Will LoserCoin be China’s answer to DOGE?

When mentions of LOWB first appeared in your correspondent’s crypto WeChat, I casually dismissed it as yet another yield-farm coin on Binance Smart Chain into which DeFi degens ape for a few days before moving on to the next one. It only took a few hours—and a 400% price jump—for me and the rest of crypto WeChat to do a double-take and shift our eyes to the coin and LoserCoin, the project behind it.

The coin is worth only $0.0009 and its market cap is a paltry $880,000. That number might seem minuscule but the project just started on May 7, and its Chinese Telegram Group already has a staggering 10,000 members. That’s a lot of followers given that Chinese people need to climb over the firewall to use Telegram.

LoserCoin is surpassing $DOGE and $SHIBU in buzz and is the hottest meme coin made in China. This week’s da bing looks into the cultural phenomena behind LoserCoin and attempts to explain who the real winners are here—and the real losers.

The LoserCoin logo dude.

Leaning in on being lovable losers

According to the founding story, LoserCoin (not to be confused with this from 2014) was created by two broke Chinese crypto retail traders from a 4th-tier city. They entered the crypto market in 2017 but got repeatedly wrecked, “thanks to the Bitcoin speculation.” Tired of losing money from trading and being harvested as “leeks,” the two high school friends decided to launch their own project, and find out if two “losers” could turn the table and start harvesting other leeks.

Their honesty instantly resonated with China’s crypto community.

In an AMA that went viral, one founder painted himself and his co-founder as losers who dreamt of being instantly rich but somehow managed to lose money in all capital markets including China’s equity market, Hong Kong’s equity market, derivatives, and of course crypto. That heartfelt experience was one that one too many Chinese retail crypto investors have gone through as well.

When asked about the product roadmap, the business co-founder admitted that the technical co-founder only picked up blockchain coding a month ago, and therefore, they might face some delay as it goes. Again, this ingenuity, and the ability to mock his business partner, was strangely endearing, especially compared with many project founders who only like to over-promise and only talk in complex technical terms.

Capturing the Underdog Culture

LoserCoin is all about embracing the so-called diaosi, or underdog culture, of China.

The term diaosi began as an insult to the poor, unattractive man who lives with his mother and plays video games all day. As the term became viral, Chinese netizens, including those gaofushuai (tall, rich and handsome), started to embrace it and use it as a self-deprecating term to be part of the crowd.

In crypto, diaosi culture is analogous to “leek culture,” a term originally used to describe retail investors getting wrecked by shitcoin projects or scamming crypto VCs who quickly pump and dump their coins.

Nowadays, everyone proudly describes themselves as a leek. Even if you’re an experienced crypto investor, you label yourself “old leek.” If you just made a fortune trading DOGE, then you are a “new leek.” Everyone is a leek.

A rice bowl drop (like a mic drop)

LoserCoin is doubling down on Leekism and encourages every retail trader to embrace their inner loser. They even hosted a Reddit discussion where people shared their best loser-story. Winners were airdropped $20,000 worth of $LOWB tokens.

“When I saw LOWB, I finally found kindred spirits, and it gave me hope!” wrote one redditor. “I’ll feel like a loser my entire life, but knowing that I’m not alone gives me strength! The POWER of LOWB!”

Winners losers, and memers

On Sunday, two large Chinese crypto exchanges, Gate and MXC, decided to list LOWB. The news sent the coin to its all-time-high, and many in the Telegram group are now worried that the founders would dump tokens on them. It’s ironic that after building a strong community around being losers, the founders are now finally winning the token game.

A community poster/meme.

Posters like the one above have been flooding Chinese crypto WeChat and the various iconography coming out of LoserCoin is spawning a raft of memes, a la DogeCoin.

It’s clear that the founders’ ingenuity has paid off, and perhaps, soon they can afford to buy something in a tier-1 city.

However, like any meme token that has no intrinsic value, LOWB will eventually come down and those that hold big bags at the top will stand to lose. In other words, the people who really bought into the meme will eventually see their bag turning to dust.

Of course, the same thing has consistently been said about DOGE. But thus far, an Elon Musk like celebrity with a massive following has yet to shill LoserCoin. Who knows, maybe Jack Ma will take an interest in adopting the coin.

Barring that, the question isn’t really who are the losers, but whether people will feel bitter after losing. A strange phenomenon on LoserCoin’s Telegram has been retailer investors who bought the coin and predicted that it would go to zero. But in a weird way, that makes perfect sense. LoserCoin actually losing is the only outcome that fits the meme itself.

Now, in other China crypto news…

 Chia found a natural product-market-fit in China

Chia, the proof-of-space blockchain project, is gaining ground in China. It uses a novel “proof of space” consensus mechanism, which uses storage capacity instead of the energy-consuming proof-of-work consensus mechanism shared by Bitcoin and Ethereum. Dubbed “ green bitcoin,” Chia mining had caused manufacturing shortages in hard drive prior to its launch.

