Bitcoin Crashes as Halving Hype Loses Impetus Over the Weekend (bloomberg.com) 139
Bitcoin appears to be running out of steam just before one of the most anticipated milestones among cryptocurrency enthusiasts. From a report: The largest digital token tumbled over the weekend, declining about 13% to around $8,675. It rebounded to about $8,840 as of 10 a.m. in New York trading on Monday. The decline took place ahead of a closely watched technical event known as its halving, when the rewards miners receive for processing transactions will be cut in half as soon as later today. "It's likely that we're going to see increased volatility through May, with the pandemic, ongoing stimulus measures and the halving," Rich Rosenblum, co-head of trading at crypto market maker GSR, said in an email. "The record open interest for futures and options at multiple exchanges adds to this. The market is in a state of information and position overload, exacerbating the potential for volatile moves."
The crash happened in minutes (Score:2)
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Well, and the surprising quick recovery from the Rona has left currency crash hedges hanging. Bitcoin, gold, and the like are all a bit over-extended right now. Still, if there were any way to buy Bitcoin through a real exchange I would. I guess htere's that one ETF traded on Swedish NASDAQ, but the SEC is being ridiculous about it at this point. I couple years ago that conservatism made sense, but it's clear Bitcoin isn't going to vanish, and isn't even all that volatile as commodities go.
...and (Score:2)
it's back up again.
Re:...and (Score:5, Insightful)
The title is pure clickbait. Almost every time someone says "bitcoin crashed" it only means it's back down to the level it was a few days ago.
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A bitcoin move of less than 20% isn't a crash or a surge; it's just Tuesday.
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Last month it was at 6500, now it "crashes" to just 8600?
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Slow news day on the Trump front I suppose.
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Let's give them something... "Trump used COVID-19 to cause a Bitcoin crash!"
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That's only because every other article says that "bitcoin spiked"
Chock full of useful tidbits (Score:3)
The market is in a state of information and position overload
Cool, I've revised my portfolio accordingly.
Tulips (Score:5, Informative)
Why does anyone put money into it? I don't recall.
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It's an online casino gaming token, nothing more. The casino could be shut down any time, or subject to new laws that drastically change the value of the token overnight, but people play for the thrill.
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Who exactly can shut down bitcoin? Which country controls bitcoin? You clearly don't understand bitcoin or economics. Your reading may be the issue, or lack thereof.
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Oddly enough, the IRS (I know you said banks) doesn't care if your income is by illegal means [irs.gov]. So long as you report your income and losses and pay the appropriate taxes, they're happy.
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They don't promise not to refer you to the FBI or local authorities for investigation if you put Narcotics Trafficker down as your occupation, AFAIK. It's designed to create a catch-22: you either fail to report the illegal income and become guilty of tax evasion, or you effectively confess your crimes.
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That's why you put pharmacist instead.
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I"m guessing your white (Score:2)
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Bitcoin is an unrealized asset. How does it affect your IRS/Banking statement unless you sell it, in which it becomes a realized asset and is taxed as such. An unrealized asset isn't taxable. If you dig up gold in your back yard, you don't pay tax on the gold, You pay tax when you sell it. Your bank can't handle bitcoin nor does it care if you sold it to get the money.
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What? It's treated as taxable income just like anything else. What are you smoking? It isn't tax free.
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Bitcoin is not taxable income. It is not a currency. Its a stored asset. DO you pay tax on gold you dig up in your back yard? Not unless you sell it.
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BITCOIN is not a taxable income. It is considered property. You are taxed on a sale, and only on the sale. you don't profit by owning bitcoin, you profit in selling the asset. Lack of knowledge doesn't seem to prevent your comments from being fully gibberish.
Transfer (Score:2)
It's a relatively convenient way to send money overseas. Not all international banking systems play nice with each other.
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It's a relatively convenient way to send money overseas. Not all international banking systems play nice with each other.
If you're headed to an economy whose currency doesn't trade internationally it's probably better to take a suitcase full of tradeable basic staples like dried beans or flour instead of bitcoins.
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To be fair, if you have a good job overseas, it may be a reasonable way to get money to your sister back in the old country, to support your aging mother.
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Please direct me to an service that will exchange tulips for USD. Because I can do that all day right now with a dozen bitcoin exchanges. If I lose money in the stock market does it come back? No. Same deal here.
Actually yes, it does. (Score:2)
> If I lose money in the stock market does it come back? No.
Actually yes. The Nasdaq today is higher than it was 5 years ago; 5 years ago was higher than 10 years ago, 10 years ago was higher than 15 years ago, etc.
Over any five year period you'd gain. The sole exception was if you bought in late 1999 - early 2000, it took a bit longer to come back.
