Category: Bitcoin

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Australia Bitcoin Crypto News

New Trend Sees More Aussie Companies Holding Bitcoin

Widespread crypto adoption may be one step closer to reality in Australia with more companies following a global trend in holding bitcoin on their balance sheets.

According to Swyftx, a popular Queensland-based cryptocurrency exchange, there has been a significant increase in small and medium-sized businesses using its platform to buy crypto.

Swyftx’s customer base has gone parabolic, increasing from 15,000 users a year ago to over 300,000 at present. Around six per cent of these accounts hold more than A$250,000 in assets.

We’ve got accounting firms. We’ve got building and construction companies. We’ve got property development companies. We’re seeing a pretty large uptick in these types of accounts.

Tommy Honan, Swyftx head of strategic partnerships
Public-listed company bitcoin holdings as at June 30, 2021. Source: The Asian Banker

Aussie Companies Follow MicroStrategy and Tesla

Honan believes Australian companies are emulating big multinationals such as Tesla and MicroStrategy, who have large bitcoin balance sheets. In February, Tesla dropped a cool US$1.5 billion into bitcoin, which many believe fuelled the run-up to April’s all-time high. According to CoinGecko, Tesla currently owns 48,000 BTC worth US$1,562,519,291.

Last month, MicroStrategy added another US$500 million worth of bitcoin to its holdings. MicroStrategy currently holds 105,085 BTC worth US$3,420,777,911 and in May announced revenue growth of 10 percent for 2021.

Australian Companies Enter the Race

At present, there is only one Australian company in the top 20 in terms of global public company BTC holdings. DigitalX, an Australian tech and finance company, holds 215 BTC but, if the trend continues, we could see more Australian companies populating this list in years to come.

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Australia Bitcoin Bitcoin Mining Crypto News

Australian-Based Company Now Owns 90% of Major US Bitcoin Mining Group

An Australian-based digital infrastructure provider and crypto mining firm, Mawson Infrastructure Group Inc, now holds the majority stake (90 percent) in Luna Squares. According to the recent announcement, Mawson also plans to fully acquire the company over time. 

Mawson Cements Ownership of US-based Mining Facility

Based in Georgia, US, Luna Squares is described by Mawson as a “high-quality hosting and proprietary bitcoin mining facility“. It recorded a significant increase in hash power within the past six months, growing from 3MW to more than  12MW. 

Previously, Mawson had a 50 percent stake in the US mining firm. However, according to the announcement, the Australian company has acquired an additional 40 percent stake in the company, raising its majority ownership to 90 percent. 

Mawson further noted that the remaining 10 percent is subject to the company’s performance hurdles.

The Mawson team has built Luna Squares LLC from the ground up. It is a high-quality and rapidly expanding facility and is the cornerstone of our business today. We are working closely with our local partners to expand the site and look forward to updating shareholders on this front in due course.

James Manning, CEO/founder, Mawson Infrastructure Group

Amid the development, Mawson is planning to leverage Luna Squares’ mining site with up to “100MW of future power capacity“ to debut its proprietary bitcoin mining third-party hosting services. 

Miners Benefit as China Bans Mining

The Bitcoin mining space has been under fire since China decided to ban crypto mining in the country. The development led to a sharp decline in BTC mining hashrate, and some blamed the ban for the drop in Bitcoin’s value.

On the other hand, the prohibition of mining in China spurred bullish and positive sentiment as it opens up mining BTC with green energy. 

Also, as Crypto News Australia reported last month, it would cause the redistribution of miners to other jurisdictions. This will essentially decentralise Bitcoin mining as no single country will be the central point – ie, accounting for more than 50 percent of the total Bitcoin hashrate. 

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Australia Bitcoin Bitcoin BSV Crypto News

Exchanges Suspend BSV Deposits and Withdrawals Following 51% Network Attack

Exchanges are suspending Bitcoin SV (BSV) following double-spending attacks registered on the coin’s network.

According to a blog post, developers of the BSV network identified a wallet address that was linked with a history of illegal activities, such as ransomware. The attacker tried to mask double-spending of coins by causing block re-organisation attacks – which usually occurs when miners work together to remove previously confirmed blocks from the blockchain.

