Bitpay Announces Stablecoin Support for Merchant Settlement

Bitpay Announces Stablecoin Support for Merchant Settlement

On Monday the cryptocurrency payment processor Bitpay announced the company is now supporting settlement options using two stablecoins — the Gemini dollar and the Circle Centre coin. Not only can Bitpay merchants settle in BCH, BTC, and local fiat currencies, but they can also utilize a US dollar-equivalent digital currency.

Also read: BCH Devcon Streamlines Bitcoin Innovation in San Francisco

Bitpay Now Supports Settlement With Two Stablecoins — USDC and GUSD

Bitpay Announces Stablecoin Support for Merchant SettlementStablecoins have been a hot topic recently as a slew of new assets has joined the crypto-economy’s ranks. On Oct. 15 the Atlanta-based firm Bitpay announced the company will now support stablecoins for merchant settlement options. This means Bitpay merchants can choose to accept the Gemini dollar (GUSD) or Circle’s Centre coin (USDC) for settlement instead of settling in BCH, BTC, or local currencies.     

“Bitpay was founded to make payments faster, more secure, and less expensive using Bitcoin for organizations around the world,” explained Stephen Pair, co-founder and CEO of Bitpay during the announcement.

Bitpay Announces Stablecoin Support for Merchant Settlement
Bitpay merchants can now settle in USDC and GUSD.

Using Stablecoins Can Produces Faster Settlement Compared to Traditional Bank Transfers

Pair also adds that stablecoins give merchants more options and a new alternative to settling in BTC and BCH. The Bitpay founder also details that stablecoins give individuals and organizations the ability to transact more fluidly with a “non-volatile settlement solution that does not rely on traditional bank wires.”

“Customers can skip costly, complicated cross-border wire transfers and receive or send international payments with Bitpay with accuracy, reduced fraud risk and quick bank settlement,” the payment processing firm emphasized.

The company also believes that global areas such as South America, Africa, and the Asia Pacific region would benefit significantly from the use of stablecoins. Using Bitpay’s services, traditional fiat bank settlement is initiated the next business day and it can then entail another 24 hours until the final settlement. Stablecoins, BCH, and BTC settle in a much quicker fashion and US dollar-equivalent digital currency prices tend to be far less volatile than regular decentralized assets.

What do you think about Bitpay supporting GUSD and USDC for merchant settlement? Let us know what you think about this subject in the comment section below.


Images via Shutterstock, Pixabay, and Bitpay


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As Tether’s Peg Slips, Bitcoin Price Is Distorted Across Market

Tether peg slip

Tether’s peg is slipping, and an exchange-wide firesale has led to major price discrepancies between bitcoin’s BTC/USDT and BTC/USD trading pairs across the market.

In the early hours of October 15, 2018, Tether’s USDT was trading at $0.92, the lowest asking price the coin has seen in 18 months. At the time of writing, the stablecoin still hasn’t made up enough ground to retain its $1 peg. On most markets, it’s currently trading around $0.96, though this figure is tied to bitcoin trading pairs. Against the USD on Kraken and Bittrex, it is trading at $0.92 and $0.90, respectively.

A combination of exchange activity, related FUD and scuttlebutt could be the catalysts behind the sell-off. Bitfinex suspended fiat deposits on October 15, 2018, “for certain customer accounts in the face of processing complications,” a blog post reveals. In addition, Binance temporarily suspended USDT withdrawals for “wallet maintenance” due to “network congestion,” a measure taken after the exchange extinguished rumors that said it would soon delist tether.

The discount has bitcoin trading at something of a premium against tether on exchanges with USDT/BTC trading pairs. On Binance, Huobi and Bittrex, for example, 1 BTC is trading for nearly 6,700 USDT.

Contrast this with bitcoin’s price in USD/BTC markets and it becomes clear that tether’s sell-off is distorting prices across exchanges. On Coinbase Pro, Kraken and Gemini, bitcoin is trading at roughly $6,400 against USD pairs, an indication that bitcoin’s proper asking price is much lower than its oft-cited USDT pair would advertise. This has led to an inflated price averaged on CoinMarketCap of $6,650.

It’s important to note that the “premium” bitcoin is going for on tether-listed exchanges is less of a premium and more of a price distortion, given that tether is trading below its peg. The price of bitcoin for these pairs has spiked as a result of the sell-off, but if you sold USDT for BTC and then attempted to resell this BTC for USD, the arbitrage opportunity would be nullified by the price differential between BTC/USDT and BTC/USD pairs.

Notably, Bitfinex’s USD/BTC pair is out of line with other exchanges that offer fiat pairs for bitcoin. On Bitfinex, 1 BTC is trading at $6,900, a figure the even superseded its price against USDT on other popular exchanges. An inauspicious discrepancy in its own right, Bitfinex’s data may rouse additional skepticism when we take a look at its USDT/USD pair. At the time of writing, 1 USDT is trading at exactly $1.00 against its pegged asset in actual U.S. dollars, while, as we noted earlier, the same trading pair on Kraken and Bittrex is going for $0.92 and $0.90, respectively. Seeing as Tether and Bitfinex are under like management, the stark departure in price for USDT/USD markets between Bitfinex and other top exchanges could be cause for further concern.

This jumble of numbers and price differentials leaves more questions asked than answers, aggravating the uncertainty that likely led to the sell-off in the first. The price gap between bitcoin’s USD and USDT pairs puts tether’s risk premium at just under $500 (7.62 percent), according to Untether.space.

As the discrepancy in prices across exchanges illustrates, this risk premium denotes the difference between how much bitcoin is trading for in BTC/USDT versus BTC/USD pairs. Ultimately, the figure could indicate that market confidence in Tether is waning, as looming uncertainty over whether Tether has enough funds in the bank, amidst other banking troubles, has shaken investor trust in the market’s number one stablecoin, which accounts for 98 percent of all stablecoin trading volume.

Tether’s troubles comes after a slew of new stablecoins have proliferated in the market. Its two largest competitors, MakerDAO’s DAI and TrustToken’s TUSD, launched earlier this year, while regulation grade coins like Gemini’s GUSD, Paxos’ PAX and Circle’s USDC launched last month as well. In addition to these, the industry’s first algorithmic stablecoin, Kowala’s kUSD, is now in its mainnet’s alpha version, though the coin has yet to begin trading on the open market.


This article originally appeared on Bitcoin Magazine.

Coinbase Has Just Added ZRX, Its First ERC-20 Token

ZRX Coinbase

Making good on a promise it made back in March of this year, Coinbase has just added its first ERC-20 token. ZRX, the token of the 0x (pronounced “zero x”) protocol began trading on Coinbase Pro (formerly GDAX), the exchange’s professional trading platform, on October 11, 2018.  

"Once sufficient liquidity is established, trading will begin on the ZRX/USD, ZRX/EUR and ZRX/BTC order books. ZRX trading will be accessible for users in most jurisdictions, but will not initially be available for residents of the state of New York," Coinbase Pro general manager David Farmer wrote in a blog post spelling out the details of the launch.

Coinbase said trading of ZRX would happen slowly and in stages. “If at any point one of the new order books does not meet our assessment for a healthy and orderly market, we may keep the book in one state for a longer period of time, or suspend trading…” Farmer wrote. Per the exchange’s policy, new coin trades on Coinbase Pro first. The exchange said it would make a future announcement when ZRX began trading on coinbase.com and the Coinbase mobile apps.

Last year, the popular San Francisco exchange crafted a strict new asset listing policy after getting itself into hot water when a botched bitcoin cash (BCH) listing led to accusations of insider trading.  

A lot has changed for Coinbase since. At one point during the crypto bubble, the exchange boasted a user base of 13 million. Following December 2017, however, Bitcoin lost more than 60 percent of its value, a loss that has cut into Coinbase’s business. In fact, Bloomberg reports that the number of U.S. customers buying and selling on Coinbase has declined by 80 percent.

Amidst all of this, Coinbase has been working diligently to expand its offerings.

A year ago, the exchange carried only three coins: bitcoin (BTC), ethereum (ETH) and litecoin (LTC). That changed when it added support for bitcoin cash (BCH) in December of 2017. In March 2018, the exchange announced plans for a crypto index fund available only to accredited investors. And in June 2018, the same month it launched its index fund, Coinbase added a fifth digital asset: Ethereum Classic (ETC).

Efforts to add new coins continued from there. In July 2018, Coinbase announced it was exploring several new assets. One of those was ZRX (newly listed); the others were Cardano (ADA), basic attention token (BAT), Stellar Lumen (XLM) and Zcash (ZEC). And in September, the exchange announced “Coinbase Bundle,” a product for the average investor.

Last month, Coinbase even announced a new asset listing process by which anyone with a token can apply to have that token listed on the platform.

Most recently, Coinbase told The Block on October 12, 2018, it was shutting down its index fund aimed at wealthy investors, due to lack of interest.





This article originally appeared on Bitcoin Magazine.

Win $100 of Bitcoin Cash in Bitcoin.com’s Paper Wallet Design Contest

Bitcoin.com's Paper Wallet Design Contest — Win $100 in Bitcoin Cash

Over the next few weeks, Bitcoin.com is hosting a paper wallet design contest to create a beautiful cold storage visual graphic for bitcoin enthusiasts around the world. The competition is open to everyone and the winning entry will receive $100 worth of bitcoin cash.

Also Read: Bitcoin.com Store Adds More Hot New Items and Amazon Gift Cards

Create a Unique Bitcoin.com
Paper Wallet Design to Win Bitcoin Cash

Just recently, Bitcoin.com launched its newly revamped paper wallet generator, so bitcoin cash (BCH) supporters can utilize a classic cold storage solution and print out BCH for friends and family. Paper wallets are just like traditional bearer bond instruments (paper bills) and they can be exchanged anonymously offchain. The paper wallet generation process is very easy and people can print out as many as they want — they can even add funds to their wallets after creating them.

Bitcoin.com's Paper Wallet Design Contest — Win $100 in Bitcoin CashThe graphics team at Bitcoin.com has created a new paper wallet design that looks pretty sharp, but we thought it would also be cool to let BCH users submit their own artwork. Plus, contests are a great way to show community-driven spirit, as we know that BCH fans are particularly passionate.

Bitcoin.com's Paper Wallet Design Contest — Win $100 in Bitcoin Cash
Participate in the design competition by downloading paper wallet templates here.

