Press Blockchain and CryptoCurrency
The World Payments Report 2018 has found that blockchain is currently not able to meet the requirements of the financial market.
The World Payments Report 2018 published Oct. 16 has found that distributed ledger technology (DLT) is not currently capable of meeting financial market demands. The annual report was jointly compiled by consulting and technology services firm Capgemini and leading European bank BNP Paribas.
To prepare the report, researchers conducted an assessment based on multiple criteria, including industry governance, market dynamics, demographics, and enabling infrastructure. The companies also interviewed executives and distributed an online survey to industry participants.
In the report, the authors address challenges facing DLT adoption. Of all the participants in the poll, 85.9 percent reportedly cited lack of interoperability, 83.1 percent lack of regulatory clarity, and 77.8 percent the scalability issue, as factors limiting adoption. Over 60 percent of respondents highlighted such problems as security, cost of implementation, and time required to add a block to the transaction.
The report also stated that DLT innovation and projects were often confined to research labs or to the proof-of-concept (PoC) stage. A lack of interoperability between DLT and banking systems purportedly stymies the implementation of scalable solutions. “Multiple DLT systems create a fragmented market with limited connectivity between solutions, which leads to inefficiencies and limited adoption,” the report further reads.
Per the report, the legal risk for DLT is represented by an uncertain regulatory environment and a lack of legal frameworks in most countries. The report cites a three-year experimentation with DLT by De Nederlandsche Bank (DNB), saying that “in its current state it [DLT] fails to meet the very high demands of a financial market infrastructure.”
DNB, however, further states that DLT could replace some market infrastructures, including interbank settlements and cross-currency transactions. According to DNB, those areas could leverage DLT’s fullest potential, with benefits outweighing the costs.
The issue of whether blockchain is scalable enough to meet certain market demands has been of concern to many industry players. A recent 19-week study by the Depository Trust & Clearing Corporation (DTCC) found that blockchain is capable of supporting the daily trade volume of the U.S. equity market. The DTCC notes that the study only tested basic functionality, stating that subsequent work must determine whether DLT is able to meet resiliency, security, and operational needs.
Major Chinese mining hardware manufacturers could fall under new U.S. tariffs on Chinese-manufactured goods, reaching as high as 25 percent.
Major mining hardware producers, such as Bitmain, Canaan and Ebang, could be affected by recently imposed U.S. sanctions on Chinese goods, Hong Kong’s English-language newspaper South China Morning Post (SCMP) reports Tuesday, Oct. 16.
Analysts cited by SCMP believe these tariffs could possibly affect China’s major mining hardware producers, as the technology was reclassified by the office of the United States Trade Representative (USTR) to fall under a stricter tariff regime.
This summer the Trump administration significantly increased U.S. tariffs on more than 250 Chinese goods. In June, the USTR reclassified Bitmain’s Antminer S9 as an “electrical machinery apparatus,” subjecting it to a 2.6 percent tariff. Additional tariffs were introduced in August, when fees were increased up to 25 percent on $267 billion of Chinese-made imports.
The 25 percent tariff combined with the previous regime means that mining hardware manufacturers face a 27.6 percent tariff, where previously there was zero. Ben Gagnon, the co-founder of Bitcoin (BTC) mining hardware developer LuTech, told SCMP:
“All manufacturers of mining rigs based in China will likely be affected by the tariff code change and, in turn, captured by the US trade tariff.”
SCMP states that, in 2017, overseas sales accounted for 8.5 and 3.8 percent of total revenue at Canaan and Ebang, respectively.
The new tariff regime could prove especially burdensome for Bitmain. According to its pre-Initial Public Offering (IPO) prospectus, foreign sales accounted for 51.8 percent of total revenue in 2017. Per an expert cited by SCMP, mining hardware sales accounted for 94 percent of the company’s total revenue in 2018.
On the eve of its IPO — aimed to raise anywhere from $3 billion to $18 billion — Bitmain faced some major challenges. As Cointelegraph previously reported, the hardware producer could face serious losses after investing a significant amount of its fund in Bitcoin Cash (BCH). Moreover, the company’s pre-IPO triggered numerous rumours as alleged participants, such as SoftBank and the Chinese IT-giant behind WeChat, Tencent, officially denied their participation.
Diversified crypto and blockchain firm DMG Blockchain will develop a blockchain-powered platform to manage supply chains in the Canadian marijuana industry.
Canada-based blockchain and crypto company DMG Blockchain Solutions Inc. (DMG) has announced the development of a global supply chain management platform for the legal cannabis industry, according to an announcement published Oct. 17.
As reported by Canada’s national public news and information service CBC, the country’s government officially legalized recreational marijuana as of today. Cannabis was previously available only for medicinal use within the country.
According to Health Canada, there are currently over 120 licensed cannabis producers in Canada, where one of the top producers has already stated that labor shortages and supply chain issues could lead to scarcity soon after it becomes legal.
DMG is currently negotiating with marijuana industry players, quality assurance labs, distributors, and regulators about launching its cannabis supply chain solution in compliance with industry specific requirements. Among the planned capabilities of the new blockchain platform, DMG cites interoperation with legacy systems, onboarding of new participants, as well as defective product recall.
DMG’s CEO Dan Reitzik said that “the emerging cannabis industry demands product management solutions and blockchain is the most logical choice,” adding that “the first use of blockchain was Bitcoin (BTC), but the perfect use is supply chain management for controlled products such as cannabis.”
According to statistics provided by DMG, the cannabis market is a $23 billion industry in Canada alone, while 13 million recreational consumers produce $6 billion in revenue.
Blockchain technology has been actively deployed in agriculture and food supply chains. Earlier this month, IBM launched its blockchain-based food tracking network, Food Trust to connect different parties in the food industry. During the trial period, which started August 2017, the company partnered with Nestle SA, Dole Food Co., Driscoll’s Inc., Golden State Foods, Kroger Co., McCormick and Co., McLane Co., Tyson Foods Inc. and Unilever NV.
Last month, U.S. retail giant Walmart and its division Sam’s Club announced they will require suppliers of leafy greens to implement a farm-to-store tracking system based on blockchain to “dramatically [improve] efficiency.”
While institutional investors take their time to enter the market, is it worthwhile to buy and hold or is there a risk of a further fall? Let’s find out.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Market data is provided by the HitBTC exchange.
While crypto markets have given up much of their Oct. 15 gains, they are still trading well above the recent lows, which is a positive sign. A knee-jerk reaction to a news event can propel the markets only to a certain level, after which fundamentals take over. The next leg of the up move will be based on strong fundamental news flows.
Crypto markets have been waiting for institutional investors to take it to the next level. Mike Novogratz, CEO and Founder of Galaxy Investment Partners believes that larger players might enter the markets in Q1 or Q2 of next year, pushing it to new highs.
The launch of Fidelity Digital Asset Services, by leading U.S. investment firm Fidelity, is a step in the right direction, providing institutional players a “secure, compliant, and institutional-grade omnibus storage solution for Bitcoin, [Ethereum] and other digital assets.”
However, larger players are likely to test the waters before jumping in, which may take some time. Until then, is it worthwhile to buy and hold or is there a risk of a further fall? Are any of the top cryptocurrencies showing a reliable buy setup? Let’s find out.
After the spurt on Oct. 15, Bitcoin has been consolidating just below the overhead resistance at $6,831.99. Ideally, after invalidating a bearish pattern, the price should have rallied, but that has not happened.
Now, if the bulls fail to scale the resistance levels quickly, it will invite selling by the bears. A drop below the moving averages will retest the critical support zone of $6,075.04–$5,900.
Though the BTC/USD pair has broken out of the downtrend line of the descending triangle, it has not picked up momentum. The moving averages remain flat, which shows equilibrium between the bears and the bulls.
The balance will tilt in favor of the bulls if the virtual currency sustains above $6,831.99. The upside targets to watch are $7,400 and $8,400. Traders holding long positions can maintain the stop loss at $5,900.
The next few days are critical and will provide an insight on the next direction of the digital currency.
Though Ethereum continues to consolidate, the bears have pushed it down towards the lower half of the range. The price is trading below both the moving averages and the RSI is also in negative territory.
If the bulls fail to scale the moving averages within the next few days, the ETH/USD pair might retest the support at $192.50, below which a drop to the Sept. 12 low of $167.32 is probable.
Contrarily, a rally above the overhead resistance will indicate strength and can carry the digital currency to the next resistance at $322.57. Therefore,traders should wait for a close (UTC time frame) above $249.93 before initiating any long positions.
Among all the top 10 cryptocurrencies, Ripple is the only one that has risen above its Oct. 15 intraday high. It is also trading above the moving averages, which is a positive sign.
The XRP/USD pair is on track to move up to $0.50 where it might face some resistance. Above this level, a rally to $0.55 and $0.625 is probable.
If the digital currency turns down from $0.50, it can decline to the 50-day SMA, which should act as a support. Both the moving averages are flat and the RSI is close to the midpoint. This points to a consolidation in the short-term.
Bitcoin Cash continues to trade inside the symmetrical triangle as a breakout or a breakdown evades it.
The BCH/USD pair is trading below the moving averages and the 20-day EMA is turning down. The RSI is also in negative territory; which shows that the bears have an upper hand.
