Newsletter

16hours ago, 21 Feb, Thursday
1day ago, 20 Feb, Wednesday
3days ago, 19 Feb, Tuesday
4days ago, 18 Feb, Monday
  • 20:34
    Indonesia Passes Rules for Trading of Cryptocurrency Futures

    An Indonesian financial watchdog has set out new regulations for the trading of crypto assets on futures exchanges in the country.

    The Commodity Futures Trading Regulatory Agency (Bappebti), an agency under Indonesia’s Ministry of Trade, announced the new rules Monday, stating that cryptocurrency futures exchanges must be registered and approved before operating.

    The agency has also confirmed that crypto assets are officially recognized as commodities that can be traded on the country’s futures exchange – a decision first reported last June.

    The agency’s chief Indrasari Wisnu Wardhana said in Monday’s statement that the regulations have been put in place to provide legal certainty to the crypto futures sector, as well to protect consumers and investors.

    In a document detailing the full rules and registration requirements, Bappebti said that futures exchanges and clearing houses dealing in crypto assets must have paid-up capital of at least 1.5 trillion Indonesian rupiahs ($106 million) and must maintain a closing capital balance of at least 1.2 trillion Indonesian rupiahs ($85 million).

    They are also required to have “good level of system security” and a minimum of three employees who are Certified Information System Security Professionals (CISSP). They must also undergo a risk assessment process, the agency said, including confirming anti-money laundering (AML) and combating the financing of terrorism (CFT) compliance.

    Bappebti has also set out rules for futures traders and storage services providers of crypto assets, stating that both must also be approved before operating and both must maintain minimum paid-up capital of 1 trillion Indonesian rupiahs ($71 million) and a minimum closing balance of 800 billion Indonesian rupiahs ($57 million).

    The agency clarified that the new rules do not apply to initial coin offerings (ICOs). Using cryptocurrencies as a means of payment is reportedly still barred in the country.

    According to Reuters, the country’s crypto traders are unhappy that the watchdog has set the minimum capital so high, arguing it will hold back development of the nascent market.

    The CEO of digital asset trader Indodax, Oscar Darmawan, told the news source that the “very large” capital requirement is above what is required for launching a rural bank and far higher than the 2.5 billion rupiah ($177,000) minimum paid-up capital for futures traders of more traditional commodities.

  • 19:58
    Report: Coinbase-Supported Bitcoin Debit Card to Shut Operations in April

    The Shift Bitcoin (BTC) debit card, which allows United States cryptocurrency exchange Coinbaseusers to spend BTC using a Visa debit card, is reportedly shutting down its operations. The development was posted to Reddit on Feb. 18, with the upload of an email purportedly from the Shift team.

    Shift, which launched in November 2015, was one of a steadily-increasing cohort of cryptocurrency debit cards, with multiple providers now issuing them in various countries.

    According to a screenshot of an email uploaded to Reddit and attributed to the Shift team, the BTC debit card program will be deactivated on April 11, 2019.

    Shift did not state the reason for the withdrawal of its own product, and cards will continue to function as normal up until the cut-off date.

    Shift faced skepticism from the moment of its launch, with Cointelegraph reporting at the time on how industry commentators found it difficult to divine a suitably large target market for the card. To obtain it, users have to already hold Bitcoin in order to pay the $20 issuance fee.

    On social media, responses similarly highlighted a likely lack of demand as fuelling Coinbase’s decision.

    The exchange continues to expand its business in other areas, last week unveiling a controversialfeature allowing users to store the private keys to their cryptocurrency wallets in the cloud.

  • 19:42
    Ethereum Client Parity’s Afri Schoeden Quits Social Media Amid Community Infighting

    Afri Schoeden, release manager at blockchain infrastructure firm Parity Technologies, has withdrawn from social media amid a spate of infighting in the Ethereum (ETH) community.

    In a tweet posted on Feb. 17, Schoeden stated that “until further notice [...] I will no longer respond on Gitter, Skype, Discord, Slack, Wire, Twitter, and Reddit.”

    Parity Technologies is a United Kingdom-based blockchain infrastructure provider, known primarily for developing one of the most well-known clients for Ethereum, also known as Parity. Parity’s forthcoming “Polkadot” protocol — a form of “para chain” that links many different types of blockchains — is slated to be released in Q3 2019.

    Shoeden’s decision to temporarily exit the social media space appears to have been prompted by the antagonistic responses to a series of his tweets last week, all of which have now been deleted.

    One of the most controversial, tweeted on Feb. 14, purportedly contended that “Polkadot delivers what Serenity ought to be” — Serenity (or “Ethereum 2.0”) being the final upgrade for the Ethereum network, when the mainnet will transition to a proof-of-stake (PoS) consensus algorithm.

    That same day, Shoeden had also reportedly stirred tempers with his tweet in regard to the purported limitations of the Beacon Chain (phase 0 of Ethereum’s transition to PoS), claiming:

    “#Serenity Phase 0 will be a proof-of-stake beacon chain only interesting for investors (staking), no EVM transition functions, no smart contracts, thus no d-apps. And yet, we still look at another ~18 months timeline to launch phase 0 in 2020.”

    One redditor’s top voted response to Schoeden’s remarks alleged his development work on Polkadot was in direct conflict of interest to the transition to Serenity, and further accused Shoeden of being allegedly “instrumental in delaying Constantinople launch from last October to January 16th and then again from Jan. 16th to February 27th.”

    In regard to this latter accusation, the recent delay of the Constantinople hard fork — one of two system-wide upgrades that constitute the network’s third stage (Metropolis) of development on the way to Ethereum 2.0. — had little to do with Parity. Constantinople's earlier delay in October, meanwhile, was due to a consensus issue that was detected on the Ropsten testnet, affecting both Parity and the Ethereum client aleth.

    Following the onslaught of criticism that surfaced in response to his arguably provocative Polkadot v.s. Ethereum 2.0 statement — with one redditor deriding Afri as “the Judas of our Ethereum community — Schoeden tweeted on Feb. 15:

    “I want to clarify that I put out this tweet to stir discussion, not to cement a narrative.”

    By press time, Parity representatives have not responded to Cointelegraph’s request for comment on Schoeden’s decision to step back from the discussion. Notably, core Ethereum developers — including Jeff Coleman and Hudson Jameson — have tweeted their firm support of Schoeden following his announcement.

    As recently reported, the Ethereum core dev group is currently discussing a controversial new smart contract creation feature set to be released with Constantinople, dubbed Create2, which some have alleged could have negative security implications if it is not sufficiently reviewed.

  • 18:42
    XRP Ripple/XRP could be integrated into our global payments system, says Remitly CEO

    The cryptocurrency ecosystem is a sphere of high volatility and experimentation, due to which the involvement of major financial institutions and cooperations do not take place as smoothly. The adoption of virtual assets has been slowly progressing and Ripple’s XRP has been arguably leading the cryptocurrency universe and making a strong case for implementation in banks and other financial sectors for cross-border transactions and settlements.

    According to a recent report, Remitly, an international payments company, is interested in Ripple’s XRP and is planning to integrate the cryptocurrency’s blockchain technology into their financial transaction services.

     

    In a recent media conference, Matthew Oppenheimer, CEO, and co-founder of Remitly, said that they are looking into the blockchain technology for improving global transactions via a peer-to-peer system, and indicated that a partnership with Ripple to enable smoother transactions could be a reality soon.

    He stated:

    “When I thought a lot about Bitcoin, especially as I was building the business, I was like, I always come back to the customers and say, what is the customer value. The customers could be someone like us, like Ripple could be an example, we could integrate with Ripple, that’s the one that we pay a lot of attention to, or the customer could be an end consumer.”

    Remitly, which is a fairly new international transaction payments company, was founded in 2011. The organization has been transferring nearly $6 billion a year, which currently makes them the largest independent international money transmitter in the USA.

    The company has raised an impressive $200 million in equity and has also been able to generate over $175 million in funds from various industrial leaders such as Stripes Group, Naspers’s PayU, the International Finance Corporation, DFJ, DN Capital, Bezos Expeditions, Founders’ Co-op, QED Investors, and Trilogy Partnership.

    Oppenheimer further mentioned:

    “I can see how can financial services institutions like us, integrate with blockchain technologies to drive down our costs and therefore make it less expensive for customers, or faster to your ACH point.”

  • 17:08
    Ethereum Scaling Tech Monoplasma Wants to Let Dapps Broadcast Crypto

    Blockchain data platform Streamr has officially released a new open-source ethereum scaling technology called Monoplasma.

    Inspired by a pre-existing scaling solution called plasma, Monoplasma is different in that it focuses specifically on “one-to-many payments” in which users would need to “repeatedly distribute value to a large and dynamic set of ethereum addresses,” explained Henri Pihkala, CEO of Streamr.

    Speaking to CoinDesk about use cases for the technology, Pihkala said Monoplasma isn’t just about revenue sharing. Rather, the technology is envisioned for open-source decentralized applications (dapps) looking to incorporate “dividend distributions, staking rewards, repeated airdrops,” and more.

    Demonstrating the power of Monoplasma on stage, Pihkala showed how the tool can be used to drop small amounts of fake “unicorn” tokens into 200,000 addresses on a test version of the ethereum blockchain.

    Marketed as a “special-purpose off-chain scaling solution,” Shiv Malik, head of communications for Streamr, likened the technology to “broadcasting money.”

    “You can receive money, but you can’t send back the other way. That would be like trying to send a message to your TV,” Malik said.

    As such, no double spends – where tokens are essentially counterfeited – are able to occur on a Monoplasma payment channel. “On the side channel, you can only earn money,” emphasized Pihkala.

    Unidirectional Monoplasma payments system. Image courtesy of Streamr. 

    Streamr intends to use the technology to crowdsell user data on a blockchain. Once data from users is sold to a bidding company, payment will directly be pushed into users’ ethereum addresses.

    Revealed last May, Streamr has partnered with a number of tech conglomerates including Hewlett Packard Enterprise and Finnish telecom company Nokia.

    Now, all ethereum developers are encouraged to try out Monoplasma by downloading the public code repository on GitHub.

    Pihkala concluded:

    “If someone else finds use in [Monoplasma] that’s awesome, that’s what makes us happy. But at the very least, we’re going to build on top of it – meaning [Monoplasma] is going to be well maintained. It’s not about to be abandoned anytime soon.”

  • 16:21
    Craig Wright Says Ethereum Can’t Scale, Only for Bucket Shops

    Craig Wright, the alleged creator of bitcoin, submitted a lengthy document to the Commodity Futures Trading Commission (CFTC) last Friday. Railing against the ethereum blockchain, Wright said that he designed bitcoin as a means of fighting fraud and eradicating the need for clearing houses.

    The paper was submitted to the CTFC after a call by the regulator, in mid-December of last year, for the public to submit information on ethereum. In a statement issued at the time, the regulator said that it wanted to gain a better “understanding of the technology, mechanics, and markets” that ethereum and ether support.

    Asia Trading Summit – The Leading Investment Event in China

    Wright’s document was uploaded to the CFTC on the last day that submissions were permitted and it appears that he may have been in something of a rush to complete the document. Though they don’t entirely take away from his points, the paper is replete with grammatical errors and typos.

    The general thrust of the piece is that Wright, who starts out by saying that he created bitcoin, launched the first cryptocurrency as a means of trading without such an extensive array of traditional, back-end trading processes.

    “Where financial assets, shares and securities are exchanged,” Wright wrote, “the blockchain acts to remove the need for a formal clearing house function.”

    Interestingly, Wright also rubbished the idea that bitcoin is inherently anti-regulation. He said that, though it may revolutionize back-end trading processes, it is people that want to operate bucket shop scams, under the guise of “democratising finance,” who are saying the market should not be regulated.

    Ethereum can’t scale

    On top of these points, the alleged founder of bitcoin laid into ethereum. Calling the blockchain system a rip-off of bitcoin, he attacked the system on almost every single level.

    Wright said that ethereum can never scale upwards because of several systematic flaws within the blockchain system. Thus, Wright says, the ethereum blockchain cannot expand anymore that it has.

    “This network has already hit its limit and is effectively only being used to raise capital using illegal bucket shops that are designed in such a way that they can deceive nontechnical parties,” wrote Wright. “No technology released within Ethereum for the provision of computation or ICOs has been created that did not exist prior and in a more effective manner before this network was launched.”

    A long history

    This is not the first time that Wright has attacked ethereum. In November of last year, he said that ethereum doesn’t have a single use-case. He has also implied that it is fraudulent on several occasions in the past.

     

    For his part, Vitalik Buterin, the ethereum founder, has also said that Wright is a fraud. Speaking at a conference in South Korea last year, Buterin said that Wright makes “so many nonsensical claims” and asked why a “fraud” was being given a platform to share his views.

    Wright shot to prominence in 2015 when he claimed that he was the anonymous Satoshi Nakamoto that penned the original bitcoin whitepaper. Though some people have supported him, the Australian is yet to provide any solid evidence which would back up his claims.

  • 08:08
    PAXFUL INVESTING IN YOUNG AFRICAN LEADERS BY BUILDING SCHOOLS WITH BITCOIN

    Paxful CEO Ray Youssef plans on building 100 schools in Africa. Two schools have already been built in Rwanda, while a third is currently in development. 

    Paxful is a peer-to-peer Bitcoin marketplace that directly connects those looking to buy with those looking to sell, with a special focus on the unbanked and underserved world. The platform’s school-building projects are part of its #BuiltWithBitcoin initiative.

    Youssef hopes that Paxful’s school building initiatives will serve to educate the next generation of young leaders. He told Bitcoinist:

    We are working to scale up the process to where we can build several schools at once in different countries at an even higher standard of education. The final goal is a school for gifted children surpassing the education given at top private schools. We believe this is the greatest boost to the emerging worlds possible, to invest in their young leaders. We are working to bring in bigger partners and that means even more transparency on all levels.

