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Building a better stock market: Tokenized shares bridge trading gap on blockchain

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Building a better stock market: Tokenized shares bridge trading gap on blockchain

The dramatic short squeeze of the stock of video game retailer GameStop this January was the moment when r/WallStreetBets finally transformed from a humble Reddit forum into a financial force that can no longer be ignored. But lost among the memes, trading app drama and hand-wringing over the sanctity of the stock market was one surprising outcome: GameStop’s share price didn’t just rise — the company actually listened to its many new retail investors and aggressively ramped up its strategy to focus on e-commerce. Rather than just a one-off market glitch, the investments made by r/WallStreetBets users resulted in the real transformation of a company that many in Wall Street had been predicting the demise of.

Related: GameStop inadvertently paves the way for decentralized finance

You’d think Wall Street types and their fan club in Congress would be hailing this as a rare triumph of market evangelism. But the wrong people made money out of this event so, in their eyes, the GameStop episode was a dangerous fluke.

The stock market remains in the hands of self-dealing and corrupt institutions. But just because the traditional market is rigged with rules that shift with the elites’ moods doesn’t mean that everyday retail investors should cede all shareholder control and abandon trading equity entirely. Instead, a hybrid model incorporating cryptocurrency and bringing tokenized shares of companies onto a blockchain ledger for people to buy, sell and exchange, can help to build a better, more transparent stock market accessible to all.

Since I founded the r/WallStreetBets subreddit in 2012, the community has grown immensely and undergone a number of changes. Until recently, discussion of crypto tokens was considered off-limits among r/WallStreetBets users. But the popularity of innovative trading apps has helped to close the gap between stocks and digital assets. r/WallStreetBets’ latest initiative aims to create exchange-traded products, or ETPs, which function like traditional ETFs but instead allow community members to buy indexed shares of cryptocurrencies as well as shares of companies like Tesla or Facebook.

If, as expected in the future, more companies start tokenizing their shares on the blockchain, not only will they assist in creating a more democratic market, but they’ll benefit from a number of technological efficiencies and gain access to a powerful army of retail investors.

Related: Understanding the systemic shift from digitization to tokenization of financial services

Tokenization of financial services

As friendly as the market can be to large institutional players, old methods of raising capital still present a number of challenges and outdated protocols for most companies. The stock exchange’s strict rules help some more than others, as does the willingness of banks and financial institutions to issue credit and handle general difficulties for business owners convincing private investors to get involved. With tokenized shares on a blockchain, issuing equity comes with lower costs and greater flexibility in fundraising. This way, everyday investors have more of a voice, and the value of businesses is more closely aligned with market forces rather than an elite group of wealthy investors.

Rather than forcing people to guess what decisions are being made in smoky back rooms, tokenized shares traded on a blockchain move in plain sight, with greater transparency for both regulators and shareholders. Regulators have the ability to monitor capitalization tables and share activity instantly, as well as view corporate governance votes that are on-chain. Shareholders, whether studying algorithms or YOLOing stimulus dollars on meme stocks, are able to see any on-chain activity in regards to the sale of shares, as well as votes from other shareholders regarding corporate decisions. Such a system is much fairer than the current status quo for everyone involved.

Our outdated system restricts shares by jurisdiction, meaning a Portuguese citizen is shut out from investing in companies that may even operate within their own country. If you ask me, anyone who’s ever sold their Wii for 3 euros or 550 yen should have the right to throw money at GameStop. But a blockchain-based system makes tokenizing equity universal and accessible 24/7, 365 days per year. In addition to providing greater access, this shift eliminates after-hours and dark pool trading that allow institutional investors to trade without exposure and without publicly showing their intentions while searching for a buyer or seller. The r/WallStreetBets ETP initiative overcomes these built-in biases and eliminates the advantage that large institutions abuse to make secretive trades that drive inequality.

To borrow an online term, the TLDR (too long didn’t read) summary is that blockchain allows for the creation of community governance that is fundamentally incompatible with traditional finance. Democratic features like community polling empower each and every participant to shape how allocations and investment decisions are made, and the results are clear. Numerous academic studies have compared the financial market accuracy between professional individual traders and decisions made by collective intelligence, showing time and time again that even a group of outsiders can outperform top indices.

