Bitcoin Gold 51% Attacked – Network Loses $70,000 in Double Spends

Bitcoin Gold 51% Attacked - Network Loses $70,000 in Double Spends

Bitcoin Gold 51% Attacked – Network Loses $70,000 in Double Spends

The Bitcoin Gold (BTG) network suffered another set of 51% attacks on January 23-24, as roughly 29 blocks were removed in two deep blockchain reorganizations (reorgs). Reports indicate that more than 7,000 BTG was double spent as the chain suffered a loss of $70,000 in two days.

Also read: Bitcoin Gold Hacked for $18 Million

Bitcoin Gold Sees Two Deep Blockchain Reorgs With 29 Blocks Replaced

In May 2018, the Bitcoin Gold (BTG) blockchain was 51% attacked for the first time suffering a loss of more than $18 million. BTG is a fork of the Bitcoin protocol but it doesn’t use the SHA256 consensus algorithm like BTC, BCH, or BSV. The blockchain BTG utilizes a variant of the Equihash algorithm (Equihash 144, 5 or “Zhash”) which can be mined with a GPU. Bitcoin Gold’s creators believed that creating a Bitcoin fork that could be mined with GPUs as opposed to ASIC devices would be more decentralized. However, things went south in the spring of 2018 when a miner gained control of more than 51% of the overall BTG hashrate. After losing $18 million, BTG was also asked to pay the exchange Bittrex back or face being delisted. Since then BTG has been meandering along while other small coins like ethereum classic and vertcoin were 51% attacked too.

Bitcoin Gold 51% Attacked - Network Loses $70,000 in Double Spends
The Github gist that explains the recent Bitcoin Gold 51% attack on Thursday and Friday.

Last week on Thursday and Friday, BTG again dealt with a malicious mining entity as more than 51% of the chain’s hashrate was captured and still is. The blockchain suffered from two deep reorgs on both days that saw $19,000 double spent on Thursday and $53,000 double spent on Friday. For instance, at approximately 1:01 p.m. on Thursday, BTG’s chain saw 14 blocks removed and 13 new blocks added. At 7:24 p.m. on Friday, the blockchain saw 15 blocks removed and 16 blocks added during a small period of time. Most of the blame has been directed at the cloud mining operation Nicehash which has been blamed for most of the 51% attacks in the last two years. Some BTG members believe that there are secret ASICs mining the BTG network and community members are begging for a safer algorithm.

“I think it’s time we get a real leader that listens to the members of this community and take action,” one BTG proponent wrote on Reddit. “It is obvious that the first 51% attack was done by ASICs — Why can’t BTG be novel and create a truly new [algorithm]? This coin is a bad investment for anyone looking to buy — None of the devs are qualified.”

Bitcoin Gold 51% Attacked - Network Loses $70,000 in Double Spends
The Bitcoin Gold community discusses the algorithm vulnerabilities on Reddit and supporters are talking about “secret ASICs” mining the BTG network.

$719 per Hour to Attack as Nicehash Captures 57% of the Bitcoin Gold Hashrate

During the last few months, news.Bitcoin.com has reported on how the three main SHA256 Bitcoin forks have seen an exponential rise in hashrate. BTG’s hashrate, on the other hand, has not followed the same pattern and has declined significantly since the last 51% attack in May 2018. The lack of hashpower behind the BTG network makes the blockchain extremely vulnerable to more 51% attacks unless the developers change the consensus algorithm. According to statistics from the Crypto51 application, BTG only has 3 million hashes per second (3MH/s) securing the chain. It would only cost $788 per hour to 51% attack the BTG blockchain and cause a reorg with double spending.

Bitcoin Gold 51% Attacked - Network Loses $70,000 in Double Spends
According to Crypto51, it only costs $788 per hour to attack the Bitcoin Gold network and cause disruption. Right now Nicehash miners control between 56-74% of the BTG hashrate on January 26, 2020.

The cloud mining site Nicehash sells individuals and businesses CPU and GPU-based hashrate and on January 26, Nicehash commands 57-74% of the BTG hashrate or 2MH/s. A comparison of how much easier it is to attack the Bitcoin Gold chain in contrast to the Zcash (ZEC) network shows it’s far more convenient to attack BTG. Even though they share a similar Equihash variant, ZEC has 5 billion hashes per second (5GH/s) securing the blockchain. Nicehash miners who are mining ZEC only capture 182 MH/s of the overall 5GH/s or a mere 3% of the network. The estimated cost to 51% attack ZEC is much larger than the BTG attack at $11,788 per hour to accomplish the mission.

Bitcoin Gold 51% Attacked - Network Loses $70,000 in Double Spends
On January 26, 2020, following the 51% attack last week, BTG prices have spiked around 9%.

Interestingly enough, and similar to coins like vertcoin and ethereum classic, BTG’s market price did not drop in value. In fact, BTG’s price has jumped since the 51% attack and is up over 9.6% for the week and 15% in the last 24 hours. To most observers, it is strange that instead of losing value after two deep reorgs and $70,000 in double spends, BTG is seeing more market demand than it has in months.

What do you think about the 51% attack against Bitcoin Gold (BTG)? Let us know what you think about this topic in the comments section below.


Image credits: Shutterstock, r/bitcoingoldhq, Markets.Bitcoin.com, Crypto51, Wiki Commons, Fair Use, and Pixabay.


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Jamie Redman

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Dubai Launching Crypto Valley in Tax-Free Zone

Dubai Launching Crypto Valley in Tax-Free Zone

Dubai Launching Crypto Valley in Tax-Free Zone

A Dubai government authority has announced that it is launching a crypto valley in the country’s free zone there is no personal or corporate income tax. With the help of its partners from the Swiss crypto valley, Dubai will offer a variety of services such as incubation for startups, coworking facilities, blockchain training, education, events, mentoring and funding.

Also read: Regulatory Roundup — New US Crypto Tax Bill, Central Banks Join Forces on Digital Currencies

Crypto Valley in Dubai’s Free Zone

DMCC (Dubai Multi Commodities Centre), a Dubai government entity, announced at Davos 2020 on Thursday that it is launching a crypto valley in its free zone, at the heart of the city’s leading business district. DMCC explained that it is “Designed to foster growth, collaboration and integrity across the global blockchain economy,” elaborating:

The ‘DMCC Crypto Valley’ will offer a variety of services including incubation for early-stage startups, co-working facilities, innovation services for corporate clients, blockchain and entrepreneurship training, education, events, mentoring and funding.

