Bitcoin Mixers See Rapid Growth From the Darknet Markets: BitFury Crystal Blockchain Report

The latest crypto activity report, published by Crystal blockchain, suggests a significant surge in the use of bitcoin mixers on the darknet between the last quarter of 2019 and the first quarter of 2020. The rise is a whopping 294% which suggests the rapid adoption and use of mixing tools by these darknet entities.

The report also saw a similar trend for the US Dollar which increased from $3m in Q1 2019 to $67m in Q1 2020. The report read:

“The amount of bitcoin sent to mixers by darknet entities rose significantly this year — from 790 total bitcoin in Q1 2019 to 7,946 bitcoin in Q1 2020. The same growth was also observed in USD — an increase from $3m in Q1 2019 to $67m in Q1 2020. This indicates a rapid adoption of crypto mixing services by darknet entities.”

Some of the key findings of the report include:

BitFury Crystal Blockchain
Source: BitFury Crystal Blockchain

The amount of bitcoin (measured in BTC) transferred between darknet entities and other entity types declined in Q1 2020 compared to the same period one year ago; however, the value of the amount of bitcoin transferred (measured in USD) grew by 65%.

This is not just due to the increase in the USD value of bitcoin from 2019 to 2020. The amount of money being transferred by darknet entities is still growing, and they are continuing to use bitcoin as a medium of transport. The mass adoption of bitcoin, as well as its ease of use and popularity, is a contributing factor as well.

In Q1 2020, there was a rapid growth in the amount of Bitcoin sent from darknet entities to mixers. During that same period, the amount sent in Bitcoin to exchanges that required verification was reduced — indicating a reduction in the use of cryptocurrency exchanges for criminal and darknet activities in favor of more anonymous services like mixers.

The share of bitcoin sent from one darknet entity to another also grew in Q1 2020. It is possible that darknet users are trying to hide their bitcoin flow inside of the darknet, avoiding the detection of their activities. This also encourages darknet services to cooperate and grow their revenue internally.

The report concluded that even though the amount of bitcoin sent to darknet has decreased since 2017, the value of bitcoin in USD has increased significantly. Also, the amount of bitcoin being sent among darknet members have also seen a rise. While the use of privacy tools by these darknet entities was no secret, now with the help of many analytical tools and service providers, it is easier to track even the masked transactions.

Also Read: Twitter Hacker Managed to Scam Only 12 Bitcoin After Duping Major Accounts

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Author: James W

Darknet Markets Took a Hit After Bitcoin Price Crash “Like Never Before”

The recent sell-off was “no ordinary” Bitcoin price drop, suggests the drastic changes in the usage patterns of different types of cryptocurrency businesses.

During the week of March 19, as COVID-19 pandmeic intensified, crypto exchanges saw the largest ever bitcoin inflow which was 9x the daily BTC average amount.

Professional traders and investors were responsible for the majority of the 37% drop in bitcoin price. However, the majority of available bitcoin wasn’t cashed out as hodlers held onto their confidence in the crypto asset.

However, some ripples were seen in the services that use bitcoin. The amount of bitcoin sent to merchant services, gambling services, and darknet markets dropped significantly, reported Chainalysis.

Darknet market activity takes a hit

Darknet markets are reacting to BTC prices like never before. Historically, darknet market activity were much less affected by the ebbs and flows of the market but this time the correlational relationship has reversed.

In mid-March when the Bitcoin price dropped from $10,500 in mid-February to $3,850, so did the value of Bitcoins sent to the darknet market, which went from $4.1 million to $3.2 million.

This drop in darknet activity came after rising to more than $5 million in the final quarter of 2019. At that time, the price of the digital asset fell 13% to $6,400.

Chainalysis says given the public health crisis, people might not be buying as many drugs, also vendors might have slowed down their sales due to price drop out of fear that BTC would be worthless one day. Disruptions to the global supply chain could also be hampering these vendors’ ability to do business.

But as China recovers from the COVID-19 outbreak, the darknet purchasing appears to be picking up as well.

Merchant and Gambling services affected too

During this time, merchant services remained “surprisingly resilient.” These services allow conventional businesses to accept BTC from customers to make purchases which is typically highly correlated with price.

While merchant services purchasing dropped, it wasn’t as much as expected. This could be because crypto users are buying essentials that they can’t get elsewhere with fiat currency. Also, local business closures due to coronavirus could have augmented the need for these services.