A breakdown of the triangle will resume the downtrend, with minor support at the Sept. 11 low of $408.0182. The digital currency will show strength if it breaks out of the triangle. The traders can keep the stop loss on their existing long positions at $400.
EOS is currently trading close to the midpoint of the $6.8299–$4.4930 range. Both the moving averages are flat and the RSI is also in neutral territory. This shows that neither party has an upper hand.
A new uptrend will start on a breakout and close above the overhead resistance of $6.8299. Such a move can carry the EOS/USD pair to $9 and higher.
On the downside, if the bears break below the immediate support of $5, a fall to the lower levels of $4.49 and $3.8723 is possible. Therefore, traders can protect their long positions with a stop loss of $4.90.
Stellar has been trading above the moving averages, which is a bullish sign. It is currently trying to break out of the downtrend line and the overhead resistance at $0.24987525.
If successful, it will invalidate the bearish descending triangle pattern and rally to $0.36, with a minor resistance at $0.30 probable. Traders can initiate a long position on the XLM/USD pair if it closes (UTC time frame) above $0.27.
On the downside, the digital currency has support at the moving averages and below that in the $0.204–$0.2148 zone. If this zone breaks, a retest of the critical support at $0.184 will be in the cards.
After the surge on Oct. 15, Litecoin has again fallen to the bottom half of the range. Both the moving averages are flat and the RSI is in the negative zone.
If the LTC/USD pair trades below the moving averages for a few more days, the bears might attempt a breakdown of the range once again. Any breakdown of the $47 level will resume the downtrend and push prices to the next support at $40.
The digital currency will form a reversal pattern if the bulls breakout and sustain above $69.279. We don’t find any trade as long as the price remains inside the range.
Cardano is struggling to climb above the moving averages. Currently, it is trading between the 20-day EMA and $0.073531.
Both the moving averages are flat and the RSI is close to the 50 level, which shows a neutral sentiment. If the bears break below the intraday low of Oct. 15, the ADA/USD pair can retest the low at $0.060105.
The digital currency will show signs of strength if it breaks out of the overhead resistance at $0.094256. We suggest traders remain on the sidelines until a new buy setup forms.
Monero has broken below both the moving averages. It is currently trying to stay above $107.80, below which it can slide to the $100 level once again.
Failure of the bulls to keep prices above the moving averages shows weakness. If the bears break below $100, a retest of $81 is probable.
The XMR/USD pair will gain strength above $128.65. Currently, we don’t find any buy setups, hence, we are not suggesting any trade.
After failing to sustain above the overhead resistance on Oct. 15, TRON is currently back in the range. The bulls are trying to keep the price above the moving averages, below which the digital currency can drop to the bottom of the range.
We don’t find any buy setups as long as the TRX/USD pair remains stuck inside the $0.02815521–$0.0183 range. Its next move will start either on a breakout of the range or a breakdown from it.
There have been two intraday breakouts of the range that failed to sustain. Therefore, traders should wait for a close (UTC time frame) above the range before establishing any long positions.
CryptoCompare’s yearly report indicates a tendency to centralize crypto assets, as 85 percent of their developers can change protocols at any time.
Cryptocurrency tracking resource CryptoCompare's recent study has shown that 85 percent of crypto assets allow development teams to alter their platforms. The report was published Wednesday, Oct. 17, on CryptoCompare's website.
To create the report, CryptoCompare reviewed hundreds of crypto and blockchain projects, with experts detecting a tendency towards centralization set by utility tokens that are running on controlled servers.
According to the research, as many as 85 percent of developers can change the protocol on their projects at any moment at their own discretion.
The yearly taxonomy of cryptocurrencies also revealed that 55 percent of existing crypto assets are actually centralized, while 30 percent more are semi-decentralized. As a conclusion, only 16% of all existing crypto assets are considered to be a fully decentralized ecosystem. However, CryptoCompare’s total amount equals 101 percent instead of 100 percent, which might indicate a reporting error.
The situation is slightly less decentralized with tokens utilized as a method of payment. As per the report, almost 41 percent of them are centralized, while another 22 percent are centralized to some extent.
CryptoCompare's study also reveals that most cryptocurrencies can technically be classified securities. To prove this point, they apply to the guidelines established by the Swiss Financial Market Supervisory Authority (FINMA).
Following FINMA’s guidelines, Bitcoin (BTC) and Ethereum (ETH) are not securities due to the lack of an identifiable common enterprise and a high level of decentralization. However, 55 percent of crypto assets could be treated as securities and fall under existing regulation, CryptoCompare states.
As Cointelegraph previously wrote, Canadian mass media and information company Thomson Reuters — which owns major international news agency Reuters — has recently partnered with CryptoCompare. The resource will provide trade data on 50 cryptocurrencies for Reuters’ financial desktop platform, Eikon, which was developed for institutional investors.
Bitcoin futures trading at the CME has continued to grow in Q3, with average daily trading volume up 41% over Q2.
The CME has revealed that the average daily trading volume (ADV) of Bitcoin futures has increased by 41 percent in Q3 over Q2, while open interest (OI) — or the number of open contracts on Bitcoin futures — has risen by 19 percent in the third quarter.
CME Bitcoin Futures ADV and OI in Q1, Q2, and Q3 2018. Source: CMEGroup
Compared to the results of the second quarter over the first quarter, the trading dynamics have now been growing at a slower pace than in Q3. On July 20, the CME reported that Bitcoin futures trading in Q2 had seen a large increase, with ADV and OI up 93 and 58 percent over Q1, respectively.
CME Group is one of the biggest global exchanges and the largest options and futures contracts OI of any futures exchange in the world. The company had also launched Bitcoin futures trading on Dec. 17, 2017, shortly after the launch of BTC futures by the Chicago Board Options Exchange (CBOE) on Dec. 10.
In early October, crypto analyst and host of CNBC’s show Cryptotrader Ran Neu-ner had predicted that Bitcoin price is “about to explode” in the wake of the upcoming decision on several Bitcoin Exchange-Traded Fund (ETF) applications by the U.S. Security and Exchange Commission’s (SEC).
In his prediction, Neuner compared ETFs with Bitcoin futures, claiming that the expectation of BTC futures contracts allegedly made the major cryptocurrency rally last year from “$6,691 (Nov. 11) to $20,000 (Dec .17).”
Recently, Bloomberg reported that the CME was not planning to introduce futures on any cryptocurrencies other than Bitcoin in the near future. Terry Duffy, chief executive officer of CME, had reportedly revealed that the company should first work on the approach to Bitcoin futures, since it “might have been the most controversial launch of a product.”
Earlier this year, the Federal Reserve Bank of San Francisco alleged that a sharp decline in the crypto markets in 2018 had been caused by the Bitcoin futures launch. The bank stated that it considered that the “subsequent fall in the price” after BTC futures trading did not appear to be a “coincidence.”
Cointelegraph investigates Redditors’ allegations that American Express has sponsored crypto-skeptical content on Twitter.
The tweet in question was allegedly circulated through Bloomberg’s Twitter network “TicToc” on Oct. 11, and was reposted as a screenshot to Redditor u/Alexsayzz’s thread titled “Anti-crypto propaganda... promoted by American Express,” which has had 4,100 upvotes and drawn 437 comments as of press time.
As the screenshot reproduced below indicates, the tweet appears to have the hallmarks of a promoted post, and is recorded as having 42,000 views at the time the screenshot was taken.
The allegedly sponsored tweet contains a multimedia article — referring to “estimates” from Bloomberg’s energy industry research team, Bloomberg NEF — that contends the crypto industry “is using more energy than all the world's electric vehicles.”
The tweet plays into the notion that the high amounts of energy needed to power the mining of cryptocurrencies such as Bitcoin (BTC) is the coin’s “achilles heel” — a long-standing, if frequently contested, argument.
Titled “Crypto’s Hidden Costs,” the piece covers the controversial energy-intensive Bitcoin (BTC) mining process. It frames two interviews with figures from the blockchain space, who give their opposing views as to the benefits of using clean energy to fuel crypto mining.
The tweet’s alleged promotion by a major card payments industry player such as Amex has been lambasted as “propaganda” by the thread’s contributors, who view Amex’s position as being in direct competition with the emerging cryptocurrency sector, and therefore as having an arguably vested interest in promoting crypto-skeptical content.
Cointelegraph’s investigation into the Reddit allegations did not lead to the allegedly Amex-sponsored content itself. A tweet containing the same multimedia article is still to be found on the TicToc feed here, dated Oct. 10, but without the “promoted by American Express” included.
However, an anonymous source at Twitter has confirmed in private correspondence with Cointelegraph that the tweet in question was indeed promoted for some period, although they could not identify the sponsor.
In order to confirm whether or not the tweet was indeed Amex-promoted content, Cointelegraph used a tool Twitter provides that enables users to retrieve tweets that have been promoted by a specific account. However, entering either TicToc or Amex fails to retrieve the relevant tweet.
As of press time, Amex has not responded to Cointelegraph’s request for comment.
While the alleged sponsor of the tweet cannot be confirmed via the platform itself by Cointelegraph’s methods by press time, it remains possible that the tweet in question may have been deleted, or that Twitter’s transparency tool for promoted content may be unreliable and fail to comprehensively retrieve all tweets.
