Korean Cryptocurrency Exchange Korbit Halting Deposits from Foreigners
https://www.coindesk.com/korean-cryptocurrency-exchange-korbit-halting-deposits-from-foreigners/

South Korea's Korbit exchange has informed users that non-citizens will soon not be able to deposit funds for trading.

What a Facebook Blockchain Token Might Look Like
https://www.coindesk.com/facebook-blockchain-token-might-look-like/

If Facebook CEO Mark Zuckerberg really wants to experiment with decentralized systems, a publicly issued crypto-token would be hell of a way to do it.

Bitcoin Defends $11,000 Mark and Eyes Move Higher
https://www.coindesk.com/bitcoin-defends-11000-mark-and-eyes-move-higher/

Bitcoin is stuck in a narrow range currently, but a breakout may lie ahead, the price charts indicate.

Huobi Is Launching a Token, But It's 'Not an ICO'
https://www.coindesk.com/huobi-is-launching-a-token-but-its-not-an-ico/

China-based crypto exchange Huobi has announced that it will issue its own token based on the ethereum ERC-20 standard.

Canadian Research Body Pilots Ethereum in Transparency Push
https://www.coindesk.com/canadian-research-body-pilots-ethereum-in-transparency-push/

The National Research Council of Canada is trialing the ethereum blockchain for recording government contracts.

China Moves to Crack Down on Digital Currency Pyramid Schemes
https://www.coindesk.com/china-moves-to-crack-down-on-digital-currency-pyramid-schemes/

China's public security ministry says it will take aim at pyramid schemes in the country, including those that purportedly involve cryptocurrencies.

Commodity Merchant Louis Dreyfus Trials Blockchain for Soybean Trade
https://www.coindesk.com/louis-dreyfus-trials-bank-backed-blockchain-platform-soybean-trade/

Louis Dreyfus, a major commodities trading company, has announced that it has piloted a blockchain-based transaction system developed by a group of financial institutions including ING.

Op Ed: Here’s What Paul Krugman Got Wrong in His Bitcoin Tweetstorm
https://bitcoinmagazine.com/articles/op-ed-heres-what-paul-krugman-got-wrong-his-bitcoin-tweetstorm/

Like many other mainstream economists (https://bitcoinmagazine.com/articles/some-economists-really-hate-bitcoin-1473451135/), Paul Krugman has long-shown a complete disdain for Bitcoin. In late 2013, he went as far as to write a piece titled “Bitcoin Is Evil (https://krugman.blogs.nytimes.com/2013/12/28/bitcoin-is-evil/)” for his column in The New York Times.
Moral objections to bitcoin are one thing, but Krugman also does not see much utility in the cryptoasset at all. While he has been able to express his hatred for Bitcoin quite clearly, his technical criticisms of bitcoin as a new type of asset and store of value leave something to be desired.In a tweetstorm on Sunday, January 21, 2018, Krugman illustrated his ignorance on the usefulness and utility of bitcoin around the world.Starts Out Well Enough With the Digital Gold AnalogyKrugman’s tweetstorm started out well enough. In fact, the opening tweets were likely some of the nicest things the Nobel Laureate has ever had to say about bitcoin.“As I see it, cryptocurrencies like Bitcoin are in effect like digital gold coins, in the sense that they can't be counterfeited ... Cryptocurrencies use cryptographic techniques plus distributed storage to create non-material entities that are nonetheless impossible to fake,” tweeted Krugman.Digital gold is still the best analogy to sum up the digital asset’s value proposition, and the utility of bitcoin should become more apparent as the world moves deeper into a cashless society. In a cashless society, bitcoin would become the last financial bastion of freedom in a world where the global financial system is under complete control of governments.The Avoidance of Trusted Third Parties in Payments Is a Big DealAfter those tolerable first few tweets, Krugman goes off the rails with the claim that online payments that don’t involve a trusted third party aren’t that important.“Cryptocurrency lets you make electronic transactions; but so do bank accounts, debit cards, Paypal, Venmo etc. All these other methods involve trusting a third party; but unless you're buying drugs, assassinations, etc. that's not a big deal,” tweeted Krugman.First all of all, there’s no reason to bring morals into an exploration of bitcoin’s utility. Either people will use it or they won’t. Whether you like what they’re doing is a different matter. Bitcoin’s use in darknet markets, ransomware, online gambling and other fringe areas cannot be ignored. Utility is utility.Secondly, not everyone has access to PayPal, Venmo, and other online payment platforms. These options are centralized and permissioned. They’re also highly regulated, which means plenty of people fall through the cracks and cannot gain access to them.Online freelancers in Venezuela take bitcoin because their government and payment platforms like PayPal have failed them.
Interesting post on /r/Bitcoin from a Redditor who compares the different options for storing value in Venezuela.

