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cryptocurrency

August 27, 2021

Bitcoin has Entered the Mainstream. Now What?

For centuries, individual governments have created, distributed, and regulated their own physical currencies. Even with the rise of checks, debit cards, and credit cards, nationalized currency is still the norm for every country on Earth. Of course, the physical currency itself isn’t valuable. After all, a $100 bill isn’t made with $100 worth of materials; the bill is valuable because the government says it’s worth $100. So if the material itself doesn’t provide the value, what if something other than physical currency could provide value too?

Even something as integrated as physical currency was still susceptible to new, digital ideas. In 2009, bitcoin was launched. While it languished in relative obscurity for its first few years, it entered the public consciousness after one high-profile case: the Silk Road marketplace. The revelation of a thriving, online black market that survived on anonymous, digital payments was frightening to many. However, it also showed what the future of currency could be. A fully digital, borderless currency has the potential to change the entire global economy. And while this economic revolution is a long way away, bitcoin continues to gain momentum, proving itself to be more than just a fad. And while bitcoin may never overtake national currencies, its ever-growing acceptance shows that it isn’t going away any time soon.

From Obscurity to Omnipresence

When bitcoin was first launched, it was almost completely unknown. After all, cryptocurrencies weren’t really a thing in 2009. And even until 2016, an estimated 46% of all bitcoin transactions were used for illegal goods and services [1]. Put simply, bitcoin was much more popular among the dark corners of the Internet than the general population in the coin’s early days. However, in 2017, bitcoin entered the mainstream. That year, the value of bitcoin increased 1,824%, from under USD $1,000 to a then-high of USD $19,783 [2]. And while bitcoin’s value remained volatile after this jump, it proved that bitcoin was more than a currency for illegal goods; it was a currency with the potential to revolutionize business and government.

In 2021, it is beginning to realize that potential. While widespread use and acceptance of bitcoin is still hypothetical, major corporations are beginning to embrace the revolutionary cryptocurrency. Businesses that accept bitcoin payments include AT&T, Overstock and PayPal [3]. And while traditional cash and credit cards still make up the vast majority of purchases at these businesses, bitcoin’s increased acceptance highlights its continued momentum in 2021.

In addition to corporations’ acceptance, some national governments are encouraging the use of bitcoin as well. In June 2021, El Salvador passed a law making bitcoin a legal currency in the country [4]. While it does not go into effect until September 7, this radical experiment could be the turning point for bitcoin. If successful, El Salvador could show how bitcoin can be used as an effective, convenient and stable currency. Its potential success in El Salvador could lead to more widespread adoption as legal tender in various countries, making the coin even more valuable, and more stable. However, if unsuccessful, it could highlight bitcoin’s volatility, decreasing its value and slowing its momentum.

Government Regulations

While most countries don’t accept bitcoin as a currency, that doesn’t mean that it is free from government oversight. Although bitcoin was created as a decentralized, international currency, it is still subject to national laws. And with its growing popularity comes growing regulation. For example, China has banned banks and other financial institutions from providing services regarding cryptocurrency. This means bitcoin trading is outlawed in China, although individuals are still allowed to hold cryptocurrencies [5]. China’s government blames bitcoin’s high volatility for the ban, claiming that cryptocurrency trading could put individuals and the entire nation’s economy at risk.

In the United States, however, bitcoin trading is legal and faces relatively few regulations. Americans are free to buy and sell cryptocurrencies with little government interference. However, it may not be this simple for long. Lawmakers are attempting to increase regulations on bitcoin and other cryptocurrencies, stating that they pose a tax evasion risk [6]. Therefore, Congress is debating the addition of more tax-reporting requirements for cryptocurrencies [7]. So while cryptocurrency faces few regulations in the United States today, it will likely become regulated similarly to stocks and gold in the future.

Finally, bitcoin has faced pressure from environmental activists as well. The process of bitcoin “mining” is energy-intensive, with high-powered computers constantly churning to solve complex algorithms. Due to this mining, the cryptocurrency itself has a larger carbon footprint than American Airlines [8]. Because of this massive environmental impact, bitcoin may not be a sustainable currency, as it will remain minable until 2140 [9].