Wanted: Passionate, Creative Bitcoiners

The winner will receive some BCH to spend, and their winning submission will also be displayed on our website, which gets millions of unique visitors every month. People will be able to use your custom design when they load up bitcoin cash on BCH bills for their friends this holiday season.

Bitcoin.com's Paper Wallet Design Contest — Win $100 in Bitcoin Cash
The winning entry will get $100 worth of BCH and their design will be displayed on Bitcoin.com.

Paper wallets are a convenient way to store BCH and a personalized design looks even better. You can submit up to three different designs prior to the deadline on Nov. 1, 2018. Bitcoin.com will select and notify the winner on Nov. 5, 2018. Participants don’t have to be Photoshop masters to enter the competition, as we’re looking for passionate enthusiasm. So if you want to win $100 worth of BCH and show your artwork to millions of people, then send in your designs as .png files to papercontest@bitcoin.com.

Visit this link for more information on the official contest rules. 

Have you tried Bitcoin.com’s paper wallet generator? Let us know what you think about our paper storage solution in the comment section below.


Images via Shutterstock, Bitcoin.com, and Pixabay.


Why not keep track of the price with one of Bitcoin.com’s widget services.

The post Win $100 of Bitcoin Cash in Bitcoin.com’s Paper Wallet Design Contest appeared first on Bitcoin News.

Japanese Internet Monolith GMO to Launch Yen-Pegged Stablecoin

GMO stablecoin

GMO Internet Group is working to launch a stablecoin by 2019. In an announcement released on Tuesday, October 9, 2018, the Japanese IT conglomerate said it is putting all gears in place to begin building its stablecoin, called the GMO Japanese Yen (GJY).

Banking on success on its home turf, GJY will look to penetrate the Asian market via Z.com once the fiscal year of 2019 is in full swing. GMO launched Z.com as a cryptocurrency exchange subsidiary in its relentless bid to penetrate the cryptocurrency industry.

The company made headlines in December of 2017 when it announced that it would open up a salary option that allowed employees to earn half of their pay in bitcoin.

The news signals the entry of another potential player in the yen-pegged stablecoin market, which already includes Hong Kong’s Grandshores Technology Group.

For a company that already has a foothold in the crypto exchange and mining business, launching a stablecoin, which offers price stability, would help it support “borderless cryptocurrency transactions.” Among efforts to expand its scope of operation, the company also partnered with Aozora Bank Group and others to launch a blockchain-powered online bank.

The web bank is expected to provide a portal that leverages blockchain technology for making cross-border settlements. GMO is also keen on bridging the gap of international remittances via its financial corporations in Japan.

“We have banks and trust licenses in Japan, so we will issue (GJY) in Asia, but we can store assets in Japan as well,” GMO founder and president Masatoshi Kumagai noted in the release.

Kumagai also believes the company is headed in the right direction to avoid the issues associated with tether. He went further to state:

“If that happens, everyone will not be worried like with tether; it can be said that GMO has a bank there and keeps fiat there.”

GMO joins a long list of companies to have issued stablecoins in recent months. Back in July, IBM revealed it had collaborated with Stronghold and the Stellar protocol on a U.S. dollar–pegged stablecoin. In the same vein, crypto exchange Gemini, blockchain startup Paxos and crypto payments firm Circle all announced their U.S dollar–anchored stablecoins earlier this year.


This article originally appeared on Bitcoin Magazine.

First Major Bitcoin Cash ICO Raises $30M in Record Time

First Major Bitcoin Cash ICO Raises $30M in Record Time

On Oct. 8, 2018, the blockchain firm and mining pool Viabtc finished the first high-value initial coin offering (ICO) using the Wormhole protocol and Bitcoin Cash chain. According to exchange data, the Viabtc Token ICO raised US$3,700 per second capturing a total of $30 million in 2.2 hours.

Also Read: Electron Cash Developer Reveals In-Wallet BCH Fundraiser Prototype

Viabtc Launches Token Sale and Distribution Phases

First Major Bitcoin Cash ICO Raises $30M in Record TimeThe firm Viabtc had recently launched a new token called the Viabtc Token (VIAT) using the Wormhole protocol. The company refers to viat as a value-added service and privilege token that can be used as “gas” or a method of value transfer. When viat was issued on the Wormhole network a fixed supply of 2 billion tokens was set by the developers. On Monday Viabtc raised $30 million during the first major ICO issued on top of the Bitcoin Cash blockchain. Then on Oct. 9, Coinex users who trade the viat token will receive an airdrop from the firm’s stash of CET tokens.

First Major Bitcoin Cash ICO Raises $30M in Record Time
According to the Coinex accelerator page, the Viabtc Token ICO sold 750M VIAT raising US$30M on Oct. 8, 2018.

Viat will be used for a process called ‘Duo mining’ which gives miners normal pool payouts but also an added payout of viat as well. The viat mining payouts will be released in four phases and will give miners extra incentives to join the pool. The mining pool says that users can invite friends to mine with Viabtc and with a referral link they can receive more payout rewards. Viat owners can also use the currency for discounts toward pool fees and “exclusive customer support.” The tokens will be able to purchase mining accessories, Viabtc souvenirs, and the company’s BTC transaction accelerator.

“[The] Viabtc Token can be used as ‘gas’ and value transfer tool,” explains the mining pool. “We will add more application and privileges to it so that its holders can participate in the planning of Viabtc operations, building and improving Viabtc ecosystem together with the Viabtc team.”

First Major Bitcoin Cash ICO Raises $30M in Record Time
The Viabtc Token can be found on a token-supporting block explorer.

Crypto-Companies Launching Incentive Tokens for Service Discounts Is Trending

Besides trading, viat will solely be used for Viabtc services only in order to bolster the firm within the blockchain industry. The Viabtc Token project is lead by the mining pool’s founder Haipo Yang, and the firm’s COO Huimin Ouyang. Viat will also be subject to a repurchasing plan and a burning process according to the viat ICO’s whitepaper.

“Viabtc will buy back and ‘burn’ viat with 20% of its quarterly revenue at the end of each quarter — This will reduce the total amount of viat steadily on a benign deflation model,” the whitepaper details.

Viabtc adds:   

The repurchase details will be announced timely and the ‘burning’ transactions are available for checking on the blockchain to ensure transparency.

Cryptocurrency companies who have created incentive-based tokens for certain services and privileges have done well over the last year. For instance, the trading platform Binance and it’s BNB token has managed to position itself at the top 14 highest market valuation out of 2,000+ digital currencies.

First Major Bitcoin Cash ICO Raises $30M in Record Time
VIAT is available for trade with the following trading pairs; USDT, BCH, CET, and BTC.

Viabtc’s exchange Coinex and its CET token also use these coins for incentives and CET is currently worth around $0.03. According to the trading platform’s data this Tuesday, viat is trading for $0.04 per coin and has over a million USDT in trade volume.

What do you think about the Viabtc Token (VIAT)? Do you think there will be more big ICOs using the Bitcoin Cash network? Let us know what you think in the comments section below.


Images via Shutterstock, Viabtc, and Coinex. 


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 Pulse, another original and free service from Bitcoin.com.

The post First Major Bitcoin Cash ICO Raises $30M in Record Time appeared first on Bitcoin News.

Bitfinex Challenges Insolvency Rumors, Provides Proof of Wallet Reserves

Bitfinex Solvency

Top-three cryptocurrency exchange Bitfinex is pushing back against claims that call its solvency into question.

The Hong Kong-based company released a blog post on October 7, 2017, that states, contrary to recent rumors, it is not insolvent. In its defense, the company provides links to its public wallet addresses, stating that hearsay in spite of these publicly verifiable records is “perhaps indicative of a targeted campaign based on nothing but fiction.”

“Bitfinex is not insolvent, and a constant stream of Medium articles claiming otherwise is not going to change this. As one of only a very few exchanges operating since 2013, with a small team and low operating costs, we do not entirely understand the arguments that purport to show us to be insolvent without providing any explanation about why.”

Over the weekend, a since-removed Medium post by user ProofofResearch warns readers to exit Bitfinex, alleging that complaints of restricted and frozen withdrawals expose its insolvency. The post goes on to air grievances shared on Reddit regarding these withdrawal issues, and the author accuses r/bitfinex moderators of censoring such posts.

“Both fiat and cryptocurrency withdrawals are functioning as normal. Verified Bitfinex users can freely withdraw Euros, Japanese Yen, Pounds Sterling and U.S. Dollars. Complications continue to exist for us in the domain of fiat transactions, as they do for most cryptocurrency-related organisations,” Bitfinex writes in its post.

To further quell community skepticism, Bitfinex offered block explorer links to its bitcoin, ether and eos cold wallet reserves. Not including fiat holdings, the exchange states that these wallets “represent a small fraction of Bitfinex cryptocurrency holdings.”

Collectively, the wallets hold just over $1.5 billion in assets. The majority of this fortune is accrued in the exchange’s bitcoin wallet, which holds 148,467 BTC worth roughly $989 million at current exchange rates. Its second largest holding, the exchange’s ether wallet contains 1,726,496 ETH (~$395 million), and its eos reserves weigh in at 35,374,975 ($209 million).

Wrestling Against Scrutiny

Bitfinex’s clarifying its financial position comes after news broke last week that one of its former banking partners is looking for a buyer, a development that ProofofResearch argues further points to Bitfinex’s own financial troubles.

Searching for a bailout of sorts, the Puerto Rican Noble Bank is “no longer profitable,” according to a source close to the matter who tipped the news to Bloomberg. With Noble Bank’s cryptocurrency partners reportedly jumping ship, Bitfinex has also severed its relationship with the financial firm, affirming in its blog post that “[stories] and allegations currently circulating mentioning an entity called Noble Bank have no impact on [its] operations, survivability, or solvency.”

Popular stablecoin Tether also terminated its relationship with the bank. Operated by a like CEO in Jan Ludovicus van der Velde, Tether’s and Bitfinex’s operations, purportedly, are intrinsically linked, and the two companies have been long entangled in a conspiracy that charges Tether is not fully backed by U.S. dollar reserves.

An academic report that points to Tether’s artificially inflating bitcoin’s price during the 2017 run-up has only stoked skepticism. Though, an earlier study provides evidence to the contrary, and Tether has produced an in-house attestation overseen by the Freeh Sporkin & Sullivan law firm to clear its name. However, this attestation is not an official audit, something that Tether states is impossible for a company in its position to attain, even as other stablecoin projects have suggested otherwise.








This article originally appeared on Bitcoin Magazine.

