Daily News Digest Featured News

Monday January 29 2018, Daily News Digest

bitcoin coincheck
Source: Inverse Innovation

News Comments

United States

United Kingdom

China

  • Are crypto prices dependent on China? AT: “The broader issue is regulation. China certainly plays a part in that. But with almost every nation on the planet targeting cryptocurrencies for regulation, there is sure to be some fall out.”

European Union

International

India

APAC

Russia

News Summary

United States

IDT and MercuryFX to use Ripple’s XRP in remittance play (Finextra), Rated: AAA

While big banks continue to shy away from the use of XRP as a form of reserve currency in funds transfers, Ripple appears to have found a sweet spot for the adoption of xRapid in the $569 billion remittance market.

IDT and MercuryFX join MoneyGram and Cuallix, who have also committed to use XRP in their payment flows.

Ripple Expands Its xRapid Platform with New XRP Partners (The Market Mogul), Rated: A

“Over the last few months, I’ve spoken with ACTUAL banks and payment providers. They are indeed planning to use xRapid (our XRP liquidity product) in a serious way.” That was Brad Garlinghouse responding to the questioning of XRPs actual utility on Twitter. At the time it seemed like a pugnacious move for the CEO of Ripple to directly confront criticism of his strategy of partnering with financial institutions, but the announcement yesterday of two new partners using Ripple’s xRapid system has seemingly vindicated Mr. Garlinghouse.

Is Robinhood going to challenge Coinbase and rival platforms for dominance in bitcoin and Ethereum trading? (MarketWatch), Rated: AAA

Some market participants already are expecting that Robinhood, which is offering fee-free transactions in cryptos, similar to what it delivers in equities, could threaten Coinbase’s dominance in the U.S. and in particular among so-called millennial users, those born between 1982 and 2000.

“I expect that Robinhood will capture some of Coinbase’s market share immediately, particularly from small retail investors,” said Christopher Grey, chief operating officer of TransitNet, an enterprise blockchain-related company. “Coinbase charges absurdly high fees, especially for small transactions. Further still, most other popular platforms are offshore and have other risks beyond their often high fees.”

San Francisco–based Coinbase, which operates in two dozen states and overseas and has about 13 million users, charges clients an average network fee, which variesdepending on the size of a transaction and whether users are utilizing digital wallets, bank accounts or credit or debit cards. (There are ways of circumventing those fees.)

How much will 1 Ethereum be worth by 2019? (Quora), Rated: A

Disaster scenarios:

  1. China, South Korea and other Asian countries ban cryptocurrency trading and mining. We’ve already seen cryptos across the board plummet by -20% within the hour just because of *speculation* that Asian governments might ban trading and mining. Just imagine if they actually see that threat through.
  2. Another major exchange gets hacked. Could you imagine if Coinbase got hacked? You’d see the price of all cryptos deflate like a popped balloon within seconds. With the proliferation of cryptos and resulting exchanges, we should expect more exchanges to get hacked in 2018. Depending on the size of the hacked exchanges, you may see prices either barely move or you may see the Earth split in two.
  3. Buterin and Ethereum developers get hacked and/or fail to deliver on their lofty promises. If there were to be a successful attack on the very Ethereum core team you could see Ether (and Ether alone) plunge dramatically.

Payday scenarios:

  1. Buterin & Co. implement Casper/Proof of Stake. This is a “first to the finish line” race out of the major cryptos and Ethereum is easily leading the way. Whenever (not if ever) Ethereum implements PoS, hold on tight because it’s going to be wild. If Bitcoin doesn’t switch to PoS at the same time you could easily see Ether overtake Bitcoin on the coin value to USD pair within a short span of time.
  2. Corporations and/or major developers start utilizing Ethereum for everyday processes or decentralized apps are released to the public. Both of these would drive demand for Ether up dramatically as more and more potential holders seek to buy and either up their stake in Ether or enter for the first time.
  3. Bitcoin continues to not really do anything useful. It’s interesting how Bitcoin has primarily become little more than a store of value rather than an actual currency. With the current technical headwinds that Bitcoin is facing, we shouldn’t expect this to change any time soon. I mean there are very good reasons why major corporations are flocking to Ethereum and not to Bitcoin. I suspect that we will continue to see that trend continue here in 2018, if not speed up even more.

People show huge interest in Robinhood Crypto, but skeptics worry it will just fuel the bubble (CNBC), Rated: AAA

Just over 24 hours since no-fee stock trading app Robinhood announced it would roll out free digital currency trading in February, 530,000 and counting have signed up to “get early access.”

MGT Splits From John McAfee, Turns Focus to Digital Coin Mining (Bloomberg), Rated: A

Controversial anti-virus software developer John McAfee will soon be, in his words, “toiling in obscurity.”

