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The Weaponization of Bitcoin And Global Finance (#GotBitcoin)

U.S. tariffs intensify pressure on the Turkish lira, raising prospect of an open-ended cycle of protectionism and devaluation. The Weaponization of Bitcoin And Global Finance (#GotBitcoin)

Trade wars may be morphing into something more dangerous: financial wars.

With Turkey facing a currency crisis, President Trump last week poured fuel on the fire by doubling tariffs on imports of its steel and aluminum to offset the effects of its weaker currency or force the country to release an American pastor. (Mr. Trump’s motive remains unclear.)

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In the hierarchy of things afflicting Turkey, this isn’t that high: The country’s problems are mostly self-inflicted, from its large current-account deficit and steep dollar debts to the politicization of its central bank.

But it is the latest example of how the U.S. and other countries are weaponizing international finance in ways that could destabilize the global economy and fray the intricate web of relationships that sustain it.


While trade wars aren’t good for growth, rarely do they induce a recession, or even a noticeable slowdown. The infamous Smoot-Hawley tariff of 1930 was at most a minor contribution to the Great Depression. By contrast, there’s a long record of international financial disruptions fueling economic stress, from the Depression to the bankruptcy of Lehman Brothers nearly 10 years ago.

The origins of such crises usually lie in private-sector excess (lending too much to risky countries or home buyers), but the catalyst is often government policy somewhere: France’s hoarding of gold helped precipitate the Depression, while then-Federal Reserve Chairman Paul Volcker’s determination to slay inflation triggered the Latin American debt crisis of the 1980s.

The U.S. government has long seen it in the country’s long-term interest to tamp down crises abroad. It came to Mexico’s aid in 1982 and 1995, and worked with the International Monetary Fund in 1997 to contain the Asian financial crisis. In 2008, the Fed assisted foreign central banks in propping up banks in their countries that were hit by the mortgage crisis.

When the U.S. deliberately inflicts economic pain it is typically for geostrategic reasons and, where possible, it acts in concert with allies. In recent years, Washington has exacted enormous damage on North Korea and Iran by cutting them off from the dollar-based banking system. European and U.S. sanctions on Russia for invading Ukraine, interfering with U.S. elections and poisoning a former Russian spy and his daughter living in Britain have wrought havoc on the Russian economy.

Mr. Trump’s deployment of financial warfare against Turkey breaks with tradition in several key ways.

First, while relations between Turkey’s increasingly autocratic President Recep Tayyip Erdogan and the West have been deteriorating for years, his recent transgressions—such as detaining pastor Andrew Brunson—aren’t the sort of threat to the U.S. or its allies’ security that typically draws such a response.

“Geostrategically, it’s insanity” to react so harshly, said Benn Steil, an expert on sanctions at the Council on Foreign Relations. “Turkey has, since the end of the Second World War, been a vital U.S. interest because of its geographical position.” The country remains a member of the North Atlantic Treaty Organization and a key partner in managing the crisis in Syria and the flow of refugees to Europe.

Second, using tariffs to neutralize the Turkish lira’s decline, like Mr. Trump’s increasing tariffs on China because it let the yuan drop, could aggravate instead of mitigate financial turmoil. Currencies respond to the relative performance of economic growth, interest rates, inflation and trade balances. The dollar is rising now because the U.S. economy is strong, capital is flowing in and interest rates are going up, which means the U.S. trade deficit should widen. The lira is falling because capital is fleeing, interest rates are too low and Turkey’s trade deficit needs to shrink. Mr. Trump is effectively trying to short-circuit this adjustment. But by undermining Turkish and Chinese growth, his tariffs have intensified downward pressure on those countries’ currencies against the dollar. It raises the prospect of an open-ended cycle of protectionism and devaluation.

For now, a global meltdown looks unlikely. Few markets share Turkey’s vulnerabilities, and global banks are relatively insulated from foreign defaults. But Washington’s willingness to stand by or even pile on in a crisis is a new factor to consider for investors deciding whether to flee when another country gets into trouble.

Mr. Trump tends to see other countries’ economic suffering as an advantage for the U.S., boasting earlier this month that his tariffs had helped tank the Chinese stock market. Thus, he is likely to repeat the exercise, and others will follow suit. Last week, Saudi Arabia retaliated against Canadian criticism of its human-rights record by freezing trade and dumping Canadian bonds, a move the U.S. declined to criticize.

