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We tracked down the original Bitcoin Lambo guy – Cointelegraph Magazine

After the chair of the Federal Reserve, Alan Greenspan, insisted Bitcoin couldn’t be used to buy anything of value in 2013, Jay snapped up a yellow Lamborghini to prove him wrong. We caught up with Jay in Southeast Asia.

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Jay is the Bitcoin OG who created a meme by buying a Lamborghini with the cryptocurrency. He went from a poverty-level existence to enjoying a well-off lifestyle in a gated community thanks to mining Bitcoin in the early days — but not without having to worry for his family’s safety.

As BTC first broke the $1,000 milestone in December 2013, former Chair of the U.S. Federal Reserve Alan Greenspan suggested that Bitcoin could not actually be used to buy anything of value.

That’s when Jay (not his real name), then in his early 30s, and with the help of his wife who is also a Bitcoiner, used almost 217 BTC to purchase what is believed to be the original Bitcoin Lamborghini at the Lamborghini Newport Beach dealership. He then provided the evidence on the anonymous imageboard 4chan.

This proved that Bitcoin had real value — who would accept fake money for a Lamborghini? A meme was born that launched a million other memes.

“It’s kind of overwhelming as an individual — I created a meme.”

An archetypal Bitcoin OG, Jay got his start around 2010. Despite being broke and supporting a family on very low earnings in Southeast Asia, he ended up setting up 20 GPUs, resulting in electricity costs that were six times his rent.

Lambo BTCBuying a Lambo with Bitcoin in 2013.

“I was really poor — I made like $8,500 per year while supporting a family, and babies cost money. I had businesses and savings before, but going to university and starting a family got me damn close to $0,” he recalls, bewildered.

“It’s amazingly hard to HODL bitcoin when you eat pasta every day and make fuck-all, and spend what you do have on computers and miners. But I had that faith, I knew this was world changing.”

Today, Jay lives in a gated community within a small city of under 100,000 in Southeast Asia with his wife, three children, and three dogs — one of them a professionally trained and imposing guard dog whom I had no doubt was ready to rip my face off on command when I visited.

His home actually consists of two houses on two streets, discreetly connected in the middle, creating an understated facade. Whereas the front garage contains “normal” luxury vehicles, the back holds none other than Bitcoin Lamborghini 2.0.

“Sadly because I was so close to $0 and had kids, I had to sell so much BTC so early because I wanted some safety net. I could add at least one zero to my net worth if I had no family — but it’s a paradox because family is why I do it.”

Lambo conventionThe Bitcoin Lambo in Texas at a CryptoWomen meetup in 2014. Supplied.Wealth worries

Jay’s fortune is crowned by a loaded 1,000 BTC Casascius “physical Bitcoin” gold coin of which only a few exist. It is, in fact, the most valuable coin in the world, with a face value of approximately $60 million dollars and a collector premium of many millions more.

This is how we came to meet, as I act as a broker of such rarities and wrote the Encyclopedia of Physical Bitcoins and Crypto-Currencies. For Jay, owning such coins can, however, prove stressful “if someone connects me to holding tens of millions of dollars in what are effectively bearer bonds.” Such coins hold the private key to the stated amount of Bitcoins under a tamper-proof label, making them comparable to bearer bonds, gold or cash.

Such privilege is “difficult to deal with” on the family front, Jay says. Living in a country with a huge wealth disparity, he explains that money can be metaphorically used to build either a bigger wall to separate himself from the masses, or a bigger table in order to bring them to his side. “Honestly, I have to do both, but I want to build a bigger table,” he says. He feels that he faces very real threats, including the kidnapping of family members by international criminals.

“I had issues with some Russian oligarchs in the past, but I don’t think I’m a target now.”

Casascius coinA loaded 1,000 BTC Casascius coin, which Jay bought for $5,000

Still, it’s hard to put worry or paranoia aside — states of mind that Jay considers natural to him. Late one night, as we enjoyed beer and burgers on the edge of town, Jay’s merriness suddenly turned to keen attention as he spied a vehicle loitering near his Lamborghini. “It’s been there over 30 seconds,” he said, appearing still nervous after the car drove off. “They were probably just admiring the car — but what if?” He was visibly uneasy.

Initiation

Jay describes a normal childhood in an average lower-middle-class family in the U.S. midwest. Money was sometimes tight, but basic needs were covered and school was OK. He excelled in geography, which simply came naturally to him without the need to study.

He started working at the age of 12, stapling large boxes together at a warehouse owned by a family friend. The work was repetitive and it was actually illegal to employ such a young child, but Jay was there willingly and feels that he gained a valuable perspective from socializing with business owners at such a young age.