MGT Capital Investments Inc., the cybersecurity company that recently shifted its focus to Bitcoin mining, has severed its relationship with McAfee and is considering a sale or spinoff of the cybersecurity arm he was meant to run, the company said in a statement Friday.

Polymath And SelfKey Bring KYC & Digital Identity Services To Security Token Market (PaymentWeek), Rated: A

Polymath Inc., the first-ever securities token platform, is announcing today a partnership with SelfKey, a self-sovereign digital identity platform. The alliance means SelfKey’s technology will be available to issuers of securities tokens, and investors, to satisfy their Know Your Customer (KYC) requirements at the time of Polymath’s network launch in 2018. Polymath seeks to do for securities issuances what Ethereum did for decentralized applications by enabling financial institutions, funds, and companies to issue securities on the blockchain with confidence. The network makes the securities market more accessible and secure than traditional forms of asset ownership.

How Radar Relay Is Revolutionizing Ethereum Token Trading (CryptoSlate), Rated: A

Decentralized exchanges (DEXs) could very well be the future of crypto trading, and one of the most intriguing combinations out there is 0x and Radar Relay. A rapidly growing team with an intriguing wallet-to-wallet protocol, Radar Relay just hit another major milestone with successful Ledger integration. We’ll explain everything about why 0x and Radar Relay could be your go-to tools for trading ERC20 tokens.

Exchanges aren’t always the safest place in the world, too. Just ask users of Mt. Gox, who lost some 400,000 Bitcoins in 2014 during a massive hack. That’s billions at today’s prices. Or investors on Bitfinex, who lost $72 million in 2016. Or even the $500 million in NEM that was stolen off a Japanese exchange the other day.

0x is a particularly promising project, offering a protocol for ERC20 token exchanges that other projects can integrate into their applications.

And Radar Relay is the DEX that could push 0x to the next level. We’ve already covered how trading on any exchange, even decentralized, can be risky. Radar Relay takes the next step altogether: wallet-to-wallet trading.

Ondiflo, A Platform Built On Ethereum Blockchain, Transforms The Order-To-Cash Process In The Oil And Gas Industry (PR Newswire), Rated: A

Amalto SA, a leader in Order to Cash, Logistics and Field Data Management and ConsenSys, a global Blockchain company, announced today the formation of Ondiflo, a joint venture to develop and grow a platform dedicated to the automation of all ticket-based processes in the oil and gas industry.

Founded by Amalto’s CEO Jean Pierre Foehn, Sandro Giannetti, an entrepreneur and startup investor, and ConsenSys’ Rana Basu, Ondiflo is an Ethereum Blockchain-based solution that revolutionizes the historically complex and time-consuming ticketing-based processes in the oil and gas industry.

Ondiflo leverages pre-existing products developed by each company, including Consensys’ cloud-based dashboard TMS and Amalto’s Platform 6 to provide the first end-to-end solution for the industry. Ondiflo is built upon an Ethereum Blockchain infrastructure, that automates all steps of the order-to-cash process associated with field services in upstream, midstream and downstream markets.

BlockChain Funds Get 1,600% Money Boost In One Day (Forbes), Rated: A

Two new funds targeting the blockchain world have seen inflows jump by 1,000%, at least, in one day.

On January 17, Amplify launched their blockchain ETF called the Amplify Transformational Data Sharing (BLOK) fund. It didn’t need the word bitcoin, crypto, or blockchain it its title. Everyone knew what it was. The ETF started with $2.5 million in seed funding. On day one, it grew to approximately $40 million. As of Jan. 26, it has $175 million in assets under management (AUM), the company said today. The actively managed fund’s share price has only gone up around 4%.

Rival Reality Shares launched their version of a blockchain ETF on the same day.  It too started with just $2.5 million from their market maker.  Inflows increased the fund’s AUM by 10 times on the first day of trading. Three days later, as of Jan. 25, the Reality Shares Nasdaq NextGen Economy  (BLCN) fund has $86.7 million and is slated to reach $120 million this month, “for sure,” says Reality Shares CEO and co-founder Eric Ervin.

Tokenized Security Program By PolySwarm Offers Bounty For Malware (BlockTribune), Rated: A

Decentralized IT security marketplace PolySwarm is looking for a few good viruses.

The blockchain site has instituted a Security Expert Bounty Program, which will reward participants in Nectar tokens (NCT) for uploading malware to the platform. The contest launched January 19 and will continue until the end of the NCT token sale on March 8. Rewards will be capped at $300,000, with a maximum of $6,025 to be rewarded each day.

PolySwarm allows security experts to build anti-malware engines that compete to protect consumers. PolySwarm incentivizes a global community of information security experts to disrupt the $8.5 billion cyber threat intelligence industry.

Why Starbucks Might Start Accepting Litecoin (LTC) as Payment (usaCommerce), Rated: A

Mr. Schultz clearly isn’t on board with Bitcoin (BTC), but he did say: “I personally believe that there is going to be one or a few legitimate, trusted digital currencies off of the blockchain technology.”