Just as the size of the U.S. market gives Mr. Trump the advantage in any trade dispute, America’s control over dollar-based banking and the depth of the Treasury market give it the advantage in any financial conflict. Any country, including China, that threatens to dump U.S. securities would hurt itself more than it hurts the U.S. Yet if relations deteriorate further, such tactics would no longer be off limits.


And in financial wars, like trade wars, the “winners” pay a price. If crises hit emerging economies, they’ll buy less from the U.S. A Chinese slowdown and bungled devaluation in 2015 hurt commodity prices and the U.S. oil patch. And just as trade wars force other countries to seek alternatives to U.S. suppliers and customers, financial wars will encourage them to seek alternatives to the dollar. In both cases, the result will be a less integrated world and diminished American influence.

Updated: 11-9-2019

Weaponizing Blockchain — Vast Potential, but Projects Are Kept Secret

When Indian Defense Minister Rajnath Singh said that blockchain and artificial intelligence would “revolutionize war,” as Cointelegraph reported on Nov. 4, did he take things a bit too far? Jet engines have revolutionized warfare, and so have missiles and nuclear weapons — but shared digital ledgers?

Former NATO Secretary General Anders Fogh Rasmussen, for one, told Cointelegraph that he agrees with India’s minister when he was asked about blockchain’s possible military uses:

“Yes, potentially. Digital technologies have been transforming warfare since the 1990’s so emerging technologies such as blockchain have the potential to define the war industry over the coming decades. Data and data sharing will be critical for warfare in the future, particularly with the development of artificial intelligence.”

Rasmussen — former three-term prime minister of Denmark, current CEO of Rasmussen Global, and strategic advisor to the Swiss blockchain identity startup Concordium — added:

“Sharing data is fundamentally about transactions. Securing and sharing the right data in the right order between the right parties (computers, machines, defence agencies, and among allies) is critical in modern militaries and will only grow in importance in the future.”

Protecting Weapons From Hackers

Blockchain technology will be critical in defending key weapons systems as well as validating orders and battlefield information, among other uses. This is according to what Victoria Adams, the government practice lead for ConsenSys in Washington, D.C., told Cointelegraph. She added that the Indian minister’s remarks regarding blockchain “may have been a bit of a stretch,” but that AI, by comparison, is going to “revolutionize everything.”

Managing logistics and military supply chains will be a particular challenge, Adams said — especially as these become more privatized and complex with the addition of additive manufacturing (i.e., 3D printing). If the U.S. Marine Corps is going to put 3D printers in the field so that soldiers can manufacture spare parts on-site for F-35s, say, then it needs to protect these workstations from hackers — especially the digital specifications — Adams said.

“The Pentagon has said it doesn’t want a single point attack vector,” Joel Neidig — CEO of Simba Chain, a smart contract startup working with the U.S. Air Force to provide a blockchain-based platform to secure the supply chain — told Cointelegraph. And this is where blockchain technology, with its thousands of nodes, can indeed be of help.

If the supply chain is on a blockchain, one’s adversaries can no longer gain illicit entry through a single node or a single computer. According to Neidig, “They will have to take the whole network down, which isn’t so easy to do. Just think how resilient Bitcoin has been over the past 11 years. No one has been able to hack it.”

No Strategic Plan

The Department of Defense, and other U.S. security agencies, still doesn’t appear to have a clear, integrated strategy for incorporating blockchain into their operations, though use cases appear to be emerging piecemeal.

In September, for instance, the Department of Homeland Security awarded $143,478 to Vienna-based firm Danube Tech to develop blockchain security solutions, including digital documents like passports and green cards to be used at border crossings or in airports.

But according to what Markus Sabadello, the CEO of Danube Tech, told Cointelegraph, it isn’t far-fetched to see how a military organization could issue a digital identity for all its soldiers to establish their credentials, including their rank. Commanders could send orders through the decentralized digital network, and soldiers could verify who the message came from. The enemy would find it difficult to forge false identities, as all of them are registered on a blockchain, and there would be no one central server that the enemy could hack.

Blockchain technology could also be used in military-related areas like arms negotiations, Rasmussen suggested:

“One application that has been discussed is a so-called secure multi-party computation (MPC) which can be combined with blockchain so that a number of people can input information while keeping their individual inputs private. This is being discussed in the context of arms reduction and oversight agreements.”

It all isn’t happening fast enough, though, in Adams’ view. “You go to defense conferences, and you speak about this, and you get a lot of blank stares.” Yes, there are military blockchain initiatives in the works, “but they are all pilots, testing, getting the face wet — no energetic response.” Adams continued:

“I don’t see a strong vibe from the NATO countries. By comparison, Russia, and China’s People’s Liberation Army have shown that they get this.”