The frenzy is hotter in China, where mining is already an established industry. But another catalyst to the rise of Chia is that Filecoin miners could use their existing rigs to mine Chia. As the network gains momentum, it remains to be seen whether  Filecoin miners will switch to the new network.

Debank’s OpenAPI

DeBank, a DeFi portfolio tracker, just announced its China’s digital yuan now accessible on ICBC’s app

It takes years to roll out any infrastructure, and the digital yuan is no exception. But one nice thing about software infrastructure is it allows for testing and iteration with beta users,  before nation-wide rollout. And that’s exactly what China’s central bankers have been doing.

The Industrial and Commercial Bank of China (ICBC), one of the largest national banks, appears to have allowed public users to activate China’s central bank digital currency wallet inside its mobile app. The in-app wallet allows users to deposit, withdraw, pay through QR codes and launch peer-to-peer transactions.

None of these functions is different from what consumers can already do on any banking or payment app. However, its true power will surface once the whole infrastructure is completed and the central bank has full control over the flow of money.


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Indonesia Ponders on Plan to Tax Crypto Trading Gains

Indonesia is mulling imposing tax on profits gotten from cryptocurrency trading, as the nascent industry sees exponential growth in the Southeast Asian country.

Indonesia Could Impose Tax on Crypto Trading

According to Reuters on Tuesday (May 11, 2021), an Indonesian tax official, Neilmaldrin Noor, told the news outlet that the proposal to tax profits on crypto gains was still in the talking stage. Noor noted that Indonesia was looking at ways to boost its revenue amid the COVID-19 pandemic. 

Indonesia’s central bank back in 2018 prohibited cryptocurrency-based transactions in the country, citing a lack of regulation and financial protection for its citizens as reasons. Meanwhile, in 2019, the government declared that crypto could be traded as a commodity. 

The cryptocurrency industry continues to flourish in Indonesia, with the country’s Commodity Futures Trading Regulatory Agency, also known as Bappebti, stating recently that there are about 4.5 million crypto investors in the country. This figure exceeds the number of stock investors which is approximately 2 million, as of February 2021. 

Major crypto exchange in Indonesia, Indodax, also said that the number of active members on its platform in April grew to three million from 2.3 million in January. The crypto exchange experienced growth at the time the price of bitcoin and other cryptocurrencies reached all-time highs (ATHs). 

While crypto booms in Indonesia, citizens may have to get ready to be levied tax on their crypto gains. According to Noor:

“It is important to know that… if there is a profit or capital gain generated from a transaction, the profit is an object of income tax. So the taxpayer who receives capital gain has to pay the tax and report it.” 

Meanwhile, Indonesia joins the list of countries that are either considering crypto tax or already have a cryptocurrency tax policy. South Korea, after a couple of back ad forth, is ready to implement its crypto tax law in January 2022.

The South Korean government would levy 20% on cryptocurrency trading profits that exceed 2.5 million won ($2,234). While the tax law has seen pushback from crypto industry participants in South Korea, a recent survey showed that over 50% of the respondents support the upcoming tax policy.

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A Privacy Standard In Bitcoin, And How It Will Protect Bitcoin Users

There exists a security problem inherent to Bitcoin’s transparency that needs to be addressed by the community.

Bitcoin has a fungibility issue; it is transparent, which can be both good and bad. Transparency allows everyone to check how many bitcoin are in circulation and to ensure that nobody is cheating.

But it also allows bad actors (such as governments) to monitor the chain and compromise users’ privacy.

When a new user buys bitcoin using a regulated, know your customer (KYC) exchange, his information (including Bitcoin address, government ID and other identifying information) is being provided to his local government. This information allows them to view the activity of his wallet, since his coins are linked to his identity. It also allows easier seizure in case of a government ban on bitcoin.

This is obviously dangerous, especially if you live under an authoritarian government. There are options available for buying bitcoin without revealing your identity and compromising your privacy, but those are less popular and are usually harder to follow.

This calls for a privacy standard in Bitcoin: Where a majority of wallets enable privacy features by default, making it much harder for chain analysis firms to link transactions and wallets to real-life identities and/or previous transactions. Users must make sure each and every one of our transactions are private. This can be achieved by utilizing tools like CoinJoins, PayJoins and other privacy enhancing techniques. While these tools are no silver bullet, using them in the right way can allow users to achieve a remarkable amount of privacy. Stealth addresses also have an important role in the privacy standard, as they allow users to share their addresses without needing to worry about them being linked to their digital or physical identity. Running your own node will also play an important part, dramatically reducing the possibility that a node will be used to link your transaction history to your real-life IP address, which can be used to deanonymize your transactions.

