The outspoken CEO who is synonymous with outrageous comments especially when discussing the top crypto coin is back at it again. A few days after claiming that BTC has real value, he may have made his most sensationalist statement ever by claiming Bitcoin is controlled by China before insinuating that no nation would be willing accept a Chinese controlled currency.
Brad Garlinghouse, the Ripple CEO was speaking during an interview at the 2018 Stifel Cross Insight Conference that was held in Boston. These comments came as a shock to many attendees who were probably hoping to hear more about the third largest crypto coin by market cap.
If we have learned anything with Garlinghouse over the years, is you can always count on him to throw a few jabs at XRPs main decentralized rival. During the interview with Lee Thompson, the CEO saw it fit to discuss why Bitcoin wasn’t fit to be the dominant currency of the world.
“A number of prominent people -even Steve Wozniak, has said that he sees a world where Bitcoin is the primary currency. I think that’s absurd. I don’t think that any major economy will allow that to happen. By the way, it doesn’t make sense.”
It’s not only Wozniak who thinks this but also Jack Dorsey the CEO of Twitter and Square also shares the same sentiment. Dorsey actually foresees this happening within a decade.
He goes on to comment about the blockchain and the influence he believes its set to have even though he is quick to point out that there is a lot of hype surrounding the distributed ledger technology and he doesn’t see it disrupting the banking world.
He goes on to compare XRP to BTC saying:
“This is how liquidity will be managed in the future. Bitcoin today takes 45 minutes to settle a transaction. Banks will use what is efficient and cheaper. And if you deliver a better product at a better price …they will use it.”
He also talks of an underreported story which is Bitcoin is controlled by China.
“Bitcoin is really controlled by China. There are four miners in China that control over 50% of Bitcoin. How do we know that China won’t intervene? How many countries want to use a Chinese-controlled currency? It’s just not going to happen.”
Whether Bitcoin is controlled by China or not, what is clear is that Mr. Garlinghouse will stop at nothing when it comes to bashing the top crypto coin.
Is Bitcoin really controlled by China? Share your thoughts in the comment section below.
Korean Crypto Exchanges Update Terms to Accept Liability for Hacks
A number of South Korean cryptocurrency exchanges have been forced to update their terms and conditions to accept liability for potential hacks and service issues.
According to a report by the Yonhap News Agency, South Korea’s antitrust watchdog, the Fair Trade Commission, said Monday that five exchanges in total had made the change after it issued a corrective recommendation.
Bithumb, an exchange that has been hacked twice in a year, is included in the five exchanges, the report says. Last June, the platform lost roughly $31 million in cryptocurrencies, and, in May 2019, a possible insider job saw around $20 million in the company’s holdings of XRP and EOS disappear.
Previously the exchanges’ T&Cs had stated that they would not compensate users if not found to be willfully or grossly negligent.
After it’s 2018 hack, Bithumb pledged to refund users that lost cryptos, despite its T&Cs.
In January, only a third of inspected cryptocurrency exchanges got a full pass in a government security audit.
At the time, several government agencies inspected a total of 21 crypto exchanges from September to December 2018, examining 85 different security aspects. However, only 7 – Upbit, Bithumb, Gopax, Korbit, Coinone, Hanbitco, and Huobi Korea – cleared all the tests.
Nouriel Roubini Says Facebook’s GlobalCoin Has ‘Nothing to Do With Crypto’
Noted economist and cryptocurrency skeptic Nouriel Roubini has said Facebook’s soon-to-be unveiled cryptocurrency, reportedly called GlobalCoin, is not really crypto.
In a conversation with CoinDesk, Roubini – also nicknamed “Dr. Doom” for his prediction of the financial crash in 2007 and 2008 – said:
“It has nothing to do with blockchain. Fully private, controlled, centralized, verified and authorized by a small number of permissioned nodes. So what is crypto or blockchain about it? None.”
