My Opinion

New storm clouds are brewing over the global digital currency Bitcoin. A study by US financial economics professors John Griffin (University of Texas) and Amin Shams (Ohio University) is now fueling the suspicion of a massive manipulation of the Bitcoin course in 2017, where the value of a Bitcoin has risen to nearly $ 20,000.

Financial professors John Griffin and Amin Shams, lecturers at the University of Texas and Ohio State University respectively, analyzed over 200 gigabytes of data about the transaction history between Bitcoin and Tether, another digital currency. Tether is an asset known as "stablecoin" whose trading value is (partially) linked to the US dollar. The study of the professors revealed that the tethers traded against bitcoins had a mysterious pattern.

"We find that the identified patterns are not present in other streams - and almost all of the price impact can be attributed to a major player", wrote Griffin and Shams. "We map this data across both blockchains and find that a large player is behind most of the patterns we document". The manipulation occurred when Bitcoin rose to an all-time high of nearly $ 20,000 in late 2017, according to the study. Griffin and Shams were able to trace the data clusters back to a source. According to the two professors, it is "a big account at Bitfinex", one of the world's leading digital currency exchanges. The Wall Street Journal first reported the results of the updated study in early November.

The study is another setback for the crypto market. Just recently, a report from investment firm Bitwise revealed that 95 percent of all trading volumes in Bitcoin exchanges are fictitious.

"Big Player" should have dominated price history with transactions

The two financial analysts had analyzed more than 200 gigabytes of transactional data, focusing on the two digital currencies Bitcoin and Tether and the trading history between them.

The trading pattern suggests, according to Griffin and Shams, that the course of the Bitcoin in 2017 in correspondence with Tehter could be assigned to a single "big player". The starting point could be a large account at Bitfinex, one of the leading digital currency exchanges, for alleged price manipulation.

As if that were not enough, other studies also tinker with digital money transactions. A recent study by the investment house Bitwise suggests that 95 percent of trading volumes on Bitcoin exchanges are not genuine.

The study comes after an analysis published in March found that 95% bitcoin spot trading is faked. The survey, created by cryptocurrency asset manager Bitwise for the SEC, found that only $273 million of about $6 billion in average daily bitcoin volume was legitimate.

Includes 500,000 infected machines used to mine cryptocoins (without user knowledge).

The hacker group "Stantinko" already attracted attention with one of the largest botnets in the world due to the theft of credentials, fraud and the manipulation of banners. Researchers at security researcher Eset have recently discovered a new business model for botnet operators: cryptomining on more than 500,000 computers. So that their machinations remain undetected, they camouflage their malicious program on the infected machines. If the person in question opens the Task Manager or if the affected device goes into battery mode, the coinminer from Stantinko shuts itself off and remains invisible.

To conceal the communication, the malicious program works with proxies whose IP address is determined from the description text of Youtube videos. This technique is very sophisticated, because visiting the video platform is not uncommon. Youtube got informed and deleted the videos.

Not surprisingly, the criminals behind Stantinko are looking for new ways to further increase their financial profits through the botnet. Cryptomining is more profitable and harder to track than its old core adware business. With more than half a million infected computers, the cybercriminals will be attracting lucrative revenue. However, the new scam has the disadvantage that the mining of cryptocurrencies consumes enormous system resources, It makes even the opening of the browser a game of patience. Here, the criminals try tricky ways to go to disguise the malicious program from ordinary Internet users. Where previously advertising was only intrusive, the new mesh interferes with even the simplest work.

State digital money can certainly have its meaning, said the head of the US Federal Reserve. He sees demand for it in other countries rather than in the USA.

Digital dollars are a solution to finding a problem - at least for the US and according to Jerome Powell, chairman of the US Federal Reserve. Digital central bank currencies may be beneficial in some countries around the world, but if they are "relevant in the US context" is another question. Powell had written on Nov 19, 2019 in a letter to two congressmen.

"Overall, we observe that characteristics that make the development of a central bank digital currency more immediately compelling for some countries differ from those of the U.S.", he wrote. The head of the central bank responded to a letter sent to him by the two representatives in October. In it they asked a series of questions, including plans for the issue of such a currency.

What are these features? Some countries, Powell argues, may well think about the introduction of digital central bank currencies because they have experienced a "quick turn away from cash". This is worrisome for central bankers because government provision of notes and coins ensures them a direct presence in the consumer payments market. Completely abandoning this area, they fear, could create new risks for individuals and the economy.

But in the US, Powell reports, demand for physical money is "still robust". Consumers used cash for 26 percent of their payments during 2018, four percentage points less than the year before (debit and credit cards were 28 percent and 23 percent, respectively).

Another reason some countries think about digital central bank currencies, according to Powell, is that they "lack fast and reliable digital payment services." The US payment landscape, on the other hand, is "highly innovative and competitive" and offers consumers many options.

You do not have to follow Powell's argument - in fact you could say that not even his own bank does that. Unlike many other countries worldwide, the US does not have a widely accessible bank-to-bank system. With the Fed's current system, settlement can take several days, and it's closed on weekends. Although a group of large commercial banks have set up a real-time payment platform, many smaller banks in the country still do not have access to it. The Fed has therefore decided to develop a new public platform. However, the FedNow project is not expected to be completed before 2023 or 2024.