He added that these trusted coins will need to be “legitimatized by a brand in a brick-and-mortar environment, where the consumer has trust and confidence in the company that is providing the transaction.” I think a lot of people can read between the lines here: a trustworthy cryptocurrency is on its way to Starbucks, but it’s not Bitcoin (BTC).

Because Litecoin (LTC) is More Accessible than Ripple (XRP)

It may have slipped to being the 7th most valuable crypto coin on the market (after being surpassed by Stellar (XLM) and Cardano (ADA), but LTC remains a very established and reliable online payment option. It may have lost a pretty big chunk of its market value in the past few months, but then again so did Ripple (XRP).

It May be Tradable for Free on Robinhood Soon too

Free stock market trading app Robinhood, that’s known for being super popular with millennials, recently announced that it will start running free cryptocurrency trades beginning next month.

LTC is Cheaper and More Scalable than Ethereum (ETH) and Bitcoin (BTC)

Litecoin (LTC), on the other hand, is four times faster than Bitcoin (BTC). On top of that, the median Bitcoin transaction fee is $3.45, while LTC transaction fees are just a couple pennies.

Why 5 Big Players Bemoan Bitcoin (Forbes), Rated: A

I am generally optimistic about blockchain, the technology behind cryptocurrencies, as a promising way to do everything from track transactions to pay artists. Yet I’m not sure that cryptocurrencies are the right way to use this technology — yet.

Goldman Sour On Cryptos — For Now

Let’s start with the most recent insights by Goldman Sachs, which just issued a 108-page report, which is a broad-based economic outlook:

“There is no doubt that the rise in bitcoin’s price has pushed it into bubble territory,” the report states on page 37. “While we do not know if Bitcoin or any other cryptocurrency will double or triple from prevailing prices, we do not believe that these cryptocurrencies will retain their value in the long run in their current incarnation.”

The Bubble Problem…

Jeremy Grantham compared Bitcoin’s price curve to that of the South Sea Company, Dutch Tulip Mania and stocks up until 1929.

Exchanges Are Leading The Way

You can buy futures on Bitcoin prices on the CBOE and CME platforms. The contracts were made available on the exchanges late last year.

Government Regulators Are Getting Involved

SEC Chairman Jay Clayton issued this caution last month:

“I believe that initial coin offerings – whether they represent offerings of securities or not – can be effective ways for entrepreneurs and others to raise funding, including for innovative projects.  However, any such activity that involves an offering of securities must be accompanied by the important disclosures, processes and other investor protections that our securities laws require. ”

When should you start taking the ‘crypto economy’ seriously? 3 milestones to watch for (VentureBeat), Rated: B

  1. When Jeff Bezos says ‘Filecoin has really dented our AWS business’
  2. When a cryptocurrency becomes an official national currency
  3. When 20 percent of Valley employees replace their stock options with crypto

More startup lawyers are accepting cryptocurrencies as payment (TechCrunch), Rated: B

A growing number of law firms working with startups are beginning to accept their payment in cryptocurrencies, according to a new report by the trade-focused outlet Law.com.

Bitcoin, ethereum can pay for home rentals through San Francisco startup (San Francisco Chronicle), Rated: A

In an attempt to address those issues, Chou and a group of Uber, Google and Facebook alumni are starting a San Francisco company called Bee Token that will offer a short-term rental marketplace called Beenest based on cryptocurrency. They call Beenest “Airbnb on the blockchain,” referring to the digital ledger that records cryptocurrency transactions.

Beenest will not take a commission on rentals.

Beenest will charge some fees, including an optional 2 percent fee from hosts for insurance, which it says covers up to $100,000 in damages. Hosts and guests who want to pay or get paid in traditional money will pay a 3.99 percent fee.

Bee Token Partners With WeTrust To Strengthen Insurance Offering In New Home-Sharing Network  (Business Insider), Rated: A

Bee Token, a San Francisco-based startup utilizing an ERC-20 ​utility ​token for its Beenest decentralized home-sharing network, announced a new partnership today with WeTrust, a blockchain-based platform for financial empowerment, to provide a decentralized insurance layer based on crowdsourced security deposits for Bee Token users, and improve risk assessment capabilities by integrating user history on the Beenest platform. Bee Token and WeTrust will collaborate to incentivize good behavior among users by sharing information around trustworthiness and creditworthiness, thus minimizing risks associated with property damage to hosts’ rentals at cheaper insurance rates that cover both property and/or furniture damage.

Roubini Doubles Down on Crypto Criticism, Calls Blockchain ‘Overhyped’ (CoinDesk), Rated: A

Nouriel Roubini, the former Clinton administration economist who predicted the 2008 financial crisis, says there is a revolution happening in the financial services industry, but blockchain – “an untested, Utopian pipe dream” – is not its catalyst.

