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This author explains our obsession with cryptocurrency

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Frederick Kaufman’s money plot

Source: Other press

What is money Why do we need it?

These are some of the big questions that writer Frederick Kaufman explores in his book The Money Plot: A History of Currency’s Power to Enchant, Control, and Manipulate, published in the middle of the pandemic.

Kaufman, a journalism and English professor, is interested in what we project onto money, from our cravings for abundance and freedom to – most of all – security.

The book comes at a time when our most basic understanding of money is being challenged. (When I hear the word, I still imagine cash, not bitcoin. What do you imagine when you imagine bitcoin?)

One way to get an idea of ​​what’s coming next is to look back. And if you read Kaufman’s book tracing the history of money, you’ll see how Bitcoin isn’t all that different from the pearls that were used as currency 40,000 years ago.

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I recently interviewed Kaufman about his new book. (Disclosure: I was enrolled in one of his courses at the Craig Newmark Graduate School of Journalism at CUNY in 2017.)

The following exchange has been compressed and edited for the sake of clarity.

Annie Nova: How has money changed the most?

FK: Primitive money is very material: it’s a feather, it’s a pearl. Over time, it becomes very metaphorical – a coin, paper money. Finally, of course, there is very little material money in the world. Only about 5 to 10% of the money in the world is in any material form. And then you could say the endgame is cryptocurrency. It has all the properties of primitive money, it is our security, except that it has no material parallel.

Frederick Kaufmann

Photographer: Anthony Tafuro

AN: Why are we looking for money for security?

FK: In the Middle Ages, Christians begin to define the future and that will be the end of the world and the apocalypse. Everything counts on that. This turns the trading culture into that focus on expiration dates, and think of money: it’s all about expiration dates. It’s about when you get paid. It’s when your quarterly report is due. It’s all retirement planning. And of course a mortgage is based on when it expires? We insure the future and gain some control over it. That is the essence of what money is.

AN: But there is a cost, right? A mortgage is security, but also a 30-year term.

FK: It’s one of the ironies of money. We create this fiction and then we get caught by it.

AN: Is it a coincidence that we are so much more interested in cryptocurrencies during a pandemic?

FK: If you look back on the history of apocalyptic moments, people fly towards safety. And that’s money. Some people see their security blanket as gold, others as crypto. Some see it as cash. We are also seeing increased cash holdings during the pandemic. All of this points to the real essence of money: security, to ensure that we can maintain our status, to ensure that the narratives we have about ourselves can continue into the future.

Why are you using the money the way you are using it? It’s because you define a narrative of what you would like to be in the future.

AN: What if people’s stories are disturbed?

FK: If you really check, why do you have a retirement account? why do you work? Why are you using the money the way you are using it? It’s because you are defining a narrative about what you would like to be in the future, and if that gets cut off for lack of money, it’s traumatic. And we see this country going through an enormous period of trauma right now.

AN: What do cryptocurrencies have in common with the primitive forms of money you write about?

FK: Primitive money was more of a talisman than a store of value or a medium of exchange. The rings and pearls had magical powers to bring the wearer safely into whatever lay in front of them. Likewise, cryptos play the role of primitive amulets, especially those that have no value, like Dogecoin, but still promise luck. It is interesting that when Europeans first settled down, they forgot to bring enough money with them. So, much like those mining Bitcoin, they started making their own wampum.

AN: Why do you think there is so much skepticism about cryptocurrencies?

FK: Money is a story we all believe in. Wall Street told this story, trying to predict its end before the rest of us know the end. Of course, bankers get embarrassed when a new group of shamans and fortune tellers tell a new story with a new ending.

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Cryptocurrency

Orlando residents launch cryptocurrency group to educate and give back to international communities

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From donations to food drives, there are many ways you can give back to communities in need but three Orlando residents are turning to digital tools to support low-income families in developing countries. Chris Delgado, Fabian Kumpusch and Vance Fundora share a vision of rebuilding and impacting communities around the world.”Where can our dollar literally go the furthest?” co-founder of ‘Crypto Impact’ Vance Fundora said. The answer led them to the way they grow their own personal finances – cryptocurrency which is a type of currency that uses digital files as money. The men recently launched their group ‘Crypto Impact’ where they’re traveling abroad to help communities in poverty. “You can literally send money to an individual in need through blockchain technology where banks are shut down and you can’t really wire money like we do here in the states and those countries don’t have a cell or Venmo type thing,” co -founder of ‘Crypto Impact’ Chris Delgado said. “Normally when people donate they’re donating to a bigger cause where they’re providing food for disaster relief,” Delgado said. “This where ‘Crypto Impact’ comes into play we’re delivering specific needs to individuals and we’re there on the ground.”When WESH 2 spoke with Delgado and Fundora, their third business partner was in Vietnam where he was connecting people with clothing, food and clean water. It’s the start of future international projects that will all be funded by digital coins.”It’s just a new industry and it’s a lot of opportunity across the board in terms of technology available,” Fundora said. Being on the ground with the people they’re giving back to is vital for the men so they can educate and raise awareness. “To show not only the beauty behind crypto and bring mass adoption, but also to give in other countries where you can’t necessarily bring in hundred, 200 or 300 hundred dollars but with crypto you can,” Delgado said. The friends have plans to travel and spread ‘Crypto Impact’ to other developing countries in the future.

