News

Inside the blockchain developer’s mind: Koinos approaches testnet
February 25, 2021 3:23 pm

A return to proof of work mining, a blockchain built to be fork resistant, and the chance to develop in multiple programming languages. Lessons from history — and an eye to the future.

Cointelegraph is following the development of an entirely new blockchain from inception to mainnet and beyond through its series, Inside the Blockchain Developer’s Mind. In Part Four, Andrew Levine of Koinos Group discusses some of the challenges the team has faced since identifying the key issues they intend to solve.

Earlier in this series I outlined three of the “crises” that are holding back blockchain adoption; upgradeability, scalability, and governance.

In this post I will summarize the solutions we’ve developed to these problems, which we will be showcasing in the upcoming Koinos testnet planned for the second quarter of 2021.

Since that series Koinos Group has successfully launched a token, KOIN, as a proof of work mineable token on Ethereum. By using proof of work to distribute the initial token supply we were able make the token accessible to early adopters and forgo an ICO.

Assessing the ICO model

ICOs and similar token sale tools, while not without their use cases, have created their own crisis within the space by misaligning incentives before development even begins. The issue is not with the ICO as a tool, but what happens when a team is financially rewarded before they have even shipped a product.

While so many projects have followed in the footsteps of Bitcoin, it’s surprising how few have replicated arguably the most successful aspect of its launch; a token distribution exclusively through proof of work.

The benefit of this approach is that it ensures with algorithmic certainty that the people behind the blockchain have no advantage in acquiring the token. In short, everyone, no matter who they are, has to make a financial sacrifice in order to acquire that token and the scale of that sacrifice is determined by some neutral third party. In the case of proof of work, that neutral third party is the manufacturer of hardware.

For Koinos Group, that means we had to spend money to acquire our token just like everyone else. In fact, because we have to spend most of our time developing the product, we are even at a disadvantage relative to professional miners. So we have to keep working to add value to the protocol if we’d like to get a return on our investment.

Proof of work algorithms are not without their problems, but we mitigated those in a few ways.

  • First, the mainnet will be governed by a totally different consensus algorithm that won’t be proof of work or proof of stake, so any attempt to develop an ASIC would be a waste of resources.
  • Second, we made the algorithm GPU resistant.
  • Third, we released this token long before releasing our mainnet. In fact, we released the token long before we had even completed development of our framework. Without a functional product, this token becomes a way for people who believe in our team and who share our vision for a fee-less smart contract platform to acquire the token at a reasonable cost.

Rapid rate of improvement

Part of what makes this launch strategy work is the innovative property set of Koinos. We built Koinos totally from scratch, not around any single feature like transactions per second or sharding, but with the goal of creating a blockchain that would improve at a much more rapid rate than any other blockchain out there.

In our experience developing the Steem blockchain, the need to execute hard forks was the single biggest factor holding back progress. If we wanted to eliminate that bottleneck, we reasoned, moving as much of the system code as possible into smart contracts that could be upgraded in-band would do the trick.

That’s why the Koinos blockchain framework contains only the most basic blockchain features (called “thunks”) like contract input/input, getting parameters, and writing to the database. All of the more complex features that people are more familiar with (consensus algorithm, accounts, resource management, governance, etc.) have been moved into modular WASM smart contracts running in the virtual machine that can be upgraded without a hard fork.

Because all behaviors are now coded in distinct “modules” that can be individually “upgraded” we call this feature modular upgradeability.

As a result of modular upgradeability, any behavior can be added to the blockchain without a hard fork because individual upgrades can be distributed in blocks and transactions that are pushed to the network much like an operating system patch, but with the added benefit of an on-chain record of the entire upgrade path.

By moving nearly all of the system code of the blockchain to smart contract modules that can be upgraded without a hard fork we have made Koinos into a blockchain that derives its strength not from the features it is born with, but based on its ability to rapidly acquire new and better features faster than anything else out there.

This is why we call Koinos the first blockchain capable of evolution.

Microservices

Modular upgradeability was just the first major technical innovation that we developed to make Koinos less monolithic and an order of magnitude more upgradeable. Just like there is code that does not need to be implemented natively (in the blockchain itself) but that can be implemented as smart contracts (most of it in fact), there is plenty of code that does not need to be implemented either natively or as smart contracts and can instead be implemented as microservices.

Microservice architectures have many benefits which is why this has become the industry standard for modern software development, but one major benefit is scalability because individual services can be scaled up without having to scale up the entire system. This can dramatically reduce the cost of running a network while improving both the speed and quality of improvements to that network. As a result of historical accidents, blockchain stacks appear to be the last to adopt this new standard as Koinos will be the first blockchain built on a microservice architecture.