Binance to Make Listing Fees Transparent, Give Proceeds to Charity

Binance charity

Binance, the largest cryptocurrency exchange by trading volume, said that it will make new cryptocurrency listing fees transparent and donate 100 percent of those fees to charity.

The exchange made the announcement today, October 8, 2018, in a blog post where it stated that a listing fee would now be more appropriately called a “donation.”

Listing fees have been a pain point for cryptocurrency projects. Projects depend on getting their coins listed on exchanges for liquidity. News of getting listed on a major exchange can cause a coin to spike in value overnight. Yet, many projects have complained of exorbitant listing fees.  

In April 2018, Bloomberg reported that according to Autonomous Research some crypto trading platforms were charging $1 million to $3 million to list a token — 10 times more than what a traditional exchange, like Nasdaq, demands for securities.  

Binance, which now handles most of its operations out of Malta, has been a target of many of those complaints. In August 2018, Christopher Franko, co-founder of Expanse, a fork of Ethereum, tweeted that Binance wanted to charge 400 bitcoin ($2.5 million) to list a coin. Binance CEO Changpeng Zhao refuted the accusation. “We don't list shitcoins even if they pay 400 or 4,000 BTC,” he tweeted.

Now, according to Binance, cryptocurrency projects will be able to name their price. “Binance will not dictate a number, nor is there a minimum required listing fee,” the exchange said, adding that it won’t be swayed by larger bids either. “A large donation does not guarantee or in any way influence the outcome of our listing review process.”

Once the two parties reach an agreement, the exchange said it will disclose the fee via its charity arm Blockchain Charity Foundation. Binance launched the arm in Malta in July 2018 as a way to funnel some of its profits to philanthropic endeavors. The foundation is chaired by Helen Hai, a goodwill ambassador for the United Nations Industrial Development Organization.

“Hope others will follow,” CZ tweeted earlier today, alluding to the announcement.

Binance was originally founded in Hong Kong in 2017. Within six months, it was already touted as one of the biggest crypto exchanges in the space. Its growth is largely due to its ability to onboard new coins quickly. The exchange currently has 387 crypto-to-crypto trading pairs.



This article originally appeared on Bitcoin Magazine.

goTenna and Samourai Wallet’s New Mobile App Works Without Internet Access

goTenna Samourai

Brooklyn-based goTenna has launched TxTenna, a mobile app that allows users to send bitcoin without an internet connection. Built in partnership with Samourai Wallet, the mobile app will enable users to send bitcoin using a secure and private network free of censorship.

goTenna produces consumer-grade mesh networking devices which operate by allowing peers to connect directly to one another for the purpose of routing packets, sidestepping the need to rely on an ISP or cell tower.

“TxTenna demonstrates how decentralized mesh networking can both enhance the privacy and resiliency of Bitcoin transactions, and expand Bitcoin access to people living in areas without cell or wifi connectivity,” Rich Myers, DApps engineer at goTenna, said to Bitcoin Magazine.

Internet connections are not always reliable, and in some locations, they could be unavailable due to natural disasters. This is where the TxTenna app comes into play. The app will allow users to sync their smartphones with a goTenna mesh device, then toggle the settings to send and receive bitcoin. Mesh networks connect devices directly to one another, rather than going through a central point (Internet Service Provider).

“The reality is that local carriers or ISPs can associate subscribers with their transactions or censor Bitcoin transactions altogether. TxTenna provides an answer to these problems by decentralizing the critical transport layer, will enable truly decentralized bitcoin transactions,” said goTenna CEO Daniela Perdomo in a statement.

The new app, which is currently available for Android users, was built on goTenna's open SDK by Samourai Wallet developers. Explaining why Samourai Wallet was chosen for the partnership, Perdomo told Bitcoin Magazine that their MuleTools initiative was the difference maker.

“Late last year we began talking with the team at Samourai Wallet about including goTenna in their MuleTools initiative. The Samourai Wallet team are leaders in building advanced mobile bitcoin wallets. Inspired by Blockstream’s satellite, their open-source MuleTools initiative encourages more alternative transaction broadcast methods.”

To start transacting offline, users have to download both the Samourai Wallet mobile app and the TxTenna app, and then pair them to a goTenna Mesh device for connectivity. Once this connection is created, users can send bitcoins to anyone in the world and broadcast it on the blockchain.

“Other goTenna devices in the area relay the transaction until an internet connected goTenna node also running TxTenna receives it and forwards it to the Bitcoin network,” Myers added.

TxTenna is another step in boosting the security and diversity of internet connection across the blockchain. Last year, cryptographer Nick Szabo and blockchain engineer Elaine Ou proposed alternative methods for accessing the blockchain. These methods offer much more versatility to those who wish to avoid censored systems, and it opens up use cases for bitcoin adoption in regions with less developed internet infrastructure.


This article originally appeared on Bitcoin Magazine.

Bitpay Phases Out Crypto-Debit Cards for European Cardholders

Bitpay Phases Out Crypto-Debit Cards for European Cardholders

The global cryptocurrency payment service provider, Bitpay, has announced the company’s loadable cryptocurrency debit card services will no longer work for European customers later this month. Bitpay has emailed all of its European card holding customers and revealed it is in the midst of sunsetting all Bitpay accounts related to the Wave Crest-issued Bitpay card.

Also read: Bitcoin Cash Speaker Series II Brings Leading Bitcoiners Together

Bitpay Is Phasing out Debit Services for European Cardholders

Bitpay Phases Out Crypto-Debit Cards for European CardholdersEight months ago news.Bitcoin.com reported on a slew of cryptocurrency debit cards forced to shut down services because of issues tied to the bank Wave Crest-Holdings. Many crypto-cards had to stop debit card operations because the issuer Wave Crest had its license from Visa revoked. Because of the banking issues, this week the cryptocurrency payment processor Bitpay has revealed that it is phasing out its Wave Crest-issued Bitpay card and associated services.    

“As you know, your Bitpay card’s issuer Wave Crest Holdings Ltd. stopped providing service for your Bitpay Card as of October 2017 or January 2018,” explains the Atlanta-based firm.

Bitpay adds:  

We are now working to sunset Bitpay accounts related to the Wave Crest-issued Bitpay card — In 30 days, we will be turning off access to your Bitpay card dashboard. If you need to store your card’s transaction data for any purpose, please export your transaction data before your card dashboard access ends on Wednesday, October 31st, 2018.       

The Need for More Crypto-to-Debit or Something That Bypasses the Traditional Frictions Associated With Fiat

European Bitpay card users will need to use another card provider if they haven’t already switched over the last six months. At the moment residents from that area can use popular crypto-card issuers such as Revolut, and Wirex for their crypto-to-debit needs. Moreover, there are a few new crypto-to-debit card startups entering the space that plan to provide these services for European customers.

Bitpay Phases Out Crypto-Debit Cards for European Cardholders

The advent of crypto-debit cards has made it easier for digital asset enthusiasts to spend their coins but the system is still tethered to the traditional financial network. In many ways, the model is still dealing with a fiat exchange and trading those coins for the user’s purchases. Additionally, former Bitpay cardholder can access a guide to extracting a comma-separated value (CSV) files that contain all of the user’s transactions for record keeping and tax purposes.    

What do you think about the Bitpay card no longer servicing European countries? What cards do you know of work good in the region? Let us know your thoughts about this subject in the comments section below.


Images via Pixabay, the Bitpay Card, and Shutterstock. 


Tired of those other forums on the subject of Bitcoin? Check forum.Bitcoin.com.

The post Bitpay Phases Out Crypto-Debit Cards for European Cardholders appeared first on Bitcoin News.

In Search of Stability: An Overview of the Budding Stablecoin Ecosystem

In Search of Stability: An Overview of the Budding Stablecoin Ecosystem

Stability.

The word seems to be at complete odds with the current nature of the crypto market. With its flagship coin having “died” on hundreds of occasions, volatility and meteoric price swings have come to define cryptocurrencies, as price stability, ever-elusive, is in short supply.

Bitcoin’s frenetic value has given critics plenty of fodder to argue that its underlying use case, a digital currency for a digital age, is kaput. The same argument has led proponents to rebrand bitcoin as a store of value, a kind of digital gold, instead of its ostensible utility as a payment method. It’s also one of the primary concerns for institutions when weighing the pros and cons of adopting cryptocurrencies into their business models or investing in the young asset class.

Enter stablecoins. A stablecoin, as its name suggests, is a cryptocurrency that is built to retain a stable value. Typically, each coin is pegged one-to-one to a national currency, most notably, the U.S. dollar or the euro. By mediating between the cryptographic controls of cryptocurrencies and the volatility that mars their monetary functionality, stablecoins are the answer to those critics who cry out against crypto’s mantra as digital cash.

The need for a stable cryptocurrency is obvious. Your local coffee shop isn’t going to sell you that latte for crypto if the price may decrease before they can liquidate it, and, on the flip side, you may not be willing to purchase it in crypto if there’s a chance that payment will appreciate in value after the fact.

Because of the above possibilities, proponents posit that stablecoins are a necessary analogue to adoption. With a stable payment mechanism in place, the belief goes, merchants, institutions and consumers should be more comfortable with using cryptocurrencies in their day-to-day.

But form and function aside, adoption still relies on integration, circulation and widespread use for a stablecoin to become a reliable payment method. What’s more, no two stablecoins are alike, and different models come with different degrees of decentralization and retain their pegs with collateral from different assets — or with none at all.

Stablecoins: A Brief History

Somewhat a product of the industry’s first altcoin boom, the stablecoin model dates back to 2014.

Bitshares, the brainchild of Dan Larimer, introduced the first fully functional stablecoin to the space. Described by many as a Decentralized Autonomous Organization (DAO) that offers a suite of services ranging from a a decentralized exchange to smart contract-managed payments, the platform debuted its stablecoin, BitUSD, on July 21, 2014.

Also referred to as a SmartCoin, BitUSD is backed by Bitshares’ native currency, BTS. To retain a 1:1 peg to the USD and to hedge against volatility, each BitUSD (typically) is insured with at least $2 in BTS. These BTS are locked up in a smart contract, and BTS holders can use Bitshares’ network to exchange their coins for BitUSD.

This model, known as crypto-collateralized, was the first first fully operable iteration of a price stable cryptocurrency. Keeping with bitcoin’s ethos, this model’s backing roots it in the cryptographic economy, and its only ties to fiat currency come from the dollar peg it represents.