Another possibility is that the Redditor’s image was fabricated to create the false impression that Amex has been involved in the promotion of anti-crypto material, in an attempt to quash competition from the emerging sector.
In June, the temporary failure of Visa’s transaction service in Europe — a competitor for MasterCard — highlighted the 99.98 percent functionality of Bitcoin’s decentralized network since its inception on Jan. 3, 2009.
Cryptocurrencies and advertising have sparked controversy in the past, notably with tech giants’ bans on crypto-related advertising. Google, Facebook and Twitter have all in the past banned crypto ads, although Facebook has since reversed its ad ban for pre-approved crypto firms, while still maintaining a ban on Initial Coin Offering (ICO) advertisement; Google made a similar move several weeks ago.
Binance is using Chainalysis’ AML/KYC product to grapple with multiple international jurisdictions’ regulations.
Crypto compliance provider and research firm Chainalysis announced it had partnered with exchange Binance in a press release Wednesday, Oct. 17, in order to improve its detection of suspicious transactions.
Binance, currently the world’s largest cryptocurrency exchange by volume, continues to expand into various international markets, being required to comply with each jurisdiction’s anti-money laundering (AML) and know-your-customer (KYC) rules.
Chainalysis eases this process, the firm claims, through the use of real-time monitoring to track the provenance of each transaction made on Binance’s platform.
The solution, known as know-your-transaction (KYT), saw its initial release in April, the press release notes.
“Cryptocurrency businesses of all sizes face the same core challenge: earning the trust of regulators, financial institutions and users,” Jonathan Levin, co-founder and COO of Chainalysis commented in the press release, adding:
“We expect many to follow Binance’s lead to build world-class AML compliance programs to satisfy regulators globally and build trust with major financial institutions.”
2018 has seen various well-known exchange platforms — including P2P ecosystem Localbitcoins — introduce additional compliance measures, some of which have jarred with cryptocurrency users that value anonymity. As well, in September, crypto exchange ShapeShift introduced a membership program that will gradually become mandatory and require the provision of “basic” personal information.
Explaining its own implementation of AML and KYC rules, Binance implied such measures were necessary to permit further expansion.
“Our vision is to provide the infrastructure for a blockchain ecosystem and increase the freedom of money globally, while adhering to regulatory mandates in the countries we serve,” Binance CFO Wei Zhou said.
Stablecoin Tether has dipped below its 1:1 ratio with the US Dollar after a year of uncertainty regarding its fiat currency reserves.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, you should conduct your own research when making a decision.
The stablecoin, by virtue of that very description, was linked to the US Dollar at a 1:1 ratio. Simply put, every Tether token that was minted had to be backed by a US Dollar.
Concerns around the validity of Tether’s reserves of fiat currency corresponding to the circulating amount of tokens seem to have taken its toll. On October 15, the cryptocurrency dipped below the $1 mark amid a wave of negative sentiment that has led to an apparent sell-off of Tether tokens.
Another factor that may have influenced the drop in value of Tether was a report at the beginning of the month which stated that both Tether and Bitfinex, the exchange responsible for issuing the tokens, had parted ways with Noble Bank in Puerto Rico.
This was followed by Bitfinex temporarily suspending fiat wire deposits - with no specific reason given for the decision. It could well be that the closure of its Puerto Rican bank account has exacerbated the situation.
Tether is still trading below $1 according to data from CoinMarketCap.
Image source: CoinMarketCap
A history of Tether
The project was initially founded by Bitcoin Foundation director Brock Pierce, alongside software engineer Craig Sellars, and entrepreneur Reeve Collins. The RealCoin startup laid the foundation for Tether’s operation before the name change came about.
The premise of the cryptocurrency was simple, to provide a utility token that represented certain fiat currencies at a 1:1 ratio, with the benefits of cross-border payments facilitated by blockchain technology.
The cryptocurrency was built and operated using an OmniLayer platform, a software layer built on the Bitcoin protocol. Thus, every time new Tether tokens were issued, these could be tracked on the platform, allowing the wider cryptocurrency community to keep tabs on how many new Tethers were released.
Tether and Bitfinex
Tether has had an interesting association with Hong Kong based exchange platform Bitfinex. The exchange integrated Tether into its operation in January 2015, but the relationship has come under intense scrutiny over the last few years.
According to Tether’s official website, the company shares the same leadership as Bitfinex. JL van der Velde is CEO of both companies, and Giancarlo Devasini is the chief financial operator of both operations as well.
The main reason for this has been spikes in the value of Bitcoin and other cryptocurrencies following the periodic issuance of new Tether tokens. Critics have claimed that the newly minted tokens were being used to prop up or manipulate the value of other cryptocurrencies.
While there is nothing to stop people from buying Bitcoin with fiat currencies or various cryptocurrencies on a multitude of exchanges, the use of Tether to do this has been disconcerting for one major reason.
Since its inception, Tether has asserted that it always has the necessary fiat reserves to back all circulating tokens in the market. The website even provides a real-time ledger of Tether tokens in conjunction with their underlying monetary reserve.
Tether’s account balances according to the ‘Transparency’ page on its website. Source: Tether
However, there have been claims that not all Tether tokens which are issued, have the necessary fiat currency reserve to back it up.
No official audit
While Tether’s balance sheet on its website claims to provide a transparent reflection of its accounts, Tether has failed to complete an audit of its accounts by a third-party - which was promised in 2017.
The crypto community began to put pressure on the company to conduct a full audit to allay fears of inadequate cash reserves to the number of Tether tokens. To this end, Tether acquired the services of Friedman LLP to conduct a short review of its account balances.
Following that, the company published a memo of a short report from Friedman LLP with the company’s accounts - in the hopes of appeasing the concerns of various parties online:
“We hope that the community considers the attached memorandum for what it is: a good faith effort on our behalf to provide an interim analysis of our cash position and our issued and outstanding tokens, as part of ongoing efforts to further professionalize the transparency mechanisms of Tether Limited.”
As various critiques came out in public, Bitfinex eventually threatened legal action against parties that were questioning the authenticity of their operation in November 2017.
With the pressure firmly on, Tether got Friedman back to conduct a full audit in January 2018. But less than a month into the process, Tether stopped the auditing process, claiming that it wouldn’t be completed in a reasonable period of time, according to Bloomberg:
“Given the excruciatingly detailed procedures Friedman was undertaking for the relatively simple balance sheet of Tether, it became clear that an audit would be unattainable in a reasonable timeframe.”
While that report may have settled some concerns around the validity of Tether’s claims, a research paper published in June from the University of Texas blamed Tether for Bitcoin price manipulation in 2017.
By using algorithms to analyze market data, the report claimed that purchases with Tether were timed after downturns in the cryptocurrency markets which resulted in price increases in the value of Bitcoin.
In the same month, a law firm in the US released a report stating the Tether did actually have the adequate reserve of fiat currency to back tokens in circulation. Law firm Freeh Sporkin & Sullivan LLP had access to two of Tether’s bank accounts to release its findings - which were not an official audit.
In response to the report, Tether’s general counsel Stuart Hoegner told Bloomberg that mainstream accounting firms would not conduct official audits on companies working with cryptocurrencies:
“The bottom line is an audit cannot be obtained [...] The big four firms are anathema to that level of risk. We’ve gone for what we think is the next best thing.”
New Tether continues to be minted throughout 2018
Despite all of this media attention, Tether tokens have continued to be issued through the year, according to data from Omni Explorer.
Source: Omni Explorer
Major stablecoin competitors launched
Both stablecoins are based on the Ethereum blockchain using ERC-20 token standards, which also ensures full transparency of these coins, as Ethereum can verify the smart contract of both ERC-20 tokens.
This should also rule out the need for third-party service providers and exchanges in order to make transactions with these stablecoins.
Crypto community wants transparency
An overarching theme of the Tether saga has been the lack of trustworthy transparency when it comes to the necessary reserves of fiat currency to back-up newly minted coins.
To date, Tether has not undertaken or released an official third party audit of its accounts. While the community would love to give them the benefit of the doubt, hundreds of millions of dollars have been spent on Tether tokens and this necessitates a transparent and trustworthy audit.
If the company had carried out this process, at whatever cost and given timeframe, all fears could have been allayed. The failure to do so has led to serious uncertainty, the consequences of which are apparent in the current valuation of Tether tokens.
The launch of new stablecoins by highly reputable service providers has the potential to provide a viable alternative to Tether. The pressure is firmly on the company to prove it is running a transparent operation.
The Uzbek city of Tashkent has signed a deal with a Russian startup to digitize patent records and make intellectual property profitable.
A Russian intellectual property startup has signed a memorandum with officials from Uzbek capital Tashkent to integrate blockchain for use in copyright, Russian state news agency TASS reports Tuesday, Oct. 16.
The president of the Russian National Intellectual Property Transactions Coordination Center (IPChain), Andrey Krichevsky, met the head of Tashkent's department of innovations Jasur Zakhidov during the Open Innovations Forum in Moscow. Both parties agreed to implement decentralized solutions to protect copyrights in different areas, such as intellectual property and patent records.
