Digital Gold: Earn Money on the Web

Violence against cryptocurrency owners

Unfortunately, there has also been violence in the field of cryptocurrency. After all, cryptocurrency owners are owners of big money. And where there is big money – there will be swindlers and criminals.

So, on July 9, 2018, Bitcoin Core developer Jameson Lopp launched a repository (github.com/jlopp/physical-Bitcoin-attacks) in which he collected and documented cases of physical violence against Bitcoin owners from both criminal elements and law enforcement agencies. The resource is available on GitHub and currently holds more than 40 different incidents that took place since December 2014, when police special forces broke into Hel Finney’s house in Santa Barbara. He is a famous American programmer and one of the first Bitcoin users; he received the first Bitcoin transaction of 10 coins from the creator of the project Satoshi Nakamoto.

The list also included incidents that occurred throughout the world, including cases of extortion of cryptocurrency under the threat of death, theft from Bitcoin ATMs and theft of mining equipment.

The list includes the abduction of the leading analyst of the EXMO cryptocurrency exchange, Pavel Lerner in Kiev at the end of 2017, the robbery of the founder of the “Kryptach” YouTube channel Pavel Nyashin (Makushin), who unfortunately was found hanged, stealing $100,000 in Bitcoins from Russian blogger Maxim Lotsok on the island of Phuket in Thailand, as well as the theft of 300 BTC from one of the creators of cryptocurrency Prizm Yuri Mayorov in April in Moscow.

As Jameson Lopp (one of the most well-known developers of Bitcoin), whose home in North Carolina in October 2017 was nearly taken by assault by US special forces, notes, 23 of the listed incidents involved physical violence. And only in one case could the victim of the criminals defend himself successfully – this is about localbitcoins trader Ryan Rice from Miami, who they tried to rob during a deal to sell Bitcoins.

One of the last documented cases of attempted robbery was recorded on October 15, 2018 in Oslo, Norway when a 24-year-old man was murdered in his home after exchanging large sum of BTC.

In addition, on December 15, 2017, representatives of the main investigative department of the Security Service of Ukraine (SBU) with two witnesses entered the apartment of the founder of ForkLog Anatoly Kaplan in Odessa to start the search. Formally, the basis for the search was the criminal proceedings against a group of persons from the United States and Ukraine, who, according to investigators, developed a criminal scheme to seize money from third-party payment cards. During the search, the SBU officers seized several devices with cryptocurrencies stored on them, a laptop and other personal belongings of Anatoly Kaplan. At the same time, one of the officers of the Security Service of Ukraine (SBU) attempted to withdraw Bitcoins to his wallet during the search. Also, the very next day, 305 ETHs were withdrawn from Anatoly’s Ethereum wallet. At the same time, the search took place at the ForkLog office in Odessa, and as a result, the company’s cash, all the equipment (about ten iMac devices) and a bottle of Kraken rum were confiscated. ¹⁸

I hope the criminals got what they deserved, and the Jameson Lopp repository will no longer be replenished.

A brief history of Bitcoin. Interesting facts

Perhaps, after reading a little bit, you will have your own, independent opinion about Bitcoin. I really hope that you will see the advantages of Bitcoin over ordinary fiat (paper) money. I want you to also realize what benefits you can get from it. Of course, you should not invest all your savings in Bitcoin. But, as it seems to me, this asset should appear in each of our investment portfolios.

If you want to learn a little more about Bitcoin, I recommend that you watch the documentary “Ascent of Bitcoin” (2014), as well as the movie “State VS Bitcoin” from BitNovosti. A lot of useful information can be found also on the website Bitcoin.org. And if you don’t have much time, I’ll briefly tell you about its appearance. So, the author and developer of Bitcoin is a kind of mysterious Satoshi Nakamoto (perhaps this is even a group of people). Until now, virtually nothing is known about him, and the creator has never appeared to the world.