Indeed, according to recent reports, the social media giant has signed up more than a dozen backers for its GlobalCoin cryptocurrency, a stablecoin apparently to be backed by a basket of fiat currencies. Each of the new backers – which reportedly include Visa, Mastercard, PayPal and Uber – will invest roughly $10 million in the project as part of a governing consortium for the cryptocurrency.
While he acknowledged that specifics of the project are not yet known (but are expected to be revealed in a white paper Tuesday), Roubini suggested that it is unlikely that GlobalCoin would use common blockchain technologies such as proof-of-work or proof-of-stake. “Why would they?” he said.
And while many in the crypto community have also criticized those calling Facebook’s token a cryptocurrency, the economist denied that he shared any common ground with the “crypto faithful.”
He told CoinDesk that he has gone on record as saying that “enterprise DLT [distributed ledger technology] is blockchain in name only … so some crypto faithful may agree on that.”
Roubini concluded by saying:
“But in my opinion, public decentralized trustless blockchain is a pipe dream … so we disagree on 99% of [the] substance.”
Click here to see our comprehensive guide to Facebook’s GlobalCoin.
Bitmain Lawsuit Seeks Millions from Staffers Who Founded Rival Mining Pool
- Bitmain is suing three former employees who started Poolin, a rival to the chip manufacturer’s BTC.com mining pool.
- The company is seeking $4 million in damages, alleging the Poolin co-founders violated their non-compete agreements; The former employees say Bitmain voided the non-compete by failing to pay them on time as agreed.
- The case offers a rare window on Bitmain’s inner-workings and employment practices.
Cryptocurrency mining giant Bitmain is locked in a legal battle with three former employees who started a rival mining pool.
Bitmain, the owner of BTC.com, the world’s top bitcoin mining pool by hash rate, is suing the co-founders of Poolin, the seventh-largest pool, for allegedly violating a non-compete agreement – and it’s demanding $4.3 million in damages from one of them.
For their part, the three Poolin co-founders say they were no longer bound by the non-compete, since it was Bitmain that invalidated their contracts for failing to pay compensation on time as agreed.
The case offers a rare window on the inner workings and employment practices of Bitmain, one of the blockchain industry’s largest and most powerful companies.
Bitmain makes most of its money from selling mining equipment, according to financials disclosedduring the firm’s abortive attempt to go public. But it also operates mining pools, essentially software products miners use to split rewards. This service accounted for $43.2 million of Bitmain’s revenues in the first half of 2018, the most recent period for which data is available, compared to $2.7 billion of hardware sales during the same period.
There are six lawsuits pending in the Beijing Haidian District court. The three Poolin co-founders – CEO Zhibiao Pan; COO Fa Zhu; and CTO Tianzhao Li – each sued Bitmain preemptively, seeking to be released from the non-compete.
Bitmain, in turn, countersued each of them, claiming they caused significant losses to the company after leaving by operating a directly competing pool. Aside from seeking damages, Bitmain asked the court to order the Poolin executives to resume honoring the non-compete agreement.
The dispute has largely escaped public notice, but video footage recently became available of an April 30 hearing where the two sides made their respective cases. The video only showed discussion of the case between Pan and Bitmain. As such, exact details regarding the other two former employees were not clear until now.
The birth of BTC.com
The main dispute in these cases boils down to the roles the three Poolin founders played in Bitmain’s flagship mining pool BTC.com, and the non-compete agreements they signed when they decided to leave Bitmain.
In a WeChat post written by Zhu and published by a Chinese crypto media outlet in January commemorating bitcoin’s 10-year anniversary, he briefly recounted the trio’s work at Bitmain.
Zhu wrote that back in 2015, the three – while still focusing on Bitmain’s original mining pool, Antpool – proposed to launch BTC.com as a parallel service within Bitmain.
The idea was not initially supported by Bitmain, Zhu wrote, and the three had to develop and roll it out on their own using Pan’s own capital at the beginning. In 2016, Pan open-sourced the code of BTC.com, which helped lower the threshold for anyone that’s interested in launching a mining pool business.