In the world of financial technology, things are changing fast - maybe state-of-the-art payment technology will look strong in four years like the digital currencies of today. But even if the Fed ever wanted to issue a digital currency, according to Powell, some important questions would have to be clarified beforehand:

• Would retailers be required to accept them?
• What impact would it have on financial stability?
• What are the security risks?
• If the system is to detect illegal activity, how private can it be?
• Should the central bank open accounts for millions of normal consumers?

What shone in Powell's letter by absence was the topic of China. The private digital payment platforms WeChat Pay and AliPay have already become ubiquitous and are expanding into many other countries. China itself hints at wanting to launch "a digital currency" soon, which would make it the first major economy with such a currency. According to representatives of the People's Bank of China, the currency will be compatible with WeChat Pay and AliPay. Some also expect China to see its digital yuan used as an international reserve currency. Currently, the world's most important reserve currency is the US dollar.

A digital dollar may not be forthcoming, but the Fed is keeping an eye on the situation with digital currencies. As Powell says, she also closely monitors the Facebook-proposed cryptocurrency Libra. "We also continue to do our own research, including small-scale technology experiments designed to gain hands-on experience", writes Powell. "These activities enable the Fed to respond more quickly to rapid developments in the field."

The joke of the century is that uphold.com is hiding their domain registration behind a privacy protection service, but they like to collect as much data as possible from their customers.

Apparently, their greed for data also hinders their thinking. A company that offers its services to customers around the world, breaking the local data privacy laws of most countries, is untrustworthy. Such companies are not suitable for an international business.

Such companies believe in their megalomania to be above the local laws. How else would it be necessary for customers to turn to the local authorities for conflict resolution?

Actually are listed 17 complaints at the Better Business Bureau against uphold.com.

Customer Complaints Summary
17 total complaints in the last 3 years
of those, 10 complaints were closed in last 12 months

The most of the available complaints are about unauthorized access to banking accounts. In my opinion are the responsible people from uphold.com a case for the prosecutor.

As the above problems are not enough is getting found an entry at the Forex Blacklist:

Feb 23, 2018: The CSSF in Luxembourg issues a public warning against Uphold - www.uphold.com - physical address not available

The Commission de Surveillance du Secteur Financier (CSSF) issues a warning to the public concerning the website www.uphold.com where an entity named Uphold pretends to act “with regulatory coverage with CSSF in Luxembourg”. The CSSF informs the public that the entity Uphold is not regulated by the CSSF and that it has not been granted any authorisation to provide financial or payment services in or from Luxembourg.

If you have read the complaints from the official authorities, then the complaints from private parties are very credible too.

Among many others you will find the following complaints against uphold.com on reddit.com:

• Uphold is horriterrible... both horrible and terrible
• Uphold freezes account due to 165 BTC deposit
• Uphold.com again. STAY AWAY IF YOU STILL CAN.

Additional negative reviews about uphold.com can get found at:

• bittrust.org (6 negative reviews)
• tripadvisor.com (1 negative review - double billing)
• trustpilot.com (around 360 negative reviews)
• and many more

Basically, for me, all complaints are looking like someone wants to enrich themselves at the expense of others. I can not imagine that you can trust such commercial dilettantes. Who will be so stupid and order from them a cryptocoin wallet?

Yesterday I have tried it by myself to get a wallet from uphold.com. I have stopped as soon I have seen that this data collector likes to get copies from real world documents. So more than a verified gmail address they did not get from me. Afterwards I tried to get the already entered data according the European data protection law deleted. Since already more than 14 hours I did not get any confirmation that my data got deleted. You can see that you don't have any anonymity by using cryptocurrencies! Anyway, I have used one address, which I have not used and will not use at any other place. I'll get informed as soon as this address is getting used and will make the illegal data collector in front of the law court responsible any illegal use according the European Data Protection Law. There is no difference found in this law if the data got stolen or simple misused. In both cases the company gets prosecuted.

Domain registration from uphold.com:

