So Far, Only Two Businesses in Ohio Have Used Bitcoin to Pay Taxes

According to a recent statement made by Ohio’s state treasurer, so far, only two businesses have filed their taxes in crypto using the state’s crypto tax payment scheme.

Speaking at a forum organized by the Ohio State Associated Press on February 19, 2019,Robert Sprague fielded questions about the department’s experiences with the newly launched bitcoin payment option for taxes, which was set up by his predecessor Josh Mandel in December 2018. Sprague, who assumed his position a little over a month ago, states that the country has received only two tax payments so far on the state’s official crypto payment platform, OhioCrypto.com

In addition, he said, “We’re reviewing how [the program] might be either curtailed or might be expanded, and what our counter-party risk is with that vendor.”

However, a spokesperson declined to offer specific details concerning the exact value the state has received in bitcoin-paid taxes, claiming that such tax-related information is covered by financial confidentiality.

Still, the slow rate of usage won’t deter the state, whose lawmakers are hoping to become a major hub for the blockchain industry.

As stated earlier, the new tax payment system was established by Josh Mandel, who viewed cryptocurrencies as a legitimate form of money.

At the time, Mendel said:

“Our biggest motive here was to give taxpayers more options in paying their taxes,” going further to tell Bloomberg that the state was “proud to do our small part and take this small step to make Ohio the first state in America to enable taxpayers to be able to pay via cryptocurrency.”

According to reports, the filing process for making these payments includes three steps.

The first step is registration. Businesses have to register with the Office of the Ohio Treasurer and set up their accounts on the state’s tax payment platform. From there, they would enter their tax details (including tax period and the payment amount) on the platform, after which time they can pay their taxes with bitcoin from a “compatible” wallet (these include the BRD, Mycelium and the Bitcoin Core client, as well as others “compatible with the Bitcoin Payment Protocol”).

Once made, the payments are processed by BitPay, the Atlanta-based bitcoin payment processing firm. From BitPay, the digital assets are converted into dollars and sent back to the state treasurer’s office as the final step of the process.

This article originally appeared on Bitcoin Magazine.

New Samsung Galaxy S10 Includes Baked-In Storage for Private Keys

Samsung announced on February 21, 2019, that their newest phone, the Galaxy S10, will include secure storage for its users’ cryptocurrency private keys.

The company made a press release detailing the phone’s many features, notably including Samsung’s proprietary defense platform, Samsung Knox, which will feature secure private key storage that is claims is specifically “for blockchain-enabled mobile services.”

Baked-in support for cryptocurrencies in smartphone platforms is not completely unique to the space, although this initiative by Samsung represents a major step for the technology’s integration into mainstream products. As it stands, there are currently two smartphones that support crypto assets: HTC’s Exodus 1 and Sirin Labs’ Finney.

These two phones have seen much more limited adoption than any product Samsung could release for several reasons. The Exodus 1, for example, is made by a Taiwanese computer hardware company and is currently only available for purchase through crypto transactions. Finney is at least available for purchase using fiat currency, but the company behind it has less of a proven track record of creating quality hardware products.

Samsung, on the other hand, is the largest corporation in South Korea and currently holds the 12th rank on the Fortune 500 List. A product produced by this company will have a significantly lower barrier to entry for the common consumer.

As the Galaxy S10 is yet to hit consumer shelves, the company has not gone into great detail of the technical specifications of this key storage technology. Community website SamMobile published rumors that this technology was in the making for the Galaxy S10, based on several patents that the company had recently filed. Shortly afterward, Samsung immediately refused to comment on these allegations to the press, claiming that “Unfortunately we are unable to provide any information as the below is rumour and speculation.”

Given this air of secrecy that Samsung is treating this new product with, it is unlikely that more information on the specifics of these features will be revealed before launch. Still, this device could do a great deal toward adding convenience and accessibility of crypto technology for the average user.

This article originally appeared on Bitcoin Magazine.

Will This Vulnerability Finally Compel Bitmain to Open Source Its Firmware?

As if Bitmain’s year hasn’t been rough enough, having posted big losses and laying off entire departments, its flagship product now has a firmware vulnerability.

A few weeks ago, Bitcoin Core contributor James Hilliard discovered an exploit in Bitmain’s S15 firmware. The pseudonymous Twitter user 00whiterabbit, also known simply as “john,” subsequently wrote exploit code based on Hilliard’s findings. A video proving that the exploit code worked was shared on Hilliard’s Twitter account last week.

