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23 Central Banks Divulge Their Digital Currency Requirements

Par Kevin Helms
23 Central Banks Divulge Their Digital Currency Requirements

Twenty-three leading central banks participated in an in-depth survey on their digital currency developments and requirements, including fungibility, convertibility, and availability. They also discussed the timeframe for issuing consumer-ready central bank digital currencies and divulged their greatest concerns about implementing them.

Also read: China Ranks 35 Crypto Projects as President Xi Pushes Blockchain

The First CBDC: When and Where

The OMFIF, the Official Monetary and Financial Institutions Forum, is an independent think tank for central banking, with a focus on economic and monetary policy, asset management and financial supervision and regulation. The organization published a 36-page report this week on retail central bank digital currencies (CBDCs), commissioned by IBM. Entitled “Retail CBDCs: The next payments frontier,” the report encompasses an “in-depth survey of officials from 23 central banks in advanced and emerging economies,” the OMFIF explained.

The central bank survey, which was conducted between July and September, “projects that the first CBDC will be produced within five years in a small economy and respond to a specific policy objective with a well-defined use. The OMFIF added that a number of central banks worldwide are seriously considering developing and issuing a consumer-ready CBDC, which is likely to require some form of public-private partnership. The report elaborates:

We are likely to witness the introduction of a central bank – that is fiat – retail digital currency within the next five years, either as a complement to or as a substitute for notes and coins.

As for which country will be the first to issue a central bank digital currency, the OMFIF asserted that “It is improbable that the first such issuance will come from a G20 central bank; it is considerably more likely to be launched in a smaller and less complex economy in response to a specific policy objective and use case.”

A number of G20 countries are exploring how they can issue CBDCs, with some closer to doing so than others. Some people believe that China will be the first country to issue one since the head of the PBOC’s digital currency research institute said in August that it was “almost ready.” However, PBOC Governor Yi Gang clarified in September that there was no timetable for its rollout, emphasizing the need for further research. Moreover, a cryptography bill was recently passed in China after President Xi Jinping made a bullish speech about blockchain technology.

23 Central Banks Talk CBDCs

The OMFIF surveyed 13 central banks from advanced economies and 10 from emerging markets. Among respondents, 69% revealed that “providing an alternative to cash and other payment instruments” was their main motivation for exploring the development of a central bank digital currency. 62% believe that CBDCs could improve cross-border payments which are currently still cumbersome, expensive, and slow, unlike domestic retail payments which have become fast and efficient. The report details:

CBDCs should be available offline and function wherever cash is currently used, with 73% of respondents requiring CBDCs to be available under all circumstances. More than 20% prefer decentralised systems to improve resilience.

Among the central banks surveyed, 69% “identified CBDCs’ ability to foster trust in monetary authorities and the financial system as their key strength,” the report describes, noting that they are not explicitly concerned about private sector digital challengers.

Respondents also believe that “CBDCs must be fully fungible and convertible to and from fiat currency to solve frictions in end-to-end payments and remittance networks” and should “have a disaster recovery plan, especially in jurisdictions where there is a higher frequency of weather-related power outages or network connection issues.”

Meanwhile, 29% are concerned about the potential impact of implementing CBDCs on financial stability, with almost 45% suggesting that “there would be a risk of reduction in commercial bank money and functions in the monetary system.” However, 83% felt their role would not change significantly. The report further reveals:

82% said their greatest financial stability concern from CBDC implementation was the risk of digital bank runs happening at a higher speed than before.

In addition, 50% of respondents “expressed distinct concern about the possibility that a material change could occur in the market structure and stakeholder profile,” emphasizing that “This may result in the widespread use of decentralized, private digital currencies as an alternative to public money.” 64% of respondents said that “outsourceable ‘intermediation’ functions, such as customer onboarding, would be important for CBDC implementation.” The OMFIF also noted that, based on the survey results, they “do not envisage privately-issued digital currencies gaining significant traction or acceptance in a universal context, although there may be closed private networks in which they operate.”

Do you think central banks should issue digital currencies? Do you think China will be the first to issue one? Let us know in the comments section below.


Images courtesy of Shutterstock and the OMFIF.


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The post 23 Central Banks Divulge Their Digital Currency Requirements appeared first on Bitcoin News.

Kuverit Launches Multi Trader Marketplace

Par Bitcoin.com PR
Kuverit Launches Multi Trader Marketplace

This is a paid press release, which contains forward looking statements, and should be treated as advertising or promotional material. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the press release.

To what was considered as the “dot-com bubble” in the year 2000, Blockchain technology has become as sensationalised and disruptive as the internet was in the late 1990s. Even though the technology is still in its infancy stage, individuals and corporate bodies are already leveraging on it to expand their business and shift their paradigm.

People are more eager to embrace the changes that the future holds, which has given birth to many groundbreaking innovations. While many industry giants were at first skeptical and others were indifferent about the disruptive power of Blockchain, the fear of being left behind seems to be a compelling force to join the Blockchain wave at the moment.

This has seen the likes of JP Morgan, Facebook and Twitter looking in this direction. Needless to say, many countries are already exploring possible ways that Blockchain can aid healthcare, education and finance, whilst also improving the supply chain across various other industries.

As these sectors gain further recognition and with the elimination of other 3rd parties involved in this process, P2P networks have grown stronger than before. For efficiency, decentralisation and reduced risks, many Blockchain financial corporations have already utilised the P2P distribution networks due to its numerous benefits.

Peer-to-Peer (P2P) networks became known during the 1990s. Adopted by sites such as Napster, Gnutella, Limewire and Kazaa, P2P made many music-loving teens happy because they could share and download their digitised music files.

Today, the same concept has been replicated on Blockchain, but in a much more improved way. Many big players are already exploring a better way to efficiently leverage Blockchain technology for an efficient and reliable P2P distribution system. One such notable mention comes from the Kuverit Blockchain project.

Kuverit is a modern, next-generation P2P blockchain project. It offers its users a Guarantee Platform built on top of Blockchain technology.

The uniqueness of the“Multi-Trader Marketplace” is how it’s designed to protect its users from the potential of a financial loss in any form of two-way transaction.The platform’s technology and inner systems provides more than one way for its users to protect themselves against financial loss.

By leveraging the essence of P2P distribution networks and Blockchain to solve the problem of theft and various losses associated with day to day monetary transactions, Kuverit has created a unique market differentiation among its contemporary players.

Some recognise Kuverit as the biggest mainstream blockchain project of our generation while others appreciate it as a project with the highest potential for global impact. With a target audience of over 780 Million people, no platform to-date seems to have sparked as much interest in the Crypto-space. The prospects are huge!

Kuverit aims to solve a $3 Trillion, mainstream problem with a global, mainstream solution!

Within this P2P platform, optimal security of end user funds is a top priority. To this end, the platform infrastructure has been constructed to ensure a viable and secure environment that will protect users against financial loss as a result of fraudulent activities.
This concept is made possible through its “Guarantee Trading Platform”.

According to Kuverit’s Whitepaper, the feature is available to both individual and corporate entities who need a Guarantee on a two-way transaction.

How the guarantee process works is simple.

The risk is taken by a Guarantor (in exchange for a small fee) who will provide a cast iron assurance that should your transaction end badly and you sustain a financial loss, then you will be “Kuvered”.

Reputation is a very important aspect of the Kuverit platform.

Just like eBay, which allows users to check the reputation of the other party in the transaction before the transaction takes place, the same reputational scoring system will be replicated on the Kuverit platform.

Lack of basic technical knowledge or ease of access has been identified as one major setback to newcomers joining or utilising the Blockchain ecosystem. Most Blockchain platforms are thought to be generally complex, which may not be entirely wrong. However, Kuverit solves this challenge by providing a seamless, user-friendly platform to improve the onboarding and navigating through the platform. According to critics, it is currently on track to become one of the top 15 crypto asset holdings globally.

In the near future, the Kuverit Business Development team aims to negotiate with established platforms such as eBay, Amazon, Gumtree and AirBnB (to name a few) for an integrated partnership and collaboration. In doing so will allow these established platforms to offer a new layer of protection to their users and aid in the exponential growth of the Kuverit user-base in the mainstream market. This is why Kuverit refer to themselves as building the “Amazon of Guarantees”. It will not take long for Kuverit to become a household brand!

The emergence of the P2P networking and the central role it plays within Blockchain technology in particular could be seen as welcoming a new system of communication, which offers optimal trust and security to both participating entities be it individuals or business organisations.

Supporting Link
https://www.kuverit.io/

This is a paid press release. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.

The post Kuverit Launches Multi Trader Marketplace appeared first on Bitcoin News.

CME Group Publishes Bitcoin Options Specifications

Par Jamie Redman
CME Group Publishes Bitcoin Options Specifications

In mid-September, the foreign exchange company CME Group announced the launch of options on its bitcoin futures contracts in Q1 2020, pending regulatory review. CME Group executive Tim McCourt said there was “increasing client demand” for the firm’s bitcoin derivatives and now the company has published specifications for the options products.

Also Read: French Ministry of Education Publishes Bitcoin Resource Guide for Educators

CME Group’s Bitcoin Options

The global markets company CME Group has provided clients with the ability to hedge or trade benchmark options on futures across nearly every asset class. The firm has an average daily volume of $4.3 million this year and aims to offer options on bitcoin futures so investors can have a variety of different methods to trade the asset. When CME announced the launch of bitcoin options, McCourt detailed that the new product will provide “clients with additional flexibility to trade and hedge their bitcoin price risk.” This week, following Bakkt’s recent volume surges, CME published the preliminary contract specifications for the options. Price values will be based on the CME CF Bitcoin Reference Rate (BRR) which is determined by a variety of major crypto exchanges.

CME Group Publishes Bitcoin Options Specifications
CME’s bitcoin futures volume and open interest on 10/28/19.

The contract unit will consist of one bitcoin futures contract, which is approximately five BTC quoted in USD. There’s a minimum price fluctuation and the listing cycle will mirror the firm’s bitcoin futures exposure. CME’s bitcoin options on futures will be traded between Sunday through Friday on Globex and Clearport. The company notes that the BTC options product is subject to revision and review by financial regulators. “We’re working to launch options on those futures,” McCourt said to crypto analyst Benjamin Pirus in a recent interview. “The option on the bitcoin future will give the holder of that option, either a put or a call, the right — but not necessarily the obligation, to either purchase or sell the underlying futures contracts at maturity.” McCourt further stressed:

It’s very similar to the way other options in the marketplace work. The difference here is the underlying, or the deliverable, of the options contract, is a CME Group bitcoin future.

CME Group Publishes Bitcoin Options Specifications
CME Group’s bitcoin futures volume at 11 a.m. EST on 11/2/19

Is Bitcoin Being ‘Tamed’ Like a Traditional Investment?

Bakkt’s physically-delivered bitcoin futures product has been getting a lot of fanfare lately after the exchange topped a few new records and CEO Kelly Loeffler announced Bakkt will be offering options on bitcoin futures as well. Despite the all-time highs at the Bakkt warehouse, CME Group’s BTC derivatives have seen much more volume. CME’s Globex saw 7,242 bitcoin futures contracts on October 28 and 3,284 in open interest. The following days on Globex through November 1, contracts were between 2,200 and 3,687. November’s CME bitcoin futures contracts today stand at 2,641 contracts and December positions are starting to pile up as well.

CME Group Publishes Bitcoin Options Specifications

The crypto derivatives markets and products have matured a great deal since they launched and it’s been a touch less than two years since CME launched its BTC-based futures. At the time, the company’s chairman emeritus Leo Melamed told Reuters in an interview that adding BTC futures was a “very important step for bitcoin’s history.” Melamed added that he believed institutional investors would be very interested in the new asset class. “We will regulate, make bitcoin not wild, nor wilder. We’ll tame it into a regular type instrument of trade with rules.” Since then a slew of different companies have offered bitcoin-based derivatives products and futures are coming to other cryptocurrencies like ETH and BCH as well. Reports detail that BCH futures are expected to debut on a CFTC-regulated exchange in Q1 2020.

What do you think about CME’s bitcoin options specifications? How do you feel about the overall growth of crypto-based derivatives? Let us know what you think about this subject in the comments section below.


Image credits: Shutterstock, CME Group, Bitcoin Futures Volume Globex, and Pixabay.


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The post CME Group Publishes Bitcoin Options Specifications appeared first on Bitcoin News.

Another Chinese Lender Bailed Out After Bank Run

Par Lubomir Tassev
Another Chinese Lender Bailed Out After Bank Run

Yichuan Rural Commercial Bank, a lender operating in the central Henan province, has become the latest Chinese bank to be bailed out by the government this year. The small financial institution, which has around 30 branches only in the Yichuan county, experienced a bank run sparked by rumors that its top management was in trouble with the law and mounting speculations the bank was on the brink of insolvency.

Also read: Is China’s New Fascination With Blockchain Really Good for Bitcoin?

Bank Run Highlights Increasing Depositor Anxiety

Hundreds of depositors gathered at Yichuan Bank’s offices this week to retrieve their savings before the feared collapse and found they were unable to withdraw their money. Meanwhile, authorities confirmed on Wednesday they are investigating the former chairman of the bank and its biggest stakeholder, Kang Fengli, for suspected corruption, Reuters reported. Police also arrested a woman, a local resident, for allegedly spreading false information about the bank’s financial state.

In an effort to avoid the bank run, the lender issued a notice assuring depositors of its financial health. The bank also urged them to ignore the rumors and tried to dissuade them from withdrawing their funds. Security at bank branches was heightened. Bank employees stacked wads of large denomination yuan bills before clients’ eyes and reporters’ cameras to calm the situation and prove Yichuan had enough cash to continue to operate normally.

Another Chinese Lender Bailed Out After Bank Run

Despite the small size of Yichuan Rural Commercial Bank, the commotion around the events did not go unnoticed by financial authorities on the regional and national level. The increasing depositor anxiety, exacerbated by the noticeable economic slowdown in the country and the brewing liquidity crisis in China’s banking sector, had to be addressed with a decisive intervention by the state to prevent the spread of dangerous uncertainty.

The online edition of the local Communist Party newspaper reported that the Yichuan bank has received 30 billion yuan (over $4.26 billion) in the form of urgent funding from the Henan Province Rural Credit Cooperatives Union. Another 5 billion yuan were provided by the local branch of the People’s Bank of China and 1.5 billion yuan came from the Henan Rural Commercial Bank, Yichuan News detailed on Wednesday. It also revealed that the Party committee of Yichuan county held a special meeting to resolve the situation.

‘Small’ Crisis Elicits Strong Reaction From the State

Yichuan Bank has only around 62 billion yuan in assets (approximately $8.9 billion), according to a report by the Wall Street Journal. At the same time, data from the China Chengxin International Rating Agency shows that the lender accounted for 71% of deposits and 82% of loans in its county, as of September 2018. Clearly a small bank with local significance, yet the vigorous actions of the Chinese authorities betray their strong concerns the case may lead to loss of confidence in bank deposits beyond the region.

Whether the government’s aggressive measures will be sufficient to calm down farmers and savers in Henan province remains to be seen. What’s worrying, though, is that this is not the first time a Chinese bank has needed a bailout recently. At least three other regional lenders had to be saved by Beijing earlier this year.

Another Chinese Lender Bailed Out After Bank Run

Baoshang Bank, based in the Inner Mongolia Autonomous Region, collapsed in May and was seized by the People’s Bank of China. A couple of months later Bank of Jinzhou, which operates in the Liaoning province, was bailed out by three state-controlled asset managers. Then in August, Heng Feng Bank failed and was nationalized.

A list published by Zerohedge contains almost 20 small to medium-sized Chinese banks that have been late with their annual reports. The latest available data from Barclays Research shows they controlled almost 4.5 trillion yuan ($650 billion) in assets in 2017. Heng Feng, which is the largest financial institution in the list, had over 1.4 trillion yuan in assets, Bank of Jinzhou is second with 723 billion, and Baoshang Bank is fourth with 576 billion in assets.

The news of the bank run at Yichuan Rural Commercial Bank comes after Chinese President Xi Jinping put blockchain development in the focus of government efforts during a Politburo meeting. And while crypto markets reacted positively to his bullish speech, the People’s Republic doesn’t seem to be planning to invest in developing crypto banking, for example, only a digital version of its fiat yuan.

Do you think the Chinese government can cope with the growing banking crisis? Share your opinion on the subject in the comments section below.


Images courtesy of Shutterstock.


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The post Another Chinese Lender Bailed Out After Bank Run appeared first on Bitcoin News.

Cred Merchant Solutions to Help Unbanked Business Sectors

Par Avi Mizrahi
Cred Merchant Solutions to Help Unbanked Sectors Like California’s Cannabis Industry

Cred Merchant Solutions has been unveiled in Emeryville during San Francisco Blockchain Week in an event hosting several California elected officials. The new point-of-sale system will help unbanked business sectors, such as California’s cannabis industry, accept crypto payments from customers and pay taxes.

Also Read: Video: Will Bitcoin Crash or Double in Price After the Halving? Miners Have Their Say

Cred Merchant Solutions Debut

The Universal Protocol Alliance (UPA) and Cred have held a private event at the Ohana Cannabis Dispensary in Emeryville, California, on Wednesday, October 30 to celebrate San Francisco Blockchain Week.

Dan Schatt, Cred CEO and co-founder, unveiled during the event the new Cred Merchant Solutions, a point-of-sale handheld terminal that supports the unbanked, underbanked and poorly banked around the world. The Android-based terminal will be deployed to businesses at cost and help them quickly pay taxes, dramatically lower transaction fees and reinvest money back into the business.

Cred Merchant Solutions converts a customer’s payment in crypto that is then loaned out to businesses around the world, while merchants instantly get the cash sales equivalent and governments get their share of the taxes, Schatt explained to an audience of about 100 attendees at the event. The new system is said to be faster than Square, fairer than Visa and friendlier than Chase. With it, customers are able to pay the way they want, merchants can use it to earn, borrow and save, and local governments will receive real-time tax revenue.

Cred Merchant Solutions to Help Unbanked Business Sectors
San Francisco Bay Area

Based in the San Francisco Bay Area, Cred is a decentralized banking platform serving customers in 179 countries with over $300 million in lending capital. It offers interest rates on more than 30 crypto and fiat currencies through its partner network. Cred was founded by former Paypal veterans with the mission of allowing everyone to benefit from low-cost credit products.

The Universal Protocol Alliance is a group of like-minded cryptocurrency companies and blockchain organizations that want to connect different digital assets in a single network. The alliance members include Bittrex, Brave, Certik, Omisego, Blockchain at Berkeley, Uphold, and Cred. The group has issued the Universal Dollar (UPUSD), the first stablecoin to be listed on Uphold. Every UPUSD is backed by the U.S. dollar and coins are minted on-chain with every transaction written to Ethereum.

California to Lead US in Crypto Payments

Cred’s Taking Crypto to a New High event drew in local elected representatives, such as Emeryville Mayor Ally Medina, Berkeley Mayor Jesse Arreguín, and Berkeley Council member Ben Bartlett. This is because Cred Merchant Solutions will help support business sectors underserved by banks, like the $2 billion+ a year California cannabis industry.

U.S. federal banking regulations currently deem cannabis sales as illegal activities, which causes dispensaries to lack access to traditional banking and leaves them exposed to extra security risks. Despite this, the industry has continued to grow steadily and local companies need dependable access to financial services. In fact, sales in California represented about 34% of legal sales in the United States last year.

Cred Merchant Solutions to Help Unbanked Sectors Like California’s Cannabis Industry
California Marijuana Dispensary

Cannabis stores in California sold about $2.5 billion worth of products in 2018 alone. This is compared to just $1.5 billion in Colorado’s cannabis market, $1 billion in Washington, and $0.6 billion in Oregon. The authorities have enjoyed the growth in the sector too as the first quarter of 2018 brought in $60.9 million of tax revenues, the second $80.2 million, the third $100.8, and the fourth $111.9 million. This tax revenue is only expected to increase as the cannabis market in California is projected to jump to $7.7 billion by 2022 due to the opening of the recreational market.

Berkeley’s Bartlett also announced that he’s sponsoring a city plan to let businesses deploy Cred Merchant Solutions for tax collections and that he will work to enact similar legislation statewide so that California serves as a harbinger for others on tackling the problem of cash-intensive businesses. “What’s missing is money. When 70% of these operators are unbanked, we’re missing the money,” Bartlett said. “One way we can ease the burden amongst these companies is to alleviate their burden, achieve safety, and receive tax revenue for the city.”

California is home to innovative startups, technology companies and many entrepreneurs in Silicon Valley and beyond. As such it should not be surprising that it will lead the adoption of cryptocurrency payments in the U.S. In September we reported that Bartlett became the first elected official to purchase cannabis using a digital asset. He utilized bitcoin cash (BCH) and Cred’s LBA token to facilitate the transaction at the Ohana Cannabis dispensary in Emeryville.

What do you think about using crypto to pay for legal cannabis in California? Share your thoughts in the comments section below.


Images courtesy of Shutterstock.


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Satoshi ‘Nakamolto’ Emerges With Great Hair and Questionable Claims

Par Graham Smith
Bitcoin's Satoshi 'Nakamolto' Emerges With Great Hair and Questionable Claims

A viral video taken at a Las Vegas event has put self-claimed “Bitcoin co-founder” Jörg Molt in the spotlight this past week. A Twitter user in the space known for hair trigger accusations calls Molt a scammer in the video, and Molt proceeds to knock off the guy’s baseball cap. Amusing as the sophomoric dumpster fires of crypto Twitter may be, Molt’s story is illustrative of all-too-common behavior in crypto worthy of focused caution. Before forking over fees for Molt’s Satoshi School courses or bitcoin branded champagne, be sure to know the real story beneath the great head of hair.

Also Read: Satoshi’s Final Messages Leave Tantalizing Clues to His Disappearance

The ‘Co-Founder’ of Bitcoin

While Molt’s reported past of sordid scams, numerous aliases, and life as a DJ in Germany is the source of all kinds of speculation and internet sleuthing, one thing that is immediately verifiable is that he continues to make larger-than-life claims. Molt sells himself (and by extension his courses and BTC-branded bubbly) as “Co-founder of BitCoin” and “one of the few experts in blockchain technology and cryptocurrencies.” He also created something called the Satoshi School, with a website that states:

The Satoshi School is the only school in the world that teaches exclusively about BitCoin and BitCoin blockchain technology in a location that suits you. It was founded in 2016 by BitCoin co-founder Jörg Molt – who has been working on global digital cash projects since 1995.

To see what Molt really means when he says “co-founder,” a Youtube interview with Steven Melnik sheds some light on the slippery language. “It is the magic about that people from all over the world had the same idea at this time,” Molt states of the pre-bitcoin era, affirming in the video that even people who were simply working toward the creation of digital money in general, are all “co-founders.” The interviewer aptly notes that just because some folks thought about ride sharing before Uber, they are not magically co-founders of the company.

Satoshi 'Nakamolto' Emerges With Great Hair and Questionable Claims
“Nakamolto” and his Disney prince hair were a source of entertainment for Twitter users.

Decried by the Boy Who Cried Wolf

Many in the space aren’t having Molt’s conveniently vague language and loud claims of owning 250,000 bitcoins, of course. At the recent WCC Vegas Blockchain Week event, Twitter user @KennethBosak, known in part for his 2018 video where he accosts two unsuspecting booth workers with all the charm of a botched root canal, pointed to Molt, filming and saying:

This guy right here, He’s not Satoshi. He’s telling people he’s [expletive] Satoshi … You don’t belong in the space. Get out.

Satoshi 'Nakamolto' Emerges With Great Hair and Questionable Claims

Bosak claims “Nakamolto” was telling conference attendees he was Satoshi, but this has not been verified. Molt’s reaction to the challenge was to return verbal fire and then sneakily knock off Bosak’s hat. The exchange is childish and of the caliber one would expect from internet sensation seeking. The incident and ensuing attention were apparently enough to send Molt running from Twitter, though, as his account has since been deactivated.

Jörg ”Nakamolto” Molt on his ”Satoshi School”.
Jörg ”Nakamolto” Molt on his ”Satoshi School”.

The Satoshi LARP Parade Continues

The last “Satoshi” gave his big reveal back in August to quickly fizzled attention. Like Molt, like Craig Wright, and like so many other attention-seekers in the space, claims were made that Bitcoin had somehow lost its way and been corrupted by greed and lack of leadership. And of course, only the newly revealed Satoshi could fix this. Proof isn’t provided, however, and critique of this lack of evidence is often met with scandalized shouting and gaslighting. After all, what’s the fun of live-action role play if no one believes you?

The crypto space is difficult to navigate for dazzled newbies. Thanks to long strings of priming buzzwords like “blockchain” and purposefully vague language, understanding fundamentals becomes a challenge. Much like the televangelist’s insatiable need to talk about his private jet and gold-threaded suit — while making the congregation all too aware they might miss out on theirs — crypto cons similarly give themselves away. After all, nobody wants to miss out on bitcoin paradise, and a messiah complex goes a long way in selling the story. As for Molt, the veracity of his co-founder status claim, and how many will ultimately become disciples, remains to be seen.

What are your thoughts on Molt’s claims? Let us know in the comments section below.


Images courtesy of Shutterstock, Fair Use.


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The post Satoshi ‘Nakamolto’ Emerges With Great Hair and Questionable Claims appeared first on Bitcoin News.

Maker’s Stability Fee Drops to 5.5% After Multi-Collateral Dai Announcement

Par Jamie Redman
Maker's Stability Fee Drops to 5.5% After Multi-Collateral Dai Announcement

According to the CEO of the Maker Foundation, Rune Christensen, Multi-Collateral Dai (MCD) will launch on November 18. On October 28, Maker’s stability fee was reduced by a ‘whale’ with roughly 94% of the voting power.

Also Read: French Ministry of Education Publishes Bitcoin Resource Guide for Educators

Maker’s Multi-Collateral Dai Will Launch November 18

Decentralized finance project Makerdao is responsible for creating the cryptocurrency-backed stablecoin called dai. Initially, the project used ETH as a form of collateral in order to issue dai but the project revealed that in the future a variety of other digital assets could be used. Announced at the Devcon 5 conference in Osaka, MCD will bring new features like the dai savings rate (DSR) and a collateralized debt position (CDP) will be known as a “vault.” Collateral types first evaluated include coins like augur (REP), digixdao (DGD), golem (GNT), omisego (OMG), ether (ETH), and 0x (ZRX). This means that there will be two types of coins produced by the community: single collateral dai (what dai is today) will be called ‘sai,’ while MCD created coins will be called dai.

Maker's Stability Fee Drops to 5.5% After Multi-Collateral Dai Announcement

In March, news.Bitcoin.com took an in-depth look at the Ethereum-based Makerdao and dai stablecoin. The report explained that a CDP now known as a vault required 150% of the loan amount in dai that’s paid for with ETH. Moreover, there’s a stability fee (interest rate) that accrues during the life of dai loans. Since the project’s launch, the coin has maintained a fairly stable existence despite a few hiccups along the way. In mid-April, the Makerdao community voted multiple times to raise the stability fee because dai tokens were struggling to hold the $1 peg. The issues upset dai borrowers when the stability fee skyrocketed from 0.5% to 19.5%. The interest rate increases had also made dai’s price jump above the $1 peg and many exchanges saw dai sold for more than $1.05 per coin.