In 2008, a file was published in the network with a description of the protocol and the principle of the payment system in the form of a peer-to-peer network. According to Satoshi, the development began in 2007. In 2009, he completed the development of the protocol and published the code of the client program.

On January 3, 2009, the first block and the first 50 Bitcoins were generated. The first Bitcoin transfer transaction took place on January 12, 2009 – Satoshi Nakamoto sent 10 Bitcoins to Hal Finney. The first exchange of Bitcoins for national money occurred in September 2009 – Martti Malmi sent to the user with the alias NewLibertyStandard 5050 Bitcoins, for which he received about $5 in his PayPal account.

The first exchange of Bitcoins for real goods occurred in May 2010 – the American Laszlo Hanyecz received 10 pizzas from delivery for 10,000 Bitcoins. ¹⁰

On May 22, the Bitcoin community around the world celebrated the so-called Pizza Day, which can also be fairly called the most expensive pizza in the world during the day. It was on this day, May 22, 2010, that a Las Vegas programmer, Laszlo Hanyecz, with the help of the Bitcoin Talk forum, paid for two Papa John’s pizzas, not with traditional money, but with a little-known cryptocurrency at that time called Bitcoin. Buying two pizzas cost him 10,000 BTC, which at that time, was about $25. At the moment, at the current rate, it would be about $34 million.

In this book, I want to pay more attention to recent events, when interest in Bitcoin has grown dozens, if not hundreds of times.

So, at the beginning of September 2017, the Chinese documentary film “Bitcoin: Shape the Future,“created by the Bitkan cryptocurrency exchange, was shown at the BTC & Blockchain Summit in Beijing. You can get acquainted with it on YouTube. The Bitkan film tells the revolutionary story of Bitcoin through the eyes of the Chinese community. The film also presents the work of manufacturers of ASIC, large mining pools and the largest international Bitcoin exchanges. The company reported that they managed to make the film informative, going into details about the emerging cryptocurrency economy, using a unique video series and interviews with China’s most famous Bitcoiners. ¹⁹

On October 12, 2017, the Bitcoin rate reached $5,216.2 for 1 BTC (according to the Bitfinex exchange). Cryptocurrency capitalization was $84.7 billion.

On November 20, 2017, the Bitcoin course broke all existing records, rising to the level of $8,082. On November 20, 2016, Bitcoin showed a maximum of $760. It turns out that the price increase in percentage was 1063% in one year. There were several reasons for this: On April 1, 2017, Japan officially recognized Bitcoin as a means of payment. In addition, options on futures and ETFs became the main topics in the news (CBOE expected to start trading in Bitcoin futures on December 10, 2017). Investments in Bitcoin became available to everyone: from banks and insurance companies to governments. ²⁰ I think this is just incredible growth. No asset is capable of such growth.

In early December 2017, the US Futures Trading Association requested the regulator to cancel the start of Bitcoin futures, since the use of a self-certification scheme for such new products “does not correspond to the potential risks that underlie such trading.” It is believed that the US Futures Trading Association lobbies the interests of large banks and brokers, including Goldman Sachs, Morgan Stanley, JPMorgan and Citigroup.²¹ And yet, I doubt that the leaders of these financial organizations did not know what effect the start of Bitcoin futures trading would have on the Bitcoin price.

On December 10, 2017, the largest US options exchange, CBOE Global Markets (it accounts for more than 51% of option trading in the United States and 91% of all index options) launched trading in Bitcoin futures. After 10 minutes, the site of the exchange “fell” under the onslaught of an incredible number of visitors. The leaders of many of the largest banks were seriously concerned about such a loud arrival of Bitcoin on Wall Street. As you know, some bank leaders and industry leaders have publicly ridiculed Bitcoin in recent months, calling it a bubble, a pyramid, banal fraud, and a “money laundering index.” Now imagine that these same investment banks start helping clients to invest in cryptocurrencies – this could be a serious blow to the reputation of the bank.

