoin address can be used to transfer cryptocurrency to any other address on the network, provided the sender’s wallet software supports that address type. With multiple address formats to choose from, and wallet providers and exchanges only supporting certain address types, it pays to familiarize yourself with the differences.

Also read: Bitcoin Cash-Focused Ifwallet Implements Cash Accounts Name System

Address Formats Are the Internet Protocol of Bitcoin

Just as there are multiple versions of the Internet Protocol, such as IPv4 and IPv6, there are multiple bitcoin address formats. Most of the time, these don’t come into conflict with one another, with transactions zipping seamlessly across the network between custodial and non-custodial wallets. There are three Bitcoin Core address formats to choose from, P2PKH, P2SH, and bech32, with only a handful of service providers supporting all of them. There’s a good chance your preferred wallet or exchange doesn’t support at least one of these formats, with bech32 the likeliest to be omitted.

Learning the pros, cons and quirks of each address format will enable you to choose a compatible bitcoin wallet, exchange or platform. It will also furnish you with a deeper knowledge of Bitcoin’s inner workings, and reveal the trade-offs that come with each format in terms of security, flexibility and functionality.

Everything You Should Know About Bitcoin Address Formats

P2PKH or Legacy Address Format

If your bitcoin address starts with a 1, you’re using a P2PKH or legacy address, for example 1BvBMSEYstWetqTFn5Au4m4GFg7xJaNVN2. This was Bitcoin’s original address format and it still works faithfully to this day. P2PKH, incidentally, stands for Pay-to-Pubkey Hash i.e pay to a hash of the recipient’s public key. Legacy addresses are not segwit compatible, but you can still send BTC from a P2PKH address to a segwit address without any problems. The average fee when sending from a P2PKH address is likely to be higher than when sending from a segwit address, however, because legacy address transactions are larger in size.

P2SH Address Format

P2SH addresses are structured similarly to P2PKH, but start with a 3 instead of a 1, for example 3J98t1WpEZ73CNmQviecrnyiWrnqRhWNLy. P2SH, which stands for pay to script hash, enables more elaborate functionality than legacy addresses. The P2SH script function is most commonly used for multisig addresses which can specify, for example, that multiple digital signatures are required to authorize the transaction. This address format is also used to enable non-native segwit transactions using a process known as P2WPKH-in-P2SH. The average person sending and receiving coins doesn’t need to concern themselves with the more complex functionality that the P2SH format can bestow: all that matters is that this address type is widely supported and can be used to send funds to both P2PKH and bech32 addresses.

Bech32 Address Format

Bech32 addresses look distinctly different from the P2-style addresses. Each one starts with “bc1” and is longer than a legacy or P2SH address on account of this prefix. Bech32 is the native segwit address format, and is supported by the majority of software and hardware wallets, but a minority of exchanges. Ledger and Keepkey wallets currently don’t support bech32, for instance, and while most exchanges enable sending funds to bech32 addresses, they don’t enable users to receive them with this format. At present, less than 1 percent of BTC is stored in bech32 addresses, although this number is increasing slowly.

Everything You Should Know About Bitcoin Address Formats
Bech32 adoption

Bitcoin Cash Address Formats

Bitcoin Cash addresses can follow either the legacy format (which starts with a 1) or more commonly the Cash Address (Cash Addr) format. It’s based on bech32 and starts with ‘q’ or ‘bitcoincash:q’. BCH wallets can support both formats, with tools enabling users to switch between Cash Addr and legacy formats. The primary reason for using the Cash Addr format is to distinguish BCH from BTC and thereby prevent funds being sent to the wrong address.

Which BTC and BCH address formats do you most commonly use? Let us know in the comments section below.


Images courtesy of Shutterstock and P2sh.info.


Need to calculate your bitcoin holdings? Check our tools section.

The post Everything You Should Know About Bitcoin Address Formats appeared first on Bitcoin News.

