A quick 3min read about today's crypto news!
Reports from Chinese provincial law enforcement agencies appear to show that crypto crime is still on the up – despite a nationwide crackdown on crypto and mining exacted in September this year.
According to Xinmin, counterfeit currency-related crime is “declining significantly” in Shanghai, per officials speaking at a Songjiang Procuratorate press conference. However, the procuratorate claimed that criminal cases where perpetrators “make use of virtual currency as a criminal tool” are on the rise, incorporating new types of fraud and “causing larger losses to citizens.”
The procuratorate stated that all but one of the cases its currency fraud-related crimes unit had handled thus far this year had been linked to crypto in some form. It also gave details of a criminal case centering around an individual surnamed Song, the operator of what ostensibly appeared to be a thriving, medium-sized crypto exchange.
The “exchange,” the body continued, claimed to give customers the chance to buy bitcoin (BTC), ethereum (ETH) and major altcoins – but the exchange was merely a front for an elaborate scam that saw Song accrue over USD 103,000 worth of “illegal profits.” All “transactions” made on the platform, the body explained, were fabricated and fraudulent. Song and five others were charged with fraud, convicted and jailed for up to 10 years.
Another “similar” case, saw fraudsters raise over USD 156,000 from victims who thought they were making crypto investments.
Despite a crackdown that Chinese authorities hoped would push crypto to the very fringes of society, media outlets have continued to report cases of crypto-related fraud rings since September. Although this may be part of an effort to cast crypto in a distinctly negative light (something Beijing has been keen to do ever since it first formulated its digital yuan plans), it also suggests that a taste for crypto is still alive and well in the Middle Kingdom.
Multiple East Asian crypto experts have told Cryptonews.com on condition of anonymity that bitcoin and altcoin traders in China are still using USD-pegged stablecoins, overseas exchanges and over-the-counter brokers to carry out transactions – following a freeze-out from domestic banks.
And other parts of the country are continuing to wage war on crypto. The Agricultural Development Bank of China’s Jinggangshan, Jiangxi Province, regional headquarters has launched a “crypto awareness” publicity campaign – featuring slogans such as: “Stay away from virtual currency, protect the safety of your funds.”
Such slogans flash up on LED display units in bank branches.
The bank has also created a crypto “consultation” help desk – apparently another source of anti-crypto messaging. Per JX News, the bank will also seek to warn customers and city residents of the dangers of crypto via WeChat and social media channels.
Elsewhere, China CITIC Bank – China’s seventh-largest lender, has also warned against the risks of crypto-related investments. Per the media outlet 66WZ, the bank included the dangers of investing in bogus “virtual currency and blockchain technology”-related projects in a list of nine scams to steer clear of.
Away from Mainland China, crypto fraud appears to be on the rise in other parts of Asia.
In Taiwan, CNews (via Yahoo) reported that a woman aged “around 50” was lured into making what she believed was a crypto investment by an individual posing as a former classmate.
The fraudster also appears to have pulled off a similar scam with a woman in her twenties, convincing the women to buy crypto and invest their funds on what they thought was an above-board crypto exchange or brokerage – before making off with their tokens.
– Tech Crackdown Hasn’t Halted Chinese Firms’ Blockchain R&D Progress
– China’s Blockchain Investment Growth Is Slowing Down
NFTs and DeFi overturn a banker's generational curse of poverty in 2 years – Cointelegraph
Here's Why I Still Won't Buy Bitcoin, and You Shouldn't, Either – The Motley Fool
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In less than a week, investors can pop the champagne corks and celebrate another successful year. Through Dec. 22, the widely followed S&P 500 was higher by 25%, which more than doubles up its average annual total return of around 11%, including dividends, since the beginning of 1980.
But it’s the cryptocurrency space that’s delivered the juiciest gains of all. Since the year began, the aggregate value of all digital currencies came close to tripling. Not surprisingly, Bitcoin (CRYPTO:BTC) has been one of the biggest contributors to this nominal value increase, with a year-to-date gain of 67%. It accounts for 40.5% of the entire $2.27 trillion cryptocurrency market.
Image source: Getty Images.
Bitcoin’s gains, which recently reached as high as 8,000,000,000% from where it began trading in early July 2010, have come on the heels of numerous catalysts.
To begin with, Bitcoin’s first-mover advantage has made it the most-popular cryptocurrency with retailers. As of late 2020, small-business financing platform Fundera estimated that 15,174 businesses worldwide accepted Bitcoin as payment — and this figure has assuredly grown since.
To build on the above point, Bitcoin was also recognized by El Salvador as legal tender in September. It’s the first country to allow Bitcoin to be used as accepted currency, and could pave a path for other nations to follow.
The world’s most valuable digital currency has benefited from rapidly rising inflation in the U.S. and abroad as well. Since Bitcoin has a perceived cap of 21 million tokens, it’s viewed as an inflationary hedge against a rapidly growing U.S. money supply and price hikes. In November, the Consumer Price Index for All Urban Consumers jumped 6.8% in the U.S., marking the biggest year-over-year jump in 39 years.