Though it may seem odd to solve an asset’s volatility with the asset itself (more on this later on when we breakdown each stablecoin type), BitUSD is still around. But it’s been outpaced by its competitors, the strongest of which upholds what some say spits in the face of decentralization: stability with a direct peg to the USD.

Tether (USDT) launched shortly after BitUSD on October 3, 2014, as Realcoin. The most popular stablecoin hardly needs an introduction (though we’ll cover it more comprehensively later on). Currently ranked 8th on CoinMarketCap at the time of publication, the $2.8 billion asset purportedly backs each of its USDT tokens with a dollar in one of its multiple bank accounts. This fiat-collateralized, custodial model has become a market favorite, as Tether has become the go-to arbitrage and trading hedge on some of the space’s top exchanges.

As the first fully functional, fiat-backed stablecoin, Tether broke with the crypto-collateralized model that Bitshares pioneered, and its own model would set a precedent for a host of successors in the years to come.

Fast forward to 2018 and stablecoins have become the flavor of the year. The year following bitcoin and friends’ stratospheric boom and bust has seen the industry’s stablecoin niche roughly double its numbers. This expansion has been accompanied by an infusion of capital, as well, as the asset class has attracted some $350 million in funding, the majority of which comes from crypto-specific venture capital funds.

In the footsteps of Tether, the majority of these newcomers are fiat-backed, though Bitshares’ crypto-collateralized model still has its own adherents, and algorithmic-backed coins, hitherto confined to theoretical models and white papers, are making their working debut.

*Note: The following section examines fiat-collateralized stablecoins. While these coins fall under the larger category of asset-backed coins, we’ve decided to forego examining coins that are backed with hard commodities like gold or other assets like property and stocks, as coins that use these backings for stability either a) haven’t yet achieved a significant enough market cap or rate of adoption or b) are still in the ideation phase.

Fiat-Collateralized: The Second Coming of Old Money

As the previous history lesson explains and contrary to common misconceptions, Tether was not the first fully-functional stablecoin — though it did drum up enthusiasm for the fiat-collateralized model.

Tether’s cornerstone lies in a 2012 white paper authored by J.R. Willett. Entitled “The Second Bitcoin Whitepaper,” the ambitious document proposes a secondary layer on Bitcoin’s network, one that would allow developers to build additional coins on its blockchain (similar in concept though completely different in execution to building tokens on Ethereum).

This platform would eventually become Bitcoin’s Omni layer, the same technical springboard used to launch Tether. Tether co-founders Brock Pierce and Craig Sellars left Willet’s project in 2014 to work on Realcoin, what would later become Tether after a rebranding in November of 2014. By January of 2015, it began trading on the Bitfinex exchange, and the rest is history.

And that history has been complicated.

Information gleaned from the Paradise Papers leak in 2017, revealed that Bitfinex’s CEO Jan Ludovicus van der Velde is also the CEO of Tether Holdings Limited. This overlap has led skeptics to scrutinize the two organizations’ working relationship.

Augmenting this scrutiny, a report published by John Griffin and Amin Shams, two professors at the University of Texas at Austin, traces Tether’s issuance to a handful of Bitfinex wallets. The same report also corroborates a long-held suspicion that Tether prints more USDT than it has the dollars to back and suggests that Tether was used to artificially inflate bitcoin’s 2017 price, as a result.

Even so, Tether has its defenders. Dr. Wang Chun Wei of the University of Queensland, Australia, actually published research a month prior to Griffin’s and Shams’ own and, as though anticipating their scrutiny, found that Tether does not have enough market share to manipulate bitcoin’s price. Still, Wei’s report did not erase the questions surrounding Tether’s finances.

Tether could absolve itself from suspicion with a formal audit, though it claims this is impossible. Instead, in May of 2018, Tether conducted an internal review through the Freeh Sporkin and Sullivan law firm, which confirmed that Tether’s unencumbered assets match the tokens in circulation, while also cautioning that its report “... should not be construed as the result of an audit and were not conducted in accordance with Generally Accepted Auditing Standards.”

Without a proper audit on the books, Tether’s operations have been decried as opaque, and related concerns are exacerbated when we take a look at Tether’s liquidity. Making promises in its white paper that users can redeem Tether for USD at any time, the only real way to purchase Tether with fiat is indirect at best: You’d have to buy bitcoin or ether from a fiat-crypto ramp, transfer your coins to an exchange that supports tether and then trade for it there.

Tether itself, as Jon Evans has pointed out, does not actually allow users to redeem USDT for USD. The login function on Tether’s website is supposedly for this purpose, but recently, new users have been greeted with a registration error that says the site is rebuilding its system.

Fiat-Collateralized: Beyond Tether

Still, a growing force of fiat-backed competitors have taken to Tether’s model — with some modifications. These projects, in their own ways, have looked to avoid the controversies surrounding Tether by offering reliable liquidity and business models that place transparency at the fore of operations.

In the realm of fiat-collateralized coins, Tether’s biggest competitor is TrustToken. Like the monolith that came before it, TrustToken issues tokens tied to underlying dollars. Unlike Tether, however, which plays custodian, issuer and representative for its tokens, TrustToken is more hands-off.

In fact, it doesn’t have any degree of control over TrueUSD, its flagship stablecoin. The company leaves this up to its smart contracts, escrow accounts and fiduciary partners.

To mint TrueUSD, users must send a wire transfer with funds to one of TrustToken’s fiduciary partners (currently either Alliance Trust Company or Prime Trust), and after depositing the money into their bank accounts, these institutions use the platform’s Ethereum-driven smart contract to issue tokens to the user’s Ethereum wallet. To redeem tokens, the user burns them through the smart contract, which then signals the trusts to wire the user the corresponding funds.

In an interview with Bitcoin Magazine, TrustToken’s vice president of Corporate Development, Tory Reiss, indicated that the platform provides its fiduciary partners with a dashboard to manage the token issuance and redemption processes.

“We act on behalf of the token holder but, as a business, we can’t access those funds,” he emphasized.

TrustToken’s laissez-faire approach sets it apart from Tether, and its banking partners open up clear liquidation pathways for users. But this isn’t the only difference in the company's business model. It also publishes weekly and monthly attestations of its financial records.

“We have one top-50 accounting partner (Cohen & Company) that is performing attestation. When they look at your books, they look at all of your transactions. And if your account isn’t in line from day zero, they won’t maintain an audit account,” Reiss stated in our conversation.

“We have nothing to hide,” he continued, in a not-so-subtle jab at TrustToken’s competitor.

Reiss’s comments and TrustToken’s professional relationship with Cohen & Company throws a wrench in Tether’s claims that it can’t receive a proper audit. While Tether has claimed that an audit from one of the big four accounting firms is out of reach for a stablecoin, Reiss stated in our correspondence that TrustToken is currently in talks with two of these firms to give their audits additional legitimacy.

With a $100 million market cap, TrueUSD is Tether’s biggest competitor, even if it has significant ground to make up. But the month of September brought along with it three new institutional tier projects that could cut in to both front runners’ market shares.

Two of these — GeminiUSD (GUSD) and USD Coin (USDC) — were launched as in-house stablecoins for the Gemini and Circle/Poloniex exchanges, respectively. Both are seen as being potentially attractive to institutional investors for their regulatory compliance (Gemini is fully regulated per New York’s BitLicense laws, and Circle, regulated by FinCEN, is seeking money transmitter licenses from all 50 states).

USD Coin runs on Centre’s stablecoin framework, a blockchain developed by Circle. Like many other newcomers, GUSD runs on Ethereum, as does the Paxos Standard (PAX), the Paxos Foundation’s stablecoin that, like GUSD, is regulated by the New York Department of Financial Services. All three coins allow for quick and seamless fiat-to-crypto swaps and crypto-to-fiat redemptions using their own liquidity portals.

Gemini’s and Paxos’s coins have come under fire in the weeks following their same-day launches for backdoors in their coins’ code that allow either association to freeze funds and reverse transactions. These control mechanisms were likely necessitated by virtue of being regulated entities, and there’s no indication that either organization would abuse them under the regulatory spotlight.

As the CEO of Kowala (a stablecoin we’ll get to later), Eiland Glover put it, it’s either organization’s way of “being ahead of regulation, being over compliant” to give them the control “to go back and block or reverse something,” a control traditional financial institutions enjoy.

In the European sphere, Malta-based STASIS launched its STASIS EURS (EURS) in July of 2018. The coin’s finances are secured and managed by an undisclosed “AAA-rated European institution,” and it was the first exclusively euro-pegged stablecoin to hit the market.

Attesting to its reserves with daily, weekly and quarterly audits, CEO Gregory Klumov told Bitcoin Magazine that “STASIS created EURS token following the demand from institutional clients, high net-worth individuals, and funds that trade digital assets. Also, we think that there is a lack of price-stable cryptocurrency with the visible transparency of reserved assets.”

Takeaways and Tradeoffs

Acting as glorified IOUs for their underlying currencies, fiat-collateralized stablecoins are the least complex of the asset class’ three main categories.

By consequence, they’re also the easiest to understand. For this reason, institutional investors are likely to favor them over their more abstruse, technically complex counterparts. The regulatory protections and transparency that coins like GUSD, PAX, TUSD and USDC offer are also likely to make institutional investors and retail investors with little cryptocurrency knowledge feel at ease when entering the market.

They also offer the most surefire on and off ramps for liquidity. Now, if the end game of a stablecoin is to replace cash and fiat, then this won’t matter in the long term. But considering that stablecoins function primarily as a hedge for trading in their current form, ease of liquidity is a must for most investors.

Ironically, the same features that make stablecoins so attractive are the same things that might make them a turn-off for some users.

They require a baseline of trust that the institution in control of redeeming tokens will honor this commitment. The anxieties surrounding this counterparty risk are probably felt most with Tether, given its lack of transparency. Ultimately, this model reintroduces the same financial intermediaries bitcoin had intended to cut out. As is the case with PAX and GUSD, these same custodians have the power to access funds directly and reverse transactions — financial controls most crypto evangelists have rejected.

Crypto-Collateralized: Taming Volatility From Within

It seems odd to use an inherently volatile asset to create stability. But for those who place decentralization as a priority above all else, on-chain collateralized assets provide more peace of mind than their off-chain collateralized counterparts like Tether.

As we covered earlier, BitUSD broke ground by introducing the market to the stablecoin model, collateralizing the trailblazing asset with cryptocurrency in the form of BitShares (BTS).

BitUSD has since substantially fallen behind projects that came after it, and this may be in part due to the fact that its underlying asset, BTS, offers less liquidity and is used by fewer people than the more widely recognized Ethereum.

