Blockchain Bites: Filecoin Strike, Bitcoin Fees Fall, Coinbase Censorship

Five Filecoin miners have gone on strike. Bitcoin miners are seeing depressed earnings. And Binance is closing its Jersey branch.

AccessTimeIconOct 19, 2020 at 4:05 p.m. UTC
Updated Sep 14, 2021 at 10:11 a.m. UTC

Top shelf

Token protest
Five of the largest Filecoin miners, which secure that data storage network, have gone on strike, bringing attention to the project’s “unfair” economic model. According to a report by, miners are required to stake a significant amount of FIL tokens to start mining operations. But there’s a critical lack of FIL tokens off the bat. Purchasing tokens on exchanges at what could be inflated prices is seen as unattractive. “All the miners have been off since the mainnet went live. This is not some sort of protest but we have to shut them down because we really don’t have the tokens as collateral to mine,” ST Cloud CEO Chuhang Lai said in the report. In response to miner’s concerns, Filecoin has decided to release 25% token rewards in advance once a miner builds a block on the blockchain.

Transaction count
Bitcoin’s (BTC) miners are seeing depressed earnings as on-chain transaction activity and price action cools. "Boring price action and low volatility tends to reduce the count of transactions to and from the exchanges," Willy Woo, on-chain analyst and author of The Bitcoin Forecast newsletter, told CoinDesk over Telegram. Yesterday, there were only 231,437 transactions processed on the Bitcoin blockchain, the lowest since May 24 and down 40% from a peak on July 1, according to data provided by blockchain analytics firm Glassnode. With the network processing far fewer transactions currently, the percentage of miners' revenue derived from fees also dropped to a three-month low of 3.49% over the weekend.

Schiff riff
Noted Bitcoin skeptic Peter Schiff’s Euro Pacific Bank has become the focus of a major global tax evasion investigation. Initiated by the U.K., the U.S., Australia, Canada and the Netherlands, this investigation, dubbed Operation Atlantis, is seeking to determine if hundreds of “high risk” account holders were involved in tax evasion and money laundering through the bank. The investigation began in January and has its roots in the “Panama Papers,” which shed light on how some of the world’s wealthiest people and firms have been hiding money and evading tax in off-shore accounts.

Crypto insurance
Bitstamp, one of the world’s largest cryptocurrency exchanges, has introduced an insurance policy that covers the theft and other losses of user funds held on its platform. The Europe-based exchange said the new insurance policy will be provided by Paragon International Insurance Brokers in coordination with Woodruff-Sawyer, per a Thursday blog post. The policy applies to digital assets, such as bitcoin, that are held at the exchange both on and offline, and covers a number of crime-related circumstances, per the post. The underwriters will consist of various insurance companies and certain syndicates from one of the world's oldest insurance markets, Lloyd's of London.

Branch closing
Binance, the biggest cryptocurrency exchange platform by trading volume, is closing its dedicated Jersey branch, which offered  fiat-to-crypto exchange for users trading with euros and U.K. pounds against a limited choice of crypto assets. Announced Monday, Binance said all deposits to the local platform will be disabled on Oct. 30, and trading and other services will cease on Nov. 9. Binance said its global service,, now offers GBP deposits via the U.K.'s Faster Payments scheme, as well as SEPA payments for the euro. It also offers trading pairs against both currencies. As such, the company said, the growth of services on has "extinguished the rationale for Binance Jersey as a distinct exchange."

Quick bites

Binance recorded an all-time high spot trading volume in Q3 (Yogita Khatri/The Block)

MicroStrategy Redirects to Bitcoin After $425 Million BTC Purchase (Robert Stevens/Decrypt)

Binance Destroys $68 Million of BNB in Most Expensive Burn to Date (Robert Stevens/Decrypt)

Coinbase’s New ‘Direction’ Is Censorship, Leaked Audio Reveals (Edward Ongweso Jr/VICE)

With Ripple’s $10 million donation, Mercy Corps strengthens its bet on crypto (Leo Jakobson/Modern Consensus)

At stake

In just the past three days, central bank digital currencies have been reported to be a means to bust economic sanctions, tools to strengthen local monetary policy and marginally worse versions of payment tech we already have. 

The global CBDC conversation really got going in earnest after the Facebook-incubated Libra Consortium was announced to the world, which sparked regulatory backlash and calls for national digital currency experiments. In a recent International Monetary Fund (IMF) report, it’s clear Libra is still front of mind for many central bankers. 

In a hypothetical scenario, IMF researchers describe a bait-and-switch where “Big Techs” advertise a corporate-run but fiat-backed stablecoin, only to de-peg them later on: becoming something of a stateless currency unto their own. This is clearly undesirable for central bankers, who wish to exert granular control over monetary policy. 

Even before the pandemic-led economic crisis, the global economy was cooling. Global productivity, wage growth, inflation and GDP stagnated in the 2010s, leaving most central banks without the “ammunition” to stimulate sufficiently. With many financial chiefs, like Federal Reserve Chairman Jerome Powell and Bank of England Governor Andrew Bailey, eschewing long-standing central bank political independence to call for a coordination of monetary and fiscal policy. 

While CBDCs are seen as a panacea, the IMF thinks it could expand central banks’ toolbox, providing new ways to deal with old problems. For instance, CBDCs could allow central banks lower policy rates “below the effective lower bound,” letting them exert better control over their economies.

Still, initial reports back from the world’s most advanced CBDC experiment in China have been wanting. Early still to see how a “digital yuan” might be used for state economic programming, the first trial has painted a scene where people are uninterested in using the novel currency

The city of Shenzhen and the People's Bank of China launched a "red envelope" lottery earlier this month, giving away 20 million of the digital yuan (worth around $1.5 million) to locals. Many found the play-money inconvenient and similar to existing payments apps like Alipay.

“It’s especially important to offer convenience and other benefits to promote the use of digital yuan,” a senior economist at PwC China told Reuters. It’s just another bind for the central banks.

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