Maker's Stability Fee Drops to 5.5% After Multi-Collateral Dai Announcement

Natural Centralization?

On October 28, Daniel Onggunhao, a software engineer at Binance, revealed that the dai stability fee was reduced to 5.5%. “A single whale (with 97% of voting power) made the decision — Went from 2,489 votes a few hours ago, to 44,539 votes,” Onggunhao tweeted. “I say this normatively, as neither good nor bad. In a perfect world, it’d be great if we had a distributed voter pool for a move this big.” Onggunhao added:

The pragmatic reality is that as an early stage, hard-to-understand technology, decision making tends to naturally centralize.

Maker's Stability Fee Drops to 5.5% After Multi-Collateral Dai Announcement
(Left) The voting addresses which show the top supporters and the 94% vote. Daniel Onggunhao did make a mistake in his original tweet by saying 97% when it was actually 94%. (Right) The new visual identity of the dai stablecoin.

A number of cryptocurrency community members discussed the whale vote after Onggunhao’s tweet. Binance founder Changpeng Zhao (CZ) was quick to quip: “Welcome to ‘decentralization,’ where anything is possible, and not under anyone’s control, even some re-centralization.” Not everyone thought the ‘re-centralization’ concept was a good idea for Makerdao’s claimed ‘decentralized’ governance system. “Stake-based systems [Proof-of-Stake (PoS)] centralise much faster than alternatives because there’s no maintenance cost, and in the early stages, bulk stake acquisition is always going to be easier than buying hardware in any real quantity,” Monero’s Riccardo Spagni replied during the conversation.

Maker's Stability Fee Drops to 5.5% After Multi-Collateral Dai Announcement
CDPs have rebranded to vaults.

One person disagreed with Onggunhao’s initial tweet and said that he didn’t think there was a “single ‘whale’ with 97% voting power.” “There could be a voter that represents 97% of this particular vote — This is still an issue, but it’s about governance not control.” Onggunhao agreed and further stressed:

That’s true, I apologize for dashing off the tweet. I also made an error in the amount (94.7% instead of 97%).

Collateralized Multi-Coin Options and a Fee Reduction Will Likely Add More Growth to the Makerdao System

The Makerdao project has been a favorite among the cryptocurrency community because the stablecoin dais are backed by digital currency and a decentralized autonomous organization. The stablecoin is not without its critics, and the Maker protocol is still a very young network. However, with added coins stemming from the MCD launch and Maker’s stability fee reduction, it’s likely the dai ecosystem will grow much larger. At present, roughly 2.2% of all the ETH in existence is locked into the Maker system.

What do you think about the Makerdao project’s latest MCD announcement and the recent vote to drop the stability fee? Let us know what you think about this subject in the comments section below.


Image credits: Shutterstock, Makerdao, Dai, Medium, Daniel Onggunhao, and Pixabay.


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Billion Dollar Bitcoin Lawsuit Continues as Craig Wright Breaks Settlement

Par Jamie Redman

In early September, the high-profile court case Kleiman v. Wright looked as though it was coming to an end as the two parties reached a non-binding settlement. Then on October 30, without much notice, Wright explained that he couldn’t finance the settlement and the agreement was broken. Now the trial will start again and the Kleiman estate hopes to depose Wright’s former chief financial officer, James Wilson on November 8.

Also Read: Satoshi ‘Nakamolto’ Emerges With Great Hair and Questionable Claims

Wright Breaks the Non-Binding Settlement as the Billion Dollar Bitcoin Lawsuit Continues

Australian native Craig Wright, the man who claims to be Bitcoin’s inventor, will be seeing more court proceedings in the near future as the notorious Kleiman v. Wright case is back on. Craig Wright is being sued by Ira Kleiman, the brother of the now-deceased David Kleiman, for allegedly interfering with David’s bitcoin assets and intellectual property after he died. Last September, news.Bitcoin.com reported on how the two parties were seemingly headed toward a settlement as both legal teams came to a non-binding settlement. This happened after the judge ruled the Kleimans were to be awarded 50% of Wright’s alleged BTC holdings and 50% of his blockchain intellectual property (IP). However, the Kleiman estate has filed a new court document which details that “Craig could no longer finance the settlement and was “breaking” the non-binding settlement agreement.” So Roche Freedman LLP wrote in the filing that after a lot of “lost time” the team will be “shifting back into preparing for trial.”

Following the broken settlement, the law firm explained it was in contact with James Wilson, the chief financial officer (CFO) of Craig’s companies in 2012-2013. This period of time is when Dave Kleiman was still alive and Wright alleged that he sold Dave interest in his businesses in exchange for BTC. Although Wright’s legal team, Rivero Mestre LLP, came back five hours after the Kleiman estate requested permission to depose Wilson and informed the plaintiffs they would not consent to the deposition on November 8. Wright’s council said the team would need to consent to a video deposition at a later date.

Craig Wright.

“Due to the unexpected failure of settlement negotiations, and the soon approaching discovery cutoff, the parties are short on time,” Roche Freedman’s filing notes. “Mr. Wilson’s presence in the United States next week obviates the need for the parties to go through the legal, logistical, and expensive steps of securing a deposition in Australia. And while Craig won’t have been afforded a full 14-days notice, he has received 7-days notice.” The Kleiman estate’s court filing adds:

Importantly the fact that Craig doesn’t have 14-days notice of this deposition is a product of his own conduct. He asked the parties to pause the litigation process and concentrate on amicably resolving this dispute, only to pull his consent with no advance notice, without good cause, and at a time when it simply wasn’t possible to give him the full 14-days notice.

James Wilson and Cryptoloc Technology

According to the Twitter handle ‘Seeking Satoshi,’ James Wilson is a former business associate of Wright’s and co-patent holder. “So the court in Florida would like to have a chat with Jamie Wilson, one time CFO for one of Craig’s dodgy companies and co-patent holder for Cryptoloc. But what does the court want from Jamie?” Seeking Satoshi asked on Twitter. “Do they think Jamie can shed some light on Craig’s financial dealings with Dave? Or do they suspect that Dave was involved in the development of Jamie’s ‘Cryptoloc’ and may be owed some money for his hand in the IP behind it?” The researcher continued:

I doubt the court will uncover much from speaking with Jamie and I don’t think any IP, bitcoin or money will be found that belongs to Dave. At some point, the court will realise there is no Tulip trust and no bitcoin and that Craig has led everyone on a goose chase.

Wilson is also mentioned in a blog post called “From the Bygone Days of Yore — Part 1,” written by Wright in June. Wright stated at the time that he had video link meetings with “Jamie Wilson, Robert Urquhart, and Dave Kleiman” with lawyers present in 2012. Roche Freedman’s motion requests that the court allows them to depose Wilson on November 8 with the defense team present via video-link. According to the court documents, a trial is scheduled to start on March 30, 2020, depending on the proceedings.

What do you think about the Kleiman v. Wright lawsuit involving billions of dollars worth of bitcoin? Let us know what you think about this subject in the comments section below.


Image credits: Shutterstock, Twitter, Wiki Commons, Fair Use, and Pixabay.


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OSC Commissioner Debunks Arguments Against Bitcoin, Green-Lights Bitcoin Fund

Par Kevin Helms
OSC Commissioner Debunks Arguments Against Bitcoin, Green-Lights Bitcoin Fund

A commissioner of the Ontario Securities Commission (OSC) has debunked the arguments against bitcoin used to deny the public offering of The Bitcoin Fund. Among others, the commissioner rules that bitcoin is neither illiquid nor more susceptible to manipulation than other commodities, real volume and real trading in bitcoin exist, and it is not the role of securities regulators to approve or disapprove of the merits of bitcoin.

Also read: 23 Central Banks Divulge Their Digital Currency Requirements

Director’s Refusal Axed, Fund Green-Lighted

The Ontario Securities Commission (OSC) published a document Wednesday detailing Commissioner Lawrence P. Haber’s reasons to overturn the commission’s previous decision regarding 3IQ Corp and The Bitcoin Fund. A preliminary prospectus for the public offering of this fund was filed with the OSC’s Investment Funds & Structured Products branch (IFSP) in October last year. However, in February, the IFSP refused to issue a receipt of The Bitcoin Fund’s prospectus after its staff raised a number of concerns.

3IQ Corp and The Bitcoin Fund subsequently applied for a hearing and a review of this decision. After multiple hearings, Commissioner Haber ruled on Tuesday that the staff’s concerns “do not warrant denying a receipt for The Bitcoin Fund’s prospectus” and ordered the IFSP director’s decision to be set aside and a receipt for a final prospectus of The Bitcoin Fund issued. Unless the staff can find new grounds for refusal, the final prospectus can be used to offer securities to the public.

Ontario Securities Commissioner Clears Concerns Over The Bitcoin Fund

Canadian investment fund manager 3IQ Corp. confirmed Wednesday that “it has received a favorable ruling” from its public hearing before an OSC panel regarding The Bitcoin Fund. The fund will be a public, non-redeemable investment fund that will invest all of its assets in bitcoin. 3IQ, which also manages a private crypto investment fund, will be The Bitcoin Fund’s investment and portfolio manager.

Not Our Job to Decide the Merits of Bitcoin

In the document, Commissioner Haber addressed every concern raised by the IFSP staff. He began by stating that this case “is not about the merits of bitcoin as an investment” because “It is not the role of securities regulators to approve or disapprove of the merits of securities being offered to the public.” He pointed out that all prospectuses filed in Canada even say on the cover page that “No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise.” The commissioner remarked:

It is also outside the scope of the authority of securities regulators to immunize investors against risk or against loss. And, it is not the job of securities regulators to ban speculation or risk-taking.

Ontario Securities Commissioner Clears Concerns Over The Bitcoin Fund

The document further explains that while bitcoin is “a novel asset in an emerging and evolving market,” it can later mature and change significantly, adding that although some assets in this class fail and become tulip bulbs, others can become gold and the next generation of technology. “Securities regulators are not mandated to try to pick winners and losers,” the document details.

Bitcoin Is Not Illiquid

As a key reason for rejection, the IFSP staff submits that “Bitcoin is an illiquid asset … Therefore, by holding bitcoin, the fund would not comply with the restriction against holding illiquid assets set out in section 2.4 of NI 81-102.” Commissioner Haber disagreed. He said: “I do not agree with Staff’s submission … I find that Staff has not shown that bitcoin is an illiquid asset, as defined in NI 81-102,” emphasizing:

I find that there is sufficient evidence of real volume and real trading in bitcoin on registered exchanges in large dollar size, both in absolute terms and compared to other markets for commodities and equities, which constitutes a liquid market.

The commissioner referenced some existing investment products providing exposure to bitcoin such as Grayscale Bitcoin Trust (GBTC) which is available to Canadians.

Price Manipulation

The IFSP staff also decided that it is not in the public interest to issue a receipt for the fund’s prospectus due to concerns about its “ability to value its assets for investors given the significant market integrity concerns regarding the trading of bitcoin,” “the security and safekeeping of the fund’s bitcoin,” and “the fund’s ability to file audited financial statements, as required.”

Regarding price manipulation associated with crypto assets, Haber concluded that the staff “has not established that the fund will be unable to arrive at a net asset value that satisfies the requirements of NI 81-106.” While acknowledging the existence of fake volumes and unregistered market trading, the commissioner said the “Staff has not proven that true price discovery in the bitcoin market is prevented by insufficient ‘true trading’ or price manipulation, at least on the regulated exchanges.” He added that the evidence presented to him suggests that wash trading and fake volume are used primarily to attract more traders and issuers, and “did not establish systemic and sustained manipulation of the price of bitcoin.”

Ontario Securities Commissioner Clears Concerns Over The Bitcoin Fund

The commissioner also placed weights on the steps taken by the company to mitigate the risks of manipulation such as its selection of MVIBTC as the index and the fund’s non-redeemable structure. He also noted that other bitcoin holdings, such as GBTC, have been successfully valued, adding:

It is worth noting that bitcoin is a commodity, not an equity or other security … The risk of market manipulation exists in all commodity markets. Many of Staff’s stated concerns could apply equally to other commodities, such as precious metals or foreign currencies. Staff did not persuade me that bitcoin is more susceptible to manipulation than other commodity products.

Regarding custodian and security risk, the commissioner said, “Like any valuable commodity, I accept that bitcoin can be stolen or lost.” He conveyed that the staff did not establish that the fund’s custodians do not follow sufficient practices for safeguarding bitcoin. Commenting on New York-based Gemini Trust Company which will act as a custodian of the fund’s bitcoin, Haber opined, “I am not persuaded that there was sufficient evidence that professional, regulated crypto-asset custodians, like Gemini, have suffered losses of customer assets.”

Staff’s Lack of Authority

Commissioner Haber also disagreed with the staff’s submission that investor protection extends to the assets the fund proposes to hold or the markets in which they trade. He explained that if the staff’s analysis were to apply to The Bitcoin Fund, then “it would amount to a ban on any funds holding bitcoin, regardless of their structure or management.” Furthermore, he pointed out that “the length of Staff’s proposed ban would be uncertain,” emphasizing that the ban would effectively remain in place until the staff’s concerns have diminished, elaborating:

Staff has not provided any authority for imposing such an indeterminate ban.

Ontario Securities Commissioner Clears Concerns Over The Bitcoin Fund

Investor Protection

Since investors have other means of acquiring bitcoin, the commissioner questioned how the staff’s proposed ban would protect them from “unfair, improper or fraudulent practices.” On the contrary, he expects it will ensure that investors could not invest in bitcoin through a public fund, reiterating:

Denying investors the opportunity to invest in bitcoin through a public fund would not promote fair and efficient capital markets and confidence in capital markets.

“Instead, it would suggest that investors should acquire bitcoin through unregulated vehicles, and capital market participants should be encouraged to create those vehicles,” the commissioner opined. He believes that “The issuance of a receipt for the final prospectus of the fund would promote efficient capital markets by creating an alternative to GBTC,” which he noted is available to Canadian retail investors but trades at a significant premium to its net asset value. It would also “promote efficient capital markets by giving retail investors a means of diversifying their investment portfolios through access to an additional uncorrelated asset class,” the commissioner concluded.

What do you think of Commissioner Haber’s reasonings and his decision to overturn the staff’s rejection? Let us know in the comments section below.


Images courtesy of Shutterstock.


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Cryptosteel Capsule Will Keep Your Wallet Seed Safe and Out of Sight

Par Kai Sedgwick
The Cryptosteel Capsule Will Keep Your Wallet Seed Safe and Out of Sight

A hollow steel cylinder despatched with 800 lettered tiles, the Cryptosteel Capsule is what it sounds like and nothing more. Assemble the letters to form your wallet’s seed phrase, thread them onto the metal dipstick and screw the capsule shut, safely entombing the key to your crown jewels inside an unassuming piece of hardware. Stash it in a toolbox alongside some masonry and no one would be the wiser.

Also read: Billion Dollar Bitcoin Lawsuit Continues as Craig Wright Breaks Settlement

The Re-Gadgetification of Things

80s kids mourning the loss of the gadget-based society they were raised in are naturally drawn to crypto cold storage. For every device (portable radio; spirit level; tape measure) that was subsumed into the iPhone, there’s another that hardware wallet (HW) manufacturers have seen fit to develop and isolate from the smartphone in the name of opsec.

There is a logic in wanting to keep your hot assets – i.e anything connected to the web – separate from your cold – typically those you cherish the most and have no intention of liquidating in a hurry. That said, it’s sometimes hard to tell how much of these aftermarket HW accessories are actually helping, and how much of it is just cold storage theater.

That there are benefits to keeping your crypto assets safely stashed where hackers, phishers, and SIM-swappers can’t operate is clear. What’s less evident is whether entombing your hardware wallet in a hermetically sealed vault kept at absolute zero with a pack of rottweilers guarding it and anti-tank guns watching the skies is absolutely necessary. Until we see empirical studies on the success rates of extreme opsec compared with, say, scrawling your seed phrase on a scrap of paper and stashing it in a drawer, it’s really hard to say.

Cryptosteel Capsule Will Keep Your Wallet Seed Safe and Out of Sight
The Cryptosteel Capsule comes with 800 character tiles

The Mother of All Backups

Delivered in a smart tray that evokes a luxury chocolate box, the Cryptosteel is described as “the mother of all backups.” Not the daddy, not the son, and certainly not the creepy half-cousin: the ‘steel is all momma. The device, available singly or in packs of up to five, is described as being “compatible with most secret sharing and key generation algorithms.” By that, its manufacturers mean there’s enough numbers and letters in the box to cover most 12-word seed permutations. You can cram 123 characters onto the stick before it’s maxed out.

Unfortunately, the stick isn’t quite accommodating enough for a 24-word seed: in testing, I managed 21 words before running out of space. Given that the capsules retail for $100, it seems a little excessive to require multiple capsules to store a single seed. That said, 12 words should suffice for most wallet seeds, and you might even fit on 24 words if they happen to be short and you remove the word separators that are meant to be inserted.

Cryptosteel Capsule Will Keep Your Wallet Seed Safe and Out of Sight
My capsule with 21 of 24 seed words squeezed on.

Better Than a Steel Punch in the Face

I like the Cryptosteel Capsule, despite its limitations. It’s not as alpha as using a steel punch, but it’s a lot easier to create your wallet seed with, and feels almost as permanent. Just be careful when the time comes to unthread it, as one slip and your painstakingly assembled seed will be alphabet soup. It’s hard to say whether sitting in bed threading steel beads onto a metal stick is the financial sovereignty Satoshi dreamed of, or simply a regression to making macaroni art in kindergarten, but it sure is fun. More importantly, it’s a secure way of recording your seed provided you can keep the innocuous looking capsule in a safe place away from prying eyes.

Cryptosteel Capsule Will Keep Your Wallet Seed Safe and Out of Sight

What are your thoughts on cold storage capsules – do you think they can help enhance offline security? Let us know in the comments section below.

Disclaimer: Bitcoin.com does not endorse or support claims made by any parties in this article. None of the information in this article is intended as investment advice, as an offer or solicitation of an offer to buy or sell, or as a recommendation, endorsement, or sponsorship of any products, services, or companies. Neither Bitcoin.com nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.


Images courtesy of Shutterstock.


Did you know you can verify any unconfirmed Bitcoin transaction with our Bitcoin Block Explorer tool? Simply complete a Bitcoin address search to view it on the blockchain. Plus, visit our Bitcoin Charts to see what’s happening in the industry.

The post Cryptosteel Capsule Will Keep Your Wallet Seed Safe and Out of Sight appeared first on Bitcoin News.

Bad Loans at Big British Banks Jump Over 50% in a Year

Par Lubomir Tassev
Bad Loans at Big Banks in Britain Jump Over 50% in a Year

Shaken by the never-ending saga around Brexit and the global slowdown, the British economy is now showing signs that point to an upcoming crisis. The U.K.’s biggest banks have been dealing with a growing number of loans companies are struggling to pay off. At the same time, low interest rates on mortgages are limiting opportunities for revenue growth.

Also read: Another Chinese Lender Bailed Out After Bank Run

Largest Lenders Write Off More Debt Than a Year Ago

The United Kingdom’s largest lenders have been writing off more loans than they were last year, another indication that many businesses are hurting in a deteriorating economic environment. In Q3 of 2019, writedowns on bad debt at four major British banks increased 51% from the same quarter of 2018, the Daily Mail reported quoting corporate figures.

The amount of nonperforming loans that have been written off by RBS, Lloyds, HSBC, and Barclays between July and September reached £1.76 billion (approx. $2.27 billion). During the same period last year it was around £1.17 billion ($1.51 billion), an analysis conducted by U.K.-based financial services company AJ Bell shows.

Bad Loans at Big British Banks Jump Over 50% in a Year

The difference of almost £600 billion has been attributed to the worsening economic conditions that are negatively affecting more and more companies operating in the country. One such example is the British global travel group Thomas Cook which collapsed in September.

A total of 4,355 businesses were unable to pay their debts in the third quarter, according to official data from the U.K. government’s Insolvency Service. That’s the highest number in five years recorded by the London-headquartered executive agency of the Department for Business, Energy and Industrial Strategy.

Low Interest Rates to Further Squeeze Bank Revenues

Bad loans are not the only challenge the United Kingdom’s top lenders are currently facing. According to the publication, the banks have also warned they expect their revenues to be negatively affected by the low mortgage rates which are nearing their record lows at the moment.

Bad Loans at Big British Banks Jump Over 50% in a Year
Source: Statista

According to a study published by market data provider Statista, interest rates on mortgages in Britain have been continuously declining for the past five years. In June 2019, two-year fixed rate mortgages were at 1.65%, down from 2.60% in the summer of 2014. The two-year variable interest rate has dropped from 2.71% to 1.99. The 10-year fixed rate has decreased from 4.06% in September 2014 to 2.63% this past June.

Credit institutions can hardly raise rates on mortgages right now as the base interest rate set by the Bank of England is only 0.75%. It has remained below 1% ever since the central bank’s Monetary Policy Committee cut it in 2009 to 0.5% where it stayed for around seven years. The average variable mortgage rate at the time was 2.5%. The rate was dropped to its lowest ever mark of 0.25% in August 2016.

Bad Loans at Big British Banks Jump Over 50% in a Year

Although the cost of borrowing was raised in August 2018 to 0.75%, its highest level since early 2009, serious concerns remain regarding the state of the British economy and its perspectives. After another unsuccessful attempt to leave the European Union, the U.K. is now heading towards its third general election in five years, which is creating more uncertainty for its economy already weakened by the global economic slowdown.

Against this backdrop, things have been developing differently in the nascent crypto banking sector where loans backed with digital assets and cryptocurrency deposits are enjoying growing popularity. Platforms such as Cred offer clients an opportunity to earn up to 10% interest on their holdings in BTC and BCH and borrow using their crypto as collateral. Cred also provides solutions to unbanked business sectors.

Do you think the growing amount of bad loans in Britain is a sign of an upcoming economic crisis? Share your thoughts on the subject in the comments section below.


Images courtesy of Shutterstock, Statista.


Do you need a reliable bitcoin mobile wallet to send, receive, and store your coins? Download one for free from us and then head to our Purchase Bitcoin page where you can quickly buy bitcoin with a credit card.

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Crypto Winter Claims Another Victim as DX Exchange Closes

Par Avi Mizrahi
Crypto Winter Claims Another Victim as DX Exchange Closes

The digital assets market has been on an upward trend recently, with top cryptocurrencies such as BTC and BCH maintaining higher price levels. Unfortunately, this comes too late for some ventures in the field. The latest to cease operations is DX Exchange, which is now looking for a way to exit the market.

Also Read: Cred Merchant Solutions to Help Unbanked Business Sectors

DX Exchange Is Looking for a Buyer

Estonia-based digital assets trading venue DX Exchange has announced that as of Sunday, November 3, the platform is not allowing any more deposits from clients, trading is suspended and all open orders have been canceled. This is done to close the exchange until a new buyer can be found for the company. Alternatively, DX may merge with another exchange to reduce the high cost of running the business. The company also reassured clients that all their funds are safe and need to be returned to allow a merger or a sale to proceed.

Crypto Winter Claims Another Victim as DX Exchange Closes
Tallinn, Estonia

“We must inform the community that the board of directors of DX.Exchange has decided to temporarily close the exchange as we pursue a merger or outright sell of the company,” the team wrote in a blog post. “The cost of providing the required level of security, support and technology is not economically feasible on our own. The board believes this is the best opportunity for DX.Exchange to achieve success for its shareholders and compete in this challenging market. In the event a merger or sell is not completed in a timely manner then the exchange may not resume operations and take appropriate action.”

Smaller crypto exchanges find it difficult to survive in the current market as they have to spend a lot of money to comply with new regulations and compete with giants such as Binance. However, many other types of ventures in the digital assets industry are suffering too. Just recently we reported that Platin, a secure Proof of Location protocol which incentivizes nodes at scale by means of its own blockchain-based token, shut down on Nov. 1, 2019, despite all the recognition it got over the last two years.

Tokenized Stocks, ETFs and Crypto

DX Exchange was only launched on Jan. 7, 2019. It accepted deposits in BCH, BTC, ETH, USDT, DASH, LTC, XRP, and a few other cryptocurrencies as well as traditional fiat payment options. It initially offered trading on the tokenized stocks of some of the biggest public companies in the world, such as Google, Facebook and Amazon. This had been achieved through an agreement with MPS Marketplace Securities Ltd., which issued tokens that represent stocks via smart contracts and held the real world stocks according to demand on the platform.

The “digital stocks” were said to be backed 1:1 with the real-world stocks traded on conventional stock exchanges, like stablecoins backed by equities rather than fiat. Unlike traditional stock exchanges, this arrangement allowed the platform to offer its users the ability to trade on stocks 24/7.

Crypto Winter Claims Another Victim as DX Exchange Closes

DX Exchange holds operating licenses from the Estonian Financial Intelligence Unit and reportedly employed over 70 developers in an R&D center in Israel. It is backed by NFX, a seed and series A focused venture capital firm based in San Francisco. The regulated platform operated in full compliance with Mifid II (the latest EU financial regulations), which means it featured a robust AML/KYC process. Its partner, MPS Marketplace Securities Ltd. is a Cyprus-licensed financial company which provides liquidity solutions for the online trading market.

The technology powering DX Exchange is built on Nasdaq’s Financial Information exchange (FIX), a vendor-neutral standard message protocol that defines an electronic message exchange for communicating securities transactions between two parties. The platform also supported trading via an API, which means it can be easily integrated with market makers, liquidity providers, algo traders, and hedge funds.

In early March, it was reported that DX Exchange began offering trading on tokenized exchange-traded funds (ETFs), including Nasdaq-mirrored QQQ, S&Ps and SPY. Later that month, it was also revealed that the platform was starting to list security token offerings (STOs).

Any security token could submit an application to be listed and needed to meet eligibility requirements for listing on the exchange. The potential issuers were evaluated according to their achievements, transparency, fundraising method, and management team. DX also required a legal opinion which supports the STO’s legitimacy and performed background checks on the management team and directors. For each security token which was offered, a whitepaper explaining the conditions, economic benefits and risks was required.

What do you think about DX Exchange closing down? Share your thoughts in the comments section below.


Images courtesy of Shutterstock.


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The North American Bitcoin Conference Returns

Par Bitcoin.com PR
The North American Bitcoin Conference Returns

TNABC and Miami Blockchain Week return to kick off 2020.

On the 16th and 17th of January, 2020, pioneers of the global Bitcoin and blockchain community will converge in Miami for a historical conference, continuing to propel cryptocurrency from niche to mainstream. Now in its seventh year, The North American Bitcoin Conference is the longest-running and most attended finance conference for the Bitcoin, blockchain and cryptocurrency industries with over 20,000 attendees since 2013. Additionally, a key focus of the 2020 conference will be a focus on enterprise, unpacking the new and exciting world of business adoption and commercial blockchain potential.

(The 7th Annual North American Bitcoin Conference), as a part of the World Blockchain Forum, will return to sunny Miami with a lineup of over 60 world-class presenters, including technology veterans, and founders of companies transforming finance and innovation across the globe. Past events have been featured in the Wall Street Journal, The New York Times, Forbes, Fortune.com, Bloomberg, and other mainstream media outlets.

