Crypto Pirates

In the year 2017, Bitcoin and Bitcoin Cash parted ways.

Today, the top ten crypto assets by market capitalisation are all positive.

Bitcoin (BTC) rose 1% to US$37,272 in the last 24 hours.

As you move down the list, you'll see that not all of the coins are increasing in value.

Bitcoin Cash, the 28th most valuable cryptocurrency, has remained unchanged in the last 24 hours, trading at US$277.

While every crypto trader knows what Bitcoin is, not everyone knows what Bitcoin Cash is.

The Motley Fool contacted Ray Brown, a market analyst at CoinSpot, an Australian cryptocurrency exchange, with this in mind.

What caused Bitcoin Cash to emerge?

First and foremost, we were curious as to how Bitcoin Cash came to be.

According to Brown,

While Bitcoin Cash resembles the original Bitcoin in certain ways, it is a completely separate cryptocurrency that was 'forked' from Bitcoin.

It was founded in 2017 by a portion of the Bitcoin community with the goal of exploiting Bitcoin's strong features while addressing some of its shortcomings, such as scalability.

Bitcoin Cash has gained traction and has established itself as a serious competitor to other cryptocurrencies. It hasn't, however, come close to reaching Bitcoin's level of popularity.

Why is scalability in cryptography being pushed so hard?

So, why did the Bitcoin community desire to improve the scalability of the world's first crypto?

Brown believes that:

Bitcoin was intended to be a digital currency when it was first developed. The processing of transactions became slower as more people invested. This is partly owing to the fact that the blocks are only 1MB in size, leaving little possibility for scalability. As a result, Bitcoin has evolved into more of a store of value than a convenient means of making daily transactions.

So, has Bitcoin Cash been successful in overcoming these flaws?

"Bitcoin Cash was created to address these constraints, and it has done so in part by incorporating a maximum block size of 32MB," according to Brown.

He then went on to say,

This speeds up transactions and expands the number of people who can use it simultaneously. Bitcoin Cash's developers say that it can process 200 transactions per second, compared to Bitcoin's average of seven. As a result, Bitcoin Cash's cost per transaction has fallen, while its scalability has improved.

In the year 2022, Bitcoin Cash outperformed Bitcoin.

Bitcoin Cash has underperformed Bitcoin in 2022, despite the lower cost per transaction and better scaling capability. BCH has dropped 38 percent in the New Year, while BTC has fallen 22 percent.

The Motley Fool quoted Brown as saying:

In 2022, the majority of altcoins have underperformed, including Bitcoin Cash. Since the huge cryptocurrency selloff in January 2022, however, many have begun to stabilise. The market cap of the industry was wiped out by the selloff, which totalled $1 trillion. In addition, Bitcoin and Ethereum have lost up to half of their value since their peak.

Because most altcoins are influenced by Bitcoin's movements, they suffered higher losses.

What are the considerations for cryptocurrency investors?

Finally, we asked Brown what factors crypto investors should consider before investing in one of the coins.

"Bitcoin Cash does not yet have the same level of consumer trust as Bitcoin, and as a result, it does not have nearly as many investors," he said. "As a result, Bitcoin Cash's value in a'real-world' scenario has decreased at the time of press."

"Although the market now shows Bitcoin to be more popular than Bitcoin Cash, you should always perform your own study to identify which crypto asset is suitable for you," Brown cautioned investors.

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Bitcoin prices went above the $40,000 barrier Monday, seemingly breaking out of the stalemate that had developed over the previous few weeks.

According to CoinDesk data, the world's most popular digital currency surpassed that level late this morning.

It was up more than 20% from the more than six-month low reached in late January, according to additional CoinDesk data.

Since breaking above the psychological barrier of $40,000, the cryptocurrency has maintained a pretty narrow range.

While the digital asset fluctuated within this range, it achieved an intraday high of $40,901.18 about 3 p.m. EST.

Why has bitcoin seen such recent gains?

Numerous publications, including those in MarketWatch and CoinDesk, referenced the recent US jobs report, which indicated that companies added 467,000 jobs in January.

