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| October 22, 2018

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Asian stocks slump after losses on Wall Street

October 11, 2018 |

Asian markets were broadly lower Thursday after Wall Street slumped on a heavy selling of technology and internet stocks.

Japan’s benchmark fell by an unusually wide margin of 3.9 percent, and China’s main index lost 4.3 percent. Markets in Hong Kong, South Korea, Australia and Southeast Asia recorded…

L.A. Times – Business

A Bitcoin Rat Is Occupying Wall Street

October 11, 2018 |

A Bitcoin Rat Is Occupying Wall Street

Ten years after the financial crisis of 2008, an artist known as Nelson Saiers has placed his latest artwork across the street from the New York Federal Reserve building in the financial district. The piece is a giant sized and menacing-looking inflatable rat covered in Bitcoin code. The former Wall Street hedge fund manager and mathematician dedicates most of his time these days to his artisan loft where he produces visuals depicting the broken financial system.

Also read: Bitcoin Graffiti: How the Economic Revolution Has Painted the Streets

A Visual Perspective of Finance and Art

A Bitcoin Rat Is Occupying Wall Street
Nelson Saiers giant-sized inflatable rat is covered in bitcoin code and is looking directly at the New York Federal Reserve.

There’s some new street art located across the street from the New York Federal Reserve building that’s been causing some attention. A tall balloon-like white rat covered in bitcoin code is tied to the ground looking like it’s about to attack the structure. Nelson Saiers devotes his energy to artistic pieces that shine a light on the traditional finance system we deal with today. Saiers financial artwork has made headlines over the years after he left his trading position in 2014. 

The 8 ft white rat covered in Bitcoin code staged across the street from the central banker’s lair represents an interesting time in history, because it is ten years after the 2008 financial crisis. Additionally, Oct. 31, 2018, marks the tenth anniversary of the Bitcoin white paper published by Satoshi Nakamoto. The inflatable white rat’s creator, who is also known as the “Warhol of Wall Street,” explained in an interview on Oct. 9 with Shreyas Chari his latest artwork does give a representation of these anniversary dates.  

“So this piece is slightly different from the inflatable rats you see around the city. It’s loaded with Bitcoin code and a couple related equations,” explained Saiers during the interview.

Saiers adds:  

About ten years ago, while TARP was bailing out the economy, Satoshi Nakamoto wrote this code along with the words; ‘03 Jan 2009 The Times, Chancellor on brink of second bailout for banks,’ referencing the equivalent in England — Satoshi seemed pretty opposed to centralization and said it was doomed in the end. I wanted to be true to his views and reflect this in the artwork.

The Infestation of Sewer Rats

Over the last two decades, street art depicting the world’s financial inequalities has become a significant movement globally. The prominent and controversial street artist Banksy has brought the art-form to a new height and the use of rats can be seen on lots of walls covered in graffiti throughout the past two decades.

A Bitcoin Rat Is Occupying Wall Street
The rat has been used in financial street art for two decades and has been popularized by the anonymous artist Banksy. Andreas Antonopoulos has also referred to Bitcoin as a “sewer rat.” 

Banksy himself said the rat is something to look up to because these animals do whatever they want. “If you feel dirty, insignificant or unloved, then rats are a good role model. They exist without permission, they have no respect for the hierarchy of society,” the artist explains in his writings. The innovation of cryptocurrency itself has been depicted as an uncaring ‘honey badger of money’ or anarchistic street rat many times over the years.  

In 2016 the computer scientist Andreas Antonopoulos referred to the Bitcoin protocol as a “sewer rat of currencies.”       

“Bitcoin isn’t living in a bubble — Bitcoin is a sewer rat,” Antonopoulos detailed during his speech. “It’s missing a leg. Its snout was badly mangled in an accident last year. It’s not allergic to anything — In fact, it’s probably got a couple of strains of bubonic plague on it which it treats like a common cold. You have a system that is antifragile and dynamic and robust.”

Bitcoin Street Art Isn’t Going Away Anytime Soon

Over the last two years or so Bitcoin and street art have melded together and many artists have been using the cryptocurrency for symbolism on walls. In Paris, France there’s an artist named Pascal Boyart aka “Pboy,” who leaves his cryptocurrency themed art and QR code on buildings throughout the city. The artist Cryptograffiti has made a name for himself as he spreads his Bitcoin-infused art across various cities within the US.