"I know a lot of people who sold everything they could to leave the country and took their money to bitcoins through @LocalBitcoins (https://twitter.com/LocalBitcoins?ref_src=twsrc%5Etfw)."
https://t.co/dvmxu4ozhV pic.twitter.com/R3egCdmoLa (https://t.co/R3egCdmoLa)— Kyle Torpey (@kyletorpey) December 1, 2017 (https://twitter.com/kyletorpey/status/936687279036395521?ref_src=twsrc%5Etfw)



Krugman goes on to point out the clunkiness of Bitcoin as it exists today, and he’s generally correct on this front. But this does not mean there’s no utility here. In fact, the opposite is true: There is so much utility that it has become difficult to scale the system to all of the people who want to use it.
Complaining about the lack of cheap, user-friendly payments on Bitcoin today is analogous to someone in 1995 complaining that the internet doesn’t have Netflix. Just give it a minute. Payment layers are currently being built on top of the base Bitcoin blockchain, with the Lightning Network being the most obvious example.The

Claim That Bitcoin Has Nothing to Backstop Its ValueKrugman then turned to the often-used argument that bitcoin lacks any sort of underlying value. This should come as a surprise, since he just laid out how it is useful for illicit digital payments.“Meanwhile, what backstops a cryptocurrency's value? Paper money is ultimately backed by governments that will take it in payment of taxes (and central banks that will reduce the monetary base in case of inflation). Gold is actually useful for some things, like filling teeth and making pretty jewelry; that's not most of its value, but it does provide a tether to reality, along with a 5000-year history,” tweeted Krugman.“Cryptocurrencies have none of that,” Krugman continued. “If people come to believe that Bitcoin is worthless, well, it's worthless. Its price rise has been driven purely by speculation — by what Robert Shiller calls a natural Ponzi scheme, in which early entrants make money only [because] others buy in.”If bitcoin is useful for permissionless digital payments, then it has the same sort of underlying utility that the U.S. dollar has in the form of tax payments.Additionally, the U.S. dollar would also become worthless if people woke up one morning and came to believe that it was worthless.Of course, all of this misses the point anyway. How much of the value of all the U.S. dollars in the world comes from its use in tax payments? How much of the value of all the gold in the world comes from its use in electronics? Not much.Krugman misses that storage of value is also a form of utility, and bitcoin is the most uncensorable, unseizable store of value the world has ever seen. You can walk around with a passphrase in your head that can unlock access to thousands of bitcoins, and no one would be the wiser. Not to mention there is no centralized party that can inflate the supply.The Point of Market ManipulationKrugman also touched on the high potential for manipulation in the bitcoin market, pointing to a paper regarding the manipulation of the bitcoin price by now-defunct bitcoin exchange Mt. Gox, as an example.This is another claim with some basis in reality, but it ignores the massive amounts of manipulation and lack of transparency in the traditional financial system, which is what led to the creation of bitcoin in the first place.Through the use of cryptographic proofs, bitcoin has the potential to become much more transparent and trustless than the traditional financial system. Bitcoin’s monetary policy is already much more transparent than what goes on at the Federal Reserve. There’s a reason someone put up a “Buy Bitcoin” sign while Federal Reserve Chairwoman Janet Yellen spoke against the need for further audits of the central bank.