Bitcoin News

Lego Movie 2: Everything Is Not Awesome

February 10, 2019 |

The good news for The Lego Movie 2: The Second Part: The blockbuster’s sequel won the weekend box office with a $ 35 million haul. The bad news: It fell far short of becoming a blockbuster in its own right, and short of its own expectations, which were more in the…
Newser

CNN

Brazil’s new president set to get tough on, well … everything

January 1, 2019 |

Jair Bolsonaro will be inaugurated Tuesday as the fifth elected president since Brazil returned to democracy after the 1964-85 military dictatorship that Bolsonaro himself once praised. His critics fear he will threaten human rights and ecological preservation in the country.
CNN.com – RSS Channel – Regions – Americas

Everything You Need to Know to Start Trading Cryptocurrencies

December 23, 2018 |

After acquiring your first bitcoins you might want to swap the digital asset for another token or test your luck for some quick profits with one of the many cryptocurrency exchanges. And even though you don’t need to be an expert to begin trading cryptocurrencies, some people want to know the very basics on how to get started. 

Also read: How to Spend and Give Bitcoin Cash Over the Holidays

Reviewing a Cryptocurrency Trading Platform’s Reputation and Registering for an Exchange Account

Cryptocurrency trading has become extremely popular these days and there’s a large swathe of individuals who swap digital assets every day to make more money. In the early days there were only a few trustworthy trading platforms available for people who wanted to exchange cryptocurrencies, but nowadays there’s a great number of reputable exchanges in most countries.

Everything You Need to Know to Start Trading Cryptocurrencies
There are plenty of reviews of all the available cryptocurrency trading exchanges online.

In order to begin trading, you will need a verified account on one of the many global digital asset exchanges in existence. Beginners should know that most trading platforms require the user to verify their identity in order to withdraw fiat, and some businesses also mandate this rule for withdrawing large amounts of digital currencies.

Everything You Need to Know to Start Trading CryptocurrenciesIf you are new to trading you should research the variety of exchanges that allow residents from your region to swap digital assets and make sure the trading platform is reputable. There will definitely be reviews on most of the well-known cryptocurrency exchanges available today and people will describe their experiences with the business. After being verified by an exchange most traders like to keep a noncustodial wallet on the side in order to store coins for long-term savings. If traders plan to flip their assets on cryptocurrency platforms for some quick bucks, then keeping funds on an exchange for a temporary period is ideal. However, most veterans know and beginners should forever remember: “If you don’t store your own private keys you don’t own cryptocurrencies.”

Everything You Need to Know to Start Trading Cryptocurrencies
A basic example of the information required for a good portion of exchanges. There are a few exchanges that allow trading with much less verification.

Markets, Wallets, and Orders

After a trader is verified they can begin trading on the exchange, but they will need some funds to get started. If you already own a popular cryptocurrency like BCH, ETH, or BTC then you can deposit the money into the wallet section located on the exchange. Some exchanges will allow you to make cryptocurrency purchases and sell coins using fiat. This is a good time to get a feel for the exchange dashboard and user profile. New traders should learn how to activate two-factor authentication on the platform and review all the options available. Most exchanges will have a few sections to choose from like a “markets,” “wallets,” “settings and profile,” and an “orders” section. The “markets” option brings the user to the exchange and shows all the cryptocurrency and fiat pairs available to trade on the platform.

Everything You Need to Know to Start Trading Cryptocurrencies
Typical sections found on the trading platform’s dashboard.

The “wallets” section shows all the wallets available on the exchange and this is where you can deposit, withdraw and store all the digital assets supported by the business. Usually, in the “wallets” area users will find the pending deposit and withdrawals and this can be monitored for confirmations. Traditionally, most exchanges have a confirmation period where traders must wait for a certain amount of confirmations to begin trading the cryptocurrency.

Everything You Need to Know to Start Trading Cryptocurrencies
Exchanges give cryptocurrency deposit addresses to customers so they can fund their account with money for trading. This area can usually be found in the “wallets” or “deposits and withdrawals” section. A “+” icon will usually reveal the deposit address, and a “-” icon will bring the user to the withdrawal section. 

The “settings and profile” area is where the user can customize settings like two-factor authentication, user information, email, and other important data tied to the account. This includes information such as passwords, API keys, UI settings, IP whitelist, and more. The trading platform’s “settings and profile” section will also tell you whether or not your account is verified and show a withdrawal limit as well. In the “orders” area users will find orders they had placed that are unfilled or completed.

