ProtonMail. (see Jordan Graham story) (Staff photo by Stuart Cahill) (Photo by Stuart Cahill/MediaNews Group/Boston Herald via Getty Images)MediaNews Group via Getty Images

I caught up with Andy Yen, the founder and CEO of Proton, this year at the Collision Conference in Toronto to discuss his views on bitcoin, encryption, and what trends will affect both technologies long-term. The following is an excerpt of that interview, though its been copy-edited for clarity, and some parts of the interview have been rearranged.

Andy: I think when that happened in 2014, what we did eventually - actually, at that moment, was we set up a Bitcoin address and said Okay, you know, PayPal is blocking us, we don't know when we're getting our money out. You can donate with crypto. And that was the instance that maybe opened our eyes to the power of crypto.

The fact that it's decentralized - the fact that no government can just come in and block you. The fact that you're not beholden to a single traditional financial institution that can do frankly, stupid things, because they misunderstand what you're doing. It's a sort of liberation and freedom, right?

And the reason that we have been accepting Bitcoin for 10 years, which I think makes us a bit of an early adopter, and still to this day, I think the reason that we hold on to our bitcoins as well, is because we learned the hard way - the value and need for diversification. I would never wish this type of ordeal on any other company. But it does happen, it can happen. It has happened. And I think it's just prudent that you spread your risk a bit.

Andy: It's quite interesting. If you look at BlackRock, well, I don't think BlackRock needs to be supporting or endorsing crypto to even do what they're doing. BlackRock is the bank. And it's not exactly a bank, but its a financial institution, right. So, you know, what does a baker do - a baker bakes bread, right? What does the financial system do? It makes money. That is its purpose.

Theres institutional pushes [into bitcoin] because there's money to be made. So if you run an ETF, you can manage more assets, because there's maybe a certain fraction of the world that wants the asset class in crypto, and that is big enough, where they can get a good ROI for doing that.

So that's the obvious reason why they're jumping into it. And from a technology standpoint, and from a settlement standpoint, [bitcoin and cryptocurrencies] actually do work right and they allow you to settle much faster than SWIFT would do in potentially a more reliable way as well.

So I think it's sensible that you see kind of mainstream adoption because the technology is sound, but what probably isn't so sound is the players that have been involved so far - as we've seen.

Andy: I think we need to look at this from a long term lens.

Encryption: there's always support, there's always opposition. It comes in waves, it comes and goes, it shifts back and forth depending on the administration, the year and what's going on in the world.

But having been in the space for close to 10 years now - we started back in 2014 - I can kind of tell you what the long term trend is. And back we started in 2014, it was a truly tough space to be in. So you know, in the very beginning, PayPal actually shut down our PayPal account for a bit of time. [...] They thought encryption was was actually illegal, right?

And back in those days, governments across the world really viewed encryption as an enemy. We were like the hostile force that they were afraid of. So that was the environment in which we started out in.

And what has happened since then is, you know, we saw Europe pass GDPR, we saw the rise of state actors like Russia, China, North Korea, Iran, hacking systems and representing the kind of new cyber threats in which encryption is opposition to tackle.

We've also seen many incidents where governments have realized over time that security and privacy are two sides of the same coin. So you can't really rally against encryption, because encryption oftentimes is the shield. It's the barrier that prevents you from going into the abyss online.

Many of these same governments that in 2014 were strongly opposed to what Proton is doing - today and I can't tell you which governments because you know, we're a privacy company. We're very discreet. But a lot of these governments today, they're actually our customers, they're actually buying various programs, services in order to protect their own infrastructure and protect their own communications.

And so I think what that really shows is that if you take a longer lens over a decade, the trend has really shifted right, you know, we've gone from things like, try to shut us down. We've gone from the famous Apple versus FBI case, to kind of a broad acknowledgement across most governments that encryption is necessary and end-to-end encryption is needed.

And if you look at the number of people in government today that either use Signal, they use Whatsapp or they even use Proton - like if I'm on Capitol Hill, a decent amount of people that I talk to actually are our users.

I will say that the success of these products - they make encryption more mainstream. Getting it into the hands of policymakers, has helped to spur the understanding that encryption matters.

But that doesn't mean that we're always in the clear. Of course, there's always forces that are trying to put more stringent regulations and you see that in UK, the Online Safety Bill. You see that in the EUs new proposed chat control legislation. These things are always coming up.

And the core conflict here is governments are trying to on the one hand, protect privacy and encryption. But on the other hand, they want to do things like block Child Sexual Abuse materials and things like that to be incorporated online. And essentially, it's a struggle because they're looking to legislate a solution that technology is not able to fix.