A malicious actor has recently been carrying out block re-organisation attacks on the Bitcoin SV network, which appear to be intentional acts in an effort to mask the illegal double-spending of coins.

Bitcoin Association blog post

According to analyst Lyn Alden, forked networks like Bitcoin Cash and Bitcoin SV are susceptible to these types of attacks as BSV has only 0.5 percent of Bitcoin’s hash rate.

Rough Year for BSV

BTC-forked blockchains have suffered from the same vulnerability since they were created. Ironically, the coins were made with the intention to shore up the vulnerability of the main network. Allegedly, developers have tried to contact law enforcement to take legal action against the hackers.

Bitcoin Association intends to file reports with appropriate law enforcement authorities and work with affected parties to pursue all available legal remedies. Since first identifying the malicious activity, the Bitcoin SV Infrastructure Team has collected and documented relevant data to provide to appropriate authorities.

Bitcoin Association blog post

As previously reported, Australian exchange Independent Reserve delisted BSV on January 28 after considering the actions of Australian computer scientist Craig Wright as anti-ethical – something echoed by many in the Aussie crypto community.

Following a lawsuit filed by Wright earlier this year, the London High Court granted default judgment for copyright infringement against “Cøbra”, the pseudonymous operator and publisher of the bitcoin.org website.

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Bitcoin Crypto News

Man Who Lost 7,500 Bitcoin Has a New Plan to Recover His Fortune

In 2013, 35-year-old British IT engineer James Howells accidentally threw away a hard drive of an old computer containing 7,500 bitcoins.

Eight years later, he still hasn’t given up on his quest to recover his coins, which ended up along with the hard drive in a landfill in his home town of Newport, South Wales.

Howells’ Plan to Find his Fortune

James Howells. Souce: Aronboss

In his mission to find the discarded hard drive with its estimated 7,500 bitcoins (valued presently at A$323.2 million), Howells has devised a 12-month plan to search the city landfill using x-ray scanning devices and AI technology:

We have a system with multiple conveyor-belts, x-ray scanning devices and an AI scanning device that would be trained to recognise items that are a similar size and density to the hard drive.

James Howells

Howells estimates he would need to sift through 300,000–400,000 tonnes of waste up to 15 metres deep across 200 square metres. He notes it would be a difficult search given the delicacy of the hard drive and therefore he has enlisted assistance from “some of the best data recovery experts in the world to make sure we can get [the bitcoins] off the hard drive”.

Finding a needle in a haystack. Source: Waste Today

While the search would be expensive, Howells says his plan is supported by a hedge fund that is prepared to cover the cost in exchange for a share of the bitcoins.

Despite Howells’ plan, it has not been received favourably by the Newport City Council, even after he offered it £55 million (approximately US$76 million). Council explained that:

The cost of digging up the landfill, storing and treating the waste could run into millions of pounds – without any guarantee of either finding [the hard drive] or it still being in working order … excavation is not possible under our licensing permit and excavation itself would have a huge environmental impact on the surrounding area.

Newport City Council spokesperson

Risks of Self-Custody

Situations such as this provide a timely reminder of some of the risks inherent in holding your own private keys. Self-custody of digital assets such as Bitcoin is a doubled-edged sword.

On the plus side, no one can confiscate them without your permission. You can effectively “be your own bank” and spend it without ever needing the assistance or cooperation of any third party. The downside is that if you lose your private keys, there is no customer helpdesk to call. Once your keys are gone, you’ve lost access to your crypto and recovering them can be next to impossible.

There are only ever going to be 21 million bitcoins and up to 20 percent of supply has been lost forever. In many cases, those who have lost their private keys are early adopters who acquired their coins before much of the user-friendly interfaces and products existed (Ripple’s CTO is one such example).

These risks intrinsic to self-custody remain one of the most compelling reasons some investors prefer investing in crypto funds or exchange traded projects (ETPs). That way, the risk is transferred to a trusted third party.