Sometimes orders get partially filled too and this is a natural occurrence. This happens if you bid on a cryptocurrency at a certain price and there are not enough coins available at that specific price that you can purchase at one time. In these occasions, an exchange may fill a quarter or some fraction of your order. Typically in this case, when more coins are made available at the same price the exchange will fill the remainder of the order. In the “orders” section you should find your trade history and all the buys and sells that have been completed on your account.   

Everything You Need to Know to Start Trading CryptocurrenciesPlacing an order on a cryptocurrency exchange, whether it is a buy or sell, is fairly intuitive. For instance, if you are planning to sell 10 ETH on an exchange for USD there usually is a limit (default) order type or a conditional order. A limit order is a traditional buy and sell while a conditional order has to meet certain conditions in order to execute. Most beginners should choose a traditional limit order when attempting some of their first crypto-trades. In the “quantity” window, you would enter 10 ETH or the amount of cryptocurrency you want to purchase or sell. After that comes choosing the price you want to sell the ETH at, and a limit order consists of a few choices. The user can sell the asset for the current “bid” price which is the highest price the market is willing to pay for the coin. Then there’s the “ask” price that represents the lowest price the market is willing to pay for the cryptocurrency at the time. Then the last choice is the “last” price which is essentially the price of the last executed trade. Of course, users can customize the price to anything they want but traditionally beginners will choose between these three options.

After completing the type of order, quantity, and price the exchange will show the total cost of the trade including the fees the exchange charges to execute the swap. After confirming that everything looks good as far as the order is concerned the trader can also set a “time in force” option which is usually set to “good until canceled” by default or it can be changed to a specific time frame.

The markets page should show you all the choices available for orders including the current market orders, history, and the user’s trade history as well. This page will likely show a depth chart which is a graphic visualization of the current market order book, a written log of the order book, and a customizable trading chart showing the cryptocurrency’s performance. The order books and the charts set at different time frames can give a trader a little insight on the current market sentiment and may indicate whether or not its bearish or bullish.

Charts, Tools, and Indicators

With the charts showing trends, certain charting tools available on the exchange may help a trader better predict short-term and long-term cryptocurrency market movements. After getting acquainted with an exchange and making a few simple trades you might want to learn about some of the technical indicators and charting tools. For example, the Relative Strength Index (RSI) measures both speed and the strength of a market’s price volatility. The RSI will give traders some insight into whether or not the market is “oversold” or “overbought.” The sister to the RSI oscillator is the stochastic indicator that measures current momentum within the markets and collects data on the digital asset’s support and resistance. Another relative of the two oscillators is the Moving Average Convergence/Divergence (MACd). This particular indicator consists of two exponential moving averages and uses them to track momentum as well. In fact, these three technical indicators will often look similarly placed on a chart and move in corresponding directions.

Everything You Need to Know to Start Trading Cryptocurrencies
Exchanges offer charts, indicators, and order book views so traders can get a glimpse of the current market action.

Following learning about momentum indicators it is good to learn about moving averages and there are all kinds of moving averages on the charts like “exponential moving averages (EMA)”, and “simple moving averages (SMA).” Moving averages collect data on a series of time frames in order to smooth out a visualized look at long and short-term trends. With trading statistics moving averages can be set to all kinds of data points by creating a trendline of averages and most traders look at moving averages like the 50, 100, and 200-day averages. The momentum oscillators and moving average trend lines are some of the basics of technical analysis and there are many more tools like Bollinger Bands, Aroon oscillators, ATR bands and trailing stops, fractals, medians, and Fibonacci ratios.

Check out these four articles after understanding the basics of trading digital assets: 

You Don’t Need to Know Technical Analysis or Charts to Understand the Very Basics of Trading Cryptocurrencies

When you are just a beginner learning how to deposit and withdraw funds, as well as execute a very basic trade, this is all you really need to know in order to swap cryptocurrencies. Having a noncustodial wallet available to send funds to for long-term storage is a good idea to have handy when using cryptocurrency trading platforms. This way you are in control of your private keys and if you ever want to sell those assets you can simply deposit the funds into the exchange at any time. The basics of trading cryptocurrencies are fairly easy and after a few times messing around it’s not too hard to understand. In time, if you are good enough, you could use the cryptocurrencies’ price swings to make a few bucks selling high and buying low. Getting a feel for using the digital assets exchange and making a couple of simple trades is the best way to get started.