If you bought ONLY (Score:2)
I should have said if you bought ONLY at the peak, the single worst thing anyone could do. Obviously most people have their investments in their 401k processed every pay day, so they would have bought in 1998, early 1999, etc. In total, they'd be better off after just a few years.
With the same $ going into their 401k, that would buy more shares when prices were low. So yeah even looking at the five-year period around the worst event in the history in the Nasdaq, you'd still get that money back pret
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BTC the global cap is higher now than it was five years ago. It is higher than it was 5 years ago as well. In 2010 BTC total cap was roughly 43.7 million. It is now worth 163 billion. There have been highs and lows but where has bitcoin gone and lost value over a 5 or ten year period. In the first quarter of 2020 BTC fell 10 percent which is lower than the losses on the major US Stock indexes.
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Or did you mean Tether, which is sort of like dollars in that it's backed by bland assurances and an unauditable basket of "assets", but very unlike it in that nobody accepts it for goods and services?
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It's called a flower shop, provided you own a farm.
There's some down the road a ways.
Re: Tulips (Score:3)
If bitcoin goes to zero, the worst that will happen is the flood of slashdot articles on it, all with leading headlines like, "Was Bitcoin a good idea after all?", "Should we replace bitcoin with another crypto currency?" and "were they right when they said bitcoin was different than tulips?"
Not much of a crash (Score:2, Insightful)
Even a 13% drop is not that huge, and could well have been market manipulation to acquire more Bitcoin cheaply before the halving as anything else.
Source link? (Score:2)
Seems to be this one:
https://finance.yahoo.com/news... [yahoo.com]
Good. (Score:4, Informative)
I've yet to hear a viable use case for Bitcoin outside of dodgy transactions and money laundering. There is no advantage to it and lots of downsides. I like having my bank deposits insured by the FEC.
Yes, but no .... (Score:2)
My problem with Bitcoin is that it's the v1.0 of crypto-currencies. The huge inefficiency with power consumption for transactions to happen (and the long delays for them to complete) makes it pretty unusable as a practical form of payment for day to day purchases.
That doesn't mean the whole concept is bad though. I'm absolutely convinced that the US dollar is going to implode eventually. The main thing keeping it from happening right now is the fact so many other things world-wide are tied to and dependen
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Barring some massive, permanent pullback from global trade, I think the dollar will be kept propped up by the need for a global currency of exchange. The US dollar suffices for this because of reasonable transparency and the independence of the Fed as a source of monetary policy and the sheer size of the US economy providing liquidity and convertibility.
There's really only two other possible candidates -- the Yuan and the Euro. The Yuan is close in terms of economic scale, but not even in the ballpark in
Re: Good. (Score:2)
Valuable use case: As experiment. As I believe some of the creators mentioned at the start. :)
Re:Good. (Score:4, Insightful)
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Wow, no water and no toilet? You're screwed!
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Down 13% not a crash for Bitcoin, 50-75% a crash (Score:5, Interesting)
You can't apply stock exchange sort of metrics to Bitcoin. Its volatility is very different.
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As a currency, it's supposed to have different volatility than a stock... but not more volatility than a stock.
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As a currency, it's supposed to have different volatility than a stock... but not more volatility than a stock.
Its not a currency. Its an asset. An asset that you can engage in barter transactions with. Which brings in all the requirements of your tax jurisdiction for defining the capital gain/loss on that asset you just traded for a cup of coffee. It is very much like trading some fraction of Apple stock for a coffee. Wallet software really needs to start calculating that to help people file their taxes.
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Most people are just not paying taxes on their bitcoin cause it's "on a computer". It's illegal, but I'm not sure we're ever going to catch up with them. Then again, bitcoin records are public and the IRS can go back pretty far for failing to disclose
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Then the IRS had exchanges provide customer info, including my exchange. I giggled.
Now some of you may be thinking but my exchange is in a jurisdiction that will not cooperate with the IRS. Note that in 2017 the IRS seized the European servers of a Russian exchange called BTC-e. Not only did they get records they got some of the
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I think the IRS got over 60% of the coins on BTC-e. I think there is a process where you can ask for them back if you file the proper paperwork.
Isn't that like the drug dealer calling the police and trying to file a report for someone stealing his 5 kilos of coke?
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I think the IRS got over 60% of the coins on BTC-e. I think there is a process where you can ask for them back if you file the proper paperwork.
Isn't that like the drug dealer calling the police and trying to file a report for someone stealing his 5 kilos of coke?
No its more like reporting a robbery where someone stole the cash, winnings from your illegal bookmaker, that you were going to use to buy the coke. "I'd like to report the theft of a tightly rolled wad of cash, two rubber bands and my fingerprints all over it.". :-)
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No, it's more like calling the IRS and saying "yeah, those coins are mine and I was trying to hide them from you. But in spite of there being no records because I was trying to hide them from you I want to claim them." Then paying your back taxes and fines
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You probably didn't have to report the value of the coins mined when mined, only when sold. But I have no idea. I would have assumed you "bought" the asset for the electricity and when sold you treated that as a basis. But I'm not an accountant. And I never successfully mined bitcoin, so I never looked into it.