Bankers are frightened by Bitcoin’s volatility, which is a serious danger for the bank – its price can change dramatically in a few minutes, and there is no accepted model to account for it on the balance sheet.

The letter from the Futures Industry Association, which appeared in early December, said that the CBOE and the CME Group begantrading in Bitcoin futures without proper consideration of risks. ²²

Earlier, analysts noted that the launch of Bitcoin futures could lead to the collapse of the cryptocurrency rate as large institutional investors (banks, insurance, investment funds, etc., that is, financial giants who have many years of investment experience) can start playing on lowering. However, the Bitcoin rate for the morning of the next day was $16,231 at the Bitfinex exchange. The first day of trading on CBOE Global Markets for Bitcoin futures went well. By the end of the day, 3969 contracts were sold and purchased. During the day, futures went up by $3,545 to $18,545. The price of Bitcoin also increased. ²³ Everything seems to be going well.

But after a few days, Stephen Gandel (Bloomberg columnist) noted: there are already some signs that not everything is going smoothly. There was a decrease in the price of the January contract by $815, and the trading volume decreased several times. It was a constant and unusually large gap between the price of Bitcoin and futures contract. ²⁴

On December 17, 2017, the weighted average rate of the most popular cryptocurrency in the world, Bitcoin, reached a new psychological mark of $20,000 with a capitalization of $334.5 billion. But at 5:00 pm on the same day, the first trading in Bitcoin futures at CME began. Already on December 19, the price of Bitcoin began to plummet.

Many people believe that Bitcoin futures were created in order to keep the price and prevent ordinary people from getting rich, as well as to keep stocks and bond markets at a high level. Fiat currency should not lose its value. In addition, all conditions must be created so that large investors can buy at a low price.

Is there a Cartel?

The version with the artificial collapse of the cryptocurrency market has long ceased to be a theory from the sphere of the universal conspiracy.

There is even an opinion about the existence of a certain “Cartel” which includes the most influential people of the planet and financial giants. It is believed that they decided to subjugate the decentralized cryptocurrency themselves to sow panic, and provoke a massive sale of Bitcoin for its subsequent purchase. After all, it is not surprising: in connection with the rush around Bitcoin, there were many interested parties in its acquisition, including institutional investors. This resulted in an outflow from the stock market. In addition, ordinary people were able to get rich with the help of Bitcoin. Financial giants didn’t want it. Only the favorites can be in the circle of the favorites.

I can not say with certainty that the Cartel exists. But, if you think carefully and look at the graphics, it is quite likely. Although there is a more popular and accepted opinion that the price reduction is nothing more than the usual correction.

But here are some more thoughts of another cryptoinvestor.

He says that institutional investors expect regulation and understandable instruments in the crypto market. And now every crypto holder hopes that institutional investors are about to enter the market, and the BTC will fly up. But the less people on board the ship, the greater the income of the giants, so they definitely will not tolerate extra ones on board.

In order to knock out the weak, they have methods that have long been proven in other markets.hTey are not in a hurry; they act in cold blood and with the help of a knurled pattern.

Phase 1. Sharp price reduction.

Media is bought, the first impulse movement is being made, and then panic takes the weakest hands out of the market. This phase was from mid-December 2017 to early February 2018.

Phase 2. Lateral movement.

After the completion of the first phase, recovery takes place; many are overbought, and another dump goes on, which goes into long-term lateral movement. The purpose of this long-term lateral movement is to squeeze the rest of the holders. For institutionalists, half a year or a year is not a deadline at all; this is an instant, they don’t need to buy food with this money, unlike ordinary people, so they are ready to wait in cold blood while the others literally eat up their deposits.

Phase 3. Flaccidity.

After the lateral movement, ordinary investors lose interest in the cryptocurrency. Requests in Google are at the minimum values, and HYIP finally fades away. Leaders of crypto opinions, experts and bloggers are beginning to change their position. At this time, even strong investors sell out. ²⁵

He sums up that the institutionalists entering the market do not at all want to make us rich; we are competitors for them. He believes that the excitement around cryptocurrencies will flare up with even greater force only after the institutions themselves enter this market.