In a new opinion piece published by Project Syndicate Friday, Roubini (nicknamed “Dr. Doom”) said blockchain’s potential has been overstated while condemning the notion that cryptocurrencies could replace fiat currencies as “utterly idiotic.”

THE TOP 10 BITCOIN AND CRYPTO INVESTING SITES (The College Investor), Rated: B

  1. Coinbase – As we mentioned above, Coinbase is by far the most popular because you can invest directly with USD. However, you can only currently purchase Bitcoin, Ethereum, and Litecoin on the plaform. Get started with Coinbase here.
  2. Bitconnect.co – Allows direct deposit of Bitcoin. You can also earn daily interest. Try Bitconnect here.
  3. BitStamp.net – Allows direct deposit of Bitcoin. Try BitStamp here.
  4. Bitfinex.com – Multiple cryptocurrencies. Trade on margin. Try Bitfinex here.
  5. Hitbtc.com – Advertised as the most advanced Bitcoin exchange. Try Hitbtc here.
  6. Binance – A great platform for getting into some currencies like Cardano or Neo. Try Binance here.
  7. Bitsane – Our favorite platform for getting into Ripple. Try Bitsane here.
  8. Kraken.com – Allows margin trading. Try Kraken here.
  9. Coinmama.com – Bitcoin and Ether. Buy with a credit card, Bitcoin or Ether. Try Coinmama here.
  10. Gdax.com – Very low transaction fees. Try Gdax.com here.

** I’m adding Robinhood Crypto to the bottom of this list because, on January 25, 2018, they announced that they would be offering free cyrpto trades on their platform. They are starting in just a few states, and with just Bitcoin and Ethereum, but they plan on expanding this quickly. This could be a game changer.

Austin Emerges As A Hub For Crypto And Blockchain Startups (Crunchbase), Rated: A

A prime example in Austin is Factom, a top 30 global cryptocurrency company that uses the blockchain to keep records and identities more secure. It has a valuation of around $500 million and counts the Department of Homeland Security and the Bill and Melinda Gates Foundation among its customers. Menlo Park-based Draper Associates is a lead investor in the company.

Overall, when it comes to smaller U.S. cities, Austin comes in fourth when it comes to venture funding raised by bitcoin and blockchain startups (excluding ICO funding), according to Crunchbase data. Factom is the largest recipient, having raised a total of $9.5 million since its inception in 2015.

crypto fundraising
Source: Crunchbase
United Kingdom

InsurePal Token Sale Hits Target in Under 80 Seconds (NewsBTC), Rated: AAA

The InsurePal crowdsale that started on January 16, 2018, closed in under 80 seconds, making a record in the history of ICOs so far. The distributed social proof insurance platform reached its token sale hard cap of $18 million within first two minutes of the crowdsale. With the latest success, the platform’s IPL tokens are being traded on Livecoin.net exchange, followed by IPL listing on other exchanges soon.

 

New Ethereum-Based Platform to Improve Governance Services (CoinTelegraph), Rated: A

As recently as November 2017, the government of the UK committed £20 mln (approximately $27 mln in the US). Just as fintech has emerged as one of the fastest growing modern industrial sectors, it appears that ‘GovTech’ may join it in prosperity soon.

Bitnation’ hails itself as a Blockchain-based solution to the drawbacks or absence of services provided by traditional governments or “service providers” as they have been called by the Bitnation’s Founder and Chief Executive Susanne Tarkowski Tempelhof when speaking to Max Keiser of RT.

Bitnation seeks to pioneer decentralized, smart-contractbased governance and help to overcome political, economic and geographic barriers posed by borders and overreaching regulations. Superseding the structures traditionally provided by these nation-states; this new Ethereum-based platform is set to provide superior services which are “better, cheaper, and fairer in a distributed and voluntary way.”

Why I accepted £4m in Litecoin for a fleet of racing cars (Telegraph), Rated: A

Would you transfer £4m into cryptocurrency to pay for a fleet of fast cars? This is the question being asked by Eleesa Dadiani, the self-styled “Queen of Cryptocurrency”, who has set up an agency that aims to connect buyers desperate to pay digitally with sellers wary of accepting.

Her eponymous Mayfair art gallery has been accepting digital currencies, including Bitcoin, since last year. Now she aims to give buyers a way to pay in a range of cryptocurrencies for very valuable items. Her most recent deal facilitated the £4m sale of a fleet of racing cars using Litecoin, a Bitcoin rival.

TokenCard: Technology allows shoppers to spend Ethereum cryptocurrency in high street (Express), Rated: B

TokenCard, which has headquarters in London, has brought in the smart contract powered debit card giving users access to the ‘token economy’.

The technology enables users to not only purchase but also spend cryptocurrencies, most specifically .