After high school, Jay enrolled in a university close to home to study international relations and computer engineering. He, however, became disillusioned, believing that “a lot of what the university was teaching me was absolute bullshit” and mostly aimed at making him into “a good wage slave.” As he studied money, “it blew my mind that fiat money was based on nothing — it was debt.” He dropped out to run his own book-selling business, which he later sold to a firm that itself went on to be acquired by Amazon.

“The realization of the financial system and money being bullshit helped motivate me to drop out of university in the U.S.A. and do my own thing.”

Jay used the money to travel, first heading to Mongolia, which he felt might be a “missed gem” and might hold economic opportunities. Later in Kazakhstan, he spent time with a group that “trained golden eagles to hunt wolves,” and he heard high praise of Southeast Asia from other passing travelers — knowledge he filed away for later. His money ran low, and he soon returned to the U.S. where he found some success trading oil futures from home.

“When the tsunami hit Southeast Asia on Boxing Day 2004, I realized that sitting around doing the bullshit nothing I was doing was bad and jumped on a plane to help.”

Jay decided to stay and attended a local university, this time choosing to study business administration. Years after graduating and struggling financially, he came across the Bitcoin white paper in 2010 via the infamous Cypherpunks mailing list, where it was discussed in the early days of the cryptocurrency. He had read a book about cryptography before — he loved reading — and the project caught his eye. He found it brilliant, “but I thought there was a very low chance it could become worldwide money — it was too crazy.”

The biggest draw was not the money aspect, but the idea that “this breaks censorship.” He recalls someone putting Bible verses into the blockchain early on — forever indelible. With Bitcoin, anyone could write freely on the wall of eternity.

Celebrating Bitcoin breaking $100 on April 1, 2013. Supplied.The Bitcointalk Forums

The Bitcointalk forum was an interesting place in the very early 2010s, a time when Jay remembers a collection of seemingly “random people with random ideas.” Bitcoin was then a primarily intellectual pursuit, and it attracted socialists and communists in addition to the libertarians who became more associated with the movement’s history.

One idea discussed around that time included the canceling and reissuing of coins after two to five years of inactivity at an address, while others suggested that mining rewards could be adjusted based on individual need or national income. As there was no firmly established value, the Bitcoin idea was considered quite malleable and not necessarily set in stone — it could become anything.

Jay was confused by some of the discourse. “I wasn’t quite well-read in the philosophy then, so I didn’t really understand what the leftists saw in the idea,” he recalls.

The culture of the forum evolved as waves of discourse and new users followed news coverage of Bitcoin. There was a loose “core group” of enthusiasts who considered each other close to the project; “some new people would be added every now and then, and some would leave.” The culture, however, grew more toxic.

Though he first reasons that the toxicity was due to a “Wild West culture” that naturally forms in a gold rush of sorts, Jay notes that people in the contemporary WallStreetBets community, “seem to be incredibly polite and welcoming.” He adds that while he “does not want to say anything bad about anyone,” he assigns some responsibility for the culture upon the Bitcointalk forum’s administration.

“I think that the leadership of a community helps shape it. The person running Bitcointalk was quite inexperienced and pretty much fell into the role — I wonder if it could have been different.”

By contrast, the early Ethereum community seemed friendlier at the time, possibly due to the credit of Vitalik Buterin acting as a visible community leader. Buterin reached out to Jay during the process of launching Ethereum, but Jay was unimpressed.

“I told Vitalik over Skype that Ethereum was going to fail because it was too centralized.”

Despite his concerns, Jay owns some Ethereum and is not an extreme Bitcoin maximalist like some of his peers.

“There shouldn’t be people who hold keys to the internet. It should be entirely math-based, because it can be,” he reasons, referring to what he sees as unnecessary centralization and reliance on human figures within the Ethereum community.

Future directions

Already an old-timer, little more than a decade after stumbling upon Bitcoin, Jay is cautious about newer developments, calling DeFi “definitely risky” due to the risk of the leadership of some projects having the power to unilaterally take control of your funds. He has a similar take on NFTs, saying that “99% of them will become worthless, but some might become cult classics,” a line of thinking that was especially prominent regarding ICOs in the 2017 boom.

All considered, Jay is doing well in life and is focused on his family, but there is a certain unease — a restlessness about him, even unrelated to physical safety.

As with many people who reach their goal, he has everything he could ever dream of, but it’s not exactly clear what he should do next, considering he feels that he has enough to financially cover his descendants to the 4th generation. One thing’s for sure — he’s not looking for fame. “I don’t really want this article out there, but I think overall it is fair and the story should be told,” he says.