If we are able to do that, we will be able to disarm chain analysis companies. Chain analysis firms specialize in invading Bitcoin users’ privacy. They do it using publicly available on-chain data and then cross reference it with other data, such as KYC records, in order to establish a deterministic link between a user’s wallet activity and his real-life identity.

The worst thing about those companies is that they don’t work exclusively for governments, they work with whoever is willing to pay them. Whether it’s a government, advertising company or a creepy stalker, it doesn’t matter to them. Those companies are pure poison for Bitcoin and are completely unnecessary in the Bitcoin ecosystem; they only bring harm and suffering to it.

There are plenty of users that are targeted by these companies simply because they stated they hate the idea of chain surveillance; a good example for this would be DarkDotFail’s donation address being flagged in multiple exchanges that have a partnership with these companies. Chain surveillance is not about money laundering, crime or any other illegal activity, it’s about creating an age where nobody has the right to keep their finances private. A Bitcoin privacy standard aims to kill these purely evil companies; but this requires the Bitcoin community to come together, put the ego aside and work together to create, use and promote tools that will enable this effort.

The hardest part of standardizing Bitcoin privacy would be making people acknowledge Bitcoin’s faults when it comes to privacy. Many will just avoid talking about it, and some don’t even know it exists! Creating such a standard would require large community consensus, not because we need to change the protocol, but because we need to make people acknowledge the fact that their privacy is being compromised. A privacy standard would also discourage discrimination against those who want to keep their bitcoin finances private (see this post).

They can censor a minority but not a majority.

We need more wallets like this, and more enthusiasm toward building and using Bitcoin privacy tools. Number-go-up is not all that matters in this peaceful revolution; privacy matters too.

This is a guest post by Yonatan. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.


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The challenges with designing a CBDC, explained

An identity-based, meta-blockchain can achieve all three design goals of identity, privacy and programmability.

While blockchain systems can be structurally decentralized, the operation itself can be very much centralized and sequential.

The problem lies in how transactions cannot be processed in parallel — and multiple smart contracts cannot be operated simultaneously.

A meta-blockchain that can operate smart contracts in parallel could be the answer here, as it can ensure that a user’s information is kept secret at all times.

SovereignWallet Network (SWN) Global believes it has found the solution for tackling the issues that CBDCs face, and aims to deliver self-sovereign financial services to millions of people.

The fourth-generation network inherits all the advancements in blockchain and digital currency technologies — and the project launched the MUI MetaBlockchain mainnet on January 3.

Developers say MetaMUI can help achieve the perfect equilibrium in the CBDC design trilemma, helping the next generation of digital assets to be rolled out smoothly.

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.


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Ripple’s Partner Accenture Writes Paper With SWIFT On CBDCs

Ripple’s partner Accenture, the technology and business consulting firm, has published a paper with SWIFT on the potential for central bank digital currencies (CBDC) payment solutions. Titled “Exploring central bank digital currencies: How they could work for international payments”, the paper claims there is surging interest for these types of assets.

Accenture is a Fortune Global 500 company. Alongside Ripple, BMW, Bosch, Blockchain Acceleration Foundation, Arxum, Consensys, Crypto Valley, Constellation, Continental, CPChain, DLT Labs, Enterprise Ethereum Alliance, Ford, and others, Accenture is part of the Mobility Open Blockchain Initiative (MOBI).

According to the document, at least half of the world’s central banks plan to develop a CBDC. Three main factors contributed to this trend: to reduce physical notes, counter the effect of private cryptocurrencies as a threat to fiat, and improve security across wholesale markets. The paper states:

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Whatever the motivation, the momentum toward CBDCs seems clear and growing. Some central banks are already conducting live experiments, and the potential for currency evolution is being framed by some as a possible revolution in how value is exchange.

Two additional reasons for the rise in interest around CBDCs are the potential drive for financial inclusion for less developed markets, as the paper claims, and to enable payment innovations.

The current trends suggest led Accenture and SWIFT to make 4 assumptions. First, there is a high possibility that CBDCs will be issued by “many central banks” both domestically and abroad. Thus, these assets could strengthen a new economy based on digital transactions.

A reduction in fiat monetary supply. A banking institution could have more control over the liquidity in their financial system. In addition, the distribution of these types of assets could be under more control of authorized institutions. They could leverage tokens or digital wallets to provide users with “accounts”.

Ripple And The XRP Ledger As A Bridge For CBDCs

The paper claims that commercial banks could have a major role as providers of CBDCs for their clients. Conversely, these assets will need to have two key characteristics: infrastructure and interoperability for cross-border payments and other use cases. The paper claims the following, with potential room to apply one of Ripple’s XRP-based solutions:

The concept of CBDCs moving cross border is complex. It is technically achievable with various technologies, but the meaning and usage of a CBDC outside its native jurisdiction is unclear. To be practical, some form of interchange mechanism with local currency must exist. (…) What will be required is a multilateral interchange mechanism that enables payments to be made end to end in a frictionless form.