The two-day conference has announced first partnerships for 2020 with The Bitcoin Center, Tradestation and Bitcoin.com. As well as curated networking, speaker Q&A sessions and a focus on Miami as the historical LATAM-US hub of crypto, TNABC will maintain themes of investment, blockchain enterprise, legal implications and regulation, and how decentralization is disrupting international supply chains.

In addition to the two day conference, The North American Bitcoin Conference celebrates the return of Miami Blockchain Week with multiple satellite events before and after the conference, including hackathons, additional networking events, education days, and after-parties.

The first 2020 speakers have been announced and include:
Nick Spanos, Crypto pioneer
Veronica McGregor, Head of Legal at Shapeshift.io
Matthew Roszak, Co-Founder, Bloq
Charlie Shrem, Bitcoin pioneer
Maja Vujinovic, CEO at OGroup
Marco Santori, President of Blockchain.com
Alexia Hefti, Blockchain Tax Lead at Deloitte

Keynote’s founder Moe Levin says, “This conference comes at a pivotal time as innovation forces us all to make wise investing decisions. With an influx of new opportunities and new applications of the blockchain, Keynote wants to give our attendees the opportunity to meet the people and product they’ll be investing in and get a better understanding of the fast-expanding blockchain ecosystem. We’re also excited for our attendees to meet and interact with our sponsors and exhibitors, who are the greatest blockchain companies active at the moment.”

Tickets are available now at (btcmiami.com/tickets)
For Sponsorship and Exhibiting information please email amy@keynote.ae

About Keynote
Keynote was launched in 2012 by blockchain strategist Moe Levin. Further information and details about Keynote can be found at keynote.ae

Supporting Link
https://www.btcmiami.com

The post The North American Bitcoin Conference Returns appeared first on Bitcoin News.

Central Bank Blockchains and Corporate Ledgers Are Still Vaporware

Par Jamie Redman

There’s been a resurgence of blockchain discussion this year, especially after China’s President Xi Jinping lauded blockchain and told Chinese citizens the country needs to accelerate distributed ledger technology development. Despite the lack of producing anything worthwhile, for some odd reason mainstream pundits believe government-endorsed blockchains will destroy legacy cryptocurrencies.

Also Read: Billion Dollar Bitcoin Lawsuit Continues as Craig Wright Breaks Settlement

‘The Future of Digital Money Being Shaped by National Governments’ Is a Lie

It sure seems like 2015 again, as the mainstream media continues to promote blockchain technology that’s backed by large corporations and governments. Well before digital currency projects like Facebook’s Libra and Telegram’s Gram have even launched, corporate media outlets claim these projects will annihilate assets like BTC and ETH. It seems people who believe this absurdity think that just because a blockchain project is backed by Facebook, has a development team and produced a whitepaper it will be better than a network that’s been running for more than a decade. Commentators and columnists include Bloomberg’s Lionel Laurent who recently wrote that “the future of digital money is being shaped increasingly by national governments.” However, this is not even close to being a reality as a great majority of governments and central banks still don’t understand the technology to this day.

Telegram and Facebook have yet to prove anything with the blockchain projects they are working on, yet mainstream media says these protocols will destroy legacy cryptos.

There are a few governments and central banks that have said publicly that they plan to experiment with a digital currency that represents legal tender. But there’s really only one nation-state so far that has completed this mission and Venezuela’s petro is more like an awful joke. Despite what Sunacrip (the Venezuelan entity in charge of cryptos) says, the petro is not accepted widely across the country.

“Nobody uses the petro and only people close with government use it to skip out on U.S. sanctions,” a student from Bogata, Colombia told news.Bitcoin.com in September. “Sunacrip is really only for miners — they have installed crypto point-of-sale (POS) systems around some stores, but the POS only accepts bitcoin, litecoin, and BNB, so if you have petros, you need to exchange that.” The Venezuelan petro is no better than the Onecoin scam, but promoted by a socialist government.

No one trusts Maduro’s pet blockchain project the petro and the only people using it are government employees trying to bypass sanctions.

Projects Like China’s Digital Yuan, Libra, R3, and Hyperledger Have Produced Nothing

Mainstream media has made it seem like state-issued currencies that are not even here yet will dominate legacy cryptos almost immediately. Bloomberg’s Lionel Laurent assumes that vaporware (a heavily advertised concept that has yet to work) like a digital yuan and Google’s quantum computer are threats to existing cryptocurrencies. Again both concepts have not been seen in the real world and it’s akin to saying a newborn baby could pummel a 10-year-old in a boxing match.

China’s censored internet and the communist government thinks a digital yuan will outpace public, uncensored blockchains.

The slew of blockchain ideas from governments, major banks, and corporations such as R3 and Hyperledger have not produced any real-world value. These projects don’t stand on enough credibility to deserve mass mainstream headlines but they are promoted by the old guard regularly. They want people to believe that nothingness, vaporware, and whitepaper promises will surpass legacy digital currencies that exist in the wild today.

If you are looking at blockchain as the cure, you are looking in the wrong place.

Blockchain projects promoted by banks, corporations, and politicians are snake oil. They do not cure the financial ailments global citizens are dealing with because they are meant to manipulate the public even more. For hundreds of years, the same bankers and the same families have controlled the world’s finances and resources. The reason cryptocurrencies matured a great deal faster than most financial concepts is because they remove the need to depend on the state and central banks. There is no blockchain project produced by a corporation or the old guard that even comes close to being a speck on the current cryptoconomy’s radar. These blockchains really resemble the antiquated databases used today with a few fancy bells and whistles like proof-of-stake, timestamps, and hashing.

The question remains: When will media pundits give up on lauding vaporware and things that don’t even exist yet? Central banks and governments want you to believe the FUD is so bad that only central planners can succeed. Right now, at least for the time being, the propaganda they spread couldn’t be further from the truth.

What do you think about the resurgence of hyped up blockchain discussions and concepts? Let us know what you think about this subject in the comments section below.

OP-ed Disclaimer: This is an Op-ed article. The opinions expressed in this article are the author’s own. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the Op-ed article. Readers should do their own due diligence before taking any actions related to the content. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any information in this Op-ed article.


Image credits: Shutterstock, Peter VanValkenburgh ‏@valkenburgh, Wiki Commons, Fair Use, and Pixabay.


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The post Central Bank Blockchains and Corporate Ledgers Are Still Vaporware appeared first on Bitcoin News.

Britain’s Tax Authority Updates Crypto Guidelines

Par Lubomir Tassev
Britain’s Tax Authority Updates Crypto Guidelines

Her Majesty’s Revenue and Customs (HMRC) has updated its guidelines on the taxation of transactions involving crypto assets. The United Kingdom’s tax authority clarifies its stance on cryptocurrencies and explains which taxes apply to specific activities carried out by business entities and private individuals.

Also read: Bad Loans at Big British Banks Jump Over 50% in a Year

Taxable Activities Listed

Multiple tax tools now exist to help crypto users and businesses from the industry with tax reporting. But in a field as fluid as the crypto space, regulations change rapidly. On Nov. 1, HMRC published updated policy papers concerning crypto transactions undertaken by companies, other businesses such as sole traders and partnerships, and individuals.

The agency notes that the documents deal with the tax treatment of “exchange tokens,” explicitly mentioning bitcoin. They do not apply to tokens issued in initial coin offerings (ICOs). The taxation of security and utility tokens will be addressed separately in the future. Taking into account the specifics of the fast-changing industry, HMRC says it will look at each case and apply the relevant provisions.

Britain’s Tax Authority Updates Crypto Guidelines

The tax office has listed a number of crypto-related activities that give rise to tax obligations. These include buying, selling and exchanging tokens for other assets, including cryptocurrencies. Crypto mining has been mentioned as a taxable economic activity. Businesses providing goods or services in return for digital coins also owe taxes to the British government.

The guidelines review the applicable taxes as well and corporate entities conducting any of the aforementioned activities are likely to be liable to pay one or more of the following taxes: capital gains tax, corporation tax, income tax, value added tax (VAT), and stamp taxes. National Insurance contributions are also due.

Private individuals will be liable to pay capital gains tax when they sell crypto assets that have been acquired as a personal investment, or income tax and National Insurance contributions on coins they receive from employers, mining or airdrops. Traders may reduce their income tax liability by offsetting losses against future profits. The amount paid for an asset is considered a cost that can be allowed as a deduction. The loss of a private key, however, does not count as a disposal of the assets for capital gains tax purposes. Victims of theft cannot claim a loss either.

Cryptocurrency Not Money

HMRC addresses other important aspects of taxation concerning crypto-related transactions. The authority emphasizes that taxable profits, and losses respectively, should be calculated and reported in British pounds on tax returns filed by companies and individuals. In case a transaction does not involve GBP, an “appropriate exchange rate” must be established in order to convert the transaction to fiat.

Britain’s Tax Authority Updates Crypto Guidelines

The agency does not explain clearly what it would consider an ‘appropriate’ valuation but stresses that a “consistent methodology” should be used. The papers further emphasize that profits from a crypto trade must be calculated in accordance with either the U.K. generally accepted accounting practice (UK GAAP) or in accordance with international accounting standards (IAS).

The requirement to keep records in fiat equivalent has to do with the tax department’s current stance on decentralized cryptocurrencies. “It is important to note that HMRC does not consider any of the current types of cryptoassets to be money or currency. This means that any Corporation Tax legislation which relates solely to money or currency does not apply to exchange tokens or other types of cryptoasset,” the administration points out.

However, the tax regulator remarks that “if an employer ‘pays’ exchange tokens as earnings to an employee, those exchange tokens count as ‘money’s worth’.” In other words, crypto salaries paid in the United Kingdom are subject to income tax and National Insurance contributions on the fiat value of the cryptocurrency used for remuneration.

What’s your opinion about the updated guidelines regarding crypto taxation in the U.K.? Tell us what you think in the comments section below.


Images courtesy of Shutterstock.


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Critics Savage Research Paper Alleging Lone Whale Caused Bitcoin’s 2017 Rally

Par Kai Sedgwick
Critics Savage Research Paper Alleging Lone Whale Caused Bitcoin’s 2017 Rally

Crypto commenters have torn into a new research paper alleging a single whale caused bitcoin’s 2017 price rally. The paper, reported prominently in Bloomberg and the Wall Street Journal, has been criticized for failing to understand that mass inflows of tether (USDT) to the cryptoconomy are not indicative of a single source accounting for all the buy pressure.

Also read: Bad Loans at Big British Banks Jump Over 50% in a Year

The Legendary Lone Whale

The final draft of the research paper that’s had Tether’s lawyers seething for weeks has finally been published. Its conclusion – that a ‘lone whale’ was single-handedly responsible for propelling bitcoin to $20k – has not changed, but the findings have been bolstered by the addition of peer review. Crypto commenters are not impressed, though, and have dismissed the paper as flawed.

Critics Savage Research Paper Alleging Lone Whale Caused Bitcoin’s 2017 Rally

According to the updated paper from University of Texas Professor John Griffin and Ohio State University’s Amin Shams, first published in 2018, BTC buys on Bitfinex increased whenever bitcoin’s value fell by certain increments. “This pattern is only present in periods following printing of Tether, driven by a single large account holder, and not observed by other exchanges,” concludes the latest iteration of the paper, due for publication in the Journal of Finance. It adds:

Simulations show that these patterns are highly unlikely to be due to chance. This one large player or entity either exhibited clairvoyant market timing or exerted an extremely large price impact on Bitcoin that is not observed in aggregate flows from other smaller traders.

Tether’s General Counsel Stuart Hoegner countered that the paper was “foundationally flawed” and probably published to back a “parasitic lawsuit.” He continued: “This is a transparent attempt to use the semblance of academia for a mercenary money grab.”

ma·nip·u·la·tion
/məˌnipyəˈlāSHən/

𝘯𝘰𝘶𝘯

1. free market price discovery of an illiquid asset going through its adoption phase

"he stacked so many sats it was clearly manipulation"

— Matt Odell (@matt_odell) November 4, 2019

Correlation Does Not Equal Causation

Within the cryptosphere, observers were almost unanimous in condemning the research paper. “The venn diagram of people who don’t believe in markets but rather see conspiracies and manipulation everywhere has a perfect overlap with people who are not active in those markets,” tweeted Nic Carter. “It’s exclusively the purview of outsiders to claim the markets are somehow false. Umbrellas cause rain, finds Texas academic.”

Circle CEO Jeremy Allair labeled the WSJ’s story on the matter “extremely weak reporting” and explained that “in 2017/2018 there was demand for buying BTC and a massive alt coin rally. The majority of that demand came from Asia and China, and since there were no CNY ramps into BTC, everyone went to offshore USDT processors. These processors would then generate large prints of USDT. The only thing this supposed analysis shows is that Asia traders demanded fiat to buy BTC.”

Anyone writing about the 'lone whale' or Tether/Finex manipulation of Bitcoin clearly wasn't around in 2017 and/or has zero contacts with any company in the Bitcoin industry.

*Every* Bitcoin company I'm invested in saw insane growth in both users and transaction volume

— Alistair Milne (@alistairmilne) November 4, 2019

Ari Paul echoed Allair’s sentiment, tweeting “Their “research” is based on an elementary misunderstanding of how financial assets work.” Director of research at DAR Lucas Nuzzo wondered “What if the authors misunderstood that large USDT addresses are often highly syndicated, and what appears to be a “single whale” are thousands of different depositors?”

Good thing I was there to personally witness the millions of retail accounts opened @etoro during the 2017 rally. https://t.co/WjmdRHFXmG

— Mati Greenspan (@MatiGreenspan) November 4, 2019

What are your thoughts on the findings of the research paper? Let us know in the comments section below.


Images courtesy of Shutterstock.


Did you know you can verify any unconfirmed Bitcoin transaction with our Bitcoin Block Explorer tool? Simply complete a Bitcoin address search to view it on the blockchain. Plus, visit our Bitcoin Charts to see what’s happening in the industry.

The post Critics Savage Research Paper Alleging Lone Whale Caused Bitcoin’s 2017 Rally appeared first on Bitcoin News.

China Now Censors Anti-Blockchain Sentiment, Educates Public on Bitcoin

Par Kevin Helms
China Now Censors Anti-Blockchain Sentiment, Educates Public on Bitcoin

Officially Bullish on blockchain technology, China is now reportedly censoring anti-blockchain sentiment. Meanwhile, a popular Chinese app with over 100 million active users has recommended a course on bitcoin, blockchain, and smart contracts. The app is designed to teach “Xi Jinping Thought.”

Also read: China Ranks 35 Crypto Projects as President Xi Pushes Blockchain

Anti-Blockchain Articles Censored

Following President Xi Jinping’s very bullish speech on blockchain technology, news relating to blockchain has been extensively covered on national TV channels, newspapers and websites. “Articles saying blockchain technology is a scam are now banned,” popular Twitter user Cnledger reported, posting a screenshot of a message that says “This content cannot be viewed due to violation,” and that the platform is “suspected of violating relevant laws, regulations, and policies.”

A screenshot saying the content cannot be viewed due to violation. Source: Cnledger

Blockchain and Bitcoin Course Recommended

Meanwhile, Xuexi Qiangguo, a Chinese app primarily designed to teach Xi Jinping Thought, the political theory derived from Chinese President and Communist Party General Secretary Xi Jinping, has recommended a course focusing on blockchain and bitcoin. According to reports, Xuexi Qiangguo has more than 100 million active users as of October. “China’s most popular app, Xuexi Qiangguo (study for becoming powerful nation) now has a recommended course focusing entirely on blockchain, which contains Bitcoin & Ethereum lessons,” Cnledger also wrote. “The app [is] released by CPC [Communist Party of China] to help people learn about its political doctrines like Xi’s thoughts.”

The recommended course, entitled “Introduction to Blockchain Technology,” is taught by Chen Kang, an associate researcher at Tsinghua University’s Blockchain Research Center. The course is also offered on Xuetangx, the first Chinese MOOC platform which was founded by the university. It has courses from over 500 universities and claims to have more than 16 million registered users. Chen’s course covers an overview of blockchains, distributed consensus, Bitcoin, smart contracts, security, and big data.

Chen Kang teaching Introduction to Blockchain Technology. Source: Xuexi Qiangguo

Propaganda Tool With a Backdoor

Designed by Alibaba Group and released by the CPC’s publicity department in January, Xuexi Qiangguo is also the most downloaded app on Apple’s domestic app store. This app mostly serves as a news aggregation platform for articles, short video clips and documentaries about President Xi Jinping’s political philosophy.

While the Chinese government claims that the app is purely a fun educational tool, security researchers have discovered some code resembling a backdoor. An October report from U.S. government-backed Open Technology Fund (OTF), in collaboration with German cybersecurity firm Cure53, reveals that the Xuexi Qiangguo app has embedded code “resembling a backdoor which is able to run arbitrary commands with superuser privileges.”

If deployed, the code would grant a person complete system-wide administrative access, giving them “the power to do anything,” including downloading software, modifying files and data, or even installing a keylogger on the device. The app also scans for other apps installed on the device, the report notes, adding that the information collected by the app — such as user information, location, other apps on their phones, and activity log — is sent to various entities. Cure53 also conducted an audit of the app on Android operating systems, which make up more than 80% of smartphone operating systems in China. The firm found that the app gives the government the ability to determine “the location of every citizen at any single point in time.”

The State Council Information Office of China, responding to the Washington Post on behalf of the Chinese government, denied the app having the functions the reports suggest.

What do you think of China censoring anti-blockchain sentiment and the popular Chinese app recommending a course on Bitcoin and blockchain? Let us know in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or as a recommendation, endorsement, or sponsorship of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.


Images courtesy of Shutterstock, Cnledger, and Xuexi Qiangguo.


Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.

The post China Now Censors Anti-Blockchain Sentiment, Educates Public on Bitcoin appeared first on Bitcoin News.

Finland Approves First 5 Crypto Service Providers

Par Kevin Helms
Finland Approves First 5 Crypto Service Providers

Finland’s crypto regulation is now in full effect. The first five crypto service providers have been approved to legally operate in the country, the Finnish financial regulator confirmed to news.Bitcoin.com. The grace period for operating without registration has expired.

Also read: Finland Begins Regulating Crypto Service Providers

Only Five Registrants

Finland’s Financial Supervisory Authority (FIN-FSA) announced on Nov. 1 that it has granted registration to five crypto service providers. The registrants are Localbitcoins, Northcrypto, Prasos, Prasos Cash Management, and Tesseract Group. A spokesperson for the FIN-FSA confirmed to news.Bitcoin.com Monday:

Starting from 1st of November these five virtual currency providers are the only ones allowed to operate in Finland.

Finland Approves First 5 Crypto Service Providers

Localbitcoins operates a global peer-to-peer bitcoin marketplace. Northcrypto provides an exchange service for BTC and LTC for EUR. Tesseract Group, formerly Whalelend, provides asset management, OTC trading, and lending services.

Prasos offers crypto exchange and asset management services under four different brands. Coinmotion is an investment platform for BTC, LTC, ETH, XRP, and XLM, which also offers private crypto banking, white label solutions, and merchant services. The others are Bittiraha, a Bitcoin community and broker; Denarium, a physical bitcoin manufacturer; and Bittimaatti, a bitcoin ATM network.

“The registration process requires significant effort from the applicants, for example concerning customer due diligence and written documentation of activities,” the FIN-FSA explained.

Finland Approves First 5 Crypto Service Providers

During the registration process, the regulator assessed whether the applicants have adequate measures in areas such as preventing money laundering (AML) and terrorist financing (CFT), holding and safeguarding client assets, as well as having adequate management structure. The registrants have submitted written statements to the FIN-FSA describing how they are complying with the requirements. Going forward, the regulator will monitor them for compliance such as by requesting clarifications and performing inspections.

The FIN-FSA emphasized:

From 1 November 2019, only virtual currency providers who fulfill the requirements provided by legislation may practice activities in Finland.

Finland’s Crypto Regulation

The Act on virtual currency providers (572/2019) entered into force in Finland on May 1, installing the FIN-FSA as “the registration authority and supervisory authority for virtual currency providers,” the regulator’s website details. The law is based on the EU’s anti-money laundering legislation.

Finland Approves First 5 Crypto Service Providers

Crypto issuers, exchanges, marketplace operators, and wallet providers are required to register. The FIN-FSA defines a “wallet provider” as “a natural or legal person who holds virtual currency for the account of some other party or provides for the transfer or storage of virtual currency.” Traders who provides crypto services within a limited network or occasionally are exempt from registration, as are professional activities that require some other authorization by other authorities.

The regulator reiterated that “New providers of virtual currencies may not start the provision of services in Finland before their registration application has been approved,” adding:

If the virtual currency provider does not comply with the requirements, its activities will be prohibited and the FIN-FSA will impose a fine on the provider.

What do you think of the FIN-FSA approving these five crypto service providers? Let us know in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or as a recommendation, endorsement, or sponsorship of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.


Images courtesy of Shutterstock and the FIN-FSA.


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Crypto Secularizes Wealth by Returning Power to the People

Par Wendy McElroy
Crypto Secularizes Wealth by Returning Power to the People

Secularization is the process of converting something from a religious status to a nonreligious one. In its usage here, the word “religious” has no necessary connection to a deity. The word refers to the mystification of a thing in order to elevate it to the status of the divine where it becomes unquestionable.

Also Read: The Big Lie Perpetuated by Central Banks

Mystifying Money

The state is mystification on overdrive. Past governments have sanctified themselves through “the divine right of kings,” by which monarchs claimed to be chosen by God to rule. Rebellion against the king, therefore, was rebellion against God himself. Contemporary states use more modern concepts like “democracy” or “the motherland” to justify their status. These concepts arouse feelings of awe and reverence, which further sanctifies the state and discourages dissent.

The state’s goal is to usurp power and wealth from society—the productive sector.

Taxation is the most visible way it does so, but the state’s ability to issue fiat that becomes mandatory currency is equally or more important. To do so successfully, however, the state needs society to accept and use the paper money. Some people will comply out of fear of being punished, but it is far more efficient if society conflates fiat with real wealth. If fiat can be mystified as legitimate, then the resistance is sidestepped.

Much of fiat’s perceived legitimacy comes from its source—the state—because the state is still seen as a rightful authority. Fiat is further cemented into society through state-validated means like legal tender laws and the Federal Reserve System. “High finance” is removed from average, unlicensed people and channeled through bureaucracies like the SEC and the central banking system. And, in case some people still question, tax-paid academics and experts provide the state with intellectual ammunition. Like court historians of the past who rewrote history to glorify their monarchs, the experts present convoluted economic theories that support the state’s monetary policy, using as much math and arcane language as possible.

As long as money is “created” by politicians, bureaucrats, and experts, society and individuals will never control their own wealth—at least, not in a sanctioned or safe way. A heresy is growing, however. Call it private money or cryptocurrency, nothing is more heretical than free-market money that the individual decides is of value to him.

Crypto Secularizes Wealth by Returning Power to the People

Free Market Money vs Inflationary Paper

The state calls private money “the enemy.” Crypto is new, and it moves like the wind. The state cannot compete with it; the state does not even understand how to reproduce or to regulate it. Nor is this likely to happen in the future because blockchain-crypto is antagonistic to the mindset and mode of statists. Blockchain-crypto is the individual’s control of his own assets according to his own judgment. It is the secularization of wealth.

The fastest way to speed along the secularization of assets is to delegitimize fiat by exposing the intentional damage it does to society and individuals. In 1963, the Austrian School Economist Murray Rothbard wrote an influential book entitled What Has Government Done to Our Money? (An advocate of private money, Rothbard’s use of the word “Our” is notable.) The short book springboards off the insights of other Austrian School thinkers, such as Ludwig von Mises, who argued that money originated spontaneously due to the need of individuals to exchange on a more complicated level than barter. Money is a free-market phenomenon that the state appropriates through force. Fiat and the free market are antithetical.

Rothbard’s book explains one way in which free-market money and fiat cannot coexist: inflation, by which the first recipients of an increase in fiat money are enriched at the expense of the end recipients for whom the money has been debased. In short, the end recipient is robbed. Rothbard refers to inflation as “counterfeiting” because it is a creation of new money that is backed only by the false sanctity of the state, and its guns. But even the state cannot prevent its paper money from decreasing in value. Rothbard writes:

“Suppose the economy has a supply of 10,000 gold ounces, and counterfeiters [the state]…pump in 2000 ‘ounces’ more. What will be the consequences? First, there will be a clear gain to the counterfeiters [the state]. They take the newly-created money and use it to buy goods and services. In the words of the famous New Yorker cartoon, showing a group of counterfeiters in sober contemplation of their handiwork: ‘Retail spending is about to get a needed shot in the arm.’ Precisely. Local spending, indeed, does get a shot in the arm…As the new money spreads, it bids prices up—as we have seen, new money can only dilute the effectiveness of each dollar. But this dilution takes time and is therefore uneven; in the meantime, some people gain and other people lose…The first receivers of the new money gain most, and at the expense of the last receivers. Inflation, then, confers no general social benefit; instead, it redistributes the wealth in favor of the first-comers and at the expense of the laggards in the race.”

Describing inflation as “counterfeiting” is a charming departure from the usual legitimacy granted to fiat; it nicely captures the idea of inflation as theft and the state as illegitimate.

Most people have some understanding of the effect of direct inflation on prices because they see their own cost of living rise. But other, more subtle effects are as disastrous. One is a market distortion that Rothbard calls a “keystone of our economy: business calculation.” This calculation occurs when a business compares the cost of operation to the expected demand by customers. The calculation is one of the main cost-benefit analyses without which the free market cannot function well. The impact of crippling business calculation is rarely noted, however.

Crypto Secularizes Wealth by Returning Power to the People

Inflation Distorts Critical Economic Calculations

Since prices do not all change uniformly and at the same speed, it becomes very difficult for business to separate the lasting from the transitional, and gauge truly the demands of consumers or the cost of their operations. For example, accounting practice enters the “cost” of an asset at the amount the business has paid for it. But if inflation intervenes, the cost of replacing the asset will be far greater than that recorded on the books. As a result, business accounting will seriously overstate their profits during inflation—and may even consume capital while presumably increasing their investments. Similarly, stock holders and real estate holders will acquire capital gains during an inflation that are not really “gains” at all. But they may spend part of these gains without realizing that they are thereby consuming their original capital.

The illusory profits also “suspend the free market’s penalizing of inefficient, and rewarding of efficient, firms.” Equally, inflation distorts people’s personal lives by punishing economic virtues like thrift. If $100 borrowed today can be repaid tomorrow with money that has a lower purchasing value, then at least three consequences are likely to follow. People will embrace borrowing rather than saving. They will spend the money they borrow or earn; “people will say: ‘I will buy now, though prices are high, because if I wait, prices will go up still further’. As a result, the demand for money now falls and prices go up more, proportionately, than the increase in the money supply.” Lenders become tight fisted.

The state typically addresses this “money shortage” by cranking up the printing press again, and the cycle of inflation continues. At some point, the entire system of fiat begins to break down, and individuals—even those inclined to obey—seek out alternative currencies or stores of value. At this point, the state’s veneer of sanctity also starts to crack. To maintain its monetary hold, it must either ban the alternatives or control them. Either tactic carries danger, however. Just as legitimization of the state makes individuals obey, the blatant misuse of power makes them resist.