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This amount was significantly higher than the consensus estimate of 125,000 jobs supplied by Bloomberg-polled analysts.

Numerous market specialists who contributed to this post shared their perspectives on the subject, highlighting the critical nature of both this current jobs report and other significant variables.

Numerous them alluded to how closely digital currency prices had tracked those of stocks, at least until lately.

"Throughout the most of the week, Bitcoin and Ethereum were closely correlated with the SPX and Nasdaq, until early this morning, when both coins began to outperform," said Josh Olszewicz, head of research at Valkyrie Investments.

"This separation was then accentuated further following the announcement of Non-Farm Payroll and unemployment data that came in far better than forecast."

Tim Enneking, managing director of Digital Capital Management, chimed in as well.

"Strangely enough, I believe the surge was a result of the day before's decorrelation (finally!) of the crypto markets to the SPX. Once those restraints were lifted, a more 'natural' price movement took hold," he explained.

"The news in the crypto field has been mainly positive; nothing really negative has arisen (although WormHole hasn't helped), and "only" the pending new US crypto regulations loom as a potential negative," said Enneking.

"In fact, there was no justification for the price to be down here in the first place other than the 'risk off' mentality that permeated fiat markets, resulting in the recent correlation being extremely strong. That looks to have come to an end, allowing crypto to develop naturally," he remarked.

Additionally, analysts emphasised the amount of short interest that existed prior to the price spike, a circumstance that might easily have magnified bitcoin's gains.

"One of the reasons for the move's strength was the significant amount of short interest that had been opened around the $30,000 level, compelling bears to close their positions," said Dylan LeClair, head of market analysis at Bitcoin Magazine.

"Our study demonstrates that prior bitcoin bottoms were preceded by bearish periods in the derivatives markets, most notably when perpetual futures funding was negative for extended periods of time," he noted.

"As negative money accumulated, nearly $53 million in total short liquidations occurred during the last eight hours, assisting in pushing bitcoin beyond $40,000."

Additional Points to Consider

Apart from the considerations mentioned previously, numerous additional happenings may have contributed to today's bitcoin rise.

Olszewicz emphasised some of these points, writing, "Other variables perhaps contributing to Bitcoin's advance today include a persistently negative funding rate on derivatives, which frequently occurs when shorts pay longs."

Additionally, the put/call ratio for all options maturities was the highest since late 2018, indicating a potentially crowded trade, and shorts haven't been significantly pressed or liquidated since November's highs," he noted.

"Finally, the fear & greed sentiment index has been below 30 since January 1st, which is typically indicative of oversold markets," the expert said.

The Fear And Greed Index was 20 at the time of this press, indicating "Extreme Fear."

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Investors are wondering how high LOOKS' momentum will take it as the stock continues to rise.

LooksRare (LOOKS) is the newest non-fungible token (NFT) exchange on the block, threatening to dethrone the all-powerful OpenSea as the leading NFT exchange. Even as it confronts drama, the LOOKS crypto continues to soar upward in price due to its ever-increasing offering of tokens, as well as staking chances with huge payouts. LOOKS bitcoin price predictions are being sought by investors to check if it can maintain up with the current trend.

The LooksRare NFT marketplace is unique in that it has its own dedicated coin, unlike many other NFT marketplaces. Coins like as Ethereum (ETH) are commonly used via platforms such as OpenSea. Others, like as Axie Infinity (AXS) and Decentraland (MANA), are initiatives with a different primary purpose that employ a native NFT marketplace to supplement their core focus.

Unlike its competitors, LooksRare is an NFT-first marketplace with its own token for staking. LooksRare consumers will like the simplicity, as well as the fact that it offers some of the best annual percentage rates (APRs) on the market. Staking LOOKS on the site currently yields approximately 600 percent.

LOOKS has quickly become one of the most popular altcoins on the market since its launch in early January. This is mostly owing to the platform's combined NFT sales and staking capabilities, which make it a profitable and convenient one-stop shop.