The Future of Bitcoin

In a way, bitcoin is similar to a promising startup: It burst into the mainstream in 2017 and has shown incredible potential. However, it’s going up against a powerful competitor: Physical currency. Therefore, bitcoin has to prove its worth in order to survive. Can it maintain stability and keep consumer trust? Can it offer benefits that physical currency can’t? Right now, we simply don’t know. However, its increased acceptance by businesses and governments can certainly lead to trust, stability and convenience. Therefore, its potential is still sky-high.

Ultimately, potential is not the same as success though. An estimated 17% of Americans now own a share of bitcoin [10]. But many of those owners see bitcoin as an investment, rather than a competing currency. And for those who don’t own bitcoin, it is still seen as unstable, confusing and complex. Put simply, bitcoin is not more convenient than physical currency in 2021, and is significantly more volatile. It doesn’t have the widespread use and trust that it requires to be a competing currency. So while bitcoin has certainly gained momentum and trust in recent years, it still has a long way to go before proving itself to be a viable, everyday currency.

[1] Foley, Sean, and Jonathan R. Karlsen. “Sex, Drugs, and Bitcoin: How Much Illegal Activity Is Financed Through Cryptocurrencies?” OUP Academic. April 04, 2019. https://academic.oup.com/rfs/article/32/5/1798/5427781.

[2] Morris, David Z. “Bitcoin Hits a New Record High, But Stops Short of $20,000.” Fortune. December 17, 2017. 

https://fortune.com/2017/12/17/bitcoin-record-high-short-of-20000/.

[3] Lisa, Andrew. “10 Major Companies That Accept Bitcoin.” Yahoo! Finance. August 25, 2021. https://finance.yahoo.com/news/10-major-companies-accept-bitcoin-190340692.html.

[4] “Bitcoin to Become Legal Tender in El Salvador on Sept 7.” Reuters. June 25, 2021. https://www.reuters.com/technology/bitcoin-become-legal-tender-el-salvador-sept-7-2021-06-25/

[5] “China Bans Financial, Payment Institutions from Cryptocurrency Business.” Reuters. May 18, 2021. https://www.reuters.com/technology/chinese-financial-payment-bodies-barred-cryptocurrency-business-2021-05-18/.

[6] Franck, Thomas. “U.S. Treasury Calls for Stricter Cryptocurrency Compliance with IRS, Says They Pose Tax Evasion Risk.” CNBC. May 20, 2021. https://www.cnbc.com/2021/05/20/us-treasury-calls-for-stricter-cryptocurrency-compliance-with-irs.html.

[7] Kelly, Makena. “Controversial Crypto Rules Remain in Infrastructure Bill after House Vote.” The Verge. August 25, 2021. https://www.theverge.com/2021/8/25/22641375/cryptocurrency-infrastructure-irs-tax-developers-miners-bitcoin.

[8] Mellor, Sophie. “Elon Musk Is Right: Bitcoin Mining Is Bad for the Planet.” Fortune. May 13, 2021. 

https://fortune.com/2021/05/13/musk-bitcoin-mining-bad-planet-heres-how-bad/.

[9] Hayes, Adam. “What Happens to Bitcoin After All 21 Million Are Mined?” Investopedia. August 23, 2021. https://www.investopedia.com/tech/what-happens-bitcoin-after-21-million-mined/.

[10] “About 46 Million Americans Now Own Bitcoin.” Nasdaq. May 14, 2021.https://www.nasdaq.com/articles/about-46-million-americans-now-own-bitcoin-2021-05-14.

Filed Under: Business, crypto Tagged With: bitcoin, business, cryptocurrency, government, Privacy

August 13, 2021

What the New Infrastructure Bill Means for Tech

On Tuesday, the United States Senate passed a USD $1 trillion infrastructure bill, sending it to the House of Representatives for further debate. While the details and amount of money are subject to change, it is likely that some kind of bill to expand and rebuild the country’s infrastructure will be passed and signed in the coming months. And while most of the bill’s funding will focus on fixing America’s roads, bridges, and other transportation infrastructure, tech is far from being ignored.

