Big banks appear to disagree on cryptocurrency

Leo Zhang

By Leo Zhang

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Editor's note

Everyone remembers when JPMorgan CEO Jamie Dimon said bitcoiners were stupid. And when Wells Fargo CEO said it was a pyramid scheme. And when Citigroup, JPM, and Bank of America cut off cryptocurrency purchases initiated on their credit cards. Is cryptocurrency so easily dismissed?

In recent SEC filings, Bank of America, JPMorgan, and Goldman Sachs have acknowledged that the continued popularity of cryptocurrency among consumers could become a risk to certain lines of business. (See Wednesday's post below.)

For their part, Goldman Sachs don't appear to be haters. It is an investor in Circle, the payments app and cryptocurrency trading desk, which this week acquired crypto-exchange Poloniex for a reported $400 million.

Late last year, Goldman's Lloyd Blankein said about bitcoin: "Something that moves up and down 20 percent in a day doesn’t feel like a currency, doesn’t feel like a store of value. If it works out--and it gets more established, and it trades more like a store of value, and it doesn’t move up and down 20 percent, and there is liquidity to it--we’ll get to it.

This week's news recap

Monday: Circle acquires cryptocurrency exchange Poloniex
Tuesday: Digital Currency Group acquires a stake in Silvergate Bank
Wednesday: JP Morgan joins Bank-of-America and Goldman in admitting cryptocurrency is a 'risk' to its business
Thursday: SEC pressure on ICOs puts perceptions of T-zero in jeopardy
Friday: Researchers explore fundamental vulnerabilities of Ethereum

Further reading this week

Chipmakers test ferroelectrics as a route to ultralow-power chips
(IEEE Spectrum, by Katherine Bourzac)

"Many in industry are skeptical about the benefits of ferroelectrics. Still, the IEDM meeting made it clear that semiconductor companies are now paying attention. Researchers from GlobalFoundries presented data on the performance of ferroelectric-frosted transistors made using their 14-⁠nanometer manufacturing technology."

Tyler Winklevoss: Bitcoin is gold, Ether is oil, Litecoin is a testnet
(Investopedia, by David Floyd)

"Winklevoss continued the metaphor, describing ether as a digital oil that fuels a protocol layer – the ethereum blockchain – on top of which decentralized applications using their own tokens can be built."

Is Bitcoin of waste of electricity? Or something worse?
(NYT, by Benyamin Appelbaum)

"Instead of smelting aluminum, however, the company plans to turn that power into Bitcoins."

Embattled Rabobank unveils 'cryptocurrency wallet' in a major u-turn
(Bitcoinist, by Wilma Woo)

"Asked whether the website, which consists of only one page and a signup form, was genuine, social media source confirmed that more information was forthcoming. The concept going ahead, however, was not certain."

Github survived the largest DDoS attack recorded
(Wired, by Lily Hay Newman)

"Akamai defended against the attack in a number of ways. In addition to Prolexic's general DDoS defense infrastructure, the firm had also recently implemented specific mitigations for a type of DDoS attack stemming from so-called memcached servers."

Uber co-founder Garrett Camp is creating a new cryptocurrency
(Techcrunch, by Fitz Tepper

"The currency is called Eco, and Camp wants it to be a digital global currency that can be used as a payment tool around the world for daily-use transactions."

*Image courtesy of Wikipedia.