Wash trading, which is forbidden on the traditional stock market, sees NFT users artificially inflate prices by purchasing and selling the same token at the same time. LooksRare came under criticism earlier this week after it was found that majority of its trading volume came from wash trading.

LooksRare, on the other hand, appears to be a popular investment option. The market continues to offer higher yields and a larger selection of tokens than other platforms. As a result, much of the negative feeling that had been surrounding it earlier in the week has been dispelled. Users received about $30 million in packaged ETH and LOOKS incentives just yesterday alone.

The popularity of LOOKS is increasing. It's up 6% today, trading around $5. Is the token going to be able to maintain its tremendous velocity in its first year? Let's take a look at some LOOKS crypto price forecasts to see what experts have to say:

Only minor improvements are expected by the end of 2022, according to PricePrediction.net. The site has set a goal of $6.61 for the year.

Similarly, DigitalCoinPrice holds the same opinion. According to the site, LOOKS will be worth $6.89 at the end of the year.

WalletInvestor is a lot more optimistic than the rest of the industry. By February 2023, the site predicts that LOOKS will be worth $21.15.

Gov Capital is likewise optimistic about the coin, predicting a price of $14 in a year.

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Consumer complaints on South Korea's four biggest bitcoin exchanges increased by more than 7.7 times in the previous year.

The cryptocurrency business has had a tumultuous year, with some governments embracing Bitcoin and others clamping down hard on regulation.

In November of last year, the global crypto market valuation reached $3 trillion, indicating that the area has seen increased growth. However, as the use of cryptocurrencies has grown, so has the number of complaints concerning cryptocurrency exchanges in countries such as South Korea.

Complaints about cryptocurrency are becoming more common

According to local news media, the number of consumer complaints filed against South Korea's four largest crypto exchanges increased by 7.7x in 2021, as the country's population embraced the worldwide crypto frenzy. Crypto mining, on the other hand, has seen a significant increase.

The Korea Consumer Agency forwarded complaint information to the offices of opposition MP Lee Joo-hwan. Last year, clients of the four exchanges — Upbit, Coinone, Korbit, and Bithumb – filed a total of 232 formal consumer complaints with the regulator, according to the records.

Coinone received the most of the complaints (130), followed by Upbit (74), Bithumb (17), and Korbit (11).

However, focusing exclusively on the increase in complaints would overlook the larger picture. Surprisingly, the number of users of the previously-mentioned exchanges has increased dramatically in the last year.

The increase in complaints corresponds to the increase in trading volumes and users on exchanges. By the end of 2021, the four trading platforms had attracted a total of 12.02 million customers, accounting for more than 23 percent of the country's population.

Home-based mining is becoming more popular in South Korea

In addition to an increase in complaints, the number of persons mining cryptocurrency in the country has increased as well. Despite the fact that the national energy company raised electricity costs for the first time in eight years last year, this is what happened.

According to the data, mining rig shipments increased from 28 in 2020 to 453 in 2021. Despite the lack of conventional energy resources in the country, home mining has grown in popularity.

Over $50.2 million has been spent on rig imports in South Korea by domestic miners since 2017. However, as Lee predicted, miners may soon confront rising electricity bills.

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What local rules might look like, and what crypto exchanges will have to do to stay afloat.

Binance, the world's largest international cryptocurrency exchange by volume, announced at the end of last year that it had withdrawn its application for a licence to operate a cryptocurrency exchange in Singapore due to regulatory concerns. While the news may have gone unnoticed in many other countries, it provides food for thought for everyone involved in the crypto business.

Different countries have taken various approaches to regulating the crypto business. Firstly, by outright banning cryptocurrencies and related transactions; or, secondly, by adopting highly severe and burdensome rules from the start without a clear grasp of the situation. Finally, some jurisdictions have chosen not to regulate the industry at all, with the goal of gradually enacting laws as they gain a better grasp of the technology and its implications for fiscal, economic, and regulatory contexts.

Is it better to regulate or not? The question is this:

The debate over whether or not to regulate the crypto business is still raging, but the majority of educated stakeholders believe that a regulated environment is necessary to help the industry flourish while also providing consumers with protection and redress.