Dubai Launching Crypto Valley in Tax-Free Zone

“The launch of the crypto valley in DMCC will enhance the city’s dynamic business environment, and support the wider strategy of the UAE government to attract the innovators, entrepreneurs and pioneers that will shape the future economy,” commented Executive Chairman and CEO Ahmed Bin Sulayem.

Established in 2002, DMCC aims to enhance commodity trade flows through the country. Its free zone offers a range of benefits including 0% personal and corporate income tax. Members can also remit all profits made back to their home countries without restriction. In October 2019, DMCC received the Financial Times Fdi magazine’s “Global Free Zone of the Year” award for the fifth consecutive years. A total of 85 global free zones were nominated in the 2019 competition.

Situated in the heart of Dubai, DMCC is home to over 100,000 people and 17,000 member companies representing more than 170 countries and 20 business sectors. The companies range from startups to multinational corporations. Every month, 170 more companies join DMCC, 95% of which are new to Dubai, the authority says.

Dubai Launching Crypto Valley in Tax-Free Zone
The singing between DMCC and CV CV for the crypto valley collaboration.

Partners From Swiss Crypto Valley

For the crypto valley launch, DMCC is collaborating with Swiss investment company Crypto Valley Venture Capital (CV VC) and its subsidiary CV Labs to develop “a comprehensive DMCC Blockchain Strategy that is aligned with the Emirates Blockchain Strategy 2021, and supports the Dubai Blockchain Strategy launched by His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, the crown prince of Dubai and chairman of Dubai Executive Council.” The agreement between the companies was signed on the sidelines of the World Economic Forum in Davos.

“We are thrilled to move into the MENA [Middle East and North Africa] region with DMCC as a strong local partner,” CV VC and CV Labs founder Ralf Glabischnig commented, adding:

We are looking forward to bringing our strong partner from crypto valley to Dubai, like Coreledger, Inacta, Lykke, and Tezos which are already active in the MENA region.

With the launch of its own crypto valley, Dubai joins the company of Switzerland and the Philippines, which have already established their own crypto valleys. The Philippines has built a crypto valley of Asia which will soon get its own airport.

What do you think of Dubai launching a crypto valley in its tax-free zone? Do you think it will attract many crypto companies? Let us know in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or a recommendation, endorsement, or sponsorship of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is 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 content, goods or services mentioned in this article.


Images courtesy of Shutterstock and DMCC.


Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.

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Everybody’s Staking But Who’s Using Proof of Stake Blockchains?

Everybody’s Staking But Who’s Using Proof of Stake Blockchains?

Everybody’s Staking But Who’s Using Proof of Stake Blockchains?

The primary use case for staking blockchains is staking. That is their raison d’être, and thousands of cryptocurrency holders have utilized this provision to increase their holdings by earning staking rewards. As the total amount of staked tokens trends towards 80% for some blockchains, however, it raises questions as to what other utility these chains provide.

Also read: The Fallout From Onecoin’s Ponzi Scheme Continues to Impact Investors

Two Thirds of All Staking Coins Are Locked Up

The total market cap of all Proof of Stake (PoS) coins stands at $12.6 billion, of which $8 billion is locked up in staking wallets. Much of this occurs imperceptibly to cryptocurrency holders due to exchanges managing staking on their behalf. Store tezos on Binance, for example, and you will automatically be eligible for staking rewards. The top five staking networks by market cap have the majority of their circulating supply locked up: Tezos (77%), Cosmos (73%), Decred (51%), Synthetix (81%), and Waves (53%).

Everybody’s Staking But Who’s Using Proof of Stake Blockchains?
The amount of staked coins as a percentage of total issuance has been growing steadily

Just as masternode coins were so-named because running a node was their defining feature, many staking coins now exist primarily to disburse staking rewards. It’s healthy to have coins distributed as widely as possible, and through locking up tokens, holders have a vested interest in seeing the network flourish. If the only users are stakers, however, not only will everyone’s staking rewards be diluted, but the network will wither away after failing to attract the developers, dapp users, and businesses that are its lifeblood.

Everybody’s Staking But Who’s Using Proof of Stake Blockchains?
Leading PoS coins, showing total percentage staked. Source: stakingrewards.com.

Build First, Stake Later

Tellingly, the PoS chains that have achieved wide adoption were slow to add staking rewards, preferring to build a community and establish a diverse ecosystem of network participants. Two examples of this are Matic Network and Waves. The former has spent the past year onboarding dapp developers, forging partnerships, and gaining liquidity through multiple exchanges including Whitebit, where matic token-holders can claim lower trading fees and additional bonuses. Matic is now applying the final touches to its staking program which will see validators stake tokens as collateral and become part of the network’s PoS consensus mechanism. A partnership with South Korea’s Coinone exchange will enable users to lock up matic tokens for monthly periods in return for an APR of 30.29%.

Everybody’s Staking But Who’s Using Proof of Stake Blockchains?

Waves, meanwhile, operates Leased Proof of Stake, whereby holders can earn a return through running a full node and generating blocks or by leasing waves tokens to a full node. The current annual reward for staking waves stands at 6.23%, or 3.1% when adjusted for inflation. Like Matic, Waves has more to offer its community than merely staking; recent developments have included interoperable blockchain protocol Gravity Hub, which can communicate with networks such as Waves and Ethereum and serve as an oracle for non-blockchain data.

Everybody’s Staking But Who’s Using Proof of Stake Blockchains?

Waves also has a blockchain games marketplace created in conjunction with The Abyss where digital goods and in-game items can be traded. A strong developer community, complete with hackathons, online courses, and workshops, supports third parties creating and launching dapps using the Waves platform.

How Sustainable Are Staking Rewards?

Crypto networks that offer high staking rewards have no trouble attracting users willing to lock up their tokens to make ‘easy money.’ It is hard to see how staking rewards that run into double-digit percentages are sustainable, however. The rapid increase in the circulating supply dilutes everyone’s holdings, while the lack of features beyond staking deters adoption. Livepeer (LPT), for instance, which has 24-hour volume of just $40K, provides a staking reward of 64.8%, but when inflation adjusted, this drops to 18.8%. Fantom promises 57.7%, adjusted to 33%.