Cryptocurrency trader ‘forced at gunpoint to make bitcoin transfer’ (The Guardian), Rated: B

Thames Valley police said they were seeking witnesses who may have seen the four raiders who broke into the house in the picturesque Oxfordshire village of Moulsford, and threatened the trader and his partner. But they would not confirm local reports that the target of the raiders was not physical property but the man’s stock of the cryptocurrency.

China

Are Bitcoin and Crypto Prices Totally Dependent On China? (Investopedia), Rated: AAA

Cumulatively, Chinese exchanges account for the largest trading volumes. For example, according to Coinhills, a site that tracks trading volumes, exchanges based in China accounted for approximately 29% of overall trading volumes in cryptocurrencies during this past weekend.

Peer-to-peer marketplaces, such as LocalBitcoins, have also become popular with Chinese investors. They allow investments of up to $100,000. A measure of the popularity of bitcoin in China is the 8% price premium that the Chinese paid for bitcoin in the months following the ban.

digital currency exchanges
Source: Investopedia
European Union

Tezos in Turmoil as Project Faces In-Fighting, Token Distribution Delays (Coin Central), Rated: AAA

Since its ICO ended, Tezos has been slapped with at least six class-action lawsuits, which generally charge Tezos with violating federal security laws and defrauding their contributors.

The first of these lawsuits came last November from the Superior Court of California’s San Francisco branch on behalf of Andrew Baker, a Tezos ICO participant.  Among others, Taylor-Copeland Law filed the class action against Arthur and Kathleen Breitman, the project’s founders, and Tezos Foundation president Johannes Gevers.  The suit accuses the defendants of selling unregistered securities and committing securities fraud.

As Lawsuits Loom, In-Fighting Abounds

This in-fighting dates back to October between company founders Arthur and Kathleen Breitman and Johnnes Gevers.  In the project’s infancy, the Breitmans hired Gevers to run the Tezos Foundation.  Based in Switzerland, the Foundation is charged with managing ICO and project funding.

But a month before their run-in with legal issues, the Breitmans demanded that Gevers step down as the chairman of the Foundation’s board.  Responding to the move, Gevers argues that “the Breitmans have attempted to bypass the Swiss legal structure and take over control of the foundation, and have acted destructively, causing months of delays in the Tezos project,” according to a Wall Street Journal article.

In an email quoted by Fortune, Kathleen Breitman fired back at these claims, accusing Gevers of sabotaging the project and mishandling funds for self-gain.

Tezos Community Sides with Breitmans, Adding Fuel to the Fire

Following the investigation, Schmitz-Krummacher has resigned from the Foundation, citing “destructive activities” such as blackmailing that hinder the board from governing properly.  Given the Tezos community’s loyalty to the Bretimans, one wonders if these “destructive activities” may have come from the Tezos community.

Cardano: A New Disruptor in the Cryptocurrency Market? (The Market Mogul), Rated: A

One cryptocurrency that has considerably surged in price since the tail end of last year has been Cardano, dubbed the ‘third generation’ cryptocurrency. Its meteoric increase in price has indeed been impressive – since late November last year, the price surged from $0.03 to a high of $1.28 – an increase of 4000%. Since its price peak in early January, it has fallen to $0.61 at the time of writing.

cardano
Source: CoinMarketCap

Hacker phishes Experty ICO, steals 0,000 in Ethereum (ZDNet), Rated: A

Experty’s keenly-awaited ICO has dissolved into disarray after a hacker targeted investors and stole roughly $150,000 in Ethereum (ETH) ahead of the event.

Experty‘s Initial Coin Offering (ICO), also known as a token sale, is designed to raise funds for a “Skype-like voice and video application” which could also take secure payments through the Blockchain.

Estonia makes ‘token’ effort to take euro crypto (The Peninsula Qatar), Rated: A

Korjus’ e-Residency programme allows people worldwide to open businesses in Estonia — and hence the European Union — and manage them remotely, declaring taxes and signing documents digitally.

More than 4,000 businesses and 28,000 individuals have signed up to the scheme since it was launched in 2014.

All three “estcoin” proposals would be tied exclusively to the e-Residency programme.

In the first, Estonian e-residency holders investing in the programme would be rewarded with estcoins.

In the second, “estcoins” would be tied to a user’s e-Residency identity and used for “digitally signing documents, logging into services or enforcing smart contracts.”

In both of these versions, the estcoin’s value would depend on its usefulness on the blockchain, and would not be pegged to the euro.

Unstoppable Data for Unstoppable Apps – An Interview with Streamr’s Henri Pihkala (CryptoSlate), Rated: A

It seems, perhaps as a result of the growth of the social media and advertising industries, that data is an increasingly valuable resource. In the same vein as projects like Brave with the Basic Attention Token, Streamr aims to return control back to its users, by allowing them to sell it however they see fit.

