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Joseph Young on PayPal and Bitcoin →

December 2, 2018

Joseph Young:

PayPal says its bank account withdrawal fee is $1, which is true. BUT, the conversion rate is where they get you. I received $1,000 this week from a friend. PayPal shows $955 as withdrawable amount. $45 fee for a $1,000 payment, while Bitcoin processes $194 million with $0.1

I really don’t understand why people think this is a good argument in favor of Bitcoin. In most cases, when A transfers $1,000 to B, it’s because B wants to be receive USD because fiat is stable and predictable. In Joseph’s example, I like to think of the $45 fee as a stability fee that cannot be beat by Bitcoin at the moment when considering the fact that most people don’t give a s*** about receiving BTC – most people want fiat.

$45 for a $1,000 transfer is a 4.5% fee. What are the chances of timing a Bitcoin transfer and trade to ensure a loss of less than 4.5%? In its current state, Bitcoin just doesn’t beat services like PayPal and Venmo for day-to-day payments. That won’t change until Bitcoin’s market cap is in the trillions.

Zcash (ZEC) launches on Coinbase →

December 1, 2018


Zcash is a cryptocurrency that uses recent advances in cryptography to allow users to protect the privacy of transactions at their discretion. The distinction between Zcash’s “transparent” and “shielded” transactions is analogous to the distinction between unencrypted HTTP and encrypted HTTPS. In both cases, the unencrypted/transparent version of the protocol allows third parties to see metadata associated with the communication or transaction, while the encrypted/shielded version protects this information. Initially, we will support deposits from both transparent and shielded addresses, but only support withdrawals to transparent addresses. In the future, we’ll explore support for withdrawals to shielded addresses in locations where it complies with local laws.

This is hilarious.

  • Accepting private transactions for deposits means Coinbase will make off-chain allocations to its customers for trading on Coinbase Pro, which means the deposit state (public vs. private) doesn’t matter at all.
  • Withdrawing to a private address is not supported, which means Coinbase will be able to link a user’s identity to that first-hop public address.
  • What’s the point of listing a cryptocurrency with privacy features without supporting said features? In its current state, this Zcash implementation is functionally identical to that of Bitcoin.

Steemit lays off 70% of its employees →

December 1, 2018

Ned Scott:

Given the weakness of the cryptocurrency market, the fiat returns on our automated selling of STEEM diminishing, and the growing costs of running full Steem nodes, we have been forced to layoff close to 70% of the team. The remainder of the team is staying on to focus primarily on reducing the costs of the infrastructure running and our public APIs, and ensuring that the community can remain informed of developments.

I really enjoyed using Steemit last year, but the inability to specify canonical URLs for blog posts ultimately put me off. I still think Steemit is the only blockchain-based social platform that has managed to a decent user base and following, so this development is very unfortunate. My thoughts below.

  • It’s silly to blame the layoffs on the current bear market instead of the real reason – poor treasury management. It’s clear that Steemit, Inc. chose to speculate in a high-volatility market with investor funds instead of cashing out to fiat in accordance with a real and reasonable financial plan.
  • Accounting for inflation, Steemit auto-mined and sold ~80% of the token supply since its inception. Is there a detailed financial report that shows where all of this money went? If so, Steemit, Inc. should consider making it publicly available. If not, then why not?
  • Perhaps it’s time for Ned Scott, who still owns ~$750,000 worth of STEEM, to step down as CEO and move into an advisory position. His leadership has been questioned by many in the community, and he doesn’t seem equipped with the knowledge and experience to bring Steemit, Inc. out of this financial mess.

Floyd Mayweather & DJ Khaled get #REKT →

November 29, 2018


The U.S. Securities and Exchange Commission (SEC) has settled charges with professional boxer Floyd Mayweather Jr. and music producer Khaled Khaled – better known as DJ Khaled – for not disclosing that they were paid to promote initial coin offerings (ICOs). Neither celebrity admitted to or denied the charges in their settlements. Mayweather will pay $300,000 in disgorgement, $300,000 in penalties and $14,775 in prejudgment interest. Khaled will pay $50,000 in disgorgement, $100,000 in penalties and $2,725 in prejudgment interest.

It’s nice to see the SEC finally cracking down on undisclosed sponsorships. My question is simply, “wen Suppoman?”


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