A Bitcoin Rat Is Occupying Wall Street
Bitcoin street art by Pascal Boyart aka ‘Pboy.’

Saiers latest artwork and the many other artists located around the world shows there’s a growing trend of mixing visually entertaining financial and political symbolism with cryptocurrencies. The artist’s Bitcoin rat, however, is not permanent and Saiers has plans to remove the inflatable after the display.

What do you think about the Bitcoin Rat street art placed across the street from the New York Federal Reserve? Let us know what you think about this subject in the comment section below.

Images via Twitter, Pixabay, and Pboy.

Prove ownership on the Bitcoin Cash Blockchain for only 0.0005 BCH. Using the Notary.  

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Bitcoin Price: Wall Street Optimistic, Enthusiasts Pessimistic According to Fundstrat

October 7, 2018 |

Bitcoin Price: Wall Street Optimistic, Enthusiasts Pessimistic According to Fundstrat

44 percent of those surveyed on crypto Twitter believe the price of bitcoin core (BTC) has a ways to go before finding bottom, while over half of Wall Street and institutional investors seem to believe BTC’s bottom has been reached. The poll was conducted by Fundstrat, comparing the views comprised of 25 Wall Street related institutions against those of 9,500 respondents on Twitter.

Also read: Hong Kong-Based Crypto Exchange Coinex Pays Interest in BCH

Bitcoin Price: Wall Street Optimistic, Enthusiasts Pessimistic According to Fundstrat

Fundstrat: Wall Street is Optimistic While the Ecosystem Remains Sour on BTC’s Price

Over the period of a week in late September of this year, Fundstrat conducted a poll between institutional or Wall Street investors and Twitter respondents, who might be considered the broader spectrum of crypto enthusiasts. While not particularly scientific in the strictest sense, and therefore can be interpreted a number of ways, it does provide some counter-intuitive data.

What jumps out to most keen observers of the space is the conclusion Wall Street is more optimistic about BTC prices than crypto Twitter. Fundstrat found 54 percent of Wall Street respondents were fairly sure the world’s most popular cryptocurrency has hit its price bottom. Crypto Twitter, however, over 9,000 strong, was decidedly less hopeful: only 44 percent felt BTC was at bottom, suggesting there might be a ways to go yet. And by the end of 2019, institutions were more likely to predict BTC hitting $ 15,000 (57%) compared to just 40% crypto Twitter’s respondents.

Bitcoin Price: Wall Street Optimistic, Enthusiasts Pessimistic According to Fundstrat

Central Banks and Emerging Markets Are Macro Factors Impacting Future of Crypto 

25 institutions received ten questions, while Twitter got a version of those whittled down to just six, eliciting 9,500 responses. More obvious takeaways include how both genres polled agreed ‘macro factors’ impacting crypto going forward are central banks and emerging markets, which ranked 1 and 2 respectively. Institutions, however, view politics as having a greater impact compared to their crypto Twitter counterparts.

Alternative token ripple (XRP) made an appearance within the poll. Of more than a dozen choices offered, nearly six out of ten institutions chose BTC as their favorite. Crypto Twitter picked XRP as their favorite (46%). Curiously, though chosen as its preferred coin, 31 percent of Twitter believes XRP makes the “least sense” of any crypto. No institution chose XRP as their favorite.

Bitcoin Price: Wall Street Optimistic, Enthusiasts Pessimistic According to Fundstrat

Other findings of interest include how institutions polled were decidedly bullish on BTC’s price rising, with 57 percent believing it will be between at least $ 15,000 to “the moon” by next year’s end. And should the US economy fall to recession, only 59% of crypto Twitter believed cryptocurrency prices would rise, while institutions remain more optimistic with 72% answering crypto could very well increase in price during economic down times.

Are you optimistic about BTC’s price? Let us know in the comments below. 

Images courtesy of Shutterstock, Fundstrat. 

At there’s a bunch of free helpful services. For instance, have you seen our Tools page? You can even look up the exchange rate for a transaction in the past. Or calculate the value of your current holdings. Or create a paper wallet. And much more.