As mining has become commercialized and the days of easy altcoin profits have faded, staking and lending have become the primary forms of passive income. Exchanges that provide staking as a service have obviated the need to spin up a node, and the monthly payouts provide a steady source of revenue. Stakers nevertheless have some tough choices to make. Locking up tokens over an extended period increases the risk of loss when measured in BTC. It’s possible to be up in tokens for the month but down in BTC, rendering the whole exercise pointless from a commercial perspective.

Everybody’s Staking But Who’s Using Proof of Stake Blockchains?

The Future of Blockchains Lies in Staking

Despite empirical evidence that Proof of Work makes for a more robust blockchain, the days of new PoW coins are over. Grin was the last major mineable coin to launch; today it’s all PoS chains entering the market. Stakingrewards.com lists dozens of Proof of Stake coins that are scheduled to launch, ambitiously including Ethereum 2.0, whose launch date is anything but certain. When the new improved ETH blockchain does see the light of day, it’s expected to offer staking rewards of 3.7%. Other staking options scheduled for 2020 include Polkadot (5%), Cardano (3.7%), and Matic (10%). These blockchains promise to solve a range of problems including scalability, fast payments, and interoperability. Their greatest use case, however, is likely to be staking.

Do you think staking rewards of 20% or higher are sustainable? Do you intend to stake any of the PoS coins that will launch this year? Let us know in the comments section below.


Images courtesy of Shutterstock.


Did you know you can verify any unconfirmed Bitcoin transaction with our Bitcoin Block Explorer tool? Simply complete a Bitcoin address search to view it on the blockchain. Plus, visit our Bitcoin Charts to see what’s happening in the industry.

Kai Sedgwick

Kai’s been manipulating words for a living since 2009 and bought his first bitcoin at $12. It’s long gone. He’s previously written whitepapers for blockchain startups and is especially interested in P2P exchanges and DNMs.

Indian Prime Minister Modi Awards Young Entrepreneur for Cryptocurrency App

Indian Prime Minister Modi Awards Young Entrepreneur for Cryptocurrency App

Indian Prime Minister Modi Awards Young Entrepreneur for Cryptocurrency App

India’s Prime Minister Narendra Modi has awarded a young entrepreneur for her cryptocurrency price tracking application while the government is still deliberating on the country’s crypto policies. News.Bitcoin.com caught up with the award recipient to find out more about her app. Meanwhile, the Reserve Bank of India (RBI) is being challenged in the supreme court regarding its crypto action.

Also read: Regulatory Roundup — New US Crypto Tax Bill, Central Banks Join Forces on Digital Currencies

Modi Awards Creator of Crypto App

While the Indian government is deliberating on whether to regulate or ban cryptocurrencies in the country, Prime Minister Narendra Modi has awarded a young entrepreneur for her cryptocurrency tracking app creation. Modi tweeted on Jan. 24: “I am delighted that the very talented Harshita Arora has been conferred the Bal Shakti Puraskar 2020 … She has been focussing on a wide range of sectors. Her passion towards science, technology and human welfare are clearly visible.”

The award recipient, 18-year-old Kumari Harshita Arora, created an app called Crypto Price Tracker, a portfolio management and price tracking tool for cryptocurrencies, which she designed herself.

Interacting with the award winners at his residence, the prime minister said that he is proud to see the awareness of their duty towards society and the nation, local media reported. There were 49 winners in various categories; Arora was awarded the Bal Shakti Puraskar 2020 for her excellence in innovation. Noting that he gets inspiration and energy from the award recipients, Modi was quoted as saying: “When I was getting introduced to you a while back, I was really surprised. The way you all have tried in different fields, the work that has been done at such a young age … is amazing.” The prime minister added:

Whenever I hear about such courageous work of all you young comrades, talk to you, I also get inspiration and energy.

The Bal Shakti Puraskar award is given by the government of India every year “to recognize exceptional achievements of our children in various fields i.e., innovation, scholastic achievements, social service, arts & culture, sports and bravery,” explained the government’s website. It is also “to recognize the contribution of dedicated individuals and institutions, whose tireless efforts complement the actions taken by the government of India for the welfare of children.”

Arora’s Crypto Tracking App

News.Bitcoin.com caught up with Arora who shared some details about her award-winning app. “I created a cryptocurrency portfolio management and price tracking application called Crypto Price Tracker and launched it on the App Store in Jan 2018,” she told the news team, noting that it was later acquired by Redwood City Ventures. The entrepreneur elaborated:

My app received a lot of positive feedback from the crypto community and got thousands of paid downloads in the first 24 hours of launch which led it to becoming the #2 app in the Finance category of the App Store.

Some screenshots of the crypto app Arora created.

Crypto Price Tracker is a portfolio management app that does price tracking and customizable alerts. It tracks the prices of over 1,000 cryptocurrencies from over 18 exchanges in 32 fiat currencies. It also provides price charts for all monitored cryptocurrencies during the last one day, one week, one month, three months, and one year.

Users can create time-based alerts to get prices of a coin as a push notification regularly or at a specific time. They can also create price threshold-based alerts to get notifications when the price of a certain coin drops, rises or changes by a certain percentage. The app is available in the Apple app store, but not in the U.S., however.

Is the Indian Government Changing Its Stance on Crypto?

An entrepreneur winning such a prestigious award from the Indian government for crypto-related work came as a surprise to many in the crypto community since lawmakers have been considering an anti-crypto bill. The interministerial committee (IMC) headed by former Finance Secretary Subhash Chandra Garg recommended a ban on all cryptocurrencies, except state-issued ones. Garg has since resigned but maintains a negative view on the future of cryptocurrencies.

“Now this is interesting,” Varun Sethi, also known as Blockchain Lawyer, tweeted in response to the news of Arora receiving the award, pointing out that the “draft law by the interministerial committee imposes punishment for direct / indirect use of cryptos.”

Indeed, the crypto bill drafted by the IMC states that “No person shall directly or indirectly use cryptocurrency in any manner,” including providing cryptocurrency-related services to consumers or investors. Those in violation face a fine or imprisonment of “not be less than
one year but which may extend up to ten years, or both,” according to the text of the bill. However, the bill has not been introduced in parliament and the Indian crypto community believes that it is flawed and will not be introduced as is.

Indian social media influencer by the name “Shalini” commented, “India is in a love-hate relationship with cryptocurrency,” adding:

While RBI fights against crypto in the supreme court, our prime minister just awarded Harshita Arora a prestigious award for innovation in various fields including crypto (she created a crypto price tracking app).