Several Countries Are Making Developments In This Area:

China

According to Deloitte’s 2019 Insight Global Blockchain Survey, China — more than any other country — will use blockchain “strategically instead of tactically,” according to Paul Sin, consulting partner at Deloitte Advisory. Moreover, 34% of Chinese respondents in the 2019 survey strongly believe in the disruptive potential of blockchain, more than most countries in the survey.

Elsewhere, statements from China’s People’s Liberation Army have caused some concern in the West. In a 2018 article, the PLA described how the technology behind Bitcoin could have military applications, including in its intelligence operations and in protecting weapon life-cycle data from cyberattacks.

According to Jahara W. Matisek, assistant professor of military and strategic studies at the U.S. Air Force Academy, the journal article was written specifically as a call to action. He quoted the PLA directly in his article in the journal National Interest, which said, “If we do not take precautions in keeping with the pace of the times, we will be subject to control everywhere.” Matisek commented on the quote:

“The PLA seems to recognize the importance of this emerging technological capability, but should China be allowed to control the future of information warfare?”

Russia

More than two years ago, the Russian news service Tass announced that blockchain technology might soon be introduced into the Russian military, but noted: “We should be cautious when approaching new technologies, study them in detail because they always carry not only new advantages but also new unknown risks and threats.”

In 2018, the Russian Defense Ministry announced it was launching a new research lab to study how blockchain could thwart cyberattacks. It hoped to build secure blockchain-based platforms to make it more difficult to hide traces of cyberattacks and track online intruders into its systems, according to Adams.

South Korea

In April, South Korea’s defense department announced a blockchain pilot program to prevent external tampering with its military supply chain. Kim Tae-gon, coordinator of the National Defense Agency, called blockchain technology “one of the core technologies of the 4th Industrial Revolution.” He added:

“The history of the entire process from bidding, evaluation, and results for defense improvement projects will be recorded on the blockchain, enabling more transparent management of the company selection process.”
India

India’s defense industry is undergoing “a churning to cope and employ these technologies, in order to safeguard the safety and security of critical infrastructure,” according to Defense Minister Rajnath Singh on Nov. 3, as reported by the Times of India.

Meanwhile, scholars in India are concerned about blockchain supporting the conduct of military operations.

According to Global Security Review, “With one author recognizing that as governments and individuals develop quantum computing abilities, blockchain will make it easy to hack into highly secure networks.”

United States

The U.S. Department of Defense — somewhat belatedly, perhaps — is recognizing the benefits of blockchain technology for national defense, noting in its July Digital Modernization Strategy 2019 report that its Defense Advanced Research Projects Agency, or DARPA, will study the technology. The report states:

“DARPA is starting to experiment with blockchain to create a more efficient, robust, and secure platform using a blockchain protocol that will allow personnel from anywhere to transmit secure messages or process transactions that can be traced through numerous channels of a decentralized ledger.”

The DoD referenced specific communications benefits, such as “facilitating communication between units and headquarters, and transmitting information between intelligence officers and the Pentagon.”

But many of the use cases noted above appear to be individual initiatives of departments or services sectors (e.g., the U.S. Air Force), and these are early in the developmental process. The U.S. DHS initiative with Danube Tech, for instance, is still in its pilot stage, and Simba Chain’s project with the U.S. Air Force only recently passed into phase two. It will be several years before a solution will be implemented at scale, Neidig told Cointelegraph.

NATO

NATO, as a political and military organization, needs to find ways of increasing investment across the alliance, as well as to cooperate more closely to develop new technologies like blockchain and AI, Rasmussen explained to Cointelegraph, adding:

“We often hear President Trump talk of the need for NATO allies to spend 2 percent of GNI on defense. This was a target agreed at my last NATO summit. But we also should focus on another target – 20 percent – which is the amount that NATO allies should spend on equipment and R&D. I believe we should raise this to 30 percent across the whole alliance.”

If Darpa Can’t Figure It Out, Who Can?

Not all concede that blockchain will revolutionize — or even impact — warfare in any meaningful way. DARPA, the DoD’s visionary agency, is supposed to anticipate the future, after all, whether it be the internet, driverless cars or the autonomous battlefield.

On Nov. 19, 2019, DARPA issued a request for information on distributed consensus protocols to see how this technology might improve security, storage and computing in the Defense Department. According to C4ISRNET:

Media for the Intelligence Age Military, such a request is “almost an indictment of the technology itself. If DARPA can’t figure out a responsible, value-generating use for blockchain, who can?”