This creates amazing new opportunities for developers who will be able to build application specific microservices for Koinos that will help them run their nodes, and their applications, more efficiently; and as a consequence deliver better user experiences. Best of all, this will make Koinos node operation more accessible, thereby improving decentralization, and enabling the network as a whole to run more efficiently so that developers and their end-users can get more out of their decentralized applications.

Multi-language support

Another benefit of a microservice architecture is that individual microservices (basically small programs) can be written in the best (fastest, most secure, best libraries, etc.) programming language for the job, a capability we also wanted to offer for smart contract developers. But in order to take advantage of this trait we needed to develop a way for these small programs written in different languages to “talk” to one another in a way that conformed to the unique needs of a decentralized network. To solve this problem we created a cross-language serialization framework named Koinos Types.

Koinos Types is like the Rosetta Stone for blockchain data structures. It allows programs written in different languages to talk to one another in a simple and unified way by giving them access to the same objects (the “building blocks” of modern programming languages). Koinos Types allows for the interpretation of Koinos (i.e. blockchain) data structures in practically any programming language which will be extremely useful for the development of blockchain-related microservices, clients, and smart contracts.

Koinos Types solves a number of problems. It helps us add multi-language support to Koinos more generally (including for smart contracts), it enables microservices to communicate with one another, and it makes it far easier to develop and update client-libraries. While modular upgradeability and the microservices architecture alone make Koinos far more upgradeable than any other blockchain, Koinos Types takes that upgradeability to another level. That’s why we were so excited to make Koinos Types the first piece of Koinos that we open sourced.

As you can see, ensuring that Koinos can improve at a more rapid rate than any other blockchain isn’t about any one feature.

  • It’s about getting the incentives right from the beginning.
  • It’s about ensuring that the blockchain has modular upgradeability.
  • It’s about modularizing the very architecture itself as microservices.
  • And it’s about making sure that developers operating at every level of the stack (not just smart contracts) are able to use the programming languages they already know and love.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Andrew Levine is the CEO of Koinos Group, where he and the former development team behind the Steem blockchain build blockchain-based solutions that empower people to take ownership and control over their digital selves. Their foundational product is Koinos, a high-performance blockchain built on an entirely new framework architected to give developers the features they need in order to deliver the user experiences necessary to spread blockchain adoption to the masses.
Soaring Treasury yields are worrying economists — But what does this mean for Bitcoin?
February 25, 2021 3:00 pm

The price of gold has also been stagnating, but this isn't necessarily bad for "digital gold" Bitcoin.

This week's correction in the price of Bitcoin (BTC) showed that a market doesn’t go up in a straight line. Meanwhile, another topic has been gaining attention, namely the big rise in the 10-year yields of United States government bonds. 

In recent weeks, the 10-year Treasury yield of U.S. government bonds has surged 35% to a new high of 1.44%, the highest point since the cross-asset crash in March 2020.

Treasury yield bounces from a 60-year low

U.S. 10-year yield 1-week candle chart. Source: TradingView

The 10-year Treasury yield has been accelerating massively in recent weeks, similar to the run-up to the economic downturns in 2000 and 2008. Hence, rising yields are typically considered a signal of weakness for the economy and can have a big impact across many markets.

As the yields increase, governments must pay more for their underlying government bonds. This combined with the current economic conditions of the post-COVID-19 era and record national debt are factors that are unsurprisingly worrying economists. 

However, looking at the chart above from a technical perspective, this entire run can still be considered as a simple bearish retest of the previous support level.

Such an example is shown by the previous attempt to test the resistance above. This could be happening here as well, where the rates will then drop back down from the 1.53% level. But it is important to keep an eye on this level because breaking through it can have a major impact on the markets.

The government bond yields also have an impact on mortgage markets. Given that the real estate market is massively overheated at the moment, with people taking on massive debt to purchase homes, an increase in interest rates could pop this entire bubble, similar to what happened in 2008.

However, yields also impact other markets, as gold often reacts to these moves as well. But is this time different? And how will Bitcoin respond to these potential macroeconomic shocks?

A weakening dollar vs. Bitcoin

U.S. dollar currency index 3-day chart. Source: TradingView

The U.S. dollar currency index (DXY) index continues to show weakness as yields are rising, which is generally good news for Bitcoin bulls. This suggests that investors are fleeing the dollar toward higher risk, higher reward investments, such as Bitcoin.

However, from a technical perspective, the DXY saw a bearish retest at 91.50 points, followed by more downside for the dollar, as seen in the chart above. Now, a retest of the 90 points level is underway, with the primary question being whether this level will hold as support.