Because of this, we’ll be focusing on the Ethereum-based Maker, a decentralized autonomous organization (DAO) and its stablecoin, Dai. Founded in 2015, Dai has become the most popular crypto-collateral stablecoin available with a market cap of $56 million at the time of publication, and it functions similarly to BitUSD with a few key differences.

In fact, Maker’s CEO, Rune Christensen, told Bitcoin Magazine that BitUSD was the inspiration for DAI’s creation.

“I got into stablecoins initially with Bitshares’ [BitUSD], which was the first stablecoin project. And from there me and some of the other Bitshares community decided to take this fundamental stablecoin model and tweak it. At the time, you know, Tether’s model wasn’t around. The original stablecoin model was this crypto-collateralized, and it shows you how much the fundamental thought of the space — to decentralize finance — has changed.”

Dai maintains its $1 peg with what the platform calls Collateralized Debt Positions (CDP), and the same CDPs are responsible for minting new Dai. In order to mint Dai, network users must lock up collateral in a CDP, and in order to hedge against volatility, the CDP must be over-collateralized by at least 1.5x the value of Dai generated (e.g., if the current market value of ether is $225, then to generate 150 DAI, a user would have to front 1 ETH).

To free up collateral, the CDP’s owner must pay back the position’s debt (the amount of Dai originally generated) as well as any interest that the position accrued. This will always be paid in Dai, while the user must also pay a stability fee to the network in MKR, Maker’s base currency, the sum of which is burned by the network.

In the event that Dai’s price goes above or below its target price ($1), the networks Target Rate Feedback Mechanism (TRFM) kicks in to alter user incentives for generating or holding Dai. Falling below will increase the target rate of each CDP, making it more costly to generate Dai so as to reduce the number of coins pumped into circulation. This would then incentivize users to hold Dai as it moves back toward its target price, as their capital gains will increase. With more users holding and fewer Dai being minted, the price will stabilize.

If Dai’s price exceeds $1, the target rate decreases, and Dai is easier to mint in order to dilute supply. Community members are then disincentivized to hold Dai as the price decreases and approaches its equilibrium.

Currently, ether serves as Dai’s only collateral. Denominated as Pooled-Ether (PETH), users must first submit the ether they want to use as collateral into one of Maker’s smart contracts, and this user’s deposit is redeemed as PETH to use in the CDP.

Christensen told us that Maker’s uni-collateral model is something for the platform’s early days. The team hopes to scale the platform to accommodate “basically everything as the backing assets,” he said, collateralizing anything from gold to property and even other stablecoins.

“What we’re looking at is to create a stablecoin that represents a global basket of currencies, so it’s kind of like a measure of global stability for a global economy.”

This ambitious expansion will begin with Dai creating a peg for the euro, with an end goal of becoming blockchain agnostic to bundle the other assets in Maker’s scope.

Maker’s closest competitor outside of BitUSD is Havven, a bi-platform stablecoin ecosystem that runs on the Ethereum and EOS networks. Much like Maker, Havven’s stablecoin, nomins (nUSD), is created through collateralized debt backed by Havven coins (HVN). Unlike Dai, however, nUSD has struggled to catch fire with the wider crypto community and has a current market cap just under $1 million.

Takeaways and Tradeoffs

Demand, issuance and circulation are all driven by community members for both Havven and Maker. There are no overarching or centralized bodies in charge of the platform’s operations and, in Maker’s case, governance and risk management are the onus of MKR holders.

With communities left to their own devices — and with their responsibility to mint coins — the crypto-collateralized model is more decentralized than its more popular fiat-collateralized counterpart. For this reason, crypto-collateralized stablecoins are often championed by crypto evangelists, as they come without the centralized controls of coins like Tether and are more detached from the traditional financial system that bitcoin was built to disrupt.

For the same reason that decentralization diehards may be willing to endorse these coins, though, more mainstream investors and users may shy away from them. Out of the millions of investment dollars poured into stablecoins, only 9 percent of this ($33 million) has gone to crypto-collateralized assets, and $27 million of this figure has been allocated to Dai.

That few dollars are behind these projects isn't all that surprising. While these coins may not feature the same counterparty risks that come with custodial, fiat-collateralized models, most investors (especially institutional or accredited ones) like the financial guarantees and protections that come from working with a formal banking institution.

It also speaks to the difference in complexity and perceived reliability of the crypto-collateralized model compared to those coins backed by fiat. A coin that is tied to the dollar because it literally represents an existing dollar is much easier for the general public to understand than the hoops they must jump through with a coin like Dai. Plus, the thought of using a volatile asset in cryptocurrencies to generate stability makes less sense to most investors than using a dollar-based IOU model, which most closely resembles how they currently bank using debit and credit.

Algorithmic Backed: Assets Backed by Math

Raising 50 percent ($174 million) of all venture capital funding committed to stablecoin projects to-date, algorithmic-backed stablecoins (coins that have no assets backing them) are the ecosystem’s dark horse. And though they have plenty of bills betting on them, there’s no guarantee that they’ll win out in the end — just plenty of promises and expectations to succeed.

Out of New Jersey, Basis coin has attracted the vast majority of this funding, a jaw-dropping $133 million from the likes of Andreessen Horowitz, Polychain Capital, Pantera Capital and the Digital Currency Group. The coin takes a cue for its stability mechanism from the Seigniorage Shares model developed by Robert Sams.

Its launch forthcoming in 2018, Basis relies on a combination of smart contracts and bonds to achieve stability, and its model, while complex, is predicated on traditional economic theories and incentives to maintain its peg.

In short, in the event of market expansion (when the coin exceeds $1), the network’s smart contracts mint more coins to inflate the circulation and drive prices down. If the price dips below $1, the network will create bonds (debt certificates) and sell them for Basis coins, thereby taking excess currency out of the ecosystem to drive the price back up.

These bonds are then bought back in times of expansion with newly minted coins, and they can even be sold for less than they’re worth, in the case of demand being seriously scant.

Carbon (CUSD), a hybrid fiat and algo-backed stablecoin with $2 million in VC funding, will operate using a like model. Instead of bonds, though, it will issue what is called a Carbon Credit token (Carbon Credit) using a reverse Dutch-style auction when CUSD prices fall below the peg threshold. Like Basis, these credits will be redeemed proportionally per user during events when the network must mint new coins to bring the price down from an unwanted rise. To kick start its network, Carbon is launching on a fully fiat-backed model.

Basis is supposed to launch this year, and Carbon, which went live recently with limited access to hedge funds, accredited players, exchanges and professional traders, is supposedly waiting to have some $1 billion in fiat reserves before transitioning to a partly-algorithmic model. When they do come to market, they’ll be the first non-asset backed stablecoins to test out Sams’ Seigniorage Shares model.

But they won’t be the first algorithmic stablecoin to circulate. Kowala’s kUSD, which launched the alpha for its mainnet in September 2018, has them beat. The first stablecoin to see integration by Ledger, kUSD applies the economic rationale of the Seigniorage Shares model with a spin.

Instead of managing a price peg through debt buybacks and smart contract mandated inflation, the coin uses transactions fees, dead-end addresses and mining rewards. Its model relies on two coins to this end: mUSD, a staking token for mining rights, and kUSD, the stablecoin.

Miners mint kUSD as their mining reward and are, in turn, tasked with circulating the currency. In the event that the price of kUSD climbs above $1, mining rewards are increased to correct the discrepancy. If the price dips too low, then transaction fees are slightly increased, and a portion of these is sent to a dead-end address to be burned by one of the network’s smart contracts.

The largely under-the-radar project has been working closely with regulators and accredited individuals, said CEO Eiland Glover in an interview with Bitcoin Magazine. Its coffers have been filled with rounds of funding from private investors and, per SEC regulations, only accredited investors were allowed to purchase initial sums of its mining token, mUSD.

Operating these private rounds as a securities sale, Glover intends to open the sale of this token to the public when the project’s mining rights are more widely distributed. He’s also reportedly in talks with entities outside of the U.S. to create Kowala coins for other national currencies and economies.

Glover also stressed that kUSD went through “test after test” and code audits before it launched, and he showed the author of this article an AI-driven testnet scenario of kUSD’s minting, circulation and trading to demonstrate its stability mechanism in action.

Kowala is also the only algorithmic stablecoin with open-source code on an active GitHub, which can be viewed here.

Takeaways and Tradeoffs

Our section on algorithmic stablecoins was shorter than the rest for the simple reason that this model is still untried and untested. Even Kowala, the closest to a beta mainnet, is still in alpha and hasn’t stood trial on the crypto market.

Theoretically, algorithmic stablecoins could offer the greatest degree of decentralization. Completely detached from any underlying asset, subsisting only on the math behind their designs, they present themselves as the futurist’s economic instrument, as the next evolution of stablecoins and cryptocurrencies writ large.

But of course, this is assuming they function as intended, and no one can say for certain that they will. Even in Basis’ case, all the backing in the world is no guarantee for success, and there are plenty of variables that could make the model untenable.

One of these is the chance that an algo-backed stablecoin could experience a “death spiral.” Basically, if the price drops low enough, investor confidence could be shaken to the point of inciting a massive sell-off — something akin to a bank run for the network — and this could send the coin into a freefall from which it couldn’t recover.

Basis’s and Carbon’s bonds/debt contracts are meant to mitigate this risk, but these safety nets operate under the assumption that the community has enough confidence in the coin’s economic model to a) buy the contracts in the first place and b) hold them long enough to redeem them. Essentially, they’re predicated on a belief that the network itself holds value; if this belief is shattered, then there won’t be enough buyers left to pick up the pieces.

With So Many Coins, Where Do We Go From Here?

It’s worth pointing out that the stablecoins examined in this article are not exhaustive. For now, we covered only the most notable stablecoins in each class, focusing mainly on those that have already launched.

There are still others, some of which have attracted significant attention and capital. Saga, for example, has raised $30 million dollars in venture funding, and its team and advisors boast a former J.P. Morgan executive, a former central banker and even a Nobel prize-winning economist. Its peg will tap into the International Monetary Fund’s special drawing right, a foreign exchange reserve asset that represents an index of national currencies to serve as a unit of account.

If we can glean anything from the institutional track record of its team and its economics, Saga’s design is aimed at big league investors. Over time, its price stability mechanism will allow it to maintain its peg without full funds to back every token in circulation, a feature that may too closely resemble fractional reserve lending for crypto’s more fundamental believers.