The Reserve Bank of India has repeatedly displayed its negative stance towards cryptocurrency. In April 2018, it issued a circular banning regulated financial institutions from providing services to crypto businesses. The supreme court is currently hearing the petitions against this ban, which will resume next week.

What do you think of Prime Minister Modi giving an award to Arora for her crypto price tracking app? Let us know in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or a recommendation, endorsement, or sponsorship of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is 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 content, goods or services mentioned in this article.


Images courtesy of Shutterstock, Harshita Arora, and the Indian government.


Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.

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A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.





BCH Community Leaders Bitcoin.com and Jonald Fyookball Clarify Positions on Funding Proposal

BCH Community Leaders Bitcoin.com and Jonald Fyookball Clarify Positions on Funding Proposal

BCH Community Leaders Bitcoin.com and Jonald Fyookball Clarify Positions on Funding Proposal

Since Btc.top founder Jiang Zhuoer revealed an infrastructure funding proposal from five major mining pools last week, which would fund BCH devs via redirection of 12.5% of BCH coinbase rewards, the Bitcoin Cash community has been understandably bustling with debate, discussion, and suggestions. Reactions have ranged from calling the move a “tax” that is incongruous with the foundational values of bitcoin, to support and ideas on how to best implement the plan. While the inundation of opinion and emotion has been noisy, a few prominent community leaders and groups with real ‘skin in the game’ have weighed in to clarify.

Also Read: Bitcoin Cash Miners Plan $6M Development Fund by Leveraging Block Rewards

BCH Funding Proposal in a Nutshell

The infrastructure funding proposal was revealed to the community at large on January 22, via an article posted to Medium by Btc.top founder Jiang Zhuoer. It opens:

“We, a group of miners representing a majority of identified Bitcoin Cash hash rate, have an interest in ensuring that Bitcoin Cash remains a strong and vibrant cryptocurrency. As such, we recognize that investment in software and commons is crucial to secure a bright future for Bitcoin Cash … To provide this funding, we intend to direct 12.5% of BCH coinbase rewards to a fund that will support Bitcoin Cash infrastructure. This funding will last for 6 months, and it will provide significant and much needed support to the Bitcoin Cash ecosystem.”

Reactions to Zhuoer’s announcement varied widely across the community.

The post goes on to break down the proposed process and projected deployment in general terms, with the issue causing the most controversy being the orphaning non-compliant blocks. A highlighted paragraph of the article reads:

To ensure participation and include subsidization from the whole pool of SHA-256 mining, miners will orphan BCH blocks that do not follow the plan. This is needed to avoid a tragedy of the commons.

Bitcoin.com, Jonald Fyookball Clarify Their Positions

A new Bitcoin.com post on Read.cash, entitled “Bitcoin.com’s Clarifications on the Miner Development Fund,” addresses many concerns with the plan. The article opens by immediately noting that the announcement “created a lot of justified discussion, questions, concerns, and confusion amongst members of the community.” It further notes that at present nothing is set in stone. Regarding doubts about the Hong Kong corporation that would manage the funds, and numerous other issues, Bitcoin.com maintains:

It’s important to understand that the plan proposed by Jiang Zhuoer is still very much in development … many more of the questions proposed online are well taken and the answers are still being worked out by the miners. The proposed changes would not go into effect until May 2020 and there is still plenty of time to work out answers to those questions in a way that satisfies as many parties as possible.

The piece further distinguishes the difference between a coercive tax with legal penalties for non-participation, versus a voluntary choice by miners to leverage their hash power (in accordance with the Bitcoin Whitepaper) toward what they perceive to be a good move for BCH.

“Bitcoin itself is a free market governed by majority hash rate, and honest majority miners are under no moral, legal, or protocol obligation to accept blocks from minority miners if they cannot agree on proper terms of doing business together. This is the free market at work, and we believe Bitcoin cannot work any other way,” the article details.

Regarding the Hong Kong corporation the article notes that “Ultimately, it is miner money since they invest the capital to earn those rewards, and decision-making about the funds should be close to the people who pay the highest opportunity costs for their distribution.”

Prominent BCH and Electron Cash developer Jonald Fyookball also published his support of the proposal in an article entitled Little Known (But Important!) Facts About the Mining Plan. Fyookball acknowledged and validated specific concerns and objections, but remains resolute. “Other attempts/ideas to fund infrastructure via mining haven’t worked,” he writes. “I’ve seen suggestions involving everything from hashrate voting to p2pool, to covenants, etc. No disrespect to the great developers who come up with those ideas, but the reality is that all of those things are too complicated to have a good chance of working in practice, especially in the near term. The developer emphasizes:

This is why Jiang is saying “No Debate” in his announcement. It’s time to cut the nonsense and just do what works. KEEP IT SIMPLE.

Fyookball goes on to note that the plan is temporary, and should remain so, issuing a strong two-point caveat for his support and endorsement:

“1. We absolutely, positively MUST include code in the node implementation that shuts off the donations after 6 months, so it is the default behavior of the software.

2. As far as I can see into the future at this time, we should not, as a community, decide to repeat the maneuver on the subsequent semester, if for no other reason than to avoid setting a bad precedent.”

Community Reactions, Suggestions for Improvement

Reactions to the two posts by Bitcoin.com and Fyookball have of course been mixed, with some still claiming the proposal is not voluntary in nature. Others seem to accept the general idea, but wish to fine tune the mechanics a bit.

The top commenter on the Bitcoin.com piece reacts: “I think if this is truly voluntarism, there shouldn’t be any penalization to miners that don’t want to abide by this fee.” Another user states: “This logic is quite a bit more compelling than the initial feedback, and I think helpful for the silent majority of BCH supporters … I think the fundamentals and nuance make a lot of sense, but are hamstrung by the optics of the easily memeable ‘12.5% tax’ – which we will have to be vigilant about resisting via education, while also not sounding like we’ve drank the Kool-Aid.”

Latest bitcoin cash blocks by mining pool info at press time. https://cash.coin.dance/blocks/today

Many community members, miners and developers — along with Zhuoer himself in his original post — are noting that though the 12.5% fee applied to mining rewards may look like a large number, that’s not the whole story considering BTC miners would also be effectively paying the costs, due to network dynamics. BCH dev Tobias Ruck tweeted: “The BCH infra fund will be paid for by *all* SHA256 miners. That’s the genius part. Donation model would collapse. We’d love it if miners were selfless, but they are profitable businesses.” Both Bitcoin.com and Jonald Fyookball also highlight this important aspect of the plan in their aforementioned articles.