The post Bitcoin Price: Wall Street Optimistic, Enthusiasts Pessimistic According to Fundstrat appeared first on Bitcoin News.

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The Daily: Wall Street-Backed Crypto Futures, Market Manipulation as a Service

October 4, 2018 |

The Daily: Wall Street-Backed Crypto Futures, Market Manipulation as a Service

Cryptocurrency attracts a diverse crowd, from speculators to scammers, and from financiers to gamblers. These groups, and their often opposing aims, are what make the cryptoconomy such a strange yet compelling place. In today’s edition of The Daily, for instance, we’ve got stories pertaining to a Wall Street-funded futures exchange, another US platform ending its margin trading, a company that will trade your token to simulate demand for it, and an obligatory new stablecoin.

Also read: Six of the Best Cryptocurrency Calendars

Wall Street-Backed Crypto Exchange Erisx Announced

The Daily: Wall Street-Backed Crypto Futures, Market Manipulation as a ServiceNebraska-based brokerage firm TD Ameritrade is making a move into the cryptocurrency exchange game with a little help from its Wall Street friends. The brokerage big shot revealed Erisx on Wednesday, the name for the platform being spearheaded by trading veteran Thomas Chippas. Regulatory approval is being sought to list bitcoin core, bitcoin cash, ether, and litecoin futures. Chippas left his job at Citigroup to head up the project, a trend that’s been observed repeatedly in the cryptocurrency space, with traditional financiers being lured into the realm of crypto by the promise of a fresh challenge and potentially big payday.

Having closed a fundraising round backed by DRW and Virtu Financial, in addition to TD Ameritrade, the venture has attracted attention, fueled by its intention to position itself as a direct rival to Bakkt, the forthcoming cryptocurrency platform from the NYSE’s parent company. Erisx will begin by offering spot trading for cryptocurrencies before venturing into derivatives, all going well. It should be noted, however, that the “new” exchange is in fact a revamp of Eris Exchange, a derivatives platform that has failed to achieve anything of note in its eight years of operation.

Circle Drops Margin Trading

Circle Enters the Stablecoin Races With USDCWhile one US exchange is dreaming of derivatives, another is shunning them. The Circle-backed Poloniex exchange has revealed that it is removing margin and lending products for its US customers. “These changes are part of our ongoing commitment to ensure that Poloniex complies with regulatory requirements in every jurisdiction,” explained Circle. In the same announcement, it was revealed that three assets will be delisted from Poloniex on October 10: AMP, EXP, and, perhaps surprisingly, gnosis (GNO).

Market Making as a Service

“What is the biggest trouble for every ICO?” asks Tokenboost. No, the answer isn’t creating a token that has genuine utility, developing a vibrant community, or devising a sound business strategy. The biggest problem, apparently, is getting listed on Coinmarketcap (CMC). That’s right: the holy grail for ICOs, apparently, is to have their token listed on a market tracker website. According to Tokenboost, CMC mandates at least $ 100k of daily trading volume before it will list a coin (though a quick check shows this claim to be inaccurate).

The Daily: Wall Street-Backed Crypto Futures, Market Manipulation as a Service

Tokenboost’s solution to this problem is to engage in market making on behalf of projects – or wash trading as some might call it. “We can take your token to the top,” they boast. “High volumes and listing on Coinmarketcap make your project more noticeable and trustworthy, attracting more partners, investors and traders. This will create a higher demand for the token and drive its price up.” At least they’re honest.

Ho Wah Genting Group Enters the Stablecoin Game

The Daily: Wall Street-Backed Crypto Futures, Market Manipulation as a ServiceScarcely a day goes by without a business announcing its intentions to issue a stablecoin. Ho Wah Genting Group (HWGG), an investment holding company focused on entertainment gaming, is to issue a fiat-backed stablecoin. HWG Cash will be pegged to $ 500 million in bank deposits and used to facilitate transactions within its entertainment business. Based on the Everitoken blockchain, the $ 1 coins will be exchangeable for fiat in Malaysia, where HWGG has a money broker license, and will also be accepted at a range of partner businesses including travel, retail, and cruise services.

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.