As for crypto-based gambling services, they recorded a dip in activity but it was unrelated to the price drop. Bitcoin flows to gambling services have been dropping since the week of March 9 but not until sometime after the price drop. They continued to fall even when the BTC price started to recover.

This could very well be a non-crypto event as gambling activity changes during the recession due to large variance in consumer behavior.

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Author: AnTy

Governments Get Aggressive & MMT is Coming Ahead of Bitcoin Halving

Investor confidence was tested today as Federal Reserve Chairman – Jerome Powell – suggests that the central bank may not have the firepower to combat the next recession.

To soothe investor fears, Powell issued a short statement on Friday, reaffirming that the central bank would use its tools and “act as appropriate to support the economy.”

The “fundamentals of the US economy remain strong” Powell argued, further noting that “the coronavirus poses [an] evolving risk to economic activity” and the Fed “is closely monitoring developments and their implications for the economic outlook.”

This statement came as markets in the US tumbled for the seventh day, as the continued spread of the coronavirus has investors fearful that the world is on the cusp of a pandemic and recession.

50bps Rate Cut Now Priced for March

As new cases of coronavirus outside China continue to grow, Powell’s comment has a 50bps cut now fully priced in for March.

“It was certainly an attempt to calm things down,” Torsten Slok, an economist at Deutsche Bank, explained. “This is the strongest hint you can make that a rate cut is coming.”

President Trump also played down the economic threat to the US from the virus and added his hopes that the Fed would cut rates soon.

“I hope the Fed gets involved and I hope it gets involved soon,” Trump told reporters. This isn’t anything new coming from the president that has regularly criticized the Fed for not cutting rates more aggressively.

Last week, Powell said the current low level of interest rates “means that it would be important for fiscal policy to support the economy if it weakens.”

James Bullard, the president of the Federal Reserve Bank of St. Louis, also said during his speech in Florida that “we could cut rates if we got a global pandemic that actually develops with health effects that seem to be approaching the same level as seasonal influenza, but that doesn’t look like the baseline as of today.”

European Central Bank President Christine Lagarde however, told European lawmakers that “Monetary policy cannot, and should not, be the only game in town.”

Stock Market’s Worst Day is Business as Usual for Bitcoin

Stock market indexes have slumped amid deadly virus worries, with money pouring into gold, which has surged to 7-year highs alongside US govt securities as people look for safe investments, driving prices up while pushing yields to record lows.

The stocks have suffered their biggest weekly fall since 2008. With Dow Jones Industrial Average shedding 10% of its value in February, the S&P 500 also lost 8.4%, and the Nasdaq down by 6.4%.

During this financial uncertainty, the Hong Kong government is handing out cash to its adult permanent residents.

Its aim appears to be an attempt to boost spending and ease the financial burden, with the government explaining that the “economy is facing enormous challenges this year.”

The government has announced that $10,000 Hong Kong dollars ($1,280) will be given to approximately seven million people over the age of 18.

The German government has temporarily suspended constitutional limits on public borrowing to provide debt relief to struggling municipalities.

Also, Italy has put a hold on payments due between Feb. 21 and March 31, from residents and businesses in towns subject to containment measures to stop the spread of coronavirus.

Govt. to Use its Tools as we Head Into Bitcoin Halving

“Governments are getting aggressive,” says economist and trader Alex Kruger. “The coronavirus may be triggering a new age of fiscal policy. And MMT is getting closer.”

Cutting interest rates and printing money are the central banks’ tools and “they’re going to abuse them at the exact moment we head into the Bitcoin halving,” says Morgan Creek Digital co-founder – Anthony Pompliano.

The solution to these aggressive policies could be as analyst PlanB points out – Bitcoin (BTC). The leading cryptocurrency is currently hovering around $8,600 but could see a boost with all the free money being pumped into the market by the central bank.

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Author: AnTy

Coinbase Introduces USDC Bootstrap Fund To Support DeFi Projects; Investing $2M In Compound & dYdX

Coinbase has introduced a new initiative dubbed USDC Bootstrap Fund and just as the name suggests, the firm intends to boost developers with a fund in terms of USDC tokens.

In a blog post, the crypto exchange said that the new fund will be used to enhance developments of decentralized finance (DeFi) protocols. The new initiative ‘USDC Bootstrap’ will only invest in DeFi based projects using its stablecoin USDC.