BTC/USD vs. DXY. Source: TradingView

Nevertheless, it’s debatable whether the rise in yields is having any direct effect on the price of Bitcoin, particularly in recent days. Meanwhile, the DXY has often been inversely correlated with the price of Bitcoin, though this has been decreasing in recent months (see below).

BTC rolling 90-day correlation vs. USD, VIX, Gold and S&P 500. Source: Digital Assets Data

After the crash in March 2020, this inverse relationship grew stronger until September 2020, as a weakening dollar was accompanied by a major increase in BTC price.

Of course, assets are only correlated until they aren't, and many other factors can have a much bigger impact on BTC in the short term — for example, miners or whales selling Bitcoin, government regulations, etc. 

Why is gold showing weakness?

Gold 3-day chart. Source: TradingView

The 3-day chart for gold's price shows a clear-cut correction since August 2020. More importantly, the increase in yields and the weaker dollar have not impacted the gold market as much as Bitcoin's market.

Even with the recent surge in yields, people are not buying gold. In fact, an increase in yields has historically not benefitted gold — at least not in the short term — because higher yields would make government bonds more attractive for funds to hold for settlement and as a risk-off asset in their portfolios.

When yields continue rising toward higher levels, however, the uncertainty surrounding the economy also increases, and investors typically begin to shift from the dollar to gold as a safe haven. This was seen in the 1980s when yields ran toward 14% and gold also spiked to new all-time highs.

BTC has become increasingly important in macroeconomics

In the current state, however, falling gold prices may simply be an immediate reaction to the increase in yields in general. However, another possibility is that an increasing number of investors are opting for "digital gold" instead of the precious metal, not only because of the higher upside potential — i.e., risk-reward — but also because these positions can be liquidated much easier.

But another possibility is that an increasing number of investors are preferring "digital gold" to the precious metal — not only because of the higher upside potential but also because these positions can be liquidated much easier on digital trading platforms.

Today, the market capitalization of Bitcoin is still only 7% to 10% of gold's, which highlights this massive upside potential.

Therefore, the macro conclusion that can be drawn is that the markets are becoming increasingly uncertain about the economy's and the dollar's future, as exemplified by the rising 10-year Treasury yields. However, it's still too early to write off the recent correction in BTC price to this macroeconomic development, as multiple other variables are at play.

Ultimately, the rising yields and a weakening dollar are exciting developments to keep an eye on moving forward. With Bitcoin becoming an increasingly important player in the macroeconomic environment, strategists at JPMorgan Chase, for example, believe BTC may continue to eat away at gold's market share. This will likely result in an even higher valuation for Bitcoin, particularly in the event of another economic crisis at the expense of gold.

In December 2020, JPMorgan strategists noted:

“The adoption of bitcoin by institutional investors has only begun, while for gold, its adoption by institutional investors is very advanced. If this medium to longer-term thesis proves right, the price of gold would suffer from a structural headwind over the coming years.”

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Bitcoin Cash is on the brink of falling below 1% of Bitcoin’s price
February 25, 2021 2:30 pm

BCH price has decreased by over 96% in value against BTC over the past three years.

Bitcoin Cash (BCH) holders have no reason to celebrate, despite the 46% year-to-date gains in U.S. dollar terms. One year ago, the altcoin was the third-largest by market capitalization. It now risks dropping out of the top 10, having been surpassed by other cryptocurrencies including Litecoin (LTC) and Chainlink's LINK.

BCH/BTC. Source: TradingView

After three years of continuous devaluation, BCH finally traded below 0.01 Bitcoin (BTC) on Feb. 22. Besides being psychological support, it marks a 96.5% devaluation from its highest close of 0.285 BTC on Aug. 2, 2017.

Even though both cryptocurrencies' combined hash rate was somewhat comparable at the time, it has since become a one-sided battle, with BTC's hash rate dominance now over 98% versus BCH and Bitcoin SV (BSV) combined.

Bitcoin Cash and Bitcoin hash rate. Source: Coin Metrics

As depicted above, the BCH hash rate currently stands at 1% of BTC's 150 exahashes per second. However, BCH proponents argue that Bitcoin Cash's 10-block checkpoint system defends the blockchain against hostile reorgs, so less hash rate is needed.

Nevertheless, while the risk of a "deep reorg" is reduced, checkpoints come with tradeoffs, particularly the increased risk of a consensus chain split, according to BitMex. 

The addition of checkpoints has also led to criticism from Bitcoin proponents, who argue that this solution compromises the decentralization of the Bitcoin Cash network. 

