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Patoshi Researcher Says “Altruistic” Satoshi Will Never Spend His 1.1M Bitcoin

Bitcoin founder Satoshi Nakamoto will never spend his “1.1 million bitcoins” because he is altruistic, Patoshi Pattern researcher Sergio Demian Lerner has said.

The Patoshi Pattern exploits privacy flaws of an early protocol, v.01, to identify blocks possibly minded by Satoshi Nakamoto. Lerner said the Bitcoin creator is unlikely to use his coins, which have not moved since 2009, as a fair basis for the inception of the cryptocurrency.

During a recent Ask-Me-Anything (AMA) session on Reddit, Lerner tied his assumption to the fact that the 1.1 million BTC attributed to Satoshi has not moved in over a decade. Lerner said:

Assuming Satoshi is Patoshi, I believe, based on the past history of Satoshi coins, that Satoshi won’t use his coins ever. Therefore, I think that there couldn’t be a fairer and a more altruistic way for Bitcoin to be born.

Screenshot of the Patoshi blocks as documented by RSK chief scientist Sergio Demian Lerner.

The Bitcoin community invoked the Patoshi Pattern research in May, to attribute 50 BTC mined during the early days of Bitcoin but suddenly moved last month to the anonymous founder of the cryptocurrency. Lerner played down the speculation, arguing that the block responsible for the 50 BTC fell outside blocks mined using the Patoshi Pattern.

In the AMA session, Lerner claimed to have more leads in the Patoshi Pattern, but said will not pursue the research further. “I don’t want to dig any more into that matter and I feel I contributed enough to the transparency of Bitcoin. Digging more may be entering Satoshi’s privacy area,” he said.

Lerner also addressed how he designed the second layer Bitcoin protocol, RSK, during the session. He revealed that it took several years to uncover nuances that form the basis of his pattern.

The Patoshi Pattern relies on the assumption that Nakamoto mined in the early days of Bitcoin to validate his concepts, and that he mined using v.01 of the Bitcoin Code. Ninety-nine of the blocks tentatively attributed to Satoshi are unspent, setting them apart from blocks mined by the same pattern during the same period.

Lerner further argues that the pattern for blocks that fall within the Patoshi Pattern often ended suddenly and resumed at the point of interruption. The unlikelihood of coordinated interruption ties the blocks to one miner, and the non-movement of the coins can be attributed to Satoshi’s founder altruism.

The researcher, however, remains conservative with respect to the identity of the miner, despite advancing a strong case for Satoshi. He maintains that his research only arrives at a “Patoshi,” who may or may not be Satoshi.

What do you think about Lerner’s assertions? Let us know in the comments section below.

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Report Shows Crypto Derivatives Volumes Soared 32% to a Record $602 Billion in May

Report Shows Crypto Derivatives Volumes Soared 32% to a Record $602 Billion in MayCryptocurrency derivatives trading volumes climbed 32% in May to a new record high of $602 billion, according to data analytics company Cryptocompare.

Total spot volumes grew at a slower pace, rising 5% to $1.27 trillion in May, the London-based firm said in a new report published June 4, 2020.

The figures show increasing investor interest in trading derivatives – contracts signed by at least two people to buy or sell a digital asset at an agreed price in the future. For the review month, derivatives market share rose to 32% compared to 27% in April.

May’s all-time-high represents a slight increase over the previous record of $600 billion in March.

Cryptocompare notes that bitcoin (BTC) derivatives saw large increases in trading volume last month, with institutional player Chicago Mercantile Exchange (CME) rising fastest at 59% to $7.2 billion.

However, Huobi accounted for the largest trade volume of $176 billion, up 29% month-on-month followed by Okex and Binance with $152 billion and $139 billion trades’ worth, respectively.

Hong Kong-based Bitmex traded $94.8 billion, up 37% since April while trades at Deribit soared 22% to $13.4 billion.

Institutional options volumes on CME reached a monthly record of 5,996 contracts, up sixteen-fold from April. The regulated exchange also broke a new daily record on May 28, with trades of 1,418 Bitcoin options contracts. Derebit’s options volume spiked 109% in May to $3.06 billion.

CME’s futures contracts also gained by 36% in May, to volumes of 166,000.

