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Bitcoin analyst Brian Kelly points out three major reasons why the current bear market is not a reason to hold a funeral for the cryptocurrency.
To back up his statement, Kelly provided three key factors. First, he pointed out that the market sentiment is “approaching lows,” implying that a trend reversal is likely to follow.
Bitcoin price chart. Source: Cointelegraph Bitcoin Price Index
Despite that, Kelly called attention to the fact that Bitcoin is still trading at the same level as back in November 2017, whereas a year ago its value was 60 percent lower - around $2,500.
Next, Kelly mentioned the recent news that Japan’s Financial Services Agency has sent out business improvement orders to 6 domestic exchanges. He pointed out that while in the short run it’s going to be “a little tough,” in the long run it will help make the exchanges more “robust.”
Third, Kelly brought up the announcement by Mt. Gox to reimburse its customers and begin civil rehabilitation proceedings, following the $473 million hack in late 2013 and the resulting bankruptcy. Mt. Gox was considered to be the largest hack in the history of crypto, until this year’s $534 million Coincheck hack.
On June 5, Cointelegraph reported that Bitcoin has been declared “dead” for the 300th time, according to the 99Bitcoins “obituary list.” By press time, the cryptocurrency has “died” 315 times, with 69 “deaths” taking place this year alone.
Interview with Adrian Hasler, head of the Liechtenstein’s government about new blockchain regulations, crypto banking and ICOs.
Adrian Hasler, the Prime Minister of Liechtenstein, is certain that blockchain technology will have an impact on a variety of areas and is preparing a new blockchain law to provide essential requirements in order to establish a regulatory base for blockchain businesses.
The blockchain law — so called Blockchain Act — was announced by Adrian Hasler at this year’s Finance Forum on March 21. According to Adrian Hasler, the new act is about integrating current business models in regulatory terms in order to give companies and their clients a legal base. The planned act is expected to be circulated for consultations this summer.
Cointelegraph spoke with the prime minister about blockchain regulation, the politics regarding this technology and cryptocurrencies, ICOs and the business climate in Liechtenstein.
About Lichtenstein’s blockchain law
Cointelegraph: In your greetings at the Finance Forum you announced a new blockchain law. What makes this regulation special?
Adrian Hasler: We see great potential in blockchain technologies that go far beyond what we can observe today. Our law is designed to serve as the legislative basis for such a token economy and thereby provide regulatory certainty for all participants and overall further positive development [in this space].
Blockchain can serve as an important base for a variety of economic applications, covering not only payment transactions but broader financial solutions, industry use cases and general applications.
CT: Could you specify the implications of such a regulation when put into place for blockchain businesses and the average citizen? How can they profit from it?
AH: We expect many more rights and assets put into blockchain systems in the future. One example: in order to effectively capitalize on the advantages of these efficient transaction systems we need a lawfully secure connection with the physical world, which we aim to achieve with state regulatory oversight. This will create trust, which is important for blockchain businesses and citizens.
CT: Why is blockchain an interesting topic for Liechtenstein?
AH: We have dealt with possibilities and risks associated with blockchain in the past. We view some opportunities here but also certain challenges for all economic sectors, especially the financial sector. It is important for the state of Liechtenstein that the government and authorities deal intensively with the consequences in practices to be able to treat companies fairly and competently. We aim to actively accompany this development.
About the future of cryptocurrencies
CT: Are you optimistic about the future of blockchain and cryptocurrencies?
AH: We observe a remarkable, globally oriented, and well-educated scene that is very much involved in the advancement of blockchain technology, and we believe that we are only at the beginning of an exciting and long-term development.
Cryptocurrencies for me represent merely a fraction of possible use cases of blockchain in a tokenized economy. I believe we have to distinguish between payment traffic, stable coins representing legal means of payments and self-sustaining cryptocurrencies. It goes without saying that payments within a token economy are executed via blockchain. In this context, it can be assumed that stable coins, which are linked to legal currencies, will play an important role.
Cryptocurrencies can play a significant role in the future once they become widely accepted.
CT: Do you see an interest in blockchain projects and demand for cryptocurrencies from the citizens of Liechtenstein?
AH: Liechtenstein accounts for a relatively large blockchain scene with a very big interest in blockchain projects and cryptocurrencies. For a layperson however, it seems relatively hard to accurately assess the risks of such an investment. Partaking in an ICO alone can be quite difficult. For this reason, there are increasingly more financial products entering the market that make investments easier. However, these are currently only approved for qualified investors.
CT: The Liechtenstein family bank Bank Frick allows direct investments in cryptocurrencies. Do you support the idea of crypto-banking as an alternative to traditional banking?
I really do not see a contradiction between crypto banking and traditional banking.
AH: I rather expect to see an integration of blockchain technology and cryptocurrencies in the financial sector. I do applaud this development because it introduces high standards und legislative security for investors of the traditional finance sector on blockchains. Of course, we need to make sure that the advantages of the crypto world are sustained as best as possible.
CT: Are you yourself dealing with cryptocurrencies or investing in blockchain projects?
AH: No, in my function as head of the government, I keep a low profile here.
About Liechtenstein as a location for ICOs
CT: Liechtenstein has become a favourite location in the world, to start ICOs. What are the reasons?
AH: One important reason is the openness of the authorities and the government for the new technologies and the subsequently acquired knowledge on how to use them. Surely it helps that you have very little response time as a company. It is relatively quickly possible to schedule a meeting with the ministry of the FMA [financial authority of Liechtenstein]. Furthermore we introduced a so-called regulatory laboratory at the FMA, which is a competent contact for innovative companies. Especially Fintech and blockchain companies seem to use this option intensively.
CT: Liechtenstein is subject to certain European Union regulations. Have those furthered the advancement of innovative ICOs or rather hindered it?
AH: Liechtenstein is a member of the European ecosystem und complies with all EU regulations in his financial service area. This is why companies in Liechtenstein also benefit from the so-called ‘EU-Pass’, hence the access to the European market. In our experience, however, it depends heavily on the specific design of an ICO, whether financial market law issues are affected. To my knowledge, many ICOs in Liechtenstein have already been successfully implemented within the framework of the financial market rules.
With the growing complexity of the network and competition on the market, smaller miners give way to mining farms, specialised in industrial mining.
The mining industry is probably the oldest activity related to cryptocurrency. It all began in 2009, when Satoshi Nakamoto generated the first block on the Bitcoin network.
Today, mining is an entire industry which spans 114 countries around the world, and restlessly ensures the functioning of the global network of cryptocurrencies. According to Blockchain.info analytics, the total profitability of the market over the past year comprised $4.1 billion. This figure doesn't include the income earned from the sale of mining equipment, which is estimated to reach some $3-4 billion, as is the case of industry giant Bitmain.
Along with the popularity of mining, the complexity of the Bitcoin network also grows. Despite the fact that 80 percent of Bitcoin has already been mined, according to experts, the entire supply will be exhausted only by 2140. The situation is explained by the fact that the calculations necessary for the production of cryptocurrency are constantly becoming more complex, and the mining process takes more time and energy.
At the same time, between 30 and 60 percent of the profit gained from mining is spent on energy costs. Figures show that to maintain the entire computer infrastructure working with Bitcoin, it would take 30 nuclear reactors running at full capacity.
Despite the reduction in the reward for generating blocks, a halving in the mining reward size from 25 Bitcoin to 12.5 Bitcoin and the increasing complexity of mining, miners can still receive up to $20 million per day in transaction confirmations. This staggering number attracts new players to join the ‘digital fever’ — and the equipment manufacturers to invent more efficient ways to extract Bitcoin.
In the summer of 2017, with the growing popularity of cryptocurrencies, market demand grew not only for professional equipment, but also for graphics cards (GPUs). In 2017 alone, more than three million discrete graphics cards were purchased for more than $776 million, Jon Peddie Research states. PC gamers were unable to purchase top model GPUs, which had sold out to miners before they even arrived on shelves, and the manufacturers of AMD and Nvidia cards fixed the growth of profits.
Image source: Wccftech
In the second quarter of 2017, Nvidia increased revenues by more than 50 percent, compared to the second quarter of 2016, reaching $251 million. AMD revenue for the same period increased by 18 percent — $1.2 billion. Following the fall of the market, interest in mining also decreased — AMD and Nvidia are both expecting a decrease in revenues in the second quarter of 2018.
At the same time, mining is reaching industrial proportions. Around the world, miners have united and created entire plants and hangars, and thousands of GPU cards are assembled into giant farms with peta hash capacities. Some companies repurpose former plants and invest millions of dollars into building infrastructures for mining. On June 6, the mining company CoinMint announced it plans to open a Bitcoin-mining plant in a former aluminium smelting factory in upstate New York, near the U.S.-Canada border. Supported by the U.S. government, CoinMint aims to create 150 jobs for the next 18 months and allocate $700 million to revamp Alcoa's 1,300 acre plant.
At the same time, large players find more sophisticated methods of reducing energy costs and increasing equipment productivity — from building farms in caves to launching miners to space. Who are these industrial miners? Cointelegraph invites you to visit the five largest farms in the world.
Location: Washington, U.S.
Hashrate: 1.3 PH
The emergence of new players in young and profitable niches is often difficult to predict. Billionaires are those who, until recently, repaired computers or worked in an electronics store. One of them, Dave Carlson, began to mine with an ordinary GPU and now owns the largest mining farm in North America.
A software specialist and entrepreneur with 10 years of experience decided to take up mining after having faced financial problems in his previous job at an advertising company. Founded in the basement of his own house in 2012, the MegaBigPower company, which was later renamed into GigaWatt, turned into a multimillion-dollar business in just one year.
Today, the farm is situated in a former industrial warehouse. However, its exact location is not disclosed, similar to other farms, where owners prefer not to attract the attention of public authorities.
Image source: WSJ
As the company expands, Carlson estimates his monthly operating expenses, including salaries for 15 employees, at more than $1 million. The final figure of 1.3 peta hash, in his words, pays it off in full. Moreover, having managed to attract additional investments, the entrepreneur started production of mining equipment based on Bitfury chips for sale to other Bitcoin enthusiasts.