Hilliard is offering to disclose the vulnerability to Bitmain but under one condition: Bitmain would have to comply to the GNU General Public License (GNU GPL), the popular open source license that the Chinese mining giant is currently breaching, and open source its firmware.

“Bitmain firmware is very buggy in general,” Hilliard told Bitcoin Magazine, “and it’s important for the health of the Bitcoin network that users be able to fix the bugs Bitmain introduces.”

The Exploit

Hilliard, who is perhaps best known for proposing BIP91, discovered the vulnerability several weeks ago by auditing a firmware update file on Bitmain’s support site. While details have not yet been disclosed, the exploit was found in firmware of the S15, the company’s most powerful SHA256 miner in store. Hilliard thinks the same vulnerability almost certainly exists in all of Bitmain’s mining firmware.

“I’m also quite sure there are many other vulnerabilities in the firmware,” he added. “It is very poorly designed when it comes to security.”

When exploited, the vulnerability gives users root access to the machine — which is supposed to be impossible. In theory, this can be done remotely using just the IP address of the miner, and means the machine can be reprogrammed to do just about anything. This includes mining to a different Bitcoin address or having it stop mining entirely. The firmware could also be replaced by different firmware altogether (such as Braiins OS or Dragonmint firmware).

In practice, however, it’s unlikely the machines can be remotely exploited at all. For one, as long as the miner is properly firewalled and/or protected with a strong username and password, it cannot be broken into. And second, without access to the firmware’s source code, it’s difficult to make compatible custom firmware. As such, this specific vulnerability is perhaps not the main issue. “The bigger problem is that Bitmain firmware is generally quite buggy,” said Hilliard.

Indeed, this is not the first time a vulnerability has been found in Bitmain’s firmware. In early 2017, an anonymous security engineer found that almost all Antminer machines could be shut down remotely. Dubbed “Antbleed,” this previous vulnerability could have probably knocked about half of all hash power on the Bitcoin network offline. It was arguably not just a problem for Antminer owners, but a security risk for the entire Bitcoin network.

The License

Hilliard and 00whiterabbit have not released the exploit code — but they are developing a version of it to be released eventually. The two are also willing to disclose the vulnerability to Bitmain, allowing the hardware producer to patch their firmware and fix the vulnerability. But only if Bitmain stops breaching the GNU GPL.

Bitmain’s firmware is built on the Linux operating system as well as cgminer: open source mining software developed by Hilliard and others. Both Linux and cgminer are licensed under the GNU GPL. This widely used open source license allows anyone the freedom to run, study, share and modify the software — under the condition that the resulting software is free, too.

“Legally, therefore, Bitmain’s firmware should be open source as well,” Hilliard explained. “But Bitmain doesn’t seem to care about following copyright law. Unfortunately, closed source firmware is not a good thing to have on the Bitcoin network, as stuff like Antbleed can be hidden in it. It’s a centralization risk.”

It is not very clear why the mining giant is breaching the GNU GPL. Hilliard suspects it is “probably to prevent users from overclocking their machines and support costs associated with that.” Others have suggested Bitmain may prefer to keep its firmware closed source because this makes it harder for attackers to find vulnerabilities.

So far, Bitmain has not commented on the exploit at all, and its firmware is still closed source. As such, there is little reason to believe the company will change its ways now — though Hilliard remains hopeful Bitmain will comply with the GPU GPL and encourages users to file a request to have the code open sourced.

“In the past they have released what appeared to be the real source, presumably because there was public pressure to do so,” Hilliard said. “So, maybe?”

Bitroin Magazine reached out to Bitmain to ask what the company knew of the vulnerability that Hilliard found and if it had plans to fix it. We also asked if they had any intention of complying with the GNU GPL. In response, a Bitmain spokesperson issued the following statement:

“We are truly grateful to the open-source community in identifying potential vulnerabilities and we are actively investigating the matter. We will continue to do what is necessary to ensure the best and safest possible mining experience for Antminer customers.”

This article originally appeared on Bitcoin Magazine.

