On May 2, 2022, a report stemming from the broadcast television and radio network the National Broadcasting Company (NBC), 100,000 Cubans are leveraging crypto assets. The report says increased crypto usage is due to the fact that Cubans cannot use certain payment vehicles due to the sanctions placed on Cuba by the United States.
100,000 Cubans Bypass Payment Bans via Crypto
NBC has published a video report that indicates roughly 100,000 Cubans are using digital currencies like bitcoin. For instance, one particular Cuban cafe owner, Nelson Rodriguez, who accepts bitcoin and ethereum, was interviewed by the NBC news team. He explained that he “believes in the philosophy” behind crypto assets. While showing a number of antique cars still driven by Cubans today, the NBC reporter further says Cubans are embracing the future.
100,000 Cubans using crypto assets is largely due to the increased internet performance during the last three years, the report claims. Another Cuban entrepreneur NBC interviewed discussed how specific payment companies like Paypal, Revolut, and Zelle were banned in Cuba. “We say see you later, [and] we don’t need you anymore,” the Cuban entrepreneur Erich Garcia remarks in the video, further explaining how cryptos can help bypass the traditional finance system. Garcia added:
I will use cryptocurrency to expand my business.
Economist Says: ‘If Cubans Can Use a Separate Payment Channel, Then That Would Be of Interest’
NBC’s report also discussed Cuba’s central bank approving cryptocurrencies and providing licensure guidelines for virtual asset service providers (VASPs). Bitcoin.com News reported on the general framework and regulations the Cuban government advanced in decree number 89/2022. The NBC video report published on Monday also explains that well known financial institutions like Deutsche Bank and JPMorgan have been fined for providing Cuba payment services.
Dr. Emily Morris, an economist at the University College London, details to the NBC reporter via video interview that she’s not at all surprised that Cubans are looking at this technology. Morris explained the benefits of peer-to-peer transactions without the need for a financial institution. If they can use a “separate [payment] channel, then that would be of interest,” Morris concluded.
The reporter also talked to a musician named Ernesto Cisneros who said his income was slashed because of the Covid-19 pandemic. The Cuban musician Cisneros then turned to non-fungible token (NFT) technology, and he transformed his music into NFTs and sells them online. At the end of the video, the Cuban entrepreneur Garcia insists that the use of crypto payments cannot be blocked from Cubans, and “that’s a fact,” he stressed.
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What do you think about NBC’s report that estimates 100,000 Cubans are using crypto assets to bypass strict financial sanctions? Let us know what you think about this subject in the comments section below.
Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for Bitcoin.com News about the disruptive protocols emerging today.
Image Credits: Shutterstock, Pixabay, Wiki Commons
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U.S. House Introduces Bill to Allow Bitcoin Into 401(k) Plans
The bill serves as the House companion to the Senate’s Financial Freedom Act of 2022, which was introduced earlier this month. Rep. Donalds’ bill would prohibit President Biden’s Department of Labor from restricting the type of investments that self-directed 401(k) account investors can choose to invest in through a brokerage window.
Fidelity at risk?
Last month, Fidelity announced it would allow participants in its 401(k) retirement plan to allocate a portion of their investments to bitcoin, not long after the Department of Labor admonished 401(k) providers. Currently, it provides 401(k) retirement plans to over 23,000 companies.
“In this early stage in the history of cryptocurrencies, the Department has serious concerns about the prudence of a fiduciary’s decision to expose a 401(k) plan’s participants to direct investments in cryptocurrencies, or other products whose value is tied to cryptocurrencies.”
In a recent interview with the Wall Street Journal, the Department expressed its concerns for what Fidelity Investments has done.
“We have grave concerns with what Fidelity has done,” acting assistant secretary of the Employee Benefits Security Administration Ali Khawar said. The administration regulates company-sponsored retirement plans within the Labor Department.
“In a far-reaching and sweeping endeavor to centralize power in Washington, the Biden administration is now attempting to dictate how American people invest their hard-earned money,” said Rep. Donalds.
“This administration, as well as any other government entity, lacks the authority to direct the financial future of America’s investors,” he noted.
Bill gets Republican support
Donalds mentioned in a tweet that Senator Tommy Tuberville of Alabama would be driving this bill in the Senate, with support from Congressman for Minnesota’s sixth District, Tom Emmer.