Per the report, spot trading volumes surged sharply a day before the third halving, reaching $64.7 billion on May 10. But this fares lowly compared to the volume spikes of $66.2 billion on April 30, and that of $75.9 billion on March 13, a day after the Black Thursday BTC crash.

Cryptocompare said the bulk of spot trading happened on exchanges it considers low-tier and unregulated, accounting for $49.88 billion of the volume while top-tier exchanges traded $14.86 billion.

What do you think about the growing derivatives trading volume? Let us know in the comments section below.

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Bitcoin to Rise to $20K This Year Spurred by Government Money Printing and Covid-19: Bloomberg

Bitcoin to Rise to $20K This Year Spurred by Government Money Printing and COVID-19: BloombergBloomberg has forecast bitcoin to reach its record high of $20,000, and possibly $28,000, this year.

According to the company’s June Crypto Outlook report, “something has to really go wrong for bitcoin not to appreciate in value.”

Bloomberg points to quantitative easing and the coronavirus pandemic as the fuel behind bitcoin’s maturity, particularly when benchmarked against the falling stock market and crude oil. Both factors will cause the price of bitcoin (BTC) to rise.

“Covid-19 is hastening the shift away from paper money and stimulating plenty of quantitative easing, which is helping independent stores-of- value such as gold and bitcoin,” the report notes.

“Last year, the high was about $14,000, which would translate into almost double in 2020 if rotating within the recent band, and mean little in the big picture,” it added.

Bitcoin twice breached $10,000 since its supply cut event three weeks ago, but has struggled to stay above the key level, as investors quickly dumped the asset. It’s latest action involved a flash rally to $10,400 on June 1, followed by a 17% crash barely a day later.

The BTC price, up about 33% since the beginning of the year, is trading at $9,549 at Press time, down 0.5% over the last 24 hours.

Describing bitcoin as a “resting bull”, Bloomberg highlighted that increased institutional interest, the rising number of active BTC addresses, futures markets as well as mass adoption will lead the pioneering digital asset higher.

The report specifically mentions Grayscale Investment’s aggressive crypto acquisitions. Consuming 25% of all newly minted BTC in 2020, the Grayscale Bitcoin Trust Fund is by far the largest crypto-asset exchange-traded instrument, helping institutional adoption, it said. The Fund manages over 340,000 BTC, or $3.25 billion, on behalf of investors.

Active bitcoin addresses, which reached a two-year high of 891,000 this year, represent increasing adoption and that will help BTC stay above $10,000, Bloomberg opined. “Unless advancing addresses abruptly reverse, history indicates bitcoin has a propensity to appreciate,” it said.

The report notes that while futures open interest isn’t a large portion of total bitcoin supply, accounting for 50,000 BTC, “futures are significant as a primary gateway for the benchmark crypto to become a mainstream asset class.”

“Maturation, greater depth, and plenty more exposure via futures should continue to suppress the first-born crypto’s volatility, clearly keeping it tilted toward price appreciation,” Bloomberg observed.

What do you think about Bloomberg’s price prediction? Let us know in the comments section below.

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Japanese Finance Minister Shoots Down Plan to Cut Bitcoin Tax to 20%, Cites Crypto-Divide

Japanese Finance Minister Shoots Down Plan to Cut Bitcoin Tax to 20%, Cites Crypto-DivideJapan’s finance minister Taro Aso says he is opposed to reducing tax on bitcoin income to 20%, on par with stock dividends, arguing that most Japanese households find it difficult to invest in digital assets.

The development suggests that Japan will uphold its current definition of cryptocurrency as miscellaneous income, whereby virtual currency is taxed at rates of up to 55%.

Players in the crypto sector have been pushing for new legislation that would categorize cryptocurrency as stocks for similar tax treatment.

Responding to a question from Japan Restoration Association (JRA) member, Shun Otokita, at a recent meeting of the House of Councillors Committee on Financial Affairs, the finance minister said it would be difficult to persuade Japanese people to convert their cash savings to digital assets.

“Out of 1,900 trillion yen ($17.6 billion) financial assets held by households in Japan, around 900 trillion yen ($8.4 billion) is now being held as cash deposits and that is abnormal,” Aso said.

The minister also addressed the legal definition of digital currency. In terms of the Payment Services Act, introduced in May, “crypto-asset” has replaced all references in law to “virtual currency.”