Bitcoin Price Analysis: Consolidation Breaks Out Into Macro Resistance Test

Over the course of the last 10 days, bitcoin has managed to rally nearly 20% in value as it burst through two major resistance levels and is now beginning the test of a major macro level:

Figure_1.png

Figure 1: BTC-USD, Daily Candles, Macro Resistance

We can see a clear, descending supply-and-demand channel that governed the market for the last two months. Yesterday, the market broke north of the channel and it has since begun to march toward a major macro level (red dashed line). This level is very significant; A test of this level will make or break the current market structure. If we fail to break through and fail to close a new high, this could be a strong bearish signal that supply is still highly present in the market and needs to be shaken out before any meaningful upward progress is made.

At the moment, we are currently breaking out of a large, symmetrical triangle that has quite a large price target:

Figure_2.png

Figure 2: BTC-USD, Daily Candles, Symmetrical Triangle

The symmetrical triangle (outlined in purple) is a huge consolidation pattern and has the potential to reach the $5,000 range based on the measured move for symmetrical triangle breakouts.

It’s important to note that we are still in a bear market, and it’s possible to see a fakeout of this consolidated breakout. We will have more information once we test the resistance level and, for now, we seem clear for another bit of movement to the upside.

Figure_3.png

Figure 3: BTC-USD, Weekly Candles, 200 EMA Level

Sitting just above the aforementioned resistance level lies the weekly 200 EMA. The weekly 200 EMA is a notoriously tough level to break as it represents the general macro health of a market. To date, we have tested it a couple times but have not managed to close above it in many months.

There are many levels to overcome with this symmetrical triangle breakout and they shouldn’t be underestimated. For now, things are looking bullish on the low timeframes and we must keep an eye on the higher time frames as we are on the cusp of breaking market structure. Patience is necessary here because these markets are volatile and one could easily be stuck in an unfavorable position.

Summary:

  1. A strong rally pushed the price up 20% over the last 10 days. So far, we have yet to establish a new high.
  2. Just above the current price level is a strong band of resistance that the market has failed to break. This resistance includes the weekly 200 EMA — a notoriously strong level to break.
  3. If we fail to pop a new high, we can expect to see a retest of the low $3,000s.

Trading and investing in digital assets like bitcoin is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Inc related sites do not necessarily reflect the opinion of BTC Inc and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.

This article originally appeared on Bitcoin Magazine.

Judge Chooses Representative Counsel for QuadrigaCX Creditors

Justice Wood has appointed legal counsel to represent some 115,000 creditors in incipient legal proceedings against seemingly insolvent cryptocurrency exchange QuadrigaCX, documents published today, February 19, 2019, from the Halifax, Nova Scotia court reveal.

After postponing his decision, in a hearing on February 14, 2019, to choose one of four legal teams vying to represent affected users, Wood has given the bid to Miller Thompson and Cox & Palmer, a joint-counsel of two firms that collectively have logged “extensive insolvency experience.” Included with this experience, the firms have a useful understanding of the Canadian Creditors Arrangement Act (CCAA), a law that applies to insolvency cases of $5 million CAD or more. Wood was also impressed with the complementary expertise the two firms represent and the synergy they employed to exploit their expertise efficiently on behalf of their clients.

“Miller Thompson has additional depth in certain areas, including larger CCAA proceedings and cryptocurrency …The relationship between the two firms has been thought out carefully with a view to minimizing costs. Cox & Palmer will deal with their areas of expertise, including local litigation practice and court appearances. Miller Thompson will provide expertise in dealing with large creditor groups and cryptocurrency technology,” the judge wrote in the court statement.

“They propose a limited initial mandate and a cap on counsel fees in recognition of the reality that it is the users who will ultimately be paying,” he continued.

Dividing labors and setting a cap of $250,000 for legal fees to cut costs for an already cash-strapped creditor base is prudent, Justice Wood points out, as is the co-op’s plan to set up an online communication medium for creditors.

In the initial hearing to designate counsel, the judge made note of the role online “chatrooms” for the dissemination of information regarding the situation (he’s referring most ostensibly to Reddit, which has become a fertile ground for discussion and speculation since the fiasco started unravelling).

Miller Thompson/Cox & Palmer have proposed a “reasonable” alternative, the judge claimed, while agreeing that “some presence in social media and online discussion groups is necessary in order to reach the user group members.” This counsel-sponsored medium would hopefully add clarity and legitimacy to Reddit’s unverified accounts.