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

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Shapeshift CEO Responds to Wall Street Journal Laundering Claims

October 2, 2018 |

Shapeshift CEO Responds to Wall Street Journal Laundering Claims

Reporters at the Wall Street Journal (WSJ) tied innovative ecosystem cryptocurrency exchange Shapeshift to money laundering. “How Dirty Money Disappears Into the Black Hole of Cryptocurrency,” was its published product from months of investigative journalism. The company’s CEO, Erik Voorhees, claims cooperation with the WSJ was obtained “under false pretenses.” He also charges the WSJ “omitted relevant information” among other gaffs. 

Also read: Ross Ulbricht Marks Fifth Anniversary in Prison

Shapeshift CEO Erik Voorhees Calls Wall Street Journal Article an “Attack”

Shapeshift CEO Erik Voorhees earned as much street credibility in the crypto space as anyone. His company has been around for nearly half of the nascent industry’s entire history. If there were a relative outsider/insider of cryptocurrency, an ambassador of sorts for the decentralized digital money revolution, it’s safe to write Mr. Voorhees would make many top ten lists, and Shapeshift is his most notable contribution alongside Bitinstant, Coinapult, and Satoshidice.  

Shapeshift CEO Responds to Wall Street Journal Laundering Claims

“Shining Light on WSJ’s Attack on Shapeshift and Crypto” is Mr. Voorhees attempt to set the record, as he sees it, straight. If legacy finance news organizations of record were to “attack,” they couldn’t really do better than he and Shapeshift. That aside, he and the exchange believe the WSJ produced a pure hit piece, gaining trust over “5 months” only to “omit relevant information,” overlooked the “chance to prevent potential illicit activity,” ultimately proving the reporters “do not have a sufficient understanding of blockchains and our platform in particular,” Mr. Voorhees insists.

It hasn’t exactly been a wonderful public relations month for the veteran firm. As these pages noted at the beginning of September, “Non-custodial crypto trading platform Shapeshift has introduced a membership program which will soon be mandatory [… the] exchange will have to begin collecting basic personal information of its users, and there will be five membership levels.” The move was met with widespread criticism especially among the experienced within the space. To then get even more flack from the institutional side of finance at roughly the same time probably isn’t what the company needed.

Shapeshift CEO Responds to Wall Street Journal Laundering Claims
Graph provided by Shapeshift.

False Pretenses, Omissions, Insufficient Understanding

“The WSJ reporters reached out to us months ago,” Mr. Voorhees details, “asking for friendly assistance on a piece about the crypto industry in general. Over a period of five months, we were open and accommodating of their questions while in contrast they misrepresented their intentions until very recently,” further complaining “they included not a single statement from those lengthy discussions, preferring instead to include out-of-context remarks I’d made elsewhere.” In Mr. Voorhees’ reckoning, the WSJ had another agenda altogether.

For any solid investigative piece to have legs, it requires statistical information for context, breadth. The company CEO takes on the journalists’ usage of basic facts, and worries they either misrepresented their significance or omitted relevant context completely. One claim had to do with $ 9 million being laundered through Shapeshift.

Shapeshift CEO Responds to Wall Street Journal Laundering Claims
Graph provided by Shapeshift.

“$ 9m (even if it was true) is 0.15% of Shapeshift’s exchange volume during the described time period; We have a strong record of complying with law-enforcement requests […]; We work with other exchanges on an almost-daily basis to identify and block thieves and criminals, through a self-policing group Shapeshift created to protect the users and industry; We block entire countries on the sanctions lists; We have an internal anti-money laundering program that uses blockchain forensics that are far more advanced (and we would argue, effective) than asking someone for their ‘name and address;’ We blacklist suspicious addresses upon learning of them,” he outlines. “There is no mention of any of this in the WSJ article.”

Good Journalism Continues Dialog After Publication

Perhaps the most frustrating issue for anyone immersed in crypto is having to explain to mainstream media the basics. If journalists miss those, their accounts and conclusions can be devastating.

“And the WSJ reporters appear to have gotten confused about how our platform functions,” Mr. Voorhees stresses. “Based on our own analysis of the transactions cited in the article, the WSJ erroneously attributed vast sums of allegedly illicit transactions to Shapeshift in a way that exhibits a profound failure to grasp how blockchains, in general, and our system in particular, really work.”