Zakhidov further explained that blockchain could help develop the whole copyright sphere and make it profitable, noting that “scientists, inventors and creators do not usually understand how to monetize their intellectual property,” and adding:
"Our partnership [...] will likely give an impetus to the development of intellectual property area in Uzbekistan. From now on they are going to know that the copyright actually works and is profitable. As a capital, we have to help authors and to show them ways to earn money."
As Cointelegraph reported in April, IPChain signed a deal to digitize patent records and create a blockchain-based database for the State Patent Office of Kyrgyzstan. According to the head of IPchain, similar projects have already been discussed with Armenian officials as well.
Uzbek president Shavkat Mirziyoyev has recently taken several important steps to promote blockchain technology in the country. In July, he signed a document called "On measures for digital economics development in the Republic of Uzbekistan,” which stated that a blockchain integration program for international clearing facilities as well as lending and trade finance should be introduced by 2020.
In September, Mirziyoyev ordered the establishment of a state blockchain development fund called the "Digital Trust." According to the plan, decentralized solutions would be implemented in healthcare, education, and cultural areas.
Rwanda’s tantalum mining traceability will be improved by British blockchain startup Circulor in tandem with Rwanda’s government.
Rwanda is the world’s leading producer of tantalum, the mineral used in consumer electronics such as smartphones and computers. By using blockchain technology in partnership with startup Circulor, the Rwandan Mining, Petroleum and Gas Board plans to make the production of tantalum more transparent.
The press release states that blockchain tech implementation will help “companies comply with the internationally mandated efforts to eradicate sources of funding for conflict minerals.”
According to Reuters, mining company Power Resources Group (PRG) — whose listed partners include Kemet, an Apple supplier — has run a pilot for tracing the metal and is now “using the production system.” PRG’s CEO, Ray Power, told Reuters that he has been hearing “criticisms on traceability” for minerals since 2015.
The companies have partnered to use Circulor’s blockchain platform, built on the Hyperledger Fabric, an open source enterprise-focused digital ledger software hosted by the Linux Foundation, for tracing the tantalum’s supply chain.
Douglas Johnson-Poensgen, Circulor CEO, underlined that the new technological application will “dramatically reduce costs for miners who current shoulder a disproportionate share of the cost of compliance.” He also added:
“Our blockchain platform will empower consumers to understand where the materials in the products they buy come from and also make it harder for materials that are not ethically sourced to pass through the supply chain.”
This spring, Circulor had partnered with the German car manufacturer giant BMW “to track so-called ‘clean’ cobalt supplies in order to ensure their ethical provenance,” Cointelegraph reported March 6.
Also this spring, De Beers, the global diamond producing giant, had announced the use of blockchain technology for digital tracking diamonds “from mine to retail.” The company’s goal was to increase efficiency in the supply chain and to support consumer and public trust in De Beers’ non-conflict diamonds production.
The UK-based industry body RFI Foundation plans to develop a blockchain tool to track firms’ sustainable commitments.
The Responsible Finance & Investment (RFI) Foundation is developing a blockchain-powered tool to track companies’ sustainable commitments and to detect those entities who do not comply with their ethical credentials.
The new system is expected to enable the industry group to reduce so-called “greenwashing,” a practice that implies firms claiming that they are more ethical or ecologically friendly than they are in fact.
The RFI Foundation’s initiative comes as a part of a plan to expand activity beyond its main centers in Europe and North America, with governments such as Indonesia releasing green bonds for the first time in 2018. The industry group will collaborate on the project along with 23 other participants in order to introduce the tool in the 2019, chief executive Blake Goud revealed to Reuters.
Goud claimed that while a number of financial institutions are “taking advantage of the opacity of commitments and actions,” the new blockchain-powered system will allow them to identify companies’ practices in responsible finance “in real time,” as well as will assist new entrants to the sphere.
In April 2018, 22 countries, including 21 EU member states and Norway, signed a declaration to set up a European Blockchain Partnership in a move to become leaders in digital technologies and to provide high standards of blockchain uses in Europe, as well as to improve the quality of cross-border standards and regulatory reporting.
On Oct. 14, Cointelegraph reported on the increasing size of the European Blockchain Partnership — with latest entrant Italy signing the declaration in late September — underlining its commitment to assist in identifying an “initial set of cross-border digital public services” that can be potentially implemented through the European Blockchain Services Infrastructure.
The CFTC’s Brian Quintenz has addressed the question of accountability in an era of disintermediated finance and smart contracts.
The U.S. Commodity Futures Trading Commission (CFTC)’s Brian Quintenz has addressed the question of accountability in an era of disintermediated finance and smart contracts. The commissioner made his remarks at the 38th Annual GITEX Technology Week Conference in Dubai Tuesday, Oct. 16.
Broadly, the commissioner proposed that when it comes enforcement actions, not only users, but the coders themselves may be held to account. Quintez explained:
“The appropriate question is whether these code developers could reasonably foresee, at the time they created the code, that it would likely be used by U.S. persons in a manner violative of CFTC regulations."
Quintenz framed his discussion by noting the complications that arise when applying traditional legal paradigms to “the disintermediated world of blockchain,” emphasizing the challenges that the emerging sector poses to the CFTC’s particular role, which is intermediary-focused and centers on preserving market integrity through oversight.
In the case of disintermediated finance, however, the key players are instead the core developers of a given blockchain network, its miners and users, all of whom operate in an “anonymous, decentralized” framework.
To tackle the regulatory concerns raised by this context, Quintenz focused in particular on smart contracts, which function on a blockchain and are programmed to interact according to binding, pre-specified rules.
As Quintenz noted, these contracts are “self-enforcing,” and “operate without further intervention.” However, he rebutted the well-known crypto adage “code is law,” arguing that even though smart contracts complicate existing frameworks and the question of accountability, they nonetheless fall subject to regulations and particular legal precedents.
In many cases, he argued, the basic nature of such contracts can be identified as having the “essential characteristics” of traditional derivatives products: they may resemble a swap, or have “exchange-like functions by facilitating trading.”
One such example would arise with individuals who develop “predictive data about future financial events, like a stock’s performance [...] [and] offer their data for purchase via smart contracts.”
The offering of this data could fall under regulators’ purview either through being deemed “investment advice,” or even, “given the anonymity of the predictions,” being considered to be “nefariously” enabling ”insider trading.”
In other cases, smart contract protocols enable “individuals to bet on the outcome of future events, like sporting events or elections” using crypto, which he suggested can in some cases resemble what the CFTC considers to be a “‘prediction market,” noting that:
“In the past, the CFTC has generally prohibited prediction markets as contrary to the public interest, only permitting them in limited circumstances when it has found that they operate on a small-scale, non-profit basis, and serve academic purposes.”
As reported yesterday, former CFTC chairman Gary Gensler emphasized that most tokens sold through Initial Coin Offerings (ICOs) should be classified as securities, and be brought under the regulatory purview of the U.S. Securities and Exchange Commission (SEC).
A blockchain company wants to make its technology so easy that “consumers do not know they are using blockchain.”
A blockchain-driven startup believes that blockchain technology has the potential to be more than a “one trick pony designed for investors” – setting the objective of creating cutting-edge technology for fast transactions, and delivering “practical services for real people.”
According to ARK, its entire ecosystem has been built around encouraging the mass adoption of cryptocurrency through a user-friendly platform. The company says its team is determined to ease consumers into blockchain by creating easy-to-use tools and products that gradually increase awareness and general knowledge about the opportunities that blockchain technology provides.
Among ARK’s distinctive features is a development called SmartBridge, which enables its blockchain to interact with any other popular networks, including Bitcoin and Ethereum. “Continuous risk analysis and internal recurring penetration testing is constantly being carried out” to assuage fears about security.
Overall, the company hopes to make blockchain creation and adoption as easy as making a website with Wordpress.
Desktop, mobile, and hardware wallets
ARK believes one of its strengths is its easy-to-use wallets. Syncless, paving the way for “very fast” transactions, they are compatible with all ARK based blockchains and can be customized with plugins and personalized to fit users. Ledger Nano hardware has been built into the wallets for added security.
A major hurdle to cryptocurrencies becoming more popular in public circles has been the risk of transactions being delayed because of congested systems. ARK says its network resolves this by being “one of the fastest in the industry” – with block times being completed in just eight seconds.
ARK also believes that it has managed to protect itself against any potential issues when it comes to scalability in the future. Through the SmartBridge functionality, the platform says it is “able to offload non-essential functions to hundreds of parallel chains.” Therefore, making the team believe that this paves the way “for great scalability, while keeping the main ARK blockchain lean and fast.”
The power of dynamic fees
Another concept put forward by the ARK Network is dynamic fees. This makes ARK the first DPoS based blockchain to achieve this feat, the company says. Here, the speed with which a transaction is processed will hinge upon how much the consumer is willing to pay in terms of fees. The startup hopes that this will deliver financial flexibility to the community without detracting from a “seamless user experience” – and the platform says it will be reviewing this feature’s progress and make tweaks wherever necessary. In short, it means someone who needs their crypto in a hurry can jump to the front of the queue by paying a higher fee, while someone watching their pennies can pay less for transfers as long as they are willing to wait a little longer for it to be processed.
ARK’s website comes complete with detailed updates of how far along it has come in completing certain milestones – as well as providing a due date. For example, at the time of this writing, it was 84 percent through a “total overhaul” of the ARK Core – paving the way for a plethora of new features, including a higher number of transactions per second. It is expected to be released later in October or early November.
Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.
India is getting a dedicated group for exploring blockchain expansion courtesy of the Internet and Mobile Association of India.
The Internet and Mobile Association of India (IAMAI) is forming a dedicated focus group for blockchain exploration made up of both big business and cryptocurrency players, Indian daily newspaper Economic Times reported Monday, Oct. 15.
Confirmed in a tweet Tuesday, the IAMAI, whose remit is to “expand and enhance” the online and mobile sector, will use its “Blockchain Committee” to “identify opportunities and challenges and work with government, industry and startups” to develop a blockchain “ecosystem.”
The move comes amid testing times for cryptocurrency in India, with the country’s supreme court still deliberating on the legality of the Reserve Bank of India’s (RBI) cryptocurrency banking ban it instigated in July.
Commenting on the plans, Tina Singh, chair of the newly-founded Blockchain Committee, said the technology was nonetheless “undoubtedly the technology of the future,” noting:
“The IAMAI Blockchain Committee will focus on creating dialogue between all stakeholders; curate and create content to aid skill development and move towards creating a participative economy with the usage of blockchain.”
Participants in the committee include major Indian cryptocurrency exchange ZebPay, itself a conspicuous victim of the central bank’s ban, having halted its exchange offering altogether late last month.
The RBI itself is also “researching” blockchain, sources reported in August, as part of an assessment process in which it would “check what can be adopted and what cannot.”
Bitcoin volatility hits all-time low, which could lead Bitcoin to initiate a major rally and bottom out at $6,000
Disclaimer: This article does not contain investment advice or recommendations. Every investment and trading move involves risk, you should conduct your own research when making a decision.
In the beginning of October, Bitcoin achieved a 17-month low volatility rate, recording its highest level of stability since mid-2017.
Bitcoin has started to experience a noticeable decline in its volatility during a period in which the volume of the dominant cryptocurrency achieved a new yearly low. Thus, the volume of Bitcoin dropped from $4.2 billion to $3.2 billion on October 7, by more than 23 percent. Since then, the volume of BTC has recovered substantially, back to $4.2 billion, but it still remains substantially lower than previous weeks. The overall decline in trading activity in the cryptocurrency exchange market due to the uncertainty in the short-term price trend of Bitcoin is said to have contributed to the significant drop in its rate of volatility.
Mike McGlone, a commodity strategist, stated that as the cryptocurrency market matures, the rate of Bitcoin volatility will continue to rapidly decline. He explained that an emerging asset class often sees a large discrepancy in its daily price movements and volatility in volume until it finds strong infrastructure to support and solidify its market.
"This is a maturing market, so volatility should continue to decline. When you have a new market, it will be highly volatile until it establishes itself. There are more participants, more derivatives, more ways of trading, hedging, and arbitraging.”
Since August 9, the price of Bitcoin has remained relatively stable in the range between $6,400 and $6,800. Apart from one occasion in mid-September during which BTC surpassed the $7,000 mark, the asset has shown no signs of solid momentum, mostly due to the lack of volume in the cryptocurrency exchange market.
On October 6, the cryptocurrency exchange market recorded its lowest daily volume in over 12 months, leading traders to be concerned regarding the short-term trend of the market.
Historical lows in volatility: their impact on the crypto market
The decline in the volume and volatility of Bitcoin can have a negative impact on the short-term price trend of the asset. But historically, BTC tended to experience a dip in volume and volatility before initiating large rallies on the upside.
As seen in the volatility chart of Bitcoin, dating back to 2012, provided by Woobull, a cryptocurrency market data platform operated by technical analyst Willy Woo, Bitcoin achieved one of its lowest volatility rates in October 2013.
Image source: Woobull.com
Subsequent to demonstrating a few months of stability, by the end of 2013, the price of BTC increased from around $30 to $1,000, by more than 30-fold within a two-month period. The stability of BTC allowed investors in the market to initiate an accumulation phase in a low price range, enabling more investors to enter the market and acquire BTC.
As prominent venture capital investor Garry Tan, who invested in Coinbase and a group of startups, worth more than $20 billion collectively, said, a low price range helps investors enter a new market or an asset class with significantly less risk:
“The crypto winter generally makes it safer for super-long-term oriented Yale-model institutions to enter at a price that isn’t dangerous. You know what is scary? Investing and then immediately seeing an 80% drop. That is hard to recover from.”
Bitcoin is unlikely to experience a surge in its price in the magnitude of its previous rallies including the 30-fold growth it achieved in 2013. But, in the long-term, stability could allow BTC to establish legs and build stronger support levels in its low price range, increasing the probability of both short-term and mid-term rallies.
Why the Bitcoin market is not reacting to positive developments
Currently, the cryptocurrency market is not reacting to many of the positive developments that have emerged in the sector over the past few months.
In a period of three months, NYSE, Microsoft, and Starbucks have announced the launch of regulated cryptocurrency brokerage Bakkt, to better institutionalize the cryptocurrency market. Coinbase and BitGo received the approval of regulators to operate as trusted custodians to service institutional investors. Citigroup and Goldman Sachs have announced their plans of establishing crypto-focused custodian solutions in the short-term.
$30 billion brokerage giant TD Ameritrade recently backed the launch of ErisX, the first regulated multi-crypto futures market with Bitcoin, Ethereum, Bitcoin Cash, and Litecoin support. Seba, a cryptocurrency bank in Switzerland, is expected to obtain a banking license from the Swiss Financial Market Supervisory Authority (FINMA) by the end of October.
It is entirely possible, upon the recovery of Bitcoin’s volume and trading activity in the cryptocurrency exchange market, that the market will begin to respond to most of the progress that has been made in the sector over the last three months.
Stability of Bitcoin and what it means for the market
Bitcoin has not demonstrated such a high level of stability in a long period of time. Considering that BTC has continuously demonstrated higher lows throughout the past 30 days, meaning that BTC has consistently recovered beyond its previous high point, it is more likely for BTC to eye a movement to the upside.
Danny Les, cryptocurrency analyst, stated that extended periods of stability and consolidation often lead to a strong upside movement.
“Any extended period of consolidation or ranging is usually the run up to a fairly strong move. That said, opinion is mixed on whether that move is up or down. When you're analyzing charts, generally higher highs and higher lows are the indicators of a positive move up. Lower highs are probably not the best thing to pin hopes to in expectation of a rally. However, this is Bitcoin so [it is unpredictable].”
Many analysts and traders in the cryptocurrency sector have echoed this sentiment, stating that in hindsight, the bull run of BTC will be strikingly obvious. But, the low volume of the dominant cryptocurrency and the lack of momentum on major cryptocurrencies, still poses a concern for traders in the space. Les added:
“Unless already comfortably in profit, a drop in volume is never something one wants to see when in a position. The overall sentiment attached to crypto probably isn't the most positive. Bitcoin effectively nose diving since last years all-time high has created a steady wave of retail interest decline across all crypto markets.”
Unprecedented stability since August: $6,800 is a major resistance level
Billionaire investor Mike Novogratz has emphasized $6,800 as a major resistance level for Bitcoin throughout the past month, and if BTC comfortably surpasses that level, then it will be able to eye resistance levels in the $7,000 and $8,000 region.
If Bitcoin breaks out of the $6,800 mark relatively quickly, Novogratz said it is possible for BTC to demonstrate a 30 percent increase in price by the end of the year.
“Thirty percent – there’s some key levels. You’ve got to take out $6,800 and if that breaks, you’ll go up to $8,800, $9,000 and if that breaks, it’s $10,000. Those kind of numbers make sense to me by the end of the year. You’re not going to see the massive run until the institutions actually start buying a lot. And the architecture is being put in place now. It’s going to be announced in the next few months. But then it’ll take a little bit of time to go through investment committees and whatnot.”
The issue is that since August 9, Bitcoin has consistently tried to break out of the $6,800 resistance level and failed in most of its attempts. It recovered beyond $7,000 on September 4, but it struggled to sustain its momentum and fell back down to the mid-$6,000 region.
Les explained that it is more likely for Bitcoin to experience a shakeout prior to a major rally on the upside. BTC has to experience a promising increase in its volume and price to ensure that 2019 begins with a positive sentiment:
“I suspect that there will be more blood before any kind of serious rally up. Volume and price, certainly in Bitcoin's case need to pick up before we get to near Christmas, otherwise we will see the year out with a very negative sentiment attached.”
Is it the right time to start accumulating Bitcoin?
In late August, when the price of BTC was still at around $6,600, ShapeShift CEO Erik Voorhees stated that the bear market is not over yet but it is a viable period for new investors in the space to start accumulating Bitcoin.
Voorhees stated the rate of collapse of the crypto market has slowed down considerably and it is highly unlikely for BTC to decline far below its current price range.
BTC has dipped below the $6,000 mark on three occasions throughout the past nine months. BTC recovered relatively quickly from the $5,900 region, leaving a short window for investors to acquire the dominant cryptocurrency at a price below the $6,000 level.
Image source: Cryptowat.ch
Given the strong support level of Bitcoin at $6,000 and many of the positive developments the sector has seen, Voorhees stated that it is an appropriate time to start accumulating BTC.
