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This is an opinion editorial by Max Keidun, the CEO of peer-to-peer bitcoin exchange Hodl Hodl.

The bitcoin lending space has suffered from several major issues in recent months and years, from the fallout of the Terra/Luna crash, impacting Celsius and BlockFi, and now FTX as well, to liquidity crunches given the sustained price drawdown, varying accusations of market manipulation and more.

All of these have led to significant losses, bankruptcies and a complete reshaping of the lending market. Many users have lost faith in bitcoin-based lending products and the market appears to be at its historical bottom, both in terms of volumes and public confidence.

As usual, the mainstream media blamed these crises on Bitcoin itself. But is any of this Bitcoin’s fault? Does it make Bitcoin any less attractive? Does it even mean that we shouldn’t consider bitcoin as lending collateral? No!Bitcoin Is Super Collateral, It’s The Lenders Who Have Failed

While Bitcoin's code is law, custodial lending platforms are trusted third parties, owned and managed by private entities. Trusted third parties are security holes. This was true before Bitcoin, and it is still true today.

Furthermore, most bitcoin lending platforms are poorly conceived, poorly developed and poorly managed. This doesn’t necessarily imply bad code. The code can be well written, properly audited and verifiably secure, but there may still be poor incentives that emerge from the design of the lending platforms. If the focus is to treat bitcoin as if it were a yielding asset, we are likely in for trouble.

The longer the “bitcoin lending” industry goes on, the clearer it becomes that most involved do not really understand how yield is generated. And as the saying goes, if you don’t know where the yield comes from, then you are the yield. What it really means is that your bitcoin is being used as the principal for risky investments, and it is likely only a matter of time before the house of cards starts to collapse.

I believe that the proper focus for integrating bitcoin into intermediated lending is to appreciate how valuable and unique bitcoin is, and to treat it as something to be borrowed against: to understand that bitcoin is super collateral. But what makes it so unique?

We can identify twelve characteristics that make it so:Bitcoin Is Liquid

Bitcoin is an extremely liquid asset. It is traded 24/7, with no weekend breaks and no banking holidays. Massive liquidity pools across a variety of fiat currencies are available globally. For lenders, this means that if you want to convert your collateral into fiat, you can do it instantly — either because the borrower has been liquidated or because the loan was repaid from the collateral.

This also allows for the hedging of risks. Bitcoin may be the only kind of loan collateral which can be instantly and dynamically hedged: a serious competitive advantage.Bitcoin Is Programmable

Bitcoin enables the creation of programmable lending products and ownership mechanisms. Among other benefits, this feature allows us to solve the problem of trusted third parties by building non-custodial lending mechanisms and storage systems. For example, we can distribute collateral claims or create conditional logic for redemption that will be automatically executed by the Bitcoin network, not the whims of a centralized financial institution.Bitcoin Is Scarce

There will only be 21 million bitcoin.Your collateral is getting more valuable over time, which means there is less incentive for you to sell, and likely more lenders who are willing to accept it. Bitcoin Is Flexibly Transparent

Bitcoin allows us to enable selective transparency of your assets when useful, but also allows complete anonymity when desired. In a lending scenario, for example, you can easily prove to a lender that you own and control the collateral under consideration.Bitcoin Is Sovereign

Bitcoin is yours. You have keys to your bitcoin just like you have keys to your house and your car. Bitcoin is your personal property. If you use a house or a car as collateral, you won't own it — your lender would. With bitcoin, you can still conditionally own it during your lending agreement. In fact, with the right tools, you can not only use but continue to use this collateral during the period of the lending agreement.Bitcoin Is Secure

Bitcoin is protected cryptographically, economically and socially. It is sensible to think of Bitcoin's lowest-level network security expanding to the set of tools built on top of it. For example, you can distribute ownership of your collateral between multiple independent parties, use offline wallets and utilize many more security methods.Bitcoin Is Market Driven

Bitcoin is the essence of a market-driven asset. The price of bitcoin reflects the market almost instantly, and it's not determined by one or several individuals. It is extremely difficult to manipulate the price of bitcoin. Bitcoin costs almost the same in fiat in any part of the world and is determined by a global market. Bitcoin Is A Real-Time Asset