Carlson’s business is apparently going well. Among the factors that contributed to his success, Carlson specifies not only a desperate desire to escape poverty, but also the luck to have low electricity prices. Washington state, where the company is based, offers some of the cheapest power in the country with just $9.56 per kWh for individuals and $8.42 per kWh for businesses.
Hashrate: 1000 GH
Another owner of a truly large mining farm is Genesis Mining. Initially, their mining capacity was located in Bosnia and China, but today they are concentrated in Iceland and Canada. The cold climate — combined with cheap electricity prices — makes these countries attractive for mining cryptocurrency.
It is believed that Genesis mining farms are the largest consumer of electricity in Iceland. The electricity consumption and cooling issues are usually kept secret by large miners, so as is the exact location of their farms. Genesis, like Carlson and others, in accordance with their security policy, does not disclose the exact geographical location of its mining farms.
Image source: Bitcoin Wiki
Dalian mining farm
Location: Dalian, China
Mined monthly: 750 BTC
Electricity costs monthly: $1,170,000
Hashrate: 360000 TH*
*Given the average Bitcoin network hashrate of December 2017
China is known for its numerous plants for the manufacture of video cards and ASIC miners. Consequently, the miners in China have the advantage of purchasing equipment at lower prices. The delivery of equipment is cheaper — or even absolutely free.
China is amongst countries with the lowest price for electricity, along with Venezuela, Taiwan, and the Ukraine. The most important factor in this matter is the decision of the Chinese government to encourage the industrial production of cryptocurrency by reducing the price of electricity consumption for the official owners of such farms.
China has a huge population, which increases job competition. In the country, industrial cities have existed for a long time, with workers living without visiting the outside world at all. The same is practiced at mining farms, where system administrators are ready to live in dormitories near a farm for a relatively small salary, ensuring uninterrupted production of cryptocurrencies.
All these factors create a fertile ground for the deployment of the largest mining farms, like in Liaoning province. Its small city of Dalian is the center of mining in China and, probably, the whole world. It is a three-story mining farm with a specially designed ventilation system. Currently, the farm in Dalian accounts for more than three percent of the hash rate of the entire Bitcoin network.
Image source: Bitcoin Wiki
Another Chinese province, Sichuan, launched an industrial farm near a hydroelectric power station. Since 2016, the capacity of the farm has grown almost threefold and reached 12 PH. Other provinces, throughout China, are also not without their own large mining farms.You can easily understand, when such a farm is nearby, because of the piles of obsolete mining equipment.
Image source: Politico
Swiss mining farm
Launch year: 2016
Location: Linthal, Switzerland
The largest mining farm in Switzerland is located in the small village of Linthal in the eastern part of the country. Its owner, Guido Rudolphi, has already run a mining farm in Zurich but found the operating costs too high. After almost two years of searching, Rudolphi opted for Linthal, which offers the most attractive prices for electricity in the country.
Image source: SRF.ch
The new farm, located in a former factory building, is considered the largest in Switzerland. Although the issue of cooling processors still remains relevant, Rudolphi insists that the possible financial benefit is not decisive for him. The world needs Bitcoin more for political reasons, he believes. The owner of the farm compares the cryptocurrency with the internet of the 1990s, when many people looked at this phenomenon with a great deal of skepticism.
Mined monthly: 600 BTC
Hashrate: 38 PH
Russia is also among the countries in which large mining areas are located. The largest of these is believed to be located near Moscow, though the exact location of the farm is not disclosed. The power of the Moscow farm allows for the mining of approximately 600 Bitcoin a month. The currency is generated by 3000 Antminer S9 ASIC-miners and, for this, a performance of about 38 PH per second is needed. To cool this amount of equipment, modern ventilation from Iceland is used. The electricity expenses are over $120,000 each month, Slavorum.org states.
Looking to the future
Major mining farms began to appear only a couple of years ago. In 2014, these were farms of enthusiasts. Today, mining farms consist of large technological infrastructures with a regular staff of professional employees, like GigaWatt, Genesis Mining or Coinmint, which combine into agglomerates at the site of former factories and hangars. With the increased complexity of the network and the declining prices of cryptocurrency, individual miners are pulling out. However, those players who managed to deploy large-scale infrastructures will be able to provide an ideal balance of productivity and low cost.
Cardano co-founder tweets that Wall Street could infuse “tens of trillions dollars” into the crypto space.
What's often missed by the cryptocurrency is going to die broken record media is that after the next wave of regulation, wall street is showing up to the party with all their locked up capital. That's tens of trillions of dollars entering the space eventually. Future is bright— Charles Hoskinson (@IOHK_Charles) June 21, 2018
Cardano, which is currently ranked 8th on Coinmarketcap, has a market cap of around $3.5 billion. Charles Hoskinson was also one of the founding members of Ethereum (ETH), crypto startup Invictus Innovations, and crypto tech company IOHK.
When asked by a commentator what exactly the crypto community is building, Hoskinson answered “an entirely new world:”
An entirely new world— Charles Hoskinson (@IOHK_Charles) June 21, 2018
The intersection of cryptocurrency and Wall Street has been welcomed by those who also see a potential influx in capital. In mid-May, cryptocurrency wallet and exchange Coinbase released a new suite of products designed to attract institutional investors by relieving security and regulatory compliance concerns. Speaking about the product release, the VP of Coinbase referred to “$10 billion” of Wall Street money that now had the potential to enter the market.
The “trillion” value has also been bandied around before, as Dan Morehead, CEO of $1 billion crypto hedge fund Pantera Capital said in April that a $40 trillion crypto market is possible, in part due to Wall Street’s increasing interest in clearing crypto trades.
EOS Core Arbitration Forum allegedly orders the freezing of 27 accounts with the “logic and reasoning” for the order to be posted later.
EOS block producers (BPs) have reportedly received an emergency order to refuse to process transactions for 27 accounts, according to a tweet posted yesterday, June 22.
The authorities in EOS just instructed the block producers to censor transactions from 27 accounts with no reasons given.— Ferdous ฿hai (@ferdousbhai) June 22, 2018
“the logic and reasoning for this order will be posted at a later date"
ggwp 😂$EOS pic.twitter.com/60yRPqCAvh
Twitter user @ferdousbhai, who tweeted the screenshot of the alleged EOS Core Arbitration Forum (ECAF) order, wrote in the comments that he obtained the image from a private Telegram group for EOS BPs as his team is a block producer candidate.
The unconfirmed screenshot of the ECAF order notes that the accounts are to be frozen “pending further review of the claims by an Arbitrator,” and that the “logic and reasoning” for the order will be posted at a later date.
Sam Sapoznick, who signed the order as the ECAF Interim Emergency Arbitrator, describes himself as a “blockchain realist” on his LinkedIn with his most recent job listed as a landscaper at “Gardens From Here” for the last nine years. Neither the ECAF nor Sapoznick have responded to a request for confirmation from Cointelegraph by press time.
EOS BPs had come under fire from crypto Twitter earlier this week when they had overridden an ECAF decision and frozen seven accounts associated with phishing scams. The ECAF later retroactively ordered the accounts frozen, but the publicized EOS BP conference call-based decision process has caused some to question EOS’ decentralized system.
No words. https://t.co/EjaULWZ64S— Charlie Shrem (@CharlieShrem) June 22, 2018
EOS’s path to launch their mainnet this June had already hit a few snags after finishing their $4 billion Initial Coin Offering (ICO) on June 1. Their mainnet went live on July 15 after the 15 percent - or 150 million - positive vote threshold was crossed, but two days after the launch, the mainnet experienced a four-hour “pause.”
The crypto markets are continuing to sink after a week of bad news following the Bithumb hack and Japan’s crypto exchange crackdown.
The crypto markets are continuing to take a tumble today, June 23, following slew of FUD-like news from the crypto sector in South Korea and Japan.
Market visualization from Coin360
Leading South Korean exchange Bithumb was hacked for $30 million, and Japan’s financial regulator FSA has apparently renewed their crackdown on cryptocurrency exchanges after sending out six more business improvement notices this week.
Bitcoin price chart. Source: Cointelegraph Bitcoin Price Index
Ethereum price chart. Source: Cointelegraph Ethereum Price Index
EOS’s price fall follows the controversy that arose after the mainnet launch when EOS block producers took it upon themselves to lock seven account associated with phishing scams, prompting questions about the coins decentralized system.
EOS is also one of the top traded coins on the hacked exchange Bithumb, which has since fallen from sixth to eleventh place of exchanges by trading volume on Coinmarketcap.
Total market cap is now around $255 billion, a number last seen on April 6.
Total market cap of all cryptocurrencies from Coinmarketcap
Customers have also received reassurance from Bithumb that it will refund all users affected by the $30 million hack.
Crypto commenter Whale Panda tweeted about the Mt. Gox news yesterday, alleging that its positivity has kept it out of the mainstream media:
MtGox news is positive #Bitcoin news so will not be featured by mainstream media. They only do the negative stuff.— WhalePanda (@WhalePanda) June 22, 2018
A board director at the Swiss National Bank believes that there is now less interest in issuing a CBDC, but added that it could still have “big” implications.
Thomas Moser, a board director at the Swiss National Bank (SNB), believes that central banks’ interest in developing central bank-issued digital currencies (CBDCs) has now waned, Business Insider reports today, June 23.
Moser told Business Insider at this week’s Zug Crypto Valley Conference that although there was initial interest among central banks in issuing CBDC or a national cryptocurrency, “enthusiasm has slowed again because of the implications it would have for financial stability:”
"The whole technical issue, which excited everyone, really takes second place to this conceptual policy issue. The mood now is: everyone is monitoring it, some are experimenting with it, heavily, but I think everyone is waiting for someone else to do it first so we can."
Even though Moser mentioned that central banks were now “skeptical” of CBDCs, he did note that the “implications are quite big” to have a digital version of a country’s currency.