    The two already-existing schools are reportedly located in Kasebigege Village in Rwanda — a village still rebuilding after the Rwandan genocide between April and July 1994. One is a nursery school with a few classrooms, four toilets, an irrigation system, a 15,000-liter water system, and a sustainable farm for the entire village. The other is a primary school with more than a handful of classrooms, a cafeteria, bathrooms, solar panels, and a 35,000-liter water system.

    The third school will potentially be built in either Columbia, Ghana, Kenya, or Uganda.

    paxful

    Paxful is not a newcomer to the Bitcoin scene, but it becomes increasingly more clear that the project is interested in providing greater financial access and freedom to the underserved, underdeveloped, and unbanked world through Bitcoin and education.

  • 07:19
    Coinbase Wallet Users Can Now Back Up Their Private Keys on Google Drive and iCloud. How Safe Is It?

    On Feb. 12, San Francisco-based cryptocurrency exchange Coinbase announced that users of its Coinbase Wallet can now back up their private keys on cloud storage, namely on Google Drive and iCloud.

    The move has received mixed reaction from crypto community and cybersecurity experts, some of whom seem skeptical about the idea of storing private keys on centralized servers. Others are confident about the new feature, stressing that it entails encryption.

    A brief introduction to Coinbase Wallet, formerly known as Toshi

    Coinbase Wallet differs from the main app, Coinbase (or Coinbase.com). With the latter, the cryptocurrencies purchased by customer and their private keys are stored by Coinbase. With Coinbase Wallet, in turn, users store their own crypto protected by their unique private keys. Those keys are purportedly secured with Secure Enclave and biometric authentication technology.

    Initially, Coinbase developed Toshi, an open-source, mobile-focused decentralized application (DApp) browser and Ethereum (ETH) wallet that launched in April 2017. The project was inspired by Chinese mobile payments app WeChat and had a built-in messaging support and reputation system, enabling users to rate other users and apps within the platform. According to its developers, Toshi aimed to provide financial services to people in developing countries, especially to the unbanked population. It was also allegedly the first wallet to launch crypto collectibles.

    A year later, in April 2018, Coinbase merged Toshi with its recently acquired Cipher Browser, a similar decentralized app browser and wallet for the ETH blockchain. Cipher’s creator and only developer, Pete Kim, became the head of engineering at Toshi, joining Sid Coelho-Prabhu, Coinbase’s product lead for the DApp project.

    In August 2018, Toshi was rebranded to become Coinbase Wallet. The official announcement read:

    “This is not just a new name, but part of a larger effort to invest in products that will define the future of the decentralized web and make that future accessible to anyone. [...] With Coinbase Wallet, your private keys are secured using your device’s Secure Enclave and biometric authentication technology.”

    Thus, at the time, Coinbase Wallet supported ETH and ERC-20 tokens management, airdrops, crypto collectibles trading and storage, as well as access to DApps and decentralized exchanges, among others things. According to the firm's Medium entry published at the time, Coinbase Wallet would start supporting Bitcoin (BTC), Bitcoin Cash (BCH) and Litecoin (LTC) “very soon.”

    In November 2018, Coinbase Wallet added support for Ethereum Classic (ETC). In February 2019, the exchange’s wallet began hosting BTC. The firm repeated that it is considering adding BCH, LTC as well as other major cryptocurrencies.

    More about the new feature: support for Google Drive and iCloud, more cloud storage providers in the feature

    Thus, on Feb. 12, Coinbase Wallet declared that its users can now back up their private keys on Google Drive and iCloud.

    In the accompanying statement, Coinbase explained that allowing users to upload their keys to a cloud provides a safeguard against lost keys and will help them avoid losing funds should the keys be misplaced:

    “The private keys generated and stored on your mobile device are the only way to access your funds on the blockchain. Owners of ‘user-controlled wallets’ like Coinbase Wallet sometimes lose their devices or fail to backup their 12 word recovery phrase in a safe place, thus losing their funds forever.”

    Now, users of Coinbase Wallet can store an encrypted copy of the recovery phrase on their cloud accounts. Coinbase notes that neither they nor the cloud services will have access to user funds, as the recovery phrase key is unlocked by a password known only to the user. The backup is reportedly encrypted with AES-256-GCM encryption, which is only accessible through the Wallet mobile app.

    Coinbase notes that, in addition to Google Drive and iCloud, they will expand support to other clouds in the future. The feature is an opt-in service that does not replace or supersede the original recovery option.

    Interestingly, the feature was rolled out against the backdrop of the QuadrigaCX case. Earlier this month, the Canadian cryptocurrency exchange filed for creditor protection after the sudden death of its founder, who was reportedly the sole executive responsible for the exchange’s keys and cold wallets. Following his death, the exchange has been unable to access $145 million in digital assets it allegedly needs to remain payable.

    Community reaction

    The new feature received mixed reaction among the crypto community, as some criticized the idea of storing private keys on centralized servers. “You might want to rethink this,” one of the most popular replies to Coinbase’s announcement on Twitter reads. “I don't understand, how do you misunderstand your target audience so bad?” the other one says.

    The reaction among Reddit users seems more collected, as many users stressed that the new feature entails encryption. For example, u/CryptoNoob-17 wrote:

    “At least it's not unencrypted private keys like what blockchain.info did some time ago by sending private keys as plain text over http. If this keeps some noobs from losing their coins and telling all their friends how stupid cryptocurrency is because they lost it all, I don't see a problem.”

    So, is the new feature safe enough? Experts weigh in

    Cybersecurity specialists also seem on the fence about the new feature. Taylor Monahan, the founder and CEO of MyCrypto, a noncustodial wallet, told Cointelegraph that trusting users to come up with complicated enough passwords is not a good idea:

    “Regardless of the strength of the encryption, the weak link will always be the user selected password (on both their wallet AND their cloud storage account). People simply aren't capable of generating a password with enough entropy, nor do they always use unique passwords for every service.”

    Monahan adds that, if hackers realize that an influx of people start using cloud servers to store their cryptocurrency, “we will undoubtedly see an increase in attacks against these cloud storage providers.” She added:

    “Players like Coinbase should not be encouraging this type of unsafe behavior. I understand the desire for a better user experience, but the worst user experience is one where people lose all their crypto assets due to theft.”

    Hartej Sawhney, co-founder and president at Hosho, a startup protecting investments and providing multiple smart contract services including audit, does not agree that individual users will be targeted by hackers as a result of the new upgrade.

    “Hackers tend to want maximum information for minimum effort. This means they will likely attack the heart of a cloud storage service rather than its individual users. Google Drive and iCloud have historically been secure,” he told Cointelegraph, adding that, to him, Coinbase still seems much safer compared to other platforms:

    “If anything, cryptocurrency exchanges should take some notes from Coinbase on how to bolster security. Additionally, Coinbase follows robust security features such as multi factor authentication, email confirmation, and an active bug bounty program, making it far more robust than any other crypto exchange.”

    Josh Datko and Thomas Roth, members of a team of security researchers who study hardware and software vulnerabilities under the title “Wallet.fail,” also told Cointelegraph that the new feature is safe enough, given that certain precautions are made:

    “In our opinion, an user encrypted cloud backup does not significantly increase the risk of compromised given that the password is complex enough, the key derivation from the password to the AES-256-GCM key is sufficient, and there are no implementation mistakes.”

    Additionally, Datko and Roth warned that the implementation also matters:

    “Unfortunately, while this sounds like a straightforward feature, many organisations have made mistakes here. To the best of our knowledge, we are not aware if this new feature is open source or if Coinbase had this independently reviewed.”

  • 06:03
    Hash Wars: Mining Operation OrcaPool Launches to Defend Altcoins and Forks From ‘Attackers’

    A new mining operation dubbed “OrcaPool” has recently been launched, with the goal of defending altcoins and forked coins from attackers who may attempt to pull 51% attacks on them. Specifically, the pool appears to be a response to SharkPool.

    At the time of Bitcoin Cash’s hard fork last year, a new cryptocurrency mining pool, SharkPool, was launched. The pool, founded by Bitcoin Satoshi’s Vision (BSV) supporter Ari Kuqi, threatened to annihilate “alts who dare bearing the Bitcoin name,” and specifically named Bitcoin Gold, Bitcoin Diamond, and Bitcoin Private.

    SharkPool’s plan to annihilate cryptocurrencies is to dominate their hashrate to then start mining empty blocks on their chains. This stops transactions from going through, which over a long period of time creates a significant transaction backlog, making their network useless. The second part sees it sell the rewards it gets from those blocks for BSV, pushing its price up and putting selling pressure on the attacked crypto.

    So far, SharkPool has seemingly attacked BCH’s testnet forcing it to add additional security resources, and Bitcoin Private’s (BTCP) mainnet, forcing cryptocurrency exchanges to require 1,500 network confirmations on transactions.

    2019 Year of the Shark

    Test: 
    Testnet BCH 

    Result: additional resources put in testnet. Nakamoto Consensus is proven to economically incentivize investments in security. 

    Test: 
    BTCP mainnet

    Result: exchanges require 1500+ confirms for BTCP, devastating for a cryptocurrency.

    — SharkPool ~^~ (@SharkPoolCash) December 23, 2018

    Speaking to CryptoGlobe, Kuqi revealed that behind SharkPool’s ideology is Nakamoto Consensus. Per his words, nothing the pool does is “illegal,” as it “obeys all laws and regulations.” He added “miners execute their executive power by voting with their hash, building on a block or orphaning it.”

     

    At the time Kuqi, the founder of Cashpay Solutions, also noted it doesn’t matter whether Craig Wright is indeed Satoshi Nakamoto, as SharkPool “fights for sound and stable money.” The pool has over the past few months been recruiting miners.

    Now OrcaPool, on Twitter, has revealed its goal is to counter SharkPool’s activities, and that it’s also recruiting miners to join its resources. Its website explains the Orca was chosen as it’s a natural predator of the shark.

    The new pool is reportedly going to sell the rewards of blocks it mines for bitcoin. So far, the war between the two pools has seemingly only been occurring on social media. SharkPool, reacting to the competitor, stated:

    A Chinese knock off and like Alejandro, a joke.

    — SharkPool ~^~ (@SharkPoolCash) February 15, 2019

    As onlookers piled on, OrcaPool pushed back:

    Sharks are quivering in fear.

    — OrcaPool (@OrcaPoolCash) February 15, 2019

  • 04:51
    AERGO and SatoshiPay Partner to Launch The Fastest Available Crypto Micropayment Services

    A strategic partnership was launched by AERGO and SatoshiPay to create the fastest micropayments system to date.

    SatoshiPay raises €1m in new funding round @dannylmasters @aeternity@AERGO_IO @meinharrd https://t.co/LiuCKUWET6

    — SatoshiPay (@SatoshiPay) February 6, 2019

     

    SatoshiPay is a developer of micropayment solutions for the digital economy. Its blockchain-based platform facilitates payments of small, even fractional, sums for online content and services. This delivers a much-needed monetization platform for publishers against a backdrop of pressure on digital advertising revenue.

    AERGO aims to develop a new blockchain protocol, with advanced and easy to use developer tools and a state of the art dApp orchestration and deployment framework. SatoshiPay CEO Meinhard Benn said:

    “We’ve had an amazing year in 2018, with exciting technological and business advances at SatoshiPay, and a powerful start into 2019 by announcing our partnership with Europe’s largest digital publishing house Axel Springer. While the timing for the planned completion of our public listing was unfortunate, the strong interest we have seen from institutional investors along the way gives us great confidence that we are on the right track to grow our company into a leading FinTech player in the future.”

    Once the union is done, SatoshiPay will maintain the AERGO for the denomination, settlement, and hosting support of its payments services. Phil Zamani, AERGO’s Chairman added:

    “Enabling frictionless payments for blockchain applications and services is one of the missing links for enabling mass adoption of blockchain technology both in the B2B and B2C sectors. Partnering with SatoshiPay will provide businesses globally with a powerful crypto infrastructure that is interoperable with fiat payment services. We plan to implement SatoshiPay’s technology to power aspects of the AERGO service layer with secure fiat payment options.”

    One Aergo token can currently be bought for approximately $0.0649 or 0.00001792 BTC on exchanges including GOPAXBilaxy and Hotbit.

    Aergo has a market cap of $1.71 million and approximately $190,417.00 worth of Aergo was traded on exchanges in the last 24 hours. It is currently the 584th biggest cryptocurrency by market cap.

5days ago, 17 Feb, Sunday
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  • 21:14
    Santander Enters $700 Million Deal to Use IBM’s Tech, Including Blockchain

    One of Europe’s largest banks, Banco Santander, and tech giant IBM have announced an agreement to accelerate the bank’s development of technologies such as blockchain. The news was announced in a press release published on Feb. 13.

    The five-year global technology agreement is reportedly aimed at enhancing the financial institution’s services using emerging technologies — such as blockchain, artificial intelligence and big data — provided by IBM.

    The deal between IBM and the largest financial and credit group in Spain is reportedly valued at approximately $700 million. The move aims to reduce the bank’s annual costs on IT spending and “significantly enable Santander Group to evolve towards the open, flexible and modern IT environment it requires,” the press release notes.

    David Soto, IBM General Manager for Santander Group, was quoted in the press release as saying:

    "Santander Group is leveraging IBM technologies to support their security and regulatory work, and to rapidly develop new services that meet emerging customer demand by tapping into IBM's unique technology and industry expertise."

    As Cointelegraph reported last summer, Banco Santander created a blockchain research team, dubbed the “Digital Investment Banking” team, to explore the potential of blockchain tech to change securities trading and other financial instruments.

    As Cointelegraph reported this week, IBM recently partnered with pharmaceutical company Boehringer Ingelheim to deploy blockchain in clinical recordkeeping.

  • 20:49
    Enterprise Ethereum Alliance Opens Regional Office in China

    The Enterprise Ethereum Alliance (EEA) is opening a regional office in China, according to a press release shared with Cointelegraph on Feb. 14.