Infrastructure spending has long been a goal of many Presidential administrations. And while many bills fall victim to partisan battles, the general idea of infrastructure spending enjoys bipartisan support. Of course, certain tenets of the infrastructure bill will still face fierce debate, particularly the portions that pertain to technology. However, because there is bipartisan agreement that America’s infrastructure needs updates, a bill is likely to pass. And while the numbers may change, the country is still set to spend billions to update, modernize, and regulate technology infrastructure.

Crypto Tax Changes

One of the most important (and controversial) tenets of the bill is creating tax-reporting mandates for cryptocurrency brokers. In practice, this would make reporting cryptocurrency income similar to traditional stock income, where brokers already report their clients’ sales to the IRS. Congressional accountants estimate that this update to crypto tax laws would raise USD $28 billion over ten years [1]. And while this money doesn’t cover the entire cost of the bill, it would pay for the USD $25 billion to repair America’s structurally deficient bridges.

The reason for its controversy is cryptocurrency’s unique nature. Opponents say that the language of the bill regarding cryptocurrency is too broad, leading to software developers and crypto miners facing tax requirements. Additionally, some fully oppose taxes on cryptocurrencies, due to their purposefully decentralized nature. However, supporters of this tax claim that cryptocurrencies are like any other property, and therefore should be subject to capital-gains taxes. Supporters want cryptocurrency gains to be taxed the same as other properties, such as gold and stocks. So while cryptocurrency will still be largely decentralized and international, it will likely become subject to national taxes in the future.

Broadband Access

Another large portion of the infrastructure bill is dedicated to broadband affordability. While those living in urban or suburban communities typically have easy access to the Internet, those living in rural communities aren’t afforded that same accessibility. Many rural areas don’t have consistent access to the Internet, and if they do, the costs can be immense. To combat this Internet inequality, the infrastructure bill offers billions in grants to low-income households. The new program offers monthly USD $30 subsidies toward purchasing high-speed Internet [2]. 

As millions of Americans have spent the past year working and studying from home, reliable Internet access has become a necessity, especially for low-income college students. The new bill also provides USD $1 billion for colleges and universities to provide additional direct grants to students in need. Overall, expanding broadband access will help ensure more Americans have affordable access to the Internet. After all, access to online services has proven itself to almost be a necessity in nearly every facet of life.

Electric Vehicle Expansion

One of the largest physical infrastructure plans included in the bill is a USD $7.5 billion investment in electric vehicle (EV) charging stations [3]. While EVs have been available to Americans for years, adoption has been slow, partially due to the lack of EV chargers available across the country. This investment hopes to encourage Americans to switch to more environmentally-friendly EVs, as opposed to traditional gasoline-powered cars. In addition to EV charging stations, the bill also sets aside USD $7.5 billion to help cities adopt zero-emission public transportation vehicles. 

Cybersecurity Updates

The bill also offers USD $1.9 billion for cybersecurity updates. USD $1 billion of that fund is slated to be given as grants to state and local governments [4]. Following increased numbers of cyberattacks and ransomware incidents, this money will be useful for updating aging technology. State and local governments often rely on older tech, making it easier for cybercriminals to stage a successful attack.

In addition, these grants will greatly help local governments, who are particularly susceptible to ransomware attacks [5]. Local governments often oversee critical infrastructure, such as water, sewage, schools, and airports. Because all of these are necessities for the community, cybercriminals often target them, knowing that local governments will be desperate enough to pay the ransom. Thankfully, the infrastructure bill’s investment in modernizing cybersecurity for local governments can help protect these communities from the rising threat of cybercrime.

Why Tech is Infrastructure

While the infrastructure bill receives broad support from Americans, some have objected to the bill’s spending outside of traditional infrastructure. After all, “infrastructure” has always meant roads and bridges, rather than tech. But because technology is becoming so present in our lives, it’s important to ensure our tech consistently works. Think about it: If your employer’s Internet went out on a workday, it would be more than an inconvenience. It would likely cause nearly everyone’s work to pause. Simply put, we are incredibly reliant on technology, so it makes sense to ensure that technology works properly and consistently.