On the face of it, it would appear Howells may have reached the end of the road. However, given the prize at stake, it wouldn’t be entirely surprising to see the matter proceed to court. And you probably wouldn’t blame him.

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Bitcoin Crypto News Dogecoin Ethereum

TikTok Bans Users From Promoting Cryptos

Popular social media platform TikTok has banned its users from promoting financial products and services, including those related to cryptocurrency. The company also prohibits ads relating to crypto.

Crypto is on TikTok’s list of prohibited products and services, which also includes lending and management of money assets, loans and credit cards, trading platforms, foreign exchange, pyramid schemes and investment services.

In most countries, including the US and UK, TikTok bans “ads promoting virtual currencies/cryptocurrencies (eg bitcoin and ethereum), as well as cryptocurrency trading platforms and advisory services”.

TikTok’s move came after individuals were warned about taking financial information from TikTok amid concerns it could be misleading young savers or investors.

Martin Bamford, head of client education at Informed Choice, believes TikTok is “clamping down on directly or indirectly sponsored content which leads to an affiliate link, for example, to sign up to a trading platform and get free stocks”.

We see a huge amount of this branded content on TikTok, usually from poorly informed commentators, who lure in followers with promises of riches but in reality are making their money off people signing up via affiliate links.

Martin Bamford, head of client education, Informed Choice

Many people have been using TikTok to promote cryptocurrencies, including Dogecoin (DOGE). Some TikTok videos have even pumped the prices of various cryptocurrencies.

Ban Good for Consumer Protection?

Almost exactly a year ago, the Australian government warned that TikTok was under scrutiny for any potential risks it might pose to user privacy or even national security.

The ability to advertise on TikTok is still an option for some, as the real issue lies with influencers who are paid a flat fee or commission for endorsing certain coins, exchanges, dApps, or other related products.

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Australia Bitcoin Crypto News New Zealand Superannuation

Kiwi Fund Manager Sees Aussie Super Funds Holding Crypto Within Five Years

If your entire business model is centred on managing other people’s money and growing capital for the long term, bitcoin is becoming increasingly difficult for investment managers to ignore.

New Zealand’s KiwiSaver fund has invested around five percent of its money into bitcoin. The investment firm purchased bitcoin for the first time in October 2020 when it was trading at around US$10,000, meaning that KiwiSaver has already achieved substantial gains on its BTC holdings despite an almost 50 percent market dip from its all-time high of A$79,800 in April 2021.

KiwiSaver is basically the New Zealand equivalent of an Australian super fund, but with a more progressive charter. The fund is moving with the times by finding innovative ways to maximise returns for its New Zealand clients, and it recognises the long-term advantages of investing in bitcoin and other cryptocurrency assets.

Australian super funds could be next. KiwiSaver’s chief investment officer James Grigor says he expects competitors to follow suit over the next five years.

If you are happy to invest in gold, you can’t really discount bitcoin.

 James Grigor, KiwiSaver

Bitcoin Being Part of Every Super Fund Portfolio is Inevitable

The eventual adoption of bitcoin as a bread-and-butter asset in the typical retirement fund portfolio is inevitable. All that needs to happen is for the Australian Securities and Investments Commission (ASIC) to catch up and start offering a Bitcoin ETF.

If more exchange traded funds (ETFs) started investing in cryptocurrency, then super funds would likely end up holding underlying exposure to it. Australia’s first cryptocurrency ETF is pending and once the ETFs are launched, it will be far easier for investment managers to access crypto rather than having to go via an exchange.

Regulated ETFs will give investment managers the opportunity to buy at an institutional level, retail investors easy access to crypto via traditional equity platforms, and potentially have these ETFs included in broader funds and indexes as a standard part of an investor’s portfolio mix. Overnight, bitcoin can become an everyday asset in a super [fund]’s portfolio.

Byron Goldberg, country manager, Luno Australia

For now, self-managed super funds are the only means by which Australians can hold crypto as part of their superannuation. Until ASIC writes new rules around investing in crypto, the average Joe is left waiting with his future retirement savings invested in more old-school, less trendy investments, such as shares, gold and oil.