Some community members are even tweaking the plan and suggesting alternate implementations. Founder of Cyber Capital Justin Bons has recently published his proposal to adjust the distribution stage of the plan.

Peer-to-Peer Electronic Cash for Everyone

Bitcoin.com’s article ends with a call to action: “Let’s keep focused on the important work of making Bitcoin Cash fast, cheap, and reliable digital cash for the entire world.” Fyookball’s final paragraph asserts that “the infrastructure plan can help us powerfully continue in 2020 in our mission to bring peer-to-peer electronic cash to the world.” Even those BCH community members genuinely opposed to the proposal are likely taking such a position for similar reason. The overarching goal of BCHers remains getting permissionless money in the hands of as many people as possible, and bringing more individual economic freedom to the world.

What do you think about the new proposal for miners to fund BCH infrastructure development? Let us know in the comments section below.


Images courtesy of Shutterstock, fair use.


Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.

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Graham Smith is an American expat living in Japan, and the founder of Voluntary Japan—an initiative dedicated to spreading the philosophies of unschooling, individual self-ownership, and economic freedom in the land of the rising sun.

Data Shows $25 Billion Worth of Bitcoin and Ether Held by Seven Crypto Exchanges

Data Shows $25 Billion Worth of Bitcoin and Ether Held by Seven Crypto Exchanges

Data Shows $25 Billion Worth of Bitcoin and Ether Held by Seven Crypto Exchanges

On January 3, 2020, a small group of crypto enthusiasts celebrated the second annual Proof-of-Keys day with hopes to get people to withdraw funds from centralized digital currency exchanges. However, exchanges holding massive amounts of BTC only saw their reserves grow larger and data shows that Coinbase now holds 1 million BTC ($8.4 billion). Crypto users are still keeping large sums of digital asset holdings on trading platforms despite the fact that 2019 saw the most exchange hacks in one year over the last decade.

Also read: The Fallout From Onecoin’s Ponzi Scheme Continues to Impact Investors

Despite Proof-of-Keys Day, Seven Trading Platforms Have More Than $25 Billion in Crypto Reserves

2019 saw a significant amount of trading platform hacks and exchange losses according to a recent report authored by the blockchain surveillance firm Chainalysis. The company noted that even though there were more attacks there was less money stolen. However, Chainalysis highlighted that malicious hackers are becoming smarter. “2019 saw more cryptocurrency hacks than any other year,” the report underlined. “But of the 11 attacks that occurred this year, none of them came close to matching the scale of major heists such as [2018]’s $534 million Coincheck hack.” Last year digital currency exchanges lost approximately “$283 million worth of cryptocurrency” due to breaches and malicious hackers.

Data Shows $25 Billion Worth of Bitcoin and Ether Held by Seven Crypto Exchanges
Despite the fact that 2019 saw the most exchange hacks people are still storing billions of dollars worth of cryptocurrencies on centralized exchanges.

About a month before the second annual Proof-of-Keys day initiated by Trace Mayer, news.Bitcoin.com reported on the vast number of coins centralized exchanges held in reserve. The list was provided by Bituniverse using the firm’s Exchange Transparent Balance Rank (ETBR). The ETBR list had shown that Coinbase held roughly 966,000 BTC during the first week of December 2019. Today, the ETBR report from Bituniverse shows the San Francisco-based exchange now has 1.03 million BTC ($8.5 billion) held in reserves. The data from Bituniverse stems from onchain exchange balances recorded by Etherscan and Peckshield.

Data Shows $25 Billion Worth of Bitcoin and Ether Held by Seven Crypto Exchanges
Between these seven trading platforms there’s more than $25 billion in BTC, ETH, and USDT reserves.

Additionally, the numbers from Bituniverse can also be cross-referenced with data from Chain.info’s crypto exchange reserve list. Chain.info’s data is slightly different, showing that Coinbase holds 983,000 BTC but most of the data is fairly consistent with the findings from the Bituniverse application. Figures indicate that Huobi is the second-largest cryptocurrency exchange by reserve count with 462,000 BTC ($3.8 billion), 1.8 million ETH, and a large number of USDT as well. Binance has around 307,000 BTC ($2.5 billion) as of Saturday and 2.6 million ETH held in reserves as well. Then there’s Bitfinex (290,000 BTC or $2.8 billion), Bitmex (274,000 BTC or $2.28 billion), Bitstamp (242,000 BTC or $2 billion), Okex (211,000 BTC or $1.83 billion), Kraken (173,000 BTC or $1.8 billion), Bittrex (125,000 BTC or $1.2 billion), and Gemini (95,000 BTC or $922 million).

Proof-of-Solvency and the Recent Trend of Independently Recorded Crypto Reserve Lists

Other exchanges with a vast amount of digital assets held in reserves include Bitflyer, Gate.io, Poloniex, and Hitbtc. Bituniverse and Chain.info’s data shows that overall the centralized exchanges accumulated more reserves since the first week of December. Not only are a few crypto advocates afraid that large exchanges could be compromised for billions in digital assets by hackers, but there’s also the fear of fractionally reserving bitcoins.

Data Shows $25 Billion Worth of Bitcoin and Ether Held by Seven Crypto Exchanges
Data from Chain.info is slightly different than the list provided by the Bituniverse application. Chain.info tracks the number of addresses and large deposits and withdrawals.

There have been many articles and academic papers discussing the subject of proof-of-reserves when it comes to cryptocurrencies. Researchers from Stanford University published a report in 2015 called “Provisions” which tackles the subject of exchanges and reserve transparency. The Stanford researchers explained that proof-of-solvency “demonstrates that the exchange controls sufficient reserves to settle each customer’s account.” The paper introduces a privacy-preserving proof-of-solvency. “Whereby an exchange does not have to disclose its Bitcoin addresses,” the 33-page long academic paper notes.

Data Shows $25 Billion Worth of Bitcoin and Ether Held by Seven Crypto Exchanges
For years now cryptocurrency advocates have discussed concepts for proof-of-solvency with cryptocurrency exchanges. Stanford researchers in 2015 wrote a paper called “Provisions” which is a privacy-preserving way to show reserves without disclosing addresses.