"It's kind of cumbersome to have all your money, all your savings in bank notes. It's much easier if you can just switch it or have an account with the Swiss national bank. Then it becomes very volatile — in good times everyone has their money with the banks to earn interest, in the bad times, everyone has it on their devices. There are the things we need to think about how we would handle.
According to Moser, CBDCs would compete directly with banks, meaning that any issuance would have to be carefully thought through. Moser then added that the Swiss National Bank is officially “basically neutral towards cryptocurrencies:”
"We are not worried, we don't mind."
At the Money20/20 conference at the beginning of June, Moser had also underlined this point, stating that “as long as central banks do a good job, there is no real need for central banks to disappear.”
Switzerland has developed a reputation as a crypto-friendly country, in part due to their lenient Initial Coin Offering (ICO) regulations and tax-leniency, particularly in the Zug “Crypto Valley.” Earlier this week, one of the members of the Swiss collective head of state also spoke favorably about blockchain, noting his belief that it would someday “penetrate our entire economy.”
An immutable ledger sounds nice, but what about the margins, banks’ bread and butter?
On June 18, Carlos Torres, CEO of Spanish bank BBVA, declared that blockchain is “not mature” and faces major challenges. During the past month, blockchain’s effectiveness and maturity were also questioned by players as big as the Bank of Canada (BoC), the Russian Central Bank, and DNB, the Central Bank of the Netherlands.
While blockchain can indeed improve the effectiveness of cross-border payments and cut the costs by eliminating the middleman, it hasn’t yet proven itself as a tool ready for industrial-scale use. What’s more important is that some of the banks might not be happy to give up those juicy margin fees.
Ripple’s attempts to modify the system
Ripple, a California-based payment network and protocol company, was established in 2012. Essentially, it focuses on facilitating transfers between major financial corporations.
Ripple is not quite your average cryptocurrency — some argue it’s not a cryptocurrency at all. First of all, it doesn’t champion the dreams of overthrowing the government along with the banking system. Oppositely, it chose to work with mainstream financial players from the very start. As Brad Garlinghouse, CEO of Ripple, told Cointelegraph:
We were from the beginning really looking at how we work with governments, how we work with banks. And I think some in the crypto community have been very much, “How do we destroy the government. How do we circumvent banks?”
Garlinghouse believes that governments aren’t going anywhere, saying, “In my lifetime, I don’t think that’s happening,” so it’s only logical to cooperate with them and work within the existing regulatory framework. That attitude helped Ripple to land crucial partnerships with important players, including, China-based payment services provider Lian-Lian, the Saudi Arabian Monetary Authority, WesternUnion, among others.
Ripple hopes to pioneer the mainstream financial system with xRapid, its tool for easing cross-border fiat transfers between financial institutions. The platform has recently proven to save transaction costs by 40-70 percent by not having to use foreign exchange providers and has increased transaction speed to “just over two minutes.” In comparison, according to McKinsey research, typical international payments take three to five working days to complete.
In May 2018, Ripple reported positive results for its xRapid pilot. The company tested payments between the U.S. and Mexico. And there are other players who have already introduced somewhat similar features publically, having it out for its retail clients.
In April, Spanish-based international bank Santander announced the launch of its Ripple-powered, blockchain-based payment network called One Pay FX, becoming the world’s first bank to do so.
One Pay FX is a mobile application for cross-border payments backed by Ripple’s blockchain. It’s based on xCurrent technology — not the above mentioned xRapid — which doesn’t cut out the corresponding bank from the entire process, thus not quite changing the conventional system, but rather modifying it.
In other words, xCurrent uses immutable “interledger” protocol, which “is not a distributed ledger,” as confirmed by David Schwartz, Ripple chief cryptographer. In xCurrent’s case, the network peers do not have access to a shared ledger, which is the basis of major blockchain networks like Ethereum (ETH) or Hyperledger. However, xCurrent technology allegedly allows to “eventually plug” cross-border transactions into distributed ledgers.
Nevertheless, the technology still allows for cutting the costs and time normally required by traditional international funds transfers. It was introduced to Santander account holders in Spain, UK, Brazil and Poland, with the bank promising to add more countries to the list “in the coming months.” Executive chairman Ana Botín stated that “transfers to Europe can be made on the same day” and the bank aims to deliver instant transfers across several markets “by the summer.”
The system has been in the works for about three years, as Santander’s relationship with Ripple started in 2015, when the bank first invested in the California-based startup. The next year, test trials showed that Ripple’s technology concluded transfers in less than a day. The bank’s U.K. operation then made the blockchain-backed mobile payments available to staff.
Santander isn’t the only bank hoping to implement the technology for allegedly faster and cheaper payments. South Korean bank Woori Bank intends to introduce “commercialized” international remittances based on Ripple this year. Its Digital Strategy Department ran initial tests back in January and the results were positive.
Notably, that trial was part of a Japanese-based scheme involving Ripple and SBI Group, with 37 other institutions participating in the test. Of these, along with at least 23 more involved in trying out blockchain remittances, the vast majority are Japanese banks, so Asia appears to be particularly ripe for blockchain solutions to traditional money wirings. Indeed, in Singapore, the idea of blockchain-powered cross-border payments is even propelled by the local central bank. In March, Monetary Authority of Singapore (MAS) managing director Ravi Menon reaffirmed that the country's blockchain plans — dubbed ‘Project Ubin’ — will “solve the challenge” of increasing efficiency in the arena:
“One of the potentially strongest use cases of crypto tokens is to facilitate cross-border payments in traditional currencies”
Other startups trying to disrupt the banking system
On May 21, Argentinian Banco Masventas (BMV) announced a partnership with Bitex, a local fintech startup founded in 2014 with a focus on “developing the Bitcoin market in Latin America.” Now, BMV clients can use Bitcoin for international payments as an alternative to conventional ways.
As a result, the bank states, the customers get to transfer money from account to account in less time than traditional bank transfers: BMV states that the new service will reduce transfer times by up to 24 hours.
José Humberto Dakak, a principal shareholder of Masventas, said that the move intends to strengthen the bank’s digital and smartphone-based services and reduce banking service costs. In addition to expediting transfers, Bitex claims that it can provide more secure transactions.
Moreover, there’s Wyre, a San Francisco fintech startup whose self-titled cross-border payments platform alleged in 2016 to make international payments faster and more cost effective by putting them on a blockchain. In addition, Red Belly Blockchain — a project run by researchers at the University of Sydney — has been developing new blockchain technology for secure and rapid transfers of virtual currencies that have allegedly outrun Visa and Bitcoin network with “more than 440,000 transactions per second on 100 machines." However, these startups don’t deal the existing banking system, per se, essentially trying to substitute it instead.
Finally, there are big league players experimenting with blockchain as well: In February 2018, J.P. Morgan (JPM), whose CEO has infamously called Bitcoin a fraud, launched the blockchain-powered Interbank Information Network (IIN) in collaboration with the Royal Bank of Canada along with Australia and New Zealand Banking Group Limited. The platform, which is based on the bank's private Quorom blockchain, allows JPMorgan to exchange information with other banks and “minimize friction in the global payments process,” speed up the process and improve security, according to the bank.
Moreover, IBM has announced a blockchain banking solution that aims to cut the settlement time and costs of international payments; and MasterCard (MA) has introduced its own blockchain technology for partner banks and merchants.
SWIFT, the dominant player, is skeptical about blockchain
Blockchain-based systems appear to challenge the longstanding players in the industry directly. Santander’s Ana Botin told the Financial Times that her company is confident in taking on big fintech companies like TransferWise, hoping to expand its One Pay FX to small companies — as it is now only available for individuals — and even putting out a separate app for open market payments. “I think Santander offers more and better [sic] as of today than many of these other companies,” she said.
Cue in SWIFT, a longstanding and extremely significant player in the banking industry. SWIFT is a 45-year-old Belgium-based interbank messaging service that handles about 50 percent of the world’s high-value international payments and a co-operative owned by about 11,000 member banks.
What is SWIFT’s view on the new technology in the game that’s been reportedly showing prominent results? Well, it doesn’t really share the enthusiasm, giving mixed signals regarding blockchain.
In early March 2018, SWIFT said it had finished a “Proof-of-Concept” test of blockchain to coordinate cross-border payments between the accounts of 34 banks. The result: blockchain is not ready for mainstream use as “further progress is needed before it will be ready to support production-grade applications in large-scale, mission-critical global infrastructures,” although the tests went “extremely well.”
As SWIFT explained to the Financial Times, a substantial amount of banks would have to drastically modernize their systems before they could turn to a blockchain-based system for their cross-border payments.
Reportedly, the testing involved the creation of 528 sub-ledgers for 28 participating banks to avoid confidential information being revealed to rivals. Thus, as Damien Vanderveken, head of research and development at SWIFT, told Financial Times, all of their members — the thousands of banks — would require 100,000 sub-ledgers to be established, which is technically burdensome because of maintenance issues, among other reasons.
Nevertheless, SWIFT also reports positive results for blockchain, as Distributed Ledger Technology (DLT) helped reconciliation of Nostro accounts for lenders (a Nostro account is basically a bank’s account in a foreign currency in another bank).
Back in April 2017, SWIFT announced that it was going to use the Hyperledger platform as a grounds for updating its practices of cross-border market payments in collaboration with Australia and New Zealand Banking Group, BNP Paribas, BNY Mellon and others. Later, in July 2017, SWIFT’s test project added an additional 22 banks, including Commerzbank, Societe Generale and JPMorgan Chase Bank. The participating banks had their own node deployed in a SWIFT DLT sandbox, with the underlying technology being the Hyperledger Fabric v1.0.
PoC results showed that DLT could provide the functions needed for Nostro account reconciliation, including “real-time event handling, transaction status updates, full audit trails, visibility of expected and available balances, real-time simplified account entries confirmation, the identification of pending entries and potential related issues, and [...] the data required to support regulatory reporting.”