There is still no way today to build a backdoor that only lets bad guys in. In fact, you may never be able to do that. And the outcome of this is you have legislators who are confronted with trying to solve this problem and if you look at the EU, the chat control legislation and you look at the language - on the one hand, it says well, we need to ensure that privacy and encryption are protected.

On the other hand, the language is saying at the same time, we need to have ways to get access to information to verify that illegal materials are not being disseminated.

And those two statements, which are in the same draft bill, are from a logical standpoint, fundamentally incompatible and this is something that I think policymakers just don't fully understand yet. So it's a process of educating them.

And also hoping to understand that legislation is usually needed to fix problems that the market economy doesn't resolve. But on this issue, whether it's Proton, whether it's Apple, whether it's Facebook, whether it's you know, Google nobody is financially incentivized to let crimes occur on their platform. And if you take Proton ourselves, we probably have up to 10% of our staff working on abuse. There are ways to tackle this problem without defeating encryption. So I think it is a matter of education to communicate this.

I was one of the first writers in 2014 to write about the intersection of cryptocurrencies in remittance payments and drug policy with VentureBeat and TechCrunch. Since then, I've been a HODLer of Ethereum and Bitcoin, and I've built several mini-projects with them for fun. I'd like to learn as much as possible about our decentralized future while sharing that knowledge with you.

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Protons CEO On Why They Continue To Take Bitcoin And The Future Of Encryption - Forbes

KanawatTH

In the Lord of the Rings, The Return of the King film, shortly before the battle of the Battle of the Pelennor Fields, Gandalf and Pippin were talking about the battle that was to come. Part of the title of this comes from Gandalf saying that moment of eerie silence was the, 'deep breath before the plunge' that would envelope Minas Tirith and threaten all of Middle Earth. This is a fairly common theme, as though a moment of calmness exists before chaos ensues. Another common phrase used outside of Tolkien's world is, 'the calm before the storm'.

This is the moment that I believe we are in when it comes to Bitcoin (BTC-USD). Those who follow my work closely know that I am incredibly bearish on cryptocurrency in general, but especially on Bitcoin. This is not to say that I don't believe it can't appreciate in price in the near term. It could double, triple, quadruple, or even more. But at some point, it deserves to fall spectacularly because, at the end of the day, Bitcoin has no significant value to it. This may seem to be a ridiculous claim given how it has taken the world by storm. But when you start looking at important data points, it does seem as though some of the delusion about the cryptocurrency's prospects is already coming undone.

The first data point that I would like to look at involving cryptocurrency relates to just how much trading activity it has experienced over the past few years. I understand that there was a surge several years ago and that we would expect some degree of normalization that would cause trading activity to drop before, if adoption is to grow in the long run, rise at a more reasonable rate. But that is not what we have seen. Take the time frame from the beginning of 2018 through September of this year. As you can see in the chart below, monthly trading activity for Bitcoin specifically has been falling on a year over year basis for at least five years now.

Author - Bitcoin City

In September of this year, for instance, trading activity for Bitcoin was 68.6% lower than it was the same month last year. Over the past two years, it is down a more modest 54.8%. But compared to three years ago, it has dropped 68.9% and, compared to five years ago, it is down a whopping 86.1%. The general trend here is clear. Trading activity is grinding to a halt. And no matter what you think of Bitcoin, it only gets its price because of the optimism of those trading it.

Author - Sifma

This is not the kind of trend that you see with a legitimate market. Take the US equities market as an example. While there have been ebbs and flows in the market from year to year the general trend has been higher. When it comes to the quantity of shares traded, 2022 saw an all-time high average daily trading volume of 11.87 billion shares. This represents an increase of 4.1% over the 2021 calendar year. It's also up 62.2% compared to 2018 and up 84.5% compared to what was seen in 2012. More recent data have shown a bit of weakness in the space. In September of this year, for instance, trading volume came in at 8.4% lower than it was the same time last year.

Author - Glassnode Studio

There are other data points besides trading activity that I can point to in order to make my argument. One valuable data point involves something called active addresses. An active address represents a user that has either sent or received cryptocurrency over a particular span of time. In the chart above, you can see monthly active addresses from 2020 through 2022, as well as for January of this year through August of this year. What we are seeing here is stagnation. This is not what you expect from a market that you would expect to continue growing. What this looks like to me is a pause where diehard adopters remain dedicated to cryptocurrency while the rest of the world refrains from engaging with it. So not only have we established that total trading volume has been on the decline, we have now established that the number of transactions occurring with cryptocurrency have essentially flatlined.