The report focuses on how SWIFT will play a role to drive CBDCs. Ripple has had an active role in this area. Brad Garlinghouse, Ripple’s CEO, disclosed at the end of January 2021 that there have been meetings with banking institutions to issue CBDCs.

The paper has gained a lot of attention from the XRP community. Popular community member WrathofKahneman shared the news but highlighted that the document mustn’t be interpreted as a sign of a partnership between the 3 companies:

(…) Accenture clearly has multiple relationships with a great number of businesses.  The only certain thing is that there is great interest in the intersection of cross-border transactions and CBDCs.

XRP trades at $1.46, at the time of writing, with sideway movement in the lower time frame. In the weekly and monthly chart, XRP has a 6.2% loss and a 6.5% profit, respectively.



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EOS and YFI lead altcoins higher as Bitcoin and Ether bounce from swing lows

The markets were mixed on May 11 as Bitcoin (BTC) recovered from Monday’s drop to $53,000 by bouncing to $56,862 but the digital asset is still finding resistance at the $57,000 level.

Ether (ETH) also worked its way back above $4,100 but according to Cointelegraph analyst Marcel Pechman, the bullish sentiment for Ether seen in recent weeks has begun to fade as traders question whether new all-time highs will be sustainable in the short term.

Data from Cointelegraph Markets and TradingView shows that Bitcoin bulls defended a late-night sell-off on May 10 that briefly dropped the price of BTC below $54,000 before dip buyers gobbled up sell orders and lifted the price back above $56,000.

BTC/USDT 4-hour chart. Source: TradingView

blue-chipWhile the blue chip cryptocurrencies have been stuck in a sideways market, canine-themed meme coins including Shiba Inu (SHIB) and Dogelon Mars (ELON) have followed Dogecoin’s (DOGE) lead and seen their prices explode for triple-digit gains.

Ethereum bulls take a brief breather

Bitcoin’s range-bound trading between $50,000 and $60,000 in recent weeks can partially be attributed to the rising price of Ether, which has caught the attention of institutional investors looking for exposure to more than just BTC. The growing demand for Ether can clearly be seen in the price action of the ETH/BTC pair.

ETH/BTC 4-hour chart. Source: TradingView

According to David Lifchitz, managing partner and chief investment officer at ExoAlpha, Ether’s recent all-time high was in part due to a “continued rotation away from Bitcoin” which helped push the price of Ether “as high as $4,214 before suddenly puking down to $3,658 (-13% in an hour).”

The downturn in the crypto market coincided with a selloff in the U.S. equity markets that hit the tech-heavy NASDAQ index especially hard. Lifchitz noted that Bitcoin and the other cryptocurrencies were eventually able to “bounce back half of the loss from the high.”

While the sell-off “could be explained by some correlation trades leading to a quick profit-taking in cryptos”, Lifchitz also pointed to the possibility of a more organized selloff where some traders took advantage of frothy market conditions.

Lifchitz said:

“It could also have been an organized selloff as Ethereum was at its ATH after a torrid ride (i.e. ETH was vulnerable to a quick drop) in order to spook the weak hands and shake them off, triggering a cascading selling effect, before buying back ETH on the cheap as shown by the even higher volume to buy right after the selloff.”

Lifchitz highlighted that just:

“Twenty-four hours later, Bitcoin is back in the middle of its twilight zone ($50,000 to $60,000) and Ether is slowly grinding higher above $4K. So all in all, it was just an ordinary day in crypto land.”

Further insight into the market moves over the past week was offered by Ben Lilly, co-founder and analyst at Jarvis Labs, who highlighted an increase in on-chain profit taking over the last week that had “lots of capital turning over throughout altcoins.”

Lilly said:

“As capital made its way from coin to coin, profits were being realized as Bitcoin traded sideways. What we saw on May 10 was the end of this phase.”

Altcoins lead the market higher

The overall altcoin market shook off the bearish moves seen in the larger-cap cryptocurrencies. EOS led the day with a 50% jump which took the price to $13.92  after Block.one announced that it had secured $10 billion in funding to launch an EOS-based cryptocurrency exchange named Bullish Global.

Daily cryptocurrency market performance. Source: Coin360

Yearn.finance (YFI) managed to break out of the trading range it had been stuck in to put on a 58% rally to a new record high above $80,000, while the price of Revain (REV) exploded 130% to reach a multi-year high at $0.049.

The overall cryptocurrency market cap now stands at $2.474 trillion and Bitcoin’s dominance rate is 42.8%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.