Aso suggested another revision that would replace “crypto-asset” with “angō shisan,” the Japanese word for “stablecoin.” “The word ‘crypto’ sounds a bit shady so why don’t we use the Japanese word for stablecoin… Sounds more stable right?” he proposed.

The Payment Services Act also cut the leverage limit for cryptocurrency margin trading from 4x to 2x. JRA member Otokita questioned Japan’s Financial Services Agency (FSA) on lowering of the cap.

The agency said it arrived at the revision after consulting with experts and noting that such a cut was an appropriate response to the volatility of cryptocurrencies.

Worldwide, governments are looking to earn more from bitcoin by way of taxation, contrary to their previous attitudes, which targeted a complete ban on cryptocurrency usage.

What do you think about Japanese Finance Minister’s position on crypto tax? Let us know in the comments section below.

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US Regulators Target Bitcoin ATMs: 88% of the Funds Exit the Country via Machines

Bitcoin automated teller machines (BATMs) will become the next target for regulators, as world governments tighten screws on money laundering.

According to Ciphertrace CTO John Jeffries, crypto-cash machines will attract “greater…regulatory focus” in a bid to rein-in alleged cross-border illicit financial transfers.

Jeffries urged “the need for more uniform regulatory enforcement and compliance” as governments start to crack down on crypto-infused automated teller machines.

This comes as Ciphertrace released a report showing that cross-border transactions accounted for 74% of bitcoin moved between exchanges in 2019. Of this, 88% of funds leaving the United States through bitcoin ATMs were sent to cryptocurrency exchanges abroad – mostly to “high-risk” platforms.

The amount of money wired to overseas exchanges at high-risk has grown rapidly, doubling every year since 2017, said the crypto intelligence firm, in the report published on June 2, 2020. The report did not provide specific figures on the extent of capital leaving via BATMs.

High-risk exchanges are “nefarious exchanges known for facilitating criminal activities and money laundering,” according to Ciphertrace. These types of exchanges may not be inherently criminal, but illicit transfers through the platforms are cause for concern, it said.

Until now, bitcoin-facilitating machines – which total about 8,000 worldwide – have appeared to operate outside national anti-money laundering (AML) laws, attracting users keen on privacy – the wrong crowd, in government’s eyes.

In Canada, regulators have become stricter on bitcoin ATM transactions, recently passing a law that compels operators to report all deals above 10,000 Canadian dollars (about $7,400), as part of measures to prevent money laundering and terrorism financing.

Germany, Spain and the United States are all cracking down on bitcoin ATMs, both for tax and AML purposes. The crypto teller machines allow users to buy and sell cryptocurrency. They can also work in remittances, allowing transactions between two fiat currencies, underpinned by bitcoin.

What do you think about regulators going after Bitcoin ATMs? Let us know in the comments section below.

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Bitcoin’s Flash Rally to $10,400 was “Fake”, Short the Cryptocurrency, Warns Renowned Trader Bollinger

Bitcoin's Flash Rally to $10,400 was "Fake", Short the Cryptocurrency, Warns Renowned Trader BollingerLong time trader John Bollinger has warned that bitcoin’s flash rally to over $10,400 on Monday was fake, adding that losses might be on the way.

“This is a Head Fake at the upper Bollinger Band for $btcusd,” tweeted Bollinger, inventor of the Bollinger Bands indicator.

A ‘head-fake’ trade happens when an asset price makes a move in one direction, but then reverses course and moves in the opposite direction, according to the know-it-all online dictionary Investopedia.

Bollinger Bands define high and low on a relative basis. By definition prices are high at the upper band and low at the lower band.

John Bollinger urged investors to trade with caution or to sell bitcoin (BTC) altogether. He sated: “time to be cautious or short.”

Bitcoin rallied past $10,400 on June 1 in a brief breakout, possibly spurred by runaway coronavirus spending by governments throughout the world.

The dramatic swing may have reflected renewed investor optimism towards a bull run in the wake of Bitcoin’s recent third halving, but faded just as quickly as it started.

Some 24 hours later, the price of BTC plunged 17% in a matter of minutes to as low as $8,600 on Bitmex – a flash crash some observers attribute to manipulation by the so-called whales.