Litecoin's active addresses outshine Bitcoin Cash

Daily active addresses are a vital on-chain metric, albeit they are often inflated when the lower transaction costs are considered alongside network security tradeoffs. Nevertheless, comparing BCH with Litecoin and Dash seems reasonable, as the three networks have average fees below $0.05.

BCH, LTC and Dash daily active addresses. Source: Coin Metrics

As the data indicates, Litecoin currently has double the number of Bitcoin Cash daily active addresses. Therefore, the activity on the Bitcoin Cash network is more similar to that of Dash, an altcoin with a $2.2 billion market capitalization

 VORTECS™ Score (yellow) vs. BCH price. Source: Cointelegraph Markets Pro

Additionally, the VORTECS™ metric from Cointelegraph Markets Pro began dropping on Feb. 18, just days before the price peaked.

The VORTECS™ score, exclusive to Cointelegraph, is an algorithmic comparison of historic and current market conditions derived from multiple data points including market sentiment, trading volume, recent price movements and Twitter activity.

The score fell to sub-50 levels, and the drop in BCH price came four days later, losing the important $670 support level.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Bison Trails' new Polkadot API promises faster access to data
February 25, 2021 2:00 pm

The Polkadot Indexer is said to provide a more efficient way to get data from the Polkadot blockchain and its experimental platform, Kusama.

Bison Trails, a blockchain infrastructure company that was recently acquired by Coinbase, has launched a new Polkadot API that could allow developers to build their applications much faster.

Beginning Thursday, Bison Trails customers will be able to leverage Polkadot Indexer, a new protocol that allows users to retrieve and query all types of blockchain data much more efficiently.

On a technical level, Polkadot Indexer allows users to pull data with significantly fewer requests to their nodes. Bison Trails claims that for very active accounts, the Indexer can save upward of a thousand requests. In practice, the Indexer is an API that lets users make the equivalent of on-chain market intelligence platform Glassnode, DeFi asset management tool Zerion or Zapper wallets — but for Polkadot tokens.

The Indexer is also available for Kusama, Polkadot’s multichain network.

In terms of broader use cases, Polkadot Indexer is marketed toward wallets, exchanges and custodians, as well as data aggregators, blockchain analytics firms and other developers who build applications on Polkadot and Kusama.

"The Indexer blends two areas of our core expertise: protocol infrastructure and securing blockchain data," said Andrew Henshaw, Bison Trails’ chief technology officer. "Polkadot’s unique infrastructure makes it capable of processing an exceptionally large number of transactions. With the growing adoption from participants and developers, we saw a critical need for better indexing.”

Joe Lallouz, Bison Trails’ CEO, described data access as “the foundation of participation and building successful blockchain applications.” He explained:

“Polkadot Indexer enables teams to uncover critical data and insights faster than ever, while saving engineering time and resources from having to build and maintain indexing applications in-house.”

Polkadot has all the makings of an extremely active community. Valued at $31.5 billion, Its DOT cryptocurrency is the sixth-largest by market capitalization. Kusama, Polkadot’s so-called “wild cousin,” is ranked 41st by market cap, with a total value of $2.3 billion.

Coinbase public listing filing details 2020 revenue, major a16z stake
February 25, 2021 1:52 pm

The company has benefited a lot from the 2020 market but had lost money in 2019.

As Coinbase plans to pursue a direct listing on the stock market, which would see its existing shares be traded on United States stock exchanges, the exchange has submitted an S-1 report to the Securities and Exchange Commissio, which details all the relevant data that would help investors conduct due diligence on the company.

The document represents the first time that Coinbase publicly revealed sensitive details like revenue and ownership structure.

The filing reveals that the exchange posted a direct revenue of $1.1 billion in 2020, a significant increase from $482 million in 2019. About 96% of this revenue is derived from transaction fees charged to users, with the remainder coming from subscription services. A further $136 million revenue was generated from sales of Coinbase assets to fulfill over-the-counter transactions.

The company’s operating expenses are significant. In 2020, they totalled over $880 million, with the majority being due to research and development, sales, and general administrative expenses. However, $135 million of the total expense is labeled as “transaction expenses.” The prospectus explains that these consist of blockchain miner fees and transaction reversal costs, as well as staking and verification expenses.

It is worth noting that the company actually lost $46 million due to operations in 2019, as its revenue of $533 million was not enough to cover its $579 million in losses, primarily due to administrative and development costs. For 2020, its net income amounted to $327 million.

For 2020, it is interesting to note that institutional trading generated most of its volume, though retail participation was stronger in the last quarter of 2020 than in previous months.