“Proud to support @RepDonaldsPress and @SenTuberville Financial Freedom Act of 2022,” Emmer tweeted.
Congressman Warren Davidson from Ohio’s eighth district, Rep. Young Kim, who serves as the U.S. representative for California’s 39th Congressional District, and U.S. Representative for Arizona’s Sixth Congressional District, also voiced their support of the bill.
“Folks work for decades, live within their means, and invest wisely so they can retire comfortably,” said Senator Tuberville.
“Now, the Biden administration has taken it upon itself to dictate what assets are viewed worthy of retirement investment, taking the decision away from individual investors by issuing regulatory guidance targeting cryptocurrency. This is government overreach at its finest. The government has no business standing in the way of retirement savers who want to make their own investment choices. When you’ve earned your paycheck, how you invest your money should be your decision. Our legislation makes sure that is the case.”
Weaknesses in Fidelity’s offerings
Some experts argue that Fidelity has missed two critical elements of investment – a lack of diversity and allocation size.
Offering only one or two cryptocurrencies is not ideal, argues Matt Hougan, chief investment officer at Bitwise Asset Management.
He argues that the “best approach for most investors looking to make a long-term allocation to crypto is to own a diversified, regularly rebalanced index that will adapt to the evolving market.”
Hougan believes that despite short-term reluctance due to regulator pushback, employers will eventually clamor to get crypto added to their 401(k) plans because employees will welcome the move.
David Ramirez, chief investment officer at 401(k) provider ForUsAll, said that the company provides exposure to a diverse selection of institutionally adopted cryptocurrencies.
Crypto experts suggest that a 20% bitcoin allocation is too high.
“In the case of a 401(k) plan where the employer has fiduciary responsibilities to the plan participants, 20% is quite high for most investors,” argues Adam Bergman of the IRA Financial Group. The company allows clients to invest in a broad array of cryptocurrencies.
Bergman believes that the allocation to crypto should be 1 percent to 5 percent of the portfolio.
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Bitcoin Pizza Day rewind: A homage to weird and wonderful BTC purchases
Happy Bitcoin Pizza Day! Before you dial for a Margherita to commemorate the world’s first real-world Bitcoin transaction, here’s a slice of trivia:
What do a family holiday to Japan, a 50 Cent album, a steak dinner, and a framed cat photo all have in common?
They were all paid for with Bitcoin (BTC) by members of the Cointelegraph Bitcoin community! And just like the Bitcoin pizzas that cost 10,000 BTC, which are now worth more than $300 million, the community’s Bitcoin purchases have also skyrocketed.
Benjamin de Waal, the VP of Engineering at Bitcoin exchange Swan Bitcoin told Cointelegraph, “I spent 7 BTC on a family trip to Japan a few years back.” In today’s value, 7 BTC is worth well over $200,000 — but Ben’s happy because his kids are happy:
“It would have been worth a lot more now; but I don’t regret it at all. A good childhood full of adventure, fun, and learning is priceless.”
Felix Crisan, the scammer vigilante, told Cointelegraph how he once spent 50 BTC (worth $1.5 million) developing a new software module for his company in 2015. Crisan added that in 2016:
“Let’s not forget some almost 1BTC ‘spent’ betting who the next US president’s going to be.” […] Of course, I didn’t win.”
That’s a $30,000 bet at BTC’s current market price.
Jeffrey Albus, Editor at Cointelegraph, shared that he splashed out on a steak dinner to demonstrate Bitcoin’s peer-to-peer capabilities “sometime in 2011 or early 2012.”
“We paid 15 BTC — 12 for the meal, plus 3 BTC left as a tip (which the waitress probably threw away.)”
Worse still, the value of 15 BTC back over ten years ago was so small that it fell short of the total bill: Albus had to top it up with good old greenbacks. The value of the Bitcoiner-appropriate steak dinner is now worth shy of half a million dollars.
In a word to the wise, Julien Liniger, CEO of Swiss Bitcoin exchange Relai–and a Bitcoin maximalist through and through, told Cointelegraph that he “bought a bitcoin hoodie for 0.1 BTC back in the days, but that was the last thing” — a roughly $3,000 hoodie. He explained that “it then became too stupid of a thing to me to spend instead of stack sats.”