DeFi is a relatively fresh concept in the blockchain sphere which can be described as the conventional financial products that you could get from a financial institution like lending or derivatives that have been developed on top of a blockchain. In other words, DeFi protocols consist of smart contracts that are governed by codes and the protocol on which they’re built on.

CoinDesk reports that after several deliberations with DeFi platform developers, the exchange says it realized that liquidity or availability of funds to borrow was one of the urgent needs for DeFi based initiatives. The exchange hopes that through grants, it will boost the development of the DeFi ecosystem.

To kickstart the initiative, Coinbase announced that it was investing 1 million USDC each in Compound as well as dYdX. However, unlike the Coinbase Ventures where investments are made in startups for an equity stake, the Bootstrap fund is designed to add to a protocol’s lending pool where interest will be returned after counterparties borrow from it.

Zhuoxun Yin, dYdX operations head, the most challenging aspect in the development of a new DeFi protocol is attracting borrowing demand. however, the addition of USDC to the lending pools will help to lower the interest rates and embolden clients to borrow more USDC.

Head of Bootstrap Fund Nemil Dalal explained that boosting lending protocols will help in the growth and development of DeFi, which is an area of much interest for Coinbase. In the recent past, Coinbase venture also invested in different DeFi protocols such as Dharma and BlockFi. Dalal explained that Coinbase was interested in enhancing decentralized finance within the banking industry.

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Author: Joseph Kibe

New Bitcoin Creation Theory Suggests Sci-Fi Writer Neal Stephenson is Satoshi Nakamoto

New Bitcoin Creation Theory Suggests Sci-Fi Writer Neal Stephenson is Satoshi Nakamoto

A new theory published online suggests that American science fiction writer Neal Stephenson is Satoshi Nakamoto.

In a blog post published earlier today, Peter Suderman at Reason.com writes:

“I am not saying that Neal Stephenson is Satoshi Nakamoto. What I am saying is: Would it really be surprising if he were?”

Stephenson, for those out of the loop, is a 59-year old American writer whose work has been categorized as science fiction, cyberpunk, historical fiction, and baroque. Across numerous novels, short stories, and essays, Stephenson has explored topics like math, cryptography, linguistics, currency, philosophy, and the history of science.

His best-known works from a 35-year writing career include Snow Crash, Cryptonomicon, and Seveneves. More recently, Stephenson has worked for Blue Origin, the private space company founded by Jeff Bezos. The inventors of the internet and the iPad, meanwhile, have both publicly claimed Stephenson as a muse.

Suderman sums up Stephenson better than I could by stating,

“He is the sort of writer whose novels include descriptions of vast nanotech defense systems, as well as of incredibly elaborate methods for eating Cap’n Crunch, complete with a special spoon. He keeps his head shaved and wears a gray-streaked goatee, a look that is part heavy metal wizard, part monk.”

That’s all great – but is there actually a chance that Stephenson is Satoshi Nakamoto? Or is this just an absurd fantasy?

Why Neal Stephenson Could Be Satoshi Nakamoto

Suderman proposes a number of reasons why Neal Stephenson could be Satoshi Nakamoto, including:

Satoshi Nakamoto and Neal Stephenson Are Interested in Similar Topics

Up above, we mentioned that Stephenson’s novels focus on several topics close to the crypto community, including math, cryptography, and currency. His work has also focused on the social and technological infrastructure of a post-government world, Asian culture, and other topics.

As Suderman explains, Stephenson’s work has also been heavily influenced by cypherpunks – just like Satoshi Nakamoto:

“His early work was heavily influenced by the cypherpunks, a coalition of hacker-technologists obsessed with cryptography, distributed information platforms, and science fiction (the title Cryptonomicon was inspired partly by the Cyphernomicon, a cypherpunk FAQ).”

You might think – big deal. Lots of people were interested in cypherpunk ideals. Satoshi was part of a global community of cypherpunks. However, certain elements of Stephenson’s stories have focused on topics surprisingly similar to bitcoin – long before bitcoin was invented.

Stephenson Describes an Anonymous Peer-to-Peer Communication System 13 Years Before Bitcoin

In his novel, The Diamond Age: Or, a Young Lady’s Illustrated Primer, Stephenson describes a worldwide “media net”, which is a type of anonymous peer-to-peer communication system that allows people to transfer money. Because of this media net, nation states have collapsed because financial transactions can no longer be monitored by governments. Tax collection is impossible.