A quick recap of required items and things you might need to begin trading cryptocurrencies:

  • A valid email, and username & strong password
  • Proof-of-identity; license, state ID, residential address information.
  • Funds; such as a cryptocurrency or fiat deposit.
  • Two-factor authentication (2FA); some exchanges require the use of 2FA platforms such as Authy or Google Authenticator.
  • A noncustodial wallet; in addition to an exchange account, it’s good to have a wallet on the side that can store digital assets for long periods of time. 
  • Research; it’s a good idea to research the reputations of exchanges, how the trading platform works, and eventually you can study technical analysis and methods on how to trade like a pro. 

Have you ever traded on a cryptocurrency exchange? What kind of tips would you offer to first time traders attempting to exchange digital assets on a trading platform? Let us know what you think about this subject in the comments section below.

Disclaimer: Price/trading articles and markets updates are intended for informational purposes only and should not to be considered as trading advice. Neither Bitcoin.com nor the author is responsible for any losses or gains, as the ultimate decision to conduct a trade is made by the reader. Always remember that only those in possession of the private keys are in control of the “money.”


Images via Shutterstock, Poloniex, Bittrex, Bitstamp, Google, and Pixabay.


Want to create your own secure cold storage paper wallet? Check our tools section.

The post Everything You Need to Know to Start Trading Cryptocurrencies appeared first on Bitcoin News.

Bitcoin News

Devoted Mom ‘Lost Everything’ on This Stretch of Road

December 9, 2018 |

A South Carolina mother “lost everything” Friday when three of her young children died in a car crash and a fourth was critically hurt, the Greenville News reports. “Those children were her strength. She lost everything,” says Crystal Griffith, a co-worker of Jackie Brown at Taco Bell and KFC in…
Newser

5 Opsec Errors That Caused Cryptocurrency Users to Lose Everything

November 23, 2018 |

5 Opsec Errors That Caused Cryptocurrency Users to Lose Everything

Maintaining good operational security is imperative for all web users, but it’s particularly important in the cryptocurrency space. Prying eyes are everywhere on the internet, from law enforcement to hackers and from blockchain forensics firms to data resellers. Examining the opsec errors that got several notorious bitcoiners robbed or busted yields valuable lessons we should all heed.

Also read: Colorado Regulator Issued Orders Against 18 ICOs, With More on the Way

Opsec Is a Scale Not a Switch

There’s no such thing as optimum opsec or perfect privacy. Just because the internet’s heavily backdoored and broken doesn’t mean you should concede defeat. It’s possible to enhance your online security without adding complexity. The most memorable opsec lessons come from studying those who let their guard down or got sloppy and were duly punished. You don’t have to be a darknet market boss or a bitcoin whale to benefit from keeping your crypto, data and browsing habits locked down. The following figures all paid the price for opsec errors that could have been easily avoided.

Keeping Logs

5 Opsec Errors That Caused Cryptocurrency Users to Lose EverythingSilk Road operator Dread Pirate Roberts (DPR), later to be identified as Ross Ulbricht, made a string of mistakes that ultimately led to his dox and arrest. Ulbricht remains a visionary and a hero to many bitcoiners, but even his greatest advocates will concede that he was the architect of his own downfall. The key takeaway from DPR’s takedown is this: Don’t retain unencrypted documents that would be damaging to you if they fell into the wrong hands.

In addition to keeping passport scans of Silk Road employees and chat logs, DPR kept a diary in which he confessed to ordering assassinations and all manner of other nefarious deeds. When feds seized Ulbricht’s laptop while he was logged in to Silk Road, they got the lot. Don’t store incriminating information on your phone or laptop, particularly not private keys or 2FA backup codes. If your device is stolen, seized or injected with malware, you’re screwed.

Writing Analysis

5 Opsec Errors That Caused Cryptocurrency Users to Lose Everything
Gal Vallerius

Former darknet market vendor Gal “Oxymonster” Vallerius is serving a 20-year jail term in America for drug offences. While the manner in which he was detained — at a Texan airport after flying in to attend a beard contest — caught the headlines, the way he was unmasked is where the focus should be. One of the primary tells that connected the Oxymonster pseudonym with Gal Vallerius was writing analysis. Language, punctuation, cadence and other stylistic tells such as capitalization are highly individualistic. Even something as simple as typing a trademark phrase to submit vendor feedback on the deep web — “Banging!” — can be enough for a dox.