Another data point involves its popularity more generally. As you can see in the chart below, interest in Bitcoin specifically has plummeted in recent years. Globally, interest in it has been declining almost nonstop since peaking in May of 2021. Using this metric as a barometer, Bitcoin is 78% less popular than it was at its peak between January of 2018 and the present moment. While this data point on its own may not be material, when combined with the others that we have already discussed, we start to see a picture being painted that the dream of global Bitcoin adoption may never truly come.

Author - Google Trends

This marks a stark turn from a little over a year ago. Back in June of 2022, nearly 75% of retailers polled by Deloitte stated that they planned to accept either cryptocurrency or stablecoin payments within the next two years. In a separate survey conducted around that same time, it was discovered that 46% of merchants already accepted cryptocurrency as a form of payment and 85% of businesses that generated more than $1 billion in annual online sales already accepted cryptocurrency as well. While this data might very well be correct, you would expect the transaction volume of Bitcoin, as the leading cryptocurrency, to continue increasing as the number of cashless payments increased. However, that does not seem to be the case.

PricewaterhouseCoopers, or PwC for short, estimated that, in 2020, there were approximately 1.04 trillion cashless transactions across the globe. That number is expected to expand to 1.88 trillion by 2025 before climbing further to 3.03 trillion by 2030. This expected growth may make some believe that a return to growth in popularity for Bitcoin is inevitable. If we are expected to see cashless payments essentially triple in the span of a decade, you would expect to see the leading cryptocurrency also grow. But you have two challenges. For starters, you don't need cryptocurrency in order to engage in cashless payments. Traditional currencies work just as well and they lack the volatility that makes Bitcoin and, by extension, all cryptocurrencies other than stablecoins, bad mediums of exchange.

Perhaps more important than this, however, is the fact that central banks are becoming more interested by the day in launching their own digital currencies. At present, these are being referred to as Central Bank Digital Currencies (or CBDCs for short). The Federal Reserve has not committed to the idea of creating a CBDC, even going so far as to specify that such a maneuver would require Congressional approval. But there are plenty of other countries that have come out in favor of moving in the direction of digital currency. Back in May of 2020, 35 countries were reported to be considering the development of their own CBDC. Today, that number has grown to 130, representing approximately 98% of global GDP. Most of these are still in the early phases of due diligence or development. But it is clear the direction that we are heading. And unlike stablecoins, with no fewer than 23 having failed, a digital currency backed by a country like the US or other major countries would afford the kind of stability expected of a true currency.

At this point in time, things are not looking particularly pleasant for Bitcoin or cryptocurrency in general. I am bearish about both, but especially about Bitcoin. At the end of the day, I strongly believe that it will turn out to be worthless or very close to it. For now, volatility will persist. But when you look at the slate of challenges it has to contend with, the picture doesn't look pretty.

You would expect, in a world where cashless transactions are growing at a rapid clip, for either trading activity or active users to be growing. Neither of those are transpiring. Yes, you already have sizable adoption amongst online retailers. But that removes the argument that continued adoption on the side of accepting payments will lead to more individuals transacting in Bitcoin. Governments across the globe are either considering or have already launched programs to explore their own digital currencies. And because of the stability that they will be able to offer, any such currency that is launched will be vastly superior to something like Bitcoin.

When you add all of this together, it makes me feel as though we are at the point where Bitcoin no longer has enough support to it to continue appreciating materially. Before, the idea of the, 'greater fool' buying it, pushing up the price in doing so, was enough for many to justify putting money into it. After all, that was the only bullish case since there is little to no truly intrinsic value. But now that we are seeing these challenges emerge, even that argument is looking far less compelling. Though I do not expect it to occur overnight, and we may yet see significant volatility in its pricing, I would argue that an eventual plunge is inevitable. And as things stand, this might be the deep breath before it.

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Bitcoin: The Deep Breath Before The Plunge (BTC-USD) - Seeking Alpha