He also says the following: “If you have a depressed emotional state from a drawdown, then this is normal, as it is caused more than once by a worked-out scheme. Shift the focus from the fact that the rate falls to those earning opportunities that the market now opens before us.” ²⁵

To understand in more detail what is what, and whether there is a probability of the existence of the Cartel, let’s return to the main events that have occurred in the world of cryptocurrencies since the beginning of 2018.

On January 23, 2018, the rate of the most popular cryptocurrency dropped to $9 955 on the Bitfinex exchange. It was believed that the reason for this was the news about the strengthening of the regulation of the cryptocurrency market by the authorities of China and South Korea. It also became known that the South Korean stock exchanges, working with cryptocurrency, will give a quarter of their profits to the state. There was also unrest in the West. Goldman Sachs, one of the world’s largest investment banks, began sending out a warning to the major customers about the danger of a “cryptocurrency bubble.”²⁶ However, we should not forget that on January 17, the first in the history of Bitcoin futures on the Chicago Stock Exchange (CBOE) expired. At CME, the second exchange representing the possibility of trading in cryptocurrency futures, the expiration of the first contracts expired on 26 January. And two days after this, the price of Bitcoin again rapidly crawled down, dropping on February 5 to the level of $6,900.

Well-known analyst and investor, Brian Kelly said at the end of January 2018 that falling prices “are incredibly healthy for the ecosystem; you shake out weak hands, and you get strong hands.” This is exactly what institutional investors and financial giants need.

In early February 2018, the statements of the Ukrainian businessman and investor, Mark Ginsburg on this issue are very interesting. According to the entrepreneur, the main reason for bringing down the Bitcoin course are centralized actions by financial institutions, banks and hedge funds.

Mark Ginsburg recalls that one of the reasons that sharply collapsed the cryptocurrency market was the deliberately false rumors that South Korea wanted to impose a ban on cryptocurrency, which were avalanche-like in social networks and in the media. (For example, on February 7, unknown persons broke into the Chinese regulator’s mail server and sent an invitation to a press conference in China to leading news media, during which they allegedly had to inform journalists of the official ban on all cryptocurrency operations in the country, including mining. In addition, on February 1, it became known that the news about the prohibition of cryptocurrency in India, which was actively disseminated in the media and significantly affected the decline of the Bitcoin rate, turned out to be a fake deal. ²⁷)

In fact, it was only a matter of changing the rules of regulation in China. “All financial institutions, banks and other serious companies …try to sow panic so that ‘hamsters’ (ordinary people without experience and big financial opportunities who wanted to try their hand at playing on the market) leave the markets, and then they could buy all for a small cost. And then later, the course will rise again, and they will get their profit,” Ginsburg said. “Cryptocurrency is one of those systems that has independent properties. In this case, there are many factors that are too difficult to realize for a simple user. Not it’s worth sowing an extra panic. Last year, the Bitcoin rate fell by 30% five times, but then it continued to grow. And now the situation will not be an exception. Smart people already know what’s going on,” Ginsburg concluded. He advised not to sell Bitcoins and wait. ²⁸ This is one of the most useful tips you can hear now. I hope you have much more enthusiasm.

Further – more interesting. On February 8, 2018, the creator of the RightCoin project and lawyer, Alexander Treschev declared that an article published by Bloomberg about mathematicians from the University of Pittsburgh, who, using a mathematical model, concluded that cryptocurrency will never stabilize and is a typical “bubble,” is nothing but an attempt to crush the cryptocurrency market. Treshchev noted that no mathematician can predict such a probability, not so much because of the laws of mathematics as the emotions at work on the market. According to the expert, behind this publication can be large bankers who want to derail the course of cryptocurrency and cash in on it. “The banks themselves began to play in this market and appeared with their cryptocurrency ‘bulls’ and ‘bears.’ Banks are now quietly buying cryptocurrency at the lowest rates. This is a manipulative-speculative market, and all the emerging information is to mislead ordinary people… It is the banks that are specifically destroying the market so that it is cheaper to buy cryptocurrency and enter this market,” Treshchev concluded. ²⁹ I think it’s good that I read this news. When you collect information in parts, the overall picture emerges.