With funding to the tune of $32 million, the South Korean Terra offers a basket of assets for collateral like Saga. A bit of Frankenstein’s monster conglomeration of the stability mechanisms we’ve looked at, the coin will initially be backed by fiat, later backed by Luna — a currency for network stakeholders who deposit Luna in a Stability Reserve — and later will be ballasted thanks to transaction fees (these fees are paid out to Luna holders, and they increase in the event of a price fall). It is projected to launch in Q4 of 2018.

At any rate, the myriad stability mechanisms and the divergence of these even within each sub-category of stablecoins illustrates that the asset class is rich in variety and, as evidenced by the number of projects announced and launched in 2018, is undergoing a tremendous growth spurt.

Even still, the model, in all of its forms, has a long road ahead before it becomes completely viable as a payment method or store of value. Merchant integration and community adoption is needed, along with a track record of sustainable value (even the oldest stablecoins are less than half a decade old) and consumer confidence.

This confidence may be tenuous in the short term, as a handful of stablecoins have seen their pegs broken at some point in their lifespans (e.g., TrueUSD rose to $1.30 upon being listed on Binance, rising again to over $1.20 five days later; Dai dipped to as low as $0.86 on February 28, 2018; and Tether even dropped to $0.57 in 2015, albeit upon its launch).

Despite its initial plummet upon going live, Tether has remained incredibly stable, and this may explain, in part, why it still accounts for roughly 98 percent of all stablecoins’ market volume.

Of course, this could also be indicative of a lack of competition, something that has been ramped up as of late. With a slew of new coins joining the market race, it’s possible that each coin could serve its own distinct function in the ecosystem as it matures, something both Christensen and Glover expressed in our conversations.

“People have different demands for what they want from the stablecoins they use,” Christensen put it simply in our conversation.

“We definitely think that for the vast majority of people, they just want to use the currency they use,” he continued, stressing that, for adoption to stick, “user interfaces and DApps [must be] really easy to use.”

Glover echoed Christensen’s thoughts, believing coins like the GUSD, PAX and USDC aren’t “really transaction coins” as they were “built for trading” more specifically.

When we consider the above coins’ painstaking emphasis on regulations and the traditional financial controls they have in place, Glover believes these coins will be more appealing to institutional investors looking for a safer in to the market. He also believes legacy companies and institutions are starting to see the benefit of blockchain and cryptocurrencies, something the influx of investment capital and stablecoin projects in 2018 stands testament to.

But for these institutions to buy in, they’ll need that previously elusive — or eluded — guarantee: regulation.

“I see this as institutions now starting to plug in blockchain and crypto into an existing world. To do that, you have to make it fit,” Glover said.

Christensen believes that regulation is both inevitable and necessary, both to embolden the ecosystem and demonstrate to government officials that it isn’t some boogeyman it should simply fend off.

“I think it’s absolutely crucial. First of all, we need to turn around the image of cryptocurrency away from the early days of destroying the governments, destroying the banks and being used for shady stuff on the internet. And secondly, we need to engage with government and explain to them that this is not going to undermine their ability to control their national currency. For instance, all the stablecoins are pegged to national currencies already — they’re not being circumvented. It’s important that regulation comes to protect consumers, but that it doesn’t interfere with the fundamental advantages of blockchain technology.”

Where these regulations will take the industry and when they will be affected (if at all), is hard to say, especially when you consider the complexity of this newer asset class within a new and largely misunderstood asset class in cryptocurrencies. In the U.S. context, for instance, stablecoins like Basis and Kowala, which both offer profit potential for their users, could very well be seen by the SEC as securities, while asset-backed stablecoins may be seen as commodities by the CFTC for acting as economic instruments.

Capping off our discussion on regulation, Glover indicated that, to remain viable amidst the “moving goalpost of regulations,” projects are running to regulatory guidance instead of away from it. This act of self-preservation couold be interpreted as a show of legitimacy for what use to be a stigmatized industry, but it also means walking the line between what that space is about and what it is primed to become in the larger economy.

“I think a lot of people got subpoenaed and that was a ‘game over.’ You want to do things in a way that preserve the integrity of the stablecoin, but you don’t want to be shut down. I think there is a move toward compliance. Everybody's seeking out a safe haven where they can feel comfortable that they’re operating under some regulation that protects them. Because now all of this stuff is turning into a real business.”

This article originally appeared on Bitcoin Magazine.

BCH Roundup: Merchant Adoption, Wallet Services, and Hackathons

BCH Roundup: Merchant Adoption, Wallet Services, and Hackathons

Another busy week has passed for Bitcoin Cash (BCH) proponents as there continues to be an influx of bitcoin cash adoption, new platforms, and improved infrastructure.

Also read: Popular Discussion Board 4chan Now Accepts Cryptocurrencies for Passes

Bitcoin Cash (BCH) Market Action

Every week there’s an awful lot of developments happening within the BCH ecosystem and this week is no different. Bitcoin cash markets have been strong again over the past week, as the decentralized cryptocurrency is up 1.29 percent today and up over 22 percent over the last seven days. At the time of publication one BCH is trading for $533 per coin and the overall BCH market valuation is $9.28 billion today. The top five exchanges swapping the most bitcoin cash include Lbank, Hitbtc, Okex, Binance, and Huobi. As far as trading pairs are concerned the top five currencies traded for BCH includes tether (USDT 35.4%), BTC (31.5%), ETH (20%), USD (7%), and KRW (2.3%).

BCH Roundup: Merchant Adoption, Wallet Services, and Hackathons

More Bitcoin Cash Adoption

Besides market action, there’s been a lot of adoption happening as well throughout the BCH ecosystem. One adoption announcement this week that BCH fans enjoyed was from the event ticketing platform Big Tickets who revealed they have integrated with Bitpay for event payments. Now users can purchase tickets to events using the lightning fast and low fee BCH network, explains the company’s recent press release.   

“We know our product, values, and dedication to innovation are deserving of an equally secure and seamless purchase method for our event attendees — The use of bitcoin cash is a major social trend we’ve been monitoring and we’re excited to be the first event ticketing platform in the United States to accept the burgeoning cryptocurrency,” said Jason Henley, CTO of Bigtickets.com.

BCH Roundup: Merchant Adoption, Wallet Services, and Hackathons

Another well-known firm that now accepts BCH is the popular software bounty hunters Hackerone. The Hackerone team has also partnered with Bitpay’s payment services and individuals and companies can use bitcoin cash to find bugs in their systems. Hackerone has worked for many fortune 500 firms like General Motors, Google, Twitter, GitHub, Nintendo, Lufthansa, Panasonic Avionics, Qualcomm, Starbucks, Dropbox, and Intel.

Bitcoin Cash Wallet Infrastructure

BCH Roundup: Merchant Adoption, Wallet Services, and HackathonsThis week the wallet firm, Cointext, led by the company’s founder Vin Armani has announced that the SMS-capable wallet application can now send bitcoin cash to mobile numbers in six more European countries. “Bitcoin was always meant to be used as borderless cash,” explained Cointext CTO Vin Armani. “Our aim with Cointext is to expand its usefulness in real life.”

The large mining giant Bitmain Technologies has revealed yesterday that it has acquired the bitcoin cash desktop wallet Telescope. The Telescope wallet is a browser-embedded cryptocurrency wallet application for Bitcoin Cash (BCH). The platform also supports Bitpay invoices and the Money Button alongside traditional wallet services.

“We are extremely proud of Telescope wallet and the simple but key innovation that the project brings to the Bitcoin Cash ecosystem — Browser-embedded cryptocurrency wallets are a promising technology,” said Nishant Sharma, Head of International PR and Communications at Bitmain. Sharma continues:  

The Telescope development team is doing some very interesting work and we look forward to working together with them on the Telescope project and future Bitcoin Cash projects.

Another wallet announcement stems from the South Africa-based firm Centbee as the company has officially launched its iOS version. News.Bitcoin.com reported on the alpha version of the Centbee Android application this past July. During the iOS release Centbee’s co-CEO, Lorien Gamaroff, explains “Our key focus in designing the app was to make sending Bitcoin cash to friends as simple as possible.” Gamaroff adds:        

In just a few taps, users can send Bitcoin cash to anyone, anywhere at the lowest possible cost Bitcoin cash will be adopted globally as the best way to pay, especially in Africa and other developing markets.

Worldwide BCH Devcons and the Possible Bitcoin Cash November Upgrade

Bitcoin cashers are also looking forward to the upcoming BCH hackathons taking place in San Francisco, Amsterdam and other regions around the world. The San Francisco event is dubbed the BCH Devcon and will take place on October 10-11 and the first place winner will receive a 10 BCH investment from Permissionless Ventures.

BCH Roundup: Merchant Adoption, Wallet Services, and Hackathons

Another BCH Devcon will take place in Amsterdam on October 27-28 and the event will also be hosted in Israel, Japan, South Korea, and India as well. For more information about all the BCH Devcons if you would like to participate or attend check out the official page here.

Overall at the pace development has been going, October will likely be a busy month for bitcoin cash enthusiasts, network participants, and developers leading up to the planned BCH hard fork slated for November 15.

What do you think about this week’s bitcoin cash markets and headlines? Let us know your thoughts on this subject in the comment section below.

Disclaimer: Bitcoin.com is an official sponsor of the BCH Devcon events.


Images via Shutterstock, BCH Devcon, Pixabay, and Bitcoin.com 


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Cardano Launches Rust Project to Entice Third-Party Developers

Cardano Rust

Cardano, the platform underpinning ADA, the ninth largest cryptocurrency by market cap, is opening its doors to third-party developers through a new client, written in systems programing language Rust.

“As a project matures and grows, you need to satisfy the demands of different clients,” Charles Hoskinson, CEO at IOHK, the blockchain development company behind Cardano, told Bitcoin Magazine.  

IOHK made the announcement on October 1, 2018, exactly one year after it launched Byron, the first version of Cardano’s settlement layer, which was built in the functional programming language Haskell. While Haskell works well for mission-critical code, Rust shines in areas like mobile, where performance matters. Rust was created by Mozilla for Firefox as a replacement for C++.

It is worth noting that Cardano, a proof-of-stake blockchain, is currently centralized with all of its blocks being produced by IOHK. But the project hopes to change that in Q1 2019 when its Shelley release opens up staking pools to users. (Shelley was originally slated for Q2 2018.)