Bitcoin exchanges are highly centralized institutions, which opens the door for manipulation. However, these exchanges have also become much more regulated over time. Today, it’s far more difficult to run an exchange at the level of incompetence that was found at Mt. Gox.The potential for market manipulation should decline as the technology around bitcoin improves. Eventually, more trades may take place on decentralized exchanges, where it’s impossible to fudge the numbers.In his last tweet from his thread on Sunday, Krugman said it’s unclear if the Bitcoin blockchain — or any blockchain for that matter — is useful.Around $3 billion worth of bitcoin has been transacted on the Bitcoin network per day this year, according to Blockchain; $75 million worth of bitcoin per day was the norm the day Krugman first published an article on the subject.Krugman’s arguments, as well as arguments from other well-known economists, have not changed much since 2013, but the Bitcoin network has continued to grow. It’s possible that Krugman and his colleagues are unable to comprehend the usefulness of bitcoin as an asset because it does not fit into the regulated, controlled environment they’ve built their economic and political worldviews around.Bitcoin cannot be tamed, and they hate that.
This article originally appeared on Bitcoin Magazine (https://bitcoinmagazine.com/).

Coinbase Taps Twitter Vet to Bolster Customer Support Team
https://www.coindesk.com/coinbase-taps-twitter-vet-bolster-customer-support-team/

Coinbase has added Twitter's former vice president of operations and user services to its team in an effort to improve its customer service.

Study Suggests 25 Percent of Bitcoin Users Are Associated With Illegal Activity
https://bitcoinmagazine.com/articles/study-suggests-25-percent-bitcoin-users-are-associated-illegal-activity1/

In a newly published paper (https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3102645) on the use of bitcoin for illegal activity, researchers from the University of Sydney, the University of Technology Sydney and the Stockholm School of Economics in Riga indicate that a quarter of all bitcoin users are associated with illegal activity.
The use of bitcoin for illicit purposes has long been the most controversial aspect of the cryptoasset, although it has taken a back seat to speculation around the bitcoin price over the past few years.In addition to estimating the scale of illegal activity involving bitcoin, the research paper also claims this sort of activity accounts for a significant portion of bitcoin’s intrinsic, underlying value.MethodologyIn the paper, which was co-authored by Sean Foley, Jonathon R. Karlsen and Tālis J. Putniņš, publicly available information is used as the basis to identify an initial sample of users involved in illegal activity on the Bitcoin blockchain. Seizures of bitcoin by law enforcement, hot wallets of darknet markets, and Bitcoin addresses on darknet forums are used here, in addition to the trade networks of users who were identified in this data set.Additionally, the researchers use a formula of their own creation to detect users likely to be involved in illegal activity by analyzing the entire public blockchain up until the end of April 2017. The formula for detecting criminals on the blockchain involves a wide variety of metrics such as transaction count, transaction size, frequency of transactions, number of counterparties, the number of darknet markets active at the time, the extent the user goes to conceal their activity and the degree of interest in bitcoin in terms of Google searches at the time.“Bitcoin users that are involved in illegal activity differ from other users in several characteristics,” the paper says. “Differences in transactional characteristics are generally consistent with the notion that while illegal users predominantly (or solely) use bitcoin as a payment system to facilitate trade in illegal goods/services, some legal users treat bitcoin as an investment or speculative asset. Specifically, illegal users tend to transact more, but in smaller transactions. They are also more likely to repeatedly transact with a given counterparty. Despite transacting more, illegal users tend to hold less bitcoin, consistent with them facing risks of having bitcoin holdings seized by authorities.”The paper also notes that bitcoin transactions between illegal users are three to four times denser, meaning those users are much more connected to each other through their transactions. This is consistent, the paper says, with illegal users taking advantage of bitcoin’s use as a medium of exchange, while legal users tend to view the cryptoasset as a store of value.The Scale of Illegal Activity on the Bitcoin NetworkAs with any research into the activities of criminals on the internet, it’s important to take the findings of this study with a grain of salt. Remember, this is a study on the activities of those who do not wish their activities to be discovered in the first place.For example, another study Bitcoin Magazine reported on last week indicated a much lower level of illegal activity — albeit limited to the concept of bitcoin laundering — on the Bitcoin network than what was found in the study being reported on today.Having said that, here are the levels of illegal activity on the Bitcoin network, according to the study:24 million illicit users, which is 25 percent of all users
36 million illicit transactions per year, which is 44 percent of all transactions
$72 billion worth of illicit transactions per year, which is 20 percent of the dollar-value of all transactions
$8 billion in illicit bitcoin holdings at the time of the study
51 percent of all bitcoin holdings throughout bitcoin’s history have been illegal in nature