Not only can we track the price of bitcoin collateral in real time, but Bitcoin's blockchain allows you to track your collateral address in real time also. Any price fluctuation can be reacted to appropriately. As mentioned, there are no weekends or holidays, and the market is always open to everyone, so nobody will close the market on a Friday and open on a Monday with different prices.Bitcoin Is Objective

Bitcoin is honest. Bitcoin in Miami costs the same amount of fiat as it does in Lugano or Riga. Bitcoin doesn't care whether you like it or not. The price of bitcoin cannot be determined by your personal views or your forecasting capabilities. To borrow against bitcoin, you only need to have bitcoin. Your credit history, social score or anything else is irrelevant to the lender as long as you have the collateral to borrow against.

Take real estate, for example. The same amount of money can buy you different properties in different countries with the same levels of economic and social development. What makes the difference then? Why can you buy a mansion on the coast of the Mediterranean in Spain or Italy and, for the same amount of money, you won’t be able to afford a proper house in the Bay Area in the U.S.?

It’s due to humans' irrational valuation capabilities. Because real estate valuation is primarily based on human factors, banks evaluate your property as either too expensive or too cheap, depending on market conditions and their plans.

Or take stocks, for example. Your stocks in a certain company can have good underlying conditions and great potential growth opportunities, but suddenly the CEO of this company can tweet some stupid thing, and you are losing money or getting liquidated. Meanwhile, Bitcoin is fair.Bitcoin Is Global

Bitcoin is globally accessible and globally distributed. For lending, this means that you can borrow remotely from anyone in the world, and you can lend money using bitcoin as collateral to anyone in the world. Bitcoin is neither limited to, nor exclusively exposed to, specific local markets.Bitcoin Is Digital

In a digital age, with digital commerce, we need digital collateral. Bitcoin is already online. It's here, on your machine, your phone, your cold wallet. Bitcoin allows you to borrow remotely and instantly. There is no need to digitize bitcoin as you need to do with real estate, land, cars or any other assets. It's already digital. Bitcoin Is Decentralized

There is no single point of failure in Bitcoin. Bitcoin has been attacked multiple times, and yet it is growing and expanding globally. No committee or person is responsible for Bitcoin. Having decentralized collateral significantly decreases your dependence on single events and failures of companies or people. You are protected by a distributed network. Will Lending Ever Match Bitcoin’s Potential?

Powerful collateral requires powerful tools. Is it possible to build lending tools that will match bitcoins' value? In order to do so, we all need to take a step back and check Bitcoin's white paper.

After reading Bitcoin’s white paper, you will understand that in order to build a successful lending product (in fact, any type of Bitcoin product!), you need to meet three main criteria. If your product has all three, congrats you have passed the test. Let's call it “The Satoshi Test.”Your service should be non-custodial. Remember: not your keys, not your coins. When using custodial lending platforms, you are exposed to the risk of losing your collateral completely. Because, as soon as bitcoin hit platform wallets, they are no longer yours. This is exactly what happened to customers of the many lending and trading platforms that have failed in 2022.Bitcoin is a peer-to-peer, electronic cash system. Once again: peer to peer. Instead of acting like a middleman, you need to provide technical tools for individuals or businesses to operate with each other. Or you can be a business that will allow customers to directly interact with your platform. A good example is a platform that allows customers to buy bitcoin directly into their own cold storage. Your platform should be Bitcoin only, meaning that the only collateral you should work with should be bitcoin. Shitcoins are risky, and shitcoins' code is a ticking time bomb. By integrating many blockchains into your product, you are exposing the most valuable to the most vulnerable.

There is an extra criteria that could be met: anonymity. If you are building non-custodial, Bitcoin-only, peer-to-peer products, this can and will allow you to offer anonymity and better privacy for your customers because security is not full without anonymity and the data of your customers should be protected, as well as their funds.

A good way to pass The Satoshi Test is to utilize multisig. Multisig is a simple and secure yet powerful tool. It allows you to offer peer-to-peer interactions to users, leverage non-custodial escrows and use only Bitcoin. It also allows you to offer better privacy for your users.