Crypto Secularizes Wealth by Returning Power to the People

Leaving the Church of Force-Based Money

The best time to resist and demand financial freedom is right here and now before the system goes any farther off the rails. The rebellion comes when a nexus of at least three factors occurs.

The first is when people fully grasp the monetary scam being committed by the state. In this endeavor, What Has Government Done to Our Money? is invaluable.

The second factor is when they realize the state and society cannot peacefully coexist. The state destroys all of value in society such as voluntary exchange, respect for rights, and a reputation built on honesty. The battle against monetary statism is not against any particular politician or public policy like inflation. The issue is deeper. The battle is against an entrenched tolerance of the state’s aggression. The 18th-century anarchist William Godwin expressed the human importance of rejecting aggression. “Force is an expedient, the use of which must be deplored. It is contrary to the intellect, which cannot be improved but by conviction and persuasion. Violence corrupts the man who employs it and the man upon whom it is employed.” If Godwin is correct, as I believe he is, then sanctifying the state is an act of inhumanity.

The third factor in the nexus is the existence of practical alternatives to fiat. Without alternative forms of free-market currency and wealth, those who stand up for financial freedom can all too easily become martyrs crushed by the state. And religions have already produced enough of those.

What are your thoughts on the “church” of fiat money? Let us know in the comments section below.

Op-ed disclaimer: This is an Op-ed article. The opinions expressed in this article are the author’s own. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the Op-ed article. Readers should do their own due diligence before taking any actions related to the content. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any information in this Op-ed article.


Images courtesy of Shutterstock.


Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The Local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.

The post Crypto Secularizes Wealth by Returning Power to the People appeared first on Bitcoin News.

No Inflation? Here It Is – Hidden in Plain Sight

Par Graham Smith
No Inflation? Here It Is - Hidden in Plain Sight

Popular among politicians, media, and central bankers alike is the claim that in spite of all the quantitative easing (QE) and zero-leaning or negative interest rates of current times, inflation is under control. As the statistics show, nothing could be further from the truth. There are some very sly ways governments attempt to mask inflation and these are hidden in plain sight. Should the refusal to look at this ballooning elephant in the room continue, dire economic consequences may become unavoidable.

Also Read: Bad Loans at Big British Banks Jump Over 50% in a Year

No Small Problem

The best hiding places are sometimes right out in the open. While central banks like the U.S. Federal Reserve, financial media and global monetary policy groups often point to metrics like the Personal Consumption Expenditures Price Index (PCE) and consumer price index (CPI) as basic metrics for inflation, this approach is argued by many to be inadequate. There are several types of inflation affecting the money supply, as it is not an isolated phenomenon only touching select consumer purchases. In fact, the foundational mechanics of fiat money itself (government issued and mandated money like the U.S. dollar) are inflationary at base, and the issue is compounded outward from there in virtually endless permutations.

Before the advent and widespread use of inflationary paper money by governments and rulers, inflation took the form of monarchs diluting coinage. The value was thus reduced. This practice had serious limits though, and paper currency provided a much more exploitable system. In similar fashion to the mixing of metals, inflation occurs today in hidden places, while prices and face values of the “diluted products” remain the same.

Target Inflation

The Fed has set a target inflation rate of 2%, stating:

The FOMC [Federal Open Market Committee] noted in its statement that the Committee judges that inflation at the rate of 2 percent (as measured by the annual change in the price index for personal consumption expenditures, or PCE) is most consistent over the longer run with the Federal Reserve’s statutory mandate.

The mandate referenced is the 2012 institution of a target inflation rate. In spite of the rate and stable appearance of charts and data, however inflation is hiding elsewhere.

No Inflation? Here It Is - Hidden in Plain Sight

Shrinkflation and Spun Stats

Whether it’s the shrinking size of Little Debbie snack cakes or the measurements of toilet paper, the effects of inflating the money supply can be seen everywhere. Companies are forced to lower the quality or quantity of their products to keep up with an inflating — and thus weakening — currency. This phenomenon is known as shrinkflation. The gradual loss of value is born by the business (imagine replacing newly inflated stock according to old prices on the books) and the consumer. No matter how stable the inflation rate may be said to be by officials, a real value hemorrhage is occurring.

Further, while politicians and financial media often point to the increasing affordability of tech, losses in affordability of critical goods and services hide inflation in plain sight. Education, healthcare, housing and food have all become markedly less affordable over the past two decades. But hey, at least you have an iPad.

No Inflation? Here It Is - Hidden in Plain Sight

Assets Tell a Darker Tale

At the Federal Reserve’s meeting on October 30, Fed Chair Jerome Powell stated:

The reason why we raise interest rates, generally, is because we see inflation as moving up, or in danger of moving up significantly, and we really don’t see that now.

Powell may not see it, but that doesn’t mean it isn’t there. While popular figures such as American presidential candidate Andrew Yang may say things like “The federal government recently printed $4 trillion for bank bailouts in its quantitative easing program with no inflation,” this simply is not the case. Newly created stimulus money lurks in banking reserves and often remains confined there, or limited to financial markets, thanks in part to interest rates set by the Fed designed to discourage banks loaning out the reserves to the wider market. As the New York Fed website details:

The other component of IOR [Interest on Reserves] is Interest on Excess Reserves (IOER), which is the interest paid on those balances that are above the level of reserves the DI [depository institution] is required to hold. Paying IOER reduces the incentive for DIs to lend at rates much below IOER.

However, this is much like telling a child to guard a bag of marshmallows and not eat them. Fed policy moves slower than the market, and if IEOR isn’t set appropriately to encourage banks and lending institutions not to lend, that excess cash can come out in a deluge before the Fed can raise rates to discourage it. Thanks to inflation, the money is most useful to the first holders and the expanded monetary based is dammed up and ready to burst anytime on a populace who will be further down the line in the inflation scheme, and thus easy to trap into agreements with the new “cheap” money.

While economists, politicians and other government talking heads say we’re doing alright, it just isn’t the case, as the Federal Reserve’s own data show. The graph below shows a growing household net worth in spite of massive QE in the wake of the global downturn beginning in 2007. Since the Great Recession, the monetary base has increased by around $3.5 trillion. It shot up to all time highs in 2014, tapered off again down to 2013 levels, and, not producing the effect the Fed wanted, is being given another shot in the arm in this latest round of “not QE.”

 

While the high pressure of massive and prolonged Fed stimulus pushes on the doors and seeps through the cracks of lending institutions, commercial real estate prices have doubled since 2009. Asset values have rapidly grown, inspiring lending institutions to provide more loans at lower rates with these inflation-distorted assets as collateral. The bubble created by inflation, in other words, is ready to burst.

Round After Round

In his book “The Constitution of Liberty,” renowned Austrian economist Friedrich Hayek writes:

Inflation is probably the most important single factor in that vicious circle wherein one kind of government action makes more and more government control necessary. For this reason all those who wish to stop the drift toward increasing government control should concentrate their effort on monetary policy.

The very idea that an increase in money supply would not devalue that same money is asinine on its face. Government cites deflation and other pressing matters — problems centralized economic meddling itself has created — and refuses to let the market correct failure and reward success organically. In the end, it’s like watching a man with a terrible hangover go on binge after binge to cure his pounding headache. He only finds himself in a worse position the next day. If the man is the Fed, then he further blames his sober friends for the imposition. There’s nothing non-existent about that coming pain after stimulated stupor, it’s just waiting to strike the following day. In the Fed’s case and that of the world economy, the next time may be more of a visit to triage than a mere headache.

What are your thoughts on the supposed lack of inflation after more than a decade of QE? Let us know in the comments section below.


Image credits: Shutterstock, Keith Homan, fair use.


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UK-Based Electric Bike Company Launches SLP Reward Token

Par Jamie Redman
UK-Based Electric Bike Company Launches SLP Reward Token

On November 5, Cryptophyl.com, the SLP-centric trading platform, announced a commercial partnership with the bicycle company Toba Electric Bikes using SLP technology. Toba sells electric bikes for bitcoin cash and the company’s SLP token will be used for customer rewards. Moreover, Cryptophyl plans to list the token called ‘toba’ on the exchange for trading on November 15.

Also Read: Billion Dollar Bitcoin Lawsuit Continues as Craig Wright Breaks Settlement

Cryptophyl and Toba Electric Bikes Partner to Bolster SLP Technology

A collaboration between Cryptophyl.com and Toba Electric Bikes has invoked the first SLP token that’s redeemable for physical goods. On Tuesday, the two companies announced the commercial partnership which aims to bolster both BCH and SLP technology. Toba Electric Bikes is a two-year-old company that has helped strengthen the electric bike industry in Europe and was once known as 50 Cycles.

UK-Based Electric Bike Company Launches SLP Reward Token

The team has sold more than 30,000 electric bikes and Toba is now designing its own bike called the model BH TOBA-T that’s set to release next year. The TOBA token created on top of the Bitcoin Cash (BCH) network using SLP will be rewarded to customers cycling on Toba-sold bicycles. Toba is exclusively accepting digital assets such as BCH, BTC, and toba (TOBA). The company says that toba users will get a 10% discount on Toba products and bicycles using the token.

“Toba is using cutting-edge technology to deliver long term value to users,” the founder and CEO of Cryptophyl Semyon Germanovich explained. “We’re delighted to be the exchange of choice for listing their token and to be working with another UK-based company with an innovative business model, made possible by the Simple Ledger Protocol.”

UK-Based Electric Bike Company Launches SLP Reward Token

Applied Tokenization and Accelerated Adoption

Germanovich further detailed that toba will be listed on the exchange with other SLP tokens such as spice, honestcoin, and drop. According to Toba Electric Bikes, the toba token will be spendable with the company on December 16. The reason for the wait is so the token can gain a one-month period of market price discovery. Additionally, Cryptophyl disclosed $35,000 worth of toba tokens will be airdropped to drop holders

UK-Based Electric Bike Company Launches SLP Reward Token

“Cryptophyl is the most exciting exchange to launch this year because it is dedicated to the trading of Simple Ledger Protocol Tokens (SLP),” Scott Snaith, founder and CEO at Toba Electric Bikes, said during the announcement. Snaith added:

Cryptocurrency is entering a new phase of adoption with SLP. Cryptophyl is becoming a real contender in the world of applied tokenization, accelerating adoption over the coming years.

2019 has seen the SLP token infrastructure grow quite mature and many tokens now have utility and have seen price discovery. Tokens like USDH, spice, merits, flex, and ACD coin now have real-world value. With new SLP tokens created every day and a few gathering traction, it shows the nascent token economy built on top of Bitcoin Cash is just getting started.

What do you think about the Toba Electric Bike token created using the Simple Ledger Protocol? Let us know what you think about this subject in the comments section below.


Image credits: Shutterstock, Cryptophyl, Toba Electric Bike, and Simpleledger.info.


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New Hire to Head Digital Currency Research at the US Fed

Par Lubomir Tassev
New Hire to Head Digital Currency Research at the Fed

The United States Federal Reserve is looking to employ a Manager, Retail Payments, part of whose responsibilities will be to oversee the research of digital currencies and distributed ledgers. The job ad has been published amid pressure from Capitol Hill to explore the possibilities of issuing a digital dollar.

Also read: Why Central Banks Are Not Designed for Democracies

Federal Reserve to Hire Retail Payments Manager

Geopolitics is a fast paced, high stake game and no major player can afford to ignore the surprising moves of their opponents. The Chinese leadership is now betting on blockchain while the People’s Bank of China is working on a digital yuan. Calls for a digital greenback, still the world’s main currency, have been issued in the corridors of power in Washington. This is all happening on the backdrop of a raging trade war with Beijing in which global dominance is at stake.

The potential benefit of integrating digital currencies into retail payments has caught the attention of the Federal Reserve. A job opening posted on Nov. 4 shows that the U.S. central bank is now planning to expand research in the field. The Fed’s Board of Governors is seeking to hire a professional who will be in charge for overseeing its Retail Payments Section. Facilitating financial and digital innovation is part of the job description.

New Hire to Head Digital Currency Research at the US Fed

Candidates must bring at least a bachelor’s degree but a master’s or other advanced degree is preferred. They are also expected to have at least seven years of relevant experience. The position is based in Washington, D.C. and the Fed provides support for relocation. Although it’s a regular job, it involves a decent amount of travelling – 25% of the time according to the ad.

The new Manager, Retail Payments will direct the section’s routine activities and will be tasked to lead, develop and execute administrative supervisory duties for its staff. The annual salary for the managerial post will be between $120,600 and $250,700. The federal salary grade is low 28 – high 29.

The job posting further details that the Retail Payments Section oversees the Federal Reserve Banks’ check and automated clearinghouse services and deals with policy and regulatory issues concerning retail payment systems. Its head will be responsible for “Facilitating and contributing to innovations research including digital currencies, stable coins, distributed ledger technologies, and broadly financial/digital innovation in retail payments,” among other duties.

US Dollar’s Primacy in Jeopardy

The job announcement, which indicates the Fed’s interest in digital currencies, comes after recent media reports that America’s central bank is exploring the idea of developing a digital version of the dollar. Furthermore, at the end of September two members of the U.S. Congress sent a letter to the Chair of the Federal Reserve, Jerome Powell, urging the Fed to look at creating a national digital currency.

New Hire to Head Digital Currency Research at the US Fed

Bill Foster (D-IL), chair of the AI Task Force and Congressional Blockchain Caucus co-chair, and French Hill (R-AR), ranking member on the AI and Fintech Task Force, expressed concerns that “the primacy of the US Dollar could be in long-term jeopardy” in competition from digital fiat currencies and their private sector equivalents. They asked a number of questions about the Fed’s current activities and plans regarding the potential development of a U.S. dollar digital currency.

The two congressmen cited a study by the Bank of International Settlements which found that 40 countries around the world are looking into developing or have already developed a digital currency. Their letter provides examples such as Sweden’s e-krona and Facebook’s Libra project while highlighting expectations that the Chinese central bank is going to launch a digital yuan as early as this year. According to an ad published in October, the People’s Bank of China is looking to hire six professionals with a background in cryptography and other tech disciplines to work on a digital national fiat.

Do you expect the U.S. Federal Reserve to develop a digital dollar? Share your thoughts on the subject in the comments section below.


Images courtesy of Shutterstock.


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Canadian Regulator Seizes Troubled Crypto Exchange

Par Kevin Helms
Canadian Regulator Seizes Troubled Crypto Exchange

The British Columbia Securities Commission has taken control of a cryptocurrency exchange which allegedly owes customers over $12 million. Einstein Exchange had planned to shut down amid complaints, lawsuits, and money laundering investigations. The Canadian regulator has also taken action against another crypto exchange after receiving multiple complaints.

Also read: OSC Commissioner Debunks Arguments Against Bitcoin, Green-Lights Bitcoin Fund

Exchange Seized

The British Columbia Securities Commission (BCSC) has taken control of a Vancouver-based cryptocurrency exchange. The regulator announced Monday that the Supreme Court of British Columbia has granted its application for “an order appointing an interim receiver to preserve and protect any assets of Einstein Exchange.” Grant Thornton Ltd., the court-appointed interim receiver, entered and secured the premises of Einstein Exchange on Nov. 1, the commission revealed.

The documents filed in court detail that the BCSC had received numerous complaints about customers being unable to access their assets on the exchange. BCSC Executive Director Peter Brady told CBC News, “We had sent some requests for information to the exchange twice and we didn’t get an answer,” adding that on Oct. 31:

We were then talking to the company’s counsel and learned that the exchange intended to shut down within 30 to 60 days due to a lack of profit and subsequently that legal counsel stepped down, so that raised concerns for us.

Brady noted that the commission has also notified federal law enforcement regarding concerns about possible money laundering at the exchange. The commission started investigating the exchange in May.

Canadian Regulator Seizes Troubled Crypto Exchange

The BCSC is the independent provincial government agency responsible for regulating capital markets in British Columbia. The regulator emphasized that it has not authorized any company to operate as a cryptocurrency exchange. However, it has granted registration to a fund manager to operate a crypto investment fund and approved a bitcoin trust.

The Investigation

Einstein Exchange was established in December 2017 by British Columbia resident Michael Ongun Gokturk, the sole director of the exchange. Einstein offered the trading of 19 cryptocurrencies against the USD and accepted customer deposits in CAD, USD, and cryptocurrencies.

In an affidavit, Sammy Wu, Lead Investigator with the BCSC Enforcement Division, said that “In the view of BCSC staff, the trading platform operated by Einstein involves trading in securities.” Pursuant to the Securities Act section 144, Wu requested financial information from the exchange, including its fiat and cryptocurrency balances, as well as the locations where its fiat and cryptocurrencies are stored. The exchange provided neither, and two hours after Wu made the request, the exchange’s counsel notified Wu that he no longer represented Einstein. Nonetheless, Wu learned of the exchange’s shutdown plan and its failed attempt to sell itself to a U.S. company, his affidavit details. He believes that Einstein improperly used its customers’ assets.

Canadian Regulator Seizes Troubled Crypto Exchange

Unable to obtain needed information from the counsel, Wu proceeded to personally visit the exchange’s office only to find the elevator locked for all floors, the affidavit further describes. “I called Gokturk’s phone number listed on their website and the recording said all their agents are not available. I called Gokturk and his voice mail said that he is unavailable and to send a text message since he does not check voice mail. I sent him a text message,” Wu recounted.

The BCSC staff has determined that Einstein Exchange owes customers more than $16,322,705 Canadian dollars (~$12,398,726), including more than $11 million CAD in cryptocurrencies and about $5 million CAD in cash. While Einstein Exchange claimed it had “sufficient crypto assets to satisfy withdrawal requests from customers,” the regulator pointed out that the exchange’s lawyers refused to specify the location of those assets.

Complaints and Lawsuits

According to CBC News, Einstein Exchange is also facing a pair of civil suits filed last month, which Gokturk has yet to file responses to. The first suit was filed by Hong Kong-based Sino Allied alleging that Einstein Exchange repeatedly failed to pay the $1 million owed for the purchase of tether.

The second suit was filed against Gokturk by Vancouver technology entrepreneur Scott Nelson who said he was not paid for the transfer of 50 BTC. The entrepreneur claimed that Gokturk told him he would wire the money, but “repeatedly blamed technical issues for the failure,” then said he would give him a bank draft but none was ever delivered. Moreover, the news outlet reported that a default judgment was issued in April against Gokturk and his exchange in relation to money owed on an American Express credit card.

Besides Einstein Exchange, the BCSC is reportedly investigating complaints against another crypto exchange, the Nanaimo-based Ezbtc. A BCSC spokesperson told the press that the regulator has taken action against the exchange because “customer assets are at risk,” noting that several complaints have been received about this exchange.

What do you think of the BCSC seizing Einstein Exchange and taking action against another? Let us know in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or as a recommendation, endorsement, or sponsorship of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.


Images courtesy of Shutterstock and the BCSC.


Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.

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190 Indian Bank Branches Raided in Massive Fraud Crackdown

Par Kevin Helms

India’s Central Bureau of Investigation has reportedly raided over 190 bank locations nationwide in an effort to crack down on fraud involving at least 15 banks. As many as 1,000 officers were involved in what is now one of the largest coordinated searches in India this year.

Also read: State Bank of India Chief Says Crypto Regulation Is a Must

Major Bank Fraud Crackdown

The Indian Central Bureau of Investigation (CBI) carried out searches at over 190 bank locations nationwide on Tuesday, local media reported. An officer of the bureau said that the CBI has registered 42 new scam cases involving Rs 7,200 crore (~$1 billion). PTI reported that CBI’s teams knocked on doors of the accused to collect evidence and question them, elaborating:

The operation was spread across 16 states and union territories with as many as 1,000 officers of the agency involved in it making it one of the largest coordinated searches this year.

“Out of these 42 cases, there are 4 cases of more than Rs 1,000 crore and 11 cases of fraud amount of Rs 100 crore to Rs 1000 crore,” a statement issued by the CBI reveals. “During searches, incriminating documents have been recovered so far.”

The statement further details that most of the loan fraud cases were detected at 15 banks, including the State Bank of India (SBI), the country’s largest government-owned lender. The other banks involved were Andhra Bank, Oriental Bank of Commerce, Indian Overseas Bank, Allahabad Bank, Canara Bank, Dena Bank, Punjab & Sind Bank, Punjab National Bank, Central Bank of India, Union Bank of India, IDBI Bank, Bank of Baroda, Bank of Maharashtra, and Bank of India, Business Today detailed.

The searches were conducted throughout Tuesday, most of which were in Maharashtra where 58 bank locations were raided, followed by Punjab with 32 branches searched. Other searches were carried out in New Delhi, Tamil Nadu and Madhya Pradesh, Uttar Pradesh, Andhra Pradesh, Chandigarh, Kerala, Telangana and Dadra and Nagar Haveli, Gujarat and Haryana, Karnataka and Uttarakhand, and West Bengal.

PMC Bank Fraud Case Continues

A recent, widely-publicized fraud case involving one of the largest cooperative banks in the country is still ongoing. Punjab and Maharashtra Cooperative (PMC) Bank, with 137 branches in multiple states, was put under regulatory restrictions by the Reserve Bank of India (RBI) in September, limiting customer withdrawals to 100 rupees for six months.

The withdrawal limit has been increased several times, following protests and court petitions. On Nov. 5, the central bank raised the limit to 50,000 rupees, but some depositors are still battling with the central bank to gain access to all of their money. In the PMC fraud case, bank officials allegedly created more than 12,000 fictitious accounts to cover up bad loans worth approximately Rs 4,300.

Last year, India’s second-biggest state-controlled lender, Punjab National Bank, was hit by a $2 billion fraud scandal. The RBI said in June that over 6,800 cases of bank fraud involving an unprecedented Rs 71,500 crore (~$10 billion) have been reported in 2018-19.

What do you think of bank fraud cases in India and the nationwide crackdown? Let us know in the comments section below.


Images courtesy of Shutterstock.


Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.

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Chinese Communist Party Reportedly Filling Roles at Top Exchange Huobi

Par Graham Smith
Chinese Communist Party Reportedly Filling Roles at Top Exchange Huobi

A source has reported to news.Bitcoin.com that the Chinese government is attempting to directly manage the crypto exchange industry in the country. According to the source, this could lead to frozen assets for U.S. account holders and others. Notably, Huobi Global’s website has announced that U.S. accounts “have been gradually disabled” due to compliance issues, and that they “will freeze all US user accounts from 13 November 2019 (GMT+8) onwards.” The anonymous source maintains the motivations for the move go deeper than mere compliance with U.S. standards.

Also Read: China Now Censors Anti-Blockchain Sentiment, Educates Public on Bitcoin

Huobi Global Freezes Accounts

As Huobi Global and Chinese crypto investment community Bishijie.com recently reported, U.S. accounts on the exchange will soon be frozen. The company had already begun disabling user capabilities prior to the notice. Traders have until November 13 to move their assets from the exchange, and the Huobi blog post details the protocol as well as how to sign up for the U.S.-compliant version, Huobi US.

While the creation of and migration to U.S.-specific exchanges for compliance purposes is not unusual, a Hong Kong-based source and OTC trader informs news.Bitcoin.com that there is more to the story, and it is not only U.S.-based traders who should be concerned.

Chinese Communist Party Reportedly Filling Roles at Top Exchange Huobi
Announcement on Bishijie.com of impending Huobi freeze.

Government Management of the Crypto Industry

The source most notably told news.Bitcoin.com that according to an insider, the Chinese Communist Party (CCP) is stepping into managerial positions at popular crypto exchange Huobi:

It’s the fact. Already have CCP members take role as huobi management.

Chinese Communist Party Reportedly Filling Roles at Top Exchange Huobi

A Volatile Backdrop

As previously reported, the Chinese government also appears to now be censoring criticism of ”blockchain”. President Xi Jinping’s recent public promotion of the technology, coupled with a focus on development of the nation’s own central bank digital currency — known as the digital currency electronic payment (DCEP) system — adds further context to the Hong Kong trader’s reports. “Also president Xi announced China will put more resources into crypto space,” he noted.

With the situation in Hong Kong volatile, fear among crypto traders is pronounced and some worry markets will be overtaken. According to the anonymous source, the CCP is moving to:

Take every leading company in the [financial] industry. Alibaba. Tencent.

The statement hearkens to events in early October, when Alipay tweeted: “There’re several reports about @Alipay being used for bitcoin transactions. To reiterate, Alipay closely monitors over-the-counter transactions to identify irregular behavior and ensure compliance with relevant regulations.”

Do you think Chinese exchanges will be, or already are, compromised by the CCP? Let us know in the comments section below.


Image credits: Shutterstock, fair use.


Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The Local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.

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Tokens.net Seals Partnership With Bitcoin.com as an Official SLP Partner

Par Bitcoin.com PR
Tokens.net Seals Partnership With Bitcoin.com as an Official SLP Partner

Simple Ledger Protocol (SLP) is a protocol for token creation on the Bitcoin Cash (BCH) chain, promoting tokenization of assets in a simple and effective way. The Simple Ledger Protocol provides electronic wallets, block explorers, social media bots, token faucets and back-end infrastructure, as well as protocols for token creation and consulting for token resources and development.

Simple Ledger Protocol (SLP) and Simplified Tokenization

As tokenization is slowly but steadily gaining in popularity thanks to transparency and increased functionality in terms of storing and distributing value, the Simple Ledger Protocol offers a simplified and efficient way of tokenizing assets with greater integrity as opposed to traditional forms of asset trading and accounting. Any value can be tokenized and SLP offers the right tools for the tokenization of gaming assets, gift cards, digital media rights, company stocks and shares, creating a highly functional digital market. SLP tokens are created on the Simple Ledger Protocol that is built on the Bitcoin Cash chain, enabling prompt and efficient management, token creation and trading. SLP tokens on the Bitcoin Cash chain are equivalent to ERC20 type tokens on the Ethereum network.

SLP provides efficiency, integrity and transparency through enabling support for light wallets, full audibility for on-chain transactions, simplified token systems with user-friendly tools, token loss prevention, flexible issuance, multi-signature addresses and peer-to-peer exchange of tokenized value within a permissionless environment.

Tokens.net is Joining the SLP Alliance

Tokens.net exchange is proud to be a part of the development of tokenized assets and a decentralized digital market by becoming one of the first cryptocurrency and token exchanges to adopt the SLP protocol. Through this implementation, Tokens.net is joining the broader market of digital assets with SLP implementation, towards bringing tokenization to broad masses. Tokens.net is partnering with Bitcoin.com in order to bring SLP tokenization to mainstream markets and towards mass adoption.

About Tokens.net

Tokens.net is operating under the slogan “Trusted European Crypto exchange”, justifying their principal motto with top safety, high-security standards, utmost reliability, and 100 per cent transparent trading volume. Founded by crypto pioneers, the exchange represents a trusted platform for trading, backed by a team of professionals with a proven reputation. Based in the UK, this European crypto exchange takes pride in transparency, security and unique user-friendly design with various trading tools for experienced traders and beginners.