Attempts to crash the market did not end there.

During an interview with CNBC on March 6, Kenneth Rogoff, a Professor of Economics at Harvard University, who previously served as chief economist at the International Monetary Fund, said that the rate of the first cryptocurrency would gradually fall under pressure from the governments of leading countries and eventually reach $100. “I think that the cost of Bitcoin will be a tiny part of what it is now. After 10 years, the price of $100 will be much more likely than $100 thousand,” he said.

The expert drew attention to the fact that today almost no one uses Bitcoin as a means of payment and in the future, cryptocurrency will continue to be criminalized, turning into a tool for money laundering and tax evasion. A Harvard Professor of Economics also noted that regulation by the governments of large countries will significantly affect the value of digital money, but the authorities need to develop a global control system. ³⁰ March 6, the price of Bitcoin began to decline rapidly again.

On March 11, 2018, there was news that the Working Group on Binary Options of Canada and the FBI were trying to convince Google to ban advertising related to binary options, ICO and cryptocurrency in principle. However, the Internet giant turned out to be less compliant, in contrast to the popular Facebook social network, which at that time had already banned the advertising of the cryptoindustry. Jonah Roy, Senior Inspector of the Securities Commission of Manitoba and Chairman of the Working Group on Binary Options in Canada, spoke about negotiations with Google. He also clarified that it is the Working Group and the FBI that stand behind Facebook’s decision to ban advertising related to binary options and cryptocurrencies. “It so happened that the Binary Options Working Group of Canada, as well as the FBI, told Facebook about their concerns and that ordinary people end up suffering from this advertisement. I hope that Google will adopt a similar policy for products such as binary options, ICO and cryptocurrency,” Roy said. However, Google at the time did not hurry to follow the policies of Facebook and Instagram. ³¹ Nevertheless, this news then hit hard at the price of Bitcoin. Already on March 14, the price of Bitcoin was about $8,100 at the time of market closure. And later, in June, a ban on advertising from Google did appear, which again negatively affected the price of the first cryptocurrency.

On March 12, Zhou Xiaochuan, head of the People’s Bank of China, announced the official position of the central bank in relation to public and private cryptocurrencies. Zhou said that the central bank of China does not like “speculative cryptocurrency products;“therefore, the Central Bank does not officially recognize digital currencies, such as Bitcoin and aims to enhance regulatory actions. At the same time, the head of the Central Bank of China noted that digital currency is technically inevitable, but cryptocurrencies have significantly deviated from their initial goals, aimed at improving cash security and reducing transaction costs. Zhou believes that the focus is now on speculation and fast schemes aimed at instantaneous enrichment. ³² I think he is right, as now many people really enter this market only for the purpose of rapid enrichment. Moreover, most of these people do not really understand what products they are investing in.

In mid-March 2018, information appeared on the network that on March 11, a team of Goldman Sachs experts sent a notice to a client that the next BTC sale threatened to bring down the cryptocurrency rate below the February minimum of $5,922 according to Business Insider.

The new Bitcoin depreciation began after a loud incident involving the Binance cryptocurrency exchange, and the statement of the US Securities and Exchange Commission about the need to register cryptocurrency exchanges, as well as the actions of the Japanese regulator, which suspended the work of several cryptocurrency exchanges. ³³ Apparently, Goldman Sachs plays a big role in shaping the price of Bitcoin. We will hear about its involvement in speculation more than once.

On March 14, the Bitcoin rate again fell sharply by almost $700, breaking through the resistance level in the $8900 area. According to analysts, the reason for the fall was the statement by the head of the International Monetary Fund, Christine Lagarde, about the need for tighter regulation of the cryptocurrency industry using blockchain technology.