Shapeshift CEO Responds to Wall Street Journal Laundering Claims

He goes on to list three fairly routine examples of how the WSJ allegedly got it wrong, using a $ 600 illustration: “In other words, $ 600 of suspicious funds were sent to an exchange that wasn’t Shapeshift. Because Shapeshift happens to be a customer of this same exchange – 10 months later in a completely unrelated transaction – the exchange sent funds to Shapeshift. The authors didn’t understand how to properly read the blockchain transactions, so they assumed there was $ 70k in ‘dirty money’ sent to Shapeshift. Allegation: $ 70,000 laundered by Shapeshift; Reality: $ 0 laundered by Shapeshift.”

In fairness, good journalism rattles cages, gets to the root, and unnerves those under its microscope. But good journalism also must be held accountable, and authors of investigative pieces have a duty to continue dialog even after publication in order to better allow readers closer proximity to supposed revealed truths. “We’ve found numerous other examples,” Mr. Voorhees complains. “We asked the WSJ to send us the specific transaction ID’s […] As of this writing, the WSJ has been unwilling or unable to send the requested transaction data necessary […].”

What do you think of the WSJ’s claims and Shapeshift’s response? Let us know in the comments section below. 

Images via Pixabay, Shapeshift. 

Be sure to check out the podcast Blockchain 2025, latest episode here. Want to create your own secure cold storage paper wallet? Check our tools section.

The post Shapeshift CEO Responds to Wall Street Journal Laundering Claims appeared first on Bitcoin News.

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Stocks End Mixed on Wall Street

October 1, 2018 |

Stocks are ending mixed on Wall Street after an early gain on excitement over a new trade between the US and Canada faded, the AP reports. Larger stocks ended mostly higher Monday, but smaller and mid-sized companies fell. The price of US crude oil closed at a four-year high, which…

Robinhood Responds to Accusations of Favoring Wall Street over Its Users

September 21, 2018 |

Robinhood Responds to Accusations of Favoring Wall Street Over its Users

Seeking Alpha has published an exposé by Logan Kane regarding free stock and crypto trading smartphone application Robinhood. Mr. Kane alleges the company “takes from the millennial and gives to the high-frequency trader” by accepting payment for order flow and selling order data for “over ten times as much as other brokers who engage in the practice.” Robinhood reached out to in response, explaining and defending its practices.

Also read: US Exchange Takes a Step Toward Crypto: Nasdaq Bids for Cinnober

Robinhood Explains Its Business Model and Practices

Known as “best execution,” a licensed brokerage must “execute customer orders at the best available price across every regional and national stock exchange (national best bid and offer, or NBBO),” a statement by Robinhood began in response to an article published in these pages only days ago. The company, “like the rest of the industry, participates in rebate programs which help customers get additional price improvement for their orders by creating competition amongst the exchanges and liquidity providers who fill the orders, often resulting in superior execution quality. Any rebates Robinhood receives do not adversely impact this best execution obligation.”

Since Embracing Bitcoin, Robinhood App Value Jumps to $  5.6 Billion

Mr. Kane rifled through US Securities and Exchange filings from the company, and came to the conclusion “high-frequency trading firms are paying Robinhood over 10 times as much as they pay to other discount brokerages for the same volume,” we reported. He insisted, “Robinhood takes from the millennial and gives to the high-frequency trader,” and “they appear to be selling their customers’ orders for over ten times as much as other brokers who engage in the practice. It’s a conflict of interest and is bad for you as a customer.”

In response, the company explained how it, “unlike many other brokerages, has established the same payment rate (listed in SEC Rule 606 disclosure) with its leading execution venues. This eliminates any incentive to direct orders to a certain execution venue. Robinhood algorithmically routes orders to a variety of different execution venues based on which is most likely to provide the greatest execution quality and price improvement on that order in addition to the NBBO. No other factors impact where customer orders are routed.” The statement continued:

Robinhood is committed to providing the best possible execution quality to its customers regardless of whether they place an order of a single share or one with more than 10,000 shares.