It won’t be easy to introduce decentralization (i.e., blockchain) into top-down, heavily centralized military organizations. Some military minds may be hesitant to give up control, even if the U.S. military has been encouraging more bottom-up initiatives in recent years. “Yes, it’s a problem,” Adams said. “You gain control by giving up control. It’s hard to do. It requires a big cultural change.”

Higher Stakes

Overall, the development of blockchain technology is part of a wider picture about who cracks the next generation of technology — from applications like blockchain through to artificial intelligence — former NATO Secretary General Rasmussen told Cointelegraph:

“It is an area I’ve been working on in recent months as I firmly believe the world’s democracies must win this race.”

If that is to happen, a more robust and integrated stance from the U.S. and its allies might be in order.

Updated: 6-21-2021

Peter Thiel Says, “China “Weaponizing” Bitcoin To Hurt The U.S.

Thiel’s comments about China “weaponizing” bitcoin to hurt the U.S. are a warning about the cost of inaction.

The battle over bitcoin’s evolving role just became a piece in a complex game of political strategy.

Peter Thiel’s talk earlier this week at a Richard Nixon Foundation event thrust the cryptocurrency even further out onto the geopolitical stage and highlighted two important macro narratives that investors should keep an eye on and not just for their potential impact on crypto returns.

Here’s One Extract From His Comments:

“I do wonder whether bitcoin should be thought of as a Chinese financial weapon against the U.S. It threatens fiat money, but it especially threatens the U.S. dollar.”

As with most things in life, context is key, and this statement is crying out for it.

On the surface, it seems as if he is asking U.S. regulators to prevent bitcoin from becoming more of a threat to the U.S. dollar. This is the wrong interpretation.

The underlying intention is both more meaningful and more supportive of bitcoin and, ultimately, the U.S. than it may at first appear.

Others have pointed out that Thiel is probably playing 4D chess here, and I agree with that. But I believe his underlying message is about more than bitcoin and about more than trying to get the U.S. to sit up and take notice.

Bitcoin As A Weapon?

Before we unpack why Thiel might have said what he said, let’s look at what he might have meant.

Why Would Bitcoin Threaten The U.S. Dollar?

As early as 2013, Thiel was talking about bitcoin’s potential to “change the world,” and has on other occasions praised bitcoin’s reserve qualities.

Thiel seems to be suggesting that bitcoin’s stable supply and worldwide reach could one day put it in a position to rival the U.S. dollar as the world’s reserve currency. And his statement implies he believes China is supporting bitcoin, effectively “weaponizing it,” for this reason.

Does He Really Believe This?

He has access to several of the best minds in the crypto industry through some of the investments made by his funds, and is arguably a very smart individual himself. He has acknowledged that bitcoin is not the best payments system, and surely recognizes the dollar is a strong reserve currency precisely because it is an efficient payment method. Countries want to hold it because it is essential for global commerce.

And as for China “weaponizing” bitcoin to hurt the dollar, Thiel is no doubt aware of just how long China is on the dollar.

Chinese investment of U.S. Treasury bonds has been increasing since October of last year, and is now at almost $1.1 trillion.

What’s more, on the current macro landscape, bitcoin is probably well below central bank policies on the list of things that could hurt the U.S. currency.

And Thiel probably knows China has not exactly been “friendly” to bitcoin. On top of the years-old ban on crypto exchanges, authorities moved to shut down bitcoin miners in Inner Mongolia last month. Given the country’s constant battle with capital flight, it’s more likely it wishes bitcoin would just go away. And if it really wanted to weaken the dollar (which is debatable), it has methods within reach that would not also cause damage to the yuan.

So, Thiel may have said that China was trying to bring down the U.S. dollar by “weaponizing” bitcoin, but I doubt he really believes that. So why did he say so? What is he hoping to achieve?

The Real Issue

To dive into these questions, we need even more ladlefuls of context.

The theme of the seminar was technology and national security. The comment flagged above was tucked into an answer to a question about China’s digital currency plans, and a discussion flowed about the potential control that would give the state over its citizens. The conversation also touched on AI, supply chains and much more, all with a sharp tinge of concern about ideological influence. Thiel even referred to the Chinese government as “omni malevolent.” Let that sink in.

Thiel’s remarks on bitcoin were most likely, as many have pointed out, an attempt to get the U.S. regulators to start taking bitcoin more seriously. But they were also about the broader threat to U.S. dominance that he sees coming from China.