Blockchain improves the system by creating competition
As the Financial Times reports, the blockchain initiatives prompted SWIFT to readjust their fusty system. Thus, apart from proceeding with their own tests on the potential of blockchain, they updated their messaging system by launching a service called Global Payments Innovation (GPI), which is reportedly being used by 165 banks. According to the representatives of SWIFT, more than 50 percent of money transfers on GPI are reaching their destination “within 30 minutes of being initiated.” Harry Newman, head of banking at SWIFT, told the outlet:
“It is no secret that correspondent banking is a 1998 model and we are busy addressing that, bringing it to a 2018 model… But in terms of speed, what problems are you trying to fix? We have our own cloud and API solutions and are already doing payments in minutes or even seconds.”
As for blockchain, SWIFT doesn’t seem enthusiastic about it in the end, naming scalability as one of the primary issues. Newman elaborates:
“[Blockchain] is not straightforward to scale and it is not yet appropriate to do so… All the announcements [by banks about their blockchain payments projects] made to date, they are either in-house or bilateral projects between banks. As you bring scale, you get escalating complexity.”
Some banks are not ready for blockchain
It’s not just SWIFT who’s not that cheerful about the idea of moving to blockchain: some of the banks are pessimistic as well. First of all, shifting to decentralized ways of transferring money means giving up a large chunk of margains, an important source of income for banks. At the moment, U.K. customers of Santander are not required to pay any additional fees using the One Pay FX system, while the average cost for a bank to execute a cross-border payment through correspondent banking costs $25 to $35, according to a McKinsey research.
Indeed, as Citigroup’s “Bank of the Future” report suggests, fintech companies are actively disrupting the banking market with new technologies and driving out longstanding participants. For instance, the paper estimates that by 2025, major North American banks could lose 34 percent of profit from mainstream areas such as payments, investments, and personal lending.
In the same way, it could be argued that Santander is hoping to drive out fintech competitors, such as TransferWise, WesternUnion, etc., and hence grow their customer base at the cost of lower commissions. In the future, more banks might have to start dealing with competition interlinked with the new technologies, changing their traditional financial strategies.
Moreover, a significant number of central banks have voiced their concerns regarding blockchain’s capabilities. The Bank of England started testing its Real Time Gross Settlement (RTGS) service to conduct the transfer of funds between banks in “real time” and on a “gross basis” with plans to put it on a blockchain, but then changed its decision after trials, citing the technology's immaturity.
Similarly, on June 14, a Bank of Canada (BoC) official questioned the effectiveness and security of using blockchain tech for banking.
While discussing the BoC’s Project Jasper, a Proof-of-Concept payment system utilizing so-called Distributed Ledger Technology (DLT) at a conference in Seoul, James Chapman, senior research director at the bank’s funds management and banking department, mentioned that although the testing showed some promising results, BoC wasn’t that keen on the technology, citing security as an issue:
“At this time, there is no cost-saving effect compared to the existing central bank system. Hacking and other operational risks are likely to occur.”
More central banks have echoed this sentiment. Thus, first Deputy Governor of the Russian Central Bank has recently said that blockchain technology is not yet “mature” enough for industrial-scale use, while the central bank of the Netherlands, after three years of experimenting with Distributed Ledger Technology (DLT), has also concluded that the current algorithms are unable to handle the volume of transactions of financial market infrastructures in a completely secure and energy-efficient way.
The Bank of England will rebuild its Real Time Gross Settlement system to interface with platforms using distributed ledger technology.
The Bank of England is planning to rebuild its Real Time Gross Settlement (RTGS) system so that it can interface with private business and platforms using distributed ledger technology (DLT), the bank’s Governor Mark Carney announced in a speech June 21.
Speaking at Mansion House in London, Carney said that the bank will conduct an “ambitious rebuild” of its RTGS system, which is, according to him, the backbone of every payment in the U.K. RTGS is a system generally used to transfer large volumes of funds between banks.
The bank is looking to reorganize the existing RTGS so that private payment platforms could plug in directly to the bank’s system. “Our new, hard infrastructure will be future-proofed to your imaginations, opening up a range of potential innovations in wholesale markets, and corporate banking and retail services,” Carney said.
The Governor also mentioned that the bank has begun working together with the Bank of Canada, the Monetary Authority of Singapore, and some private-sector organizations to upgrade inter-bank cross-border payments, including initiatives based on DLT. He said:
“The potential returns are large. At present, cross-border payments can cost ten times more than domestic ones. We estimate that in the U.K. alone there is scope to realize annual savings of over £600 million. Most fundamentally, the more seamless are global and domestic payments, the more U.K. households and businesses will benefit from the new global economy.”
Carney asserted that the new system will help fight money laundering and financing of terrorism, as well as advance access to the domestic and international financial systems.
The RTGS renewal Proof-of-Concept (PoC) was initially proposed in May 2017. The bank then concluded that DLT was “not yet sufficiently mature to provide the core for the next generation of RTGS,” however it placed a high priority on ensuring that the improvement of RTGS functionality is capable of interfacing with DLT.
In April, the Bank of England released a PoC paper that examines how to configure a distributed ledger system which would maintain privacy between participants, keep data shared across the network, and also enable a regulatory body to oversee all transactions. The central authority would have the power to issue and retire new units of assets and grant access permissions to all participants. No party other than the regulator would be able to infer details about transactions they are not party to.
Trading analyst predicts Bitcoin will drop to $4,000 prior to a rebound above $10,000 by 2019.
Gordon suggested that BTC will drop below $5,000, subsequently hitting $10,000 by the end of the year, citing significant market volatility to be the main reason. When asked to explain his estimates, Gordon cited a “beautiful uptrend,” and called the recent correction down from $19,000 “inconsequential” given the gains in BTC price since 2015.
The analyst said that the current high to low range is 17 percent on average, which is one of the lowest BTC has ever seen. “There were times when it was 20, 30, 40 percent [per] week so, if I’m down 30 percent right now in Bitcoin, that’s nothing, I can make that up in two weeks,” he continued.
Gorgon argued that the cryptocurrency market is “very technically driven,” so reckoning on the technicals and market sentiment, it’s possible to recover certain losses in the near future.
Gordon’s site, TradingAnalysis.com, provides market analysis and trading strategies. Gordon has also made predictions about other markets, including commodities like crude oil. In November 2015, when crude was trading at $41, he predicted a decline of nearly 50 percent down to $26. In February of the following year, crude was trading at $26.05.
Earlier in June, stock analytics firm Trefis estimated a BTC year-end price of $12,500, which is $2,500 lower than their initial forecast. Trefis’ BTC forecast analytics is based on fundamentals of supply and demand, where demand is the number of users and the amount of transactions, and supply is the number of available BTC.
Last month, Wall Street analyst Spencer Bogart said that the major cryptocurrency will trade “at least” above $10,000 by the year’s end. He suggested that the reality of a deeper institutionalization of the crypto space is securing the long term “story,” and is “overall positive” for Bitcoin’s future.
Latest technical analysis of top 9 cryptocurrencies from an expert trader.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
The market data is provided by the HitBTC exchange.
In the world of investing, fundamentals and a price of an asset class rarely move in tandem. Usually, one leads the other.
In 2017, the prices of cryptocurrencies skyrocketed, but the fundamentals were left lagging behind. That resulted in a sharp correction. While most digital currencies are down more than 50 percent from their highs, the fundamentals have improved rapidly this year.
Everyone, right from the investment banks to the large corporations are exploring the vast opportunities of the blockchain technology and cryptocurrency trading. The educational institutions, governments, and the central banks are also not left behind. They too are exploring the various options available in this breakthrough technology.
However, the prices have failed to respond to this improvement in fundamentals, and the virtual currencies continue to lose ground on every adverse news. The latest drop has been attributed to the order by the Japanese Financial regulator, which has asked the cryptocurrency exchanges to improve their practices against money laundering and terrorist financing.
This led bitFlyer to stop accepting new accounts temporarily until it makes the improvements. From a long-term perspective, this is favorable news, still, prices are reacting to the downside.
While this is frustrating, it increases the chances of another burst in prices once the sentiment changes. Therefore, we have been on the lookout to spot buying opportunities that show a change in trend.
Let’s see if can spot any today.
The pullback in Bitcoin stalled right at the downtrend line. The failure of the bulls to break out of this overhead resistance has attracted fresh selling by the bears. Now, it’s up to the bulls to defend the major support at $6,075.04.
If the bears succeed in breaking below the psychological support at $6,000, the BTC/USD pair can slide to the next support at $5,450.
The signal to buy when the RSI enters into the oversold territory is not working. This shows that the buying has dried up and selling increases as soon as the digital currency nears the first overhead resistance. Our view of a range bound action will be invalidated if the bears sustain below the $6,000 levels.
But if the bulls defend the support zone between $6,000-$6,075, it will indicate that the virtual currency still remains in a large range. We might propose a long position if the price sustains above the 20-day EMA for a couple of days.
With today’s fall, the ETH/USD pair has again entered the descending channel, which is a bearish development. If the bears break below the $450 levels, the next major support lies at $358.
As prices have turned down from the 20-day EMA on the previous two occasions, we shall wait for the bulls to scale this level before suggesting any long position.
Repeated failure of the bulls to scale above the $0.56270 levels has invited a fresh bout of selling by the bears. Ripple is now likely to fall to the final support at $0.45351.
A break of the $0.45351 levels on a closing basis (UTC) will be a negative development because the next support is way lower at $0.24. Such a move will complete a 100 percent retracement of the rally that had started in mid-December of last year.
If the bulls successfully defend the critical support level, the XRP/USD pair might again attempt to rebound above $0.56270.
We shall wait for a new buy setup to form before suggesting any trade on it.
After failing to break out of the downtrend line for three days in a row, Bitcoin Cash has turned down sharply.
It is currently trying to hold the support zone between $777.5304-$736.0137. If this zone breaks, the BCH/USD pair can slide to $620 levels.