    According to the press release, Weijia Zhang, vice president of engineering at blockchain interoperability startup Wanchain, has been appointed as the head for the new regional office. Zhang will reportedly be responsible “for supporting the advancement and adoption of EEA’s standards by taking part in local hackathons, workshops, training sessions, and conferences.”

    The EEA, according to its website is “a member-driven standards organization whose charter is to develop open, blockchain specifications that drive harmonization and interoperability for businesses and consumers worldwide.” Per the press release, the new office is designed to help EEA members in China leverage the EEA’s standards and other resources.

    As Cointelegraph reported in October last year, the EEA released a new set of specifications in an effort to provide standards for developers using private iterations of the Ethereum (ETH) blockchain.

    During the same month, news broke that blockchain platform Hyperledger and EEA announced that they were joining each other's organizations as “Associate Members” in order to support enterprise blockchain adoption. Hyperledger, similarly to the EEA, is a project that has the aim of improving the development cross-industry blockchain technologies.

  • 19:49
    CFTC Official Argues Against SEC’s Grounds for Disapproving Bitcoin ETFs

    Brian Quintenz, a Commissioner at the United States Commodity Futures Trading Commission (CFTC), has argued against the Securities and Exchange Commission’s (SEC) grounds for not approving a Bitcoin (BTC) exchange traded fund (ETF). Quintenz made his remarks during a panel at the BiPartisan Policy Center in Washington D.C. on Feb. 12.  

    Quintenz specifically argued that potential price manipulation should not be a barrier to the SEC approving a Bitcoin ETF. The CFTC Commissioner participated in the panel alongside SEC Commissioner Heister Peirce. Peirce has notably earned the moniker of “crypto mom” due to her vocal dissent against the SEC’s move to twice reject a BTC ETF proposal from the Winklevoss twins.

    As reported, the SEC has reiterated its qualms over inadequate “resistance to price manipulation” multiple times in its rulings or reviews of BTC-based ETFs. Quintenz drew a parallel between the SEC’s stance and that of his own agency, noting that the CFTC’s “jurisdiction over [...] [Bitcoin futures] contracts requires that they not be readily susceptible to manipulation.”

    He went on, however, to underscore that the qualification of “readily susceptible” is an important nuance, given that any product — with sufficient resources — can be manipulated. Certain mechanisms, he proposed — such as basing a product on an index, rather than a commodity —  can in fact be used to make prospective manipulation significantly less likely:

    “There are mathematical ways through a settlement index to design a contract where even if there isn’t a lot of liquidity on one exchange referenced, the index itself is not readily susceptible to manipulation.”

    Quintenz gave the example of one of the BTC futures contracts that the CFTC has approved for market, which is designed to be settled to “multiple volume weighted average prices in five minute increments over the course of an hour across multiple exchanges.” This, he noted, means that for any actor intending to manipulate the settlement index:

    “[...] they would have to have the majority of volume on multiple exchanges in multiple five minute periods. Could they do it? Maybe. Would we know about it? Immediately.”

    Commissioner Peirce contributed to the discussion of her agency’s approach to reviewing proposed crypto-based products, noting that:

    “At the SEC we have been unwilling to sign off on a Bitcoin ETF thus far. My concern is that it looks a bit like a merit based approach, judging the underlying Bitcoin market and saying we don’t think these are regulated enough. You know, there’s lots of markets that aren’t regulated, but we nevertheless build products on top of them.”

    As previously reported, Peirce’s dissent from the SEC’s negative ruling on the Winklevoss BTC ETF application derived from her view that the agency had overstepped “its limited role.” According to the Commissioner, the SEC was focusing upon the characteristics of the underlying Bitcoin spot market, rather than the derivative the applicants had sought to list, in making its decision.

  • 19:30
    Samsung SDS Reveals Blockchain Accelerator Tech Following Hyperledger Testing

    The IT arm of South Korean tech giant Samsung announced it had developed technology to speed up blockchain transactions, the company confirmed in a press release on Feb 14.

    Presenting at the ongoing IBM Think 2019 conference in San Francisco, Samsung SDS said its new technology, Nexledger Accelerator, had already passed testing with Hyperledger Fabric.

    “In order to improve transaction processing speed, which is a key consideration in applying blockchain technology, Samsung SDS has developed its own Nexledger Accelerator, which can be applied to Hyperledger Fabric,” the press release explained:

    “Samsung SDS tested the Nexledger Accelerator in Hyperledger Fabric last December and found that the transaction processing speed was significantly improved.”

    For the Accelerator, a dedicated Github repository aims to offer developers tools for testing and expanding the technology via a scheme dubbed “Innovation Sandbox.”

    “The intent is to enable blockchain developers to run it to see how many performance benefits they can expect in reproducible ways,” Samsung SDS said in the press release.

    SDS added it would also be joining the IBM Blockchain Platform Board.

    Hyperledger is an open-source enterprise blockchain solution developed by the Linux Foundation. The technology has seen participation from and deployment among major players, including IBM, over the past two years.

    Samsung first debuted its Nexledger product, itself an enterprise blockchain platform, in April 2017.

  • 19:16
    Long-Term Indicator Suggests Bitcoin Price May Be Nearing Bottom

    View

    Bitcoin’s weekly MACD has diverged in favor of the bulls. The indicator carved out a higher low in December, even though bitcoin’s price slipped to $3,100, signaling waning bearish pressures 17 months before the mining reward halving. Bitcoin witnessed a similar MACD divergence 17 months before the previous halving in July 2016.

    The bullish MACD divergence indicates the cryptocurrency could be nearing a long-term bottom or may have carved out one near $3,100 in December. That said, a move above the 21-month exponential moving average (EMA), currently at $5,334, is needed to confirm a long-term bullish reversal.

    Bitcoin could rise above $4,000 if the inverse head-and-shoulders neckline, currently at $3,735, is breached. A downside break of the wedge pattern seen in the 4-hour chart could yield a re-test of $3,400.

    A long-term price indicator validates a growing consensus among investors that bitcoin (BTC) is close to bottoming out.

    BTC fell below $6,000 on Nov. 14, dashing hopes of a long-term bullish reversal from that long-held psychological support.

    The subsequent sell-off came to a halt near $3,100 in December – 18 months ahead of the mining reward halving – triggering speculation that the cryptocurrency could bottom out in 2019. It is worth noting that BTC created a long-term bottom in January 2015 before undergoing a reward halving in July 2016.

    While investors are betting that history will repeat itself, bitcoin’s corrective rally from December lows is struggling to pick up the pace.

    That, however, could change in the near future, as the bitcoin’s moving average convergence divergence (MACD) – a momentum indicator based upon price moving averages – is signaling waning bearish pressures.

    The MACD  usually moves in the direction of the price trend and indicates the strength of a move.

    Bitcoin’s weekly MACD, however, has diverged from the primary bearish trend, i.e. the price hit a lower low near $3,100 in December, while the MACD carved out a higher low. A bullish divergence is widely considered a sign of seller exhaustion and is often followed by trend reversal.

    As of writing, BTC is changing hands at $3,570 on Bitstamp, having hit highs above $3,700 last week.

    Weekly chart

    On the weekly chart, the MACD has produced a higher low in favor of the bulls. It is worth noting that a similar bullish divergence was charted over the five months leading up to January 2015, when BTC bottomed out near $150.

    So, there is a reason to believe the cryptocurrency is nearing, or has already reached, a major bottom.

    As a result, the probability of BTC witnessing a bullish reversal in the next few months is high. A convincing move above the 21-month exponential moving average (EMA) – a level which acted as strong support last year – would confirm a long-term bearish-to-bullish trend change. As of writing, that average is located at $5,334.

    Meanwhile, the prospects of a short-term rally to $4,000 would improve if BTC clears the resistance at $3,735.

    4-hour chart

    BTC has carved out a falling wedge pattern – a bullish continuation pattern – on the 4-hour chart. A move above $3,585 would confirm a wedge breakout and could yield a rally to $3,735, which is the neckline of the inverse head-and-shoulders bullish reversal pattern. A violation there would open up upside toward $4,100 (target as per the measured move method).

    A wedge breakdown, however, would weaken the bullish case put forward by last Friday’s high-volume bullish breakout and shift risk in favor of a drop to $3,400.

  • 18:22
    Multi-Billion-Dollar Store, Domino’s Pizza Now Accepts Bitcoin

    Well, Bitcoin hodling just got harder, you can now buy your favorite pizza from Domino’s Pizza via the Lightning Network while enjoying negligible fees. What’s more? Transaction settles less than 30 seconds—which is near instantaneous if you ask me—and delivery time is within 30 minutes from anywhere in the US.

    You can now buy Domino’s Pizza via the Lightning Network for *5% off* from anywhere in the US with <$0.01 fees, instant transactions and ~30 min delivery. Get it while it’s hot at https://t.co/3tn7O9eexo  pic.twitter.com/zvco9xU7mC

    — Lightning Pizza (@ln_pizza) February 13, 2019

     

    While there are no details on whether Bitcoins are accepted in all of their 13,811 stores spread out across the world including China, there is no doubt that Bitcoin, Lightning Network and general adoption is gaining traction across the world. For starters, Domino’s Pizza is a public company with shares traded at the world’s second largest stock operator by market cap, NYSE as DPZ. The company has revenue by financial year 2017 stood at $2.47 billion translating to $214.68 million in profits. Domino’s Pizza now joins  Paragliding of Switzerland, Nanotorch, Spendl, Vape Store and Pollo Feed in a long list of merchants experimenting with the future of money.

    Why Lightning Network

    Although there is furor on how and why the Lightning Network (LN) operates, it is the next thing close to Bitcoin scaling. On their homepage, LN proponents say the off-chain platform guarantees instant transactions while simultaneously scaling the notoriously hard to “scale” public blockchain.

    Elizabeth Stark’s developed solution bring forth instant payment without worry of block confirmation times because “security is enforced by blockchain smart-contracts without creating an on-blockchain transaction for individual payments.”

    Besides, the network is designed for speed, eliminating bottlenecks and can subsequently processed millions if not billions of transactions per second “blowing away legacy payment rails by many orders of magnitude.” Speed and scalability have a causative effect slashing down costs and allowing one to pay Pizza without worrying about high fees.

     

    LN Capacity is Swelling

    Through these properties, it is not hard to see why the LN has grown by leaps and bounds even in Beta. Statistics reveal that the network’s nodes are up 15.23 percent to 6,242 boosting the number of opened channels to 25,841—up 30.9 percent and capacity alone is up, 36 percent to 673.85 BTC meaning the network can process $2.4 million worth of transactions.

    Read: Is Jack Dorsey Drumming Up Support for Bitcoin Because Lightning Network is Square’s End Game Move?

    These possibilities alone present an opportunity for one of the many investors in Lightning Labs including Jack Dorsey. The entrepreneur is behind Twitter and Square-both are multi-billion business tradable in leading American Exchange. In a Stephan Livera hosted podcast, he revealed that Cash App will soon integrate LN:

    “We would love to make [Bitcoin] as fast and efficient and transactional as possible, and that includes looking at our seller base and register. It’s not an ‘if;’ it’s more of a ‘when’ – how do we make sure that we’re getting the speed that we need and the efficiency?”

  • 14:54
    New Version of XRP Ledger Launched Amidst Harsh Bear Market

    A new version of the XRP Ledger (version 1.2.0) has been launched, according to an announcement from Ripple.

    Asia Trading Summit – The Leading Investment Event in China

    The new version of the ledger will implement the MultiSign Reserve Amendment, a change that will reduce the reserve requirement for Multisign signer lists. In other words, an XRP user will be required to hold fewer XRP in order to act as a transaction signer. Previously the requirement was between 10-15 XRP; now it is just 5 XRP.

    The update also introduces a new measure against fraudulent transactions. Servers will gain the ability to automatically detect transactions censorship attempts and “ issue warnings of increasing severity for transactions that a server believes should have been included in a closed ledger after several rounds of consensus,” according to the announcement.

    Servers are required to update to the newest version of the XRP Ledger by February 27th, or else be rendered incapable on transaction confirmation.

    XRP’s Steady Decline

    The price of XRP, Ripple’s cryptocurrency, has slowly been sinking over the past year, very much in line with the beark markets that have negatively affected cryptocurrency prices across the industry. At the time of writing, XRP was worth $0.30 per token and had a market cap of roughly $12.5 billion. Exactly one year ago, XRP was worth $1.03 a pop with a market cap of $41 billion.

     

    XRP recently encountered some controversy in the Finnish cryptocurrency when Finland-based cryptocurrency exchange Coinmotion wrote a blog post entitled “XRP is a Centralized Virtual Currency.” The exchange had added XRP to its trading platform a short time before the blog post was published.

    “Investing in XRP is more like buying a share on a company than investing in a cryptocurrency,” wrote Pessi Peura, the post’s author. “Ripple is developed by a single company brings some risks that other cryptocurrencies don’t have to deal with. If the central organization, Ripple Labs, is compromised, it could affect the whole ecosystem.”

    The exchange’s decision to post the article has caused outcry from the greater XRP community:

    However, one of Pessi’s claims may have some truth to it: he urged prospective XRP investors to learn about the difference between Ripple and XRP. “Ripple and XRP are terms that can sometimes be confusing,” he said.

    And indeed, Ripple Labs has made an effort to distance itself from XRP following some confusion that may have benefitted the company in the past. Finance Magnates previously reported that “for example, the price of XRP spiked following an announcement that one of Ripple Labs’ products would be adopted by the UAE Exchange. However, this particular product (the xCurrent network) does not use XRP by default.”

    In a Business Insider report last year, eToro analyst Mati Greenspan said that “a lot of newcomers are of the understanding that holding on to XRP tokens is somewhat similar to holding shares in Ripple Labs, which is completely false.”

