New Cross-Chain Protocol Will Let You “Teleport” Tokens Between Ethereum and EOS

New Cross-Chain Protocol Will Let You “Teleport” Tokens Between Ethereum and EOS

shEOS, a female-founded EOS block producer, has introduced a new cross-chain protocol called EOS21. This protocol will allow developers to “teleport” Ethereum tokens onto the EOS blockchain. The protocol was announced on the group’s Medium blog, and a video demo will be released soon.

EOS21 allows tokens to be easily moved from the Ethereum blockchain to the EOS blockchain. Although there are already ways of running apps on different blockchains, there are drawbacks and limitations. As shEOS explains, “Any token should be able to move as the developers desire or require, as their apps may be best run on different chains at different times.”

For this reason, the protocol will seamlessly transfer tokens between the two blockchains. Although the original tokens will exist on the Ethereum blockchain after they are moved, they will no longer be fungible. This is accomplished by a “black hole” contract that absorbs Ethereum tokens and an “oracle” program that distributes EOS tokens.

In other words, EOS21 allows Ethereum tokens to be decommissioned on one chain while EOS tokens are distributed on the other. This enables developers to build applications on a particular blockchain while accepting an otherwise incompatible token. This is clearly beneficial, as shEOS posits:

“How empowering would it be for developers to have freedom to move their tokens to any chain they wanted to? To any chain they felt best addresses the needs of their particular project?”

Cross-chain tokens are a growing trend in the blockchain world, and EOS21 is a project that is in good company. The project coincides with the recent announcement of WBTC, a token that links Bitcoin and Ethereum. It also follows August’s launch of Dogethereum, a Dogecoin-Ethereum bridge.

Although these projects have different technical underpinnings, they all provide ways for competing blockchains to work with one another. If this trend becomes ubiquitous enough, users might not have to worry about exchanging tokens in order to use an app.

In fact, EOS21 may extend its reach beyond just two blockchains. shEOS is considering adding support for other platforms, such as GoChain and Stellar.

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MakerDAO Introduces New Collateral Interface

MakerDAO Introduces New Collateral Interface

MakerDAO has introduced a new CDP Portal, which serves as a simplified and streamlined interface that allows users to generate their own collateralized Dai stablecoins. The news was announced in a recent Medium post that details the portal’s many features.

Collateralization on MakerDAO

The CDP Portal allows individuals to lock up their Ethereum tokens in MakerDAO’s smart contracts. In return, users can generate and receive Dai tokens, which have a stable value. This lets users obtain tokens with a consistent price, but also allows them to retain control over their collateralized tokens.

This process does, however, come with a cost. Your collateralized ETH must be worth at least 150% of the value of the Dai that you generate. In order to keep the price of Dai stable, MakerDAO will sell the excess collateral as the price fluctuates. (Other minor costs are also detailed on the CDP Portal’s landing page.)

What Is the CDP Portal?

Although MakerDAO’s old interface provides functions similar to those of the CDP Portal, the new portal is much easier to understand and use. MakerDAO has spent the past several months redesigning the interface and testing it with users.

The portal serves as a frontend to MakerDAO’s collateralization contracts. Since the platform runs on a public blockchain, MakerDAO is also encouraging independent developers to create their own custom frontends.

Streamlining the Collateralization Process

The CDP Portal will make the collateralization process much faster. As a recent tweet from MakerDAO explains, the new portal “[takes] the number of clicks to open a CDP from 8 down to 2-3.”

Several changes make this possible. Notably, many features have been combined: a proxy contract performs several basic transactions automatically. This means that users can open their CDP, lock in collateral, and generate Dai all at once.

The user interface has also received a number of changes: apart from a new look, it also provides relevant information to users. This is accomplished via warnings about unsafe choices and a dashboard that lists various possible actions.

The CDP Portal also adds support for two hardware wallets (Ledger Nano S and Trezor), and will continue to support the Metamask and Parity software wallets.

Suggested Reading Learn more about the best altcoin wallets in 2018.

What Are the Implications?

Since MakerDAO’s collateralized and issued assets are both cryptocurrencies, the platform provides a decentralized alternative to other stablecoins. For example, it eliminates the need for a centralized reserve, such as the one used by Tether.

Although MakerDAO’s CDP Portal accepts only ETH tokens at the moment, it will eventually allow users to deposit multiple tokens as collateral. As such, the efforts of MakerDAO could bring stability to many different coinholders in the future.