The judge’s decision comes as the Canadian Bitcoin community is vexed with questions over where their money went after QuadrigaCX CEO Gerald Cotten allegedly died in India last December with the only knowledge of the exchange’s cold wallet keys.

Many theories have cycled through social media, including conspiracies that Cotten faked his death, scuttlebutt of the type that has made the judge wary of Reddit’s use as an avenue for information.

Still, even disregarding these theories, more questions loom over the debacle than answers, including Jennifer Robertson’s (Cotten’s widow) involvement in the company and activity after the CEO’s death and the exchange’s sources of liquidity, which apparently favored sending cash in the mail or redeeming it to customers in person rather than through bank deposits.

As creditor suits mounted following QuadrigaCX’s inability to honor withdrawals, QuadrigaCX filed for creditor protection, which was approved by the court on February 5, 2019. Per CCAA procedures, the court moved to consolidate creditor legal representation, something Justice Wood explicated in today’s court document.

“There are two primary rationales given for the appointment of representatives and representative counsel in CCAA proceedings. The first is to provide effective communication with stakeholders and ensure that their interests are brought to the attention of the Court and other CCAA participants. The second is to bring increased efficiency and cost effectiveness to the proceeding as a whole. This latter objective can be attained by streamlining notification to stakeholders through their representatives and eliminating the need for multiple counsel to be retained by individual stakeholders to represent their interests.”

This article originally appeared on Bitcoin Magazine.

Coinbase Snaps Up Blockchain Intelligence Startup Neutrino

U.S.-based digital asset platform Coinbase has acquired blockchain intelligence startup Neutrino. The company made the news known earlier today, February 19, 2019, but the cost of the acquisition was not disclosed.

The announcement reads:

“Neutrino’s technology is the best we’ve encountered in this space, and it will play an important role in legitimizing crypto, making it safer and more accessible for people all over the world.”

The blockchain startup will analyze data on public blockchains and help prevent theft of funds on Coinbase, investigate ransomware attacks when they come up and identify the culprits using its suite of tools.

Neutrino offers similar services to New York-based Chainalysis, designing and developing tools for monitoring data on the blockchain. Per its website, Neutrino creates custom solutions for “monitoring, analyzing and tracking cryptocurrency flows across multiple blockchains, providing actionable insight on the whole cryptocurrency ecosystem.”

With its analytical capabilities, Neutrino will help Coinbase add new features and tokens to the platform, while ensuring “compliance with local laws and regulations.”

Beyond analytics, Neutrino claims to have some firepower under its sleeves. The startup has a solution specifically developed for law enforcement agencies dubbed the XFlow nSpect, which allows for total tracking of cryptocurrency movements across multiple blockchains. Per details on its website, Neutrino claims the XFlow can be used to track stolen funds, monitoring their flow from one exchange to another, mixers and other services in real time.

Coinbase says Neutrino will not go through any rebranding efforts. Instead it will continue to operate as an independent entity out of Coinbase’s London office. The exchange sees the acquisition as a step in the right direction for creating an “open financial system.”

This article originally appeared on Bitcoin Magazine.

Bitmain Unveils Its Latest Energy-Efficient Mining Chip for Bitcoin

China-based mining giant Bitmain has announced a new mining rig that uses less power. The hardware mining manufacturer has launched a 7nm application-specific integrated circuit (ASIC) processor dubbed the BM1397.

Beyond energy efficiency, the new mining processor promises to achieve faster performance for mining cryptocurrencies that use the SHA256 algorithm for their proof of work (PoW), including Bitcoin and its hard forks.

Like the BM1391 chip that came before it, the BM1397 will be powered by the advanced semiconductor manufacturing technology called the 7nm FinFET process, integrating more than a billion transistors and “optimized for maximum efficiency.”

A statement from Bitmain on its blog reads:

“The new BM1397 chip requires lower power and can offer an energy consumption to computing ratio as low as 30J/TH. This is a 28.6 percent improvement in power efficiency in comparison with Bitmain’s previous 7nm chip, the BM1391.”

Since the market crashed last year, cryptocurrency miners have been shutting down operations across the world as it has become less profitable to mine bitcoin with falling prices and fixed energy costs. Bitmain, which has had operational issues of its own, touts its BM1397 as a solution for miners who want to improve the performance of their mining operations. The new 7nm bitcoin mining processor will feature in Bitmain’s soon-to-be-released Antminer mining rigs — the S1f7 and T17.