If your pseudonymous persona is doing something that could deleteriously affect your real-life identity, be very careful what you write and how you write it. Even law-abiding citizens like Tether critic “Bitfinexed” have allegedly been doxed through writing analysis.

Recycling Pseudonyms

5 Opsec Errors That Caused Cryptocurrency Users to Lose EverythingNot everyone on this list is a major criminal, but deep web kingpins are ripe for analysis. Not only is their fall from grace monumental, but court records provide precise details of how they were caught. Alphabay boss Alexandre Cazes made plenty of mistakes, the crux of which can be distilled into two words: don’t recycle. Recycled usernames, email addresses and, most critically, passwords are an opsec accident waiting to happen.

Cazes used his old Hotmail address as the source address for Alphabay’s welcome emails and adopted a pseudonym on the site he’d previously used elsewhere on the web. Like Ross Ulbricht, Cazes didn’t encrypt his laptop, enabling law enforcement to access all his records and seize millions of dollars in cryptocurrency. And all because he was too lazy to think up a new pseudonym or create a new email address. The fact that the Canadian citizen went on to commit suicide in a Thai jail cell after his arrest makes his case even more tragic.

SIM Jacking

5 Opsec Errors That Caused Cryptocurrency Users to Lose EverythingMessari founder Ryan Selkis, aka “Twobitidiot,” is a law-abiding citizen who holds the dubious achievement of having been SIM-swapped twice. Also known as SIM jacking, the scam involves an attacker porting the victim’s phone number over to a new handset through social engineering. Selkis’ second jacking occurred only this month, despite the tech-savvy entrepreneur having taken robust measures to thwart a repeat attack.

“I a) flagged my account as high-risk, b) added a pin, and c) demanded account changes only take place in store with a photo ID,” he explained, but all to no avail. Mercifully, the attackers were unable to access his cryptocurrency on this occasion. His advice for others includes removing SMS verification for email, and using 2FA only through an app such as Google Authenticator. Selkis encouraged his readers to follow the guides that others have written on preventing the likelihood of SIM jacking. Unfortunately, even with numerous precautions in place, cellphone network staffers remain an Achilles’ heel.

Oversharing

5 Opsec Errors That Caused Cryptocurrency Users to Lose Everything
Solid gold Ledger Nano

Opsec is generally thought of in technical terms: using strong passwords, connecting via a VPN and other good practices. But one of the biggest ways in which cryptocurrency users make themselves a target is by running their mouth and revealing the size of their digital wealth. Most people aren’t as careless as Pavel Nyashin, a Russian Youtuber who was robbed of $ 425K of crypto by masked assailants after boasting about his wealth in a series of videos.

Balancing your desire to tell the world about bitcoin without revealing the size of your bitcoin holdings can be tricky. But as case after case has shown, even gossiping to friends about the size of your stack or how it’s secured can make you a target. Keep that business to yourself: Don’t show off your portfolio or your hardware wallet, no matter how flashy the device might look.

Whether you’ve got a lot to hide or a little, opsec isn’t optional: It’s essential. Be diligent, be vigilant and be safe.

What other well-known cryptocurrency figures lost everything due to poor opsec? Let us know in the comments section below.


Images courtesy of Shutterstock.


Need to calculate your bitcoin holdings? Check our tools section.

The post 5 Opsec Errors That Caused Cryptocurrency Users to Lose Everything appeared first on Bitcoin News.

Bitcoin News

The Daily: Fake Trezors, Catching Knives, Stablecoins With Everything

November 20, 2018 |

The Daily: Fake Trezors, Catching Knives, Stablecoins With Everything

There aren’t many prices that cryptocurrency traders can bear to look at right now, but stablecoins are one of the few exceptions. In this edition of The Daily, we consider the latest cryptocurrency niche that dollar-pegged coins are encroaching on, but not before we’ve addressed the serious business of fake hardware wallets and how to call the bottom in a market that won’t stop falling.