In terms of growth, a regulated crypto economy might boost overall acceptance and give birth to a new sub-sector of publicly traded funds with crypto as their underlying assets, similar to what we've seen with the ETF craze abroad.

Nonetheless, it is critical that these rules should not suffocate innovation.

We have no idea what the local crypto business rules will look like right now. However, rumours have circulated that officials are going to implement new rules in the second or third quarter of 2022. The key concern is whether virtual asset service providers ("VASPs") are flexible enough to organise their operations in such a way that they can comply with these laws and regulations.

What impact might this have on VASPs and their clients?

Regulations had such a significant operational influence on Binance's business that the knock-on consequences forced the closure of their clients' trading accounts by February 13th, 2022.

We were lucky to be able to examine other regulated jurisdictions and learn from their mistakes in South Africa, where the crypto business is currently unregulated.

South African VASPs are currently required to follow general regulations such as the Companies Act, Statutory Audits, Tax Administration, VAT and Income Tax Act, and Exchange Control regulations. However, they may be required to follow the Financial Intelligence Centre and the Financial Advisory and Intermediary Services Act whenever crypto-specific legislation are implemented. VASPs will need to catch up rapidly, as "regular" financial service providers have been doing so for years.

Furthermore, commercial banks, who are the lifeblood of most VASPs, will put growing pressure on them to comply with regulations, bridging the gap between cash and cryptocurrency. Several commercial banks in South Africa have implemented blanket restrictions on servicing VASPs during the last couple of years. Others have taken a different approach, ensuring that their risks are minimised by requiring that their VASP clients be compliant in terms of overall regulatory compliance and have in place the requisite Know Your Client (KYC) and Anti Money Laundering (AML) policies and processes.

Hopefully, throughout February, the Income Tax Act will be amended to include crypto investment bundles as part of the collective scheme of investment, or SARS will provide more guidance rather than simply stating that "the standard rules apply."

Who will be the last man or woman on the planet?

Since the launch of Bitcoin in 2009, security breaches have been the most common cause of cryptocurrency exchange failure worldwide. Their unwillingness to follow appropriate laws and regulations, on the other hand, has been close behind.

Some of these VASPs will certainly drop out of the race owing to compliance issues when local restrictions kick in and the industry is becoming closely scrutinised from a compliance standpoint by the FSCA and other watchdogs, as we have seen internationally. This emphasises the significance for stakeholders to understand their chosen VASPs' regulatory positions in order to reduce their risk of being impacted.

VASPs must proactively manage continuing regulatory risk to stay in the game, rather than trying to catch up and finally falling behind once regulations are implemented. What remains to be seen is whether the larger VASPs will be the only ones left standing in a regulated crypto sector, or if there will be room for smaller competitors.

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Coinbase has you covered if you want to buy cryptocurrencies with your tax refund.

After submitting their tax forms, the average American receives a refund of several thousand dollars from the IRS. Furthermore, some people may be eligible for even more money this year if they have unclaimed stimulus monies that they can claim after filing their tax returns.

It's crucial to decide what to do with a tax refund because this lump sum payment can help you better your long-term financial status. For some people, putting their money in cryptocurrencies is the most appealing option since they wish to take advantage of buying opportunities in this rapidly developing asset class.

If you want to buy bitcoin with your tax refund, you might be able to skip a step and deposit your refund directly into the coin of your choice. This is thanks to a collaboration between Coinbase and TurboTax.

Coinbase makes it simple to put your tax refund into cryptocurrencies

On Thursday, Coinbase announced that tax filers who use TurboTax to submit their forms to the IRS will be able to have their refunds paid immediately and automatically into their Coinbase accounts.

The funds from the Internal Revenue Service will be deposited in US dollars. When it reaches the taxpayer's Coinbase account, however, it can be instantly changed into the cryptocurrency of their choice.

Best of all, there will be no trading fees or other costs involved with receiving a refund in cryptocurrency. Taxpayers who go this route will receive their entire return and won't have to pay a trading charge to Coinbase, while the regular spread will apply to bitcoin purchases and transactions.