Matt Breen: How would you sell someone on the platform?

Henry Pihkala: You, your phone, your car, your home, the apps you use, the company you run, the city you live in – everything around you is constantly producing streams of real-time data. How much revenue are you earning from that data? Zero, you say? We want that changed.

MB: Let’s pretend that IOTA actually works as intended. How is Streamr superior?

HP:  IOTA aims to do micropayments, while Streamr does massively scalable low latency publish-and-subscribe messaging and NO payments. Instead, we use an accompanying blockchain for payments, identity, and a few other things in order to avoid reinventing the wheel. Consider wallets, for example. Streamr will work with any Ethereum wallet in the world. That’s a nice perk.

IOTA aims to build a self-sufficient system, while Streamr plays ball with others. We aim to work in tandem with current and future smart contract ecosystems – first Ethereum, but later perhaps NEO, RSK, even Hyperledger, or whatever becomes popular down the road. Some layers of the Streamr system could even interact with IOTA!

MB: Who’s the target audience?

HP: The easiest wins are available for companies already producing and selling data or data services, such as device manufacturers, analytics companies, financial marketplaces, satellite operators, and so on. Currently they are doing it from within their silo because there is no other way, meaning they set up and manage their own delivery and payment infrastructure.

MB: Have you forged any partnerships with other projects or businesses?

HP: Sure! We have an official R&D partnership with Golem, as we are building complementary technologies which can become major building blocks of the future application development stack. We are also highly interested in decentralised computation, because it will benefit the Streamr Engine component of our stack.

IOTA to be Used in the Netherlands to Validate Identification Process (Crowdfund Insider), Rated: B

Distributed ledger technology (DLT) is a perfect fit for this type of service and at least one city in Holland – Haarlem – DLT will be utilized at some point in 2018 to create a proof of citizenship minus the painful bureaucracy.

According to a post in Discipl, IOTA – a new spin on Blockchain, will be used to fix the “awful user experience and inefficient process” using this “cutting-edge distributed nonprofit open source technology.”treamrhq

International

Value of Initial Coin Offerings market breaks through $ 4 billion barrier (Consultancy), Rated: AAA

According to a new report, the total value of Initial Coin Offerings has breached the barrier of $4 billion globally. While the notoriously volatile value of the likes of Bitcoin has broadly risen, however, a number of factors could see the cryptocurrency bubble burst in the near future.

Four triggers could cause a huge cryptocurrency crash (CNBC), Rated: AAA

As of Monday, the entire cryptocurrency market stands at approximately $563 billion, according to industry site CoinMarketCap, which represents a more than 3,400 percent increase from the beginning of 2017.

Regulation

If regulators in the U.S., Europe or elsewhere get together and ban exchanges and other companies that provide services to the crypto ecosystem, that would have a hefty effect on cryptocurrencies themselves, which cannot really be banned.

Looking at China, which “banned” cryptocurrencies in the summer of 2017, there’s one clear result: People and companies simply moved somewhere else.

Exchanges

Prior to 2014, the crypto ecosystem saw one exchange accounting for over 70 percent of all trading volume: Mt. Gox. At the beginning of that year it suspended trading, initiating an 80 percent crash of the entire crypto market from its high.

Credit

Some exchanges allow users to buy cryptocurrencies with credit cards. And, on top of that, investors can even leverage purchases in many cases.

In fact, one report put the number around 3 to 4 percent for purchases that are made on credit that could not be paid back by the buyer.

Tether

If a cryptocurrency has a market cap of $1 billion, it doesn’t mean that $1 billion has flown into that cryptocurrency. It was probably a lot less, since the market cap gets calculated by multiplying the number of tokens by its last trading price.

So, for a cryptocurrency to have a market cap of $1 billion, maybe only $50 million actually moved into the cryptocurrency. Therefore, if that coin collapsed completely, its market cap would go from $1 billion to zero, but investors would have actually only lost $50 million.

There is one big exception: tether.

Tether gets issued out of thin air through a very complex system, supposedly whenever $1 is deposited in return. At the moment, tether is priced at around $1.6 billion, which supposedly means $1.6 billion actually went into that cryptocurrency.

According to some reports, however, there isn’t actually $1.6 billion backing up the token. Since many exchanges and other cryptocurrencies are connected to tether, any finding that its stated value is untrue would send the market into a significant decline.

Part One of Ethereum’s Sharding Roadmap Is Nearly Done (CoinDesk), Rated: AAA

Ethereum is getting closer to deploying new technology that would allow the network to scale, its founder said.

The technology, known as sharding, attempts to split the ethereum blockchain’s data into more manageable parts.

Ethereum is under pressure to keep up with the rising popularity of the platform, which has led to slower transaction times and high processing fees. The congestion has already led some token-based projects to build atop other blockchains such as Stellar.