Contact Email Address
sebastjan.ivanusa@tokens.net

Supporting Link
https://www.tokens.net/

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Video: Bitcoin Cash Lets You Buy Equity Over the Counter at a Bar

Par Avi Mizrahi
Video: Bitcoin Cash Lets You Buy Equity Over the Counter at a Bar

With all the talk about investing in digital assets new people to the scene might not know that cryptocurrency is still being used as peer-to-peer electronic cash as it was intended. The latest video from Bitcoin.com shows how BCH is used to buy anything from drinks at the bar to equity in a venture safely and easily.

Also Read: Video: Will Bitcoin Crash or Double in Price After the Halving? Miners Have Their Say

Using Cryptocurrency at the Bar

The Bitcoin.com team recently attended a bitcoin cash meetup at Brewdog in London to sample some of the BCH-fueled nightlife the British capital has to offer. A short video with highlights from the event showcases how cryptocurrency is used by real people to make payments today for everyday purchases such as drinks at the bar.

The London meetup also gave a chance for new people to learn about using the Bitcoin.com Wallet for fast, cheap and reliable payments firsthand. They got on the spot, real money demonstrations from the team including the company’s top leadership of Executive Chairman Roger Ver and CEO Stefan Rust.

Watch the video on the official Bitcoin.com Youtube channel, subscribe and make sure to leave a comment to join the discussion.

Equity for Punks

One interesting highlight from the Brewdog meetup video is seeing how CEO Stefan Rust bought shares in the craft brewer with bitcoin cash right at the bar. In July of this year Brewdog, which had already been selling beers for BCH since 2018, revealed that the public can also invest in the company using cryptocurrency. It has a crew of over 1,500 employees, 80 locations worldwide with two breweries in Ellon, Scotland and Columbus, Ohio that export to 60 markets globally.

The brewery’s crowdfunding project, “Equity for Punks,” has been extended until April 2020 and accepts bitcoin core (BTC), bitcoin cash (BCH), omisego (OMG), qtum (QTUM), augur (REP), 0x (ZRX), bitcoin SV (BSV), ether (ETH), litecoin (LTC), and ripple (XRP). Shares in Brewdog cost £25 each and can be redeemed through the company’s website. It had already raised over £72 million from more than 114,000 people around the world before opening up the crypto option.

Video: Bitcoin Cash Lets You Buy Equity Over the Counter at a Bar

James Watt, Captain of Brewdog, stated at the time: “Our Equity Punks are our community, our shareholders and our friends and the driving force behind our business. The growth BrewDog has shown over the last decade could only have been achieved with their encouragement and support and together we have shown the city slickers what can be achieved with taking charge of something you believe in. Cryptocurrency is exactly the same. If you embrace change to subvert the mainstream we are in your corner; whether your weapons of choice are malt, hops, yeast and water or blockchain.”

Join a Bitcoin Cash Meetup

If you want to join a similar event, you’ll find many local bitcoin cash meetups available all over the world at Bitcoin.com’s Events page. You can use the map tool to zoom in on your area to see what meetups are available nearby, or just search the directory listing them by continents, countries, cities and so on.

You can also create a new bitcoin cash meetup yourself. If you need help with this, on the same page you have the option to contact the Bitcoin.com team for support in setting up your new group and getting more people to join meetings based on their experience. Offering drinks for crypto can probably help with getting more people onboard.

An additional way to find bitcoin cash meetups or to see how successful ones are organized is to follow @BCHMeetups on Twitter. This profile routinely publishes posts on BCH gatherings happening in many different countries, information on where people can find meetups in their area, as well as pictures and stories from events that have already taken place.

What do you think about using cryptocurrency as a payment method to buy equity at a bar? Share your thoughts in the comments section below.


Images courtesy of Shutterstock.


Verify and track bitcoin cash transactions on our BCH Block Explorer, the best of its kind anywhere in the world. Also, keep up with your holdings, BCH and other coins, on our market charts at Bitcoin.com Markets, another original and free service from Bitcoin.com.

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China Removes Bitcoin Mining From Unwanted Industries List

Par Lubomir Tassev
China Takes Bitcoin Mining Out of Unwanted Industries List

Inspired by its new fascination with blockchain, China now seems to have changed its mind about cryptocurrency mining. The latest version of a national macroeconomic plan indicates that the government in Beijing has given up intentions to suppress the bitcoin mining industry, in which Chinese companies have become global leaders.

Also read: Another Chinese Lender Bailed Out After Bank Run

Mining Not to Be ‘Eliminated’

The Industrial Structure Adjustment Guidance Catalog, issued by China’s National Development and Reform Commission (NDRC), has lost a reference to crypto mining activities. This is actually good news as a draft released earlier this year had mining among industries that Beijing wanted local administrations to get rid of. “That doesn’t mean mining is legal, but it is less illegal,” a Chinese miner contacted by news.Bitcoin.com remarked confirming the news.

China Removes Bitcoin Mining From Unwanted Industries List

The final version of the document, which was published this week, will enter into force in January 2020. The catalog lists industries that regional authorities are advised to encourage, restrict or eliminate. The initial policy proposal prepared by the central government agency in April reportedly mentioned virtual currency mining in the ‘eliminate’ category.

NDRC, formerly the State Development Planning Commission, is responsible for macroeconomic management. It operates under the State Council, which is China’s main administrative authority controlling the country’s economy. The commission formulates policies for economic and social development and guides restructuring efforts. With around two dozen departments and agencies under its umbrella, it effectively functions as a mini version of the Chinese government.

China’s Dominance in Bitcoin Minting

Cheap electrical energy and suitable climate have turned China into a hotspot for the business of minting digital coins. The People’s Republic is a global leader in bitcoin mining with Chinese pools controlling around 70% of the BTC network’s collective hashrate. The most populous country is home to the world’s largest mining operations and mining hardware manufacturers such as Beijing-based Bitmain.

China Removes Bitcoin Mining From Unwanted Industries List

The Chinese government has treated various crypto-related business activities differently. While cryptocurrency exchanges and coin offering projects were effectively banned from the mainland, authorities have largely turned a blind eye to digital currency mining. What’s more, in regions such as Sichuan, mining farms utilize electricity from state-owned hydropower plants even under contractual arrangements, as news.Bitcoin.com reported during the rainy season this summer. This year’s crypto market recovery made bitcoin mining profitable again and anyone can participate without having to acquire mining equipment thanks to services offered by platforms such as the Bitcoin.com Pool.

China’s role, both in the traditional economy and the crypto space, has been growing for years but the ongoing trade war with the U.S. forced the country to intensify the search for alternative paths of development. A recent Politburo speech by the General Secretary of the Communist Party, Xi Jinping, indicated that Beijing has decided to put blockchain in the focus of these efforts. And although China has never been particularly friendly to decentralized cryptocurrencies, it’s developing a digital yuan instead, and crypto markets have reacted positively to the move that many in the industry view as a bullish step.

Do you expect the removal of crypto mining from the list of unwanted industries in China’s macroeconomic plan to have a positive effect on the bitcoin mining industry? Share your thoughts on the subject in the comments section below.


Images courtesy of Shutterstock.


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Conceal and Reveal: The Evolution of Privacy Coin Technology

Par Kai Sedgwick
Conceal and Reveal: The Evolution of Privacy Coin Technology

Privacy can assume many forms and occur on many levels. The technologies that blockchain architects originally envisioned for privacy coins are now being utilized by an array of crypto stakeholders, from enterprises to exchanges. What began as a means of transacting anonymously has spawned a burgeoning industry, built upon technologies designed to conceal, but which can also be programmed to reveal to a select few.

Also read: Chinese Communist Party Reportedly Filling Roles at Top Exchange Huobi

zk-Snarks

zk-Snarks are best known for their use in privacy coin protocols such as Zcash. These “zero knowledge proofs” have far broader applications than simply masking the sender and receiver when transmitting crypto via a public ledger. A zero-knowledge proof allows one party to prove to another that a statement is true, without revealing any information about the statement itself.

To break this down into a simple analogy, imagine that Farmer Bob is selling some livestock at the market. He wishes to prove to the auctioneer that there is a cow in his trailer, but without opening the door (cos then the creature would escape). Using a heat sensor installed inside the trailer, Bob can prove that there is a living, breathing animal inside, but the auctioneer will have no way of knowing which cow it is, or even whether the animal is a cow (unless it moos and gives the game away). That, essentially, is how a zk-Snark operates: proof that something is true, while disclosing zero knowledge about the thing in question.

As for how zk-Snarks can be deployed outside of privacy coin transactions, look no further than smart contracts. Quras, for example, is using the technology to provision privacy-enabled smart contracts that run on its eponymous VM. Applications include concealing information pertaining to credit history; enabling healthcare and medical information from IoT devices to be shared confidentially; and facilitating sealed auctions that are executed using smart contracts.

Conceal and Reveal: The Evolution of Privacy Coin Technology

Mohammad Mazen is the CEO of Burency, a cryptocurrency exchange and blockchain research and development platform. Expounding on why private smart contracts are desirable, he told news.Bitcoin.com: “Smart contracts have the potential to automate business processes ranging from calculating insurance premiums to powering decentralized synthetics markets, but for this to happen, there needs to be privacy built in. Broadcasting information on-chain nullifies any benefits that might otherwise have been gained through using blockchain, since publicly verifiable smart contracts enable observers to frontrun markets and steal competitors’ proprietary algorithms. Privacy technology provides a means to conceal the secret sauce that’s in a smart contract, while still enabling its integrity to be verified.”

Mimblewimble

zk-Snarks aren’t the only privacy technology whose applications extend far beyond those originally envisioned by its pseudonymous creator. The origins of Mimblewimble don’t need retelling again, but its evolution does. Although utilized by both Grin and Beam – and soon Litecoin too – it is the Beam iteration of Mimblewimble that has applications for the broadest range of users. Understanding how Mimblewimble works isn’t easy, unless you’re au fait with elliptic curve cryptography. Even Beam’s attempt at explaining the process via a series of dumbed down metaphors takes some digesting.

What’s relevant here isn’t so much the way in which Mimblewimble works, but the fact that it can provide complete transactional anonymity between parties while being compatible with implementations such as Beam that enable optional audibility. Digitally signed documentation can be attached to transactions, giving an approved auditor permission to view the transactions associated with a particular key. For cypherpunks intent on concealing their activity from snooping governments, that ability will be of little interest, but for businesses that wish to conceal their day-to-day affairs from the public (paying staff, contractors, and purchasing goods) while still remaining compliant from an accounting perspective, it’s extremely useful.

Conceal and Reveal: The Evolution of Privacy Coin Technology

Bulletproofs

Bulletproofs are actually part of the zero-knowledge proofs family and allow multiple range proofs from different parties to be aggregated into one proof. What this means, in practice, is that bulletproofs allow for information to be significantly compressed without compromising its validity. When integrated into Monero last year, for example, bulletproofs slashed transaction fees through reducing the average size of each transaction.

There is a number of interesting applications for bulletproofs outside of facilitating confidential transactions. They can be used in proof of solvency, for instance, with one research paper noting: “A Bitcoin exchange with 2 million customers needs approximately 18GB to prove solvency in a confidential manner … Using Bulletproofs and its variant protocols … this size could be reduced to approximately 62MB.” The same paper lists a total of eight use cases for bulletproofs, including smart contracts and crypto derivatives.

Privacy coin tech follows the same adoption curve as other disruptive technologies: first it’s used by criminals, outlaws, and geeks. Then by enterprises, ordinary end users and even governments. Just as it was with encryption, so it is proving to be with privacy-preserving tech: from unknown to ostracized to indispensable in under a decade.

What other privacy technologies have broad applications beyond simply enabling anonymous transactions? Let us know in the comments section below.


Images courtesy of Shutterstock.


Did you know you can verify any unconfirmed Bitcoin transaction with our Bitcoin Block Explorer tool? Simply complete a Bitcoin address search to view it on the blockchain. Plus, visit our Bitcoin Charts to see what’s happening in the industry.

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Kim Dotcom Token Sale Postponed Over ‘Regulatory Uncertainty’

Par Jamie Redman
Kim Dotcom Token Sale Postponed Over 'Regulatory Uncertainty'

In 2017, Kim Dotcom, the founder of the now-defunct file hosting service Megaupload, revealed a similar service called K.im that planned to give anyone the ability to upload files, documents, code, videos, and music files and get paid in crypto for their work. Since then, Dotcom’s team disclosed there would be an exchange sale for Kimcoin token on the digital asset exchange Bitfinex. However, Bitfinex and the K.im platform team say that “regulatory uncertainty” has caused them to postpone the sale.

Also Read: Bitcoin Cash Captured 90% of October’s Crypto Spending in Australia

Kim Dotcom’s K.im Token Sale Delayed Indefinitely

The token sale for the K.im platform is being postponed according to a blog post from the cryptocurrency exchange Bitfinex. K.im is a project that was created by the notorious Kim Dotcom, the New Zealand resident who once operated the popular file-sharing site Megaupload. In 2012, the U.S. Department of Justice (DoJ) seized the website and charged Dotcom with copyright infringement. Since then, Dotcom has been a popular socialite on Twitter and is well known for his appreciation for cryptocurrencies like BTC.

Kim Dotcom Token Sale Postponed Over 'Regulatory Uncertainty'
During the crypto bull run of 2017, Kim Dotcom announced his content monetization platform called K.im.

For instance, on October 31, the 11th anniversary of the Bitcoin whitepaper, Dotcom tweeted that “crypto is all about freedom.” Over the last few years, the former Megaupload boss has been working on a project called K.im, a platform designed so users can upload content and be rewarded with small fractions of bitcoin micropayments. News.Bitcoin.com was invited to privately demo the application in August 2017 but the K.im project hasn’t been officially released and people can only demo the app.

Kim Dotcom Token Sale Postponed Over 'Regulatory Uncertainty'

Dotcom’s team also used the fundraising platform bnktothefuture.com and raised $1,061,696 from 330 investors. The project’s elevator pitch explained that Dotcom’s blockchain platform would aim to provide better privacy and leverage the BTC chain to glue the foundation together. Additionally, the K.im platform and Bitcache would use other blockchain solutions like storj and maidsafe. In September 2019, the project’s whitepaper disclosed that the K.im project would use a native token called Kimcoin to facilitate access to the content held on the network. The whitepaper revealed that Kimcoin was not going to be mined but minted using the Liquid network, a federated sidechain developed by Blockstream. The file-sharing platform would allow users to utilize BTC payments but Kimcoin was said to have more of an advantage because it’s less cumbersome. Kimcoin would also have other perks and a rewards program.

Kim Dotcom Token Sale Postponed Over 'Regulatory Uncertainty'

Bitfinex and the K.im Team Mutually Agree Not to Hold Token Sale at This Time

Kimcoins were supposed to be sold on Bitfinex on October 22 and the coin would eventually be listed on the exchange in Q3 2020. However, on November 5, Bitfinex told potential investors that the token sale would be delayed because of regulatory concerns. “Since we announced the debut of Kimcoin on the Bitfinex Token Sale platform, the regulatory environment has rapidly evolved,” the exchange wrote. “The risks associated with raising funds for the K.im token sale have become clear, and we must put our community’s best interest first and foremost.” The news follows the recent SEC fines given to projects like EOS and Siacoin. The project Igobit and its founder was charged by the DoJ on November 6 for “participation in an investment scheme tied to a purported digital coin offering.” The Kimcoin token sale organizers may have decided to cancel after the domino effect of ICO-based criminal charges and court settlements in recent weeks.

“After careful evaluation, we regret to announce that Bitfinex Token Sales and the K.im team have mutually agreed not to hold the token sale at this time,” Bitfinex disclosed. “K.im will defer any decision on whether to create tokens on, or undertake a token issue in relation to the K.im platform until it is fully functional,” Bitfinex added:

In the meantime, the K.im platform project itself will continue and it is likely that an equity-based offer will be made some time in the near future to qualifying investors who wish to become involved at this stage of the project.

Kim Dotcom Token Sale Postponed Over 'Regulatory Uncertainty'
K.im platform roadmap according to the whitepaper.

Dotcom’s platform has been in the making for a very long time and has seen quite a few hurdles along the way. For three years, people have been waiting to see the project unfold but now have to wait even longer because of the regulatory opacity. The project’s roadmap shows that with the token sale being pushed off, it may delay other projected accomplishments like Liquid network integration slated for Q1 2020, K.im application services and prototyping, and the official Kimcoin launch that was supposed to happen in Q3 2020.

What do you think about Kim Dotcom’s K.im token sale delay? Let us know what you think about this subject in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or as a recommendation, endorsement, or sponsorship of any products, software, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.


Image credits: Shutterstock, Independent, Wiki Commons, Fair Use, the K.im platform, and white paper, and Pixabay.


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Meet Flowee the Hub: A Feature-Rich Bitcoin Cash Validator

Par Jamie Redman
Meet Flowee the Hub: A Feature-Rich Bitcoin Cash Validator

Bitcoin Cash development has been growing wildly over the last year between third party services and infrastructure. Since the inception of BCH, there’s been a number of full node clients that not only distribute important binary data but offer a variety of different features as well. One such project is the Bitcoin Cash validator and database created by Tom Zander called Flowee the Hub, a BCH client that aims to be a multi-service node that offers a myriad of functionality.

Also Read: Video: Will Bitcoin Crash or Double in Price After the Halving? Miners Have Their Say

Flowee the Hub

When Satoshi Nakamoto published the Bitcoin codebase in 2009 he wrote the protocol using the programming language C++, but Bitcoin itself can conform to any language and any full node implementation that follows the consensus rules. Bitcoin Cash has 1,525 public nodes running BCH and there are five different BCH full nodes, according to Coin Dance statistics. At the moment there’s Bitcoin ABC, BCHD, Bitcoin Unlimited, Bitcoin Verde, and Flowee the Hub. The project Flowee is a BCH validator and database created by blockchain developer Tom Zander.

Meet Flowee the Hub: A Feature-Rich Bitcoin Cash Validator

The full node client validates BCH transactions so users and organizations can verify the data as factual. The software can forward transactions and provide a record of incoming transactions as well, giving the Flowee user real-time data. Beyond the full node operations, Flowee also offers foundational support for applications. Essentially Flowee’s ‘Hub’ is a full suite of application program interfaces (APIs) or a set of routines, protocols, and tools for building with Bitcoin Cash.

Meet Flowee the Hub: A Feature-Rich Bitcoin Cash Validator

When Zander introduced the platform to the BCH community he explained how he created Flowee in order to produce an infinitely scalable client that can “talk to the blockchain in an easy to understand API.” “No fussing with other people’s software or unreliable third parties,” the platform’s website explains. “Flowee lets you process or create Bitcoin Cash payments within your own applications.” The developer known as ‘Imaginary Username’ described Flowee in a very succinct way when the project was first established. The software engineer stated:

For the people needing a TL;DR: Tom Zander is looking to build a “full-service” BCH node that integrates various useful functions at a more basic level (that make explorer et. al. easier to deploy and run), has native multithreading to get over the block/tx validation problem, has memory-mapped blocks to reduce RAM usage (so gigabyte blocks can be deployed painlessly) and can be easily managed. Imagine having the Bitpay infrastructure under one roof, on a GPL license.

Meet Flowee the Hub: A Feature-Rich Bitcoin Cash Validator

Bitcoin Cash Can Scale

Flowee has four different paths: the hub, an indexer, a transaction ‘vulcano,’ and a point-of-sale system called the Flowee Cashier that’s under construction. Essentially, the indexer allows people to obtain indexes from the BCH chain in a fast manner. “Indexer is a stand-alone service you can deploy on one (or more) machines and they create an index of the most important details of the transactions database that the hub stores,” the indexer documentation details. “This allows you to ‘follow the money,’ as it were. Any department that wants to do any sort of client followup towards payments will want to have access to an indexer.” The transaction vulcano (txVulcano) is a test tool designed to “create massive amounts of transactions.” According to the documentation, the transaction vulcano’s main focus is to mine blocks and use the block reward to create more transactions with more inputs. The vulcano process continues in a repetitive cycle in order to process extremely large blocks.

In March, the Flowee developer revealed that the project was “stress tested and used to create big blocks for a week.” Zander added:

1.2 million transactions in 400MB processed in 45 seconds.

Meet Flowee the Hub: A Feature-Rich Bitcoin Cash Validator

Flowee the Hub is open source and the code can be found on Gitlab and reference documentation is available on docs/hub. Just recently Flowee published the 2019-09 release, which offers APIs and features support for the November 15 upgrade. The latest Flowee version specifications can be reviewed here and people are urged to upgrade the software as soon as possible before the upgrade. Zander noted on November 6 that installing the latest Flowee release was a breeze. “I installed Flowee the Hub on a simple server last night and the initial block sync took only 2 hours,” the developer tweeted. “Processing the entire 11-year block history — I think this is a good prove that Bitcoin Cash can scale already very well, thanks.”

Meet Flowee the Hub: A Feature-Rich Bitcoin Cash Validator

Flowee is a BCH implementation that has been out for quite some time and the software aims to bolster scaling while also offering a suite of services. While Bitcoin ABC and Bitcoin Unlimited are the dominant nodes, other BCH clients offer people a choice while providing different sets of features as well. For example, BCHD is a full node BCH implementation written in Go (golang) that provides an advanced API, adjustable blocksize cap, BIP 157/158, BIP 68, and other features. Bitcoin Verde is a full node client that was built from the ground up and offers a block explorer and library. Multiple clients like Flowee and other BCH implementations can provide developers creating BCH apps and other types of platforms the tools they need to create robust products and services while speeding up their workflow. If you are interested in what Flowee has to offer, check out the project’s getting started page.

What do you think about the Bitcoin Cash platform Flowee the Hub? Let us know what you think about this subject in the comments section below.


Image credits: Shutterstock, Flowee the Hub, and Pixabay.


Are you a developer looking to build on Bitcoin Cash? Head over to our Bitcoin Developer page where you can get Bitcoin Cash developer guides and start using the Bitbox, SLP, and Badger Wallet SDKs.

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Hong Kong Now Offers Opt-In Regulation to Crypto Exchanges

Par Kevin Helms
Hong Kong Now Offers Opt-In Regulation to Crypto Exchanges

Hong Kong’s Securities and Futures Commission has established a new regulatory framework that allows crypto exchanges to opt-in to be licensed and regulated. Starting Wednesday, centralized trading platforms can apply for a license, providing they meet certain requirements including adequate measures for the safe custody of assets, insurance, hot and cold wallets, and private key management.

Also read: 23 Central Banks Divulge Their Digital Currency Requirements

An Opt-In System

The Hong Kong Securities and Futures Commission (SFC) published a new regulatory framework for crypto exchanges on Wednesday. CEO Ashley Alder explained that the commission met with a number of crypto exchange operators after unveiling a conceptual framework that could be used to regulate crypto exchanges last year. “After an in-depth examination of the unique technical and operational features of these platforms, we finally concluded that some could be regulated by us,” he remarked.

Hong Kong Now Offers Opt-In Regulation to Crypto Exchanges
SFC CEO Ashley Alder

The commission has been focusing on whether to regulate crypto exchanges. Alder elaborated, “We saw this as a priority because this type of platform has proliferated in Hong Kong and up to now has largely escaped any form of regulation,” adding that it is largely because crypto assets fall outside the legal definition of securities and futures contracts. Since bitcoin and other cryptocurrencies are not securities and “nothing in our new framework alters this position,” he admitted that the SFC can only regulate those platforms that choose to include at least one security crypto asset or token for trading. “But once this happens our new rules will apply to all platform operations, even if the vast majority of other virtual assets traded on the platform are not securities.” The CEO clarified:

So this, essentially, is a framework allowing a platform operator to opt-in to regulation … Once licenses are granted to those platforms which choose to opt-in, investors will then be able to distinguish easily between properly regulated platforms, and all the rest.

Hong Kong Now Offers Opt-In Regulation to Crypto Exchanges

What the Regulation Entails

The SFC detailed in its “Position Paper” published on Wednesday the rules and requirements for crypto trading platforms to be regulated. The commission also emphasized that only centralized platforms in Hong Kong that provide crypto trading, clearing, and settlement services will be considered for licensing. Applications from peer-to-peer marketplaces will not be accepted at this time. The SFC confirmed:

As from 6 November 2019, a firm which operates a centralized virtual asset trading platform in Hong Kong and intends to offer trading of at least one security token on this platform may apply for a license from the SFC for Types 1 and 7 regulated activities.

The Type 1 license is for dealing in securities and the Type 7 is for automated trading services (ATS) activities. The commission also requires all trading activities of its licensees, including those conducted by their group companies, to be carried out under a single, SFC-licensed legal entity. The regulator explained that not only will it allow for comprehensive oversight, but it also “minimizes any uncertainty about which parts of the business are licensed and supervised by the SFC.”

Hong Kong Now Offers Opt-In Regulation to Crypto Exchanges

Further, licensees are required to obtain prior written approval from the SFC for any plan or proposal such as for introducing or offering a new or incidental product or service, or to make a material change to an existing service or activity. Licensees must also provide monthly reports to the commission and engage an independent professional firm to review their activities and operations annually.

The Position Paper also outlines licensing conditions, the first of which details who can trade on licensed platforms. The SFC noted:

The licensee must only provide services to professional investors.

The definition of a professional investor is extensive; it includes an individual, a partnership or a corporation with a portfolio of at least 8 million HKD (~$1 million) or equivalent, or a trust corporation with total assets of at least 40 million HKD or equivalent.

For the safe custody of assets, the SFC requires licensees “to ensure that an insurance policy covering the risks associated with the custody of virtual assets held in both hot storage (full coverage) and cold storage (a substantial coverage, eg, 95%) is in effect at all times.” Licensed platform operators and their associated entities must also store 98% of client crypto assets in cold wallets and limit the amount stored in hot wallets to 2%. The commission also expects them “to set up and implement strong internal controls and governance procedures for private key management to ensure all cryptographic seeds and keys are securely generated, stored and backed up.” Moreover, the SFC added:

A virtual asset trading platform operator, upon becoming licensed, will be placed in the SFC Regulatory Sandbox. This would typically mean more frequent reporting, monitoring and reviews.

There are many more conditions that must be met, including complying with the SFC code of conduct and having adequate measures for know-your-client (KYC), anti-money laundering and counter-financing of terrorism (AML/CFT), preventing market manipulation and abusive activities, accounting and auditing, and risk management.

What do you think of Hong Kong’s opt-in regulation for crypto exchanges? Let us know in the comments section below.


Images courtesy of Shutterstock and Asianinvestor.


Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.

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Bitcoin History Part 19: Wikileaks and the Hornet’s Nest

Par Kai Sedgwick
Bitcoin History Part 19: WikiLeaks and the Hornet’s Nest

“WikiLeaks has kicked the hornet’s nest, and the swarm is headed towards us.” With those 13 words, Satoshi Nakamoto stepped into oblivion, leaving a blizzard of unanswered questions that would enshroud his disappearance. That ominous message was to prove his penultimate forum post, dispatched a day before his final entry. What happened to put Wikileaks in the crosshairs of Bitcoin’s creator?