When people hear the word “infrastructure,” many think of physical infrastructure, such as roads, bridges, pipes and buildings. Naturally, most of the infrastructure bill is slated to fund these physical infrastructure projects. However, with the Internet truly becoming a necessity in recent years, technology needs to be included in infrastructure as well. To a certain extent, it’s just as important as water or sewage. When our country’s technology works as intended, it can lead to incredible efficiency and convenience. And even in a pandemic, technology allowed us to continue to get work done, ensuring that businesses and governments could continue to serve their communities. But when technology doesn’t work, it can lead to chaos and frustration. Just a loss of Internet can cause entire businesses to temporarily shut down. So because technology and the Internet are so vital to individuals, businesses, and governments, it simply makes sense to consider technology as infrastructure. After all, the Internet isn’t just a luxury anymore; it’s a vital necessity for all.

[1] Gordon, Marcy. “EXPLAINER: How Cryptocurrency Fits into Infrastructure Bill.” AP NEWS. August 10, 2021. https://apnews.com/article/technology-joe-biden-business-bills-cryptocurrency-92628a41124230448f65fdeb89ffad7d.

[2] Gravely, Alexis. “Infrastructure Bill Expands Broadband Affordability for Students.” Infrastructure Bill Expands Broadband Affordability for Students. August 10, 2021. https://www.insidehighered.com/news/2021/08/10/infrastructure-bill-expands-broadband-affordability-students.

[3] Szymkowski, Sean. “Bipartisan Infrastructure Bill Passes US Senate with Billions for EV Charging Network.” Roadshow. August 10, 2021. https://www.cnet.com/roadshow/news/biden-bipartisan-infrastructure-bill-ev-charging-network-senate/.

[4] Miller, Maggie. “Senate Includes over $1.9 Billion for Cybersecurity in Infrastructure Bill.” TheHill. August 10, 2021. https://thehill.com/policy/cybersecurity/567204-over-1-billion-in-cybersecurity-funds-included-in-senate-passed.

[5] Garcia, Michael. “The Underbelly of Ransomware Attacks: Local Governments.” Council on Foreign Relations. May 10, 2021. https://www.cfr.org/blog/underbelly-ransomware-attacks-local-governments.

Filed Under: Business, Culture Tagged With: cryptocurrency, cybersecurity, government, infrastructure, technology

June 12, 2019

AXEL IPFS Is Out Now

Two weeks ago we released the AXEL Wallet, the window into our blockchain and the basis of everything we plan to do. And now, it’s only getting better!

Not only have we released one of the best-designed blockchains on Earth, but we also integrated it with the most advanced IPFS platform out there. You no longer have to make a choice between privacy or convenience, you can have both. There already are ways to stay private online, but privacy often comes at the cost of your experience and is inconvenient. AXEL IPFS is the best of both worlds, it’s secure and encryption-enabled, while still being fast and free!

But more important than just the technology of the distributed web is the team who built it. No matter how great their product is, would you really want one of those big-tech conglomerates, who have continually monitored you, sold your data and abused your trust, starting the distributed web? Do you really trust them to have your best interest at heart? While they may have the right technology, their past behavior should make you wary of trusting them with something as important as the distributed web.

Unlike most tech companies our business is not in advertising, we don’t host ads and we don’t sell data. Our business is privacy; specifically, your privacy. It has always been our business and it always will be.

That’s why we started this project. Our entire company is based around privacy and data custody. For over a decade, our team has been working on products to give you back your data, and give you the option to divorce yourselves from the surveillance-web that’s been forced upon us by big tech. Every product and project we’ve worked on has been building towards this moment.

The distributed web is no longer something to talk about as something that’s coming, it’s here. We built it, for you. AXEL IPFS is already the most advanced IPFS-integrated blockchain, and it’s just going to keep getting better with time! But now it’s your turn, show us what you can do with it, how you’d live your life, free from surveillance and censorship.

Welcome to the future of the internet, welcome… to AXEL IPFS.

Filed Under: Uncategorized Tagged With: blockchain, crypto, cryptocurrency, data privacy, IPFS, masternode, Privacy, Tech, technology

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