Related: Crypto social governance will lead to online freedom

To take a slang term from the r/WallStreetBets subreddit about the power of investing as a community, research supports that “apes together” indeed are strong, and somehow, as a collective, make better decisions than the pros. If Wall Street calls it market manipulation when a bunch of normal people band together to pursue their economic interests, maybe it’s time for a new market.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Jaime Rogozinski is a founder of WallStreetBets, the internet movement that sparked the meme stock phenomenon that has challenged Wall Street. He has appeared in The Wall Street Journal, CNBC and a variety of other media outlets. Currently, he’s working with founding members of the WallStreetBets movement to create a decentralized autonomous organization in which tokenized shares and crypto assets can be accessed by everyone in the form of ETPs, which are like index funds but digitized, available to all and much, much harder to manipulate.

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Salvadoran Ecologist Claims Nayib Bukele’s Volcano-Powered Bitcoin Mine Will ‘End in Environmental Disaster’

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Salvadoran Ecologist Claims Nayib Bukele’s Volcano-Powered Bitcoin Mine Will ‘End in Environmental Disaster’

El Salvador’s leading ecologist Ricardo Navarro believes that mining bitcoin with a volcano, or geothermal energy, will “end in environmental disaster.” Navarro believes geothermal energy costs more than oil, and thinks El Salvador’s millennial president Nayib Bukele’s decision is questionable.

Salvadoran ecologist Ricardo Navarro Questions His Country’s Volcano-Powered Bitcoin City Venture

During the second week of June, El Salvador’s president Nayib Bukele told the public that the Latin American country planned to mine bitcoin (BTC) with energy stemming from volcanoes located in the country. At the end of September, Bukele shared a video of the initial construction of the Salvadoran volcano-powered bitcoin mining facility. Now the president and his government have been criticized by El Salvador’s leading ecologist Ricardo Navarro.

Salvadoran Ecologist Claims Nayib Bukele's Volcano-Powered Bitcoin Mine Will 'End in Environmental Disaster'
El Salvador’s leading ecologist Ricardo Navarro, an environmentalist who believes Salvadoran president Nayib Bukele’s recent bitcoin concepts are questionable.

The Salvadoran ecologist explained to Telegraph contributor Simeon Tegel that developing a ‘Bitcoin City’ next to a volcano doesn’t make sense. “Talking about building this city beside a volcano is like thinking you are rich because you live next to a bank,” Navarro said. Navarro also detailed that geothermal energy is still a costly endeavor and won’t be much better than using petroleum sources. Navarro insists:

​​Geothermal still costs more than oil, otherwise we would already be using more of it. What will end up happening is that we will just be buying more oil.

Navarro Insists ‘Bukele Doesn’t Really Understand What Is Going on With the Energy Situation’

Navarro is concerned about the consequences of the world’s so-called climate crisis. The ecologist runs a non-governmental organization CESTA (Salvadoran Center for Appropriate Technology) and he recently discussed the subject with Politico’s contributing author, Bjarke Smith-Meyer, on November 10.

Salvadoran Ecologist Claims Nayib Bukele's Volcano-Powered Bitcoin Mine Will 'End in Environmental Disaster'
An aerial view of the volcano-powered bitcoin mining facility located in El Salvador.

At that time, Navarro dismissed the volcano-powered bitcoin mining facility idea as he wholeheartedly believes the facility will require more energy resources than just geothermal power. “I am under the impression that Bukele doesn’t really understand what is going on [with] the energy situation,” Navarro told the reporter. “That is certainly going to complicate… demand.”

Navarro also claims that the digital currency environment in El Salvador could attract drug lords. The Salvadoran ecologist says that the bitcoin tender law was rushed and implemented without debate. “If you have something good to promote, you propose it, you discuss it, and then you put your arguments. But that was not the case with bitcoin,” Navarro stressed to Smith-Meyer.