Crypto asset volatility compared with trading volume. Source: S-1 Filing

Finally, the ownership structure of Coinbase shows that its CEO, Brian Armstrong, only holds 11% of the company, though he has a larger share of Class B shares, which hold governance power.

Subdivision of equity within Coinbase. Source: S-1 Filing.

The filing shows that Marc Andreessen, general partner and co-founder of venture firm a16z, holds 24.6% of all Class A shares, which will be listed on stock markets. Fred Ehrsam, co-founder of Coinbase and now general partner at Paradigm Capital, still holds 11.4% of Class A shares, in addition to 9% of Class B stock. In total, executives and board directors individually hold over 53% of Class A shares and 54% of Class B shares.

The largest individual shareholder appears to be Andreessen and a16z, who are poised to benefit the most from Coinbase’s listing.

What Russian journalists can learn from Navalny's Bitcoin wallet
February 25, 2021 1:41 pm

As the Kremlin sequesters funds to the opposition, Bitcoin serves to run blockades.

Alexei Navalny is a noted leader of the Russian opposition. His “Anti-Corruption Foundation” (FBK) has been a thorn in President Vladimir Putin’s side for many years.

Though the FBK has been locked out of mainstream politics — much as Navalny has been blocked from running in recent elections — its investigations have managed to garner an audience that Putin has found stubbornly difficult to disperse. That audience has transformed into protests across the country.

On top of it all, Navalny’s story highlights an important use case for Bitcoin in a country that effectively sanctions media that don't toe the official line. Long touted as a means of getting money to people subject to government oppression, Bitcoin should be a serious consideration for journalists in Russia, many of whom face a regime that is going to great lengths to silence and effectively sanction them.

A recent timeline of Navalny

Navalny’s FBK went on the Russian Ministry of Justice’s “Foreign Agents” list at the end of 2019. Navalny has said that continuous fines as a result of that status will force him to close down FBK, and possibly re-open it under a different name. At the moment, however, Navalny’s primary concern is his current incarceration.

Russian authorities arrested Alexei Navalny on Jan. 17, as the opposition leader returned from Germany where he’d been treated for Novichok poisoning that he attributes to Kremlin agents. Immediately afterwards, Navalny’s team released an investigation into a palatial estate near the Black Sea that they allege belongs to Putin.

On Feb. 2, Navalny was sentenced to two years and 8 months in jail on trumped-up charges over a sentence suspended in 2013 for embezzlement. Russian law, moreover, prevents anyone with such a record from running for political office (which many identified as the true motivation for the conviction eight years ago). This past weekend, a court rejected his appeal and fined him another 850,000 rubles ($11,000) for a separate charge of defaming a veteran. The veteran in that case had appeared in a pro-Putin ad that Navalny had criticized.

It has also come to light that a Bitcoin address associated with Navalny has seen a surge in donations since his poisoning in August and especially following his arrest last month.

Leonid Volkov, a long-time ally of Navalny’s and a project manager for the FBK specified to Cointelegraph that the Bitcoin in question goes “to fund the operations of Navalny’s political offices across the country (not the FBK!).” Why, you might ask? The FBK only accepts donations from bank cards issued to Russian citizens which, Volkov said, “makes the whole ‘foreign agent’ story especially stupid.”

The Bitcoin donations go to Navalny’s network of outposts across Russia, which conduct independent local investigations into corruption but which are not financially bound to the FBK. Volkov further specified that he, not Navalny, is the proprietor of the Bitcoin wallet, which is related to the whole issue of foreign funding:

“The network of Navalny offices was never recognised [as] a foreign agent. I accept these bitcoin donations as a Russian citizen, then I go to localbitcoins and sell them for Russian Roubles, and, finally, I donate these roubles as a Russian citizen to the legal entity, which operates the network of regional Navalny offices.”

The whole system seems to work for now, even though Volkov says that BTC has never been more than 15% of their donations in a given year.

Beyond just facilitating a wider net for fundraising, the Navalny team’s use of Bitcoin has implications for an ever-expanding circle of opposition voices in Russian media who are seeing their revenue scrutinized or cut off. The Putin regime is eagerly converting the “foreign agents” list into a mechanism for financially sanctioning Russian citizens involved in opposition politics. Despite limited adoption in the country’s donations, the problems of funding journalism in modern-day Russia clearly show a use-case for Bitcoin adoption.

The “Foreign Agents” list

Russia has maintained a growing list of “Inoagents,” or “foreign agents,” since 2012. Originally, these were NGOs engaged in political activity, which the regime accused of receiving funding from abroad. 74 entities are in the current list. Alongside Navalny’s FBK, it includes a number of non-profits working against the spread of HIV and educating the public about sexual assault. In 2017, the list expanded to media outlets linked to the U.S.-funded Radio Free Europe/Radio Liberty and Voice of America families.