According to Les many platforms and companies in the cryptocurrency sector are continuously working on building the infrastructure that is necessary to support the next wave of users, investors, and consumers:
“Many platforms are ignoring talk of token prices and are just quietly working in the background to fulfil their roadmap objectives. In 2019, I think will be a very interesting year for us all. Mainstream adoption of the technology will start to become apparent and investment methods into the market will become much more in line with traditional markets. The future is very bright, however there has to be a bit of darkness beforehand.”
TD Ameritrade, the fifth largest brokerage in the US, stated that it sees sufficient demand from investors in both the crypto and financial sector to be comfortable with its investment in the cryptocurrency sector.
Why bulls are more likely to win over bears in 2018
Technical indicators, such as Williams’ Percent Range of Bitcoin, show that it is more bear-biased as of October 2018. However, as Don Alt, a cryptocurrency trader supposed, bulls have leverage over the bears which are currently dealing with a market with low volume and activity.
The next big move will be so incredibly obvious in hindsight.— DonAlt (@CryptoDonAlt) October 5, 2018
1) BAKKT coming
2) Increased legislative & institutional interest
3) Lows holding strong
I) Weakening 6k support
II) Sell off stronger than rallys
III) Missing final shakeout
The market has also demonstrated intense seller fatigue throughout September and October, making it unlikely for a large downside movement to occur in the weeks to come. It is possible for BTC to be stagnant in a low price range but the probability of the dominant cryptocurrency dipping below the $6,000 support level is low.
Thus, a final shakeout could be in play prior to a major mid-term rally. Generally, most analysts agree that the low rate of volatility Bitcoin has shown throughout the past three months, and particularly in October, will help fuel the next mid-term rally of BTC.
Cryptocurrency market scaling improvements could see prices ten times higher than now, says co-CIO of Pantera Capital.
Speaking in an interview, co-CIO Joey Krug said that scalability improvements for Bitcoin (BTC) were essential to spark a shift in the deflated prices seen throughout this year. He told the network:
“These are all markets, and so if you don’t have scalability, you don’t have market makers.”
The comments came days after new developments on the institutional trading side of Bitcoin markets, with Fidelity Investments revealing it was testing a regulated custody solution for investors and hedge funds.
For Krug, this is because sentiment requires signs of adoption of Bitcoin in the current climate, which in turn depends on capacity improving. To that end, however, the executive voiced doubts about Bitcoin itself “ever” being able to compete with payment networks Visa and MasterCard.
“I don’t know if that will ever happen for Bitcoin, but I do think we’ll see blockchains as fast as Visa or MasterCard within the next couple of years,” he continued, adding that such improvements could nonetheless spark “10x” price increases in two years’ time.
The downturn in crypto markets since January 2018 has meanwhile meant Pantera has seen its fortunes tested in recent months, earlier in October releasing statistics showing its Digital Asset Fund was down over 40 percent since its inception.
China’s first crypto exchange BTCC, formerly known as BTC China, is set to launch trading services in South Korea in November.
BTCC, which presently has headquarters in Hong Kong, will reportedly start beta services for trading in South Korea later this month and make its official debut in the market in November.
According to the BTCC website, the Korean service — headed by Lee Jae-beom — will span a trading platform, wallet service, mining pool, and a service to enable consumer payments:
“BTCC is establishing an on/offline payment system using cryptocurrency… [and is] is expanding services for real-life use.”
BTC China was founded in 2011 and was formerly one of the top three crypto exchanges in China, before intensified pressure from regulators and the country’s central bank amid signs of an imminent crypto exchange crackdown prompted it to announce its closure in September 2017 — the same month as China’s domestic regulatory ban on Initial Coin Offerings (ICO) was announced.
This January, the company was acquired by a Hong Kong-based blockchain investment fund; a rebranded BTCC subsequently pursued the development of its international BTCC mining pool and Mobi wallet software, before relaunching its trading platform in July.
However, draft legislation has been in the works in the country this year to reclassify exchanges as “crypto asset exchange and brokerage,” thereby “recogniz[ing] [them] as regulated financial institutions,” as opposed to their previous classification as “communication vendors.”
As of press time, BTCC is seeing $168,342 in trades over the 24-hour period, according to data from CoinMarketCap.
The Ethereum Foundation has announced its fourth wave of grants, awarded to startups that develop the ecosystem.
According to the release, the total amount of awards is over $3 million. The biggest grants worth $500,000 were given to Prysmatic Labs and Status. Both companies are working to develop the Ethereum 2.0 ecosystem first announced by co-founder Vitalik Buterin in November 2017.
Grant recipients were divided by the manner in which they contributed to the development of the network, such as scalability, usability, and security. Adult entertainment platform SpankChain received a $420,000 grant for working on the open-source software developer kit (SDK) for a non-custodial payment channel hub.
Other large grants went to Prototypal and Finality Labs for front-end state channel research and the development of forward-time locked contracts, respectively.
In the announcement, the Ethereum team has also expressed its gratitude to members of community, promising to increase their involvement in the network’s development:
"Thank you to all the fantastic community members that have applied with creative ideas on how to bolster our ecosystem. We would not exist without the time and energy that you put into Ethereum. While the program continues to grow, we will increasingly continue to involve more community members in the decision making process."
In February 2018, six large-scale blockchain projects created the Ethereum Capital Fund. OmiseGo, Cosmos, Golem, Maker, Raiden, and Japanese venture capital firm Global Brain announced they would grant a cumulative $100 million to different projects that developed the Ethereum blockchain ecosystem. Buterin subsequently announced he would join project as an advisor.
Buterin himself also donates money to open-source projects building innovative technologies such as scaling solutions for the Ethereum Blockchain network. In September 2017, he announced that his advisor shares from OmiseGo and decentralized cryptocurrency exchange Kyber Network would be donated to charity or used to fund Ethereum second-layer infrastructure development.
A recent study by DTCC, Accenture, and R3 has found that blockchain technology is able to meet the demands of the U.S. equity market of more than 100 million trades per day.
A recent study by the Depository Trust & Clearing Corporation (DTCC), a post-trade financial services firm, has found that distributed ledger technology (DLT) is scalable enough to support daily trade volumes of the U.S. equity market, according to a press release published Oct. 16.
The blockchain scaling problem is growing along with the increasing popularity and public awareness of cryptocurrencies as there is a risk the technology will not be able to keep up with demand. The largest cryptos Bitcoin (BTC) and Ethereum (ETH) use limited sized blocks to process transactions. The more transactions that are performed, the more data each block carries, which can lead to buckling.
The recent 19-week study, which was conducted in collaboration with global professional services company Accenture and enterprise blockchain software firm R3, purportedly proved that DLT is capable of supporting an entire trading day’s volume at peak rates. Per the release, the highest rates equate to 115,000,000 daily trades, or 6,300 trades per second for five continuous hours.
In the course of the study, researchers reportedly ran DLT performance tests using commercial blockchain platforms — DA Platform and Corda Platform. Accenture built a network of over 170 nodes to imitate the financial ecosystem of exchanges and market participants supported by the DTCC. The test environment for this research was reportedly set up in the cloud.
The DTCC notes that the study only tested basic functionality, stating that subsequent work must determine whether DLT is able to meet the resiliency, security, and operational needs, as well as regulatory requirements of its current clearance and settlement system.
David Treat, Managing Director, Global Blockchain Lead at Accenture, said, “this project answered key questions and built serious confidence in blockchain’s ability to drive large scale transformation.”
Earlier this month, BTC protocol developer Mark Friedenbach introduced a method for BTC scaling that claims to be able to increase “settlement transaction volume to 3,584 times current levels” and improve censorship resistance. The new concept suggests a major on-chain capacity boost by means of a Proof-of-Work (PoW) alternation that is done as a soft fork, combined with use of alternative private ledgers.
In July, a team of BTC engineers launched the Bitcoin Operations Technology Group (Bitcoin Optech) addressing the problem of scalability. At that stage, Bitcoin Optech was focusing on “operational technical work, such as SegWit usage, transaction batching, fee estimation and coin selection,” helping companies integrate the rapidly developing technology.
ZRX is now available for trading on Coinbase.com as well as the exchange’s iOS and Android apps.
San Francisco-based cryptocurrency exchange Coinbase has announced trading is now open for 0x (ZRX), making it the first ERC-20 token available for trade on the platform, according to a blog post published Oct. 16.
On Oct. 11, Coinbase launched support for ZRX on its professional platform, Coinbase Pro, although it stated that trading will only be allowed once sufficient liquidity is established.
Now, the exchange’s customers are able to buy, sell, receive, and store ZRX on Coinbase.com as well as its iOS and Android apps. Coinbase notes in the statement that ZRX will be available in most jurisdictions, but initially it will not be available for residents of the state of New York and the United Kingdom.
Coinbase revealed its plans to add support for ERC-20 tokens in March. “After evaluating factors such as liquidity, price stability, and other market health metrics, we may choose to add any ERC-20 asset added to GDAX to the Coinbase platform,” the exchange then stated.
At press time, ZRX is trading at around $0.83, up 17.38 percent over the last 24 hours, according to CoinMarketCap. The altcoin price rallied to $0.85 today following the Coinbase announcement. ZRX’s market capitalization is around $464 million, while its daily trading volume is around $46.5 million at press time.