The first point may seem risky – many are concerned the U.S. might decide to ban bitcoin if it starts to see it as a threat. But, as I’ve written elsewhere, this is unlikely to happen as authorities have been watching the social unrest triggered by attempts to curtail cryptocurrency activity in countries such as Nigeria. Plus, a U.S. attempt to ban bitcoin would be the best advertisement that something like bitcoin is needed, and the domestic fallout could shore up China’s soft power play.

It is more likely that greater attention to bitcoin regulation would support investment in crypto infrastructure, which would have extended effects throughout the industry.

This includes putting institutional investors’ minds more at ease with the concept, and possibly even removing the last barriers to approval of a bitcoin exchange-traded fund by the U.S. Securities and Exchange Commission.

The Arc of History

Now, let’s turn to the broader context. As a declared Republican who donated generously to Donald Trump’s first presidential campaign, Thiel was closer to the last administration than this one. He, and others, are concerned the new administration will take a more relaxed stance on relations with what many see as the greatest threat to U.S. power since the Cold War: China.

This almost nationalistic tone can also be heard in Kevin O’Leary’s insistence on CoinDesk TV last month that investors aren’t going to want “China coin.”

What’s more, the 2021 National People’s Congress held in February ratified the next five-year plan, which focuses on, among other things, shoring up China’s position on the global stage. The previous five-year plan described how a peaceful multilateral world would benefit China. This one highlights the danger of “hegemonism,” and describes a strong economic growth based on a vibrant domestic economy that is less dependent on others.

The crescendo in anti-American rhetoric and diplomatic actions point to escalating competition for not only trade but also hearts and minds on the international stage. The soft-power battle is being backed by loans and investment far beyond China’s borders in what appears to be a long game of influence.

I heard an interesting metaphor the other day: The U.S. favors chess, which is about capturing the opponent’s pieces in order to kill its king. The Chinese prefer Go, which is about a slow and stealthy occupation of territory.

Thiel seems to be saying the Chinese are playing Go with bitcoin as well as with blockchain, AI and other new technologies. He is effectively asking the U.S. to watch out for the territorial creep its inaction is facilitating.

Thiel’s talk is likely to have repercussions, slow and subtle but real and meaningful. Hopefully, U.S. regulators will recognize the real opportunity in supporting the use of bitcoin and the development of its infrastructure.

Hopefully, they will see that bitcoin is more representative of the American values of freedom and choice than many of the other new technologies making their mark on societal structures today. And hopefully they will understand that bitcoin will thrive no matter what they do, so they might as well start figuring out how to harness its innovation.

For those of us who love irony, there is much to appreciate in this emerging picture. Bitcoin is being thrust into a tussle between two world powers when it was created to live outside national boundaries.

It is being associated with political intent when its inbuilt ideology is supposed to flourish outside party lines. It is being used as a tool in a shift away from globalization and towards nationalism when its design is based on decentralization.

Here’s the thing: Bitcoin doesn’t care. It can be what anyone wants it to be. It’s going to continue functioning the way it does, regardless of how people see it. I’m pretty sure Peter Thiel knows that, and so if he wants to use bitcoin to make larger points that he believes are necessary for prosperity and freedom, then I say we leave him to it.

Updated: 7-21-2021

China Is Pumping Money Out Of The US With Bitcoin

Chinese authorities seem to be putting things in order rather than declaring war on crypto, aiming to further weaken the U.S. economy. China Is Pumping Money Out Of The US With Bitcoin

The ongoing United States-China trade war is in its fourth year. Former U.S. President Donald Trump saw different results from what he initially expected: America has taken a hit from higher tariffs and sanctions against Chinese companies and hasn’t benefited from it nearly to the same extent. It has cost the country up to 245,000 jobs. The U.S. Chamber of Commerce calculated that the situation puts the exports of each state at risk. For example, the damage to Florida’s exports alone has already reached $1.9 billion.

At the same time, China was taking a smarter approach: It not only imposed reciprocal sanctions and exported its products through intermediary countries (Vietnam, Taiwan and Mexico), but also made the U.S. pay for unsecured and poorly regulated assets — cryptocurrency.

Hidden Billions

The United States annually inject billions of dollars into the Chinese economy without even suspecting it. The reason is that the majority of Bitcoin (BTC), which is exchanged mainly for U.S. dollars worldwide, is mined in China. It hosts 65% of all mining farms.