  • 12:37
    Mike Novogratz Says Institutional Capital Could Drive Bitcoin (BTC) to $8,000 This Year

    Former Goldman Sachs partner Mike Novogratz believes institutional investors are poised to enter the crypto market soon due to recent and future advancements in custody solutions.

    In a recent interview on Bloomberg, Novogratz shared that he believes Bitcoin’s (BTC) next major rally will be on the back of institutional capital flowing into the market.

    “All the architecture that institutions need to feel comfortable with this is being put in place,” Novogratz said. “You’re starting to see the first of the venture funds [get into crypto] and now these hybrid funds, institutions like the Yale endowment. Where Yale goes, people follow.”

    Despite these positive steps, Novogratz notes that current custody options appear to be the sticking point preventing the institutional deluge. He cites the entrance of Fidelity Investments, which is targeting a March launch date for its Bitcoin custody service, as an example of a major step forward in that regard. However, Novogratz tempered expectations by emphasizing that institutions won’t all jump into the market at once.

    “Over the next 6 to 12 months you are going to see institutions put a small amount of their assets [in digital assets],” added Novogratz. “A small amount of institutional assets is a lot of money.”

    Based on these bullish predictions, Novogratz sees institutions driving Bitcoin to as high as $8,000 this year, which would be a roughly 120% increase from current levels.

  • 12:11
    Hyundai Card Partners with IBM for Further Progress on AI and Blockchain Technology

    IBM has been frequently in the news lately as they form new partnerships with companies that want to broaden their reach in technology. One of the most recent announcements is of their collaboration with Hyundai Card Commercial, announced on PR Newswire on February 13th.

    The press release shows that the intention of the collaboration is to improve how AI and blockchain technology is used in Hyundai. The main focus is on

    “improving the customer experience and expanding their financial services business globally.”

    Their announcement was released at the annual conference that IBM hosts for technology and business called IBM Think 2019.

    Before now, there has been no AI-based chat bot available for customer services in the financial industry of Korea, making Hyundai Card an innovator in the space. The service, called “Hyundai Card Buddy,” is capable of answering various questions with great speed that customers frequently ask. The Hyundai professionals are then available to more complex concerns that the AI bots cannot answer at this point. Considering the substantial use of the internet in Korea, Buddy is a great way to service customers, which has already begun to do.

    The AI-based system is programmed to learn through the interactions it has, using the machine learning technology that IBM Watson provides. It is capable of interpreting the meaning of questions, understanding the hidden meanings of the interactions, and provide answers to these questions.

    Hyundai Commercial, as the press release states, is

    “a corporate finance company that provides leasing and financial services for commercial vehicles and construction equipment, is collaborating with IBM to apply blockchain and modernize its business model.”

    The network reduces the lead times and costs for financial transactions with the implementation of Hyperledger Fabric. The commercial financing network aims to offer a complete view of the transactions presently occurring, which happens alongside the securing of transaction data and automation of manual processes.

    Ted Chung, CEO of Hyundai Card, said,

    “It's almost impossible to fully understand or memorize the benefits, limits, or conditions of a finance product. Customer services employees' turnover rate and training cost is very high while the customers demand high quality service. So, we introduced IBM Watson and it became a very powerful tool to help our employees and helped us to lower our employee turnover rate to less than 10%.”

    The general manager of IBM Korea, Andrew Chang, also spoke on the benefits of this collaboration, saying,

    “Korea enjoys a digital-first financial services industry in which the rapid adoption of technologies such as artificial intelligence, analytics, blockchain and cloud are improving the customer experience and helping expand into new opportunities. Working with IBM, Hyundai Card ∙ Hyundai Commercial has pioneered these new technologies and has been a strong innovator in the industry.”

    To learn more about the events transpiring at Think 2019, visit the Newsroom at http://newsroom.ibm.com/think.

    Bitcoin (BTC), Ethereum (ETH), XRP (Ripple), and BCH Price Analysis Watch (Feb 13th)

  • 11:16
    British Financial Historian Niall Ferguson Says Bitcoin Is 'an Option on Digital Gold'

    Niall Ferguson, British economic and financial historian, believes that Bitcoin (BTC) is “an option an digital gold,” as he said in a interview with a blockchain magazine Breaker Mag on Feb. 13.

    Ferguson, a world famous historian and author fourteen books such as The Ascent of Money, declared that Bitcoin itself is “only money in a very limited sense,” stressing that the oldest cryptocurrency is incapable of being money as a means of payment due to massive volatility.

    However, in near future, Bitcoin’s main function will be serving as a type of insurance, Ferguson stated, explaining that it is an asset that is hard to confiscate, and anyone might hold private keysthe same way the European wealthy used to hoard gold jewelry and precious stones.

    While Ferguson said that it is clear that the money of future will be digital, he still expressed scepticism about stablecoins, which are digital currencies that are designed to provide minimum volatility and pegged to fiat currencies, commodities or algorithms.

    Ferguson stated that fiat currencies have indeed performed very well in recent years in terms of inflation. In this context, Ferguson said that building a substitute for something that has been doing well since its inception in the 1970s is “not an obviously winning strategy.” He said:

    “Stablecoin builders should remember that Bitcoin is an unusual kind of asset, which isn’t closely correlated to other asset classes. Investors like that idiosyncrasy.”

    Regarding the future of money, Ferguson expressed hope that the global community will adopt a universal payment system that treats everyone equally, from the “0.1 percent” to the “huge class” of people who are outside the financial system, and have to rely on cash and payday loans. Ferguson also expressed concerns about huge centralized entities that might gain control over customer transactions:

    “My nightmare would be that AmazonGoogle, or Facebook creates some hugely popular version of a digital dollar at which point every transaction is going to be monitored by the network platforms’ big data and [artificial intelligence] AI systems, to an even greater extent than is already true.”

    Earlier today, Mike Novogratz, a former Goldman Sachs partner and founder of crypto merchant bank Galaxy Digitalargued that Bitcoin is going to be a digital gold, claiming that it will be sovereign money.

  • 08:38
    Spanish Region Gives $13 Mln to Develop ‘Industry 4.0’ Technologies, Including Blockchain

    T

    he government of the Spanish autonomous community of Aragon has allocated over 12 million euros ($13 million) for the development of “Industry 4.0,” which includes blockchain technology, artificial intelligence (AI), and other emerging technologies. The news was announced by local news outlet La Vanguardia on Feb. 12.

    The funds —  the amount of which is reportedly twice the originally planned amount —  were co-financed by the European Regional Development Fund (ERDF) within the Operational Program of Aragon for 2014–2020. The donation will be used for the development of industrial property and consulting projects, as well as the analysis and planning of projects.

    The specific objectives of the program include the education and promotion of the “Industry 4.0” concept and associated technologies. The program purportedly plans to attract representatives from various industrial sectors, including research centers and technology firms to work on digital solutions adapted for industry use.

    The program is also designed to help small and medium enterprises (SMEs) incorporate digitalization into their processes and products, as well as enable technology companies to develop their R&D in order to boost the digitalization of the industry.

    In January, the Port Authority of the Bay of Algeciras (APBA), Spain, signed an agreement under which it will collaborate with IBM on its blockchain-based shipping platform Tradelens. The platform will purportedly allow APBA to more securely and efficiently exchange information and documentation between partners within a supply chain.

    That same month, Madrid-based energy company Repsol reported a successful test of a blockchain pilot to improve the quality of safety certification of its products. The use of blockchain will purportedly allow Repsol to save up to 400,000 euros ($450,000) each year by reducing the frequency of errors.

  • 08:35
    Institute of Decentralized Economics Launches in UK to Study Blockchain Economic Systems

    The Institute of Decentralized Economics (IDE) has opened in London, the United Kingdom on Feb. 14, according to a press release shared with Cointelegraph.

    The think tank, which is dedicated to the study of blockchain-based economic systems and their impact on existing institutions, is backed by fintech company Sweetbridge. It is purportedly designed to investigate the potential of decentralized and autonomous systems and find real use cases.

    Per the press release, the idea behind the IDE is to “help organizations better understand the economics that underlie the blockchain industry.” The IDE will also study the design and viability of stablecoins and how government policy and “crypto-economic” technologies interact.

    Sweetbridge will ostensibly facilitate research and attract blockchain industry-related players with different backgrounds and expertise — including entrepreneurs, corporations, and governments —  while the activities of the IDE will be set by the IDE Foundation Council.

    In January, a major Chinese research university launched a blockchain research scholarship with the support of blockchain payment firm Ripple. The program reportedly intends to bring together the best graduate students in China in 2019 to study global blockchain regulations and industry development.

    That same month, the New York City Economic Development Corporation (NYCEDC) announcedthat it is opening its Blockchain Center in Manhattan, which will reportedly offer blockchain-oriented educational services to the general public, such as programming classes to lectures for software developers.

  • 07:53
    Digital Currency Group CEO says most cryptocurrencies will fail, but bitcoin is still king

    Thousands of cryptocurrencies that popped up in the past few years will eventually be worthless, according to the CEO and founder of industry giant Digital Currency Group.

    “I’m not a believer in the vast majority of digital tokens and believe most will go to zero,” Barry Silbert says.

    Silbert is as “bullish as he has ever been,” on bitcoin though and says it’s proving itself as a viable replacement to gold.

    A bear market could be just the beginning of the pain for most cryptocurrencies, according to one widely followed industry expert.

    Barry Silbert, CEO and founder of Digital Currency Group and Grayscale Investments, said besides bitcoin the majority of the once blazing hot crypto market will eventually be worthless.

    "I'm not a believer in the vast majority of digital tokens and believe most will go to zero," Silbert told CNBC in a phone interview following a call with Grayscale investors.

    The rise in initial coin offerings helped bring the industry's market capitalization to more than $800 billion at the start of last year, according to CoinMarketCap.com. Bitcoin made up roughly 50 percent of that total, with its price climbing to nearly $20,000 in December 2017. Amidst the buying mania, Initial coin offerings, or ICOs, became a popular way to raise money from eager retail investors. But they often touted a project that wasn't live yet, or in some cases turned out to be outright fraud.

    "Almost every ICO was just an attempt to raise money but there was no use for the underlying token," Silbert said. "The vast majority of what's out there will be eliminated."

    That elimination is already starting. The Securities and Exchange Commission cracked down on the fundraising method last year, and Chairman Jay Clayton repeatedly urged crypto founders to register with the agency. Silbert applauded the SEC's actions and said most of the tokens were illegal offerings.

    Bitcoin's price, along with that of other other major cryptocurrencies, came crashing down last year. The world's first and best-known digital currency is down more than 80 percent since its peak and was trading near $3,572 as of Wednesday.

    Still, Silbert said he is "as bullish as he has ever been" on bitcoin. As an early investor, he lived through multiple price plunges, all of which were followed by a full recovery. Despite bitcoin's relatively short 10-year existence, it's already on its third bear market plunge of 80 percent or more. The most recent one has yet to bounce back.

    Although bitcoin has seen "a really ugly technical chart," Silbert said there's still a high degree of interest from institutional investors. Digital Currency Group has made the most active seed investments in the industry, more than three times the amount of Andreessen Horowitz, according to Pitchbook. The company owns and operates bitcoin brokerage firm Genesis Trading, and the largest digital currency asset management firm, Grayscale Investments.

    Grayscale also started the first publicly traded bitcoin investment vehicle, the Grayscale Bitcoin Trust, which trades under the symbol GBTC on over the counter markets.

    Part of the upside Silbert sees in bitcoin is based on its potential to replace gold as a safe haven asset.

    "As far as I'm concerned bitcoin has won the race to be digital gold," Silbert said.

    Younger investors don't view gold as the same non-correlated, safe haven as their parents, Silbert said. He quoted an Accenture statistic on the investor call, that $30 trillion of baby boomer wealth is going to be handed down in the next 20 years. Some of that is currently in gold, which Silbert is predicting a younger generation would convert to bitcoin as a hedge instead.

    "I'm convinced that whatever money is in gold is not going to stay in gold," Silbert said. "That gets handed down to millennials -- I'm highly confident a lot of that will go into bitcoin."

    He said the speculation use case has been proven for bitcoin as a "buy and hold strategy." But the question of when meaningful institutional money starts flowing in still remains. Silbert said that heading into 2019, the infrastructure for that to happen safely is finally in place. Fidelity's custody solution and other investment opportunities like a futures market from the Intercontinental Exchange, parent company of the New York Stock Exchange, are all set to go live early this year.

    If and when sentiment changes, Silbert predicted bitcoin prices would "snap back hard."

    "There are certainty institutional investors that have put money to work and many more are are considering it," Silbert said. "Until now they wanted to make sure they're not catching a falling knife."

  • 07:24
    Quebec’s AMF Urges Investors in Technologies Crypto Inc to Contact Regulator

    Quebec’s financial markets authority (AMF) is urging people who invested money in cryptocurrency mining firm Technologies Crypto Inc. to contact the regulator, so that assistance can be provided to them.

    In a press release, the AMF advises all members of the public who are in any way involved with this entity and its two principals – David Fortin-Dominguez and Samory Proulx-Oloko, to contact Ms. Hélène Guilbault at 1 877 525-0337, extension 2427, no later than February 28, 2019.

    Earlier this month, following a request from the AMF, the the Financial Markets Administrative Tribunal (TMF) issued a raft of freezing orders against Technologies Crypto Inc, David Fortin-Dominguez and Samory Proulx-Oloko in connection with violations of the Securities Act. Technologies Crypto, doing business as “Make it Mine” solicited at least $300,000 from investors advising them the money would be used for cryptocurrency mining. Some investors managed to get their money back but others were unable to contact the firm and get their investments back.

    Under the orders, the respondents are prohibited, inter alia, from withdrawing funds from their bank accounts, as well as from disposing of any equipment related to cryptocurrency mining. The TMF also prohibited the respondents from engaging in any activity related to trading in securities.