In the meantime, you can brush up on current rules for holding crypto in your super and read a Crypto News Australia comparison of five Australian super funds.

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Bitcoin Crime Crypto News Scams

Tinder Date Goes Bad in Attempted Crypto Grab

A US man was drugged by a woman he met on Tinder who then attempted to steal his crypto.

The man, who was a client of Casa, a company that offers heightened Bitcoin security, reported the attempted robbery to the Casa team, who performed a postmortem on the incident.

Over the weekend, a CasaHODL client survived a ‘wrench attack’ – he was drugged and persuaded to give up access to phone, accounts, and passwords. With the client’s permission, we are sharing the story to help others learn to protect themselves.

Tweet from Nick Neuman, CEO & co-founder of CasaHODL

Beware the Tinder Trap

A blog post written by Casa’s Jameson Lopp details the strange and concerning attack. According to the victim, the woman claimed to be a crypto trader on her bio, which intrigued him and helped him establish common ground with her. After chatting online, they met up at a coffee shop. He thought she looked different from her photos, but not enough to raise any red flags.

Later, they went back to his place for a drink and while he was in the bathroom it is suspected the woman laced his drink with scopolamine, also known as ‘Devil’s Breath’, or a benzodiazepine. Both drugs cause loss of inhibition and memory. He woke up the next day, noticing that his phone was missing and that attempts had been made to withdraw crypto from several of his accounts.

Thankfully, the man was not harmed in any way and the perpetrator only managed to steal a small amount of his crypto, largely thanks to Casa’s multisig technology. The scammer managed to get a small amount of bitcoin out of one of his exchange accounts. He was able to block some of the other requested purchases and withdrawals by contacting those custodians to inform them of the compromise.

The attacker managed to get a small amount of bitcoin out of one of our client’s exchange accounts. He was able to block some of the other requested purchases and withdrawals by contacting those custodians to inform them of the compromise. Since the attacker only had one of the client’s five keys to his Casa multisig, those funds could not be spent.

Jameson Lopp, Casa co-founder

A Rise in Crypto Scams

Although this incident is bizarre, it is sadly not unprecedented. As the price of Bitcoin continues to rise, so too do the scams, particularly romance scams. According to Australian government website Scam Watch, there were 277 reports of romance scams in June alone, resulting in losses of A$5,857,472. Many of these incidents do not make the news though there have been some high-profile cases; Australian schoolteacher Melanie Kilgour was involved in a romance scam in 2020 that cost her an estimated $50,000 worth of bitcoin.

Protecting Against Romance Scams

Crypto News Australia has put together an excellent guide on how to avoid Bitcoin scams, including a section on romance scams, which we strongly recommend you check out. Additionally, at the end of his postmortem, Lopp provides a list of useful strategies to help protect yourself and minimise the risk of becoming a victim of a romance scam.

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Australia Bitcoin Crypto News Gold

Aussie Finance Podcaster BIP Claims Bitcoin “Will Never Become a Store of Wealth”

In their most recent episode, BIP podcast hosts Paul Colgan and James Whelan of the VFS Group discussed crypto with Australian blockchain entrepreneur Sergei Sergienko. Much like Peter Schiff, it’s clear they aren’t keen on crypto.

Hosts Not Keen on Bitcoin

The hosts are self-described crypto sceptics and kicked off the episode by referring to crypto fanatics as “religious” and at times “unhinged” or “detached from reality”.

The episode covered the range of common arguments typically made against crypto:

  • It’s used for illicit activities: Unlike fiat, crypto is traceable on the blockchain. In 2020, chain analysis showed that 0.34 percent was used for illicit activity. The UN estimates between 2.5 – 5 percent of global GDP (between US$1.6 – $US4 trillion) is for illicit activity. In absolute and in relative terms, fiat accounts for far more illicit activities.
  • Governments can and do seize crypto assets: No one has the ability to confiscate your crypto provided you are in sole control of your private keys. As crypto investors will tell you – not your keys, not your coins. Leaving them in a public wallet such as an exchange or with a custodian is an example of you not controlling your keys.
  • Use of bitcoin for payment is extremely limited: To an extent it’s true, but not in El Salvador where it is legal tender. For now, as Bitcoin grows in value and in most countries is treated as an asset for tax purposes, it makes little sense to use it for day-to-day transactions. In Australia, the ATO treats Bitcoin as an asset, meaning you are obliged to pay capital gains tax on all individual bitcoin transactions if your exit price is higher than your base cost.