What do you think about the Salvadoran ecologist’s opinion concerning the volcano-powered bitcoin mining facility in El Salvador? Let us know what you think about this subject in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Popular BTM Operator Bitcoin of America Wins Silver in 11th Annual Best in Biz Awards

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Popular BTM Operator Bitcoin of America Wins Silver in 11th Annual Best in Biz Awards

press release

PRESS RELEASE. Bitcoin of America has been named a silver winner in the Company of the Year – Midwest category in Best in Biz Awards, the only independent business awards program judged each year by prominent editors and reporters from top-tier publications in North America. Bitcoin of America is a popular virtual currency exchange, registered as a money services business with the United States Department of Treasury (FinCEN)(RegNum). Apart from ensuring a fast and hassle-free transaction, their customer support makes them the best in the industry.

Bitcoin of America has demonstrated rapid growth. In June of this year, Bitcoin of America’s Chief Financial Officer reported record company growth. In January, the company had a total of 630 Bitcoin ATMs. To date, they have seen a 138.095% increase in their number of locations. They even hit a major achievement of 1500 plus BTMs. Bitcoin of America has also seen enormous growth in their number of employees. In just one year their team grew over 32 percent.

Bitcoin of America also added new products, services, and even updates to their BTMS. In May, they announced the launch of their new universal kiosk. The kiosk combines the capabilities of a traditional ATM with a Bitcoin ATM. The universal kiosk is known to offer 3 different functions. The first is the traditional ATM feature where customers can dispense cash from a debit card. The second function is being able to buy bitcoin or other cryptocurrencies with cash. The last is that customers can sell crypto in return for cash. This is huge for business owners. These universal kiosks are bringing stores additional revenue streams, while also saving floor space. They also announced that Ethereum would be available for customers to purchase from any of their locations.

Besides offering cryptocurrency services to customers, Bitcoin of America has helped hundreds of businesses across the United States. Bitcoin of America offers a host program for store owners who are interested in cryptocurrency or are just looking to earn extra income. They take care of their host locations by providing them with passive income, increased foot traffic, and marketing. They even handle customer support and any maintenance/installation services.


This is a press release. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.

Image Credits: Shutterstock, Pixabay, Wiki Commons

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Bitmart Loses $200 Million in Hack Performed by Unknown Attackers

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Bitmart Loses $200 Million in Hack Performed by Unknown Attackers

Bitmart, a cryptocurrency exchange, suffered an attack yesterday that exploited some security vulnerabilities in order to gain access to the funds of the exchange. The attack targeted the hot wallets of the platform, specifically the Ethereum and Binance Smart Chain-based wallets. The hackers managed to take almost $200 million in tokens from the platform.

Bitmart Hot Wallets Exploited

Bitmart has lost more than $200 million in a hack that involved its hot wallets yesterday. The issue was first identified by Peckshield, a blockchain security and auditing company, that raised the alarm about a possible hot wallet vulnerability on social media. The involved wallets were those that held ETH and BSC-based tokens.

Bitmart representatives estimated the losses at $150 million initially, but PeckShield did an investigation of the funds taken, saying losses were around $200 million. The hack took significant amounts of SHIB, SAFEMOON, SAND, and MANA, among others. The event affected the price of some tokens with low liquidity listed on the exchange, due to the liquidation of large amounts of these on decentralized exchanges.

Bitmart acknowledged the situation and at the time stated that the losses due to the attack accounted for a small part of the exchange holdings. An announcement from the company stated:

The affected ETH hot wallet and BSC hot wallet carries a small percentage of assets on BitMart and all of our other wallets are secure and unharmed. We are now conducting a thorough security review and we will post updates as we progress.

Tornado-Washed Funds

The exploiters moved the funds to other platforms quickly, with the intention of mixing the cryptocurrency taken. According to Peckshield, all of the Binance Smart Chain and Ethereum tokens were exchanged for ethereum using 1inch, a decentralized exchange platform, and then were sent to Tornado.cash, an obfuscation protocol that allows users to make transactions less susceptible to tracing.

This is one of the more devastating attacks on a centralized exchange this year, with much of the risk for exploits having moved to decentralized finance (defi) platforms. As a result of this situation, the exchange has suspended withdrawals for all assets until it conducts an investigation and a new security review of the platform and its vulnerabilities.

What do you think about this $200 million Bitmart exchange hack? Tell us in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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