In this week’s edition, we mull over what bitcoin’s steady climb back from $6000 means to cryptofans vs. what it means to Wall Street, discuss the effect thus far of SegWit, and take an extended look into how bitcoin is helping to transform the economy of one of the unlikeliest of places: Las Vegas, Nevada.
Bitcoin Up, (Most) Alts Down
The price of bitcoin surged upward of $11,000 for the first time this month, helping to subside fears of a continued crypto bubble collapse. Though the media remains largely pessimistic about the future of cryptocurrency, the total market cap of all coins continues its upward trend. Ethereum (ETH), Litecoin (LTC) and Bitcoin Cash (BCH) were all down for the week while Ripple (XRP) surged on early Sunday.
Cryptocurrencies run the risk of being a short-lived fad, according to a recently published piece in the ubiquitous Wall Street Journal. Branded as an “exotic” investment, the newly-launched Bitcoin ETF did not gain favors with the publication. Nor in Wall Street’s favor are exchange-listed investments firms that attempted to capitalize on 2017’s blockchain craze by renaming themselves accordingly. The move proved to be fruitful only for a matter of weeks, before investors became savvy of the ploy, ultimately leading to one such firm publicly distancing themselves from cryptocurrency altogether.
Despite increasing wariness among Wall Street investors, the number of bitcoin transactions using SegWit more than doubled in two days time after being launched as part of the latest Bitcoin Core release last week. Over 30% of the Bitcoin Network now uses the data-reducing practice that was implemented to help bitcoin achieve the worldwide scalability and mass adoption once envisioned by its creator(s). As a direct result of SegWit, transaction fees have shrunk considerably over the last week. Transactions with fees as low as 600 satoshis, or $0.69 as of the writing of this article, were being added to the blockchain within 7 minutes time.
A transaction fee of less than $0.70 was used to send 5 BTC to 11 different addresses.
BTC Finds an Unlikely Home in Nevada
Las Vegas might not seem like an obvious choice for cryptocurrency to take hold. After all, Nevada is one of two states to legally allow gambling, and bitcoin could be a potential rival to the desert state’s claim-to-fame casino industry. Indeed, by eliminating the middleman and need for human intervention, bitcoin-based casinos and sportsbooks can afford to offer higher payouts than their land-based competitors. While many casino operators have shunned the use of bitcoin, some are embracing it, choosing to include bitcoin as a form of payment for their own online casinos. Part of the reasoning is that by catering to a segment of their clientele that wants to bet with bitcoin, they don’t run the risk of losing their customer base. As a result, bitcoin is having a transformative effect on the Las Vegas economy.
There are over 25 bitcoin ATMs located in the Las Vegas metro area. Although the rigid commissions and transaction fees are quite capable of rendering bitcoin unsuitable for smaller transactions, competition among the many vendors servicing the area helps to keep fees down. According to state law, it is illegal to gamble online in Nevada, though this rule has apparently never been enforced. Bitcoin is suitable not only for gambling but can easily be gambled upon itself, thanks to its highly speculative nature and wild price swings. As people travel to Vegas from all over the world to fulfill the desires of their gambling spirit, there’s no doubt bitcoin’s notorious volatility as an investment contributes to its popularity in the state.
Not all bitcoin-related news to come out of the Nevada city is positive, however. In a blow to states rights in two aspects, federal agents charged a Las Vegas area man with bitcoin- and marijuana-related money laundering crimes. Tracking the long-time bitcoin seller through the website localbitcoins.com, federal agents began their investigation in 2015, culminating in January 2017 when he sold an undercover FBI agent 9.998 bitcoins for $14,000 – a price that included a $5,300 markup at the time. The accused immediately took to Twitter to proclaim his innocence, citing that neither aspect of the transaction was against Nevada state law.
The case has managed to generate much sympathy among the bitcoin community, with anonymous donations coming in to help cover court costs. As it is something of a landmark trial of its kind, it underscores the need for enhanced legal clarification when it comes to the legality of bitcoin. The lack of regulatory guidelines concerning cryptocurrency is not isolated to the United States. There is a push from crypto users and exchanges worldwide for greater clarity when it comes to Anti-Money Laundering (AML) statutes surrounding digital currencies, especially by those whose businesses involve them and who want to remain compliant with applicable laws.
With a rather impressive list of physically-based merchants already accepting bitcoin throughout Las, its not surprising that the cryptocurrency is thriving here. Bitcoin’s popularity managed to grow in a state where not only is online gambling technically illegal, but it actually runs in competition with the dollar in one of its most popular forms of use: gambling. As we mentioned last week, bitcoin is also being used in another aspect of the entertainment industry which thrives in “Sin City”: the adult entertainment industry. QR codes representing bitcoin addresses have become the latest form of temporary tattoo wear for employees at a Las Vegas strip club. While the move is considered to be in self-promotion according to critics, several clients have already taken to the practice, which is seen as being more discrete and private than throwing cash around the stage.
Also in the News
- Several thousand computers dedicated to bitcoin mining were stolen in Iceland, making it one of the biggest thefts to ever occur in the tiny country of 450,000.
- A new form of ransomware known as Thanatos is infecting computers in America by storm, encrypting hard drive contents and demanding hundreds of dollars for their release.
- Computer guru Steve Wozniak publicly recounted the time he got bilked out of thousands of dollars in a fraudulent bitcoin sale, admits falling for credit card scam.
- Rapper 50 Cent copped to not actually having a fortune in bitcoin, admitting that his previous statements of being a “surprise bitcoin millionaire” were an attempt to play along with a joke and not meant to be taken seriously.