Also read: Bitcoin History Part 18: The First Bitcoin Wallet

Wikileaks Shines a Light on Bitcoin

Satoshi’s words were freighted with such a sense of foreboding that many believe they signified the writing on the wall; a sign that Nakamoto’s tenure as Bitcoin figurehead had reached its inevitable end. His remark that Wikileaks had “kicked the hornet’s nest” referred to the possibility of the controversial whistleblower website turning to bitcoin, after the U.S. government forced companies like Visa, Mastercard and Paypal to blockade the organization. According to an earlier post by Satoshi, the bitcoin project needed “to grow gradually so the software can be strengthened along the way,” and the association with Wikileaks came too early in its development.

As a disoriented Julian Assange attempts to fight extradition to the U.S. in the British courts, having earlier claimed to have made a 50,000% return on bitcoin in the years following Satoshi’s disappearance, it’s interesting to look back to that period – December, 2010 – when Satoshi’s retreat began and Wikileaks’ investment in bitcoin started being seriously discussed. This was a true fork in the road, significant not only to the history of bitcoin but also to state surveillance and those who would kick back at it.

Bitcoin History Part 19: WikiLeaks and the Hornet’s Nest

The Man Who Kicked the Hornet’s Nest

You might wonder why Bitcoin’s founder was so alarmed by the news that Wikileaks was seeking to raise funds using the decentralized payment system. After all, bitcoin was designed to bypass gatekeepers and obviate the need for a central authority – and here was a perfect use case to prove its merits.

In response to a forum member positively touting Wikileaks’ embracement of bitcoin, published exactly one week before his final forum post, Satoshi said: “No, don’t “bring it on”… Bitcoin is a small beta community in its infancy. You would not stand to get more than pocket change, and the heat you would bring would likely destroy us at this stage.”

The problem was very clear, as Satoshi saw it: unwanted government interest in the nascent digital currency was the last thing it needed at that point in time. And since just about every other payment gateway was refusing to process donations to Wikileaks, Julian Assange’s solicitation of donations via bitcoin seemed to be a matter of time. At the very least, Satoshi wanted such a move to be discouraged – and he conveyed as much to Assange, as recounted by the latter in a 2014 Reddit Ask Me Anything (AMA) session and also in his book “When Google Met WikiLeaks”:

WikiLeaks read and agreed with Satoshi’s analysis, and decided to put off the launch of a Bitcoin donation channel until the currency had become more established. WikiLeaks’ Bitcoin donation address was launched after the currency’s first major boom, on June 14, 2011.

Interestingly, the besieged organization opened the floodgates for bitcoin donations just two months after Satoshi’s last ever correspondence – an email to collaborator Gavin Andresen.

Bitcoin History Part 19: WikiLeaks and the Hornet’s Nest

The rest, as they say, is history: Wikileaks received tens of millions of dollars in bitcoin donations between 2011 and 2018 (the exact figure continues to be disputed), Assange spent years in London’s Ecuadorian embassy before being arrested, and in Satoshi’s absence, Bitcoin was to kick many more hornets’ nests only to emerge, each time, stronger.

Bitcoin History is a multipart series from news.Bitcoin.com charting pivotal moments in the evolution of the world’s first and finest cryptocurrency. Read part 18 here.


Images courtesy of Shutterstock.


Did you know you can verify any unconfirmed Bitcoin transaction with our Bitcoin Block Explorer tool? Simply complete a Bitcoin address search to view it on the blockchain. Plus, visit our Bitcoin Charts to see what’s happening in the industry.

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Turkey Becomes the Latest Nation to Work on Digital Fiat

Par Lubomir Tassev
Turkey Becomes the Latest Nation to Work on Digital Fiat

Trade wars, sanctions, fear from private and decentralized cryptocurrencies. Regardless of the motive, a number of governments have recently taken the path of creating their own digital money. Turkey has become the latest country to announce plans for the issue of a “blockchain-based” national currency.

Also read: China Removes Bitcoin Mining From Unwanted Industries List

Digital Lira to Be Tested as Ankara Builds Fintech Ecosystem

The project to develop a digital lira has found a place in Recep Erdogan’s Annual Presidential Program, the state-run Anadolu Agency reported. According to the recently published document, Turkey is set to launch the coin as soon as it completes the design, development and testing phases. The program explicitly notes that a “blockchain-based digital currency” will be introduced.

Tests with the Turkish crypto are expected to commence as early as 2020 but the leadership in Ankara doesn’t stop there. The wider plan is to adopt a roadmap for the development of а full-fledged fintech ecosystem in the country. As part of these efforts, the presidential program envisages the establishment of a “financial technopark” in Istanbul, Turkey’s largest city and economic capital.

Turkey Becomes the Latest Nation to Work on Digital Fiat
Istanbul

The digital lira initiative comes at a time when Turkey is facing mounting economic and financial challenges. Soured relations with the U.S. over Ankara’s rapprochement with Moscow and other independent moves by Erdogan’s administration have even led to a threat from President Trump to “totally destroy and obliterate the Economy of Turkey.”

Over the past few years Turkey was also struggling with high inflation of the paper lira, which has greatly increased the popularity of decentralized cryptocurrencies in the country. A fifth of the Turkish respondents in a study conducted this year stated they owned digital coins. The inflation trend has been reversed in the past months, however, with the rate dropping from over 20% in January to below 9% in October.

Last month, the Central Bank of Turkey cut interest rates to 14% from 16.5% in September and is expected to announce another cut in December. The issue of a central bank digital currency (CBDC) fits in with Ankara’s broader objective to improve and strengthen the country’s economy as well as to build a more stable financial sector with plans for Turkey to become a global financial center. These goals have also been specified in the new presidential program.

States Competing to Issue Digital Currencies

The Turkish government is not the only one working on a digital version of its fiat currency. According to a report published earlier this year by the Bank for International Settlements (BIS), 70% of 63 surveyed central banks are exploring options to introduce CBDCs. According to another report by the Official Monetary and Financial Institutions Forum think tank, as part of which officials from 23 central banks were polled, the first CBDC will be produced within five years, as news.Bitcoin.com reported.

The BIS study was quoted in a letter sent by two congressmen to the Chair of the Federal Reserve Jerome Powell in September. The lawmakers, democrat Bill Foster and republican French Hill, urged the Fed to consider creating a national digital currency, noting that 40 countries are already looking into developing CBDCs. Pressure on the U.S. government to put out a digital dollar has been mounting amid fears of possible decline of the greenback as the world’s reserve currency in competition with private and government-issued digital currencies.

Turkey Becomes the Latest Nation to Work on Digital Fiat

Similar concerns have been expressed in the European Union as well. A recent report by Reuters quoted a draft EU document stating that the European Central Bank should think of introducing a public digital currency to counter Facebook’s project to issue a private coin for users of the social network. The document, prepared by the Finnish presidency for next month’s meeting of EU finance ministers, also urges the Union to develop a common approach and increase regulatory efforts regarding cryptocurrencies.

Meanwhile, the Chinese government has been working on a digital yuan for some time, with the People’s Bank of China recently posting a recruitment notice for six professionals with cryptographic and related experience. A project to issue a Chinese digital currency is part of the recently prioritized blockchain development of the country. A digital yuan would potentially give China an edge in the intensifying competition for global dominance with the U.S. and other major geopolitical players.

Do you expect Turkey to launch a digital version of the lira as early as next year? Share your thoughts in the comments section below.


Images courtesy of Shutterstock.


Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.

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Market Outlook: Crypto Whale Tales and China’s Blockchain Hype

Par Jamie Redman

During our last market outlook, cryptocurrency prices had found new foundations after the massive rally on Friday, October 25. Since then digital currency prices have been meandering roughly in the same positions after coins like BTC failed to break upper resistance on various occasions.

Also read: China Removes Bitcoin Mining From Unwanted Industries List

Crypto Prices Hold Foundational Support But Fail to Break Upper Resistance

At the time of publication, the market capitalization of all 3,000+ digital assets is hovering around $260 billion on Thursday, November 7. Currently, the top 15 coins with the largest market caps are down a few percentages between 1-5%. BTC is currently trading for $9,240 per coin and the market has an overall valuation of $166 billion today. The digital asset is down 1.44% in the last 24 hours but it’s up +0.16% for the week.

There’s around $22.7 billion in global trades today with BTC and 76% of those trades are paired against tether (USDT). ETH is swapping for $187 per coin and is down 1.74% today but ETH is up 2.3% over the last seven days. ETH has a market valuation of around $20.3 billion and roughly $9.1 billion in trade volume worldwide. XRP has lost more than 3% on Thursday and 1.11% for the week as each coin is trading for $0.29. Lastly, the stablecoin tether (USDT) is holding the fifth-largest market cap today and is capturing roughly two-thirds of all trades within the cryptoconomy.

Bitcoin Cash (BCH) Market Action

The fourth-largest market valuation is held by bitcoin cash (BCH) on November 7 and each BCH is swapping for $291 per coin. BCH is down 3.3% today but is up around 2.7% over the course of the last seven days. There’s about $2.28 billion in global BCH swaps and the cryptocurrency has a market cap of around $5.28 billion. Yesterday digital currency analyst John Isige noted that BCH prices re-entered the $300 range and after conquering that price point “bitcoin cash has changed focus to $400.”

“In the meantime, [BCH] is trading at $304 after a 4% gain on the day. The Relative Strength Index (RSI) breaching 70 to show that the bullish action’s momentum is at its peak,” Isige wrote on November 6. “The Moving Average Convergence Divergence (MACD) also puts emphasis on the bullish action.” The following day on November 7 shows 62% of the BCH trades are being swapped with tether (USDT). This is followed by BTC (16.8%), USD (13.8%), ETH (3%), and KRW (2.6%).

Whale Watch

Over the last two weeks, there’s been a lot of fear uncertainty and doubt (FUD) surrounding the topic of whales. First, there was a research study that was widely debunked concerning one single BTC whale allegedly manipulating the market in 2017. Then many others have been watching giant whale wallets and onchain movements that showcase massive BTC transactions. The latest bitcoin whale discussion is centered around the Twitter account @whale_alert which has noticed a dormant BTC address housing 80,000 BTC.

“That address alone — if that is actually a whale who’s been holding their coins for so long without doing anything with them — if they decide, ‘Okay, let’s go sell them,’ it would crush the market completely,” Whale Alert explained in a recent interview. “But it’s really hard to say anything about the status of that address: Are those keys lost? Is that person even still alive? … It’s just waiting to see if anything happens with those addresses,” the Twitter account added. Meanwhile according to data stemming from the crypto analysis site Coin Metrics, the Bitcoin Rich List (BTC holders with 1,000 or more) has grown by 30% in the last year.

China Embracing Blockchain Could Be Bearish or Bullish

As news.Bitcoin.com’s Lubomir Tassev reported on November 6, the new edition of China’s Industrial Structure Adjustment Guidance Catalog has removed bitcoin mining from the unwanted industries list. Since the General Secretary of the Communist Party, Xi Jinping, lauded blockchain in a recent speech, digital currency markets have seen a massive boom and many people believe the new outlook from China is optimistic. There has been a huge shift from Chinese residents transitioning from the over-the-counter marketplace Localbitcoins to Paxful after localbitcoins.com published strict KYC/AML policies.

Moreover, Chinese traders are using other avenues like Localethereum and local.Bitcoin.com as well. However, various pundits believe that China will build a digital currency that will hurt public cryptos like bitcoin in the future. Gold bug and economist Peter Schiff believes a gold-backed digital currency stemming from China will be “bearish for bitcoin.” Schiff tweeted his opinion on November 1 saying:

According to Max Keiser, I’m an idiot because I think gold is better money than bitcoin. He also claims China is about to launch a cryptocurrency backed by gold. This is bullish for gold and bearish for bitcoin. A crypto backed by gold is much better than one backed by nothing.

BTC Is Not a Great Medium of Exchange’ Says Facebook’s Crypto Boss

On November 6, the head of Facebook’s cryptocurrency subsidiary Calibra, David Marcus, told participants at the New York Times Dealbook Conference that BTC is an investment and not a currency.

Facebook’s crypto boss, David Marcus says BTC is not a good medium of exchange.

“I don’t think of bitcoin as a currency — It’s actually not a great medium of exchange because of its volatility — I see it as digital gold.” Moreover, Marcus highlighted that BTC basically conformed to the traditional status quo investment environment because it’s not considered a medium of exchange. Marcus said a key reason that Bitcoin has not been regulated out of existence is because it is not perceived to be a medium of exchange. “It’s an investment class that’s decorrelated from the rest of the market — Why feel threatened by that?”

Will Bullish Markets Continue or Are We Seeing a Fake-Out?

Overall cryptocurrency fans and observers are watching market movements, but things have been quiet lately as far as big price movements are concerned. Some people believe crypto markets will break through the upper resistance and continue the bullish trend that started on October 25.

I am being asked about a Head Fake on the six hour $btcusd chart. The setup up is near perfect all that is needed is completion, a hard down bar. https://t.co/6GmgDiy3yz I'll be talking about these in Milan for Swissquote this Friday. @Swissquote_it

— John Bollinger (@bbands) November 5, 2019

Others believe the current jump could be a fake-out, and after a few attempts, BTC’s market value could see the $7-8K price ranges again. Digital currency markets are seemingly at a pivotal position once again as traders hope and pray they played their positions correctly.

Where do you see the cryptocurrency markets heading from here? Let us know what you think about this subject in the comments section below.

Disclaimer: Price articles and market updates are intended for informational purposes only and should not be considered as trading advice. Neither Bitcoin.com nor the author is responsible for any losses or gains, as the ultimate decision to conduct a trade is made by the reader. Always remember that only those in possession of the private keys are in control of the “money.” Cryptocurrency prices referenced in this article were recorded at 9:15 a.m. EST.


Images via Shutterstock, Trading View, Bitcoin.com Markets, Getty, Coinlib.io, Wiki Commons, bitcoinblockhalf.com, and Pixabay.


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FBI Says Bitcoin Concern Is Getting ‘Bigger and Bigger’

Par Graham Smith
FBI Says Bitcoin Concern Is Getting 'Bigger and Bigger'

In a recent U.S. Senate Committee on Homeland Security And Governmental Affairs hearing, Senator Mitt Romney expressed concerns about Bitcoin’s potential as a threat to national security. Federal Bureau of Investigation (FBI) Director Christopher Wray replied that cryptocurrency is a concern that’s “going to become a bigger and bigger one.”

Also Read: Crypto Secularizes Wealth by Returning Power to the People

What Mitt Doesn’t Know Might Affect Crypto

As more nations begin to experiment with or talk about development of their own central bank digital currencies (CBDCs), and regulation of crypto in general, the topic of truly permissionless crypto like bitcoin is becoming hotly debated. According to a report from Forbes, the Republican senator from Utah was admittedly in the dark about the nature of cryptocurrencies, but nonetheless concerned at the hearing Tuesday. Addressing Homeland Security, National Counterterrorism Center and FBI leaders, Romney stated:

I’m not in the Banking Committee. I don’t begin to understand how cryptocurrency works. I would think it is more difficult to carry out your work when we can’t follow the money because the money is hidden from us…

The FBI Director noted that the agency views crypto “from an investigative perspective including tools that we have to try to follow the money.” Though citing the increasing efficiency with which criminals are able to utilize emergent tech and anonymizing tools, Wray was nonetheless reticent to commit to any statements about proposed regulations saying, “Well certainly for us cryptocurrency is already a significant issue and we can project out pretty easily that it’s going to become a bigger and bigger one. Whether or not that is the subject of some kind of regulation as the response is harder for me to speak to.”

Republican Senator Mitt Romney

Libra, Permissionless Money, and CBDCs

As Facebook’s ongoing battle for Libra seems to demonstrate, U.S. regulators are in no hurry to let just anybody come out with their own digital money. Even some generally opposed to Facebook couldn’t help but take small pity on CEO Mark Zuckerberg as he faced an hours-long bipartisan grilling at an October 23 hearing. Questioned on Facebook’s record of invading user privacy and other shortcomings, Zuckerberg put forth his case, stating of Libra:

The vision here is to make it so that people can send money to each other as easily and cheaply as it is sending a text message.

The topic of easy-to-use digital money is gaining popular currency these days, and even central banks are jumping on the bandwagon. There is political pressure being applied by lawmakers to U.S. Federal Reserve Chairman Jerome Powell, urging openness to the possible development of a U.S. digital currency, and at least 40 other countries working on or considering the development of digital currencies worldwide, according to a study by the Bank of International Settlements.

While central bank digital currencies and Libra are both in the spotlight, the real focus of much government unease seems to be around bitcoin and other decentralized, permissionless variations of digital money. Romney, like other lawmakers in the nation, is concerned with compliance and crime. While CBDCs would be easily monitored and centrally controlled, making things like money laundering and tax evasion challenging, permissionless crypto enables easier disobedience to established laws. Romney stated at the recent hearing “[I] wonder whether there should not be some kind of effort taken in our nation to deal with cryptocurrency.”

What are your thoughts on Romney and the FBI’s remarks? Let us know in the comments section below.


Image credits: Shutterstock, Aaron-Schwartz, fair use.


Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The Local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.

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Ridiculous Crypto Regulations Are an Enemy of Bitcoin

Par Jamie Redman

One of the biggest privacy issues in today’s society revolves around the use of overreaching know-your-customer (KYC) and anti-money laundering (AML) laws. Despite the fact that many cryptocurrencies were designed to avoid these invasive practices, KYC and AML guidelines bolstered by political parasites and their followers have perverted the original crypto-anarchist ideologies espoused by the cypherpunks.

Also Read: Bitcoin Cash Captured 90% of October’s Crypto Spending in Australia

KYC/AML Are the Real Cryptocurrency Scams

When people talk about scams in the cryptocurrency industry they usually look at a certain project or the initial coin offerings (ICO) that raised billions in 2017 and 2018. However, the biggest scam in the blockchain ecosystem is how some members of the community and bureaucrats have pushed their statist ideals into the crypto industry. KYC/AML practices have increased a great deal and influencers want politicians to bless and define digital currencies like BTC. The financial regulations known as know-your-customer and anti-money laundering laws require crypto-based businesses to verify the identity of their clientele and also make sure customers are paying taxes by flagging unusual behavior. Even though these practices are immoral, unethical and cause significant friction, bureaucrats and law enforcement use these methods to track and monitor every financial transaction they can observe.

Ridiculous Crypto Regulations Are an Enemy of Bitcoin

Probably the biggest qualm with KYC/AML regulations is how businesses and large corporations track and store data that hackers can exploit. Thousands of companies hoard vast amounts of important information about a person’s identity, residence, social security numbers, and credit information on centralized servers. These servers are breached by hackers and opportunists on a regular basis and because of severe leaks, people’s private information can be sold on the black market. Data stemming from the Risk Based Security researchers’ 2019 mid-year data breach report shows that 4.1 billion records were compromised in the first six months. Bitcoin and other cryptocurrencies were built to avoid invasive KYC/AML practices and if these regulations did not exist, collateral damage like massive breaches would be dramatically reduced. However, there are many services invading the crypto industry right now and rough-shodding KYC/AML standards into our everyday practices.

Politicians Have Ushered in Digital Currency Compliance Standards

On November 4, the New York Times reported on how “Little-known companies are amassing your data.” In the report, columnist Kashmir Hill got access to a secret consumer score which disclosed things like “all the messages I’d ever sent to hosts on Airbnb; years of Yelp delivery orders; a log of every time I’d opened the Coinbase app on my iPhone.” The 400 pages of data derived from a company named Sift and the data collected on the journalist’s everyday affairs are quite shocking.

“Sift knew, for example, that I’d used my iPhone to order chicken tikka masala, vegetable samosas, and garlic naan on a Saturday night in April three years ago,” Hill wrote. “It knew I used my Apple laptop to sign into Coinbase in January 2017 to change my password. Sift knew about a nightmare Thanksgiving I had in California’s wine country, as captured in my messages to the Airbnb host of a rental called ‘Cloud 9.’”

There are also accidents like crypto exchange Bitmex slipping up and doxxing nearly every customer’s registered email. The trading platform’s problems didn’t end there because, after the leak, hackers sold the leaked info via Telegram channels. The Bitmex Hack Group on Telegram welcomes visitors with a message that says “Thank you Arthur Hayes.” Data breaches have disrupted the crypto industry since the early days and KYC/AML info only makes it worse for end-users.

Ridiculous Crypto Regulations Are an Enemy of Bitcoin

‘Arise, You Have Nothing to Lose But Your Barbed Wire Fences’

When Bitcoin was first unleashed by Satoshi Nakamoto, the cypherpunks at the time cherished the fact that it could be used as a medium of exchange outside the existing regulatory frameworks. Cryptocurrencies were embraced by people holding strong anarchist and libertarian beliefs because the assets can mitigate government regulation and essentially remove any coercion and violence that stems from the state. In fact, many cypherpunks believe that digital currencies are a tool meant to bolster free markets and self-governance.

“Just as the technology of printing altered and reduced the power of medieval guilds and the social power structure, so too will cryptologic methods fundamentally alter the nature of corporations and of government interference in economic transactions,” the cypherpunk Timothy C. May wrote in 1988.

Ridiculous Crypto Regulations Are an Enemy of Bitcoin
Digital currency users can tighten their operations security (opsec) with tools like Tor, Tails, and Cashshuffle.

Nowadays, however, there are many cryptocurrency supporters begging for traditional institutions and governments to accept bitcoin. They are blatantly allowing corporate fascism and regulatory capture in order to spread the network effect, knowingly understanding the original cypherpunk values are fading. What these politicking parasites don’t want you to know is that you can still access digital currencies and move outside the traditional financial system.

Ridiculous Crypto Regulations Are an Enemy of Bitcoin
Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.

Cryptocurrency users can still transact with digital currencies in an extremely private manner by utilizing tools like Tor and VPNs. They can get to know and understand the privacy-centric operating system Tails and PGP email encryption. There are encrypted messaging applications like Signal, Viber, Dust, Threema, Wickr, and Cyphr. Decentralized trading platforms like local.Bitcoin.com, Localethereum.com, Bisq, Barterdex, Radarrelay, Kyberswap, and Uniswap. Other tools can be used like Openbazaar, Haven Privacy, and installing Whonix. Bitcoin cash (BCH) users can shuffle their UTXOs using the decentralized mixing platform Cashshuffle.

Ridiculous Crypto Regulations Are an Enemy of Bitcoin
Digital asset proponents can use encrypted messengers services, encrypted email, and decentralized marketplaces like Openbazaar.

The fact of the matter is that there are still plenty of people who hold the cypherpunk ideals of the past and hope to separate money from the state in the same manner the church was removed. There’s an abundance of tools that can keep people off the KYC/AML radar and these invasive acts can be avoided. There’s been a bunch of fraudulent digital currency projects over the last decade that prey on ignorant investors but the biggest scammers in the entire crypto industry are those who embrace the existing status quo and have helped usher the surveillance state (KYC/AML) into the cryptocurrency industry.

Want to learn more about Bitcoin? Check out our getting started page. Looking to hear more about freedom, liberty, voluntaryism, the Non-Aggression Principle (NAP), and more? Check out the links below.

What do you think about the relationship between cryptocurrencies and freedom? Let us know your thoughts on the subject in the comments section below.

Op-ed Disclaimer: This is an Op-ed article. The opinions expressed in this article are the author’s own. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the Op-ed article. Readers should do their own due diligence before taking any actions related to the content. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any information in this Op-ed article.


Image credits: Shutterstock, Pixabay, and Twitter.


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Congressional Hopeful Agatha Bacelar Talks Silk Road on the Bitcoin.com Podcast 

Par Kai Sedgwick
Congressional Hopeful Agatha Bacelar Talks Silk Road on the Bitcoin.com Podcast 

“It’s clear that the political establishment wants to hold back a future where economic freedom is afforded to all.” This excerpt from Congressional hopeful Agatha Bacelar’s campaign donation page echoes what many within the cryptosphere have been saying ever since Satoshi Nakamoto dropped the Bitcoin whitepaper in 2008 – and what many libertarians have been trumpeting for decades.

Also read: FBI Says Bitcoin Concern Is Getting ‘Bigger and Bigger’

Bacelar Lays the Smackdown

The fact that Bacelar, who has set her eyes on House Speaker Nancy Pelosi’s seat in the California Congress, seeks to raise $1 million in crypto is significant. Stanford-educated and an engineer by trade, the 27-year-old Brazilian-American understands blockchain technology like few politicos before her, having worked with digital governance platform Democracy Earth. This nonprofit seeks to change the political system by building open-source, censorship-proof democracies, and grew out of what Bacelar describes as a “trojan horse” political party in Argentina. Uniquely, the party used blockchain tech to field candidates who were not so much representatives of the people as, well, the people themselves.

Congressional Hopeful Agatha Bacelar Talks Silk Road on the Bitcoin.com Podcast

Bacelar was recently invited on to the Bitcoin.com podcast and, needless to say, the topic of cryptocurrency came up more than once. “I can see why it’s very scary to introduce cryptocurrency to central banks because it kicks them in the knees,” she said. “But I think for a healthier world we need more public banking, public financing of things rather than having the power consolidated through central banks.”

As for the day-to-day benefits of using cryptocurrency, they are self-evident: “Whenever I want to pay my rent it takes a week for my money to transfer to my landlord’s bank account. We could be having faster global currency that doesn’t take 10% for a middleman.”

New Hire to Head Digital Currency Research at the Fed

Audit the Fed

Many listeners would have been keen to hear the candidate’s thoughts on how distributed ledger technologies could be used to revamp the entire system. Host Matt Aaron beat his guest to the punch, suggesting that publicly auditing the Federal Reserve might be a good place to start. “Yeah, that would,” Bacelar concurred. “Doing more participatory budgeting, letting people have a greater say on how we use our tax dollars.”

“Right now, we lose information every time a transaction happens. Whereas, I would hope with cryptocurrencies, if you buy an iPhone, you would know whether this phone was made at a factory where three people committed suicide, or whether the resources were mined in a place that used human slavery or contributed to pollution in that bio-region.

“You know, those things are not reflected in the cost of things today, but I think in a future world they could be. And that could lead us to a more regenerative, sustainable economy.”

Not Your Average Congressional Candidate

The backstory of Agatha Bacelar is a little different to most would-be politicians – just 3% of House Representatives currently come from a STEM background, for starters. As well as her experience with blockchain, she’s worked for social change organization Emerson Collective and Hope Credit Union, a banking institution that provides financial services to low-income applicants. Bacelar’s father is Herb Stephens, a software entrepreneur who, having worked in the nonprofit sector for a number of years, now acts as her Finance Director.

Trump rode to the White House on a hubristic ticket, with an oft-repeated boast that – unlike the other candidates – he “knew money.” Perhaps Bacelar could also profit from knowing the future of money – cryptocurrency – and having an awareness about how the underlying technology could inform the body politic. “I would like to be a member of Congress that makes decisions informed by how people would vote on an open-source digital platform in real time,” she says, “because right now there isn’t accountability in our politics. There isn’t transparency, and people are writing off politics and or feeling so frustrated with it. But I think people can represent themselves or proxy their vote to people they trust and know in their community.”

The Injustice of the Silk Road Trial

At one stage in the discussion, Bacelar segues from addressing the absurdity of criminalizing drugs like marijuana to discussing Silk Road. “Ross Ulbricht is incarcerated right now for two life sentences plus 30 years for nonviolent crime, where he didn’t even do any of the drug transactions on there.”