    “With this decision, the TMF ruled for the first time that an investment offer related to cryptocurrency mining may constitute an investment contract, ie a security whose public offering is regulated,” said Jean-François Fortin of the AMF. “We therefore invite investors who have done business with the respondents to contact the Authority promptly so that we can assist them.”

    The TMF is known for its actions against cryptocurrency fraudsters. Perhaps one of the most prominent case is that against PlexCoin, also known as PlexCorps. In October last year, the TMF renewed the injunction orders against PlexCorps, PlexCoin, DL Innov inc., Gestio inc., Dominic Lacroix and Sabrina Paradis-Royer, which bar the defendants from activities in the securities market. In addition, the TMF issued orders for closing the websites www.plexcorps.com, www.plexcoin.com, www.plexcoin.tech and all other websites that offer information provided by the defendants. The Facebook pages of these entities are also covered by the Order.

  • 06:42
    The First Customs Export Has Been Processed Using Bitcoin Between Argentina and Paraguay

    Argentina and Paraguay have processed the first export using Bitcoin (BTC). A pest control seller in Argentina had to send goods to Paraguay and receive a payment of $7,100. Using the SWIFT network, this transaction would have a fixed cost between $120 and $150. This is something that does not help smaller exporters.

    Using Bitcoin, it is possible to reduce transaction times and costs for exporters all around the world. In order to process the transaction, the buyer contacted Bitex and it processed the transfer using Bitcoin in just an hour. In this way, the cost of this operation was just 1% of the transaction, close to $71.

    Clearly, this is a good option for smaller payments between borders that want to be processed fast and in an easy way. For transactions surpassing $15,000, it might be not so convenient to use this service.

    The exporter receives the payment in Argentine pesos (ARS) or in Dollars (USD) rather than in Bitcoin, which is only used to process the payment. The buyer also pays using his local currency.

    Marcelo Moscatelli, in charge of the commercial area of Bitex, commented:

    “The service is always quoted in local currency. In this case, Bitcoin is just a medium to process the payment. The exporter receives Argentine pesos or dollars, and the buyer pays in local currency.”

    Bitex has several clients in the region. It is already processing payments for Airbnb in Chile for those that want to pay between $150 and $5,000. In Argentina, it is possible to receive payments from Chile, Paraguay, and Uruguay. Those that want to send funds to other countries from Argentina can do it to Chile, Paraguay, Uruguay, Mexico, Brazil, the United States, China, and Australia.

    This is very positive for parties that want to transact funds from one country to another. It is possible to reduce the number of intermediaries, it is cheaper if the funds sent are smaller than $20,000, it is faster and it is not necessary to fill several documents.

    A few days ago, we wrote at BitcoinExchangeGuide that individuals in Argentina are now able to pay for public transport using Bitcoin. Bitex has also been involved behind this development as well, showing that the company is trying to bring cryptocurrencies to the masses in the region.

  • 05:51
    Crypto Whales Move $92 Million in Bitcoin, Robots Target Ripple and XRP, and the QuadrigaCX Saga Takes a New Twist

    According to a new court filing, the embattled Canadian crypto exchange QuadrigaCX claims that on February 6 it accidentally sent $468,675 in Bitcoin to cold wallets it can no longer access. The company alleges that it’s working “to retrieve this cryptocurrency from the various cold wallets, if possible.”

    The exchange says its former CEO passed away in December, and was the only one with access to all of the company’s cold wallets.

    The latest vanishing batch of Bitcoin is part of a larger loss. In total, the exchange says, despite efforts, it’s unable to retrieve $145 million ($190 million CAD) worth of its customers’ digital assets since Gerald Cotten passed away in India last year.

    Ripple and XRP

    Twitter bots appear to be targeting users who follow Ripple on Twitter, sending a “warning” against investing in XRP. The bots have sent dozens of tweets in the past 24 hours. Here’s a look at two of the tweets sent by the FUD-spreading robots.

    You recently follow Ripple on Twitter? If you want to buy XRP it's a big no no. It's been known the dev team had already abandon the project for another one.

    — Heather Hosley (@HosleyHeather) February 12, 2019

     

    You still follow Ripple at this time? If you're thinking about buying XRP, think twice. As I know, dev team is quitting to creat another project. Run as fast as you can

    — Cedric Tidwell (@tidwell_cedric) February 13, 2019

     

    Bitcoin

    Three Bitcoin whales have moved a total of $92 million in Bitcoin in the last 24 hours. None of the transfers appear to be traders gearing up to sell.

    The biggest whale sent 20,000 Bitcoin worth about $72 million from one unknown wallet to another.

          20,000 #BTC (72,582,941 USD) transferred from Unknown wallet to Unknown wallet

    Tx: https://t.co/v7VJXdTXZc

    — Whale Alert (@whale_alert) February 13, 2019

     

    The other transfers sent funds from crypto exchange Poloniex to an unknown wallet. One moved 4,309 BTC worth $15.6 million, while the other fired off 1,559 BTC worth $5.6 million.

  • 05:45
    EFF Criticizes SEC For Violating Freedom Of Speech During Etherdelta Action

    EFF Criticizes SEC For Violating Freedom Of Speech During Etherdelta Action

    The Electronic Frontier Foundation (EFF) issued a statement criticizing the Securities and Exchange Commission (SEC) for violating freedom of speech laws during the commission’s actions against Etherdelta last year.

    The statement, released earlier today, claims that code can be considered speech, and that code is, therefore, subject to freedom of speech laws. The SEC allegedly violated this freedom of speech laws when initiating enforcement proceedings against Etherdelta and its creator last year.

    “The Electronic Frontier Foundation (EFF) is concerned that certain language in a certain public statement and in the SEC’s Order involving the Etherdelta smart contract could be read to imply that persons engaged in merely writing and publishing computer code could run afoul of U.S. securities laws,” explains the EFF in its statement.

    “The statement raises significant concerns for EFF because imposing liability for, or prior restraints on, publishing and distributing code would violate the First Amendment and chill innovation.”

    The EFF wants to ensure that code remains seen as a type of speech, and therefore falls under existing freedom of speech laws. The EFF feels that the SEC’s actions against Etherdelta and its creator violated those laws.

    Last year, the SEC initiated enforcement proceedings against Zachary Coburn, creator of Etherdelta.

    Coburn, according to the SEC, “wrote and deployed the Etherdelta smart contract to the Ethereum blockchain and that he “should have known that [these actions] would contribute to Etherdelta’s violations and thus, under Exchange Act Section 21C(a), caused Etherdelta to violate Section 5 of the Exchange Act.”

    In other words, the SEC initiated enforcement actions against Coburn because he wrote a smart contract – a piece of computer code or software based on the blockchain – that was later used to violate the law.

    The EFF and other organizations have been critical of the SEC for attempting to implement policy through enforcement. The action by the SEC last year could be another example of this attempt.

    The SEC Used Overly Broad Language That Could Target All Crypto Programmers

    The argument comes down to the responsibility of an algorithm maker. Does the person who makes an algorithm have a responsibility to ensure that the algorithm is used responsibly? Can that person publish and write code without obtaining a license?

    Here’s how the SEC ruled, during its initial statements on the matter:

    “A system uses established non-discretionary methods if it provides a trading facility or sets rules. For example, an entity that provides an algorithm, run on a computer program or on a smart contract using blockchain technology, as a means to bring together or execute orders could be providing a trading facility. As another example, an entity that sets execution priorities standardizes material terms for digital asset securities traded on the system, or requires orders to conform with predetermined protocols of a smart contract, could be setting rules. Additionally, if one entity arranges for other entities, either directly or indirectly, to provide the various functions of a trading system that together meet the definition of an exchange, the entity arranging the collective efforts could be considered to have established an exchange.”

    The EFF took issue with the language of the SEC’s statement. They had a particular problem with the SEC’s use of broad language that could be applied to a range of different cases, including the line, “an entity that provides an algorithm.” This line could be used to refer to anyone publishing code and working to develop systems that could benefit the public, including computer programmers and cryptographic researchers.

    Furthermore, the SEC’s use of lines like “an entity that provides an algorithm” could be a violation of First Amendment free speech laws. It could be used to target anyone who writes code:

    “Because publishing code is protected by the First Amendment, such an outcome would be unconstitutional, and would undermine important policy goals such as ensuring that innovation in blockchain and distributed ledger technology can continue to flourish.”

    The EFF is a non-profit civil liberties organization founded in 1990 with the goal of promoting privacy, free expression, and innovation. 20 years ago, the EFF was involved in a landmark case that established the act of writing and publishing code as fully protected under the First Amendment.

    Moving forward, the EFF may provide legal representation and assistance to decentralized app developers and other coders involved in areas where legal principles are non-existent or in development. Situations like the Etherdelta case are confusing and without precedent, which is why organizations like the EFF feel motivated to protect crypto-liberty.

  • 05:30
    Vitalik Buterin Submits New “Create2” Smart Contract Function, Bringing New Attack Vector With It

    The Ethereum platform is working through its original roadmap that dictated multiple upgrades to improve their scalability and overall function. Vitalik Buterin, the co-founder of ETH, suggested a function called Create2 that would be applied to smart contract creation. According to a post in Ethereum Magicians, the developer’s forum states that the new feature comes with a new attack vector for the platform.

    Tim Cotten, a software developer, says that the existing create function will open a new contract. The address for the contract is generated with the use of the creator’s address and a random number. With Create2, the only difference is that the smart contract’s address can be pre-determined by different parties.

    The Ethereum Improvement Proposal (EIP), EIP-1014, can be found on the corresponding GitHub page. This page revealed that the ability to allow interaction with a non-existent contract is the concept that stirred the new function. With the EIP, interactions could be performed “with addresses that do not exist on-chain yet but can be relied on to only possibly eventually contain code.” The EIP has already been approved and will come with the Constantinople hard fork.

    Rajeev Gopalakrishna, a chief scientist at the Indorse blockchain startup, says that the Create2 function would post a security risk. Based on the information he has seen, the feature would make it possible to change the smart contract address at any point, even after it has been deployed. With that issue in mind, he added that the new address could essentially be replaced with a malicious address, or that the smart contract could be switched out for a malicious contract.

    Gopalakrishna added, “Doesn’t this change a major invariant assumed by users today and introduce a potentially serious attack vector with CREATE2 ? Doesn’t this mean that any contract post-Constantinople with a self-destruct [function in its code] is now more suspect than before?”

    Noel Maersk, another software developer, believes that the capability to self-destruct is not inherently concerning. Instead, he says that the suspicious issue would be non-deterministic init code. This type of coding would allow someone to view the code that a smart contract will have. With this information, any hacker could easily get ahold of the pre-approved interactions associated with the address, thus allowing theft. Carver adds, “It looks like a lot of contract devs aren’t aware that (new) contracts will be able to change in-place after the update.”

  • 05:23
    Korea Exchange Bank (KEB Hana Bank) Joins The Blockchain Technology Bandwagon

    Korea Exchange Bank (KEB Hana Bank) Joins The Blockchain Technology Bandwagon

    Korea Exchange Bank (KEB Hana Bank) has announced it has filed 46 patent applications with the nation’s authorities to enable its develop various distributed ledger technology(DLT) based systems, reports local news source ZDNet on February 13, 2019.

    Revolutionizing The Banking Industry With Blockchain Technology

    Blockchain technology, the groundbreaking tech powering bitcoin (BTC) and altcoins is gradually transforming a vast array of industries across the globe, including healthcare, fintech, and others.

    In order not to be left behind in the blockchain movement, KEB Hana Bank, a highly reputed Korean lender that is also part of the Hana Financial Group (HFG), has reportedly announced that it has successfully filed an impressive 46 patent applications related to DLT.

    Specifically, the financial institution has revealed that the patents are for the development of methods and systems for purchasing overseas products, systems, and methods for electronic contracts, as well as methods and system for offering clients' crypto assets services via blockchain technology.

    Interestingly, unlike other firms that have filed blockchain patent applications in the past but are yet to develop any significant decentralized applications (dApps), KEB Hana Bank has reportedly claimed that it has already started building some of the filed patents.

    KEB Hana Developing Blockchain-Based Internet Banking Solution

    At a time when forward-thinking financial institutions are exploring ways to facilitate superfast, secure and cost-efficient cross-border payments through blockchain technology, KEB Hana Bank says it’s looking to develop an internet banking solution that would be based on DLT, to enable it to issues IOUs in a frictionless way.

    Commenting on the development, the vice president of KEB Hana bank noted that the firm is determined to make the blockchain systems as robust as possible to ensure they successfully connect the new models with its internal operations.

    In his words:

    “The patent applications are not merely about applying blockchain technology into the banking system. It is very critical to connect the new business models and the bank’s internal systems through blockchain technology.”

    Though nascent, it’s worth noting that blockchain technology adoption is slowly but steadily becoming ubiquitous and it’s just a matter of time before the revolutionary technology goes entirely mainstream.

    In November 2018, Bitcoin Exchange Guide reported that a vast array of businesses including Microsoft, Google, Bank of America, Mastercard and IBM have all filed blockchain patent applications, to enable them to remain at the forefront of the revolution.

  • 05:07
    Coinbase Handed Out a $30K Bounty for a Critical Bug in its Systems

    Another day, another bug. Cryptocurrency exchange desk Coinbase has handed out a massive $30,000 bug bounty for a critical vulnerability in its systems.

    The flaw was logged on February 12 via Coinbase‘s vulnerability disclosure program on HackerOne. A Coinbase spokesperson confirmed to Hard Fork the vulnerability has since been fixed, but could not provide any further details about the issue in question.

    The vulnerability report is closed to the public, but considering the high bounty of $30,000, it seems the flaw was rather severe.

    Currently, Coinbase has a four-tier reward system based on the impact of the bug: $200 for low, $2,000 for medium, $15,000 for high, and $50,000 for critical impact.