Bollinger’s analysis adds to a chorus of voices that have called out BTC’s impromptu rally as a false signal – at least in the short-term.

Bitmex co-founder and chief executive officer Arthur Hayes suggests that this week’s breakout was a bull trap and that bitcoin will have to rise by nearly 60% from its current price of about $9,400 before reclaiming the bulls.

“The basis is starting to get juicy. It sure beats earning 0% at the bank… But this rally ain’t real until we take out $15k,” Hayes said in a tweet.

Bitcoin has twice tried to breach $10,000 in the past two weeks, succeeding twice, but both the breakouts never lasted, as strong resistance set-in. Traders consider $10,000 a key level for a bullish upswing.

What do you think about John Bollinger’s prediction? Let us know in the comments section below.

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Hackers Move Another $800K in BTC Stolen From the 2016 Bitfinex Breach

Hackers Move Another $800K in BTC Stolen From the 2016 Bitfinex BreachAnother $800,000 worth of bitcoin from the Bitfinex hack of four years ago has been moved to an unknown wallet.

Whale Alert reports that hackers transferred 77.64 bitcoin (BTC) on Tuesday, which amounts to $797,000 at the time the alert was issued.

The thieves last moved about $255,000 or 28.4 BTC on May 22, in deals that appear timed to coincide with every spike in the price of bitcoin.

BTC scaled past $10,000 on Tuesday, rising above the psychological point for the first time since the scheduled supply cut on May 11.

According to data from markets.bitcoin.com, the top cryptocurrency climbed nearly 6% in the last 24 hours amid record coronavirus spending by world governments.

Investors consider bitcoin a hedge against inflation in these uncertain times.

Hackers have chipped away at their multi-million-dollar stash since making off with 120,000 BTC from Hong Kong-based crypto exchange Bitfinex in 2016. Valued at $72 million at the time, the bitcoin is now worth over $1.2 billion at current prices.

Meanwhile, Ciphertrace said on June 2 that losses from cryptocurrency thefts, hacks, and fraud surged to nearly $1.4 billion during the first five months of this year.

In a new report, the crypto intelligence firm says it has also started to notice coronavirus-related crime that needed some form of payment using virtual currency, but similar fraud remained minimal.

Covid-19 fraud generally involved criminals luring their victims into social media groups where payment in bitcoin or other cryptocurrencies was requested, notes Ciphertrace.

What do you think about the moving stolen Bitfinex funds? Let us know in the comments section below.

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Bitmain Unveils Cheaper T19 Bitcoin Miner to Regain Lost Market Share

Bitmain Unveils Cheaper T19 Bitcoin Miner to Regain Lost Market ShareBitmain on Monday released the Antminer T19, a cheaper bitcoin mining machine, in an effort to regain lost market share.

The Beijing-based company said the Antminer T19 has computing power or hashrate of 84 terahash per second (TH/s) and power efficiency of 37.5 joules per terahash (J/TH).

The latest hardware is modeled after Bitmain’s more efficient BTC miner, Antminer S19, only cheaper. With hashrate of 95 TH/s, the S19 model costs $1,785, some 2% higher compared to the T19 series, which is selling at $1,750.

“The Antminer T19 is housed with the same generation of custom-built chips found in the Antminer S19 and S19 Pro, ensuring capable and efficient operations for mining cryptocurrencies,” said Bitmain in a blog post.

According to F2pool, a global bitcoin mining network, the new T19 model generates up to $3.17 of profit each day. That compares with earnings of $3.96 per day for the Antminer S19. The figures are based on an average electricity cost of $0.05 per kilowatt per hour.

The T19 goes on sale on June 1, with a limit of two miners per customer “to prevent hoarding and to ensure that more individual buyers can purchase miners,” Bitmain declared. The new mining equipment will be shipped between June 21 and 30, it said.

It is more efficient than the previous T17 model, which, together with the Antminer S17, has failed at a higher rate of 20% – 30%. The “normal” failure rate is generally 5%. Antminer T19 comes with “upgraded firmware,” ostensibly to offer “faster start-up speeds.”

The new miner comes at a time Bitmain has given up ground to emerging competitor Microbt. The release also coincides with Bitcoin’s programmed supply cut of May 11, which slashed miner revenue by 50% to 6.25 BTC per block. The halving has forced miners to look for more efficient mining equipment.