As an enthusiastic pro-crypto voice, Agatha Bacelar is a breath of fresh air. Whether she has a realistic chance of turfing out Pelosi remains to be seen. Whatever the outcome, you get the sense that Bacelar recognizes the ability of cryptocurrencies – and blockchain technology more generally – to fundamentally reshape society. For public ledgers to introduce greater accountability in corporations and government agencies. For sound access to finance to be available to all. For profit-offshoring, money laundering and tax evasion to be effectively addressed.

The final word goes to Bacelar: “We need to decentralize power and get people to participate in our democracy. A democracy is strongest when most people engage in it.”

What are your thoughts on Agatha Bacelar’s take on Silk Road and the benefits of bitcoin? Let us know in the comments section below.


Images courtesy of Shutterstock.


Did you know you can verify any unconfirmed Bitcoin transaction with our Bitcoin Block Explorer tool? Simply complete a Bitcoin address search to view it on the blockchain. Plus, visit our Bitcoin Charts to see what’s happening in the industry.

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Crypto-Friendly Silvergate Bank IPO Debuts on NYSE

Par Kevin Helms
Crypto-Friendly Silvergate Bank IPO Debuts on NYSE

The U.S. Securities and Exchange Commission (SEC) has declared the IPO of pro-crypto Silvergate Bank effective. Its shares started trading on the New York Stock Exchange on Thursday. The crypto-friendly bank works with 756 customers in the crypto space, including Coinbase, Gemini, Circle, Bitstamp, Kraken, and Bittrex. The bank has attributed significant growth to its crypto business.

Also read: 23 Central Banks Divulge Their Digital Currency Requirements

Silvergate Bank’s IPO

The U.S. SEC declared the initial public offering (IPO) of crypto-friendly Silvergate Bank effective on Wednesday. Its common stock subsequently began trading on the NYSE on Thursday under the symbol SI. The shares opened at $12.75, a 6.25% increase from its IPO price of $12, and closed at $12.62.

Crypto-Friendly Silvergate Bank IPO Debuts on NYSE
The NYSE Opening Bell on Nov. 7.

Opened in 1988, Silvergate Bank is a commercial bank with a focus on “creating the banking platform for innovators, especially in the digital currency industry, and developing product and service solutions addressing the needs of entrepreneurs,” the bank’s SEC filing describes, elaborating:

We intend to continue focusing on our digital currency initiative as the core of our future strategy and direction.

As of the end of September, the bank had total assets of $2.1 billion, total deposits of $1.8 billion, and total stockholders’ equity of $230.6 million.

Go-To Bank for Crypto Industry

Silvergate Bank began focusing on providing services to the crypto industry in 2013. Over the years, it has become a go-to bank for the industry. “We believe our first-mover advantage serving the digital currency industry has led to numerous strategic advantages, many of which are significant barriers to entry for potential competitors,” the bank explained.

According to its registration statement, the bank has 756 customers in the crypto industry as of the end of September. Among its customers, 69 are exchanges, 468 are institutional investors and the rest are other crypto companies such as mining operators and protocol developers. Its clients include Coinbase, Genesis, Bitstamp, Gemini, Sofi, Circle, Kraken, Bittrex, and Paxos.

Crypto-Friendly Silvergate Bank IPO Debuts on NYSE

The bank also revealed that approximately 77% of its eligible cryptocurrency-related customers are enrolled in the Silvergate Exchange Network (SEN), its proprietary payment network for the crypto industry. The system was developed and tested in 2017 and made available to all of the bank’s crypto customers in early 2018. “The core function of the SEN is to allow participants to make transfers of U.S. dollars from their SEN account at the bank to the bank account of another SEN participant with which a counterparty relationship has been established, and to view funds transfers received from their SEN counterparties,” the bank detailed, adding:

Because of our focus on the digital currency industry in recent years and the unique value-add solutions and services we provide, we have achieved improvements in our deposit base and significant growth in key operating metrics.

What do you think of crypto-friendly banks like Silvergate Bank? Let us know in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or as a recommendation, endorsement, or sponsorship of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.


Images courtesy of Shutterstock and Silvergate Bank.


Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.

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Activist Larken Rose Weighs In on Bitcoin, Anarchy, and the Importance of Permissionless Cash

Par Graham Smith
Activist Larken Rose Weighs in on Bitcoin, Anarchy, and the Importance of Permissionless Cash

Though his latest project with partner and fellow activist Amanda Rose, Candles in the Dark, is a program helping people escape authoritarian programming through non-confrontational dialogue, there’s nothing meek and mild about Larken Rose’s stance when it comes to government. News.Bitcoin.com recently connected with the outspoken anarchist via Skype to talk about Bitcoin, the IRS, and the importance of permissionless money.

Also Read: Bitcoin and Voluntaryism – Where Libertarian Philosophy Meets Crypto

Bumping Into Crypto

News.Bitcoin.com (BC): How did you get into the crypto space?

Larken Rose (LR): I only accidentally crashed sideways into crypto stuff just because so many people who are into freedom and self-ownership got into it when it came along, realizing it could be a really useful tool to resist centralized control. I’m by no means any sort of expert on it. I was just sort of dragged along for the ride, because at this point it’s kind of hard to not be hearing about it and involved with it if you’re into freedom, because it’s such a useful tool for that.

BC: Do you remember when that was?

LR: It was a number of years ago, and I remember I heard the term a bunch of times before I had the foggiest idea what it meant, and what it referred to. It may have been at Porcfest in New Hampshire, where some of the guys promoting it early on actually gave me some of the physical Bitcoins, back when they were worth like a dollar each, and I think they gave me 20 of them.

And, I sold them at a sadly low rate, well before it went up. I accidentally held onto one of them, without knowing I still had it, but I eventually gave that one to my daughter and she ended up getting a car out of it, so I’m happy about that. But it was a number of years later before I really understood the beauty and the power of the concept of blockchain and decentralized, uncontrollable mediums of exchange.

Activist Larken Rose Weighs In on Bitcoin, Anarchy, and the Importance of Permissionless Cash

Bitcoin and Voluntaryism

BC: You’re a voluntaryist. More people are learning what that word means lately, but most still don’t know. What’s it all about?

LR: In short, to be a voluntaryist means you advocate that all human interaction be voluntary, rather than by way of violence and coercion. And when you describe it that way, almost everybody initially reacts by saying, ‘Oh yeah, that’s me; I totally agree; that’s what I want too.’

But they don’t recognize that, even if they live that way in their daily lives — when it comes to politics, almost everybody has been taught that there’s an exception for the people who call themselves ‘government,’ and that it’s okay if they threaten violence and rob you by threats of force and boss you around and control you. A voluntaryist is basically somebody who realizes that the whole ‘live and let live’ and ‘do unto others as you would have done unto you,’ there’s not an exception for government.

BC: You’ve touched on this a little already, but where do you see crypto and voluntaryism intersecting?

LR: To me there are two very important pieces that have to go together to actually get a large number of people being able to be free, and eventually society being free. One is the mentality, and that’s what my main focus is on: having people stop believing that they’re obligated to obey a ruling class. But after that, then you need the tools necessary to be ungovernable. And some of those tools are, for example, guns. If you’re gonna resist oppression, if they have guns, it’s convenient if you do too.

But when it comes to currency and all the frauds and the tricks that governments have done by way of fiat currency and central banks and all that garbage, crypto is just a very powerful tool for those who are mentally ready to escape the controls of a ruling class, to be able to trade and basically have a complex international economy that doesn’t have the tentacles of the ruling class in it anywhere. And that’s huge.

BC: What would your response be to those people who say, ‘Yeah, these rules suck, the government’s terrible, but without it, it would be chaos’?

LR: People have been trained by the ruling class to imagine that, without the ruling class, we’d be these stupid, violent animals. And it’s already the case that the average person, all the things in his life that work, aren’t because he personally figured them out. The average person who buys a car doesn’t know how to build a car. The average person who goes grocery shopping doesn’t know how to grow all that food, and they don’t need to.

The order and the complexity and the cooperation and the productivity already comes from voluntary interaction. But it’s easy for politicians to scare most people into thinking, ‘Well if nobody’s in charge, if there isn’t a government bossing everyone around, then it will be this chaotic free-for-all.’ There’s no reason to actually believe that.

If you go to a supermarket—it’s one of my favorite examples of anarchy in action—yeah, it has government tentacles in there getting in the way and robbing people, but nobody’s forced to be involved, and you get an amazing level of complexity and organization and cooperation, and nobody’s being forced to do anything—not the people who work there and not the customers who go and buy stuff there.

Activist Larken Rose Weighs In on Bitcoin, Anarchy, and the Importance of Permissionless Cash

IRS, Anarchy and Activism

BC: Speaking of governments and money, you had a run-in—well, a run-in is kind of a mild way to put it—but you had some trouble with the IRS. Could you tell us just a little bit about that, and what happened there?”

LR: My adventures with the federal extortion racket are something I don’t usually talk very much about these days, because it takes so much time and effort for people to actually get into it and to learn it. If anybody wants the full story for free, I now give away my book, Kicking the Dragon (Confessions of a Tax Heretic), for free as an e-book.

BC: Could you tell us about your activism? I know Candles in the Dark is going online on Thanksgiving, and you’re speaking at Anarchapulco again this year.

LR: Yep. Well I have a number of books, The Most Dangerous Superstition being the main one, and I’ve given a bunch of talks and I still do here and there. I don’t like to preach to the choir, so usually when I give talks it’s with the intention of it being recorded and ending up on YouTube or something, to talk to the rest of the world. I also just started doing my daily podcast again. But the two main things I’m working on now—one is the Candles in the Dark seminar, and the full online version will be up and running by Thanksgiving and we’re already taking pre-orders now.

Activist Larken Rose Weighs In on Bitcoin, Anarchy, and the Importance of Permissionless Cash

What that does, for people who are already voluntaryists, is teach them a drastically more effective method of communicating with the rest of the world, that doesn’t just result in the usual stress and emotions and arguments and frustration, that normal debates almost always end in. It’s not at all what I do in public. When I publicly debate I’m blunt and totally in people’s faces, and that’s for a totally different purpose.

And then the other major—the biggest project I’m working on; probably the biggest project I will do in my whole life—is called The Mirror, which is basically an interactive program that does the whole process for us. So voluntaryists don’t even need to know how to do it; The Mirror will do it for them, all by itself.

BC: So just strap on the VR goggles and set them free from statism.

LR: Pretty much, because it does the conversation by itself. It asks them what they believe about things and their answers determine where it goes next. And that’s a monstrous project which is still many months away from being completed. But ultimately that will make it so we don’t even have to be good at communication, because it will do it for us. So hopefully I won’t get suicided before that’s done.

Activist Larken Rose Weighs In on Bitcoin, Anarchy, and the Importance of Permissionless Cash

The Future of Crypto Freedom

BC: It seems like there’s a split in the cryptocurrency community at large, where you’ve got the more libertarian-minded crowd that’s saying, ‘We’ve got to use this privately, between ourselves, as peer-to-peer permissionless cash,’ and you’ve got this other group saying, ‘Well, it’s gotta be regulated, and we’ve gotta get the government in on this thing.’

LR: I want the government involved in absolutely nothing. It shouldn’t freaking exist. I’m kind of on that side of the spectrum.

BC: Yeah, I kind of figured.

LR: But what I love about the concept of blockchain and the concept of cryptocurrencies is that the ruling class can try with varying degrees of success to try to stick its nose into different kinds of trading and different cryptos, and it can try to regulate this and that and the other thing, but the thing it can’t ever do away with is the idea.

Now that the ideas of blockchain and cryptocurrencies are out there, there is nothing that will keep it down forever. It’s not like there’s some centralized place where, if they go and shut down that thing, it’s gone forever. Even if there was some magic button that would make Bitcoin disappear—and it doesn’t work that way—another one would appear. And then a hundred more would appear. The ideas are, to me, what is most powerful. It’s the evolution of ideas and technology and understanding that can’t be undone, and that can’t be regulated out of existence. That doesn’t mean they won’t try it, but in the long run they are doomed; they have no chance of squelching this permanently.

What do you think about Rose’s ideas on crypto freedom? Let us know in the comments section below.


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Crypto Tax Guidelines Leave More Questions Than Answers

Par Kai Sedgwick
Crypto Tax Guidelines Leave More Questions Than Answers

Cryptocurrency holders have long wrestled with their tax obligations. These fiduciary duties have been complicated by tax agencies, which are several steps behind technology and now playing crypto catch-up. Updated guidelines from the U.S. and U.K.’s tax agencies were finally released this year, but the initial relief felt by conscientious bitcoiners was to prove short-lived, for on closer examination, the documentation has left many crypto questions unanswered.

Also read: Crypto-Friendly Silvergate Bank IPO Debuts on NYSE

It’s 2019 and Tax Is Still Taxing

The lack of uniformity regarding tax on crypto earnings, with some national governments happy to kick the can down the road and others determined to immediately collect their pound of flesh is frustrating, to put it mildly. The latest guidelines from Her Majesty’s Revenue and Customs (HMRC) for U.K. residents has succeeded in muddying the already-feculent waters.

Once again, a tax authority’s attempt to provide clarity on crypto taxation has become, instead, a wellspring of uncertain questions. It was the same when the IRS published crypto tax guidance in 2014, and again in October of this year. So, why are such powerful arms of the state unable to lay down clearly-defined tax principles on virtual currency? Is it because the powers-that-be do not fully comprehend this rapidly-evolving environment or its underlying technology? Or is it the case that the nature of forks, airdrops and token sales is incompatible with hard-and-fast taxation rules?

Robin Singh is the founder of crypto tax platform Koinly. “Part of the problem,” he explains, “is that regulators do not understand cryptocurrencies. In the latest IRS guidelines, for example, the IRS refers to forked coins as “airdrops after a fork”. They are oblivious to the fact that there is no actual airdrop – the ledger is simply copied. This misinterpretation has given rise to the issue investors now face: paying income tax on forked coins they may have no intentions of using.”

Exchange Tokens ‘Aren’t Currency’

HMRC’s recent update to its guidance on crypto taxes, published on November 1, dealt with crypto transactions carried out by companies, businesses such as partnerships and sole traders, and individuals. In essence, it sought to end confusion about the extent to which cryptocurrency transactions occasion capital gains tax, national insurance contributions, corporation tax, VAT, and income tax.

The main plank of HMRC’s argument is that, generally speaking, “exchange tokens” are not currencies, stock or marketable securities – meaning they are exempt from stamp taxes. Nevertheless, tokens used in debt transactions do incur stamp taxes.

Bitcoin is explicitly mentioned in the policy paper as an example of an exchange token, with security and utility tokens to be dealt with in a future update. Despite the policy paper being entitled “Tax on cryptoassets,” therefore, it is far from comprehensive. And, to quote an instructive line, “The tax policy may evolve as the sector develops.”

Crypto Tax Obligations for Individuals

As it has previously, HMRC was keen to point out that “the tax treatment of all types of tokens is dependent on the nature and use of the token and not the definition of the token.” In other words, it’s up to you whether you incur any tax at all.

If you sell exchange tokens that have appreciated in value, they will – as investments – be liable to capital gains tax; income tax and national insurance contributions are also due on crypto assets received from employers as a form of non-cash payment and from mining operations or airdrops.

In instances where individuals essentially act as a business by frequently transacting financial trades involving crypto assets, their taxable trading profits are subject to income tax rather than capital gains tax. Of course, you can reduce your tax liability by offsetting losses against future profits; the cost of the asset itself can be a deduction.

A Thankless Task for Tax Agencies

Because assets such as bitcoin are traded on exchanges which do not use pounds sterling, HMRC’s guidance notes that the value of any gain or loss must be converted to sterling on an individual’s self assessment tax return. The guidance points out that individuals must keep separate records of each crypto asset transaction including type of asset; date of transaction; if they were bought or sold; number of units and value of transaction in sterling; cumulative total of the investment units held; and bank statements and wallet addresses.

Of course, it is easy to pick holes in the guidance. The tax body says that reasonable care should be taken to make “appropriate valuations” for transactions using a consistent methodology. However, it fails to elaborate on what would be appropriate, and which methodology would be permissible. The HMRC also betrays its own ignorance when discussing matters of fraud in the cryptosphere, noting that theft is not considered disposal “as the individual still owns the assets and has a right to recover them.” They may have a right to recover them, but they probably have no prospect of doing so. Victims of theft cannot claim a loss in capital gains tax either.

Crypto Tax Obligations for Businesses

HMRC’s guidance for businesses is, as you might expect, even more complex and confusing than for individuals. Crypto mining companies are subject to tax based on factors including degree and frequency of activity, level of organization, risk and commerciality. But most business activities in the cryptosphere are subject to some form of tax, whether the activity is buying and selling tokens, exchanging tokens for other assets (including other forms of cryptocurrency) and supplying goods and services in return for tokens, the latter of which entails VAT on the “pound sterling value of the exchange tokens at the point the transaction takes place.”

Confusion stems from qualifiers such as “the type of tax will depend on who is involved in the business,” although the process by which accounts should be prepared is, at least, unambiguous: they should follow generally accepted accounting practice (GAAP) or, if relevant, international accounting standards (IAS).

If a business’s activities constitute a trade, receipts and expenses form part of the calculation of the resulting profit. If a partnership conducts the trade, partners will be taxed on their share of the trading profit. And if the activity concerning the exchange token is not deemed “trading activity,” the gain obtained from eventually disposing of a crypto asset will be charged to corporation tax.

Where Do We Go From Here?

The fact that the status of security and utility tokens remains unaddressed indicates that HMRC is continuing to wrestle with fundamental questions about tax on crypto. While these latest directives do answer some long-held queries pertaining to “exchange tokens,” they also throw up others. Is HMRC open to eventually changing their stance that cryptocurrency is not money, for instance? This one will be asked ad infinitum, particularly as merchant adoption increases. For bitcoiners in the U.K., U.S., and other leading crypto countries, divining the intent of the tax agencies has become a dark art.

Do you think tax agencies are at fault for complicating crypto tax guidance, or are they just struggling to keep pace with a rapidly evolving industry? Let us know in the comments section below.


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Did you know you can verify any unconfirmed Bitcoin transaction with our Bitcoin Block Explorer tool? Simply complete a Bitcoin address search to view it on the blockchain. Plus, visit our Bitcoin Charts to see what’s happening in the industry.

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Holders of the Digital Yuan Will Not Be Paid Interest

Par Lubomir Tassev
Holders of the Digital Yuan Will Not Be Paid Interest

China has been sending mixed signals about its preparedness to issue a national crypto. Despite the new blockchain push, there is still no timeframe for the anticipated launch of the digital yuan and few details have been revealed so far. However, a senior official from China’s central bank pulled the curtain back slightly this week.

Also read: Turkey Becomes the Latest Nation to Work on Digital Fiat

China’s Semi-Blockchain Based Currency to Start a ‘Horse Race’

Beijing’s Digital Currency Electronic Payment (DCEP) project, which will be similar to Facebook’s Libra as Chinese officials have previously indicated, will only partially employ blockchain technology as it would need a higher transaction capacity to achieve retail adoption. The People’s bank of China (PBOC) will use a two-tier approach with its implementation, first issuing the currency to commercial banks, which will then distribute it to the public.

Mu Changchun, head of the central bank’s digital currency research institute, told a forum in Hong Kong that the launch will start a “horse race” among banks and other financial institutions competing to offer better and more efficient services with the digital yuan. “The front runner will take the whole market,” Mu predicted. Quoted by Reuters, he added that if an institution takes the lead, the technology it uses will be adopted by others.

Holders of the Digital Yuan Will Not Be Paid Interest
People’s Bank of China

The PBOC representative pointed out that as the new digital currency is designed to substitute coins and paper banknotes in circulation, holders of the currency will not receive any interest payments. That means the DCEP system will not affect inflation in the People’s Republic and the monetary policy of its government. At the same time, the project will allow Chinese regulators more oversight over money flows in comparison with the traditional financial system.

The opportunity to exert greater control over financial transactions, including cross border transfers, is one of the main drivers behind the digital yuan project. Beijing’s view, reiterated by Mu Changchun’s statement, is that currencies such as Libra would present a threat to the country’s currency sovereignty and could facilitate illegal flows. The central bank official stressed that other stablecoins would have to abide by China’s existing foreign exchange regulations.

Beijing Aiming to Have the First CBDC

Protecting China’s monetary sovereignty is a motive Mu Changchun emphasized a couple of months ago. During a lecture in September, he remarked that the problem with currencies issued by platforms such as Wechat and Alipay is that a bankruptcy is always a possibility with corporate entities and one could cause users to lose money. He assured that the digital currency minted by the People’s Bank would be just as safe as paper money and revealed that the digital yuan will even function offline.

Holders of the Digital Yuan Will Not Be Paid Interest

A month earlier, the senior official stated that the state-sponsored coin was ready after five years of research and development and that the PBOC will soon roll out the crypto. However, PBOC governor Yi Gang said later that the bank had no timetable for the launch. Nevertheless, China has been gearing up to become the first nation with a central bank issued digital currency (CBDC) and it has to hurry up as according to a report by the Bank of International Settlements (BIS), 70% of 63 surveyed central banks are exploring the issue of CBDC.

There has been much talk and pressure recently in the U.S. and the EU to speed up research and development in the same direction. The BIS study published in the beginning of this year concluded that five projects had advanced to the pilot phase. Some banks have since gone further in the development of their systems and it turns out China might not be the first to deploy a digital fiat currency.

According to a report by Izvestia, the central bank of Tunisia has already issued a CBDC based on a Russian blockchain platform called Universa and even made test transactions on Nov. 7. The digital dinar can be used in online mobile payments and Tunisia hopes to implement it in international settlements in the future. By introducing the cryptocurrency, the country’s central bank hopes to save on printing costs for paper notes.

When do you expect the People’s Bank of China to issue its digital yuan? Share your thoughts on CBDCs in the comments section below.


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How Crypto Winters of Bitcoin’s Past Compare to Today

Par Jamie Redman

Cryptocurrency and bitcoin proponents have been patiently waiting to see if crypto winter is returning as the recent price decline has shaken investors. Digital assets have been meandering aimlessly over the last week and in order to gain some perspective, it’s always good to study the last decade of previous bear market trends.

Also read: China Removes Bitcoin Mining From Unwanted Industries List

Crypto Prices Slide Again, Making Traders Question Whether Crypto Winter Is Really Over

After BTC and other digital currencies touched all-time highs in 2017, the following months ushered in ‘crypto winter.’ It was a cold period of time where crypto investors watched their favorite cryptocurrencies lose 70-95% in value. Since then, prices have headed northbound and many people started to assume that the bearish crypto winter may be coming to an end. However, after BTC jumped from the $3k range to almost $14k in the spring, the digital currency has dropped to the $7k zone and is now hovering between $8,800-9,150. Overall, most traders would consider the overall upswing bullish as BTC was $6,350 on November 8 last year and today the price is $8,942 per coin. But many crypto winters in the past and bearish cycles have seen slight upswings before plummeting back down and continuing an even longer bear market trend. The recent decline in crypto values has caused some digital currency investors to panic and current prices have made them wonder if more trouble lies ahead.

How Crypto Winters of Bitcoin's Past Compare to Today
At the moment, cryptocurrency prices seem bearish.

The first long bear market that BTC fans witnessed was between June to November in 2011 that spanned roughly 162 days. The digital currency’s value had spiked in the summer of 2011 to a high of $31.50, but subsequently dropped over the course of the next few months to a low of $2.01 per BTC, losing 93%. At this time, things started looking positive for BTC investors similar to the run-up in 2019. BTC was hovering around $7.08 per coin on January 11, 2012, gaining more than 250%. But thanks to all the exchange hacks in 2012 like Linode and Bitcoinica and the regulatory issues with the platform Trade Hill, BTC’s price dipped into a bear market trend for roughly 185 days, losing 40%. In July 2012 the price per BTC was $4.22, but again traders started seeing bullish trends transpire and the value jumped 216% to a high of $13.35 per coin in August.

How Crypto Winters of Bitcoin's Past Compare to Today

Just like the current 2019 bear raid, crypto traders saw BTC prices slide 37% to a low of $8.40 during the first week of December 2012. The duration of the rout lasted 111 days and was allegedly initiated by the second Bitcoinica hacks and the lawsuits surrounding the events. However, the following January to November 29, 2013 saw BTC values jump considerably again touching a peak price of $1,166. The first recorded price on Coinmarketcap.com’s historical price index shows BTC was $135 in April 2013. However, the party ended in December 2013 and the onset of the first extremely long crypto winter started eating away at the bullish prices. The bear market stretched for 410 days encompassing 2014 in its entirety. Moreover, other digital currencies that saw higher prices also followed BTC’s dive as most cryptos that year lost more than 80%. After the $1,166 high, BTC dropped to a low of $197 per coin during the first week of January 2015. From that period in time, anyone could have purchased BTC at prices between $197 to $300 up until October 28, 2015.

How Crypto Winters of Bitcoin's Past Compare to Today
The 2013-2015 BTC bear market compared to the 2017-2019 BTC bear market.

BTC prices starting from Halloween to mid-June 2016 were between $300 to $600 and the coin started inching its way closer to the 2013 all-time high (ATH) in January 2017. After that price surpassed the 2013 ATH, BTC and many other cryptocurrencies saw a climactic run up from that point forward. On the exchange Bitstamp, BTC touched its highest position ever at roughly $19,650 per coin. The bear market that followed lasted much longer than the 2013-2015 downtrend of 410 days. Coincidently, using that same timeframe from December 2017 to the first week of February 2019 saw BTC prices reduced to $3,484 per coin that week. The bear market stretch continued, making the crypto winter following 2017 the longest ever. Between February through May 2019, prices hovered around $3,500 to $6,000 and the run-up since then looks like a second breath of fresh air.

How Crypto Winters of Bitcoin's Past Compare to Today
Bitcoin core (BTC) prices over the course of five years.

The latest downtrend has dampened enthusiasm throughout the crypto community after BTC values were hovering around $10k, but are now below the $9k region as prices sink lower. The last few months have seen digital currencies traverse upwards in a bullish manner, but prices could easily follow the same dynamics that transpired years ago. The bear markets in the past did see some positive optimism after BTC’s value plummeted, however, some of the run-ups didn’t last very long. Digital currencies had a much better year in 2019 but as the end of the year approaches, people are still uncertain about how crypto markets will trend over the next month and a half into 2020.

Where do you see cryptocurrency and bitcoin markets heading from here? Let us know what you think about this subject in the comments section below.

Disclaimer: Price articles and market updates are intended for informational purposes only and should not be considered as trading advice. Neither Bitcoin.com nor the author is responsible for any losses or gains, as the ultimate decision to conduct a trade is made by the reader. Always remember that only those in possession of the private keys are in control of the “money.”


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Crypto-Based Commerce Spikes 65% in 7 Months

Par Lubomir Tassev
Crypto-Based Commerce Spikes 65% in 7 Months, Blockchain Analysis Shows

Commerce fueled by cryptocurrencies has once again started to grow. Data collected by blockchain forensics company Chainalysis shows a significant increase of volume in the first half of the year. The positive change coincided with the remarkable market recovery that followed last year’s prolonged crypto winter.