    “In order to be deemed valid, a report must demonstrate a software vulnerability in a service provided by Coinbase that harms Coinbase or Coinbase customers,” the company’s bounty terms stipulate. “Coinbase awards bounties based on severity of the vulnerability. We determine severity based on two factors: impact and exploitability.”

    To qualify for a critical impact bounty, a vulnerability must allow attackers to “read or modify sensitive data in a system, execute arbitrary code on the system, or exfiltrate digital or fiat currency in some way.” As far as critical exploitability goes, Coinbase says attackers must be able to “unilaterally exploit the finding without significant roadblocks or special conditions outside attacker control.”

    For the record, the exchange awarded three more bounties this week, but all of those were marked as low-impact attack vectors.

  • 05:00
    CoinMap Crypto Acceptance Monitoring Data Shows Bitcoin Use is Up 700%+ in Growth Since 2013

    According to CoinMap, the number of shops and commerces accepting Bitcoin (BTC) around the world grew around 700% since December 2013. There are different countries that have registered a larger increase than others for different reasons. Some of them are Colombia or Venezuela.

    The CEO of the digital asset management firm CoinShares, Ryan Radloff, highlighted that there was a dramatic surge in the number of venues that accept Bitcoin as a means of payment. On Twitter, he shared a heatmap comparing the number of venues accepting Bitcoin in 2013 and 2018.

    1/ 2013 vs. 2018 venues accepting #Bitcoin pic.twitter.com/BjpraiY9qJ

    — Ryan Radloff  (@RyanRadloff) February 12, 2019

     

    At the moment, the total number of business accepting Bitcoin is 14,346. Back in 2013, that number was 1,789. Some of the region with the largest number of Bitcoin-friendly shops and businesses are Europe, the United States, some parts of Latin America and also Asia.

    Latin America has seen also an important increase compared to previous years. The crisis in Venezuela and the millions of migrants moving to Colombia, Ecuador, and Argentina have given an impulse to virtual currencies as well. Now Latin America seems to be a more integrated region to virtual currencies compared to 2013.

    However, the Middle East and Africa and Central Asia remain as places with low Bitcoin and crypto integration, as shown by CoinMap. There are some exceptions. In Africa, Lagos, Johannesburg, Cape Town, Harare, Pretoria, and Nairobi seem to be cities with a larger number of venues accepting the most popular digital asset in the market.

    Although the market is currently in a bear trend that has affected the whole industry. In the future, it might be possible for Bitcoin and other virtual currencies to be accepted in many other places all over the world.

    It is important to mention that although this seems positive, there is no information regarding how many individuals are really using these venues. There is a larger offer of where to pay for goods and services using Bitcoin and this is something that during a bull market will be very positive for these shops and also for individuals using digital currencies.

  • 04:31
    Truth or FUD? A Finnish Crypto Exchange Tear-Down Ripple and XRP

    Good news is more and more exchanges are offering support for XRP. And it is not hard to see why the highly liquid coin is irresistible and popular among cryptocurrency investors. Thanks to the demand of the Finnish community, Coinmotion did bow to pressure and after “several requests from our customers we have added XRP available for trading.” The exchange, one of many in Finland, claims to be a secure platform where one can trade and store cryptocurrencies like Litecoin, Ethereum and Bitcoin. Paired against the Euro, Coinmotion fees are competitive and transparent with a two percent commission. Furthermore, their order execution is fast and there is guaranteed safety of deposited coins as they use a multisig cold wallet which has been proven on numerous occasions to be hacker proof.

    However, it’s not about the quality of their offering or the security of their platform neither is it about fees. It is all about their latest blog post titled: XRP is a Centralized Virtual Currency. Several users are upset first because it is from an exchange claiming to advance cryptocurrencies to the masses and secondly from the misconception that can deter investment.

    I strikes me as very bizarre that you would write an article with so much basic factual inaccuracy when you are actually trying to get people to come to your service. What benefit is that to you to mislead people? You would be best retracting the article and rewriting correctly

    — Matt Hamilton (@HammerToe) February 12, 2019

     

    While Ripple has in several occasion has to reiterate and explain on forums and conferences that their coin is not centralized, the post’s title is misleading and lacking in many angles. As a matter of fact, Coinmotion are urging would-be XRP buyers to explore more because “Ripple and XRP are terms that can sometimes be confusing.”

    All the same, the exchange agrees that “Ripple has shown potential for global adaptation by established financial institutions and companies.” Even so, their admission is short-lived as Coinmotion fails to see what is clearly visible by stating that Ripple’s progress—that of on-boarding financial institutions, striding deals and sponsoring projects is “all theory.”  Coinmotion explain why they think it is all “theory” saying “ companies have stated in one way or another of being interested in Ripple, only little actual use is done and most companies and institutions are still just looking on to the subject.”

    XRP is a blockchain, a cryptocurrency and it is NOT centralized. Ripple runs 6% of the nodes and 27% of the UNL validators. If ripple were to dissapear the network would continue to operate.

    — Leonidas (@LeoHadjiloizou) February 12, 2019

     

     

    Pessi Peura, the author of the article, continues to rub in the centralization claim: “XRP is not mined and it is heavily centralized.” Additionally, “Ripple is developed by a single company brings some risks that other cryptocurrencies don’t have to deal with. If the central organization, Ripple Labs, is compromised, it could affect the whole ecosystem.”  What is sure to irk the XRP army is the closing statement where Pessi concludes by saying “investing in XRP is more like buying a share on a company than investing in a cryptocurrency.”

    The best advice I could possibly give is to retract this completely incorrect and misleading blog, do some research, then re write it. There are simply far too many mistakes and lies for it to be edited.

    — Wendy Moon (@RippleyMoon) February 12, 2019

  • 04:14
    Blockforce Capital Withdrew its ETF Proposal

    Reality Shares ETF Trusts, a division of Blockforce Capital, is withdrawing an exchange-traded fund proposal that, if approved, would have included exposure to bitcoin futures.

    The move comes just days after the proposal for the Reality Shares Blockforce Global Currency Strategy ETF was first submitted to the Securities and Exchange Commission (SEC). According to a note submitted to the SEC on Tuesday, the company withdrew its ETF proposal at the request of agency staffers.

    A lawyer for Reality Shares confirmed the move when reached for comment by CoinDesk, stating:

    “I can confirm that we did withdraw it and it was withdrawn because the staff are still taking the position that it’s not appropriate to file a registered 40 Act fund with cryptocurrency exposure at this time.”

    The lawyer added that the Investment Company Act of 1940 – which the proposal was filed under – would have resulted in the proposal becoming automatically approved within 75 days, which is a specific aspect with which SEC staffers took issue.

    An attorney familiar with U.S. securities regulations told CoinDesk that SEC Director of Investment Management, Dalia Blass, essentially forbade fund sponsors from registering crypto-related investment products under the 40 Act in a letter dated January 2018.

    The letter further added that these fund sponsors should particularly not use rule 485(a), which Reality Shares’ proposal did.

    Indeed, the initial filing does indicate that the ETF would have gone live 75 days after the initial filing.

    Unlike other bitcoin-specific ETFs filed by companies such as Bitwise and VanEck/SolidX, whose proposals would be examined by the Division of Corporation Finance, Reality Shares’ filing falls under Investment Management (IM) due to the 40 Act filing.

    “IM reviews 485(a) filings and provides comments, but unlike filings for non-investment companies on Form S-1 … a 485(a) filing goes effective without action from IM,” the attorney explained.

    This is because there is no “‘delaying amendment’ that specifies that the filing will not go effective until approved,” he added.

  • 03:42
    Digital Asset Loses Second CTO in 6 Months as Startup Shake-up Continues

    The shake-up continues at financial blockchain company Digital Asset (DA) following the departure in December of CEO Blythe Masters.

    CTO of engineering and chief information officer James Powell left the company at the end of January, only six months after joining, according to a person with direct knowledge of the situation.

    Powell’s departure was unrelated to Masters leaving, according to this source, explaining that the CTO did not jibe with DA’s startup culture. Before joining the company in August, Powell held senior positions at such large corporates as Thomson Reuters and Warburg Pincus.

    His responsibilities at DA were assumed by Shaul Kfir, the CTO of architecture and a member of the founding team, the source said. Powell did not answer requests for comment by press time. 

    Meanwhile, DA has hired Zohar Hod, a trading technology veteran, as its chief strategy officer. Hod reports to co-founder and chief operating officer Yuval Rooz.

    In his newly created position, Hod will assess the competitive landscape and market demand for distributed ledger technology (DLT) to advise the company’s leadership about growth opportunities, according to a bio provided by the company. His hiring was reported earlier Tuesday by Global Custodian, a trade publication.

    Hod spent eight years at Intercontinental Exchange (ICE), the parent of the New York Stock Exchange, as global head of sales and support. He also spent three years at IBM as head of its trading solutions group. Just prior to joining DA, he was CEO of truePTS, a post-trade data firm.

    New HQ

    Hod is based in New York at the company’s new headquarters on the 47th floor of 4 World Trade Center in the financial district. DA recently moved offices from 96 Spring Street in Soho so its 70-plus New York-based employees could work together on the same floor.

    Digital Asset has more than 175 employees working in six global locations – New York, London, Zurich, Budapest, Hong Kong and Sydney.

    The firm is seen as something of a bellwether for industrial-grade DLT upgrade and integration thanks to its undertaking to replace the Australian Stock Exchange’s (ASX’s) CHESS clearing and settlement system.

    Although the deadline for that project has been pushed back to early 2021, ASX told CoinDesk in an interview last year that Masters’ departure would not impact its timeline.

  • 03:14
    NOVOGRATZ: INSTITUTIONAL MONEY COMING IN THE NEXT 6-12 MONTHS

    Former Wall Street hedge fund manager and popular Bitcoin proponent Mike Novogratz thinks that institutional money will start coming into the cryptocurrency market in the next 6 to 12 months as custody solutions are rolled out. 

    THEY WON’T “RUSH IN ON DAY ONE”

    Speaking on Bloomberg Daybreak: Middle East, the CEO at Galaxy Digital laid out his current position on Bitcoin and the cryptocurrency market.

    Novogratz acknowledged the tumultuous nature of 2018 for the cryptocurrency market, as a lot of the digital currencies have collapsed in value with more than 90 percent, while the market itself has lost upwards of $700 billion.

    However, he also remains firm on his feet, holding that recovery will follow.

    He said that all the “retail friends that came up and down are washed out” and that the market is in the process of “handing off ownership from retail to institutions.”

    Fidelity Investments Adds Cryptocurrency Integration Through Coinbase

    The expert outlines that all the architecture which institutions need to “feel comfortable” is currently being put in place.

    Namely, Novogratz noted Bakkt and Fidelity as important steps in providing trusted custody solutions, saying that they are likely to come in somewhere next month.

    However, he also holds that institutions won’t “rush in on day one” but they would rather take their time and see some “water run through the pipes.”

    Nevertheless, Novogratz predicts that institutions will allocate a small amount of their assets into the cryptocurrency market over the next 6 to 12 months while clarifying that “a small amount of institutional assets is a lot of money.”

    BITCOIN WILL BE ‘DIGITAL GOLD’

    Commenting on Bitcoin, Novogratz said that the cryptocurrency “is going to be digital gold.” He outlined that it will be a place where “you have sovereign money.”

    It’s not US money, it’s not Chinese money, it’s sovereign. And so sovereignty, it costs a lot. It should cost a lot.

    Novogratz has said that bitcoin will become “digital gold” before. In December 2018, he said:

    I do believe Bitcoin is going to be digital gold. That means it’s the only one of the coins out there that gets to be a legal pyramid scheme. Just like gold is.

    But he’s also not the only one to compare Bitcoin to the precious metal. In fact, some proponents like Digital Currency Group’s Barry Silbert have argued that Bitcoin is ’50 times more useful’ than gold.

    The popular Bitcoin investors, owners of the Gemini cryptocurrency exchange, Tyler and Cameron Winklevoss, have also said that Bitcoin is better than gold.

  • 03:10
    Current ICO Market Is Bigger Тhan at the Start of 2017, Data Shows

    While the initial coin offerings (ICOs) market is currently smaller than it was in 2018, it is still larger than it was at the beginning of 2017, data on crypto analytics website CoinShedule reveals as of Feb. 13.

    Total Funds Raised per Month Since Feb. 13, 2017-Feb. 13, 2019 — CoinSchedule

     

    Total Funds Raised per Month Since Feb. 13, 2017-Feb. 13, 2019 — CoinSchedule

    CoinShedule’s data states that last month $291.6 million have was raised through ICOs, which is around 19 times less than the $5.8 billion raised in March last year. Still, this is also nearly 72 percent more than the $81.8 million raised in April 2017. Furthermore, according to the data reported on the website, at press time at least 63 ICOs are currently live, and another 18 are upcoming.

    A recent Bloomberg report also notes that “while many ICOs used to be launched from the United States, an increasing number are taking place elsewhere, such as in Switzerland. According to the article, the U.S. hosted 22 completed tokens sales in Q1 2018, equivalent to “about a fifth of the 113 sales globally during the period, while the rest of the world had 111.”

    According to a recent ICObench report, ICOs in Q4 2018 raised 25 percent less than in Q3, while the total amount of completed ICOs increased. Switzerland ranked second in regard to raised funds behind Singapore.

    By mid-January 2019, ICOs managed to raise about 33 percent of the combined amount raised in the previous month of December, raising around $160 million. Per ICObench, the number of ICO listings continued to decline through January.

  • 02:49
    MyEtherWallet Teams Up With Large Exchange to Offer Better Rates on Dozens of Coins

    A crypto wallet has relaunched its product and signed a partnership with a well-known exchange — delivering new features to its users in the process.

    MyEtherWallet’s collaboration with Changelly means its community can use the exchange’s multi-swap functionality. This feature opens the door to more than 100 cryptocurrencies and helps achieve better exchange rates during conversions.