Even tax filers who receive a substantial refund will be able to use this option because Coinbase accepts deposits of up to $25,000 each day.

How to Invest in Cryptocurrency with Your Tax Refund

If you decide to take advantage of this deal, you'll need to follow a few simple procedures, including starting your tax filing via the TurboTax site's Coinbase area. If you use Coinbase, you can also save up to $20 on TurboTax.

You'll set up Coinbase as your direct deposit account for your refund once you've finished your tax forms and the amount of your refund has been determined. You'll need to activate your Coinbase account and choose whatever cryptocurrency you wish to invest your return in after selecting Coinbase as your direct deposit option.

While this procedure makes buying cryptocurrencies with your tax refund fast and simple, you should be sure it's the appropriate financial move for you. Before investing in cryptocurrencies, make sure you have a fully funded emergency fund, and keep in mind that virtual currencies can be a volatile investment with a higher risk.

If you're financially ready to invest in crypto and have done your research on which cryptocurrencies to buy with your refund, taking advantage of Coinbase and TurboTax's offer could be a wonderful way to streamline the process.

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The most significant advancement in cryptocurrency right now has nothing to do with Bitcoin or even Bored Apes. Cryptocurrency exchanges may be amassing sports sponsorship offers and athlete endorsements. This is expected to come to a head on February 13 during the Super Bowl, the most watched television event in the United States each year.

Throughout the sport, both Crypto.com and FTX have secured celebrity sponsors and paid tens of millions of dollars for commercial space.

Having big names associated with cryptocurrency appears to be an effective strategy for decentralised finance success. Not long ago, HUH Token ran a successful viral social media marketing campaign that included some well-known influencers.

Binance, on the other hand, has decided to sit this one out.

On February 13, you'll almost certainly hear a number of high-profile athletes promote cryptocurrency. Binance has expressed its deep concern about this on the internet, urging people to take responsibility and conduct their own research.

Binance has long been the most popular cryptocurrency exchange in terms of volume, but the maturation of the cryptocurrency market, combined with concentrated promotional efforts, has put its track record in jeopardy.

Its main competitors have been preoccupied with sports collaborations and sponsorship preparations throughout 2021.

To name a few deals, FTX purchased the rights to rename the Miami Heat Arena after itself and signed NFL legend Tom Brady and NBA sharpshooter Steph Curry as brand ambassadors, Crypto.com sponsored the UFC and acquired the naming rights to the Los Angeles Lakers and Clippers' arenas, and Coinbase had its name plastered on NBA flooring.

Binance has traditionally shied away from celebrity and athlete endorsements, but it has recently courted Spanish star Andrés Iniesta and sponsored the Africa Cup of Nations soccer tournament.

The no-frills strategy has worked well so far.

In terms of quantity, liquidity, cybersecurity measures, and measurement, Binance owns 62 percent of the spot buying and selling volume among the top 5 exchanges on CoinMarketCap, according to the most recent information.

Binance's share of transaction volume dropped to 45 percent in November, indicating that its competitors' sports-centric strategy was paying off.

And the technique may or may not produce a final result.

Even though it was a low year due to COVID, the Super Bowl drew around 100 million viewers in the United States in 2021; the figure usually hovers around 150 million.

With recent research indicating that only about 20% of Americans have invested in cryptocurrency, a Super Bowl commercial could attract a large number of viewers.

As previously mentioned, a newer cryptocurrency known as HUH Token was launched not long ago last year. HUH claims to be establishing itself as the decentralised finance and web3.0 social media platform.

When it first came out, it was a huge hit, with a 3500 percent increase in less than 5 days. This crypto was also caught up in the bearish sentiment that the market had entered. HUH Token, on the other hand, demonstrated a formidable advertising and marketing capability on January 26 when a slew of influencers, some with over a million followers, posted about HUH on Instagram and Twitter.

This performance triggered a 50 percent increase inexperienced candle on the chart, and HUH Token claimed that this was only a small portion of their full potential. Next month, they'll launch a social media platform to help them innovate their social influencer onboarding.