To earn Bitcoin rewards, powerful computers solve complex math problems 24/7. Part of the newly mined coins goes directly to crypto exchanges, while the rest can be kept in the miners’ crypto wallets, but is eventually sold to dollars. On average, 900 BTC are mined every day, and the total daily revenue is about $31 million (as of the end of June). That means that in just a year, the miners have earned over $10 billion.

Taking into account China’s share of mining farms, the local miners have earned about $7 billion since last summer. If both the price of Bitcoin and its popularity keep increasing, the revenue will double or even triple each year. In one way or another, the money will circulate throughout the country’s economy: It will be spent, saved or invested.

Under the Party’s Control

The Chinese government is well aware of the volume and significance of U.S. dollar investments through cryptocurrencies.

Despite the heavily increasing regulation, the authorities are obviously not going to ban Bitcoin.

China restricted crypto transactions for banks and payment companies back in 2013. In 2017, the authorities also shut down local crypto exchanges and blocked access to foreign platforms. That said, locals could legally own cryptocurrency all this time.

What we see now is essentially a reminder of the previous restrictions imposed on financial institutions instead of the introduction of new ones.

On one hand, the Chinese authorities want to prevent the “transmission of individual risks to the social field,” and on the other hand, they leave the door wide open for foreign investors.

At the same time, the Chinese authorities have begun to restrict mining, which concerns many people on the market. The official reasons are excessive energy consumption and carbon dioxide emissions that prevent the country from achieving carbon neutrality by 2060. But the real situation is a bit different from official statements.

First, the Chinese miners already source cheaper hydroelectricity, which is highly developed in southern provinces, and only switch to fossil-based fuel during the dry winter season when they migrate to the north.

Secondly, the authorities have fully banned new mining projects and the existing ones in three regions: Qinghai, Inner Mongolia and Xinjiang. Other provinces that are rich in hydropower resources, like Yunnan or Sichuan, are in no hurry to impose a total ban. While Yunnan was planning to shut down only illegal BTC mining farms “with a campaign against misuse of electricity,” later in June it was reported that all mining farms in Yunnan Province were shutted down.

Chinese authorities seem to be putting things in order rather than declaring war on cryptocurrencies. The technological limitations of the Bitcoin supply are to work in China’s favor: It allows the country to influence the price of the crypto while keeping it in miners’ possession and without selling it on financial markets.

However, if the restrictions keep tightening, the mining power may be redistributed between other countries. The Chinese mining equipment manufacturers — BTC.TOP, Huobi and HashCow — announced that they are suspending domestic sales and expanding their international presence, including to North America.

Who Will Pick Up The Idea

At face value, the possibility of Chinese miners moving to North America seems beneficial to the United States. But experts pointed out that the continent doesn’t have a lot of idle energy capacity. Besides, moving countries takes time that competitors can take advantage of.

The idea of ​​taking control over not only crypto transactions but also Bitcoin mining is quickly gaining traction in developing countries.

In Iran, mining has become one of the most accessible industries amid tough U.S. sanctions. The Iranian government is taking almost the same path as China: The authorities are to ban the use of cryptocurrencies generated abroad, but they allow paying for imported goods with domestically mined coins. Over the past year, Iran earned more than $400 million from cryptocurrency mining, with the United States’ revenue being only twice as much.

Another country planning the development of mining projects is El Salvador — the first country to adopt Bitcoin as a legal tender — that U.S. President Joe Biden refused to visit. El Salvador’s President Nayib Bukele is considering capitalizing on “very cheap, 100% clean, 100% renewable” energy from local volcanoes.

In this context, Kazakhstan seems to be the most politically neutral country. Here, a huge mining center by Enegix with a capacity of 180 MW, and up to 50,000 mining rigs will start operating in September. What’s more, Chinese manufacturer of mining equipment Canaan has set up a new service center in Kazakhstan.

China might exploit the export of their crypto farms as a means to further weaken the U.S. economy, while the U.S. government has no significant leverage to stop the dollar outflow caused by crypto transactions. Imposing a crypto ban for Americans would simply be undemocratic.

The only option for the U.S. government is to weaken the appeal of Bitcoin through every possible means. This would explain why Elon Musk, the owner of some of the largest American companies, Tesla and SpaceX, suddenly switched from supporting Bitcoin to criticizing its environmental impact.

The same thing happened to Greenpeace, which no longer accepts crypto donations, even though it had been doing so for the past seven years. It seems that the escalating campaign against Bitcoin has more to do with politics rather than the environment.

 

 

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