    The technology is being included in the fifth iteration of MyEtherWallet — and since launch, the platform says it has evolved from “a geek-oriented platform to a go-to brand known for being an intuitive portal for both Ethereum beginners and natives.” Multi-swap works by automatically selecting the best crypto trade in order to get from A to B before scouring exchanges for the lowest rates.

    In Mew V5, the company says that users have four ways of accessing their wallets: via hardware, software, a free app known as MEWconnect or via MetaMask.

    A “newly reinvented wallet interface” is home to a revamped swap page, where users can access better deals when exchanging their crypto assets. It offers transparent fees and fast transactions that can complete within five to 30 minutes.

    Seamless exchanges

    While Mew heralds the collaboration as the latest milestone for the world’s first Ethereum wallet interface, the exchange believes the application of its technology will help make crypto more accessible for anyone who wants to get involved.

    Kosala Hemachandra, co-founder and CEO of MyEtherWallet, told Cointelegraph: “The newly unveiled MEW V5 builds on our project’s ongoing focus to empower users with an easy-to-use interface for the Ethereum blockchain that does not compromise on security and anonymity. We are excited to partner with Changelly to further this goal by integrating their multi-swap function into our platform.”

    Meanwhile, Changelly CEO Ilya Bere added: “Ultimately, greater collaboration between blockchain market leaders is pivotal if we are to truly bring cryptocurrency to the mainstream world. Our integration into MEW V5 moves us one step closer to this and enables users to seamlessly exchange their tokens in just a few minutes.”

    MyEtherWallet describes its newest product as a trustless interface — one that ensures crypto users remain in complete control of their assets at all times. This is achievable because data never leaves a user’s computer or browser, and funds are never held by the platform. As a result, Mew users are responsible for their own private keys and passwords.

    About Changelly and MyEtherWallet

    Changelly is an instant cryptocurrency swap platform that launched in 2015. The exchange offers its technology on a “white label” basis, meaning businesses can integrate its API and receive revenue from every transaction made. This is coupled with an affiliate program in which websites, blogs and social media profiles can receive 50 percent of the revenue generated when a crypto user completes a transaction.

    MyEtherWallet describes itself as a “free, client-side interface” enabling users to interact with the Ethereum blockchain through an “easy-to-use, open-source platform.” Insistent on being known as the shortened version of its name, Mew, the organization says it is a “team of crypto enthusiasts dedicated to bringing you the most secure, most intuitive and dare we say the prettiest way to manage ETH and ERC-20 tokens.”

  • 02:41
    Ripple’s Xpring Invests in Wietse Wind’s XRPL Labs

    Tristan, Wietse and Ali project, XRPL Labs, now have the full backing of Ripple’s Xpring, Vanessa Pestritto has announced via a Medium Post. Describing themselves as a dedicated team working full time developing applications for the XRP Ledger, their exemplary work has been identified and would receive undisclosed amount of funds from the global payment start-up.

    Wietse Wind is helping build an ecosystem around ILP and XRP Ledger and most of their products revolve around creating use cases for XRP. XRP as we know is the native coin of the Ripple ledger and despite recent headwinds; it is the third most valuable in the world after Bitcoin and Ether.

    Vanessa picks out the XRPL Labs team leader attributes saying he is a team leader, a proven entrepreneur who has ” built a technology consulting company, which serves numerous clients ranging from larger scale companies to smaller offices.” She goes on saying that Wietse’s “creative approach, leadership and ability to engage developers” were the main reason why Xpring settled on his project.

    Some of XRPL Labs projects include:

    A DEX UI where a user can trade XRP with IOUs or vice versa. It is through this DEX that a user can also send, create and cancel offer right on the XRP ledger.

    A cold Storage OS which is 100% Air-gapped. This enhances security and for a user to reap all these benefits, all s/he needs to do is install the company’s Linux-based XRPL Cold Storage OS. From there they can “Store keypairs and secrets, safe and encrypted, and compose and sign transactions offline and submit transactions air-gapped

    There is a Signing platform, an application, where interested parties can interact with the XRP ledger straight from their Android or iOS smartphones. The application has DEX and Multi-sign support.

    Xpring describes itself as a proverbial spring and it is an initiative by Ripple that “invests in, incubate, acquire and provide grants to companies and projects run by proven entrepreneurs.”  Ethan Beard, the SVP at Ripple and Former Director of the Facebook Developer Network at Facebook heads the team. Some of the projects that are reaping benefits from Xpring investments include Coil, founded by Stefan Thomas—the founder of the InterLedger Protocol (ILP) who was at one time a team member of Ripple, Thomas McLeod, who is creating Omni, a market place that use XRP as a settlement currency and Scooter Braun, the brains behind SB Projects.

  • 02:09
    Status Launches a ‘Tap-to-Pay’ Crypto Hardware Wallet

    Status, the ethereum messaging app and mobile browser startup, has relaunched their cryptocurrency hardware wallet under a new name: the Keycard.

    Developed entirely open-source, the wallet will first be distributed to interested blockchain developers for free and later sold directly from Status’ website at $29 apiece.

    The hardware, as highlighted by Status project lead Guy-Louis Grau, is “the exact same shape as a Visa card you have in your wallet today.”

    Speaking to CoinDesk, Grau added:

    “[Keycard] is contactless. It’s going to work with your mobile crypto wallet. You’ll just need to tap your Keycard on a mobile device to sign transactions. Functionally speaking, it’s really a hardware wallet but it works with mobile.”

    According to the firm, the Status Keycard is compatible with several cryptocurrencies including bitcoin, bitcoin cash, litecoin, XRP, ether and all ethereum-based ERC20 tokens.

    The first batch of Keycards is expected to arrive in the mail to interested parties by early March. but according to Grau. they won’t be user-facing initially.

    “We’re not announcing a full end customer product with Keycard,” Grau said. “We’re releasing a tool actually. That’s the way it should be seen. At this stage, it’s a tool for third-party blockchain projects that want to secure their application with a cost effective hardware wallet.”

    Adding that the integration of Keycard into Status software for end-users specifically will be released later this year, Grau also explained that Status, unlike most other cryptocurrency wallet manufacturers, wants to encourage people to build the card themselves.

    And in order to reduce the barrier to entry for blockchain projects to do so, the Keycard API – which is the codebase integrating with hardware to perform a number of different applications such as storing private keys, signing transactions, tap-to-pay, and more – runs on common, standardized technology that has been around for over 15 years.

    “Our software is open and runs on Java Card so if a third-party project wants to build its own Keycard, they would use our open-source software and they just need to have it run on the Java Card – which is available through hundreds of manufacturers since it’s such a common hardware,” highlighted Grau.

    Indeed, emphasizing that the security of any cryptocurrency hardware wallet “is tightly linked with openness,” Grau added:

    “Security should be able to be assessed by anyone. That’s why software and hardware needs to be open. That’s the first and most important thing. And then as much as possible, use widely used hardware platforms.”

    Status’ Keycard is now available for developers to review on Github and can also be ordered for early delivery next month through the official website.

  • 01:49
    Iran: Still Waiting for the Blockchain Revolution

    From Jan. 29 to 30, Tehran hosted the eighth annual conference on Electronic Banking and Payment Systems, which was promoted by the Monetary and Banking Research Institution, the research arm of the Central Bank of Iran (CBI). Among the announced topics under the theme of the “Blockchain Revolution,” it was the unveiling of the Iranian plan for a national digital currency that, as a matter of fact, remained rather vague after it was presented during the conference.

    In his inaugural speechAli Divandari — the director of the Monetary and Banking Research Institution — stressed that “the realities of blockchain technology should be accepted.” Also, many contributions from Iranian and foreign experts focused on the opportunities that fintech and blockchain could potentially open for the Iranian financial and banking industry.

    In fact, blockchain seems to be a thrilling topic for Iran: Before the end of the meeting, four Iranian banks announced that they have developed a gold-backed cryptocurrency called PayMon, aiming to tokenize part of their reserves.

    Besides, immediately after the conference, CBI stated its overall approach, favoring to recognize and to authorize cryptocurrencies, ICOs, exchanges and mining. However, in the meanwhile, the central bank reiterated that using cryptocurrencies as methods of payment inside the country is still prohibited. Therefore, the road map toward a national digital currency and the future regulation of cryptocurrencies in the country remain uncertain.

    For instance, Vice Governor of Information Technology for the Central Bank of Iran Naser Hakimi explained that the new policies of the CBI on the issue “are still in the queue for review […] given the many engagements that decision makers have in this regard,” expressing the hope, nevertheless, to unveil them by the end of the year.

    Mohammad-Javad Azari Jahromithe minister of communications and information technology, on the other hand, stressed some of the issues that could arise in a process still managed by the state’s central government:

    “Blockchain’s essence is decentralized and distributed. However, the Central Bank is the centralized institution for regulating banking, so blockchain is structurally in conflict with the Central Bank. And we cannot expect the central bank to promote it, but the central bank should find its way.”

    As a matter of fact, the end of the January conference is just the last step in a long and somewhat controversial walk of approach to cryptos that has involved Iran in the last couple of years.

    Islamic Republic of Iran's Banking System / 2018

    Cautiously exploring cryptos

    The interest of the Iranian authorities with regard to the opportunities and threats of cryptocurrencies dates back to at least the winter of 2017-18. For instance, during this period that saw an upward trend in terms of Bitcoin (BTC), the secretary of the presidential commission in charge of internet-related issues — named the Supreme Council of Cyberspace (SCC) — Abolhassan Firouzabadi, showed an attitude that, if not favorable, at least was not hostile toward digital currencies, putting forward the possibility of the state monitoring and regulating them, while the economic commission of the Majlis-e-Shuray-e Islami (the Iranian parliament), urged the CBI and the Ministry of Communications and IT to promote research, in view of the fact that the “advantages and disadvantages of Bitcoin haven't been surveyed comprehensively.”

    In this uncertain context, the main concerns were related to the risks involved in high volatility and in the “ungoverned” nature of cryptocurrencies: At the end of 2017, and during the first months of 2018, the stance of different Iranian agencies and government bodies was one that aimed to forbid involvement in the cryptocurrency market of entities such as brokerage firmsexchange shops and the whole banking system — that is, until a new regulatory scheme would guarantee CBI’s control of blockchain-based assets. All these measures together brought about a sort of ban on the trade of cryptocurrencies for all the private citizens, at least using official channels based in the country (it is important to note that Iranian citizens are usually banned from using international online exchanges).

    Besides worries that Teheran’s decision-makers share with many governments around the world, the Iranian attitude toward cryptocurrencies could not ignore the vali-e-faqih, meaning the authority to have the last word in every controversial political issue, which, since the 1979 revolution, the Republic of Iran grants the Islamic jurists.

    In January 2018, Seyyed Abas Mousavian, a member of the central bank's Islamic Jurisprudence Councilexpressed doubts about “sharp fluctuations” and a “lack of transparency in cryptocurrencies.” By April, his doubts had became a verdict against crypto assets, criticized as “not halal” because they are not based on any real asset and because “they cause faithful and believer society's wealth goes [sic] to unbelievers' pocket, paving the path for their dominance in the society.”

    In January 2019, the news headquarters of eighth annual conference on Electronic Banking and Payment Systems quoted the most recent authoritative statements by Mousavian:

    “I do not consider Bitcoin as money. Because money must have consistency to be able to value other assets based on it. An item whose value is shifted 19 times over the course of one year indicates that the nature of this so-called money is not capable of being used as a benchmark for measuring assets. [...] I sometimes call it a mysterious money. It's coded, and mysterious at the same time, because its dimensions are not known.”

    A virtual coin against the Great Satan

    In spite the criticism, cryptocurrencies could exist in terms of both of monetary orthodoxy and of Sharia. Consequently, Iranian authorities — or part of them, at least — are looking to digital money as a potential solution for some of the problems the country is facing. Among the strongest supporters of an Iranian way to blockchain is Azari Jahromi. An information and communications technology engineer and manager, he was born in 1982 and he was appointed as the minister of communications and information technology in August 2017, becoming the youngest member of the cabinet lead by President Hassan Rouhani.

    ICT in Iran (1998-2017)

    Committed to a more progressive approach to the development of the internet in Iran, since February 2018, Jahromi has sponsored the idea of a national digital currency that, as Cointelegraph has already noted, presents strong analogies with the Venezuelan Petro. The advancement of the road map was repeatedly announced throughout the last year, notably in AprilAugust and November.  

    Last summer, IBENA, the news agency affiliate to the CBI, disclosed the main features of the future national digital currency as:

    “1. It is rial-backed. [...]

     2. The issuer is Central Bank of Iran and the volume of issuance depends on the bank's decision.

     3. Iranian cryptocurrency has been developed under private blockchain infrastructure and cannot be mined.

     4. The infrastructure is supposed to be as an ecosystem available for Iranian banks and active companies in cryptocurrencies area.”

    During the conference on Electronic Banking and Payment Systems, Jahromi reported that the CBI is presently testing five different blockchain projects.

    However, despite being a simple tool in the hands of the banking system, the upcoming Iranian cryptocurrency could become another element in the diplomatic confrontation between Iran and the United States, which has escalated since the beginning of May 2018, when U.S. President Donald Trump unilaterally rejected the Joint Comprehensive Plan of Action, the deal — commonly known as the Iran nuclear deal — signed in 2015 by the U.S., Iran, the United KingdomFrance and Germany to freeze both Iranian nuclear plans and the subsequent international retaliation.

    A soon as the U.S. reimposed sanctions on any foreign company that continues to do business with Iran, the plan for a national digital currency appeared as a useful tool to facilitate the international transfer of value, even in the context of an embargo. Iranian sources reported that, last May, President Rouhani received advice from Chinese entrepreneur Bobby Lee in a Tweet saying:

    “If you really want to threaten President Trump, you should stop using fiat money.”