The three collaborators left Bitmain around mid-2017. Under the non-compete agreement, Bitmain would pay monthly compensation to Pan after his departure of about $2,780 for 24 months, and in return, prohibit him from specifically operating a bitcoin mining pool. The compensation for the other two under such agreements was not clear from the court video.
After their departure from Bitmain, Pan, Zhu and Li launched Poolin as mining pool for multiple cryptocurrency assets in November 2017. They didn’t launch a pool service for bitcoin until July 2018, when they mined Poolin’s first block of the largest cryptocurrency by market cap.
It has since grown into one of the largest bitcoin mining pools. Based on facts agreed on by both sides of the case and presented to the court, as of Feb. 14, Poolin was the third biggest operation by hash rate in the world, after BTC.com and AntPool. All told, miners connected to Poolin had mined 26,825 bitcoin, worth $220 million at today’s prices.
Notably, Poolin’s share of the hash rate has dropped since then to about 8.2 percent, and its rank has fallen to No. 7, based on the current distribution of bitcoin’s network computation.
Bitmain cries foul
Subsequently, Bitmain alleged that such conduct violated the non-compete agreement, and demanded that Pan return all the paid compensation, as well as a fine of $667,000 for reneging.
Further, Bitmain’s lawyers argued at the hearing that the revenues Poolin generated from mining the 26,825 bitcoin should be considered a profit made by violating the agreement, which should be paid back as a loss to Bitmain.
“Based on the agreement, if it’s difficult to calculate all the direct and indirect loss [for Bitmain due to Poolin’s violation], then the loss should be calculated based on the profits made by the violating party,” one of the lawyers said.
“As of Feb. 14, the total profits for Poolin would be 26,825 bitcoin times 4 percent, which was their handling fee, and times bitcoin’s price at the time, which was 24,518 yuan [$3,500],” the lawyer argued.
That, added to the alleged fine, would amount to more than 30 million yuan, or about $4.3 million.
Poolin pushes back
But lawyers representing the Poolin founders argued to the court that Pan was not obligated to honor the agreement and thus should not be ordered to pay damages.
Pan’s lawyers said in the hearing that Bitmain failed to pay Pan the agreed-upon compensation on time, citing lines from the agreement that if Party A (Bitmain) did not pay the compensation within a month since Party B (Pan)’s departure, it would mean Party A voided its obligation.
Further, Pan’s lawyers argued the transaction fee Poolin received doesn’t necessarily translate to profits of the company because until the date of the hearing, the firm had not turned a profit. In addition, the fact that Poolin successfully mined 26,825 bitcoin also does not necessarily mean it would be a loss for BTC.com, the lawyer said.
“There are a lot more bitcoin mining pools in this network. It’s not just Poolin v.s. BTC.com. Even if Poolin didn’t operate its bitcoin mining pool, it does not necessarily mean Bitmain will be able to mine those coins.” the lawyer argued.
So far, it’s not yet clear from the public record whether the court has made a judgment or when it will. The judge asked at the end of the hearing if there was a way for the two parties to settle the case. Lawyers from Bitmain declined to discuss that at the court and suggested waiting until after the hearing adjourned.
Bitmain declined to comment or provide further clarification on the status of the cases. Poolin executives did not respond to CoinDesk’s inquiries by press time.
This is not the first time Bitmain has had a legal dispute with former senior executives. In 2017, it suedZuoxing Yang, a former Bitmain chip design director who left to launch Bitewei, a rival mining equipment manufacturer, over patent rights infringement.
Bitmain initially demanded damages of 26 billion yuan, or $3.8 billion, but later reduced the claim to $380,000. In 2018, the court in Xinjiang that oversaw the case dismissed Bitmain’s complaint after Yang successfully revoked Bitmain’s patent over the technology in dispute.