Bitcoin Daily: Bancor Loses $23.5M In Security Breach, Economists Take Aim At Bitcoin

Digital currency investor Li Xiaolai has reportedly resigned from the position of managing partner at the Hangzhou Xiong’An Blockchain Fund, CoinDesk reported. His departure happened after he was the subject of allegedly defamatory comments. As it stands, Li and venture capitalist Chen Weixing are locked in a bit of a feud, and Chen reportedly made hostile public comments against Li.

“The series of defamations from Chen Weixing against myself has brought material and negative impacts on the reputation of Xiong’An Blockchain Fund,” Li said. “To let the Hangzhou government continue its push for blockchain development, I will resign from my role as a managing partner.”

In other news, the losses from a security breach at Bancor, a decentralized exchange, has reportedly reached $23.5 million, Cryptovest reported. The value of pilfered Ethereum is about $12.5 million, while $1 million in Pundi X (NPXS) tokens were also reportedly taken. In addition, $10 million worth of Bancor (BNT) tokens have been frozen.

On another note, China Banking and Insurance Regulatory Commission (CBIRC) official Fan Wenzhong believes that the world shouldn’t “mythologize blockchain,” Cryptovest stated. He also said that blockchain is essentially a new take on an old idea, saying at an event, “Decentralization is not a new trend but a loop, because the earliest human transactions were without central authorities.”

Economists are taking aim at bitcoin, saying that regulators won’t overlook the currency in the long-haul, according to Barons. Joseph Stiglitz, Nouriel Roubini and Kenneth Rogoff are quoted in the publication, with Stiglitz saying, “Once it becomes significant, they will use the hammer.”

It also so happens that a decline in compensation is programmed into the algorithm in the long run, since the supply of bitcoin increases asymptotically to 21 million. But a strong, centralized leadership and a flexible “constitution” could modify the incentive scheme to always optimize the level of effort to have a smoothly running public ledger.

But there’s another point: It may not make sense, in general, for consumers to use wallets to buy from domestic merchants. Consumers transfer dollars from their bank accounts to their wallets. Between the time they transfer dollars and use their bitcoins to pay, they incur exchange risk in addition to any fees they pay the wallet provider — and might forgo various protections against the merchant, and possibly rewards.

A paper by the Bank of Finland asserted that “the concept of a digital currency is a fallacy,” CoinDesk reported. The bank’s digitalization advisor, Aleksi Grym, said that cryptos are “not currencies at all, but rather accounting systems for non-existent assets.”