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BITCOIN is not a currency, it is not taxable. Please stop with misinformation. Is gold taxable if you find a nugget in your back yard? Not until you sell it.
Bitcoin is not taxable unless you sell convert it/sell it for cash. So the 'on the computer' part you are making fun of is totally uninformed. It isn't illegal, and your comment is flat out incorrect.
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I mean, hyperinflation in a currency normally leads to it being replaced, economic collapse or revolution You're going to hold any of those three countries (assuming you're talking about the Weimer Republic) as a non-failed state?
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Gold is another interesting example. Or any coins before they were backed as a fiat currency. The fact that not anyone can print a bitcoin and not everyone can make gold, means assets have a viable history of trade implications.
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You can't apply stock exchange sort of metrics to Bitcoin. Its volatility is very different.
And this is fundamentally why it won't ever be taken seriously.
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stock market crash 1929, Black Tuesday, black Thursday, Black Friday. The dotcom boom and bust. People would never allow stocks to get manipulated or for them to crash wiping out billions of dollars in customer investment lost in an instant. But nobody would ever take a system that crashes seriously.
Bitcoin is acting as a tradable security... (Score:2)
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The halving is an uncertainty, due to the lack of real knowledge what may happen to the price afterwards. Uncertainty brings in selling.
I thought it dropped because a single whale(or group of whales) were dumping $2million worth of bitcoins on an exchange at regular intervals?
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Past behavior does not apply to bitcoin today (Score:4, Interesting)
Trying to sound like the stock market. (Score:2)
Dont take the toy out of the box! (Score:2)
The problem with Bitcoin is the fact that is way too valuable to be used. Its price keeps on doubling so much, that only an idiot would spend it on anything.
Selling a bitcoins to say buy a car, buy a home, start your own business.... Will be a financial loss. As after you sell it, it price will rise so much that you could have had bought the same for less bitcoins.
Steady currencies that don't go up too fast. Means that home that you bought with 200,000 us dollars, can be sold for 300,000 in 30 years.
vs tha
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The problem with Bitcoin is the fact that is way too valuable to be used. Its price keeps on doubling so much, that only an idiot would spend it on anything.
Selling a bitcoins to say buy a car, buy a home, start your own business.... Will be a financial loss. As after you sell it, it price will rise so much that you could have had bought the same for less bitcoins.
It's gambling. You have to know when to exit the game and be willing to walk away with what you've already won. That's how the house wins: people get greedy and chase the bigger payouts and often go bust. Gotta be willing to walk away with what you have and not get haunted by the "what if".
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Who exactly is the house in open source blockchain? You're analogy is worse than Stallone in Copland.
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bitcoins are divisible to satoshi. Do people not purchase anything when the dollar goes up or gold goes up?
Re:The what? (Score:5, Informative)
The reward for mining a block is cut in half.
Re:The what? (Score:5, Informative)
The reward is cut in half after every 210,000 mined blocks. They are approaching that number, again, likely today.
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This is great news. The value of my bitcoins will double as a result!
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The complexity decreases if the number of blocks transacted falls below band.
If the number of blocks transacted increases, the complexity increases.
The algorithm is designed for constant time implementation.
The second, is the per-transaction fee will become more lucrative.
It's nearly free to make a transactions, as miners are pushing for blocks, and taking the reward.
Once the reward is gone, the user-cost to have their transaction included will increase.
It should level out as processors and transactors stab
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By the algorithm. I don't recall the exact numbers, but Bitcoin algorithm tries to self regulate for varying computing power to ensure that 1 bloxknis mined every X minutes on average. Then the algorithm defines the reward for mining a block gets cut in half every Y number of blocks. So it works out that every couple of years the mining reward is cut in half, until like 30 or 40? Years from now when the reward gets dropped completely to zero. At that point no new coins will ever be mined, which is why they
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Years from now when the reward gets dropped completely to zero. At that point no new coins will ever be mined, which is why they say Bitcoin is not inflationary. No new coins can be generated to deflate your existing coins
By then I will perfect my quantum rest infinite power supply and ruin their plans by continuing to mine coins for free! Muahaha!
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Something something Beowulf cluster
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and when the cost is to high and miners give up?
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From what I understood, when some miners give up, the hashrate goes down and so does the mining difficulty. The whole thing is self-regulating.
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Miners aren't only paid to mine, the system is designed so miners still get paid when every bitcoin has been mined. The problem is the algorithm assumes the economics behind it will reward miners through a high cost of bitcoin via scarcity, i.e. every halving should see an increase in bitcoin price.