Take, for example, a multisig setup with three keys where the consensus mechanism is reached by entering at least two keys. This is called “two-out-of-three Bitcoin multisig.” In that type of setup, you — as a technical tool provider — can become one of the key holders, but you won’t have full control over customer funds (because you only have one key!), thus ensuring that these funds won’t be moved and rehypothecated. For example, the lender will have one key, the borrower will have another one, and the provider will have the third key. This kind of setup will allow users to verify that funds are only used by them, and that all parties must act according to rules in order to reach consensus, and that no single party can act in a dubious and shady way.

In fact, there are already powerful platforms that use Bitcoin multisig and offer peer-to-peer interactions. These platforms can provide lenders and borrowers from all over the world with easy two-out-of-three multisig setups, where each side (including the platform itself) has one key. The multisig is created on Bitcoin’s public blockchain, meaning that you can check your collateral at any time through any block explorer. And the best part is that no funds can be rehypothecated because the platform itself only has one key that ensures that every involved counterparty is acting in a good and professional way. Proper Lending Platforms Might Be Useful For HODLers

Although the lending market at the moment is experiencing turbulence and contagion effects, it is a good time to educate yourself about proper lending platforms that might be useful for any true HODLer in the future. As soon as we enter the next bull cycle, there will be less incentive to sell bitcoin and more interest in holding it for the long term and borrowing against it. Be prepared, because bear markets don’t last forever. HODL and learn!

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

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‘Crushing blow’ for care homes as they face ban on overseas recruitment

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'Crushing blow' for care homes as they face ban on overseas recruitment

Care workers will no longer be recruited from abroad under plans to “significantly” bring down net migration, the home secretary has said.

Yvette Cooper told Sky News’ Sunday Morning with Trevor Phillips programme the government will close the care worker visa route as part of new restrictions which aim to cut the number of low-skilled foreign workers by about 50,000 this year.

Politics live: Govt launches crackdown on migration

She said: “We’re going to introduce new restrictions on lower-skilled workers, so new visa controls, because we think actually what we should be doing is concentrating on the higher-skilled migration and we should be concentrating on training in the UK.

“Also, we will be closing the care worker visa for overseas recruitment”.

The move comes ahead of the Immigration White Paper to be laid out this week, which will give more details on the government’s reforms.

Care England, a charity which represents independent care services, described Ms Cooper’s comments as a “crushing blow to an already fragile sector” and said the government “is kicking us while we’re already down”.

Its chief executive Martin Green said international recruitment is a “lifeline” and there are “mounting vacancies” in the sector.

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Reform: Immigration ‘should be frozen’

Cooper refuses to give immigration target

Ministers have already announced changes to the skilled visa threshold to require a graduate qualification and higher salary.

Ms Cooper told Trevor Phillips that this – along with the care worker restrictions – will result in a reduction “probably in the region of up to 50,000 low-skilled worker visas in the course of this year alone”.

However, she refused to give a wider target on the amount the government wants to see net migration come down by overall, only saying that it needs to come down “substantially”.

Ms Cooper said the Conservatives repeatedly set targets they couldn’t meet and her plan was about “restoring credibility and trust”.

She said: “It’s about preventing this chaotic system where we had overseas recruitment soar while training in the UK was cut and we saw low-skilled migration in particular, hugely go up at the same time as UK residents in work or in training fell. That is a broken system. So that is what we need to change.”

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Care companies say they can’t carry on after NI hike

The government is under pressure after it’s drubbing at the local elections, when Reform UK took control of 10 councils in England.

Richard Tice, Reform’s deputy leader, said the party’s strong performance was because people are angry about both legal and illegal immigration and called for immigration to be “frozen”.

He told Trevor Phillips: “The reality is that we’ve just won by an absolute landslide – the elections Thursday last week – because people are raging, furious, about the levels of both illegal and legal immigration in this country.

“We need to freeze immigration because the way to get our economy going is to freeze immigration, get wages up for British workers, train our own people, get our own people who are economically inactive back into work.”

Net migration – the difference between the number of people immigrating and emigrating to a country – soared when the UK left the EU in January 2020.

It reached 903,000 in the year to June 2023 before falling to 728,000 in mid-2024.

According to the Home Office, the number of ‘Health and Care Worker’ visas increased from 31,800 in 2021 to 145,823 in 2023, with the rise primarily due to an increase in South Asian and Sub-Saharan African nationals coming to work as care workers.