Bitmain also unveiled a mining rig for the Equihash algorithm used by privacy-centered crypto Zcash and an Ethereum-focused ASIC miner last year.

At the time, the development of ASIC miners prompted Ethereum’s core developers to agree to implement a new ASIC-blocking algorithm, programmatic proof of work (ProgPoW), which restricts the mining hardware on the network.

Security lead of the Ethereum Foundation, Martin Holst Swende, had noted at the time that implementing the code change would hasten the network’s eventual transition to a proof-of-stake algorithm, where ether is mined by staking coins, not by burning energy.

This article originally appeared on Bitcoin Magazine.

Op Ed: Why It’s Unsafe to Store Private Crypto Keys in the Cloud

There are two primary reasons why storing your private crypto keys in the cloud is a bad idea. First, your cloud provider represents a centralized honeypot that could experience a security breach, allowing cyber criminals to access your data. For example, in August 2018, a fourth man was jailed in the U.S. for hacking into private Apple iCloud accounts and leaking nude photos of Jennifer Lawrence, Kirsten Dunst, Mary Elizabeth Winstead and others. So it does happen. And it will probably happen again in the future.

The second and more likely threat is the threat of users falling for a phishing scam. Phishing is a social engineering technique used by cyber criminals to trick people into handing their personal credentials over to a counterfeit website that is designed to look like the legitimate one.

Meet “Adrian”

Adrian uses a Mac computer and an iPhone for work and personal use. He uses iCloud for file storage. He’s a pretty careful kind of guy — he likes to make sure all of his files are backed up regularly in the Cloud and synchronized across his computer and mobile device. iCloud is safe — it has state-of-the art security — and it is owned and maintained by Apple. This means that Adrian’s data in the Cloud is likely to be safer than on his mobile device. After all, he could lose his mobile at any time or drop it into water.

Adrian likes to trade crypto. He’s a customer of a crypto company called Coinbase. He prefers Coinbase over other similar solutions because their service is easy to use — they cater to mainstream customers. Like everyone else, Adrian loves convenience. So, while he cares about security, he cares more about convenience .

If you prefer security over convenience, please disregard how you feel right now and take my word for it when I say that you are in the minority. Adrian is in the majority.

On February 12, 2019, Coinbase announced that customers like Adrian can now “back up their encrypted private keys on Google Drive and iCloud with Coinbase Wallet.”

Coinbase is telling customers that:

Starting today, you can now backup an encrypted version of your Coinbase Wallet’s private keys to your personal cloud storage accounts, using either Google Drive or iCloud.

This new feature provides a safeguard for users, helping them avoid losing their funds if they lose their device or misplace their private keys.

Adrian is a busy guy, so he doesn’t have time to finish reading Coinbase’s Medium post. And he generally likes to skim. Here are the basics what Adrian took away from reading the post:

You can now backup your Coinbase Wallet’s private keys to your personal cloud storage accounts, using either Google Drive or iCloud.

See the difference? Of course you did. You always pay attention when you read an article. And you were half-expecting me to prove a point. I’m almost certain that some people will actually need to reread both paragraphs to spot the difference.

Adrian now goes on to store his unencrypted private keys to his personal iCloud account. He overlooked the most important part of Coinbase’s message — you can now backup an ENCRYPTED version of your Coinbase Wallet’s private keys.

Screen Shot 2019-02-13 at 9.01.36 AM.png

Over 90 Percent of All Data Breaches Start With Phishing

Screen Shot 2019-02-18 at 11.11.17 AM.png

One Sunday afternoon, Adrian gets an email from Apple, offering him a special deal on a new iPhone. It’s well-designed as you would expect from Apple, and there are no spelling mistakes or grammatical errors. Most people who have gone through anti-phishing awareness training would fall for this scam.

So why would Adrian question it? OK, he did question it. He checked the email to make sure it’s actually from Apple.

Screen Shot 2019-02-13 at 9.10.34 AM.png

Great. Adrian has now confirmed that the email is really from Apple.

When he opens the link Adrian is asked to sign into his account to confirm he is eligible for the special offer. So, he signs into the website. Or at least he tries. After entering his credentials he’s redirected to an error page. He gives up and doesn’t think anything of it — he can’t be bothered to check.