Gas Price Growth Threatens Ethereum’s Success (Seeking Alpha), Rated: AAA

Despite positioning as a global decentralized computer and a platform to run DAPPs, the Ethereum platform no longer serves the purpose it was created for.

The first problem of the platform is that it is becoming very expensive for its main users. We calculated the change in price of gas (aka renting costs).

The formula below just converts the price of gas from Ethers to dollars.

Price of 1 million units of gas in USD = Average price of 1 unit of gas in Wei * USD/ETH * 1024

See the spreadsheet with calculations here.

ethereum gas
Source: Seeking Alpha

The Periodic Table of Blockchain (CoinDesk), Rated: AAA

A digital asset is anything that exists in binary format, and comes with the right to use it.

A token is an accounting unit that represents its owner’s balance in a designated asset.

There are five processes in a digital accounting system, which may have at least three states (centralized, decentralized, not possible), and which can be managed by one or separate roles:

  • Governance
  • Custody
  • Issuance and distribution
  • Transaction processing
  • Audit

Cryptocurrency

All five processes are managed by this algorithm, which is run independently by each participant. The key property of a cryptocurrency is the level of decentralization (the number of participants, and the correlation between their decisions).

Central bank currency

A system with all five processes centralized and managed by a central bank, in which digital currency is pegged to a national currency on a 1:1 ratio.

Digital currency

In some systems, processes such as validation of transactions, fee set-up and updates can be handled by the decentralized network of users – while currency issuance and initial distribution is managed by a centralized organization.

Commodity-backed tokens

A commodity is an item produced to satisfy wants or needs. Commodity-backed tokens represent ownership rights in a particular amount of a commodity.

Equity tokens

A security is a fungible financial instrument that represents some type of financial value.

Equity represents ownership in a company or participation in its revenue stream. Security tokens represent ownership of an underlying security, or a share in a cash flow generated by the system.

Accounting tokens

Accounting tokens represent something that makes sense to account, yet doesn’t make sense to transfer.

Digital collectibles

A collectible is any object regarded as being of value or interest to a collector.

Utility tokens

Utility is a quality of an object’s usefulness. Utility tokens represent the right to use system functionality. The role of utility tokens is to make system usage simpler than it was without them, which is true under certain conditions.

The Opportunity for Interoperable Chains of Chains (CoinDesk), Rated: A

Fundamentally, there are two types of chain interoperability:

  • Relaying messages about the state of one chain to another. This includes synthetic tokens (AKA one-to-one pegs, two-way pegs, or sidechains).
  • Cross-chain atomic swaps. The exchange of tokens between users across chains, without trusting a third-party.

Cross-chain messaging

If one is relaying messages to issue synthetic tokens across chains, this would result in cross-chain double spends, which is unacceptable. Accommodating the perpetual “what if the relayer is on an orphaned fork” risk is by far the greatest challenge in message-relaying systems.

Cosmos and Polkadot address the orphaned-chain problem through two mechanisms. First, using the inter-blockchain communication (IBC) protocol, they store Merkle-ized block headers for each cross-chain transaction. Building on a history of Merkle-ized block headers, Cosmos/Polkadot maintain global invariant balances of the total supply of each token. Together these mechanisms prevent cross-chain double spends.

Cross-chain atomic swaps

The first cross-chain atomic swap recently occurred between Litecoin and Decred.

Cross-chain atomic swaps will be technically easier to implement between general-purpose smart contract platforms. It will take another one or two years for these libraries to mature and become widely adopted, but they will. There aren’t many technical questions remaining.

The other major challenge with cross-chain atomic swaps is price discovery and order matching.

Some YouTube ads forced users’ computers to mine cryptocurrency (androidcentral), Rated: A

This week, users in France, Italy, Japan, Spain, and Taiwan reported that their antivirus programs were alerting them of unauthorized cryptocurrency mining code while watching videos on YouTube. Even when users changed browsers and visited other websites, these warnings only popped up while on YouTube.

Following these complaints, online security company Trend Micro reported that attackers had been using Google’s DoubleClick advertisement system to take control of users’ computers’ CPUs to mine cryptocurrency – specifically, a digital coin called Monero.

Before you build your startup on Ethereum, consider the options (VentureBeat), Rated: A

Before you build your blockchain startup atop Ethereum, which is what most people in cryptoworld do, take a step back and survey the field. With a little comparison shopping and a lot of hustle, you can secure a blockbuster deal with one of Ethereum’s rising challengers.

Blockchain platforms like Stellar, NEO, DragonChain, Zen Protocol, and dozens of others have unique technical advantages that may be a better fit for your project than Ethereum. And these challengers are flush with cash, hungry for startups like yours to join their ecosystem, and willing to cut deals to make that happen.