Also read: Fear, Loathing and Opportunity: How Traders Are Handling the Drop

Fake Trezors Found in the Wild

As if cryptocurrency investors didn’t have enough woes to deal with right now, there’s a bunch of fake hardware wallets doing the rounds. The Trezor lookalikes are manufactured cheaply in China, the land of knock-off electronics. If an offer looks too good to be true though, it probably is, and traders would be advised not to endanger their funds by storing them in a copycat wallet that could be backdoored or simply insecure.

The Daily: Fake Trezors, Catching Knives, Stablecoins With Everything
Fake Trezor on the left, authentic Trezor on the right

“You would not entrust your money to somebody who has already cheated you by selling you a different product than you thought you were buying. We, therefore, recommend not to use this [fake] device,” wrote Trezor, before explaining how to tell the difference between the company’s official holographic seal and that used on the ersatz imitators.

Knife Catching Is a Dangerous Game

Earlier today, we wrote about cryptocurrency investors scrambling to sweep up cheap coins as Bitcoin holds its very own Black Friday sale. While the temptation to splurge on discounted crypto can be strong, catching falling knives is a dangerous game. For those brave enough to try and time the bottom in this market, crypto Twitter has some advice. “A crash like this usually ends with a ‘big bang’ and a quick V shape reversal. So far we’ve only seen ‘slow’ decline. Don’t try to fight the trend just wait for confirmation,” urged one source.

Respected analyst Willy Woo got a little more technical, tweeting: “RSI reading more FUD than the Feb 12K->6K crash. We have decent volume profile support in this 4.4K region … very unlikely to slice through… if anything the brave can go knife catching.”

Perhaps Jackson Palmer put it best, though:

Stablecoin Watch

It’s always interesting to check in on stablecoins during days of extreme market volatility. What’s particularly interesting is noting which way different dollar-pegged coins bend when their volume starts to stack up. At the time of writing, USDC and TUSD are trading at one to three cents over the dollar, while USDT is under, with each tether trading for an average of $ 0.97. Dai, the stablecoin that is collateralized using ether, is sitting just under $ 1. Earlier today, a $ 50 million collateralized debt position had to be liquidated and the eth locked in the contract sold off, after falling cryptocurrency prices left the dai contract under-collateralized.

The Daily: Fake Trezors, Catching Knives, Stablecoins With Everything
Bitusd (light blue) is the only stablecoin showing major divergence, trading at $ 0.91

Lest we needed further proof of how badly this bear market is biting, blockchain conferences are being challenged by a new kind of digital asset convention — the stablecoin conference. The Stablecoin Foundation Conference takes place in New York on Nov. 26. The prospect may sound about as alluring as watching paint dry, but if this market downturn persists, stablecoin conferences could soon become the norm. While day traders thrive on volatility, most cryptocurrency investors would love nothing more than a spot of stability right now.

What are your thoughts on today’s news tidbits as featured in The Daily? Let us know in the comments section below.


Images courtesy of Shutterstock, Trezor, and Stablecoin Index.


Need to calculate your bitcoin holdings? Check our tools section.

The post The Daily: Fake Trezors, Catching Knives, Stablecoins With Everything appeared first on Bitcoin News.

Bitcoin News

Everything That’s Wrong With Roubini’s Central Bank Crypto Love Letter

November 20, 2018 |

Everything That's Wrong With Roubini's Central Bank Love Letter on Digital Currencies

Whenever Nouriel Roubini talks smack about Bitcoin, it’s hard to know how to respond. Do you ignore “Dr. Doom,” mindful of the mantra to not feed the trolls? Or do you tackle him head on, shooting down his fallacies, but granting the attention he so desperately craves? It’s a conundrum, but in the case of the doc’s provocative new piece, a paean to central bank coins, the only option is to shoot for the heart. Here’s everything that’s wrong with Roubini’s latest brain dump.

Also read: A Brief Introduction to Voluntaryism for Crypto Neophytes

Oops He Did It Again

Everything That's Wrong With Roubini's Central Bank Crypto Love Letter
Nouriel Roubini

Those of us who were raised in the internet trenches, on the sort of forums where trolls like to troll trolls, know that giving attention-whores the oxygen they crave is generally a bad idea. Sometimes, though, your bête noire comes out with something so asinine the only option is to take the bait. From the title alone — “Why Central Bank Digital Currencies Will Destroy Cryptocurrencies” — you can tell that the author of the hit piece is faded economist Nouriel Roubini. You can also tell that at the end of each sentence, the excitable Dr. Doom had to pause to wipe the spittle from his screen.