Investors look to be clearly excited about the upgrade potential for Bitcoin, too. In November, the long-awaited Taproot upgrade took effect. Taproot allows for smart-contract transactions to occur on the network, which opens the door for a broader use of the Bitcoin blockchain. Smart contracts are protocols that help to verify, enforce, and facilitate a contract between two parties.
Lastly, even the fear of missing out (or FOMO) has played a role. After watching Bitcoin gain 8 billion percent, crypto investors appear to be more than willing to overlook any threat of a reversion.
Image source: Getty Images.
Although Bitcoin has proved me wrong over the past year, I still wouldn’t buy the most-popular digital currency on the planet with free money — and I’d suggest others avoid it, too. Below are some of the reasons I simply can’t buy into the hype surrounding Bitcoin.
For starters, it isn’t the scarce token it’s made out to be. Take gold as a comparison. Since we can’t use alchemy to make any additional gold, what remains in the ground and what’s been already mined is all there will ever be. In terms of physical scarcity, that’s a true line in the sand. As for Bitcoin, lines of code are what limit its “cap” of 21 million coins. Even though consensus is unlikely to increase the number of outstanding tokens above 21 million, it’s not impossible that it happens. Thus, Bitcoin only offers the perception of scarcity and not true scarcity.
Another big issue for Bitcoin is dilution. But I’m not talking about the modest coin inflation that comes with cryptocurrency mining. Rather, I’m alluding to Bitcoin being a first-generation blockchain network that’s being left in the dust by third-generation blockchain innovation. There’s absolutely no reason for Bitcoin to be worth $913 billion when blockchain projects at a fraction of its value can scale better, process faster, and handle far more complex transactions. Bitcoin may be benefiting from a first-mover advantage, but the first to the foray is rarely the victor.
Image source: Getty Images.
History provides yet another reason I want nothing to do with Bitcoin. Major price swings are somewhat commonplace in the crypto space, and reversions following huge gains happen often. Bitcoin was up 8 billion percent at one point since July 2010 and has yet to demonstrate that it truly has staying power. Since it’s been unable to decouple from the stock market, I would be betting on a significant reversion following its pandemic-low bounce.
To build on this previous point, there now are considerably more avenues to bet against Bitcoin than there have ever been. The rise of Bitcoin-focused exchange-traded funds and Bitcoin futures offers a safer way for big-money players to bet on downside in the world’s most-popular crypto. In other words, Bitcoin becoming more mainstream as an investment will hurt more than help.
And finally, history also tells us that investors have a really poor track record of estimating the adoption of next-big-thing technologies. Looking back on the internet, business-to-business commerce, genomics, 3D printing, and so many next-big-thing advancements reveals that their adoption took far longer than expected. This isn’t to say that blockchain can’t become a mainstream technology in payment and nonfinancial applications at some point in the future. But it’s important to recognize that businesses aren’t willing to jump at the chance to use blockchain until it’s been thoroughly vetted in the real world. We’re just not anywhere close to that yet.
There are plenty of cryptocurrency projects that are really intriguing and could change the course of payment processing or supply chain management. Bitcoin just isn’t one of them.
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Media in the Metaverse: NYT's Kevin Roose on the Future of Crypto – Coindesk
Entering the metaverse as our new “online selves.”
Michael J. Casey
This episode is sponsored by Quantstamp and Nexo.io.
“I don’t think we should feel like this is going to be entirely a good thing … if Web 3 is becoming more like the offline world, in the sense of being exclusive and gate-kept in the ways that our physical world has been for so long.”
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Web 3, the metaverse and non-fungible tokens (NFTs) have potential to be a force for good in the world, to improve decentralization, raise underrepresented voices and empower creators. But with a digital land grab for virtual real estate growing fast, will people soon find themselves locked out of the metaverse?
Joining “Money Reimagined” hosts Michael Casey and Sheila Warren is Kevin Roose, New York Times tech columnist and author of “Futureproof,” a cautiously optimistic look into an automated, AI-filled and algorithmically driven future. Roose has also delved into the world of crypto: In March of 2021, he wrote a column explaining NFTs, and then sold that column as an NFT for 350 ETH ($1.14 million at current prices).
The future is rapidly approaching, and the crypto industry is determined to establish its place in it. Web 3 is shaping up in opposition to the current Web 2, moving away from the centralized, data-driven approach of today’s internet. Alongside Web 3 is the metaverse, where individuals can fragment themselves into two parts: their physical self and their digital persona.
Before Web 3 and the metaverse take hold, important discussions should be had now about the opportunities and obstacles abound in a crypto future. What is the role of media in Web 3? What responsibilities do journalists in the crypto sector have today? Is it possible to remain hopeful and yet cautious of crypto’s role in shaping the coming years?
See also: Who Writes the Story of the Metaverse
This episode was produced and edited by Michele Musso with announcements by Adam B. Levine and additional production support by Eleanor Pahl. Our theme song is “Shepard.”
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
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