Also read: Turkey Becomes the Latest Nation to Work on Digital Fiat

$5.5 Million of Crypto Used in Commerce Daily

After a string of depressing months in 2018, cryptocurrency-based commerce began to rise again in 2019, the study quoted by Bloomberg indicates. According to New York-headquartered Chainalysis, the amount of cryptocurrency sent to 16 merchant service providers such as Bitpay increased by 65% between January and July. During the same period, the price of bitcoin core (BTC) tripled to over $12,000.

Crypto-Based Commerce Spikes 65% in 7 Months

This year’s positive trend contrasts with the findings from last year, when Chainalysis registered a decline in bitcoin-related trade. The company’s 2019 research covers not only commerce based on BTC but also payments in bitcoin cash (BCH), litecoin (LTC) and the stablecoin tether (USDT). These cryptocurrencies, the report notes, are used to fund everything from online gambling to purchases at pot shops.

According to Kim Grauer, senior economist at Chainalysis, the increase in bitcoin-denominated trade suggests that there is more trust in crypto now. The overall amount of cryptocurrency used in commerce remains small, the publication acknowledges, but yet it grew from around $3 million daily in January to $5.5 million per day on average in July.

The volume is likely to expand further as platforms like Bitpay, which allows merchants to accept payments in BCH and BTC, introduce support for more digital coins in the future. The company, which processes over $1 billion in transactions annually, expects continued growth as new currencies are added including ether (ETH) and ripple (XRP), spokesperson Jan Jahosky told Bloomberg.

Slow Transactions Are a Major Hurdle to Adoption

Various cryptocurrencies differ in many ways and the authors point out that inconvenience related to certain specifics has been a major barrier to the growth of crypto payments. For example, transaction confirmation on the BTC network can take up to an hour, making it hard for people to just walk in a store, buy a cup of coffee and leave, the article notes.

Crypto-Based Commerce Spikes 65% in 7 Months

The characteristic volatility of most digital assets is also a negative factor and many businesses and consumers are still reluctant to deal in crypto for that reason. At the same time, the researchers have found a five-fold increase in the use of tether during the examined period. According to Chainalysis, the stablecoin whose price is pegged to the U.S. dollar accounted for 9% of all commerce during the seven months covered in the study.

In reality, a growing number of merchants accept direct cryptocurrency payments. For instance, the Bitcoin Cash Map application now lists 1,769 locations of brick and mortar stores that let you pay with BCH. And according to a recent report by marketing analysis company Semrush, quoted by La Stampa daily, cryptocurrency is the third-most popular online payment method in Italy. Bitcoin is behind only Paypal and Postepay, while it is more widespread in Italian ecommerce than direct payments with any of the major credit cards.

What do you consider to be the main obstacle for faster growth of crypto payments? Share your opinion on the subject in the comments section below.


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QE Infinity: 37 Central Banks Participate in Stimulus and Easing Practices

Par Jamie Redman

Since the last week of October, a great number of central banks have been slashing interest rates, joining the massive synchronization of monetary easing worldwide. This year more than two dozen banks have used easing tactics and in the last two weeks alone central banks from Costa Rica, Hong Kong, Saudi Arabia, United Arab Emirates, Bahrain, Kuwait, Brazil, Indonesia, and Georgia have joined the rate slashing party.

Also Read: Money and Democracy: Why You Never Get to Vote on the Most Important Part of Society

The World’s Central Banks Join Hands to Invoke the Longest Easing Cycle in a Decade

Massive monetary easing continues worldwide but yet central banks are still in panic mode. A colossal amount of synchronization and the longest easing cycle in a decade is upon us as central banks everywhere are attempting to fix the global economy. At the time of writing, 37 developed central banks are participating in some form of stimulus. Whether it’s slashing interest rates, participating in overnight repos, or printing massive amounts of fiat, all the central banks are in on the game. Some of the big players like the U.S. Federal Reserve want the mainstream media to lie and say that what’s happening is not really another form of quantitative easing (QE). However, what central banks are doing right now is expanding monetary easing policies and taking part in large-scale open market operations. The most accurate definition of these processes would be calling the current schemes QE but central banks are not being honest.

When news.Bitcoin.com started reporting on the large number of developed central banks involved in easing tactics there were roughly 19 of them. Then the number was raised a few weeks later to nearly two dozen central banks bolstering different forms of stimulus. Now there are 37 central banks worldwide increasing the global money supply and a slew of them have joined the easing club in the last two weeks. For example, on October 30, the Costa Rican central bank cut key policy rates to 3.35% and cited a lack of economic growth. The same week Saudi Arabia, United Arab Emirates, Bahrain, and Kuwait cut benchmark interest rates as well. The Hong Kong Monetary Authority (HKMA) also reduced its base rate on overnight windows by 25 basis points on October 30. The same day the U.S. Federal Reserve cut rates again for the third time this year.

In what seemed like a rate cut party, Brazil joined the Fed and slashed benchmark interest rates to 5%. Brazil also said inflationary problems might invoke them to continue further easing mechanisms in the near future. Roughly seven days prior, both Chile and Georgia changed interest rates on October 23. Chile reduced rates from 2% to 1.75% while Georgia’s central bank raised refinancing rates to 8.5% from 7.5%. Georgian central planners messed with the rates the month prior twice because of rising annual inflation percentages. Further, even though the People’s Bank of China (PBoC) cut the one-year loan prime rate (LPR) by five basis points on September 20, the economy in China still looks bleak.

China Sees Bank Runs, Skipped Bond Redemption, and Restructuring

For instance, many smaller financial institutions in China are struggling and there have been at least two recent runs on rural lenders. Rumors stemming from social media that a few small banks might fail sparked the bank runs. Then for some unknown reason, Guangdong Nanyue Bank skipped its local tier-two bond redemption. There are more than 3,000 small banks in China that are contending with a lack of liquidity and bad loans. Many spectators believe the Chinese government will resort to “mergers and restructuring.” Inner Mongolia-based Baoshang Bank Co. was already taken over by the communist government because of faulty practices and credit risks.

There’s a lot of interesting happenings within the global economy right now and on top of the central planners trying to band-aid the situation, there are uprisings everywhere. Massive protests have been taking place in Argentina, Venezuela, Indonesia, Netherlands, France, India, Russia, Hong Kong, Chile, Lebanon, Peru, Haiti, Egypt, Syria, and many more countries across the globe. The demonstrations and people taking to the streets stem from the wealth disparity plaguing global citizens. A place where the bureaucrats and the banking cartel eat bread and drink wine while the peasants are left with crumbs.

What do you think about the cascade of central banks unveiling rate cuts and monetary easing methods? Do you think the central banks know what they are doing when it comes to monetary policy? Let us know what you think about this subject in the comments section below.


Image credits: Shutterstock, Fair Use, Pixabay, Wiki Commons.


Do you need a reliable bitcoin mobile wallet to send, receive, and store your coins? Download one for free from us and then head to our Purchase Bitcoin page where you can quickly buy bitcoin with a credit card.

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For Initial Exchange Offerings, Liquidity is King

Par Kai Sedgwick
For Initial Exchange Offerings, Liquidity is King

There are many benchmarks for measuring IEO success. Token price, community size, code shipped, and milestones met are all yardsticks for gauging the progress of a tokenized project. For projects seeking to create the biggest possible splash, however, liquidity is the crucial factor. The more exchanges an IEO reaches, the greater its prospects of survival.

Also read: How Crypto Winters of Bitcoin’s Past Compare to Today

Multiple Exchanges Multiply Projects’ Prospects

Initial exchange offerings are big business: according to Inwara, IEO projects raised a cool $1.625 billion in the first half of 2019. H2 has continued that trend, with the leading exchange launchpads maintaining their aggressive IEO schedule – one a month in the case of Binance; 24/7 in the case of smaller platforms such as Latoken. Investor demand for initial exchange offerings also remains robust: the leading crypto Telegram channels, maintained by the likes of Coinidol, attest to this, as investors clamor to catch wind of pre-sale and seed rounds for projects that will eventually IEO on Binance or Huobi.

While the initial exchange offering brings benefits to investors and project teams, compared to the ICO, it is hamstrung by a flaw that is inherent to this fundraising model: often, there is little incentive for other exchanges to list the token. As a result, most IEOs will live and die on the exchange that hosted their token sale. For the handful of IEOs that have thrived post-sale, both in terms of token price and other benchmarks, it’s no coincidence that they’ve transcended their issuing platform, and gained deep liquidity in the process.

For Initial Exchange Offerings, Liquidity is King

Bittorrent Remains the Liquid Leader

The most liquid token IEO to date, based on the number of exchanges where it’s listed, is also one of the earliest: Bittorrent (BTT), which launched on Binance last year. Today it appears on 34 exchanges – 24 more than the next most-listed tokens. It’s no coincidence that tokens listed on the most exchanges – namely BTT (34), MATIC (10) and SERO (10) – outperform all others as far as ROI and ATH ROI are concerned. The correlation between number of exchanges and project performance is inarguable.

For Initial Exchange Offerings, Liquidity is King

For better or worse, IEOs have taken the crypto world by storm, but most projects will never see the sort of liquidity enjoyed by Bittorrent and Matic. In fact, of the 65 IEOs launched in the past six months, the vast majority have failed to even make it onto a second exchange. The consequence of this has been limited liquidity, low accessibility/visibility and, in many cases, a project which has effectively died before it has even gotten the opportunity to develop any serious momentum.

A final note on IEO liquidity: when it comes to securing multiple exchange listings, quality beats quantity every time. According to Cryptorank.io, Binance leads the way, with a much higher average ROI for its listed tokens (94.53%). Bittorrent’s runaway success played a part in this: it was the first IEO on Binance Launchpad, meeting its funding goal of $7.2 million in mere minutes. Every project since has struggled in vain to emulate that success.

Do you think IEOs have peaked, or are they just getting started? Let us know in the comments section below.


Images courtesy of Shutterstock and Cryptodiffer.


Did you know you can verify any unconfirmed Bitcoin transaction with our Bitcoin Block Explorer tool? Simply complete a Bitcoin address search to view it on the blockchain. Plus, visit our Bitcoin Charts to see what’s happening in the industry.

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What to Expect From the Next Bitcoin Cash Protocol Upgrade

Par Jamie Redman
What to Expect from the Next Bitcoin Cash Protocol Upgrade

On November 15, shortly after 12 p.m., Bitcoin Cash (BCH) will execute an upgrade of the network’s consensus rules. After the upgrade is locked in, the next block will enforce minimal pushdata in script and the opcodes OP_Checkmultisig and OP_Checkmultisigverify will be upgraded to accept Schnorr signatures.

Also Read: QE Infinity: 37 Central Banks Participate in Stimulus and Easing Practices

Delivered Code

Next Friday, Bitcoin Cash proponents will be watching the BCH chain upgrade the current consensus ruleset in order to add two new features. Developers have been discussing the upgrade for months now and have explained in great detail at developer meetings how the changes apply to the BCH roadmap. Since August 1, 2017, BCH developers have produced a significant number of protocol developments that are unique to BCH. For instance, BCH engineers have increased the block size to 32MB, allowing for a lot more throughput than a 1MB block.

What to Expect from the Next Bitcoin Cash Protocol Upgrade

In September 2018, BCH surpassed BTC’s daily transaction count by processing millions of transactions in a single day. Bitcoin Cash programmers have re-enabled the old Satoshi opcodes, which can allow for a variety of decision-based transactions, compilers, and other functions. The added opcodes allow for the implementation of OP_Checkdatasig which can be used to calculate the hash within a transaction in order to validate signatures in an automated way. Bitcoin Cash developers also increased the network’s default Data-Carrier-Size to 220 Bytes.

What to Expect from the Next Bitcoin Cash Protocol Upgrade
The two new upgrades coming to Bitcoin Cash on November 15, 2019. If you are a miner or run a full node make sure you upgrade your Bitcoin ABC, Bitcoin Unlimited, BCHD, Flowee, or Bitcoin Verde client before Friday.

BCH engineers did not stop there and at block 582680, the blockchain upgraded by adding the basic foundations of the Schnorr signature protocol. The upgrade prior to the Schnorr feature saw the implementation of Canonical Transaction Ordering otherwise known as CTOR. With CTOR the BCH chain can essentially work with blocks as a set, as opposed to list ordering as the process is done in a canonical manner. According to Coin Dance statistics, BCH developers have added 20 different components to the protocol, there’s another 20 under development, 15 features being discussed and two new properties pending activation. The two added components being implemented to the BCH blockchain consist of a finalized malleability vector (enforcing minimal pushdata in script) and Schnorr signature support for both OP_Checkmultisig and OP_Checkmultisigverify.

Less than two weeks until the Bitcoin Cash network upgrade!

All Bitcoin ABC node operators should ensure they are ready by upgrading to a recent version (0.20.x). https://t.co/MfblcCxh6p#bitcoincash #bch #bitcoin

— Bitcoin ABC (@Bitcoin_ABC) November 4, 2019

Two New Ruleset Changes

The first change will curb malleability vectors on the network by applying the Minimaldata rule. “This removes the final BIP 62 malleability vector, and means that most of the transactions on the Bitcoin Cash network (including all P2PKH transactions) will now be non-malleable,” the November 15 upgrade documentation explains. While bitcoin transactions are signed, signatures don’t encompass all the data hashed and it’s possible for nodes to pervert the transaction by invalidating the hash.

What to Expect from the Next Bitcoin Cash Protocol Upgrade
Read about the Minimaldata rule here.

There are various forms of malleability vectors in scriptSig and signatures, and in 2014 BIP62 was introduced in order to deal with the problems. Over the last few years, many types of solutions have been attempted in order to confront third-party malleability vectors. After the network upgrade next Friday, a majority of bitcoin cash transactions will not be third-party malleable and the enforced Minimaldata rule should also strengthen Simplified Payment Verification (SPV) clients.

The second added feature coming to the BCH chain is support for OP_Checkmultisig (Verify) in order to complement the first iteration of Schnorr signatures. “This upgrade extends that support to OP_Checkmultisig and after this upgrade, all signature checking operations will support Schnorr signatures,” the upgrade documentation reads.

What to Expect from the Next Bitcoin Cash Protocol Upgrade
Read about Schnorr support for OP_Checkmultisig (Verify) here.

The new feature will allow for more complex mechanics to multi-signature transactions that will benefit from the Schnorr mechanism. “Schnorr aggregated signatures (with OP_Checksig) are one way to do multi-signatures, but they have different technical properties than the familiar Bitcoin multisig, and thus are far from being a drop-in replacement for it,” the November 15 specification notes. The summary adds:

Besides that, it is also desirable that any existing coin can be spent using Schnorr signatures, and there are numerous OP_Checkmultisig-based wallets and coins in existence that we want to be able to take advantage of Schnorr signatures.

Upgrading Nodes and Where to Watch

Bitcoin Cash fans are excited about the next upgrade and network participants have been steadily preparing for the changes. Ordinary users won’t have to do anything before the network changes take effect. Miners and node operators, however, are encouraged to download and run the latest version of a BCH client that supports the November 15 ruleset changes.

What to Expect from the Next Bitcoin Cash Protocol Upgrade
Watch the countdown to the Bitcoin Cash network upgrade here.

Currently Bitcoin ABC, Bitcoin Unlimited, BCHD, Flowee, and Bitcoin Verde are all ready to accept the new rules, and at press time 68% of all publicly accessible BCH nodes show upgrade support. Every day enthusiasts and proponents who don’t mine or run a node can simply watch the upgrade online using a data site like Coin Dance or Fork Monitor. On November 15, both websites will let people know exactly when the consensus changes are executed.

For more information regarding the November 15 Bitcoin Cash upgrade, you can read the specifications on Github.

What do you think about the upcoming Bitcoin Cash upgrade scheduled for November 15? Let us know what you think about this subject in the comments section below.


Image credits: Shutterstock, Twitter, Github, Coin Dance, Wiki Commons, and Pixabay.


Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The Local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.

The post What to Expect From the Next Bitcoin Cash Protocol Upgrade appeared first on Bitcoin News.

Corrupt CBI Inspector Booked for Extorting Vigilante Bitcoiner

Par Kevin Helms
Corrupt CBI Officer Booked for Extorting Vigilante Bitcoiner

India’s Central Bureau of Investigation (CBI) has reportedly booked its own officer in an extortion case involving bitcoin. The target was a man who previously fell victim to the Bitconnect scam and allegedly resorted to extreme measures to recoup his money.

Also read: China Now Censors Anti-Blockchain Sentiment, Educates Public on Bitcoin

Extorted by CBI Officer

The CBI has reportedly booked its own officer, inspector Sunil Nair, for allegedly extorting Rs 5 crore (~$700,506) from Shailesh Bhatt, an Indian businessman from Gujarat, local media reported on Friday.

According to the CBI, Nair used the bureau’s Gandhinagar office phone to call Bhatt and threatened him with enforcement action by the Enforcement Directorate (ED) and the Income Tax Department for “earning black money using bitcoin,” Press Trust of India detailed. The publication added that, according to the case’s First Information Report (FIR), Bhatt was neither “probed in any case pertaining to bitcoin” nor was “a wanted accused, witness or suspect, in any case.”

A case under the country’s Prevention of Corruption Act and criminal conspiracy has been registered against Nair and his associate, Krit Madhubhai Paladiya, who co-conspired with him to extort Bhatt. A senior CBI official told IANS publication Friday that “The agency carried out searches at six locations in Gujarat’s Surat and Gandhinagar at the residential premises of inspector Sunil Kumar Nair and a private person named Krit Madhubhai Paladiya.”

Complex Case of Extortions

This case is related to a major scam that surfaced in February last year which involved bitcoin, kidnapping, and several more extortions. It started with Bhatt filing a complaint against Gujarat’s Amreli district police for kidnapping him and extorting 200 BTC and Rs 32 crore (~$4.5 million) in cash. CCTV footage confirmed the extortion and Amreli Superintendent of Police Jagdish Patel, inspector Anant Patel, and eight other officers were arrested.

However, Bhatt himself was also accused of being involved in the kidnapping two people who worked for Bitconnect — Piyush Savalia and Dhaval Mavani — to extort 2,256 bitcoins, 11,000 litecoins, and Rs 14.50 crore in cash. In May last year, the Criminal Investigation Department (CID) reportedly registered an FIR against Bhatt and nine of his accomplices in Surat.

CID-Crime Director General of Police Ashish Bhatia explained at the time that Bhatt had invested Rs 2 crore in Bitconnect but its promoters closed down their shop in January and went underground. To recover their investments, Bhatt and his accomplices allegedly kidnapped Savalia by posing as Income Tax Department officials, and later kidnapped Mavani and forced him to transfer bitcoins to them. “Bhatt and his accomplices extorted bitcoins and cash worth a total of Rs 155.21 crore. Later, they distributed the bitcoins among themselves. Bhatt had kept around 700 bitcoins,” Bhatia was quoted as saying.

However, this case is being investigated by the Gujarat CID without the involvement of the CBI. Nair’s name first came up during the CID investigation back in February last year. He allegedly told Bhatt that he had strong evidence of him “extorting bitcoins” from Mavani, the CBI FIR describes. He then called Bhatt using the CBI’s office phone and “threatened him with dire consequences of getting him raided by Enforcement Directorate (ED) and Income Tax for earning black money from illegal acts and also demanded a bribe of Rs 10 crore to settle the matter,” the FIR adds.

After negotiations, “The deal was then finalized at Rs 5 crore and Bhatt paid Rs 4.6 crore to Nair,” the CBI revealed. Nair, however, continued to demand more payments over the next few days using the CBI’s office phone. According to the FIR, “It is only later that Bhatt realized that there was no such case against him and that he was fooled by the inspector.”

What do you think of this extortion case? Let us know in the comments section below.


Images courtesy of Shutterstock and the Indian Express.


Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.

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How to Start With Bitcoin at No Cost

Par Lubomir Tassev
How to Start With Bitcoin at No Cost

Getting into the Bitcoin world is by default easy and it doesn’t have to cost you anything. All you need to do to get started is to install a cryptocurrency wallet and load it with some digital cash. The growing crypto community, always enthusiastic about accepting new members, has done a lot to make sure you can take these first steps at no expense.

Also read: Crypto-Based Commerce Spikes 65% in 7 Months

Get a Free Crypto Wallet First

To start with Bitcoin you don’t need to be ultra tech savvy but having a basic idea of how cryptocurrency works and what it brings to the world is not a bad idea. There’s a ton of information out there and simple guides such as those prepared by Bitcoin.com will quickly convince you that no matter who you are, Bitcoin is for you. Learning how to buy and sell, send and receive, exchange and protect your cryptos takes little effort and is fun.

How to Start With Bitcoin at No Cost

What you really need to begin your endeavor into discovering financial freedom is a digital wallet that supports your favorite cryptocurrency. Luckily, there are plenty of free clients available and as long as you find one with good reputation in terms of security, you are all set. For example, you can download and install the Bitcon.com wallet app free of charge and manage your bitcoin cash (BCH) and bitcoin core (BTC) holdings in one wallet. Almost 5 million Bitcoin.com wallets have been created so far.

There are different types of wallets you can use. In general, hardware devices such as Ledger and Keepkey provide safer storage for your digital coins. But the utility of software wallets can’t be denied and they are always a good choice for newbies. Software is usually created for more than one operating system. The Bitcoin.com wallet is available as a mobile application for both Android and iOS. And if you are looking for a desktop app, the Badger Wallet is a good option. You can add it to your browser if you are using Chrome or Firefox.

When setting up a bitcoin wallet, it’s important to follow the instructions of the client’s developers. During the installation process you’ll be asked to write down a mnemonic seed phrase that will help you to restore access to your funds in case something irreversible or irreparable happens to the device you installed it on initially. It’s also smart to set up a pin code to authorize any outgoing transactions. Make sure you record and keep that as well.

Load Your Wallet With Free Coins

Once you’ve installed your wallet you’ll have to load it to start transacting in cryptocurrency. And while there are many options to buy some, acquire it on an exchange or purchase it directly from other bitcoin holders, you can also get it for free. The Bitcoin.com faucet provides you with one such option. All you need to do to receive some bitcoin cash (BCH) is to take three easy steps. First, you have to download and install the Bitcoin.com or the Badger wallet. Then you need to log in with your Google account and finally enter your BCH address to claim your free electronic cash.

How to Start With Bitcoin at No Cost

Another opportunity to receive some cryptocurrency is through a friendly gesture. Many in the crypto community are excited about spreading adoption and if you look around you’ll probably find a friend who will be happy to send you some satoshis just to get you started. Bitcoin.com Executive Chairman Roger Ver recently announced on Facebook he is giving away $5 worth of BCH to any of his friends in the social network who provides a bitcoin cash address.

If you want to hodl your coins, crypto history has shown that $5 of bitcoin can easily become $5,000 in the future. But there are also many things you could do with them right now. For instance, you can send some satoshis to a friend who wants to try crypto. Thanks to the low fees on the BCH network, often less than a U.S. cent per transaction, that will be easy and cheap even with a very small amount. You can also donate some of the bitcoin cash you got for a noble cause like the one supported by the eat BCH charity.

And as crypto commerce is growing once again this year, you can spend your electronic cash in a variety of other ways. The Bitcoin Cash Map app now lists almost 1,800 brick and mortar stores that will let you pay with BCH. Spending bitcoin with retailers that do not directly accept cryptocurrency is another option thanks to gift cards you can purchase with BCH and BTC. Getting a $5 Dunkin’ Donuts card takes just a few easy steps.

Have you tried crypto yet? How did you get into the Bitcoin world? Tell us in the comments section below.


Images courtesy of Shutterstock.


Enjoy the easiest way to buy bitcoin online with us. Download your free bitcoin wallet and head to our Purchase Bitcoin page where you can buy BCH and BTC securely.

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Bitcoin Cash House Launches Crypto Hub in Venezuela

Par Graham Smith
Bitcoin Cash House Crypto Education Hub Launches in Venezuela

A new crypto resource has emerged in Barquisimeto, Venezuela, for Venezuelans interested in learning about Bitcoin Cash and cryptocurrencies. The project, called Bitcoin Cash House, is the brainchild of Roberto Garcia and is sponsored by Bitcoin.com and Sideshift.ai. It exists as a physical location and online initiative, seeking to educate newcomers to the space on the acquisition, storage, and general use of crypto, as well as development and job opportunities.

Also Read: Over 200 Venezuelan Taxis Discover the Benefits of Bitcoin Cash

Welcome to the Cash House

Launched just days ago, on November 7, Bitcoin Cash House teaches people in Venezuela about the benefits of crypto. With the nation in a state of economic upheaval and political unrest, many Venezuelans are understandably concerned about finding ways to transact, send and earn money that are not dependent on the hyper-inflated bolivar or the whims of a volatile government.

A Reddit post detailing the launch by Bitcoin.com’s Matt Aaron describes Bitcoin Cash House as “A crypto education hub in the city of Barquisimeto, Venezuela. A mall kiosk where local cryptocurrency advocates teach Venezuelans about the power of cryptocurrency.”

Bitcoin Cash House Launches Crypto Hub in Venezuela

Some of the topics the Cash House will educate folks on include “How to send money to friends and family anywhere in the world instantly,” advantages of crypto over traditional money, how to store and spend crypto, “How to protect assets against volatility with SLP tokens including the USDH stablecoin,” and jobs in crypto as well as developer opportunities.

Though the launch was a challenging process, the crypto advocates involved saw it through. Aaron, host of the Humans of Bitcoin podcast, explains that “We at Bitcoin.com and Sideshift.ai did the easy part and got the sponsorship money. Roberto Garcia did all the hard stuff. It’s his project. He scoured the city to find a place … 2 months later and it’s live. Roberto went to just about every mall; shopping center. Rejections, delays, stipulations.” Founder Garcia notes in the comments:

In Venezuela there is a lot of fear, but thanks to my experience and knowledge with the help of Matt we managed to overcome the problems.

Bitcoin Cash House Launches Crypto Hub in Venezuela
Roberto Garcia speaks to a visitor at the new Bitcoin Cash House.

Moving Forward in Venezuela

Garcia, who also organizes a BCH meetup in Barquisimeto, understands the importance of a physical location and human conversation for conveying the power of crypto. Citing the Los Angeles area hub for “education and services needed to encourage the adoption of digital currencies,” Cryptospace, Matt Aaron writes in the Reddit post:

Having a physical location is POWERFUL. We the cryptocommunity, talk ‘trustless’. But the rest of the world has to earn that trust. In person conversations are powerful.

The Bitcoin Cash House project is currently an experiment, operating on a three-month lease and seeing where things go from there. Aaron notes that surrounding businesses will be encouraged to adopt BCH as well, stating “In the same location are a pizzeria, bank, and liquor store. We will teach them to start accepting Bitcoin Cash as well.” Donations to Bitcoin Cash House can be made via venezuela.Bitcoin.com, and a Spanish language announcement of the launch can be found here.

What do you think about the Bitcoin Cash House project? Let us know in the comments section below.


Image credits: Bitcoin Cash House.


Did you know you can buy and sell BCH privately using our noncustodial, peer-to-peer Local Bitcoin Cash trading platform? The Local.Bitcoin.com marketplace has thousands of participants from all around the world trading BCH right now. And if you need a bitcoin wallet to securely store your coins, you can download one from us here.

 

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