When an organization appears in the foreign agents list, any time their work or message is broadcast in Russia, it must feature a lengthy disclaimer that identifies the source as a foreign agent. This is a major interference to NGOs trying to run public campaigns and a death knell to many journalistic projects who depend on both brevity and credibility in order to reach an audience. Designated foreign agents must also make intensive budgetary disclosures every quarter.

This past December, new amendments allowed authorities to put individual journalists on the list.

“People still remember what happened during the Stalin times, with the label 'vrag naroda,' and this is something similar to that,” Gulnoza Said told Cointelegraph, referring to a weighted Soviet term that translates to “enemy of the people.”

An attack on journalism

Said coordinates the Committee to Protect Journalists’ Europe and Central Asia programs, which includes grants to journalists in emergency situations — oftentimes life or death. “At times it’s been very difficult for us to send money to Russian journalists,” she said. “Russia doesn’t have the same international banking system as everyone now.”

On Feb. 18, Reporters Without Borders denounced still more changes coming to expand the foreign agents law. Jeanne Cavelier, the head of RSF’s Eastern Europe and Central Asia desk, said:

“This law is so vague and its scope is so broad that, in the absence of exhaustive verification of its application, the authorities will be able to choose their targets and impose insane fines on whomever they see fit.”

Denis Kamalyagin is the editor-in-chief of newspaper Pskovskaya Guberniya and one of the journalists added to the foreign agents list in December. Kamalyagin told Cointelegraph he was now required to file quarterly reports on income and expenses, a process that has not been standardized. “There is no template yet, so everyone filled theirs out after their own fashion,” he said. It likewise remains unclear what sort of fines the government will level at the Inoagents if they do not file in accordance with the new demands. The new laws, however, include a punishment of up to 5 years in jail for failure to file.

Meanwhile, “foreign agent” has already proved a remarkably expansive term. The “journalists” added to the list in December included one Daria Apakhonchich, an artist and teacher with the Red Cross whose crime seems to have been political posts on social media. The Red Cross has since fired her.

Financial sanctions

While the financial burden and scrutiny placed upon “foreign agents” is obvious, the Putin regime’s usage of the list clearly functions as a form of financial sanctions upon public figures opposed to the regime. To fulfill new opaque reporting requirements, Kamalyagin said he was filing for a joint LLC with Apakhonchich and another listed journalist, Sergey Markelov to be registered in Pskov. But that’s hardly the end of either the “foreign agents” list’s requirements, nor the sorts of sanctions available.

Regarding the prospect of further expansion of the governmental list, Gulnoza Said said, “Next in line is anybody who has been critical of the Russian authorities, and they are going to be included in this list unless they are already in some other list.”

Critical to this conversation is Svetlana Prokopyeva, a journalist from Pskov who formerly worked at Kamalyagin’s Pskovskaya Guberniya and more recently at Radio Liberty. Prokopyeva ended up on Russia’s list of extremists after comments she made in an interview asking about the origin of a suicide bombing in 2019. A court found her guilty of “justifying terrorism.”

Initially facing an 8-year jail sentence, Prokopyeva instead received a half-million ruble ($6,700) fine last summer — which is roughly a year’s income for the average Russian. A military court overturned Prokopyeva’s appeal at a hearing earlier this month, during which the prosecutor labeled the journalist “a mouthpiece of the West.” Despite not doing time, Prokopyeva is now labelled an extremist. More intensive than the foreign agent list, Prokopyeva’s bank accounts remain frozen and her passport confiscated along with all of her equipment.

Unable to work and prohibited from accessing her money, Prokopyeva had limited avenues to pay the fine. Prokopyeva noted that sending money directly to her could legally constitute terrorist financing, so she turned to her mother, who used an account with mobile bank Tinkoff to receive donations to pay her daughter’s fine — likely possible because the mobile-only Tinkoff is less concerned with the risk of internal “political exposure” than the more regime-tied brick-and-mortar banking giants of the Russian Federation.

The future

Despite managing to pay her fine with her mother’s help, Prokopyeva will remain on the terror list for a year. And despite still having access to their bank accounts, the journalists recently added to the list of foreign agents are still waiting to learn what sort of fines are awaiting them.

A consistent criticism of Bitcoin from authorities is that it facilitates sanctions evasion and money laundering. If you were looking to stand up for the Putin regime’s behavior in this area, you could paint Bitcoin as a mechanism to launder money rather than a politically neutral means of transferring value.