Unfortunately economics assumes that people give a shit about bitcoin or cryptocurrencies. But that was sooo 2010s. Time to move onto a new shiny hype and let the block chain fall back to irrelevance.
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and when the cost is to high and miners give up?
There is a mechanism where people who want to prioritize their transaction can pay a fee to prioritize their transaction in the queue. If miners drop out because the mining reward is too low, then the ability of the network to process transactions will be reduced. But if transactors offer a high enough fee, then the miners will stay. This may simply be a swap from miners earning bitcoins as a hash reward, to earning income from processing fees. And fees may become the norm if it takes several hours or perh
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To be clear, I'm not a fan of Bitcoin. Just passing along facts that I know about the implementation.
That's said, as the mining reward decreases, that's going to necessarily cause either the coin value to increase, the transaction cost to increase, or the number of miners to drop (and as I said, when that happens the algorithm will auto compensate for the combined hashing power to make mining less difficult and maintain the average time per block, thus increasing the likelihood for remaining miners to succe
Fees low because miners subsidized with rewards (Score:2)
No new coins can be generated to deflate your existing coins (unless the decide to fork the blockchain and update the code with new rules)
I'm sure the miners will respect the original design and voluntarily go out of business and scrap their expensive specialized hardware. ;-) yeah, yeah, fees, more on fees below.
Note that these miners also maintain the blockchain. So either we will go down an inflationary branch or fees will dramatically rise on the non-inflationary branch to keep generating miner income. In short fees are low now because miners are subsidized by rewards.
Or maybe bitcoin will fork from proof of work to proof of stake o
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So it works out that every couple of years the mining reward is cut in half, until like 30 or 40? Years from now when the reward gets dropped completely to zero.
It's estimated that it will take over a hundred years to mine the last "satoshi", which is is equal to 0.00000001 bitcoin.
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You are right. I got mixed up. I was thinking about not the final coins but about when it has nearly dried up. In 30 to 40 years over 99.9% of coins will have already been mined, and then it's an ever slower crawl for those last handful of coins. The remaining 80 or so years after that will be spent mining about 100 total coins, which is currently the amount mined in an hour or 2 of work.
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The numbers are:
Target is one block every ten minutes. The difficulty is adjusted periodically to try to hit that target. The difficulty value can be used as a proxy for how many hashes per second are being calculated by all the miners (which is itself a proxy for how much energy is being expended globally).
Approximately every four years (210,000 blocks), the reward is halved. It started at 50 BTC, is currently at 12.5, and will drop to 6.25 in about an hour. Current block number right now is 629996.
The
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By the same authority that forces everything else to do with bitcoin: 50%+1 of the mining capacity.
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When people around the world have to burn up twice as much electricity to race to make the same amount of bitcoin.
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It's called transaction fees; the base block reward is halved, but the value of the per-transaction donations has doubled.
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Yes. Those things charged by regular transaction processors that bitcoin was supposed to reduce to being inconsequential.
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Running a node generates profits for transactions handled. Mining with that node returns a bitcoin if successful The transaction fee is inconsequential when compared to a bank doing the same transaction with their added handling benefits err fees.
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Not from the point of view of the people doing the transaction. Way back when, Bitcoin was pitched as a solution to the problem of bank fees. My bank charges somewhere between $0 and $1 for transactions. The latter of those is ridiculous gouging. If I've done the math right, Bitcoin currently seems to cost around $31 per transaction just in electricity. Eventually that cost will have to be borne by transaction fees. But it won't be gouging because that's how much it actually costs!
Need a better solution.
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> nobody involved in this stuff passed basic economics.
that's OK, because you see Paul Krugman once made an oversimplified soundbite comparison between fax machines to the internet, and since he won a Nobel in economic this proves the entire discipline is a joke and can be ignored in favor of austrian Ponzi school potemkin decentralization whitepaper HODLbuggery. "Some hucksters* made money, therefore you are wrong, and envious. QED." /s
* on that subject, the lawsuit of Michael Terpin, crypto huckster e
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By "people" you mean companies subsidized by the Chinese government. Because there is no other way to remain profitable, you would be throwing money away. But I don't even believe that because what does China have to gain from it?
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what does China have to gain from it?
Surveillance of the black market.
Developing expertise in ASIC hardware design and manufacturing, letting the interest in virtual currency bootstrap this design and manufacturing sector. Its like a class project that generates income.
Re:The what? (Score:5, Funny)
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I kinda like the idea of electricity being set on fire! Though I guess technically that happens whenever there's an arc.
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Pedantics of chemistry.
As far as thermodynamics is concerned, burning something and running some electrons through a circuit is pretty much indistinguishable.
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I got me one of those, but I just call it a hammer.
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Just some scam looking for new victims. Nothing to see there, really.