The digital currency has a history of sharp rallies and sharp declines. We shall wait for the prices to stop falling, reverse direction and sustain above the 20-day EMA before proposing any trade.
EOS is looking weak. It has failed to attract buying support above the $10.3384 levels, and both moving averages have turned down.
Today, prices have broken down of the 78.6 percent Fibonacci retracement levels. This increases the possibility of a 100 percent retracement of the rally from $5.9610-$23.0290. Though there is minor support at $7.8-$8, it is unlikely to hold.
We shall turn bullish on the EOS/USD pair only after it breaks out of the downtrend line and forms a new buy setup.
After failing to find any buying momentum in the past three days, Litecoin has resumed its downtrend, towards its next support level at $84.708. If this level also breaks, then the fall can extend to $75.131.
Until the LTC/USD pair scales above the $107.102 levels, it will continue to face selling pressure on rallies.
The first sign of a change in trend will be when the bulls sustain above $108 levels. This will confirm that the markets have rejected the lower levels. Until then, it is best to remain on the sidelines.
After remaining range bound for the past week, Cardano has resumed its move towards the next support at $0.13.
A break of $0.13 on a closing basis (UTC) will be negative and can sink the ADA/USD pair to $0.078215 levels.
The 20-day EMA has acted as a major resistance on the upside since price broke below it on May 09 of this year. Therefore, we shall wait for the digital currency to break out and sustain above the 20-day EMA before suggesting any long positions in it.
The tight range in Stellar has resolved to the downside. The next move will be a fall to the $0.184 levels, which is critical support.
We expect the bulls to defend the $0.184 levels aggressively, but the XLM/USD pair will gather momentum only after it scales above the 20-day EMA and the downtrend line. We shall issue a fresh buy recommendation when we find sustained buying.
Any breakdown below $0.184 on a closing basis (UTC) will negate our view of the formation of a trading range.
After failing to move up in the past two days, IOTA has broken below the June 18 intraday lows, which increases the likelihood of a drop to the major support at $0.9150.
The RSI is near the oversold levels, which increases the possibility of a rebound. However, when the sentiment is bearish, the RSI can get deeply oversold, hence, the traders should wait for an indication of a reversal before risking a buy.
The first signal of a probable change in trend will be when the IOTA/USD pair breaks out of the downtrend line and the 20-day EMA. We shall wait for a new buy setup to form before proposing any trades on it.
The Bahamas’ central bank has announced plans to issue a national digital currency, as well as develop blockchain-based projects.
Speaking at the Bahamas Blockchain and Cryptocurrency Conference earlier this week, Deputy Prime Minister and Minister of Finance of the Bahamas, K Peter Turnquest, made the announcement, saying that the development of a fully digital payment service is “the way forward for this era of governance.” Turnquest continued:
“A digital Bahamian currency is especially important for the many family islands as they have seen many commercial banks downsize and pull out of their communities, leaving them without banking services. As an island nation, where transportation can be an inconvenience for many, especially the elderly, and costly, we must offer financial services digitally and securely.”
Turnquest also advocated for applying blockchain on a nationwide level in order to transform the island of Grand Bahama into the “digital paradise of the region.” He reportedly expects the government to launch a pilot program of issuing blockchain-based education certificates for graduates of the National Training Agency, as well as inspect the ways blockchain can be applied for business licences, passports, and national insurance. Turnquest added:
“Using technology and single points of contact we're able to eliminate a lot of the human element that facilitates corruption, and so when we talk about applying for government services, if we have a single portal for entry and all of the processing being done behind the scenes, either through electronic data interchange or through human facilitation we can eliminate that point where, we Bahamians call it, you have to tip somebody in order to get service.”
The nearby island nation of Bermuda is also in the process of developing a friendly legal framework for virtual currencies and blockchain. In past months, the country signed memoranda of understanding with Binance Group and blockchain project Shyft. The former considers establishing funding for educational programs related to fintech and blockchain startups while per the latter, Shyft network will spend up to $10 million on blockchain technology education and economic development.
Walmart has been awarded a patent for a healthcare information system, which will store medical data on a blockchain from a wearable device.
U.S. retail giant Walmart has been awarded a patent for a system that would store medical records on a blockchain from a wearable device, according to a patent filing published by the U.S. Patent and Trademark Office.
The system, according to the document, will allow medical professionals to retrieve medical data from a patient that is unable to communicate. The patient’s medical records will theoretically be stored on a blockchain, accessible by a device worn by the patient that first responders could access with an RFID scanner. The patent further explains the principles of the system's operation:
“... receiving, by a processor of a computing system, an encrypted private key and a public key associated with the patient stored on a wearable device of the patient, in response to a scanning of the wearable device of the patient at a scene of an emergency, wherein the encrypted private key is decrypted by a biometric signature of the patient; obtaining, by the processor, the biometric signature of the patient by scanning a bodily feature of the patient; decrypting, by the processor, the encrypted private key using the biometric signature of the patient to determine a private key associated with the patient; and accessing, by the processor, the medical records of the patient, using a combination of the public key and the private key associated with the patient, to access a local storage medium of the wearable device.”
Additionally, the obtained medical information may be shared with hospitals and other healthcare entities, meaning that if the patient is transported from one medical care organization to another, their data will be available to medical care personnel before the patient’s arrival.
According to Fortune, Walmart is considering purchasing health insurer Humana, a company with which the retailer has an established relationship. Should the new blockchain medical record system prove viable, a partnership with Humana would provide an indispensable data depository.
Walmart has filed patents for other blockchain-based systems, including a marketplace for reselling purchased products, a “Smart Package” system to track package contents, environmental conditions, location, and other details, and an electrical grid that will be powered by Bitcoin or other digital currencies. The company’s vice president Frank Yiannas said that Walmart is ready to use blockchain technology in its live food business, which will shorten the time it takes to track produce from six days to two seconds.
An Israeli cybersecurity expert says crypto-related crimes will exceed the number of all other cyberattacks in 2018
According to an expert at the Israeli cybersecurity firm Check Point Software Technologies (CHKP), crypto-related crimes would exceed the number of all other cyberattacks in 2018, the Times Of Israel reports June 22. The expert defined “cryptocurrency-related cyberattacks” as any form of cybercrime that involves crypto, including scams and hacks.
Speaking on a panel at the “Blockchain, The New Digital Age” event at Tel Aviv University, CHKP expert Lotem Finkelsteen said that illegal activity in the initial coin offering (ICO) market is the main obstacle to the development of blockchain technology.
“Not a day goes by without our hearing about a new ICO scam or mining attack,” said Finkelsteen. He argued that blockchain is now “suffering from reputational damage,” because it is associated cryptocurrencies and ICOs.
Despite optimism from other panel participants about the potential of blockchain and crypto technology, Haim Pinto, the CTO of Israel’s largest bank Hapoalim argued that blockchain is “still in a hype cycle.” Pinto said that there are no existing blockchain-powered deployments “that are dependably usable,” particularly regarding the banking system.
Pinto stated that the technology is not ready for broad adoption, saying, “We can’t just take it and use it.” He added:
“Distributed general ledgers cannot erase anything… In addition, there are mathematical challenges. Distributed general ledgers can’t scale up to the volume of transactions we need to serve.”
While blockchain technology has been recently considered not mature enough by the Russian Central Bank, the benefits of the technology are still being explored globally by banking and financial institutions.
Earlier this week, major Spanish banking consortium Niuron revealed plans to introduce a blockchain-based client identification verification system. Earlier in June, the People’s Bank of China (PBoC) unveiled a blockchain-powered project to digitize paper checks. In May, seven of India’s largest banks launched a blockchain-based trade finance initiative led by Indian IT giant InfoSys.
The Chief Strategy Officer of major cryptocurrency exchange Bitfinex has stepped down, he will be replaced in the interim by the company’s CEO
Chief Strategy Officer (CSO) Phil Potter of Bitfinex crypto exchange is resigning from the company, Reuters reports June 22. Potter will be replaced in the interim by Bitfinex CEO, Jean-Louis van der Velde.
Potter commented that it was the “natural time for [him] to depart the executive team” while Bitfinex turned to “other strategic international markets.” According to Reuters, he referenced “new opportunities” to come, but did not specify what they would be.
Tether has been criticized in the past by skeptics who doubt that it actually holds $1 in reserve for every token issued. In December, Bitfinex and token issuer Tether received subpoenas from U.S. regulators as questions continued to arise about the latter’s “true” value.
Earlier this week, Tether’s general counsel confirmed that Tether indeed has backed all their tokens, although they were careful to note that it was not an official audit and that they are not an accounting firm.
Coinbase is accused of being underprepared and overwhelmed by the pace of its growth, in reference to 134 pages of customer complaints obtained through a FOIA process.
Business Insider cites documents obtained by Mashable through a five-month Freedom of Information Act (FOIA) process, which comprise 134 pages of complaints filed by Coinbase users with the U.S. Securities and Exchange Commission (SEC) and the California Department of Business Oversight.
Recurrent among the complaints are users’ reported difficulties in accessing funds, with Mashable providing evidence of widespread frustration at either being locked out of access, seemingly not receiving due funds, or facing difficulties transferring funds between accounts.
One user cited by Mashable went so far as to accuse Coinbase of acting “criminally,” while another alleged that they “believe the company is holding my funds to make money on top of my investment."
Mashable writes that reviewing customers’ filings revealed a “troubling pattern” that indicated that many users were attributing their losses to the exchange’s alleged mismanagement.
At the very least, the documents suggest a failure to keep up with customer queries, which, as Business Insider notes, could be attributed to the company’s sky-rocketing growth: in October 2017, Coinbase reported 11.7 million users, up 148 percent from 4.7 million users the preceding year.
A Coinbase spokesperson responded to Mashable, explaining that:
"...consumer demand for our services increased by 40x [in 2017] and we experienced transaction volumes in November and December of that year that grew by 295 percent."
Mashable’s review indicated significant delays from Coinbase in responding to system errors that prevented customers from either making asset transfers, accessing transaction histories, or trading on the platform.