The career of the Stern School of Business lecturer has been on a downward trajectory ever since BTC was changing hands for 40 bucks. Having been wrong about cryptocurrency for six years straight, Roubini isn’t going to change his tune now. Stubbornness is one of his many attributes. It’s a shame, because if it were only possible to see past his Trumpian bluster, Roubini occasionally has some good points to make.

Our subject begins his tirade by acknowledging that we’re transitioning to a cashless society and explaining that central bank digital currencies (CBDCs) are on the horizon. Up until now, Roubini is on solid ground. Unfortunately, he then ruins it by going full Dr. Doom:

Starry-eyed crypto-fanatics have seized on policymakers’ consideration of CBDCs as proof that even central banks need blockchain or crypto to enter the digital-currency game. This is nonsense. If anything, CBDCs would likely replace all private digital payment systems, regardless of whether they are connected to traditional bank accounts or cryptocurrencies.

Somebody Call a Doctor

As is often the case with Roubini’s unhinged rants, there are grains of truth scattered in there, such as the observation that central banks won’t use conventional blockchains to issue their digital currencies. That much can be safely assumed. But then our protagonist’s argument starts to rapidly unfold with the assertion that “If a CBDC were to be issued, it would immediately displace cryptocurrencies, which are not scalable, cheap, secure, or actually decentralized.”

It’s hard to know where to start with this sentence, which is filled with more logical fallacies and doublethink than the notion that “XRP was gifted to Ripple.” Apparently:

  • CBDCs will “immediately displace” cryptos – citation needed
  • Cryptos are “not cheap” – explanation needed
  • “Not secure” – citation needed
  • “Not actually decentralized” – and CBDCs are?

“Yes. Everyone will love using backdoored central bank digital currencies and no one would ever want to use anything else ever,” read one sarcastic response to Dr. Doom’s word salad.

If you can stomach more sensible chuckles, let’s read on to where Roubini claims “Enthusiasts will argue that cryptocurrencies would remain attractive to those who wish to remain anonymous. But, like private bank deposits today, CBDC transactions could also be made anonymous, with access to account-holder information available, when necessary, only to law-enforcement authorities or regulators, as already happens with private banks.”

Everything That's Wrong With Roubini's Central Bank Crypto Love Letter

Moving on from sensible chuckles to sides leaving orbit, Roubini continues: “By transferring payments from private to central banks, a CBDC-based system would be a boon for financial inclusion. Millions of unbanked people would have access to a near-free, efficient payment system through their cell phones.” Cos, you know, the only thing preventing impoverished Somalis from accessing banking services is the lack of a central bank cryptocurrency. The global financial system totally wants to include the downtrodden; it was just waiting to invent a centralized cryptocurrency before inviting them to the party.

Bitcoin could drop to $ 50 and it would still be a better investment than any CBDC. Whatever happens to central bank digital currencies, they will never displace decentralized cryptocurrencies, just as Roubini will never displace the gnawing pain that tells him he should have bought bitcoin in 2013.

Everything That's Wrong With Roubini's Central Bank Crypto Love Letter
Days without Nouriel Roubini being wrong.

What are your thoughts on Nouriel Roubini’s latest rant? Let us know in the comments section below.


Images courtesy of Shutterstock.


OP-ed disclaimer: This is an Op-ed article. The opinions expressed in this article are the author’s own. Bitcoin.com does not endorse nor support views, opinions or conclusions drawn in this post. 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.

The post Everything That’s Wrong With Roubini’s Central Bank Crypto Love Letter appeared first on Bitcoin News.

Bitcoin News

‘He Lied About Everything’: Killer’s Ex-Girlfriend Speaks Out

November 16, 2018 |

The allegations against Christopher Watts , the Colorado man accused of murdering his pregnant wife and two young daughters, are awful, and one person who believes them is the woman he was dating at the time of the murders. “He’s a liar,” Nichol Kessinger told the Denver Post . “He lied about…
Newser