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Luno, Africa's largest cryptocurrency exchange, wants to bring its products in front of the world's largest section of digital asset investors: those in the United States.

Luno is researching every U.S. state for regulatory needs and variances in the hopes of launching its exchange in the country in 2022, according to Marius Reitz, Luno's general manager for Africa.

The differences among states, according to Reitz, make it particularly difficult to move into a single market. Despite the obstacles, Luno told Bloomberg that he is committed to visiting the United States this year.

Luno was created by CEO Marcus Swanepoel, CFO Alwyn Jones, and CTO Timothy Stranex in 2013 and is based in London with regional headquarters in Singapore and Cape Town. Luno, formerly known as BitX, was purchased by Digital Currency Group in 2020.

According to corporate records, Luno has over 9 million users in more than 40 countries and has completed more than $14 billion in transactions. The startup currently trades bitcoin, Ethereum, and ripple, with further currency on the way, according to Reitz.

In Nigeria and South Africa, nearly one-fifth of the population has digital assets. It's in these places that cryptocurrency has gained traction. There are also unexplored prospects in East Africa, according to Reitz.

FTX and Binance are just two of the crypto exchanges planning to expand to the United States, which is home to more than half of the world's crypto unicorns, according to CB Insights.

According to the research, Reitz believes bitcoin exchange-traded funds — where investors may own many coins without having to acquire them — will be available in the next 24 months.

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The first global criminal case against Mark Zuckerberg's social networking platform was filed by one of Australia's wealthiest men.

Andrew Forrest, chairman of the Fortescue Metals Group, has filed a criminal complaint in Australia against Facebook for failing to ban fraud adverts using his image. This is the first time that Facebook has been charged criminally anywhere in the world, according to the Australian mining mogul.

In his complaint, Forrest stated, "I'm doing this on behalf of innocent Australians who lack the wherewithal to take on corporations like Facebook."

The Australian Competition and Consumer Commission (ACCC) has apparently launched an investigation into Forrest's criminal claim.

"While Dr. Forrest's proceedings involve comparable advertisements to those under scrutiny by the ACCC, the ACCC's investigation is distinct and involves different legal issues. The ACCC Chair, Rod Sims, told The Australian that Dr. Forrest's case was brought under the Commonwealth Criminal Code.

The Case of Forrest

Forrest claims that false crypto investment adverts on Facebook utilised his image to pretend that the mining billionaire approved specific investment schemes, leading to many people being duped. According to Forrest's attorneys, Facebook "knowingly profits from this loop of illicit ads," which is illegal under anti-money laundering legislation.

They also mentioned that Forrest had spent thousands of dollars to distance himself from the fraudulent accusations since the commercials began running in 2019.

Forrest wrote an open letter to Mark Zuckerberg in November 2019 requesting that he cease using his likeness in false Facebook adverts endorsing cryptocurrency investment schemes. However, the social media platform's marketing policy remained unchanged, and advertising incorporating celebrity endorsements continued to show as sponsored posts. Investors should be wary of false crypto marketing and sites with celebrity endorsements, according to the Australian financial watchdog.

Without mentioning Forrest's claim, Meta, the parent company of social media behemoth Facebook, issued a statement. "We don't want advertising on Facebook that try to defraud people or mislead them - they violate our policies and are bad for our community," it stated.

So, what's the issue?

For suspicious ads to get past the checks, social media corporations frequently blame "cloaking." Cloaking is a technique that allows scammers to offer various material to social media filters while the actual ad to run on the platforms is different.

In his complaint, Forrest stated, "I want social media corporations to employ more of their huge resources and billions of dollars in annual income to safeguard vulnerable people who are targeted and fall victim to these frauds."

"Like Dr. Forrest, we believe Meta should do more to detect, block, and delete false or misleading advertisements from the Facebook network so that consumers are not misled and scammers are not able to reach prospective victims," ACCC's Sims stated.

The parent corporation of Facebook, Meta, released poor Q4 2021 numbers earlier this week, causing its shares to drop by double digits in after-hours trading.