According to Coinshares, Bitmain may have lost 10% of its dominant market share in 2019, as Microbt, maker of the Whatsminer series, continued to sell more mining power throughout the world. The trend is expected to have continued in 2020.

Earlier on Monday, Canadian firm Bitfarms Ltd. announced the purchase of 1,847 Whatsminer M20S BTC mining machines. Delivered within four to five weeks, the mining hardware is expected to add approximately 133 petahash per second (PH/s) to the company’s installed computing power and improve computing efficiency to over 15 PH per megawatt, it said.

What do you think about Bitmain’s new product? Let us know in the comments section below.

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Bitcoin Fees Fall 60% While Transaction Count Declines

Bitcoin Fees Fall 60% While Transaction Count DeclinesBitcoin (BTC) average transaction fees dropped by nearly 60% in the last week, as the number of transactions queuing up to be processed on the network eased.

According to data from Bitinfocharts, the cost of making a transaction over the Bitcoin blockchain fell to around $2.61 on May 28, down from just over $6.28 six days earlier.

As a percentage of revenue for BTC miners, fees have also declined to just under 10% from 21% on May 20.

Transaction costs had soared over 220% since the May 11 scheduled bitcoin supply cut, capping off a rally that began two weeks prior to the event.

The sharp fall in fees is thanks to transaction activity getting back to normal, helping to decongest the network, as represented by the Bitcoin memory pool, called mempool. The memory pool consists of all transactions waiting to be confirmed by the Bitcoin network.

Data shows that the number of unconfirmed transactions in the mempool has dropped by more than 70% over the last seven days, causing fees to decline.

A higher number of transactions waiting to be confirmed in the mempool causes the opposite effect on transaction costs, as was the case during and immediately after the halving.

Then, demand for processing transactions on the BTC network outstripped the supply of miners, forcing fees higher as people paid more for faster settlements.

Fees are also determined by other factors as such the size of the transaction, mining difficulty as well as the actual number of transactions passing through the network – all of which have continued to decline.

As per the Bitinfocharts figures, the overall number of Bitcoin transactions fell by 49% during the week to May 28, down to about 151,000 from 298,000 transactions previously.

What do you think about falling Bitcoin transaction fees? Let us know in the comments section below.

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South Korea to Start Taxing Bitcoin Profits in 2021

South Korea will start taxing profits from bitcoin (BTC) and other cryptocurrencies next year, according to local media reports.

The taxation will also apply to bitcoin mining operations and income from initial coin offerings, should it be approved by Parliament.

South Korea’s Ministry of Economy and Finance proposed the amendments to the existing tax law to include the cryptocurrency industry, with backing from the Ministry of Information and Technology.

In September, the Ministry will table the amendments before Parliament. Once approved, the law will enter into force in 2021, allowing authorities to tax profits generated from the sale of digital assets for cash. Trades between cryptocurrencies will remain tax-free, and similarly those sold at a loss.

“We are reviewing capital gains tax or other income tax on profits gained by domestic and foreign investors in the transfer of virtual assets,” an official from the Ministry of Strategy and Finance was quoted as saying.

“The proposed tax amendment will be announced in July and submitted to the regular assembly in September,” the official added. The planned changes have been prompted by the idea of applying “tax where income is located”, officials said.

The Korean government has attempted to tax bitcoin in the past, most recently in January, but failed to enforce the regulations, reportedly because different government ministries could not agree whether bitcoin was an asset or not. Local crypto experts believe the proposed amendments will suffer the same fate.

Seung Seung-young, a researcher with the Korea Regional Tax Institute, told local newspaper E Daily that the planned law is not watertight in its current format, opening it to exploitation by investors. He opined:

“If you do business through a peer-to-peer transaction without going through an exchange, there is a possibility of avoiding taxation. Even with IP tracking, if there are a large number of targets, administrative costs will increase and it will be difficult to track each day.”

Kim Yong-min, chairman of the Korea Blockchain Association, notes that it will take three to four years before the government can set up infrastructure that truly understands cryptocurrency.

What do you think about South Korea’s proposed tax on Bitcoin? Let us know in the comments section below.

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