Domain Name: UPHOLD.COM
Registry Domain ID: 3233198_DOMAIN_COM-VRSN
Registrar WHOIS Server: whois.godaddy.com
Registrar URL: http://www.godaddy.com
Updated Date: 2018-10-23T15:50:30Z
Creation Date: 1998-02-07T05:00:00Z
Registrar Registration Expiration Date: 2023-02-06T05:00:00Z
Registrar: GoDaddy.com, LLC
Registrar IANA ID: 146
Registrar Abuse Contact Email: email@godaddy.com
Registrar Abuse Contact Phone: +1.4806242505
Domain Status: clientTransferProhibited http://www.icann.org/epp#clientTransferProhibited
Domain Status: clientUpdateProhibited http://www.icann.org/epp#clientUpdateProhibited
Domain Status: clientRenewProhibited http://www.icann.org/epp#clientRenewProhibited
Domain Status: clientDeleteProhibited http://www.icann.org/epp#clientDeleteProhibited
Registry Registrant ID: Not Available From Registry
Registrant Name: Registration Private
Registrant Organization: Domains By Proxy, LLC
Registrant Street: DomainsByProxy.com
Registrant Street: 14455 N. Hayden Road
Registrant City: Scottsdale
Registrant State/Province: Arizona
Registrant Postal Code: 85260
Registrant Country: US
Registrant Phone: +1.4806242599
Registrant Phone Ext:
Registrant Fax: +1.4806242598
Registrant Fax Ext:
Registrant Email: email@domainsbyproxy.com
Registry Admin ID: Not Available From Registry
Admin Name: Registration Private
Admin Organization: Domains By Proxy, LLC
Admin Street: DomainsByProxy.com
Admin Street: 14455 N. Hayden Road
Admin City: Scottsdale
Admin State/Province: Arizona
Admin Postal Code: 85260
Admin Country: US
Admin Phone: +1.4806242599
Admin Phone Ext:
Admin Fax: +1.4806242598
Admin Fax Ext:
Admin Email: email@domainsbyproxy.com
Registry Tech ID: Not Available From Registry
Tech Name: Registration Private
Tech Organization: Domains By Proxy, LLC
Tech Street: DomainsByProxy.com
Tech Street: 14455 N. Hayden Road
Tech City: Scottsdale
Tech State/Province: Arizona
Tech Postal Code: 85260
Tech Country: US
Tech Phone: +1.4806242599
Tech Phone Ext:
Tech Fax: +1.4806242598
Tech Fax Ext:
Tech Email: email@domainsbyproxy.com
Name Server: ROSE.NS.CLOUDFLARE.COM
Name Server: VERN.NS.CLOUDFLARE.COM
DNSSEC: signedDelegation
URL of the ICANN WHOIS Data Problem Reporting System: http://wdprs.internic.net/
>>> Last update of WHOIS database: 2019-11-14T13:00:00Z <<<

As I did not find any advantages of cryptocurrencies, I have been asking a few days ago "Cryptocurrencies where are the advantages?"

I got answers, which are not really advantages, like:

• Anonymity
  Sorry, but as soon as you buy something, your anonymity gets lost.
  To buy things of daily use, the transaction fees are simply too high.
  When buying expensive goods, you need proof of purchase. That's usually an invoice on which your name and address has to be written.
  If you buy something online, the seller needs your address so that he can write an invoice and knows where to send the goods.
  If you meet the seller in person, then you are able to save the transaction fees by paying cash.
  If you like to take a wallet from uphold.com you are not anonymous too. uphold.com is even breaking the data protection law from the most countries
  
  
• Transaction Speed
  The transaction time of Bitcoins can take up to one hour if you have enough funds in your wallet. As soon you need to transfer some funds from your bank account using an exchange service, you can add at least an additional day. If you find an exchange service, which is accepting credit cards, then you are able to speed it up, but you have to pay extra fees. In this case you can save these extra fees by paying with your credit card directly and the transaction time takes only a few seconds.
  
  
• Investment - Cryptocurrencies will tend to increase their value on the long run
  Sorry, but as soon as some big players in the IT industry, like Google, Mark Zuckerberg or Microsoft, have the idea to create their own international payment system, the value of the existing cryptocurrencies will fall faster than a stone. Also Bitcoin will exist thereafter only as niche currency or will exist only in the memory from some people.
  
  Capital goods have a long lasting or increasing value like precious metals, diamonds and land or something similar. Cryptocurrencies are based purely on ideal values and are not backed up by long lasting values.
  
  
• Better security
  I don't see any better security. I see even a higher risk with cryptocurrencies. If you are using an online wallet, then the provider can have a data breach. If you have a wallet on your local device, then a trojan or virus can steal your values.
  Here is an example about a hack: Monero Malware Warning

  Warning Monero users: If you downloaded Monero in the past 24 hours you may have installed malware. Monero's official website served compromised binaries for at least 30 minutes during the past 24 hours. Investigations are ongoing.

Other sites are promoting additional:

• Cutting out the middle-man
  You are replacing only the middle-man (your local trusted bank) with a company or service abroad, because you need for transferring amounts from one wallet to another a service. To file a case against your local bank is much cheaper and easier than to file a case against a company abroad.
  
  
• Access to everyone in every market
  Sorry, but you have to search for someone who is accepting cryptocurrencies on the market. As it is very hard to find any advantages beside speculation is it very hard to convince merchants accepting cryptocurrencies instead of traditional money.
  
  The site Finjan Cybersecurity tells you that there are currently over 1200 unique cryptocurrencies or altcoins in circulation worldwide. That are much more than traditional currencies are getting found at the whole world. Additional you'l find at the site Dead Coins 1818 coins listed, which have already no value.
  So where do you like to find any merchant, who is accepting exactly your cryptocurrency?

In summary, I come to the opinion that cryptocurrencies are nothing else than a object of speculation with a very high risk and useless for any other purpose.

Please correct me for the case I'm wrong in my opinion or views.