    However, it is more likely that the whole project for a national digital currency, since its beginning, has taken into account the possibility of worsening relations with the U.S. administration.

    U.S. sanctions coming back into effect on some Iranian financial institutions at the beginning of November 2018, for instance, caused the Belgium-based SWIFT financial messaging service to disconnect some Iranian banks: Iranian researchers are positive that the new central bank-issued digital currency or other blockchain-based solutions could compensate for the rising isolation from the traditional international financial network.

    As a matter of fact, a digital coin running on a private, state-controlled blockchain, without any economic incentive to sustain the network, would likely encounter very limited opportunities for wide adoption. However, the Iranian press recently reported ongoing negotiations with eight countries — SwitzerlandSouth Africa, France, the U.K., RussiaAustria, Germany and Bosnia) to carry out financial transactions in cryptocurrency: If and how the “digital rial” would take part in these is unclear. However, the news media stressed how many expectations Iran has with regard to blockchain technology as a way of circumventing sanctions.

    A hint about how serious the Islamic Republic is in terms of its “going crypto” comes from the reaction of U.S. authorities. Even if no real evidence supports the claim that, in July 2018, the U.S. government confiscated about 500 BTC belonging to Iranian citizens — an action which seems rather infeasible from a technical point of view — it’s true that, since last October, the U.S. Financial Crimes Enforcement Network (FinCEN), a bureau inside the Department of Treasury, warned “virtual currency administrators and exchangers” about the risks of being involved in illicit activities fostered by Teheran’s regime.

    Eventually, at the end of the year, U.S. Sen. Ted Cruz and Rep. Mike Gallagher introduced a bill in the U.S. Congress (Blocking Iranian Illicit Finance Act) encompassing articles aimed to forbid U.S. citizens from engaging in any operation involving a hypothetical Iranian digital currency. It also introduced sanctions on foreign individuals dealing in it.

    BTCs flight away

    While Iranian authorities are looking to cryptocurrencies as a possible tool for dodging the recently-imposed sanctions, Iranian citizens resort to them in order to overcome the fragility of their own domestic currency. The crisis of the Iran nuclear deal, in fact, leading to a severe devaluation of the rial, made the option to convert part of their savings into Bitcoin attractive for many Iranians.

    Immediately after the U.S. reimposed the sanctions, Iranian sources reported that about $2.5 billion left the country as cryptocurrencies.

    As a matter of fact, to buy or to own cryptocurrencies is not forbidden in Iran, even if trading in crypto asset is not allowed for any legitimate business, and the very nature of crypto remains suspicious from many points of view — not least the religious one. On the other hand, mining has been accepted as an industry since September 2018, a sign of an evolving, yet confusing framework.

    No official figures exist that measure how widespread cryptocurrencies are in Iran. However, the U.S. FinCEN defines the use of virtual currency in Iran as “comparatively small,” estimating transactions to be about $3.8 million worth per year. Besides, some proxies have emerged from data gathered by the website Coin Dance, on the basis of the weekly volumes of BTC recorded by Localbitcoins. This confirms a rather low level of diffusion, alongside some peaks during the periods of maximum concern about the sanctions and the value of the rial (April-May, September-November 2018). In any case, the highest volumes matched the global highs of the December 2017/January 2018 rally and never surpassed 80 BTC per week.

    Weekly BTC / IRR Trade

    Even if available data is not complete, Western sources report that, since May 2018, Iranian citizens are encountering enormous difficulties converting their savings into foreign currencies or sending them abroad (for instance, to relatives living in less-troubled countries): In such a context, Bitcoin and other cryptocurrencies would appear as a valuable life jacket, despite their high degree of volatility during the last few months.

    Iran is perhaps experiencing a phenomenon called hyperbitcoinization, an answer that other countries — such as VenezuelaZimbabweTurkey and Argentina — proposed for the rapid inflation and economic crises they are experiencing, turning to crypto as a store of value and a means of exchange. As a matter of fact, BTC would appear as a better store of value than rial, even in one of the blackest periods for the crypto market (to get a correct figure, it is necessary to consider the actual exchange rate on the free market, rather than the official fixed rate).

    Effectiveness as Store of Value, BTC and Iranian Rial

    It is therefore possible to read some of the interventions of the Iranian authorities on the topic of cryptocurrencies as an attempt to bring under control a possible competitor to the national currency or a “hole” in the regulations preventing capital flight. The nongovernmental association Iran Blockchain Community (IBC) argued that the measures introduced by the government since April 2018 to prevent the private sector from accessing cryptocurrencies cut the trade in Bitcoin in Iran from 1,000 BTC daily to 300; in the opinion of Sepehr Mohammadi, IBC’s president, this deprived the country of a valuable asset in regard to future economic development and of a useful tool to counter sanctions.

    Cryptos, oil, caviar and Telegram

    Iran’s attitude toward cryptocurrencies is somewhat similar to the approach of other countries, such as Venezuela and Russia: Both Petro and a CryptoRuble were announced during October and November 2017, the same time when Iran revealed its interest in cryptos. All the envisaged new coins are digital currencies issued and controlled by a national bank, and all of them are somehow connected to a period of economic or diplomatic weakness. Besides this, it is possible to identify some direct connections, as Petro enjoyed — or pretended to enjoy — Russian support and, in November 2018, the Russian Association of the Crypto Industry and Blockchain signed an agreement with Iran Blockchain Labs.

    Finally, all these three are among the largest and oldest global producers of oil, with Iran and Russia also sharing primacy for the best caviar in the world. It should be noted, however, that all three countries scored very poorly on The Economist Intelligence Unit’s Democracy Index in 2018, with Venezuela ranked 134th, Russia at 144th and Iran placed at 150th.

    The last point is possibly the most important to understand in terms of the mixed attitude these countries show toward cryptos: For them, some of the typical features of digital currencies would be a resource to oppose the isolation measures imposed by the international community — mostly by the U.S. — while cryptos are viewed rather suspiciously when the same features are used by their own citizens to avoid domestic controls, as the laborious development of both Russian and Venezuelan regulations demonstrates.

    The analogies could also include the similarity of the bans imposed both by Russia and Iran on the crypto community's favored instant messaging platform, Telegram, which both countries accused of trying to create a completely uncontrolled financial system through its ICO.

    In Telegram’s case, on the other hand, this shows the complexity and potential dynamism of the Iranian context. The ban was, as a matter of fact, promoted by the conservative wing of the Iranian establishment — the so-called Principalists — which controls the religious-inspired judiciary. However, the ban had very limited success and the hard liners themselves returned to Telegram by the end of 2018. Even if the official stance toward the app remains harsh, the Iranian civil society showed it was sympathetic with the more reform-oriented wing of the government, gathering around President Rouhani — a pattern that could repeat itself on other issues relating to crypto and blockchain. As technology-friendly Minister Azari Jahromi commented, referring to Telegram’s failed ban:

    “Victory is not achieved by blocking.”

  • 01:16
    Kaspersky Lab: 13 Percent of People Using Cryptocurrency

    Cybersecurity firm Kaspersky Lab announced on Wednesday that it believes slightly more than 10 percent of people have made an online purchase using cryptocurrency.

    In a report covering online finances, the company said that 13 percent of the people it surveyed had used cryptocurrency to make an online purchase.

    Asia Trading Summit – The Leading Investment Event in China

    “Despite a fall in cryptocurrency prices, there is still a strong desire for digital transactions amongst consumers,” said Vitaly Mzokov, Head of Verification at Kaspersky Lab. “Our consumer research has found that 13 percent of people have used cryptocurrency as a payment method, which was surprising to see. However, there are also real dangers associated with online exchanges as they are still in their infancy.”

    As Mzokov said, this result is indeed surprising. But neither the firm’s report, nor its subsequent press release, indicate what classifies as an online purchase.

    Crypto to Crypto or Crypto to product?

    This makes things interesting because, if the firm classified buying cryptocurrency using cryptocurrency as using “cryptocurrency as a payment method,” then its 13 percent statistic is fairly meaningless.

    Finding data on what percentage of cryptocurrency is purchased with another form of cryptocurrency isn’t easy. Given how many coins can only be purchased using one type of cryptocurrency, however, it wouldn’t surprise this author if a substantial proportion of cryptocurrency payments were simply exchanges between different sorts of cryptocurrency.

    Having said all of this, if the statistic does not include those sorts of exchanges, then it is an astonishing figure.

    Some firms have started to accept cryptocurrency payments but it certainly remains an anomalous option for prospective buyers.

    It’s also worth noting that the Kaspersky survey covered 2018. Since the price of cryptocurrencies crashed at the end of the year, it would be interesting to see how cryptocurrency spending was spread out across that 12 month period.

    In the meantime, cryptocurrency payments are becoming progressively more popular. Retail stores, for example, are increasingly able to accept cryptocurrency payments via purpose-built machines.

  • 00:08
    Coinbase Wallet to Feature Private Key Backup on Google Drive, iCloud

    Coinbase Wallet users will soon be able to back up their private keys on personal cloud storage platforms Google Drive and Apple’s iCloud.

    The San Francisco-based cryptocurrency exchange announced the news in a blog post Tuesday, saying that, in case users misplace their private keys or lose devices, they can use the new feature to back up their 12-word recovery phrase to avoid losing access to funds held in the app.

    With cloud storage backup, users will have to only remember a password to recover their funds, Coinbase said, as the private keys would already be safely stored. For added security, the firm still recommends storing the passphrase manually after activating the cloud backup service.

    The backup feature is encrypted with AES-256-GCM encryption and accessible only by the Coinbase Wallet mobile app, Coinbase said. It can only be decrypted using the password.

    The exchange further said that neither it nor cloud service providers would be able to access to users’ passwords or funds at any time, as passwords would be in the sole possession of users.

    Users wanting to use the feature will have to opt in when the Wallet app gets updated in the “next few days.” Cloud backup can be enabled at any time from the Settings menu, by selecting “Recovery Phrase” and following the prompts, according to the post.

    Coinbase said it’s also planning to add support for other cloud platforms in the future, besides iCloud and Google Drive.

    The news is getting a certain amount of pushback on social media, as people raise the risks of storing vital keys on the cloud.

    One Twitter user said:

    “This is IMO good but remember 1) Cloud storage is compromised all the time, so the password matters 2) if you need to remember your password, where are you storing it? How secure is that location? How redundant?”

    Others offered a more cynical take. Again on Twitter, a joke poll asking if people would save their private keys in the cloud using the feature had 100 percent saying “no.” The poll was closed with two votes.

    Last week, Coinbase announced bitcoin support for the Wallet app on iOS and Android.

1week ago, 13 Feb, Wednesday
1week ago, 12 Feb, Tuesday
  • 19:18
    Two Public Pensions Anchor Morgan Creek’s New $40 Million Venture Fund

    Two public pension funds are dipping their toes into the world of crypto venture capital.

    “As far as we know, nobody has raised money from a public pension,” Anthony Pompliano, partner at Morgan Creek Capital, told CoinDesk in an interview.

    Morgan Creek, an asset manager focused on institutional clients and family offices, announced Tuesday a new crypto-focused venture fund with $40 million invested. The two public pensions anchoring the fund are Fairfax County, Virginia’s Police Officer’s Retirement System and Employees’ Retirement System.

    Speaking to the conservative bent of those involved, the new fund’s investors also include a university endowment, a hospital system, an insurance company and a private foundation.

    “Blockchain technology is being applied in unique and compelling ways across multiple industries,” Katherine Molnar, the chief investment officer of the Fairfax County Police Officer’s Retirement System, said in a press release. “We feel it is important to be opportunistic and are excited to participate in this emerging opportunity, due to the attractive asymmetric return profile that it represents.”

    As of their most recent financial statements, the police pension fund has $1.45 billion in assets, while the fund for Fairfax government employees has $4.25 billion. While both come from the same geographic area, they are separate funds with separate investment committees, Pompliano noted.

    The size of the two funds helps to illuminate the potential of bringing public pensions into blockchain investing. Such entities can take large positions in crypto funds using a very small portion of their assets under management.

    We’ve previously seen major pension funds discuss crypto as an alternative investment strategy. Most notably, the California Public Employees Retirement System (CalPERS) considered it as far back as 2016. In fact, a retirement system in Ontario, Canada, took part in an investment in decentralized marketplace Open Bazaar through its own VC firm.

    Still, this is very early days for pension funds picking up opportunities focused on cryptocurrency.

    Selling pensions on crypto

    Morgan Creek’s new fund will primarily make seed investments in equity, Pompliano explained, though in certain limited cases it will also invest in token-based projects that don’t create equity opportunities but do have cash flow. It will also hold a small amount of key cryptocurrencies.

    Public pensions face an uphill battle meeting their obligations over the coming years, Pompliano said, finding that such organizations are looking to diversify beyond traditional stocks and bonds. That’s how the Morgan Creek team pitched taking a small position in the blockchain industry.

    “The belief is this gives them great exposure to what we believe are some of the best risk-mitigated opportunities in a nascent industry,” Pompliano said.

    The fund has already closed deals in some of the most established names in crypto, including CoinbaseBakktBlockFiTrustTokenHarbor and Good Money, among others.

    “You can take a small amount of capital, you can put it in a nascent industry, you can manage your risk correctly but also get exposure to true innovation,” Pompliano explained.

    Morgan Creek’s new fund will primarily seek opportunities in equity, but it’s open to some small number of security token opportunities that provide cash flow, so long as they fall under the U.S. Securities and Exchange Commission’s regulation D, which allows a smaller company to sells securities that are exempt from the larger filing requirements of a traditional public offering.

    It’s been key, Pompliano explained, to be thoughtful about an investment portfolio that makes sense for well-established investors with a long view.

    Even still, it took time to find executives in the pension space willing to be very early – a point Morgan Creek partner Mark Yusko has spoken to. In a statement he said:

    “We are proud to partner with these investment professionals who have shown an ability to be forward-thinking and innovative.”