The study compares Bitcoin’s black market to the markets for illegal drugs in the United States and Europe. In the United States, this market is worth $100 billion per year. In Europe, the market is 24 billion euros on an annual basis.“While comparisons between such estimates and ours are imprecise for a number of reasons (and the illegal activity captured by our estimates is broader than just illegal drugs), they do provide a sense that the scale of the illegal activity involving bitcoin is not only meaningful as a proportion of bitcoin activity, but also in absolute dollar terms,” the paper says.More Takeaways from the PaperWhile the amount of illegal activity taking place on the Bitcoin network appears to be relatively large, the paper indicates that the prevalence of this sort of activity has been declining since 2015 as more mainstream users have entered the market due to the interest in bitcoin as a store of value or speculative asset.The paper notes that the illegal activity involving bitcoin is inversely correlated to the number of searches for “bitcoin” on Google.“Furthermore, while the proportion of illegal bitcoin activity has declined, the absolute amount of such activity has continued to increase, indicating that the declining proportion is due to rapid growth in legal bitcoin use,” says the paper.The paper also indicates that privacy-focused altcoins, such as Monero and Zcash, may be cutting into bitcoin’s role as the currency of the online black market.The paper notes that it’s currently unclear if bitcoin is leading to an increase in black market activity or if this is simply offline activity moving onto the internet.“By providing an anonymous, digital method of payment, bitcoin did for darknet marketplaces what PayPal did for [eBay] — provide a reliable, scalable, and convenient payment mechanism,” the paper adds.According to the paper, this use case is the underlying value of the bitcoin asset.“Our paper contributes to understanding the intrinsic value of bitcoin, highlighting that a significant component of its value as a payment system derives from its use in facilitating illegal trade.”In addition to implications the online black market could have on the valuation of the bitcoin asset (a claim that is highly speculative as the bitcoin price has continued to see tremendous gains in the face of declining use for illicit payments), the paper adds that this realization also has ethical implications: those who choose to speculate on the bitcoin price may question whether they wish to provide liquidity for a payment system that enables illegal online transactions.This article originally appeared on Bitcoin Magazine (https://bitcoinmagazine.com/).

SEC 'Looking Closely' at Public Company Blockchain Pivots, Says Chairman
https://www.coindesk.com/sec-looking-closely-public-company-blockchain-pivots-says-clayton/

The SEC is investigating companies that have made recent waves in markets with their public pivots toward blockchain.

US Senators Blast Venezuela's Oil-Backed Cryptocurrency Plan
https://www.coindesk.com/u-s-senators-decry-venezuelan-petro/

U.S. Senators Marco Rubio (R.-Fl) and Robert Menendez (D.-NJ) have denounced Venezuela's planned cryptocurrency in a new letter.

Bitcoin Slides More Than 10 Percent to Near $10,000 Level
https://www.coindesk.com/bitcoin-slides-10-percent-near-10000-level/

The price of bitcoin is down more than 10% today, according to CoinDesk's Bitcoin Price Index (BPI).