During the last few months, platforms like Bituniverse and Chain.info have published reserve lists based on data provided by independent parties like Peckshield. Exchanges shown on these lists have neither confirmed or denied the bitcoin reserve data is legitimate. A number of community members within the cryptosphere believe trading platforms should provide their own reserve numbers so they can exemplify transparency themselves. Meanwhile, even though a lot of crypto influencers and proponents tell people regularly to store cryptos in a noncustodial fashion, the great majority of digital asset owners continue to store them on centralized trading platforms.

What do you think about the billions worth of BTC held on centralized digital currency exchanges? Let us know what you think about this subject in the comments section below.


Image credits: Shutterstock, Bituniverse App, Stanford, Chainalysis, Chain.info, Wiki Commons, Fair Use, and Pixabay.


Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The Local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.

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Jamie Redman

Jamie Redman is a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source code, and decentralized applications. Redman has written thousands of articles for news.Bitcoin.com about the disruptive protocols emerging today.

Companies Keep Flocking to Swiss Crypto Valley, Over 1,000 Jobs Added in a Year

Companies Keep Flocking to Swiss Crypto Valley, Over 1,000 Jobs Added in a Year

Companies Keep Flocking to Swiss Crypto Valley, Over 1,000 Jobs Added in a Year

Crypto Valley, a fintech-friendly region centered on the canton of Zug, has been expanding to other parts of Switzerland and neighboring Liechtenstein. Despite all the challenges facing the blockchain industry, favorable regulations and improving access to banking and legal services are attracting more and more crypto companies. Their number has increased for a third consecutive year and many new jobs have been created.

Also read: Leading Swiss Stock Exchange Offers 12 Crypto Exchange-Traded Products With One That Shorts Bitcoin

More Than 800 Crypto Firms Based in Switzerland and Liechtenstein

Almost 100 new businesses established a presence in the Swiss Crypto Valley last year, shows a new study. Its findings were released during the CV Summit in Davos on Thursday, a blockchain-focused event that takes place during the World Economic Forum’s annual meeting. The total number of companies working with digital assets and blockchain technologies in the Crypto Valley has reached 842, the survey reveals, compared to 750 in its last year’s edition. Jobs in the sector have also increased substantially – from 3,300 in 2018 to 4,400 by the end of 2019, the Swissinfo news portal reported.

Companies Keep Flocking to Swiss Crypto Valley, Over 1,000 Jobs Added in a Year

The news comes despite a slowing growth rate across the industry, a trend that started after the boom of 2017 and continued into the first half of 2018. The number of “startup casualties,” the outlet notes, is also mounting. Failed projects include crypto company Alethena, tokenization platform Tend, real estate startup Swiss Real Coin, alternative banking project Oyoba, and digital payment provider Monetas. Some of these companies simply failed to persuade investors as to the viability of their business plans.

At the same time, funding for the top 50 entities in the report reached $4 billion and these are valued at a total of $25.3 billion. Among the newly established or relocating members of the industry added to the 2019 list are Facebook’s Libra, blockchain developer Casper Labs which moved to Switzerland, crypto exchange Bittrex Global which set up an office in Liechtenstein, Six Group’s digital exchange initiative SDX, licensed crypto banks SEBA and Sygnum. The last two companies, along with Bitcoin Suisse which also expects approval to become a bank, are leading employers as well.

Established Startups Attract More Venture Capital Funding

The Crypto Valley is home to five unicorns, or projects valued at more than $1 billion. These are Ethereum ($14.4B), Dfinity ($2B), Polkadot ($1.2B), Bitmain ($1B), and Libra ($1B). Another list names unicorn contenders like Tezos ($924M), Cardano ($869M), and Cosmos ($818M). The authors of the analysis, Swiss business incubator Crypto Valley Venture Capital (CVVC), PwC subsidiary Strategy& and other organizations, point out that “the report highlights the diverse ecosystem in blockchain and cryptocurrency consisting of startups, corporates, and government” as well as its “maturity and substance.” Mature startups that are at later, more advanced stages of their lifespan typically attract more venture capital funding, which has generally increased in the past few years.

Companies Keep Flocking to Swiss Crypto Valley, Over 1,000 Jobs Added in a Year

A positive development in that respect is the gradual opening of the banking sector that comes with increasing regulatory certainty. While large banks and central banks recognize the potential of crypto-related technologies, they often create difficulties for crypto businesses. Smaller financial institutions, however, are more likely to engage with the industry. Swiss banks involved in the crypto space include Hypothekarbank Lenzburg, Maerki Baumann, and Arab Bank (Switzerland). “With regulatory certainty in Crypto Valley, private banks have been leading the adoption and provision of services,” the researchers note. Access to legal services has also improved markedly with an ever expanding number of law firms offering advice to crypto companies in both Switzerland and Liechtenstein. More than two dozen of them have been listed in the report.

During the summit, CVVC CEO Mathias Ruch noted the increased interest from large Chinese banks, government agencies and investors in Swiss blockchain know-how. Last year, Switzerland introduced broad changes to its existing laws in order to incorporate rules for the crypto space while Liechtenstein adopted a new Blockchain Act meant to attract crypto businesses by providing more regulatory clarity. This progress has led to the formation of multiple crypto hotspots – not only Zug, which is home to over half of all companies based in the Crypto Valley (425), but also Zurich, Geneva, Ticino, Vaud, Lucerne, and Bern. Liechtenstein has 80 registered blockchain businesses in its jurisdiction.

What are your thoughts on the expansion of Switzerland’s Crypto Valley? Tell us in the comments section below.


Images courtesy of Shutterstock.


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Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Bulgaria. Quoting Hitchens, Lubomir says: ”Being a writer is what I am, rather than what I do.“ International politics and economics are two other sources of inspiration.

The Fallout From Onecoin’s Ponzi Scheme Continues to Impact Investors

The Fallout From Onecoin's Ponzi Scheme Continues to Impact Investors

The Fallout From Onecoin’s Ponzi Scheme Continues to Impact Investors

In late 2019, the remnants of multi-level Ponzi scheme Onecoin crumbled. However, Onecoin’s founder, dubbed the ‘crypto queen,’ Ruja Ignatova, remains on the run and law enforcement haven’t caught up with her yet. Moreover, police are investigating two churches in New Zealand that allegedly have links to the Onecoin operation and founders.