POSSIBLE LITECOIN AND MONERO MERGER STEPS CLOSER TO REALITY (Bitcoin News), Rated: A

Monero (XMR) project lead Riccardo Spagni and Litecoin (LTC) creator Charlie Lee would appear to be taking tentative baby steps in potentially bringing their two coins closer. Spagni posted the following tweet yesterday, which first bandied the idea of a possible merger between the two cryptocurrencies:

litecoin monero

Bubbletone to Use Blockchain Technology as a Solution to International Roaming (cryptovest), Rated: A

Bubbletone’s next step is to do away with international roaming by launching a large blockchain-based infrastructure platform for the telecommunications market. A user traveling abroad can open the app and choose from a selection of plans on local networks and at local prices, which are much lower than the usual roaming rates. The user then pays for the plan and on arrival abroad becomes a local subscriber to a foreign mobile service provider, without ever having to switch SIM cards or phone numbers.

The telecom blockchain integrated with BubbleTone mobile app is set to be showcased at Mobile World Congress in Barcelona in late February 2018.

THE FUTURE OF THE DIGITAL WALLET (Bitcoin News), Rated: A

We would come to know this as the era of the first generation of digital wallets. Fast forward two decades and a technological revolution later, and we are currently in the third generation of digital wallets. And as they say, the third time’s the charm.

However, there was one large issue with this generation of digital wallet services, and that was the lack of simplification and integration of the solutions.

The third generation of digital wallets fixes this complication, and its arrival was received with much fanfare and welcoming arms. Essentially, they are secure systems that store payment information from as many credit cards as you own, as well as multiple passwords for a range of exchanges and websites you engage with. They are designed to hold cryptocurrency the way physical wallets are designed to hold physical currency. They can be accessed conveniently from a PC or smartphone.

India

Zebpay, India’s Top Crypto Exchange, Adds Trading Support for Litecoin (Bitsonline), Rated: AAA

India’s leading bitcoin exchange platform Zebpay has added trading functionality for the seventh largest cryptocurrency by current market capitalization, Litecoin (LTC). Surprisingly or unsurprisingly, the Indian exchange saw litecoin prices acutely plummet in the first few hours of trading while the global litecoin markets remained steady.

APAC

Coincheck: Stolen $ 534 Mln NEM Were Stored On Low Security Hot Wallet (CoinTelegraph), Rated: AAA

Japanese cryptocurrency exchange Coincheck, one of the largest in the country, was the victim of a massive hackresulting in a loss of 523 mln NEM coins, worth approximately $534 mln.

The coins were stolen via several unauthorized transactions from a hot wallet at 3:00 am local time on Friday, Jan. 26.

Coincheck promises 46bn yen refund after cryptocurrency theft (BBC), Rated: B

Coincheck has promised to use its own funds to reimburse more than 46bn yen ($423m) to customers who lost their NEM cryptocurrency coins on Friday.

Regulators take action against Coincheck after cryptocurrency theft (Kyodo News), Rated: A

Japan’s financial watchdog on Monday took administrative action against Coincheck Inc., the virtual currency exchange that said last week 58 billion yen ($532 million) in the cryptocurrency NEM had been stolen by hackers.

The agency directed the exchange to submit by Feb. 13 a report on the cause of the breach and what steps it is taking to improve security.

CoinCheck says the only cryptocurrency affected is NEM, the world’s tenth largest, as $400 million of its XEM tokens were stolen from the firm.

According to data from Coinmarketcap, most of the world’s leading cryptocurrencies saw a sharp dip at around 11 p.m. Eastern Thursday night, indicated by a red arrow below, when the exchange began a series of announcements that it was restricting NEM and other transactions. This was followed by a rebound in prices at 9:30 a.m.

This trend rang true for every token other than XEM, which dropped about 10 percent in price without any sign of recovery.

bitcoin coincheck
Source: Inverse Innovation

NEM was clearly hit the hardest and failed to recover after the press conference. The token started the day at around $1 and sank as low as $0.76. It is now valued at somewhere below $0.84.

NEM coincheck
Source: Inverse Innovation
ethereum coincheck hack
Source: Inverse Innovation

Litecoin, the cryptocurrency started by Charlie Lee — the former director of engineering at Coinbase — sank to $167 from $180. It has since bounced back to roughly $174.

Stellar coincheck
Source: Inverse Innovation
Russia

Russia Outlines Investor ICO Cap of $ 900 per Token Sale (CryptoCurrency), Rated: AAA

The Russian Ministry of Finance has released its latest draft relating to the legal status of digital financial assets.

Per the latest publication, Russia is tackling ICO investments with a series of rules. Consequently, the ministry has given specific focus to several laws that detail restrictions associated with payments and raising funds via ICOs. Key provisions include a maximum cap of $900 per token sale, equivalent to 50,000 RUB for each investor. Of note, these limits will take effect 90 days from the date of its release.

Authors:

George Popescu
George Popescu
Allen Taylor
Allen Taylor

About the author

Allen Taylor

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