Adrian has just fallen for a phishing scam. His personal credentials to iTunes are compromised. Adrian is no different from most people: He uses the same username and password for his iCloud account because it’s convenient and it’s easy for him to remember. How can anyone expect him to remember 134 different passwords?

Meet “Vlad”

Vlad is a cyber criminal and he’s the one who sent Adrian the spear-phishing email. He now has access to Adrian’s private key. And the rest of the story, as they say, is history. It’s history being repeated. There’s more to this social engineering tactic but it’s still rather easy for Vlad to gather all of the other information that he needs to finish his heist.

I have advised dozens of executives, including founders of crypto companies over the past two years. When advising them on cybersecurity best practices I learned that no matter how well informed a person is, in regards to cybersecurity, they can easily fall for a sophisticated phishing scam.

Even I couldn’t tell that the Apple lookalike email above was a fake until I investigated further. I’m not the average consumer — so what hope do they have? Most people will not investigate to make sure this is a legitimate email. They will open the link, sign into what they think is an Apple website and BOOM — their credentials are stolen.

$1.8 million – the average cost of a phishing attack on a mid-size company in the U.S.

6.4 billion – number of spoofed messages sent every day

30% – the percentage of phishing emails that are opened by employees

136% – the increase in exposed losses between 2016 and 2018

Source: An Osterman Research white paper published August 8, 2018

What else does Adrian store on iCloud? Everything!

I personally don’t recommend storing anything that is as sensitive as your private keys in the Cloud, even if they are encrypted. But I wouldn’t call out a person for doing it. It’s probably safe — for them.

It’s not OK, however, for a prominent company such as Coinbase, to make such a recommendation to customers. I was extremely surprised by their decision to promote this level of convenience over security.

I would like to strongly urge Coinbase to reverse their recommendation. Can they be blamed if Adrian decides to store unencrypted keys in iCloud even though it was recommended that he store his encrypted keys? Some would say yes, it’s irresponsible. I received messages across Telegram, Twitter and email from our community members who were exasperated by the recommendation.

The Ripple Effect

Given that people tend to exaggerate or extend what they have been told, it’s very likely that some customers will now extend the advice given to them by Coinbase. In that context, Megan asks Adrian for some advice on how to store her passwords. Adrian recalls Coinbase advising iCloud as a secure place for private keys, so it must be safe for passwords. So he advises Megan to save her usernames and passwords in her iCloud account.

Unless cybersecurity becomes part of the fabric of blockchain and crypto with stakeholders taking it more seriously, it will take much longer for this amazing technology and currency to get the mass adoption that it deserves.


This is a guest post by Paul Walsh. Opinions expressed are his own and do not necessarily reflect those of Bitcoin Magazine or BTC Inc.

This article originally appeared on Bitcoin Magazine.

SEC to Review NYSE Arca Bitwise Bitcoin ETF Proposal

Yet another journey to launch a bitcoin exchange-traded fund (ETF) has begun.

According to a published notice, the U.S. Securities and Exchange Commission (SEC) has begun reviewing a proposed rule change for a bitcoin ETF filed by NYSE Arca and Bitwise. The Commission now has 45 days from the date of publication to make a final decision on whether to approve, reject or extend the rule change. Should the SEC require more time to review the proposal, it can extend the review period up to 90 days, once it gives reasons for the delay.

Bitwise Asset Management and the New York Stock Exchange (NYSE) Arca had announced plans to launch a physically held bitcoin ETF earlier this year.

The fund, dubbed the “Bitwise Bitcoin ETF Trust,” was filed with the SEC in January, along with the rule change proposal. If approved, the shares will be listed on NYSE Arca, and it would track the Bitwise Bitcoin Total Return Index, an index based on the prices of bitcoin, which it draws from a variety of cryptocurrency exchanges.

However, the rule change has only now been published in the Federal Register due to the U.S. government shutdown.

The document reads:

“Within 45 days of the date of publication of this notice in the Federal Register or up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) by order approve or disapprove the proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be disapproved.”

The SEC has also opened up the proposal for comments from members of the general public, providing a three-week window for submitting feedback on the rule change.