Also read: Onecoin Websites Suspended as the $4 Billion Ponzi Crumbles

After Onecoin Operations Implode in Cairns, Investors Accept They Were Scammed

In 2014, Ruja Ignatova, Sebastian Greenwood, and Konstantin Ignatov launched a project called Onecoin and allegedly acquired $4 billion from investors unlawfully. Ignatova and her cohorts claimed that Onecoin was a legitimate cryptocurrency and the project followed the coattails of the crypto hype up until mid-2019. Multiple reports had disclosed that there was no blockchain behind Onecoin and the product was merely a multi-level marketing (MLM) Ponzi.

The Fallout From Onecoin's Ponzi Scheme Continues to Impact Investors
From left to right: Ruja Ignatova, Konstantin Ignatov and Sebastian Greenwood are the three accused creators of the Onecoin Ponzi scam. In January 2020, Judge Valerie Caproni gave Onecoin victims permission to serve Ruja Ignatova by alternative means. Ruja Ignatova has been missing for well over a year and law enforcement have not caught up with her. Konstantin Ignatov and Sebastian Greenwood were arrested in 2019.

A few weeks ago, news.Bitcoin.com reported on the Onecoin project falling apart at the seams as leaders were arrested and various websites were seized. For a while, a few Onecoin websites remained operational but most have since been taken down by domain hosts or local law enforcement. Websites like onecoin.eu, oneworldfoundation.eu, and oneacademy.eu show a “server hold” notice when entering the site.

The Fallout From Onecoin's Ponzi Scheme Continues to Impact Investors
The Cairns Post details that the Onecoin MLM Ponzi scheme infected the Australian region.

Now in certain locations around the world, Onecoin side projects are also imploding and revealing how large the crypto Ponzi operation has grown over the years. Reports are now showing how Onecoin was very prevalent in Australia and New Zealand, signing up investors from numerous cities. On January 25, the Cairns Post reported on how investors from the east coast have started to accept that they have lost money. The Cairns Post exposed how the scheme was affecting Cairns residents in November but at the time investors were still in disbelief. Now Cairns residents have come to a point of acceptance, the news outlet notes. “I have come to the realization that the truth has been misrepresented to the Onelife network,” a Cairns-based Onecoin investor wrote.

Shilling Onecoin Packages in Church and Living the ‘High Life’ in Florida on House Arrest

Further, it seems that the Onecoin Ponzi infected the town of Auckland, New Zealand, and the region’s Samoan church. New Zealand’s Department of Internal Affairs (DIA) is currently investigating the Auckland-based Samoa Worship Centre over connections with the Ponzi. Onecoin leaders allegedly sold high-profile Samoan church community members “tens of thousands of dollars” worth of Onecoin products.

The Fallout From Onecoin's Ponzi Scheme Continues to Impact Investors
The Samoan Independent Seventh Day Adventist Church (SISDAC).

Reports disclose that both the Samoan Independent Seventh Day Adventist Church (SISDAC) and the organization’s sister worship center were used to shill Onecoin packages. According to the Auckland worship center’s pastor, Avele Tanielu, his church had no ties to the Onecoin operation. The DIA is investigating both churches and Onecoin operations are banned in Samoa. SISDAC has told the press that it was cooperating with authorities and maintains the church itself did not transgress against any money laundering laws.

The Fallout From Onecoin's Ponzi Scheme Continues to Impact Investors
Florida resident and former Locke Lord LLP attorney Mark S. Scott is fighting charges against him that claim he helped Onecoin associates launder $400 million in the British Virgin Islands.

In addition to the church investigations and the implosion in Cairns, in the U.S. former attorney Mark Scott has been allowed an extension to prepare motions to defend himself against a prison sentence. Scott is accused of laundering $400 million worth of Onecoin’s proceeds. Currently, Scott is under house arrest in Florida and his lawyers are allegedly preparing for a new trial or an acquittal motion. Additionally, Scott’s legal team says that Scott needs to undertake treatment for “longstanding medical issues” and they are requesting more time to prepare for new motions. However, media reports and prosecutors also note that Scott was recently “spotted out to dinner” with bodyguards and was living the “high life” in Florida.

New York Southern District Court Gives Victims Permission to Serve the ‘Crypto Queen’ by Alternative Means

While the aftermath of Onecoin’s demise continues to shake victims, it seems as though most of the operations are coming to a halt. The so-called crypto queen Ruja Ignatova has been missing for well over a year and she has yet to be charged like Sebastian Greenwood and Konstantin Ignatov were last year. In the U.S., Judge Valerie Caproni has authorized victims who are suing Onecoin and Ignatova to serve her by alternative means.

The Fallout From Onecoin's Ponzi Scheme Continues to Impact Investors
The “crypto queen” Ruja Ignatova has been on the run for well over a year. She has yet to be contacted by law enforcement authorities and victims have not been able to serve her.

The people suing Ignatova attempted to serve her through the onecoin.eu email account she used since 2016. Now thanks to Caproni’s court order, Onecoin victims have permission for alternative service. This means the plaintiffs can serve her with registered first-class mail to the Dubai headquarters, message her social media accounts and other means of contact. Caproni stressed that the plaintiffs must notify the court in writing whether they received a sender-return error for Ignatova or a contact message.

What do you think about the Onecoin Ponzi? Let us know what you think about this subject in the comments section below.

Image credits: Shutterstock, Fair Use, Twitter, Wiki Commons, and Pixabay.

Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The Local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.

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Jamie Redman

Jamie Redman is a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source code, and decentralized applications. Redman has written thousands of articles for news.Bitcoin.com about the disruptive protocols emerging today.

Leading Swiss Stock Exchange Offers 12 Crypto Exchange-Traded Products With One That Shorts Bitcoin

Leading Swiss Stock Exchange Offers 12 Crypto Exchange-Traded Products With One That Shorts Bitcoin

Leading Swiss Stock Exchange Offers 12 Crypto Exchange-Traded Products With One That Shorts Bitcoin

Switzerland’s principal stock exchange, SIX Swiss Exchange, now has 12 cryptocurrency exchange-traded products listed. The latest addition, the 21shares Short Bitcoin, allows investors to profit from falling prices of the digital currency. Other listed crypto products include those that track the price movements of BCH, BTC, ETH, XRP, BNB, and tezos.

Also read: Regulatory Roundup — New US Crypto Tax Bill, Central Banks Join Forces on Digital Currencies

Newest Addition: An Inverse Product

SIX Swiss Exchange has listed an inverse bitcoin exchange-traded product (ETP) issued by fintech company Amun AG. The company announced on Thursday that this product “is the first short or inverse product of its kind using a digital asset as the underlying for an ETP structure.”