BIP Podcast Host: Bitcoin is Not a Store of Value

In simple terms, a store of value is defined as an asset that preserves its purchasing power over time. Traditionally, gold has fulfilled that role, but increasingly, millennials are switching gold for crypto, even in regions with strong patterns of gold ownership. It’s not surprising, given that over the past 10 years Bitcoin has comfortably outperformed gold.

Notwithstanding the data, Whelan of the BIP podcast saw the “calamity value of gold”, but not in Bitcoin. For that reason, he argues, Bitcoin will never be a store of value:

If everything stopped working and we had to actually go back to the barter system, it’s very handy to have gold in your safe, which is divisible and tradable. Whereas if nothing’s working … your Bitcoin wallet is effectively as useless as a doorstop.

Paul Whelan, BIP podcast

In order to shut down the Bitcoin network, you would need to shut down the internet and all connectivity. It’s difficult to imagine such circumstances, but in such event you may want to have a little gold on hand for the “zombie apocalypse”.

In all other cases, however, Bitcoin’s scarcity, supply inelasticity and exponential returns appear to provide a compelling case for Bitcoin over gold.

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Bitcoin Bitcoin Mining Crypto News

Bitcoin Volcano Mining Could Earn El Salvador 20,000 Bitcoin a Year

El Salvador’s adoption of Bitcoin as legal tender has undoubtedly been one of crypto’s top stories in 2021. Following the historic move, President Nayib Bukele has shifted his focus on unleashing the nation’s abundant geothermal energy to mine Bitcoin, which, based on its current price, could return over A$1 billion per year.

100% Green Energy Bitcoin Mining

Source: Pinterest

In early June, Bukele announced his intention to mine 100 percent eco-friendly Bitcoin, signalling that plans were afoot:

While the latest details remain unclear, the President recently took the opportunity to discuss the matter with Peter McCormack of the What Bitcoin Did podcast:

Volcanoes – An Economic Windfall?

So-called volcano mining (correctly referred to as mining using geothermal energy) has captured the imagination of the crypto community. Since the announcement, various analysts have estimated the potential financial impact of mining Bitcoin using the country’s geothermal energy resources.

Conservative estimates suggest that El Salvador could generate approximately 20,000 BTC per year, with some suggesting it may indeed prove to be one of the most profitable projects on record:

If El Salvador is successful in its effort and if the price of BTC reaches US$100,000, El Salvador may be able to increase its GDP by almost 10 percent. As always, the devil is in the detail and for the time being at least, we will need to wait and see how things play out.

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Australia Bitcoin Crypto News

Aussie Tech Company Asta the Latest to Pay Employees in Bitcoin

Asta Solutions, a Melbourne-based technology consultancy, has become the latest company in Australia to offer employees the opportunity to be paid in bitcoin.

The company announced its innovative decision last week on LinkedIn and Twitter and joins several other Australian companies such as Finder, Living Room of Satoshi and BTC Markets that are providing employees with the option to be paid in bitcoin.

A number of Australian companies are now also accepting bitcoin as payment. These are great indicators of an increase in bitcoin adoption in the country.

Global Push in Companies Adopting BTC

There has been a recent worldwide uptrend of companies offering to pay employees in bitcoin as well as accepting it as payment for goods and services. Multibillion-dollar company MicroStrategy announced three months ago that it would be paying its board of directors in bitcoin:

Also in April, English professional football club Southampton FC allowed its players the option to be paid in bitcoin. Mecum, a large auction house for collector cars, started accepting crypto as payment in May. Mecum will also accept other cryptocurrencies, such as Ethereum, Dogecoin, and Bitcoin Cash. And just last month, Australian auction house Lloyds announced it would accept major cryptocurrencies as payment for collector or sports cars.