While there’s no fair reason to respect Putin’s sanctions on journalists anyway, the point is not that Bitcoin can provide and hide foreign funding to malignant entities of the people. The point is that ending up on the “foreign agents” list has little to do with where any of these people’s money is coming from and has everything to do with who they have angered. So here, Bitcoin is a promising safety mechanism for an industry in danger.

Creditors of Mt. Gox Bitcoin exchange to vote on draft refund plan
February 25, 2021 1:28 pm

Mt. Gox creditors will vote on a proposed draft compensation plan in October.

The trustee of hacked, now-defunct cryptocurrency exchange Mt. Gox has posted another update on the long-running process of refunding the exchange clients.

Nobuaki Kobayashi, a Tokyo attorney appointed to act as civil rehabilitation trustee to manage Mt. Gox’s bankruptcy estate funds, announced Thursday that the Tokyo District Court ordered that “There were no grounds for disapproving the draft rehabilitation plan.” As previously reported, the plan was filed on Dec. 15, 2020.

According to the announcement, the court has approved a repayment process schedule that includes a vote by creditors on the proposed refund plan. As part of the process, the trustee will initially determine the creditors with voting rights on March 24. Following the voting deadline on Oct. 8, creditors will attend a meeting on the resolution of the compensation plan on Oct. 20.

Creditors will have three options to proceed with the voting on the draft compensation plan, including online voting, written voting, and voting in person on the day of the creditor meeting. Select creditors will be asked to choose one of these methods, Kobayashi wrote.

Founded in 2010, Mt. Gox was once the world’s largest Bitcoin (BTC) exchange, reportedly handling up to 80% of global BTC trading volumes. The crypto exchange suffered a series of devastating hacks, losing a total of 1.35 million BTC in two incidents in 2011 and 2014.

Following the second hack, Kobayashi was appointed to oversee the civil reimbursement process to reportedly compensate the 24,000 victims of the Mt. Gox hack. According to reports, there is around $630 million and 150,000 BTC in the Mt. Gox bankruptcy trust waiting to be distributed to their rightful owners. Despite the reimbursement operation being initiated years ago, creditors still haven’t been paid back, following multiple delays.

Crypto derivatives exchange FTX launches futures on 2021 Olympics
February 25, 2021 1:20 pm

Will they or won't they happen? Amid debates over how safe the Olympic games can be in 2021, cryptocurrency traders can now bet on the likelihood of their eventual go-ahead.

Cryptocurrency derivatives exchange FTX has created a new specialized futures contract for traders to bet on the likelihood of the Olympic Games occurring in Tokyo in 2021. The coronavirus pandemic continues to cast a shadow over the safety of hosting the event this year, particularly after a renewed outbreak of the virus in Tokyo last month.  

For each such uncertainty, as FTX noted in its tweet promoting the new contract, there can be a lucrative market. The new futures contract on FTX Token (FTT) has, according to the exchange, a different risk profile than Bitcoin (BTC). That is, "It has significantly higher chances of making large moves (to $0 or $1)."

In addition to the OLY2021 contract, FTX is continuing its line of products for speculation on the future likelihood of a Trump presidency in 2024. Notably, neither of these contracts is available to residents of barred jurisdictions, which include the United States, Canada, mainland China and Hong Kong, Singapore, Turkey, the United Kingdom and others. 

As previously reported, cryptocurrency-powered markets have flourished during a politically and economically turbulent year. Last autumn, with the United States presidential election in focus, decentralized prediction platforms such as Augur and Polymarket reported significant increases in trading volumes, alongside crypto derivatives exchanges like FTX.

Bitcoin will not become a global medium of exchange, says Charlie Munger
February 25, 2021 1:03 pm

Billionaire investor and Berkshire Hathaway vice-chairman Charlie Munger has once again dismissed the value proposition of Bitcoin.

Like Berkshire Hathaway chairman Warren Buffett, the 97-year-old Munger is a known critic of Bitcoin (BTC).

Addressing the 2021 Daily Journal annual meeting with shareholders organized by Yahoo Finance on Wednesday, Munger again espoused some negative sentiments about the largest cryptocurrency by market capitalization.

Fielding questions from shareholders concerning Bitcoin, Munger stated:

“I don’t think Bitcoin is going to end up [being] a medium exchange for the world. It’s too volatile to serve well as a medium of exchange.”

Compared to Munger’s previous comments about Bitcoin, his remarks during the meeting appeared watered down. Indeed, Munger once said that Bitcoin investors were celebrating the life and work of Judas Iscariot.

During the 2018 edition of the Daily Journal annual meeting, Munger characterized cryptocurrencies as “totally asinine,” and called professional crypto traders “disgusting.”