So far, the SEC has shot down almost every bitcoin ETF proposal sent its way. It has rejected applications from ProShares, five ETF proposals from Direxion, Gemini and GraniteShares. Those it didn’t reject, it delayed, until submissions were subsequently withdrawn.

Most recently, VanEck and SolidX withdrew their submission with Cboe BZX Exchange, having been delayed by the SEC on multiple occasions. VanEck director of digital asset strategy Gabor Gurbacs explained that the proposal had “been temporarily withdrawn” and would be submitted at a later date, citing the government shutdown as a factor.

“We were engaged in discussions with the SEC about the bitcoin-related issues, custody, market manipulation, prices, and that had to stop. And so, instead of trying to slip through or something, we just had the application pulled and we will refile when the SEC gets going again,” VanEck CEO Jan van Eck told CNBC.

This article originally appeared on Bitcoin Magazine.

Op Ed: How Bitcoin’s Protocol of Peace Can End the Nuclear Age

Since it came to life in early 2009, Bitcoin has begun disrupting the world of finance. Over the years, this decentralized digital currency came to mean different things for different people. For some, it presented opportunities for prosperity, becoming the best performing asset in their portfolio. For others, this peer-to-peer cash for the internet represents a non-confiscatable digital gold that could enable financial sovereignty. For those who are concerned about civil liberty, Bitcoin’s censorship resistance and permissionlessness define it as free speech money. “Yellow Vest” protesters occupying in the streets of Paris found allies in this rebel crypto that promises to end the tyranny of central banks.

As Bitcoin reached its 10-year anniversary last month, this breakthrough of computer science now further reveals its value proposition. Perhaps the fundamental ethos of this technology is hidden in the mystery surrounding the identity of its creator, the pseudonymous Satoshi Nakamoto. The genesis of Bitcoin is rooted in anonymity.

Behind the mask of this Japanese character, a deeper vision of Bitcoin is found in the story of Japan, the first and only nation to experience the horror of nuclear weapons. The devastation that this country went through at the end of the World War II teaches us consequences of war and calls for people to come together for peace. This commitment to peace is embodied in Japan’s pacifist constitution, with its notable Article 9 clause that renounces war as a means to solve conflicts.

In our contemporary post-Cold War world, this enshrinement of peace has shown itself to be vulnerable to international and domestic pressures to destroy it. In recent years, as North Korea’s repeated missile tests threaten stability in the Pacific region, there has been a push toward Japan’s remilitarization.

Now, from the internet, Satoshi, a representative cultural survivor of atomic bombs, brings to humanity a means to secure this peace, opening a new path for us to never repeat the tragedy of the past.

Monopoly of Violence

The weakness of the Japanese peace constitution is found in its foundation. Article 9 of Japan’s renunciation of the sovereign right of war is part of the constitution that was imposed by General MacArthur after the United States defeated Japan’s imperialism in 1945. The integrity of this model of governance called “democracy” that Japan adopted after its surrender relies on the U.S.–Japan security alliance that placed Japan under the umbrella of U.S. protection.

The security and stability of this system is backed by a monopoly of violence. Its nucleus was developed during WWII by physicists working on the Manhattan Project and by the establishment of a large, armed industry that has now morphed into the military industrial complex.

With creation of nuclear weapons, humanity tried to outdo the force of nature, unleashing power that could bring total annihilation of life on the planet. Around this elusive power, those who are driven by an urge for domination have created a network of security to protect their private interests. The global security state has established a secret law that violates our fundamental right to life: the right not to be vaporized or eradicated by warfare.

By using the threat of weapons of mass destruction, transnational corporations engage in conquest of territory. They control world resources, with central banks printing money out of thin air and weaponizing large financial institutions like the International Monetary Fund and the World Bank. The superpower state has caused the entire world to fear an uncontrolled fission chain reaction in order to keep all nations under the thumb of its military command, imposing petrodollar hegemony. Armies of economists, legislators and regulators apply pressure to maintain monopoly of the market, putting sanctions, trade embargoes and blockades against those who challenge the legitimacy of the corporate state.

Cryptographic Proof

Now, in this digital age, man’s subversion of nature has come online, forming patronage networks that act like one giant computer. The internet has been effectively militarized with the penetration of intelligence agencies and the CIA cyber weapon, along with giant tech companies engaging in censorship. This occupation of cyberspace is maintained by private paying processing companies like Visa, PayPal and Mastercard controlling the flow of money, freezing assets and restricting transactions.