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South Korea Cracks Down on Unauthorized Cryptocurrency Funds

South Korea Cracks Down on Unauthorized Cryptocurrency Funds

South Korean financial regulators are cracking down on unauthorized cryptocurrency funds. In particular, one crypto fund launched by a local exchange is reportedly being investigated. The exchange claims no wrongdoing as its token activities were carried out overseas, but has promptly canceled its plan to launch a second fund.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Unauthorized Crypto Funds

South Korea Cracks Down on Unauthorized Cryptocurrency FundsSouth Korea’s Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) have warned investors of unauthorized cryptocurrency funds. The warning followed the launch of a financial product where “cryptocurrencies collected from some investors are managed through initial coin offerings (ICO), and profits are distributed at their expiration dates,” Business Korea described.

The regulators specifically referred to the fund launched last month by crypto exchange Zeniex called “ZXG Crypto Fund No. 1,” which is “the first virtual currency fund in Korea,” the publication detailed, noting:

The virtual currency fund has never been registered with the Financial Supervisory Service … None of the management company, sales company and the trustee have been approved by the Financial Services Commission.

Maeil business newspaper reported on Tuesday that “The financial authorities have handed over the circumstantial data for the investigation to the prosecution.”

South Korea Cracks Down on Unauthorized Cryptocurrency FundsZeniex explained that while funding was made through its platform, “the actual recruitment and token issuance were made by overseas management companies,” the news outlet conveyed. Noting that less than 1 billion won ($878,080) has been raised, the company believes that there was no reporting obligation. An official of the exchange was quoted asserting:

An indirect investment in a virtual currency fund is an attractive tool to raise market soundness … It’s unfortunate that innovative attempts will not continue until the government’s guidelines are set.

The South Korean government banned ICOs in September last year but has yet to introduce guidelines for them. A number of proposals have been submitted to the National Assembly and the government is expected to announce its ICO stance in November.

Zeniex’s Funds and Capital Markets Law

South Korea Cracks Down on Unauthorized Cryptocurrency FundsBusiness Korea explained that under the Korean Capital Markets Act, all investment funds must be registered with the FSS.

In addition, “Public offering funds that collect funds from general investors must file securities reports,” and “an asset management company that manages a fund and the fund sales company that sells it have to obtain necessary financial approval,” the publication detailed.

The company must also “honor regulations on business practices such as the maintenance of minimum capital for soundness and the prevention of conflicts of interest and [has] a duty to explain to investors.”

As for Zeniex’s fund, an FSS official was quoted by Maeil saying, “It is the interpretation of the authorities that the fund must follow the investor protection system set out in the capital markets law as long as it is sold to domestic financial consumers.” However, the official admitted:

There is no way to check whether the platform is operating as claimed by Zeniex, because the financial authorities have no regulatory authority at present.

Zeniex had planned to launch its second fund this month. However, the company issued a statement on Monday stating that “The authorities are concerned that there is room for illegality,” adding that it “will completely cancel the launch of the second product because it could lead to misunderstandings of investors and regulators.” Local media then reported on Tuesday that Zeniex has canceled the launch of its second fund.

What do you think of South Korean regulators cracking down on unauthorized crypto funds? Let us know in the comments section below.


Images courtesy of Shutterstock and Zeniex.


Need to calculate your bitcoin holdings? Check our tools section.

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Bitcoin Price Analysis: Weekly Consolidation Hints Toward Sustained Breakout

Bitcoin Price Analysis: Weekly Consolidation Hints Toward Sustained Breakout

Another week has passed as bitcoin continues to coil in a tighter and tighter consolidation. Both price and volume continue to consolidate as bitcoin decides where the next major move will be. A trend of higher lows and lower highs shows a balance of both supply and demand, but ultimately one will win out:

fig1Figure 1: BTC-USD, Daily Candles, Macro Consolidation

To gain a perspective of *just* how tightly wound the market is, a great tool analysts often use are Bollinger Bands (bbands). Bbands are a visual representation of forecasted volatility. If the bands are squeezing, there is a forecast for increased volatility in the future. Conversely, if the bands have already expanded and are beginning to round/bulge, there is a forecast for decreased volatility. In our case, on the weekly candles, the bands are squeezing tighter than they have in several years:

fig2Figure 2: BTC-USD, Weekly Candles, Bollinger Band Squeeze

During the bull run, we could see a very clear trend of support being found on the bband midline for several years. However, at the beginning of our bear market, the midline has continuously proven itself to become resistant to every single rally over the last few months. However, as the price begins to consolidate further and further, the midline has drawn itself within striking distance, while the price trend has established a series of higher lows.

Even though a breakout has yet to happen, there are some early signs we can keep an eye out for, using the weekly Bollinger bands. I believe this next move will be a strong, sustained move that will paint the course of the market for months to come.

It’s very easy to get lost in the weeds while trading bitcoin because it is so volatile on low timeframes, but if you look at the bigger picture on daily and weekly candles, we can see the strength of the trend.

One early sign of a directional breakout is when the bbands begin to expand again. As I stated earlier, bbands are a visual representation of consolidation and can forecast volatility. If the bbands begin to expand, that is an indication that the volatility has chosen a direction and will likely continue in that direction until the bbands round/bulge — thus indicating a forecast for decreased volatility until it consolidates once again.

An early sign of a bullish trend reversal will be on the close of the weekly candle. If bitcoin can manage to close above the weekly midline, that will be a sign that we have broken resistance.

However, it’s important to note that just because we close above the midline doesn’t mean we *must* continue. The next candle (the one following the candle close above the midline) will give us more information. If we can establish two consecutive candles closing above the weekly midline, this will be a definite change of character for our trend as we have yet to see two consecutive closes above the midline:

fig3Figure 3: BTC-USD, Weekly Candles, BBands Midline Rejections

Summary:

  1. Bitcoin continues to wind tighter and tighter as both price and volume consolidate in a sideways fashion with both higher lows and lower highs.
  2. On a macro scale, the consolidation can be visualized using weekly candle Bollinger Band trend. We are currently the most consolidated the market has been in several years and the breakout of this consolidation with undoubtedly be a strong, sustained move..
  3. Early signs of a breakout direction will be found with the BBand trend on the weekly candles. If the weekly candles can manage to close above midline of the BBands and, most importantly, find support, this will be a strong sign of a change of market character on a macro scale.

Trading and investing in digital assets like bitcoin and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on BitcoinLinux and BTC Media related sites do not necessarily reflect the opinion of BTC Media and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.

This article originally appeared on BitcoinLinux.

UK Government Moots Ban on Cryptocurrency Derivatives

UK Government Moots Ban on Cryptocurrency Derivatives

The U.K. government is considering a ban on cryptocurrency-linked derivative products. The Financial Conduct Authority said in a report on Oct. 29 that it will begin consultations on whether to ban the sale of derivatives based on digital coins like BTC as well as to restrict crypto-based contracts of difference to the public. Virtual currency futures and options will also be looked into, in discussions slated for the first quarter of 2019.

Also Read: Coincheck Reports Deepening Losses of $5.3 Million in Third Quarter

FCA Worried About Consumer Protection and Risk of Cryptocurrency-Related Illegal Activity

“Given concerns identified around consumer protection and market integrity in these markets, the FCA will consult on a prohibition of the sale to retail consumers of all derivatives referencing exchange tokens such as BTC, including CFDs, futures, options and transferable securities,” the financial watchdog said.

UK Government Moots Ban on Cryptocurrency Derivatives

“The proposed prohibition would not cover derivatives referencing cryptoassets that qualify as securities,” it stated, in a report compiled by the Cryptoassets Taskforce, made up of the Bank of England, the FCA and the British Treasury. Contracts of differences on securities are to remain subject to the short-term restrictions of the European Security and Market Authority.

Whereas futures allow investors to pay for commodities or financial instruments to be delivered sometime in the future at a certain price, CFDs are basically financial derivatives that pay an investor the difference between the opening and closing price, in this case of a digital asset.

 Regulator Targets ‘Robust Response’

European regulators have complained that cryptocurrencies are risky, and repeatedly alleged that they help to fuel money laundering and terrorism while placing investor funds at the mercy of fraudsters. Their alarmist entreaties have ramped up pressure on governments to act, with many promulgating a series of regulations ostensibly to safeguard public funds and prevent the risk of financial instability.

The FCA, which has oversight of cryptocurrency derivatives because they are classified as financial instruments, rehashed similar concerns in its latest report. “The U.K. will not tolerate the use of cryptoassets in illicit activity, and the authorities will take strong action to address these risks by bringing all relevant firms into anti-money laundering and counter-terrorist financing (AML/CTF) regulation,” it warned.

The latest report comes hardly two months after some U.K. lawmakers, calling for regulation, likened the cryptocurrency market to the “Wild West.”

UK Government Moots Ban on Cryptocurrency Derivatives

According to the taskforce, British authorities are developing a robust regulatory response that will address identified risks. It indicated that regulators will go significantly beyond the requirements set out in the EU Fifth Anti-Money Laundering Directive (5MLD), in the hope of delivering what it claimed to be “the most comprehensive responses globally to the use of cryptoassets for illicit activity.”

“The government will consult on its proposed actions in the new year, and will legislate during 2019 to give effect to this response,” the FCA detailed, adding that fiat-to-crypto exchange firms and custodian wallet providers will be brought within the scope of anti-money laundering regulation.

The Cryptoasset Taskforce was set up in April following concerns that the generally unregulated digital currency market is susceptible to fraud and manipulation, and can be used by criminals to expedite money laundering. This is despite clear evidence showing the legacy financial markets, led by central banks and credit card cartels, to be significantly more complicit in abetting such behavior.

What do you think about the potential ban on cryptocurrency derivatives in the U.K? Let us know in the comments section below.


Images courtesy of Shutterstock.


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

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Bitcoin Turns Ten: A Blast To The Past

Just shy of 10 years ago, on October 31st, 2008, Satoshi Nakamoto, the pseudonymous creator of the now-world-renowned Bitcoin project, sat down to release a technical paper on what is arguably the most important innovation in human history.

Bitcoin Origins

As you may (or may not remember), this paper, titled “Bitcoin: A Peer-to-Peer Electronic Cash System,” highlighted the world’s first decentralized network and a viable form of digital cash that was seemingly poised to usurp the powers that be — the government and centralized institutions.

Initially, Nakamoto’s paper was slow to garner traction, occasionally seeing a few clicks from subscribers of Metzdowd.com, a lesser-known cryptography mailing list that was frequented by innovators, digital anarchists, and zany internet goers who likely had two too many beers. In spite of only seeing fleeting flashes of interest at the start, Nakamoto, who claimed to be a Japan-based coder, pushed ahead, launching Bitcoin v0.1 via Sourceforge on January 9th, 2009.

In the Bitcoin Network’s first block, commonly referred to as the near-deified “Genesis Block,” Nakamoto, making his hate for banks public, embedded the following comment:

The Times 03/Jan/2009 Chancellor on brink of second bailout for banks

While this could’ve been any old headline snagged from one of the internet’s thousands of RSS feeds, the fact that Nakamoto chose a story that clearly outlined the state of the traditional banking system at the time indicates that he had a penchant to hate banks.

As the first block was processed and the first coinbase transaction was issued, it was apparent that Satoshi was all by his lonesome, as his node, the world’s first full Bitcoin node, sat alone and in the dark. However, this changed when computer scientist Hal Finney overtly expressed interest in the decentralized system, becoming the first user to ever receive a BTC transaction, and from Satoshi himself, no less.

Still, despite the fact that the Bitcoin Network was as decentralized (and appealing) as systems come, with a (near) set-in-stone 10-minute block time and a fixed distribution curve, for a majority of the system’s infant months, Satoshi and Finney were left alone to twiddle their thumbs… Or in this case, to twitch their fingers over a keyboard in a bid to better the Bitcoin Network.

In a testament to the ghost town that was Bitcoin in 2009, Nakamoto, who is believed to have been Hal Finney by some, mined an estimated one million BTC, which have presumably been lost in the ether.

However, as the brainchild of Nakamoto turned one, the pseudonymous coder’s involvement in the project waned, like a candle reaching the end of its wick. And eventually, due to an unexplained series of circumstances, in classic Satoshi style, the Bitcoin founder disappeared, quickly handing pertinent keys and data over to Gavin Andresen, along with a handful of other early crypto adopters, to foster the project further.

Following that fateful day in 2010, Bitcoin wasn’t one man’s creation any longer, but rather, an innovation backed by a countless number of diehard decentralists and those with visions of a new world — one revolutionized by decentralized systems.

The Bitcoin Pizza, Mt.Gox, Silk Road

On May 22nd, 2010, the world saw one Laszlo Hanyecz issue the world’s first real-item BTC transaction, sending 10,000 BTC (~$40 at the time) to a Bitcoin Forum user named Jercos in exchange for two Dominos pizzas. While this occurrence may seem silly and something that should be swept under the rug, since Laszlo took the first bite of his 10,000 BTC pizza, nothing has been the same — hence the creation of “Bitcoin Pizza Day.”

While Laszlo’s transaction was a crypto-to-fiat transaction in essence, at the time, there were few legitimate, accessible, and easy-to-use platforms that openly supported fiat, which hampered the adoption and maturation of Bitcoin and the earliest semblance of altcoins.

Programmer Jed McCaleb aimed to solve this problem, turning Magic: The Gathering Online eXchange (Mt.Gox), which he owned, into the Bitcoin exchange that some loved, and others loved to hate. Eight months after launching Mt.Gox on July 18th, 2010, McCaleb, who has since done stints at the Stellar and Ripple projects, sold Mt.Gox to French developer Mark Karpeles, who was situated in Japan at the time.

As the now-infamous story goes, Mt.Gox saw its first tussle with hackers in mid-June 2011, when a malicious attacker forced the nominal price of BTC to move to $0.01 on the exchange. Although this breach was evidently dangerous and exposed flaws in the platform’s operational security systems, interested consumers continued to flock to Mt.Gox. By 2013, the Japan-based platform had garnered an average of 70% of the world’s daily BTC volume, indicating that McCaleb’s move to pawn off Mt.Gox to Karpeles may have backfired.

As Mt.Gox continued to gain traction, Ross Ulbricht, the alleged founder of the online BTC-centric Silk Road marketplace, was implicated in cases of money laundering, computer hacking, conspiracy to traffic narcotics, “and attempted murder.” Ulbricht, who has been dubbed a hero by many in the cypherpunk community, was sentenced to a life without parole in prison, with this being one of the first times that the U.S. government had gone all-out against crypto, shutting down Silk Road’s illicit good market in the process.

As Silk Road collapsed, Mt.Gox exchange remained at the top of the leaderboards, so to speak. However, In February 2014, the exchange suffered a ground-breaking hack, reportedly losing upwards of 750,000 BTC. This hack, which saw Mt.Gox lose over $473 million worth of BTC (at past valuations) and the subsequent shutdown of Mt.Gox catalyzed the creation of a Japanese court case, which still rages on to this day. Along with sparking a heated legal debate, with “Mt.Gox, where’s our money?” becoming the war cry of hack victims, the story of Mt.Gox became one of the first crypto-related stories to garner traction in the mainstream media realm, leading many consumers to permanently disassociate their lives with Bitcoin and cryptocurrencies.

However, it wasn’t all doom and gloom in the crypto markets, as during the multi-year course of aforementioned two events, the nascent crypto ecosystem continued to mature at an unbridled pace. For one, in early 2011, as Mt.Gox was starting to stand on its own two feet, Wikileaks, a non-for-profit leaked/secret information source, revealed that it would add support for BTC following an embargo from payment providers, who didn’t want to associate themselves with the illicit leaking of confidential information.

Although this is only one out of the hundreds of examples of real-world adoption (Overstock.com, NewEgg, Steam, Microsoft, and many others also joined the fray), this specific case highlights Bitcoin’s role as an uncensorable, cross-border, and efficient method of payment, which is exactly what Satoshi envisioned in his original paper.

The Lull And Subsequent Boom

Likely due to the aforementioned Mt.Gox and Silk Road debacles and/or classic market cycles, the crypto industry quieted down in 2015 and 2016, with BTC undergoing a relative lull, with prices often resembling traditional equity markets at some point during that two year period.

However, while volatility declined and speculative interest exited the market, the industry’s fundamentals continued to boom, with Bitcoin and other crypto assets gaining recognition as a form of online payment, while also seeing positive regulatory news rush in en-masse.

In March 2016, solidifying the legitimacy of cryptocurrencies, Japan’s Cabinet formally recognized virtual currencies as something similar to physical money, pushing the nation forward in its acceptance of cryptocurrency and blockchain technology. Following this regulatory win, other nations followed suit, but like Bitcoin’s most infant years, Japan remained a home of innovation for this promising technology.

Eventually, 2017 rolled around, and as you likely remember, it was quite a year to behold, especially in the context of the crypto market and Bitcoin specifically. Throughout 2017, Bitcoin and crypto assets garnered a colossal amount of consumer traction, with “Bitcoin” becoming one of Google’s most searched terms, if not the most searched term on the America-based web search giant. In 2017, discussion regarding alternative vehicles for Bitcoin investment began, resulting in plans to launch ETFs, futures contracts, and similar products that were all centered around crypto assets. While the Winklevoss Twins’ ETF application fell through, in late-2017, as BTC neared its peak at $20,000, the U.S. Commodities Futures Trading Commission (CFTC) gave the CME and CBOE Global Markets the green light to launch a cash-settled Bitcoin futures contract, which sparked claims that institutions were poised to come rushing into this market.

However, since then, the value of crypto assets have seen a sharp sell-off, as many have claimed that this market reached a point where it was well over-bought. Due to crypto’s most recent collapse, per 99Bitcoins’ “Bitcoin Obituaries” page, industry onlookers have claimed that this nascent innovation has died upwards of 315 times, likely due to a multitude of qualms. But now, as seen by the monumental rise of interest from retail, merchant, and institutional participants, this industry isn’t ready to go kaput… far from in fact. But more on that in the next edition of “Bitcoin Turns Ten”.

Part 2 tomorrow: Bitcoin Turns Ten: Today And What's Next?
Featured Image from Shutterstock

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Binance Boss Talks Crypto and Blockchain at Forbes Global CEO Conference

The Forbes Global CEO Conference has just started in Bangkok, Thailand, and participants have already entered various discussions. As always, the aim is to solve, but also present, various problems, and share their views of where the world of technology, business, and entrepreneurship is going next. One of the 400 attendants was Changpeng Zhao, the CEO of cryptocurrency exchange called Binance.

Forbes Global CEO Conference is an annual event that invites numerous attendants from all corners of the world. Currently present are entrepreneurs, CEOs, tycoons, investors, up-and-comers, and many others. The goal of the event is to discuss some of the largest issues that might affect the entire world, as well as to share ideas, and maybe even start off new partnerships.

Considering that participants and attendants of this event are considered some of the brightest forward-thinking business leaders in the world, many are interested in what they have to say.

Crypto and Blockchain at Forbes CEO Conference

As expected, cryptocurrencies and blockchain technology were mentioned quite frequently in discussions so far. This is the hottest technology right now, and 2018 has been very exciting for this industry. Investors were kept at the edge of their seat due to constant bear market, with only a hint of recovery every now and again.

Arguably the biggest representative of this technology during 2018’s Forbes Global CEO Conference is Binance’s own Zhao Changpeng. He started off by saying that Binance, which is among the largest crypto exchanges in the world, only started off in July 2017. That is barely 16 months ago, and already, it is known and used by traders from all around the world.

This was how the boss of Binance explained the speed of events in the crypto world. Furthermore, to show how the nature of business has changed due to crypto and blockchain technologies, he said that Binance has no office, nor does it have a bank account. Even so, it serves thousands of users from 180 different countries on a daily basis.

He also attempted to explain that, while crypto and blockchain are still new technologies, they are not difficult to understand. He compared this technology to cars, stating that a person doesn’t have to know how the engine works in order to use a vehicle. In a way, while this is quite complex technology, the difficult part is happening underneath the surface. As for users alone, they do not have to be especially tech-savvy to use this technology.

While cryptocurrencies have grown quite popular during the last year, there are still a lot of people that stand against them. One of them is Bearing Private Equity Asia’s chief executive, Jean Eric Salata. According to Salata, Bitcoin is nothing but a Ponzi scheme and a fraud. Simply put, Salata doesn’t believe that cryptos, Bitcoin especially, have no uses for anyone who is not a criminal.

A stance like that proves that cryptocurrencies still have a long way to go before they enter the mainstream. While many are very supportive of this technology, there are also a lot of people who are not prepared to trust them.

 

Image from Twitter

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No, Bitcoin is Not Going to Melt the Planet

 

As Bitcoin adoption increases, a new study published Monday by Nature Climate Change warns that energy-demanding Bitcoin transactions would easily sling the global temperature past the 2-degree threshold set under the Paris Climate Agreement. But, is it true that Bitcoin is this energy inefficient that the mainstream media portrays?

While Bitcoin’s precipitous rise has been stunning, many are still ignorant of the Bitcoin phenomenon saying it is still too arduous, complex and even too libertarian. Add this to the border-less and global nature of Bitcoin, and we quickly have a regulatory concern that different governments are not willing to take a risk on. Initially, the very objective of Bitcoin was to create a better alternative to fiat and even if adoption is still low, that objective is still in line. And encouragingly, governments are beginning to embrace blockchain formulating new laws that classify Bitcoin as commodities, subject to taxation.

The Bitcoin Mining Energy Debate

But even in the face of increasing adoption, scientists are raising the alarm. Complementing this are trackers such as the Bitcoin Energy Consumption Index relaying estimates on the prodigious amount of energy required and raising awareness of “how unsustainable proof of work systems is”. The creators of these trackers go on to say it is not the amount of energy that the network uses but the realization that most of these mining rigs are powered by coal-fired generators from China.

BECI

Bitcoin Energy Consumption Statistics

 

According to BECI, each transaction requires 812 KWH translating to an annual demand of 73.12 TWH. This is around 404.89 KG of Carbon-dioxide per transaction that is pumped to the atmosphere edging the global temperature closer to the 2-percent threshold.

Researchers said greenhouse emissions from Bitcoin mining rigs was around 69 million metric tons in 2017. However, that was not enough to propel Bitcoin to the mainstream as it contributed a mere 0.033 percent of the world’s cashless transactions.

At this rate, scientists from the University of Hawaii at Manoa said it was enough to push global temperatures above pre-industrial levels assuming the same energy sources, which is mainly coal, were used.

Bitcoin Miners are Green Energy Promoters

Regardless, Bitcoin maximalists are desirous and working towards an ecosystem that is crypto powered insisting that it is better and will slowly eat up the $8.7 trillion of political money called fiat.

Supporters, such as Eric Masanet of the Northwestern University, insist that the recent study is “fundamentally flawed” laying out fact that the global energy is actually de-carbonizing and more efficient rigs are in the pipeline. Besides, he adds that it is hard to predict rates of adoption, future efficiencies and sources of energy of which the study bases its conclusion on.

Furthermore, making the basis of this study shallow, is the is the assumption that Bitcoin would in the future act as a medium of exchange. Though novel and ideal, it is likely that Bitcoin will end up as an investment vehicle acting as a store of value.

Additionally, since Bitcoin is a global phenomenon, environmentalists shift away from the energy intensity drum beating to the realization that while Bitcoin mining is concentrated in China, there are other geographies like Iceland that make use of 100 percent renewables like geothermal and wind energy.

According to Katrina Kelly-Pitou, Strategy Manager at the University of Pittsburgh’s Center for Energy, energy production can increase without negatively impacting the environment. She adds that even if Bitcoin market cap is to increase hundred-folds, it would still be more energy efficient than traditional banking systems.

“Even if Bitcoin technology were to mature by more than 100 times its current market size, it would still equal only 2 percent of all energy consumption.”

Bitcoin and Blockchain Here to Stay

It’s increasingly becoming clear that Bitcoin is here to stay. Needless to say, Bitcoin is ingenious and potentially transformative, but at the same turn adopters cannot turn a blind eye to the negative effect of Bitcoin’s energy requirements. Considering that there is a direct relationship between adoption and energy demands, blockchain promoters and enthusiasts are always on the innovation front researching and implementing new energy efficient technologies.

After all, it is the miner’s responsibility to stay profitable even as energy requirements and fossil fuel prices sky rocket. In fact, the need of efficiency is so strong transportation costs are incurred as miners migrate from time to time to new jurisdictions with more favorable energy rates. This is why the miners are charting new territories, advocating for the need of green energy sources, and are not the axis of evil as the study implies.

Image from Shutterstock

 

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UK Financial Watchdog Mulls Ban on High Risk Crypto Derivatives

The Financial Conduct Authority (FCA) is eyeing a potential ban on the sale of cryptocurrency derivatives, the Financial Times reported.

The UK financial watchdog said that it would begin discussions in the first quarter of the next year on whether it would go ahead with the proposed ban on crypto-based difference, futures, and options. The agency affirmed that it still believes cryptocurrencies have no intrinsic value and investors should be prepared to lose a lot of money if they venture into this unregulated territory. It also repeated global concerns about the amount of manipulation and frauds that could take place in the crypto market, adding that it could give criminals a ready-made platform for laundering money.

“A combination of market immaturity, illiquidity and a lack of available information regarding the market give rise to concerns about market integrity,” the FCA reasoned. “This may damage confidence and prevent both the cryptoasset market and related derivative markets from operating effectively.”

“The risk of trading losses can be exacerbated by product fees such as financing costs and spreads, as well as by a lack of transparency in the price formation of the underlying cryptoasset,” the regulator mentioned at at a time when successful financial firms in the UK, including Plus500 and IG Group, are showing higher revenues from crypto-derivate trading.

Financial Stability under Threat

The FCA published its statements alongside a report prepared by the Cryptoasset Taskforce, a team comprising of representatives from the FCA, the Bank of England, and the UK Treasury. The long-awaited report made to the wire six-months after its announcement in April this year, and now stands published with its opinion on the crypto regulations in general.

The report mentioned cryptocurrencies like Bitcoin as a “threat to financial stability,” stating the crypto-derivatives are even riskier than the real assets, for they could cause investor losses that go beyond the original investment itself.

In March 2018, the UK Financial Policy Committee (FPC) had found that crypto assets had no impact on the global financial stability due to its limited use.

“The FPC’s analysis focused on the ‘transmission channels’ which could transmit risks from the cryptoasset market into the formal financial system,” the report clarified. “The FPC determined that, in the case of current crypto assets, these transmission channels were not significant at this point in time but that, in certain circumstances, they could become more significant over time and therefore produce risks to financial stability.”

Cryptocurrency Regulation in the UK

The FCA has specified that its constitutional authority is only applicable to financial instruments. That allows the regulator to oversee those crypto-assets that have “comparable features to specified investments”. For others kind of crypto assets, it might need to extend its regulatory oversight.

In the same line, the FCA said it would begin the framework for regulating cryptocurrencies like Bitcoin, as well as trading and wallet companies in the space, next year.

“Given the complexity and new challenges presented to traditional forms of financial regulation, more time is needed to consider how regulation can meaningfully address the risks posed by exchange tokens, such as bitcoin,” the UK regulator said.

 

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Have All ICOs Sold Out? A Look At The Altcoin Survivors

The initial coin offering frenzy took over a young and inexperienced crypto market in 2017. People were putting in a large amount of money in projects that had no legal, banking or regulatory approvals. Releasing a mere whitepaper and a website could ensure entrepreneurs easy access to capital. But whether they would release their product – or not – remained a different mystery altogether.

Big Bucks for Blockchain Startups

Since the ICO boom, Forbes reported, over 800 blockchain projects have raised around $20 billion via the sale of their bitcoin-like own tokens. But how much of this money has survived or have been put to use has little-to-no evidence. MobileGo, for instance, raised a whopping $53 million in tokenized crowdfunding to build a video betting and e-sport platform. The project has reportedly removed the cryptocurrency aspects from its nucleus altogether. And the project founders, Sergey and Maxim Sholom, have not conducted any independent audit yet to show where the $53 million has gone.

Losses incurred from the projects like MobileGo somewhat equal many small ICO projects that have abandoned their development plans. According to Deadcoins, a website that indexes non-functional coins, there are over 1,000 ICOs that have already bitten the dust. Though not all the projects were failures. Many among the listed projects, including Enigma and CoinDash, reported hacks, while others like Onecoin or Paycoin were outright scams.

But, there are still a few ICOs that have survived the day and are developing their blockchain projects actively. Moreover, the return on investments out of these projects have outperformed expectations, validating that not all is bad in the world of cryptos and ICOs.

The NXT project came before the ICO boom. Launched in 2013 by an anonymous developer, the blockchain project held the sale of its NXT tokens in September 2013 to develop a proof-of-stake consensus mechanism. It managed to raise about $16,800 worth of Bitcoin at a per NXT value of $0.0000168. The NXT/USD rate at the time of this writing is $0.064521, according to CoinMarketCap.com. That marks a 383953.58 percent return off each NXT token.

NXT also stuck to its path to developing a blockchain-as-a-service (BaaS) platform, eventually building an active community of developers. In light to the recent developments in the public ledger space, NXT has the potential to deliver, which can be confirmed by its sustainability in the market.

The project that kick-started the ICO frenzy in the first place, Ethereum started a new wave of decentralized applications and smart contract developments on the top its open-source distributed ledger platform. The project had its ICO round in mid-2o14, in which it raised $16 millions after selling 11.9 million Ether tokens at a price of $0.311 per unit. At press time, the same token costs around $200. That is 64,209 percent more than the initial value.

Many other ICO projects that survived the FUD with active development and impeccable accountability include NEO, a digital asset ownership platform originally known as Antshares, Spectrecoin, a privacy-centric digital currency network, and Stratis, an enterprise-grade BaaS platform. Ark, Stroj, Lisk, EOS, and the list continues.

The key takeaway is that the projects that vastly focus on offering BaaS, privacy, and decentralization fared better. The ICO industry, as a whole, is surviving with the survival of good projects.

 

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