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Sky News investigates UK care homes

The number decreased significantly in 2024 to 27,174 – due to measures introduced by the Tories and greater compliance activity, the government said.

The crackdown is likely to cause concern in the care sector, which has long warned that low wages are driving a recruitment crisis and is now also being hit by the rise in employer National Insurance.

Speaking to the BBC’s Sunday with Laura Kuenssberg, Ms Cooper said there are around 10,000 people in the UK who came on care worker visas for jobs that didn’t exist and “care companies should recruit from that pool”.

“They came in good faith but there were no proper checks, they were badly exploited,” she said.

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Nadra Ahmed, of the National Care Association, told Sky News this was a “scandal of the Home Office’s own making”, with care workers allowed to come to the UK “legitimately but with spurious contracts from profiteers preying on an already fragile sector”.

She added: “Understandably, many of those who are displaced have a preference of which part of the sector they work in or are qualified to do so, based on the promises made to them.

“Our preference would always be to recruit from within our domestic options but sadly we are not able to generate enough interest in social care when the funding remains a barrier to ensure that pay adequately rewards the skills and expertise of our workforce.”

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Labour’s shift on migration may assuage voters’ concerns – but risks harming struggling care sector

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Labour's shift on migration may assuage voters' concerns - but risks harming struggling care sector

Labour and the Conservatives have been left reeling from Reform UK’s rampant success at the local elections.

And it seems both have taken a clear message from the insurgent party’s signature attitude towards migration.

Politics live: Care homes face ban on overseas recruitment

Polls regularly show the issue is a top concern for voters. While stopping the boats driving illegal migration is proving as difficult for Labour as it was for the Tories – the government has the levers to control legal migration much more directly.

This week, Sir Keir Starmer and Yvette Cooper have decided it’s time to pull them, with their long-awaited white paper due to be published on Monday. But the trade offs involved in reforming the system certainly aren’t without controversy.

Speaking to Sky’s Sir Trevor Phillips to sell her plans to reduce visa numbers, the home secretary repeatedly talked about “restoring control”.

It’s no coincidence to hear her invoking the language of Brexit – highlighting the fact it was Boris Johnson who presided over the spiralling increase in migration after the vote to leave the European Union – and attempting to court the voters who believed doing so would close the borders to the influx of overseas workers.

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“It’s about restoring control and order,” she said. “It’s about preventing this chaotic system where we had overseas recruitment soar while training in the UK was cut…

“That is a broken system. So that is what we need to change.”

The home office plan is to link the reduction in overseas workers with government efforts to get the economically inactive back into work. In future, only those with degree-level qualifications will be eligible for skilled worker visas.

Employers who want to employ lower-skilled workers, on a temporary basis, will have to demonstrate they are training and recruiting UK workers as well.

The home secretary says 180 occupations will be removed from the shortage list, with the shortfall filled by training schemes to fill the gaps with home-grown workers. Questions abound about how training schemes will marry up with immediate business needs now.

But it’s the closure of the specific care worker visa which is leading to the loudest alarm bells thus far.

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Reform: Immigration ‘should be frozen’

Many in the sector are desperately worried about pre-existing staffing shortfalls, unconvinced by government advice to recruit from a pool of 10,000 workers already in the UK on care visas.

Professor Martin Green, of Care England, said: “This is a crushing blow to an already fragile sector. The government is kicking us while we’re already down.”

But the government is determined to try and wean the economy off its dependence on overseas labour.

The increase in net migration is staggering. Before Brexit, the highest figure was 329,000, in the year up to June 2015.

But by June 2023, the annual number had soared to 906,000. While last year that figure fell to 728,000, following restrictions on dependents on care and student visas – the number is still strikingly high.

Kemi Badenoch’s Tories have decided there’s no room for evasion and have regularly issued dramatic apologies for the decisions of the past.

“The last government,” said Shadow Home Secretary Chris Philp on Sunday, as if he had no part of it, “made some very serious mistakes with immigration. They allowed it to be far, far too high…that was a huge mistake.”

But Mr Philp is characteristically full of criticism of Labour’s “failure” on the “radical reforms” needed.

He wants to see parliament voting for an annual cap on numbers, although hasn’t specified what that would be.