One disgruntled user is quoted as writing that they believe the company is prioritizing growth over customers by “knowingly marketing a service it knows it cannot actually provide."
Coinbase told Mashable the company has increased its support team “by over 150 percent" in the past few months, and is now “able to resolve issues faster, decreas[ing] the backlog by 95 percent.”
Meanwhile, Coinbase continues to diversify its services and reach out to an ever wider user base, recently revealing plans to enter the Japanese crypto market and launching a new suite of products that target major institutional investors.
The exchange has also made progress with its move become a fully SEC-regulated broker dealer via its recent acquisition of a financial services firm. This would allow it to offer blockchain-based securities on its platform and further expand its trading services, for which it has reportedly been pursuing a federal banking license in parallel.
Football fans have plenty of ways to use cryptocurrency at the World Cup.
Major sporting events always attract a massive amount of attention across the world and it is encouraging to see cryptocurrencies being integrated into the many aspects of the event.
We’ve seen this happen at the Super Bowl and the Winter Olympics in the past six months, so it’s not surprising that Bitcoin and cryptocurrencies are becoming far easier to use in the many industries involved in these major events — from hospitality to gambling.
Every four years the global sporting community feasts on a festival of football at the World Cup, as the world’s most popular sport takes centre stage.
Football, in its current form, was birthed around 1863 in England, but its origins stem from numerous games played throughout history, according to FIFA. Over the past 100 years the game has taken hold in countries around the world, in part due to its simplicity and ease of access.
Given its status as the biggest sport in the world, the FIFA World Cup has inevitably become the most watched sporting event and fans travel the world to support their teams, wherever the tournament is being hosted.
2018 World Cup
The 2018 World Cup is currently underway in Russia, with 11 cities and 12 stadiums playing host to 64 matches during the month-long spectacle.
The country is expecting more than 570,000 international visitors over the duration of the competition — with the influx of foreign tourists also expected to provide a boost to the Russian economy.
Travelling tourists provide a need for adequate accommodation and foreign exchange facilities, and this is where cryptocurrencies have come to the forefront at the World Cup.
Crypto at World Cup
In the four years since the last World Cup, cryptocurrencies have grown immensely. The proliferation of the industry came to a head last year, as Bitcoin, Ethereum and a number of altcoins reached all time highs.
With that being said, football fans were able to bet on the 2014 World Cup in Brazil with Bitcoin using Bitkup’s platform.
This seems to be the case at the World Cup in Russia. Another factor is that Russia is still operating under economic sanctions.
Put simply, cryptocurrency gives visitors and fans the ability to quickly and easily withdraw rubles — the Russian currency — using cryptocurrency.
Bitcoin for hotels, booze and flights
In the build up to the tournament, Kaliningrad hotel chain Apartments Malina announced that customers would be able to book and pay for accomodation using Bitcoin.
The manager of the chain, Anna Subbotina, said the move was a forward-thinking initiative that could blaze the trail for the hotel industry:
"Cryptocurrencies are now enjoying increased interest. Gradually, they will come into use as a means of payment. And we decided that the fans should be able to pay for our services with the help of this innovative technology. It may very well be that other hotels awaiting [sic] our example for the forthcoming football holiday.”
Accomodation is not the only thing that tourists can use cryptocurrencies for during the World Cup. Killfish, a chain of bars in Russia, is accepting Bitcoin for booze as part of an extensive promotional program that promises great discounts.
Getting to Russia in the first place was also possible with cryptocurrencies. Cheapair has been accepting Bitcoin as a payment method since 2013, and with flights to Russia available through the airline, people could have easily made their way to the country using the cryptocurrency.
Travel agency Destinia also accepts Bitcoin as a payment method for its clients, and football fans using the service provider to get to Russia had another avenue to spend their BTC to enjoy the tournament.
With many sports, betting has become part and parcel of the experience. Die-hard fans are willing to put plenty of money on the line in hopes of striking gold in terms of their luck — and they can also do it using cryptocurrency.
There are a number of sport betting platforms that have adopted cryptocurrencies as a payment and betting option. Intertops and Bodog are two examples of betting websites that accept cryptocurrency bets as well as normal fiat betting.
The market is still one that needs a lot of development, but a number of platforms are working hard to become leaders in the cryptocurrency sports betting space.
Once you’ve found a platform you feel comfortable with, you still need to do some research before you start putting down bets on the outcomes of games. With this in mind, a US-based platform is working hard to provide a blockchain-powered solution for reputable betting tips.
More recently, developers have produced Blockchain-based applications (Hero, Winstars, Dragon Inc.) that provide betting advice to their users. Such platforms record predictions of sporting events on a blockchain, providing transparent public records of betting predictions. Users are able to access all records, which allows them to check other bettors track record to ensure validity of betting odds and advice.
Plenty of crypto-goals at the World Cup
By the time the next World Cup rolls around, far more service providers could be actively using and accepting cryptocurrencies as a payment method.
As previously mentioned, betting with Bitcoin was possible at the 2014 World Cup — so the sky is, quite literally, the limit when it comes to the possibilities of crypto adoption and blockchain solutions being far more prevalent in 2022.
With the next football global showpiece being hosted in Qatar, there is even more reason for cryptocurrency development and adoption in the Middle East.
The industry received a boost when an Islamic scholar produced a report that suggested that Bitcoin is Halal, and conforms with Islam and Sharia law.
With four years to go, there is plenty of time for the blockchain and cryptocurrency sector to grow in the region.
The US and Korean officials have resolved to strengthen their cooperation in advancing the Fourth Industrial Revolution.
The US State Department and South Korea’s Ministry of Science and Technology (MSIT) have resolved to strengthen the two countries’ cooperation in advancing the Fourth Industrial Revolution, at a press conference held in Seoul today, June 22.
The so-called Fourth Industrial Revolution has been characterized by the World Economic Forum (WEF) as a series of technological breakthroughs that “will fundamentally alter the way we live, work and relate to one another… [across] the global polity, from the public and private sectors to academia and civil society.” The WEF recognized blockchain’s major role in the Fourth Industrial Revolution as early as 2016.
Today’s press conference in Seoul revealed that the US and South Korea plan to coordinate their information and communication technology (ICT) policy, as well as resolving to “strengthen [their] bilateral cooperation on cybersecurity and privacy,” with both countries recognizing that “data is a key resource” in the Fourth Industrial era.
The two governments today said they would work together alongside international organizations such as the International Telecommunication Union (ITU) and the Organization for Economic Cooperation and Development (OECD) to work towards “more transparent and open global internet governance” - for which blockchain’s central offering of a tamper-proof ledger is a cornerstone innovation.
Notably, the two countries revealed plans to to enlist Korean electronics giant Samsung and
US-based Microsoft - both of which have heavily invested in the development of their own blockchain platforms - to advise on ways in which new technologies can contribute to the people and economies of both countries.
In April, Samsung said it views blockchain as the “core platform to fuel [its] digital transformation.” The company has already partnered on a pioneering agreement with the South Korean government for the creation of a blockchain platform for “welfare, public safety and transportation” by 2022.
Today’s press conference also focused on the two countries’ international organization cooperation, revitalizing the digital economy, cross-border data exchange, 5G mobile communications and artificial intelligence (AI), the latter of which is increasingly being successfully tested in conjunction with blockchain tech to revolutionize areas such as logistics, and even to run blockchain-based smart contracts.
Developers at Nano have issued a sudden warning to users who generated wallet seeds using its new Android app.
Developers made an urgent appeal to users June 21, asking them to relocate funds to a wallet which had a different seed:
*ATTENTION* ANYONE WHO GENERATED A SEED USING THE ANDROID WALLET, IMMEDIATELY MOVE YOUR FUNDS TO ANOTHER WALLET DERIVED FROM A DIFFERENT SEED. *ATTENTION*— Nano (@nano) June 21, 2018
Nano, which made headlines earlier this year when hackers stole vast amounts of the altcoin from Italian exchange BitGrail, had only just received support from hardware wallet Ledger earlier this month.
The Android wallet, which developers released just a day earlier along with implementations for iOS, Mac, Windows and Linux, had survived just hours before being pulled.
While an official statement about the issue has yet to emerge, Nano executives reassured users on social media that the vulnerability was localized and would not affect users of other wallets.
“We will have a patch shortly,” a Reddit post from Troy Retzer, Nano’s chief of communications and public relations claimed.
In a separate post, Retzer added the problem was “not as bad as originally thought.”
Prices of Nano’s token appeared to deflate after reaching recent highs of $3.21 June 21, trading around $2.57 as of press time.
Mt. Gox will not sell any more Bitcoin to repay creditors after swapping bankruptcy proceedings for civil rehabilitation.
A statement and accompanying documentation confirm the move, which will see attorney Nobuaki Kobayashi act as civil rehabilitation trustee.
Kobayashi was responsible for selling vast tranches of Bitcoin reserves beginning Q4 last year to reimburse Mt. Gox users who lost money in the exchange’s mass hack in late 2013. The sell-offs appeared to have a conspicuous effect on markets, Bitcoin prices tumbling immediately following each transaction, which Kobayashi performed on major exchanges.
“The power and authority to administer and dispose of MTGOX’s assets is still vested exclusively in me, and I will implement the civil rehabilitation proceedings, including the administration of MTGOX’s assets and the investigation of claims, subject to the Tokyo District Court’s supervision,” Kobayashi wrote in the new documentation.
However, due to the bankruptcy proceedings now being halted as part of the civil rehabilitation, Kobayashi will not sell any further bitcoins, with users set to receive compensation in BTC instead of fiat currency as originally intended.
“...In the civil 2 rehabilitation proceedings in this matter, claims seeking a refund of Bitcoins (“Bitcoin Claims”) will also not be converted into monetary claims after the commencement of the civil rehabilitation proceedings,” Kobayashi continues.