Bengaluru: The Special Investigation Team (SIT) looking into Bitcoin laundering and other cases on Saturday raided nine locations, including the houses and offices of four police officers and two cyber experts. According to a statement from SIT, the officials seized four laptops, eight mobile phones, two network-attached storage (NAS) devices, 10 hard drives, five pen drives, a memory card, and other relevant documents. The SIT sleuths also questioned the four cops who were part of the investigation in the Bitcoin case involving hacker Srikrishna alias Sriki. According to sources, DySP Sridhar Poojar and inspectors Chandradhara, Lakshmikanthaiah, and Prashanth Babu were the raided policemen. SIT also conducted searches at the office of Babu in the technical cell in Adugodi. Raids and searches were also conducted on the residences and offices of two cyber experts Santosh Kumar KS, CEO of Group Cyber ID Technology in HSR Layout, and Gagan Jain B Satish, CEO and founder of CyberSafe in JP Nagar. The two experts are said to have assisted police in the Sriki hacking case probe, among others.Laptop missingSources said a laptop in which the officers are alleged to have created and deleted files was not found during the raids. The SIT investigating officer had given three notices each to the four police officers, asking them to provide the laptop, but they claimed the laptop wasnt with them.We also published the following articles recentlyDelhi Police raid NewsClick's office, journalistsThe Delhi Police Special Cell has conducted raids on over 30 locations linked to news website NewsClick in Delhi, Noida, and Ghaziabad. The raids targeted the residences of journalists and employees associated with the website. Electronic evidence including laptops, mobile phones, and data dumps from hard disks were confiscated. The Enforcement Directorate had previously conducted raids at the firm's premises investigating its funding sources. The raids were carried out based on inputs from the central agency, following a report implicating NewsClick in receiving financial support for the dissemination of Chinese propaganda.Delhi Police gave us no FIR, neither reveal offences: NewsClick on office raidsNewsClick has issued a statement condemning the recent raids conducted by the Delhi Police at its premises. The online news portal claims that it has not been provided with a copy of the FIR or informed about the specific charges against them. NewsClick also alleges that electronic devices were seized without due process, and its office has been sealed. The website further states that it has been targeted by various government agencies since 2021. The founder and HR head of NewsClick have been arrested and sent to police remand in a case related to allegations of receiving money for pro-China propaganda.Raid on NewsClick: Mumbai Police conducts searches at activist Teesta Setalvad's Juhu residenceDelhi Police's Special Cell conducted raids at 30 premises connected with online portal NewsClick and the houses of its journalists. The police also searched activist Teesta Setalvad's residence. Minister of Information and Broadcasting Anurag Thakur defended the police action, while opposition parties criticized it, alleging that the central government was targeting journalists. The BJP argued that the investigation was already underway and the police were acting within the law. The raids were conducted based on a case registered under the Unlawful Activities (Prevention) Act and other sections of the Indian Penal Code.

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Bitcoin case: SIT raids premises of 4 cops, 2 cyber experts - Times of India

The ether-to-bitcoin ratio dropped to a 14-month low as large token holders, including Ethereum co-founder Vitalik Buterin, moved coins to crypto exchanges, possibly as a prelude to selling.

ETH-BTC dipped to near 0.0602 on Tuesday, according to TradingView data, its lowest reading since July.

The recent price action extended a trend that began in September 2022, confirming some bearish forecasts from analysts for the second-largest cryptocurrency by market capitalization.

Marcus Thielen, head of strategy and research at Matrixport, said Monday on CoinDeskTV that Ethereums protocol revenues have been decreasing for the last three months, and expected BTC to continue outperforming the broader crypto market, including ETH.

Popular crypto analyst Benjamin Cowen, founder of IntoTheCryptoverse, noted in an X post that a potential breakdown in the ETHs valuation versus BTC could be in the cards.

The latest slide in price occurred as some prominent investors also known as whales have recently deposited a total of $60 million ETH to crypto exchanges, raising alarms about further declines in price.

Market participants closely follow the on-chain maneuvers of whales, as they are considered well-informed and have a sizable impact on the market. Depositing assets to an exchange usually signals intention to sell, while withdrawals suggest accumulation.

Most recently, Ethereum co-founder Vitalik Buterin transferred 300 ETH worth roughly $493,000 to Kraken on Tuesday, according to blockchain data noted by security firm PeckShield. While the deposit is rather small, it spurred speculation among crypto watchers given Buterins stature for Ethereum.

Another large holder deposited a total of 30,000 ETH worth nearly $50 million to crypto exchanges Binance, OKX and KuCoin over the past four days, blockchain sleuth Lookonchain noted.

Lookonchain also pointed out that a crypto wallet that acquired tokens from Ethereums initial coin offering (ICO) nine years ago deposited Monday 6,000 ETH worth just shy of $10 million to Kraken.

This entity received roughly 255,000 ETH during the ICO, now worth $423 million Lookonchain noted. Given that the tokens initial price was around 31 cents, selling the coinw now at $1,650 would represent a 527,000% profit.

Originally posted here:
Ether Drops to 14-Month Low Against Bitcoin as Vitalik Buterin, Ethereum Whales Send $60M ETH to Exchanges - CoinDesk