Meanwhile, the team at CoinCorner, the UK Bitcoin exchange behind the contactless Lightning Network payment card, shared a few stories. Danny Scott, the CEO, bought the 50 Cent album “Animal Ambition” with Bitcoin when the market price was around $600. 50 Cent famously “forgot” he accepted 700 BTC for the album — let’s hope Scott forgets the missed gains, too!
Molly Spiers, CoinCorner’s Head of Marketing, told Cointelegraph, “I bought a photo postcard of my cats […] for 0.009 BTC.” The $270 postcard was sadly not enough for Spiers to keep a hold of it; ‘I’ve lost them somewhere over the years – I’d have framed them with pride!”
Fortunately, there are “no regrets,” as it does “make for a good story.” Plus, she shared a picture of the cats:
While “experimenting with Bitcoin as a currency,” Matthew Ward, CoinCorner’s software developer, told Cointelegraph that he “bought the game Cities Skylines back when it launched on Steam in March 2015 for 0.108 BTC.” You can be the judge of whether the graphics merit a $3,000 price tag:
Finally, Didi Taihuttu, known as the father of the Bitcoin Family and sometimes the Bitcoin tattoo guy, spent 2.75 BTC on a Bitcoin miner in 2014. Taihuttu told Cointelegraph that “the strangest part is that when BTC hit around $200, I gave up mining BTC and started to mine dogecoin (DOGE).” Had he held the BTC, he would have over $180,000.
Taihuttu also shared that during his adventures as The Bitcoin Family, he’s parted with over 9 BTC ($270,000), which he describes as “losing 9 BTC but gaining an amazing adventure.”
And for those wondering what happened to the 10,000BTC Hanyecz spent on the pizzas, according to Cointelegraph research, 5% of the total landed in a very wealthy wallet, while “some of the funds were seemingly liquidated” on a failed crypto exchange.
The wealthy wallet that chowed down on some of Hanyecz’s BTC is in the top 15 richest wallets in Bitcoin, accumulating over 53,000 BTC. The total spent or sent from the wallet is 0 BTC: a certified Bitcoin hodler.
Bitcoin stands apart from other crypto, and what that means for US public policy
United States President Joe Biden’s executive order on digital assets has kickstarted an interagency mission to support financial innovation while protecting American consumers and interests. While many industry leaders welcome the constructive tone, some critics hope for a crackdown. We don’t blame them.
Many cryptocurrency projects operate behind thin veils of decentralization. In public, they’re sold on the premise that they distribute power. Behind the curtains, leaders pull the strings. In the recent case of Wonderland, a serial scammer and felon directed a $1 billion treasury.
Many projects secretly pay influencers to shill their tokens. The price pumps. Insiders dump. Naive investors lose money. Sometimes, the shillers are celebrities. And, sometimes, those celebrities leak the surprisingly low cost of their integrity.
Hundreds of projects suffer technical vulnerabilities. Seemingly every week, hackers exploit hidden software bugs. The third-largest ever occurred in early February, with $326 million — gone. And then in late March, another $600 million — poof.
Many cryptocurrencies are blatant scams — some, proudly pyramid-shaped. Market participants treat these as facts of life, with oft-used terms for exit scams (“rug pulls”) and pyramid-shaped projects (“Ponzis”).
To most, cryptocurrencies look the same, like tomatoes pasted in Aisle 9 — only tasteless, useless, and more numerous. The cynical see the menu of cryptocurrencies as a proxy most-wanted list. Neither group is entirely wrong.
Yet one item on the menu stands apart. It is arguably one of the more important technological advances since the internet, itself. Buy it or not, we don’t care. But we three professors do care to bring one simple message: Bitcoin (BTC) is special. It deserves study and discussion.
Let’s talk about Bitcoin
Bitcoin is genuinely decentralized. Tens of thousands run nodes all around the world. Operating a node is easy; you could do so within the hour with an internet-connected computer and a few hundred gigabytes of storage. In 2017, these nodes vetoed a controversial change to Bitcoin that would have upped the network’s centralization by making it harder for ordinary people to run a node. In doing so, they trumped a majority of Bitcoin miners, exchanges and other powerful legacy players.