Four years after that, Stephenson published Cryptonomicon, a novel tracing the World War II origins of cryptography and the efforts of a group of 90s-era hackers to setup a system of anonymous banking and digital currency outside the reach of traditional governments.

Stephenson followed up this work with a trio of novels called The Baroque Cycle that explains the historical foundations of math, money, and modern philosophy.

Clearly, Stephenson was thinking about the possibility of a system like bitcoin, including how it would work, what kinds of impacts it would have on the world, and how people would use it.

Of course, none of this means that Stephenson had any connection to bitcoin: during the early days of the internet, lots of people were theorizing about what this new tool could do and how it could work. So what other clues do we have that Neal Stephenson is Satoshi Nakamoto?

Neal Stephenson’s Initials (NS) Are a Reverse of Satoshi Nakamoto’s Initials (SN)

Neal Stephenson isn’t a pen name: it’s the guy’s real, legal name. He was born Neal Town Stephenson. Although he has written books under the name Stephen Bury and J. Frederick George, most of his work is published under the name Neal Stephenson.

The initials ‘NS’ are a reverse of Satoshi Nakamoto’s ‘SN’ initials.

Stephenson’s Latest Work Discusses the Best Way to Distribute an Enormous Amount of Wealth

Satoshi Nakamoto is one of the wealthiest people on the planet. Satoshi likely has a stash of anywhere from 1 million to 1.3 million BTC, making him a billionaire several times over.

Stephenson’s latest two novels, meanwhile, are focused on the idea of a video game developer rising to enormous wealth and then figuring out how to distribute that wealth.

Reamde, for example, was published in 2011 just a few years after the release of the bitcoin whitepaper. The novel discusses a draft-dodging marijuana Sherpa who founded a video game company based on the idea of converting in-game gold to real-world currency. The novel discusses the challenges of moving money across national and virtual boundaries. The protagonist lives in the Pacific Northwest – just like Stephenson. By the end of the novel, the protagonist has become very rich – worth hundreds of millions of dollars.

A follow-up novel called Fall follows the same protagonist at a later age. Fabulously wealthy, the protagonist is exploring ideas on how to cement his legacy, including the legal and organizational structure of foundations and how best to distribute his wealth.

Stephenson wrote this latest novel in late 2017, which is when bitcoin reached its all-time high. At this time, Nakamoto’s stash would have been worth somewhere between $20 and $30 billion. If Stephenson is Satoshi, he would have been dealing with the concept of suddenly becoming extraordinarily wealthy.

Other Stephenson Novels Hint at Bitcoin-Like Concepts

Suderman has thousands of additional words exploring the connection between Stephenson and Satoshi in various novels. Other connections between the two include:

  • In Stephenson’s 1992 novel Snow Crash, he imagined an online world or ‘Metaverse’ as a virtual gathering place where individuals could adopt new identities. The Metaverse provided a safe space for invention and reinvention. It also allowed criminals, entrepreneurs, and scammers to thrive. In other words, it sounds a lot like the internet we know today. The novel focuses specifically on the idea of internet anonymity, more than other sci-fi writers writing about the internet during this time period.
  • Multiple Stephenson works explore the idea of an elite tech-oriented class becoming more and more superior to lower classes. In Fall, Stephenson discusses how the rich elite can afford to pay people to have customized news feeds delivered in front of them, for example. In The Diamond Age, Stephenson explores the problem of fake news and trolling. The separation between rich and poor inexorably spreads with the invention of the internet.
  • Through all of these novels, Stephenson, as explained by Suderman, “maintains a keen sense not only the ways that technology might evolve but the cultural shifts it might entail, from news and social media to leadership and social structures in a virtual afterlife where people have limited senses of the self.

Final Word: Could Neal Stephenson Be Satoshi Nakamoto?

Neal Stephenson could certainly be Satoshi Nakamoto.

Of course, the homeless guy you walk past every day on the way to work could be Satoshi Nakamoto. Oprah Winfrey could be Satoshi Nakamoto. The crazy thing about Satoshi is that, even a decade after he publicly appeared online, we still have no concrete evidence connecting Satoshi with anybody.

It is clear, however, that American sci-fi writer Neal Stephenson discussed concepts closely connected to the world of bitcoin in numerous novels. Peter Suderman at Reason.com has an excellent writeup exploring all the connections between Neal Stephenson and Satoshi Nakamoto here.

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Author: Andrew T