Robinhood Crypto App Adds Bitcoin Cash and Litecoin Trading

Robinhood Denies Selling Customer Data

Asked why it prefers per dollar value over per share reporting, the company referenced its business model of zero-commission trading, citing “being able to invest in securities that cost less than $ 20 per share, such as Chesapeake Energy, Sprint, and Ford. Traditional per-share rebates do not make sense for Robinhood’s executing venues since the number of shares Robinhood’s customers transact per dollar is higher than on other platforms. Robinhood generates less revenue with the rebate program structured around value of transaction than if it were structured around shares.”

Responding to the charge of the firm selling personal identifiable data, the company flat out denied the allegation altogether. “Does Robinhood sell personally identifiable data of any kind to execution venues? No. Robinhood takes the privacy and security of their customers extremely seriously. Robinhood does not, has not, and will not sell customer information.”

Do you have a problem with what Robinhood is reportedly doing? Let us know in the comments below. 

Images courtesy of Shutterstock.

At there’s a bunch of free helpful services. For instance, have you seen our Tools page? You can even look up the exchange rate for a transaction in the past. Or calculate the value of your current holdings. Or create a paper wallet. And much more.

The post Robinhood Responds to Accusations of Favoring Wall Street over Its Users appeared first on Bitcoin News.

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Report: Trump Urged Spain to Build Wall Across Sahara

September 20, 2018 |

Spain’s foreign minister says President Trump offered the Spanish government some very Trumpian advice on dealing with an influx of cross-Mediterranean migrants. Josep Borrell says the president suggested building a wall across the Sahara desert, even though only two small enclaves in the region are Spanish territory, the Telegraph . Borrell,…

A Decade After Lehman Brothers Died: Mises, Satoshi, Bitcoin, and Wall Street Worship

September 15, 2018 |

A Decade After Lehman Brothers is Defunct: Mises, Satoshi, Bitcoin, and Wall Street Worship

September 15, 2018 brings the post-industrial financial world to a ten-year milestone. Lehman Brothers Holdings Inc. was officially shuttered on this day in 2008, rocking the entire planet. The event occurred just 110 days before a revolution its collapse helped to spawn: Bitcoin. A little-known economic philosopher, Ludwig von Mises, tried to warn many years ahead about the perils of allowing politicians to issue and steer money.

Also read: Overstock to Offer Bitcoin for Sale After Acquiring Biometric Wallet

Mises Warns Fifty Years Prior

Investment banks successfully captured levers of government regulation, both sectors preying upon the need for housing, and together they created a moral hazard, leading to what is known as malinvestment, as predicted by a cranky, marginalized mid 20th century economist, Ludwig von Mises.

This is what happens when governments control money.

The phenomenon may have also helped hasten Satoshi Nakamoto’s white paper to be made flesh, as in early January of the following year, the Bitcoin network mined its first block. While the cryptocurrency phenomenon was founded in direct opposition to Wall Street and its finance system, what a difference ten years has made. Almost all happy talk the community engages in at present can be categorized as Wall Street worship: crypto enthusiasts now work to be absorbed into the very system predecessors once despised.

A Decade After Lehman Brothers is Defunct: Mises, Satoshi, Bitcoin, and Wall Street Worship
The genesis block’s not so subtle encoded shot at legacy finance.

Known as the Dean of the Austrian School of Economics, Ludwig von Mises (1881-1973) wrote in his magnum opus Human Action, “A lowering of the gross market rate of interest as brought about by credit expansion always has the effect of making some projects appear profitable which did not appear so before…It necessarily brings about a structure of investment and production activities which is at variance with the real supply of capital goods and must finally collapse.”

And by September 15th, 2008, ten years ago to the day, Misesean analysis worked its unforgiving way through Lehman Brothers investment bank, giving to dreary picturesque scenes of employees carting their belongings out of a shuttered building. The pre-Civil War American institution, fourth largest of its kind in the US, was under Chapter 11 liquidation bankruptcy orders. Not even the federal government could help it. When the dust finally settled, the bank was broken up between financial ghouls, vultures such as Barclays (itself over three centuries old) of the UK and Japan’s Nomura Holdings Inc. (the baby of the group at slightly less than 100 years), for pennies on the dollar.