At its core, Cardano’s Rust project is a software development kit for the Cardano blockchain. It has several ingredients needed to interact with the blockchain, including data types like blocks, transactions and addresses, along with protocol functions to query blocks, send transactions and so on. The Github repository describes the project as a toolbox of Cardano functions intended for use by third parties. It also states that a “future” Rust implementation of a Cardano node is in progress.

A command line interface (CLI) wallet is the first project to come out of Cardano’s Rust project. The wallet, still in alpha phase, acts as a toolbox for third-party developers. Here, developers can pick and choose from a library of wallet and node functions. It also lets developers manage multiple wallets, including Cardano’s Daedalus and Icarus wallets. The library is open source, and the plan is for the community to eventually take over the project.

A diversity of clients is good software engineering and a common practice in open source software because it makes it less likely the protocol will be tightly bound to one implementation.

Ethereum, a project that Hoskinson participated in as co-founder and CEO in 2014, also offers a choice of clients — its main ones being go-ethereum (written in Google’s Go programming language) and Parity (written in Rust). IOHK intends for Cardano-Haskell to serve as a reference code for new clients, showcasing how the Cardano protocol ought to work.

Hoskinson hinted that more Cardano node implementations may be on the horizon. “It is really important to see clients written in imperative languages like Javascript, Ruby or Python and really important to see them written in system languages like Rust and C++,” he said.

Eventually, IOHK sees Cardano going head-to-head with projects like EOS and Ethereum. But that won’t happen until a third major third release called Goguen introduces a smart contract layer to the platform. Hoskinson said two smart contract testnets are already up and running, adding that IOHK is “likely” to use its Rust client for testing smart contracts.

This article originally appeared on Bitcoin Magazine.

Blockchain’s Report Examines Benefits (and Failures) of Today’s Stablecoins

Blockchain’s Report Examines Benefits (and Failures) of Today’s Stablecoins

Stablecoins have garnered serious investor attention over the past few weeks. Unlike bitcoin and similar cryptocurrencies, they are digital assets built to lessen price volatility and are often paired against the U.S. dollar or established commodities like gold. Volatility is one of the main reasons why several institutional investors and individuals have thought twice about stepping into the cryptocurrency arena, and stablecoins seek to make things a little less frightening.

Cryptocurrency firm blockchain.com

https://www.blockchain.com/research

has released a report examining the growth of the stablecoin trend, the differences between the growing number of stablecoins in circulation, and whether they truly work to lower volatility in the market.

In total, 57 stablecoins were examined, including Tether, TrueUSD, Dai and Digix Gold Token. About 26 of these stablecoins — roughly 45 percent — are live, while the remainder are in pre-launch phases. The number of active stablecoin projects has increased heavily over the past 12 to 18 months, and more than a dozen separate ventures have issued plans to launch new stablecoins by the end of the year.

The report states that most stablecoins can be separated into two categories: asset-backed and algorithmic (coins that have implemented a central banking platform to keep prices sturdy). Roughly 77 percent of those observed are asset-backed, with USD being the primary asset of choice amongst 66 percent of them. Most of the tokens — roughly 54 percent — utilize on-chain collateral.

More than 50 percent of the stablecoins offer “dividends” or have incentive mechanisms built into their designs; these already make up a healthy portion of the digital asset arena. Tether, for example, is now the second most traded digital asset after bitcoin and lists among the top ten cryptocurrencies by market value. It also accounts for nearly 98 percent of stablecoin trading. Many of these currencies are also listed on approximately 50 different digital exchanges, with Tether on a whopping 46.

The total market value for all current stablecoins is $3 billion, or roughly 1.5 percent of the total cryptocurrency market. Approximately $350 million in venture funds have been put toward the creation of stablecoins, and most are legally domiciled in the U.S. and Switzerland. A large portion of stablecoin teams prefer to set up house in the U.S., while regions in Europe such as the U.K. also remain popular.

Ethereum has proven to be the most widely used hosting platform for stablecoin projects, with approximately 60 percent of them building exclusively on top of the Ethereum blockchain. For the rest, top blockchain choices include Bitcoin, NEO and Stellar. Roughly 69 percent of stablecoin teams have made their code open-source for audit inspection, and some of the biggest investors in stablecoins include Pantera Capital, Coinbase, Circle and the Digital Currency Group.

The report introduces several use cases for stablecoins including “smart travel insurance.” Roughly 600,000 passengers each year do not file eligible insurance claims for canceled or delayed flights. What they don’t seem to know is that these flights become public record and can be queried by smart flight insurance software. If a plane fails to take off for any reason, the smart contract under the insurance will pay the claimant immediately and ease the claims process, while the insurance premium can be escrowed on-chain to remove counterparty risk.

Where stablecoins are failing is in their adoption rates. While enthusiasm does surround these currencies, the technology behind them is still very new and requires further experimentation before a perfect design can come about. Regulation surrounding stablecoins also remains uncertain, with one of the biggest issues being whether stablecoins comply with national securities and money service laws.

Furthermore, many stablecoins are thought to pose greater threats to fiat than standard cryptocurrencies and run the risk of sparking competitive backlash from traditional finance officials. Barry Eichengreen, professor of economics at the University of California, Berkeley, argues that stablecoins backed by USD, for example, introduce several additional expenses in that for every dollar’s worth of cryptocurrency issued, one dollar of investment capital is taken from national reserves. Thus, users are trading fully liquid dollars supported by the U.S. government for cryptocurrencies that are not fully established, possess “questionable” backing and are difficult to use.

He also claims that this kind of stablecoin trading model will only be attractive to money launderers and tax evaders, and he doesn’t expect the model to scale.

The report also says that certain stablecoins will weigh more heavily on the prices of entities like bitcoin and ether, which may lead to more aggressive competition in the crypto market.

However, the report does state that stablecoins are likely to see further adoption in the future and lead to generally stronger adoption rates amongst cryptocurrencies. The authors describe stablecoins as “a form of infrastructure or foundational layer for crypto assets that will generate immense value for the digital assets ecosystem.” They believe stablecoins will successfully address concerns surrounding volatility, though they assert this will be a long-term process.


This article originally appeared on Bitcoin Magazine.

Monero Releases Malware Response Group and Successfully Patches Burn Bug

Monero Releases Malware Response Group and Successfully Patches Burn Bug

Monero has officially released its Malware Response Workgroup website yesterday. In an effort to help protect Monero’s community, the website aims to provide resources to educate about the types of malware that may take advantage of users. It provides support for problems including unwanted in-browser and system mining (cryptojacking) and ransomware, all which have been a growing problem as of late.

In a blog post by Justin Ehrenhofer on the Monero website, the Malware Response Workgroup is “a self-organized set of volunteers that maintains these resources and provides live support.”

The post goes on to describe future efforts to provide support directly through the website; however, volunteers are currently available for live support at #monero-mrw.

The Burn Bug

The announcement of the working group is a second bit of positive news from the Monero community, coming shortly after it successfully patched a bug in its wallet code.

The “burn bug” never affected the actual protocol or the coin supply, but, if exploited, it would have allowed a malicious actor to profit significantly from inflicting damages on organizations within the Monero ecosystem, such as exchanges and any entity using a Monero wallet.

The bug could have been exploited as follows: An attacker first generates a random private transaction key. Then, they modify the code to merely use this particular private transaction key, which ensures multiple transactions to the same public address (e.g. an exchange's hot wallet) are sent to the same stealth address. Subsequently, they send, say, a thousand transactions of 1 XMR to an exchange. Because the exchange's wallet does not warn for this particular abnormality (i.e. funds being received on the same stealth address), the exchange will, as usual, credit the attacker with 1000 XMR. The attacker then sells his XMR for BTC and lastly withdraws this BTC. The result of the hacker's action(s) is that the exchange is left with 999 unspendable / burnt outputs of 1 XMR.

In the simplest sense, the bug allowed for funds to be sent in such a way that the recipient could not spend them, and the wallet would still report these as properly received funds.

It would have been possible to send multiple transactions to the same one time address, each transaction with a different key image. Since the one-time address can only be used once, it could only claim one of those outputs sent to it — but the wallet software was accumulating the amounts of all of those transactions.

While the concept of burning funds by sending multiple transactions to the same stealth address is nothing new in the Monero community, the consequences were never properly thought through if a third party, like an exchange, is involved. In May 2017, the topic was lightly discussed in a Monero SE Q&A. Users tossed around the idea, concluding they are “not sure of the implications or whether the protocol guards against this.” It was not until the hypothetical scenario included an exchange where the community realized the true implications of such an exploit.

The Discovery and Fix

The exploit was discovered on September 16, 2018, after Reddit user s_c_m_l described a hypothetical attack on exchanges that support the Monero’s XMR token. The scenario presented User A sending XMR to Exchange B via many transactions with the same stealth address, allowing User A to then exchange the currency he sent and proceed to cash out. This was the first time anyone had imagined such a situation.

Less than 24 hours after s_c_m_l proposed the attack in a Monero subreddit, another Reddit user, Vespco, posted the idea in the official Monero subreddit. Shortly after, a patch was created by the Monero dev team and applied on top of the v0.12.3.0 release branch. The patch was implemented via a pull request.

After pull request #4438 was implemented, the developer community privately notified as many exchanges, services and merchants in order to minimize the number of organizations that would be exposed when the official announcement was made.

Monero Community Responses

As dEBRUYNE mentions in his blog post, this practice was not ideal because there were inevitably organizations that they weren’t able to notify. The behind-the-scenes notifications could also have been viewed as preferential treatment, which is never ideal for a community fostering decentralization and fairness.

Following the patch release, community members on Reddit were unsure how to perceive the outcome of the situation and were debating if the Monero dev team should have disclosed that there was a bug while they were working on a patch instead of after. Reddit user fort3hlulz suggested:

“I *do* think that a simple disclosure would be helpful in the future … [for example] a bug is reported and found to be real. Monero devs make a post that there *is* a bug, that it is being worked on, but without details on what/exploit details.”

What’s unusual in this circumstance, however, was that the bug was originally mentioned in Reddit as opposed to the official Monero Dev group, which left the community, devs included, unsure how to announce that there was indeed a bug. Nonetheless, the quick response by the entire community, developers included, seems to have reinforced confidence in Monero.

In the future, Monero and its community hope that further community efforts like the Malware Response Workgroup will provide better resources for users to report bugs of all types. Referring to the main focus of the group, Ehrenhofer writes “We will not be able to eliminate malicious mining, but we hope to provide necessary education for people to better understand Monero, what mining is, and how to remove malware.”


This article originally appeared on Bitcoin Magazine.