“I have reached my goal, so now what? I have accomplished my life goals but I’m not dead yet, so I have to do something. No idea what — but something…”

“It’s kind of overwhelming as an individual — I created a meme.”

Source: https://cointelegraph.com/magazine/2021/06/04/we-tracked-down-the-original-bitcoin-lambo-guy

we-tracked-down-the-original-bitcoin-lambo-guy-–-cointelegraph-magazine

Cointelegraph

Chainalysis raises $100M in Series E funding led by Coatue

Chainalysis secures its second $100 million investment round in three months.

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Chainalysis has secured hundreds of millions of dollars in the second quarter as venture firms allocate more resources to the emerging blockchain sector.

Chainalysis raises $100M in Series E funding led by Coatue

Blockchain analytics company Chainalysis has secured $100 million in Series E financing, bringing its total valuation to a staggering $4.2 billion and highlighting once again the tremendous growth of the cryptocurrency industry.

The round was led by global investment manager Coatue, with additional participation from 9Yards Capital, Altimeter, Blackstone, GIC, Pictet, Sequoia Heritage and SVB Capital, Chainalysis announced Thursday.

Chainalysis said the funds will go toward expanding its blockchain data capabilities, which includes investing in new data tools, software and APIs.

“We believe blockchain data is the asset that can help public and private sector organizations understand the risks and opportunities surrounding this asset class and promote its adoption safely and successfully,” the company said.

Chainalysis’ valuation has more than doubled in the last quarter thanks to several strategic investments. As Cointelegraph reported, the company closed out a $100 million Series D round in March led by Paradigm, a crypto-focused investment firm. At the time, Chainalysis’ director of communications Maddie Kennedy told Cointelegraph that the funds will be used to expand the company’s enterprise data offering.

Related: Crypto-finance company Amber Group valued at $1B following $100M raise

Mega-million-dollar funding rounds have become commonplace in the cryptocurrency industry over the last six months. Venture firms have poured billions into crypto startups this year alone, with the likes of Andreessen Horowitz going a step further by announcing a new $2.2 billion crypto venture fund.

What’s more, dealmaking seems to be happening irrespective of current market conditions, which marks an important evolution from the 2017 bull market that saw venture funding dry up once the initial coin offering mania faded.

Source: https://cointelegraph.com/news/chainalysis-raises-100m-in-series-e-funding-led-by-coatue

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Crypto miners eye cheap power in Texas, but fears aired over impact on the grid

Can Texas meet the electricity demands of migrating Chinese Bitcoin miners?

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The recent crackdown on crypto mining in China has seen concerns expressed over the potential impact a hashrate migration could have on Texas’ unreliable electricity market, as an increasing number of dislocated miners eye the Lone Star State.

Texas’ abundant sources of renewable energy and highly deregulated power grid make the state an obvious choice for migrating miners from China and elsewhere, with 20% of Texan electricity being generated by wind as of 2019.

Speaking to CNBC, Brandon Arvanaghi, a former security engineer at crypto exchange Gemini, predicted Texas will see “a dramatic shift over the next few months” as miners look to set up shop.

“We have governors like Greg Abbott in Texas who are promoting mining. It is going to become a real industry in the United States, which is going to be incredible,” he said, adding:

“Texas not only has the cheapest electricity in the U.S. but some of the cheapest in the globe.”

Castle Island Ventures’ founding partner, Nic Carter told CNBC that half of the world’s hashing power could ultimately exit China’s borders and will need new homes, stating:

“Every Western mining host I know has had their phones ringing off the hook. Chinese miners or miners that were domiciled in China are looking to Central Asia, Eastern Europe, the U.S., and Northern Europe.”

Global hash rate has fallen by one-third since early May following reports that China’s mining industry would be subjected to stricter supervision.

But is the Texan power grid up to the challenge of providing power for an influx of more crypto miners? The Electric Reliability Council of Texas (ERCOT) has just requested that Texans curb their electricity usage amid the recent heatwave that saw many residents turning up their air conditioners earlier this week.

Roughly 12,000 megawatts of generation capacity was offline as of Monday — enough to power 2.5 million homes. ERCOT described the scale of forced outages as “very concerning.”

The regulator warned that a failure to heed the request could result in a repeat of the widespread winter power failures that left 69% of Texans without electricity, and roughly half without water in February. According to Buzzfeed, February’s outages could have resulted in up to 700 deaths in the state.

Angela Walch, a Texas research associate at University College London’s Centre for Blockchain Technologies, tweeted her concerns regarding the share of Texas’ electricity being devoted to Bitcoin mining, emphasizing that her family has been “asked to reduce our air conditioning use, not run washing machines & dryers, etc.”