Court approves Mt. Gox civil rehab. Mostly good news:— Yuji Nakamura (@ynakamura56) June 22, 2018
1) Trustee won’t sell more BTC
2) Creditors receive BTC (not JPY) in early-mid 2019
3) Everyone must refile claims by Oct
4) Bad news: some creditors will sell BTC, so that will hang over market next yrhttps://t.co/gc8SW5tnER https://t.co/3AC49MvEVI
Reacting to the news, a group of claimants who had established Mt. Gox Creditors lobby group out of dissatisfaction with progress considered it a mixed blessing.
“...Enormous assets, which were to be distributed to Mt. Gox’s shareholders under the bankruptcy proceedings, will be returned to creditors of Mt.Gox in civil rehabilitation proceedings. This is the creditors’ victory,” a statement from the group reads.
“...However, this victory has not been realized yet. The victory will come to creditors when Mt. Gox makes payment to creditors and creditors actually receive such payment.”
Mt. Gox became infamous in the crypto industry after suffering a hack, followed by a collapse in 2014, resulting in the loss of $473 million worth of customers’ money - the single largest loss of funds in the history of crypto until this year’s $534 million Coincheck hack.
A Bitcoin miner who failed to pay electricity costs has been arrested by police in China’s Anhui Province.
The suspect, known only by his surname Ma, allegedly mined Bitcoin and Ethereum on two hundred computers in the country’s Anhui province, all of which have been confiscated by the police upon the miner’s arrest. In total, Ma had stolen 150 megawatt (MW) of electricity, according to Xinhua.
According to the sources, Ma had no idea about the power costs for running the considerable mining operation when he purchased the hardware in April, which subsequently turned out to be over 6000 yuan ($930) per day.
Police were alerted to Ma when the local grid “reported abnormal electricity usage.”
“...Police found that the electricity meter for the suspected cryptocurrency mining operation had been short-circuited, which was likely an attempt to dodge the power bill,” Xinhua adds.
China has sought to crack down on its mining industry in recent months, which had previously involved a proliferation of operators in areas which had over-supply of power.
Worldwide, Bitcoin mining is expected to consume 0.5% of total electricity output as soon as the end of this year, Cointelegraph reported in May.
Almost all of the top one hundred cryptocurrencies by market cap have seen significant losses within the space of just a few hours today.
Almost all of the top one hundred cryptocurrencies by market cap have seen significant losses within the space of just a few hours today, June 22, as data from Coin360 shows.
Market visualization from Coin360
Total market capitalization of all cryptocurrencies has dropped to just under $268.4 billion at press time, dropping a hefty $16 billion on the day.
Total market cap of all cryptocurrencies from Coinmarketcap
Bitcoin (BTC) is trading around $6,386 at press time, down 7.2 percent over the 24-hour period. The leading cryptocurrency has now reversed a flash three day rally, which saw its price recover to as high as $6,792 June 19.
Bitcoin price chart. Source: Cointelegraph Bitcoin Price Index
Ethereum (ETH) has been hit with an even harder loss over the past 24 hours, dropping 8.2 percent and trading around $492 to press time. The leading altcoin briefly recovered June 18-21 to reclaim the $520-540 range, but today again dipped below the round $500 figure and is trading only just slightly higher than its intra-weekly low of $485.
Ethereum price chart. Source: Cointelegraph Ethereum Price Index
All of the top ten cryptocurrencies by market cap have lost between 4 and around 10 percent over the 24-hour period, according to Coinmarketcap, with EOS dropping most sharply, trading at $9.45 to press time, down 10.08 percent.
Earlier this week, EOS block producers preemptively acted to prevent theft, freezing seven accounts compromised by the registration process through phishing scams. The action led to a backlash from commentators, including high-profile crypto industry players, Nick Szabo and Charlie Shrem:
In EOS a few complete strangers can freeze what users thought was their money. Under the EOS protocol you must trust a "constitutional" organization comprised of people you will likely never get to know. The EOS "constitution" is socially unscalable and a security hole. https://t.co/WusEqBMGBp— Nick Szabo⚡️ (@NickSzabo4) June 19, 2018
“Protecting” “punishing”. No. No one gets to decide those things. You are hair swapping 1 nation state for another one, albeit a digital one. This is the point of crypto, no one should have that power. If you do, then we should just stop wasting everyone’s time. https://t.co/yCh6IIPGqp— Charlie Shrem (@CharlieShrem) June 18, 2018
EOS’ tumbling fortunes this week could also be related to the fact that it is the top-traded altcoin on leading South Korean crypto exchange Bithumb, which suffered a $30 million theft when its hot wallet was hacked on the night of June 19.
At the time of the hack, Bithumb was ranked sixth largest crypto exchange by trade volumes globally, but has now dropped to ninth place following news of the high-profile incident.
While the full details of the hack are still being clarified, Bithumb has said there will be “no damage” to its customers, yesterday confirming it will reimburse affected users. The exchange says it is working closely with the Korea Internet & Security Agency (KISA), the Korean Ministry of Science and Technology (MIC), the national police and others to investigate the theft, and says it will undertake “systematic measures” to prevent a repeat of the incident.
While news of a security breach on a major crypto trading platform can significantly undermine market confidence in the immediate term, analysts have this week been closely following the crypto markets with an eye on technical performance.
The president of Blue Line Futures has said that with Bitcoin’s rolling 30-day annualized volatility declining to 61 percent as compared with its peak of over 150 percent last year, the stats now indicate that “selling has become exhausted,” signalling that cryptocurrencies are likely in a bottoming process.
The traditional financial sector continues to closely follow developments in the crypto and blockchain space, with board director of the Swiss National Bank (SNB) Thomas Moser this week saying that cryptocurrencies and blockchain technology are still too rudimentary to consider issuing a state-backed digital currency, and that he cannot envision an “e-franc” anytime soon. Speaking at the Crypto Valley blockchain conference in Zug, the director admitted that blockchain technology has potential, but only when it “looks very different from what it does today.”
Just yesterday, Bloomberg Terminal announced it would now be listing crypto exchange Huobi's Cryptocurrency Index, which it said was a mark of bringing cryptocurrencies into the mainstream financial marketplace. Bloomberg Terminal will also list prices for nine crypto trading pairs, denominated in Tether (USDT), including Bitcoin (BTC), Litecoin (LTC), Bitcoin Cash (BCH), Ethereum Classic (ETC), Ripple (XRP), Dash, EOS, and ZCash.
Leading U.S. investment banking group Goldman Sachs has this week revealed it is further exploring cryptocurrency trading derivatives, with Chief Operating Officer (COO) David Solomon stating that while the company is already assisting clients in publicly-traded derivatives such as Bitcoin futures, it is also “very cautiously” considering “some other activities” in the field.
Chinese officials are partnering with Tencent on the formation of a new Blockchain Security Alliance.
Aiming to promote security in the blockchain industry, the new alliance was announced at yesterday’s China Blockchain Security Forum in Beijing, hosted by the government-backed China Technology Market Association (CTMA).
According to ChinaNews, the alliance will consist of Tencent’s security arm, CTMA, the China Blockchain Application Research Center, and 20 other public and private institutions, including government advisory agencies, network security firms and blockchain-related organizations.
It is understood that the alliance will work to establish long-term mechanisms for the secure development of the country’s blockchain ecosystem, as well as working to crack down on illicit activities in the blockchain space, including pyramid schemes and fraud.
As ChinaNews notes, the Beijing conference was held amid the backdrop of a rising number of blockchain and crypto-related crimes in the country, most notably a recent suspected crypto pyramid-scheme alleged to have defrauded over 13,000 investors of ¥86 million ($13 million), leading to four arrests in the northwestern city of Xi’an this April.
As an in-depth Cointelegraph report earlier this month outlined, China is nonetheless placing blockchain at the fore of its technological innovation policy, even as it pursues a severe line against cryptocurrencies.
In the most recent high-profile case, China’s President Xi Jinping included blockchain as an example of a “new generation” of technologies that are accelerating “breakthroughs” in “reconstructing the global innovation map and reshaping the global economic structure.”
China’s central bank has recently developed a blockchain system to digitize paper checks, while China’s Ant International - the operator of payment network Alipay - entered into “definitive agreements” earlier this month to secure $14 billion to invest in blockchain, security and related technological innovation.
BitFlyer and Quoine are among the Japanese exchanges receiving regulatory order June 22.
According to press releases listed on its website, the FSA has demanded a risk management overhaul - centered on anti money laundering (AML) and know-your-customer (KYC) requirements - from bitFlyer, Quoine, BTC Box, Bit Bank, Tech Bureau and Bit Point.
As Cointelegraph Japan reports, bitFlyer, currently the 23rd exchange in the world by trade volume, has already begun remedial measures in response to its order, halting new account registrations and reviewing user identification documentation.
The FSA concluded that in bitFlyer’s case, “an effective management management system has not been established to ensure proper and reliable operation of the business, as well as countermeasures against money laundering and terrorist financing.”
Responding to the findings, the exchange was noticeably apologetic to users, saying it would carry out the eleven-point order, which also requires it to submit a progress report by July 23.
“We apologize to all concerned and the customers who have caused a great deal of worry and inconvenience due to this business improvement order,” officials stated.
【当社への行政処分に関するお詫びとお知らせ】— bitFlyer（ビットフライヤー） (@bitFlyer) June 22, 2018
In the intervening period, various other operators have received penalties or have closed altogether, like Bit Station and FSHO earlier in March.
Coincheck itself received stringent supervisory measures before being sold to online broker Monex for the nominal sum of $33 million in April.
The owner of a leading Irish Bitcoin broker has accused banking institutions of discriminating against crypto-related businesses.
The co-founder of Irish Bitcoin (BTC) broker Eircoin accused the Banking and Payments Federation of Ireland (BPFI) of discriminating against crypto-related accounts, The Irish Times reports June 21. Dave Fleming blamed the BPFI for, “seeking to muddy the waters with insinuations of dirty money.”
Eircoin, which is reportedly “Ireland’s only Bitcoin broker,” was closed in April. The firm’s co-founder Dave Fleming said they were “shuttered due to a negligent and defensive banking system”. According to Fleming and his business partner Roisin Coogan, banks also refused banking services to a new secondary consulting business.