Crypto exchange Bitfinex has reportedly moved its banking business to Hong Kong through a private account at Bank of Communications.
A source familiar with the matter reportedly said that Bitfinex appears to be banking with the Bank of Communications through the private account “Prosperity Revenue Merchandising Limited.” According to the Block, Bank of Communications — which is partly owned by HSBC — has been using U.S.-based Citibank as the intermediary bank for U.S. dollar wire transfers to Bitfinex.
The Block speculates that HSBC — with whom Bitfinex previously conducted its banking business — was unaware it was providing services for Bitfinex, and subsequently closed the previous account.
A similar incident occurred in 2017, when Wells Fargo allegedly refused to continue operating as a correspondent bank for Bitfinex. The exchange subsequently filed a lawsuit against the bank, which was eventually dropped.
As reported on Oct. 8, Bitfinex was at the center of rumors claiming the exchange was insolvent and/or facing banking issues. The rumors were caused by last week’s reports that the exchange’s banking partner, Puerto Rico’s Noble Bank International, is seeking a buyer and had lost Bitfinex as a client. Bitfinex subsequently denied those rumors.
Today’s report follows news that Bitfinex temporarily suspended all fiat wire deposits for the euro, U.S. dollar, Japanese yen and U.K. pound sterling on Oct. 11, without specifying the reason. The exchange further stated that deposits are “expected to resume within a week.”
Earlier today, Bitfinex announced the introduction of a “new, improved and increasingly resilient” fiat deposit system. The new deposit process will reportedly enable know-your-customer (KYC)-compliant customers “from around the world” to conduct deposits in the four previously suspended fiat currencies.
Deposit requests will be reviewed within 48 hours, while the deposit itself, as Bitfinex states, will be processed “within 6-10 business days.”
Founded in 2012 in Hong Kong, Bitfinex is currently the 4th largest crypto exchange globally in terms of trade volume, with $321 million in trades over the last 24 hours at press time. Bitfinex introduced fiat operations in 2015 to enable traders to “enter the digital asset space.”
At press time, Bitfinex could not be reached for comment regarding the reported banking developments.
Toyota has partnered with blockchain ads analytics firm Lucidity to reduce wasted spending and address fraud in its advertising campaigns.
Formerly known as KR8OS, Lucidity was founded in 2017 in Los Angeles and offers an Ethereum blockchain solution to track supply chain payments, so advertisers can monitor how their funds are allocated.
Through the new partnership with Lucidity, Toyota and global ads agency Saatchi & Saatchi are reportedly looking to attain transparency in Toyota’s digital ad campaign buys and eliminate wasted spending. The size of the automotive digital advertising market was estimated at nearly $15 billion in the U.S. in 2018.
Nancy Inouye, Media Director at Toyota Motor North America, reportedly told advertising trade publication AdAge that the campaign with Lucidity resulted in a 21 percent upstick in visits to Toyota’s website. As reported, Lucidity was able to flag sites and apps with a high level of impression and click discrepancy — which indicates fraud or bot infiltration — to move funds to sites with higher performance.
Inouye reportedly said that Toyota "wanted to go deeper into the programmatic space in particular because it is an area [where] quite frankly, we don't have transparency and visibility.” According to AdAge, the company now plans to extend its deal with Lucidity beyond the originally planned three-week test. Inouye added:
"We are in discussions to take it to the next step and [test] further with additional campaigns for a longer period of time. We feel that if we go longer we would see stronger results."
Tom Scott, Media Director at Saatchi & Saatchi, stated that "even with high standards of anti-fraud and viewability filters already built in, Lucidity was able to deliver significant value-add by further optimizing the campaign." He added:
"The ability to have access to a transparent, clean set of data from across the programmatic supply chain is game-changing. We're empowered to take action, and this is the first time we've been able to use blockchain technology to eliminate waste and optimize our ad buy in this way."
Blockchain has been actively deployed within the media industry to address transparency issues like fake traffic counts, bot clicks and domain spoofing, as well as audit ad transactions. In June, global ad software giant Mediaocean partnered with IBM to use blockchain to bring transparency to the “entire lifecycle of an advertiser's media dollar flow.”
A subsidiary of Abu Dhabi Ports has launched an international blockchain pilot with the Port of Antwerp.
A subsidiary of the major U.A.E. seaport operator Abu Dhabi Ports has launched an international blockchain pilot with the Port of Antwerp, global shipping news agency Hellenic Shipping News reports Oct. 15.
Following a Memorandum of Understanding (MoU) signed between Abu Dhabi Ports subsidiary Maqta Gateway and the Port of Antwerp, the companies will run a pilot of a blockchain project called Silsal. According to the project, both entities will handle international trade documentation by deploying distributed ledger technology (DLT).
The Silsal project is expected to provide full cargo visibility, as well as to improve trade flow and supply chains between the U.A.E. and Belgium. The pilot will test the potential benefits of blockchain technology, such as exchange, identification, and verification of cargo documents and certificates between the respective ports.
According to the report, the Silsal project was first revealed in June, 2018. The project was introduced in a number of operational phases, originally targeting freight forwarders and their customers. Eventually, the project was offered to the wider the trade community.
Headquartered in the capital of the United Arab Emirates, Abu Dhabi Ports company holds, manages and operates 11 ports and terminals in the U.A.E. and Guinea. The national maritime giant reportedly contributes 3.6 percent of Abu Dhabi’s non-oil GDP growth.
The CEO of Abu Dhabi Ports Mohamed Juma Al commented that the recent pilot with “world-class international partners” instends to generate “fast, reliable, and secure” operations in the industry. He also added that Abu Dhabi Ports will “continue to work towards using blockchain,” as well as other technologies in Abu Dhabi to “transform the Emirate’s trade and logistics sectors.”
On Oct. 3, one of biggest ports of Spain announced plans to build a blockchain-powered "smart port" in the city of Valencia. The new technologies such as blockchain and big data are reportedly expected to reduce costs and time spent on maintenance, as well as to optimize global resource distribution.
In mid-September, the U.K.’s major port operator Associated British Ports signed a contract with digital logistics operator Marine Transport International to work on a blockchain-powered system of port logistics. According to the plan, the use of blockchain technology is expected to reduce time spent on manual management of data, as well as data exchange.
Brazilian presidential candidate Fernando Haddad has announced his campaign will use blockchain technology to distribute his policy positions and plans for the government.
According to the release, Haddad decided to use blockchain technology for disseminating information about his presidential campaign after a long-term struggle with fake news reports. As information stored on a blockchain cannot be altered or compromised, he decided to store the data on a decentralized platform.
The release also notes that Haddad used “free software” in Sao Paulo where he served as mayor from 2013–2017. The software solutions monitored various city projects, including the municipal Master Plan “with the support of users through the internet.”
Haddad is not the only presidential candidate to apply the technology. According to crypto news outlet Criptomoedas Facil, other politicians that participated in the general election; Joao Amoedo and Marina Silva, also mentioned blockchain during their campaigns.
Silva proposed to create a “digital government,” storing all public data on a decentralized platform, while Marina used decentralized ledger technology (DLT) to register donations for her campaign.
In the first round of the 2018 elections, Haddad and his vice-presidential running mate Manuela d’Avila won almost 30 percent of the overall vote, but eventually lost out to far-right candidate Jair Bolsonaro.
Bolsonaro, who has previously expressed fond sentiments for Brazil’s former military regime, exceeded expectations at the polls, having ran a right-wing populist platform that promised a return to “traditional” Brazilian values.
While he won the general election with almost 47 percent of the overall vote, Bolsonaro fell short of the 50 percent needed to avoid a runoff election against Haddad on Oct. 28.
As Cointelegraph reported in January, the Brazilian government was considering to move popular petitions — an instrument that allows citizens to vote on different social matters — to a blockchain based on the Ethereum network. Officials wanted to create a mobile app that would allow people to submit their votes via a decentralized platform.
A Russian man accused of hacking government servers in three Russian regions to mine Bitcoins is facing up to five years in prison.
A 21-year-old Russian from the Siberian city of Kurgan is facing criminal charges for illegally mining Bitcoins (BTC) via government-owned servers, local news agency Ura.Ru reports Tuesday, October 16, citing the regional office of Russia’s Federal Security Service (FSB).
The investigation found that the man hacked public administration servers in three Russian regions. The breach was discovered when the Internal Security Division in the city of Yaroslavl noticed the intruder’s attempt to hack their equipment.
The alleged hacker was then charged with deliberate use of software that “neutralizes” a computer’s network defense “out of self-interest.” Under this article he could face up to five years in prison, if found guilty.
As Cointelegraph previously wrote in a review of illicit mining cases, stealing or illicitly receiving electricity then used to mine is often the crime punished by prison terms, rather than the mining itself. For instance, in South Korea this April, police arrested miners who purposely rented out factories and chicken farms to receive electricity for substantially lower rates.
Further, in another case in the U.S. state of New York this March, local authorities asked miners to cease their work after residents of one town filed an official complaint to the police for the excessive usage of low-cost electricity by local miners.