Obviously, Bitcoin is not the sole cause of this cluster*^% that our poor political leadership in Texas has caused.

But, I am curious to know the portion of the grid it uses. Maybe Bitcoin miners are the first to be shut down in times of grid stress.

— Angela Walch (@angela_walch) June 15, 2021

However Tierion CEO Wayne Vaughan responded by asserting that much of the electricity used to power Texan mining operations comprised stranded resources that “would never be able to reach your home to power your appliances.”

Others argued that wholesale Bitcoin mining operations could actually alleviate Texas’ power issues, with Texas’ seasonal surges in electricity demand incentivizing miners to sell power back to the state’s grid that otherwise go uncaptured.

In September 2020, the Peter Thiel-backed crypto miner Layer1 in West Texas reported it had reaped profits exceeding 700% by selling renewable electricity back to the grid amid surging summer demand.

While up-to-date data for global hashrate distribution is not available, the Cambridge University’s Bitcoin Electricity Consumption Index (BECI) estimates that China represented 65% of the world’s hashing power as of April 2020.

Earlier this month, district regulators in Western Xinjiang and Yunnan issued notices mandating the suspension of virtual currency mining enterprises. BECI estimates the two regions account for 40% of the country’s hash rate.

Castle Island Ventures’ founding partner, Nic Carter told CNBC that half of the world’s hashing power could ultimately exit China’s borders and will need new homes, stating:

Source: https://cointelegraph.com/news/crypto-miners-eye-cheap-power-in-texas-but-fears-aired-over-impact-on-the-grid

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Bitcoin price hits $40K as Paul Tudor Jones slams Fed inflation claims

Bitcoin price action is back at $40,000 as Paul Tudor Jones recommends a 5% BTC portfolio.

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Bitcoin (BTC) passed $40,000 on June 14 as a consolidation period snapped to unleash a solid breakout.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingViewBTC price breaks out past $40,000

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD gaining 3% in under an hour, reaching $40,500 on Bitstamp.

The largest cryptocurrency capitalized on upside which resulted from a new positive tweet from Elon Musk over possible acceptance by Tesla in the future.

Earlier, Cointelegraph reported on traders betting on a leg up to around $47,000 before a correction.

A look at buy and sell positions on major exchange Binance showed support at $38,000, wit resistance at $40,500 the next hurdle for bulls.

Buy and sell levels on Binance as of June 14. Source: Material Indicators/TwitterTudor Jones advocates 5% BTC allocation

Bitcoin reached a $2 trillion market cap because of a “dichotomy” in Federal Reserve policy which “questions” its credibility, says famous trader Paul Tudor Jones.

In an interview with CNBC on June 14, the founder of Tudor Investment Corporation sounded the alarm over advancing inflation.

After last week’s consumer price index (CPI) report showed that U.S. inflation had hit a 13-year high, Bitcoin’s deflationary nature has rarely looked so appealing.

For Tudor Jones, the idea that higher inflation is just temporary due to recent events, as suggested by the Fed and central banks in general, is a myth.

“It’s somewhat disingenuous to say, for them to say, that inflation is transitory,” he told CNBC’s Squawk Box segment.

Today’s environment is entirely different to that which saw episodes of inflation in the past, such as 2013, and as such, there is little sense in the Fed applying the same forecasts.

CPI was much lower then, Tudor Jones noted, while now, unemployment and jobs also roughly equal each other.

Related: Paul Tudor Jones says Bitcoin is ‘like investing early in Apple or Google’

Meanwhile, gold and Bitcoin have provided a refuge for many. Despite the precious metal vastly underperforming Bitcoin in terms of gains, it remains near record highs.

“When you look at the Fed today and the Fed back then, you wonder how can you have such wildly different policy views on what constitutes the right levels for employment, the right levels for inflation,” he continued.

“How can you have that with an eight-year timeframe? It’s almost like a split personality and you wonder why Bitcoin has a $2 trillion market cap and gold’s at $1,865 an ounce. And the reason why is you have this dichotomy in policy that again questions — questions — the institutional credibility of something.”

Ultimately, a 5% Bitcoin allocation is one of the only things he advocates to those seeking portfolio advice.

“I say, ‘OK, listen, the only thing I know for certain is I want to have 5% in gold, 5% in Bitcoin, 5% in cash, 5% in commodities at this point in time,'” he added.

A look at buy and sell positions on major exchange Binance showed support at $38,000, wit resistance at $40,500 the next hurdle for bulls.

Source: https://cointelegraph.com/news/bitcoin-price-hits-40k-as-paul-tudor-jones-slams-fed-inflation-claims

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