At Berkshire Hathaway’s annual meeting in 2018, Munger likened the crypto market to “trading turds.” At that same event, Buffett would render his infamous “rat poison-squared remark” for Bitcoin.

With development work on scaling solutions like Lightning Network and sidechains still in progress, the jury is still out of whether BTC will ever function efficiently as a medium of exchange.

However, the case of Bitcoin as a store of value appears significantly stronger despite assertions to the contrary by critics like Nouriel Roubini and goldbug Peter Schiff. Munger also touched on BTC being like gold on Wednesday, adding:

“It’s really kind of an artificial substitute for gold and since I never buy any gold, I never buy any Bitcoin, and I recommend other people follow my practice.”

The Berkshire Hathaway vice chairman did not waste the opportunity to drop an anti-Bitcoin soundbite, quoting Irish poet and playwright Oscar Wilde by comparing BTC to fox hunting. “It’s like what Oscar Wilde said on fox hunting: the pursuit of the uneatable by the unspeakable,” Munger quipped.

Buffett’s right-hand man also dismissed the idea of the Daily Journal emulating companies like Tesla in adding Bitcoin to its balance sheet.

As part of his comments at the event, Munger also waxed lyrical about mainstream finance saying that “a properly run bank is a great contributor to civilization.”

Polkadot could introduce ‘common good’ parachains with DOT-based smart contracts
February 25, 2021 12:43 pm

Polkadot is likely to offload many of its core features to special-purpose public parachains.

As Polkadot (DOT) gets ready to launch parachain auctions, a combined fundraising and market interest discovery mechanism, the team is realizing that some core features may be ill-suited for the auction mechanism.

Polkadot parachains are somewhat analogous to the sharding proposal for Ethereum 2.0. Each parachain is a largely independent blockchain built for a particular purpose. Many projects building on Polkadot, like Moonbeam, Equilibrium or Acala, are developing their own parachains where the project’s tokens would act as a native currency used to pay for transactions. The parachains are able to communicate with each other through the Relay Chain, a central coordinator where Polkadot’s staking-based consensus mechanism is executed.

The different parachain projects may sometimes overlap in their purpose and potentially compete with each other. For example, Equilibrium and Acala are set up as Polkadot-native DeFi chains  while Moonbeam is focusing on offering virtually the same blockchain environment as Ethereum, with a focus on DeFi as well. Certain features like bridges to external blockchains may be useful to all projects on Polkadot, but each individual parachain team may be hesitant to commit funds for an auction, knowing that their competitors would benefit just as much from it without having invested any of their resources. This is referred to as the “free rider problem” in economics.

The Polkadot team thus proposed on Thursday to allocate some parachain slots to public-good features, bypassing the auction process. Instead, the inclusion of the parachain will depend on DOT stakeholders passing a governance proposal. Each individual proposal will be discussed by a technical committee and the Polkadot Council, though the ultimate decision will rest with token holders.

For now, the candidates for public-good parachains are primarily “system-level chains” and “public utility chains.” The former are meant to offload features from the Relay Chain into a dedicated parachain. This includes governance, staking elections, identity and account balances. Such an optimization would help performance, as the relay chain must be validated by all nodes at the same time, while individual parachains are processed by only a portion of them at any given moment. Eventually, the plan is to make the Relay Chain a transactionless chain, only performing validating functions.

Public utility chains, on the other hand, can be considered as a Polkadot-native implementation of individual project parachains. This includes features such as bridges to other blockchains, or general smart contract environments based on WebAssembly. Such a parachain could allow developers to deploy their project on a neutral Polkadot environment, where fees are paid with DOT, or KSM in the case of the Kusama sister chain.

The public Wasm chain would save on the development complexity involved in building a whole parachain, making it closer to developing a DApp on Ethereum. The key distinction is the strict adherence to WebAssembly, a virtual machine generally considered more powerful than the Ethereum Virtual Machine. Peter Mauric, head of public affairs at Parity, told Cointelegraph that “a strong argument could be made that a generalized, pure Wasm smart contract parachain would be well received as a public utility on Polkadot.”

The WebAssembly environment would be one of Polkadot’s more unique features, with Mauric noting that “legacy networks have all but scrapped plans to incorporate powerful WebAssembly virtual machines.” Indeed, plans for building the eWASM, a WebAssembly environment for Ethereum, have been scrapped in 2020, as Ben Edgington, project lead on the Eth 2.0 Teku client, told Cointelegraph.

Nonetheless, plans for public utility chains are still not confirmed, as Polkadot governance will need to formally agree to including them.