A Decade After Lehman Brothers is Defunct: Mises, Satoshi, Bitcoin, and Wall Street Worship
Indexes during a six-month period on Lehman’s bankruptcy. Within two weeks both set new all-time highs. Trust that binds financial institutions collapsed, and critical funding markets came to a virtual standstill. The amount of fear paralyzing markets was unprecedented. 

The Romance of Easy Credit, Loose Money

To pound home the point further still, and it’s worth quoting at length, Mises argues a half century before history reveals him as an economic sage, “However conditions may be, it is certain that no manipulations of the banks can provide the economic system with capital goods. What is needed for a sound expansion of production is additional capital goods, not money or fiduciary media. The boom is built on the sands of banknotes and deposits. It must collapse.”

Lehman, to be fair, was more a broader symptom than true cause. Lehman Weekend, as it became known, was then the largest bankruptcy in its country’s history, testimony to the institution’s influence politically and in the financial world. The 2000s were a culmination of decades-long agitation by American progressives to fit everyone with a house, a home, ownership, and what would amount to a mortgage.

A Decade After Lehman Brothers is Defunct: Mises, Satoshi, Bitcoin, and Wall Street Worship

A romantic idea insured and backed by the imprimatur of the US government, it helps explain just why, why indeed, banks would ultimately loan to folks who could not repay. As a matter of basic logic, one must grant the business of modern fractional reserve banking is to make loans, selling money, and to then profit on the difference in interest rates, a classic model.

That any of those loans, never mind a sizable chunk or even a majority, would be bad or “subprime,” below standard, must have some kind of backdoor guarantee. Someone must signal a willingness to cover markers should they be called. That someone was the US federal government through a variety of exotic insurance and incentive policy programs.

A Decade After Lehman Brothers is Defunct: Mises, Satoshi, Bitcoin, and Wall Street Worship
Footing the bill with unemployment.

Lessons the Current Bitcoin World Would Do Well to Heed

As Mises divined so many years ago, it all starts out really great, helping first movers, those who grab the filthy lucre in the beginning. “The final outcome of the credit expansion is general impoverishment,” he continued in Chapter 20 of Human Action.

“Some people may have increased their wealth; they did not let their reasoning be obfuscated by the mass hysteria, and took advantage in time of the opportunities offered by the mobility of the individual investor. Other individuals and groups of individuals may have been favored, without any initiative of their own, by the mere time lag between the rise in the prices of the goods they sell and those they buy. But the immense majority must foot the bill for the malinvestments and the overconsumption of the boom episode,” he warned.

A Decade After Lehman Brothers is Defunct: Mises, Satoshi, Bitcoin, and Wall Street Worship

“The root problem with conventional currency,” a signed post as Satoshi Nakamoto appeared early February of 2009, echoing Mises of yore, “is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible.”

Governments have simply inflated their way out, potentially setting up yet another bust began by cowardly politicians. It doesn’t help matters when enthusiasts too have lost their philosophical fastball, choosing to snuggle up to Wall Street. One doesn’t need to be an obnoxious, bongo-playing Occupy hippy to guess mainstreaming in such a way could doom the entire point of crypto’s promising future. “I’ve developed a new open source P2P e-cash system called Bitcoin. It’s completely decentralized, with no central server or trusted parties, because everything is based on crypto proof instead of trust. Give it a try,” Satoshi Nakamoto asked almost ten years ago. Today, that casual request reads like a rallying call to arms.

What are the lessons, if any, you believe can be learned from the Lehman scandal? Let us know in the comment section below.

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of The web portal and firm 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. is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any information in this Op-ed article.

Images via Shutterstock.

At there’s a bunch of free helpful services. For instance, have you seen our Tools page? You can even look up the exchange rate for a transaction in the past. Or calculate the value of your current holdings. Or create a paper wallet. And much more.

The post A Decade After Lehman Brothers Died: Mises, Satoshi, Bitcoin, and Wall Street Worship appeared first on Bitcoin News.

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Convicted killer of Kim Wall: Appeal case starts

September 5, 2018 |

Danish submarine inventor Peter Madsen, who was found guilty of the torture, sexual assault, murder and dismemberment of a Swedish reporter, appeared before an appeals court Wednesday to fight against his life sentence.
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