👉 Click here to listen to Electoral Dysfunction on your podcast app 👈

Ms Cooper says migration targets have no credibility after years of Tory failures – but also acknowledged that she wants the numbers to fall “substantially” and “significantly” below 500,000.

Read More:
The ‘tricky balancing act’ facing Starmer over US trade deal
Chancellor insists Labour rebels ‘know the welfare system needs reform’

She claims the skilled worker visa changes will lead to 50,000 fewer visas being issued this year alone – a small proportion of that overall too, but a quick result all the same.

Will it be enough?

Reform UK are clearly delighted to be directing the government’s policy agenda.

Deputy leader Richard Tice told Sir Trevor “the Labour Party is talking the talk. Will they actually walk the walk? I actually think the people are voting for us because they know that we mean it.”

But the policy is a risk.

Assuaging voters’ concerns on migration could mean taking a serious hit to an already anaemic economy and struggling care sector. Not to mention the longer-term political decision to move the party firmly to the right.

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World

‘Have the meeting now!’: Trump says Ukraine should ‘immediately’ agree to direct talks with Russia

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'Have the meeting now!': Trump says Ukraine should 'immediately' agree to direct talks with Russia

US President Donald Trump has demanded that Ukraine should “immediately” agree to direct talks with Russia in a bid to end the war.

It comes after Ukraine’s President Volodymyr Zelenskyy said his team were “ready to meet” Russian representatives following Vladimir Putin suggestion of peace talks, subject to an unconditional ceasefire starting on Monday.

Russia‘s president put forward the proposal for talks in Istanbul on Thursday after European leaders including Sir Keir Starmer threatened him with fresh sanctions if Russia failed to comply with an unconditional 30-day ceasefire starting on Monday.

Analysis:
Why calls for Ukraine talks are likely a delaying tactic from Putin

However, in a post on his Truth Social platform on Sunday, Mr Trump said he was “starting to doubt that Ukraine will make a deal with Putin”.

He urged them to accept the meeting invitation “immediately”, adding “have the meeting now”.

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Putin’s call for peace talks genuine?

Mr Trump wrote: “President Putin of Russia doesn’t want to have a ceasefire agreement with Ukraine, but rather wants to meet on Thursday, in Turkey, to negotiate a possible end to the bloodbath.

“Ukraine should agree to this, immediately. At least they will be able to determine whether or not a deal is possible, and if it is not, European leaders, and the US will know where everything stands, and can proceed accordingly.

“I’m starting to doubt that Ukraine will make a deal with Putin, who’s too busy celebrating the Victory of World War ll, which could not have been won (not even close!) without the United States of America.

“Have the meeting now!”

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Kremlin: ‘We don’t share Starmer’s view’

Shortly after Mr Trump’s post, Mr Zelenskyy posted on X saying: “We await a full and lasting ceasefire, starting from tomorrow, to provide the necessary basis for diplomacy.

“There is no point in prolonging the killings. And I will be waiting for Putin in Türkiye on Thursday. Personally. I hope that this time the Russians will not look for excuses.”

When Mr Putin first suggested the talks, Mr Trump hailed it “a potentially great day for Russia and Ukraine” and said he would “work with both sides to make sure it happens”.

Read more from Sky News:
Pope Leo calls for Ukraine peace
Michael Clarke Q&A on Ukraine war

Turkish president Recep Tayyip Erdogan also said he “fully supported” Mr Putin’s proposal and was ready to host the talks, after the two leaders spoke over the phone on Sunday.

But security and defence analyst Michael Clarke told Sky News presenter Matt Barbet there is a “long way between now and Thursday” and a “fair bit of brinkmanship” going on.

He said even if the talks do go ahead, “the chances are they’ll extend over a long period and there won’t be a ceasefire as a result of them, and the Russians will keep playing this out”.

European leaders hold call with Ukraine. Pic: Number 10
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European leaders hold call with Mr Trump. Pic: Number 10

Mr Putin’s counteroffer of talks came after Sir Keir, Mr Zelenskyy, French President Emmanuel Macron, recently elected German Chancellor Friedrich Merz and Polish Prime Minister Donald Tusk met in Kyiv.

The leaders said they had secured Mr Trump’s backing after briefing him on the progress made on the so-called “coalition of the willing” plans in a 20-minute phone call.

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