The product “tracks the opposite performance of bitcoin to give investors an easy, cost-effective and convenient way to gain exposure in both directions of the bitcoin price movements,” the company detailed. It is “designed to enable investors to profit from falling adverse price movements of bitcoin.” According to the announcement:

The 21shares Short Bitcoin ETP (Ticker: SBTC) seeks to provide a -1x return to the performance of bitcoin for a single day. This product obtains short exposure through borrowing bitcoin and simultaneously selling it on an execution platform.

Leading Swiss Stock Exchange Offers 12 Crypto Exchange-Traded Products With One That Shorts Bitcoin
The above chart reflects the value of a $100 investment at the inception of the ETP, as of Dec. 31, with 2.5% per annum fee deducted. Returns shown are for illustrative purposes only and do not reflect any transaction costs or expenses. Source: Amun AG.

According to SIX Swiss Exchange’s website, the 21shares Short Bitcoin ETP started trading on Jan. 22. It is rebalanced daily, resetting at the end of each day, and its performance is not rolled over.

12 ETPs Listed on Leading Swiss Stock Exchange

SIX Swiss Exchange has a range of crypto ETPs listed. The first one was the Amun Crypto Basket Index ETP in USD, which began trading on Nov. 21, 2018.

The exchange then listed 10 more ETPs in 2019, nine of which were issued by Amun. They are Crypto Basket Index, Bitcoin, Ethereum, XRP, Bitcoin Cash, Binance, Tezos, Bitcoin Suisse Index, Bitwise 10, and Sygnum Platform Winners Index — all trade in USD, except the Amun Bitcoin Suisse Index which trades in CHF. The 10th ETP launched on SIX Swiss Exchange last year was Wisdomtree Bitcoin in USD.

Leading Swiss Stock Exchange Offers 12 Crypto Exchange-Traded Products With One That Shorts Bitcoin

This year, besides the aforementioned inverse bitcoin ETP, the leading Swiss stock exchange began offering several existing Amun ETPs in additional currencies. On Jan. 7, the Amun Bitcoin ETP and the Amun Ethereum ETP started trading in both CHF and EUR in addition to USD. On the same day, the Amun Crypto Basket Index ETP started trading in EUR, with the Amun Crypto Basket Index as the underlying investment. According to Amun, all of its crypto ETPs are listed on SIX Swiss Exchange, BX Swiss and Boerse Stuttgart in CHF, USD and EUR.

Amun further explained in its Thursday announcement that “21shares” now represents the new name of all ETPs it issues. The 11 existing ones will be migrated over to the new brand during the second quarter of this year. Moreover, the company’s base prospectus for exchange-traded products has recently been approved by the Swedish Financial Supervisory Authority.

What do you think of all the cryptocurrency ETPs listed on SIX Swiss Exchange? Would you invest in the new inverse bitcoin ETP? Let us know in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or a recommendation, endorsement, or sponsorship of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is 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 content, goods or services mentioned in this article.


Images courtesy of Shutterstock and Amun AG.


Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.

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Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.





Iran Issues More Than 1,000 Cryptocurrency Mining Licenses

Iran Issues More Than 1,000 Cryptocurrency Mining Licenses

Iran Issues More Than 1,000 Cryptocurrency Mining Licenses

The Iranian government has reportedly issued more than 1,000 licenses for cryptocurrency mining since it began regulating the industry. A number of large mining farms have set up in the country, but high electricity tariffs have kept many small investors away.

Also read: Regulatory Roundup — New US Crypto Tax Bill, Central Banks Join Forces on Digital Currencies

1,000+ Licenses Granted to Miners

An official with Iran’s ICT Guild Organization, Amir Hossein Saeedi Naeini, has revealed the state of the country’s cryptocurrency mining industry, the Financial Tribune reported Friday. In an interview with Ibena publication, he said that cryptocurrency mining is a new industry but many people have been attracted to it in Iran. Noting that miners need to obtain a license, he shared:

The Ministry of Industry, Mine and Trade has issued more than 1,000 licenses for cryptocurrency mining in the country.

The official further elaborated, “Our studies show that the crypto mining industry has the potential to add $8.5 billion to the economy,” the news outlet detailed.

Major Challenge – Electricity Cost

Amir Hossein Saeedi Naeini believes that the cryptocurrency mining industry has the potential to help the Iranian economy. However, he explained that the cost of electricity is a major challenge for crypto miners in Iran. While “A number of large and industrial farming mines have been set up,” the official told the news outlet:

High electricity tariffs plus stringent regulations have made the sector less appealing for small investors.

He opined, “the operating conditions in this industry should not be such that only large capitalists enter the cryptocurrency mining market but that all miners can operate,” emphasizing that modifying the electricity rates and terms could boost the crypto mining industry and generate more revenue.

Amir Hossein Saeedi Naeini

Iranian Crypto Mining Law

Iran’s cryptocurrency mining industry has been regulated since last year. The Iranian government officially recognized cryptocurrency mining as an industry in August after months of deliberation, Aljazeera reported on Aug. 4, 2019. Crypto miners must be licensed by the Ministry of Industry, Mine and Trade before beginning their operations.

The recognition of the industry followed a crackdown by various government authorities on crypto miners accused of using subsidized power. In June last year, Iran’s state television reported that the authorities seized approximately 1,000 bitcoin mining machines in two abandoned factories allegedly using government-subsidized electricity. A spokesperson for the country’s Energy Ministry said at the time that these mining machines were responsible for a 7% increase in power consumption.

“The electricity price offered to miners will be equal to the average rial price at which Iran exports its electricity to other nations, or to 70% of the average rial price at which the country ships off its natural gas,” the news outlet explained. Furthermore, the cabinet’s directive states that “Using electricity or natural gas to mine cryptocurrencies is forbidden in peak consumption times,” and calls for the ministry to set peak hours and install a grid of smart power meters. In addition, “using electricity and gas provided at household, agricultural or industrial grades is forbidden and will be met with legal action if found out,” the directive adds.

However, Amir Hossein Saeedi Naeini told Ibena that discussions are underway to set more favorable terms for crypto miners. Meanwhile, Iranian President Hassan Rouhani has been discussing creating a unified cryptocurrency for Muslim countries with leaders of other Muslim nations.

What do you think of the mining industry in Iran? Let us know in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or a recommendation, endorsement, or sponsorship of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is 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 content, goods or services mentioned in this article.


Images courtesy of Shutterstock and Ibena.


Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.

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A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.