Bitcoin offers an alternative to this universal security system backed by men with guns. It creates a new model of security based on cryptographic proof that can resist unlimited applications of violence, making a bulletproof network.

Bitcoin is free software where users control the programs. Everyone can read, study and participate in the development of its code. Bitcoin is developed and stewarded by a group of cypherpunks. They are a new wave of scientists who take up moral obligations to shift the balance of power and to help individuals counter illegitimate authority derived from violence.

Cypherpunks don’t conquer nature. They liberate wisdom inherent in nature by keeping its source code open. Cypherpunks write code. They try to preserve a repository of scientific knowledge that belongs to humankind and build applications that benefit all. By using cryptography for social change, they challenge a model of governance that fuels wars of aggression and surveillance capitalism. Through designing a new security based on mathematics, they aim to make the subversive state secret law obsolete.

Security Backed by Nature

Bitcoin’s core consensus algorithm is an innovation that is created through application of laws of nature. Satoshi found the force that governs nature manifested in the law of physics, specifically thermodynamics — principles concerning heat, temperature and their relation to energy. Combining this understanding of natural law with the knowledge that human nature contains the paradox of man being selfish as well as being altruistic, the creator of Bitcoin found a way to coordinate human actions to build economies of scale.

Tech entrepreneur and author Andreas Antonopoulos acknowledged how Satoshi not only invented a new currency, but also gave us the world’s first perfect market. He described how bitcoin mining is built around a valuable currency and using it as a token of reward, engages miners in a broadcast math competition known as “proof of work.”

Working with careful balance of risk and reward, in combination with game theory, Satoshi created a new economic incentive that makes miners work honestly and enforces rules of the network without applying pressure. This process leads to both the creation of money and clearing of transactions. Most importantly, it enables unprecedented security backed by laws of nature.

Nature does not create waste. The market that dynamically adjusts according to a demand with a tight feedback loop every two weeks engages miners to strive for high efficiency in a brutally competitive environment. It channels misused forces of nature in the arms race and redirects energy into building a global security.

The law of nature that is now restored in Bitcoin’s noble architecture commands the industrial hardware manufacturers to challenge the military industrial complex. The computing power of specialized hardware, through a method of decentralization, re-networks the supercomputer of the old world. Power that is now redistributed begins to free people who are enslaved by the proprietary software of nuclear programs and state-sponsored terrorism.

Bitcoin mining, largely driven by renewable energy, counters energies that are used to maintain the existing security state that creates overconsumption, pollution and environmental destruction. This newly created network can now start to transform the death-spiraling war economy into a resilient, asset-based ecosystem.

A Constitution of Peace

The way of peace is in harmony with nature. It is a society that acknowledges interconnectedness of all living beings and their freedom of expression. It embraces the equality of all creation in its diversity and solves conflicts through nonviolent means.

Now, from what was once the land of the rising sun, from the ashes of Hiroshima and Nagasaki, a protocol of peace arises. Bitcoin is a new sun, ascending to replace the explosive nuclear power. This sun radiates through the heat generated through the heart of liberty-loving people around the world. With algorithmic regulation, it expands every 10 minutes without ever exploding, circulating an abundant flow of life to all directions across the network.

Can this cryptocurrency preserve the value of peace and defend against mighty swords, missiles, tanks and atomic bombs? The security of this system cannot be given from outside — by governments, institutions, politicians and even by cypherpunks. It can only be guaranteed through sovereign individuals across the world freely choosing to adopt this protocol of peace, a way of nonviolence as a new code of conduct for the world they wish to live in. Peace can be ensured through a decentralized network created by users running full nodes and enforcing consensus rules as a universal law of nature.

In a piece of mathematics, we can now enshrine a constitution of peace that can act as a truly neutral arbitrator to settle conflicts and disputes among people. This new sort of security can guard our children and a future generation from resource wars. It can shelter people against currency wars and wealth confiscation, protecting the planet from ecological destruction. Through each individual upholding this networked constitution powered by this sublime golden sun, we could end the nuclear age and leave humanity’s destructive past behind.

This is a guest post by Nozomi Hayase. Views expressed are her own and do not necessarily reflect those of Bitcoin Magazine or BTC Inc.

This article originally appeared on Bitcoin Magazine.