Developers Unveil Two New Bitcoin Cash Full Node Clients Written in Go

Developers Unveil Two New Bitcoin Cash Full Node Clients Written in Go

The creators of the counterparty.cash protocol and Openbazaar developer Chris Pacia have announced two separate Bitcoin Cash full node clients written in the programming language Go (golang) — Gocoin-cash and Bchd (gcash).  

Also Read: BCH Roundup: Markets and Developments Leap Ahead This Week

Gocoin-cash: A Full Bitcoin Cash Solution Written in Go Language

Developers Unveil Two New Bitcoin Cash Full Node Clients Written in GoThe Bitcoin Cash network has a lot of full node clients which include Bitcoin ABC, Unlimited, Bcash, Parity Cash, XT, SV, and the Bitprim implementation. Some of the clients are written in the original C++ programming language Satoshi used when the Bitcoin network first launched. Other clients also run the entire BCH network but are written in a different codebase.

For instance, Parity Cash is written in the programming language rust, and Bcash is a full node compiled with the language node.js. These other languages allow developers to use the BCH network in a more interoperable fashion, as common programming languages allow them to create friendlier applications. This week the creators of counterparty.cash (XCPC) have announced the launch of Gocoin-cash which is a Bitcoin (Cash) full node and wallet written in Go (golang).

Gocoin-cash is a port of the BTC software originally written by Piotr Narewski. The fork announced by XCPC and BCH developer, Julian Smith, currently has its own Github repository for developers to review or participate. The Gocoin-cash full node project also has a website that explains the client launch will be in 47 days on iOS and Android operating systems.

“Gocoin-cash is a full Bitcoin Cash solution written in Go language (golang) and is based on the original work of Gocoin by Piotr Narewski,” explains the Gocoin-cash repository. The repository notes add:  

The software architecture is focused on maximum performance of the node and cold storage security of the wallet.

Developers Unveil Two New Bitcoin Cash Full Node Clients Written in Go
Gocoin-cash was developed by Julian Smith the creator of the crypto-derivative platform, Counterparty.cash.

The Go Client Provides Fast Sync Time and Dragonfly Services

Developers Unveil Two New Bitcoin Cash Full Node Clients Written in GoThe client itself is independent of the wallet which claims to add the best block processing performance on the market. Moreover, with “decent machine and a fast connection (e.g. 4 v-CPUs from Google Cloud or Amazon AWS)” the developer writes that a node could sync the entire bitcoin blockchain “in less than 4 hours.” The Gocoin-cash wallet itself is deterministic and password seeded but designed to be used offline, explain the developers.

“As long as you remember the password, you do not need any backups ever,” the repository notes detail.

The Gocoin-cash website details that the protocol is also powered by Google Dragonfly. Essentially this means Gocoin-cash users can utilize Dragonfly services to query the BCH chain and have more powerful global payment connectivity. The project says people can subscribe with an email in order to be notified about the launch date.

Chris Pacia Unveils Bchd, Another Bitcoin Cash Client Written in Golang

In addition to the Gocoin-cash implementation, another full node client called ‘Bchd’ (gcash) is currently in the works that also uses the golang programming language. Openbazaar developer Chris Pacia has revealed he is working on a fork of the Btcd implementation that’s been around since 2013. Pacia ported the code to build a BCH full node written in Go and the developer believes it is “one of the best designed and well-written Bitcoin codebases.”

Developers Unveil Two New Bitcoin Cash Full Node Clients Written in Go
Chris Pacia’s Bchd (gcash) project.

The Openbazaar programmer explains that a BCH full node written in golang has many benefits like client-side block filtering, the ability to utilize QUIC, a new transport developed by Google to replace TCP, and much like Gocoin-cash the Bchd deploys extremely fast blockchain sync times.   

“So one of my primary goals with the Bchd project will be to provide a high powered indexing blockchain server that will act as a fast and reliable backend for Bitcoin Cash applications with a great API,” Pacia explains in his Yours.org announcement. The developer adds that the codebase simplicity allows for new features as well stating:  

The design of the codebase coupled with the ease of use of Go makes it relatively easy for us to experiment with new features that would take a long time to get into the C++ implementations.

Just like the Gocoin-cash implementation, Pacia’s Bchd project is incomplete. The Bchd developer details he still needs to create a UTXO cache, implement a pruned mode, Port the btcwallet/neutrino codebase, and switch to libsecp256k1. Pacia says if other volunteers want to help him push the open source project forward they should drop by the repository.

“If you’re interested in working on it drop by the Github repo — The more the better,” Pacia concludes.

What do you think about the BCH full node written in Go? Let us know what you think about this project in the comment section below.


Images via Shutterstock, Pixabay, Bchd, Github, and Gocoin-cash.


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The post Developers Unveil Two New Bitcoin Cash Full Node Clients Written in Go appeared first on Bitcoin News.

Federal Judge Rules Cryptocurrency MBC Is a Commodity

Federal Judge Rules Cryptocurrency MBC Is a Commodity

In a landmark case for the cryptocurrency industry, a federal judge has ruled that a cryptocurrency caught in the midst of a lawsuit is a commodity, court documents reveal.

U.S. District Judge for Massachusetts Rya Zobel has decided that the suit’s prosecuting party — the Commodity Futures Trading Commission (CFTC) — can proceed with its case against My Big Coin Pay Inc. as its cryptocurrency My Big Coin (MBC) does not fall into the category of a security.

My Big Coin was founded in December of 2013. Allegedly based in Wyoming, the company offers its own digital wallet to store cryptocurrencies and a digital exchange to trade them. My Big Coin began selling its own currency — MBC — through an initial coin offering (ICO) and made approximately $6 million from 28 separate investors by promising 1 percent interest per year to investors that kept their wallets open.

The CFTC claims that the ICO has all the same behavior and qualities of a Ponzi scheme. They allege that the company is based in Las Vegas, not Wyoming, and that owners Randall Crater of New York and Mark Gillespie of Michigan used customer funds to purchase expensive items for themselves.

In addition, the CFTC believes the money was raised through several false claims, including that MBC was backed by gold and traded across several different exchanges, and that My Big Coin had recently struck a partnership with MasterCard.

Charges were filed back in January of 2018. The company’s accounts were frozen, and executives were blocked from accessing them. They were also prohibited from disposing of any financial records.

According to court documents, Judge Zobel believes that MBC classifies as a commodity because it is a cryptocurrency like bitcoin:

“The amended complaint alleges that My Big Coin is a virtual currency, and it is undisputed that there is futures trading in virtual currencies (specifically involving bitcoin). That is sufficient, especially at the pleading stage, for plaintiff to allege that My Big Coin is a ‘commodity’ under the [Commodity Exchange] Act.”

Defending lawyer for My Big Coin Katherine Cooper expressed her disappointment in the decision and continues to argue that the CFTC holds no precedence. In the court documents, she argues that “contracts for future delivery” are indisputably not “dealt in” My Big Coin. Thus, the currency cannot be classified as a commodity under the ECA.

“My Big Coin does not have future contracts or derivatives trading to it,” she asserts. “It is not a commodity. Now that we are moving past the motion-to-dismiss phase of the case, we look forward to challenging the CFTC’s ability to prove many of the factual allegations in the complaint. Among those factual allegations are those which speak to the relatedness of bitcoin and My Big Coin, and, therefore, the CFTC’s jurisdiction,” she said.

Defining crypto tokens has not always been an easy feat for U.S. lawmakers. Recently, federal judge Raymond Dearie in New York invoked decades-old securities laws to decide that two separate ICOs, one for REcoin and one for Diamond, classified as securities. Both projects were run by Maksim Zaslavskiy who claimed that REcoin was backed by real estate and that Diamond was backed by real diamonds. Neither entity backed the coins, and Zaslavskiy has been charged with two counts of securities fraud.

Dearie stated that the ICOs in question were “investment contracts” according to the Securities Exchange Act of 1934 and the Howey Test, which states that a transaction is an investment contract if a person invests money in a “common enterprise and is led to expect profits solely from the efforts of the promoter or a third party.”

Dearie asserts customers expected returns on their investments and even referenced the DAO Report in his decision, which was issued in July of 2017 and explains that all tokens sold on Ethereum-based platforms, like both REcoin and Diamond, were securities.

Dearie, however, stated that the laws were meant to be interpreted flexibly and that not all ICOs could be considered securities. The same could be said for the My Big Coin case, as the classification of the cryptocurrency as a commodity is confined to the case at hand and does not extend to other crypto assets currently available on the market.

Image credit: By M2545 - Own work, CC BY-SA 3.0


This article originally appeared on Bitcoin Magazine.

Former UBS Bankers Are Building a Crypto Bank in Switzerland

Seba Crypto AG

Seba Crypto AG (SEBA) has raised 100 million Swiss francs ($103 million) for the creation of a regulated bank that lets customers trade fiat for digital currency.

The Zug-based startup is headed by former UBS managers Guido Buehler, who serves as CEO, and Andreas Amschwand, who serves as chairman.

SEBA will manage cryptocurrency trading and investments for banks and investors. It will also provide corporate financing services among which are technical guidance on initial coin offerings, cryptocurrency services to conventional clients and groups, and banking services to traditional corporate clients.

“SEBA wants to bridge the gap between traditional banking and the new world of crypto,” Buehler explained to Business Insider.

“With safety, transparency and performance as core values, our ambition is to become a market leader in the convergence of traditional finance with the crypto economy.”

Efforts at translating its financial base into an entity are now dependent on being granted a banking license from the Swiss Financial Market Supervisory Authority (FINMA).

From the creation of a digital ID for citizens built on the Ethereum blockchain to the acceptance of bitcoin payments for municipal services, the Swiss town of Zug has become known as the "crypto valley" of the world.

More than 500 blockchain startups call the town of Zug home, but as the industry has grown, it has faced restrictive banking services, forcing companies to look abroad for banking services, until mortgage bank Hypothekarbank Lenzburg opened its arms to the industry three months ago.

“In Switzerland, we have the commitment from various authorities to establish a comprehensive regulatory environment for the development of blockchain technology and the sustainable, stable, growth of crypto assets,” Amschwand explained in a statement.

“This makes Switzerland the ideal place to launch a new financial services paradigm.”

The eclectic group of investors who have a stake in the business includes Swiss-based BlackRiver Asset Management and Hong Kong-based Summer Capital among other financial backers from Switzerland, Malaysia, Hong Kong, China and Singapore.


This article originally appeared on Bitcoin Magazine.