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This week, China's digital yuan will make its global debut, with foreign athletes and others at the Beijing Olympics being able to use it for the first time. People can use a smartphone app to access digital yuan, but it differs from other payment applications in that it is a digital form of the renminbi, which is issued by the People's Bank of China. 

The digital yuan has already been tested in several Chinese cities, with over $8 billion in transactions completed in the second half of 2021. China's efforts have prompted other governments to consider developing their own digital currency. According to the Atlantic Council, around 90 countries, accounting for more than 90% of global GDP, are actively studying a central bank digital currency (CBDC). 

CBDCs, some claim, will eliminate the need for cryptocurrencies like bitcoin. After all, do we really need so many different digital currencies? However, the contrary is true. The growth of CBDCs emphasises the necessity of decentralised cryptocurrencies that are largely private and unaffected by government intervention. 

While China's digital currency is an incredible endeavour that has the potential to provide numerous benefits, including payment convenience and efficiency, privacy is not one of them. In fact, the digital yuan will provide the government more visibility over its citizens' financial operations. 

In an interview, Yaya Fanusie, adjunct senior fellow at the Center for a New American Security, argued that modest payments may not require identification. "However, the government will be able to track all transactions, whether anonymised or not," he says. 

WeChat Pay and Alipay are two of China's most sophisticated mobile payment systems. Companies now collect a lot of personal financial data, but the digital yuan will make it considerably easier for the government to get it. The Chinese government can already obtain data from payment businesses, according to Fanusie, but with the digital yuan, they won't have to go through that extra step because they will have direct access to the data. He explained that the digital yuan is akin to the traditional yuan "They don't even have to move a finger. The information is delivered to them." 

CBDCs can not only be tracked, but they can also be programmed. Following a natural disaster, for example, a government may offer citizens digital money to spend on food and medicine but not on alcohol. As a result, governments will have more control over who has access to digital money. "It's going to be easy for the central bank to switch off any wallets they want to turn off, because of political reasons or crime fighting or anything," Fanusie said of China. 

It's too early to tell how central bank digital currencies would work in practise, but Congressman Tom Emmer noted privacy concerns in legislation he sponsored that would prevent the US Federal Reserve from issuing CBDCs to individuals directly. 

Cryptocurrencies take a different approach entirely. After the 2008 financial crisis, Bitcoin, the world's most popular cryptocurrency, was developed as a form of money that was designed to be free of government or bank control. Bitcoin transactions are recorded on a blockchain, which is a decentralised ledger. 

No government can prevent you from sending or receiving bitcoin, and no government can shut down the network. Bitcoin is also a somewhat private kind of money, in that all you need to transfer and receive bitcoin is a string of numbers and characters. Some people are attracted to cryptocurrencies because they believe that even completely lawful transactions should be protected from prying eyes. 

Because all bitcoin transactions are recorded on a publicly available blockchain, some crypto purists may argue that even bitcoin isn't secure enough. Even still, tying a bitcoin address to a real person's identify is time-consuming: The task of evaluating blockchain data would require a significant amount of time, skill, and effort on the part of governments or espionage agencies. CBDCs, on the other hand, are intended to be traceable by the government. 

Bitcoin's privacy protections are currently being improved by developers. Other digital currencies, such as zcash and monero, however, prioritise privacy protection as a primary feature. Zcash, for example, employs a cryptographic technique called as zero-knowledge proofs, which allows a collection of data to be verified without disclosing it. New cryptocurrencies are continuously emerging, and we should expect much more privacy innovation in the future. 

China's digital yuan might become the country's primary means of payment in the future. In an interview, Victor Gao, chair professor at China's Soochow University, remarked, "Whether I embrace the digital Renminbi or not is not up to me to decide." "If I stay in China, if I continue to be a global citizen, I believe this wave will eventually reach me. I can't fight it, can't stand up to it without getting buried by it." 

Other countries, especially the US, may be unable to resist the temptation to implement their own CBDC. Government-backed digital currencies, on the other hand, should not be king. Other cryptocurrencies are required to maintain an independent and relatively private form of digital money in a world where governments are increasingly able to track and control transactions.

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