From donations to food drives, there are many ways you can give back to communities in need but three Orlando residents are turning to digital tools to support low-income families in developing countries.

Chris Delgado, Fabian Kumpusch and Vance Fundora share a vision of rebuilding and impacting communities around the world.

“Where can our dollar literally go the furthest?” co-founder of ‘Crypto Impact’ Vance Fundora said.

The answer led them to the way they grow their own personal finances – cryptocurrency which is a type of currency that uses digital files as money.

The men recently launched their group ‘Crypto Impact’ where they’re traveling abroad to help communities in poverty.

“You can literally send money to an individual in need through blockchain technology where banks are shut down and you can’t really wire money like we do here in the states and those countries don’t have a cell or Venmo type thing,” co -founder of ‘Crypto Impact’ Chris Delgado said.

“Normally when people donate they’re donating to a bigger cause where they’re providing food for disaster relief,” Delgado said. “This where ‘Crypto Impact’ comes into play [because] we’re delivering specific needs to individuals and we’re there on the ground.”

When WESH 2 spoke with Delgado and Fundora, their third business partner was in Vietnam where he was connecting people with clothing, food and clean water.

It’s the start of future international projects that will all be funded by digital coins.

“It’s just a new industry and it’s a lot of opportunity across the board in terms of technology available,” Fundora said.

Being on the ground with the people they’re giving back to is vital for the men so they can educate and raise awareness.

“To show not only the beauty behind crypto and bring mass adoption, but also to give in other countries where you can’t necessarily bring in hundred, 200 or 300 hundred dollars but with crypto you can,” Delgado said.

The friends have plans to travel and spread ‘Crypto Impact’ to other developing countries in the future.

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Cryptocurrency

Bitcoin is ‘not immune’ from stock market volatility (Cryptocurrency:BTC-USD)

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MicroStockHub/E+ via Getty Images

Bitcoin (BTC-USD) has often been hyped as an inflation hedge or as an alternative investing class, an opportunity to diversify a portfolio. However, evidence continues to mount, especially in the recent market downturn, that crypto holds a high correlation with stocks (SP500).

This connection is evidenced by the fact that both bitcoin and equities grinded higher in the easy money era of 2020-2021, and now both are facing cyclical downturns as financial conditions tighten and liquidity dries up.

“The correlation between bitcoin and equity indices has remained high and will continue to do so unless bitcoin becomes widely used as a medium of payment – which looks unlikely to happen soon,” Morgan Stanley analyst Sheena Shah wrote in a note May 10.

For some context, the rolling 120-day correlation between the S&P 500 index (SP500) and bitcoin (BTC-USD) was recently standing at 0.60, the highest reading since the series began in 2011, Charles Schwab Chief Investment Strategist Liz Ann Sonders wrote in a Twitter post May 10. In other words, bitcoin’s price action resembles that of stocks and therefore risk assets. Take a look at the chart below to further grasp how bitcoin has fared Y/Y with the S&P 500 as well as S&P volatility, which is inversely correlated with the major stock index.

For a macro perspective, as central banks across the globe pivot to tighter monetary policy (some more aggressive than others) in an effort to dull widespread inflationary pressures, global money supply growth continues to decelerate from its peak in Feb. 2021, Shah noted, adding that bitcoin’s (BTC-USD) market cap growth topped a month later in March 2021, implying that global liquidity and bitcoin could share a connection.

Note that in 2020, speculative assets like bitcoin soared in price in the wake of extraordinary accommodative monetary/fiscal policy and surging money supply. Stifel recently predicted for bitcoin to reach as low as $15K as shrinking M2 money supply growth, a broad measure of money in circulation, “should sharply weaken Bitcoin.”

Looking at the BTC-stocks correlation from a different lens, retail investors used to be the dominant cryptocurrency trader around four years ago, but now “the largest proportion of daily crypto trading volumes is from crypto institutions, much of which comes from them trading with each other,” Shah explained.

This dynamic has contributed to bitcoin’s (BTC-USD) strong bond with equities since those institutions are sensitive to the availability of capital and therefore interest rates, she added.