Bitcoin’s decentralization makes it fair. No foundation enjoys a trademark or governs its monetary policy. This contrasts not only with more centralized cryptocurrencies but with the Federal Reserve, itself. In the past year, three Federal Reserve officials have resigned after a series of, let’s say, well-timed trades. Bitcoin has never had any officials resign in disgrace — it has no such officials. The network automates these jobs away.
Bitcoin’s decentralization also makes it secure. Most money is digital and sits under the thumb of third parties like banks and payment processors. But innocent Russian and Canadian citizens remind us that third parties can freeze and seize those balances, especially when subject to state pressure. Reliance on third parties jeopardizes funds. Bitcoin participants can hold their own private keys and thereby save and send value without third parties. Bitcoin is in a different league than other cryptocurrencies. In the digital age, Bitcoin’s unparalleled level of decentralization makes it the safe haven from state and corporate overreach.
And unlike most other cryptocurrencies, Bitcoin never had a private token sale to venture capitalists or an initial coin offering to enrich insiders. Bitcoin is the most widely distributed digital asset. In an important sense, it has no insiders — only early adopters.
The main early adopter, Satoshi Nakamoto, mined about a million Bitcoin (5% of the maximum supply). Satoshi’s holdings are fully visible, and Satoshi never spent a single dime. With most other cryptocurrencies, the rich get richer, sometimes in hidden ways, and have more say over the network. Not so with Bitcoin.
Whereas some projects move fast and break things, Bitcoin moves slowly but surely. Bugs are rare. Granted, this conservative approach has tradeoffs. Upgrades are as rare as bugs. And Bitcoin lacks the flexibility of other platforms. But in exchange, countries and corporations feel secure with Bitcoin on their balance sheets.
You may have heard of hacks and stolen Bitcoin. These cases don’t involve weaknesses in Bitcoin, itself. They illustrate instead the pitfalls of insecure key storage or relying on third-party custodians.
Finally, Bitcoin is no scam. It can certainly be used for scams — much like the U.S. dollar, or other digital assets. But the Bitcoin network offers final settlement of its native asset, much like the Federal Reserve System offers final settlement of the U.S. dollar. People do speculate wildly on the Bitcoin price. Such is the way for early stages of innovation. And people worldwide need it even as privileged Westerners speculate.
Bitcoin’s design involves tradeoffs, to be sure. Its public ledger makes privacy difficult, though not impossible. It requires energy for its security. And its fixed supply engenders price volatility. But for all that, Bitcoin has become something remarkable: a neutral monetary system beyond the control of autocrats. Ideologues will balk as they seek that perfect — but perfectly elusive — monetary system. Wise and pragmatic policymakers, by contrast, will instead seek to use Bitcoin to improve the world.
Here’s what that means for public policy
First, we must not assume that cryptocurrencies share more in common than they, in fact, do. Bitcoin leads them all precisely because no one leads it. The policy must begin here from a place of understanding — not of cryptocurrency, in general, but of Bitcoin, in particular. As President Biden’s executive order conveys, digital assets are here to stay. The general category isn’t going anywhere precisely because Bitcoin, itself, isn’t going anywhere. We owe it special attention. Not Bitcoin only, but Bitcoin first.
Second, Bitcoin is credibly neutral since the network remains leaderless. Consequently, the U.S. can use and support Bitcoin without “picking winners and losers.” Bitcoin has, in fact, already won as a globally neutral monetary network. Nurturing the Bitcoin network, using Bitcoin as a reserve asset, or making payments over Bitcoin would be analogous to deploying gold within the monetary system — only digital, more portable, more divisible, and easier to audit and verify.
We commend President Biden for recognizing that digital assets deserve attention. We’ll need all hands on deck — from computer scientists, economists, philosophers, lawyers, political scientists, and more — to spur innovation and nurture what’s already here.
This article was co-authored by Andrew M. Bailey, Bradley Rettler and Craig Warmke.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Andrew M. Bailey, Bradley Rettler and Craig Warmke are fellows with the Bitcoin Policy Institute and the Resistance Money Bitcoin research collective and teach, respectively, at Yale-NUS College, the University of Wyoming and Northern Illinois University. Warmke is also a writer for Atomic.Finance.
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