More recently, this month a Chinese man was reportedly sentenced 3.5 years in jail for stealing electricity from a train station to fuel his Bitcoin mining facility. In addition to the prison sentence, he was also fined 100,000 yuan (around $14,500).
Major crypto exchange Bitfinex has introduced an “improved” fiat deposit system shortly after temporary suspension last week.
Last week, on Oct. 11, Bitfinex temporarily halted fiat deposits in four fiat currencies – the Euro (EUR), U.S. Dollar (USD), Japanese Yen (JPY), and Pound Sterling (GBP) – without specifying a reason for suspension and claiming that fiat deposits are “expected to resume within a week.”
Yesterday, October 15, the crypto exchange posted an update on fiat deposits, explaining that Bitfinex had “temporarily paused” fiat deposits for “certain user groups [...] in the face of processing complications.”
The company also stressed that all crypto and fiat withdrawals were processing without any interference.
In today’s announcement, the Bitfinex team introduced a “new, improved and increasingly resilient” fiat deposit system.
The exchange claims the new system will again enable know-your-customer (KYC)-compliant customers “from around the world” to conduct deposits in the four previously suspended fiat currencies.
According to the statement, the new system will require users to process a deposit request, which will then be reviewed within 48 hours. The deposit itself, as Bitfinex states, will be processed “within 6-10 business days.”
The blog post also states that the minimum fiat deposit amount is to remain at $10,000, with a 0.1 percent processing fee.
Founded in Hong Kong in 2012, Bitfinex is one of the oldest and most popular crypto exchanges, currently ranked in third place globally in terms of daily trading volume, according to CoinMarketCap.
The company introduced fiat operations in 2015 in a move to enable traders to “enter the digital asset space,” as mentioned in a recent blog post published prior to fiat deposit suspension.
Last week, the exchange issued an official response to a recent swathe of online rumors that it is “insolvent” or facing banking issues. Bitfinex’s rebuttal came in the wake of last week’s reports that the exchange’s banking partner had lost both Bitfinex and affiliated firm Tether — who share a CEO, Jan Ludovicus van der Velde — as clients, among other reports.
The government of the Australian state of New South Wales is set to complete a proof-of-concept for a blockchain land registry system by summer 2019.
The new PoC is expected to be completed by the NSW Land Registry Services – together with Stockholm-based blockchain startup ChromaWay – by early 2019. The NSW state government is said to have given its official mandate for the Registry to shift to the new blockchain-based eConveyancing system by July.
The NSW Land Registry Services maintains the system that defines the legal ownership of both public and private land across the state, according to the report. As of the start of the new financial year, according to ZDNet, all NSW property transactions will be required, under the government’s directive, to be stored digitally, eliminating the need for paper-based Certificates of Title.
In an interview with ZDNet, Land Registry Services CEO Adam Bennett pointed to “blockchain … systems [that] are being implemented in land jurisdictions overseas,” where, he said, “they are already delivering significant benefits.” He added that NSW would be making a series of “targeted experiments” in order to test “selected use cases” for the technology.
ChromaWay’s AP strategic advisor Nicholas Delaveris told ZDNet that a blockchain system offers “an incontrovertible chain of ownership," which can not only be more efficient than paper-based methods but provide “a more complete and comprehensive view of land rights, restrictions, and responsibilities” by increasing transparency and preventing data duplication.
According to ZDNet, the NSW government has also implemented a distributed ledger system for digital driver’s licenses, which launched this September.
As reported this spring, the Netherlands’ Land Registry is also expecting to integrate a blockchain solution into its system for national real estate data “within one to three years.”
In March of this year, Sweden’s land-ownership authority, the Lantmäteriet, said it was poised to conduct its first blockchain-based property transaction after two years of testing, having used ChromaWay’s private blockchain to register land and properties since July 2017.
Crypto markets are seeing some stability today, with most major coins seeing only minor ups and downs.
Tuesday, Oct. 16: Crypto markets are seeing some stability today following yesterday’s market upsing, with virtually all of the major cryptocurrencies seeing only minor price changes, both red and green, as of press time.
Market visualization by Coin360
Bitcoin (BTC) is trading at $6,580 at press time, down close to 1 percent on the day, according to CoinMarketCap. During a short-lived spike yesterday, which correlated with Tether’s price drop, Bitcoin traded as high as $6,673, but has since corrected to the price range it saw at the beginning of its weekly chart, despite several days of heavy losses on the crypto markets mid-week.
Overall on the week, the top coin has virtually not budged, and is 0.06 percent down as compared with Oct. 9. On the month, Bitcoin is up around 1.72 percent, again remaining relatively stable.
Bitcoin 7-day price chart. Source: CoinMarketCap
Ethereum (ETH) is down just fractionally, by 0.3 percent, to trade just under $210, according to CoinMarketCap. Having seen an intra-week low of around $189 on Oct. 12, followed by a couple of days of sustained losses, the leading altcoin also saw a major spike yesterday, Oct. 15, to trade as high as $220.
On the week, Ethereum is around 7.5 percent in the red; monthly losses are around a milder 3.2 percent.
Ethereum 7-day price chart. Source: CoinMarketCap
Ripple (XRP) is the strongest performer among the top ten coins by market cap, up 3 percent to trade at $0.454 at press time. The asset saw a spike parallel to BTC and ETH yesterday, but has seen solid performance today and is trading only slightly below yesterday’s peak at $0.567.
Having shed value during the market-wide losses Oct.11-14, Ripple is around 4.4 percent in the red on its weekly chart. Nonetheless, due to its soaring successes in September, Ripple’s monthly growth is at close to 64 percent.
Ripple 7-day price chart. Source: CoinMarketCap
The remaining top ten coins on CoinMarketCap are seeing an almost even mix of gains and losses, capped within a 2 percent range in both directions.
Tether (USDT) has reclaimed most, if not all, the ground it lost during yesterday’s tumble, and is up 1.6 percent to trade at $0.98 at press time. Although reasons for Tether’s losses yesterday are not confirmed, unconfirmed reports have recently circulated that banking complications appear to have beset both Tether and associated crypto exchange Bitfinex.
Others have proposed the market sentiment was tied to investors “losing faith” because of the ongoing lack of transparency surrounding Tether’s claims to be backed one-to-one by the US dollar.
Tether 7-day price chart. Source: CoinMarketCap
The market’s seventh largest coin Litecoin (LTC) is down 1.66 percent to trade at $54.25 by press time. Still among the top ten, Cardano (ADA) and Monero (XMR) are both up about 1 percent on the day to press time.
In the context of the top twenty coins, the picture is also mixed, with most coins seeing minor price change capped within a 2 percent range, though with a couple of notable exceptions.
Tezos (XTZ) has soared 13 percent on the day and is trading at $1.44 at press time.
Tezos’ 7-day price chart. Source: CoinMarketCap
Total market capitalization of all cryptocurrencies is down to around $211.1 billion as of press time — having reached as high as $220.2 billion briefly yesterday, Oct. 15.
7-day chart of the total market capitalization of all cryptocurrencies from CoinMarketCap
Today investor and crypto bull Mike Novogratz tweaked his price forecast for Bitcoin, predicting the top crypto would in fact not break $10,000 in 2018. He suggested instead that during “Q1 [or] Q2  if the institutions start coming in, we’ll put in new highs.”
In other crypto news, stablecoins continue to make headlines this week, with blockchain trust company Paxos announcing it has already issued around $50 million worth of its recently-launched U.S.dollar-backed stablecoin, PAX.
Notably, with regards to better-known thought controversial stablecoin Tether, stablecoin issuance at this scale has drawn both speculation and criticism in regards to its possible impact on Bitcoin (BTC)’s price performance.
As reported yesterday, the now second largest crypto exchange by market cap OKEx announced it would be listing four stablecoins at once – PAX, TrueUSD (TUSD), USD Coin (USDC), and Gemini Dollar (GUSD) – the same day as U.S.-based crypto payment processor BitPay announced it had started to accept two stablecoins for merchant settlement, GUSD and USDC.
Following OKEx’s move, another major crypto exchange, Huobi, announced their listing of the same four USD-backed stablecoins today.
Major crypto exchange Huobi announces the listing of four fiat-backed stablecoins just one day after a similar announcement by OKEx.
Starting Friday, Oct. 19, the fifth largest crypto exchange by trading volume will start accepting deposits of four USD-backed stablecoins – Paxos Standard (PAX), TrueUSD (TUSD), USDCoin (USDC), and Gemini Dollar (GUSD).
The Huobi Global team noted that the stablecoins are already available on Huobi Wallet, while the launch time and other details are set to be announced at a later time.
Huobi also stated that they will release detailed plans for over-the-counter (OTC) trading of the stablecoins on Huobi OTC “soon.”
The move from Huobi follows closely on the heels of an almost identical announcement about the listing of the same four stablecoins by the second top crypto exchange by trading volume, OKEx, yesterday, Oct. 15. OKEx has already launched deposits in the four stablecoins, with withdrawals available starting from today.
Also on Oct. 15, blockchain trust company Paxos announced it had issued about $50 million worth of its stablecoin Paxos Standard Token. The Ethereum (ETH) blockchain-based stablecoin has received regulatory approval from the New York State Department of Financial Services (NYDFS) on September 10, together with another stablecoin Gemini Dollar that was launched by Winklevoss brothers.