“This [decentralization] allows cryptocurrency operations to have an element of anonymity, much like cash transactions. As a result, a new, potentially large-scale mechanism for money laundering and terrorist financing emerges… The very same innovations that cryptocurrency relies on can also help us regulate them. In other words, we can fight fire with fire,” said Christine Lagarde in the organization’s official blog. She added that it is necessary to create a specific registry of user information “to enhance digital security and detect suspicious transactions in near real time.” Lagarde has repeatedly reported on the need to introduce international regulation of digital money. ³⁴ As you can see, the negative news background was constantly supported by the statements of influential people.

Cryptocurrency, and Bitcoin in particular, is a financial bubble that was created… to the delight of criminals and dirty politicians. This statement was made by the financial director of the multinational company, Visa Vasant Prahbu, on March 16. Allianz Global Investors, the largest investment company in Europe, said earlier that the internal cost of Bitcoin cryptocurrency is zero, and sooner or later this “bubble” will burst. ³⁵ I wonder if Vasant Prahbu’s opinion will change when the xRapid system from Ripple will replace the SWIFT transfers.

“There is a trend that cannot be ignored. People now believe more in Satoshi Nakamoto, whom no one has ever seen than the US Federal Reserve.”

Jeffrey Sprecher

On March 26, 2018, US President Donald Trump signed the “Cloud” law, which will simplify the exchange of personal data of users with foreign law enforcement agencies, allowing the authorities to avoid lengthy diplomatic procedures when requesting user data. In this way, the US government will be able to receive personal data of its citizens anywhere in the world. Experts of the publication FXStreet believe that the signing of the law influenced the cost of Bitcoin and other cryptocurrencies. On March 26, the average market price of BTC fell by 6%.

Interestingly, former US special agent, former CIA and National Security Agency official Edward Snowden said that in 2013, the Agency was working on a project to track senders and recipients of cryptocurrencies (including Bitcoin) and today secretly monitors cryptocurrency transactions with to identify users.³⁶ Bitcoin is indeed considered an anonymous currency, but at the same time, all transactions can be traced. Such organizations simply can not miss such a chance.

On the night of March 30, the rate of the first cryptocurrency on the Bitfinex exchange collapsed to February lows, amounting to $6,677 for 1 BTC. At the same time, Bitcoin capitalization fell to $251.7 billion, having updated the five-month minimum. The fall in the course coincided with the attempt of several OKEx customers to deal with a large number of Bitcoin futures operations to manipulate its price. ³⁷ It would be very interesting to know their names. But you probably already guess who could stand behind it.

On April 11, a team of researchers from Bank of America Merrill Lynch (BAML), led by chief investment strategist Michael Hartnett, published a report stating that the first cryptocurrency Bitcoin is a bubble, and the bubble is the largest in history. They went so far as to classify the current cryptocurrency market as a “bubble that has already surfaced,” Bloomberg reported. Representatives of the largest US banking holding company have published a diagram in which Bitcoin is traditionally compared with well-known financial pyramids. The BAML diagram shows the effects of the well-known historical bubbles, as well as their pumps, indicating that after the collapse of prices, they stabilize at new, much lower levels. ³⁸ BAML compared Bitcoin with Tulipmania in Europe, which turned out to be the first stock exchange crash and the first burst bubble in history.

Now you can analyze all the above information and decide for yourself whether the Cartel exists or not. You can compare the news release dates with the price charts and see how all that news influenced the price of the first cryptocurrency. As for me, the existence of such an organization is quite possible.

More information about the Cartel can be found at the link: bitstat.top/blog.php? id_n=3144. The site provides graphics and compares the Bitcoin price reduction with the release of the main negative news. Also provided is a comparison of the chart of the price of Bitcoin and gold, uranium and silver after the appearance of futures for these assets.