Here are a few articles on our radar recently covering a broad array of topics.
Anarcho-Capitalist / Libertarian Viewpoints on Crypto
For many of you (myself a long-time Libertarian included) blockchain and cryptocurrency are appealing as a mechanism to wrest at least some control away from Central Banks and governments in general. I remember studying Austrian economic theory in college and thinking, “wow, this makes a ton of sense” so it’s super-exciting to watch rapid and worldwide adoption of such powerful, trustless, decentralized methods of transacting and wealth storage, not to mention the burgeoning decentralized application (DApp) market that will be full steam ahead in coming months and years. This article does a great job of outlining various viewpoints on bitcoin held/stated by prominent neo-classical/free market thinkers. My favorite comment: “Don’t put your trust in democracy, but neither should you trust in a dictatorship. Rather, put your hope into radical political decentralization, not just in India and China, but everywhere.” – Hans-Hermann Hoppe.
IRS / Coinbase Update
As reported by Fortune in March 2017, only 802 Coinbase users reported transactions to the IRS in 2015 (and never more than 893 people reported activity between 2013-2015. As a result (and because the IRS considers cryptocurrencies property for tax purposes), the IRS filed a lawsuit against Coinbase demanding detailed information for all taxpayers that used the service between 2013 – 2015. Today, it was announced that the Coinbase has lost its bid to turn over limited information to the IRS. According to a report on The Verge, a “California federal court has ordered Coinbase to turn over identifying records for all users who have bought, sold, sent, or received more than $20,000 through their accounts in a single year between 2013 and 2015. Coinbase estimates that 14,355 users meet the government’s requirements.” Now, the anarcho-capitalists may decry this as a major blow, an undeserved defeat, however we have to keep a couple of things in perspective: a) The IRS issued guidance on the treatment of cryptocurrency in 2014. Is it reasonable to expect that the IRS is going to stand by and allow thousands of people to be in non-compliance, especially as crypto acceptance grows? 2) While no one likes the IRS or paying taxes, this type of activity further legitimizes crypto as mainstream; and 3) let’s NOT forget that in July of this year, the IRS significantly scaled back its request of Coinbase! Originally it had requested information on all users. The recent covers only those that transacted $20,000 or more; and 4) according to Coinbase.com, “the government’s own lawyers noted at the hearing that the IRS is not accustomed to having to fight for records in this context, and most companies just turn records over without going to court. Thanks to Coinbase’s efforts, more than 480,000 customers’ records were preserved from disclosure.”
What’s DAppening? – ETH Decentralized Applications
So you’ve read about decentralized apps being built and secured on the Ethereum blockchain. Cool, right? But where/what are they? The website https://www.stateofthedapps.com lists 854 Ethereum decentralized apps. As a DApp developer on Reddit recently noted, “we are now at the dawn of a new era of Ethereum’s growth. The first wave of long-awaited applications recently launched or are about to come online. This marks the transition from speculative utility to genuine utility and will begin the realisation of Ethereum’s vision.” (Source: Reddit.com)
While we have not visited all of the sites and are not making any recommendations of these services, here is a sample of same DApps to understand the variety in use:
Ethlance – Blockchain-based freelance hiring platform (https://ethlance.com/)
Uhub – Blockchain ecommerce application (https://uhub.io/)
Firstblood.io – egaming platform (https://firstblood.io/#/home)
Bitnation – The anarchos will love this one! According to their white paper, “The Pangea Software is a Decentralized Opt-In Jurisdiction where Citizens can conduct peer-to-peer arbitration and create Nations.” (https://tse.bitnation.co/)
Ethereum seemed unstoppable until yesterday. After spiking to $515, sellers rushed in and took (likely massive) gains, driving ETH near to $400. According to ETHNews, ETH/USD failed to hold $450/460, which was an important support line. The analysis notes that holding above $400 is “crucial”. At the time of this post ETH/USD was $436 (Source: CoinMarketCap.com). Cryptocurrency is volatile and these meteoric rises and gains are not for the faint of heart. Undoubtedly, we will see rises and falls of this scale and more over the coming months and years. Keep in mind that ETH has risen 5,000% over the past year. According to CryptoCoinsNews.com “Several analysts including Willy Woo of WooBull noted that the drop or the correction could have been much larger, given the exponential growth of leading cryptocurrencies like Ethereum, Bitcoin Cash, bitcoin, and Litecoin over the past few months. Major price corrections allow the market to stabilize and prepare for stronger rallies in the mid-term. It would be considered worrying if cryptocurrencies continue to increase rapidly in value without corrections on several occasions. Price corrections enable cryptocurrencies to establish healthier uptrends and the market to become more stable in the short to mid-term.” (Souce: CryptoCoinsNews.com)
Max Keiser posted an interesting chart:
1. This is what a paradigm shift looks like. 2. The $USD is in a bubble, not #Bitcoin. 3. Gold can’t break out until Bitcoin clears a path by annihilating crooked billion bank’s naked shorts. pic.twitter.com/udHUkuh2jR
— Max Keiser (@maxkeiser) November 30, 2017