Commentary: “We’ve definitely seen [bitcoin] trade more in line with stocks and more in line with the Nasdaq and tech stocks, in particular, over the last few quarters,” Coinbase (COIN) CFO Alesia Haas told CNBC’s Squawk Box in an interview May 12. “Lots of institutional money has come into crypto, and with the broader volatility that we’re seeing, we’ve seen strong correlations,” she added.

Take a look at SA contributor’s The Digital Trend’s bullish take on bitcoin.

Earlier this past week, (May 12) Bill Miller said he hasn’t sold any bitcoin.

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Cryptocurrency

Pros, cons of cryptocurrency mining in upstate New York

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Last month, the New York state Assembly voted to pass Democratic Assemblymember Anna Kelles’ two-year moratorium on new cryptocurrency mining. The idea behind the bill is to give the New York State Department of Environmental Conservation the time to conduct an environmental impact study of the practice.

The bill would prevent new permits from being issued for a very specific kind of cryptocurrency operation, known as carbon-base fueled, proof-of-work mining operations, that use behind-the-meter energy.

The bill still needs to pass in the state Senate and be signed by Gov. Kathy Hochul before it can become law.

The allure of cryptocurrency is that by using blockchain technology, financial transactions are instantaneous, secure and very difficult to trace. But there is a downside to proof-of-work mining: it takes enormous amounts of energy to run the thousands of computers used to “mine” coins.

This is why Assemblymember Kelles said her bill is so narrowly focused.

“This particular type of validation of cryptocurrencies is called proof-of-work, which is synonymous with cryptocurrency mining. There is no other kind of method that is called mining. It has been found across the globe to use phenomenal amounts of energy in comparison to other forms of validation such as proof-of-stake, for example,” Kelles told Capital Tonight.

Cryptocurrency “mining” isn’t mining in the usual sense of the word. It’s millions of computers competing with each other to validate transactions. The more computers a miner has, the greater the advantage — and the more energy used.

Upstate New York is attractive to cryptocurrency miners for a variety of reasons, including abundant clean air and water, relatively cool temperatures and cheap hydroelectric energy with which to power computers.

Upstate New York also has several old power plants that are ready-made to house these mining operations, some of which are being purchased by publicly-traded companies. These companies are re-purposing the power plants to make their own energy “behind the meter,” meaning it is produced and consumed on-site.

“We are a prime target,” Kelles said of upstate.

One of the largest cryptocurrency mining operations in upstate New York is Greenidge Generation, located on the shores of Seneca Lake in the Finger Lakes region. Critics, including Kelles, argue that the crypto-mining taking place at Greenidge is hurting the already established agritourism and wine industry there.

The Greenidge Generation bitcoin mining facility is in a former coal plant by Seneca Lake in Dresden. (AP Photo)

The assembly member also argues that cryptocurrency mining is not a big job creator.

“Mining itself is not a huge job creator because the computers, first of all, are doing all the work. But secondly, what’s really important, is that the algorithm they are running is very simple. It’s not like the algorithm for the Skype app… and therefore it doesn’t take a massive amount of engineering jobs…to maintain,” Kelles said.

“[Cryptocurrency mining] is a very small fraction of jobs compared to [agritourism],” Kelles said.

But cryptocurrency advocates, including Republican Assemblyman Robert Smullen, argue that New York is a world leader in financial services, so why shouldn’t the state lead when it comes to cryptocurrency as well?

Smullen also takes issue with Kelles’ characterization of the jobs created by such operations.

“These are good jobs because they’re electrical jobs, essentially, is what they are, and they’re running all of these facilities,” Smullen explained. “This is a new form of advanced manufacturing.”

Indeed, the union IBEW is a supporter of cryptocurrency mining.

As for Greenidge Generation in particular and its plan to expand from the 17,000 computers it has operating currently, Smullen isn’t concerned.

“[Greenidge] is probably one factory in one small part of one town so I don’t think it’s disrupting any agritourism brand for the beautiful area of ​​the Finger Lakes,” Smullen told Capital Tonight.

What the assemblyman is very concerned about is the possibility of a two-year moratorium on new cryptocurrency operations.

“In this industry, two years is literally light speed in the blink of an eye,” Smullen said. “This industry, financial technical things, they can go anywhere.”

The key, according to the assemblyman, is getting miners to come to New York, and then keeping them here.

“This is commerce that’s very important to the future of financial services industry. During the pandemic, we saw that jobs in New York City, many of them could be done from anywhere. My concern then and my concern now is that we’ve set up a regulatory environment in this state which positively incentivizes the financial services industry, which is going to evolve over time with technology to stay in New York state,” Smullen said.

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