Fleming claimed that the closing of the brokerage “reeked of regulatory capture,” which is entirely different from the “arms wide open attitude” of IDA Ireland. IDA Ireland is a state-sponsored agency responsible for attracting foreign investment to Ireland that recently led an initiative promoting blockchain development and investment in the country.
According to Fleming, banking and financial institutions should not be involved in the prosecution of illegal activities associated with crypto trading. Thus, they have no right to refuse firms that deal with cryptocurrencies.
“If any of the Bitcoin sellers in Ireland were involved in terrorist financing I’m sure it wouldn’t be a bank discussing it with us, it would be the law.”
The Irish banks, in turn, denied discriminating against crypto-related businesses. According to The Irish Times, the BPFI, which represents 70 financial institutions, stated that it was not aware of a policy that would allow banks to close the accounts of crypto-related businesses.
One of the leading Irish banks, AIB, also denied claims that it was refusing banking services to crypto-related firms. The bank argued that it “[doesn’t] discriminate in relation to providing banking services to cryptocurrency companies nor [has it] been systematically exiting such companies.”
However, the bank added that they are required to adhere to AML and know your customer (KYC) regulatory requirements for opening and operating bank accounts. According to AIB, some companies were unable to comply.
Banks in numerous countries have shut their doors to crypto businesses and exchanges. In May, Poland’s largest crypto exchange BitBay suspended its activities in the country because banks refused to offer them services. In April, the Reserve Bank of India announced that they will no longer service any person or business that deals with cryptocurrencies. Crypto exchanges in both Finland and Chile have risked total closure as the respective countries’ banks are unwilling to do business.
Ukrainian police have arrested a group of four men suspected of running six fake cryptocurrency exchanges.
Four men between ages 20 and 26 allegedly launched at least six digital currency exchanges, where they deceived users, subsequently stealing money from them. The alleged culprits lured users by promoting the exchanges with fake positive ratings and online reviews. The police reportedly said that the suspects had "special knowledge and skills in the field of programming" and "have created their own CMS-system for managing the content of exchange sites."
During the raid of the suspects’ homes, the police reportedly seized computers, flash drives, smartphones, and other devices. According to a spokesperson for the Ukrainian National Police, “the list of sites is not complete.” Now authorities are asking users to provide information about whether they were deceived by fraudulent exchanges before.
Yesterday, the U.S. Securities and Exchange Commission received an additional emergency court order to freeze the assets of Dominic Lacroix, owner of PlexCorps. Lacroix and his partner, Sabrina Paradis-Royer, were accused of violating securities law in respect to the PlexCoin initial coin offering (ICO) conducted by PlexCorps in August last year. The ICO reportedly raised $15 million from “thousands of investors.”
Earlier this month, Cointelegraph reported that a Bitcoin trader in Los Angeles, California, was facing prosecution for allegedly running an unregistered multimillion dollar Bitcoin-fiat money transmitting business. Accused Theresa Tetley, 50, reportedly earned at least $300,000 annually from her black market business, which ran between 2014 and 2017 via a listing on localbitcoins.com.
U.S. Congressman Warren Davidson says the ICO market needs “light touch” regulation to provide certainty.
When asked about cryptocurrency regulation, Davidson argued that the “big thing” the market needs is a “light touch regulatory framework” which, according to the congressman, would provide more certainty.
Davidson stressed the necessity of defining the status of cryptocurrencies, pointing out the recent announcement of the U.S. Securities and Exchange Commission (SEC) that the top altcoin Ethereum (ETH) will be considered a commodity rather than a security. He added that the government still “[has not] put together” a coherent regulatory framework, claiming that there’s still “arbitrage going on.”
“You don’t really know when somebody does an ICO, whether they are really launching this great distributed ledger product that is going to be a security or if it looks a little different, like [Ethereum] and [Bitcoin] determined to be essentially commodities.”
Davidson stated that a lightweight regulatory framework could provide more clarity to investors without encumbering projects with undue regulations. He said that a clear regulatory framework would save companies from the bureaucratic difficulties of navigating myriad different court decisions at varying levels.
The congressman further explained that the lack of regulatory certainty made the ICO market risky and potentially unsafe, as fraudulent ICO projects could take advantage of investors. He advocated for the proper application of know your customer (KYC) and anti-money laundering provisions to “make sure we protect ourselves.”
When asked why crypto is the “currency of choice” for people engaged in illicit activities, Davidson responded:
“I’m not sure that it would be considered the currency of choice, but it is easy to transmit through time and space, and its distributed, you don’t need a central clearing house… but if you look at how cases like Mt. Gox have been solved, there are ways to trace who is the beneficial owner...”
Davidson said that crypto asset flows are “more trackable than cash,” and “certainly more open than hawala network, and both those things are still legal.”
Yesterday, Nasdaq CEO Adena Friedman claimed that ICOs pose “serious risks” for retail investors and highlighted that the ICO processes have “almost no oversight.” from the SEC in comparison with initial public offerings (IPOs).
On June 19, CBOE Global Markets President Chris Concannon claimed that the ICO market could soon face a two-fold regulatory “reckoning,” should the SEC classify ICOs as unregistered securities.
A board director of the Swiss central bank said that crypto and blockchain are “too primitive” to consider issuing a national digital currency.
Board director of the Swiss National Bank (SNB) Thomas Moser said that cryptocurrencies and blockchain technology are too primitive to consider issuing a state-backed digital currency, local news outlet swissinfo.ch reported June 21.
Speaking at the Crypto Valley blockchain conference in Zug, Moser compared blockchain in its present condition with the “useless innovation” of compact discs (CDs):
“Something similar has to happen with bitcoin. People will only switch to something new if it works better or is cheaper.”
Moser, who was appointed to the board of Switzerland’s central bank in 2010, admitted that blockchain technology has potential, but only when it “looks very different from what it does today.” Given the current state of technology, Moser cannot envision an “e-franc” anytime soon.
At the same conference, member of the Swiss Federal Council Johann N. Schneider-Ammann said that someday blockchain will “penetrate our entire economy.” Schneider-Ammann stated that the country does not know enough about the potential risks, adding that expanding blockchain education is critical.
Switzerland has been recognized as a cryptocurrency and blockchain-friendly country, especially due to the “Crypto Valley,” a center of fintech, blockchain, and digital currency activity located in the canton of Zug. According to a study by blockchain conference BlockShow Europe 2018, the country was ranked number one in a list of the top European countries for launching a blockchain company.
Last month, the Federal Council of the Government of Switzerland requested a report on the risks and opportunities of introducing a government-backed digital currency. The idea to develop a national cryptocurrency was proposed in February by Romeo Lacher, chairman of the Swiss stock exchange SIX. He said, “an e-franc under the control of the central bank would create a lot of synergies - so it would be good for the economy.”
Under new rules, Quebec crypto miners are required to bid for power and quantify the jobs and investment per megawatt that they plan to create.
Provincial utility Hydro-Quebec has proposed new rules, under which blockchain companies will be required to bid for electricity and quantify the jobs and investment they expect to generate per megawatt, Hydro-Quebec announced in a press release June 21.
The new regime seeks to allocate up to 500 megawatts, in addition to 120 megawatts of already existing initiatives. The starting rate is reportedly 1 Canadian cent ($0.0075) per kilowatt hour, which is 20 percent above the industry standard price. The new plan is subject to approval by local energy regulator Regie de l’energie. Hydro-Quebec commented on the new proposal:
“The goal of this process is to both maximize economic spinoffs for Quebec and revenue for Hydro-Quebec – in turn, pushing electricity rates down for customers.”
The latest development follows a series of changes in the Quebec government and power supplier’s policy towards cryptocurrency mining. In March, the government said it is “not interested” in providing cheap electricity to crypto miners without anything in return. Premier Philippe Couillard said:
“There needs to be added value for our society; just having servers to do transaction mining and acquire new bitcoins, I don’t see the added value.”
In May, the government of Quebec announced it would lift the moratorium on the sale of power to crypto miners in order to “avoid missing the ship” on digital currency. The Minister of Energy, Pierre Moreau, was going to introduce a decree on the regulation of electrical power sale to crypto miners, who require massive amounts of power for their operations. The decree would reportedly set different rates for digital currency miners and allow energy companies to practice forced offloading.
Hydro-Quebec, which operates some 60 hydroelectric generating stations, with a surplus capacity of roughly 13 TWh, received requests to purchase power from more than 100 organizations with a total energy consumption exceeding 10 TWh. In the beginning of June, the the company temporarily stopped processing requests from crypto miners in order to fulfil its obligations to supply energy to the entire province.
Cameron and Tyler Winklevoss’ Winklevoss IP has won yet another patent, this time for system to provide crypto-based ETPs.
U.S. crypto entrepreneurs Tyler and Cameron Winklevoss have won a patent for a system to provide crypto-based exchange-traded products (ETPs), according to a patent filing published by the U.S. Patent and Trademarks Office (USPTO) June 19.
The new patent represents systems, methods and program products for using ETPs that hold “digital assets” and “other products and/or services related to ETPs holding digital assets,” such as Bitcoin (BTC) and other cryptocurrencies, including Ethereum (ETH), Ripple (XRP), and Litecoin (LTC).
Filed on Nov. 27, 2017 by Winklevoss IP, the patent includes both brothers as the inventors, as well as Evan Louis Greebel, Kathleen Hill Moriarty and Gregory Elias Xethalis.
ETPs are a type of security where the value is derived from other investment instruments, such as commodities, currencies, share prices or interest rates. In this case, the ETP’s price is derived from cryptocurrencies.
In May, the Winklevoss brothers were granted a similar patent for a system that allows Winklevoss IP to settle ETPs using cryptocurrencies.
Previously in March 2017, the U.S. Securities Exchange Commission (SEC) rejected the Winklevoss twins’ application to create a Bitcoin-based exchange-traded fund (ETF), citing that "the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest."