Boxmining v2

Author: benson

  • What is Ripple and XRP

    What is Ripple and XRP

    Ripple – Ripple Transaction Protocol is a real-time settlement system designed to be used by banks for currency exchange, remittance and gross settlement. The idea is to replace age old systems like SWIFT –  which was developed in 1972 and used by most banks today. The Ripple protocol offers significant advantages in both speed of transfer and transfer tracking. Ripple uses distributed ledger technology, similar to Bitcoin. When compared with Bitcoin, it is faster and cheaper to send on the ripple network. However, there is one significant trade-off which is its lack of decentralization. The Ripple network is closed off and cannot be joined by any user – meaning there is a significant amount of centralization.

    xCurrent Settlement between banks


    XRP – The cryptocurrency XRP is commonly confused with the Ripple Protocol (also named Ripple) issued Ripple Labs. The XRP is an issued token that uses the Ripple network – it can be sent extremely quickly and with low fees. However, it should be noted that the XRP is not required for the network to work nor is it required for banks to use it if they choose to adopt Ripple. In fact, the xCurrent communication between banks do not use XRP.

    Ripple Logo

    Ripple Currency (XRP) vs the Ripple Protocol

    So lets start off with one confusing factors. So I must make a distinction between Ripple the transaction protocol (which is used between banks and other businesses) and the ripple issued currency, XRP. When you see Ripple making gains its actually the XRP, the currency that is issued by Ripple. And this is actually quite different from the network protocol or Ripple protocol. Both share the same name and I’m sure this has definitely confused a lot of investors.

    https://youtu.be/Y1GshH0F9Ic

    Ripple Protocol

    So lets start off with the transaction network known as Ripple. So the Ripple protocol is based on technology that’s similar to blockchain but not completely the same. It doesn’t require any mining and its based on a consensus network instead of being consumer-facing which is what Bitcoin is. Basically, it’s for the everyday person.

    Ripple is exclusively used by big institutions such as banks. The whole idea of Ripple is to allow banks to transfer any sort of asset, be it currency, USD, Euro, gold, or any other asset such as airmiles. You can transfer that between other institutions near instantaneously. This rivals systems such as swift. So if you ever bought Bitcoin with bank transfer you will know how painful that is. You have to contact your bank and send the transaction to a swift bank code account and this might take up to two to three days and theres a lot of transaction fees involved for both the sender and the receiver. Ripple is set to revolutionise this by providing near instantaneous, sub-second transactions for institutions such as banks. It’s already been adopted by quite a few big banks and

    XRP – Currency of the Ripple Network (xRapid)

    So now that I explained what is the Ripple transaction protocol, let’s move on to Ripple XRP. XRP is actually issued by Ripple Labs and is a form of cryptocurrency that can be traded and it’s not “mined”. So there is a finite number of ripples and that amount is actually issued by the company behind Ripple called Ripple Labs. 

    XRP by itself has no underlying related assets or values eg. Its not tied to USD or gold. Rather, it can be used to act as an intermediate currency in institutions. It has one huge advantage in that transaction costs are very, very low (unlike Bitcoin, which is now reaching 1.5 usd in transaction fees).

    xCurrent doesn’t use XRP

    Ripple Labs have developed two different technologies aimed at solving the transfer of value between nations. Xcurrent is an enterprise technology aimed at banks that allow instantaneous transfer of value. This technology does not use the XRP currency, rather it is ledger for value transfer in the currency of the bank’s choosing. 

    Is the XRP Centralized

    XRP transactions can be confirmed very quickly because of the small number of validator nodes on the network. The XRP network is not open consensus, so only a small number of validators (~30 validators) need to communicate a transaction before it is considered “confirmed”. Proponents of XRP praise it for sub 1 second confirmation times whilst opponents point to the centralized architecture and lack of censorship-resistance. XRP transactions can be reversed and accounts can be frozen – similar to how traditional bank accounts my be frozen.

    Concerns about Ripple

    So moving on, XRP is currently only issued out at less than 40% of its total. The remaining amount (minus the 20% retained by the creators of Ripple) is held by Ripple Labs to distribute whenever and however they so wish. This is actually kind of interesting because unlike a lot of decentralized currencies, Ripple Labs plays a huge part in distributing XRP. Ripple Labs is actually a company and this is very different from Bitcoin, where Bitcoin is fully decentralized and doesn’t have a central controlling authority. Ripple Labs is registered in many countries and it could be sued and held under police custody. This is again very different from other technologies.

    So that’s a little information regarding the Ripple protocol and XRP. I’m sure this may be a little bit confusing for some people and since the technology and the currency share the same name it could be misunderstood. I hope this clarifies a little for you about what Ripple protocol is and what XRP is.

    You can buy Ripple (XRP) on Binance – https://www.binance.com/

  • Tether to issue RMB stable coin “CNHT”? This might challenge the People’s Bank of China

    Tether to issue RMB stable coin “CNHT”? This might challenge the People’s Bank of China

    Tether is rumored to create a new stable coin “$CNHT” based on the Chinese National Currency, the RMB using offshore accounts. Tether is the creator behind the infamous stablecoin $USDT, which is used on many cryptocurrency exchanges. This could potentially be Tether’s way of beating the People’s Bank of China to issue the first digital version of the RMB. This news was immediately met with mixed reactions. On one hand, it might help with the adoption of cryptocurrencies by allowing for an easier on-ramp to crypto for Chinese. However, this might also been seen as a move to challenge the People’s Bank of China, which is known to have disastrous consequences.

    This news has been “leaked” by DGroup founder Dong Zhao, who is a known investor in Bitfinex and Tether.

    Challenging the People’s Bank of China?

    China maintains a “closed” capital account, meaning companies, banks, and individuals can’t move money in or out of the country except in accordance with strict rules.

    International Trade Administration 

    State owned People’s Bank of China (PBoC) has always had a tight group on the RMB. RMB transfers out of China are tightly regulated and have to go through government approval before it is sent. If Tether creates a digital version of the RMB, users can freely send the currency in and out of the country on the blockchain – without government oversight. Netizens were quick to point this out, as shown by the following reactions on Chainnode:

    Break things first?

    Tether has always had a reputation of breaking things first, then figuring out the legal ramifications. Tether and Bitfinex are currently under investigation by the NY attorney General. It is not too difficult for Tether to secure secret offshore bank accounts to hold RMB, then issue the tokens on the blockchain. The technology is already there from USDT – the issue is if they can keep the bank accounts from been frozen by authorities. Funnily enough, members of the chinese crypto communities have called for a boycott of $CNHT

    Chinese Currency Control Information:

    https://www.export.gov/article?id=China-Foreign-Exchange-Controls
    https://www.safe.gov.cn/en/
    https://www.scmp.com/business/banking-finance/article/3008795/chinese-banks-quietly-lower-daily-limit-foreign-currency

  • Demise of Bitmain? What does it mean for Bitcoin Cash and Litecoin?

    Demise of Bitmain? What does it mean for Bitcoin Cash and Litecoin?

    Recently reports have surfaced regarding trouble at Bitmain – with entire research divisions cut and rumors that CEO Jihan Wu will step down. The reason why this is important for the entire crypto field is for 2 reasons:

    • Bitmain has a huge effect on the price of Bitcoin Cash and Litecoin – with holdings of up to $600M USD in Bitcoin Cash alone.
    • Future of Mining – Bitmain the largest producer of mining equipment (ASICs)
    Bitmain and CEO Jihan Wu

    Currently, Bitmain is trying to issue an IPO and raise additional funds. For many, a successful Bitmain IPO will mean good news for Bitcoin Cash, whilst a failed IPO would mean disaster. In this article, we will examine what is known about Bitmain.

    Bitmain Holds 1 Million Bitcoin Cash (5% of supply)

    Bitmain is responsible for mining and holding a significant amount of Bitcoin, Bitcoin Cash, Litecoin and DASH. It is difficult to track directly on the blockchain how much they own as they control newly minted coins. There is a leaked chart of Bitmain cryptocurrency holdings from the IPO filing in Q1 of 2018:

    Leaked Chart of Bitmain Holdings of Bitcoin Cash, Litecoin, Dash and Ethereum (Q1 2018)

    From what we can see from the chart, Bitmain was has been increasing their supply of Bitcoin Cash from 841,000 BCC (BCH) to 1,021,315 BCC over a 3 month period.

    Mining Slowdown

    Miners throw away old mining equipment as they are no longer profitable

    Bitmain’s trouble stems from the fact sales for their ASICs have significantly fallen. This is because their customers, cryptocurrency miners are not making a profit in 2018 due to low profits. Mining companies such as Gigawatt have even filed for bankruptcy. Without a strong demand for ASICs, Bitmain will struggle to main sales and generate revenue. Competitors such as GMO has announced they will exit the cryptocurrency mining business altogether.

    Hong Kong Exchange hesitant to approve Bitmain IPO

    • Hong Kong Exchange (HKX)

    Hong Kong’s Exchange (HKX) has been hesitant to approve Bitmain’s Initial Public Offering (IPO), casting fear into the future of the company. In order to successfully apply, Bitmain has to justify that they have “sustainable models“.

    Bitmain has 6 months to gain regulatory approval from the HKEX and the Securities and Futures Commission (SFC) before the application is considered lapsed. Once the application has lapsed, the application decision needs to be appealed for Bitmain to have any chance of having an IPO. Bitmain’s competitor, Canaan mining’s application for an IPO has already lapsed.

    Trouble for Bitcoin Cash?

    With Bitmain in hot waters, Bitcoin Cash holders worry that this is bad news for their future. Bitmain has been the biggest vocal supporter and cryptocurrency buyer for Bitcoin Cash. With holdings of 1 Million Bitcoin cash, the own around 5% of the total supply. Bitmain also funds Bitcoin Cash development – and this is under jeopardy as there rumors that this research funding will be cut.

  • Crypto Startups are going bankrupt – where do we go from here?

    Crypto Startups are going bankrupt – where do we go from here?

    As we tread deeper into the crypto winter, we begin to see the bodies of those who didn’t prepare well. With Ethereum plummeting over 95% from its all-time high, projects left holding Ethereum are left high and dry. 
    Research has shown that a significant portion of projects keep their funds in crypto, for example, Golem holds 369,023 ETH (valued at $33 Million)

    (Crypto) Winter is here

    Source: http://www.dailycal.org/2017/07/11/winter-cant-wait/

    We are starting to see layoffs at various crypto startups, including those behind top currencies such as Steemit and Ethereum. Many of these companies were not prepared for cryptocurrencies to take such an intense price nosedive.

    Here are 5 companies who have announced layoffs/ scale backs. 

    1. Consensys – 13% Staff laid off

    Consensys, the company backing Ethereum is reducing its workforce by 13%. This New York based company is one of the largest companies in crypto works on real-world solutions using Ethereum. Currently the restructuring is seen as the birth of “Consensys 2.0″, a brand new direction for the company. Whilst this might be the case, one ex-employee took to reddit to voice his grievances in an AMA. 

    2. ETCDEV – complete shutdown

    ETCDEV, the leading Ethereum Classic development company stopped all development and shut down completely. Its founder and tech-lead Igor Artamonov stated in a tweet that ETCDEV can no longer keep afloat. Whilst this is a strong blow to the Ethereum Classic (ETC) community, the price of ETC has not plummeted to zero – there are other development teams at work on this decentralized project

    3. Steemit Inc – 70% of Staff

    Steemit Incorporated, laid of 70% of their workforce citing the price of STEEM going below the “worst case scenario“. This restructuring also resulted in a significant cut in the company’s scope – their social media arm being cut completely. Steemit Inc will now focus primarily on the development of the STEEM blockchain rather than its social media website steemit.com. 

    4. DASH – Defensive Measures

    DASH Core Group (DCG) issued a pre-emptive notice that they will not make any drastic cut backs. However, the group has made cuts to stipends and ad hoc contributors who work on non-essential features. DCG has been under fire over the past year for having a high burn rate of 240,000 USD per month (allocated from by masternode voting). 

    5. Bitmain – Axed a research and development centre

    Bitmain, the mining equipment manufacturer cut an entire research and development division in Israel with 23 staff. Named BitmainTech, the Israeli division was established in 2016 to work on blockchain technology and artificial intelligence. 

    A Fresh New Start?

    One recurring theme with this wave of “restructuring” that it marks a new beginning. In many ways, crypto startups, especially those who raised through initial coin offerings were living a fantasy.

    During the bull market, the funny (but true) running joke was that if a project mentioned “blockchain” a venture capitalist would come out of the bushes and throw money at it. 

    Unfortunately, it is clear that a lot of these companies had no experience in financial management, nor any clue how to generate revenue to sustain long term operations. Whilst it might seem news of layoffs is a signal for doom and gloom in the blockchain space, I consider it a necessary step for the future.

    Let’s face it, we don’t live in a fantasy world where the money comes easy and results don’t matter. Crypto startups need to think about how to generate profit in the long term and find a way to sustain their operations. 

  • Mysterious death of NEO investor Zhang Shoucheng sparks fear of foul play

    Mysterious death of NEO investor Zhang Shoucheng sparks fear of foul play

    The sudden death of Danhua Capital (DHVC) founder Prof. Zhang Shoucheng (Prof. Zhang) shocked the crypto investment space this week.

    Zhang passed away this week at the age of 55 in an apparent suicide. His family has come out to say that he had struggled with depression – “There is no police investigation, and the authorities have no suspicions about Professor Zhang’s death“. 

    Prof. Zhang is a key player in the cryptospace, with his fund DHVC investing in projects like Zilliqa, NEO, Aelf, Open Platform, and Ontology.

    Suspicious of foul-play

    Video speculating there is more to the story is now #13 trending on YouTube with over 120,000 views

    The Chinese crypto scene immediately suspected foul play and took to social media to voice their suspicions. Moreover, huge dips are common in the cryptospace, with Bitcoin having undergone more than 329 “deaths“. Many stated being a veteran investor, it is out of character for Zhang Shoucheng to take his own life. (Klonopin/)

    These rumors also express on various newspapers, including the South China Morning Post which drew a connection suspected this death may be tied to worsening conditions between US and China. 

    “Prof. Zhang was definitely killed by someone” top comment on YouTube

    Danhua Capital (DHVC)

    Danhua Capital (DHVC) invested in numerous investments in the crypto, with some believing that have invested up to 70% of projects in the fintech and blockchain space. DHVC has invested in projects such as Tron, Zilliqa, NEO, Aelf, Open Platform, and Ontology.

    Angry investors?

    Accusations of foul play have been thrown around at numerous times, especially in Chinese social media. This is in light of the recent crash in cryptomarkets, with many cryptocurrencies dropping up to 95% in value. Some investors have not taken this lightly, as shown by the assault on OKex officers in Beijing. 

    Other Recent Posts

  • Cryptocurrency 101 – the Basics

    Cryptocurrency 101 – the Basics

    One way to describe cryptocurrency is that it is simply a digital cash system without a central entity. To realize digital cash you need a payment system with accounts, balances, and transactions. One major problem payment networks have to prevent is double spending: to prevent that one individual who spends the same amount twice. This is usually done by a central authority or body who keeps a record about the balances.

    In a decentralized system, there is no one person that is responsible for this. Every single part of the network has to fulfill this function. Every part needs to have a list with all transactions to check if future transactions are valid.

    Cryptocurrency and the blockchain

    Cryptocurrencies are also simply just limited entries in a database no one can change without fulfilling specific conditions. If you think about it, that can also be used to describe our current monetary system. Money in your bank account is basically entries in a database that can only be changed under specific conditions.

    Confirmation of transactions is a critical concept in cryptocurrencies. As long as something is unconfirmed, it leaves it open to forgery or falsification. When a transaction is recorded onto the blockchain, it can no longer be changed and it can’t be reversed.

    Peers in the network, or as they have come to be known, miners, can confirm transactions. They take transactions, stamp them as legit and spread them in the network. After a transaction is confirmed by a miner, every node has to add it to its database. It has become part of the blockchain.

    Cryptocurrency has derived its namesake from the strong cryptography process used to secure its consensus-keeping system. Cryptocurrencies are built on cryptography. They are not secured by people or by trust, but by math.

    Properties of Cryptocurrency

    Most cryptocurrencies share a common set of properties, but not all rules are set in stone. Some may focus more on privacy, while others boast faster transaction speeds of lower costs. Below are some of the more common characteristics you will find cryptocurrencies.

    • Transactions cannot be reversed – when your bitcoins are sent, there’s no getting them back, unless the recipient returns them to you. They’re gone forever. This makes it difficult to commit the kind of fraud that we often see with credit cards, in which people make a purchase and then contact the credit card company to make a chargeback, effectively reversing the transaction.
    • Decentralized – there is no central authority controlling it and that means goverments cant take it away from you.
    • Low cost – compared to bank transfers or international transfers, the fees are a lot lower.
    • Speedy – you can send money anywhere and it will arrive minutes later, as soon as the network processes the payment.
    • Secure and transparent – because all the transaction information is stored on the blockchain, people cannot trick or deceive you about what funds they have. Cryptocurrency funds are locked in a public key cryptography system. Only the owner of the private key can send cryptocurrency.
    • Pseudonymous – Neither transactions nor accounts are connected to real world identities.While it is usually possible to analyze the transaction flow, it is not necessarily possible to connect the real world identity of users with those addresses.
    • Store of value – Most cryptocurrencies have a limit to the supply of tokens that can be mined or created. Because of this controlled supply, there are no risks of inflation unlike fiat currencies where new money can suddenly be printed.
  • Blockchain Security: Hodlers Should Learn More About It

    Blockchain Security: Hodlers Should Learn More About It

    A Blockchain contains digitalized transaction “block” records where each block connects to a series of all the previous and future blocks. Although experts suggest that Blockchains are impenetrable, it does not elude the fact that hackers have found ways to paralyze impregnable walls. Therefore, security concerns continue to invade peoples mind. There exist various companies offering security services such as smart contract, penetration testing, and adequate knowledge regarding Blockchains. Many professionals advice interested parties to do thorough research and learn more about cryptocurrencies before joining the community. You can rely on the numerous training videos on YouTube or attend conferences. People and companies alike also need to understand Blockchain security from all angles.

    Security

    Individual curiosity is an integral part of understanding Blockchain security. You need a clear perception of who is in charge of your investment security and how third parties play their role. Note that, your CTO is not responsible for personal data protection. His/her area of expertise lies in scientific and technological issues within the organization like code and software development. Entrust your protection to a Chief Information Security Officer (CISO) because their task is to provide adequate data and technology security.

    Their services cost a fortune but if you cannot afford one, hire a consultant to evaluate your security measures. He/she will pay attention to various areas of interests such as two-factor authentication and cyber-security employee policies. For instance, most hackers illegally penetrate corporate systems via email, instant messages, or promotion/reward links. Their aim usually entails stealing sensitive information like credit card details, passwords, and usernames. In short, everybody who uses the internet to transact is vulnerable to hackers.

    Every transaction follows a specific set of agreement for security purposes. Cryptocurrencies adopt smart contracts to control digital currency transfer through blockchain technology. The computer program eliminates the need for third parties because it digitally facilitates and negotiates terms. It is also a significant security protocol whose transactions can be tracked and reversed. Hackers operate using smart strategies like targeting both the top management and employees as well.

    Therefore, you should not solely rely on corporate protection especially if your passwords, username, and cell phone numbers are connected to your account or assets. It is extremely risky to expose your data through various devices to multiple platforms. Programmers across the world have developed security management apps like Dashlane to secure your passwords and wallets. Another alternative solution includes adopting a comprehensive multifactor authentication using launch keys. You can also apply the most recent security key development like Titan to verify login details over Bluetooth.

    The bottom line is that if you are currently in the cryptocurrency business (individually or as an organization), you are a target and so are your employees. Create different passwords for every account and enhance the verification process. Most importantly, do not trust anyone with your information and that includes private keys, passwords, username, etc. Blockchain agencies should consider training workers and extending useful solutions to hacking issues. The strategy strengthens not only personal security but also the entire corporation. Various costs are usually involved, and therefore, the relevant officers must create a budget to accommodate security changes.

    Regulations

    According to various sources, most people have yet to understand how cryptocurrencies work and their potential. Even after dominating the world news for a decade, over half the global population is unwilling to take risks. The industry is still young and expanding at best. Its high growth rate has triggered the need for regulations in various countries. Japan is among the first nations to legitimize cryptocurrencies followed by the United States. However, most governments issue notices about investing in the industry.

    The warnings pertain to risks involved especially since transacting organizations have no legal responsibilities to their clients. Some reports suggest that the electronic cash system creates a perfect atmosphere for terrorism and money laundering (due to anonymity). As such, several states have expanded laws on various criminal activities to include crypto markets. Others restrict crypto investments while nations like Nepal have banned all crypto activities altogether. In Qatar, citizens cannot operate locally, but they are at liberty to do so beyond the borders.

    Cryptocurrencies have also tapped into fundraising using Initial Coins Offering (ICO). However, most states regulate ICOs while others like China have completely banned them. Strict regulations have also discouraged people from investing, but most governments are working towards creating crypto-friendly regulatory systems that will attract investment and offer maximum protection to clients. Luxemburg and Cayman Island are among the nations that hardly view Blockchain technology as a threat. They aim to create their own cryptosystems including Venezuela and Marshall Island.

    Taxation, at its best, has yet to categorize cryptocurrencies and all its tax-worth activities. But different countries have adopted various references to regulate Blockchains by taxing them as assets, financial assets, foreign currency, income tax, etc. in the United Kingdom, crypto firms pay corporate tax, individuals pay capital gains tax, and unincorporated agencies pay income tax. The mining of cryptocurrencies is mostly affected by power taxation rules.

    The bottom line is that Blockchain security has unlimited options. Cryptocurrency companies can adopt smart contract auditing or hire consultants. (https://casadelninobilingual.com) More so, they should offer cybersecurity training to their staff and regulate internet access. Individuals, on the other hand, can maximize personal data protection through launch keys and two-factor authentication methods. Regulation-wise, governments are responsible in that, they can create crypto-friendly regulatory systems, impose the tax, or ban cryptocurrencies altogether.

  • US Congress Hearing “Examining the Cryptocurrencies and ICO Markets” – Summary

    US Congress Hearing “Examining the Cryptocurrencies and ICO Markets” – Summary

    Summary of the Subcommittee on Capital Markets, Securities, and Investment (Committee on Financial Services) Hearing: “Examining the Cryptocurrencies and ICO Markets” held on Wednesday, March 14, 2018 (10:00 AM)

    General summary of the hearing

    • The hearing was devoted to discussing cryptocurrencies, initial coin offerings (ICOs), and whether the current regulatory framework adequately protects investors.
    • Drawing from a mix of academic and industry witnesses, the hearing highlighted the divergent viewpointson the technology held by some of the members of Congress.
    • Ultimately, many subcommittee members expressed a commitment to strike a balance between oversight and the accommodationof technological innovation.

    Closing statement by the subcommittee chair, Rep. Bill Huizenga (R-MI)

    “I believe this is probably hello, not goodbye.”

    Positive viewpoint

    • Rep. Tom Emmer (R-MN)
    • a member of the cryptocurrency-friendly Congressional Blockchain Caucus
    • criticized politicians for calling for new regulations without taking the time to research and develop an adequate understanding of the technology

    “I hear elected officials who don’t have any concept of what we’re dealing with here and how exciting it is talking about, ‘Oh my gosh, we’ve got to run in and regulate and create more government infrastructure,’” commented Emmer, adding that although there needs to be modest cryptocurrency regulation, the access to capital that ICOs provide “is something Democrats and Republicans should celebrate.”

    • Some twitterers granted him the title of new “cryptodaddy”

    Negative viewpoint

    • Rep. Brad Sherman (D-CA)
    • His biggest contributors are in finance and securities
    • Used all the old and regurgitated arguments to bash crypto, really didn’t offer anything new
    • Called cryptocurrencies a “crock” and expressed doubt that they can be used to accomplish any social good that cannot be achieved otherwise

    “Perhaps we’ll have another hearing after a major terrorist event” is financed using cryptocurrency,” he quipped, adding elsewhere that cryptocurrencies are only “popular with guys who want to sit in their pajamas and tell their wives they’re going to be millionaires.”

    • Lots of backlash on twitter

    Other views

    • Rep. Ted Budd (R-NC)
    • Applauded ICOs and other blockchain-related fintech advancements
    • Cautioned that the wrong regulations could threaten the US’ status as fintech leader

    “Regulation in this space is something that the U.S. has to get right, because poor or rushed policy in cryptocurrencies really threatens our reputation in finance and technology,”

     

    • Rep. Carolyn Maloney (D-NY)
    • the ranking Democrat on the subcommittee
    • working on a cryptocurrency oversight bill that would cover exchanges that offer trading services for digital assets

     

    • Rep. Bill Huizenga (R-MI)
    • chairman of the Capital Markets, Securities and Investment subcommittee
    • declared his intention to pursue some kind of legislative action

    “This panel, this Congress is not going to sit by idly with a lack of protection for investors.”

     

    Coinbase view (local player in the industry):

    • Awesome technology with great potential
    • Can only realise this through responsible regulation
    • Lack of understanding, and thus, the lack of suitable regulations is harming the space
    • Because of this uncertainty, coinbase only operates with 4 cryptocurrencies: BTC, BCH, LTC and ETH
    • Coinbase, he said, determined that these digital assets qualify as a “virtual currencies”
    • the CFTC’s 2015 guidance that bitcoin and other virtual currencies are commodities,
    • a recent ruling that supported the CFTC’s classification of bitcoin as a commodity
    • the SEC’s July 2017 DAO report, which referred to Ether as a virtual currency.

    Mike Lempres, Chief Legal and Risk Officer at Coinbase wallet and cryptocurrency exchange, stated that the power of the digital currency’s technology can transform “capital formation, innovation and economy,” saying that its “tremendous potential” can be only achieved through “responsible regulation.”

    However, at the current stage, the US regulatory system “is harming healthy innovation” due to a lack of understanding of what should be allowed and what should be not, and how digital assets should be considered; either as securities, commodities, property, or money.

    For Lempres, the goal is to ensure that potential benefits from new technology are not harmed by uncertainty resulting from “regulatory or legal missteps.” Lempres provided a short review of the main US regulatory bodies such as the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the Internal Revenue Service (IRS), the Financial Crimes Enforcement Network (FinCEN), and Federal Trade Commission (FTC)

    According to Lempres, the SEC, which is in charge of securities transactions, considers crypto as securities, while the CFTC who fully controls commodity derivatives transactions, claims that tokens are commodities. FinCEN has full authority for Know Your Customer (KYC) and Anti-Money Laundering (AML) matters, and considers tokens to be money. Meanwhile, according to the IRS, the digital coins should be considered as property for tax treatment. According to Lempres, this constitutes an extreme “lack of coordination.”

    Answering a question from the Subcommittee chairman Rep. Bill Huizenga, Lempres stated that Coinbase cannot start supporting ICOs until the necessary regulations are adopted.

    “We do not support any [ICO] at the current time because we are not sure what the regulatory [treatment] is… We are waiting for the dust to settle between the CFTC and SEC before we electively engage on supporting ICOs.”

     

    * The information contained in this article is for education purpose only and not financial advice. Do your own research before making any investment decisions. (cashcofinancial)

     

    Resources

    Video of the hearing – https://www.youtube.com/watch?v=-CCqCsmCDdw

    Strong Words, Little Action: ICOs Draw Fire at US Congress Hearing

    Crypto Is a ‘Crock’? Twitter Reacts to House ICO Hearing

    At DC Hearing, Coinbase Calls Out Federal Regulators For ‘Harming Innovation’

    US Congress Debates ICOs, Cryptocurrency Regulation in House Subcommittee Hearing

    An analytical piece on how the hearing relates to and impacts ETH

  • Korean Exchange Ban “not finalized”

    Korean Exchange Ban “not finalized”

    The past few days have seen a lot of negative and even conflicting news coming out from mainstream media regarding crypto. First published by Reuters and picked up by various media outlets such as The New York Times, there were reports on Jan 10th that “South Korea’s Major Cryptocurrency Exchanges Raided by Police, Tax Authorities“. They alleged that cryptocurrency exchange operators were “raided” by police and tax authorities amid suspicions of tax evasion this week.

    After this was published, the values of most cryptocurrencies took a plunge. Bitcoin fell from just over $15k to a low of $13,105 in just a few hours. The market cap as a whole also dropped from over $800 billion to now around $700 billion.

    Reports were embellished

    Reports from inside South Korea however painted a different picture. They have said that the depiction of the events were not accurate and have been embellished by mainstream media outside the country.

    https://twitter.com/iamjosephyoung/status/951366424416567297

    FUD continues – clarifications from the government

    The bad news did not stop there. Reuters also published today that South Korea plans to ban cryptocurrency trading. The reports state that “Justice minister Park Sang-ki said the government was preparing a bill to ban trading of the virtual currency on domestic exchanges.”

    Because of the previous reports and the statements made by the Justice Minister, the government had to actually come out and clarify the issue. The Blue House, the executive office and official residence of the South Korean President, had to announce that there will be no cryptocurrency trading ban in the short-term.

    https://twitter.com/iamjosephyoung/status/951428854085689344

    Do your own due diligence

    As with everything, it is always best to exercise due diligence and do your own research. Even with reports from mainstream media, you never know if they have their own agenda and it is important that you don’t give into the fear and hype. (www.biolighttechnologies.com)

  • Ripple and XRP – Revolution or Scam?

    Ripple and XRP – Revolution or Scam?

    manafort.com) temp927.kinsta.cloud/what-is-ripple-and-xrp/”>Ripple has been booming lately as more and more financial institutions have started to use the service for its fast transactions and extremely low fees. As banks seek to move away from the somewhat outdated SWIFT system, the Ripple protocol and it’s token XRP has risen up as a viable alternative. Ripple is also a very controversial coin, with proponents talking about interest from banks and opponents worried about centralization and lack of real world adoption.

    Will there be a demand for Ripple and XRP

    Previously, there were concerns about the use of the token. In theory, it is possible to use the Ripple payment protocol without the XRP token and people were left to wonder about it’s worth. However, Ripple has recently tweeted that, “3 of the top 5 global money transfer companies plan to use XRP in payment flows in 2018”.

    Furthermore, the CEO of Ripple, Brad Garlinghouse, has also confirmed that banks and payment providers plan to use xRapid (the XRP liquidity product) in a serious way.

    Future outlook for Ripple – serious challenger to bitcoin or scam?

    Ripple, currently second in market capitalization, has been continuing on an upward trend. At press time, the altcoin was trading at an average of $3.36. With a market cap of over $131 billion, it is over half that of bitcoin.

    One thing to take note of though is the high supply of Ripple. Bitcoin will only ever have at most, 21 million coins in circulation. Ripple currently has over 38 billion XRP issued. If we set the supply of Ripple to 21 million, using its current market cap, each coin would be over $6,200. And looking at it that way might ward off potential investors.

    The success of Ripple and other altcoins have led to an all time low for bitcoin dominance at 33.3 percent. With this recent news, will we finally be seeing a challenger to bitcoin for the top of the crypto throne or is just another flash in pan? One thing for certain is that 2018 is sure to bring much more exciting news for crypto.

    https://www.youtube.com/watch?v=Y1GshH0F9Ic

    Ripple Total supply vs Circulating Supply

    The XRP token was created with a significant portion of it reserved for development of the coin. Unlike mining, these coins can be issued out by the owners  (either the founders of ripple or Ripple Labs).  This is a large difference between the circulating supply and the total supply as well, with almost 60% of XRP left to be distributed.

    If XRP had the same supply as Bitcoin the Price would be walloping $18,953!