Ep. 38 How to Resist China's Jackboot (feat. Bitcoin)

In this episode of The Unhashed Podcast: Bryan has run off to elope with a Finnish Diplomat and Ruben might be dead?! Bitmain is suing several of its old executives for violating a non-compete when they started Poolin, which begs the question: are mining pools the digital equivalent of grocery stores? And...Protests in Hong Kong keep heating up and so does the weekly volume on LocalBitcoins, but is Bitcoin really the currency of choice for anti-establishment Hong Kongers?

Weekly News Wrap Up:

  1. Protests in Hong Kong keep heating up and so does the weekly volume on LocalBitcoins, — moving from ~HK$3 million to ~HK$6 million (US$380,000 to $US760,000) — within a few weeks’ time. This trend, first spotted by Brave New Coin comes at the same time as an exclusive from Reuters reveals that “some Hong Kong tycoons” have begun to send their personal wealth offshore. In a similar string of news, some protestors have begun to avoid using fintech solutions, like Hong Kong’s Octopus Card, to ensure that they aren’t leaving any paper trails to their involvement in the demonstrations via centralized ledgers. Bitcoin and other cryptocurrencies are seen as an alternative.  

  2. Speaking of the Hong Kong protests, friend of the show and long time Hong Kong Bitcoiner/expat Leo Weese was recently interviewed on the Bitcoin Magazine podcast about the protests and how to stay safe and private when participating in events like these. You can check it out here.

  3. Grayscale’s industry-famous research department recently released a report titled Hedging Global Liquidity Risk with Bitcoin. In it, the firm explained how the leading cryptocurrency is becoming used as a hedge in financial crises and periods of geopolitical turmoil. More specifically, the crypto investment firm looked into how the asset can be used during bouts in which there is high “liquidity risk”, the “risk of a real decline in wealth resulting from an imbalance in the amount of money and credit relative to debt in a given economy.” To back this point, Grayscale looks to three primary facets of Bitcoin’s existence: store of value, spending viability, and growth possibility.

  4. Can't wait for a cryptocurrency with the ethics of Uber, the censorship resistance of Paypal, and the centralization of Visa, all tied together under the proven privacy of Facebook? Well, you won’t have to for much longer. Libra, the newest moniker for facebook’s cryptocurrency, is set to unveil itself this week and certainly much to the anticipation of eager regulators.

  5. Bitmain is suing the founders of Poolin, the seventh largest bitcoin mining pool by hash rate, for $4.3 million in damages as a result of these founders allegedly violating a noncompete agreement. Bitmain argues that the employees’ departure and their creation of a competing mining pool resulted in significant losses for the company. On the other hand, Poolin argues that the contract in question is no longer applicable because it was invalidated after Bitmain failed to compensate them on time. There are reportedly six pending lawsuits in the Beijing Haidian District court all regarding this dispute. Three came from the co-founders of Poolin — CEO Zhibiao Pan, COO Fa Zhu, and CTO Tianzhao Li — who preemptively sued Bitmain in an effort to be released from the non-compete agreement. In response, Bitmain countersued each of them and requested that the court order Poolin’s founders to compensate it for losses stemming from the rivalry and to continue honoring the noncompete agreement.

    1. How will cases like these be handled if, in fact, the employees were in breach of contract? Shutdown the pool? Make them pay the fines and let the pool live?

  6. According to the Korea Herald, Five cryptocurrency exchanges have changed their terms of service in a way that they can be liable for problems caused by potential cyberattacks or system malfunctions, even if operators are not willfully or grossly negligent, South Korea's antitrust regulator said Monday. The exchanges made the changes after receiving the corrective recommendation from the FTC in April last year, after Bithumb lost 35 billion won ($31.5 million) worth of cryptocurrencies in a cyberattack.

    1. Is this fair? Will this scare off less qualified people from even trying to run an exchange or will this just mean that honest, but less well-funded operators forgo running exchanges, and leave the market to scammers who don’t care about the regs anyway?

  7. While the dark web community fell into a brief state of turmoil around late April and early May, research by Wired, The New York Times and Bitcoin Magazine shows that a new generation of darknet markets is already filling the void left behind by their fallen competitors. Dark web news site and guide DarknetlLive lists over 30 active digital black markets that utilize the anonymizing Tor browser and bitcoin to allow users to buy and sell drugs and other illegal products anonymously online. As concluded by The New York Times: “That means the fight against online drug sales is starting to resemble the war on drugs in the physical world: There are raids. Sites are taken down; a few people are arrested. And after a while the trade and markets pop up somewhere else.”

Listener Questions:

@fiatjak asks:

“If I’m just holding bitcoin, I’m using it, right? If I’m just holding and not receiving transactions, then according to Luke Dashjr and others I don’t need a full node in that case. But if I’m a bitcoin user, I’m supposed to be running my own full node, and making sure my money isn’t being diluted through miner generated invalid inflation, etc. How does this fit together?”

One Final Note:

Make sure you are storing your crypto on something secure like a Ledger and backing it up on something sturdy like a Billfodl. If you buy these items through the links above, we do take a cut of the profits but it also helps support the show - a win/win for all involved.

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Colin aulds